Document:

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                                                                    EXHIBIT 10.3

                         FLOW INTERNATIONAL CORPORATION
                   VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
                               AND TRUST AGREEMENT
  (Amended and Restated Effective January 1, 2002 (and Certain Earlier Dates))

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                         FLOW INTERNATIONAL CORPORATION
                   VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
                               AND TRUST AGREEMENT
  (Amended and Restated Effective January 1, 2002 (and Certain Earlier Dates))
                                Table of Contents

<TABLE>
<S>                                                                             <C>
   ARTICLE I - DEFINITIONS                                                      1
1.01  Plan......................................................................1
1.02  Employer..................................................................1
1.03  Trustee...................................................................1
1.04  Plan Administrator........................................................1
1.05  Advisory Committee........................................................1
1.06  Employee..................................................................1
1.07  Highly Compensated Employee...............................................1
1.08  Participant...............................................................1
1.09  Beneficiary...............................................................1
1.10  COMPENSATION DEFINITIONS..................................................1
1.11  Account...................................................................2
1.12  Account Balance or Accrued Benefit........................................2
1.13  Nonforfeitable or Vested..................................................3
1.14  Plan Year.................................................................3
1.15  Effective Date............................................................3
1.16  Plan Entry Date...........................................................3
1.17  Accounting Date...........................................................3
1.18  Trust.....................................................................3
1.19  Trust Fund................................................................3
1.20  Nontransferable Annuity...................................................3
1.21  ERISA.....................................................................3
1.22  Code......................................................................3
1.23  Service...................................................................3
1.24  Hour of Service...........................................................3
1.25  Disability................................................................4
1.26  Service for Predecessor Employer..........................................4
1.27  Related Employer..........................................................4
1.28  Leased Employees..........................................................5
1.29  Determination of Top Heavy Status.........................................5
1.30  "Employer Stock\..........................................................6
1.31  "Employer Stock Fund\.....................................................6
1.32  PLAN MAINTAINED BY MORE THAN ONE EMPLOYER.................................6
1.33  " Protected Benefit\......................................................6

   ARTICLE II - EMPLOYEE PARTICIPANTS                                           7
2.01  ELIGIBILITY...............................................................7
2.02  YEAR OF SERVICE - PARTICIPATION...........................................7
2.03  BREAK IN SERVICE - PARTICIPATION..........................................7
</TABLE>

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<TABLE>
<S>                                                                             <C>
2.04  PARTICIPATION UPON RE-EMPLOYMENT..........................................7

   ARTICLE III  EMPLOYER CONTRIBUTIONS AND FORFEITURES                          9
3.01  AMOUNT....................................................................9
3.02  DETERMINATION OF CONTRIBUTION.............................................9
3.03  TIME OF PAYMENT OF CONTRIBUTION...........................................9
3.04  CONTRIBUTION ALLOCATION...................................................9
3.05  FORFEITURE ALLOCATION.....................................................11
3.06  ACCRUAL OF BENEFIT........................................................11
3.07  LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS......................11
3.08  ESTIMATING COMPENSATION...................................................12
3.09  DETERMINATION BASED ON ACTUAL COMPENSATION................................12
3.10  DISPOSITION OF ALLOCATED EXCESS AMOUNT....................................12
3.11  OTHER DEFINED CONTRIBUTION PLANS LIMITATION...............................12
3.12  DEFINITIONS - ARTICLE III.................................................12

   ARTICLE IV - PARTICIPANT CONTRIBUTIONS                                       14
4.01  PARTICIPANT VOLUNTARY CONTRIBUTIONS.......................................14
4.02  [Reserved]................................................................14
4.03  ROLLOVER CONTRIBUTIONS....................................................14
4.04  ROLLOVER CONTRIBUTION - FORFEITABILITY....................................14
4.05  ROLLOVER CONTRIBUTION WITHDRAWAL/DISTRIBUTION.............................14
4.06  ROLLOVER CONTRIBUTION - ACCRUED BENEFIT...................................14

   ARTICLE V - TERMINATION OF SERVICE - PARTICIPANT VESTING                     15
5.01  NORMAL RETIREMENT AGE.....................................................15
5.02  PARTICIPANT DISABILITY OR DEATH...........................................15
5.03  VESTING SCHEDULE..........................................................15
5.04  CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF
         FORFEITED ACCRUED BENEFIT..............................................15
5.05  ACCOUNTING FOR REPAID AMOUNT..............................................16
5.06  YEAR OF SERVICE - VESTING.................................................16
5.07  BREAK IN SERVICE - VESTING................................................16
5.08  INCLUDED YEARS OF SERVICE - VESTING.......................................16
5.09  FORFEITURE OCCURS.........................................................16

   ARTICLE VI - DISTRIBUTIONS                                                   18
6.01  TIMING OF DISTRIBUTION....................................................18
6.02  REQUIRED MINIMUM DISTRIBUTIONS............................................20
6.03  METHOD OF DISTRIBUTION....................................................22
6.04  ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES...............22
6.05  [Reserved]................................................................22
6.06  [Reserved]................................................................22
6.07  DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS.............................22
6.08. DEFAULTED LOAN--TIMING OF OFFSET..........................................23
6.09  [Reserved]................................................................23
6.10. DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS........................23
</TABLE>

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<TABLE>
<S>                                                                             <C>
   ARTICLE VII - EMPLOYER ADMINISTRATIVE PROVISIONS                             25
7.01  INFORMATION TO COMMITTEE..................................................25
7.02  NO LIABILITY..............................................................25
7.03  INDEMNITY OF COMMITTEE....................................................25
7.04  EMPLOYER DIRECTION OF INVESTMENT..........................................25
7.05  AMENDMENT TO VESTING SCHEDULE.............................................25

   ARTICLE VIII  PARTICIPANT ADMINISTRATIVE PROVISIONS                          26
8.01  BENEFICIARY DESIGNATION...................................................26
8.02  NO BENEFICIARY DESIGNATION................................................26
8.03  PERSONAL DATA TO COMMITTEE................................................26
8.04  ADDRESS FOR NOTIFICATION..................................................26
8.05  ASSIGNMENT OR ALIENATION..................................................27
8.06  NOTICE OF CHANGE IN TERMS.................................................27
8.07  LITIGATION AGAINST THE TRUST..............................................27
8.08  INFORMATION AVAILABLE.....................................................27
8.09  CLAIMS PROCEDURE FOR DENIAL OF BENEFITS...................................27
8.10  PARTICIPANT DIRECTION OF INVESTMENT.......................................27

   ARTICLE IX - ADVISORY COMMITTEE-DUTIES WITH RESPECT TO PARTICIPANTS'
      ACCOUNTS                                                                  29
9.01  MEMBERS' COMPENSATION, EXPENSES...........................................29
9.02  TERM......................................................................29
9.03  POWERS....................................................................29
9.04  GENERAL...................................................................29
9.05  FUNDING POLICY............................................................29
9.06  MANNER OF ACTION..........................................................29
9.07  AUTHORIZED REPRESENTATIVE.................................................29
9.08  INTERESTED MEMBER.........................................................29
9.09  INDIVIDUAL ACCOUNTS.......................................................30
9.10  VALUE OF PARTICIPANT'S ACCRUED BENEFIT....................................30
9.11  ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS....................30
9.12  INDIVIDUAL STATEMENT......................................................30
9.13  ACCOUNT CHARGED...........................................................31
9.14  LOST PARTICIPANTS.........................................................31
9.15  PLAN CORRECTION...........................................................31
9.16  NO RESPONSIBILITY FOR OTHERS..............................................31
9.17  NOTICE, DESIGNATION, ELECTION, CONSENT AND WAIVER.........................32

   ARTICLE X  TRUSTEE, POWERS AND DUTIES                                        33
10.01 ACCEPTANCE................................................................33
10.02 RECEIPT OF CONTRIBUTIONS..................................................33
10.03 INVESTMENT POWERS.........................................................33
10.04 RECORDS AND STATEMENTS....................................................34
10.05 FEES AND EXPENSES FROM FUND...............................................34
10.06 PARTIES TO LITIGATION.....................................................34
</TABLE>

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<TABLE>
<S>                                                                             <C>
10.07 PROFESSIONAL AGENTS.......................................................34
10.08 DISTRIBUTION OF CASH OR PROPERTY..........................................35
10.09 DISTRIBUTION DIRECTIONS...................................................35
10.10 THIRD PARTY...............................................................35
10.11 RESIGNATION...............................................................35
10.12 REMOVAL...................................................................35
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE......................................35
10.14 VALUATION OF TRUST........................................................35
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER APPOINTED.................35
10.16 INVESTMENT IN GROUP TRUST FUND............................................35
10.17 DUTIES PERTAINING TO THE EMPLOYER STOCK FUND..............................36

   ARTICLE XI - PROVISIONS RELATING TO INSURANCE & INSURANCE COMPANY            38
11.01 INSURANCE BENEFIT.........................................................38
11.02 LIMITATION ON LIFE INSURANCE PROTECTION...................................38
11.03 DEFINITIONS...............................................................38
11.04 DIVIDEND PLAN.............................................................39
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT................................39
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS...................39
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE.........................39
11.08 ACQUITTANCE...............................................................39
11.09 DUTIES OF INSURANCE COMPANY...............................................39

   ARTICLE XII - MISCELLANEOUS                                                  40
12.01 EVIDENCE..................................................................40
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION.....................................40
12.03 FIDUCIARIES NOT INSURERS..................................................40
12.04 WAIVER OF NOTICE..........................................................40
12.05 SUCCESSORS................................................................40
12.06 WORD USAGE................................................................40
12.07 STATE LAW.................................................................40
12.08 EMPLOYMENT NOT GUARANTEED.................................................40

   ARTICLE XIII - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION                     41
13.01 EXCLUSIVE BENEFIT.........................................................41
13.02 AMENDMENT BY EMPLOYER.....................................................41
13.03 DISCONTINUANCE............................................................41
13.04 FULL VESTING ON TERMINATION...............................................41
13.05 MERGER/DIRECT TRANSFER....................................................41
13.06 POST TERMINATION PROCEDURE AND DISTRIBUTION...............................42
13.07 TRANSFER OF ASSETS FROM THE TRUSTEE OF THE FLOW INTERNATIONAL
         CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN..............................43

   ARTICLE XIV - PROVISIONS RELATING TO THE CODE (S)401(k) ARRANGEMENT          44
14.01 401(k) ARRANGEMENT........................................................44
14.02 DEFINITIONS...............................................................44
14.03 ANNUAL ELECTIVE DEFERRAL LIMITATION.......................................46
</TABLE>

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<TABLE>
<S>                                                                             <C>
14.04 ACTUAL DEFERRAL PERCENTAGE (ADP) TEST.....................................46
14.05 ACTUAL CONTRIBUTION PERCENTAGE (ACP) TEST.................................47
14.06 MULTIPLE USE LIMITATION...................................................49

   APPENDIX A - ACCOUNTS TRANSFERRED FROM SPIDER STAGING CORPORATION 401(k)
      PLAN AND CERTAIN EMPLOYEES OF SPIDER STAGING CORPORATION                  50
1.01  DEFINITIONS...............................................................50
1.02  CONTINUING PARTICIPANTS...................................................50
1.03  ELIGIBILITY COMPUTATION PERIOD............................................50
1.04  CREDITING SERVICE FOR ELIGIBILITY.........................................50
1.05  VESTING CREDIT............................................................50
1.06  DISTRIBUTIONS TO VESTED PARTICIPANTS UNDER SPIDER STAGING CORPORATION
         401(k) PLAN OTHER THAN 1992 SPIDER STAGING EMPLOYEES...................50
1.07  VALUATION AND TRANSFER OF ACCOUNTS UNDER THE SPIDER STAGING
         CORPORATION 401(k) SAVINGS PLAN........................................50
1.08. PROTECTED BENEFITS........................................................50
1.09. FORFEITURES...............................................................50
1.10. SEPARATE ACCOUNTS.........................................................50
1.11. DEFAULT ON A LOAN MADE UNDER SPIDER STAGING PLAN..........................50
1.12  PARTICIPANT-DIRECTED INVESTMENT...........................................51
1.13  EFFECTIVE DATE............................................................51

   APPENDIX B - CERTAIN EMPLOYEES OF ASI ROBOTIC SYSTEMS DIVISION OF CARGILL
      DETROIT CORPORATION                                                       52
1.01  DEFINITIONS...............................................................52
1.02  CREDITING SERVICE FOR ELIGIBILITY.........................................52
1.03  PLAN ENTRY DATE...........................................................52
1.04  CREDITING SERVICE FOR VESTING.............................................52
1.13  EFFECTIVE DATE............................................................52

   APPENDIX C - CERTAIN EMPLOYEES OF FLOW AUTOMATION SYSTEMS CORPORATION        53
1.01  DEFINITIONS...............................................................53
1.02  CREDITING SERVICE FOR ELIGIBILITY.........................................53
1.03  CREDITING SERVICE FOR VESTING.............................................53
1.04  EFFECTIVE DATE............................................................53

   APPENDIX D - FORMER CIS ROBOTICS EMPLOYEES                                   54
1.01  DEFINITIONS...............................................................54
1.02  CREDITING SERVICE FOR ELIGIBILITY.........................................54
1.03  VESTING CREDIT............................................................54
1.04  TRANSFERRED ACCOUNTS......................................................54
1.05  EFFECTIVE DATE............................................................54

   APPENDIX E - CERTAIN FORMER EMPLOYEES OF  SPEARHEAD AUTOMATED SYSTEMS, INC.  55
1.01  DEFINITIONS...............................................................55
1.02  CREDITING SERVICE FOR ELIGIBILITY.........................................55
1.03  PLAN ENTRY DATE AND ELIGIBILITY...........................................55
</TABLE>

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<TABLE>
<S>                                                                             <C>
1.04  CREDITING SERVICE FOR VESTING.............................................55
1.05  EFFECTIVE DATE............................................................55

   Execution Page                                                               56
</TABLE>

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                         FLOW INTERNATIONAL CORPORATION
                   VOLUNTARY PENSION AND SALARY DEFERRAL PLAN
                               AND TRUST AGREEMENT

  (Amended and Restated Effective January 1, 2002 (and Certain Earlier Dates))

     Flow International Corporation (the "Employer"), a corporation organized
under the laws of the State Delaware, makes this Agreement with Security Trust
Company as Trustee.

                                   WITNESSETH

     The Flow International Corporation Voluntary Pension and Salary Deferral
Plan, originally adopted effective October 1, 1986 by Flow Systems, Inc. (now
Flow International Corporation, a Washington corporation), for the benefit of
its Employees, is hereby amended and restated by Flow International Corporation,
effective January 1, 2002 to read in its entirety as set forth in this Agreement
between the Employer and the Trustee with regard to the Trust Fund under the
Plan. The provisions of the Plan as amended and restated in this document shall
apply solely to an Employee whose employment with the Employer terminates on or
after January 1, 2002.

     The Employer intends that the Plan as so amended and restated shall
continue to be maintained exclusively for the purpose of providing benefits to
the Plan Participants and their beneficiaries and for defraying the reasonable
expenses of administering the Plan. The Employer further intends that the Plan
shall at all times be qualified under Section 401(a) of the Code and that the
Plan shall meet the special requirements of Sections 401(k) and 401(m) of the
Code and that the Trust, which also constitutes a part of the Plan, shall at all
times be a trust exempt from taxation under Section 501(a) of the Code.

     Now, therefore, in consideration of their mutual covenants, the Employer
and the Trustee agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

     1.01 "Plan" means the Flow International Corporation Voluntary Pension and
Salary Deferral Plan established and continued by the Employer in the form of
this Agreement, as it may be amended from time to time.

     1.02 "Employer" means Flow International Corporation and its successors, or
any other employer who with the written consent of Flow International
Corporation adopts this Plan. As of January 1, 2001, Flow Autoclave Systems,
Inc. has adopted this Plan with the written consent of Flow International
Corporation.

     1.03 "Trustee" means Security Trust Company or any successor in office who
in writing accepts the position of Trustee.

     1.04 "Plan Administrator" means Flow International Corporation unless Flow
International Corporation designates another person to hold the position of Plan
Administrator. In addition to his other duties, the Plan Administrator has full
responsibility for compliance with the reporting and disclosure rules under
ERISA as respects this Agreement.

     1.05 "Advisory Committee" means the Employer's Advisory Committee as from
time to time constituted.

     1.06 "Employee" means any common-law employee of the Employer.

     1.07 "Highly Compensated Employee" means an Employee who, during the Plan
Year or during the preceding Plan Year is a more than 5% owner of the Employer
(applying the constructive ownership rules of Code (S)318); or who, during the
preceding Plan Year had Compensation in excess of $80,000 (as adjusted by the
Commissioner of Internal Revenue for the relevant year).

     1.08 "Participant" is an Employee who is eligible to be and becomes a
Participant in accordance with the provisions of Section 2.01.

     1.09 "Beneficiary" is a person designated by a Participant under Article
VIII who is or may become entitled to a benefit under the Plan. A Beneficiary
who becomes entitled to a benefit under the Plan remains a Beneficiary under the
Plan until the Trustee has fully distributed his benefit to him. A Beneficiary's
right to (and the Plan Administrator's, the Advisory Committee's or Trustee's
duty to provide to the Beneficiary) information or data concerning the Plan does
not arise until he first becomes entitled to receive a benefit under the Plan.

     1.10 COMPENSATION DEFINITIONS. Any reference in this Plan to Compensation
is a reference to the definition in this Section 1.10, unless the Plan reference
specifies a modification to this definition. The Advisory Committee will take
into account only Compensation actually paid for the relevant period.

(A) General Definition of Compensation.

                                       1

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     All wages, salaries, fees for professional service and other amounts
(whether or not paid in cash) for personal services actually rendered in the
course of employment with the Employer maintaining the plan, but only to the
extent includible in gross income. This definition of Compensation includes, but
is not limited to, commissions paid salespersons, compensation for services on
the basis of a percentage of profits, commissions on insurance premiums, tips,
bonuses, fringe benefits and reimbursements or other expense allowances under a
nonaccountable plan as described in Treas. Reg. (S)1.62-2(c))). This definition
of "Compensation" does not include:

     (a) Employer contributions to a plan of deferred compensation to the extent
     the contributions are not included in the gross income of the Employee for
     the taxable year in which contributed, Employer contributions on behalf of
     an Employee to a Simplified Employee Pension Plan to the extent such
     contributions are excludible from the Employee's gross income, and any
     distributions from a plan of deferred compensation, regardless of whether
     such amounts are includible in the gross income of the Employee when
     distributed.

     (b) Amounts realized from the exercise of a non-qualified stock option, or
     when restricted stock (or property) held by an Employee either becomes
     freely transferable or is no longer subject to a substantial risk or
     forfeiture.

     (c) Amounts realized from the sale, exchange or other disposition of stock
     acquired under a qualified stock option described in Part II, Subchapter D,
     Chapter 1 of the Code.

     (d) Other amounts which receive special tax benefits, such as premiums for
     group term life insurance (but only to the extent that the premiums are not
     includible in the gross income of the Employee), or contributions made by
     an Employer (whether or not under a salary reduction agreement) toward the
     purchase of an annuity contract described in Code (S)403(b) (whether or
     not the contributions are excludible from the gross income of the
     Employee).

     For purposes of this Section 1.10(a), Compensation excludes reimbursements
(even if includible in gross income or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation and welfare benefits,
and includes "Elective Contributions." Elective Contributions are amounts
excludible from the Employee's gross income under Code (S)(S)125, 132(f)(4),
402(e)(3), 402(h)(2), 403(b), 408(p) or 457, and contributed by the Employer, at
the Employee's election, to a cafeteria plan, a qualified transportation fringe
benefit plan, a 401(k) arrangement, a SARSEP, a tax-sheltered annuity, a SIMPLE
plan or a Code (S)457 plan. Notwithstanding the preceding sentence, amounts
described in (S)132(f)(4) are not Elective Contributions until Plan Years
beginning on or after January 1, 2001, unless the Advisory Committee
operationally has included such amounts effective as of an earlier Plan Year
beginning no earlier than January 1, 1998.

(B) Definition of Compensation for Allocation Purposes.

     See Section 1.10(A).

(C) Compensation Dollar Limitation.

     For any Plan Year, the Advisory Committee in allocating contributions under
Article III, shall not take into account more than $150,000 (or such larger or
smaller amount as the Commissioner of Internal Revenue may prescribe) of any
Participant's Compensation. Notwithstanding the foregoing, an Employee under a
401(k) arrangement may make elective deferrals with respect to Compensation
which exceeds the Plan Year Compensation limitation, provided such deferrals
otherwise satisfy Code (S)402(g) and other applicable limitations.

(D) Special definition for salary reduction contributions.

     See Section 1.10(A).

     1.11 "Account" means the following separate account(s) which the Advisory
Committee or the Trustee maintains for a Participant under the Plan:

       Type of Contributions                       Name of Account
       ---------------------                       ---------------
Salary Deferral Contributions        Deferral Contributions Account
Employer Matching Contributions      Regular Matching Contributions Account
Nonelective Employer Contributions   Employer Contributions Account
Participant Rollover Contributions   Rollover Contributions Account
Qualified Nonelective Contributions  Qualified Nonelective Contributions Account
Qualified Matching Contributions     Qualified Matching Contributions Account

     1.12 "Account Balance or Accrued Benefit" means the amount standing in a
Participant's Account(s) as of any date derived from both Employer contributions
and Employee contributions, if any.

                                       2

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     1.13 "Nonforfeitable or Vested" means a Participant's or Beneficiary's
unconditional claim, legally enforceable against the Plan, to the Participant's
Account Balance or Accrued Benefit.

     1.14 "Plan Year" means the Plan's accounting year, a 12 consecutive month
period ending every December 31..

     1.15 "Effective Date" of this amended and restated Plan means January 1,
2002, except that, certain provisions of this amended and restated Plan have
earlier effective dates, as described below:

<TABLE>
<CAPTION>
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                      Plan Provision                                          Effective Date
--------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
Section 1.07 (Highly Compensated Employee)                  Plan Years beginning after December 31, 1996
--------------------------------------------------------------------------------------------------------------
Section 1.10(A) (General Definition of Compensation)        Limitation Years beginning after December 31, 1997
--------------------------------------------------------------------------------------------------------------
Section 6.10(D)(1) (Eligible Rollover Distribution)         Distributions after December 31, 1998
--------------------------------------------------------------------------------------------------------------
Section 14.02 (Definitions)                                 Plan Years beginning after December 31, 1996
--------------------------------------------------------------------------------------------------------------
Section 14.04 (Actual Deferral Percentage (ADP) Test)       Plan Years beginning after December 31, 1996
--------------------------------------------------------------------------------------------------------------
Section 14.05 (Actual Contribution Percentage (ACP) Test)   Plan Years beginning after December 31, 1996
--------------------------------------------------------------------------------------------------------------
</TABLE>

     The original effective date of the Plan was October 1, 1986.

     1.16 "Plan Entry Date" means every January 1, April 1, July 1, and October
1.

     1.17 "Accounting Date" is the last day of the Plan Year. Unless otherwise
specified in the Plan, the Advisory Committee will make all Plan allocations for
a particular Plan Year as of the Accounting Date of that Plan Year.

     1.18 "Trust" means the separate Trust created under the Plan.

     1.19 "Trust Fund" means all property of every kind held or acquired by the
Trustee under the Plan, other than incidental benefit insurance contracts. This
Plan creates a single Trust for all Employers participating under the Plan.
However, the Trustee will maintain separate records of account in order to
reflect properly each Participant's Account Balance derived from each
participating Employer.

     1.20 "Nontransferable Annuity" means an annuity which by its terms provides
that it may not be sold, assigned, discounted, pledged as collateral for a loan
or security for the performance of an obligation or for any purpose to any
person other than the insurance company. If the Trustee distributes an annuity
contract, the contract must be a Nontransferable Annuity.

     1.21 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     1.22 "Code" means the Internal Revenue Code of 1986, as amended.

     1.23 "Service" means any period of time the Employee is in the employ of
the Employer, including any period the Employee is on an unpaid leave of absence
authorized by the Employer under a uniform, nondiscriminatory policy applicable
to all Employees if the Employee returns to work within the period specified
thereunder. "Separation from Service" means an event after which the Employee no
longer has an employment relationship with the Employer maintaining this Plan or
with a Related Employer. For purposes of eligibility to participate (Section
2.01) and determining vesting (Section 5.03), "Service" also includes service on
or before December 1, 1998, with any of the following affiliated employers:
FlowDrill Corporation; Flow Research, Inc.; and FlowMole Corporation.

     1.24 "Hour of Service" means:

     (a) Each Hour of Service for which the Employer, either directly or
     indirectly, pays an Employee, or for which the Employee is entitled to
     payment, for the performance of duties. The Advisory Committee credits
     Hours of Service under this paragraph (a) to the Employee for the
     computation period in which the Employee performs the duties, irrespective
     of when paid;

     (b) Each Hour of Service for back pay, irrespective of mitigation of
     damages, to which the Employer has agreed or for which the Employee has
     received an award. The Advisory Committee credits Hours of Service under
     this paragraph (b) to the Employee for the computation period(s) to which
     the award or the agreement pertains rather than for the computation period
     in which the award, agreement or payment is made; and

     (c) Each Hour of Service for which the Employer, either directly or
     indirectly, pays an Employee, or for which the Employee is entitled to
     payment (irrespective of whether the employment relationship is
     terminated), for reasons

                                       3

<PAGE>

     other than for the performance of duties during a computation period, such
     as leave off absence, vacation, holiday, sick leave, illness, incapacity
     (including disability), layoff, jury duty or military duty. The Advisory
     Committee will credit no more than 501 Hours of Service under this
     paragraph (c) to an Employee on account of any single continuous period
     during which the Employee does not perform any duties (whether or not such
     period occurs during a single computation period). The Advisory Committee
     credits Hours of Service under this paragraph (c) in accordance with the
     rules of paragraphs (b) and (c) of Labor Reg. (S)2530.200b-2, which the
     Plan, by this reference, specifically incorporates in full within this
     paragraph (c).

     (d) Hour of Service also includes any Service the Plan must credit in order
     to satisfy the crediting of Service requirements of Code (S)414(u).

     The Advisory Committee will not credit an Hour of Service under more than
one of the above paragraphs. A computation period for purposes of this Section
1.24 is the Plan Year, Year of Service period, Break in Service period or other
period, as determined under the Plan provision for which the Advisory Committee
is measuring an Employee's Hours of Service. The Advisory Committee will resolve
any ambiguity with respect to the crediting of an Hour of Service in favor of
the Employee.

     Hours of Service shall be credited on the basis of actual hours for which
an Employee is paid or entitled to payment to the extent the Employer's payroll
or accounting records reflect such hours. Otherwise, Employees shall be credited
with 190 Hours of Service per month, 95 hours per semimonthly pay period, 45
hours per week or 10 hours per day, depending on the pay period applicable to
such Employee for any such pay period in which the Employee has one Hour of
Service.

     Solely for purposes of determining whether the Employee incurs a Break in
Service under any provision of this Plan, the Advisory Committee must credit
Hours of Service during an Employee's unpaid absence period (i) due to maternity
or paternity leave; or (ii) as required under the Family and Medical Leave Act.
The Advisory Committee considers an Employee on maternity or paternity leave if
the Employee's absence is due to the Employee's pregnancy, the birth of the
Employee's child, the placement with the Employee of an adopted child, or the
care of the Employee's child immediately following the child's birth or
placement. The Advisory Committee credits Hours of Service under this paragraph
on the basis of the number of Hours of Service the Employee would receive if he
were paid during the absence period or, if the Advisory Committee cannot
determine the number of Hours of Service the Employee would receive, on the
basis of 8 hours per day during the absence period. The Advisory Committee will
credit only the number (not exceeding 501) of Hours of Service necessary to
prevent an Employee's Break in Service. The Advisory Committee credits all Hours
of Service described in this paragraph to the computation period in which the
absence period begins or, if the Employee does not need these Hours of Service
to prevent a Break in Service in the computation period in which his absence
period begins, the Advisory Committee credits these Hours of Service to the
immediately following computation period.

     1.25 "Disability" means the Participant, because of a physical or mental
disability, will be unable to perform the duties of his customary position of
employment (or is unable to engage in any substantial gainful activity) for an
indefinite period which the Advisory Committee considers will be of long
continued duration. A Participant also is disabled if he incurs the permanent
loss or loss of use of a member or function of the body, or is permanently
disfigured, and incurs a Separation from Service. The Plan considers a
Participant disabled on the date the Advisory Committee determines the
Participant satisfies the definition of disability. The Advisory Committee may
require a Participant to submit to a physical examination in order to confirm
disability. The Advisory Committee will apply the provisions of this Section
1.25 in a nondiscriminatory, consistent and uniform manner.

     1.26 "Service for Predecessor Employer" If the Employer maintains the plan
of a predecessor employer, the Plan treats service of the Employee with the
predecessor employer as service with the Employer.

     1.27 "Related Employer" A related group is a controlled group of
corporations (as defined in Code (S)414(b)), trades or businesses (whether or
not incorporated) which are under common control (as defined in Code (S)414(c))
or an affiliated service group (as defined in Code (S)414(m) or in Code
(S)414(o)). If the Employer is a member of a related group, the term "Employer"
includes the related group members for purposes of crediting Hours of Service,
determining Years of Service and Breaks in Service under Articles II and V,
applying the limitations on allocations in Part 2 of Article III, applying the
top heavy rules and the minimum allocation requirements of Article III, the
definitions of Employee, Highly Compensated Employee, Compensation and Leased
Employee, and for any other purpose required by the applicable Code section or
by a Plan provision. However, only an Employer described in Section 1.02 may
contribute to the Plan and only an Employee employed by an Employer described in
Section 1.02 is eligible to participate in this Plan. For Plan allocation
purposes, "Compensation" does not include Compensation received from a related
employer that is not participating in this Plan.

                                       4

<PAGE>

     1.28 "Leased Employees" The Plan treats a Leased Employee as an Employee of
the Employer. A Leased Employee is an individual (who otherwise is not an
Employee of the Employer) who, pursuant to a leasing agreement between the
Employer and any other person, has performed services for the Employer (or for
the Employer and any persons related to the Employer within the meaning of Code
(S)144(a)(3)) on a substantially full time basis for at least one year and who
performs such services under primary direction or control of the Employer. If a
Leased Employee is treated as an Employee by reason of this Section 1.28,
"Compensation" includes Compensation from the leasing organization which is
attributable to services performed for the Employer.

     Safe harbor plan exception. The Plan does not treat a Leased Employee as an
Employee if the leasing organization covers the employee in a safe harbor plan
and, prior to application of this safe harbor plan exception, 20% or less of the
Employer's Employees (other than Highly Compensated Employees) are Leased
Employees. A safe harbor plan is a money purchase pension plan providing
immediate participation, full and immediate vesting, and a nonintegrated
contribution formula equal to at least 10% of the employee's compensation
without regard to employment by the leasing organization on a specified date.
The safe harbor plan must determine the 10% contribution on the basis of
compensation as defined in Code (S)415(c)(3) including Elective Contributions
(as defined in Section 1.10).

     Other requirements. The Advisory Committee must apply this Section 1.28 in
a manner consistent with Code (S)(S)414(n) and 414(o) and the regulations
issued under those Code sections. If a Participant is a Leased Employee covered
by a plan maintained by the leasing organization, the Advisory Committee will
determine the allocation of Employer contributions and Participant forfeitures
on behalf of the Participant under the Employer's Plan without taking into
account the Leased Employee's allocation, if any, under the leasing
organization's plan.

     1.29 "Determination of Top Heavy Status" If this Plan is the only qualified
plan maintained by the Employer, the Plan is top heavy for a Plan Year if the
top heavy ratio as of the Determination Date exceeds 60%. The top heavy ratio is
a fraction, the numerator of which is the sum of the present value of Account
Balances of all Key Employees as of the Determination Date and the denominator
of which is a similar sum determined for all Employees. The Advisory Committee
must include in the top heavy ratio, as part of the present value of Account
Balances, any contribution not made as of the Determination Date but includible
under Code (S)416 and the applicable Treasury regulations, and distributions
made within the Determination Period. The Advisory Committee must calculate the
top heavy ratio by disregarding the Account Balance (and distributions, if any,
of the Account Balance) of any Non-Key Employee who was formerly a Key Employee,
and by disregarding the Accrued Benefit (including distributions, if any, of the
Accrued Benefit) of an individual who has not received credit for at least one
Hour of Service with the Employer during the Determination Period. The Advisory
Committee must calculate the top heavy ratio, including the extent to which it
must take into account distributions, rollovers and transfers, in accordance
with Code (S)416 and the regulations under that Code section.

     If the Employer maintains other qualified plans (including a simplified
employee pension plan), or maintained another such plan which now is terminated,
this Plan is top heavy only if it is part of the Required Aggregation Group, and
the top heavy ratio for the Required Aggregation Group and for the Permissive
Aggregation Group, if any, each exceeds 60%. The Advisory Committee will
calculate the top heavy ratio in the same manner as required by the first
paragraph of this Section 1.29, taking into account all plans within the
Aggregation Group. To the extent the Advisory Committee must take into account
distributions to a Participant, the Advisory Committee must include
distributions from a terminated plan which would have been part of the Required
Aggregation Group if it were in existence on the Determination Date. The
Advisory Committee will calculate the present value of Accrued Benefits under
defined benefit plans or simplified employee pension plans included within the
group in accordance with the terms of those plans, Code (S)416 and the
regulations under that Code section. If a Participant in a defined benefit plan
is a Non-Key Employee, the Advisory Committee will determine his Accrued Benefit
under the accrual method, if any, which is applicable uniformly to all defined
benefit plans maintained by the Employer or, if there is no uniform method, in
accordance with the slowest accrual rate permitted under the fractional rule
accrual method described in Code (S)411(b)(1)(C). To calculate the present
value of benefits from a defined benefit plan, the Advisory Committee will use
the actuarial assumptions (interest and mortality only) prescribed by the
defined benefit plan(s) to value benefits for top heavy purposes. If an
aggregated plan does not have a valuation date coinciding with the Determination
Date, the Advisory Committee must value the Accrued Benefits in the aggregated
plan as of the most recent valuation date falling within the twelve-month period
ending on the Determination Date, except as Code (S)416 and applicable Treasury
regulations require for the first and second plan year of a defined benefit
plan. The Advisory Committee will calculate the top heavy ratio with reference
to the Determination Dates that fall within the same calendar year.

     Definitions. For purposes of applying the provisions of this Section 1.29:

     (a) "Key Employee" means, as of any Determination Date, any Employee or
     former Employee (or Beneficiary of such Employee) who, at any time during
     the Determination Period: (i) has Compensation in excess of 50% of the

                                       5

<PAGE>

     dollar amount prescribed in Code (S)415(b)(1)(A) (relating to defined
     benefit plans) and is an officer of the Employer; (ii) has Compensation in
     excess of the dollar amount prescribed in Code (S)415(c)(1)(A) (relating
     to defined contribution plans), owns a more than 1/2% interest in the
     Employer and is one of the Employees owning the ten largest interests in
     the Employer; (iii) is a more than 5% owner of the Employer; or (iv) is a
     more than 1% owner of the Employer and has Compensation of more than
     $150,000. The constructive ownership rules of Code (S)318 (or the
     principles of that section, in the case of an unincorporated Employer) will
     apply to determine ownership in the Employer. The number of officers taken
     into account under clause (i) will not exceed the greater of 3 or 10% of
     the total number (after application of the Code (S)414(q) exclusions) of
     Employees, but no more than 50 officers. The Advisory Committee will make
     the determination of who is a Key Employee in accordance with Code
     (S)416(i)(1) and the regulations under that Code section.

     (b) "Non-Key Employee" is an employee who does not meet the definition of
     Key Employee.

     (c) "Compensation" means the general definition of Compensation as
     determined under Section 3.12(b) for Code (S)415 purposes and includes
     Compensation for the entire Plan Year.

     (d) "Required Aggregation Group" means: (1) each qualified plan of the
     Employer in which at least one Key Employee participates or participated in
     at any time during the Determination Period (including terminated plans);
     and (2) any other qualified plan of the Employer which enables a plan
     described in clause (1) to meet the requirements of Code (S)401(a)(4) or
     Code (S)410.

     (e) "Permissive Aggregation Group" is the Required Aggregation Group plus
     any other qualified plans maintained by the Employer, but only if such
     group would satisfy in the aggregate the nondiscrmination requirements of
     Code (S)401(a)(4) and the coverage requirements of Code (S)410. The
     Advisory Committee will determine the Permissive Aggregation Group.

     (f) "Employer" means the Employer that adopts this Plan and any related
     employers described in Section 1.27.

     (g) "Determination Date" for any Plan Year is the Accounting Date of the
     preceding Plan Year or, in the case of the first Plan Year of the Plan, the
     Accounting Date of that Plan Year. The "Determination Period" is the 5 year
     period ending on the Determination Date.

     1.30 "Employer Stock" means common stock of Flow International Corporation.

     1.31 "Employer Stock Fund" means a pooled investment account limited to
shares of Employer Stock.

     1.32 PLAN MAINTAINED BY MORE THAN ONE EMPLOYER. If more than one employer
maintains this Plan, then for purposes of determining Service and Hours of
Service, the Advisory Committee will treat all Employers maintaining this Plan
as a single employer.

     Plan Allocations. The Advisory Committee must allocate all Employer
contributions and forfeitures to each Participant in the Plan, in accordance
with Article III and Section 9.11, without regard to which contributing Employer
employs the Participant. A Participant's Compensation includes Compensation from
all participating Employers, irrespective of which Employers are contributing to
the Plan.

     1.33 "Protected Benefit" means any accrued benefit described in Treas.
Reg.(S)1.411(d)-4, including any optional form of benefit provided under the
Plan which may not (except in accordance with such regulations) be reduced,
eliminated or made subject to Employer discretion.

                                       6

<PAGE>

                                   ARTICLE II
                              EMPLOYEE PARTICIPANTS

     2.01 ELIGIBILITY. Each Employee (other than an Excluded Employee) becomes a
Participant in the Plan on the Plan Entry Date (if employed on that date)
coincident with or immediately following the date on which he completes one Year
of Service. Each Employee who was a participant in the Plan on the day before
the Effective Date of this restated Plan Section 2.01 continues as a Participant
in the Plan.

     Special eligibility rule for Code (S)401(k) arrangement. In lieu of the
eligibility requirements in the preceding paragraph, each Employee (other than
an Excluded Employee) becomes a participant in the Code (S)401(k) arrangement
on the Plan Entry Date (if employed on that date) immediately following the
Employee's Employment Commencement Date. If, for a Plan Year, an Employee is a
Participant solely in the 401(k) arrangement, the Employee does not share in the
allocation of any Employer contributions other than deferral contributions, as
described in Article III, nor in the allocation of any forfeitures.

     An Employee is an Excluded Employee if he is:

     (a) an individual whom the Employer does not report as a common-law
     employee of the Employer on the Employer's payroll records, even if a court
     or governmental entity determines that such individual is a common-law
     employee of the Employer;

     (b) a nonresident alien who receives no U.S. source earned income;

     (c) a Leased Employee treated as an Employee under Section 1.28; or

     (d) a member of a collective bargaining unit, unless the collective
     bargaining agreement provides otherwise. An Employee is a member of a
     collective bargaining unit if he is included in a unit of employees covered
     by an agreement which the Secretary of Labor finds to be a collective
     bargaining agreement between employee representatives and one or more
     employers if there is evidence that retirement benefits were the subject of
     good faith bargaining between such employee representatives and such
     employer or employers. The term "employee representatives" does not include
     an organization more than one half the members of which are owners,
     officers or executives of the Employer.

     If a Participant has not incurred a Separation from Service but becomes an
Excluded Employee, then during the period such a Participant is an Excluded
Employee, the Advisory Committee will limit that Participant's sharing in the
allocation of Employer contributions and Participant forfeitures, if any, under
the Plan by disregarding his Compensation paid by the Employer for services
rendered in his capacity as an Excluded Employee. However, during such period of
exclusion, the Participant, without regard to employment classification,
continues to receive credit for vesting under Article V for each included Year
of Service and the Participant's Account continues to share fully in Trust Fund
allocations under Section 9.11.

     If an Excluded Employee who is not a Participant becomes eligible to
participate in the Plan by reason of a change in employment classification, he
will participate in the Plan immediately if he has satisfied the eligibility
conditions of Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the Plan takes into
account all of the Participant's included Years of Service with the Employer as
an Excluded Employee for purposes of vesting credit under Article V.

     2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an Employee's
participation in the Plan under Section 2.01, the Plan takes into account all of
his Years of Service with the Employer, except as provided in Section 2.03.
"Year of Service" means a 12 consecutive month period during which the Employee
completes not less than 1000 Hours of Service, measuring the beginning of the
first 12 month period from the Employment Commencement Date. If the Employee
does not complete 1000 Hours of Service during the 12 month period commencing
with the Employment Commencement Date, the Plan measures the second 12 month
period by reference to the Plan Year which includes the first anniversary of the
Employee's Employment Commencement Date. The Plan measures any subsequent 12
month period necessary for a determination of Year of Service for participation
by reference to succeeding Plan Years. "Employment Commencement Date" means the
date on which the Employee first performs an Hour of Service for the Employer.

     2.03 BREAK IN SERVICE - PARTICIPATION. For purposes of participation in the
Plan, the Plan does not apply any Break in Service rule.

     2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose employment
terminates re-enters the Plan as a Participant on the date of his re-employment.
An Employee who satisfies the Plan's eligibility conditions but who terminates
employment prior to becoming a Participant becomes a Participant in the Plan on
the later of the Entry Date on which he would have entered the Plan had he not
terminated employment or the date of his reemployment. Any Employee

                                       7

<PAGE>

who terminates employment prior to satisfying the Plan's eligibility conditions
becomes a Participant in accordance with the provisions of Section 2.01.

                                       8

<PAGE>

                                   ARTICLE III
                     EMPLOYER CONTRIBUTIONS AND FORFEITURES

Part 1. Amount of Employer Contributions and Plan Allocations: Sections 3.01
through 3.06

     3.01 AMOUNT.

(A) Contribution formula.

     For each Plan Year, the Employer will contribute to the Trust the following
amounts:

     Deferral Contributions. The amount by which the Participants have elected
to reduce their Compensation for the Plan Year under their salary reduction
agreements on file with the Advisory Committee.

     Employer Matching Contributions. An amount equal to 50% of each
Participant's eligible contributions. For Participants with five or more years
of vesting service (see Article V), the matching contribution will be 75%
instead of 50%. The Employer also may contribute an additional amount, equal to
a percentage the Employer from time to time may deem advisable of each
Participant's eligible contributions. The Employer will determine the amount of
its matching contribution by disregarding Participants not entitled to an
allocation of Employer matching contributions. See Sections 3.04 and 3.06.

     Qualified nonelective contributions. The amount the Employer, in its sole
discretion, designates as qualified nonelective contributions.

     Nonelective contributions. Any additional amount the Employer may from time
to time deem advisable.

     Restrictions on contributions. The Employer will make its contribution
under the Plan, irrespective of whether it has net profits. Although, the
Employer may contribute to this Plan irrespective of whether it has net profits,
the Employer intends this Plan to be a profit sharing plan for all purposes
under the Code. The Employer will not make a contribution to the Trust for any
Plan Year to the extent the contribution would exceed the Participants' Maximum
Permissible Amounts. See Part 2 of this Article III.

     Eligible contributions. Under the matching contribution formula, a
Participant's "eligible contributions" are the deferral contributions allocated
to the Participant for the Plan Year not in excess of 6% of the Participant's
Compensation for the Plan Year. Eligible contributions do not include deferral
contributions attributable to Compensation for any period when the Participant
is not eligible to participate in the allocation of matching contributions.
Eligible contributions do not include deferral contributions that are excess
deferrals under Section 14.03. For this purpose: (a) excess deferrals relate
first to deferral contributions for the Plan Year not otherwise eligible for a
matching contribution; and (2) if the Plan Year is not a calendar year, the
excess deferrals for a Plan Year are the last deferrals made for a calendar
year.

     Notwithstanding any provision in this Article III to the contrary, the Plan
will provide contributions and Service credit with respect to qualified military
service in accordance with Code (S)414(u).

(B) Return of contributions.

     The Trustee, upon written request from the Employer, must return to the
Employer the amount of the Employer's contribution made by the Employer by
mistake of fact or the amount of the Employer's contribution disallowed as a
deduction under Code (S)404. The Trustee will not return any portion of the
Employer's contribution under the provisions of this paragraph more than one
year after:

     (a) The Employer made the contribution by mistake of fact; or

     (b) The disallowance of the contribution as a deduction, and then, only to
     the extent of the disallowance.

     The Trustee will not increase the amount of the Employer contribution
returnable under this Section 3.01 for any earnings attributable to the
contribution, but the Trustee will decrease the Employer contribution returnable
for any losses attributable to it. The Trustee may require the Employer to
furnish it whatever evidence the Trustee deems necessary to enable the Trustee
to confirm the amount the Employer has requested be returned is properly
returnable under ERISA.

     3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its records,
determines the amount of any contributions to be made by it to the Trust under
the terms of the Plan.

     3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay its contribution
for each Plan Year in one or more installments without interest. The Employer
must make its contribution to the Trustee within the time prescribed by the Code
or applicable federal regulations. Deferral contributions are Employer
contributions for all purposes under this Plan, except to the extent the Code or
Treasury regulations prohibit the use of these contributions to satisfy the
qualification requirements of the Code.

     3.04 CONTRIBUTION ALLOCATION.

                                       9

<PAGE>

(A) Method of Allocation. To make allocations under the Plan, the Advisory
Committee must establish a Deferral Contributions Account, a Regular Matching
Contributions Account, a Qualified Matching Contributions Account, a Qualified
Nonelective Contributions Account and an Employer Contributions Account for each
Participant.

     Deferral Contributions. The Advisory Committee will allocate to each
Participant's Deferral Contributions Account the deferral contributions the
Employer makes to the Trust on behalf of the Participant. The Advisory Committee
will make this allocation of deferral contributions as of the date they actually
are paid to the Trust.

     Matching Contributions. The Advisory Committee will allocate matching
contributions as of the date the corresponding deferral contributions actually
are paid to the Trust. The Advisory Committee will allocate the matching
contributions to the Regular Matching Contributions Account of the Participant
on whose behalf the Employer makes that contribution.

     The Employer, at the time of contribution, must designate which portion, if
any, of its discretionary matching contribution is allocable to the Qualified
Matching Contributions Accounts of the Participants and which portion, if any,
of its discretionary matching contributions is allocable to the Regular Matching
Contributions Accounts of the Participants. The allocation of discretionary
matching contributions to a Participant's Account is in the same proportion that
each Participant's eligible contributions (as defined in Section 3.01) bears to
the total eligible contributions of all Participants, taking into account only
the eligible contributions subject to the matching contribution formula.

     Qualified nonelective contributions. If the Employer, at the time of
contribution, designates a contribution to be a qualified nonelective
contribution for the Plan Year, the Advisory Committee will allocate that
qualified nonelective contribution to the Qualified Nonelective Contributions
Account of each Participant eligible for an allocation of qualified nonelective
contributions. The Advisory Committee will make the allocation to each eligible
Participant's Account in the same ratio that the Participant's Compensation for
the Plan Year bears to the total Compensation of all Participants for the Plan
Year. For purposes of allocating the qualified nonelective contributions, the
term "Participant" means any Participant who satisfies the conditions of Section
3.06.

     Nonelective contributions. Subject to any restoration allocation required
under Section 5.04, the Advisory Committee will allocate and credit each annual
Employer nonelective contribution, if any (and Participant forfeitures, if any),
to the Employer Contributions Account of each Participant who satisfies the
conditions of Section 3.06. The Advisory Committee will make this allocation in
the same ratio that each Participant's Compensation for the Plan Year for which
the Employer makes the contribution bears to the total Compensation of all
Participants for the Plan Year.

(B) Top Heavy Minimum Allocation.

