GENCORP INC
EX-10.1 CREDIT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>l10932aexv10w1.txt
<DESCRIPTION>EX-10.1 CREDIT AGREEMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.1

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                                                                  EXECUTION COPY

                                  $180,000,000

                                CREDIT AGREEMENT

                                      among

                                  GENCORP INC.,
                                  as Borrower,

                       ITS MATERIAL DOMESTIC SUBSIDIARIES
                        FROM TIME TO TIME PARTIES HERETO,
                                 as Guarantors,

                           THE LENDERS PARTIES HERETO,

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                            as Administrative Agent,

                            THE BANK OF NOVA SCOTIA,
                              as Syndication Agent,

                                       and

                               JPMORGAN CHASE BANK

                                       and

                              THE BANK OF NEW YORK,
                             as Documentation Agents

                          Dated as of December 6, 2004

                          WACHOVIA CAPITAL MARKETS, LLC
                    as Co-Lead Arranger and Sole Book Runner

                                       and

                             THE BANK OF NOVA SCOTIA
                               as Co-Lead Arranger

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<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                            Page
                                                                                            ----
<S>                                                                                         <C>
ARTICLE I  DEFINITIONS................................................................        1
    Section 1.1    Defined Terms......................................................        1
    Section 1.2    Other Definitional Provisions......................................       36
    Section 1.3    Accounting Terms...................................................       36
    Section 1.4    Time References....................................................       37

ARTICLE II  THE LOANS; AMOUNT AND TERMS...............................................       37
    Section 2.1    Revolving Loans....................................................       37
    Section 2.2    Revolving Letter of Credit Subfacility.............................       39
    Section 2.3    Swingline Loan Subfacility.........................................       43
    Section 2.4    Credit-Linked Facility--Term Loan Subfacility......................       45
    Section 2.5    Credit-Linked Facility - Letter of Credit Subfacility..............       47
    Section 2.6    Credit-Linked Deposits.............................................       52
    Section 2.7    Fees...............................................................       53
    Section 2.8    Commitment Reductions..............................................       54
    Section 2.9    Prepayments........................................................       55
    Section 2.10   Default Rate and Payment Dates.....................................       58
    Section 2.11   Conversion Options.................................................       59
    Section 2.12   Computation of Interest and Fees...................................       60
    Section 2.13   Pro Rata Treatment and Payments....................................       61
    Section 2.14   Non-Receipt of Funds by the Administrative Agent...................       63
    Section 2.15   Inability to Determine Interest Rate...............................       64
    Section 2.16   Illegality.........................................................       64
    Section 2.17   Requirements of Law................................................       65
    Section 2.18   Indemnity..........................................................       66
    Section 2.19   Taxes..............................................................       67
    Section 2.20   Indemnification; Nature of Issuing Lender's Duties.................       69
    Section 2.21   Replacement of Lenders.............................................       70

ARTICLE III  REPRESENTATIONS AND WARRANTIES...........................................       71
    Section 3.1    Financial Condition................................................       71
    Section 3.2    No Change..........................................................       72
    Section 3.3    Corporate Existence................................................       72
    Section 3.4    Corporate Power; Authorization; Enforceable Obligations............       72
    Section 3.5    Compliance with Laws; No Conflict; No Default......................       72
    Section 3.6    No Material Litigation.............................................       73
    Section 3.7    Investment Company Act; PUHCA......................................       73
    Section 3.8    Margin Regulations.................................................       74
    Section 3.9    ERISA..............................................................       74
    Section 3.10   Environmental Matters..............................................       74
    Section 3.11   Use of Proceeds....................................................       75
    Section 3.12   Subsidiaries.......................................................       75
    Section 3.13   Ownership..........................................................       76
    Section 3.14   Indebtedness.......................................................       76
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                         <C>
    Section 3.15   Taxes..............................................................       76
    Section 3.16   Intellectual Property Rights.......................................       76
    Section 3.17   Solvency...........................................................       77
    Section 3.18   Investments........................................................       77
    Section 3.19   Location of Collateral.............................................       77
    Section 3.20   No Burdensome Restrictions.........................................       78
    Section 3.21   Brokers' Fees......................................................       78
    Section 3.22   Labor Matters......................................................       78
    Section 3.23   Accuracy and Completeness of Information...........................       78
    Section 3.24   Material Contracts.................................................       78
    Section 3.25   Insurance..........................................................       79
    Section 3.26   Security Documents.................................................       79
    Section 3.27   Regulation H.......................................................       79
    Section 3.28   Classification of Senior Indebtedness..............................       79
    Section 3.29   Compliance with Trading with the Enemy Act, OFAC Rules and
                   Regulations and Patriot Act........................................       79

