1 Exhibit 10.3 CREDIT AGREEMENT dated as of June 9, 1995

1
Exhibit 10.3

$140,000,000

CREDIT AGREEMENT

dated as of June 9, 1995

among

FLORIDA STEEL CORPORATION,
as Borrower,

CERTAIN FINANCIAL INSTITUTIONS,
as Lenders,

THE BANK OF TOKYO, LTD.,
New York Agency

and

NATIONSBANK OF FLORIDA, N.A.,
as Issuing Banks
and Co-Administrative Agents

and

THE BANK OF TOKYO, LTD.,
New York Agency,
as Agent
2
TABLE OF CONTENTS

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ARTICLE 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 General Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . 34
1.3 Accounting Terms and Determinations . . . . . . . . . . . . . . . 35

ARTICLE 2. The Credit Facility . . . . . . . . . . . . . . . . . . . . . . . 35
2.1 Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.2 Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . . . 36
2.3 Facility Letters of Credit . . . . . . . . . . . . . . . . . . . 36
2.4 Borrowing Mechanics (Revolving Loans) . . . . . . . . . . . . . . 37
2.4.1 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . 37
2.4.2 Funding of Revolving Loans . . . . . . . . . . . . . . . . . . . 38
2.5 Borrowing Mechanics and Certain Other
Provisions Regarding Swingline Loans . . . . . . . . . . . . . 39
2.6 Certain Provisions Regarding Fixed
Rate Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.6.1 Notice of Continuation and Notice of
Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2.6.2 Suspension of Fixed Rate Option . . . . . . . . . . . . . . . . . 43
2.6.3 Breakage Costs . . . . . . . . . . . . . . . . . . . . . . . . . 44
2.7 Issuance Mechanics and Other Provisions
Regarding Facility Letters of Credit . . . . . . . . . . . . . 45
2.7.1 Requests for Issuance . . . . . . . . . . . . . . . . . . . . . . 45
2.7.2 Participation by Lenders . . . . . . . . . . . . . . . . . . . . 46
2.7.3 LOC Drawings and Reimbursements . . . . . . . . . . . . . . . . . 46
2.7.4 Obligations of Lenders Absolute . . . . . . . . . . . . . . . . . 49
2.7.5 Obligations of Borrower Absolute . . . . . . . . . . . . . . . . 50
2.7.6 Letter of Credit Reports . . . . . . . . . . . . . . . . . . . . 52
2.7.7 Third Party Letters of Credit . . . . . . . . . . . . . . . . . 52
2.7.8 LOC Cash Collateral Account . . . . . . . . . . . . . . . . . . 53
2.8 Interest on Loans and Other Obligations . . . . . . . . . . . . . 54
2.8.1 Interest on Fixed Rate Loans . . . . . . . . . . . . . . . . . . 54
2.8.2 Interest on Floating Rate Loans . . . . . . . . . . . . . . . . . 54
2.8.3 Interest on Overdue Amounts . . . . . . . . . . . . . . . . . . . 54
2.8.4 Changes in Applicable Margin . . . . . . . . . . . . . . . . . . 55
2.9 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . 55
2.9.1 Commitment Fees . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.9.2 Participation Fees . . . . . . . . . . . . . . . . . . . . . . . 55
2.9.3 Letter of Credit Fees and Expenses . . . . . . . . . . . . . . . 55
2.9.4 Agent's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.9.5 Audit Charges . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.9.6 Fees Fully Earned . . . . . . . . . . . . . . . . . . . . . . . . 56
2.10 Repayment of Outstanding Credit . . . . . . . . . . . . . . . . . 57
2.10.1 Mandatory Repayments . . . . . . . . . . . . . . . . . . . . . . 57

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2.10.2 Optional Prepayment . . . . . . . . . . . . . . . . . . . . . . 57
2.11 Expiration Date; Reduction of
Credit Facility . . . . . . . . . . . . . . . . . . . . . . . 58
2.11.1 Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . 58
2.11.2 Mandatory Reduction of Credit Facility . . . . . . . . . . . . . 59
2.11.3 Optional Reduction of Credit Facility . . . . . . . . . . . . . 59
2.12 Evidence of Indebtedness . . . . . . . . . . . . . . . . . . . . 59
2.12.1 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
2.12.2 Loan Account . . . . . . . . . . . . . . . . . . . . . . . . . . 59
2.12.3 Statement of Account . . . . . . . . . . . . . . . . . . . . . . 60
2.12.4 Agent's Register . . . . . . . . . . . . . . . . . . . . . . . 60
2.13 Place and Manner of Payments by Borrower . . . . . . . . . . . . 60
2.13.1 Time for Payment . . . . . . . . . . . . . . . . . . . . . . . . 60
2.13.2 Computation . . . . . . . . . . . . . . . . . . . . . . . . . . 61
2.13.3 Distribution of Payments . . . . . . . . . . . . . . . . . . . . 61
2.14 Increased Costs, Etc.; Taxes . . . . . . . . . . . . . . . . . . 62
2.14.1 Increased Cost . . . . . . . . . . . . . . . . . . . . . . . . . 62
2.14.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
2.15 Additional Provisions Regarding Credit
Facility and Loans . . . . . . . . . . . . . . . . . . . . . . 67
2.15.1 Lockbox Arrangement; Flow of Funds
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
2.15.2 Determination of Borrowing Base . . . . . . . . . . . . . . . . 69
2.15.3 Several Obligations . . . . . . . . . . . . . . . . . . . . . . 69
2.15.4 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . 69
2.15.5 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . 70
2.15.6 Defaulting Lenders . . . . . . . . . . . . . . . . . . . . . . 70

ARTICLE 3. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 71
3.1 Conditions to Initial Loans . . . . . . . . . . . . . . . . . . 71
(a) Effective Date . . . . . . . . . . . . . . . . . . . . . 71
(b) No Material Adverse Change . . . . . . . . . . . . . . . . 71
(c) Corporate and Legal Proceedings . . . . . . . . . . . . . 71
(d) Availability . . . . . . . . . . . . . . . . . . . . . . 71
(e) BTCC Credit Facilities . . . . . . . . . . . . . . . . . . 71
(f) Consents and Approvals . . . . . . . . . . . . . . . . . . 72
(g) Due Diligence . . . . . . . . . . . . . . . . . . . . . . 72
(h) Fees and Expenses . . . . . . . . . . . . . . . . . . . . 72
(i) Termination of BTCC Lock Box
Arrangements . . . . . . . . . . . . . . . . . . . . . 72
(j) Closing Documents . . . . . . . . . . . . . . . . . . . . 72
(k) Additional Documents . . . . . . . . . . . . . . . . . . . 76
3.2 Conditions to Issuance of Letters
of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.3 Condition to Swingline Loans . . . . . . . . . . . . . . . . . . 77
3.4 Conditions to Each Credit Event . . . . . . . . . . . . . . . . 77

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ARTICLE 4. Representations and Warranties . . . . . . . . . . . . . . . . . 78
4.1 Organization and Qualification;
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 79
4.2 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
4.3 Liens; Inventory . . . . . . . . . . . . . . . . . . . . . . . . 80
4.4 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
4.5 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . 81
4.6 Financial Statements . . . . . . . . . . . . . . . . . . . . . . 81
4.7 Locations of Offices, Records and
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . 81
4.8 Names of Borrower or Predecessors . . . . . . . . . . . . . . . . 82
4.9 No Judgments or Litigation . . . . . . . . . . . . . . . . . . . 82
4.10 No Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
4.11 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4.12 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . 83
4.13 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
4.14 Compliance with Environmental Laws . . . . . . . . . . . . . . . 84
4.15 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . 85
4.16 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . 85
4.17 Title to Property . . . . . . . . . . . . . . . . . . . . . . . . 86
4.18 Investment Company . . . . . . . . . . . . . . . . . . . . . . . 86
4.19 No Event of Default . . . . . . . . . . . . . . . . . . . . . . . 86
4.20 Taxes and Tax Returns . . . . . . . . . . . . . . . . . . . . . . 86
4.21 Recording and Stamp Taxes . . . . . . . . . . . . . . . . . . . . 87
4.22 No Other Indebtedness, Status as
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 87
4.23 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . 88
4.24 Affiliate Transactions . . . . . . . . . . . . . . . . . . . . . 88
4.25 Accuracy and Completeness of Information . . . . . . . . . . . . 88
4.26 No Material Adverse Change . . . . . . . . . . . . . . . . . . . 88

ARTICLE 5. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . 89
5.1 Financial Information . . . . . . . . . . . . . . . . . . . . . . 89
5.2 Corporate Existence and Franchise . . . . . . . . . . . . . . . . 92
5.3 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . 92
5.4 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
5.5 Notice of Legal Proceedings or
Adverse Changes Notice of Borrowing . . . . . . . . . . . . . . 94
5.6 Environmental and Other Matters . . . . . . . . . . . . . . . . 94
5.7 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . 95
5.8 Changes in Location of Offices . . . . . . . . . . . . . . . . . 96
5.9 Location of Inventory . . . . . . . . . . . . . . . . . . . . . . 96
5.10 Name Change; Trade Name . . . . . . . . . . . . . . . . . . . . . 96
5.11 Adverse Change in Collateral . . . . . . . . . . . . . . . . . . 97
5.12 Collateral Records . . . . . . . . . . . . . . . . . . . . . . . 97
5.13 Security Interests . . . . . . . . . . . . . . . . . . . . . . . 97
5.14 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . 98
5.15 Casualty Loss; Condemnation . . . . . . . . . . . . . . . . . . 98

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5.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
5.17 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . 99
5.18 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.19 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.20 Notification of Certain Events . . . . . . . . . . . . . . . . . . 99
5.21 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . 100
5.22 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . 100
5.23 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 100
5.24 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 101

ARTICLE 6. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . 101
6.1 Consolidated Net Worth . . . . . . . . . . . . . . . . . . . . . . 101
6.2 Interest Coverage . . . . . . . . . . . . . . . . . . . . . . . . 101
6.3 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 101
6.4 Restricted Expenditures . . . . . . . . . . . . . . . . . . . . . 101
6.5 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 103
6.6 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
6.7 No Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . 105
6.8 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 106
6.9 No Corporate Changes . . . . . . . . . . . . . . . . . . . . . . 107
6.10 Sale/Leaseback Transactions . . . . . . . . . . . . . . . . . . . 107
6.11 No Restricted Payments . . . . . . . . . . . . . . . . . . . . . . 108
6.12 No Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 109
6.13 No Affiliate Transactions . . . . . . . . . . . . . . . . . . . . 111
6.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.15 Additional Bank Accounts . . . . . . . . . . . . . . . . . . . . 112
6.16 No Excess Cash . . . . . . . . . . . . . . . . . . . . . . . . . . 112
6.17 Material Amendments of Material
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
6.18 Additional Negative Pledges . . . . . . . . . . . . . . . . . . . 113
6.19 No Additional Subsidiaries . . . . . . . . . . . . . . . . . . . . 113

ARTICLE 7. Events of Default and Remedies . . . . . . . . . . . . . . . . . . 114
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 114
7.2 Acceleration and Cash Collateralization . . . . . . . . . . . . . 118
7.3 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

ARTICLE 8. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
8.1 Appointment of Agent . . . . . . . . . . . . . . . . . . . . . . . 121
8.2 Nature of Duties of Agent . . . . . . . . . . . . . . . . . . . . 121
8.3 Lack of Reliance on Agent . . . . . . . . . . . . . . . . . . . . 121
8.4 Certain Rights of the Agent . . . . . . . . . . . . . . . . . . . 122
8.5 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . 123
8.6 Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . 123
8.7 The Agent in its Individual Capacity . . . . . . . . . . . . . . . 123
8.8 Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 124
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . 124
8.10 Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . 125

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8.11 Actions with Respect to Defaults . . . . . . . . . . . . . . . . . 127
8.12 Delivery of Information . . . . . . . . . . . . . . . . . . . . . . 127

ARTICLE 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
9.1 SUBMISSION TO JURISDICTION; WAIVERS . . . . . . . . . . . . . . . . 127
9.2 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . 128
9.3 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
9.4 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
9.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
9.6 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
9.7 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 133
9.8 Indemnification; Expenses . . . . . . . . . . . . . . . . . . . . . 134
9.9 Entire Agreement: Successors and Assigns . . . . . . . . . . . . . 135
9.10 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 135
9.11 Nonliability of Agent and Lenders . . . . . . . . . . . . . . . . . 136
9.12 The Co-Administrative Agent . . . . . . . . . . . . . . . . . . . . 136
9.13 Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . 137
9.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
9.15 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
9.16 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
9.17 Maximum Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
9.18 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . 138

ANNEX I - Lenders, Lending Offices and Commitment Amounts

SCHEDULES

Schedule 4.1 Jurisdictions Where Qualified to Do Business
Schedule 4.3 Warehouse Locations
Schedule 4.7 Asset, Equipment and Inventory Locations
Schedule 4.8 Fictitious Business Names
Schedule 4.9 Judgments or Litigation
Schedule 4.10 Conduct of Business and Defaults
Schedule 4.12 Compliance With Law
Schedule 4.13(a) Employee Benefit Plans
Schedule 4.14 Compliance With Environmental Law
Schedule 4.17 Title to Property
Schedule 4.20(a) Late Filing of Tax Returns and Requests for
Extensions for Filing Tax Returns
Schedule 4.20(b) Established Reserves for Payment of Taxes,
Assessments, Fees and Other Governmental Charges
Schedule 4.20(c) Tax Deficiencies and Liens and Granted Extensions

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Schedule 4.20(d) Tax Sharing Agreements
Schedule 4.23 Material Contracts
Schedule 4.24 Affiliate Transactions
Schedule 6.5 Indebtedness
Schedule 6.6 Liens
Schedule 6.7 Guarantees
Schedule 6.12 Investments
Schedule 6.15 Additional Bank Accounts

EXHIBITS

Exhibit A Form of Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Notice of Continuation
Exhibit D Form of Notice of Conversion
Exhibit E Form of Extension Agreement
Exhibit F Form of Security Agreement
Exhibit G-1 Form of Acknowledgement Agreement (lessor)
Exhibit G-2 Form of Acknowledgement Agreement (Warehouseman)
Exhibit H Form of Lockbox Agreement
Exhibit I Form of Tripartite Agreement
Exhibit J Form of Officer's Certificate
Exhibit K Form of Compliance Certificate
Exhibit L Form of Solvency Certificate
Exhibit M-1 Form of Opinion of Borrower's Counsel
Exhibit M-2 Form of Opinion of Borrower's New York Counsel
Exhibit N Form of Borrowing Base Certificate
Exhibit O Form of Assignment and Assumption Agreement

(vi)
8
CREDIT AGREEMENT is dated as of June 9, 1995, among FLORIDA STEEL
CORPORATION, a Florida corporation (the "Borrower"), each of the financial
institutions identified as Lenders on Annex I (together with each of their
successors and assigns, each a "Lender" and collectively the "Lenders"), THE
BANK OF TOKYO, LTD., New York Agency, and NATIONSBANK OF FLORIDA, N.A., as
issuers of letters of credit hereunder (in such capacity the "Issuing Banks")
and as Co-Administrative Agents (in such capacity the "Co-Administrative
Agents"), and THE BANK OF TOKYO, LTD., New York Agency, acting in the manner and
to the extent described in Article 8 hereof, as Agent (in such capacity,
together with certain of its Affiliates as specified in Section 1.1 below, the
"Agent").

W I T N E S S E T H:

WHEREAS, the Borrower wishes to obtain a revolving credit facility (i) to
refinance and replace the BTCC - Credit Facilities (as defined below), (ii) to
provide financing for the Borrower's reimbursement obligations under Facility
Letters of Credit (as defined below) and (iii) for the Borrower's ongoing
working capital requirements and general corporate purposes;

WHEREAS, the Borrower wishes to obtain a letter of credit facility (i) to
refinance, replace or support the Existing Letters of Credit (as defined below)
and (ii) for the Borrower's ongoing letter of credit requirements; and

WHEREAS, upon the terms and subject to the conditions set forth herein, the
Lenders are willing to (i) make loans and advances to the Borrower and (ii)
purchase participations in letters of credit issued by the Issuing Banks for the
account of the Borrower, and each Issuing Bank is willing to issue letters of
credit for the account of the Borrower;

NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE 1. Definitions.

1.1 General Definitions. As used herein, the following terms shall have
the meanings herein specified (to be equally applicable to both the singular and
plural forms of the terms defined):
9
"Acceptance Date" shall have the meaning specified in Section 9.6(c).

"Accounts" shall mean all of the Borrower's accounts (as such term is
defined in the UCC), whether now existing or hereafter arising, including,
without limitation, all (i) accounts receivable (whether or not specifically
listed on schedules furnished to the Agent), including, without limitation, all
accounts created by or arising from the Borrower's sales of goods or rendition
of services made under any of the Borrower's trade names or styles; (ii) unpaid
seller's rights (including rescission, replevin, reclamation and stopping in
transit) relating to the foregoing or arising therefrom; (iii) rights to any
goods represented by any of the foregoing, including returned or repossessed
goods; (iv) reserves and credit balances held by the Borrower with respect to
any such accounts receivable or the account debtors thereon; and (v) guarantees
or collateral for any of the foregoing.

"Acknowledgement Agreements" shall mean any acknowledgement agreements, in
the form of Exhibit G-1, of lessors of real property on which Inventory is
located and the acknowledgment agreements, in the form of Exhibit G-2, of any
warehouseman or processor in possession of Inventory, in each case
acknowledging the Liens and security interests of the Agent on behalf of the
Lenders and the Issuing Banks and agreeing to provide the Agent access to such
Inventory for purposes of liquidation thereof or otherwise enforcing the Agent's
Lien thereon.

"Adjusted COF Rate" shall mean, for any COF Rate Loans for any Interest
Period, the rate per annum (rounded, if necessary, to the nearest 1/100 of 1%)
determined by the Agent to be the sum of (i) the COF Rate for such Interest
Period divided by one (1) minus the Reserve Requirements for such Loans for such
Interest Period plus (ii) the Assessment Rate for such Interest Period.

"Adjusted Consolidated Net Income" shall mean Consolidated Net Income
excluding gains and losses attributable to any asset disposition (other than
sales of Inventory in the ordinary course of business).

"Adjusted Credit Facility" shall mean, on any date, the lesser on such
date of (i) the Credit Facility or (ii) the Borrowing Base.

"Adjusted Eurodollar Rate" shall mean, with respect to each Interest Period
for any Eurodollar Rate Loan, the rate per annum (rounded upward, if necessary,
to

-2-
10
the nearest 1/100 of one percent) obtained by dividing (i) the Eurodollar
Rate for such Interest Period by (ii) a percentage equal to 1 minus the Reserve
Requirements for such Loans for such Interest Period.

"Adjustment Date" shall mean, with respect to any Rolling Period, in
connection with the adjustment of the Applicable Margin or Applicable Fee Rate,
the first day of the month that commences at least five (5) days after the
delivery to the Agent of the Financial Statements and compliance certificate for
such Rolling Period or for the fiscal quarter constituting the last quarter of
such Rolling Period.

"Adjustment Period" shall mean a period commencing on any Adjustment Date
and ending on the immediately following Adjustment Date.

"Agent" shall mean BOT or any successor thereto as Agent hereunder and, for
purposes of Sections 8.6 and 9.8 or any action required to be taken by the Agent
hereunder, shall include each of its Affiliates performing services on behalf of
the Agent hereunder.

"Affiliate" shall mean (i) any entity which directly or indirectly
controls, is controlled by, or is under common control with, the Borrower or
any Subsidiary (ii) and any Person who is a director or officer of the Borrower
or any Subsidiary. For purposes of this definition, "control" shall mean the
possession, directly or indirectly, of the power to (x) vote ten percent (10%)
or more of the securities having ordinary voting power for the election of
directors of such Person, (y) elect a majority of the board of directors of such
Person or (z) direct or cause the direction of management and policies of a
business, whether through the ownership of voting securities, by contract or
otherwise.

"Agent Account" shall mean an account of the Agent at its Payment Office,
identified by it to the Lenders and the Borrower, at which funds are to be made
available by the Lenders to the Agent for disbursement hereunder and, except as
provided herein, funds are made available by the Borrower for payment of its
obligation hereunder.

"Applicable Fee Rate" shall mean (a) for purposes of calculating the
Commitment Fee, one-half of one percent (0.5%), (b) for purposes of calculating
the LOC Utilization Fee, one and three-quarters percent (1.75%) and (c) for
purposes of calculating the LOC Fronting Fee, three-tenths of one percent
(0.3%); provided, however, that (i) if the

-3-
11
Debt/EBITDA Ratio for any Rolling Period is less than 5.30 to 1.00, then
the Applicable Fee Rate during the Adjustment Period immediately following such
Rolling Period shall mean (x) for purposes of calculating the Commitment Fee,
three-eighths of one percent (0.375%), (y) for purposes of calculating the LOC
Utilization Fee, one and one-half percent (1.5%) and (z) for purposes of
calculating the LOC Fronting Fee, one-quarter percent (0.25%) and (ii) if the
Debt/EBITDA Ratio for any Rolling Period is less than 3.30 to 1.00, then the
Applicable Fee Rate during the Adjustment Period immediately following such
Rolling Period shall mean (x) for purposes of calculating the Commitment Fee,
one-quarter of one percent (0.25%), (y) for purposes of calculating the LOC
Utilization Fee, one and one-quarter percent (1.25%) and (z) for purposes of
calculating the LOC Fronting Fee, two-tenths of one percent (0.2%); provided
further, however, that upon the occurrence of an Event of Default, and so long
as such Event of Default is continuing and is not waived by the Lenders, the
Applicable Fee Rate for purposes of calculating the LOC Utilization Fee shall
mean three and one-half percent (3.5%) and the Applicable Fee Rate for purposes
of calculating the LOC Fronting Fee shall mean one-half of one percent (0.5%).

"Applicable Lending Office" shall mean, with respect to each Lender, such
Lender's Eurodollar Lending Office in the case of Eurodollar Loans of such
Lender, and such Lender's Domestic Lending Office in the case of Base Rate
Loans, COF Rate Loans, FFR Loans and Overnight FFR Loans of such Lender.

"Applicable Margin" means (i) with respect to Base Rate Loans, zero percent
(0%), and (ii) with respect to Fixed Rate Loans one and three-quarters percent
(1.75%); provided, however, that if the Debt/EBITDA Ratio for any Rolling Period
is less than that set forth below, then the "Applicable Margin" during the
Adjustment Period immediately following such Rolling Period, for each Type of
Floating Rate Loan outstanding during such Adjustment Period and for each Type
of Fixed Rate Loan during each Interest Period applicable thereto commencing
during such Adjustment Period, shall be as set forth below for such Type of Loan
opposite such ratio:

Applicable Applicable
Margin for Margin for
Debt/ Base Rate Fixed Rate
EBITDA Ratio Loans Loans and Overnight FFR Loans
------------ ---------------- -----------------------------

5.30 to 1.00 zero percent (0%) one and one-half percent (1.5%)
3.30 to 1.00 zero percent (0%) one and one-quarter percent (1.25%)

-4-
12
provided, however, that if there shall occur and be continuing an Event of
Default which is not remedied within two (2) Business Days or waived by the
Lenders, then the "Applicable Margin" for each Type of Loan shall be equal to
two percent (2%) plus the Applicable Margin otherwise applicable to such Loan
immediately before the occurrence of such Event of Default, such increased
Applicable Margin to become effective as of the date such Event of Default first
occurs; provided further, that any amount of principal of and (to the extent
permitted by law) interest on any Loan that is not paid when due shall bear
interest at the rate set forth in Section 2.8.3.

"Assessment Rate" shall mean, for any Interest Period for any COF Rate
Loans, the average rate (rounded upwards, if necessary, to the nearest 1/100 of
1%) charged by the Federal Deposit Insurance Corporation (the "FDIC"), or any
successor thereto, for deposit insurance for time deposits at offices in the
United States of commercial banks on the first day of such Interest Period, as
reasonably determined by the Agent.

"Assignment and Assumption Agreement" shall mean an assignment and
assumption agreement, in the form of Exhibit O, entered into by an assigning
Lender and an assignee Lender, and accepted by the Agent, in accordance with
Section 9.6.

"Auditors" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., or another
nationally-recognized firm of independent public accountants selected by the
Borrower and reasonably satisfactory to the Agent.

"Availability" shall mean, on any date, the Adjusted Credit Facility on
such date minus the sum on such date of (i) the aggregate outstanding principal
amount of all Loans, plus (ii) the aggregate amount of outstanding Facility LOC
Obligations, plus (iii) the aggregate amount of outstanding Third Party LOC
Obligations.

"Bankruptcy Code" shall mean Title 11 of the United States Code, as in
effect from time to time, or any successor statute thereto.

"Base Rate" shall mean on any day the higher of (i) the rate which the
Agent announces from time to time as its prime rate, as in effect on such day,
or (ii) one-half of one percent (0.5%) plus the Overnight Federal Funds Rate for
such day. The prime rate is a reference rate and does not necessarily represent
the lowest or best rate actually charged to any customer. BOT may make
commercial loans or

-5-
13
other loans at rates of interest at, above or below the prime rate.

"Base Rate Borrowing" shall mean a Borrowing of Base Rate Loans.

"Base Rate Loan" shall mean a Loan that bears interest calculated on the
basis of the Base Rate.

"Benefit Plan" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan), and which is subject to Title
IV of ERISA, for which the Borrower, any Subsidiary or any ERISA Affiliate is,
or within the immediately preceding six (6) years was, an employer as defined in
Section 3(5) of ERISA.

"Borrower's Corporate Account" shall mean (i) Account No. ▇▇▇-▇▇▇-▇▇▇
established by the Borrower with BOT Trust Company and (ii) any similar account
established by the Borrower with the approval of the Agent.

"Borrowing" shall mean each borrowing hereunder from the Lenders and refers
to the amount of the Loans made by all the Lenders on the Borrowing Date for
such borrowing.

"Borrowing Base" shall mean the sum of (i) Eighty-five percent (85%) (the
"Receivables Advance Rate") of all Eligible Accounts Receivable, plus (ii)
sixty-five percent (65%) (the "Inventory Advance Rate") of all Eligible
Inventory; provided, however, that the Agent may at any time adjust the amount
of the Borrowing Base as provided in Section 2.15.2.

"Borrowing Base Certificate" shall have the meaning given to such term in
Section 5.1(f).

"Borrowing Date" shall mean each date on which a Borrowing occurs.

"BOT" shall mean The Bank of Tokyo, Ltd., New York Agency, and any
successor thereto by merger or consolidation.

"BOT Trust Company" shall mean The Bank of Tokyo Trust Company, a New York
state-chartered Bank.

"BTCC" shall mean BT Commercial Corporation.

"BTCC Credit Agreement" shall mean the Credit Agreement dated as of
December 21, 1992, among the

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14
Borrower, the lenders named therein, BTCC, as agent, and Bankers Trust Company,
as issuing bank.

"BTCC Credit Facilities" shall mean the loans made to the Borrower pursuant
to the BTCC Credit Agreement.

"Budget" shall mean, for any fiscal year, a projection of the expected
financial condition and results of operations of the Consolidated Entity for
such fiscal year (including, but not limited to, a projected consolidated
balance sheet, statement of operations, statement of cash flows and statement of
changes in stockholders equity, and including a detailed projection of proposed
Capital Expenditures) made as of the beginning of such fiscal year.

"Business Day" shall mean any day other than (i) a Saturday, Sunday or any
other day on which commercial banks in New York City or North Carolina are
authorized or required by law to close or (ii) when used with respect to
Eurodollar Loans or the Eurodollar Rate, any day on which commercial banks are
not open for dealing in U.S. Dollar deposits in the London, England interbank
market.

"Capital Expenditures" shall mean, for any period, the sum of all
expenditures of the Borrower and its Subsidiaries capitalized for financial
statement purposes in accordance with GAAP.

"Capitalized Lease Obligations" shall mean the aggregate rental obligations
under leases which, under GAAP, are required to be capitalized on the books of
the Borrower or a Subsidiary thereof, in each case taken at the amount thereof
accounted for as indebtedness (net of imputed interest expense) in accordance
with such principles; and "Capital Lease" means any lease under which there
arise Capitalized Lease Obligations.

"Cash Equivalents" shall mean (i) securities issued, guaranteed or insured
by the United States or any of its agencies with maturities of not more than
ninety (90) days from the date acquired; (ii) certificates of deposit with
maturities of not more than ninety (90) days from the date acquired issued by a
U.S. federal or state chartered commercial bank of recognized standing, which
has capital and unimpaired surplus in excess of $200,000,000 (or by a Federal or
state licensed U.S. branch or agency of a non-U.S. commercial bank of recognized
standing which has a shareholders' equity of not less than the equivalent of
$1,000,000,000) and which bank or its holding company (or branch or agency) has
a short-term commercial paper rating of at least A-2 or the equivalent by
Standard & Poor's Corporation or at least P-2 or the equivalent by Moody's

-7-
15
Investors Services, Inc.; (iii) reverse repurchase agreements with terms of
not more than seven days, for securities of the type described in (i) above and
entered into only with commercial banks (or U.S. branches or agencies thereof)
having the qualifications described in (ii) above; (iv) commercial paper or
finance company paper issued by any Person incorporated under the laws of the
United States or any state thereof and rated at least A-2 or the equivalent
thereof by Standard & Poor's Corporation or at least P-2 or the equivalent
thereof by ▇▇▇▇▇'▇ Investors Service, Inc., in each case with maturities of not
more than ninety (90) days from the date acquired, and (v) investments in money
market funds registered under the Investment Company Act of 1940, which have net
assets of at least $200,000,000 and at least eighty-five percent (85%) of whose
assets consist of securities and other obligations of the type described in
clauses (i) through (iv) above.

"Casualty Loss" shall have the meaning specified in Section 5.15.

"Closing" shall mean the making of the initial Loans by the Lenders
hereunder to the Borrower under this Credit Agreement.

"Closing Date" shall mean the date on which the Closing occurs.

"COF Rate" shall mean, for any Interest Period for COF Rate Loans, the
Agent's cost of funds (expressed as a rate per annum) on the first day of such
Interest Period, as determined by the Agent (and rounded upwards, if necessary,
to the nearest 1/100 of 1%), for funding the COF Rate Loans of the Agent (in its
capacity as Lender) to which such Interest Period relates.

"COF Rate Loan" shall mean a Loan that bears interest calculated on the
basis of the Adjusted COF Rate.

"Collateral" shall mean all of the Accounts and Inventory of the Borrower
as defined herein or in the Security Agreement and all proceeds thereof.

"Collateral Documents" shall mean the Security Agreement and the
Acknowledgement Agreements.

"Commitment" of any Lender shall mean with respect to each Initial Lender,
the amount set forth opposite such Lender's name on Annex I, as such annex may
be amended from time to time, under the heading "Commitment," or, in the case of
any Lender which is a party, as assignee or assignor, to one or more Assignment
and Assumption

-8-

16
Agreements, the amount set forth as such Lender's Commitment in the Register
maintained by the Agent pursuant to Section 9.6, as any such amount may be
reduced from time to time pursuant to the terms of this Credit Agreement.

"Commitment Letter" shall mean the letter agreement dated May 10, 1995
between BOT and the Borrower relating to the credit facility established hereby.

"Commitment Period" shall mean the period commencing on the Effective Date
and ending on the earlier of the Expiration Date or the termination of the
Credit Facility.

"Consolidated Entity" shall mean, collectively, the Borrower and its
Subsidiaries; provided that so long as the Borrower has no Subsidiaries,
"Consolidated Entity" shall mean the Borrower.

"Consolidated Net Income" shall mean the consolidated net income of the
Consolidated Entity reflected on the Financial Statements of the Consolidated
Entity for the specific period.

"Consolidated Net Worth" shall mean, as of any date, the Consolidated
Entity's shareholders' equity on such date, as reflected on the Financial
Statements of the Consolidated Entity as of such date.

"Continuation" shall have the meaning specified in Section 2.6.1.

"Convert," "Conversion" and "Converted" each shall refer to a conversion of
Loans of one Type into Loans of another Type pursuant to Section 2.6.1.

"Covered Taxes" shall have the meaning specified in Section 2.14.2(a).

"Credit Agreement" or "this Agreement" shall mean this Agreement, as the
same may be modified, amended, restated, or supplemented from time to time.

"Credit Date" shall mean any Borrowing Date or LOC Issue Date.

"Credit Documents" shall mean, collectively, this Credit Agreement, the
Notes, the Facility Letters of Credit, all Letter of Credit Applications, if
any, the Collateral Documents and all other documents, agreements, instruments,
opinions and certificates executed and delivered in connection herewith or
therewith, as the same

-9-
17
may be modified, amended, extended, restated or supplemented from time to time.

"Credit Event" shall mean each Borrowing or issuance of a Facility Letter
of Credit.

"Credit Facility" shall mean the credit facility established by the Lenders
for the Borrower hereunder for Loans and Facility Letters of Credit pursuant to
and in accordance with the terms of this Credit Agreement, in an amount up to
$150,000,000 (consisting of the aggregate amount of the Lenders' Commitments),
as such credit facility may be reduced from time to time in accordance with
Section 2.11.

"Credit Parties" shall mean, collectively, the Borrower and any other
parties (other than the Lenders, the Issuing Banks, the Agent or the
Co-Administrative Agents) to the Credit Documents (other than the
Acknowledgment Agreements).

"Current Assets" shall mean all assets of the Consolidated Entity
designated as current on a consolidated balance sheet of the Consolidated Entity
prepared in accordance with GAAP.

"Current Liabilities" shall mean all liabilities of the Consolidated Entity
designated as "current" on a consolidated balance sheet of the Consolidated
Entity prepared in accordance with GAAP and, for purposes of this Agreement,
shall not include the outstanding amount of the Loans.

"Debt/EBITDA Ratio" shall mean, with respect to any Rolling Period, the
ratio of (i) the average aggregate Indebtedness outstanding on the last day of
each month during such Rolling Period to (ii) EBITDA for such Rolling Period, as
reflected in the Financial Statements and Certificates delivered pursuant to
Section 5.1.

"Default" shall mean (i) an Event of Default and/or (ii) an event,
condition or default which with the giving of notice, the passage of time or
both would be an Event of Default.

"Defaulting Lender" shall mean any Lender who fails to fund any Loan
required to be made by it hereunder or any participation required to be
purchased or funded by it hereunder.

"Disbursement Account" shall mean (i) an account maintained by the Borrower
with BOT Trust Company for the

-10-
18
purpose of paying trade payables and other operating expenses and making other
disbursements and (ii) any other account established by the Borrower, with the
approval of the Agent, for such purpose.

"DOL" shall mean the United States Department of Labor and any successor
department or agency.

"Dollars" and the sign "$" shall mean United States dollars constituting
the lawful currency of the United States.

"Domestic Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its Domestic Lending Offices below its name
on Annex I, as such annex may be amended from time to time.

"EBITDA" shall mean, in any fiscal period, the Adjusted Consolidated Net

Income of the Consolidated Entity (other than extraordinary items of the
Consolidated Entity for such period), plus (i) to the extent deducted in
calculating Adjusted Consolidated Net Income for such period, the amount of all
Interest Expense, income tax expense, depreciation and amortization, including
amortization of any goodwill or other intangibles, of the Consolidated Entity
for such period, plus or minus (as the case may be) (ii) to the extent included
in determining Adjusted Consolidated Net Income for such period, any other
non-cash charges which have been subtracted or added, as the case may be, in
calculating Adjusted Consolidated Net Income for such period, all determined in
accordance with GAAP.

"EBITDA/Interest Expense Ratio" shall mean, for any Rolling Period, the
ratio of (i) the EBITDA of the Consolidated Entity for such Rolling Period to
(ii) the Interest Expense of the Consolidated Entity for such Rolling Period.

"Effective Date" shall have the meaning specified in Section 9.15.

