Document:

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EXHIBIT 10.03

                             CARDINAL HEALTH, INC.

                            364-DAY CREDIT AGREEMENT

                           DATED AS OF MARCH 30, 2000

                     THE SUBSIDIARY BORROWERS PARTY HERETO,

                            THE LENDERS PARTY HERETO

                                      AND

                     BANK ONE, NA, AS ADMINISTRATIVE AGENT

                  BANK OF AMERICA, N.A., AS SYNDICATION AGENT

                   CITICORP USA, INC., AS DOCUMENTATION AGENT

               CREDIT SUISSE FIRST BOSTON, AS DOCUMENTATION AGENT

       BANC ONE CAPITAL MARKETS, INC., AS LEAD ARRANGER AND BOOK MANAGER

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                                TABLE OF CONTENTS

<TABLE>
<S>      <C>                                                                                                     <C>
Article I. DEFINITIONS............................................................................................1
Article II. THE CREDITS..........................................................................................11
         2.1      Commitments of the Lenders; Revolving Credit Advances..........................................11
         2.2      Termination....................................................................................11
         2.3      Ratable Loans..................................................................................11
         2.4      Types of Advances..............................................................................11
         2.5      Facility Fee; Reductions in Aggregate Commitment; Utilization Fee..............................12
         2.6      Minimum Amount of Each Advance.................................................................12
         2.7      Prepayments....................................................................................12
         2.8      Method of Selecting Types and Interest Periods for New Advances................................12
         2.9      Conversion and Continuation of Outstanding Advances............................................13
         2.10     Method of Borrowing............................................................................13
         2.11     Changes in Interest Rate, etc..................................................................14
         2.12     Rates Applicable After Default.................................................................14
         2.13     Method of Payment..............................................................................14
         2.14     Noteless Agreement; Evidence of Indebtedness...................................................15
         2.15     Telephonic Notices.............................................................................15
         2.16     Interest Payment Dates; Interest and Fee Basis.................................................16
         2.17     Notification of Advances, Interest Rates, Prepayments and Commitment Reductions................16
         2.18     Lending Installations..........................................................................16
         2.19     Non-Receipt of Funds by the Administrative Agent...............................................16
         2.20     Replacement of Lender..........................................................................17
Article III. YIELD PROTECTION; TAXES.............................................................................18
         3.1      Yield Protection...............................................................................18
         3.2      Changes in Capital Adequacy Regulations........................................................19
         3.3      Availability of Types of Advances..............................................................19
         3.4      Funding Indemnification........................................................................20
         3.5      Taxes..........................................................................................20
</TABLE>

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<TABLE>
<S>      <C>                                                                                                     <C>
         3.6      Lender Statements; Survival of Indemnity.......................................................22
Article IV. CONDITIONS PRECEDENT.................................................................................22
         4.1      Initial Advance................................................................................22
         4.2      Each Advance...................................................................................23
Article V. REPRESENTATIONS AND WARRANTIES........................................................................24
         5.1      Existence and Standing.........................................................................24
         5.2      Authorization and Validity.....................................................................24
         5.3      No Conflict; Government Consent................................................................24
         5.4      Financial Statements...........................................................................25
         5.5      Material Adverse Change........................................................................25
         5.6      Taxes..........................................................................................25
         5.7      Litigation and Contingent Obligations..........................................................25
         5.8      Subsidiaries...................................................................................25
         5.9      ERISA..........................................................................................26
         5.10     Accuracy of Information........................................................................26
         5.11     Regulation U...................................................................................26
         5.12     Material Agreements............................................................................27
         5.13     Compliance With Laws...........................................................................27
         5.14     Plan Assets; Prohibited Transactions...........................................................27
         5.15     Environmental Matters..........................................................................27
         5.16     Investment Company Act.........................................................................27
         5.17     Public Utility Holding Company Act.............................................................27
         5.18     Year 2000......................................................................................28
         5.19     Default........................................................................................28
Article VI. COVENANTS............................................................................................28
         6.1      Financial Reporting............................................................................28
         6.2      Use of Proceeds................................................................................29
         6.3      Notice of Default..............................................................................29
         6.4      Conduct of Business............................................................................29
         6.5      Taxes..........................................................................................30
</TABLE>

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<TABLE>
<S>      <C>                                                                                                     <C>
         6.6      Insurance......................................................................................30
         6.7      Compliance with Laws...........................................................................30
         6.8      Inspection.....................................................................................30
         6.9      Merger.........................................................................................30
         6.10     Sale of Assets.................................................................................31
         6.11     Investments....................................................................................31
         6.12     Liens..........................................................................................32
         6.13     Year 2000......................................................................................33
         6.14     Subsidiary Indebtedness........................................................................34
         6.15     Limitation on Restrictions on Significant Subsidiary Distributions.............................35
         6.16     Contingent Obligations.........................................................................35
         6.17     Minimum Net Worth..............................................................................35
Article VII. DEFAULTS............................................................................................35
Article VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.....................................................37
         8.1      Acceleration...................................................................................37
         8.2      Amendments.....................................................................................38
         8.3      Preservation of Rights.........................................................................38
Article IX. GENERAL PROVISIONS...................................................................................39
         9.1      Survival of Representations....................................................................39
         9.2      Governmental Regulation........................................................................39
         9.3      Headings.......................................................................................39
         9.4      Entire Agreement...............................................................................39
         9.5      Several Obligations; Benefits of this Agreement................................................39
         9.6      Expenses; Indemnification......................................................................40
         9.7      Numbers of Documents...........................................................................40
         9.8      Accounting.....................................................................................40
         9.9      Severability of Provisions.....................................................................41
         9.10     Nonliability of Lenders........................................................................41
         9.11     Confidentiality................................................................................41
         9.12     Nonreliance....................................................................................41
</TABLE>

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<TABLE>
<S>      <C>                                                                                                     <C>
Article X. THE AGENT.............................................................................................42
         10.1     Appointment; Nature of Relationship............................................................42
         10.2     Powers.........................................................................................42
         10.3     General Immunity...............................................................................42
         10.4     No Responsibility for Loans, Recitals, etc.....................................................42
         10.5     Action on Instructions of Lenders..............................................................43
         10.6     Employment of Agents and Counsel...............................................................43
         10.7     Reliance on Documents; Counsel.................................................................43
         10.8     Administrative Agent's Reimbursement and Indemnification.......................................44
         10.9     Notice of Default..............................................................................44
         10.10    Rights as a Lender.............................................................................44
         10.11    Lender Credit Decision.........................................................................45
         10.12    Successor Administrative Agent.................................................................45
         10.13    Administrative Agent's Fee.....................................................................46
         10.14    Delegation to Affiliates.......................................................................46
         10.15    Administrative Agent, Syndication Agent, Documentation Agents, Lead Arranger, etc..............46
Article XI. SETOFF; RATABLE PAYMENTS.............................................................................46
         11.1     Setoff.........................................................................................46
         11.2     Ratable Payments...............................................................................47
Article XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...................................................47
         12.1     Successors and Assigns.........................................................................47
         12.2     Participations.................................................................................47
         12.2.1.  Permitted Participants; Effect.................................................................47
         12.2.2   Voting Rights..................................................................................48
         12.2.3   Benefit of Setoff..............................................................................48
         12.3     Assignments....................................................................................48
         12.3.1   Permitted Assignments..........................................................................48
         12.3.2   Effect; Effective Date.........................................................................49
         12.4     Dissemination of Information...................................................................49
</TABLE>

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<TABLE>
<S>      <C>                                                                                                     <C>
         12.5     Tax Treatment..................................................................................49
         12.6     Transfer to an SPC.............................................................................50
Article XIII. NOTICES............................................................................................50
         13.1     Notices........................................................................................50
         13.2     Change of Address..............................................................................51
Article XIV. COUNTERPARTS........................................................................................51
Article XV. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
                    TRIAL........................................................................................51
         15.1     CHOICE OF LAW..................................................................................51
         15.2     CONSENT TO JURISDICTION........................................................................51
         15.3     WAIVER OF JURY TRIAL...........................................................................52
</TABLE>

Exhibits:
--------
         Exhibit A         Form of Opinion
         Exhibit B         Compliance Certificate
         Exhibit C         Assignment Agreement
         Exhibit D         Loan/Credit Related Money Transfer Instructions
         Exhibit E         Note

Schedules:
---------
         1        Subsidiary and Other Investments
         3        Eurodollar Payment Offices of the Agent
         4        Lending Installations
         7        Litigation and contingent Obligations
         8        Persons Authorized to Give Telephone Instructions

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                            364-DAY CREDIT AGREEMENT

         This Agreement, dated as of March 30, 2000, is among Cardinal Health,
Inc. (the "Company"), certain Subsidiaries of the Company (the "Subsidiary
Borrowers", and together with the Company, the "Borrowers"), the lenders party
hereto from time to time (the "Lenders"), and Bank One, NA, as Administrative
Agent (the "Administrative Agent"). The parties hereto agree as follows:

                                   ARTICLE I.

                                  DEFINITIONS

         As used in this Agreement:

         "Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.

         "Adjusted Tangible Net Worth" means, as of any date, (i) the amount of
any capital stock, paid in capital and similar equity accounts plus (or minus in
the case of a deficit) the capital surplus and retained earnings of the Company
and its consolidated Subsidiaries, but excluding the amount of any foreign
currency translation adjustment account shown as a capital account, less (ii)
the net book value of all items of the following character which are included in
the assets of the Company and its consolidated Subsidiaries: (a) goodwill,
including, without limitation, the excess of cost over book value of any asset,
(b) organization or experimental expenses, (c) unamortized debt discount and
expense, (d) patents, trademarks, trade names and copyrights, (e) treasury
stock, (f) franchises, licenses and permits, and (g) other assets which are
deemed intangible assets under Agreement Accounting Principles.

         "Administrative Agent" means Bank One, NA (Main office Chicago) in its
capacity as contractual representative of the Lenders pursuant to Article X, and
not in its individual capacity as a Lender, and any successor Administrative
Agent appointed pursuant to Article X.

         "Advance" means a borrowing hereunder, (i) made by the Lenders on the
same Borrowing Date, or (ii) converted or continued by the Lenders on the same
date of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period.

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         "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

         "Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof. As of
the date of this Agreement, the original Aggregate Commitment was $750,000,000.

         "Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.

         "Agreement Accounting Principles" means generally accepted accounting
principles in the United States of America in effect from time to time, applied
in a manner consistent with that used in preparing the financial statements
referred to in Section 5.4; provided, however, that if any change in Agreement
Accounting Principles from those applied in preparing such financial statements
affects the calculation of any financial covenant contained in this Agreement,
the Borrowers and the Administrative Agent hereby agree to negotiate in good
faith towards making appropriate amendments acceptable to the Required Lenders
to the provisions of this Agreement to reflect as nearly as possible the effect
of the financial covenants as in effect on the date hereof.

         "Applicable Fee Rate" means, at any time, the percentage rate per annum
at which Facility Fees are accruing on the Aggregate Commitment (without regard
to usage) at such time as set forth in the Pricing Schedule.

         "Applicable Margin" means, with respect to any Eurodollar Loan,
Floating Rate Loan or the Facility Fee, as the case may be at any time, the
applicable percentage which is applicable at such time set forth in the Pricing
Schedule provided that upon the occurrence and during the continuation of a
Default, the Applicable Margin shall be the highest Applicable Margin set forth
in the Pricing Schedule.

         "Article" means an article of this Agreement unless another document is
specifically referenced.

         "Authorized Officer" means any of the Chairman, Chief Executive
Officer, President, Vice Chairman, Chief Financial Officer, Controller, or
Treasurer of a Borrower, or their equivalent, acting singly.

         "Bank One" means Bank One, NA (Main office Chicago) (f/k/a The First
National Bank of Chicago) in its individual capacity, and its successors.

         "Borrowers" means the Company and the Subsidiary Borrowers, and
"Borrower" means any of them, as the context may require.

         "Borrowing Date" means a date on which an Advance is made hereunder.

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         "Borrowing Notice" is defined in Section 2.8.

         "Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Detroit and New York for the conduct
of substantially all of their commercial lending activities and on which
dealings in Eurodollars are carried on in the London interbank market, and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Detroit for the conduct of substantially all of their
commercial lending activities.

         "Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.

         "Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.

         "Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000, (v) banker's acceptances,
(vi) money-market funds, provided that such funds invest solely in securities
otherwise described in this definition, (vii) variable rate demand notes, (viii)
municipal preferred stock, (ix) cash market preferred stock, and (x) short term
municipal notes; provided in each case that the same provides for payment of
both principal and interest (and not principal alone or interest alone) and is
not subject to any contingency regarding the payment of principal or interest.

         "Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 30% or more of the outstanding shares of voting stock of the
Company, provided, however, that the acquisitions by or on behalf of a Plan, an
employee stock purchase plan of the Company, or by Persons who before such
acquisition were officers, directors, employees or who held in the aggregate not
less than 5% of the outstanding shares of voting stock of the Company shall not
be included in determining whether a Change in Control shall have occurred.

         "Closing Date" shall mean March 30, 2000.

         "Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

         "Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below or as
set forth in any assignment that has become effective pursuant to Section
12.3.2, as such amount may be modified from time to time pursuant to the terms
hereof.

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         "Company" means Cardinal Health, Inc., an Ohio corporation, and it
successors and assigns.

         "Consolidated or "consolidated" means, when used with reference to any
financial term in this Agreement, the aggregate for two or more Persons of the
amounts signified by such term for all such Persons determined on a consolidated
basis in accordance with Agreement Accounting Principles.

         "Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person for
Indebtedness, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement, take-or-pay contract or the obligations of any such
Person as general partner of a partnership with respect to the liabilities of
the partnership, provided, however, that any assumption, guaranty, endorsement
or undertaking with respect to any liability of any of its Subsidiaries to any
other of its Subsidiaries shall not be a Contingent Obligation of the Company.

         "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 the Company or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.

         "Conversion/Continuation Notice" is defined in Section 2.9.

         "Default" means an event described in Article VII.

         "Defaulting Lender" means any Lender that (a) on any Borrowing Date
fails to make available to the Administrative Agent such Lender's Loans required
to be made to a Borrower on such Borrowing Date or (b) shall not have made
available to the Administrative Agent its proportionate share of the Unpaid
Amount as required pursuant to Section 2.19(b). Once a Lender becomes a
Defaulting Lender, such Lender shall continue as a Defaulting Lender until such
time as such Defaulting Lender makes available to the Administrative Agent the
amount of such Defaulting Lender's Loans together with all other amounts
required to be paid to the Administrative Agent or any other Lender pursuant to
this Agreement.

         "Documentation Agents" means Citicorp USA, Inc. and Credit Suisse First
Boston.

         "Dollars" and "$" shall mean the lawful currency of the United States
of America.

         "Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing,

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<PAGE>   11

distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, hazardous substances or wastes or the clean-up or
other remediation thereof.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.

         "Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.

         "Eurodollar Payment Office" of the Administrative Agent shall mean the
office, branch, affiliate or correspondent bank of the Administrative Agent
specified as the "Eurodollar Payment Office" in Schedule 3 hereto or such other
office, branch, affiliate or correspondent bank of the Administrative Agent as
it may from time to time specify to the Borrowers and each Lender as its
Eurodollar Payment Office.

         "Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Reference Rate applicable to such Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest Period,
plus (ii) the Applicable Margin. The Eurodollar Rate shall be rounded to the
next higher multiple of 1/16 of 1% if the rate is not such a multiple.

         "Eurodollar Reference Rate" means, with respect to a Eurodollar Advance
for the relevant Interest Period the rate determined by the Administrative Agent
to be the rate at which Bank One offers to place deposits in Dollars with
first-class banks in the London interbank market at 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period in the approximate
amount of the relevant Eurodollar Loan of Bank One and having a maturity equal
to such Interest Period.

         "Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on its overall
net income, and franchise taxes (and any interest, fees or penalties for late
payment thereof) imposed on it by (i) the jurisdiction under the laws of which
such Lender or the Administrative Agent is incorporated or organized or (ii) the
jurisdiction in which the Administrative Agent's or such Lender's principal
executive office or such Lender's applicable Lending Installation is located.

         "Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.

         "Facility Termination Date" means March 29, 2001, or any earlier date
on which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.

         "Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal 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 immediately preceding Business Day) by the Federal Reserve Bank of New
York, or, if such rate is not so published for such day, the average of the
quotations at approximately 10:00 a.m. (Detroit time) on such day on such
transactions received by the

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<PAGE>   12

Administrative Agent from three Federal funds brokers of recognized standing
selected by the Administrative Agent in its sole discretion.

         "Financial Contract" of a Person means (a) any exchange-traded or over
the counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (b) any Rate Hedging Agreement.

         "Five Year Credit Agreement" means the Five Year Credit Agreement dated
March 31, 1999, among the Company, the Subsidiary Borrowers party thereto, the
Lenders and the Administrative Agent, as Administrative Agent, as such agreement
may be amended, restated or extended from time to time.

         "Floating Rate" means, for any day, a rate of interest per annum equal
to the higher of (i) the Prime Rate for such day and (ii) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.

         "Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.

         "Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.12, bears interest at the Floating Rate.

         "Guarantor" means the Company, and its successors and assigns.

         "Guaranty" means that certain Guaranty dated the date hereof executed
by the Guarantor in favor of the Administrative Agent, for the ratable benefit
of the Lenders, as it may be amended or modified and in effect from time to
time.

         "Indebtedness" of a Person means, as of any date, such Person's (i)
obligations for borrowed money or evidenced by bonds, notes, acceptances,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or bankers' acceptances, (ii) obligations
representing the deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person's business
payable on terms customary in the trade), (iii) obligations, whether or not
assumed, secured by Liens or payable out of the proceeds or production from
Property now or hereafter owned or acquired by such Person, (iv)obligations of
such Person to purchase securities or other Property arising out of or in
connection with the sale of the same or substantially similar securities or
Property, (v) Capitalized Lease Obligations, (vi) any other obligation for
borrowed money or other financial accommodation which in accordance with
Agreement Accounting Principles would be shown as a liability on the
consolidated balance sheet of such Person, (vii) any Rate Hedging Obligations of
such Person, and (viii) all Contingent Liabilities of such Person with respect
to or relating to the indebtedness, obligations and liabilities of others
similar in character to those described in clauses (i) through (viii) of this
definition.

         "Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months (or such longer or shorter period requested by
the Borrower and acceptable to all of the Lenders), commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest Period shall
end on the day which corresponds numerically to such

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<PAGE>   13

date one, two, three or six months thereafter (or such longer or shorter period
requested by the Borrower and acceptable to all of the Lenders), provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month. If an
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new calendar
month, such Interest Period shall end on the immediately preceding Business Day.

         "Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any certificate of deposit owned by such Person; and structured notes,
derivative financial instruments and other similar instruments or contracts
owned by such Person.

         "Lead Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors.

         "Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.

         "Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or Affiliate of such Lender
or the Administrative Agent selected by such Lender and the Administrative Agent
pursuant to Section 2.18.

         "Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.

         "Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).

         "Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).

         "Loan Documents" means this Agreement, the Notes, the Guaranty and any
other instrument or document executed in connection with any of the foregoing at
any time.

         "Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Company and its Subsidiaries taken as a whole, (ii) the
ability of the Company to perform its obligations under the Loan Documents to
which it is a party, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Administrative Agent or the Lenders
thereunder.

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<PAGE>   14

         "Moody's" means Moody's Investors Service, Inc.

         "Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Company is a party to
which more than one employer is obligated to make contributions.

         "Net Worth" means at any time the consolidated stockholder's equity of
the Company and its Subsidiaries calculated on a consolidated basis as of such
time in accordance with Agreement Accounting Principles .

         "Non-U.S. Borrower" is defined in Section 3.1(b).

         "Non-U.S. Lender" is defined in Section 3.5(iv).

         "Note" means any promissory note issued at the request of a Lender
pursuant to Section 2.14 in the form of Exhibit E.

         "Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrowers to the
Lenders or to any Lender, the Administrative Agent or any indemnified party
arising under the Loan Documents.

         "Other Taxes" is defined in Section 3.5(ii).

         "Overdue Rate" means a per annum rate that is equal to the sum of two
percent (2%) plus the Floating Rate, changing as and when the Floating Rate
changes.

         "Participants" is defined in Section 12.2.1.

         "Payment Date" means the last day of each calendar quarter, commencing
June 30, 2000.

         "PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.

         "Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

         "Plan" means 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 as to which the Company or any member of the Controlled Group may have
any liability.

         "Pricing Schedule" means the Schedule attached hereto identified as
such.

         "Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its Parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

         "Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned
or leased by such Person.

                                       8
<PAGE>   15

         "Purchasers" is defined in Section 12.3.1.

         "Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.

         "Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Hedging Agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.

         "Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.

         "Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

         "Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.

         "Required Lenders" means Lenders in the aggregate having at least 51%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the aggregate unpaid principal
amount of the outstanding Advances.

         "Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurodollar
liabilities.

         "Significant Subsidiary" means any Subsidiary of the Company that would
be a "significant subsidiary" within the meaning of Rule 1-02 of the Securities
and Exchange Commission's Regulation S-X if 5% were substituted for 10% wherever
it occurs in such Rule.

         "S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.

                                       9
<PAGE>   16

         "Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.

         "Section" means a numbered section of this Agreement, unless another
document is specifically referenced.

         "Single Employer Plan" means a Plan maintained by the Company or any
member of the Controlled Group for employees of the Company or any member of the
Controlled Group.

         "Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of the Company.

         "Subsidiary Borrower" means each Subsidiary of the Company listed as a
Subsidiary Borrower on Schedule 1 as amended from time to time in accordance
with Section 5.8.

         "Substantial Portion" means, with respect to the Property of the
Company and its Subsidiaries, Property which (i) represents more than 20% of the
consolidated assets of the Company and its Subsidiaries as would be shown in the
consolidated financial statements of the Company and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 20% of the
consolidated net sales or of the consolidated net income of the Company and its
Subsidiaries as reflected in the financial statements referred to in clause (i)
above.

         "Syndication Agent" means Bank of America, N.A.

         "Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.

         "Transferee" is defined in Section 12.4.

         "Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance.

         "Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.

         "Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.

                                       10
<PAGE>   17

         "Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.

         "Year 2000 Issues" means anticipated costs, problems and uncertainties
associated with the inability of certain computer applications of the Company
and its Subsidiaries, and of the Company's and its Subsidiaries' material
customers, suppliers and vendors, to function on and after January 1, 2000 as
they did prior to such date, including handling applications involving dates, as
such inability affects the business, operations and financial condition of the
Company and its Subsidiaries.

         "Year 2000 Program" is defined in Section 5.18.

         The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.

                                  ARTICLE II.

                                  THE CREDITS

         2.1 Commitments of the Lenders; Revolving Credit Advances.

         From and including the date of this Agreement and prior to the Facility
Termination Date, each Lender agrees, for itself only, subject to the terms and
conditions set forth in this Agreement, to make Loans to the Borrowers from time
to time in amounts not to exceed in the aggregate at any one time outstanding
the amount of its Commitment. Subject to the terms of this Agreement, the
Borrowers may borrow, repay and reborrow at any time prior to the Facility
Termination Date. The Commitments to lend hereunder shall expire on the Facility
Termination Date.

         2.2 Termination.

         Any outstanding Advances together with any other unpaid Obligations
then due and payable shall be paid in full by the Borrowers on the Facility
Termination Date.

         2.3 Ratable Loans.

         Each Advance hereunder shall consist of Loans made from the several
Lenders ratably in proportion to the ratio that their respective Commitments
bear to the Aggregate Commitment.

         2.4 Types of Advances.

         The Advances may be Floating Rate Advances or Eurodollar Advances, or a
combination thereof, selected by the relevant Borrowers in accordance with
Sections 2.8 and 2.9.

                                       11
<PAGE>   18

         2.5 Facility Fee; Reductions in Aggregate Commitment; Utilization Fee.

         The Company agrees to pay to the Administrative Agent for the account
of each Lender a facility fee, determined in accordance with the Pricing
Schedule, calculated on the Aggregate Commitment, whether used or unused,
payable quarterly in arrears for the ratable benefit of the Lenders from the
date of this Agreement until the Facility Termination Date. The Aggregate
Commitment may be reduced by the Company in multiples of $10,000,000 upon three
Business Days' prior written notice. For each day on which the aggregate
principal amount of outstanding Advances exceeds 33% of the Aggregate
Commitment, a utilization fee at the per annum rate set forth on the Pricing
Schedule will accrue on the aggregate principal amount of outstanding Advances
for the ratable benefit of the Lenders, payable in arrears on each Payment Date
until the Facility Termination Date, and such utilization fee shall increase as
set forth on the Pricing Schedule if the aggregate principal amount of
outstanding Advances exceeds 67% of the Aggregate Commitment.

         2.6 Minimum Amount of Each Advance.

         Each Eurodollar Advance shall be in the minimum amount of $5,000,000
(and in multiples of $1,000,000 in excess thereof, and each Floating Rate
Advance shall be in the minimum amount of $5,000,000 (and in multiples of
$1,000,000 if in excess thereof), provided, however, that any Floating Rate
Advance may be in the amount of the unused Aggregate Commitment.

         2.7 Prepayments.

         The Borrowers may from time to time pay, without penalty or premium,
all outstanding Floating Rate Advances, or, in a minimum aggregate amount of
$5,000,000 or any integral multiple of $1,000,000 in excess thereof, any portion
of the outstanding Floating Rate Advances upon one Business Days' prior notice
to the Administrative Agent. The Borrowers may from time to time pay, subject to
the payment of any funding indemnification amounts required by Section 3.4 but
without penalty or premium, all outstanding Eurodollar Advances, or, in a
minimum aggregate amount of $5,000,000 or any integral multiple of $1,000,000 in
excess thereof, any portion of the outstanding Eurodollar Advances upon three
Business Days' prior notice to the Administrative Agent.

         2.8 Method of Selecting Types and Interest Periods for New Advances.

         The Company or the relevant Borrower shall select the Type of Advance
and, in the case of each Eurodollar Advance, the Interest Period applicable
thereto from time to time. The Company or the relevant Borrower shall give the
Administrative Agent irrevocable notice (a "Borrowing Notice") not later than
10:00 a.m. (Detroit time) on the Borrowing Date of each Floating Rate Advance
and not later than 11:00 a.m. (Detroit time) three Business Days before the
Borrowing Date for each Eurodollar Advance, specifying:

                  (i)   the Borrower,

                  (ii)  the Borrowing Date, which shall be a Business Day, of
                        such Advance,

                  (iii) the aggregate amount of such Advance,

                                       12
<PAGE>   19

                  (iv)  the Type of Advance selected, and

                  (v)   in the case of each Eurodollar Advance, the Interest
                        Period applicable thereto.

         Not later than noon (Detroit time) on each Borrowing Date, each Lender
shall make available its Loan or Loans in funds immediately available to the
Administrative Agent at its address specified pursuant to Article XIII. The
Administrative Agent will make the funds so received from the Lenders available
to the Borrower at the Administrative Agent's aforesaid address.

         2.9 Conversion and Continuation of Outstanding Advances.

         Floating Rate Advances shall continue as Floating Rate Advances unless
and until such Floating Rate Advances are converted into Eurodollar Advances
pursuant to this Section 2.9 or are repaid in accordance with Section 2.7. Each
Eurodollar Advance shall continue as a Eurodollar Advance until the end of the
then applicable Interest Period therefor, at which time each such Eurodollar
Advance shall be automatically converted into a Floating Rate Advance unless (x)
such Eurodollar Advance is or was repaid in accordance with Section 2.7 or (y)
the Borrower shall have given the Administrative Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance either continue as a Eurodollar Advance for the same or
another Interest Period or be converted into a Floating Rate Advance.

         Subject to the terms of Section 2.6, the Borrower may elect from time
to time to convert all or any part of an Advance of any Type into any other Type
or Types of Advances, provided that any conversion of any Eurodollar Advance
shall be made on, and only on, the last day of the Interest Period applicable
thereto. The Borrower shall give the Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a Eurodollar Advance not later than 10:00 a.m. (Detroit time) at
least one Business Day, in the case of a conversion into a Floating Rate
Advance, three Business Days, in the case of a conversion into or continuation
of a Eurodollar Advance, prior to the date of the requested conversion or
continuation, specifying:

         i.    the requested date, which shall be a Business Day, of such
               conversion or continuation, and

         ii.   the amount and Type(s) of Advance(s) into which such Advance is
               to be converted or continued and, in the case of a conversion
               into or continuation of a Eurodollar Advance, the duration of the
               Interest Period applicable thereto.

         2.10 Method of Borrowing.

         On each Borrowing Date, each Lender shall make available its Loan or
Loans, not later than noon, Detroit time, in Federal or other funds immediately
available to the Administrative Agent, in Detroit, Michigan at its address
specified in or pursuant to Article XIII. Unless the Administrative Agent
determines that any applicable condition specified in Article IV has not been
satisfied, the Administrative Agent will make the funds so received from the
Lenders available to the relevant Borrower at the Administrative Agent's
aforesaid address. Notwithstanding the foregoing provisions of this Section
2.10, to the extent that a Loan made by

                                       13
<PAGE>   20

a Lender matures on the Borrowing Date of a requested Loan, such Lender shall
apply the proceeds of the Loan it is then making to the repayment of principal
of the maturing Loan.

         2.11 Changes in Interest Rate, etc.

         Each Floating Rate Advance shall bear interest on the outstanding
principal amount thereof, for each day from and including the date such Advance
is made or is converted from a Eurodollar Advance into a Floating Rate Advance
pursuant to Section 2.9 to but excluding the date it becomes due or is converted
into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum
equal to the Floating Rate for such day. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Floating Rate. Each Eurodollar Advance
shall bear interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
by the Administrative Agent as applicable to such Eurodollar Advance based upon
the Borrower's selections under Sections 2.8 and 2.9 and otherwise in accordance
with the terms hereof. No Interest Period may end after the Facility Termination
Date.

         2.12 Rates Applicable After Default.

         Notwithstanding anything to the contrary contained in Section 2.8 or
2.9, during the continuance of a Default or Unmatured Default the Required
Lenders may, at their option, by notice to the Borrowers (which notice may be
revoked at the option of the Required Lenders notwithstanding any provision of
Section 8.2 requiring unanimous consent of the Lenders to changes in interest
rates), declare that no Advance may be made as, converted into or continued as a
Eurodollar Advance. During the continuance of a Default the Required Lenders
may, at their option, by notice to the Borrowers (which notice may be revoked at
the option of the Required Lenders notwithstanding any provision of Section 8.2
requiring unanimous consent of the Lenders to changes in interest rates),
declare that (i) each Eurodollar Advance shall bear interest for the remainder
of the applicable Interest Period at the rate otherwise applicable to such
Interest Period plus 2% per annum and (ii) each Floating Rate Advance shall bear
interest at a rate per annum equal to the Floating Rate in effect from time to
time plus 2% per annum, provided that, during the continuance of a Default under
Section 7.6 or 7.7, the interest rates set forth in clauses (i) and (ii) above
shall be applicable to all Advances without any election or action on the part
of the Administrative Agent or any Lender.

         2.13 Method of Payment.

         All payments of the Obligations hereunder shall be made, without
setoff, deduction, or counterclaim, in immediately available funds by wire
transfer to the Administrative Agent at (except as set forth in the next
sentence) the Administrative Agent's address specified pursuant to Article XIII,
or at any other Lending Installation of the Administrative Agent specified in
writing by the Administrative Agent to the Borrower, by noon (local time) on the
date when due and shall be applied ratably by the Administrative Agent among the
Lenders. Each payment delivered to the Administrative Agent for the account of
any Lender shall be delivered promptly by the Administrative Agent to such
Lender in the same type of funds that the Administrative Agent received at its
address specified pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Administrative Agent from such Lender.