     (1) Minimum Allocation. If the Plan is top heavy in any Plan Year:

          (a) Each Non-Key Employee (as defined in Section 1.29) who is a
          Participant and is employed by the Employer on the last day of the
          Plan Year will receive a top heavy minimum allocation for that Plan
          Year; and

          (b) The top heavy minimum allocation is equal to the lesser of 3% of
          the Non-Key Employee's Compensation (as defined in Section 1.29) for
          the Plan Year or the highest contribution rate for the Plan Year made
          on behalf of any Key Employee (as defined in Section 1.29). However,
          if a defined benefit plan maintained by the Employer which benefits a
          Key Employee depends on this Plan to satisfy the antidiscrimination
          rules of Code (S)401(a)(4) or the coverage rules of Code (S)410 (or
          another plan benefiting the Key Employee so depends on such defined
          benefit plan), the top heavy minimum allocation is 3% of the Non-Key
          Employee's Compensation regardless of the contribution rate for the
          Key Employees.

     (2) Special Definitions. For purposes of this Section 3.04(B), the term
"Participant" includes any Employee otherwise eligible to participate in the
Plan but who is not a Participant because of his failure to make elective
deferrals under a Code (S)401(k) arrangement or because of his failure to make
mandatory employee contributions.

     (3) Determining Contribution Rates. In determining under Section
3.04(B)(1)(b) the highest contribution rate for any Key Employee the Plan
Administrator takes into account all Employer contributions (including deferral
contributions and including matching contributions but not including Employer
contributions to Social Security) and forfeitures allocated to the Participant's
Account for the Plan Year divided by his Compensation for the entire Plan Year.
For purposes of satisfying the Employer's top-heavy minimum allocation
requirement, the Plan Administrator disregards the elective deferrals and
matching contributions allocated to a Non-Key Employee's Account in determining
the Non-Key Employee's contribution rate. However, the Plan Administrator
operationally may include in the contribution rate of a Non-Key Employee any
matching contributions not necessary to satisfy nondiscrimination requirements
of Code (S)401(k) or Code (S)401(m). To determine a Participant's contribution
rate, the Advisory Committee must treat all qualified top heavy

                                       10

<PAGE>

defined contribution plans maintained by the Employer (or by any related
Employers described in Section 1.27) as a single plan.

     (4) No Allocations. If, for a Plan Year, there are no allocations of
Employer contributions or forfeitures for any Key Employee, the Plan does not
require any top heavy minimum allocation for the Plan Year, unless a top heavy
minimum allocation applies because of the maintenance by the Employer of more
than one plan.

     (5) Method of Compliance. The Plan will satisfy the top heavy minimum
allocation in accordance with this Section 3.04(B)(5). The Employer will
contribute an additional amount for the Account of any Participant who is
entitled under this Section 3.04(B) to a top heavy minimum allocation, if that
Participant's contribution rate for the Plan Year, under this Plan and any other
plan aggregated under Section 1.29, is less than the top heavy minimum
allocation. The additional amount is the amount necessary to increase the
Participant's contribution rate to the top heavy minimum allocation. The
Advisory Committee will allocate the additional contribution to the Account of
the Participant on whose behalf the Employer makes the contribution.

     3.05 FORFEITURE ALLOCATION. The amount of a Participant's Account Balance
forfeited under the Plan is a Participant forfeiture. Subject to any restoration
allocation required under Sections 5.04 or 9.14 and the special forfeiture
allocation for certain excess aggregate contributions described in Section
14.05, the Advisory Committee will allocate the amount of a Participant
forfeiture in accordance with Section 3.04, to reduce the Employer matching
contribution contributions and nonelective contributions for the Plan Year in
which the forfeiture occurs. The Advisory Committee will continue to hold the
undistributed, non-vested portion of a terminated Participant's Accrued Benefit
in his Account solely for his benefit until a forfeiture occurs at the time
specified in Section 5.09, or, if applicable, until the time specified in
Section 9.14. Except as provided under Section 5.04, a Participant will not
share in the allocation of a forfeiture of any portion of his Accrued Benefit.

     Forfeiture of certain matching contributions. A Participant will forfeit
any matching contributions allocated with respect to excess deferrals, excess
contributions or excess aggregate contributions, as determined under Article
XIV. The Advisory Committee will allocate these forfeited amounts in accordance
with this Section 3.05.

     3.06 ACCRUAL OF BENEFIT. The Advisory Committee will determine the accrual
of benefit (Employer contributions and Participant forfeitures) on the basis of
the Plan Year.

(A) Compensation Taken Into Account. In allocating an Employer qualified
nonelective contribution or nonelective contribution to a Participant's Account,
the Advisory Committee, except for purposes of determining the top heavy minimum
contribution under Section 3.04(B), will take into account only the Compensation
determined for the portion of the Plan Year in which the Employee actually is a
Participant.

(B) Hours of Service Requirement. Subject to the top heavy minimum allocation
requirement of Section 3.04(B), the Advisory Committee will not allocate any
portion of an Employer contribution for a Plan Year to any Participant's Account
if the Participant does not complete a minimum of 1,000 Hours of Service during
the Plan Year, unless the Participant terminates employment during the Plan Year
because of death or disability or because of the attainment of Normal
Requirement Age in the current Plan Year or in a prior Plan Year. The 1,000
Hours of Service requirement does not apply to an allocation of deferral
contributions or matching contributions.

(C) Employment Requirement. A Participant who, during a particular Plan Year,
completes the Hours of Service requirement under Section 3.06(B) will not share
in the allocation of Employer contributions and Participant forfeitures, if any,
for that Plan Year unless he is employed by the Employer on the Accounting Date
of that Plan Year. This employment requirement does not apply if the Participant
terminates employment during the Plan Year because of death or disability or
because of attainment of Normal Retirement Age in the current Plan Year or in a
prior Plan Year. This employment requirement will not apply to an allocation of
matching contributions or deferral contributions..

(D) [Reserved.]

Part 2. Limitations on Allocations: Sections 3.07 through 3.12

     3.07 LIMITATIONS ON ALLOCATIONS TO PARTICIPANTS' ACCOUNTS. The amount of
Annual Additions which the Advisory Committee may allocate under this Plan to a
Participant's Account for a Limitation Year may not exceed the Maximum
Permissible Amount. If the amount the Employer otherwise would contribute to the
Participant's Account would cause the Annual Additions for the Limitation Year
to exceed the Maximum Permissible Amount, the Employer will reduce the amount of
its contribution so the Annual Additions for the Limitation Year will equal the
Maximum Permissible Amount. If the Annual Additions the Advisory Committee
otherwise would allocate under the Plan to a Participant's Account would for the
Limitation Year exceed the Maximum Permissible Amount, the Advisory Committee
will not allocate the Excess Amount, but will instead take any reasonable,
uniform and nondiscriminatory action the Advisory Committee determines necessary
to avoid allocation of an Excess Amount. Such actions include, but are not

                                       11

<PAGE>

limited to, those described in this Section 3.07. If the Plan includes a 401(k)
,arrangement, the Advisory Committee may apply this Section 3.07 in a manner
which maximizes the allocation to a Participant of Employer contributions
(exclusive of the Participant's deferral contributions). Notwithstanding any
contrary Plan provision, the Advisory Committee, for the Limitation Year, may:
(1) suspend or limit a Participant's additional Employee contributions or
deferral contributions: (2) notify the Employer to reduce the Employer's future
Plan contribution(s) as necessary to avoid allocation to a Participant of an
Excess Amount; or (3) suspend or limit the allocation to a Participant of any
Employer contribution previously made to the Plan (exclusive of deferral
contributions) or of any Participant forfeiture. If an allocation of Employer
contributions previously made (excluding a Participant's deferral contributions)
or of Participant forfeitures would result in an Excess Amount to a
Participant's Account, the Advisory Committee will allocate the Excess Amount to
the remaining Participants who are eligible for an allocation of Employer
contributions for the Plan Year in which the Limitation Year ends. The Advisory
Committee will make this allocation in accordance with the Plan's allocation
method as if the Participant whose Account otherwise would receive the Excess
Amount, is not eligible for an allocation of Employer contributions. If the
Advisory Committee allocates to a Participant an Excess Amount, the Advisory
Committee must dispose of the Excess Amount in accordance with Section 3.10
(relating to certain "reasonable errors" and allocation of forfeitures) or, if
Section 3.l0 does not apply, the Advisory Committee will dispose of the Excess
Amount under Section 9.15.

     3.08 ESTIMATING COMPENSATION. Prior to the determination of the
Participant's actual Compensation for a Limitation Year, the Advisory Committee
may determine the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Advisory Committee
must make this determination on a reasonable and uniform basis for all
Participants similarly situated. The Advisory Committee must reduce any Employer
contributions (including any allocation of forfeitures) based on estimated
annual Compensation by any Excess Amounts carried over from prior Limitation
Years.

     3.09 DETERMINATION BASED ON ACTUAL COMPENSATION. As soon as is
administratively feasible after the end of the Limitation Year, the Advisory
Committee will determine the Maximum Permissible Amount for such Limitation Year
on the basis of the Participant's actual Compensation for the Limitation Year.

     3.10 DISPOSITION OF ALLOCATED EXCESS AMOUNT. If, because of a reasonable
error in estimating a Participant's actual Limitation Year Compensation, because
of the allocation of forfeitures, because of a reasonable error in determining a
Participant's deferral contributions or because of any other facts and
circumstances the Internal Revenue Service ("Revenue Service") considers to
constitute reasonable error, a Participant receives an allocation of an Excess
Amount for a Limitation Year, the Advisory Committee shall dispose of such
Excess Amount as follows:

     (1) The Advisory Committee first will return to the Participant any
     nondeductible voluntary Employee contributions and then any Participant
     deferral contributions (adjusted for earnings) to the extent necessary to
     reduce or eliminate the Excess Amount.

     (2) If, after the application of paragraph (1), an Excess Amount still
     exists, and the Plan covers the Participant at the end of the Limitation
     Year, then the Advisory Committee will use the Excess Amount(s) to reduce
     future Employer contributions (including any allocation of forfeitures)
     under the Plan for the next Limitation Year and for each succeeding
     Limitation Year, as is necessary, for the Participant. A Participant who is
     a Highly Compensated Employee may elect to limit his/her Compensation for
     allocation purposes to the extent necessary to reduce his/her allocation
     for the Limitation Year to the Maximum Permissible Amount and to eliminate
     the Excess Amount.

     (3) If, after the application of paragraph (1), an Excess Amount still
     exists, and the Plan does not cover the Participant at the end of the
     Limitation Year, then the Advisory Committee will hold the Excess Amount
     unallocated in a suspense account. The Advisory Committee will apply the
     suspense account to reduce Employer Contributions (including allocation of
     forfeitures) for all remaining Participants in the next Limitation Year,
     and in each succeeding Limitation Year if necessary. Amounts held
     unallocated in a suspense account will not share in any allocation of Trust
     Fund net income, gain or loss.

     (4) The Advisory Committee under paragraphs (2) or (3) will not distribute
     any Excess Amount(s) to Participants or to former Participants.

     3.11 OTHER DEFINED CONTRIBUTION PLANS LIMITATION. If the Advisory Committee
allocated an Excess Amount to a Participant's Account on an allocation date of
this Plan which coincides with an allocation date of another defined
contribution plan maintained by the Employer, the Advisory Committee will
attribute the total Excess Amount allocated as of such date to such other plan.

     3.12 DEFINITIONS - ARTICLE III. For purposes of Part 2 Article III, the
following terms mean:

                                       12

<PAGE>

     (a) "Annual Addition" - The sum of the following amounts allocated to a
     Participant's Account for a Limitation Year, of (i) all Employer
     contributions (including Participant deferral contributions); (ii) all
     forfeitures; (iii) all Employee contributions; (iv) Excess Amounts
     reapplied to reduce Employer contributions under Section 3.10; (v) amounts
     allocated after March 31, 1984, to an individual medical account (as
     defined in Code (S)415(1)(2)) included as part of a defined benefit plan
     maintained by the Employer; (vi) contributions paid or accrued after
     December 31, 1985, for taxable years ending after December 31, 1985,
     attributable to post-retirement medical benefits allocated to the separate
     account of a key employee (as defined in Codes (S)419A(d)(3) under a
     welfare benefit fund (as defined in Code (S)419(e)) maintained by the
     Employer; (vii) amounts allocated under a Simplified Employee Pension Plan;
     and (viii) corrected excess contributions described in Code (S)401(k) and
     corrected excess aggregate contributions described in Code (S)401(m).
     Excess deferrals described in Code (S)402(g) that the Advisory Committee
     corrects by distribution by April 15 of the following calendar year are not
     Annual Additions.

     (b) "Compensation" - Compensation as determined under the general
     definition in Section 1.10(A).

     (c) "Maximum Permissible Amount" - The lesser of (i) $30,000 (or, if
     greater, the $30,000 amount as adjusted under Code (S)415(d)), or (ii) 25%
     of the Participant's Compensation for the Limitation Year. If there is a
     short Limitation Year because of a change in Limitation Year, the Advisory
     Committee will multiply the $30,000 limitation (or larger limitation) by
     the following fraction:

                  Number of months in the short Limitation Year
                                       12

     The 25% limitation does not apply to any contribution for medical benefits
     within the meaning of Code (S)401(h) or Code (S)419A(f)(2) which
     otherwise is an Annual Addition.

     (d) "Employer" - The Employer that adopts this Plan and any related
     employers described in Section 1.27. Solely for purposes of applying the
     limitations of Part 2 of this Article III, the Advisory Committee will
     determine related employers described in Section 1.27 by modifying Code
     (S)(S)414(b) and (c) in accordance with Code (S)415(h).

     (e) "Excess Amount" - The excess of the Participant's Annual Additions for
     the Limitation Year over the Maximum Permissible Amount.

     (f) "Limitation Year" - The Plan Year. If the Employer amends the
     Limitation Year to a different 12 consecutive month period, the new
     Limitation Year must begin on a date within the Limitation Year for which
     the Employer makes the amendment, creating a short Limitation Year.

     (g) "Defined contribution plan" - A retirement plan which provides for an
     individual account for each participant and for benefits based solely on
     the amount contributed to the participant's account, and any income,
     expenses, gains and losses, and any forfeitures of accounts of other
     participants which the plan may allocate to such participant's account. The
     Advisory Committee must treat all defined contribution plans (whether or
     not terminated) maintained by the Employer as a single plan. For purposes
     of the limitations of Part 2 of this Article III , the Advisory Committee
     will treat employee contributions made to a defined benefit plan maintained
     by the Employer as a separate defined contribution plan. The Advisory
     Committee also will treat as a defined contribution plan an individual
     medical account (as defined in Code (S)415(1)(2)) included as part of a
     defined benefit plan maintained by the Employer and, for taxable years
     ending after December 31, 1985, a welfare benefit fund under Code (S)
     419(e) maintained by the Employer to the extent there are post-retirement
     medical benefits allocated to the separate account of a key employee (as
     defined in Code (S)419A(d)(3)).

     (h) "Defined benefit plan" - A retirement plan which does not provide for
     individual accounts for Employer contributions. The Advisory Committee must
     treat all defined benefit plans (whether or not terminated) maintained by
     the Employer as a single plan.

                                       13

<PAGE>

                                   ARTICLE IV
                            PARTICIPANT CONTRIBUTIONS

     4.01 PARTICIPANT VOLUNTARY CONTRIBUTIONS. The Plan does not permit nor
require Participant voluntary contributions.

     4.02 [Reserved]

     4.03 ROLLOVER CONTRIBUTIONS. A "rollover contribution" is an amount of cash
or property which the Code permits an eligible Employee or Participant to
transfer directly or indirectly to this Plan from another qualified plan. The
Employer operationally and on a nondiscriminatory basis, may elect to permit or
not to permit rollover contributions to this Plan or may elect to limit an
eligible Employee's right or a Participant's right to make a rollover
contribution. If the Employer permits rollover contributions, any Participant
(or as applicable, any eligible Employee) with the Employer's written consent
and after filing with the Trustee the form prescribed by the Advisory Committee,
may make a rollover contribution to the Trust. Before accepting a rollover
contribution, the Trustee may require a Participant (or eligible Employee) to
furnish satisfactory evidence that the proposed transfer is in fact a "rollover
contribution" which the Code permits an employee to make to a qualified plan. A
rollover contribution is not an Annual Addition under Part 2 of Article III.

     If an eligible Employee makes a rollover contribution to the Trust prior to
satisfying the Plan's eligibility conditions, the Plan Administrator and Trustee
must treat the Employee as a limited Participant (as described in Revenue Ruling
96-48 or in any successor ruling). A limited Participant does not share in the
Plan's allocation of Employer contributions nor Participant forfeitures and may
not make deferral contributions until he/she actually becomes a Participant in
the Plan. If a limited Participant has a Separation from Service prior to
becoming a Participant in the Plan. the Trustee will distribute his/her rollover
contributions Account to him/her in accordance with Article VI as if it were an
Employer contributions Account.

     4.04 ROLLOVER CONTRIBUTION - FORFEITABILITY. A Participant's Account
Balance is, at all times, 100% Vested to the extent the value of his Account
Balance is derived from his rollover contributions to the Trust for his own
benefit.

     4.05 ROLLOVER CONTRIBUTION WITHDRAWAL/DISTRIBUTION. A Participant, by
giving prior written notice to the Trustee, may withdraw all or any part of the
value of his Account Balance derived from his Participant rollover
contributions. A Participant may not exercise his right to withdraw the value of
his Account Balance derived from his rollover contributions more than once
during any Plan Year. The Trustee, following a Participant's Separation from
Service, will distribute to the Participant his/her Rollover Contributions
Account in accordance with Article VI in the same manner as the Trustee
distributes the Participant's Employer Contributions Account.

     4.06 ROLLOVER CONTRIBUTION - ACCRUED BENEFIT. The Advisory Committee must
maintain a separate Rollover Contributions Account(s) in the name of each
Participant to reflect the Participant's rollover contributions, as adjusted for
earnings, gains and losses. A Participant's Account Balance derived from his
rollover contributions as of any applicable date is the balance of his separate
Rollover Contributions Account(s). The assets in a Participant's (or eligible
Employee's) Rollover Contributions Account shall be subject to the Participant's
(or eligible Employee's) direction of investment in accordance with Section
8.10.

                                       14

<PAGE>

                                    ARTICLE V
                  TERMINATION OF SERVICE - PARTICIPANT VESTING

     5.01 NORMAL RETIREMENT AGE. A Participant's Normal Retirement Age is 65
years of age. A Participant who remains in the employ of the Employer after
attaining Normal Retirement Age will continue to participate in Employer
contributions. A Participant's Account Balance derived from Employer
contributions is 100% Vested upon and after his attaining Normal Retirement Age
(if employed by the Employer on or after that date).

     5.02 PARTICIPANT DISABILITY OR DEATH. If a Participant's employment with
the Employer terminates as a result of death or disability, the Participant's
Account Balance derived from Employer contributions will be 100% Vested.

     5.03 VESTING SCHEDULE. A Participant has a 100% Vested interest at all
times in his Deferral Contributions Account, Qualified Matching Contributions
Account, and Qualified Nonelective Contributions Account . Except as provided in
Sections 5.01 and 5.02, for each Year of Service, a Participant's Vested
percentage of his Regular Matching Contributions Account and Employer
Contributions Account equals the percentage in the following vesting schedule:

                       Percent of
Years of Service         Vested
with the Employer   Account Balance
-----------------   ---------------
   Less than 1            None
        1                   20%
        2                   40%
        3                   60%
        4                   80%
    5 or more              100%

     5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF
FORFEITED ACCRUED BENEFIT. If pursuant to Article VI, a partially-vested
Participant receives a cash-out distribution before he incurs a Forfeiture Break
in Service (as defined in Section 5.08), the cash-out distribution will result
in an immediate forfeiture of the nonvested portion of the Participant's Account
Balance derived from Employer contributions. See Section 5.09. A
partially-vested Participant is a Participant whose Vested Percentage determined
under Section 5.03 is less than 100%. A cash-out distribution is a distribution
of the entire present value of the Participant's Vested Account Balance.

(A) Restoration and Conditions upon Restoration. A partially-vested Participant
who is re-employed by the Employer after receiving a cash-out distribution of
the Vested percentage of his Account Balance may repay the Trustee the amount of
the cash-out distribution attributable to Employer contributions, unless the
Participant no longer has a right to restoration under the requirements of this
Section 5.04. If a partially-vested Participant makes the cash-out distribution
repayment, the Advisory Committee, subject to the conditions of this paragraph
(A), must restore his Account Balance attributable to Employer contributions to
the same dollar amount as the dollar amount of his Account Balance on the
Accounting Date, or other valuation date, immediately preceding the cash-out
distribution date, unadjusted for any gains or losses occurring subsequent to
that Accounting Date, or other valuation date. Restoration of the Participant's
Account Balance shall include restoration of all Code (S)411(d)(6) protected
benefits with respect to that restored Account Balance, in accordance with
applicable Treasury regulations. The Advisory Committee shall not restore a
re-employed Participant's Account Balance under this paragraph if:

     (1) 5 years have elapsed since the Participant's first re-employment date
     following the cash-out distribution; or

     (2) The Participant incurred a Forfeiture Break in Service (as defined in
     Section 5.08). This condition also applies if the Participant makes
     repayment within the Plan Year in which he incurs the Forfeiture Break in
     Service and that Forfeiture Break in Service would result in a complete
     forfeiture of the amount the Advisory Committee otherwise would restore.

(B) Time and Method of Restoration. If neither of the two conditions preventing
restoration of the Participant's Account Balance applies, the Advisory Committee
will restore the Participant's Account Balance as of the Plan Year Accounting
Date coincident with or immediately following the repayment. To restore the
Participant's Account Balance, the Advisory Committee, to the extent necessary,
will allocate to the Participant's Account:

     (1) First, the amount, if any, of Participant forfeitures the Advisory
     Committee would otherwise allocate under Section 3.05;

     (2) Second, the amount, if any, of the Trust Fund net income or gain for
     the Plan Year; and

                                       15

<PAGE>

     (3) Third, the Employer contribution for the Plan Year to the extent made
     under a discretionary formula.

     To the extent the amounts described in clauses (1), (2) and (3) are
insufficient to enable the Advisory Committee to make the required restoration,
the Employer must contribute, without regard to any requirement or condition of
Section 3.01, the additional amount as is necessary to enable the Advisory
Committee to make the required restoration. If, for a particular Plan Year, the
Advisory Committee must restore the Account Balance of more than one re-employed
Participant, then the Advisory Committee will make the restoration allocation(s)
to each such Participant's Account in the same proportion that a Participant's
restored amount for the Plan Year bears to the restored amount for the Plan Year
of all re-employed Participants. The Advisory Committee will not take into
account the allocation under this Section 5.04 in applying the limitation on
allocations under Part 2 of Article III.

(C) 0% Vested Participant. The deemed cash-out rule applies to a 0% vested
Participant. A 0% vested Participant is a Participant whose Account Balance
derived from Employer contributions is entirely forfeitable at the time of his
Separation from Service. Under the deemed cash-out rule, the Advisory Committee
will treat the 0% vested Participant as having received a cash-out distribution
on the date of the Participant's Separation from Service or, if the
Participant's Account is entitled to an allocation of Employer contributions for
the Plan Year in which he separates from Service, on the last day of that Plan
Year. For purposes of applying the restoration provisions of this Section 5.04,
the Advisory Committee will treat the 0% vested Participant as repaying his
cash-out "distribution" on the first date of his re-employment with the
Employer.

     5.05 ACCOUNTING FOR REPAID AMOUNT. Until the Advisory Committee restores
the Participant's Account Balance, as described in Section 5.04, the Trustee
will invest the cash-out amount the Participant has repaid in the same manner
that salary deferral contributions for such Participant would be invested.
Unless the repayment qualifies as a rollover contribution, the Advisory
Committee will direct the Trustee to repay to the Participant as soon as is
administratively practicable the full amount of the Participant's repayment
(with earnings or losses as determined under a weighting method similar to that
described under Section 9.11) if the Advisory Committee determines either of the
conditions of Section 5.04(A) prevents restoration as of the applicable
Accounting Date, notwithstanding the Participant's repayments.

     5.06 YEAR OF SERVICE - VESTING. For purposes of vesting under Section 5.03,
Year of Service means the following:

     (a) Vesting Service from May 1, 1986 to April 30, 1988: any Plan Year
     (based on the prior plan year, which was the 12 consecutive month period
     ending every April 30) during which the Employee completes not less than
     1,000 Hours of Service with the Employer, including Plan Years prior to the
     Effective Date of the Plan.

     (b) Vesting Service from May 1, 1988 to December 31, 1989: There shall be
     special vesting computation periods of May 1, 1988 to April 30, 1989 and
     January 1, 1989 to December 31, 1989. A Participant who is credited with at
     least 1,000 hours of service in any such computation period shall be
     credited with a year of Vesting Service for such period. Any employee who
     is credited with at least 1,000 hours of service in both computation
     periods shall be credited with two years of Vesting Service for such
     periods.

     (c) Vesting Service from and after January 1, 1990: any Plan Year (based on
     the Plan Year, which is the 12 consecutive month period ending every
     December 31) during which the Employee completes not less than 1,000 Hours
     of Service with the Employer.

     5.07 BREAK IN SERVICE - VESTING. For purposes of this Article V, a
Participant shall incur a "Break in Service" if, during any Plan Year, he does
not complete more than 500 Hours of Service with the Employer.

     5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of determining
"Years of Service" under Section 5.06, the Plan takes into account all Years of
Service an Employee completes with the Employer, except any Year of Service
before the Plan Year in which the Participant attained the age of 18. For the
sole purpose of determining a Participant's Vested percentage of his Account
Balance derived from Employer contributions which accrued for his benefit prior
to a Forfeiture Break in Service, the Plan disregards any Year of Service after
the Participant first incurs a Forfeiture Break in Service. The Participant
incurs a Forfeiture Break in Service when he incurs 5 consecutive Breaks in
Service.

     5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any, of his Account
Balance derived from Employer contributions occurs under the Plan on the earlier
of:

     (a) The last day of the Plan Year in which the Participant first incurs a
     Forfeiture Break in Service; or,

     (b) The date the Participant receives a cash-out distribution.

     The Advisory Committee determines the percentage of a Participant's Account
Balance forfeiture, if any, under this Section 5.09 solely by reference to the
vesting schedule of Section 5.03. A Participant will not forfeit any portion of

                                       16

<PAGE>

his Account Balance for any other reason or cause except as expressly provided
by this Section 5.09 or as provided under Section 9.14.

                                       17

<PAGE>

                                   ARTICLE VI
                                  DISTRIBUTIONS

     6.01 TIMING OF DISTRIBUTION. The Advisory Committee will direct the Trustee
to commence distribution of a Participant's Vested Account Balance in accordance
with this Section 6.01 upon the Participant's Separation from Service for any
reason, or if the Participant exercises an in-Service distribution right under
the Plan. For purposes of this Article VI, with respect to distributions from a
Participant's Deferral Contributions Account or Qualified Nonelective
Contributions Account on account of a Separation from Service, "Separation from
Service" means as the Advisory Committee determines under applicable Internal
Revenue Service guidance.

(A) Distribution upon Separation from Service (Other Than Death).

     For a Participant who incurs a Separation from Service for a reason other
than death, the Advisory Committee will direct the Trustee to commence
distribution of the Participant's Account Balance, as follows:

     (1) Participant's Vested Account Balance Not Exceeding $5,000. Upon the
Participant's Separation from Service for any reason other than death, the
Advisory Committee (without any requirement of Participant consent) will direct
the Trustee to distribute the Participant's Vested Account Balance (determined
in accordance with Section 6.01(A)(6)) not exceeding $5,000 in a lump sum as
soon as administratively practicable in the first two calendar months following
the Participant's Separation from Service with the Employer, but in no event
later than the 60th day following the close of the Plan Year in which the later
of the following events occur: (a) the Participant attains Normal Retirement
Age; or (b) the Participant Separates from Service.

     (2) Participant's Vested Account Balance Exceeds $5,000. Upon Separation
from Service for any reason other than death, a Participant whose Vested Account
Balance (determined in accordance with Section 6.01(A)(6)) exceeds $5,000 may
elect to commence distribution of his Vested Account Balance no earlier than as
soon as is administratively practicable in the first two calendar months
following the Participant's Separation from Service. The Advisory Committee,
subject to the Participant's election to postpone distribution under this
Section 6.01(A)(2) and the consent requirements of Section 6.01(A)(5), will
direct the Trustee to commence distribution of the Participant's Vested Account
Balance as elected by the Participant. Any election under this Section
6.01(A)(2) is subject to the requirements of Section 6.02.

     A Participant eligible to make an election under this Section 6.01(A)(2)
may elect to postpone distribution to any specified date, but not beyond the
later of the date the Participant attains age 62 or Normal Retirement Age. The
Plan Administrator will reapply the notice and consent requirements of Section
6.01(A)(4) and Section 6.01(A)(5) to any distribution postponed under this
Section 6.01(A)(2).

     In the absence of a Participant's consent and distribution election (as
described in Section 6.01(A)(5)) or in the absence of the Participant's election
to postpone distribution prior to his annuity starting date, the Advisory
Committee will treat the Participant as having elected to postpone his
distribution until the 60th day following the close of the Plan Year in which
the latest of the following events occurs: (a) the Participant attains Normal
Retirement Age; (b) the Participant attains age 62; or (c) the Participant's
Separation from Service. At the applicable date, the Advisory Committee then
will direct the Trustee to distribute the Participant's Vested Account balance
in a lump sum.

     (3) [Reserved.]

     (4) Distribution notice/annuity starting date. At least 30 days and not
more than 90 days prior to the Participant's annuity starting date, the Advisory
Committee must provide a written notice (or a summary notice as permitted under
Treasury regulations) to a Participant who is eligible to make an election under
Section 6.01(A)(2) ("distribution notice"). The distribution notice must explain
the optional forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to postpone
distribution until the applicable date described in Section 6.01(A)(2). For all
purposes of this Article VI, the term "annuity starting date" means the first
day of the first period for which the Plan pays an amount as an annuity or in
any other form but in no event is the "annuity starting date" earlier than a
Participant's Separation from Service.

     (5) Consent requirements/Participant distribution election. A Participant
must consent, in writing, following receipt of the distribution notice, to any
distribution under this Section 6.01, if at the time of the distribution to the
Participant, the Participant's Vested Account Balance exceeds $5,000 and the
Participant has not attained the later of Normal Retirement Age or age 62.
Accounts which are distributable prior to the foregoing applicable age are
"immediately distributable." The Participant may reconsider his distribution
election at any time prior to the annuity starting date and elect to commence
distribution as of any other date permitted under the Plan. A Participant may
elect to receive distribution at any administratively practicable time which is
earlier than 30 days following the Participant's receipt of the distribution
notice, by waiving in writing the balance of the 30 days. The consent
requirements of this Section 6.01(A)(5) do not apply with respect to defaulted
loans described in Section 10.03(B).

                                       18

<PAGE>

     (6) Determination of Vested Account Balance. For purposes of the consent
requirements under this Article VI, the Plan Administrator determines a
Participant's Vested Account Balance as of the most recent valuation date
immediately prior to the distribution date, and takes into account the
Participant's entire Account, including deferral contributions. The Advisory
Committee in determining the Participant's Vested Account Balance at the
relevant time, will disregard a Participant's Vested Account Balance existing on
any prior date, except as the Code otherwise may require.

     (7) Consent to cash-out/forfeiture. If a Participant is partially-Vested in
his Account Balance, a Participant's election under Section 6.01(A)(2) to
receive distribution prior to the Participant's incurring a Forfeiture Break in
Service. must be in the form of a cash-out distribution as defined in Section
5.04.

(B) Distribution upon Death. In the event of the Participant's Separation from
Service on account of death, the Advisory Committee will direct the Trustee, in
accordance with this Section 6.01(B) and subject to Section 6.02(D), to
distribute to the Participant's Beneficiary the Participant's Vested Account
Balance remaining in the Trust at the time of the Participant's death.

     The Advisory Committee, subject to the requirements Section 6.02(D) or to a
Beneficiary's written election (if authorized by the next paragraph of this
Section 6.01(B)), must direct the Trustee to distribute or commence distribution
of the deceased Participant's Vested Account Balance as soon as administratively
practicable following the Participant's death or, if later, on the date on which
the Advisory Committee receives notification of or otherwise confirms the
Participant's death. If the Participant's Vested Account Balance determined in
accordance with Section 6.01(A)(6) does not exceed $5,000, the Trustee will
distribute the balance in a lump sum. If the Participant's Vested Account
Balance exceeds $5,000, the Trustee will distribute the balance subject to
Section 6.02(D).

     If the Participant's death benefit is payable in full to the Participant's
surviving spouse, the surviving spouse may elect distribution at any time or in
any form (other than the joint and survivor annuity) this Article VI would
permit for a Participant to elect upon a Separation from Service.

(C) In Service-Distributions.

     (1) Deferral Contributions Account and Qualified Nonelective Contributions
Account. The Participant, until he retires, has a continuing election to receive
a distribution from his Deferral Contributions Account and Qualified Nonelective
Contributions Account if: he has attained age 59 1/2; or, in the case of his
Deferral Contributions Account, he satisfies the conditions for a hardship, as
described in paragraph (4). A hardship distribution option may not apply to the
Participants Qualified Nonelective Contributions Accounts, except as provided in
paragraph (5). If the Employer sells substantially all of the assets (within the
meaning of Code (S)409(d)(2)) used in a trade or business or sells a subsidiary
(within the meaning of Code (S)409(d)(3)), a Participant who continues
employment with the acquiring corporation is eligible for distribution from
these Accounts as if he has a Separation from Service. A distribution authorized
solely by reason of the prior sentence must constitute a lump sum distribution,
determined in a manner consistent with Code (S)401(k)(10) and the applicable
Treasury regulations.

     (2) Qualified Matching Contributions Account. The Participant, until he
retires, has a continuing election to receive all or any portion of his
Qualified Matching Contributions Account if he has attained age 59 1/2.

     (3) Procedure. A Participant must make any permitted in-service
distribution election under this Section 6.01(C) on a form prescribed by the
Advisory Committee at any time during the Plan Year for which his election is to
be effective. In his written election, the Participant must specify the
percentage or dollar amount of the distribution and the Participant's Plan
Account (Employer contributions or Participant contributions and type) to which
the election applies. The Trustee, as directed by the Advisory Committee, and
subject to Sections 6.01(A)(4) and 6.01(A)(5), will distribute the amount(s) a
Participant elects in a single sum, as soonas administratively practicable after
the Participant files his in-service distribution election with the Advisory
Committee. The Trustee will distribute the Participant's remaining Account
Balance in accordance with the other distribution provisions of this Plan.

     (4) Definition of hardship. For purposes of this Section 6.03(B), a
hardship distribution, must be on account of one or more of the following
immediate and heavy financial needs: (1) medical expenses described in Code (S)
213(d) incurred by the Participant, by the Participant's spouse, or by any of
the Participant's dependents (as defined in Code Section 152), or necessary for
these persons to obtain such medical care; (2) costs directly related to the
purchase (excluding mortgage payments) of a principal residence for the
Participant; (3) the payment of post-secondary education tuition and related
educational fees, for the next 12 months, for the Participant, for the
Participant's spouse, or for any of the Participant's dependents (as defined in
Code Section 152); (4) to prevent the eviction of the Participant from his
principal residence or the foreclosure on the mortgage of the Participant's
principal residence or (5) to prevent the foreclosure on the mortgage on the
Participant's land on which the Participant's principal residence (including a
mobile home) is located. The amount of a Participant's immediate and heavy
financial need may include amounts necessary to pay any Federal, State, or local
income taxes or penalties reasonably anticipated to result from the hardship
distribution.

                                       19

<PAGE>

     (5) Distributable amount for hardship distributions. For Plan Years
beginning after December 31, 1988, a hardship distribution may not include
earnings on an Employee's elective deferrals credited after December 31, 1988.
Qualified matching contributions and qualified nonelective contributions, and
earnings on such contributions, are not subject to hardship withdrawal unless
credited by December 31, 1988.

     (6) Employee representation. No hardship distribution may be made to a
Participant unless the Participant represents, and the Advisory Committee
determines under the facts and circumstances it is reasonable to rely on that
representation, that he is not able to relieve his immediate and heavy financial
need:

     (a) Through reimbursement or compensation by insurance or otherwise;

     (b) By reasonable liquidation of the Participant's assets, to the extent
     such liquidation would not itself cause an immediate and heavy financial
     need (including those assets of the Participant's spouse or of the
     Participant's minor children, if those assets are reasonably available to
     the Participant.);

     (c) By cessation of elective deferrals or employee contributions under the
     Plan; or

     (d) By other distributions or nontaxable (at the time of the loan) loans
     from this Plan or any other qualified plan maintained by the Employer or by
     any other employer; or

     (e) By borrowing from commercial sources on reasonable commercial terms.

     (7) Designation of directed investment fund. As part of any hardship
withdrawal request, a Participant may designate the directed investment fund or
funds that his withdrawal will be charged against. If the amount invested in
such designated fund or funds is not sufficient, the withdrawal will be charged
against each other fund on a prorata basis. If no designation is made, the
withdrawal will be charged against each fund on a prorata basis.

     (8) Transferred assets. The Trustee, prior to a Participant's Normal
Retirement Age or Disability may not make any in-service distribution to the
Participant with respect to his Account Balance attributable to assets
(including post-transfer earnings on those assets) and liabilities transferred,
within the meaning of Code (S)414(1) to this Plan from a money purchase pension
plan or from a target benefit plan qualified under Code (S)401(a) (other than
any portion of those assets and liabilities attributable to Employee
contributions).

     6.02 REQUIRED MINIMUM DISTRIBUTIONS.

(A) Priority of Required Minimum Distributions. If any distribution under this
Article VI (by Plan provision or by Participant election or nonelection), would
commence later than the Participant's Required Beginning Date ("RBD"), the
Advisory Committee instead must direct the Trustee to make distribution to the
Participant on the Participant's RBD.

     (1) RBD -- more than 5% owner. A Participant's RBD is the April 1 following
the close of the calendar year in which the Participant attains age 70 1/2 if
the Participant is a more than 5% owner (as defined in Code (S)416) with
respect to the Plan Year ending in that calendar year. If a Participant is a
more than 5% owner at the close of the relevant calendar year, the Participant
may not discontinue required minimum distributions notwithstanding the
Participant's subsequent change in ownership status.

     (2) RBD -- non 5% owners. If a Participant is not a more than 5% owner, his
RBD is the April 1 following the close of the calendar year in which the
Participant incurs a Separation from Service or, if later, the April 1 following
the close of the calendar year in which the Participant attains age 70 1/2.

     (3) Form of distribution. The Trustee will make a required minimum
distribution at the Participant's RBD in a lump sum unless the Participant,
pursuant to the provisions of this Article VI, makes a valid election to receive
an alternative form of payment.

(B) [Reserved.]

(C) Minimum Distribution Requirements for Participants. The Advisory Committee
may not direct the Trustee to distribute the Participant's Vested Account
Balance, nor may the Participant elect to have the Trustee distribute his Vested
Account Balance, under a method of payment which, as of the RBD, does not
satisfy the minimum distribution requirements under Code (S)401(a)(9) and the
applicable Treasury regulations.

     (1) Calculation of Amount. The required minimum distribution for a calendar
year ("distribution calendar year") equals the Participant's Vested Account
Balance as of the latest valuation date preceding the beginning of the
distribution calendar year divided by the Participant's life expectancy or, if
applicable, the joint and last survivor expectancy of the Participant and his
designated Beneficiary (as determined under Article VIII, subject to the
requirements of Code (S)401(a)(9)). The Advisory Committee will increase the
Participant's Vested Account Balance, as determined on the relevant valuation
date, for contributions or forfeitures allocated after the valuation date and by
December 31 of the valuation calendar year, and will decrease the valuation by
distributions made after the valuation date and by December 31 of the valuation
calendar year. For purposes of this valuation, the Advisory Committee will treat
any portion of the

                                       20

<PAGE>

minimum distribution for the first distribution calendar year made after the
close of that year as a distribution occurring in that first distribution
calendar year.

     (2) Recalculation. In computing a required minimum distribution the
Advisory Committee must use the unisex life expectancy multiples under Treas.
Reg. (S)1.72-9. The Advisory Committee, only upon the Participant's election,
will compute the minimum distribution for a distribution calendar year
subsequent to the first distribution calendar year by redetermining
("recalculation" of) the Participant's life expectancy or the Participant's and
spouse designated Beneficiary's life expectancies as elected. However, the
Advisory Committee may not redetermine the joint life and last survivor
expectancy of the Participant and a nonspouse designated Beneficiary in a manner
which takes into account any adjustment to a life expectancy other than the
Participant's life expectancy. A Participant must elect recalculation under this
Section 6.02(A) in writing and on a form the Advisory Committee prescribes, not
later than the Participant's RBD.

     (3) Minimum Distribution Incidental Benefit. If the Participant's spouse is
not his designated Beneficiary, a method of payment to the Participant (whether
by Participant election or by Advisory Committee direction) must satisfy the
minimum distribution incidental benefit ("MDIB") requirement under Code (S)
401(a)(9) for distributions made on or after the Participant's RBD and before
the Participant's death. To satisfy the MDIB requirement, the Advisory Committee
will compute the Participant's required minimum distribution by substituting the
applicable MDIB divisor for the applicable life expectancy factor, if the MDIB
divisor is a lesser number. Following the Participant's death, the Advisory
Committee will compute the minimum distribution required by Section 6.02(D)
solely on the basis of the applicable life expectancy factor and will disregard
the MDIB factor.

     (4) Payment due date. The required minimum distribution for the first
distribution calendar year is due by the Participant's RBD. The minimum
distribution for each subsequent distribution calendar year, including the
calendar year in which the Participant's RBD occurs, is due by December 31 of
that year.

     (5) Nontransferable annuity. If the Participant receives distribution in
the form of a Nontransferable Annuity Contract, the distribution satisfies this
Section 6.02(A) if the contract complies with the requirements of Code
(S)401(a)(9) and the applicable Treasury regulations.

(D) Minimum Distribution Requirements for Beneficiaries. The method of
distribution to the Participant's Beneficiary must satisfy Code (S)401(a)(9).

     (1) Death after RBD. If the Participant's death occurs after his, RBD, the
Trustee must distribute the Participant's remaining benefit to the Beneficiary
at least as rapidly as under the method in effect for the Participant,
determined without regard to the MDIB requirements of Section 6.02(C)(3).

     (2) Death prior to RBD. If the Participant's death occurs prior to his RBD,
the method of payment to the Beneficiary must provide for completion of payment
to the Beneficiary over a period not exceeding: (a) 5 years after the date of
the Participant's death; or (b) if the Beneficiary is a designated Beneficiary,
the designated Beneficiary's life expectancy. A designated Beneficiary is a
Beneficiary designated by the Participant or determined under Section 8.02. The
Advisory Committee may not direct payment of the Participant's Vested Account
Balance over a period described in clause (b) unless the Trustee will commence
payment to the designated Beneficiary no later than the December 31 following
the close of the calendar year in which the Participant's death occurred or, if
later, and the designated Beneficiary is the Participant's surviving spouse,
December 31 of the calendar year in which the Participant would have attained
age 70 1/2. If the Trustee will make distribution in accordance with clause (b),
the minimum distribution for a calendar year equals the Participant's Vested
Account Balance as of the latest valuation date preceding the beginning of the
distribution calendar year divided by the designated Beneficiary's life
expectancy. The Advisory Committee must use the unisex life expectancy multiples
under Treas. Reg. (S)1.72-9 for purposes of applying this Section 6.02(D).

     (3) Recalculation. The Advisory Committee, only upon the Participant's
election (under Section 6.02(C)(2)) or the Participant's surviving spouse
designated Beneficiary election, will recalculate the life expectancy of the
Participant's surviving spouse not more frequently than annually. However, the
Advisory Committee may not recalculate the life expectancy of a nonspouse
designated Beneficiary after the Trustee commences payment to the designated
Beneficiary. The Advisory Committee will apply this Section 6.02(D) by treating
any amount paid to the Participant's child, which becomes payable to the
Participant's surviving spouse upon the child's attaining the age of majority,
as paid to the Participant's surviving spouse. A surviving spouse designated
Beneficiary must elect recalculation under this Section 6.02(D)(3) in writing
and on a form the Advisory Committee prescribes no later than the last day of
the spouse's first distribution year.

     (4) Beneficiary election. If the Participant under Section 6.01(B) had not
elected the payment method or payment term, the Participant's Beneficiary must
elect the method of distribution no later than the date specified above upon
which the Trustee must commence distribution to the Beneficiary. If the
Beneficiary fails to elect timely a distribution

                                       21

<PAGE>

method, the Plan Administrator must commence distribution within the time
required for a Participant who dies without a designated Beneficiary.

     (E) Model Amendment. This Plan incorporates the IRS model amendment set
forth in IRS Announcement 2001-82 (July 18, 2001), set forth below:

     "With respect to distributions under the Plan made on or after January 1,
     2002, for calendar years beginning on or after January 1, 2001, the Plan
     will apply the minimum distribution requirements of section 401(a)(9) of
     the Internal Revenue Code in accordance with the regulations under section
     401(a)(9) that were proposed on January 17, 2001, (the "2001 Proposed
     Regulations"), notwithstanding any provision of the Plan to the contrary.
     If the total amount of required minimum distributions made to a Participant
     for 2001 prior to January 1, 2002, are equal to or greater than the amount
     of required minimum distributions determined under the 2001 Proposed
     Regulations, then no additional distributions are required for such
     Participant for 2001 on or after such date. If the total amount of required
     minimum distributions made to a Participant for 2001 prior to January 1,
     2002, are less than the amount determined under the 2001 Proposed
     Regulations, then the amount of required minimum distributions for 2001 on
     or after such date will be determined so that the total amount of required
     minimum distributions for 2001 is the amount determined under the 2001
     Proposed Regulations. This amendment shall continue in effect until the
     last calendar year beginning before the effective date of final regulations
     under section 401(a)(9) or such other date as may be published by the
     Internal Revenue Service."

     6.03 METHOD OF DISTRIBUTION. A Participant or Beneficiary may elect
distribution only by payment in a lump sum.

     Pending final accounting for a valuation date, the Plan Administrator may
make a partial distribution to a Participant who has incurred a Separation from
Service or to a Beneficiary.

(D) [Reserved]

     6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES. The joint
and survivor annuity requirements do not apply to this Plan. The Plan does not
provide any annuity distributions Participants nor to surviving spouses. A
transfer agreement described in Section 13.05 may not permit a plan which is
subject to the provisions of Code (S)417 to transfer assets to this Plan,
unless the transfer is an elective transfer, as described in Section 13.05.

     6.05 [Reserved].

     6.06 [Reserved].

     6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Notwithstanding any
other provision of this Plan, the Trustee, in accordance with the direction of
the Advisory Committee, must comply, with the provisions of a qualified domestic
relations order (as defined in Code (S)414(p)). Notwithstanding any other
provision of this Plan, the Trustee, in accordance with the direction of the
Plan Administrator, must comply with the provisions of a qualified domestic
relations order as defined in Code (S)414(p) ("QDRO"), which is issued with
respect to the Plan. This Plan specifically permits distribution to an alternate
payee under a QDRO at any time, irrespective of whether the Participant has
attained his earliest retirement age (as defined under Code (S)414(p)) under
the Plan. A distribution to an alternate payee prior to the Participant's
attainment of earliest retirement age is available only if: (1) the QDRO
specifies distribution at that time or permits an agreement between the Plan and
the alternate payee to authorize an earlier distribution; and (2) if the present
value of the alternate payee's benefits under the Plan exceeds $5,000, and the
order requires, the alternate payee consents to any distribution occurring prior
to the Participant's attainment of earliest retirement age. Nothing in this
Section 6.07 gives a Participant a right to receive distribution at a time the
Plan otherwise does not permit nor does Section 6.07 authorize the alternate
payee to receive a form of payment not permitted under the Plan.

     The Plan Administrator must establish reasonable procedures to determine
the qualified status of a domestic relations order. Upon receiving a domestic
relations order, the Plan Administrator promptly will notify the Participant and
any alternate payee named in the order, in writing, of the receipt of the order
and the Plan's procedures for determining the qualified status of the order.
Within a reasonable period of time after receiving the domestic relations order,
the Plan Administrator must determine the qualified status of the order and must
notify the Participant and each alternate payee, in writing, of its
determination. The Plan Administrator must provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with Department of Labor regulations.