"Eligible Accounts Receivable" shall mean the aggregate face amount of the
Borrower's Accounts that conform to the warranties and standards for eligibility
contained herein and in the Security Agreement, less the aggregate amount of all
returns, discounts, claims, credits, charges and allowances of any nature
(whether issued, owing, granted or outstanding), and less the aggregate amount
of all reserves, limits and deductions set forth below or as otherwise provided
in this Credit Agreement. Unless otherwise approved in writing by the

-11-
19
Required Lenders, no Account shall be deemed to be an Eligible Account
Receivable if:

(a) it arises out of a sale made by the Borrower to an Affiliate;
or

(b) the Account (other than Fabricating Accounts) is unpaid more
than 60 days after the original payment due date, with respect to
Accounts the invoice for which provides that payment is due in 30 days
or less from the date of such invoice; or

(c) the Account (other than Fabricating Accounts) is unpaid more
than 30 days after the original payment due date, with respect to
Accounts the invoice for which provides that payment is due more than
30 days from the date of such invoice; provided, that in no event
shall such Accounts constitute an Eligible Accounts Receivable if
unpaid more than 120 days from the original invoice date; provided
further, that the aggregate amount of all such invoices providing for
payment more than 30 days from the date of the invoice that may
constitute Eligible Accounts Receivable shall not exceed $5,000,000 at
any one time; or

(d) it is a Fabricating Account (i) that is unpaid more than 120
days from the original invoice date related thereto or (ii) the
invoice for which provides for payment more than 60 days from the date
of such invoice; or

(e) Fifty percent (50%) or more, in face amount, of all Accounts
from the account debtor on such Account (or any affiliate thereof) are
ineligible pursuant to (b), (c) or (d) above; or

(f) the Account, when aggregated with all other Accounts having
the same account debtor as the account debtor on such Account (or an
affiliate of such account debtor), exceeds fifty percent (50%) in face
value of all Accounts of the Borrower then outstanding, but such
Account shall be excluded pursuant to this clause (f) only to the
extent of such excess; provided, however, that Accounts supported or
secured by letters of credit shall be excluded for purposes of the
calculation under this clause (f); or

(g) (i) the account debtor on such Account is also a creditor of
the Borrower, but such Account shall be excluded pursuant to this
clause (g) only to the extent of the amount owed by the Borrower to
such

-12-

20
account debtor; provided that such Account shall not be excluded
pursuant to this clause (g) if the aggregate amount owed by the
Borrower to all such account debtors is less than $500,000 or such
account debtor has executed a no-offset letter in form and substance
acceptable to the Agent, (ii) the account debtor has disputed its
liability on, or the account debtor has made any claim with respect
to, such Account or any other Account due from such account debtor to
the Borrower, which has not been resolved, but such Account shall be
excluded pursuant to this clause (g)(ii) only to the extent of the
amount of such dispute or claim, or (iii) the Account otherwise is or
may become subject to any right of setoff by the account debtor, but
such Account shall be excluded pursuant to this clause (g)(iii) to
the extent of the amount of such setoff; or

(h) a voluntary or involuntary case under the Bankruptcy Code
has been commenced by or against the account debtor on such account,
or an order for relief has been entered with respect to such account
debtor under the Bankruptcy Code, or such account debtor has made an
assignment for the benefit of creditors, or any other similar petition
or other application for relief under any other state, federal or
foreign laws has been filed by or against the account debtor, or if
the account debtor has filed a certificate of dissolution under
applicable state law or has been liquidated, dissolved or wound-up, or
has authorized or commenced any action or proceeding for dissolution,
winding-up or liquidation, or if the account debtor has failed,
suspended business, declared itself to be insolvent, or a receiver,
trustee, liquidator or custodian has been appointed for it or for all
or a significant portion of its assets or affairs, unless (A) the
payment of Accounts from such account debtor is secured in a manner
satisfactory to the Agent or (B) if the Account from such account
debtor arises subsequent to the commencement of a case with respect to
such account debtor under the Bankruptcy Code, the Agent shall have
determined that the timely payment and collection of such Account will
not be impaired; or

(i) the Account arises from sales to account debtors outside the
continental United States, to the extent that the aggregate amount of
outstanding invoices for such sales exceeds $5,000,000 at any one
time, except for sales (A) on guaranty or acceptance terms, in each
case determined by the Agent in its sole discretion to be acceptable,
(B) supported by a

-13-

21
letter of credit acceptable to the Agent issued by a commercial bank
located in the United States or a U.S. branch or agency of a foreign
bank, in each case acceptable to the Agent or (C) otherwise approved
by and acceptable to the Agent; or

(j) the sale to the account debtor on such Account is on a
▇▇▇▇-and-hold, guaranteed sale, sale-and-return, sale on approval or
consignment basis or made pursuant to any other written agreement
providing for repurchase or return; or

(k) the Agent determines in its commercially reasonable judgment
that collection of such Account is uncertain or that such Account may
not be paid by reason of the account debtor's financial inability to
pay; or

(l) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the Borrower
duly assigns its rights to payment of such Account to the Agent
pursuant to the Assignment of Claims Act of 1940, as amended; or

(m) the goods giving rise to such Account have not been shipped
and delivered to and accepted by the account debtor or the services
giving rise to such Account have not been performed by the Borrower
and accepted by the account debtor or the Account otherwise does not
represent a final sale; or

(n) the Account does not comply with all applicable legal
requirements, including, where applicable, the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of
the Board of Governors of the Federal Reserve System, as then in
effect; or

(o) the Account (or the account debtor's indebtedness
thereunder) is evidenced by a promissory note or other negotiable
instrument or is secured by a letter of credit (unless such promissory
note, negotiable instrument or letter of credit is pledged and
delivered to the Agent); or

(p) the Agent, on behalf of itself, the Lenders and the Issuing
Banks, does not have a valid and perfected first priority security
interest in such Account.

"Eligible Inventory" shall mean:

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22
(a) the gross amount of the Borrower's Inventory, valued at the lower of
cost (on a FIFO basis) or market, which:

(i) is owned solely by the Borrower and with respect to which the
Borrower has good, valid and marketable title;

(ii) is stored on property that is either (A) owned or leased by
the Borrower or (B) owned or leased by a warehouseman that has
contracted with the Borrower to store Inventory on such warehouseman's
property (provided that, with respect to Inventory stored on property
leased by the Borrower or owned or leased by a warehouseman, the
Borrower shall have delivered in favor of the Agent an Acknowledgment
Agreement executed by the lessor of such property or such
warehouseman, as the case may be),

(iii) is subject to a valid, enforceable and perfected first
priority Lien in favor of Agent on behalf of itself the Lenders and
the Issuing Banks except, with respect to Eligible Inventory stored at
sites described in clause (ii)(B) above, for Liens for normal and
customary warehouseman charges;

(iv) is located in the United States; and

(v) is not obsolete or slow moving, and otherwise conforms to the
warranties and standards for eligibility contained herein;

minus (b) the aggregate amount of:

(i) any goods returned or rejected by the Borrower's customers
that are determined by the Borrower or by the Agent to be unsalable in
the ordinary course of business;

(ii) goods in transit to third parties (other than to the
Borrower's agents or warehousemen that comply with clause (a)(ii)(3)
above);

(iii) manufacturing supplies and spare parts Inventory;

(iv) any reserves required by the Agent pursuant to Section
2.15.2; and

(v) the amount of any Inventory that the Agent determines to be
ineligible pursuant to Section 2.15.2.

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23
In addition to the foregoing, Eligible Inventory shall include such items of
Inventory as the Required Lenders, at the request of the Borrower, may (but
shall not be required to) in their sole discretion approve in advance in
writing.

"Environmental Law" shall mean any Federal, state, local or foreign
statute, law, rule, regulation, ordinance, order, writ, judgment, injunction,
decree, determination or award, permit, concession, franchise license, agreement
or governmental restriction relating to the environment or to the release of any
substances or materials into the environment, including, without limitation, the
Clean Air Act, as amended, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, the Hazardous Materials
Transportation Act, as amended, the Resource Conservation and Recovery Act, as
amended, the Toxic Substances Control Act, the Federal Water Pollution Control
Act, as amended, the Safe Drinking Water Act, and the Oil Pollution Act.

"Environmental Letter" shall mean the letter dated April 28, 1995, together
with the Attachments thereto, from Ardman & Associates, Inc. to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
& Co.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute thereto and all final or
temporary regulations promulgated thereunder and published, generally applicable
rulings entitled to precedential effect.

"ERISA Affiliate" shall mean any entity required at any relevant time to be
aggregated with the Borrower or any Subsidiary under Sections 414(b), (c), (m)
or (o) of the IRC.

"Eurodollar Lending Office" shall mean, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" below its
name on Annex I, as such annex may be amended from time to time (or, if no such
office is specified, its Domestic Lending Office), or such other office or
affiliate of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.

"Eurodollar Loan" shall mean a Loan that bears interest calculated on the
basis of the Adjusted Eurodollar Rate.

"Eurodollar Rate" shall mean, with respect to each Interest Period for
each Eurodollar Loan comprising the same Tranche, the interest rate per annum
which appears

-16-

24
on the Reuters Screen LIBO Page as the rate at which The Bank of Tokyo, Ltd.
(London Office), or any successor thereto, will offer Dollar deposits of
immediately available funds to first-class banks in the London interbank market
(in amounts comparable to the Eurodollar Loan of BOT in such Tranche and for a
period equal to such Interest Period) at 11:00 a.m. London time on the day
which is two Business Days preceding the first day of such Interest Period;
provided, however, that if the Eurodollar Rate, as defined herein, cannot be
determined by referring to the Reuters Screen LIBO Page, then "Eurodollar Rate"
shall mean the rate of interest per annum determined by the Agent to be the
average (rounded upward to the nearest 1/10 of one percent) of quotations which
leading banks in the City of New York selected by the Agent are quoting in the
New York interbank market on the day which is two Business Days preceding the
first day of such Interest Period for Dollar deposits of immediately available
funds in amounts comparable to the principal amount of the Eurodollar Loan of
BOT in such Tranche, for a period equal to the term such Interest Period.

"Event(s) of Default" shall have the meaning provided for such term in
Article 7 of this Credit Agreement. An Event of Default shall be "continuing"
until such Event of Default has been waived in accordance with Section 9.10.

"Existing Debenture Indenture" shall mean the Indenture for the Borrower's
Existing Subordinated Debentures, dated as of November 15, 1988, from the
Borrower to Southeast Bank, N.A., as Trustee.

"Existing Letters of Credit" shall mean the outstanding letters of credit
issued under the BTCC Credit Agreement in support of certain obligations of the
Borrower.

"Existing Subordinated Debentures" shall mean the Subordinated Debentures
due 2000 issued by the Borrower pursuant to the Existing Debenture Indenture.

"Expenses" shall mean all present and future expenses incurred by or on
behalf of the Agent or the Lockbox Bank in connection with this Credit Agreement
or otherwise, whether incurred heretofore or hereafter, which expenses shall
include, without being limited to, the cost of record searches, reasonable
counsel fees (including the allocated cost of internal counsel), all costs and
expenses incurred by the Agent and the Lockbox Bank in opening bank accounts,
depositing checks, receiving and transferring funds, and any charges imposed on
the Agent or the Lockbox

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25
Bank due to insufficient funds of deposited checks and the Lockbox Bank's
standard fee relating thereto, Collateral examination fees and expenses, fees
and expenses of accountants, appraisers or other experts or advisors retained by
the Agent or the Lockbox Bank, fees and expenses incurred by the Agent in
connection with the assignments of or sales of participations in the Loans and
Commitments, fees and taxes relative to the filing of UCC financing statements
and all expenses, costs and fees set forth in Article 2 of this Credit Agreement
and all other fees and expenses required to be paid pursuant to the Fee Letter
or the Commitment Letter.

"Expiration Date" shall have the meaning specified in Section 2.11.1.

"Fabricating Accounts" shall mean Accounts owing to the Borrower and
arising from the activity of the Borrower's "Reinforcing Steel Fabricating
Group."

"Facility Letter of Credit" shall mean each letter of credit issued
pursuant to Section 2.7 by an Issuing Bank for the account of the Borrower and
all amendments, renewals, extensions or replacements thereof.

"Facility LOC Obligations" shall mean, at any time, the sum of (i) the
maximum aggregate undrawn amount of all Letters of Credit outstanding at such
time, plus (ii) the aggregate amount of all Unpaid LOC Reimbursement
Obligations, plus (iii) without duplication, the aggregate amount of all
payments made by each Lender to the Issuing Bank with respect to such Lender's
participation in Facility Letters of Credit issued by each Issuing Bank, as
provided in Section 2.7.3(d), for which the Borrower has not at such time
reimbursed the Lenders, whether with the proceeds of a Borrowing hereunder or
otherwise.

"Fee Letter" shall mean the letter agreement dated May 10, 1995 between the
Borrower and BOT.

"Fees" shall mean, collectively, the Participation Fees, the Commitment
Fees, the LOC Utilization Fees, the LOC Fronting Fee and the other fees provided
for herein or in the Fee Letter.

"Financial Statements" shall mean the balance sheets, statements of
operations, statements of cash flows and statements of changes in shareholder's
equity of the Consolidated Entity for the period specified, prepared in
accordance with GAAP. If the Borrower shall have any subsidiaries, such
financial statements shall be prepared

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on a consolidated and, if so requested by the Agent, consolidating basis.

"First Mortgage Indenture" shall mean the Indenture with respect to the
First Mortgage Notes, dated as of December 15, 1992, between the Borrower and
Shawmut Bank Connecticut, National Association (formerly called The Connecticut
National Bank), as trustee, as amended, supplemented or otherwise modified from
time to time in accordance with Section 6.17.

"First Mortgage Notes" shall mean the Borrower's 11 1/2% First Mortgage
Notes due 2000, issued pursuant to the First Mortgage Notes Indenture, as
amended, supplemented or otherwise modified from time to time in accordance with
Section 6.17.

"Fixed Rate Base" shall mean (i) in the case of Eurodollar Loans, the
Adjusted Eurodollar Rate, (ii) in the case of COF Rate Loans, the Adjusted COF
Rate and (iii) in the case of FFR Loans, the Term Federal Funds Rate.

"Fixed Rate Borrowing" shall mean a Borrowing of Fixed Rate Loans,

"Fixed Rate Loan" shall mean a Eurodollar Loan, a COF Rate Loan or an FFR
Loan; and "Fixed Rate Loans" means Eurodollar Loans, COF Rate Loans and FFR
Loans.

"FFR Loan" shall mean a Loan that bears interest calculated on the basis of
the Term Federal Funds Rate.

"Floating Rate Borrowing" shall mean a borrowing of Floating Rate Loan.

"Floating Rate Loan" shall mean a Base Rate Loan or an Overnight FFR Loan.

"FLS" shall mean FLS Holdings Inc., a Delaware corporation.

"FLS Intercompany Note" shall mean the demand unsecured note from the
Borrower to FLS in the original principal amount of $17,641,567.92.

"Forecast" shall mean a projection of the expected financial condition and
results of operations of the Consolidated Entity (including, but not limited to,
a projected consolidated balance sheet, statement of operations, statement of
cash flows and statement of changes in stockholders, equity, including a
projection of proposed Capital Expenditures) made as of the beginning of the
third fiscal

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quarter of the Borrower for the succeeding twelve month period.

"Foreign Lender" shall mean any Lender organized under the laws of a
jurisdiction outside of the United States.

"Form 10-K" and "Form 10-Q" shall mean, respectively, a report on
Form 10-K or Form 10-Q filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended, and the regulations
thereunder.

"Funded Debt" shall mean Indebtedness maturing more than twelve months
after the issuance or incurrence thereof, but shall not include the Loans or
other Obligations hereunder.

"GAAP" shall mean generally accepted accounting principles in the United
States as in effect from time to time.

"Hazardous Substances" shall mean (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contained dielectric fluid containing levels of poly-chlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.

"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the Obligations owing under this Credit Agreement, under
the laws of the State of New York (or the law of any other jurisdiction whose
laws may be mandatorily applicable notwithstanding other provisions of this
Credit Agreement and the other Credit Documents), or under applicable federal
laws which may presently or hereafter be in effect and which allow a higher
maximum interest rate than under New York (or such other jurisdiction's) law, in
any case after taking into account, to the extent permitted by applicable law,
any and

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all relevant payments or charges under this Credit Agreement and any other
Credit Documents executed in connection herewith, and any available exemptions,
exceptions and exclusions.

"Indebtedness" shall mean any indebtedness of the Borrower or any
Subsidiary, whether or not contingent, in respect of (i) borrowed money or
evidenced by bonds, notes (including, but not limited to, the Notes), debentures
or similar instruments, (ii) without duplication, letters of credit (or
reimbursement agreements in respect thereof) including Facility Letters of
Credit and Third Party Letters of Credit, (iii) the deferred and unpaid balance
of the purchase price of any property, (iv) Capital Leases, if and to the extent
any such indebtedness would appear as a liability upon a consolidated balance
sheet, (v) obligations of the Borrower or any Subsidiary under Interest Rate
Agreements and (vi) any of the foregoing obligations of any Person secured by a
Lien on assets of the Borrower or any Subsidiary. Such terms shall also
include, to the extent not otherwise included, the guaranty by the Borrower or
any Subsidiary of any items specified in clause (i) through (vi) above, but
shall not include any trade payables incurred in the ordinary course of
business.

"Industrial Development Bonds" shall mean the industrial development or
pollution control revenue refunding bonds in the aggregate principal amount of
$10,875,000 issued by certain political subdivisions pursuant to four separate
Trust Indentures, dated November 1, 1988 and December 1, 1988.

"Initial Lender" shall mean each Lender named on the signature pages of
this Credit Agreement as in effect on the Effective Date.

"Interest Expense" shall mean the aggregate consolidated interest expense
of the Consolidated Entity in respect of Indebtedness determined on a
consolidated basis in accordance with GAAP, including, without limitation, (i)
amortization of original issue discount on any Indebtedness and of all fees
payable in connection with the incurrence of such Indebtedness (to the extent
included in interest expense in accordance with GAAP), (ii) the interest portion
of any deferred payment obligation, (iii) the interest component of any Capital
Lease Obligations and (iv) any payments made by the Borrower or any Subsidiary
pursuant to any Interest Rate Agreement (or minus any payment received by the
Borrower or any Subsidiary under an Interest Rate Agreement).

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29
"Interest Period" shall mean (i) in the case of each Eurodollar Loan, each
period commencing on the day such Eurodollar Loan is made or on which a Floating
Rate Loan, COF Rate Loan or an FFR Loan is converted into such Eurodollar Loan
or the last day of the immediately preceding Interest Period for such Eurodollar
Loan and ending on the corresponding day one, two, three or six months
thereafter (or such other period as shall be agreed to by the Lenders, (ii) in
the case of each COF Rate Loan, each period commencing on the day such COF Rate
Loan is made or on which a Floating Rate Loan, a Eurodollar Loan or an FFR Loan
is converted into such COF Rate Loan or the last day of the immediately
preceding interest period for such COF Rate Loan and ending on the day 30, 60,
or 90 days thereafter and (iii) in the case of each FFR Loan, each period
commencing on the day such FFR Loan is made, or on which a Floating Rate Loan, a
Eurodollar Loan or a COF Rate Loan is converted into such FFR Loan, and ending
one, two, three or four weeks thereafter or one, two or three months thereafter,
in each case as specified in the notice given pursuant to Section 2.4.1 (in the
case of the initial Interest Period for a Fixed Rate Loan) or as specified in a
Notice of Continuation or Notice of Conversion given before the commencement of
each subsequent Interest period for such Fixed Rate Loan. If the Borrower fails
to specify the duration of an Interest Period as aforesaid, the Borrower shall
be deemed to have selected an Interest Period of one month (in the case of a
Eurodollar Loan) or 30 days (in the case of a COF Rate Loan) or one week (in the
case of an FFR Loan). In selecting Interest Periods for Fixed Rate Loans, the
Borrower shall insure that Fixed Rate Loans of the same Type aggregating
$3,500,000 or less shall have common Interest Periods. Notwithstanding the
foregoing:

(1) each Interest Period which would otherwise end on a day which
is not a Business Day shall end on the next succeeding Business Day
(or, in the case of an Interest Period for Eurodollar Loans, if such
next succeeding Business Day falls in the next succeeding calendar
month, on the immediately preceding Business Day for a Eurodollar
Loan);

(2) if any Interest Period for a Eurodollar Loan commences on the
last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the appropriate subsequent
calendar month), such Interest Period shall end on the last Business
Day of the appropriate subsequent calendar month;

(3) no more than ten (10) Interest Periods shall be in effect at
the same time for all Types of Loans,

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and all Loans of the same Type made on the same Borrowing Date and
having the same Interest Period shall be treated as a single
Borrowing; and

(4) no Interest Period shall extend beyond the Expiration Date.

Interest on each Fixed Rate Loan shall accrue during each Interest Period
applicable thereto from (and including) the first day of such Interest Period
to (but excluding) the last day of such Interest Period.

"Interest Rate Agreement" shall mean any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement under which the
Borrower is a party or beneficiary.

"Internal Revenue Code" or "IRC" shall mean the Internal Revenue Code of
1986, as amended from time to time, and any successor statute thereto and all
final or temporary rules and regulations promulgated thereunder and published,
generally applicable rulings entitled to precedential effect to the extent such
rules, regulations or rulings are effective and applicable hereto.

"Internal Revenue Service" or "IRS" shall mean the United States Internal
Revenue Service and any successor agency.

"Inventory" shall mean all of the Borrower's inventory, including, without
limitation: (i) all raw materials, work-in process, parts, components,
assemblies, supplies and materials used or consumed in the Borrower's business;
(ii) all goods, wares and merchandise, finished or unfinished, held for sale or
lease; and (iii) all goods returned or repossessed by the Borrower.

"Inventory Advance Rate" shall have the meaning specified for such term in
the definition of the term "Borrowing Base."

"Investment" shall mean, with respect to any specified Person, (a) the
purchase or acquisition by such specified Person of any share of capital stock,
evidence of indebtedness or other security issued by any other Person; (b) any
acquisition by such specified Person of another Person by a merger with such
other Person (other than a merger by a wholly-owned Subsidiary with another
wholly-owned Subsidiary or with the Borrower), (c) any loan, advance, or
extension of credit by such specified Person to, or contribution by such
specified Person to the capital

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of, any other Person, (d) any purchase by such specified Person of all or any
integral part of the business of any other Person or assets comprising such
business or part thereof, (e) any other investment by such specified Person and
(f) any binding obligation or option by such specified Person to do any of the
foregoing if, in the case of an option, the consideration paid or payable for
such option exceeds $100,000; provided, however, that the term "Investment"
shall not include (i) current trade and customer accounts receivable for
services rendered in the ordinary course of business and payable in accordance
with customary trade terms, (ii) advances to employees for travel expenses,
drawing accounts and similar expenditures, (iii) Capital Expenditures or (iv)
stock or other securities acquired by such specified Person in connection with
the satisfaction or enforcement of debts or claims due or owing to such
specified Person or as security for any such debts or claims, provided that
such debts or claims arose in the ordinary course of business and were not
created for the purpose or with a view to the acquisition of such stock or
other securities.

"Issuing Bank" shall mean BOT or NationsBank, in its capacity as issuer of
Facility Letters of Credit hereunder.

"Issuing Office" shall mean, with respect to each Issuing Bank, the branch
or office from which a Facility Letter of Credit of such Issuing Bank has been
or is being issued.

"Kyoei" shall mean Kyoei Steel Ltd., a corporation organized under the laws
of Japan and the sole stockholder of FLS.

"Lender" shall mean each financial institution listed on Annex I hereto,
and each Person that becomes a Lender pursuant to an Assignment and Assumption
Agreement accepted by the Agent. The term "Lender" shall include the Swingline
Lender and each Issuing Bank.

"Letter of Credit Application" shall have the meaning specified in Section
2.7.1.

"Lien" shall mean, with respect to any Person, (i) any lien, mortgage,
pledge, encumbrance, charge, or conditional sale or other title retention
agreement (including, without limitation, the rights of a lessor under a Capital
Lease to the property leased thereunder) or other security interest of any kind
upon any property or assets of any character of such Person, whether now owned
or hereafter acquired by such Person, or upon the income or

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profits therefrom, (ii) any arrangement or agreement that would prohibit such
Person from creating any liens, mortgages, pledges, encumbrances, charges or
other security interests in favor of the Lenders, (iii) any indebtedness of
such Person outstanding for more than 30 days which if unpaid would by law or
upon bankruptcy or insolvency, or otherwise, be given any priority over general
creditors of such Person and (iv) any sale, assignment, pledge or other
transfer by such Person of its accounts receivable, contract rights, general
intangibles or chattel paper, with or without recourse.

"Loan" shall mean a loan of any Type made by any Lender to or for the
account of the Borrower hereunder and refers to a Swingline Loan, a Revolving
Loan or a Refunding Loan.

"Loan Account" shall have the meaning given to such term in Section 2.12.2.

"LOC Availability" shall mean the lesser of (a) the LOC Facility minus the
outstanding Facility LOC Obligations or (b) the Availability.

"LOC Cash Collateral Account" shall have the meaning specified in Section
2.7.8.

"LOC Facility" shall have the meaning specified in Section 2.3(a).

"LOC Fronting Fee" shall have the meaning specified in Section 2.9.3(b).

"LOC Issue Date" shall mean any date on which a Facility Letter of Credit
is issued.

"LOC Participation" shall mean with respect to each Lender, the amount of
its participation in outstanding Facility LOC Obligations.

"LOC Reimbursement Obligation" shall have the meaning specified in Section
2.7.3.

"LOC Request" shall have the meaning specified in Section 2.7.1.

"LOC Utilization Fee" shall have the meaning specified in Section 2.9.3(a).

"Lockbox Account" shall have the meaning given to such term in Section
2.15.1.

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"Lockbox Agreements" shall have the meaning given to such term in Section
2.15.1.

"Lockbox Bank" shall mean NationsBank, N.A. (Carolinas) and any other bank
selected by the Borrower and approved by the Agent.

"Lockboxes" shall have the meaning given to such term in Section 2.15.1.

"Majority Lenders" shall mean (a) at any time when no Loans or Facility LOC
Obligations are outstanding, banks whose Commitments constitute in the aggregate
at least fifty-one percent (51%) of the Credit Facility and (b) at any time when
any Loans or Facility LOC Obligations are outstanding, Lenders owed or holding,
directly or by means of a participation acquired pursuant hereto, in the
aggregate at least fifty-one percent (51%) of the sum of (i) the aggregate
outstanding principal amount of all Loans and (ii) the aggregate amount of all
outstanding Facility LOC Obligations.

"Material Adverse Effect" shall mean a material adverse effect on (i) the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Borrower or of the Borrower and its
Subsidiaries taken as a whole, (ii) the value of Collateral or the amount which
the Agent and the Lenders would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of the Collateral, (iii) the Borrower's or any Subsidiary's ability to perform
its obligations under the Credit Documents to which it is a party, or (iv) the
rights and remedies of the Agent, the Issuing Banks or the Lenders hereunder or
under any other Credit Document.

"Material Contract" shall mean any contract or other arrangement (other
than any of the Credit Documents), whether written or oral, to which the
Borrower or any Subsidiary is a party and under which the maximum amount which
may be required to be paid by or to the Borrower or such Subsidiary exceeds
$1,000,000.

"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) to which the Borrower, any Subsidiary or any
ERISA Affiliate is, or within the immediately preceding six (6) years was,
contributing or (ii) with respect to which the Borrower or any Subsidiary may
incur any liability.

"NationsBank" shall mean NationsBank of Florida.

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34
"Note" shall mean a promissory note of the Borrower payable to the order
of any Lender, in the form of Exhibit A, evidencing the aggregate indebtedness
of the Borrower to such Lender resulting from the Loans made by such Lender or
acquired by such Lender from another Lender pursuant to Section 9.6.

"Notice of Borrowing" shall have the meaning given to such term in Section
2.4.1.

"Notice of Continuation" shall have the meaning given to such term in
Section 2.6.1.

"Notice of Conversion" shall have the meaning given to such term in Section
2.6.1.

"Obligations" shall mean the unpaid principal of and interest on (including
interest accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower or any Subsidiary, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans, any
reimbursement obligation or indemnity of the Borrower on account of Facility
Letters of Credit or any accommodation extended with respect to applications for
Facility Letters of Credit, including all Unpaid LOC Reimbursement Obligations,
and all other obligations and liabilities of the Borrower or any Subsidiary to
the Agent, the Issuing Banks or the Lenders, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with this Credit
Agreement, the Notes, the Facility Letters of Credit, any other Credit Document
and any other document made, delivered or given in connection herewith or
therewith, and each other obligation and liability, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, whether on account of principal, interest, fees, indemnities, costs
or expenses (including, without limitation, all fees and disbursements of
counsel to the Agent, the Issuing Bank or the Lenders), of the Borrower or any
Subsidiary to the Lenders, the Agent or the Issuing Banks pursuant to the terms
of this Credit Agreement or any of the other Credit Documents.

"Other Taxes" shall have the meaning given to such term in Section
2.14.2(b).

"Outstanding Credit" shall mean at any time (i) the aggregate principal
amount of all Loans then outstanding plus (ii) the aggregate amount of all then
outstanding

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35
Facility LOC Obligations minus (iii) the amount on deposit in the LOC Cash
Collateral Account.

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

"Overnight FFR Loans" shall mean Loans that bear interest calculated on
the basis of the Overnight Federal Funds Rate.

"Payment Office" shall mean the office of the Agent located at 1251 Avenue
of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ or such other office of the Agent
as it may specify from time to time by a notice in writing to the Lenders and
the Borrower.

"PBGC" shall mean the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.

"Permitted Discretion" shall mean the Agent's judgment exercised in good
faith based upon its consideration of any factor which the Agent believes in
good faith could affect the value of any Inventory or Accounts or the amount
which the Agent and the Lenders would be likely to receive (after giving
consideration to delays in payment and costs of enforcement) in the liquidation
of such Inventory and Accounts. In exercising such judgment, the Agent may
consider such factors which are already included in or relevant to the
definition of Eligible Accounts Receivable or Eligible Inventory, as well as any
of the following: (i) the financial and business climate of the Borrower's (and
any Subsidiary's, as applicable) industries and general macroeconomic
conditions, (ii) changes in collection history and dilution with respect to the
Accounts, (iii) changes in demand for, and pricing of, Inventory, (iv) changes
in any concentration of risk with respect to Accounts and Inventory, and (v) any
other factors that change the credit risk of lending to the Borrower on the
security of the Accounts and Inventory.

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"Permitted Liens" shall mean liens specified in clause (a) through (n) of
Section 6.6.

"Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (including any division, agency or
department thereof), and, as applicable, the successors, heirs and assigns of
each.

"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by the Borrower or any
Subsidiary, or with respect to which the Borrower or any Subsidiary may incur
liability, including, but not limited to, any Benefit Plan.

"Proportionate Share" shall mean, with respect to any Lender on any day, a
fraction (expressed as a percentage), the numerator of which shall be the amount
of such Lender's Commitment on such day and the denominator of which shall be
the total Commitments of all the Lenders.

"Receivables Advance Rate" shall have the meaning specified for such term
in the definition of the term "Borrowing Base."

"Reduced Rate" shall have the meaning specified in Section 2.14.2(e).

"Refinancing" shall mean the refinancing and replacement pursuant to this
Credit Agreement of the BTCC Credit Facilities, including the refinancing or
replacement or support of the Existing Letters of Credit.

"Refunding Loan" shall mean a Revolving Loan the proceeds of which are used
solely to repay outstanding Swingline Loans or Unpaid LOC Reimbursement
Obligations and accrued interest thereon. Refunding Loans shall be remitted by
each Lender directly to the Agent for the account of the Swingline Bank or the
relevant Issuing Bank, as the case may be, and the Borrower shall have no right
to direct the application of proceeds of Refunding Loans for any other purpose.

"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (12 CFR, Part 204), as from time to time in effect and
any successor thereto.

"Reportable Event" shall mean any of the events described in Section 4043
of ERISA and the regulations thereunder, other than such events with respect to
which

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the 30-day notice requirement has been expressly waived under such
regulations.

"Required Lenders" shall mean (a) at any time when no Loans or Facility LOC
Obligations are outstanding, Lenders whose Commitments constitute in the
aggregate at least fifty-one percent (51%) of the Credit Facility and (b) at any
time while Loans or Facility LOC Obligations are outstanding, Lenders owed or
holding, directly or by means of participation acquired pursuant thereto, in the
aggregate of at least fifty-one percent (51%) of the sum of (i) the aggregate
outstanding principal amount of all Loans and (ii) the aggregate amount of all
outstanding Facility LOC Obligations; provided that Required Lenders must
include both BOT and NationsBank.

"Reserve Requirements" shall mean with respect to any Eurodollar Loans or
COF Rate Loans for any Interest Period therefor, the stated maximum rate (stated
as a decimal) at which reserves (including any marginal, supplemental or
emergency reserves) are required to be maintained on the first day of such
Interest Period under Regulation D (a) in the case of Eurodollar Loans, by
member banks of the Federal Reserve system in New York City with deposits in
excess of five billion dollars against "eurocurrency liabilities" (as such term
is defined in Regulation D) or (b) in the case of COF Rate Loans, by member
banks of the Federal Reserve System against non-personal time deposits in an
amount of $100,000 or more having maturities corresponding to such Interest
Period. Without limiting the foregoing, Reserve Requirement with respect to any
such Loan shall include any other reserves required to be maintained by such
member banks against (i) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate or the COF Rate (as the case may be) for
such Loan is to be determined as provided in the definition thereof or (ii) any
category of extensions of credit or other assets which include Eurodollar Loans
or COF Rate Loans (as the case may be).

"Restricted Expenditures", "Restricted Expenditures Allowance" and
"Restricted Expenditures Basket" shall have the meanings specified in Section
6.4.

"Retiree Health Plan" shall mean an "employee welfare benefit plan" within
the meaning of Section 3(i) of ERISA that provides benefits to persons after
termination of employment, other than as required by Section 601 of ERISA.

"Rolling Period" shall mean any period of four consecutive fiscal quarters
of the Consolidated Entity.

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"Sale/Leaseback Transaction" shall mean any arrangement or series of
arrangements providing for the leasing by the Borrower or any subsidiary from
any Person for a period (including any renewal periods) of more than one year of
real or personal property (i) which has been or is to be sold or transferred by
the Borrower or any Subsidiary to such Person or any Affiliate thereof or with
respect to which funds have been or are to be advanced by another Person on the
security of such property or rental obligations of the Borrower or any
Subsidiary, or (ii) which has been or is to be acquired from another Person by
such Person, or on which one or more buildings have been or are to be
constructed by such Person, for the purpose of leasing such property to the
Borrower or any Subsidiary.

"Security Agreement" shall mean the Security Agreement, of even date
herewith, between the Agent and the Borrower, in the form attached as Exhibit F.

"Standby Letter of Credit" shall mean any Facility Letter of Credit other
than a Trade Letter of Credit.

"Subordinated BOT Note" shall mean the Subordinated Note due March 28, 1996
in the original principal amount of $10,000,000 issued by the Borrower to BOT.

"Subordinated Intercompany Note" shall mean the Junior Subordinated Note
due December 21, 2002 in the original principal amount of $50,000,000 issued by
the Borrower to FLS.

"Subordinated Notes" shall mean the FLS Intercompany Note, the Subordinated
Intercompany Note and the Subordinated BOT Note.

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

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"Swingline Availability" shall mean, as of any date, the least on such date
of (i) the Unused Swingline Commitment, (ii) the Unused Commitment of the
Swingline Lender or (iii) the Availability.

"Swingline Commitment" shall have the meaning specified in Section 2.2. The
Swingline Commitment shall be a subcommitment of the Commitment of BOT.

"Swingline Lender" shall mean BOT, with respect to Swingline Loans made or
to be made by it pursuant to Section 2.5.

"Swingline Loan" shall mean a Loan made by the Swingline Lender pursuant to
Section 2.5.

"Swingline Loan Amount" shall have the meaning specified in Section 2.5(d).

"Swingline Participation" shall have the meaning specified in Section
2.5(e).

"Swingline Settlement Date" shall have the meaning specified in Section
2.5(d).

"Swingline Settlement Notice" shall have the meaning specified in Section
2.5(e).

"Tax Transferee" shall have the meaning given to such term in Section
2.14.2(a).

"Taxes" shall have the meaning given to such term in Section 2.14.2(a).

"Technical Assistance Agreements" shall mean technical assistance
agreements, whether oral or written, that may exist from time to time between
the Borrower and Kyoei.

"Term Federal Funds Rate" shall mean, for any Interest Period for FFR
Loans, the average of the rates per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Agent to be the average of the bid rates
quoted to the Agent at approximately 10:00 a.m. (or as soon thereafter as
practicable) on the first day of such Interest Period by at least two federal
funds dealers of recognized national standing selected by the Agent for the sale
to the Agent of federal funds having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the FFR Loans of the
Agent (in the capacity as Lender) to which such Interest Period relates.

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"Termination Event" shall mean: (a) a Reportable Event with respect to
any Benefit Plan or Multiemployer Plan; (b) the withdrawal of the Borrower, any
Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a) (2)
of ERISA; (c) the providing of notice of intent to terminate a Benefit Plan in a
distress termination described in Section 4041(c) of ERISA; (d) the institution
by the PBGC of proceedings to terminate a Benefit Plan or Multiemployer Plan;
(e) any event or condition that is reasonably likely to (i) constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Benefit Plan or Multiemployer Plan, or (ii) result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (f)
the partial or complete withdrawal within the meaning of Sections 4203 and 4205
of ERISA, of the Borrower, any Subsidiary or any ERISA Affiliate from a
Multiemployer Plan.

"Third Party Letter of Credit" shall have the meaning specified in Section
2.7.7.

"Third Party LOC Obligations" shall mean, at any time, the sum of (i) the
maximum aggregate amount of all Third Party Letters of Credit then outstanding
plus (ii) the aggregate amount of all unreimbursed drawings under Third Party
Letters of Credit.

"Trade Letter Of Credit" shall mean any Facility Letter of Credit in
support of obligations incurred by the Borrower or any of its Subsidiaries in
the ordinary course of business for the purchase of goods or services.

"Tranche" shall mean Loans of the same Type and having a common Interest
Period.

"Tripartite Agreement" shall have the meaning specified in Section
2.15.1(c).

"Type" shall mean, with respect to any Loan, the character of such Loan as
a Eurodollar Rate Loan, a Base Rate Loan, COF Rate Loan or an FFR Loan.

"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial Code.
Unless otherwise specified, all references herein or in any other Credit
Document to the UCC shall be to the Uniform Commercial Code as in effect in the
State of New York.