                                       14
<PAGE>   21

         2.14 Noteless Agreement; Evidence of Indebtedness.

         (i) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.

         (ii) The Administrative Agent shall maintain accounts in which it will
record (a) the amount of each Loan made hereunder, the Type thereof and, if
applicable, the Interest Period with respect thereto, (b) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (c) the amount of any sum received by the
Administrative Agent hereunder from the Borrowers and each Lender's share
thereof.

         (iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Obligations in accordance with their terms.

         (iv) Any Lender may request that its Loans be evidenced by a promissory
note (a "Note"). In such event, the relevant Borrower shall prepare, execute and
deliver to such Lender a Note payable to the order of such Lender in a form
supplied by the Administrative Agent and reasonably acceptable to the Company.
Thereafter, the Loans evidenced by such Note and interest thereon shall at all
times (including after any assignment pursuant to Section 12.3) be represented
by a Note payable to the order of the payee named therein or any assignee
pursuant to Section 12.3, except to the extent that any such Lender or assignee
subsequently returns any such Note for cancellation and requests that such Loans
once again be evidenced as described in paragraphs (i) and (ii) above.

         2.15 Telephonic Notices.

         The Borrowers hereby authorize the Lenders and the Administrative Agent
to extend, convert or continue Advances, effect selections of Types of Advances
and to transfer funds based on telephonic notices given to the Administrative
Agent by any person or persons listed on Schedule 8, as such Schedule may be
revised by the Company from time to time in accordance with Section 13.1, it
being understood that the foregoing authorization is specifically intended to
allow Borrowing Notices and Conversion/Continuation Notices to be given
telephonically. The Borrowers agree to deliver promptly to the Administrative
Agent a written confirmation, if such confirmation is requested by the
Administrative Agent or any Lender, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material respect
from the action taken by the Administrative Agent and the Lenders, the records
of the Administrative Agent regarding the telephonic notice shall govern absent
manifest error.

                                       15
<PAGE>   22

         2.16 Interest Payment Dates; Interest and Fee Basis.

         Interest accrued on each Floating Rate Advance shall be payable on each
Payment Date, commencing with the first such date to occur after the date
hereof, on any date on which the Floating Rate Advance is prepaid, whether due
to acceleration or otherwise, and at maturity. Interest on Floating Rate Loans
shall be calculated for actual days elapsed on the basis of a 365 or 366-day
year, as appropriate. Interest accrued on that portion of the outstanding
principal amount of any Floating Rate Advance converted into a Eurodollar
Advance on a day other than a Payment Date shall be payable on the date of
conversion. Interest accrued on each Eurodollar Advance shall be payable in
arrears on the last day of its applicable Interest Period, on any date on which
the Eurodollar Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Advance having an Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest shall be calculated
for actual days elapsed on the basis of a 360-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on an Advance shall become
due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.

         2.17 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions.

         Promptly after receipt thereof, the Administrative Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Administrative Agent will notify each Lender, the Company
and the relevant Borrower of the interest rate applicable to each Eurodollar
Advance promptly upon determination of such interest rate and will give each
Lender and the Company prompt notice of each change in the Floating Rate.

         2.18 Lending Installations.

         Each Lender will book its Loans at the appropriate Lending Installation
listed on Schedule 4 or such other Lending Installation designated by such
Lender in accordance with the final sentence of this Section 2.18. All terms of
this Agreement shall apply to any such Lending Installation and the Loans and
any Notes issued hereunder shall be deemed held by each Lender for the benefit
of any such Lending Installation. Each Lender may, by not less than one days'
prior written notice to the Administrative Agent and the Borrowers in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it and for whose account Loan payments are
to be made.

         2.19 Non-Receipt of Funds by the Administrative Agent.

                  (a) Unless the relevant Borrower or a Lender, as the case may
be, notifies the Administrative Agent prior to the date on which it is scheduled
to make payment to the Administrative Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of such Borrower, a payment of principal,
interest or fees to the Administrative Agent for the

                                       16
<PAGE>   23

account of the Lenders, that it does not intend to make such payment, the
Administrative Agent may assume that such payment has been made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Administrative Agent, the recipient of such payment shall, on
demand by the Administrative Agent, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day, or (y) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.

                  (b) The failure of any Lender to make the Loan to be made by
it as part of any Advance shall not relieve any other Lender of its obligation
hereunder to make its Loan on the date of such Advance, but no Lender, except as
otherwise provided in the next sentence of this Section 2.19(b), shall be
responsible for the failure of a Defaulting Lender to make the Loan to be made
by such Defaulting Lender on the date of any Advance. Notwithstanding the
foregoing sentence, but otherwise subject to the terms and conditions of this
Agreement, the Administrative Agent shall notify each Lender of the failure by a
Defaulting Lender to make a Loan required to be made by it hereunder (the
"Unpaid Amount"), and each Lender shall immediately transfer to the
Administrative Agent on such date the lesser of such Lender's proportionate
share (based on its Commitment divided by the Commitments of all Lenders that
have not so failed to fund their Loans) of the Unpaid Amount and its unused
Commitment. Any such transfer shall be deemed to be a Floating Rate Loan by such
Lender. Each Defaulting Lender shall pay on demand to each other Lender that
makes a payment under this Section 2.19(b) the amount paid by such other Lender
to cover such failure, together with interest thereon, for each day from the
date such payment was made until the date such other Lender has been paid such
amount in full, at a rate per annum equal to the Federal Funds Effective Rate
plus two percent (2%).

         2.20 Replacement of Lender.

         If any Borrower is required pursuant to Section 3.1, 3.2 or 3.5 to make
any additional payment to any Lender or if any Lender's obligation to make or
continue, or to convert Floating Rate Advances into, Eurodollar Advances shall
be suspended pursuant to Section 3.3, or if any Lender shall become a Defaulting
Lender (any Lender so affected an "Affected Lender"), the Company may elect, if
such amounts continue to be charged or such suspension is still effective, to
replace such Affected Lender as a Lender party to this Agreement, provided that
no Default or Unmatured Default shall have occurred and be continuing at the
time of such replacement, and provided further that, concurrently with such
replacement, (i) another bank or other entity which is reasonably satisfactory
to the Company and the Administrative Agent shall agree, as of such date, to
purchase for cash the Advances and other Obligations due to the Affected Lender
pursuant to an assignment substantially in the form of Exhibit C and to become a
Lender for all purposes under this Agreement and to assume all obligations of
the Affected Lender to be terminated as of such date and to comply with the
requirements of Section 12.3 applicable to assignments, and (ii) the Borrowers
shall pay to such Affected Lender in same day funds on the day of such
replacement all interest, fees and other amounts then accrued but unpaid to such

                                       17
<PAGE>   24

Affected Lender by the Borrowers hereunder to and including the date of
termination, including without limitation payments due to such Affected Lender
under Sections 3.1, 3.2 and 3.5. Nothing herein shall release any Defaulting
Lender from any obligation it may have to any Borrower, the Administrative Agent
or any other Lender.

                                  ARTICLE III.

                            YIELD PROTECTION; TAXES

         3.1 Yield Protection.

                  (a) If, on or after the date of this Agreement, the adoption
of any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:

         (i) subjects any Lender or any applicable Lending Installation to any
Taxes, or changes the basis of taxation of payments (other than with respect to
Excluded Taxes) to any Lender in respect of its Eurodollar Loans, or

         (ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and assessments taken into
account in determining the interest rate applicable to Eurodollar Advances), or

         (iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of maintaining its
Commitment or making, funding or maintaining its Eurodollar Loans or reduces any
amount receivable by any Lender or any applicable Lending Installation in
connection with its Eurodollar Loans, or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference to its
Commitment or the amount of Eurodollar Loans held or interest received by it, by
an amount deemed material by such Lender, and the result of any of the foregoing
is to increase the cost to such Lender or applicable Lending Installation of
making or maintaining its Eurodollar Loans or Commitment or to reduce the return
received by such Lender or applicable Lending Installation in connection with
such Eurodollar Loans or Commitment, then, within 30 days of demand by such
Lender, the relevant Borrower shall pay such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or reduction in
amount received.

                  (b) Non-U.S. Reserve Costs or Fees With Respect to Loans to
Non-U.S. Borrowers. If any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive of any jurisdiction outside of the
United States of America or any

                                       18
<PAGE>   25

subdivision thereof (whether or not having the force of law) imposes or deems
applicable any reserve requirement against or fee with respect to assets of,
deposits with or for the account of, or credit extended by, any Lender or any
applicable Lending Installation, and the result of the foregoing is to increase
the cost to such Lender or applicable Lending Installation of making or
maintaining its Eurodollar Loans to any Borrower that is not incorporated under
the laws of the United States of America or a state thereof (each a "Non-U.S.
Borrower") or its Commitment to any Non-U.S. Borrower or to reduce the return
received by such Lender or applicable Lending Installation in connection with
such Eurodollar Loans to any Non-U.S. Borrower or Commitment to any Non-U.S.
Borrower, then, within 30 days of demand by such Lender, such Non-U.S. Borrower
shall pay such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction in amount received, provided that
such Non-U.S. Borrower shall not be required to compensate any Lender for such
non-U.S. reserve costs or fees to the extent that an amount equal to such
reserve costs or fees is received by such Lender as a result of the calculation
of the interest rate applicable to Eurodollar Advances pursuant to clause (i)(b)
of the definition of "Eurodollar Rate."

         3.2 Changes in Capital Adequacy Regulations.

         If a Lender determines the amount of capital required or expected to be
maintained by such Lender, any Lending Installation of such Lender or any
corporation controlling such Lender is increased as a result of a Change (as
defined below), then, within 15 days of demand by such Lender, the Company shall
pay such Lender the amount necessary to compensate for any shortfall in the rate
of return on the portion of such increased capital which such Lender determines
is attributable to this Agreement, its Loans or its Commitment to make Loans
hereunder (after taking into account such Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.

         3.3 Availability of Types of Advances.

         If any Lender determines that maintenance of its Eurodollar Loans at a
suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or if the
Required Lenders determine that (i) deposits of a type, currency and maturity
appropriate to match fund Eurodollar Advances are not available or (ii) the
interest rate applicable to Eurodollar Advances does not accurately reflect the
cost of making or maintaining Eurodollar Advances, then the Administrative Agent
shall suspend the availability of Eurodollar

                                       19
<PAGE>   26

Advances and require any affected Eurodollar Advances to be repaid or converted
to Floating Rate Advances at the end of the then current Interest Period for the
affected Eurodollar Advance.

         3.4 Funding Indemnification.

         If any payment of a Eurodollar Advance occurs on a date which is not
the last day of the applicable Interest Period, whether because of acceleration,
prepayment or otherwise, or a Eurodollar Advance is not made on the date
specified by a Borrower for any reason other than default by the Lenders, the
Borrowers will indemnify each Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain such Eurodollar
Advance.

         3.5 Taxes.

         (i) All payments by the Borrowers to or for the account of any Lender
or the Administrative Agent hereunder or under any Note shall be made free and
clear of and without deduction for any and all Taxes. If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, (a) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.5) such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(b) the Borrower shall make such deductions, (c) the Borrower shall pay the full
amount deducted to the relevant authority in accordance with applicable law and
(d) the Borrower shall furnish to the Administrative Agent the original copy of
a receipt evidencing payment thereof within 30 days after such payment is made.

         (ii) In addition, the Borrowers hereby agree to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").

         (iii) The Borrowers hereby agree to indemnify the Administrative Agent
and each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Administrative Agent or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Administrative Agent or such Lender makes demand therefor pursuant
to Section 3.6.

         (iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of the Company and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form W-8BEN or W-8ECI,
certifying in either case that such Lender is entitled to receive payments under
this Agreement from the Company and any other Borrower that is not a Non-U.S.
Borrower without deduction or withholding of any United States federal income
taxes, or (ii) deliver to each of the Company and the Administrative Agent a
United States Internal Revenue Form W-8 or W-9, as the case may be, and

                                       20
<PAGE>   27

certify that it is entitled to an exemption from United States backup
withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of
the Company and the Administrative Agent (x) renewals or additional copies of
such form (or any successor form) on or before the date that such form expires
or becomes obsolete, and (y) after the occurrence of any event requiring a
change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Company or the
Administrative Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form or amendment with respect to it and such Lender advises the Company and the
Administrative Agent that it is not capable of receiving payments from the
Company and any other Borrower that is not a Non-U.S. Borrower without any
deduction or withholding of United States federal income tax.

         (v) For any period during which a Non-U.S. Lender has failed to provide
the Company with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Company shall take such
steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S.
Lender to recover such Taxes.

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

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

                                       21
<PAGE>   28

the Administrative Agent). The obligations of the Lenders under this Section
3.5(vii) shall survive the payment of the Obligations and termination of this
Agreement.

         3.6 Lender Statements; Survival of Indemnity.

         To the extent reasonably possible, each Lender shall designate an
alternate Lending Installation with respect to its Eurodollar Loans to reduce
any liability of the Borrowers to such Lender under Sections 3.1, 3.2 and 3.5 or
to avoid the unavailability of Eurodollar Advances under Section 3.3, so long as
such designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrowers (with a copy to the Administrative Agent) as to the amount due, if
any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth
in reasonable detail the calculations upon which such Lender determined such
amount and shall be final, conclusive and binding on the Borrowers in the
absence of manifest error. Determination of amounts payable under such Sections
in connection with a Eurodollar Loan shall be calculated as though each Lender
funded its Eurodollar Loan through the purchase of a deposit of the type,
currency and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that is
the case or not. Unless otherwise provided herein, the amount specified in the
written statement of any Lender shall be payable on demand after receipt by the
Borrowers of such written statement. The obligations of the Borrowers under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and
termination of this Agreement.

                                  ARTICLE IV.

                              CONDITIONS PRECEDENT

         4.1 Initial Advance.

         The Lenders shall not be required to make the initial Advance hereunder
unless the Borrowers have satisfied the following conditions:

                  (a) Each Borrower has furnished to the Administrative Agent
with sufficient copies for the Lenders:

         (i) Copies of the articles or certificate of incorporation of such
Borrower, together with all amendments, and a certificate of good standing, each
certified by the appropriate governmental officer in its jurisdiction of
incorporation.

         (ii) Copies, certified by the Secretary or Assistant Secretary of such
Borrower, of its by-laws or code of regulations and of its Board of Directors'
resolutions and of resolutions or actions of any other body authorizing the
execution of the Loan Documents to which such Borrower is a party.

         (iii) An incumbency certificate, executed by the Secretary or Assistant
Secretary of such Borrower, which shall identify by name and title and bear the
signatures of the Authorized Officers and any other officers of such Borrower
authorized to sign the Loan Documents to which such Borrower is a party, upon
which certificate the

                                       22
<PAGE>   29

Administrative Agent and the Lenders shall be entitled to rely until informed of
any change in writing by such Borrower.

         (iv) A certificate, signed by the Chief Financial Officer or Treasurer
of such Borrower, stating that on the initial Borrowing Date no Default or
Unmatured Default has occurred and is continuing.

         (v) A written opinion of such Borrower's counsel, addressed to the
Lenders in substantially the form of Exhibit A.

         (vi) Any Notes requested by a Lender pursuant to Section 2.14 payable
to the order of each such requesting Lender.

         (vii) Written money transfer instructions, in substantially the form of
Exhibit D, addressed to the Administrative Agent and signed by an Authorized
Officer, together with such other related money transfer authorizations as the
Administrative Agent may have reasonably requested.

         (viii) Information reasonably satisfactory to the Administrative Agent
regarding the Company's Year 2000 Program.

         (ix) A pro forma covenant compliance certificate in form and substance
reasonably satisfactory to the Administrative Agent from the Chief Financial
Officer or Treasurer of the Company.

         (x) The Guaranty, duly executed by the Company.

         (xi) Such other documents as any Lender or its counsel may have
reasonably requested.

                  (b) Payment of the fees described in the letter agreement
referred to in Section 10.13.

         4.2 Each Advance

         The Lenders shall not be required to make, continue or convert any
Advance unless on the applicable Borrowing Date or date of conversion or
continuation:

         (i) There exists no Default or Unmatured Default.

         (ii) The representations and warranties contained in Article V (other
than Section 5.5, 5.7 and 5.15) are true and correct in all material respects as
of such Borrowing Date except to the extent any such representation or warranty
is stated to relate solely to an earlier date, in which case such representation
or warranty shall have been true and correct on and as of such earlier date.

         (iii) All legal matters incident to the making of such Advance shall be
satisfactory to the Lenders and their counsel.

         (iv) Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied.

                                       23
<PAGE>   30

                                   ARTICLE V.

                         REPRESENTATIONS AND WARRANTIES

         The Company and each of the Borrowers represents and warrants to the
Lenders that:

         5.1 Existence and Standing.

         Each of the Company and its Significant Subsidiaries is a corporation,
partnership (in the case of Subsidiaries only) or limited liability company duly
and properly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing under the
laws of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect.

         5.2 Authorization and Validity.

         Each Borrower has the power and authority and legal right to execute
and deliver the Loan Documents to which it is a party and to perform its
obligations thereunder. The execution and delivery by each Borrower of the Loan
Documents to which it is a party and the performance of its obligations
thereunder have been duly authorized by proper corporate or other proceedings,
and the Loan Documents to which such Borrower is a party constitute legal, valid
and binding obligations of such Borrower enforceable against such Borrower in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.

         5.3 No Conflict; Government Consent.

         Neither the execution and delivery by the Borrowers of the Loan
Documents to which they are a party, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
(i) any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on any Borrower or (ii) any Borrower's articles or certificate of
incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, code or regulations, or operating or other
management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which any Borrower is a party or is
subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of any Borrower pursuant to the
terms of any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by a Borrower, is required to be obtained by any Borrower
in connection with the execution and delivery of the Loan Documents, the
borrowings under this Agreement, the payment and performance by such Borrower of
the Obligations or the legality, validity, binding effect or enforceability of
any of the Loan Documents.

                                       24
<PAGE>   31

         5.4 Financial Statements.

         The following consolidated financial statements heretofore delivered to
the Lenders were prepared in accordance with Agreement Accounting Principles in
effect on the date such statements were prepared and fairly present the
consolidated financial condition and operations of the Company and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended, subject, in the case of such interim statements, to
routine year-end audit adjustments:

         (i) June 30, 1999 audited consolidated financial statements of the
Company and its Subsidiaries; and

         (ii) December 31, 1999 unaudited interim consolidated financial
statements of the Company and its Subsidiaries

         5.5 Material Adverse Change.

         Since June 30, 1999 there has been no change in the business, Property,
prospects, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect.

         5.6 Taxes.

         The Company and its Subsidiaries have filed all United States federal
tax returns and all other tax returns which are required to be filed and have
paid all taxes due pursuant to said returns or pursuant to any assessment
received by the Company or any of its Subsidiaries, except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement Accounting Principles and as to which no
Lien exists. No tax liens have been filed and no claims are being asserted with
respect to any such taxes which could reasonably be expected to have a Material
Adverse Effect. The charges, accruals and reserves on the books of the Company
and its Subsidiaries in respect of any taxes or other governmental charges are
adequate.

         5.7 Litigation and Contingent Obligations.

         Except as set forth on Schedule 7, there is no litigation, arbitration,
governmental investigation, proceeding or inquiry pending or, to the knowledge
of any of their officers, threatened against or affecting the Company or any of
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect or which seeks to prevent, enjoin or delay the making of any Loans. As of
the date of this Agreement, other than any liability incident to any litigation,
arbitration or proceeding which (i) could not reasonably be expected to have a
Material Adverse Effect or (ii) is set forth on Schedule 7, the Company has no
material Contingent Obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.

         5.8 Subsidiaries.

         Schedule 1 contains an accurate list of all Subsidiaries of the Company
(other than immaterial or inactive Subsidiaries) and each Subsidiary Borrower as
of the date of this Agreement, setting forth their respective jurisdictions of
organization and the percentage of their

                                       25
<PAGE>   32

respective capital stock or other ownership interests owned by the Company or
other Subsidiaries. All of the issued and outstanding shares of capital stock or
other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable, except to the extent that the
lack of such status could not reasonably be expected to have a Material Adverse
Effect. The Company may amend Schedule 1 from time to time by delivering to the
Administrative Agent an updated list of Subsidiaries, and the Company may
designate any Subsidiary thereon which is directly or indirectly 80% (or, in the
case of R.P. Scherer S.A., 75%) or more owned by the Company as a Subsidiary
Borrower hereunder so long as (a) the Company guarantees the obligations of such
new Subsidiary Borrower pursuant to the terms of the Guaranty, (b) such new
Subsidiary Borrower delivers all corporate or organizational documents and
authorizing resolutions and legal opinions reasonably requested by the
Administrative Agent and (c) such new Subsidiary Borrower agrees to the terms
and conditions of this Agreement and the Borrowers and the new Subsidiary
Borrower execute all agreements and take such other action reasonably requested
by Administrative Agent. Schedule 1 may be amended to remove any Subsidiary as a
Subsidiary Borrower upon (i) written notice by the Company to the Administrative
Agent to such effect and (ii) repayment in full of all outstanding Loans of such
Subsidiary Borrower.

         5.9 ERISA.

         The Unfunded Liabilities of all Single Employer Plans do not in the
aggregate exceed $75,000,000. Each Single Employer Plan complies in all material
respects with all applicable requirements of law and regulations where the
failure to so comply could reasonably be expected to have a Material Adverse
Effect. No Reportable Event has occurred with respect to any Plan where such
occurrence could reasonably be expected to have a Material Adverse Effect.
Neither the Company or any of its Significant Subsidiaries has withdrawn from
any Plan or initiated steps to do so, and no steps have been taken to reorganize
or terminate any Single Employer Plan where in either instance a liability in
excess of $75,000,000 could reasonably be expected to result.

         5.10 Accuracy of Information.

         No information, exhibit or report furnished by the Company or any of
its Subsidiaries to the Administrative Agent or to any Lender in connection with
the negotiation of, or compliance with, the Loan Documents contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading; provided,
however, that to the extent any such information, exhibits or reports include or
incorporate by reference any forward-looking statement (each, a "Forward-Looking
Statement") which reflects the Company's current view (as of the date such
Forward-Looking Statement is made) with respect to future events, prospects,
projections or financial performance, such Forward-Looking Statement is subject
to uncertainties and other factors which could cause actual results to differ
materially from such Forward-Looking Statement.

         5.11 Regulation U.

         Margin stock (as defined in Regulation U) constitutes less than 25% of
the value of those assets of the Company and its Subsidiaries which are subject
to any limitation on sale, pledge, or other restriction hereunder.

                                       26
<PAGE>   33

         5.12 Material Agreements.

         Neither the Company nor any Subsidiary is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any Subsidiary is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement to
which it is a party, which default could reasonably be expected to have a
Material Adverse Effect.

         5.13 Compliance With Laws.

         The Company and its Subsidiaries have complied with all applicable
statutes, rules, regulations, orders and restrictions of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
conduct of their respective businesses or the ownership of their respective
Property, except for any failure to comply with any of the foregoing which could
not reasonably be expected to have a Material Adverse Effect.

         5.14 Plan Assets; Prohibited Transactions.

         The Company is not an entity deemed to hold "plan assets" within the
meaning of 29 C.F.R. Section 2510.3-101 of an employee benefit plan (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA or any plan
(within the meaning of Section 4975 of the Code), and neither the execution of
this Agreement nor the making of Loans hereunder gives rise to a prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code.

         5.15 Environmental Matters.

         In the ordinary course of its business, the officers of the Company
consider the effect of Environmental Laws on the business of the Company and its
Subsidiaries, in the course of which they identify and evaluate potential risks
and liabilities accruing to the Company due to Environmental Laws. On the basis
of this consideration, the Company has concluded that Environmental Laws cannot
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any Subsidiary has received any notice to the effect that its operations are
not in material compliance with any of the requirements of applicable
Environmental Laws or are the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
toxic or hazardous waste or substance into the environment, which non-compliance
or remedial action could reasonably be expected to have a Material Adverse
Effect.

         5.16 Investment Company Act.

         Neither the Company nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.

         5.17 Public Utility Holding Company Act.

         Neither the Company nor any Subsidiary is a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary

                                       27
<PAGE>   34

company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

         5.18 Year 2000.

         The Company has substantially completed an assessment of the Year 2000
Issues and has a realistic and achievable program for addressing the remediation
of Year 2000 Issues on a timely basis to avoid any impact on the Company and its
Subsidiaries which would reasonably be expected to have a Material Adverse
Effect (the "Year 2000 Program"). As of the date hereof, Year 2000 Issues have
not had a Material Adverse Effect and, based on such assessment and on the Year
2000 Program the Company does not reasonably anticipate that Year 2000 Issues
will hereafter have a Material Adverse Effect.

         5.19 Default.

         There exists no Default or Unmatured Default under Article VII of this
Agreement.

                                  ARTICLE VI.

                                   COVENANTS

         During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:

         6.1 Financial Reporting.

         The Company will maintain, for itself and each Subsidiary, a system of
accounting established and administered in accordance with Agreement Accounting
Principles, and furnish to the Lenders:

         (i) Within 120 days after the close of each of its fiscal years, an
unqualified (except for qualifications relating to changes in accounting
principles or practices reflecting changes in Agreement Accounting Principles
and required or approved by the Company's independent certified public
accountants) audit report certified by independent certified public accountants
reasonably acceptable to the Lenders, prepared in accordance with Agreement
Accounting Principles on a consolidated basis for itself and its Subsidiaries,
including balance sheets as of the end of such period, related profit and loss
statements, and a statement of cash flows, accompanied by a certificate of said
accountants that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any Default
or Unmatured Default, or if, in the opinion of such accountants, any Default or
Unmatured Default shall exist, stating the nature and status thereof.

         (ii) Within 60 days after the close of each of the first three
quarterly periods of each fiscal year, for itself and its Subsidiaries,
consolidated unaudited balance sheets as at the close of each such period and
consolidated unaudited profit and loss statements and a consolidated unaudited
statement of cash flows for the period from the beginning of such fiscal year to
the end of such quarter, all certified by its Chief Financial Officer,
Controller, or Treasurer.

                                       28
<PAGE>   35

         (iii) Together with the financial statements required under Sections
6.1(i) and (ii), a compliance certificate in substantially the form of Exhibit B
signed by its Chief Financial Officer, Controller, or Treasurer and stating that
no Default or Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof.

         (iv) As soon as possible and in any event within 10 Business Days after
the Company knows that any Reportable Event has occurred with respect to any
Plan, a statement, signed by the Chief Financial Officer, Controller, or
Treasurer of the Company, describing said Reportable Event and the action which
the Company proposes to take with respect thereto.

         (v) As soon as possible and in any event within 10 Business Days after
receipt by the Company, a copy of (a) any notice or claim to the effect that the
Company or any of its Subsidiaries is or may be liable to any Person as a result
of the release by the Company, any of its Subsidiaries, or any other Person of
any toxic or hazardous waste or substance into the environment, and (b) any
notice alleging any violation of any federal, state or local environmental,
health or safety law or regulation by the Company or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material Adverse
Effect.

         (vi) Such other information (including non-financial information) as
the Administrative Agent or any Lender may from time to time reasonably request.

         6.2 Use of Proceeds.

         The Company will, and will cause each Subsidiary to, use the proceeds
of the Advances for general corporate purposes, including Acquisitions. The
Company will not, nor will it permit any Subsidiary to, use any of the proceeds
of the Advances to purchase or carry any "margin stock" (as defined in
Regulation U).

         6.3 Notice of Default.

         The Company will, and will cause each Borrower and Significant
Subsidiary to, give prompt notice in writing to the Administrative Agent of the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise (including, without limitation, developments with respect
to Year 2000 Issues), which could reasonably be expected to have a Material
Adverse Effect.

         6.4 Conduct of Business.

         The Company will, and will cause each Significant Subsidiary to, carry
on and conduct its business in substantially the same manner and in
substantially the same fields of enterprise as it is presently conducted or
fields related thereto (except that the Company and its Significant Subsidiaries
shall have no duty to renew or extend contracts which expire by their terms) and
do all things necessary to remain duly incorporated or organized, validly
existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its

                                       29
<PAGE>   36

business is conducted, unless the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

         6.5 Taxes.

         The Company will, and will cause each Significant Subsidiary to, timely
file complete and correct United States federal and applicable foreign, state
and local tax returns required by law and pay when due all taxes, assessments
and governmental charges and levies upon it or its income, profits or Property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Agreement Accounting Principles, except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

         6.6 Insurance.

         The Company will, and will cause each Significant Subsidiary to,
maintain as part of a self-insurance program or with financially sound and
reputable insurance companies insurance on all their Property in such amounts
(with such customary deductibles, exclusions and self-insurance) and covering
such risks as is consistent with sound business practice.

         6.7 Compliance with Laws.

         The Company will, and will cause each Significant Subsidiary to, comply
with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject including, without limitation, all
Environmental Laws, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

         6.8 Inspection.

         The Company will, and will cause each Significant Subsidiary to, permit
the Administrative Agent and the Lenders, by their respective representatives
and agents, to inspect any of the Property, books and financial records of the
Company and each Significant Subsidiary, to examine and make copies of the books
of accounts and other financial records of the Company and each Significant
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each Significant Subsidiary with, and to be advised as to the same by, their
respective officers upon reasonable prior notice at such reasonable times and
intervals as the Administrative Agent or any Lender may designate, provided that
neither the Company nor any of its Subsidiaries shall be responsible for the
costs and expenses incurred by the Administrative Agent, any Lender, or their
representatives in connection with such inspection prior to the occurrence and
continuation of a Default.

         6.9 Merger.

         The Company will not, nor will it permit any Significant Subsidiary to,
merge or consolidate with or into any other Person, except that, provided that
no Default or Unmatured Default shall have occurred and be continuing or would
result therefrom on a pro forma basis reasonably acceptable to the
Administrative Agent, the Company may merge or consolidate with any other U.S.
corporation and each Significant Subsidiary may merge or consolidate with any
other Person, provided, further, that (i) in the case of any such merger or
consolidation involving the Company, the Company is the surviving corporation
and (ii) in the case of any such merger

                                       30
<PAGE>   37

or consolidation involving a Significant Subsidiary which is a Subsidiary
Borrower, the surviving corporation assumes all of such Borrower's obligations
under this Agreement and remains or becomes a Subsidiary Borrower.

         6.10 Sale of Assets.

         The Company will not, nor will it permit any Significant Subsidiary to,
lease, sell or otherwise dispose of its Property, to any other Person (other
than the Company or another Subsidiary), except:

         (i) Sales of inventory in the ordinary course of business.

         (ii) Sales or other dispositions in the ordinary course of business of
fixed assets for the purpose of replacing such fixed assets, provided that such
fixed assets are replaced within 360 days of such sale or other disposition with
other fixed assets which have a fair market value not materially less than the
fixed assets sold or otherwise disposed of.

         (iii) Sales or other dispositions outside the ordinary course of
business of accounts receivable, lease receivables, leases or equipment which
had been leased by the Company or such Significant Subsidiary, provided that any
such sale or other disposition is for reasonably equivalent value and could not
reasonably be expected to have a Material Adverse Effect.

         (iv) Other leases, sales (including sale-leasebacks) or other
dispositions of its Property that, together with all other Property of the
Company and its Subsidiaries previously leased, sold or disposed of (other than
as provided in clauses (i), (ii) and (iii) above) as permitted by this Section
during the twelve-month period ending with the month prior to the month in which
any such lease, sale or other disposition occurs, do not constitute a
Substantial Portion of the Property of the Company and its Subsidiaries, or
together with all other Property of the Company and its Subsidiaries previously
leased, sold or disposed of (other than as provided in clauses (i) and (ii)
above) as permitted by this Section during the period from the date of this
Agreement to the end of the month prior to the month in which any such lease,
sale or other disposition occurs, do not constitute 35% of the consolidated
assets of the Company and its Subsidiaries as would be shown in the consolidated
financial statements of the Company and its Subsidiaries as at the beginning of
the fiscal year in which any such lease, sale or other disposition occurs.