                                       22

<PAGE>

     If any portion of the Participant's Vested Account Balance is payable
during the period the Plan Administrator is making its determination of the
qualified status of the domestic relations order, the Advisory Committee must
provide for a separate accounting of the amounts payable. If the Plan
Administrator determines the order is QDRO within 18 months of the date amounts
first are payable following receipt of the order, the Advisory Committee will
direct the Trustee to distribute the payable amounts in accordance with the
order. If the Plan Administrator does not make its determination of the
qualified status of the order within the 18 month determination period, the
Advisory Committee will direct the Trustee to distribute the payable amounts in
the manner the Plan would distribute if the order did not exist and will apply
the order prospectively if the Plan Administrator later determines the order is
a QDRO.

     To the extent it is not inconsistent with the provisions of the QDRO, the
Plan Administrator under Section 9.11 may direct the Trustee to segregate the
QDRO amount in a segregated investment account. The Trustee will make any
payments or distributions required under this Section 6.07 by separate benefit
checks or other separate distribution to the alternate payee(s).

     6.08. DEFAULTED LOAN -- TIMING OF OFFSET. If a Participant or Beneficiary
defaults on a Plan loan, the Plan treats the default as a distributable event.
The Trustee, at the time of the default, will reduce the Participant's Vested
Account Balance by the lesser of the amount in default (plus accrued interest)
or the Plan's security interest in that Vested Account Balance. To the extent
the loan is attributable to the Participant's Deferral Contributions Account,
Qualified Matching Contributions Account or Qualified Nonelective Contributions
Account, the Trustee will not reduce the Participant's Vested Account Balance
unless the Participant has separated from Service or unless the Participant has
attained age 59 1/2.

     6.09. [Reserved].

     6.10. DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.

(A) Participant Election. A Participant (including for this purpose, a former
Employee) may elect, at the time and in the manner prescribed by the Advisory
Committee, to have any portion of his/her eligible rollover distribution from
the Plan paid directly to an eligible retirement plan specified by the
Participant in a direct rollover election. For purposes of this Section 6.10, a
Participant includes as to their respective interests, a Participant's surviving
spouse and the Participant's spouse or former spouse who is an alternate payee
under a QDRO.

(B) Rollover and Withholding Notice. At least 30 days and not more than 90 days
prior to the Trustee's distribution of an eligible rollover distribution, the
Advisory Committee must provide a written notice (including a summary notice as
permitted under applicable Treasury regulations) explaining to the distributee
the rollover option, the applicability of mandatory 20% federal withholding to
any amount not directly rolled over, and the recipient's right to roll over
within 60 days after the date of receipt of the distribution ("rollover
notice"). If applicable, the rollover notice also must explain the availability
of income averaging and the exclusion of net unrealized appreciation. A
recipient of an eligible rollover distribution (whether he/she elects a direct
rollover or elects to receive the distribution), also may elect to receive
distribution at any administratively practicable time which is earlier than 30
days following receipt of the rollover notice.

(C) Default rollover. The Advisory Committee, in the case of a Participant who
does not respond timely to the notice described in Section 6.10(B), may make a
direct rollover of the Participant's Account Balance (as described in Revenue
Ruling 2000-36 or in any successor guidance) in lieu of distributing the
Participant's Account Balance.

(D) Definitions. The following definitions apply to this Section 6.10:

     (1) Eligible rollover distribution.-" An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
Participant, except that an eligible rollover distribution does not include: (a)
any distribution that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for the life (or life
expectancy) of the Participant or the joint lives (or joint life expectancies)
or the Participant and the Participant's designated beneficiary, or for a
specified period of ten years or more; (b) any Code (S)401(a)(9) required
minimum distribution; (d) any hardship distribution made after December 31,
1998, from a Participant's deferral contributions Account (except where the
Participant also satisfies a non-hardship distribution event described in
Section 14.03(m)); and the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion of net unrealized
appreciation with respect to employer securities).

     (2) Eligible retirement plan. An eligible retirement plan is an individual
retirement account described in Code (S)408(a), an individual retirement
annuity described in Code (S)408(b), an annuity plan described in Code (S)
403(a), or a qualified trust described in Code (S)403(a), or a qualified trust
described in Code (S)401(a), that accepts the Participant's or an alternate
payee's eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.

                                       23

<PAGE>

     (d) Direct rollover. A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.

                                       24

<PAGE>

                                   ARTICLE VII
                       EMPLOYER ADMINISTRATIVE PROVISIONS

     7.01 INFORMATION TO COMMITTEE. The Employer must supply current information
to the Advisory Committee as to the name, date of birth, date of employment,
annual compensation, leaves of absence, Years of Service and date of termination
of employment of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information which the
Advisory Committee considers necessary. The Employer's records as to the current
information the Employer furnishes to the Advisory Committee are conclusive as
to all persons.

     7.02 NO LIABILITY. The Employer assumes no obligation or responsibility to
any of its Employees, Participants or Beneficiaries for any act of, or failure
to act, on the part of its Advisory Committee (unless the Employer is the
Advisory Committee), the Trustee or the Plan Administrator (unless the Employer
is t he Plan Administrator).

     7.03 INDEMNITY OF COMMITTEE. The Employer indemnifies and saves harmless
the members of the Advisory Committee, and each of them, from and against any
and all loss resulting from liability to which the Advisory Committee, or the
members of the Advisory Committee, may be subjected by reason of any act or
conduct (except willful misconduct or gross negligence) in their official
capacities in the administration of this Trust or Plan or both, including all
expenses reasonably incurred in their defense, in case the Employer fails to
provide such defense. The indemnification provisions of this Section 7.03 do not
relieve any Advisory Committee member from any liability he may have under ERISA
for breach of a fiduciary duty. Furthermore, the Advisory Committee members and
the Employer may execute a letter agreement further delineating the
indemnification agreement of this Section 7.03, provided the letter agreement
must be consistent with and must not violate ERISA. The indemnification
provisions of this Section 7.03 extend to the Trustee solely to the extent
provided by a letter agreement executed by the Trustee and the Employer, except
that such indemnification provisions shall automatically apply to a trustee who
is also an Employee.

     7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer and Advisory Committee
has the right to direct the Trustee with respect to the investment and
re-investment of assets comprising the Trust Fund. Any such direction must be in
writing. To the extent the Employer directs the Trustee, the Employer
indemnifies and saves harmless the Trustee from and against any and all loss
resulting from liability to which the Trustee may be subjected by reason of any
act or conduct (except the Trustee's misconduct or negligence) in its official
capacity in the administration and investment of the Trust Fund, including all
expenses reasonably incurred in its defense, in case the Employer fails to
provide such defense. Notwithstanding the foregoing, the indemnification
provisions of this Section 7.04 do not indemnify or relieve the Trustee from any
liability it may have under ERISA for breach of a fiduciary duty.

     7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer reserves the right
to amend the vesting schedule at any time, the Advisory Committee will not apply
the amended vesting schedule to reduce the Vested percentage of any
Participant's Account Balance derived from Employer contributions (determined as
of the later of the date the Employer adopts the amendment, or the date the
amendment becomes effective) to a percentage less than the Vested percentage
computed under the Plan without regard to the amendment.

     If the Employer makes a permissible amendment to the vesting schedule, each
Participant having at least 3 Years of Service with the Employer may elect to
have the percentage of his Vested Account Balance computed under the Plan
without regard to the amendment. The Participant must file his election with the
Plan Administrator within 60 days of the latest of (a) the Employer's adoption
of the amendment; (b) the effective date of the amendment; or (c) his receipt of
a copy of the amendment. The Plan Administrator, as soon as practicable, must
forward a true copy of any amendment to the vesting schedule to each affected
Participant, together with an explanation of the effect of this amendment, the
appropriate form upon which the Participant may make an election to remain under
the vesting schedule provided under the Plan prior to the amendment and notice
of the time within which the Participant must make an election to remain under
the prior vesting schedule. For purposes of this Section 7.05, an amendment to
the vesting schedule includes any Plan amendment which directly or indirectly
affects the computation of the Vested percentage of an Employee's rights to his
Employer derived Account Balance.

                                       25

<PAGE>

                                  ARTICLE VIII
                      PARTICIPANT ADMINISTRATIVE PROVISIONS

     8.01 BENEFICIARY DESIGNATION. Any Participant may from time to time
designate, in writing, any person or persons, contingently or successively, to
whom the Trustee shall pay his Account Balance (including any life insurance
proceeds payable to the Participant's Account) on event of his death. The
Advisory Committee will prescribe the form for the written designation of
Beneficiary and, upon the Participant's filing the form with the Advisory
Committee, the form effectively revokes all designations filed prior to that
date by the same Participant.

     A married Participant's Beneficiary designation is not valid unless the
Participant's spouse consents, in writing, to the Beneficiary designation. The
spouse's consent must acknowledge the effect of that consent and a notary public
or the Plan Administrator (or his representative) must witness that consent. The
spousal consent requirements of this paragraph do not apply if: (1) the
Participant and his spouse are not married throughout the one year period ending
on the date of the Participant's death; (2) the Participant's spouse is the
Participant's sole primary beneficiary; (3) the Plan Administrator is not able
to locate the Participant's spouse; (4) the Participant is legally separated or
has been abandoned (within the meaning of State law) and the Participant has a
court order to that effect; or (5) other circumstances exist under which the
Secretary of the Treasury will excuse the consent requirement. If the
Participant's spouse is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give consent.

     Effect of Marital Dissolution on Beneficiary Designation. This paragraph is
effective for marital dissolutions that become effective on or after January 1,
2002. If, before payments of the Participant's Account Balance on account of the
Participant's death commence, the Advisory Committee receives written proof
satisfactory to the Advisory Committee of the dissolution of the Participant's
marriage, then any earlier designation by the Participant of his or her former
spouse as a Beneficiary shall be treated as though the Participant's former
spouse had predeceased the Participant. Notwithstanding the preceding sentence,
a former spouse of the Participant shall be treated as a Beneficiary of the
Participant if, upon or after the dissolution of the Participant's marriage and
before payments of the Participant's Account Balance on account the
Participant's death commence, either: (a) the Advisory Committee receives a
domestic relations order (including the decree of dissolution of marriage or a
qualified domestic relations order) that provides that the Participant's former
spouse is to be treated as a Beneficiary of the Participant; or (b) the
Participant executes and files with the Advisory Committee another Beneficiary
designation that (i) complies with this Section 8.01 and (ii) designates the
former spouse as a Beneficiary of the Participant. If the Participant's
Beneficiary designation is treated as if the Participant's former spouse
predeceased the Participant, then no payments of the Participant's Account
Balance on account of the Participant's death shall be made to heirs or other
beneficiaries of the former spouse shall receive benefits from the Plan as a
Beneficiary of the Participant, except as otherwise provided in the
Participant's Beneficiary designation (or as provided under Section 8.02).

     8.02 NO BENEFICIARY DESIGNATION. If a Participant fails to name a
Beneficiary in accordance with Section 8.01, or if the Beneficiary named by a
Participant predeceases him or dies before complete distribution of the
Participant's Account Balance, then the Trustee will pay the Participant's
Account Balance in accordance with Section 6.02 in the following order of
priority to:

     (a)  The Participant's surviving spouse;

     (b)  The Participant's surviving children, including adopted children, in
          equal shares;

     (c)  The Participant's surviving parents, in equal shares; or

     (d)  The legal representative of the estate of the last to die of the
          Participant and his Beneficiary.

     The Advisory Committee will direct the Trustee as to the method and to whom
the Trustee will make payment under this Section 8.02.

     8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each Beneficiary of a
deceased Participant must furnish to the Advisory Committee such evidence, data
or information as the Advisory Committee considers necessary or desirable for
the purpose of administering the Plan. The provisions of this Plan are effective
for the benefit of each Participant upon the condition precedent that each
Participant will furnish promptly full, true and complete evidence, data and
information when requested by the Advisory Committee, provided the Advisory
Committee advises each Participant of the effect of his failure to comply with
its request.

     8.04 ADDRESS FOR NOTIFICATION. Each Participant and each Beneficiary of a
deceased Participant must file with the Advisory Committee from time to time, in
writing, his post office address and any change of post office address. Any
communication, statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Advisory Committee, or as shown
on the records of the Employer, binds the Participant, or Beneficiary, for all
purpose of this Plan.

                                       26

<PAGE>

     8.05 ASSIGNMENT OR ALIENATION. Except as permitted under applicable statute
(including Code (S)401(a)(13)(C) and ERISA (S)206(d)(4)) or regulation, a
Participant or a Beneficiary may not assign, alienate, transfer or sell any
right or claim to a benefit or distribution from the Plan and any attempt to
assign, alienate, transfer or sell such a right or claim shall be void; and no
such right or claim under the Plan shall be subject to attachment, garnishment,
levy, execution, sequestration or other legal or equitable process. The
preceding sentence also applies to the creation, assignment, or recognition of a
right to any benefit payable with respect to a participant pursuant to a
domestic relations order, unless such order is determined to be a qualified
domestic relations order pursuant to Section 6.07.

     8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator, within the time
prescribed by ERISA and the applicable regulations, must furnish all
Participants and Beneficiaries a summary description of any material amendment
to the Plan or notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.

     8.07 LITIGATION AGAINST THE TRUST. A court of competent jurisdiction may
authorize any appropriate equitable relief to redress violations of ERISA or to
enforce any provisions of ERISA or the terms of the Plan. A fiduciary may
receive reimbursement of expenses properly and actually incurred in the
performance of his duties with the Plan.

     8.08 INFORMATION AVAILABLE. Any Participant in the Plan or any Beneficiary
may examine copies of the summary Plan description, latest annual report, any
bargaining agreement, this Plan and Trust, contract or any other instrument
under which the Plan was established or is operated. The Plan Administrator will
maintain all of the items listed in this Section 8.08 in his office, or in such
other place or places as he may designate from time to time in order to comply
with the regulations issued under ERISA, for examination during reasonable
business hours. Upon the written request of a Participant or Beneficiary the
Plan Administrator will furnish him with a copy of any item listed in this
Section 8.08. The Plan Administrator may make a reasonable charge to the
requesting person for the copy so furnished.

     8.09 CLAIMS PROCEDURE FOR DENIAL OF BENEFITS. A Participant or a
Beneficiary may file with the Advisory Committee a written claim for benefits,
if the Participant or the Beneficiary disputes the Advisory Committee's
determination regarding the Participant's or Beneficiary's Plan benefit.
However. the Plan will distribute only such Plan benefits to Participants or
Beneficiaries as the Advisory Committee in its discretion determines a
Participant or Beneficiary is entitled to. The Advisory Committee will maintain
a separate written document as part of (or which accompanies) the Plan's summary
plan description explaining the Plan's claims procedure. This Section 8.09
specifically incorporates the written claims procedure as from time to time
published by the Advisory Committee as a part of the Plan. If the Advisory
Committee pursuant to the Plan's written claims procedure makes a final written
determination denying a Participant's or Beneficiary's benefit claim, the
Participant or Beneficiary to preserve the claim must file an action with
respect to the denied claim not later than 180 days following the date of the
Advisory Committee's final determination.

     8.10 PARTICIPANT DIRECTION OF INVESTMENTA Participant has the right to
direct the Trustee with respect to the investment or re-investment of the assets
comprising the Participant's individual Account from among the investment
choices designated by the Advisory Committee from time to time. As of October 1,
1992, the investment choices include the Employer Stock Fund. To effect
Participant direction of investment, a Participant will follow such methods as
the Advisory Committee shall from time-to-time prescribe, which may include
telephone voice-response systems or internet-based systems. The Advisory
Committee will separately account for participants' investments.

     Each Participant's investment election shall be in multiples of five
percent (5%) or in any other multiple as prescribed by the Advisory Committee.
Each Participant may direct the percentage of future contributions and/or
existing account balances to be allocated to each investment choice at such
times as the Advisory Committee prescribes. A participant's investment direction
becomes effective no later than the next business day after the Trustee receives
the direction, or as soon as administratively practicable thereafter.

     Each Participant shall be solely responsible for the selection of his
investments as allowed under the Plan. The fact that an investment is available
to a Participant for investment under the Plan shall not be construed as a
recommendation to invest in that particular investment.

     A Participant may not direct that more than 25% of future contributions be
invested in the Employer Stock Fund. A Participant may not change the percentage
allocation of his existing Account balances to be invested in the Employer Stock
Fund to exceed 25% (calculating the percentage by using existing Account
balances as of the most recent valuation date preceding the Participant's
requested investment direction). If, due to market gains or losses or for any
other reason, the Employer Stock Fund comprise 25% or more of the value of the
Participant's Account balances (calculating the percentage by using existing
Account balances as of the most recent valuation date preceding the
Participant's requested investment direction), the Participant will not be
required to move assets out of Employer Securities and into other funds in order
to keep the percentage invested the Employer Stock Fund below 25%, and such
Participant may continue to direct that up to 25% of future contributions be
invested in the Employer Stock Fund.

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<PAGE>

     Because the Employer Stock Fund is a pooled account consisting of shares of
Employer Stock, a Participant's investment in the Employer Stock Fund is an
interest in the Employer Stock Fund. No shares of Employer Stock are actually
allocated to a Participant's Account on account of investment in the Employer
Stock Fund.

     Participants who direct investment of their Accounts into the Employer
Stock Fund have voting and similar rights with respect to the underlying
Employer Stock as described in Sections 10.17[A] and 10.17[B]. When exercising
those rights, a Participant who is allocated voting or similar rights acts as a
"named fiduciary" within the meaning of ERISA (S)403(a)(1) with respect to the
shares of Employer Stock effectively allocated to the Participant.

                                       28

<PAGE>

                                   ARTICLE IX
             ADVISORY COMMITTEE-DUTIES WITH RESPECT TO PARTICIPANTS'
                                    ACCOUNTS

     9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must appoint an Advisory
Committee to administer the Plan, the members of which may or may not be
Participants in the Plan, or which may be the Plan Administrator acting alone.
The members of the Advisory Committee shall serve without compensation for
services as such, but the Employer will pay all expenses of the Advisory
Committee, including the expense for any bond required under ERISA.

     9.02 TERM. Each member of the Advisory Committee serves until the
appointment of his successor.

     9.03 POWERS. In case of a vacancy in the membership of the Advisory
Committee, the remaining members of the Advisory Committee may exercise any and
all of the powers, authority, duties and discretion conferred upon the Advisory
Committee pending the filling of the vacancy.

     9.04 GENERAL. The Advisory Committee has the following powers and duties:

     (a) To select a Secretary, who need not be a member of the Advisory
     Committee;

     (b) To determine the rights of eligibility of an Employee to participate in
     the Plan, the value of the Participant's Account Balance and the Vested
     percentage of each Participant's Account Balance;

     (c) To adopt rules of procedure and regulations necessary for the proper
     and efficient administration of the Plan provided the rules are not
     inconsistent with the terms of this Agreement;

     (d) To enforce the terms of the Plan and the rules and regulations it
     adopts;

     (e) To direct the Trustee, in writing, as respects the investment and
     distribution of the Trust;

     (f) To review and render decisions respecting a claim for (or denial of a
     claim for) a benefit under the Plan and to exercise discretionary authority
     to determine eligibility for benefits or to construe the terms of the Plan;

     (g) To furnish the Employer with information which the Employer may require
     for tax or other purposes;

     (h) To engage the service of agents whom it may deem advisable to assist it
     with the performance of its duties;

     (i) To engage the services of an Investment Manager or Managers (as defined
     in ERISA (S)3(38)), each of whom will have full power and authority to
     manage, acquire or dispose (or direct the Trustee, in writing, with respect
     to acquisition or disposition) of any Plan asset under its control;

     (j) To establish a nondiscriminatory policy which the Trustee must observe
     in making loans, if any, to Participants; and

     (k) To establish and maintain a funding standard account and to make
     credits and charges to the account to the extent required by and in
     accordance with the provisions of the Code.

     The Advisory Committee must exercise all of its powers, duties and
discretion under the Plan in a uniform and nondiscriminatory manner.

     Loan Policy. A loan policy described in paragraph (j) must be a written
document and must include: (1) the identity of the person or positions
authorized to administer the participant loan program; (2) a procedure for
applying for the loan; (3) the criteria for approving or denying a loan; (4) the
limitations, if any, on the types and amounts of loans available; (5) the
procedure for determining a reasonable rate of interest; (6) the types of
collateral which may secure the loan; and (7) the events constituting default
and the steps the Plan will take to preserve plan assets in the event of
default.

     9.05 FUNDING POLICY. The Advisory Committee will review, not less often
than annually, all pertinent Employee information and Plan data in order to
establish the funding policy of the Plan and to determine the appropriate
methods of carrying out the Plan's objectives. The Advisory Committee must
communicate periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term financial needs so
investment policy can be coordinated with Plan financial requirements.

     9.06 MANNER OF ACTION. The decision of a majority of members appointed and
qualified controls.

     9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee may authorize any
one of its members, or its Secretary, to sign on its behalf any notices,
directions, applications, certificates, consents, approvals, waivers, letters or
other documents. The Advisory Committee must evidence this authority by an
instrument signed by all members and filed with the Trustee.

     9.08 INTERESTED MEMBER. No member of the Advisory Committee may decide or
determine any matter concerning the distribution, nature or method of settlement
of his own benefits under the Plan, except in exercising an

                                       29

<PAGE>

election available to that member in his capacity as a Participant, unless the
Plan Administrator is acting alone in the capacity of the Advisory Committee.

     9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will maintain a separate
Account, or multiple Accounts, in the name of each Participant to reflect the
Participant's Account Balance under the Plan. If a Participant re-enters the
Plan subsequent to his having a Forfeiture Break in Service (as defined in
Section 5.08), the Advisory Committee must maintain a separate Account for the
Participant's pre-Forfeiture Break in Service Account Balance and a separate
Account for his post-Forfeiture Break in Service Account Balance unless the
Participant's entire Account Balance under the Plan is 100% Vested.

     The Advisory Committee will make its allocations to the Accounts of the
Participants in accordance with the provisions of Section 9.11. The Advisory
Committee may direct the Trustee to maintain a temporary segregated investment
Account in the name of a Participant to prevent a distortion of income, gain or
loss allocations under Section 9.11. The Advisory Committee must maintain
records of its activities.

     9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of each
Participant's Account Balance consists of that proportion of the net worth (at
fair market value) of the Employer's Trust Fund which the net credit balance in
his Account (exclusive of the cash value of incidental benefit insurance
contracts) bears to the total net credit balance in the Accounts (exclusive of
the cash value of incidental benefit insurance contracts) of all Participants
plus the cash surrender value of any incidental benefit insurance contracts held
by the Trustee on the Participant's life.

     For purposes of a distribution under the Plan, the value of a Participant's
Account Balance is its value as of the valuation date that coincides with the
date on which the assets allocated to the Participant's Account are liquidated
by the Plan's recordkeeper (or if there is no valuation date on the liquidation
date, the valuation date immediately preceding the liquidation date).

     9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS. A "valuation
date" under this Plan is each Accounting Date and each interim valuation date
determined under Section 10.14. As of each valuation date the Advisory Committee
must adjust Accounts to reflect net income, gain or loss since the last
valuation date. The valuation period is the period beginning the day after the
last valuation date and ending on the current valuation date.

     Trust Fund Accounts. The allocation provisions of this paragraph apply to
all Participant Accounts other than segregated investment Accounts. The Advisory
Committee first will adjust the Participant Accounts, as those Accounts stood at
the beginning of the current valuation period, by reducing the Accounts for any
forfeitures arising under Section 5.09 or under Section 9.14, for amounts
charged during the valuation period to the Accounts in accordance with Section
9.13 (relating to distributions), for the cash value of incidental benefit
insurance contracts and for the amount of any Account which the Trustee has
fully distributed since the immediately preceding valuation date. The Advisory
Committee then, subject to the restoration allocation requirements of Section
5.04 or of Section 9.14, will allocate the net income, gain or loss pro rata to
the adjusted Participant Accounts. The allocable net income, gain or loss is the
net income (or net loss), including the increase or decrease in the fair market
value of assets, since the last valuation date.

     To the extent there is Participant direction of investment under Section
8.10, the net income, gain or loss will be allocated to Participant Accounts
according to the amount each Participant has invested in each investment.

     The net income, gain or loss on salary deferral contributions and matching
contributions will be credited according to a "weighted average allocation"
method, which will treat a portion of the applicable contributions actually paid
to the Trust during the valuation period as if includible in the Participant's
Account as of the beginning of the valuation period. The method of fixing such
portion will be determined in a nondiscriminatory and uniform manner by the
Advisory Committee.

     Segregated Investment Accounts. A segregated investment Account receives
all income it earns and bears all expense or loss it incurs. As of the valuation
date, the Advisory Committee must reduce a segregated Account for any forfeiture
arising under Section 5.09 after the Advisory Committee has made all other
allocations, changes or adjustments to the Account for the Plan Year.

     Additional Rules. An Excess Amount or suspense account described in Part 2
of Article III does not share in the allocation of net income, gain or loss
described in this Section 9.11. This Section 9.11 applies solely to the
allocation of net income, gain or loss of the Trust. The Advisory Committee will
allocate the Employer contributions and Participant forfeitures, if any in
accordance with Article III.

     9.12 INDIVIDUAL STATEMENT. As soon as practicable after the Accounting Date
of each Plan Year but within the time prescribed by ERISA and the regulations
under ERISA, the Plan Administrator will deliver to each Participant a statement
reflecting the condition of his Account Balance in the Trust as of that date and
such other

                                       30

<PAGE>

information ERISA requires be furnished the Participant or Beneficiary. No
Participant, except a member of the Advisory Committee, has the right to inspect
the records reflecting the Account of any other Participant.

     9.13 ACCOUNT CHARGED. The Advisory Committee will charge all distributions
made to a Participant or to his Beneficiary from his Account against the Account
of the Participant when made.

     9.14 LOST PARTICIPANTS. The Plan does not require either the Trustee or the
Advisory Committee to search for, or ascertain the whereabouts of, any
Participant or Beneficiary. If the Advisory Committee is unable to locate any
Participant or Beneficiary whose Account Balance becomes distributable under
Article VI or under Section 13.06 (a "lost Participant"), the Advisory Committee
may apply the provisions of this Section 9.14.

     (A) Attempt to Locate. The Plan Administrator may use one or more of the
following methods to attempt to locate a lost Participant: (1) provide a
distribution notice to the lost Participant at his/her last known address by
certified or registered mail; (2) use of the IRS letter forwarding program under
Revenue Procedure 94-22; (3) use of a commercial locator service, the internet
or other general search method; or (4) use of the Social Security Administration
search program.

     (B) Failure to Locate. If a lost Participant remains unlocated for 6 months
following the date of the Plan Administrator first attempts to locate the lost
Participant using one or more of the methods described in Section 9.14(A), the
Plan Administrator may forfeit the lost Participant's Account. If the Plan
Administrator will forfeit the lost Participant's Account, the forfeiture occurs
at the end of the above-described 6 month period and the Plan Administrator will
allocate the forfeiture in accordance with Section 3.05. If a lost Participant
whose Account Balance whose account was forfeited thereafter at any time makes a
claim for his forfeited Account Balance, the Advisory Committee must restore the
lost Participant's forfeited Account Balance to the same dollar amount as the
dollar amount of the Account Balance forfeited, unadjusted for any net income,
gains or losses occurring subsequent to the date of the forfeiture. The Advisory
Committee will make the restoration during the Plan Year in which the lost
Participant makes the claim first from the amount, if any, of Participant
forfeitures the Advisory Committee otherwise would allocate for the Plan Year,
then from the amount, if ,any, of Trust net income or gain for the Plan Year and
last from the amount, or additional amount, the Employer contributes to enable
the Advisory Committee to make the required restoration. The Advisory Committee
will direct the Trustee to distribute the Participant's or Beneficiary's
restored Account Balance to him not later than 60 days after the close of the
Plan Year in which the Advisory Committee restores the forfeited Account
Balance. The Advisory Committee under this Section 9.14(B) will forfeit the
entire Account Balance of the lost Participant, including deferral contributions
and Participant contributions.

     (C) Nonexclusivity and Uniformity. The provisions of Section 9.14 are
intended to provide permissible but not exclusive means for the Advisory
Committee to administer the Account Balances of lost Participants. The Advisory
Committee may utilize any other reasonable method to locate lost Participants
and to administer the Account Balances of lost Participants, including the
default rollover under Section 6.10(C) and such other methods as the Revenue
Service or the U.S. Department of Labor ("DOL") may in the future specify. The
Advisory Committee will apply Section 9.14 in a reasonable, uniform and
nondiscriminatory manner, but may in determining a specific course of action as
to a particular Account Balance, reasonably take into account differing
circumstances such as the amount of a lost Participant's Account Balance, the
expense in attempting to locate a lost Participant, the Advisory Committee's
ability to establish and the expense of establishing a rollover IRA, and other
factors. The Advisory Committee may charge to the Account Balance of a lost
Participant the reasonable expenses incurred under this Section 9.14 and which
are associated with the lost Participant's Account Balance.

     9.15 PLAN CORRECTION. The Advisory Committee in conjunction with the
Employer may undertake such correction of Plan errors as the Advisory Committee
deems necessary, including correction to preserve tax qualification of the Plan
under Code (S)401(a) or to correct a fiduciary breach under ERISA. Without
limiting the Advisory Committee's authority under the prior sentence, the Plan
Advisory Committee, as it determines to be reasonable and appropriate, may
undertake correction of Plan document, operational, demographic and employer
eligibility failures under a method described in the Plan or under the Employee
Plans Compliance Resolution System CEPCRS") or any successor program to EPCRS.
The Advisory Committee, as it determines to be reasonable and appropriate, also
may undertake or assist the appropriate fiduciary or plan official in
undertaking correction of a fiduciary breach, including correction under the
Voluntary Fiduciary Correction Program ("VFC") or any successor program to VFC.
The Advisory Committee to correct an operational error may require the Trustee
to distribute from the Plan elective deferrals or vested matching contributions,
including earnings, where such amounts result from an operational error other
than a failure of Code (S)415, Code (S)402(g), a failure of the ADP or ACP
tests, or a failure of the multiple use limitation.

     9.16 NO RESPONSIBILITY FOR OTHERS. Except as required under ERISA, the
Advisory Committee has no responsibility or obligation under the Plan to
Participants or Beneficiaries for any act required of the Employer, the Trustee,

                                       31

<PAGE>

the Custodian or of any other service provider to the Plan. The Advisory
Committee is not responsible to collect any required plan contribution or to
determine the correctness or deductibility or any Employer contribution. The
Advisory Committee in administering the Plan is entitled to, but is not required
to rely upon, information which a Participant, Beneficiary, Trustee, Custodian,
the Employer, a Plan service provider or representatives thereof provide to the
Plan Administrator.

     9.17 NOTICE, DESIGNATION, ELECTION, CONSENT AND WAIVER. All notices under
the Plan and all Participant or Beneficiary designations, elections, consents or
waivers must be in writing and made in a form the Advisory Committee specifies
or otherwise approves. To the extent permitted by Treasury regulations or other
applicable guidance, any Plan notice, election, consent or waiver may be
transmitted electronically. Any person entitled to notice under the Plan may
waive the notice or shorten the notice period except as otherwise required by
the Code or ERISA.

                                       32

<PAGE>

                                    ARTICLE X
                           TRUSTEE, POWERS AND DUTIES

     10.01 ACCEPTANCE. The Trustee accepts the Trust created under the Plan
and agrees to perform the obligations imposed. The Trustee must provide bond for
the faithful performance of its duties under the Trust to the extent required by
ERISA.

     10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is accountable to the Employer
for the funds contributed to it by the Employer, but does not have any duty to
see that the contributions received comply with the provisions of the Plan. The
Trustee is not obliged to collect any contributions from the Employer, nor is
obliged to see that funds deposited with it are deposited according to the
provisions of the Plan.

     10.03 INVESTMENT POWERS.

[A] Trustee Powers. The Trustee has full discretion and authority with regard to
the investment of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager or with respect
to a Plan asset subject to Employer, Participant or Advisory Committee direction
of investment (including direction of investment by the Employer as provided in
Section 7.04 and by a Participant as provided in Section 8.10). The Trustee must
coordinate its investment policy with Plan financial needs as communicated to it
by the Advisory Committee. The Trustee is authorized and empowered, but not by
way of limitation, with the following powers, rights and duties:

     (a) To invest in Employer Stock (that is, to hold and acquire Employer
     Stock) comprising up to 100% of the value of the Trust Fund and to invest
     any part or all of the Trust Fund in any common or preferred stocks,
     open-end or closed-end mutual funds, put and call options traded on a
     national exchange, United States retirement plan bonds, corporate bonds,
     debentures, convertible debentures, commercial paper, U.S. Treasury bills,
     U.S. Treasury notes and other direct or indirect obligations of the United
     States Government or its agencies, improved or unimproved real estate
     situated in the United States, limited partnerships, insurance contracts of
     any type, mortgages, notes or other property of any kind, real or personal,
     and to buy or sell options on common stock on a nationally recognized
     exchange with or without holding the underlying common stock, and to make
     any other investments the Trustee deems appropriate, as a prudent man would
     do under like circumstances with due regard for the purposes of this Plan.
     Any investment made or retained by the Trustee in good faith is proper but
     must be of a kind (with the exception of Employer Securities) constituting
     a diversification considered by law suitable for trust investments;

     (b) To retain in cash so much of the Trust Fund as it may deem advisable to
     satisfy liquidity needs of the Plan and to deposit any cash held in the
     Trust Fund in a bank account at reasonable interest. If the Trustee is a
     bank or similar financial institution supervised by the United States or by
     a State, this paragraph (b) includes specific authority to invest in any
     type of deposit of the Trustee (or of a bank related to the Trustee within
     the meaning of Code (S)414(b)) at a reasonable rate of interest or in a
     common trust fund (the provisions of which govern the investment of such
     assets and which the Plan incorporates by this reference) as described in
     Code (S)584 which the Trustee (or its affiliate, as defined in Code
     (S)1504) maintains exclusively for the collective investment of money
     contributed by the bank (or the affiliate) in its capacity as trustee and
     which conforms to the rules of the Comptroller of the Currency;

     (c) To manage, sell, contract to sell, grant options to purchase, convey,
     exchange, transfer, abandon, improve, repair, insure, lease for any term
     even though commencing in the future or extending beyond the term of the
     Trust, and otherwise deal with all property, real or personal, in such
     manner, for such considerations and on such terms and conditions as the
     Trustee decides;

     (d) To credit and distribute the Trust as directed by the Advisory
     Committee. The Trustee is not obliged to inquire as to whether any payee or
     distributee is entitled to any payment or whether the distribution is
     proper or within the terms of the Plan, or as to the manner of making any
     payment or distribution. The Trustee accountable only to the Advisory
     Committee for any payment or distributions made by it in good faith on the
     order or direction of the Advisory Committee;

     (e) To borrow money, to assume indebtedness, extend mortgages and encumber
     by mortgage or pledge;

     (f) To compromise, contest, arbitrate or abandon claims and demands, in its
     discretion;

     (g) To have with respect to the Trust all of the rights of an individual
     owner, including the power to give proxies, to participate in any voting
     trusts, mergers, consolidations or liquidations, and to exercise or sell
     stock subscriptions or conversion rights, subject to the requirements of
     Section 10.17;

     (h) To lease for oil, gas and other mineral purposes and to create mineral
     severances by grant or reservation; to pool or unitize interests in oil,
     gas and other minerals; and to enter into operating agreements and to
     execute division and transfer orders;

                                       33

<PAGE>

     (i) To hold any securities or other property in the name of the Trustee or
     its nominee, with depositories or agent depositories or in another form as
     it may deem best, with or without disclosing the trust relationship;

     (j) To perform any and all other acts in its judgment necessary or
     appropriate for the proper and advantageous management, investment and
     distribution of the Trust;

     (k) To retain any funds or property subject to any dispute without
     liability for the payment of interest, and to decline to make payment or
     delivery of the funds or property until final adjudication is made by a
     court of competent jurisdiction;

     (l) To file all tax returns required of the Trustee;

     (m) To furnish to the Employer, the Plan Administrator and the Advisory
     Committee a quarterly statement of account, within 30 days of the close of
     each quarter Plan Year, showing the condition of the Trust Fund and all
     investments, receipts, disbursements and other transactions effected by the
     Trustee during the Plan Year covered by the statement and also stating the
     assets of the Trust held at the end of the Plan Year, which accounts are
     conclusive on all persons, including the Employer, the Plan Administrator
     and the Advisory Committee, except as to any act or transaction concerning
     which the Employer, the Plan Administrator or the Advisory Committee files
     with the Trustee written exceptions or objections within 90 days after the
     receipt of the accounts or for which ERISA authorizes a longer period
     within which to object.

     (n) To begin, maintain or defend any litigation necessary in connection
     with the administration of the Plan, except that the Trustee is not obliged
     or required to do so unless indemnified to its satisfaction.

[B] Participant Loans. This Section 10.03[B] specifically authorizes the Trustee
to make loans on a nondiscriminatory basis to a Participant in accordance with
the loan policy established by the Advisory Committee, provided: (1) the loan
policy satisfies the requirements of Section 9.04; (2) loans are available to
all Participants on a reasonably equivalent basis and are not available in a
greater amount for Highly Compensated Employees than for other Employees; (3)
any loan is adequately secured and bears a reasonable rate of interest; (4) the
loan provides for repayment within a specified time; (5) the default provisions
of the note prohibit offset of the Participant's Vested Account Balance prior to
the time the Trustee otherwise would distribute the Participant's Vested Account
Balance; (6) the amount of the loan does not exceed (at the time the Plan
extends the loan) the present value of the Participant's Vested Account Balance;
and (7) the loan otherwise conforms to the exemption provided by Code
(S)4975(d)(1). If the joint and survivor requirements of Article VI apply to the
Participant, the Participant may not pledge any portion of his Account Balance
as security for a loan made after August 18, 1985, unless, within the 90 day
period ending on the date the pledge becomes effective, the Participant's
spouse, if any, consents (in a manner described in Section 6.05 other than the
requirement relating to the consent of a subsequent spouse) to the security or,
by separate consent, to an increase in the amount of security.

     10.04 RECORDS AND STATEMENTS. The records of the Trustee pertaining to the
Plan must be open to the inspection of the Plan Administrator, Advisory
Committee and the Employer at all reasonable times and may be audited from time
to time by any person or persons as the Employer, Plan Administrator or Advisory
Committee may specify in writing. The Trustee must furnish the Plan
Administrator or Advisory Committee with whatever information relating to the
Trust Fund the Plan Administrator or Advisory Committee considers necessary.

     10.05 FEES AND EXPENSES FROM FUND. The Trustee will receive reasonable
annual compensation as may be agreed upon from time to time between the Employer
and the Trustee. The Trustee will pay all fees and expenses reasonably incurred
for administration of the Plan from the Trust Fund unless the Employer pays the
fees and expenses. The Advisory Committee will not treat any fee or expense
paid, directly or indirectly, by the Employer as an Employer contribution,
provided the fee or expense relates to the ordinary and necessary administration
of the Fund. No person who is receiving full pay from the Employer shall receive
compensation for services as Trustee.

     10.06 PARTIES TO LITIGATION. Except as otherwise provided by ERISA, only
the Employer, the Plan Administrator, the Advisory Committee, and the Trustee
are necessary parties to any court proceeding involving the Trustee or the Trust
Fund. No Participant, or Beneficiary, is entitled to any notice of process
unless required by ERISA. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the Advisory Committee,
the Trustee, Participants and Beneficiaries.

     10.07 PROFESSIONAL AGENTS. The Trustee may employ and pay from the Trust
Fund reasonable compensation to agents, attorneys, accountants and other persons
to advise the Trustee as in its opinion may be necessary. The Trustee may
delegate to any agent, attorney, accountant or other person selected by it any
non-Trustee power or duty vested in it by the Plan, and the Trustee may act or
refrain from acting on the advice or opinion of any agent, attorney, accountant
or other person so selected.

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<PAGE>

     10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may make distribution
under the Plan in cash or property, or partly in each, at its fair market value
as determined by the Trustee. For purposes of a distribution to a Participant or
to a Participant's designated Beneficiary or surviving spouse, "property"
includes a Nontransferable Annuity contract, provided the contract satisfies the
requirements of this Plan.

     10.09 DISTRIBUTION DIRECTIONS. If no one claims a payment or distribution
made from the Trust, the Trustee shall promptly notify the Advisory Committee
and then dispose of the payment in accordance with the subsequent direction of
the Advisory Committee.

     10.10 THIRD PARTY. No person dealing with the Trustee is obligated to see
to the proper application of any money paid or property delivered to the
Trustee, or to inquire whether the Trustee has acted pursuant to any of the
terms of the Plan. Each person dealing with the Trustee may act upon any notice,
request or representation in writing by the Trustee, or by the Trustee's duly
authorized agent, and is not liable to any person whomsoever in so acting. The
certificate of the Trustee that it is acting in accordance with the Plan will be
conclusive in favor of any person relying on the certificate.

     If more than two persons act as Trustee, the decision of a majority of such
persons controls with respect to any decision regarding the administration or
investment of the Trust Fund.

     10.11 RESIGNATION. The Trustee may resign at any time as Trustee of the
Plan by giving 30 days' written notice in advance to the Employer and to the
Advisory Committee. If the Employer fails to appoint a successor Trustee within
60 days of its receipt of the Trustee's written notice of resignation, the
Trustee will treat the Employer as having appointed itself as Trustee and as
having filed its acceptance of appointment with the former Trustee.

     10.12 REMOVAL. The Employer, by giving 30 days' written notice in advance
to the Trustee, may remove any Trustee. In the event of the resignation or
removal of a Trustee, the Employer must appoint a successor Trustee if it
intends to continue the Plan. If two or more persons hold the position of
Trustee, in the event of the removal of one such person, during any period the
selection of a replacement is pending, or during any period such person is
unable to serve for any reason, the remaining person or persons will act as the
Trustee.

     10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each successor Trustee succeeds
to the title to the Trust vested in his predecessor by accepting in writing his
appointment as successor Trustee and filing the acceptance with the former
Trustee and the Advisory Committee without the signing or filing of any further
statement. The resigning or removed Trustee, upon receipt of acceptance in
writing of the Trust by the successor Trustee, must execute all documents and do
all acts necessary to vest the title of record in any successor Trustee. Each
successor Trustee has and enjoys all of the powers, both discretionary and
ministerial, conferred under this Agreement upon his predecessor. A successor
Trustee is not personally liable for any act or failure to act of any
predecessor Trustee, except as required under ERISA. With the approval of the
Employer and the Advisory Committee, a successor Trustee, with respect to the
Plan, may accept the account rendered and the property delivered to it by a
predecessor Trustee without incurring any liability or responsibility for so
doing.

     10.14 VALUATION OF TRUST. The Trustee must value the Trust Fund as of each
Accounting Date and each March 31, June 30 and September 30 and on each business
day of the Trustee to determine the fair market value of the assets in the Trust
Fund. The Trustee must also value the Trust Fund on such other dates as directed
in writing by the Advisory Committee. Collectively, all such dates shall be
known as the "valuation dates."

     10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER APPOINTED. The
Trustee is not liable for the acts or omissions of any Investment Manager or
Managers the Advisory Committee may appoint, nor is the Trustee under any
obligation to invest or otherwise manage any asset of the Plan which is subject
to the management of a properly appointed Investment Manager. The Advisory
Committee, the Trustee and any properly appointed Investment Manager may execute
a letter agreement as a part of this Plan delineating the duties,
responsibilities and liabilities of the Investment Manager with respect to any
part of the Trust Fund under the control of the Investment Manager.

     10.16 INVESTMENT IN GROUP TRUST FUND. The Trustee, for collective
investment purposes, may combine into one trust fund the Trust created under
this Plan with the Trust created under any other qualified retirement plan the
Employer maintains. However, separate records of account must be maintained for
the assets of each Trust in order to reflect properly each Participant's Account
Balance under the plan(s) in which he is a Participant.

     The Employer specifically authorizes the Trustee to invest all or any
portion of the assets comprising the Trust Fund in any group trust fund which at
the time of the investment provides for the pooling of the assets of plans
qualified under Code (S)401(a). This authorization applies solely to a group
trust fund exempt from taxation under code (S)501(a) and the trust agreement of
which satisfies the requirements of Revenue Ruling 81-100. The provisions of the
group trust fund agreement, as amended from time to time, are by this reference
incorporated within this Plan and Trust. The provisions of the group trust fund
will govern any investment of Plan assets in that fund.

                                       35

<PAGE>

     10.17 DUTIES PERTAINING TO THE EMPLOYER STOCK FUND.

[A] Investment. The Trustee will purchase or sell Employer Stock for the
Employer Stock Fund through transactions on the open market. Generally, the
Trustee will purchase or sell Employer Stock for the Employer Stock Fund at
least once each month, unless the Advisory Committee directs the Trustee to
purchase and sell more frequently.

[B] Voting. Each Participant with an interest in the Employer Stock Fund shall
have the right to participate confidentially in the exercise of voting rights
appurtenant to shares held in the Employer Stock Fund, provided that such person
had an interest in the Employer Stock Fund as of the most recent valuation date
coincident with or preceding the applicable record date for which records are
available. Such participation shall be achieved by completing and filing with
the Trustee (or such other person who shall be independent of the Employer as
the Advisory Committee shall designate), at least 10 days prior to the date of
the meeting of holders of shares at which such voting rights will be exercised,
a written direction in the form and manner prescribed by the Advisory Committee.
The Trustee (or such other person designated by the Advisory Committee) shall
tabulate the directions given on a strictly confidential basis. (If tabulated by
a person other than the Trustee, the results shall be transmitted confidentially
to the Trustee.) The Trustee shall follow the final results of the tabulation as
to the manner in which such voting rights shall be exercised. As to each matter
in which the holders of shares are entitled to vote, the Trustee shall cast
votes described below.

     (1) The Trustee shall cast a number of affirmative votes equal to the
     product of

          (a)  the total number of shares held in the Employer Stock Fund as of
               the applicable record date; and

          (b)  a fraction, the numerator of which is the aggregate value (as of
               the valuation date coincident with or immediately preceding the
               applicable record date) of the interests in the Employer Stock
               Fund of all persons directing that an affirmative vote be cast,
               and the denominator of which is the aggregate value (as of the
               valuation date coincident with or immediately preceding the
               applicable record date) of the interests in the Employer Stock
               Fund of all persons.

     (2) The Trustee shall cast a number of negative votes, which shall be
     determined in the same manner as the number of affirmative votes to be
     cast, as described in (1) above, except that the word "negative" shall be
     substituted for the word "affirmative" throughout (1)(b) above.

     (3) With respect to stock for which the Trustee is not obligated to cast
     either affirmative or negative votes, the Trustee shall cast votes in such
     manner as the Trustee, its sole discretion, shall decide.

The Advisory Committee shall furnish, or cause to be furnished, to each person
with an interest in the Employer Stock Fund, all annual reports, proxy materials
and other information known to have been furnished by the issuer of shares or by
any proxy solicitor, to the holder of shares.

[C] Tender Offers. Each person with an interest in the Employer Stock Fund shall
have the right to participate confidentially in the response to a tender offer,
or to any other offer, made to the holders of shares generally, to purchase,
exchange, redeem or otherwise transfer shares; provided that such person had an
interest in the Employer Stock Fund as of the valuation date coincident with or
immediately preceding the first day for delivery shares or otherwise responding
to such tender or other offer. Such participation shall be achieved by
completing and filing with the Trustee (or such other person who shall be
independent of the Employer as the Advisory Committee shall designate), at least
10 days prior to the last day for delivering shares or otherwise responding to
such tender or other offer, a written direction in the form and manner
prescribed by the Advisory Committee. The Trustee (or such person designated by
the Advisory Committee) shall tabulate the directions given on a strictly
confidential basis. (If tabulated by a person other than the Trustee, the final
results of the tabulation shall be transmitted in confidence to the Trustee).
The final results of the tabulation shall be followed by the Trustee as to the
number of shares to be delivered. On the last day for delivering shares or
otherwise responding to such a tender, or other offer, the Trustee shall deliver
or withhold shares as described below.

