Document:

Execution Copy
                                                                  --------------

                              AMENDED AND RESTATED
                              --------------------
                    REVOLVING CREDIT AND TERM LOAN AGREEMENT
                    ----------------------------------------

                          Dated as of October 10, 2003

                                      among

                         IESI CORPORATION (the "Parent")
                and its Subsidiaries listed on Schedule 2 hereto
                        (collectively, the "Borrowers"),

                    THE LENDERS LISTED ON SCHEDULE 1 HERETO,

                  FLEET NATIONAL BANK, as Administrative Agent

                                       and

             LASALLE BANK NATIONAL ASSOCIATION, as Syndication Agent

                                      with

                       FLEET SECURITIES, INC., as Arranger

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

<S>                                                                                                  <C>
1.   DEFINITIONS AND RULES OF INTERPRETATION.........................................................1
     ---------------------------------------
         1.1.   Definitions..........................................................................1
                -----------
         1.2.   Rules of Interpretation..............................................................23
                -----------------------

2.   THE REVOLVING CREDIT FACILITY...................................................................24
     -----------------------------
         2.1.   Commitment to Lend...................................................................24
                ------------------
         2.2.   Increase in Total Revolving Credit Commitment........................................25
                ---------------------------------------------
         2.3.   Commitment Fee.......................................................................25
                --------------
         2.4.   Reduction of Total Revolving Credit Commitment.......................................26
                ----------------------------------------------
         2.5.   Evidence of Debt; Revolving Credit Notes.............................................26
                ----------------------------------------
         2.6.   Interest on Revolving Credit Loans...................................................27
                ----------------------------------
         2.7.   Requests for Revolving Credit Loans..................................................28
                -----------------------------------
         2.8.   Conversion Options...................................................................28
                ------------------
                  2.8.1.   Conversion to Different Type of Revolving Credit Loan.....................28
                           -----------------------------------------------------
                  2.8.2.   Continuation of Type of Revolving Credit Loan.............................28
                           ---------------------------------------------
                  2.8.3.   Eurodollar Rate Loans.....................................................29
                           ---------------------
         2.9.   Funds for Revolving Credit Loans.....................................................29
                --------------------------------
                  2.9.1.   Funding Procedures........................................................29
                           ------------------
                  2.9.2.   Advances by Administrative Agent..........................................29
                           --------------------------------
         2.10.   Swing Line Loans; Settlements.......................................................30
                 -----------------------------
         2.11.   Repayment of the Revolving Credit Loans.............................................32
                 ---------------------------------------
                  2.11.1.   Maturity.................................................................32
                            --------
                  2.11.2.   Mandatory Repayment of the Revolving Credit Loans........................33
                            -------------------------------------------------
                  2.11.3.   Optional Prepayment of the Revolving Credit Loans........................33
                            -------------------------------------------------

3.   THE TERM LOAN...................................................................................34
     -------------
         3.1.   Initial Funding......................................................................34
                ---------------
         3.2.   Increase in Term Loan Amount.........................................................34
                ----------------------------
         3.3.   Evidence of Debt; The Term Notes.....................................................34
                --------------------------------
         3.4.   Schedule of Installment Payments of Principal of Term Loan...........................35
                ----------------------------------------------------------
         3.5.   Optional Prepayment of Term Loan.....................................................36
                --------------------------------
         3.6.   Mandatory Prepayments of the Term Loan...............................................36
                --------------------------------------
                  3.6.1.   Asset Sales...............................................................36
                           -----------
                  3.6.2.   Debt Issuance.............................................................37
                           -------------
                  3.6.3.   Equity Issuance...........................................................37
                           ---------------
                  3.6.4.   Excess Operating Cash Flow................................................37
                           --------------------------
                  3.6.5.   Payment Provisions........................................................37
                           ------------------

<PAGE>

                                      -ii-

         3.7.   Interest on Term Loan................................................................38
                ---------------------
                  3.7.1.   Interest Rates............................................................38
                           --------------
                  3.7.2.   Notification by Borrowers.................................................38
                           -------------------------
                  3.7.3.   Amounts, etc..............................................................38
                           -------------

4.   LETTERS OF CREDIT...............................................................................39
     -----------------
         4.1.   Letter of Credit Commitments.........................................................39
                ----------------------------
                  4.1.1.   Commitment to Issue Letters of Credit.....................................39
                           -------------------------------------
                  4.1.2.   Letter of Credit Applications.............................................39
                           -----------------------------
                  4.1.3.   Terms of Letters of Credit................................................39
                           --------------------------
                  4.1.4.   Reimbursement Obligations of Revolving Credit Lenders.....................40
                           -----------------------------------------------------
                  4.1.5.   Participations of Revolving Credit Lenders................................40
                           ------------------------------------------
         4.2.   Reimbursement Obligation of the Borrowers............................................40
                -----------------------------------------
         4.3.   Letter of Credit Payments............................................................41
                -------------------------
         4.4.   Obligations Absolute.................................................................42
                --------------------
         4.5.   Reliance by Issuer...................................................................42
                ------------------
         4.6.   Letter of Credit Fee.................................................................43
                --------------------

5.   CERTAIN GENERAL PROVISIONS......................................................................43
     --------------------------
         5.1.   Fees.................................................................................43
                ----
         5.2.   Funds for Payments...................................................................43
                ------------------
                  5.2.1.   Payments to Administrative Agent..........................................43
                           --------------------------------
                  5.2.2.   No Offset, etc............................................................44
                           ---------------
                  5.2.3.   Non-U.S. Lenders..........................................................44
                           -----------------
         5.3.   Computations.........................................................................45
                ------------
         5.4.   Inability to Determine Eurodollar Rate...............................................45
                --------------------------------------
         5.5.   Illegality...........................................................................46
                ----------
         5.6.   Additional Costs, etc................................................................46
                ---------------------
         5.7.   Capital Adequacy.....................................................................47
                ----------------
         5.8.   Certificate..........................................................................48
                -----------
         5.9.   Indemnity............................................................................48
                ---------
         5.10.   Default Interest....................................................................48
                 ----------------
         5.11.   Concerning Joint and Several Liability of the Borrowers.............................49
                 -------------------------------------------------------
       ss.5.12.  Interest Limitation.................................................................52
                 -------- ----------

6.   COLLATERAL SECURITY.............................................................................52
     -------------------

7.   REPRESENTATIONS AND WARRANTIES..................................................................52
     ------------------------------
         7.1.   Corporate Authority..................................................................52
                -------------------
                  7.1.1.   Incorporation; Good Standing..............................................53
                           ----------------------------
                  7.1.2.   Authorization.............................................................53
                           -------------
                  7.1.3.   Enforceability............................................................53
                           --------------
         7.2.   Governmental Approvals...............................................................53
                ----------------------
         7.3.   Title to Properties; Leases..........................................................53
                ---------------------------
         7.4.   Financial Statements and Projections.................................................53
                ------------------------------------

<PAGE>

                                     -iii-

                  7.4.1.   Fiscal Year...............................................................54
                           -----------
                  7.4.2.   Financial Statements......................................................54
                           --------------------
                  7.4.3.   Solvency..................................................................54
                           --------
         7.5.   No Material Adverse Changes, etc.....................................................54
                --------------------------------
         7.6.   Franchises, Patents, Copyrights, etc.................................................54
                ------------------------------------
         7.7.   Litigation...........................................................................54
                ----------
         7.8.   No Materially Adverse Contracts, etc.................................................54
                ------------------------------------
         7.9.   Compliance with Other Instruments, Laws, etc.........................................55
                --------------------------------------------
         7.10.   Tax Status..........................................................................55
                 ----------
         7.11.   No Event of Default.................................................................55
                 -------------------
         7.12.   Holding Company and Investment Company Acts.........................................55
                 -------------------------------------------
         7.13.   Absence of Financing Statements, etc................................................55
                 ------------------------------------
         7.14.   Perfection of Security Interest.....................................................55
                 -------------------------------
         7.15.   Certain Transactions................................................................56
                 --------------------
         7.16.   Employee Benefit Plans..............................................................56
                 ----------------------
                  7.16.1.   In General...............................................................56
                            ----------
                  7.16.2.   Terminability of Welfare Plans...........................................56
                            ------------------------------
                  7.16.3.   Guaranteed Pension Plans.................................................56
                            ------------------------
                  7.16.4.   Multiemployer Plans......................................................57
                            -------------------
         7.17.   Use of Proceeds.....................................................................57
                 ---------------
                  7.17.1.   General..................................................................57
                            -------
                  7.17.2.   Regulations U and X......................................................57
                            -------------------
                  7.17.3.   Ineligible Securities....................................................57
                            ---------------------
         7.18.   Environmental Compliance............................................................58
                 ------------------------
         7.19.   Subsidiaries, etc...................................................................59
                 -----------------
         7.20.   Disclosure..........................................................................59
                 ----------
         7.21.   Capitalization......................................................................59
                 --------------
         7.22.   Foreign Assets Control Regulations, Etc.............................................60
                 ----------------------------------------
         7.23.   Obligations Constitute "Senior Indebtedness"........................................60
                 ---------------------------------------------
         7.24.   Guarantees of De Minimis Subsidiaries...............................................60
                 --------------------------------------

8.   AFFIRMATIVE COVENANTS...........................................................................61
     ---------------------
         8.1.   Punctual Payment.....................................................................61
                ----------------
         8.2.   Maintenance of Office................................................................61
                ---------------------
         8.3.   Records and Accounts.................................................................61
                --------------------
         8.4.   Financial Statements, Certificates and Information...................................61
                --------------------------------------------------
         8.5.   Notices..............................................................................63
                -------
                  8.5.1.   Defaults..................................................................63
                           --------
                  8.5.2.   Environmental Events......................................................63
                           --------------------
                  8.5.3.   Notification of Claim against Collateral..................................64
                           ----------------------------------------
                  8.5.4.   Notice of Litigation and Judgments........................................64
                           ----------------------------------
                  8.5.5 .  Notices Concerning Tax Treatment..........................................64
                           --------------------------------
         8.6.   Legal Existence; Maintenance of Properties...........................................64
                ------------------------------------------
         8.7.   Insurance............................................................................65
                ---------

<PAGE>

                                      -iv-

         8.8.   Taxes................................................................................65
                -----
         8.9.   Inspection of Properties and Books, etc..............................................65
                ---------------------------------------
                  8.9.1.   General...................................................................65
                           -------
                  8.9.2.   Communications with Accountants...........................................65
                           -------------------------------
         8.10.   Compliance with Laws, Contracts, Licenses, and Permits..............................66
                 ------------------------------------------------------
         8.11.   Employee Benefit Plans..............................................................66
                 ----------------------
         8.12.   Use of Proceeds.....................................................................66
                 ---------------
         8.13.   Interest Rate Protection............................................................66
                 ------------------------
         8.14.   New Borrowers.......................................................................67
                 -------------
         8.15.   Subsidiaries........................................................................67
                 ------------
         8.16.   Closure and Post Closure Liabilities................................................67
                 ------------------------------------
         8.17.   Further Assurances..................................................................67
                 ------------------
         8.18.   Environmental Indemnification.......................................................67
                 -----------------------------
         8.19.   Seneca Meadows Financials...........................................................68
                 -------------------------

9.   CERTAIN NEGATIVE COVENANTS......................................................................68
     --------------------------
         9.1.   Restrictions on Indebtedness.  ......................................................68
                ----------------------------
         9.2.   Restrictions on Liens................................................................69
                ---------------------
         9.3.   Restrictions on Investments..........................................................71
                ---------------------------
         9.4.   Restricted Payments; Amendments to Documents.........................................72
                --------------------------------------------
         9.5.   Merger, Consolidation and Disposition of Assets......................................73
                -----------------------------------------------
                  9.5.1.   Mergers and Acquisitions..................................................73
                           ------------------------
                  9.5.2.   Disposition of Assets.....................................................74
                           ---------------------
         9.6.   Sale and Leaseback...................................................................74
                ------------------
         9.7.   Subordinated Debt....................................................................74
                -----------------
         9.8.   Employee Benefit Plans...............................................................75
                ----------------------
         9.9.   Business Activities..................................................................76
                -------------------
         9.10.   Fiscal Year.........................................................................76
                 -----------
         9.11.   Transactions with Affiliates........................................................76
                 ----------------------------
         9.12.   New Franchise Agreements............................................................76
                 ------------------------

10.   FINANCIAL COVENANTS............................................................................76
      -------------------
         10.1.   Leverage Ratio......................................................................76
                 --------------
         10.2.   Senior Leverage Ratio...............................................................76
                 ---------------------
         10.3.   Interest Coverage...................................................................76
                 -----------------
         10.4.   Consolidated Net Worth..............................................................77
                 ----------------------
         10.5.   Capital Expenditures................................................................77
                 --------------------

11.   CLOSING CONDITIONS.............................................................................77
      ------------------
         11.1.   Loan Documents......................................................................77
                 --------------
         11.2.   Certified Copies of Governing Documents.............................................77
                 ---------------------------------------
         11.3.   Corporate or Other Action...........................................................77
                 -------------------------
         11.4.   Incumbency Certificate..............................................................78
                 ----------------------
         11.5.   Validity of Liens...................................................................78
                 -----------------
         11.6.   Perfection Certificates and UCC Search Results......................................78
                 ----------------------------------------------

<PAGE>

                                      -v-

         11.7.   Certificates of Insurance...........................................................78
                 -------------------------
         11.8.   Leverage Ratio and Senior Leverage Ratio............................................78
                 ----------------------------------------
         11.9.   Receipt of the Preferred Stock Proceeds.............................................78
                 ---------------------------------------
         11.10.   Subordinated Debt..................................................................79
                  -----------------
         11.11.   Financial Statements and Projections...............................................79
                  ------------------------------------
         11.12.   Projections.  .....................................................................79
                  -----------
         11.13.   Opinions of Counsel................................................................79
                  -------------------
         11.14.   Environmental Permit Certificate...................................................80
                  --------------------------------
         11.15.   Seneca Meadows Acquisition.........................................................80
                  --------------------------
         11.16.   Environmental Assessment of Seneca Meadows Landfill................................80
                  ---------------------------------------------------
         11.17.   Payment of Fees....................................................................80
                  ---------------
         11.18.   Payoff.............................................................................80
                  ------
         11.19.   Patriot Act........................................................................80
                  -----------

12.   CONDITIONS TO ALL BORROWINGS...................................................................80
      ----------------------------
         12.1.   Representations True; No Event of Default...........................................80
                 -----------------------------------------
         12.2.   No Legal Impediment.................................................................81
                 -------------------
         12.3.   Proceedings and Documents...........................................................81
                 -------------------------
         12.4.   Subordinated Debt Compliance Certificate............................................81
                 ----------------------------------------

13.   EVENTS OF DEFAULT; ACCELERATION; ETC...........................................................81
      ------------------------------------
         13.1.   Events of Default and Acceleration..................................................81
                 ----------------------------------
         13.2.   Termination of Commitments..........................................................84
                 --------------------------
         13.3.   Remedies............................................................................85
                 --------
         13.4.   Distribution of Collateral Proceeds.................................................85
                 -----------------------------------

14.   THE AGENTS.....................................................................................86
      ----------
         14.1.   Authorization.......................................................................86
                 -------------
         14.2.   Employees and Administrative Agent..................................................87
                 ----------------------------------
         14.3.   No Liability........................................................................87
                 ------------
         14.4.   No Representations..................................................................87
                 ------------------
                  14.4.1.   General..................................................................87
                            -------
                  14.4.2.   Closing Documentation, etc...............................................87
                            --------------------------
         14.5.   Payments............................................................................88
                 --------
                  14.5.1.   Payments to Administrative Agent.........................................88
                            --------------------------------
                  14.5.2.   Distribution by Administrative Agent.....................................88
                            ------------------------------------
                  14.5.3.   Delinquent Lenders.......................................................88
                            ------------------
         14.6.   Holders of Notes....................................................................89
                 ----------------
         14.7.   Indemnity...........................................................................89
                 ---------
         14.8.   Administrative Agent as Lender......................................................89
                 ------------------------------
         14.9.   Resignation.........................................................................89
                 -----------
         14.10.   Notification of Defaults and Events of Default.....................................90
                  ----------------------------------------------
         14.11.   Duties in the Case of Enforcement..................................................90
                  ---------------------------------
         14.12.   Administrative Agent May File Proofs of Claim......................................90
                  ---------------------------------------------

<PAGE>

                                      -vi-

         14.13.   Duties of Syndication Agent........................................................91
                  ---------------------------

15.   ASSIGNMENT AND PARTICIPATION...................................................................91
      ----------------------------
         15.1.   General Conditions..................................................................91
                 ------------------
         15.2 .  Assignments.........................................................................92
                 -----------
         15.3.   Register............................................................................93
                 --------
         15.4.   Participations......................................................................93
                 --------------
         15.5.   Payments to Participants............................................................93
                 ------------------------
         15.6.   Miscellaneous Assignment Provisions.................................................94
                 -----------------------------------
         15.7.   Assignee or Participant Affiliated with the Borrowers...............................94
                 -----------------------------------------------------
         15.8.   Special Purpose Funding Vehicle.....................................................94
                 -------------------------------

16.   PROVISIONS OF GENERAL APPLICATIONS.............................................................95
      ----------------------------------
         16.1.   Setoff..............................................................................95
                 ------
         16.2.   Expenses............................................................................96
                 --------
         16.3.   Indemnification.....................................................................97
                 ---------------
         16.4.   Treatment of Certain Confidential Information.......................................97
                 ---------------------------------------------
                  16.4.1.   Confidentiality..........................................................97
                            ---------------
                  16.4.2.   Prior Notification.......................................................98
                            ------------------
                  16.4.3.   Other....................................................................99
                            -----
         16.5.   Survival of Covenants, Etc..........................................................99
                 --------------------------
         16.6.   Notices.............................................................................99
                 -------
         16.7.     Governing Law.....................................................................100
                   -------------
         16.8.   Headings............................................................................101
                 --------
         16.9.   Counterparts........................................................................101
                 ------------
         16.10.   Entire Agreement, Etc..............................................................101
                  ---------------------
         16.11.   Waiver of Jury Trial...............................................................101
                  --------------------
         16.12.   Consents, Amendments, Waivers, Etc.................................................101
                  ----------------------------------
         16.13.   Borrowers' Representative..........................................................103
                  -------------------------
         16.14.   Severability.......................................................................103
                  ------------

17.   PARI PASSU TREATMENT...........................................................................103
      --------------------

18.   PRIOR CREDIT AGREEMENT.........................................................................104
      ----------------------

</TABLE>

<PAGE>

                                     -vii-

                                    Exhibits
                                    --------

Exhibit A                  Form of Loan Request
------- -
Exhibit B                  Form of Swingline Note
------- -
Exhibit C                  Form of Compliance Certificate
------- -
Exhibit D                  Form of Joinder Agreement
------- -
Exhibit E                  Form of Environmental Permit Certificate
------- -
Exhibit F                  Form of Assignment and Acceptance
------- -
Exhibit G                  Form(s) of Subordinated Debt
------- -
Exhibit H                  Form of Subordinated Debt Compliance Certificate
------- -

                                    Schedules
                                    ---------

Schedule 1                 Lenders and Commitments
-------- -
Schedule 2                 Subsidiaries of the Parent
-------- -
Schedule 4.1.1             Existing Letters of Credit
-------- -----
Schedule 7.3               Title to Properties; Leases
-------- ---
Schedule 7.7               Litigation
-------- ---
Schedule 7.15              Certain Transactions
-------- ----
Schedule 7.18              Environmental Compliance
-------- ----
Schedule 7.21              Capitalization
-------- ----
Schedule 8.7               Insurance
-------- ---
Schedule 9.1               Existing Indebtedness
-------- ---
Schedule 9.2               Existing Liens
-------- ---
Schedule 9.3               Existing Investments
-------- ---
Schedule 9.11              Transactions With Affiliates
-------- ---

<PAGE>

                              AMENDED AND RESTATED
                              --------------------
                    REVOLVING CREDIT AND TERM LOAN AGREEMENT
                    ----------------------------------------

         This AMENDED AND RESTATED  REVOLVING  CREDIT AND TERM LOAN AGREEMENT is
made as of  October  10,  2003,  by and among (a) IESI  CORPORATION,  a Delaware
corporation  (the "Parent"),  and the subsidiaries of the Parent (other than the
De Minimis  Subsidiaries)  identified on Schedule 2 hereto (the  "Subsidiaries,"
and collectively with the Parent,  the  "Borrowers"),  (b) the lenders listed on
Schedule  1 hereto  (collectively,  the  "Lenders"),  (c)  FLEET  NATIONAL  BANK
("Fleet"),  as  administrative  agent for itself and the other  Lenders (in such
capacity, the "Administrative  Agent") and (d) LASALLE BANK NATIONAL ASSOCIATION
as syndication agent (in such capacity, the "Syndication Agent").

         WHEREAS,  pursuant to a Fourth  Amended and Restated  Revolving  Credit
Agreement, dated as of September 14, 2001 (as amended and in effect from time to
time, the "Prior Credit Agreement"),  by and among the Borrowers,  Fleet and the
other lenders identified on Schedule 1 thereto as Banks (the "Prior Banks"), and
Fleet as the  Administrative  Agent  thereunder,  the Prior Banks made revolving
credit  loans  and other  extensions  of credit  to the  Borrowers  for  general
corporate and working capital purposes, capital expenditures and to fund certain
acquisitions permitted thereunder; and

         WHEREAS, the Borrowers have requested, among other things, to amend and
restate the Prior Credit  Agreement on the terms and conditions set forth herein
and the  Lenders and the  Administrative  Agent are willing to amend and restate
the Prior Credit Agreement on the terms and conditions set forth herein;

         NOW THEREFORE,  the Borrowers, the Lenders and the Administrative Agent
agree that, as of the Closing Date, the Prior Credit Agreement is hereby amended
and restated in its entirety as set forth herein:

                   1. DEFINITIONS AND RULES OF INTERPRETATION.
                      ----------------------------------------

         1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:

         Accountants.  Ernst & Young,  LLP or such other  independent  certified
public accountants satisfactory to the Administrative Agent.

         Acknowledgement and Consent.  The Acknowledgment and Consent,  dated as
of September  14, 2001 and as the same may be amended and in effect from time to
time, by and among certain  Borrowers and the  Administrative  Agent and in form
and substance satisfactory to the Administrative Agent.

<PAGE>

                                      -2-

         Adjustment Date. The first Business Day immediately  following the date
on which a Compliance  Certificate is to be delivered by the Borrowers  pursuant
to ss.8.4(d).

         Administrative  Agent.  Fleet National Bank,  acting as  administrative
agent  for the  Lenders,  and  each  other  Person  appointed  as the  successor
Administrative Agent in accordance with ss.14.9.

         Administrative  Agent  Fee.  The fee  payable by the  Borrowers  to the
Administrative  Agent in consideration of its acting as Administrative Agent for
the Lenders, on terms agreed to by the Borrowers and the Administrative Agent.

         Administrative   Agent's  Office.  The  Administrative  Agent's  office
located at 100 Federal  Street,  Boston,  Massachusetts  02110, or at such other
location as the Administrative Agent may designate from time to time.

         Administrative  Agent's Special Counsel.  Bingham McCutchen LLP or such
other counsel as may be approved by the Administrative Agent.

         Administrative Questionnaire. An Administrative Questionnaire in a form
supplied by the Administrative Agent.

         Affiliate.  Any Person that would be  considered  to be an affiliate of
the Borrowers or any Lender,  as the case may be, under Rule 144(a) of the Rules
and Regulations of the Securities and Exchange  Commission,  as in effect on the
date hereof,  if the Borrowers or such Lender,  as the case may be, were issuing
securities.

         Applicable  Commitment  Fee  Rate.  As set  forth  in the  table in the
definition of "Applicable Margin" under the heading  "Applicable  Commitment Fee
Rate".

         Applicable  Margin.  For each period  commencing on an Adjustment  Date
through the date  immediately  preceding the next  Adjustment Date (each a "Rate
Adjustment  Period"),  the Applicable  Margin shall be the applicable margin set
forth below with respect to the Leverage  Ratio, as determined for the Reference
Period of the Borrowers ending on the fiscal quarter ended  immediately prior to
the applicable Rate Adjustment Period:

<PAGE>

                                      -3-

<TABLE>
<CAPTION>

------------ ---------------- ------------------------------ -------------------------------- ---------------------
                                 REVOLVING CREDIT LOANS                 TERM LOAN
------------ ---------------- ----------- ------------------ ------------- ------------------ ---------------------
                                           EURODOLLAR RATE                  EURODOLLAR RATE        APPLICABLE
   LEVEL     LEVERAGE RATIO   BASE RATE         LOANS         BASE RATE          LOANS        COMMITMENT FEE RATE
                                LOANS                           LOANS
------------ ---------------- ----------- ------------------ ------------- ------------------ ---------------------
<S>             <C>             <C>             <C>             <C>              <C>                 <C>
     I          => 4.00:1       1.25%           3.25%           1.00%            3.00%               0.500%
------------ ---------------- ----------- ------------------ ------------- ------------------ ---------------------
    II        => 3.50:1 and     1.00%           3.00%           1.00%            3.00%               0.500%
                < 4.00:1
------------ ---------------- ----------- ------------------ ------------- ------------------ ---------------------
    III       => 3.00:1 and     0.75%           2.75%           1.00%            3.00%               0.500%
                < 3.50:1
------------ ---------------- ----------- ------------------ ------------- ------------------ ---------------------
    IV        => 2.50:1 and     0.50%           2.50%           1.00%            3.00%               0.500%
                < 3.00:1
------------ ---------------- ----------- ------------------ ------------- ------------------ ---------------------
     V          < 2.50:1        0.25%           2.25%           1.00%            3.00%               0.375%
------------ ---------------- ----------- ------------------ ------------- ------------------ ---------------------

</TABLE>

         Notwithstanding  the  foregoing,  (i) for the  Loans  outstanding,  the
Letter  of  Credit  Fees  and the  Commitment  Fee  payable  during  the  period
commencing  on  the  Closing  Date  through  the  delivery  of  the   Compliance
Certificate  for the second full fiscal quarter  following the Closing Date, the
Applicable  Margin  shall be the  Applicable  Margin set forth in Level I in the
table  above,  and  (ii)  if  the  Borrowers  fail  to  deliver  any  Compliance
Certificate  pursuant to ss.8.4(d) hereof then, for the period commencing on the
next  Adjustment  Date to occur  subsequent  to such  failure  through  the date
immediately  following  the  date  on  which  such  Compliance   Certificate  is
delivered,  the  Applicable  Margin shall be the highest  Applicable  Margin set
forth in the table above.

         Applicable Pension Legislation.  At any time, any pension or retirement
benefits  legislation  (be it  national,  federal,  provincial,  territorial  or
otherwise) then applicable to the Borrowers.

         Approved  Fund.  Any Fund  that is  administered  or  managed  by (a) a
Lender,  (b) an  Affiliate  of a Lender or (c) an entity or an  Affiliate  of an
entity that administers or manages a Lender.

         Arranger. Fleet Securities, Inc.

         Assignment and Acceptance. An assignment and acceptance entered into by
a Lender and an Eligible  Assignee  (with the consent of any party whose consent
is  required  by  ss.15.2),   and  accepted  by  the  Administrative  Agent,  in
substantially  the  form  of  Exhibit  F or  any  other  form  approved  by  the
Administrative Agent.

         Balance Sheet Date.  December 31, 2002.
         ------------------

         Base Rate.  The higher of (a) the  variable  annual rate of interest so
designated  from time to time by Fleet as its  "prime  rate",  such rate being a
reference rate and not  necessarily  representing  the lowest or best rate being

<PAGE>

                                      -4-

charged to any  customer,  and (b)  one-half  of one  percent  (0.5%)  above the
Federal Funds  Effective  Rate.  For the purposes of this  definition,  "Federal
Funds  Effective  Rate" shall mean for any day,  the 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 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  Administrative
Agent  from  three  funds  brokers  of  recognized   standing  selected  by  the
Administrative  Agent.  Changes in the Base Rate  resulting  from any changes in
Fleet's  "prime rate" shall take place  immediately  without notice or demand of
any kind.

         Base Rate Loans.  Revolving  Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Base Rate.

         Benefit Amount.  Seess.5.11(f).

         Bethlehem  Adjustment Amount. For each fiscal quarter referenced in the
table below, the amount set forth opposite such fiscal quarter in such table:

<TABLE>
<CAPTION>

        ---------------------------------------------- ---------------------------------------------

                    Fiscal Quarter Ending                                 Amount
        ---------------------------------------------- ---------------------------------------------

                           <S>                                          <C>
                           9/30/03                                      $2,400,000
        ---------------------------------------------- ---------------------------------------------

                          12/31/03                                      $1,200,000
        ---------------------------------------------- ---------------------------------------------

</TABLE>

         Borrowers. As defined in the preamble.

         Business  Day.  Any  day  on  which  banking  institutions  in  Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.

         Capital Assets.  Fixed assets, both tangible (such as land,  buildings,
fixtures,  machinery and equipment) and intangible (such as patents, copyrights,
trademarks,  franchises  and good will);  provided that Capital Assets shall not
include (a) any item customarily charged directly to expense or depreciated over
a useful life of twelve (12) months or less in  accordance  with GAAP or (b) any
item obtained through an acquisition permitted by ss.9.5.1.

         Capital  Expenditures.  Amounts  paid or  Indebtedness  incurred by any
Person in  connection  with (a) the  purchase or lease by such Person of Capital
Assets that would be required to be  capitalized  and shown on the balance sheet
of such  Person in  accordance  with GAAP or (b) the lease of any assets by such
Person as lessee under any Synthetic  Lease to the extent that such assets would
have been Capital  Assets had the  Synthetic  Lease been treated for  accounting
purposes as a Capitalized Lease, but excluding capital expenditures  required to

<PAGE>

                                      -5-

service any Franchise  Agreement  which are incurred within a sliding four month
period prior to or after commencement of service for such Franchise Agreement.

         Capital Stock. Any and all shares,  interests,  participations 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, rights or options to purchase any of the foregoing.

         Capitalized  Leases.  Leases  under which any Borrower is the lessee or
obligor,  the  discounted  future  rental  payment  obligations  under which are
required  to be  capitalized  on the  balance  sheet of the lessee or obligor in
accordance with GAAP.

         CERCLA.  See ss.7.18(a).

         CFO.  Chief Financial Officer.

         Change of Control.  An event or series of events by which any Person or
group of Persons  (within  the  meaning  of  Section 13 or 14 of the  Securities
Exchange  Act of 1934)  shall have  acquired  beneficial  ownership  (within the
meaning of Rule 13d-3  promulgated  by the  Securities  and Exchange  Commission
under said Act), directly or indirectly,  of twenty percent (20%) or more of the
outstanding  shares of Capital  Stock of the  Parent;  or,  during any period of
twelve (12) consecutive  calendar months,  individuals who were directors of the
Parent on the first day of such period  shall cease to  constitute a majority of
the board of  directors  of the  Parent  or, the  occurrence  of any  'Change of
Control' under and as defined in the 2002 Subordinated Note Indenture.

         Closing Date. The first date on which the conditions set forth in ss.11
have been satisfied and any Revolving Credit Loans and the initial Term Loan are
to be made or any Letter of Credit is to be issued hereunder.

         Code.  The Internal Revenue Code of 1986.

         Collateral.  All of the property, rights and interests of the Borrowers
that are or are  intended  to be  subject to the Liens  created by the  Security
Documents.

         Commitment Fee.  Seess.2.3.

         Compliance Certificate.  Seess.8.4(d).

         Consolidated  or  consolidated.  With  reference  to any  term  defined
herein,  shall  mean that term as  applied  to the  accounts  of the  Borrowers,
consolidated in accordance with GAAP.

         Consolidated  Adjusted  Net Income (or  Deficit).  For any period,  the
Consolidated  Net Income (or Deficit) of the Borrowers  determined in accordance
with GAAP, plus to the extent deducted and without  duplication,  (a) impairment

<PAGE>

                                      -6-

charges for the closing of the Borrowers' asbestos transfer station in an amount
not to exceed $5,000,000, (b) FAS 143 historic,  non-cash accounting adjustments
in an amount  not to exceed  $2,000,000,  (c) the  Bethlehem  Adjustment  Amount
applicable for such fiscal quarter, and (d) the Seneca Meadows Adjustment Amount
applicable for such fiscal quarter.

         Consolidated   Earnings  Before  Interest,   Taxes,   Depreciation  and
Amortization  or EBITDA.  For any Reference  Period (without  duplication),  the
Consolidated  Adjusted Net Income of the Borrowers plus (a) interest expense for
such  period,  plus (b)  income  taxes for such  period,  plus (c)  depreciation
expense and  amortization  expense for such period,  to the extent that each was
deducted  in  determining   Consolidated   Adjusted  Net  Income  (or  Deficit),
determined in accordance with GAAP. For all purposes other than  calculating the
covenant set forth in ss.10.3,  the Borrowers may include in EBITDA (i) with the
consent of the  Administrative  Agent, the pro forma projected EBITDA from a new
contract with a municipality for exclusive waste management services which first
became  effective  within the twelve (12) month period prior to the date of such
calculation,  such  projections to include the period beginning on the day after
the date of such  calculation and ending on the date which is one year following
the date on which such contract  first became  effective on terms and conditions
satisfactory  to the  Administrative  Agent  and (ii) the  EBITDA  for the prior
twelve (12) months of companies  acquired by the Borrowers during the respective
reporting period (without  duplication with respect to the adjustments set forth
above) only if (A) the financial statements of such acquired Borrowers have been
audited for the period sought to be included by an independent  accounting  firm
satisfactory  to the  Administrative  Agent,  or (B)  the  Administrative  Agent
consents to such inclusion after being furnished with other acceptable financial
statements.   Such  acquired   EBITDA  may  be  further   adjusted  to  add-back
non-recurring  private company expenses which are discontinued  upon acquisition
(such  as  owner's  compensation),  as  approved  by the  Administrative  Agent.
Simultaneously with the delivery of the financial  statements referred to in (A)
and (B) above, the CFO of the Parent shall deliver to the Administrative Agent a
Compliance Certificate and appropriate  documentation  certifying the historical
operating results, adjustments and balance sheet of the acquired company.

         Consolidated  Net Income (or Deficit).  The consolidated net income (or
deficit) of the Borrowers,  after  deduction of all expenses,  taxes,  and other
proper charges, determined in accordance with GAAP.

         Consolidated  Net Worth.  The excess of Consolidated  Total Assets over
Consolidated Total Liabilities,  less, to the extent otherwise includable in the
computations of Consolidated Net Worth, any subscriptions receivable.

         Consolidated  Senior Funded Debt. As at any date of  determination,  an
amount equal to Consolidated Total Funded Debt minus Subordinated Debt.

<PAGE>

                                      -7-

         Consolidated Total Assets. The sum of all assets ("consolidated balance
sheet assets") of the Borrowers determined on a consolidated basis in accordance
with GAAP.

         Consolidated Total Funded Debt. With respect to the Borrowers, the sum,
without  duplication,  of  (a)  the  aggregate  amount  of  Indebtedness  of the
Borrowers on a consolidated basis, relating to (i) the borrowing of money or the
obtaining of credit,  including  the  issuance of notes,  bonds,  debentures  or
similar  debt  instruments,  (ii)  in  respect  of any  Capitalized  Leases  and
Synthetic  Leases,  (iii) the deferred  purchase  price of assets and  companies
(typically  known as holdbacks)  other than short-term  trade credit incurred in
the ordinary course of business,  and (iv) any unpaid  reimbursement  obligation
under letters of credit  outstanding,  but excluding any  contingent  obligation
with respect to letters of credit outstanding; plus (b) Indebtedness of the type
referred to in clause (a) of another Person guaranteed by the Borrowers.

         Consolidated  Total  Interest  Expense.  For any period,  the aggregate
amount of interest  required to be paid or accrued by the Borrowers  during such
period on all Indebtedness of the Borrowers  outstanding  during all or any part
of such period,  whether such  interest was or is required to be reflected as an
item of expense or  capitalized,  including  payments  consisting of interest in
respect  of  any  Capitalized  Lease  or  any  Synthetic  Lease,  and  including
commitment fees, agency fees, facility fees, balance deficiency fees and similar
fees or expenses in connection with the borrowing of money but excluding (a) the
non-cash amortization of debt issuance costs, (b) Series C Convertible Preferred
Stock non-cash  dividends that are classified as interest under GAAP, (c) Series
D Convertible Preferred Stock non-cash dividends that are classified as interest
under GAAP and (d) Series E Convertible  Preferred Stock non-cash dividends that
are classified as interest under GAAP.

         Consolidated  Total  Liabilities.  All  liabilities  of  the  Borrowers
determined on a  consolidated  basis in accordance  with GAAP and  classified as
such on the consolidated balance sheet of the Borrowers.

         Consulting Engineer. An environmental consulting firm acceptable to the
Administrative Agent.

         Conversion   Request.   A  notice   given  by  the   Borrowers  to  the
Administrative Agent of the Borrowers' election to convert or continue a Loan in
accordance withss.2.8.

         Credit Agreement.  This Amended and Restated  Revolving Credit and Term
Loan Agreement,  including the Schedules and Exhibits hereto, as the same may be
amended, supplemented and otherwise modified and in effect from time to time.

         Default.  See ss.13.1.

         Delinquent Lender.  Seess.14.5.3.

<PAGE>

                                      -8-

         De Minimis Subsidiaries.  Any Subsidiary whose assets,  liabilities and
annual gross revenues do not, in each case, exceed $1,000,000; provided that the
aggregate assets, liabilities and annual gross revenues of all such Subsidiaries
taken as a whole shall not exceed $2,000,000.

         Disposal (or Disposed).  See definition of "Release".

         Distribution.  (a) The  declaration or payment of any dividend on or in
respect of any shares of any class of Capital Stock of any Borrower,  other than
dividends  payable  solely in shares of common stock of such  Borrower;  (b) the
purchase, redemption,  defeasance, retirement or other acquisition of any shares
of any class of Capital Stock of any Borrower,  directly or indirectly through a
Subsidiary of such Borrower or otherwise  (including the setting apart of assets
for a sinking  or other  analogous  fund to be used for such  purpose);  (c) the
return of capital by any  Borrower  to its  shareholders  as such;  or any other
distribution on or in respect of any shares of any class of Capital Stock of any
Borrower.

         Dollars  or $.  Dollars  in lawful  currency  of the  United  States of
America.

         Domestic  Lending  Office.   Initially,   the  office  of  each  Lender
designated as such in Schedule 1 hereto;  thereafter,  such other office of such
Lender,  if any,  located  within  the  United  States  that  will be  making or
maintaining Base Rate Loans.

         Drawdown Date. The date on which any Revolving  Credit Loan or any Term
Loan is made or is to be made,  and the date on which any Revolving  Credit Loan
is converted or continued in accordance with ss.2.8 or all or any portion of the
Term Loan is converted or continued in accordance with ss.3.7.2.

         EBITDA.  See  definition of  "Consolidated  Earnings  Before  Interest,
Taxes, Depreciation and Amortization".

         Eligible  Assignee.  Any of (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved  Fund and (d) any other  Person  (other  than a natural  person)
approved by (i) the  Administrative  Agent and (ii) unless a Default or an Event
of Default has occurred and is continuing, the Borrowers (each such approval not
to be unreasonably withheld or delayed).

         Employee  Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA  maintained  or  contributed  to by any  Borrower  or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

         Environmental Laws.  Seess.7.18(a).

         EPA.  See ss.7.18(b).

         ERISA. The Employee  Retirement Income Security Act of 1974, as amended
and in effect from time to time.

<PAGE>

                                      -9-

         ERISA Affiliate.  Any Person which is treated as a single employer with
the Borrowers under ss.414 of the Code.

         ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension  Plan  within  the  meaning  of  ss.4043  of ERISA  and the  regulations
promulgated thereunder.

         Eurocurrency  Reserve  Rate.  For any day with  respect to a Eurodollar
Rate Loan,  the maximum rate  (expressed as a decimal) at which any bank subject
thereto would be required to maintain  reserves under  Regulation D of the Board
of  Governors  of the  Federal  Reserve  System  (or any  successor  or  similar
regulations  relating  to  such  reserve   requirements)  against  "Eurocurrency
Liabilities"  (as that term is used in Regulation D), if such  liabilities  were
outstanding.  The Eurocurrency  Reserve Rate shall be adjusted  automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.

         Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.

         Eurodollar  Lending  Office.  Initially,  the  office  of  each  Lender
designated as such in Schedule 1 hereto;  thereafter,  such other office of such
Lender, if any, that shall be making or maintaining Eurodollar Rate Loans.

         Eurodollar  Rate. For any Interest  Period with respect to a Eurodollar
Rate  Loan,  the  rate of  interest  equal to (a) the  rate  per  annum  for the
Administrative  Agent  (rounded  upwards to the nearest  1/16 of one percent) at
which the  Administrative  Agent's  Eurodollar  Lending Office is offered Dollar
deposits  two (2)  Eurodollar  Business  Days  prior  to the  beginning  of such
Interest  Period in the interbank  eurodollar  market where the  eurodollar  and
foreign currency and exchange  operations of such Eurodollar  Lending Office are
customarily conducted, for delivery on the first day of such Interest Period for
the number of days comprised  therein and in an amount  comparable to the amount
of the Eurodollar Rate Loan to which such Interest  Period  applies,  divided by
(b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.

         Eurodollar Rate Loans. Revolving Credit Loans and all or any portion of
the Term Loan bearing interest calculated by reference to the Eurodollar Rate.

         Event of Default.  Seess.13.1.

         Excess  Consolidated  Operating  Cash  Flow.  For the  period  (A) from
October  1,  2003  through  December  31,  2003  and  (B) of  each  fiscal  year
thereafter,  an amount equal to the sum of (a) Consolidated EBITDA plus or minus
(b) Net Working Capital Changes plus or minus (c) extraordinary cash items minus
(d) the sum of (i) to the extent not already  deducted in the  determination  of
Consolidated EBITDA,  Capital Expenditures made during such period to the extent
permitted  by  ss.10.4,  plus  (ii)  cash  purchase  price  of any  acquisitions
permitted  under  ss.9.5  during such period,  plus (iii) cash  payments for all

<PAGE>

                                      -10-

taxes paid during such period,  plus (iv) cash payments of interest  during such
period,  plus (v) scheduled  principal  repayments of  Indebtedness  during such
period.

         Fees. Collectively,  the Commitment Fee, the Letter of Credit Fees, the
Administrative  Agent Fee,  and any other fees  payable  hereunder  or under the
other Loan Documents.

         Financial   Affiliate.   A  Subsidiary  of  the  bank  holding  company
controlling  any Lender,  which  Subsidiary is engaging in any of the activities
permitted  by  ss.4(e)  of the  Bank  Holding  Company  Act of 1956  (12  U.S.C.
ss.1843).

         Financial  Letter of Credit.  A letter of credit  where the event which
triggers  payment  is  financial,  such as the  failure  to pay  money,  and not
performance-related,  such as failure to ship a product or provide a service, as
set forth in greater detail in the letter dated March 30, 1995 from the Board of
Governors of the Federal Reserve System or in any applicable directive or letter
ruling of the Board of Governors of the Federal Reserve System issued subsequent
thereto.

         Fleet.  Fleet National  Bank, a national  banking  association,  in its
individual capacity.

         Franchise   Agreement.   A  contract   providing  for  exclusive  waste
management services between a municipality and a Borrower.

         Fuel Derivatives Obligations.  See 9.1(l).

         Fund.  Any Person  (other than a natural  person)  that is (or will be)
engaged in making,  purchasing,  holding or otherwise  investing  in  commercial
loans and similar extensions of credit in the ordinary course of business.

         GAAP or  generally  accepted  accounting  principles.  (a) When used in
ss.10,  whether directly or indirectly  through  reference to a capitalized term
used therein,  means (i)  principles  that are  consistent  with the  principles
promulgated  or  adopted by the  Financial  Accounting  Standards  Board and its
predecessors,  in effect as of the Closing  Date,  and (b) when used in general,
other than as provided above,  means principles that are (i) consistent with the
principles  promulgated or adopted by the Financial  Accounting  Standards Board
and its  predecessors,  as in effect  from time to time,  and (ii)  consistently
applied  with past  financial  statements  of the  Borrowers  adopting  the same
principles,  provided that in each case referred to in this definition of "GAAP"
a  certified  public  accountant  would,  insofar as the use of such  accounting
principles  is  pertinent,  be in a position to deliver an  unqualified  opinion
(other  than  a  qualification  regarding  changes  in  GAAP)  as  to  financial
statements in which such principles have been properly applied.

         Governing  Documents.  With respect to any Person,  its  certificate or
articles of incorporation,  its by-laws and all shareholder  agreements,  voting
trusts and similar arrangements applicable to any of its Capital Stock.

<PAGE>

                                      -11-

         Governmental Authority. Any foreign,  federal, state, regional,  local,
municipal or other government,  or any department,  commission,  board,  bureau,
agency, public authority or instrumentality thereof, or any court or arbitrator.

         Guaranteed  Pension Plan. Any employee  pension benefit plan within the
meaning of ss.3(2) of ERISA  maintained or contributed to by any Borrower or any
ERISA  Affiliate the benefits of which are  guaranteed on termination in full or
in part by the PBGC  pursuant to Title IV of ERISA,  other than a  Multiemployer
Plan.

         Hazardous Substances.  Seess.7.18(b).

         Indebtedness. As to any Person and whether recourse is secured by or is
otherwise  available  against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:

                  (a) every obligation of such Person for money borrowed,

                  (b)  every  obligation  of such  Person  evidenced  by  bonds,
         debentures,  notes or other similar instruments,  including obligations
         incurred in  connection  with the  acquisition  of property,  assets or
         businesses,

                  (c) every reimbursement obligation of such Person with respect
         to letters of credit, bankers' acceptances or similar facilities issued
         for the account of such Person,

                  (d) every  obligation  of such Person issued or assumed as the
         deferred purchase price of property or services  (including (i) secured
         royalty  payments  and  (ii)  securities  repurchase  agreements,   but
         excluding trade accounts payable or accrued  liabilities arising in the
         ordinary  course of  business  which are not overdue or which are being
         contested in good faith),

                  (e) every  obligation  of such  Person  under any  Capitalized
         Lease or Synthetic Lease,

                  (f) all  sales  by such  Person  of (i)  accounts  or  general
         intangibles  for  money  due or to  become  due,  (ii)  chattel  paper,
         instruments  or documents  creating or evidencing a right to payment of
         money or (iii) other receivables (collectively "receivables"),  whether
         pursuant to a purchase facility or otherwise,  other than in connection
         with the disposition of the business operations of such Person relating
         thereto or a disposition  of defaulted  receivables  for collection and
         not as a financing  arrangement,  and together  with any  obligation of
         such  Person  to  pay  any  discount,   interest,   fees,  indemnities,
         penalties, recourse, expenses or other amounts in connection therewith,

                  (g)  every  obligation  of such  Person  (an  "equity  related
         purchase obligation") to purchase,  redeem, retire or otherwise acquire
         for value any  shares of  Capital  Stock  issued by such  Person or any
         rights measured by the value of such Capital Stock,

<PAGE>

                                      -12-

                  (h)  every   obligation  of  such  Person  under  any  forward
         contract,  futures contract,  swap, option or other financing agreement
         or arrangement  (including,  without limitation,  caps, floors, collars
         and similar agreements),  the value of which is dependent upon interest
         rates,  currency  exchange  rates,  commodities  or  other  indices  (a
         "derivative contract"),

                  (i) every  obligation in respect of  Indebtedness of any other
         entity  (including  any  partnership  in which such Person is a general
         partner) to the extent that such Person is liable  therefor as a result
         of such Person's  ownership interest in or other relationship with such
         entity,  except  to the  extent  that the  terms  of such  Indebtedness
         provide  that such  Person is not  liable  therefor  and such terms are
         enforceable under applicable law,

                  (j) every obligation,  contingent or otherwise, of such Person
         guaranteeing, or having the economic effect of guarantying or otherwise
         acting as surety for,  any  obligation  of a type  described  in any of
         clauses (a) through (i) (the "primary  obligation")  of another  Person
         (the "primary obligor"), in any manner, whether directly or indirectly,
         and including, without limitation, any obligation of such Person (i) to
         purchase or pay (or advance or supply  funds for the  purchase  of) any
         security for the payment of such primary  obligation,  (ii) to purchase
         property,  securities  or  services  for the  purpose of  assuring  the
         payment  of such  primary  obligation,  or  (iii) to  maintain  working
         capital,  equity  capital or other  financial  statement  condition  or
         liquidity of the primary obligor so as to enable the primary obligor to
         pay such primary obligation, and

                  (k) any Indebtedness of such Person of a type described in any
         of clauses (a) through (j) above which is secured or  supported  by (or
         for  which the  holder  of such  Indebtedness  has an  existing  right,
         contingent or otherwise, to be secured or supported by) any Lien on (or
         other right of recourse  to or against)  property  owned or acquired by
         such Person.

         The "amount" or "principal  amount" of any  Indebtedness at any time of
determination  represented  by (A) any  Indebtedness,  issued at a price that is
less than the principal amount at maturity  thereof,  shall be the amount of the
liability  in respect  thereof  determined  in  accordance  with  GAAP,  (B) any
Capitalized  Lease shall be the  principal  component  of the  aggregate  of the
rentals  obligation under such  Capitalized  Lease payable over the term thereof
that is not subject to termination by the lessee,  (C) any Synthetic Lease shall
be the stipulated loss value,  termination value or other equivalent amount, (D)
any sale of receivables shall be the amount of unrecovered  capital or principal
investment  of the  purchaser  (other  than the  Borrowers)  thereof,  excluding
amounts  representative of yield or interest earned on such investment,  (E) any
derivative  contract  shall be the  maximum  amount of any  termination  or loss
payment required to be paid by such Person if such derivative  contract were, at
the time of determination, to be terminated by reason of any event of default or
early  termination  event  thereunder,  whether  or not such event of default or
early  termination  event has in fact occurred,  (F) any equity related purchase
obligation  shall be the maximum  fixed  redemption  or purchase  price  thereof

<PAGE>

                                      -13-

inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price, and (G) any guaranty or other contingent  liability  referred
to in clause (j) shall be an amount equal to the stated or  determinable  amount
of the primary  obligation in respect of which such guaranty or other contingent
obligation  is made or, if not stated or  determinable,  the maximum  reasonably
anticipated  liability in respect  thereof  (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.

         Ineligible  Securities.  Securities  which may not be  underwritten  or
dealt in by member banks of the Federal  Reserve  System under Section 16 of the
Banking Act of 1933 (12 U.S.C. ss.24, Seventh), as amended.

         Interest  Payment Date.  (a) As to any Base Rate Loan,  the last day of
the  calendar  quarter  with respect to interest  accrued  during such  calendar
quarter, including,  without limitation, the calendar quarter which includes the
Drawdown Date of such Base Rate Loan; and (b) as to any Eurodollar  Rate Loan in
respect of which the Interest  Period is (i) three (3) months or less,  the last
day of such Interest  Period and (ii) more than three (3) months,  the date that
is three (3) months from the first day of such Interest Period and, in addition,
the last day of such Interest Period.

         Interest  Period.  With respect to each Revolving Credit Loan or all or
any relevant portion of the Term Loan, (a) initially,  the period  commencing on
the Drawdown  Date of such Loan and ending on the last day of one of the periods
set forth below,  as selected by the Borrowers in a Loan Request or as otherwise
required by the terms of this Credit  Agreement (i) for any Base Rate Loan,  the
last day of the calendar  quarter;  and (ii) for any  Eurodollar  Rate Loan, one
(1),  two (2),  three (3) or six (6)  months;  and (b)  thereafter,  each period
commencing on the last day of the next preceding  Interest Period  applicable to
such Revolving Credit Loan or all or such portion of the Term Loan and ending on
the last day of one of the periods set forth above, as selected by the Borrowers
in a Conversion Request;  provided that all of the foregoing provisions relating
to Interest Periods are subject to the following:

                  (A) if any Interest  Period with respect to a Eurodollar  Rate
         Loan would  otherwise  end on a day that is not a  Eurodollar  Business
         Day,  that  Interest  Period  shall be extended to the next  succeeding
         Eurodollar Business Day unless the result of such extension would be to
         carry such Interest Period into another  calendar month, in which event
         such Interest Period shall end on the immediately  preceding Eurodollar
         Business Day;

                  (B) if any  Interest  Period with  respect to a Base Rate Loan
         would end on a day that is not a Business  Day,  that  Interest  Period
         shall end on the next succeeding Business Day;

                  (C) if the Borrowers  shall fail to give notice as provided in
         ss.2.8, the Borrowers shall be deemed to have requested a conversion of
         the  affected  Eurodollar  Rate  Loan  to a  Base  Rate  Loan  and  the

<PAGE>

                                      -14-
         continuance  of all Base Rate  Loans as Base Rate Loans on the last day
         of the then current Interest Period with respect thereto;

                  (D) any Interest  Period  relating to any Eurodollar Rate Loan
         that begins on the last Eurodollar Business Day of a calendar month (or
         on a day for which  there is no  numerically  corresponding  day in the
         calendar  month at the end of such  Interest  Period)  shall end on the
         last Eurodollar Business Day of a calendar month; and

                  (E) any Interest Period that would otherwise extend beyond the
         Revolving  Credit Loan Maturity Date (if comprising a Revolving  Credit
         Loan) or the Term Loan Maturity Date (if  comprising the Term Loan or a
         portion  thereof) shall end on the Revolving  Credit Loan Maturity Date
         or (as the case may be) the Term Loan Maturity Date.

         Interim Balance Sheet Date.  June 30, 2003.