"Unfunded Current Liabilities" of any Benefit Plan shall mean the amount,
if any, by which the present

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value of the accrued benefits under such Benefit Plan as of the close of its
most recent plan year exceeds the fair market value of the assets allocable
thereto, determined in accordance with Section 412 of the IRC.

"Unpaid LOC Reimbursement Obligations" shall mean the amount of drawings
under Facility Letters of Credit for which the Issuing Bank thereof has not been
reimbursed, whether with the proceeds of a Borrowing hereunder or otherwise.

"Unused Commitment" shall mean as to each Lender on any date of
determination thereof, such Lender's Commitment in effect on such date minus the
sum of (i) the aggregate principal amount of such Lender's Loans outstanding on
such date and (ii) the amount of such Lender's Proportionate Share of Facility
LOC Obligations outstanding on such date.

"Unused Credit Facility" shall mean, on any date, the amount of the Credit
Facility on such date minus the sum of (i) the aggregate outstanding principal
amount of all Loans and (ii) the outstanding Facility LOC Obligations.

"Unused Swingline Commitment" shall mean the Swingline Commitment minus
the aggregate outstanding principal amount of all Swingline Loans.

Section 1.2 Construction. (a) As used herein, words of the neuter gender
mean and include correlative words of the masculine and feminine gender. Unless
otherwise specified herein, all references to time of day contained in this
Credit Agreement are to New York City time. References herein to "written" or
"in writing" shall include communications or notices by means of facsimile
transmission, telex or cable. Terms not otherwise defined herein which are
defined in the UCC shall have the meanings given them in the UCC.

(b) All references in this Credit Agreement to Articles, Sections, Annexes,
Schedules and Exhibits are to Articles, Sections, Schedules and Exhibits in or
to this Credit Agreement unless otherwise specified. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Credit
Agreement shall refer to this Credit Agreement as a whole and not to any
particular provision of this Agreement. All Annexes, Schedules and Exhibits
hereto shall be deemed to be a part of this Credit Agreement.

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42
(c) The descriptive headings of the several Articles, Sections and
paragraphs of this Credit Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Credit Agreement.

1.3 Accounting Terms and Determinations. Unless otherwise defined or
specified herein, all accounting terms shall be construed in accordance with
GAAP applied on a basis consistent in all material respects with the GAAP used
in the preparation of the Financial Statements referred to in Section 4.6. All
accounting calculations to determine the Debt/EBITDA Ratio or compliance with
Sections 6.1, 6.2, 6.3 and Section 6.4 shall be made in accordance with GAAP
applied on a basis consistent in all material respects with the GAAP used in the
preparation of the Financial Statements referred to in Section 4.6. The
Financial Statements required to be delivered hereunder from and after the
Closing Date and all financial records at the Borrower shall be maintained in
accordance with GAAP applied on a basis consistent with the GAAP used in the
preparation of the Financial Statements referred to in Section 4.6 (the
"Historical GAAP"), except for any changes concurred in by the Auditors;
provided that if GAAP shall change from the Historical GAAP, the certificates
required to be delivered pursuant to Section 5.1 shall include calculations
setting forth the adjustments necessary to calculate the Debt/EBITDA Ratio in
accordance with Historical GAAP and to demonstrate whether the Borrower is in
compliance with the financial covenants based upon the Historical GAAP.

ARTICLE 2. The Credit Facility.

2.1 Revolving Loans. Upon the terms and subject to the conditions
hereinafter set forth, each Lender severally agrees to make loans (each a
"Revolving Loan") to or for the account of the Borrower from time to time on any
Business Day during the Commitment Period, in an aggregate principal amount not
exceeding, at any one time outstanding, such Lender's Commitment; provided that
no Lender shall be required to make a Revolving Loan (i) in excess of its
Proportionate Share of all Revolving Loans being made on the same day or (ii) if
after giving effect thereto and to any Facility Letters of Credit issued
concurrently therewith, the aggregate outstanding principal amount of all
Revolving Loans made by such Lender plus its outstanding LOC Participation would
exceed such Lender's Commitment or (iii) if after giving effect thereto, to all
other Loans being made concurrently therewith and all Letters of Credit being
issued concurrently therewith, the sum of (x) the

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aggregate outstanding principal amount of all Loans plus (y) the outstanding
amount of all Facility LOC Obligations plus (z) the outstanding amount of all
Third Party LOC Obligations would exceed the Adjusted Credit Facility. Within
the limits of the Credit Facility and each Lender's Commitment, and subject to
the limits referred to above, the Borrower may borrow under this Section 2.1,
prepay pursuant to Section 2.13 and reborrow under this Section 2.1. All
Revolving Loans shall be denominated in Dollars.

2.2 Swingline Loans. Subject to the terms and conditions of this Credit
Agreement, the Swingline Lender agrees to make loans (each a "Swingline Loan")
to or for the account of the Borrower from time to time on any Business Day
during the Commitment Period in an aggregate principal amount not exceeding, at
any one time outstanding, $10,000,000 (the "Swingline Commitment"); provided,
however, that the Swingline Lender shall not be required to make a Swingline
Loan if, after giving effect thereto, (i) the aggregate outstanding principal
amount of all Loans (Revolving Loans and Swingline Loans) of the Swingline
Lender plus the amount of its LOC Participation would exceed the Commitment of
the Swingline Lender or (ii) the sum of (x) the aggregate outstanding principal
amount of the Loans of all Lenders (including the Swingline Lender) plus (y) the
outstanding Facility LOC Obligations plus (z) the outstanding Third Party LOC
Obligations would exceed the Adjusted Credit Facility. Within the limit of the
Swingline Lender's Swingline Commitment, and subject to the limits referred to
above, the Borrower may borrow under this Section 2.2, prepay pursuant to
Sections 2.5(c) and 2.13 and reborrow under this Section 2.2. All Swingline
Loans shall be Floating Rate Loans and shall be denominated in Dollars. The
Swingline Commitment shall be a subcommitment of the Commitment of the Swingline
Lender.

2.3 Facility Letters of Credit. (a) Subject to the terms and conditions
of this Credit Agreement, each Issuing Bank severally agrees to issue letters of
credit ("Facility Letters of Credit") in Dollars for the account of the Borrower
from time to time on any Business Day from the Closing Date until the earlier of
(i) 15 days before the Expiration Date or (ii) the termination of the Credit
Facility in an aggregate amount not exceeding, for both Issuing Banks,
$50,000,000 (the "LOC Facility") at any one time outstanding; provided, however,
that no Facility Letter of Credit shall be issued if (x) the amount of such
proposed Letter of Credit, when added to the amount of all other Facility
Letters of Credit to be issued concurrently therewith, exceeds the amount of the
Availability or (y) the amount of such proposed Facility Letter of Credit, when
added to the amount of all other Facility Letters of Credit

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to be issued on such Date and the Facility LOC Obligations then outstanding,
exceeds the lesser of the LOC Facility or the amount of the Adjusted Credit
Facility then in effect. Each Lender shall acquire a participation in each
Facility Letter of Credit as provided in Section 2.7.2.

(b) Facility Letters of Credit shall be in a form customarily used by the
Issuing Bank thereof or in such other form as has been approved by such Issuing
Bank. No Facility Letter of Credit shall have an expiration date (including all
rights of renewal) later than the earlier of (i) thirteen (13) months (or, in
the case of Trade Letters of Credit, 120 days) from the issuance thereof or (ii)
five (5) days before the Expiration Date.

(c) Within the limits of the LOC Facility, and subject to the limits
referred to above, the Borrower may request the issuance of Facility Letters of
Credit under this Section 2.3, repay any LOC Reimbursement Obligations resulting
from drawings thereunder pursuant to Section 2.7.3 and request the issuance of
additional Facility Letters of Credit under this Section 2.3.

2.4 Borrowing Mechanics (Revolving Loans).

2.4.1 Notice of Borrowing. (a) Each Revolving Borrowing (other than a
Refunding Borrowing) shall be made on notice, given by the Borrower to the Agent
not later than (i) 11:00 a.m. on the date of any proposed Base Rate Borrowing
and (ii) not later than 2:00 p.m. three Business Days prior to the proposed
Borrowing, in the case of a Fixed Rate Borrowing. The Agent shall give to each
Lender prompt notice, by telex, telecopier or cable, of each requested Borrowing
of Revolving Loans. Except in the case of Refunding Loans, each Base Rate
Borrowing shall be in the amount of $2,000,000 or any integral multiple of
$500,000 in excess thereof and each Tranche of Loans in a Fixed Rate Borrowing
shall be in the amount of $2,000,000 or an integral multiple of $500,000 in
excess thereof.

(b) Each notice of a Borrowing shall be made by telephone and promptly
confirmed in writing by telecopier, telex or cable, in substantially the form of
Exhibit B hereto (a "Notice of Borrowing"), specifying therein (i) the proposed
date of such Borrowing (which shall be a Business Day), (ii) amount of such
Borrowing (which shall not be in excess of the Availability on the proposed
Borrowing Date), (iii) the Type(s) of Loans to be made on such Borrowing Date
and the aggregate amount of each Tranche of Loans comprising such Borrowing and
(iv) in the case of a Fixed Rate Borrowing the initial Interest Period to be
applicable to each such Type of Loans comprising such

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Borrowing. If the Borrower fails to specify the Types of Loans requested, it
shall be deemed to request Base Rate Loans, and if it fails to specify an
Interest Period for any type of requested Fixed Rate Loans it shall be deemed
to request the shortest available Interest Period for such Type of Fixed Rate
Loans. Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of (i) any failure by the Borrower
to borrow the requested Loans on the Borrowing Date specified in the Notice of
Borrowing therefor or (ii) any failure to fulfill, on or before the date
specified in such Notice of Borrowing, the applicable conditions set forth in
Article 3 including, without limitation, any loss (excluding loss of
anticipated profits), cost or expense incurred by reason of the liquidation or
redemption of deposits or other funds acquired by such Lender to fund its
ratable portion of such Borrowing when such Borrowing, as a result of such
failure, is not made on such date.

(c) The Borrower shall notify the Agent in writing of the names of its
officers and employees authorized to request Loans on behalf of the Borrower and
shall provide the Agent with a specimen signature of each such officer or
employee. The Agent shall be entitled to rely conclusively on such officer's or
employee's authority to request Loans on behalf of the Borrower until the Agent
receives written notice to the contrary.

(d) Notwithstanding the obligation of the Borrower to send written
confirmation of a Notice of Borrowing made by telephone if and when requested by
the Agent, in the event that the Agent agrees to accept a notice made by
telephone, such telephonic notice of Borrowing shall be binding on the Borrower
whether or not written confirmation is sent by the Borrower or requested by the
Agent. The Agent may act prior to the receipt of any requested written
confirmation, without any liability whatsoever, based upon telephonic notice
believed by the Agent, in good faith, to be from the Borrower or its agents. The
Agent's records of the terms of any telephonic Notices of Borrowing shall be
conclusive on the Borrower and the Lenders in the absence of gross negligence or
willful misconduct on the part of the Agent in connection therewith.

2.4.2 Funding of Revolving Loans. (a) Each Lender shall, before 3:00 p.m.
on the Borrowing Date of each Borrowing, make available to the Agent at the
Agent Account, in immediately available funds, for the account of such Lender's
applicable Lending Office, such Lender's

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Proportionate Share of such Borrowing. After the Agent's receipt of such funds
and the Agent's good faith determination that the conditions set forth in
Article III with respect to such Borrowing have been fulfilled, the Agent will
make such funds available to the Borrower on the Borrowing Date by crediting
the amount thereof, in immediately available funds, to the Borrower's Corporate
Account or as otherwise directed by the Borrower.

(b) Unless the Agent shall have received notice from a Lender prior to the
date of any Borrowing that such Lender will not make available to the Agent such
Lender's Proportionate Share of such Borrowing, the Agent may assume that such
Lender has made such Proportionate Share available to the Agent on the Borrowing
Date of such Borrowing in accordance with this Section 2.4.2, and the Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have made
such Proportionate Share available to the Agent, such Lender and the Borrower
severally agree to pay or repay to the Agent, forthwith on demand, such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is paid
or repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable at the time to Loans comprising such Borrowing and (ii) in the case
of such Lender, an interest rate per annum equal to the sum of one percent (1%)
plus the Overnight Federal Funds Rate. If such Lender shall pay to the Agent
such corresponding amount, such amount so paid shall constitute such Lender's
Loan as part of such Borrowing for purposes of this Agreement.

2.5 Borrowing Mechanics and Certain Other Provisions Regarding Swingline
Loans. (a) Whenever the Borrower wishes to borrow under the Swingline
Commitment it shall give the Swingline Lender (with a copy to the Agent), no
later than 3:00 p.m. of the proposed Borrowing Date, notice thereof (a
"Swingline Borrowing Notice"), specifying (i) the proposed Borrowing Date (which
shall be a Business Day), (ii) the amount thereof (which shall be at least
$100,000 or a multiple of $10,000 in excess thereof but in no event more than
the Swingline Availability on the proposed Borrowing Date), and (iii) the Type
of such Swingline Loan. If the Swingline Lender determines that the conditions
specified in Sections 3.3 and 3.4 have been satisfied, the Swingline Lender
shall make the requested Swingline Loan no later than 5:00 p.m. of the Borrowing
Date specified in the Swingline Borrowing Notice by depositing the proceeds
thereof in the Disbursement Account maintained by the Borrower at BOT Trust
Company unless

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47
otherwise directed by the Borrower in the Swingline Borrowing Notice. In
connection with any Swingline Loan made by it, the Swingline Lender may rely on
the authority of the officers and employees of the Borrower referred to in
Section 2.4.1(c) and on telephonic notices received by the Swingline Lender to
the same extent as the Agent may rely thereon pursuant to paragraphs (c) and
(d) of Section 2.4.1.

(b) The Swingline Lender shall cease making (and shall be relieved of its
obligations to make) Swingline Loans if it receives notice in writing from a
Lender at least one Business Day prior to the proposed Borrowing Date for a
Swingline Loan that a Default exists hereunder; provided that the Swingline
Lender may resume making Swingline Loans if receive notice in writing from the
Agent that such Default has been waived by the Lenders or cured in accordance
herewith.

(c) The Borrower may prepay Swingline Loans on any Business Day, upon
notice to the Swingline Lender (with a copy to the Agent) given no later than
3:00 p.m. on the proposed prepayment date. Each partial prepayment of Swingline
Loans shall be in the aggregate amount of $100,000 or any integral multiples of
$10,000 in excess thereof. All payment of Swingline Loans shall be made to the
Swingline Lender through the Agent as provided in Section 2.13.

(d) Upon demand by the Swingline Lender, but in any event upon the
occurrence of any Event of Default, the Borrower shall repay the principal
amount of all Swingline Loans then outstanding and accrued and unpaid interest
thereon. (Each day on which Swingline Loans are required to be repaid is herein
called a "Swingline Settlement Date.") The Borrower may make such repayment with
the proceeds of Loans from the Lenders. If the Borrower shall fail to request
Revolving Loans for any Swingline Settlement Date in an aggregate amount at
least equal to all Swingline Loans outstanding on such date and all interest
accrued and unpaid thereon to such date (the "Swingline Loan Amount") or if the
conditions for making such Revolving Loans on such date are not satisfied, then
the Borrower shall be irrevocably deemed to have requested a Refunding Loan from
each Lender on such Swingline Settlement Date in an amount equal to such
Lender's Proportionate Share of the Swingline Loan Amount outstanding on such
date.

(e) If for any reason the Borrower fails to repay in full on any Swingline
Settlement Date the Swingline Loan Amount outstanding on such Swingline

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48
Settlement Date, then each Lender shall, upon notice thereof (the "Swingline
Settlement Notice") from the Swingline Lender (through the Agent), specifying
the principal amount of Swingline Loan Amount outstanding on such Swingline
Settlement Date, deposit in the Agent Account, for the account of the Swingline
Lender, no later than 4:00 p.m. of the day on which the Swingline Settlement
Notice is delivered (or the following Business Day if such notice is delivered
after 3:00 p.m.), immediately available funds in an amount equal to (i) such
Lender's Proportionate Share on such Swingline Settlement Date multiplied by
(ii) the Swingline Loan Amount on such Swingline Settlement Date, and the Agent
shall thereupon promptly remit such funds to the Swingline Lender. Such
deposit by a Lender shall constitute a Loan by such Lender to the Borrower in
an amount of such deposit; provided, however, that if such Lender is then
prohibited by applicable law from making, or if the Borrower is then prohibited
from incurring, such Loan, then such deposit by such Lender shall constitute
the purchase by such Lender, without recourse to or any representation or
warranty by, the Swingline Bank, for a purchase price equal to the amount of
such deposit, of a participation and undivided interest (a "Swingline
Participation") equal to such Lender's Proportionate Share on such Swingline
Settlement Date in the Swingline Loans Amount then outstanding. The obligation
of each Lender to make funds available to the Swingline Lender, as aforesaid, on
each Swingline Settlement Date in respect of the Swingline Loan Amount
outstanding on such date shall not be subject to the conditions or requirements
set forth in Article III and shall be unconditional and irrevocable under any
and all circumstances including, without limitation, (i) the existence of an
Event of Default hereunder (including an Event of Default specified in clause
(g) of Section 7.1) or (ii) the termination of the Credit Facility.
Any Lender acquiring a participation in a Swingline Loan as aforesaid shall
have, for all purposes hereof, all rights of a direct holder of such Loan to
the extent of such participation.

(f) If a Lender fails to make the payment required to be made by it
pursuant to Section 2.5(d) with respect to any Swingline Loans on the due date
of such payment, it shall pay to the Swingline Lender interest, for each day
that such default continues, on the unpaid amount at a rate per annum equal to
(i) the sum of one percent (1%) plus the Overnight Federal Funds Rate, for each
of the first three days following such default and (ii) the Base Rate
thereafter.

(g) All interest accruing on Swingline Loans prior to refunding thereof
with a Refunding Loan or the

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49
funding of a participation therein as required by Section 2.5(d) shall be for
the account of the Swingline Lender.

2.6 Certain Provisions Regarding Fixed Rate Loans.

2.6.1 Notice of Continuation and Notice of Conversion. (a) Subject to the
provisions of Section 2.6.2, if the Borrower wishes any Tranche of Fixed Rate
Loans of a particular Type to continue to be maintained hereunder as such
Tranche following the expiration of the then current Interest Period therefor,
the Borrower shall, not later than 2:00 p.m. of the third Business Day
immediately preceding the expiration of the such Interest Period, select, and
notify the Agent of, the new Interest Period for such Tranche, which new
Interest Period shall commence on the last day of the preceding Interest Period.
Each such selection of a new Interest Period is herein called a "Continuation"
and the notice to the Agent of a Continuation is herein called a "Notice of
Continuation"). Each Notice of Continuation shall be by telephone or telecopy
(confirmed immediately in writing if by telephone) in substantially the form of
Exhibit C, specifying (i) the applicable Fixed Rate Loans, and (ii) the duration
of the selected Interest Period and the date on which such Interest Period is to
commence, all of which shall be specified in such manner as is necessary to
comply with all conditions and limitations set forth in the definition of the
term "Interest Period". If the Borrower shall fail to select a new Interest
Period for any Tranche of Fixed Rate Loans in accordance with this Section
2.6.1(a), then on the last day of the then current Interest Period therefor all
Fixed Rate Loans in such Tranche will automatically Convert into Base Rate
Loans. Each Continuation with respect to a Tranche shall apply to all Fixed Rate
Loans in such Tranche other than those being converted into Loans of another
Type pursuant to Section 2.6.1(b).

(b) The Borrower may on any Business Day, upon notice (each such notice, a
"Notice of Conversion") given to the Agent, and subject to the provisions of
Section 2.6.2, Convert the entire amount or a portion of all Loans of one Type
comprising the same Tranche into Loans of another Type; provided, however, that
any Conversion of any Fixed Rate Loans of any Type into Loans of another Type
shall be made on, and only on, the last day of an Interest Period therefor. Each
such Notice of Conversion shall be given not later than 2:00 p.m. on the
Business Day prior to the date of any proposed Conversion of Fixed Rate Loans
into Base Rate Loans and on the third Business Day prior to the date of any
proposed Conversion of Loans of any Type into Fixed Rate Loans of another type.
Subject to the

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restrictions specified above, each Notice of Conversion shall be substantially
the form of Exhibit D and shall be given by telephone or telecopy (confirmed
immediately in writing if by telephone) and shall specify (i) the requested
date of such Conversion, (ii) the Type of Loans to be Converted, (iii) the
portion of such Type of Loan to be Converted, (iv) the Type of Loans into which
such Loans are to be Converted into and (v) if such Conversion is into Fixed
Rate Loans, the duration of the Interest Period therefor. Each Tranche
resulting from a Conversion shall be in an amount of not less than $2,000,000
or an integral multiple of $500,000 in excess thereof. Conversion of Base Rate
Loans into Loans of another type shall be made ratably with respect to the
outstanding Base Rate Loans of each Lender and Conversion of Fixed Rate Loans
of a particular Tranche shall be made ratably with respect to the outstanding
Loans of each Lender comprising such Tranche.

(c) Each Notice of Continuation and Notice of Conversion shall be
irrevocable and binding on the Borrower. In the case of any Borrowing,
Continuation or Conversion that the related Notice of Borrowing, Notice of
Continuation or Notice of Conversion specifies is to be comprised of Fixed Rate
Loans, the Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill, on or
before the date for such Borrowing, Continuation or Conversion specified in such
Notice of Borrowing, Notice of continuation or Notice of Conversion, the
applicable conditions set forth in Article III, including, without limitation,
any loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund the Fixed Rate Loans to be made or maintained by such Lender
as part of such Borrowing, Continuation or Conversion.

2.6.2 Suspension of Fixed Rate Option. Notwithstanding anything contained
in Section 2.6.1 above to the contrary:

(a) No Notice of Continuation or Notice of Conversion may be
given at any time when a Default exists hereunder, and the Borrower's
right to borrow or maintain Loans as Fixed Rate Loans shall be
suspended while such Default exists and is not waived.

(b) If the Agent is unable to determine the Fixed Rate Base for
a particular Type of a Fixed Rate Loan comprising any requested
Borrowing, Continuation or Conversion, the right of the Borrower to
select or maintain Fixed Rate Loans of such Type for such Bor-

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rowing or any subsequent Borrowing shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exists, and each Loan comprising such Borrowing shall be a
Loan of a Type that is unaffected by such circumstances, as selected by the
Borrower pursuant to this Credit Agreement.

(c) If the Majority Lenders shall, at least one Business Day before the
date of any requested Borrowing of Fixed Rate Loans or a requested Continuation
of or Conversion into Fixed Rate Loans, notify the Agent that Fixed Rate Base
for such Fixed Rate Loans will not adequately reflect the cost to such Lenders
of making or funding such Fixed Rate Loans, the right of the Borrower to select
such Fixed Rate Loans for such, or any subsequent, Borrowing, Conversion or
Continuation shall be suspended until the Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer exist, and
each Loan comprising such Borrowing, Conversion or Continuation shall be a Loan
of a Type that is unaffected by such circumstances, as selected by the Borrower
pursuant to this Credit Agreement.

(d) If any Lender shall determine that the introduction of or any change
in or in the interpretation of any law or regulation shall make it unlawful, or
any central bank or other governmental authority shall assert that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Loans or to continue to fund or
maintain Eurodollar Loans hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrower through the Agent, (i) each such
Eurodollar Loan will automatically, upon such demand, Convert into a Base Rate
Loan and (ii) the obligation of the Lenders to make, or to convert Loans into,
Eurodollar Loans shall be suspended until the Agent shall notify the Borrower
that such Lender has determined that the circumstances causing such suspension
no longer exist. Before giving any such notice and demand to the Agent pursuant
to this Section 2.6.2, such Lender shall designate a different Eurodollar
Lending Office if such designation would avoid the need for giving such notice
and demand and would not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.

2.6.3 Breakage Costs. If any payment of principal of, or Conversion or
Continuation of, any Fixed Rate Loan is made other than on the last day of the

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Interest Period for such Loan as a result of a payment, prepayment (whether
mandatory or optional) or Conversion of such Loan or upon the acceleration of
the maturity of any of the Obligations pursuant to Article 7 or for any other
reason, the Borrower shall, upon demand by any Lender (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment, including,
without limitation, any loss (excluding loss of anticipated profits), cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Loan.

2.7 Inssuance Mechanics and Other Provisions Regarding Facility Letters of
Credit.

2.7.1 Requests for Issuance. Each Facility Letter of Credit shall be
issued or amended upon notice given at least three (3) Business Days' prior to
the proposed issuance date (or such shorter period as may be agreed to by the
proposed Issuing Bank) in accordance herewith and with the terms of any
separate agreement, instrument or other document, if any, between the Borrower
and the proposed Issuing Bank thereof providing for the issuance or amendment
of such Facility Letter of Credit pursuant to this Agreement and containing
terms and conditions not inconsistent with this Agreement (a "Letter of Credit
Application"), provided that if any such terms and conditions are inconsistent
with this Agreement, this Agreement shall control. Each such request for the
issuance of a Facility Letter of Credit (an "LOC Request") shall be given in
writing, specifying (i) the requested date of such issuance (which shall be a
Business Day), (ii) the amount of such Facility Letter of Credit (which shall
not be less than $5,000 but not more than the LOC Availability), (iii) the
expiration date of such Facility Letter of Credit, (iv) the name and address of
the beneficiary of such Facility Letter of Credit, (v) the terms of such
Facility Letter of Credit (including a precise description of the documents and
the text of any certificate to be delivered by the beneficiary of such Facility
Letter of Credit in connection with a drawing thereunder and (vi) such other
information as shall be required pursuant to the relevant Letter of Credit
Application. Concurrently with its delivery of an LOC Request to an Issuing
Bank, the Borrower shall deliver a copy thereof, by facsimile transmission,
telex or cable, to the Agent who shall thereupon notify each Lender of such LOC
Request and the terms thereof. Subject to the terms of this Agreement, if the
requested terms and conditions of such Facility Letter of Credit are reasonably
acceptable to

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the proposed Issuing Bank, such Issuing Bank will, upon fulfillment of the
applicable conditions set forth in Section 3.2, make such Facility Letter of
Credit available to the Borrower at the Issuing Office of such Issuing Bank or
as otherwise agreed with the Borrower in connection with such issuance;
provided that such Issuing Bank shall not issue, and shall be relieved of its
obligation to issue, the requested Facility Letter of Credit if it receives, at
least one Business Day prior to the proposed issuance date, a notice in writing
from any Lender (with a copy to the Agent) stating that the circumstances
specified in Section 3.2(a) exist with respect to such Lender.

2.7.2 Participation by Lenders. Immediately upon the issuance of each
Facility Letter of Credit, the Issuing Bank thereof shall be deemed to have
sold and transferred to each Lender, and each Lender shall be deemed to have
purchased and received from the such Issuing Bank, in each case irrevocably and
unconditionally, without any further action by any party and without recourse
to or any representation or warranty by such Issuing Bank, an undivided
interest and participation equal to such Lender's Proportionate Share on such
LOC Issue Date in any such Facility Letter of Credit, each drawing thereunder
and the obligations of the Borrower under this Credit Agreement in respect
thereof (including all LOC Reimbursement Obligations in respect thereof but
excluding (i) all LOC Fronting Fees payable to such Issuing Bank with respect
to such Facility Letter of Credit and (ii) all amounts paid to such Issuing
Bank pursuant to Section 2.9.3(d)) and all security therefor and guaranties
thereof; provided, however, if a Lender notifies the Issuing Bank and the Agent
in writing, at least one Business Day prior to the issuance of a Facility
Letter of Credit, of the existence of any circumstance described in Section
3.2(a) with respect to such Lender, then such Lender shall not be obligated to
purchase any participating interest in such Facility Letter of Credit.

2.7.3 LOC Drawings and Reimbursements. (a) The Borrower shall be obligated
to reimburse each Issuing Bank for each amount that such Issuing Bank pays in
respect of any drawing under any Facility Letter of Credit (each such
obligation of the Borrower to reimburse an Issuing Bank in respect of a drawing
under a Facility Letter of Credit herein called an "LOC Reimbursement
Obligation"). Each LOC Reimbursement Obligation owing with respect to any
payment by an Issuing Bank under any Facility Letter of Credit which is not
paid on the date such payment is made by the Issuing Bank (an "Unpaid LOC
Reimbursement Obligation") shall bear interest, from the date such payment is
made and until such Unpaid LOC Reimbursement Obligation is paid

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in full (either with the proceeds of a Borrowing hereunder or otherwise), at an
interest rate per annum equal to the Base Rate plus the Applicable Margin for
Base Rate Loans. All payments to an Issuing Bank of LOC Reimbursement
Obligations shall be accompanied by interest accrued thereon.

(b) In the event of any drawing under any Facility Letter of Credit, the
Issuing Bank shall notify the Agent, which shall notify the Borrower of such
drawing, prior to the time on which the Issuing Bank intends to honor such
drawing. The Borrower shall give notice to the Agent and the Issuing Bank on
such Business Day if it intends to reimburse the Issuing Bank for the amount of
such drawing with funds other than the proceeds of Loans. Such notice from the
Borrower shall be irrevocable and, if given, the Borrower shall reimburse the
Issuing Bank not later than the close of business (New York City time) on the
day on which such drawing is honored in an amount in same day funds equal to
the amount of such drawing. If the Agent shall not have timely received such
notice, (i) the Borrower shall be deemed to have given a Notice of Borrowing to
the Agent requesting a Base Rate Refunding Borrowing on the date on which such
drawing is to be honored in an amount equal to the amount of such drawing, and
the Lenders shall, on the date of such drawing (or the next Business day if the
notice is not given on a timely basis for Loans to be made on the date of the
drawing), make Base Rate Refunding Loans in the amount of such drawing (plus
accrued interest thereon if such Refunding Loan is made on a date following the
date such drawing is honored by the Issuing Bank), the proceeds of which shall
be applied directly by the Agent to reimburse the Issuing Bank for the amount
of such drawing or payment plus all interest accrued on an Unpaid LOC
Reimbursement Obligations with respect thereto. If for any reason, proceeds of
Loans are not received by the Issuing Bank on such date in an amount equal to
the amount of such drawing, the Borrower shall be obligated to and shall
reimburse the Issuing Bank, on the business day (under the laws of the
jurisdiction of the Issuing Office) immediately following the date of such
drawing, in an amount in immediately available funds equal to the excess of the
amount of such drawing over the amount of such Loans, if any, which are so
received, plus accrued interest on such amount at the rate set forth in Section
2.7.3(a). All interest accrued on an Unpaid LOC Reimbursement Obligation in
respect of a drawing under a Facility Letter of Credit prior to the
reimbursement of such drawing or the funding of a Lender's participation
therein shall be for the account of the Issuing Bank thereof.

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(c) In the event that the Borrower does not reimburse an Issuing Bank for
the amount of any drawing pursuant to Section 2.7.3(b), such Issuing Bank shall
notify the Agent, who shall thereupon promptly notify each Lender of the
unreimbursed amount of such drawing and of such Lender's respective
participating therein. Each Lender shall then make a Base Rate Refunding Loan
equal to such Lender's Proportionate Share of the amount of such unreimbursed
drawing and shall make the proceeds thereof available to such Issuing Bank, in
immediately available funds, at the office of the Issuing Bank specified in
such notice, not later than 1:00 P.M. on the business day (under the laws of
the jurisdiction in which Issuing Bank's Issuing Office is located) following
the date notified by the Agent.

(d) If any Lender is prohibited from making, or the Borrower is prohibited
from incurring, Refunding Loans specified above with respect to a drawing under
a facility letter of Credit, the funds required to be made available by such
Lender to the Issuing Bank with respect to such unreimbursed drawing shall
constitute the funding of such Lender's participation therein.

(e) In the event that any Lender fails to make available to an Issuing
Bank the amount of such Lender's required Refunding Loan with respect to, or
participation in, any Unpaid LOC Reimbursement Obligations as provided in this
Section 2.7.3, such Issuing Bank shall be entitled to recover such amount on
demand from such Lender, together with interest at a rate per annum equal to,
for the first three days during which such failure continues, one percent (1%)
plus the Overnight Federal Funds Rate and thereafter at the Base Rate.

(f) Promptly after an Issuing Bank receives a payment from the Borrower on
account of an Unpaid LOC Reimbursement Obligation as to which the Issuing Bank
has received the proceeds of any Loans (or purchases of participations) made by
the Lenders pursuant to this Section 2.7.3, such Issuing Bank shall promptly
pay to the Agent, and the Agent shall promptly pay to each Lender that made a
Loan (or funded its participation) in respect of such unpaid LOC Reimbursement
Obligation, an amount equal to such Lender's Proportionate Share of the amount
of such payment received by such Issuing Bank from the Borrower.

(g) In determining whether to pay any draft drawn under any Facility
Letter of Credit, the Issuing Bank thereof shall have no obligation to the
Lenders other than to confirm that any documents required to be delivered under
such Facility Letter of Credit appear to have been

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delivered and that they appear to comply on their face with the requirements of
such Facility Letter of Credit. No action taken or omitted to be taken by an
Issuing Bank under or in connection with any Facility Letter of Credit, if
taken or omitted to be taken in the absence of willful misconduct or gross
negligence, shall result in any liability of the Issuing Bank to any Lender.

(h) If any payment received by an Issuing Bank on account of any LOC
Reimbursement Obligation with respect to a Facility Letter of Credit and
distributed to a Lender as a participant therein under Section 2.7.3(f) or
Section 2.13(e) is thereafter set aside, avoided or recovered from such Issuing
Bank in connection with any receivership, liquidation, reorganization or
bankruptcy proceeding relating to the Borrower or otherwise, each Lender that
received such distribution shall, upon demand by such Issuing Bank (through the
Agent), pay to such Issuing Bank such Lender's Proportionate Share of the
amount so set aside, avoided or recovered plus such Lender's Proportionate
Share of all interest required to be paid by the Issuing Bank with respect to
such recovered amount.

2.7.4 Obligations of Lenders Absolute. The obligations of each Lender to
make a Loan with respect to an unreimbursed drawing under a Facility Letter of
Credit or to fund its participation therein, as provided in Section 2.7.2 and
2.7.3, shall be irrevocable and not subject to any qualification or condition
whatsoever and shall be made in accordance with the terms and conditions of
this Credit Agreement under all circumstances, including, without limitation,
any of the following circumstances:

(a) failure of the Borrower to satisfy any otherwise applicable
condition to such Lender's obligation to make a Loan set forth in Article
III;

(b) the existence of an Event of Default (including an Event of
Default specified in clause (g) of Section 7.1) or the termination of the
Credit Facility;

(d) the existence of any claim, set-off, defense or other right which
the Borrower may have at any time against a beneficiary named in a Facility
Letter of Credit or any transferee of any Facility Letter of Credit (or any
Person for whom any such transferee may

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be acting), the Agent, the Issuing Bank, any Lender or any other Person,
whether in connection with this Credit Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any unrelated transactions;

(e) any draft, certificate or any other document presented under the
Facility Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;

(f) the surrender or impairment of any security for the performance
or observance of any of the terms of any Credit Documents; or

(g) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against any Issuing Bank, the Borrower or any
other Person for any reason whatsoever; the occurrence or continuance of a
Default; any adverse change in the condition (financial or otherwise) of
the Borrower; any breach of this Credit Agreement by the Borrower or any
other Lender; or any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.

2.7.5 Obligations of Borrower Absolute. (a) The obligations of the
Borrower under this Credit Agreement, any Letter of Credit Agreement and any
other agreement or instrument relating to any Facility Letter of Credit shall
be unconditional and irrevocable and shall be paid strictly in accordance with
the terms of this Credit Agreement, such Letter of Credit Agreement and such
other agreement or instrument under all circumstances. As between the Borrower
and each Issuing Bank, the Borrower assumes all risks of the acts and omissions
of, or misuse of any Facility Letters of Credit by, the beneficiaries of the
Facility Letters of Credit. In furtherance and not in limitation of the
foregoing, neither any Issuing Bank, any Lender nor any of their officers or
directors shall be responsible for:

(i) any lack of validity or enforceability of this Credit Agreement,
any Letter of Credit Agreement, any Letter of Credit Agreement, any other
Credit Document, any Facility Letter of Credit or any other agreement or
instrument relating thereto (collectively, the "LOC Related Documents");

(ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of
the Facility

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Letters of Credit or any other amendment or waiver of or any consent to
departure from all or any of the LOC Related Documents;

(iii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Facility Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason;

(iv) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee
of a Facility Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), any Issuing Bank, any
Lender or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the LOC Related Documents or any
unrelated transaction;

(v) the use that may be made of any Facility Letter of Credit or acts
or omissions of any beneficiary or transferee in connection therewith,
including, without limitation, the misapplication by the beneficiary of a
Facility Letter of Credit of the proceeds of any drawing under such
Facility Letter of Credit;

(vi) any certificate or any other document presented under a Facility
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;

(vii) payment by the Issuing bank under a Facility Letter of Credit
against presentation of documents that do not comply with the terms of the
Facility Letter of Credit, including, without limitation, failure of such
documents to bear any reference or adequate reference to the Facility
Letter of Credit; or

(viii) the failure of the beneficiary of any Facility Letter of Credit
to comply fully with conditions required in order to draw upon such
Facility Letter of Credit;

(ix) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex, telecopy or
otherwise, whether or not they be in cipher;

(x) errors in interpretation of technical terms;

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(xi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Facility Letter of
Credit, or of the proceeds thereof; and

(xii) any other circumstances whatsoever in making or failing to make
payment under any Facility Letter of Credit.