     (1) In response to such tender or offer, the Trustee shall deliver a number
     of shares equal to the product of:

          (a)  the total number of shares then held in the Employer Stock Fund;
               and

          (b)  a fraction, the numerator of which is the aggregate value (as of
               the valuation date coincident with or immediately preceding the
               first day for delivering shares or otherwise responding to such
               tender or other offer) of the interests in the Employer Stock
               Fund of all persons directing that shares be delivered in
               response to such tender or other offer, and the denominator of
               which is the aggregate value (as of the valuation date coincident
               with or immediately preceding the first day for delivering shares
               or otherwise responding to such tender or other offer) of the
               interests in the Employer Stock Fund of all persons.

                                       36

<PAGE>

     (2) In response to such tender or offer, the Trustee shall withhold a
     number of shares, which shall be determined in the same manner as the
     number of shares to deliver was determined in (1) above, except that in
     (1)(b) the word "withheld" shall be substituted for the word "deliver."

     (3) With respect to stock that the Trustee is not obligated to deliver or
     withhold, in response to such tender or offer, the Trustee shall deliver or
     withhold shares as the Trustee, its sole discretion, shall decide.

The Advisory Committee shall furnish, or cause to be furnished, to each
Participant whose Account is invested in whole or in part in the Employer Stock
Fund, all information concerning such tender or other offer furnished by the
issuer of shares, or information furnished by or on behalf of the person making
such tender or other offer.

                                       37

<PAGE>

                                   ARTICLE XI
              PROVISIONS RELATING TO INSURANCE & INSURANCE COMPANY

     11.01 INSURANCE BENEFIT. The Employer may elect to provide incidental life
insurance benefits for insurable Participants who consent to life insurance
benefits by signing the appropriate insurance company application form. The
Trustee will not purchase any incidental life insurance benefit for any
Participant prior to the Accounting Date as of which the Advisory Committee
first makes an Employer contribution allocation to the Participant's Account.

     The Employer will direct the Trustee as to the insurance company and
insurance agent through which the Trustee is to purchase the insurance
contracts, the amount of the coverage and the applicable dividend plan. Each
application for a policy, and the policies themselves, must designate the
Trustee as sole owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms and provisions
of this Agreement. The Trustee must be the named beneficiary for the Account of
the insured Participant. Proceeds of insurance contracts paid to the
Participant's Account under this Article XI are subject to the distribution
requirements of Article V and of Article VI. The Trustee will not retain any
such proceeds for the benefit of the Trust.

     The Trustee will charge the premiums on any incidental benefit insurance
contract covering the life of a Participant against the Account of that
Participant. The Trustee will hold all incidental benefit insurance contracts
issued under the Plan as assets of the Trust created under the Plan.

     Incidental insurance benefits. The aggregate of life insurance premiums
paid for the benefit of a Participant, at all times, may not exceed the value of
the Participant's Vested Account Balance nor the following percentages of the
aggregate of the Employer's contributions allocated to any Participant's
Account: (i) 49% in the case of the purchase of ordinary life insurance
contracts; or (ii) 25% in the case of the purchase of term life insurance
contracts. If the Trustee purchases a combination of ordinary life insurance
contract(s) and term life insurance contract(s), then the sum of one-half of the
premiums paid for the ordinary life insurance contract(s) and the premiums paid
for the term life insurance contract(s) may not exceed 25% of the Employer
contributions allocated to any Participant's Account.

     11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The Trustee will not
continue any life insurance protection for any Participant beyond the last of
his termination of employment, his attaining Normal Retirement Age, or
notification from the Advisory Committee of his termination of employment. If
the Trustee holds any incidental benefit insurance contract(s) on the life of a
Participant when he terminates his employment (other than by reason of death),
the Trustee must proceed as follows:

     (a) If the entire cash value of the contract(s) is vested in the
     terminating Participant, or if the contract(s) will have no cash value at
     the end of the policy year in which termination of employment occurs, the
     Trustee will transfer the contract(s) to the Participant endorsed so as to
     vest in the transferee all right, title and interest to the contract(s),
     free and clear of the Trust; subject however, to restrictions as to
     surrender or payment of benefits as the issuing insurance company may
     permit and as the Advisory Committee directs;

     (b) If only part of the cash value of the contract(s) is vested in the
     terminating Participant, the Trustee, to the extent the Participant's
     interest in the cash value of the contract(s) is not vested, may adjust the
     Participant's interest in the value of his Account attributable to Trust
     assets other than incidental benefit insurance contracts and proceed as in
     (a), or the Trustee must effect a loan from the issuing insurance company
     on the sole security of the contract(s) for an amount equal to the
     difference between the cash value of the contract(s) at the end of the
     policy year in which termination of employment occurs and the amount of the
     cash value that is vested in the terminating Participant, and the Trustee
     must transfer the contract(s) endorsed so as to vest in the transferee all
     right, title and interest to the contract(s), free and clear of the Trust;
     subject however, to the restrictions as to surrender or payment of benefits
     as the issuing insurance company may permit and the Advisory Committee
     directs;

     (c) If no part of the cash value of the contract(s) is vested in the
     terminating Participant, the Trustee must surrender the contract(s) for
     cash proceeds as may be available.

     In accordance with the written direction of the Advisory Committee, the
Trustee will make any transfer of contract(s) under this Section 11.02 on the
Participant's annuity starting date (or as soon as administratively practicable
after that date). The Trustee may not transfer any contract under this Section
11.02 which contains a method of payment not specifically authorized by Article
VI or which fails to comply with the joint and survivor annuity requirements, if
applicable, of Article VI. In this regard, the Trustee either must convert such
a contract to cash and distribute the cash instead of the contract, or before
making the transfer, require the issuing company to delete the unauthorized
method of payment option from the contract.

     11.03 DEFINITIONS. For purposes of this Article XI:

                                       38

<PAGE>

     (a) "Policy" means an ordinary life insurance contract or a term life
     insurance contract issued by an insurer on the life of a Participant.

     (b) "Issuing insurance company" is any life insurance company which has
     issued a policy upon application by the Trustee under the terms of this
     Agreement.

     (c) "Contract" or "Contracts" means a policy of insurance. In the event of
     any conflict between the provisions of this Plan and the terms of any
     contract or policy of insurance issued in accordance with this Article XI,
     the provisions of the Plan control.

     (d) "Insurable Participant" means a Participant to whom an insurance
     company, upon an application being submitted in accordance with the Plan,
     will issue insurance coverage, either as a standard risk or as a risk in an
     extra mortality classification.

     (e) "Term life insurance contract" includes, in addition to a traditional
     term life insurance contract, a universal life insurance contract and any
     other life insurance contract which is not an ordinary life insurance
     contract.

     11.04 DIVIDEND PLAN. The dividend plan is premium reduction unless the
Advisory Committee directs the Trustee to the contrary. The Trustee must use all
premiums for a contract to purchase insurance benefits or additional insurance
benefits for the Participant on whose life the insurance company has issued the
contract. Furthermore, the Trustee must arrange, where possible, for all
policies issued on the lives of Participants under the Plan to have the same
premium due date and all ordinary life insurance contracts to contain guaranteed
cash values with as uniform basic options as are possible to obtain. The term
"dividends" includes policy dividends, refunds of premiums and other credits.

     11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No insurance company,
solely in its capacity as an issuing insurance company, is a party to this
Agreement nor is the company responsible for its validity.

     11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S ACTIONS. No insurance
company, solely in its capacity as an issuing insurance company, need examine
the terms of this Agreement nor is responsible for any action taken by the
Trustee.

     11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE. For the purpose of
making application to an insurance company and in the exercise of any right or
option contained in any policy, the insurance company may rely upon the
signature of the Trustee and is saved harmless and completely discharged in
acting at the direction and authorization of the Trustee.

     11.08 ACQUITTANCE. An insurance company is discharged from all liability
for any amount paid to the Trustee or paid in accordance with the direction of
the Trustee, and is not obliged to see to the distribution or further
application of any moneys it so pays.

     11.09 DUTIES OF INSURANCE COMPANY. Each insurance company must keep such
records, make such identification of contracts, funds and accounts within funds,
and supply such information as may be necessary for the proper administration of
the Plan under which it is carrying insurance benefits.

                                       39

<PAGE>

                                   ARTICLE XII
                                  MISCELLANEOUS

     12.01 EVIDENCE. Anyone required to give evidence under the terms of the
Plan may do so by certificate, affidavit, document or other information which
the person to act in reliance may consider pertinent, reliable and genuine, and
to have been signed, made or presented by the proper party or parties. Both the
Advisory Committee and the Trustee are fully protected in acting and relying
upon any evidence described under the immediately preceding sentence.

     12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the Trustee nor the
Advisory Committee has any obligation nor responsibility with respect to any
action required by the Plan to be taken by the Employer, any Participant or
eligible Employee, or for the failure of any of the above persons to act or make
any payment or contributions, or to otherwise provide any benefit contemplated
under this Plan. Furthermore, the Plan does not require the Trustee or the
Advisory Committee to collect any contribution required under the Plan, or
determine the correctness of the amount of any Employer contribution. Neither
the Trustee nor the Advisory Committee need inquire into or be responsible for
any action or failure to act on the part of the others.

     Any action required of a corporate Employer must be by its Board of
Directors, or by any person or persons duly authorized by resolution of said
Board to take such action.

     12.03 FIDUCIARIES NOT INSURERS. The Trustee, the Advisory Committee, the
Plan Administrator and the Employer in no way guarantee the Trust Fund from loss
or depreciation. The Employer does not guarantee the payment of any money which
may be or becomes due to any person from the Trust Fund. The liability of the
Advisory Committee and the Trustee to make any payment from the Trust Fund at
any time and all times is limited to the then available assets of the Trust.

     12.04 WAIVER OF NOTICE. Any person entitle to notice under the Plan may
waive the notice.

     12.05 SUCCESSORS. The Plan is binding upon all persons entitled to benefits
under the Plan, their respective heirs and legal representatives, upon the
Employer, its successors and assigns who so agree in writing, and upon the
Trustee, the Advisory Committee, the Plan Administrator and their successors who
so agree in writing.

     12.06 WORD USAGE. Words used in the masculine also apply to the feminine
where applicable, and wherever the context of the Plan dictates, the plural
includes as the singular and the singular includes the plural.

     12.07 STATE LAW. Washington law will determine all questions arising with
respect to the provisions of this Agreement except to the extent Federal statute
supersedes Washington law.

     12.08 EMPLOYMENT NOT GUARANTEED. Nothing contained in this Plan, or with
respect to the establishment of the Trust, or any modification or amendment to
the Plan or Trust, or in the creation of any Account, or the payment of any
benefit, gives any Employee, Employee-Participant or any Beneficiary any right
to continue employment, any legal or equitable right against the Employer, or
Employee of the Employer, or against the Trustee, or its agents or employees, or
against the Plan Administrator, except as expressly provided by the Plan, the
Trust, ERISA or by a separate agreement.

                                       40

<PAGE>

                                  ARTICLE XIII
                    EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION

     13.01 EXCLUSIVE BENEFIT. Except as provided under Article III, the Employer
has no beneficial interest in any asset of the Trust and no part of any asset in
the Trust shall ever revert to or be repaid to an Employer, either directly or
indirectly; nor prior to the satisfaction of all liabilities with respect to the
Participants and their Beneficiaries under the Plan, may any part of the corpus
or income of the Trust Fund, or any asset of the Trust, be (at any time) used
for, or diverted to, purposes other than the exclusive benefit of the
Participants or their Beneficiaries and for defraying reasonable expenses of
administering the Plan.

     13.02 AMENDMENT BY EMPLOYER. The Employer has the right at any time and
from time to time:

     (a) To amend this Agreement in any manner it deems necessary or advisable
     in order to qualify (or maintain qualification of) this Plan and the Trust
     created under it under the appropriate provisions of Code (S)401(a); and

     (b) To amend this Agreement in any other manner.

     The Advisory Committee is authorized to make any amendments under Section
13.02(a). Moreover, the Advisory Committee is authorized to make any amendments
under Section 13.02(b) that are administrative in nature (e.g., amendments
relating to elections and procedures and the investment, valuation and
distribution of Plan assets).

     No amendment may authorize or permit any of the Trust Fund (other than the
part which is required to pay taxes and reasonable administration expenses) to
be used for or diverted to purposes other than for the exclusive benefit of the
Participants or their Beneficiaries or estates. No amendment may cause or permit
any portion of the Trust Fund to revert to or become a property of the Employer.
The Employer also may not make any amendment which affects the rights, duties or
responsibilities of the Trustee, the Plan Administrator or the Advisory
Committee without the written consent of the affected Trustee, the Plan
Administrator or the affected member of the Advisory Committee.

     Code (S)411(d)(6) protected benefits. An amendment (including the adoption
of this Plan as a restatement of an existing plan) may not decrease a
Participant's Account Balance, except to the extent permitted under Code
(S)412(c)(8), and except as provided in Treasury regulations may not reduce or
eliminate Protected Benefits determined immediately prior to the adoption date
(or, if later, the effective date) of the amendment. An amendment reduces or
eliminates Protected Benefits if the amendment has the effect of either (1)
eliminating or reducing an early retirement benefit or a retirement-type subsidy
(as defined in Treasury regulations), or (2) except as provided by Treasury
regulations, eliminating an optional form of benefit. The Advisory Committee
must disregard an amendment to the extent application of the amendment would
fail to satisfy this paragraph. If the Advisory Committee must disregard an
amendment because the amendment would violate clause (1) or clause (2), the
Advisory Committee must maintain a schedule of the early retirement option or
other optional forms of benefit the Plan must continue for the affected
Participants.

     The Employer (or Advisory Committee to the extent authorized in this
Section 13.02) must make all amendments in writing. Each amendment shall state
the date to which it is either retroactively or prospectively effective.

     13.03 DISCONTINUANCE. The Employer has the right, at any time, to suspend
or discontinue its contributions under the Plan and thereafter to continue to
maintain the Plan (subject to such suspension or discontinuance) until the
employer terminates the Plan. The Employer has the right, at any time, to
terminate, at any time, this Plan and the Trust created under this Agreement.
The Plan will terminate upon the first to occur of the following:

     (a) The date terminated by action of the Employer; or

     (b) The dissolution or merger of the Employer, unless a successor makes
     provision to continue the Plan, in which event the successor must
     substitute itself as the Employer under this Plan.

     13.04 FULL VESTING ON TERMINATION. Upon either full or partial termination
of the Plan, or, if applicable, upon complete discontinuance of profit sharing
plan contributions to the Plan, an affected Participant's right to his Account
Balance is 100% Vested, irrespective of the Vested percentage which otherwise
would apply under Article V.

     13.05 MERGER/DIRECT TRANSFER. The Trustee possesses the specific authority
to enter into merger agreements or direct transfer of assets agreements with the
trustees of other retirement plans described in Code (S)401(a), including an
elective transfer, and to accept the direct transfer of plan assets, or to
transfer plan assets, as a party to any such agreement. Except as provided in
Section 13.05(A), the Trustee may not consent to, or be a party to, any merger
or consolidation with another plan, or to a transfer of assets or liabilities to
another plan (or from the other plan to this Plan), unless immediately after the
merger, consolidation or transfer, the surviving Plan provides each Participant
a benefit equal to or greater than the benefit each Participant would have
received had the Plan terminated immediately before the merger or consolidation
or transfer. The Trustee will hold, administer and distribute the transferred
assets as a part of the Trust

                                       41

<PAGE>

Fund and the Trustee must maintain a separate Employer contribution Account for
the benefit of the Employee on whose behalf the Trustee accepted the transfer in
order to reflect the value of the transferred assets.

     The Trustee may accept a direct transfer of plan assets on behalf of an
Employee prior to the date the Employee satisfies the Plan's eligibility
conditions(s). If the Trustee accepts a direct transfer of plan assets, the
Advisory Committee and Trustee must treat the Employee as a as a limited
Participant as described in Section 4.04.

     Sections 13.05(A) and (B) are effective for elective transfers made on or
following September 6, 2000. Under an elective transfer which is made pursuant
to Section 13.05(A) or (B), the Protected Benefits in the transferring plan are
not required to be preserved under Section 13.02(B), except as provided in
Section 13.05(B).

(A) Distributable Event Elective Transfer. The Trustee may consent to, or be a
party to, a merger, consolidation or transfer of assets with another qualified
plan in accordance with this Section 13.05(A).

     A transfer between qualified plans is a distributable event elective
transfer if: (1) the Participant has a right to immediate distribution from the
transferor plan; (2) the transfer is voluntary, under a fully informed election
by the Participant; (3) the Participant has an alternative that retains his/her
Protected Benefits (including an option to leave his/her benefit in the
transferor plan, if that plan is not terminating); (4) the transferor plan
satisfies applicable consent and joint and survivor annuity requirements of the
Code; (5) the amount transferred, together with the amount of any
contemporaneous direct rollover of the Participant's remaining Vested Account
Balance, constitutes the Participant's entire Vested Account Balance; (6) the
Participant has a 100% Vested interest in the transferred benefit in the
transferee plan; and (7) if the transfer is from this Plan to a defined benefit
plan, the transferee plan provides a benefit for the affected Participant equal
to the benefit (expressed as an annuity payable at normal retirement age)
derived solely with respect to the transferred assets.

     An elective transfer under this Section 13.05(A) may occur between
qualified plans of any type.

     Commencing January 1, 2002, the Trustee may not undertake an elective
transfer of a Participant's Account under this Section 13.05(A) if the
Participant is eligible to receive an immediate distribution of his/her entire
Vested Account Balance which would consist entirely of an eligible rollover
distribution as described in Section 6.10(D).

(B) Transaction/Employment Change Elective Transfer. The Trustee may consent to,
or be a party to, a merger, consolidation or transfer of assets with another
qualified defined contribution plan in accordance with this Section 13.05(B).

     A transfer is a transaction or employment change transfer irrespective of
whether the Participant has a right to an immediate distribution from the
transferor plan provided: (1) the transfer satisfies requirements (2) and (3) of
Section 13.05(A); (2) the transfer only may occur as between plans described in
applicable Treasury regulations; (3) the transfer must occur in connection with
a merger, asset or stock acquisition, or change in employment resulting in the
participant's loss of right to additional ,allocations in the transferor plan or
in such other circumstances as described in applicable Treasury regulations; (4)
the transfer must consist of the Participant's entire Vested and non-Vested
Account Balance within the transferor plan: and (5) the transferee plan must
protect the QJSA and QPSA benefits (if any) in the transferor plan.

(C) Other Transfers. Any transfer which is not an elective transfer under
Sections 13.05(A) or 13.05(B) and which includes Protected Benefits is subject
to Section 13.02(B). The trustee of the transferee plan in receipt of assets
which are Protected Benefits must preserve the Protected Benefits in accordance
with applicable Treasury regulations. If the transferor plan contains a 401(k)
arrangement with deferral contributions accounts, qualified nonelective
contributions accounts, qualified matching contributions accounts or safe harbor
contributions accounts, such balances remain subject in the transferee plan to
the distribution restrictions described in Section 14.02(m). Any transfer under
this Section 13.05(C) from a defined benefit plan to this Plan must be in the
form of the transfer of a paid up individual annuity contract which guarantees
the payment of benefits in accordance with the transferor plan.

     13.06 POST TERMINATION PROCEDURE AND DISTRIBUTION. Upon termination of the
Plan, the distribution provisions of Article VI shall remain operative except,
in lieu of the timing and form of distribution options available under Article
VI, the Advisory Committee will direct the Trustee to distribute each
Participant's Vested Account Balance, in lump sum, as soon as administratively
practicable after the termination of the Plan, irrespective of the present value
of the Participant's Vested Account Balance and whether the Participant consents
to that distribution. This paragraph is null and void if, as of the period
between the Plan termination date and the final distribution of assets, the
Employer maintains any other defined contribution plan (other than an ESOP).

     If the first paragraph of this Section 13.06 is null and void, the Advisory
Committee will proceed with distribution of the terminated Plan in accordance
with the distribution provisions of Article VI, with the following exceptions:

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<PAGE>

     (1) if the present value of the Participant's Vested Account Balance does
     not exceed $5,000, the Advisory Committee will direct the Trustee to
     distribute the Participant's Vested Account Balance to him in lump sum as
     soon as administratively practicable after the Plan terminates; and

     (2) if the present value of the Participant's Vested Account Balance
     exceeds $5,000, the Participant or the Beneficiary, in addition to the
     distribution events permitted under Article VI, may elect to have the
     Trustee commence distribution of his Vested Account Balance as soon as
     administratively practicable after the Plan terminates. If the Participant
     fails to make an election under this paragraph (2), the Advisory Committee,
     to liquidate the Trust, may transfer the Participant's Vested Account
     Balance to the other defined contribution plan maintained by the Employer,
     or purchase a deferred annuity contract for each such Participant which
     protects the Participant's distribution rights under the Plan.

     Continuing Trust Provisions. The Trust will continue until the Trustee in
accordance with the direction of the Advisory Committee has distributed all of
the benefits under the Plan. On each valuation date, the Advisory Committee will
credit any part of a Participant's Account Balance retained in the Trust with
its proportionate share of the Trust's net income, gains and losses. Upon
termination of the Plan, the amount, if any, in a suspense account under Article
III will revert to the Employer, subject to the conditions of the Treasury
regulations permitting such a reversion. A resolution or amendment to
discontinue all future benefit accrual but otherwise to continue maintenance of
this Plan, is not a termination for purposes of this Section 13.06.

     Distribution restrictions under Code (S)410(k). A Participant's Deferral
Contributions Account, Qualified Nonelective Contributions Account, Qualified
Matching Contributions Account, or transferred assets described in Section 13.05
to which the distribution restrictions of Sections 14.02(m) and 6.03(B) apply,
are distributable on account of Plan termination, as described in this Section
13.06, only if: (a) the Participant otherwise is entitled to a distribution of
that portion of his Vested Account Balance; or (b) the Employer does not
maintain a successor plan and the Advisory Committee distributes the
Participant's entire Vested Account Balance in a lump sum. A successor plan is a
defined contribution plan (other than an ESOP) maintained by the Employer (or by
a Related Employer) at the time of the termination of the Plan or within the
period ending twelve months after the final distribution of assets. However, a
plan is not a successor plan if less than 2% of the Employees eligible. to
participate in the terminating Plan are eligible to participate (beginning 12
months prior to and ending 12 months after the Plan's termination date) in the
potential successor plan.

     "Lost Participants." If the Advisory Committee is unable to locate any
Participant or Beneficiary whose Account Balance becomes distributable upon Plan
termination, the Advisory Committee will apply Section 9.14 except Section
9.14(B) does not apply.

     13.07 TRANSFER OF ASSETS FROM THE TRUSTEE OF THE FLOW INTERNATIONAL
CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN. If the Trustee accepts a transfer of
assets from the trustee of the Flow International Plan Employee Stock Ownership
Plan after March 31, 1998 (whether or not in an elective transfer within the
meaning of Section 13.05), then, in addition to the provisions of Section 13.05,
the following provisions shall also apply:

     (a) The assets in the Account the Trustee maintains for the transferred
     assets shall be subject to the Participant's (or Participant's
     beneficiary's) direction of investment in accordance with Section 8.10.

     (b) The assets in the Account the Trustee maintains for the transferred
     assets shall be distributed only in a single lump sum (regardless whether
     the assets include stock in Flow International Corporation or cash).

     (c) If at the time of distribution the assets in the Account the Trustee
     maintains for the transferred assets include stock in Flow International
     Corporation, the Participant (or Participant's beneficiary) may elect to
     receive the entire distribution in cash.

                                       43

<PAGE>

                                   ARTICLE XIV
              PROVISIONS RELATING TO THE CODE (S)401(k) ARRANGEMENT

     14.01 401(k) ARRANGEMENT. The Employer makes the deferral contribution
described in Section 3.01(a) pursuant to a 401(k) arrangement. An Employee who
is eligible to participate in the 401(k) arrangement may file a salary reduction
agreement with the Advisory Committee. The salary reduction agreement may not be
effective earlier than the following date which occurs last: (i) the Employee's
Plan Entry Date (or, in the case of a reemployed Employee, his reparticipation
date under Article II); or (ii) the execution date of the Employee's salary
reduction agreement. A salary reduction agreement must specify the percentage of
Compensation (as defined in Section 1.10) the Employee wishes to defer. The
salary reduction agreement will apply only to Compensation which becomes
currently available to the Employee after the effective date of the salary
reduction agreement. The Employer will apply a reduction election to all
Compensation (and to increases in such Compensation) unless the Employee
specifies in his salary reduction agreement to limit the election to certain
Compensation. The salary reduction agreement form approved by the Advisory
Committee from time to time will specify the minimum and maximum reduction
percentages and the options available for the Employee to so limit his election.

     An Employee's salary reduction contributions for the Plan Year, subject to
the elective deferral limitation of Section 14.03, may not exceed 15% of his
Compensation (40% of Compensation for Nonhighly Compensated Employees) for the
entire Plan Year. An Employee may modify his salary reduction agreement, either
to reduce or to increase the amount of deferral contributions, as of any July 1
or January 1 or any other date established by the Advisory Committee. The
Employee will make this modification by filing a new salary reduction agreement
with the Advisory Committee. An Employee may revoke a salary reduction agreement
at any time, with such revocation to be effective as soon as practicable
thereafter. An Employee who revokes his salary reduction agreement may file a
new salary reduction agreement as of any July 1 or January 1 or any other date
established by the Advisory Committee.

     The Advisory Committee may amend or revoke its salary reduction agreement
with any Participant if it determines that such revocation is necessary, helpful
or advisable to satisfy the special rules under Code (S)(S)401(k), 401(m) or
402(g) (see Sections 14.03, 14.04, 14.05 and 14.06), or the maximum limitations
of Code (S)415 (see Sections 3.07 through 3.12). Moreover, prior to any July 1
or January 1 the Advisory Committee may establish special deferral limits for
highly compensated employees (as defined in Section 14.02).

     14.02 DEFINITIONS.

     (a) "Highly Compensated Employee" means an Eligible Employee who satisfies
     the definition in Section 1.07 of the Plan.

     (b) "Nonhighly Compensated Employee" means an Eligible Employee who is not
     a Highly Compensated Employee.

     (c) "Eligible Employee" means, for purposes of the ADP test described in
     Section 14.04, an Employee who is eligible to enter into a salary reduction
     agreement for all or any portion of the plan year, irrespective of whether
     the Employee actually enters into such an agreement. For purposes of the
     ACP test described in Section 14.05, an "Eligible Employee" means a
     Participant who is eligible to receive an allocation of Employer matching
     contributions (or would be eligible if he made the type of contributions
     necessary to receive an allocation of matching contributions) and a
     Participant who is eligible to make employee contributions, irrespective of
     whether he actually makes employee contributions. An Employee continues to
     be an Eligible Employee during a period the Plan suspends the Employee's
     right to make elective deferrals or nondeductible contributions following a
     hardship distribution.

     (d) "Highly Compensated Group" means the group of Eligible Employees who
     are Highly Compensated Employees for the Plan Year.

     (e) "Nonhighly Compensated Group" means the group of Eligible Employees who
     are Nonhighly Compensated Employees for the Plan Year.

     (f) "Compensation" means, except as specifically provided under this
     Article XIV, Compensation as defined for nondiscrimination purposes in Code
     (S)414(s), uniformly applied to all Eligible Employees for the Plan Year.
     The Advisory Committee may use the general definition of Compensation in
     Section 1.10(A) or may modify that definition in any manner which satisfies
     Code (S)414(s). The Advisory Committee may annually elect operationally to
     include or exclude Elective Contributions, provided the election is
     consistent and uniform with respect to all Employees and plans of the
     Employer for any particular Plan Year. To compute an Employee's ADP or ACP,
     the Advisory Committee may limit Compensation taken into account to
     Compensation received only for the portion of

                                       44

<PAGE>

     the Plan Year in which the Employee was an Eligible Employee and only for
     the portion of the Plan Year in which the Code (S)401(k) arrangement was in
     effect.

     (g) "Deferral contributions" means the sum of the deferral contributions
     the Employer contributes to the Trust on behalf of an Eligible Employee,
     pursuant to Section 3.01.

     (h) "Elective deferrals" are the deferral contributions the Employer
     contributes to the Trust at the election of an Eligible Employee. If the
     Code (S)401(k) arrangement includes a cash or deferred feature, any portion
     of a cash or deferred contribution contributed to the Trust because of the
     Employee's failure to make a cash election is an elective deferral, but any
     portion of a cash or deferred contribution over which the Employee does not
     have a cash election is not an elective deferral. Elective deferrals do not
     include amounts which have become currently available to the Employee prior
     to the election nor amounts designated as nondeductible employee
     contributions at the time of deferral or contribution.

     (i) "Matching contributions" are contributions made by the Employer on
     account of elective deferrals under a Code (S)401(k) arrangement or on
     account of employee contributions. Matching contributions also include
     Participant forfeitures allocated on account of such elective deferrals or
     employee contributions.

     (j) "Nonelective contributions" are contributions made by the Employer
     which are not subject to a deferral election by an Employee and which are
     not matching contributions.

     (k) "Qualified matching contributions" are matching contributions which are
     100% Vested at all times and which are subject to the distribution
     restrictions described in paragraph (m). Matching contributions are not
     100% Vested at all times if the Employee has a 100% Vested interest because
     of his Years of Service taken into account under a vesting schedule.

     (l) "Qualified nonelective contributions" are nonelective contributions
     which are 100% Vested at all times and which are subject to the
     distribution restrictions described in paragraph (m). Nonelective
     contributions are not 100% Vested at all times if the Employee has a 100%
     Vested interest because of his Years of Service taken into account under a
     vesting schedule. Any nonelective contributions allocated to a
     Participant's Qualified Nonelective Contributions Account under the Plan
     automatically satisfy the definition of qualified nonelective
     contributions.

     (m) "Distribution restrictions" means the Employee may not receive a
     distribution of the specified contributions (nor earnings on those
     contributions) except in the event of (1) the Participant's death,
     disability, Separation from Service (which for purposes of this Section
     14.02(m) means as the Advisory Committee determines under applicable
     Internal Revenue Service guidance, including the "same desk" rule and
     Revenue Ruling 2000-27 with respect to certain asset sale transactions),
     attainment of age 59 1/2, (2) financial hardship satisfying the
     requirements of Code (s)401(k) and the applicable Treasury regulations, (3)
     plan termination, without establishment of a successor defined contribution
     plan (other than an ESOP), (4) a sale by a corporate Employer of
     substantially all of the assets (within the meaning of Code (S)409(d)(2))
     used in a trade or business, but only to an employee who continues
     employment with the corporation acquiring those assets, or (5) a sale by a
     corporate Employer of its interest in a subsidiary (within the meaning of
     Code (S)409(d)(3)), but only to an employee who continues employment with
     the subsidiary. For Plan Years beginning after December 31, 1988, a
     distribution on account of financial hardship, as described in clause (2),
     may not include earnings on elective deferrals credited as of a date later
     than December 31, 1988, and may not include qualified matching
     contributions and qualified nonelective contributions, nor any earnings on
     such contributions, credited after December 31, 1988. A distribution
     described in clauses (3), (4) or (5), if made after March 31, 1988, must be
     a lump sum distribution, as required under Code (S)401(k)(10).

     (n) "Employee contributions" are contributions made by a Participant on an
     after-tax basis, whether voluntary or mandatory, and designated, at the
     time of contribution, as an employee (or nondeductible) contribution.
     Elective deferrals and deferral contributions are not employee
     contributions. Participant nondeductible contributions, made pursuant to
     Section 4.01 of the Plan, are employee contributions.

     (o) "Current year testing" means for purposes of the ADP test described in
     Section 14.04 and the ACP test described in Section 14.05, the use of data
     from the testing year in determining the ADP or ADP for the Nonhighly
     Compensated Group.

     (p) "Prior year testing" means for purposes of the ADP test described in
     Section 14.04 and the ACP test described in Section 14.05, the use of data
     from the Plan Year immediately prior to the testing year in determining the
     ADP or ACP for the Nonhighly Compensated Group.

     (q) "Salary reduction agreement" is a written election by a Participant to
     make salary reduction contributions as described in Section 14.01.

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<PAGE>

     (r) "Salary reduction contributions" mean Employer contributions elected by
     a Participant to be made from the Participant's Compensation pursuant to a
     salary reduction agreement and which the Advisory Committee must allocate
     to the electing Participant's Account.

     (s) "Testing year" means for purposes of the ADP test described in Section
     14.04 and the ACP test described in Section 14.05, the Plan Year for which
     the ADP or ACP test is being performed.

     14.03 ANNUAL ELECTIVE DEFERRAL LIMITATION.

     (A) Annual Elective Deferral Limitation. An Employee's elective deferrals
for a calendar year beginning after December 31, 1986, may not exceed the Code
(S)402(g) limitation (the "402(g) limitation"). The 402(g) limitation is the
greater of $7,000 or the adjusted amount determined by the Secretary of the
Treasury. If the Employer determines the Employee's elective deferrals to the
Plan for a calendar year would exceed the 402(g) limitation for the calendar
year, the Employer will suspend the Employee's salary reduction agreement, if
any, until the following January 1 and pay in cash to the Employee the portion
of a deferral election which would result in the Employee's elective deferrals
for the calendar year exceeding the 402(g) limitation. If the Advisory Committee
determines an Employee's elective deferrals already contributed to the Plan for
a calendar year exceed the 402(g) limitation, the Advisory Committee will
distribute the amount in excess of the 402(g) limitation (the "excess
deferral"), as adjusted for allocable income under Section 14.03(C), no later
than April 15 of the following calendar year. If the Advisory Committee
distributes the excess deferral by the appropriate April 15, the excess deferral
is not an Annual Addition under Article III, and the Advisory Committee may make
the distribution irrespective of any other provision under this Plan or under
the Code. The Advisory Committee will reduce the amount of excess deferrals for
a calendar year distributable to the Employee by the amount of excess
contributions (as determined in Section 14.04), if any, previously distributed
to the Employee for the Plan Year beginning in that calendar year. Elective
deferrals distributed to an Employee as excess Annual Additions in accordance
with Article III are not taken into account under the Employee's 402(g)
limitation.

     (B) More than One Plan. If an Employee participates in another plan subject
to the 402(g) limitation under which he makes elective deferrals pursuant to a
Code (S)401(k) arrangement, elective deferrals under a SARSEP, elective
contributions under a SIMPLE IRA, or salary reduction contributions to a
tax-sheltered annuity, irrespective of whether the Employer maintains the other
plan, he may provide the Advisory Committee a written claim for excess deferrals
made to the Plan for a calendar year. The Employee must submit the claim no
later than the March 1 following the close of the particular calendar year and
the claim must specify the amount of the Employee's elective deferrals under
this Plan which are excess deferrals. If the Advisory Committee receives a
timely claim, it will distribute the excess deferral (as adjusted for allocable
income) the Employee has assigned to this Plan, in accordance with the
distribution procedure described in Section 14.03(A).

     (C) Allocable income. For purposes of making a distribution of excess
deferrals pursuant to this Section 14.03, allocable income means net income or
net loss allocable to the excess deferrals for the calendar year (but not beyond
the calendar year) in which the Employee made the excess deferral, determined in
a manner which is uniform, nondiscriminatory and reasonably reflective of the
manner used by the Advisory Committee to allocate income to Participants'
Accounts.

     14.04 ACTUAL DEFERRAL PERCENTAGE (ADP) TEST. For each Plan Year, the
Advisory Committee must determine whether the Plan's (S)401(k)arrangement
satisfies one of the following ADP tests:

     (i) The ADP for the Highly Compensated Group does not exceed 1.25 times the
     ADP of the Nonhighly Compensated Group; or

     (ii) The ADP for the Highly Compensated Group does not exceed the ADP for
     the Nonhighly Compensated Group by more than two percentage points (or the
     lesser percentage permitted by the multiple use limitation in Section
     14.06) and the ADP for the Highly Compensated Group is not more than twice
     the ADP for the Nonhighly Compensated Group.

     (A) Calculation of ADP. The average ADP for a group is the average of the
separate deferral percentages calculated for each Eligible Employee who is a
member of that group. An Eligible Employee's deferral percentage for a Plan Year
is the ratio of the Eligible Employee's deferral contributions for the Plan Year
to the Employee's Compensation for the Plan Year.. In determining the ADP, the
Advisory Committee must include any Highly Compensated Employee's excess
deferrals, as described in Section 14.03(A), to this Plan or to any other Plan
of the Employer and the Advisory Committee will disregard any Employee's excess
deferrals. The Advisory Committee operationally may include in the ADP test,
qualified nonelective contributions and qualified matching contributions the
Advisory Committee does not use in the ACP test. The Advisory Committee, under
prior year testing, may include qualified nonelective contributions or qualified
matching contributions in determining the Nonhighly Compensated Employee ADP
only if the Employer makes such contribution to the Plan by the end of the
testing year and the Advisory Committee allocates the contribution to the prior

                                       46

<PAGE>

Plan Year. In determining whether the Plan's 401(k) arrangement satisfies either
ADP test, the Advisory Committee will use current year testing for Plan Years
ending before January 1, 2001, and prior year testing for Plan Years beginning
after December 31, 2000.

     (B) Special aggregation rule for Highly Compensated Employees. To determine
the deferral percentage of any Highly Compensated Employee, the Advisory
Committee must take into account any elective deferrals made by the Highly
Compensated Employee under any other Code (S)401(k) arrangement maintained by
the Employer, unless the elective deferrals are to an ESOP. If the plans
containing the Code (S)401(k) arrangements have different plan years, the
Advisory Committee will determine the combined deferral contributions on the
basis of the plan years ending in the same calendar year.

     (C) Aggregation of certain Code (S)401(k) arrangements. If the Employer
treats two plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the Code (S)401(k) arrangements under such plans to
determine whether either plan satisfies the ADP test. This aggregation rule
applies to the ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or a Nonhighly
Compensated Employee. An Employer may aggregate 401(k) arrangements under this
Section 14.08(C) only if the plans have the same plan years and use the same
testing method. An Employer may not aggregate an ESOP (or the ESOP portion of a
plan) with a non-ESOP plan (or non-ESOP portion of a plan).

     (D) Characterization of excess contributions. If, pursuant to this Section
14.04, the Advisory Committee has elected to include qualified matching
contributions in the ADP test, the Advisory Committee will treat excess
contributions as attributable proportionately to deferral contributions and to
qualified matching contributions allocated on the basis of those deferral
contributions. The Advisory Committee will reduce the amount of excess
contributions for a Plan Year distributable to a Highly Compensated Employee by
the amount of excess deferrals (as defined in Section 14.03), if any, previously
distributed to that Employee for the Employee's taxable year ending in that Plan
Year.

     (E) Distribution of excess contributions. If the Advisory Committee
determines the Plan fails to satisfy the ADP test for a Plan Year, the Trustee,
as directed by the Advisory Committee, must distribute the excess contributions,
as adjusted for allocable income under Section 14.04(F), during the next Plan
Year. However, the Employer may incur an excise tax equal to 10% of the amount
of excess contributions for a Plan Year not distributed to the appropriate
Highly Compensated Employees during the first 2 1/2 months of that next Plan
Year. The excess contributions are the amount of deferral contributions made by
the Highly Compensated Employees which causes the Plan to fail to satisfy the
ADP test. The Advisory Committee will determine the total amount of excess
contributions by starting with the Highly Compensated Employee(s) who has the
greatest deferral percentage, reducing his deferral percentage (but not below
the next highest deferral percentage), then, if necessary, reducing the deferral
percentage of the Highly Compensated Employee(s) at the next highest deferral
percentage level, including the deferral percentage of the Highly Compensated
Employee(s) whose the deferral percentage the Advisory Committee already has
reduced (but not below the next highest deferral percentage), and continuing in
this manner until the ADP for the Highly Compensated Group satisfies the ADP
test.

     After the Advisory Committee has determined the excess contribution amount,
the Trustee, as directed by the Advisory Committee, then will distribute to each
Highly Compensated Employee his respective share of the excess contributions.
The Advisory Committee will determine each Highly Compensated Employee's share
of excess contributions by starting with the Highly Compensated Employee(s) who
has the highest dollar amount of elective deferrals, reducing his elective
contributions (but not below the next highest dollar amount of elective
deferrals), then, if necessary, reducing the elective deferrals of the Highly
Compensated Employee(s) at the next highest dollar amount of elective deferrals
of the Highly Compensated Employee(s) whose elective contributions the Advisory
Committee already has reduced (but not below the next highest dollar amount of
elective contributions), and continuing in this manner until the Trustee has
distributed all excess contributions.

     [F] Allocable income. To determine the amount of the corrective
distribution required under this Section 14.04, the Advisory Committee must
calculate the allocable income for the Plan Year (but not beyond the Plan Year)
in which the excess contributions arose. "Allocable income" means net income or
net loss. To calculate allocable income for the Plan Year, the Advisory
Committee will use a uniform and nondiscriminatory method which reasonably
reflects the manner used by the Plan to allocate income to Participants'
Accounts.

     14.05 ACTUAL CONTRIBUTION PERCENTAGE (ACP) TEST. The Advisory Committee
must determine whether the annual Employer matching contributions (other than
qualified matching contributions used in the ADP test under Section 14.04), if
any, and the Employee contributions, if any, satisfy one of the following
average contribution percentage ("ACP") tests:

     (i) The ACP for the Highly Compensated Group does not exceed 1.25 times the
     ACP of the Nonhighly Compensated Group; or

                                       47

<PAGE>

     (ii) The ACP for the Highly Compensated Group does not exceed the ACP for
     the Nonhighly Compensated Group by more than two percentage points (or the
     lesser percentage permitted by the multiple use limitation in Section
     14.06) and the ACP for the Highly Compensated Group is not more than twice
     the ACP for the Nonhighly Compensated Group.

     (A) Calculation of ACP. The ACP for a group is the average of the separate
contribution percentages calculated for each Eligible Employee who is a member
of that group. An Eligible Employee's contribution percentage for a Plan Year is
the ratio of the Eligible Employee's aggregate contributions for the Plan Year
to the Employee's Compensation for the Plan Year. "Aggregate contributions" are
Employer matching contributions (other than qualified matching contributions
used in the ADP test under Section 14.04) and Employee contributions (as defined
in Section 14.02).. The Advisory Committee operationally may include in the ACP
test, qualified nonelective contributions and elective deferrals not used in the
ADP test. The Advisory Committee, under prior year testing, may include
qualified nonelective contributions or qualified matching contributions in
determining the Nonhighly Compensated Employee ACP only if the Employer makes
such contribution to the Plan by the end of the testing year and the Advisory
Committee allocates the contribution to the prior Plan Year. In determining
whether the Plan satisfies either ACP test, the Plan Administrator will use
current year testing for Plan Years ending before January 1, 2001, and prior
year testing for Plan Years beginning after December 31, 2000..

     (B) Special aggregation rule for Highly Compensated Employees. To determine
the contribution percentage of any Highly Compensated Employee, the aggregate
contributions taken into account must include any matching contributions (other
than qualified matching contributions used in the ADP test) and any Employee
contributions made on his behalf to any other plan maintained by the Employer,
unless the other plan is an ESOP. If the plans have different plan years, the
Advisory Committee will determine the combined aggregate contributions on the
basis of the plan years ending in the same calendar year.

     (C) Aggregation of certain 401(m) arrangements. If the Employer treats two
or more plans as a unit for coverage or nondiscrimination purposes, the Employer
must combine the 401(m) arrangements under such plans to determine whether the
plans satisfy the ACP test. This aggregation rule applies to the ACP
determination for all Eligible Employees, irrespective of whether an Eligible
Employee is a Highly Compensated Employee or a Nonhighly Compensated Employee.
An Employer may aggregate 401(m) arrangements under this Section 14.05(C) if the
plans have the same plan year and use the same testing method. The Advisory
Committee may not aggregate an ESOP (or the ESOP portion of a plan) with a
non-ESOP plan (or non-ESOP portion of a plan).

     Distribution of excess aggregate contributions. The Advisory Committee will
determine excess aggregate contributions after determining excess deferrals
under Section 14.03 and excess contributions under Section 14.04. If the
Advisory Committee determines the Plan fails to satisfy the ACP test for a Plan
Year, the Trustee, as directed by the Advisory Committee, must distribute the
vested excess aggregate contributions, as adjusted for allocable income, during
the next Plan Year. However, the Employer may incur an excise tax with respect
to the amount of excess aggregate contributions for a Plan Year not distributed
to the appropriate Highly Compensated Employees during the first 2 1/2 months of
that next Plan Year. The excess aggregate contributions are the amount of the
aggregate contributions allocated on behalf of the Highly Compensated Employees
which causes the Plan to fail to satisfy the ACP test. The Advisory Committee
will determine total amount of excess aggregate contributions by starting with
the Highly Compensated Employee(s) who has the greatest contribution percentage,
reducing his contribution percentage (but not below the next highest
contribution percentage), then, if necessary, reducing the contribution
percentage of the Highly Compensated Employee(s) at the next highest
contribution percentage level, including the contribution percentage of the
Highly Compensated Employee(s) whose contribution percentage the Advisory
Committee already has reduced (but not below the next highest contribution
percentages), and continuing in this manner until the ACP for the Highly
Compensated Group satisfies the ACP test.

     After the Advisory Committee has determined the excess aggregate
contribution amount, the Trustee, as directed by the Advisory Committee, then
will distribute to each Highly Compensated Employee his respective share(s) of
the excess aggregate contributions. The Advisory Committee will determine each
Highly Compensated Employee's shares of excess aggregate contributions by
starting with the Highly Compensated Employee(s) who has the highest dollar
amount of aggregate contributions, reducing the amount of his aggregate
contributions (but not below the next highest dollar amount of aggregate
contributions), then, if necessary, reducing the amount of aggregate
contributions of the Highly Compensated Employee(s) at the next highest level of
aggregate contributions, including the aggregate contributions of the Highly
Compensated Employee(s) whose aggregate contributions the Advisory Committee
already has reduced (but not below the next highest level of aggregate
contributions), and continuing in this manner until the Trustee has distributed
all excess aggregate contributions.

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<PAGE>

     (E) Allocable income. To determine the amount of the corrective
distribution required under this Section 14.05, the Advisory Committee must
calculate the allocable income for the Plan Year (but not beyond the Plan Year)
in which the excess aggregate contributions arose. "Allocable income" means net
income or net loss. The Advisory Committee will determine allocable income in
the same manner as described in Section 14.04(F) for excess contributions.

     (F) Characterization of excess aggregate contributions. The Advisory
Committee will treat a Highly Compensated Employee's allocable share of excess
aggregate contributions in the following priority: (1) first as attributable to
his Employee contributions, if any; (2) then as matching contributions allocable
with respect to excess contributions determined under the ADP test described in
Section 14.04; (3) then on a pro rata basis to matching contributions and to the
deferral contributions relating to those matching contributions which the
Advisory Committee has included in the ACP test; and (4) last to qualified
nonelective contributions used in the ACP test. To the extent the Highly
Compensated Employee's excess aggregate contributions are attributable to
matching contributions, and he is not 100% vested in his Account Balance
attributable to matching contributions, the Advisory Committee will distribute
only the vested portion and forfeit the nonvested portion. The vested portion of
the Highly Compensated Employee's excess aggregate contributions attributable to
Employer matching contributions is the total amount of such excess aggregate
contributions (as adjusted for allocable income) multiplied by his vested
percentage (determined as of the last day of the Plan Year for which the
Employer made the matching contribution). The Plan will allocate forfeited
excess aggregate contributions to reduce Employer matching contributions for the
Plan Year in which the forfeiture occurs.

     14.06 MULTIPLE USE LIMITATION. If at least one Highly Compensated Employee
is includible in the ADP test under Section 14.04 and in the ACP test under
Section 14.05, the sum of the Highly Compensated Group's ADP and ACP may not
exceed the multiple use limitation.

     The multiple use limitation is the sum of (i) and (ii):

     (i) 125% of the greater of: (a) the ADP of the Nonhighly Compensated Group
     for the current Plan Year; or (b) the ACP of the Nonhighly Compensated
     Group for the Plan Year beginning with or within current the Plan Year of
     the Code (S)401(k) arrangement.

