Document:

LOAN AND SECURITY AGREEMENT

                                  by and among

                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.,
                          KEYSTONE WIRE PRODUCTS INC.,
                       ENGINEERED WIRE PRODUCTS, INC., and
                           F V STEEL AND WIRE COMPANY,

                                  as Borrowers,

                   THE LENDERS FROM TIME TO TIME PARTY HERETO

                                   as Lenders,

                 WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL)

                            as Administrative Agent,

                                       and

                          WACHOVIA CAPITAL MARKETS, LLC

                  as Sole Lead Arranger, Manager and Bookrunner

                             Dated: August 31, 2005

<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
                                                                                                          Page

<S>               <C>                                                                                            <C>
SECTION 1.        DEFINITIONS.....................................................................................1

SECTION 2.        CREDIT FACILITIES..............................................................................26

         2.1      Loans..........................................................................................26
         2.2      Letters of Credit..............................................................................27
         2.3      Term Loans.....................................................................................31
         2.4      Commitments....................................................................................33

SECTION 3.        INTEREST AND FEES..............................................................................33

         3.1      Interest.......................................................................................33
         3.2      Fees...........................................................................................34
         3.3      Changes in Laws and Increased Costs of Loans...................................................35

SECTION 4.        CONDITIONS PRECEDENT...........................................................................37

         4.1      Conditions Precedent to Initial Loans and Letters of Credit....................................37
         4.2      Conditions Precedent to All Loans and Letters of Credit........................................39

SECTION 5.        GRANT AND PERFECTION OF SECURITY INTEREST......................................................40

         5.1      Grant of Security Interest.....................................................................40
         5.2      Perfection of Security Interests...............................................................42

SECTION 6.        COLLECTION AND ADMINISTRATION..................................................................46

         6.1      Borrowers' Loan Accounts.......................................................................46
         6.2      Statements.....................................................................................46
         6.3      Collection of Accounts.........................................................................46
         6.4      Payments.......................................................................................47
         6.5      Taxes..........................................................................................48
         6.6      Authorization to Make Loans....................................................................50
         6.7      Use of Proceeds................................................................................51
         6.8      Appointment of Administrative Borrower as Agent for Requesting Loans and Receipts of
                  Loans and Statements...........................................................................51
         6.9      Pro Rata Treatment.............................................................................52
         6.10     Sharing of Payments, Etc.......................................................................52
         6.11     Settlement Procedures..........................................................................53
         6.12     Obligations Several; Independent Nature of Lenders' Rights.....................................55

SECTION 7.        COLLATERAL REPORTING AND COVENANTS.............................................................55

         7.1      Collateral Reporting...........................................................................55
         7.2      Accounts Covenants.............................................................................56
         7.3      Inventory Covenants............................................................................57
         7.4      Equipment and Real Property Covenants..........................................................58
         7.5      Power of Attorney..............................................................................58
         7.6      Right to Cure..................................................................................59
         7.7      Access to Premises.............................................................................59

SECTION 8.        REPRESENTATIONS AND WARRANTIES.................................................................60

         8.1      Corporate Existence, Power and Authority.......................................................60
         8.2      Name; State of Organization; Chief Executive Office; Collateral Locations......................60
         8.3      Financial Statements; No Material Adverse Change...............................................61
         8.4      Priority of Liens; Title to Properties.........................................................61
         8.5      Tax Returns....................................................................................61
         8.6      Litigation.....................................................................................62
         8.7      Compliance with Other Agreements and Applicable Laws...........................................62
         8.8      Environmental Compliance.......................................................................62
         8.9      Employee Benefits..............................................................................63
         8.10     Bank Accounts..................................................................................64
         8.11     Intellectual Property..........................................................................64
         8.12     Subsidiaries; Affiliates; Capitalization; Solvency.............................................65
         8.13     Labor Disputes.................................................................................65
         8.14     Restrictions on Subsidiaries...................................................................66
         8.15     Material Contracts.............................................................................66
         8.16     Payable Practices..............................................................................66
         8.17     Plan of Reorganization.........................................................................66
         8.18     Senior Indebtedness............................................................................66
         8.19     Accuracy and Completeness of Information.......................................................66
         8.20     Survival of Warranties; Cumulative.............................................................67

SECTION 9.        AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................67

         9.1      Maintenance of Existence.......................................................................67
         9.2      New Collateral Locations.......................................................................67
         9.3      Compliance with Laws, Regulations, Etc.........................................................68
         9.4      Payment of Taxes and Claims....................................................................69
         9.5      Insurance......................................................................................69
         9.6      Financial Statements and Other Information.....................................................69
         9.7      Sale of Assets, Consolidation, Merger, Dissolution, Etc........................................71
         9.8      Encumbrances...................................................................................74
         9.9      Indebtedness...................................................................................76
         9.10     Loans, Investments, Etc........................................................................78
         9.11     Dividends and Redemptions......................................................................80
         9.12     Transactions with Affiliates...................................................................81
         9.13     Compliance with ERISA..........................................................................81
         9.14     End of Fiscal Years; Fiscal Quarters...........................................................82
         9.15     Change in Business.............................................................................82
         9.16     Limitation of Restrictions Affecting Subsidiaries..............................................82
         9.17     Minimum EBITDAR................................................................................82
         9.18     Minimum Fixed Charge Coverage Ratio............................................................83
         9.19     Minimum Excess Availability....................................................................83
         9.20     License Agreements.............................................................................83
         9.21     Foreign Assets Control Regulations, Etc........................................................84
         9.22     After Acquired Real Property...................................................................84
         9.23     Costs and Expenses.............................................................................85
         9.24     Plan of Reorganization.........................................................................85
         9.25     Further Assurances.............................................................................85

SECTION 10.       EVENTS OF DEFAULT AND REMEDIES.................................................................86

         10.1     Events of Default..............................................................................86
         10.2     Remedies.......................................................................................88

SECTION 11.       JURY TRIAL WAIVER; OTHER WAIVERS  AND CONSENTS; GOVERNING LAW..................................91

         11.1     Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver..........................91
         11.2     Waiver of Notices..............................................................................93
         11.3     Amendments and Waivers.........................................................................93
         11.4     Waiver of Counterclaims........................................................................95
         11.5     Indemnification................................................................................95

SECTION 12.       THE AGENT......................................................................................96

         12.1     Appointment, Powers and Immunities.............................................................96
         12.2     Reliance by Agent..............................................................................96
         12.3     Events of Default..............................................................................96
         12.4     Wachovia in its Individual Capacity............................................................97
         12.5     Indemnification................................................................................97
         12.6     Non-Reliance on Agent and Other Lenders........................................................97
         12.7     Failure to Act.................................................................................98
         12.8     Additional Loans...............................................................................98
         12.9     Concerning the Collateral and the Related Financing Agreements.................................99
         12.10    Field Audit, Examination Reports and other Information; Disclaimer by Lenders..................99
         12.11    Collateral Matters.............................................................................99
         12.12    Agency for Perfection.........................................................................101
         12.13    Successor Agent...............................................................................101
         12.14    Other Agent Designations......................................................................102

SECTION 13.       TERM OF AGREEMENT; MISCELLANEOUS..............................................................102

         13.1     Term..........................................................................................102
         13.2     Interpretative Provisions.....................................................................104
         13.3     Notices.......................................................................................105
         13.4     Partial Invalidity............................................................................106
         13.5     Confidentiality...............................................................................107
         13.6     Successors....................................................................................108
         13.7     Assignments; Participations...................................................................108
         13.8     Entire Agreement..............................................................................110
         13.9     USA Patriot Act...............................................................................110
         13.10    Counterparts, Etc.............................................................................110

SECTION 14.       CROSS-GUARANTY................................................................................110

         14.1     Cross-Guaranty................................................................................110
         14.2     Waivers by Borrowers..........................................................................111
         14.3     Benefit of Guaranty...........................................................................111
         14.4     Waiver of Subrogation, Etc....................................................................111
         14.5     Election of Remedies..........................................................................112
         14.6     Limitation....................................................................................112
         14.7     Contribution with Respect to Guaranty Obligations.............................................113
         14.8     Liability Cumulative..........................................................................113
         14.9     Subrogation...................................................................................114
</TABLE>

<PAGE>

                                      INDEX
                                       TO
                             EXHIBITS AND SCHEDULES

     Exhibit A                         Form of Assignment and Acceptance
     Exhibit B                         Information Certificate
     Exhibit C                         Form of Compliance Certificate
     Exhibit D                         Closing Checklist
     Schedule 1.37                     Existing Lenders
     Schedule 1.38                     Existing Letters of Credit

<PAGE>

                           LOAN AND SECURITY AGREEMENT

     This Loan and Security  Agreement  dated August 31, 2005 is entered into by
and  among  Keystone  Consolidated  Industries,  Inc.,  a  Delaware  corporation
("Keystone"),  Keystone  Wire  Products  Inc., a Delaware  corporation  ("KWP"),
Engineered Wire Products,  Inc., an Ohio corporation ("EWP"), F V Steel and Wire
Company, a Wisconsin  corporation ("F V Steel" and, together with Keystone,  KWP
and EWP, each  individually a "Borrower"  and  collectively,  "Borrowers"),  the
parties  hereto  from time to time as  lenders,  whether  by  execution  of this
Agreement or an Assignment and  Acceptance  (each  individually,  a "Lender" and
collectively,  "Lenders" as hereinafter  further  defined) and Wachovia  Capital
Finance Corporation (Central), an Illinois corporation, in its capacity as agent
for Lenders (in such capacity, "Agent" as hereinafter further defined).

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

     WHEREAS,  Borrowers  have  requested  that  Agent and  Lenders  enter  into
financing  arrangements with Borrowers  pursuant to which Lenders may make loans
and provide other financial accommodations to Borrowers; and

     WHEREAS,  each Lender is willing to agree  (severally  and not  jointly) to
make such loans and provide such financial  accommodations to Borrowers on a pro
rata basis  according  to its  Commitment  (as  defined  below) on the terms and
conditions  set forth herein and Agent is willing to act as agent for Lenders on
the terms and conditions set forth herein and the other Financing Agreements;

     NOW,  THEREFORE,  in consideration of the mutual  conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

SECTION 1.........DEFINITIONS

     For  purposes  of this  Agreement,  the  following  terms  shall  have  the
respective meanings given to them below:

     1.1 "Accounts"  shall mean, as to each Borrower and Guarantor,  all present
and  future  rights of such  Borrower  and  Guarantor  to  payment of a monetary
obligation,  whether or not earned by  performance,  which is not  evidenced  by
chattel paper or an instrument, (a) for property that has been or is to be sold,
leased, licensed,  assigned, or otherwise disposed of, (b) for services rendered
or to be rendered, (c) for a secondary obligation incurred or to be incurred, or
(d) arising out of the use of a credit or charge card or  information  contained
on or for use with the card.

     1.2 "Adjusted  Eurodollar  Rate" shall mean,  with respect to each Interest
Period  for any  Eurodollar  Rate  Loan  comprising  part of the same  borrowing
(including conversions,  extensions and renewals), the rate per annum determined
by dividing (a) the London  Interbank  Offered Rate for such Interest  Period by
(b) a percentage  equal to: (i) one (1) minus (ii) the Reserve  Percentage.  For
purposes hereof,  "Reserve  Percentage" shall mean for any day, that percentage,
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any  successor),  as
such regulation may be amended from time to time or any successor regulation, as
the maximum  reserve  requirement  (including,  without  limitation,  any basic,
supplemental,  emergency, special, or marginal reserves) applicable with respect
to Eurocurrency  liabilities as that term is defined in Regulation D (or against
any other category of liabilities  that includes  deposits by reference to which
the interest rate of Eurodollar Loans is determined),  whether or not any Lender
has any  Eurocurrency  liabilities  subject to such reserve  requirement at that
time.  Eurodollar Loans shall be deemed to constitute  Eurocurrency  liabilities
and as such shall be deemed subject to reserve  requirements without benefits of
credits for proration,  exceptions or offsets that may be available from time to
time to a Lender. The Adjusted  Eurodollar Rate shall be adjusted  automatically
on and as of the effective date of any change in the Reserve Percentage.

     1.3 "Adjusted Tangible Net Worth" shall mean as to any Person, at any time,
in accordance with GAAP (except as otherwise specifically set forth below), on a
consolidated  basis for such Person and its  Subsidiaries  (if any),  the amount
equal to the difference between:  (a) the aggregate net book value of all assets
of such Person and its Subsidiaries (excluding the value of patents, trademarks,
tradenames,  copyrights,  licenses,  goodwill,  leasehold improvements,  prepaid
assets and other intangible assets), calculating the book value of inventory for
this  purpose on a  first-in-first-out  basis,  after  deducting  from such book
values all appropriate  reserves in accordance with GAAP (including all reserves
for doubtful receivables,  obsolescence,  depreciation and amortization) and (b)
the aggregate amount of the  Indebtedness  and other  liabilities of such Person
and its Subsidiaries (including tax and other proper accruals).

     1.4 "Administrative  Borrower" shall mean Keystone Consolidated Industries,
Inc.,  a Delaware  corporation  in its  capacity as  Administrative  Borrower on
behalf of itself and the other  Borrowers  pursuant to Section 6.8 hereof and it
successors and assigns in such capacity.

     1.5 "Affiliate" shall mean, with respect to a specified  Person,  any other
Person  which  directly  or  indirectly,  through  one or  more  intermediaries,
controls or is  controlled by or is under common  control with such Person,  and
without limiting the generality of the foregoing,  includes (a) any Person which
beneficially  owns or holds  ten  (10%)  percent  or more of any class of Voting
Stock of such Person or other equity interests in such Person, (b) any Person of
which such Person  beneficially  owns or holds ten (10%)  percent or more of any
class of Voting  Stock or in which such  Person  beneficially  owns or holds ten
(10%) percent or more of the equity  interests and (c) any director or executive
officer of such Person. For the purposes of this definition,  the term "control"
(including  with  correlative  meanings,  the terms  "controlled  by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management and policies of such Person,  whether through the ownership of Voting
Stock, by agreement or otherwise.

     1.6 "Agent" shall mean Wachovia Capital Finance Corporation  (Central),  in
its capacity as agent on behalf of Lenders  pursuant to the terms hereof and any
replacement or successor agent hereunder.

     1.7 "Agent Payment  Account" shall mean account no.  5000000030266 of Agent
at Wachovia Bank, National Association,  or such other account of Agent as Agent
may from time to time designate to Administrative  Borrower as the Agent Payment
Account for purposes of this Agreement and the other Financing Agreements.

     1.8 "Aggregate  Suppressed  Availability" shall mean, as to Borrowers,  the
aggregate amount  calculated at any date equal to: (a) the sum of each Borrowing
Base of the  Borrowers  (after  giving  effect to any  Reserves  other  than any
Reserves in respect of Letter of Credit Obligations),  minus (b) the sum of: (i)
the outstanding principal amount of the Revolving Loans, plus (ii) the amount of
all Reserves then established in respect of Letter of Credit  Obligations,  plus
(iii) the aggregate amount of all then outstanding and unpaid trade payables and
other  obligations of Borrowers which are outstanding  more than sixty (60) days
past due as of the end of the immediately  preceding month or at Agent's option,
as of a more  recent  date based on such  reports as Agent may from time to time
specify  (other than trade  payables or other  obligations  being  contested  or
disputed by Borrowers in good faith), plus (iv) without duplication,  the amount
of checks issued by Borrowers to pay trade payables and other  obligations which
are  more  than  sixty  (60)  days  past  due as of the  end of the  immediately
preceding  month or at Agent's  option,  as of a more  recent date based on such
reports as Agent may from time to time  specify  (other  than trade  payables or
other obligations  being contested or disputed by Borrowers in good faith),  but
not yet sent.

     1.9 "Agreement"  shall mean this Loan and Security  Agreement,  as amended,
restated or otherwise modified from time to time.

     1.10 "Applicable  Margins" shall mean, at any time, as to the Interest Rate
for Prime Rate Loans,  Eurodollar Rate Loans and the letter of credit fee on the
outstanding undrawn amount of Letter of Credit  Obligations,  the applicable row
of per annum rates set forth below if the average daily Excess  Availability for
all Borrowers in the aggregate during the immediately preceding calendar quarter
is at or within the amounts indicated for such row:

<TABLE>
<CAPTION>
                           Applicable Margin for   Applicable Margin for
                           Prime Rate Loans that   Eurodollar Rate Loans    Applicable Margin for   Applicable Margin for
                            are Revolving Loans     that are Revolving      Eurodollar Rate Loans      Letter of Credit
                                                             ----------
   Excess Availability         and Term Loans              Loans             that are Term Loans         Obligations
   -------------------         --------------              -----                      ----------         -----------
<S>    <C>                         <C>                      <C>                     <C>                      <C>
(a)    $25,000,000 or              0.00%                    2.00%                   2.25%                    2.25%
       more
(b)    Greater than or             0.25%                    2.25%                   2.50%                    2.50%
       equal to
       $15,000,000 and
       less than
       $25,000,000
(c)    Less than                   0.50%                    2.50%                   2.75%                    2.75%
       $15,000,000
</TABLE>

provided  however,  that,  beginning on the date hereof and  continuing  through
January  31,  2006,  the  Applicable  Margins  shall be those  per  annum  rates
designated in row (b) above.  Commencing on the first  Business Day of February,
2006 and  thereafter  on the  first  Business  Day  immediately  following  each
calendar quarter,  the Applicable Margins shall be adjusted based on the average
daily Excess  Availability  for all  Borrowers in the aggregate for the calendar
quarter most recently ended.

     1.11  "Assignment and  Acceptance"  shall mean an Assignment and Acceptance
substantially   in  the  form  of  Exhibit  A  attached   hereto   (with  blanks
appropriately  completed) delivered to Agent in connection with an assignment of
a Lender's interest  hereunder in accordance with the provisions of Section 13.7
hereof.

     1.12 "Bankruptcy  Court" shall mean the United States  Bankruptcy Court for
the Eastern District of Wisconsin.

     1.13  "Blocked  Accounts"  shall have the  meaning set forth in Section 6.3
hereof.

     1.14 "Borrowers"  shall mean,  collectively,  the following  (together with
their respective successors and assigns): (a) Keystone Consolidated  Industries,
Inc.,  a Delaware  corporation;  (b)  Keystone  Wire  Products  Inc., a Delaware
corporation;  (c) Engineered Wire Products,  Inc., an Ohio corporation;  (d) F V
Steel and Wire Company, a Wisconsin  corporation;  and (e) any other Person that
at any time  after the date  hereof  becomes a Borrower  with the prior  written
consent of Agent;  each  sometimes  being referred to herein  individually  as a
"Borrower".

     1.15  "Borrowing  Base" shall mean, at any time, as to each  Borrower,  the
amount equal to:

     (a) the amount  equal to: (i)  eighty-five  (85%)  percent of the  Eligible
Accounts of such Borrower,  plus (ii) the lesser of (A) the Inventory Loan Limit
for such Borrower or (B) the sum of: (1) the lesser of sixty-five  (65%) percent
multiplied by the Value of the Eligible Inventory of such Borrower consisting of
finished  goods or  eighty-five  (85%)  percent of the Net  Recovery  Percentage
multiplied by the Value of such Eligible Inventory, plus (2) the lesser of sixty
(60%) percent multiplied by the Value of the Eligible Inventory of such Borrower
consisting  of raw  materials or  eighty-five  (85%) percent of the Net Recovery
Percentage multiplied by the Value of such Inventory, minus

     (b) Reserves attributable to such Borrower.

For purposes only of applying the Inventory Loan Limit, Agent may treat the then
undrawn  amounts of outstanding  Letters of Credit for the purpose of purchasing
Eligible  Inventory as Revolving  Loans to the extent Agent is in effect  basing
the  issuance  of the  Letter of Credit on the Value of the  Eligible  Inventory
being purchased with such Letter of Credit. In determining the actual amounts of
such  Letter  of Credit to be so  treated  for  purposes  of the  sublimit,  the
outstanding  Revolving  Loans  and  Reserves  shall be  attributed  first to any
components of the lending  formulas set forth above that are not subject to such
sublimit,  before being  attributed to the  components  of the lending  formulas
subject to such  sublimit.  The amounts of Eligible  Inventory  of any  Borrower
shall,  at Agent's  option,  be determined  based on the lesser of the amount of
Inventory  set forth in the general  ledger of such  Borrower  or the  perpetual
inventory record maintained by such Borrower.

     1.16  "Business Day" shall mean any day other than a Saturday,  Sunday,  or
other day on which  commercial  banks are  authorized or required to close under
the laws of the State of Illinois or the State of North  Carolina,  and a day on
which  Agent  is  open  for  the  transaction  of  business,  except  that  if a
determination  of a Business Day shall relate to any Eurodollar Rate Loans,  the
term  Business  Day shall  also  exclude  any day on which  banks are closed for
dealings in dollar deposits in the London  interbank  market or other applicable
Eurodollar Rate market.

     1.17 "Capital  Expenditures"  means all  expenditures  during any measuring
period for any fixed asset or improvements or  replacements,  substitutions,  or
additions thereto that have a useful life of more than one year and are required
to be capitalized under GAAP.

     1.18 "Capital  Leases"  shall mean, as applied to any Person,  any lease of
(or any  agreement  conveying  the  right to use) any  property  (whether  real,
personal or mixed) by such Person as lessee which in  accordance  with GAAP,  is
required to be  accounted  for as a capital  lease on the balance  sheet of such
Person.

     1.19 "Capital  Stock" shall mean,  with respect to any Person,  any and all
shares,  interests,  participations or other equivalents (however designated) of
such Person's capital stock or partnership,  limited  liability company or other
equity interests at any time  outstanding,  and any and all rights,  warrants or
options  exchangeable  for or  convertible  into  such  capital  stock  or other
interests  (but  excluding  any  debt  security  that  is  exchangeable  for  or
convertible into such capital stock).

     1.20 "Cash  Equivalents"  shall  mean,  at any time,  (a) any  evidence  of
Indebtedness  with a  maturity  date of one  hundred  eighty  (180) days or less
issued or  directly  and fully  guaranteed  or insured  by the United  States of
America or any agency or instrumentality thereof; provided, that, the full faith
and credit of the United  States of America is pledged in support  thereof;  (b)
certificates of deposit or bankers'  acceptances  with a maturity of one hundred
eighty (180) days or less of any financial  institution  that is a member of the
Federal Reserve System having combined capital and surplus and undivided profits
of not less than  $500,000,000;  (c) commercial paper  (including  variable rate
demand  notes)  with a  maturity  of  ninety  (90)  days  or  less  issued  by a
corporation  (except an Affiliate of any Borrower or Guarantor)  organized under
the laws of any  State of the  United  States  of  America  or the  District  of
Columbia and rated at least A-1 by Standard & Poor's Ratings Service, a division
of The McGraw-Hill Companies, Inc. or at least P-1 by Moody's Investors Service,
Inc.; (d) repurchase  obligations  with a term of not more than thirty (30) days
for  underlying  securities  of the types  described in clause (a) above entered
into with any  financial  institution  having  combined  capital and surplus and
undivided profits of not less than $500,000,000;  (e) repurchase  agreements and
reverse repurchase  agreements  relating to marketable direct obligations issued
or  unconditionally  guaranteed by the United States of America or issued by any
governmental  agency  thereof  and  backed by the full  faith and  credit of the
United States of America,  in each case maturing within ninety (90) days or less
from the date of  acquisition;  provided,  that,  the  terms of such  agreements
comply with the  guidelines  set forth in the Federal  Financial  Agreements  of
Depository  Institutions  with Securities  Dealers and Others, as adopted by the
Comptroller  of the Currency on October 31, 1985;  and (f)  investments in money
market funds and mutual funds which invest  substantially all of their assets in
securities of the types described in clauses (a) through (e) above.

     1.21 "Change of Control" shall mean (a) the transfer (in one transaction or
a series  of  transactions)  of all or  substantially  all of the  assets of any
Borrower  or  Guarantor  to any Person or group (as such term is used in Section
13(d)(3) of the  Exchange  Act),  other than as permitted in Section 9.7 hereof;
(b) the  liquidation or dissolution of any Borrower or Guarantor or the adoption
of a plan by the  stockholders  of any  Borrower  or  Guarantor  relating to the
dissolution  or  liquidation  of  such  Borrower  or  Guarantor,  other  than as
permitted in Section 9.7 hereof;  (c) the acquisition by any Person or group (as
such term is used in Section  13(d)(3) of the Exchange  Act),  except for one or
more Permitted Holders, of beneficial  ownership,  directly or indirectly,  of a
majority  of the  voting  power of the  total  outstanding  Voting  Stock of the
Parent; (d) the failure of the Permitted Holders to own greater than fifty (50%)
percent of the voting power of the total outstanding  Voting Stock of Parent; or
(e) the failure of Parent to own  directly  or  indirectly  one  hundred  (100%)
percent of the voting power of the total  outstanding  Voting Stock of any other
Borrower or Guarantor.

     1.22 "Code" shall mean the Internal  Revenue Code of 1986,  as the same now
exists or may from time to time  hereafter be amended,  modified,  recodified or
supplemented,   together  with  all  rules,   regulations  and   interpretations
thereunder or related thereto.

     1.23 "Collateral" shall have the meaning set forth in Section 5 hereof.

     1.24 "Collateral  Access Agreement" shall mean an agreement in writing,  in
form and substance reasonably satisfactory to Agent, from any lessor of premises
to any  Borrower or  Guarantor,  or any other person to whom any  Collateral  is
consigned or who has custody, control or possession of any such Collateral or is
otherwise the owner or operator of any premises on which any of such  Collateral
is located, in favor of Agent with respect to the Collateral at such premises or
otherwise in the custody,  control or  possession  of such lessor,  consignee or
other person.

     1.25 "Commitment" shall mean, at any time, as to each Lender, the principal
amount set forth below such Lender's  signature on the  signatures  pages hereto
designated as the  Commitment or on Schedule 1 to the  Assignment and Acceptance
Agreement  pursuant to which such Lender became a Lender hereunder in accordance
with the  provisions  of Section 13.7 hereof,  as the same may be adjusted  from
time to time in accordance with the terms hereof;  sometimes being  collectively
referred to herein as "Commitments".

     1.26  "Confirmation  Order"  shall mean the order of the  Bankruptcy  Court
confirming  the Plan of  Reorganization  pursuant to Section  1129 of the United
States Bankruptcy Code.

     1.27 "Credit  Facility" shall mean the Loans and Letters of Credit provided
to or for the benefit of any  Borrower  pursuant to  Sections  2.1,  2.2 and 2.3
hereof.

     1.28 "Default"  shall mean an act,  condition or event which with notice or
passage of time or both would constitute an Event of Default.

     1.29  "Defaulting  Lender" shall have the meaning set forth in Section 6.11
hereof.

     1.30  "Deposit  Account  Control  Agreement"  shall  mean an  agreement  in
writing,  in form and substance  reasonably  satisfactory to Agent, by and among
Agent, the Borrower or Guarantor with a deposit account at any bank and the bank
at which such deposit account is at any time maintained which provides that such
bank will comply with instructions  originated by Agent directing disposition of
the funds in the deposit  account  without  further  consent by such Borrower or
Guarantor  and has such  other  terms and  conditions  as Agent  may  reasonably
require.

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

     1.32 "Eligible  Accounts" shall mean Accounts created by a Borrower that in
each case satisfy the criteria  set forth below as  determined  by Agent in good
faith. In general, Accounts shall be Eligible Accounts if:

     (a) such Accounts  arise from the actual and bona fide sale and delivery of
goods by such Borrower or rendition of services by such Borrower in the ordinary
course of its business  which  transactions  are  completed in accordance in all
material  respects  with the terms and  provisions  contained  in any  documents
related thereto;

     (b) such  Accounts are not unpaid more than ninety (90) days after the date
of the original invoice for them;

     (c) such Accounts comply with the terms and conditions contained in Section
7.2(b) of this Agreement;

     (d) such Accounts do not arise from sales on consignment,  guaranteed sale,
sale and return,  sale on  approval,  or other terms under which  payment by the
account debtor are conditional or contingent;

     (e) the chief  executive  office of the account debtor with respect to such
Accounts  is located  in the  United  States of America or Canada or, at Agent's
option,  if the chief  executive  office and principal  place of business of the
account debtor with respect to such Accounts is located other than in the United
States of  America  or  Canada,  then if  either:  (i) the  account  debtor  has
delivered to such Borrower an  irrevocable  letter of credit issued or confirmed
by a bank reasonably satisfactory to Agent and payable only in the United States
of America and in U.S.  dollars,  sufficient to cover such Account,  in form and
substance  reasonably  satisfactory  to Agent  and if  required  by  Agent,  the
original of such letter of credit has been  delivered to Agent or Agent's  agent
and the issuer thereof, and such Borrower has complied with the terms of Section
5.2(f)  hereof with respect to the  assignment of the proceeds of such letter of
credit to Agent or naming Agent as transferee beneficiary  thereunder,  as Agent
may  specify,  or (ii) such  Account is subject to credit  insurance  payable to
Agent issued by an insurer and on terms and in an amount  reasonably  acceptable
to Agent,  or (iii)  such  Account is  otherwise  reasonably  acceptable  in all
material respects to Agent (subject to such lending formula with respect thereto
as Agent may determine);

     (f) such  Accounts  do not  consist  of  progress  billings  (such that the
obligation of the account  debtors with respect to such Accounts is  conditioned
upon such Borrower's  satisfactory  completion of any further  performance under
the  agreement  giving  rise  thereto),  bill and  hold  invoices  or  retainage
invoices,  except as to bill and hold invoices,  if Agent shall have received an
agreement in writing from the account debtor,  in form and substance  reasonably
satisfactory to Agent,  confirming the  unconditional  obligation of the account
debtor to take the goods related thereto and pay such invoice;

     (g) to the extent that the account debtor with respect to such Accounts has
not  asserted a  counterclaim,  defense  or dispute  and is not owed or does not
claim  to be owed any  amounts  that may give  rise to any  right of  setoff  or
recoupment  against  such  Accounts  (but the  portion of the  Accounts  of such
account debtor in excess of the amount at any time and from time to time owed by
such  Borrower to such account  debtor or claimed  owed by such  account  debtor
shall  be  deemed  Eligible  Accounts);  (h)  there  are  no  facts,  events  or
occurrences which would impair the validity, enforceability or collectability of
such Accounts or reduce the amount payable or delay payment thereunder;

     (i) such  Accounts are subject to the first  priority,  valid and perfected
security  interest of Agent and any goods  giving rise thereto are not, and were
not at the  time  of the  sale  thereof,  subject  to  any  liens  except  those
non-consensual statutory liens permitted in this Agreement;

     (j) neither  the account  debtor nor any officer or director of the account
debtor with  respect to such  Accounts is an officer,  director,  agent or other
Affiliate of any Borrower or Guarantor;

     (k) the account  debtors with respect to such  Accounts are not any foreign
government,  the United  States of America,  any State,  political  subdivision,
department,  agency or instrumentality thereof, unless, if the account debtor is
the United  States of America,  any State,  political  subdivision,  department,
agency or instrumentality  thereof, upon Agent's request, the Federal Assignment
of  Claims  Act of 1940,  as  amended  or any  similar  State or local  law,  if
applicable, has been complied with in a manner satisfactory to Agent;

     (l) there are no  proceedings  or actions  which are  threatened or pending
against the account debtors with respect to such Accounts which could reasonably
be  expected  to  result in any  material  adverse  change  in any such  account
debtor's financial condition  (including,  without  limitation,  any bankruptcy,
dissolution, liquidation, reorganization or similar proceeding);

     (m) the aggregate  amount of such Accounts owing by a single account debtor
or its Affiliates do not  constitute  more than twenty (20%) percent (or, in the
case of Tractor  Supply,  thirty (30%)  percent) of the aggregate  amount of all
otherwise  Eligible  Accounts  (but the portion of the Accounts not in excess of
the applicable percentages may be deemed Eligible Accounts);

     (n) such Accounts are not owed by an account debtor who has Accounts unpaid
more  than  sixty  (60) days  after the  original  invoice  date for them  which
constitute  more than twenty (20%)  percent (or, in the case of Tractor  Supply,
thirty (30%) percent) of the total Accounts of such account debtor;

     (o) the account debtor is not located in a state  requiring the filing of a
Notice of Business  Activities  Report or similar report in order to permit such
Borrower to seek judicial  enforcement in such State of payment of such Account,
unless such  Borrower has  qualified to do business in such state or has filed a
Notice of Business  Activities  Report or equivalent report for the then current
year or such  failure to file and  inability  to seek  judicial  enforcement  is
capable of being remedied without any material delay or material cost;

     (p) such Accounts are owed by account  debtors whose total  indebtedness to
such  Borrower  does not exceed the credit  limit with  respect to such  account
debtors as  determined  by such  Borrower  from time to time, to the extent such
credit limit as to any account debtor is established consistent with the current
practices  of such  Borrower  as of the date  hereof  and such  credit  limit is
acceptable  to Agent  (but the  portion  of the  Accounts  not in excess of such
credit limit may be deemed Eligible Accounts); and

     (q) such  Accounts are not owed by account  debtors which Agent has advised
Administrative Borrower in writing are not deemed to be creditworthy by Agent.

The criteria  for Eligible  Accounts set forth above may only be changed and any
new  criteria for Eligible  Accounts  may only be  established  by Agent in good
faith based on either:  (i) an event,  condition or other  circumstance  arising
after  the date  hereof,  or (ii) an  event,  condition  or  other  circumstance
existing on the date hereof to the extent Agent has no actual knowledge  thereof
prior  to the date  hereof,  in  either  case  under  clause  (i) or (ii)  which
materially and adversely  affects or could  reasonably be expected to materially
and adversely affect the Accounts in the good faith  determination of Agent. Any
Accounts  that  are not  Eligible  Accounts  shall  nevertheless  be part of the
Collateral.

     1.33 "Eligible  Inventory"  shall mean, as to each Borrower (other than F V
Steel),  Inventory of such Borrower consisting of finished goods held for resale
in the ordinary  course of the business of such  Borrower and raw  materials for
such finished  goods,  that in each case satisfy the criteria set forth below as
determined  by Agent in good faith.  In general,  Eligible  Inventory  shall not
include:  (a)  work-in-process;  (b)  components  which are not part of finished
goods; (c) spare parts for equipment;  (d) packaging and shipping materials; (e)
supplies used or consumed in such Borrower's business; (f) Inventory at premises
other than those owned or leased and controlled by any Borrower unless Agent has
received a  Collateral  Access  Agreement  in respect  of such  premises  or, in
Agent's sole discretion,  Agent has elected to implement a Reserve in respect of
the obligations of such Borrower at such premises in such amounts as Agent shall
determine in its good faith;  (g)  Inventory  subject to a security  interest or
lien in favor of any Person  other  than  Agent  except  those  statutory  liens
permitted  in this  Agreement;  (h)  bill  and hold  goods;  (i)  unserviceable,
obsolete  or slow moving  Inventory;  (j)  Inventory  that is not subject to the
first priority,  valid and perfected  security  interest of Agent;  (k) returned
(unless otherwise  constituting  Eligible  Inventory),  damaged and/or defective
Inventory;  (l)  Inventory  purchased or sold on  consignment  and (m) Inventory
located  outside  the  United  States of  America.  The  criteria  for  Eligible
Inventory  set forth above may only be changed and any new criteria for Eligible
Inventory may only be established by Agent in good faith based on either: (i) an
event, condition or other circumstance arising after the date hereof, or (ii) an
event, condition or other circumstance existing on the date hereof to the extent
Agent has no actual knowledge  thereof prior to the date hereof,  in either case
under  clause  (i) or (ii)  which  materially  and  adversely  affects  or could
reasonably be expected to materially  and adversely  affect the Inventory in the
good faith  determination of Agent. Any Inventory that is not Eligible Inventory
shall nevertheless be part of the Collateral.

     1.34  "Eligible  Transferee"  shall  mean (a) any  Lender;  (b) the  parent
company of any Lender  and/or any  Affiliate  of such  Lender  which is at least
fifty (50%) percent owned by such Lender or its parent  company;  (c) any person
(whether a corporation,  partnership, trust or otherwise) that is engaged in the
business of making, purchasing, holding or otherwise investing in bank loans and
similar  extensions  of credit in the  ordinary  course of its  business  and is
administered or managed by a Lender or with respect to any Lender that is a fund
which  invests in bank loans and similar  extensions  of credit,  any other fund
that  invests in bank loans and similar  extensions  of credit and is managed by
the same investment advisor as such Lender or by an Affiliate of such investment
advisor,  and in each case is  approved by Agent;  and (d) any other  commercial
bank, financial institution or "accredited investor" (as defined in Regulation D
under the Securities Act of 1933) approved by Agent, provided, that, (i) neither
any  Borrower nor any  Guarantor  or any  Affiliate of any Borrower or Guarantor
shall  qualify  as an  Eligible  Transferee  and  (ii) no  Person  to  whom  any
Indebtedness  which is in any way  subordinated in right of payment to any other
Indebtedness  of  any  Borrower  or  Guarantor  shall  qualify  as  an  Eligible
Transferee, except as Agent may otherwise specifically agree.

     1.35 "Environmental Laws" shall mean all foreign,  Federal, State and local
laws  (including  common law),  legislation,  rules,  codes,  licenses,  permits
(including  any  conditions  imposed  therein),   authorizations,   judicial  or
administrative  decisions,  injunctions  or  agreements  between any Borrower or
Guarantor  and any  Governmental  Authority,  (a) relating to pollution  and the
protection, preservation or restoration of the environment (including air, water
vapor,  surface  water,  ground water,  drinking  water,  drinking water supply,
surface  land,  subsurface  land,  plant and  animal  life or any other  natural
resource), or to human health or safety, (b) relating to the exposure to, or the
use,  storage,  recycling,  treatment,  generation,   manufacture,   processing,
distribution,   transportation,   handling,  labeling,  production,  release  or
disposal, or threatened release, of Hazardous Materials,  or (c) relating to all
laws with  regard  to  recordkeeping,  notification,  disclosure  and  reporting
requirements  respecting  Hazardous  Materials.  The term  "Environmental  Laws"
includes (i) the Federal Comprehensive Environmental Response,  Compensation and
Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act,
the Federal Water  Pollution  Control Act of 1972,  the Federal Clean Water Act,
the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of
1976 (including the Hazardous and Solid Waste Amendments  thereto),  the Federal
Solid Waste Disposal and the Federal Toxic  Substances  Control Act, the Federal
Insecticide,  Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974,  (ii)  applicable  state  counterparts  to such  laws and (iii) any
common law or equitable  doctrine that may impose  liability or obligations  for
injuries or damages  due to, or  threatened  as a result of, the  presence of or
exposure to any Hazardous Materials.

     1.36 "Equipment" shall mean, as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's now owned and hereafter acquired equipment,  wherever
located,  including  machinery,  data processing and computer equipment (whether
owned or licensed and including embedded software),  vehicles, tools, furniture,
fixtures,  all  attachments,  accessions  and property now or hereafter  affixed
thereto or used in connection  therewith,  and  substitutions  and  replacements
thereof, wherever located.

     1.37 "ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
1974,  together with all rules,  regulations and  interpretations  thereunder or
related thereto.

     1.38 "ERISA Affiliate" shall mean any person required to be aggregated with
any Borrower, any Guarantor or any of its or their respective Subsidiaries under
Sections 414(b), 414(c), 414(m) or 414(o) of the Code.

     1.39 "ERISA  Event" shall mean (a) any  "reportable  event",  as defined in
Section 4043(c) of ERISA or the regulations issued thereunder, with respect to a
Pension Plan,  other than events as to which the  requirement of notice has been
waived in  regulations  by the Pension  Benefit  Guaranty  Corporation;  (b) the
adoption of any  amendment to a Pension Plan that would require the provision of
security pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c)
a  complete  or  partial  withdrawal  by any  Borrower,  Guarantor  or any ERISA
Affiliate  from a  Multiemployer  Plan or a  cessation  of  operations  which is
treated as such a withdrawal or  notification  that a  Multiemployer  Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Pension Plan  amendment  as a  termination  under  Section 4041 or 4041A of
ERISA,  or the  commencement  of  proceedings  by the Pension  Benefit  Guaranty
Corporation to terminate a Pension Plan;  (e) an event or condition  which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (f) the
imposition  of any  liability  under  Title IV of ERISA,  other than the Pension
Benefit Guaranty  Corporation premiums due but not delinquent under Section 4007
of ERISA,  upon any  Borrower,  Guarantor  or any ERISA  Affiliate  in excess of
$750,000 and (g) any other event or condition  with respect to a Plan  including
any Pension Plan subject to Title IV of ERISA maintained,  or contributed to, by
any ERISA Affiliate that could  reasonably be expected to result in liability of
any Borrower in excess of $750,000.

     1.40  "Eurodollar  Rate Loans"  shall mean any Loans or portion  thereof on
which  interest is payable based on the Adjusted  Eurodollar  Rate in accordance
with the terms hereof.

     1.41 "Event of Default" shall mean the occurrence or existence of any event
or condition described in Section 10.1 hereof.

     1.42  "EWP"  shall  have the  meaning  set  forth in the  preamble  to this
Agreement.

     1.43 "Excess  Availability"  shall mean,  as to each  Borrower,  the amount
calculated  at any date equal to: (a) the lesser of: (i) the  Borrowing  Base of
such Borrower and (ii) the  Revolving  Loan Limit of such Borrower (in each case
under (i) or (ii) after giving effect to any Reserves other than any Reserves in
respect  of  Letter  of  Credit  Obligations),  minus  (b) the  sum of:  (i) the
outstanding  principal  amount of the Revolving Loans as to such Borrower,  plus
(ii) the amount of all Reserves then  established in respect of Letter of Credit
Obligations  as to such  Borrower,  plus (iii) the aggregate  amount of all then
outstanding  and unpaid trade  payables and other  obligations  of such Borrower
which are  outstanding  more than  sixty (60) days past due as of the end of the
immediately preceding month or at Agent's option, as of a more recent date based
on such  reports  as Agent  may from  time to time  specify  (other  than  trade
payables or other  obligations  being  contested or disputed by such Borrower in
good faith), plus (iv) without duplication,  the amount of checks issued by such
Borrower to pay trade payables and other  obligations  which are more than sixty
(60)  days  past  due as of the end of the  immediately  preceding  month  or at
Agent's option, as of a more recent date based on such reports as Agent may from
time to time  specify  (other  than trade  payables or other  obligations  being
contested or disputed by such Borrower in good faith), but not yet sent.

     1.44  "Excess Cash Flow" means,  without  duplication,  with respect to any
fiscal year of Borrowers and their  Subsidiaries,  consolidated  net income plus
(a)  depreciation,  amortization  and Interest Expense to the extent deducted in
determining  consolidated net income,  plus decreases or minus increases (as the
case may be) in (b) Working Capital,  minus (c) Interest Expense paid or accrued
(excluding any original issue discount,  interest paid in kind or amortized debt
discount,  to the extent included in determining Interest Expense) and scheduled
principal  payments  paid or payable in respect  of  Indebtedness  for  borrowed
money,  plus or minus (as the case may be),  (d)  extraordinary  gains or losses
which are cash items not  included in the  calculation  of net income,  plus (e)
taxes deducted in determining consolidated net income to the extent not paid for
in cash minus (f) Capital Expenditures (excluding the financed portion thereof).

     1.45  "Exchange  Act"  shall  mean  the  Securities  Exchange  Act of 1934,
together with all rules,  regulations and interpretations  thereunder or related
thereto.

     1.46  "Existing  Lenders"  shall mean the  lenders to  Borrowers  listed on
Schedule 1.37 hereto and their respective predecessors, successors and assigns.

     1.47 "Existing Letters of Credit" shall mean, collectively,  the letters of
credit  issued  for the  account of a Borrower  or  Guarantor  or for which such
Borrower or Guarantor is otherwise liable listed on Schedule 1.38 hereto, as the
same now exist or may hereafter be amended,  modified,  supplemented,  extended,
renewed, restated or replaced.

     1.48 "Fee  Letter"  shall mean the letter  agreement,  dated as of the date
hereof, by and among Borrowers and Agent,  setting forth certain fees payable by
Borrowers  to  Agent,  as the same  now  exists  or may  hereafter  be  amended,
modified, supplemented, extended, renewed, restated or replaced.

     1.49 "Financing  Agreements" shall mean,  collectively,  this Agreement and
all notes, guarantees,  security agreements, deposit account control agreements,
investment property control agreements,  intercreditor  agreements and all other
agreements,  documents and  instruments  now or at any time  hereafter  executed
and/or delivered by any Borrower or Guarantor in connection with this Agreement;
provided,  that,  (a) the term  Financing  Agreements  shall  include the Peoria
Intercreditor  Agreement and all Mortgages,  deposit account control  agreements
and similar agreements  executed prior to the date hereof to which Agent and any
Borrower  are a party that have been amended to reflect the  transactions  under
this Agreement and (b) in no event shall the term Financing Agreements be deemed
to include any Hedge Agreement.

     1.50 "Fixed  Charge  Coverage  Ratio" shall mean with respect to any Person
for any fiscal period, the ratio of EBITDAR to Fixed Charges.

     1.51  "Fixed  Charges"  means,  with  respect  to any Person for any fiscal
period,  (a) the aggregate of all Interest  Expense paid or payable  during such
period,  plus (b) scheduled  payments of principal with respect to  Indebtedness
during such period including  scheduled payments with respect to Capital Leases,
plus (c) income  taxes paid or payable in cash during such fiscal  period.  This
definition  of Fixed  Charges  shall  exclude any  scheduled  lump sum  payments
required to be made by Borrowers in 2007, 2008 and 2009 on the Remaining Notes.

     1.52  "Foreign  Lender"  shall mean any Lender that is organized  under the
laws of a  jurisdiction  other than that in which a Borrower is resident for tax
purposes.  For purposes of this definition,  the United States of America,  each
State  thereof  and the  District of Columbia  shall be deemed to  constitute  a
single jurisdiction.

     1.53  "Funding  Bank" shall have the meaning  given to such term in Section
3.3 hereof.

     1.54 "F V Steel"  shall have the meaning set forth in the  preamble to this
Agreement.

     1.55 "GAAP" shall mean  generally  accepted  accounting  principles  in the
United  States of  America  as in  effect  from time to time as set forth in the
opinions and pronouncements of the Accounting  Principles Board and the American
Institute of Certified Public  Accountants and the statements and pronouncements
of  the  Financial  Accounting  Standards  Board  which  are  applicable  to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Sections  9.17 and 9.18 hereof,  GAAP shall be determined on the
basis of such  principles in effect on the date hereof and consistent with those
used  in the  preparation  of  the  most  recent  audited  financial  statements
delivered to Agent prior to the date hereof.

     1.56  "Governmental  Authority"  shall mean any nation or  government,  any
state,  province,  or other political  subdivision thereof, any central bank (or
similar monetary or regulatory  authority)  thereof,  and any entity  exercising
executive,  legislative,  judicial, regulatory or administrative functions of or
pertaining to government.

     1.57  "Guarantors"  shall mean any  Person  that at any time after the date
hereof becomes party to a guarantee in favor of Agent or any Lender or otherwise
liable on or with respect to the Obligations or who is the owner of any property
which is security for the  Obligations  (other than  Borrowers);  each sometimes
being referred to herein individually as a "Guarantor".

     1.58  "Hazardous  Materials"  shall mean any hazardous,  toxic or dangerous
substances,  materials and wastes,  including hydrocarbons  (including naturally
occurring  or  man-made  petroleum  and  hydrocarbons),   flammable  explosives,
asbestos,  urea  formaldehyde  insulation,   radioactive  materials,  biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or  contaminants  (including  materials  which include
hazardous  constituents),  sewage, sludge,  industrial slag, solvents and/or any
other  similar  substances,   materials,  or  wastes  and  including  any  other
substances,  materials  or  wastes  that  are  or  become  regulated  under  any
Environmental  Law (including any that are or become  classified as hazardous or
toxic under any Environmental Law).

     1.59 "Hedge  Agreement"  shall mean an  agreement  between any Borrower and
Agent,  any  Lender,  any  Affiliate  of  any  Lender  or  any  other  financial
institution  acceptable  to  Agent  (and in each  case  as to any  such  Lender,
Affiliate or other financial  institution  only to the extent approved by Agent)
that is a rate swap agreement,  basis swap,  forward rate  agreement,  commodity
swap,  interest rate option,  forward foreign exchange  agreement,  spot foreign
exchange  agreement,  rate cap  agreement  rate,  floor  agreement,  rate collar
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option,  any other similar agreement  (including any option to enter into any of
the  foregoing or a master  agreement  for any the  foregoing  together with all
supplements  thereto) for the purpose of protecting against or managing exposure
to fluctuations in interest or exchange rates,  currency valuations or commodity
prices; sometimes being collectively referred to herein as "Hedge Agreements".

     1.60 "Indebtedness"  shall mean, with respect to any Person, any liability,
whether or not contingent,  (a) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion   thereof)  or  evidenced  by  bonds,   notes,   debentures  or  similar
instruments;  (b)  representing  the balance deferred and unpaid of the purchase
price of any  property  or services  (other  than an account  payable to a trade
creditor  (whether  or not an  Affiliate)  incurred  in the  ordinary  course of
business  of  such  Person  and  payable  in  accordance  with  customary  trade
practices);  (c) all  obligations  as lessee under  leases  which have been,  or
should  be,  in  accordance  with  GAAP  recorded  as  Capital  Leases;  (d) any
contractual  obligation,  contingent or  otherwise,  of such Person to pay or be
liable for the  payment of any  indebtedness  described  in this  definition  of
another Person, including,  without limitation, any such indebtedness,  directly
or indirectly guaranteed, or any agreement to purchase, repurchase, or otherwise
acquire such indebtedness,  obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof,  or to maintain solvency,
assets, level of income, or other financial condition;  (e) all obligations with
respect to redeemable stock and redemption or repurchase  obligations  under any
Capital  Stock  or  other  equity  securities  issued  by such  Person;  (f) all
reimbursement  obligations and other  liabilities of such Person with respect to
surety  bonds  (whether  bid,  performance  or  otherwise),  letters  of credit,
banker's acceptances, drafts or similar documents or instruments issued for such
Person's account; (g) all indebtedness of such Person in respect of indebtedness
of another Person for borrowed money or indebtedness of another Person otherwise
described in this definition which is secured by any consensual  lien,  security
interest,  collateral assignment,  conditional sale, mortgage, deed of trust, or
other encumbrance on any asset of such Person,  whether or not such obligations,
liabilities or indebtedness  are assumed by or are a personal  liability of such
Person,  all as of such time; (h) all obligations,  liabilities and indebtedness
of such Person (marked to market) arising under swap agreements,  cap agreements
and collar  agreements and other agreements or arrangements  designed to protect
such person  against  fluctuations  in interest  rates or currency or  commodity
values;  (i) all obligations  owed by such Person under License  Agreements with
respect to  non-refundable,  advance or minimum guarantee royalty payments;  (j)
indebtedness  of any  partnership  or joint  venture in which  such  Person is a
general partner or a joint venturer to the extent such Person is liable therefor
as a result of such Person's  ownership  interest in such entity,  except to the
extent that the terms of such indebtedness expressly provide that such Person is
not liable therefor or such Person has no liability  therefor as a matter of law
and (k) the principal and interest  portions of all rental  obligations  of such
Person under any synthetic  lease or similar  off-balance  sheet financing where
such  transaction  is  considered  to be borrowed  money for tax purposes but is
classified as an operating lease in accordance with GAAP.