         Notwithstanding anything in this Section 6.10 to the contrary, (a) no
such leases, sales or other dispositions of property may be made (other than
pursuant to clause (i) above) if any Default or Unmatured Default has occurred
and is continuing, and (b) all leases, sales and other dispositions of Property
at any time shall be for not less than the fair market value of such Property as
determined in good faith by the Company.

         6.11 Investments.

         The Company will not, nor will it permit any Significant Subsidiary to,
make or suffer to exist any Investments, or commitments therefor, or to create
any Subsidiary or to become or remain a partner in any partnership or joint
venture, except:

                                       31
<PAGE>   38

         (i) Cash Equivalent Investments.

         (ii) Investments in Subsidiaries.

         (iii) other Investments in existence on the date hereof.

         (iv) Other Investments provided that the aggregate amount of such
Investments made in any fiscal year does not exceed 25% of Adjusted Tangible Net
Worth as of the beginning of such fiscal year.

         6.12 Liens.

         The Company will not, nor will it permit any Significant Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the
Company or any of its Significant Subsidiaries, except:

         (i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or thereafter can
be paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.

         (ii) Liens imposed by law, such as landlord's, carriers',
warehousemen's and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not more than 60
days past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with Agreement
Accounting Principles shall have been set aside on its books.

         (iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation (other than Liens in
favor of the PGBC).

         (iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of the Company or its Subsidiaries.

         (v) Liens existing on the date hereof.

         (vi) Liens on any assets which exist at the time of acquisition of such
assets by the Company or any of its Subsidiaries, or liens to secure the payment
of all of any part of the purchase price of such assets upon the acquisition of
such assets by the Company or any of its Subsidiaries or to secure any
Indebtedness incurred or guaranteed by the Company or any of its Subsidiaries
prior to, at the time, of or within 360 days after, such acquisition (or, in the
case of real property, the completion of construction (including any
improvements on an existing asset) or commencement of full operation of such
asset, whichever is later), which Indebtedness is incurred or guaranteed for the
purpose of financing all or any part of the purchase price thereof or, in the
case of real property, construction or improvements thereon, provided, however,
that in the case of any such acquisition, construction or improvement, the Lien
shall not apply to such assets

                                       32
<PAGE>   39

theretofore owned by the Company or any of its Subsidiaries other than, in the
case of any such construction or improvement, any real property on which the
property so constructed, or the improvement, is located, provided further,
however, that the aggregate outstanding principal amount of Indebtedness secured
by Liens permitted by this Section 6.12(vi) shall not at any time exceed
$250,000,000.

         (vii) Liens in favor of the United States of America or any State
thereof, or any department, agency or instrumentality or political subdivision
of the United States of America or any State thereof, or in favor of any other
country or any political subdivision thereof, to secure partial, progress,
advance or other payments pursuant to any contract or statute or to secure any
Indebtedness incurred or guaranteed for the purpose of financing all or any part
of the purchase price (or, in the case of real property, the cost of
construction), of the assets subject to such liens (including without limitation
liens incurred in connection with pollution control, industrial revenue or
similar financings).

         (viii) Any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in the
foregoing clauses, provided, however, that the principal amount of Indebtedness
secured thereby shall not exceed the principal amount of Indebtedness so secured
prior to such extension, renewal or replacement and that such extension, renewal
or replacement Lien shall be limited to all or a part of the assets which
secured the Lien so extended, renewed or replaced (plus improvements and
construction on such real property).

         (ix) So long as no Default under Section 7.9 would occur in connection
therewith, Liens created by or resulting from any litigation or other proceeding
which is being contested in good faith by appropriate proceedings, including
Liens arising out of judgments or awards against the Company or any of its
Subsidiaries with respect to which the Company or such Subsidiary is in good
faith prosecuting an appeal or proceeding for review or for which the time to
make an appeal has not yet expired; or final unappealable judgment Liens which
are satisfied within 15 days of the date of judgment; or Liens incurred by the
Company or any of its Subsidiaries for the purpose of obtaining a stay or
discharge in the course of any litigation or other proceeding to which the
Company or such Subsidiary is a party.

         (x) Liens securing Indebtedness described in Section 6.14(iv) and (v).

         (xi) Liens securing Indebtedness and not otherwise permitted by the
foregoing provisions of this Section 6.12, provided that the aggregate
outstanding principal amount of the Indebtedness secured by all such Liens shall
not at any time exceed 25% of Adjusted Tangible Net Worth.

         6.13 Year 2000.

         The Company and its Subsidiaries have taken and will continue to take
all such actions as are reasonably necessary to successfully implement the Year
2000 Program and to assure that Year 2000 Issues will not have a Material
Adverse Effect. At the request of the Administrative Agent, the Company will
provide a description of the Year 2000 Program, together with any updates or
progress reports with respect thereto.

                                       33
<PAGE>   40

         6.14 Subsidiary Indebtedness.

         The Company will not permit any Subsidiary to create, incur or suffer
to exist any Indebtedness, except:

         (i) The Loans.

         (ii) Indebtedness outstanding on the date of this Agreement or incurred
pursuant to commitments in existence on the date of this Agreement.

         (iii) Indebtedness of any Subsidiary to the Company or any other
Subsidiary.

         (iv) Indebtedness of any Person that becomes a Subsidiary after the
date hereof; provided that such Indebtedness existed at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary.

         (v) Any refunding or refinancing of any Indebtedness referred to in
clauses (i) through (iv) above, provided that any such refunding or refinancing
of Indebtedness referred to in clause (ii), (iii) or (iv) does not increase the
principal amount thereof.

         (vi) Indebtedness arising from (a) the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, or (b) the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the ordinary course of
business.

         (vii) Indebtedness arising from guarantees of loans and advances by
third parties to employees and officers of a Subsidiary in the ordinary course
of business for bona fide business purposes, provided that the aggregate
outstanding principal amount of such Indebtedness does not at any time exceed
$100,000,000.

         (viii) Indebtedness of a Subsidiary arising from agreements providing
for indemnification, adjustment of purchase price or similar obligations or from
guarantees, letters of credit, surety bonds or performance bonds securing any
obligations of the Company or any of its Subsidiaries incurred or assumed in
connection with the disposition of any business, property or Subsidiary.

         (ix) Indebtedness arising from Rate Hedging Obligations.

         (x) Contingent Obligations.

         (xi) Indebtedness outstanding under investment grade commercial paper
programs.

         (xii) Other Indebtedness; provided that, at the time of the creation,
incurrence or assumption of such other Indebtedness and after giving effect
thereto, the aggregate amount of all such other Indebtedness of the Subsidiaries
does not exceed an amount equal to 25% of Adjusted Tangible Net Worth at such
time.

                                       34
<PAGE>   41

         6.15 Limitation on Restrictions on Significant Subsidiary
Distributions.

         The Company will not, and will not permit any Significant Subsidiary
to, enter into or suffer to exist or become effective any consensual encumbrance
or restriction on the ability of any Significant Subsidiary of the Company to
(i) pay dividends or make any other distributions in respect of any capital
stock of such Subsidiary held by, or pay any Indebtedness owed to, the Company
or any other Subsidiary of the Company, (ii) make loans or advances to the
Company or any other Subsidiary of the Company or (iii) transfer any of its
assets to the Company or any other Subsidiary of the Company, except for such
encumbrances or restrictions existing under or by reason of (a) any restrictions
existing under the Loan Documents, (b) any restrictions with respect to a
Significant Subsidiary imposed pursuant to an agreement which has been entered
into in connection with the disposition of all or substantially all of the
capital stock or assets of such Subsidiary, and (c) any restrictions with
respect to assets encumbered by a Lien permitted by Section 6.12 so long as such
restriction applies only to the asset encumbered by such permitted Lien.

         6.16 Contingent Obligations.

         The Company will not, nor will it permit any Subsidiary to, make or
suffer to exist any Contingent Obligation (including, without limitation, any
Contingent Obligation with respect to the obligations of a Subsidiary), except
(i) by endorsement of instruments for deposit or collection in the ordinary
course of business, (ii) the Guaranty, (iii) Contingent Obligations of
special-purpose finance Subsidiaries, provided that no Person has recourse
against the Company or any Significant Subsidiary for such Contingent
Obligations, (iv) Contingent Obligations arising from the sale by Pyxis
Corporation of lease receivables, leases or equipment, provided that the
aggregate amount of such Contingent Obligations do not at any time exceed 10% of
Adjusted Tangible Net Worth, (v) Contingent Obligations arising out of operating
or synthetic leases entered into by Subsidiaries of the Company, provided that
the aggregate amount of such Contingent Obligations do not at any time exceed
25% of Adjusted Tangible Net Worth, and (vi) Contingent Obligations in addition
to those described in (i)-(v) above, provided that the aggregate amount of such
additional Contingent Obligations (without duplication) do not at any time
exceed 25% of Adjusted Tangible Net Worth.

         6.17 Minimum Net Worth.

         The Company shall not permit its Net Worth to be less than
$2,550,000,000 at any time.

                                  ARTICLE VII.

                                    DEFAULTS

         The occurrence of any one or more of the following events shall
constitute a Default:

         7.1. Any representation or warranty made or deemed made by or on behalf
of the Company or any of its Subsidiaries to the Lenders or the Administrative
Agent under or in connection with this Agreement, any Loan, or any certificate
or information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.

                                       35
<PAGE>   42

         7.2. Nonpayment of principal of any Loan within one day after the same
becomes due, or nonpayment of interest upon any Loan or of any commitment fee or
other obligations under any of the Loan Documents within five days after the
same becomes due.

         7.3. The breach by the Company of Sections 6.3, 6.9, 6.10, 6.14, 6.16,
or 6.17.

         7.4. The breach by any Borrower (other than a breach which constitutes
a Default under another Section of this Article VII) of any of the terms or
provisions of this Agreement which is not remedied within thirty days after
written notice from the Administrative Agent or any Lender.

         7.5. Failure of the Company or any of its Significant Subsidiaries to
pay when due any principal, interest or other amounts, subject to any applicable
grace period, or the default by the Company or any of its Significant
Subsidiaries in the performance beyond the applicable grace period with respect
thereto, if any, of any term, provision or condition contained in the Five Year
Credit Agreement or any agreement or agreements under which any Indebtedness in
excess of 2% of Adjusted Tangible Net Worth was created or is governed, or any
other event shall occur or condition exist, the effect of which default or event
is to cause, or to permit the holder or holders of such Indebtedness to cause,
such Indebtedness to become due prior to its stated maturity; or any such
Indebtedness of the Company or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Company or any of its Significant Subsidiaries shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.

         7.6. The Company or any of its Significant Subsidiaries shall (i) have
an order for relief entered with respect to it under the Federal bankruptcy laws
as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (v) take any corporate or partnership action to authorize or
effect any of the foregoing actions set forth in this Section 7.6 or (vi) fail
to contest in good faith any appointment or proceeding described in Section 7.7.

         7.7. Without the application, approval or consent of the Company or any
of its Significant Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Company or any of its Significant
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the Company or any of
its Significant Subsidiaries and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 60 consecutive
days.

         7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of the Company and its Subsidiaries which, when taken together with
all other Property of the Company and its Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the

                                       36
<PAGE>   43

twelve-month period ending with the month in which any such action occurs,
constitutes a Substantial Portion.

         7.9. The Company or any of its Significant Subsidiaries shall fail
within 60 days to pay, bond or otherwise discharge one or more (i) judgments or
orders for the payment of money (not covered by insurance)in excess of 2% of
Adjusted Tangible Net Worth (or the equivalent thereof in currencies other than
U.S. Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, which judgment(s), in either such case, is/are not
stayed on appeal or otherwise being appropriately contested in good faith.

         7.10. Any member of the Controlled Group shall fail to pay when due an
amount or amounts aggregating in excess of $75,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Single Employer Plan with Unfunded Liabilities in excess of $20,000,000 (a
"Material Plan") shall be filed under Section 4041(c) of ERISA by any member of
the Controlled Group, any plan administrator or any combination of the
foregoing; or PBGC shall institute proceedings under which it is likely to
prevail under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee
to be appointed to administer any Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree adjudicating that
any Material Plan must be terminated; or there shall occur a complete or partial
withdrawal from, or a default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which causes one or more
members of the Controlled Group to incur a current payment obligation in excess
of $75,000,000.

         7.11. Any Change in Control shall occur.

         7.12. The Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty, or the Company shall fail to comply with any
of the terms or provisions of the Guaranty, or the Company shall deny that it
has any further liability under the Guaranty, or shall give notice to such
effect.

                                 ARTICLE VIII.

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

         8.1 Acceleration.

         If any Default described in Section 7.6 or 7.7 occurs with respect to
the Company or any of its Significant Subsidiaries, the obligations of the
Lenders to make Loans hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Administrative Agent or any Lender. If any other
Default occurs and is continuing, the Required Lenders (or the Administrative
Agent with the consent of the Required Lenders) may terminate or suspend the
obligations of the Lenders to make Loans hereunder, or declare the Obligations
to be due and payable, or both, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Company hereby expressly waives.

                                       37
<PAGE>   44

         If, within 60 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Company) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Company, rescind and annul such
acceleration and/or termination.

         8.2 Amendments.

         Subject to the provisions of this Article VIII, the Required Lenders
(or the Administrative Agent with the consent in writing of the Required
Lenders) and the Borrowers may enter into written agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents or
changing in any manner the rights of the Lenders or the Borrowers hereunder or
waiving any Default hereunder; provided, however, that no such supplemental
written agreement shall, without the consent of all of the Lenders:

         (i) Extend the final maturity of any Loan or postpone any regularly
scheduled payment of principal of any Loan or forgive all or any portion of the
principal amount thereof, or reduce the rate or extend the time of payment of
interest or fees thereon.

         (ii) Reduce the percentage specified in the definition of Required
Lenders.

         (iii) Extend the Facility Termination Date or reduce the amount or
extend the payment date for, the mandatory payments required under Section 2.2,
or increase the amount of the Aggregate Commitment or of the Commitment of any
Lender hereunder, or permit any Borrower to assign its rights under this
Agreement (other than as may be permitted pursuant to Section 6.9).

         (iv) Amend this Section 8.2.

         (v) Release the Company as guarantor of any Advance.

         No amendment of any provision of this Agreement relating to the
Administrative Agent shall be effective without the written consent of the
Administrative Agent. The Administrative Agent may waive payment of the fee
required under Section 12.3.2 without obtaining the consent of any other party
to this Agreement.

         Notwithstanding anything herein to the contrary, no Defaulting Lender
shall be entitled to vote (whether to consent or to withhold its consent) with
respect to any amendment, modification, termination or waiver requiring the
consent of the Required Lenders, and, for purposes of determining the Required
Lenders, the Commitments and the Loans of each Defaulting Lender shall be
disregarded.

         8.3 Preservation of Rights

         No delay or omission of the Lenders or the Administrative Agent to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
a Borrower to satisfy the conditions precedent to such Loan shall not constitute
any waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or

                                       38
<PAGE>   45

other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Administrative
Agent and the Lenders until the Obligations have been paid in full.

                                  ARTICLE IX.

                               GENERAL PROVISIONS

         9.1 Survival of Representations.

         All representations and warranties of the Borrowers contained in this
Agreement shall survive the making of the Loans herein contemplated.

         9.2 Governmental Regulation.

         Anything contained in this Agreement to the contrary notwithstanding,
no Lender shall be obligated to extend credit to the Borrowers in violation of
any limitation or prohibition provided by any applicable statute or regulation.

         9.3 Headings.

         Section headings in the Loan Documents are for convenience of reference
only, and shall not govern the interpretation of any of the provisions of the
Loan Documents.

         9.4 Entire Agreement.

         The Loan Documents embody the entire agreement and understanding among
the Borrowers, the Administrative Agent and the Lenders and supersede all prior
agreements and understandings among the Borrowers, the Administrative Agent and
the Lenders relating to the subject matter thereof other than the fee letter
described in Section 10.13.

         9.5 Several Obligations; Benefits of this Agreement.

         The respective obligations of the Lenders hereunder are several and not
joint and no Lender shall be the partner or agent of any other (except to the
extent to which the Administrative Agent is authorized to act as such). The
failure of any Lender to perform any of its obligations hereunder shall not
relieve any other Lender from any of its obligations hereunder. This Agreement
shall not be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
assigns, provided, however, that the parties hereto expressly agree that the
Lead Arranger shall enjoy the benefits of the provisions of Sections 9.6, 9.10
and 10.11 to the extent specifically set forth therein and shall have the right
to enforce such provisions on its own behalf and in its own name to the same
extent as if it were a party to this Agreement.

                                       39
<PAGE>   46

         9.6 Expenses; Indemnification.

                  (i) The Borrowers shall reimburse the Administrative Agent and
         the Lead Arranger for any reasonable costs, internal charges and
         out-of-pocket expenses (including reasonable attorneys' fees and time
         charges of attorneys for the Administrative Agent, which attorneys may
         be employees of the Administrative Agent but subject to any limitations
         contained in the letter from Dickinson Wright PLLC to Bank One dated
         February 25, 2000) paid or incurred by the Administrative Agent or the
         Lead Arranger in connection with the preparation, investigation,
         negotiation, execution, delivery, syndication, review, amendment,
         modification, and administration of the Loan Documents, whether
         incurred prior to or subsequent to closing. The Borrowers also agree to
         reimburse the Administrative Agent, the Lead Arranger and the Lenders
         for any costs, internal charges and out-of-pocket expenses (including
         reasonable attorneys' fees and time charges of attorneys for the
         Administrative Agent, the Lead Arranger and the Lenders, which
         attorneys may be employees of the Administrative Agent, the Lead
         Arranger or the Lenders) paid or incurred by the Administrative Agent,
         the Lead Arranger or any Lender in connection with the collection and
         enforcement of the Loan Documents.

                  (ii) The Company hereby further agrees to indemnify the
         Administrative Agent, the Lead Arranger and each Lender, its directors,
         officers and employees against all losses, claims, damages, penalties,
         judgments, liabilities and expenses (including, without limitation, all
         reasonable expenses of litigation or preparation therefor whether or
         not the Administrative Agent, the Lead Arranger or any Lender is a
         party thereto) which any of them may pay or incur arising out of or
         relating to this Agreement, the other Loan Documents, the transactions
         contemplated hereby or the direct or indirect application or proposed
         application of the proceeds of any Loan hereunder except to the extent
         that they are determined in a final non-appealable judgment by a court
         of competent jurisdiction to have resulted from the gross negligence or
         willful misconduct of the party seeking indemnification. The
         obligations of the Company under this Section 9.6 shall survive the
         termination of this Agreement.

         9.7 Numbers of Documents.

         All statements, notices, closing documents, and requests hereunder
shall be furnished to the Administrative Agent with sufficient counterparts so
that the Administrative Agent may furnish one to each of the Lenders.

         9.8 Accounting.

         Except as provided to the contrary herein, all accounting terms used
herein shall be interpreted and all accounting determinations hereunder shall be
made in accordance with Agreement Accounting Principles except that any
calculation or determination which is to be made on a consolidated basis shall
be made for the Company and all its Subsidiaries, including those Subsidiaries,
if any, which are unconsolidated on the Company's audited financial statements.

                                       40
<PAGE>   47

         9.9 Severability of Provisions.

         Any provision in any Loan Document that is held to be inoperative,
unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the remaining
provisions in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the provisions of all
Loan Documents are declared to be severable.

         9.10 Nonliability of Lenders.

         The relationship between the Company on the one hand and the Lenders
and the Administrative Agent on the other hand shall be solely that of borrower
and lender. Neither the Administrative Agent, the Lead Arranger nor any Lender
shall have any fiduciary responsibilities to the Company solely by reason of
being a party to this Agreement. Neither the Administrative Agent, the Lead
Arranger nor any Lender undertakes any responsibility to the Company to review
or inform the Company of any matter in connection with any phase of the
Company's business or operations. The Company agrees that neither the
Administrative Agent, the Lead Arranger nor any Lender shall have liability to
the Company (whether sounding in tort, contract or otherwise) for losses
suffered by the Company in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by
the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non-appealable judgment by a court
of competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Administrative Agent, the Lead Arranger nor any Lender shall have any liability
with respect to, and the Company hereby waives, releases and agrees not to sue
for, any special, indirect or consequential damages suffered by the Company in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.

         9.11 Confidentiality.

         Each of the Administrative Agent and each Lender agrees to hold any
confidential information which it may receive from the Company pursuant to this
Agreement in confidence, except for disclosure (i) to its Affiliates and to
other Lenders and their respective Affiliates, (ii) to legal counsel,
accountants, and other professional advisors to such Lender or the
Administrative Agent or, subject to Section 12.4, to a Transferee, (iii) to
regulatory officials, (iv) to any Person as required by law, regulation, or
legal process, (v) to any Person in connection with any legal proceeding to
which such Lender is a party, (vi) to such Lender's contractual counterparties
in swap agreements or to legal counsel, accountants and other professional
advisors to such counterparties, (vii) permitted by Section 12.4, and (viii) to
rating agencies if requested or required by such agencies in connection with a
rating relating to the Advances hereunder, provided that reasonable advance
written notice is given to the Company.

         9.12 Nonreliance.

         Each Lender hereby represents that it is not relying on or looking to
any margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) for the repayment of the Loans provided for herein.

                                       41
<PAGE>   48

                                   ARTICLE X.

                                   THE AGENT

         10.1 Appointment; Nature of Relationship.

         Bank One is hereby appointed by each of the Lenders as its contractual
representative (herein referred to as the "Administrative Agent") hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Administrative Agent
(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.

         10.2 Powers.

         The Administrative Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Administrative Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Administrative Agent shall have no implied duties to the
Lenders, or any obligation to the Lenders to take any action thereunder except
any action specifically provided by the Loan Documents to be taken by the
Administrative Agent.

         10.3 General Immunity.

         Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be liable to the Company, the Lenders or any Lender
for any action taken or omitted to be taken by it or them hereunder or under any
other Loan Document or in connection herewith or therewith except to the extent
such action or inaction is determined in a final non-appealable judgment by a
court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of such Person.

         10.4 No Responsibility for Loans, Recitals, etc.

         Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be responsible for or have any duty to ascertain,
inquire into, or verify (a) any statement, warranty or representation made in
connection with any Loan Document or any borrowing

                                       42
<PAGE>   49

hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Administrative Agent;
(d) the existence or possible existence of any Default or Unmatured Default; (e)
the validity, enforceability, effectiveness, sufficiency or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith; (f) the value, sufficiency, creation, perfection or priority of any
Lien in any collateral security; or (g) the financial condition of the Company
or any guarantor of any of the Obligations or of any of the Company's or any
such guarantor's respective Subsidiaries. The Administrative Agent shall have no
duty to disclose to the Lenders information that is not required to be furnished
by the Company to the Administrative Agent at such time, but is voluntarily
furnished by the Company to the Administrative Agent (either in its capacity as
Administrative Agent or in its individual capacity).

         10.5 Action on Instructions of Lenders.

         The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder and under any other Loan
Document in accordance with written instructions signed by the Required Lenders,
and such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders. The Lenders hereby acknowledge that the
Administrative Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this Agreement or any
other Loan Document unless it shall be requested in writing to do so by the
Required Lenders. The Administrative Agent shall be fully justified in failing
or refusing to take any action hereunder and under any other Loan Document
unless it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.

         10.6 Employment of Agents and Counsel.

         The Administrative Agent may execute any of its duties as
Administrative Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Administrative Agent shall be entitled
to advice of counsel concerning the contractual arrangement between the
Administrative Agent and the Lenders and all matters pertaining to the
Administrative Agent's duties hereunder and under any other Loan Document.

         10.7 Reliance on Documents; Counsel.

         The Administrative Agent shall be entitled to rely upon any Note,
notice, consent, certificate, affidavit, letter, telegram, statement, paper or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Administrative Agent, which counsel may be
employees of the Administrative Agent.

                                       43
<PAGE>   50

         10.8 Administrative Agent's Reimbursement and Indemnification.

         The Lenders agree to reimburse and indemnify the Administrative Agent
ratably in proportion to their respective Commitments (or, if the Commitments
have been terminated, in proportion to their Commitments immediately prior to
such termination) (i) for any amounts not reimbursed by the Company for which
the Administrative Agent is entitled to reimbursement by the Company under the
Loan Documents (other than the fee payable pursuant to Section 10.13), (ii) for
any other expenses incurred by the Administrative Agent on behalf of the
Lenders, in connection with the preparation, execution, delivery, administration
and enforcement of the Loan Documents (including, without limitation, for any
expenses incurred by the Administrative Agent in connection with any dispute
between the Administrative Agent and any Lender or between two or more of the
Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of the Loan Documents
or any other document delivered in connection therewith or the transactions
contemplated thereby (including, without limitation, for any such amounts
incurred by or asserted against the Administrative Agent in connection with any
dispute between the Administrative Agent and any Lender or between two or more
of the Lenders), or the enforcement of any of the terms of the Loan Documents or
of any such other documents, provided that (i) no Lender shall be liable for any
of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the Administrative Agent and
(ii) any indemnification required pursuant to Section 3.5(vii) shall,
notwithstanding the provisions of this Section 10.8, be paid by the relevant
Lender in accordance with the provisions thereof. The obligations of the Lenders
under this Section 10.8 shall survive payment of the Obligations and termination
of this Agreement.

         10.9 Notice of Default.

         The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Unmatured Default hereunder unless
the Administrative Agent has received written notice from a Lender or the
Company referring to this Agreement describing such Default or Unmatured Default
and stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders.

         10.10 Rights as a Lender.

         In the event the Administrative Agent is a Lender, the Administrative
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Administrative Agent, and the term
"Lender" or "Lenders" shall, at any time when the Administrative Agent is a
Lender, unless the context otherwise indicates, include the Administrative Agent
in its individual capacity. The Administrative Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Company or any of its
Subsidiaries in which the Company or such

                                       44
<PAGE>   51

Subsidiary is not restricted hereby from engaging with any other Person. The
Administrative Agent, in its individual capacity, is not obligated to remain a
Lender.

         10.11 Lender Credit Decision.

         Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, the Lead Arranger or any other Lender
and based on the financial statements prepared by the Company and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent, the Lead Arranger or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.

         10.12 Successor Administrative Agent.

         The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Company, such resignation to be effective
upon the appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, forty-five days after the retiring
Administrative Agent gives notice of its intention to resign. The Administrative
Agent may be removed at any time with or without cause by written notice
received by the Administrative Agent from the Required Lenders, such removal to
be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Company and the Lenders, a successor Administrative Agent, which
successor Administrative Agent shall (unless a Default shall have occurred and
be continuing) be approved by the Company (which approval shall not be
unreasonably withheld or delayed). If no successor Administrative Agent shall
have been so appointed by the Required Lenders within thirty days after the
resigning Administrative Agent's giving notice of its intention to resign, then
the resigning Administrative Agent may appoint, on behalf of the Company and the
Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, without the consent of any Lender but upon thirty days prior written
notice to the Lenders and the Company, the Administrative Agent may appoint any
of its Affiliates which is a commercial bank as a successor Administrative Agent
hereunder, which successor Administrative Agent shall (unless a Default shall
have occurred and be continuing) be approved by the Company (which approval
shall not be unreasonably withheld or delayed). If the Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Company shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
having capital and retained earnings of at least $5,000,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and

                                       45
<PAGE>   52

under the Loan Documents. After the effectiveness of the resignation or removal
of an Administrative Agent, the provisions of this Article X shall continue in
effect for the benefit of such Administrative Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the Administrative
Agent hereunder and under the other Loan Documents. In the event that there is a
successor to the Administrative Agent by merger, or the Administrative Agent
assigns its duties and obligations to an Affiliate pursuant to this Section
10.12, then the term "Corporate Base Rate" as used in this Agreement shall mean
the prime rate, base rate or other analogous rate of the new Administrative
Agent.

         10.13 Administrative Agent's Fee.

         The Company agrees to pay to the Administrative Agent, for its own
account, the fees agreed to by the Company, the Lead Arranger and the
Administrative Agent pursuant to that certain letter agreement dated January 26,
2000 or as otherwise agreed from time to time.

         10.14 Delegation to Affiliates.

         The Company and the Lenders agree that the Administrative Agent may
delegate any of its duties under this Agreement to any of its Affiliates. Any
such Affiliate (and such Affiliate's directors, officers, agents and employees)
which performs duties in connection with this Agreement shall be entitled to the
same benefits of the indemnification, waiver and other protective provisions to
which the Administrative Agent is entitled under Articles IX and X.

         10.15 Administrative Agent, Syndication Agent, Documentation Agents,
Lead Arranger, etc.

         Neither the Syndication Agent, the Documentation Agents nor the Lead
Arranger shall have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, none of such Lenders or the Administrative Agent
shall have or be deemed to have a fiduciary relationship with any Lender. Each
Lender hereby makes the same acknowledgments with respect to such Lenders as it
makes with respect to the Administrative Agent in Section 10.11.

                                  ARTICLE XI.

                            SETOFF; RATABLE PAYMENTS

         11.1 Setoff.

         In addition to, and without limitation of, any rights of the Lenders
under applicable law, if any Borrower becomes insolvent, however evidenced, or
any Default occurs and is continuing, any and all deposits (including all
account balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of any Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part hereof, shall then be due.

                                       46
<PAGE>   53

         11.2 Ratable Payments.

         If any Lender, whether by setoff or otherwise, has payment made to it
upon its Loans (other than payments received pursuant to Section 3.1, 3.2, 3.4
or 3.5) in a greater proportion than that received by any other Lender, such
Lender agrees, promptly upon demand, to purchase a portion of the Loans held by
the other Lenders so that after such purchase each Lender will hold its ratable
proportion of Loans. If any Lender, whether in connection with setoff or amounts
which might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to setoff,
such Lender agrees, promptly upon demand, to take such action necessary such
that all Lenders share in the benefits of such collateral ratably in proportion
to their Loans. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.

         If an amount to be setoff is to be applied to Indebtedness of the
Company to a Lender other than Indebtedness comprised of Loans made by such
Lender, such amount shall be applied ratably to such other Indebtedness and to
the Indebtedness comprised of such Loans.

                                  ARTICLE XII.

               BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

         12.1 Successors and Assigns.

         The terms and provisions of the Loan Documents shall be binding upon
and inure to the benefit of the Borrowers and the Lenders and their respective
successors and assigns, except that (i) the Borrowers shall not have the right
to assign their rights or obligations under the Loan Documents and (ii) any
assignment by any Lender must be made in compliance with Section 12.3.
Notwithstanding clause (ii) of this Section, any Lender may at any time, without
the consent of the Borrowers or the Administrative Agent, assign all or any
portion of its rights under this Agreement and any Note to a Federal Reserve
Bank; provided, however, that no such assignment to a Federal Reserve Bank shall
release the transferor Lender from its obligations hereunder. The Administrative
Agent may treat the Person which made any Loan or which holds any Note as the
owner thereof for all purposes hereof unless and until such Person complies with
Section 12.3 in the case of an assignment thereof or, in the case of any other
transfer, a written notice of the transfer is filed with the Administrative
Agent. Any assignee or transferee of the rights to any Loan or any Note agrees
by acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder, transferee or assignee of the rights to such Loan.

         12.2 Participations.

         12.2.1.  Permitted Participants; Effect.

         Any Lender may, in its sole discretion, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks or other entities

                                       47
<PAGE>   54

("Participants") participating interests in any Loan owing to such Lender, any
Note held by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the owner of its Loans and the holder of any Note
issued to it in evidence thereof for all purposes under the Loan Documents, all
amounts payable by the Borrowers under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrowers and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under the Loan
Documents.