(b) In furtherance and not in limitation of the foregoing, each
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary. None of the above shall affect, impair, or
prevent the vesting of any of any Issuing Bank's rights or powers hereunder.

(c) Notwithstanding the foregoing, no Issuing Bank shall be relieved
of any liability it may otherwise have as a result of any direct, but not any
consequential, damages resulting from its gross negligence or willful
misconduct in paying non-conforming drawings under a Facility Letter of Credit.

2.7.6. Letter of Credit Reports. Each Issuing Bank shall furnish to
the Agent and each Lender, on the third Business Day of each month, a written
report setting forth (i) the issuance and expiration dates of Facility Letters
of Credit issued by such Issuing Bank during the preceding month, (ii) all
drawings during such preceding month under all such Facility Letters of Credit,
(iii) the aggregate undrawn amount of all Facility Letters of Credit issued by
such Issuing Bank and outstanding as of the last day of such preceding month,
(iv) the aggregate amount of the Unpaid LOC Reimbursement Obligations owing to
such Issuing Bank outstanding as of the last day of such preceding month and
(v) the amount of such Lender's participation in all such outstanding Facility
Letters of Credit of Credit and Unpaid LOC Reimbursement Obligations.

2.7.7 Third Party Letters of Credit. In addition to procuring Facility
Letters of Credit, the Borrower may procure letters of credit (any such letter
of credit hereing called a "Third Party Letter of Credit") from issuers not
party to this Credit Agreement, provided that:

(a) at least five (5) Business Days prior to the issuance of such
letter of credit, the Borrower notifies the Agent of the amount and
expiration date of such letter of credit and the issuer and beneficiary
thereof;

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(b) any security interest in the Collateral granted by the Borrower
or its Subsidiaries to such issuer to secure the Borrower's reimbursement
obligations with respect to such letter of credit shall be expressly
subordinated to the Lenders' security interest therein; and

2.7.8 LOC Cash Collateral Account. If at any time the amount of all
outstanding Facility LOC Obligations, when aggregated with the total
outstanding principal amount of all Loans and all third Party LOC Obligations,
exceeds the Adjusted Credit Facility and if such excess continues to exist
after the repayment of the Loans, the Borrower shall deposit in a special
account to be held by the Agent (the "LOC Cash Collateral Account") an amount
equal to such excess. The Borrower shall also make deposits to the Cash
Collateral Account as otherwise specified herein. The Agent shall have sole
dominion and control over the Cash Collateral Account and is hereby granted a
lien and security interest therein and in all amounts and investments held
therein, which lien and security interest shall secure all Obligations of the
Borrower hereunder and shall be held by the Agent as agent for, and for the
benefit of, itself, the Lenders and the Issuing Banks. If at any time when
amounts are held in the LOC Cash Collateral Account (i) there exists no Default
hereunder and (ii) the amount of the Adjusted Credit Facility exceeds the sum
of (x) the aggregate outstanding principal amount of all Loans plus (y) the
aggregate amount of all outstanding Facility LOC Obligations plus (z) the
aggregate amount of all outstanding Third Party LOC Obligations, the Agent
shall release to the Borrower, from the Cash Collateral Account amounts held
therein to the extent of such excess. Upon the occurrence of an Event of
Default, the Agent may apply amounts held in the LOC Cash Collateral Account to
reimburse Issuing Banks for payments made by them under Facility Letters of
Credit and/or to pay other outstanding Obligations of the Borrower. Any amount
remaining in the LOC Cash Collateral Account after the expiration of all
outstanding Facility Letters of Credit, the payment of all Obligations
(including all outstanding Facility LOC Obligations) in full and the
termination of the Credit Agreement shall be remitted to the Borrower.

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2.8 Interest on Loans and Other Obligations.

2.8.1 Interest on Fixed Rate Loans. Subject to the provisions of Section
2.8.3, each Fixed Rate Loan shall bear interest during each Interest Period
applicable thereto on the principal amount thereof outstanding from time to time
at a rate per annum equal to the sum of (i) the Fixed Rate Base applicable to
such Type of Fixed Rate Loan for such Interest Period plus (ii) the Applicable
Margin for such Type of Fixed Rate Loan. Interest on each Fixed Rate Loan shall
accrue from and including, the first day of each Interest Period applicable
thereto to, but excluding the last day of such Interest Period and shall be
payable on the last day of each such Interest Period, on the date of Conversion
of such Fixed Rate Loan (or a portion thereof) to a Loan of another Type and at
the maturity of such Fixed Rate Loan; provided that interest on each Fixed Rate
Loan having an Interest Period longer than three months shall also be payable on
the last day of each 90-day interval during the term of such Interest Period.
Upon determining the Fixed Rate for any Fixed Rate Loan for any Interest Period
therefor, the Agent shall promptly notify the Borrower and the Lenders by
telephone (confirmed promptly in writing) or in writing thereof, but failure by
the Agent to so notify the Borrower or the Lenders shall not affect the
Borrower's obligation to pay interest on each Fixed Rate Loan in accordance
with the terms of this Credit Agreement. Each determination by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes,
absent manifest error.

2.8.2 Interest on Floating Rate Loans. Subject to the provisions of Section
2.8.3, each Floating Rate Loan shall bear interest on the principal amount
thereof outstanding on any day at a rate per annum equal to the sum of (i) the
Floating Rate Base applicable to such Type of Floating Rate Loan on such day
plus (ii) the Applicable Margin for such Type of Floating Rate Loan on such
day. Interest accrued on Floating Rate Loans in any calendar quarter (or
portion thereof) of each year shall be payable on the third Business Day
following such quarter. Interest accrued on Floating Rate Loans shall also be
payable upon the maturity of such Loans.

2.8.3 Interest on Overdue Amounts. Any amount of principal and (to the
extent permitted by law) interest, and any other Obligations, which is not paid
when due shall bear interest, from the due date thereof and until paid, at a
rate per annum equal to the Base Rate plus two percent (2%), which rate shall
change as and when the Base Rate changes; provided, however, that if any Fixed
Rate Loan become due prior to the last day of any Interest Period

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applicable thereto, such Loan shall bear interest until the last day of such
Interest Period at the applicable Fixed Rate Base plus the Applicable Margin
specified for such Fixed Rate Loan in the final proviso to the definition of
the term "Applicable Margin".

2.8.4 Changes in Applicable Margin. Any change in Applicable Margin
resulting from a change in the Debt/EBITDA Ratio for any Rolling Period shall
become effective as follows: (a) in the case of a Floating Rate Loan, on the
Adjustment Date immediately following such Rolling Period and (b) in the case
of a Fixed Rate Loan, during each Interest Period for such Loan commencing on
or after the Adjustment Date immediately following such Rolling Period.

2.9 Fees and Expenses.

2.9.1 Commitment Fees. The Borrower shall pay to the Agent, for the
ratable account of the Lenders, a fee (the "Commitment Fee") at a rate per
annum equal to the Applicable Fee Rate on the average daily amount of the
Unused Credit Facility. The Commitment Fee shall accrue from the Effective Date
and until the termination of the Credit Facility. Commitment fees accrued in
any calendar quarter (or portion thereof) of each year shall be payable on the
third Business Day following such quarter. Accrued Commitment Fees shall also
be payable upon each reduction of the Credit Facility and at the Expiration
Date or, if earlier, the termination of the Credit Facility. The Lenders shall
share the Commitment Fee accrued on any day in proportion to their respective
Unused Commitment on such day.

2.9.2 Participation Fees. The Borrower shall pay to the Agent, for the
account of each Initial Lender (including the Agent in its capacity as an
Initial Lender), on the Closing Date, a fee (the "Participation Fee") in the
amount of one-eighth of one percent (1/8 of 1%) of the Commitment of such
Initial Lender.

2.9.3 Letter of Credit Fees and Expenses. (a) The Borrower shall pay to
the Agent, for the ratable account of the Lenders, a fee (the "LOC Utilization
Fee") at a rate per annum equal to (i) the Applicable Fee Rate on the average
daily undrawn amount of all outstanding Facility Letters of Credit minus (ii)
the LOC Fronting Fees paid or payable in respect of such Facility Letters of
Credit for the same period. Each Lender's share of the LOC Utilization Fee
accruing on any day shall be equal to its Proportionate Share on such day.

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(b) The Borrower shall pay to the Agent, for the account of each Issuing
Bank a fee (the "LOC Fronting Fee") at a rate per annum equal to the Applicable
Fee Rate on the average daily undrawn amount of the outstanding Facility
Letters of Credit issued by such Issuing Bank.

(c) The LOC Utilization Fee and LOC Fronting Fee in respect of each
Facility Letter of Credit shall accrue from the date such Facility Letter of
Credit is issued and until it expires or, if earlier, the date on which the
entire amount thereof is drawn and paid thereunder. The LOC Utilization Fee and
LOC Fronting Fee accrued during any calendar quarter (or portion thereof) shall
be payable on the third Business Day following the end of such quarter. Upon
the occurrence of an Event of Default, all accrued LOC Utilization Fees and LOC
Fronting Fees shall be payable on demand.

(d) The Borrower shall also pay to each Issuing Bank, for its own account,
such Issuing Bank's customary issuance, opening and transfer fees and other
fees and charges in connection with the issuance and administration of each
Facility Letter of Credit.

2.9.4 Agent's Fees. (a) The Borrower shall pay to the Agent, for its own
account, a fee (the "Agent Fee") in the amount and on each date specified in a
separate letter agreement between the Borrower and the Agent.

(b) The Borrower shall also promptly reimburse the Agent for all Expenses
of the Agent as the same are incurred by the Agent, upon receipt of invoices
therefor and, if requested by the Borrower, such reasonable backup materials
and information as the Borrower shall reasonably request.

2.9.5 Audit Charges. The Borrower shall compensate the Agent for the
reasonable costs and expenses incurred by the Agent in connection with the
Agent's audit and field examination during the term of this Agreement of the
Collateral and the Borrower's operations, as notified by the Agent to the
Borrower. So long as no Event of Default shall have occurred and be continuing
hereunder, audits for which such compensation is sought shall not be conducted
more frequently than two (2) times in any twelve month period.

2.9.6 Fees Fully Earned. All Fees shall be fully earned on the date such
Fees become payable pursuant hereto and, when paid, shall be non-refundable.

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2.10 Repayment of Outstanding Credit.

2.10.1 Mandatory Repayments. (a) The Outstanding Credit shall be repaid in
full on the earlier of (i) the Expiration Date or (ii) the termination of the
Credit Facility.

(b) If at any time the sum of the Outstanding Credit plus all outstanding
Third Party LOC Obligations exceeds the lesser of (i) the Borrowing Base or
(ii) the Credit Facility, the Borrower shall repay the Outstanding Credit by
the amount of such excess within three (3) Business Days after notice from the
Agent requesting such repayment.

(c) If at any time the Availability is less than $10,000,000, the Borrower
shall, if so requested by the Agent, apply all amounts then held in or
thereafter deposited in the Lockbox Account to the repayment of the Outstanding
Credit until the Availability is $10,000,000 or more.

(d) Repayment of the Outstanding Credit shall be effected by, first,
repaying outstanding Loans. If the amount of any mandatory repayment of the
Outstanding Credit exceeds the aggregate outstanding principal amount of the
Loans, the Borrower shall deposit in cash in the LOC Cash Collateral Account an
amount equal to such excess.

2.10.2 Optional Prepayment. (a) The Borrower may, upon at least one
Business Day's notice to the Agent (in the case of Floating Rate Loans) or
three Business Days' prior notice to the Agent (in the case of Fixed Rate
Loans) stating in each case the proposed date and aggregate principal amount
of the prepayment and the Type of Loans to be prepaid, and if such notice is
given the Borrower shall on such proposed date, prepay the outstanding
Revolving Loans, in whole or in part, in the aggregate amount stated in such
notice, without penalty or premium, together with interest accrued to the date
of such prepayment on the principal amount prepaid; provided that optional
prepayment of Fixed Rate Loans may only be made on the last day of an Interest
Period applicable thereto; and provided further, that optional prepayments of
Swingline Loans shall be made in accordance with Section 2.5(c). Each optional
partial prepayment of Revolving Loans shall be in an aggregate principal amount
not less than $1,000,000 or in integral multiples of $100,000 in excess thereof.

(b) Unless otherwise specified by the Borrower, each partial repayment of
the Loans shall be applied first to the outstanding principal balance of
Swingline Loans and

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next to outstanding Revolving Loans. Each partial prepayment of the Revolving
Loans shall be applied first to outstanding Base Rate Loans, next to
outstanding Overnight FFR Loans and then to each Tranche of Fixed Rate Loans
having the shortest remaining Interest Period. Partial repayment of Loans in
each Tranche shall be applied ratably to each Lender's Loans in such Tranche.

2.11 Expiration Date; Reduction of Credit Facility.

2.11.1 Expiration Date. (a) The "Expiration Date" shall be June 9, 1997;
provided, however, that the Expiration Date may be extended for further
successive periods of one year each in accordance with the terms of this
Section 2.11.1. If the Borrower wishes to have the Expiration Date so extended,
it shall give written notice to that effect to the Agent not more than 16
months or less than 15 months before the then current Expiration Date (the
"Scheduled Expiration Date"), whereupon the Agent shall notify each Lender of
such notice. Each Lender shall promptly notify the Borrower and the Agent in
writing not less than 13 months prior to the then Scheduled Expiration Date
whether or not such Lender consents to such extension of the Expiration Date.
If any Lender fails to give such notice within such time period, it shall be
conclusively deemed to have refused to extend the Scheduled Expiration Date.
The Expiration Date shall not be extended unless the Borrower and each Lender
executes and deliver to the Agent at least 13 months prior to the Scheduled
Expiration Date counterparts of an extension agreements, substantially in the
form of Exhibit E hereto (an "Extension Agreement"), providing for such
extension. If the Extension Agreement is executed by the Borrower and all the
Lenders, the Expiration Date shall be extended to the first anniversary of the
then Scheduled Expiration Date and references herein to "Expiration Date" shall
be to the Expiration Date as so extended. No Lender shall be under any
obligation whatsoever to sign an Extension Agreement and may refuse to extend
the Expiration Date in its sole and absolute discretion. Each extension of the
Expiration Date pursuant to an Extension Agreement shall become effective on
the date when the Extension Agreement (or counterparts thereof) signed by the
Borrower and all Lenders are delivered to the Agent and accepted by it.

(b) In connection with any request by the Borrower to extend the
Expiration Date, the Agent or the Required Lenders may require the Borrower to
deliver to the Agent (i) updated opinions of counsel regarding the matters
covered by the opinions of counsel referred to in clauses (xxi) and (xxii) of
Section 3.1(j) and/or (ii) UCC, tax and

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judgment lien search reports with respect to the Borrower for each jurisdiction
in which Collateral is located.

2.11.2 Mandatory Reduction of Credit Facility. The entire Credit Facility
and each Lender's Commitment shall be reduced to zero and terminated on the
Expiration Date.

2.11.3 Optional Reduction of Credit Facility. The Borrower shall have the
right, upon at least three (3) Business Days' notice to the Agent (which shall
provide prompt notice thereof to each Lender), to terminate in whole or reduce
in part the Unused Credit Facility; provided that each partial reduction shall
be in the amount of $5,000,000 or an integral multiple of $500,000 in excess
thereof; and provided further, that if after giving effect to such reduction,
the Credit Facility would be less than $30,000,000, the entire Credit Facility
shall be terminated. Each reduction of the Credit Facility shall be applied
ratably to the Commitment of each Lender.

2.12 Evidence of Indebtedness.

2.12.1 Notes. Each Lender's Loans shall be evidenced by promissory notes,
substantially in the form of Exhibit A hereto (each a "Note" and collectively
the "Notes"), executed and delivered by the Borrower, each such Note delivered
to a Lender to be payable to the order of such Lender and to be dated the
Closing Date and to be in the amount of such Lender's Commitment.

2.12.2 Loan Account. The Agent shall maintain an account (the "Loan
Account") on its books in the name of the Borrower in which the Borrower will
be charged with all Loans made by the Lenders and all Unpaid LOC Reimbursement
Obligations and with any other Obligations, including any and all costs,
expenses and attorneys' fees which the Agent may incur in connection with the
exercise by or for the Lenders of any of the rights or powers herein conferred
upon the Agent (other than in connection with any assignments or participations
by any Lender) or in the prosecution or defense of any action or proceeding by
or against the Borrower or the Lenders concerning any matter arising out of,
connected with, or relating to this Credit Agreement, any other Credit
Documents or the Collateral, or any Obligations owing to the Lenders by the
Borrower. The Borrower will be credited with all amounts received by the Agent
or the Lenders from the Borrower or from others for the Borrower's account,
including, all proceeds of the Collateral received by the Agent.

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2.12.3 Statement of Account. After the end of each month the Agent shall
send the Borrower a statement showing all charges, debits and credits to the
Loan Account and setting forth, as of the last day of such month, the
outstanding principal of all Loans, all accrued and unpaid interest thereon,
all accrued and unpaid Fees, the undrawn amount of all outstanding Facility
Letters of Credit, all Unpaid LOC Reimbursement Obligations and all other
transactions occurring among and between the Agent or the Lenders and the
Borrower during that month. The monthly statements shall be deemed correct and
binding upon the Borrower and shall constitute an account stated among the
Borrower, the Agent and the Lenders unless the Agent receives a written
statement of the Borrower's exceptions within thirty (30) days after said
statement is received by the Borrower.

2.12.4 Agent's Register. The Register maintained by the Agent pursuant to
Section 9.6(e) shall include a control account, in which account shall be
recorded (i) the date and amount of each Borrowing made and Facility Letter of
Credit issued hereunder, (ii) each Assignment and Acceptance delivered to and
accepted by the Agent, (iii) the amount of any outstanding principal or accrued
and unpaid hereunder interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iv) the amount of any sum received by
the Agent from the Borrower hereunder for the account of any Lender. The entries
made in the Register shall be conclusive and binding for all purposes, absent
demonstrable error.

2.13 Place and Manner of Payments by Borrower.

2.13.1 Time for Payment. (a) Except as otherwise expressly provided
herein, the Borrower shall make each payment due hereunder not later than 2:00
p.m. on the day when due, in Dollars, to the Agent at the Agent Account, in
immediately available funds, for the account of the party entitled thereto. Any
funds received after such time shall be deemed to have been received on the
following Business Day. The Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal or interest,
Commitment Fees, LOC Utilization Fees, Participation Fees or Expenses ratably
(other than amounts payable pursuant to Section 2.14, amounts payable to the
Swingline Bank in respect of the Swingline Loans, amounts payable to the Issuing
Banks in respect of Facility Letters of Credit and amounts payable to the Agent
or an Issuing Bank to reimburse it for fees and expenses payable solely to it)
to the Lenders for the account of their Applicable Lending Offices (or any
other account specified

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in writing by any Lender from time to time) and like funds relating to the
payment of any other amount payable to any Lender or Issuing Bank to such Lender
for the account of its Applicable Lending Office (or any other office specified
in writing by any Lender from time to time) or to such Issuing Bank, in each
case to be applied in accordance with the terms of this Agreement. The
Borrower's obligations to the Lenders with respect to such payments shall be
discharged by making such payments to the Agent pursuant to this Section 2.13.1.

(b) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and any such extension of time shall in such case be included in
the computation of payment of interest.

(c) Upon its acceptance of an Assignment and Acceptance and recording of
the information contained therein in the Register pursuant to Section 9.6,
from and after the effective date of such Assignment and Acceptance, the Agent
shall make all payments hereunder in respect of the interest assigned thereby
to the assignee Lender thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves.

2.13.2 Computation. All computations of interest, Fees and Letter of
Credit Fees shall be made by the Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or Letter
of Credit Fees are payable. Each determination by the Agent of an interest
rate, Fee or commission hereunder shall be conclusive and binding for all
purposes, absent demonstrable error.

2.13.3 Distribution of Payments. Unless the Agent shall have received
notice from the Borrower prior to the date on which any payment is due to any
Lender hereunder that the Borrower will not make such payment in full, the
Agent may assume that the Borrower has made such payment in full to the Agent
on such date and the Agent may, in reliance upon such assumption, cause to be
distributed to each such Lender or Issuing Bank, as the case may be, on such
due date an amount equal to the amount then due such Lender or Issuing Bank. If
and to the extent the Borrower shall not have so made such payment in full to
the Agent, each such Lender or Issuing Bank shall repay to the Agent forthwith
on demand such amount distributed to such Lender or Issuing Bank together with
interest thereon,

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for each day from the date such amount is distributed to such Lender or Issuing
Bank and until the date such Lender or Issuing Bank repays such amount to the
Agent, at the interest rate per annum equal to the Overnight Federal Funds Rate.

2.14 Increased Costs, Etc.; Taxes.

2.14.1 Increased Cost. (a) If either (i) any change in or in the
interpretation of any law or regulation or (ii) the compliance by any Lender or
its Applicable Lending Office or by any Issuing Bank with any guideline or
request from any central bank or other governmental authority, in any case
introduced, changed, interpreted or requested after the date hereof (whether or
not having the force of law), shall either (x) impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
held by, or letters of credit or guarantees issued by, or deposits in or for
the account of, any Lender or any Issuing Bank or (y) impose on any Lender or
any Issuing Bank any other condition relating to this Credit Agreement or such
Lender or the Loans made by it or any Facility Letter of Credit issued by it or
any Lender's participation therein, and the result of any event referred to in
clause (x) or (y) shall be to increase the cost to any Lender of agreeing to
make or making, funding or maintaining its Commitment or Loans, or to any
Issuing Bank of issuing or maintaining and Facility Letter of Credit or to any
Lender of purchasing any participation therein, then the Borrower shall from
time to time, upon demand by such Lender or such Issuing Bank (with a copy of
such demand to the Agent), pay to the Agent, for the account of such Lender or
such Issuing Bank, as the case may be, additional amounts sufficient to
compensate such Lender, such Issuing Bank or such corporation for such
increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower by such Lender or Issuing Bank (through the Agent)
shall be conclusive and binding for all purposes, absent manifest error.

(b) If any Lender or any Issuing Bank determines that the adoption or
effectiveness of any treaty, law, rule or regulation in regard to capital
adequacy, or any change therein or in the application thereof, or any change in
the interpretation or administration thereof by any central bank or other
governmental or monetary authority charged with the interpretation or
administration thereof, or compliance by such Lender or any of its Applicable
Lending Offices or such Issuing Bank, or any corporation controlling such
Lender or such Issuing Bank, with any interpretation, directive, request, order
or decree in regard to capital adequacy (whether or not having the force

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of law) by any such central bank or other governmental or monetary authority,
including, without limitation, any guideline contemplated by the report dated
July, 1988 entitled "International Convergence of Capital Management and
Capital Standards" issued by the Bank Committee on Banking Regulations and
Supervisory Practices, has or would have the effect of increasing the amount of
capital required or expected to be maintained by such Lender, the Issuing Bank
or any corporation controlling such Lender or the Issuing Bank or otherwise, as
a consequence of such Lender's Loans or Commitment hereunder (including,
without limitation, its obligation to make to fund its participation in
Facility Letters of Credit) or the issuance of Facility Letters of Credit by
such Issuing Bank, and thereby reducing the rate of return on the capital of
such Lender, such Issuing Bank or any corporation controlling such Lender or
such Issuing Bank to a level below that which such Lender, the Issuing Bank or
any corporation controlling such Lender or the Issuing Bank could have achieved
but for such adoption, effectiveness, change or compliance (taking into account
such Lender's, the Issuing Bank's or such corporation's policies with respect
to capital adequacy), then the Borrower shall, from time to time, pay to such
Lender or Issuing Bank, upon demand by such Lender or the Issuing Bank (with a
copy of such demand to the Agent) such additional amounts as may be specified
by such Lender or such Issuing Bank as being sufficient to compensate such
Lender or such Issuing Bank or such corporation for such reduction in return,
to the extent that such Lender or the Issuing Bank determines such reduction to
be attributable to the existence, issuance or maintenance of any Commitments,
Loans or Facility Letters of Credit. A certificate as to such additional
amounts submitted to the Borrower (through the Agent) by such Lender or Issuing
Bank shall be conclusive and binding for all purposes, absent manifest error.

2.14.2 Taxes. (a) Any and all payment by the Borrower hereunder, under the
Notes or in respect of the Facility Letters of Credit to or for the benefit of
any Lender, any Issuing Bank or the Agent shall be made free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings and penalties, interests and all other
liabilities with respect thereto ("Taxes"), excluding, (i) in the case of each
such Lender, any Issuing Bank or the Agent, taxes imposed on its net income
(including, without limitation, any taxes imposed on branch profits) and
franchise taxes imposed on it by the jurisdiction under the laws of which such
Lender, Issuing Bank or the Agent (as the case may be) is organized or any
political subdivision thereof, (ii) in the case of each Lender or Issuing Bank,

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taxes imposed on its net income (including, without limitation, any taxes
imposed on branch profits), and franchise taxes imposed on it, by the
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof, (iii) in the case of each such Lender, each Issuing Bank
and the Agent, any Taxes that are in effect and that would apply to a payment
to such Lender, Issuing Bank or the Agent, as applicable, as of the Closing
Date, and (iv) if any Person acquires any interest in this Credit Agreement, any
Note or Letter of Credit pursuant to the provisions hereof, or a Foreign
Lender or the Agent changes the Applicable Lending Office for such Loan (any
such person, or such Foreign Lender or the Agent in that event, being referred
to as a "Tax Transferee"), any Taxes to the extent that they are in effect and
would apply to a payment to such Tax Transferee as of the date of the
acquisition of such interest or change in office, as the case may be (all such
Taxes not excluded pursuant to clauses (i) through (iv) above being
hereinafter referred to as "Covered Taxes"). If the Borrower shall be required
by law to deduct any Covered Taxes from or in respect of any sum payable
hereunder, under any Note or in respect of any Facility Letter of Credit to or
for the benefit of any Lender, any Issuing Bank or the Agent or any Tax
Transferee, (A) the sum payable shall be increased as may be necessary so that
after making all required deductions of Covered Taxes (including deductions of
Covered Taxes applicable to additional sums payable under this Section 2.14.2)
such Lender, Issuing Bank, the Agent or such Tax Transferee, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made, (B) the Borrower shall make such deductions and (C) the
Borrower shall pay the full amount so deducted to the relevant taxation
authority or other authority in accordance with applicable law.

(b) In addition, the Borrower agrees to pay any present or future stamp,
documentary, excise, privilege, intangible or similar levies (hereinafter
referred to as "Other Taxes") that arise at any time or from time to time (i)
from any payment made under any and all Credit Documents, (ii) from the
transfer of the rights of the Lender under any Credit Documents to any
transferee, or (iii) from the execution or delivery by the Borrower of, or from
the filing or recording or maintenance of, or otherwise with respect to the
exercise by the Agent or the Lenders of their rights under, any and all Credit
Documents.

(c) The Borrower will indemnify each Lender, each Issuing Bank, the Agent,
and any Tax Transferee for the full amount of (i) Covered Taxes imposed on or
with

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respect to amounts payable hereunder, (ii) Other Taxes, and (iii) any Taxes
(including Covered Taxes imposed by any jurisdiction on amounts payable under
this Section 2.14.2) paid by such Lender, Issuing Bank or the Agent or such Tax
Transferee, as the case may be, and any liability (including penalties,
interest and reasonable expenses) arising therefrom or with respect thereto.
Payment of this indemnification shall be made within 30 days after the date
such Lender, Issuing Bank or the Agent or Tax Transferee delivers to the
Borrower (with a copy to the Agent) a certificate specifying the amount thereof
and setting forth in reasonable detail the calculation thereof. Any such
certificate submitted by a Lender, Issuing Bank, the Agent or a Tax Transferee
in good faith to the Borrower shall, absent manifest error, be final,
conclusive and binding on all parties.

(d) Within 30 days after payment of Covered Taxes or Other Taxes, the
Borrower will furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.

(e) On or before the Closing Date, each Foreign Lender shall deliver to
the Agent and the Borrower (i) two valid, duly completed copies of IRS Form
1001 or 4224 or successor applicable form, as the case may be, and any other
required form, certifying in each case that such Foreign Lender is entitled to
receive payments under this Credit Agreement or the Revolving Notes payable to
it without deduction or withholding of any United States federal income taxes
or with such withholding imposed at a reduced rate (the "Reduced Rate"), and
(ii) a valid, duly completed IRS Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding tax. Each such Foreign Lender shall also deliver to the Agent and
the Borrower two further copies of said Form 1001 or 4224 and W-8 or W-9, or
successor applicable forms, or other manner of required certification, as the
case may be, on or before the date that any such form expires or becomes
obsolete or otherwise is required to be resubmitted as a condition to obtaining
an exemption from a required withholding of United States federal income tax or
entitlement to having such withholding imposed at the Reduced Rate or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower and the Agent, and such extensions or renewals
thereof as may reasonably be requested by the Borrower or the Agent, certifying
(i) in the case of a Form 1001 or 4224 that such Foreign Lender is entitled to
receive payments under this Credit Agreement or the Notes payable to it without
deduction or withholding or any United States federal

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income taxes (unless in any such case any change in a tax treaty to which the
United States is a party, or any change in law or regulation of the United
States or official interpretation thereof, has occurred after the date of this
Credit Agreement and prior to the date on which any such delivery would
otherwise be required that renders all such forms inapplicable to such Foreign
Lender or that would prevent such Foreign Lender from duly completing and
delivering any such form with respect to it, and such Foreign Lender advises
the Borrower and the Agent that it is not capable of receiving payments without
any deduction or withholding or at the Reduced Rate), or (ii) in the case of a
Form W-8 or W-9 that such Foreign Lender is exempt from United States backup
withholding tax.

(f) If a Tax Transferee that is organized under the laws of a jurisdiction
outside of the United States acquires an interest in this Credit Agreement or
any Note or a Foreign Lender changes its Applicable Lender Office, the
transferor, or the applicable Foreign Lender (in the case of a change of
Applicable Lending Office), shall cause such Tax Transferee to agree that on or
prior to the effective date of such acquisition or change, as the case may be,
it will deliver to the Borrower and the Agent (i) two valid, duly completed
copies of IRS Form 1001 or 4224 or successor applicable form, as the case may
be, and any other required form, certifying in each case that such Tax
Transferee is entitled to receive payments under this Credit Agreement and the
Notes payable to it without deduction or withholding of United States federal
income tax or with such withholding imposed at a Reduced Rate; and (ii) a
valid, duly completed IRS Form W-8 or W-9 or successor applicable form, as the
case may be, to establish an exemption from United States backup withholding
tax. Each Tax Transferee that delivers to the Borrower and the Agent a Form
1001 or 4224, and Form W-8 or W-9 and any other required form pursuant to the
next preceding sentence further undertakes to deliver two further copies of
such Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or
other manner of required certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or otherwise is required to
be resubmitted as a condition to obtaining an exemption from a required
withholding of United States federal income tax or entitlement to having such
withholding imposed at the Reduced Rate or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower and the Agent, and such extensions or renewals thereof as may
reasonably be requested by the Borrower or the Agent, certifying (i) in the
case of a Form 1001 or 4224 that such Tax Transferee is entitled to receive
payments under this Credit Agreement without deduction or

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withholding of any United States federal income taxes or with such withholding
imposed at the Reduced Rate (unless any change in treaty, law or regulation or
official interpretation thereof has occurred after the effective date of such
acquisition or change by such Tax Transferee and prior to the date on which any
such delivery would otherwise be required that renders all such forms
inapplicable to such Tax Transferee or that would prevent such Tax Transferee
from duly completing and delivering any such form with respect to it, and such
Tax Transferee advises the Borrower and the Agent that it is not capable of
receiving payments (x) without any deduction or withholding of United States
federal income tax or (y) with such withholding at the Reduced Rate, as the
case may be) and (ii) in the case of a Form W-8 or W-9, that such Tax
Transferee is exempt from United States backup withholding tax.

(g) If any Taxes for which the Borrower is required to make payment under
this Section 2.14.2 are imposed on any Lender, Issuing Bank or the Agent, the
affected party shall use its reasonable efforts to avoid or reduce such Taxes
by taking any appropriate action (including, without limitation, assigning its
rights hereunder to a related entity or a different office) which would not in
the sole opinion of such party impose any cost on such affected party for which
it is not reimbursed by the Borrower or be otherwise disadvantageous to such
affected party.

(h) The agreements and obligations of the Borrower contained in this
Section 2.14.2 shall survive the payment in full of the Obligations and the
termination of this Credit Agreement.

2.15 Additional Provisions Regarding Credit Facility and Loans.

2.15.1 Lockbox Arrangements; Flow of Funds Account. (a) The Borrower shall
establish and maintain with the Lockbox Bank lockbox arrangements (the
"Lockboxes") satisfactory to the Agent and the Lockbox Bank and shall instruct
all account debtors on the Accounts of the Borrower arising after the date
hereof to remit all payments to the Lockboxes. All amounts received by the
Borrower from any account debtor with respect to Accounts shall upon receipt be
deposited into a special account maintained by the Borrower with the Lockbox
Bank (the "Lockbox Account"). The Borrower, the Agent and the Lockbox Bank
shall enter into an agreement, substantially in the form of Exhibit H, with
respect to such lockbox arrangement (the "Lockbox Agreement"). Neither the

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Borrower nor any Subsidiary shall establish any lockbox arrangement with any
Person other than the Lockbox Bank.

(b) Upon the terms and subject to the conditions set forth herein and in
the Lockbox Agreement, all available amounts held in the Lockbox Accounts shall
be remitted by the Lockbox Bank in accordance with the Borrower's instructions;
provided, however, that if the Agent determines, or is advised by the Borrower
or any Lender, that a Default has occurred, the Agent may, so long as such
Default is continuing and has not been remedied or waived, instruct the Lockbox
Bank to wire directly to the Agent Account all funds then held or thereafter
deposited in the Lockbox Account.

(c) The Borrower may use amounts in the Borrower's Corporate Account and
the Disbursement Account for its general corporate purposes; provided that if
the Agent determines or is advised by any Lender that a Default has occurred,
the Agent (on behalf of itself, the Lender and the Issuing Banks), upon notice
to BOT Trust Company, shall have sole dominion and control over the Borrower's
Corporate Account and Disbursement Account so long as such Default is
continuing and has not been remedied or waived, and may direct BOT Trust
Company to transfer all funds then or thereafter held therein to the Agent
Account (and the Borrower shall thereupon cease to have any authority with
respect to the Borrower's Corporate Account or the Disbursement Account or any
amounts on deposit therein). The Agent, the Borrower and BOT Trust Company (and
any other bank at which a Disbursement Account or a Corporate Account is
hereafter maintained by the Borrower) shall enter into an agreement,
substantially in the form of Exhibit I (the "Tripartite Agreement") to reflect
and give effect to the foregoing.

(d) Unless the Borrower shall specify a different order of applications to
the Obligations, the Agent shall apply all funds received each day in the Agent
Account to pay, first, the principal balance of Swingline Loans, next, the
principal balance of the Revolving Loans, next, all accrued interest on the
Swingline Loans, next accrued interest on the Revolving Loans and, next, to the
extent of any Outstanding Credit, for deposit in the LOC Cash Collateral
Account; provided that after the occurrence and during the continuance of a
Default all such funds shall be applied to pay all Fees and Expenses, accrued
but unpaid interest, principal or for deposit in the Cash Collateral Account in
any order determined by the Agent in its sole discretion.

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2.15.2 Determination of Borrowing Base. The Agent may, but shall not be
required to, rely on the most current Borrowing Base Certificate and any other
schedule or reports delivered to the Agent in connection herewith in
determining the amount of the Borrowing Base and the qualification of Accounts
and Inventory as Eligible Accounts Receivable and Eligible Inventory. However,
the Agent may, in its Permitted Discretion (i) establish or increase reserves
against Eligible Accounts Receivable and Eligible Inventory, (ii) reduce the
Receivable Advance Rate and/or the Inventory Advance Rate and (iii) increase
the standards of eligibility hereunder for Eligible Accounts Receivable and/or
Eligible Inventory, but the Agent will give the Borrower ten (10) days' prior
written notice thereof.

2.15.3 Several Obligations. The failure of any Lender to make the Loan to
be made by it as part of any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Loan on the date of such Borrowing,
but no Lender shall be responsible for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any Borrowing.

2.15.4 Sharing of Payments, Etc. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) on account of Revolving Loans owing to it or its Swingline
Participation or LOC Participation (other than pursuant to Section 2.6.3 or
2.14), in excess of its Proportionate Share of payments on account of Revolving
Loans, LOC Participations and Swingline Participations obtained by all the
Lenders, such Lender shall forthwith purchase from the other Lenders such
participations in the Revolving Loans, LOC Participation and Swingline
Participation owing to them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Each Lender
holding such participation in another Lender's Loans, LOC Participation or
Swingline Participation shall be deemed the holder of such Loans for all
purposes hereof. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.15.4 may, to the
fullest

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extent permitted by law, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.