     1.61  "Indenture"  shall mean that certain  Indenture dated as of March 15,
2002 between  Keystone and U.S. Bank National  Association  in respect of the 8%
Subordinated Secured Notes due March 15, 2009 issued by Keystone.

     1.62  "Indenture   Intercreditor   Agreement"  means  that  certain  Letter
Agreement dated as of March 15, 2002 among U.S. Bank National  Association,  the
County of Peoria, Illinois and Agent.

     1.63 "Information  Certificate" shall mean,  collectively,  the Information
Certificates  of  Borrowers  and  Guarantors   constituting   Exhibit  B  hereto
containing material information with respect to Borrowers and Guarantors,  their
respective  businesses  and assets  provided  by or on behalf of  Borrowers  and
Guarantors to Agent in connection with the preparation of this Agreement and the
other Financing Agreements and the financing arrangements provided for herein.

     1.64 "Intellectual Property" shall mean, as to each Borrower and Guarantor,
such  Borrower's and  Guarantor's  now owned and hereafter  arising or acquired:
patents,  patent rights,  patent applications,  copyrights,  works which are the
subject matter of copyrights,  copyright applications,  copyright registrations,
trademarks,  servicemarks, trade names, trade styles, trademark and service mark
applications,  and  licenses  and  rights  to use any of the  foregoing  and all
applications,  registrations and recordings  relating to any of the foregoing as
may be filed in the United States Copyright Office, the United States Patent and
Trademark  Office or in any similar office or agency of the United  States,  any
State  thereof,  any  political  subdivision  thereof or in any other country or
jurisdiction,  together with all rights and privileges  arising under applicable
law with respect to any Borrower's or  Guarantor's  use of any of the foregoing;
all   extensions,    renewals,   reissues,   divisions,    continuations,    and
continuations-in-part  of any of the  foregoing;  all  rights  to sue for  past,
present  and future  infringement  of any of the  foregoing;  inventions,  trade
secrets, formulae, processes, compounds, drawings, designs, blueprints, surveys,
reports,  manuals,  and operating  standards;  goodwill  (including any goodwill
associated with any trademark or servicemark, or the license of any trademark or
servicemark); customer and other lists in whatever form maintained; trade secret
rights, copyright rights, rights in works of authorship, domain names and domain
name  registration;  software and contract rights relating to computer  software
programs, in whatever form created or maintained.

     1.65 "Intercompany  Services  Agreement" means that certain  Intercorporate
Services Agreement effective as of September 1, 2005 between Contran Corporation
and Keystone.

     1.66 "Interest  Expense"  means,  with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance  with GAAP for the  relevant  period  ended on such date,  including,
interest  expense with respect to any  Indebtedness  for borrowed  money of such
Person and interest expense for the relevant period that has been capitalized on
the balance sheet of such Person.

     1.67 "Interest Period" shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), or three (3) months duration as any Borrower (or
Administrative  Borrower  on  behalf  of such  Borrower)  may  elect,  the exact
duration to be  determined  in  accordance  with the  customary  practice in the
applicable   Eurodollar   Rate  market;   provided,   that,  such  Borrower  (or
Administrative  Borrower on behalf of such  Borrower)  may not elect an Interest
Period  which  will end  after  the last  day of the  then-current  term of this
Agreement.

     1.68 "Interest Rate" shall mean,

     (a) Subject to clauses (b) and (c) of this definition below:

          (i) as to Prime Rate Loans that are Revolving  Loans,  a rate equal to
the  Applicable  Margin for Prime Rate  Loans that are  Revolving  Loans then in
effect plus the Prime Rate,

          (ii) as to Prime Rate Loans that are Term  Loans,  a rate equal to the
Applicable  Margin for Prime Rate Loans that are Term Loans then in effect  plus
the Prime Rate,

          (iii) as to  Eurodollar  Rate Loans that are Revolving  Loans,  a rate
equal to the  Applicable  Margin for Eurodollar  Loans that are Revolving  Loans
then in effect plus the  Adjusted  Eurodollar  Rate (in each case,  based on the
London  Interbank  Offered Rate applicable for the Interest Period selected by a
Borrower, or by Administrative Borrower on behalf of such Borrower, as in effect
two (2) Business Days prior to the commencement of the Interest Period,  whether
such rate is higher or lower than any rate previously  quoted to any Borrower or
Guarantor),

          (iv) as to Eurodollar  Rate Loans that are Term Loans, a rate equal to
the  Applicable  Margin  for  Eurodollar  Rate Loans that are Term Loans then in
effect plus the Adjusted  Eurodollar Rate (in each case, based on the Eurodollar
Rate  applicable  for  the  Interest  Period  selected  by  a  Borrower,  or  by
Administrative  Borrower  on  behalf  of such  Borrower,  as in  effect  two (2)
Business Days prior to the  commencement  of the Interest  Period,  whether such
rate is higher or lower  than any rate  previously  quoted  to any  Borrower  or
Guarantor), and

          (v) as to fees for Letter of Credit  Obligations,  a rate equal to the
Applicable Margin for Letter of Credit Obligations then in effect;

     (b) If Borrowers  fail to deliver the  collateral  reports  required  under
Section 7.1(a),  the Agent may elect to increase the Applicable Margins to their
highest  levels set forth in the  definition  of the term  "Applicable  Margins"
(without regard to the amount of Excess Availability)  effective as of the first
Business  Day of such month in which such  failure  occurred  until such time as
Administrative Borrower satisfies such delivery requirement; and

     (c)  Notwithstanding  anything to the contrary contained in clauses (a) and
(b) of this definition,  the Applicable  Margins otherwise used to calculate the
Interest Rate for Prime Rate Loans, Eurodollar Rate Loans and fees for Letter of
Credit  Obligations shall be the highest respective per annum rates set forth in
the definition of "Applicable Margins" for each such category (without regard to
the amount of Excess Availability) plus in each case two percent (2%) per annum,
at Agent's option,  (i) either (A) without  notice,  for the period on and after
the date of termination or non-renewal hereof until such time as all Obligations
(other than contingent indemnification obligations not asserted or due) are paid
and satisfied in full in immediately  available funds, or (B) upon notice to the
Administrative  Borrower  (which  notice  shall not be  required  if an Event of
Default has occurred and is continuing  under  Sections  10.1(g) and (h) of this
Agreement),  for the  period  from and after the date of the  occurrence  of any
Event of  Default,  and for so long as such Event of Default is  continuing  and
(ii) on the Revolving Loans to any Borrower at any time outstanding in excess of
the Borrowing Base of such Borrower or the Revolving Loan Limit of such Borrower
(whether or not such excess(es) arise or are made with or without Agent's or any
Lender's  knowledge  or consent  and  whether  made  before or after an Event of
Default).

     1.69 "Inventory" shall mean, as to each Borrower and Guarantor, all of such
Borrower's and Guarantor's  now owned and hereafter  existing or acquired goods,
wherever located,  which (a) are leased by such Borrower or Guarantor as lessor;
(b) are held by such  Borrower or Guarantor for sale or lease or to be furnished
under a contract of service;  (c) are  furnished  by such  Borrower or Guarantor
under a contract of service;  or (d) consist of raw materials,  work in process,
finished goods or materials used or consumed in its business.

     1.70 "Inventory  Loan Limit" shall mean, as to each Borrower,  at any time,
the amount equal to $35,000,000  minus the then outstanding  principal amount of
Revolving  Loans  to the  other  Borrowers  based  on  Eligible  Inventory  (and
including Letters of Credit to the extent provided in the definition of the term
Borrowing Base).

     1.71  "Investment  Property  Control  Agreement" shall mean an agreement in
writing,  in form and substance  reasonably  satisfactory to Agent, by and among
Agent,  any  Borrower  or  Guarantor  (as the  case  may be) and any  securities
intermediary, commodity intermediary or other person who has custody, control or
possession   of  any   investment   property  of  such   Borrower  or  Guarantor
acknowledging that such securities intermediary, commodity intermediary or other
person has custody,  control or possession of such investment property on behalf
of Agent,  that it will comply with entitlement  orders originated by Agent with
respect to such investment  property,  or other  instructions of Agent,  and has
such other terms and conditions as Agent may reasonably require.

     1.72  "Keystone"  shall have the meaning set forth in the  preamble to this
Agreement.

     1.73  "KWP"  shall  have the  meaning  set  forth in the  preamble  to this
Agreement.

     1.74 "Lenders"  shall mean the financial  institutions  who are signatories
hereto as Lenders and other  persons made a party to this  Agreement as a Lender
in accordance  with Section 13.7 hereof,  and their  respective  successors  and
assigns; each sometimes being referred to herein individually as a "Lender".

     1.75 "Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments  thereto,  any documents delivered
in  connection  therewith,   any  application  therefor,   and  any  agreements,
instruments,  guarantees or other documents  (whether  general in application or
applicable only to such Letter of Credit)  governing or providing for the rights
and obligations of the parties  concerned or at risk or any collateral  security
for such obligations. 1.76 "Letter of Credit Limit" shall mean $6,000,000.

     1.77 "Letter of Credit Obligations" shall mean, at any time, the sum of (a)
the aggregate undrawn amount of all Letters of Credit  outstanding at such time,
plus (b) the aggregate  amount of all drawings under Letters of Credit for which
the  issuer  thereof  has not at such time  been  reimbursed,  plus (c)  without
duplication,  the  aggregate  amount of all payments  made by each Lender to the
issuer  with  respect  to such  Lender's  participation  in Letters of Credit as
provided in Section 2.2 for which Borrowers have not at such time reimbursed the
Lenders, whether by way of a Revolving Loan or otherwise.

     1.78  "Letters  of  Credit"  shall  mean all  letters  of  credit  (whether
documentary or stand-by and whether for the purchase of inventory,  equipment or
otherwise)  issued by an issuer for the account of any Borrower pursuant to this
Agreement, and all amendments,  renewals, extensions or replacements thereof and
including, but not limited to, the Existing Letters of Credit. The issuer of the
Letters of Credit shall be, and all references to such issuer herein shall mean,
Wachovia Bank, National Association and its successors and assigns or such other
bank as Agent may from time to time designate.

     1.79 "License  Agreements" shall have the meaning set forth in Section 8.11
hereof.

     1.80 "Loan Limit" shall mean, as to each Borrower,  at any time, the amount
equal to the Maximum Credit minus the then  outstanding  principal amount of the
Loans and the Letters of Credit provided to the other Borrowers.

     1.81 "Loans" shall mean,  collectively,  the  Revolving  Loans and the Term
Loans.

     1.82  "London  Interbank  Offered  Rate"  shall mean,  with  respect to any
Eurodollar Loan for the Interest Period applicable thereto, the rate of interest
per annum (rounded upwards, if necessary,  to the nearest 1/100 of 1%) appearing
on Telerate Page 3750 (or any successor  page) as the London  interbank  offered
rate for deposits in U.S. Dollars at approximately  11:00 A.M. (London time) two
(2)  Business  Days  prior to the first day of such  Interest  Period for a term
comparable to such  Interest  Period;  provided,  that, if more than one rate is
specified on Telerate Page 3750,  the  applicable  rate shall be the  arithmetic
mean of all such rates. If, for any reason, such rate is not available, the term
"London  Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan
for the  Interest  Period  applicable  thereto,  the rate of interest  per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately  11:00 A.M. (London time) two (2) Business Days prior to the first
day of such  Interest  Period for a term  comparable  to such  Interest  Period;
provided,  however,  if more than one rate is specified  on Reuters  Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.

     1.83 "Material  Adverse Effect" shall mean a material adverse effect on (a)
the financial condition,  business, performance or operations of Borrowers taken
as a whole; (b) the legality, validity or enforceability of any of the Financing
Agreements; (c) the legality, validity,  enforceability,  perfection or priority
of the  security  interests  and  liens of Agent  upon the  Collateral;  (d) the
Collateral  or  its  value;  (e)  the  ability  of any  Borrower  to  repay  the
Obligations or of any Borrower to perform its  obligations  under this Agreement
or any of the other Financing Agreements as and when to be performed; or (f) the
ability of Agent and the Lenders to enforce the  Obligations or realize upon the
Collateral  or  otherwise  with  respect to the rights and remedies of Agent and
Lenders under any of the Financing Agreements.

     1.84  "Material  Contract"  shall mean (a) any contract or other  agreement
(other  than the  Financing  Agreements),  written or oral,  of any  Borrower or
Guarantor  involving  monetary  liability  of or to any  Person  in an amount in
excess  of  $750,000  in any  fiscal  year and (b) any other  contract  or other
agreement  (other than the Financing  Agreements),  whether  written or oral, to
which  any   Borrower  or   Guarantor  is  a  party  as  to  which  the  breach,
nonperformance, cancellation or failure to renew by any party thereto would have
a Material Adverse Effect.

     1.85 "Maximum Credit" shall mean the amount of $80,000,000.

     1.86 "Mortgaged Properties" shall mean Upper Sandusky,  Ohio,  Hortonville,
Wisconsin and Peoria, Illinois.

     1.87 "Mortgages"  shall mean,  individually and  collectively,  each of the
following  (as the  same  now  exist  or may  hereafter  be  amended,  modified,
supplemented,  extended,  renewed,  restated  or  replaced):  (a) the  Mortgage,
Security  Agreement,  Assignment  of Leases and Rents,  Financing  Statement and
Fixture  Filing,  dated of even  date  herewith,  by EWP in favor of Agent  with
respect to the Real  Property  and related  assets of such  Borrower  located in
Upper Sandusky, Ohio, (b) the Mortgage, Security Agreement, Assignment of Leases
and Rents,  Financing Statement and Fixture Filing, dated of even date herewith,
by F V Steel in favor of Agent with  respect to the Real  Property  and  related
assets of such Borrower located in Hortonville, Wisconsin, and (c) the Mortgage,
Security  Agreement,  Assignment  of Leases and Rents,  Financing  Statement and
Fixture Filing, dated of even date herewith,  by Keystone in favor of Agent with
respect to the Real  Property  and related  assets of such  Borrower  located in
Peoria, Illinois.

     1.88 "Multiemployer Plan" shall mean a "multi-employer  plan" as defined in
Section  4001(a)(3) of ERISA which is or was at any time during the current year
or the  immediately  preceding  six (6) years  contributed  to by any  Borrower,
Guarantor  or any  ERISA  Affiliate  or with  respect  to  which  any  Borrower,
Guarantor or any ERISA Affiliate may incur any liability.

     1.89 "Net  Recovery  Percentage"  shall mean the  fraction,  expressed as a
percentage,  (a) the numerator of which is the amount equal to the amount of the
recovery in respect of the Inventory or Equipment,  as applicable,  at such time
on a "net  orderly  liquidation  value"  basis as set  forth in the most  recent
appraisal  of  Inventory  or  Equipment,  as  applicable,  received  by Agent in
accordance with Sections 7.3 or 7.4, as applicable,  net of operating  expenses,
liquidation  expenses and  commissions,  and (b) the denominator of which is the
applicable  value of the  aggregate  amount of the  Inventory or  Equipment,  as
applicable, subject to such appraisal.

     1.90  "Obligations"  shall  mean (a) any and all  Loans,  Letter  of Credit
Obligations and all other  obligations,  liabilities  and  indebtedness of every
kind,  nature and description owing by any or all of Borrowers and Guarantors to
Agent  or any  Lender  and/or  any of  their  Affiliates,  including  principal,
interest,  charges,  fees,  costs and expenses,  however  evidenced,  whether as
principal,   surety,  endorser,  guarantor  or  otherwise,  arising  under  this
Agreement or any of the other  Financing  Agreements or on account of any Letter
of Credit and all other  Letter of Credit  Obligations,  whether now existing or
hereafter  arising,  whether arising before,  during or after the initial or any
renewal  term of this  Agreement  or after  the  commencement  of any case  with
respect to such Borrower or Guarantor under the United States Bankruptcy Code or
any similar  statute  (including the payment of interest and other amounts which
would accrue and become due but for the  commencement  of such case,  whether or
not such  amounts  are allowed or  allowable  in whole or in part in such case),
whether direct or indirect, absolute or contingent, joint or several, due or not
due, primary or secondary,  liquidated or unliquidated,  or secured or unsecured
and (b) for  purposes  only of Section 5.1 hereof and subject to the priority in
right of payment set forth in Section 6.4 hereof,  all obligations,  liabilities
and  indebtedness of every kind,  nature and description  owing by any or all of
Borrowers  to  Agent,  any  Lender,  any  Affiliate  of any  Lender or any other
financial  institution  acceptable  to  Agent  (and in each  case as to any such
Lender,  Affiliate  of any  Lender or other  financial  institution  only to the
extent  approved  by Agent)  arising  under or  pursuant  to a Hedge  Agreement,
whether now existing or hereafter arising, provided, that, (i) such obligations,
liabilities  and  indebtedness  shall only be included within the Obligations if
upon Agent's  request,  Agent shall have entered into an agreement,  in form and
substance satisfactory to Agent, with any Lender, any Affiliate of any Lender or
any other  financial  institution  acceptable to Agent that is a counterparty to
such Hedge Agreement, as acknowledged and agreed to by Borrowers,  providing for
the delivery to Agent by such  counterparty  of information  with respect to the
amount of such  obligations and providing for the other rights of Agent and such
Lender, Affiliate of any Lender or any other financial institution acceptable to
Agent, as the case may be, in connection with such  arrangements  and (ii) in no
event  shall  the  party  to such  Hedge  Agreement  to whom  such  obligations,
liabilities or indebtedness  are owing be deemed a Lender for purposes hereof to
the extent of and as to such obligations, liabilities or indebtedness other than
for purposes of Section 5.1 hereof and other than for purposes of Sections 12.1,
12.2, 12.3(b), 12.6, 12.7, 12.9, 12.12 and 13.6 hereof and in no event shall the
approval  of any such  person be  required  in  connection  with the  release or
termination of any security interest or lien of Agent.

     1.91 "Other Taxes" shall have the meaning given to such term in Section 6.5
hereof.

     1.92 "Parent" shall mean Keystone and its successors and assigns.

     1.93 "Participant"  shall mean any financial  institution that acquires and
holds a  participation  in the  interest  of any  Lender in any of the Loans and
Letters of Credit in  conformity  with the  provisions  of Section  13.7 of this
Agreement governing participations.

     1.94  "Peoria  Debt"  shall  mean  the   obligations   and  liabilities  of
Administrative  Borrower to the County of Peoria,  Illinois  under that  certain
Loan Agreement dated as of March 13, 2002 (as amended or otherwise modified from
time to  time)  between  Administrative  Borrower  and  the  County  of  Peoria,
Illinois.

     1.95 "Peoria Intercreditor Agreement" shall mean that certain Subordination
and Intercreditor  Agreement dated as of March 15, 2002 (as amended or otherwise
modified from time to time) among Administrative  Borrower, Agent and the County
of Peoria, Illinois.

     1.96  "Permitted  Holders"  shall  mean  Contran  Corporation,  a  Delaware
corporation and its Affiliates.

     1.97 "Person" or "person" shall mean any individual,  sole  proprietorship,
partnership,  corporation  (including any corporation  which elects subchapter S
status  under  the  Code),   limited   liability   company,   limited  liability
partnership,   business   trust,   unincorporated   association,   joint   stock
corporation,  trust,  joint  venture or other  entity or any  government  or any
agency or instrumentality or political subdivision thereof.

     1.98  "Pension  Plan" shall mean a pension plan (as defined in Section 3(2)
of ERISA) subject to Title IV of ERISA which any Borrower or Guarantor sponsors,
maintains,  or to which any Borrower,  Guarantor or ERISA  Affiliate  makes,  is
making, or is obligated to make contributions, other than a Multiemployer Plan.

     1.99 "Plan" shall mean an employee benefit plan (as defined in Section 3(3)
of ERISA) which any Borrower or Guarantor  sponsors,  maintains,  or to which it
makes,  is making,  or is obligated to make  contributions,  or in the case of a
Multiemployer  Plan has made  contributions  at any time during the  immediately
preceding  six (6) plan years or with respect to which any Borrower or Guarantor
may incur liability.

     1.100 "Plan of  Reorganization"  shall mean the Borrowers' (other than EWP)
Third Amended Joint Plan of Reorganization  Pursuant to Chapter 11 of the United
States  Bankruptcy  Code dated June 24, 2005 (as amended on August 10, 2005), as
it may be amended from time to time to the extent  permitted  under Section 9.24
of this Agreement.

     1.101 "Prime Rate" shall mean the rate from time to time publicly announced
by Wachovia Bank, National  Association,  or its successors,  as its prime rate,
whether or not such announced rate is the best rate available at such bank.

     1.102 "Prime Rate Loans"  shall mean any Loans or portion  thereof on which
interest  is  payable  based on the  Prime  Rate in  accordance  with the  terms
thereof.

     1.103 "Pro Rata Share" shall mean as to any Lender, the fraction (expressed
as a  percentage)  the numerator of which is such  Lender's  Commitment  and the
denominator  of which  is the  aggregate  amount  of all of the  Commitments  of
Lenders,  as adjusted  from time to time in  accordance  with the  provisions of
Section 13.7 hereof;  provided,  that, if the Commitments  have been terminated,
the numerator shall be the unpaid amount of such Lender's Loans and its interest
in the Letters of Credit and the  denominator  shall be the aggregate  amount of
all unpaid Loans and Letters of Credit.

     1.104 "Real Property" shall mean all now owned and hereafter  acquired real
property of each Borrower and Guarantor, including leasehold interests, together
with all buildings,  structures,  and other improvements located thereon and all
licenses,  easements  and  appurtenances  relating  thereto,  wherever  located,
including the real property and related  assets more  particularly  described in
the Mortgages.

     1.105 "Real  Property  Closing  Conditions"  shall mean with respect to the
Mortgages  for the real  property  located in  Hortonville,  Wisconsin and Upper
Sandusky  Ohio,  receipt  by  Agent  of ALTA  surveys,  ALTA  title  commitments
(consistent  with the  requirements  of Section  4.1(k)  hereof)  and such other
documents and  instruments as Agent may reasonably  require with respect to both
Mortgages all in form and substance reasonably satisfactory to Agent.

     1.106  "Receivables" shall mean all of the following now owned or hereafter
arising or acquired  property of each Borrower and Guarantor:  (a) all Accounts;
(b) all interest,  fees,  late  charges,  penalties,  collection  fees and other
amounts  due or to  become  due or  otherwise  payable  in  connection  with any
Account; (c) all payment intangibles of such Borrower or Guarantor;  (d) letters
of credit,  indemnities,  guarantees,  security or other  deposits  and proceeds
thereof  issued payable to any Borrower or Guarantor or otherwise in favor of or
delivered to any Borrower or Guarantor in  connection  with any Account;  or (e)
all other accounts, contract rights, chattel paper, instruments,  notes, general
intangibles  and other forms of obligations  owing to any Borrower or Guarantor,
whether  from the sale and lease of goods or other  property,  licensing  of any
property  (including   Intellectual  Property  or  other  general  intangibles),
rendition  of services or from loans or advances by any Borrower or Guarantor or
to or for the benefit of any third  person  (including  loans or advances to any
Affiliates or Subsidiaries of any Borrower or Guarantor) or otherwise associated
with any Accounts, Inventory or general intangibles of any Borrower or Guarantor
(including, without limitation, choses in action, causes of action, tax refunds,
tax refund  claims,  any funds  which may  become  payable  to any  Borrower  or
Guarantor  in  connection  with the  termination  of any Plan or other  employee
benefit plan and any other amounts payable to any Borrower or Guarantor from any
Plan or other  employee  benefit plan,  rights and claims  against  carriers and
shippers,  rights  to  indemnification,   business  interruption  insurance  and
proceeds  thereof,  casualty or any similar  types of insurance and any proceeds
thereof and proceeds of  insurance  covering the lives of employees on which any
Borrower or Guarantor is a beneficiary).

     1.107 "Records" shall mean, as to each Borrower and Guarantor,  all of such
Borrower's and Guarantor's  present and future books of account of every kind or
nature,  purchase and sale agreements,  invoices,  ledger cards, bills of lading
and other shipping evidence, statements, correspondence, memoranda, credit files
and other data relating to the Collateral or any account  debtor,  together with
the tapes,  disks,  diskettes  and other  data and  software  storage  media and
devices,  file  cabinets or  containers  in or on which the foregoing are stored
(including any rights of any Borrower or Guarantor with respect to the foregoing
maintained with or by any other person).

     1.108 "Reference Bank" shall mean Wachovia Bank, National  Association,  or
such other bank as Agent may from time to time designate.

     1.109  "Renewal  Date"  shall have the  meaning  set forth in Section  13.1
hereof.

     1.110 "Register" shall have the meaning set forth in Section 13.7 hereof.

     1.111 "Remaining Notes" shall mean collectively, the Peoria Debt and the 8%
notes issued pursuant to the Indenture.

     1.112 "Required  Lenders" shall mean, at any time,  those Lenders whose Pro
Rata Shares aggregate  sixty-six and two-thirds (66 2/3%) percent or more of the
aggregate of the Commitments of all Lenders,  or if the  Commitments  shall have
been  terminated,  Lenders to whom at least  sixty-six and  two-thirds (66 2/3%)
percent of the then outstanding Obligations are owing.

     1.113 "Reserves" shall mean as of any date of  determination,  such amounts
as Agent may from time to time establish and revise reasonably and in good faith
reducing  the  amount of  Revolving  Loans and  Letters  of Credit  which  would
otherwise be available to any Borrower under the lending formula(s) provided for
herein:  (a) to reflect  events,  conditions,  contingencies  or risks which, as
reasonably  determined by Agent in good faith,  materially and adversely affect,
or would have a reasonable  likelihood  of materially  and adversely  affecting,
either (i) the  Collateral  comprising the Borrowing Base or Collateral on which
the Term Loans are based,  its value or the amount  that will likely be received
by Agent from the sale or other disposition or realization upon such Collateral,
or (ii) the assets,  business or prospects of any Borrower or (iii) the security
interests and other rights of Agent and the Lenders in the Collateral (including
the  enforceability,  perfection and priority thereof) or (b) to reflect Agent's
good faith belief that any collateral report or financial  information furnished
by or on behalf of any Borrower or Guarantor to Agent is incomplete,  inaccurate
or misleading in any material respect or (c) to reflect  outstanding  Letters of
Credit as provided in Section 2.2 hereof or (d) in respect of any state of facts
which  Agent  determines  in good  faith  constitutes  a Default  or an Event of
Default.  Without  limiting the  generality of the  foregoing,  Reserves may, at
Agent's  option,  be  established  to reflect:  (i) dilution with respect to the
Accounts (based on the ratio of the aggregate  amount of non-cash  reductions in
Accounts  for any  period to the  aggregate  dollar  amount of the sales of such
Borrower  for such  period)  as  calculated  by Agent  for any  period  is or is
reasonably  anticipated  to be greater  than three (3%)  percent;  (ii) that the
orderly  liquidation  value of the  Equipment or fair market value or quick sale
value of any of the Real  Property  as set forth in the most  recent  acceptable
appraisals  received by Agent with respect thereto has declined so that the then
outstanding  principal  amount of the Term Loans is greater than such percentage
with respect to such appraised values as Agent used in establishing the original
principal  amount of the Term Loans multiplied by such appraised  values;  (iii)
returns,  discounts,  claims,  credits and allowances of any nature that are not
paid pursuant to the reduction of Accounts;  (iv) sales, excise or similar taxes
included in the amount of any  Accounts  reported to Agent;  (v) a change in the
turnover,  age or mix of the categories of Inventory that adversely  affects the
aggregate  value of all  Inventory;  (vi) amounts due or to become due to owners
and lessors of premises  where any  Collateral is located,  other than for those
locations where Agent has received a Collateral  Access Agreement that Agent has
accepted  in  writing  and  (vii)   obligations,   liabilities  or  indebtedness
(contingent  or otherwise) of Borrowers to Agent,  any Lender,  any Affiliate of
any Lender or any other financial  institution  acceptable to Agent (and in each
case as to any  such ,  Lender,  Affiliate  of any  Lender  or  other  financial
institution only to the extent approved by Agent) arising under or in connection
with any Hedge Agreement of any Borrower with Agent,  any Lender,  any Affiliate
of any Lender or any other financial institution  acceptable to Agent or as such
Person may  otherwise  require in  connection  therewith to the extent that such
obligations,  liabilities or indebtedness constitute Obligations as such term is
defined  herein or  otherwise  receive the benefit of the  security  interest of
Agent in any  Collateral.  The amount of any Reserve  established by Agent shall
have a reasonable  relationship to the event, condition or other matter which is
the basis  for such  reserve  as  determined  by Agent in good  faith and to the
extent that such  Reserve is in respect of amounts  that may be payable to third
parties Agent may, at its option,  deduct such Reserve from the  Revolving  Loan
Limit,  at any time that such  limit is less  than the  amount of the  Borrowing
Base.

     1.114 "Restructuring Expenses" shall mean fees and expenses relating to the
Chapter  11 cases and the  consummation  of the Plan of  Reorganization  for any
period ending on or before  December 31, 2006 and other  business  restructuring
fees and expenses of the type described in Financial  Accounting Standards Board
146 for any period ending on or before December 31, 2006..

     1.115 "Revolving Loan Limit" shall mean, as to each Borrower,  at any time,
the amount equal to the  $80,000,000  minus the sum of (a) the then  outstanding
principal  amount of the Revolving  Loans and Letters of Credit  provided to the
other  Borrowers  plus (b) the then  outstanding  principal  amount  of the Term
Loans.

     1.116 "Revolving Loans" shall mean the loans now or hereafter made by or on
behalf of any Lender or by Agent for the  account  of any Lender on a  revolving
basis  pursuant  to the Credit  Facility  (involving  advances,  repayments  and
readvances) as set forth in Section 2.1 hereof.

     1.117 "Solvent" shall mean, at any time with respect to any Person, that at
such time such  Person (a) is able to pay its debts as they  mature and has (and
has a reasonable basis to believe it will continue to have)  sufficient  capital
(and not  unreasonably  small capital) to carry on its business  consistent with
its practices as of the date hereof,  and (b) the assets and  properties of such
Person at a fair  valuation  (and including as assets for this purpose at a fair
valuation all rights of  subrogation,  contribution or  indemnification  arising
pursuant  to  any  guarantees  given  by  such  Person)  are  greater  than  the
Indebtedness  of  such  Person,   and  including   subordinated  and  contingent
liabilities  computed at the amount which, such person has a reasonable basis to
believe,  represents  an amount  which can  reasonably  be expected to become an
actual or matured liability (and including as to contingent  liabilities arising
pursuant  to any  guarantee  the face  amount of such  liability  as  reduced to
reflect the probability of it becoming a matured liability).

     1.118 "Special Agent  Advances" shall have the meaning set forth in Section
12.11 hereof.

     1.119  "Subsidiary" or "subsidiary" shall mean, with respect to any Person,
any corporation,  limited liability  company,  limited liability  partnership or
other  limited or general  partnership,  trust,  association  or other  business
entity of which an aggregate of at least a majority of the  outstanding  Capital
Stock  or other  interests  entitled  to vote in the  election  of the  board of
directors of such  corporation  (irrespective of whether,  at the time,  Capital
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency),  managers, trustees
or other controlling persons, or an equivalent  controlling interest therein, of
such Person is, at the time, directly or indirectly, owned by such Person and/or
one or more subsidiaries of such Person. Notwithstanding the foregoing, the term
"Subsidiary" shall exclude Sherman Wire Company, Sherman Wire of Caldwell, Inc.,
J.L. Prescott Company and De Soto Environmental Management,  Inc., each of which
is to be managed for the benefit of its creditors or liquidated  pursuant to the
Plan of Reorganization.

     1.120 "Term A Loans" shall mean, collectively, the term loans made by or on
behalf of Lenders as provided for in Section  2.3(a)  hereof and based on 40% of
the  appraised net orderly  liquidation  value of such  Borrowers'  Equipment as
determined by Agent based on appraisals received prior to the date hereof.

     1.121 "Term B Loans" shall mean, collectively, the term loans made by or on
behalf of Lenders as  provided  for in  Section  2.3(b)  hereof and based on the
lesser of (a) 60% of the  appraised  fair  market  value of EWP's and FV Steel's
Real Property as determined by Agent based on appraisals  received  prior to the
date hereof or (b) 80% of the quick sale value of such  Borrowers' Real Property
as determined by Agent based on appraisals received prior to the date hereof.

     1.122 "Term C Loans" shall mean, collectively, the term loans made by or on
behalf of Lenders  to any  Borrower  after the date  hereof as  provided  for in
Section 2.3(c) hereof.

     1.123 "Term Loans" shall mean, collectively, the Term A Loans, Term B Loans
and Term C Loans.

     1.124 "Trustee Debt" shall mean the obligations and liabilities of Keystone
and FV Steel to the  trustee  for the  Holders  of the Class A6 Claims  (as such
terms are defined in the Plan of  Reorganization)  under that certain Promissory
Note dated as of the date  hereof  issued by  Keystone  and FV Steel in favor of
such trustee.

     1.125   "Trustee   Intercreditor   Agreement"   shall  mean  that   certain
Subordination  and  Intercreditor  Agreement  dated  as of the date  hereof  (as
amended or otherwise modified from time to time) among Keystone, FV Steel, Agent
and the  trustee  for the  Holders  of the  Class A6 Claims  (as such  terms are
defined in the Plan of Reorganization).

     1.126  "UCC"  shall mean the  Uniform  Commercial  Code as in effect in the
State of Illinois,  and any  successor  statute,  as in effect from time to time
(except that terms used herein which are defined in the Uniform  Commercial Code
as in effect in the State of Illinois on the date hereof shall  continue to have
the same meaning  notwithstanding  any  replacement or amendment of such statute
except as Agent may otherwise determine).

     1.127  "Value"  shall mean,  as  determined  by Agent in good  faith,  with
respect to  Inventory,  the lower of (a) cost  computed on a first-in  first-out
basis in accordance with GAAP or (b) market value, provided,  that, for purposes
of the  calculation of the Borrowing  Base, the Value of the Inventory shall not
include: (A) the portion of the value of Inventory equal to the profit earned by
any  Affiliate  on  the  sale  thereof  to any  Borrower  or  (B)  write-ups  or
write-downs in value with respect to currency exchange rates.

     1.128 "Voting Stock" shall mean with respect to any Person,  (a) one (1) or
more classes of Capital  Stock of such Person  having  general  voting powers to
elect at least a majority  of the board of  directors,  managers  or trustees of
such  Person,  irrespective  of whether at the time  Capital  Stock of any other
class or classes have or might have voting  power by reason of the  happening of
any  contingency,  and (b) any  Capital  Stock  of such  Person  convertible  or
exchangeable  without  restriction  at the  option of the  holder  thereof  into
Capital Stock of such Person described in clause (a) of this definition.

     1.129 "Wachovia" shall mean Wachovia Capital Finance Corporation (Central),
an Illinois  corporation,  in its  individual  capacity,  and its successors and
assigns.

     1.130  "Working  Capital"  shall  mean as to any  Person,  at any time,  in
accordance  with  GAAP,  on  a  consolidated  basis  for  such  Person  and  its
subsidiaries  (if any),  the amount  equal to the  difference  between:  (a) the
aggregate  net  book  value  of all  current  assets  of  such  Person  and  its
subsidiaries (as determined in accordance with GAAP), calculating the book value
of inventory for this purpose on a first-in-first-out basis, and (b) all current
liabilities  of such Person and its  subsidiaries  (as  determined in accordance
with GAAP),  provided,  that, as to Parent,  for purposes of Section  9.18,  the
liabilities  of Parent  and its  Subsidiaries  to Agent and  Lenders  under this
Agreement shall not be considered current liabilities (whether or not classified
as current liabilities in accordance with GAAP).

     SECTION 2. CREDIT FACILITIES

     2.1 Loans.

     (a) Subject to and upon the terms and  conditions  contained  herein,  each
Lender  severally  (and  not  jointly)  agrees  to make  its Pro  Rata  Share of
Revolving  Loans to each  Borrower  (other  than F V Steel) from time to time in
amounts requested by such Borrower (or Administrative Borrower on behalf of such
Borrower) up to the  aggregate  amount  outstanding  for all Lenders at any time
equal to the lesser of: (i) the Borrowing  Base of such Borrower at such time or
(ii) the Revolving Loan Limit of such Borrower at such time.

     (b) Except in Agent's  discretion,  with the consent of all Lenders,  or as
otherwise  provided herein, (i) the aggregate amount of the Loans and the Letter
of Credit  Obligations  outstanding  at any time shall not  exceed  the  Maximum
Credit, (ii) the aggregate principal amount of the Revolving Loans and Letter of
Credit  Obligations  outstanding  at any time to a Borrower shall not exceed the
Borrowing Base of such  Borrower,  (iii) the aggregate  principal  amount of the
Loans and  Letter of Credit  Obligations  outstanding  at any time to a Borrower
shall not exceed the Loan Limit of such Borrower,  (iv) the aggregate  principal
amount of the Revolving  Loans  outstanding  to a Borrower based on the Eligible
Inventory of such  Borrower  shall not exceed the  Inventory  Loan Limit of such
Borrower  and  (v)  the  aggregate  principal  amount  of  the  Revolving  Loans
outstanding at any time to Borrowers  based on the Eligible  Inventory shall not
exceed $35,000,000.

     (c) In the event that (i) the aggregate  amount of the Loans and the Letter
of Credit Obligations outstanding at any time exceed the Maximum Credit, or (ii)
except as otherwise  provided  herein,  the  aggregate  principal  amount of the
Revolving  Loans and  Letter of Credit  Obligations  outstanding  to a  Borrower
exceed the Borrowing  Base of such Borrower or the Revolving  Loan Limit of such
Borrower,  or (iii) the aggregate principal amount of Revolving Loans and Letter
of Credit  Obligations based on the Eligible  Inventory of a Borrower exceed the
Inventory Loan Limit of such Borrower, or (iv) the aggregate principal amount of
Revolving  Loans and Letters of Credit  based on the  Eligible  Inventory of all
Borrowers  exceeds the  sublimit  set forth  above,  such event shall not limit,
waive or otherwise  affect any rights of Agent or Lenders in such  circumstances
or on any future occasions and Borrowers shall, upon demand by Agent,  which may
be made at any time or from time to time,  immediately repay to Agent the entire
amount of any such excess(es) for which payment is demanded.

     2.2 Letters of Credit.

     (a) Subject to and upon the terms and  conditions  contained  herein and in
the Letter of Credit  Documents,  at the  request of a Borrower  (other than F V
Steel) (or Administrative Borrower on behalf of such Borrower),  Agent agrees to
provide  or arrange  for the  account of such  Borrower  one or more  Letters of
Credit,  for the ratable  risk of each Lender  according  to its Pro Rata Share,
containing terms and conditions  acceptable to Agent and the issuer thereof. The
issuer of the Letters of Credit will be Wachovia Bank,  National  Association or
such other bank as Agent may from time to time designate.

     (b) The  Borrower  requesting  such  Letter  of Credit  (or  Administrative
Borrower on behalf of such  Borrower)  shall give Agent three (3) Business Days'
prior written notice of such Borrower's  request for the issuance of a Letter of
Credit.  Such notice shall be  irrevocable  and shall  specify the original face
amount of the Letter of Credit requested, the effective date of issuance of such
requested  Letter of  Credit,  whether  such  Letter of Credit may be drawn in a
single or in partial draws, the date on which such requested Letter of Credit is
to expire (which date shall be a Business Day and in no event shall such date be
less  than ten (10)  days  prior  to the end of the  then  current  term of this
Agreement), the purpose for which such Letter of Credit is to be issued, and the
beneficiary  of the  requested  Letter of Credit.  The Borrower  requesting  the
Letter of Credit (or  Administrative  Borrower on behalf of such Borrower) shall
attach to such notice the proposed terms of the Letter of Credit. The renewal or
extension of any Letter of Credit shall, for purposes hereof,  be treated in all
respects the same as the issuance of a new Letter of Credit hereunder.

     (c) In  addition to being  subject to the  satisfaction  of the  applicable
conditions  precedent  contained  in  Section 4 hereof  and the other  terms and
conditions  contained herein, no Letter of Credit shall be available unless each
of the following conditions precedent have been satisfied in a manner reasonably
satisfactory  to Agent:  (i) the Borrower  requesting  such Letter of Credit (or
Administrative  Borrower on behalf of such Borrower) shall have delivered to the
proposed  issuer of such  Letter of Credit at such  times and in such  manner as
such  proposed  issuer  may  require,  an  application,  in form  and  substance
satisfactory to such proposed  issuer and Agent,  for the issuance of the Letter
of Credit and such other Letter of Credit Documents as may be required  pursuant
to the terms  thereof,  and the form and terms of the proposed  Letter of Credit
shall be satisfactory to Agent and such proposed issuer;  (ii) as of the date of
issuance,  no order of any court,  arbitrator  or other  Governmental  Authority
shall  purport by its terms to enjoin or restrain  money center banks  generally
from  issuing  letters of credit of the type and in the  amount of the  proposed
Letter of Credit,  and no law,  rule or  regulation  applicable  to money center
banks generally and no request or directive  (whether or not having the force of
law) from any Governmental  Authority with  jurisdiction over money center banks
generally shall prohibit,  or request that the proposed issuer of such Letter of
Credit refrain from, the issuance of letters of credit generally or the issuance
of such  Letters of Credit;  (iii) after  giving  effect to the issuance of such
Letter of Credit,  the Letter of Credit  Obligations shall not exceed the Letter
of Credit Limit;  and (iv) the Excess  Availability  of the Borrower  requesting
such Letter of Credit,  prior to giving  effect to any Reserves  with respect to
such  Letter of Credit,  on the date of the  proposed  issuance of any Letter of
Credit,  shall be equal to or greater than: (A) if the proposed Letter of Credit
is for the purpose of purchasing  Eligible  Inventory and the documents of title
with respect thereto are consigned to the issuer,  the sum of (1) the percentage
equal to one hundred (100%) percent minus the then  applicable  percentage  with
respect to Eligible  Inventory set forth in the definition of the term Borrowing
Base  multiplied  by the Value of such  Eligible  Inventory,  plus (2)  freight,
taxes,  duty and other amounts which Agent  estimates must be paid in connection
with such  Inventory  upon  arrival and for  delivery to one of such  Borrower's
locations for Eligible  Inventory within the United States of America and (B) if
the proposed Letter of Credit is for any other purpose or the documents of title
are not  consigned to the issuer in  connection  with a Letter of Credit for the
purpose of purchasing  Inventory,  an amount equal to one hundred (100%) percent
of the Letter of Credit  Obligations  with  respect  thereto.  Effective  on the
issuance  of each  Letter of  Credit,  a  Reserve  shall be  established  in the
applicable amount set forth in Section 2.2(c)(iv)(A) or Section 2.2(c)(iv)(B).

     (d) Except in Agent's  discretion,  with the  consent of all  Lenders,  the
amount of all  outstanding  Letter of Credit  Obligations  shall not at any time
exceed the Letter of Credit Limit.

     (e) Each Borrower  shall  reimburse  immediately  the issuer of a Letter of
Credit for any draw under any  Letter of Credit  issued for the  account of such
Borrower by such issuer and pay such issuer the amount of all other  charges and
fees payable to issuer in  connection  with any Letter of Credit  issued for the
account  of such  Borrower  immediately  when due,  irrespective  of any  claim,
setoff,  defense or other right which such Borrower may have at any time against
the issuer or any other Person. Each drawing under any Letter of Credit or other
amount payable in connection  therewith  when due shall  constitute a request by
the Borrower  for whose  account such Letter of Credit was issued to Agent for a
Prime Rate Loan in the amount of such drawing or other amount then due and shall
be made by Agent on behalf of  Lenders as a  Revolving  Loan (or  Special  Agent
Advance,  as the case may be).  The date of such  Loan  shall be the date of the
drawing or as to other amounts,  the due date therefor.  Any payments made by or
on  behalf  of Agent or any  Lender  to an  issuer  and/or  related  parties  in
connection with any Letter of Credit shall constitute additional Revolving Loans
to such Borrower  pursuant to this Section 2 (or Special  Agent  Advances as the
case may be).

     (f) Borrowers  and  Guarantors  shall  indemnify and hold Agent and Lenders
harmless  from and  against any and all losses,  claims,  damages,  liabilities,
costs and expenses  which Agent or any Lender may suffer or incur in  connection
with any  Letter of Credit and any  documents,  drafts or  acceptances  relating
thereto, including any losses, claims, damages, liabilities,  costs and expenses
due to any  action  taken by any  issuer or  correspondent  with  respect to any
Letter  of  Credit,  except  to  the  extent  such  losses,   claims,   damages,
liabilities,  costs or expenses are a direct  result of the gross  negligence or
wilful  misconduct  of Agent or any  Lender as  determined  pursuant  to a final
non-appealable  order of a court of competent  jurisdiction.  Each  Borrower and
Guarantor  assumes all risks with respect to the acts or omissions of the drawer
under or beneficiary of any Letter of Credit and for such purposes the drawer or
beneficiary  shall be deemed such Borrower's  agent. Each Borrower and Guarantor
assumes all risks for, and agrees to pay, all foreign,  Federal, State and local
taxes,  duties and levies  relating to any goods subject to any Letter of Credit
or any documents,  drafts or acceptances thereunder. Each Borrower and Guarantor
hereby releases and holds Agent and Lenders  harmless from and against any acts,
waivers,  errors,  delays or omissions with respect to or relating to any Letter
of Credit,  except for the gross negligence or wilful misconduct of Agent or any
Lender as  determined  pursuant to a final,  non-appealable  order of a court of
competent jurisdiction.  The provisions of this Section 2.2(f) shall survive the
payment of Obligations and the termination of this Agreement.

     (g) In  connection  with  Inventory  purchased  pursuant  to any  Letter of
Credit,  Borrowers  and  Guarantors  shall,  at Agent's  request,  instruct  all
suppliers, carriers, forwarders, customs brokers, warehouses or others receiving
or holding cash,  checks,  Inventory,  documents or  instruments  in which Agent
holds a  security  interest  that upon  Agent's  request,  such  items are to be
delivered to Agent and/or subject to Agent's order,  and if they shall come into
such  Borrower's  or  Guarantor's  possession,  to deliver  them,  upon  Agent's
request,  to Agent in their original form. Except as otherwise  provided herein,
Agent shall not exercise such right to request such items so long as no Event of
Default  shall have  occurred and be  continuing.  Except as Agent may otherwise
specify,  Borrowers  shall designate Agent or the issuer of the Letter of Credit
related  thereto,  as the consignee on all bills of lading and other  negotiable
and non-negotiable documents.

     (h) Each Borrower and Guarantor hereby  irrevocably  authorizes and directs
any  issuer of a Letter of Credit to name  such  Borrower  or  Guarantor  as the
account  party  therein and to deliver to Agent all  instruments,  documents and
other writings and property  received by issuer pursuant to the Letter of Credit
and to accept and rely upon Agent's  instructions and agreements with respect to
all  matters  arising in  connection  with the Letter of Credit or the Letter of
Credit Documents with respect thereto.  Nothing contained herein shall be deemed
or construed to grant any Borrower or Guarantor any right or authority to pledge
the credit of Agent or any Lender in any manner. Agent and Lenders shall have no
liability of any kind with respect to any Letter of Credit provided by an issuer
unless Agent has duly executed and delivered to such issuer the application or a
guarantee or  indemnification  in writing with respect to such Letter of Credit.
Borrowers and Guarantors shall be bound by any reasonable interpretation made in
good faith by Agent, or any other issuer or correspondent under or in connection
with any Letter of Credit or any documents,  drafts or  acceptances  thereunder,
notwithstanding   that  such   interpretation   may  be  inconsistent  with  any
instructions of any Borrower or Guarantor.

     (i)  Immediately  upon the  issuance or  amendment of any Letter of Credit,
each Lender shall be deemed to have  irrevocably and  unconditionally  purchased
and  received,   without  recourse  or  warranty,   an  undivided  interest  and
participation  to the extent of such  Lender's  Pro Rata Share of the  liability
with  respect to such Letter of Credit and the  obligations  of  Borrowers  with
respect  thereto  (including  all  Letter of  Credit  Obligations  with  respect
thereto). Each Lender shall absolutely,  unconditionally and irrevocably assume,
as primary  obligor and not as surety,  and be obligated to pay to the issuer of
any such Letter of Credit therefor and discharge when due, its Pro Rata Share of
all of such  obligations  arising under such Letter of Credit.  Without limiting
the scope and nature of each Lender's  participation in any Letter of Credit, to
the extent that the issuer has not been reimbursed or otherwise paid as required
hereunder or under any such Letter of Credit,  each such Lender shall pay to the
issuer its Pro Rata Share of such unreimbursed drawing or other amounts then due
to issuer in connection therewith.

     (j) The  obligations of Borrowers to pay each Letter of Credit  Obligations
and the  obligations of Lenders to make payments to Agent for the account of any
issuer with respect to Letters of Credit shall be  absolute,  unconditional  and
irrevocable and shall be performed strictly in accordance with the terms of this
Agreement  under  any and all  circumstances,  whatsoever,  notwithstanding  the
occurrence  or  continuance  of any  Default,  Event of Default,  the failure to
satisfy  any  other  condition  set forth in  Section  4 or any  other  event or
circumstance.  If such amount is not made  available by a Lender when due, Agent
shall be  entitled  to  recover  such  amount on demand  from such  Lender  with
interest thereon,  for each day from the date such amount was due until the date
such amount is paid to Agent at the  interest  rate then  payable by Borrower in
respect of Loans that are Prime Rate  Loans.  Any such  reimbursement  shall not
relieve or otherwise impair the obligation of Borrower to reimburse Issuing Bank
under any Letter of Credit or make any other payment in connection therewith.

     (k) Any rights,  remedies,  duties or obligations  granted or undertaken by
any Borrower to any issuer or correspondent in any application for any Letter of
Credit, or any other agreement in favor of any issuer or correspondent  relating
to any Letter of Credit,  shall be deemed to have been granted or  undertaken by
such  Borrower to Agent.  Any duties or  obligations  undertaken by Agent to any
issuer or  correspondent  in any  application  for any Letter of Credit,  or any
other agreement by Agent in favor of any issuer or correspondent relating to any
Letter of Credit,  shall be deemed to have been undertaken by Borrowers to Agent
and to apply in all respects to Borrowers.

     2.3 Term Loans.

     (a) Subject to and upon the terms and conditions  contained  herein, on the
date hereof and upon the satisfaction of all the conditions set forth in Section
4,  each  Lender  severally  (and  not  jointly)  agrees  to  make  Term A Loans
(collectively,  the "Term A Loans") in an amount  equal to its Pro Rata Share of
the aggregate original principal amount of the Term A Loans of $22,508,000.  The
aggregate  original principal amount of the Term A Loans to Keystone shall be in
the amount of $21,311,150 and to EWP shall be in the amount of $1,196,850.