         12.2.2 Voting Rights.

         Each Lender shall retain the sole right to approve, without the consent
of any Participant, any amendment, modification or waiver of any provision of
the Loan Documents other than any amendment, modification or waiver with respect
to any Loan or Commitment in which such Participant has an interest which
forgives principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment, extends the Facility
Termination Date, postpones any date fixed for any regularly-scheduled payment
of principal of, or interest or fees on, any such Loan or Commitment, releases
the Company as guarantor of any such Loan or releases all or substantially all
of the collateral, if any, securing any such Loan.

         12.2.3 Benefit of Setoff.

         The Company agrees that each Participant shall be deemed to have the
right of setoff provided in Section 11.1 in respect of its participating
interest in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of setoff
provided in Section 11.1 with respect to the amount of participating interests
sold to each Participant. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in Section 11.1,
agrees to share with each Lender, any amount received pursuant to the exercise
of its right of setoff, such amounts to be shared in accordance with Section
11.2 as if each Participant were a Lender.

         12.3 Assignments.

         12.3.1. Permitted Assignments.

         Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time assign to one or more financial
institutions, mutual funds, insurance companies or other entities engaged in the
business of extending credit for borrowed money ("Purchasers") all or any part
of its rights and obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit C or in such other form as may be agreed to
by the parties thereto. The consent of the Company and the Administrative Agent
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof; provided, however, that
if a Default has occurred and is continuing, the consent of the

                                       48
<PAGE>   55

Company shall not be required. Such consent shall not be unreasonably withheld
or delayed. The assignor shall give prompt written notice to the Company of any
assignment becoming effective without the consent of the Company. Each such
assignment with respect to a Purchaser which is not a Lender or an Affiliate
thereof shall (unless each of the Company and the Administrative Agent otherwise
consents) be in an amount not less than the lesser of (i) $5,000,000 and in
multiples of $1,000,000 or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment) or outstanding Loans
(if the applicable Commitment has been terminated).

         12.3.2. Effect; Effective Date.

         Upon (i) delivery to the Administrative Agent of an assignment,
together with any consents required by Section 12.3.1, and (ii) payment of a
$3,500 fee to the Administrative Agent for processing such assignment (unless
such fee is waived by the Administrative Agent), such assignment shall become
effective on the effective date specified in such assignment. The assignment
shall contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and Loans under the
applicable assignment agreement constitutes "plan assets" as defined under ERISA
and that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the effective date
of such assignment, such Purchaser shall for all purposes be a Lender party to
this Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Company, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment and Loans assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Lender, the Administrative Agent and the Borrowers shall,
if the transferor Lender or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their respective Commitments, as adjusted pursuant
to such assignment.

         12.4 Dissemination of Information.

         The Company authorizes each Lender to disclose to any Participant or
Purchaser or any other Person acquiring an interest in the Loan Documents by
operation of law (each a "Transferee") and any prospective Transferee any and
all information in such Lender's possession concerning the creditworthiness of
the Company and its Subsidiaries, provided that each Transferee and prospective
Transferee agrees in writing to be bound by Section 9.11 of this Agreement.

         12.5 Tax Treatment.

         If any interest in any Loan Document is transferred to any Transferee
which is organized under the laws of any jurisdiction other than the United
States or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(iv).

                                       49
<PAGE>   56

         12.6 Transfer to an SPC.

         Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Company, the option to provide to the Borrowers all
or any part of any Loan (other than an Alternate Currency Loan) that such
Granting Lender would otherwise be obligated to make to the Borrower pursuant to
this Agreement; provided that (i) nothing herein shall constitute a commitment
by any SPC to make any Loan and (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms hereof. The
making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC, it will not institute against, or join any other
person in instituting against, such SPC any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under the laws of the United
States or any State thereof. In addition, notwithstanding anything to the
contrary in this Section 12.6, any SPC may (i) with notice to, but without the
prior written consent of, the Company and the Administrative Agent and without
paying any processing fee therefor, assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
by the Company and the Administrative Agent) providing liquidity and/or credit
support to or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC. As this
Section applies to any particular SPC, this section may not be amended without
the written consent of such SPC.

                                 ARTICLE XIII.

                                    NOTICES

         13.1 Notices.

         Except as otherwise permitted by Section 2.15 with respect to borrowing
notices, all notices, requests and other communications to any party hereunder
shall be in writing (including electronic transmission, facsimile transmission
or similar writing) and shall be given to such party: (x) in the case of the
Borrowers or the Administrative Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth below its signature hereto or (z) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Administrative Agent and the
Borrowers in accordance with the provisions of this Section 13.1. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and

                                       50
<PAGE>   57

confirmation of receipt is received, (ii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Administrative Agent under Article
II shall not be effective until received.

         13.2 Change of Address.

         The Borrowers, the Administrative Agent and any Lender may each change
the address for service of notice upon it by 5 days' prior written notice to the
other parties hereto.

                                  ARTICLE XIV.

                                  COUNTERPARTS

         This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrowers, the
Administrative Agent and the Lenders and each party has notified the
Administrative Agent by facsimile transmission or telephone that it has taken
such action.

                                  ARTICLE XV.

          CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

         15.1 CHOICE OF LAW.

         THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS
CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
(INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE
WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

         15.2 CONSENT TO JURISDICTION.

         EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN
CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY
LOAN DOCUMENTS AND EACH BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT

                                       51
<PAGE>   58

SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY BORROWER AGAINST THE
AGENT OR ANY LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO,
ILLINOIS.

         15.3 WAIVER OF JURY TRIAL.

         THE BORROWERS, THE AGENT AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN
ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO,
OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

               [THE BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       52
<PAGE>   59

         IN WITNESS WHEREOF, the Borrowers, the Lenders and the Administrative
Agent have executed this Agreement as of the date first above written.

                                CARDINAL HEALTH, INC.

                                By: /s/ Richard J. Miller
                                   ---------------------------------------------
                                Print Name: Richard J. Miller
                                           -------------------------------------
                                Title: Executive Vice President, Chief Financial
                                         Officer and Treasurer
                                      ------------------------------------------

                                7000 Cardinal Place
                                Dublin, Ohio 43017
                                Attention: Suzanne L. Stoddard
                                Telephone: (614) 757-7542
                                Fax: (614) 757-8542

                                       53
<PAGE>   60

Commitment:
$65,000,000                     BANK ONE, NA (Main office Chicago),
                                Individually and as Administrative Agent

                                By: /s/ Thomas E. Redmond
                                   ---------------------------------------------
                                Print Name: Thomas E. Redmond
                                           -------------------------------------
                                Title: Managing Director
                                      ------------------------------------------

                                100 East Broad Street
                                7th Floor
                                Columbus, OH 43215
                                Attention: Thomas E. Redmond
                                Telephone: (614) 248-5540
                                Fax: (614) 248-5518

                                       54
<PAGE>   61

Commitment:
$65,000,000                     BANK OF AMERICA, N.A.
                                Individually and as Syndication Agent

                                By: /s/ Lawrence J. Gordon
                                   ---------------------------------------------
                                Print Name: Lawrence J. Gordon
                                           -------------------------------------
                                Title: Principal
                                      ------------------------------------------

                                700 Louisiana Street, 8th Floor
                                Houston, TX 77002
                                Attention: Lawrence J. Gordon
                                Telephone: (713) 247-6619
                                Fax: (713) 247-6719

                                       55
<PAGE>   62

Commitment:
$65,000,000                     CITICORP USA, INC.
                                Individually and as Documentation Agent

                                By: /s/ Emily Rosenstock
                                   ---------------------------------------------
                                Print Name: Emily Rosenstock
                                           -------------------------------------
                                Title: Vice President/SCO
                                      ------------------------------------------

                                500 West Madison, 7th Floor
                                Chicago, IL 60661
                                Attention: Carrie Stead
                                Telephone: (312) 627-3972
                                Fax: (312) 627-3990

                                       56
<PAGE>   63

Commitment:
$65,000,000                     CREDIT SUISSE FIRST BOSTON
                                Individually and as Documentation Agent

                                By: /s/ William S. Lutkins
                                   ---------------------------------------------
                                Print Name: William S. Lutkins
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                By: /s/ Thomas G. Muoio
                                   ---------------------------------------------
                                Print Name: Thomas G. Muoio
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                11 Madison Avenue
                                New York, NY 10010
                                Attention: William Lutkins
                                Telephone: (212) 325-9705
                                Fax: (212) 325-8319

                                       57
<PAGE>   64

Commitment:
$45,000,000                     THE BANK OF TOKYO MITSUBISHI, LTD.,
                                CHICAGO BRANCH

                                By: /s/ Hisashi Miyashiro
                                   ---------------------------------------------
                                Print Name: Hisashi Miyashiro
                                           -------------------------------------
                                Title: Deputy General Manager
                                      ------------------------------------------

                                227 W. Monroe Street, Suite 2300
                                Chicago, IL 60606
                                Attention: William Murray
                                Telephone: (312) 696-4653
                                Fax: (312) 696-4535

                                       58
<PAGE>   65

Commitment:
$45,000,000                     BARCLAYS BANK, PLC

                                By: /s/ Matthew Tuck
                                   ---------------------------------------------
                                Print Name: Matthew Tuck
                                           -------------------------------------
                                Title: Associate Director & Vice President
                                      ------------------------------------------

                                222 Broadway, 8th Floor
                                New York, NY 10038
                                Attention: Matthew Tuck
                                Telephone: (212) 412-1131
                                Fax: (212) 412-1075

                                       59
<PAGE>   66

Commitment:
$45,000,000                     FIRST UNION NATIONAL BANK

                                By: /s/ Joyce L. Barry
                                   ---------------------------------------------
                                Print Name: Joyce L. Barry
                                           -------------------------------------
                                Title: SVP
                                      ------------------------------------------

                                301 South College Street, 5th Floor
                                Charlotte, NC 28288-0760
                                Attention: Joyce Barry
                                Telephone: (704) 374-4151
                                Fax: (704) 374-4793

                                       60
<PAGE>   67

Commitment:
$45,000,000                     FLEET BANK, NATIONAL ASSOCIATION

                                By: /s/ Magda Hayden
                                   ---------------------------------------------
                                Print Name: Magda Hayden
                                           -------------------------------------
                                Title: Sr. V.P.
                                      ------------------------------------------

                                300 Broad Hollow Road
                                Mail Stop: NY EH 32904E
                                Melville, NY 11747
                                Attention: Magda Hayden
                                Telephone: (516) 547-7726
                                Fax: (516) 547-7815

                                       61
<PAGE>   68

Commitment:
$45,000,000                     PNC BANK, NATIONAL ASSOCIATION

                                By: /s/ Warren F. Weber
                                   ---------------------------------------------
                                Print Name: Warren F. Weber
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                201 East Fifth Street
                                Cincinnati, OH 45201-1198
                                Attention: C. Joseph Richardson
                                Telephone: (513) 651-8688
                                Fax: (513) 651-8951

                                       62
<PAGE>   69

Commitment:
$45,000,000                     WACHOVIA BANK, NA

                                By: /s/ Bradford L. Watkins
                                   ---------------------------------------------
                                Print Name: Bradford L. Watkins
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                191 Peachtree Street, NE
                                Atlanta, GA 30303
                                Attention: Bradford L. Watkins
                                Telephone: (404) 332-1093
                                Fax: (404) 332-6898

                                       63
<PAGE>   70

Commitment:
$40,000,000                     DEUTSCHE BANK AG,
                                NEW YORK BRANCH AND/OR
                                CAYMAN ISLANDS BRANCH

                                By: /s/ Iain Stewart
                                   ---------------------------------------------
                                Print Name: Iain Stewart
                                           -------------------------------------
                                Title: Vice President
                                     -------------------------------------------

                                By: /s/ Annette Walter
                                   ---------------------------------------------
                                Print Name: Annette Walter
                                           -------------------------------------
                                Title: Associate
                                      ------------------------------------------

                                31 W. 52nd Street
                                New York, NY 10019
                                Attention: Iain Stewart
                                Telephone: (212) 469-8279
                                Fax: (212) 469-8701

                                       64
<PAGE>   71

Commitment:
$30,000,000                     SUNTRUST BANK

                                By: /s/ Shelley M. Browne
                                   ---------------------------------------------
                                Print Name: Shelly M. Browne
                                           -------------------------------------
                                Title: Managing Director
                                      ------------------------------------------

                                303 Peachtree Street, N.E., 3rd Floor
                                Mail Code 1928
                                Atlanta, GA 30308
                                Attention: Linda L. Dash
                                Telephone: (404) 658-4923
                                Fax: (404) 658-4905

                                       65
<PAGE>   72

Commitment:
$25,000,000                     BANCA COMMERCIALE ITALIANA
                                CHICAGO BRANCH

                                By: /s/ Charles Dougherty
                                   ---------------------------------------------
                                Print Name: C. Dougherty, VP
                                           -------------------------------------
                                Title:
                                      ------------------------------------------

                                By: /s/ E. Bermant
                                   ---------------------------------------------
                                Print Name: E. Bermant
                                           -------------------------------------
                                Title: FVP/Deputy Manager
                                      ------------------------------------------

                                One William Street
                                New York, NY 10004
                                Attention: Charles Dougherty
                                Telephone: (212) 607-3656
                                Fax: (212) 809-2124

                                       66
<PAGE>   73

Commitment:
$25,000,000                     THE BANK OF NEW YORK

                                By: /s/ Jonathan Rollins
                                   ---------------------------------------------
                                Print Name: Jonathan Rollins
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                10990 Wilshire Boulevard, Suite 1125
                                Los Angeles, CA 90024
                                Attention: Jonathon Rollins
                                Telephone: (310) 996-8658
                                Fax: (310) 996-8667

                                       67
<PAGE>   74

Commitment:
$25,000,000                     FIRSTAR BANK

                                By: /s/ James C. Blythe
                                   ---------------------------------------------
                                Print Name: James C. Blythe
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                175 South Third Street, 4th Floor
                                Columbus, OH 43215
                                Attention: James C. Blythe
                                Telephone: (614) 232-8047
                                Fax: (614) 232-8098

                                       68
<PAGE>   75

Commitment:
$25,000,000                     NATIONAL CITY BANK

                                By: /s/ Patricia Jackson
                                   ---------------------------------------------
                                Print Name: Patricia Jackson
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                155 East Broad Street
                                Columbus, OH 43251
                                Attention: Patricia Jackson
                                Telephone: (614) 463-8065
                                Fax: (614) 463-6770

                                       69
<PAGE>   76

Commitment:
$25,000,000                     STANDARD CHARTERED BANK

                                By: /s/ David D. Cutting
                                   ---------------------------------------------
                                Print Name: David D. Cutting
                                           -------------------------------------
                                Title: Senior Vice President
                                      ------------------------------------------

                                7 World Trade Center
                                New York, NY 10048-2627
                                Attention: David D. Cutting
                                Telephone: (212) 667-0469
                                Fax: (212) 667-0225

                                       70
<PAGE>   77

Commitment:
$25,000,000                     STATE STREET BANK AND TRUST COMPANY

                                By: /s/ Grace Barnett
                                   ---------------------------------------------
                                Print Name: Grace Barnett
                                           -------------------------------------
                                Title: Vice President
                                      ------------------------------------------

                                225 Franklin Street
                                MAO-18
                                Boston, MA 02110
                                Attention: Grace Barnett
                                Telephone: (617) 664-6506
                                Fax: (617) 728-3078

                                       71<PAGE>   1
                                                                     Exhibit 4.2
                                                                  EXECUTION COPY

                               U.S. $1,000,000,000

                                CREDIT AGREEMENT

                            Dated as of May 10, 2000

                                      Among

                            PHELPS DODGE CORPORATION

                                   as Borrower

                                       and

                        THE INITIAL LENDERS NAMED HEREIN

                               as Initial Lenders

                                       and

                            SALOMON SMITH BARNEY INC.

                        as Sole Arranger and Book Manager

                                       and

                     BANK OF TOKYO-MITSUBISHI TRUST COMPANY

                              as Syndication Agent

                                       and

                                 CITIBANK, N.A.

                             as Administrative Agent
<PAGE>   2
                                      iii

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                 PAGE
<S>                                                                                              <C>
                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS
         SECTION 1.01.  Certain Defined Terms ..............................................         1
         SECTION 1.02.  Computation of Time Periods ........................................        13
         SECTION 1.03.  Accounting Terms ...................................................        13

                                   ARTICLE II
                       AMOUNTS AND TERMS OF THE ADVANCES
         SECTION 2.01.  The Revolving Credit Advances ......................................        13
         SECTION 2.02.  Making the Revolving Credit Advances ...............................        13
         SECTION 2.03.  The Competitive Bid Advances .......................................        14
         SECTION 2.04.  Fees ...............................................................        17
         SECTION 2.05.  Optional Termination or Reduction of the Commitments ...............        17
         SECTION 2.06.  Repayment of Revolving Credit Advances .............................        17
         SECTION 2.07.  Interest on Revolving Credit Advances ..............................        17
         SECTION 2.08.  Interest Rate Determination ........................................        18
         SECTION 2.09.  Optional Conversion of Revolving Credit Advances ...................        19
         SECTION 2.10.  Prepayments of Revolving Credit Advances ...........................        19
         SECTION 2.11.  Requirements of Law ................................................        20
         SECTION 2.12.  Illegality .........................................................        20
         SECTION 2.13.  Payments and Computations ..........................................        21
         SECTION 2.14.  Taxes ..............................................................        22
         SECTION 2.15.  Sharing of Payments, Etc ...........................................        23
         SECTION 2.16.  Evidence of Debt ...................................................        23
         SECTION 2.17.  Extension of Termination Date ......................................        24

                                   ARTICLE III
                     CONDITIONS TO EFFECTIVENESS AND LENDING
         SECTION 3.01.  Conditions Precedent to Effectiveness of Sections 2.01 and 2.03 ....        26
         SECTION 3.03.  Conditions Precedent to Each Competitive Bid Borrowing .............        27
         SECTION 3.04.  Determinations Under Section 3.01 ..................................        28

                                    ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
         SECTION 4.01.  Representations and Warranties of the Borrower .....................        28

                                    ARTICLE V
                           COVENANTS OF THE BORROWER
         SECTION 5.01.  Affirmative Covenants ..............................................        31
         SECTION 5.02.  Negative Covenants .................................................        34

                                    ARTICLE VI
                               EVENTS OF DEFAULT
         SECTION 6.01.  Events of Default ..................................................        36

                                   ARTICLE VII
                                    THE AGENT
         SECTION 7.01. Authorization and Action ............................................        38
</TABLE>
<PAGE>   3
                                       iv

<TABLE>
<S>                                                                                              <C>
         SECTION 7.02.  Agent's Reliance, Etc ..............................................        38
         SECTION 7.03.  Citibank and Affiliates ............................................        39
         SECTION 7.04.  Lender Credit Decision .............................................        39
         SECTION 7.05.  Indemnification ....................................................        39
         SECTION 7.06.  Successor Agent ....................................................        39
         SECTION 7.07.  Other Agents .......................................................        40

                                  ARTICLE VIII
                                 MISCELLANEOUS
         SECTION 8.01.  Amendments, Etc ....................................................        40
         SECTION 8.02.  Notices, Etc .......................................................        40
         SECTION 8.03.  No Waiver; Remedies ................................................        40
         SECTION 8.04.  Costs and Expenses .................................................        40
         SECTION 8.05.  Right of Set-off ...................................................        41
         SECTION 8.06.  Binding Effect .....................................................        42
         SECTION 8.07.  Assignments and Participations .....................................        42
         SECTION 8.08.  Confidentiality ....................................................        44
         SECTION 8.09.  Governing Law ......................................................        44
         SECTION 8.10.  Execution in Counterparts ..........................................        44
         SECTION 8.11.  Jurisdiction, Etc ..................................................        44
         SECTION 8.12.  Waiver of Jury Trial ...............................................        45
</TABLE>
<PAGE>   4
                                       v

Schedules
---------

Schedule II - Principal Domestic Subsidiaries and other Subsidiaries

Schedule III - Environmental Representation

Schedule IV - Disclosed Litigation
<PAGE>   5
                                CREDIT AGREEMENT

                            Dated as of May 10, 2000

                  PHELPS DODGE CORPORATION, a New York corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
(the "Initial Lenders") listed on the signature pages hereof, SALOMON SMITH
BARNEY INC., as sole arranger and book manager, BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, as syndication agent, and CITIBANK, N.A. ("Citibank"), as
administrative agent (the "Agent") for the Lenders (as hereinafter defined),
agree as follows:

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined):

                  "Advance" means a Revolving Credit Advance or a Competitive
         Bid Advance.

                  "Affiliate" means, as to any Person, any other Person (other
         than a Subsidiary) which, directly or indirectly, is in control of, is
         controlled by, or is under common control with, such Person. For
         purposes of this definition,"control" of a Person means the power,
         directly or indirectly, either to (a) vote 20% or more of the
         securities having ordinary voting power for the election of directors
         of such Person or (b) direct or cause the direction of the management
         and policies of such Person, whether by contract or otherwise.

                  "Agent's Account" means the account of the Agent maintained by
         the Agent at Citibank at its office at 399 Park Avenue, New York, New
         York 10043, Account No. 36852248, Attention: Bank Loan Syndications.

                  "Applicable Lending Office" means, with respect to each
         Lender, such Lender's Domestic Lending Office in the case of a Base
         Rate Advance and such Lender's Eurodollar Lending Office in the case of
         a Eurodollar Rate Advance and, in the case of a Competitive Bid
         Advance, the office of such Lender notified by such Lender to the Agent
         as its Applicable Lending Office with respect to such Competitive Bid
         Advance.

                  "Applicable Margin" means as of any date, a percentage per
         annum determined by reference to the Public Debt Rating in effect on
         such date as set forth below:
<PAGE>   6
<TABLE>
<CAPTION>
                  Public Debt Rating             Applicable Margin for          Applicable Margin for
                     S&P/Moody's                   Base Rate Advances          Eurodollar Rate Advances
                     -----------                   ------------------          ------------------------
<S>                                              <C>                           <C>
                  Level 1
                   A/A2 or above                        0.000%                         0.160%

                  Level 2
                   A-/A3                                0.000%                         0.240%

                  Level 3
                   BBB+/Baa1                            0.000%                         0.300%

                  Level 4
                   BBB/Baa2                             0.000%                         0.450%

                  Level 5
                  BBB-/Baa3                             0.000%                         0.775%

                  Level 6
                  Lower than Level 5                    0.000%                         0.850%
</TABLE>

                  "Applicable Percentage" means, as of any date a percentage per
         annum determined by reference to the Public Debt Rating in effect on
         such date as set forth below:

<TABLE>
<CAPTION>
                         Public Debt Rating                          Applicable
                             S&P/Moody's                             Percentage
                             -----------                             ----------
<S>                                                                  <C>
                           Level 1
                            A/A2 or above                              0.090%

                           Level 2
                            A-/A3                                      0.110%

                           Level 3
                            BBB+/Baa1                                  0.150%

                           Level 4
                            BBB/Baa2                                   0.175%

                           Level 5
                           BBB-/Baa3                                   0.225%

                           Level 6
                           Lower than Level 5                          0.350%
</TABLE>

                  "Applicable Utilization Fee" means, as of any date that the
         aggregate principal amount of the Advances exceeds 33% of the aggregate
         Commitments, a percentage per annum determined by reference to the
         Public Debt Rating in effect on such date as set forth below:
<PAGE>   7
                                       3

<TABLE>
<CAPTION>
                         Public Debt Rating                          Applicable
                             S&P/Moody's                          Utilization Fee
                             -----------                          ---------------
<S>                                                               <C>
                           Level 1
                            A/A2 or above                              0.100%

                           Level 2
                            A-/A3                                      0.100%

                           Level 3
                            BBB+/Baa1                                  0.100%

                           Level 4
                            BBB/Baa2                                   0.125%

                           Level 5
                           BBB-/Baa3                                   0.125%

                           Level 6
                           Lower than Level 5                          0.300%
</TABLE>

                  "Assignment and Acceptance" means an assignment and acceptance
         entered into by a Lender and an Eligible Assignee, and accepted by the
         Agent, in substantially the form of Exhibit C hereto.

                  "Assuming Lender" has the meaning specified in Section
         2.17(c).

                  "Assumption Agreement" has the meaning specified in Section
         2.17(c).

                  "Attributable Debt" means, at any time, the present value,
         discounted at a rate per annum equal to the weighted average of the
         interest rates for any Advances outstanding under this Agreement, and
         if no Advances are outstanding under this Agreement, the Base Rate at
         such time, compounded quarterly, of the obligation of the lessee for
         rental payments (not including amounts payable by the lessee for
         maintenance, property taxes and insurance) during the remaining term of
         any lease (including any period for which such lease has been extended
         or may, at the option of the lessor, be extended).

                  "Base Rate" means a fluctuating interest rate per annum in
         effect from time to time, which rate per annum shall at all times be
         equal to the highest of:

                           (a) the rate of interest announced publicly by
                  Citibank in New York, New York, from time to time, as
                  Citibank's base rate;

                          (b) the sum (adjusted to the nearest 1/32 of 1% or,
                  if there is no nearest 1/32 of 1%, to the next higher 1/32 of
                  1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by
                  dividing (A) the latest three-week moving average of secondary
                  market morning offering rates in the United States for
                  three-month certificates of deposit of major United States
                  money market banks, such three-week moving average (adjusted
                  to the basis of a year of 360 days) being determined weekly on
                  each Monday (or, if such day is not a Business Day, on the
                  next succeeding Business Day) for the three-week period ending
                  on the previous Friday by Citibank on the basis of such rates
                  reported by
<PAGE>   8
                                       4

                  certificate of deposit dealers to and published by the Federal
                  Reserve Bank of New York or, if such publication shall be
                  suspended or terminated, on the basis of quotations for such
                  rates received by Citibank from three New York certificate of
                  deposit dealers of recognized standing selected by Citibank,
                  by (B) a percentage equal to 100% minus the average of the
                  daily percentages specified during such three-week period by
                  the Board of Governors of the Federal Reserve System (or any
                  successor) for determining the maximum reserve requirement
                  (including, but not limited to, any emergency, supplemental or
                  other marginal reserve requirement) for Citibank with respect
                  to liabilities consisting of or including (among other
                  liabilities) three-month U.S. dollar non-personal time
                  deposits in the United States, plus (iii) the average during
                  such three-week period of the annual assessment rates
                  estimated by Citibank for determining the then current annual
                  assessment payable by Citibank to the Federal Deposit
                  Insurance Corporation (or any successor) for insuring U.S.
                  dollar deposits of Citibank in the United States; and

                           (c) 1/2 of one percent per annum above the Federal
                  Funds Rate.

                  "Base Rate Advance" means a Revolving Credit Advance that
         bears interest as provided in Section 2.07(a)(i).

                  "Board of Directors" means the Board of Directors of the
         Borrower, or the Executive Committee of the Board of Directors of the
         Borrower.

                  "Borrowing" means a Revolving Credit Borrowing or a
         Competitive Bid Borrowing.

                  "Business Day" means a day of the year on which banks are not
         required or authorized by law to close in New York City and, if the
         applicable Business Day relates to any Eurodollar Rate Advances or LIBO
         Rate Advances, on which dealings are carried on in the London interbank
         market.

                  "Capital Stock" means any and all shares, interests,
         participants or other equivalents (however designated) of capital stock
         of a corporation, any and all equivalent ownership interests in a
         Person (other than a corporation) and any and all warrants or options
         to purchase any of the foregoing.

                  "Capitalized Lease" means any Lease of property, real,
         personal or mixed, in respect of which the present value (or some other
         computation) of the minimum rental commitment thereunder would, in
         accordance with GAAP in effect on the date such Lease is executed, be
         capitalized on a balance sheet of the lessee.

                  "Capitalized Lease Obligation" means at any time, the
         aggregate amounts which, in accordance with GAAP, are shown as
         liabilities on the balance sheet of the lessee with respect to the
         minimum rental commitment under a Capitalized Lease of the lessee.

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

                  "Commitment" means as to any Lender (a) the amount set forth
         opposite such Lender's name on the signature pages hereof, (b) if such
         Lender has become a Lender hereunder pursuant to an Assumption
         Agreement, the amount set forth in such Assumption Agreement or (c) if
         such Lender has entered into any Assignment and Acceptance, the amount
         set forth for such Lender in the Register maintained by the Agent
         pursuant to Section 8.07(d), as such amount may be reduced pursuant to
         Section 2.05.
<PAGE>   9
                                       5

                  "Commonly Controlled Entity" means an entity, whether or not
         incorporated, which is under common control with the Borrower within
         the meaning of Section 4001 of ERISA or is part of a group which
         includes the Borrower and which is treated as a single employer under
         Section 414 of the Code.

                  "Competitive Bid Advance" means an advance by a Lender to the
         Borrower as part of a Competitive Bid Borrowing resulting from the
         competitive bidding procedure described in Section 2.03 and refers to a
         Fixed Rate Advance or a LIBO Rate Advance.

                  "Competitive Bid Borrowing" means a borrowing consisting of
         simultaneous Competitive Bid Advances from each of the Lenders whose
         offer to make one or more Competitive Bid Advances as part of such
         borrowing has been accepted under the competitive bidding procedure
         described in Section 2.03.

                  "Competitive Bid Note" means a promissory note of the Borrower
         payable to the order of any Lender, in substantially the form of
         Exhibit A-2 hereto, evidencing the indebtedness of the Borrower to such
         Lender resulting from a Competitive Bid Advance made by such Lender.

                  "Competitive Bid Reduction" has the meaning specified in
         Section 2.01.

                  "Confidential Information" means information that the Borrower
         furnishes to the Agent or any Lender, but does not include any such
         information that is or becomes generally available to the public or
         that is or becomes available to the Agent or such Lender from a source
         other than the Borrower.

                  "Consenting Lender" has the meaning specified in Section
         2.17(b).

                  "Consolidated" refers to the consolidation of accounts in
         accordance with GAAP.

                  "Consolidated Tangible Net Worth" means at any date, the
         excess at such date of total assets over total liabilities of the
         Borrower and its consolidated subsidiaries determined in accordance
         with GAAP, on a consolidated basis, excluding, however, from the
         determination of total assets (i) all intangible assets such as
         goodwill, trade names, trademarks, patents, organization expenses,
         unamortized debt discount and expense and other like intangibles, (ii)
         to the extent not already deducted from total assets, reserves for
         depreciation, depletion, obsolescence and/or amortization of properties
         and all other reserves or appropriations of retained earnings which, in
         accordance with GAAP, should be established in connection with the
         business conducted by the relevant corporation, and (iii) any
         revaluation or other write-up in book value of assets subsequent to
         December 31, 1999 except in accordance with GAAP.

                  "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.

                  "Convert", "Conversion" and "Converted" each refers to a
         conversion of Revolving Credit Advances of one Type into Revolving
         Credit Advances of the other Type pursuant to Section 2.08 or 2.09.

                  "Default" means any Event of Default or any event that would
         constitute an Event of Default but for the requirement that notice be
         given or time elapse or both.

                  "Domestic Lending Office" means, with respect to any Lender,
         the office of such Lender specified as its "Domestic Lending Office"
         opposite its name on Schedule I hereto or in the Assumption Agreement
         or the Assignment and Acceptance pursuant to which it became a Lender,
         or such other office of such Lender as such Lender may from time to
         time specify to the Borrower and the Agent.
<PAGE>   10
                                       6

                  "Effective Date" has the meaning specified in Section 3.01.

                  "Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
         Lender; and (iii) any other bank or financial institution other than an
         Affiliate of the Borrower.