ARTICLE IV  CONDITIONS PRECEDENT......................................................       80
    Section 4.1    Conditions to Closing Date.........................................       80
    Section 4.2    Conditions to All Extensions of Credit.............................       85

ARTICLE V  AFFIRMATIVE COVENANTS......................................................       86
    Section 5.1    Financial Statements...............................................       87
    Section 5.2    Certificates; Other Information....................................       88
    Section 5.3    Payment of Taxes; Other Obligations; Performance of Certain
                   Other Agreements...................................................       89
    Section 5.4    Conduct of Business and Maintenance of Existence...................       90
    Section 5.5    Maintenance of Property; Insurance.................................       90
    Section 5.6    Inspection of Property; Books and Records; Discussions.............       91
    Section 5.7    Notices............................................................       91
    Section 5.8    Environmental Laws.................................................       92
    Section 5.9    Financial Covenants................................................       93
    Section 5.10   Additional Guarantors..............................................       94
    Section 5.11   Compliance with Law................................................       95
    Section 5.12   Pledged Assets.....................................................       95
    Section 5.13   Covenants Regarding Patents, Trademarks and Copyrights.............       96
    Section 5.14   Further Assurances; Post-Closing Covenants.........................       97

ARTICLE VI  NEGATIVE COVENANTS........................................................       98
    Section 6.1    Indebtedness.......................................................       98
    Section 6.2    Liens..............................................................      100
    Section 6.3    Nature of Business.................................................      101
    Section 6.4    Consolidation, Merger, Sale or Purchase of Assets, etc.............      101
    Section 6.5    Advances, Investments and Loans....................................      103
    Section 6.6    Transactions with Affiliates.......................................      103
    Section 6.7    Ownership of Subsidiaries; Restrictions............................      103
    Section 6.8    Fiscal Year; Organizational Documents; Material Contracts;
                   Accounting Policies................................................      103
</TABLE>

                                       ii
<PAGE>

<TABLE>
<S>                                                                                         <C>
    Section 6.9    Limitation on Restricted Actions...................................      104
    Section 6.10   Restricted Payments................................................      104
    Section 6.11   Amendment of Subordinated Debt.....................................      105
    Section 6.12   Sale Leasebacks....................................................      105
    Section 6.13   No Further Negative Pledges........................................      105
    Section 6.14   Accounts...........................................................      106

ARTICLE VII  EVENTS OF DEFAULT........................................................      106
    Section 7.1    Events of Default..................................................      106
    Section 7.2    Acceleration; Remedies.............................................      109

ARTICLE VIII  THE ADMINISTRATIVE AGENT................................................      110
    Section 8.1    Appointment........................................................      110
    Section 8.2    Delegation of Duties...............................................      110
    Section 8.3    Exculpatory Provisions.............................................      111
    Section 8.4    Reliance by Administrative Agent...................................      111
    Section 8.5    Notice of Default..................................................      112
    Section 8.6    Non-Reliance on Administrative Agent and Other Lenders.............      112
    Section 8.7    Indemnification....................................................      113
    Section 8.8    The Administrative Agent in Its Individual Capacity................      113
    Section 8.9    Successor Administrative Agent.....................................      113
    Section 8.10   Other Agents.......................................................      114
    Section 8.11   Release of Collateral and AFC......................................      114