     (ii) 2% plus the lesser of (i)(a) or (i)(b), but no more than twice the
     lesser of (i)(a) or (i)(b).

     The Advisory Committee, in lieu of determining the multiple use limitation
as the sum of (i) and (ii), may elect to determine the multiple use limitation
as the sum of (iii) and (iv):

     (iii) 125% of the lesser of: (a) the ADP of the Nonhighly Compensated Group
     for the current Plan Year; or (b) the ACP of the Nonhighly Compensated
     Group for the Plan Year beginning with or within the current Plan Year of
     the Code (S)401(k) arrangement.

     (iv) 2% plus the greater of (iii)(a) or (iii)(b), but no more than twice
     the greater of (iii)(a) or (iii)(b).

This Section 14.06 does not apply unless, prior to application of the multiple
use limitation, the ADP and the ACP of the Highly Compensated Group each exceeds
125% of the respective percentages of the Nonhighly Compensated Group.

     The Advisory Committee will determine whether the Plan satisfies the
multiple use limitation after applying the ADP test under Section 14.04 and the
ACP test under Section 14.05 and using the deemed maximum corrected ADP and ACP
percentages in the event the Plan failed either or both tests. If, after
applying this Section 14.06, the Advisory Committee determines the Plan has
failed to satisfy the multiple use limitation, the Advisory Committee will
correct the failure by treating the excess amount excess contributions under
Section 14.04 or as excess aggregate contributions under Section 14.05, as the
Plan Administrator determines in its sole discretion.

                                       49

<PAGE>

                                   APPENDIX A
                            ACCOUNTS TRANSFERRED FROM
                     SPIDER STAGING CORPORATION 401(k) PLAN
                                       AND
                 CERTAIN EMPLOYEES OF SPIDER STAGING CORPORATION

     1.01 DEFINITIONS. "1992 Spider Staging Employee" means an employee of
Spider Staging Corporation who was employed by Spider Staging Corporation on
December 31, 1992. "Spider Staging Plan" means the Spider Staging Corporation
401(k) Savings Plan.

     1.02 CONTINUING PARTICIPANTS. Notwithstanding Sections 2.01 and 2.02 of the
Plan, a 1992 Spider Staging Employee who was a participant in the Spider Staging
Plan on December 31, 1992, and is employed by Spider Staging Corporation on
January 1, 1993, shall be a Participant in the Plan on January 1, 1993.

     1.03 ELIGIBILITY COMPUTATION PERIOD. If a 1992 Spider Staging Employee has
not satisfied the service requirement for eligibility to participate under the
Spider Staging Plan as of December 31, 1992, he or she may satisfy the service
requirement as provided in Section 2.02 of the Plan, or as modified in the
following sentence, whichever permits earlier participation in the Plan. As
modified for purposes of this Section 1.03, the third and fourth sentences of
Section 2.02 read: "If the Employee does not complete 1000 Hours of Service
during the 12 month period commencing with the Employment Commencement Date, the
Plan measures the subsequent periods as the 12 consecutive month periods
beginning with each anniversary of the Employee's Employment Commencement Date."

     1.04 CREDITING SERVICE FOR ELIGIBILITY. For purposes of satisfying Section
2.02 of the Plan (including as modified under Section 1.03 above of this
Appendix A), a 1992 Spider Staging Employee shall receive credit for a period of
service with Spider Staging Corporation before January 1, 1993, to the extent
that period of service is credited for eligibility purposes under the Spider
Staging Plan.

     1.05 VESTING CREDIT. For purposes of vesting under Section 5.03 of the
Plan:

     (a) Year of Service includes vesting credit for full years of service as of
     December 31, 1992, to the extent credited for vesting purposes under the
     Spider Staging Plan as of December 31, 1992; and

     (b) A.1992 Spider Staging Employee shall receive vesting credit for his or
     her number of Hours of Service with Spider Staging Corporation or the
     Employer for the 12 month period beginning in 1992 on the Employee's
     Employment Commencement Date with Spider Staging Corporation (or its
     anniversary), to the extent credited for vesting purposes under the Spider
     Staging Plan as of December 31, 1992.

     1.06 DISTRIBUTIONS TO VESTED PARTICIPANTS UNDER SPIDER STAGING CORPORATION
401(k) PLAN OTHER THAN 1992 SPIDER STAGING EMPLOYEES. With respect to a
participant in the Spider Staging Plan who retired, died or terminated service
with vested accrued benefits under the Spider Staging Plan (regardless whether
benefits have commenced), benefits shall be paid to, or in respect of, such
participant under the applicable sections of the Spider Staging Plan in
accordance with the terms of that plan.

     1.07 VALUATION AND TRANSFER OF ACCOUNTS UNDER THE SPIDER STAGING
CORPORATION 401(k) SAVINGS PLAN. The value of the account of each participant
under the Spider Staging Plan shall be determined as of December 31, 1992. The
balance of that account shall be transferred to the trust established under the
Plan as of that date, shall constitute the balance of the Account of that
person.

     1.08. PROTECTED BENEFITS. Accounts under the Plan representing accounts
transferred as described in Section 1.07 of this Appendix A shall be subject to
all provisions of the Plan relating to Accounts, provided, however, that Code
(S)411(d)(6) protected benefits pertaining to those accounts shall not be
eliminated (except as Treasury Regulations may permit). This means, for example,
that optional forms of benefits provided under the Spider Staging Plan as of
December 31, 1992, shall not be eliminated with respect to such transferred
accounts. (Benefits accrued under the Plan after December 31, 1992, however,
shall be paid only in one of the forms permitted under Section 6.02 of the
Plan.)

     1.09. FORFEITURES. Any amount forfeited under the Spider Staging Plan after
the most recent reallocation of forfeitures and before January 1, 1993, shall be
reallocated under the terms of the Spider Staging Plan as of December 31, 1992.

     1.10. SEPARATE ACCOUNTS. The Advisory Committee shall maintain separate
accounts representing accounts transferred as described in Section 1.07 of this
Appendix A.

     1.11. DEFAULT ON A LOAN MADE UNDER SPIDER STAGING PLAN. To the extent the
assets in an account transferred as described in Section 1.07 of this Appendix A
consist of loans to the participant for whom the account

                                       50

<PAGE>

is maintained, the Plan shall treat a default in the same manner as provided
under the Spider Staging Plan as in effect on December 31, 1992, which provides,
in Section 6.01(k) of the Adoption Agreement:

     If a Participant or Beneficiary defaults on a loan . . .the [Spider
     Staging] Plan . . .[t]reats the default as a distributable event. The
     Trustee, at the time of the default, will reduce the Participant's Vested
     Account Balance by the lesser of the amount in default (plus accrued
     interest) or the Plan's security interest in that Vested Account Balance.
     To the extent the loan is attributable to the Participant's Deferral
     Contributions Account, Qualified Matching Contributions Account or
     Qualified Nonelective Contributions Account, the Trustee will not reduce
     the Participant's Vested Account Balance unless the Participant has
     separated from Service or unless the Participant has attained age 59 1/2.

     1.12 PARTICIPANT-DIRECTED INVESTMENT. Notwithstanding Section 10.03[A](a)
of the Plan, the investment choices for accounts transferred as described in
Section 1.07 of this Appendix A and for employees of Spider Staging Corporation
shall not include the Employer Stock Fund until so designated by the Advisory
Committee.

     1.13 EFFECTIVE DATE. This Appendix A is effective on and after January 1,
1993.

                                       51

<PAGE>

                                   APPENDIX B
                              CERTAIN EMPLOYEES OF
                         ASI ROBOTIC SYSTEMS DIVISION OF
                           CARGILL DETROIT CORPORATION

     1.01 DEFINITIONS. "1994 ASI Division Employee" means an employee of the ASI
Robotic Systems Division of Cargill Detroit Corporation who, on or before
January 3, 1995, accepts an offer of employment by Flow International
Corporation. The "Business" means the manufacture and sale of high precision
multi-axis gantry and cantilever robotics equipment through the ASI Robotic
Systems Division of Cargill Detroit Corporation.

     1.02 CREDITING SERVICE FOR ELIGIBILITY. For purposes of satisfying Section
2.02 of the Plan, a 1994 ASI Division Employee shall be credited with an Hour of
Service for each hour of service with Cargill Detroit Corporation while working
in the Business before January 3, 1995, as if such service had been Service with
Flow International Corporation.

     1.03 PLAN ENTRY DATE. Notwithstanding Sections 1.16 and 2.01 of the Plan, a
1994 ASI Division Employee who completes a Year of Service (taking into account
Section 1.02 of this Appendix B) on or before January 31, 1995, shall become a
Participant in the Plan on January 31, 1995 (if employed by Flow International
Corporation on that date).

     1.04 CREDITING SERVICE FOR VESTING. For purposes of vesting under Section
5.03 of the Plan, a 1994 ASI Division Employee shall be credited under Section
5.06 of the Plan (subject to Sections 5.07 and 5.08 of the Plan) with an Hour of
Service for each hour of service with Cargill Detroit Corporation while working
in the Business before January 3, 1995, as if such service had been Service with
Flow International Corporation.

     1.05 EFFECTIVE DATE. This Appendix B is effective on and after January 1,
1995.

                                       52

<PAGE>

                                   APPENDIX C
                              CERTAIN EMPLOYEES OF
                       FLOW AUTOMATION SYSTEMS CORPORATION

     1.01 DEFINITIONS. "Automation Employee" means an individual who was an
employee of Flow Automation Systems Corporation, formerly known as Dynovation
Machine Systems, Inc. ("Flow Automation"), on December 15, 1994.

     1.02 CREDITING SERVICE FOR ELIGIBILITY. For purposes of satisfying Section
2.02 of the Plan, an Automation Employee shall be credited with an Hour of
Service for each hour of service with Flow Automation before December 15, 1994,
as if such service had been Service with Flow International Corporation.

     1.03 CREDITING SERVICE FOR VESTING. For purposes of vesting under Section
5.03 of the Plan (and for purposes of vesting service described in Section
3.01(A) for Employer Matching Contributions), a an Automation Employee shall be
credited under Section 5.06 of the Plan (subject to Sections 5.07 and 5.08 of
the Plan) with an Hour of Service for each hour of service with Flow Automation
before December 15, 1994, as if such service had been Service with Flow
International Corporation.

     1.04 EFFECTIVE DATE. This Appendix C is effective on and after December 15,
1994.

                                       53

<PAGE>

                                   APPENDIX D
                          FORMER CIS ROBOTICS EMPLOYEES

     1.01 DEFINITIONS. "CIS Robotics" means CIS Robotics, Inc. "Former CIS
Robotics Employee" means an employee of CIS Robotics who was employed by CIS
Robotics on April 8, 1998. "CIS Robotics Plan" means the CIS Robotics 401(k)
Profit Sharing Plan & Trust. "Transferred Account" means the account of a Former
CIS Employee under the CIS Robotics Plan that is transferred from the CIS
Robotics Plan to the Plan in a trust-to-trust transfer.

     1.02 CREDITING SERVICE FOR ELIGIBILITY. For purposes of satisfying Section
2.02 of the Plan, a Former CIS Employee shall be credited with (1) all service
with which he or she is credited for eligibility purposes under the CIS Robotics
Plan, or (2) shall be credited with an Hour of Service for each hour of service
with CIS Robotics, as if such service had been Service with Flow International
Corporation, whichever method results in the Former CIS Employee becoming a
Participant in the Plan on the earliest Plan Entry Date.

     1.03 VESTING CREDIT. For purposes of vesting under Section 5.03 of the Plan
(and for purposes of vesting service described in Section 3.01(A) of the Plan
for Employer Matching Contributions), a Former CIS Robotics Employee shall be
credited under Section 5.06 of the Plan (subject to Sections 5.07 and 5.08 of
the Plan) with all service with which he or she is credited for vesting purposes
under the CIS Robotics Plan.

     1.04 TRANSFERRED ACCOUNTS.

     (a) A Former CIS Robotics Employee shall be 100% vested in his or her
     Transferred Account.

     (b) Immediately after the transfer and assignment of a Transferred Account
     to the Plan from the CIS Robotics Plan, each Participant shall have account
     balances in the Plan equal to the sum of the account balances each
     Participant had in the CIS Robotics Plan and in the Plan immediately prior
     to the transfer and assignment.

     (c) A Transferred Account shall be subject to all provisions of the Plan
     relating to Accounts under the Flow Plan, provided, however, that Code
     (S)411(d)(6) protected benefits pertaining to a Transferred Account shall
     not be eliminated (except as Treasury Regulations may permit).

     (d) If a Transferred Account includes amounts attributable to contributions
     other than Code section 401(k) salary deferral contributions (and the
     related gains, earnings and losses), then unless and until the entire
     account balance under the Flow Plan of the affected Former CIS Robotics
     Employee is 100% nonforfeitable, the Advisory Committee shall maintain
     separate accounts for that Former CIS Robotics Employee to reflect properly
     the different percentages of vesting he or she may have in the account
     balance under the Flow Plan.

     1.05 EFFECTIVE DATE. This Appendix D is effective on and after April 8,
1998.

                                       54

<PAGE>

                                   APPENDIX E
                           CERTAIN FORMER EMPLOYEES OF
                        SPEARHEAD AUTOMATED SYSTEMS, INC.

     1.01 DEFINITIONS. "Spearhead Employee" means an individual who was an
employee of Spearhead Automated Systems, Inc. ("Spearhead"), on September 9,
1999, and who became an employee of Flow International Corporation on September
10, 1999.

     1.02 CREDITING SERVICE FOR ELIGIBILITY. For purposes of satisfying Section
2.02 of the Plan, a Spearhead Employee shall be credited with an Hour of Service
for each hour of service with Spearhead before September 10, 1999, as if such
service had been Service with Flow International Corporation.

     1.03 PLAN ENTRY DATE AND ELIGIBILITY. For purposes of Section 1.16 of the
Plan, September 10, 1999, is a Plan Entry Date for Spearhead Employees. However,
for purposes of Section 2.01, a Spearhead Employee shall enter the Plan on the
September 10, 1999, Plan Entry Date only if he or she could have entered the
Plan on July 1, 1999, based on service with Spearhead through June 30, 1999.

     1.04 CREDITING SERVICE FOR VESTING. For purposes of vesting under Section
5.03 of the Plan (and for purposes of vesting service described in Section
3.01(A) for Employer Matching Contributions), a Spearhead Employee shall be
credited under Section 5.06 of the Plan (subject to Sections 5.07 and 5.08 of
the Plan) with an Hour of Service for each hour of service with Spearhead before
September 10, 1999, as if such service had been Service with Flow International
Corporation.

     1.05 EFFECTIVE DATE. This Appendix E is effective on and after September
10, 1999.

                                       55

<PAGE>

                                 Execution Page

     IN WITNESS WHEREOF, Flow International Corporation, the Employer, by its
duly authorized representative, has executed this Flow International Corporation
Voluntary Pension and Salary Deferral Plan and Trust Agreement, and Security
Trust Company, the Trustee, by its duly authorized representative, has accepted
its position and agreed to the duties, obligations and responsibilities under
this Flow International Corporation Voluntary Pension and Salary Deferral Plan
and Trust Agreement.

              "EMPLOYER"                                 "TRUSTEE"
Flow International Corporation             Security Trust Company

By:                                        By:
    ---------------------------------          ---------------------------------
    Title:                                     Title:
           --------------------------                 --------------------------
January       , 2002                       January       , 2002
        ------                                     ------

                                       56

<PAGE>

                                    Amendment
                                       to
    Flow International Corporation Voluntary Pension and Salary Deferral Plan
               (as Amended and Restated Effective January 1, 2002)
                             (Amendment for EGTRRA)

                                    Preamble

          Adoption of Amendment. This Amendment to the Flow International
Corporation Voluntary Pension and Salary Deferral Plan ("Plan"), as amended and
restated effective January 1, 2002 (the "Plan"), is adopted to reflect certain
provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001
("EGTRRA"). This Amendment is intended as good faith compliance with the
requirements of EGTRRA and is to be construed in accordance with EGTRRA and
guidance issued thereunder.

          Supersession of Inconsistent Provisions. This Amendment shall
supersede the provisions of the Plan to the extent those provisions are
inconsistent with the provisions of this Amendment.

                                    Amendment

Section 1. Exclusion of Rollovers in Application of Involuntary Cash-out
           Provisions.

          Effective for distributions made after December 31, 2001, for purposes
of the Sections of the Plan that provide for the involuntary distribution of
vested accrued benefits of $5,000 or less (see Plan Section 6.01(A)(1)), the
value of a Participant's nonforfeitable account balance shall be determined
without regard to that portion of the account balance that is attributable to
rollover contributions (and earnings allocable thereto) within the meaning of
Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the
Internal Revenue Code of 1986, as amended (the "Code"). If the value of the
Participant's nonforfeitable account balance as so determined is $5,000 or less,
then the Plan shall immediately distribute the Participant's entire
nonforfeitable account balance.

Section 2. Catch-up Contributions.

          Effective as of the first day of the first Plan Year beginning after
December 31, 2001, all employees who are eligible to make elective deferrals
under this Plan and who have attained age 50 before the close of the plan year
shall be eligible to make catch-up contributions in accordance with, and subject
to the limitations of, Section 414(v) of the Code. Such catch-up contributions
shall not be taken into account for purposes of the provisions of the Plan
implementing the required limitations of Sections 402(g) and 415 of the Code.
The Plan shall not be treated as failing to satisfy the provisions of the plan
implementing the requirements of Section 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416 of the Code, as applicable, by reason of the making of such
catch-up contributions.

Section 3. Increase in Compensation Limit.

          The annual compensation of each Participant taken into account in
determining allocations

                                       1

<PAGE>

Amendment
Flow International Corporation Voluntary Pension and Salary Deferral Plan
(as Amended and Restated Effective January 1, 2002)
(Amendment for EGTRRA)

for any Plan Year beginning after December 31, 2001, shall not exceed $200,000,
as adjusted for cost-of-living increases in accordance with section
401(a)(17)(B) of the Code. Annual compensation means compensation during the
Plan Year or such other consecutive 12-month period over which compensation is
otherwise determined under the Plan (the determination period). The
cost-of-living adjustment in effect for a calendar year applies to annual
compensation for the determination period that begins with or within such
calendar year.

Section 4. Maximum Annual Addition.

          Effective for limitation years beginning after December 31, 2001, and
except to the extent permitted under Section 2 of this Amendment and section
414(v) of the Code, if applicable, the annual addition that may be contributed
or allocated to a Participant's account under the Plan for any limitation year
shall not exceed the lesser of:

     a.   $40,000, as adjusted for increases in the cost-of-living under section
          415(d) of the Code, or

     b.   100 percent of the participant's compensation, within the meaning of
          section 415(c)(3) of the Code, for the limitation year.

The compensation limit referred to in b. shall not apply to any contribution for
medical benefits after separation from service (within the meaning of section
401(h) or section 419A(f)(2) of the Code) which is otherwise treated as an
annual addition.

Section 5. Modification of Top-Heavy Rules.

          5.1 Effective Date. This Section 5 shall apply for purposes of
determining whether the Plan is a top-heavy plan under Section 416(g) of the
Code for plan years beginning after December 31, 2001, and whether the Plan
satisfies the minimum benefits requirements of Section 416(c) of the Code for
such years. This Article amends the top-heavy provisions of the Plan.

          5.2 Determination of Top-Heavy Status.

               5.2.1 Key Employee. Key employee means any employee or former
     employee (including any deceased employee) who at any time during the plan
     year that includes the determination date was an officer of the employer
     having annual compensation greater than $130,000 (as adjusted under section
     416(i)(1) of the Code for plan years beginning after December 31, 2002), a
     5-percent owner of the employer, or a 1-percent owner of the employer
     having annual compensation of more than $150,000. For this purpose, annual
     compensation means compensation within the meaning of Section 415(c)(3) of
     the Code. The determination of who is a key employee will be made in
     accordance with Section 416(i)(1) of the Code and the applicable
     regulations and other guidance of general applicability issued thereunder.

               5.2.2 Determination of Present Values and Amounts. This Section
     5.2.2 shall apply for purposes of determining the present values of accrued
     benefits and the amounts of account balances of employees as of the
     determination date.

               a.   Distributions During Year Ending on the Determination Date.
                    The present values of accrued benefits and the amounts of
                    account balances of an employee as of the determination date
                    shall be increased by the distributions made with respect to

                                       2

<PAGE>

Amendment
Flow International Corporation Voluntary Pension and Salary Deferral Plan
(as Amended and Restated Effective January l, 2002)
(Amendment for EGTRRA)

                    the employee under the plan and any plan aggregated with the
                    plan under Section 416(g)(2) of the Code during the 1-year
                    period ending on the determination date. The preceding
                    sentence shall also apply to distributions under a
                    terminated plan which, had it not been terminated, would
                    have been aggregated with the plan under Section
                    416(g)(2)(A)(i) of the Code. In the case of a distribution
                    made for a reason other than separation from service, death,
                    or disability, this provision shall be applied by
                    substituting "5-year period" for "1-year period."

               b.   Employees Not Performing Services During Year Ending on the
                    Determination Date. The accrued benefits and accounts of any
                    individual who has not performed services for the employer
                    during the 1-year period ending on the determination date
                    shall not be taken into account.

          5.3 Minimum Benefits -- Matching Contributions. Employer matching
contributions shall be taken into account for purposes of satisfying the minimum
contribution requirements of Section 416(c)(2) of the Code and the Plan. The
preceding sentence shall apply with respect to matching contributions under the
Plan or, if the Plan provides that the minimum contribution requirement shall be
met in another plan, such other plan. Employer matching contributions that are
used to satisfy the minimum contribution requirements shall be treated as
matching contributions for purposes of the actual contribution percentage test
and other requirements of Section 401(m) of the Code.

Section 6. Direct Rollovers.

          6.1 Effective Date. This Section 6 shall apply to distributions made
after December 31, 2001.

          6.2 Modification of Definition of Eligible Retirement Plan. For
purposes of the direct rollover provisions of the Plan, an eligible retirement
plan shall also mean an annuity contract described in Section 403(b) of the Code
and an eligible plan under Section 457(b) of the Code which is maintained by a
state, political subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to separately account
for amounts transferred into such plan from this Plan. The definition of
eligible retirement plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relation order, as defined in section 414(p) of the
Code.

          6.3 Modification of Definition of Eligible Rollover Distribution to
Exclude Hardship Distributions. For purposes of the direct rollover provisions
of the Plan, any amount that is distributed on account of hardship shall not be
an eligible rollover distribution and the distributee may not elect to have any
portion of such a distribution paid directly to an eligible retirement plan.

          6.4 Modification of Definition of Eligible Rollover Distribution to
Include After-Tax Employee Contributions. For purposes of the direct rollover
provisions in the Plan, a portion of a distribution shall not fail to be an
eligible rollover distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income. However, such
portion may be transferred only to an individual retirement account or annuity
described in section 408(a) or (b) of the Code, or to a qualified defined
contribution plan described in section 401(a) or

                                       3

<PAGE>

Amendment
Flow International Corporation Voluntary Pension and Salary Deferral Plan
(as Amended and Restated Effective January 1, 2002)
(Amendment for EGTRRA)

403(a) of the Code that agrees to separately account for amounts so transferred,
including separately accounting for the portion of such distribution which is
includible in gross income and the portion of such distribution which is not so
includible.

Section 7. Rollovers From Other Plans.

          Effective as of the first day of the first Plan Year beginning after
December 31, 2001, the Employer, operationally and on a nondiscriminatory basis,
may limit the source of rollover contributions that may be accepted by this
Plan.

Section 8. Repeal of Multiple Use Test.

          The multiple use test described in Treasury Regulation Section
1.401(m)-2 and the Plan shall not apply for Plan Years beginning after December
31, 2001.

Section 9. Elective Deferrals - Contribution Limitation.

          No Participant shall be permitted to have elective deferrals made
under this Plan, or any other qualified plan maintained by the Employer during
any taxable year, in excess of the dollar limitation contained in Section 402(g)
of the Code in effect for such taxable year, except to the extent permitted
under Section 2 of this Amendment and section 414(v) of the Code, if applicable.

Section 10. Distribution Upon Severance of Employment.

          10.1 Effective Date. This Section 10 shall apply for distributions and
transactions made after December 31, 2001, regardless of when the severance of
employment occurred.

          10.2 New Distributable Event. A Participant's elective deferrals,
qualified nonelective contributions, qualified matching contributions, and
earnings attributable to these contributions shall be distributed on account of
the Participant's severance from employment. However, such a distribution shall
be subject to the other provisions of the Plan regarding distributions, other
than provisions that require a separation from service before such amounts may
be distributed.

                                    Execution

          IN WITNESS WHEREOF, Flow International Corporation, by its duly
authorized representative has executed this Amendment to the Flow International
Corporation Voluntary Pension and Salary Deferral Plan (as amended and restated
effective January l, 2002).

Flow International Corporation

By
   ------------------------------
   Its
       ---------------------------

Dated: December               , 2001
                --------------

                                       4

<PAGE>

                                   LOAN POLICY

    Flow International Corporation Voluntary Pension and Salary Deferral Plan

1.   DEFINITION OF PARTICIPANT; ELIGIBILITY FOR LOAN.

For purposes of this loan policy, the term "participant" means any participant,
beneficiary or alternate payee with respect to the Plan who is a "party in
interest" as defined in section 3(14) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). Every current employee of Flow International
Corporation (or other employer that maintains the Plan) is a party in interest.

2.   LOAN APPLICATION.

Any participant may apply for a loan, subject to the terms and conditions of
this loan policy. A participant must apply for a loan by written application.
The application must, among other things, specify the amount of the loan desired
and the requested duration for the loan. A loan will be made only after the
Advisory Committee approves the application.

A participant may apply for a loan only once in a plan year (January 1 through
December 31). Thus, for example, if a participant applies for a loan in April
and prepays the entire loan in the following August, he or she may not apply for
a loan until the following January 1.

A participant loan may be for any purpose.

No loan shall be made if the vested portion of the participant's account is less
than $2,000.

3.   LOAN FUNDING.

The Advisory Committee intends this loan program not to place other participants
at risk with respect to their interests in the Plan. In this regard, the
Advisory Committee will administer any participant loan as a separate,
participant-directed investment of that portion of the participant's vested
account balance under the Plan equal to the outstanding principal balance of the
loan. The Plan will credit that portion of the participant's account balance
with the interest earned on the note and with principal payments received by the
Trustee of the Plan. That portion of the participant's account also shall be
charged with expenses directly related to the origination, maintenance and
collection of the note evidencing the loan.

The loan will be charged against the investment fund(s) in which the assets of
the participant's account are invested on a pro rata basis. If the participant's
matching contribution account balance or the participant's employer contribution
account balance is less than 100% vested, the pro rata charge shall apply only
to the vested portion of that account.

A loan processing fee will be withheld from the loan amount.

4.   NUMBER OF LOANS AND LOAN AMOUNT.

A participant may have no more than one loan outstanding at any time.

The amount of a loan may not be less than $1,000.

The amount of the loan may not exceed 50% of the participant's vested account
balance in

<PAGE>

--------------------------------------------------------------------------------
     Loan Policy Flow International Corporation Voluntary Pension and Salary
                     Deferral Plan Effective January 1, 2003
--------------------------------------------------------------------------------

the Plan immediately after origination of the loan, as reflected by the books
and records of the Plan. For this purpose, a participant's vested account
balance does not include the value of assets in a participant's account that are
directly invested in stock in Flow International Corporation.

Further, the amount of all loans outstanding to the participant from all
qualified plans of Flow International (or other employer maintaining the Plan)
at any time may not exceed $50,000, reduced by the participant's highest
outstanding participant loan balance (aggregating all loans from all qualified
plans of Flow International Corporation (or other employer that maintains the
plan)) during the 12-month period ending on the date before the loan is made.

5.   EVIDENCE AND TERMS OF LOAN.

Every loan will be evidenced by a promissory note signed by the participant in a
form approved by the Advisory Committee. Such note shall provide for a face
amount equal to the amount of the loan funded from the Plan, with a commercially
reasonable rate of interest. Advisory Committee will use the Bank Prime Loan
rate published in the Federal Reserve Statistical Release H.15 plus 1%. The
Advisory Committee will reevaluate interest rates at least every two weeks. A
note must provide for monthly payments under a level amortization schedule. The
Advisory Committee will fix the term of payment of the loan, which must be
either one (1), two (2), three (3), four (4) or five (5) years; or (solely for a
loan used to acquire a dwelling unit which within a reasonable time is to be
used (determined at the time of the loan) as the principal residence of the
participant) ten (10) years.

6.   LEAVES OF ABSENCE

If the participant is employed by Flow International Corporation or another
employer that maintains the Plan, the participant's loan payment obligations are
suspended for up to one year during (1) the participant's unpaid leave of
absence approved by the employer or (2) the participant's paid leave of absence
approved by the employer when the amount of pay (less applicable employment tax
withholding) is less than the amount of the participant's loan payments.
However, regardless whether installments are suspended pursuant to the preceding
sentence, the entire balance of the loan must be paid within the term
established for repayment of the loan (that is, two (2), three (3), four (4),
five (5) or ten (10) years).

The Advisory Committee will suspend payment requirements while a participant is
on leave for military service. The period of such period of military service
will not be counted as part of the loan term. Once the participant returns from
military service, the loan payments shall resume at an amount and frequency no
less than required by the terms of the original loan. The loan must be repaid in
full during a period that is no greater than the original loan term plus the
period of such military service.

The Administrative Committee will reduce the interest rate of an outstanding
participant loan to 6% while a participant is on military leave, to the extent
required by the Soldiers' and Sailors' Civil Relief Act.

7.   SECURITY FOR LOAN.

A participant must secure a loan with an irrevocable pledge of, and grant of a
security interest in, 50% of the vested amount of the participant's account
balance under the Plan.

                                     Page 2

<PAGE>

--------------------------------------------------------------------------------
     Loan Policy Flow International Corporation Voluntary Pension and Salary
                     Deferral Plan Effective          , 2002
                                             ---------
--------------------------------------------------------------------------------

If employed by Flow International Corporation or by another employer that
maintains the Plan on the date the loan is disbursed, the participant must also
make an irrevocable assignment of his or her compensation from his or her
employer to the Trustee of the Plan sufficient to discharge the participant's
obligations under the loan, together with an authorization to the employer to
make appropriate payroll deductions, which must continue until the loan is
repaid or the date the participant is entitled to receive a distribution under
the terms of the Plan. If a participant is not employed by Flow International
Corporation or other employer that maintains the Plan on the date the loan is
disbursed, the Advisory Committee may require greater security for the loan. The
pledge and grant of a security interest and the irrevocable assignment of the
participant's compensation must be in a form approved by the Advisory Committee.

8.   WITHDRAWAL AND REPAYMENT

Unless the participant provides other written instructions in the loan
application, (1) if the participant's account is currently invested in more than
one investment fund, the loan will be charged against each investment fund on a
pro-rata basis and (2) loan repayments (principal and interest) will be
reinvested in accordance with the participant's then effective investment
direction for the participant's 401(k) salary deferral contributions, or, if
there is no currently effective direction, pro-rata in accordance with the
current balances of the investment funds in which assets allocated to the
participant's account are invested. In no event will a loan be charged against
assets in a participant's account that are directly invested in stock in Flow
International Corporation. A participant may repay his or her loan in a single
payment without penalty.

9.   DEFAULT/FORFEITURE.

A loan (including all obligations under the note evidencing the loan) shall be
in default upon the occurrence of any of the following events:

(a)  The participant does not pay the full amount of any payment on the date
     when it is due, provided that the participant may cure the default by
     making the payment plus interest on or before the earlier of (1) December
     31 of year in which the payment was originally due, or (2) the last day of
     the calendar quarter that follows the calendar quarter in which the
     repayment was originally due; or

(b)  any representation or statement to the Advisory Committee or the Trustee of
     the Plan by or on behalf of the participant in connection with the loan
     proves to have been false in any material respect when made or furnished;
     or

(c)  a distribution is required to be made under a qualified domestic relations
     order that affects the participant's account, and the amount of the
     distribution would exceed the participant's account balance, less the loan
     balance.

If a participant's loan is in default, the participant will have the opportunity
to repay the loan or, if distribution is available under the plan, request
distribution of the note. If the loan remains in default, the entire balance of
the loan and note shall become immediately due and payable, and, to the extent a
distribution to the participant is permissible under the Plan, consistent with
Plan Section 6.08, the participant's vested account balance under the Plan will
be reduced by the outstanding loan balance. In addition, the Trustee may
foreclose upon any security that it holds. The Advisory Committee will treat the
note as

                                     Page 3

<PAGE>

--------------------------------------------------------------------------------
     Loan Policy Flow International Corporation Voluntary Pension and Salary
                     Deferral Plan Effective          , 2002
                                             ---------
--------------------------------------------------------------------------------

repaid to the extent of any permissible reduction, and if the entire note is
repaid, shall distribute the canceled note to the participant. The participant,
however, remains obligated for any unpaid principal and accrued interest.

The Trustee of the Plan may also accelerate the participant's obligations under
the loan and note if the Plan is terminated.

10.  ADMINISTRATION OF LOAN POLICY

The Advisory Committee's duties and responsibilities under this Loan Policy,
including, without limitation, the approval of loan applications and form of
promissory note evidencing a loan, are delegated to the Plan's recordkeeper.

11.  EFFECTIVE DATE.

This Loan Policy is effective January 1, 2002

                                    * * * *

                                     Page 4

<PAGE>

    Flow International Corporation Voluntary Savings and Salary Deferral Plan

                       Claims and Claims Review Procedure

How do I submit a claim for Plan benefits?

Benefits will be paid to you and your beneficiaries without the necessity of
formal claims. However, if you think an error has been made in determining your
benefits, then you or your beneficiaries may make a request for any Plan
benefits to which you believe you are entitled. Any such request should be in
writing and should be made to the Plan's Advisory Committee (the "Committee").

If the Committee determines the claim is valid, then you will receive a
statement describing the amount of benefit, the method or methods of payment,
the timing of distributions and other information relevant to the payment of the
benefit.

What if my benefits are denied?

Your request for Plan benefits will be considered a claim for Plan benefits, and
it will be subject to a full and fair review. If your claim is wholly or
partially denied, the Committee will provide you with a written or electronic
notification of the Plan's adverse determination. This written or electronic
notification must be provided to you within a reasonable period of time, but not
later than 90 days after the receipt of your claim by the Committee, unless the
Committee determines that special circumstances require an extension of time for
processing your claim. If the Committee determines that an extension of time for
processing is required, written notice of the extension will be furnished to you
prior to the termination of the initial 90 day period. In no event will such
extension exceed a period of 90 days from the end of such initial period. The
extension notice will indicate the special circumstances requiring an extension
of time and the date by which the Committee expects to render the benefit
determination.

The Committee's written or electronic notification of any adverse benefit
determination must contain the following information:

(1)  The specific reason or reasons for the adverse determination.

(2)  Reference to the specific Plan provisions on which the determination is
     based.

(3)  A description of any additional material or information necessary for
     you to perfect the claim and an explanation of why such material or
     information is necessary.

(4)  Appropriate information as to the steps to be taken if you or your
     beneficiary want to submit your claim for review.

If your claim has been denied, and you want to submit your claim for review, you
must follow the Claims Review Procedure.

What is the Claims Review Procedure?

Upon the denial of your claim for benefits, you may file your claim for review,
in writing, with the Committee.

(1)  You must file the claim for review no later than 60 days after you have
     received written or electronic notification of an adverse benefit
     determination.

(2)  You may submit written comments, documents, records, and other information
     relating to your claim for benefits.

(3)  You will be provided, upon request and free of charge, reasonable access
     to, and copies of, all documents, records, and other information relevant
     to your claim for benefits.

(4)  Your claim for review must be given a full and fair review. This review
     will take into account all comments, documents, records, and other
     information submitted by you relating to your claim, without regard to
     whether such information was submitted or considered in the initial benefit
     determination.

The Committee will provide you with written or electronic notification of the
Plan's benefit

<PAGE>

    Flow International Corporation Voluntary Savings and Salary Deferral Plan
                       Claims and Claims Review Procedure

determination on review. The Committee must provide you with notification of
this denial within 60 days after the Committee's receipt of your written claim
for review, unless the Committee determines that special circumstances require
an extension of time for processing your claim. If the Committee determines that
an extension of time for processing is required, written notice of the extension
will be furnished to you prior to the termination of the initial 60 day period.
In no event will such extension exceed a period of 60 days from the end of the
initial period. The extension notice will indicate the special circumstances
requiring an extension of time and the date by which the Committee expects to
render the determination on review. In the case of an adverse benefit
determination, the notification will set forth:

(1)  The specific reason or reasons for the adverse determination.

(2)  Reference to the specific Plan provisions on which the benefit
     determination is based.

(3)  A statement that you are entitled to receive, upon request and free of
     charge, reasonable access to, and copies of, all documents, records, and
     other information relevant to your claim for benefits.

Disability

If your employment terminates due to your disability when you are less than 100%
vested, certain additional rules prescribed by the Department of Labor may to
apply to the initial benefit determination and claims review procedure.

Advisory Committee Address

All communications to the Committee should be addressed as follows:

     Advisory Committee of the Flow International Corporation Voluntary Pension
     and Salary Deferral Plan

     c/o Human Resources
     Flow International Corporation
     P.O. Box 97040
     Kent, WA 98064-9740

Authorized Representative

You or your beneficiary may authorize a representative to act on your, his or
her behalf in pursuing a benefit claim or request for review of an adverse
benefits determination. To authorize a representative, file a written
authorization with the Committee:

The written authorization must contain the Plan's name, your (or your
beneficiary's) name, address and telephone number, and the authorized
representative's name, address, telephone number and fax number (if available).
The written authorization must be signed and dated by you (or your beneficiary)
and the authorized representative. An authorization may include the following
text:

     "I, the Claimant named below, authorize the person named below to represent
     me in pursing my claim for benefits under the Flow International
     Corporation Voluntary Savings and Salary Deferral Plan, including any
     appeal of an adverse benefits determination. I authorize the Plan's
     Committee to provide my representative upon request all information and
     documents that I am entitled to request."

Right to Sue; Limitation Period

If you have a claim for benefits which is denied upon review, in whole or in
part, you may file suit in a state or Federal court. As provided in the Plan,
you or your beneficiary to preserve the claim must file an action with respect
to the denied claim not later than 180 days following the date of the
Committee's final determination.

When Effective

This Claims and Claims Review Procedure is effective with respect to claims
filed on or after January 1, 2002. These claims procedures may be amended from
time to time by the Committee.

                                   * * * * *

                                       2<PAGE>

================================================================================

                                                                  EXHIBIT 10.9**

----------------------------------------------------------------------------
**CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT**

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

                                      Among

                         FLOW INTERNATIONAL CORPORATION

                                  as Borrower,

                                       and

                              BANK OF AMERICA, N.A.
                                       and
                         U.S. BANK NATIONAL ASSOCIATION
                                       and
                          KEYBANK NATIONAL ASSOCIATION
                                   as Lenders,

                                       and

                              BANK OF AMERICA, N.A.

                              as Agent for Lenders

                                   ----------

                                  July 28, 2003

                                   ----------

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
ARTICLE 1 DEFINITIONS.........................................................2

   Section 1.1    Certain Defined Terms.......................................2
   Section 1.2    General Principles Applicable to Definitions...............10
   Section 1.3    Accounting Terms...........................................11

ARTICLE 2 THE LOANS..........................................................11

   Section 2.1    Amounts and Terms of Commitments...........................11
      (a)   The Revolving Credit.............................................11
      (b)   Overdrafts.......................................................11
   Section 2.2    Manner of Borrowing........................................12
      (a)   Revolving Loans..................................................12
      (b)   Overdrafts.......................................................12
   Section 2.3    Agent's Right to Fund Loans................................12
   Section 2.4    Repayment of Principal.....................................13
   Section 2.5    Interest on Loans..........................................13
      (a)   General Provisions...............................................13
      (b)   Applicable Days For Computation of Interest......................13
   Section 2.6    Prepayments................................................13
   Section 2.7    Notes......................................................13
   Section 2.8    Manner of Payments.........................................14
   Section 2.9    Fees.......................................................14
      (a)   Amendment Fee....................................................14
      (b)   Quarterly Commitment Fee.........................................14
      (c)   Agent's Fee......................................................14
   Section 2.10   Sharing of Payments, Etc...................................15
   Section 2.11   Application of Payments....................................15

ARTICLE 3 LETTERS OF CREDIT..................................................15

   Section 3.1    Letters of Credit..........................................15
   Section 3.2    Manner of Requesting Letters of Credit.....................15
   Section 3.3    Indemnification; Increased Costs...........................16
   Section 3.4    Payment by Borrower........................................17
   Section 3.5    Cash Collateralize.........................................17

ARTICLE 4 CONDITIONS.........................................................18

   Section 4.1    Conditions to Effectiveness of Agreement...................18
      (a)   New Loan Documents...............................................18
      (b)   Borrower Authority...............................................18
      (c)   Guarantor Authority..............................................18
</TABLE>

                                       i

<PAGE>

<TABLE>
<S>                                                                          <C>
      (d)   Opinion of Counsel...............................................19
      (e)   Amended Subordinated Note Purchase Agreement.....................19
      (f)   Payment of Fees..................................................19
      (g)   Domestic Guarantor Consent.......................................19
   Section 4.2    Conditions to All Loans and Issuances of Letters of
                  Credit.....................................................19
      (a)   Prior Conditions.................................................19
      (b)   Notice of Borrowing..............................................19
      (c)   No Default.......................................................19
      (d)   Guarantors.......................................................19
      (e)   Other Information................................................19

ARTICLE 5 REPRESENTATIONS AND WARRANTIES.....................................20

   Section 5.1    Corporate Existence and Power..............................20
   Section 5.2    Corporate Authorization....................................20
   Section 5.3    Government Approvals, Etc..................................21
   Section 5.4    Binding Obligations, Etc...................................21
   Section 5.5    Litigation.................................................21
   Section 5.6    Lien Priority..............................................21
   Section 5.7    Financial Condition........................................21
   Section 5.8    Title and Liens............................................22
   Section 5.9    Taxes......................................................22
   Section 5.10   Laws, Orders, Other Agreements.............................22
   Section 5.11   Federal Reserve Regulations................................22
   Section 5.12   ERISA......................................................22
   Section 5.13   Security Offerings.........................................23
   Section 5.14   Investment Company; Public Utility Holding Company.........23
   Section 5.15   Environmental Compliance...................................23
   Section 5.16   Insurance..................................................23
   Section 5.17   Disclosure.................................................24
   Section 5.18   Intellectual Property, Licenses, Etc.......................24
   Section 5.19   Assets of Foreign Guarantors...............................24
   Section 5.20   Representations as a Whole.................................24

ARTICLE 6 AFFIRMATIVE COVENANTS..............................................25

   Section 6.1    Use of Proceeds............................................25
   Section 6.2    Preservation of Corporate Existence, Etc...................25
   Section 6.3    Visitation Rights..........................................25
   Section 6.4    Keeping of Books and Records...............................25
   Section 6.5    Maintenance of Property, Etc...............................25
   Section 6.6    Compliance with Laws, Etc..................................25
   Section 6.7    Other Obligations..........................................25
   Section 6.8    Insurance..................................................26
   Section 6.9    Financial Information......................................26
      (a)   Annual Audited Financial Statements..............................26
      (b)   Quarterly Unaudited Financial Statements.........................26
      (c)   Annual Financial Projections.....................................27
</TABLE>

                                       ii

<PAGE>

<TABLE>
<S>                                                                          <C>
      (d)   Accounts Receivable Summary......................................27
      (e)   SEC Filings......................................................27
      (f)   Compliance Certificates..........................................27
      (g)   Monthly Reporting................................................27
      (h)   Monthly Comparison Report........................................27
      (i)   Other............................................................27
   Section 6.10   Notification...............................................27
   Section 6.11   Additional Payments; Additional Acts.......................28
   Section 6.12   EBITDA.....................................................28
      (a)   Quarterly Basis..................................................29
      (b)   Cumulative Basis.................................................29
   Section 6.13   Minimum Collateral Requirements............................29
   Section 6.14   Loan Documents from Domestic Subsidiaries..................30
   Section 6.15   Update of Collateral.......................................30
   Section 6.16   Security Interest in Foreign Guarantor Collateral..........30
   Section 6.17   Deposit Accounts...........................................30
   Section 6.18   Lease and Landlord Consents................................31
   Section 6.19   Financial Restructuring....................................31
   Section 6.20   Additional Goals...........................................31

ARTICLE 7 NEGATIVE COVENANTS.................................................32

   Section 7.1    Dividends, Purchase of Stock, Etc..........................32
   Section 7.2    Liquidation, Merger, Sale of Assets........................32
   Section 7.3    Indebtedness...............................................32
   Section 7.4    Guaranties, Etc............................................32
   Section 7.5    Liens......................................................33
   Section 7.6    Investments................................................33
   Section 7.7    Operations.................................................33
   Section 7.8    ERISA Compliance...........................................33
   Section 7.9    Subordinated Notes.........................................33
   Section 7.10   Capital Expenditures.......................................34
   Section 7.11   New Product Development Expenditures.......................34
   Section 7.12   Transactions with Affiliates...............................34
   Section 7.13   Burdensome Agreements......................................34
   Section 7.14   Margin Stock...............................................34
   Section 7.15   Payments to Subordinated Noteholders.......................35

ARTICLE 8 EVENTS OF DEFAULT..................................................35

   Section 8.1    Events of Default..........................................35
      (a)   Payment Default..................................................35
      (b)   Breach of Warranty...............................................35
      (c)   Breach of Certain Covenants......................................35
      (d)   Breach of Other Covenant.........................................35
      (e)   Cross-default....................................................35
      (f)   Voluntary Bankruptcy, Etc........................................36
      (g)   Involuntary Bankruptcy, Etc......................................36
</TABLE>

                                       iii

<PAGE>

<TABLE>
<S>                                                                          <C>
      (h)   Insolvency, Etc..................................................36
      (i)   Judgment.........................................................36
      (j)   Government Approvals.............................................37
      (k)   Other Government Action..........................................37
      (l)   ERISA............................................................37
      (m)   Going Concern Qualification......................................37
      (n)   Failure to Issue Financials......................................37
      (o)   Subordinated Note Purchase Agreement Default.....................37
      (p)   Prepayment of Principal Default..................................37
      (q)   Guarantor Default; Invalidity of Guaranty........................37
      (r)   Impairment of Security...........................................38
      (s)   Change of Control................................................38
      (t)   Material Adverse Change..........................................38
      (u)   Invalidity of Loan Documents.....................................38
      (v)   Restructure Agreement Default....................................38
      (w)   Additional Event of Default......................................38
   Section 8.2    Consequences of Default....................................39

ARTICLE 9 AGENT..............................................................40

   Section 9.1    Appointment and Authorization of Agent.....................40
   Section 9.2    Delegation of Duties.......................................40
   Section 9.3    Liability of Agent.........................................40
   Section 9.4    Reliance by Agent..........................................41
   Section 9.5    Notice of Default..........................................41
   Section 9.6    Credit Decision; Disclosure of Information by Agent........41
   Section 9.7    Indemnification of Agent...................................42
   Section 9.8    Agent in its Individual Capacity...........................42
   Section 9.9    Successor Agent............................................43
   Section 9.10   Agent May File Proofs of Claim.............................43

ARTICLE 10 LETTER OF CREDIT RISK PARTICIPATIONS..............................44

   Section 10.1   Sale of Risk Participations................................44
   Section 10.2   Notice to Lenders..........................................44
   Section 10.3   Payment Obligations........................................44
      (a)   Reimbursements to Agent..........................................44
      (b)   Payments to Lenders..............................................45
      (c)   Reimbursements to Lenders........................................45

ARTICLE 11 MISCELLANEOUS.....................................................45

   Section 11.1   No Waiver; Remedies Cumulative.............................45
   Section 11.2   Governing Law..............................................45
   Section 11.3   Mandatory Arbitration......................................45
   Section 11.4   Consent to Jurisdiction; Waiver of Immunities..............46
   Section 11.5   Notices....................................................46
   Section 11.6   Assignment and Participations..............................47
   Section 11.7   Severability...............................................47
</TABLE>

                                       iv

<PAGE>

<TABLE>
<S>                                                                          <C>
   Section 11.8   Survival...................................................47
   Section 11.9   Executed in Counterparts...................................47
   Section 11.10  Entire Agreement; Amendment, Etc...........................47
   Section 11.11  Headings...................................................47
   Section 11.12  Oral Agreements Not Enforceable............................47
   Section 11.13  Release and Waiver.........................................47
   Section 11.14  Attorney Costs, Expenses and Taxes.........................48
   Section 11.15  Indemnification by the Borrower............................48
   Section 11.16  Payments Set Aside.........................................49
   Section 11.17  Set-off....................................................49
   Section 11.18  Interest Rate Limitations..................................50
   Section 11.19  Waiver of Right to Trial by Jury...........................50
   Section 11.20  Confidential Information...................................50
</TABLE>

SCHEDULES
      Schedule 1 - Existing Loan Documents
      Schedule 2 - New Loan Documents
      Schedule 5.5 - Litigation
      Schedule 5.19 - Foreign Guarantor Assets
      Schedule 6.14 - Subsidiaries
      Schedule 7.5 - Liens

EXHIBITS
      Exhibit A-1 - Revolving Loan Note (Bank of America)
      Exhibit A-2 - Revolving Loan Note (U.S. Bank)
      Exhibit A-3- Revolving Loan Note (KeyBank)
      Exhibit B - Foreign Subsidiary Guaranty
      Exhibit C - Foreign Security Agreement
      Exhibit D - Amended and Restated Pledge Agreement
      Exhibit E - Compliance Certificate
      Exhibit F - Opinion of Counsel
      Exhibit G - Restructure Agreement

                                        V

<PAGE>

                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

     THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is made
as of the 28th day of July, 2003, by and among BANK OF AMERICA, N.A., a national
banking association ("Bank of America"), U.S. BANK NATIONAL ASSOCIATION ("U.S.
Bank"), KEYBANK NATIONAL ASSOCIATION ("KeyBank") (each individually a "Lender"
and collectively the "Lenders"), BANK OF AMERICA, as agent for Lenders (the
"Agent") and FLOW INTERNATIONAL CORPORATION, a Washington corporation (the
"Borrower").