                  "Environmental Action" means any action, suit, demand, demand
         letter, claim, notice of non-compliance or violation, notice of
         liability or potential liability, investigation, proceeding, consent
         order or consent agreement relating in any way to any Environmental
         Law, Environmental Permit or Hazardous Materials or arising from
         alleged injury or threat of injury to health, safety or the
         environment, including, without limitation, (a) by any governmental or
         regulatory authority for enforcement, cleanup, removal, response,
         remedial or other actions or damages and (b) by any governmental or
         regulatory authority or any third party for damages, contribution,
         indemnification, cost recovery, compensation or injunctive relief.

                  "Environmental Laws" means any and all applicable foreign,
         Federal, state, local or municipal laws, rules, orders, regulations,
         statutes, ordinances, codes, decrees, requirements of any Governmental
         Authority or other Requirements of Law (including common law)
         regulating, relating to or imposing liability or standards of conduct
         concerning protection of human health or the environment.

                  "Environmental Permit" means any permit, approval,
         identification number, license or other authorization required under
         any Environmental Law.

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

                  "Eurocurrency Liabilities" has the meaning assigned to that
         term in Regulation D of the Board of Governors of the Federal Reserve
         System, as in effect from time to time.

                  "Eurodollar Lending Office" means, with respect to any Lender,
         the office of such Lender specified as its "Eurodollar Lending Office"
         opposite its name on Schedule I hereto or in the Assumption Agreement
         or the Assignment and Acceptance pursuant to which it became a Lender
         (or, if no such office is specified, its Domestic Lending Office), or
         such other office of such Lender as such Lender may from time to time
         specify to the Borrower and the Agent.

                  "Eurodollar Rate" means, for any Interest Period for each
         Eurodollar Rate Advance comprising part of the same Revolving Credit
         Borrowing, an interest rate per annum equal to the rate per annum
         obtained by dividing (a) the rate per annum (rounded upward to the
         nearest whole multiple of 1/32 of 1% per annum) appearing on Telerate
         Page 3750 (or any successor page) as the London interbank offered rate
         for deposits in U.S. dollars at approximately 11:00 A.M. (London time)
         two Business Days prior to the first day of such Interest Period for a
         term comparable to such Interest Period or, if for any reason such rate
         is not available, the average (rounded upward to the nearest whole
         multiple of 1/32 of 1% per annum, if such average is not such a
         multiple) of the rate per annum at which deposits in U.S. dollars are
         offered by the principal office of each of the Reference Banks in
         London, England to prime banks in the London interbank market at 11:00
         A.M. (London time) two Business Days before the first day of such
         Interest Period in an amount substantially equal to such Reference
         Bank's Eurodollar Rate Advance comprising part of such Revolving Credit
         Borrowing to be outstanding during such Interest Period and for a
         period equal to such Interest Period by (b) a percentage equal to 100%
         minus the Eurodollar Rate Reserve Percentage for such Interest Period.
         If Telerate Page 3750 (or any successor page) is unavailable, the
         Eurodollar Rate for any Interest Period for each Eurodollar Rate
         Advance comprising part of the same Revolving Credit Borrowing shall be
         determined by the Agent on the
<PAGE>   11
                                       7

         basis of applicable rates furnished to and received by the Agent from
         the Reference Banks two Business Days before the first day of such
         Interest Period, subject, however, to the provisions of Section 2.08.

                  "Eurodollar Rate Advance" means a Revolving Credit Advance
         that bears interest as provided in Section 2.07(a)(ii).

                  "Eurodollar Rate Reserve Percentage" for any Interest Period
         for all Eurodollar Rate Advances or LIBO Rate Advances comprising part
         of the same Borrowing means the reserve percentage applicable two
         Business Days before the first day of such Interest Period under
         regulations issued from time to time by the Board of Governors of the
         Federal Reserve System (or any successor) for determining the maximum
         reserve requirement (including, without limitation, any emergency,
         supplemental or other marginal reserve requirement) for a member bank
         of the Federal Reserve System in New York City with respect to
         liabilities or assets consisting of or including Eurocurrency
         Liabilities (or with respect to any other category of liabilities that
         includes deposits by reference to which the interest rate on Eurodollar
         Rate Advances or LIBO Rate Advances is determined) having a term equal
         to such Interest Period.

                  "Events of Default" has the meaning specified in Section 6.01.

                  "Extension Date" has the meaning specified in Section 2.17(b).

                  "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 that is a
         Business Day, the average of the quotations for such day on such
         transactions received by the Agent from three Federal funds brokers of
         recognized standing selected by it.

                  "Financing Lease" means any lease of property, real or
         personal, the obligations of the lessee in respect of which are
         required in accordance with GAAP to be capitalized on a balance sheet
         of the lessee.

                  "Fixed Rate Advances" has the meaning specified in Section
         2.03(a)(i).

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

                  "Governmental Authority" means any nation or government, any
         state or other political subdivision thereof and any entity exercising
         executive, legislative, judicial, regulatory or administrative
         functions of or pertaining to government.

                "Guarantee" of a Person, at a particular date, means the sum
         (without duplication) of the following: (a) guarantees or endorsements
         (other than for purposes of collection in the ordinary course of
         business) of, or obligations to purchase goods or services for the
         purpose of supplying funds for the purchase or payment of,
         indebtedness, liabilities or obligations of others, and other
         contingent liabilities in respect of, or to purchase or otherwise
         acquire or service, indebtedness, liabilities or obligations of others,
         provided that any such obligation to purchase goods or services shall
         be treated as Indebtedness only to the extent that payment thereunder
         will be required (after giving effect to any provision limiting such
         payments) if such property or services are not delivered to such
         Person, and (b) all indebtedness in effect guaranteed by an agreement,
         contingent or otherwise, to make any loan, advance, capital
         contribution or other investment in the debtor for the purpose of
         assuring a minimum equity, asset base, working capital or other balance
         sheet condition for any
<PAGE>   12
                                       8

         date, or to provide funds for the payment of any liability, dividend or
         stock liquidation payment, or otherwise to supply funds to or in any
         manner invest in the debtor, but only to the extent of the liability of
         such Person thereunder.

                  "Hazardous Materials" means (a) petroleum and petroleum
         products, by products or breakdown products, radioactive materials,
         asbestos-containing materials, polychlorinated biphenyls,
         ureaformaldehyde and radon gas and (b) any other chemicals, materials,
         substances or wastes designated, classified or regulated as hazardous
         or toxic or as a pollutant or contaminant under any Environmental Law.

                  "Indebtedness" of a Person, at a particular date, means the
         sum (without duplication) of the following: (a) all items of
         indebtedness which in accordance with GAAP would be included in
         determining total liabilities as shown on the liability side of a
         balance sheet of such Person as at such date, (b) indebtedness for the
         repayment of borrowed money secured by any Mortgage existing on a
         Principal Property owned subject to such Mortgage, whether or not the
         indebtedness secured thereby shall have been assumed, (c) Guarantees,
         (d) Capitalized Lease Obligations and (e) Production Payments,
         provided, however, that the term "Indebtedness" shall not include
         liabilities in respect of advance payments made under contracts for the
         sale of goods and/or services, or lease obligations other than
         Capitalized Lease Obligations, or guarantees of any such liabilities or
         lease obligations.

                  "Indebtedness for Money Borrowed" of a Person, at a particular
         date, means the sum (without duplication) of the following (a) all
         Indebtedness, whether or not represented by bonds, debentures, notes,
         commercial paper or other securities, for the repayment of borrowed
         money, (b) all deferred obligations for the payment of the purchase
         price of property or assets purchased and secured by a purchase money
         mortgage, conditional sale agreement, security agreement or any title
         retention agreement, (c) Indebtedness of the character described in
         clauses (b) and (c) of the definition of "Indebtedness" if such
         Indebtedness relates to Indebtedness for Money Borrowed of others, (d)
         Capitalized Lease Obligations and (e) Production Payments.

                  "Information Memorandum" means the information memorandum
         dated April 2000 used by the Agent in connection with the syndication
         of the Commitments.

                  "Insolvency" means, with respect to any Multiemployer Plan,
         the condition that such Plan is insolvent within the meaning of Section
         4245 of ERISA.

                  "Insolvent" means pertaining to a condition of Insolvency.

                  "Interest Period" means, for each Eurodollar Rate Advance
         comprising part of the same Revolving Credit Borrowing and each LIBO
         Rate Advance comprising part of the same Competitive Bid Borrowing, the
         period commencing on the date of such Eurodollar Rate Advance or LIBO
         Rate Advance or the date of the Conversion of any Base Rate Advance
         into such Eurodollar Rate Advance and ending on the last day of the
         period selected by the Borrower pursuant to the provisions below and,
         thereafter, with respect to Eurodollar Rate Advances, each subsequent
         period commencing on the last day of the immediately preceding Interest
         Period and ending on the last day of the period selected by the
         Borrower pursuant to the provisions below. The duration of each such
         Interest Period shall be one, two, three or six months or if available
         by all Lenders, nine or twelve months, as the Borrower may, upon notice
         received by the Agent not later than 2:00 P.M. (New York City time) on
         the third Business Day prior to the first day of such Interest Period,
         select; provided, however, that

                           (i) the Borrower may not select any Interest Period
                  that ends after the Termination Date;
<PAGE>   13
                                       9

                           (ii) Interest Periods commencing on the same date for
                  Eurodollar Rate Advances comprising part of the same Revolving
                  Credit Borrowing or for LIBO Rate Advances comprising part of
                  the same Competitive Bid Borrowing shall be of the same
                  duration;

                           (iii) whenever the last day of any Interest Period
                  would otherwise occur on a day other than a Business Day, the
                  last day of such Interest Period shall be extended to occur on
                  the next succeeding Business Day, provided, however, that, if
                  such extension would cause the last day of such Interest
                  Period to occur in the next following calendar month, the last
                  day of such Interest Period shall occur on the next preceding
                  Business Day; and

                           (iv) whenever the first day of any Interest Period
                  occurs on a day of an initial calendar month for which there
                  is no numerically corresponding day in the calendar month that
                  succeeds such initial calendar month by the number of months
                  equal to the number of months in such Interest Period, such
                  Interest Period shall end on the last Business Day of such
                  succeeding calendar month.

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

                  "Lease" or "lease" means any lease or other similar
         arrangement for the use of property and "lessee" thereunder shall
         include any lessee or user thereunder.

                  "Lenders" means the Initial Lenders, each Assuming Lender that
         shall become a party hereto pursuant to Section 2.17 and each Person
         that shall become a party hereto pursuant to Section 8.07.

                  "LIBO Rate" means, for any Interest Period for all LIBO Rate
         Advances comprising part of the same Competitive Bid Borrowing, an
         interest rate per annum equal to the rate per annum obtained by
         dividing (a) the rate per annum (rounded upward to the nearest whole
         multiple of 1/32 of 1% per annum) appearing on Telerate Page 3750 (or
         any successor page) as the London interbank offered rate for deposits
         in U.S. dollars at approximately 11:00 A.M. (London time) two Business
         Days prior to the first day of such Interest Period for a term
         comparable to such Interest Period or, if for any reason such rate is
         not available, the average (rounded upward to the nearest whole
         multiple of 1/32 of 1% per annum, if such average is not such a
         multiple) of the rate per annum at which deposits in U.S. dollars
         offered by the principal office of each of the Reference Banks in
         London, England to prime banks in the London interbank market at 11:00
         A.M. (London time) two Business Days before the first day of such
         Interest Period in an amount substantially equal to the amount that
         would be the Reference Banks' respective ratable shares of such
         Borrowing if such Borrowing were to be a Revolving Credit Borrowing to
         be outstanding during such Interest Period and for a period equal to
         such Interest Period by (b) a percentage equal to 100% minus the
         Eurodollar Rate Reserve Percentage for such Interest Period. If the
         Telerate Page 3750 (or any successor page) is unavailable, the LIBO
         Rate for any Interest Period for each LIBO Rate Advance comprising part
         of the same Competitive Bid Borrowing shall be determined by the Agent
         on the basis of applicable rates furnished to and received by the Agent
         from the Reference Banks two Business Days before the first day of such
         Interest Period, subject, however, to the provisions of Section 2.08.

                  "LIBO Rate Advances" means a Competitive Bid Advance bearing
         interest based on the LIBO Rate.

                  "Lien" means any mortgage, pledge, hypothecation, assignment,
         deposit arrangement, encumbrance, lien (statutory or other), charge or
         other security interest or any preference, priority or other security
         agreement or preferential arrangement of any kind or nature whatsoever
         (including, without limitation, any conditional sale or other title
         retention agreement and any Financing Lease having substantially the
         same economic effect as any of the foregoing).
<PAGE>   14
                                       10

                  "Loan Documents" means this Agreement and the Notes.

                  "Material Adverse Change" means a material adverse change in
         the financial condition of the Borrower and its Consolidated
         Subsidiaries taken as a whole from that reflected in the Borrower's
         consolidated balance sheet as at December 31, 1999 referred to in
         Section 4.01(a).

                  "Mortgage" means any mortgage, pledge, lien or other security
         interest.

                  "Moody's" means Moody's Investors Service, Inc.

                  "Multiemployer Plan" a Plan which is a multiemployer plan as
         defined in Section 4001(a)(3) of ERISA.

                  "Non-Consenting Lender" has the meaning specified in Section
         2.17(b).

                  "Note" means a Revolving Credit Note or a Competitive Bid
         Note.

                  "Notice of Competitive Bid Borrowing" has the meaning
         specified in Section 2.03(a).

                  "Notice of Revolving Credit Borrowing" has the meaning
         specified in Section 2.02(a).

                  "PBGC" means the Pension Benefit Guaranty Corporation
         established pursuant to Subtitle A of Title IV of ERISA.

                  "Person" means an individual, partnership, corporation
         (including a business trust), joint stock company, trust,
         unincorporated association, joint venture, limited liability company or
         other entity, or a government or any political subdivision or agency
         thereof.

                  "Plan" means at a particular time, any employee benefit plan
         which is covered by ERISA and in respect of which the Borrower or a
         Commonly Controlled Entity is (or, if such plan were terminated at such
         time, would under Section 4069 of ERISA be deemed to be) an "employer"
         as defined in Section 3(5) of ERISA.

                  "Principal Domestic Subsidiary" means each of the Subsidiaries
         designated as a "Principal Domestic Subsidiary" on Schedule II attached
         hereto.

                  "Principal Property" means (a) any mineral property, located
         within the United States of America or its territories or possessions,
         of the Borrower or any Principal Domestic Subsidiary which is in
         production, under development or included in estimates of reserves
         published by the Borrower, (b) any concentrator, smelter, refinery, rod
         mill, metal fabricating plant or similar processing or manufacturing
         facility, located within the United States of America or its
         territories or possessions, of the Borrower or any Principal Domestic
         Subsidiary, or (c) any Capital Stock of, or any Indebtedness for Money
         Borrowed owing to the Borrower or any other Principal Domestic
         Subsidiary of, any Principal Domestic Subsidiary which owns any
         Principal Property; provided, that Principal Property shall in any
         event not include any property, facility or Principal Domestic
         Subsidiary determined by the Board of Directors not to be of material
         importance to the operations of the Borrower and the Principal Domestic
         Subsidiaries taken as a whole.

                  "Production Payment" means any arrangement providing for the
         sale, transfer or other disposition of (a) minerals (including coal and
         hydrocarbons) until the transferee thereof shall realize therefrom a
         specified
<PAGE>   15
                                       11

         amount of money (however determined) or a specified amount of such
         minerals (however determined) or (b) any interest in minerals
         (including coal and hydrocarbons) of the character commonly referred to
         as a "production payment."

                  "Public Debt Rating" means, as of any date, the rating that
         has been most recently announced by either S&P or Moody's, as the case
         may be, for any class of non-credit enhanced long-term senior unsecured
         debt issued by the Borrower. For purposes of the foregoing, (a) if only
         one of S&P and Moody's shall have in effect a Public Debt Rating, the
         Applicable Margin, the Applicable Percentage and the Applicable
         Utilization Fee shall be determined by reference to the available
         rating; (b) if neither S&P nor Moody's shall have in effect a Public
         Debt Rating, the Applicable Margin and the Applicable Percentage will
         be set in accordance with Level 6 under the definition of "Applicable
         Margin", "Applicable Percentage" or "Applicable Utilization Fee", as
         the case may be; (c) if the ratings established by S&P and Moody's
         shall fall within different levels, the Applicable Margin, the
         Applicable Percentage and the Applicable Utilization Fee shall be based
         upon the higher rating except if the lower of such ratings is more than
         one level below the higher of such ratings, the Applicable Margin, the
         Applicable Percentage and the Applicable Utilization Fee shall be set
         at the level that is one level above the lower of such ratings; (d) if
         any rating established by S&P or Moody's shall be changed, such change
         shall be effective as of the date on which such change is first
         announced publicly by the rating agency making such change; and (e) if
         S&P or Moody's shall change the basis on which ratings are established,
         each reference to the Public Debt Rating announced by S&P or Moody's,
         as the case may be, shall refer to the then equivalent rating by S&P or
         Moody's, as the case may be.

                  "Reference Banks" means Citibank, Bank of Tokyo-Mitsubishi
         Trust Company and Morgan Guaranty Trust Company of New York.

                  "Register" has the meaning specified in Section 8.07(d).

                  "Reorganization" means with respect to any Multiemployer Plan,
         the condition that such plan is in reorganization within the meaning of
         Section 4241 of ERISA.

                  "Reportable Event" means any of the events set forth in
         Section 4043(c) of ERISA, other than those events as to which the
         thirty day notice period is waived under subsections .12, .13, .14,
         .16, .18, .19 or .20 of PBGC Reg. SS2615.

                  "Required Lenders" means at any time Lenders owed at least a
         majority in interest of the then aggregate unpaid principal amount of
         the Revolving Credit Advances owing to Lenders, or, if no such
         principal amount is then outstanding, Lenders having at least a
         majority in interest of the Commitments or, if no Revolving Credit
         Advances are outstanding and the Commitments have been terminated,
         Lenders having at least a majority in interest of the Competitive Bid
         Advances, if any, then outstanding.

                  "Requirement of Law" as to any Person, means any applicable
         law, treaty, rule or regulation or determination of an arbitrator or a
         court or other Governmental Authority, in each case applicable to or
         binding upon such Person or any of its property or to which such Person
         or any of its property is subject.

                  "Responsible Officer" means the chief executive officer, the
         president or any vice-president of the Borrower or, with respect to
         financial matters, the chief financial officer, any vice-president with
         responsibility primarily for accounting or financial matters, the
         treasurer or the controller of the Borrower.

                  "Revolving Credit Advance" means an advance by a Lender to the
         Borrower as part of a Revolving Credit Borrowing and refers to a Base
         Rate Advance or a Eurodollar Rate Advance (each of which shall be a
         "Type" of Revolving Credit Advance).

<PAGE>   16
                                       12

                  "Revolving Credit Borrowing" means a borrowing consisting of
         simultaneous Revolving Credit Advances of the same Type made by each of
         the Lenders pursuant to Section 2.01.

                  "Revolving Credit Note" means a promissory note of the
         Borrower payable to the order of any Lender, delivered pursuant to a
         request made under Section 2.16 in substantially the form of Exhibit
         A-1 hereto, evidencing the aggregate indebtedness of the Borrower to
         such Lender resulting from the Revolving Credit Advances made by such
         Lender.

                  "S&P" means Standard & Poor's, a division of The McGraw-Hill
         Companies, Inc.

                  "Sale and Lease-Back Transactions" means any arrangement with
         any Person providing for the leasing by the Borrower or a Principal
         Domestic Subsidiary of any Principal Property (except for temporary
         leases for a term of not more than three years), title to which
         property has been or is to be sold or transferred by the Borrower or
         such Principal Domestic Subsidiary to such Person, except for
         arrangements with any Governmental Authority of the United States of
         America or any of its territories or possessions entered into for the
         purpose of financing all or any part of the purchase price or the cost
         of constructing or improving the property subject to such arrangement.

                  "Single Employer Plan" means any Plan which is covered by
         Title IV of ERISA, but which is not a Multiemployer Plan.

                  "Subsidiary" of any Person means a corporation, partnership or
         other entity of which shares of stock or other ownership interests
         having ordinary voting power (other than stock or such other ownership
         interests having such power only by reason of the happening of a
         contingency) to elect a majority of the board of directors or other
         managers of such corporation, partnership or other entity are at the
         time owned, or the management of which is otherwise controlled,
         directly or indirectly through one or more intermediaries, or both, by
         such Person. Unless otherwise qualified, all references to a
         "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
         Subsidiary or Subsidiaries of the Borrower.

                  "Termination Date" means the earlier of (a) May 10, 2005,
         subject to the extension thereof pursuant to Section 2.17 and (b) the
         date of termination in whole of the Commitments pursuant to Section
         2.05 or 6.01; provided, however, that the Termination Date of any
         Lender that is a Non-Consenting Lender to any requested extension
         pursuant to Section 2.17 shall be the Termination Date in effect
         immediately prior to the applicable Extension Date for all purposes of
         this Agreement.

                  "Total Capitalization" means, at any date, the sum of
         Consolidated Tangible Net Worth at such date and Indebtedness for Money
         Borrowed of the Borrower and its Consolidated Subsidiaries determined
         in accordance with GAAP, on a consolidated basis, at such date.

                  "Voting Stock" means capital stock issued by a corporation, or
         equivalent interests in any other Person, the holders of which are
         ordinarily, in the absence of contingencies, entitled to vote for the
         election of directors (or persons performing similar functions) of such
         Person, even if the right so to vote has been suspended by the
         happening of such a contingency.

                  SECTION 1.02. Computation of Time Periods. In this Agreement
in the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".
<PAGE>   17
                                       13

                  SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(a).

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES

                  SECTION 2.01. The Revolving Credit Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
Revolving Credit Advances to the Borrower from time to time on any Business Day
during the period from the Effective Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding such Lender's Commitment
provided that the aggregate amount of the Commitments of the Lenders shall be
deemed used from time to time to the extent of the aggregate amount of the
Competitive Bid Advances then outstanding and such deemed use of the aggregate
amount of the Commitments shall be allocated among the Lenders ratably according
to their respective Commitments (such deemed use of the aggregate amount of the
Commitments being a "Competitive Bid Reduction"). Each Revolving Credit
Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof and shall consist of Revolving Credit Advances
of the same Type made on the same day by the Lenders ratably according to their
respective Commitments. Within the limits of each Lender's Commitment, the
Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.10 and
reborrow under this Section 2.01.

                  SECTION 2.02. Making the Revolving Credit Advances. (a) Each
Revolving Credit Borrowing shall be made on notice, given not later than (x)
2:00 P.M. (New York City time) on the third Business Day prior to the date of
the proposed Revolving Credit Borrowing in the case of a Revolving Credit
Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York
City time) on the date of the proposed Revolving Credit Borrowing in the case of
a Revolving Credit Borrowing consisting of Base Rate Advances, by the Borrower
to the Agent, which shall give to each Lender prompt notice thereof by
telecopier or telex. Each such notice of a Revolving Credit Borrowing (a "Notice
of Revolving Credit Borrowing") shall be by telephone, confirmed immediately in
writing, or telecopier or telex in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Revolving Credit Borrowing,
(ii) Type of Advances comprising such Revolving Credit Borrowing, (iii)
aggregate amount of such Revolving Credit Borrowing, and (iv) in the case of a
Revolving Credit Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Revolving Credit Advance. Each Lender shall,
before 1:00 P.M. (New York City time) on the date of such Revolving Credit
Borrowing make available for the account of its Applicable Lending Office to the
Agent at the Agent's Account, in same day funds, such Lender's ratable portion
of such Revolving Credit Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at the Agent's address
referred to in Section 8.02.

                  (b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Revolving Credit Borrowing if the aggregate amount of such Revolving Credit
Borrowing is less than $5,000,000 or if the obligation of the Lenders to make
Eurodollar Rate Advances shall then be suspended pursuant to Section 2.08 or
2.12 and (ii) the Eurodollar Rate Advances may not be outstanding as part of
more than ten separate Revolving Credit Borrowings.

                  (c) Each Notice of Revolving Credit Borrowing shall be
irrevocable and binding on the Borrower. In the case of any Revolving Credit
Borrowing that the related Notice of Revolving Credit Borrowing specifies is to
be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each
Lender against any loss, cost or expense actually incurred by such Lender as a
result of any failure to fulfill on or before the date specified in
<PAGE>   18
                                       14

such Notice of Revolving Credit Borrowing for such Revolving Credit Borrowing
the applicable conditions set forth in Article III, including, without
limitation, any loss (excluding loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Revolving Credit Advance to be made by such
Lender as part of such Revolving Credit Borrowing when such Revolving Credit
Advance, as a result of such failure, is not made on such date.

                  (d) Unless the Agent shall have received notice from a Lender
prior to the date of any Revolving Credit Borrowing that such Lender will not
make available to the Agent such Lender's ratable portion of such Revolving
Credit Borrowing, the Agent may assume that such Lender has made such portion
available to the Agent on the date of such Revolving Credit Borrowing in
accordance with subsection (a) of this Section 2.02 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Agent, such Lender and the Borrower
severally agree to repay to the Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to Revolving Credit Advances comprising such Revolving Credit Borrowing and
(ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall
repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Revolving Credit Advance as part of such Revolving
Credit Borrowing for purposes of this Agreement.

                  (e) The failure of any Lender to make the Revolving Credit
Advance to be made by it as part of any Revolving Credit Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Revolving Credit Advance on the date of such Revolving Credit Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Revolving Credit Advance to be made by such other Lender on the date of any
Revolving Credit Borrowing.

                  SECTION 2.03. The Competitive Bid Advances. (a) Each Lender
severally agrees that the Borrower may make Competitive Bid Borrowings under
this Section 2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 30 days prior to the Termination Date
in the manner set forth below; provided that, following the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding
shall not exceed the aggregate amount of the Commitments of the Lenders
(computed without regard to any Competitive Bid Reduction).

                  (i) The Borrower may request a Competitive Bid Borrowing under
         this Section 2.03 by delivering to the Agent, by telecopier or telex, a
         notice of a Competitive Bid Borrowing (a "Notice of Competitive Bid
         Borrowing"), in substantially the form of Exhibit B-2 hereto,
         specifying therein the requested (v) date of such proposed Competitive
         Bid Borrowing, (w) aggregate amount of such proposed Competitive Bid
         Borrowing, (x) in the case of a Competitive Bid Borrowing consisting of
         LIBO Rate Advances, Interest Period, or in the case of a Competitive
         Bid Borrowing consisting of Fixed Rate Advances, maturity date for
         repayment of each Fixed Rate Advance to be made as part of such
         Competitive Bid Borrowing (which maturity date may not be earlier than
         the date occurring 7 days after the date of such Competitive Bid
         Borrowing or later than the Termination Date), (y) interest payment
         date or dates relating thereto, and (z) other terms (if any) to be
         applicable to such Competitive Bid Borrowing, not later than 2:00 P.M.
         (New York City time) (A) at least one Business Day prior to the date of
         the proposed Competitive Bid Borrowing, if the Borrower shall specify
         in the Notice of Competitive Bid Borrowing that the rates of interest
         to be offered by the Lenders shall be fixed rates per annum (the
         Advances comprising any such Competitive Bid Borrowing being referred
         to herein as "Fixed Rate Advances") and (B) at least four Business Days
         prior to the date of the proposed Competitive Bid Borrowing, if the
         Borrower shall instead specify in the Notice of Competitive Bid
         Borrowing that the Advances comprising such Competitive Bid Borrowing
         shall be LIBO Rate Advances. Each Notice of Competitive Bid Borrowing
         shall be irrevocable and binding on the Borrower. The Agent shall in
         turn promptly notify each
<PAGE>   19
                                       15

         Lender of each request for a Competitive Bid Borrowing received by it
         from the Borrower by sending such Lender a copy of the related Notice
         of Competitive Bid Borrowing.

                  (ii) Each Lender may, if, in its sole discretion, it elects to
         do so, irrevocably offer to make one or more Competitive Bid Advances
         to the Borrower as part of such proposed Competitive Bid Borrowing at a
         rate or rates of interest specified by such Lender in its sole
         discretion, by notifying the Agent (which shall give prompt notice
         thereof to the Borrower), (A) before 9:30 A.M. (New York City time) on
         the date of such proposed Competitive Bid Borrowing, in the case of a
         Competitive Bid Borrowing consisting of Fixed Rate Advances and (B)
         before 10:00 A.M. (New York City time) three Business Days before the
         date of such proposed Competitive Bid Borrowing, in the case of a
         Competitive Bid Borrowing consisting of LIBO Rate Advances of the
         minimum amount and maximum amount of each Competitive Bid Advance which
         such Lender would be willing to make as part of such proposed
         Competitive Bid Borrowing (which amounts of such proposed Competitive
         Bid may, subject to the proviso to the first sentence of this Section
         2.03(a), exceed such Lender's Commitment, if any), the rate or rates of
         interest therefor and such Lender's Applicable Lending Office with
         respect to such Competitive Bid Advance; provided that if the Agent in
         its capacity as a Lender shall, in its sole discretion, elect to make
         any such offer, it shall notify the Borrower of such offer at least 30
         minutes before the time and on the date on which notice of such
         election is to be given to the Agent, by the other Lenders. If any
         Lender shall elect not to make such an offer, such Lender shall so
         notify the Agent before 10:00 A.M. (New York City time), and such
         Lender shall not be obligated to, and shall not, make any Competitive
         Bid Advance as part of such Competitive Bid Borrowing; provided that
         the failure by any Lender to give such notice shall be deemed a refusal
         by such Lender to make any Competitive Bid Advance as part of such
         proposed Competitive Bid Borrowing.

                  (iii) The Borrower shall, in turn, (A) before 11:00 A.M. (New
         York City time) on the date of such proposed Competitive Bid Borrowing,
         in the case of a Competitive Bid Borrowing consisting of Fixed Rate
         Advances and (B) before 2:00 P.M. (New York City time) three Business
         Days before the date of such proposed Competitive Bid Borrowing, in the
         case of a Competitive Bid Borrowing consisting of LIBO Rate Advances,
         either:

                           (x) cancel such Competitive Bid Borrowing by giving
                  the Agent notice to that effect, or

                           (y) accept one or more of the offers made by any
                  Lender or Lenders pursuant to paragraph (ii) above, in its
                  sole discretion, by giving notice to the Agent of the amount
                  of each Competitive Bid Advance (which amount shall be equal
                  to or greater than the minimum amount, and equal to or less
                  than the maximum amount, notified to the Borrower by the Agent
                  on behalf of such Lender for such Competitive Bid Advance
                  pursuant to paragraph (ii) above) to be made by each Lender as
                  part of such Competitive Bid Borrowing, and reject any
                  remaining offers made by Lenders pursuant to paragraph (ii)
                  above by giving the Agent notice to that effect. The Borrower
                  shall accept the offers made by any Lender or Lenders to make
                  Competitive Bid Advances in order of the lowest to the highest
                  rates of interest offered by such Lenders. If two or more
                  Lenders have offered the same interest rate, the amount to be
                  borrowed at such interest rate will be allocated among such
                  Lenders in proportion to the largest amount that each such
                  Lender offered at such interest rate.

                  (iv) If the Borrower notifies the Agent that such Competitive
         Bid Borrowing is cancelled pursuant to paragraph (iii)(x) above, the
         Agent shall give prompt notice thereof to the Lenders and such
         Competitive Bid Borrowing shall not be made.