         Investments.   All  expenditures  made  and  all  liabilities  incurred
(contingently  or otherwise) for the acquisition of stock or Indebtedness of, or
for loans,  advances,  capital  contributions or transfers of property to, or in
respect  of  any   guaranties   (or  other   commitments   as  described   under
Indebtedness),  or  obligations  of, any Person.  In  determining  the aggregate
amount of Investments  outstanding at any particular time: (a) the amount of any
Investment  represented  by a  guaranty  shall be  taken  at not  less  than the
principal amount of the obligations guaranteed and still outstanding;  (b) there
shall be  included  as an  Investment  all  interest  accrued  with  respect  to
Indebtedness  constituting an Investment unless and until such interest is paid;
(c) there  shall be  deducted  in  respect  of each such  Investment  any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment,  liquidating dividend or liquidating  distribution);  (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such  Investment,  whether as  dividends,  interest  or  otherwise,  except that
accrued  interest  included  as  provided  in the  foregoing  clause  (b) may be
deducted  when paid;  and (e) there  shall not be  deducted  from the  aggregate
amount of Investments any decrease in the value thereof.

         L/C Supported  IRBs.  Industrial  revenue bonds or solid waste disposal
bonds  issued by or at the request of the  Borrowers  which are backed by direct
pay Letters of Credit issued hereunder.

         Lender Affiliate.  With respect to any Lender, (a) an Affiliate of such
Lender or (b) any Approved Fund.

         Lenders.  Collectively,  the  Revolving  Credit  Lenders  and the  Term
Lenders.

         Letter(s) of Credit.  See ss.4.1.1.

         Letter of Credit Application.  Seess.4.1.1.

         Letter of Credit Fee.  Seess.4.6.

<PAGE>

                                      -15-

         Letter of Credit Participation.  Seess.4.1.4.

         Leverage  Ratio.  As at any  date of  determination,  the  ratio of (a)
Consolidated  Total Funded Debt  outstanding  on such date to (b) EBITDA for the
Reference Period ending on such date.

         Lien.  Any  mortgage,   deed  of  trust,  security  interest,   pledge,
hypothecation,  assignment,  attachment, deposit arrangement,  encumbrance, lien
(statutory,  judgment or otherwise), or other security agreement or preferential
arrangement of any kind or nature whatsoever  (including any conditional sale or
other title retention agreement, any Capitalized Lease, any Synthetic Lease, any
financing lease involving  substantially  the same economic effect as any of the
foregoing and the filing of any financing  statement under the UCC or comparable
law of any jurisdiction).

         Loan Documents.  This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, and the Security Documents.

         Loan Request.  Seess.2.7.

         Loans.  Collectively,  the Revolving Credit Loans, the Swing Line Loans
and the Term Loan.

         Material Acquisition. Any acquisition or series of related acquisitions
permitted under ss.9.5.1 for which the aggregate cash  consideration  (including
the  aggregate  amount  of  all  Indebtedness   assumed  or  incurred)   exceeds
$5,000,000.

         Material  Adverse  Effect.  With respect to any event or  occurrence of
whatever  nature  (including  any  adverse   determination  in  any  litigation,
arbitration or governmental investigation or proceeding):

                  (a) a material  adverse  effect on the  business,  properties,
         prospects,  condition (financial or otherwise),  assets,  operations or
         income of the Borrowers;

                  (b) an adverse  effect on the ability of any of the  Borrowers
         to  perform  any of its  respective  Obligations  under any of the Loan
         Documents to which such Borrower is a party; or

                  (c)  any  impairment  of  the  validity,   binding  effect  or
         enforceability  of  this  Credit  Agreement  or any of the  other  Loan
         Documents, any impairment of the rights, remedies or benefits available
         to the  Administrative  Agent or any Lender under any Loan  Document or
         any impairment of the attachment, perfection or priority of any Lien of
         the Administrative Agent under the Security Documents.

In  determining  whether any  individual  event could  reasonably be expected to
result in a Material Adverse Effect, notwithstanding that such event does not of
itself  have such  effect,  a Material  Adverse  Effect  shall be deemed to have

<PAGE>

-16-

occurred  if the  cumulative  effect of such event and all other  then  existing
events could reasonably be expected to result in a Material Adverse Effect.

         Maximum  Drawing  Amount.   The  maximum   aggregate  amount  that  the
beneficiaries may at any time draw under outstanding  Letters of Credit, as such
aggregate  amount may be reduced from time to time  pursuant to the terms of the
Letters of Credit.

         Membership  Interest Pledge Agreement.  The Membership  Interest Pledge
Agreement,  dated as of October  10,  2003 and as the same may be amended and in
effect  from  time to time,  by and  among  certain  limited  liability  company
Subsidiaries and the Administrative Agent.

         Moody's.  Moody's Investors Services, Inc.

         Multiemployer  Plan.  Any  multiemployer  plan  within  the  meaning of
ss.3(37) of ERISA  maintained  or  contributed  to by any  Borrower or any ERISA
Affiliate.

         Net Cash Proceeds. With respect to any issuance of Subordinated Debt or
equity,  the excess of the gross cash proceeds received by such Person from such
issuance  after  deduction of  reasonable  and  customary  transaction  expenses
(including without limitation,  underwriting discounts and commissions) actually
incurred in connection with such issuance.

         Net Cash Sales Proceeds.  The net cash proceeds received by a Person in
respect  of any  disposition  of  assets,  less  the sum of (a)  all  reasonable
out-of-pocket  fees,  commissions  and other  reasonably  and  customary  direct
expenses  actually  incurred  in  connection  with such  disposition  of assets,
including the amount of any transfer or documentary taxes required to be paid by
such Person in connection with such disposition of assets, and (b) the aggregate
amount of cash so received by such Person which is required to be used to retire
(in whole or in part) any Indebtedness  (other than under the Loan Documents) of
such Person  permitted  by this Credit  Agreement  that was secured by a lien or
security  interest  permitted by this Credit  Agreement having priority over the
liens and  security  interests  (if any) of the  Administrative  Agent  (for the
benefit of the Administrative Agent and the Lenders) with respect to such assets
transferred  and  which is  required  to be  repaid  in whole or in part  (which
repayment,  in the case of any other  revolving  credit  arrangement or multiple
advance arrangement,  reduces the commitment thereunder) in connection with such
disposition of assets.

         Net Working  Capital  Changes.  With respect to the Borrowers,  for any
fiscal period and without duplication,  the difference  (expressed as a positive
or a negative  number) of (a) the sum of (i) both billed and  unbilled  accounts
receivable,  plus (ii)  inventory  of the  Borrowers  and other  current  assets
considered part of working capital in accordance with GAAP,  minus (iii) current
accounts  payable of the Borrowers,  minus (iv) current  accruals and accretions
(exclusive of interest accruals and accretions) of the Borrowers,  in each case,
for such  fiscal  period,  minus  (b) the sum of (i) both  billed  and  unbilled
accounts  receivable,  plus,  (ii)  inventory of the Borrowers and other current

<PAGE>

                                      -17-

assets  considered part of working capital in accordance with GAAP,  minus (iii)
current  accounts  payable of the  Borrowers,  minus (iv)  current  accruals and
accretions (exclusive of interest accruals and accretions) of the Borrowers,  in
each case,  for the fiscal period of equal  duration  immediately  prior to such
fiscal period.

         Non-U.S. Lender.  See ss.5.2.3.

         Notes.  The Revolving  Credit Notes,  the Term Notes and the Swing Line
Note.

         Obligations.  All  Indebtedness,  obligations and liabilities of any of
the Borrowers to any of the Lenders and the Administrative  Agent,  individually
or  collectively,  existing  on the date of this  Credit  Agreement  or  arising
thereafter,  direct or  indirect,  joint or  several,  absolute  or  contingent,
matured or unmatured, liquidated or unliquidated,  secured or unsecured, arising
by  contract,  operation  of law or  otherwise,  arising or incurred  under this
Credit  Agreement  or  any of the  other  Loan  Documents  or  Fuel  Derivatives
Obligations or under any Swap Contract  between the Borrowers and any Lender (or
affiliate  thereof)  or in  respect  of any of the Loans  made or  Reimbursement
Obligations  incurred,  Letter of Credit Application,  Letter of Credit or other
instruments at any time evidencing any thereof.

         Omnibus Amendment. Omnibus Amendment dated as of the Closing Date among
the Administrative Agent and the Borrowers.

         outstanding.  With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.

         Parent.  As defined in the preamble.

         Participant.  See ss.15.5.

         PBGC. The Pension Benefit  Guaranty  Corporation  created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.

         Perfection Certificates.  The Perfection Certificates as defined in the
Security Agreement.

         Performance  Letter of Credit. A letter of credit where the event which
triggers  payment is  performance-related,  such as failure to ship a product or
provide a service, and not a Financial Letter of Credit.

         Permitted Liens.  Liens permitted byss.9.2.

         Person.  Any  individual,   corporation,   limited  liability  company,
partnership,   limited  liability   partnership,   trust,  other  unincorporated
association, business, or other legal entity, and any Governmental Authority.

<PAGE>

                                      -18-

         Pledge  Agreement.  The Amended and Restated  Collateral  Assignment of
Partnership  Interests,  dated as of  September  14, 2001 and as the same may be
amended and in effect from time to time, by and among certain  Borrowers and the
Administrative   Agent   and  in  form  and   substance   satisfactory   to  the
Administrative Agent.

         Prior Banks.  As defined in the preamble hereto.

         Prior Credit Agreement. As defined in the preamble hereto.

         RCRA.  See ss.7.18(a).

         Real Estate.  All real  property at any time owned or leased (as lessee
or sublessee) by any Borrower.

         Record.  The grid attached to a Note, or the continuation of such grid,
or any other  similar  record,  including  computer  records,  maintained by any
Lender with respect to any Loan referred to in such Note.

         Reference Period.  As of any date of determination,  the period of four
(4) consecutive fiscal quarters of the Borrowers ending on such date, or if such
date is not a fiscal quarter end date, the period of four (4) consecutive fiscal
quarters  most  recently  ended (in each  case  treated  as a single  accounting
period).

         Register.  See ss.15.3.

         Reimbursement  Obligation.  The Borrowers'  obligation to reimburse the
Administrative  Agent and the Revolving Credit Lenders on account of any drawing
under any Letter of Credit as provided in ss.4.2.

         Related Parties.  With respect to any specified  Person,  such Person's
Affiliates and their respective directors, officers, employees, agents, trustees
and advisors of such Person and such Person's Affiliates.

         Release.  As such term is defined in the CERCLA and the term "Disposal"
(or  "Disposed")  shall  have the  meaning  specified  in RCRA  and  regulations
promulgated  thereunder;  provided  that in the event  either  CERCLA or RCRA is
amended so as to broaden the meaning of any term defined  thereby,  such broader
meaning shall apply as of the effective  date of such  amendment;  and provided,
further,  to the  extent  that the laws of a state  wherein  the  property  lies
establishes  a  meaning  for  "Release"  or  "Disposal"  which is  broader  than
specified in either CERCLA or RCRA, such broader meaning shall apply.

         Required Lenders. As of any date, any combination of Lenders the sum of
whose aggregate Revolving Credit Commitments and outstanding principal amount of
the Term Loan  constitute  at least  fifty-one  percent  (51%) of the sum of the
Total Revolving Credit Commitment and the total outstanding  principal amount of
the Term Loan or, if the Total Revolving  Credit  Commitment has been terminated
or if the Revolving  Credit Loan Maturity Date has occurred,  any combination of
Lenders  holding  at least  fifty-one  percent  (51%) of the  total  outstanding

<PAGE>

                                      -19-

principal  amount of the Loans and the  Maximum  Drawing  Amount of  outstanding
Letters of Credit on such date.

         Restricted  Payment.  In relation to the  Borrowers  and the De Minimis
Subsidiaries, any (a) Distribution, (b) payment or prepayment by any Borrower or
any  Subsidiary to (i) such  Borrowers' or such  Subsidiaries  shareholders  (or
other equity holders),  in each case, other than to another Borrower, or (ii) to
any  Affiliate  of such  Borrower or such  Subsidiary  or any  Affiliate of such
Borrower's or such Subsidiary's  shareholders (or other equity holders), in each
case,  other than to another  Borrower or (c) derivatives or other  transactions
with any financial  institution,  commodities or stock exchange or clearinghouse
(a  "Derivatives  Counterparty")  obligating such Borrower or such Subsidiary to
make  payments  to such  Derivatives  Counterparty  as a result of any change in
market value of any capital stock of such Borrower or such Subsidiary.

         Revolving  Credit  Commitment.  With respect to each  Revolving  Credit
Lender,  the  amount  set  forth on  Schedule  1 hereto  as the  amount  of such
Revolving  Credit Lender's  commitment to make Revolving Credit Loans to, and to
participate in the issuance,  extension and renewal of Letters of Credit for the
account of, the Borrowers,  as the same may be increased or reduced from time to
time  in  accordance  with  this  Credit  Agreement;  or if such  commitment  is
terminated pursuant to the provisions hereof, zero.

         Revolving Credit Commitment Percentage.  With respect to each Revolving
Credit  Lender,  the percentage set forth on Schedule 1 hereto as such Revolving
Credit Lender's percentage of the Total Revolving Credit Commitment.

         Revolving  Credit Lenders.  Each of the Lenders with a Revolving Credit
Commitment  as set forth on Schedule 1 hereto,  and any other Person who becomes
an assignee of any rights and obligations of a Revolving  Credit Lender pursuant
to ss.15.

         Revolving Credit Loan Maturity Date. September 30, 2008.

         Revolving  Credit Loans.  Revolving  credit loans made or to be made by
the Revolving Credit Lenders to the Borrowers pursuant to ss.2.

         Revolving  Credit Note  Record.  A Record  with  respect to a Revolving
Credit Note.

         Revolving Credit Notes. Seess.2.5.2.

         SARA.  See ss.7.18(a).

         Security Agreement. The Fourth Amended and Restated Security Agreement,
dated as of September 14, 2001 and as the same may be amended and in effect from
time to time,  by and among the Borrowers  and the  Administrative  Agent and in
form and substance satisfactory to the Administrative Agent.

<PAGE>

-20-

         Security Documents. The Security Agreement, the Stock Pledge Agreement,
the  Pledge   Agreement,   the  Membership   Interest  Pledge   Agreement,   the
Acknowledgment and Consent,  the Omnibus Amendment and all other instruments and
documents,  including  without  limitation  Uniform  Commercial  Code  financing
statements,  required  to be  executed or  delivered  pursuant  to any  Security
Document.

         Seneca Meadows.  Seneca Meadows, Inc., a New York corporation.

         Seneca  Meadows  Acquisition.  The  Parent's  purchase  of one  hundred
percent (100%) of the outstanding common stock of Seneca Meadows as described in
the Stock Purchase Agreement dated as of May 22, 2003 among IESI NY Corporation,
Frank Dimino, Seneca Meadows, Inc. and Macedon Homes Incorporated.

         Seneca Meadows Adjustment Amount. For each fiscal quarter referenced in
the table  below,  the amount set forth  opposite  such  fiscal  quarter in such
table:

<TABLE>
<CAPTION>
        ---------------------------------------------- ---------------------------------------------

                    Fiscal Quarter Ending                                 Amount
        ---------------------------------------------- ---------------------------------------------

                          <S>                                          <C>
                          12/31/03                                     $27,225,000
        ---------------------------------------------- ---------------------------------------------

                           3/31/04                                     $18,475,000
        ---------------------------------------------- ---------------------------------------------

                           6/30/04                                      $9,725,000
        ---------------------------------------------- ---------------------------------------------

                           9/30/04                                       $975,000
        ---------------------------------------------- ---------------------------------------------

</TABLE>

         Senior Leverage Ratio.  As at any date of  determination,  the ratio of
(a)  Consolidated  Senior Funded Debt outstanding on such date to (b) EBITDA for
the Reference Period ending on such date.

         Series C  Convertible  Preferred  Stock.  The 55,000 shares of Series C
Convertible  Preferred  Stock of the  Parent  sold in June  and  July  1999 in a
private placement to four (4) existing  stockholders,  or affiliates thereof, of
the Parent for aggregate gross proceeds of $55,000,000.

         Series D  Convertible  Preferred  Stock.  The 55,000 shares of Series D
Convertible  Preferred  Stock of the Parent sold in September  2001 in a private
placement to four (4) existing  stockholders  of the Parent for aggregate  gross
proceeds of $55,000,000.

         Series E  Convertible  Preferred  Stock.  The 55,000 shares of Series E
Convertible Preferred Stock of the Parent sold (a) on or before the Closing Date
in a private placement for minimum net proceeds of $47,000,000 and (b) following
the Closing Date in a private placement for minimum net proceeds of $1,000,000.

<PAGE>

         -21-  Settlement.  The making or receiving of payments,  in immediately
available funds, by the Revolving  Credit Lenders to or from the  Administrative
Agent in accordance  with ss.2.10  hereof to the extent  necessary to cause each
such Revolving  Credit Lender's  actual share of the  outstanding  amount of the
Swing Line Loans to be equal to such Revolving Credit Lender's  Revolving Credit
Commitment Percentage of the outstanding amount of such Swing Line Loans, in any
case when, prior to such action, the actual share is not so equal.

         Settlement Amount.  Seess.2.10(b).

         Settlement Date.  Seess.2.10(b).

         Settling Lender.  Seess.2.10(b).

         S&P.  Standard & Poor's Ratings Group.

         Stock Pledge  Agreement.  The Fourth  Amended and Restated Stock Pledge
Agreement,  dated as of September 14, 2001 and as the same may be amended and in
effect  from  time to  time,  by and  among  certain  of the  Borrowers  and the
Administrative   Agent   and  in  form  and   substance   satisfactory   to  the
Administrative Agent.

         Subordinated  Debt.  (a) Unsecured  Indebtedness  of the Borrowers with
respect to  promissory  notes issued by any  Borrower to a seller in  connection
with an acquisition permitted by ss.9.5.1 hereof that is expressly  subordinated
and made junior to the payment and performance in full of the  Obligations,  and
evidenced as such by a written instrument  provided to the Administrative  Agent
containing  subordination  provisions in substantially  the form of Exhibit G or
other terms reasonably  acceptable to the Administrative  Agent and the Required
Lenders,  (b) unsecured  Indebtedness of the Parent (and subordinated  unsecured
guarantees  thereof by its  Subsidiaries)  issued or to be issued  pursuant to a
debt  offering  or  offerings,  either  pursuant  to a public  offering  of debt
securities  or a  private  placement  of debt  securities;  provided  that  such
Subordinated  Debt shall (i) include terms no less favorable to the Lenders than
terms of "market" senior subordinated  unsecured debt, (ii) be unsecured,  (iii)
mature and require no principal  repayments  prior to six months after the later
of the Revolving  Credit Loan Maturity Date or the Term Loan Maturity Date, (iv)
have a yield not to exceed twelve percent (12%) per year and (v) be on terms and
conditions   acceptable  to  the   Administrative   Agent,   and  (c)  unsecured
Indebtedness  of the Parent  incurred  pursuant to, and in accordance  with, the
2002  Subordinated  Note  Indenture  and the 2002  Subordinated  Notes,  and the
unsecured guarantees thereof by the Subsidiaries of the Parent.

         Subsidiary.  Any  corporation,  association,  trust,  or other business
entity  of which  the  designated  parent  shall at any  time  own  directly  or
indirectly  through a Subsidiary or  Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.

<PAGE>

                                      -22-

         Swap Contracts.  Any agreement  (including any master agreement and any
agreement,  whether or not in writing,  relating to any single transaction) that
is an  interest  rate  swap  agreement,  basis  swap,  forward  rate  agreement,
commodity swap,  commodity option,  equity or equity index swap or option,  bond
option,  interest rate option,  forward foreign  exchange  agreement,  rate cap,
collar or floor  agreement,  currency swap agreement,  cross-currency  rate swap
agreement,  swaption,  currency option or other similar agreement (including any
option to enter into any of the foregoing).

         Swing Line Loans.  Seess.2.10(a).

         Swing Line Note.  Seess.2.10(a).

         Syndication Agent.  As defined in the preamble hereto.

         Synthetic Lease. Any lease of goods or other property,  whether real or
personal,  which is treated as an  operating  lease  under GAAP and as a loan or
financing for U.S. income tax purposes.

         Term Lenders. Each of the Lenders holding a portion of the Term Loan as
set forth on Schedule 1 hereto,  and any other Person who becomes an assignee of
any rights and obligations of a Term Lender pursuant to ss.15.

         Term Loan.  Collectively,  the term loan made or to be made by the Term
Lenders to the Borrowers on the Closing Date in the aggregate  principal  amount
of  $200,000,000  pursuant  to ss.3.1 and any  increase or new Term Loan made in
accordance with ss.3.2, as each may be increased or reduced from time to time in
accordance with this Credit Agreement.

         Term Loan Amount.  (a) individually,  with respect to each Term Lender,
the  amount set forth on  Schedule 1 hereto as the amount of such Term  Lender's
portion of the Term Loan and (b) collectively,  the outstanding principal amount
of the Term Loan at any time.

         Term Loan Maturity Date. September 30, 2010.

         Term Loan Percentage.  With respect to each Term Lender, the percentage
set forth on Schedule 1 hereto as such Term Lender's percentage of the aggregate
Term Loan Amount of all the Term Lenders.

         Term Notes.  Seess.3.3.

         Term Note Record.  A Record with respect to a Term Note.

         Total Facility Amount. The sum of the Total Revolving Credit Commitment
plus the Term Loan Amount,  which shall equal  $400,000,000 on the Closing Date,
as the same may be  increased or reduced  from time to time in  accordance  with
this Credit Agreement.

<PAGE>

                                      -23-

         Total  Revolving  Credit  Commitment.  The sum of the Revolving  Credit
Commitments of the Revolving Credit Lenders,  which shall equal  $200,000,000 on
the Closing  Date,  as the same may be increased or reduced from time to time in
accordance with this Credit Agreement.

         Type. As to any Revolving Credit Loan or all or any portion of the Term
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.

         Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrowers do not reimburse the Administrative Agent and the Revolving Credit
Lenders on the date specified in, and in accordance with, ss.4.2.

         Voting  Stock.  Stock or  similar  interests,  of any class or  classes
(however  designated),  the holders of which are at the time  entitled,  as such
holders,  to vote for the  election of a majority of the  directors  (or persons
performing  similar functions) of the corporation,  association,  trust or other
business entity  involved,  whether or not the right so to vote exists by reason
of the happening of a contingency.

         2002  Subordinated  Note Indenture.  The Indenture dated as of June 12,
2002,  entered into by the Parent, the 'Subsidiary  Guarantors'  defined therein
and The Bank of New  York,  as  trustee  thereunder,  with  respect  to the 2002
Subordinated  Notes, as the same may be  supplemented,  amended or modified from
time to time in accordance with the terms hereof (including  without  limitation
ss.9.7 hereof).

         2002  Subordinated  Notes.  Any and all  Notes  Due 2012  issued by the
Parent under and pursuant to the 2002 Subordinated Note Indenture.

         1.2. RULES OF INTERPRETATION.

                  (a) A reference  to any document or  agreement  shall  include
         such document or agreement as amended,  modified or  supplemented  from
         time to time in accordance  with its terms and the terms of this Credit
         Agreement.

                  (b) The singular  includes the plural and the plural  includes
         the singular.

                  (c)  A  reference  to  any  law  includes  any   amendment  or
         modification to such law.

                  (d)  A  reference  to  any  Person   includes  its   permitted
         successors and permitted assigns.

                  (e)  Accounting  terms not otherwise  defined  herein have the
         meanings  assigned to them by GAAP applied on a consistent basis by the
         accounting entity to which they refer.

                  (f) The words  "include",  "includes" and  "including" are not
         limiting.

<PAGE>

                                      -24-

                  (g) All  terms  not  specifically  defined  herein or by GAAP,
         which terms are defined in the Uniform  Commercial Code as in effect in
         the State of New York, have the meanings assigned to them therein, with
         the term "instrument" being that defined under Article 9 of the Uniform
         Commercial Code.

                  (h) Reference to a particular  "ss." refers to that section of
         this Credit Agreement unless otherwise indicated.

                  (i) The words  "herein",  "hereof",  "hereunder"  and words of
         like import shall refer to this Credit  Agreement as a whole and not to
         any particular section or subdivision of this Credit Agreement.

                  (j) Unless otherwise expressly  indicated,  in the computation
         of periods of time from a specified date to a later specified date, the
         word "from" means "from and including," the words "to" and "until" each
         mean  "to  but  excluding,"  and  the  word  "through"  means  "to  and
         including."

                  (k) This Credit Agreement and the other Loan Documents may use
         several  different  limitations,  tests or measurements to regulate the
         same or similar matters.  All such limitations,  tests and measurements
         are, however, cumulative and are to be performed in accordance with the
         terms thereof.

                  (l) This Credit Agreement and the other Loan Documents are the
         result of  negotiation  among,  and have been  reviewed  by counsel to,
         among others,  the  Administrative  Agent and the Borrowers and are the
         product of discussions and negotiations among all parties. Accordingly,
         this Credit  Agreement and the other Loan Documents are not intended to
         be  construed  against the  Administrative  Agent or any of the Lenders
         merely  on  account  of the  Administrative  Agent's  or  any  Lender's
         involvement in the preparation of such documents.

                        2. THE REVOLVING CREDIT FACILITY.
                           -----------------------------

         2.1.  COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement,  each of the Revolving Credit Lenders severally agrees
to lend to the Borrowers and the Borrowers may borrow,  repay, and reborrow from
time to time from the Closing Date up to but not including the Revolving  Credit
Loan  Maturity  Date upon notice by the  Borrowers to the  Administrative  Agent
given in accordance with ss.2.7,  such sums as are requested by the Borrowers up
to a maximum  aggregate amount  outstanding  (after giving effect to all amounts
requested) at any one time equal to such  Revolving  Credit  Lender's  Revolving
Credit  Commitment  minus  such  Revolving  Credit  Lender's   Revolving  Credit
Commitment  Percentage of the sum of the Maximum  Drawing  Amount and all Unpaid
Reimbursement  Obligations,  provided that the sum of the outstanding  amount of
the Revolving  Credit Loans (after giving effect to all amounts  requested) plus
the  outstanding  amount of the Swing Line  Loans  (after  giving  effect to all
amounts requested) plus the Maximum Drawing Amount and all Unpaid  Reimbursement

<PAGE>

                                      -25-

Obligations  shall not at any time exceed the Total Revolving Credit  Commitment
at such time.  The  Revolving  Credit Loans shall be made pro rata in accordance
with each Revolving Credit Lender's Revolving Credit Commitment Percentage. Each
request for a Revolving  Credit Loan hereunder shall constitute a representation
and warranty by the Borrowers  that the conditions set forth in ss.11 and ss.12,
in the case of the  initial  Revolving  Credit  Loans to be made on the  Closing
Date,  and ss.12,  in the case of all other  Revolving  Credit Loans,  have been
satisfied on the date of such request.

         2.2.  INCREASE IN TOTAL REVOLVING CREDIT COMMITMENT Unless a Default or
Event of Default has occurred and is continuing,  the Borrowers may request,  on
one or more  occasions at any time prior to the  Revolving  Credit Loan Maturity
Date, that the Total Revolving  Credit  Commitment in effect on the date of such
request be  increased  by an amount  such that Total  Facility  Amount  does not
exceed $450,000,000;  provided that (i) no Revolving Credit Lender shall have an
obligation to the  Borrowers,  the  Administrative  Agent or any other Lender to
increase its Revolving  Credit  Commitment or its  Revolving  Credit  Commitment
Percentage,  (ii) in the event that it becomes  necessary to include one or more
new Revolving Credit Lenders to provide  additional funding under this ss.2.2 in
order to enable such increase in the Total Revolving Credit Commitment to occur,
such new Revolving  Credit  Lenders  shall be  acceptable to the  Administrative
Agent,  (iii)  such new  Revolving  Credit  Lender(s)  shall have  executed  and
delivered to the  Administrative  Agent an  instrument  of accession in form and
substance  satisfactory to the  Administrative  Agent, (iv) the Revolving Credit
Lenders'  Revolving  Credit  Commitment  Percentages  shall  be  correspondingly
adjusted,  (v) each new  Revolving  Credit  Lender  shall make all (if any) such
payments to the other Revolving  Credit Lenders as may be necessary to result in
the sum of the Revolving  Credit Loans to be made by such new  Revolving  Credit
Lender  plus  such new  Revolving  Credit  Lender's  proportionate  share of the
Maximum Drawing Amount and all Unpaid  Reimbursement  Obligations being equal to
such new Revolving Credit Lender's Revolving Credit Commitment Percentage of the
aggregate  principal amount of the sum of all Revolving Credit Loans outstanding
to the Borrowers as of such date plus the Maximum  Drawing Amount and all Unpaid
Reimbursement Obligations as of such date, and (vi) Revolving Credit Notes shall
be issued or amended and such other changes shall be made to the Loan Documents,
as shall be necessary to reflect any such increase in the Total Revolving Credit
Commitment.  Any such increase in the Total Revolving  Credit  Commitment  shall
require,  among other things,  the satisfaction of such conditions  precedent as
the  Administrative  Agent  may  require,  including,  without  limitation,  the
Administrative Agent's receipt of evidence of applicable corporate authorization
and other  corporate  documentation  from the Borrowers and the legal opinion of
counsel  to the  Borrowers,  each  in form  and  substance  satisfactory  to the
Administrative  Agent and such Revolving Credit Lenders as are  participating in
such increase.

         2.3.  COMMITMENT FEE. The Borrowers  jointly and severally agree to pay
to the Administrative  Agent for the accounts of the Revolving Credit Lenders in
accordance  with their  respective  Revolving  Credit  Commitment  Percentages a
commitment fee (the  "Commitment  Fee") equal to the  Applicable  Commitment Fee

<PAGE>

                                      -26-

Rate  multiplied by the amount of the average daily unused  portion of the Total
Revolving Credit Commitment during each calendar quarter or portion thereof from
the  Closing  Date to the  Revolving  Credit  Maturity  Date  (or to the date of
termination  in full of the Total  Revolving  Credit  Commitment,  if  earlier);
provided however, outstanding Swing Line Loans shall not be considered usage for
the purposes of  calculating  the  Commitment  Fee. The  Commitment Fee shall be
payable  quarterly in arrears on the first Business Day of each calendar quarter
for the immediately  preceding  calendar quarter  commencing on January 1, 2004,
with a final payment on the Revolving  Credit  Maturity Date or any earlier date
on which the Total Revolving Credit Commitment shall terminate.

         2.4.  REDUCTION OF TOTAL  REVOLVING  CREDIT  COMMITMENT.  The Borrowers
shall  have the right at any time and from  time to time upon five (5)  Business
Days prior written notice to the Administrative Agent to reduce by $5,000,000 or
an integral  multiple of $1,000,000 in excess  thereof or to terminate  entirely
the  Total  Revolving   Credit   Commitment,   whereupon  the  Revolving  Credit
Commitments  of the  Revolving  Credit  Lenders  shall  be  reduced  pro rata in
accordance with their respective Revolving Credit Commitment  Percentages of the
amount  specified  in such notice or, as the case may be,  terminated.  Promptly
after receiving any notice of the Borrowers  delivered  pursuant to this ss.2.4,
the  Administrative  Agent  will  notify  the  Revolving  Credit  Lenders of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrowers shall pay to the Administrative  Agent for the respective accounts
of the  Revolving  Credit  Lenders  the full amount of any  Commitment  Fee then
accrued on the amount of the  reduction.  No  reduction  or  termination  of the
Commitments may be reinstated.

         2.5. EVIDENCE OF DEBT; REVOLVING CREDIT NOTES.

                  2.5.1.  LOAN  ACCOUNTS.  Each  Revolving  Credit  Lender shall
                  maintain in accordance  with its usual  practice an account or
                  accounts  evidencing  Indebtedness  of the  Borrowers  to such
                  Revolving  Credit Lender  resulting from such Revolving Credit
                  Lender's  Revolving  Credit Loan  Percentage  of the Revolving
                  Credit  Loans  from time to time,  including  the  amounts  of
                  principal  and  interest  payable  and paid to such  Revolving
                  Credit  Lender from time to time under this Credit  Agreement.
                  The  Administrative  Agent shall maintain accounts in which it
                  shall record (a) the amount of the Revolving Credit Loans made
                  hereunder,   the  Type  thereof  and  each   Interest   Period
                  applicable  thereto,  (b)  the  amount  of  any  principal  or
                  interest due and payable or to become due and payable from the
                  Borrowers to each  Revolving  Credit Lender  hereunder and (c)
                  both the  amount of any sums  received  by the  Administrative
                  Agent  hereunder  for  the  account  of the  Revolving  Credit
                  Lenders and each Revolving  Credit  Lender's share thereof (if
                  any). The entries made by each Revolving  Credit Lender in the
                  accounts   maintained   pursuant  to  this  ss.2.5.1  (or  any
                  Revolving  Credit Note Record referred to below) shall, to the
                  extent permitted by applicable law, be prima facie evidence of
                  the existence and amounts of the  obligations of the Borrowers
                  therein recorded;  provided,  however, that the failure of any

<PAGE>

-27-

                  Lender to maintain any such  accounts,  or any error  therein,
                  shall not in any manner affect the obligation of the Borrowers
                  to repay (with applicable  interest) the Revolving Credit Loan
                  made in accordance with the terms of this Credit Agreement.

                  2.5.2.  REVOLVING CREDIT NOTES. The Borrowers agree that, upon
                  the request of any Revolving Credit Lender, they shall execute
                  a promissory  note in form and substance  satisfactory  to the
                  Administrative  Agent,  dated as of the Closing  Date (or such
                  other  date on which a  Revolving  Credit  Lender may become a
                  party hereto in  accordance  with ss.15  hereof) and completed
                  with appropriate  insertions.  The Revolving Credit Note shall
                  be payable to the order of such  Revolving  Credit Lender in a
                  principal  amount  equal  to such  Revolving  Credit  Lender's
                  Revolving Credit Loan Percentage of the Revolving Credit Loans
                  and  representing  the  obligation  of the Borrowers to pay to
                  such  Revolving  Credit  Lender such  principal  amount or, if
                  less, the outstanding amount of such Revolving Credit Lender's
                  Revolving  Credit  Loan  Percentage  of the  Revolving  Credit
                  Loans, plus interest accrued thereon,  as set forth below. The
                  Borrowers  irrevocably  authorize each Revolving Credit Lender
                  with a  Revolving  Credit  Note to make or  cause to be made a
                  notation on such Revolving  Credit Lender's  Revolving  Credit
                  Note Record  reflecting the original  principal amount of such
                  Revolving Credit Lender's  Revolving Credit Loan Percentage of
                  the  Revolving  Credit  Loans and, at or about the time of the
                  receipt of any payment of principal on such Lender's Revolving
                  Credit Note, an appropriate  notation on such Revolving Credit
                  Lender's  Revolving Credit Note Record  reflecting the receipt
                  of such payment.

         2.6. INTEREST ON REVOLVING CREDIT LOANS.  Except as otherwise  provided
inss.5.10,

                  (a) Each Revolving Credit Loan which is a Base Rate Loan shall
         bear interest for the period  commencing with the Drawdown Date thereof
         and ending on the last day of the Interest  Period with respect thereto
         at the rate per annum equal to the Base Rate plus the Applicable Margin
         with respect to Base Rate Loans as in effect from time to time.

                  (b) Each Revolving Credit Loan which is a Eurodollar Rate Loan
         shall bear  interest for the period  commencing  with the Drawdown Date
         thereof and ending on the last day of the Interest  Period with respect
         thereto at the rate per annum equal to the Eurodollar  Rate  determined
         for such  Interest  Period plus the  Applicable  Margin with respect to
         Eurodollar Rate Loans as in effect from time to time.

The Borrowers  jointly and severally  promise to pay interest on each  Revolving
Credit Loan in arrears on each Interest Payment Date with respect thereto.

<PAGE>

                                      -28-

         2.7. REQUESTS FOR REVOLVING CREDIT LOANS.

         The Borrowers shall give to the Administrative  Agent written notice in
the form of Exhibit A hereto (or telephonic notice confirmed in a writing in the
form of Exhibit A hereto) of each Revolving  Credit Loan requested  hereunder (a
"Loan Request") not later than 11:00 a.m. (Boston time) (a) one (1) Business Day
prior to the  proposed  Drawdown  Date of any Base  Rate  Loan and (b) three (3)
Eurodollar  Business Days prior to the proposed  Drawdown Date of any Eurodollar
Rate Loan.  Each such  notice  shall  specify  (i) the  principal  amount of the
Revolving  Credit  Loan  requested,  (ii)  the  proposed  Drawdown  Date of such
Revolving  Credit Loan, (iii) the Interest Period for such Revolving Credit Loan
and (iv) the Type of such  Revolving  Credit Loan.  Promptly upon receipt of any
such notice, the Administrative  Agent shall notify each of the Revolving Credit
Lenders  thereof.  Each Loan  Request  shall be  irrevocable  and binding on the
Borrowers and shall  obligate the Borrowers to accept the Revolving  Credit Loan
requested from the Revolving Credit Lenders on the proposed  Drawdown Date. Each
Loan Request shall be in a minimum aggregate amount of $1,000,000 or an integral
multiple of $500,000 in excess thereof.

         2.8. CONVERSION OPTIONS.

                  2.8.1.  CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
         The  Borrowers  may elect from time to time to convert any  outstanding
         Revolving  Credit  Loan to a  Revolving  Credit  Loan of another  Type,
         provided  that (a) with respect to any such  conversion of a Eurodollar
         Rate  Loan  to  a  Base  Rate  Loan,  the  Borrowers   shall  give  the
         Administrative  Agent at least three (3)  Business  Days prior  written
         notice of such election;  (b) with respect to any such  conversion of a
         Base Rate Loan to a Eurodollar  Rate Loan, the Borrowers shall give the
         Administrative  Agent at least four (4) Eurodollar  Business Days prior
         written  notice  of  such  election;  (c)  with  respect  to  any  such
         conversion  of a  Eurodollar  Rate  Loan into a Base  Rate  Loan,  such
         conversion  shall only be made on the last day of the  Interest  Period
         with respect thereto and (d) no Revolving  Credit Loan may be converted
         into a  Eurodollar  Rate Loan when any  Default or Event of Default has
         occurred and is  continuing.  On the date on which such  conversion  is
         being made each  Revolving  Credit  Lender shall take such action as is
         necessary to transfer its Revolving Credit Commitment Percentage to its
         Domestic Lending Office or its Eurodollar  Lending Office,  as the case
         may be. All or any part of  outstanding  Revolving  Credit Loans of any
         Type may be converted  into a Revolving  Credit Loan of another Type as
         provided  herein,  provided that any partial  conversion shall be in an
         aggregate  principal  amount of $1,000,000  or an integral  multiple of
         $500,000 in excess  thereof.  Each Conversion  Request  relating to the
         conversion of a Revolving  Credit Loan to a Eurodollar  Rate Loan shall
         be irrevocable by the Borrowers.

                  2.8.2.  CONTINUATION  OF TYPE OF REVOLVING  CREDIT  LOAN.  Any
         Revolving  Credit  Loan of any Type  may be  continued  as a  Revolving
         Credit Loan of the same Type upon the expiration of an Interest  Period
         with respect  thereto by compliance  by the  Borrowers  with the notice
         provisions contained in ss.2.8.1; provided that no Eurodollar Rate Loan

<PAGE>

                                      -29-

         may be  continued  as such when any  Default  or Event of  Default  has
         occurred and is continuing,  but shall be automatically  converted to a
         Base Rate Loan on the last day of the first  Interest  Period  relating
         thereto  ending  during  the  continuance  of any  Default  or Event of
         Default of which officers of the  Administrative  Agent active upon the
         Borrowers'  account  have  actual  knowledge.  In the  event  that  the
         Borrowers  fail  to  provide  any  such  notice  with  respect  to  the
         continuation  of any Eurodollar Rate Loan as such, then such Eurodollar
         Rate Loan shall be  automatically  converted to a Base Rate Loan on the
         last  day  of  the  first  Interest   Period  relating   thereto.   The
         Administrative Agent shall notify the Revolving Credit Lenders promptly
         when any such  automatic  conversion  contemplated  by this  ss.2.8  is
         scheduled to occur.

                  2.8.3.  EURODOLLAR  RATE  LOANS.  Any  conversion  to or  from
         Eurodollar  Rate Loans shall be in such amounts and be made pursuant to
         such  elections so that,  after giving  effect  thereto,  the aggregate
         principal  amount of all Eurodollar Rate Loans having the same Interest
         Period  shall not be less than  $1,000,000  or an integral  multiple of
         $500,000  in excess  thereof.  No more than eight (8)  Eurodollar  Rate
         Loans  (whether  Revolving  Credit Loans or a portion of the Term Loan)
         having different Interest Periods may be outstanding at any time.

         2.9. FUNDS FOR REVOLVING CREDIT LOANS.

                  2.9.1.  FUNDING  PROCEDURES.  Not later than 1:00 p.m. (Boston
         time) on the proposed Drawdown Date of any Revolving Credit Loans, each
         of  the   Revolving   Credit   Lenders  will  make   available  to  the
         Administrative   Agent,  at  the  Administrative   Agent's  Office,  in
         immediately  available  funds,  the  amount  of such  Revolving  Credit
         Lender's  Revolving Credit  Commitment  Percentage of the amount of the
         requested  Revolving  Credit  Loans.  Upon receipt from each  Revolving
         Credit  Lender  of such  amount,  and  upon  receipt  of the  documents
         required  by  ss.ss.11  and  12  and  the  satisfaction  of  the  other
         conditions  set  forth   therein,   to  the  extent   applicable,   the
         Administrative Agent will make available to the Borrowers the aggregate
         amount  of  such   Revolving   Credit  Loans  made   available  to  the
         Administrative  Agent by the Revolving  Credit Lenders.  The failure or
         refusal  of any  Revolving  Credit  Lender  to  make  available  to the
         Administrative  Agent at the  aforesaid  time and place on any Drawdown
         Date the amount of its Revolving  Credit  Commitment  Percentage of the
         requested  Revolving Credit Loans shall not relieve any other Revolving
         Credit Lender from its several  obligation  hereunder to make available
         to the  Administrative  Agent the amount of such other Revolving Credit
         Lender's  Revolving  Credit  Commitment  Percentage  of  any  requested
         Revolving Credit Loans.

                  2.9.2.  ADVANCES BY ADMINISTRATIVE  AGENT. The  Administrative
         Agent may,  unless  notified to the  contrary by any  Revolving  Credit
         Lender  prior to a Drawdown  Date,  assume that such  Revolving  Credit
         Lender has made available to the Administrative  Agent on such Drawdown
         Date the amount of such  Revolving  Credit  Lender's  Revolving  Credit

<PAGE>

                                      -30-

         Commitment  Percentage of the Revolving Credit Loans to be made on such
         Drawdown  Date, and the  Administrative  Agent may (but it shall not be
         required to), in reliance upon such  assumption,  make available to the
         Borrowers a corresponding  amount. If any Revolving Credit Lender makes
         available to the Administrative  Agent such amount on a date after such
         Drawdown  Date,   such  Revolving   Credit  Lender  shall  pay  to  the
         Administrative  Agent on demand an amount  equal to the  product of (a)
         the average computed for the period referred to in clause (c) below, of
         the weighted average interest rate paid by the Administrative Agent for
         federal  funds  acquired by the  Administrative  Agent  during each day
         included in such period,  times (b) the amount of such Revolving Credit
         Lender's  Revolving  Credit  Commitment  Percentage  of such  Revolving
         Credit  Loans,  times (c) a  fraction,  the  numerator  of which is the
         number of days that elapse from and including such Drawdown Date to the
         date on which the amount of such Revolving  Credit  Lender's  Revolving
         Credit  Commitment  Percentage  of such  Revolving  Credit  Loans shall
         become  immediately  available  to the  Administrative  Agent,  and the
         denominator  of which is 360. A statement of the  Administrative  Agent
         submitted to such  Revolving  Credit Lender with respect to any amounts
         owing under this paragraph  shall be prima facie evidence of the amount
         due and  owing to the  Administrative  Agent by such  Revolving  Credit
         Lender.  If the  amount of such  Revolving  Credit  Lender's  Revolving
         Credit Commitment Percentage of such Revolving Credit Loans is not made
         available to the  Administrative  Agent by such Revolving Credit Lender
         within  three (3) Business  Days  following  such  Drawdown  Date,  the
         Administrative  Agent shall be entitled to recover such amount from the
         Borrowers  on  demand,  with  interest  thereon  at the rate per  annum
         applicable to the Revolving Credit Loans made on such Drawdown Date.

         2.10. SWING LINE LOANS; SETTLEMENTS.

         (a) Solely for ease of administration of the Revolving Credit Loans and
so long as the  Administrative  Agent has not received a written notice pursuant
to ss.8.5 or ss.14.10 of a Default or Event of Default, the Administrative Agent
may,  upon receipt of a Loan Request  requesting a Swing Line Loan no later than
2:30  p.m.  (Boston  time) on the  proposed  date of  funding,  but shall not be
required to, fund Base Rate Loans made in accordance with the provisions of this
Credit  Agreement  ("Swing Line Loans") for periods not to exceed seven (7) days
in any one case,  bearing interest as set forth in ss.2.6.  The Swing Line Loans
shall be evidenced by a promissory  note of the Borrowers in  substantially  the
form of Exhibit B hereto (the "Swing Line Note")  dated as of the Closing  Date,
and shall each be in a minimum amount of $100,000 or greater;  provided that the
outstanding  amount of Swing Line Loans  advanced  by the  Administrative  Agent
hereunder shall not exceed $20,000,000 at any time. Each Revolving Credit Lender
shall remain  severally  and  unconditionally  liable to fund its pro rata share
(based  upon  each  Revolving  Credit  Lender's   Revolving  Credit   Commitment
Percentage) of such Swing Line Loans on each  Settlement  Date and, in the event
the  Administrative  Agent chooses not to fund all Swing Line Loans requested on
any date, to fund its Revolving  Credit  Commitment  Percentage of the Base Rate

<PAGE>

                                      -31-

Loans  requested,  subject to satisfaction of the provisions  hereof relating to
the  making  of Base Rate  Loans.  Prior to each  Settlement,  all  payments  or
repayments  of the  principal  of, and  interest  on,  Swing Line Loans shall be
credited to the account of the Administrative Agent.

         (b) The Revolving  Credit  Lenders shall effect  Settlements on (i) the
Business Day immediately  following any day which the Administrative Agent gives
written notice to the Revolving Credit Lenders to effect a Settlement,  (ii) the
Business Day immediately following the Administrative  Agent's becoming aware of
the  existence of any Default or Event of Default,  (iii) the  Revolving  Credit
Loan Maturity  Date,  and (iv) in any event,  the seventh day on which any Swing
Line Loan  remains  outstanding  (each  such date,  a  "Settlement  Date").  The
Administrative  Agent  shall  give  telephonic  notice to the  Revolving  Credit
Lenders  one (1)  Business  Day  prior to each such  Settlement  Date of (A) the
respective  outstanding  amount of Revolving Credit Loans made by each Revolving
Credit  Lender as at the close of business on the prior day,  and (B) the amount
that any  Revolving  Credit  Lender (each,  a "Settling  Lender"),  shall pay to
effect a Settlement (a "Settlement  Amount").  A statement of the Administrative
Agent  submitted  to the  Revolving  Credit  Lenders with respect to any amounts
owing hereunder shall be prima facie evidence of the amount due and owing.  Each
Settling Lender shall, not later than 1:00 p.m. (Boston time) on each Settlement
Date,   effect  a  wire  transfer  of   immediately   available   funds  to  the
Administrative Agent at the Administrative  Agent's Office in the amount of such
Revolving Credit Lender's Settlement Amount. All funds advanced by any Revolving
Credit  Lender as a  Settling  Lender  pursuant  to this  ss.2.10  shall for all
purposes be treated as a Base Rate Loan to the Borrowers.

         (c) The  Administrative  Agent may (unless  notified to the contrary by
any Settling  Lender by 12:00 noon  (Boston  time) one (1) Business Day prior to
the  Settlement  Date) assume that each Settling  Lender has made  available (or
will make available by the time  specified in ss.2.10(b)) to the  Administrative
Agent its Settlement Amount, and the Administrative  Agent may (but shall not be
required  to), in reliance  upon such  assumption,  effect  Settlements.  If the
Settlement   Amount  of  such   Settling   Lender  is  made   available  to  the
Administrative  Agent on a date after such Settlement Date, such Settling Lender
shall pay the  Administrative  Agent on demand an amount equal to the product of
(i) the average,  computed for the period  referred to in clause (iii) below, of
the weighted average annual interest rate paid by the  Administrative  Agent for
federal funds acquired by the  Administrative  Agent during each day included in
such period  times (ii) such  Settlement  Amount  times  (iii) a  fraction,  the
numerator  of which is the number of days that  elapse from and  including  such
Settlement  Date to but not including the date on which such  Settlement  Amount
shall  become  immediately  available  to  the  Administrative  Agent,  and  the
denominator  of which is 365. Upon payment of such amount such  Settling  Lender
shall be deemed to have delivered its Settlement  Amount on the Settlement  Date
and shall become  entitled to interest  payable by the Borrowers with respect to
such Settling Lender's  Settlement Amount as if such share were delivered on the
Settlement Date. If such Settlement  Amount is not in fact made available to the
Administrative  Agent by such  Settling  Lender within five (5) Business Days of

<PAGE>

                                      -32-

such Settlement Date, the Administrative Agent shall be entitled to recover such
amount from the Borrowers, with interest thereon at the Base Rate.

         (d) After any  Settlement  Date,  any payment by the Borrowers of Swing
Line Loans  hereunder  shall be allocated  pro rata among the  Revolving  Credit
Lenders in accordance with the Revolving  Credit Lenders'  respective  Revolving
Credit Commitment Percentages.

         (e) If,  prior to the making of a  Revolving  Credit  Loan  pursuant to
paragraph (b) of this ss.2.10, a Default or Event of Default has occurred and is
continuing, each Revolving Credit Lender will, on the date such Revolving Credit
Loan was to have been made, purchase an undivided  participating interest in the
outstanding  Swing  Line  Loans  in an  amount  equal  to its  Revolving  Credit
Commitment Percentage. Each Revolving Credit Lender will immediately transfer to
the  Administrative  Agent, in immediately  available  funds,  the amount of its
participation and upon receipt thereof the Administrative  Agent will deliver to
such  Revolving  Credit  Lender a  participation  certificate  dated the date of
receipt of such funds and in such amount.

         (f) Whenever,  at any time after the Administrative  Agent has received
from any Revolving  Credit Lender such Revolving  Credit Lender's  participating
interest  in  the  Swing  Line  Loans   pursuant   to  clause  (e)  above,   the
Administrative Agent receives any payment on account thereof, the Administrative
Agent will distribute to such Revolving Credit Lender its participating interest
in such amount  (appropriately  adjusted,  in the case of interest payments,  to
reflect  the  period  of  time  during  which  such  Revolving  Credit  Lender's
participating  interest was  outstanding  and funded) in like funds as received;
provided,  however,  that  in  the  event  that  such  payment  received  by the
Administrative  Agent is required to be returned,  such Revolving  Credit Lender
will  return  to  the  Administrative   Agent  any  portion  thereof  previously
distributed by the  Administrative  Agent to it in like funds as such payment is
required to be returned by the Administrative Agent.

         (g) Each Revolving Credit Lender's obligation to purchase participating
interests  pursuant to clause (e) above shall be absolute and  unconditional and
shall not be affected by any circumstance,  including,  without limitation,  (i)
any  set-off,  counterclaim,  recoupment,  defense  or other  right  which  such
Revolving Credit Lender may have against the Administrative Agent, the Borrowers
or  any  other  Person  for  any  reason  whatsoever;  (ii)  the  occurrence  or
continuance  of a Default or Event of Default;  (iii) any adverse  change in the
condition  (financial or  otherwise) of the Borrowers or any other Person;  (iv)
any breach of this Credit  Agreement  by the  Borrowers  or any other  Revolving
Credit  Lender  or the  Administrative  Agent;  or (v) any  other  circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.

         2.11. REPAYMENT OF THE REVOLVING CREDIT LOANS.

                  2.11.1.  MATURITY. The Borrowers jointly and severally promise
         to pay on the  Revolving  Credit Loan  Maturity  Date,  and there shall
         become absolutely due and payable on the Revolving Credit Loan Maturity

<PAGE>

                                      -33-

         Date,  all of the  Revolving  Credit  Loans  outstanding  on such date,
         together with any and all accrued and unpaid interest thereon.

                  2.11.2.  MANDATORY REPAYMENT OF THE REVOLVING CREDIT LOANS. If
         at any time the sum of the outstanding  amount of the Revolving  Credit
         Loans,  the  outstanding  amount of the Swing Line  Loans,  the Maximum
         Drawing  Amount and all Unpaid  Reimbursement  Obligations  exceeds the
         Total  Revolving  Credit  Commitment  at such time,  then the Borrowers
         shall  immediately pay the amount of such excess to the  Administrative
         Agent for the respective  accounts of the Revolving  Credit Lenders for
         application: first, to any Unpaid Reimbursement Obligations; second, to
         the Swing Line Loans, third, to the Revolving Credit Loans; and fourth,
         to  provide  to  the   Administrative   Agent   cash   collateral   for
         Reimbursement  Obligations as  contemplated  by ss.4.2(b) and (c). Each
         payment  of any  Unpaid  Reimbursement  Obligations  or  prepayment  of
         Revolving  Credit Loans shall be allocated  among the Revolving  Credit
         Lenders,  in proportion,  as nearly as  practicable,  their  respective
         Revolving   Credit   Commitment   Percentages  of  such  amount,   with
         adjustments to the extent practicable to equalize any prior payments or
         repayments not exactly in proportion.