ARTICLE IX  MISCELLANEOUS.............................................................      115
    Section 9.1    Amendments, Waivers and Release of Collateral......................      115
    Section 9.2    Notices............................................................      118
    Section 9.3    No Waiver; Cumulative Remedies.....................................      119
    Section 9.4    Survival of Representations and Warranties.........................      119
    Section 9.5    Payment of Expenses and Taxes......................................      119
    Section 9.6    Successors and Assigns; Participations; Purchasing Lenders.........      120
    Section 9.7    Adjustments; Set-off...............................................      123
    Section 9.8    Table of Contents and Section Headings.............................      124
    Section 9.9    Counterparts.......................................................      124
    Section 9.10   Integration; Effectiveness; Continuing Agreement...................      125
    Section 9.11   Severability.......................................................      125
    Section 9.12   Governing Law......................................................      126
    Section 9.13   Consent to Jurisdiction and Service of Process.....................      126
    Section 9.14   Confidentiality....................................................      126
    Section 9.15   Acknowledgments....................................................      127
    Section 9.16   Waivers of Jury Trial; Waiver of Consequential Damages.............      127
    Section 9.17   Patriot Act Notice.................................................      128

ARTICLE X  GUARANTY...................................................................      128
    Section 10.1   The Guaranty.......................................................      128
    Section 10.2   Bankruptcy.........................................................      129
    Section 10.3   Nature of Liability................................................      129
    Section 10.4   Independent Obligation.............................................      129
    Section 10.5   Authorization......................................................      130
</TABLE>

                                      iii
<PAGE>

<TABLE>
<S>                                                                                         <C>
    Section 10.6   Reliance...........................................................      130
    Section 10.7   Waiver.............................................................      130
    Section 10.8   Limitation on Enforcement..........................................      131
    Section 10.9   Confirmation of Payment............................................      132
</TABLE>

                                       iv
<PAGE>

SCHEDULES

Schedule 1.1(a)        Account Designation Letter
Schedule 1.1(b)        Investments
Schedule 1.1(c)        Liens
Schedule 1.1(d)        Consolidated Capital Expenditures/Consolidated Interest
                       Expense
Schedule 1.1(e)        Existing Letters of Credit
Schedule 2.1(a)        Schedule of Lenders and Commitments
Schedule 2.1(b)(i)     Form of Notice of Borrowing
Schedule 2.1(e)        Form of Revolving Note
Schedule 2.2(d)        Form of Term Loan Note
Schedule 2.3(d)        Form of Swingline Note
Schedule 2.5(j)        Form of Credit-Linked Note
Schedule 2.11          Form of Notice of Conversion/Extension
Schedule 2.19          Tax Exempt Certificate
Schedule 3.3           Jurisdictions of Organization and Qualification
Schedule 3.12          Subsidiaries
Schedule 3.16          Intellectual Property
Schedule 3.19(a)       Location of Real Property
Schedule 3.19(b)       Location of Collateral
Schedule 3.19(c)       Chief Executive Offices
Schedule 3.22          Labor Matters
Schedule 3.24          Material Contracts
Schedule 3.25          Insurance
Schedule 4.1(b)        Form of Secretary's Certificate
Schedule 4.1(h)        Form of Solvency Certificate
Schedule 5.2(b)        Form of Officer's Compliance Certificate
Schedule 5.10          Form of Joinder Agreement
Schedule 6.1(b)        Indebtedness
Schedule 9.2           Lenders' Lending Offices
Schedule 9.6(c)        Form of Commitment Transfer Supplement

                                        v
<PAGE>

      CREDIT AGREEMENT, dated as of December 6, 2004, among GENCORP INC., an
Ohio corporation (the "Borrower"), each of those Material Domestic Subsidiaries
of the Borrower identified as a "Guarantor" on the signature pages hereto and
such other Material Domestic Subsidiaries of the Borrower as may from time to
time become a party hereto (collectively the "Guarantors" and individually a
"Guarantor"), the several banks and other financial institutions from time to
time parties to this Credit Agreement (collectively the "Lenders" and
individually a "Lender"), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent" or the "Agent").