                  (v) If the Borrower accepts one or more of the offers made by
         any Lender or Lenders pursuant to paragraph (iii)(y) above, the Agent
         shall in turn promptly notify (A) each Lender that has made an offer as

<PAGE>   20
                                       16

         described in paragraph (ii) above, of the date and aggregate amount of
         such Competitive Bid Borrowing and whether or not any offer or offers
         made by such Lender pursuant to paragraph (ii) above have been accepted
         by the Borrower, (B) each Lender that is to make a Competitive Bid
         Advance as part of such Competitive Bid Borrowing, of the amount of
         each Competitive Bid Advance to be made by such Lender as part of such
         Competitive Bid Borrowing, and (C) each Lender that is to make a
         Competitive Bid Advance as part of such Competitive Bid Borrowing, upon
         receipt, that the Agent has received forms of documents appearing to
         fulfill the applicable conditions set forth in Article III. Each Lender
         that is to make a Competitive Bid Advance as part of such Competitive
         Bid Borrowing shall, before 12:00 noon (New York City time) on the date
         of such Competitive Bid Borrowing specified in the notice received from
         the Agent pursuant to clause (A) of the preceding sentence or any later
         time when such Lender shall have received notice from the Agent
         pursuant to clause (C) of the preceding sentence, make available for
         the account of its Applicable Lending Office to the Agent at its
         address referred to in Section 8.02, in same day funds, such Lender's
         portion of such Competitive Bid Borrowing. Upon fulfillment of the
         applicable conditions set forth in Article III and after receipt by the
         Agent of such funds, the Agent will make such funds available to the
         Borrower at the location specified by the Borrower in its Notice of
         Competitive Bid Borrowing. Promptly after each Competitive Bid
         Borrowing the Agent will notify each Lender of the amount of the
         Competitive Bid Borrowing, the consequent Competitive Bid Reduction and
         the dates upon which such Competitive Bid Reduction commenced and will
         terminate.

                  (vi) If the Borrower notifies the Agent that it accepts one or
         more of the offers made by any Lender or Lenders pursuant to paragraph
         (iii)(y) above, such notice of acceptance shall be irrevocable and
         binding on the Borrower. The Borrower shall indemnify each Lender
         against any loss, cost or expense actually incurred by such Lender as a
         result of any failure to fulfill on or before the date specified in the
         related Notice of Competitive Bid Borrowing for such Competitive Bid
         Borrowing the applicable conditions set forth in Article III,
         including, without limitation, any loss (excluding loss of anticipated
         profits), cost or expense incurred by reason of the liquidation or
         reemployment of deposits or other funds acquired by such Lender to fund
         the Competitive Bid Advance to be made by such Lender as part of such
         Competitive Bid Borrowing when such Competitive Bid Advance, as a
         result of such failure, is not made on such date.

                  (b) Each Competitive Bid Borrowing shall be in an aggregate
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof
and, following the making of each Competitive Bid Borrowing, the Borrower shall
be in compliance with the limitation set forth in the proviso to the first
sentence of subsection (a) above.

                  (c) Within the limits and on the conditions set forth in this
Section 2.03, the Borrower may from time to time borrow under this Section 2.03,
repay or prepay pursuant to subsection (d) below, and reborrow under this
Section 2.03, provided that a Competitive Bid Borrowing shall not be made within
three Business Days of the date of any other Competitive Bid Borrowing.

                  (d) The Borrower shall repay to the Agent for the account of
each Lender that has made a Competitive Bid Advance, on the maturity date of
each Competitive Bid Advance (such maturity date being that specified by the
Borrower for repayment of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above and
provided in the Competitive Bid Note evidencing such Competitive Bid Advance),
the then unpaid principal amount of such Competitive Bid Advance. The Borrower
shall have no right to prepay any principal amount of any Competitive Bid
Advance unless, and then only on the terms, specified by the Borrower for such
Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered pursuant to subsection (a)(i) above and set forth in the Competitive
Bid Note evidencing such Competitive Bid Advance.

                  (e) The Borrower shall pay interest on the unpaid principal
amount of each Competitive Bid Advance from the date of such Competitive Bid
Advance to the date the principal amount of such Competitive Bid Advance is
repaid in full, at the rate of interest for such Competitive Bid Advance
specified by the Lender making such
<PAGE>   21
                                       17

Competitive Bid Advance in its notice with respect thereto delivered pursuant to
subsection (a)(ii) above, payable on the interest payment date or dates
specified by the Borrower for such Competitive Bid Advance in the related Notice
of Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above, as
provided in the Competitive Bid Note evidencing such Competitive Bid Advance.
Upon the occurrence and during the continuance of an Event of Default under
Section 6.01(a), the Borrower shall pay interest on the amount of unpaid
principal of and interest on each Competitive Bid Advance owing to a Lender that
is not paid when due, payable in arrears on the date or dates interest is
payable thereon, at a rate per annum equal at all times to 2% per annum above
the rate per annum required to be paid on such Competitive Bid Advance under the
terms of the Competitive Bid Note evidencing such Competitive Bid Advance unless
otherwise agreed in such Competitive Bid Note.

                  (f) The indebtedness of the Borrower resulting from each
Competitive Bid Advance made to the Borrower as part of a Competitive Bid
Borrowing shall be evidenced by a separate Competitive Bid Note of the Borrower
payable to the order of the Lender making such Competitive Bid Advance.

         SECTION 2.04. Fees. (a) Facility Fee. The Borrower agrees to pay to the
Agent for the account of each Lender a facility fee on the aggregate amount of
such Lender's Commitment from the Effective Date in the case of each Initial
Lender and from the effective date specified in the Assumption Agreement or in
the Assignment and Acceptance pursuant to which it became a Lender in the case
of each other Lender until the Termination Date at a rate per annum equal to the
Applicable Percentage in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December, commencing June 30,
2000, and on the Termination Date.

                  (b) Agent's Fees. The Borrower shall pay to the Agent for its
own account such fees as may from time to time be agreed between the Borrower
and the Agent.

                  SECTION 2.05. Optional Termination or Reduction of the
Commitments. The Borrower shall have the right, upon at least one Business Day's
notice to the Agent, to permanently terminate in whole or reduce ratably in part
the unused portions of the respective Commitments of the Lenders, provided that
each partial reduction shall be in the aggregate amount of $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and provided further that the
aggregate amount of the Commitments of the Lenders shall not be reduced to an
amount that is less than the aggregate principal amount of the Competitive Bid
Advances then outstanding.

                  SECTION 2.06. Repayment of Revolving Credit Advances. The
Borrower shall repay to the Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Revolving Credit Advances
then outstanding.

                  SECTION 2.07. Interest on Revolving Credit Advances. (a)
Scheduled Interest. The Borrower shall pay interest on the unpaid principal
amount of each Revolving Credit Advance owing to each Lender from the date of
such Revolving Credit Advance until such principal amount shall be paid in full,
at the following rates per annum:

                  (i) Base Rate Advances. During such periods as such Revolving
         Credit Advance is a Base Rate Advance, a rate per annum equal at all
         times to the sum of (x) the Base Rate in effect from time to time plus
         (y) the Applicable Margin in effect from time to time plus (z) the
         Applicable Utilization Fee, if any, in effect from time to time,
         payable in arrears quarterly on the last day of each March, June,
         September and December during such periods and on the date such Base
         Rate Advance shall be Converted or paid in full.

                  (ii) Eurodollar Rate Advances. During such periods as such
         Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum
         equal at all times during each Interest Period for such Revolving
         Credit Advance to the sum of (x) the Eurodollar Rate for such Interest
         Period for such Revolving Credit Advance plus (y) the Applicable Margin
         in effect from time to time plus (z) the Applicable Utilization Fee, if
         any, in effect from time to time, payable in arrears on the last day of
         such Interest Period and, if such Interest
<PAGE>   22
                                       18

         Period has a duration of more than three months, on each day that
         occurs during such Interest Period every three months from the first
         day of such Interest Period and on the date such Eurodollar Rate
         Advance shall be Converted or paid in full.

                  (b) Default Interest. Upon the occurrence and during the
continuance of an Event of Default under Section 6.01(a), the Borrower shall pay
interest on (i) the unpaid principal amount of each Revolving Credit Advance
owing to each Lender that is not paid when due, payable in arrears on the dates
referred to in clause (a)(i) or (a)(ii) above, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid on such
Revolving Credit Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to
the fullest extent permitted by law, the amount of any interest, fee or other
amount payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid on
Base Rate Advances pursuant to clause (a)(i) above.

                  SECTION 2.08. Interest Rate Determination. (a) Each Reference
Bank agrees to furnish to the Agent timely information for the purpose of
determining each Eurodollar Rate and each LIBO Rate. If any one or more of the
Reference Banks shall not furnish such timely information to the Agent for the
purpose of determining any such interest rate, the Agent shall determine such
interest rate on the basis of timely information furnished by the remaining
Reference Banks. The Agent shall give prompt notice to the Borrower and the
Lenders of the applicable interest rate determined by the Agent for purposes of
Section 2.07(a)(i) or (ii), and the rate, if any, furnished by each Reference
Bank for the purpose of determining the interest rate under Section 2.07(a)(ii).

                  (b) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Agent that the Eurodollar Rate for any Interest
Period for such Advances will not adequately reflect the cost to such Required
Lenders of making, funding or maintaining their respective Eurodollar Rate
Advances for such Interest Period, the Agent shall forthwith so notify the
Borrower and the Lenders, whereupon (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance, and (ii) the obligation of the Lenders to
make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances
shall be suspended until the Agent shall notify the Borrower and the Lenders
that the circumstances causing such suspension no longer exist.

                  (c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Lenders and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, be Converted into Base Rate Advances.

                  (d) On the date on which the aggregate unpaid principal amount
of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.

                  (e) Upon the occurrence and during the continuance of any
Event of Default, (i) each Eurodollar Rate Advance will automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (ii) the obligation of the Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended.

                  (f) If Telerate Page 3750 is unavailable and fewer than two
Reference Banks furnish timely information to the Agent for determining the
Eurodollar Rate or LIBO Rate for any Eurodollar Rate Advances or LIBO Rate
Advances, as the case may be,
<PAGE>   23
                                       19

                  (i) the Agent shall forthwith notify the Borrower and the
         Lenders that the interest rate cannot be determined for such Eurodollar
         Rate Advances or LIBO Rate Advances, as the case may be,

                  (ii) with respect to Eurodollar Rate Advances, each such
         Advance will automatically, on the last day of the then existing
         Interest Period therefor, be prepaid by the Borrower or be
         automatically Converted into a Base Rate Advance (or if such Advance is
         then a Base Rate Advance, will continue as a Base Rate Advance), and

                  (iii) the obligation of the Lenders to make Eurodollar Rate
         Advances or LIBO Rate Advances or to Convert Revolving Credit Advances
         into Eurodollar Rate Advances shall be suspended until the Agent shall
         notify the Borrower and the Lenders that the circumstances causing such
         suspension no longer exist.

                   SECTION 2.09. Optional Conversion of Revolving Credit
Advances. The Borrower may on any Business Day, upon notice given to the Agent
not later than 2:00 P.M. (New York City time) on the third Business Day prior to
the date of the proposed Conversion and subject to the provisions of Sections
2.08 and 2.12, Convert all Revolving Credit Advances of one Type comprising the
same Borrowing into Revolving Credit Advances of the other Type; provided,
however, that any Conversion of Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an Interest Period for such Eurodollar
Rate Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b) and no Conversion of any Revolving Credit Advances shall result
in more separate Revolving Credit Borrowings than permitted under Section
2.02(b). Each such notice of a Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Revolving
Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar
Rate Advances, the duration of the initial Interest Period for each such
Advance. Each notice of Conversion shall be irrevocable and binding on the
Borrower.

                  SECTION 2.10. Prepayments of Revolving Credit Advances. The
Borrower may, upon notice at least two Business Days' prior to the date of such
prepayment, in the case of Eurodollar Rate Advances, and not later than 2:00
P.M. (New York City time) on the date of such prepayment, in the case of Base
Rate Advances, to the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding principal amount of the Revolving Credit Advances comprising
part of the same Revolving Credit Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and (y) in the event of any such prepayment of a
Eurodollar Rate Advance, the Borrower shall be obligated to reimburse the
Lenders in respect thereof pursuant to Section 8.04(c).

                  SECTION 2.11. Requirements of Law. (a) If the adoption of or
any change in any Requirement of Law or in the interpretation or application
thereof or compliance by any Lender with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:

                  (i) shall subject any Lender to any tax of any kind whatsoever
         with respect to any Eurodollar Rate Advance made by it, or change the
         basis of taxation of payments to such Lender of principal, interest,
         fees or any other amount payable in respect thereof (except for
         Non-Excluded Taxes covered by Section 2.14 and changes in taxes imposed
         on or measured by the overall net income of such Lender or its lending
         office for such Advance);

                  (ii) shall impose, modify or hold applicable any reserve,
         special deposit, compulsory loan or similar requirement against assets
         held by, deposits or other liabilities in or for the account of,
         advances,
<PAGE>   24
                                       20

         loans or other extensions of credit by, or any other acquisition of
         funds by, any office of such Lender which is not otherwise included in
         the determination of the Eurodollar Rate hereunder; or

                  (iii) shall impose on such Lender any other condition (except
         for any condition covered by clauses (i) or (ii) above and not
         specifically excluded from the coverage of such clauses by the terms
         thereof);

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Rate Advances or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower in writing,
through the Agent, of the event by reason of which it has become so entitled;
provided, that the Borrower shall not be required to compensate a Lender for
costs in respect of any period beginning before the date which is 120 days prior
to the date on which the Borrower receives notice that such costs have been
imposed, or if such costs have been imposed retroactively, the period beginning
on such earlier date on which such costs shall have become effective (excluding,
however, any portion of such period which is after the date of adoption of or
change in the relevant Requirement of Law and more than 120 days prior to the
date on which the Borrower had received notice that such costs had been
imposed). A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender, through the Agent, to the Borrower shall be
conclusive in the absence of manifest error.

                      (b) If any Lender shall have determined that the adoption
of or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Agent) of a written request therefor, the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.

                      SECTION 2.12. Illegality. Notwithstanding any other
provision herein, if the adoption of or any change in any Requirement of Law or
in the interpretation or application thereof shall make it unlawful for any
Lender to make or maintain Eurodollar Rate Advances as contemplated by this
Agreement, (a) the commitment of such Lender hereunder to make Eurodollar Rate
Advances, continue Eurodollar Rate Advances as such and convert Base Rate
Advances to Eurodollar Rate Advances shall forthwith be canceled and (b) such
Lender's Revolving Credit Advances then outstanding as Eurodollar Rate Advances,
if any, shall be converted automatically to Base Rate Advances on the respective
last days of the then current Interest Periods with respect to such Revolving
Credit Advances or within such earlier period as required by law. If any such
conversion of a Eurodollar Rate Advance occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the Borrower shall
pay to such Lender such amounts, if any, as may be required pursuant to Section
8.04(c).

                      SECTION 2.13. Payments and Computations. (a) The Borrower
shall make each payment hereunder not later than 2:00 P.M. (New York City time)
on the day when due to the Agent at the Agent's Account in same day funds. The
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal or interest or fees ratably (other than amounts payable
pursuant to Section 2.03, 2.11, 2.14 or 8.04(c)) to the Lenders for the account
of their respective Applicable Lending Offices, and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon any Assuming Lender becoming a Lender
hereunder

<PAGE>   25
                                       21

as a result of an extension of the Termination Date pursuant to Section 2.17,
and upon the Agent's receipt of such Lender's Assumption Agreement and recording
of the information contained therein in the Register, from and after the
applicable Extension Date, the Agent shall make all payments hereunder and under
any Notes issued in connection therewith in respect of the interest assumed
thereby to the Assuming Lender. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in the Register
pursuant to Section 8.07(c), from and after the effective date specified in such
Assignment and Acceptance, the Agent shall make all payments hereunder and under
the Notes in respect of the interest assigned thereby to the Lender assignee
thereunder, and the parties to such Assignment and Acceptance shall make all
appropriate adjustments in such payments for periods prior to such effective
date directly between themselves.

                  (b)      The Borrower hereby authorizes each Lender, if and to
the extent payment owed to such Lender is not made when due hereunder or under
the Note held by such Lender, to charge from time to time against any or all of
the Borrower's accounts with such Lender any amount so due.

                  (c)      All computations of interest based on the Base Rate
shall be made by the Agent on the basis of a year of 365 or 366 days, as the
case may be, and all computations of interest based on the Eurodollar Rate, the
LIBO Rate or the Federal Funds Rate or in respect of Fixed Rate Advances and of
fees shall be made by the Agent on the basis of a year of 360 days, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such interest or fees are payable. Each
determination by the Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error.

                  (d)      Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances or LIBO Rate Advances to be
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.

                  (e)      Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Lender on such due date an amount equal to the amount then due such Lender. If
and to the extent the Borrower shall not have so made such payment in full to
the Agent, each Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.

                  SECTION  2.14. Taxes. (a) All payments made by the Borrower
under this Agreement and the Notes shall be made free and clear of, and without
deduction or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority ("Taxes"), excluding (i) Taxes imposed on the
Agent or any Lender as a result of a present or former connection between the
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such Tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or the Notes) and (ii) Taxes imposed by the
United States on any Lender other than as a result of a Change in Law relating
to such Lender (any such non-excluded Taxes, "Non-Excluded Taxes"). If any Taxes
are required to be withheld from any amounts payable to the Agent or any Lender
hereunder or under the Notes, (A) the Borrower or the Agent shall withhold and
deduct any such Taxes from such amounts, (B) the Borrower or the Agent shall pay
to or deposit with the appropriate taxing authority in a timely manner the full
amount of Taxes so withheld or deducted, (C) the Borrower or the Agent
<PAGE>   26
                                       22

shall reasonably promptly send to the Agent or such Lender a certified copy of
an original official receipt received by the Borrower (or other documentation
reasonably acceptable to the Agent or such Lender) showing payment thereof, and
(D) if such Taxes are Non-Excluded Taxes, the amounts so payable to the Agent or
such Lender shall be increased to the extent necessary to yield to the Agent or
such Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes, provided, however, that the Borrower shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof if
such Lender fails to comply with the requirements of paragraph (b) of this
subsection. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the required
documentary evidence set forth in clause (C) above, the Borrower shall indemnify
the Agent and the Lenders for any incremental Taxes, interest or penalties that
may become payable by the Agent or any Lender as a result of any such failure.
The agreements in this subsection shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.

                  (b)      Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:

                  (i)      on or prior to the date such Lender becomes a Lender
         hereunder deliver to the Borrower and the Agent two duly completed and
         accurate copies of United States Internal Revenue Service Form W-8BEN
         or W-8ECI, or successor applicable form, as the case may be;

                  (ii)     deliver to the Borrower and the Agent two further
         duly completed and accurate copies of any such form or certification on
         or before the date that any such form or certification expires or
         becomes obsolete and after the occurrence of any event requiring a
         change in the most recent form previously delivered by it to the
         Borrower; and

                  (iii)    obtain such extensions of time for filing and
         complete such forms or certifications as may reasonably be requested by
         the Borrower or the Agent;

unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall make the certifications set forth in Form W-8BEN or W-8ECI, as
the case may be, in order to establish that it is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes and that it is entitled to an exemption from United States
backup withholding tax. As provided in subsection 8.07, each Person that shall
become a Lender pursuant to Section 8.07 and that is not incorporated under the
laws of the United States of America or any state thereof shall, upon the
effectiveness of the related transfer, be required to provide all of the forms
and statements required pursuant to this subsection. In addition, each Lender
shall, upon the written request of the Borrower, provide the Borrower with such
other forms, certificates or documentation as may be reasonably necessary to
claim any exemption from, or reduced rate of, Taxes for which the Borrower is
liable under this Section 2.14; provided that such action shall not cause the
imposition on such Lender of any material additional costs or legal, regulatory
or administrative burdens. If an event occurs after the date on which any form,
certificate or documentation is submitted by a Lender that renders such item or
the information set forth therein incorrect, such Lender shall promptly notify
the Borrower and the Agent in writing of such incorrectness.

                  (c)      For purposes of this Section 2.14, "Change in Law"
shall mean, with respect to any Lender, a change in the Code, the Treasury
Regulations thereunder or any official interpretation thereof (or any officially
proposed changes in the interpretation thereof) or an amendment or revocation of
an applicable United States income tax treaty after the date such Lender
acquired its Notes.
<PAGE>   27
                                       23

                  SECTION  2.15. Sharing of Payments, Etc. If any Lender shall
obtain any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) on account of the Revolving Credit Advances
owing to it (other than pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of
its ratable share of payments on account of the Revolving Credit Advances
obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in the Revolving Credit Advances owing to them as
shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Lender, such
purchase from each Lender shall be rescinded and such Lender shall repay to the
purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Lender's ratable share (according to the proportion
of (i) the amount of such Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 2.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.

                  SECTION  2.16. Evidence of Debt. (a) Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Revolving
Credit Advance owing to such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder in respect of Revolving Credit Advances. The Borrower agrees that upon
notice by any Lender to the Borrower (with a copy of such notice to the Agent)
to the effect that a Revolving Credit Note is required or appropriate in order
for such Lender to evidence (whether for purposes of pledge, enforcement or
otherwise) the Revolving Credit Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a
Revolving Credit Note payable to the order of such Lender in a principal amount
up to the Commitment of such Lender.

                  (b)      The Register maintained by the Agent pursuant to
Section 8.07(d) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Borrowing made hereunder, the Type of Advances comprising
such Borrowing and, if appropriate, the Interest Period applicable thereto, (ii)
the terms of each Assumption Agreement and each Assignment and Acceptance
delivered to and accepted by it, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iv) the amount of any sum received by the Agent from the Borrower
hereunder and each Lender's share thereof.

                  (c)      Entries made in good faith by the Agent in the
Register pursuant to subsection (b) above, and by each Lender in its account or
accounts pursuant to subsection (a) above, shall be prima facie evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrower to, in the case of the Register, each Lender and, in the case
of such account or accounts, such Lender, under this Agreement, absent manifest
error; provided, however, that the failure of the Agent or such Lender to make
an entry, or any finding that an entry is incorrect, in the Register or such
account or accounts shall not limit or otherwise affect the obligations of the
Borrower under this Agreement.

                  SECTION  2.17. Extension of Termination Date. (a) At least 45
days but not more than 60 days prior to any anniversary of the Effective Date,
the Borrower, by written notice to the Agent, may request an extension of the
Termination Date in effect at such time by one year from its then scheduled
expiration. The Agent shall promptly notify each Lender of such request, and
each Lender shall in turn, in its sole discretion, not earlier than 30 days
prior to such anniversary date (and not later than 20 days prior to such
anniversary date), notify the Borrower and the Agent in writing as to whether
such Lender will consent to such extension. If any Lender shall fail to notify
the Agent and the Borrower in writing of its consent to any such request for
extension of the Termination Date at least 15 days prior to such anniversary
date, such Lender shall be deemed to be a Non-Consenting Lender with respect to
such request. The Agent shall notify the Borrower not later than 15 days prior
to such anniversary date of the decision of the Lenders regarding the Borrower's
request for an extension of the Termination Date.
<PAGE>   28
                                       24

                  (b)      If all the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section 2.17, the Termination
Date in effect at such time shall, effective as at the applicable anniversary
date (the "Extension Date"), be extended for one year; provided that on each
Extension Date the applicable conditions set forth in Article III shall be
satisfied. If less than all of the Lenders consent in writing to any such
request in accordance with subsection (a) of this Section 2.17, the Termination
Date in effect at such time shall, effective as at the applicable Extension Date
and subject to subsection (d) of this Section 2.17, be extended as to those
Lenders that so consented (each a "Consenting Lender") but shall not be extended
as to any other Lender (each a "Non-Consenting Lender"). To the extent that the
Termination Date is not extended as to any Lender pursuant to this Section 2.17
and the Commitment of such Lender is not assumed in accordance with subsection
(c) of this Section 2.17 on or prior to the applicable Extension Date, the
Commitment of such Non-Consenting Lender shall automatically terminate in whole
on such unextended Termination Date without any further notice or other action
by the Borrower, such Lender or any other Person; provided that such
Non-Consenting Lender's rights under Sections 2.11, 2.14 and 8.04, and its
obligations under Section 7.05, shall survive the Termination Date for such
Lender as to matters occurring prior to such date. It is understood and agreed
that no Lender shall have any obligation whatsoever to agree to any request made
by the Borrower for any requested extension of the Termination Date.

                  (c)      If less than all of the Lenders consent to any such
request pursuant to subsection (a) of this Section 2.17, the Agent shall
promptly so notify the Consenting Lenders, and each Consenting Lender may, in
its sole discretion, give written notice to the Agent not later than 10 days
prior to the Termination Date of the amount of the Non-Consenting Lenders'
Commitments for which it is willing to accept an assignment. If the Consenting
Lenders notify the Agent that they are willing to accept assignments of
Commitments in an aggregate amount that exceeds the amount of the Commitments of
the Non-Consenting Lenders, such Commitments shall be allocated among the
Consenting Lenders willing to accept such assignments in such amounts as are
agreed between the Borrower and the Agent. If after giving effect to the
assignments of Commitments described above there remains any Commitments of
Non-Consenting Lenders, the Borrower may arrange for one or more Consenting
Lenders or other Eligible Assignees (each, an "Assuming Lender") to assume,
effective as of the Extension Date, any Non-Consenting Lender's Commitment and
all of the obligations of such Non-Consenting Lender under this Agreement
thereafter arising, without recourse to or warranty by, or expense to, such
Non-Consenting Lender; provided, however, that the amount of the Commitment of
any such Assuming Lender as a result of such substitution shall in no event be
less than $25,000,000 unless the amount of the Commitment of such Non-Consenting
Lender is less than $25,000,000, in which case such Assuming Lender shall assume
all of such lesser amount; and provided further that:

                  (i)      any such Consenting Lender or Assuming Lender shall
         have paid to such Non-Consenting Lender (A) the aggregate principal
         amount of, and any interest accrued and unpaid to the effective date of
         the assignment on, the outstanding Advances, if any, of such
         Non-Consenting Lender plus (B) any accrued but unpaid fees owing to
         such Non-Consenting Lender as of the effective date of such assignment;

                  (ii)     all additional costs reimbursements, expense
         reimbursements and indemnities payable to such Non-Consenting Lender,
         and all other accrued and unpaid amounts owing to such Non-Consenting
         Lender hereunder, as of the effective date of such assignment shall
         have been paid to such Non-Consenting Lender; and

                  (iii)    with respect to any such Assuming Lender, the
         applicable processing and recordation fee required under Section
         8.07(a) for such assignment shall have been paid;

provided further that such Non-Consenting Lender's rights under Sections 2.11,
2.14 and 8.04, and its obligations under Section 7.05, shall survive such
substitution as to matters occurring prior to the date of substitution. At least
three Business Days prior to any Extension Date, (A) each such Assuming Lender,
if any, shall have delivered to the Borrower
<PAGE>   29
                                       25

and the Agent agreement (an "Assumption Agreement"), duly executed by such
Assuming Lender, such Non-Consenting Lender, the Borrower and the Agent, (B) any
such Consenting Lender shall have delivered confirmation in writing satisfactory
to the Borrower and the Agent as to the increase in the amount of its Commitment
and (C) each Non-Consenting Lender being replaced pursuant to this Section 2.17
shall have delivered to the Agent any Note or Notes held by such Non-Consenting
Lender. Upon the payment or prepayment of all amounts referred to in clauses
(i), (ii) and (iii) of the immediately preceding sentence, each such Consenting
Lender or Assuming Lender, as of the Extension Date, will be substituted for
such Non-Consenting Lender under this Agreement and shall be a Lender for all
purposes of this Agreement, without any further acknowledgment by or the consent
of the other Lenders, and the obligations of each such Non-Consenting Lender
hereunder shall, by the provisions hereof, be released and discharged.

                  (d)      If (after giving effect to any assignments or
assumptions pursuant to subsection (c) of this Section 2.17) all of the Lenders
having Commitments equal to at least 50% of the Commitments in effect
immediately prior to the Extension Date consent in writing to a requested
extension (whether by execution or delivery of an Assumption Agreement or
otherwise) as promptly as practicable, and in any event not later than one
Business Day prior to such Extension Date, the Agent shall so notify the
Borrower, and, subject to the satisfaction to the applicable conditions in
Article III, the Termination Date then in effect shall be extended for the
additional one-year period as described in subsection (a) of this Section 2.17,
and all references in this Agreement, and in the Notes, if any, to the
"Termination Date" shall, with respect to each Consenting Lender and each
Assuming Lender for such Extension Date, refer to the Termination Date as so
extended. Promptly following each Extension Date, the Agent shall notify the
Lenders (including, without limitation, each Assuming Lender) of the extension
of the scheduled Termination Date in effect immediately prior thereto and shall
thereupon record in the Register the relevant information with respect to each
such Consenting Lender and each such Assuming Lender.

                                   ARTICLE III

                     CONDITIONS TO EFFECTIVENESS AND LENDING

                  SECTION  3.01. Conditions Precedent to Effectiveness of
Sections 2.01 and 2.03. Sections 2.01 and 2.03 of this Agreement shall become
effective on and as of the first date (the "Effective Date") on which the
following conditions precedent have been satisfied:

                  (a)      There shall have occurred no Material Adverse Change
         since December 31, 1999.

                  (b)      Except as set forth on Schedule IV, there shall exist
         no action, suit, investigation, litigation or proceeding affecting the
         Borrower or any of its Subsidiaries pending or threatened before any
         court, governmental agency or arbitrator that could reasonably be
         expected to result in a Material Adverse Change.

                  (c)      Nothing shall have come to the attention of the
         Lenders during the course of their due diligence investigation to lead
         them to believe that the Information Memorandum was or has become
         misleading, incorrect or incomplete in any material respect; without
         limiting the generality of the foregoing, the Lenders shall have been
         given such access to the management, records, books of account,
         contracts and properties of the Borrower and its Subsidiaries as they
         shall have reasonably requested.

                  (d)      All governmental and material third party consents
         and approvals necessary in connection with the transactions
         contemplated hereby shall have been obtained (without the imposition of
         any conditions that are not reasonably acceptable to the Lenders) and
         shall remain in effect, and no law or regulation shall be applicable in
         the reasonable judgment of the Lenders that restrains, prevents or
         imposes materially adverse conditions upon the transactions
         contemplated hereby.
<PAGE>   30
                                       26

                  (e)      The Borrower shall have notified each Lender and the
         Agent in writing as to the proposed Effective Date.

                  (f)      The Borrower shall have paid all accrued fees and
         expenses of the Agent and the Lenders (including the reasonable fees
         and expenses of a single firm of counsel to the Agent) to the extent
         invoiced to the Borrower at least one Business Day prior to the
         Effective Date.

                  (g)      On the Effective Date, the following statements shall
         be true and the Agent shall have received for the account of each
         Lender a certificate signed by a duly authorized officer of the
         Borrower, dated the Effective Date, stating that:

                           (i)      The representations and warranties contained
                  in Section 4.01 are correct on and as of the Effective Date,
                  and

                           (ii)     No event has occurred and is continuing that
                  constitutes a Default.

                  (h)      The Agent shall have received on or before the
         Effective Date the following, each dated such day, in form and
         substance satisfactory to the Agent and (except for the Revolving
         Credit Notes) in sufficient copies for each Lender:

                           (i)      The Revolving Credit Notes to the order of
                  the Lenders to the extent requested by any Lender pursuant to
                  Section 2.16.

                           (ii)     Certified copies of the resolutions of the
                  Board of Directors of the Borrower approving this Agreement
                  and the Notes, and of all documents evidencing other necessary
                  corporate action and governmental approvals, if any, with
                  respect to this Agreement and the Notes.

                           (iii)    A certificate of the Secretary or an
                  Assistant Secretary of the Borrower certifying the names and
                  true signatures of the officers of the Borrower authorized to
                  sign this Agreement and the Notes and the other documents to
                  be delivered hereunder.