     WHEREAS, the Borrower, Bank of America, U.S. Bank and Agent were parties to
that certain Credit Agreement dated as of August 31, 1998, which has been
amended from time to time (as amended the "Original Agreement") and that certain
Security Agreement dated as of August 31, 1998 (the "Original Security
Agreement); and

     WHEREAS, KeyBank was added as a Lender through an Assignment and Assumption
Agreement dated as of January 4, 2001; and

     WHEREAS, Lenders, Agent and Borrower amended and restated the Original
Agreement by that certain Amended and Restated Credit Agreement dated as of
December 29, 2000, which has been amended from time to time (as amended the
"Amended and Restated Agreement"); and

     WHEREAS, Pursuant to the Sixth Amendment to the Amended and Restated
Agreement dated as of August 23, 2002 (the "Sixth Amendment"), Borrower executed
notes and agreements listed on Part (a) of Schedule 1, reflecting a new
commitment amount and granting a security interest in additional collateral in
consideration for accommodations by the Agent and Lenders to Borrower; and

     WHEREAS, Pursuant to the Sixth Amendment, certain domestic subsidiaries of
Borrower executed agreements listed on Part (b) of Schedule 1, guarantying
Borrowers obligations under the Amended and Restated Agreement and granting a
security interest in collateral to Agent as security for such obligations (the
documents listed on Parts (a) and (b) of Schedule 1 are collectively referred to
as the "Existing Loan Documents"); and

     WHEREAS, Borrower is in default of the Existing Loan Documents. Borrower's
defaults include, but are not limited to, noncompliance with Sections 6.12 of
the Amended and Restated Agreement as of the fiscal quarters ending October 31,
2002, January 31, 2003 and April 30, 2003 (the "Existing Defaults"); and

     WHEREAS, Borrower acknowledges the Existing Defaults and is unable to cure
the Existing Defaults; and

     WHEREAS, Borrower has requested that Agent and Lenders enter into this
Agreement, which Agent and Lenders are willing to do, subject to the terms and
conditions contained herein;

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

                                       1

<PAGE>

                                    ARTICLE 1
                                   DEFINITIONS

     Section 1.1 Certain Defined Terms. As used in this Agreement, the following
terms have the following meanings:

          "Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto.

          "Agent" means Bank of America, N.A. and any successor agent selected
pursuant to Section 9.6 hereof.

          "Agent-Related Persons" means the Agent, together with its Affiliates
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.

          "Alternate Restructure Event" has the meaning given to it in the
Restructure Agreement.

          "Alvarez" means Alvarez & Marsal, Inc., a New York corporation.

          "Asset Sale Net Proceeds" means the gross proceeds attributable to the
sale of any assets (other than assets in the ordinary course of business) owned
by Borrower or any Guarantor minus the expenses associated with such sale.

          "Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the reasonable allocated cost of internal legal services and all
expenses and disbursements of internal counsel.

          "Avure" means Avure Technologies, Incorporated, a Washington
corporation.

          "Bank of America" means Bank of America, N.A., a national banking
association, in its capacity as Lender, and any Successor.

          "Base Rate" means the sum of (i) the Prime Rate and (ii) 4.00%, or as
otherwise provided in the Restructure Agreement.

          "Borrower" means Flow International Corporation, a Washington
corporation, and any Successor.

          "Borrower Accounts" means any and all checking accounts held by
Borrower at Bank of America.

          "Business Day" means any day other than Saturday, Sunday or another
day on which commercial banks are authorized or obligated to close in Seattle,
Washington.

                                       2

<PAGE>

          "Change of Control" means, with respect to any Person, an event or
series of events by which:

          (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any employee
benefit plan of such person or its subsidiaries, and any person or entity acting
in its capacity as trustee, agent or other fiduciary or administrator of any
such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Securities Exchange Act of 1934, except that a person or group shall
be deemed to have "beneficial ownership" of all securities that such person or
group has the right to acquire (such right, an "option right"), whether such
right is exercisable immediately or only after the passage of time), directly or
indirectly, of 40% or more of the equity securities of such Person entitled to
vote for members of the board of directors or equivalent governing body of such
Person on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right); or

          (b) during any period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of such
Person cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors).

          "CIS Acquisition Corp" shall mean CIS Acquisition Corp. a Michigan
corporation.

          "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

          "Collateral" means all personal or real property in which any of the
Loan Documents now or hereafter create or purport to create a Lien.

          "Collateral Differential" has the meaning given to it in Section 6.13.

          "Commitment" shall mean, (a) with respect to each Lender, (i) its
obligation to extend Revolving Loans under this Agreement, or (ii) its
obligation to purchase Letter of Credit Risk Participations pursuant to Article
10 hereof; and (b) with respect to Agent, its obligation to issue Letters of
Credit under this Agreement.

          "Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.

                                       3

<PAGE>

          "Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Borrower, are treated as a single employer
under Section 414(b) or 414(c) of the Code.

          "Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.

          "Default" means any event which but for the passage of time or the
giving of notice or both would be an Event of Default.

          "Default Rate" shall have the meaning given to it in Section 2.5(a).

          "Deposit Accounts" means any deposit accounts in the name of Borrower
or any Guarantor.

          "Dollars", "dollars" and "$" each mean lawful money of the United
States.

          "Domestic Guarantors" means Avure, CIS Acquisition Corp. and Flow
Waterjet Florida Corporation, a Florida corporation, and any other Subsidiary
that from time to time executes and delivers a supplement in the form attached
to, or otherwise becomes bound by, the Domestic Guaranty.

          "Domestic Guaranty" means that certain Guaranty Agreement dated as of
August 23, 2002, executed by the Domestic Guarantors in favor of Agent and
Lenders, and any additions, supplements, renewals or amendments thereto.

          "Domestic Subsidiary" means a Subsidiary of Borrower incorporated and
organized under the laws of any state of the United States and the District of
Columbia.

          "EBITDA" means pre-tax net income (or pre-tax net loss), plus the sum
of (i) interest expense (including amounts paid to Subordinated Noteholders
pursuant to Section 7.15), (ii) depreciation expense, (iii) depletion expense,
(iv) amortization expense, (v) restructuring expenses, not to exceed $8,900,000,
(vi) fees paid pursuant to Section 2.9, (vii) one-time, non-cash charges related
to write-downs of intangibles or goodwill, and (vii) costs and write-downs
associated with the Restructure Event or Alternate Restructure Event as defined
in Exhibit G hereto; provided however, any add-backs made pursuant to this
definition of "EBITDA" may only be made to the extent that such add-back has
already been deducted in the determination of pre-tax net income (or pre-tax net
loss) for such period.

          "Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters; including the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution Control Act of 1972,
the

                                       4

<PAGE>

Solid Waste Disposal Act, the Federal Resource Conservation and Recovery Act,
the Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, and any applicable state law.

          "Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Guarantor or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

          "ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).

          "Event of Default" has the meaning given in Section 8.1.

          "Existing Loan Documents" has the meaning given in the recitals
hereto.

          "FAC" means Flow Asia Corporation, a corporation formed under the laws
of Taiwan.

          "Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on
transactions received by Agent from three federal funds brokers of recognized
standing selected by Agent.

          "FEG" means Flow Europe Gmbh, a corporation formed under the laws of
Germany.

          "FEMG" means Flow Europe Manufacturing Gmbh, a corporation formed
under the laws of Germany.

          "Financial Transactions Obligations" means all indebtedness,
liabilities and obligations of Borrower to Bank of America, U.S. Bank or any
Affiliate of Bank of America or U.S. Bank now or hereafter existing, whether
joint or several, direct or indirect, absolute or contingent or due or to become
due, arising under or in connection with any agreement (including all schedules
thereto, confirmations of transactions thereunder, and documents, definitions,
and agreements incorporated therein by reference or relating thereto) pursuant
to

                                       5

<PAGE>

which Bank of America or U.S. Bank has agreed to permit daylight overdrafts to
occur on accounts maintained by Borrower with Bank of America or U.S. Bank,
provide remote disbursement services for Borrower, process automated clearing
house (ACH) transactions for the account of Borrower or extend credit to
Borrower, in the form of credit card accounts, including, without limitation,
any interest due thereon, all fees, costs, and expenses incurred by Bank of
America or U.S. Bank in connection therewith, and termination payments and
indemnifications relating thereto

          "Flow Robotics" means Flow Robotic Systems, a division of Borrower
based in Wixom, Michigan.

          "Flow South America" shall mean Flow Latino, a corporation organized
under the laws of Brazil and any division of Borrower or any Subsidiary that
reports through Flow South America.

          "Foreign Guarantors" means FAC, FEG or FEMG and any other Subsidiary
that from time to time executes and delivers a supplement in the form attached
to, or otherwise becomes bound by, the Foreign Guaranty, and "Foreign Guarantor"
means any one of them.

          "Foreign Guaranty" means that certain Guaranty Agreement dated as of
the date hereof, executed by the Foreign Guarantors in favor of Agent and
Lenders, and any additions, supplements, renewals or amendments thereto.

          "GAAP" has the meaning given in Section 1.3.

          "Government Approval" means an approval, permit, license,
authorization, certificate, or consent of any Governmental Authority.

          "Governmental Authority" means the government of the United States or
any State or any foreign country or any political subdivision of any thereof or
any branch, department, agency, instrumentality, court, tribunal or regulatory
authority which constitutes a part or exercises any sovereign power of any of
the foregoing.

          "Guarantors" means the Domestic Guarantors, the Foreign Guarantors,
and any other Subsidiary that from time to time executes and delivers a
supplement in the form attached to, or otherwise becomes bound by, the Domestic
Guaranty or Foreign Guaranty, and "Guarantor" means any one of them.

          "Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.

          "Indebtedness" means for any person (a) all items of indebtedness or
liability (except capital, surplus, deferred credits and reserves, as such)
which would be included in determining total liabilities as shown on the
liability side of a balance sheet as of the date as of which indebtedness is
determined, (b) indebtedness secured by any Lien, whether or not such

                                       6

<PAGE>

indebtedness shall have been assumed, (c) any other indebtedness or liability
for borrowed money or for the deferred purchase price of property or services
for which such person is directly or contingently liable as obligor, guarantor,
or otherwise, or in respect of which such person otherwise assures a creditor
against loss, (d) any other obligations of such person under leases which shall
have been or should be recorded as capital leases, and (e) guarantees or other
contingent obligations.

          "Indemnified Liabilities" has the meaning given to it in Section
11.15.

          "Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of October 2, 2002 by and among Lenders, Agent and Subordinated
Noteholders and consented to by Borrower and Domestic Guarantors.

          "JD Edwards Financial System" means Borrower's domestic accounting
system or a similar accounting system that is compatible with the domestic
system.

          "KeyBank" means KeyBank National Association, a national banking
association, in its capacity as Lender under this agreement, and any Successor.

          "Letter of Credit" means any standby letter of credit issued by Agent
pursuant to the terms of Article 3 hereof.

          "Letter of Credit Risk Participation" means, with respect to each
Lender, a risk participation purchased by such Lender pursuant to Article 10
hereof with respect to a Letter of Credit (including risk participations deemed
purchased from Agent by Bank of America in its capacity as Lender).

          "Letter of Credit Usage" means, as of any date of determination, the
sum of (i) the aggregate face amount of all outstanding unmatured Letters of
Credit plus (ii) the aggregate amount of all payments made by Agent under
Letters of Credit, no longer outstanding, but not yet reimbursed by Borrower
pursuant to Section 3.4.

          "Lien" means, for any person, any security interest, pledge, mortgage,
charge, assignment, hypothecation, encumbrance, attachment, garnishment,
execution or other voluntary or involuntary lien upon or affecting the revenues
of such person or any real or personal property in which such person has or
hereafter acquires any interest, except (a) liens for Taxes which are not
delinquent or which remain payable without penalty or the validity or amount of
which is being contested in good faith by appropriate proceedings upon stay of
execution of the enforcement thereof; (b) liens imposed by law (such as
mechanics' liens) incurred in good faith in the ordinary course of business
which are not delinquent or which remain payable without penalty or the validity
or amount of which is being contested in good faith by appropriate proceedings
upon stay of execution of the enforcement thereof with, in the case of liens on
property of Borrower, provision having been made to the satisfaction of Agent
for the payment thereof in the event the contest is determined adversely to
Borrower; and (c) deposits or pledges under worker's compensation, unemployment
insurance, social security or other similar laws or made to secure the
performance of bids, tenders, contracts (except for repayment of borrowed
money), or leases, or to secure statutory obligations or surety or appeal bonds
or to secure indemnity, performance, customs or other similar bonds given in the
ordinary course of business.

                                       7

<PAGE>

          "Loan Documents" means the Existing Loan Documents and the New Loan
Documents.

          "Loans" means the Revolving Loans and overdraft advances pursuant to
Section 2.1(b).

          "Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Borrower or
the Borrower and its Subsidiaries taken as a whole; (b) a material impairment of
the ability of Borrower or any Guarantor to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against Borrower or any
Guarantor of any Loan Document to which it is a party.

          "New Loan Documents" means the documents listed on Schedule 3.

          "Notes" has the meaning given in Section 2.7.

          "Notice of Borrowing" means a written or oral request for a Loan from
Borrower delivered to Agent in the manner, at the time, and containing the
information required under Section 2.2.

          "Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of Borrower or any Guarantor arising under any
Loan Document or otherwise with respect to any Loan, Letter of Credit or
Financial Transactions Obligations, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising and including interest and fees that accrue after
the commencement by or against Borrower or any Guarantor or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding.

          "Officer's Certificate" means a certificate executed and delivered on
behalf of Borrower by its Chairman, President or Chief Financial Officer.

          "PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.

          "Pension Plan" means an "employee pension benefit plan" (as such term
is defined in ERISA) from time to time maintained by Borrower or a member of the
Controlled Group.

          "Person" or "person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.

          "Plan" means, at any time, an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (a) maintained by Borrower or any member
of the Controlled Group for employees

                                       8

<PAGE>

of Borrower or any member of the Controlled Group or (b) maintained pursuant to
a collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which Borrower or any member of the
Controlled Group is then making or accruing an obligation to make contributions
or has within the preceding five (5) plan years made contributions.

          "Prime Rate" means the rate publicly announced from time to time by
Bank of America at its "prime rate." The prime rate is a rate set by Bank of
America based upon various factors including Bank of America's costs and desired
return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below
such announced rate. Any change in the prime rate announced by Bank of America
shall take effect at the opening of business on the day specified in the public
announcement of such change.

          "Pro Rata Share" means a fraction whose numerator (a) with respect to
Bank of America, is Bank of America's Commitment, (b) with respect to U.S. Bank,
is U.S. Bank's Commitment, and (c) with respect to KeyBank, is KeyBank's
Commitment, and whose denominator is the sum of all Lenders' Commitments.

          "Reduction Letter" means that certain letter from Borrower to Agent
dated July 28, 2003 requesting a reduction of the Total Revolving Commitment in
the amount of One Million Five Hundred Thousand Dollars ($1,500,000) pursuant to
Section 2.1(a).

          "Reimbursement Agreements" has the meaning given in Section 3.2(d).

          "Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other equity interest of the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option (other than options under the Borrower's stock option plan),
warrant or other right to acquire any such capital stock or other equity
interest.

          "Restructure Agreement" means that certain Restructure Agreement
attached as Exhibit G hereto.

          "Restructure Event" has the meaning given to it in the Restructure
Agreement.

          "Revolving Commitment Period" has the meaning given in Section 2.1(a).

          "Revolving Commitment" has the meaning given in Section 2.1(a).

          "Revolving Loans" has the meaning given in Section 2.1(a).

          "Revolving Maturity Date" means August 1, 2004.

          "Subordinated Note Purchase Agreement" means, collectively, the
agreements providing for the purchase of an aggregate principal amount of
$35,000,000 of the Borrower's

                                       9

<PAGE>

13% Subordinated Notes due April 30, 2008 and Warrants to Purchase Common Stock
between Borrower and the "Purchasers" identified therein.

          "Subordinated Noteholders" means, as of any date, any persons that are
holders of any of the Subordinated Notes. As of the date hereof, such holders
are John Hancock Life Insurance Company, John Hancock Variable Life Insurance
Company, Signature 4 Limited, and Signature 5 L.P.

          "Subordinated Notes" means the notes issued in connection with, and as
defined in, the Subordinated Note Purchase Agreement, as approved by the Lenders
and Agent.

          "Subsidiary" shall mean any person, corporation, association or other
business entity directly or indirectly controlled by Borrower. For the purposes
of this definition, "controlled by" shall mean the possession, directly or
indirectly of the power to direct or cause the direction of the management and
policies of such Subsidiary, whether through the ownership of voting securities,
by contract or otherwise.

          "Successor" means, for any corporation or banking association, any
successor by merger or consolidation, or by acquisition of substantially all of
the assets of the predecessor.

          "Tax" means, for any person, any tax, assessment, duty, levy, impost
or other charge imposed by any Governmental Authority on such person or on any
property, revenue, income, or franchise of such person and any interest or
penalty with respect to any of the foregoing.

          "Total Revolving Commitment" means an amount as calculated in Section
2.1(a).

          "Total Utilization" means, as of any date of determination, the sum of
(i) the aggregate principal amount of all outstanding Revolving Loans, (ii) any
amounts outstanding under Section 2.1(b), and (iii) the Letter of Credit Usage.

          "Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds (b) the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent evaluation date for such Plan, but only to the extent that such excess
represents a potential liability of Borrower or any member of the Controlled
Group to the PBGC or the Plan under Title IV of ERISA.

          "U.S. Bank" means U.S. Bank National Association, a national banking
association, in its capacity as Lender, and any Successor.

     Section 1.2 General Principles Applicable to Definitions. Definitions given
herein shall be equally applicable to both singular and plural forms of the
terms therein defined and references herein to "he" or "it" shall be applicable
to persons whether masculine, feminine or neuter. References herein to any
document including, but without limitation, this Agreement shall be deemed a
reference to such document as it now exists, and as, from time to time
hereafter, the same may be amended. References herein to any section,
subsection, schedule or

                                       10

<PAGE>

exhibit shall, unless otherwise indicated, be deemed a reference to sections and
subsections within and schedules and exhibits to this Agreement.

     Section 1.3 Accounting Terms. Except as otherwise provided herein,
accounting terms not specifically defined shall be construed, and all accounting
procedures shall be performed, in accordance with generally accepted United
States accounting principles consistently applied ("GAAP") and as in effect on
the date of application.

                                    ARTICLE 2
                                    THE LOANS

     Section 2.1 Amounts and Terms of Commitments.

          (a) The Revolving Credit. Subject to the terms and conditions of this
Agreement, each Lender hereby severally agrees to make loans ("Revolving Loans")
to Borrower from time to time on Business Days until the Revolving Maturity Date
(the "Revolving Commitment Period") in amounts equal to such Lender's Pro Rata
Share (as set forth below) of each requested loan; provided that, after giving
effect to any requested loan (i) the aggregate of all Revolving Loans from such
Lender will not exceed at any one time outstanding the Total Revolving
Commitment then in effect multiplied by such Lender's Pro Rata Share (such
Lender's "Revolving Commitment"), and (ii) the Total Utilization will not exceed
the Total Revolving Commitment then in effect. Each Lender's initial Revolving
Commitment is set forth opposite its name below. The Revolving Loans described
in this Section 2.1(a) constitute a revolving credit and within the amount and
time specified, Borrower may pay, prepay and reborrow.

                                        Revolving Commitment
Lender                                 as of the date hereof   Pro Rata Share
------                                 ---------------------   --------------
Bank of America                            $27,594,246.58       44.506849315%
U.S. Bank                                  $18,549,041.10       29.917808220%
KeyBank                                    $15,856,712.32       25.575342465%
Total Revolving Commitment as of the
   date hereof                             $   62,000,000             100.00%

provided, however, the Total Revolving Commitment shall be permanently reduced
by Scheduled Reductions and Other Reductions. As used herein, the following
terms have the following meanings: "Scheduled Reductions" means (i) on October
31, 2003, $2,000,000; (ii) on January 31, 2004, $7,000,000; and (iii) on April
30, 2004, $2,000,000. "Other Reductions" means (a) any written request for such
reduction by Borrower delivered to Agent, which reduction shall be effective on
the next Business Day after receipt by Agent of such request; (b) any Collateral
Differential; and (c) any Asset Sale Net Proceeds.

          (b) Overdrafts. Subject to the terms and conditions of this Agreement,
including without limitation, Section 4.2, Bank of America, as part of its
Commitment hereunder, hereby severally agrees to make loans, not to exceed the
lesser of (i) Total Revolving

                                       11

<PAGE>

Commitment minus the Total Utilization, and (ii) $3,000,000, to cover overdrafts
on Borrower Accounts.

     Section 2.2 Manner of Borrowing.

          (a) Revolving Loans. For each requested Revolving Loan, Borrower shall
deliver to Agent a Notice of Borrowing specifying the date of the requested
borrowing and the amount thereof. Borrower may give an oral Notice of Borrowing
on the same day it wishes the Revolving Loan to be made, provided that said
Notice of Borrowing is received by Agent no later than 11:00 a.m. (Seattle time)
on the date of the requested borrowing. Requests for borrowing, or confirmations
thereof, received after the designated hour will be deemed received on the next
succeeding Business Day. Each such Notice of Borrowing shall be irrevocable and
shall be deemed to constitute a representation and warranty by Borrower that as
of the date of such notice the statements set forth in Article 5 hereof are true
and correct and that no Default or Event of Default has occurred and is
continuing. On receipt of a Notice of Borrowing, Agent shall promptly notify
each Lender by telephone, telex or telefax of the date of the requested
borrowing and the amount thereof. Each Lender shall before 1:00 p.m. (Seattle
time) on the date of the requested borrowing, pay such Lender's Pro Rata Share
of the aggregate principal amount of the requested borrowing in immediately
available funds to Agent at its Commercial Loan Processing Center, Seattle,
Washington. Upon fulfillment to Agent's satisfaction of the applicable
conditions set forth in Article 4, and after receipt by Agent of such funds,
Agent will promptly make such funds available to Borrower by depositing them to
the ordinary checking account maintained by Borrower at Agent's Commercial
Accounts Service Center.

          (b) Overdrafts. Bank of America may, at its option, notify Agent that
any overdraft covered by Section 2.1(b) shall be deemed a Notice of Borrowing
requesting a Loan. If Bank of America so notifies Agent, then all parties hereto
agree that, for all purposes under this Agreement, Borrower will be deemed to
have delivered a Notice of Borrowing to Agent pursuant to Section 2.2(a)
requesting a Revolving Loan on the date and in the amount of such overdraft.
Borrower shall, if requested by Agent, provide a written Notice of Borrowing to
Agent as additional evidence of its request for such Revolving Loan.

     Section 2.3 Agent's Right to Fund Loans. Unless Agent shall have received
notice from a Lender prior to 12:00 Noon (Seattle time) on the date of any
requested borrowing that such Lender will not make available to Agent its share
of the requested borrowing, Agent may assume that such Lender has made such
funds available to Agent on the date such Loan is to be made in accordance with
Section 2.2 hereof and Agent may, in reliance upon such assumption, make
available to Borrower on such date a corresponding amount. If and to the extent
that such Lender shall not have so made such portion available to Agent, such
Lender and Borrower jointly and severally agree to pay to Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to Borrower until the date such
amount is repaid to Agent, at (a) in the case of Borrower, the Base Rate and (b)
in the case of such Lender, the Federal Funds Rate. Any such repayment by
Borrower shall be without prejudice to any rights it may have against Lender
that has failed to make available its funds for any requested borrowing.

                                       12

<PAGE>

     Section 2.4 Repayment of Principal.

          (a) Borrower shall repay to Lenders from time to time such amounts of
principal as may be necessary to ensure that at all times, the Total Utilization
is equal to or less than the Total Revolving Commitment then in effect.

          (b) At 5:00 p.m. (Seattle time) on each Business Day that there is an
outstanding balance in any of the Borrower Accounts, Borrower shall repay to
Agent, for the account of Lenders, an amount equal to such balance.

          (c) Borrower shall pay to Lenders the Asset Sale Net Proceeds.

          (d) Borrower shall pay to Lenders One Million Five Hundred Thousand
Dollars ($1,500,000) pursuant to the Reduction Letter.

          (e) Borrower shall repay the principal amount of the Revolving Loans
on or before the Revolving Maturity Date.

     Section 2.5 Interest on Loans.

          (a) General Provisions. Borrower agrees to pay to Lenders interest on
the unpaid principal amount of each Loan, including overdrafts made pursuant to
Section 2.1(b), from the date of such Loan until such Loan shall be due and
payable at a per annum rate equal to the Base Rate. If a default shall occur in
the payment when due of any Loan (whether at maturity, upon acceleration or
otherwise), interest shall accrue at a per annum rate equal to seven percentage
points (7%) above the Prime Rate (the "Default Rate"). Accrued but unpaid
interest on each Loan shall be paid in arrears on the first Business Day of each
calendar month, and at the Revolving Maturity Date. Notwithstanding the
foregoing, accrued interest on any Loan shall be payable on demand after the
occurrence of an Event of Default.

          (b) Applicable Days For Computation of Interest. Computations of
interest described in Section 2.5 shall be made on the basis of a year of 360
days, for the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest is payable.

     Section 2.6 Prepayments. Loans may be repaid at any time without penalty or
premium. Notice of prepayments shall be given to the Agent by 9:00 am Seattle
time on the day of prepayment.

     Section 2.7 Notes. The Revolving Loans shall be evidenced by promissory
notes of Borrower substantially in the forms attached hereto as Exhibits A-1,
A-2, and A-3. The promissory notes referred to herein are collectively referred
to as the "Notes." Each Lender is hereby authorized to record the date and
amount of Loans it makes and the date and amount of each payment of principal
and interest thereon on a schedule annexed to and constituting part of the
appropriate Note. Any such recordation by a Lender shall constitute prima facie
evidence of the accuracy of the information so recorded; provided, however, that
the failure to make any such recordation or any error in any such recordation
shall not affect the obligations of Borrower hereunder or under the Notes.

                                       13

<PAGE>

     Section 2.8 Manner of Payments.

          (a) All payments and prepayments of principal and interest on any Loan
and all other amounts payable hereunder by Borrower to Agent or any Lender shall
be made by paying the same in Dollars and in immediately available funds to
Agent at its Commercial Loan Processing Center, Seattle, Washington not later
than 12:00 Noon (Seattle time) on the date on which such payment or prepayment
shall become due.

          (b) Borrower hereby authorizes Agent and each Lender, if and to the
extent any payment is not promptly made pursuant to this Agreement or any other
Loan Document, to charge from time to time against any or all of the accounts of
Borrower with Agent or any Lender or any affiliate of any Lender any amount due
hereunder or under such other Loan Document.

          (c) Whenever any payment hereunder or under any other Loan Document
shall be stated to be due would otherwise occur on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day.

          (d) Unless Borrower has notified Agent prior to the date any payment
to be made by it is due, that it does not intend to remit such payment, Agent
may, in its sole and absolute discretion, assume that Borrower has timely
remitted such payment and may, in its sole and absolute discretion and in
reliance thereon, make available such payment to the Lender entitled thereto. If
such payment was not in fact remitted to Agent in immediately available funds,
then each Lender shall forthwith on demand repay to Agent the amount of such
assumed payment made available to such Lender, together with interest thereon in
respect of each day from and including the date such amount was made available
by Agent to such Lender to the date such amount is repaid to Agent at the
Federal Funds Rate.

     Section 2.9 Fees. In addition to certain fees described in Section 3.2(b),
Borrower shall pay the following fees:

          (a) Amendment Fee. Immediately upon the execution and delivery of this
Agreement, Borrower shall pay to Agent for the account of Lenders in accordance
with their Pro Rata Shares, an amendment fee in the amount of Six Hundred Twenty
Thousand Dollars ($620,000). Such fee shall be deemed fully earned when due and
non-refundable, in whole or in part, when paid.

          (b) Quarterly Commitment Fee. On each of July 31, 2003, October 31,
2003, January 31, 2004 and April 30, 2004, Borrower shall pay to Agent for the
account of Lenders in accordance with their Pro Rata Shares a quarterly
commitment fee in an amount equal to the product of (i) 0.25% (25 basis points)
and (ii) the Total Revolving Commitment then in effect. Such fee shall be deemed
fully earned when due and non-refundable, in whole or in part, when paid.

          (c) Agent's Fee. Immediately upon the execution and delivery of this
Agreement, Borrower shall pay Agent, for its own account, an Agent's fee of One
Hundred Thousand Dollars ($100,000). Such fee shall be deemed fully earned when
due and non-refundable, in whole or in part, when paid.

                                       14

<PAGE>

     Section 2.10 Sharing of Payments, Etc. If any Lender shall obtain any
payment in respect of Borrower's obligations under the Loan Documents (whether
voluntary or involuntary, through the exercise of any right of setoff or
otherwise) in excess of the amount it would have received if all payments had
been made directly to Agent and apportioned in accordance with the terms hereof,
such Lender shall hold such excess payment in trust for Agent and Lenders and
shall forthwith remit the same to Agent for Lenders' accounts as herein
provided.

     Section 2.11 Application of Payments. Any payment by Borrower hereunder
shall be applied first, against fees, expenses and indemnities due hereunder;
second, against interest then due in respect of any Loan; third, against amounts
due under Section 3.4 hereof; fourth, against any Financial Transaction
Obligations; and thereafter, ratably against amounts owing for the loan
principal. After the applicable maturity date for any Loan, payments to be
applied to loan principal shall be applied first to principal installments then
due and thereafter to principal installments in the inverse order of maturity.
Agent shall distribute any payment by Borrower in respect of Revolving Loans in
accordance with each Lender's Pro Rata Share. After any of the Loans become due
(by maturity, upon acceleration or otherwise), any amounts recovered from
Borrower, including, without limitation, through realization on any Collateral,
shall be applied, and distributed by Agent to Lenders, in accordance with each
Lender's Pro Rata Share.

                                    ARTICLE 3
                                LETTERS OF CREDIT

     Section 3.1 Letters of Credit. Borrower may request that Agent issue
letters of credit for Borrower's account in accordance with the terms and
conditions of this Article 3.

     Section 3.2 Manner of Requesting Letters of Credit.

          (a) From time to time, Borrower may request that Agent issue a standby
letter of credit for Borrower's account or extend or renew any existing Letters
of Credit; provided however, the intended beneficiary of the Letter of Credit is
a customer of Borrower. Such request will be made by delivering a written
request or making an oral request for the issuance, extension or renewal of such
a letter of credit to Agent not later than 9:00 a.m. (Seattle time) on the date
a new letter of credit is to be issued or an existing letter of credit is
scheduled to expire, provided that, any request given orally shall be confirmed
by Borrower in a writing delivered to Agent not later than 10:00 a.m. (Seattle
time) on the date such oral request is made. Each such request shall be deemed
to constitute a representation and warranty by Borrower that as of the date of
such request, statements set forth in Article 5 hereof are true and correct and
that no Default or Event of Default has occurred and is continuing. Each such
request shall specify the face amount of the requested Letter of Credit, the
proposed date of expiration, the name of the intended beneficiary thereof, and
whether such Letter of Credit is a new letter of credit or an extension or
renewal thereof.

          (b) Borrower shall pay to Agent for the account of each Lender in
accordance with its Pro Rata Share, a letter of credit fee equal to five percent
(500 basis points) per annum multiplied by the maximum amount available to be
drawn on the outstanding standby Letters of Credit, which fee shall not be less
than Two Hundred Fifty Dollars ($250). Such letter of credit fees shall be
computed on a quarterly basis in arrears. Such letter of credit fees shall be
due and

                                       15

<PAGE>

payable on the first Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Revolving Maturity Date and thereafter on demand.
In addition, Borrower shall pay directly to Agent for its own account the
customary issuance, presentation, amendment and other processing fees, and other
standard costs and charges, of Agent relating to letters of credit as from time
to time in effect. Such customary fees and standard costs and charges are due
and payable on demand and are nonrefundable.

          (c) Each letter of credit requested hereunder: (i) shall be in a face
amount such that after issuance of such letter of credit (A) the Total
Utilization will not exceed the Total Revolving Commitment then in effect, and
(B) the Letter of Credit Usage would not exceed $5,000,000; and (ii) shall have
an expiration date not later than the Revolving Maturity Date.

          (d) At the request of Agent, Borrower shall execute a letter of credit
application and reimbursement agreement, in the standard form then used by
Agent, in respect of each Letter of Credit requested hereunder. The letter of
credit applications and reimbursement agreements now in effect with respect to
each existing Letter of Credit shall remain in full force and effect except
that, if such existing Letter of Credit is extended or renewed, Agent may, at
its option, require Borrower to execute a new letter of credit application and
reimbursement agreement (all reimbursement agreements relating to any of the
Letters of Credit shall, as such agreements may be amended from time to time, be
collectively referred to herein as the "Reimbursement Agreements").

          (e) Subject to the satisfaction of the conditions precedent set forth
in Article 4 and Borrower's compliance with the terms of this Section 3.2, Agent
shall issue and deliver its letter of credit to Borrower or to the designated
beneficiary at such address as Borrower may specify. New Letters of Credit and
extensions or renewals of any existing Letters of Credit shall contain terms and
conditions customarily included in Agent's letters of credit and shall otherwise
be in a form acceptable to Agent.

     In the event of any conflict between the terms of any Reimbursement
Agreement and the terms of this Agreement, the terms of this Agreement shall
control, unless Agent has otherwise agreed in a writing.

     Section 3.3 Indemnification; Increased Costs.

          (a) Borrower agrees to indemnify Agent and each Lender on demand for
any and all additional costs, expenses, or damages incurred by Agent or such
Lender, directly or indirectly, arising out of the issuance of any Letter of
Credit or the purchase of any Letter of Credit Risk Participation, including,
without limitation, any costs of maintaining reserves in respect thereof and any
premium rates imposed by the Federal Deposit Insurance Corporation in connection
therewith. A certificate as to such additional amounts submitted to Borrower by
Agent or such Lender shall be final, conclusive, and binding, absent manifest
error.

          (b) If at any time after the date hereof the introduction of or any
change in applicable law, rule, or regulation or in the interpretation or the
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance

                                       16

<PAGE>

by Agent or Lender with any requests directed by any such Governmental Authority
(whether or not having the force of law) shall, with respect to any Letter of
Credit or Letter of Credit Risk Participation subject Agent or such Lender to
any Tax or impose, modify, or deem applicable any reserve, special deposit, or
similar requirements against assets of, deposits with or for the account of,
credit extended by Agent or such Lender or shall impose on Agent or such Lender
any other conditions affecting the Letters of Credit or Letter of Credit Risk
Participations and the result of any of the foregoing is to increase the cost to
Agent or such Lender of issuing a Letter of Credit or holding a Letter of Credit
Risk Participation or to reduce the amount of any sum received or receivable by
Agent or such Lender hereunder with respect to the Letters of Credit or Letter
of Credit Risk Participations, then, upon demand by Agent or such Lender,
Borrower shall pay to Agent or such Lender such additional amount or amounts as
will compensate Agent or such Lender for such increased cost or reduction. A
certificate submitted to Borrower by Agent or such Lender setting forth the
basis for the determination of such additional amount or amounts shall be final,
conclusive, and binding, absent manifest error.

          (c) Borrower agrees to indemnify and hold Agent and each Lender (an
"Indemnitee") harmless from and against any and all (a) Taxes (exclusive of
Taxes measured by net income and gross receipts) and other fees payable in
connection with Letters of Credit, Letter of Credit Risk Participations or the
provisions of this Agreement relating thereto, and (b) any and all actions,
claims, damages, losses, liabilities, fines, penalties, costs, and expenses of
every nature, including Attorney Costs, suffered or incurred by the Indemnitee
otherwise arising out of or relating to this Article 3, any Letter of Credit, or
any Letter of Credit Risk Participations; provided, however, said
indemnification shall not apply to the extent that any such action, claim,
damage, loss, liability, fine, penalty, cost, or expense arises out of or is
based solely upon the Indemnitee's willful misconduct or negligence.

     Section 3.4 Payment by Borrower. Borrower agrees to fully reimburse Agent
for all amounts paid by Agent under any Letter of Credit and to pay interest
thereon at the Base Rate from the date Agent makes such payment until the date
of any demand for reimbursement by Agent. Such payment shall be made in
immediately available funds at Agent's Commercial Loan Processing Center not
later than 11:00 a.m. (Seattle time) on the date Borrower is first notified by
Agent that Agent has made payment under the Letter of Credit; provided Agent has
notified Borrower by 9:00 a.m. on such date and provided further, that, if Agent
so elects pursuant to the terms of Section 8.2, following the occurrence of an
Event of Default, the face amount of each Letter of Credit shall become
immediately due and payable. If Borrower shall default in its obligations to
reimburse Agent or make any other payment required hereunder, interest shall
accrue on the unpaid amount thereof at a per annum rate equal to the Default
Rate from the date such amount becomes due and payable until payment in full by
Borrower. Interest on such unpaid amounts shall be calculated on the basis of a
year of 360 days and shall be payable on demand.

     Section 3.5 Cash Collateralize. Upon the request of the Agent, (i) upon a
Default or an Event of Default, (ii) if the Agent has honored any full or
partial drawing request under any Letter of Credit and such drawing has resulted
in a borrowing or (iii) if, as of the date of expiration of any Letter of
Credit, any Letter of Credit may for any reason remain outstanding and partially
or wholly undrawn, in addition to any other remedies the Agent may have pursuant
to this Agreement, any Loan Document or applicable law, Borrower shall
immediately Cash

                                       17

<PAGE>

Collateralize the then outstanding amount of all Letters of Credit (in an amount
equal to such outstanding amount determined as of the date of the Default, Event
of Default, such borrowing or the Letter of Credit expiration date, as the case
may be). For purposes hereof, "Cash Collateralize" means to pledge and deposit
with or deliver to the Agent as collateral for the Letter of Credit obligations,
cash or deposit account balances pursuant to documentation in form and substance
satisfactory to the Agent. The Borrower hereby grants to the Agent for the
benefit of the Lenders and the Agent, a security interest in all such cash,
deposit accounts and all balances therein and all proceeds of the foregoing.
Cash collateral shall be maintained in a blocked, non-interest bearing deposit
account at Bank of America, N.A.

                                    ARTICLE 4
                                   CONDITIONS

     Section 4.1 Conditions to Effectiveness of Agreement. Upon the fulfillment
of all of the following conditions, this Agreement shall be effective as of
April 30, 2003 and the Existing Defaults shall be deemed waived:

          (a) New Loan Documents. An authorized officer of Borrower shall have
properly executed and delivered each New Loan Document to which it is a party,
each in form and substance satisfactory to the Agent and Lenders. An authorized
officer of each Guarantor shall have properly executed and delivered each New
Loan Document to which such Guarantor is a party, each in form and substance
satisfactory to the Agent and Lenders.

          (b) Borrower Authority. Agent shall have received the following, each
in form and substance satisfactory to the Agent: (i) such certificates of
resolutions or other action, incumbency certificates and/or other certificates
of officers of the Borrower as the Agent may require to establish the identities
of and verify the authority and capacity of each officer thereof authorized to
act as an officer in connection with this Agreement, the Notes and the other
Loan Documents to which Borrower is a party; and (ii) such evidence as the Agent
may require to verify that the Borrower is duly incorporated or formed, validly
existing, in good standing and qualified to engage in business in each
jurisdiction in which it is required to be qualified to engage in business,
including certified copies of the articles of incorporation for the Borrower and
a certificate of good standing.

          (c) Guarantor Authority. Agent shall have received the following, each
in form and substance satisfactory to the Agent: (i) such certificates of
resolutions or other action, incumbency certificates and/or other certificates
of officers of each Foreign Guarantor as the Agent may require to establish the
identities of and verify the authority and capacity of each officer thereof
authorized to act as an officer in connection with the Foreign Guaranty and the
other Loan Documents to which such Foreign Guarantor is a party; and (ii) such
evidence as the Agent may require to verify that each Foreign Guarantor is duly
incorporated or formed, validly existing, in good standing and qualified to
engage in business in each jurisdiction in which it is required to be qualified
to engage in business, including certified copies of the articles of
incorporation for such Guarantor and a certificate of good standing; provided
however, evidence of FAC's corporate authority to guaranty shall not be a
condition to effectiveness.

                                       18

<PAGE>

          (d) Opinion of Counsel. Agent shall have received a favorable opinion
of Preston Gates and Ellis, LLP, counsel to the Borrower, addressed to the
Agent, as to such matters concerning the Borrower and the New Loan Documents to
which it is a party, as the Agent may request, substantially in the form
attached as Exhibit F;

          (e) Amended Subordinated Note Purchase Agreement. Agent shall have
received evidence satisfactory to it that the Subordinated Noteholders have
waived all defaults under the Note Purchase Agreement, have amended the
Subordinated Note Purchase Agreement to conform to the payment restrictions in
this Agreement and have consented to this Agreement.

          (f) Payment of Fees. Agent shall have received the fees set forth in
Section 2.9 (a) and (c) and reimbursement for all reasonable expenses,
including, without limitation, Attorney Costs, consultants' fees and all
Lenders' out-of-pocket expenses incurred in connection with the preparation of
this Agreement, the other Loan Documents and the closing of the transactions
contemplated hereby and thereby and required by Agent prior to closing.

          (g) Domestic Guarantor Consent. Agent shall have received the consent
of Domestic Guarantors to this Agreement.

     Section 4.2 Conditions to All Loans and Issuances of Letters of Credit. The
obligation of each Lender to make any Loan hereunder and the obligation of Agent
to issue any Letter of Credit, are subject to fulfillment of the following
conditions:

          (a) Prior Conditions. All of the conditions set forth in Section 4.1
shall have been satisfied.

          (b) Notice of Borrowing. In respect of any Loan, Agent shall have
received the Notice of Borrowing in respect of such Loan; and, in respect of any
Letter of Credit, Agent shall have received from Borrower a request therefor
complying with the requirements of Section 3.2.

          (c) No Default. At the date of the requested Loan or issuance of
requested Letter of Credit, no Default or Event of Default shall have occurred
and be continuing or will have occurred as the result of the making of the Loan
or issuing the Letter of Credit; and the representations and warranties of
Borrower in Article 5 shall be true on and as of such date with the same force
and effect as if made on and as of such date.

          (d) Guarantors. Neither the Agent nor any Lender shall have received
from the Borrower or any Guarantor any notice terminating or purporting to
terminate any Guarantor's obligations under any Loan Document to which it is a
party or claiming that any such Loan Document is not or will in the future not
be fully enforceable against each Guarantor in accordance with their terms.

          (e) Other Information. Agent and each Lender shall have received such
other statements, opinions, certificates, documents and information as it may
reasonably request in order to satisfy itself that the foregoing conditions have
been fulfilled.

                                       19

<PAGE>

                                    ARTICLE 5
                         REPRESENTATIONS AND WARRANTIES

     Borrower represents and warrants to Agent and Lenders as follows; provided
however, such representations and warranties relating to the corporate authority
to guaranty shall not apply to FAC until the earlier of (i) the thirtieth (30th)
day after the date hereof and (ii) the date upon which Agent has received
evidence that FAC has the corporate authority to guaranty:

     Section 5.1 Corporate Existence and Power.

          (a) Borrower is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Washington. Borrower is duly
qualified to do business in each other jurisdiction where the nature of its
activities or the ownership of its properties requires such qualification,
except to the extent that failure to be so qualified does not have a material
adverse effect on its business, operations or financial condition. Borrower has
full corporate power, authority and legal right to carry on its business as
presently conducted, to own and operate its properties and assets, and to
execute, deliver and perform the Loan Documents to which it is a party.

          (b) Each Guarantor is a business entity duly formed, validly existing
and in good standing under the laws of the jurisdiction of its formation. Each
Guarantor is duly qualified to do business in each other jurisdiction where the
nature of its activities or the ownership of its properties requires such
qualification, except to the extent that failure to be so qualified does not
have a material adverse effect on its business, operations or financial
condition. Each Guarantor has full corporate power, authority and legal right to
carry on its business as presently conducted, to own and operate its properties
and assets, and to execute, deliver and perform the Loan Documents to which it
is a party.

     Section 5.2 Corporate Authorization.

          (a) The execution, delivery and performance by Borrower of the Loan
Documents to which it is a party and any borrowing thereunder and the request
for the issuance of any Letter of Credit thereunder, have been duly authorized
by all necessary corporate action of Borrower, and do not require any
shareholder approval or the approval or consent of any trustee or the holders of
any Indebtedness of Borrower except such as have been obtained (certified copies
thereof having been delivered to Agent), do not contravene any law, regulation,
rule or order binding on it or its Articles of Incorporation or Bylaws and do
not contravene the provisions of or constitute a default under any indenture,
mortgage, contract or other agreement or instrument to which Borrower is a party
or by which Borrower, or any of its properties, may be bound or affected.

          (b) The execution, delivery and performance by each Guarantor of the
Loan Documents to which it is a party, and the guaranteeing of obligations
thereunder, have been duly authorized by all necessary corporate action of such
Guarantor, and do not require any shareholder approval or the approval or
consent of any trustee or the holders of any Indebtedness of such Guarantor
except such as have been obtained (certified copies thereof having been
delivered to Agent), do not contravene any law, regulation, rule or order
binding on it or its

                                       20

<PAGE>

Articles of Incorporation, Bylaws or other organizing documents, and do not
contravene the provisions of or constitute a default under any indenture,
mortgage, contract or other agreement or instrument to which such Guarantor is a
party or by which such Guarantor, or any of its properties, may be bound or
affected.

     Section 5.3 Government Approvals, Etc. No Government Approval or filing or
registration with any Governmental Authority is required for the making and
performance by Borrower or any Guarantor of the Loan Documents to which it is a
party or in connection with any of the transactions contemplated hereby or
thereby, except such as have been heretofore obtained and are in full force and
effect (certified copies thereof having been delivered to Agent).