                              W I T N E S S E T H:

      WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in the amount of up to $180,000,000, as
more particularly described herein; and

      WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      SECTION 1.1 DEFINED TERMS.

      As used in this Credit Agreement, terms defined in the preamble to this
Credit Agreement have the meanings therein indicated, and the following terms
have the following meanings:

      "2007 Convertible Notes" shall mean, collectively, those certain 5.75%
unsecured convertible subordinated notes due April 2007 issued by the Borrower,
as the same may be amended, restated, supplemented or otherwise modified from
time to time as permitted hereunder.

      "2013 Senior Subordinated Notes" shall mean, collectively, those certain
9.50% unsecured senior subordinated notes due 2013 issued by the Borrower, as
the same may be amended, restated, supplemented or otherwise modified from time
to time as permitted hereunder.

      "2024 Convertible Notes" shall mean, collectively, those certain 4.00%
unsecured convertible subordinated notes due January 2024 issued by the
Borrower, as the same may be

<PAGE>

amended, restated, supplemented or otherwise modified from time to time as
permitted hereunder.

      "ABR Default Rate" shall mean, as of any date of determination, the
Alternate Base Rate plus the Applicable Percentage with respect to Alternate
Base Rate Loans on such date plus 2%.

      "Accelerated Maturity Date" shall mean (a) the date that is three (3)
months prior to the maturity date of the 2007 Convertible Notes, unless on or
before the date that is three (3) months prior to such maturity date, (i) the
2007 Convertible Notes have been redeemed (with funds other than Loan proceeds)
or refinanced in full on substantially similar or more favorable terms (and the
maturity thereof extended to a date that is at least six (6) months after the
Credit-Linked Maturity Date) and otherwise on terms reasonably satisfactory to
the Administrative Agent or (ii) the Borrower shall have deposited in a cash
collateral account maintained by the Administrative Agent or a Lender the amount
necessary to redeem (with funds other than Loan proceeds) the full amount of the
2007 Convertible Notes then outstanding, or (b) to the extent clause (a) does
not apply because the conditions in subclauses (i) or (ii) thereof have been
satisfied, the date that is three (3) months prior to the date that the holders
of the 2024 Convertible Notes have the option to require the Borrower to redeem
such 2024 Convertible Notes in accordance with the terms of such 2024
Convertible Notes and the documentation related thereto, unless on or before the
date that is three (3) months prior to such redemption date, (i) the 2024
Convertible Notes have been redeemed (with funds other than Loan proceeds) or
refinanced in full on substantially similar or more favorable terms (and the
maturity thereof extended to a date that is at least six (6) months after the
Credit-Linked Maturity Date) and otherwise on terms reasonably satisfactory to
the Administrative Agent or (ii) the Borrower shall have deposited in a cash
collateral account maintained by the Administrative Agent or a Lender the amount
necessary to redeem (with funds other than Loan proceeds) the full amount of the
2024 Convertible Notes then outstanding.

      "Account Designation Letter" shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrower to the Administrative Agent in
substantially the form attached hereto as Schedule 1.1(a).

      "Additional Credit Party" shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 5.10.

      "Administrative Agent" or "Agent" shall have the meaning set forth in the
first paragraph of this Credit Agreement and any successors in such capacity.

      "Aerojet" means Aerojet - General Corporation, an Ohio corporation.

      "AFC Sale" shall mean the sale or other disposition of all or
substantially all of the assets or voting stock of Aerojet Fine Chemicals LLC.