                           (iv)     Favorable opinions of (A) Assistant General
                  Counsel and Assistant Secretary to the Borrower substantially
                  in the form of Exhibit E-1 hereto and (B) Debevoise and
                  Plimpton, counsel to the Borrower, substantially in the form
                  of Exhibit E-2 hereto, and as to such other matters as any
                  Lender through the Agent may reasonably request.

                           (v)      A favorable opinion of Shearman & Sterling,
                  counsel for the Agent, in form and substance satisfactory to
                  the Agent.

                  (i)      The Borrower shall have terminated the commitments of
         the lenders and repaid or prepaid all of the Indebtedness under, the
         Second Amended and Restated Credit Agreement dated as of June 25, 1997
         among the Borrower, the lenders parties thereto and The Chase Manhattan
         Bank, as administrative agent.

                  SECTION  3.02. Conditions Precedent to Each Revolving Credit
Borrowing and Extension Date. The obligation of each Lender to make a Revolving
Credit Advance on the occasion of each Revolving Credit Borrowing and each
extension of Commitments pursuant to Section 2.17 shall be subject to the
conditions precedent that the Effective Date shall have occurred and on the date
of such Revolving Credit Borrowing or the applicable
<PAGE>   31
                                       27

Extension Date (a) the following statements shall be true (and each of the
giving of the applicable Notice of Revolving Credit Borrowing, request for
Commitment Extension and the acceptance by the Borrower of the proceeds of such
Revolving Credit Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing or such Extension Date such
statements are true):

                  (i)      the representations and warranties contained in
         Section 4.01 (except, in the case of Revolving Credit Borrowings, the
         representations set forth in subsection (b) or (f)(ii) thereof) are
         correct on and as of such date, before and after giving effect to such
         Revolving Credit Borrowing or such Extension Date and to the
         application of the proceeds therefrom, as though made on and as of such
         date, and

                  (ii)     no event has occurred and is continuing, or would
         result from such Revolving Credit Borrowing, such Extension Date or
         from the application of the proceeds therefrom, that constitutes a
         Default;

and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.

                  SECTION  3.03. Conditions Precedent to Each Competitive Bid
Borrowing. The obligation of each Lender that is to make a Competitive Bid
Advance on the occasion of a Competitive Bid Borrowing to make such Competitive
Bid Advance as part of such Competitive Bid Borrowing is subject to the
conditions precedent that (i) the Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, (ii) on
or before the date of such Competitive Bid Borrowing, but prior to such
Competitive Bid Borrowing, the Agent shall have received a Competitive Bid Note
payable to the order of such Lender for each of the one or more Competitive Bid
Advances to be made by such Lender as part of such Competitive Bid Borrowing, in
a principal amount equal to the principal amount of the Competitive Bid Advance
to be evidenced thereby and otherwise on such terms as were agreed to for such
Competitive Bid Advance in accordance with Section 2.03, and (iii) on the date
of such Competitive Bid Borrowing the following statements shall be true (and
each of the giving of the applicable Notice of Competitive Bid Borrowing and the
acceptance by the Borrower of the proceeds of such Competitive Bid Borrowing
shall constitute a representation and warranty by the Borrower that on the date
of such Competitive Bid Borrowing such statements are true):

                  (a)      the representations and warranties contained in
         Section 4.01 (except, in the case of Revolving Credit Borrowings, the
         representations set forth in subsection (b) or (f)(ii) thereof) are
         correct on and as of the date of such Competitive Bid Borrowing, before
         and after giving effect to such Competitive Bid Borrowing and to the
         application of the proceeds therefrom, as though made on and as of such
         date and

                  (b)      no event has occurred and is continuing, or would
         result from such Competitive Bid Borrowing or from the application of
         the proceeds therefrom, that constitutes a Default.

                  SECTION  3.04. Determinations Under Section 3.01. For purposes
of determining compliance with the conditions specified in Section 3.01, each
Lender 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 the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Effective Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Effective Date.
<PAGE>   32
                                       28

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  SECTION  4.01. Representations and Warranties of the Borrower.
The Borrower represents and warrants as follows:

                  (a)      Financial Condition. The consolidated balance sheet
of the Borrower and its consolidated subsidiaries as at December 31, 1999 and
the related consolidated statements of income and of cash flows for the fiscal
year ended on such date, reported on by PricewaterhouseCoopers LLP, copies of
which have heretofore been furnished to each Lender, are complete and correct
and present fairly the consolidated financial condition of the Borrower and its
consolidated subsidiaries as at such date, and the consolidated results of their
operations and their consolidated cash flows for the fiscal years then ended.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants or
Responsible Officer, as the case may be, and as disclosed therein).

                  (b)      No Change. No event or circumstance since December
31, 1999 has occurred or is existing which has resulted in, or after giving
effect to the reasonably projected outcome or effect thereof will result in, a
Material Adverse Change.

                  (c)      Corporate Existence. The Borrower (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York, (ii) has the corporate power and authority, and the
legal right, to own and operate its property, to lease the property it operates
as lessee and to conduct the business in which it is currently engaged and (iii)
is duly qualified as a foreign corporation and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification except to the extent that
the failure to be so qualified would not reasonably be expected to result in a
Material Adverse Change.

                  (d)      Corporate Power; Authorization; Enforceable
Obligations. The Borrower has the corporate power and authority, and the legal
right, to make, deliver and perform the Loan Documents and to borrow hereunder
and has taken all necessary corporate action to authorize the Borrowings on the
terms and conditions of this Agreement and the Notes and to authorize the
execution, delivery and performance of the Loan Documents. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
Borrowings hereunder or the transactions contemplated hereby or with the
execution, delivery, performance, validity or enforceability of the Loan
Documents except such as have been obtained or made and are in full force and
effect. This Agreement has been, and each Note will be, duly executed and
delivered on behalf of the Borrower. This Agreement constitutes, and each Note
when executed and delivered will constitute, a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

                  (e)      No Legal Bar. The execution, delivery and performance
of the Loan Documents, the borrowings hereunder and the use of the proceeds
thereof will not violate the certificate of incorporation, charter or by-laws of
the Borrower or any Requirement of Law or Contractual Obligation of the Borrower
or of any of its Principal Domestic Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any provision of its certificate
of incorporation, charter or by-laws or any such Requirement of Law or
Contractual Obligation.

                  (f)      No Material Litigation. No litigation, investigation
or proceeding (including any Environmental Action) of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Borrower,
overtly
<PAGE>   33
                                       29

threatened by or against the Borrower or any of its Principal Domestic
Subsidiaries or against any of its or their respective properties or revenues
(i) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (ii) except as set forth on Schedule IV,
which after giving effect to the reasonably projected outcome or effect thereof,
will result in a Material Adverse Change.

                  (g)      No Default. Neither the Borrower nor any of its
Principal Domestic Subsidiaries is in default under or with respect to any of
its Contractual Obligations in any respect which has resulted in or, after
giving effect to the reasonably projected outcome or effect thereof, will result
in, a Material Adverse Change. No Default has occurred and is continuing.

                  (h)      Ownership of Property; Liens. Each of the Borrower
and its Principal Domestic Subsidiaries has good record and marketable title in
fee simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, and none of
such property is subject to any Lien except as permitted by Section 5.02(b)
except to the extent that the absence of such title or leasehold interest has
not resulted in, and after giving effect to the reasonably projected outcome or
effect thereof, will not result in, a Material Adverse Change.

                  (i)      Compliance with Law. The Borrower and each of its
Principal Domestic Subsidiaries is in compliance with all Requirements of Law
and Contractual Obligations except to the extent that the failure to comply
therewith has not resulted in, and, after giving effect to the reasonably
projected outcome or effect thereof, will not result in, a Material Adverse
Change.

                  (j)      Taxes. Each of the Borrower and its Principal
Domestic Subsidiaries has filed or caused to be filed all tax returns which, to
the knowledge of the Borrower, are required to be filed and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than any the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or its Principal Domestic
Subsidiaries, as the case may be) and, to the knowledge of the Borrower, no tax
Lien (other than a Lien for taxes that are not yet due and payable) has been
filed, with respect to any such tax, fee or other charge which, in any case, has
resulted in, or after giving effect to the reasonably projected outcome or
effect thereof will result in, a Material Adverse Change.

                  (k)      Federal Regulations. The Borrower is not engaged in
the business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect and no proceeds of an Advance have
been or will be used for any purpose which violates the provisions of the
Regulations of such Board of Governors. At no time would the obligations of the
Borrower hereunder or under the Notes be directly or "indirectly secured" by
assets of the Borrower and its consolidated Subsidiaries that are "margin stock"
(pursuant to, and as such captioned terms are defined in, Section 221.2(g) of
Regulation U), provided that in any event not more than 25% of the value of the
assets of the Borrower and its consolidated Subsidiaries subject to such
arrangements shall be represented by such margin stock. If requested by any
Lender or the Agent, the Borrower will furnish to the Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U.

                  (l)      ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) nor any other event has occurred during the five-year period prior
to the date on which this representation is made or deemed made with respect to
any Plan which has resulted in or, after giving effect to the reasonably
projected outcome or effect thereof, will result in, a Material Adverse Change.
<PAGE>   34
                                       30

                  (m)      Investment Company Act; Other Regulations. The
Borrower is not an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to regulation under any Federal or state
statute or regulation which limits its ability to incur indebtedness of the type
being incurred by it pursuant to this Agreement.

                  (n)      Subsidiaries. Set forth in Schedule II is a complete
and accurate list showing all Subsidiaries (other than inactive Subsidiaries)
existing as of the date of this Agreement, designating certain Subsidiaries as
Principal Domestic Subsidiaries and showing the jurisdiction of incorporation of
each Principal Domestic Subsidiary and the percentage of the outstanding shares
of Capital Stock of such Subsidiaries owned (directly or indirectly) by the
Borrower or any Subsidiary. All of the outstanding Capital Stock of each
Principal Domestic Subsidiary has been validly issued, is fully paid and
non-assessable and is owned by the Borrower or one or more of the Principal
Domestic Subsidiaries free and clear of all Liens. Each Principal Domestic
Subsidiary is duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation.

                  (o)      Purpose of Advances. The proceeds of the Advances
shall be used by the Borrower for its general corporate purposes, including,
without limitation, working capital and acquisitions.

                  (p)      Environmental Matters. Except as disclosed in the
Borrower's Annual Report on Form 10-K for fiscal year 1999, to the best
knowledge of the Borrower, the Borrower and each Principal Domestic Subsidiary
has complied with all applicable Environmental Laws, except for failures to
comply which have not resulted in, and after giving effect to the reasonably
projected outcome or effect thereof will not result in, a Material Adverse
Change. Except as disclosed in the Borrower's Annual Report on Form 10-K for
fiscal year 1999 or on Schedule III, to the best knowledge of the Borrower,
there are no events, conditions or circumstances involving the Borrower, any of
its Principal Domestic Subsidiaries or any Subsidiaries of such Principal
Domestic Subsidiaries with respect to management of any Hazardous Materials,
environmental pollution or contamination or employee health or safety which have
resulted in, or after giving effect to the reasonably projected outcome or
effect thereof will result in, a Material Adverse Change.

                  (q)      Information. All written information provided by the
Borrower to the Agent or any Lender in connection with this Agreement or the
Loan Documents and the transactions contemplated hereby and thereby, at the date
hereof or (if provided after the date hereof) at the date it was provided (i) in
the case of any factual matter (excluding any such information referred to in
paragraph (ii)), is true and accurate in all material respects and (ii) in the
case of financial and business projections, budgets, pro forma data and
forecasts (all of the foregoing being, together, "Projections"), contained
therein, were prepared in good faith and on reasonable grounds (it being
understood by the parties hereto that such Projections are subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Borrower and that no assurance can be given (without limiting any
other provision of this Agreement or the Loan Documents) that any such
Projections will be realized).

                                    ARTICLE V

                            COVENANTS OF THE BORROWER

                  SECTION  5.01. Affirmative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will:

                  (a)      Financial Statements. Furnish to each Lender:

                           (i)      as soon as available, but in any event
         within 100 days after the end of each fiscal year of the Borrower, a
         copy of the consolidated balance sheet of the Borrower and its
         consolidated subsidiaries as at the end of such year and the related
         consolidated statements of income and retained earnings and of cash
         flows for such year, setting forth in each case in comparative form the
         figures for the previous year,
<PAGE>   35
                                       31

         reported on without a "going concern" or like qualification or
         exception, or qualification arising out of the scope of the audit, by
         PricewaterhouseCoopers LLP or other independent certified public
         accountants of nationally recognized standing; and

                           (ii)     as soon as available, but in any event not
         later than 55 days after the end of each of the first three quarterly
         periods of each fiscal year of the Borrower, the unaudited consolidated
         balance sheet of the Borrower and its consolidated subsidiaries as at
         the end of such quarter and the related unaudited consolidated
         statements of income and retained earnings and of cash flows of the
         Borrower and its consolidated subsidiaries for such quarter and the
         portion of the fiscal year through the end of such quarter, setting
         forth in each case in comparative form the figures for the previous
         year, certified by a Responsible Officer as being fairly stated in all
         material respects (subject to normal year-end audit adjustments);

         all such financial statements shall be complete and correct in all
         material respects and shall be prepared in reasonable detail and in
         accordance with GAAP applied consistently throughout the periods
         reflected therein and with prior periods (except as approved by such
         accountants or officer, as the case may be, and disclosed therein).

                  (b)      Certificates; Other Information. Furnish to each
Lender:

                           (i)      concurrently with the delivery of the
         financial statements referred to in Section 5.01(a)(i), a certificate
         of the independent certified public accountants reporting on such
         financial statements stating that in making the examination necessary
         therefor no knowledge was obtained of any Default (including
         calculations demonstrating compliance with Section 5.02), except as
         specified in such certificate;

                           (ii)     concurrently with the delivery of the
         financial statements referred to in Sections 5.01(a)(i) and (ii), a
         certificate of a Responsible Officer stating that, to the best of such
         Officer's knowledge, the Borrower during such period has observed or
         performed all of its covenants and other agreements, and satisfied
         every condition, contained in this Agreement and in the Notes to be
         observed, performed or satisfied by it (including calculations
         demonstrating compliance with Section 5.02), and that such Officer has
         obtained no knowledge of any Default except as specified in such
         certificate;

                           (iii)    within ten days after the same are sent,
         copies of all financial statements and reports which the Borrower sends
         to its stockholders, and within ten days after the same are filed,
         copies of all financial statements and periodic financial reports which
         the Borrower may make to, or file with, the Securities and Exchange
         Commission or any successor or analogous Governmental Authority; and

                           (iv)     promptly, such additional financial and
         other information as any Lender may from time to time reasonably
         request.

                  (c)      Payment of Taxes and Other Obligations. Pay,
discharge or otherwise satisfy, in all material respects, and cause its
Principal Domestic Subsidiaries to pay, discharge or otherwise satisfy, in all
material respects (i) all material taxes, assessments and governmental changes
or levies imposed on its property when due by it and (ii) at or before maturity
or otherwise in accordance with reasonable business practices, all its material
obligations of whatever nature; provided, that the Borrower or its Principal
Domestic Subsidiaries, as the case may be, may contest its obligations in good
faith by appropriate proceedings if it maintains reserves in conformity with
GAAP with respect thereto.
<PAGE>   36
                                       32

                  (d)      Conduct of Business and Maintenance of Existence.
Continue to engage in businesses of the same general types as now conducted by
it and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except that nothing
in this Section 5.01(d) shall prevent (i) the Borrower from discontinuing any
business if such discontinuance is, in the opinion of its Board of Directors, in
the best interests of the Borrower and is not disadvantageous in any material
respect to any Lender or the holder of any Note or (ii) the abandonment,
modification or termination of rights, privileges and franchises of the
Borrower, if such abandonment, modification or termination is, in the opinion of
the Board of Directors, in the best interests of the Borrower and is not
disadvantageous in any material respect to any Lender or the holder of any Note.

                  (e)      Compliance With Laws, etc. Use commercially
reasonable efforts to comply, and to cause each Principal Domestic Subsidiary to
comply, in all material respects with all Requirements of Law and Contractual
Obligations except to the extent that failure to so comply would not, in the
reasonable judgment of the Borrower, be expected to result in a Material Adverse
Change, provided, however, that neither the Borrower nor any Principal Domestic
Subsidiary shall be required to comply with any Requirements of Law or
Contractual Obligations if the applicability or validity thereof shall currently
be contested in good faith by appropriate proceedings.

                  (f)      Maintenance of Property; Insurance. Keep all
Principal Properties in good working order and condition except that nothing in
this Section 5.01(f) shall prevent the Borrower or any of its Principal Domestic
Subsidiaries from discontinuing the operation and maintenance of any of its
Principal Properties if such discontinuance is, in the opinion of the Board of
Directors of the Borrower, in the best interest of the Borrower and is not
disadvantageous in any material respect to any Lender or the holder of any Note;
maintain, and cause each Principal Domestic Subsidiary to maintain, with
financially sound and reputable insurance companies insurance on all its
property of a character usually insured by companies similarly situated and
operating like properties in at least such amounts and against at least such
risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to each Lender, upon
written request, full information as to the insurance carried. The Borrower and
any Principal Domestic Subsidiary may self-insure (which term shall include
insurance by an affiliated insurance company) against any of the risks required
to be insured against pursuant to this Section 5.01(f) so long as such
self-insurance is not excessive in the light of self-insurance by companies
similarly situated and operating like properties, provided, in the case of any
insurance required by law, that such risk is permitted to be self-insured under
applicable law and such self-insurance complies with applicable law.

                  (g)      Inspection of Property; Books and Records;
Discussions. Keep, and cause each Principal Domestic Subsidiary to keep, proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit, and
cause any Principal Domestic Subsidiary to permit, representatives of any
Lender, at such Lender's own expense, to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and, after reasonable
notice to the Borrower, to discuss the business, operations, properties and
financial and other condition of the Borrower and its Principal Domestic
Subsidiaries with officers and employees of the Borrower and its Principal
Domestic Subsidiaries and with its independent certified public accountants.

                  (h)      Notices. Promptly give notice to the Agent and each
Lender of:

                           (i)      the occurrence of any Default;

                           (ii)     any (A) default or event of default under
                  any Contractual Obligation of the Borrower or any of its
                  Subsidiaries or (B) litigation, investigation or proceeding
                  which may exist at any time between the Borrower or any of its
                  Subsidiaries and any Governmental Authority, unless in either
                  case,
<PAGE>   37
                                       33

                  the Borrower has determined that such event has not resulted
                  in, or after giving effect to the reasonably projected outcome
                  or effect thereof will not result in, a Material Adverse
                  Change; and

                           (iii)    the following events, as soon as possible
                  and in any event within 30 days after the Borrower knows or
                  has reason to know thereof: (A) the occurrence or reasonably
                  expected occurrence of any Reportable Event with respect to
                  any Plan, a failure to make any required contribution to a
                  Plan, the creation of any Lien in favor of the PBGC or a Plan
                  or any withdrawal from, or the termination, Reorganization or
                  Insolvency of, any Multiemployer Plan or (B) the institution
                  of proceedings or the taking of any other action by the PBGC
                  or the Borrower or any Commonly Controlled Entity or any
                  Multiemployer Plan with respect to the withdrawal from, or the
                  terminating, Reorganization or Insolvency of, any Plan which
                  with respect to the events in clause (A) or (B), individually
                  or in the aggregate, could reasonably be expected to involve
                  an amount of $15,000,000 or more.

                  Each notice pursuant to this subsection shall be accompanied
                  by a statement of a Responsible Officer setting forth details
                  of the occurrence referred to therein and stating what action
                  the Borrower proposes to take with respect thereto.

                  SECTION  5.02. Negative Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower will not:

                  (a)      Financial Condition Covenants.

                           (i)      Maintenance of Tangible Net Worth. Permit
                  Consolidated Tangible Net Worth at any time to be less than
                  $1,500,000,000.

                           (ii)     Indebtedness for Money Borrowed to Total
                  Capitalization. Permit the ratio of Indebtedness for Money
                  Borrowed of the Borrower and its consolidated Subsidiaries
                  (determined on a consolidated basis in accordance with GAAP)
                  to Total Capitalization at any time to be greater than 0.6:1.

                  (b)      Limitation on Mortgages, Sale and Leaseback, etc.

                           (i)      The Borrower will not, nor will it permit
                  any Principal Domestic Subsidiary to, (i) issue, assume or
                  guarantee any Indebtedness for Money Borrowed, if such
                  Indebtedness for Money Borrowed is secured by a Lien upon, or
                  (ii) directly or indirectly secure any outstanding
                  Indebtedness for Money Borrowed by a mortgage upon, any
                  Principal Property now owned or hereinafter acquired;
                  provided, however, that the foregoing restriction shall not
                  apply to the following:

                                    (A)      Mortgages on any Principal Property
                           acquired, constructed or improved by the Borrower or
                           any Principal Domestic Subsidiary after the date of
                           this Agreement which are created or assumed
                           contemporaneously with, or within 90 days after, such
                           acquisition, construction or improvement to secure or
                           provide for the payment of any part of the purchase
                           price of such property or the cost of such
                           construction or improvement incurred after the date
                           of this Agreement, or, in addition to Mortgages
                           contemplated by clause (ii) below, Mortgages on any
                           Principal Property existing at the time of
                           acquisition thereof, provided, that in the case of
                           any such acquisition, construction or improvement the
                           Mortgage shall not apply to any property theretofore
                           owned by the Borrower or any Principal Domestic
                           Subsidiary, other than in the case of any such
                           construction or improvement, any theretofore
                           unimproved real property on which the property so
                           constructed, or the improvement, is located;
<PAGE>   38
                                       34

                                    (B)      Mortgages on any Principal Property
                           owned by a corporation which is merged with or into,
                           or otherwise acquired by, the Borrower or a Principal
                           Domestic Subsidiary;

                                    (C)      Mortgages to secure Indebtedness
                           for Money Borrowed of a Principal Domestic Subsidiary
                           to the Borrower or to another Principal Domestic
                           Subsidiary;

                                    (D)      any extension, renewal or
                           replacement (or successive extensions, renewals or
                           replacements), in whole or in part, of any Mortgage
                           referred to in the foregoing clauses (i) to (iii),
                           inclusive; provided, however, that the principal
                           amount of Indebtedness for Money Borrowed secured
                           thereby shall not exceed the principal amount of
                           Indebtedness for Money Borrowed so secured at the
                           time of such extension, renewal or replacement, and
                           that such extension, renewal or replacement shall be
                           limited to all or part of the property which secured
                           the mortgage so extended, renewed or replaced (plus
                           improvements on such property); and

                                    (E)      the issuance, assumption or
                           guarantee of secured Indebtedness for Money Borrowed
                           which would otherwise be subject to the foregoing
                           restrictions of this subsection 5.02(b) in an
                           aggregate amount which, together with all other such
                           Indebtedness for Money Borrowed of the Borrower and
                           its Principal Domestic Subsidiaries and the
                           Attributable Debt in respect of Sale and Lease-Back
                           Transactions (other than Sale and Lease-Back
                           Transactions permitted because the Borrower would be
                           entitled to incur Indebtedness for Money Borrowed
                           secured by a mortgage on the property to be leased
                           pursuant to the provisions of this Section 5.02(b)
                           and other than Sale and Lease-Back Transactions the
                           proceeds of which have been applied in accordance
                           with the limitations on Sale and Lease-Back
                           Transactions set forth in Section 5.02(b)(ii) below)
                           does not at the time exceed 10% of Consolidated
                           Tangible Net Worth.

                  For the purposes of this Section 5.02(b), the following types
                  of transactions, among others, shall not be deemed to create
                  Indebtedness for Money Borrowed secured by a mortgage:

                                    (A)      Production Payments; and

                                    (B)      Mortgages in favor of the United
                           States of America, any of its territories or
                           possessions, or any State thereof, or any department,
                           agency, instrumentality or political subdivision of
                           any thereof, or any department, agency or
                           instrumentality of any such political subdivision, to
                           secure partial progress, advance or other payments
                           pursuant to any contract or statute or to secure any
                           indebtedness incurred for the purpose of financing
                           all or any part of the purchase price or the cost of
                           constructing or improving the property subject to
                           such Mortgages.

                           (ii)     The Borrower will not, nor will it permit
                  any Principal Domestic Subsidiary to, enter into any Sale and
                  Lease-Back Transaction, unless the proceeds of such sale or
                  transfer are at least equal to the fair value (as determined
                  by the Board of Directors) of such property and either (A) the
                  Borrower or such Principal Domestic Subsidiary would be
                  entitled to incur Indebtedness for Borrowed Money secured by a
                  mortgage on the property to be leased pursuant to this Section
                  5.02(b) or (B) the Borrower shall, and in any such case the
                  Borrower covenants that it will, apply an amount equal to the
                  fair value (as determined by the Board of Directors) of the
                  property so leased to the retirement (other than any mandatory
                  retirement), within 90 days of the effective date of any such
                  Sale and Lease-Back Transaction, of Indebtedness for Money
                  Borrowed of the Borrower or such Principal Domestic Subsidiary
                  which by its terms matures at, or is extendible or renewable
                  at the option of the obligor to, a date more than twelve
                  months after the date of the creation of such Indebtedness for
                  Money Borrowed and which ranks prior to or on a parity with
                  the Advances; provided, however that the Borrower or any
                  Principal Domestic Subsidiary may enter into any Sale and
                  Lease-Back Transaction which would otherwise be subject to the
<PAGE>   39
                                       35

                  foregoing restrictions of this Section 5.02(b)(iii) if the
                  amount of the Attributable Debt in respect of such Sale and
                  Lease-Back Transactions for such transaction, together with
                  all secured Indebtedness for Money Borrowed of the Borrower
                  and its Principal Domestic Subsidiaries and all other
                  Attributable Debt in respect of Sale and Lease-Back
                  Transactions existing at such time (other than Sale and
                  Lease-Back Transactions permitted because the Borrower would
                  be entitled to incur Indebtedness for Money Borrowed secured
                  by a Lien on the property to be leased and other than Sale and
                  Lease-Back Transactions the proceeds of which have been
                  applied in accordance with the clause (B) of this subsection),
                  does not at the time exceed 10% of Consolidated Tangible Net
                  Worth.

                  (c)      Mergers, Etc. Merge or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of the assets (whether now
owned or thereafter acquired) of the Borrower and its Subsidiaries, taken as a
whole, to, any Person, or permit any of its Subsidiaries to do so, except that
(i) any Subsidiary of the Borrower may merge or consolidate with or into, or
dispose of substantially all of its assets to, one or more other Subsidiaries of
the Borrower, and any Subsidiary of the Borrower may merge into or dispose of
substantially all or substantially all of its assets to the Borrower and one or
more other Subsidiaries, (ii) the Borrower may merge with any other Person so
long as the Borrower is the surviving corporation and (iii) any Subsidiary of
the Borrower may merge or consolidate with or into, or dispose of all or
substantially all of its assets to, any Person so long as such merger or
disposition does not (whether in one transaction or in a series of transactions)
constitute a disposition of all or substantially all of the assets of the
Borrower and its Subsidiaries, taken as a whole, provided, that, in the case of
any merger or consolidation in accordance with clause (i) above in which a
Principal Domestic Subsidiary merges or consolidates with any Subsidiary (other
than another Principal Domestic Subsidiary) of the Borrower, such Principal
Domestic Subsidiary is the surviving corporation, and provided, further, in each
case, that no Default shall have occurred and be continuing at the time of such
proposed transaction or would result therefrom.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

                  SECTION  6.01. Events of Default. If any of the following
events ("Events of Default") shall occur and be continuing:

         (a)      The Borrower shall fail to pay any principal of any Advance
when due in accordance with the terms thereof or hereof; or the Borrower shall
fail to pay any interest on any Advance, or any other amount payable hereunder,
within five Business Days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or

         (b)      Any representation or warranty made or deemed made by the
Borrower herein or which is contained in any certificate, document or financial
or other statement furnished by it at any time under or in connection with this
Agreement shall prove to have been incorrect in any material respect on or as of
the date made or deemed made; or

         (c)      The Borrower shall default in the observance or performance of
any agreement contained in Section 5.02 (a) through (c) or (unless such default
is capable of remedy and is remedied to the reasonable satisfaction of the
Required Lenders with 30 days of such default) Section 5.02(d); or

         (d)      The Borrower shall default in the observance or performance of
any other agreement contained in this Agreement (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall continue
<PAGE>   40
                                       36

unremedied for a period of 30 days after notice thereof has been given to the
Borrower in accordance with this Agreement; or

         (e)      The Borrower or any of its Principal Domestic Subsidiaries
shall (i) default in any payment of principal of or interest of any Indebtedness
for Money Borrowed (other than the Advances), beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under which
such Indebtedness for Money Borrowed was created (except for any such payments
on account of Indebtedness for Money Borrowed in an aggregate amount at any one
time of up to $20,000,000); or (ii) default in the observance or performance of
any other agreement or condition relating to any such Indebtedness for Money
Borrowed (except for any such Indebtedness in an aggregate principal amount at
any one time of up to $20,000,000) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness for Money
Borrowed (or a trustee or agent on behalf of such holder or holders) to cause,
with the giving of notice if required, such Indebtedness for Money Borrowed to
become due prior to its stated maturity; or

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

         (g)      (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any Lien
in favor of the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, has resulted in, or
after giving effect to the reasonably projected outcome or effect thereof will
result in, a Material Adverse Change; or

         (h)      One or more judgments or decrees shall be entered against the
Borrower or any of its Principal Domestic Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance) of $30,000,000 or
<PAGE>   41
                                       37

more, and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within 60 days from the entry thereof; or

         (i)      This Agreement or any of the Notes shall, at any time while
any Advance shall remain unpaid or any Lender shall have any Commitment
hereunder, cease to be in full force and effect or shall be declared to be null
and void, or the validity or enforceability thereof shall be contested by the
Borrower, or the Borrower shall deny that it has any or further liability or
obligation under this Agreement or any of the Notes; or

         (j)      (i) any Person or group (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) shall have acquired beneficial ownership, directly or indirectly, of
Voting Stock of the Borrower (or other securities convertible into such Voting
Stock) representing 35% or more of the combined voting power of all Voting Stock
of the Borrower; or (ii) during any period of up to 12 consecutive months,
commencing before or after the date of this Agreement, individuals who at the
beginning of such 12 month period were directors of the Borrower shall cease for
any reason (other than death or disability) to constitute a majority of the
Board of Directors of the Borrower (except to the extent that individuals who at
the beginning of such 12 month period were replaced by individuals (x) elected
by the remaining Board of Directors of the Borrower, or (y) nominated for
election by the remaining members of the Board of Directors of the Borrower and
thereafter elected as directors by shareholders of the Borrower), or (iii) any
Person or group (as so defined) shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation, will
result in a Change of Control under clause (i) or (ii) above;

then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement to be forthwith due and payable, whereupon the Advances, all such
interest and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by the Borrower; provided, however, that in the
event of an actual or deemed entry of an order for relief with respect to the
Borrower under the Federal Bankruptcy Code, (A) the obligation of each Lender to
make Advances shall automatically be terminated and (B) the Advances, all such
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.

                                   ARTICLE VII

                                    THE AGENT

                  SECTION  7.01. Authorization and Action. Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement as are delegated to
the Agent by the terms hereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
<PAGE>   42
                                       38

                  SECTION  7.02. Agent's Reliance, Etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent:
(i) may treat the Lender that made any Advance as the holder of the Indebtedness
resulting therefrom until the Agent receives and accepts an Assumption Agreement
entered into by an Assuming Lender as provided in Section 2.17 or an Assignment
and Acceptance entered into by such Lender, as assignor, and an Eligible
Assignee, as assignee, as provided in Section 8.07; (ii) may consult with legal
counsel (including counsel for the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
warranties or representations (whether written or oral) made in or in connection
with this Agreement; (iv) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement on the part of the Borrower or to inspect the property (including
the books and records) of the Borrower; (v) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.