2.15.5 Pro Rata Treatment. Except to the extent otherwise provided herein,
(i) each Borrowing of Revolving Loans shall be requested from the Lenders, pro
rata, according to their respective Proportionate Shares, (ii) each termination
or reduction of the Credit Facility shall be applied to the respective
Commitments of the Lenders pro rata according to their respective Proportionate
Shares and (iii) each payment or prepayment by the Borrower of principal or
interest of any Revolving Loan shall be made for the account of the Lenders,
pro rata, according to their respective Proportionate Shares.

2.15.6 Defaulting Lenders. Notwithstanding anything contained herein to the
contrary, so long as any Lender shall be in default in its obligation to fund
its Proportionate Share of any Borrowing or participation in any Swingline
Loans or Unpaid LOC Reimbursement Obligation or shall have rejected its
Commitment, such Defaulting Lender shall not be entitled to receive any
payments of principal of or interest on its Loans (including the sharing of
any payment pursuant to Section 2.15.4 or its share of any fees payable
hereunder, and for purposes of voting or consenting to matters with respect to
the Credit Documents, such Defaulting Lender shall be deemed not to be a
"Lender" hereunder and such Lender's Commitment shall be deemed to be zero (0),
unless and until (x) the Loans and all interest thereon have been paid in full,
(y) such Defaulting Lender's failure to fulfill its obligation to fund is cured
and such Defaulting Lender shall have paid, as and to the extent provided in
this Credit Agreement, to the applicable party, if any, interest on the amount
of funds that such Lender failed to timely fund or (z) the Obligations under
this Agreement shall have been declared or shall have become immediately due
and payable. No Commitment or any Lender shall be increased or otherwise
affected by any such failure or rejection by any Defaulting Lender. Any payments
of principal, interest or fees which would, but for this paragraph, be paid to
any Defaulting Lender, shall be paid to the first, to the Agent, to the extent
of any amounts owing by such Defaulting Lender to the Agent hereunder, next to
the Swingline Lender to the extent of amounts owing by such Defaulting Lender
to the Swingline Lender hereunder, next to each Issuing Bank to the extent of
amounts owing by such Defaulting Lender to such Issuing Bank hereunder and next
to all other Lenders who shall not be in default under their respective

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Commitments, for application to the Loans or to provide cash collateral in such
manner and order as shall be determined by the Agent.

ARTICLE 3. Conditions Precedent.

3.1 Conditions to Initial Loans. The obligation of each Lender to make its
initial Loan hereunder is subject to the satisfaction of the following
conditions precedent;

(a) Effective Date. The Effective Date shall have occurred.

(b) No Material Adverse Change. (i) Since March 31, 1995, no change,
occurrence, event or development or event involving a prospective change,
which in each case is reasonably likely to have a Material Adverse Effect
shall have occurred and be continuing, in each case as determined by the
Agent and each Lender in its sole discretion, and (ii) on or prior to the
Closing Date, there shall not have occurred a substantial impairment of
the financial markets generally which, in the opinion of the Agent and the
Lenders, has materially and adversely affected the transactions
contemplated hereby.

(c) Corporate and Legal Proceedings. All corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Credit Agreement and the other Credit
Documents shall be reasonably satisfactory in form and substance to the
Agent, and the Agent shall have received all information and copies of all
certificates, documents and papers, and any other records of corporate
proceedings and governmental approvals, if any, which the Agent reasonably
may have requested in connection therewith, such documents and papers,
where appropriate, to be certified by proper corporate or governmental
authorities.

(d) Availability. After giving effect to all Loans to be made, and
all Facility Letters of Credit to be issued, on the Closing Date, the
Availability on the Closing Date shall be at least $25,000,000.

(e) BTCC Credit Facilities. All of the Borrower's obligations under
the BTCC Credit Agreement shall have been fully satisfied (or shall be so
satisfied with the proceed of the initial Loans hereunder, and terminations
and releases (including UCC termina-

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tion statements) of all Liens and security interests granted in connection
therewith, satisfactory in form and substance to the Agent, shall have been
delivered to the Agent.

(f) Consents and Approvals. Except for (i) the filing of UCC
financing statements and termination statements, (ii) consents or
authorizations which have been obtained or filings which have been made,
and which in either case are in full force and effect or (iii) consents,
authorizations and filings the failure to obtain or make which could not
reasonably be expected to have a Material Adverse Effect, no consent or
authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person shall be required in connection
with the Borrowings or issuance of Letters of Credit hereunder, the grant
of the Liens pursuant to the Credit Documents, the consummation of the
Refinancing or the execution, delivery, performance, validity or
enforceability of this Credit Agreement, the Notes or the other Credit
Documents.

(g) Due Diligence. The Agent and the Lenders shall have completed
their due diligence inspection, testing and review of the assets and
liabilities of the Borrower and shall be satisfied with the results thereof
in all respects.

(h) Fees and Expenses. The Agent, the Lockbox Bank and the Lenders
shall have received payment in full of the Fees, the Expenses and all other
fees and expenses (or an irrevocable authorization to pay such fees out of
the proceeds of the Loans) referred to in the Commitment Letter or the Fee
Letter and in Section 2.9 which are payable to them on or before the
Closing Date.

(i) Termination of BTCC Lockbox Arrangements. The Agent shall have
received evidence satisfactory to it that all lockbox arrangement
established pursuant to the BTCC Credit Agreement have been terminated,
that the Lockbox Bank has access to the lockboxes established pursuant
thereto and that all funds held in lockbox accounts established pursuant
to the BTCC Credit Agreement have been or will be transferred to the
Lockbox Account.

(j) Closing Documents. The Agent shall have received each of the
following items, in form and substance satisfactory to the Agent or in the
form specified below:

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(i) Notes. Notes duly executed by the Borrower, payable to the order of
each Lender in the amount of such Lender's Commitment.

(ii) Security Agreement. The Security Agreement duly executed by the
Borrower.

(iii) UCC Financing Statements. UCC financing statement duly executed by
the Borrower with respect to the Collateral and in proper form for filing in
each jurisdiction specified by the Agent and that all taxes and other amounts
payable with respect to such filings have been paid.

(iv) UCC Termination Statements. UCC termination statements with respect
to (x) all UCC financing statements filed with respect to the liens granted
under the BTCC Credit Agreement and (ii) any other UCC financing statements
filed against the Borrower (other than UCC financing statements relating to
Permitted Liens and which do not cover to any item of Collateral).

(v) UCC Search. Certified copies of Requests for Information (Form
UCC-11), or equivalent reports, each of a recent date, listing all effective
financing statements that name the Borrower as debtor and that are filed in the
jurisdictions specified in clause (iii) above, together with copies of such
financing statements (none of which shall cover the Collateral except those
with respect to which appropriate termination statements executed by the
secured lender thereunder have been delivered to the Agent).

(vi) Tax and Judgment Lien Search. Tax lien and judgment lien search
reports as of a recent date showing that no tax liens or judgment lien, have
been filed against the Borrower in any jurisdiction specified by the Agent.

(vii) Acknowledgement Agreements. Acknowledgement Agreements signed by
each lessor or warehouseman listed in Schedule 4.3 (other than those shown on
said Schedule as not delivering an Acknowledgment Agreement on the Closing
Date).

(viii) BTCC Payoff Letter. A letter or certificate signed by BTCC as to
the amount required

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to pay in full all outstanding BTCC Credit Facilities.

(ix) Notice of Authorized Persons. The notice specified in Section
2.4.1(c) setting forth the names and specimen signatures of each officer
and employee as the Borrower authorized to request Loans hereunder on
behalf of the Borrower.

(x) Notice of Borrowing. A Notice of Borrowing duly completed and
signed by the Borrower.

(xi) Borrowing Base Certificate. A Borrowing Base Certificate, duly
certified by the chief executive officer or chief financial officer of the
Borrower, as of May 31, 1995.

(xii) Lockbox Agreement. The Lockbox Agreement duly executed by the
Borrower and the Lockbox Bank.

(xiii) Tripartite Agreement. The Tripartite Agreement duly executed
by the Borrower and BOT Trust Company.

(xiv) Charter. A copy of the Borrower's Articles of Incorporation as
in effect on the Closing Date, certified by the Borrower's Secretary.

(xv) By-laws. A copy of the By-laws of the Borrower as in effect on
the Closing Date, certified by the Borrower's Secretary.

(xvi) Good Standing Certificates. Certificates of the Secretary of
State of Florida as to the Borrower's due incorporation and good standing
in said state, and Certificates of the Secretary of State of each
jurisdiction in which the Borrower is qualified to do business as to the
Borrower's due qualification and good standing as a foreign corporation in
each such jurisdiction, such certificates to be dated as of a date close to
the Closing Date.

(xvii) Officer's Certificate; Resolutions. A certificate substantially
in the form of Exhibit J, signed by the Secretary or an Assistant Secretary
of the Borrower, together with copies of resolutions of the Borrower's
board of

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directors referred to therein approving the execution, delivery and performance
by the Borrower of this Credit Agreement and the other Credit Documents, the
Refinancing and the other transactions contemplated hereby.

(xviii) Compliance Certificate. A certificate signed by the chief
executive officer or chief financial officer of the Borrower, substantially in
the form of Exhibit K hereto.

(xix) Solvency Certificate. A certificate signed by the chief executive
officer or the chief financial officer of the Borrower, substantially in form
of Exhibit L hereto.

(xx) Environmental Letter. A copy of the Environmental Report.

(xxi) Opinions of Borrower's Counsel. An opinion of Trenam, Kemker,
Scharf, Barkin, Frye, ▇'▇▇▇▇▇ & ▇▇▇▇▇▇, P.A., Florida counsel to the Borrower,
substantially in the form of Exhibit M-1, and an opinion of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
special New York counsel to the Borrower, substantially in the form of Exhibit
M-2, which opinions shall also cover such other matters as the Agent shall
reasonably specify.

(xxii) Opinions of Local Counsel. Opinions of local counsel for the Agent
in Florida, Louisiana, North Carolina and Tennessee, in form and substance
satisfactory to the Agent, as to such matters as the Agent shall reasonably
specify.

(xxiii) Budget. A Budget for the fiscal year beginning April 1, 1995.

(xxiv) Insurance Certificates. Certificates as to the insurance policies
maintained by the Borrower.

(xxv) First Mortgage Indenture. A copy of the First Mortgage Indenture as
in effect on the Closing Date, certified by the Secretary of the Borrower.

(xxvi) Existing Debenture Indenture. A copy of the Existing Debenture
Indenture as in effect on the Closing Date, certified by the Secretary of the
Borrower.

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(xxvii) Subordinated Notes. Copies of the Subordinated Notes as
in effect on the Closing Date, certified by the Secretary of the
Borrower, together with a confirmation from BOT, as holder of the
Subordinated BOT Note, that the Obligations of the Borrower hereunder
constitute "Senior Debt" for purposes of the Subordinated BOT Note.

(xxviii) IRB Indentures. A copy of each Indenture, as in effect
on the Closing Date, for each issue of the Industrial Revenue Bonds
with respect to which a Facility Letter of Credit is to be issued,
certified by the Secretary of the Borrower.

(xxix) Auditor Notification. A letter from the Borrower to the
Auditor authorizing the Auditor to communicate with the Agent as
provided in Section 5.7.

(k) Additional Documents. The Borrower shall have executed and
delivered to the Agent and the Lenders all documents which the Agent or
any Lender reasonably request with respect to this Credit Agreement, the
Refinancing and the lending arrangements contemplated hereby.

3.2 Conditions to Issuance of Letters of Credit. No Issuing Bank shall be
obligated to issue any Facility Letter of Credit if the Closing has not occurred
or if at the time of such requested issuance the Issuing Bank determines or is
advised by any Lender or the Agent that:

(a) Any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Facility Letter of Credit or any Lender from
acquiring a participation therein or any requirement of law applicable to
such Issuing Bank or any Lender or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over such Issuing Bank or any Lender shall prohibit, or direct such Issuing
Bank to refrain from, or otherwise prevent the issuance of letters of
credit generally or such Facility Letter of Credit in particular or any
Lender from acquiring a participation therein or shall impose upon such
Issuing Bank or such Lender with respect to that Facility Letter of Credit
or such Lender's participation therein any restriction or unreimbursed
reserve

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requirement not in effect on the Closing Date or any unreimbursed cost or
expense which was not applicable on or as of the Closing Date and which
such Issuing Bank or such Lender in good ▇▇▇▇▇ ▇▇▇▇▇ materially adverse to
it; or

(b) any Lender is a Defaulting Lender hereunder unless the Agent and
the Issuing Banks have entered into satisfactory arrangements with the
Borrower to eliminate the Issuing Banks' risk with respect to such
Defaulting Lender, including cash collateralization of such Lender's
Proportionate Share of such Facility Letter of Credit.

3.3 Condition to Swingline Loans. The Swingline Lender shall not be
obligated to make any Swingline Loan if any Lender is a Defaulting Lender
hereunder unless the Agent and the Borrower have entered into satisfactory
arrangements with the Borrower to eliminate the Swingline Lender's risk with
respect to such Defaulting Lender.

3.4 Conditions to Each Credit Event. (a) In addition to the conditions set
forth in Sections 3.1 with respect to the initial Loans hereunder and the
conditions set forth in Sections 3.2 and 3.3 above with respect to any Credit
Event, the obligation of each Lender to make a Loan hereunder (other than a
Refunding Loan) and the obligation of any Issuing Bank to issue a Facility
Letter of Credit hereunder shall be subject to the condition that on the Credit
Date for such Credit Event, both before and after giving effect thereto and to
the application of the proceeds thereof, the following statements shall be true
to the satisfaction of the Agent (and if so requested by the Agent, the Borrower
shall deliver to the Agent a certificate of the chief executive office or chief
financial officer of the Borrower that such statements are true):

(i) the representations and warranties contained in this Credit
Agreement and any other Credit Document are true and correct in all
material respects on and as of the date of such Loan or issuance of such
Facility Letter of Credit as though made on and as of such date, except to
the extent that such representations and warranties expressly relate solely
to an earlier date (in which case such representations and warranties shall
have been true and accurate on and as of such earlier date);

(ii) no event has occurred and is continuing, or would result from
such Loan or the issuance of such Facility Letter of Credit or the
application of the

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proceeds thereof, which would constitute a Default under this Credit
Agreement;

(iii) no circumstance, development or event has occurred and is
continuing as of the Credit Date for such Loan or Letter of Credit which
has had or could reasonably be expected to have a Material Adverse effect;

(iv) there is not pending or threatened by or against the Borrower or
any Subsidiary any litigation, contested claim, investigation, arbitration
or governmental proceeding which, if adversely determined, could reasonably
be expected to have a Material Adverse Effect;

(v) there has occurred no material adverse change in the financial
condition or results of operations of the Consolidated Entity from that
reflected in the Financial Statements of the Borrower referred to in
Section 4.6; and

(vi) with respect to the Issuance of any Facility Letter of Credit,
none of the events set forth in Section 3.2 has occurred and is continuing
or would result from the issuance of such Facility Letter of Credit.

(b) Each request for Loans (other than a Refunding Loan) or for the
issuance of a Facility Letter of Credit, and the acceptance by the Borrower of
the proceeds of such Loan or the issuance of such Facility Letter of Credit,
shall constitute a representation and warranty by the Borrower that on the date
of such Loan or issuance of such Letter of Credit, before and after giving
effect thereto and to the application of the proceeds therefrom, the statements
set forth in clauses (i) through (vi) in Section 3.4(a) above are true unless
the Borrower specifies otherwise in its request for such Loan or Facility
Letter of Credit.

ARTICLE 4. Representations and Warranties.

In order to induce the Lenders and the Issuing Banks to enter into this
Credit Agreement and to make available the credit facilities contemplated
hereby, the Borrower hereby represents and warrants to the Lenders, the Issuing
Banks, and the Agent as follows (which representations and warranties shall
survive, the execution and delivery of this Credit Agreement and the other
Credit Documents

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and the making of the Loans and the issuance of Facility Letters of Credit):

4.1 Organization and Qualification; Subsidiaries.

(a) The Borrower (i) is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation, (ii) has the
power and authority to own its properties and assets and to transact the
businesses in which it is presently, or proposes to be, engaged and (iii) is
duly qualified and is authorized to do business and is in good standing in every
jurisdiction in which the failure to be so qualified could reasonably be
expected to have a Material Adverse Effect. Schedule 4.1 contains a correct and
complete list of all jurisdictions in which the Borrower is qualified to do
business as a foreign corporation on the Closing Date.

(b) On the date hereof the Borrower has no Subsidiaries. If at any time
hereafter the Borrower shall, to the extent permitted by Section 6.19, acquire
or establish any Subsidiary such Subsidiary will be a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, (ii) have the power and authority to own its properties and
assets and to transact the businesses in which it is engaged and (iii) be duly
qualified and be authorized to do business and in good standing in every
jurisdiction in which the failure to be so qualified could reasonably be
expected to have a Material Adverse Effect.

4.2 Solvency. On and as of the Closing Date on a pro forma basis after
giving effect to the Refinancing and all Indebtedness incurred and to be
incurred, and Liens created and to be created, by the Borrower in connection
with this Credit Agreement, (x) the sum of the assets, at a fair valuation, of
the Borrower taken as a whole will exceed its debts, (y) the Borrower will not
have incurred nor intended to, or believe that it will, incur debts beyond its
ability to pay such debts as such debts mature and (z) the Borrower does not
have unreasonably small capital with which to conduct its businesses. For
purposes of this Section 4.2, "debt" means any reasonably expected liability on
a claim, and "claim" means (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed,

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contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

4.3 Liens; Inventory. After giving effect to the Refinancing, there are no
Liens in favor of third parties with respect to any of the Collateral,
including, without limitation, with respect to the Inventory, wherever located,
except Permitted Liens. Except as disclosed in Schedule 4.3, no lessor or
warehousemen of the Borrower or any Subsidiary has been granted any Lien with
respect to the Inventory maintained by the Borrower or any Subsidiary at the
property of any such lessor or warehousemen. Upon the proper filing of UCC
financing statements with the appropriate filing or recordation offices in each
of the jurisdictions listed in Schedule 4.3, the security interests granted
pursuant to the Credit Documents shall constitute the valid and enforceable
first, prior and perfected Liens on the Collateral. The Borrower is the
absolute owner of the Collateral with full right to pledge, sell, assign,
consign, transfer and create a Lien therein, free and clear of any and all
Liens in favor of third parties, except Permitted Liens. Prior to the
Expiration Date, the Borrower will at its expense warrant and, at the Agent's
request, defend the Collateral from any and all Liens of any third party.

4.4 No Conflict. The execution and delivery by the Borrower of this Credit
Agreement and the other Credit Documents and the performance by the Borrower of
the Obligations hereunder and thereunder and the consummation by the Borrower of
the transactions contemplated hereby; (i) are within the corporate power of the
Borrower; (ii) are duly authorized by the Board of Directors of the Borrower
and, if necessary, its stockholders; (iii) are not in contravention of the terms
of the Articles or Certificate of Incorporation or By-Laws of the Borrower or
any Subsidiary, or of any indenture, contract, lease, agreement, instrument or
other commitment to which the Borrower or any Subsidiary are a party or by which
the Borrower or any Subsidiary or any of their respective properties are bound,
except where such contravention would not have a Material Adverse Effect; (iv)
do not require the consent, registration or approval of any governmental entity
or any other Person (except such as have been duly obtained, made or given, and
are in full force and effect); (v) do not contravene any statute, law,
ordinance, regulation, rule, order or other governmental restriction, or any
writ, order, injunction or decree of any court, applicable to or binding upon
the Borrower or any Subsidiary; and (vi) will not, except as contemplated
herein, result in the imposition of any Liens upon any property of the Borrower
or any Subsidiary under any

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indenture, mortgage, deed of trust, loan or credit agreement or other material
agreement or instrument to which either of the Borrower or any Subsidiary is a
party or by which they or any of their property may be bound or affected.

4.5 Enforceability. The Credit Agreement and all of the other Credit
Documents have been duly executed and delivered by the Borrower and constitute
the legal, valid and binding obligations of the Borrower, and the Credit
Documents, if any, executed and delivered by any Subsidiary constitute legal,
valid and binding obligations at such Subsidiary, and are enforceable against
the Borrower and such Subsidiaries, as the case may be, in accordance with
their respective terms except as such enforceability may be limited by (i) the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and (ii) general principles
of equity.

4.6 Financial Statements. The Borrower has furnished to the Lenders the
following financial statements of the Borrower: (i) balance sheet as of, and
statements of operations, shareholder's equity and cash flows for the fiscal
year ended, March 31, 1994 audited by Deloitte & Touche and (ii) an unaudited
balance sheet as of, and unaudited statements of operations, shareholder's
equity and cash flows for the period ending, December 31, 1994. Said financial
statements were prepared in accordance with GAAP consistently applied throughout
the periods involved and fairly present the financial condition of the Borrower
as at said dates and the results of the operations of the Borrower for the
periods ended on such dates. Since the date of said financial statements there
have been no changes in the condition, financial or otherwise, of the Borrower
as shown on the balance sheets of the Borrower described above, except for
changes in the ordinary course of business (none of which individually or in
the aggregate has been materially adverse).

4.7 Locations of Offices, Records and Inventory. On the date hereof, the
Borrower's principal place of business and chief executive office are both
located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and the books and
records of the Borrower and all chattel paper and all records of Accounts are
located at the principal place of business and chief executive office of the
Borrower or at the locations listed on Schedule 4.7. On the date hereof, there
is no location in which the Borrower or any of its Subsidiaries have any
Inventory (except for Inventory in transit) other than those locations listed
on Schedule 4.7. Schedule 4.7 also contains a true, correct and complete

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list, as of the date hereof of (i) the legal names and addresses of each
warehouseman and lessor at whose warehouse or premises Inventory is stored,
(ii) the address of the chief executive offices and principal place of business
of the Borrower and (iii) the address of all offices where records and books of
account of the Borrower are kept. None of the receipts received by the Borrower
from any warehouseman states that the goods covered thereby are to be delivered
to bearer or to the order of a named person or to a named person and such named
person's assigns.

4.8 Names of Borrower or Predecessors. Except as set forth in Schedule 4.8
or as otherwise notified to the Agent in writing pursuant to Section 5.10,
during the five (5) years preceding the date hereof (i) neither the Borrower
nor any of the Subsidiaries has used any corporate, fictitious or assumed name
or tradename other than the corporate name shown on the Borrower's or such
Subsidiary's Articles or Certificate of Incorporation and (ii) the Borrower did
not merge or consolidate with any corporation other than Atlas Steel & Wire
Corporation and ▇▇▇▇▇▇▇▇ Rail Products, Inc.

4.9 No Judgments or Litigation. Except with respect to environmental
matters, which are covered in Section 4.14 or as set forth on Schedule 4.9 or
as otherwise disclosed by the Borrower to Agent in writing, no judgments,
orders, writs, decrees or arbitration awards are outstanding against the
Borrower or any Subsidiaries nor is there now pending or, to the best of the
Borrower's knowledge after diligent inquiry, threatened in writing any
litigation, contested claim, investigation, arbitration, or governmental
proceeding by or against the Borrower or any of the Subsidiaries except
judgments and pending or threatened litigation, contested claims and
governmental proceedings which, if adversely determined, would not reasonably
be expected to have a Material Adverse Effect.

4.10 No Defaults. After giving effect to the transactions contemplated
herein, except as set forth on Schedule 4.10, neither the Borrower nor any of
the Subsidiaries is in default under any term of any indenture, contract,
lease, agreement, instrument or other commitment to which any of them is a
party or by which any of them is bound which default could reasonably be
expected to have a Material Adverse Effect. The Borrower knows of no dispute
regarding any indenture, contract, lease, agreement, instrument or other
commitment which would individually, or when aggregated with other such
disputes, be reasonably likely to have a Material Adverse Effect.

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4.11 Labor Matters. (a) There are no controversies pending or, to the best
of the Borrower's knowledge after diligent inquiry, threatened between the
Borrower or any of the Subsidiaries and any of their respective employees,
other than employee grievances arising in the ordinary course of business which
would not, in the aggregate, be reasonably likely to have a Material Adverse
Effect.

(b) Neither the Borrower nor any Subsidiary is engaged in any unfair labor
practice. There is (i) no material unfair labor practice complaint pending
against the Borrower or any Subsidiary or, to the best knowledge of the
Borrower, threatened against any of them, before the National Labor Relations
Board, and no material grievance or significant-arbitration proceeding arising
out of or under collective bargaining agreements is pending against the
Borrower or any Subsidiary or, to the best knowledge of the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against the Borrower or any Subsidiary or, to the best
knowledge of the Borrower, threatened against any of them and (iii) no union
representation question with respect to the employees of the Borrower or any
Subsidiary and no union organizing activities.

4.12 Compliance with Law. Except with respect to environmental matters,
which are covered in Section 4.14 hereof, and except as set forth on Schedule
4.12, neither the Borrower nor any Subsidiary has violated or failed to comply
with any statute, law, ordinance, regulation, rule or order of any foreign,
federal, state or local government or any other governmental department or
agency, or any judgment, decree or order of any court, applicable to its
business or operations except where the aggregate of all such violations or
failures to comply would not reasonably be likely to have a Material Adverse
Effect. The conduct of the business of the Borrower and each Subsidiary is in
conformity with all applicable securities, commodities, energy, public utility,
zoning, building code, and all other applicable foreign, federal, state and
local governmental and regulatory requirements, except where the aggregate of
all such non-conformities would not reasonably be likely to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary has received any notice
to the effect that it is not in compliance with, and neither the Borrower nor
any Subsidiary has any reason to anticipate that any presently existing
circumstances are likely to result in the violation of, any such statute, law,
ordinance, regulation, rule, judgment, decree or order, which failure or
violation would have a Material Adverse Effect.

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4.13 ERISA. (a) None of the Borrower, any Subsidiary and any ERISA
Affiliate maintains or contributes to any Plan other than those listed on
Schedule 4.13 or those disclosed to the Agent in writing after the date hereof.
Each Plan has been and is being maintained and funded in accordance with its
terms and in compliance with all provisions of ERISA and the IRC applicable
thereto except to the extent that failure to do any of the foregoing would not
result in a Material Adverse Effect or a liability or potential liability by
the Borrower exceeding in the aggregate $1,000,000. The Borrower does not
contribute to, or have any liability with respect to, a Multiemployer Plan. The
Borrower, each Subsidiary and each ERISA Affiliate (i) have fulfilled all
obligations related to the minimum funding standards of ERISA and the IRC for
each Plan, (ii) except where noncompliance would not have a Material Adverse
Effect or result in a liability or potential liability by the Borrower
exceeding $1,000,000 are in compliance in all material respects with the
currently applicable provisions of ERISA and of the IRC and have not incurred
any liability (other than routine liability for premiums) under Title IV of
ERISA. No Termination Event has occurred nor has any other event occurred that
is reasonably likely to result in a Termination Event. No event or events have
occurred in connection with which the Borrower, any Subsidiary, any ERISA
Affiliate, any fiduciary of a Plan or any Plan, directly or indirectly, is
reasonably likely to be subject to any material liability, individually or in
the aggregate, under ERISA, the IRC or any other law, regulation or
governmental order or under any agreement, instrument, statute, rule of law or
regulation pursuant to or under which any such entity has agreed to indemnify or
is required to indemnify any person against liability incurred under, or for a
violation or failure to satisfy the requirements of, any such statute,
regulation or order. The aggregate amount of the Unfunded Current Liabilities
of all Benefit Plans does not exceed $1,000,000.

(b) True, correct and complete copies of the following documents have been
delivered by the Borrower to the Agent: (i) the most recent determination
letter issued by the Internal Revenue Service with respect to each Plan; (ii)
for the most recent plan year, the Annual Report on Form 5500 Series required
to be filed with any governmental agency for each Plan. The aggregate amount of
the most recent annual payments made to former employees of the Borrower or any
ERISA Affiliate under any Retiree Health Plan prior to the date hereof is
$455,614.

4.14 Compliance with Environmental Laws. Except as disclosed in Schedule
4.14 hereto, or except as would

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not, in the aggregate, reasonably be expected to have a Material Adverse
Effect: (i) the operations of the Borrower and each Subsidiary comply with all
applicable Environmental Laws; (ii) the Borrower has not received written
notice that any of the operations of the Borrower or any Subsidiary is the
subject of any judicial or administrative proceeding alleging the violation of
any Environmental Laws; (iii) none of the operations of the Borrower or any
Subsidiary is the subject of any federal or state investigation, of which the
Borrower has knowledge or reasonably should have knowledge, evaluating whether
the Borrower or any Subsidiary disposed of any Hazardous Substances at any site
that may require remedial action to respond to a release of any Hazardous
Substances into the environment; (iv) neither the Borrower nor any Subsidiary
has filed any notice under any federal or state law indicating past or present
treatment, storage or disposal of a hazardous waste or reporting a spill or
release of a Hazardous Substance into the environment; (v) neither the
Borrower nor any Subsidiary has any contingent liability of which the Borrower
has knowledge or reasonably should have knowledge in connection with any
release of any Hazardous Substance into the environment, nor has the Borrower
or any Subsidiary received any written notice alleging potential liability
arising from the disposal of any Hazardous Substance into the environment; and
(vi) neither the nature of the Borrower's businesses and operations nor the
use, operation or condition of its properties have changed in any material
respect from that in effect as of the date of the Environmental Report.

4.15 Intellectual Property. The Borrower possesses adequate licenses,
patents, patent applications, copyrights, service marks, trademarks and trade
names to continue to conduct its business as theretofore conducted by it.

4.16 Licenses and Permits. Except as previously disclosed in writing to the
Lenders or except as would not reasonably be expected to have a Material Adverse
Effect, the Borrower and each of its Subsidiaries have obtained and hold all
material franchises, licenses, leases, permits, certificates, authorizations,
qualifications, easements, rights of way and other rights and approvals which
are necessary for the operation of their businesses as presently conducted and
as proposed to be conducted, all of which are in full force and effect. Neither
of the Borrower nor any of the Subsidiaries is in violation of the terms of any
such franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval in any such case which
would reasonably be expected to have a Material Adverse Effect.

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4.17 Title to Property. Except as set forth on Schedule 4.17, each of the
Borrower and its Subsidiaries has (i) good and marketable fee simple title to
or valid leasehold interests in all of its real property and (ii) good and
marketable title to all of its other property (including, without limitation,
all real and other property in each case as reflected in the Financial
Statements referred to in Section 4.6 or delivered to the Agent pursuant to
Section 5.1), other than properties disposed of in the ordinary course of
business or in any manner otherwise permitted under this Credit Agreement since
the date of the most recent audited balance sheet of the Consolidated Entity, as
the case may be, and in each case subject to no Liens other than those
Permitted Liens.

4.18 Investment Company. Neither the Borrower nor any Subsidiary is (i)
an investment company or a company controlled by an investment company within
the meaning of the Investment Company Act of 1940, as amended, (ii) a holding
company or a Subsidiary company of a holding company, or an affiliate of a
holding company or of a Subsidiary company of a holding company, within the
meaning of the Public Utility Holding Company Act of 1935, as amended, or (iii)
subject to any other law which purports to regulate or restrict its ability to
borrow money or to consummate the transactions contemplated by this Credit
Agreement or the other Credit Documents or to perform its obligations hereunder
or thereunder.

4.19 No Event of Default. No Default has occurred and is continuing.

4.20 Taxes and Tax Returns. (a) Except as set forth on Schedule 4.20 or as
otherwise disclosed in writing to the Agent, the Borrower and the Subsidiaries
or any affiliated group of which the Borrower or any of the Subsidiaries are
now or have been members) has timely filed (inclusive of any permitted
extensions) with the appropriate taxing authorities all returns (including
without limitation, information returns and other material information) in
respect of taxes required to be filed through the date hereof and will timely
file (inclusive of any permitted extensions) any such returns required to be
filed on and after the date hereof. The information filed is complete and
accurate in all material respects. Except as specified in Schedule 4.20 or as
otherwise disclosed in writing to the Agent, neither the Borrower nor any
Subsidiary, nor any group of which the Borrower or any Subsidiary is now or was
a member, has requested any extension of time within which to file returns
(including without limitation information returns) in respect of any taxes.

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(b) All taxes, assessments, fees and other governmental charges payable by
the Borrower or any Subsidiary in respect of periods beginning prior to the
date hereof, have been timely paid, or will be timely paid, or an adequate
reserve has been established therefor, and neither the Borrower nor any of the
Subsidiaries has any material liability for taxes in excess of the amounts so
paid or reserves so established.

(c) Except as set forth in Schedule 4.20, no deficiencies for taxes have
been claimed, proposed or assessed by any taxing or other governmental
authority against the Borrower or any Subsidiary involving more than $2,000,000
in aggregate amount and no tax liens have been filed. Except as set forth in
Schedule 4.20, there are no pending or, to the best of the Borrower's
knowledge, threatened audits, investigations or claims for or relating to any
material liability in respect of taxes, and there are no matters under
discussion with any governmental authorities with respect to taxes which are
likely to result in a material additional liability for taxes. Either the
federal income tax returns of the Borrower have been audited by the Internal
Revenue Service and such audits have been closed, or the period during which
any assessments may be made by the Internal Revenue Service has expired without
waiver or extension, for all years up to and including the fiscal year ended
September 30, 1987. Except as set forth in Schedule 4.20, no extension of a
statute of limitations relating to taxes, assessments, fees or other
governmental charges is in effect with respect to the Borrower or any of its
Subsidiaries.

(d) Neither the Borrower nor any of its Subsidiaries has any obligation
under any written tax sharing agreement or agreement regarding payments in lieu
of taxes.

4.21 Recording and Stamp Taxes. All taxes (including, but not limited to,
stamp or recording taxes and recording fees) payable in connection with the
filing and recording of the Credit Documents or any instruments with respect
thereto have either been paid in full by the Borrower or arrangements for the
payment of such amounts satisfactory to the Agent have been made.

4.22 No Other Indebtedness, Status as Senior Indebtedness. After giving
effect to the Refinancing, the Consolidated Entity has no Indebtedness other
than Indebtedness permitted by Section 6.5. The Obligations of the Borrower
hereunder are permitted by, and constitute "Senior Indebtedness" as defined in,
the Existing Debenture Indenture and the Subordinated Intercompany Note, and are

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permitted by, and constitute "Senior Debt" as defined in, the Subordinated BOT
Note.

4.23 Material Contracts. Schedule 4.23 contains a true, correct and
complete list of all the Material Contracts (other than Fabricating Contracts)
in effect on the date hereof. None of the Material Contracts contains any
burdensome restrictions on the Borrower or any of its Subsidiaries or any of
their respective properties which have or could reasonably be expected to have
a Material Adverse Effect. All of the Material Contracts are in full force and
effect, and no material defaults currently exist thereunder.

4.24 Affiliate Transactions. Except as set forth on Schedule 4.24, neither
the Borrower nor any Subsidiary is a party to or bound by any agreement or
arrangement (whether oral or written) to which any Affiliate of the Borrower or
any Subsidiary is a party except (i) in the ordinary course of and pursuant to
the reasonable requirements of the Borrower's or such Subsidiary's business,
(ii) upon fair and reasonable terms no less favorable to the Borrower and such
Subsidiary than it could obtain in a comparable arm's-length transaction with
an unaffiliated Person and (iii) the Technical Assistance Agreements.

4.25 Accuracy and Completeness of Information. All factual information
heretofore, contemporaneously or hereafter furnished by or on behalf of the
Borrower or any of the Subsidiaries in writing to the Agent, any Lender, or the
Auditors for purposes of or in connection with this Credit Agreement or any
Credit Documents, or any transaction contemplated hereby or thereby is or will
be true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading at such time.
There are no facts now known to any officer of the Borrower which individually
or in the aggregate would reasonably be expected to have a Material Adverse
Effect and which have not been set forth herein, in the Financial Statements,
or in any certificate, opinion or other written statement made or furnished by
the Borrower to the Agent.

4.26 No Material Adverse Change. After March 31, 1995, there has been no
development or event nor any prospective development or event, which has had or
could reasonably be expected to have a Material Adverse Effect.

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ARTICLE 5. Affirmative Covenants.