     (b) Subject to and upon the terms and conditions  contained  herein, on the
date on which the Real Property  Closing  Conditions  are satisfied and upon the
satisfaction of all the conditions set forth in Section 4, each Lender severally
(and not jointly) agrees to make Term B Loans (collectively, the "Term B Loans")
in an amount  equal to its Pro Rata Share of the  aggregate  original  principal
amount of the Term B Loans of $620,000.  The aggregate original principal amount
of the Term B Loans to EWP shall be in the amount of  $488,000  and to F V Steel
in the amount of $132,000.

     (c) Subject to and upon the terms and  conditions  contained  herein,  from
time to time after the date hereof upon the  written  request of  Administrative
Borrower to Agent which may be made no more  frequently than once in any 180 day
period (but no earlier than January 31, 2006),  each Lender  severally  (and not
jointly) agrees to make Term C Loans  (collectively,  the "Term C Loans") to the
Borrowers designated in such written request within five (5) Business Days after
Agent's  receipt  of such  written  request;  provided,  that all the  following
conditions  are  satisfied  with  respect  to each Term C Loan (i) each  written
request  designates  the  Borrower  to receive  the Term C Loan,  describes  the
Equipment on which such Term C Loan is to be based,  and specifies the amount of
such Term C Loan requested to be advanced,  (ii) each Term C Loan shall be based
on new  Equipment  purchased and not otherwise  supporting an  outstanding  Term
Loan, (iii) all the conditions set forth in Section 4 have been satisfied,  (iv)
each Term C Loan shall be made in increments  of $250,000,  (v) each Term C Loan
shall not exceed the lesser of (A) $10,000,000  less the principal amount of all
Term C Loans then outstanding,  (B) $23,128,000 less the principal amount of all
Term Loans then  outstanding  and (C) an amount equal to eighty (80%) percent of
the Net Recovery Percentage with respect to such new Equipment multiplied by the
cost of such new  Equipment,  (vi)  Agent  shall  have  received  a net  orderly
liquidation  value  appraisal  with  respect  to  such  new  Equipment  from  an
appraiser,  and in scope and methodology,  reasonably  satisfactory to Agent and
(vii) no Term C Loans may be made after August 31, 2009.

     (d) Each of the Term Loans shall be evidenced by this  Agreement,  shall be
repaid,  together  with  interest and other  amounts,  in  accordance  with this
Agreement and the other Financing  Agreements and shall be secured by all of the
Collateral.  If requested by Agent or any Lender,  the  Borrowers  shall further
evidence the Term Loans by executing  promissory  notes in the form  provided by
Agent.

     (e) The principal  amount of each Term A Loan shall be repaid in sixty (60)
consecutive  equal monthly  installments (or earlier as provided herein) payable
on the first day of each month  commencing on October 1, 2005, each in an amount
sufficient  (assuming a like repayment each month) to reduce each Term A Loan to
zero ($0) by the first day of September, 2010. The principal amount of each Term
B  Loan  shall  be  repaid  in  eighty-four  (84)   consecutive   equal  monthly
installments  (or earlier as provided  herein)  payable on the first day of each
month commencing on the first day of the month immediately following the date on
which each Term B Loan is made,  each in an amount  sufficient  (assuming a like
repayment  each  month)  to  reduce  each  Term  B  Loan  to  zero  ($0)  on the
eighty-fourth (84th) installment. The principal amount of each Term C Loan shall
be repaid in sixty (60)  consecutive  equal monthly  installments (or earlier as
provided  herein) payable on the first day of each month commencing on the first
day of the month  immediately  following  the date of which such Term C Loan was
made,  each in an amount  sufficient  (assuming a like  repayment each month) to
reduce  each  Term A Loan  to  zero  ($0) on the  sixtieth  (60th)  installment.
Notwithstanding the foregoing or anything in this Agreement to the contrary, all
Term Loans shall be due and payable on the earlier of (i) the Renewal Date, (ii)
if declared  due and payable  pursuant to Section  10.2 hereof or (iii) the date
the Commitment to make Revolving Loans is terminated.

     (f) Within five (5) Business Days of the date on which financial statements
are required to be delivered pursuant to Section 9.6(a)(ii) for each fiscal year
of Administrative  Borrower,  commencing with the fiscal year ended December 31,
2006,  Borrowers  shall prepay the Term Loans in an amount equal to  twenty-five
(25%)  percent of Excess  Cash Flow for such  fiscal year less the amount of any
voluntary  prepayments of the Term Loans made pursuant to Section 2.3(g) of this
Agreement in such fiscal year  (excluding  prepayments  from asset  sales).  Any
prepayments  from Excess Cash Flow shall be  allocated to each  Borrower's  Term
Loans based upon such Borrower's  relative  contribution to Excess Cash Flow and
shall be applied as follows:  first,  to  interest  then due and payable on that
Borrower's  Term Loans,  pro rata;  second,  to prepay the  scheduled  principal
installments  of that  Borrower's  Term  Loans,  pro rata,  in inverse  order of
maturity,  until such Term Loans have been prepaid in full;  third,  to interest
then due and payable on Revolving  Loans made to that Borrower;  fourth,  to the
principal balance of Revolving Loans outstanding to that Borrower until the same
have been paid in full (without a permanent  reduction in the Commitment to make
Revolving Loans); fifth, to any Letter of Credit Obligations of such Borrower to
provide cash collateral  therefore  until all such Letter of Credit  Obligations
have been fully cash collateralized;  sixth, to interest then due and payable on
the Term Loans of each other Borrower,  pro rata;  seventh, to the Term Loans of
each other Borrower, pro rata, to prepay the scheduled principal installments of
the Term  Loans of such other  Borrowers  in inverse  order of  maturity,  until
prepaid in full; eighth, to interest then due and payable on the Revolving Loans
outstanding  to each  other  Borrower  (without  a  permanent  reduction  in the
Commitment to make Revolving  Loans),  pro rata; ninth, to the principal balance
of the Revolving  Loans made to each other  Borrower,  pro rata,  until the same
have been paid in full,  and last to any  Letter of Credit  Obligations  of each
other Borrower,  pro rata, to provide cash  collateral  therefore until all such
Letter of Credit  Obligations  have been  fully cash  collateralized.  Each such
prepayment from Excess Cash Flow shall be accompanied by a certificate signed by
Administrative Borrower's chief financial officer certifying the manner in which
Excess Cash Flow, the resulting prepayment, and the method of allocation to each
Borrower's  Obligations were calculated,  which certificate shall be in form and
substance reasonably satisfactory to Agent.  Notwithstanding  anything herein to
the contrary,  prepayments from Excess Cash Flow shall not exceed  $2,000,000 in
any fiscal year of  Administrative  Borrower and shall not exceed  $5,000,000 in
the aggregate during the term of this Agreement.

     (g) At any time,  Borrowers  may  prepay  the  Loans,  in whole or in part,
subject to the  payment of any fees or expenses  that may be due under  Sections
3.3(d) and 13.1(c) of this Agreement. Prepayments (unless a prepayment in whole)
shall be in  increments  of  $100,000.  Any  prepayment  of a Term Loan shall be
applied to the  scheduled  installments  of such Term Loan in  inverse  order of
maturity.

     2.4  Commitments.  The aggregate  amount of each Lender's Pro Rata Share of
the Loans and Letter of Credit  Obligations  shall not exceed the amount of such
Lender's Commitment,  as the same may from time to time be amended in accordance
with the provisions hereof.

     SECTION 3. INTEREST AND FEES

3.1 Interest.

     (a) Borrowers shall pay to Agent,  for the benefit of Lenders,  interest on
the outstanding principal amount of the Loans at the Interest Rate. All interest
accruing  hereunder on and after the date of and during the  continuance  of any
Event of Default or termination hereof shall be payable on demand.

     (b) Each Borrower (or  Administrative  Borrower on behalf of such Borrower)
may from time to time  request  Eurodollar  Rate Loans or may request that Prime
Rate Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar
Rate Loans  continue  for an  additional  Interest  Period.  Such request from a
Borrower (or  Administrative  Borrower on behalf of such Borrower) shall specify
the amount of the Eurodollar Rate Loans or the amount of the Prime Rate Loans to
be converted to Eurodollar Rate Loans or the amount of the Eurodollar Rate Loans
to be continued  (subject to the limits set forth below) and the Interest Period
to be  applicable  to such  Eurodollar  Rate  Loans.  Subject  to the  terms and
conditions  contained herein,  three (3) Business Days after receipt by Agent of
such a request  from a Borrower  (or  Administrative  Borrower on behalf of such
Borrower), such Eurodollar Rate Loans shall be made or Prime Rate Loans shall be
converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue,
as the case may be,  provided,  that,  (i) no Default or Event of Default  shall
exist or have occurred and be  continuing,  (ii) no party hereto shall have sent
any  notice  of  termination  of  this   Agreement,   (iii)  such  Borrower  (or
Administrative  Borrower on behalf of such  Borrower)  shall have  complied with
such customary  procedures as are established by Agent and specified by Agent to
Administrative  Borrower  from  time to  time  for  requests  by  Borrowers  for
Eurodollar  Rate Loans,  (iv) no more than five (5)  Interest  Periods may be in
effect at any one time, (v) the aggregate  amount of the  Eurodollar  Rate Loans
must be in an  amount  not less  than  $1,000,000  or an  integral  multiple  of
$500,000 in excess thereof, (vi) the maximum amount of the Eurodollar Rate Loans
in the aggregate at any time requested by Borrowers  shall not exceed the amount
equal to (A) the lowest aggregate principal amount of the Term Loans which it is
anticipated  will be outstanding  as of the last day of the applicable  Interest
Period  plus (B) eighty  (80%)  percent of the  lowest  principal  amount of the
Revolving  Loans  which  it  is  anticipated  will  be  outstanding  during  the
applicable  Interest  Period,  in each case as determined by Agent in good faith
(but with no obligation of Agent or Lenders to make such Loans), and (vii) Agent
and each  Lender  shall have  determined  that the  Interest  Period or Adjusted
Eurodollar  Rate is available to Agent and such Lender and can be  determined as
of the date of the request for such Eurodollar  Rate Loan by such Borrower.  Any
request by or on behalf of a Borrower  for  Eurodollar  Rate Loans or to convert
Prime Rate Loans to Eurodollar Rate Loans or to continue any existing Eurodollar
Rate  Loans  shall be  irrevocable.  Notwithstanding  anything  to the  contrary
contained  herein,  Agent and Lenders  shall not be required to purchase  United
States  Dollar  deposits  in the  London  interbank  market or other  applicable
Eurodollar  Rate market to fund any  Eurodollar  Rate Loans,  but the provisions
hereof  shall be deemed  to apply as if Agent and  Lenders  had  purchased  such
deposits to fund the Eurodollar Rate Loans.

     (c) Any  Eurodollar  Rate Loans shall  automatically  convert to Prime Rate
Loans upon the last day of the  applicable  Interest  Period,  unless  Agent has
received a request to  continue  such  Eurodollar  Rate Loan at least  three (3)
Business  Days prior to such last day in accordance  with the terms hereof.  Any
Eurodollar  Rate  Loans  shall,  at  Agent's  option,  upon  notice  by Agent to
Administrative  Borrower,  be subsequently  converted to Prime Rate Loans in the
event that this Agreement shall terminate or not be renewed. Borrowers shall pay
to Agent, for the benefit of Lenders, upon demand by Agent (or Agent may, at its
option,  charge any loan  account  of any  Borrower)  any  amounts  required  to
compensate any Lender or Participant for any loss (including loss of anticipated
profits), cost or expense incurred by such person, as a result of the conversion
of Eurodollar  Rate Loans to Prime Rate Loans prior to the end of the applicable
Interest Period.

     (d) Interest  shall be payable by  Borrowers  to Agent,  for the account of
Lenders,  monthly in arrears not later than the first day of each calendar month
and shall be calculated on the basis of a three hundred sixty (360) day year and
actual days elapsed. The interest rate on non-contingent Obligations (other than
Eurodollar  Rate Loans)  shall  increase or decrease by an amount  equal to each
increase  or decrease  in the Prime Rate  effective  on the day of any change in
such Prime Rate.  In no event shall  charges  constituting  interest  payable by
Borrowers to Agent and Lenders  exceed the maximum  amount or the rate permitted
under any  applicable  law or  regulation,  and if any such part or provision of
this Agreement is in contravention  of any such law or regulation,  such part or
provision shall be deemed amended to conform thereto.

     3.2 Fees.

     (a) Borrowers  shall pay to Agent,  for the account of Lenders,  monthly an
unused line fee at a rate equal to one  quarter of one (.25%)  percent per annum
calculated  upon the  amount by which  $80,000,000  exceeds  the  average  daily
principal  balance of the  outstanding  Loans and  Letters of Credit  during the
immediately  preceding month (or part thereof) while this Agreement is in effect
and for so long  thereafter  as any of the  Obligations  (other than  contingent
indemnification  obligations  not  asserted or due) are  outstanding,  which fee
shall be payable on the first day of each month in arrears.

     (b) In the case of Letters of Credit, Borrowers shall pay to Agent, for the
account of Lenders,  a fee at a rate equal to the then applicable  Interest Rate
for Letter of Credit  Obligations on the average daily maximum amount  available
to be drawn under all of such  Letters of Credit for the  immediately  preceding
month  (or  part  thereof),  payable  in  arrears  as of the  first  day of each
succeeding month, computed for each day from the date of issuance to the date of
expiration.  Such  letter of credit fees shall be  calculated  on the basis of a
three hundred sixty (360) day year and actual days elapsed and the obligation of
Borrowers to pay such fee shall survive the  termination  or non-renewal of this
Agreement.  In addition to the letter of credit fees provided  above,  Borrowers
shall pay to the  issuer of any Letter of Credit  for its own  account  (without
sharing with Lenders) the letter of credit fronting and negotiation  fees agreed
to by Borrowers and such issuer from time to time and the customary charges from
time to time of such issuer with respect to the issuance,  amendment,  transfer,
administration, cancellation and conversion of, and drawings under, such Letters
of Credit.

     (c)  Borrowers  shall pay to Agent the other fees and  amounts set forth in
the Fee Letter in the amounts and at the times specified therein.

     3.3 Changes in Laws and Increased Costs of Loans.

     (a) If  after  the  date  hereof,  either  (i)  any  change  in,  or in the
interpretation  of, any law or  regulation  is  introduced,  including,  without
limitation, with respect to reserve requirements (other than reserves taken into
account in the  calculation  of the "Reserve  Percentage"  in the  definition of
"Adjusted  Eurodollar  Rate"),  applicable  to  any  Lender  or any  banking  or
financial  institution  from whom any Lender  borrows funds or obtains credit (a
"Funding  Bank"),  or (ii) a Funding Bank or any Lender complies with any future
guideline or request from any central  bank or other  Governmental  Authority or
(iii) a Funding Bank or any Lender  reasonably  determines  that the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any change
therein,  or any change in the  interpretation or administration  thereof by any
Governmental  Authority,  central  bank or  comparable  agency  charged with the
interpretation or administration  thereof has or would have the effect described
below,  or a Funding Bank or any Lender  complies  with any request or directive
regarding  capital adequacy (whether or not having the force of law) of any such
authority,  central bank or comparable  agency, and in the case of any event set
forth in this clause (iii),  such  adoption,  change or compliance  has or would
have the  direct  or  indirect  effect  of  reducing  the rate of  return on any
Lender's capital as a consequence of its obligations  hereunder to a level below
that which such Lender  could have  achieved  but for such  adoption,  change or
compliance  (taking into  consideration  the Funding Bank's or Lender's policies
with  respect  to capital  adequacy)  by an amount  deemed by such  Lender to be
material,  and the result of any of the  foregoing  events  described in clauses
(i),  (ii) or (iii) is or  results in an  increase  in the cost to any Lender of
funding or maintaining the Loans, the Letters of Credit or its Commitment,  then
Borrowers and Guarantors  shall from time to time within five (5) days of demand
by Agent pay to Agent  additional  amounts  sufficient to indemnify  such Lender
against such  increased  cost on an after-tax  basis (after  taking into account
applicable  deductions  and  credits in respect  of the amount  indemnified).  A
certificate  (with  reasonably  detailed  calculations) as to the amount of such
increased  cost shall be  submitted to  Administrative  Borrower by Agent or the
applicable Lender and shall be conclusive, absent manifest error.

     (b) If prior to the first day of any Interest Period,  (i) Agent shall have
determined in good faith (which  determination  shall be conclusive  and binding
upon  Borrowers  and  Guarantors  absent  manifest  error)  that,  by  reason of
circumstances  affecting the relevant  market,  adequate and reasonable means do
not  exist for  ascertaining  the  Adjusted  Eurodollar  Rate for such  Interest
Period,  (ii) Agent has  received  notice  from the  Required  Lenders  that the
Adjusted Eurodollar Rate determined or to be determined for such Interest Period
will not  adequately  and  fairly  reflect  the cost to  Lenders  of  making  or
maintaining  Eurodollar Rate Loans during such Interest Period,  or (iii) Dollar
deposits in the  principal  amounts of the  Eurodollar  Rate Loans to which such
Interest  Period is to be applicable  are not generally  available in the London
interbank  market,  Agent shall give  telecopy or telephonic  notice  thereof to
Administrative  Borrower as soon as practicable  thereafter,  and will also give
prompt written notice to Administrative  Borrower when such conditions no longer
exist.  If such notice is given (A) any  Eurodollar  Rate Loans  requested to be
made on the first day of such Interest Period shall be made as Prime Rate Loans,
(B) any Loans that were to have been converted on the first day of such Interest
Period to or  continued  as  Eurodollar  Rate  Loans  shall be  converted  to or
continued  as Prime Rate  Loans and (C) each  outstanding  Eurodollar  Rate Loan
shall be converted, on the last day of the then-current Interest Period thereof,
to Prime Rate Loans.  Until such notice has been withdrawn by Agent,  no further
Eurodollar Rate Loans shall be made or continued as such, nor shall any Borrower
(or Administrative Borrower on behalf of any Borrower) have the right to convert
Prime Rate Loans to Eurodollar Rate Loans.

     (c)  Notwithstanding  any other provision herein, if the adoption of or any
change  in  any  law,  treaty,  rule  or  regulation  or  final,  non-appealable
determination of an arbitrator or a court or other Governmental  Authority or in
the interpretation or application  thereof occurring after the date hereof shall
make it  unlawful  for Agent or any Lender to make or maintain  Eurodollar  Rate
Loans as contemplated by this Agreement, (i) Agent or such Lender shall promptly
give written notice of such  circumstances  to  Administrative  Borrower  (which
notice shall be withdrawn whenever such circumstances no longer exist), (ii) the
commitment  of such Lender  hereunder to make  Eurodollar  Rate Loans,  continue
Eurodollar  Rate Loans as such and convert Prime Rate Loans to  Eurodollar  Rate
Loans shall  forthwith be canceled and, until such time as it shall no longer be
unlawful for such Lender to make or maintain  Eurodollar Rate Loans, such Lender
shall then have a  commitment  only to make a Prime Rate Loan when a  Eurodollar
Rate Loan is  requested  and (iii)  such  Lender's  Loans  then  outstanding  as
Eurodollar  Rate Loans, if any, shall be converted  automatically  to Prime Rate
Loans on the  respective  last days of the then  current  Interest  Periods with
respect to such Loans or within such  earlier  period as required by law. If any
such  conversion of a Eurodollar Rate Loan occurs on a day which is not the last
day of the then current  Interest  Period with respect  thereto,  Borrowers  and
Guarantors  shall pay to such  Lender such  amounts,  if any, as may be required
pursuant to Section 3.3(d) below.

     (d) Borrowers and Guarantors  shall  indemnify Agent and each Lender and to
hold Agent and each Lender harmless from any loss or expense which Agent or such
Lender may  sustain or incur as a  consequence  of (i)  default by  Borrower  in
making a borrowing of,  conversion  into or extension of  Eurodollar  Rate Loans
after such Borrower (or Administrative  Borrower on behalf of such Borrower) has
given a notice  requesting  the same in accordance  with the  provisions of this
Loan  Agreement,  (ii)  default by any  Borrower in making any  prepayment  of a
Eurodollar  Rate  Loan  after  such  Borrower  has  given a  notice  thereof  in
accordance  with the  provisions  of this  Agreement,  and (iii) the making of a
prepayment  of  Eurodollar  Rate  Loans on a day which is not the last day of an
Interest  Period with respect  thereto.  With respect to Eurodollar  Rate Loans,
such  indemnification  may include an amount equal to the excess, if any, of (A)
the amount of interest which would have accrued on the amount so prepaid, or not
so  borrowed,  converted  or  extended,  for the  period  from  the date of such
prepayment  or of such  failure to borrow,  convert or extend to the last day of
the applicable Interest Period (or, in the case of a failure to borrow,  convert
or extend,  the  Interest  Period that would have  commenced on the date of such
failure) in each case at the  applicable  rate of interest  for such  Eurodollar
Rate Loans provided for herein over (B) the amount of interest (as determined by
such Agent or such  Lender)  which would have accrued to Agent or such Lender on
such  amount by placing  such  amount on deposit  for a  comparable  period with
leading banks in the interbank  Eurodollar  market.  This covenant shall survive
the  termination  or  non-renewal  of  this  Agreement  and the  payment  of the
Obligations.

SECTION 4. CONDITIONS PRECEDENT

     4.1  Conditions  Precedent  to Initial  Loans and  Letters  of Credit.  The
obligation  of  Lenders  to make the  initial  Loans or of Agent and  Lenders to
provide  for  the  initial  Letters  of  Credit  hereunder  is  subject  to  the
satisfaction  of, or waiver of,  immediately  prior to or concurrently  with the
making  of such  Loan or the  issuance  of such  Letter of Credit of each of the
following conditions precedent:

     (a)  Agent  shall  have   received,   in  form  and  substance   reasonably
satisfactory to Agent,  all releases,  terminations  and such other documents as
Agent may reasonably  request to evidence and effectuate the  termination by the
Existing Lenders of their respective  financing  arrangements with Borrowers and
Guarantors and the termination and release by it or them, as the case may be, of
any interest in and to any assets and properties of each Borrower and Guarantor,
duly authorized,  executed and delivered by it or each of them,  including,  but
not limited to, (i) UCC termination  statements for all UCC financing statements
previously  filed by it or any of them or their  predecessors,  as secured party
and any Borrower or Guarantor,  as debtor; and (ii) satisfactions and discharges
of any  mortgages,  deeds of trust or deeds to secure  debt by any  Borrower  or
Guarantor in favor of it or any of them, in form  acceptable  for recording with
the appropriate Governmental Authority;

     (b) all requisite  corporate action and proceedings in connection with this
Agreement and the other Financing Agreements shall be reasonably satisfactory in
form and substance to Agent,  and Agent shall have received all  information and
copies of all documents,  including  records of requisite  corporate  action and
proceedings which Agent may have reasonably  requested in connection  therewith,
such  documents  where  requested  by Agent or its  counsel to be  certified  by
appropriate  corporate officers or Governmental  Authority (and including a copy
of the certificate of incorporation of each Borrower and Guarantor  certified by
the Secretary of State (or equivalent  Governmental  Authority)  which shall set
forth the same complete  corporate  name of such Borrower or Guarantor as is set
forth  herein  and  such   document  as  shall  set  forth  the   organizational
identification  number of each  Borrower or  Guarantor,  if one is issued in its
jurisdiction of incorporation);

     (c) no material  adverse  change  shall have  occurred  in the  business or
operations of Borrowers since July 29, 2005;

     (d) Agent shall have  completed a field review and audit of the Records and
such other  information  with respect to the  Collateral as Agent may reasonably
require to determine  the amount of Loans  available  to  Borrowers  (including,
without limitation,  current perpetual inventory records and/or roll-forwards of
Accounts  and  Inventory  through  the date of  closing  and test  counts of the
Inventory  in a manner  reasonably  satisfactory  to Agent,  together  with such
supporting  documentation  as may be reasonably  necessary or  appropriate,  and
other  documents and information  that will enable Agent to accurately  identify
and  verify  the  Collateral),  the  results  of  which  in each  case  shall be
reasonably satisfactory to Agent, not more than three (3) Business Days prior to
the date hereof or such earlier date as Agent may agree;

     (e)  Agent  shall  have   received,   in  form  and  substance   reasonably
satisfactory  to  Agent,  all  consents,  waivers,   acknowledgments  and  other
agreements  from third  persons  which Agent may deem  reasonably  necessary  or
desirable in order to permit,  protect and perfect its security interests in and
liens upon the  Collateral or to effectuate  the  provisions or purposes of this
Agreement and the other Financing  Agreements,  including,  without  limitation,
Collateral Access Agreements;  (f) the Excess  Availability in the aggregate for
all  Borrowers  as of the date hereof shall be not less than  $15,000,000  after
giving  effect to (i) the initial Loans made or to be made and Letters of Credit
issued or to be issued in connection  with the initial  transactions  hereunder,
(ii) all  payments  required to be made under the Plan of  Reorganization  on or
about the Effective Date (as defined  therein),  and (iii) all transaction  fees
and  expenses  associated  with the  Plan of  Reorganization  and the  Financing
Agreements on or about the Effective Date;

     (g) Agent shall have received, in form and substance satisfactory to Agent,
Deposit  Account  Control  Agreements  by and among  Agent,  each  Borrower  and
Guarantor,  as the case may be and each bank where such Borrower (or  Guarantor)
has a deposit account, in each case, duly authorized,  executed and delivered by
such bank and Borrower or  Guarantor,  as the case may be (or Agent shall be the
bank's customer with respect to such deposit account as Agent may specify);

     (h) Agent shall have received evidence, in form and substance  satisfactory
to Agent,  that Agent has a valid perfected first priority  security interest in
all or  substantially  all of  the  Collateral  subject  to  security  interests
permitted under Section 9.8;

     (i) Agent shall have received and reviewed lien and judgment search results
for the  jurisdiction  of  organization  of each  Borrower  and  Guarantor,  the
jurisdiction  of the chief  executive  office of each Borrower and Guarantor and
all jurisdictions in which assets of Borrowers and Guarantors are located, which
search results shall be in form and substance satisfactory to Agent;

     (j) Except for the real property located in Peoria,  Illinois,  Agent shall
have  received  environmental  audits of the Real  Property to be subject to the
Mortgages conducted by an independent  environmental engineering firm reasonably
acceptable to Agent, and in form, scope and methodology reasonably  satisfactory
to Agent, the results of which shall be reasonably satisfactory to Agent;

     (k) With respect to the Mortgaged  Properties (except for the real property
located in Peoria,  Illinois),  Agent shall have received, in form and substance
reasonably  satisfactory to Agent, a valid and effective title insurance  policy
issued by a company and agent  reasonably  acceptable to Agent: (i) insuring the
priority, amount and sufficiency of the Mortgages, (ii) insuring against matters
materially affecting the Mortgaged Properties that would be disclosed by surveys
and  (iii)  containing  any  legally  available   endorsements,   assurances  or
affirmative  coverage  reasonably  requested  by  Agent  for  protection  of its
interests;

     (l)  Agent  shall  have  received  originals  of the  shares  of the  stock
certificates  representing  all of the  issued  and  outstanding  shares  of the
Capital Stock of each  Borrower and  Guarantor  (other than Parent) and owned by
any Borrower or Guarantor, in each case together with stock powers duly executed
in blank with respect thereto;

     (m)  Agent  shall  have  received  evidence  of  insurance  and loss  payee
endorsements  required  hereunder and under the other Financing  Agreements,  in
form and  substance  reasonably  satisfactory  to  Agent,  and  certificates  of
insurance policies and/or endorsements naming Agent as loss payee;

     (n) Except for the real property located in Peoria,  Illinois,  Agent shall
have received appraisals with respect to the Borrower's Inventory, Equipment and
Mortgaged Properties conducted by appraisers reasonably acceptable to Agent, all
in form, scope and methodology reasonably  satisfactory to Agent, the results of
which shall be  reasonably  satisfactory  to Agent and Agent shall have received
reliance letters from such appraisers;

     (o)  Agent  shall  have   received,   in  form  and  substance   reasonably
satisfactory  to Agent,  such  opinion  letters  of  counsel  to  Borrowers  and
Guarantors  with respect to the Financing  Agreements  and such other matters as
Agent may reasonably request;

     (p)  (i)  The  Plan  of  Reorganization  shall  be in  form  and  substance
satisfactory to Agent and shall have been confirmed pursuant to the Confirmation
Order;  (ii) Borrowers  shall have delivered to Agent a true and correct copy of
the  Confirmation  Order,  in form and substance  satisfactory  to Agent;  (iii)
Borrowers shall have complied in full with the notice and other requirements for
confirmation of the Plan of Reorganization and entry of the Confirmation  Order;
(iv) the Bankruptcy Court shall have entered the Confirmation Order, in form and
substance  satisfactory to Agent (A) authorizing the secured financing under the
Financing  Agreements  and (B) revesting in Borrowers all property of Borrowers'
estate, free and clear of all interests,  liens, claims and encumbrances (except
liens securing the Obligations and as otherwise  permitted in writing by Agent);
(v) the  Confirmation  Order shall be a "Final Order" (as defined in the Plan of
Reorganization);  and (vi) the conditions  precedent to the  confirmation of the
Plan of Reorganization shall have been satisfied or validly waived in accordance
with the  terms of the Plan of  Reorganization  and  Confirmation  Order and the
"Effective  Date"  (as  defined  in  the  Plan  of  Reorganization)  shall  have
contemporaneously occurred under the Plan of Reorganization; and

     (q) the other  Financing  Agreements and all  instruments and documents set
forth on Exhibit D hereto shall have been duly  executed and delivered to Agent,
in form and substance reasonably satisfactory to Agent.

     4.2 Conditions Precedent to All Loans and Letters of Credit. The obligation
of Lenders to make the Loans,  including the initial Loans,  or of the Agent and
Lenders to provide for any Letter of Credit,  including  the initial  Letters of
Credit,  is subject to the further  satisfaction  of, or waiver of,  immediately
prior to or  concurrently  with the making of each such Loan or the  issuance of
such Letter of Credit of each of the following conditions precedent:

     (a) all  representations  and warranties  contained herein and in the other
Financing Agreements shall be true and correct in all material respects (without
duplication  in  respect  of any  materiality  qualifier  set  forth in any such
representation and warranty) with the same effect as though such representations
and  warranties  had been made on and as of the date of the  making of each such
Loan or providing  each such Letter of Credit and after giving  effect  thereto,
except to the extent that such  representations and warranties  expressly relate
solely to an earlier  date (in which case such  representations  and  warranties
shall have been true and accurate in all material respects (without  duplication
in respect of any materiality qualifier set forth in any such representation and
warranty) on and as of such earlier date);

     (b) no law,  regulation,  order,  judgment  or decree  of any  Governmental
Authority  shall  exist,  and no  action,  suit,  investigation,  litigation  or
proceeding  shall be pending or threatened in any court or before any arbitrator
or Governmental Authority,  which (i) purports to enjoin, prohibit,  restrain or
otherwise affect (A) the making of the Loans or providing the Letters of Credit,
or (B) the consummation of the transactions  contemplated  pursuant to the terms
hereof  or the  other  Financing  Agreements  or  (ii)  has or has a  reasonable
likelihood of having a Material Adverse Effect; and

     (c) no Default  or Event of Default  shall  exist or have  occurred  and be
continuing  on and as of the date of the making of such Loan or  providing  each
such Letter of Credit and after giving effect thereto.

     SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST

     5.1 Grant of Security  Interest.  To secure payment and  performance of all
Obligations,  each Borrower and Guarantor hereby grants to Agent, for itself and
the benefit of Lenders,  a continuing  security  interest in, a lien upon, and a
right of set off against,  and hereby collaterally  assigns to Agent, for itself
and the benefit of Lenders,  as security,  all  personal  and real  property and
fixtures,  and  interests  in  property  and  fixtures,  of  each  Borrower  and
Guarantor,  whether now owned or hereafter  acquired or  existing,  and wherever
located (together with all other collateral  security for the Obligations at any
time  granted to or held or acquired by Agent or any Lender,  collectively,  the
"Collateral"), including:

     (a) all Accounts;

     (b)  all  general   intangibles,   including,   without   limitation,   all
Intellectual Property;

     (c) all goods, including, without limitation, Inventory and Equipment;

     (d) all Real Property and fixtures;

     (e) all chattel  paper,  including,  without  limitation,  all tangible and
electronic chattel paper;

     (f) all instruments, including, without limitation, all promissory notes;

     (g) all documents;

     (h) all deposit accounts;

     (i) all letters of credit, banker's acceptances and similar instruments and
including all letter-of-credit rights;

     (j) all supporting  obligations and all present and future liens,  security
interests,  rights,  remedies,  title  and  interest  in, to and in  respect  of
Receivables  and other  Collateral,  including (i) rights and remedies  under or
relating to guaranties,  contracts of  suretyship,  letters of credit and credit
and other  insurance  related to the  Collateral,  (ii)  rights of  stoppage  in
transit, replevin, repossession, reclamation and other rights and remedies of an
unpaid  vendor,  lienor or secured  party,  (iii) goods  described  in invoices,
documents,  contracts or instruments with respect to, or otherwise  representing
or evidencing,  Receivables or other Collateral, including returned, repossessed
and reclaimed  goods,  and (iv)  deposits by and property of account  debtors or
other persons securing the obligations of account debtors;

     (k) all (i) investment property (including securities, whether certificated
or  uncertificated,   securities  accounts,  security  entitlements,   commodity
contracts or commodity accounts) and (ii) monies, credit balances,  deposits and
other property of any Borrower or Guarantor now or hereafter held or received by
or in transit to Agent,  any Lender or its Affiliates or at any other depository
or other  institution  from or for the  account of any  Borrower  or  Guarantor,
whether for safekeeping, pledge, custody, transmission, collection or otherwise;

     (l) all  commercial  tort  claims,  including,  without  limitation,  those
identified in the Information Certificate;

     (m) to the extent not otherwise described above, all Receivables;

     (n) all Records; and

     (o) all  products  and proceeds of the  foregoing,  in any form,  including
insurance proceeds and all claims against third parties for loss or damage to or
destruction of or other  involuntary  conversion of any kind or nature of any or
all of the other Collateral.

     Anything contained in this Agreement to the contrary  notwithstanding,  the
term "Collateral"  shall not include (A) any rights or interest in any contract,
lease,  permit,  charter or  license  agreement  covering  real,  intangible  or
personal  property  of a  Borrower  or  Guarantor  if  under  the  terms of such
contract,  lease, permit,  charter or license agreement,  or applicable law with
respect thereto,  the valid grant of a security  interest or lien therein to the
Agent is  prohibited  as a matter of law or under  the terms of such  agreement,
contract,  lease, permit,  charter or license agreement and such prohibition has
not been or is not waived or the  consent of the other  party to such  contract,
lease,  permit,  charter or license  agreement  has not been or is not otherwise
obtained;  provided,  that any such contract,  lease, permit, charter or license
agreement shall only be excluded  hereunder to the extent and for so long as the
consequences  specified  in this  clause  (A)  shall  result  and  shall  become
Collateral  immediately and  automatically at such time as such consequences are
no longer in effect;  or (B) any  Equipment  or other  assets of a  Borrower  or
Guarantor  in which a  negative  pledge  agreed  to,  under a  capital  lease or
purchase money indebtedness;  provided, that, the foregoing exclusions under (A)
and (B) shall in no way be construed (1) to apply if any  described  prohibition
is  unenforceable  under  Sections  9-406,  9-407,  or 9-408 of the UCC or other
applicable  law or  principles  of  equity,  or (2) so as to limit,  impair,  or
otherwise affect the Agent's continuing security interests in and liens upon any
rights or  interests of a Borrower or Guarantor in or to monies due or to become
due under any described contract, lease, permit, charter or license agreement or
(3) to limit,  impair,  or  otherwise  affect the  Agent's  continuing  security
interests  in and liens upon any rights or  interests of a Borrower or Guarantor
in and to any proceeds from the sale,  license,  lease, or other dispositions of
any such contract, lease, permit, charter or license agreement.

     5.2 Perfection of Security Interests.

     (a) Each Borrower and Guarantor irrevocably and unconditionally  authorizes
Agent (or its  agent)  to file at any time and from time to time such  financing
statements  with respect to the  Collateral  naming Agent or its designee as the
secured  party and such  Borrower or Guarantor as debtor,  as Agent may require,
and including the Collateral as all assets of such Borrower or Guarantor, as the
case may be, or words of similar effect and including any other information with
respect to such Borrower or Guarantor or otherwise required by part 5 of Article
9 of the Uniform  Commercial  Code of such  jurisdiction as Agent may determine,
together  with any  amendment  and  continuations  with respect  thereto,  which
authorization  shall apply to all  financing  statements  filed on,  prior to or
after the date hereof.  Each Borrower and Guarantor hereby ratifies and approves
all financing  statements naming Agent or its designee as secured party and such
Borrower  or  Guarantor,  as the case may be,  as  debtor  with  respect  to the
Collateral (and any amendments with respect to such financing  statements) filed
by or on behalf of Agent prior to the date hereof and  ratifies and confirms the
authorization  of Agent to file such financing  statements (and  amendments,  if
any). Each Borrower and Guarantor hereby  authorizes Agent to adopt on behalf of
such  Borrower  and  Guarantor  any  symbol  required  for   authenticating  any
electronic  filing.  In the event that the  description of the collateral in any
financing  statement  naming Agent or its designee as the secured  party and any
Borrower or Guarantor as debtor  includes assets and properties of such Borrower
or Guarantor that do not at any time constitute  Collateral,  whether hereunder,
under any of the other  Financing  Agreements or  otherwise,  the filing of such
financing  statement shall  nonetheless be deemed authorized by such Borrower or
Guarantor to the extent of the Collateral  included in such  description  and it
shall not render the financing statement ineffective as to any of the Collateral
or  otherwise  affect  the  financing  statement  as it  applies  to  any of the
Collateral.  In no event shall any Borrower or  Guarantor  at any time file,  or
permit or cause to be filed, any correction  statement or termination  statement
with respect to any  financing  statement  (or  amendment or  continuation  with
respect thereto) naming Agent or its designee as secured party and such Borrower
or Guarantor as debtor.

     (b) Each  Borrower and Guarantor  does not have any chattel paper  (whether
tangible or  electronic)  or  instruments  as of the date hereof,  except as set
forth  in the  Information  Certificate.  In the  event  that  any  Borrower  or
Guarantor  shall be entitled to or shall receive any chattel paper or instrument
with a face value in excess of $250,000, individually or in the aggregate, after
the date hereof, Borrowers and Guarantors shall promptly notify Agent thereof in
writing.  Promptly upon the request of Agent,  such Borrower or Guarantor  shall
deliver,  or cause to be delivered to Agent, all such tangible chattel paper and
instruments  that such  Borrower or  Guarantor  has or may at any time  acquire,
accompanied by such instruments of transfer or assignment duly executed in blank
as Agent  may from  time to time  specify,  in each  case  except  as Agent  may
otherwise agree. At Agent's option,  each Borrower and Guarantor shall, or Agent
may at any time on behalf of any  Borrower or  Guarantor,  cause the original of
any such  instrument or chattel paper to be  conspicuously  marked in a form and
manner  acceptable to Agent with the following legend referring to chattel paper
or instruments as applicable:  "This [chattel paper]  [instrument] is subject to
the security interest of Wachovia Capital Finance Corporation  (Central) and any
sale,  transfer,  assignment or encumbrance of this [chattel paper] [instrument]
violates the rights of such secured party."

     (c) In the event that any Borrower or  Guarantor  shall at any time hold or
acquire an interest in any electronic chattel paper or any "transferable record"
(as such term is defined in Section 201 of the Federal Electronic  Signatures in
Global and  National  Commerce  Act or in Section 16 of the  Uniform  Electronic
Transactions  Act as in effect in any relevant  jurisdiction),  such Borrower or
Guarantor shall promptly notify Agent thereof in writing.  Promptly upon Agent's
request,  such  Borrower or  Guarantor  shall take,  or cause to be taken,  such
actions as Agent may reasonably request to give Agent control of such electronic
chattel paper under  Section  9-105 of the UCC and control of such  transferable
record  under  Section 201 of the Federal  Electronic  Signatures  in Global and
National  Commerce  Act or,  as the  case  may  be,  Section  16 of the  Uniform
Electronic Transactions Act, as in effect in such jurisdiction.

     (d) Each  Borrower and Guarantor  does not have any deposit  accounts as of
the date hereof, except as set forth in the Information  Certificate.  Borrowers
and Guarantors  shall not,  directly or indirectly,  after the date hereof open,
establish  or  maintain  any  deposit  account  unless  each  of  the  following
conditions  is  satisfied:  (i) Agent shall have received not less than five (5)
Business Days prior written notice of the intention of any Borrower or Guarantor
to open or establish  such account  which  notice  shall  specify in  reasonable
detail and specificity  reasonably  acceptable to Agent the name of the account,
the owner of the account, the name and address of the bank at which such account
is to be  opened  or  established,  the  individual  at such bank with whom such
Borrower or Guarantor  is dealing and the purpose of the account,  (ii) the bank
where such account is opened or  maintained  shall be  reasonably  acceptable to
Agent, and (iii) on or before the opening of such deposit account, such Borrower
or  Guarantor  shall as Agent may specify  either (A) deliver to Agent a Deposit
Account Control  Agreement with respect to such deposit account duly authorized,
executed and  delivered by such Borrower or Guarantor and the bank at which such
deposit  account is opened and maintained or (B) arrange for Agent to become the
customer of the bank with respect to the deposit account on terms and conditions
acceptable to Agent. The terms of this subsection (d) shall not apply to deposit
accounts (i) specifically  and exclusively  used for payroll,  payroll taxes and
other employee wage and benefit payments to or for the benefit of any Borrower's
or Guarantor's  salaried  employees and (ii) with a balance of less than $25,000
for any one account so long as the  aggregate  balance in all such accounts does
not exceed $100,000.

     (e) No  Borrower  or  Guarantor  owns or  holds,  directly  or  indirectly,
beneficially or as record owner or both, any investment property, as of the date
hereof, or has any investment account,  securities account, commodity account or
other  similar  account with any bank or other  financial  institution  or other
securities intermediary or commodity intermediary as of the date hereof, in each
case except as set forth in the Information Certificate.

     (i) In the event that any  Borrower  or  Guarantor  shall be entitled to or
shall at any time  after  the  date  hereof  hold or  acquire  any  certificated
securities,  such  Borrower or  Guarantor  shall  promptly  endorse,  assign and
deliver  the same to Agent,  accompanied  by such  instruments  of  transfer  or
assignment duly executed in blank as Agent may from time to time specify. If any
securities,  now  or  hereafter  acquired  by  any  Borrower  or  Guarantor  are
uncertificated  and are issued to such  Borrower  or  Guarantor  or its  nominee
directly by the issuer  thereof,  such Borrower or Guarantor  shall  immediately
notify Agent thereof and shall as Agent may specify, either (A) cause the issuer
to agree to comply with instructions  from Agent as to such securities,  without
further consent of any Borrower or Guarantor or such nominee, or (B) arrange for
Agent to become the registered owner of the securities.

     (ii) Borrowers and Guarantors shall not, directly or indirectly,  after the
date hereof  open,  establish  or maintain any  investment  account,  securities
account,  commodity  account or any other similar  account (other than a deposit
account) with any securities  intermediary or commodity intermediary unless each
of the following conditions is satisfied: (A) Agent shall have received not less
than five (5)  Business  Days  prior  written  notice of the  intention  of such
Borrower or  Guarantor  to open or  establish  such  account  which notice shall
specify in reasonable detail and specificity  reasonably acceptable to Agent the
name of the  account,  the owner of the  account,  the name and  address  of the
securities intermediary or commodity intermediary at which such account is to be
opened  or  established,  the  individual  at such  intermediary  with whom such
Borrower  or  Guarantor  is  dealing  and the  purpose of the  account,  (B) the
securities  intermediary  or commodity  intermediary  (as the case may be) where
such account is opened or maintained  shall be  reasonably  acceptable to Agent,
and (C) on or before the opening of such investment account,  securities account
or  other  similar   account  with  a  securities   intermediary   or  commodity
intermediary,  such Borrower or Guarantor  shall as Agent may specify either (i)
execute  and  deliver,  and cause to be  executed  and  delivered  to Agent,  an
Investment  Property  Control  Agreement with respect  thereto duly  authorized,
executed  and  delivered  by such  Borrower  or  Guarantor  and such  securities
intermediary  or commodity  intermediary or (ii) arrange for Agent to become the
entitlement  holder  with  respect  to such  investment  property  on terms  and
conditions  acceptable to Agent. The terms of this subsection  (e)(ii) shall not
apply to investment  accounts,  securities  accounts,  commodity accounts or any
other  similar  accounts with a balance of less than $25,000 for any one account
so long as the aggregate balance in all such accounts does not exceed $100,000.

     (f) Borrowers and Guarantors are not the beneficiary or otherwise  entitled
to any right to  payment  under any  letter of credit,  banker's  acceptance  or
similar instrument as of the date hereof, except as set forth in the Information
Certificate. In the event that any Borrower or Guarantor shall be entitled to or
shall  receive  any right to  payment  under  any  letter  of  credit,  banker's
acceptance  or any similar  instrument  with a face value in excess of $250,000,
whether as beneficiary thereof or otherwise after the date hereof, such Borrower
or Guarantor  shall promptly  notify Agent thereof in writing.  Such Borrower or
Guarantor shall immediately,  as Agent may specify, either (i) deliver, or cause
to be  delivered to Agent,  with respect to any such letter of credit,  banker's
acceptance or similar  instrument,  the written  agreement of the issuer and any
other  nominated  person  obligated  to make  any  payment  in  respect  thereof
(including any confirming or negotiating bank), in form and substance reasonably
satisfactory  to Agent,  consenting  to the  assignment  of the  proceeds of the
letter of credit to Agent by such Borrower or Guarantor and agreeing to make all
payments  thereon  directly  to Agent or as Agent may  otherwise  direct or (ii)
cause Agent to become, at Borrowers' expense, the transferee  beneficiary of the
letter of credit,  banker's  acceptance or similar  instrument  (as the case may
be).

     (g) Borrowers and Guarantors do not have any  commercial  tort claims as of
the date  hereof,  except as set forth in the  Information  Certificate.  In the
event that any  Borrower  or  Guarantor  shall at any time after the date hereof
have any commercial  tort claims with a value,  individually or in the aggregate
with all other  commercial tort claims in excess of $250,000 in respect of which
such claim has been filed in a court of law,  such  Borrower or Guarantor  shall
promptly  notify Agent  thereof in writing,  which notice shall (i) set forth in
reasonable  detail  the basis for and nature of such  commercial  tort claim and
(ii)  include the express  grant by such  Borrower  or  Guarantor  to Agent of a
security interest in such commercial tort claim (and the proceeds  thereof).  In
the event that such notice does not include  such grant of a security  interest,
the sending  thereof by such  Borrower or  Guarantor to Agent shall be deemed to
constitute such grant to Agent. Upon the sending of such notice,  any commercial
tort claim described  therein shall  constitute part of the Collateral and shall
be deemed included therein. Without limiting the authorization of Agent provided
in Section 5.2(a) hereof or otherwise  arising by the execution by such Borrower
or Guarantor of this Agreement or any of the other Financing  Agreements,  Agent
is hereby irrevocably  authorized from time to time and at any time to file such
financing  statements  naming  Agent or its  designee as secured  party and such
Borrower or Guarantor as debtor, or any amendments to any financing  statements,
covering  any such  commercial  tort  claim as  Collateral.  In  addition,  each
Borrower and Guarantor shall promptly upon Agent's reasonable  request,  execute
and  deliver,  or cause to be  executed  and  delivered,  to  Agent  such  other
agreements,  documents and  instruments as Agent may require in connection  with
such commercial tort claim.

     (h) Borrowers and  Guarantors do not have any goods,  documents of title or
other  Collateral  in the custody,  control or possession of a third party as of
the date hereof,  except as set forth in the Information  Certificate and except
for goods located in the United States in transit to a location of a Borrower or
Guarantor  permitted  herein in the ordinary course of business of such Borrower
or Guarantor in the possession of the carrier transporting such goods and except
for goods sent for repair in the ordinary course of business.  In the event that
any  goods,  documents  of title or other  Collateral  with a value in excess of
$250,000  (individually  or in the  aggregate)  are at any time  after  the date
hereof in the custody, control or possession of any other person not referred to
in the  Information  Certificate  or such carriers (or absent for repairs in the
ordinary  course of business),  Borrowers and Guarantors  shall promptly  notify
Agent  thereof  in  writing.  Promptly  upon  Agent's  request,   Borrowers  and
Guarantors shall deliver to Agent a Collateral Access Agreement duly authorized,
executed and delivered by such person and the Borrower or Guarantor  that is the
owner of such Collateral.

     (i)  Borrowers  and  Guarantors  shall  take any other  actions  reasonably
requested  by Agent from time to time to cause the  attachment,  perfection  and
first priority of, and the ability of Agent to enforce, the security interest of
Agent  in any and all of the  Collateral,  including,  without  limitation,  (i)
executing,  delivering and, where appropriate,  filing financing  statements and
amendments  relating  thereto  under  the UCC or other  applicable  law,  to the
extent, if any, that any Borrower's or Guarantor's signature thereon is required
therefor,  (ii)  causing  Agent's  name to be  noted  as  secured  party  on any
certificate  of title  for a titled  good if such  notation  is a  condition  to
attachment,  perfection  or  priority  of, or ability of Agent to  enforce,  the
security  interest  of  Agent  in such  Collateral,  (iii)  complying  with  any
provision of any statute,  regulation  or treaty of the United  States as to any
Collateral  if  compliance  with such  provision is a condition  to  attachment,
perfection or priority of, or ability of Agent to enforce, the security interest
of Agent in such  Collateral,  (iv)  using  commercially  reasonable  efforts to
obtain the consents and approvals of any Governmental  Authority or third party,
including,  without  limitation,  any consent of any  licensor,  lessor or other
person  obligated on Collateral,  and taking all actions required by any earlier
versions of the UCC or by other law, as applicable in any relevant jurisdiction.

     SECTION 6. COLLECTION AND ADMINISTRATION

     6.1  Borrowers'  Loan  Accounts.  Agent  shall  maintain  one or more  loan
account(s)  on its books in which  shall be recorded  (a) all Loans,  Letters of
Credit and other Obligations and the Collateral,  (b) all payments made by or on
behalf of any Borrower or  Guarantor  and (c) all other  appropriate  debits and
credits as provided in this Agreement,  including fees, charges, costs, expenses
and  interest.  All entries in the loan  account(s)  shall be made in accordance
with Agent's customary practices as in effect from time to time.