                  2.11.3. OPTIONAL PREPAYMENT OF THE REVOLVING CREDIT LOANS. The
         Borrowers  shall  have the  right,  at  their  election,  to repay  the
         outstanding  amount of the  Revolving  Credit  Loans,  as a whole or in
         part, at any time without penalty or premium, provided that any full or
         partial  prepayment of the  outstanding  amount of any Eurodollar  Rate
         Loans  pursuant to this  ss.2.11.3  may be made only on the last day of
         the Interest  Period  relating  thereto.  The Borrowers  shall give the
         Administrative  Agent, no later than 11:00 a.m. (Boston time), at least
         one (1) Business Days prior written  notice of any proposed  prepayment
         pursuant to this ss.2.11.3 of Base Rate Loans, and three (3) Eurodollar
         Business  Days  notice  of any  proposed  prepayment  pursuant  to this
         ss.2.11.3  of  Eurodollar  Rate  Loans,  in each  case  specifying  the
         proposed date of prepayment of Revolving Credit Loans and the principal
         amount to be prepaid.  Each such partial  prepayment  of the  Revolving
         Credit  Loans  (a) shall be in a minimum  amount  of  $1,000,000  or an
         integral  multiple  of  $500,000  in  excess  thereof,   (b)  shall  be
         accompanied by the payment of accrued interest on the principal prepaid
         to the date of prepayment  and (c) shall be applied,  in the absence of
         instruction by the Borrowers, first to the principal of Base Rate Loans
         and then to the  principal  of  Eurodollar  Rate  Loans.  Each  partial
         prepayment  shall be allocated among the Revolving  Credit Lenders,  in
         proportion,  as  nearly  as  practicable,  to  their  Revolving  Credit
         Commitment  Percentages of such amount,  with adjustments to the extent
         practicable to equalize any prior repayments not exactly in proportion.

<PAGE>

                                      -34-

                                3. THE TERM LOAN.
                                   -------------

         3.1. INITIAL FUNDING.  Subject to the terms and conditions set forth in
this Credit  Agreement,  each Term Lender agrees to lend to the Borrowers on the
Closing Date the amount of its Term Loan  Percentage of the principal  amount of
$200,000,000.

         3.2. INCREASE IN TERM LOAN AMOUNT. Unless a Default or Event of Default
has occurred  and is  continuing,  the  Borrowers  may  request,  on one or more
occasions at any time prior to the Term Loan Maturity  Date,  that the Term Loan
Amount in effect on the date of such  request  be  increased  or a new Term Loan
advanced,  in either case, by amounts such that Total  Facility  Amount does not
exceed  $450,000,000;  provided that (i) no existing Term Loan Lender shall have
an obligation to the Borrowers,  the Administrative Agent or any other Lender to
increase  its Term Loan  Amount or its Term Loan  Percentage,  (ii) in the event
that it becomes  necessary  to include  one or more new Term  Lenders to provide
additional  funding  under this ss.3.2 to occur,  such new Term Lenders shall be
acceptable to the Administrative Agent, (iii) such new Term Lender(s) shall have
executed and delivered to the Administrative Agent an instrument of accession in
form and  substance  satisfactory  to the  Administrative  Agent,  (iv) the Term
Lenders'  Term Loan  Percentages  shall be  correspondingly  adjusted,  (v) with
respect to any  increase in the existing  Term Loan,  each new Term Lender shall
make all (if any) such  payments to the other  existing  Term  Lenders as may be
necessary  to result in the Term Loan to be made by such new Term  Lender  being
equal to such new Term Lender's Term Loan Percentage of the aggregate  principal
amount of the Term Loan  outstanding  to the Borrowers as of such date, and (vi)
such other changes shall be made to the Loan Documents, as shall be necessary to
reflect any such increase in the Term Loan Amount. Any such increase in the Term
Loan  Amount  shall  require,  among  other  things,  the  satisfaction  of such
conditions precedent as the Administrative Agent may require, including, without
limitation,  the  Administrative  Agent's  receipt  of  evidence  of  applicable
corporate authorization and other corporate documentation from the Borrowers and
the legal  opinion  of  counsel  to the  Borrowers,  each in form and  substance
satisfactory  to  the  Administrative   Agent  and  such  Term  Lenders  as  are
participating in such increase.

         3.3.  EVIDENCE OF DEBT; THE TERM NOTES.

                  3.3.1.  LOAN  ACCOUNTS.  Each Term  Lender  shall  maintain in
                  accordance  with its usual  practice  an account  or  accounts
                  evidencing  Indebtedness  of the Borrowers to such Term Lender
                  resulting from such Term Lender's Term Loan  Percentage of the
                  Term Loan,  including  the amounts of  principal  and interest
                  payable  and paid to such Term  Lender from time to time under
                  this Credit Agreement. The Administrative Agent shall maintain
                  accounts  in which it shall  record (a) the amount of the Term
                  Loan made hereunder, the Type thereof and each Interest Period
                  applicable  thereto,  (b)  the  amount  of  any  principal  or
                  interest due and payable or to become due and payable from the
                  Borrowers  to each  Term  Lender  hereunder  and (c)  both the

<PAGE>

                                      -35-

                  amount  of  any  sums  received  by the  Administrative  Agent
                  hereunder  for the  account of the Term  Lenders and each Term
                  Lender's share thereof (if any). The entries made by each Term
                  Lender in the accounts  maintained  pursuant to this  ss.3.3.1
                  (or any Term Note  Record  referred  to below)  shall,  to the
                  extent permitted by applicable law, be prima facie evidence of
                  the existence and amounts of the  obligations of the Borrowers
                  therein recorded;  provided,  however, that the failure of any
                  Lender to maintain any such  accounts,  or any error  therein,
                  shall not in any manner affect the obligation of the Borrowers
                  to repay  (with  applicable  interest)  the Term  Loan made in
                  accordance with the terms of this Credit Agreement.

                  3.3.2.  TERM NOTES. The Borrowers agree that, upon the request
                  of any Term Lender,  they shall  execute a promissory  note of
                  the  Borrowers  on terms and  conditions  satisfactory  to the
                  Administrative  Agent,  dated as of the Closing  Date (or such
                  other date on which a Term Lender may become a party hereto in
                  accordance  with ss.15 hereof) and completed with  appropriate
                  insertions.  The Term Note  shall be  payable  to the order of
                  such Term  Lender  in a  principal  amount  equal to such Term
                  Lender's   Term   Loan   Percentage   of  the  Term  Loan  and
                  representing  the  obligation  of the Borrowers to pay to such
                  Term Lender such principal amount or, if less, the outstanding
                  amount of such Term Lender's Term Loan  Percentage of the Term
                  Loan, plus interest accrued  thereon,  as set forth below. The
                  Borrowers  irrevocably  authorize each Term Lender with a Term
                  Note to make or  cause  to be  made a  notation  on such  Term
                  Lender's Term Note Record  reflecting  the original  principal
                  amount of such Term Lender's Term Loan  Percentage of the Term
                  Loan and,  at or about the time of the  receipt of any payment
                  of  principal  on such  Lender's  Term  Note,  an  appropriate
                  notation on such Term Lender's Term Note Record reflecting the
                  receipt of such payment.

         3.4.  SCHEDULE OF  INSTALLMENT  PAYMENTS OF PRINCIPAL OF TERM LOAN. The
Borrowers jointly and severally promise to pay to the  Administrative  Agent for
the account of the Term Lenders,  in accordance with their  respective Term Loan
Percentages, the principal amount of the Term Loan in quarterly installments due
and payable on the last Business day of each calendar quarter, aggregating total
amounts  for the  period  commencing  on  October  1 of each  year  through  and
including September 30 of the following year, according to the table below, with
the balance, if any, due on the Term Loan Maturity Date:

<PAGE>

                                      -36-
<TABLE>
<CAPTION>

        ---------------------------------------------- ----------------------------------------------

                           Period:                                Percentage of Term Loan
        ---------------------------------------------- ----------------------------------------------

         <S>                                                               <C>
         October 1, 2003 through September 30, 2004                        1.0 %
        ---------------------------------------------- ----------------------------------------------

         October 1, 2004 through September 30, 2005                        1.0 %
        ---------------------------------------------- ----------------------------------------------

         October 1, 2005 through September 30, 2006                        1.0 %
        ---------------------------------------------- ----------------------------------------------

         October 1, 2006 through September 30, 2007                        1.0 %
        ---------------------------------------------- ----------------------------------------------

         October 1, 2007 through September 30, 2008                        1.0 %
        ---------------------------------------------- ----------------------------------------------

         October 1, 2008 through September 30, 2009                        1.0 %
        ---------------------------------------------- ----------------------------------------------

         October 1, 2009 through September 30, 2010                        94.0%
        ---------------------------------------------- ----------------------------------------------

</TABLE>

         3.5.  OPTIONAL  PREPAYMENT OF TERM LOAN.  The Borrowers  shall have the
right at any time to prepay  the Term Loan on or before  the Term Loan  Maturity
Date,  as a whole,  or in part,  upon not less than five (5) Business Days prior
written notice to the Administrative Agent, without premium or penalty, provided
that (a) each partial  prepayment shall be in the principal amount of $1,000,000
or an integral  multiple of  $500,000 in excess  thereof,  (b) no portion of the
Term Loan bearing  interest at the  Eurodollar  Rate may be prepaid  pursuant to
this  ss.3.5  except on the last day of the  Interest  Period  relating  thereto
except in  accordance  with  ss.5.9,  and (c) each partial  prepayment  shall be
allocated among the Term Lenders,  in proportion,  as nearly as practicable,  to
the  respective  outstanding  amount  of each  Term  Lender's  Term  Loan,  with
adjustments  to the extent  practicable  to equalize any prior  prepayments  not
exactly  in  proportion.  Any  prepayment  of  principal  of the Term Loan shall
include  all  interest  accrued to the date of  prepayment  and shall be applied
against the  scheduled  installments  of  principal  due on the Term Loan in the
inverse order of maturity. No amount repaid with respect to the Term Loan may be
reborrowed.

         3.6. MANDATORY PREPAYMENTS OF THE TERM LOAN.

                  3.6.1.  ASSET SALES.  In the event any  Borrower  receives Net
         Cash Sales  Proceeds  from any  dispositions  of assets (other than the
         sale,  lease,  license or other  disposition  of assets in the ordinary
         course  of  business  and with  respect  to asset  swaps)  in excess of
         $5,000,000  in the  aggregate  per year,  the  Borrowers  shall  make a

<PAGE>

                                      -37-

         prepayment  of the Term Loan in an amount equal to one hundred  percent
         (100%) of such Net Cash Sales Proceeds.

                  3.6.2.  DEBT ISSUANCE.  In the event any Borrower receives Net
         Cash  Proceeds  from any issuance of  Indebtedness  permitted by ss.9.1
         after the Closing Date (other than Net Cash  Proceeds from the issuance
         of the Series E Convertible  Preferred Stock pursuant to ss.8.20),  the
         Borrowers  shall make a prepayment  of the Term Loan in an amount equal
         to one hundred percent (100%) of such Net Cash Proceeds;  provided that
         the Borrowers may issue Subordinated Debt in an aggregate amount not to
         exceed $100,000,000 without mandatory prepayment of the Term Loan.

                  3.6.3. EQUITY ISSUANCE. In the event any Borrower receives Net
         Cash  Proceeds of any  issuance of equity after the Closing Date (other
         than Net Cash  Proceeds  from the issuance of the Series E  Convertible
         Preferred  Stock  pursuant  to  ss.8.20),  the  Borrowers  shall make a
         prepayment  of the Term Loan in an amount equal to fifty  percent (50%)
         of such Net Cash  Proceeds;  provided  that the Borrowers may issue new
         equity  in an  aggregate  amount  not to  exceed  $100,000,000  without
         mandatory  prepayment of the Term Loan;  and provided  further that the
         Borrowers may issue new equity or a portion thereof (i) as payment in a
         Permitted Acquisition,  (ii) to employees,  consultants or directors in
         accordance with bona fide option plans of which the dollar value of the
         shares  in  such  plans  are  issued  as  payment  in  such   Permitted
         Acquisition,  or  (iii)  to  employees,  consultants  or  directors  in
         connection  with the  exercise  of options  under such bona fide option
         plans, without mandatory prepayment of the Term Loan.

                  3.6.4.  EXCESS OPERATING CASH FLOW. The Borrowers shall make a
         prepayment  of the Term Loan in an amount  equal to the  percentage  of
         Excess  Consolidated  Operating Cash Flow corresponding to the Leverage
         Ratio set forth in the table below:

<TABLE>
<CAPTION>

         -------------------------------------------------- ------------------------------------------------

                          Leverage Ratio                     Percentage of Excess Consolidated Operating
                                                            Cash Flow Required as Mandatory Prepayment of
                                                                               Term Loan
         -------------------------------------------------- ------------------------------------------------

                           <S>                                                    <C>
                           => 3.50:1.00                                           50%
         -------------------------------------------------- ------------------------------------------------

                    =>3.00:1.00 and <3.50:1.00                                    25%
         -------------------------------------------------- ------------------------------------------------

                            <3.00:1.00                                            0%
         -------------------------------------------------- ------------------------------------------------

</TABLE>

                  3.6.5.  PAYMENT  PROVISIONS.  Each prepayment of the Term Loan
         required by this ss.3.6  shall be  allocated  among the Term Lenders in
         accordance with their respective Term Loan Percentages.  Any prepayment
         of principal of the Term Loan shall include all interest accrued to the

<PAGE>

                                      -38-

         date  of  prepayment  and  shall  be  applied   against  the  scheduled
         installments  of principal due on the Term Loan in the inverse order of
         maturity.  No  amount  repaid  with  respect  to the  Term  Loan may be
         reborrowed.  Any Term Lender may decline to accept any  payments due to
         such Term Lender  pursuant to this ss.3.6,  in which case such payments
         shall be used to repay the Revolving  Credit Loans;  provided that such
         payments shall not reduce the Total Revolving Credit Commitment.

         3.7. INTEREST ON TERM LOAN.

                  3.7.1.   INTEREST  RATES.  Except  as  otherwise  provided  in
         ss.5.10,  the Term Loan shall bear interest during each Interest Period
         relating to all or any portion of the Term Loan at the following rates:

                           (a) To the extent that all or any portion of the Term
                  Loan bears  interest  during such Interest  Period at the Base
                  Rate, the Term Loan or such portion shall bear interest during
                  such  Interest  Period at the rate per annum equal to the Base
                  Rate plus the  Applicable  Margin  with  respect  to Base Rate
                  Loans as in effect from time to time.

                           (b) To the extent that all or any portion of the Term
                  Loan  bears  interest  during  such  Interest  Period  at  the
                  Eurodollar  Rate,  the Term Loan or such  portion  shall  bear
                  interest  during  such  Interest  Period at the rate per annum
                  equal to the  Eurodollar  Rate  determined  for such  Interest
                  Period plus the  Applicable  Margin with respect to Eurodollar
                  Rate Loans as in effect from time to time.

         The Borrowers jointly and severally promise to pay interest on the Term
         Loan or any portion thereof  outstanding during each Interest Period in
         arrears on each  Interest  Payment  Date  applicable  to such  Interest
         Period.

                  3.7.2.  NOTIFICATION BY BORROWERS.  The Borrowers shall notify
         the Administrative Agent, such notice to be irrevocable, at least three
         (3)  Eurodollar  Business  Days prior to the Drawdown  Date of the Term
         Loan if all or any portion of the Term Loan is to bear  interest at the
         Eurodollar  Rate. After the Term Loan have been made, the provisions of
         ss.2.8 shall apply mutatis  mutandis with respect to all or any portion
         of the Term Loan so that the  Borrowers may have the same interest rate
         options  with  respect  to all or any  portion of the Term Loan as they
         would be entitled to with respect to the Revolving Credit Loans.

                  3.7.3.  AMOUNTS,  ETC.  Any  portion of the Term Loan  bearing
         interest at the Eurodollar  Rate relating to any Interest  Period shall
         be in the amount of $1,000,000  or an integral  multiple of $500,000 in
         excess  thereof.  No Interest  Period  relating to the Term Loan or any
         portion  thereof  bearing  interest at the Eurodollar Rate shall extend
         beyond the date on which a regularly  scheduled  installment payment of
         the  principal  of the Term Loan is to be made  unless a portion of the

<PAGE>

                                      -36-

         Term Loan at least  equal to such  installment  payment has an Interest
         Period  ending on such  date or is then  bearing  interest  at the Base
         Rate.

                              4. LETTERS OF CREDIT.
                                 -----------------

         4.1. LETTER OF CREDIT COMMITMENTS.

                  4.1.1.  COMMITMENT TO ISSUE LETTERS OF CREDIT.  Subject to the
         terms and  conditions  hereof and the  execution  and  delivery  by the
         Borrowers  of a letter  of  credit  application  on the  Administrative
         Agent's  customary  form  (a  "Letter  of  Credit  Application"),   the
         Administrative  Agent on behalf of the Revolving  Credit Lenders and in
         reliance upon the agreement of the Revolving  Credit  Lenders set forth
         in  ss.4.1.4  and  upon  the  representations  and  warranties  of  the
         Borrowers  contained  herein,  agrees, in its individual  capacity,  to
         issue,  extend and renew for the account of the  Borrowers  one or more
         standby  letters  of credit  (including,  in the case of L/C  Supported
         IRBs,  so-called direct pay letters of credit, "IRB Letters of Credit")
         (collectively,  the  "Letters  of  Credit"),  in  such  form  as may be
         requested  from  time to time by the  Borrowers  and  agreed  to by the
         Administrative Agent;  provided,  however, that, after giving effect to
         such request,  (a) the sum of the aggregate  Maximum Drawing Amount and
         all Unpaid  Reimbursement  Obligations shall not exceed  $80,000,000 at
         any one time, and (b) the sum of (i) the Maximum  Drawing Amount on all
         Letters of Credit, (ii) all Unpaid Reimbursement Obligations, (iii) the
         amount of all Revolving Credit Loans outstanding and (iv) the amount of
         all  outstanding  Swing Line Loans shall not exceed the Total Revolving
         Credit  Commitment  at such  time.  The  letters  of  credit  listed on
         Schedule  4.1.1  issued by the  issuing  bank  under  the Prior  Credit
         Agreement shall be Letters of Credit under this Credit Agreement.  This
         Credit Agreement shall be the "Reimbursement  Agreement" referred to in
         the L/C Supported IRBs.

                  4.1.2.  LETTER OF CREDIT  APPLICATIONS.  Each Letter of Credit
         Application   shall   be   completed   to  the   satisfaction   of  the
         Administrative  Agent. In the event that any provision of any Letter of
         Credit  Application  shall be  inconsistent  with any provision of this
         Credit  Agreement,  then the provisions of this Credit Agreement shall,
         to the extent of any such inconsistency, govern.

                  4.1.3.  TERMS OF  LETTERS  OF  CREDIT.  Each  Letter of Credit
         issued,  extended  or renewed  hereunder  shall,  among  other  things,
         provide  for the  payment  of sight  drafts for honor  thereunder  when
         presented in accordance with the terms thereof and when  accompanied by
         the  documents  described  therein.  No Letter of Credit  shall have an
         expiry  date later than the  earlier of (i) one (1) year after the date
         of issuance of such Letter of Credit (which may  incorporate  automatic
         renewals  for  periods  of  up to  one  (1)  year,  provided  that  the
         Administrative   Agent  may,  upon  thirty  (30)  days  notice  to  the
         beneficiary  prior to renewal,  cancel such Letter of Credit),  or (ii)
         thirty (30) days prior to the  Revolving  Credit  Maturity  Date.  Each

<PAGE>

                                      -40-

         Letter of Credit so issued, extended or renewed shall be subject to the
         Uniform Customs and Practice for Documentary  Credits (1993  Revision),
         International  Chamber of Commerce Publication No. 500 or any successor
         version  thereto  adopted by the  Administrative  Agent in the ordinary
         course of its  business  as a letter of credit  issuer and in effect at
         the time of issuance of such Letter of Credit (the  "Uniform  Customs")
         the International  Standby Practices (ISP98),  International Chamber of
         Commerce  Publication  No. 590, or any successor code of standby letter
         of credit practices among banks adopted by the Administrative  Agent in
         the  ordinary  course of its  business  as a  standby  letter of credit
         issuer and in effect at the time of issuance of such Letter of Credit.

                  4.1.4.  REIMBURSEMENT OBLIGATIONS OF REVOLVING CREDIT LENDERS.
         Each  Revolving  Credit  Lender  severally  agrees  that  it  shall  be
         absolutely  liable,  without regard to the occurrence of any Default or
         Event of Default or any other condition  precedent  whatsoever,  to the
         extent of such Revolving Credit Lender's  Revolving  Credit  Commitment
         Percentage,  to reimburse  the  Administrative  Agent on demand for the
         amount of each draft paid by the Administrative Agent under each Letter
         of  Credit to the  extent  that such  amount is not  reimbursed  by the
         Borrowers  pursuant to ss.4.2 (such  agreement  for a Revolving  Credit
         Lender being called herein the "Letter of Credit Participation" of such
         Revolving Credit Lender).

                  4.1.5.  PARTICIPATIONS OF REVOLVING CREDIT LENDERS.  Each such
         payment  made by a  Revolving  Credit  Lender  shall be  treated as the
         purchase by such Revolving Credit Lender of a participating interest in
         the Borrowers' Reimbursement Obligation under ss.4.2 in an amount equal
         to such payment. Each Revolving Credit Lender shall share in accordance
         with its participating  interest in any interest which accrues pursuant
         to ss.4.2.

         4.2. REIMBURSEMENT  OBLIGATION OF THE BORROWERS. In order to induce the
Administrative  Agent to issue,  extend and renew each  Letter of Credit and the
Revolving  Credit Lenders to participate  therein,  the Borrowers hereby jointly
and severally  agree to reimburse or pay to the  Administrative  Agent,  for the
account of the Administrative Agent or (as the case may be) the Revolving Credit
Lenders,  with respect to each Letter of Credit  issued,  extended or renewed by
the Administrative Agent hereunder,

                  (a) except as otherwise  expressly  provided in ss.4.2(b)  and
         (c), on each date that any draft  presented under such Letter of Credit
         is honored by the  Administrative  Agent, or the  Administrative  Agent
         otherwise makes a payment with respect thereto,  (i) the amount paid by
         the  Administrative  Agent  under or with  respect  to such  Letter  of
         Credit,  and (ii) the amount of any taxes, fees, charges or other costs
         and expenses  whatsoever  incurred by the  Administrative  Agent or any
         Revolving  Credit  Lender in  connection  with any payment  made by the
         Administrative  Agent or any Revolving  Credit  Lender  under,  or with
         respect  to,  such  Letter of Credit;  provided,  however,  that if the

<PAGE>

                                      -41-

         Borrowers do not  reimburse  the  Administrative  Agent on the date the
         Administrative  Agent  makes  payment  with  respect to such  Letter of
         Credit,  such an  amount  shall,  provided  that an  Event  of  Default
         specified in ss.13.1(h) or ss.13.1(i)  has not occurred,  automatically
         become a Loan which is a Base Rate Loan,

                  (b) upon the  reduction  (but not  termination)  of the  Total
         Revolving Credit  Commitment to an amount less than the Maximum Drawing
         Amount, an amount equal to such difference,  which amount shall be held
         by the  Administrative  Agent for the benefit of the  Revolving  Credit
         Lenders  and  the  Administrative  Agent  as  cash  collateral  for all
         Reimbursement Obligations, and

                  (c)  upon  the  termination  of  the  Total  Revolving  Credit
         Commitment,  or the acceleration of the Reimbursement  Obligations with
         respect to all Letters of Credit in  accordance  with ss.13,  an amount
         equal to the then  Maximum  Drawing  Amount on all  Letters  of Credit,
         which amount shall be held by the Administrative  Agent for the benefit
         of the Revolving  Credit Lenders and the  Administrative  Agent as cash
         collateral for all Reimbursement Obligations.

Each  such  payment   shall  be  made  to  the   Administrative   Agent  at  the
Administrative  Agent's Office in immediately  available funds.  Interest on any
and all amounts  remaining unpaid by the Borrowers under this ss.4.2 at any time
from the date such  amounts  become due and  payable  (whether as stated in this
ss.4.2,  by acceleration or otherwise)  until payment in full (whether before or
after  judgment) shall be payable to the  Administrative  Agent on demand at the
rate specified in ss.5.10 for overdue principal on the Revolving Credit Loans.

         4.3.  LETTER OF CREDIT  PAYMENTS.  If any draft shall be  presented  or
other  demand  for  payment  shall be made  under  any  Letter  of  Credit,  the
Administrative  Agent shall  notify the  Borrowers of the date and amount of the
draft  presented  or demand for payment and of the date and time when it expects
to pay such draft or honor such demand for  payment.  If the  Borrowers  fail to
reimburse the  Administrative  Agent as provided in ss.4.2 on or before the date
that such draft is paid or other  payment is made by the  Administrative  Agent,
the Administrative  Agent may at any time thereafter notify the Revolving Credit
Lenders of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m.  (Boston time) on the Business Day next  following the receipt of such
notice,  each Revolving Credit Lender shall make available to the Administrative
Agent, at the  Administrative  Agent's Office,  in immediately  available funds,
such Revolving Credit Lender's  Revolving Credit  Commitment  Percentage of such
Unpaid Reimbursement Obligation, together with an amount equal to the product of
(a) the average, computed for the period referred to in clause (c) below, of the
weighted  average  interest  rate paid by the  Administrative  Agent for federal
funds  acquired by the  Administrative  Agent  during each day  included in such
period,  times (b) the amount equal to such Revolving Credit Lender's  Revolving
Credit Commitment Percentage of such Unpaid Reimbursement Obligation,  times (c)
a fraction,  the  numerator  of which is the number of days that elapse from and

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                                      -42-

including the date the  Administrative  Agent paid the draft presented for honor
or otherwise  made payment to the date on which such Revolving  Credit  Lender's
Revolving Credit Commitment  Percentage of such Unpaid Reimbursement  Obligation
shall  become  immediately  available  to  the  Administrative  Agent,  and  the
denominator of which is 360. The responsibility of the  Administrative  Agent to
the Borrowers and the Revolving  Credit  Lenders shall be only to determine that
the documents  (including  each draft)  delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all material respects
with such Letter of Credit.

         4.4. OBLIGATIONS ABSOLUTE.  The Borrowers'  obligations under this ss.4
shall  be  absolute  and  unconditional  under  any  and all  circumstances  and
irrespective  of the  occurrence  of any  Default  or  Event of  Default  or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrowers may have or have had against the  Administrative  Agent, any
Revolving Credit Lender or any beneficiary of a Letter of Credit.  The Borrowers
further agree with the  Administrative  Agent and the Revolving  Credit  Lenders
that the  Administrative  Agent and the  Revolving  Credit  Lenders shall not be
responsible for, and the Borrowers' Reimbursement Obligations under ss.4.2 shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements  thereon,  even if such documents should in fact prove to
be in any or all respects invalid,  fraudulent or forged, or any dispute between
or among the Borrowers, the beneficiary of any Letter of Credit or any financing
institution  or other party to which any Letter of Credit may be  transferred or
any claims or defenses  whatsoever of the Borrowers  against the  beneficiary of
any Letter of Credit or any such transferee.  The  Administrative  Agent and the
Revolving  Credit  Lenders  shall  not  be  liable  for  any  error,   omission,
interruption  or delay in  transmission,  dispatch or delivery of any message or
advice,  however  transmitted,  in  connection  with any Letter of  Credit.  The
Borrowers agree that any action taken or omitted by the Administrative  Agent or
any Revolving  Credit  Lender under or in connection  with each Letter of Credit
and the related  drafts and documents,  if done in good faith,  shall be binding
upon the  Borrowers  and shall not  result in any  liability  on the part of the
Administrative Agent or any Revolving Credit Lender to the Borrowers.

         4.5.  RELIANCE BY ISSUER.  To the extent not inconsistent  with ss.4.4,
the Administrative Agent shall be entitled to rely, and shall be fully protected
in relying  upon,  any Letter of Credit,  draft,  writing,  resolution,  notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype  message,  statement,  order or  other  document  believed  by it to be
genuine and correct and to have been signed,  sent or made by the proper  Person
or  Persons  and  upon  advice  and  statements  of legal  counsel,  independent
accountants  and  other  experts  selected  by  the  Administrative  Agent.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action  under this Credit  Agreement  unless it shall first have  received  such
advice or concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the Revolving
Credit  Lenders  against any and all liability and expense which may be incurred
by it  by  reason  of  taking  or  continuing  to  take  any  such  action.  The

<PAGE>

                                      -43-

Administrative  Agent  shall in all cases be fully  protected  in acting,  or in
refraining from acting, under this Credit Agreement in accordance with a request
of the Required Lenders, and such request and any action taken or failure to act
pursuant  thereto  shall be binding upon the  Revolving  Credit  Lenders and all
future   holders  of  the  Revolving   Credit  Loans  or  of  Letter  of  Credit
Participations.

         4.6. LETTER OF CREDIT FEE. The Borrowers jointly and severally agree to
pay a fee (in each case, a "Letter of Credit Fee") to the  Administrative  Agent
(a) in respect of each  Financial  Letter of Credit,  in an amount  equal to the
Applicable  Margin per annum with respect to Eurodollar  Rate  Revolving  Credit
Loans of the face amount of such  Financial  Letter of Credit which shall be for
the accounts of the Revolving Credit Lenders in accordance with their respective
Revolving Credit Commitment  Percentages,  plus an amount equal to one-eighth of
one percent  (0.125%) per annum of the face amount of such  Financial  Letter of
Credit which shall be for the account of the Administrative Agent, as a fronting
fee, and (b) in respect of each Performance Letter of Credit, in an amount equal
to fifty  percent  (50%) of the  Applicable  Margin  per annum  with  respect to
Eurodollar  Rate Revolving  Credit Loans of the face amount of such  Performance
Letter of Credit which shall be for the accounts of the Revolving Credit Lenders
in accordance with their  respective  Revolving Credit  Commitment  Percentages,
plus an amount equal to one-eighth of one percent (0.125%) per annum of the face
amount of such  Performance  Letter of Credit  shall be for the  account  of the
Administrative  Agent,  as a fronting  fee.  Such  Letter of Credit Fee shall be
payable  quarterly in arrears on each  calendar  quarter end date  following the
date of issuance,  extension,  amendment or renewal of such Letter of Credit and
on the Revolving Credit Loan Maturity Date. In respect of each Letter of Credit,
the Borrowers shall also pay to the Administrative  Agent for the Administrative
Agent's own account, at such other time or times as such charges are customarily
made by the Administrative Agent, the Administrative Agent's customary issuance,
amendment,  negotiation or document examination and other administrative fees as
in effect from time to time.

                         5. CERTAIN GENERAL PROVISIONS.
                            --------------------------

         5.1. FEES. The Borrowers jointly and severally agree to pay all Fees in
the  amounts  and at the  times  and  otherwise  in  accordance  with the  terms
specified herein or the Loan Documents, as the case may be.

         5.2. FUNDS FOR PAYMENTS.

                  5.2.1.  PAYMENTS  TO  ADMINISTRATIVE  AGENT.  All  payments of
         principal,  interest,  Reimbursement  Obligations,  Fees and any  other
         amounts due hereunder or under any of the other Loan Documents shall be
         made on the due date  thereof to the  Administrative  Agent in Dollars,
         for the  respective  accounts  of the  Lenders  and the  Administrative
         Agent, at the Administrative Agent's Office or at such other place that
         the Administrative Agent may from time to time designate,  in each case
         at or about 11:00 a.m. (Boston, Massachusetts, time or other local time
         at the place of payment) and in immediately  available  funds. Any such
         amounts received by 11:00 a.m.  (Boston,  Massachusetts,  time or other

<PAGE>

                                      -44-

         local time at the place of payment)  shall be  forwarded to the Lenders
         by the close of business on the same day.

                  5.2.2. NO OFFSET, ETC. All payments by the Borrowers hereunder
         and  under  any of the  other  Loan  Documents  shall  be made  without
         recoupment,  setoff or  counterclaim  and free and clear of and without
         deduction  for any  taxes,  levies,  imposts,  duties,  charges,  fees,
         deductions, withholdings,  compulsory loans, restrictions or conditions
         of any nature now or hereafter imposed or levied by any jurisdiction or
         any political  subdivision thereof or taxing or other authority therein
         unless the  Borrowers  are  compelled by law to make such  deduction or
         withholding.  If any such obligation is imposed upon the Borrowers with
         respect to any amount payable by it hereunder or under any of the other
         Loan Documents, the Borrowers will pay to the Administrative Agent, for
         the account of the  Lenders or (as the case may be) the  Administrative
         Agent, on the date on which such amount is due and payable hereunder or
         under such other Loan Document,  such  additional  amount in Dollars as
         shall be necessary to enable the Lenders or the Administrative Agent to
         receive  the same net amount  which the  Lenders or the  Administrative
         Agent would have received on such due date had no such  obligation been
         imposed upon the Borrowers.  The Borrowers will deliver promptly to the
         Administrative Agent certificates or other valid vouchers for all taxes
         or other charges deducted from or paid with respect to payments made by
         the Borrowers hereunder or under such other Loan Document.

                  5.2.3.  NON-U.S.  LENDERS.  Each Lender and the Administrative
         Agent that is not a U.S.  Person as defined in Section  7701(a)(30)  of
         the Code for federal income tax purposes (a "Non-U.S.  Lender")  hereby
         agrees  that,  if and to the  extent  it is  legally  able to do so, it
         shall,  prior  to  the  date  of the  first  payment  by the  Borrowers
         hereunder to be made to such Lender or the Administrative  Agent or for
         such Lender's or the  Administrative  Agent's  account,  deliver to the
         Borrowers  and  the   Administrative   Agent,   as   applicable,   such
         certificates,  documents or other evidence, as and when required by the
         Code or Treasury Regulations issued pursuant thereto,  including (a) in
         the case of a Non-U.S.  Lender that is a "bank" for purposes of Section
         881(c)(3)(A)  of the Code,  two (2) duly  completed  copies of Internal
         Revenue Service Form W-8BEN or Form W-8ECI and any other certificate or
         statement  of  exemption  required  by  Treasury  Regulations,  or  any
         subsequent versions thereof or successors  thereto,  properly completed
         and  duly  executed  by  such  Lender  or  the   Administrative   Agent
         establishing  that with respect to payments of  principal,  interest or
         fees  hereunder  it  is  (i)  not  subject  to  United  States  federal
         withholding  tax under the Code  because  such  payment is  effectively
         connected with the conduct by such Lender or Administrative  Agent of a
         trade or  business  in the  United  States  or (ii)  totally  exempt or
         partially  exempt from United States  federal  withholding  tax under a
         provision of an applicable tax treaty and (b) in the case of a Non-U.S.
         Lender that is not a "bank" for purposes of Section 881(c)(3)(A) of the
         Code, a certificate in form and substance  reasonably  satisfactory  to
         the  Administrative  Agent and the Borrowers and to the effect that (i)
         such  Non-U.S.   Lender  is  not  a  "bank"  for  purposes  of  Section

<PAGE>

                                      -45-

         881(c)(3)(A)  of the Code,  is not subject to regulatory or other legal
         requirements as a bank in any jurisdiction, and has not been treated as
         a bank for  purposes  of any tax,  securities  law or other  filing  or
         submission made to any governmental authority,  any application made to
         a  rating  agency  or  qualification  for any  exemption  from any tax,
         securities  law or  other  legal  requirements,  (ii) is not a ten (10)
         percent  shareholder  for purposes of Section  881(c)(3)(B) of the Code
         and (iii) is not a controlled  foreign  corporation  receiving interest
         from a related person for purposes of Section 881(c)(3)(C) of the Code,
         together with a properly completed Internal Revenue Service Form W-8 or
         W-9,  as  applicable   (or  successor   forms).   Each  Lender  or  the
         Administrative  Agent agrees that it shall,  promptly  upon a change of
         its lending office or the selection of any additional  lending  office,
         to the extent the forms  previously  delivered  by it  pursuant to this
         section are no longer  effective,  and promptly upon the  Borrowers' or
         the  Administrative  Agent's reasonable request after the occurrence of
         any other event  (including the passage of time) requiring the delivery
         of a Form  W-8BEN,  Form  W-8ECI,  Form W-8 or W-9 in addition to or in
         replacement of the forms previously delivered, deliver to the Borrowers
         and the Administrative Agent, as applicable, if and to the extent it is
         properly  entitled to do so, a properly  completed  and  executed  Form
         W-8BEN,  Form W-8ECI,  Form W-8 or W-9, as applicable (or any successor
         forms thereto).

         5.3. COMPUTATIONS.  All computations of interest on Base Rate Loans and
of Fees shall be based on a  365/366-day  year and paid for the actual number of
days elapsed.  All  computations  of interest on Eurodollar  Rate Loans shall be
based on a 360-day year and paid for the actual number of days  elapsed.  Except
as  otherwise  provided in the  definition  of the term  "Interest  Period" with
respect to Eurodollar Rate Loans,  whenever a payment  hereunder or under any of
the other Loan  Documents  becomes due on a day that is not a Business  Day, the
due date for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension.  The outstanding  amount of the
Loans as reflected on the entries made by Revolving  Credit Lenders or Term Loan
Lenders in  accounts  maintained  pursuant  to ss.ss.  2.5.1 and 3.3.1 or to the
extent applicable, Revolving Credit Note Records and the Term Note Records, from
time to time shall be  considered  correct and binding on the  Borrowers  unless
within five (5) Business Days after receipt of any notice by the  Administrative
Agent or any of the Lenders of such outstanding amount, the Administrative Agent
or such Lender shall notify the Borrowers to the contrary.

         5.4. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement  of any Interest  Period  relating to any Eurodollar Rate Loan, the
Administrative Agent shall determine or be notified by the Required Lenders that
(a) adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be applicable to any
Eurodollar  Rate Loan  during any  Interest  Period or (b) the  Eurodollar  Rate
determined or to be determined for such Interest  Period will not adequately and
fairly reflect the cost to the Lenders of making or maintaining their Eurodollar
Rate Loans during such period,  the  Administrative  Agent shall  forthwith give

<PAGE>

                                      -46-

notice of such  determination  (which  shall be  conclusive  and  binding on the
Borrowers and the Lenders) to the  Borrowers and the Lenders.  In such event (i)
any Loan Request or  Conversion  Request with respect to  Eurodollar  Rate Loans
shall be  automatically  withdrawn  and shall be deemed a request  for Base Rate
Loans, (ii) each Eurodollar Rate Loan will automatically, on the last day of the
then current  Interest  Period  relating  thereto,  become a Base Rate Loan, and
(iii) the  obligations  of the  Lenders to make  Eurodollar  Rate Loans shall be
suspended until the Administrative  Agent or the Required Lenders determine that
the circumstances giving rise to such suspension no longer exist,  whereupon the
Administrative  Agent or, as the case may be, the Administrative  Agent upon the
instruction  of the  Required  Lenders,  shall so notify the  Borrowers  and the
Lenders.

         5.5.  ILLEGALITY.  Notwithstanding  any other provisions herein, if any
present or future law, regulation,  treaty or directive or the interpretation or
application  thereof  shall make it unlawful  for any Lender to make or maintain
Eurodollar  Rate  Loans,  such  Lender  shall  forthwith  give  notice  of  such
circumstances  to the  Borrowers  and the other  Lenders and  thereupon  (a) the
commitment  of such Lender to make  Eurodollar  Rate Loans or convert  Base Rate
Loans to  Eurodollar  Rate  Loans  shall  forthwith  be  suspended  and (b) such
Lender's  Revolving  Credit Loans then  outstanding as Eurodollar Rate Loans, if
any, shall be converted automatically to Base Rate Loans on the last day of each
Interest Period  applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The  Borrowers  hereby  jointly and  severally
agree promptly to pay the  Administrative  Agent for the account of such Lender,
upon demand by such Lender,  any additional amounts necessary to compensate such
Lender  for any  costs  incurred  by such  Lender in making  any  conversion  in
accordance  with this  ss.5.5,  including  any  interest or fees payable by such
Lender to  lenders  of funds  obtained  by it in order to make or  maintain  its
Eurodollar Rate Loans hereunder.

         5.6.  ADDITIONAL  COSTS,  ETC. If any present or future applicable law,
which  expression,  as used herein,  includes  statutes,  rules and  regulations
thereunder  and  interpretations  thereof  by  any  competent  court  or by  any
governmental   or  other   regulatory   body  or  official   charged   with  the
administration  or  the   interpretation   thereof  and  requests,   directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the  Administrative  Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:

                  (a) subject any Lender or the Administrative Agent to any tax,
         levy, impost, duty, charge, fee, deduction or withholding of any nature
         with respect to this Credit  Agreement,  the other Loan Documents,  any
         Letters of Credit,  such Lender's  Revolving  Credit  Commitment or the
         Loans (other than taxes based upon or measured by the income or profits
         of such Lender or the Administrative Agent), or

                  (b)  materially  change  the  basis of  taxation  (except  for
         changes in taxes on income or profits) of payments to any Lender of the
         principal of or the interest on any Loans or any other amounts  payable

<PAGE>

                                      -47-

         to any Lender or the  Administrative  Agent under this Credit Agreement
         or any of the other Loan Documents, or

                  (c) impose or increase or render applicable (other than to the
         extent  specifically  provided for elsewhere in this Credit  Agreement)
         any special deposit, reserve,  assessment,  liquidity, capital adequacy
         or other similar requirements  (whether or not having the force of law)
         against  assets held by, or deposits in or for the account of, or Loans
         by, or Letters of Credit issued by, or Revolving  Credit  Commitment of
         an office of any Lender, or

                  (d) impose on any Lender or the Administrative Agent any other
         conditions or requirements with respect to this Credit  Agreement,  the
         other Loan Documents,  any Letters of Credit,  the Loans, such Lender's
         Revolving Credit Commitment,  or any class of loans,  letters of credit
         or  commitments  of which any of the Loans or such  Lender's  Revolving
         Credit  Commitment forms a part, and the result of any of the foregoing
         is

                           (i) to  increase  the cost to any  Lender of  making,
                  funding,  issuing,  renewing,  extending or maintaining any of
                  the Loans or such Lender's  Revolving Credit Commitment or any
                  Letter of Credit, or

                           (ii) to reduce  the  amount of  principal,  interest,
                  Reimbursement  Obligation  or  other  amount  payable  to such
                  Lender or the  Administrative  Agent  hereunder  on account of
                  such  Lender's  Revolving  Credit  Commitment,  any  Letter of
                  Credit or any of the Loans, or

                           (iii) to require  such  Lender or the  Administrative
                  Agent  to make  any  payment  or to  forego  any  interest  or
                  Reimbursement  Obligation or other sum payable hereunder,  the
                  amount of which payment or foregone  interest or Reimbursement
                  Obligation  or other sum is  calculated  by  reference  to the
                  gross amount of any sum receivable or deemed  received by such
                  Lender  or  the   Administrative   Agent  from  the  Borrowers
                  hereunder,

then, and in each such case, the Borrowers will, upon demand made by such Lender
or (as the case may be) the  Administrative  Agent at any time and from  time to
time and as often as the occasion  therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the  Administrative  Agent for such additional  cost,  reduction,
payment or foregone interest or Reimbursement Obligation or other sum.

         5.7.  CAPITAL  ADEQUACY.  If after the date  hereof  any  Lender or the
Administrative  Agent  determines that (a) the adoption of or change in any law,
governmental rule,  regulation,  policy,  guideline or directive (whether or not
having the force of law) regarding  capital  requirements  for Lenders or Lender
holding companies or any change in the interpretation or application  thereof by
a Governmental  Authority with  appropriate  jurisdiction,  or (b) compliance by

<PAGE>

                                      -48-

such Lender or the  Administrative  Agent or any  corporation  controlling  such
Lender or the Administrative Agent with any law, governmental rule,  regulation,
policy,  guideline or directive  (whether or not having the force of law) of any
such entity regarding capital adequacy, has the effect of reducing the return on
such Lender's or the Administrative Agent's commitment with respect to any Loans
to a level below that which such Lender or the  Administrative  Agent could have
achieved but for such adoption,  change or compliance (taking into consideration
such Lender's or the Administrative  Agent's then existing policies with respect
to capital adequacy and assuming full  utilization of such entity's  capital) by
any  amount  deemed by such  Lender  or (as the case may be) the  Administrative
Agent to be material,  then such Lender or the  Administrative  Agent may notify
the Borrowers of such fact.  To the extent that the amount of such  reduction in
the return on capital is not reflected in the Base Rate,  the Borrowers  jointly
and  severally   agree  to  pay  such  Lender  or  (as  the  case  may  be)  the
Administrative  Agent for the amount of such  reduction in the return on capital
as and when such reduction is determined upon presentation by such Lender or (as
the case may be) the  Administrative  Agent of a certificate in accordance  with
ss.6.9  hereof.  Each  Lender  shall  allocate  such  cost  increases  among its
customers in good faith and on an equitable basis.

         5.8.  CERTIFICATE.  A certificate  setting forth any additional amounts
payable  pursuant to  ss.ss.5.6 or 5.7 and a brief  explanation  of such amounts
which  are due,  submitted  by any  Lender  or the  Administrative  Agent to the
Borrowers, shall be conclusive, absent manifest error, that such amounts are due
and owing.

         5.9. INDEMNITY.  The Borrowers jointly and severally agree to indemnify
each Lender and its  affiliates  and  employees  and to hold each Lender and its
affiliates  and employees  harmless  from and against any loss,  cost or expense
(including loss of anticipated profits) that such Lender may sustain or incur as
a consequence of (a) default by the Borrowers in payment of the principal amount
of or any  interest on any  Eurodollar  Rate Loans as and when due and  payable,
including any such loss or expense arising from interest or fees payable by such
Lender with respect to funds  obtained by it in order to maintain its Eurodollar
Rate Loans,  (b) default by the  Borrowers in making a borrowing  or  conversion
after the  Borrowers  have given (or are deemed to have  given) a Loan  Request,
notice (in the case of all or any portion of the Term Loan pursuant to ss.3.7.2)
or a Conversion  Request relating thereto in accordance with ss.2.7 or ss.2.8 or
ss.3.7 or (c) the making of any payment of a Eurodollar  Rate Loan or the making
of any  conversion of any such Loan to a Base Rate Loan on a day that is not the
last day of the  applicable  Interest  Period with  respect  thereto,  including
interest or fees  payable by such  Lender to lenders of funds  obtained by it in
order to maintain any such Loans.

         5.10. DEFAULT INTEREST.

         Overdue  principal  and (to the extent  permitted  by  applicable  law)
interest on the Loans and all other overdue amounts  payable  hereunder or under
any of the other Loan  Documents  shall bear  interest  compounded  monthly  and
payable on demand at a rate per annum equal to two  percent  (2%) above the rate
of  interest  then  applicable  thereto  (or,  if no  rate of  interest  is then

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                                      -49-

applicable  thereto,  the Base  Rate)  until such  amount  shall be paid in full
(after as well as before judgment).

         5.11. CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.

         (a) Each of the Borrowers  accepts joint and several  liability for the
Obligations of all of the Borrowers hereunder and under the other Loan Documents
in  consideration  of  the  financial  accommodations  to  be  provided  by  the
Administrative Agent and the Lenders under this Credit Agreement, for the mutual
benefit,  directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of each other Borrower to accept joint and several liability
for the Obligations.

         (b) Each of the Borrowers,  jointly and severally,  hereby  irrevocably
and  unconditionally  accepts,  not merely as a surety but also as a  co-debtor,
joint and several liability with the other Borrowers with respect to the payment
and performance of all of the Obligations  (including,  without limitation,  any
Obligations  arising under this ss.5.11),  it being the intention of the parties
hereto that all of the Obligations shall be the joint and several Obligations of
each of the Borrowers without preferences or distinction among them.

         (c) If and to the extent that any of the  Borrowers  shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance  with the terms thereof,  then in each such
event the other  Borrowers  will make such  payment with respect to, or perform,
such Obligation.

         (d) The  Obligations  of each of the Borrowers  under the provisions of
this ss.5.11  constitute  full  recourse  Obligations  of each of the  Borrowers
enforceable  against each such Borrower to the full extent of its properties and
assets,  irrespective  of the  validity,  regularity or  enforceability  of this
Credit Agreement or any other circumstance whatsoever.

         (e) Except as otherwise  expressly  provided in this Credit  Agreement,
each of the Borrowers, to the fullest extent permitted by applicable law, hereby
waives notice of acceptance  of its joint and several  liability,  notice of any
Loans made under this Credit  Agreement,  notice of any action at any time taken
or omitted by the Administrative Agent or the Lenders under or in respect of any
of the Obligations,  and, generally,  to the extent permitted by applicable law,
all demands, notices and other formalities of every kind in connection with this
Credit  Agreement.  Each of the Borrowers,  to the fullest  extent  permitted by
applicable  law,  hereby waives all defenses which may be available by virtue of
any  valuation,  stay,  moratorium  law or other similar law now or hereafter in
effect,  any right to require the  marshaling of assets of the Borrowers and any
other  Person  primarily  or  secondarily  liable  with  respect  to  any of the
Obligations and all suretyship defenses generally. Each of the Borrowers, to the
fullest extent permitted by applicable law, hereby assents to, and waives notice
of, any  extension  or  postponement  of the time for the  payment of any of the
Obligations,  the  acceptance  of any  payment  of any of the  Obligations,  the

<PAGE>

                                      -50-

acceptance of any partial payment thereon,  any waiver,  consent or other action
or acquiescence by the Lenders at any time or times in respect of any default by
any of the Borrowers in the performance or  satisfaction of any term,  covenant,
condition or provision of this Credit  Agreement,  any and all other indulgences
whatsoever by the Lenders in respect of any of the Obligations,  and the taking,
addition, substitution or release, in whole or in part, at any time or times, of
any  security  for  any of the  Obligations  or the  addition,  substitution  or
release,  in whole or in part,  of any of the  Borrowers.  Without  limiting the
generality of the foregoing,  each of the Borrowers  assents to any other action
or delay in acting or failure to act on the part of the Lenders  with respect to
the  failure  by any of the  Borrowers  to  comply  with  any of its  respective
Obligations,  including,  without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply  fully with  applicable
laws or  regulations  thereunder,  which might,  but for the  provisions of this
ss.5.11,  afford  grounds for  terminating,  discharging or relieving any of the
Borrowers,  in whole or in part, from any of its Obligations under this ss.5.11,
it being the  intention  of each of the  Borrowers  that,  so long as any of the
Obligations  hereunder  remain  unsatisfied,  the  Obligations of such Borrowers
under this ss.5.11 shall not be discharged  except by performance  and then only
to the extent of such  performance.  The  Obligations  of each of the  Borrowers
under this ss.5.11  shall not be  diminished  or rendered  unenforceable  by any
winding up, reorganization, arrangement, liquidation, re-construction or similar
proceeding with respect to any of the Borrowers, the Administrative Agent or the
Lenders.  The joint and  several  liability  of the  Borrowers  hereunder  shall
continue  in full  force and  effect  notwithstanding  any  absorption,  merger,
amalgamation   or  any  other  change   whatsoever  in  the  name,   membership,
constitution or place of formation of any of the Borrowers,  the  Administrative
Agent or the Lenders.

         (f) To the extent any Borrower  makes a payment  hereunder in excess of
the aggregate  amount of the benefit received by such Borrower in respect of the
extensions of credit under the Credit  Agreement  (the "Benefit  Amount"),  then
such  Borrower,  after the payment in full, in cash, of all of the  Obligations,
shall be entitled to recover from each other Borrower such excess  payment,  pro
rata, in accordance  with the ratio of the Benefit Amount  received by each such
other  Borrower to the total Benefit Amount  received by all Borrowers,  and the
right to such  recovery  shall be  deemed to be an asset  and  property  of such
Borrower so funding;  provided, that each of the Borrowers hereby agrees that it
will not enforce any of its rights of  contribution  or subrogation  against the
other Borrowers with respect to any liability  incurred by it hereunder or under
any of the other Loan  Documents,  any payments made by it to any of the Lenders
or the  Administrative  Agent  with  respect  to any of the  Obligations  or any
collateral security therefor until such time as all of the Obligations have been
irrevocably  paid in full in cash. Any claim which any Borrower may have against
any  other  Borrower  with  respect  to  any  payments  to  the  Lenders  or the
Administrative  Agent  hereunder  or under any other  Loan  Document  are hereby
expressly made subordinate and junior in right of payment, without limitation as
to any increases in the  Obligations  arising  hereunder or  thereunder,  to the
prior payment in full of the  Obligations  and, in the event of any  insolvency,
bankruptcy,   receivership,   liquidation,   reorganization   or  other  similar
proceeding  under the laws of any  jurisdiction  relating to any  Borrower,  its

<PAGE>

                                      -51-

debts or its assets,  whether  voluntary or  involuntary,  all such  Obligations
shall be paid in full  before any  payment  or  distribution  of any  character,
whether  in cash,  securities  or  other  property,  shall be made to any  other
Borrower therefor.

         (g) Each of the Borrowers hereby agrees that the payment of any amounts
due with respect to the Indebtedness owing by any Borrower to any other Borrower
is hereby  subordinated to the prior payment in full in cash of the Obligations.
Each Borrower hereby agrees that after the occurrence and during the continuance
of any Default or Event of Default,  such Borrower  will not demand,  sue for or
otherwise  attempt to collect any such  Indebtedness of any other Borrower owing
to such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect,  enforce or
receive any amounts in respect of such  Indebtedness  before  payment in full in
cash of the Obligations, such amounts shall be collected,  enforced, received by
such  Borrower as trustee for the  Administrative  Agent and be paid over to the
Administrative  Agent for the pro rata  accounts of the  Lenders (in  accordance
with each such Lender's  Revolving  Credit  Commitment  Percentage and Term Loan
Percentage) to be applied to repay (or be held as security for the repayment of)
the Obligations.