Until termination of this Credit Agreement and payment and satisfaction of
all Obligations due hereunder and under the other Credit Documents, the
Borrower agrees that:

5.1 Financial Information. The Borrower will furnish to the Lenders the
following information within the following time periods:

(a) as soon as available and in any even within ninety (90) days after
the end of each fiscal year of the Consolidated Entity, (i) audited
Financial Statements as of the close of the fiscal year and for the fiscal
year prepared in accordance with GAAP, together with a comparison to the
Financial Statements for the prior fiscal year, in each case accompanied by
(A) an unqualified opinion of the Auditors, (B) such Auditors' "Management
Letter" to the Borrower and (C) a written statement signed by the Auditors
stating that in the course of the regular audit of the business of the
Consolidated Entity, which audit was conducted by the Auditors in
accordance with generally accepted auditing standards, the Auditors have
not obtained any knowledge of the existence of any Default under any
provision of this Credit Agreement, or, if such Auditors shall have
obtained from such examination any such knowledge, they shall disclose in
such written statement the existence of the Default and the nature thereof,
it being understood that such Auditors shall have no liability, directly or
indirectly, to anyone for failure to obtain knowledge of any such Default
or Event of Default, (ii) a narrative discussion of the consolidated
financial condition and results of operations and the consolidated
liquidity and capital resources of the Consolidated Entity for such fiscal
year prepared by the chief executive officer or chief financial officer of
the Borrower and (iii) a compliance certificate signed by the chief
executive officer or chief financial officer of the Borrower in the form of
Exhibit K along with a schedule in form satisfactory to the Agent of the
calculations used in determining, as of the end of such fiscal year, (x)
the Debt/EBITDA Ratio for such fiscal year and (y) whether the Borrower was
in compliance with the covenants set forth in Articles 5 and 6 of this
Credit Agreement for such year. To the extent that the Borrower's annual
report on Form 10-K contains any of the foregoing items, the Lenders will
accept the Borrower's Form 10-K in lieu of such items;

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(b) as soon as available and in any event within forty-five (45) days
after the end of each fiscal quarter of the Consolidated Entity (except the
last fiscal quarter of any fiscal year) (i) Financial Statements as at the
end of such period and for the fiscal year to date, together with a
comparison to the Financial Statements for the same periods in the prior
year, all in reasonable detail and duly certified (subject to normal
year-end audit adjustments) by the chief executive officer or chief
financial officer of the Borrower as having been prepared in accordance
with GAAP, (ii) a narrative discussion of the consolidated financial
condition and results of operations and the consolidated liquidity and
capital resources of the Consolidated Entity for such period and for the
fiscal year to date prepared by the chief executive officer or chief
financial officer of the Borrower, (iii) a compliance certificate in the
form of Exhibit K signed by the chief executive officer or chief financial
officer of the Borrower, along with a schedule in form satisfactory to the
Agent of the calculations used in determining, as of the end of such fiscal
quarter, (x) the Debt/EBITDA Ratio for the Rolling Period ending on the
last day of such quarter and (y) whether the Consolidated Entity was in
compliance with the covenants set forth in Articles 5 and 6 of this Credit
Agreement for such quarter. To the extent that the Borrower's quarterly
report on Form 10-Q contains any of the foregoing terms, the Lenders will
accept the Borrower's Form 10-Q in lieu of such items;

(c) as soon as available and in any event, within thirty (30) days
after the end of each of the first two months of each fiscal quarter,
within forty-five (45) days after the end of the third month of each of
the first three fiscal quarters of the fiscal year and within ninety (90)
days after the end of the last month of the fiscal year, a consolidated
balance sheet for the Consolidated Entity as at the end of such month and
for the fiscal year to date and statements of operations for such month
and for the fiscal year to date, together with a comparison to the
statements of operations for the same periods in the prior year, all in
reasonable detail and duly certified (subject to normal year-end audit
adjustments) by the chief executive officer of the Borrower as having been
prepared in accordance with GAAP;

(d) not later than ninety (90) days after the end of each fiscal year
commencing with the fiscal year ending March 31, 1996, the Budget for the
follow-

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ing fiscal year and not later than forty-five (45) days after the end of the
third fiscal quarter of each fiscal year the Forecast for the immediately
following twelve months;

(e) a copy of the state and federal income tax returns of the Borrower and
each of its Subsidiaries within thirty (30) days after they are filed with the
appropriate taxing authorities, if and when requested by any Lender;

(f) upon request by the Agent at any time and in any event within ten (10)
Business Days after the last Business Day of each month, a borrowing base
certificate (the "Borrowing Base Certificate") in substantially the form of
Exhibit N, duly completed, detailing the Eligible Accounts Receivable and
Eligible Inventory as of the last day of such month (or such other date as the
Agent may specify in such request), certified by the Borrower's chief executive
officer or chief financial officer and subject only to adjustment upon
completion of the normal year end audit of physical inventory; provided, that
if the Agent requests a Borrowing Base Certificate at any time other than the
end of any month, (i) such interim Borrowing Base Certificate will be provided
by the Borrower within five (5) Business Days after such request, (ii) such
interim Borrowing Base Certificate may only be requested as of the end of any
week and (iii) such interim Borrowing Base Certificate need not be certified by
the Borrower's chief executive officer or chief financial officer. In addition,
each Borrowing Base Certificate provided hereunder shall have attached to it
such additional schedules and/or other information as the Agent may reasonably
request;

(g) promptly and in any event within two (2) Business Days after becoming
aware of the occurrence of a Default, a certificate of the chief executive
officer or chief financial officer of the Borrower specifying the nature
thereof and the Borrower's proposed response thereto, each in reasonable detail;

(h) promptly upon the earlier of the mailing or filing thereof, copies of
all Forms ▇▇-▇, ▇▇-▇, ▇-▇, proxy statements, annual reports, quarterly
reports, registration statements and any other filings or other communications
made by the Borrower to holders of its publicly traded securities or the
Securities Exchange Commission from time to time pursuant to the Securities
Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended;
and

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(i) from time to time, such further information regarding the
Collateral, business affairs and financial condition of the Borrower and/or
each of its Subsidiaries as the Agent or any Lender (through the Agent) may
reasonably request.

5.2 Corporate Existence and Franchises. The Borrower will, and will cause
each Subsidiary to, (i) maintain its corporate existence (except that
Subsidiaries may merge with each other and, provided the Borrower is the
survivor thereof, with the Borrower) and (ii) maintain in full force and effect
all material licenses, bonds, franchise, leases, trademarks and qualifications
to do business, and all patents, contracts and other rights necessary or
desirable to the profitable conduct of its businesses, except when
noncompliance would not, in the aggregate, have a Material Adverse Effect.

5.3 Conduct of Business. The Borrower will continue in, and limit its
operations to, the same general lines of business as those presently conducted
by the Borrower and will cause each Subsidiary so to do.

5.4 ERISA. (a) The Borrower will deliver to the Agent and the Lenders, at
the Borrower's expense, the following information at the times specified below:

(i) within ten (10) Business Days after the Borrower, any Subsidiary
or any ERISA Affiliate knows or has reason to know that a Termination Event
has occurred, a written statement of the chief financial officer of the
Borrower describing such Termination Event and the action, if any, which
the Borrower or other such entities have taken, are taking or propose to
take with respect thereto, and within ten days after known, any action
taken or threatened by the IRS, DOL or PBGC with respect thereto;

(ii) within ten (10) Business Days after the Borrower, any Subsidiary
or any ERISA Affiliate knows or has reason to know that a non-exempt
prohibited transaction (as defined in Sections 406 of ERISA and 4975 of
the Internal Revenue Code) has occurred which has or may reasonably be
expected to have a Material Adverse Effect, a statement of the chief
financial officer of the Borrower describing such transaction and the
action which the Borrower or other such entities have taken, are taking or
propose to take with respect thereto;

(iii) within thirty (30) Business Days after the filing thereof with
the DOL, the Internal Revenue

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Service or the PBGC, copies of each annual report (form 5500 series),
including Schedule B thereto, filed with respect to each Benefit Plan;

(iv) within three (3) Business Days after the filing thereof with the
Internal Revenue Service, a copy of each funding waiver request filed with
respect to any Benefit Plan and all communications received by the
Borrower, any Subsidiary or any ERISA Affiliate with respect to such
request;

(v) within three (3) Business Days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of notice of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;

(vi) within ten (10) Business Days after receipt by the Borrower, any
Subsidiary or any ERISA Affiliate of any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401(a) of the Internal Revenue
Code, copies of each such letter;

(vii) within ten (10) Business Days after receipt by the Borrower,
any Subsidiary or any ERISA Affiliate of a notice regarding the imposition
of withdrawal liability, copies of each such notice;

(viii) within ten (10) Business Days after the Borrower, any
Subsidiary or any ERISA Affiliate fails to make a required installment or
any other required payment under Section 412 of the Internal Revenue Code
exceeding in the aggregate $750,000 on or before the due date for such
installment or payment, a notification of such failure;

(ix) no later than 90 days after the end of each plan year, a
calculation of the Unfunded Current Liabilities, if any, of each Benefit
Plan.

For purposes of this paragraph (a), the Borrower, any Subsidiary and any ERISA
Affiliate shall be deemed to know all facts known by the administrator of any
Plan of which such entity is the plan sponsor.

(b) The Borrower will establish, maintain and operate all Plans to
comply in all material respects with the provisions of ERISA, the Internal
Revenue Code, and all other applicable laws, and the regulations and
interpretations thereunder except to the extent that the Borrower is in good
faith contesting by appropriate proceedings the

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validity or implication of any such provision, law, rule, regulation or
interpretation or except where noncompliance would not (i) have a Material
Adverse Effect on (ii) result in a liability or potential liability exceeding
$1,000,000.

5.5 Notice of Legal Proceedings or Adverse Changes. The Borrower
will, as soon as possible, and in any event within five (5) Business Days after
the Borrower learns of the following, give written notice thereof to the Agent
and the Lenders: (i) any material proceeding(s) being instituted or threatened
to be instituted in writing by or against the Borrower or any of the
Subsidiaries in any federal, state, local or foreign court, arbitral, tribunal
or before any commission or other regulatory body (federal, state, local or
foreign), and (ii) any change, or development or event involving a prospective
change, which has had or could reasonably be expected to have a Material
Adverse Effect; provided that the Borrower shall not be required to notify the
Agent and the Lenders of industry wide or general economic changes for which
information is publicly available.

5.6 Environmental and Other Matters. (a) The Borrower and its
Subsidiaries will conduct their businesses so as to comply in all material
respects with all applicable Environmental Laws in all jurisdictions in which
any of them is doing business, except to the extent that the Borrower of any of
the Subsidiaries are contesting, in good faith by appropriate legal
proceedings, any such Environmental Law or the interpretation of application
thereof, provided that the Borrower and each of the Subsidiaries shall comply
with the applicable order of any court or other governmental agency relating to
any such contested Environmental Law unless the Borrower or the Subsidiaries
shall currently be prosecuting an appeal or proceedings for review and shall
have secured a stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for review.

(b) If the Borrower or any of the Subsidiaries shall (i) receive
written notice that any material violation of any Environmental Law may have
been committed or is about to be committed by the Borrower or any of the
Subsidiaries, (ii) receive written notice that any administrative or judicial
complaint or order has been filed or is about to be filed against the Borrower
or any Subsidiary alleging material violations of any Environmental Law or
requiring the Borrower or any Subsidiary to take any action in connection with
the release of Hazardous Substances into the environment or (iii) receive any
written notice from a federal, state, or local government agency or private
party alleging that the Borrower or any Subsidiary may be

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liable or responsible for material costs associated with a response to or
cleanup any Hazardous Substance or any damages caused thereby, the Borrower
will provide the Agent and the Lenders with a copy of such notice within
fifteen (15) days after the receipt thereof by the Borrower or any Subsidiary.
Within fifteen (15) days after the Borrower learns of the enactment or
promulgation of any Environmental Law which could reasonably be expected to
have a Material Adverse Effect, the Borrower will provide the Agent and the
Lenders with notice thereof.

(c) The Borrower will promptly take all reasonable actions necessary
to prevent the imposition of any Liens on any of its properties arising out of
or related to any Environmental Law.

(d) At the written request of the Agent, which request shall include
a reasonably specific statement of the basis thereof, but in any event not more
frequently than once in any twelve month period (unless the Agent determines
that a violation of Environmental Laws may have occurred on premises or
facilities owned or leased by the Borrower or any Subsidiary), and at the sole
cost and expense of the Borrower, the Borrower will retain an environmental
consulting firm, satisfactory to the Agent in its commercially reasonable
judgment, to conduct an environmental review, audit or investigation of the
specific items as requested by the Agent relating to the properties of the
Borrower and the Subsidiaries located in the United States and provide to the
Agent and each Lender a copy of any reports delivered in connection therewith.
At the request of the Agent, the Borrower shall provide the Agent with any
additional information relating to environmental matters and any potential
related liability resulting therefrom as the Agent may reasonably request.

5.7 Books and Records. The Borrower will maintain, and will cause
each Subsidiary to maintain, books and records pertaining to the Collateral and
to the business, assets and operations of the Borrower and its Subsidiaries, in
such detail, form and scope as is consistent with good business practice, and
will reflect in such books and records the Lenders' interest in the Accounts.
The Borrower agrees that the Agent or its agents may (a) enter upon the
premises of the Borrower or any of the Subsidiaries at any time and from time
to time during normal business hours and upon reasonable notice under the
circumstances (and at any time during all hours on and after the occurrence of
an Event of Default which has not been waived pursuant to Section 9.10), for
the purpose of (i) inspecting the Collateral and (ii) inspecting and/or copying
(at Borrower's expense) any and all records

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pertaining thereto, and (iii) verifying Eligible Accounts Receivable and/or
Eligible Inventory and (b) discuss the affairs, finances and business of the
Borrower with any officers, employees and directors of the Borrower or with the
Auditors and (c) verify Accounts with the account debtors thereon.

5.8 Changes in Location of Offices. The Borrower will give the
Agent 30 days' prior written notice of any proposed change in the location of
the Borrower's or any of its Subsidiaries' chief executive office, principal
place of business or the office at which the Borrower or such Subsidiary keeps
its records concerning its Account from that specified in Section 4.7 (or from
that to which any such location was previously changed pursuant to this Section
5.8), and prior to implementing any such proposed change the Borrower will
furnish to the Agent all UCC financing statements and other documents and
instruments specified by the Administrative to continue the Lien of the Agent
and the Lenders on the Collateral as a first and perfected senior Lien. The
Borrower shall in any event not (i) implement such proposed change if it would
cause the Agent's or the Lenders' Lien on any Collateral to cease being a first
and perfected senior Lien, or (ii) relocate its chief executive office to a
location outside the United States.

5.9 Location of Inventory. The Borrower shall keep all Inventory of
the Borrower and its Subsidiaries (other than any Inventory in transit) at the
locations specified in Schedule 4.7; provided that the Borrower and its
Subsidiaries may keep Inventory at other locations in the United States if (i)
the Borrower gives the Agent 30 days' prior written notice of its intention to
keep Inventory at any such other location and (ii) prior to implementing such
proposal the Borrower furnishes to the Agent all UCC financing statements and
other documents specified by the Agent to continue the Lien of the Agent and
the Lenders on the Inventory as a first and perfected senior Lien. The
Borrower and its Subsidiary shall not in any event keep Inventory (other than
any Inventory in transit) at any location other than the locations specified in
Schedule 4.7 if to do so would cause the Agent's or the Lenders' Lien on such
Inventory to cease being a first and perfected senior Lien.

5.10 Name Change; Trade Name. The Borrower will give the Agent 30
days' prior written notice of any proposed change in the Borrower's or any
Subsidiary's name or of any proposal by the Borrower or any Subsidiary to
conduct any business under an assumed name or trade name not theretofore
disclosed to the Agent. Prior to imple-

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▇▇▇▇▇▇▇ such proposal the Borrower will deliver to the Agent all UCC financing
statements and other instruments requested by the Agent to continue the Lien of
the Agent on the Collateral as a first perfected Senior Lien.

5.11 Adverse Change in Collateral. The Borrower will advise the Agent
promptly, in sufficient detail, of any substantial change relating to the type,
quantity or quality of the Collateral, or any event which could have a Material
Adverse Effect on the value of the Collateral or on the security interests
granted to the Lenders therein.

5.12 Collateral Records. The Borrower will execute and deliver to the
Agent from time to time, solely for the Agent's convenience in maintaining a
record of the Collateral, such written statements and schedules as the Agent may
reasonably require designating, identifying or describing the Collateral. The
Borrower's or any failure, however, to promptly give the Agent such statements
or schedules shall not affect, diminish, modify or otherwise limit the Agent's
or Lenders' security interest in the Collateral.

5.13 Security Interests. The Borrower will defend the Collateral
against all claims and demands of all Persons at any time claiming the same or
any interest therein. The Borrower will comply with the requirements of all
state and federal laws in order to grant to the Agent and the Lenders valid and
perfected first security interests in the Collateral. The Agent is hereby
authorized by the Borrower to file any financing statements covering the
Collateral whether or not the Borrower's signatures appear thereon. The
Borrower agrees to do whatever the Agent may reasonably request, from time to
time, by way of: filing notices of liens, financing statements, and amendments,
renewals and continuations thereof; cooperating with the Agent's agents and
representatives; keeping stock records; paying claims which might, if unpaid,
become a Lien on the Collateral; and performing such further acts as the Agent
may reasonably require in order to effect the purposes of this Credit Agreement
and the other Credit Documents. Any and all fees, costs and expenses, of
whatever kind and nature (including any taxes, attorneys' fees or costs for
insurance of any kind), which the Agent may incur with respect to the Collateral
or the Obligations: in filing public notices; in preparing or filing documents;
in protecting, maintaining, or preserving the Collateral or its interest
therein; in enforcing or foreclosing the Liens hereunder, whether through
judicial procedures or otherwise; or in defending or prosecuting any actions or
proceedings arising out of or relating to its transactions

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with the Borrower or any of the Subsidiaries under this Credit Agreement or any
other Credit Document, shall be borne and paid by the Borrower. If same are not
promptly paid by the Borrower, the Agent may pay same on the Borrower's behalf,
and the amount thereof shall be an Obligation secured hereby and due to the
Agent on demand.

5.14 Maintenance of Insurance. The Borrower will, and will cause each
Subsidiary to, (i) maintain insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar business of similar size and owning
similar properties in the same general areas in which the Borrower or such
subsidiary operations and (ii) furnish to the Agent and the Lenders, upon
written request, full information as to the insurance maintained by the Borrower
and its Subsidiaries.

5.15 Casualty Loss; Condemnation. The Borrower will provide written
notice to the Agent and the Lenders of the occurrence of any of the following
events within five (5) Business Days after the occurrence of such event: any
asset or property owned or used by the Borrower or any of the Subsidiaries is
(i) damaged or destroyed, or suffers any other loss, or (ii) condemned,
confiscated or otherwise taken, in whole or in part, or the use thereof is
otherwise diminished so as to render impracticable or unreasonable the use of
such asset or property for the purposes to which such asset or property was used
immediately prior to such condemnation, confiscation or taking, by exercise of
the powers of condemnation or eminent domain or otherwise, and as a result of
the circumstances specified in clause (i) or (ii) above the Borrower or its
Subsidiaries suffer losses (whether or not compensable by insurance or award)
exceeding in the aggregate $1,000,000 (collectively, a "Casualty Loss"). The
Borrower will diligently file and prosecute its claim or claims for any award or
payment in connection with a Casualty Loss.

5.16 Taxes. The Borrower will pay, when due, and will cause each
Subsidiary to pay when due, all taxes lawfully levied or assessed against the
Borrower, such Subsidiary or any of the Collateral before any penalty or
interest accrues thereon; provided, however, that, unless such taxes have become
a federal tax or ERISA Lien on any of the assets of the Borrower or any
Subsidiary, no such tax need to be paid if the same is being contested, in good
faith, by appropriate proceedings promptly instituted and diligently conducted
and if an adequate reserve or other appropriate provision shall have been made
therefor as required in order to be conformity with GAAP.

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5.17 Compliance With Laws. Except where failure to comply would not
have a Material Adverse Effect, the Borrower will comply, and will cause each
Subsidiary to comply, with all laws, rules, regulations, orders and ordinances
of any legislative, administrative or judicial body or official applicable to
the Collateral or any part thereof or to its assets or the operation of its
business; provided that the Borrower and any Subsidiary may contest any acts,
rules, regulations, orders and ordinances of such bodies or officials in any
reasonable manner that would not reasonable be expected to have a Material
Adverse Effect.

5.18 Use of Proceeds. The initial Loans made to the Borrower hereunder
shall be used first (i) to pay the costs and expenses of the transactions
contemplated by this Credit Agreement which are due and payable on the Closing
Date, including, without limitation, the Fees and Expenses due on the Closing
Date pursuant to Sections 2.9 and 3.1 hereof and (ii) for the Refinancing; and
the proceeds of any subsequent Loans made hereunder shall be used by the
Borrower for general corporate purposes, including working capital requirements,
of the Borrower and the Subsidiaries after the Refinancing. The Borrower will
not use any portion of the proceeds of any Loans hereunder for the purpose of
purchasing or carrying any "margin stock" (as defined in Regulation G of the
Board of Governors of the Federal Reserve System) in any manner which violates
the provisions of Regulation G, U or X or said Board of Governors or for any
other purpose in violation of any applicable statute or regulation or of the
terms and conditions of this Credit Agreement.

5.19 Fiscal Year. The Borrower will not change its fiscal year from a
year ending March 31 unless (i) required by law or (ii) Kyoei shall have
requested such change to facilitate its Japanese financial reporting
requirements, and in either case the Borrower shall give the Agent and the
Lenders at least thirty (30) days prior written notice thereof.

5.20 Notification of Certain Events. The Borrower will promptly notify
the Agent and the Lenders of the occurrence of any of the following events:

(a) except for any contract which gives rise to a Fabricating
Account, any Material Contract of the Borrower or any of the Subsidiaries
is terminated or amended in any material respect or any new Material
Contract is entered into (in which event the Borrower shall provide the
Agent and the Lenders with a copy of such Material Contract); or

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(b) any of the material terms upon which suppliers to the
Borrower or any of the Subsidiaries do business with the Borrower or any
Subsidiary are changed or amended and such change or amendment could
reasonably be expected to have a Material Adverse Effect on the Borrower
and its Subsidiaries taken as a whole; or

(c) any order, judgment or decree in excess of $1,000,000 shall
have been entered against the Borrower or any of the Subsidiaries or any
of their respective properties or assets; or

(d) any notification of violation of any law or regulation or
any inquiry shall have been received by the Borrower or any of the
Subsidiaries from any local, state, federal or foreign governmental
authority or agency, which reasonably could be expected to have a
Material Adverse Effect.

5.21 Intellectual Property. The Borrower will do and cause to
be done all things necessary to preserve and keep in full force and effect all
registrations of patents, trademarks, service marks and other marks, trade names
or other trade rights.

5.22 Maintenance of Property. The Borrower will keep, and cause
each Subsidiary to keep, all property useful and necessary to its respective
business in good working order and condition (ordinary wear and tear excepted)
in accordance with its past operating practices and not commit or suffer any
waste with respect to any of its properties, except for properties which either
individually or in the aggregate are not material. In furtherance of the
maintenance required under this Section 5.22 the Borrower may temporarily
shutdown a property or facility for the upgrade or extended maintenance of such
property or facility.

5.23 Payment of Taxes. The Borrower will, and will cause each
Subsidiary to, pay and discharge all taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, in each case on a timely basis, and all lawful claims which, if
unpaid, might become a lien upon any properties of the Borrower or Subsidiary,
provided that neither the Borrower nor any Subsidiary shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it maintains adequate reserves with respect
thereto in accordance with GAAP.

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5.24 Further Assurances. The Borrower will take, and will cause each
Subsidiary to take, all such further actions and execute all such further
documents and instruments as the Agent may at any time reasonably determine in
its sole discretion to be necessary or advisable to further carry out and
consummate the transactions contemplated by this Credit Document, to cause the
execution, delivery and performance of this Credit Document to be duly
authorized and to perfect or protect the Liens (and the priority status
thereof) of the Agent and the Lenders on the Collateral.

ARTICLE 6. Negative Covenants.

Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder and under the other Credit
Documents, the Borrower agrees that:

6.1 Consolidated Net Worth. The Consolidated Entity will at all times
maintain a Consolidated Net Worth of not less than the sum of (i) $100,000,000
plus (ii) 50% of the net proceeds received by the Borrower after the date
hereof from sales of its stock (whether in a public offering or a private
placement) other than the sales to (x) the Borrower's Stock Purchase/Stock
Option Plan, or (y) employees or officers of the Borrower pursuant to incentive
plans or programs.

6.2 Interest Coverage. The Consolidated Entity will have an
EBITDA/Interest Expense Ratio of not less than 1.30 to 1.00 for each Rolling
Period.

6.3 Current Ratio. The Consolidated Entity will at all times maintain
a ratio of Current Assets to Current Liabilities of not less than 1.25 to 1.00.

6.4 Restricted Expenditures. The Borrower and its Subsidiaries will
not make Restricted Expenditure in any fiscal quarter commencing on or after
July 1, 1995 in an aggregate amount in excess of the sum of the Restricted
Expenditures Allowance plus the Restricted Expenditures Basket for such fiscal
quarter; provided that no Restricted Expenditures shall be made at any time if
after giving effect thereto the Availability would be less than $10,000,000 or
if such Restricted Expenditure is prohibited by Section 6.11(b). As used herein:

"Restricted Expenditures" shall mean, for any fiscal quarter,
the sum of (a) the Capital Expenditures of the Borrower and its
Subsidiaries in

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such fiscal quarter plus (b) the amount applied by the Borrower and its
Subsidiaries in such fiscal quarter to the optional repayment,
redemption or repurchase of Funded Debt, provided that there shall be
excluded from Restricted Expenditures any expenditures with respect to
any Casualty Loss to the extent of any insurance proceeds received with
respect to such Casualty Loss.

"Restricted Expenditures Allowance" shall mean for any fiscal
quarter (a) the operating cash flow of the Borrower and its
Subsidiaries in such fiscal quarter (as set forth in the Borrower's
Financial Statements for such quarter) plus (b) the net proceeds
received by the Borrower and its Subsidiaries in such fiscal quarter
from the issuance or incurrence of Funded Debt plus (c) the net cash
proceeds received by the Borrower and its Subsidiaries in such fiscal
quarter from the sale of their fixed assets minus (d) all mandatory
payments of principal of Funded Debt made by the Borrower and its
Subsidiaries in such fiscal quarter; provided that if the Restricted
Expenditures Allowance for any fiscal quarter exceeds the Restricted
Expenditures of the Borrower in such fiscal quarter, then the
Restricted Expenditures Allowance in the subsequent fiscal quarter
shall be increased by the amount of such excess which is not applied to
increase the Restricted Expenditures Basket pursuant to clause (c) of
the definition of that term; provided, further, that in calculating the
amount of Funded Debt proceeds received by the Borrower or any
Subsidiary in any fiscal quarter, for purposes of determining the
Restricted Expenditures Allowance in such fiscal quarter, there shall
be excluded proceeds of Funded Debt covered by Facility Letters of
Credit or Third Party Letters of Credit. If the Operating Cash Flow in
any fiscal quarter is negative, then the amount specified in clause (a)
above shall be negative. The Restricted Expenditures Allowance shall in
any event not be a number less than zero.

"Restricted Expenditures Basket" shall mean, for any fiscal
quarter (the "Relevant Fiscal Quarter") an amount equal to (a)
$30,000,000 minus (b) the aggregate amount of the Restricted
Expenditures made by the Borrower in each quarter commencing after the
date hereof and ending prior to the Relevant Fiscal Quarter in excess
of the Restricted Expenditures Allowance in each such fiscal quarter
plus (c) the lesser of (i) the amount specified in clause (b) above or
(ii) the aggregate amount of the Unused Restricted Expenditures
Allowance for each fiscal quarter

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commencing after the date hereof and ending prior to the Relevant Fiscal
Quarter to the extent such amount is not applied to increase the Restricted
Expenditure Allowance pursuant to the first proviso of the definition of
that term.

"Unused Restricted Expenditure Allowance" shall mean, for any fiscal
quarter, the excess, if any, of the Restricted Expenditures Allowance for
such fiscal quarter over the Restricted Expenditures made in such fiscal
quarter.

6.5 Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, incur, create, assume or suffer to exist
any Indebtedness other than:

(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;

(b) Indebtedness under the First Mortgage Notes and the First Mortgage
Notes Indenture;

(d) Indebtedness under the FLS Intercompany Note;

(e) Indebtedness under Interest Rate Agreements entered into in the
ordinary course of business;

(f) Indebtedness in respect of Third Party Letters of Credit permitted
by Section 2.7.7;

(g) Indebtedness described on Schedule 6.5 and any refinancing of such
Indebtedness, provided that the aggregate principal amount of such
refinancing Indebtedness is not increased and such refinancing is on terms
and conditions no more restrictive than the terms and conditions of the
Indebtedness being refinanced (and for purposes hereof a "refinancing"
Indebtedness shall include Indebtedness incurred within 90 days after the
refinanced Indebtedness is repaid);

(h) Indebtedness, in addition to the Indebtedness permitted in clauses
(a) through (g) above, not exceeding $50,000,000 in principal amount at any
one time outstanding (including all outstanding

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Sale/Leaseback Transactions permitted by Section 6.10);

(i) Indebtedness, in addition to that permitted by clauses (a) through
(h) above, provided that (i) the Required Lenders consent thereto and (ii)
the EBITDA/Interest Expense Ratio, for the most recent Rolling Period
preceding the date such additional Indebtedness is to be incurred for which
Financial Statements have been furnished by the Borrower pursuant to Section
5.1, is equal to or greater than 2.25 to 1.00.

6.6 Liens. The Borrower will not, and will not permit any Subsidiary
to, directly or indirectly, mortgage, assign, pledge, transfer, create incur,
assume, suffer to exist or otherwise permit any Lien (whether as a result of a
purchase money or title retention transaction, Sale/Leaseback Transaction,
Capital Lease or other security arrangement, or otherwise) to exist on any of
its property, assets, revenues or goods, whether real, personal or mixed,
whether now owned or hereafter acquired, except for:

(a) Liens granted to the Lenders or the Agent pursuant to any Credit
Document;

(b) Liens securing the First Mortgage Notes;

(d) Liens to the extent they secure Indebtedness permitted by clause
(h) of Section 6.5 provided such Liens do not cover or extend to the
Collateral;

(e) Liens of warehousemen, mechanics, materialmen, workers, repairmen,
common carriers, landlords and other similar Liens arising by operation of
law or otherwise, not waived in connection herewith, for amounts that are
not yet due and payable or which are being diligently contested in good
faith by the Borrower by appropriate proceedings;

(f) attachment or judgment Liens individually or in the aggregate not
in excess of $1,000,000 (exclusive of (i) any amounts that are duly bonded
to the reasonable satisfaction of the Agent or (ii) any amount adequately
covered by insurance as to which the insurance company has not disclaimed or
disputed in writing its obligations for coverage);

(g) Liens for taxes, assessments or other governmental charges not yet
due and payable or which are

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being diligently contested in good faith by the Borrower by appropriate
proceedings, provided that in any such case an adequate reserve is being
maintained by the Borrower in accordance with GAAP for the payment of same;

(h) deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance;

(i) deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in the
ordinary course of business;

(j) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not materially detract
from the value of the property subject thereto or materially interfere with
the ordinary conduct of the business of the Borrower or any Subsidiary;

(k) Liens previously existing on property acquired hereafter (other
than Collateral) and assumed by the Borrower or any of its Subsidiaries in
connection with such acquisition and not created in contemplation of such
acquisition;

(l) Liens securing the reimbursement obligations of the Borrower in
respect of Third Party Letters of Credit permitted by Section 2.7.7,
provided that (i) such Liens, insofar as they relate to any item of
Collateral, are expressly stated to be subordinate in all respects to the
Liens securing the Obligations hereunder and (ii) the instruments pursuant
to which such Liens with respect to Third Party Letters of Credit are
created are approved by the Agent in the exercise of its commercially
reasonable judgment;

(m) Liens arising under Sale/Leaseback Transactions permitted by
Section 6.10;

(n) Liens securing refinancings, extensions or renewals of Indebtedness
or obligation secured by Liens permitted in clauses (a) through (m) above;
provided that (x) the amount of any such extended, renewed or refinancing
Indebtedness or obligation is not increased, (y) such extended, renewed or
refinancing Indebtedness or obligation is on terms and conditions no more
restrictive than the terms and conditions of

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the Indebtedness or obligation being extended or renewed and (z) such
Liens cover only property or assets theretofore subject thereto (and
for purpose of this clause (n) "refinancing" Indebtedness shall have
the meaning provided in clause (g) of Section 6.5.

6.7 No Guarantees. (a) The Borrower will not,
and will not permit any Subsidiary to, directly or indirectly, assume,
guarantee, endorse, or otherwise become liable upon the obligations of any
other Person, including, without limitation, any Subsidiary or Affiliate of the
Borrower, except (i) by the endorsement of negotiable instruments for deposit
or collection or similar transactions indemnities in connection with the sale
of Inventory or other asset dispositions permitted hereunder, (iii) in
connection with the incurrence of Indebtedness permitted to be incurred
pursuant to Section 6.5 hereof, (iv) guarantees of Indebtedness not exceeding
$500,000 at any one time outstanding, and (v) guarantees listed on Schedule 6.7
hereto.

(b) As used in this Section 6.7, the term "guarantee" shall
include all obligations incurred by the Borrower or any Subsidiary through an
agreement, contingent or otherwise, by the Borrower or any Subsidiary (i) to
purchase Indebtedness of any Person or any property or assets constituting
security for such Indebtedness; (ii) to advance or supply funds (A) for the
purchase or payment of Indebtedness of any Person, or (B) to maintain working
capital or equity capital of any Person at a specified level so long as
specified Indebtedness of such Person is outstanding; (iii) to purchase
property, securities, goods or services of any Person for the purpose of
assuring the owner of Indebtedness of such Person of the ability of such Person
to make payment of such Indebtedness; or (iv) otherwise to assure the owner of
any Indebtedness against loss in respect thereof.

6.8 Sale of Assets. The Borrower will not, and will not
permit any Subsidiary to, directly or indirectly, sell, lease, assign, transfer
or otherwise dispose of any assets other than:

(a) Inventory in the ordinary course of business;

(b) obsolete or worn out property disposed of in the
ordinary course of business;

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shop assets, all located in Tampa, Florida, provided that such assets
are sold for fair market value;

(d) other dispositions in any one fiscal year at fair market
value of assets having a book or market value (whichever is higher) not
exceeding $1,000,000; and

(e) other dispositions of assets that do not constitute
Collateral, provided that (i) such other dispositions are for fair
market value, (ii) at least seventy five percent (75%) of the aggregate
consideration for such other dispositions is in the form of cash, (iii)
such consideration is either (1) reinvested in the business of the
Borrower or its Subsidiaries, (2) used to repay the Loans or (3) used
to repay other Indebtedness as otherwise permitted hereunder, provided
that the book or market value (whichever is higher) of assets disposed
of by the Borrower and its Subsidiaries during any fiscal year pursuant
to this clause (e) may not exceed $50,000,000 without the written
consent of the Required Lenders.

6.9 No Corporate Changes. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, (a) merge or consolidate
with any other Person or (b) alter or modify its Articles or Certificate of
Incorporation, structure, status or corporate existence (except for (i) changes
to increase the Borrower's authorized capital stock and (ii) changes upon 30
days prior notice to the Agent and the Lenders which individually and in the
aggregate would not reasonably be expected to have a Material Adverse Effect),
or (c) enter into or engage in any operation or activity materially different
from that presently being conducted by the Borrower or (d) liquidate or
dissolve, except that (i) any Subsidiary may be merged or consolidated with or
into another Subsidiary or the Borrower (provided that the Borrower shall be
the continuing or surviving corporation of any merger with a Subsidiary) and
(ii) the Borrower or any Subsidiary may merge with another Person provided that
(x) such transaction constitutes an Investment permitted by Section 6.12 and
(y) the Borrower or such Subsidiary is the surviving corporation in such merger.

6.10 Sale/Leaseback Transactions. The Borrower will not, and
will not permit any Subsidiary to, enter into any Sale/Leaseback Transaction
after the date hereof if, after giving effect thereto, the aggregate outstanding
amount of all Sale/Leaseback Transactions then in effect would exceed (i)
$50,000,000 minus (ii) outstanding Indebtedness of the Borrower or its
Subsidiaries (other than

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Sale/Leaseback Transactions) permitted by clause (h) of Section 6.5. For
purposes of this Section 6.10 and clause (h) of Section 6.5 the amount of each
Sale/Leaseback transaction shall be equal to (i) the amount thereof required to
be shown as a debt on the balance sheet of the Consolidated Entity pursuant to
GAAP or (ii) if the amount of such Sale/Leaseback Transaction is not required
to be so shown pursuant to GAAP, the discounted present value of all lease
payments required to be made by the Borrower or any Subsidiary under such
Sale/Lease Transaction. Each Sale/Leaseback Transaction shall also comply with
the requirements of clause (e) of Section 6.8.