     6.2 Statements.  Agent shall render to Administrative Borrower each month a
statement setting forth the balance in the Borrowers' loan account(s) maintained
by Agent for Borrowers  pursuant to the provisions of this Agreement,  including
principal,  interest,  fees,  costs and expenses.  Each such statement  shall be
subject to subsequent  adjustment by Agent but shall,  absent manifest errors or
omissions, be considered correct and deemed accepted by Borrowers and Guarantors
and  conclusively  binding upon  Borrowers and  Guarantors as an account  stated
except to the extent that Agent  receives a written  notice from  Administrative
Borrower of any specific  exceptions of  Administrative  Borrower thereto within
thirty  (30) days after the date such  statement  has been  received  by Parent.
Until  such time as Agent  shall  have  rendered  to  Administrative  Borrower a
written  statement  as  provided  above,  the  balance  in any  Borrower's  loan
account(s)  shall be presumptive  evidence of the amounts due and owing to Agent
and Lenders by Borrowers and Guarantors.

     6.3 Collection of Accounts.

     (a)  Borrowers  shall  establish and maintain,  at their  expense,  blocked
accounts or lockboxes  and related  blocked  accounts (in either case,  "Blocked
Accounts"),  as Agent may specify,  with such banks as are  acceptable  to Agent
into which Borrowers shall promptly deposit and direct their respective  account
debtors  to  directly  remit  all  payments  on  Receivables  and  all  payments
constituting  proceeds of Inventory or other Collateral in the identical form in
which such payments are made, whether by cash, check or other manner.  Borrowers
shall  deliver,  or cause to be  delivered  to Agent a Deposit  Account  Control
Agreement duly  authorized,  executed and delivered by each bank where a Blocked
Account is  maintained as provided in Section 5.2 hereof or at any time and from
time to time Agent may become the  bank's  customer  with  respect to any of the
Blocked Accounts and promptly upon Agent's request,  Borrowers shall execute and
deliver  such  agreements  and  documents  as Agent may  require  in  connection
therewith.  Each  Borrower and  Guarantor  agrees that all payments made to such
Blocked  Accounts or other funds  received and collected by Agent or any Lender,
whether  in  respect of the  Receivables,  as  proceeds  of  Inventory  or other
Collateral  or  otherwise  shall be treated as  payments to Agent and Lenders in
respect of the Obligations and therefore shall  constitute the property of Agent
and Lenders to the extent of the then outstanding Obligations.

     (b) For purposes of calculating  the amount of the Loans  available to each
Borrower,  such payments will be applied  (conditional upon final collection) to
the Obligations on the Business Day of receipt by Agent of immediately available
funds in the Agent Payment Account provided such payments and notice thereof are
received in accordance  with Agent's usual and customary  practices as in effect
from time to time and within  sufficient  time to credit  such  Borrower's  loan
account on such day, and if not, then on the next Business Day. For the purposes
of  calculating  interest  on the  Obligations,  such  payments  or other  funds
received will be applied  (conditional upon final collection) to the Obligations
one (1)  Business Day  following  the date of receipt of  immediately  available
funds by Agent in the Agent  Payment  Account  provided  such  payments or other
funds and notice  thereof are  received in  accordance  with  Agent's  usual and
customary practices as in effect from time to time and within sufficient time to
credit such  Borrower's  loan account on such day, and if not,  then on the next
Business  Day.  In the event  that at any time or from time to time there are no
Revolving Loans outstanding, Agent shall be entitled to an administrative fee in
an amount  calculated  based on the Interest Rate for Prime Rate Loans (on a per
annum  basis)  multiplied  by the amount of the funds  received  in the  Blocked
Account for such day as  calculated  by Agent in  accordance  with its customary
practice. The economic benefit of the timing in the application of payments (and
the administrative  charge with respect thereto, if applicable) shall be for the
sole benefit of Agent.

     (c) Each Borrower and Guarantor and their respective employees,  agents and
Subsidiaries  shall,  acting as trustee for Agent,  receive,  as the property of
Agent, any monies, checks, notes, drafts or any other payment relating to and/or
proceeds of Accounts or other  Collateral  which come into their  possession  or
under their control and immediately upon receipt thereof, shall deposit or cause
the same to be deposited in the Blocked Accounts, or remit the same or cause the
same to be remitted, in kind, to Agent. In no event shall the same be commingled
with any Borrower's or Guarantor's own funds. Borrowers agree to reimburse Agent
on  demand  for  any  amounts  owed  or paid  to any  bank  or  other  financial
institution  at  which  a  Blocked  Account  or any  other  deposit  account  or
investment  account is established or any other bank,  financial  institution or
other person  involved in the transfer of funds to or from the Blocked  Accounts
arising out of Agent's payments to or  indemnification  of such bank,  financial
institution or other person. The obligations of Borrowers to reimburse Agent for
such amounts  pursuant to this Section 6.3 shall survive the termination of this
Agreement.

     6.4 Payments.

     (a) All  Obligations  shall be  payable  to the Agent  Payment  Account  as
provided in Section 6.3 or such other place as Agent may designate  from time to
time.  Subject to the other terms and conditions  contained herein,  Agent shall
apply  payments  received or collected from any Borrower or Guarantor or for the
account of any  Borrower  or  Guarantor  (including  the  monetary  proceeds  of
collections or of realization upon any Collateral) as follows: first, to pay any
fees,  indemnities or expense  reimbursements then due to Agent and Lenders from
any Borrower or Guarantor;  second,  to pay interest due in respect of any Loans
(and  including  any Special  Agent  Advances) or Letter of Credit  Obligations;
third, to pay or prepay principal in respect of Special Agent Advances;  fourth,
to pay  principal  due in  respect  of the  Loans in such  order as Agent  shall
determine  unless otherwise  expressly  provided in this Agreement and to pay or
prepay  Obligations  arising  under or  pursuant  to any  Hedge  Agreement  of a
Borrower  with  Agent,  any  Lender,  any  Affiliate  of any Lender or any other
financial  institution  or  acceptable  to Agent  (up to the  amount of any then
effective  Reserve  established in respect of such  Obligations),  on a pro rata
basis (as between the Loans and Obligations under any Hedge  Agreement);  fifth,
to pay or prepay any other  Obligations  whether or not then due,  in such order
and manner as Agent determines and at any time an Event of Default exists or has
occurred and is continuing,  to provide cash collateral for any Letter of Credit
Obligations;  and  sixth,  to pay or prepay  any  Obligations  arising  under or
pursuant to Hedge Agreements  (other than to the extent provided for above) on a
pro rata basis.  Notwithstanding  anything  to the  contrary  contained  in this
Agreement,  (i)  unless so  directed  by  Administrative  Borrower,  or unless a
Default or an Event of Default shall exist or have  occurred and be  continuing,
Agent shall not apply any  payments  which it receives  to any  Eurodollar  Rate
Loans,  except (A) on the expiration date of the Interest  Period  applicable to
any such Eurodollar Rate Loans or (B) in the event that there are no outstanding
Prime Rate Loans and (ii) to the extent any  Borrower  uses any  proceeds of the
Loans or Letters of Credit to acquire  rights in or the use of any Collateral or
to  repay  any  Indebtedness  used  to  acquire  rights  in or  the  use  of any
Collateral, payments in respect of the Obligations shall be deemed applied first
to the  Obligations  arising from Loans and Letters of Credit that were not used
for such purposes and second to the  Obligations  arising from Loans and Letters
of Credit the proceeds of which were used to acquire rights in or the use of any
Collateral  in the  chronological  order in which such  Borrower  acquired  such
rights in or the use of such Collateral.

     (b) At Agent's option, all principal,  interest,  fees, costs, expenses and
other charges  provided for in this Agreement or the other Financing  Agreements
may be charged  directly to the loan  account(s)  of any Borrower  maintained by
Agent. If after receipt of any payment of, or proceeds of Collateral  applied to
the  payment  of, any of the  Obligations,  Agent or any Lender is  required  to
surrender or return such payment or proceeds to any Person for any reason,  then
the  Obligations  intended to be satisfied by such payment or proceeds  shall be
reinstated  and continue  and this  Agreement  shall  continue in full force and
effect as if such  payment or  proceeds  had not been  received by Agent or such
Lender.  Borrowers and Guarantors shall be liable to pay to Agent, and do hereby
indemnify and hold Agent and Lenders  harmless for the amount of any payments or
proceeds  surrendered or returned.  This Section  6.4(b) shall remain  effective
notwithstanding any contrary action which may be taken by Agent or any Lender in
reliance  upon such  payment or  proceeds.  This  Section 6.4 shall  survive the
payment of the Obligations and the termination of this Agreement.

     6.5 Taxes.

     (a) Any and all payments by or on account of any of the  Obligations  shall
be made free and clear of and without deduction or withholding for or on account
of, any setoff,  counterclaim,  defense,  duties, taxes, levies,  imposts, fees,
deductions,  charges, withholdings,  liabilities,  restrictions or conditions of
any kind,  excluding (i) in the case of each Lender and Agent (A) taxes measured
by its net income,  and  franchise  taxes imposed on it, by the United States or
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender  or Agent (as the case may be) is  organized  and (B) any  United  States
withholding   taxes  payable  with  respect  to  payments  under  the  Financing
Agreements under laws (including any statute, treaty or regulation) in effect on
the date  hereof (or,  in the case of an  Eligible  Transferee,  the date of the
Assignment and  Acceptance)  applicable to such Lender or Agent, as the case may
be, but not excluding any United States withholding taxes payable as a result of
any  change in such laws  occurring  after the date  hereof (or the date of such
Assignment and Acceptance)  and (ii) in the case of each Lender,  taxes measured
by its net income, and franchise taxes imposed on it as a result of a present or
former  connection  between such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any taxing authority thereof or therein (all such
non-excluded taxes, levies, imposts, fees, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes").

     (b) If any Taxes shall be required by law to be deducted from or in respect
of any sum payable in respect of the  Obligations to any Lender or Agent (i) the
sum payable  shall be  increased  as may be  necessary  so that after making all
required deductions  (including deductions applicable to additional sums payable
under this Section  6.5),  such Lender or Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the relevant  Borrower or Guarantor shall make such  deductions,  (iii) the
relevant  Borrower  or  Guarantor  shall  pay the full  amount  deducted  to the
relevant  taxing  authority or other authority in accordance with applicable law
and (iv) the relevant  Borrower or Guarantor  shall deliver to Agent evidence of
such payment.

     (c) In addition,  each Borrower and Guarantor  agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political  subdivision  thereof or
any applicable foreign  jurisdiction,  and all liabilities with respect thereto,
in each case arising  from any payment made  hereunder or under any of the other
Financing  Agreements or from the  execution,  delivery or  registration  of, or
otherwise  with  respect  to,  this  Agreement  or any of  the  other  Financing
Agreements (collectively, "Other Taxes").

     (d) Each Borrower and Guarantor  shall  indemnify each Lender and Agent for
the full  amount of Taxes and Other Taxes  (including  any Taxes and Other Taxes
imposed by any  jurisdiction  on amounts payable under this Section 6.5) paid by
such  Lender  or Agent  (as the case may be) and any  liability  (including  for
penalties,  interest and expenses)  arising  therefrom or with respect  thereto,
whether or not such Taxes or Other  Taxes were  correctly  or legally  asserted.
This  indemnification  shall be made within  thirty (30) days from the date such
Lender or Agent (as the case may be) makes written demand (including  reasonably
detailed calculations)  therefor. A certificate as to the amount of such payment
or liability  delivered to  Administrative  Borrower by a Lender (with a copy to
Agent)  or by  Agent  on its own  behalf  or on  behalf  of a  Lender,  shall be
conclusive absent manifest error.

     (e) As soon as practicable after any payment of Taxes or Other Taxes by any
Borrower or Guarantor, such Borrower or Guarantor shall furnish to Agent, at its
address  referred  to herein,  the  original  or a  certified  copy of a receipt
evidencing payment thereof or other evidence of such payment.

     (f)  Without  prejudice  to the  survival  of any other  agreements  of any
Borrower or Guarantor hereunder or under any of the other Financing  Agreements,
the agreements and  obligations of such Borrower or Guarantor  contained in this
Section 6.5 shall survive the  termination  of this Agreement and the payment in
full of the Obligations.

     (g) Any Foreign  Lender that is entitled to an exemption  from or reduction
of  withholding  tax under the law of the  jurisdiction  in which the applicable
Borrower is resident for tax purposes,  or any treaty to which such jurisdiction
is a party,  with  respect  to  payments  hereunder  or under  any of the  other
Financing  Agreements shall deliver to  Administrative  Borrower (with a copy to
Agent),  at the  time  or  times  prescribed  by  applicable  law or  reasonably
requested  by  Administrative  Borrower or Agent (in such number of copies as is
reasonably requested by the recipient), whichever of the following is applicable
(but  only if such  Foreign  Lender  is  legally  entitled  to do so):  (i) duly
completed  copies of Internal  Revenue  Service Form W-8BEN  claiming  exemption
from,  or a reduction  to,  withholding  tax under an income tax treaty,  or any
successor  form,  (ii) duly completed  copies of Internal  Revenue  Service Form
8-8ECI  claiming  exemption from  withholding  because the income is effectively
connection  with a U.S.  trade or business or any successor  form,  (iii) in the
case of a Foreign  Lender  claiming the benefits of the  exemption for portfolio
interest under  Sections  871(h) or 881(c) of the Code, (A) a certificate of the
Lender to the effect  that such  Lender is not a "bank"  within  the  meaning of
Section  881(c)(3)(A)  of the Code,  a "10  percent  shareholder"  of a Borrower
within the meaning of Section  881(c)(3)(B) of the Code or a "controlled foreign
corporation"  described  and  Section  881(c)(3)(C)  of the  Code  and (B)  duly
completed copies of Internal Revenue Service Form W-8BEN claiming exemption from
withholding under the portfolio interest exemption or any successor form or (iv)
any other applicable form,  certificate or document prescribed by applicable law
as a  basis  for  claiming  exemption  from  or a  reduction  in  United  States
withholding tax duly completed together with such supplementary documentation as
may be  prescribed  by  applicable  law to permit a Borrower  to  determine  the
withholding or deduction required to be made. Unless Administrative Borrower and
Agent have received forms or other  documents  satisfactory  to them  indicating
that payments hereunder or under any of the other Financing Agreements to or for
a Foreign Lender are not subject to United States withholding tax or are subject
to such tax at a rate reduced by an  applicable  tax treaty,  Borrowers or Agent
shall withhold amounts required to be withheld by applicable requirements of law
from such payments at the applicable statutory rate.

     (h) Any Lender  claiming any additional  amounts  payable  pursuant to this
Section  6.5 shall use its  reasonable  efforts  (consistent  with its  internal
policy and legal and regulatory  restrictions) to change the jurisdiction of its
applicable  lending  office if the making of such a change  would avoid the need
for, or reduce the amount of, any such additional  amounts that would be payable
or may  thereafter  accrue  and would  not,  in the sole  determination  of such
Lender, be otherwise disadvantageous to such Lender.

     6.6  Authorization to Make Loans.  Agent and Lenders are authorized to make
the Loans  based upon  telephonic  or other  instructions  received  from anyone
purporting to be an officer of Administrative  Borrower or any Borrower or other
authorized person or, at the discretion of Agent, if such Loans are necessary to
satisfy any  Obligations.  All requests for Loans or Letters of Credit hereunder
shall specify the date on which the  requested  advance is to be made (which day
shall be a Business Day) and the amount of the requested Loan. Requests received
after 11:00 a.m. Chicago time on any day shall be deemed to have been made as of
the opening of business on the immediately following Business Day. All Loans and
Letters of Credit under this Agreement  shall be  conclusively  presumed to have
been made to, and at the  request of and for the  benefit  of, any  Borrower  or
Guarantor when deposited to the credit of any Borrower or Guarantor or otherwise
disbursed or established in accordance with the  instructions of any Borrower or
Guarantor or in accordance with the terms and conditions of this Agreement.

     6.7 Use of Proceeds.  Borrowers shall use the initial proceeds of the Loans
and Letters of Credit  hereunder  only for:  (a) payments to each of the persons
listed in the  disbursement  direction letter furnished by Borrowers to Agent on
or about the date hereof to consummate  the Plan of  Reorganization,  (b) costs,
expenses and fees in connection with the preparation, negotiation, execution and
delivery  of this  Agreement,  the other  Financing  Agreements  and the Plan of
Reorganization,  (c) other payments in accordance  with the terms of the Plan of
Reorganization  and (d) general  operating,  working  capital  and other  proper
corporate purposes not otherwise prohibited by the terms of this Agreement.  All
other  Loans  made or Letters of Credit  provided  to or for the  benefit of any
Borrower  pursuant to the provisions  hereof shall be used by such Borrower only
for general  operating,  working capital and other proper corporate  purposes of
such Borrower not otherwise prohibited by the terms hereof. None of the proceeds
will be used, directly or indirectly,  for the purpose of purchasing or carrying
any margin security or for the purposes of reducing or retiring any indebtedness
which was  originally  incurred to purchase or carry any margin  security or for
any other purpose which could  reasonably be likely to cause any of the Loans to
be considered a "purpose credit" within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System, as amended.

     6.8 Appointment of  Administrative  Borrower as Agent for Requesting  Loans
and Receipts of Loans and Statements.

     (a)   Each   Borrower   hereby   irrevocably   appoints   and   constitutes
Administrative Borrower as its agent and attorney-in-fact to request and receive
Loans and Letters of Credit  pursuant to this Agreement and the other  Financing
Agreements  from Agent or any Lender in the name or on behalf of such  Borrower.
Agent and Lenders may disburse the Loans to such bank account of  Administrative
Borrower or a Borrower or  otherwise  make such Loans to a Borrower  and provide
such Letters of Credit to a Borrower as Administrative Borrower may designate or
direct,  without  notice to any other  Borrower  or  Guarantor.  Notwithstanding
anything to the contrary  contained herein,  Agent may at any time and from time
to time  require  that Loans to or for the account of any  Borrower be disbursed
directly to an operating account of such Borrower.

     (b) Administrative  Borrower hereby accepts the appointment by Borrowers to
act as the agent and attorney-in-fact of Borrowers pursuant to this Section 6.8.
Administrative  Borrower shall ensure that the disbursement of any Loans to each
Borrower  requested by or paid to or for the account of Parent,  or the issuance
of any Letter of Credit for a  Borrower  hereunder,  shall be paid to or for the
account of such Borrower.

     (c) Each  Borrower  and other  Guarantor  hereby  irrevocably  appoints and
constitutes  Administrative  Borrower  as its  agent to  receive  statements  on
account  and all other  notices  from  Agent and  Lenders  with  respect  to the
Obligations  or otherwise  under or in  connection  with this  Agreement and the
other Financing Agreements.

     (d)  Any  notice,   election,   representation,   warranty,   agreement  or
undertaking  by or  on  behalf  of  any  other  Borrower  or  any  Guarantor  by
Administrative  Borrower  shall be deemed for all  purposes to have been made by
such  Borrower or  Guarantor,  as the case may be, and shall be binding upon and
enforceable  against  such  Borrower or  Guarantor to the same extent as if made
directly by such Borrower or Guarantor.

     (e) No purported termination of the appointment of Administrative  Borrower
as agent as  aforesaid  shall be  effective,  except  after ten (10) days' prior
written notice to Agent.

     6.9 Pro Rata  Treatment.  Except to the extent  otherwise  provided in this
Agreement or as otherwise  agreed by Lenders:  (a) the making and  conversion of
Loans shall be made among the Lenders based on their  respective Pro Rata Shares
as to the Loans and (b) each payment on account of any Obligations to or for the
account  of one or  more of  Lenders  in  respect  of any  Obligations  due on a
particular  day shall be allocated  among the Lenders  entitled to such payments
based on their respective Pro Rata Shares and shall be distributed accordingly.

     6.10 Sharing of Payments, Etc.

     (a) Each  Borrower and  Guarantor  agrees that, in addition to (and without
limitation of) any right of setoff,  banker's lien or counterclaim  Agent or any
Lender may  otherwise  have,  each Lender shall be entitled,  at its option (but
subject,  as among  Agent and  Lenders,  to the  provisions  of Section  12.3(b)
hereof),  to offset  balances  held by it for the  account of such  Borrower  or
Guarantor at any of its offices,  in dollars or in any other  currency,  against
any  principal  of or  interest  on any Loans  owed to such  Lender or any other
amount payable to such Lender  hereunder,  that is not paid when due (regardless
of whether such balances are then due to such Borrower or  Guarantor),  in which
case it  shall  promptly  notify  Administrative  Borrower  and  Agent  thereof;
provided,  that, such Lender's  failure to give such notice shall not affect the
validity thereof.

     (b) If any Lender  (including  Agent)  shall  obtain  from any  Borrower or
Guarantor  payment of any  principal  of or  interest on any Loan owing to it or
payment of any other amount under this  Agreement or any of the other  Financing
Agreements  through  the  exercise  of any  right of  setoff,  banker's  lien or
counterclaim  or similar  right or otherwise  (other than from Agent as provided
herein),  and, as a result of such payment, such Lender shall have received more
than its Pro Rata Share of the  principal of the Loans or more than its share of
such other amounts then due hereunder or thereunder by any Borrower or Guarantor
to such Lender than the  percentage  thereof  received by any other  Lender,  it
shall  promptly  pay to Agent,  for the benefit of  Lenders,  the amount of such
excess and  simultaneously  purchase from such other Lenders a participation  in
the Loans or such other amounts,  respectively,  owing to such other Lenders (or
such interest due thereon,  as the case may be) in such  amounts,  and make such
other  adjustments from time to time as shall be equitable,  to the end that all
Lenders shall share the benefit of such excess payment (net of any expenses that
may be incurred by such Lender in obtaining or preserving  such excess  payment)
in accordance  with their  respective Pro Rata Shares or as otherwise  agreed by
Lenders.  To such end all  Lenders  shall  make  appropriate  adjustments  among
themselves (by the resale of participation sold or otherwise) if such payment is
rescinded or must otherwise be restored.

     (c) Each  Borrower  and  Guarantor  agrees  that any  Lender  purchasing  a
participation (or direct interest) as provided in this Section may exercise,  in
a manner  consistent  with this Section,  all rights of setoff,  banker's  lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct  holder of Loans or other amounts (as the case may be)
owing to such Lender in the amount of such participation.

     (d) Nothing contained herein shall require any Lender to exercise any right
of setoff,  banker's lien,  counterclaims  or similar rights or shall affect the
right of any Lender to exercise, and retain the benefits of exercising, any such
right with respect to any other  Indebtedness  or  obligation of any Borrower or
Guarantor. If, under any applicable bankruptcy, insolvency or other similar law,
any Lender  receives a secured  claim in lieu of a setoff to which this  Section
applies,  such Lender shall,  to the extent  practicable,  assign such rights to
Agent for the  benefit of Lenders  and,  in any  event,  exercise  its rights in
respect of such secured claim in a manner  consistent with the rights of Lenders
entitled  under this  Section to share in the  benefits of any  recovery on such
secured claim.

     6.11 Settlement Procedures.

     (a) In order to administer the Credit  Facility in an efficient  manner and
to minimize the transfer of funds between  Agent and Lenders,  Agent may, at its
option,  subject  to the terms of this  Section,  make  available,  on behalf of
Lenders,  the full amount of the Loans  requested  or charged to any  Borrower's
loan  account(s)  or otherwise  to be advanced by Lenders  pursuant to the terms
hereof, without requirement of prior notice to Lenders of the proposed Loans.

     (b) With  respect  to all  Loans  made by Agent on  behalf  of  Lenders  as
provided  in this  Section,  the amount of each  Lender's  Pro Rata Share of the
outstanding  Loans shall be  computed  weekly,  and shall be adjusted  upward or
downward  on the basis of the  amount of the  outstanding  Loans as of 5:00 p.m.
Chicago  time  on the  Business  Day  immediately  preceding  the  date  of each
settlement computation;  provided, that, Agent retains the absolute right at any
time or from time to time to make the above  described  adjustments at intervals
more  frequent than weekly,  but in no event more than twice in any week.  Agent
shall  deliver to each of the  Lenders  after the end of each  week,  or at such
lesser period or periods as Agent shall  determine,  a summary  statement of the
amount of  outstanding  Loans for such  period  (such  week or lesser  period or
periods being hereinafter referred to as a "Settlement  Period"). If the summary
statement is sent by Agent and received by a Lender prior to 12:00 p.m.  Chicago
time,  then such Lender  shall make the  settlement  transfer  described in this
Section by no later than 3:00 p.m.  Chicago time on the same Business Day and if
received by a Lender after 12:00 p.m.  Chicago time, then such Lender shall make
the  settlement  transfer by not later than 3:00 p.m.  Chicago  time on the next
Business Day following the date of receipt.  If, as of the end of any Settlement
Period, the amount of a Lender's Pro Rata Share of the outstanding Loans is more
than such Lender's Pro Rata Share of the outstanding  Loans as of the end of the
previous  Settlement  Period,  then such Lender shall forthwith (but in no event
later than the time set forth in the  preceding  sentence)  transfer to Agent by
wire  transfer  in  immediately  available  funds the  amount  of the  increase.
Alternatively,  if the  amount of a Lender's  Pro Rata Share of the  outstanding
Loans in any Settlement Period is less than the amount of such Lender's Pro Rata
Share of the outstanding Loans for the previous  Settlement Period,  Agent shall
forthwith  transfer to such Lender by wire  transfer  in  immediately  available
funds the  amount of the  decrease.  The  obligation  of each of the  Lenders to
transfer  such  funds  and  effect  such  settlement  shall be  irrevocable  and
unconditional  and without  recourse  to or  warranty  by Agent.  Agent and each
Lender agrees to mark its books and records at the end of each Settlement Period
to show at all times the dollar amount of its Pro Rata Share of the  outstanding
Loans and  Letters of Credit.  Each  Lender  shall only be  entitled  to receive
interest  on its Pro Rata Share of the Loans to the extent  such Loans have been
funded by such  Lender.  Because the Agent on behalf of Lenders may be advancing
and/or may be repaid Loans prior to the time when Lenders will actually  advance
and/or be repaid such Loans,  interest  with respect to Loans shall be allocated
by Agent in accordance with the amount of Loans actually  advanced by and repaid
to each Lender and the Agent and shall accrue from and  including  the date such
Loans are so advanced to but  excluding the date such Loans are either repaid by
Borrowers or actually  settled with the  applicable  Lender as described in this
Section.

     (c) To the extent that Agent has made any such  amounts  available  and the
settlement  described  above shall not yet have occurred,  upon repayment of any
Loans by a Borrower, Agent may apply such amounts repaid directly to any amounts
made  available  by Agent  pursuant to this  Section.  In lieu of weekly or more
frequent settlements,  Agent may, at its option, at any time require each Lender
to provide Agent with  immediately  available  funds  representing  its Pro Rata
Share of each Loan, prior to Agent's  disbursement of such Loan to Borrower.  In
such  event,  all  Loans  under  this  Agreement  shall  be made by the  Lenders
simultaneously and  proportionately to their Pro Rata Shares. No Lender shall be
responsible for any default by any other Lender in the other Lender's obligation
to make a Loan  requested  hereunder  nor shall the  Commitment of any Lender be
increased  or  decreased  as a result of the default by any other  Lender in the
other Lender's obligation to make a Loan hereunder.

     (d)  If  Agent  is  not  funding  a  particular  Loan  to  a  Borrower  (or
Administrative  Borrower for the benefit of such Borrower)  pursuant to Sections
6.11(a) and 6.11(b)  above on any day, but is  requiring  each Lender to provide
Agent with  immediately  available funds on the date of such Loan as provided in
Section 6.11(c) above,  Agent may assume that each Lender will make available to
Agent such  Lender's Pro Rata Share of the Loan  requested or otherwise  made on
such day and Agent may, in its discretion,  but shall not be obligated to, cause
a  corresponding  amount  to be made  available  to or for the  benefit  of such
Borrower on such day. If Agent makes such  corresponding  amount  available to a
Borrower and such corresponding amount is not in fact made available to Agent by
such  Lender,  Agent shall be entitled to recover such  corresponding  amount on
demand from such Lender  together  with  interest  thereon for each day from the
date such  payment  was due  until the date such  amount is paid to Agent at the
Federal  Funds Rate for each day during such period (as published by the Federal
Reserve  Bank of New York or at  Agent's  option  based on the  arithmetic  mean
determined by Agent of the rates for the last  transaction in overnight  Federal
funds  arranged  prior to 9:00 a.m.  (New York City time) on that day by each of
the  three  leading  brokers  of  Federal  funds  transactions  in New York City
selected by Agent) and if such  amounts  are not paid  within  three (3) days of
Agent's demand,  at the highest Interest Rate provided for in Section 3.1 hereof
applicable  to Prime Rate Loans.  During the period in which such Lender has not
paid  such  corresponding  amount  to  Agent,  notwithstanding  anything  to the
contrary  contained in this Agreement or any of the other Financing  Agreements,
the amount so advanced by Agent to or for the benefit of any Borrower shall, for
all purposes hereof, be a Loan made by Agent for its own account.  Upon any such
failure  by a Lender  to pay  Agent,  Agent  shall  promptly  thereafter  notify
Administrative   Borrower  of  such  failure  and   Borrowers   shall  pay  such
corresponding  amount to Agent for its own account within five (5) Business Days
of Administrative  Borrower's  receipt of such notice. A Lender who fails to pay
Agent  its Pro Rata  Share of any  Loans  made  available  by the  Agent on such
Lender's behalf,  or any Lender who fails to pay any other amount owing by it to
Agent, is a "Defaulting  Lender".  Agent shall not be obligated to transfer to a
Defaulting  Lender any payments  received by Agent for the  Defaulting  Lender's
benefit,  nor  shall a  Defaulting  Lender be  entitled  to the  sharing  of any
payments hereunder (including any principal,  interest or fees). Amounts payable
to a Defaulting Lender shall instead be paid to or retained by Agent.  Agent may
hold  and,  in its  discretion,  relend  to a  Borrower  the  amount of all such
payments  received or retained by it for the account of such Defaulting  Lender.
For purposes of voting or consenting  to matters with respect to this  Agreement
and the  other  Financing  Agreements  and  determining  Pro Rata  Shares,  such
Defaulting  Lender  shall be  deemed  not to be a  "Lender"  and  such  Lender's
Commitment  shall be deemed to be zero (0). This Section shall remain  effective
with respect to a Defaulting  Lender until such default is cured.  The operation
of this  Section  shall not be  construed  to increase or  otherwise  affect the
Commitment of any Lender,  or relieve or excuse the  performance by any Borrower
or Guarantor of their duties and obligations hereunder.

     (e) Nothing in this  Section or  elsewhere  in this  Agreement or the other
Financing Agreements shall be deemed to require Agent to advance funds on behalf
of any  Lender or to relieve  any  Lender  from its  obligation  to fulfill  its
Commitment  hereunder  or to  prejudice  any rights that any  Borrower  may have
against  any  Lender as a result  of any  default  by any  Lender  hereunder  in
fulfilling its Commitment.

     6.12  Obligations  Several;  Independent  Nature of  Lenders'  Rights.  The
obligation  of  each  Lender  hereunder  is  several,  and no  Lender  shall  be
responsible  for the  obligation or  commitment  of any other Lender  hereunder.
Nothing contained in this Agreement or any of the other Financing Agreements and
no action  taken by the Lenders  pursuant  hereto or thereto  shall be deemed to
constitute the Lenders to be a partnership,  an association,  a joint venture or
any other kind of entity.  The  amounts  payable at any time  hereunder  to each
Lender shall be a separate  and  independent  debt,  and subject to Section 12.3
hereof,  each Lender shall be entitled to protect and enforce its rights arising
out of this  Agreement  and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.

     SECTION 7. COLLATERAL REPORTING AND COVENANTS

     7.1 Collateral Reporting.

     (a) Borrowers  shall  provide Agent with the following  documents in a form
reasonably satisfactory to Agent:

     (i) on a regular  basis as  required  by Agent,  schedules  of sales  made,
credits issued and cash received;

     (ii) as soon as  possible  after  the end of each  month  (but in any event
within fifteen (15) Business Days after the end thereof),  on a monthly basis or
more  frequently  as Agent  may  reasonably  request,  (A)  perpetual  inventory
reports,  (B)  inventory  reports by location and category  (and  including  the
amounts  of  Inventory  and the value  thereof at any  leased  locations  and at
premises  of  warehouses,  processors  or other  third  parties),  (C) agings of
accounts  receivable  (together with a  reconciliation  to the previous  month's
aging and  general  ledger) and (D) agings of accounts  payable  (and  including
information  indicating  the  amounts  owing to  owners  and  lessors  of leased
premises,  warehouses,  processors  and other third parties from time to time in
possession of any Collateral);

     (iii) upon Agent's reasonable request,  (A) copies of customer  statements,
purchase orders, sales invoices,  credit memos,  remittance advices and reports,
and copies of deposit  slips and bank  statements,  (B) copies of  shipping  and
delivery  documents,  and (C) copies of purchase  orders,  invoices and delivery
documents for Inventory and Equipment acquired by any Borrower or Guarantor; and

     (iv) such other  reports as to the  Collateral  as Agent  shall  reasonably
request from time to time.

     (b) If any Borrower's or  Guarantor's  records or reports of the Collateral
are prepared or  maintained  by an accounting  service,  contractor,  shipper or
other agent,  such Borrower and Guarantor  hereby  irrevocably  authorizes  such
service,  contractor,  shipper or agent to deliver such  records,  reports,  and
related  documents to Agent and to follow Agent's  instructions  with respect to
further services at any time that an Event of Default exists or has occurred and
is continuing.

     7.2 Accounts Covenants.

     (a) Borrowers shall notify Agent promptly of: (i) any material delay in any
Borrower's  performance of any of its material obligations to any account debtor
or the assertion of any material claims,  offsets,  defenses or counterclaims by
any account  debtor,  or any  material  disputes  with account  debtors,  or any
settlement,   adjustment  or  compromise  thereof,  (ii)  all  material  adverse
information  known  to any  Borrower  or  Guarantor  relating  to the  financial
condition of any account debtor and (iii) any event or  circumstance  which,  to
the best of any  Borrower's  or  Guarantor's  knowledge,  would  cause  Agent to
consider any then existing Accounts as no longer constituting Eligible Accounts.
No  credit,  discount,  allowance  or  extension  or  agreement  for  any of the
foregoing shall be granted to any account debtor without Agent's consent, except
in the ordinary  course of a Borrower's  or  Guarantor's  business in accordance
with practices and policies previously  disclosed in writing to Agent and except
as set forth in the  schedules  delivered  to Agent  pursuant to Section  7.1(a)
above.  So long as no Event of Default exists or has occurred and is continuing,
Borrowers and Guarantors shall settle,  adjust or compromise any claim,  offset,
counterclaim  or dispute with any account  debtor.  At any time that an Event of
Default  exists or has occurred and is continuing,  Agent shall,  at its option,
have the  exclusive  right to settle,  adjust or compromise  any claim,  offset,
counterclaim or dispute with account debtors or grant any credits,  discounts or
allowances.

     (b) With  respect to each  Account:  (i) the  amounts  shown on any invoice
delivered  to Agent or  schedule  thereof  delivered  to Agent shall be true and
complete,  (ii) no payments  shall be made thereon except  payments  immediately
delivered to Agent  pursuant to the terms of this  Agreement,  (iii) no material
credit,  discount,  allowance or extension or agreement for any of the foregoing
shall be granted to any account debtor except as reported to Agent in accordance
with this Agreement and except for credits, discounts,  allowances or extensions
made or given in the ordinary course of each  Borrower's  business in accordance
with practices and policies  previously  disclosed to Agent, (iv) there shall be
no material setoffs,  deductions,  contras, defenses,  counterclaims or disputes
existing  or  asserted  with  respect  thereto  except as  reported  to Agent in
accordance with the terms of this Agreement, (v) none of the transactions giving
rise thereto will violate any applicable foreign,  Federal,  State or local laws
or regulations,  all documentation  relating thereto will be legally  sufficient
under  such laws and  regulations  and all such  documentation  will be  legally
enforceable in accordance with its terms.

     (c) Agent shall have the right at any time or times,  in Agent's name or in
the name of a nominee  of Agent,  to verify  the  validity,  amount or any other
matter  relating to any  Receivables or other  Collateral,  by mail,  telephone,
facsimile transmission or otherwise.

     7.3 Inventory Covenants.  With respect to the Inventory:  (a) each Borrower
and  Guarantor  shall  at  all  times  maintain   inventory  records  reasonably
satisfactory  to Agent,  keeping  correct and  accurate  records  itemizing  and
describing the kind, type, quality and quantity of Inventory, such Borrower's or
Guarantor's cost therefor and daily withdrawals therefrom and additions thereto;
(b) Borrowers and Guarantors  shall conduct a physical count of the Inventory at
least  once each year but at any time or times as Agent may  request on or after
an Event of Default, and promptly following such physical inventory shall supply
Agent with a report in the form and with such specificity as may be satisfactory
to Agent  concerning such physical count; (c) Borrowers and Guarantors shall not
remove any Inventory from the locations set forth or permitted  herein,  without
the prior  written  consent  of Agent,  except  for  sales of  Inventory  in the
ordinary  course of its business and except to move Inventory  directly from one
location set forth or permitted  herein to another such  location and except for
Inventory  shipped from the  manufacturer  thereof to such Borrower or Guarantor
which is in transit to the  locations  set forth or permitted  herein;  (d) upon
Agent's request, Borrowers shall, at their expense, no more than one (1) time in
any twelve (12) month  period,  but at any time or times as Agent may request on
or after an Event of Default,  deliver or cause to be delivered to Agent written
appraisals  as to the  Inventory in form,  scope and  methodology  acceptable to
Agent and by an appraiser  acceptable  to Agent,  addressed to Agent and Lenders
and upon which Agent and Lenders are expressly  permitted to rely; (e) Borrowers
and  Guarantors  shall  produce,  use, store and maintain the Inventory with all
reasonable   care  and  caution,   ordinary  wear  and  tear  and  casualty  and
condemnation  excepted  and  in  accordance  with  applicable  standards  of any
insurance and in conformity with applicable laws (including the  requirements of
the  Federal  Fair  Labor  Standards  Act of 1938,  as  amended  and all  rules,
regulations  and orders  related  thereto);  (f) none of the  Inventory or other
Collateral  constitutes farm products or the proceeds thereof; (g) each Borrower
and Guarantor assumes all  responsibility and liability arising from or relating
to the  production,  use,  sale  or  other  disposition  of the  Inventory;  (h)
Borrowers and  Guarantors  shall not sell Inventory to any customer on approval,
or any other basis which  entitles  the  customer to return or may  obligate any
Borrower or Guarantor to repurchase such Inventory; (i) Borrowers and Guarantors
shall keep the Inventory in good and marketable condition; and (j) Borrowers and
Guarantors  shall not,  without  prior  written  notice to Agent or the specific
identification  of such Inventory in a report with respect  thereto  provided by
Administrative  Borrower to Agent pursuant to Section 7.1(a) hereof,  acquire or
accept any Inventory on consignment or approval.

     7.4 Equipment and Real  Property  Covenants.  With respect to the Equipment
and Real Property: (a) upon Agent's request,  Borrowers and Guarantors shall, at
their expense, no more than one (1) time in any twelve (12) month period, but at
any time or times as Agent may request on or after an Event of Default,  deliver
or cause to be delivered to Agent written  appraisals as to the Equipment and/or
the Real Property in form, scope and methodology  reasonably acceptable to Agent
and by an appraiser acceptable to Agent, addressed to Agent and upon which Agent
is expressly  permitted to rely;  (b)  Borrowers and  Guarantors  shall keep the
Equipment in good order, repair, running and marketable condition (ordinary wear
and tear  excepted);  (c) Borrowers and  Guarantors  shall use the Equipment and
Real  Property  with all  reasonable  care and  caution and in  accordance  with
applicable  standards of any  insurance and in  conformity  with all  applicable
laws;  (d) the  Equipment is and shall be used in the business of Borrowers  and
Guarantors  and not for  personal,  family,  household  or farming  use; (e) the
Borrowers and  Guarantors  represent and warrant that the Equipment of Borrowers
and  Guarantors  are located on Real  Property  owned by a Borrower or Guarantor
which is subject to a Mortgage in favor of Agent and  Borrowers  and  Guarantors
shall not  remove  any  Equipment  from  such  locations,  except to the  extent
necessary to have any Equipment repaired or maintained in the ordinary course of
its business or to move Equipment  directly from one owned location subject to a
Mortgage  to another  owned  location  subject to a Mortgage  and except for the
movement  of motor  vehicles  used by or for the  benefit  of such  Borrower  or
Guarantor in the ordinary course of business; (f) the Equipment is now and shall
remain  personal  property and Borrowers and Guarantors  shall not permit any of
the  Equipment  to be or become a part of or affixed to real  property;  and (g)
each Borrower and Guarantor  assumes all  responsibility  and liability  arising
from the use of the Equipment and Real Property.

     7.5 Power of Attorney.  Each  Borrower  and  Guarantor  hereby  irrevocably
designates  and  appoints  Agent (and all persons  designated  by Agent) as such
Borrower's  and  Guarantor's  true and lawful  attorney-in-fact,  and authorizes
Agent, in such  Borrower's,  Guarantor's or Agent's name, to: (a) at any time an
Event  of  Default  has  occurred  and  is  continuing  (i)  demand  payment  on
Receivables or other  Collateral,  (ii) enforce  payment of Receivables by legal
proceedings or otherwise,  (iii) exercise all of such  Borrower's or Guarantor's
rights and remedies to collect any Receivable or other Collateral,  (iv) sell or
assign any Receivable upon such terms, for such amount and at such time or times
as the Agent deems advisable, (v) settle, adjust, compromise, extend or renew an
Account, (vi) discharge and release any Receivable, (vii) prepare, file and sign
such Borrower's or Guarantor's name on any proof of claim in bankruptcy or other
similar  document  against an account  debtor or other obligor in respect of any
Receivables or other  Collateral,  (viii) notify the post office  authorities to
change the address for delivery of  remittances  from  account  debtors or other
obligors in respect of Receivables or other proceeds of Collateral to an address
designated by Agent, and open and dispose of all mail addressed to such Borrower
or Guarantor and handle and store all mail relating to the Collateral;  and (ix)
do all acts and things which are necessary, in Agent's determination, to fulfill
such  Borrower's or Guarantor's  obligations  under this Agreement and the other
Financing  Agreements  and (b) at any time to (i) take  control in any manner of
any item of payment in respect of  Receivables  or  constituting  Collateral  or
otherwise  received  in or for  deposit in the  Blocked  Accounts  or  otherwise
received by Agent or any  Lender,  (ii) have access to any lockbox or postal box
into which  remittances  from  account  debtors or other  obligors in respect of
Receivables or other proceeds of Collateral are sent or received,  (iii) endorse
such  Borrower's  or  Guarantor's  name upon any items of  payment in respect of
Receivables or  constituting  Collateral or otherwise  received by Agent and any
Lender  and  deposit  the  same  in  Agent's  account  for  application  to  the
Obligations,  (iv) endorse such Borrower's or Guarantor's  name upon any chattel
paper, document, instrument,  invoice, or similar document or agreement relating
to any  Receivable  or any goods  pertaining  thereto  or any other  Collateral,
including  any  warehouse  or  other  receipts,  or bills of  lading  and  other
negotiable  or  non-negotiable  documents,  (v) clear  Inventory the purchase of
which was  financed  with a Letter of Credit  through  U.S.  Customs  or foreign
export control  authorities in such Borrower's or Guarantor's name, Agent's name
or the name of Agent's  designee,  and to sign and deliver to customs  officials
powers of attorney in such Borrower's or Guarantor's name for such purpose,  and
to complete in such  Borrower's or Guarantor's or Agent's name, any order,  sale
or  transaction,  obtain the  necessary  documents in  connection  therewith and
collect the proceeds thereof,  and (vi) sign such Borrower's or Guarantor's name
on any verification of Receivables and notices thereof to account debtors or any
secondary  obligors or other  obligors in respect  thereof.  Each  Borrower  and
Guarantor  hereby  releases  Agent and  Lenders and their  respective  officers,
employees and designees from any liabilities  arising from any act or acts under
this power of  attorney  and in  furtherance  thereof,  whether of  omission  or
commission,  except as a result of Agent's or any Lender's own gross  negligence
or wilful misconduct as determined pursuant to a final non-appealable order of a
court of competent jurisdiction.

     7.6 Right to Cure. Agent may, at its option,  upon notice to Administrative
Borrower,  (a) cure any default by any Borrower or Guarantor  under any material
agreement  with a third  party that  affects  the  Collateral,  its value or the
ability of Agent to collect,  sell or otherwise dispose of the Collateral or the
rights  and  remedies  of Agent or any  Lender  therein  or the  ability  of any
Borrower or Guarantor to perform its  obligations  hereunder or under any of the
other  Financing  Agreements,  (b) pay or bond on appeal  any  judgment  entered
against  any  Borrower  or  Guarantor,  (c)  discharge  taxes,  liens,  security
interests or other  encumbrances  at any time levied on or existing with respect
to the Collateral  (except those  permitted by the terms of this  Agreement) and
(d) pay any  amount,  incur any  expense  or perform  any act which,  in Agent's
reasonable judgment, is necessary or appropriate to preserve, protect, insure or
maintain  the  Collateral  and the  rights of Agent  and  Lenders  with  respect
thereto. Agent may add any amounts so expended to the Obligations and charge any
Borrower's  account  therefor,  such  amounts to be  repayable  by  Borrowers on
demand.  Agent and  Lenders  shall be under no  obligation  to effect such cure,
payment or bonding  and shall not,  by doing so, be deemed to have  assumed  any
obligation or liability of any Borrower or Guarantor.  Any payment made or other
action  taken  by  Agent or any  Lender  under  this  Section  shall be  without
prejudice  to any right to assert an Event of Default  hereunder  and to proceed
accordingly.

     7.7 Access to Premises.  From time to time as  requested  by Agent,  at the
cost and expense of  Borrowers,  (a) Agent or its designee  shall have  complete
access to all of each Borrower's and Guarantor's premises during normal business
hours and after notice to  Administrative  Borrower,  or at any time and without
notice to  Administrative  Borrower if an Event of Default has  occurred  and is
continuing,  for  the  purposes  of  inspecting,   verifying  and  auditing  the
Collateral  and  all of each  Borrower's  and  Guarantor's  books  and  records,
including  the Records,  and (b) each  Borrower  and  Guarantor  shall  promptly
furnish to Agent such copies of such books and records or extracts  therefrom as
Agent may  request,  and Agent or any Lender or Agent's  designee may use during
normal  business  hours  such  of  any  Borrower's  and  Guarantor's  personnel,
equipment,  supplies  and  premises  as  may be  reasonably  necessary  for  the
foregoing  and if an Event of Default  exists or has occurred and is  continuing
for the collection of Receivables and realization of other Collateral.

     SECTION 8. REPRESENTATIONS AND WARRANTIES

     Each Borrower and  Guarantor  hereby  represents  and warrants to Agent and
Lenders the  following  (which shall  survive the execution and delivery of this
Agreement):

     8.1 Corporate Existence,  Power and Authority.  Each Borrower and Guarantor
is a  corporation  duly  organized  and in good  standing  under the laws of its
jurisdiction of organization and is duly qualified as a foreign  corporation and
in good  standing  in all  states or other  jurisdictions  where the  nature and
extent of the business  transacted  by it or the  ownership of assets makes such
qualification necessary,  except for those jurisdictions in which the failure to
so qualify would not have a Material Adverse Effect. The execution, delivery and
performance  of  this  Agreement,   the  other  Financing   Agreements  and  the
transactions  contemplated  hereunder  and  thereunder  (a) are all within  each
Borrower's and Guarantor's corporate powers, (b) have been duly authorized,  (c)
are not in  contravention  of law or the terms of any  Borrower's or Guarantor's
certificate of incorporation, by laws, or other organizational documentation, or
any  material  indenture,  agreement  or  undertaking  to which any  Borrower or
Guarantor  is a party or by which any  Borrower or Guarantor or its property are
bound and (d) will not result in the  creation or  imposition  of, or require or
give rise to any obligation to grant,  any lien,  security  interest,  charge or
other  encumbrance  upon any property of any  Borrower or  Guarantor  except for
liens in favor of the Agent.  This Agreement and the other Financing  Agreements
to which any  Borrower  or  Guarantor  is a party  constitute  legal,  valid and
binding  obligations  of such Borrower and Guarantor  enforceable  in accordance
with  their  respective  terms,  except  as  enforceability  may be  limited  by
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting  creditors'  rights generally,  by general equitable  principles or by
principles of good faith and fair dealing  (regardless of whether enforcement is
sought in equity or at law).

     8.2  Name;  State  of  Organization;  Chief  Executive  Office;  Collateral
Locations.

     (a) As of the date  hereof,  the  exact  legal  name of each  Borrower  and
Guarantor is as set forth on the  signature  page of this  Agreement  and in the
Information  Certificate.  As of the date hereof,  no Borrower or Guarantor has,
during the five years prior to the date of this Agreement, been known by or used
any  other  corporate  or  fictitious  name  or been a party  to any  merger  or
consolidation, or acquired all or substantially all of the assets of any Person,
or  acquired  any of its  property  or  assets  out of the  ordinary  course  of
business, except as set forth in the Information Certificate.

     (b) As of the date hereof,  each Borrower and Guarantor is an  organization
of the type and  organized  in the  jurisdiction  set  forth in the  Information
Certificate.  As of the date hereof, the Information Certificate accurately sets
forth the organizational identification number of each Borrower and Guarantor or
accurately  states that such Borrower or Guarantor has none and accurately  sets
forth the federal employer identification number of each Borrower and Guarantor.

     (c) As of the date hereof,  the chief executive  office and mailing address
of each Borrower and  Guarantor  and each  Borrower's  and  Guarantor's  Records
concerning  Accounts  are  located  only at the  address  identified  as such in
Schedule  8.2 to the  Information  Certificate  and its  only  other  places  of
business and the only other  locations of  Collateral  with a value in excess of
$50,000,  if any, are the addresses set forth in Schedule 8.2 to the Information
Certificate, subject to the rights of any Borrower or Guarantor to establish new
locations in  accordance  with Section 9.2 below.  The  Information  Certificate
correctly  identifies any of such locations which are not owned by a Borrower or
Guarantor and sets forth the owners and/or operators thereof.

     8.3  Financial  Statements;  No  Material  Adverse  Change.  All  financial
statements  relating  to any  Borrower  or  Guarantor  which  have  been  or may
hereafter  be  delivered  by any Borrower or Guarantor to Agent and Lenders have
been  prepared  in  accordance  with GAAP  (except as to any  interim  financial
statements,  to the  extent  such  statements  are  subject  to normal  year-end
adjustments  and do not  include any notes) and fairly  present in all  material
respects  the   financial   condition  and  the  results  of  operation  of  the
Administrative  Borrower and its Subsidiaries,  taken as a whole as at the dates
and for the  periods  set forth  therein.  Except as  disclosed  in any  interim
financial statements furnished by Borrowers and Guarantors to Agent prior to the
date of this Agreement,  there has been no act, condition or event which has had
or is reasonably  likely to have a Material Adverse Effect since the date of the
most recent audited financial statements of the Administrative  Borrower and its
Subsidiaries,  taken as a whole  furnished by any Borrower or Guarantor to Agent
prior to the date of this Agreement.  The projections dated May 24, 2005 for the
fiscal years  ending 2005 through 2007 that have been  delivered to Agent or any
projections  of the  Administrative  Borrower and its  Subsidiaries,  taken as a
whole  hereafter  delivered  to Agent  have been  prepared  in light of the past
operations of the businesses and are based upon estimates and  assumptions  made
in good faith and believed by the Administrative  Borrower to be reasonable when
made in light of the then current conditions and current facts.