         (h) The  provisions  of this  ss.5.11  are made for the  benefit of the
Administrative  Agent and the Lenders and their successors and assigns,  and may
be  enforced  in good faith by them from time to time  against any or all of the
Borrowers as often as the occasion therefor may arise and without requirement on
the part of the  Administrative  Agent or the  Lenders  first to marshal  any of
their claims or to exercise any of their rights against any other Borrower or to
exhaust any remedies  available to them against any other  Borrower or to resort
to any other  source or means of  obtaining  payment  of any of the  Obligations
hereunder or to elect any other  remedy.  The  provisions  of this ss.5.11 shall
remain in effect  until all of the  Obligations  shall have been paid in full or
otherwise  fully  satisfied.  If at any time, any payment,  or any part thereof,
made in respect of any of the  Obligations,  is rescinded  or must  otherwise be
restored  or  returned  by the  Administrative  Agent  or the  Lenders  upon the
insolvency, bankruptcy or reorganization of any of the Borrowers or is repaid in
good faith settlement of a pending or threatened  avoidance claim, or otherwise,
the provisions of this ss.5.11 will forthwith be reinstated in effect, as though
such payment had not been made.

         (i) It is the  intention and agreement of the Borrowers and the Lenders
that the obligations of the Borrowers under this Credit Agreement shall be valid
and  enforceable  against the  Borrowers  to the  maximum  extent  permitted  by
applicable law. Accordingly,  if any provision of this Credit Agreement creating
any  obligation of the Borrowers in favor of the Lenders shall be declared to be
invalid  or  unenforceable  in any  respect or to any  extent,  it is the stated
intention and agreement of the Borrowers and the Lenders that any balance of the
obligation  created by such provision and all other obligations of the Borrowers
to the Lenders created by other provisions of this Credit Agreement shall remain
valid  and  enforceable.  Likewise,  if by  final  order  a court  of  competent
jurisdiction  shall declare any sums which the Lenders may be otherwise entitled
to collect  from the  Borrowers  under this Credit  Agreement to be in excess of

<PAGE>

                                      -52-

those  permitted  under  any law  (including  any  federal  or state  fraudulent
conveyance  or  like  statute  or  rule of  law)  applicable  to the  Borrowers'
obligations  under  this  Credit  Agreement,  it is  the  stated  intention  and
agreement of the  Borrowers and the Lenders that all sums not in excess of those
permitted  under such  applicable  law shall  remain  fully  collectible  by the
Lenders from the Borrowers.

         SS.5.12.  INTEREST  LIMITATION.  Notwithstanding any other term of this
Credit Agreement or any other document referred to herein, the maximum amount of
interest which may be charged to or collected  from any person liable  hereunder
by any Lender shall be absolutely  limited to, and shall in no event exceed, the
maximum amount of interest  which could  lawfully be charged or collected  under
applicable law (including,  to the extent applicable,  the provisions of Section
5197 of the Revised  Statutes of the United  States of America,  as amended,  12
U.S.C. Section 85, as amended),  so that the maximum of all amounts constituting
interest under applicable law, howsoever computed,  shall never exceed as to any
Person  liable  therefor  such  lawful  maximum,  and any  term  of this  Credit
Agreement, the Letter of Credit Applications,  or any other document referred to
herein or therein  which could be construed as providing  for interest in excess
of such  lawful  maximum  shall be and hereby is made  expressly  subject to and
modified by the provisions of this paragraph.

                             6. COLLATERAL SECURITY.
                                -------------------

         The Obligations shall be secured by a perfected first priority security
interest  (subject only to Permitted Liens entitled to priority under applicable
law) in all of the assets of the Borrowers  (other than motor  vehicles and real
estate), whether now owned or hereafter acquired, including but not limited to a
pledge of one  hundred  percent  (100%) of the equity  interests  (or 65% of the
equity  interests in the case of a foreign  Subsidiary)  of each of the Parent's
direct  and  indirect  Subsidiaries,  pursuant  to the  terms  of  the  Security
Documents to which the  Borrowers are a party.  The Borrowers  hereby agree that
upon notice from the Administrative Agent and the Required Lenders,  they shall,
as promptly as  practicable,  but in any event within  sixty (60) days,  deliver
titles to motor  vehicles and  mortgages on Real Estate and  environmental  site
assessments  for  mortgaged  Real  Estate  and take such  other  steps as may be
reasonably  requested  (including,  without  limitation,  the  delivery of legal
opinions and title insurance) so as to provide the Lenders with a first priority
security interest in such assets.

                       7. REPRESENTATIONS AND WARRANTIES.
                          ------------------------------

         The   Borrowers   represent   and   warrant  to  the  Lenders  and  the
Administrative Agent as follows:

         7.1. CORPORATE AUTHORITY.

<PAGE>

                                      -53-

                  7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrowers (a)
         is a corporation (or similar business  entity) duly organized,  validly
         existing and in good  standing  under the laws of its  jurisdiction  of
         incorporation  or formation,  (b) has all  requisite  corporate (or the
         equivalent  company) power to own its property and conduct its business
         as now  conducted  and as  presently  contemplated,  and (c) is in good
         standing as a foreign  corporation (or similar  business entity) and is
         duly  authorized  to  do  business  in  each  jurisdiction  where  such
         qualification  is  necessary  except where a failure to be so qualified
         would not have a Material Adverse Effect.

                  7.1.2. AUTHORIZATION.  The execution, delivery and performance
         of this  Credit  Agreement  and the other Loan  Documents  to which any
         Borrower is or is to become a party and the  transactions  contemplated
         hereby and  thereby  (a) are within the  corporate  (or the  equivalent
         company) authority of such Person, (b) have been duly authorized by all
         necessary corporate (or the equivalent company) proceedings, (c) do not
         and will not conflict with or result in any breach or  contravention of
         any  provision  of  law,  statute,  rule or  regulation  to  which  any
         Borrowers is subject or any judgment, order, writ, injunction,  license
         or permit  applicable to such Borrower and (d) do not conflict with any
         provision  of the  Governing  Documents  of, or any  agreement or other
         instrument binding upon, such Borrower.

                  7.1.3.  ENFORCEABILITY.  The  execution  and  delivery of this
         Credit  Agreement and the other Loan Documents to which any Borrower is
         or is to  become a party  will  result  in valid  and  legally  binding
         obligations of such Person  enforceable  against it in accordance  with
         the  respective  terms and  provisions  hereof and  thereof,  except as
         enforceability  is limited by bankruptcy,  insolvency,  reorganization,
         moratorium  or  other  laws  relating  to or  affecting  generally  the
         enforcement  of  creditors'  rights  and  except  to  the  extent  that
         availability of the remedy of specific performance or injunctive relief
         is subject to the  discretion of the court before which any  proceeding
         therefor may be brought.

         7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrowers of this Credit Agreement and the other Loan Documents to which any
Borrower is or is to become a party and the transactions contemplated hereby and
thereby  do not  require  the  approval  or  consent  of,  or filing  with,  any
governmental agency or authority other than those already obtained.

         7.3. TITLE TO PROPERTIES;  LEASES.  Except as indicated on Schedule 7.3
hereto,  the  Borrowers  own all of the  assets  reflected  in the  consolidated
balance sheet of the Borrowers as at the Interim  Balance Sheet Date or acquired
since that date (except property and assets sold or otherwise disposed of in the
ordinary  course of  business  since  that  date),  subject to no Liens or other
rights of others, except Permitted Liens.

         7.4. FINANCIAL STATEMENTS AND PROJECTIONS.

<PAGE>

                                      -54-

                  7.4.1.  FISCAL YEAR.  Each of the  Borrowers has a fiscal year
         which is the twelve (12) months  ending on December 31 of each calendar
         year.

                  7.4.2. FINANCIAL STATEMENTS.  There has been furnished to each
         of the Lenders (a)  consolidated  balance sheets of the Borrowers as at
         the  Balance  Sheet  Date  and the  Interim  Balance  Sheet  Date,  (b)
         consolidated  statements of income of the Borrowers for the fiscal year
         2002 and for the fiscal  quarters  ending  March 31,  2003 and June 30,
         2003 and (c) balance  sheet and  statement of income of Seneca  Meadows
         for the year ended  December  31, 2002,  certified by the  Accountants.
         Such  balance  sheets and  statements  of income have been  prepared in
         accordance with GAAP and fairly present the financial  condition of the
         Borrowers  as at the  close of  business  on the date  thereof  and the
         results of  operations  for the fiscal  year then  ended.  There are no
         contingent  liabilities  of any  Borrower  as of  such  date  involving
         material  amounts,  known to the officers of such Borrower,  which were
         not disclosed in such balance sheet and the notes related thereto.

                  7.4.3.  SOLVENCY.  The Borrowers (both before and after giving
         effect  to the  transactions  contemplated  by this  Credit  Agreement,
         including the Seneca Meadows Acquisition) are and will be solvent (i.e.
         they have assets  having a fair value in excess of the amount  required
         to pay  their  probable  liabilities  on their  existing  debts as they
         become  absolute and matured) and have, and expect to have, the ability
         to pay their debts from time to time incurred in  connection  therewith
         as such debts mature.

         7.5. NO MATERIAL ADVERSE CHANGES,  ETC. Since the Interim Balance Sheet
Date  there has been no event or  occurrence  which has had a  Material  Adverse
Effect.  Since  the  Interim  Balance  Sheet  Date,  no  Borrower  has  made any
Distribution.

         7.6.  FRANCHISES,  PATENTS,  COPYRIGHTS,  ETC.  Each  of the  Borrowers
possesses all franchises, patents, copyrights, trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for the conduct of
its business  substantially  as now conducted  without  known  conflict with any
rights of others.

         7.7. LITIGATION.  Except as set forth in Schedule 7.7 hereto, there are
no  actions,  suits,  proceedings  or  investigations  of any  kind  pending  or
threatened against the Borrowers before any Governmental Authority, that, (a) if
adversely determined,  might, either in any case or in the aggregate, (i) have a
Material  Adverse Effect or (ii)  materially  impair the right of the Borrowers,
considered as a whole,  to carry on business  substantially  as now conducted by
them,  or  result  in  any  substantial  liability  not  adequately  covered  by
insurance, or for which adequate reserves are not maintained on the consolidated
balance  sheet of the  Borrowers,  or (b) which  question  the  validity of this
Credit  Agreement or any of the other Loan Documents,  or any action taken or to
be taken pursuant hereto or thereto.

         7.8. NO  MATERIALLY  ADVERSE  CONTRACTS,  ETC. None of the Borrowers is
subject to any Governing Document or other legal  restriction,  or any judgment,
decree,  order, law, statute,  rule or regulation that has or is expected in the

<PAGE>

                                      -55-

future to have a Material  Adverse  Effect.  None of the Borrowers is a party to
any  contract  or  agreement  that has or is  expected,  in the  judgment of the
Borrowers' officers, to have any Material Adverse Effect.

         7.9.  COMPLIANCE  WITH  OTHER  INSTRUMENTS,  LAWS,  ETC.  None  of  the
Borrowers is in violation of any  provision of its Governing  Documents,  or any
agreement or  instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment,  statute,  license, rule
or  regulation,  in any of the foregoing  cases in a manner that could result in
the imposition of substantial penalties or have a Material Adverse Effect.

         7.10.  TAX STATUS.  The  Borrowers  (a) have made or filed all federal,
state and foreign  income and all other tax  returns,  reports and  declarations
required by any jurisdiction to which any of them is subject,  (b) have paid all
taxes and other  governmental  assessments and charges shown or determined to be
due on such returns,  reports and declarations,  except those being contested in
good faith and by appropriate  proceedings and (c) have set aside on their books
provisions  reasonably  adequate  for  the  payment  of all  taxes  for  periods
subsequent to the periods to which such returns,  reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and none of the officers of the Borrowers know of
any basis for any such claim.  Unless  otherwise  disclosed in  accordance  with
ss.8.5.5,  the  Borrowers  do not intend to treat the  Loans,  Letters of Credit
and/or  related  transactions  hereunder  as  being a  "reportable  transaction"
(within the meaning of Treasury Regulation Section 1.6011-4).

         7.11. NO EVENT OF DEFAULT.  No Default or Event of Default has occurred
and is continuing.

         7.12.  HOLDING  COMPANY  AND  INVESTMENT  COMPANY  ACTS.  None  of  the
Borrowers  is a  "holding  company",  or a  "subsidiary  company"  of a "holding
company", or an "affiliate" of a "holding company", as such terms are defined in
the  Public  Utility  Holding  Company  Act of  1935;  nor is it an  "investment
company",  or  an  "affiliated  company"  or a  "principal  underwriter"  of  an
"investment company", as such terms are defined in the Investment Company Act of
1940.

         7.13.  ABSENCE OF  FINANCING  STATEMENTS,  ETC.  Except with respect to
Permitted Liens, there is no financing  statement,  security agreement,  chattel
mortgage,  real estate  mortgage or other  document  filed or recorded  with any
filing records,  registry or other public office, that purports to cover, affect
or give notice of any present or possible  future Lien on any assets or property
of the Borrowers or any rights relating thereto.

         7.14.  PERFECTION  OF  SECURITY  INTEREST.  All  filings,  assignments,
pledges and deposits of documents  or  instruments  have been made and all other
actions have been taken that are necessary or advisable,  under  applicable law,
to establish and perfect the  Administrative  Agent's  security  interest in the
Collateral. The Collateral and the Administrative Agent's rights with respect to

<PAGE>

                                      -56-

the  Collateral  are not subject to any setoff,  claims,  withholdings  or other
defenses.  The  Borrowers are the owners of the  Collateral  free from any Lien,
except for Permitted Liens.

         7.15. CERTAIN TRANSACTIONS. Except as set forth on Schedule 7.15 hereto
and for arm's length transactions  pursuant to which any Borrower makes payments
in the  ordinary  course of  business  upon  terms no less  favorable  than such
Borrower could obtain from third parties,  none of the officers,  directors,  or
employees  of such  Borrower is presently a party to any  transaction  with such
Borrower  (other  than for  services  as  employees,  officers  and  directors),
including  any  contract,  agreement  or  other  arrangement  providing  for the
furnishing  of  services  to or by,  providing  for  rental of real or  personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director  or  such  employee  or,  to  the  knowledge  of  such  Borrower,   any
corporation,  partnership, trust or other entity in which any officer, director,
or any such  employee  has a  substantial  interest or is an officer,  director,
trustee or partner.

         7.16. EMPLOYEE BENEFIT PLANS.

                  7.16.1.  IN  GENERAL.  Each  Employee  Benefit  Plan  and each
         Guaranteed  Pension Plan has been maintained and operated in compliance
         in  all  material  respects  with  the  provisions  of  ERISA  and  all
         Applicable Pension Legislation and, to the extent applicable, the Code,
         including  but not  limited  to the  provisions  thereunder  respecting
         prohibited  transactions  and the  bonding  of  fiduciaries  and  other
         persons  handling  plan  funds as  required  by ss.412  of  ERISA.  The
         Borrowers have  heretofore  delivered to the  Administrative  Agent the
         most recently  completed  annual report,  Form 5500,  with all required
         attachments,  and actuarial  statement  required to be submitted  under
         ss.103(d) of ERISA, with respect to each Guaranteed Pension Plan.

                  7.16.2.  TERMINABILITY  OF WELFARE PLANS. No Employee  Benefit
         Plan,  which is an employee  welfare benefit plan within the meaning of
         ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
         termination  of  employment,  except as  required by Title I, Part 6 of
         ERISA  or the  applicable  state  insurance  laws.  The  Borrowers  may
         terminate each such Plan at any time (or at any time  subsequent to the
         expiration of any applicable bargaining agreement) in the discretion of
         the  Borrowers  without  liability  to any Person other than for claims
         arising prior to termination.

                  7.16.3.  GUARANTEED PENSION PLANS. Each contribution  required
         to be made to a Guaranteed Pension Plan, whether required to be made to
         avoid the incurrence of an accumulated funding  deficiency,  the notice
         or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
         made. No waiver of an  accumulated  funding  deficiency or extension of
         amortization  periods has been received with respect to any  Guaranteed
         Pension  Plan,  and none of the  Borrowers  or any ERISA  Affiliate  is
         obligated to or has posted  security in connection with an amendment to
         a Guaranteed  Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)

<PAGE>

                                      -57-

         of the Code.  No liability to the PBGC (other than  required  insurance
         premiums,  all of  which  have  been  paid)  has been  incurred  by the
         Borrowers or any ERISA Affiliate with respect to any Guaranteed Pension
         Plan and there has not been any ERISA  Reportable  Event (other than an
         ERISA  Reportable  Event as to which the  requirement of 30 days notice
         has been  waived),  or any other event or  condition  which  presents a
         material  risk of  termination  of any  Guaranteed  Pension Plan by the
         PBGC.  Based on the latest  valuation of each  Guaranteed  Pension Plan
         (which in each case  occurred  within twelve months of the date of this
         representation),  and on the actuarial methods and assumptions employed
         for that  valuation,  the  aggregate  benefit  liabilities  of all such
         Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not
         exceed the aggregate value of the assets of all such Guaranteed Pension
         Plans, disregarding for this purpose the benefit liabilities and assets
         of any  Guaranteed  Pension  Plan with  assets  in  excess  of  benefit
         liabilities.

                  7.16.4.  MULTIEMPLOYER  PLANS.  None of the  Borrowers  or any
         ERISA  Affiliate  has  incurred  any  material   liability   (including
         secondary  liability)  to  any  Multiemployer  Plan  as a  result  of a
         complete  or  partial  withdrawal  from such  Multiemployer  Plan under
         ss.4201  of ERISA  or as a  result  of a sale of  assets  described  in
         ss.4204 of ERISA. None of the Borrowers or any ERISA Affiliate has been
         notified that any Multiemployer  Plan is in reorganization or insolvent
         under and  within  the  meaning of ss.4241 or ss.4245 of ERISA or is at
         risk of  entering  reorganization  or becoming  insolvent,  or that any
         Multiemployer  Plan intends to terminate or has been  terminated  under
         ss.4041A of ERISA.

         7.17. USE OF PROCEEDS.

                  7.17.1.  GENERAL.  The  proceeds  of the  Loans  shall be used
         solely  (a) to  refinance  the  Indebtedness  under  the  Prior  Credit
         Agreement;   (b)  to  finance  the  Seneca  Meadows   Acquisition   and
         acquisitions  permitted  pursuant  to  ss.9.5.1;  and (c)  for  capital
         expenditures,  working  capital and  general  corporate  purposes.  The
         Borrowers  will use Letters of Credit  solely for  working  capital and
         general corporate purposes.

                  7.17.2.  REGULATIONS  U AND X. No portion of any Loan is to be
         used, and no portion of any Letter of Credit is to be obtained, for the
         purpose of  purchasing  or carrying  any "margin  security"  or "margin
         stock" as such  terms are used in  Regulations  U and X of the Board of
         Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

                  7.17.3.  INELIGIBLE SECURITIES.  No portion of the proceeds of
         any Loans is to be used,  and no  portion of any Letter of Credit is to
         be  obtained,  for the purpose of  knowingly  purchasing,  or providing
         credit  support  for  the  purchase  of,  during  the  underwriting  or
         placement period or within thirty (30) days thereafter,  any Ineligible
         Securities underwritten or privately placed by a Financial Affiliate.

<PAGE>

                                      -58-

         7.18. ENVIRONMENTAL COMPLIANCE.  The Borrowers have taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and  the   operations   conducted   thereon  and,   based  upon  such   diligent
investigation, has determined that, except as set forth on Schedule 7.18 hereto:

                  (a) none of the  Borrowers or De Minimis  Subsidiaries  or any
         operator of the Real Estate or any operations  thereon is in violation,
         or alleged  violation,  of any judgment,  decree,  order, law, license,
         rule or  regulation  pertaining  to  environmental  matters,  including
         without limitation,  those arising under the Resource  Conservation and
         Recovery  Act  ("RCRA"),  the  Comprehensive   Environmental  Response,
         Compensation  and  Liability  Act of 1980 as  amended  ("CERCLA"),  the
         Superfund  Amendments and  Reauthorization  Act of 1986  ("SARA"),  the
         Federal  Clean  Water  Act,  the  Federal  Clean  Air  Act,  the  Toxic
         Substances  Control Act, or any state,  local or foreign law,  statute,
         regulation,  ordinance,  order or decree relating to health,  safety or
         the environment  (hereinafter  "Environmental  Laws"),  which violation
         would have a Material Adverse Effect;

                  (b) none of the Borrowers  has received  notice from any third
         party including,  without limitation,  any Governmental Authority,  (i)
         that  any  one  of  them  has  been  identified  by the  United  States
         Environmental  Protection  Agency ("EPA") as a potentially  responsible
         party  under  CERCLA  with  respect  to a site  listed on the  National
         Priorities List, 40 C.F.R. Part 300 Appendix B; (ii) that any hazardous
         waste, as defined by 42 U.S.C. ss.6903(5),  any hazardous substances as
         defined by 42 U.S.C.  ss.9601(14),  any  pollutant  or  contaminant  as
         defined  by 42  U.S.C.  ss.9601(33)  and any toxic  substances,  oil or
         hazardous  materials or other chemicals or substances  regulated by any
         Environmental  Laws ("Hazardous  Substances") which any one of them has
         generated,  transported  or  disposed  of has been found at any site at
         which a  Governmental  Authority  has conducted or has ordered that the
         Borrowers conduct a remedial  investigation,  removal or other response
         action pursuant to any Environmental  Law; or (iii) that it is or shall
         be a named party to any claim, action, cause of action,  complaint,  or
         legal  or  administrative  proceeding  (in  each  case,  contingent  or
         otherwise)  arising  out of any  third  party's  incurrence  of  costs,
         expenses,  losses or damages of any kind  whatsoever in connection with
         the release of Hazardous Substances;

                  (c) Except where no Material  Adverse Effect would be created,
         (i) no  portion  of the Real  Estate  has been  used for the  handling,
         processing,  storage or  disposal  of  Hazardous  Substances  except in
         accordance with applicable  Environmental Laws; and no underground tank
         or other  underground  storage  receptacle for Hazardous  Substances is
         located on any  portion of the Real  Estate;  (ii) in the course of any
         activities  conducted by the Borrowers or operators of its  properties,
         no Hazardous  Substances  have been  generated or are being used on the
         Real Estate except in accordance  with applicable  Environmental  Laws;
         (iii) there have been no Releases or  threatened  Releases of Hazardous
         Substances  on, upon,  into or from the  properties  of the  Borrowers,
         which Releases would have a material adverse effect on the value of any

<PAGE>

                                      -59-

         of the Real  Estate  or  adjacent  properties;  (iv) to the best of the
         Borrowers'  knowledge,  there have been no Releases on,  upon,  from or
         into any real property in the vicinity of any of the Real Estate which,
         through soil or groundwater contamination,  may have come to be located
         on, and which would have a material adverse effect on the value of, the
         Real Estate;  and (v) in addition,  any Hazardous  Substances that have
         been generated on any of the Real Estate have been transported  offsite
         only by carriers having an identification  number issued by the EPA (or
         the  equivalent  thereof  in  any  foreign  jurisdiction),  treated  or
         disposed of only by treatment or disposal facilities  maintaining valid
         permits  as  required  under  applicable   Environmental   Laws,  which
         transporters  and  facilities  have  been and  are,  to the best of the
         Borrowers'  knowledge,  operating in  compliance  with such permits and
         applicable Environmental Laws; and

                  (d) none of the  Borrowers  or any of the other Real Estate is
         subject to any applicable  Environmental  Law requiring the performance
         of Hazardous Substances site assessments, or the removal or remediation
         of Hazardous  Substances,  or the giving of notice to any  Governmental
         Authority  or  the  recording  or  delivery  to  other  Persons  of  an
         environmental  disclosure  document  or  statement  by  virtue  of  the
         transactions  set  forth  herein  and  contemplated  hereby,  or  as  a
         condition to the effectiveness of any other  transactions  contemplated
         hereby.

         7.19.  SUBSIDIARIES,  ETC.  Schedule 2 hereto sets forth a complete and
accurate list of the Subsidiaries of the Parent, including the name of each such
Subsidiary and its  jurisdiction of  incorporation,  together with the number of
authorized  and  outstanding  shares of each such  Subsidiary.  Each  Subsidiary
listed on  Schedule 2 is wholly  owned by the Parent or by a  Subsidiary  of the
Parent and is a Borrower  hereunder,  one hundred  percent (100%) of the Capital
Stock  (or in the case of a foreign  Subsidiary,  65% of the  Capital  Stock) of
which has been  pledged  to the  Administrative  Agent on behalf of the  Lenders
pursuant to the Stock Pledge  Agreement,  the Membership Pledge Agreement or the
Pledge Agreement.  Each of the Borrowers has good and marketable title to all of
the shares it purports to own of the Capital Stock of each of its  Subsidiaries,
free and clear in each case of any Lien.  All such Capital  Stock have been duly
issued and are fully paid and  non-assessable.  None of the Borrowers is engaged
in any joint venture or partnership with any other Person.

         7.20.  DISCLOSURE.  Neither this Credit  Agreement nor any of the other
Loan  Documents  contains any untrue  statement  of a material  fact or omits to
state a material  fact (known to the  Borrowers  in the case of any  document or
information not furnished by it or any of its  Subsidiaries)  necessary in order
to make the statements herein or therein not misleading.  There is no fact known
to the Borrowers  which has a Material  Adverse  Effect,  or which is reasonably
likely in the future to have a Material  Adverse  Effect,  exclusive  of effects
resulting  from  changes in general  economic  conditions,  legal  standards  or
regulatory conditions.

         7.21. CAPITALIZATION.

<PAGE>

                                      -60-

         (a) Capital Stock.  As of the date hereof,  (i) the authorized  Capital
Stock of the Parent consists of (A) 4,050,000  shares of common stock (par value
$0.01 per share),  3,600,000  shares of which is Class A voting common stock and
450,000  shares of which is Class B  non-voting  common  stock,  and (B) 252,100
shares of preferred stock; (ii) the issued and outstanding  Capital Stock of the
Parent  consists  of (A)  142,000  shares of Class A voting  common  stock,  (B)
112,981 shares of Class B non-voting common stock, (C) 32,000 shares of Series A
Convertible Preferred Stock, (D) 20,100 shares of Series B Convertible Preferred
Stock,  (E) 55,000 shares of Series C Convertible  Preferred  Stock,  (F) 55,000
shares of Series D Convertible  Preferred Stock, and (G) 55,000 shares of Series
E Convertible Preferred Stock. All such outstanding shares have been duly issued
and are fully paid and non-assessable.

         (b) Options,  Etc.  Except as set forth on Schedule 7.21, no Person has
outstanding  any rights (either  preemptive or otherwise) or options (except for
the options for common stock issued to employees in accordance  with a bona fide
option plan  approved by the Board of Directors of the Parent) to subscribe  for
or purchase from the Borrowers,  or any warrants or other  agreements  providing
for or requiring  the  issuance by the  Borrowers  of, any capital  stock or any
securities convertible into or exchangeable for its capital stock.

         7.22. FOREIGN ASSETS CONTROL  REGULATIONS,  ETC. None of the requesting
or borrowing of the Loans,  the requesting or issuance,  extension or renewal of
any Letters of Credit or the use of the proceeds of any thereof will violate the
Trading With the Enemy Act (50 U.S.C.  ss. 1 et seq.,  as amended) (the "Trading
With the Enemy Act") or any of the foreign  assets  control  regulations  of the
United States  Treasury  Department (31 CFR,  Subtitle B, Chapter V, as amended)
(the  "Foreign  Assets  Control  Regulations")  or any enabling  legislation  or
executive  order  relating  thereto  (which  for the  avoidance  of doubt  shall
include,  but shall not be limited to (a) Executive Order 13224 of September 21,
2001 Blocking  Property and  Prohibiting  Transactions  With Persons Who Commit,
Threaten to Commit,  or Support  Terrorism  (66 Fed.  Reg.  49079  (2001))  (the
"Executive  Order") and (b) the Uniting and  Strengthening  America by Providing
Appropriate  Tools  Required to  Intercept  and Obstruct  Terrorism  Act of 2001
(Public  Law  107-56)).  Furthermore,  neither  the  Borrowers  nor any of their
Subsidiaries  or other  Affiliates  (a) is or will become a "blocked  person" as
described in the Executive  Order, the Trading With the Enemy Act or the Foreign
Assets  Control  Regulations  or (b) engages or will  engage in any  dealings or
transactions, or be otherwise associated, with any such "blocked person".

         7.23. OBLIGATIONS CONSTITUTE "SENIOR INDEBTEDNESS".  The Obligations of
the Borrowers hereunder are and will continue to be "Senior  Indebtedness" under
and as defined in the 2002 Senior Note Indenture.

         7.24. GUARANTEES OF DE MINIMIS SUBSIDIARIES.  Except as permitted under
ss.9.1 and  ss.9.3,  no  Borrower  has  executed  a  guarantee  with  respect to
Indebtedness  incurred by a De Minimis Subsidiary,  and no De Minimis Subsidiary
has guaranteed any Subordinated Debt.

<PAGE>

                                      -61-

                            8. AFFIRMATIVE COVENANTS.
                               ---------------------

         The  Borrowers  covenant  and agree that,  so long as any Loan,  Unpaid
Reimbursement Obligation,  Letter of Credit or Note is outstanding or any Lender
has any  obligation  to make  any  Loans  or the  Administrative  Agent  has any
obligation to issue, extend or renew any Letters of Credit:

         8.1.  PUNCTUAL  PAYMENT.  The Borrowers will duly and punctually pay or
cause to be paid the  principal  and  interest on the Loans,  all  Reimbursement
Obligations,  the Letter of Credit Fees, the Fees and all other amounts provided
for in this Credit Agreement and the other Loan Documents to which the Borrowers
are party,  all in accordance  with the terms of this Credit  Agreement and such
other Loan Documents.

         8.2.  MAINTENANCE  OF OFFICE.  Each of the Borrowers  will maintain its
chief  executive  office at 2301 Eagle  Parkway,  Suite 200,  Fort Worth,  Texas
76117,  or at such other place in the United  States of America as such Borrower
shall   designate   upon  thirty  (30)  days'  prior   written   notice  to  the
Administrative  Agent, where notices,  presentations and demands to or upon such
Borrower in respect of the Loan  Documents to which such Borrower is a party may
be given or made.

         8.3. RECORDS AND ACCOUNTS. Each of the Borrowers will (a) keep true and
accurate  records and books of account in which full,  true and correct  entries
will be made in  accordance  with  GAAP,  (b)  maintain  adequate  accounts  and
reserves  for all  taxes  (including  income  taxes),  depreciation,  depletion,
obsolescence  and  amortization  of its  properties  and the  properties  of its
Subsidiaries, contingencies, and other reserves, and (c) at all times engage the
Accountants and will not permit more than thirty (30) days to elapse between the
cessation of such Accountants as the independent certified public accountants of
the Borrowers and the  appointment in such capacity of a successor firm as shall
be satisfactory to the Administrative Agent.

         8.4. FINANCIAL STATEMENTS,  CERTIFICATES AND INFORMATION. The Borrowers
will deliver to the Administrative Agent and the Lenders:

                  (a) as soon as  practicable,  but in any event not later  than
         ninety (90) days after the end of each  fiscal  year of the  Borrowers,
         the  consolidated  and  consolidating  balance sheets of the Borrowers,
         each as at the end of such  year,  and  the  related  consolidated  and
         consolidating  statements  of  income,  statements  of cash  flow,  and
         statements  of  operations  for  such  year,   each  setting  forth  in
         comparative  form the figures for the previous fiscal year and all such
         consolidated and consolidating  statements to be in reasonable  detail,
         prepared in accordance with GAAP, and certified,  without qualification
         and  without an  expression  of  uncertainty  as to the  ability of the
         Borrowers to continue as going concerns,  by the Accountants,  together
         with an annual budget and projections  prepared by the CFO for the next
         fiscal year in form and substance  satisfactory  to the  Administrative

<PAGE>

                                      -62-

         Agent. In addition,  simultaneously  therewith, the Borrowers shall use
         their best efforts to provide the Lenders with a written statement from
         such  accountants  to the  effect  that  they  have read a copy of this
         Credit Agreement, and that, in making the examination necessary to said
         certification,  they have obtained no knowledge of any Default or Event
         of Default,  or, if such Accountants  shall have obtained  knowledge of
         any then  existing  Default or Event of Default they shall  disclose in
         such statement any such Default or Event of Default; provided that such
         Accountants  shall not be liable to the  Lenders  for failure to obtain
         knowledge of any Default or Event of Default;

                  (b) as soon as  practicable,  but in any event not later  than
         forty-five  (45) days after the end of each of the fiscal  quarters  of
         the Borrowers,  copies of the unaudited  consolidated and consolidating
         balance sheets and  statements of operations of the Borrowers,  each as
         at  the  end  of  such  quarter,   and  the  related  consolidated  and
         consolidating statements of cash flow for the portion of the Borrowers'
         fiscal year then  elapsed,  all in  reasonable  detail and  prepared in
         accordance with GAAP, together with a certification by the CFO that the
         information  contained in such financial statements fairly presents the
         financial  position of the  Borrowers on the date  thereof  (subject to
         year-end adjustments);

                  (c)   simultaneously   with  the  delivery  of  the  financial
         statements  referred to in  subsections  (a) and (b) above, a statement
         certified by the CFO in  substantially  the form of Exhibit C hereto (a
         "Compliance  Certificate")  and  setting  forth  in  reasonable  detail
         computations  evidencing  compliance  with the  covenants  contained in
         ss.ss.8,  9 and 10  and  (if  applicable)  reconciliations  to  reflect
         changes in GAAP since the Interim Balance Sheet Date;

                  (d) as soon as  practicable,  but in any event not later  than
         fifteen (15) days prior to the  commencement of each fiscal year of the
         Borrowers, a copy of the annual budget, projections,  business plan and
         divisional profit and loss statements for the Borrowers for such fiscal
         year;

                  (e)  contemporaneously  with the  filing or  mailing  thereof,
         copies of all material of a financial  nature filed with the Securities
         and Exchange Commission or sent to the stockholders of any Borrower;

                  (f)  from  time to time  upon  request  of the  Administrative
         Agent,   projections  of  the  Borrowers   updating  those  projections
         delivered to the Lenders and referred to in ss.7.4.3 or, if applicable,
         updating any later such projections  delivered in response to a request
         pursuant to this ss.8.4(g); and

                  (g)  from  time  to  time  such  other   financial   data  and
         information   (including   accountants'   management  letters)  as  the
         Administrative Agent or any Lender may reasonably request.

<PAGE>

                                      -63-

         The Borrowers  hereby authorize the Lenders to disclose any information
obtained  pursuant  to this Credit  Agreement  to all  appropriate  governmental
regulatory authorities where required by law; provided however, that the Lenders
shall,  to the extent  practicable and allowable under law, notify the Borrowers
within a reasonable  period prior to the time any such  disclosure is made;  and
provided further,  this authorization  shall not be deemed to be a waiver of any
rights to object to the disclosure by the Lenders of any such information  which
any Borrower has or may have under the federal Right to Financial Privacy Act of
1978, as in effect from time to time.

         8.5. NOTICES.

                  8.5.1.  DEFAULTS.  The  Borrowers  will  promptly  notify  the
         Administrative  Agent  and  each  of  the  Lenders  in  writing  of the
         occurrence  of  any  Default  or  Event  of  Default,  together  with a
         reasonably detailed  description thereof, and the actions the Borrowers
         propose to take with  respect  thereto.  If any  Person  shall give any
         notice  or take any  other  action  in  respect  of a  claimed  default
         (whether or not  constituting  an Event of  Default)  under this Credit
         Agreement  or any other note,  evidence of  Indebtedness,  indenture or
         other  obligation  to which or with  respect to which any Borrower is a
         party or  obligor  in  excess  of  $1,000,000,  whether  as  principal,
         guarantor,  surety or otherwise,  the Borrowers  shall  forthwith  give
         written  notice  thereof  to the  Administrative  Agent and each of the
         Lenders,  describing the notice or action and the nature of the claimed
         default.

                  8.5.2.  ENVIRONMENTAL  EVENTS.  The  Borrowers  will  promptly
         notify the Administrative  Agent and each of the Lenders,  (i) upon any
         Borrower obtaining  knowledge of any violation of any Environmental Law
         regarding the Real Estate or any Borrower's operations, which violation
         could have a Material Adverse Effect;  (ii) upon any Borrower obtaining
         knowledge of any potential or known Release or threat of Release of any
         Hazardous  Substance at, from, or into the Real Estate which it reports
         in  writing  or is  reportable  by it in  writing  to any  governmental
         authority which could have a Material  Adverse  Effect;  (iii) upon any
         Borrower's receipt of any notice of violation of any Environmental Laws
         or of any  Release  or  threatened  Release  of  Hazardous  Substances,
         including a notice or claim of liability  or  potential  responsibility
         from any third party  (including  without  limitation any  Governmental
         Authority)  and  including  notice of any formal  inquiry,  proceeding,
         demand,   investigation   or  other  action  with  regard  to  (A)  any
         Borrower's,   or  any  Person's  operation  of  the  Real  Estate,  (B)
         contamination on, from or into the Real Estate, or (C) investigation or
         remediation of offsite locations at which any Borrower, or any of their
         predecessors  is alleged to have  directly  or  indirectly  Disposed of
         Hazardous  Substances,  which could have a Material Adverse Effect;  or
         (iv) upon any Borrower obtaining knowledge that any expense or loss has
         been incurred by such  governmental  authority in  connection  with the
         assessment,  containment,  removal  or  remediation  of  any  Hazardous
         Substances  with  respect  to which a lien may be  imposed  on the Real
         Estate.

<PAGE>

                                      -64-

                  8.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrowers
         will,   immediately   upon   becoming   aware   thereof,   notify   the
         Administrative  Agent and each of the Lenders in writing of any setoff,
         claims  (including,  with  respect  to the Real  Estate,  environmental
         claims), withholdings or other defenses to which any of the Collateral,
         or the  Administrative  Agent's rights with respect to the  Collateral,
         are subject.

                  8.5.4.  NOTICE  OF  LITIGATION  AND  JUDGMENTS.  Each  of  the
         Borrowers will give notice to the Administrative  Agent and each of the
         Lenders in writing  within  fifteen (15) days of becoming  aware of any
         litigation  or  proceedings   threatened  in  writing  or  any  pending
         litigation  and  proceedings  affecting  the  Borrowers or to which any
         Borrower is or becomes a party involving an uninsured claim against any
         Borrower that could  reasonably be expected to have a Material  Adverse
         Effect on the  Borrowers  and  stating  the  nature  and status of such
         litigation or  proceedings.  Each of the Borrowers  will give notice to
         the Administrative  Agent and each of the Lenders,  in writing, in form
         and detail  satisfactory to the Administrative  Agent,  within ten (10)
         days of any  judgment  not covered by  insurance,  final or  otherwise,
         against the Borrowers in an amount in excess of $1,000,000.

                  8.5.5. NOTICES CONCERNING TAX TREATMENT. In the event that any
         of the  Borrowers  determine to take any action  inconsistent  with its
         intention  to not treat the  Loans,  Letters of Credit  and/or  related
         transactions  hereunder  as  a  "reportable  transaction"  (within  the
         meaning of Treasury  Regulation  Section  1.6011-4),  it will  promptly
         notify the Administrative Agent in writing thereof and will provide the
         Administrative Agent with a duly completed copy of IRS Form 8886 or any
         successor form. The Borrowers acknowledge that the Administrative Agent
         and/or  one or more of the  Lenders  may treat its Loans and  Letter of
         Credit  Participations  as part of a  transaction  that is  subject  to
         Treasury  Regulation  Section 1.6011-4 or Section  301.6112-1,  and the
         Administrative  Agent and such Lender or Lenders,  as applicable,  will
         file such IRS forms and maintain  such lists and other  records as they
         may determine is required by such Treasury Regulations.

         8.6.  LEGAL  EXISTENCE;  MAINTENANCE  OF  PROPERTIES.  Except where the
failure of any Borrower to remain so qualified  could not reasonably be expected
to result in a Material  Adverse  Effect,  the Borrowers  will do or cause to be
done all  things  necessary  to  preserve  and keep in full force and effect its
legal existence,  rights and franchises and those of its  Subsidiaries.  Each of
the Borrowers (i) will cause all of its properties and those of its Subsidiaries
used  or  useful  in  the  conduct  of  its  business  or  the  business  of its
Subsidiaries  to be maintained  and kept in good  condition,  repair and working
order and supplied with all necessary equipment,  (ii) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the  judgment of the  Borrowers  may be necessary so that the business
carried on in connection therewith may be properly and advantageously  conducted
at all times,  and (iii) will continue to engage primarily in the businesses now
conducted  by them and in  related  businesses;  provided  that  nothing in this
ss.8.6  shall  prevent  the  Borrowers  from  discontinuing  the  operation  and

<PAGE>

                                      -65-

maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrowers, desirable in the conduct of
its or their business and that do not in the aggregate  have a Material  Adverse
Effect.

         8.7. INSURANCE.

         Each  of  the  Borrowers  will  maintain  with  financially  sound  and
reputable insurers insurance with respect to its properties and business against
such  casualties and  contingencies  as shall be in accordance  with the general
practices of  businesses  engaged in similar  activities  in similar  geographic
areas and in amounts,  containing such terms, in such amount,  in such forms and
for such periods as may be  reasonable  and prudent and in  accordance  with the
terms of the  Security  Agreements,  but in no event less than the  amounts  and
coverages  set forth on Schedule 8.7 hereto.  In addition,  the  Borrowers  will
furnish from time to time, upon the Administrative Agent's request, a summary of
the insurance coverage of each of the Borrowers,  which summary shall be in form
and substance  satisfactory to the Administrative Agent and, if requested by the
Administrative  Agent,  will furnish to the  Administrative  Agent copies of the
applicable  policies  naming  the  Administrative  Agent  as loss  payee  and/or
additional insured (as applicable) thereunder.

         8.8. TAXES. Each of the Borrowers will duly pay and discharge, or cause
to be paid and  discharged,  before the same shall  become  overdue,  all taxes,
assessments and other governmental  charges imposed upon it and its Real Estate,
sales  and  activities,  or any part  thereof,  or upon the  income  or  profits
therefrom,  as well as all claims  for labor,  materials,  or  supplies  that if
unpaid might by law become a Lien or charge upon any of its  property;  provided
that any such tax,  assessment,  charge,  levy or claim  need not be paid if the
validity  or amount  thereof  shall  currently  be  contested  in good  faith by
appropriate  proceedings  and if such Borrower shall have set aside on its books
adequate reserves with respect thereto;  and provided further that such Borrower
will pay all such taxes,  assessments,  charges, levies or claims forthwith upon
the  commencement of proceedings to foreclose any Lien that may have attached as
security therefor.

         8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.

                  8.9.1.  GENERAL.  The  Borrowers  shall  permit  the  Lenders,
         through  the  Administrative   Agent  or  any  of  the  Lenders'  other
         designated representatives,  to visit and inspect any of the properties
         of the Borrowers, to examine the books of account of the Borrowers (and
         to make copies  thereof  and  extracts  therefrom),  and to discuss the
         affairs, finances and accounts of the Borrowers with, and to be advised
         as to the same by, its and their officers, all at such reasonable times
         and intervals as the Administrative  Agent or any Lender may reasonably
         request.

                  8.9.2.   COMMUNICATIONS   WITH   ACCOUNTANTS.   The  Borrowers
         authorize  the   Administrative   Agent  and,  if  accompanied  by  the
         Administrative  Agent,  the Lenders to  communicate  directly  with the
         Accountants  and  authorizes  such   Accountants  to  disclose  to  the

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                                      -66-

         Administrative  Agent and the Lenders any and all financial  statements
         and other supporting financial documents and schedules including copies
         of any  management  letter  with  respect  to the  business,  financial
         condition  and other  affairs of the  Borrowers.  At the request of the
         Administrative Agent, the Borrowers shall deliver a letter addressed to
         such Accountants instructing them to comply with the provisions of this
         ss.8.9.2.

         8.10. COMPLIANCE WITH LAWS, CONTRACTS,  LICENSES,  AND PERMITS. Each of
the Borrowers will and will cause the De Minimis Subsidiaries to comply with (a)
the  applicable  laws  and  regulations  wherever  its  business  is  conducted,
including all Environmental Laws, (b) the provisions of its Governing Documents,
(c) all agreements  and  instruments by which it or any of its properties may be
bound and (d)  except  where  noncompliance  would not have a  Material  Adverse
Effect, all applicable laws, orders, decrees,  orders,  judgments,  licenses and
permits,   including  without  limitation  all  environmental  permits.  If  any
authorization,  consent, approval, permit or license from any officer, agency or
instrumentality  of any government  shall become  necessary or required in order
that any  Borrower  may fulfill any of its  obligations  hereunder or any of the
other Loan  Documents  to which such  Borrower  is a party,  the  Borrower  will
immediately  take or cause to be taken all reasonable  steps within the power of
such Borrower to obtain such authorization, consent, approval, permit or license
and furnish the Administrative Agent and the Lenders with evidence thereof.

         8.11.  EMPLOYEE  BENEFIT  PLANS.  The Borrowers  will (a) promptly upon
filing the same with the  Department of Labor or Internal  Revenue  Service upon
request of the Administrative  Agent, furnish to the Administrative Agent a copy
of the most recent actuarial  statement required to be submitted under ss.103(d)
of ERISA and Annual Report, Form 5500, with all required attachments, in respect
of each Guaranteed Pension Plan, (b) promptly upon receipt or dispatch,  furnish
to the  Administrative  Agent any  notice,  report or demand sent or received in
respect of a Guaranteed  Pension Plan under  ss.ss.302,  4041, 4042, 4043, 4063,
4065,  4066 and 4068 of ERISA,  or in respect  of a  Multiemployer  Plan,  under
ss.ss.4041A,  4202, 4219, 4242, or 4245 of ERISA and (c) promptly furnish to the
Administrative Agent a copy of all actuarial statements required to be submitted
under all Applicable Pension Legislation.

         8.12. USE OF PROCEEDS. The Borrowers will use the proceeds of the Loans
and obtain Letters of Credit solely for the purposes set forth in ss.7.17.

         8.13.  INTEREST RATE PROTECTION.  The Borrowers will have within ninety
(90) days of the  Closing  Date,  and shall  maintain  at all  times,  a minimum
aggregate  amount of not less than fifty percent (50%) of the notional amount of
Consolidated  Total Funded Debt as of the Closing Date on a fixed rate long term
basis  (whether  through Swap Contracts or as a result of having a fixed rate of
interest  by its terms) on terms and  conditions  reasonably  acceptable  to the
Administrative Agent.

<PAGE>

                                      -67-

         8.14. NEW BORROWERS.  Any  newly-created or acquired  Subsidiary (other
than De Minimis Subsidiaries) shall become a Borrower hereunder on or before the
tenth  (10th)  Business  Day after the end of the  calendar  month in which such
Subsidiary  was created or acquired or such earlier  date as the  Administrative
Agent may, in its sole discretion,  require but no earlier than the tenth (10th)
Business Day after the date of the creation or  acquisition  of such  Subsidiary
and become a party to the Security  Documents by (i) signing a joinder agreement
in   substantially   the  form  attached  hereto  as  Exhibit  D  (the  "Joinder
Agreement"),  (ii) signing  allonges to the Notes and (iii) providing such other
documentation as the  Administrative  Agent may reasonably  request,  including,
without  limitation,  documentation with respect to the conditions  specified in
ss.11  hereof,  and one hundred  percent  (100%) of the Capital Stock (or in the
case of a foreign  Subsidiary,  65% of the Capital Stock) and assets  (excluding
motor vehicles and real estate) of such new Subsidiaries shall be pledged to the
Administrative  Agent  for  the  benefit  of the  Lenders.  In such  event,  the
Administrative Agent is hereby authorized by the parties to update Schedule 2 to
include such new Subsidiary.

         8.15.  SUBSIDIARIES.   The  Parent  shall  at  all  times  directly  or
indirectly  through a Subsidiary  own all of the shares of the Capital  Stock of
each Subsidiary of the Parent.

         8.16. CLOSURE AND POST CLOSURE LIABILITIES.  The Borrowers shall at all
times adequately  accrue,  in accordance with GAAP and as required by applicable
Environmental Laws, all closure and post closure liabilities with respect to the
operations of the Borrowers.

         8.17. FURTHER ASSURANCES. Each of the Borrowers will cooperate with the
Lenders and the  Administrative  Agent and execute such further  instruments and
documents as the Lenders or the Administrative Agent shall reasonably request to
carry out to their  satisfaction  the  transactions  contemplated by this Credit
Agreement and the other Loan Documents.

         8.18. ENVIRONMENTAL  INDEMNIFICATION.  THE BORROWERS COVENANT AND AGREE
THAT THEY  WILL  INDEMNIFY  AND HOLD THE  ADMINISTRATIVE  AGENT AND THE  LENDERS
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, EXPENSE, DAMAGE, LOSS OR LIABILITY
INCURRED  BY THE  ADMINISTRATIVE  AGENT OR THE LENDERS  (INCLUDING  ALL COSTS OF
LEGAL  REPRESENTATION)  RELATING  TO (A) ANY  RELEASE OR  THREATENED  RELEASE OF
HAZARDOUS  SUBSTANCES ON THE REAL ESTATE; (B) ANY VIOLATION OF ANY ENVIRONMENTAL
LAWS WITH RESPECT TO CONDITIONS AT THE REAL ESTATE OR THE  OPERATIONS  CONDUCTED
THEREON;  OR (C) THE  INVESTIGATION OR REMEDIATION OF OFFSITE LOCATIONS AT WHICH
THE BORROWERS OR THEIR  PREDECESSORS  ARE ALLEGED TO HAVE DIRECTLY OR INDIRECTLY
DISPOSED OF HAZARDOUS SUBSTANCES.  IT IS EXPRESSLY ACKNOWLEDGED BY THE BORROWERS
THAT THIS COVENANT OF  INDEMNIFICATION  SHALL INCLUDE CLAIMS,  EXPENSE,  DAMAGE,
LOSS OR LIABILITY INCURRED BY THE ADMINISTRATIVE AGENT OR THE LENDERS BASED UPON

<PAGE>

                                      -68-

THE ADMINISTRATIVE  AGENT'S OR THE LENDERS' NEGLIGENCE,  AND THIS COVENANT SHALL
SURVIVE  ANY  FORECLOSURE  OR ANY  MODIFICATION,  RELEASE  OR  DISCHARGE  OF THE
SECURITY  DOCUMENTS  OR THE  PAYMENT OF THE  OBLIGATIONS  AND SHALL INURE TO THE
BENEFIT  OF THE  ADMINISTRATIVE  AGENT AND THE  LENDERS,  THEIR  SUCCESSORS  AND
ASSIGNS.

         8.19.  SENECA MEADOWS  FINANCIALS.  The Borrowers  shall deliver to the
Administrative  Agent no later than  October 17,  2003,  the  audited  financial
statements  of Seneca  Meadows for the fiscal  years ended  December  31,  2000,
December 31, 2001 and December 31, 2002, in form and substance  satisfactory  to
the Administrative Agent.

         8.20.  RECEIPT OF PREFERRED STOCK PROCEEDS.  The  Administrative  Agent
shall have received no later than November 15, 2003,  evidence  satisfactory  to
the  Administrative  Agent that the Borrowers shall have received net new equity
proceeds from the issuance of the Series E Convertible Preferred Stock following
the Closing Date equal to at least  $1,000,000  from Persons  acceptable  to the
Administrative  Agent and on terms satisfactory to the Administrative  Agent and
the Arranger.

                         9. CERTAIN NEGATIVE COVENANTS.
                            --------------------------

         The  Borrowers  covenant  and agree that,  so long as any Loan,  Unpaid
Reimbursement Obligation,  Letter of Credit or Note is outstanding or any Lender
has any  obligation  to make  any  Loans  or the  Administrative  Agent  has any
obligations to issue, extend or renew any Letters of Credit:

         9.1.  RESTRICTIONS  ON  INDEBTEDNESS.  No Borrower  will become or be a
guarantor  or surety of, or otherwise  create,  incur,  assume,  or be or remain
liable,  contingently  or  otherwise  (whether  by  agreement  to  purchase  any
obligations,  stock,  assets,  goods or  services,  or to supply or advance  any
funds, assets, goods or services or otherwise), with respect to any Indebtedness
of any other Person or incur  Indebtedness  other than the  following;  provided
that no  Event  of  Default  shall  have  occurred  and be  continuing  and such
Indebtedness is permitted by the 2002 Subordinated Note Indenture:

                  (a) Indebtedness to the Lenders and the  Administrative  Agent
         arising under any of the Loan Documents;

                  (b)  endorsements  for collection,  deposit or negotiation and
         warranties of products or services;

                  (c)  Indebtedness  incurred in connection with the acquisition
         or lease financing of any real or personal property by such Borrower or
         under any  Capitalized  Lease or  Synthetic  Lease,  provided  that the

<PAGE>

                                      -69-

         aggregate  principal amount of such Indebtedness of the Borrowers shall
         not exceed $20,000,000 at any one time;

                  (d)  Indebtedness  in respect of Swap  Contracts  entered into
         pursuant to ss.8.13;

                  (e)  Indebtedness  existing  on the date hereof and listed and
         described  on  Schedule  9.1  hereto,   together   with  any  renewals,
         extensions or  refinancings  thereof on terms which (i) do not increase
         the principal amount thereunder,  and (ii) are not materially different
         than  those in  effect  as of the date  hereof;  provided  that no such
         Indebtedness  may be  prepaid  without  prior  written  consent  of the
         Required Lenders;

                  (f)  incurrence  by any  Borrower of guaranty,  suretyship  or
         indemnification   obligations  in  connection   with  such   Borrower's
         performance  of services for its  respective  customers in the ordinary
         course of its business;

                  (g) Indebtedness with respect to landfill closure bonds of the
         Borrowers in an aggregate amount not to exceed $100,000,000;

                  (h) Indebtedness with respect to the L/C Supported IRBs;

                  (i)  Unpaid  accrued  dividends  with  respect to the Series C
         Convertible  Preferred Stock, the Series D Convertible  Preferred Stock
         and  Series E  Convertible  Preferred  Stock to the  extent  treated as
         Indebtedness under GAAP;

                  (j)  Indebtedness  of  IESI MO  Corporation  with  respect  to
         royalty payments secured by Liens permitted pursuant to ss.9.2.1(ix);

                  (k) Subordinated Debt permitted pursuant to ss.9.7;

                  (l) Indebtedness of the Borrowers under fuel price swaps, fuel
         price  caps,  and fuel price  collar or floor  agreements,  and similar
         agreements  or  arrangements  designed  to  protect  against  or manage
         fluctuations  in fuel  prices  with  respect to fuel  purchased  in the
         ordinary  course  of  business  of  the  Borrowers  ("Fuel  Derivatives
         Obligations"),  provided  that the  aggregate  notional  amount of such
         agreements  do not  exceed  $10,000,000  outstanding  at any time,  the
         maturity of such agreements do not exceed  thirty-six (36) months,  and
         the terms are consistent with past practices of the Borrowers;  and

                  (m) Other unsecured Indebtedness in an aggregate amount not to
         exceed $10,000,000.