6.11 No Restricted Payments. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly:

(a) declare or pay any dividend (other than dividends payable
solely in common stock of the Borrower) on, or make any payment on
account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of capital stock of the
Borrower or any warrants, options or rights to purchase any such
capital stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether
in cash or property or in obligations of the Borrower or any of its
Subsidiaries, except that (i) the Borrower and its Subsidiaries, except
that (i) the Borrower and its Subsidiaries may make tax payments
on behalf of FLS and may reimburse each other with respect to tax
payments, (ii) the Borrower may make payments under the Technical
Assistance Agreements in an aggregate amount not to exceed $2,000,000
in any twelve month period, (iii) the Borrower may make payments to FLS
for holding company expenses in an aggregate amount not to exceed
$500,000 in any fiscal year, (iv) the Borrower may reimburse Kyoei or
its Affiliate for expenses incurred on behalf of the Borrower and in
an aggregate amount not to exceed $500,000 in any one fiscal year, (v)
any Subsidiary may declare and pay dividends to the Borrower or any
other Subsidiary, (vi) in addition to the payments permitted by clauses
(i) through (v) above, so long as no Default has occurred and is
continuing or would result therefrom and so long as after giving effect
to the payment of any proposed dividend the amount of the Availability
shall be at least $10,000,000, the Borrower may pay dividends on its
common stock in an amount not to exceed, in any fiscal year, the lesser
of (A) $15,000,000 or (B) seventy-five percent (75%) of the aggregate
amount of

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Adjusted Consolidated Net Income for the immediately preceding fiscal year,
provided that any dividend permitted by this clause (vi) to be paid during any
fiscal year may be declared as of the last day of the immediately preceding
fiscal year, (vii) in addition to the payments permitted by clauses (i) through
(vi) above, the Borrower may pay dividends to FLS equal to the net cash proceeds
received by the Borrower after the date hereof from the sale of its stock and
(viii) the Borrower may repurchase shares of its stock issued to its officers
and employees, provided that (A) no Default exists at the time of such
repurchase, (B) such repurchase is made at a price equal to the appraised or
fair market value of such shares, (C) such repurchase is made pursuant to bona
fide contractual arrangements or incentive programs in effect at the time the
shares were issued to such officers and employees and (D) the total number of
shares which may be repurchased pursuant to this clause (viii) during the term
of this Agreement may not exceed 15% of the total outstanding capital stock of
the Borrower and (E) after giving effect to any such repurchase, the
Availability would be $10,000,000 or more;

(b) make any optional payment or repayment on or redemption (including,
without limitation, by making payments to a sinking or analogous fund) or
repurchase of any Indebtedness (other than Loans, LOC Reimbursement Obligations
or other Obligations owing under any Credit Document) including, without
limitation, the First Mortgage Notes, any Subordinated Note or the Existing
Subordinated Debentures; provided that (i) the Borrower may make mandatory
redemptions of the First Mortgage Notes with the net proceeds of certain Asset
Sales (as defined in the First Mortgage Note Indenture), (ii) the Borrower may
on or after July 1, 1995 subject to the limitation on Restricted Expenditures
set forth in Section 6.4, (A) purchase or prepay the Existing Subordinated
Debentures, (B) to the extent permitted by the provisions thereof, prepay up to
$945,000 of the principal amount of the FLS Intercompany Note, and/or (C) prepay
in any one fiscal year up to $1,000,000 in aggregate principal amount of any
other Indebtedness (other than the First Mortgage Notes and the Subordinated
Intercompany Note), in each case to the extent that after giving effect to such
purchase or payments the aggregate amount of the Availability is at least
$10,000,000; or

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(c) make any payment on the FLS Intercompany Note if a Default under
this Credit Agreement has occurred or is continuing.

6.12 No Investments. The Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, make any investment in any Person,
whether in cash, securities, or other property of any kind including, without
limitation, any Subsidiary or Affiliate of the Borrower, other than:

(a) advances or loans made in the ordinary course of business not to
exceed $2,000,000 in the aggregate outstanding at any one time;

(b) Investments existing on the date hereof not exceeding $500,000 in
aggregate amount and Investments listed in Schedule 6.12;

(d) interest-bearing demand or time deposits (including certificates
of deposit) which are insured by the Federal Deposit Insurance Corporation
("FDIC"), provided, that the Borrower and its Subsidiaries may, in the
ordinary course of their business, maintain in their Disbursement Accounts
and/or the Borrower's Corporate Account from time to time amounts in excess
of then applicable FDIC insurance limits;

(e) loans to management employees of the Borrower or any Subsidiary
(in addition to those disclosed in Schedule 6.12) not exceeding in aggregate
principal amount $500,000 at any time outstanding;

(f) any exception to restricted payments set forth in Section 6.11
that may otherwise constitute an Investment; and

(g) such other Investments as the Required Banks may approve in their
sole discretion;

provided that the Borrower may make Investments (in addition to those permitted
by clauses (a) through (g) above) if after giving effect thereto the
EBITA/Interest Expense Ratio for the then most recent Rolling Period for which
Financial Statements have been furnished by the Borrower pursuant to Section 5.1
are both equal to or greater than 2.25 to 1.00; provided, further, that any
Investment resulting in the acquisition by the Borrower of a Subsidiary must
comply with the provisions of Section 6.19. As used herein, "Pro

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Forma EBITDA/Interest Expense Ratio" shall mean for any Rolling Period with
respect to any proposed Investment, the EBITDA/Interest Expense Ratio for such
Rolling Period calculated as if such Investment had been made on the first day
of such Rolling Period and retained for the entire duration thereof, all
Indebtedness incurred to finance such Investment had been incurred on the first
day of such Rolling Period and had been outstanding for the entire term of such
Rolling Period and the revenues and expenses attributable to such Investment
were reflected in EBITDA for such Rolling Period.

6.13 No Affiliate Transactions. Except for (i) the Technical
Assistance Agreements, if any, (ii) the FLS Intercompany Notes and the
Subordinated Intercompany Note, and (iii) payments otherwise permitted pursuant
to Section 6.11 or 6.12 hereof, the Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, enter into any transaction (including,
without limitation, the purchase, sale or exchange of property or the rendering
of any service) with any Subsidiary or Affiliate of the Borrower except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business, as the case may be, and upon fair and reasonable
terms no less favorable to the Borrower or such Subsidiary than could be
obtained in a comparable arm's length transaction with an unaffiliated Person;
provided, that (a) the aggregate amount of all Affiliate transactions (excluding
payments under the Technical Assistance Agreement or payments permitted under
Section 6.11 or 6.12) may not exceed $3,000,000 in any twelve month period
unless the Board of Directors of the Borrower or such Subsidiary, as the case
may be, pursuant to a board resolution, reasonably and in good faith determines
that such transaction is fair to the Borrower or such Subsidiary, as the case
may be, and is on terms no less favorable to the Borrower or such Subsidiary
than could be obtained in a comparable arm's length transaction with an
unaffiliated Person and (b) the aggregate amount of all payments made under the
Technical Assistance Agreements may not exceed $2,000,000 in any twelve month
period.

6.14 ERISA. The Borrower will not, and shall not permit any
Subsidiary to, directly or indirectly:

(a) Engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction which is reasonably likely to result in a
civil penalty or excise tax described in Sections 406 of ERISA or
4975 of the Internal Revenue Code exceeding in the aggregate
$1,000,000 for which a statutory or class exception is

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not available or a private exemption has not been previously obtained
from the DOL;

(b) permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302 of ERISA and
412 of the Internal Revenue Code), whether or not waived;

(c) fail, or permit any ERISA Affiliate to fail, to pay
timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;

(d) terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan where such event would result in
any liability of the Borrower exceeding $1,000,000, any
Subsidiary or any ERISA Affiliate under Title IV of ERISA;

(e) fail, or permit any ERISA Affiliate to fail, to
pay any required installment or any other payment exceeding
$750,000 in aggregate amount required under Section 412 of
the Internal Revenue Code on or before the due date for such
installment or other payment;

(f) amend, or permit any ERISA Affiliate to amend, a
Plan resulting in an increase in current liability for the plan
year such that either of the Borrower, any Subsidiary or any
ERISA Affiliate is required to provide security to such Plan
under Section 401(a)(29) of the Internal Revenue Code; or

(g) contribute to or otherwise incur any liability
with respect to a Multiemployer Plan.

6.15 Additional Bank Accounts. The Borrower will not, and
will not permit any Subsidiary to, directly or indirectly, open, maintain or
otherwise have any checking, savings or other accounts at any bank or other
financial institution, or any other account where money is or may be deposited
or maintained with any Person, other than the Borrower's Corporate Account, the
Disbursement Accounts, the Lockbox Accounts or accounts maintained by the Agent
or the Lockbox Bank and the accounts set forth on Schedule 6.15; provided that
upon 10 days prior written notice to the Agent the Borrower or its Subsidiary
may establish other deposit accounts (but no lockbox accounts) identified in
such notice at a bank in the United States or a U.S. branch of a non-U.S. bank.

6.16 No Excess Cash. The Borrower will not, and will not
permit any Subsidiary to, directly or indirectly

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maintain in the aggregate in all of the checking, savings or other accounts
(other than Lockbox Accounts or any payroll accounts) of the Borrower and its
Subsidiaries, total cash balances and investments in Cash Equivalents permitted
by Section 6.12 hereof in excess of $10,000,000 in the aggregate for the
Borrower and its Subsidiaries at any time during which any Loans are
outstanding hereunder.

6.17 Material Amendments of Material Contracts. The Borrower will
not, and will not permit any Subsidiary to, directly or indirectly, without the
prior written consent of the Required Lenders, amend, modify, cancel or
terminate or permit the amendment, modification, cancellation or termination of,
any of the Material Contracts, except in the event that such amendments or
modifications would not have a Material Adverse Effect. Without limiting the
generality of the foregoing, the Borrower shall not amend, modify or change, or
consent or agree to any amendment, modification or change, to any of the terms
of the First Mortgage Notes Indenture, the First Mortgage Notes, the
Subordinated Notes, the Existing Debenture Indenture and the Existing
Subordinated Debentures (a) if the effect of such amendment, modification or
change is to (directly or indirectly) (i) increase the amount of any payment of
principal thereof, (ii) increase the interest rate or premium payable thereon,
(iii) increase the amount of fees or any other amounts payable with respect
thereto, (iv) shorten the scheduled amortization or average weighted life
thereof, (v) shorten the date for payment of interest or principal thereon, (vi)
shorten the final maturity thereof, (vii) change any subordination provision
thereof to the detriment of any holder of the Notes or the Obligation of the
Borrower hereunder, or (viii) change any covenant or any event of default or
condition to an event of default thereunder, or (b) if such amendment,
modification or change would, together with all other amendments, modifications
or changes made, increase materially the obligations of the Borrower or confer
additional material rights on the holder of the First Mortgage Notes, the
Subordinated Intercompany Note or the Existing Subordinated Debentures.
Notwithstanding the foregoing, the Borrower may amend, modify, cancel or
terminate the Existing Debenture Indenture and/or the Existing Subordinated
Debentures in connection with any redemption of the Existing Subordinated
Debentures.

6.18 Additional Negative Pledges. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, other than pursuant to
the First Mortgage Notes Indenture as in effect on the Closing Date, create or
otherwise cause or suffer to exist or become effective, directly or indirectly,
(i) any prohibition or restriction

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(including any agreement to provide equal and ratable security to any other
Person in the event a Lien is granted to or for the benefit of the Agent and
the Lenders) on the Borrower or any Subsidiary or (ii) any contractual
obligation which may restrict or inhibit the Agent's rights or ability to sell
or otherwise dispose of the Collateral or any part thereof after the occurrence
of an Event of Default.

6.19 No Additional Subsidiaries. The Borrower will not, directly or
indirectly, form or acquire any new Subsidiaries unless the Required Lenders,
in their sole discretion, shall consent thereto. References herein to
Subsidiaries of the Borrower shall not constitute the Lenders' consent to the
establishment of such Subsidiaries.

ARTICLE 7. Event of Default and Remedies.

7.1 Events of Default. The occurrence of any of the following events
shall constitute an Event of Default hereunder:

(a) the Borrower shall fail to pay in full any principal of any
Loan when due, whether at stated maturity, required prepayment, by
acceleration or otherwise or to deposit, when required to do so
hereunder, any amount required to be deposited in the LOC Cash
Collateral Account; or

(b) the Borrower shall fail to pay any interest, Fees,
Expenses or other Obligations (other than principal) when due,
or if the amount in the Borrower's Disbursement Accounts and the
Borrower's Borrowing Base is insufficient to permit such payment
when due, then within three (3) Business Days of the due date
thereof, in each case whether at stated maturity, by acceleration,
or otherwise; or

(c) the Borrower shall fail to perform, comply with or observe
any term, covenant or agreement applicable to it contained in (i)
Section 5.1 (other than paragraphs (f) and (g) thereof), 5.12, 5.13,
5.14 (ii), 5.21, 5.22 or 5.24, which failure continues for a period
of thirty (30) days after notice thereof to the Borrower from the
Agent or any Lender (through the Agent); (ii) Section 5.1(f), which
failure continues for a period of two (2) days; or (iii) any other
provision of Article 5 or Article 6; or

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(d) the Borrower or any other Credit Party shall fail to comply with
any covenant, contained in this Credit Agreement (other than under a
provision covered by Section 7.1(c) above), the other Credit Documents or
any other agreement among the Borrower, the Agent and the Lenders or
executed by the Borrower in favor of the Agent or the Lenders, which
breach or failure to comply is not cured within fifteen (15) Business Days
after notice thereof to the Borrower from the Agent or any Lender (through
the Agent); or

(e) any representation or warranty made by the Borrower or any other
Credit Party hereunder or in any other Credit Document or any certificate
delivered hereunder or in connection herewith shall prove to be incorrect
in any material respect when made or deemed to have been made; or

(f) the dissolution, liquidation, winding up or cessation of the
Borrower's businesses, or the failure of the Borrower or any Subsidiary to
pay its debts generally as they become due or its admission in writing of
its inability to pay its debts generally as they become due, or the
calling of one or more meetings of the Borrower's or any Subsidiary 's
major creditors for purposes of obtaining a moratorium on payment or a
compromise of the Borrower's debts; or

(g) the Borrower or any Subsidiary shall commence a voluntary case
concerning itself under the Bankruptcy Code, or any involuntary case under
the Bankruptcy Code shall be commenced against the Borrower or any
Subsidiary and the same shall be controverted but not dismissed within 60
days after the commencement of the case; or a custodian (as defined in the
Bankruptcy Code) shall be appointed for, or shall take charge of, all or
substantially of the property of the Borrower or any Subsidiary; or the
Borrower or any Subsidiary shall commence any other proceeding for itself
under any bankruptcy reorganization, arrangement, adjust of debt, relief
of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction (domestic or foreign), whether now or hereafter in effect; or
there shall be commenced against the Borrower or any Subsidiary any such
proceeding which remains undismissed for a period of 60 days; or the
Borrower or any Subsidiary shall be adjudicated insolvent or bankrupt; or
any order of relief under the Bankruptcy Code or any other order approving
any such case or proceeding is entered; or the Borrower or any Subsidiary
shall suffer any appointment of any

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custodian or similar official for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days or
shall consent thereto; or the Borrower or any Subsidiary shall make a
general assignment for the benefit of creditors; or any corporate action
shall be taken by the Borrower or any Subsidiary for the purpose of
effecting any of the foregoing; or

(h) any judgment(s) or order(s) for the payment of money in excess of
$1,000,000 in aggregate amount shall be rendered against the Borrower
and/or any of its Subsidiaries and there shall be any period of ten (10)
consecutive days during which a stay of enforcement of such judgment(s) or
orders, by reason of a pending appeal or otherwise, shall not be in effect
unless such judgment(s) or order(s) shall have been vacated, satisfied or
dismissed or bonded pending appeal or, in the case of a judgment or order
the entire amount of which is covered by insurance, is the subject of a
binding agreement with the plaintiff and the insurer providing for the
payment therefor; or any non-monetary judgment or order shall be rendered
against the Borrower or any of its Subsidiaries that is reasonably likely
to have a Material Adverse Effect and there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect
unless such judgment or order shall have been vacated, satisfied,
discharged or bonded pending appeal; or

(i) there shall occur a default or event of a default (in each case
which shall continue beyond the expiration of any applicable grace
periods) which results in, or permits, the acceleration of the maturity
of, any note, agreement or instrument evidencing any Indebtedness of the
Borrower or any of the Subsidiaries (other than the Obligations), or which
requires the Borrower or any Subsidiary to redeem or repurchase, or
permits the holder of such Indebtedness to require the Borrower or any
Subsidiary to redeem or repurchase, such note or instrument, and the
aggregate principal amount of all such Indebtedness with respect to which
a default or an event of default has occurred, or the maturity of which
has been, or is permitted to be, accelerated, or which the Borrower is or
may be required to redeem or repurchase, exceeds $1,000,000; or

(j) there shall occur a default or event of default (in each case
which shall continue beyond the

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expiration of any applicable grace periods) which results in the
acceleration of the maturity of the Subordinated Notes due 2002 issued by
FLS; or

(k) any material covenant, agreement or obligation of any party
contained in or evidenced by any of the Credit Documents shall cease to be
enforceable in accordance with its terms or other than as a result of
actions taken or not taken by the Agent or the Lenders, or any party
(other than the Agent or the Lenders) to any Credit Document shall deny or
disaffirm its obligations under any of the Credit Documents, or any Credit
Document shall be cancelled, terminated, revoked or rescinded without the
express prior written consent of the Agent (other than as a result of
actions taken or not taken by the Agent or the Lenders), or any action or
proceeding shall have been commenced by any Person (other than the Agent
or any Lender) seeking to cancel, revoke, rescind or disaffirm the
obligations of any party to any Credit Document, or any court or other
governmental authority shall issue a judgment, order, decree or ruling to
the effect that any of the obligations of any party to any Credit Document
are illegal, invalid or unenforceable; or

(l) any Plan shall fail to satisfy the minimum funding standard
required for any plan year or part thereof or a waiver of such standard or
extension of any amortization period is sought or granted under Section
412 of the IRC, any Plan shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan is, shall have been or is
likely to be terminated or to be the subject of termination proceedings
under ERISA, any Plan shall have an Unfunded Current Liability, or a
contribution required to be made to a Plan shall not be timely made, or
the Borrower or any ERISA Affiliate has incurred or is likely to incur a
liability to or an account of a Plan under Section 409, 502 (i), 502 (I),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971, 4975 or 4980 of the Code, or the Borrower has incurred
or is likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in Section 3(1) of ERISA) that provide benefits
to retired employees or other former employees (other than as required by
Section 601 of ERISA) or employee pension benefit plans (as defined in
Section 3(2) of ERISA) and the foregoing, individually or in the
aggregate, (i) in the reasonable opinion of the Required Lenders, could be
expected to

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have a Material Adverse Effect or (ii) constitutes a breach of Section
6.14; or

(m) Kyoei shall fail to perform, comply with or observe any material
obligation, term or agreement applicable to it under any Technical
Assistance Agreement that may be in effect from time to time; or

(n) Kyoei shall cease, directly or indirectly, to (i) own at least
51% of all outstanding shares of each class of the voting stock of the
Borrower or (ii) possess the right to elect a majority of the Board of
Directors of the Borrower; or a Person or group of Persons (other than
Kyoei and its Affiliates) shall (A) become the direct or indirect
beneficial owner (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended from time to time) of capital stock of the
Borrower representing in the aggregate more than 49% of the combined voting
power of the outstanding voting capital stock for the election of directors
of the Borrower or (B) have the right to elect a majority of the board of
directors of the Borrower.

7.2 Acceleration and Cash Collateralization.

(a) Upon the occurrence and during the continuance of an Event of
Default which has not been waived by the Required Lenders, the Agent may,
and if so instructed by the Required Lenders shall, by written notice to
that effect to the Borrower, take any or all of the following actions
(without prejudice to the rights of the Agent, any Lender or the holder of
any Note to enforce its claims against the Borrower and without prejudice
or to any other rights or remedies any of them may have): (i) declare all
Obligations to be, and the same shall thereupon become, immediately due and
payable (provided that upon the occurrence of an Event of Default specified
in clause (g) of Section 7.1 all Obligations shall automatically become
immediately due and payable and the Credit Facility shall automatically
terminate without the necessity of any notice or other demand) without
presentment, demand, protest or any other action by the Agent or any
Lender; and/or (ii) immediately terminate the Credit Facility and the
Commitments hereunder; and/or (iii) demand that the Borrower deposit in the
LOC Cash Collateral Account, for the benefit of the Lenders and the Issuing
Banks, cash in an amount equal to the aggregate amount of all Facility
Letters of Credit then outstanding, and the Borrower shall thereupon be
obligated to make such deposit.

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(b) If at any time after acceleration of the maturity of the Loans,
the Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Credit Agreement) and all
Events of Default and Defaults (other than nonpayment of principal of and
accrued interest on the Loans and other Obligations due and payable solely by
virtue of acceleration) shall be waived or remedied, then by written notice to
the Borrower, the Required Lenders may elect, in the sole discretion of such
Required Lenders, to rescind and annul the acceleration and its consequences and
return any cash collateral; but such action shall not affect any subsequent
Default or impair any right or remedy consequent thereon. The provisions of the
preceding sentence are intended merely to bind the Lenders to a decision which
may be made at the election of the Required Lenders; they are not intended to
benefit the Borrower and do not give the Borrower the right to require the
Lenders to rescind or annul any acceleration hereunder or to return any cash
collateral, even if the conditions set forth herein are met.

7.3. Remedies. (a) Upon the occurrence and during the continuance of
any Event of Default which has not been waived by the Agent at the direction of
the Required Lenders, the Agent may exercise all right of a secured party with
respect to the Collateral. Without limiting the generality of the foregoing the
Agent may: (i) remove from any premises where same may be located any and all
documents, instruments, files and records (including the copying of any computer
records), and any receptacles or cabinets containing same, relating to the
Accounts, or the Agent may use (at the expense of the Borrower) such of the
supplies or space of the Borrower at the Borrower's place of business or
otherwise, as may be necessary to properly administer and control the Accounts
or the handling of collections and realizations thereon; (ii) bring suit, in
the name of the Borrower, the Agent or the Lenders, to enforce the Accounts and
generally exercise all other rights of an owner of the Accounts, including,
without limitation, the right to: accelerate or extend the time of payment,
settle, compromise, release in whole or in part any amounts owing on any
Accounts and issue credits in the name of the Borrower or the Lenders; (iii)
sell, assign and deliver the Accounts any returned, reclaimed or repossessed
merchandise, with or without advertisement, at public or private sale, for cash,
on credit or otherwise, at the Agent's sole option and discretion, and any
lender may bid or become a purchaser at any such sale, free from any right of
redemption, which right is hereby expressly

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waived by the Borrower; (iv) foreclose the security interests in the Accounts
created pursuant to the Credit Documents by any available judicial procedure;
(v) take possession of any or all of the Inventory without judicial process and
enter any premises where any Inventory may be located for the purpose of taking
possession of or removing the same; (vi) without notice of advertisement, sell,
lease, or otherwise dispose of all or any part of the Inventory, whether in its
then condition or after further preparation or processing, in the name of the
Borrower or the Lenders, or in the name of such other party as the Agent may
designate, either at public or private sale or at any broker's board, in lots or
in bulk, for cash or for credit, with or without warranties or representations,
and upon such other terms and conditions as the Agent in its sole discretion may
deem advisable, and the Agent or any other Lender shall have the right to
purchase at any such sale.

(b) If any Inventory shall require rebuilding, repairing, maintenance
or preparation, the Agent shall have the right, at its option, to do such of the
aforesaid as is necessary, for the purpose of putting the Inventory in such
saleable form as the Agent shall deem appropriate. The Borrower agrees, at the
request of the Agent, to assemble the inventory and to make it available to the
Agent at places which the Agent shall select, whether at the premises of the
Borrower or elsewhere, and to make available to the Agent the premises and
facilities of the Borrower for the purpose of the Agent's taking possession of,
removing or putting the Inventory in saleable form.

(c) If notice of intended disposition of any Collateral is required
by law, the Borrower agrees that five (5) Business Days notice shall constitute
reasonable notification. Unless expressly prohibited by the licensor thereof,
if any, the Agent is hereby granted a license to use all computer software
programs, data bases, processes and materials used by the Borrower in connection
with its businesses or in connection with the Collateral.

(d) The net cash proceeds resulting from the Agent's exercise of any
of the foregoing rights (after deducting all charges, costs and expenses,
including reasonable attorneys' fees) shall be applied by the Agent to the
payment of the Borrower's Obligations to the Agent and the Lenders, whether due
or to become due, in such order as the Agent may elect. The Borrower shall
remain liable to the Agent and the Lenders for any deficiency, and the Agent and
the Lenders in turn agree to remit to the Borrower or its successors or assigns
any surplus resulting therefrom.

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(e) The enumeration of the foregoing rights is not intended to be
exhaustive and the exercise of any right shall not preclude the exercise of any
other rights, all of which shall be cumulative.

(f) In no event shall prior recourse to any Accounts or other
Collateral be a prerequisite to the Agent's or any Lender's right to demand
payment of any Obligation upon its maturity or upon the occurrence of an Event
of Default.

ARTICLE 8. The Agent.

8.1 Appointment of Agent. (a) Each Lender hereby designates BOT as
Agent to act as herein specified. Each Lender hereby irrevocably authorizes,
and each holder of any Note or participation in any Facility Letter of Credit by
the acceptance of such Note or participation shall be deemed irrevocably to
authorize, the Agent to take such action on such Lender's behalf under the
provisions of this Credit Agreement and the Notes and any other instruments and
agreements referred to herein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent shall hold all Collateral and all
payments of principal, interest, Fees, charges and Expenses received pursuant to
this Credit Agreement or any other Credit Document for the benefit of the
Lenders to be distributed promptly as provided herein. The Agent may perform
any of its duties hereunder by or through its agents or employees.

(b) The provisions of this Article 8 are solely for the benefit of
the Agent and the Lenders, and none of the Credit Parties shall have any rights
as a third party beneficiary of any of the provisions hereof (other than Section
8.9). In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party.

8.2 Nature of Duties of Agent. The Agent shall have no duties or
responsibilities except those expressly set forth in this Credit Agreement and
the other Credit Documents. Neither the Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross negligence or willful misconduct. The duties of the Agent

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shall be mechanical and administrative in nature; the Agent shall not have, by
reason of this Credit Agreement or the other Credit Documents, fiduciary
relationship in respect of any Lender; and nothing in this Credit Agreement or
the other Credit Documents, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this Credit
Agreement or the other Credit Documents except as expressly set forth herein or
therein.

8.3 Lack of Reliance on Agent. (a) Independently and without
reliance upon the Agent, each Lender, to the extent it deems appropriate, has
made and shall continue to make (i) its own independent investigation of the
financial or other condition and affairs of each Credit Party in connection with
its becoming a party hereto, making Loans hereunder or the taking or not taking
of any other action in connection herewith and (ii) its own appraisal of the
creditworthiness of each Credit Party, and, except as expressly provided in this
Credit Agreement, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter.

(b) The Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Credit Agreement, or the Notes
or the financial or other condition of any Credit Party. The Agent shall not be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Credit Agreement or the
Notes, or the financial condition of any Credit Party, or the existence or
possible existence of any Default, unless specifically requested to do so in
writing by any Lender. The Agent shall not be charged with knowledge of the
existence of any Default unless it is advised of such Default by the Borrower or
a Lender. Upon receipt by the Agent of written notice of such a Default from
the Borrower or any Lender, the Agent shall promptly give notice thereof to each
Lender.

8.4 Certain Rights of the Agent. The Agent shall have the right to
request instructions from the Lenders at any time. If the Agent shall request
instructions from the Lenders with respect to any act or action (including the
failure to act) in connection with this

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Credit Agreement, the Agent shall be entitled to refrain from such act or taking
such action unless and until the Agent shall have received instructions from the
Required Lenders or (if so provided in this Credit Agreement) the Majority
Lenders and the Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Lenders or (when so provided herein) the Majority Lenders.

8.5 Reliance by Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram, order
or other documentary, facsimile transmission or telephone message reasonably
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person. The Agent may consult with legal counsel (including
counsel for the Borrower with respect to matters concerning the Borrower),
independent public accountants and other experts selected by it and (in the
absence of its gross negligence or willful misconduct in such selection) shall
not be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.

8.6 Indemnification of Agent. To the extent the Agent is not
reimbursed and indemnified by the Borrower, each Lender will reimburse and
indemnify the Agent, in proportion to its respective Commitment, for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (including reasonable counsel
fees and disbursements) of any kind or nature whatsoever (including all
Expenses) which may be imposed on, incurred by or asserted against the Agent in
performing its duties hereunder, in any way relating to or arising out of this
Credit Agreement or any other Credit document, provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct. The agreements
contained in this Section 8.6 shall survive any termination of this Credit
Agreement and the other Credit Documents and the payment in full of the
Obligations. To the extent indemnification payments made by the Lenders
pursuant to this Section 8.6 are subsequently recovered by the Agent from the
Borrower on the Collateral, the Agent will promptly refund such previously paid
indemnification payments to the Lender.

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8.7 The Agent in its Individual Capacity. With respect to its obligation
to lend under this Credit Agreement, the Loans made by it and the Notes issued
to it, and Facility Letters of Credit issued by it or in which it has a
participation hereunder, the Agent shall have the same rights and powers
hereunder as any other Lender, holder of a Note or participation interests or
Issuing Bank and may exercise the same as though it was not performing the
duties specified herein; and the terms "Lenders," "Required Lenders," "Majority
Lenders," "holders of Notes," "Issuing Bank," "Swingline Bank" or any similar
terms shall, unless the context clearly otherwise indicates, include the Agent
in its individual capacity. The Agent may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower or any affiliate of the
Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower for services in connection
with this Credit Agreement and otherwise.

8.8 Holders of Notes. The Agent and its affiliates may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof shall have been filed
with the Agent. Any request, authority or consent of any Person who, at the time
of making such request or giving such authority or consent, is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.

8.9 Successor Agent. (a) The Agent may, upon (ten) 10 Business Days,
notice to the Lenders and the Borrower, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this Section 8.9)
by giving written notice thereof to the Lenders and the Borrower. Upon such
resignation by the Agent, it shall cease to have any obligation hereunder as an
Issuing Bank, including any obligation, as Issuing Bank, to issue Facility
Letters of Credit. Upon any such resignation, the Majority Lenders shall have
the right, upon five (5) days' notice and approval by the Borrower (which
approval shall not be unreasonably withheld), to appoint a successor Agent. If
no successor Agent shall have been so appointed by the Majority Lenders, and
shall have accepted such appointment, within thirty (30) days after the retiring
Agent's giving of notice of resignation, then, upon five (5) days, notice, the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a bank or a trust company or other financial institution which
maintains an office in the United States, or a com-

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mercial bank organized under the laws of the United States of America or of any
State thereof, or any Affiliate of such bank or trust company or other financial
institution which is engaged in the commercial finance business, having a
combined capital and surplus of at least $100,000,000.

(b) Upon any merger or consolidation of the Agent with any other Person,
the resulting entity shall automatically succeed to the Agent as Agent hereunder
and the other Credit Documents, and all references herein to "Agent" shall
include such resulting entity; provided, however, that the parties hereto, if so
requested by such and instruments reasonably requested by such resulting entity
to confirm its succession as Agent hereunder and under the Credit Documents.

(c) Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Credit Agreement (except for liabilities accrued prior to its resignation).
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Article 8 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Credit Agreement.

(d) In the event of a material breach by the Agent of its duties
hereunder, the Agent may be removed by the Required Lenders (other than the
Agent and without giving effect to any Loans or Commitments made by the Agent)
for cause and the provisions of this Section 8.9 shall apply to the appointment
of a successor Agent.

8.10 Collateral Matters. (a) Each Lender authorizes and directs the
Agent to enter into the Collateral Documents for the benefit of the Lenders.
Each Lender hereby agrees, and each holder of any Note by the acceptance thereof
will be deemed to agree, that, except as otherwise set forth herein, any action
taken by the Majority Lenders or the Required Lenders, as applicable, in
accordance with the provisions of this Credit Agreement or the Collateral
Documents, and the exercise by the Majority Lenders or the Required Lenders, as
applicable, of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of the Lenders. The Agent is hereby authorized on behalf of all of the
Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default,

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to take any action with respect to any Collateral or Collateral Documents which
may be necessary to perfect and maintain perfected the security interest in and
liens upon the Collateral granted pursuant to the Collateral Documents.

(b) The Lenders hereby authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
Collateral (i) upon termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this Credit
Agreement or the Credit Documents or the transactions contemplated hereby or
thereby, (ii) constituting property being sold or disposed of upon receipt of
the proceeds of such sale by the Agent and application of such proceeds in
accordance with Section 2.13, if the Borrower certifies to the Agent that the
sale or disposition is made in compliance with Section 6.8 (and the Agent may
rely conclusively on any such certificate, without further inquiry) or (iii) if
approved, authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders pursuant to Section
9.10. Upon request by the Agent at any time, the Lenders will confirm in
writing the Agent's authority to release particular types or items of Collateral
pursuant to this Section 8.10.

(c) Upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Credit Agreement, or consented to in writing by
the Required Lenders or all of the Lenders, as applicable, and upon at least
five (5) Business Days' prior written request by the Borrower, the Agent shall
(and is hereby irrevocably authorized by the Lenders to) execute such documents
as may be necessary to evidence the release of the Liens granted to the Agent
for the benefit of the Lenders herein or pursuant hereto upon the Collateral
that was sold or transferred; provided that (i) the Agent shall not be required
to execute any such document on terms which, in the Agent's opinion, would
expose the Agent to liability or create any of such Liens without recourse or
warranty and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of the Borrower or any
Subsidiary in respect of) all interests retained by the Borrower or any
Subsidiary, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral, or any foreclosure
with respect to any of the Collateral, the Agent shall be authorized to deduct
all of the Expenses

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reasonably incurred by the Agent from the proceeds of any such sale, transfer
or foreclosure.

(d) The Agent shall have no obligation whatsoever to the Lenders or to any
other Person (i) to assure that the Collateral exists or is owned by the
Borrower or any Subsidiary or is cared for, protected or insured or that the
Liens granted to the Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or (ii) to exercise or to continue
exercising at all or in any manner or under any duty of care, disclosure or
fidelity any of the rights, authorities and powers granted or available to the
Agent in this Credit Agreement or in any of the Collateral Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission
or event related thereto, the Agent shall have no duty or liability whatsoever
to the Lenders, except for its gross negligence or willful misconduct.

8.11 Actions with Respect to Defaults. In addition to the Agent's right to
take actions on its own accord as permitted under this Credit Agreement, the
Agent shall take such action with respect to a Default as shall be directed by
the Lenders pursuant to Article 7; provided that until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default
as it shall deem to be advisable and in the best interests of the Lenders.

8.12 Delivery of Information. The Agent shall not be required to deliver
to any Lender originals or copies of any documents, instruments, notices,
communications or other information received by the Agent from the Borrower,
any Subsidiary, the Majority Lenders, the Required Lenders, any Lender or any
other Person under or in connection with this Credit Agreement or any other
Credit Document except (i) as specifically provided in this Credit Agreement or
any other Credit Document and (ii) as specifically requested from time to time
in writing by any Lender with respect to a specific document, instrument,
notice or other written communication received by and in the possession of the
Agent pursuant hereto at the time of receipt of such request and then only in
accordance with such specific request.

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ARTICLE 9. Miscellaneous.

9.1 SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER HEREBY
IRREVOCABLY AND UNCONDITIONALLY:

(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO
WHICH IT IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF;

(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
PLEAD OR CLAIM THE SAME;

(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL
(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE
BORROWER AT ITS ADDRESS SET FORTH IN SUBSECTION 9.5 OR AT SUCH OTHER
ADDRESS OF WHICH THE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;

(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION;

(e) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR CROSS-CLAIM
IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE RELEVANT TO,
SUCH ACTION OR PROCEEDING; AND

(f) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AM PROTEST AND ANY
NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT.

9.2 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE ISSUING BANKS
AND THE LENDERS EACH HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, THE CREDIT
DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.

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9.3 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF
THIS CREDIT AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.

9.4 Waivers. No delay or omission of the Agent, any Issuing Bank or
the Lenders to exercise any right or remedy hereunder, whether before or after
the happening of any Event of Default, shall impair any such right or shall
operate as a waiver thereof or as a waiver of any such Event of Default. No
single or partial exercise by the Agent, any Issuing Bank or the Lenders of any
right or remedy shall preclude any other or further exercise thereof, or
preclude any other right or remedy.

9.5 Notices. Except as otherwise provided herein, all notices and
correspondences hereunder to any party here at shall be in writing and sent to
such party by certified or registered mail, return receipt requested, or by
overnight delivery service, with all charges prepaid, or by facsimile
transmission, promptly confirmed in writing sent by first class mail, addressed
as follows:

If to the Bank Agent:

The Bank of Tokyo
1251 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇

If to the Borrower:

Florida Steel Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇

if to any Lender, to its address for notices set forth next to its name on
Annex I hereto or, as to any party, to such other address as such party shall
specify by a notice in writing to the other parties. All such notices and
correspondence shall be deemed given (i) if sent by certified or registered
mail, three (3) Business Days after being postmarked, (ii) if sent by overnight
delivery service, when received at the above stated addresses or when delivery
is refused and (iii) if sent by facsimile transmission, when evidence of
successful transmission is received; provided, however, that no notices or
other communications to the Agent shall be effective until actually received by
it.

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9.6 Assignments. (a) The Borrower shall not have the right to
assign this Credit Agreement or any interest therein except with the prior
written consent of the Agent and all the Lenders.

(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an affiliate of such
Lender except to the extent such transfer would result in increased costs to
the Borrower.

(c) Each Lender may, with the consent of the Agent, the Borrower and
the Issuing Banks (such consents not to be unreasonably withheld), but without
consent

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of any other Lender, assign to one or more banks or other financial
institutions all or a portion of its rights and obligations under this Credit
Agreement and the Revolving Notes; provided that (i) for each such assignment,
the parties thereto shall execute and deliver to the Agent, for its acceptance
and recording in the Register (as defined below), an Assignment and Assumption
Agreement, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,000, (ii) no such assignment shall be for
less than $5,000,000 of such Lender's Commitment, unless such assignment is to
a then current holder of a Note or unless the Agent and the Borrower shall
otherwise consent, and (iii) the Commitment of each Initial Lender, after
giving effect to all such assignments by it, shall not be less than $15,000,000.
Upon such execution and delivery of the Assignment and Assumption Agreement to
the Agent, from and after the date specified as the effective date in the
Assignment and Assumption Agreement (the "Acceptance Date"), (x) the assignee
thereunder shall be a party hereto, and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Assumption Agreement, such assignee shall have the rights and obligations of a
"Lender" hereunder and (y) the assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Assumption Agreement, relinquish its rights (other than any
rights it may have pursuant to Section 2.14 and 9.8 which will survive) and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption Agreement covering all or the remaining portion of an
assigning Lender's rights and obligations under this Credit Agreement, such
Lender shall cease to be a party hereto).