     8.4 Priority of Liens;  Title to  Properties.  The security  interests  and
liens granted to Agent under this Agreement and the other  Financing  Agreements
constitute  valid and perfected  first priority liens and security  interests in
and upon the Collateral  subject only to the liens  indicated on Schedule 8.4 to
the  Information  Certificate  and the other liens  permitted  under Section 9.8
hereof.  Each Borrower and Guarantor has good and marketable fee simple title to
or valid  leasehold  interests in all of its Real  Property and good,  valid and
marketable title to, valid leasehold  interests in or other rights to use all of
its  other  properties  and  assets  subject  to no liens,  mortgages,  pledges,
security interests, encumbrances or charges of any kind, except those granted to
Agent  and  such  others  as are  specifically  listed  on  Schedule  8.4 to the
Information Certificate or permitted under Section 9.8 hereof.

     8.5 Tax Returns.  Each Borrower and  Guarantor  has filed,  or caused to be
filed, in a timely manner all federal and all other material State,  foreign and
local tax returns,  reports and  declarations  which are required to be filed by
it. All  information in such tax returns,  reports and  declarations is complete
and  accurate in all  material  respects.  EWP has paid or caused to be paid all
material,  and each other  Borrower and  Guarantor has paid or caused to be paid
all material post-petition,  taxes due and payable or claimed due and payable in
any  assessment  received by it,  except  taxes the  validity of which are being
contested  in good  faith by  appropriate  proceedings  diligently  pursued  and
available  to such  Borrower or  Guarantor  and with  respect to which  adequate
reserves have been set aside on its books.  Each  Borrower  (other than EWP) has
paid or  caused  to be paid all  pre-petition  taxes  due and  payable  prior to
February 26, 2004 in  accordance  with the terms of the Plan of  Reorganization.
Adequate  provision  has been made for the  payment  of all  accrued  and unpaid
Federal,  State,  county,  local, foreign and other taxes whether or not yet due
and payable and whether or not disputed.

     8.6  Litigation.  Except as set forth on  Schedule  8.6 to the  Information
Certificate,  (a)  there  is no  investigation  by  any  Governmental  Authority
pending,  or to any  Borrower's  or  Guarantor's  actual  knowledge  threatened,
against or affecting any Borrower or Guarantor,  its or their assets or business
and (b) there is no action, suit,  proceeding or claim by any Person pending, or
to any  Borrower's  or  Guarantor's  actual  knowledge  threatened,  against any
Borrower  or  Guarantor  or its or their  assets,  or against or  affecting  any
transactions  contemplated by this Agreement,  in each case,  which has or could
reasonably be expected to have a Material Adverse Effect.

     8.7 Compliance with Other Agreements and Applicable Laws.

     (a) Borrowers and Guarantors are not in default in any respect under, or in
violation  in any  respect of the terms of, any  material  agreement,  contract,
instrument,  lease or other  commitment to which it is a party or by which it or
any of its assets are bound which default or violation could, individually or in
the  aggregate for all such  defaults or  violations,  reasonably be expected to
have a Material Adverse Effect.  Borrowers and Guarantors are in compliance with
the  requirements of all applicable laws,  rules,  regulations and orders of any
Governmental  Authority  relating  to their  respective  businesses,  including,
without  limitation,   those  set  forth  in  or  promulgated  pursuant  to  the
Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards
Act of 1938,  as  amended,  ERISA,  the  Code,  as  amended,  and the  rules and
regulations  thereunder,  and all Environmental  Laws, except in each case where
any  non-compliance  or violation  could not,  individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     (b)  Borrowers  and  Guarantors   have  obtained  all  permits,   licenses,
approvals, consents, certificates,  orders or authorizations of any Governmental
Authority  required  by  Environmental  Law and for the  lawful  conduct  of its
business  except where the failure to obtain could not,  individually  or in the
aggregate,  reasonably  be  expected  to have a  Material  Adverse  Effect  (the
"Permits").  All of the Permits are valid and  subsisting  and in full force and
effect.  There are no actions,  claims or proceedings  pending or to the best of
any  Borrower's  or  Guarantor's  actual  knowledge,  threatened  that  seek the
revocation, cancellation,  suspension or modification of any of the Permits. 8.8
Environmental Compliance.

     (a) Except as set forth on  Schedule  8.8 to the  Information  Certificate,
Borrowers,  Guarantors  and any Subsidiary of any Borrower or Guarantor have not
generated, used, stored, treated, transported,  manufactured,  handled, produced
or disposed of any Hazardous  Materials,  on or off its premises (whether or not
owned by it) in any  manner  which  at any  time  violates  in any  respect  any
applicable  Environmental  Law or  Permit,  and  the  operations  of  Borrowers,
Guarantors  and any  Subsidiary  of any  Borrower or  Guarantor  complies in all
respects with all Environmental Laws and all Permits,  except in each case where
any  non-compliance  or violation  could not,  individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     (b) Except as set forth on  Schedule  8.8 to the  Information  Certificate,
there has been no investigation by any Governmental Authority or any proceeding,
complaint,  order,  directive,  claim,  citation  or notice by any  Governmental
Authority  or any  other  person  nor is any  pending  or to any  Borrower's  or
Guarantor's actual knowledge threatened, with respect to any non compliance with
or violation of the  requirements  of any  Environmental  Law by any Borrower or
Guarantor and any Subsidiary of any Borrower or Guarantor or the release,  spill
or discharge, threatened or actual, of any Hazardous Material or the generation,
use, storage, treatment,  transportation,  manufacture,  handling, production or
disposal of any Hazardous Materials or any other environmental, health or safety
matter, which in each case could,  individually or in the aggregate,  reasonably
be expected to have a Material Adverse Effect.

     (c) Except as set forth on  Schedule  8.8 to the  Information  Certificate,
Borrowers,  Guarantors  and their  Subsidiaries  have no liability in connection
with a release,  spill or  discharge,  threatened  or actual,  of any  Hazardous
Materials  or  the  generation,   use,   storage,   treatment,   transportation,
manufacture,  handling,  production or disposal of any  Hazardous  Materials (i)
with respect to the Real  Property  owned by EWP and FV Steel to the extent such
liability  exceeds  $750,000 or (ii) with respect to all other Real  Property to
the extent  such  liability  could  reasonably  be  expected  to have a Material
Adverse Effect.

     8.9 Employee Benefits.

     (a)  Each  Plan  is in  compliance  in all  respects  with  the  applicable
provisions  of ERISA,  the Code and other  Federal  or State law  except for any
non-compliance which could not, individually or in the aggregate,  reasonably be
expected  to have a Material  Adverse  Effect.  Each Plan which is  intended  to
qualify under Section 401(a) of the Code has received a favorable  determination
letter from the Internal  Revenue  Service and to any  Borrower's or Guarantor's
actual  knowledge,  nothing  has  occurred  which  would  cause the loss of such
qualification.  Each  Borrower and its ERISA  Affiliates  have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding  waiver or an extension  of any  amortization  period  pursuant to
Section 412 of the Code has been made with respect to any Plan.

     (b)  There are no  pending,  or to any  Borrower's  or  Guarantor's  actual
knowledge, threatened claims, actions or lawsuits, or action by any Governmental
Authority,  with  respect  to  any  Plan  which  could,  individually  or in the
aggregate,  reasonably be expected to have a Material Adverse Effect.  There has
been no  prohibited  transaction  or violation of the  fiduciary  responsibility
rules with respect to any Plan which could,  individually  or in the  aggregate,
reasonably be expected to have a Material Adverse Effect.

     (c) (i) No ERISA  Event has  occurred or is  reasonably  expected to occur;
(ii) based on the latest  valuation of each  Pension  Plan and on the  actuarial
methods and  assumptions  employed for such valuation  (determined in accordance
with the assumptions  used for funding such Pension Plan pursuant to Section 412
of the Code) the aggregate current value of accumulated  benefit  liabilities of
such  Pension  Plan  under  Section  4001(a)(16)  of ERISA  does not  exceed the
aggregate  current value of the assets of such Pension Plan; (iii) each Borrower
and  Guarantor,  and  their  ERISA  Affiliates,  have  not  incurred  and do not
reasonably expect to incur, any material  liability under Title IV of ERISA with
respect to any Plan (other than  premiums due and not  delinquent  under Section
4007 of ERISA);  (iv) each Borrower and Guarantor,  and their ERISA  Affiliates,
have not incurred and do not reasonably expect to incur, any material  liability
(and no event has occurred  which,  with the giving of notice under Section 4219
of ERISA,  would result in such  liability)  under Section 4201 or 4243 of ERISA
with respect to a Multiemployer  Plan; and (v) each Borrower and Guarantor,  and
their ERISA Affiliates,  have not engaged in a transaction that would be subject
to Section 4069 or 4212(c) of ERISA.

     8.10 Bank  Accounts.  As of the date  hereof all of the  deposit  accounts,
investment  accounts or other accounts in the name of or used by any Borrower or
Guarantor maintained at any bank or other financial institution are set forth on
Schedule  8.10 to the  Information  Certificate,  subject  to the  right of each
Borrower and Guarantor to establish new accounts in accordance  with Section 5.2
hereof.

     8.11 Intellectual Property. Each Borrower and Guarantor owns or licenses or
otherwise  has the  right to use all  Intellectual  Property  necessary  for the
operation of its business as presently conducted or proposed to be conducted. As
of the date  hereof,  Borrowers  and  Guarantors  do not  have any  Intellectual
Property registered,  or subject to pending  applications,  in the United States
Patent  and  Trademark  Office or any  similar  office  or agency in the  United
States,  any State thereof,  any political  subdivision  thereof or in any other
country,  other  than  those  described  in  Schedule  8.11  to the  Information
Certificate  and has not granted any licenses with respect thereto other than as
set forth in Schedule 8.11 to the Information Certificate. No event has occurred
which  permits or would  permit  after  notice or  passage of time or both,  the
revocation, suspension or termination of such rights, except in each case, where
any such event  could  not,  individually  or in the  aggregate,  reasonably  be
expected to have a Material  Adverse  Effect.  To any Borrower's and Guarantor's
actual  knowledge,  no slogan or other  advertising  device,  product,  process,
method,  substance or other Intellectual  Property or goods bearing or using any
Intellectual  Property  presently  contemplated to be sold by or employed by any
Borrower or Guarantor infringes any patent, trademark,  servicemark,  tradename,
copyright,  license or other  Intellectual  Property  owned by any other  Person
presently  and no claim or  litigation  is  pending  or  threatened  against  or
affecting any Borrower or Guarantor contesting its right to sell or use any such
Intellectual  Property,  in  each  case  which  could,  individually  or in  the
aggregate,  reasonably be expected to have a Material Adverse Effect.  As of the
date hereof,  Schedule 8.11 to the Information Certificate sets forth all of the
agreements or other  arrangements  of each  Borrower and  Guarantor  pursuant to
which  such  Borrower  or  Guarantor  has a  license  (except  for  commercially
available off-the-shelf software licenses) or other right to use any trademarks,
logos, designs,  representations or other Intellectual Property owned by another
person as in effect on the date hereof and the dates of the  expiration  of such
agreements or other  arrangements  of such Borrower or Guarantor as in effect on
the  date  hereof   (collectively,   together  with  such  agreements  or  other
arrangements  as may be entered into by any Borrower or Guarantor after the date
hereof,  collectively,  the "License  Agreements" and  individually,  a "License
Agreement"). No trademark, servicemark, copyright or other Intellectual Property
at any time used by any Borrower or Guarantor  which is owned by another person,
or owned by such Borrower or Guarantor subject to any security  interest,  lien,
collateral assignment,  pledge or other encumbrance in favor of any person other
than  Agent,  is affixed  to any  Eligible  Inventory,  except (a) to the extent
permitted  under the term of the license  agreements  listed on Schedule 8.11 to
the Information Certificate and (b) to the extent the sale of Inventory to which
such  Intellectual  Property is affixed is permitted to be sold by such Borrower
or Guarantor under  applicable law (including the United States Copyright Act of
1976).

     8.12 Subsidiaries; Affiliates; Capitalization; Solvency.

     (a) As of the date hereof,  each Borrower and  Guarantor  does not have any
direct or indirect  Subsidiaries  or Affiliates  and is not engaged in any joint
venture or partnership  except as set forth in Schedule 8.12 to the  Information
Certificate.

     (b) As of the date hereof,  each  Borrower and  Guarantor is the record and
beneficial owner of all of the issued and outstanding shares of Capital Stock of
each of the Subsidiaries listed on Schedule 8.12 to the Information  Certificate
as  being  owned  by such  Borrower  or  Guarantor  and  there  are no  proxies,
irrevocable or otherwise,  with respect to such shares and no equity  securities
of any of the  Subsidiaries are or may become required to be issued by reason of
any options,  warrants, rights to subscribe to, calls or commitments of any kind
or  nature  and  there  are  no  contracts,   commitments,   understandings   or
arrangements by which any Subsidiary is or may become bound to issue  additional
shares of it Capital Stock or securities  convertible  into or exchangeable  for
such shares, other than those provided by statute.

     (c) As of the date  hereof,  the issued and  outstanding  shares of Capital
Stock of each  Borrower and Guarantor  are directly and  beneficially  owned and
held by the persons indicated in the Information  Certificate,  and in each case
all  of  such  shares  have  been  duly   authorized  and  are  fully  paid  and
non-assessable and are, except with respect to Administrative Borrower, free and
clear of all claims,  liens,  pledges and encumbrances of any kind, except those
in favor of Agent and nonconsensual statutory liens permitted under Section 9.8.

     (d) Each  Borrower  is Solvent and will  continue  to be Solvent  after the
creation  of the  Obligations,  the  security  interests  of Agent and the other
transaction contemplated hereunder.

     8.13 Labor Disputes.

     (a) As of the date hereof,  set forth on Schedule  8.13 to the  Information
Certificate  is a list  (including  dates  of  termination)  of  all  collective
bargaining  or similar  agreements  between or  applicable  to each Borrower and
Guarantor and any union, labor organization or other bargaining agent in respect
of the employees of any Borrower or Guarantor on the date hereof.

     (b) There is (i) no unfair labor  practice  complaint  pending  against any
Borrower or Guarantor or, to any  Borrower's or  Guarantor's  actual  knowledge,
threatened  against  it,  before the  National  Labor  Relations  Board,  and no
grievance  or  arbitration  proceeding  arising  out of or under any  collective
bargaining  agreement  is pending on the date  hereof  against  any  Borrower or
Guarantor or, to any  Borrower's or  Guarantor's  actual  knowledge,  threatened
against it, and (ii) no strike,  labor dispute,  slowdown or stoppage is pending
against any Borrower or Guarantor or, to any  Borrower's or  Guarantor's  actual
knowledge,  threatened  against any  Borrower or  Guarantor,  in each case which
could,  individually  or in the  aggregate,  reasonably  be  expected  to have a
Material Adverse Effect.

     8.14  Restrictions on Subsidiaries.  Except for  restrictions  contained in
this  Agreement  or any other  agreement  with  respect to  Indebtedness  of any
Borrower  or  Guarantor  permitted  hereunder,   there  are  no  contractual  or
consensual  restrictions on any Borrower or Guarantor or any of its Subsidiaries
which  prohibit or  otherwise  restrict (a) the transfer of cash or other assets
(i) between any Borrower or Guarantor  and any of its or their  Subsidiaries  or
(ii) between any Subsidiaries of any Borrower or Guarantor or (b) the ability of
any  Borrower  or  Guarantor  or  any  of its or  their  Subsidiaries  to  incur
Indebtedness  or  grant  security  interests  to  Agent  or  any  Lender  in the
Collateral.

     8.15 Material Contracts.  Schedule 8.15 to the Information Certificate sets
forth all Material Contracts to which any Borrower or Guarantor is a party or is
bound as of the date hereof.  Borrowers  and  Guarantors  have  delivered  true,
correct and complete copies of such Material Contracts to Agent on or before the
date hereof.  Borrowers  and  Guarantors  are not in breach or in default in any
respect of or under any  Material  Contract  and have not received any notice of
the intention of any other party thereto to terminate any Material Contract,  in
each case which could, individually or in the aggregate,  reasonably be expected
to have a Material Adverse Effect.

8.16 Payable Practices. Each Borrower and Guarantor have not made any material
change in the historical accounts payable practices from those in effect
immediately prior to the date hereof.

     8.17 Plan of  Reorganization.  Borrowers have delivered to Agent a true and
correct  copy of the  Plan of  Reorganization  and  the  Plan of  Reorganization
delivered  has not otherwise  been amended or modified in any manner  adverse to
Agent and the Lenders. The Plan of Reorganization has been confirmed pursuant to
the  Confirmation  Order,  Borrowers  have delivered to Agent a true and correct
certified copy of the Confirmation  Order,  the Confirmation  Order has not been
amended  or  modified  in any  manner  adverse  to Agent  and the  Lenders,  the
Confirmation  Order  shall  be  a  Final  Order  (as  defined  in  the  Plan  of
Reorganization)   and  the   "Effective   Date"  (as  defined  in  the  Plan  of
Reorganization) shall contemporaneously occur on the date hereof.

     8.18 Senior Indebtedness.  The Obligations constitute "Senior Indebtedness"
(as  defined  in the  Indenture)  and  "Senior  Debt" (as  defined in the Peoria
Intercreditor Agreement).

     8.19 Accuracy and Completeness of Information. All information furnished by
or on behalf of any  Borrower or  Guarantor in writing to Agent or any Lender in
connection with this Agreement or any of the other  Financing  Agreements or any
transaction  contemplated  hereby or thereby,  including all  information on the
Information  Certificate  (but excluding any projections) is true and correct in
all  material  respects  on the date as of which  such  information  is dated or
certified  and does not omit any material  fact  necessary in order to make such
information not materially  misleading.  No event or  circumstance  has occurred
which has had or could reasonably be expected to have a Material Adverse Affect,
which has not been fully and  accurately  disclosed to Agent in writing prior to
the date hereof.

     8.20 Survival of Warranties; Cumulative. All representations and warranties
contained  in this  Agreement  or any of the other  Financing  Agreements  shall
survive the execution and delivery of this Agreement and shall be deemed to have
been made again to Agent and Lenders on the date of each additional borrowing or
other credit accommodation  hereunder and shall be conclusively presumed to have
been  relied on by Agent and Lenders  regardless  of any  investigation  made or
information possessed by Agent or any Lender. The representations and warranties
set  forth   herein   shall  be   cumulative   and  in  addition  to  any  other
representations  or  warranties  which any  Borrower or  Guarantor  shall now or
hereafter give, or cause to be given, to Agent or any Lender.

     SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS

9.1 Maintenance of Existence.

     (a) Each Borrower and Guarantor shall at all times preserve, renew and keep
in full force and  effect  its  corporate  existence  and rights and  franchises
material to its  business  and  maintain  in full force and effect all  material
licenses, trademarks, tradenames, approvals,  authorizations,  leases, contracts
and Permits  necessary  to carry on the  business as presently or proposed to be
conducted, except as permitted in Section 9.7 hereto.

     (b) No  Borrower  or  Guarantor  shall  change its name  unless each of the
following  conditions is satisfied:  (i) Agent shall have received not less than
fifteen  (15) days prior  written  notice from  Administrative  Borrower of such
proposed change in its corporate name,  which notice shall  accurately set forth
the new name;  and (ii) Agent shall have received a copy of the amendment to the
Certificate  of  Incorporation  of such Borrower or Guarantor  providing for the
name  change  certified  by  the  Secretary  of  State  of the  jurisdiction  of
incorporation  or  organization  of such  Borrower or Guarantor as soon as it is
available.

     (c) No Borrower or Guarantor shall change its chief executive office or its
mailing address or organizational  identification number (or if it does not have
one,  shall not acquire  one) unless  Agent  shall have  received  not less than
fifteen (15) days' prior  written  notice from  Administrative  Borrower of such
proposed  change,  which  notice shall set forth such  information  with respect
thereto as Agent may  reasonably  require  and Agent  shall have  received  such
agreements as Agent may reasonably require in connection therewith.  No Borrower
or  Guarantor   shall  change  its  type  of  organization  or  jurisdiction  of
organization. 9.2 New Collateral Locations. Each Borrower and Guarantor may only
open any new  location  within  the  continental  United  States  provided  such
Borrower or Guarantor (a) gives Agent thirty (30) days prior  written  notice of
the intended opening of any such new location and (b) executes and delivers,  or
causes to be executed and delivered,  to Agent such agreements,  documents,  and
instruments as Agent may deem  reasonably  necessary or desirable to protect its
interests  in the  Collateral  at such  location  to the  extent  the  value  of
Collateral  at such  location  is in excess of $250,000  individually  or in the
aggregate for all such locations.

     9.3 Compliance with Laws, Regulations, Etc.

     (a) Each Borrower and Guarantor  shall,  and shall cause any Subsidiary to,
at all times,  comply with all laws, rules,  regulations,  licenses,  approvals,
orders and other Permits  applicable to it and duly observe all  requirements of
any foreign, Federal, State or local Governmental Authority, except in each case
where non-compliance could not, individually or in the aggregate,  be reasonably
expected to have a Material Adverse Effect.

     (b) Borrowers and Guarantors shall give written notice to Agent immediately
upon any Borrower's or  Guarantor's  receipt of any notice of, or any Borrower's
or Guarantor's otherwise obtaining knowledge of, (i) the occurrence of any event
involving  the  release,  spill  or  discharge,  threatened  or  actual,  of any
Hazardous  Material or (ii) any  investigation,  proceeding,  complaint,  order,
directive,  claims,  citation or notice with respect to: (A) any  non-compliance
with or violation of any  Environmental  Law by any Borrower or Guarantor or (B)
the release, spill or discharge, threatened or actual, of any Hazardous Material
other than in the ordinary  course of business and other than as permitted under
any applicable Environmental Law, in each under clauses (i) and (ii) that could,
individually  or in the  aggregate,  reasonably  be  expected to have a Material
Adverse  Effect.  Copies  of  all  material   environmental   surveys,   audits,
assessments, feasibility studies and results of remedial investigations shall be
promptly furnished,  or caused to be furnished, by such Borrower or Guarantor to
Agent.  Each Borrower and  Guarantor  shall take prompt action to respond to any
material  non-compliance  with any of the Environmental Laws and shall regularly
report to Agent on such response.

     (c) Without  limiting  the  generality  of the  foregoing,  whenever  Agent
reasonably  determines  that there is  non-compliance,  or any  condition  which
requires  any action by or on behalf of any  Borrower or  Guarantor  in order to
avoid any non  compliance,  with any  Environmental  Law in each case that would
reasonably  be  expected  to  result,  individually  or in the  aggregate,  in a
Material  Adverse  Effect,  Borrowers  shall,  at Agent's request and Borrowers'
expense: (i) cause an independent  environmental  engineer reasonably acceptable
to Agent to  conduct  such  tests of the site  where  non-compliance  with  such
Environmental  Laws has  occurred  as to such  non-compliance  and  prepare  and
deliver to Agent a report as to such non-compliance setting forth the results of
such  tests,  a  proposed  plan for  responding  to any  environmental  problems
described  therein,  and an  estimate of the costs  thereof and (ii)  provide to
Agent a  supplemental  report  of  such  engineer  whenever  the  scope  of such
non-compliance,  or such  Borrower's  or  Guarantor's  response  thereto  or the
estimated costs thereof, shall change in any material respect.

     (d) Each Borrower and Guarantor shall indemnify and hold harmless Agent and
Lenders and their respective directors,  officers,  employees, agents, invitees,
representatives,  successors  and  assigns,  from and against any and all actual
losses, claims, damages, liabilities,  costs, and expenses (including reasonable
attorneys'  fees  and  expenses)  directly  or  indirectly  arising  out  of  or
attributable  to  the  use,  generation,  manufacture,   reproduction,  storage,
release,  threatened  release,  spill,  discharge,  disposal  or  presence  of a
Hazardous  Material,  including  the costs of any required or necessary  repair,
cleanup or other  remedial  work with respect to any property of any Borrower or
Guarantor and the preparation  and  implementation  of any closure,  remedial or
other  required   plans.   All   representations,   warranties,   covenants  and
indemnifications   in  this  Section  9.3  shall  survive  the  payment  of  the
Obligations and the termination of this Agreement.

     9.4 Payment of Taxes and Claims.  Each  Borrower and Guarantor  shall,  and
shall  cause any  Subsidiary  to, duly pay and  discharge  all  material  taxes,
assessments,  contributions  and governmental  charges upon or against it or its
properties or assets, except for taxes the validity of which are being contested
in good faith by  appropriate  proceedings  diligently  pursued and available to
such Borrower,  Guarantor or Subsidiary, as the case may be, and with respect to
which adequate  reserves have been set aside on its books to the extent required
by GAAP.

     9.5  Insurance.  Each  Borrower and  Guarantor  shall,  and shall cause any
Subsidiary  to, at all times,  maintain  with  financially  sound and  reputable
insurers insurance with respect to the Collateral against loss or damage and all
other insurance of the kinds and in the amounts  customarily  insured against or
carried by corporations of established reputation engaged in the same or similar
businesses  and  similarly  situated.   Said  policies  of  insurance  shall  be
reasonably  satisfactory to Agent as to form, amount and insurer.  Borrowers and
Guarantors  shall furnish  certificates,  policies or  endorsements  to Agent as
Agent shall reasonably require as proof of such insurance,  and, if any Borrower
or Guarantor  fails to do so, Agent is authorized,  but not required,  to obtain
such  insurance at the expense of  Borrowers.  Such  Borrower or  Guarantor  may
subsequently  cancel any insurance purchased by Agent after providing Agent with
satisfactory  evidence that such Borrower or Guarantor has obtained insurance as
required by this Section 9.5.  All  policies  shall  provide for at least thirty
(30) days prior  written  notice to Agent of any  cancellation  or  reduction of
coverage. Borrowers and Guarantors shall cause Agent to be named as a loss payee
and an additional  insured (but without any  liability  for any premiums)  under
such   insurance   policies   and   Borrowers   and   Guarantors   shall  obtain
non-contributory lender's loss payable endorsements to all insurance policies in
form and substance reasonably  satisfactory to Agent. Such lender's loss payable
endorsements  shall specify that the proceeds of such insurance shall be payable
to Agent as its interests may appear and further  specify that Agent and Lenders
shall be paid  regardless of any act or omission by any  Borrower,  Guarantor or
any of its or their  Affiliates.  Without  limiting any other rights of Agent or
Lenders,  any insurance proceeds received by Agent at any time may be applied to
payment of the  Obligations,  whether or not then due,  in any order and in such
manner  as  Agent  may  determine.  Upon  application  of such  proceeds  to the
Revolving  Loans,  Revolving Loans may be available  subject and pursuant to the
terms hereof to be used for the costs of repair or replacement of the Collateral
lost or damages resulting in the payment of such insurance proceeds.

     9.6 Financial Statements and Other Information.

     (a) Each Borrower and Guarantor  shall,  and shall cause any Subsidiary to,
keep proper books and records in which true and complete entries in all material
respects shall be made of all dealings or  transactions of or in relation to the
Collateral and the business of such Borrower,  Guarantor and its Subsidiaries in
accordance with GAAP.  Borrowers and Guarantors  shall promptly furnish to Agent
and Lenders all such financial and other  information as Agent shall  reasonably
request  relating to the Collateral  and the assets,  business and operations of
Borrowers and Guarantors, and Borrower shall notify the auditors and accountants
of Borrowers and Guarantors that Agent is authorized to obtain such  information
directly from them.  Without limiting the foregoing,  Borrowers shall furnish or
cause to be furnished to Agent, the following:

     (i) within  thirty  (30) days after the end of each fiscal  month,  monthly
unaudited  consolidated  financial  statements  (including  in each case balance
sheets,  statements of income and loss,  statements of cash flow, and statements
of shareholders'  equity),  all in reasonable  detail,  fairly presenting in all
material  respects the financial  position and the results of the  operations of
Administrative  Borrower and its  Subsidiaries as of the end of and through such
fiscal  month,  certified  to be  correct  by the  chief  financial  officer  of
Administrative Borrower,  subject to normal year-end adjustments and accompanied
by a compliance certificate substantially in the form of Exhibit C hereto, along
with a schedule in a form reasonably  satisfactory to Agent of the  calculations
used  in  determining,  as of the  end of  such  month,  whether  Borrowers  and
Guarantors  were in  compliance  with the  covenants  set forth in Sections 9.17
(which,  for purposes of Section 9.17 shall be determined on a quarterly  basis)
and 9.18 of this Agreement for such month, and

     (ii) within one  hundred ten (110) days after the end of each fiscal  year,
audited  consolidated  financial  statements of Administrative  Borrower and its
Subsidiaries  (including in each case balance  sheets,  statements of income and
loss, statements of cash flow, and statements of shareholders'  equity), and the
accompanying notes thereto,  all in reasonable detail,  fairly presenting in all
material  respects the financial  position and the results of the  operations of
Administrative  Borrower  and its  Subsidiaries  as of the  end of and for  such
fiscal  year,  together  with  the  unqualified  opinion  (as to  scope or going
concern) of independent certified public accountants with respect to the audited
consolidated  financial  statements,  which  accountants shall be an independent
accounting firm selected by Administrative Borrower and reasonably acceptable to
Agent, that such audited consolidated financial statements have been prepared in
accordance with GAAP, and present fairly in all material respects the results of
operations  and  financial   condition  of   Administrative   Borrower  and  its
Subsidiaries as of the end of and for the fiscal year then ended, and

     (iii) at such time as  available,  but in no event  later than  thirty (30)
days after the end of each  fiscal  year  (commencing  with the  fiscal  year of
Borrowers ending December 31, 2005), projected consolidated financial statements
(including in each case,  forecasted balance sheets and statements of income and
loss,  statements  of cash flow,  and  statements  of  shareholders'  equity) of
Administrative  Borrower  and its  Subsidiaries  for such  fiscal  year,  all in
reasonable detail, and in a format consistent with the projections  delivered by
Borrowers  to Agent  prior to the date  hereof,  together  with such  supporting
information as Agent may reasonably request. Such projected financial statements
shall be prepared on a monthly basis for such year.  Such  projections  shall be
based upon  estimates  and  assumptions  made in good faith and  believed by the
Administrative  Borrower to be reasonable when made in light of the then current
conditions  and facts (it being  understood  that actual results may differ from
those set forth in such  projected  financial  statements).  Each year Borrowers
shall provide to Agent a semi-annual  update with respect to such projections or
at any time an Event of Default has occurred and is continuing,  more frequently
as Agent may require.

     (b) Borrowers and Guarantors  shall promptly notify Agent in writing of the
details of (i) any loss,  damage,  investigation,  action,  suit,  proceeding or
claim relating to Collateral having a value of more than $500,000 or which could
reasonably  be expected to have a Material  Adverse  Effect,  (ii) any  Material
Contract being  terminated which could reasonably be expected to have a Material
Adverse Effect, (iii) any order,  judgment or decree in excess of $500,000 shall
have  been  entered  against  any  Borrower  or  Guarantor  any of its or  their
properties or assets,  (iv) any notification of a material  violation of laws or
regulations received by any Borrower or Guarantor, (v) any ERISA Event, and (vi)
the occurrence of any Default or Event of Default.

     (c) Promptly after the sending or filing  thereof,  Borrowers shall send to
Agent  copies of (i) all  reports  which  Administrative  Borrower or any of its
Subsidiaries  sends to its  security  holders  generally,  (ii) all  reports and
registration statements which Administrative Borrower or any of its Subsidiaries
files  with  the  Securities  Exchange  Commission,   any  national  or  foreign
securities exchange or the National Association of Securities Dealers, Inc., and
such  other   reports  as  Agent  may   hereafter   specifically   identify   to
Administrative Borrower that Agent will reasonably require be provided to Agent,
(iii)  all press  releases  and (iv) all other  statements  concerning  material
changes  or  developments  in the  business  of a  Borrower  or  Guarantor  made
available by any Borrower or Guarantor to the public.

     (d)  Borrowers  and  Guarantors  shall  furnish or cause to be furnished to
Agent such budgets, forecasts,  projections and other information respecting the
Collateral and the business of Borrowers and Guarantors, as Agent may, from time
to time, reasonably request. Agent is hereby authorized to deliver a copy of any
financial  statement  or any  other  information  relating  to the  business  of
Borrowers  and  Guarantors  to any  court or other  Governmental  Authority  or,
subject to the  confidentiality  provisions herein, to any Lender or Participant
or  prospective  Lender  or  Participant  or  any  Affiliate  of any  Lender  or
Participant.  Each  Borrower and Guarantor  hereby  irrevocably  authorizes  and
directs all accountants or auditors to deliver to Agent, at Borrowers'  expense,
copies of the financial statements of any Borrower and Guarantor and any reports
or management  letters prepared by such accountants or auditors on behalf of any
Borrower or Guarantor and to disclose to Agent and Lenders such  information  as
they  may have  regarding  the  business  of any  Borrower  and  Guarantor.  Any
documents,  schedules, invoices or other papers delivered to Agent or any Lender
may be destroyed  or otherwise  disposed of by Agent or such Lender one (1) year
after  the same are  delivered  to Agent or such  Lender,  except  as  otherwise
designated by Administrative Borrower to Agent or such Lender in writing.

     9.7 Sale of Assets, Consolidation,  Merger, Dissolution, Etc. Each Borrower
and Guarantor  shall not, and shall not permit any  Subsidiary  to,  directly or
indirectly,

     (a) merge into or with or  consolidate  with any other Person or permit any
other  Person  to merge  into or with or  consolidate  with it  except  that any
wholly-owned  Subsidiary of  Administrative  Borrower may merge with and into or
consolidate with Administrative Borrower or any other wholly-owned Subsidiary of
Administrative  Borrower,  provided,  that, each of the following  conditions is
satisfied as  determined  by Agent in good faith:  (i) Agent shall have received
not less than twenty (20) Business  Days' prior written  notice of the intention
of such Subsidiaries to so merge or consolidate, which notice shall set forth in
reasonable  detail  satisfactory  to Agent,  the  persons  that are  merging  or
consolidating,  which person will be the surviving entity,  the locations of the
assets of the  persons  that are  merging  or  consolidating,  and the  material
agreements and documents  relating to such merger or  consolidation,  (ii) Agent
shall  have  received  such other  information  with  respect to such  merger or
consolidation as Agent may reasonably request, (iii) as of the effective date of
the merger or consolidation and after giving effect thereto, no Default or Event
of Default shall exist or have occurred,  (iv) Agent shall have received,  true,
correct  and  complete  copies  of all  agreements,  documents  and  instruments
relating to such  merger or  consolidation,  including,  but not limited to, the
certificate  or  certificates  of  merger  to be  filed  with  each  appropriate
Secretary of State (with a copy as filed promptly after such filing),  (v) as of
the effective date of the merger or consolidation, (A) the surviving corporation
shall  expressly  confirm,  ratify and assume the  Obligations and the Financing
Agreements to which it is a party in writing, in form and substance satisfactory
to Agent,  and (B)  Borrowers and  Guarantors  shall have executed and delivered
such  other  agreements,  documents  and  instruments  as Agent may  request  in
connection therewith;

     (b) sell, issue, assign,  lease,  license,  transfer,  abandon or otherwise
dispose of any Capital Stock or  Indebtedness  to any other Person or any of its
assets to any other Person, except for

     (i) sales or other  dispositions  of Inventory  in the  ordinary  course of
business,

     (ii)  the  sale or  other  disposition  of  Equipment  (including  surplus,
worn-out  or obsolete  Equipment  or  Equipment  no longer used or useful in the
business  of any  Borrower  or  Guarantor)  so long as (A)  such  sales or other
dispositions do not involve  Equipment  having an aggregate fair market value in
excess of  $250,000  for all such  Equipment  disposed  of in any fiscal year of
Administrative Borrower or as Agent may otherwise agree, (B) no Event of Default
has  occurred  and is  continuing  at the time of, or would  result after giving
effect  to,  any  such  sale or  disposition,  (C)  Borrowers  receive  net cash
consideration  for such sale or disposition at least equal to the amount of Term
Loans  advanced  against such  Equipment (to the extent Term Loans were advanced
against such  Equipment)  and (D) all net proceeds are promptly  transferred  to
Agent to be applied against the remaining Term Loans of such Borrower in inverse
order of  maturity,  or, if such Term  Loans  have been  repaid in full,  to the
remaining Obligations as Agent shall determine, and

     (iii) the issuance and sale by Administrative  Borrower of Capital Stock of
such  Borrower  after the date  hereof;  provided,  that,  (A) Agent  shall have
received  not less than five (5)  Business  Days' prior  written  notice of such
issuance and sale by such  Borrower,  which notice shall  specify the parties to
whom such shares are to be sold,  the terms of such sale, the total amount which
it is anticipated  will be realized from the issuance and sale of such stock and
the net cash proceeds which it is anticipated  will be received by such Borrower
from  such  sale,  (B)  such  Borrower  shall  not be  required  to pay any cash
dividends or repurchase or redeem such Capital Stock or make any other  payments
in respect thereof,  except as otherwise  permitted in Section 9.11 hereof,  (C)
the terms of such Capital  Stock,  and the terms and  conditions of the purchase
and sale thereof, shall not include any terms that include any limitation on the
right of such  Borrower to request or receive  Loans or Letters of Credit or the
right of such  Borrower  to amend or modify any of the terms and  conditions  of
this Agreement or any of the other Financing  Agreements or otherwise in any way
relate to or affect the  arrangements of Borrowers and Guarantors with Agent and
Lenders or are more  restrictive or burdensome to any such Borrower or Guarantor
than the terms of any Capital Stock in effect on the date hereof,  (D) except as
Agent  may  otherwise  agree in  writing,  all of the  proceeds  of the sale and
issuance of such  Capital  Stock shall be paid to Agent for  application  to the
Obligations in such order and manner as Agent may determine or at Agent's option
(once all Loans are paid in full and only  Letter of Credit  Obligations  remain
outstanding),  to be held as cash  collateral for the  Obligations and (E) as of
the date of such issuance and sale and after giving effect  thereto,  no Default
or Event of Default shall exist or have occurred,

     (iv) the issuance of Capital Stock of Administrative Borrower consisting of
common stock  pursuant to an employee  stock  option or grant or similar  equity
plan  or  401(k)  plans  of such  Borrower  for the  benefit  of its  employees,
directors and  consultants,  provided,  that, in no event shall such Borrower be
required to issue, or shall such Borrower issue,  Capital Stock pursuant to such
stock plans or 401(k)  plans which would  result in a Change of Control or other
Event of Default,

     (v) the  issuance  of  Capital  Stock of  Administrative  Borrower  for (a)
transfers and replacements of then  outstanding  shares of Capital Stock and (b)
stock splits and stock dividends,

     (vi) the licensing or sublicensing by the  Administrative  Borrower and its
Subsidiaries, on a non-exclusive basis, of patents, trademarks,  copyrights, and
other intellectual property rights in the ordinary course of business,

     (vii) the sale or discount by any  Borrower,  Guarantor  or  Subsidiary  of
overdue Accounts receivable arising in the ordinary course of business provided,
that (A) such  Accounts are not included in the  calculation  of the most recent
Borrowing  Base, (B) all net proceeds shall be paid to Agent for  application to
the Obligations in such order and manner as Agent may determine, (C) no Event of
Default has occurred and is  continuing at the time of any such sale or discount
and (D) the face amount of such Account to be sold or discounted does not exceed
$250,000 individually or in the aggregate for all such Accounts,

     (viii)  the  use  or  transfer  of  money  or  Cash   Equivalents   by  the
Administrative  Borrower and its Subsidiaries in a manner that is not prohibited
by the terms of this Agreement or the other Financing Agreements,

     (ix) the issuance by Borrowers of Capital Stock in accordance with the Plan
of  Reorganization  so long as all such  Capital  Stock  (except with respect to
Administrative Borrower) is pledged to Agent to secure the Obligations,

     (x) investments permitted pursuant to Section 9.10,

     (xi) the lease by F V Steel of its real  property  pursuant to the terms of
that certain  Real Estate Lease dated  January 1, 2001 between F V Steel and Fox
Valley Steel and Wire Company,

     (c) wind up,  liquidate or dissolve  except that any Guarantor may wind up,
liquidate  and dissolve,  provided,  that,  each of the following  conditions is
satisfied,  (i) the winding up,  liquidation  and  dissolution of such Guarantor
shall  not  violate  any law or any  order  or  decree  of any  court  or  other
Governmental  Authority in any material  respect and shall not conflict  with or
result in the breach of, or constitute a default under, any indenture, mortgage,
deed of trust,  or any other  agreement or  instrument  to which any Borrower or
Guarantor  is a party or may be bound,  (ii) such  winding  up,  liquidation  or
dissolution  shall be done in accordance with the requirements of all applicable
laws and  regulations,  (iii)  effective  upon such winding up,  liquidation  or
dissolution,  all of the assets and properties of such  Guarantor  shall be duly
and validly transferred and assigned to a Borrower, free and clear of any liens,
restrictions or encumbrances other than the security interest and liens of Agent
(and Agent shall have  received such  evidence  thereof as Agent may  reasonably
require) and other liens  permitted  under this  Agreement  and Agent shall have
received such deeds,  assignments  or other  agreements as Agent may  reasonably
request to evidence and confirm the transfer of such assets to of such Guarantor
to a Borrower,  (iv) Agent shall have received all documents and agreements that
any Borrower or Guarantor  has filed with any  Governmental  Authority or as are
otherwise  required to effectuate  such winding up,  liquidation or dissolution,
(v) no Borrower or  Guarantor  shall  assume any  Indebtedness,  obligations  or
liabilities  as a result of such  winding up,  liquidation  or  dissolution,  or
otherwise  become liable in respect of any  obligations  or  liabilities  of the
entity that is winding up,  liquidating or dissolving,  unless such Indebtedness
is otherwise expressly permitted  hereunder,  (vi) Agent shall have received not
less than ten (10) Business  Days prior written  notice of the intention of such
Guarantor to wind up,  liquidate  or dissolve,  and (vii) as of the date of such
winding up,  liquidation  or  dissolution  and after giving effect  thereto,  no
Default or Event of Default shall have occurred and be continuing.

     9.8  Encumbrances.  Each  Borrower and  Guarantor  shall not, and shall not
permit any Subsidiary to, create,  incur, assume or suffer to exist any security
interest,  mortgage,  pledge,  lien,  charge or other  encumbrance of any nature
whatsoever on any of its assets or properties, including the Collateral, or file
or permit the filing of, or permit to remain in effect, any financing  statement
or other  similar  notice of any  security  interest or lien with respect to any
such assets or properties, except:

     (a) the security interests and liens of Agent for itself and the benefit of
Lenders and the security interests and liens of Agent for the benefit of itself,
any  Lender,  any  Affiliate  of any Lender or any other  financial  institution
acceptable to Agent (and in each case as to any such Lender,  Affiliate or other
financial  institution  only to the extent approved by Agent) that is party to a
Hedge  Agreement  to the extent  provided  for  herein and  subject to the terms
hereof;

     (b) liens securing the payment of taxes,  assessments or other governmental
charges or levies  either not yet  overdue  or the  validity  of which are being
contested  in good  faith by  appropriate  proceedings  diligently  pursued  and
available to such Borrower,  or Guarantor or Subsidiary,  as the case may be and
with respect to which adequate reserves have been set aside on its books;

     (c)  non-consensual  statutory liens (other than liens securing the payment
of taxes)  arising in the ordinary  course of such  Borrower's,  Guarantor's  or
Subsidiary's business to the extent: (i) such liens secure Indebtedness which is
not  overdue  or (ii)  such  liens  secure  Indebtedness  relating  to claims or
liabilities  which are fully  insured  and being  defended  at the sole cost and
expense and at the sole risk of the insurer or being  contested in good faith by
appropriate  proceedings  diligently  pursued and  available  to such  Borrower,
Guarantor  or such  Subsidiary,  in  each  case  prior  to the  commencement  of
foreclosure  or other  similar  proceedings  and with respect to which  adequate
reserves have been set aside on its books;

     (d) zoning,  building and land use restrictions,  easements,  rights-of-way
licenses,  covenants,  reservations,  conditions,  title  exceptions  and  other
restrictions  affecting the use of Real Property  which,  individually or in the
aggregate,  do not  interfere in any material  respect with the use of such Real
Property or ordinary conduct of the business of such Borrower, Guarantor or such
Subsidiary as presently  conducted thereon or materially impair the value of the
Real Property which may be subject thereto;

     (e) purchase  money  security  interests in  Equipment  (including  Capital
Leases) and purchase  money  mortgages on Real  Property to secure  Indebtedness
permitted under Section 9.9(b) hereof;

     (f) pledges and  deposits of cash by any  Borrower or  Guarantor  after the
date  hereof in the  ordinary  course of business in  connection  with  workers'
compensation, unemployment insurance and other types of social security benefits
consistent  with the current  practices of such  Borrower or Guarantor as of the
date hereof;

     (g) pledges and  deposits of cash by any  Borrower or  Guarantor  after the
date hereof to secure the performance of tenders,  bids, leases, trade contracts
(other than for the repayment of Indebtedness),  statutory obligations and other
similar  obligations in each case in the ordinary course of business  consistent
with the current  practices of such Borrower or Guarantor as of the date hereof;
provided,  that, in connection with any performance  bonds issued by a surety or
other person, the issuer of such bond shall have waived in writing any rights in
or to, or other interest in, any of the Collateral in an agreement,  in form and
substance satisfactory to Agent;

     (h) liens  arising  from (i)  operating  leases and the  precautionary  UCC
financing  statement  filings in respect  thereof  and (ii)  equipment  or other
materials  which are not  owned by any  Borrower  or  Guarantor  located  on the
premises of such Borrower or Guarantor from time to time in the ordinary  course
of business and consistent with current  practices of such Borrower or Guarantor
and the precautionary UCC financing statement filings in respect thereof;

     (i) judgments  and other  similar  liens  arising in connection  with court
proceedings that do not constitute an Event of Default, provided, that, (i) such
liens  are  being  contested  in  good  faith  and  by  appropriate  proceedings
diligently pursued,  (ii) adequate reserves or other appropriate  provision,  if
any,  as are  required  by  GAAP  have  been  made  therefor,  (iii)  a stay  of
enforcement  of any such  liens is in  effect  and (iv)  Agent may  establish  a
Reserve with respect thereto;

     (j) the  security  interests  and liens set  forth on  Schedule  8.4 to the
Information  Certificate  and  renewals and  extensions  thereof so long as such
renewals and extensions relate solely to the same asset originally encumbered;

     (k) liens encumbering  customary initial deposits and margin deposits,  and
similar  liens and margin  deposits,  and similar  liens  attaching to commodity
trading accounts or other brokerage  accounts incurred in the ordinary course of
business;

     (l) non-exclusive licenses or sublicenses,  granted to third parties in the
ordinary  course  of  business  not   interfering   with  the  business  of  the
Administrative Borrower or any of its Subsidiaries;

     (m) rights of setoff or  bankers'  liens upon  deposits of cash in favor of
banks or other  depository  institutions  and liens  associated  with  overdraft
protection and netting services;

     (n) liens in favor of customs and revenues authorities which secure payment
of customs duties in connection with the importation of goods;

     (o)  liens  deemed  to  exist  in  connection  with  permitted   repurchase
obligations or set-off rights;

     (p) liens in favor of  collecting  banks arising under Section 4-210 of the
UCC;

     (q) carriers', warehousemen's, suppliers' or other similar possessory liens
arising in the  ordinary  course of business and which have not arisen to secure
Indebtedness  for  borrowed  money;  provided  that (i) such liens do not in the
aggregate  materially  detract  from the  value of such  property  or  assets or
materially  impair the use thereof in the  operation of  businesses of Borrowers
and  Guarantors  and (ii)  such  liens do not  encumber  assets  comprising  the
Borrowing  Base or any real  property or  Equipment on which the Term Loans were
advanced unless either (A) Agent has received a satisfactory  Collateral  Access
Agreement  under  which such liens are waived or  subordinated  or (B) Agent has
elected to implement a Reserve;

     (r) deposits  securing,  or in lieu of, surety,  appeal or customs bonds in
proceedings to which any Borrower, Guarantor or Subsidiary is a party; and

     (s) other  non-consensual  liens not  specifically  listed  above  securing
Indebtedness  not  to  exceed  $100,000  outstanding  at  any  one  time  in the
aggregate.