         9.2. RESTRICTIONS ON LIENS.

                  9.2.1.  PERMITTED  LIENS.  The Borrowers will not and will not
         permit the De Minimis  Subsidiaries to (a) create or incur or suffer to
         be created or incurred or to exist any Lien upon any of its property or

<PAGE>

                                      -70-

         assets of any  character  whether now owned or hereafter  acquired,  or
         upon the income or profits therefrom; (b) transfer any of such property
         or assets  or the  income  or  profits  therefrom  for the  purpose  of
         subjecting  the same to the payment of  Indebtedness  or performance of
         any other  obligation in priority to payment of its general  creditors;
         (c)  acquire,  or agree or have an option to acquire,  any  property or
         assets upon conditional sale or other title retention or purchase money
         security  agreement,  device or arrangement;  (d) suffer to exist for a
         period of more than  thirty  (30) days  after the same  shall have been
         incurred any  Indebtedness or claim or demand against it that if unpaid
         might by law or upon bankruptcy or insolvency,  or otherwise,  be given
         any  priority  whatsoever  over its  general  creditors;  or (e)  sell,
         assign,  pledge or otherwise  transfer any  "receivables" as defined in
         clause  (g) of the  definition  of the  term  "Indebtedness,"  with  or
         without  recourse;  provided  that the Borrowers may create or incur or
         suffer to be created or incurred or to exist:

                  (i) Liens to secure taxes,  assessments  and other  government
         charges in respect of obligations not overdue or Liens on properties to
         secure claims for labor, material or supplies in respect of obligations
         not overdue;

                  (ii) deposits or pledges made in connection with, or to secure
         payment of, workmen's  compensation,  unemployment  insurance,  old age
         pensions or other social security obligations;

                  (iii) Liens on  properties  in respect of  judgments or awards
         that have been in force for less than the applicable  period for taking
         an appeal so long as execution is not levied  thereunder  or in respect
         of which such Borrower  shall at the time in good faith be  prosecuting
         an appeal or  proceedings  for review and in respect of which a stay of
         execution shall have been obtained pending such appeal or review and in
         respect of which the Borrowers have maintained adequate reserves;

                  (iv)   Liens  of   carriers,   warehousemen,   mechanics   and
         materialmen, and other like Liens on properties, in existence less than
         one  hundred  twenty  (120) days from the date of  creation  thereof in
         respect of obligations not overdue;

                  (v)  encumbrances  on Real  Estate  consisting  of  easements,
         rights of way,  zoning  restrictions,  restrictions  on the use of real
         property  and  defects  and   irregularities   in  the  title  thereto,
         landlord's or lessor's liens and other minor Liens,  provided that none
         of such Liens (A)  interferes  materially  with the use of the property
         affected in the ordinary conduct of the business of the Borrowers,  and
         (B) individually or in the aggregate have a Material Adverse Effect;

                  (vi) Liens  existing on the date hereof and listed on Schedule
         9.2 hereto;

<PAGE>

                                      -71-

                  (vii)  purchase  money  or  lease  security  interests  in  or
         purchase  money  mortgages  on real or  personal  property  acquired or
         leased  after  the  date  hereof  to  secure  purchase  money  or lease
         Indebtedness of the type and amount permitted by ss.9.1(c), incurred in
         connection  with  the  acquisition  or lease  of such  property,  which
         security  interests  or  mortgages  cover  only  the  real or  personal
         property so acquired or leased;

                  (viii)  Liens  in favor of the  Administrative  Agent  for the
         benefit of the Lenders and the Administrative  Agent under the Security
         Documents;

                  (ix)  Liens on the  real  property  contemplated  for use as a
         landfill in Washington  County,  Missouri to secure royalty payments to
         be made  by IESI MO  Corporation  to the  former  shareholders  of WaCo
         Landholding, Inc. in an amount not to exceed $8,000,000; and

                  (x) Liens,  whether  created by contract,  law,  regulation or
         ordinance,  securing Indebtedness permitted by ss.9.1(f), provided that
         any  security  granted  therefor  is  limited  to (A) rights to payment
         under, and use of equipment or related assets to perform, the contracts
         to which such guaranty or suretyship  obligations relate, and (B) other
         Liens arising under the laws of suretyship.

                           9.2.2.  RESTRICTIONS ON NEGATIVE PLEDGES AND UPSTREAM
         LIMITATIONS.  The Borrowers  will not (a) enter into or permit to exist
         any  arrangement or agreement  (excluding the Credit  Agreement and the
         other Loan  Documents)  which  directly  or  indirectly  prohibits  any
         Borrower  from  creating,  assuming  or  incurring  any  Lien  upon its
         properties, revenues or assets whether now owned or hereafter acquired,
         or (b) enter into any agreement, contract or arrangement (excluding the
         Credit Agreement and the other Loan Documents)  restricting the ability
         of such Borrower to pay or make dividends or  distributions  in cash or
         kind to any other Borrower,  to make loans,  advances or other payments
         of  whatsoever  nature  to  such  Borrower,  or to  make  transfers  or
         distributions  of all or any part of its  assets to such  Borrower;  in
         each case other than (i)  restrictions  on specific assets which assets
         are the  subject of purchase  money  security  interests  to the extent
         permitted under  ss.9.2.1,  (ii) customary  anti-assignment  provisions
         contained  in leases  and  licensing  agreements  entered  into by such
         Borrower in the ordinary course of its business, and (iii) restrictions
         contained in the 2002 Subordinated Note Indenture.

         9.3. RESTRICTIONS ON INVESTMENTS. The Borrowers will not make or permit
to exist or to remain outstanding any Investment except Investments in:

                  (a) marketable direct or guaranteed  obligations of the United
         States of  America  that  mature  within  one (1) year from the date of
         purchase by such Borrower;

<PAGE>

                                      -72-

                  (b) demand deposits, certificates of deposit, bank acceptances
         and time  deposits of United States banks having total assets in excess
         of $100,000,000;

                  (c) securities  commonly known as "commercial  paper" maturing
         not more than nine (9)  months  from the date of issue and  issued by a
         corporation  organized and existing under the laws of the United States
         of America or any state  thereof that at the time of purchase have been
         rated  and the  ratings  for  which are not less than "P 1" if rated by
         Moody's, and not less than "A 1" if rated by S&P;

                  (d)  Investments  existing  on the date  hereof  and listed on
         Schedule 9.3 hereto;

                  (e) Investments associated with insurance policies required or
         allowed by state law to be posted as financial  assurance  for landfill
         closure and post-closure liabilities;

                  (f) Investments by any Borrower in any other Borrower;

                  (g) Investments  consisting of loans and advances to employees
         for moving,  entertainment,  travel and other  similar  expenses in the
         ordinary  course of business not to exceed $250,000 in the aggregate at
         any time outstanding;

                  (h)   Investments  by  any  Borrower  in  connection  with  an
         acquisition permitted by ss.9.5.1; and

                  (i) other Investments not otherwise permitted hereunder not to
         exceed $10,000,000 in the aggregate at any time outstanding.

         9.4. RESTRICTED PAYMENTS;  AMENDMENTS TO DOCUMENTS.  The Borrowers will
not  make  any   Restricted   Payments,   except  that  any  Borrower  may  make
Distributions to any other Borrower.  The Borrowers shall not, without the prior
written consent of the Administrative  Agent,  effect or permit any change in or
amendment  to  any  document  or  instrument  pertaining  to  the  terms  of any
Borrower's  (other  than the  Parent's)  Capital  Stock.  The Parent  shall not,
without the prior written consent of the Administrative  Agent, effect or permit
any change in or amendment to any document or instrument pertaining to the terms
of the Parent's  Capital  Stock in any manner which would (a) create a mandatory
obligation to make any Distribution thereunder or (b) increase the amount of, or
accelerate the timing of, any obligation  (other than stock issued in connection
with acquisitions permitted under ss.9.5.1 and stock issued under existing stock
option plans) of the Parent to make any Distribution  thereunder or with respect
to any of its Capital Stock, or (c) otherwise adversely affect the rights of the
Lenders and the  Administrative  Agent.  The Parent  will,  with  respect to any
amendment not requiring the prior written consent of the Administrative Agent as
set  forth  above,  (i)  provide  written  notice of any such  amendment  to the
Administrative  Agent at least  seven (7) days prior to the  proposed  effective

<PAGE>

                                      -73-

date  of  such  amendment  and  (ii)  deliver  to  the  Administrative  Agent  a
certificate   from  the  CFO,  in  form  and  substance   satisfactory   to  the
Administrative  Agent,  certifying  that such  amendment  shall not  violate the
provisions of this ss.9.4.

         9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.

                  9.5.1. MERGERS AND ACQUISITIONS. The Borrowers will not become
         a party to any merger,  amalgamation or  consolidation,  or agree to or
         effect  any asset  acquisition  or stock  acquisition  (other  than the
         acquisition  of assets in the  ordinary  course of business  consistent
         with past practices) except as otherwise provided in this ss.9.5.1. Any
         of the Borrowers may acquire the assets or stock of any other Borrower,
         or may merge or consolidate  with or into any other Borrower,  provided
         that,  in the case of a merger or  consolidation  of the  Parent  and a
         Borrower,  the  Parent  shall  be  the  surviving  entity.  Any  of the
         Borrowers may acquire all or substantially all of the assets or Capital
         Stock of any Person, provided that:

                  (a)  for  Material  Acquisitions,  the  Borrowers  shall  have
         delivered  to  the  Administrative   Agent  a  Compliance   Certificate
         certifying  they are in current  compliance  with and, giving effect to
         the proposed  acquisition  (including any borrowings made or to be made
         in connection therewith), will continue to be in compliance with all of
         the covenants in ss.10 hereof on a pro forma historical  combined basis
         as if the  transaction  occurred  on the  first  day of the  period  of
         measurement;

                  (b) at the time of such  acquisition,  no  Default or Event of
         Default has occurred and is continuing,  and such  acquisition will not
         otherwise create a Default or an Event of Default hereunder;

                  (c) the business to be acquired is  predominantly  in the same
         lines of business as the Borrowers, or businesses reasonably related or
         incidental thereto;

                  (d) the business to be acquired operates  predominantly in the
         continental United States or Canada;

                  (e) all of the  assets  to be  acquired  shall  be owned by an
         existing or newly  created  Subsidiary  of the Parent which  Subsidiary
         shall  be  a  Borrower,  one  hundred  percent  (100%)  of  the  assets
         (excluding  motor vehicle  equipment)  and Capital Stock (or 65% of the
         Capital Stock in the case of a foreign  Subsidiary)  of which have been
         or,  simultaneously  with  such  acquisition,  will be  pledged  to the
         Administrative  Agent on behalf of the Lenders  (subject  to  Permitted
         Liens) or, in the case of a stock or other equity interest acquisition,
         the  acquired  company,  simultaneously  with such  acquisition,  shall
         become  a  Borrower  or shall be  merged  with and into a wholly  owned
         Subsidiary  that is a  Borrower  and such  newly  acquired  or  created
         Subsidiary  shall  otherwise  comply  with the  provisions  of  ss.8.14
         hereof;

<PAGE>

                                      -74-

                  (f) for Material  Acquisitions,  not later than seven (7) days
         prior  to  the  proposed  acquisition  date,  a copy  of  the  purchase
         agreement  and  financial   projections,   together  with  audited  (if
         available,   or  otherwise  unaudited)  financial  statements  for  any
         Subsidiary  to be acquired or created for the  preceding two (2) fiscal
         years or such  shorter  period of time as such  Subsidiary  has been in
         existence shall have been furnished to the Administrative Agent;

                  (g) for Material  Acquisitions,  not later than seven (7) days
         prior to the proposed acquisition date, (i) a summary of the Borrowers'
         results of their standard due diligence review, and (ii) in the case of
         a landfill acquisition, including a review by a Consulting Engineer and
         a copy of the Consulting Engineer's report shall have been furnished to
         the Administrative Agent;

                  (h)  cash  consideration  to  be  paid  by  such  Borrower  in
         connection with any such acquisition or series of related  acquisitions
         (including  the  aggregate  amount  of  all  Indebtedness   assumed  or
         incurred),  shall not  exceed  $15,000,000  without  the prior  written
         consent of the Administrative Agent and the Required Lenders;

                  (i) the board of directors and (if required by applicable law)
         the  shareholders,  or the  equivalent  thereof,  of the  Person  to be
         acquired has approved such acquisition; and

                  (j) if such  acquisition is made by a merger, a Borrower shall
         be the surviving entity.

                  9.5.2.  DISPOSITION OF ASSETS. The Borrowers will not become a
         party to or agree to or effect any  disposition  of assets,  other than
         (a) the sale of inventory,  the licensing of intellectual  property and
         the disposition of obsolete assets, in each case in the ordinary course
         of business consistent with past practices, (b) a disposition of assets
         from a Borrower  to any other  Borrower,  (c) the sale or  exchange  of
         routes which in the business  judgment of the Borrowers does not have a
         Material  Adverse  Effect,  (d) assets with a fair market value of less
         than  $15,000,000 per year transferred in connection with an asset sale
         or swap, which sale or swap in the business  judgement of the Borrowers
         does not have a Material  Adverse  Effect,  and (e) assets  with a fair
         market  value  in  excess  of  $15,000,000  per  year   transferred  in
         connection  with an asset  sale or swap,  which sale or swap shall have
         received the prior written approval of the Administrative Agent and the
         Required Lenders.

         9.6.  SALE  AND  LEASEBACK.  The  Borrowers  will  not  enter  into any
arrangement,  directly or indirectly,  whereby a Borrower shall sell or transfer
any property  owned by it in order then or  thereafter to lease such property or
lease other  property that such Borrower  intends to use for  substantially  the
same purpose as the property being sold or transferred.

         9.7. SUBORDINATED DEBT. The Borrowers will not:

<PAGE>

                                      -75-

         (a)  create,   incur,  assume,   guarantee  or  be  or  remain  liable,
contingently  or  otherwise  for  Subordinated  Debt in excess  of  $250,000,000
provided that prior to the incurrence of Subordinated  Debt, the Borrowers shall
deliver  a  pro  forma  compliance   certificate  to  the  Administrative  Agent
certifying as of the date of the  incurrence of such  Subordinated  Debt,  after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing; or

         (b) amend, supplement or otherwise modify the terms of the Subordinated
Debt or prepay,  redeem,  repurchase or elect or take any action to discharge or
defease  any of the  Subordinated  Debt;  provided  that this  ss.9.7  shall not
restrict  the  right of the  Parent  to (i)  amend  the 2002  Subordinated  Note
Indenture or the 2002 Subordinated Notes to extend the maturity thereof or amend
any terms  therein so as to make such terms less  restrictive  on the Parent and
its  Subsidiaries  or  (ii)  make  other  immaterial   amendments  to  the  2002
Subordinated Note Indenture or the 2002 Subordinated Notes which are not adverse
to the Administrative Agent or any of the Lenders; and provided,  further,  that
this  ss.9.7  shall not  restrict  the  ability  of the Parent to  exchange  the
originally  issued 2002  Subordinated  Notes for registered notes (the "Exchange
Notes") in accordance with the terms of the 2002  Subordinated Note Indenture so
long as the terms of the Exchange  Notes are no more  restrictive  on the Parent
and its Subsidiaries than the 2002 Subordinated Notes being exchanged.

         9.8.  EMPLOYEE  BENEFIT  PLANS.  None  of the  Borrowers  or any  ERISA
Affiliate will:

                  (a) engage in any "prohibited  transaction" within the meaning
         of ss.406  of ERISA or  ss.4975  of the Code  which  could  result in a
         material liability for the Borrowers, taken as a whole; or

                  (b)  permit   any   Guaranteed   Pension   Plan  to  incur  an
         "accumulated funding deficiency",  as such term is defined in ss.302 of
         ERISA, whether or not such deficiency is or may be waived; or

                  (c) fail to  contribute to any  Guaranteed  Pension Plan to an
         extent  which,  or terminate  any  Guaranteed  Pension Plan in a manner
         which,  could result in the  imposition of a lien or encumbrance on the
         assets of any Borrower pursuant to ss.302(f) or ss.4068 of ERISA; or

                  (d)  amend  any  Guaranteed   Pension  Plan  in  circumstances
         requiring  the  posting  of  security  pursuant  to  ss.307 of ERISA or
         ss.401(a)(29) of the Code;

                  (e)  permit  or take any  action  which  would  result  in the
         aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
         all  Guaranteed  Pension  Plans  exceeding  the value of the  aggregate
         assets  of such  Plans,  disregarding  for  this  purpose  the  benefit
         liabilities  and  assets  of any such  Plan  with  assets  in excess of
         benefit liabilities; or

<PAGE>

                                      -76-

                  (f)  permit or take any  action  which  would  contravene  any
         Applicable Pension Legislation.

         9.9.  BUSINESS  ACTIVITIES.  The Borrowers will not engage  directly or
indirectly  (whether through  Subsidiaries or otherwise) in any type of business
other than the  businesses  conducted by them on the Closing Date and in related
businesses.

         9.10. FISCAL YEAR. The Borrowers will not change the date of the end of
their fiscal year from that set forth in ss.7.4.1.

         9.11.  TRANSACTIONS  WITH  AFFILIATES.  Except as set forth on Schedule
9.11 hereto, the Borrowers will not engage in any transaction with any Affiliate
(other than for services as employees,  officers and  directors),  including any
contract,  agreement  or  other  arrangement  providing  for the  furnishing  of
services to or by, providing for rental of real or personal property to or from,
or  otherwise  requiring  payments  to or from any  such  Affiliate  or,  to the
knowledge of the Borrowers, any corporation,  partnership, trust or other entity
in  which  any such  Affiliate  has a  substantial  interest  or is an  officer,
director,  trustee or partner, on terms more favorable to such Person than would
have  been  obtainable  on an  arm's-length  basis  in the  ordinary  course  of
business.

         9.12.  NEW  FRANCHISE  AGREEMENTS.  Following  the  Closing  Date,  the
Borrowers shall not enter into any Franchise  Agreement with projected  up-front
Capital  Expenditures  in  excess  of  $5,000,000  without  the  consent  of the
Administrative Agent and the Required Lenders.

                            10. FINANCIAL COVENANTS.
                                -------------------

         The  Borrowers  covenant  and agree that,  so long as any Loan,  Unpaid
Reimbursement Obligation,  Letter of Credit or Note is outstanding or any Lender
has any  obligation  to make  any  Loans  or the  Administrative  Agent  has any
obligation to issue, extend or renew any Letters of Credit:

         10.1. LEVERAGE RATIO. As at the end of any fiscal quarter, the Leverage
Ratio for the Reference Period then ended shall not exceed 4.50:1.00.

         10.2.  SENIOR LEVERAGE RATIO. As at the end of any fiscal quarter,  the
Senior  Leverage  Ratio for the  Reference  Period  then ended  shall not exceed
3.00:1.00.

         10.3. INTEREST COVERAGE. As at the end of any fiscal quarter referenced
in the table below,  the ratio of (a) EBITDA for the Reference Period then ended
to (b)  Consolidated  Total Interest Expense for such Reference Period shall not
be less than the ratio set forth opposite such fiscal quarter in such table:

<PAGE>

                                      -77-

<TABLE>
<CAPTION>
  ------------------------------------------------------------------------ ------------------------

                                     Fiscal Quarters Ending                         Ratio
  ------------------------------------------------------------------------ ------------------------

  ------------------------------------------------------------------------ ------------------------
                       <S>                                                        <C>
                       Closing Date through 12/31/03                              2.75:1.00
  ------------------------------------------------------------------------ ------------------------
                          3/31/04 through 6/30/04                                 3.00:1.00
  ------------------------------------------------------------------------ ------------------------
                                  9/30/04                                         3.25:1.00
  ------------------------------------------------------------------------ ------------------------
                          12/31/04 and thereafter                                 3.50:1.00
  ------------------------------------------------------------------------ ------------------------

</TABLE>

         10.4.  CONSOLIDATED  NET WORTH.  The  Borrowers  will not permit  their
Consolidated  Net Worth at any time to be less than the sum of (a)  $165,375,000
plus (b) on a cumulative  basis,  one hundred  percent (100%) of net proceeds of
any new equity offering (including equity issued pursuant to ss.11.9),  plus (c)
fifty percent (50%) of positive  Consolidated Net Income for each fiscal quarter
following June 30, 2003.

         10.5. CAPITAL EXPENDITURES.  The Borrowers will not make annual Capital
Expenditures  (a) for the fiscal year ending December 31, 2003, in excess of 1.6
times the actual  depreciation  and landfill  depletion  expense for such fiscal
year,  (b) for the fiscal year ending  December 31, 2004, in excess of 1.3 times
the actual depreciation and landfill depletion expense for such fiscal year, (c)
for each of the fiscal years ending  December 31, 2005 and December 31, 2006, in
excess of 1.2 times the actual  depreciation and landfill  depletion expense for
each such fiscal year, and (d) for each fiscal year ending thereafter, in excess
of 1.1 times the actual  depreciation  and landfill  depletion  expense for each
such fiscal year.

                             11. CLOSING CONDITIONS.
                                 ------------------

         The  obligations  of the Lenders to make the initial  Revolving  Credit
Loans and/or the Term Loan, as the case may be, and of the Administrative  Agent
to issue any initial  Letters of Credit shall be subject to the  satisfaction of
the following conditions precedent:

         11.1. LOAN DOCUMENTS.

         Each of the Credit  Agreement and the other Loan  Documents  shall have
been duly executed and delivered by the respective parties thereto,  shall be in
full force and effect and shall be in form and substance satisfactory to each of
the Lenders.

         11.2. CERTIFIED COPIES OF GOVERNING DOCUMENTS. The Administrative Agent
shall have  received  from each of the  Borrowers  a copy,  certified  by a duly
authorized  officer of such Person to be true and complete on the Closing  Date,
of each of its Governing Documents as in effect on such date of certification.

         11.3.  CORPORATE  OR OTHER  ACTION.  All  corporate  (or other)  action
necessary  for the valid  execution,  delivery  and  performance  by each of the
Borrowers of this Credit  Agreement  and the other Loan  Documents to which such
Borrower is or is to become a party shall have been duly and effectively  taken,
and evidence thereof  satisfactory to the  Administrative  Agent shall have been
provided to the Administrative Agent.

<PAGE>

                                      -78-

         11.4.  INCUMBENCY  CERTIFICATE.  The  Administrative  Agent  shall have
received from each of the Borrowers an incumbency  certificate,  dated as of the
Closing Date, signed by a duly authorized  officer of such Borrower,  and giving
the name and  bearing  a  specimen  signature  of each  individual  who shall be
authorized:  (a) to sign, in the name and on behalf of such Person,  each of the
Loan Documents to which such Person is or is to become a party; (b) to make Loan
Requests and Conversion  Requests and to apply for Letters of Credit; and (c) to
give notices and to take other action on its behalf under the Loan Documents.

         11.5.  VALIDITY OF LIENS. The Security  Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under  applicable law) security
interest in and Lien upon the Collateral. All filings, recordings, deliveries of
instruments  and other  actions  necessary  or  desirable  in the opinion of the
Administrative  Agent to protect and preserve such security interests shall have
been duly  effected.  The  Administrative  Agent  shall have  received  evidence
thereof in form and substance satisfactory to the Administrative Agent.

         11.6.   PERFECTION   CERTIFICATES   AND   UCC   SEARCH   RESULTS.   The
Administrative  Agent shall have received from each of the Borrowers a completed
and fully executed  Perfection  Certificate and the results of UCC searches with
respect to the  Collateral,  indicating no Liens other than  Permitted  Liens in
form and substance satisfactory to the Administrative Agent.

         11.7.  CERTIFICATES OF INSURANCE.  The Administrative  Agent shall have
received (a) a certificate  of insurance from an  independent  insurance  broker
dated  as of  the  Closing  Date,  identifying  insurers,  types  of  insurance,
insurance  limits,  and policy  terms,  and otherwise  describing  the insurance
obtained in  accordance  with the  provisions  of the  Security  Documents,  (b)
certified  copies of all policies  evidencing  such  insurance (or  certificates
therefore  signed by the insurer or an agent authorized to bind the insurer) and
(c)   certificate  of  insurance  and  certified   copy  of  policy   evidencing
satisfactory  environmental  and  pollution  insurance  on terms and  conditions
satisfactory to the Administrative Agent.

         11.8.  LEVERAGE RATIO AND SENIOR  LEVERAGE  RATIO.  The  Administrative
Agent shall have  received a  certificate  from the CFO,  in form and  substance
satisfactory  to the  Administrative  Agent,  certifying  that  (a)  the  Senior
Leverage  Ratio shall not exceed  2.50:1.00 and (b) the Leverage Ratio shall not
exceed 4.10:1.00 as of the Closing Date.

         11.9. RECEIPT OF THE PREFERRED STOCK PROCEEDS. The Administrative Agent
shall have received evidence  satisfactory to the Administrative  Agent that the
Borrowers  shall have received net new equity  proceeds from the issuance of the
Series E Convertible Preferred Stock on or prior to the Closing Date equal to at
least  $47,000,000 from Persons  acceptable to the  Administrative  Agent and on
terms satisfactory to the Administrative Agent and the Arranger.

<PAGE>

                                      -79-

         11.10.  SUBORDINATED DEBT. The Administrative Agent shall have received
a  certificate  from  the  CFO,  in  form  and  substance  satisfactory  to  the
Administrative  Agent,  certifying that (i) the Obligations are permitted senior
Indebtedness under the existing Subordinated Debt, and (ii) no default under the
existing  Subordinated Debt has occurred and is continuing or would result after
giving effect to the transactions  contemplated by this Credit Agreement and the
other Loan Documents.

         11.11.  FINANCIAL STATEMENTS AND PROJECTIONS.  The Administrative Agent
and the Lenders shall have received copies of (a) the consolidated balance sheet
of the Borrowers as at the Balance Sheet Date, (b) the consolidated statement of
income of the Borrowers  for fiscal year 2002,  and (c) a  satisfactory  day one
balance  sheet and sources and uses of funds,  showing the effects of the Seneca
Meadows  Acquisition,  the  financing  required  to effect  the  Seneca  Meadows
Acquisition  and  compliance  with  all  terms  and  conditions  of this  Credit
Agreement, including the covenants in ss.10 hereof.

         11.12.  PROJECTIONS.  The Administrative Agent shall have received,  in
form and substance satisfactory to the Administrative Agent,  projections of the
annual  operating  budgets of the  Borrowers on a  consolidated  basis,  balance
sheets and cash flow  statements for the 2003 to 2007 fiscal years,  which shall
disclose all assumptions  made with respect to general  economic,  financial and
market conditions used in formulating such projections.  To the knowledge of the
Borrowers,  no facts exist that  (individually or in the aggregate) would result
in any material  change in any of such  projections.  The  projections are based
upon reasonable  estimates and  assumptions,  have been prepared on the basis of
the  assumptions  stated  therein and reflect the  reasonable  estimates  of the
Borrowers of the results of operations and other information projected therein.

         11.13.  OPINIONS  OF  COUNSEL.  The  Administrative  Agent  shall  have
received a favorable legal opinion addressed to the Administrative  Agent, dated
as of the Closing Date, in form and substance satisfactory to the Administrative
Agent, from:

         (a) Kelly, Hart & Hallman, counsel to the Borrowers;

         (b)  Drinker,  Biddle & Reath,  special  counsel  to the  Borrowers  in
Pennsylvania;

         (c) Craft,  Fridkin & Rhyme,  LLC,  special counsel to the Borrowers in
Missouri;

         (d) McDermott,  Will & Emery,  special  counsel to the Borrowers in New
York and New Jersey;

         (e) Johnson Law Firm, special counsel to the Borrowers in Arkansas;

         (f) Crowe & Dunlevy, P.C. special counsel to the Borrowers in Oklahoma;
and

<PAGE>

                                      -80-

         (g)  Gold,  Weems,  Bruser,  Sues &  Rundell,  special  counsel  to the
Borrowers in Louisiana.

         11.14. ENVIRONMENTAL PERMIT CERTIFICATE. The Administrative Agent shall
have received an environmental  permit certificate,  in the form attached hereto
as  Exhibit  E,  from  the  Parent  satisfactory  to  the  Administrative  Agent
concerning  principal  operating permits at the Borrowers'  principal  operating
facilities.

         11.15. SENECA MEADOWS ACQUISITION.

         The  Administrative  Agent shall have  received  evidence  that (a) the
Seneca Meadows Acquisition has been successfully  completed,  (b) the promissory
note executed by IESI NY Corporation in favor of Frank DiMino in connection with
the Seneca Meadows  Acquisition in the aggregate amount of $125,000,000 has been
paid in full and (c) the promissory  note executed by Seneca Meadows in favor of
Frank DiMino in connection with the Seneca Meadows  Acquisition in the aggregate
amount of $60,000,000 has been paid in full.

         11.16. ENVIRONMENTAL ASSESSMENT OF SENECA MEADOWS LANDFILL.

         The   Administrative   Agent  shall  have  received  an   environmental
assessment of the Seneca Meadows  landfill  satisfactory  to the  Administrative
Agent from the Administrative Agent's independent environmental engineer.

         11.17. PAYMENT OF FEES. The Borrowers shall have paid all fees required
to be paid on the Closing Date in connection with this Credit  Agreement and the
other Loan Documents.

         11.18.   PAYOFF.   The   Administrative   Agent  shall  have   received
satisfactory evidence of the payment in full of the Prior Credit Agreement.

         11.19.  PATRIOT ACT. The  Administrative  Agent shall have received any
documentation  and other  information  required by bank  regulatory  authorities
under  applicable  "know your  customer"  and  anti-money  laundering  rules and
regulations, including without limitation the USA Patriot Act.

                        12. CONDITIONS TO ALL BORROWINGS.
                            ----------------------------

         The  obligations  of the  Lenders  to  make  any  Loan,  including  the
Revolving  Credit  Loan,  the  Term  Loan  and the  Swingline  Loan,  and of the
Administrative  Agent to issue,  extend or renew any Letter of  Credit,  in each
case  whether  on or after  the  Closing  Date,  shall  also be  subject  to the
satisfaction of the following conditions precedent:

         12.1.   REPRESENTATIONS   TRUE;  NO  EVENT  OF  DEFAULT.  Each  of  the
representations and warranties of each of the Borrowers contained in this Credit
Agreement,  the other Loan Documents or in any document or instrument  delivered
pursuant to or in connection with this Credit  Agreement shall be true as of the
date as of which  they were made and shall also be true at and as of the time of

<PAGE>

                                      -81-

the making of such Loan or the issuance, amendment, extension or renewal of such
Letter of Credit, with the same effect as if made at and as of that time (except
to the extent of changes resulting from  transactions  contemplated or permitted
by this Credit  Agreement and the other Loan Documents and changes  occurring in
the ordinary  course of business that singly or in the aggregate do not create a
Material  Adverse  Effect,  and to the  extent  that  such  representations  and
warranties  relate  expressly  to an  earlier  date) and no  Default or Event of
Default shall have occurred and be continuing.

         12.2. NO LEGAL IMPEDIMENT.  No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any  Lender  would make it  illegal  for such  Lender to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Administrative Agent would make it illegal for the
Administrative Agent to issue, extend or renew such Letter of Credit.

         12.3. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents  incident  thereto shall be satisfactory in substance and in
form to the  Lenders  and to the  Administrative  Agent  and the  Administrative
Agent's Special  Counsel,  and the Lenders,  the  Administrative  Agent and such
counsel shall have received all  information and such  counterpart  originals or
certified or other  copies of such  documents  as the  Administrative  Agent may
reasonably request.

         12.4. SUBORDINATED DEBT COMPLIANCE  CERTIFICATE.  If, after taking into
account the requested  Loans or Letters of Credit,  (a) the aggregate  amount of
all  outstanding  and  requested  Loans plus the Maximum  Drawing  Amount of all
outstanding  and  requested  Letters  of Credit  plus all  Unpaid  Reimbursement
Obligations, the Borrowers would be subject to the debt incurrence test pursuant
to Section  406(1) of the 2002  Subordinated  Note  Indenture,  or (b) the Fixed
Charge Coverage Ratio (as defined in the 2002 Subordinated Note Indenture) would
be  less  than  2.50:1.00,  the  Administrative  Agent  shall  have  received  a
certificate in the form of Exhibit H hereto  demonstrating  compliance  with the
indebtedness  covenants of the 2002  Subordinated  Note Indenture on a pro forma
historical basis as if such borrowing occurred on the first day of the period of
measurement.

                    13. EVENTS OF DEFAULT; ACCELERATION; ETC.
                        ------------------------------------

         13.1.  EVENTS OF  DEFAULT  AND  ACCELERATION.  If any of the  following
events  ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:

                  (a) the Borrowers shall fail to pay any principal of the Loans
         or any  Reimbursement  Obligation  when the same  shall  become due and

<PAGE>

                                      -82-

         payable, whether at the stated date of maturity or any accelerated date
         of maturity or at any other date fixed for payment;

                  (b) the Borrowers shall fail to pay any interest on the Loans,
         any Fees,  or other sums due  hereunder  or under any of the other Loan
         Documents,  within five (5) Business Days the same shall become due and
         payable, whether at the stated date of maturity or any accelerated date
         of maturity or at any other date fixed for payment;

                  (c)  the  Borrowers  shall  fail  to  comply  with  any of the
         covenants contained  inss.ss.8.2,  8.3, 8.5, 8.6, 8.9, 8.14, 8.16, 9 or
         10;

                  (d)  the  Borrowers  shall  fail  to  comply  with  any of the
         covenants contained inss.ss.8.4, 8.10 or 8.18 for ten (10) days;

                  (e) the Borrowers shall fail to perform any term,  covenant or
         agreement contained herein or in any of the other Loan Documents (other
         than those  specified  elsewhere in this  ss.14.1) for thirty (30) days
         after written notice of such failure has been given to the Borrowers by
         the Administrative Agent;

                  (f) any  representation or warranty of any of the Borrowers in
         this  Credit  Agreement  or any of the other Loan  Documents  or in any
         other  document or  instrument  delivered  pursuant to or in connection
         with  this  Credit  Agreement  shall  prove to have  been  false in any
         material respect upon the date when made or deemed to have been made or
         repeated;

                  (g) any of the  Borrowers  shall fail to pay at  maturity,  or
         within any  applicable  period of grace,  any  obligation  for borrowed
         money or credit received or in respect of any Capitalized  Leases in an
         aggregate amount in excess of $1,000,000, or fail to observe or perform
         any material term,  covenant or agreement contained in any agreement by
         which it is bound,  evidencing  or  securing  borrowed  money or credit
         received or in respect of any Capitalized Leases in an aggregate amount
         in  excess  of  $1,000,000  for such  period  of time as  would  permit
         (assuming the giving of  appropriate  notice if required) the holder or
         holders thereof or of any obligations  issued  thereunder to accelerate
         the maturity  thereof,  or any such holder or holders  shall rescind or
         shall have a right to rescind the purchase of any such obligations;

                  (h) any of the  Borrowers  shall  make an  assignment  for the
         benefit of  creditors,  or admit in  writing  its  inability  to pay or
         generally  fail to pay its debts as they mature or become due, or shall
         petition or apply for the appointment of a trustee or other  custodian,
         liquidator or receiver of such Borrower or of any  substantial  part of
         the  assets  of such  Borrower  or  shall  commence  any  case or other
         proceeding   relating   to  such   Borrower   under   any   bankruptcy,
         reorganization,   arrangement,   insolvency,   readjustment   of  debt,
         dissolution or liquidation or similar law of any  jurisdiction,  now or
         hereafter  in  effect,  or shall  take any  action to  authorize  or in

<PAGE>

                                      -83-

         furtherance  of any of  the  foregoing,  or if  any  such  petition  or
         application  shall be filed or any such case or other  proceeding shall
         be commenced against such Borrower and such Borrower shall indicate its
         approval  thereof,  consent  thereto  or  acquiescence  therein or such
         petition or application shall not have been dismissed within forty-five
         (45) days following the filing thereof;

                  (i) a decree or order is entered  appointing any such trustee,
         custodian,  liquidator or receiver or adjudicating  any of the bankrupt
         or  insolvent,  or  approving  a  petition  in any  such  case or other
         proceeding,  or a decree or order for  relief is  entered in respect of
         such Borrower in an involuntary  case under federal  bankruptcy laws as
         now or hereafter constituted;

                  (j) there shall remain in force, undischarged, unsatisfied and
         unstayed,  for more than thirty (30) days,  whether or not consecutive,
         any final  judgment  against  any of the  Borrowers,  that,  with other
         outstanding  final  judgments,   undischarged,  against  such  Borrower
         exceeds in the  aggregate  $1,000,000,  after  taking into  account any
         undisputed insurance coverage;

                  (k)  if  any  of  the  Loan  Documents   shall  be  cancelled,
         terminated, revoked or rescinded or the Administrative Agent's security
         interests,   mortgages  or  liens  in  a  substantial  portion  of  the
         Collateral  shall  cease to be  perfected,  or shall  cease to have the
         priority contemplated by the Security Documents, in each case otherwise
         than in  accordance  with the terms  thereof or with the express  prior
         written agreement, consent or approval of the Lenders, or any action at
         law, suit or in equity or other legal  proceeding to cancel,  revoke or
         rescind any of the Loan Documents shall be commenced by or on behalf of
         any  of  the  Borrowers  party  thereto  or  any  of  their  respective
         stockholders,  or any court or any  other  governmental  or  regulatory
         authority   or  agency  of   competent   jurisdiction   shall   make  a
         determination that, or issue a judgment, order, decree or ruling to the
         effect that, any one or more of the Loan Documents is illegal,  invalid
         or unenforceable  in accordance with the terms thereof;

                  (l) any of the  Borrowers  or any ERISA  Affiliate  incurs any
         liability to the PBGC or a Guaranteed Pension Plan pursuant to Title IV
         of ERISA in an aggregate amount exceeding $1,000,000,  or the Borrowers
         or any ERISA  Affiliate is assessed  withdrawal  liability  pursuant to
         Title IV of ERISA by a Multiemployer  Plan requiring  aggregate  annual
         payments  exceeding  $1,000,000,  or any of the  following  occurs with
         respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event, or
         a failure to make a required  installment or other payment  (within the
         meaning  ofss.302(f)(1)  of ERISA),  provided  that the  Administrative
         Agent determines in its reasonable discretion that such event (A) could
         be expected to result in liability of any of the  Borrowers to the PBGC
         or such  Guaranteed  Pension  Plan  in an  aggregate  amount  exceeding
         $1,000,000 and (B) could constitute grounds for the termination of such

<PAGE>

                                      -84-

         Guaranteed  Pension  Plan  by the  PBGC,  for  the  appointment  by the
         appropriate  United  States  District  Court of a trustee to administer
         such  Guaranteed  Pension Plan or for the imposition of a lien in favor
         of such  Guaranteed  Pension Plan; or (ii) the  appointment by a United
         States  District  Court of a  trustee  to  administer  such  Guaranteed
         Pension Plan; or (iii) the  institution  by the PBGC of  proceedings to
         terminate such  Guaranteed  Pension Plan;

                  (m) a Change of Control  shall  occur;

                  (n)  Charles  "Mickey"  Flood and Thomas  Cowee shall cease to
         serve as senior  management  of the Parent and shall not be replaced by
         other  Persons  reasonably  acceptable to the Required  Lenders  within
         ninety (90) days; or

                  (o) any  "Default" or "Event of Default"  under and as defined
         in the 2002 Subordinated Note Indenture or the 2002 Subordinated  Notes
         shall have occurred;

then,  and in any  such  event,  so  long as the  same  may be  continuing,  the
Administrative Agent may, and upon the request of the Required Lenders shall, by
notice in writing to the  Borrowers  declare all amounts  owing with  respect to
this  Credit  Agreement,  the  Notes  and  the  other  Loan  Documents  and  all
Reimbursement  Obligations  to be, and they shall  thereupon  forthwith  become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrowers; provided
that in the  event of any  Event  of  Default  specified  in  ss.ss.13.1(h)  and
13.1(i), all such amounts shall become immediately due and payable automatically
and  without any  requirement  of notice  from the  Administrative  Agent or any
Lender. Upon demand by the Required Lenders after the occurrence of any Event of
Default,  the Borrowers shall immediately  provide to the  Administrative  Agent
cash in an amount equal to the aggregate  Maximum  Drawing Amount of all Letters
of Credit  outstanding,  to be held by the  Administrative  Agent as  collateral
security for the Obligations.

         13.2.  TERMINATION OF COMMITMENTS.  If any one or more of the Events of
Default specified in ss.13.1(h) or ss.13.1(i) shall occur, any unused portion of
the credit hereunder shall forthwith  terminate and each of the Lenders shall be
relieved  of all  further  obligations  to make Loans to the  Borrowers  and the
Administrative  Agent shall be relieved  of all  further  obligations  to issue,
extend or renew  Letters of  Credit.  If any other  Event of Default  shall have
occurred and be continuing,  the Administrative  Agent may and, upon the request
of the Required Lenders, shall, by notice to the Borrowers, terminate the unused
portion of the credit  hereunder,  and upon such notice  being given such unused
portion of the credit  hereunder  shall  terminate  immediately  and each of the
Lenders  shall be  relieved  of all  further  obligations  to make Loans and the
Administrative  Agent shall be relieved  of all  further  obligations  to issue,
extend or renew  Letters of  Credit.  No  termination  of the  Revolving  Credit
Commitment hereunder shall relieve the Borrowers of any of the Obligations.

<PAGE>

                                      -85-

         13.3. REMEDIES.  In case any one or more of the Events of Default shall
have  occurred  and be  continuing,  and whether or not the  Lenders  shall have
accelerated the maturity of the Loans pursuant to ss.13.1,  each Lender, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Required  Lenders but not  otherwise,  proceed to protect and
enforce  its  rights  by suit in  equity,  action  at law or  other  appropriate
proceeding,  whether for the specific  performance  of any covenant or agreement
contained  in  this  Credit  Agreement  and  the  other  Loan  Documents  or any
instrument  pursuant  to which the  Obligations  to such  Lender are  evidenced,
including  as  permitted  by  applicable  law  the  obtaining  of the  ex  parte
appointment  of a  receiver,  and,  if such  amount  shall have  become  due, by
declaration  or otherwise,  proceed to enforce the payment  thereof or any other
legal or equitable  right of such Lender.  No remedy herein  conferred  upon any
Lender or the Administrative Agent or the holder of any Note or purchaser of any
Letter of Credit  Participation  is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative  and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.

         13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the  occurrence  or  during  the  continuance  of  any  Event  of  Default,  the
Administrative  Agent or any Lender,  as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise with
respect to the  realization  upon any of the  Collateral,  such monies  shall be
distributed for application as follows:

                  (a)  First,  to the  payment  of,  or (as the case may be) the
         reimbursement  of the  Administrative  Agent for or in  respect  of all
         reasonable costs,  expenses,  disbursements and losses which shall have
         been  incurred or sustained by the  Administrative  Agent in connection
         with the collection of such monies by the Administrative Agent, for the
         exercise,  protection or enforcement by the Administrative Agent of all
         or  any  of  the  rights,  remedies,   powers  and  privileges  of  the
         Administrative  Agent under this Credit  Agreement  or any of the other
         Loan  Documents  or in respect of the  Collateral  or in support of any
         provision of adequate indemnity to the Administrative Agent against any
         taxes or liens which by law shall have, or may have,  priority over the
         rights of the Administrative Agent to such monies;

                  (b)  Second,  to all  other  Obligations;  provided  that  (i)
         distributions  shall be made (A) pari passu among  Obligations  and (B)
         with respect to each type of Obligation  owing to the Lenders,  such as
         interest,  principal,  fees and expenses, among the Lenders pro rata in
         accordance  with the amount of all such  Obligations  outstanding,  and
         (ii)  the  Administrative  Agent  may in  its  discretion  make  proper
         allowance to take into account any Obligations (i.e. Letters of Credit)
         not then due and payable;

                  (c) Third,  upon  payment  and  satisfaction  in full or other
         provisions  for  payment in full  satisfactory  to the  Lenders and the
         Administrative  Agent of all of the Obligations,  to the payment of any
         obligations  required  to be  paid  pursuant  to  ss.9-608(a)(1)(C)  or

<PAGE>

                                      -86-

         9-615(a)(3)  of the Uniform  Commercial  Code of the State of New York;
         and

                  (d)  Fourth,  the  excess,  if any,  shall be  returned to the
         Borrowers or to such other Persons as are entitled thereto.

                                 14. THE AGENTS.
                                     ----------

         14.1. AUTHORIZATION.

                  (a) The Administrative Agent is authorized to take such action
         on behalf of each of the Lenders and to exercise all such powers as are
         hereunder  and under any of the other Loan  Documents  and any  related
         documents  delegated to the  Administrative  Agent,  together with such
         powers as are  reasonably  incident  thereto,  including the authority,
         without  the  necessity  of any  notice to or  further  consent  of the
         Lenders,  from  time to time to take any  action  with  respect  to any
         Collateral or the Security Documents which may be necessary to perfect,
         maintain  perfected or insure the priority of the security  interest in
         and  liens  upon  the  Collateral  granted  pursuant  to  the  Security
         Documents,  provided that no duties or  responsibilities  not expressly
         assumed  herein or therein shall be implied to have been assumed by the
         Administrative Agent.

                  (b) The relationship between the Administrative Agent and each
         of the  Lenders is that of an  independent  contractor.  The use of the
         term  "Administrative  Agent"  is for  convenience  only and is used to
         describe,  as  a  form  of  convention,   the  independent  contractual
         relationship  between the Administrative Agent and each of the Lenders.
         Nothing contained in this Credit Agreement nor the other Loan Documents
         shall be  construed  to  create  an  agency,  trust or other  fiduciary
         relationship between the Administrative Agent and any of the Lenders.

                  (c) As an independent  contractor  empowered by the Lenders to
         exercise certain rights and perform certain duties and responsibilities
         hereunder and under the other Loan Documents,  the Administrative Agent
         is  nevertheless  a  "representative"  of the Lenders,  as that term is
         defined in Article 1 of the Uniform  Commercial  Code,  for purposes of
         actions for the benefit of the  Lenders  and the  Administrative  Agent
         with respect to all collateral security and guaranties  contemplated by
         the  Loan  Documents.  Such  actions  include  the  designation  of the
         Administrative Agent as "secured party", "mortgagee" or the like on all
         financing  statements  and other  documents  and  instruments,  whether
         recorded or otherwise, relating to the attachment, perfection, priority
         or enforcement of any security  interests,  mortgages or deeds of trust
         in collateral security intended to secure the payment or performance of
         any of the  Obligations,  all for the  benefit of the  Lenders  and the
         Administrative Agent.

<PAGE>

                                      -87-

         14.2. EMPLOYEES AND ADMINISTRATIVE  AGENT. The Administrative Agent may
exercise its powers and execute its duties by or through employees or agents and
shall be  entitled to take,  and to rely on,  advice of counsel  concerning  all
matters  pertaining to its rights and duties under this Credit Agreement and the
other Loan Documents.  The Administrative Agent may utilize the services of such
Persons  as the  Administrative  Agent in its  sole  discretion  may  reasonably
determine,  and all  reasonable  fees and expenses of any such Persons  shall be
paid by the Borrowers.

         14.3. NO  LIABILITY.  Neither the  Administrative  Agent nor any of its
shareholders,  directors,  officers or employees nor any other Person  assisting
them in their duties nor any agent or employee thereof,  shall be liable for any
waiver,  consent or approval given or any action taken,  or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan  Documents,
or in connection  herewith or therewith,  or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person,  as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.

         14.4. NO REPRESENTATIONS.

                  14.4.1.   GENERAL.  The  Administrative  Agent  shall  not  be
         responsible  for the  execution or validity or  enforceability  of this
         Credit  Agreement,  the Notes, the Letters of Credit,  any of the other
         Loan Documents or any instrument at any time constituting,  or intended
         to constitute,  collateral  security for the Loans, or for the value of
         any such  collateral  security or for the validity,  enforceability  or
         collectability  of any such amounts owing with respect to the Loans, or
         for any recitals or  statements,  warranties  or  representations  made
         herein or in any of the other Loan  Documents or in any  certificate or
         instrument  hereafter furnished to it by or on behalf of the Borrowers,
         or be bound to ascertain or inquire as to the performance or observance
         of any of the terms,  conditions,  covenants or agreements herein or in
         any  instrument at any time  constituting,  or intended to  constitute,
         collateral  security for the Loans or to inspect any of the properties,
         books or records of the Borrowers.  The Administrative  Agent shall not
         be bound to ascertain  whether any notice,  consent,  waiver or request
         delivered  to it by the  Borrowers  or any Lender  shall have been duly
         authorized or is true, accurate and complete.  The Administrative Agent
         has not made nor does it now make any  representations  or  warranties,
         express or implied,  nor does it assume any  liability  to the Lenders,
         with respect to the credit  worthiness  or financial  conditions of the
         Borrowers.  Each Lender  acknowledges  that it has,  independently  and
         without reliance upon the Administrative Agent or any other Lender, and
         based upon such information and documents as it has deemed appropriate,
         made its own credit  analysis  and  decision  to enter into this Credit
         Agreement.

                  14.4.2.   CLOSING   DOCUMENTATION,   ETC.   For   purposes  of
         determining  compliance  with the conditions  set forth in ss.11,  each
         Lender that has executed this Credit  Agreement shall be deemed to have
         consented  to,  approved or  accepted,  or to be satisfied  with,  each

<PAGE>

                                      -88-

         document  and  matter   either  sent,   or  made   available,   by  the
         Administrative  Agent  or the  Arranger  to such  Lender  for  consent,
         approval,  acceptance  or  satisfaction,  or required  thereunder to be
         consented  to or  approved by or  acceptable  or  satisfactory  to such
         Lender,  unless an officer of the Administrative  Agent or the Arranger
         active upon the Borrowers' account shall have received notice from such
         Lender prior to the Closing Date  specifying  such  Lender's  objection
         thereto and such  objection  shall not have been withdrawn by notice to
         the Administrative  Agent or the Arranger to such effect on or prior to
         the Closing Date.

         14.5. PAYMENTS.

                  14.5.1.  PAYMENTS TO  ADMINISTRATIVE  AGENT.  A payment by the
         Borrowers  to the  Administrative  Agent  hereunder or under any of the
         other Loan  Documents for the account of any Lender shall  constitute a
         payment to such Lender.  The  Administrative  Agent agrees  promptly to
         distribute  to each  Lender  such  Lender's  pro rata share of payments
         received  by the  Administrative  Agent for the  account of the Lenders
         except as otherwise  expressly  provided  herein or in any of the other
         Loan Documents.

                  14.5.2.  DISTRIBUTION  BY  ADMINISTRATIVE  AGENT.  If  in  the
         opinion  of the  Administrative  Agent the  distribution  of any amount
         received by it in such  capacity  hereunder,  or under any of the other
         Loan  Documents  might  involve it in  liability,  it may refrain  from
         making  distribution  until its right to make  distribution  shall have
         been  adjudicated by a court of competent  jurisdiction.  If a court of
         competent  jurisdiction  shall  adjudge  that any amount  received  and
         distributed by the Administrative Agent is to be repaid, each Person to
         whom any such  distribution  shall have been made shall either repay to
         the  Administrative  Agent  its  proportionate  share of the  amount so
         adjudged  to be repaid or shall pay over the same in such manner and to
         such Persons as shall be determined by such court.

                  14.5.3.  DELINQUENT LENDERS.  Notwithstanding  anything to the
         contrary  contained  in this Credit  Agreement or any of the other Loan
         Documents,  any  Lender  that  fails  (a)  to  make  available  to  the
         Administrative  Agent its pro rata share of any Loan or to purchase any
         Letter of Credit  Participation or (b) to comply with the provisions of
         ss.16.1 with respect to making  dispositions and arrangements  with the
         other  Lenders,  where such  Lender's  share of any  payment  received,
         whether by setoff or  otherwise,  is in excess of its pro rata share of
         such  payments due and payable to all of the Lenders,  in each case as,
         when and to the full extent  required by the  provisions of this Credit
         Agreement, shall be deemed delinquent (a "Delinquent Lender") and shall
         be deemed a Delinquent  Lender until such time as such  delinquency  is
         satisfied. A Delinquent Lender shall be deemed to have assigned any and
         all  payments  due to it from the  Borrowers,  whether  on  account  of
         outstanding Loans, Unpaid Reimbursement Obligations,  interest, fees or
         otherwise,  to the remaining  nondelinquent Lenders for application to,

<PAGE>

                                      -89-

         and reduction of, their  respective pro rata shares of all  outstanding
         Loans and  Unpaid  Reimbursement  Obligations.  The  Delinquent  Lender
         hereby authorizes the Administrative  Agent to distribute such payments
         to the nondelinquent Lenders in proportion to their respective pro rata
         shares of all outstanding Loans and Unpaid Reimbursement Obligations. A
         Delinquent  Lender  shall  be  deemed  to  have  satisfied  in  full  a
         delinquency  when and if, as a result of  application  of the  assigned
         payments to all outstanding Loans and Unpaid Reimbursement  Obligations
         of the nondelinquent  Lenders,  the Lenders' respective pro rata shares
         of all  outstanding  Loans and Unpaid  Reimbursement  Obligations  have
         returned to those in effect  immediately  prior to such delinquency and
         without giving effect to the nonpayment causing such delinquency.