                  SECTION  7.03. Citibank and Affiliates. With respect to its
Commitment, the Advances made by it and the Note issued to it, Citibank shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citibank in its
individual capacity. Citibank and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders.

                  SECTION  7.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon the Agent or
any other Lender and based on the financial statements referred to in Section
4.01 and such other documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement.

                  SECTION  7.05. Indemnification. The Lenders agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Revolving Credit Advances then owed to
each of them (or if no Revolving Credit Advances are at the time outstanding,
ratably according to the respective amounts of their Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any action
taken or omitted by the Agent under this Agreement (collectively, the
"Indemnified Costs"), provided that no Lender shall be liable for any portion of
the Indemnified Costs resulting from the Agent's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by the 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, to the extent that the Agent is not reimbursed for such expenses
by the Borrower. In the case of any investigation, litigation or proceeding
giving rise to any Indemnified Costs, this Section 7.05 applies whether any such
investigation, litigation or proceeding is brought by the Agent, any Lender or a
third party.
<PAGE>   43
                                       39

                  SECTION  7.06. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

                  SECTION  7.07. Other Agents. Each Lender hereby acknowledges
that neither the documentation agent nor any other Lender designated as any
"Agent" (other than Citibank, as Agent) on the signature pages hereof has any
liability hereunder other than in its capacity as a Lender.

                                  ARTICLE VIII

                                  MISCELLANEOUS

                  SECTION  8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Revolving Credit Notes, nor consent to any
departure by the Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) waive any of the conditions specified in Section 3.01, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment of principal of, or interest on, the Revolving Credit
Advances or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Advances, or the number of Lenders, that shall be required for
the Lenders or any of them to take any action hereunder or (f) amend this
Section 8.01; and provided further that no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Lenders required
above to take such action, affect the rights or duties of the Agent under this
Agreement or any Note.

                  SECTION  8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed
or delivered, if to the Borrower, at its address at 2600 North Central Avenue,
Phoenix, Arizona 85004-3014 , Attention: Treasurer; if to any Initial Lender, at
its Domestic Lending Office specified opposite its name on Schedule I hereto; if
to any other Lender, at its Domestic Lending Office specified in the Assumption
Agreement or the Assignment and Acceptance pursuant to which it became a Lender;
and if to the Agent, at its address at Two Penns Way, New Castle, Delaware
19720, Attention: Bank Loan Syndications Department; or, as to the Borrower or
the Agent, at such other address as shall be designated by such party in a
written notice to the other parties and, as to each other party, at such other
address as shall be designated by such party in a written notice to the Borrower
and the Agent. All such notices and communications shall, when mailed,
telecopied, telegraphed or telexed, be effective when deposited in the mails,
telecopied, delivered to the telegraph company or confirmed by telex answerback,
respectively, except that notices and communications to the Agent pursuant to
Article II, III or VII shall not be effective until received by the Agent.
Delivery by telecopier of an executed counterpart of any amendment or waiver of
any provision of this
<PAGE>   44
                                       40

Agreement or the Notes or of any Exhibit hereto to be executed and delivered
hereunder shall be effective as delivery of a manually executed counterpart
thereof.

                  SECTION  8.03. No Waiver; Remedies. No failure on the part of
any Lender or the Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.

                  SECTION  8.04. Costs and Expenses. (a) The Borrower agrees to
pay on demand all costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
out-of-pocket printing, distribution and bank meetings), transportation,
computer and duplication expenses and (B) the reasonable fees and expenses of
counsel for the Agent with respect thereto and with respect to advising the
Agent as to its rights and responsibilities under this Agreement. The Borrower
further agrees to pay on demand all costs and expenses of the Agent and the
Lenders, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes and the other
documents to be delivered hereunder, including, without limitation, reasonable
fees and expenses of counsel for the Agent and each Lender in connection with
the enforcement of rights under this Section 8.04(a).

                  (b)      The Borrower agrees to indemnify and hold harmless
the Agent and each Lender and each of their Affiliates and their officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel)
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including, without
limitation, in connection with any investigation, litigation or proceeding or
preparation of a defense in connection therewith) (i) the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances or (ii) the actual or alleged presence of Hazardous
Materials on any property of the Borrower or any of its Subsidiaries or any
Environmental Action relating in any way to the Borrower or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, shareholders or creditors
or an Indemnified Party or any other Person or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. The Borrower also agrees not to assert any claim for
special, indirect, consequential or punitive damages against the Agent, any
Lender, any of their Affiliates, or any of their respective directors, officers,
employees, attorneys and agents, on any theory of liability, arising out of or
otherwise relating to the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances.

                  (c)      If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or LIBO Rate Advance is made by the Borrower to or for
the account of a Lender other than on the last day of the Interest Period for
such Advance, as a result of a payment or Conversion pursuant to Section 2.08(d)
or (e), 2.10 or 2.12, acceleration of the maturity of the Notes pursuant to
Section 6.01 or for any other reason, or by an Eligible Assignee to a Lender
other than on the last day of the Interest Period for such Advance upon an
assignment of rights and obligations under this Agreement pursuant to Section
8.07 as a result of a demand by the Borrower pursuant to Section 8.07(a), the
Borrower shall, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that it
shall actually incur as a result of such payment or Conversion, including,
without limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Advance.
<PAGE>   45
                                       41

                  (d)      Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in Sections 2.11, 2.14 and 8.04 shall survive the payment in
full of principal, interest and all other amounts payable hereunder and under
the Notes.

                  SECTION  8.05. Right of Set-off. Upon (i) the occurrence and
during the continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by Section 6.01 to authorize
the Agent to declare the Notes due and payable pursuant to the provisions of
Section 6.01, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, 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 and other indebtedness at any time owing by such
Lender or such Affiliate to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement and the Note held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or such Note and although
such obligations may be unmatured. Each Lender agrees promptly to notify the
Borrower after any such set-off and application, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Lender and its Affiliates under this Section are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender and its Affiliates may have.

                  SECTION  8.06. Binding Effect. This Agreement shall become
effective (other than Sections 2.01 and 2.03, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Initial Lender that such Initial Lender has executed
it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.

                  SECTION  8.07. Assignments and Participations. (a) Each Lender
may with the consent of the Borrower and the Agent (which consent shall not be
unreasonably withheld or delayed) and, if demanded by the Borrower (following a
demand by such Lender pursuant to Section 2.11 or 2.14 and only so long as no
Default has occurred and is continuing) upon at least 5 Business Days' notice to
such Lender and the Agent, will assign to one or more Persons all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Revolving Credit Advances
owing to it and the Revolving Credit Note or Notes held by it); provided,
however, that (i) each such assignment shall be of a constant, and not a
varying, percentage of all rights and obligations under this Agreement (other
than any right to make Competitive Bid Advances, Competitive Bid Advances owing
to it and Competitive Bid Notes), (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender or an assignment
of all of a Lender's rights and obligations under this Agreement, the amount of
the Commitment of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $25,000,000 or an
integral multiple of $5,000,000 in excess thereof, (iii) each such assignment
shall be to an Eligible Assignee, (iv) each such assignment made as a result of
a demand by the Borrower pursuant to this Section 8.07(a) shall be arranged by
the Borrower after consultation with the Agent and shall be either an assignment
of all of the rights and obligations of the assigning Lender under this
Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Borrower pursuant to this Section 8.07(a) unless and
until such Lender shall have received one or more payments from either the
Borrower or one or more Eligible Assignees in an aggregate amount at least equal
to the aggregate outstanding principal amount of the Advances owing to such
Lender, together with accrued interest thereon to the date of payment of such
principal amount and all other amounts payable to such Lender under this
Agreement, and (vi) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Revolving Credit
<PAGE>   46
                                       42

Note subject to such assignment and a processing and recordation fee of $3,500
payable by the parties to each such assignment, provided, however, that in the
case of each assignment made as a result of a demand by the Borrower, such
recordation fee shall be payable by the Borrower except that no such recordation
fee shall be payable in the case of an assignment made at the request of the
Borrower to an Eligible Assignee that is an existing Lender, and (vii) any
Lender may, without the approval of the Borrower and the Agent, assign all or a
portion of its rights to any of its Affiliates or any other Lender or its
Affiliates. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, (x) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Section 2.11, 2.14 and 8.04
to the extent any claim thereunder relates to an event arising prior such
assignment) and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

                  (b)      By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee; (vi)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of this Agreement are required to be performed by it as a Lender.

                  (c)      Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with any Revolving Credit Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.

                  (d)      The Agent shall maintain at its address referred to
in Section 8.02 a copy of each Assumption Agreement and each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment of, and principal
amount of the Advances owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
<PAGE>   47
                                       43

                  (e)      Each Lender may sell participations to one or more
banks or other entities (other than the Borrower or any of its Affiliates) in or
to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment, the Advances
owing to it and any Note or Notes held by it); provided, however, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of this Agreement, (iv) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
(v) no participant under any such participation shall have any right to approve
any amendment or waiver of any provision of this Agreement or any Note, or any
consent to any departure by the Borrower therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such participation, or postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder, in each case to the extent subject to such participation.

                  (f)      Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure,
the assignee or participant or proposed assignee or participant shall agree to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.

                  (g)      Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and any Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.

                  SECTION  8.08. Confidentiality. Neither the Agent nor any
Lender shall disclose any Confidential Information to any other Person without
the consent of the Borrower, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and, as
contemplated by Section 8.07(f), to actual or prospective assignees and
participants, and then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process and (c) as requested or required by any
state, federal or foreign authority or examiner regulating banks or banking and
having jurisdiction over such Lender.

                  SECTION  8.09. Governing Law. This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State of
New York.

                  SECTION  8.10. Execution in Counterparts. This Agreement may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement..

                  SECTION  8.11. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the Notes, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. The Borrower hereby further
irrevocably consents to the service of process in any action or proceeding in
such courts by the mailing thereof by any parties hereto by registered or
certified mail, postage prepaid,
<PAGE>   48
                                       44

to the Borrower at its address specified pursuant to Section 8.02. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or the Notes in the courts of any
jurisdiction.

                  (b)      Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the Notes in any New York State or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

                  SECTION  8.12. Waiver of Jury Trial. Each of the Borrower, the
Agent and the Lenders hereby irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the Notes or the
actions of the Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                                   PHELPS DODGE CORPORATION

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

                                   CITIBANK, N.A.,
                                     as Agent

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

                                 Initial Lenders

<TABLE>
<CAPTION>
Commitment

<S>                                <C>
$160,000,000                       CITIBANK, N.A.

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

$125,000,000                       BANK OF TOKYO-MITSUBISHI
                                   TRUST COMPANY

                                   By
                                     -------------------------------------------
                                     Title:
</TABLE>

<PAGE>   49
                                       45

<TABLE>
<S>                                <C>
$85,000,000                        BANK OF AMERICA, N.A.

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

$85,000,000                        MORGAN GUARANTY TRUST COMPANY OF NEW YORK

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

$85,000,000                        THE INDUSTRIAL BANK OF JAPAN, LIMITED

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

$85,000,000                        WACHOVIA BANK, N.A.

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

$85,000,000                        WELLS FARGO BANK, NATIONAL
                                   ASSOCIATION

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

$60,000,000                        THE BANK OF NOVA SCOTIA

                                   By
                                     -------------------------------------------
                                     Title:
</TABLE>

<PAGE>   50
                                       46

<TABLE>
<S>                                <C>
$60,000,000                        CIBC INC.

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

$60,000,000                        FIRST UNION NATIONAL BANK

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

$60,000,000                        WESTDEUTSCHE LANDESBANK
                                   GIROZENTRALE, NEW YORK BRANCH

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

$50,000,000                        THE NORTHERN TRUST COMPANY

                                   By
                                     -------------------------------------------
                                     Title:
</TABLE>

$1,000,000,000        Total of the Commitments

<PAGE>   51
                                   SCHEDULE II

                          BORROWER AND ITS SUBSIDIARIES

                         PRINCIPAL DOMESTIC SUBSIDIARIES

<TABLE>
<CAPTION>
                                                   PERCENTAGE OF VOTING STOCK
                                                    HELD BY BORROWER AND ITS           JURISDICTION OF
                     NAME                             ASSOCIATED COMPANIES              INCORPORATION

<S>                                                <C>                                 <C>
Climax Molybdenum Company                                     100%                        Delaware
Columbian Chemicals Company                                   100%                        Delaware
Phelps Dodge Chino, Inc.                                      100%                        Delaware
Phelps Dodge Industries, Inc.                                 100%                        Delaware
Phelps Dodge Miami, Inc.                                      100%                        Delaware
Phelps Dodge Morenci, Inc.                                    100%                        Delaware
Phelps Dodge Refining Corporation                             100%                        New York
Phelps Dodge Sierrita, Inc.                                   100%                        Delaware
</TABLE>

                                  SUBSIDIARIES
                  (OTHER THAN PRINCIPAL DOMESTIC SUBSIDIARIES)

<TABLE>
<CAPTION>
                                                                                       PERCENTAGE OF VOTING STOCK
                                                                                        HELD BY BORROWER AND ITS
                                                                                          ASSOCIATED COMPANIES
                                        NAME
<S>                                                                                    <C>
AAV Corporation                                                                                  100.00%
Aislamientos Plasticos, C.A. (PLASTICA)                                                          100.00%
Ajo Improvement Company                                                                          100.00%
Alambres y Cables de Panama, S.A. (ALCAP)                                                         78.08%
Alambres y Cables Venezolanos, C.A. (ALCAVE)                                                      89.96%
ALCAP Commercial, S.A. (ALCOMER)                                                                 100.00%
Alcave Trading                                                                                   100.00%
Alcoa Fios e Cabos Electricos S.A.                                                                60.00%
Amax Arizona, Inc.                                                                               100.00%
Amax Canada Development Limited                                                                  100.00%
Amax de Chile, Inc.                                                                              100.00%
Amax Energy Inc.                                                                                 100.00%
Amax Exploration (Ireland), Inc.                                                                 100.00%
Amax Exploration, Inc.                                                                           100.00%
Amax Investment (France), Inc.                                                                   100.00%
Amax Metals Recovery, Inc.                                                                       100.00%
Amax Nickel Overseas Ventures, Inc.                                                              100.00%
Amax Realty Development, Inc.                                                                    100.00%
</TABLE>
<PAGE>   52
<TABLE>
<S>                                                                                    <C>
Amax Research & Development, Inc.                                                                100.00%
Amax Specialty Coppers Corporation                                                               100.00%
Amax Specialty Metals (Canada) Limited                                                           100.00%
Amax Specialty Metals (Driver), Inc.                                                             100.00%
Amax Zinc (Newfoundland) Limited                                                                 100.00%
American Metal Climax, Inc.                                                                      100.00%
Ametalco (Toronto) Limited                                                                       100.00%
Ametalco (Vancouver) Limited                                                                     100.00%
Ametalco Limited                                                                                 100.00%
Ametalco, Inc.                                                                                   100.00%
Arizona Community Investment Corporation                                                         100.00%
Ashfork Mines Limited                                                                            100.00%
Aurex International (Barbados) Ltd.                                                              100.00%
Bisbee Queen Mining Company                                                                       65.90%
Blackwell Zinc Company, Inc.                                                                     100.00%
Busa Mining Co., Inc.                                                                            100.00%
Byner Cattle Company                                                                             100.00%
Cables Electricos Ecuatorianos, C.A. (CABLEC)                                                     67.10%
Cahosa, S.A.   (Panama)                                                                           78.08%
CAM Receivables Corporation                                                                      100.00%
Canapian Mining Co., Inc.                                                                        100.00%
Capital Gestao de Negocios Ltda.                                                                 100.00%
Cates Douglas Corporation                                                                        100.00%
Chino Mines Company                                                                               66.67%
CIS Venture Kazakstan, L.L.C.                                                                     60.00%
CIS Venture Kyrgystan, L.L.C.                                                                     60.00%
Climax Canada Ltd.                                                                               100.00%
Climax Molybdenum B.V.                                                                           100.00%
Climax Molybdenum GmbH                                                                           100.00%
Climax Molybdenum Marketing Corporation                                                          100.00%
Climax Molybdenum S.R.L.                                                                         100.00%
Climax Molybdenum U.K. Limited                                                                   100.00%
Cobre Cerrillos S.A.  (COCESA)                                                                    65.86%
Cobre del Mayo, S.A. de C.V.                                                                      70.00%
Cobre Mining Company                                                                             100.00%
Cocesa Ingenieria y Construccion, S.A. (COCETEL)                                                 100.00%
Cocetel del Plata, S.A.  (Argentina)                                                              95.00%
Cocetel El Salvador                                                                              100.00%
Cocetel Ingenieria y Construccion, C.A.  (Venezuela)                                             100.00%
Columbian Carbon Deutschland G.M.B.H.                                                             90.00%
Columbian Carbon Europa S.R.L.                                                                   100.00%
Columbian Carbon International (France) S.A.                                                     100.00%
Columbian Carbon Japan Ltd.                                                                       68.00%
Columbian Carbon Philippines, Inc.                                                                88.20%
Columbian Carbon Spain, S.A.                                                                     100.00%
Columbian Chemicals Brasil, S.A.                                                                 100.00%
Columbian Chemicals Canada, Ltd.                                                                 100.00%
</TABLE>
<PAGE>   53
<TABLE>
<S>                                                                                    <C>
Columbian Chemicals Europa, GMBH                                                                 100.00%
Columbian Chemicals Korea Co., Ltd.                                                               85.00%
Columbian Holding Company                                                                         98.00%
Columbian International Chemicals Corporation (CICC)                                             100.00%
Columbian International Trading Company                                                          100.00%
Columbian Technology Company                                                                     100.00%
Columbian Tiszai Carbon Ltd.                                                                      60.00%
Columbian (U.K.) Limited (CUKL)                                                                  100.00%
Compania Contractual Minera Candelaria                                                            80.00%
Compania Contractual Minera Ojos del Salado                                                      100.00%
Compania Mexicana de Exploracion Cyprus S.A. de C.V.                                             100.00%
CONDUCEN, S.A.                                                                                    73.42%
CONDUCOMER, S.A. (formerly INDELEC)                                                              100.00%
Conductores Electricos de Centro America, S.A.  (CONELCA)                                         72.39%
Conductores y Aluminio, C.A. (CONAL)                                                             100.00%
Copper Market, Inc.                                                                              100.00%
Corobong Mining Co., Inc.                                                                        100.00%
Cyprus Amax Australia Corporation                                                                100.00%
Cyprus Amax Chile Holdings, Inc.                                                                 100.00%
Cyprus Amax China Corporation                                                                    100.00%
Cyprus Amax del Peru Corporation                                                                 100.00%
Cyprus Amax Finance Chile Corporation                                                            100.00%
Cyprus Amax Finance Corporation                                                                  100.00%
Cyprus Amax Indonesia Corporation                                                                100.00%
Cyprus Amax Kansanshi Holdings Limited                                                           100.00%
Cyprus Amax Leasing Corporation                                                                  100.00%
Cyprus Amax Minerals Company  (CAMC)                                                             100.00%
Cyprus Amax Minerals Japan Corporation                                                           100.00%
Cyprus Amax Philippines Corporation                                                              100.00%
Cyprus Amax PNG Holdings, Inc.                                                                   100.00%
Cyprus Amax Zambia Corporation                                                                   100.00%
Cyprus Amax Zimbabwe Corporation                                                                 100.00%
Cyprus Canada Inc.                                                                               100.00%
Cyprus Climax Metals Company  (CCMC)                                                             100.00%
Cyprus Copper Marketing Corporation                                                              100.00%
Cyprus Copperstone Gold Corporation                                                              100.00%
Cyprus El Abra Corporation                                                                       100.00%
Cyprus El Abra Minera Limitada                                                                   100.00%
Cyprus Exploration and Development Corporation                                                   100.00%
Cyprus Gold Company                                                                              100.00%
Cyprus Gold Exploration Corporation                                                              100.00%
Cyprus Metals Company                                                                            100.00%
Cyprus Metals Exploration Corporation                                                            100.00%
Cyprus Meullaboho Coal Mining Limited                                                            100.00%
Cyprus Mexico Corporation                                                                        100.00%
Cyprus Minera de Chile, Inc.                                                                     100.00%
Cyprus Minera de Panama, S.A.                                                                    100.00%
</TABLE>
<PAGE>   54
<TABLE>
<S>                                                                                    <C>
Cyprus Mines Corporation                                                                         100.00%
Cyprus Pima Mining Company                                                                        75.01%
Cyprus Pinos Altos Corporation                                                                   100.00%
Cyprus Speciality Metals Company                                                                 100.00%
Cyprus Tohono Corporation                                                                        100.00%
Cyprus Tonopah Mining Corporation                                                                100.00%
Cyprus Zinc Corporation                                                                          100.00%
Daguma Mining Co., Inc.                                                                          100.00%
Dodge & James Insurance Company, Ltd.                                                            100.00%
Dulugan Mining Co., Inc.                                                                         100.00%
Dumulag Mining Co., Inc.                                                                         100.00%
Electroconductores de Honduras, S.A. de C.V. (ECOHSA)                                             60.00%
Ferragudo Mining of Portugal, L.L.C.                                                              70.00%
Geomining L.L.C.                                                                                  51.00%
Grasshopper, L.L.C.                                                                               60.00%
Habirshaw Cable and Wire Corporation                                                             100.00%
Industria de Conductores Electricos, C.A. (ICONEL)                                               100.00%
Inversiones de Cobre Chile Co., S.A.                                                             100.00%
Iponan Mining Co., Inc.                                                                          100.00%
Isulan Mining Co., Inc.                                                                          100.00%
James Douglas Insurance Company, Ltd.                                                            100.00%
Kidapawan Mining Co., Inc.                                                                       100.00%
Kumakata Mining Co., Inc.                                                                        100.00%
Kyruso Mining Co., Inc.                                                                          100.00%
Lambunao Mining Co., Inc.                                                                        100.00%
Las Quintas Serenas Water Co.                                                                     59.00%
Lumintao Mining Co., Inc.                                                                        100.00%
Macote Mining Co., Inc.                                                                          100.00%
Makilala Mining Co., Inc.                                                                        100.00%
Malampay Mining Co., Inc.                                                                        100.00%
Malibato Mining Co., Inc.                                                                        100.00%
Mambalili Mining Co., Inc.                                                                       100.00%
Mambusao Mining Co., Inc.                                                                        100.00%
Metal Fabricators of Zambia Limited (ZAMEFA)                                                      51.00%
Metallic Ventures, Inc.                                                                          100.00%
Minera Aurex (Chile) Limitada                                                                     99.00%
Minera Cobre Chile Co., S.A.                                                                     100.00%
Minera Cobre Chile Limitada                                                                       99.00%
Minera Cuicuilco S.A. de C.V.                                                                    100.00%
Minera Cyprus Amax Chile Limitada                                                                100.00%
Minera Cyprus Antacori Corporation                                                               100.00%
Minera Cyprus Chile Limitada                                                                     100.00%
Minera La Mesa, S.A. de C.V.                                                                     100.00%
Minera Las Clauditas, S.A.                                                                        85.00%
Minera Las Trancas, S.A. de C.V.                                                                 100.00%
Minera Papago, S.A. de C.V.                                                                      100.00%
Minera Phelps Dodge del Peru S.A.                                                                100.00%
</TABLE>
<PAGE>   55
<TABLE>
<S>                                                                                    <C>
Minera Phelps Dodge Mexico, S de RL de CV                                                        100.00%
Mineracao Serra do Sossego S.A.                                                                   50.00%
Missouri Lead Smelting Company                                                                   100.00%
Mt. Emmons Mining Company                                                                        100.00%
Norala Mining Co., Inc.                                                                          100.00%
North-West Minerals (Zambia) Ltd.                                                                100.00%
Oclaves Limited                                                                                  100.00%
Pacific Western Land Company                                                                     100.00%
Palimbang Mining Co., Inc.                                                                       100.00%
PD Candelaria, Inc.                                                                              100.00%
PD Cobre del Mayo, Inc.                                                                          100.00%
PD Cobre, Inc.                                                                                   100.00%
PD Colombia S.A.                                                                                 100.00%
PD Explorations, Inc.                                                                            100.00%
PD Indonesia Corporation                                                                         100.00%
PD Las Bambas Corporation                                                                        100.00%
PD Ojos del Salado, Inc.                                                                         100.00%
PD Peru, Inc.                                                                                    100.00%
PD Rus, LLC                                                                                      100.00%
PD Russia, Inc.                                                                                   99.00%
PDEP Inc.                                                                                        100.00%
Phelps Dodge Africa Cable Corporation (PDACC)                                                    100.00%
Phelps Dodge Ajo, Inc.                                                                           100.00%
Phelps Dodge Australasia, Inc.                                                                   100.00%
Phelps Dodge Bagdad, Inc.                                                                        100.00%
Phelps Dodge Chicago Rod, Inc.                                                                   100.00%
Phelps Dodge Corporation of Canada, Limited                                                      100.00%
Phelps Dodge Development Corporation                                                             100.00%
Phelps Dodge do Brasil Mineracao Ltda                                                             99.99%
Phelps Dodge Dublin, Inc.                                                                        100.00%
Phelps Dodge Energy Services, LLC                                                                100.00%
Phelps Dodge Enfield Corporation                                                                 100.00%
Phelps Dodge Espanola Co.                                                                        100.00%
Phelps Dodge Exploracion Mexico, S.A. de C.V.                                                    100.00%
Phelps Dodge Exploration Corporation                                                             100.00%
Phelps Dodge Exploration East, Inc.                                                              100.00%
Phelps Dodge Exploration India Private Limited                                                   100.00%
Phelps Dodge Foundation                                                                              --
Phelps Dodge Hidalgo, Inc.                                                                       100.00%
Phelps Dodge High Performance Conductors Japan Co., Ltd.                                         100.00%
Phelps Dodge High Performance Conductors of NJ, Inc.                                             100.00%
Phelps Dodge High Performance Conductors of SC & GA, Inc.                                        100.00%
Phelps Dodge Holdings Mexico, S.A. de C.V.                                                       100.00%
Phelps Dodge International Corporation                                                           100.00%
Phelps Dodge Madagascar S.A.R.L.                                                                  99.00%
Phelps Dodge Magnet Wire (Austria) GmbH                                                          100.00%
Phelps Dodge Magnet Wire de Mexico, SA de CV                                                      99.00%
</TABLE>
<PAGE>   56
<TABLE>
<S>                                                                                    <C>
Phelps Dodge Mercantile Company                                                                  100.00%
Phelps Dodge Mining (Zambia) Limited                                                             100.00%
Phelps Dodge Mining Services, Inc.                                                               100.00%
Phelps Dodge Molybdenum Corporation                                                              100.00%
Phelps Dodge of Africa, Ltd.                                                                     100.00%
Phelps Dodge Overseas Capital Corporation                                                        100.00%
Phelps Dodge Overseas Marketing Corporation                                                      100.00%
Phelps Dodge Safford, Inc.                                                                       100.00%
Phelps Dodge Sales Company, Incorporated                                                         100.00%
Phelps Dodge Thailand Limited                                                                     75.47%
Phelps Dodge Tyrone, Inc.                                                                        100.00%
Phelps Dodge Wire & Cable Trading Company de Mexico, SA de CV                                     99.00%
Phelps Dodge Wire and Cable Holding de Mexico SA de CV                                            99.00%
Phelps Dodge Yantai China Holdings Inc.                                                           66.67%
Philippine Carbon Black Distribution Company, Inc.                                               100.00%
Pietersburg Iron Company (Proprietary) Limited                                                    50.00%
Pollac Mining Co., Inc.                                                                          100.00%
Proper Equipment Co.                                                                              80.00%
Pt Cyprus Amax Indonesia                                                                         100.00%
PT Kutaraja Tembaga Raya                                                                          55.00%
Representaciones de Industrias Venezolanas, C.A. (REDIVENCA)                                     100.00%
Rio Blanco Exploration, LLC                                                                       50.00%
Sabang Mining Co., Inc.                                                                          100.00%
Savanna Development Co., Ltd.                                                                    100.00%
Servicios Cyprus, S.A. de C.V.                                                                   100.00%
Servicios Phelps Dodge Mexico, S.A. de C.V.                                                      100.00%
Sevalco (Trustee) Ltd.                                                                           100.00%
Sevalco Limited                                                                                  100.00%
Silver Springs Ranch, Inc.                                                                       100.00%
Sociedad Contractual Minera El Abra                                                               51.00%
Sociedad Minera Cerro Verde S.A.                                                                  82.49%
Sofia Mineral Ltd.  (Somin) (partnership)                                                         50.00%
Soner, Inc.                                                                                      100.00%
T.I.E. (Trading Import Export)                                                                   100.00%
Tambali Mining Co., Inc.                                                                         100.00%
The Morenci Water & Electric Company                                                             100.00%
Tien Shen Minerals                                                                                50.00%
Tucson, Cornelia and Gila Bend Railroad Co.                                                      100.00%
United States Metals Refining Company                                                            100.00%
Warren Company                                                                                   100.00%
Western Nuclear Australia Limited                                                                100.00%
Western Nuclear, Inc.                                                                            100.00%
</TABLE>
<PAGE>   57
                   SCHEDULE III - ENVIRONMENTAL REPRESENTATION

                                      None
<PAGE>   58
                            SCHEDULE IV - LITIGATION

                  1. In re the General Adjudication of All Rights to Use Water
         in the Little Colorado River System and Source, No. 6417 (Superior
         Court of Arizona, Apache County) (water rights litigation).

                  2. In re the General Adjudication of All Rights to Use Water
         in the Gila River System and Source, Nos. W-1 (Salt River), W-2 (Verde
         River), W-3 (Gila River) and W-4 (San Pedro River) (Superior Court of
         Arizona, Maricopa County) (water rights litigation).

                  3. United States v. Gila Valley Irrigation District, et al.,
         and Globe Equity No. 59 (D. Ariz.) (water rights litigation).

                  4. Prior to January 1, 1983, various Indian tribes filed
         several suits in the U.S. District Court for the District of Arizona
         claiming prior and paramount rights to use waters which are presently
         being used by many water users, including Phelps Dodge Corporation, and
         claiming damages for prior use in derogation of their allegedly
         paramount rights. These federal proceedings have been stayed pending
         state court adjudication.

                  5. United States, et al. v. City of Tucson, et al., No. CIV
         75-39 (D. Ariz.) (water rights litigation).

                  6. In 1999, the Pinal Creek Group, comprising Cyprus Miami
         Mining Corporation (a wholly owned subsidiary of the Company) and other
         companies, continued remediation and assessment of groundwater quality
         in the shallow alluvial aquifers along Pinal Creek near Miami, Arizona.
         The removal, remediation and assessment work is being conducted in
         accordance with the requirements of the Arizona Department of
         Environmental Quality's Water Quality Assurance Revolving Fund program.
         In addition, the remedial and removal action is consistent with the
         National Contingency Plan prepared by the EPA as required by CERCLA.

         In November 1997, Cyprus Miami, as a member of the Pinal Creek Group,
joined with the State of Arizona in seeking approval of the District Court for
entry of a Consent Decree resolving all matters related to an enforcement action
contemplated by the State of Arizona with respect to the groundwater matter. On
August 13, 1998, the court approved the Decree that committed Cyprus Miami and
the other Pinal Creek Group members to complete the remediation work outlined in
the remedial action plan that was submitted to the State in May 1997.
Approximately $143 million remained in the Company's Pinal Creek remediation
reserve at December 31, 1999. Cyprus Miami has commenced contribution litigation
against other parties involved in this matter and has asserted claims against
certain of its past insurance carriers. While significant recoveries are
expected, the Company cannot reasonably estimate the amount and, therefore, has
not taken potential recoveries into consideration in the recorded reserve.

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