     9.9  Indebtedness.  Each  Borrower and  Guarantor  shall not, and shall not
permit any  Subsidiary  to, incur,  create,  assume,  become or be liable in any
manner with  respect to, or permit to exist,  any  Indebtedness,  or  guarantee,
assume,  endorse,  or otherwise become responsible for (directly or indirectly),
the  Indebtedness,  performance,  obligations  or dividends of any other Person,
except:

     (a) the Obligations;

     (b) purchase money  Indebtedness  (including  Capital Leases) arising after
the date hereof to the extent secured by purchase  money  security  interests in
Equipment  (including  Capital  Leases) and  purchase  money  mortgages  on Real
Property not to exceed $750,000 in the aggregate at any time outstanding so long
as such  security  interests  and mortgages do not apply to any property of such
Borrower,  Guarantor or Subsidiary  other than the Equipment or Real Property so
acquired,  and the Indebtedness  secured thereby does not exceed the cost of the
Equipment or Real Property so acquired, as the case may be;

     (c) guarantees by any Borrower or Guarantor of the Obligations of the other
Borrowers or Guarantors in favor of Agent for the benefit of Lenders;

     (d) the Indebtedness permitted under Section 9.10(g) hereof;

     (e) unsecured  Indebtedness of any Borrower or Guarantor  arising after the
date hereof to any third  person (but not to any other  Borrower or  Guarantor),
provided,  that, each of the following  conditions is satisfied as determined by
Agent:  (i) such  Indebtedness  shall be on terms and  conditions  acceptable to
Agent and shall be subject and  subordinate  in right of payment to the right of
Agent and Lenders to receive the prior payment and  satisfaction in full payment
of all of the Obligations  pursuant to the terms of an  intercreditor  agreement
between Agent and such third party, in form and substance satisfactory to Agent,
(ii) Agent shall have received not less than ten (10) days prior written  notice
of the intention of such Borrower or Guarantor to incur such Indebtedness, which
notice shall set forth in reasonable detail  satisfactory to Agent the amount of
such Indebtedness, the person or persons to whom such Indebtedness will be owed,
the interest  rate,  the schedule of  repayments  and maturity date with respect
thereto and such other  information  as Agent may request with respect  thereto,
(iii)  Agent  shall have  received  true,  correct  and  complete  copies of all
agreements,  documents and instruments  evidencing or otherwise  related to such
Indebtedness,  (iv) except as Agent may otherwise  agree in writing,  all of the
proceeds of the loans or other  accommodations  giving rise to such Indebtedness
shall be paid to Agent for  application  to the  Obligations  in such  order and
manner  as  Agent  may  determine  or at  Agent's  option,  to be  held  as cash
collateral for the  Obligations,  (v) in no event shall the aggregate  principal
amount of such  Indebtedness  incurred during the term of this Agreement  exceed
$1,000,000,  (vi) as of the date of incurring such Indebtedness and after giving
effect  thereto,  no Default or Event of Default  shall exist or have  occurred,
(vii) such Borrower and Guarantor shall not, directly or indirectly,  (A) amend,
modify,  alter or  change  the  terms  of such  Indebtedness  or any  agreement,
document or instrument related thereto, except, that, such Borrower or Guarantor
may, after prior written  notice to Agent,  amend,  modify,  alter or change the
terms thereof so as to extend the maturity  thereof,  or defer the timing of any
payments  in  respect  thereof,  or to  forgive  or cancel  any  portion of such
Indebtedness  (other  than  pursuant  to  payments  thereof),  or to reduce  the
interest  rate or any  fees in  connection  therewith,  or (B)  redeem,  retire,
defease,  purchase or otherwise  acquire such  Indebtedness  (except pursuant to
regularly  scheduled  payments  permitted  herein),  or set  aside or  otherwise
deposit or invest any sums for such purpose, and (viii) Borrowers and Guarantors
shall  furnish  to  Agent  all  notices  or  demands  in  connection  with  such
Indebtedness  either  received  by any  Borrower or  Guarantor  or on its behalf
promptly after the receipt  thereof,  or sent by any Borrower or Guarantor or on
its behalf concurrently with the sending thereof, as the case may be;

     (f)  the  Indebtedness  set  forth  on  Schedule  9.9  to  the  Information
Certificate;  provided,  that,  (i)  Borrowers  and  Guarantors  may  only  make
regularly  scheduled  payments  of  principal  and  interest  in respect of such
Indebtedness  in  accordance  with the  terms  of the  agreement  or  instrument
evidencing or giving rise to such  Indebtedness as in effect on the date hereof;
provided,  that no  payments  may be made in  respect of the  Peoria  Debt,  the
Indebtedness under the Indenture or the Trustee Debt unless expressly  permitted
by  the  Peoria   Intercreditor   Agreement,   the  Indenture  and  the  Trustee
Intercreditor  Agreement,  respectively (ii) Borrowers and Guarantors shall not,
directly or  indirectly,  (A) amend,  modify,  alter or change the terms of such
Indebtedness  or any  agreement,  document or instrument  related  thereto as in
effect on the date hereof  except,  that,  Borrowers and  Guarantors  may, after
prior written notice to Agent, amend,  modify, alter or change the terms thereof
so as to extend the  maturity  thereof,  or defer the timing of any  payments in
respect thereof, or to forgive or cancel any portion of such Indebtedness (other
than pursuant to payments  thereof),  or to reduce the interest rate or any fees
in connection therewith, or (B) redeem, retire,  defease,  purchase or otherwise
acquire such Indebtedness,  or set aside or otherwise deposit or invest any sums
for such purpose,  and (iii) Borrowers and Guarantors shall furnish to Agent all
notices or demands in connection with such  Indebtedness  either received by any
Borrower or Guarantor or on its behalf,  promptly after the receipt thereof,  or
sent by any  Borrower  or  Guarantor  or on its  behalf,  concurrently  with the
sending thereof, as the case may be;

     (g)  Indebtedness  of any Borrower  entered into in the ordinary  course of
business  pursuant to a Hedge Agreement;  provided,  that, (i) such arrangements
are either  with  Agent,  any Lender,  or any  Affiliate  of any Lender or other
financial  institutions  acceptable  to Agent  (and in each  case as to any such
Lender,  Affiliate or other financial institution only to the extent approved by
Agent), (ii) such arrangements are not for speculative purposes,  and (iii) such
Indebtedness  shall  be  unsecured,  except  to  the  extent  such  Indebtedness
constitutes  part  of  the  Obligations  arising  under  or  pursuant  to  Hedge
Agreements  with  Agent,  any  Lender,  any  Affiliate  of any Lender or another
financial institution that are secured under the terms hereof;

     (h) other  unsecured  Indebtedness  incurred  after the date hereof and not
otherwise  permitted  hereunder in an aggregate  principal  amount not exceeding
$1,000,000 at any one time outstanding; provided, that, at the time of and after
giving  effect to such  incurrence  of  Indebtedness  no Event of Default  shall
exist; and

     (i)  extensions,  renewals or refinancings  of any  Indebtedness  permitted
under Schedule 9.9 so long as (i) such Indebtedness ("Refinancing Indebtedness")
is in an original  aggregate  principal  amount not greater  than the  aggregate
principal amount of the Indebtedness being extended, renewed or refinanced, (ii)
if the Indebtedness being extended, renewed or refinanced is subordinated to any
of  the  Obligations,  such  Refinancing  Indebtedness  is  subordinated  to the
Obligations  on terms not less  favorable  to the Lenders  than the terms of the
subordination provisions governing such Indebtedness being extended,  renewed or
refinanced,  (iii) at the time of and after  giving  effect to such  renewal  or
refinancing,  no Event of Default shall have occurred and be continuing and (iv)
the other  terms and  conditions  of such  Refinancing  Indebtedness  (including
amortization,  interest  rates and fees) are no less favorable to the applicable
Borrower  or  Guarantor  than  the  Indebtedness  being  extended,   renewed  or
refinanced.

     9.10 Loans,  Investments,  Etc. Each Borrower and Guarantor  shall not, and
shall not permit any  Subsidiary to,  directly or indirectly,  make any loans or
advance money or property to any person, or invest in (by capital  contribution,
dividend  or  otherwise)  or  purchase  or  repurchase   the  Capital  Stock  or
Indebtedness  or all or a  substantial  part of the  assets or  property  of any
person,  or  form  or  acquire  any  Subsidiaries,  or  agree  to do  any of the
foregoing, except:

     (a) the  endorsement  of  instruments  for  collection  or  deposit  in the
ordinary course of business;

     (b) investments in cash or Cash Equivalents,  provided,  that, (i) no Loans
are then  outstanding  and (ii) the terms and  conditions  of Section 5.2 hereof
shall have been  satisfied  with  respect  to the  deposit  account,  investment
account or other account in which such cash or Cash Equivalents are held;

     (c) the existing  equity  investments  of each Borrower and Guarantor as of
the date hereof in its Subsidiaries  and other equity  investments made pursuant
to the Plan of  Reorganization,  provided,  that, no Borrower or Guarantor shall
have any further obligations or liabilities to make any capital contributions or
other  additional  investments  or other payments to or in or for the benefit of
any of such Subsidiaries;

     (d) loans and  advances by any  Borrower or  Guarantor to employees of such
Borrower or Guarantor for: (i) reasonably and necessary  work-related  travel or
other ordinary  business  expenses to be incurred by such employee in connection
with their work for such Borrower or Guarantor and (ii) reasonable and necessary
relocation  expenses of such employees  (including  home mortgage  financing for
relocated employees);

     (e) stock or obligations  issued to any Borrower or Guarantor by any Person
(or the representative of such Person) in respect of Indebtedness of such Person
owing  to  such  Borrower  or  Guarantor  in  connection  with  the  insolvency,
bankruptcy,  receivership or  reorganization  of such Person or a composition or
readjustment  of the debts of such Person (or in connection  with the settlement
of Accounts of such Person);  provided,  that, the original of any such stock or
instrument  evidencing such  obligations  shall be promptly  delivered to Agent,
upon Agent's request,  together with such stock power, assignment or endorsement
by such Borrower or Guarantor as Agent may reasonably request;

     (f)  obligations  of account  debtors to any Borrower or Guarantor  arising
from  Accounts  which are past due  evidenced by a promissory  note made by such
account debtor payable to such Borrower or Guarantor;  provided,  that, promptly
upon the receipt of the original of any such promissory note by such Borrower or
Guarantor,  such  promissory  note shall be endorsed  and  delivered to Agent in
accordance with Section 5.2 hereof;

     (g) loans by a  Borrower  (other  than FV Steel) or  Guarantor  to  another
Borrower or Guarantor after the date hereof, provided, that,

     (i) as to all of such loans,  (A) within  thirty (30) days after the end of
each  fiscal  month,  Borrowers  shall  provide  to Agent a  report  in form and
substance  satisfactory to Agent of the  outstanding  amount of such loans as of
the last day of the  immediately  preceding  month and indicating any loans made
and  payments   received  during  the  immediately   preceding  month,  (B)  the
Indebtedness  arising  pursuant  to any such loan  shall not be  evidenced  by a
promissory note or other instrument,  unless the single original of such note or
other instrument is promptly delivered to Agent upon its request to hold as part
of the Collateral,  with such endorsement and/or assignment by the payee of such
note or other  instrument  as Agent may require,  (C) as of the date of any such
loan and after giving effect thereto, the Borrower or Guarantor making such loan
shall  be  Solvent,  and (D) as of the date of any such  loan and  after  giving
effect thereto,  no Default or Event of Default shall exist or have occurred and
be continuing,

     (ii) as to loans by a Guarantor to a Borrower, (A) the Indebtedness arising
pursuant to such loan shall be subject to, and  subordinate  in right of payment
to, the right of Agent and  Lenders  to  receive  the prior  final  payment  and
satisfaction  in  full  of  all of  the  Obligations  on  terms  and  conditions
acceptable  to Agent,  (B)  promptly  upon  Agent's  request,  Agent  shall have
received a subordination agreement, in form and substance satisfactory to Agent,
providing  for the  terms  of the  subordination  in right  of  payment  of such
Indebtedness  of such  Borrower to the prior final payment and  satisfaction  in
full of all of the Obligations, duly authorized,  executed and delivered by such
Guarantor  and such  Borrower,  and (C) such  Borrower  shall not,  directly  or
indirectly  make,  or be  required  to make,  any  payments  in  respect of such
Indebtedness prior to the end of the then current term of this Agreement;

     (iii) as to loans by a Borrower to a Guarantor or another  Borrower,  as of
the date of any such loan and after giving effect  thereto (A)  Borrowers  shall
have aggregate  Excess  Availability  equal to at least  $5,200,000 and (B) with
respect to any such loans by a Borrower to any other Borrower or Guarantor,  (1)
the Excess Availability of such lending Borrower shall be not less than $200,000
and (2) such lending  Borrower shall have an Adjusted  Tangible Net Worth of not
less than $100,000;

     (h) the loans and  advances set forth on Schedule  9.10 to the  Information
Certificate;  provided,  that,  as to such  loans and  advances,  Borrowers  and
Guarantors shall not, directly or indirectly, amend, modify, alter or change the
terms of such  loans and  advances  or any  agreement,  document  or  instrument
related thereto and Borrowers and Guarantors  shall furnish to Agent all notices
or demands in  connection  with such loans and advances  either  received by any
Borrower or Guarantor or on its behalf,  promptly after the receipt thereof,  or
sent by any  Borrower  or  Guarantor  or on its  behalf,  concurrently  with the
sending thereof, as the case may be,

     (i) to the extent permitted by applicable law,  Administrative Borrower may
accept notes from  officers and  employees in exchange for Capital Stock of such
Borrower,  purchased by such officers or employees pursuant to a stock ownership
or purchase plan or compensation plan;

     (j) pledges and deposits  made by any  Borrower,  Guarantor  or  Subsidiary
permitted under this Agreement,  including  deposits made in the ordinary course
of business  securing  obligations or performance  under  contracts,  such as in
connection with real estate or personal property leases;

     (k) other  loans or  investments  not  permitted  above to the  extent  the
aggregate amount of such loans and investments does not exceed $200,000; and

     (l)  extensions,  renewals or  refinancings of the loans and advances under
Schedule 9.10 to the Information  Certificate so long as the principal amount is
not increased.

     9.11  Dividends and  Redemptions.  Each  Borrower and Guarantor  shall not,
directly or indirectly, declare or pay any dividends on account of any shares of
class of any  Capital  Stock of such  Borrower  or  Guarantor  now or  hereafter
outstanding,  or set aside or  otherwise  deposit  or  invest  any sums for such
purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of
any class of Capital Stock (or set aside or otherwise deposit or invest any sums
for such purpose) for any  consideration  or apply or set apart any sum, or make
any other  distribution (by reduction of capital or otherwise) in respect of any
such shares, except that:

     (a) any Borrower or Guarantor may declare and pay such dividends or redeem,
retire,  defease,  purchase  or  otherwise  acquire  any  shares of any class of
Capital Stock for  consideration  in the form of shares of common stock (so long
as after giving effect thereto no Change of Control or other Default or Event of
Default shall exist or occur);

     (b) Borrowers and Guarantors  may pay dividends to the extent  permitted in
Section 9.12 below;

     (c) any  Subsidiary  of  Administrative  Borrower may pay  dividends to its
direct stockholder;

     (d)  Administrative  Borrower may  repurchase  Capital Stock  consisting of
common stock held by employees  pursuant to any employee  stock  ownership  plan
thereof  upon the  termination,  retirement  or death  of any such  employee  in
accordance  with the  provisions  of such plan,  provided,  that, as to any such
repurchase, each of the following conditions is satisfied: (i) as of the date of
the payment for such repurchase and after giving effect  thereto,  no Default or
Event of Default  shall  exist or have  occurred  and be  continuing,  (ii) such
repurchase shall be paid with funds legally available  therefor or a note, (iii)
such  repurchase  shall not  violate any law or  regulation  or the terms of any
indenture,  agreement  or  undertaking  to which such  Borrower is a party or by
which such Borrower or its property are bound,  and (iv) the aggregate amount of
all cash  payments for such  repurchases  in any calendar  year shall not exceed
$500,000.

     9.12 Transactions  with Affiliates.  Each Borrower and Guarantor shall not,
directly or indirectly:

     (a)  purchase,  acquire or lease any property  from,  or sell,  transfer or
lease any property to, any officer, director or other Affiliate of such Borrower
or Guarantor,  except (i) upon fair and  reasonable  terms no less  favorable to
such  Borrower or Guarantor  than such  Borrower or Guarantor  would obtain in a
comparable arm's length transaction with an unaffiliated person or (ii) pursuant
to the Intercompany Services Agreement; or

     (b)  make  any  payments  (whether  by  dividend,  loan  or  otherwise)  of
management,  consulting or other fees for management or similar services,  or of
any  Indebtedness  owing to any Affiliate of such Borrower or Guarantor,  except
(i) reasonable  compensation  to officers,  employees and directors for services
rendered to such Borrower or Guarantor in the ordinary  course of business,  and
(ii) scheduled  payments pursuant to the Intercompany  Services  Agreement as in
effect on the date hereof.

     9.13 Compliance with ERISA.  Each Borrower and Guarantor  shall,  and shall
cause each of its ERISA  Affiliates  to: (a) maintain each Plan in compliance in
all material  respects with the  applicable  provisions  of ERISA,  the Code and
other  Federal  and State  law;  (b) cause each Plan  which is  qualified  under
Section 401(a) of the Code to maintain such qualification; (c) not terminate any
Pension  Plan so as to incur  any  material  liability  to the  Pension  Benefit
Guaranty  Corporation;   (d)  not  allow  or  suffer  to  exist  any  prohibited
transaction  involving  any Plan or any trust  created  thereunder  which  would
subject such  Borrower,  Guarantor or such ERISA  Affiliate to a material tax or
other  liability on  prohibited  transactions  imposed under Section 4975 of the
Code or  ERISA;  (e) make all  required  contributions  to any Plan  which it is
obligated  to pay under  Section  302 of ERISA,  Section  412 of the Code or the
terms of such  Plan;  (f) not allow or suffer to exist any  accumulated  funding
deficiency,  whether or not waived,  with respect to any such Pension Plan;  (g)
not engage in a transaction  that could be subject to Section 4069 or 4212(c) of
ERISA; or (h) not allow or suffer to exist any occurrence of a reportable  event
or any other event or condition which presents a material risk of termination by
the Pension Benefit  Guaranty  Corporation of any Plan that is a single employer
plan, which  termination  could result in any material  liability to the Pension
Benefit Guaranty Corporation.

     9.14 End of Fiscal  Years;  Fiscal  Quarters.  Each  Borrower and Guarantor
shall,  for  financial   reporting   purposes,   cause  its,  and  each  of  its
Subsidiaries' (a) fiscal years to end on December 31 of each year and (b) fiscal
quarters to end on March 31, June 30, September 30 and December 31 of each year.

     9.15 Change in Business.  The Borrowers and Guarantors  shall not engage in
any business other than the business of the Borrowers and Guarantors on the date
hereof and any business reasonably  related,  ancillary or complimentary to such
businesses.

     9.16 Limitation of Restrictions Affecting  Subsidiaries.  Each Borrower and
Guarantor  shall not,  directly,  or  indirectly,  create or otherwise  cause or
suffer to exist any  encumbrance  or restriction  which  prohibits or limits the
ability of any  Subsidiary of such Borrower or Guarantor to (a) pay dividends or
make  other  distributions  or pay any  Indebtedness  owed to such  Borrower  or
Guarantor or any  Subsidiary of such  Borrower or  Guarantor;  (b) make loans or
advances to such  Borrower or Guarantor or any  Subsidiary  of such  Borrower or
Guarantor,  (c) transfer  any of its  properties  or assets to such  Borrower or
Guarantor or any Subsidiary of such Borrower or Guarantor; or (d) create, incur,
assume or suffer to exist any lien upon any of its property, assets or revenues,
whether  now  owned  or  hereafter   acquired,   other  than   encumbrances  and
restrictions  arising  under (i)  applicable  law,  (ii) this  Agreement,  (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold  interest of such  Borrower or Guarantor or any  Subsidiary  of such
Borrower or Guarantor,  (iv)  customary  restrictions  on  dispositions  of real
property interests found in reciprocal  easement  agreements of such Borrower or
Guarantor or any  Subsidiary of such  Borrower or  Guarantor,  (v) any agreement
relating to permitted  Indebtedness incurred by a Subsidiary of such Borrower or
Guarantor,  and (vi) the extension or continuation of contractual obligations in
existence  on  the  date  hereof;  provided,  that,  any  such  encumbrances  or
restrictions  contained in such extension or continuation  are no less favorable
to Agent and Lenders than those  encumbrances and restrictions under or pursuant
to the contractual obligations so extended or continued.

     9.17 Minimum  EBITDAR.  Borrowers and their  Subsidiaries on a consolidated
basis shall have, at the end of each fiscal quarter set forth below, EBITDAR for
the 12 month period then ending of not less than the following:

<TABLE>
<CAPTION>
                               Period Ending                                       EBITDAR

<S>                                                                              <C>
September 30, 2005                                                               $12,712,000
December 31, 2005                                                                $ 6,170,000
March 31, 2006                                                                   $ 3,242,000
June 30, 2006                                                                    $14,122,000
September 30, 2006                                                               $16,653,000
December 31, 2006                                                                $16,170,000
March 31, 2007                                                                   $16,300,000
June 30, 2007                                                                    $16,600,000
September 30, 2007                                                               $16,900,000
December 31, 2007 and each fiscal quarter ending thereafter                      $17,000,000
</TABLE>

     9.18 Minimum Fixed Charge Coverage Ratio.  Borrowers and their Subsidiaries
on a consolidated  basis shall have, at the end of each calendar  month, a Fixed
Charge  Coverage  Ratio  for the 12 month  period  then  ending of not less than
1.0:1.0.

     9.19 Minimum  Excess  Availability.  Borrowers  shall maintain at all times
Aggregate Suppressed Availability of at least $5,000,000.

     9.20 License Agreements.

     (a) Each  Borrower and  Guarantor  shall (i) observe and perform all of the
material  terms,  covenants,  conditions and provisions of the material  License
Agreements  to which it is a party to be observed  and  performed  by it, at the
times set forth  therein,  if any, (ii) not do,  permit,  suffer or refrain from
doing anything that could reasonably be expected to result in a default under or
breach of any of the terms of any material License Agreement,  (iii) not cancel,
surrender, modify, amend, waive or release any material License Agreement in any
material respect or any term,  provision or right of the licensee  thereunder in
any  material  respect,  or consent to or permit to occur any of the  foregoing;
except,  that,  subject to Section 9.19(b) below, such Borrower or Guarantor may
cancel,  surrender  or release any  material  License  Agreement in the ordinary
course of the  business of such  Borrower or  Guarantor;  provided,  that,  such
Borrower or Guarantor (as the case may be) shall give Agent not less than thirty
(30) days prior  written  notice of its  intention to so cancel,  surrender  and
release any such  material  License  Agreement,  (iv) give Agent prompt  written
notice of any  material  License  Agreement  entered  into by such  Borrower  or
Guarantor after the date hereof, together with a true, correct and complete copy
thereof and such other  information  with respect  thereto as Agent may request,
(v) give Agent prompt written notice of any material  breach of any  obligation,
or any default,  by any party under any material License Agreement,  and deliver
to Agent (promptly upon the receipt thereof by such Borrower or Guarantor in the
case of a notice to such Borrower or Guarantor and concurrently with the sending
thereof in the case of a notice from such  Borrower or Guarantor) a copy of each
notice of  default,  and (vi)  furnish to Agent,  promptly  upon the  reasonable
request of Agent, such information and evidence as Agent may reasonably  require
from time to time concerning the observance,  performance and compliance by such
Borrower or  Guarantor  or the other party or parties  thereto with the material
terms, covenants or provisions of any material License Agreement.

     (b) Each Borrower and Guarantor will either exercise any option to renew or
extend the term of each  material  License  Agreement  to which it is a party in
such  manner as will cause the term of such  material  License  Agreement  to be
effectively  renewed or extended for the period provided by such option and give
prompt  written  notice thereof to Agent or give Agent prior written notice that
such  Borrower or  Guarantor  does not intend to renew or extend the term of any
such  material  License  Agreement or that the term thereof  shall  otherwise be
expiring,  not  less  than  sixty  (60)  days  prior  to the  date  of any  such
non-renewal  or  expiration.  In the event of the  failure of such  Borrower  or
Guarantor  to extend or renew any  material  License  Agreement to which it is a
party,  Agent shall  have,  and is hereby  granted,  the  irrevocable  right and
authority,  at its option,  to renew or extend the term of such material License
Agreement,  whether in its own name and  behalf,  or in the name and behalf of a
designee  or  nominee  of Agent or in the name and  behalf of such  Borrower  or
Guarantor,  as Agent shall  determine at any time that an Event of Default shall
have occurred and be continuing. Upon the occurrence and during the continuation
of an Event of Default,  Agent may, but shall not be required to, perform any or
all of such  obligations of such Borrower or Guarantor  under any of the License
Agreements,  including,  but not  limited to, the payment of any or all sums due
from such  Borrower  or  Guarantor  thereunder.  Any sums so paid by Agent shall
constitute part of the Obligations.

     9.21 Foreign  Assets  Control  Regulations,  Etc. None of the requesting or
borrowing of the Loans or the  requesting  or issuance,  extension or renewal of
any Letter of Credit or the use of the  proceeds of any thereof will violate the
Trading With the Enemy Act (50 USC ss.1 et seq.,  as amended) (the "Trading With
the Enemy Act") or any of the foreign assets  control  regulations of the United
States Treasury  Department (31 C.F.R.,  Subtitle B, Chapter V, as amended) (the
"Foreign Assets Control  Regulations") or any enabling  legislation or executive
order relating thereto (including,  but not limited to (a) Executive order 13224
of September  21, 2001  Blocking  Property  and  Prohibiting  Transactions  With
Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)) (the "Executive Order") and (b) the Uniting and Strengthening America by
Providing  Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Public Law 107-56).  None of  Borrowers  or any of their  Subsidiaries  or
other  Affiliates  is or will  become a  "blocked  person" as  described  in the
Executive  Order,  the Trading with the Enemy Act or the Foreign  Assets Control
Regulations  or engages or will engage in any  dealings or  transactions,  or be
otherwise associated, with any such "blocked person".

     9.22 After Acquired Real Property.  If any Borrower or Guarantor  hereafter
acquires fee simple title to any Real  Property,  fixtures or any other property
that is of the kind or nature described in the Mortgages and such Real Property,
fixtures or other  property is adjacent  to,  contiguous  with or  necessary  or
related  to or used in  connection  with any Real  Property  then  subject  to a
Mortgage,  or if such Real  Property  is not  adjacent  to,  contiguous  with or
related  to or used in  connection  with such Real  Property,  then if such Real
Property,  fixtures or other  property at any  location  (or series of adjacent,
contiguous or related locations,  and regardless of the number of parcels) has a
fair market value in an amount equal to or greater than $100,000 (or if an Event
of Default has occurred and is  continuing,  then  regardless of the fair market
value of such assets), without limiting any other rights of Agent or any Lender,
or duties or  obligations  of any Borrower or  Guarantor,  promptly upon Agent's
request,  such  Borrower  or  Guarantor  shall  execute  and  deliver to Agent a
mortgage,  deed of  trust  or deed to  secure  debt,  as  Agent  may  reasonably
determine,  in form and substance  substantially similar to the Mortgages and as
to any provisions  relating to specific state laws  reasonably  satisfactory  to
Agent and in form  appropriate  for recording in the real estate  records of the
jurisdiction  in which such Real Property or other property is located  granting
to Agent a first and only lien and  mortgage  on and  security  interest in such
Real Property,  fixtures or other property (except as such Borrower or Guarantor
would  otherwise be permitted  to incur  hereunder or under the  Mortgages or as
otherwise consented to in writing by Agent) and such other agreements, documents
and instruments as Agent may reasonably require in connection therewith.

     9.23 Costs and  Expenses.  Borrowers and  Guarantors  shall pay to Agent on
demand all costs, expenses,  filing fees and taxes paid or payable in connection
with the preparation,  negotiation, execution, delivery, recording, syndication,
administration,   collection,  liquidation,   enforcement  and  defense  of  the
Obligations,  Agent's  rights  in the  Collateral,  this  Agreement,  the  other
Financing  Agreements  and  all  other  documents  related  hereto  or  thereto,
including  any  amendments,  supplements  or  consents  which may  hereafter  be
contemplated  (whether or not  executed) or entered  into in respect  hereof and
thereof, including: (a) all costs and expenses of filing or recording (including
Uniform Commercial Code financing  statement filing taxes and fees,  documentary
taxes,  intangibles taxes and mortgage recording taxes and fees, if applicable);
(b) costs and expenses and fees for insurance  premiums,  environmental  audits,
title  insurance  premiums,  surveys,   assessments,   engineering  reports  and
inspections,  appraisal  fees and  search  fees,  background  checks,  costs and
expenses  of  remitting  loan  proceeds,  collecting  checks and other  items of
payment,  and establishing and maintaining the Blocked  Accounts,  together with
Agent's  customary charges and fees with respect thereto;  (c) charges,  fees or
expenses  charged by any bank or issuer in connection with any Letter of Credit;
(d) costs and expenses of preserving and protecting  the  Collateral;  (e) costs
and  expenses  paid or  incurred in  connection  with  obtaining  payment of the
Obligations,  enforcing the security  interests  and liens of Agent,  selling or
otherwise realizing upon the Collateral,  and otherwise enforcing the provisions
of this  Agreement  and the other  Financing  Agreements or defending any claims
made or threatened  against Agent or any Lender arising out of the  transactions
contemplated  hereby and thereby  (including  preparations for and consultations
concerning  any  such  matters);   (f)  all  out-of-pocket  expenses  and  costs
heretofore and from time to time  hereafter  incurred by Agent during the course
of  periodic  field  examinations  of the  Collateral  and  such  Borrower's  or
Guarantor's operations, plus a per diem charge at Agent's then standard rate for
Agent's  examiners in the field and office  (which rate as of the date hereof is
$800  per  person  per  day);  and (g) the  fees and  disbursements  of  counsel
(including legal assistants) to Agent in connection with any of the foregoing.

     9.24  Plan  of  Reorganization.  Borrowers  shall  consummate  the  Plan of
Reorganization  in accordance  with its terms and the terms of the  Confirmation
Order. Unless otherwise agreed to by Agent in writing, Borrowers shall not agree
to, or suffer to occur,  any amendment,  supplement or addition to, or any other
modification of, the Plan of Reorganization or the Conformation Order, except to
the extent  such  amendment,  supplement,  addition  or  modification  would not
reasonably be expected to adversely affect the Agent and Lenders.

     9.25 Further Assurances. At the reasonable request of Agent at any time and
from time to time,  Borrowers  and  Guarantors  shall,  at their  expense,  duly
execute and deliver,  or cause to be duly executed and  delivered,  such further
agreements,  documents and instruments,  and do or cause to be done such further
acts as may be necessary or proper to  evidence,  perfect,  maintain and enforce
the  security  interests  and the  priority  thereof  in the  Collateral  and to
otherwise  effectuate the provisions or purposes of this Agreement or any of the
other  Financing  Agreements.  Agent  may at any  time  and  from  time  to time
reasonably  request a  certificate  from an officer of any Borrower or Guarantor
representing that all conditions  precedent to the making of Loans and providing
Letters of Credit contained  herein are satisfied.  In the event of such request
by Agent,  Agent and Lenders may, at Agent's  option,  cease to make any further
Loans or provide any further  Letters of Credit  until Agent has  received  such
certificate  and,  in  addition,  Agent  has  reasonably  determined  that  such
conditions are satisfied.

     SECTION 10. EVENTS OF DEFAULT AND REMEDIES

     10.1 Events of Default.  The  occurrence or existence of any one or more of
the  following  events  are  referred  to  herein  individually  as an "Event of
Default", and collectively as "Events of Default":

     (a) (i) any Borrower fails to pay any of the  Obligations  when due or (ii)
any Borrower or  Guarantor  fails to perform any of the  covenants  contained in
Sections  9.1, 9.2, 9.5 through 9.12 and 9.17 through 9.25 or (iii) any Borrower
or  Guarantor  fails to  perform  any of the  terms,  covenants,  conditions  or
provisions  contained in this Agreement or any of the other Financing Agreements
other than those described in Sections 10.1(a)(i) and 10.1(a)(ii) above and such
failure shall continue for ten (10) days;

     (b) any representation,  warranty or statement of fact made by any Borrower
or Guarantor to Agent in this Agreement,  the other Financing  Agreements or any
other written agreement,  schedule,  confirmatory  assignment or otherwise shall
when made or deemed made be false or misleading in any material respect;

     (c) any Guarantor  revokes or terminates or purports to revoke or terminate
any of the terms, covenants, conditions or provisions of any guarantee, or other
agreement of such party in favor of Agent or any Lender;

     (d) any judgment for the payment of money is rendered  against any Borrower
or  Guarantor  in excess of $750,000 in any one case or in excess of $750,000 in
the  aggregate  (to the extent not  covered by  insurance  where the insurer has
assumed   responsibility   in  writing  for  such  judgment)  and  shall  remain
undischarged  or  unvacated  for a period  in  excess  of  thirty  (30)  days or
execution  shall at any time not be  effectively  stayed,  or any judgment other
than for the  payment  of  money,  or  injunction,  attachment,  garnishment  or
execution is rendered against any Borrower or Guarantor or any of the Collateral
having a value in excess of $750,000;

     (e) any  Guarantor  (being a  natural  person or a  general  partner  of an
Guarantor which is a partnership) dies or any Borrower or Guarantor,  which is a
partnership,  limited  liability  company,  limited  liability  partnership or a
corporation, dissolves or suspends or discontinues doing business;

     (f) any  Borrower  or  Guarantor  makes an  assignment  for the  benefit of
creditors,  makes or sends  notice of a bulk  transfer or calls a meeting of its
creditors or principal  creditors in connection  with a moratorium or adjustment
of the Indebtedness due to them;

     (g) a case or proceeding  under the bankruptcy laws of the United States of
America  now or  hereafter  in effect or under any  insolvency,  reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any  jurisdiction  now or hereafter  in effect  (whether at law or in equity) is
filed  against any Borrower or Guarantor or all or any  substantial  part of its
properties and such petition or application is not dismissed  within thirty (30)
days after the date of its filing or any  Borrower or  Guarantor  shall file any
answer admitting or not contesting such petition or application or indicates its
consent to, acquiescence in or approval of, any such action or proceeding or the
relief requested is granted sooner;

     (h) a case or proceeding  under the bankruptcy laws of the United States of
America  now or  hereafter  in effect or under any  insolvency,  reorganization,
receivership, readjustment of debt, dissolution or liquidation law or statute of
any  jurisdiction  now or  hereafter  in effect  (whether at a law or equity) is
filed by any  Borrower or Guarantor  or for all or any  substantial  part of its
property;

     (i) any default in respect of any Indebtedness of any Borrower or Guarantor
(other than Indebtedness owing to Agent and Lenders  hereunder),  in any case in
an amount  in excess of  $750,000,  which  default  continues  for more than the
applicable cure period, if any, with respect thereto;

     (j)  any  material  provision  hereof  or of  any of  the  other  Financing
Agreements shall for any reason cease to be valid,  binding and enforceable with
respect to any  Borrower  or  Guarantor  in  accordance  with its terms,  or any
Borrower or Guarantor shall challenge the enforceability  hereof or thereof,  or
shall  assert  in  writing,  that any  provision  hereof  or of any of the other
Financing  Agreements  has ceased to be or is  otherwise  not valid,  binding or
enforceable in accordance with its terms, or any security  interest provided for
herein or in any of the other Financing Agreements shall cease to be a valid and
perfected first priority security interest in any of the Collateral purported to
be subject thereto (except as otherwise permitted herein or therein);

     (k) an ERISA  Event shall occur  which  results in or could  reasonably  be
expected to result in liability of any Borrower in an aggregate amount in excess
of $750,000;

     (l) any Change of Control;

     (m)  the  indictment  by  any  Governmental  Authority,  or  as  Agent  may
reasonably  and in  good  faith  determine,  the  threatened  indictment  by any
Governmental  Authority  of any  Borrower or  Guarantor  of which any  Borrower,
Guarantor  or Agent  receives  notice,  in either  case,  as to which there is a
reasonable  possibility  of  an  adverse   determination,   in  the  good  faith
determination  of  Agent,  under  any  criminal  statute,   or  commencement  or
threatened  commencement of criminal or civil proceedings  against such Borrower
or Guarantor, pursuant to which statute or proceedings the penalties or remedies
sought or available  include  forfeiture of (i) any of the  Collateral  having a
value in excess  of  $750,000  or (ii) any other  property  of any  Borrower  or
Guarantor which is necessary or material to the conduct of its business;

     (n) there shall be a material  adverse  change in the  business,  assets or
prospects of any Borrower or Guarantor after the date hereof;

(o) there shall be an Event of Default under any of the other Financing
Agreements; or

     (p)  the  Peoria  Intercreditor   Agreement,   the  Trustee   Intercreditor
Agreement, the Indenture Intercreditor Agreement or any subordination provisions
therein or under the Indenture shall become unenforceable; or

     (q) there shall be a material  violation of the Confirmation  Order or Plan
of Reorganization. 10.2 Remedies.

     (a) At any time an Event of Default has occurred and is  continuing,  Agent
and Lenders shall have all rights and remedies  provided in this Agreement,  the
other  Financing  Agreements,  the UCC and other  applicable  law,  all of which
rights  and  remedies  may be  exercised  without  notice to or  consent  by any
Borrower or  Guarantor,  except as such notice or consent is expressly  provided
for  hereunder or required by  applicable  law. All rights,  remedies and powers
granted  to Agent  and  Lenders  hereunder,  under  any of the  other  Financing
Agreements,  the UCC or other applicable law, are cumulative,  not exclusive and
enforceable, in Agent's discretion, alternatively, successively, or concurrently
on any one or more occasions, and shall include,  without limitation,  the right
to apply  to a court  of  equity  for an  injunction  to  restrain  a breach  or
threatened  breach by any Borrower or Guarantor of this  Agreement or any of the
other Financing Agreements.  Subject to Section 12 hereof, Agent may, and at the
direction of the Required Lenders shall, at any time or times,  proceed directly
against any  Borrower or  Guarantor  to collect the  Obligations  without  prior
recourse to the Collateral.

     (b) Without limiting the generality of the foregoing,  at any time an Event
of Default has  occurred and is  continuing,  Agent may, at its option and shall
upon the direction of the Required  Lenders,  (i) upon notice to  Administrative
Borrower, accelerate the payment of all Obligations and demand immediate payment
thereof to Agent for itself and the benefit of Lenders (provided, that, upon the
occurrence  of any Event of Default  described in Sections  10.1(g) and 10.1(h),
all Obligations shall  automatically  become  immediately due and payable),  and
(ii) terminate the  Commitments  whereupon the obligation of each Lender to make
any Loan and an issuer to issue any Letter of Credit shall immediately terminate
(provided,  that,  upon the  occurrence  of any Event of  Default  described  in
Sections  10.1(g) and 10.1(h),  the Commitments and any other  obligation of the
Agent or a Lender hereunder shall automatically terminate).

     (c) Without  limiting  the  foregoing,  at any time an Event of Default has
occurred and is  continuing,  Agent may, in its  discretion  (i) with or without
judicial process or the aid or assistance of others,  enter upon any premises on
or in which any of the  Collateral  may be located  and take  possession  of the
Collateral  or  complete  processing,  manufacturing  and  repair  of all or any
portion of the Collateral, (ii) require any Borrower or Guarantor, at Borrowers'
expense,  to  assemble  and  make  available  to  Agent  any  part or all of the
Collateral at any place and time designated by Agent, (iii) collect,  foreclose,
receive,  appropriate,  setoff and  realize  upon any and all  Collateral,  (iv)
remove any or all of the  Collateral  from any  premises on or in which the same
may be located  for the  purpose of  effecting  the sale,  foreclosure  or other
disposition thereof or for any other purpose, (v) sell, lease, transfer, assign,
deliver or otherwise dispose of any and all Collateral  (including entering into
contracts  with  respect  thereto,  public  or  private  sales at any  exchange,
broker's  board, at any office of Agent or elsewhere) at such prices or terms as
Agent may deem reasonable,  for cash, upon credit or for future  delivery,  with
the Agent having the right to purchase  the whole or any part of the  Collateral
at any such  public  sale,  all of the  foregoing  being  free from any right or
equity of  redemption  of any  Borrower or  Guarantor,  which right or equity of
redemption is hereby  expressly  waived and released by Borrowers and Guarantors
and/or (vi) terminate this Agreement. If any of the Collateral is sold or leased
by Agent upon credit terms or for future delivery,  the Obligations shall not be
reduced as a result  thereof  until  payment  therefor is finally  collected  by
Agent.  If notice of disposition of Collateral is required by law, ten (10) days
prior notice by Agent to Administrative  Borrower designating the time and place
of any public sale or the time after which any  private  sale or other  intended
disposition of Collateral is to be made, shall be deemed to be reasonable notice
thereof and Borrowers and Guarantors waive any other notice.  In the event Agent
institutes  an  action  to  recover  any  Collateral  or seeks  recovery  of any
Collateral by way of prejudgment  remedy, each Borrower and Guarantor waives the
posting of any bond which might  otherwise be required.  At any time an Event of
Default  exists  or  has  occurred  and is  continuing,  upon  Agent's  request,
Borrowers will either,  as Agent shall specify,  furnish cash  collateral to the
issuer to be used to secure and fund the reimbursement obligations to the issuer
in connection  with any Letter of Credit  Obligations or furnish cash collateral
to Agent for the Letter of Credit Obligations.  Such cash collateral shall be in
the amount equal to one hundred five (105%)  percent of the amount of the Letter
of Credit  Obligations  plus the  amount  of any fees and  expenses  payable  in
connection  therewith  through  the  end of the  latest  expiration  date of the
Letters of Credit giving rise to such Letter of Credit Obligations.

     (d) At any time or  times  that an Event of  Default  has  occurred  and is
continuing, Agent may, in its discretion,  enforce the rights of any Borrower or
Guarantor  against any account  debtor,  secondary  obligor or other  obligor in
respect  of any of the  Accounts  or other  Receivables.  Without  limiting  the
generality of the foregoing, Agent may, in its discretion, at such time or times
(i) notify any or all account debtors,  secondary  obligors or other obligors in
respect thereof that the Receivables  have been assigned to Agent and that Agent
has a security interest therein and Agent may direct any or all account debtors,
secondary obligors and other obligors to make payment of Receivables directly to
Agent,  (ii)  extend the time of payment  of,  compromise,  settle or adjust for
cash,  credit,  return  of  merchandise  or  otherwise,  and upon  any  terms or
conditions,  any  and all  Receivables  or  other  obligations  included  in the
Collateral and thereby  discharge or release the account debtor or any secondary
obligors  or other  obligors in respect  thereof  without  affecting  any of the
Obligations, (iii) demand, collect or enforce payment of any Receivables or such
other  obligations,  but without any duty to do so, and Agent and Lenders  shall
not be liable for any failure to collect or enforce the payment  thereof nor for
the  negligence  of its agents or attorneys  with respect  thereto and (iv) take
whatever  other action Agent may deem  necessary or desirable for the protection
of its  interests  and the  interests  of Lenders.  At any time that an Event of
Default has occurred and is  continuing,  at Agent's  request,  all invoices and
statements  sent to any account  debtor  shall state that the  Accounts and such
other  obligations have been assigned to Agent and are payable directly and only
to Agent and Borrowers and  Guarantors  shall deliver to Agent such originals of
documents  evidencing  the sale and  delivery  of  goods or the  performance  of
services  giving  rise to any  Accounts as Agent may  require.  In the event any
account  debtor  returns  Inventory when an Event of Default has occurred and is
continuing,  Borrowers shall, upon Agent's request,  hold the returned Inventory
in trust for  Agent,  segregate  all  returned  Inventory  from all of its other
property,  dispose  of  the  returned  Inventory  solely  according  to  Agent's
instructions,  and not issue any credits,  discounts or allowances  with respect
thereto without Agent's prior written consent.

     (e) To the extent that applicable law imposes duties on Agent or any Lender
to exercise remedies in a commercially reasonable manner (which duties cannot be
waived under such law), each Borrower and Guarantor acknowledges and agrees that
it is not commercially unreasonable for Agent or any Lender (i) to fail to incur
expenses  reasonably  deemed  significant  by Agent  or any  Lender  to  prepare
Collateral  for  disposition  or  otherwise  to complete raw material or work in
process into finished goods or other finished products for disposition,  (ii) to
fail to obtain third party  consents for access to Collateral to be disposed of,
or to obtain or, if not required by other law, to fail to obtain consents of any
Governmental Authority or other third party for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise  collection
remedies against account debtors,  secondary obligors or other persons obligated
on  Collateral  or to remove  liens or  encumbrances  on or any  adverse  claims
against Collateral, (iv) to exercise collection remedies against account debtors
and other  persons  obligated  on  Collateral  directly  or  through  the use of
collection  agencies  and  other  collection   specialists,   (v)  to  advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized  nature, (vi) to contact other
persons,  whether or not in the same business as any Borrower or Guarantor,  for
expressions of interest in acquiring all or any portion of the Collateral, (vii)
to hire one or more  professional  auctioneers  to assist in the  disposition of
Collateral,  whether or not the collateral is of a specialized nature, (viii) to
dispose of Collateral by utilizing  Internet  sites that provide for the auction
of assets of the types  included in the  Collateral or that have the  reasonable
capability  of doing so, or that  match  buyers and  sellers of assets,  (ix) to
dispose of assets in  wholesale  rather  than  retail  markets,  (x) to disclaim
disposition  warranties,  (xi) to purchase  insurance or credit  enhancements to
insure Agent or Lenders  against  risks of loss,  collection or  disposition  of
Collateral  or to  provide  to Agent or  Lenders a  guaranteed  return  from the
collection  or  disposition  of  Collateral,  or  (xii)  to  the  extent  deemed
appropriate  by Agent,  to obtain  the  services  of other  brokers,  investment
bankers,  consultants and other  professionals to assist Agent in the collection
or  disposition  of  any  of  the   Collateral.   Each  Borrower  and  Guarantor
acknowledges  that the  purpose of this  Section  is to  provide  non-exhaustive
indications  of what  actions or  omissions  by Agent or any Lender would not be
commercially  unreasonable  in the  exercise  by Agent or any Lender of remedies
against  the  Collateral  and that other  actions or  omissions  by Agent or any
Lender shall not be deemed  commercially  unreasonable  solely on account of not
being indicated in this Section.  Without  limitation of the foregoing,  nothing
contained in this Section shall be construed to grant any rights to any Borrower
or  Guarantor  or to impose any  duties on Agent or Lenders  that would not have
been granted or imposed by this Agreement or by applicable law in the absence of
this Section.

     (f) For the purpose of enabling  Agent to exercise  the rights and remedies
hereunder,  each  Borrower and Guarantor  hereby grants to Agent,  to the extent
assignable,  an irrevocable,  non-exclusive  license (exercisable at any time an
Event of Default shall have occurred and for so long as the same is  continuing)
without  payment of royalty or other  compensation to any Borrower or Guarantor,
to use,  assign,  license or sublicense  any of the  trademarks,  service-marks,
trade names,  business names, trade styles,  designs,  logos and other source of
business identifiers and other Intellectual Property and general intangibles now
owned or hereafter acquired by any Borrower or Guarantor,  wherever the same may
be located,  including in such license  reasonable  access to all media in which
any of the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof.

     (g) At any time an Event of Default has occurred and is  continuing,  Agent
may apply the cash  proceeds of Collateral  actually  received by Agent from any
sale,  lease,  foreclosure or other  disposition of the Collateral to payment of
the  Obligations,  in whole or in part and in accordance  with the terms hereof,
whether or not then due or may hold such  proceeds  as cash  collateral  for the
Obligations.  Borrowers and Guarantors  shall remain liable to Agent and Lenders
for the payment of any deficiency with interest at the highest rate provided for
herein  and all costs and  expenses  of  collection  or  enforcement,  including
attorneys' fees and expenses.

     (h) Without  limiting the  foregoing,  upon the  occurrence  and during the
continuance  of an Event of  Default,  (i) Agent and  Lenders  may,  at  Agent's
option,  and upon the  occurrence of an Event of Default at the direction of the
Required  Lenders,  Agent and Lenders shall,  without  notice,  (A) cease making
Loans or  arranging  for  Letters of Credit or reduce the  lending  formulas  or
amounts  of Loans and  Letters  of Credit  available  to  Borrowers  and/or  (B)
terminate  any  provision of this  Agreement  providing  for any future Loans or
Letters of Credit to be made by Agent and  Lenders to  Borrowers  and (ii) Agent
may,  at its  option,  establish  such  Reserves  as Agent  determines,  without
limitation or restriction,  notwithstanding  anything to the contrary  contained
herein.

     SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

     (a) The validity,  interpretation and enforcement of this Agreement and the
other  Financing  Agreements  (except as  otherwise  provided  therein)  and any
dispute arising out of the relationship  between the parties hereto,  whether in
contract,  tort, equity or otherwise,  shall be governed by the internal laws of
the State of Illinois but excluding any  principles of conflicts of law or other
rule of law that  would  cause the  application  of the law of any  jurisdiction
other than the laws of the State of Illinois.

     (b) Borrowers, Guarantors, Agent and Lenders irrevocably consent and submit
to the non-exclusive jurisdiction of the Circuit Courts of Cook County, Illinois
and the United  States  District  Court for the  Northern  District of Illinois,
whichever  Agent may elect,  and waive any objection based on venue or forum non
conveniens  with respect to any action  instituted  therein  arising  under this
Agreement or any of the other Financing  Agreements or in any way connected with
or related or  incidental  to the  dealings of the parties  hereto in respect of
this  Agreement or any of the other  Financing  Agreements  or the  transactions
related  hereto or  thereto,  in each case  whether now  existing  or  hereafter
arising, and whether in contract,  tort, equity or otherwise, and agree that any
dispute  with  respect  to any such  matters  shall be heard  only in the courts
described above (except that Agent and Lenders shall have the right to bring any
action or proceeding  against any Borrower or Guarantor or its or their property
in the  courts  of  any  other  jurisdiction  which  Agent  deems  necessary  or
appropriate  in order to realize on the  Collateral or to otherwise  enforce its
rights against any Borrower or Guarantor or its or their property).

     (c) Each Borrower and Guarantor  hereby waives personal  service of any and
all process upon it and consents that all such service of process may be made by
certified  mail  (return  receipt  requested)  directed to its address set forth
herein and service so made shall be deemed to be  completed  five (5) days after
the same shall have been so deposited in the U.S. mails,  or, at Agent's option,
by service upon any Borrower or Guarantor (or Administrative  Borrower on behalf
of such Borrower or Guarantor) in any other manner  provided  under the rules of
any such courts.

     (d) BORROWERS,  GUARANTORS,  AGENT AND LENDERS EACH HEREBY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION ARISING UNDER
THIS AGREEMENT OR ANY OF THE OTHER FINANCING  AGREEMENTS OR IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL  TO THE DEALINGS OF THE PARTIES  HERETO IN RESPECT
OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING  AGREEMENTS OR THE  TRANSACTIONS
RELATED  HERETO OR  THERETO  IN EACH CASE  WHETHER  NOW  EXISTING  OR  HEREAFTER
ARISING,  AND  WHETHER  IN  CONTRACT,  TORT,  EQUITY  OR  OTHERWISE.  BORROWERS,
GUARANTORS,  AGENT AND LENDERS  EACH HEREBY  AGREES AND  CONSENTS  THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT ANY  BORROWER,  ANY  GUARANTOR,  AGENT OR ANY LENDER MAY FILE AN
ORIGINAL  COUNTERPART  OF A COPY OF THIS  AGREEMENT  WITH ANY  COURT AS  WRITTEN
EVIDENCE OF THE  CONSENT OF THE  PARTIES  HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY.

     (e) Agent and  Lenders  shall not have any  liability  to any  Borrower  or
Guarantor (whether in tort,  contract,  equity or otherwise) for losses suffered
by such Borrower or Guarantor in connection with,  arising out of, or in any way
related to the transactions or relationships  contemplated by this Agreement, or
any act, omission or event occurring in connection  herewith,  unless and to the
extent that it is  determined  by a final and  non-appealable  judgment or court
order binding on Agent and such Lender,  that the losses were the result of acts
or omissions  constituting gross negligence or willful  misconduct.  In any such
litigation, Agent and Lenders shall be entitled to the benefit of the rebuttable
presumption  that it acted in good faith and with the exercise of ordinary  care
in the  performance  by it of the terms of this  Agreement.  Each  Borrower  and
Guarantor:  (i) certifies that neither Agent, any Lender nor any representative,
agent  or  attorney  acting  for  or on  behalf  of  Agent  or  any  Lender  has
represented,  expressly or  otherwise,  that Agent and Lenders would not, in the
event of  litigation,  seek to enforce any of the waivers  provided  for in this
Agreement or any of the other Financing Agreements and (ii) acknowledges that in
entering  into this  Agreement  and the other  Financing  Agreements,  Agent and
Lenders are relying upon, among other things, the waivers and certifications set
forth in this Section 11.1 and elsewhere herein and therein.