     Section 5.4 Binding Obligations, Etc. This Agreement has been duly executed
and delivered by Borrower and constitutes, and the other Loan Documents when
duly executed and delivered by Borrower or any Guarantor will constitute, the
legal, valid and binding obligations of Borrower or Guarantor enforceable
against Borrower or Guarantor in accordance with their respective terms except
as such enforceability may be limited by applicable bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors' rights generally or by the
exercise of judicial discretion in accordance with general principles of equity.

     Section 5.5 Litigation. There are no actions, proceedings, investigations,
or claims against or affecting Borrower or any Guarantor now pending before any
court, arbitrator or Governmental Authority (nor to the knowledge of Borrower
has any thereof been threatened nor does any basis exist therefor) which might
reasonably be determined adversely to Borrower or such Guarantor and which, if
determined adversely, would be likely to have a material adverse effect on the
financial condition or operations of Borrower or such Guarantor or to impair
Agent's lien on the Collateral or Borrower's or such Guarantor's rights therein,
except as described on Schedule 5.5 hereto.

     Section 5.6 Lien Priority. On the date any Loan or any Letter of Credit is
issued, made or outstanding hereunder, each Loan Document that creates or
perfects a Lien, will constitute a valid and perfected Lien of first priority in
and to all the Collateral and will be enforceable against all third parties in
all jurisdictions as security for all obligations which such Loan Document
purports to secure.

     Section 5.7 Financial Condition. The consolidated balance sheet of Borrower
and its Subsidiaries as of April 30, 2003, and the related statements of income
and retained earnings of Borrower and its Subsidiaries for the fiscal year then
ended, copies of which have been furnished to Lenders, fairly present the
consolidated financial condition of Borrower and its Subsidiaries as at such
date, including all material contingent liabilities, and the consolidated
results of operations of Borrower for the period then ended, all in accordance
with GAAP. Neither Borrower nor its Subsidiaries had on such date any material
contingent liabilities, unusual forward or long-term commitments or unrealized
or anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided for in that balance sheet and in the notes to those
financial statements and since that date there has been no material adverse
change in the financial condition or operations of Borrower or its Subsidiaries.

                                       21

<PAGE>

     Section 5.8 Title and Liens. Borrower has good and marketable title to each
of the properties and assets reflected in its balance sheet referred to in
Section 5.7 hereof (except such as have been since sold or otherwise disposed of
in the ordinary course of business). No assets or revenues of Borrower are
subject to any Lien except as permitted by this Agreement. All properties of
Borrower and its use thereof comply in all material respects with applicable
zoning and use restrictions and with applicable laws and regulations relating to
the environment.

     Section 5.9 Taxes. Borrower and each Subsidiary has filed all tax returns
and reports required of it, has paid all Taxes which are shown to be due and
payable on such returns and reports, and has provided adequate reserves for
payment of any Tax whose payment is being contested. The charges, accruals and
reserves on the books of Borrower or Subsidiary in respect of Taxes for all
fiscal periods to date are accurate in all material respects and there are no
material questions or disputes between Borrower or any Subsidiary and any
Governmental Authority with respect to any Taxes except as disclosed in the
balance sheet referred to in Section 5.7 or otherwise disclosed to Agent in
writing prior to the date of this Agreement.

     Section 5.10 Laws, Orders, Other Agreements. Neither Borrower nor any of
its Subsidiaries is in violation of or subject to any contingent liability on
account of any laws, statutes, rules, regulations and orders of any Governmental
Authority. Neither Borrower or any of its Subsidiaries is in material breach of
or default under any material agreement to which it is a party or which is
binding on it or any of its assets.

     Section 5.11 Federal Reserve Regulations. Borrower is not engaged
principally or as one of its important activities in the business of extending
credit for the purpose of purchasing or carrying any margin stock (within the
meaning of Federal Reserve Regulation U), and no part of the proceeds of any
Loan or Letter of Credit will be used to purchase or carry any such margin stock
or to extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any other purpose that violates the applicable provisions of
any Federal Reserve Regulation. Borrower will furnish to any Lender on request a
statement conforming with the requirements of Regulation U.

     Section 5.12 ERISA.

          (a) The present value of all benefits vested under all Pension Plans
did not, as of the most recent valuation date of such Pension Plans, exceed the
value of the assets of the Pension Plans allocable to such vested benefits by an
amount which would represent a potential material liability of Borrower or
affect materially the ability of Borrower to perform this Agreement or the other
Loan Documents.

          (b) No Plan or trust created thereunder, or any trustee or
administrator thereof, has engaged in a "prohibited transaction" (as such term
is defined in Section 406 or Section 2003(a) of ERISA) which could subject such
Plan or any other Plan, any trust created thereunder, or any trustee or
administrator thereof, or any party dealing with any Plan or any such trust to
any material tax or penalty on prohibited transactions imposed by Section 502 or
Section 2003(a) of ERISA.

                                       22

<PAGE>

          (c) No Pension Plan or trust has been terminated, and there have been
no "reportable events" as that term is defined in Section 4043 of ERISA since
the effective date of ERISA.

          (d) No Pension Plan or trust created thereunder has incurred any
"accumulated funding deficiency" (as such term is defined in Section 302 of
ERISA) whether or not waived, since the effective date of ERISA.

          (e) The required allocations and contributions to Pension Plans will
not violate Section 415 of the Code in any material respect.

          (f) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the United States Internal Revenue Service
("IRS") or an application for such letter is currently being processed by the
IRS with respect thereto and, to the best knowledge of the Borrower, nothing has
occurred which would prevent, or cause the loss of, such qualification. The
Borrower and each ERISA Affiliate have made all required contributions to each
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. There are no pending or, to the best
knowledge of the Borrower, threatened claims, actions or lawsuits, or action by
any Governmental Authority, with respect to any Plan that could reasonably be
expected to have a Material Adverse Effect.

     Section 5.13 Security Offerings. Neither Borrower nor anyone acting on its
behalf has directly or indirectly offered any Note or similar instrument or
security for sale to any person or solicited from any person any offer to buy
any such instrument or security or approached or negotiated with any person
concerning any such instrument or security in any manner which would violate any
applicable state or federal securities laws, including without limitation, the
Securities Act of 1933, as amended.

     Section 5.14 Investment Company; Public Utility Holding Company. Borrower
is not (a) an "investment company" or a company "controlled" by an investment
company within the meaning of the Investment Company Act of 1940, as amended; or
(b) a "holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of either a "holding company" or a "subsidiary company" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.

     Section 5.15 Environmental Compliance. The Borrower and its Subsidiaries
conduct in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof, Borrower has reasonably concluded that
such Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

     Section 5.16 Insurance. The properties of the Borrower and its Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Borrower,

                                       23

<PAGE>

in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses owing similar
properties in localities where the Borrower or the applicable Subsidiary
operates.

     Section 5.17 Disclosure. The Borrower has disclosed to the Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which
it or any of its Subsidiaries is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. No report, financial statement, certificate or
other information furnished (whether in writing or by e-mail) by or on behalf of
Borrower or any Guarantor to the Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or any
other Loan Document or delivered hereunder or thereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of facts or omits to state any material fact necessary to make the
statements therein, in light of the circumstance in which they are made, not
misleading; provided that, with respect to projected financial information, the
Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.

     Section 5.18 Intellectual Property, Licenses, Etc. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights that are reasonably necessary for the
operation of their respective businesses, without conflict with the rights of
any other Person. To the best knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Borrower or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, which either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

     Section 5.19 Assets of Foreign Guarantors. The assets listed on Schedule
5.19 constitute all of the accounts receivable, inventory, equipment and other
fixed assets and registered copyrights, trademarks and patents owned, used, or
held in connection with the Foreign Guarantors. The Foreign Guarantors have good
and marketable title to each asset and no asset is subject to any Lien, except
as permitted by this Agreement.

     Section 5.20 Representations as a Whole. This Agreement, the other Loan
Documents, the financial statements referred to in Section 5.7, and all other
instruments, documents, certificates and statements furnished to Agent and
Lenders by Borrower, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements contained herein or therein not misleading. Without limiting the
foregoing, each of the representations and warranties made by Borrower in the
other Loan Documents is true and correct on and as of the date when made, as of
the date hereof, and on and as of each date this representation is deemed made
hereunder with the same force and effect as if made on and as of such dates.

                                       24

<PAGE>

                                   ARTICLE 6
                              AFFIRMATIVE COVENANTS

     So long as Agent or any Lender shall have any Commitment hereunder or there
shall be any outstanding Letters of Credit and until payment in full of each
Loan and performance of all other obligations of Borrower under this Agreement
and the other Loan Documents, Borrower agrees to do all of the following unless
Agent shall otherwise consent in writing.

     Section 6.1 Use of Proceeds. The proceeds of the Loans and the Letters of
Credit (the "Proceeds") will be used only for working capital or other general
corporate purposes. Notwithstanding the foregoing, the Proceeds shall not be
used for either (i) the payment of One Million Five Hundred Thousand Dollars
($1,500,000) to the Lenders pursuant to Section 2.4(d) or (ii) the payment of
One Million ($1,000,000) to the Subordinated Noteholders pursuant to Section
7.15(i).

     Section 6.2 Preservation of Corporate Existence, Etc. Borrower will, and
will cause the Subsidiaries to, preserve and maintain their corporate existence,
rights, franchises and privileges in the jurisdictions of their incorporation
and will, and will cause the Subsidiaries to, qualify and remain qualified as
foreign corporations in each jurisdiction where qualification is necessary or
advisable in view of their business and operations or the ownership of their
properties.

     Section 6.3 Visitation Rights. At any reasonable time, and from time to
time, Borrower will, and will cause each Subsidiary to, permit Agent and Lenders
to examine and make copies of and abstracts from the records and books of
account of and to visit the properties of Borrower and to discuss the affairs,
finances and accounts of Borrower with any of its officers or directors.

     Section 6.4 Keeping of Books and Records. Borrower will keep, and cause
each Subsidiary to keep, adequate records and books of account in which complete
entries will be made, in accordance with GAAP, reflecting all financial
transactions of Borrower or Subsidiary.

     Section 6.5 Maintenance of Property, Etc. Borrower will maintain and
preserve and will cause each Subsidiary to maintain and preserve all of their
respective properties in reasonably good working order and condition, ordinary
wear and tear excepted, and will from time to time make all needed repairs,
renewals and replacements so that the efficiency of such properties shall be
fully maintained and preserved.

     Section 6.6 Compliance with Laws, Etc. Borrower will comply and will cause
each Subsidiary to comply in all material respects with all laws, regulations,
rules, and orders of Governmental Authorities applicable to Borrower or any
Subsidiary or to their respective operations or property, except any thereof
whose validity is being contested in good faith by appropriate proceedings upon
stay of execution of the enforcement thereof.

     Section 6.7 Other Obligations. Borrower will pay and discharge and cause
each Subsidiary to pay and discharge before the same shall become delinquent all
material Indebtedness, Taxes and other obligations for which Borrower or any
Subsidiary is liable or to which their income or property is subject and all
claims for labor and materials or supplies

                                       25

<PAGE>

which, if unpaid, might become by law a Lien upon assets of Borrower or any
Subsidiary, except any thereof whose validity or amount is being contested in
good faith by Borrower or the Subsidiary in appropriate proceedings with
provision having been made to the satisfaction of Agent for the payment thereof
in the event the contest is determined adversely to Borrower or such Subsidiary.
In the event any charge is being contested by Borrower or its Subsidiaries as
allowed above, Borrower or its Subsidiaries shall establish adequate reserves
against possible liability therefor.

     Section 6.8 Insurance. Without limitation on the insurance required by the
Loan Documents to be maintained on the Collateral, Borrower will keep in force
and will cause each Subsidiary to keep in force upon all of their respective
properties and operations policies of insurance carried with responsible
companies in such amounts and covering all such risks as shall be customary in
the industry and reasonably satisfactory to Agent. Borrower will on request
furnish to Agent certificates of insurance or copies of policies evidencing such
coverage.

     Section 6.9 Financial Information. Borrower will deliver to Agent in
sufficient copies for distribution to Agent and each Lender:

          (a) Annual Audited Financial Statements. As soon as available and in
any event within ninety (90) days after the end of each fiscal year of Borrower,
the consolidated and consolidating balance sheet of Borrower and its
Subsidiaries as of the end of such fiscal year and the related consolidated and
consolidating statements of income and the consolidated statement of retained
earnings and statement of cash flows of Borrower and its Subsidiaries for such
year, accompanied by (i) the audit report thereon by independent certified
public accountants selected by Borrower and reasonably satisfactory to Agent
(which reports shall be prepared in accordance with GAAP and shall not be
qualified by reason of restricted or limited examination of any material portion
of the records of Borrower or any Subsidiary and shall contain no disclaimer of
opinion or adverse opinion except such as Agent in its sole discretion
determines to be immaterial) and (ii) an Officer's Certificate of Borrower
certifying that as of the close of such fiscal year no Event of Default or
Default had occurred and was continuing;

          (b) Quarterly Unaudited Financial Statements. As soon as available and
in any event within forty-five (45) days after the end of each of the first
three fiscal quarters of Borrower, the unaudited consolidated and consolidating
balance sheet of Borrower and its Subsidiaries as of the end of such fiscal
quarter and the unaudited consolidated and consolidating statement of income and
consolidated statement of cash flows of Borrower and its Subsidiaries for the
fiscal year to the end of such fiscal quarter, unless the same has been provided
in the form of Borrower's Form 10Q; accompanied by an Officer's Certificate of
Borrower certifying that (i) reports have been prepared in accordance with GAAP
consistently applied and results of operation of Borrower and its Subsidiaries
as at the end of and for such fiscal quarter and that since the previous fiscal
year-end report referred to in Section 6.9(a) there has been no material adverse
change in the financial condition of Borrower or in the financial condition of
any of its Subsidiaries and that (ii) as of the close of such fiscal quarter no
Event of Default or Default had occurred and was continuing;

                                       26

<PAGE>

          (c) Annual Financial Projections. As soon as available, but not later
than thirty (30) days before the beginning of each fiscal year, a copy of
Borrower's annual financial projections;

          (d) Accounts Receivable Summary. As soon as available, but not later
than forty-five (45) days after the end of each fiscal quarter an accounts
receivable aging summary;

          (e) SEC Filings. Promptly, copies of all financial statements and
reports that Borrower sends to its shareholders, and copies of all financial
statements and regular, periodical or special reports (including Forms 10K, 10Q
and 8K) that Borrower or any Subsidiary may make to, or file with, the
Securities and Exchange Commission;

          (f) Compliance Certificates. Within ninety (90) days after the close
of each fiscal year of Borrower and within forty-five (45) days after the close
of each of Borrower's fiscal quarters (other than the fourth fiscal quarter), an
Officer's Certificate signed by the chief financial officer of Borrower stating
that to the best of the signer's knowledge and belief after due inquiry no
Default or Event of Default had occurred and was continuing and setting forth
calculations evidencing compliance with Section 6.12 and 6.13 hereof
substantially in the form attached as Exhibit E hereto; provided, however that
as soon as possible, but not later than fifteen (15) days after the end of
March, 2004, and fifteen (15) days after every month thereafter, Borrower shall
provide such Officer's Certificate;

          (g) Monthly Reporting. As soon as available and in any event within
fifteen (15) days after the end of each month, monthly updates of (i)
consolidated revenues (excluding percentage of completion revenues which are
calculated only at quarter-end), (ii) consolidated gross margins and operating
income (excluding revenues and expenses associated with percentage of completion
sales which are calculated only at quarter-end), (iii) consolidated domestic and
consolidated foreign balances for, in each case, cash accounts receivable,
inventory and accounts payable (excluding unbilled revenues which are calculated
only at quarter-end), (iv) summary of domestic consolidated customer deposits
and other prepayments, (v) 13-week rolling cash flow forecast, and (vi)
month-end cash balances;

          (h) Monthly Comparison Report. As soon as available and in any event
within thirty (30) days after the end of each month, a comparison of the
Borrower's consolidated financial statement to the financial projection for that
month; and

          (i) Other. All other statements, reports and other information as
Agent or any Lender may reasonably request concerning the Collateral or the
financial condition and business affairs of Borrower.

Borrower agrees to segregate all new product development costs in each financial
projection and each financial statement provided pursuant to this Section 6.9 to
facilitate tracking of such costs.

     Section 6.10 Notification. Promptly after learning thereof, Borrower shall
notify Agent of (a) any action, proceeding, investigation or claim against or
affecting Borrower or any Subsidiaries instituted before any court, arbitrator
or Governmental Authority or, to Borrower's knowledge, threatened to be
instituted, which might reasonably be determined adversely to Borrower and
which, if determined adversely, would be likely to have a Material Adverse
Effect

                                       27

<PAGE>

on the financial condition or operations of Borrower, or to impair Agent's or
Lenders' lien on Collateral or Borrower's rights therein, or to result in a
judgment or order against Borrower for more than $500,000 in excess of insurance
coverage or, when combined with all other pending or threatened claims, more
than $500,000 in excess of insurance coverage; (b) any substantial dispute
between Borrower or any Subsidiaries and any Governmental Authority; (c) any
labor controversy which has resulted in or, to Borrower's knowledge, threatens
to result in a strike which would materially affect the business operations of
Borrower or any Subsidiary; (d) if Borrower or any member of the Controlled
Group gives or is required to give notice to the PBGC of any "reportable event"
(as defined in subsections (b)(1),(2),(5) or (6) of Section 4043 of ERISA) with
respect to any Plan (or the Internal Revenue Service gives notice to the PBGC of
any "reportable event" as defined in subsection (c)(2) of Section 4043 of ERISA
and Borrower obtains knowledge thereof) which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (e) the occurrence of any Event of Default or
Default. In the case of the occurrence of an Event of Default or Default,
Borrower will deliver to Agent an Officer's Certificate specifying the nature
thereof, the period of existence thereof, and what action Borrower proposes to
take with respect thereto; (f) of any matter that has resulted or could
reasonably be expected to result in a Material Adverse Effect, including (i)
breach or non-performance of, or any default under, a Contractual Obligation of
the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws; and (g) of any material change in
the accounting policies or financial reporting practices by the Borrower or any
Subsidiary.

     Section 6.11 Additional Payments; Additional Acts. From time to time,
Borrower will (a) pay or reimburse Agent and Lenders on request for all Taxes
(other than Taxes imposed on the net or gross income of Agent or Lenders)
imposed on any Loan Document or payment and for all reasonable expenses,
including Attorney Costs, incurred by Agent or any Lender in connection with the
preparation of the Loan Documents or the making or administration of the Loans,
or the issuance of any Letter of Credit; (b) pay or reimburse Agent and any
Lender for all expenses, including legal fees, incurred by Agent or any Lender
in connection with the enforcement by judicial proceedings or otherwise of any
of the rights of Agent or any Lender under the Loan Documents (including the
enforcement or protection of Agent's or any Lender's rights in any bankruptcy or
any insolvency proceeding); (c) obtain and promptly furnish to Agent evidence of
all such Government Approvals as may be required to enable Borrower to comply
with its obligations under the Loan Documents and to continue in business as
conducted without material interruption or interference; and (d) execute and
deliver or authorize all such instruments (such as Uniform Commercial Code
continuation statements) and perform all such other acts as Agent or any Lender
may reasonably request to carry out the transactions contemplated by the Loan
Documents and to maintain the continuous perfection and priority of Agent's lien
on all Collateral.

     Section 6.12 EBITDA. As of the end of each period indicated below, Borrower
shall maintain, on a consolidated and domestic (U.S.) basis, an EBITDA of at
least (or in the case of

                                       28

<PAGE>

(losses), not to exceed) the amount set opposite such period, except as
otherwise provided in the Restructure Agreement:

          (a) Quarterly Basis.

          For fiscal quarter ending:   Consolidated      Domestic
          --------------------------   ------------    ------------
          July 31, 2003                 ($4,728,000)    ($4,073,000)
          October 31, 2003                ($901,000)    ($1,052,000)
          January 31, 2004             $    963,000       ($864,000)
          April 30, 2004               $  3,484,000    $     61,000
          July 31, 2004                $    784,000    $     61,000

          (b) Cumulative Basis.

          Period from May 1, 2003 to:   Consolidated    Domestic
          ---------------------------   ------------   -----------
          July 31, 2003                  ($4,728,000)  ($4,073,000)
          October 31, 2003               ($5,630,000)  ($5,125,000)
          January 31, 2004               ($3,166,000)  ($4,489,000)
          April 30, 2004                $  2,317,000   ($2,428,000)
          July 31, 2004                 $  5,101,000     ($367,000)

     Section 6.13 Minimum Collateral Requirements. As of each date indicated
below, Borrower shall maintain domestic (U.S.) accounts receivable and inventory
which value equals the amount set opposite such date, except as otherwise
provided in the Restructure Agreement:

          Measurement Date
          ----------------
          July 31, 2003                           $31,400,000
          October 31, 2003                        $35,200,000
          January 31, 2004                        $29,200,000
          March 31, 2004                          $24,900,000
          April 30, 2004 and as the last day of
          every month thereafter                  $24,800,000

                                       29

<PAGE>

provided, however, if Borrower's actual collateral value is below such amount,
effective on the Business Day following the date the Agent receives the
collateral value pursuant to the financial reports in Section 6.9, the Total
Revolving Commitment shall be permanently reduced by the difference between the
covenant level and the actual collateral value (the "Collateral Differential")
pursuant to Section 2.1(a).

     Section 6.14 Loan Documents from Domestic Subsidiaries. After any Person
becomes a Domestic Subsidiary of Borrower, other than those Subsidiaries listed
on Schedule 6.14, and unless Agent and Lenders provide prior written consent to
the contrary, such Domestic Subsidiary shall execute and deliver to Agent,
promptly upon Agent's request: (a) a supplement to the Loan Documents to which
Domestic Guarantors are parties, unconditionally guarantying Borrower's
obligations under the Loan Documents, and granting Agent for its benefit and the
ratable benefit of Lenders, a first priority and exclusive security interest in
all personal property of such Domestic Subsidiary, (b) a copy of a resolution
adopted by the Board of Directors of such Domestic Subsidiary authorizing the
execution, delivery, and performance of the Loan Documents, and (c) such other
documents and agreements as Agent may reasonably request. All of the foregoing
documents shall be in form and substance satisfactory to Agent. Each such
Domestic Subsidiary shall be considered a Guarantor.

     Section 6.15 Update of Collateral. From time to time, Agent may request
that Borrower supplement, or cause Guarantor to supplement, the Loan Documents
with the following information: (i) any new patent, patent applications,
trademarks or trademark applications acquired by Borrower, or Guarantor, after
the date hereof; and/or (ii) any copyrights in which Borrower or Guarantor then
has any interest. Borrower shall, and shall cause Guarantor to, promptly and
fully comply with any such request and, if requested by Agent, Borrower shall,
and shall cause Guarantor to sign such new security agreements or documents, and
shall take such other actions, as Agent may reasonably request to create and
perfect a security interest in favor of Agent and to establish and ensure the
first priority of such security interest.

     Section 6.16 Security Interest in Foreign Guarantor Collateral. Borrower
shall execute and deliver, and shall cause Foreign Guarantors to execute and
deliver, to Agent any documents and instruments and take all such action as
Agent may from time to time request to perfect, preserve or legitimize Agent's
security interest in the assets of the Foreign Guarantors, now owned or
hereafter acquired, including without limitation, security agreements, pledge
agreements, other collateral agreements, financing statements (or other notice
filings), patents, patent applications, trademark and trademark applications
registered in the United States and in any foreign country.

     Section 6.17 Deposit Accounts. Borrower shall promptly notify Agent of any
deposit accounts, certificate of deposit accounts or securities accounts opened
by Borrower or any Guarantor for which a control agreement has not been executed
and delivered to Agent. Upon Agent's request, Borrower shall, and shall cause
each Guarantor to, promptly execute and deliver to Agent a deposit account
control agreement in form and substance acceptable to Agent and shall cause the
bank or securities intermediary at which such account is held to promptly
execute and deliver to Agent such control agreement.

                                       30

<PAGE>

     Section 6.18 Lease and Landlord Consents. Borrower shall, and shall cause
each Guarantor to, promptly notify Agent of any lease agreement, lease amendment
or lease extension agreement entered into after August 23, 2002 by Borrower or
such Guarantor. At Agent's request, Borrower shall and shall cause such
Guarantor to promptly execute and deliver to Agent a leasehold deed of trust,
security agreement and fixture filing in form and substance acceptable to Agent
and shall cause the landlord party to the lease to promptly execute and deliver
to Agent a landlord consent in form and substance acceptable to Agent.

     Section 6.19 Financial Restructuring. On or before the following dates,
Borrower shall deliver the following to Agent:

          (a) September 30, 2003: a certified copy of the resolution or
unanimous consent of Borrower's board of directors detailing Borrower's
refinancing strategy for the Obligations hereunder;

          (b) October 31, 2003: list of qualified financial institutions chosen
by Borrower for such refinancing; and

          (c) November 30, 2003: memorandum concerning Borrower's long term
business plan and proposed terms for refinancing.

     Section 6.20 Additional Goals. The Borrower will take all reasonable
efforts to achieve the following goals towards implementing monthly financial
reporting on or before the following dates:

          (a) August 31, 2003: Hire a Chief Financial Officer for Borrower;

          (b) September 30, 2003: Convert Flow Japan Corporation to J.D. Edwards
Financial System;

          (c) August 1, 2003: Initiate the conversion of Flow Robotics to J.D.
Edwards Financial System;

          (d) November 30, 2003: Complete the conversion of Flow Robotics to
J.D. Edwards Financial System;

          (e) February 28, 2004: Convert FAC to J.D. Edwards Financial System;

          (f) February 28, 2004: Adopt a uniform chart of accounts across all
Subsidiaries;

          (g) March 31, 2004: Execute monthly close on J.D. Edwards Financial
System for all Subsidiaries except for CIS Acquisition Corp. and Flow South
America;

          (h) March 31, 2004: Within 15 days of month's end, provide Agent with
consolidated and consolidating monthly financial reports for Borrower and all
Subsidiaries, including EBITDA calculations on a monthly basis going forward;
and

                                       31

<PAGE>

          (i) April 30, 2004: Execute quarterly close on J.D. Edwards Financial
System for all Subsidiaries except for CIS Acquisition Corp. and Flow South
America;

                                    ARTICLE 7
                               NEGATIVE COVENANTS

     So long as Agent or any Lender shall have any Commitment hereunder or there
shall be any outstanding Letters of Credit and until payment in full of each
Loan and performance of all other obligations of Borrower under this Agreement
and the other Loan Documents, Borrower agrees that it will not do any of the
following unless Agent shall otherwise consent in writing, such consent not to
be unreasonably withheld.

     Section 7.1 Dividends, Purchase of Stock, Etc. Borrower shall not, and
shall cause each Subsidiary to not, (a) declare or pay any dividend (except
dividends payable in capital stock) on any shares of any class of its capital
stock or (b) apply any assets to the redemption or other retirement of, or set
aside any sum for the payment of any dividends on or for the purchase,
redemption or other retirement of, or make any other distribution by reduction
of capital or otherwise in respect of, shares of any class of capital stock of
Borrower; provided, however, that Flow Autoclave Corporation, which is 50% owned
by Borrower, is excluded from this restriction until the date on which Borrower
owns more than 50% of such company; and provided further dividends from Foreign
Subsidiaries to Borrower for the purposes of the payment to Lenders pursuant to
Section 2.4(d) and the payment to Subordinated Noteholders pursuant to Section
7.15(i) are hereby excluded from this restriction.

     Section 7.2 Liquidation, Merger, Sale of Assets. Neither Borrower nor any
Guarantor shall liquidate, dissolve or enter into any consolidation, joint
venture, partnership or other combination or sell, lease, or dispose of
(including transfers to any Subsidiary that has not executed a guaranty and
security agreement pursuant to Section 6.14 or is not a Foreign Guarantor) all
or any substantial portion of its business or assets or of any Collateral
(excepting sales of goods in the ordinary course of business). Notwithstanding
the foregoing, Borrower may proceed with the Restructure Event pursuant to the
Restructure Agreement. Neither Borrower nor any Guarantor shall merge with any
other person.

     Section 7.3 Indebtedness. Borrower shall not nor shall it allow any
Guarantor to create, incur or become liable for any Indebtedness except (a) the
Loans and Indebtedness hereunder in respect of the Letters of Credit, (b)
existing Indebtedness reflected on the balance sheets referred to in Section
5.7, (c) current accounts payable or accrued or other current liabilities
incurred by Borrower or Guarantor in the ordinary course of business, (d)
indebtedness for the deferred purchase price, or for obligations under leases,
of real and personal property used by Borrower or Guarantor in its business, (e)
the Subordinated Notes, the principal of which when taken together does not
exceed, in the aggregate, at any one time outstanding, Thirty-Five Million
Dollars ($35,000,000), plus any capitalized interest thereto, and (f)
Indebtedness to Foreign Subsidiaries pursuant to Section 7.12(b).

     Section 7.4 Guaranties, Etc. Except for the Domestic Guaranty, the Foreign
Guaranty, the fully subordinated guaranties delivered pursuant to Section 9.10
of the Subordinated Note Purchase Agreement or as set forth on Schedule 10.5 of
the Subordinated

                                       32

<PAGE>

Note Purchase Agreement, neither Borrower nor any Guarantor shall assume,
guaranty, endorse or otherwise become directly or contingently liable for, or
obligated to purchase, pay or provide funds for payment of, any obligation or
Indebtedness of any other person, other than by endorsement of negotiable
instruments for deposit or collection or by similar transactions in the ordinary
course of business.

     Section 7.5 Liens. Neither Borrower nor any Guarantor shall create, assume
or suffer to exist any Lien except (a) liens pursuant to the Loan Documents, (b)
existing Liens reflected in the balance sheet referred to in Section 5.7, (c)
Liens described on Schedule 7.5 hereto, and (d) the Junior Security Interest (as
defined in the Intercreditor Agreement); provided, however, such Junior Security
Interest shall be permitted only so long as the Intercreditor Agreement is in
effect.

     Section 7.6 Investments. Borrower shall not make any loan or advance to any
person or purchase or otherwise acquire the capital stock, assets or obligations
of, or any interest in, any person, except (a) commercial bank time deposits
maturing within one year, (b) marketable general obligations of the United
States or a State or marketable obligations fully guaranteed by the United
States, or (c) short-term commercial paper with the highest rating of a
generally recognized rating service.

     Section 7.7 Operations. Borrower shall not engage in any activity which is
substantially different from or unrelated to the present business activities or
products of Borrower.

     Section 7.8 ERISA Compliance. Neither Borrower nor any member of the
Controlled Group nor any Plan will:

          (a) engage in any "prohibited transaction" (as such term is defined in
Section 406 or Section 2003(a) of ERISA) which could result in a material
liability to Borrower;

          (b) incur any "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA) whether or not waived which could result in a
material liability to Borrower;

          (c) terminate any Pension Plan in a manner which could result in a
material liability to Borrower or could result in the imposition of a material
Lien on any property of Borrower or any member of the Controlled Group pursuant
to Section 4068 of ERISA; or

          (d) violate state or federal securities laws applicable to any Plan in
any material respect.

     Section 7.9 Subordinated Notes. Borrower shall maintain no funds on deposit
with, shall not acquire any certificates of deposit or other financial
instruments from, nor hold any Indebtedness owing to Borrower by, any holder of
any Subordinated Note unless such holder shall first have executed a written
agreement in favor of Lenders (in form and substance acceptable to Lenders)
subordinating or waiving its rights to set-off or to assert any "bankers lien."

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     Section 7.10 Capital Expenditures. Borrower shall not, nor shall it allow
any Subsidiary to, make or become legally obligated to make any expenditure in
respect of the purchase or other acquisition of any fixed or capital asset
(excluding normal replacements and maintenance which are properly charged to
current operations), except for capital expenditures in the ordinary course of
business not exceeding, in the aggregate for the Borrower during each time
period set forth below, the amount set forth opposite such time period:

          May 1, 2003 - April 30, 2004 $6,700,000

          May 1, 2004 - August 1, 2004 $800,000

     Section 7.11 New Product Development Expenditures. Borrower shall not, nor
shall it allow any Subsidiary to, fund or become legally obligated to fund any
new product development costs, including without limitation, research,
development and engineering costs, as indicated in financial statements provided
pursuant to Section 6.9, not exceeding, in the aggregate for the Borrower during
each time period set forth below, the amount set forth opposite such time
period:

          May 1, 2003 - April 30, 2004 $10,700,000

          May 1, 2004 - August 1, 2004 $2,700,000

     Section 7.12 Transactions with Affiliates. Borrower shall not, nor shall it
allow any Subsidiary to, directly or indirectly, to transfer cash to Borrower or
any Affiliate of Borrower, except (a) the sale of inventory in the ordinary
course of business in accordance with Borrower's existing intercompany
transactions and transfer pricing policy in effect as the date hereof, (b) cash
transfers from Foreign Subsidiaries to Borrower for the sole and immediate
purpose of satisfying Borrower's obligations under this Agreement, evidenced by
promissory notes at fair market value, (c) payments by Borrower to such Foreign
Subsidiary in accordance with the terms of the promissory notes referred to in
subclause (b), and (d) dividends from Foreign Subsidiaries to Borrower for the
purposes of the payment to Lenders pursuant to Section 2.4(d) and the payment to
Subordinated Noteholders pursuant to Section 7.15(i).

     Section 7.13 Burdensome Agreements. Borrower shall not, nor shall it permit
any Subsidiary to, directly or indirectly, enter into any Contractual Obligation
(other than this Agreement, any Loan Document or the Subordinated Note Purchase
Agreement) (a) that limits the ability of (i) any Subsidiary to make Restricted
Payments to the Borrower or any Guarantor or to otherwise transfer property to
the Borrower or any Guarantor, (ii) of any Subsidiary to guarantee the
Indebtedness of the Borrower or (iii) of the Borrower or any Subsidiary to
create, incur, assume or suffer to exist Liens on the property of such Person;
or (b) that requires the grant of a Lien to secure the obligations of such
Person if a Lien is granted to secure another obligation of such Person.

     Section 7.14 Margin Stock. Borrower shall not, nor shall it permit any
Subsidiary to, use the proceeds of any Loan or Letter of Credit, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System of the United States) or

                                       34

<PAGE>

to extend credit to others for the purpose of purchasing or carrying margin
stock or to refund indebtedness originally incurred for such purpose.

     Section 7.15 Payments to Subordinated Noteholders. Borrower shall make no
payments to Subordinated Noteholders before the full repayment of the
Obligations under any Loan Document, except (i) a $1,000,000 payment derived
solely from repatriated funds in the form of dividends from Foreign Subsidiaries
to Borrower, and (ii) if the Total Revolving Commitment is reduced to
$25,000,000 or less, and no Default has occurred or is occurring, Borrower may
pay an amount not more than $1,000,000 in the aggregate to the Subordinated
Noteholders.

                                    ARTICLE 8
                                EVENTS OF DEFAULT

     Section 8.1 Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" hereunder.

          (a) Payment Default. Borrower shall fail to pay for a period of three
(3) Business Days when due any amount of principal of or interest on any Loan or
any other amount payable by it hereunder including, without limitation, amounts
due in respect of Letters of Credit; or

          (b) Breach of Warranty. Any representation or warranty made (or deemed
made pursuant to Section 2.2 or 3.2 hereof) by Borrower under or in connection
with this Agreement or any Loan Document shall prove to have been incorrect in
any material respect when made; or

          (c) Breach of Certain Covenants. Borrower shall have failed to comply
with Sections 6.2, 6.8, 6.10(e), 6.12, 6.13, any provision of Article 7 of this
Agreement, or, to the extent that it relates to the obtaining and maintaining of
insurance or delivery of evidence of same, any such provision in the Loan
Documents; or

          (d) Breach of Other Covenant. Borrower shall fail to perform or
observe any other material covenant, obligation or term of any Loan Document
executed by it and such failure shall remain unremedied for thirty (30) days
after written notice thereof shall have been given to Borrower by Agent; or

          (e) Cross-default. Borrower shall fail (i) to pay when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) any
amounts owing under any Indebtedness which in the aggregate exceeds One Hundred
Thousand Dollars ($100,000) or any interest or premium thereon and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or (ii) to perform any
term or covenant on its part to be performed under any agreement or instrument
relating to any such Indebtedness and required to be performed and such failure
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such failure to perform is to
accelerate or to permit the acceleration of the maturity of any obligations of
such Indebtedness, or (iii) any amounts owing under such Indebtedness

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<PAGE>

shall be declared to be due and payable or required to be prepaid (other than by
regularly scheduled required prepayment) prior to the stated maturity thereof;
or

          (f) Voluntary Bankruptcy, Etc. Without the prior written consent of
Agent and Lenders, Borrower or any Subsidiary shall: (i) file a petition seeking
relief for itself under Title 11 of the United States Code, as now constituted
or hereafter amended, or file an answer consenting to, admitting the material
allegations of or otherwise not controverting, or fail timely to controvert a
petition filed against it seeking relief under Title 11 of the United State
Code, as now constituted or hereafter amended; or (ii) file such petition or
answer with respect to relief under the provisions of any other now existing or
future applicable bankruptcy, insolvency, or other similar law of the United
States of America or any State thereof or of any other country or jurisdiction
providing for the reorganization, winding-up or liquidation of corporations or
an arrangement, composition, extension or adjustment with creditors; or

          (g) Involuntary Bankruptcy, Etc. An order for relief shall be entered
against Borrower or any Subsidiary under Title 11 of the United States Code, as
now constituted or hereafter amended, which order is not stayed; or upon the
entry of an order, judgment or decree by operation of law or by a court having
jurisdiction in the premises which is not stayed adjudging it a bankrupt or
insolvent under, or ordering relief against it under, or approving as properly
filed a petition seeking relief against it under the provisions of any other now
existing or future applicable bankruptcy, insolvency or other similar law of the
United States of America or any State thereof or of any other country or
jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or any arrangement, composition, extension or adjustment with
creditors; or appointing a receiver, liquidator, assignee, sequestrator, trustee
or custodian of Borrower, or any Subsidiary or of any substantial part of its or
their property, or ordering the reorganization, winding-up or liquidation of its
or their affairs; or upon the expiration of sixty (60) days after the filing of
any involuntary petition against it seeking any of the relief specified in
Section 8.1(f) or this Section 8.1(g) without the petition being dismissed prior
to that time; or

          (h) Insolvency, Etc. Borrower or any Subsidiary shall (i) make a
general assignment for the benefit of its creditors or (ii) consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, or custodian of all or a substantial part of the property of Borrower
or any Subsidiary, as the case may be, or (iii) admit its insolvency or
inability to pay its debts generally as they become due, or (iv) fail generally
to pay its debts as they become due, or (v) take any action (or suffer any
action to be taken by its directors or shareholders) looking to the dissolution
or liquidation of Borrower or any Subsidiary, as the case may be; or

          (i) Judgment. A final judgment or order for the payment of money in
excess of Five Hundred Thousand Dollars ($500,000) in excess of insurance
coverage or which impairs the lien on Collateral or rights of Borrower therein
in any material respect, shall be rendered against Borrower and such judgment or
order shall continue unsatisfied and in effect for a period of ten (10)
consecutive days following entry, or all or substantially all of the assets of
Borrower are attached, seized, subject to writ or warrant or are levied on or
come into the possession or control of a receiver, trustee, custodian or
assignee for the benefit of creditors; or

                                       36

<PAGE>

          (j) Government Approvals. Any Government Approval or registration or
filing with any Governmental Authority now or hereafter required in connection
with the performance by Borrower of its obligations set forth in the Loan
Documents shall be revoked, withdrawn or withheld or shall fail to remain in
full force and effect unless in the reasonable opinion of Agent such revocation,
withdrawal or withholding would not be likely to have a material adverse affect
on the ability of Borrower to perform its obligations under the Loan Documents;
or

          (k) Other Government Action. Borrower is enjoined or restrained or in
any way prevented by order of a court or other Governmental Authority from
conducting all or a substantial part of its business affairs or operations; or

          (l) ERISA. Borrower or any member of the Controlled Group shall fail
to pay when due an amount or amounts aggregating in excess of One Million
Dollars ($1,000,000) which it shall have become liable to pay to the PBGC or to
a Plan under Section 515 of ERISA or Title IV of ERISA; or notice of intent to
terminate a Plan or Plans (other than a multi-employer plan, as defined in
Section 4001(3) of ERISA, having aggregate Unfunded Vested Liabilities in excess
of One Million Dollars ($1,000,000) shall be filed under Title IV of ERISA by
Borrower, any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate any Plan or Plans which could result in any
liability of Borrower in excess of One Million Dollars ($1,000,000); or

          (m) Going Concern Qualification. Borrower receives a "going concern"
qualification from its external auditors in the annual audited financial
statement for the fiscal year ending April 30, 2003; or

          (n) Failure to Issue Financials. Borrower fails to complete and issue
(i) its fiscal year 2003 financial statements on or before July 29, 2003, or
(ii) any other of Borrower's audited financial statement within 90 days of the
end of Borrower's fiscal year; or

          (o) Subordinated Note Purchase Agreement Default. The occurrence of an
"Event of Default" or "Default" under the Subordinated Note Purchase Agreement,
as such terms are defined therein;

          (p) Prepayment of Principal Default. Borrower shall pay any portion of
the principal of the Subordinated Notes before the repayment of all obligations
under the Loan Documents; or

          (q) Guarantor Default; Invalidity of Guaranty. (i) Any Guarantor shall
fail to perform or observe any covenant, obligation or term of any Loan Document
to which it is a party and such failure shall continue unremedied after the
applicable grace period, if any, specified therein; (ii) any misrepresentation
or breach of any warranty by any Guarantor under any Loan Document to which it
is a party shall occur; (iii) any of the events or circumstances referred to in
Section 8.1(e) through 8.1(p) whose occurrence or existence would constitute a
Default or an Event of Default with respect to Borrower shall occur or exist
with respect to any Guarantor; or (iv) any Loan Document shall for any reason be
revoked or invalidated, or

                                       37

<PAGE>

otherwise cease to be in full force and effect (except as expressly permitted
hereunder) in respect of any Guarantor, or any Guarantor or any other Person
shall contest in any manner the validity or enforceability thereof or deny that
it has any further liability or obligation thereunder; or

          (r) Impairment of Security. Any Loan Document that creates and/or
perfects a Lien ceases to be in full force and effect, or is declared by a court
of competent jurisdiction to be null and void, invalid or unenforceable in any
respect; or the Agent shall not have or shall cease to have a valid and
perfected Lien of first priority in the Collateral purported to be covered
thereby (except by any action or inaction attributable solely to Agent); or

          (s) Change of Control. There occurs any Change of Control with respect
to the Borrower; or

          (t) Material Adverse Change. If there shall occur any event that has a
Material Adverse Effect, or that materially increases any Lender's risk that
Borrower will not repay the Loans or other Obligations, or materially impairs
the Collateral or Agent and each Lender's first priority perfected lien on the
Collateral; or

          (u) Invalidity of Loan Documents. Any Loan Document, at any time after
its execution and delivery and for any reason other than as expressly permitted
hereunder or in satisfaction in full of all of the Obligations, ceases to be in
full force and effect; or Borrower, any Guarantor or any Person contests in any
manner the validity or enforceability of any Loan Document; or Borrower or any
Guarantor denies that it has any or further liability or obligation under any
Loan Document, or purports to revoke, terminate or rescind any Loan Document; or

          (v) Restructure Agreement Default. The occurrence of an "Event of
Default" under the Restructure Agreement, as such term is defined therein; or

          (w) Additional Event of Default. Any of the following has not occurred
within sixty (60) days after the date of this Agreement:

               (1) Agent shall have received such evidence as the Agent may
require to verify that FAC is duly incorporated or formed, validly existing, in
good standing and qualified to engage in business in each jurisdiction in which
it is required to be qualified to engage in business, including certified copies
of the articles of incorporation for FAC and a certificate of good standing

               (2) Agent shall have received evidence of Agent's perfected first
priority lien in each Foreign Guarantors' assets as listed on Schedule 5.19, or
in such portion of such property as Agent may request;

               (3) Agent shall have received evidence that notices of Agent's
security interest in all registered patents and trademarks and applications for
patents and trademarks that Agent has taken a security interest in of Borrower,
and each Foreign Guarantor shall have been filed with the applicable
Governmental Authority;

               (4) Agent shall have received such other evidence as it may deem
necessary or appropriate that all documents executed and/or delivered and all
actions taken

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<PAGE>

pursuant to clauses (2) and (3) above have been duly authorized and are legally
effective, binding and enforceable;

               (5) Agent shall have received (i) a deed of trust granting Agent
a security interest in Borrower's leasehold interest on property located at
23500 64th Avenue South, Kent, Washington 98032 and (ii) a landlord consent to
such deed of trust, each in form acceptable to Agent; or

               (6) Borrower and Guarantors shall have provided such additional
information concerning their real and personal property and assets as Agent may
request.

     Section 8.2 Consequences of Default. If an Event of Default described in
Section 8.1(f) or 8.1(g) shall occur and be continuing, then in any such case,
the Total Revolving Commitment shall be immediately terminated and, if any Loans
or Letters of Credit shall have been made or issued, the principal of and
interest on the Loans, the face amounts of all issued and outstanding Letters of
Credit, and all other sums payable by Borrower under the Loan Documents shall
become immediately due and payable all without notice or demand of any kind.

     If any other Event of Default shall occur and be continuing, then in any
such case and at any time thereafter so long as any such Event of Default shall
be continuing, (i) Agent shall at the request, or may with the consent, of
Lenders immediately terminate the Commitment, and, if any Revolving Loans or
Letters of Credit shall have been made or issued, Agent shall at the request, or
may with the consent, of Lenders declare the principal of and the interest on
the Revolving Loans, the face amounts of all issued and outstanding Letters of
Credit, and all other sums payable by Borrower under the Loan Documents with
respect to such Revolving Loans and Letters of Credit immediately due, whereupon
the same shall become immediately due and payable all without protest,
presentment, notice or demand, all of which Borrower expressly waives.

     Regardless of whether Borrower's obligations to repay the Loans and Letters
of Credit have been accelerated pursuant to the preceding sentences, Agent shall
at the request, or may with the consent, of Lenders realize on any or all of the
Collateral by exercising any remedies provided in any Loan Document or otherwise
provided by law. Amounts paid or received hereunder in respect of issued and
outstanding Letters of Credit which exceed amounts paid by Agent under such
Letters of Credit shall be held (and applied) as cash collateral, pursuant to
Section 3.5, to secure the performance of all obligations of Borrower owing to
Agent and Lenders hereunder and under the other Loan Documents. Agent and
Lenders may exercise or pursue any remedy or cause of action permitted by this
Agreement, the Notes, and any other Loan Document or applicable law. The rights
and remedies provided by law, this Agreement, the Notes and the other Loan
Documents are cumulative and non exclusive, and the exercise or partial exercise
of any right, power or remedy hereunder shall not preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.

     While any Event of Default exists (other than during any period of time in
which Agent and Lenders have agreed in writing not to charge the Default Rate
(as defined below)), the Borrower shall pay interest on the principal amount of
all outstanding Obligations hereunder at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent

                                       39

<PAGE>

permitted by applicable laws. The Default Rate shall be in effect on the date of
the occurrence of the Event of the Default and interest shall accrue at the
Default Rate retroactively from such date.

                                    ARTICLE 9
                                      AGENT

     Section 9.1 Appointment and Authorization of Agent. Each Lender hereby
irrevocably appoints, designates and authorizes Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary contained elsewhere herein or in any other Loan Document, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against Agent. Without
limiting the generality of the foregoing sentence, the use of the term "agent"
herein and in the other Loan Documents with reference to Agent is not intended
to connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties. All
benefits and immunities provided to Agent in this Article 9 shall apply to Agent
as issuer of Letters of Credit with respect to any acts taken or omissions
suffered by Agent in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit, and as additionally provided herein with
respect to Agent as issuer of letters of Credit.

     Section 9.2 Delegation of Duties. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. Agent
shall not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.

     Section 9.3 Liability of Agent. No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender for any recital, statement, representation or
warranty made by Borrower or any Guarantor or any officer thereof, contained
herein or in any other Loan Document, or in any certificate, report, statement
or other document referred to or provided for in, or received by Agent under or
in connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of Borrower or any Guarantor or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this

                                       40

<PAGE>

Agreement or any other Loan Document, or to inspect the properties, books or
records of Borrower or any Guarantor or any Affiliate thereof.