(d) By executing and delivering as Assignment and Assumption
Agreement, the assignee thereunder confirms and agrees as follows: (i) other
than as provided in such Assignment and Assumption Agreement, neither the
assigning Lender nor the Agent makes any representation or warranty or assumes
any responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Credit Agreement, the Notes or any other instrument or document furnished
pursuant hereto or the value or existence of the Collateral or the validity,
perfection or priority of the Liens granted to the Lenders in the Collateral,
(ii) neither such assigning Lender nor the Agent makes any representation or
warranty or assumes any responsibility with respect to the financial condition
of the Borrower or any other Credit Party or the performance

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or observance by the Borrower or any other Credit Party of any of its
obligations under this Credit Agreement or any other instrument or document
furnished pursuant hereto, (iii) such assignee confirms that it has received a
copy of this Credit Agreement, together with copies of the financial statements
referred to in Section 4.6 and 5.1 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Assumption Agreement, (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Credit Agreement, (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Credit Agreement as are delegated to the Agent by the
therms hereof, together with such powers as are reasonably incidental thereto
and (vi) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Credit Agreement are
required to be performed by it as a Lender.

(e) The Agent shall maintain at its Payment Office a copy of each
Assignment and Assumption Agreement delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register and copies
of each Assignment and Assumption Agreement shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.

(f) Upon its receipt of an Assignment and Assumption Agreement
executed by an assigning Lender, together with the Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Assumption Agreement has
been completed and is in substantially the form of Exhibit O, (i) accept such
Assignment and Assumption Agreement, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
Within fifteen (15) Business Days after its receipt of such notice, the Borrower
shall execute and deliver to the Agent in exchange for the surrendered Note or
Notes a corresponding new Note or Notes to the order of the assignee in an
amount equal to the

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Commitment or Commitments assumed by it pursuant to such Assignment and
Assumption Agreement and, if the assigning Lender has retained a Commitment or
Commitments hereunder, a new corresponding Note or Notes to the order of the
assigning Lender in an amount equal to the Commitment or Commitments retained
by it hereunder. Such new Note or Notes shall re-evidence the indebtedness
outstanding under the old Note or Notes and shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the Closing Date and shall otherwise be in substantially
the form of the Note or Notes subject to such assignments.

(g) Each Lender may (with the consent of the Agent and the Borrower,
which consent shall not be unreasonably withheld) sell participations to one or
more parties in or to all or a portion of its rights and obligations under this
Credit Agreement (including, without limitation, all or a portion of its
Commitments, the Loans owing to it and the Note or Notes held by it); provided
that (i) such Lender's obligations under this Credit Agreement (including,
without limitation, its Commitments to the Borrower hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Lender shall
remain the holder of any such Note for all purposes of this Credit Agreement,
(iv) the Borrower, the Agent, and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights
and obligations under this Credit Agreement, (v) the selling Lender shall pay
to the Administrative Agent a processing fee of $3,000 with respect to each
such sale of a participation and (vi) such Lender shall not transfer, grant,
assign or sell any participation under which the participant shall have rights
to approve any amendment or waiver of this Credit Agreement except to the
extent such amendment or waiver would (A) extend the final maturity date or the
date for the payments of any installment of fees or principal or interest of
any Loans or Letter of Credit reimbursement obligations in which such
participant is participating, (B) reduce the amount of any principal of the
Loans or LOC Reimbursement Obligations in which such participant is
participating, (C) except as otherwise expressly provided in this Credit
Agreement, reduce the interest rate applicable to the Loans or Unpaid LOC
Reimbursement Obligations in which such participant is participating, or (D)
except as otherwise expressly provided in this Credit Agreement, reduce any
Fees payable hereunder. Any such participant shall be entitled to the benefits
of Section 2.14 with respect to its participation.

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(h) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in any manner
or under any circumstances that would require registration or qualification of,
or filings in respect of, any Loan, Note or other Obligation under the
securities laws of the United States of America or of any jurisdiction.

(i) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may disclose any
information in its possession regarding the Borrower.

(j) The parties to an assignment or participation (namely the
assignor and assignees) shall be jointly and severally liable to the Agent for
all costs and expenses incurred by the Agent in connection with such assignment
or participation and shall pay all stamp, documentary, excise, privilege,
intangible or similar levies or taxes imposed with respect to such assignment
or participation.

9.7 Confidentiality. (a) Subject to the provisions of paragraph (b)
of this Section 9.7, the Agent and each Lender agrees that it will use its
reasonable efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, advisors or counsel) any information
with respect to the Borrower or any of its Subsidiaries which is furnished
pursuant to this Agreement or any other Credit Document and which is designated
by the Borrower to the Lenders or the Agent in writing as confidential;
provided that the Agent and any Lender may disclose any such information (i) to
each other (ii) as has become generally available to the public, (iii) as may
be required or appropriate in any report, statement or testimony submitted to
any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over the Agent or such Lender or to the Board of Governors of the
Federal Reserve System or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(iv) as may be required or appropriate in respect to any summons or subpoena or
in connection with any litigation, (v) in order to comply with any law, order,
regulation or ruling applicable to such Lender, (vi) to any prospective or
actual transferee or participant in connection with any contemplated transfer
or participation of any of the Notes or Commitments or any interest therein by
such Lender, provided that such prospective transferee or participant agrees
with such Lender to be bound by the provisions of this Section 9.7(a) and (vii)
in connection with the enforcement of the Borrower's obligation hereunder.

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(b) The Borrower hereby acknowledges and agrees that each Lender and
the Agent may share with any of its Affiliates any information related to the
Borrower or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of the Borrower
or any of its Subsidiaries, provided such Affiliates shall be subject to the
provisions of this Section 9.7 to the same extent as such Lender).

9.8 Indemnification; Expense.

(a) The Borrower shall and hereby agrees to indemnify, defend and
hold harmless the Agent, each issuing Bank and each Lender and their respective
directors, officers, agents, employees and counsel (each herein called an
"Indemnitee") from and against (i) any and all losses, claims, damages,
liabilities, deficiencies, judgments or expenses (collectively, "Losses")
incurred by such Indemnitee (except to the extent that any such Loss is finally
judicially determined to have resulted from such Indemnitee's own gross
negligence or willful misconduct) arising out of or by reason of any
litigations, investigations, claims or proceedings which arise out of or are in
any way related to (A) this Credit Agreement or the transactions contemplated
thereby, (B) the issuance of any Facility Letters of Credit, (C) the failure of
any Issuing Bank to honor a drawing under any Facility Letter of Credit as a
result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority, (D) any actual
or proposed use by the Borrower of the proceeds of the Loans or (E) the Agent or
the Lenders entering into this Credit Agreement, the other Credit Documents or
any other agreements and documents relating hereto, including, without
limitation, amounts paid in settlement, court costs and the reasonable fees and
disbursements of counsel incurred in connection with any such litigation,
investigation, claim or proceeding or any advice rendered in connection with any
of the foregoing and (ii) any Losses, claims, damages, liabilities or
deficiencies incurred in connection with any remedial or other action taken by
the Borrower, any of the Subsidiaries or any of the Lenders in connection with
any failure by the Borrower or any of the Subsidiaries, or any of their
respective properties, to comply with any Environmental Laws. If and to the
extent that the obligations of the Borrower hereunder are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law. The Borrower's obligations hereunder shall survive any
termination of this Credit Agreement and the other Credit Documents and the

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143
payment in full of the Obligations, and are in addition to, and not in
substitution of, any of its other obligations under this Credit Agreement.

(b) The Borrower shall also, upon demand, (i) subject to the terms of the
Fee Letter, pay to the Agent all costs or expenses (including reasonable fees
and disbursements of counsel) incurred by the Agent or any Co-Administrative
Agent in connection with the preparation of this Credit Agreement and the other
Credit Documents and (ii) pay to the Agent and each Lender all costs and
expenses (including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Agent or such Lender in (A) enforcing or
defending its rights under or in respect of this Credit Agreement, the other
Credit Documents or any other document or instrument now or hereafter executed
and delivered in connection herewith, (B) in collecting the Loans, (C) in
foreclosing its Lien on, or otherwise realizing upon, the Collateral or any part
thereof and (D) obtaining any legal, accounting or other advice in connection
with any of the foregoing.

9.9 Entire Agreement: Successors and Assigns. This Credit Agreement, the
other Credit Documents and the Fee Letter constitute the entire agreement among
the Borrower, the Agent and the Lenders, supersede any prior agreements among
them, and shall bind and benefit the Borrower and the Lenders and their
respective successors and permitted assigns.

9.10 Amendments, Etc. No amendment or waiver of any provision of this
Credit Agreement or any other Credit Document, nor any consent to any departure
by any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Required Lenders, and each such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that no amendment, waiver or consent
shall, unless in writing and signed by all the Lenders, do any of the following:
(i) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations, (ii) except as otherwise expressly provided in this
Agreement, reduce the principal of, or interest on, the Loans or any Unpaid LOC
Reimbursement Obligations or any fees hereunder, (iii) postpone any date fixed
for any payment in respect of principal of, or interest on, the Loans or any LOC
Reimbursement Obligations or any fees hereunder, (iv) change the percentage of
the Commitments, or any minimum requirement, necessary for the Lenders, the
Required Lenders or the Majority Lenders to take any action hereunder, (v)
except as otherwise expressly provided in

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144
this Credit Agreement, and other than in connection with the sale or other
disposition of any asset of the Borrower permitted under this Credit Agreement,
release any Liens in favor of the Lenders on all or a substantial portion of the
Collateral or (vi) amend or waive this Section 9.10, or change the definition of
"Majority Lenders" or "Required Lenders"; and provided, further, that no such
amendment, modification, waiver or consent (collectively a "Change") shall in
any event be effective unless in writing and signed by (A) the Agent, if such
Change affects Article 8 or any rights, duties, obligations, indemnities or
exculpations of the Agent (in its capacity as such) under any Credit Document,
(B), the Swingline Lender, if such Change affects Sections 2.2 or 2.5, any
Swingline Loan or the Swingline Commitment or any rights, duties or obligations
of the Swingline Lender (in its capacity as such) under any Credit Document, (C)
each Issuing Bank, if such Change affects Section 2.3 or 2.7 or any Facility
Letter of Credit issued by such Issuing Bank, the LOC Reimbursement Obligations
or LOC Fronting Fees owing or payable to such Issuing Bank or any Letter of
Credit Application of such Issuing Bank or any rights, duties, obligations or
indemnities of such Issuing Bank (in its capacity as such) under the Credit
Document or (b) each Co-Administrative Agent, if such Change affects Section
9.12 or any rights, duties, obligations, indemnities or exculpation of such
Co-Agent (in it capacity as such). Notwithstanding any of the foregoing to the
contrary, the consent of the Borrower shall not be required for any amendment,
modification or waiver of the provisions of Article 8 unless such amendment
imposes additional obligations or liabilities on the Borrower. In addition,
the Borrower and the Lenders hereby authorize the Agent to modify this Credit
Agreement by unilaterally amending or supplementing Annex I form time to time
in the manner requested by the Borrower, the Agent or any Lender in order to
reflect any assignments or transfers of the Loans and Commitments as provided
for in Section 9.6. The Agent shall promptly deliver a copy of any such
modification of Annex I to the Borrower and each Lender.

9.11 Nonliability of Agent and Lenders. The relationship between the
Borrower, on the one hand, and the Lenders, on the other, shall be solely that
of borrower and lender. Neither the Agent nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Agent nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations.

9.12 The Co-Administrative Agents. The Co-Administrative Agents (in
their capacity as such) shall

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145
have no duty, liability or obligation hereunder or under any other Credit
Document to any party hereto or thereto.

9.13 Independent Nature of Lenders' Rights. The amounts payable at any
time hereunder to each Lender under such Lender's Note or Notes shall be a
separate and independent debt of the Borrower.

9.14 Counterparts. This Credit Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

9.15 Effectiveness. This Credit Agreement shall become effective on the
date (the "Effective Date") on which all of the parties hereto shall have signed
a copy hereof (whether the same or different copies) and shall have delivered
the same to the Agent or, in the case of any Lender, shall have given to the
Agent written, telecopied or telex notice (actually received by it) that a
counterpart of this Credit Agreement has been signed by such Lender and mailed
by it to the Agent.

9.16 Severability. In case any provision in or obligation under this
Credit Agreement or the Notes or the other Credit Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

9.17 Maximum Rate. Notwithstanding anything to the contrary contained
elsewhere in this Credit Agreement or in any other Credit Document, the
Borrower, the Agent and the Lenders hereby agree that all agreements among them
under this Credit Agreement and the other Credit Documents, whether now existing
or hereafter arising and whether written or oral, are expressly limited so that
in no contingency or event whatsoever shall the amount paid, or agreed to be
paid, to the Agent or any Lender for the use, forbearance, or detention of the
money loaned to the Borrower and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstances
whatsoever, fulfillment of any provisions of this Credit Agreement or any of the
other Credit Documents at the time performance of such provision shall be due
shall exceed the Highest Lawful Rate, then, automatically, the obligation to be
fulfilled shall be modified or reduced

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146
to the extent necessary to limit such interest to the Highest Lawful Rate, and
if from any such circumstance and Lender should ever receive anything of value
deemed interest by applicable law which would exceed the Highest Lawful Rate,
such excessive interest shall be applied to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the Borrower. All
sums paid or agreed to be paid to the Agent or any Lender for the use,
forbearance, or detention of the obligations and other indebtedness of the
Borrower to the Agent or any Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the actual rate of
interest on account of all such indebtedness does not exceed the Highest Lawful
Rate throughout the entire term of such indebtedness. The terms and provisions
of this Section shall control every other provision of this Credit Agreement and
all agreements among the Borrower, the Agent and the Lenders.

9.18 Right of Setoff. In addition to and not in limitation of all
rights of offset that any Lender or Issuing Bank may have under applicable law,
each Lender and Issuing Bank shall, upon the occurrence of any Event of Default
and whether or not such Lender, Issuing Bank or such holder has made any demand
or the Obligations of the Borrower are matured, have the right to appropriate
and apply to the payment of the Obligations of the Borrower all deposits
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by such
Lender, Issuing Bank or other holder, including without limitation, any and all
amounts in any Lockbox Account, the Borrower's Corporate Account or the
Disbursement Accounts. Each Lender or Issuing Bank exercising such right shall
promptly notify the Agent thereof. Any amount received as a result of the
exercise of such rights shall be reallocated among the Lenders as set forth in
Section 2.15.4 hereof.

[Signature Pages Follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed and delivered by their proper and duly authorized
officers as of the date set forth above.

BORROWER:

FLORIDA STEEL CORPORATION

By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President & Chief
Financial Officer

AGENT:

THE BANK OF TOKYO, LTD.,
New York Agency,
as Agent

By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-fact

ISSUING BANKS AND
CO-ADMINISTRATIVE AGENTS:

THE BANK OF TOKYO, LTD.,
New York Agency, as an
Issuing Bank and
Co-Administrative Agent

By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-fact

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148
NATIONSBANK OF FLORIDA, N.A.,
as an Issuing Bank and
Co-Administrative Agent

By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President

LENDERS:

THE BANK OF TOKYO, LTD.,
New York Agency

By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Attorney-in-fact

NATIONSBANK OF FLORIDA, N.A.

By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President

THE DAIWA BANK, LTD.,
New York Branch

By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President

THE INDUSTRIAL BANK OF JAPAN,
LIMITED, Atlanta Agency

By: /s/ Shusai Nagai
---------------------------
Name: Shusai Nagai
Title: General Manager

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▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ Agency

By: /s/ Hiroyuki Veda
------------------------------
Name: Hiroyuki Veda
Title: Joint General Manager

THE SUMITOMO TRUST & BANKING
CO., LTD., New York Branch

By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Deputy General Manager

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150
FIRST AMENDMENT
TO
CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT is made and entered into this
16th day of April, 1996, but effective for all purposes as of March 31, 1996,
by and among AMERISTEEL CORPORATION (formerly known as FLORIDA STEEL
CORPORATION), a Florida corporation (the "Borrower"), and each of the
financial institutions signing this First Amendment (collectively, the
"Required Lenders").

WHEREAS, the Borrower, the Required Lenders and others entered into a
Credit Agreement dated as of June 9, 1995 in the maximum amount of $140,000,000
(the "Credit Agreement"); and

WHEREAS, Section 9.10 of the Credit Agreement provides that it may be
amended with the approval of the Required Lenders; and

WHEREAS, the parties desire to amend one of the definitions contained in
the Credit Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements of the parties contained herein, the parties agree that the
Credit Agreement shall, and it is, hereby amended as follows:

Section 1. Amendment. The definition of "Availability" in Section 1.1
of the Credit Agreement is hereby amended by adding the following sentence at
the end thereof.

For these purposes, the aggregate amount of outstanding Facility
LOC Obligations on any date shall not include that portion of the
Irrevocable Letter of Credit issued by NationsBank, dated October
25, 1995 in the maximum amount of $20,230,137, or any extension
thereof or replacement therefor, equal to the amount held on the
date of determination in the Construction Fund created under that
certain Indenture of Trust, dated as of October 1, 1995, between
The Industrial Development Board of the City of ▇▇▇▇▇▇▇ and
Norwest Bank Minnesota, N.A., as Trustee; provided, that during
any period of time Availability is increased solely as a result
of the applicability of this sentence, the Company will not
consent to any amendment of the Indenture relating to the
Construction Fund without first obtaining the consent of the
Required Lenders.

Section 2. Conditions of Effectiveness. This First Amendment shall
become effective as of the date which this First Amendment is dated when, and
only when, this First Amendment shall have been executed and delivered on behalf
of the Borrower and each of the Required Lenders.

Section 3. Representations and Warranties of the Borrower. Borrower
represents and warrants to the Lenders as follows:
151
(a) Borrower has full corporate power and authority to enter into
this First Amendment; and to carry out the provisions of this First Amendment
and the Credit Agreement, as amended hereby.

(b) This First Amendment has been duly authorized by all necessary
corporate proceedings, has been duly and validly executed and delivered by the
Borrower, and, assuming due authorization, execution and delivery by Borrower,
is a valid and legally binding agreement of the Borrower.

(c) No consent, approval, authorization, order, registration or
qualification of or with any court or regulatory authority or other
governmental body having jurisdiction over the Borrower is required for, and
the absence of which would adversely affect, the legal, valid and binding
execution and delivery of this First Amendment.

(d) The execution and delivery of this First Amendment (i) will not
violate or result in the violation of any existing provision of any law,
regulation or court order by which the Borrower or its property is bound, or of
the Articles of Incorporation or By-Laws of Borrower, (ii) will not conflict
with or result in a breach of or default under any of the terms or provisions
of any contract or agreement under which Borrower is an obligor or by which its
property is bound, and (iii) will not, except as contemplated herein, require
on the part of Borrower the filing with, notification to, or the consent or
approval of any governmental body, agency or authority or any other person.

Section 4. Reference to and Effect on the Credit Agreement.

(a) Upon the effectiveness of Section 1, each "hereunder", "hereof",
"herein" or words of like import, shall mean and be a reference to the Credit
Agreement as amended hereby.

(b) Except as specifically amended above, the Credit Agreement shall
remain in full force and effect and is ratified and confirmed.

(c) The execution, delivery and effectiveness of the First Amendment
shall not, except as expressly provided herein, operate as waiver of any right,
power of remedy of the Lenders under the Credit Agreement, nor constitute a
waiver of any provision of the Credit Agreement.

Section 5. Execution in Counterparts. The First Amendment may be executed
in one or more counterparts and by the parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.

Section 6. Governing Law. The First Amendment shall be governed by the
laws of the State of New York.

2.
152
Section 7. Headings. Section headings in this First Amendment are
included herein for convenience of reference only and shall not constitute a
part of this First Amendment for any other purposes.

IN WITNESS WHEREOF, the parties have caused this First Amendment to be
executed and delivered by their proper and duly authorized officers.

AMERISTEEL CORPORATION
----------------------

By: /s/
--------------------------------------------
Name:
Title:

THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH, as Agent, Co-Administrative
Agent, Issuing Bank, and Lender

By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President

NATIONSBANK OF FLORIDA, N.A.
as Co-Administrative Agent, Issuing Bank,
and Lender

By:/s/ Miles ▇. ▇▇▇▇▇▇▇ III
-------------------------------------------
Name: Miles ▇. ▇▇▇▇▇▇▇ III
Title: Vice President

THE INDUSTRIAL BANK OF JAPAN, LTD.
Atlanta Agency

By:/s/ Shusai Nagai
-------------------------------------------
Name: Shusai Nagai
Title: General Manager

3.
153
THE SUMITOMO BANK, LIMITED
Atlanta Agency

By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Joint General Manager

THE SUMITOMO BANK, LIMITED
New York Branch

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

THE SUMITOMO TRUST & BANKING CO., LTD.
New York Branch

By:/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Deputy General Manager

154

SECOND AMENDMENT

Dated as of December 30, 1996

CREDIT AGREEMENT

dated as of June 9, 1995
(AmeriSteel Corporation)

WHEREAS, AmeriSteel Corporation (formerly called Florida Steel
Corporation), a Florida Corporation (the "Borrower"), the Lenders (as defined in
the Credit Agreement referred to below), the Bank of Tokyo-Mitsubishi, Ltd.
(successor by merger to The Bank of Tokyo, Ltd.) and Nationsbank of Florida,
N.A., as Issuing Banks and Co-Administrative Agents, and The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch, as Agent (in such capacity, the
"Agent"), are parties to a Credit Agreement dated as of June 9, 1995, as amended
by a First Amendment dated as of April 16, 1996 (as so amended, the "Credit
Agreement"), pursuant to which the Lenders established a credit facility for the
Borrower, and made loans to the Borrower, on the terms and conditions set forth
in the Credit Agreement;

WHEREAS, the Borrower wishes to establish and operate a wholly-owned
subsidiary to accomplish certain business purposes of the Borrower, as more
fully set forth below;

WHEREAS, the Borrower has requested the Lenders, and the Lenders are
willing on the terms and conditions set forth below, to consent to (i) the
establishment of such subsidiary and to the transactions between the Borrower
and such

155

subsidiary set forth below and (ii) amend the Credit Agreement in the manner and
on the terms and conditions set forth below to reflect the establishment and
operation of such subsidiary as described herein.

NOW, THEREFORE, the parties hereto agree as follows:

1. Defined Terms. Except as otherwise expressly provided herein,
capitalized terms used herein which are defined in the Credit Agreement shall
have the meanings given to such terms in the Credit Agreement

2. Consent to Transaction. The Required Lenders hereby consents to the
following transaction (the "AmeriSteel Finance Transaction") and waive any
provisions of the Credit Agreement, as in effect on the date hereof, that would
not permit such transaction, but only to the extent that the AmeriSteel Finance
Transaction would violate such provisions:

Prior to January 1, 1997, the Borrower will establish and initially
capitalize (up to $10,000) a Delaware corporation under the name of
AmeriSteel Finance, Inc. ("AmeriSteel Finance") which will be a
wholly-owned subsidiary of the Borrower. AmeriSteel Finance will have a
bank account in its name established in Delaware. It will also lease space
and hire not more than 4 employees to conduct business in that state.

Prior to January 1, 1997, the Borrower will contribute to the capital
of AmeriSteel Finance all or a substantial portion of the Borrower's
accounts receivable. Said accounts receivable will be transferred by the
Borrower and accepted by AmeriSteel Finance, subject to the security
interest therein in favor of the Lenders and the Agent created by the
Security Agreement. Pursuant to the First Mortgage Indenture, the Borrower
and AmeriSteel Finance will enter into a Third Supplemental Indenture under
which AmeriSteel Finance will guarantee the First Mortgage Notes. During
the time that the accounts receivable transferred to it by the

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156

Borrower are owned by AmeriSteel Finance, the Borrower, for a reasonable
fee, will provide a limited number of ministerial services with respect to
such accounts receivables.

It is presently anticipated that, after January 1, 1997, AmeriSteel
Finance will declare a dividend, payable to the Borrower as its sole
stockholder, in the form of any uncollected receivables and available cash.
It is presently anticipated that the transactions described above will be
repeated each year so long, but only so long as AmeriSteel Finance is a
wholly-owned Subsidiary of the Borrower and there exists no Default under
the Credit Agreement.

Prior to the initial transfer of the Accounts of the Borrower to
AmeriSteel Finance, AmeriSteel Finance shall execute and deliver to the
Agent (i) a Security Agreement (the "AmeriSteel Finance Security
Agreement") granting to the Agent and the Lenders a security interest in
all accounts receivable and inventory owned by AmeriSteel Finance,
including all Accounts transferred to it by the Borrower, and (ii) a
Guaranty (the "AmeriSteel Finance Guaranty") pursuant to which AmeriSteel
Finance shall guarantee all obligations of the Borrower under the Credit
Agreement, the Notes and the other Credit Documents.

3. Amendments to Credit Agreement. The Credit Agreement is hereby amended as
follows:

(a) Section 1.1 of the Credit Agreement is amended by adding the following
definitions thereto in appropriate alphabetical sequence:

"AmeriSteel Finance" shall mean AmeriSteel Finance, Inc., a Delaware
corporation.

"AmeriSteel Finance Security Agreement" shall mean the Security
Agreement dated as of December 30, 1996 executed and delivered by
AmeriSteel Finance to the Agent, granting to the Agent, for the benefit of
the Agent and the Lenders, a security interest in all accounts receivable
and inventory owned by AmeriSteel Finance.

"AmeriSteel Finance Guaranty" means the Guaranty dated as of December
30, 1996 executed and delivered by AmeriSteel Finance to the Agent pursuant
to which the AmeriSteel Finance has guaranteed all obligations

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157

of the Borrower under the Credit Agreement, the Notes and all other
Credit Documents."

(b) The definition of the term "Accounts" in Section 1.1 of the Credit
Agreement is amended by adding the following sentence at the end of such
definition:

"The term "Accounts" shall also include Accounts of the Borrower
transferred to and owned by AmeriSteel Finance."

(c) The definition of the term "Eligible Accounts Receivable" in Section
1.1 of the Credit Agreement is amended by (i) adding the word "and of AmeriSteel
Finance's" immediately following the word "Borrower" in line 2 of said
definition; (ii) adding the words "and AmeriSteel Finance" immediately after the
word "Borrower" in line 5 of paragraph (f) and line 7 of paragraph (g) of said
definition and (iii) adding the words "or AmeriSteel Finance" immediately after
the word "Borrower" in lines 2 and 4 of paragraph (g) of said definition.

(d) The definition of the term "Collateral" in Section 1.1 of the Credit
Agreement is amended by adding the following sentence at the end thereof:

"The term 'Collateral' shall include all Accounts of the Borrower
transferred to AmeriSteel Finance and all proceeds thereof."

(e) The definition of the term "Collateral Documents" in Section 1.1 of the
Credit Agreement is amended by adding the words ", the AmeriSteel Finance
Security Agreement" after the words "Security Agreement" in said definition.

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158

(f) The definition of the term "Credit Documents" is amended by adding the
words, "the AmeriSteel Finance Guaranty" after the words "Collateral Documents"
in line 4 of said definition.

(g) The definition of the term "Fabricating Accounts" in Section 1.1 of the
Credit Agreement is amended by adding the words "or to AmeriSteel Finance"
immediately after the word "Borrower" in line 2 of said definition.

(h) Section 6.8 of the Credit Agreement is amended by deleting the word
"and" at the end of clause (d) thereof, redesignating clause (e) thereof as
clause (f) and adding the following new clause (e) to said Section 6.8:

"(e) so long as there exists no Defaults hereunder transfers of Accounts by
the Borrower to AmeriSteel Finance, provided such accounts receivable are
so transferred subject to the security interest therein created under the
Security Agreement in favor of the Secured Parties (as defined in the
Security Agreement)"; and

(i) Section 6.12 of the Credit Agreement is amended by (i) deleting the
word "and" at the end of clause (f) thereof and (ii) redesignating clause (g)
thereof as clause (h) and adding the following new clause (g) after clause (f)
thereof:

"(g) Investments by the Borrower in AmeriSteel Finance consisting of cash
contributions exceeding $10,000 plus contributions of accounts receivable of the
Borrower to AmeriSteel Finance to the extent permitted by, and subject to the
conditions set forth in, Section 6.8(e); and"

(j) Section 6.13 of the Credit Agreement is amended by (i) deleting the
word "and" before clause (iii) thereof, (ii) adding the following clause after
clause (iii) thereof:"

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159

and (iv) transactions permitted by clause (e) of Section 6.8" and (iv) adding
the words "transactions permitted in clause (e) of Section 6.8" in the
parenthetical in clause (a) of the proviso in said Section 6.13, so that said
parenthetical shall read as follows:

"(excluding payments under the Technical Assistance Agreement or payments
permitted under section 6.11 or 6.12 or transactions permitted by clause
(e) of Section 6.8)"

(k) Article 6 of the Credit Agreement is a amended by adding the following
new Section 6.20 thereto:

"6.20 AmeriSteel Finance. The Borrower will not (a) sell any shares of
the capital stock of AmeriSteel Finance owned by the Borrower, (b) permit
AmeriSteel Finance to issue any shares of its capital stock to any Person
other than the Borrower, (c) permit AmeriSteel Finance to merge or
consolidate with any Person other than the Borrower or (d) permit
AmeriSteel Finance to (i) engage in any business other than the ownership
of the Accounts of the Borrower transferred to AmeriSteel Finance or (ii)
incur any Indebtedness other than (x) trade payables incurred in the
ordinary course of business and Indebtedness for services rendered to
AmeriSteel Finance, and (y) Indebtedness in respect or the AmeriSteel
Finance Guaranty and the guaranty by AmeriSteel Finance of the First
Mortgage Notes or (iii) transfer accounts receivable owned by AmeriSteel
Finance to any Person other than Borrower".

(l) Section 7.1 of the Credit Agreement is amended by (i) deleting the
period at the end of clause (n) thereof and substituting therefor a semicolon
and the word "or" and (ii) adding the following new clauses (a) at the end
thereof:

"(o) AmeriSteel Finance shall cease to be a wholly owned subsidiary of
the Borrower.

4. Conditions Precedent. The Lenders' consent to the AmeriSteel Finance
Transaction and to the amendments to the

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Credit Agreement specified in Section 3 above shall not become effective until
the date (the "Amendment Effective Date") on which the Agent delivers a notice
to the Borrower and each Lender, substantially in the form of Exhibit A hereto
(the "Notice of Effectiveness"), stating that the Amendment Effective Date has
occurred; provided, however, that Sections 5 and 6 hereof shall be effective on
the date this Amendment is signed by the Borrower and the Required Banks. The
Agent shall not be obligated to deliver the Notice of Effectiveness unless the
Agent shall determine that each of the following conditions has been satisfied.

(a) The Agent shall have received counterparts of this Second
Amendment executed by the Borrower and the Required Banks;

(b) AmeriSteel Finance shall have executed and delivered to the Agent
counterparts of the AmeriSteel Finance Security Agreement and AmeriSteel
Finance Guaranty, each in form and substance satisfactory to the Agent;

(c) The Agent shall have received UCC-1 Financing Statements executed
by AmeriSteel Finance, as debtor, with respect to the security interests
created under the AmeriSteel Finance Security Agreement, such UCC-1
Financing Statements to be in proper form and sufficient number for filing
in Delaware and in each other jurisdiction specified by the Agent;

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(d) the Agent shall have received copies of the certificate of
incorporation and by-laws of AmeriSteel Finance, certified by the Secretary
of AmeriSteel Finance and a certificate of the Secretary of State of the
State of Delaware as to the due incorporation, valid existence and good
standing of AmeriSteel Finance in said State;

(e) the Agent shall have received a certificate of the Secretary of
AmeriSteel Finance as to (i) the resolutions of the Board of Directors of
AmeriSteel Finance authorizing the execution, delivery and performance by
the AmeriSteel Finance of the AmeriSteel Finance Security Agreement, the
AmeriSteel Finance Guaranty and all other documents to be executed and
delivered by AmeriSteel Finance in connection therewith and (ii) the name,
title and signature of each officer of AmeriSteel Finance executing and
delivering the AmeriSteel Finance Security Agreement, the AmeriSteel
Finance Guaranty or any other document or certificate in connection
therewith;

(f) the Agent shall have received an opinion of ________, counsel for
AmeriSteel Finance, satisfactory in form and substance to the Agent, as to
(i) the due incorporation and valid existence of AmeriSteel Finance, (ii)
the power and authority of AmeriSteel Finance to accept the Accounts of the
Borrower to be transferred to it and to execute deliver and perform the
AmeriSteel Finance Security Agreement and the AmeriSteel Finance

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Guaranty, (iii) the validity, binding effect and enforceability of the
AmeriSteel Finance Security Agreement and AmeriSteel Finance Guaranty, (iv)
the validity and perfection of the Security interest created under the
AmeriSteel Finance Security Agreement and (v) such other matters as the
Agent shall require;

(g) the Agent shall have been furnished with copies of all documents
delivered by AmeriSteel Finance or the Borrower in respect of the
AmeriSteel Finance Transaction to the Trustee under the First Mortgage
Indenture in connection with the Third Supplemental Indenture

(h) the Agent shall have received all other documents and instruments
requested by it in connection with the AmeriSteel Finance Transaction or
this Second Amendment; and

(i) the Borrower shall have paid the invoice of counsel for the Agent
in connection with this Second Amendment and the transactions contemplated
hereby.

5. Representations, and Warranties of the Borrower. The Borrower represents
and warrants to the Lenders and the Agent as follows:

(a) The Borrower has full corporate power and authority to enter into
this Second Amendment and to carry out the provisions of this Second
Amendment and the Credit Agreement, as amended hereby.

(b) This Second Amendment has been duly authorized by all necessary
corporate proceedings, has been duly and

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validly executed and delivered by the Borrower, and is a valid and legally
binding obligation of the Borrower.

(c) No consent, approval, authorization, order, registration or
qualification of or with any court or regulatory authority or other
governmental body having jurisdiction over the Borrower is required for,
and the absence of which would adversely affect, the legality, validity,
binding effect or enforceability, of this Second Amendment;

(d) The execution and delivery of this Second Amendment (i) will not
violate or result in the violation of any existing provision of any law,
regulation or court order by which the Borrower or its property is bound,
or of the Articles of Incorporation or By-Laws of Borrower, (ii) will not
conflict with or result in a breach of or default under any of the terms or
provisions of any contract or agreement under which Borrower is an obligor
or by which it or its property is bound, and (iii) will not, except as
specified herein, require on the part of Borrower the filing with,
notification to, or the consent or approval of any governmental body,
agency or authority, or any other Person.

6. Miscellaneous

(a) Expenses. Without limiting the rights of the Lenders and the Agent
under Section 9.4 the Credit Agreement, the Borrower agrees to pay all
out-of-pocket costs and expenses incurred by the Agent (including, without

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limitation, reasonable fees and disbursements of counsel to the Agent) in
connection with the preparation of this Second Amendment.

(b) WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE ISSUING BANKS AND
THE LENDERS EACH HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING UNDER OR RELATING TO THIS SECOND AMENDMENT

(c) Continuing Effectiveness of Credit Agreement. Except as expressly
amended hereby, all terms, conditions, covenants, representations and warranties
contained in the Credit Agreement or any other Credit Document, and all rights
and obligations thereunder of the parties thereto, shall remain in full force
and effect. The execution, delivery and effectiveness of this Second Amendment
shall not, except as expressly provided herein, operate as waiver of any right,
power or remedy of the Agent or Lenders under the Credit Agreement or any other
Credit Documents, or constitute a waiver of any provision of the Credit
Agreement or any other Credit Documents.

(d) Counterparts. This Second Amendment may be executed in any number of
separate counterparts, all of which taken together shall be deemed to
constitute one and the same instrument, and all signatures need not appear on
any one counterpart. Any party hereto may execute and deliver a counterpart of
this Second Amendment by delivering to the Agent, by facsimile transmission, the
signature page of this

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by facsimile transmission a counterpart of this Second Amendment signed by it
shall promptly thereafter also deliver a manually signed counterpart of this
Second Amendment to the Agent.

(e) Effectiveness. This Amendment shall become effective when counterparts
of this Amendment signed by the Borrower and the Required Lenders are received
by the Agent (including receipt by fascimile transmission); provided that
Sections 2 and 3 hereof shall in any event not become effective until the
Amendment Effective Date.

(f) Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflict
of laws rules which would make the laws of another jurisdiction applicable.

IN WITNESS WHEREOF, each party hereto has executed this Amendment by its
duly authorized officer as of the date first written above.

AmeriSteel Corporation

By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President and Chief
Financial Officer

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THE BANK OF TOKYO-MITSUBISHI LTD.,
NEW YORK BRANCH, as Agent,
Co-Administrative Agent, Issuing
Bank, and Lender