     11.2 Waiver of Notices. Each Borrower and Guarantor hereby expressly waives
demand,  presentment,  protest and notice of protest and notice of dishonor with
respect to any and all instruments and chattel paper,  included in or evidencing
any of the  Obligations  or the  Collateral,  and any and all other  demands and
notices of any kind or nature  whatsoever with respect to the  Obligations,  the
Collateral and this Agreement, except such as are expressly provided for herein.
No notice to or demand on any  Borrower or  Guarantor  which Agent or any Lender
may elect to give shall  entitle  such  Borrower  or  Guarantor  to any other or
further notice or demand in the same, similar or other circumstances.

     11.3 Amendments and Waivers.

     (a) Neither this Agreement nor any other Financing  Agreement nor any terms
hereof or thereof may be amended,  waived,  discharged or terminated unless such
amendment,  waiver,  discharge or  termination is in writing signed by Agent and
the Required  Lenders or at Agent's option,  by Agent with the  authorization or
consent of the Required  Lenders,  and as to  amendments to any of the Financing
Agreements  (other than with respect to any provision of Section 12 hereof),  by
any Borrower and such  amendment,  waiver,  discharger or  termination  shall be
effective  and binding as to all Lenders only in the  specific  instance and for
the specific purpose for which given; except,  that, no such amendment,  waiver,
discharge or termination shall:

     (i) reduce the  interest  rate or any fees or extend the time of payment of
principal,  interest or any fees or reduce the  principal  amount of any Loan or
Letters of Credit,  in each case  without the  consent of each  Lender  directly
affected thereby,

     (ii) increase the  Commitment of any Lender over the amount thereof then in
effect or  provided  hereunder,  in each case  without the consent of the Lender
directly affected thereby,

     (iii) release any  Collateral  (except as expressly  required  hereunder or
under any of the other  Financing  Agreements  or  applicable  law and except as
permitted under Section 12.11(b)  hereof),  without the consent of Agent and all
of Lenders,

     (iv) reduce any percentage specified in the definition of Required Lenders,
without the consent of Agent and all of Lenders,

     (v) consent to the  assignment  or transfer by any Borrower or Guarantor of
any of their rights and obligations under this Agreement, without the consent of
Agent and all of Lenders,

     (vi) amend, modify or waive any terms of this Section 11.3 hereof,  without
the consent of Agent and all of Lenders, or

     (vii) increase the advance rates constituting part of the Borrowing Base or
increase the  Inventory  Loan Limit or the Letter of Credit Limit from those set
forth in this Agreement as of the date hereof,  without the consent of Agent and
all of Lenders.

     (b) Agent and Lenders shall not, by any act,  delay,  omission or otherwise
be deemed to have  expressly  or  impliedly  waived any of its or their  rights,
powers  and/or  remedies  unless such  waiver  shall be in writing and signed as
provided  herein.  Any such  waiver  shall  be  enforceable  only to the  extent
specifically  set forth  therein.  A waiver by Agent or any Lender of any right,
power and/or  remedy on any one  occasion  shall not be construed as a bar to or
waiver of any such right,  power  and/or  remedy which Agent or any Lender would
otherwise have on any future occasion, whether similar in kind or otherwise.

     (c)  Notwithstanding  anything to the contrary contained in Section 11.3(a)
above, in connection with any amendment,  waiver,  discharge or termination,  in
the event that any  Lender  whose  consent  thereto  is  required  shall fail to
consent or fail to consent in a timely  manner (such  Lender  being  referred to
herein as a  "Non-Consenting  Lender"),  but the consent of any other Lenders to
such amendment,  waiver, discharge or termination that is required are obtained,
if any, then Wachovia shall have the right, but not the obligation,  at any time
thereafter, and upon the exercise by Wachovia of such right, such Non-Consenting
Lender shall have the  obligation,  to sell,  assign and transfer to Wachovia or
such  Eligible  Transferee  as Wachovia  may  specify,  the  Commitment  of such
Non-Consenting Lender and all rights and interests of such Non-Consenting Lender
pursuant  thereto.   Wachovia  shall  provide  the  Non-Consenting   Lender  and
Administrative  Borrower with prior written notice of its intent to exercise its
right  under this  Section,  which  notice  shall  specify on date on which such
purchase and sale shall occur.  Such  purchase and sale shall be pursuant to the
terms  of  an  Assignment  and  Acceptance  (whether  or  not  executed  by  the
Non-Consenting  Lender),  except  that on the date of such  purchase  and  sale,
Congress,  or such Eligible Transferee  specified by Congress,  shall pay to the
Non-Consenting  Lender  (except as Wachovia and such  Non-Consenting  Lender may
otherwise  agree) the amount  equal to: (i) the  principal  balance of the Loans
held by the Non-Consenting Lender outstanding as of the close of business on the
business day immediately preceding the effective date of such purchase and sale,
plus (ii) amounts  accrued and unpaid in respect of interest and fees payable to
the Non-Consenting Lender to the effective date of the purchase (but in no event
shall the  Non-Consenting  Lender be deemed  entitled  to any early  termination
fee),  minus (iii) the amount of the closing fee received by the  Non-Consenting
Lender pursuant to the terms hereof or of any of the other Financing  Agreements
multiplied  by the  fraction,  the  numerator  of which is the  number of months
remaining in the then current term of the Credit Facility and the denominator of
which is the number of months in the then current term  thereof.  Such  purchase
and sale shall be  effective  on the date of the  payment of such  amount to the
Non-Consenting  Lender and the  Commitment  of the  Non-Consenting  Lender shall
terminate on such date.

     (d) The  consent of Agent shall be required  for any  amendment,  waiver or
consent  affecting  the rights or duties of Agent  hereunder or under any of the
other Financing Agreements,  in addition to the consent of the Lenders otherwise
required  by this  Section  and  the  exercise  by  Agent  of any of its  rights
hereunder  with respect to Reserves or Eligible  Accounts or Eligible  Inventory
shall not be deemed an  amendment  to the  advance  rates  provided  for in this
Section  11.3.  Notwithstanding  anything to the  contrary  contained in Section
11.3(a) above,  (i) in the event that Agent shall agree that any items otherwise
required  to be  delivered  to Agent as a  condition  of the  initial  Loans and
Letters of Credit  hereunder may be delivered after the date hereof,  Agent may,
in its  discretion,  agree to extend the date for delivery of such items or take
such other  action as Agent may deem  appropriate  as a result of the failure to
receive such items as Agent may determine or may waive any Event of Default as a
result of the failure to receive such items, in each case without the consent of
any Lender and (ii) Agent may consent to any change in the type of organization,
jurisdiction of organization or other legal structure of any Borrower, Guarantor
or any of their  Subsidiaries  and amend the terms hereof or of any of the other
Financing  Agreements  as may be  necessary  or  desirable  to reflect  any such
change, in each case without the approval of any Lender.

     (e) The consent of Agent and any Lender, any Affiliate of any Lender or any
other  financial  institution  acceptable to Agent,  as the case may be, that is
party to a Hedge  Agreement at such time shall be required for any  amendment to
the priority of payment of  Obligations  arising  under or pursuant to any Hedge
Agreements of a Borrower or Guarantor as set forth in Section 6.4(a) hereof.

     11.4 Waiver of Counterclaims. Each Borrower and Guarantor waives all rights
to interpose  any claims,  deductions,  setoffs or  counterclaims  of any nature
(other then compulsory  counterclaims)  in any action or proceeding with respect
to this  Agreement,  the  Obligations,  the  Collateral  or any  matter  arising
therefrom or relating hereto or thereto.

     11.5  Indemnification.  Each  Borrower  and  Guarantor  shall,  jointly and
severally,  indemnify  and hold  Agent and each  Lender,  and  their  respective
officers,   directors,  agents,  employees,   advisors  and  counsel  and  their
respective  Affiliates (each such person being an  "Indemnitee"),  harmless from
and against any and all losses, claims, damages, liabilities,  costs or expenses
(including  attorneys'  fees and expenses)  imposed on,  incurred by or asserted
against any of them in connection with any litigation,  investigation,  claim or
proceeding  commenced or  threatened  related to the  negotiation,  preparation,
execution,  delivery,   enforcement,   performance  or  administration  of  this
Agreement,  any other  Financing  Agreements,  or any  undertaking or proceeding
related to any of the  transactions  contemplated  hereby or any act,  omission,
event or transaction  related or attendant  thereto,  including  amounts paid in
settlement,  court  costs,  and the fees and  expenses  of counsel  except  that
Borrowers and Guarantors  shall not have any obligation  under this Section 11.5
to indemnify an Indemnitee with respect to a matter covered hereby to the extent
resulting from the gross  negligence or wilful  misconduct of such Indemnitee as
determined  pursuant to a final,  non-appealable  order of a court of  competent
jurisdiction (but without limiting the obligations of Borrowers or Guarantors as
to any other Indemnitee).  To the extent that the undertaking to indemnify,  pay
and hold  harmless  set forth in this  Section may be  unenforceable  because it
violates  any law or  public  policy,  Borrowers  and  Guarantors  shall pay the
maximum  portion which it is permitted to pay under  applicable law to Agent and
Lenders in satisfaction of indemnified matters under this Section. To the extent
permitted by applicable  law, no Borrower or Guarantor  shall  assert,  and each
Borrower and Guarantor hereby waives,  any claim against any Indemnitee,  on any
theory of liability,  for special,  indirect,  consequential or punitive damages
(as opposed to direct or actual damages)  arising out of, in connection with, or
as a result of, this  Agreement,  any of the other  Financing  Agreements or any
undertaking  or  transaction  contemplated  hereby.  All  amounts due under this
Section  shall be payable  within  five (5) days  after  demand.  The  foregoing
indemnity  shall survive the payment of the  Obligations  and the termination or
non-renewal of this Agreement.

     SECTION 12. THE AGENT

     12.1   Appointment,   Powers  and  Immunities.   Each  Lender   irrevocably
designates, appoints and authorizes Wachovia to act as Agent hereunder and under
the other Financing Agreements with such powers as are specifically delegated to
Agent by the  terms of this  Agreement  and of the other  Financing  Agreements,
together with such other powers as are reasonably incidental thereto.  Agent (a)
shall have no duties or  responsibilities  except those  expressly  set forth in
this Agreement and in the other Financing Agreements, and shall not by reason of
this  Agreement or any other  Financing  Agreement be a trustee or fiduciary for
any  Lender;  (b)  shall  not  be  responsible  to  Lenders  for  any  recitals,
statements,  representations or warranties contained in this Agreement or in any
of the other  Financing  Agreements,  or in any  certificate  or other  document
referred to or provided for in, or received by any of them under, this Agreement
or any other Financing  Agreement,  or for the value,  validity,  effectiveness,
genuineness,  enforceability  or  sufficiency  of this  Agreement  or any  other
Financing  Agreement or any other document referred to or provided for herein or
therein or for any failure by any Borrower or any  Guarantor or any other Person
to perform any of its obligations hereunder or thereunder;  and (c) shall not be
responsible  to  Lenders  for any  action  taken  or  omitted  to be taken by it
hereunder or under any other Financing  Agreement or under any other document or
instrument  referred  to or  provided  for herein or  therein  or in  connection
herewith or therewith, except for its own gross negligence or willful misconduct
as  determined  by a  final  non-appealable  judgment  of a court  of  competent
jurisdiction.  Agent may employ  agents and  attorneys  in fact and shall not be
responsible  for the negligence or misconduct of any such agents or attorneys in
fact  selected  by it in good  faith.  Agent may deem and treat the payee of any
note as the  holder  thereof  for all  purposes  hereof  unless  and  until  the
assignment  thereof  pursuant to an  agreement  (if and to the extent  permitted
herein) in form and substance satisfactory to Agent shall have been delivered to
and acknowledged by Agent.

     12.2  Reliance  by  Agent.  Agent  shall  be  entitled  to  rely  upon  any
certification,   notice  or  other  communication   (including  any  thereof  by
telephone,  telecopy, telex, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper  Person or
Persons,   and  upon  advice  and  statements  of  legal  counsel,   independent
accountants and other experts selected by Agent. As to any matters not expressly
provided for by this Agreement or any other Financing Agreement,  Agent shall in
all cases be fully protected in acting, or in refraining from acting,  hereunder
or thereunder in accordance with  instructions  given by the Required Lenders or
all of Lenders as is required in such  circumstance,  and such  instructions  of
such Agents and any action  taken or failure to act  pursuant  thereto  shall be
binding on all Lenders.

     12.3 Events of Default.

     (a) Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or an Event of Default or other failure of a condition precedent to
the Loans and Letters of Credit  hereunder,  unless and until Agent has received
written notice from a Lender, or a Borrower  specifying such Event of Default or
any unfulfilled  condition precedent,  and stating that such notice is a "Notice
of Default or Failure of  Condition".  In the event that Agent  receives  such a
Notice of Default  or  Failure of  Condition,  Agent  shall give  prompt  notice
thereof to the Lenders.  Agent shall  (subject to Section 12.7) take such action
with respect to any such Event of Default or failure of  condition  precedent as
shall be directed by the  Required  Lenders to the extent  provided  for herein;
provided,  that,  unless and until Agent shall have  received  such  directions,
Agent may (but shall not be  obligated  to) take such  action,  or refrain  from
taking  such  action,  with  respect to or by reason of such Event of Default or
failure of condition precedent,  as it shall deem advisable in the best interest
of Lenders.  Without limiting the foregoing,  and notwithstanding the occurrence
and  continuance  of an Event of Default or any other  failure to satisfy any of
the  conditions  precedent  set  forth in  Section  4 of this  Agreement  to the
contrary,  unless and until otherwise  directed by the Required  Lenders,  Agent
may, but shall have no obligation to,  continue to make Loans and issue or cause
to be issued any Letter of Credit for the  ratable  account  and risk of Lenders
from time to time if Agent  believes  making such Loans or issuing or causing to
be issued such Letter of Credit is in the best interests of Lenders.

     (b) Except with the prior written consent of Agent, no Lender may assert or
exercise  any  enforcement  right or remedy in respect  of the Loans,  Letter of
Credit Obligations or other Obligations, as against any Borrower or Guarantor or
any of the Collateral or other property of any Borrower or Guarantor.

     12.4 Wachovia in its  Individual  Capacity.  With respect to its Commitment
and the Loans  made and  Letters  of Credit  issued or caused to be issued by it
(and any  successor  acting as  Agent),  so long as  Wachovia  shall be a Lender
hereunder,  it shall  have the same  rights and  powers  hereunder  as any other
Lender and may exercise the same as though it were not acting as Agent,  and the
term  "Lender"  or  "Lenders"  shall,  unless the context  otherwise  indicates,
include Wachovia in its individual  capacity as Lender hereunder.  Wachovia (and
any successor acting as Agent) and its Affiliates may (without having to account
therefor to any Lender) lend money to, make  investments in and generally engage
in any  kind  of  business  with  Borrowers  (and  any of  its  Subsidiaries  or
Affiliates)  as if it were not acting as Agent,  and Wachovia and its Affiliates
may accept fees and other  consideration  from any Borrower or Guarantor and any
of its  Subsidiaries  and  Affiliates  for  services  in  connection  with  this
Agreement or otherwise without having to account for the same to Lenders.

     12.5  Indemnification.  Lenders agree to indemnify Agent (to the extent not
reimbursed  by  Borrowers  hereunder  and without  limiting any  obligations  of
Borrowers  hereunder) ratably, in accordance with their Pro Rata Shares, for any
and all  claims  of any kind and  nature  whatsoever  that  may be  imposed  on,
incurred by or asserted  against Agent  (including by any Lender) arising out of
or by reason of any investigation in or in any way relating to or arising out of
this  Agreement  or  any  other  Financing  Agreement  or  any  other  documents
contemplated   by  or  referred  to  herein  or  therein  or  the   transactions
contemplated  hereby or thereby  (including the costs and expenses that Agent is
obligated to pay  hereunder)  or the  enforcement  of any of the terms hereof or
thereof or of any such  other  documents,  provided,  that,  no Lender  shall be
liable  for  any of the  foregoing  to the  extent  it  arises  from  the  gross
negligence or willful misconduct of the party to be indemnified as determined by
a final  non-appealable  judgment  of a court  of  competent  jurisdiction.  The
foregoing  indemnity  shall  survive  the  payment  of the  Obligations  and the
termination or non-renewal of this Agreement.

     12.6  Non-Reliance  on Agent and Other Lenders.  Each Lender agrees that it
has,  independently and without reliance on Agent or other Lender,  and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of Borrowers and Guarantors and has made its own decision to enter into
this Agreement and that it will,  independently  and without reliance upon Agent
or any other Lender,  and based on such  documents and  information  as it shall
deem appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this  Agreement or any of the other  Financing
Agreements.  Agent  shall not be  required  to keep  itself  informed  as to the
performance  or observance by any Borrower or Guarantor of any term or provision
of this Agreement or any of the other Financing Agreements or any other document
referred to or provided  for herein or therein or to inspect the  properties  or
books of any Borrower or Guarantor. Agent will use reasonable efforts to provide
Lenders  with any  information  received by Agent from any Borrower or Guarantor
which is required to be provided to Lenders or deemed to be requested by Lenders
hereunder  and with a copy of any Notice of  Default  or  Failure  of  Condition
received by Agent from any Borrower or any Lender;  provided,  that, Agent shall
not be liable to any Lender for any failure to do so,  except to the extent that
such  failure  is  attributable  to  Agent's  own gross  negligence  or  willful
misconduct  as  determined  by a final  non-appealable  judgment  of a court  of
competent  jurisdiction.   Except  for  notices,  reports  and  other  documents
expressly  required to be furnished  to Lenders by Agent or deemed  requested by
Lenders  hereunder,  Agent shall not have any duty or  responsibility to provide
any Lender with any other credit or other  information  concerning  the affairs,
financial  condition or business of any Borrower or Guarantor that may come into
the possession of Agent.

     12.7  Failure  to Act.  Except  for  action  expressly  required  of  Agent
hereunder and under the other Financing Agreements,  Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall  receive  further  assurances  to its  satisfaction  from Lenders of their
indemnification  obligations  under  Section  12.5  hereof  against  any and all
liability  and  expense  that may be  incurred  by it by  reason  of  taking  or
continuing to take any such action.

     12.8 Additional Loans.  Agent shall not make any Revolving Loans or provide
any Letter of Credit to any Borrower on behalf of Lenders intentionally and with
actual  knowledge that such Revolving  Loans or Letter of Credit would cause the
aggregate amount of the total outstanding  Revolving Loans and Letters of Credit
to such  Borrower to exceed the  Borrowing  Base of such  Borrower,  without the
prior  consent of all  Lenders,  except,  that,  Agent may make such  additional
Revolving  Loans or  provide  such  additional  Letter  of  Credit  on behalf of
Lenders,  intentionally  and with actual  knowledge that such Revolving Loans or
Letter of Credit will cause the total outstanding Revolving Loans and Letters of
Credit to such Borrower to exceed the Borrowing Base of such Borrower,  as Agent
may deem necessary or advisable in its discretion, provided, that: (a) the total
principal  amount of the  additional  Revolving  Loans or additional  Letters of
Credit to any  Borrower  which Agent may make or provide  after  obtaining  such
actual  knowledge  that the aggregate  principal  amount of the Revolving  Loans
equal or exceed the  Borrowing  Bases of  Borrowers,  plus the amount of Special
Agent Advances made pursuant to Section  12.11(a)(ii)  hereof then  outstanding,
shall not exceed the aggregate  amount equal to ten percent (10%) of the Maximum
Credit and shall not cause the total  principal  amount of the Loans and Letters
of Credit to exceed the Maximum Credit and (b) no such additional Revolving Loan
or Letter of Credit  shall be  outstanding  more than ninety (90) days after the
date such  additional  Revolving  Loan or Letter of Credit is made or issued (as
the case may be),  except as the  Required  Lenders may  otherwise  agree.  Each
Lender  shall be  obligated to pay Agent the amount of its Pro Rata Share of any
such additional Revolving Loans or Letters of Credit.

     12.9 Concerning the Collateral and the Related Financing  Agreements.  Each
Lender  authorizes  and directs Agent to enter into this Agreement and the other
Financing  Agreements on behalf of such Lender (including,  without  limitation,
post closing,  intercreditor and subordination  agreements) and each such Lender
agrees to be bound by the terms  thereof.  Each  Lender  agrees  that any action
taken  by  Agent or  Required  Lenders  in  accordance  with  the  terms of this
Agreement  or the  other  Financing  Agreements  and the  exercise  by  Agent or
Required  Lenders  of their  respective  powers  set forth  therein  or  herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders.

     12.10 Field Audit, Examination Reports and other Information; Disclaimer by
Lenders. By signing this Agreement, each Lender:

     (a) is deemed to have  requested  that Agent furnish such Lender,  promptly
after it becomes available, a copy of each field audit or examination report and
report with respect to the  Borrowing  Base  prepared or received by Agent (each
field audit or examination  report and report with respect to the Borrowing Base
being referred to herein as a "Report" and collectively,  "Reports"), appraisals
with respect to the Collateral and financial  statements with respect Parent and
its Subsidiaries received by Agent;

     (b)  expressly  agrees  and  acknowledges  that Agent (i) does not make any
representation  or warranty  as to the  accuracy  of any  Report,  appraisal  or
financial statement or (ii) shall not be liable for any information contained in
any Report, appraisal or financial statement;

     (c)   expressly   agrees  and   acknowledges   that  the  Reports  are  not
comprehensive  audits or examinations,  that Agent or any other party performing
any audit or  examination  will  inspect  only  specific  information  regarding
Borrowers  and  Guarantors  and will  rely  significantly  upon  Borrowers'  and
Guarantors' books and records,  as well as on  representations of Borrowers' and
Guarantors' personnel; and

     (d) agrees to keep all Reports  confidential  and strictly for its internal
use in accordance  with the terms of Section 13.5 hereof,  and not to distribute
or use any Report in any other manner.

     12.11 Collateral Matters.

     (a) Agent may, at its option, from time to time, at any time on or after an
Event of  Default  and for so long as the same is  continuing  or upon any other
failure of a condition  precedent to the Loans and Letters of Credit  hereunder,
make such  disbursements and advances ("Special Agent Advances") which Agent, in
its sole  discretion,  (i) deems  necessary or  desirable  either to preserve or
protect the Collateral or any portion  thereof or (ii) to enhance the likelihood
or maximize the amount of repayment by Borrowers and Guarantors of the Loans and
other  Obligations,  provided,  that, (A) the aggregate  principal amount of the
Special Agent  Advances  pursuant to this clause (ii)  outstanding  at any time,
plus the then  outstanding  principal amount of the additional Loans and Letters
of Credit  which Agent may make or provide as set forth in Section  12.8 hereof,
shall not exceed the amount equal to ten (10%) percent of the Maximum Credit and
(B) the aggregate  principal  amount of the Special Agent  Advances  pursuant to
this clause (ii)  outstanding at any time, plus the then  outstanding  principal
amount of the  Loans,  shall not exceed the  Maximum  Credit,  except at Agent's
option,  provided,  that, to the extent that the aggregate  principal  amount of
Special Agent Advances plus the then  outstanding  principal amount of the Loans
exceed the Maximum  Credit the Special Agent  Advances that are in excess of the
Maximum   Credit   shall  be  for  the  sole  account  and  risk  of  Agent  and
notwithstanding  anything to the contrary set forth below,  no Lender shall have
any  obligation to provide its share of such Special Agent Advances in excess of
the Maximum Credit,  or (iii) to pay any other amount chargeable to any Borrower
or  Guarantor  pursuant  to the  terms  of this  Agreement  or any of the  other
Financing Agreements consisting of (A) costs, fees and expenses and (B) payments
to Issuing  Bank in respect of any  Letter of Credit  Obligations.  The  Special
Agent  Advances  shall be  repayable  on demand and  together  with all interest
thereon shall constitute  Obligations  secured by the Collateral.  Special Agent
Advances shall not constitute Loans but shall otherwise  constitute  Obligations
hereunder.  Interest on Special Agent  Advances shall be payable at the Interest
Rate then applicable to Prime Rate Loans and shall be payable on demand. Without
limitation of its obligations  pursuant to Section 6.11, each Lender agrees that
it shall make available to Agent, upon Agent's demand, in immediately  available
funds,  the amount  equal to such  Lender's  Pro Rata Share of each such Special
Agent  Advance.  If such funds are not made  available  to Agent by such Lender,
such Lender shall be deemed a  Defaulting  Lender and Agent shall be entitled to
recover such funds,  on demand from such Lender  together with interest  thereon
for each day from the date such  payment  was due until the date such  amount is
paid to Agent at the  Federal  Funds  Rate for each day during  such  period (as
published by the Federal  Reserve Bank of New York or at Agent's option based on
the arithmetic mean determined by Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on that
day by each of the three leading  brokers of Federal funds  transactions  in New
York City  selected by Agent) and if such  amounts are not paid within three (3)
days of Agent's demand, at the highest Interest Rate provided for in Section 3.1
hereof applicable to Prime Rate Loans.

     (b) Lenders hereby  irrevocably  authorize  Agent, at its option and in its
discretion to release any security  interest in,  mortgage or lien upon,  any of
the  Collateral  (i)  upon  termination  of  the  Commitments  and  payment  and
satisfaction  of all of the Obligations  (other than contingent  indemnification
obligations not asserted) and delivery of cash collateral to the extent required
under Section 13.1 below, or (ii)  constituting  property being sold or disposed
of if  Administrative  Borrower or any Borrower or Guarantor  certifies to Agent
that the sale or disposition is made in compliance  with Section 9.7 hereof (and
Agent may rely conclusively on any such  certificate,  without further inquiry),
or (iii) constituting property in which any Borrower or Guarantor did not own an
interest at the time the security  interest,  mortgage or lien was granted or at
any time thereafter,  or (iv) having a value in the aggregate in any twelve (12)
month  period of less than  $1,500,000,  and to the extent Agent may release its
security  interest in and lien upon any such Collateral  pursuant to the sale or
other  disposition  thereof,  such  sale or other  disposition  shall be  deemed
consented to by Lenders,  or (v) if required or permitted under the terms of any
of the other Financing  Agreements,  including any intercreditor  agreement,  or
(vi)  approved,  authorized or ratified in writing by all of Lenders.  Except as
provided  above,  Agent will not release any security  interest in,  mortgage or
lien upon, any of the Collateral without the prior written  authorization of all
of Lenders.  Upon request by Agent at any time, Lenders will promptly confirm in
writing  Agent's  authority to release  particular  types or items of Collateral
pursuant to this Section.

     (c)  Without  any manner  limiting  Agent's  authority  to act  without any
specific  or further  authorization  or consent by the  Required  Lenders,  each
Lender  agrees to  promptly  confirm in  writing,  upon  request  by Agent,  the
authority to release Collateral  conferred upon Agent under this Section.  Agent
shall  (and is  hereby  irrevocably  authorized  by  Lenders  to)  execute  such
documents as may be necessary to evidence the release of the security  interest,
mortgage or liens  granted to Agent upon any  Collateral to the extent set forth
above;  provided,  that,  (i) Agent  shall not be  required  to execute any such
document on terms which, in Agent's opinion,  would expose Agent to liability or
create any obligations or entail any consequence  other than the release of such
security interest,  mortgage or liens without recourse or warranty and (ii) such
release shall not in any manner  discharge,  affect or impair the Obligations or
any security interest,  mortgage or lien upon (or obligations of any Borrower or
Guarantor in respect of) the Collateral retained by such Borrower or Guarantor.

     (d) Agent shall have no  obligation  whatsoever  to any Lender or any other
Person to investigate,  confirm or assure that the Collateral exists or is owned
by any Borrower or  Guarantor or is cared for,  protected or insured or has been
encumbered,  or that any  particular  items of Collateral  meet the  eligibility
criteria  applicable in respect of the Loans or Letters of Credit hereunder,  or
whether any particular reserves are appropriate,  or that the liens and security
interests granted to Agent pursuant hereto or any of the Financing Agreements or
otherwise have been properly or  sufficiently  or lawfully  created,  perfected,
protected or enforced or are entitled to any particular priority, or to exercise
at all or in any  particular  manner  or under any duty of care,  disclosure  or
fidelity, or to continue exercising,  any of the rights,  authorities and powers
granted or available to Agent in this Agreement or in any of the other Financing
Agreements, it being understood and agreed that in respect of the Collateral, or
any act,  omission  or event  related  thereto,  subject to the other  terms and
conditions   contained  herein,  Agent  may  act  in  any  manner  it  may  deem
appropriate, in its discretion,  given Agent's own interest in the Collateral as
a Lender and that Agent shall have no duty or liability  whatsoever to any other
Lender.

     12.12 Agency for  Perfection.  Each Lender hereby  appoints  Agent and each
other  Lender as agent and bailee for the  purpose of  perfecting  the  security
interests  in and  liens  upon  the  Collateral  of Agent in  assets  which,  in
accordance  with Article 9 of the UCC can be perfected  only by  possession  (or
where the security interest of a secured party with possession has priority over
the security interest of another secured party) and Agent and each Lender hereby
acknowledges  that it holds possession of any such Collateral for the benefit of
Agent  as  secured  party.  Should  any  Lender  obtain  possession  of any such
Collateral,  such Lender shall notify Agent thereof,  and, promptly upon Agent's
request  therefor shall deliver such  Collateral to Agent or in accordance  with
Agent's instructions.

     12.13  Successor  Agent.  Agent may resign as Agent upon  thirty (30) days'
notice to Lenders  and  Administrative  Borrower.  If Agent  resigns  under this
Agreement, the Required Lenders shall appoint from among the Lenders a successor
agent for Lenders.  If no successor  agent is appointed  prior to the  effective
date of the  resignation  of Agent,  Agent may appoint,  after  consulting  with
Lenders and Administrative Borrower, a successor agent from among Lenders which,
absent  the  occurrence  and  continuance  of an  Event  of  Default,  shall  be
acceptable  to   Administrative   Borrower,   which   acceptance  shall  not  be
unreasonably  withheld or delayed. Upon the acceptance by the Lender so selected
of its  appointment as successor  agent  hereunder,  such successor  agent shall
succeed to all of the rights,  powers and duties of the  retiring  Agent and the
term  "Agent" as used herein and in the other  Financing  Agreements  shall mean
such successor agent and the retiring Agent's appointment,  powers and duties as
Agent shall be terminated.  After any retiring Agent's resignation  hereunder as
Agent,  the  provisions  of this Section 12 shall inure to its benefit as to any
actions  taken or omitted by it while it was Agent under this  Agreement.  If no
successor  agent has accepted  appointment  as Agent by the date which is thirty
(30) days  after the date of a  retiring  Agent's  notice  of  resignation,  the
retiring Agent's  resignation shall  nonetheless  thereupon become effective and
Lenders shall perform all of the duties of Agent  hereunder  until such time, if
any, as the Required Lenders appoint a successor agent as provided for above.

     12.14 Other Agent Designations. Agent may at any time and from time to time
determine that a Lender may, in addition, be a "Co-Agent",  "Syndication Agent",
"Documentation  Agent"  or  similar  designation  hereunder  and  enter  into an
agreement  with  such  Lender  to have it so  identified  for  purposes  of this
Agreement.  Any such designation shall be effective upon written notice by Agent
to  Administrative  Borrower  of any such  designation.  Any  Lender  that is so
designated as a Co-Agent, Syndication Agent, Documentation Agent or such similar
designation  by  Agent  shall  have  no  right,  power,  obligation,  liability,
responsibility  or duty  under  this  Agreement  or any of the  other  Financing
Agreements other than those applicable to all Lenders as such.  Without limiting
the foregoing, the Lenders so identified shall not have or be deemed to have any
fiduciary  relationship  with any Lender  and no Lender  shall be deemed to have
relied,  nor shall any Lender  rely,  on a Lender so  identified  as a Co-Agent,
Syndication Agent,  Documentation  Agent or such similar designation in deciding
to enter into this Agreement or in taking or not taking action hereunder.

     SECTION 13. TERM OF AGREEMENT; MISCELLANEOUS

     13.1 Term.

     (a)  This  Agreement  and  the  other  Financing  Agreements  shall  become
effective  as of the date set forth on the first page hereof and shall  continue
in full force and  effect for a term  ending on the date five (5) years from the
date hereof  (the  "Renewal  Date"),  and from year to year  thereafter,  unless
sooner  terminated  pursuant to the terms  hereof.  Agent may, at its option (or
shall at the  direction  of any  Lender in  writing  received  by Agent at least
ninety (90) days prior to the  Renewal  Date or the  anniversary  of any Renewal
Date, as the case may be),  terminate  this  Agreement  and the other  Financing
Agreements,  or  Administrative  Borrower or any  Borrower  may  terminate  this
Agreement  and the other  Financing  Agreements,  each  case,  effective  on the
Renewal Date or on the  anniversary of the Renewal Date in any year by giving to
the other party at least sixty (60) days prior written notice;  provided,  that,
this  Agreement  and  all  other   Financing   Agreements   must  be  terminated
simultaneously.  In addition, Borrowers may terminate this Agreement at any time
upon ten  (10)  days  prior  written  notice  to Agent  (which  notice  shall be
irrevocable)  and  Agent  may,  at its  option,  and shall at the  direction  of
Required  Lenders,  terminate this Agreement at any time upon the occurrence and
during the  continuance  of an Event of Default.  Upon the  Renewal  Date or any
other effective date of termination of the Financing Agreements, Borrowers shall
pay to Agent all  outstanding  and unpaid  Obligations  and shall  furnish  cash
collateral  to Agent (or at Agent's  option,  a letter of credit  issued for the
account of Borrowers and at Borrowers' expense, in form and substance reasonably
satisfactory to Agent, by an issuer  reasonably  acceptable to Agent and payable
to Agent as  beneficiary)  in such amounts as Agent  determines  are  reasonably
necessary  to secure  Agent and  Lenders  from loss,  cost,  damage or  expense,
including  attorneys'  fees and  expenses,  in  connection  with any  contingent
Obligations,  including issued and outstanding  Letter of Credit Obligations and
checks or other payments  provisionally credited to the Obligations and/or as to
which Agent or any Lender has not yet received  final and  indefeasible  payment
and any continuing  obligations  of Agent or any Lender  pursuant to any Deposit
Account  Control  Agreement and for any of the  Obligations  arising under or in
connection  with any Hedge  Agreement in such amounts as the other party to such
Hedge  Agreement  may  require  (unless  such  Obligations  arising  under or in
connection with any Hedge Agreement are paid in full in cash and terminated in a
manner satisfactory to such other party). The amount of such cash collateral (or
letter of credit, as Agent may determine) as to any Letter of Credit Obligations
shall be in the amount equal to one hundred five (105%) percent of the amount of
the  Letter  of Credit  Obligations  plus the  amount  of any fees and  expenses
payable in connection therewith through the end of the latest expiration date of
the Letters of Credit  giving rise to such  Letter of Credit  Obligations.  Such
payments in respect of the Obligations and cash collateral  shall be remitted by
wire transfer in Federal  funds to the Agent Payment  Account or such other bank
account  of Agent,  as Agent may,  in its  discretion,  designate  in writing to
Administrative  Borrower  for such  purpose.  Interest  shall be due  until  and
including  the next  Business  Day, if the amounts so paid by  Borrowers  to the
Agent Payment Account or other bank account  designated by Agent are received in
such bank account later than 12:00 noon, Chicago time.

     (b) No termination of the  Commitments,  this Agreement or any of the other
Financing Agreements shall relieve or discharge any Borrower or Guarantor of its
respective duties,  obligations and covenants under this Agreement or any of the
other  Financing   Agreements  until  all  Obligations  (other  than  contingent
indemnification obligations not asserted) have been fully and finally discharged
and paid,  and Agent's  continuing  security  interest in the Collateral and the
rights and remedies of Agent and Lenders  hereunder,  under the other  Financing
Agreements and applicable law, shall remain in effect until all such Obligations
(other than contingent indemnification obligations not asserted) have been fully
and finally discharged and paid. Accordingly, each Borrower and Guarantor waives
any  rights  it may have  under  the UCC to demand  the  filing  of  termination
statements  with  respect to the  Collateral  and Agent shall not be required to
send such  termination  statements to Borrowers or  Guarantors,  or to file them
with any  filing  office,  unless  and  until  this  Agreement  shall  have been
terminated  in  accordance  with  its  terms  and all  Obligations  (other  than
contingent indemnification  obligations not asserted) paid and satisfied in full
in immediately available funds.

     (c) If for any reason this  Agreement  is  terminated  prior to the Renewal
Date,  in view of the  impracticality  and extreme  difficulty  of  ascertaining
actual  damages  and by  mutual  agreement  of the  parties  as to a  reasonable
calculation  of Agent's  and each  Lender's  lost  profits as a result  thereof,
Borrowers agree to pay to Agent, for the benefit of Lenders,  upon the effective
date of such termination, an early termination fee in the amount equal to

<TABLE>
<CAPTION>
                                Amount                                                 Period
<S>                                                             <C>
        (i)   1.0% of Maximum Credit                            From the date hereof to and including the first
                                                                anniversary of the date hereof
        (ii)  0.50% of Maximum Credit                           From and after the first anniversary of the date
                                                                hereof to and including the second anniversary of
                                                                the date hereof
        (iii)  0.25% of Maximum Credit                          From and after the second anniversary of the date
                                                                hereof but prior to the end of the then current
                                                                term (excluding the last 30 days of the then
                                                                current term).
</TABLE>

Such  early  termination  fee shall be  presumed  to be the  amount  of  damages
sustained  by Agent  and  Lenders  as a result  of such  early  termination  and
Borrowers and  Guarantors  agree that it is reasonable  under the  circumstances
currently  existing  (including,  but not  limited to, the  borrowings  that are
reasonably  expected by Borrowers  hereunder  and the  interest,  fees and other
charges  that are  reasonably  expected  to be  received  by Agent  and  Lenders
pursuant  to the Credit  Facility).  In  addition,  Agent and  Lenders  shall be
entitled  to such  early  termination  fee upon the  occurrence  of any Event of
Default  described  in Sections  10.1(g) and 10.1(h)  hereof,  even if Agent and
Lenders do not exercise the right to terminate  this  Agreement,  but elect,  at
their  option,  to provide  financing  to any Borrower or permit the use of cash
collateral under the United States  Bankruptcy  Code. The early  termination fee
provided for in this Section 13.1 shall be deemed included in the Obligations.

     13.2 Interpretative Provisions.

     (a) All terms used  herein  which are  defined  in Article 1,  Article 8 or
Article 9 of the UCC shall have the  meanings  given  therein  unless  otherwise
defined in this Agreement.

     (b) All references to the plural herein shall also mean the singular and to
the singular shall also mean the plural unless the context otherwise requires.

     (c) All references to any Borrower,  Guarantor,  Agent and Lenders pursuant
to the  definitions  set forth in the  recitals  hereto,  or to any other person
herein, shall include their respective successors and assigns.

     (d) The words "hereof", "herein",  "hereunder",  "this Agreement" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not any  particular  provision of this Agreement and as this Agreement
now  exists or may  hereafter  be  amended,  modified,  supplemented,  extended,
renewed, restated or replaced.

     (e) The word "including" when used in this Agreement shall mean "including,
without  limitation"  and the word "will" when used in this  Agreement  shall be
construed to have the same meaning and effect as the word "shall".

     (f) An Event of Default shall exist or continue or be continuing until such
Event of  Default is waived in  accordance  with  Section  11.3 or is cured in a
manner satisfactory to Agent, if such Event of Default is capable of being cured
as determined by Agent.

     (g) All references to the term "good faith" used herein when  applicable to
Agent  or any  Lender  shall  mean,  notwithstanding  anything  to the  contrary
contained  herein or in the UCC,  honesty in fact in the conduct or  transaction
concerned. Borrowers and Guarantors shall have the burden of proving any lack of
good  faith on the  part of  Agent or any  Lender  alleged  by any  Borrower  or
Guarantor at any time.

     (h) Any accounting term used in this Agreement shall have, unless otherwise
specifically  provided herein, the meaning  customarily given in accordance with
GAAP,  and  all  financial  computations  hereunder  shall  be  computed  unless
otherwise  specifically provided herein, in accordance with GAAP as consistently
applied  and  using  the same  method  for  inventory  valuation  as used in the
preparation  of the financial  statements  of Parent most  recently  received by
Agent  prior  to the  date  hereof.  Notwithstanding  anything  to the  contrary
contained  in  GAAP  or  any  interpretations  or  other  pronouncements  by the
Financial  Accounting  Standards  Board  or  otherwise,  the  term  "unqualified
opinion" as used herein to refer to opinions or reports  provided by accountants
shall mean an opinion or report that is  unqualified  as to going concern or the
scope of the audit.

     (i) In the  computation of periods of time from a specified date to a later
specified date, the word "from" means "from and  including",  the words "to" and
"until"  each  mean "to but  excluding"  and the word  "through"  means  "to and
including".

     (j) Unless otherwise  expressly  provided herein,  (i) references herein to
any agreement,  document or instrument shall be deemed to include all subsequent
amendments,  modifications,  supplements,  extensions, renewals, restatements or
replacements  with  respect  thereto,  but only to the  extent  the same are not
prohibited  by the terms hereof or of any other  Financing  Agreement,  and (ii)
references  to any statute or  regulation  are to be construed as including  all
statutory  and  regulatory  provisions   consolidating,   amending,   replacing,
recodifying, supplementing or interpreting the statute or regulation.

     (k) The captions  and headings of this  Agreement  are for  convenience  of
reference only and shall not affect the interpretation of this Agreement.

     (l) This Agreement and other Financing Agreements may use several different
limitations,  tests or measurements to regulate the same or similar matters. All
such  limitations,  tests and  measurements  are  cumulative  and shall  each be
performed in accordance with their terms.

     (m) This  Agreement and the other  Financing  Agreements  are the result of
negotiations  among and have been  reviewed  by  counsel  to Agent and the other
parties,  and are the products of all parties.  Accordingly,  this Agreement and
the other Financing  Agreements shall not be construed  against Agent or Lenders
merely because of Agent's or any Lender's involvement in their preparation.

     13.3 Notices.

     (a) All  notices,  requests and demands  hereunder  shall be in writing and
deemed to have been given or made:  if  delivered  in person,  immediately  upon
delivery;  if by telex,  telegram or facsimile  transmission,  immediately  upon
sending and upon confirmation of receipt; if by nationally  recognized overnight
courier  service with  instructions  to deliver the next  Business  Day, one (1)
Business Day after sending;  and if by certified mail, return receipt requested,
five (5) days after mailing. Notices delivered through electronic communications
shall be  effective  to the  extent  set forth in  Section  13.3(b)  below.  All
notices,  requests and demands upon the parties are to be given to the following
addresses  (or to such  other  address as any party may  designate  by notice in
accordance with this Section):

<TABLE>
<CAPTION>
<S>                                                              <C>
                  If to any Borrower or Guarantor:               c/o Keystone Consolidated Industries, Inc.
                                                                 5430 LBJ Freeway, Suite 1740
                                                                 Dallas, Texas  75240
                                                                 Attention: Vice President and Chief
                                                                               Financial Officer
                                                                 Telephone No.: (972) 458-0028
                                                                 Telecopy No.: (972) 448-1445

                  If to Agent:                                   Wachovia Capital Finance Corporation
                                                                 (Central)
                                                                 150 South Wacker Drive, Suite 2200
                                                                 Chicago, Illinois  60606
                                                                 Attention: Account Officer: Keystone Consolidated
                                                                 Industries, Inc.
                                                                 Telephone No.:(312) 332-0420
                                                                 Telecopy No.:  (312) 332-0424
</TABLE>

     (b) Notices and other  communications to Agent and Lenders hereunder may be
delivered  or  furnished  by  electronic  communication  (including  e-mail  and
Internet or intranet  websites)  pursuant to procedures  approved by Agent or as
otherwise determined by Agent, provided,  that, the foregoing shall not apply to
notices  to any  Lender  pursuant  to  Section  2  hereof  if  such  Lender,  as
applicable,  has notified Agent that it is incapable of receiving  notices under
such Section by electronic  communication.  Unless Agent otherwise requires, (i)
notices  and  other  communications  sent to an e-mail  address  shall be deemed
received  upon the  sender's  receipt of an  acknowledgement  from the  intended
recipient (such as by the "return  receipt  requested"  function,  as available,
return e-mail or other written acknowledgement),  provided, that, if such notice
or other  communication  is not given  during the normal  business  hours of the
recipient,  such  notice  shall be deemed to have  been sent at the  opening  of
business  on the  next  Business  Day for the  recipient,  and (ii)  notices  or
communications  posted  to an  Internet  or  intranet  website  shall be  deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the  foregoing  clause (i) of  notification  that such notice or
communications is available and identifying the website address therefor.

     13.4 Partial  Invalidity.  If any provision of this Agreement is held to be
invalid  or  unenforceable,   such  invalidity  or  unenforceability  shall  not
invalidate  this Agreement as a whole,  but this Agreement shall be construed as
though  it did not  contain  the  particular  provision  held to be  invalid  or
unenforceable  and the rights and  obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.

     13.5 Confidentiality.

     (a) Agent and each Lender shall use all commercially  reasonable efforts to
keep  confidential,  in accordance  with its customary  procedures  for handling
confidential  information and safe and sound lending  practices,  any non-public
information supplied to it by any Borrower pursuant to this Agreement, provided,
that,   nothing  contained  herein  shall  limit  the  disclosure  of  any  such
information:  (i) to the extent required by statute, rule, regulation,  subpoena
or court order,  (ii) to bank examiners and other  regulators,  auditors  and/or
accountants,  in connection with any litigation to which Agent or such Lender is
a  party,  (iii)  to  any  Lender  or  Participant  (or  prospective  Lender  or
Participant)  or to any  Affiliate  of any  Lender  so long as  such  Lender  or
Participant (or prospective  Lender or Participant) or Affiliate shall have been
instructed to treat such  information as  confidential  in accordance  with this
Section  13.5,  or (iv) to counsel  for Agent or any Lender or  Participant  (or
prospective Lender or Participant).

     (b) In the event that  Agent or any Lender  receives a request or demand to
disclose any confidential  information  pursuant to any subpoena or court order,
Agent or such Lender,  as the case may be, agrees (i) to the extent permitted by
applicable  law or if permitted by  applicable  law, to the extent Agent or such
Lender determines in good faith that it will not create any risk of liability to
Agent or such Lender,  Agent or such Lender will promptly notify  Administrative
Borrower of such request so that  Administrative  Borrower may seek a protective
order or other  appropriate  relief or  remedy  and (ii) if  disclosure  of such
information is required, disclose such information and, subject to reimbursement
by Borrowers of Agent's or such Lender's expenses, cooperate with Administrative
Borrower  in the  reasonable  efforts  to  obtain  an order  or  other  reliable
assurance  that  confidential  treatment will be accorded to such portion of the
disclosed information which Administrative Borrower so designates, to the extent
permitted by  applicable  law or if permitted by  applicable  law, to the extent
Agent or such Lender  determines  in good faith that it will not create any risk
of liability to Agent or such Lender.

     (c) In no event  shall this  Section  13.5 or any other  provision  of this
Agreement,  any of the other  Financing  Agreements or applicable law be deemed:
(i) to apply to or restrict  disclosure of information  that has been or is made
public by any  Borrower,  Guarantor  or any  third  party or  otherwise  becomes
generally  available  to the public  other than as a result of a  disclosure  in
violation  hereof,  (ii) to apply to or restrict  disclosure of information that
was or becomes available to Agent or any Lender (or any Affiliate of any Lender)
on a  non-confidential  basis from a person other than a Borrower or  Guarantor,
(iii) to  require  Agent or any Lender to return any  materials  furnished  by a
Borrower  or  Guarantor  to Agent or a Lender or prevent  Agent or a Lender from
responding  to routine  informational  requests in  accordance  with the Code of
Ethics for the Exchange of Credit  Information  promulgated by The Robert Morris
Associates or other applicable  industry  standards  relating to the exchange of
credit information. The obligations of Agent and Lenders under this Section 13.5
shall  supersede  and replace  the  obligations  of Agent and Lenders  under any
confidentiality letter signed prior to the date hereof or any other arrangements
concerning  the  confidentiality  of  information  provided  by any  Borrower or
Guarantor to Agent or any Lender.  In  addition,  Agent and Lenders may disclose
information  relating to the Credit  Facility  to Gold Sheets and other  similar
bank  trade  publications,  with such  information  to consist of deal terms and
other information customarily found in such publications.

     13.6  Successors.  This Agreement,  the other Financing  Agreements and any
other document  referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Agent, Lenders,  Borrowers,  Guarantors and
their respective successors and assigns, except that Borrower may not assign its
rights  under  this  Agreement,  the other  Financing  Agreements  and any other
document  referred  to herein or therein  without the prior  written  consent of
Agent and Lenders.  Any such  purported  assignment  without such express  prior
written  consent shall be void. No Lender may assign its rights and  obligations
under this  Agreement  without  the prior  written  consent of Agent,  except as
provided in Section 13.7 below.  The terms and  provisions of this Agreement and
the other  Financing  Agreements  are for the purpose of defining  the  relative
rights and obligations of Borrowers,  Guarantors, Agent and Lenders with respect
to the  transactions  contemplated  hereby  and  there  shall be no third  party
beneficiaries of any of the terms and provisions of this Agreement or any of the
other Financing Agreements.

     13.7 Assignments; Participations.

     (a) Each Lender may,  with the prior written  consent of Agent,  assign all
or, if less than all, a portion  equal to at least  $5,000,000  in the aggregate
for the assigning Lender, of such rights and obligations under this Agreement to
one or more  Eligible  Transferees  (but  not  including  for this  purpose  any
assignments  in the  form of a  participation),  each of which  assignees  shall
become a party to this  Agreement as a Lender by execution of an Assignment  and
Acceptance;  provided,  that,  (i)  such  transfer  or  assignment  will  not be
effective  until  recorded  by Agent on the  Register  and (ii) Agent shall have
received for its sole account  payment of a  processing  fee from the  assigning
Lender or the assignee in the amount of $5,000.

     (b) Agent shall  maintain a register of the names and addresses of Lenders,
their  Commitments  and the  principal  amount of their Loans (the  "Register").
Agent shall also maintain a copy of each Assignment and Acceptance  delivered to
and  accepted  by it and  shall  modify  the  Register  to give  effect  to each
Assignment and  Acceptance.  The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and any Borrowers,  Guarantors,
Agent and Lenders may treat each Person  whose name is recorded in the  Register
as a Lender hereunder for all purposes of this Agreement.  The Register shall be
available  for  inspection  by  Administrative  Borrower  and any  Lender at any
reasonable time and from time to time upon reasonable prior notice.

     (c) Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in each  Assignment  and  Acceptance,  the assignee
thereunder shall be a party hereto and to the other Financing Agreements and, to
the extent  that  rights and  obligations  hereunder  have been  assigned  to it
pursuant to such  Assignment  and  Acceptance,  have the rights and  obligations
(including,  without  limitation,  the  obligation to  participate  in Letter of
Credit  Obligations)  of a Lender  hereunder  and  thereunder  and the assigning
Lender  shall,  to the extent that rights and  obligations  hereunder  have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement.