     Section 9.4 Reliance by Agent.

          (a) Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, communication, signature, resolution, representation,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, electronic mail message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to Borrower or any Guarantor), independent
accountants and other experts selected by Agent. Agent shall be fully justified
in failing or refusing to take any action under any Loan Document unless it
shall first receive such advice or concurrence of Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by all Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of Lenders (or such greater number of Lenders as may be
expressly required by any instance), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all Lenders.

          (b) For purposes of determining compliance with the conditions
specified in Section 4.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless Agent shall have received
notice from such Lender prior to the date hereof specifying its objection
thereto.

     Section 9.5 Notice of Default. Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default , except with respect to defaults in
the payment of principal, interest and fees required to be paid to Agent for the
account of Lenders, unless Agent shall have received written notice from a
Lender or Borrower referring to this Agreement, describing such Default and
stating that such notice is a "notice of default." Agent will notify Lenders of
its receipt of any such notice. Agent shall take such action with respect to
such Default as may be directed by Lenders in accordance with Article 9;
provided, however, that unless and until Agent has received any such direction,
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable or
in the best interest of Lenders.

     Section 9.6 Credit Decision; Disclosure of Information by Agent. Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by Agent hereafter taken, including any consent
to and acceptance of any assignment or review of the affairs of Borrower or any
Guarantor or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession. Each Lender represents to Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,

                                       41

<PAGE>

property, financial and other condition and creditworthiness of Borrower and
Guarantors and their respective Subsidiaries, and all applicable bank or other
regulatory Laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrower
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrower. Except
for notices, reports and other documents expressly required to be furnished to
Lenders by Agent herein, Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any of Borrower or Guarantors or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.

     Section 9.7 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, Lenders shall indemnify upon demand each
Agent-Related Person (to the extent not reimbursed by or on behalf of Borrower
and without limiting the obligation of Borrower to do so), pro rata, and hold
harmless each Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have been caused primarily by such
Agent-Related Person's own gross negligence or willful misconduct; it being
agreed by all Lenders that no action taken in accordance with the directions of
Lenders shall be deemed to constitute gross negligence or willful misconduct for
purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including Attorney Costs and costs and expenses in connection with the
use of IntraLinks, Inc. or other similar information transmission systems in
connection with this Agreement) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this Section 9.7 shall survive termination of the
Total Revolving Commitment, the payment of all other Obligations and the
resignation of Agent.

     Section 9.8 Agent in its Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrower, each Guarantor and their respective Affiliates as though Bank of
America were not Agent hereunder and without notice to or consent of Lenders.
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding Borrower or any Guarantor or any
Affiliate (including information that may be subject to confidentiality
obligations in favor of Borrower, such Guarantor or such Affiliate) and
acknowledge that Agent shall be under no obligation to provide such information
to them. With respect to its Loans, Bank of America shall have the same rights
and powers

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<PAGE>

under this Agreement as any other Lender and may exercise such rights and powers
as though it were not Agent, and the terms "Lender" and "Lenders" include Bank
of America in its individual capacity.

     Section 9.9 Successor Agent. Agent may resign as Agent upon 30 days'
written notice to Lenders and Borrower; provided that any such resignation by
Bank of America shall also constitute its resignation as Agent in its capacity
of issuer of Letters of Credit. If Agent resigns under this Agreement, Lenders
shall appoint from among Lenders a successor Agent for Lenders, which successor
Agent shall be consented to by Borrower at all times other than during the
existence of a Default (which consent of Borrower shall not be unreasonably
withheld or delayed). If no successor Agent is appointed prior to the effective
date of the resignation of Agent, Agent may appoint, after consulting with
Lenders and Borrower, a successor Agent from among Lenders. Upon the acceptance
of its appointment as successor Agent hereunder, the Person acting as such
successor Agent shall succeed to all the rights, powers and duties of the
retiring Agent (including those in its capacity as issuer of Letters of Credit)
and the term "Agent" shall mean such successor Agent in all such capacities and
the retiring Agent's appointment, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such
retiring Agent or any other Lender, other than the obligation of the successor
Agent to issue letters of credit in substitution for the Letters of Credit, if
any, outstanding at the time of such succession or to make other arrangements
satisfactory to the retiring Agent to effectively assume the obligations of the
retiring Agent with respect to such Letters of Credit. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article 9 and
Sections 11.14 and 11.15 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor Agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and Lenders shall
perform all of the duties of Agent hereunder until such time, if any, as Lenders
appoint a successor agent as provided for above.

     Section 9.10 Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to Borrower or any
Guarantor, Agent (irrespective of whether the principal of any Loan shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether Agent shall have made any demand on Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

          (a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of Lenders and Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Lenders and Agent and their respective agents and counsel and all other amounts
due Lenders and Agent under Sections 3.2(b), 2.09 and 11.14) allowed in such
judicial proceeding; and

          (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;

                                       43

<PAGE>

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Agent and, in the event that Agent shall
consent to the making of such payments directly to Lenders, to pay to Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of Agent and its agents and counsel, and any other amounts due Agent under
Sections 2.09 and 11.14.

     Nothing contained herein shall be deemed to authorize Agent to authorize or
consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize Agent to vote in respect of the
claim of any Lender in any such proceeding.

                                   ARTICLE 10
                      LETTER OF CREDIT RISK PARTICIPATIONS

     Section 10.1 Sale of Risk Participations. Agent agrees to sell to Lenders,
and upon issuance of any Letter of Credit hereunder each Lender shall be deemed
to have unconditionally and irrevocably purchased from Agent, an undivided risk
participation in such Letter of Credit in proportion to such Lender's Pro Rata
Share.

     Section 10.2 Notice to Lenders. Via telephone, telex, or facsimile, Agent
will promptly advise each Lender of each Letter of Credit issued hereunder.
Agent shall not have any duty to ascertain or to inquire as to the accuracy of
the information furnished by Borrower, or accuracy of the representations and
warranties made by Borrower in any request for the issuance of such Letter of
Credit nor shall Agent have any duty to confirm that all conditions precedent to
the issuance of such Letter of Credit have been fully satisfied.

     Section 10.3 Payment Obligations.

          (a) Reimbursements to Agent. In the event Borrower fails to pay any
amount due under Section 3.4 by 12:00 noon (Seattle time) on the date Agent
shall make demand for payment thereof, Lenders shall each, upon receipt of
notice from Agent of such failure, pay to Agent their Pro Rata Share of such
amount, provided, however, if Borrower pays a portion but less than all of the
amount due under Section 3.4, Lenders shall each pay Agent only their respective
Pro Rata Shares of the difference between the amount due under Section 3.4 and
the amount paid by Borrower on account thereof. Each and every payment to be
made by Lenders to Agent under this Section 10.3(a) shall be made by federal
wire transfer in immediately available funds. If any Lender receives notice from
Agent by 1:30 p.m. (Seattle time) on any Business Day of its obligation to make
payments under this subsection, then such Lender shall make such payment no
later than 2:00 p.m. (Seattle time) on the day such notice is received. If any
Lender receives such notice after 1:30 p.m. (Seattle time) on any Business Day,
then such Lender shall make such payment by no later than 1:00 p.m. (Seattle
time) on the next succeeding Business Day. If any Lender fails to make such
payment by the date and time required, its obligation shall bear interest from
and including the date when such payment was due until paid at the per annum
rate equal to the Federal Funds Rate.

                                       44

<PAGE>

          (b) Payments to Lenders. Agent shall immediately remit to Lenders, via
federal wire transfer of funds, such Lender's Pro Rata Share of:

               (1) the letter of credit fee paid by Borrower pursuant to Section
3.2(b) hereof; and

               (2) any amounts (other than fees and expense reimbursements)
received from or for the account of Borrower in respect of any Letter of Credit,
provided, however, Agent shall not remit to any Lender any amounts received from
or for the account of Borrower in respect of a Letter of Credit unless, prior to
Agent's receipt of such funds, such Lender has paid its Pro Rata Share of such
amounts pursuant to Section 10.3(a). In the event Agent is required to refund
any amount which is paid to it or received by it from or for the account of
Borrower, then Lenders agree to repay to Agent their respective Pro Rata Share
of such amount.

          (c) Reimbursements to Lenders. Borrower agrees to reimburse any Lender
for amounts paid by such Lender to Agent pursuant to Section 10.3(a). Any
amounts received from or for the account of Borrower by any Lender in respect of
the aforesaid reimbursement obligation shall reduce Borrower's payment
obligation to Agent under Section 3.4. Any amounts received from or for the
account of Borrower by Agent in satisfaction of its obligations under Section
3.4 shall reduce pro tanto Borrower's reimbursement obligation to Lenders under
this Section 10.3(c).

                                   ARTICLE 11
                                  MISCELLANEOUS

     Section 11.1 No Waiver; Remedies Cumulative. No failure by Agent or any
Lender to exercise, and no delay in exercising, any right, power or remedy under
this Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or remedy under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power, or remedy. The exercise of
any right, power, or remedy shall in no event constitute a cure or waiver of any
Event of Default this Agreement or any other Loan Document or prejudice the
rights of Agent or Lenders in the exercise of any right hereunder or thereunder.
The rights and remedies provided herein and therein are cumulative and not
exclusive of any right or remedy provided by law.

     Section 11.2 Governing Law. This Agreement and the other Loan Documents
shall be governed by and construed in accordance with the laws of the State of
Washington, U.S.A.

     Section 11.3 Mandatory Arbitration.

          (a) At the written request of either all of Lenders or Borrower, any
controversy or claim between Lenders and Borrower, arising from or relating to
this Agreement or any of the other Loan Documents, or arising from an alleged
tort, shall be settled by arbitration in Seattle, Washington. The United States
Arbitration Act shall apply even though this Agreement is otherwise governed by
Washington law. The proceedings shall be administered by the American
Arbitration Association under its commercial rules of arbitration. Any
controversy over whether an issue is arbitrable shall be determined by the
arbitrator(s). Judgment upon the arbitration award may be entered in any court
having jurisdiction over the

                                       45

<PAGE>

parties. The institution and maintenance of an action for judicial relief or
pursuit of an ancillary or provisional remedy shall not constitute a waiver of
the right of either party, including the plaintiff, to submit the controversy or
claim to arbitration if such action for judicial relief is contested. For
purposes of the application of the statute of limitations, laches or other time
bar, the filing of an arbitration pursuant to this subsection is the equivalent
of the filing of a lawsuit, and any claim or controversy which may be arbitrated
under this subsection is subject to any applicable statute of limitations,
laches or other time bar. The arbitrator(s) will have the authority to decide
whether any such claim or controversy is barred by the statute of limitations,
laches or other time bar and, if so, to dismiss the arbitration on that basis.
The parties consent to the joinder of any guarantor, hypothecator, or other
party having an interest relating to the claim or controversy being arbitrated
in any proceedings under this Section.

          (b) No provision of this subsection shall limit the right of Borrower,
Agent or Lenders to exercise self-help remedies such as setoff, foreclosure,
retention or sale of any collateral, or obtaining any ancillary, provisional, or
interim remedies from a court of competent jurisdiction before, after, or during
the pendency of any arbitration proceeding. The exercise of any such remedy does
not waive the right of either party to request arbitration.

     Section 11.4 Consent to Jurisdiction; Waiver of Immunities. Borrower, Agent
and Lenders hereby irrevocably submit to the nonexclusive jurisdiction of any
state or federal court sitting in Seattle, King County, Washington, in any
action or proceeding brought to enforce or otherwise arising out of or relating
to any Loan Document and irrevocably waive to the fullest extent permitted by
law any objection which they may now or hereafter have to the laying of venue in
any such action or proceeding in any such forum, and hereby further irrevocably
waive any claim that any such forum is an inconvenient forum. Borrower agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in any other jurisdiction by suit on the judgment or in any
other manner provided by law. Nothing in this Section 11.4 shall impair the
right of any party to request or demand arbitration under Section 11.3 or the
right of Agent or a Lender or the holder of any Note to bring any action or
proceeding against Borrower or its property in the courts of any other
jurisdiction, and Borrower irrevocably submits to the nonexclusive jurisdiction
of the appropriate courts of the jurisdiction in which Borrower is incorporated
or sitting and any place where property or an office of Borrower is located.

     Section 11.5 Notices. All notices and other communications provided for in
any Loan Document shall be in writing or (unless otherwise specified) by telex,
telefax or cable and shall be mailed (with first class postage prepaid) or sent
or delivered to each party at the address or telefax number set forth under its
name on the signature page hereof, or at such other address as shall be
designated by such party in a written notice to each other party. Except as
otherwise specified all notices sent by mail, if duly given, shall be effective
three (3) Business Days after deposit into the mails, all notices sent by a
nationally recognized overnight courier service, if duly given, shall be
effective one (1) Business Day after delivery to such courier service, and all
other notices and communications if duly given or made shall be effective upon
receipt. Neither Agent nor any Lender shall incur any liability to Borrower for
actions taken in reliance on any telephonic notice referred to in this Agreement
which Agent believes in good faith to have been given by a duly authorized
officer or other person authorized to borrow or give such telephonic notice
hereunder on behalf of Borrower.

                                       46

<PAGE>

     Section 11.6 Assignment and Participations. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective Successors and
assigns, except that Borrower may not assign or otherwise transfer all or any
part of its rights or obligations hereunder without the prior written consent of
Agent and Lenders, and any such assignment or transfer purported to be made
without such consent shall be ineffective. Lenders may at any time assign or
otherwise transfer all or any part of their respective interests under the Loan
Documents (including assignments for security and sales of participations), but
only with the prior written consent of Agent and Lenders, and to the extent of
such assignment, the assignee shall have the same rights and benefits against
Borrower and otherwise under the Loan Documents (including the right of setoff)
as if such assignee were a Lender.

     Section 11.7 Severability. Any provision of this Agreement or any other
Loan Document which is prohibited or unenforceable in any jurisdiction shall as
to such jurisdiction be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.

     Section 11.8 Survival. The representations, warranties and indemnities of
Borrower in favor of Agent and Lenders shall survive indefinitely and, without
limiting the foregoing, shall survive the execution and delivery of this
Agreement and the other Loan Documents, the making of any Loans, the issuance of
any Letters of Credit the expiration of the Commitment and the repayment of all
amounts due under the Loan Documents.

     Section 11.9 Executed in Counterparts. The Loan Documents may be executed
in any number of counterparts and by different parties in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.

     Section 11.10 Entire Agreement; Amendment, Etc. This Agreement together
with the schedules and exhibits hereto comprise the entire agreement of the
parties and may not be amended or modified except by written agreement of
Borrower and Agent executed in conformance with the terms hereof. No provision
of this Agreement may be waived except in writing and then only in the specific
instance and for the specific purpose for which given.

     Section 11.11 Headings. The headings of the various provisions of this
Agreement are for convenience of reference only, do not constitute a part
hereof, and shall not affect the meaning or construction of any provision
hereof.

     Section 11.12 Oral Agreements Not Enforceable.

          ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR
          TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
          UNDER WASHINGTON LAW.

     Section 11.13 Release and Waiver. Borrower and each Guarantor ratifies and
reconfirms the Loan Documents (as amended herein) and all of their obligations
and liabilities

                                       47

<PAGE>

thereunder and hereby waives and releases any and all defenses that any of them
may now have or hereafter acquire with respect to the Loan Documents based on or
otherwise relating to any events or circumstances which occurred or existed on
or prior to the date hereof. Borrower and each Guarantor hereby releases and
forever discharges the Agent, the Lenders, Alvarez, their respective affiliates,
and their respective officers, directors, agents and employees from every claim,
demand and cause of action whatsoever, of every kind and nature, whether
presently known or unknown, suspected or unsuspected, arising or alleged or to
have risen or which shall arise hereafter from any act, omission or condition
which occurred or existed on or prior to the date hereof.

     Section 11.14 Attorney Costs, Expenses and Taxes. The Borrower agrees (a)
to pay or reimburse the Agent and each Lender for all reasonable expenses and
costs incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Loan Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, and (b) to pay or
reimburse the Agent and each Lender for all reasonable expenses and costs
incurred in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any "workout"
or restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs. The foregoing costs and expenses in (a) and (b) shall include all travel,
search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by the Agent
and the cost of independent public accountants, Alvarez and other outside
experts retained by the Agent or any Lender. All amounts due under this Section
11.14 shall be payable within ten Business Days after demand therefor. The
agreements in this Section shall survive the termination of the commitment of
each Lender to extend credit hereunder and repayment of all other Obligations.

     Section 11.15 Indemnification by the Borrower. Whether or not the
transactions contemplated hereby are consummated, the Borrower shall indemnify
and hold harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses and disbursements (including Attorney Costs)
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against any such Indemnitee in any way relating to or arising out
of or in connection with (a) the execution, delivery, enforcement, performance
or administration of any Loan Document or any other agreement, letter or
instrument delivered in connection with the transactions contemplated thereby or
the consummation of the transactions contemplated thereby, (b) any commitment to
extend credit hereunder, Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by the Agent as the Letter of
Credit issuer to honor a demand for payment under a Letter of Credit if the
documents presented in connection with such demand do not strictly comply with
the terms of such Letter of Credit), or (c) any actual or alleged presence or
release of Hazardous Materials on or from any property currently or formerly
owned or operated by the Borrower, any Subsidiary or any Guarantor, or any
Environmental Liability related in any

                                       48

<PAGE>

way to the Borrower, any Subsidiary or any Guarantor, or (d) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory (including
any investigation of, preparation for, or defense of any pending or threatened
claim, investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Agreement, nor shall
any Indemnitee have any liability for any indirect or consequential damages
relating to this Agreement or any other Loan Document or arising out of its
activities in connection herewith or therewith (whether before or after the date
of this Agreement). All amounts due under this Section 11.15 shall be payable
within ten Business Days after demand therefor. The agreements in this Section
shall survive the resignation of the Agent, the replacement of any Lender, the
termination of each Lender's commitment to extend credit hereunder and the
repayment, satisfaction or discharge of all the other Obligations.

     Section 11.16 Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to the Agent or any Lender, or the Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such
set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to the Agent upon demand its applicable share of any
amount so recovered from or repaid by the Agent, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the Federal Funds Rate from time to time in effect.

     Section 11.17 Set-off. In addition to any rights and remedies of the
Lenders provided by law, upon the occurrence and during the continuance of any
Event of Default, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower or any Guarantor, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Guarantor) to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the Borrower or a Guarantor, as applicable, against any and all
Obligations owing to such Lender hereunder or under any other Loan Document, now
or hereafter existing, irrespective of whether or not the Agent or such Lender
shall have made demand under this Agreement or any other Loan Document and
although such Obligations may be contingent or unmatured or denominated in a
currency different from that of the applicable deposit or indebtedness. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by

                                       49

<PAGE>

such Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.

     Section 11.18 Interest Rate Limitations. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable law (the "Maximum Rate"). If the Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the
interest contracted for, charged, or received by the Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

     Section 11.19 Waiver of Right to Trial by Jury. EACH PARTY TO THIS
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY 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 PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.

     Section 11.20 Confidential Information. Each of Agent and Lenders agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process; (d) to any other party to this Agreement;
(e) in connection with the exercise of any remedies hereunder or any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or under any other
Loan Document; (f) subject to an agreement containing provisions substantially
the same as those of this Section, to (i) any assignee of or participant in, or
any prospective assignee of or participant in, any of its rights or obligations
under this Agreement or (ii) any direct or indirect contractual counterparty or
prospective counterparty (or such contractual counterparty's or prospective
counterparty's professional advisor) to any credit derivative transaction
relating to obligations of a Loan Party; (g) with the consent of Borrower; (h)
to the extent such Information

                                       50

<PAGE>

(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to Agent or any Lender on a nonconfidential
basis from a source other than Borrower; or (i) to the National Association of
Insurance Commissioners or any other similar organization. In addition, Agent
and Lenders may disclose the existence of this Agreement and information about
this Agreement to market data collectors, similar service providers to the
lending industry, and service providers to Agent and Lenders in connection with
the administration and management of this Agreement, the other Loan Documents,
the Commitment, and the Letters of Credit. For the purposes of this Section,
"Information" means all information received from Borrower or any Subsidiary
relating to Borrower or any Subsidiary or its business, other than any such
information that is available to Agent or any Lender on a nonconfidential basis
prior to disclosure by Borrower or any Subsidiary; provided that, in the case of
information received from Borrower or any Subsidiary after the date hereof, such
information is clearly identified in writing at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. In addition, Agent may disclose to any agency
or organization that assigns standard identification numbers to loan facilities
such basic information describing the facilities provided hereunder as is
necessary to assign unique identifiers (and, if requested, supply a copy of this
Agreement), it being understood that the Person to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to make available to the public only such Information as such person normally
makes available in the course of its business of assigning identification
numbers. Notwithstanding anything herein to the contrary, "Information" shall
not include, and Agent and each Lender may disclose to any and all Persons,
without limitation of any kind, any information with respect to the "tax
treatment" and "tax structure" (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are
provided to Agent or such Lender relating to such tax treatment and tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of the transaction as well as other information, this sentence shall only apply
to such portions of the document or similar item that relate to the tax
treatment or tax structure of the Loans, Letters of Credit and transactions
contemplated hereby.

                                       51

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or agents thereunto duly authorized as of
the date first above written.

                          BORROWER:   FLOW INTERNATIONAL CORPORATION

                                      ------------------------------------------
                                      Stephen Light, Chief Executive Officer

                                      Address: 23500 64th Avenue South
                                               Kent, WA 98032
                                               Attn: Stephen Light
                                               Chief Executive Officer
                                      Telefax: (253) 813-3311

                          LENDERS:    BANK OF AMERICA, N.A.

                                      ------------------------------------------
                                      Thomas E. Brown, Senior Vice President

                                      Address: WA1-501-29-10
                                               800 Fifth Avenue, Floor 29
                                               Seattle, WA 98104
                                               Attn: Thomas E. Brown
                                               Senior Vice President
                                      Telefax: (206) 358-7834

                                      U.S. BANK NATIONAL ASSOCIATION

                                      ------------------------------------------
                                      Elizabeth C. Hengeveld, Vice President

                                      Address: 111 SW 5th Avenue, Suite 810
                                               P.O. Box 3108
                                               Portland, OR 97208-3108
                                               Attn: Elizabeth C. Hengeveld
                                               Vice President
                                      Telefax: (503) 275-5919

                                       52

<PAGE>

                                      KEYBANK NATIONAL ASSOCIATION

                                      ------------------------------------------
                                      H. Daniel Willetts, Senior Vice President

                                      Address: Asset Recovery Group
                                               3300 East First Avenue, Suite 220

                                               Denver, CO 80206
                                               Attn: H. Daniel Willetts
                                               Senior Vice President
                                      Telefax: (303) 316-2310

                             AGENT:   BANK OF AMERICA, N.A.

                                      ------------------------------------------
                                      Ken Puro, Vice President

                                      Address: Commercial Agency Management
                                               WA1-501-37-20
                                               800 Fifth Avenue, Floor 37
                                               Seattle, WA  98104
                                               Attn:  Ken Puro,
                                               Vice President
                                      Telefax: (206) 358-0971

                                       53

<PAGE>

                               GUARANTORS' CONSENT

     Each undersigned guarantor (each a "Guarantor") is a guarantor of the
indebtedness, liabilities and obligations of Flow International Corporation, a
Washington corporation (the "Borrower") under that certain Amended and Restated
Credit Agreement dated as of December 29, 2000 (as amended from time to time,
the "Amended and Restated Credit Agreement") referred to in the within and
foregoing Second Amended and Restated Credit Agreement (the "Second Amended and
Restated Credit Agreement") and the other Loan Documents described in the Second
Amended and Restated Credit Agreement. Each Guarantor hereby acknowledges that
it has received a copy of the Second Amended and Restated Credit Agreement and
hereby consents to its contents and the other Loan Documents described therein
(notwithstanding that such consent is not required). Each Guarantor hereby
confirms that its guarantee of the obligations of Borrower remains in full force
and effect, and that the obligations of Borrower shall include the obligations
of the Borrower under the Second Amended and Restated Credit Agreement. All
capitalized terms not defined herein have the meanings given in the Second
Amended and Restated Credit Agreement.

     GUARANTORS:                      AVURE TECHNOLOGIES, INC.

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

                                      Name:
                                           -------------------------------------

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

                                      CIS ACQUISITION CORPORATION

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

                                      Name:
                                           -------------------------------------

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

                                      FLOW WATERJET FLORIDA CORPORATION

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

                                      Name:
                                           -------------------------------------

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

                                       54

<PAGE>

                                   SCHEDULE 1

                             EXISTING LOAN DOCUMENTS

     (a)

Amended and Restated Credit Agreement dated December 29, 2000

Amendment Number One to Amended and Restated Credit Agreement dated February 28,
2001

Amendment Number Two to Amended and Restated Credit Agreement dated May 30, 2001

Amendment Number Three to Amended and Restated Credit Agreement dated as of July
31, 2001

Amendment Number Four to Amended and Restated Credit Agreement dated December
13, 2001

Amendment Number Five to Amended and Restated Credit Agreement dated July 26,
2002

Amendment Number Six to Amended and Restated Credit Agreement dated August 23,
2002

Amendment Number Seven to Amended and Restated Credit Agreement dated September
23, 2002

Amendment Number Eight to Amended and Restated Credit Agreement dated October
11, 2002

Amendment Number Nine to Amended and Restated Credit Agreement dated February
11, 2003

Control Agreement between Agent and Bank of America dated December 17, 2002.

Control Agreement between Agent and U.S. Bank dated December 17, 2002

Environmental Indemnity Agreement by and among Borrower, Lenders and Agent dated
August 23, 2002.

Indiana Mortgage executed by Borrower in favor of Agent and Lenders dated August
23, 2002

Intercreditor Agreement between Agent and Subordinated Noteholders dated October
1, 2002

Letters of Credit issued pursuant to the Amended and Restated Credit Agreement

Michigan Leasehold Mortgage dated December 18, 2002.

Second Amended and Restated Notes executed by Borrower in favor of each Lender,
each dated August 23, 2002

Pledge Agreement executed by Borrower in favor of Agent dated as of August 23,
2002

Reimbursement Agreements

Amended and Restated Security  Agreement  executed by Borrower in favor of Agent
dated August 23, 2002.

UCC Financing Statements perfecting Agent's security interest created by the
foregoing documents.

USPTO Notices

Foreign PTO filings

     (b)

Guaranty executed by Domestic Guarantors in favor of Agent and Lenders dated
August 23, 2002

Security Agreement executed by Domestic Guarantors in favor of Agent and Lenders
dated August 23, 2002

Control Agreement between Agent and Bank One N.A dated December 16, 2002

<PAGE>

UCC Financing Statements perfecting Agent's security interest created by the
foregoing documents

                                       56

<PAGE>

                                   SCHEDULE 2

                               NEW LOAN DOCUMENTS

Second Amended and Restated Credit Agreement dated July 28, 2003

Security Agreement executed by Foreign Guarantors in favor of Agent and Lenders
dated July 28, 2003

Guaranty executed by Foreign Guarantors in favor of Agent and Lenders dated July
28, 2003

Third Amended and Restated Notes executed by Borrower in favor of each Lender,
each dated July 28, 2003

Amended and Restated Pledge Agreement executed by Borrower in favor of Agent
dated July 28, 2003.

Restructure Agreement dated July 28, 2003

Reduction Letter dated July 28, 2003

<PAGE>

                                  SCHEDULE 5.5

                                   LITIGATION

Crucible Incident (June 29, 2002)

Robotic Production Technology, Inc. v. Flow International Corporation, U.S.
District Court, Eastern Division of Michigan, Case No. 99-74659.

                                       58

<PAGE>

                                  SCHEDULE 5.19

                            FOREIGN GUARANTOR ASSETS
                                  (By Company)

                                  SCHEDULE 6.14

                                  SUBSIDIARIES

<TABLE>
<CAPTION>
                                                      State or other Jurisdiction of
                    Subsidiary                        Incorporation or Organization
                    ----------                        ------------------------------
<S>                                                       <C>
Avure Technologies AB                                             Sweden

Avure Technologies Incorporated                                 Washington

CEM-FLOW                                                          France

Flow Access BVBA                                                 Belgium

CIS Acquisition Corporation                                      Michigan

Flow Asia Corporation                                            Taiwan

Flow Asia International Corporation                             Mauritius

Flow Autoclave Systems, Inc.                                     Delaware

Flow Automation Systems Corporation                              Ontario

Flow China                                                        China

Flow Europe, GmbH                                                Germany

Foracon Europe Manufacturing GmbH & CO.KG                        Germany

Flow Holdings BVBA                                               Belgium

Flow Holdings GmbH (SAGL) Limited Liability Company            Switzerland

Flow Holdings FPS AB                                             Sweden

Flow Iberica, S.R.L                                               Spain

Flow Italia, S.R.L.                                               Italy

Flow Japan Corporation                                            Japan

Flow Korea                                                        Korea

Flow Pressure Systems Vasteras AB                                 Sweden

Flow Latino                                               Brazil, South America

Flow Surface Prep/Europe, SAGL                                 Switzerland

Flow U.K., Ltd.                                                  England

Flow Waterjet Florida Corporation                                Florida
</TABLE>

                                       59

<PAGE>

<TABLE>
<CAPTION>
                                                      State or other Jurisdiction of
                    Subsidiary                        Incorporation or Organization
                    ----------                        ------------------------------
<S>                                                           <C>
Robotic Simulations Limited                                   United Kingdom
</TABLE>

                                       2

<PAGE>

                                  SCHEDULE 7.5

                                      LIENS

     The following liens, as amended, continued or assigned:

1.   UCC-1 filed on December 8, 1988 with the Washington Department of Licensing
     against Borrower as debtor by U.S. Bank of Washington, N.A., Standard
     Chartered Bank, Bank of America N.T. & S.A. DBA Seafirst Bank, Bank of
     America, N.A., U.S. Bank, N.A. (Seattle), and U.S. Bank, N.A. (Portland) as
     secured parties under Filing No. 883430600 covering all accounts receivable
     including but not limited to instruments, chattel paper, documents and
     general intangibles arising out of the sale or lease of goods, or
     furnishing of services, inventory now or hereafter owned or acquired by
     Borrower, all proceeds and insurance proceeds of the foregoing, all
     guaranties and other security therefore, and all of Borrower's books and
     records relating thereto (including computerized information and all
     software relating thereto) and all contract rights with third parties
     relating to the maintenance of any such books, records and information, UCC
     Continuation filed May 20, 2003 under Filing No. 200317432345.

2.   UCC-1 filed on July 3, 1989 with the Washington Department of Licensing
     against Borrower as debtor by U.S. Bank of Washington, N.A. (Bellevue),
     U.S. Bank of Washington, N.A. (Seattle), U.S. Bank, N.A. (Seattle), Bank of
     America N.T. & S.A. DBA Seafirst Bank, and Bank of America, N.A. as secured
     parties under Filing No. 891840371 covering all accounts receivable,
     chattel paper, documents, instruments, general intangibles and leases and
     leasehold interests, inventory, equipment, intellectual property and all
     proceeds thereof, UCC Continuation filed January 29, 1999 under Filing No.
     990290394.

3.   UCC-1 filed on May 9, 1994 with the Washington Department of Licensing
     against Borrower as debtor by Bank of America N.T. & S.A. DBA Seafirst
     Bank, U.S. Bank, N.A., U.S. Bank of Washington, N.A. (Bellevue), and Bank
     of America, N.A. as secured parties under Filing No. 941290437 covering all
     equipment then owned or thereafter acquired, UCC Continuation filed January
     29, 1999 under Filing No. 990290395.

4.   UCC-1 filed on September 15, 1994 with the Washington Department of
     Licensing against Borrower as debtor by U.S. Bancorp Leasing & Financial as
     secured party under Filing No. 942580397 covering certain leased equipment
     comprised of one new Okuma MC-40VB vertical machining center and related
     controls and attachments described therein subject to that certain Lease
     Agreement dated February 26, 1993; UCC Continuation filed May 17, 1999
     under Filing No. 99137-0205.

                                       3

<PAGE>

5.   UCC-1 filed on September 29, 1995 with the Washington Department of
     Licensing against Borrower as debtor by U.S. Bank of Washington, N.A.
     (Bellevue), Bank of America N.T. & S.A. DBA Seafirst Bank, and Bank of
     America, N.A. as secured parties under Filing No. 952720047 covering all
     assets, UCC Continuation filed on April 7, 2000 under Filing No.
     20000980010.

6.   UCC-1 filed on September 21, 1998 with the Washington Department of
     Licensing against Borrower as debtor by Bank of America N.T. & S.A. DBA
     Seafirst Bank and Bank of America, N.A. as secured parties under Filing No.
     982450061 covering all assets.

7.   UCC-1 filed on April 29, 1999 with the Washington Department of Licensing
     against Borrower as debtor by Fleet Leasing Corporation as secured party
     under Filing No. 991190205 covering (1) 880 Panasonic Fax S/N 01981001569,
     Lease Number 7-26679-101.

8.   UCC-1 filed on May 24, 1999 with the Washington Department of Licensing
     against Borrower as debtor by Fleet Leasing Corporation as secured party
     under Filing No. 991440209 covering (1) 7750 Panasonic Copier, S/N KIEKF
     662636, Lease #7-1514938-000.

9.   UCC-1 filed on July 6, 1999 with the Washington Department of Licensing
     against Borrower as debtor by Winthrop Resources Corporation as secured
     party under Filing No. 991870742 covering any and all equipment now or
     hereafter the subject of any lease agreement or lease schedule by and
     between parties, including, but not limited to, the following equipment
     contained on or subject to: Lease Agreement Number FL110698 or Lease
     Schedule Number 001 or Schedule A, together will all substitutions,
     replacements, accessions, process, rent, revenue, insurance, and proceeds
     related to the equipment contained in the financing statement or any lease
     agreement or lease schedule by and between the parties.

10.  UCC-1 filed on October 21, 1999 with the Washington Department of Licensing
     against Borrower as debtor by Fleet Business Credit Corporation as secured
     party under Filing No. 992940139 covering all collateral attached as
     Schedule A, Lease Agreement #FL110698, Lease Schedule 001R, Equipment
     Location.

11.  UCC-1 filed on June 22, 2000 with the Washington Department of Licensing
     against Borrower as debtor by U.S. Bank National Association as secured
     party under Filing No. 20001740030 covering equipment leased by secured
     party as lessor to debtor as lessee under Supplementary Schedule No. FL# to
     Master Equipment Lease Agreement L00002 dated February 23, 2000 as more
     fully described in Exhibit attached thereto.

                                       4

<PAGE>

12.  UCC-1 filed on August 10, 2000 with the Washington Department of Licensing
     against Borrower as debtor by U.S. Bancorp Leasing & Financial as secured
     party under Filing No. 20002230274 covering all interest in the Schedule A
     attached to Lease Agreement FL110698, Lease Schedule #002R.

13.  UCC-1 filed on November 13, 2000 with the Washington Department of
     Licensing against Borrower as debtor by U.S. Bancorp & Leasing & Financial
     as secured party under Filing No. 20003180416 covering all interest in the
     attached Schedule A to Lease Agreement FL110698, Lease Schedule #003R.

14.  UCC-1 filed on April 13, 2001 with the Washington Department of Licensing
     against Borrower as debtor by TCF Leasing, Inc. as secured party under
     Filing No. 20011030227 covering leased equipment described on Exhibit A
     attached thereto and made a part thereof along with all additions,
     substitutions, attachments, replacements, and accessions thereof, plus the
     proceeds of all the foregoing including amounts payable under any insurance
     policy.

15.  UCC-1 filed on December 12, 2001 with the Washington Department of
     Licensing against Borrower as debtor by Minolta Business Solutions as
     secured party under Filing No. 200200459558 covering L#4398751.4-Minolta
     DI151 Copiers2-Minolta DI200 Copiers 5-Minolta DI450 Copiers 2-Minolta
     DI550 Copiers.

16.  UCC-1 filed on April 29, 2002 with the Washington Department of Licensing
     against Borrower as debtor by U.S. Bank National Association as secured
     party under Filing No. 200212178355 covering all equipment now owned or
     hereafter acquired by debtor including, but not limited to, all office
     machines, trade fixtures and leasehold improvements that are classified as
     equipment and all trade fixtures and leasehold improvements that are
     classified as fixtures. Equipment and fixtures are located at 530 Moon
     Clinton Road, Coraopolis, PA. This statement continues original financing
     statement filed with the Department of State of Pennsylvania on 9/01/1987.
     The filing number of the original financing statement is No. 15550503. The
     original financing statement remains effective. Other than the sale or
     lease of inventory in the ordinary course of debtor's business, the
     purchase by or pledge to another party of any of the above described
     collateral violates the rights of the secured party.

17.  UCC-1 filed on October 4, 2002 with the Washington Department of Licensing
     against Borrower as debtor by John Hancock Life Insurance Company as
     secured party under Filing No. 200228063942 covering all assets except
     those released pursuant to UCC Amendment Filing No. 200315061349.

18.  UCC-1 filed on March 31, 2003 with the Washington Department of Licensing
     against Borrower as debtor by Winthrop Resources Corporation as secured
     party under Filing

                                       5

<PAGE>

     No. 200309277824  covering  equipment  noted on  Schedule A  (attached  to
     financing statement) of Lease Agreement #FL110698.

19.  UCC-1 filed on June 17, 2003 with the Washington Department of Licensing
     against Borrower as debtor by Applied Industrial Technologies as secured
     party under Filing No. 200313808837 covering a Purchase Money Security
     Interest in and to all Consignee & apos;s [sic] now held or hereafter
     acquired equipment consigned or shipped to Consignee by or on behalf of
     Consignor pursuant to that certain Consignment Agreement between the
     parties dated May of 2003, and as amended from time to time, whether
     manufactured by Consignor or others and under any product name, including
     all additions and accessions thereto and substitutions therefor and
     products thereof.

FLOW WATERJET FLORIDA CORPORATION

20.  UCC-1 filed on August 26, 2002 with the Florida Secured Transaction
     Registry against Borrower as debtor by Bank of America, N.A. as secured
     party under Filing No. 200202012628 covering all assets.

21.  UCC-1 filed on October 4, 2002 with the Florida Secured Transaction
     Registry against Borrower as debtor by John Hancock Life Insurance Company
     as secured party under Filing No. 200202328021 covering all assets.

CIS ACQUISITION CORPORATION

22.  UCC-1 filed on August 28, 2002 with the Michigan Department of State
     against Borrower as debtor by Bank of America, N.A. as secured party under
     Filing No. 43670C covering all assets.

23.  UCC-1 filed on October 7, 2002 with the Michigan Department of State
     against Borrower as debtor by John Hancock Life Insurance Company. as
     secured party under Filing No. 46226C covering all assets.

AVURE TECHNOLOGIES, INC.

24.  UCC-1 filed on August 26, 2002 with the Washington Department of Licensing
     against Borrower as debtor by Bank of America, N.A. as secured party under
     Filing No. 200315061837 covering all assets except for those assets
     released pursuant to Exhibit A to the UCC Amendment.

25.  UCC-1 filed on October 4, 2002 with the Washington Department of Licensing
     against Borrower as debtor by John Hancock Life Insurance Company as
     secured party under Filing No. 200229SS03433 covering all assets.

                                       6

<PAGE>

Foreign Guarantors-lien information to be provided post closing promptly upon
becoming available

                                       7

<PAGE>

                                   EXHIBIT A-1

                (to Second Amended and Restated Credit Agreement)

                 THIRD AMENDED AND RESTATED REVOLVING LOAN NOTE
                             (Bank of America, N.A.)

                                       1

<PAGE>

                                   EXHIBIT A-2
                (to Second Amended and Restated Credit Agreement)

                 THIRD AMENDED AND RESTATED REVOLVING LOAN NOTE
                        (U.S. Bank National Association)

                                       1

<PAGE>

                                   EXHIBIT A-3
                (to Second Amended and Restated Credit Agreement)

                 THIRD AMENDED AND RESTATED REVOLVING LOAN NOTE
                         (KeyBank National Association)

                                       1

<PAGE>

                                    EXHIBIT B
                (to Second Amended and Restated Credit Agreement)

                           FOREIGN SUBSIDIARY GUARANTY

                                       1

<PAGE>

                                    EXHIBIT C
                (to Second Amended and Restated Credit Agreement)

                           FOREIGN SECURITY AGREEMENT

                                       1

<PAGE>

                                    EXHIBIT D
                (to Second Amended and Restated Credit Agreement)

                      AMENDED AND RESTATED PLEDGE AGREEMENT

                                       1

<PAGE>

                                    EXHIBIT E
                (to Second Amended and Restated Credit Agreement)

                         FORM OF COMPLIANCE CERTIFICATE

                                         Financial Statement Date:
                                                                  --------------

     THE UNDERSIGNED, being the                     of FLOW INTERNATIONAL
                                -------------------
CORPORATION, a Washington corporation, (the "Borrower") does hereby certify to
BANK OF AMERICA, N.A., U.S. BANK NATIONAL ASSOCIATION, KEYBANK NATIONAL
ASSOCIATION (the "Lenders") and BANK OF AMERICA, N.A., as agent for Lenders (in
such capacity, the "Agent") under the Credit Agreement (as hereinafter defined),
as follows:

     1.This Certificate is given pursuant to Section 5.9(f) of that certain
Credit Agreement dated as of July 28, 2003 by and among the Borrower, the
Lenders and the Agent (as the same may be amended, modified or extended from
time to time the "Credit Agreement"). Capitalized terms not otherwise defined in
this Certificate shall have the meanings set forth in the Credit Agreement.

     2.The financial statements for the fiscal quarter ended            , 20
                                                             -----------    ---
[or calendar month ended          , 20  ] delivered with this Certificate
                         ---------    --
pursuant to the requirements of Section 5.9(f) of the Credit Agreement have been
prepared in accordance with GAAP and present fairly the consolidated financial
position and the results of operations of Borrower and its Subsidiaries as of
the end of and for such fiscal period.

     3.There has not existed during the fiscal quarter ended            , 20
                                                             -----------    ---
[or calendar month ended          , 20  ] and there does not now exist any
                         ---------    --
Default or Event of Default under the Credit Agreement.

     4.The computations and descriptions set forth in Schedule 1 hereto
demonstrate compliance with the financial covenants in Section 6.12 and 6.13 of
the Credit Agreement, and.

     5.Capitalized terms used herein and not otherwise defined shall have the
meanings defined in the Loan Agreement.

     DATED this       day of                , 20   .
                -----        ---------------    ---

                                            FLOW INTERNATIONAL
                                            CORPORATION , a Washington
                                            corporation

                                            By
                                                 -------------------------------
                                            Its
                                                 -------------------------------

<PAGE>

     For the fiscal quarter [or calendar month] ended
                                                      -------------------
("Statement Date")

                                   SCHEDULE 1
                            to Compliance Certificate

1.   Section 6.12(a) - Minimum EBITDA (Quarterly or Monthly).

--------------------------------------------------------------------------------
(a)  EBITDA for measured time period ("Subject Period"):
--------------------------------------------------------------------------------
     1.   Domestic                                                $
                                                                   -------------
--------------------------------------------------------------------------------
     2.   Consolidated                                            $
                                                                   -------------
--------------------------------------------------------------------------------
(b)  Minimum EBITDA (from Section 6.12(a))
--------------------------------------------------------------------------------
     1.   Domestic                                                $
                                                                   -------------
--------------------------------------------------------------------------------
     2.   Consolidated                                            $
                                                                   -------------
--------------------------------------------------------------------------------
             Lesser of (a)1 or (b)1                               $
                                                                   -------------
--------------------------------------------------------------------------------
             Lesser of (a)2 or (b)2                               $
                                                                   -------------
--------------------------------------------------------------------------------
     Excess (deficient) for covenant compliance ((a)1 - (b)1):    $
                                                                   -------------
--------------------------------------------------------------------------------
     Excess (deficient) for covenant compliance ((a)2 - (b)2):    $
                                                                   -------------
--------------------------------------------------------------------------------

2.   Section 6.12(b) - Minimum EBITDA (Cumulative).
--------------------------------------------------------------------------------
     (a)  Cumulative EBITDA from May 1, 2003 to Statement Date
          ("Subject Period"):
--------------------------------------------------------------------------------
     1.   Domestic                                                $
                                                                   -------------
--------------------------------------------------------------------------------
     2.   Consolidated                                            $
                                                                   -------------
--------------------------------------------------------------------------------
     (b)  Minimum EBITDA (from Section 6.12(b))
--------------------------------------------------------------------------------
     1.   Domestic                                                $
                                                                   -------------
--------------------------------------------------------------------------------
     2.   Consolidated                                            $
                                                                   -------------
--------------------------------------------------------------------------------
             Lesser of (a)1 or (b)1                               $
                                                                   -------------
--------------------------------------------------------------------------------

<PAGE>

--------------------------------------------------------------------------------
             Lesser of (a)2 or (b)2                               $
                                                                   -------------
--------------------------------------------------------------------------------
     Excess (deficient) for covenant compliance ((a)1 - (b)1):    $
                                                                   -------------
--------------------------------------------------------------------------------
     Excess (deficient) for covenant compliance ((a)2 - (b)2):    $
                                                                   -------------
--------------------------------------------------------------------------------

<TABLE>
<S>                                                               <C>
     3.   Minimum Collateral Requirements
------------------------------------------------------------------------------------
     (a)  Actual Collateral Level:
------------------------------------------------------------------------------------
     1.   Domestic Accounts Receivable                            $              (+)
                                                                   -------------
------------------------------------------------------------------------------------
     2.   Domestic Inventory                                      $              (+)
                                                                   -------------
------------------------------------------------------------------------------------
                = TOTAL                                           $
                                                                   -------------
------------------------------------------------------------------------------------
     (b)  Minimum Collateral Level (from Section 6.13)            $
                                                                   -------------
------------------------------------------------------------------------------------
            Excess (deficient) for covenant compliance((a) - (b)):$
                                                                   -------------
------------------------------------------------------------------------------------
</TABLE>

<PAGE>

                                    EXHIBIT F
                (to Second Amended and Restated Credit Agreement)

                               OPINION OF COUNSEL

<PAGE>

                                    EXHIBIT G
                (to Second Amended and Restated Credit Agreement)

                              RESTRUCTURE AGREEMENT

**

----------------------------------------------------------------------------
**CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT**

<PAGE>

**

----------------------------------------------------------------------------
**CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT**

                                       2

<PAGE>

**

----------------------------------------------------------------------------
**CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT**

                                       3

<PAGE>

**

----------------------------------------------------------------------------
**CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT**

                                       4

<PAGE>

**

----------------------------------------------------------------------------
**CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT**

                                       5

<PAGE>

**

----------------------------------------------------------------------------
**CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT**

                                       6

<PAGE>

                               GUARANTORS' CONSENT

     Each undersigned guarantor (each a "Guarantor") is a guarantor of the
indebtedness, liabilities and obligations of Flow International Corporation, a
Washington corporation (the "Borrower") under that certain Second Amended and
Restated Credit Agreement dated as of July 28, 2003 (as amended from time to
time, the "Credit Agreement") referred to in the within and foregoing
Restructure Agreement dated as of July 28, 2003 (the "Restructure Agreement")
and the other Loan Documents described in the Credit Agreement. Each Guarantor
hereby acknowledges that it has received a copy of the Restructure Agreement and
hereby consents to its contents and the other Loan Documents described therein
(notwithstanding that such consent is not required). Each Guarantor hereby
confirms that its guarantee of the obligations of Borrower remains in full force
and effect, and that the obligations of Borrower under the Credit Agreement and
the other Loan Documents shall include the obligations of the Borrower under the
Restructure Agreement. All capitalized terms not defined herein have the
meanings given in the Credit Agreement.

     GUARANTORS:
                                       AVURE TECHNOLOGIES, INC.

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

                                       Name:
                                            ------------------------------------

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

                                       CIS ACQUISITION CORPORATION

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

                                       Name:
                                            ------------------------------------

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

                                       FLOW WATERJET FLORIDA CORPORATION

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

                                       Name:
                                            ------------------------------------

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

                                        7

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