      "Affiliate" shall mean as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, a Person shall be deemed to
be "controlled by" a Person if such Person possesses,

                                       2
<PAGE>

directly or indirectly, power either (a) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such Person or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

      "Agreement" or "Credit Agreement" shall mean this Credit Agreement, as
amended, restated, amended and restated, modified, supplemented, extended,
replaced or increased from time to time in accordance with its terms.

      "Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced or otherwise identified from time to time by Wachovia at its principal
office in Charlotte, North Carolina as its prime rate. The parties hereto
acknowledge that the rate announced publicly by Wachovia as its Prime Rate is an
index or base rate and shall not necessarily be its lowest or best rate charged
to its customers or other banks; and "Federal Funds Effective Rate" shall mean,
for any day, 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 on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published on the next
succeeding Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.

      "Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.

      "Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable Level then in effect, it being understood
that the Applicable Percentage for (a) Revolving Loans and Term Loans that are
Alternate Base Rate Loans shall be the percentage set forth under the column
titled "Base Rate Margin" as applicable, (b) Revolving Loans and Term Loans that
are LIBOR Rate Loans shall be the percentage set forth under the column titled
"LIBOR Margin" as applicable and (c) the Revolving LOC Commitment Fee shall be
the percentage set forth under the column titled "LIBOR Margin" and "Revolving
Loans and Revolving LOC Commitment Fee":

                                       3
<PAGE>

<TABLE>
<CAPTION>
                                         LIBOR Margin
                                ------------------------------
            Unadjusted           Revolving Loans                          Base Rate Margin
               Senior           and Revolving LOC                ---------------------------------
Level      Leverage Ratio        Commitment Fee     Term Loans   Revolving Loans      Term Loans
-----      -----------------    -----------------   ----------   ---------------    --------------
<S>        <C>                  <C>                 <C>          <C>                <C>
  I        > or = 2.25 to 1.0        3.00%             3.00%          2.00%              2.00%

 II         < 2.25 to 1.0 but        2.75%             3.00%          1.75%              2.00%
           > or = 1.75 to 1.0

 III        < 1.75 to 1.0 but        2.50%             3.00%          1.50%              2.00%
           > or = 1.25 to 1.0

  V           < 1.25 to 1.0          2.25%             3.00%          1.25%              2.00%
</TABLE>

      The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Credit Parties the quarterly
financial information (in the case of the first three fiscal quarters of the
Borrower), the annual financial information (in the case of the fourth fiscal
quarter of the Borrower) and the certifications required to be delivered to the
Administrative Agent and the Lenders in accordance with the provisions of
Sections 5.1(a), 5.1(b) and 5.2(b) (each an "Interest Determination Date"). Such
Applicable Percentage shall be effective from such Interest Determination Date
until the next such Interest Determination Date. After the Closing Date, if the
Credit Parties shall fail to provide any of the financial information or
certifications in accordance with the provisions of Sections 5.1(a), 5.1(b) and
5.2(b), in addition to the default rate of interest that may be charged pursuant
to Section 2.10(b), the Applicable Percentage shall, on the date five (5)
Business Days after the date by which the Credit Parties were so required to
provide such financial information or certifications to the Administrative Agent
and the Lenders, be based on Level I until such time as such information or
certifications are provided, whereupon the Level shall be determined by the then
current Leverage Ratio. Notwithstanding the foregoing, the Applicable Percentage
shall be at Level II above for the first two fiscal quarters ending after the
Closing Date.

      "Approved Fund" shall mean, with respect to any Lender or other Person who
invests in commercial bank loans in the ordinary course of business, any other
fund or trust or entity that invests in commercial bank loans in the ordinary
course of business and is advised or managed by such Lender, by an Affiliate of
such Lender or other Persons or the same investment advisor as such Lender or by
an Affiliate of such Lender or investment advisor.

      "Arranger" shall mean Wachovia Capital Markets, LLC, together with its
successors and assigns.