         14.6. HOLDERS OF NOTES. The Administrative Agent may deem and treat the
payee of any Note or the purchaser of any Letter of Credit  Participation as the
absolute owner or purchaser  thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.

         14.7. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold
harmless the  Administrative  Agent and its affiliates  from and against any and
all  claims,  actions  and suits  (whether  groundless  or  otherwise),  losses,
damages,  costs,  expenses  (including any expenses for which the Administrative
Agent or such affiliate has not been  reimbursed by the Borrowers as required by
ss.16.2),  and  liabilities  of every  nature and  character  arising  out of or
related to this Credit Agreement,  the Notes, or any of the other Loan Documents
or  the  transactions  contemplated  or  evidenced  hereby  or  thereby,  or the
Administrative  Agent's  actions taken  hereunder or  thereunder,  except to the
extent  that any of the same  shall be  directly  caused  by the  Administrative
Agent's willful misconduct or gross negligence.

         14.8. ADMINISTRATIVE AGENT AS LENDER. In its individual capacity, Fleet
shall have the same  obligations  and the same rights,  powers and privileges in
respect to its Commitment, the Loans made by it, the Letters of Credit issued by
it and as the purchaser of any Letter of Credit Participations, as it would have
were it not also the Administrative Agent.

         14.9.  RESIGNATION.  The Administrative Agent may resign at any time by
giving  sixty (60) days prior  written  notice  thereof to the  Lenders  and the
Borrowers. Upon any such resignation,  the Required Lenders shall have the right
to  appoint a  successor  Administrative  Agent.  Unless a  Default  or Event of
Default shall have occurred and be  continuing,  such  successor  Administrative
Agent  shall  be  reasonably  acceptable  to  the  Borrowers.  If  no  successor
Administrative  Agent shall have been so appointed  by the Required  Lenders and
shall have accepted such appointment  within thirty (30) days after the retiring
Administrative  Agent's  giving  of  notice of  resignation,  then the  retiring
Administrative  Agent  may,  on  behalf  of the  Lenders,  appoint  a  successor
Administrative  Agent, which shall be a financial institution having a rating of
not  less  than  "A" or its  equivalent  by  S&P.  Upon  the  acceptance  of any
appointment  as  Administrative  Agent  hereunder by a successor  Administrative

<PAGE>

                                      -90-

Agent, such successor Administrative Agent shall thereupon succeed to and become
vested  with all the  rights,  powers,  privileges  and  duties of the  retiring
Administrative Agent, and the retiring  Administrative Agent shall be discharged
from its duties and  obligations  hereunder.  After any retiring  Administrative
Agent's resignation,  the provisions of this Credit Agreement and the other Loan
Documents  shall  continue  in effect for its  benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.

         14.10.  NOTIFICATION  OF DEFAULTS  AND EVENTS OF  DEFAULT.  Each Lender
hereby  agrees that,  upon learning of the existence of a Default or an Event of
Default,  it  shall  promptly  notify  the  Administrative  Agent  thereof.  The
Administrative  Agent  hereby  agrees that upon receipt of any notice under this
ss.14.10 it shall  promptly  notify the other  Lenders of the  existence of such
Default or Event of Default.

         14.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing,  and whether or not  acceleration
of the Obligations shall have occurred,  the Administrative  Agent shall, if (a)
so requested by the  Required  Lenders and (b) the Lenders have  provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative  Agent may reasonably request,  proceed to
enforce the provisions of the Security  Documents  authorizing the sale or other
disposition  of all or any part of the  Collateral  and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral.  The Required Lenders may direct the Administrative Agent in
writing as to the  method and the extent of any such sale or other  disposition,
the Lenders  hereby  agreeing to indemnify  and hold the  Administrative  Agent,
harmless  from all  liabilities  incurred  in  respect of all  actions  taken or
omitted in accordance  with such  directions,  provided that the  Administrative
Agent  need  not  comply  with  any  such  direction  to  the  extent  that  the
Administrative  Agent reasonably believes the Administrative  Agent's compliance
with  such  direction  to  be  unlawful  or  commercially  unreasonable  in  any
applicable jurisdiction.

         14.12. ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.

         (a)  In  case  of  the  pendency  of  any   receivership,   insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other  judicial,  administrative  or like  proceeding or any  assignment for the
benefit  of  creditors  relative  to the  Borrowers,  the  Administrative  Agent
(irrespective of whether the principal of any Loan,  Reimbursement Obligation or
Unpaid  Reimbursement  Obligation  shall  then  be due  and  payable  as  herein
expressed  or by  declaration  or  otherwise  and  irrespective  of whether  the
Administrative  Agent  shall  have made any  demand on the  Borrowers)  shall be
entitled and  empowered,  by  intervention  in such  proceeding,  under any such
assignment or otherwise:

                  (i) to file and  prove a claim  for the  whole  amount  of the
         principal  and  interest  owing and  unpaid in  respect  of the  Loans,
         Reimbursement  Obligations or Unpaid Reimbursement  Obligations and all
         other  Obligations  that are owing and  unpaid  and to file such  other
         documents  as may be necessary or advisable in order to have the claims

<PAGE>

                                      -91-

         of the Lenders and the  Administrative  Agent  (including any claim for
         the reasonable  compensation,  expenses,  disbursements and advances of
         the Lenders and the  Administrative  Agent and their respective  agents
         and   counsel   and  all  other   amounts   due  the  Lenders  and  the
         Administrative  Agent under  ss.ss.2.3,  4.6, 5.1 and 16.2)  allowed in
         such proceeding or under any such assignment; and

                  (ii) to  collect  and  receive  any  monies or other  property
         payable or deliverable on any such claims and to distribute the same;

         (b)   Any   custodian,   receiver,   assignee,   trustee,   liquidator,
sequestrator or other similar  official in any such proceeding or under any such
assignment  is hereby  authorized  by each  Lender to make such  payments to the
Administrative  Agent and,  in the event  that the  Administrative  Agent  shall
consent to the making of such payments directly to the Lenders,  nevertheless to
pay to the Administrative Agent any amount due for the reasonable  compensation,
expenses,  disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under ss.ss.2.3,
4.6, 5.1 and 16.2.

         (c) Nothing contained herein shall authorize the  Administrative  Agent
to  consent  to or  accept  or  adopt  on  behalf  of any  Lender  any  plan  of
reorganization, arrangement, adjustment or composition affecting the Obligations
owed  to  such  Lender  or  the  rights  of  any  Lender  or  to  authorize  the
Administrative  Agent to vote in  respect of the claim of any Lender in any such
proceeding or under any such assignment.

         14.13.  DUTIES OF SYNDICATION  AGENT.  The Syndication  Agent shall not
have any right, power, obligation, liability,  responsibility or duty under this
Credit  Agreement or any of the other Loan Documents other than those applicable
to it in its capacity as a Lender.

                        15. ASSIGNMENT AND PARTICIPATION.
                            ----------------------------

         15.1. GENERAL CONDITIONS. The provisions of this Credit Agreement shall
be  binding  upon and  inure to the  benefit  of the  parties  hereto  and their
respective successors and assigns permitted hereby, except that no Borrowers may
assign or otherwise transfer any of its rights or obligations hereunder or under
any of the Loan Documents  without the prior written  consent of each Lender and
no Lender  may assign or  otherwise  transfer  any of its rights or  obligations
hereunder  except (a) to an Eligible  Assignee in accordance with the provisions
of ss.15.2,  (b) by way of  participation  in accordance  with the provisions of
ss.15.4 or (c) by way of pledge or assignment of a security  interest subject to
the  restrictions of ss.15.6 (and any other attempted  assignment or transfer by
any party  hereto  shall be null and void).  Nothing in this  Credit  Agreement,
expressed or implied,  shall be construed to confer upon any Person  (other than
the parties hereto,  their respective  successors and assigns  permitted hereby,
Participants  to the extent  provided in ss.15.4  and,  to the extent  expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and

<PAGE>

                                      -92-

the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Credit Agreement or any of the other Loan Documents.

         15.2.  ASSIGNMENTS.  Any Lender  may at any time  assign to one or more
Eligible  Assignees  all or a portion of its rights and  obligations  under this
Credit Agreement  (including all or a portion of its Revolving Credit Commitment
and the Loans at the time owing to it); provided that:

                  (a)  except  in the  cases  of an  assignment  of  the  entire
         remaining amount of the assigning  Lender's Revolving Credit Commitment
         or Term  Loan  Amount  or of an  assignment  to a  Lender  or a  Lender
         Affiliate,  the aggregate amount of the Revolving Credit  Commitment or
         Term Loan Amount or assigned shall not be less than  $1,000,000  (which
         shall be in the aggregate in the case of simultaneous  assignment to or
         by two or more Approved Funds) unless each of the Administrative  Agent
         and,  so long as no  Default or Event of Default  has  occurred  and is
         continuing,  the Borrowers  otherwise consent (each such consent not to
         be unreasonably withheld or delayed);

                  (b) any  assignment of a Revolving  Credit  Commitment or Term
         Loan Amount must be approved by the  Administrative  Agent and, so long
         as no Default or Event of Default has occurred and is  continuing,  the
         Parent (each such approval not to be unreasonably  withheld) unless the
         Person  that  is the  proposed  assignee  is  itself  a  Lender  with a
         Revolving  Credit  Commitment  or Term Loan Amount  (whether or not the
         proposed assignee would otherwise qualify as an Eligible Assignee); and

                  (c) the parties to each  assignment  shall execute and deliver
         to the Administrative Agent an Assignment and Acceptance, together with
         a processing and recordation fee of $3,500; provided that only one such
         fee shall be payable in the event of simultaneous  assignments to or by
         two or more Approved Funds, and the Eligible Assignee,  if it shall not
         be  a  Lender,   shall   deliver   to  the   Administrative   Agent  an
         Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to ss.15.3,  from and after the effective date specified in each  Assignment and
Acceptance,  the Eligible  Assignee  thereunder  shall be a party to this Credit
Agreement  and, to the extent of the interest  assigned by such  Assignment  and
Acceptance  have the  rights  and  obligations  of a Lender  under  this  Credit
Agreement,  and the  assigning  Lender  thereunder  shall,  to the extent of the
interest  assigned by such  Assignment  and  Acceptance,  be  released  from its
obligations  under this Credit  Agreement (and, in the case of an Assignment and
Acceptance  covering all of the assigning  Lender's rights and obligations under
this Credit  Agreement,  such Lender shall cease to be a party hereto) but shall
continue to be entitled to the  benefits of (i)  ss.ss.5.2.2,  5.6,  5.7 and 5.9
with respect to facts and circumstances occurring prior to the effective date of
such assignment and (ii) ss.16.3 notwithstanding such assignment. Any assignment
or transfer  by a Lender of rights or  obligations  under this Credit  Agreement
that does not comply with this  paragraph  shall be treated for purposes of this

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                                      -93-

Credit  Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with ss.15.4.

         15.3.  REGISTER.  The  Administrative  Agent,  acting  solely  for this
purpose  as an agent of the  Borrowers,  shall  maintain  at the  Administrative
Agent's Office a copy of each  Assignment  and Acceptance  delivered to it and a
register for the recordation of the names and addresses of the Lenders,  and the
Revolving  Credit  Commitments or Term Loan Amount of, and principal  amounts of
the Loans owing to, each Lender  pursuant to the terms  hereof from time to time
(the  "Register").  The entries in the  Register  shall be  conclusive,  and the
Borrowers,  the Administrative Agent and the Lenders may treat each Person whose
name is  recorded  in the  Register  pursuant  to the  terms  hereof as a Lender
hereunder for all purposes of this Credit Agreement,  notwithstanding  notice to
the contrary.  The Register  shall be available for  inspection by the Borrowers
and any Lender,  at any  reasonable  time and from time to time upon  reasonable
prior notice.

         15.4.  PARTICIPATIONS.  Any Lender may at any time, without the consent
of, or notice to, the Borrowers or the Administrative Agent, sell participations
to any Person (other than a natural person) (each, a "Participant")  in all or a
portion of such Lender's rights and/or  obligations  under this Credit Agreement
(including  all or a portion of its  Revolving  Credit  Commitment  or Term Loan
Amount  and/or  the  Loans  owing  to  it);  provided  that  (a)  such  Lender's
obligations under this Credit Agreement shall remain unchanged,  (b) such Lender
shall remain solely  responsible to the other parties hereto for the performance
of such  obligations  and (c) the Borrowers,  the  Administrative  Agent and the
other  Lenders  shall  continue to deal solely and directly  with such Lender in
connection  with  such  Lender's  rights  and  obligations   under  this  Credit
Agreement.  Any agreement or instrument  pursuant to which a Lender sells such a
participation  shall  provide  that such Lender  shall  retain the sole right to
enforce this Credit  Agreement  and to approve any  amendment,  modification  or
waiver of any provision of this Credit  Agreement;  provided that such agreement
or instrument may provide that such Lender will not,  without the consent of the
Participant,  agree to any amendment,  modification  or waiver that would reduce
the principal of or the interest rate on any Loans,  extend the term or increase
the amount of the Revolving Credit Commitment or Term Loan Amount of such Lender
as it relates to such  Participant,  reduce the amount of any  Commitment Fee or
Letter of Credit  Fees to which  such  Participant  is  entitled  or extend  any
regularly scheduled payment date for principal or interest.  Subject to ss.15.5,
each of the  Borrowers  agrees  that each  Participant  shall be entitled to the
benefits  of  ss.ss.5.2.2,  5.6,  5.7 and 5.9 to the same extent as if it were a
Lender and had acquired its interest by assignment  pursuant to ss.15.2.  To the
extent permitted by law, each Participant also shall be entitled to the benefits
of ss.16.1 as though it were a Lender,  provided such  Participant  agrees to be
subject to ss.16.1 as though it were a Lender.

         15.5. PAYMENTS TO PARTICIPANTS.  A Participant shall not be entitled to
receive any greater payment under  ss.ss.5.2.2,  5.6 and 5.7 than the applicable
Lender would have been  entitled to receive  with  respect to the  participation
sold  to  such  Participant,  unless  the  sale  of the  participation  to  such
Participant is made with the  Borrowers'  prior written  consent.  A Participant
that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the

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                                      -94-

benefits of ss.5.2.2 unless the Borrowers are notified of the participation sold
to  such  Participant  and  such  Participant  agrees,  for the  benefit  of the
Borrowers, to comply with ss.5.2.2 as though it were a Lender.

         15.6.  MISCELLANEOUS  ASSIGNMENT  PROVISIONS.  A Lender may at any time
grant a security  interest in all or any portion of its rights under this Credit
Agreement to secure obligations of such Lender, including without limitation (a)
any pledge or  assignment  to secure  obligations  to any of the twelve  Federal
Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C.  ss.341
and (b) with respect to any Lender that is a Fund,  to any lender or any trustee
for, or any other  representative  of, holders of obligations owed or securities
issued  by such Fund as  security  for such  obligations  or  securities  or any
institutional  custodian for such Fund or for such lender; provided that no such
grant shall release such Lender from any of its obligations  hereunder,  provide
any voting rights  hereunder to the secured party  thereof,  substitute any such
secured  party  for such  Lender  as a party  hereto  or  affect  any  rights or
obligations of the Borrowers or Administrative Agent hereunder.

         15.7.  ASSIGNEE OR PARTICIPANT  AFFILIATED  WITH THE BORROWERS.  If any
assignee Lender is an Affiliate of the Borrowers,  then any such assignee Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents  for  purposes  of  granting  consents  or waivers or for  purposes of
agreeing to amendments or other  modifications  to any of the Loan  Documents or
for purposes of making requests to the Administrative  Agent pursuant to ss.13.1
or ss.13.2, and the determination of the Required Lenders shall for all purposes
of this Credit  Agreement and the other Loan Documents be made without regard to
such  assignee   Lender's   interest  in  any  of  the  Loans  or  Reimbursement
Obligations. If any Lender sells a participating interest in any of the Loans or
Reimbursement  Obligations to a Participant,  and such Participant is one of the
Borrowers or an Affiliate of the Borrowers,  then such  transferor  Lender shall
promptly notify the Administrative Agent of the sale of such participation. Such
transferor Lender shall have no right to vote as a Lender hereunder or under any
of the other Loan Documents for purposes of granting  consents or waivers or for
purposes of agreeing to amendments or modifications to any of the Loan Documents
or for  purposes of making  requests  to the  Administrative  Agent  pursuant to
ss.13.1 or ss.13.2 to the extent that such  participation is beneficially  owned
by the Borrowers or any Affiliate of the Borrowers, and the determination of the
Required  Lenders shall for all purposes of this Credit  Agreement and the other
Loan Documents be made without regard to the interest of such transferor  Lender
in the Loans or Reimbursement Obligations to the extent of such participation.

         15.8. SPECIAL PURPOSE FUNDING VEHICLE.  Notwithstanding anything to the
contrary contained in this ss.15, any Lender other than a Lender affiliated with
a Borrower (a "Granting  Lender") may grant to a special purpose funding vehicle
(an "SPC") of such Granting  Lender,  identified as such in writing from time to
time  delivered  by the  Granting  Lender  to the  Administrative  Agent and the
Borrowers,  the option to provide to the  Borrowers  all or any part of any Loan
that such Granting  Lender would otherwise be obligated to make to the Borrowers
pursuant to this  Credit  Agreement,  provided  that (a)  nothing  herein  shall
constitute a commitment  to make any Loan by any SPC, (b) the Granting  Lender's

<PAGE>

                                      -95-

obligations under this Credit Agreement shall remain unchanged, (c) the Granting
Lender  should  retain the sole right to enforce  this Credit  Agreement  and to
approve any  amendment,  modification  or waiver of any provision of this Credit
Agreement  and (d) 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  Revolving  Credit  Commitment  of the
Granting  Lender  to the same  extent,  and as if,  such  Loan  were made by the
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any expense  reimbursement,  indemnity or similar payment  obligation under this
Credit  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 Credit Agreement) that, prior to
the date that is one year and one day after the later of (i) the payment in full
of all outstanding senior  indebtedness of any SPC and (ii) the Revolving Credit
Loan Maturity Date, or, as applicable,  the Term Loan Maturity Date, it will not
institute against, or join any other person in instituting against, such SPC any
bankruptcy,  reorganization,  arrangement, insolvency or liquidation proceedings
or similar  proceedings  under the laws of the  United  States of America or any
State thereof. In addition,  notwithstanding  anything to the contrary contained
in this ss.15.8, any SPC may (A) with notice to, but (except as specified below)
without the prior written consent of, the Borrowers or the Administrative  Agent
and without paying any  processing fee therefor,  assign all or a portion of its
interests in any Loans to its Granting  Lender or to any financial  institutions
(consented to by the Administrative Agent and, so long as no Default or Event of
Default has occurred and is continuing,  the Borrowers, which consents shall not
be  unreasonably   withheld  or  delayed)  providing   liquidity  and/or  credit
facilities  to or for the account of such SPC to fund the Loans made by such SPC
or to support the  securities (if any) issued by such SPC to fund such Loans and
(B) disclose on a confidential basis any non-public  information relating to its
Loans (other than financial  statements  referred to in ss.ss.7.4 or 8.4) to any
rating  agency,  commercial  paper dealer or provider of a surety,  guarantee or
credit or liquidity  enhancement to such SPC. In no event shall the Borrowers be
obligated  to pay to an SPC that has made a Loan  any  greater  amount  than the
Borrowers  would have been  obligated to pay under this Credit  Agreement if the
Granting  Lender had made such Loan.  An amendment  to this ss.15.8  without the
written  consent of an SPC shall be ineffective  insofar as it alters the rights
and obligations of such SPC.

                     16. PROVISIONS OF GENERAL APPLICATIONS.
                         ----------------------------------

         16.1. SETOFF.  The Borrowers hereby grant to the  Administrative  Agent
and each of the Lenders a continuing lien, security interest and right of setoff
as security for all liabilities and obligations to the Administrative  Agent and
each Lender,  whether now existing or  hereafter  arising,  upon and against all
deposits,  credits, collateral and property, now or hereafter in the possession,
custody,  safekeeping or control of the  Administrative  Agent or such Lender or
any Lender  Affiliate and their  successors  and assigns or in transit to any of
them.  Regardless of the adequacy of any  collateral,  if any of the Obligations
are due and  payable  and have not been paid or any Event of Default  shall have

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                                      -96-

occurred,  any deposits or other sums credited by or due from any of the Lenders
to such Borrower and any  securities  or other  property of such Borrower in the
possession  of such Lender may be applied to or set off by such  Lender  against
the  payment  of  Obligations  and any and all  other  liabilities,  direct,  or
indirect,  absolute  or  contingent,  due or to  become  due,  now  existing  or
hereafter  arising,  of such  Borrower  to such  Lender.  ANY AND ALL  RIGHTS TO
REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES  WITH RESPECT TO ANY OTHER
COLLATERAL  WHICH  SECURES THE  OBLIGATIONS,  PRIOR TO  EXERCISING  ITS RIGHT OF
SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWERS
ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

         16.2.  EXPENSES.  The Borrowers  jointly and severally agree to pay (a)
the reasonable  costs of producing and reproducing  this Credit  Agreement,  the
other Loan Documents and the other agreements and instruments  mentioned herein,
(b) any taxes  (including any interest and penalties in respect thereto) payable
by the  Administrative  Agent or any of the Lenders (other than taxes based upon
the Administrative Agent's or any Lender's net income) on or with respect to the
transactions  contemplated  by  this  Credit  Agreement  (the  Borrowers  hereby
agreeing to  indemnify  the  Administrative  Agent and each Lender with  respect
thereto),   (c)  the  reasonable  fees,   expenses  and   disbursements  of  the
Administrative   Agent's   Special   Counsel   or  any  local   counsel  to  the
Administrative  Agent incurred in connection with the preparation,  syndication,
administration  or  interpretation  of the Loan Documents and other  instruments
mentioned  herein,  each  closing  hereunder,  any  amendments,   modifications,
approvals,  consents or waivers hereto or hereunder,  or the cancellation of any
Loan Document upon payment in full in cash of all of the Obligations or pursuant
to any terms of such Loan Document for providing for such cancellation,  (d) the
fees,  expenses  and  disbursements  of the  Administrative  Agent or any of its
affiliates incurred by the Administrative  Agent or such affiliate in connection
with the preparation, syndication,  administration or interpretation of the Loan
Documents and other instruments mentioned herein,  including all title insurance
premiums and surveyor,  engineering,  appraisal and examination charges, (e) any
fees,  costs,  expenses and bank  charges,  including  bank charges for returned
checks,  incurred by the  Administrative  Agent in establishing,  maintaining or
handling  agency  accounts,  lock  box  accounts  and  other  accounts  for  the
collection of any of the Collateral,  (f) all reasonable  out-of-pocket expenses
(including  without  limitation  reasonable  attorneys'  fees and  costs,  which
attorneys  may be  employees  of any  Lender or the  Administrative  Agent,  and
reasonable consulting,  accounting, appraisal, investment bankruptcy and similar
professional  fees and  charges)  incurred  by any Lender or the  Administrative
Agent in connection  with (i) the enforcement of or preservation of rights under
any of the Loan Documents  against the Borrowers or the  administration  thereof
after the  occurrence of a Default or Event of Default and (ii) any  litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to any Lender's or the  Administrative  Agent's  relationship with the Borrowers
and (g) all reasonable  fees,  expenses and  disbursements  of any Lender or the
Administrative  Agent  incurred in connection  with UCC  searches,  UCC filings,
intellectual  property searches or intellectual  property filings. The covenants

<PAGE>

                                      -97-

contained in this ss.16.2 shall survive  payment or  satisfaction in full of all
of the Obligations.

         16.3.  INDEMNIFICATION.  The Borrowers  jointly and severally  agree to
indemnify and hold harmless the  Administrative  Agent,  its  affiliates and the
Lenders  and their  respective  Related  Parties  from and  against  any and all
claims, actions and suits whether groundless or otherwise,  and from and against
any and all  liabilities,  losses,  damages  and  expenses  of every  nature and
character  arising  out of  this  Credit  Agreement  or any  of the  other  Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed  use by the  Borrowers  of the proceeds of any of the
Loans or Letters of Credit,  (b) the reversal or withdrawal  of any  provisional
credits granted by the Administrative Agent upon the transfer of funds from lock
box, bank agency,  concentration accounts or otherwise under any cash management
arrangements  with the Borrowers or in connection with the provisional  honoring
of  funds  transfers,   checks  or  other  items,  (c)  any  actual  or  alleged
infringement of any patent, copyright,  trademark, service mark or similar right
of the Borrowers comprised in the Collateral, (d) the Borrowers entering into or
performing this Credit  Agreement or any of the other Loan Documents or (e) with
respect  to the  Borrowers  and their  respective  properties  and  assets,  the
violation of any Environmental Law,  Disposal,  Release or threatened Release of
any  Hazardous  Substances  or any action,  suit,  proceeding  or  investigation
brought or threatened with respect to any Hazardous Substances  (including,  but
not limited to, claims with respect to wrongful death, personal injury or damage
to property),  in each case including,  without limitation,  the reasonable fees
and disbursements of counsel and allocated costs of internal counsel incurred in
connection  with any such  investigation,  litigation  or other  proceeding.  In
litigation,  or the  preparation  therefor,  the Lenders and the  Administrative
Agent and its  affiliates  shall be entitled to select their own counsel and, in
addition to the foregoing  indemnity,  the Borrowers  agrees to pay promptly the
reasonable  fees and  expenses of such  counsel.  If, and to the extent that the
obligations of the Borrower under this ss.16.3 are unenforceable for any reason,
the Borrowers  hereby agree to make the maximum  contribution  to the payment in
satisfaction of such obligations  which is permissible under applicable law. The
covenants  contained in this ss.16.3 shall survive  payment or  satisfaction  in
full of all other Obligations.

         16.4. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

                  16.4.1.   CONFIDENTIALITY.   Each  of  the   Lenders  and  the
         Administrative  Agent  agrees,  on  behalf  of  itself  and each of its
         affiliates, directors, officers, employees and representatives,  to use
         reasonable  precautions to keep confidential,  in accordance with their
         customary procedures for handling confidential  information of the same
         nature and in  accordance  with safe and sound banking  practices,  any
         non-public information supplied to it by the Borrowers pursuant to this
         Credit   Agreement   that  is   identified  by  such  Person  as  being
         confidential  at the time the same is  delivered  to the Lenders or the
         Administrative  Agent,  provided  that  nothing  herein shall limit the
         disclosure of any such  information  (a) after such  information  shall
         have become public other than through a violation of this  ss.16.4,  or
         becomes available to any of the Lenders or the Administrative  Agent on
         a nonconfidential basis from a source other than the Borrowers,  (b) to

<PAGE>

                                      -98-

         the extent required by statute,  rule,  regulation or judicial process,
         (c) to counsel for any of the Lenders or the Administrative  Agent, (d)
         to bank examiners or any other regulatory authority having jurisdiction
         over  any  Lender  or  the  Administrative  Agent,  or to  auditors  or
         accountants,  (e)  to  the  Administrative  Agent,  any  Lender  or any
         Financial Affiliate, (f) in connection with any litigation to which any
         one or more of the Lenders,  the Administrative  Agent or any Financial
         Affiliate is a party,  or in connection  with the enforcement of rights
         or remedies hereunder or under any other Loan Document, (g) to a Lender
         Affiliate or a Subsidiary or affiliate of the Administrative Agent, (h)
         to any actual or  prospective  assignee or participant or any actual or
         prospective  counterparty  (or its  advisors) to any swap or derivative
         transactions  referenced  to  credit or other  risks or events  arising
         under this Credit  Agreement or any other Loan Document so long as such
         assignee,  pledgee,  participant or  counterparty,  as the case may be,
         agrees to be bound by the  provisions of ss.16.4 , (i) with the consent
         of the  Borrowers  and  (j)  to  any  direct  or  indirect  contractual
         counterparty  in swap  agreements  or such  contractual  counterparty's
         advisor  (so  long as such  contractual  counterparty  or  professional
         advisor  to such  contractual  counterparty  agrees  to be bound by the
         provisions of this  ss.16.4.1).  Moreover,  each of the  Administrative
         Agent,  the Lenders and any  Financial  Affiliate  is hereby  expressly
         permitted  by the  Borrowers  to  refer  to any  of  the  Borrowers  in
         connection with any advertising,  promotion or marketing  undertaken by
         the Administrative  Agent, such Lender or such Financial Affiliate and,
         for  such  purpose,  the  Administrative  Agent,  such  Lender  or such
         Financial  Affiliate  may utilize any trade  name,  trademark,  logo or
         other distinctive  symbol associated with the Borrowers or any of their
         businesses.  Notwithstanding  anything  herein  to  the  contrary,  the
         Administrative Agent, each Lender and the respective Affiliates of each
         of the foregoing (and the  respective  partners,  directors,  officers,
         employees,   agents,   advisors  and  other   representatives   of  the
         aforementioned  Persons),  and any other party, may disclose to any and
         all Persons,  without  limitation of any kind (a) any information  with
         respect  to the U.S.  federal  and state  income tax  treatment  of the
         transactions  contemplated hereby and any facts that may be relevant to
         understanding  the U.S.  federal or state income tax  treatment of such
         transactions ("tax structure"),  which facts shall not include for this
         purpose the names of the parties or any other Person named  herein,  or
         information  that would  permit  identification  of the parties or such
         other  Persons,  or any pricing  terms or other  nonpublic  business or
         financial  information  that is unrelated to such tax  treatment or tax
         structure,  and (b) all  materials of any kind  (including  opinions or
         other  tax  analyses)   that  are  provided  to  the   Borrowers,   the
         Administrative  Agent or such Lender  relating to such tax treatment or
         tax  structure;  provided  that with respect to any document or similar
         item  that in  either  case  contains  information  concerning  the tax
         treatment  or tax  structure  of  the  transaction  as  well  as  other
         information,  this  sentence  shall only apply to such  portions of the
         document  or  similar  item  that  relate to the tax  treatment  or tax
         structure of the Loans, Letters of Credit and transactions contemplated
         hereby.

                  16.4.2. PRIOR NOTIFICATION.  Unless specifically prohibited by
         applicable   law  or  court   order,   each  of  the  Lenders  and  the
         Administrative  Agent shall,  prior to disclosure  thereof,  notify the

<PAGE>

                                      -99-

         Borrowers  of  any  request  for  disclosure  of  any  such  non-public
         information by any governmental agency or representative thereof (other
         than any such request in connection  with an examination of such Lender
         by such governmental agency) or pursuant to legal process.

                  16.4.3.   OTHER.   In  no  event   shall  any  Lender  or  the
         Administrative  Agent be obligated or required to return any  materials
         furnished  to it or  any  Financial  Affiliate  by the  Borrowers.  The
         obligations  of each Lender  under this  ss.16.4  shall  supersede  and
         replace the obligations of such Lender under any confidentiality letter
         in respect of this financing signed and delivered by such Lender to the
         Borrowers  prior to the date  hereof  and  shall  be  binding  upon any
         assignee of, or purchaser of any  participation in, any interest in any
         of the Loans or Reimbursement Obligations from any Lender.

         16.5.   SURVIVAL  OF  COVENANTS,   ETC.  All   covenants,   agreements,
representations  and warranties  made herein,  in the Notes, in any of the other
Loan Documents or in any documents or other papers  delivered by or on behalf of
the  Borrowers  pursuant  hereto shall be deemed to have been relied upon by the
Lenders  and  the  Administrative   Agent,   notwithstanding  any  investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders  of any of the Loans  and the  issuance,  extension  or  renewal  of any
Letters of Credit, as herein contemplated,  and shall continue in full force and
effect  so long as any  Letter of Credit or any  amount  due under  this  Credit
Agreement or the Notes or any of the other Loan Documents remains outstanding or
any Lender has any obligation to make any Loans or the Administrative  Agent has
any  obligation  to issue,  extend or renew any Letter of  Credit,  and for such
further time as may be otherwise  expressly  specified in this Credit Agreement.
All  statements  contained in any  certificate  or other paper  delivered to any
Lender or the Administrative  Agent at any time by or on behalf of the Borrowers
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by such Borrower hereunder.

         16.6.  NOTICES.  Except as otherwise  expressly provided in this Credit
Agreement,  all  notices and other  communications  made or required to be given
pursuant  to  this  Credit  Agreement  or the  Notes  or any  Letter  of  Credit
Applications  shall be in  writing  and shall be  delivered  in hand,  mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight  courier,  or sent by  telegraph,  telecopy,  facsimile  or telex  and
confirmed by delivery via courier or postal service, addressed as follows:

                  (a) if to the  Borrowers,  at  IESI  Corporation,  2301  Eagle
         Parkway, Suite 200, Fort Worth, Texas 76117,  Attention:  Thomas Cowee,
         Senior Vice President and Chief Financial  Officer,  fax number:  (817)
         632-4542,  or at such other address for notice as the  Borrowers  shall
         last have furnished in writing to the Person giving the notice;

<PAGE>

                                     -100-

                  (b) if to the  Administrative  Agent,  at 100 Federal  Street,
         Boston,  Massachusetts  02110,  USA,  Attention:  Timothy  M.  Laurion,
         Managing Director,  Mail Stop MA DE 10008H, fax number:  (617) 434-2160
         or such other address for notice as the Administrative Agent shall last
         have furnished in writing to the Person giving the notice; and

                  (c) if to any Lender,  at such  Lender's  address set forth on
         Schedule 1 hereto,  or such  other  address  for notice as such  Lender
         shall have last furnished in writing to the Person giving the notice.

         Any such  notice or demand  shall be deemed to have been duly  given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed,  at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified  first-class mail,  postage prepaid,  on
the third  Business  Day  following  the  mailing  thereof.  Any notice or other
communication  to be made  hereunder  or under the Notes or any Letter of Credit
Applications, even if otherwise required to be in writing under other provisions
of this Credit Agreement,  the Notes or any Letter of Credit  Applications,  may
alternatively be made in an electronic record transmitted  electronically  under
such  authentication and other procedures as the parties hereto may from time to
time  agree in  writing  (but not an  electronic  record),  and such  electronic
transmission shall be effective at the time set forth in such procedures. Unless
otherwise expressly provided in such procedures, such an electronic record shall
be equivalent to a writing under the other provisions of this Credit  Agreement,
the Notes or any Letter of Credit Applications, and such authentication, if made
in compliance  with the  procedures  so agreed by the parties  hereto in writing
(but not an electronic  record),  shall be  equivalent to a signature  under the
other  provisions  of this Credit  Agreement,  the Notes or any Letter of Credit
Applications.

         16.7.  GOVERNING LAW. THIS CREDIT  AGREEMENT  AND,  EXCEPT AS OTHERWISE
SPECIFICALLY  PROVIDED  THEREIN,  EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL  PURPOSES BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK (EXCLUDING
THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW OTHER THAN GENERAL OBLIGATIONS
LAW SS.5-1401 AND SS.5-1402). EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE
ENFORCEMENT  OF THIS CREDIT  AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY
AND OF THE UNITED STATED  DISTRICT  COURT OF THE SOUTHERN  DISTRICT OF NEW YORK,
AND ANY  APPELLATE  COURT FROM ANY  THEREOF  AND  CONSENTS  TO THE  NONEXCLUSIVE
JURISDICTION  OF SUCH  COURT AND  SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE
UPON THE  BORROWERS  BY MAIL AT THE ADDRESS  SPECIFIED  IN SS.16.6.  EACH OF THE
BORROWERS  HEREBY WAIVES ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH  SUIT OR ANY SUCH  COURT OR THAT SUCH  SUIT IS  BROUGHT  IN AN
INCONVENIENT COURT.

<PAGE>

                                     -101-

         16.8.  HEADINGS.   The  captions  in  this  Credit  Agreement  are  for
convenience  of  reference  only and  shall not  define or limit the  provisions
hereof.

         16.9. COUNTERPARTS.  This Credit Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall  constitute one instrument.  In proving this Credit  Agreement it
shall not be necessary to produce or account for more than one such  counterpart
signed by the party against whom enforcement is sought. Delivery by facsimile by
any of the  parties  hereto  of an  executed  counterpart  hereof or of any Loan
Document or of any  amendment or waiver  hereto or thereto shall be as effective
as an original  executed  counterpart  hereof or thereof or of such amendment or
waiver  and shall be  considered  a  representation  that an  original  executed
counterpart  hereof or thereof or such amendment or waiver,  as the case may be,
will be delivered.

         16.10.  ENTIRE  AGREEMENT,  ETC.  The  Loan  Documents  and  any  other
documents  executed  in  connection  herewith  or  therewith  express the entire
understanding  of the  parties  with  respect to the  transactions  contemplated
hereby.  Neither  this  Credit  Agreement  nor any term  hereof may be  changed,
waived, discharged or terminated, except as provided in ss.16.12.

         16.11.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY WAIVES
ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS CREDIT AGREEMENT,  THE NOTES OR ANY OF THE OTHER
LOAN  DOCUMENTS,  ANY  RIGHTS OR  OBLIGATIONS  HEREUNDER  OR  THEREUNDER  OR THE
PERFORMANCE OF SUCH RIGHTS AND  OBLIGATIONS OR ANY COURSE OF CONDUCT,  COURSE OF
DEALINGS,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN)  OR  ACTIONS  OF ANY PARTY,
INCLUDING  ANY COURSE OF CONDUCT,  COURSE OF DEALINGS,  STATEMENTS OR ACTIONS OF
THE  ADMINISTRATIVE  AGENT OR ANY LENDER RELATING TO THE  ADMINISTRATION  OF THE
LOANS OR  ENFORCEMENT  OF THE LOAN DOCUMENTS AND AGREES THAT IT WILL NOT SEEK TO
CONSOLIDATE  ANY SUCH ACTION WITH ANY OTHER  ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN  WAIVED.  Except as  prohibited  by law,  each of the parties
hereto hereby waives any right it may have to claim or recover in any litigation
referred  to in the  preceding  sentence  any  special,  exemplary,  punitive or
consequential  damages or any damages  other than,  or in  addition  to,  actual
damages.  Each of the Borrowers (a) certifies that no  representative,  agent or
attorney of any Lender or the Administrative Agent has represented, expressly or
otherwise,  that such Lender or the Administrative Agent would not, in the event
of litigation,  seek to enforce the foregoing  waivers and (b) acknowledges that
each of the Administrative Agent and the Lenders have been induced to enter into
this Credit  Agreement  and the other Loan  Documents to which it is a party by,
among other things, the waivers and certifications contained herein.

         16.12. CONSENTS,  AMENDMENTS,  WAIVERS, ETC. (a) Except as set forth in
subsections (b) and (c) below, any consent or approval  required or permitted by
this Credit  Agreement to be given by the Lenders may be given,  and any term of

<PAGE>

                                     -102-

this Credit Agreement,  the other Loan Documents or any other instrument related
hereto or mentioned herein may be amended,  and the performance or observance by
the Borrowers of any terms of this Credit Agreement, the other Loan Documents or
such other  instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively)  with, but only with, the written consent of the Borrowers and
the written consent of the Required Lenders.

         (b) No amendment,  modification or waiver with respect to the following
shall be effective  without the written consent of the Borrowers and each Lender
directly affected thereby:

                  (i) reduce or forgive the  principal  amount of any  Revolving
         Credit  Loans  or Term  Loan,  as the  case  may be,  or  Reimbursement
         Obligations,  or reduce the rate of  interest on the  Revolving  Credit
         Loans or applicable Term Loan, as the case may be, or the amount of the
         Commitment Fee or Letter of Credit Fees;

                  (ii) increase the amount of such Revolving  Lender's Revolving
         Credit Commitment or such Term Lender's Term Loan Amount, or extend the
         expiration  date of such Revolving  Credit  Lender's  Revolving  Credit
         Commitment;

                  (iii)  postpone or extend the  Revolving  Credit Loan Maturity
         Date or the Term Loan  Maturity Date or any other  regularly  scheduled
         dates for  payments  of  principal  of, or  interest  on,  the Loans or
         Reimbursement  Obligations or any Fees or other amounts payable to such
         Lender (it being  understood that any vote to rescind any  acceleration
         made pursuant to ss.13.1 of amounts owing with respect to the Loans and
         other  Obligations  shall  require  only thE  approval of the  Required
         Lenders);

                  (iv) other than  pursuant to a  transaction  permitted  by the
         terms of this Credit Agreement, release (A) all or substantially all of
         the Collateral  (excluding,  if any Borrower becomes a debtor under the
         federal Bankruptcy Code, the release of "cash  collateral",  as defined
         in Section  363(a) of the federal  Bankruptcy  Code  pursuant to a cash
         collateral  stipulation  with  the  debtor  approved  by  the  Required
         Lenders) or (B) any Borrower of its Obligations hereunder;

                  (v)  amend or  modify  the  provisions  of  ss.3.6  (Mandatory
         Prepayments  of the Term Loan),  ss.13.4  (Distribution  of  Collateral
         Proceeds or ss.17 (Pari Passu Treatment);

         (c) No  amendment,  modification  or waiver  shall  without the written
consent of all of the Lenders, amend or waive this ss.16.12 or the definition of
"Required Lenders";

<PAGE>

                                     -103-

         (d) No  amendment,  modification  or waiver  shall  without the written
consent of the Administrative Agent, amend or waive ss.ss.2.10 or 14, the amount
or time of payment of any fees payable for the Administrative Agent's account or
any LetTeR of Credit Fees payable for the Administrative  Agent's account or any
other provision applicable to the Administrative Agent.

No waiver  shall  extend to or affect any  obligation  not  expressly  waived or
impair any right consequent  thereon.  No course of dealing or delay or omission
on the part of the  Administrative  Agent or any Lender in exercising  any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrowers  shall entitle the Borrowers to other or further
notice or demand in similar or other circumstances.

         16.13.  BORROWERS'   REPRESENTATIVE.   Each  of  the  Borrowers  hereby
irrevocably appoints the Parent as such Borrower's  representative and agent for
all purposes under this Credit Agreement and authorizes the Parent, on behalf of
each such  Borrower  and in each such  Borrower's  name to give and  receive all
notices and documents,  certificates  and instruments to be given or received by
the  Borrowers or any of them in connection  with this Credit  Agreement and the
other  Loan  Documents,  including  receipt  of  service  of  legal  process  in
connection with any suit or proceeding  arising under, or in connection with the
transactions  contemplated by this Credit Agreement,  delivery of Loan Requests,
Conversion  Requests,  Compliance  Certificates  and  requests  for  waivers and
amendments  and  to  acknowledge  or  consent  to  any  amendments,  waivers  or
assignments.

         16.14.  SEVERABILITY.  The  provisions  of this  Credit  Agreement  are
severable  and if any one clause or  provision  hereof  shall be held invalid or
unenforceable in whole or in part in any  jurisdiction,  then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such  jurisdiction,  and shall not in any manner affect such clause or provision
in any other  jurisdiction,  or any other  clause or  provision  of this  Credit
Agreement in any jurisdiction.

                            17. PARI PASSU TREATMENT.
                                --------------------

         (a) Following the occurrence and during the continuance of any Event of
Default, each Lender agrees that if it shall, through the exercise of a right of
banker's lien, setoff or counterclaim  against any Borrower (pursuant to ss.16.1
or  otherwise),  including  a secured  claim  under  Section  506 of the federal
Bankruptcy  Code or other security or interest  arising from or in lieu of, such
secured claim, received by such Bank under any applicable bankruptcy, insolvency
or other similar law or otherwise,  obtain payment (voluntary or involuntary) in
respect of the Loans, and other  Obligations held by it as a result of which the
unpaid  principal  portion of the Loans and the Obligations  held by it shall be
proportionately  less  than  the  unpaid  principal  portion  of the  Loans  and
Obligations held by any other Lender, it shall be deemed to have  simultaneously
purchased from such other Lender a  participation  in the Loans and  Obligations
held by such other Lender,  so that the aggregate unpaid principal amount of the
Loans,  Obligations and  participations  in Loans and  Obligations  held by each
Lender shall be in the same proportion to the aggregate  unpaid principal amount

<PAGE>

                                     -104-

of the Loans and  Obligations  then  Outstanding as the principal  amount of the
Loans and other  Obligations held by it prior to such exercise of banker's lien,
setoff  or  counterclaim  was to the  principal  amount  of all  Loans and other
Obligations  outstanding  prior to such  exercise  of banker's  lien,  setoff or
counterclaim;  provided,  however,  that if any such  purchase or  purchases  or
adjustments  shall be made  pursuant to this ss.17 and the  payment  giving rise
thereto shall thereafter be recovered, sucH purchase or purchases or adjustments
shall be  rescinded to the extent of such  recovery  and the  purchase  price or
prices or adjustments restored without interest.

         (b) Each Borrower expressly consents to the foregoing  arrangements and
agrees  that any  Person  holding  such a  participation  in the  Loans  and the
Obligations  deemed to have been so purchased may exercise any and all rights of
banker's lien,  setoff or counterclaim  with respect to any and all moneys owing
by such  Borrower  to such  Person  as fully as if such  Person  had made a Loan
directly to such Borrower in the amount of such participation.

         (c)  Nothing  contained  in this ss.17  shall  impair,  as between  the
Borrowers and any Lender, the obligation of the BorrowerS to pay such Lender all
amounts  payable in respect of such Lender's Loans and other  Obligations as and
when the same shall become due and payable in accordance with the terms thereof.

                           18. PRIOR CREDIT AGREEMENT.
                               ----------------------

         This Credit Agreement shall supersede the Prior Credit Agreement in its
entirety,  except as provided in this ss.18. On thE Closing Date, the rights and
obligations of the parties under the Prior Credit Agreement which remain Lenders
hereunder shall be subsumed within and be governed by this Credit Agreement. The
Borrowers  acknowledge  and agree that the UCC financing  statements  previously
filed in  connection  with the Prior  Credit  Agreement  and the other  Security
Documents  shall  remain in full  force  and  effect  and shall  apply as of the
Closing Date with respect to the Obligations hereunder.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

                                     -105-

         IN WITNESS  WHEREOF,  the  undersigned  have duly  executed this Credit
Agreement as of the date first set forth above.

                                       IESI CORPORATION
                                       IESI TX CORPORATION
                                       IESI NY CORPORATION
                                       IESI NJ CORPORATION
                                       IESI NJ RECYCLING
                                             CORPORATION
                                       IESI AR CORPORATION
                                       IESI MO CORPORATION
                                       IESI AR LANDFILL CORPORATION
                                       IESI PA CORPORATION
                                       IESI TX GP CORPORATION
                                       IESI OK CORPORATION
                                       IESI PA BETHLEHEM LANDFILL
                                             CORPORATION
                                       IESI PA BLUE RIDGE LANDFILL
                                             CORPORATION
                                       IESI LA CORPORATION
                                       IESI LA LANDFILL CORPORATION
                                       CENTER POINT DISPOSAL, INC.
                                       AMD INC.
                                       TOTAL WASTE SYSTEMS, INC.
                                       TWS, INC.
                                       TWS OF SOUTHWESTERN OKLAHOMA, INC.
                                       ERVIN'S TRASH SERVICE, INC.
                                       GRAND LAKE SANITATION, INC.
                                       TWS OF CADDO COUNTY, INC.
                                       ENVIROCLEAN SYSTEMS, INC.
                                       CENTRAL LOUISIANA WASTE, LLC
                                       IESI MO LANDFILL CORPORATION
                                       IESI STL, LLC
                                       BEST DISPOSAL SERVICE, INC.
                                       WCI SYSTEMS, INC.
                                       SENECA MEADOWS, INC.

                                       By:
                                          --------------------------------------
                                          Thomas J. Cowee, Senior Vice President

                                       IESI TX LANDFILL LP,
                                       By IESI TX GP Corporation, its General
                                       Partner

<PAGE>

                                     -106-

                                       By:
                                          --------------------------------------
                                          Thomas J. Cowee, Senior Vice President

                                       IESI DE LP CORPORATION
                                       IESI DE CORPORATION

                                       By:
                                          --------------------------------------
                                       Name: Robert W. Grier
                                       Title:  President

                                       FLEET NATIONAL BANK, individually
                                            and as Administrative Agent

                                       By: _____________________________________
                                              Timothy M. Laurion, Managing
                                                    Director

                                       LASALLE BANK NATIONAL ASSOCIATION

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

                                       [INSERT OTHER LENDERS]

                                       By: _____________________________________
                                              Name:--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                                IESI CORPORATION
                             A DELAWARE CORPORATION

                            STOCK PURCHASE AGREEMENT

                          Dated as of October 10, 2003

                      Series E Convertible Preferred Stock

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

<PAGE>

ARTICLE I             PURCHASE AND SALE OF THE STOCK...........................1

         1.1      Stockholder Approval.........................................1

         1.2      Purchase and Sale............................................1

         1.3      Purchase Price...............................................1

         1.4      Closing Fee..................................................2

         1.5      Time and Place of Transaction................................2

ARTICLE II            REPRESENTATIONS AND WARRANTIES OF THE COMPANY............2

         2.1      Due Organization and Qualification; Subsidiaries; Due
                  Authorization................................................2

         2.2      No Conflicts or Defaults.....................................3

         2.3      Capitalization...............................................4

         2.4      Subsidiaries; Investments....................................5

         2.5      Financial Statements.........................................5

         2.6      Further Financial Matters....................................5

         2.7      Taxes........................................................6

         2.8      Indebtedness; Contracts; No Defaults.........................7

         2.9      Personal Property............................................8

         2.10     Real Property................................................9

         2.11     Compliance with Law.........................................10

         2.12     Permits and Licenses........................................10

         2.13     Environmental, Health, and Safety Matters...................11

         2.14     No Adverse Changes..........................................12

         2.15     Litigation..................................................12

         2.16     Insurance...................................................13

         2.17     Authorizations..............................................13

         2.18     Certificate of Incorporation and By-laws; Minute Books......13

         2.19     Employee Benefit Plans......................................13

         2.20     Intellectual Property.......................................15

         2.21     Transactions with Affiliates................................15

         2.22     Brokers.....................................................15

         2.23     Securities Matters..........................................15

         2.24     Miscellaneous...............................................16

ARTICLE III           REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER........16

         3.1      Due Authorization; Valid Obligation.........................16

<PAGE>

         3.2      No Conflicts................................................16

         3.3      Authorizations..............................................17

         3.4      Purchase for Investment.....................................17

         3.5      Investment Experience.......................................17

         3.6      Information; Projections....................................17

         3.7      Restricted Securities.......................................18

         3.8      Miscellaneous...............................................18

ARTICLE IV            ADDITIONAL AGREEMENTS...................................18

         4.1      Further Investigation.......................................18

         4.2      Confidentiality.............................................19

         4.4      Preserve Accuracy of Representations and Warranties
                  of the Company..............................................19

         4.5      Consents and Waivers........................................20

         4.6      Waiver of Preemptive Rights.................................20

ARTICLE V             CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS.........20

         5.1      Due Performance.............................................20

         5.2      Accuracy of Representations and Warranties..................20

         5.3      Stockholders' Agreement.....................................20

         5.4      Registration Rights Agreement...............................21

         5.5      Amended Charter.............................................21

         5.6      Securities Law Compliance...................................21

         5.7      Closing Documents...........................................21

         5.8      No Claims...................................................22

         5.9      Approvals, Consents and Waivers.............................22

         5.10     No New Law or Regulation....................................22

         5.11     Compliance with Applicable Laws.............................22

         5.12     No Material Adverse Change..................................23

         5.13     Opinion.....................................................23

         5.14     Warrant Holder Waivers......................................23

         5.15     Employment Agreement Waivers................................23

         5.16     Other Matters...............................................23

         5.17     Satisfaction of Counsel.....................................24

ARTICLE VI            CONDITIONS TO THE OBLIGATIONS OF THE COMPANY............24

         6.1      Due Performance.............................................24

         6.2      Accuracy of Representations and Warranties..................24

                                       ii
<PAGE>

         6.3      Amended Charter.............................................24

         6.4      Certificate.................................................24

         6.5      No Claims...................................................24

         6.6      Approvals, Consents and Waivers.............................25

         6.7      Certain Agreements..........................................25

         6.8      No New Law or Regulation....................................25

         6.9      Satisfaction of Counsel.....................................25

ARTICLE VII           INDEMNIFICATION.........................................25

         7.1      Indemnity of Purchasers.....................................25

         7.2      Indemnification Procedure...................................26

ARTICLE VIII          AFFIRMATIVE COVENANTS OF THE COMPANY....................26

         8.1      Financial Statements and Other Information..................26

         8.2      Rights of Inspection........................................28

         8.3      Reservation of Common Stock.................................28

         8.4      Use of Proceeds.............................................28

ARTICLE IX            TERMINATION.............................................28

         9.1      Termination.................................................28

         9.2      Procedure and Effect of Termination.........................29

ARTICLE X             MISCELLANEOUS...........................................29

         10.1     Survival of Representations, Warranties and Agreements......29

         10.2     Expenses....................................................30

         10.4     Notice......................................................30

         10.5     Entire Agreement............................................31

         10.6     Successors and Assigns......................................31

         10.7     Governing Law; Submission to Jurisdiction...................31

         10.8     Counterparts................................................32

         10.9     Knowledge...................................................32

         10.10    Construction................................................32

         10.11    Severability................................................32

ARTICLE XI            DEFINITIONS.............................................32

         11.1     Defined Terms...............................................32

                                      iii

<PAGE>

                                    EXHIBITS

Exhibit A                        Amended Charter
Exhibit B                        Stockholders' Agreement
Exhibit C                        Registration Rights Agreements
Exhibit D                        Fourth Amended and Restated By-laws

                                    SCHEDULES

Schedule 2.1                     Subsidiaries
Schedule 2.2                     Conflicts
Schedule 2.3                     Capitalization and Stockholder List
Schedule 2.4                     Subsidiaries; Investments
Schedule 2.5                     Financial Statements
Schedule 2.6                     Projections and Certain Liabilities
Schedule 2.7                     Taxes
Schedule 2.8                     Operating Agreements
Schedule 2.9                     Personal Property
Schedule 2.10                    Real Property
Schedule 2.11                    Compliance with Law
Schedule 2.12                    Permits and Licenses
Schedule 2.13                    Environmental, Health and Safety Matters
Schedule 2.15                    Litigation
Schedule 2.16                    Insurance
Schedule 2.19                    Employee Benefit Plans
Schedule 2.20                    Intellectual Property
Schedule 2.21                    Affiliate Transactions

                                       iv
<PAGE>

                            STOCK PURCHASE AGREEMENT
                            ------------------------

                  STOCK PURCHASE AGREEMENT, dated as of October 10, 2003, by and
among IESI Corporation,  a Delaware  corporation (the "Company") and the parties
listed on the signature pages annexed hereto (each  individually,  a "Purchaser"
and collectively, the "Purchasers").