     (d) By execution and delivery of an Assignment and Acceptance, the assignor
and  assignee  thereunder  confirm  to and agree  with each  other and the other
parties  hereto as follows:  (i) other than as provided in such  Assignment  and
Acceptance, the assigning Lender makes no representation or warranty and assumes
no responsibility with respect to any statements,  warranties or representations
made in or in  connection  with this  Agreement  or any of the  other  Financing
Agreements or the execution, legality, enforceability,  genuineness, sufficiency
or value of this Agreement or any of the other  Financing  Agreements  furnished
pursuant hereto,  (ii) the assigning Lender makes no  representation or warranty
and assumes no  responsibility  with respect to the  financial  condition of any
Borrower,  Guarantor  or  any  of  their  Subsidiaries  or  the  performance  or
observance  by any Borrower or Guarantor of any of the  Obligations;  (iii) such
assignee  confirms  that it has received a copy of this  Agreement and the other
Financing Agreements,  together with such other documents and information it has
deemed  appropriate  to make its own credit  analysis and decision to enter into
such  Assignment  and  Acceptance,  (iv) such assignee will,  independently  and
without  reliance upon the assigning  Lender,  Agent and based on such documents
and information as it shall deem  appropriate at the time,  continue to make its
own credit decisions in taking or not taking action under this Agreement and the
other Financing  Agreements,  (v) such assignee appoints and authorizes Agent to
take such action as agent on its behalf and to exercise  such powers  under this
Agreement  and the other  Financing  Agreements as are delegated to Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto,  and (vi) such assignee  agrees that it will perform in accordance with
their terms all of the obligations  which by the terms of this Agreement and the
other Financing Agreements are required to be performed by it as a Lender. Agent
and Lenders may furnish any information  concerning any Borrower or Guarantor in
the  possession  of Agent  or any  Lender  from  time to time to  assignees  and
Participants, subject to the provisions of Section 13.5.

     (e) Each  Lender  may  sell  participations  to one or more  banks or other
entities  in or to all or a portion  of its rights  and  obligations  under this
Agreement and the other Financing Agreements (including, without limitation, all
or a portion of its Commitments and the Loans owing to it and its  participation
in the Letter of Credit  Obligations,  without the consent of Agent or the other
Lenders);  provided,  that, (i) such Lender's  obligations  under this Agreement
(including,   without  limitation,  its  Commitment  hereunder)  and  the  other
Financing  Agreements  shall  remain  unchanged,  (ii) such Lender  shall remain
solely  responsible  to the other  parties  hereto for the  performance  of such
obligations,  and  Borrowers,  Guarantors,  the other  Lenders  and Agent  shall
continue to deal solely and directly  with such Lender in  connection  with such
Lender's  rights and  obligations  under this Agreement and the other  Financing
Agreements,  and (iii) the  Participant  shall not have any  rights  under  this
Agreement or any of the other  Financing  Agreements (the  Participant's  rights
against  such Lender in respect of such  participation  to be those set forth in
the  agreement  executed  by such  Lender in favor of the  Participant  relating
thereto) and all amounts payable by any Borrower or Guarantor hereunder shall be
determined as if such Lender had not sold such participation.

     (f) Nothing in this  Agreement  shall  prevent or prohibit  any Lender from
pledging its Loans  hereunder to a Federal Reserve Bank in support of borrowings
made by such Lenders from such Federal  Reserve  Bank;  provided,  that, no such
pledge  shall  release  such Lender  from any of its  obligations  hereunder  or
substitute any such pledgee for such Lender as a party hereto.

     (g) Borrowers and Guarantors  shall assist Agent or any Lender permitted to
sell  assignments or  participations  under this Section 13.7 in whatever manner
reasonably  necessary  in order to  enable  or  effect  any such  assignment  or
participation,  including (but not limited to) the execution and delivery of any
and all  agreements,  notes  and other  documents  and  instruments  as shall be
reasonably  requested and the  preparation  and delivery of offering  materials,
projections  and other  informational  materials,  appraisals or other documents
for, and the  participation  of relevant  management in meetings and  conference
calls with,  potential  Lenders or  Participants.  Borrowers  shall  certify the
correctness,  completeness  and  accuracy,  in  all  material  respects,  of all
descriptions of Borrowers and Guarantors and their affairs provided, prepared or
reviewed  by any  Borrower  or  Guarantor  that  are  contained  in any  selling
materials  and  all  other  information  provided  by it and  included  in  such
materials.

     13.8 Entire Agreement. This Agreement, the other Financing Agreements,  any
supplements hereto or thereto,  and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and  understanding  concerning the subject matter hereof and thereof between the
parties  hereto,  and  supersede  all other  prior  agreements,  understandings,
negotiations  and   discussions,   representations,   warranties,   commitments,
proposals,  offers and contracts  concerning the subject matter hereof,  whether
oral or  written.  In the event of any  inconsistency  between the terms of this
Agreement and any schedule or exhibit hereto,  the terms of this Agreement shall
govern.

     13.9 USA Patriot Act. Each Lender subject to the USA PATRIOT Act (Title III
of Pub.L.  107-56 (signed into law October 26, 2001) (the "Act") hereby notifies
Borrowers and  Guarantors  that pursuant to the  requirements  of the Act, it is
required to obtain, verify and record information that identifies each person or
corporation who opens an account and/or enters into a business relationship with
it, which information  includes the name and address of Borrowers and Guarantors
and other  information  that will allow such Lender to  identify  such person in
accordance with the Act and any other  applicable law.  Borrowers and Guarantors
are hereby advised that any Loans or Letters of Credit  hereunder are subject to
satisfactory results of such verification.

     13.10  Counterparts,  Etc.  This  Agreement  or any of the other  Financing
Agreements may be executed in any number of counterparts, each of which shall be
an original,  but all of which taken together shall  constitute one and the same
agreement.  Delivery of an executed  counterpart of this Agreement or any of the
other  Financing  Agreements  by  telefacsimile  or other  electronic  method of
transmission shall have the same force and effect as the delivery of an original
executed   counterpart  of  this  Agreement  or  any  of  such  other  Financing
Agreements.  Any party delivering an executed  counterpart of any such agreement
by telefacsimile or other electronic  method of transmission  shall also deliver
an original executed counterpart,  but the failure to do so shall not affect the
validity, enforceability or binding effect of such agreement.

     SECTION 14. CROSS-GUARANTY

     14.1  Cross-Guaranty.  Each  Borrower  hereby  agrees that such Borrower is
jointly and  severally  liable for, and hereby  absolutely  and  unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and  prompt  payment  (whether  at  stated  maturity,  by  acceleration  or
otherwise) and performance of, all Obligations  owed or hereafter owing to Agent
and Lenders by each other  Borrower.  Each  Borrower  agrees  that its  guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of  collection,  that  its  obligations  under  this  Section  14  shall  not be
discharged  until payment and  performance,  in full, of the Obligations  (other
than contingent indemnification obligations not asserted) has occurred, and that
its  obligations  under this  Section 14 shall be  absolute  and  unconditional,
irrespective of, and unaffected by,

     (a) the genuineness,  validity,  regularity,  enforceability  or any future
amendment of, or change in, this Agreement, any other Financing Agreement or any
other agreement, document or instrument to which any Borrower is or may become a
party;

     (b) the absence of any action to enforce  this  Agreement  (including  this
Section 14) or any other  Financing  Agreement or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;

     (c) the  existence,  value or condition  of, or failure to perfect its lien
against,  any security for the Obligations or any action,  or the absence of any
action,  by Agent and Lenders in respect  thereof  (including the release of any
such security);

     (d) the insolvency of any Borrower or Guarantor; or

     (e) any other action or  circumstances  that might  otherwise  constitute a
legal or  equitable  discharge  or defense of a surety or  guarantor  other than
payment  in full  of the  Obligations  (other  than  contingent  indemnification
obligations not asserted).

     Each  Borrower  shall be regarded,  and shall be in the same  position,  as
principal debtor with respect to the Obligations guaranteed hereunder.

     14.2 Waivers by Borrowers. Each Borrower expressly waives all rights it may
have now or in the future under any  statute,  or at common law, or at law or in
equity, or otherwise, to compel Agent or Lenders to marshal assets or to proceed
in respect of the Obligations guaranteed hereunder against any other Borrower or
Guarantor,  any  other  party  or  against  any  security  for the  payment  and
performance of the Obligations before proceeding  against,  or as a condition to
proceeding against, such Borrower.  It is agreed among each Borrower,  Agent and
Lenders  that  the  foregoing  waivers  are of the  essence  of the  transaction
contemplated by this Agreement and the other Financing  Agreements and that, but
for the provisions of this Section 14 and such waivers,  Agent and Lenders would
decline to enter into this Agreement.

     14.3 Benefit of Guaranty.  Each Borrower agrees that the provisions of this
Section  14 are for the  benefit  of Agent  and  Lenders  and  their  respective
successors,  transferees,  endorsees and assigns,  and nothing herein  contained
shall  impair,  as  between  any  other  Borrower  and  Agent  or  Lenders,  the
obligations of such other Borrower under the Financing Agreements.

     14.4 Waiver of Subrogation,  Etc.  Notwithstanding anything to the contrary
in this Agreement or in any other Financing  Agreement,  and except as set forth
in Section 14.9, each Borrower hereby  expressly and irrevocably  waives any and
all  rights  at law or in  equity to  subrogation,  reimbursement,  exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety,  guarantor  or  accommodation  co-obligor  until  payment in full of the
Obligations (other than contingent indemnification obligations not asserted) and
termination of all Commitments.  Each Borrower acknowledges and agrees that this
waiver is intended to benefit Agent and Lenders and shall not limit or otherwise
affect such Borrower's liability hereunder or the enforceability of this Section
14, and that Agent,  Lenders  and their  respective  successors  and assigns are
intended  third party  beneficiaries  of the waivers and agreements set forth in
this Section 14.4.

     14.5  Election of Remedies.  If Agent or any Lender may,  under  applicable
law,  proceed to realize  its  benefits  under any of the  Financing  Agreements
giving  Agent or such Lender a lien upon any  Collateral,  whether  owned by any
Borrower  or  by  any  other  Person,  either  by  judicial  foreclosure  or  by
non-judicial  sale or enforcement,  Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Section 14. If, in the exercise of any of its
rights and  remedies,  Agent or any Lender  shall  forfeit  any of its rights or
remedies,  including  its  right  to enter a  deficiency  judgment  against  any
Borrower or any other Person,  whether because of any applicable laws pertaining
to "election of remedies" or the like,  each  Borrower  hereby  consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation  that each Borrower  might  otherwise have had but for
such action by Agent or such Lender.  Any  election of remedies  that results in
the  denial  or  impairment  of the  right  of  Agent  or any  Lender  to seek a
deficiency  judgment  against any Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations.  In the event Agent or any
Lender shall bid at any  foreclosure  or  trustee's  sale or at any private sale
permitted by law or the Financing  Agreements,  Agent or such Lender may bid all
or less than the amount of the  Obligations  and the amount of such bid need not
be paid by Agent or such Lender but shall be credited  against the  Obligations.
The amount of the successful bid at any such sale, whether Agent,  Lender or any
other party is the successful  bidder,  shall be  conclusively  deemed to be the
fair market value of the Collateral  and the difference  between such bid amount
and the remaining balance of the Obligations shall be conclusively  deemed to be
the amount of the Obligations  guaranteed under this Section 14, notwithstanding
that any  present or future law or court  decision or ruling may have the effect
of  reducing  the amount of any  deficiency  claim to which  Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.

     14.6  Limitation.  Notwithstanding  any provision  herein  contained to the
contrary, each Borrower's liability under this Section 14 (which liability is in
any event in  addition to amounts for which such  Borrower is  primarily  liable
under  Section  1) shall be limited to an amount not to exceed as of any date of
determination the greater of:

     (a) the net amount of all Loans  advanced to any other  Borrower under this
Agreement and then re-loaned or otherwise transferred to, or for the benefit of,
such Borrower; and

     (b) the  amount  that  could be  claimed  by Agent  and  Lenders  from such
Borrower  under this  Section  14  without  rendering  such  claim  voidable  or
avoidable  under Section 548 of Chapter 11 of the  Bankruptcy  Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent  Conveyance
Act or similar  statute or common law after  taking  into  account,  among other
things,  such Borrower's  right of contribution  and  indemnification  from each
other Borrower under Section 14.7.

     14.7 Contribution with Respect to Guaranty Obligations.

     (a) To the extent that any Borrower shall make a payment under this Section
14 of all or any of the Obligations  (other than Loans made to that Borrower for
which it is primarily liable) (a "Guarantor  Payment") that, taking into account
all other Guarantor  Payments then previously or concurrently  made by any other
Borrower,  exceeds the amount that such Borrower  would  otherwise  have paid if
each Borrower had paid the  aggregate  Obligations  satisfied by such  Guarantor
Payment in the same  proportion  that such  Borrower's  "Allocable  Amount"  (as
defined below) (as determined  immediately prior to such Guarantor Payment) bore
to the  aggregate  Allocable  Amounts  of each of the  Borrowers  as  determined
immediately  prior to the  making of such  Guarantor  Payment,  then,  following
payment   in  full  in  cash  of  the   Obligations   (other   than   contingent
indemnification  obligations not asserted) and  termination of the  Commitments,
such  Borrower  shall be entitled to receive  contribution  and  indemnification
payments  from, and be reimbursed by, each other Borrower for the amount of such
excess,  pro rata  based  upon  their  respective  Allocable  Amounts  in effect
immediately prior to such Guarantor Payment.

     (b) As of any date of determination, the "Allocable Amount" of any Borrower
shall be equal to the maximum  amount of the claim that could then be  recovered
from such Borrower  under this Section 14 without  rendering such claim voidable
or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent  Conveyance
Act or similar statute or common law.

     (c) This  Section 14.7 is intended  only to define the  relative  rights of
Borrowers  and  nothing set forth in this  Section  14.7 is intended to or shall
impair the obligations of Borrowers,  jointly and severally,  to pay any amounts
as and when the same shall become due and payable in  accordance  with the terms
of this Agreement,  including  Section 14.1.  Nothing  contained in this Section
14.7 shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, fees and expenses with respect
thereto for which such Borrower shall be primarily liable.

     (d) The parties  hereto  acknowledge  that the rights of  contribution  and
indemnification  hereunder shall constitute assets of the Borrower to which such
contribution and indemnification is owing.

     (e) The rights of the indemnifying  Borrowers  against other Credit Parties
under this  Section  14.7 shall be  exercisable  upon the full and  indefeasible
payment of the Obligations  (other than contingent  indemnification  obligations
not asserted) and the termination of the Commitments subject to Section 14.9.

     14.8 Liability Cumulative. The liability of Borrowers under this Section 14
is in addition to and shall be cumulative  with all liabilities of each Borrower
to Agent and Lenders under this Agreement and the other Financing  Agreements to
which such Borrower is a party or in respect of any Obligations or obligation of
the other Borrower,  without any limitation as to amount,  unless the instrument
or agreement evidencing or creating such other liability  specifically  provides
to the contrary.

     14.9  Subrogation.  Upon  payment in full of the  Obligations  (other  than
contingent indemnification  obligations not asserted) and the termination of the
Commitments,  each  Borrower  shall be  subrogated  to the  rights  of Agent and
Lenders to the extent of any  payments  made by such  Borrower  pursuant to this
Section 14. Notwithstanding  anything in this Section 14 to the contrary, to the
extent  any  Borrower  acquires  rights  to  subrogation,   indemnification   or
contribution  under this Section 14 and such rights  adversely affect Agent's or
any  Lender's  rights to  exercise  rights  and  remedies  under  the  Financing
Agreements or to receive payment of the  Obligations,  then at Agent's  request,
such  Borrower or Borrowers  shall  execute an agreement  pursuant to which such
Borrower or Borrowers  waive their  rights of  subrogation,  indemnification  or
contribution under this Section 14.

                            [Signature Pages Follow]

<PAGE>

                 [Signature Page to Loan and Security Agreement]

     IN WITNESS WHEREOF, Agent, Lenders and Borrowers have caused these presents
to be duly executed as of the day and year first above written.

           BORROWERS:

           KEYSTONE CONSOLIDATED INDUSTRIES, INC.

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

                           KEYSTONE WIRE PRODUCTS INC.

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

                         ENGINEERED WIRE PRODUCTS, INC.

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

                           F V STEEL AND WIRE COMPANY

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

            AGENT AND LENDERS:
            -----------------

       WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL), as Agent and a Lender

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

<PAGE>

                                    EXHIBIT A
                                       to
                           LOAN AND SECURITY AGREEMENT

                       ASSIGNMENT AND ACCEPTANCE AGREEMENT

     This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and Acceptance")
dated as of _____________,  200_ is made between  ________________________  (the
"Assignor") and ____________________ (the "Assignee").

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

     WHEREAS, Wachovia Capital Finance Corporation (Central), in its capacity as
agent pursuant to the Loan Agreement (as hereinafter  defined) acting for and on
behalf of the financial  institutions  which are parties  thereto as lenders (in
such capacity, "Agent"), and the financial institutions which are parties to the
Loan  Agreement  as lenders  (individually,  each a "Lender"  and  collectively,
"Lenders")  have  entered  or are  about to enter  into  financing  arrangements
pursuant  to which Agent and  Lenders  may make loans and  advances  and provide
other  financial  accommodations  to  Keystone  Consolidated  Industries,  Inc.,
Keystone Wire Products Inc.,  Engineered  Wire Products,  Inc. and F V Steel and
Wire Company  (collectively,  "Borrowers") as set forth in the Loan and Security
Agreement,  dated  August 31,  2005,  by and among  Borrowers,  certain of their
affiliates,  Agent  and  Lenders  (as the same now  exists or may  hereafter  be
amended, modified,  supplemented,  extended,  renewed, restated or replaced, the
"Loan Agreement"), and the other agreements,  documents and instruments referred
to therein or at any time executed and/or  delivered in connection  therewith or
related thereto (all of the foregoing,  together with the Loan Agreement, as the
same now exist or may hereafter be amended,  modified,  supplemented,  extended,
renewed,  restated or  replaced,  being  collectively  referred to herein as the
"Financing Agreements");

     WHEREAS, as provided under the Loan Agreement, Assignor committed to making
Loans (the "Committed  Loans") to Borrowers in an aggregate amount not to exceed
$___________ (the "Commitment");

     WHEREAS,  Assignor  wishes to assign to Assignee [part of the] [all] rights
and  obligations  of  Assignor  under  the  Loan  Agreement  in  respect  of its
Commitment  in an amount  equal to  $______________  (the  "Assigned  Commitment
Amount")  on the terms and  subject  to the  conditions  set  forth  herein  and
Assignee  wishes  to  accept  assignment  of  such  rights  and to  assume  such
obligations from Assignor on such terms and subject to such conditions;

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:

     1. Assignment and Acceptance.

     (a) Subject to the terms and conditions of this  Assignment and Acceptance,
Assignor  hereby sells,  transfers and assigns to Assignee,  and Assignee hereby
purchases,  assumes and undertakes from Assignor,  without  recourse and without
representation   or  warranty   (except  as  provided  in  this  Assignment  and
Acceptance) an interest in (i) the Commitment and each of the Committed Loans of
Assignor and (ii) all related  rights,  benefits,  obligations,  liabilities and
indemnities of the Assignor under and in connection  with the Loan Agreement and
the other  Financing  Agreements,  so that  after  giving  effect  thereto,  the
Commitment  of  Assignee  shall be as set forth  below and the Pro Rata Share of
Assignee shall be _______ (__%) percent.

     (b) With  effect on and after the  Effective  Date (as defined in Section 5
hereof),  Assignee  shall be a party to the Loan Agreement and succeed to all of
the rights and be obligated to perform all of the  obligations of a Lender under
the Loan Agreement,  including the requirements  concerning  confidentiality and
the payment of  indemnification,  with a  Commitment  in an amount  equal to the
Assigned  Commitment Amount.  Assignee agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Agreement
are required to be performed by it as a Lender.  It is the intent of the parties
hereto that the  Commitment  of Assignor  shall,  as of the  Effective  Date, be
reduced by an amount equal to the Assigned  Commitment Amount and Assignor shall
relinquish  its  rights  and be  released  from its  obligations  under the Loan
Agreement  to the  extent  such  obligations  have  been  assumed  by  Assignee;
provided,  that,  Assignor  shall not  relinquish its rights under Sections 2.2,
6.4, 6.9,  11.5 and 12.5 of the Loan  Agreement to the extent such rights relate
to the time prior to the Effective Date.

     (c) After giving effect to the  assignment and assumption set forth herein,
on the Effective Date Assignee's Commitment will be $_____________.

     (d) After giving effect to the  assignment and assumption set forth herein,
on the Effective Date  Assignor's  Commitment will be  $______________  (as such
amount may be further  reduced by any other  assignments by Assignor on or after
the date hereof).

     2. Payments.

     (a) As consideration for the sale,  assignment and transfer contemplated in
Section 1  hereof,  Assignee  shall pay to  Assignor  on the  Effective  Date in
immediately  available  funds an  amount  equal to  $____________,  representing
Assignee's Pro Rata Share of the principal amount of all Committed Loans.

     (b) Assignee shall pay to Agent the processing fee in the amount  specified
in Section 13.7(a) of the Loan Agreement.

     3. Reallocation of Payments. Any interest,  fees and other payments accrued
to the  Effective  Date with  respect  to the  Commitment,  Committed  Loans and
outstanding  Letters  of  Credit  shall  be for the  account  of  Assignor.  Any
interest,  fees and other payments  accrued on and after the Effective Date with
respect to the Assigned  Commitment Amount shall be for the account of Assignee.
Each of Assignor  and  Assignee  agrees that it will hold in trust for the other
party any  interest,  fees and other  amounts  which it may receive to which the
other party is entitled pursuant to the preceding  sentence and pay to the other
party any such amounts which it may receive promptly upon receipt.

     4. Independent Credit Decision.  Assignee acknowledges that it has received
a copy of the Loan  Agreement and the Schedules and Exhibits  thereto,  together
with copies of the most  recent  financial  statements  of  Borrowers  and their
Subsidiaries,  and  such  other  documents  and  information  as it  has  deemed
appropriate to make its own credit and legal analysis and decision to enter into
this  Assignment  and  Acceptance  and agrees  that it will,  independently  and
without reliance upon Assignor,  Agent or any Lender and based on such documents
and information as it shall deem  appropriate at the time,  continue to make its
own credit and legal  decisions  in taking or not taking  action  under the Loan
Agreement.

     5. Effective Date; Notices.

     (a)  As  between  Assignor  and  Assignee,  the  effective  date  for  this
Assignment and Acceptance shall be _______________, 200_ (the "Effective Date");
provided,  that,  the following  conditions  precedent have been satisfied on or
before the Effective Date:

     (i)......this  Assignment and Acceptance shall be executed and delivered by
Assignor and Assignee;

     (ii).....the  consent of Agent as required for an effective  assignment  of
the  Assigned  Commitment  Amount by Assignor  to Assignee  shall have been duly
obtained and shall be in full force and effect as of the Effective Date;

     (iii)....written   notice  of  such   assignment,   together  with  payment
instructions,  addresses and related information with respect to Assignee, shall
have been given to Administrative Borrower and Agent;

     (iv).....Assignee  shall pay to Assignor all amounts due to Assignor  under
this Assignment and Acceptance; and

     (v)......the  processing  fee referred to in Section 2(b) hereof shall have
been paid to Agent.

     (b) Promptly  following the execution of this  Assignment  and  Acceptance,
Assignor shall deliver to Administrative  Borrower and Agent for  acknowledgment
by Agent, a Notice of Assignment in the form attached hereto as Schedule 1.

     6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AN AGENT]

     (a) Assignee  hereby  appoints and  authorizes  Assignor in its capacity as
Agent to take such action as agent on its behalf to exercise  such powers  under
the Loan Agreement as are delegated to Agent by Lenders pursuant to the terms of
the Loan Agreement.

     (b) Assignee shall assume no duties or obligations  held by Assignor in its
capacity as Agent under the Loan Agreement.]

     7. Withholding Tax. Assignee (a) represents and warrants to Assignor, Agent
and Borrowers that under  applicable law and treaties no tax will be required to
be withheld by Assignee,  Agent or Borrowers  with respect to any payments to be
made to Assignee hereunder or under any of the Financing Agreements,  (b) agrees
to furnish (if it is organized under the laws of any jurisdiction other than the
United  States or any State  thereof) to Agent and  Borrowers  prior to the time
that Agent or Borrowers are required to make any payment of principal,  interest
or fees hereunder,  duplicate executed originals of either U.S. Internal Revenue
Service  Form  W-8BEN  or  W-8ECI,   as  applicable   (wherein  Assignee  claims
entitlement  to the  benefits  of a tax  treaty  that  provides  for a  complete
exemption from U.S.  federal income  withholding tax on all payments  hereunder)
and agrees to  provide  new such forms  upon the  expiration  of any  previously
delivered form or comparable  statements in accordance  with applicable U.S. law
and regulations and amendments thereto, duly executed and completed by Assignee,
and (c) agrees to comply with all  applicable  U.S.  laws and  regulations  with
regard to such withholding tax exemption.

     8. Representations and Warranties.

     (a)  Assignor  represents  and  warrants  that  (i)  it is  the  legal  and
beneficial  owner of the interest  being  assigned by it hereunder and that such
interest is free and clear of any security interest,  lien, encumbrance or other
adverse claim,  (ii) it is duly organized and existing and it has the full power
and  authority  to take,  and has taken,  all action  necessary  to execute  and
deliver this  Assignment  and  Acceptance  and any other  documents  required or
permitted to be executed or delivered by it in connection  with this  Assignment
and Acceptance and to fulfill its obligations hereunder, (iii) no notices to, or
consents,  authorizations  or approvals of, any Person are required  (other than
any already given or obtained) for its due execution,  delivery and  performance
of this Assignment and Acceptance, and apart from any agreements or undertakings
or filings  required by the Loan Agreement,  no further action by, or notice to,
or filing  with,  any Person is required of it for such  execution,  delivery or
performance,  and (iv) this Assignment and Acceptance has been duly executed and
delivered  by it and  constitutes  the legal,  valid and binding  obligation  of
Assignor,  enforceable  against  Assignor in  accordance  with the terms hereof,
subject,   as   to   enforcement,   to   bankruptcy,   insolvency,   moratorium,
reorganization  and other laws of general  application  relating to or affecting
creditors' rights and to general equitable principles.

     (b)  Assignor   makes  no   representation   or  warranty  and  assumes  no
responsibility  with respect to any  statements,  warranties or  representations
made in or in connection  with the Loan Agreement or any of the other  Financing
Agreements or the execution,  legality, validity,  enforceability,  genuineness,
sufficiency or value of the Loan  Agreement or any other  instrument or document
furnished  pursuant  thereto.  Assignor makes no  representation  or warranty in
connection  with, and assumes no  responsibility  with respect to, the solvency,
financial  condition or  statements  of  Borrowers,  Guarantors  or any of their
respective Affiliates, or the performance or observance by Borrowers, Guarantors
or any  other  Person,  of any of its  respective  obligations  under  the  Loan
Agreement or any other instrument or document furnished in connection therewith.

     (c) Assignee  represents  and warrants  that (i) it is duly  organized  and
existing and it has full power and authority to take, and has taken,  all action
necessary to execute and deliver this  Assignment  and  Acceptance and any other
documents  required or permitted to be executed or delivered by it in connection
with this Assignment and Acceptance,  and to fulfill its obligations  hereunder,
(ii) no notices to, or consents,  authorizations or approvals of, any Person are
required  (other  than any already  given or  obtained)  for its due  execution,
delivery and performance of this  Assignment and Acceptance,  and apart from any
agreements or undertakings or filings required by the Loan Agreement, no further
action by, or notice to, or filing  with,  any Person is required of it for such
execution, delivery or performance; and (iii) this Assignment and Acceptance has
been duly  executed and  delivered by it and  constitutes  the legal,  valid and
binding obligation of Assignee,  enforceable against Assignee in accordance with
the  terms  hereof,  subject,  as to  enforcement,  to  bankruptcy,  insolvency,
moratorium,  reorganization and other laws of general application relating to or
affecting creditors' rights to general equitable principles.

     9. Further  Assurances.  Assignor and Assignee each hereby agree to execute
and deliver such other instruments,  and take such other action, as either party
may reasonably request in connection with the transactions  contemplated by this
Assignment  and  Acceptance,  including  the  delivery  of any  notices or other
documents  or  instruments  to  Borrowers  or Agent,  which may be  required  in
connection with the assignment and assumption contemplated hereby.

     10. Miscellaneous.

     (a) Any  amendment  or  waiver  of any  provision  of this  Assignment  and
Acceptance  shall be in writing and signed by the parties hereto.  No failure or
delay by either  party  hereto  in  exercising  any  right,  power or  privilege
hereunder  shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance  shall be without  prejudice to any
rights with respect to any other for further breach thereof.

     (b) All  payments  made  hereunder  shall be made  without  any  set-off or
counterclaim.

     (c)  Assignor  and  Assignee  shall  each pay its own  costs  and  expenses
incurred  in  connection  with  the  negotiation,   preparation,  execution  and
performance of this Assignment and Acceptance.

     (d) This  Assignment  and  Acceptance  may be  executed  in any  number  of
counterparts  and all of such  counterparts  taken  together  shall be deemed to
constitute one and the same instrument.

     (e) THIS  ASSIGNMENT AND  ACCEPTANCE  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE  WITH THE LAW OF THE STATE OF ILLINOIS,  Assignor  and Assignee  each
irrevocably  submits to the  non-exclusive  jurisdiction of any State or Federal
court  sitting in Cook  County,  Illinois  over any suit,  action or  proceeding
arising out of or relating to this  Assignment and  Acceptance  and  irrevocably
agrees that all claims in respect of such action or proceeding  may be heard and
determined  in  such  Illinois  State  or  Federal  court.  Each  party  to this
Assignment and Acceptance  hereby  irrevocably  waives, to the fullest extent it
may effectively do so, the defense of an  inconvenient  forum to the maintenance
of such action or proceeding.

     (f)  ASSIGNOR  AND  ASSIGNEE  EACH  HEREBY   KNOWINGLY,   VOLUNTARILY   AND
INTENTIONALLY  WAIVE ANY  RIGHTS  THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION  BASED HEREON,  OR ARISING OUT OF, UNDER,  OR IN CONNECTION  WITH
THIS ASSIGNMENT AND ACCEPTANCE,  THE LOAN AGREEMENT,  ANY OF THE OTHER FINANCING
AGREEMENTS  OR ANY RELATED  DOCUMENTS  AND  AGREEMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, OR STATEMENTS (WHETHER ORAL OR WRITTEN).

     IN WITNESS  WHEREOF,  Assignor and Assignee have caused this Assignment and
Acceptance to be executed and delivered by their duly authorized  officers as of
the date first above written.

                                   [ASSIGNOR]

                      By:
                         --------------------------------------------------

                      Title:
                            -----------------------------------------------

                                   [ASSIGNEE]

                         By:
                            --------------------------------------------------

                         Title:
                               -----------------------------------------------

<PAGE>

                                   SCHEDULE 1

                       NOTICE OF ASSIGNMENT AND ACCEPTANCE

                                                                   ___, 20__

                  .........
                  .........
                  .........
Attn.:            .........
      ------------------------------

                  Re:
                     -----------------------------------------

Ladies and Gentlemen:

     Wachovia Capital Finance  Corporation  (Central),  in its capacity as agent
pursuant to the Loan Agreement (as hereinafter defined) acting for and on behalf
of the  financial  institutions  which are  parties  thereto as lenders (in such
capacity, "Agent"), and the financial institutions which are parties to the Loan
Agreement as lenders (individually, each a "Lender" and collectively, "Lenders")
have entered or are about to enter into financing arrangements pursuant to which
Agent and  Lenders  may make loans and  advances  and  provide  other  financial
accommodations to Keystone Consolidated Industries, Inc., Keystone Wire Products
Inc.,   Engineered  Wire  Products,   Inc.  and  F  V  Steel  and  Wire  Company
(collectively,  "Borrowers")  as set forth in the Loan and  Security  Agreement,
dated  August 31, 2005,  by and among  Borrowers,  certain of their  affiliates,
Agent and Lenders (as the same now exists or may hereafter be amended, modified,
supplemented,  extended,  renewed,  restated or replaced, the "Loan Agreement"),
and the other  agreements,  documents and instruments  referred to therein or at
any time executed  and/or  delivered in connection  therewith or related thereto
(all of the foregoing,  together with the Loan Agreement,  as the same now exist
or may hereafter be amended, modified, supplemented, extended, renewed, restated
or  replaced,   being   collectively   referred  to  herein  as  the  "Financing
Agreements").  Capitalized  terms not  otherwise  defined  herein shall have the
respective meanings ascribed thereto in the Loan Agreement.

         1. We hereby give you notice of, and request your consent to, the
assignment by __________________________ (the "Assignor") to
___________________________ (the "Assignee") such that after giving effect to
the assignment Assignee shall have an interest equal to ________ (__%) percent
of the total Commitments pursuant to the Assignment and Acceptance Agreement
attached hereto (the "Assignment and Acceptance"). We understand that the
Assignor's Commitment shall be reduced by $_____________, as the same may be
further reduced by other assignments on or after the date hereof.

     2.  Assignee  agrees  that,  upon  receiving  the  consent of Agent to such
assignment,  Assignee will be bound by the terms of the Loan  Agreement as fully
and to the same extent as if the  Assignee  were the Lender  originally  holding
such interest under the Loan Agreement.

     3. The following administrative details apply to Assignee:

(A) Notice address:

         Assignee name:
                           --------------------------------------------
         Address:
                           --------------------------------------------
         Attention:
                           --------------------------------------------
         Telephone:
                           --------------------------------------------
         Telecopier:
                           --------------------------------------------

(B) Payment instructions:

     Account No.:
                               --------------------------------------------
     At:
                               --------------------------------------------
     Reference:
                               --------------------------------------------
     Attention:
                               --------------------------------------------

     4. You are  entitled  to rely  upon  the  representations,  warranties  and
covenants  of each of Assignor  and Assignee  contained  in the  Assignment  and
Acceptance.

<PAGE>

     IN WITNESS  WHEREOF,  Assignor  and  Assignee  have  caused  this Notice of
Assignment and  Acceptance to be executed by their  respective  duly  authorized
officials, officers or agents as of the date first above mentioned.

                                    Very truly yours,

                               [NAME OF ASSIGNOR]

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

                                            [NAME OF ASSIGNEE]

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

ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:

WACHOVIA CAPITAL FINANCE CORPORATION
(CENTRAL) as Agent

By:               .........
   --------------------------------------------------
Title:            .........
      -----------------------------------------------

<PAGE>

                                    EXHIBIT B
                                       to
                           LOAN AND SECURITY AGREEMENT

                             INFORMATION CERTIFICATE

<PAGE>

                                    EXHIBIT C
                                       to
                           LOAN AND SECURITY AGREEMENT

                             Compliance Certificate

To:      Wachovia Capital Finance Corporation (Central) as Agent
         150 S. Wacker Drive, Suite 2200
         Chicago, Illinois  60606

Ladies and Gentlemen:

     I hereby  certify to you in my capacity  as an officer  pursuant to Section
9.6 of the Loan Agreement (as defined below) as follows:

     1. I am the duly elected Chief Financial  Officer of Keystone  Consolidated
Industries,  Inc., Keystone Wire Products Inc.,  Engineered Wire Products,  Inc.
and F V Steel and Wire Company  (collectively,  "Borrowers").  Capitalized terms
used herein  without  definition  shall have the meanings given to such terms in
the Loan and Security  Agreement,  dated August 31, 2005, by and among  Wachovia
Capital Finance  Corporation  (Central) as agent for the financial  institutions
party  thereto  as  lenders  (in  such  capacity,  "Agent")  and  the  financial
institutions party thereto as lenders (collectively,  "Lenders"),  Borrowers and
certain of their  affiliates  (as such Loan and  Security  Agreement is amended,
modified or supplemented, from time to time, the "Loan Agreement").

     2. I have reviewed the terms of the Loan Agreement,  and have made, or have
caused to be made under my  supervision,  a review in  reasonable  detail of the
transactions and the financial condition of Borrowers and Guarantors, during the
immediately preceding fiscal month.

     3. The review  described in Section 2 above did not disclose the  existence
during  or at the end of such  fiscal  month,  and I have  no  knowledge  of the
existence and  continuance  on the date hereof,  of any condition or event which
constitutes a Default or an Event of Default,  except as set forth on Schedule I
attached hereto. Described on Schedule I attached hereto are the exceptions,  if
any, to this Section 3 listing, in detail, the nature of the condition or event,
the period  during  which it has  existed and the action  which any  Borrower or
Guarantor  has  taken,  is  taking,  or  proposes  to take with  respect to such
condition or event.

     5.  Attached  hereto  as  Schedule  III  are  the   calculations   used  in
determining,  as of  the  end  of  such  fiscal  month  or  fiscal  quarter,  as
applicable,  whether  Borrowers  and  Guarantors  are  in  compliance  with  the
covenants  set forth in Section 9.17 and Section 9.18 of the Loan  Agreement for
such fiscal month or fiscal quarter, as applicable.

<PAGE>

     The  foregoing   certifications   are  made  and  delivered   this  day  of
___________, 20__.

                                            Very truly yours,

                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                           KEYSTONE WIRE PRODUCTS INC.
                         ENGINEERED WIRE PRODUCTS, INC.
                           F V STEEL AND WIRE COMPANY

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

<PAGE>

                                    EXHIBIT D
                                       to
                           LOAN AND SECURITY AGREEMENT

                                CLOSING CHECKLIST

<PAGE>

                                 SCHEDULE 1.37

                                EXISTING LENDERS

<PAGE>

                                 SCHEDULE 1.38

                           EXISTING LETTERS OF CREDIT

<PAGE>

                                 SCHEDULE 1.73

                                PERMITTED HOLDERSEXECUTION COPY                                                    CONFIDENTIAL

                      AGREEMENT REGARDING SHARED INSURANCE

This Agreement Regarding Shared Insurance  (hereinafter the "Agreement") is made
as of the 30th day of October 2003, by and between

                       CompX International Inc. ("CompX")
                        Contran Corporation ("Contran");
              Keystone Consolidated Industries, Inc. ("Keystone");
                          Kronos Worldwide, Inc. ("KI")
                           NL Industries, Inc. ("NL");
                   Titanium Metals Corp. ("Titanium Metals");
                                       and
                             Valhi, Inc. ("Valhi");

(For  convenience,  each of the above entities  and/or its  subsidiaries  may be
referred  to as a  "Party,"  and  collectively  they may be  referred  to as the
"Parties").

                                WITNESSETH THAT:

WHEREAS,  the Parties are affiliated  companies that have been,  are, and in the
future may be insured under a number of shared  insurance  policies that provide
shared limits of available insurance; and

WHEREAS,  although as of the date of this  Agreement the Parties  separately and
collectively  never  have  exhausted  the  total  limits of  insurance  coverage
available under any shared insurance agreement,  the Parties wish to ensure that
claims asserted under any of the shared insurance policies by any one Party will
not  unreasonably  deprive other  Parties of insurance  that may be available to
them.

<PAGE>

                                   AGREEMENTS:

NOW,  THEREFORE,  in  full  consideration  of the  foregoing  and of the  mutual
agreements  herein  contained,  and intending to be legally  bound,  the Parties
agree as follows:

1.       Definitions

The following  definitions  will apply to the listed terms  wherever those terms
appear  throughout  the  Agreement  as well as in any  exhibits  or  attachments
thereto. Moreover, each defined term stated in a singular form shall include the
plural form,  each defined term stated in plural form shall include the singular
form, and each defined term stated in the masculine form or in the feminine form
shall include the other.

     A.   "Shared  Insurance Policy" shall mean any one or more of the insurance
          policies listed on Exhibit "A" hereto, as well as any past, present or
          future insurance  policies that provide  insurance  coverage to all of
          the Parties to this  Agreement  and where the policy  provides  for an
          aggregate limit for all claims during the policy period.

     B.   "Covered  Claim" shall mean any claim for insurance  coverage that any
          Party may assert at any time under any Shared Insurance Policy that is
          covered  in whole or in part  under the terms  and  conditions  of the
          Shared Insurance Policy in question,  or that would be covered but for
          the fact that all  available  limits of insurance  coverage  under the
          Shared  Insurance  Policy in question  already have been  exhausted by
          another claim or claims of any Party.

     C.   "Reimbursed  Covered Claim" shall mean any Covered Claim for which any
          Party  actually  has  received a total or partial  insurance  coverage
          under any Shared Insurance Policy.

     D.   "Remaining Covered Claim" shall mean any Covered Claim or portion of a
          Covered Claim of any Party for which the available limits of insurance
          coverage under the Shared  Insurance  Policy in question  already have
          been  exhausted by a Reimbursed  Covered Claim or  Reimbursed  Covered
          Claims of any Party or Parties.

2. Agreement

Whenever the available  limits of insurance  under any Shared  Insurance  Policy
have been exhausted by a Reimbursed  Covered Claim or Reimbursed  Covered Claims
submitted by one or more of the Parties, this Agreement will provide a mechanism
by which the  Parties  will share  financial  responsibility  for all  Remaining
Covered Claims.

Financial responsibility for each Remaining Covered Claim shall be divided among
those  Parties  with Covered  Claims for that policy.  Each Party other than the
holder of a particular Remaining Covered Claim shall indemnify and reimburse the
holder of that  Remaining  Covered  Claim  for a  percentage  of that  Remaining
Covered  Claim equal to the  percentage  of Covered  Claims of the  Indemnifying
Party bears to the sum of all Parties' Covered Claims for the particular policy.

Any  indemnification  obligation required by this Agreement shall be paid within
60 days after a Party requests in writing  indemnification from another Party or
Parties  with  respect  to a  Remaining  Covered  Claim  and  provides  a  brief
description of the Remaining  Covered Claim,  as well as  identification  of the
Shared  Insurance  Policy  that would,  but for  exhaustion  of limits,  provide
coverage for the  Remaining  Covered  Claim.  If the insurer  issuing the Shared
Insurance  Policy in  question  has taken the  position  that the claim would be
covered and payable but for prior  exhaustion  of available  limits of coverage,
the claim  conclusively  will be  considered  by the  Parties to be a  Remaining
Covered Claim.  If the insurer issuing the Shared  Insurance  Policy in question
has not or will not  expressly  state that a claim  would be covered and payable
but for  exhaustion,  the Parties will attempt in good faith to agree whether or
not the claim is a Remaining  Covered Claim. If the Parties cannot agree whether
a claim is a Remaining  Covered Claim,  the question will be settled pursuant to
the "Dispute Resolution" provisions of this Agreement.

3. Confidentiality

The  Parties  agree that all  matters  relating  to the terms,  negotiation  and
implementation of this Agreement,  including documents and information exchanged
during  negotiations or relating to indemnification  obligations and claims made
hereunder,  shall be confidential and are not to be disclosed except as required
by law or regulation or by order of court or by  agreement,  in writing,  of the
Parties,  except  that,  provided  recipients  agree  to keep  such  information
confidential, the Agreement may be disclosed to any officer, director, or parent
corporation  of any Party and any  outside  counsel,  consultants,  auditors  or
accountants of any Party.

In the event a private  litigant,  by way of  document  request,  interrogatory,
subpoena,  or questioning at deposition or trial,  attempts to compel disclosure
of anything protected by this Section,  the Party from whom disclosure is sought
shall  decline to provide  the  requested  information  on the ground  that this
Agreement prevents such disclosure.  In the event such private litigant seeks an
Order from any court or governmental  body to compel such disclosure,  or in the
event that a court,  government  official,  or governmental body (other than the
Inland  Revenue or Internal  Revenue  Service or other  similar  U.S. or foreign
governmental  taxation  authorities) requests or requires disclosure of anything
protected  by this  Agreement,  the Party from whom  disclosure  is sought shall
promptly give written notice by facsimile or  hand-delivery  to the other Party,
and shall  promptly  provide copies of all notice  papers,  orders,  requests or
other  documents in order to allow each Party to take such  protective  steps as
may be appropriate in order to preserve the confidentiality of such information.
Notice  shall be made under this  Paragraph  to the persons  identified  in this
Agreement.

4. No Modification

No change or  modification of this Agreement shall be valid unless it is made in
writing and signed by each of the Parties.

5. Execution

There will be two signed  originals of this  Agreement.  This  Agreement  may be
executed  and  delivered  in  counterparts,  each of which when so executed  and
delivered  shall be deemed an original and shall  together  constitute an entire
Agreement.  This  Agreement may be executed and delivered by facsimile,  each of
which when so executed and delivered shall be deemed an original.

6. Governing Law

This  Agreement  shall be governed by and shall be construed in accordance  with
the laws of the State of Texas  without  giving  effect to any  choice of law or
conflict of law provision or rule.

7. Dispute Resolution

     A.   The Parties agree to use their best efforts to resolve claims relating
          to this Agreement prior to instituting  arbitration proceedings as set
          forth below. In the event such efforts are  unsuccessful,  the Parties
          agree that any controversy or claim arising out of or relating to this
          Agreement or any breach thereof,  including  without  limitation,  any
          disputes  concerning the  calculation of any settlement  payment under
          this  Agreement,  shall be submitted to final and binding  arbitration
          before a single arbitrator, who shall be a former judge or an attorney
          licensed to practice law in Texas with at least ten years' experience,
          and whom the Parties shall choose.  If the Parties cannot agree on the
          arbitrator,  the arbitrator  shall be selected in accordance  with the
          Commercial  Arbitration Rules of the American Arbitration  Association
          that  are  in  effect  at  the  time  the  dispute  is   submitted  to
          arbitration.

     B.   To the extent the Parties are unable to agree,  the  commercial  rules
          and procedures of the American  Arbitration  Association  that were in
          effect on the date of execution of this  Agreement  shall apply to the
          arbitration. Texas law shall govern any arbitration.

     C.   Any  arbitration  conducted in accordance with this Agreement shall be
          conducted  in Texas or such other  location  as the Parties may agree.
          The Parties  shall abide by the  arbitrator's  award,  and judgment on
          that  award may be  entered by a court of  competent  jurisdiction  in
          Texas , in accordance with Texas law.

8. Notices

Unless  another  person is  designated,  in  writing,  for  receipt  of  notices
hereunder,  notices to the  respective  Parties  shall be sent to the  following
person by facsimile transmission or overnight courier:

      CompX International Inc.:                  Darryl R. Halbert
                                                 Three Lincoln Centre
                                                 5430 LBJ Freeway
                                                 Suite 1700
                                                 Dallas, Texas  75240
                                                 (972) 233-1700 phone
                                                 (972) 448-1419 fax

      Contran Corporation:                       J. Mark Hollingsworth
                                                 Three Lincoln Centre
                                                 5430 LBJ Freeway
                                                 Suite 1700
                                                 Dallas, Texas  75240
                                                 (972) 233-1700 phone
                                                 (972) 448-1445 fax

       Keystone Consolidated Industries, Inc.    Bert D. Downing, Jr.
                                                 Three Lincoln Centre
                                                 5430 LBJ Freeway
                                                 Suite 1700
                                                 Dallas, Texas  75240
                                                 (972) 233-1700 phone
                                                 (972) 448-1408 fax

      Kronos Worldwide, Inc.                     Robert D. Graham
                                                 Three Lincoln Centre
                                                 5430 LBJ Freeway
                                                 Suite 1700
                                                 Dallas, Texas  75240
                                                 (972) 233-1700 phone
                                                 (972) 448-1445 fax

      NL Industries, Inc.                        Robert D. Graham
                                                 Three Lincoln Centre
                                                 5430 LBJ Freeway
                                                 Suite 1700
                                                 Dallas, Texas  75240
                                                 (972) 233-1700 phone
                                                 (972) 448-1445 fax

      Titanium Metals Corporation:               Joan Prusse
                                                 1999 Broadway
                                                 Suite 4300
                                                 Denver, Colorado  80202
                                                 303-296-5600 phone
                                                 303-291-1990 fax

      Valhi, Inc.:                               J. Mark Hollingsworth
                                                 Three Lincoln Centre
                                                 5430 LBJ Freeway
                                                 Suite 1700
                                                 Dallas, Texas  75240
                                                 (972) 233-1700 phone
                                                 (972) 448-1445 fax

9. Integration

This Agreement constitutes the entire Agreement between the Parties with respect
to the subject matter hereof,  and  supersedes all  discussions,  agreements and
understandings, both written and oral, among the Parties with respect thereto.

10. Severability

This  Agreement  shall be binding  upon and inure to the  benefit of the Parties
hereto.  In case any one or more of the  provisions  contained in this Agreement
shall be  invalid,  illegal  or  unenforceable  in any  respect,  the  validity,
legality and enforceability of the remaining  provisions  contained herein shall
not in any way be affected or impaired hereby.

11. Term

This  Agreement  may be  terminated  by each of the Parties  upon one (1) year's
written notice to the other Parties.

12. Assignment

This  Agreement  shall not be  assignable by any Party without the prior written
consent  of the other  except  that any  successor  to the Party may  assume the
rights  and  obligations  of the Party  under  this  Agreement.  Nothing in this
Agreement,  expressed or implied,  is intended to confer upon any person,  other
than the Parties hereto and their successors and assigns, any rights or remedies
under or by reason of this Agreement.

IN WITNESS  WHEREOF,  the Parties  have  executed  this  Agreement by their duly
authorized representatives.

                            CompX International Inc.

                             By: /s/ Darryl Halbert

                          Its: Chief Financial Officer

                             Date: October 31, 2003

                      Contran Corporation

                      By:      /s/ J. Mark Hollingsworth

                      Its:     Vice President, General Counsel

                             Date: November 10, 2003

                     Keystone Consolidated Industries, Inc.

                            By: /s/ Bert Downing, Jr.

                            Its: Vice President, CFO

                             Date: October 28, 2003

<PAGE>

                             Kronos Worldwide, Inc.

                        By:      /s/ Robert D. Graham

                        Its:     Vice President, General Counsel

                             Date: November 7, 2003

                                            NL Industries, Inc.

                            By:      /s/ Robert D. Graham

                            Its:     Vice President, General Counsel

                             Date: November 7, 2003

                          Titanium Metals Corporation.

                             By: /s/ Joan H. Prusse

                             Its:     Vice President, General Counsel

                             Date: November 7, 2003

                                            Valhi, Inc.

                         By:      /s/ J. Mark Hollingsworth

                         Its:     Vice President, General Counsel

                             Date: November 10, 2003

<PAGE>

                                    EXHIBIT A

                            Shared Insurance Policies

1. Directors and Officers Liability (Primary and Excess)

2. Fiduciary liability

3. General Liability (U.S)

4. General Liability (Canada)

5. Excess Liability

6. Property

7. Deductible Buydown

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