                                W I T N E S S E T H:

                  WHEREAS,  each Purchaser  desires to acquire from the Company,
and the Company desires to sell to such Purchasers, that number of shares of the
Company's Series E Preferred Stock set forth on such Purchaser's  signature page
annexed hereto, on the terms and conditions set forth below.

                  NOW,  THEREFORE,  in  consideration of the premises and of the
mutual representations,  warranties and agreements set forth herein, the parties
hereto agree as follows:

                                   ARTICLE I

                         PURCHASE AND SALE OF THE STOCK
                         ------------------------------

         1.1      Stockholder Approval
                  --------------------

                  Subject to the terms and  conditions  of this  Agreement,  the
Company  shall  authorize  and seek (a) as soon as  practicable  after  the date
hereof,  the  requisite  approval  of  its  stockholders,   in  accordance  with
applicable law and its certificate of incorporation, to effect the authorization
and  issuance  of new Series E  Preferred  Stock and the  adoption  of the Fifth
Amended and Restated Certificate of Incorporation  substantially in the form set
forth on Exhibit A hereto (the "Amended  Charter"),  (b) the exercise or waivers
of existing  preemptive  rights in connection  with the issuance of the Series E
Preferred  Stock  to  the  Purchasers,   and  (c)  the  approval  of  all  other
transactions  contemplated by this Agreement.  Following stockholder approval of
the Amended Charter under applicable law, and prior to the Closing,  the Company
shall file the Amended Charter.

         1.2      Purchase and Sale
                  -----------------

                  Subject to the terms and conditions of this Agreement,  on the
Closing Date,  the Company shall issue and deliver to each  Purchaser,  and each
Purchaser  agrees to purchase from the Company on the Closing Date,  that number
of authorized but unissued  shares of Series E Preferred Stock set forth on such
Purchaser's signature page annexed hereto (all such shares of Series E Preferred
Stock, the "Shares").

         1.3      Purchase Price
                  --------------

                  The  purchase  price for each  Share is One  Thousand  Dollars
($1,000) and the aggregate purchase price for all the Shares is up to Fifty-Five
Million Dollars  ($55,000,000),  payable on the Closing Date by wire transfer of
immediately  available funds to the Company

<PAGE>

against the issuance and delivery to each  Purchaser of a  fully-executed  stock
certificate in due form  evidencing the Shares being purchased by such Purchaser
on the Closing Date.

         1.4      Closing Fee
                  -----------

                  The Company shall pay to each Purchaser, or such Person as the
Purchaser shall designate in writing to the Company not less than three (3) days
prior to the Closing Date, on the Closing Date relating to the purchase and sale
of the Shares being purchased by such Purchaser as additional  consideration for
the purchase of such Shares hereunder,  a fee (the "Closing Fee") equal to three
percent (3%) of the aggregate  purchase  price for the Shares  purchased by such
Purchaser on the Closing Date payable by wire transfer of immediately  available
funds on the Closing Date.

         1.5      Time and Place of Transaction
                  -----------------------------

                  The  consummation  of the  purchase  and sale of the Shares by
each  Purchaser  (the  "Closing")  shall take place at the offices of McDermott,
Will & Emery, 50 Rockefeller Plaza, New York, New York 10020, on a date and time
as the Company and each Purchaser may mutually agree,  but the Closing shall not
occur later than October 31, 2003 (the "Closing Date").

                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY
                  ---------------------------------------------

                  As a material  inducement to the Purchasers to enter into this
Agreement and purchase the Shares,  the Company  represents and warrants to each
Purchaser, as of the date hereof and as of the Closing Date, that:

         2.1      Due Organization and Qualification; Subsidiaries; Due
                  -----------------------------------------------------
Authorization
-------------

                  (a)  Except  as set  forth  in  Item  2.1  of  the  Disclosure
Schedule,  the Company and each Subsidiary are corporations  duly  incorporated,
validly  existing  and in good  standing  under  the  laws of  their  respective
jurisdictions  of  formation,  with full  corporate  power and authority to own,
lease and operate their  respective  businesses  and  properties and to carry on
their  respective  businesses  in the  places  and in the  manner  as  presently
conducted  and as  presently  proposed  to be  conducted.  The  Company and each
Subsidiary are in good standing as foreign  corporations in each jurisdiction in
which the properties owned, leased or operated, or the businesses conducted,  by
them requires such qualification  except for any such failure,  which when taken
together  with all  other  failures,  does not have and is not  likely to have a
material  adverse  effect on the  results of  operations,  financial  condition,
assets or  business  of the  Company  and its  Subsidiaries  taken as a whole (a
"Material Adverse Effect").

                  (b) The  Company  does not own,  directly or  indirectly,  any
capital stock, equity or interest in any corporation,  firm, partnership,  joint
venture or other entity,  other than those (each, a  "Subsidiary"  and together,
the  "Subsidiaries")  set forth in Item 2.1 of the  Disclosure  Schedule of even
date herewith,  which  accompanies this Agreement and is incorporated  herein by
reference (the  "Disclosure  Schedule").  Except as set forth in Item 2.1 of the
Disclosure  Schedule,  each Subsidiary is  wholly-owned by the Company,  all the
outstanding  shares of capital

                                      -2-

<PAGE>

stock of each  Subsidiary  are owned  free and clear of all  Liens,  there is no
contract,  agreement,  arrangement,  option,  warrant, call, commitment or other
right of any  character  obligating  any  Subsidiary to issue,  sell,  redeem or
repurchase any of its  securities,  and there is no outstanding  security of any
kind convertible into or exchangeable for securities of any Subsidiary.

                  (c)  The  Company  has  all  requisite   corporate  power  and
authority to execute and deliver this Agreement, the Second Amended and Restated
Stockholders'  Agreement  attached  hereto  as  Exhibit  B  (the  "Stockholders'
Agreement"),  the Amended and Restated Subordinate Registration Rights Agreement
(the "Amended  Subordinate Rights Agreement") and the form of Second Amended and
Restated  Registration Rights Agreement (the "Second Amended Registration Rights
Agreement"),  each attached hereto as Exhibit C (the Amended  Subordinate Rights
Agreement and the Second Amended  Registration  Rights Agreement  together,  the
"Registration  Rights  Agreements")  and,  subject to the requisite  stockholder
approval  and the waivers  referred to in Section 1.1 hereof (all of which shall
have been obtained on or prior to Closing),  to consummate the  transactions and
actions, including the adoption of the Amended Charter,  contemplated hereby and
thereby.  The Company has taken all corporate action necessary for the execution
and delivery of this Agreement,  the Stockholders'  Agreement,  the Registration
Rights  Agreements and,  subject to the requisite  stockholder  approval and the
waivers  and/or  exercise of the  preemptive  rights  referred to in Section 1.1
hereof (all of which  approvals and waivers shall have been validly  obtained on
or prior to Closing),  the consummation of the transactions  contemplated hereby
and thereby. This Agreement constitutes, and, when executed and delivered by the
Company,  each of the  Additional  Agreements  will  constitute,  the  valid and
binding  obligations  of  the  Company,   enforceable  against  the  Company  in
accordance with their respective terms, except as may be affected by bankruptcy,
insolvency,  moratoria  or other  similar  laws  affecting  the  enforcement  of
creditors'  rights  generally  and  subject  to  the   qualification   that  the
availability  of equitable  remedies is subject to the  discretion  of the court
before which any proceeding therefor may be brought.

         2.2      No Conflicts or Defaults
                  ------------------------

                  Except  as set forth in Item 2.2 of the  Disclosure  Schedule,
the execution and delivery of this  Agreement and the  Additional  Agreements by
the Company and the  consummation of the  transactions  contemplated  hereby and
thereby do not and will not (a) contravene the Amended Charter or by-laws of the
Company or (b) with or without  the giving of notice or the  passage of time and
subject to obtaining such consents prior to the Closing as are set forth in Item
2.2 of the Disclosure Schedule (i) violate, conflict with, or result in a breach
of, or a default or loss of rights  under,  any covenant,  agreement,  mortgage,
indenture,  lease, instrument,  permit or license to which the Company or any of
the  Subsidiaries is a party or by which the Company or any of the  Subsidiaries
or any of their respective  assets are bound, or any judgment,  order or decree,
or any law, rule or  regulation to which the Company or any of the  Subsidiaries
or any of their respective  assets are subject,  (ii) result in the creation of,
or give any party the right to  create,  any lien,  charge,  security  interest,
encumbrance  or any other right or adverse  interest  ("Liens")  upon any of the
capital  stock  or  assets  of the  Company  or any of the  Subsidiaries,  (iii)
terminate or give any party the right to terminate,  amend, abandon or refuse to
perform, any agreement, arrangement or commitment to which the Company or any of
the  Subsidiaries is a party or by which the Company or any of the  Subsidiaries
or any of their respective  assets are bound, (iv) accelerate or modify, or give
any party the right to accelerate or

                                      -3-
<PAGE>

modify,  the time within which, or the terms under which,  the Company or any of
the  Subsidiaries  is to perform any duties or obligations or receive any rights
or  benefits  hereunder,  or (v)  result  in a  violation  of,  or  require  any
authorization,  consent,  approval,  exemption  or other  action by or notice or
declaration to, or filing with, any court or administrative or governmental body
or agency  pursuant  to,  the  certificate  of  incorporation  or by-laws of the
Company or any Subsidiary,  or any law, statute, rule or regulation to which the
Company or any  Subsidiary  is subject,  or any  agreement,  instrument,  order,
judgment or decree to which the Company or any Subsidiary is subject,  except in
each case, for such violations,  conflicts, breaches, defaults,  terminations or
other events that would not,  singly or in the  aggregate,  result in a Material
Adverse Effect. Except as set forth on Item 2.2 of the Disclosure Schedule, none
of the Subsidiaries is subject to any restrictions upon making loans or advances
or paying dividends to,  transferring  property to, or repaying any Indebtedness
owed to, the Company or another Subsidiary.

         2.3      Capitalization
                  --------------

                  As of the date hereof,  the  authorized  capital  stock of the
Company  consists of 3,600,000  shares of Class A Stock, of which 142,000 shares
are issued and outstanding, 450,000 shares of Class B Stock, of which 112,980.18
shares are issued and  outstanding,  32,000  shares of the Series A  Convertible
Preferred  Stock (the "Series A Preferred  Stock"),  of which 32,000  shares are
issued and  outstanding,  20,100 shares of Series B Convertible  Preferred Stock
(the  "Series B  Preferred  Stock"),  of which  20,100  shares  are  issued  and
outstanding,  55,000 shares of Series C Convertible Preferred Stock (the "Series
C  Preferred  Stock") of which  55,000  shares are issued and  outstanding,  and
145,000 shares of Series D Convertible  Preferred Stock (the "Series D Preferred
Stock" and, collectively, together with the Series A Preferred Stock, the Series
B Preferred  Stock and the Series C Preferred  Stock,  the  "Existing  Preferred
Stock") of which 48,500 shares are issued and outstanding. Set forth in Item 2.3
of the  Disclosure  Schedule  is a list that  accurately  sets  forth all of the
stockholders of the Company,  their names, addresses and the number of shares of
each  class  and  series  of the  Company's  capital  stock  owned by each  such
stockholder.  All of  the  outstanding  shares  of  Common  Stock  and  Existing
Preferred  Stock are,  and the Shares when issued in  accordance  with the terms
hereof and the Amended Charter, will be, duly authorized,  validly issued, fully
paid and nonassessable,  and have not been or, with respect to the Shares,  will
not be, issued in violation of any  preemptive  right of any  stockholder of the
Company. Except as set forth in Item 2.3 of the Disclosure Schedule, none of the
Common Stock or the Existing Preferred Stock is, and none of the Shares will be,
subject to any preemptive or subscription  right,  any voting trust agreement or
other contract,  agreement,  arrangement,  option,  warrant, call, commitment or
other right of any character obligating or entitling the Company to issue, sell,
redeem or repurchase any of its securities, and there is no outstanding security
of any kind  convertible  into or exercisable or exchangeable  for Common Stock.
The offer,  issuance and sale of all of the  outstanding  shares of Common Stock
and  Existing  Preferred  Stock issued prior to the date hereof were exempt from
registration  under the  Securities Act and applicable  state  securities  laws.
Assuming the accuracy and  completeness of the Purchasers'  representations  and
warranties  contained in Article III hereof, the offer, sale and issuance of the
Shares  pursuant to Section  1.2 of this  Agreement,  and the Common  Stock upon
conversion  of the  Shares,  do not and will  not,  as the case may be,  require
registration under the Securities Act or any applicable state securities laws.

                                      -4-
<PAGE>

         2.4      Subsidiaries; Investments
                  -------------------------

                  Item 2.1 of the Disclosure  Schedule accurately sets forth the
name of each Subsidiary,  the jurisdiction of its  incorporation and the Persons
owning the outstanding capital stock of such Subsidiary.  Except as set forth in
Item 2.1 of the Disclosure Schedule, each Subsidiary is duly organized,  validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
incorporation,  possesses  all requisite  corporate  power and authority and all
material licenses,  permits and  authorizations  necessary to own its properties
and to carry on its businesses as now being conducted and as presently  proposed
to be conducted and is qualified to do business in every  jurisdiction  in which
its ownership of property or the conduct of its business requires it to qualify,
except  when  the  failure  to be so  qualified  would  not,  singly  or in  the
aggregate,  have a Material  Adverse Effect.  All of the  outstanding  shares of
capital  stock  of  each   Subsidiary  are  validly   issued,   fully  paid  and
nonassessable,  and except as set forth in Item 2.1 of the Disclosure  Schedule,
all such shares are owned by the Company or another Subsidiary free and clear of
any Lien and not  subject to any option or right to  purchase  any such  shares.
Except as set forth on Item 2.4 of the Disclosure Schedule,  neither the Company
nor any Subsidiary owns, or holds the right or has an obligation to acquire, any
shares of stock or any other Investment in any other Persons.

         2.5      Financial Statements
                  --------------------

                  Item 2.5 to the  Disclosure  Schedule  contains  copies of the
consolidated balance sheets of the Company at December 31, 2002, March 31, 2003,
June 30, 2003 and August 31, 2003,  and the related  statements  of  operations,
stockholders'  equity and cash flows for the respective  fiscal year, three, six
and eight month  periods then ended,  including  with  respect to the  Financial
Statements for the 2002 fiscal year,  the notes  thereto,  as audited by Ernst &
Young LLP, certified public  accountants  ("E&Y") (all such statements being the
"Financial  Statements").  Except  as set  forth in Item  2.5 to the  Disclosure
Schedule or the notes to the Financial  Statements,  the  Financial  Statements,
together  with the notes to the Financial  Statements  for the 2002 fiscal year,
have been  prepared  in  accordance  with  U.S.  generally  accepted  accounting
principles applied on a basis consistent throughout all periods presented.  Such
statements present the financial position of the Company as of the dates and for
the periods  indicated.  The books of account and other financial records of the
Company have been maintained in accordance with good business practices.

         2.6      Further Financial Matters
                  -------------------------

                  (a)  Except  as set  forth in Item  2.6(a)  of the  Disclosure
Schedule,  neither  the  Company nor any of the  Subsidiaries  has any  material
liabilities or obligations,  whether secured or unsecured,  accrued, determined,
absolute or contingent,  asserted or unasserted or otherwise, which are required
to be  reflected  or  reserved  in a balance  sheet or the notes  thereto  under
generally  accepted  accounting  principles,  but which are not reflected in the
Financial  Statements.  As of the date  hereof,  the  Company  has no  dividends
declared but not paid or in arrears.

                  (b) The forecasted  balance sheet,  operations  statements and
cash flow  statements  for the years 2003 - 2005,  dated August 26, 2003, of the
Company  (the  "Projections"),  true and  complete  copies  of which  have  been
delivered  to the  Purchasers  and  which  are  listed  in  Item

                                      -5-
<PAGE>

2.6(b) of the  Disclosure  Schedule and attached as Exhibit 2 to the  Disclosure
Schedule,  were prepared in good faith on the assumptions stated therein,  which
assumptions  were believed and presently are believed to be fair and  reasonable
in light of  conditions  existing at the time of delivery of such  forecasts and
those presently existing, and represented, at the time of delivery, and continue
to  represent  the  Company's   reasonable  estimate  of  its  future  financial
performance,  it being  recognized  that  such  forecasts  do not  constitute  a
warranty as to the future performance of the Company and that actual results may
vary from forecasted results.

                  (c)  Except  as set  forth in Item  2.6(c)  of the  Disclosure
Schedule, since December 31, 2002, each of the Company and the Subsidiaries have
conducted their respective businesses, maintained their respective real property
and equipment  and kept their  respective  books of account,  records and files,
substantially in the same manner as previously conducted, maintained or kept and
solely in the ordinary course.

         2.7      Taxes
                  -----

                  Except as  indicated in Item 2.7 of the  Disclosure  Schedule,
each of the  Company  and each  Subsidiary  has  timely  filed  all Tax  Returns
required  to be filed by it, and has paid all Taxes  which  have  become due and
payable,  or, with  respect to Taxes which have  accrued and are not yet due and
payable,  the same have been properly  reflected as a liability on the books and
records of the Company and adequate reserves therefor have been established. All
such Tax Returns have been properly  prepared and are true,  correct (and to the
extent such Tax Returns  reflect  judgments made by the Company or a Subsidiary,
as the case may be, such judgments were reasonable under the  circumstances) and
complete  in all  material  respects.  Except  as  indicated  in Item 2.7 of the
Disclosure Schedule,  no extension for the filing of any Tax Return is currently
in effect.  Except as indicated in Item 2.7 of the Disclosure  Schedule,  no Tax
Return or Tax Return liability of the Company or any Subsidiary has been audited
or is  presently  under  audit  or to the  knowledge  of  the  Company  and  its
Subsidiaries is proposed to be audited.  All Taxes and any penalties,  fines and
interest  which have been  asserted to be payable as a result of any audits have
been paid. Except as indicated in Item 2.7 of the Disclosure  Schedule,  neither
the Company nor any  Subsidiary  has given or been  requested to give waivers of
any  statute of  limitations  relating  to the  assessment  of any Taxes (or any
related penalties,  fines and interest).  There are no claims, actions, suits or
taxing  authority  proceedings,  or audits  pending or, to the  knowledge of the
Company, threatened,  against the Company or any Subsidiary for Taxes. Except as
indicated in Item 2.7 of the Disclosure  Schedule,  all payments for withholding
Taxes,  unemployment insurance and other amounts required to be paid for any Tax
periods (or  portions  thereof)  ending on or prior to the  Closing  Date to any
governmental  authority in respect of employment  obligations of the Company and
each Subsidiary,  including, without limitation, amounts payable pursuant to the
Federal  Insurance  Contributions  Act, have been paid or shall be paid prior to
the Closing Date and have been duly provided for on the books and records of the
Company and in the Financial Statements.  Except as indicated in Item 2.7 of the
Disclosure  Schedule,  no claim has ever been  made by a Taxing  authority  in a
jurisdiction  where the Company or any Subsidiary does not file Tax Returns that
the  Company  or  Subsidiary  is or may be  subject  to Taxes  assessed  by such
jurisdiction.  Neither the Company  nor any  Subsidiary  has been a member of an
Affiliated Group other than one consisting  solely of two or more of the Company
and  any  of  the  Subsidiaries,  or  filed  or  been  included  in a  combined,
consolidated  or

                                      -6-
<PAGE>

unitary income Tax Return,  other than one filed by a group consisting solely of
two or more of the Company and any of the Subsidiaries.

         2.8      Indebtedness; Contracts; No Defaults
                  ------------------------------------

                  (a) Item 2.8 of the  Disclosure  Schedule  sets  forth a true,
complete and correct list of all material instruments,  agreements,  indentures,
mortgages, guarantees, notes, commitments,  accommodations, letters of credit or
other  arrangements  or  understandings,  whether  written or oral, to which the
Company or any Subsidiary is a party (collectively, the "Operating Agreements").
An agreement  shall not be considered  material for the purposes of this Section
2.8 or the  definition  of Operating  Agreements  if the agreement has a term of
less than one year,  and if it (together with all related  agreements)  provides
for  expenditures or receipts of less than $300,000 and has been entered into by
the Company or a Subsidiary in the ordinary course of business. In addition, set
forth  in Item 2.8 of the  Disclosure  Schedule  is an  indication  whether  any
contract with any governmental body contains a renegotiation  provision.  To the
Company's knowledge, it is not party to any oral Operating Agreements.

Notwithstanding  the foregoing,  Item 2.8 of the  Disclosure  Schedule and Items
2.10  and  2.19 of the  Disclosure  Schedule  name  or  describe,  and the  term
"Operating  Agreement" shall include, each of the following to which the Company
or a Subsidiary is a party:

                  (i)      each pension,  profit sharing, stock option, employee
                           stock purchase or other plan or arrangement providing
                           for  deferred or other  compensation  to employees or
                           any other employee  benefit plan or  arrangement,  or
                           any  collective  bargaining  agreement  or any  other
                           contract   with  any  labor   union,   or   severance
                           agreements, programs, policies or arrangements;

                  (ii)     each  contract  for the  employment  of any  officer,
                           individual  employee or other  Person on a full-time,
                           part-time, consulting or other basis providing annual
                           compensation  in excess of $150,000 or providing  for
                           any   severance   or  other   payment   on  or  after
                           termination,  or any  contract  relating  to loans to
                           officers,   directors  or   Affiliates   ("Employment
                           Agreements");

                  (iii)    each contract under which the Company or a Subsidiary
                           has  advanced or loaned any other  Person  amounts in
                           the aggregate exceeding $300,000;

                  (iv)     each  agreement  or  indenture  relating  to borrowed
                           money  or  other   Indebtedness  or  the  mortgaging,
                           pledging or otherwise  placing a Lien on any material
                           asset or material group of assets of the Company or a
                           Subsidiary;

                  (v)      each   guarantee  of  any  obligation  in  excess  of
                           $300,000 (other than by the Company of a Wholly-Owned
                           Subsidiary's  debts or a guarantee by a Subsidiary of
                           the Company's debts or another Subsidiary's debts);

                  (vi)     each lease or  agreement  under  which the Company or
                           any  Subsidiary  is lessor of, or  permits  any third
                           party  to  hold or  operate,  any  property,  real or

                                      -7-
<PAGE>

                           personal,  owned or  controlled by the Company or any
                           Subsidiary  providing for annual  rental  payments in
                           excess of $300,000;

                  (vii)    each agreement  under which it has granted any Person
                           any   registration    rights   (including,    without
                           limitation,   demand   and   piggyback   registration
                           rights);

                  (viii)   each contract or agreement prohibiting it from freely
                           engaging in any business or competing anywhere in the
                           world; and

                  (ix)     any contract or agreement  executed by the Company or
                           any  Subsidiary  relating to the  acquisition  of the
                           Seneca   Meadows    Landfill,    including    without
                           limitation, the Stock Purchase Agreement by and among
                           IESI NY Corporation,  as buyer, and Frank DiMino,  as
                           seller,   Seneca  Meadows,  Inc.  and  Macedon  Homes
                           Incorporated, dated May 22, 2003 (the "Seneca Meadows
                           Purchase Agreement") and the contracts and agreements
                           contemplated thereby.

The Operating Agreements  constitute all of the material contracts,  agreements,
understandings  and  arrangements  required for the operation of the business of
the Company and the  Subsidiaries or which have a material effect thereon.  True
and complete copies of all written  Operating  Agreements  without schedules and
exhibits  have  previously  been  delivered or otherwise  made  available to the
Purchasers. Such schedules and exhibits contain no information which is material
to the provisions of the Operating Agreements.

                  (b)  Except  as  disclosed  in  Item  2.8  of  the  Disclosure
Schedule, neither the Company, any Subsidiary,  nor, to the Company's knowledge,
any other  Person or entity  is in  breach  in any  material  respect  of, or in
default in any material respect under,  any Operating  Agreement and no event or
action has occurred,  is pending or is  threatened,  which,  after the giving of
notice,  passage  of time or  otherwise,  would  constitute  or result in such a
material breach or material  default by the Company or any Subsidiary or, to the
knowledge of the Company, any other Person or entity except for such breaches as
would not have a Material Adverse Effect. Neither the Company nor any Subsidiary
has received any notice of default under any Operating  Agreement to which it is
a party, which default has not been cured to the satisfaction of, or duly waived
by, the party  claiming  such default on or before the date  hereof.  All of the
Operating  Agreements on Item 2.8 of the Disclosure Schedule are in all material
respects,  valid,  binding and enforceable in accordance  with their  respective
terms.  Neither the Company nor any  Subsidiary  has any present  expectation or
intention of not fully performing its obligations under any Operating Agreement;
and,  neither the Company nor any  Subsidiary  has knowledge of any  anticipated
breach by the other parties to any Operating  Agreement except for such breaches
or  anticipated  breaches  as would  not,  singly  or in the  aggregate,  have a
Material Adverse Effect.

         2.9      Personal Property
                  -----------------

                  Except  as set forth in Item 2.9 of the  Disclosure  Schedule,
each of the Company and the Subsidiaries has good and marketable title to all of
its tangible personal property and

                                      -8-
<PAGE>

assets,  including,  without  limitation,  all of the  assets  reflected  in the
Financial  Statements  (except  for  assets  that have been  disposed  of in the
ordinary  course of business  since  December 31,  2002),  free and clear of all
Liens or  mortgages,  except for (a) any Lien for current  taxes not yet due and
payable,  (b)  restrictions,  if any, on the disposition of securities as may be
imposed by federal or applicable state securities laws and (c) failures of title
or Liens as do not materially affect the value, marketability,  operation or the
Company's and the Subsidiaries' use of such assets or as would not, singly or in
the aggregate, have a Material Adverse Effect.

         2.10     Real Property
                  -------------

                  (a) Item 2.10(a) of the Disclosure  Schedule sets forth a true
and complete  list of all real property  owned by the Company or any  Subsidiary
(the "Owned Real Property").  Either the Company or a Subsidiary is the owner of
good  and  marketable  title  to  such  Owned  Real  Property  and to all of the
structures   located   thereon,   free  and  clear  of  all  Liens,   mortgages,
encroachments,  restrictions  on the use  thereof,  or  other  defects  in title
(collectively, "Encumbrances"), except matters of record which do not reduce the
value or  marketability,  or interfere in any material way with use or occupancy
of the Owned Real Property or as would not,  singly or in the aggregate,  have a
Material Adverse Effect.

                  (b) Item  2.10(b)(i) of the  Disclosure  Schedule sets forth a
true,  correct and complete  list of all leases,  subleases,  licenses and other
agreements (collectively, the "Real Property Leases") under which the Company or
any Subsidiary uses or occupies,  has the right to use or occupy,  or leases the
right to use or occupy, now or in the future, any real property where the annual
rental obligation exceeds $300,000 (the land, buildings,  and other improvements
covered  by the Real  Property  Leases  being  herein  called the  "Leased  Real
Property"  and  together  with the Owned Real  Property,  the "Real  Property").
Except as set forth in Items 2.10(b)(i) and (ii) of the Disclosure Schedule, (i)
the Company or a Subsidiary  has a valid  leasehold  interest in the Leased Real
Property and (ii) each Real Property  Lease is valid,  binding and in full force
and effect with respect to the Company or a Subsidiary, as the case may be, and,
to the  knowledge of the Company,  to all other  parties  thereto;  no notice of
default  or  termination  under  any  Real  Property  Lease is  outstanding;  no
termination  event or condition or uncured default on the part of the Company or
a Subsidiary,  as the case may be, exists under any Real Property Lease,  and no
event has occurred and no condition  exists which,  with the giving of notice or
the lapse of time or both, would constitute such a default or termination  event
or condition  with respect to the Company or a  Subsidiary,  as the case may be,
or, to the knowledge of the Company or any Subsidiary,  any other party thereto,
in each case except for such  defaults,  terminations,  events or  conditions as
would not,  singly or in the  aggregate,  have a Material  Adverse  Effect.  The
Company and the Subsidiaries hold their respective  leasehold estates under, and
any other interest in each applicable Real Property Lease, free and clear of all
Encumbrances except as set forth in Item 2.10(b)(ii) of the Disclosure Schedule.
The  Company  has  previously  delivered  or  otherwise  made  available  to the
Purchasers true and complete  copies of all the Real Property  Leases  involving
annual  rental  payments  in excess of  $300,000.  Except as  described  in Item
2.10(b)(iii)  of the  Disclosure  Schedule,  no  consent,  waiver,  approval  or
authorization  is required from the landlord  under any Real Property Lease as a
result  of  the  execution  of  this  Agreement  or  the   consummation  of  the
transactions contemplated hereby.

                                      -9-
<PAGE>

                  (c) The Real  Property  constitutes  all of the material  real
property owned,  leased,  occupied or otherwise  utilized in connection with the
business  of the  Company  and the  Subsidiaries.  Except  as set  forth in Item
2.10(c) of the Disclosure Schedule, other than the Company and the Subsidiaries,
there are no parties in possession or parties having any current or future right
to occupy any of the Real  Property.  Except as set forth in Item 2.10(c) of the
Disclosure  Schedule,  the Real Property is, in all material  respects,  in good
condition and repair and is sufficient  and  appropriate  for the conduct of the
business  of the Company  and its  Subsidiaries  as  currently  conducted  or as
currently  contemplated to be conducted.  Except as set forth in Item 2.10(c) of
the Disclosure  Schedule,  to the knowledge of the Company and its Subsidiaries,
the Real  Property  and,  with respect to the Owned Real  Property,  all plants,
buildings and improvements  located thereon conform in all material  respects to
all  applicable  building,   zoning  and  other  laws,  ordinances,   rules  and
regulations,  except where the failure to do so would not reasonably be expected
to have a Material  Adverse  Effect.  There exists no material  violation of any
covenant,  condition,  restriction,  easement,  agreement or order affecting any
portion  of the  Real  Property.  Except  as set  forth in Item  2.10(c)  of the
Disclosure  Schedule,  all improvements located on the Real Property have direct
access to a public road adjoining such Real Property except where the failure to
do so would not  reasonably be expected to have a Material  Adverse  Effect.  No
such  improvements  or  accessways  encroach  on land not  included  in the Real
Property  and no such  improvement  is  dependent  for its access,  operation or
utility on any land,  building  or other  improvement  not  included in the Real
Property.  There is no  pending  or,  to the  knowledge  of the  Company  or any
Subsidiary, threatened condemnation proceeding affecting any portion of the Real
Property.

                  (d)  There  are no  outstanding  options  or  rights  of first
refusal  with respect to the  purchase or use of any of the Real  Property,  any
portion thereof or interest therein,  except as set forth in Item 2.10(d) of the
Disclosure  Schedule.  Neither the Company nor any  Subsidiary  is  obligated to
purchase or lease any real property,  except as set forth in Item 2.10(d) of the
Disclosure Schedule.

         2.11     Compliance with Law
                  -------------------

                  Except as set forth in Item 2.11 of the  Disclosure  Schedule,
neither the Company nor any  Subsidiary has been or is conducting its respective
business or affairs in material  violation of any applicable  federal,  state or
local law, ordinance, rule, regulation, court or administrative order, decree or
process.  Neither the  Company nor any  Subsidiary  has  received  any notice of
material  violation or claimed  material  violation of any such law,  ordinance,
rule, regulation, order, decree, process or requirement.

         2.12     Permits and Licenses
                  --------------------

                  Except as set forth in Item 2.12 of the  Disclosure  Schedule,
each of the Company and the  Subsidiaries  have all  certificates  of occupancy,
rights,  permits,  certificates,   licenses,  franchises,  approvals  and  other
authorizations   as  are  reasonably   necessary  to  conduct  their  respective
businesses and to own, lease,  use, operate and occupy their  respective  assets
(including  without  limitation  the Real  Property),  at the  places and in the
manner now conducted  and operated,  except those the absence of which would not
have a Material  Adverse  Effect and all of the  foregoing are in full force and
effect and have not been  violated,  except where the

                                      -10-
<PAGE>

failure to do so would not  reasonably  be expected  to have a Material  Adverse
Effect.  Except as set forth in Item 2.12 of the Disclosure Schedule,  as of the
date hereof,  neither the Company nor any Subsidiary has received any written or
oral notice or claim  pertaining to the failure to obtain,  or the violation of,
any  material  permit,  certificate,  license,  approval or other  authorization
required by any federal,  state or local agency or other  regulatory  body,  the
violation of or failure of which to obtain would have a Material Adverse Effect.

         2.13     Environmental, Health, and Safety Matters
                  -----------------------------------------

                  Except as set forth in Item 2.13 of the Disclosure Schedule:

                  (a) Without  limiting  the  generality  of Section  2.11,  the
Company and the Subsidiaries  have complied in all material  respects and are in
compliance in all material respects with all  Environmental,  Health, and Safety
Requirements.

                  (b) Without  limiting  the  generality  of Section  2.11,  the
Company and the Subsidiaries have obtained and complied in all material respects
with,  and are,  and  immediately  after the  consummation  of the  transactions
contemplated by the Seneca Meadows Purchase Agreement shall be, in compliance in
all  material  respects,   with,  all  material  permits,   licenses  and  other
authorizations  that are required pursuant to Environmental,  Health, and Safety
Requirements  for the occupation of their  facilities and the operation of their
business;  and  a  list  of  all  such  material  permits,  licenses  and  other
authorizations is set forth in Item 2.13 of the Disclosure Schedule.

                  (c) Neither the Company nor any  Subsidiary  has  received any
written or oral  notice,  report or other  information  regarding  any actual or
alleged material violation of Environmental, Health, and Safety Requirements, or
any material liabilities or potential  liabilities  (whether accrued,  absolute,
contingent, unliquidated or otherwise), including any investigatory, remedial or
corrective obligations,  relating to any of them or its facilities arising under
Environmental, Health, and Safety Requirements.

                  (d)  Neither  the  Company  nor any  Subsidiary  has  treated,
stored,  disposed of,  arranged for or permitted  the disposal of,  transported,
handled,  or released any substance,  including without limitation any hazardous
substance, or owned or operated any property or facility, in each case or in the
aggregate, in a manner that has given or would give rise to material liabilities
under Environmental, Health and Safety Requirements, including any liability for
response costs,  corrective  action costs,  personal  injury,  property  damage,
natural resources damages or attorney fees.

                  (e) Neither the execution nor the delivery of this  Agreement,
nor the execution or delivery of the Seneca  Meadows  Purchase  Agreement,  will
result in any obligations for site investigation or cleanup,  or notification to
or consent of  government  agencies  or third  parties,  pursuant  to any of the
so-called    "transaction-triggered"    or   "responsible   property   transfer"
Environmental, Health, and Safety Requirements.

                  (f)  Except as set  forth in Item  2.13(f)  of the  Disclosure
Schedule,  neither the  Company  nor any  Subsidiary  has  expressly  assumed or
undertaken  any  liability,  including

                                      -11-
<PAGE>

without  limitation,  any obligation for material corrective or remedial action,
of any other Person relating to Environmental, Health, and Safety Requirements.

                  (g) No facts,  events or  conditions  relating  to the present
facilities,  properties or operations  of the Company or the  Subsidiaries  will
prevent,  hinder or limit continued  compliance with Environmental,  Health, and
Safety  Requirements,  give rise to any  investigatory,  remedial or  corrective
obligations pursuant to Environmental,  Health, and Safety Requirements, or give
rise to any other material liabilities (whether accrued,  absolute,  contingent,
unliquidated  or  otherwise)  pursuant  to  Environmental,  Health,  and  Safety
Requirements,  including without  limitation,  any relating to onsite or offsite
releases or threatened  releases of hazardous  materials,  substances or wastes,
personal  injury,  property damage or natural  resources  damage except as would
not, singly or in the aggregate, have a Material Adverse Effect.

         2.14     No Adverse Changes
                  ------------------

                  Since  December 31, 2002,  there has not been (a) any material
adverse change in the business,  prospects, the financial or other condition, or
the  respective  assets or liabilities  of the Company and the  Subsidiaries  as
reflected in the Financial  Statements,  (b) any material loss  sustained by the
Company or any Subsidiary,  including, but not limited to any loss on account of
theft,  fire,  flood,  explosion,  accident  or other  calamity,  whether or not
insured,  which has materially and adversely  interfered,  or may materially and
adversely  interfere,  with the operation of the  Company's or any  Subsidiary's
business,  or (c) to the best knowledge of the Company, any event,  condition or
state of facts,  including,  without  limitation,  the  enactment,  adoption  or
promulgation of any law, rule or regulation,  the occurrence of which would have
a Material Adverse Effect.

         2.15     Litigation
                  ----------

                  (a)  Except  as set  forth  in  Item  2.15  of the  Disclosure
Schedule,  there is no claim, dispute, action, suit, proceeding or investigation
pending or, to the  knowledge of the Company,  threatened,  against or affecting
the business of the Company or any  Subsidiary,  or challenging  the validity or
propriety of the transactions  contemplated by this Agreement and the Additional
Agreements,  at law or in equity or before any federal, state, local, foreign or
other governmental authority, board, agency, commission or instrumentality,  nor
to the  knowledge of the Company,  has any such claim,  dispute,  action,  suit,
proceeding or investigation  been pending or threatened,  during the twenty-four
(24)  month  period  preceding  the date  hereof;  (b)  there is no  outstanding
judgment, order, writ, ruling,  injunction,  stipulation or decree of any court,
arbitrator or federal,  state, local,  foreign or other governmental  authority,
board,  agency,  commission or instrumentality,  against or materially affecting
the business of the Company or any  Subsidiary;  (c) neither the Company nor any
Subsidiary is subject to any arbitration proceedings under collective bargaining
agreements or otherwise or, to the best of the Company's  knowledge,  and except
for inquiries and  investigations  by the New York City Trade Waste  Commission,
any governmental  investigations or inquiries  (including,  without  limitation,
inquiries as to the qualification to hold or receive any license or permit) and,
to the  best  of the  Company's  knowledge,  there  is no  basis  for any of the
foregoing;  (d) neither the Company nor any  Subsidiary has received any written
or verbal inquiry from any federal,  state, local, foreign or

                                      -12-
<PAGE>

other  governmental  authority,  board,  agency,  commission or  instrumentality
concerning  the possible  violation of any law, rule or regulation or any matter
disclosed in respect of its business.

         2.16     Insurance
                  ---------

                  Neither  the  Company nor any  Subsidiary  is in default  with
respect to its  obligations  under any  insurance  policy  maintained by it, and
neither the Company  nor any  Subsidiary  has within the past twelve (12) months
been denied insurance  coverage.  The insurance  coverage of the Company and its
Subsidiaries is customary for companies of similar size engaged in similar lines
of business.  Except as set forth in Item 2.16 of the Disclosure  Schedule,  the
Company and the  Subsidiaries  do not have any  self-insurance  or  co-insurance
programs, and the reserves set forth on the latest balance sheet are adequate to
cover all anticipated  liabilities  with respect to any such  self-insurance  or
co-insurance programs.

         2.17     Authorizations
                  --------------

                  Any authorization, approval, order, license, permit, franchise
or  consent  of,  declaration  to, or filing or  registration  with,  any court,
governmental  authority  or any other  Person or entity  which is not a party to
this Agreement or any Additional  Agreement which is required in connection with
the execution, delivery and performance by the Company of this Agreement and the
Additional  Agreements  has been obtained or shall be obtained as of the Closing
Date. There is no pending or threatened claim,  action,  suit,  investigation or
proceeding  against the Company  before any court,  arbitrator  or  governmental
authority which, if determined  adversely to the Company,  would have a Material
Adverse  Effect on the ability of the Company to perform its  obligations  under
this Agreement or the Additional Agreements.

         2.18     Certificate of Incorporation and By-laws; Minute Books
                  ------------------------------------------------------

                  The copies of the certificate of incorporation and by-laws (or
similar  governing  documents)  of the  Company  and  each  Subsidiary,  and all
amendments  to each,  access  to which  has been  provided  to  counsel  for the
Purchasers  are true,  correct and  complete as of the date  hereof.  The minute
books of the Company and each  Subsidiary  contain true and complete  records of
all  meetings  and  consents in lieu of meetings  of their  respective  board of
directors (and any committees  thereof),  or similar governing bodies, since the
time of their respective  organization.  The stock books of the Company and each
Subsidiary are true, correct and complete.

         2.19     Employee Benefit Plans
                  ----------------------

                  (a)  Except  as set  forth  in  Item  2.19  of the  Disclosure
Schedule,  neither the Company nor any Subsidiary maintains or contributes or is
required to contribute to any employee  benefit plan (as defined in Section 3(3)
of the Employee  Retirement Income Security Act of 1974, as amended  ("ERISA")),
or any plans, programs, policies, practices,  arrangements or contracts (whether
group or  individual)  providing for  payments,  benefits or  reimbursements  to
employees or former  employees (or their  beneficiaries  and  dependents) of the
Company  or any  Subsidiary.  Each item  listed  on Item 2.19 of the  Disclosure
Schedule is a "Benefit Plan."

                                      -13-
<PAGE>

                  (b) Each Benefit Plan that is intended to be qualified  within
the meaning of Section 401(a) of the Code has received a determination  from the
Internal  Revenue  Service (the "IRS") that such Benefit Plan is qualified under
Section  401(a) of the Code,  and to the  knowledge of the Company,  nothing has
occurred since the date of such  determination  that could adversely  affect the
qualification of such Benefit Plan.

                  (c)  Except  as set  forth  in  Item  2.19  of the  Disclosure
Schedule,  neither the Company nor any  Subsidiary  has  liability  that exceeds
$500,000  with respect to any "employee  pension  benefit plan" (as such term is
defined in  Section  3(2) of ERISA)  that is subject to Section  302 of ERISA or
Section 412 of the Code or any "multiemployer  plan" (as such term is defined in
Section 3(37) of ERISA).

                  (d) None of the  Benefit  Plans  obligates  the Company or any
Subsidiary to pay any  separation,  severance,  termination  or similar  benefit
solely as a result of any  transaction  contemplated by this Agreement or solely
as a result of a change in control or  ownership  within the  meaning of Section
280G of the Code.

                  (e)  Except  as set  forth  in  Item  2.19  of the  Disclosure
Schedule,  each Benefit Plan and any related trust,  insurance  contract or fund
has been maintained,  funded and administered in substantial compliance with its
respective  terms  and  the  terms  of  any  applicable   collective  bargaining
agreements  and  in  substantial   compliance   with  all  applicable  laws  and
regulations,  including, but not limited to, ERISA and the Code. No asset of the
Company or any  Subsidiary  is subject to any lien under ERISA or the Code,  and
neither the Company nor any Subsidiary has incurred any liability under Title IV
of ERISA or to the Pension Benefit Guaranty Corporation. There are no pending or
threatened actions, suits,  investigations or claims with respect to any Benefit
Plan.

                  (f) The  Company and each  Subsidiary  has  complied  with the
health  care  continuation  requirements  of Part 6 of  Subtitle B of Title I of
ERISA;  and neither the Company nor any Subsidiary has any obligation  under any
Benefit Plan or otherwise to provide health or life insurance benefits to former
employees  of  the  Company  or  Subsidiary  or  any  other  person,  except  as
specifically required by Part 6 of Subtitle B of Title I of ERISA.

                  (g) To the  knowledge of the Company,  neither the Company nor
any  Subsidiary  nor any other  "disqualified  person"  (within  the  meaning of
Section 4975 of the Code) or "party in interest"  (within the meaning of Section
3(14) of ERISA) has taken any action with  respect to any of the  Benefit  Plans
which could subject any such Benefit Plan (or its related  trust) or the Company
or any  Subsidiary or any officer,  director or employee of any of the foregoing
to any penalty or tax under Section 502(i) of ERISA or Section 4975 of the Code.

                  (h) Neither the Company nor any  Subsidiary  has any liability
with  respect to any  "employee  benefit  plan" (as  defined in Section  3(3) of
ERISA) solely by reason of being treated as a single  employer under Section 414
of the Code with any trade,  business  or entity  other than the Company and the
Subsidiaries.

                  (i)  With  respect  to each  Benefit  Plan,  the  Company  has
provided the Purchasers with true, complete and correct copies of (to the extent
applicable) (i) all documents  pursuant

                                      -14-
<PAGE>

to which the Benefit Plan is maintained, funded and administered,  (ii) the most
recent  annual  report  (Form 5500 series)  filed with the IRS (with  applicable
attachments),  (iii) the most recent financial  statement,  (iv) the most recent
summary  plan  description  provided  to  participants,  and (v) the most recent
determination letter received from the IRS.

         2.20     Intellectual Property
                  ---------------------

                  Item 2.20 of the  Disclosure  Schedule  sets  forth a true and
complete list of all Intellectual  Property owned by the Company and each of the
Subsidiaries.  Each of the  Company  and  the  Subsidiaries  owns  or  possesses
sufficient  legal rights to use all patents,  patent  applications,  trademarks,
trademark applications,  service marks, trade names, copyrights,  trade secrets,
licenses,   information,   proprietary   rights  and  processes   ("Intellectual
Property") listed in Item 2.20 of the Disclosure Schedule,  and all Intellectual
Property  necessary  for each of the  Company's  and  each of the  Subsidiaries'
business as now  conducted  without any  conflict  with or  infringement  of the
Intellectual  Property  rights  of any  other  Person  or  entity.  There are no
outstanding  options,  licenses  or  agreements  of  any  kind  relating  to the
Intellectual  Property,  and neither the Company nor any Subsidiary is bound by,
or a party to, any options,  licenses or  agreements of any kind with respect to
the Intellectual Property of any other Person or entity.

         2.21     Transactions with Affiliates
                  ----------------------------

                  Except as set forth in Item  2.21 of the  Disclosure  Schedule
and  except  for  Employment  Agreements  which are set forth in Item 2.8 of the
Disclosure Schedule, no officer, director, employee, stockholder or Affiliate of
the Company or any  Subsidiary or any individual  related by blood,  marriage or
adoption  to any such  individual  or any  entity  in which  any such  Person or
individual owns any beneficial interest, is a party to any agreement,  contract,
commitment or transaction with the Company or any Subsidiary or has any material
interest in any material property used by the Company or any Subsidiary.

         2.22     Brokers
                  -------

                  All   negotiations   relative  to  this   Agreement   and  the
transactions  contemplated  hereby have been carried out by the Company directly
with the  Purchasers  without  the  intervention  of any Person on behalf of the
Company  in such a manner  as to give  rise to any  valid  claim  by any  Person
against  any  Purchaser  for a finder's  fee,  brokerage  commission  or similar
payment  (other than the Closing Fees  payable  pursuant to Section 1.5 hereof).
The Company shall pay, and hold the Purchasers harmless against,  any liability,
loss or expense (including,  without limitation,  reasonable attorneys' fees and
out-of-pocket expenses) arising in connection with any such claim.

         2.23     Securities Matters
                  ------------------

                  The  Company  is  not a  "holding  company"  or a  "subsidiary
company" of a "holding  company" or an  "affiliate"  of a "holding  company," as
such terms are defined in the Public  Utility  Holding  Company Act of 1935, and
the Company is not a "registered  investment  company" or "an affiliated Person"
or a "principal underwriter" of a "registered investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.

                                      -15-
<PAGE>

         2.24     Miscellaneous
                  -------------

                  (a) The  representations and warranties made by the Company in
this  Agreement and the Additional  Agreements and the statements  made by or on
behalf of the  Company in any  certificate,  document  or exhibit  furnished  in
connection  with the  transactions  contemplated  hereby or thereby,  when taken
together,  do not and will not as of the Closing contain any untrue statement of
a material  fact or omit to state any material  fact  necessary in order to make
such  representations  or warranties or other such  statements,  in light of the
circumstances  under,  and at the time at,  which they were  made,  not false or
misleading.

                  (b)  Disclosure  of  any  fact  or  item  in any  Item  of the
Disclosure  Schedule  referenced  by a  particular  paragraph or Section in this
Agreement  shall,  should the  existence  of the fact or item or its contents be
reasonably  responsive to any other Item of the Disclosure Schedule or paragraph
or Section of this  Agreement,  be deemed to be  disclosed  with respect to that
other Item or Section if an explicit cross-reference appears.

                                  ARTICLE III

                REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
                ------------------------------------------------

                  Each Purchaser represents and warrants on behalf of itself and
not any other Purchaser, severally and not jointly, to the Company that:

         3.1      Due Authorization; Valid Obligation
                  -----------------------------------

                  Such  Purchaser  has  taken  all  corporate  or  other  action
necessary  to  authorize  it to execute  and  deliver  this  Agreement  and each
Additional  Agreement to which it is a party, and to consummate the transactions
contemplated  hereby  and  thereby,  and  this  Agreement  and  each  Additional
Agreement to which it is a party,  constitute the valid and binding  obligations
of such Purchaser, enforceable in accordance with their respective terms, except
as may be limited by  bankruptcy,  insolvency,  moratorium or other similar laws
affecting  the  enforcement  of creditors'  rights  generally and subject to the
qualification  that the  availability  of  equitable  remedies is subject to the
discretion of the court before which any proceeding therefor may be brought.

         3.2      No Conflicts
                  ------------

                  The execution and delivery by such Purchaser of this Agreement
and each Additional Agreement to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not and shall not (a) contravene
the certificate of incorporation or by-laws (or similar governing  instruments),
or (b) with or  without  the giving of notice or the  passage of time,  violate,
conflict  with,  or result in a breach of, or a default or loss of rights under,
any covenant, agreement,  mortgage, indenture, lease or instrument to which such
Purchaser is a party or by which such Purchaser or any of its assets is bound or
any judgment,  order, decree, law, rule or regulation to which such Purchaser or
any of its assets are subject.

                                      -16-
<PAGE>

         3.3      Authorizations
                  --------------

                  Any authorization, approval, order, license, permit, franchise
or  consent  of,  declaration  to, or filing or  registration  with,  any court,
governmental  authority  or any other  Person or entity  which is not a party to
this Agreement or the Additional Agreements which is required in connection with
the  execution,  delivery and  performance  of this Agreement and the applicable
Additional  Agreements by such  Purchaser has been obtained or shall be obtained
as of the Closing Date. There is no pending or threatened claim,  action,  suit,
investigation or proceeding against such Purchaser before any court,  arbitrator
or  governmental  authority  which,  if determined  adversely to such Purchaser,
would have a Material Adverse Effect on such Purchaser or on the ability of such
Purchaser to perform its  obligations  under this  Agreement  or the  applicable
Additional Agreements.

         3.4      Purchase for Investment
                  -----------------------

                  (a) Such Purchaser is acquiring the Shares being  purchased by
such  Purchaser for  investment  for such  Purchaser's  own account and not as a
nominee or agent,  and not with a view to the resale or distribution of any part
thereof,  and such Purchaser has no present  intention of selling,  granting any
participation in, or otherwise  distributing the same; provided,  however, it is
acknowledged  that TCCIII may  transfer  Shares  pursuant to Section 8.2 hereof.
Such  Purchaser  further   represents  that  it  does  not  have  any  contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
a  participation  to such Person or to any third Person,  with respect to any of
the Shares, except with respect to TCCIII in connection with a transfer pursuant
to Section 8.2 hereof.

                  (b)  Such  Purchaser  understands  that  the  Shares  are  not
registered under the Securities Act on the ground that the sale and the issuance
of securities  hereunder is exempt from  registration  under the  Securities Act
pursuant  to Section  4(2)  thereof  and Rule 506 of  Regulation  D  promulgated
thereunder,  and that the Company's  reliance on such exemption is predicated on
such  Purchaser's  representations  set  forth  herein.  Such  Purchaser  is  an
"accredited  investor"  as that term is defined in Rule 501(a) of  Regulation  D
under the Securities Act.

         3.5      Investment Experience
                  ---------------------

                  Such Purchaser acknowledges that it can bear the economic risk
of its  Investment  in the Shares,  and has such  knowledge  and  experience  in
financial and business  matters that it is capable of evaluating  the merits and
risks of the Investment in the Shares.

         3.6      Information; Projections
                  ------------------------

                  Such Purchaser has been  furnished and has carefully  reviewed
the Projections,  and such other  information as such Purchaser deemed necessary
to  evaluate  an  investment  in the Shares.  To the full  satisfaction  of such
Purchaser, it has been furnished all materials that it has requested relating to
the Company and the offering of the Shares, and such Purchaser has been afforded
the opportunity to ask questions of  representatives  of the Company  concerning
the terms and  conditions  of the  offering  to verify  the  information  in the
Projections provided to it and to obtain any additional information necessary to
verify the accuracy of any  representations or information made or given to such
Purchaser.  Notwithstanding the foregoing, nothing herein

                                      -17-
<PAGE>

shall derogate from or otherwise  modify the  representations  and warranties of
the  Company  set  forth in this  Agreement,  all of which  representations  and
warranties such Purchaser has relied on in making an investment in the Shares.

         3.7      Restricted Securities
                  ---------------------

                  Such  Purchaser  understands  that the Shares may not be sold,
transferred,  or otherwise disposed of without registration under the Securities
Act  or an  exemption  therefrom,  and  that  in  the  absence  of an  effective
registration  statement  covering  the Shares or any  available  exemption  from
registration  under the  Securities  Act, the Shares must be held  indefinitely.
Such  Purchaser  is aware that the Shares may not be sold  pursuant  to Rule 144
promulgated  under the  Securities Act unless all of the conditions of that Rule
are met.  Among the conditions  for use of Rule 144 may be the  availability  of
current information to the public about the Company. Such information is not now
available,  and the  Company  has no  present  plans  to make  such  information
available.  Such Purchaser is aware that the Shares are subject to the terms and
conditions of the Stockholders'  Agreement and that the certificates  evidencing
the Shares will bear the legend contemplated by the Stockholders' Agreement.

         3.8      Miscellaneous
                  -------------

                  The  representations  and warranties made by such Purchaser in
this Agreement and the applicable  Additional Agreements and the statements made
by or on  behalf  of the  Purchaser  in any  certificate,  document  or  exhibit
furnished in connection with the transactions contemplated hereby and thereby do
not and will not as of the Closing  contain any untrue  statement  of a material
fact or omit to  state  any  material  fact  necessary  in  order  to make  such
representations  or  warranties  or  other  such  statement,  in  light  of  the
circumstances  under,  and at the time at,  which they were  made,  not false or
misleading.

                                   ARTICLE IV

                              ADDITIONAL AGREEMENTS
                              ---------------------

         4.1      Further Investigation
                  ---------------------

                  The   Company   shall   give   to  each   Purchaser   and  its
representatives  between the date of this  Agreement and the Closing Date,  full
access during normal  business  hours to all of the premises,  files,  books and
records  of the  Company  and the  Subsidiaries  and cause the  officers  of the
Company to furnish such financial and operating data and other  information with
respect to the Company and the  Subsidiaries  as each such Purchaser  shall from
time to time reasonably request; provided,  however, that any such investigation
(a) shall be conducted in such manner as not to interfere  unreasonably with the
operation of the business of the Company and the Subsidiaries, and (b) shall not
affect  any  of  the  representations  and  warranties  hereunder.  During  such
investigation,  each such Purchaser and its representatives shall have the right
to make copies of, or excerpts from,  such files,  books and records as they may
deem  advisable.  If this Agreement is not  consummated,  each  Purchaser  shall
return to the Company all such copies of materials belonging to the Company made
by or furnished to any Purchaser except for such materials as the Purchasers are
entitled to hereunder or under the Stockholders' Agreement.

                                      -18-
<PAGE>

         4.2      Confidentiality
                  ---------------

                  At all times  prior to the  Closing  or,  if the  transactions
contemplated  by this Agreement are not  consummated and this Agreement shall be
terminated,  each Purchaser  shall,  and shall cause its  Affiliates,  officers,
directors, employees, agents and representatives to, keep secret and not divulge
to any third party or otherwise use for such Purchaser's  benefit (other than in
connection   with  the   transactions   contemplated   by  this  Agreement)  any
confidential  or proprietary  information of the Company to which such Purchaser
obtains access pursuant to Section 4.1; provided,  however, that such obligation
shall not apply to any  information to the extent that (a) it is or becomes part
of public or industry  knowledge or  literature as a result of causes other than
the  acts  or  omissions  of  the  Purchasers  or  their  Affiliates,  officers,
directors, employees, agents or representatives, (b) can be demonstrated to have
been known to such  Purchaser  prior to its  receipt  from the  Company,  (c) is
received by such  Purchaser  in good faith from a third party or (d)  disclosure
shall be required by applicable  law,  regulation  or court order  provided that
prior to such disclosure,  such Purchaser shall promptly notify the Company with
respect to such  requirement  in  recognition  of the fact that the  Company may
elect  to  obtain  relief  from  such  disclosure  requirement.  Notwithstanding
anything herein to the contrary,  any party to this Agreement (and any employee,
representative  or other agent of any party to this  Agreement)  may disclose to
any and all persons,  without  limitation of any kind, the tax treatment and tax
structure of the  transactions  contemplated by this Agreement and all materials
of any kind  (including  opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure;  provided  however,  that such
disclosure  may not be made to the extent  required to be kept  confidential  to
comply  with any  applicable  federal or state  securities  laws;  and  provided
further that (to the extent not inconsistent with the foregoing) such disclosure
shall be made without  disclosing the names or other identifying  information of
any party.

         4.3      Preserve Business
                  -----------------

                  Between the date of this  Agreement and the Closing Date,  the
Company  shall use  commercially  reasonable  efforts to preserve  substantially
intact its and each  Subsidiary's  business  organization,  keep  available  the
services  of the  present  officers  and  employees  of  the  Company  and  each
Subsidiary,  preserve the present  relationships with Persons having significant
business relationships  therewith and conduct its and each Subsidiary's business
only in the  ordinary  course,  except as otherwise  contemplated  hereby or set
forth in the Disclosure Schedule.

         4.4      Preserve Accuracy of Representations and Warranties of the
                  ----------------------------------------------------------
Company
-------

                  Between the date of this  Agreement and the Closing Date,  the
Company  shall,  and shall cause each  Subsidiary  to,  refrain  from taking any
action which would render any of the  representations or warranties set forth in
Article II hereof  materially  inaccurate  as of the Closing  Date.  The Company
shall notify the Purchasers  promptly of the occurrence of any matter,  event or
change in  circumstances  after the date  hereof and prior to the  Closing  that
would have been  required to be disclosed in the  Disclosure  Schedule if it had
occurred prior to the date hereof, but such notification shall not affect any of
the Purchasers' rights under this Agreement.

                                      -19-
<PAGE>

         4.5      Consents and Waivers
                  --------------------

                  The parties  hereto  shall  cooperate  with each other and use
their reasonable best efforts to (a) obtain all consents  (including voting, and
causing their  respective  Affiliates  that are  stockholders  of the Company to
vote, in favor of the Amended Charter,  the Second Amended  Registration  Rights
Agreement, the Amended Subordinate Rights Agreement, the Stockholders' Agreement
and  the  transactions  contemplated  by  this  Agreement)  and  waivers  to the
transactions  contemplated  hereby  required  under all  agreements,  mortgages,
indentures,   contracts,   licenses,   franchises,   permits,  leases  or  other
instruments,  the withholding of which consents or waivers could have a Material
Adverse  Affect  and (b)  satisfy  the  conditions  to  closing  required  to be
satisfied by them, including, with respect to the Company, the submission of the
Amended Charter to its stockholders.

         4.6      Waiver of Preemptive Rights
                  ---------------------------

                  By entering  into this  Agreement,  each  Purchaser  that is a
party to the Amended and Restated  Stockholders'  Agreement  dated September 10,
2001 by and among the  Company,  the  stockholders  party  thereto  and J. Bruce
Boisture (the "Existing  Stockholders'  Agreement") hereby waives, on its behalf
and on behalf of its successors and assigns,  any and all preemptive rights that
such  Purchaser  may  have  under  Section  6.01 of the  Existing  Stockholders'
Agreement  with respect to any Shares issued  pursuant to this Agreement or as a
result of the exercise of any preemptive  rights arising in connection  with the
issuance pursuant to this Agreement.

                                   ARTICLE V

                 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS
                 -----------------------------------------------

                  The  obligations  of each  Purchaser  under this Agreement are
subject to the  satisfaction,  on or prior to the Closing Date, of the following
conditions, any of which may be waived in whole or in part by such Purchaser:

         5.1      Due Performance
                  ---------------

                  The Company and each other  Purchaser shall have performed and
complied in all material respects with all agreements and conditions required by
this  Agreement to be  performed or complied  with by the Company and each other
Purchaser on or prior to the Closing Date.

         5.2      Accuracy of Representations and Warranties
                  ------------------------------------------

                  All representations and warranties of the Company set forth in
this Agreement  shall be true and correct in all material  respects on and as of
the date hereof and on and as of the Closing  Date,  as though made on and as of
the Closing Date.

         5.3      Stockholders' Agreement
                  -----------------------

                  The Company,  each Purchaser  other than such  Purchaser,  and
Existing  Stockholders  collectively holding not less than seventy (70%) percent
of the Paid-In Shares (as

                                      -20-
<PAGE>

defined in the Stockholders'  Agreement),  shall have executed and delivered the
Stockholders'  Agreement  in the form and  substance  set  forth  in  Exhibit  B
attached hereto.

         5.4      Registration Rights Agreements
                  ------------------------------

                  The Company,  each signatory to the  Subordinate  Registration
Rights  Agreement,  dated as of September 10, 2001, by and among the Company and
the parties thereto (the  "Subordinate  Agreement"),  and each signatory to that
certain  Amended  and  Restated  Registration  Rights  Agreement,  dated  as  of
September 10, 2001, by and among the Company and the parties  thereto,  and each
Purchaser,  shall have  executed and delivered  the Amended  Subordinate  Rights
Agreement and the form of Second Amended  Registration Rights Agreement attached
hereto as Exhibit C.

         5.5      Amended Charter
                  ---------------

                  The requisite  vote of  stockholders  of the Company under the
Delaware General Corporation Law and the Company's  certificate of incorporation
and by-laws  required to approve the Amended  Charter shall have been  obtained,
and the Company shall have duly  adopted,  executed and filed with the Secretary
of State of Delaware the Amended Charter establishing the terms and the relative
rights and preferences of the Series E Preferred Stock,  the Existing  Preferred
Stock and the Common  Stock in the form set forth in  Exhibit A hereto,  and the
Company shall not have adopted or filed any other  document  designating  terms,
relative  rights or  preferences of the Series E Preferred  Stock,  the Existing
Preferred Stock and the Common Stock. The Amended Charter shall be in full force
and effect as of the Closing  Date under the laws of the State of  Delaware  and
shall not have been amended or modified.

         5.6      Securities Law Compliance
                  -------------------------

                  The Company shall have made all filings  under all  applicable
federal and state securities laws necessary,  prior to, or concurrently with the
sale, to  consummate  the issuance of the Series E Preferred  Stock  pursuant to
this Agreement in compliance with such laws.

         5.7      Closing Documents
                  -----------------

                  On the Closing Date,  the Company shall have delivered to each
Purchaser all of the following documents:

                  (a) an  Officer's  Certificate,  dated the date of the Closing
executed by the President of the Company,  to the effect that the conditions set
forth in Sections 5.1, 5.2, 5.9 and 5.12 hereto (in the case of Sections 5.1 and
5.2 hereof  insofar as they relate to the  representations  and  warranties  set
forth in Article  II hereof  and the due  performance  and  satisfaction  of the
obligations  and  conditions  hereunder  to be  performed  and  satisfied by the
Company) have been satisfied in all respects;

                  (b) certified  copies of the  resolutions  duly adopted by the
Company's board of directors (the "Board")  authorizing the execution,  delivery
and performance of this Agreement, the Stockholders' Agreement, the Registration
Rights  Agreements,  and each of the other agreements  contemplated  hereby, the

                                      -21-
<PAGE>

filing of the Amended Charter, the issuance and sale of Series E Preferred Stock
and  the  consummation  of all  the  other  transactions  contemplated  by  this
Agreement;

                  (c) copies of the Amended  Charter and the Company's  by-laws,
each as in effect at the Closing Date certified by the Secretary of the Company,
and  certificates as to (i) the good standing of each of the Company and IESI NY
Corporation in their respective  states of formation,  and (ii) the authority of
IESI NY Corporation to do business as a foreign  corporation in the State of New
York; and

                  (d)  such  other  documents  relating,   to  the  transactions
contemplated by this Agreement as the Purchasers or their counsel may reasonably
request.

         5.8      No Claims
                  ---------

                  No claim, action,  suit,  investigation or proceeding shall be
pending or threatened by any Person  against any of the parties hereto or any of
their respective affiliates which, if adversely  determined,  could (a) prevent,
hinder or enjoin consummation of the transactions contemplated by this Agreement
or the Additional  Agreements or (b) have a Material Adverse Effect. No party to
this Agreement shall have received written notice from any court or governmental
authority,  board, agency, commission or instrumentality of its intention to (i)
institute  any  action or  proceeding  to  restrain,  enjoin,  nullify or render
ineffective  this  Agreement,  any  Additional  Agreement  or  the  transactions
contemplated   hereby  or  thereby,   if  consummated,   or  (ii)  commence  any
investigation (other than a routine letter of inquiry, including a routine Civil
Investigation  Demand)  into this  Agreement,  any  Additional  Agreement or the
transactions contemplated hereby or thereby, which, in the reasonable opinion of
such Purchaser, would make it inadvisable to consummate such transactions.

         5.9      Approvals, Consents and Waivers
                  -------------------------------

                  The Company  shall have received all  approvals,  consents and
waivers  (including the waivers of preemptive  rights referred to in Section 1.1
hereof) to the transactions  contemplated  hereby required under all agreements,
mortgages, indentures, contracts, licenses, franchises, permits, leases or other
instruments,  laws,  rules  or  regulations  applicable  to the  Company  or any
Subsidiary,  which are necessary to  consummate  the  transactions  contemplated
hereby and to preserve the business of the Company or any Subsidiary.

         5.10     No New Law or Regulation
                  ------------------------

                  There shall not have been enacted  between the date hereof and
the  Closing  Date any law or  regulation  which  would have a Material  Adverse
Effect or prevent or hinder the consummation of the transactions contemplated by
this Agreement or the Additional Agreements.

         5.11     Compliance with Applicable Laws
                  -------------------------------

                  The  purchase  of Series E Preferred  Stock by such  Purchaser
hereunder shall not be prohibited by any applicable law or governmental  rule or
regulation and shall not subject such Purchaser to any penalty or liability, and
the purchase of the Series E Preferred  Stock by such

                                      -22-
<PAGE>

Purchaser  hereunder  shall be permitted by laws,  rules and  regulations of the
jurisdictions and governmental  authorities and agencies to which such Purchaser
is subject.

         5.12     No Material Adverse Change
                  --------------------------

                  There shall not have occurred a material adverse change in the
business or business  prospects of the Company and its  Subsidiaries  taken as a
whole between December 31, 2002 and the Closing Date.

         5.13     Opinion
                  -------

                  The  Purchasers  shall have received an opinion of counsel for
the Company,  dated as of the Closing Date, reasonably  satisfactory in form and
substance to counsel to the Purchasers.  TC Carting III, L.L.C. ("TCCIII") shall
have  received  an opinion of counsel for the  Company,  dated as of the Closing
Date, in form and substance reasonably  satisfactory to counsel to TCCIII to the
effect that no pre-merger  notification  under the  Hart-Scott-Rodino  Antitrust
Improvements Act of 1976 is required.

         5.14     Warrant Holder Waivers
                  ----------------------

                  The Company shall deliver resolutions of the Board,  certified
by its secretary or assistant  secretary as being in full force and effect, that
the  issuance of the Series E Preferred  Stock is for Fair Market Value (as such
term is defined in the warrant  issued to the holders  thereof  (each a "Warrant
Holder") listed in Item 2.3 of the Disclosure Schedule), together with a written
consent,  executed by such Warrant  Holder(s) (whose consent is required) to the
effect that such Warrant Holder(s) do(es) not dispute, and waive(s) any right to
dispute,  the determination of the Board that issuance of the Series E Preferred
Stock  is  for  Fair  Market  Value  [except  with  respect  to  Jim  R.  Sowell
Construction  Co.,  Inc.,  for which  indemnification  is being  provided by the
Company].

         5.15     Employment Agreement Waivers
                  ----------------------------

                  The Company shall deliver waivers, executed by each of Charles
F. Flood and  Thomas J.  Cowee,  to the effect  that  neither  the  transactions
contemplated  by this  Agreement  nor the  conversion  of the Series E Preferred
Stock in accordance  with the terms of the Amended  Charter  shall  constitute a
"Change  of  Control"  as  such  term  is used  in  Section  5(e)(ii)(4)  of the
Employment Agreement with each such individual.

         5.16     Other Matters
                  -------------

                  Prior to or as of the Closing Date, the Company shall have (i)
refinanced,  with a lender reasonably acceptable to TCCIII, all of the Company's
outstanding   indebtedness  under  its  Credit  Agreement  on  terms  reasonably
acceptable to TCCIII, and (ii) consummated the acquisition of the Seneca Meadows
Landfill on terms reasonably  acceptable to TCCIII. The aggregate purchase price
for all the  Shares  agreed  to be  purchased  hereunder  shall be not less than
Forty-Seven  Million Five Hundred Thousand Dollars  ($47,500,000)  nor more than
Fifty-Five Million Dollars  ($55,000,000),  and TCCIII and/or one or more of its
Affiliates,  Indosuez  Capital  Partners  2001,  L.P.  and/or one or more of its
Affiliates,  IESI  Capital VI LLC and/or one

                                      -23-
<PAGE>

or more of its Affiliates,  United Company and/or one or more of its Affiliates,
existing  equity  holders of the  Company  exercising  their  preemptive  rights
pursuant to and in accordance with the Existing Stockholders' Agreement,  and/or
other  Purchasers  approved  in  writing  by  TCCIII  (such  approval  not to be
unreasonably withheld) shall be the only Purchasers.

         5.17     Satisfaction of Counsel
                  -----------------------

                  All actions,  proceedings,  instruments,  documents  and other
relevant legal matters in connection with the transactions  contemplated by this
Agreement  shall be reasonably  satisfactory  in all respects to counsel for the
Purchasers.

                                   ARTICLE VI

                  CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
                  --------------------------------------------

                  The  obligations  of the Company under this Agreement to issue
and deliver Shares to a Purchaser are subject to the  satisfaction,  on or prior
to the Closing Date, of the following conditions,  any of which may be waived in
whole or in part by the Company:

         6.1      Due Performance
                  ---------------

                  Such  Purchaser  shall have fully  performed and complied with
all  agreements  and  conditions  required by this  Agreement to be performed or
complied with by it on or prior to the Closing Date.

         6.2      Accuracy of Representations and Warranties
                  ------------------------------------------

                  All representations and warranties of such Purchaser set forth
in this Agreement shall be true and correct on and as of the Closing Date in all
material respects,  as though made on and as of the date hereof and on and as of
the Closing Date.

         6.3      Amended Charter
                  ---------------

                  The requisite  vote of  stockholders  of the Company under the
Delaware General Corporation Law and the Company's  certificate of incorporation
and by-laws required to approve the Amended Charter shall have been obtained.

         6.4      Certificate
                  -----------

                  The Company shall have received a certificate executed by such
Purchaser,  in the case of a Purchaser who is a natural person, or an authorized
officer of such  Purchaser,  in the case of a  Purchaser  which is not a natural
person,  to the effect that the  conditions  set forth in  Sections  6.1 and 6.2
hereof have been satisfied in all respects.

         6.5      No Claims
                  ---------

                  No claim, action,  suit,  investigation or proceeding shall be
pending or threatened by any Person  against any of the parties hereto or any of
their respective Affiliates which, if

                                      -24-
<PAGE>

adversely   determined,   would  (a)  prevent  or  hinder  consummation  of  the
transactions contemplated by this Agreement or the Additional Agreements, or (b)
result in the payment by the Company or a Subsidiary of substantial damages as a
result of the  transactions  contemplated  hereby  which  would  have a Material
Adverse Effect.  No party to this Agreement  shall have received  written notice
from any court or governmental  authority,  commission or instrumentality of its
intention to (i) institute any action or proceeding to restrain, enjoin, nullify
or  render  ineffective  this  Agreement,   any  Additional   Agreement  or  the
transactions  contemplated hereby or thereby,  if consummated,  or (ii) commence
any investigation  (other than a routine letter of inquiry,  including a routine
Civil Investigation Demand) into this Agreement, any Additional Agreement or the
transactions contemplated hereby or thereby, which, in the reasonable opinion of
the Company, would make it inadvisable to consummate such transactions.

         6.6      Approvals, Consents and Waivers
                  -------------------------------

                  The Company  shall have received all  approvals,  consents and
waivers  (including the waivers of preemptive  rights referred to in Section 1.1
hereof) to the transactions  contemplated  hereby required under all agreements,
mortgages, indentures, contracts, licenses, franchises, permits, leases or other
instruments,  laws,  rules  or  regulations  applicable  to the  Company  or any
Subsidiary,  which are necessary to  consummate  the  transactions  contemplated
hereby and to preserve the business of the Company or any Subsidiary.

         6.7      Certain Agreements
                  ------------------

                  Such  Purchaser  shall  have  entered  into the  Stockholders'
Agreement and shall have executed and delivered the Stockholders'  Agreement and
the Amended Registration Rights Agreement.

         6.8      No New Law or Regulation
                  ------------------------

                  There shall not have been enacted  between the date hereof and
the  Closing  Date any law or  regulation  which  would have a Material  Adverse
Effect or prevent or hinder the consummation of the transactions contemplated by
this Agreement or the Additional Agreements.

         6.9      Satisfaction of Counsel
                  -----------------------

                  All actions,  proceedings,  instruments,  documents  and other
relevant legal matters in connection with the transactions  contemplated by this
Agreement and the Additional Agreements, shall be reasonably satisfactory in all
respects to counsel for the Company.

                                  ARTICLE VII

                                 INDEMNIFICATION
                                 ---------------

         7.1      Indemnity of Purchasers
                  -----------------------

                  The Company agrees to defend, indemnify and hold harmless each
Purchaser from and against, and to reimburse such Purchaser with respect to, all
liabilities,   losses,  costs  and

                                      -25-
<PAGE>

expenses,   including,  without  limitation,   reasonable  attorneys'  fees  and
disbursements,  asserted  against or  incurred by such  Purchaser  by reason of,
arising out of, or in connection with:

                  (a) any  material  breach of any  representation  or  warranty
(provided,  however,  that if any such  representation  and  warranty is already
qualified in any respect by materiality or as to Material  Adverse  Effect,  for
purposes of this Section  7.1(a),  such  materiality or Material  Adverse Effect
qualification will be in all respects ignored and such  representation  shall be
true and correct in all material respects without regard to such  qualification)
contained  in this  Agreement  and made by the  Company  or in any  document  or
certificate  delivered  by the  Company  pursuant  to  the  provisions  of  this
Agreement or in connection with the transactions contemplated thereby;

                  (b)  any  material  failure  by the  Company  to  perform  any
agreement required by this Agreement to be performed thereby; or

                  (c)  any  claim,   demand,   action,   suit,   proceeding   or
investigation  involving the Company or any  Subsidiary  arising at any time and
not disclosed in the Disclosure  Schedule  (including the exhibits  thereto) and
required to be so disclosed relating to a state of facts,  action or omission to
act arising on or prior to the Closing Date or the allegation by any third party
of the existence of any state of facts which,  if existing,  would  constitute a
material breach of any  representation  or warranty  referred to in this Section
7.1(a).

         7.2      Indemnification Procedure
                  -------------------------

                  A  Purchaser  shall give  prompt  notice to the Company of any
claim for indemnification  arising under Section 7.1. The Company shall have the
right to assume and to  control  the  defense  of any such  claim  with  counsel
reasonably acceptable to such Purchaser,  at the Company's own cost and expense,
including the cost and expense of reasonable  attorneys' fees and  disbursements
in  connection  with  such  defense,  in which  event the  Company  shall not be
obligated  to pay the  fees  and  disbursements  of  separate  counsel  for such
Purchaser in such action.  In the event,  however,  that such Purchaser's  legal
counsel shall  determine  that defenses may be available to such  Purchaser that
are  different  from or in addition to those  available to the Company,  in that
there  could  reasonably  be  expected  to be a  conflict  of  interest  if such
Purchaser and the Company have common counsel in any such proceeding,  or if the
Company  has not assumed  the  defense of the action or  proceedings,  then such
Purchaser may employ separate counsel to represent or defend such Purchaser, and
the Company shall pay the reasonable fees and disbursements of such counsel.  No
settlement of any such claim or payment in connection  with any such  settlement
shall be made without the prior  consent of the Company  which consent shall not
be unreasonably withheld.

                                      -26-
<PAGE>

                                  ARTICLE VIII

                      AFFIRMATIVE COVENANTS OF THE COMPANY
                      ------------------------------------

                  8.1 Company  Covenants.  The Company covenants and agrees that
until the date on which the Company shall be obligated to file periodic  reports
under the  Securities  Exchange  Act of 1934 by reason  of its  registration  of
Common Stock thereunder if any Shares are outstanding:

                  (a) Financial Statements and Other Information

                  The Company shall deliver to the Purchasers:

                  (i)      as soon as available  but in any event within  thirty
                           (30) days  after the end of each  monthly  accounting
                           period in each fiscal  year,  unaudited  consolidated
                           statements  of income and cash  flows of the  Company
                           and the  Subsidiaries for such monthly period and for
                           the period from the  beginning  of the fiscal year to
                           the end of such  month,  and  unaudited  consolidated
                           balance sheets of the Company and the Subsidiaries as
                           of the end of such monthly  period,  setting forth in
                           each case  comparisons to the Company's annual budget
                           and  to the  corresponding  period  in the  preceding
                           fiscal  year,  and  all  such  statements   shall  be
                           prepared  in  accordance   with  generally   accepted
                           accounting principles, consistently applied and shall
                           be  certified  by  the  Company's   chief   financial
                           officer;

                  (ii)     within one hundred twenty (120) days after the end of
                           each  fiscal  year,  consolidating  and  consolidated
                           statements  of income and cash  flows of the  Company
                           and  the  Subsidiaries  for  such  fiscal  year,  and
                           consolidating and consolidated  balance sheets of the
                           Company  and the  Subsidiaries  as of the end of such
                           fiscal year,  setting forth in each case  comparisons
                           to the  Company's  annual budget and to the preceding
                           fiscal  year,   all  prepared  in   accordance   with
                           generally     accepted     accounting     principles,
                           consistently  applied,  and  accompanied  by (A) with
                           respect  to  the   consolidated   portions   of  such
                           statements,  an opinion of an independent  accounting
                           firm of recognized  national  standing  acceptable to
                           the holders of a majority of the outstanding Series E
                           Preferred   Stock,   (B)  a  certificate   from  such
                           accounting firm, addressed to the Board, stating that
                           in the course of its examination  nothing came to its
                           attention  that  caused it to believe  that there was
                           any default by the Company or any  Subsidiary  in the
                           fulfillment  of or compliance  with any of the terms,
                           covenants,  provisions  or conditions of any material
                           agreement to which the Company or any Subsidiary is a
                           party or, if such  accountants have reason to believe
                           any such  default by the  Company  or any  Subsidiary
                           exists,  a  certificate  specifying  the  nature  and
                           period of existence  thereof,  and (C) a copy of such
                           firm's  annual  management  letter  to the  board  of
                           directors;

                  (iii)    promptly  upon  receipt   thereof,   any   additional
                           reports,   management   letters  or  other   detailed
                           information  concerning  significant  aspects  of the

                                      -27-
<PAGE>

                           Company's  operations  or financial  affairs given to
                           the Company by its independent  accountants  (and not
                           otherwise   contained  in  other  materials  provided
                           hereunder);

                  (iv)     at least  thirty (30) days,  but not more than ninety
                           (90)  days,  prior to the  beginning  of each  fiscal
                           year,  an annual  budget  prepared on a monthly basis
                           for the Company and the  Subsidiaries for such fiscal
                           year (displaying anticipated statements of income and
                           cash flows and balance  sheets),  and  promptly  upon
                           preparation  thereof  any other  significant  budgets
                           prepared  by the  Company or any  Subsidiary  and any
                           revisions of such annual or other budgets;

                  (v)      with reasonable  promptness,  such other  information
                           and  financial  data  concerning  the Company and the
                           Subsidiaries   as  any  Person  entitled  to  receive
                           information  under this Section 8.1(a) may reasonably
                           request.

                  Each  of  the  financial  statements  referred  to in  Section
8.1(a)(i) and 8.1(a)(ii)  hereof shall present fairly the financial  position of
the Company and the  Subsidiaries  in all material  respects as of the dates and
for the periods stated therein,  subject in the case of the unaudited  financial
statements to changes resulting from year-end adjustments.

         (b)      Rights of Inspection

                  The Company will permit any representatives  designated by the
Purchasers to visit and inspect the property of the Company and the Subsidiaries
and to make copies and extracts  therefrom and to discuss the affairs,  finances
and accounts of the Company and the Subsidiaries with their respective officers,
all during reasonable business hours, upon reasonable notice and as often as the
Purchasers may reasonably  request,  subject,  in the case of any proprietary or
confidential  material,  to appropriate  measures to ensure the  confidentiality
thereof,  provided,  however,  that any such investigation shall be conducted in
such  manner as not to  interfere  unreasonably  with (a) the  operation  of the
business of the  Company  and the  Subsidiaries  or (b) the  performance  by the
officers of the Company and the Subsidiaries of their  respective  duties to the
Company  and  the  Subsidiary.  The  presentation  of an  executed  copy of this
Agreement  by  a  Purchaser  to  the  Company's  independent  accountants  shall
constitute  the  Company's   permission  to  its   independent   accountants  to
participate in discussions with such Persons.

         (c)      Reservation of Common Stock

                  The Company shall at all times reserve and keep  available out
of its authorized but unissued shares of Common Stock, solely for the purpose of
issuance  upon the  conversion of the Series E Preferred  Stock,  such number of
shares of Common Stock issuable upon the conversion of all outstanding  Series E
Preferred  Stock.  All shares of Common Stock which are so issuable shall,  when
issued,  be duly and validly issued,  fully paid and nonassessable and free from
all taxes, liens and charges.  The Company shall take all such actions as may be
necessary  to  assure  that all such  shares  of  Common  Stock may be so issued
without  violation  of any  applicable  law or  governmental  regulation  or any
requirements  of any domestic  securities

                                      -28-
<PAGE>

exchange  upon which shares of Common  Stock may be listed  (except for official
notice of issuance  which shall be  immediately  transmitted by the Company upon
issuance).

         (d)      Use of Proceeds

                  The Company shall use the net proceeds  (after  payment of the
Closing Fee and other  expenses  related to the offering and sale of the Shares)
from the  sale of the  Shares  to fund the  acquisition  of the  Seneca  Meadows
Landfill in New York State and related expenses (the "Seneca Meadows  Landfill")
pursuant to the Seneca Meadows Purchase Agreement.

         8.2      Subsequent Transfers
                  --------------------

                  Anything to the contrary herein  notwithstanding,  the Company
and the Purchasers agree that, following the Closing Date, TCCIII shall have the
right to sell Shares to any person reasonably acceptable to the Company that (i)
can make the representations contained in Article III hereof, and (ii) agrees to
be bound by the terms hereof and the Additional Agreements. Each such subsequent
purchaser  of TCCIII's  Shares  under this  Section 8.2 shall  assume all rights
associated  with such Shares  under this  Agreement  and shall be deemed to be a
Purchaser  hereunder  and  entitled to all rights and benefits and be subject to
all obligations of, a Purchaser hereunder.  Such subsequent sale by TCCIII shall
not be subject to any preemptive or other rights.  The Company shall  reasonably
cooperate  in  effecting  such  sales,  including  by  entering  into  customary
management  rights letters with such purchasers that require their investment in
the Company to be a "venture capital operating company" qualified investment (as
provided  for in ERISA and the  regulations  thereunder)  and granting up to one
such purchaser observer rights on the Company's Board of Directors.

         8.3      Sale of Additional Shares.
                  --------------------------

                  Following the Closing  Date,  the Company shall have the right
to sell up to that number of shares of Series E Preferred Stock that is equal to
the difference  between 55,000 and all Shares  previously  sold pursuant to this
Agreement  (including  under this Section 8.3).  Notwithstanding  the foregoing,
from and after the date that the Company has sold 2,500 Shares  pursuant to this
Section 8.3,  the Company  shall not effect any further  sales  pursuant to this
Section  8.3  until the  earlier  of (i) the date  that  TCCIII  has sold in the
aggregate  15,000 Shares  pursuant to Section 8.2, and (ii) the date that TCCIII
informs the  Company  that it no longer  desires to sell any Shares  pursuant to
Section 8.2.  All sales  pursuant to this Section 8.3 shall be made (a) pursuant
to this Agreement (by having purchasers elect to become a party hereto with such
changes as are  necessary to reflect the delayed  closing of such sale),  (b) on
terms no less  favorable  to the  Company as are  contained  herein,  and (c) to
purchasers  reasonably  acceptable  to TCCIII.  Purchasers  of  TCCIII's  Shares
pursuant to this Section 8.3 shall assume all rights associated with such Shares
under this Agreement and shall be deemed to be Purchasers hereunder and entitled
to all rights and  benefits  and be subject to all  obligations  of, a Purchaser
hereunder,  except for such  changes as are  necessary  to reflect  the  delayed
closing  of such  sale.  The  Company  and  TCCIII  acknowledge  that  they will
cooperate  in  the  operation  of  Sections  8.2  and  8.3,   including,   where
practicable,  having potential  purchasers of additional Shares from the Company
pursuant to this  Section 8.3 elect to purchase  Shares from TCCIII  pursuant to
Section 8.2.

                                      -29-
<PAGE>

                                   ARTICLE IX

                                   TERMINATION
                                   -----------

         9.1      Termination
                  -----------

                  This  Agreement  may  be  terminated   and  the   transactions
contemplated hereby abandoned at any time prior to the Closing:

                  (a) By mutual written consent of a majority-in-interest of the
Purchasers and the Company;

                  (b) By either a majority-in-interest  of the Purchasers or the
Company,  if the  transactions  shall not have occurred on or before October 31,
2003 and the party seeking termination is not at such time in material breach of
this Agreement;

                  (c) By the Company,  if any condition  specified in Article VI
hereof has not been met or waived by the Company at such time as such  condition
can no longer be satisfied;

                  (d)  By a  majority-in-interest  of  the  Purchasers,  if  any
condition  specified  in  Article  V hereof  has not been met or  waived  by the
Purchasers at such time as such condition can no longer be satisfied; or

                  (e) By either a majority-in-interest  of the Purchasers or the
Company,  if a court of competent  jurisdiction or other governmental  authority
shall have issued a final,  non-appealable  order, decree or ruling or taken any
other action (which order,  decree or ruling the parties  hereto shall use their
best  efforts  to lift),  in each case  permanently  restraining,  enjoining  or
otherwise prohibiting the transactions contemplated hereby.

         9.2      Procedure and Effect of Termination
                  -----------------------------------

                  In the event of  termination  of this  Agreement  pursuant  to
Section 9.1 hereof,  written  notice  thereof  shall  forthwith  be given by the
terminating  party or parties to the other  party or  parties  hereto,  and this
Agreement shall  thereupon  terminate and become void and have no effect and the
transactions  contemplated  hereby shall be abandoned  without further action by
the parties  hereto,  except that the provisions of Sections 4.2 and 10.7 hereof
shall survive such termination;  provided,  however, that such termination shall
not relieve any party hereto of any liability for any breach of this Agreement.

                                   ARTICLE X

                                  MISCELLANEOUS
                                  -------------

         10.1     Survival of Representations, Warranties and Agreements
                  ------------------------------------------------------

                  All representations and warranties and statements made in this
Agreement  or in any document or  certificate  delivered  pursuant  hereto shall
survive the Closing  Date for one (1)

                                      -30-
<PAGE>

year from the Closing or, with respect to the Company,  if later, until 120 days
after  delivery to the  Purchasers  of the  Company's  2003 fiscal year  audited
financial  statements,  regardless of any investigation  made by any party or on
its behalf;  provided,  however,  that the  representations  and  warranties and
statements made by the Company in Section 2.7 of this Agreement entitled "Taxes"
shall  survive until the end of the  applicable  statute of  limitations  period
(giving effect to any extensions or waivers thereof),  plus six (6) months.  The
representations   and   warranties   set   forth   in   Section   2.3   entitled
"Capitalization" shall survive the Closing Date without any time limitation. All
covenants and agreements  made herein shall survive  Closing in accordance  with
their terms.

         10.2     Expenses
                  --------

                  (a) The Company agrees that,  whether or not the  transactions
contemplated by this Agreement are consummated, it shall pay all reasonable fees
of, and out-of-pocket  expenses  incurred by, TCCIII,  not to exceed $150,000 in
the  aggregate,   including,  without  limitation,  the  fees  and  expenses  of
McGuireWoods  LLP, counsel to TCCIII,  in connection with this Agreement and the
transactions  contemplated hereby, including,  without limitation,  the cost and
expenses  of  preparing  and  negotiating  this  Agreement  and  the  Additional
Agreements and consummating the transactions contemplated hereby.

                  (b) The costs and  expenses  (including  reasonable  attorneys
fees) associated with any filings with any  governmental  body and any approvals
of any governmental  authority (including with respect to the  Hart-Scott-Rodino
Antitrust  Improvements  Act of 1976,  as  amended)  required  under the Amended
Charter in connection  with the conversion or redemption of any capital stock of
the Company shall be paid by the Company.

         10.3     Consent to Amendments
                  ---------------------

                  Except as otherwise  expressly provided herein, the provisions
of this  Agreement  may be amended and the  Company  may take any action  herein
prohibited,  or omit to perform any act herein  required to be  performed by it,
only if the  Company  has  obtained  the  written  consent  of the  holders of a
majority of the Common  Stock issued upon  conversion  of the Series E Preferred
Stock  (determined  as if all then  outstanding  Series E  Preferred  Stock were
converted in accordance with its terms).  No other course of dealing between the
Company and the holder of any  Preferred  Stock or Common  Stock or any delay in
exercising any rights  hereunder or under the Amended Charter shall operate as a
waiver of any rights of any such holders.

         10.4     Notice
                  ------

                  All  communications,  notices,  requests,  consents or demands
given or required under this  Agreement  shall be in writing and shall be deemed
to have been duly given when delivered to, or received by prepaid  registered or
certified mail or recognized  overnight courier addressed to, or upon receipt of
a facsimile sent to, the party for whom intended,  as follows,  or to such other
address or  facsimile  number as may be furnished by such party by notice in the
manner provided herein:

                                      -31-
<PAGE>

                  If to the Company:

                           IESI Corporation
                           2301 Eagle Parkway
                           Suite 200
                           Fort Worth, TX 76117
                           Attention:  President
                           Tel:  (817) 632-4000
                           Fax: (817) 222-4540

                  in each case with a copy (which shall not constitute notice)
                  to:

                           McDermott, Will & Emery
                           50 Rockefeller Plaza
                           New York, New York  10020
                           Attention: Stephen B. Selbst, Esq.
                           Tel.: (212) 547-5362
                           Fax: (212) 547-5444

                  If to a Purchaser,  to such  Purchaser's  address set forth on
                  such Purchaser's signature page hereto,

                  in each case with a copy (which shall not constitute notice)
                  to:

                           McGuire Woods LLP
                           1750 Tysons Boulevard
                           Suite 1800
                           McLean, VA 22102
                           Attention:  Robert G. Marks, Esq.
                           Tel.: (703) 712-5061
                           Fax: (703) 712-5050

         10.5     Entire Agreement
                  ----------------

                  This  Agreement,  the  Disclosure  Schedule  and the  exhibits
thereto,  the  Additional  Agreements and the  instruments  and agreements to be
executed pursuant hereto or thereto,  set forth the entire  understanding of the
parties hereto with respect to the transactions contemplated hereby and thereby,
merges and supersedes all prior and contemporaneous  understandings with respect
to such subject  matter and may not be waived or modified,  in whole or in part,
except  by a  writing  signed by each of the  parties  hereto.  No waiver of any
provision of this  Agreement  in any instance  shall be deemed to be a waiver of
the same or any other provision in any other  instance.  Failure of any party to
enforce any  provision of this  Agreement  shall not be construed as a waiver of
its rights under such provision.

         10.6     Successors and Assigns
                  ----------------------

                  This Agreement shall be binding upon,  enforceable against and
inure to the  benefit  of,  the  parties  hereto  and  their  respective  heirs,
administrators, executors, personal

                                      -32-
<PAGE>

representatives,  successors  and  assigns,  and  nothing  herein is intended to
confer any right,  remedy or benefit upon any other Person. This Agreement shall
be  assignable  to any  successor  or  permitted  assign of a holder of Series E
Preferred Stock.

         10.7     Governing Law; Submission to Jurisdiction
                  -----------------------------------------

                  This  Agreement  shall  in all  respects  be  governed  by and
construed in  accordance  with the laws of the State of New York  applicable  to
agreements  made and fully to be performed in such state,  without giving effect
to conflicts of law rules or provisions (whether of the State of New York or any
other  jurisdiction)  that  would  cause  the  application  of the  laws  of any
jurisdiction  other  than the State of New York.  The  parties  hereto  agree to
submit to the  jurisdiction  of the State and Federal courts in the State of New
York with  respect  to any claim or matter  arising  under this  Agreement,  and
hereby  consent that service of process with respect to all courts in and of the
State of New York may be made by  registered  mail to such Person at the address
of such Person set forth herein.

         10.8     Counterparts
                  ------------

                  This Agreement may be executed in multiple counterparts,  each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

         10.9     Knowledge
                  ---------

                  As used in Article II hereof,  the term "knowledge" shall mean
and include the actual knowledge or awareness,  after inquiry, of the Company or
the  Subsidiaries  (which shall include the actual knowledge or awareness of the
officers, directors and key employees of the Company or the Subsidiaries and the
general  managers of each  facility of the  Company and the  Subsidiaries),  and
without  limiting the foregoing,  the knowledge or awareness,  after  reasonable
inquiry,  of  Jeffrey J.  Keenan,  Charles  F.  Flood,  Thomas J. Cowee and Vito
Galante shall be imputed to the Company.

         10.10    Construction
                  ------------

                  Headings  contained in this Agreement are for convenience only
and shall not be used in the interpretation of this Agreement. References herein
to Articles,  Sections and Exhibits are to the articles,  sections and exhibits,
respectively,  of this  Agreement,  unless  specifically  noted  otherwise.  The
Disclosure  Schedule is hereby  incorporated herein by reference and made a part
of this Agreement.  As used herein,  the singular  includes the plural,  and the
masculine, feminine and neuter gender each includes the others where the context
so indicates.  When used herein,  the term  "including"  shall mean  "including,
without limitation".

         10.11    Severability
                  ------------

                  If any  provision  of this  Agreement is held to be invalid or
unenforceable  by a court of competent  jurisdiction,  this  Agreement  shall be
interpreted  and  enforceable as if such provision were severed or limited,  but
only to the  extent  necessary  to  render  such  provision  and this  Agreement
enforceable.

                                      -33-
<PAGE>

                                   ARTICLE XI

                                   DEFINITIONS
                                   -----------

         11.1     Defined Terms
                  -------------

                  As used in this Agreement,  and unless the context  requires a
different meaning, the following terms have the meanings indicated:

                  "Additional  Agreements"  shall mean the Amended Charter,  the
Stockholders' Agreement and the Registration Rights Agreements.

                  "Affiliate"  of any  particular  Person means any other Person
controlling,  controlled by or under common control with such particular Person,
where "control" means the  possession,  directly or indirectly,  of the power to
direct the management and policies of a Person whether  through the ownership of
voting securities,  contract or otherwise;  provided that TC Carting, L.L.C., TC
Carting II,  L.L.C.,  TCCIII and Thayer  Equity  Investors  IV,  L.P.  and their
respective affiliates shall not be deemed "Affiliates" of the Company.

                  "Affiliated  Group"  means an  affiliated  group as defined in
Section 1504 of the Code (or any  analogous  combined,  consolidated  or unitary
group defined under state, local or foreign income Tax law) of which the Company
or any Subsidiary is or has been a member.

                  "Agreement" shall mean this Stock Purchase  Agreement,  as the
same may be amended,  supplemented  or modified  from time to time in accordance
with the terms hereof.

                  "Amended  Subordinated Rights Agreement" is defined in Section
2.1(c).

                  "Amended  Charter"  shall mean the Fifth  Amended and Restated
Certificate of Incorporation of the Company.

                  "Benefit Plan" is defined in Section 2.19(a).

                  "Board" is defined in Section 5.7(b).

                  "Class A Stock" shall mean the Class A Voting  Common Stock of
the Company, par value $.01 per share.

                  "Class B Stock" shall mean the Class B Nonvoting  Common Stock
of the Company, par value $.01 per share.

                  "Closing" is defined in Section 1.5.

                  "Closing Date" is defined in Section 1.5.

                  "Closing Fee" is defined in Section 1.4.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
amended.

                                      -34-
<PAGE>

                  "Common  Stock"  shall  mean the Class A Stock and the Class B
Stock.

                  "Company" is defined in the preamble.

                  "Credit   Agreement"  shall  mean  that  certain  Amended  and
Restated  Revolving  Credit and Term Loan Agreement,  among IESI Corporation and
its  subsidiaries  (other  than De Minimis  Subsidiaries),  the  Lenders,  Fleet
National Bank as Administrative  Agent and LaSalle Bank National  Association as
Syndication Agent.

                  "Disclosure Schedule" is defined in Section 2.1(b).

                  "E&Y" is defined in Section 2.5.

                  "Employment Agreements" is defined in Section 2.8(a)(ii).

                  "Encumbrances" is defined in Section 2.10(a).

                  "Environmental, Health and Safety Requirements" shall mean all
federal,  state, local and foreign statutes,  regulations,  ordinances and other
provisions  having the force or effect of law, all  judicial and  administrative
orders  and  determinations,  all  contractual  obligations  and all  common law
concerning public health and safety,  worker health and safety, and pollution or
protection of the environment,  including without  limitation all those relating
to  the  presence,  use,  production,   generation,  handling,   transportation,
treatment,  storage,  disposal,  distribution,  labeling,  testing,  processing,
discharge,  release,  threatened  release,  control, or cleanup of any hazardous
materials,  substances or wastes,  chemical substances or mixtures,  pesticides,
pollutants,  contaminants,  toxic chemicals,  petroleum  products or byproducts,
asbestos,  polychlorinated biphenyls, noise or radiation, each as amended and as
now or hereafter in effect.

                  "ERISA" is defined in Section 2.19(a).

                  "Existing Preferred Stock" is defined in Section 2.3.

                  "Existing  Stockholders"  shall mean the  stockholders  of the
Company on the Closing Date immediately prior to the Closing.

                  "Existing Stockholders' Agreement" is defined in Section 4.6.

                  "Financial Statements" is defined in Section 2.5.

                  "Indebtedness"   means   at   a   particular   time,   without
duplication,  (A) any  indebtedness for borrowed money or issued in substitution
for or  exchange  of  indebtedness  for  borrowed  money,  (B) any  indebtedness
evidenced  by any  note,  bond,  debenture  or  other  debt  security,  (C)  any
indebtedness  for the  deferred  purchase  price of property  or  services  with
respect to which a Person is liable,  contingently  or otherwise,  as obligor or
otherwise (other than trade payables and other current  liabilities  incurred in
the  ordinary  course of business  which are not more than six months past due),
(D) any commitment by which a Person assures a creditor against loss (including,

                                      -35-
<PAGE>

without limitation, contingent reimbursement obligations with respect to letters
of  credit),  (E)  any  indebtedness  guaranteed  in  any  manner  by  a  Person
(including,  without  limitation,  guarantees  in the  form of an  agreement  to
repurchase or reimburse),  (F) any  obligations  under  capitalized  leases with
respect to which a Person is liable,  contingently  or  otherwise,  as  obligor,
guarantor or otherwise,  or with respect to which obligations a Person assures a
creditor  against  loss,  (G) any  indebtedness  secured by a Lien on a Person's
assets  and (H) any  unsatisfied  obligation  for  "withdrawal  liability"  to a
"multiemployer plan" as such terms are defined under ERISA.

                  "Intellectual Property" is defined in Section 2.20.

                  "Investment"  as applied to any Person means (A) any direct or
indirect purchase or other acquisition by such Person of any notes, obligations,
instruments,  stock,  securities or ownership  interest  (including  partnership
interests and joint  venture  interests) of any other Person and (B) any capital
contribution by such Person to any other Person.

                  "IRS" is defined in Section 2.19(b).

                  "knowledge" is defined in Section 10.9.

                  "Leased Real Property" is defined in Section 2.10(b).

                  "Liens" is defined in Section 2.2.

                  "Material Adverse Effect" is defined in Section 2.1(a).

                  "Operating Agreements" is defined in Section 2.8(a).

                  "Owned Real Property" is defined in Section 2.10(a).

                  "Person" means an individual, a partnership,  a corporation, a
limited liability  company,  an association,  a joint stock company,  a trust, a
joint venture,  an unincorporated  organization and a governmental entity or any
department, agency or political subdivision thereof.

                  "Preferred Stock" is defined in Section 2.3.

                  "Projections" is defined in Section 2.6(b).

                  "Purchasers" is defined in the preamble.

                  "Real Property" is defined in Section 2.10(b).

                  "Real Property Leases" is defined in Section 2.10(b).

                  "Registration Rights Agreement" is defined in Section 2.1(c).

                  "Second Amended  Registration Rights Agreements" is defined in
Section 2.1(c).

                  "Securities  Act" shall mean the  Securities  Act of 1933,  as
amended.

                                      -36-
<PAGE>

                  "Seneca Meadows Landfill" is defined in Section 8.1(d).

                  "Seneca  Meadows  Purchase  Agreement"  is  defined in Section
2.8(a)(ix).

                  "Series A Preferred Stock" is defined in Section 2.3.

                  "Series B Preferred Stock" is defined in Section 2.3.

                  "Series C Preferred Stock" is defined in Section 2.3.

                  "Series D Preferred Stock" is defined in Section 2.3.

                  "Series E Preferred Stock" shall mean the Series E Convertible
Preferred  Stock of the Company,  par value $1.00 per share, to be issued by the
Company pursuant to this Agreement.

                  "Shares" is defined in Section 1.2.

                  "Stockholders' Agreement" is defined in Section 2.1(c).

                  "Subordinate Agreement" is defined in Section 5.4.

                  "Subsidiary" is defined in Section 2.1(b).

                  "Tax"  or  "Taxes"  means  any (A)  federal,  state,  local or
foreign  income,  gross receipts,  franchise,  estimated,  alternative  minimum,
add-on minimum, sales, use, transfer, registration, value added, excise, natural
resources,    severance,   stamp,   occupation,    premium,   windfall   profit,
environmental,  disability,  payroll, license, employee or other withholding, or
other  tax,  of any  kind  whatsoever,  including  any  interest,  penalties  or
additions  to tax or  additional  amounts  in  respect  of  the  foregoing;  (B)
liability of the Company or any Subsidiary for the payment of any amounts of the
type  described  in clause (A) arising as a result of being (or ceasing to be) a
member of any  Affiliated  Group (or being included (or required to be included)
in any Tax Return  relating  thereto);  and (C)  liability of the Company or any
Subsidiary for the payment of any amounts of the type described in clause (A) as
a result of any express or implied  obligation to indemnify or otherwise  assume
or succeed to the liability of any other person.

                  "Tax Returns" means returns, declarations, reports, claims for
refund,  information  returns  or other  documents  (including  any  related  or
supporting  schedules,  statements or information) filed or required to be filed
in connection with the  determination,  assessment or collection of Taxes of any
party  or  the  administration  of  any  laws,   regulations  or  administrative
requirements relating to any Taxes.

                  "Warrant Holder" is defined in Section 5.14.

                  "Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary  of which all of the  outstanding  capital  stock or other  ownership
interests  are owned by such Person or another  Wholly-Owned  Subsidiary of such
Person.

                                      -37-
<PAGE>

                  IN WITNESS  WHEREOF,  each of the parties  hereto has executed
this Agreement as of the date first set forth above.

                                             COMPANY:

                                             IESI CORPORATION
                                             a Delaware corporation

                                             By:________________________________
                                                  Name:
                                                  Title:

<PAGE>

                                         PURCHASER:

                                         TC CARTING III, L.L.C.
                                         a Delaware limited liability company

                                         By: Thayer Equity Investors IV, L.P,
                                               Its Managing Member

                                         By: TC Equity Partners IV, L.L.C.,
                                                  Its General Partner

                                         _______________________________
                                               Name:
                                               Title:

                                               Address:

                                               ________________________________

                                               ________________________________

                                               ________________________________

                                               Number of Shares being purchased:

                                                          40,000

<PAGE>

                                         PURCHASER:

                                         IESI CAPITAL VI LLC,
                                         a Mississippi limited liability company

                                          By:________________________________
                                               Jeffrey J. Keenan
                                               Managing Member

                                               Address:

                                               c/o The United Company
                                               1005 Glenway Avenue
                                               Bristol, VA  24201

                                               Number of Shares being purchased:

                                               5,500

<PAGE>

                                         PURCHASER:

                                         ________________________________
                                              Don A. Sanders, individually

                                          Address: c/o Sanders Morris Harris
                                                   600 Travis Street, Suite 3100
                                                   Houston, Texas 77002
                                          Attention: Don A. Sanders
                                          Fax: (713) 250-4294

                                          Number of Shares being purchased:

                                          1,000

                                         SANDERS OPPORTUNITY FUND
                                         (INSTITUTIONAL), L.P
                                         a Delaware limited partnership
                                         by: SOF Management, LLC, its General
                                         Partner

                                         By:________________________________
                                           Name: Don A. Sanders
                                           Title: Manager

                                           Address:c/o Sanders Morris Harris
                                                   600 Travis Street, Suite 3100
                                                   Houston, Texas 77002
                                           Attention: Don A. Sanders
                                           Fax: (713) 250-4294

                                           Number of Shares being purchased:

                                                       753

<PAGE>

                                         PURCHASER:

                                         SANDERS OPPORTUNITY FUND, L.P.
                                         a Delaware limited partnership
                                         by: SOF Management, LLC, its General
                                         Partner

                                         By:________________________________
                                            Name: Don A. Sanders
                                            Title:   Manager

                                          Address: c/o Sanders Morris Harris
                                                   600 Travis Street, Suite 3100
                                                   Houston, Texas 77002
                                          Attention: Don A. Sanders
                                          Fax: (713) 250-4294

                                          Number of Shares being purchased:

                                          247

<PAGE>

                                                                       Exhibit A
                                                                       ---------

                                 AMENDED CHARTER

<PAGE>

                                                                       Exhibit B
                                                                       ---------

                             STOCKHOLDERS' AGREEMENT

<PAGE>

                                                                       Exhibit C
                                                                       ---------

                         REGISTRATION RIGHTS AGREEMENTS

<PAGE>

                                                                       Exhibit D
                                                                       ---------

                       FOURTH AMENDED AND RESTATED BY-LAWS

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