      "Asset Disposition" shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a Joint Venture) of the Borrower or any Subsidiary,
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) the sale, lease or transfer of assets permitted by
subsections 6.4(a)(i) through (viii) and 6.4(a)(xi), or (ii) any Equity
Issuance.

                                       4
<PAGE>

      "Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

      "Bankruptcy Event" shall mean any of the events described in Section
7.1(f), after giving effect to any cure period described therein.

      "Borrower" shall have the meaning set forth in the first paragraph of this
Credit Agreement.

      "Borrowing Date" shall mean, in respect of any Loan, the date such Loan is
made.

      "Business" shall have the meaning set forth in Section 3.10.

      "Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.

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

      "Capital Lease Obligations" shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.

      "Capital Stock" shall mean (a) in the case of a corporation, capital
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (c) in the case of a partnership, partnership interests (whether
general or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

      "Cash Equivalents" shall mean (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve (12) months from the date of acquisition ("Government Obligations"),
(b) Dollar denominated (or foreign currency fully hedged to the Dollar) time
deposits, certificates of deposit, Eurodollar time deposits and Eurodollar
certificates of deposit of (i) any domestic commercial bank of recognized
standing having capital and surplus in excess of $250,000,000 or (ii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with maturities of not
more than 364 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any

                                       5
<PAGE>

Approved Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six (6) months of the date of acquisition,
(d) repurchase agreements with a bank or trust company (including a Lender) or a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (e) obligations of any State of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, and (f) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.

      "Change of Control" shall mean at any time the occurrence of one or more
of the following events: (a) any "person" or "group" (as such terms are used in
Section 13(d) and 14(d) of the Exchange Act), is or becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all securities that
such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of 30%
or more of the then outstanding Voting Securities of the Borrower; or (b) the
replacement of a majority of the Board of Directors of the Borrower over a
two-year period from the directors who constituted the Board of Directors at the
beginning of such period, and such replacement shall not have been approved by a
vote of at least a majority of the Board of Directors of the Borrower then still
in office who either were members of such Board of Directors at the beginning of
such period or whose election as a member of such Board of Directors was
previously so approved.

      "Claw-Back" shall have the meaning set forth in Section 4.1(s).

      "Closing Date" shall mean the date of this Credit Agreement.

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

      "Collateral" shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents and
any other collateral that may from time to time secure the Credit Party
Obligations.

      "Commitment" shall mean the Revolving Commitment, the Revolving LOC
Commitment, the Swingline Commitment and the Credit-Linked Commitment,
individually or collectively, as appropriate.

      "Commitment Percentage" shall mean the Revolving Commitment Percentage
and/or the Credit-Linked Commitment Percentage, as appropriate.

      "Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, in substantially the form of Schedule 9.6(c).

                                       6
<PAGE>

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

      "Consolidated" shall mean, when used with reference to financial
statements or financial statement items of the Borrower and its Subsidiaries or
any other Person, such statements or items on a consolidated basis in accordance
with the consolidation principles of GAAP.

      "Consolidated Capital Expenditures" shall mean, as of any date of
determination for the four quarter period ending on such date, all expenditures
of the Borrower and its Subsidiaries on a Consolidated basis for such period
that in accordance with GAAP would be classified as capital expenditures,
excluding capital expenditures constituting Capital Lease Obligations, less the
amount of proceeds from asset dispositions (other than dispositions of real
property) that are reinvested in the business; provided that, for purposes of
determining the Fixed Charge Coverage Ratio, Consolidated Capital Expenditures
for the fiscal quarters ending February 28, 2004, May 31, 2004 and August 31,
2004 shall be the amounts set forth on Schedule 1.1(d); provided further that
Consolidated Capital Expenditures shall not include (a) capital expenditures
assumed in connection with Permitted Acquisitions and (b) capital expenditures
in respect of reinvestment of proceeds derived from Recovery Events.

      "Consolidated Cash Taxes" shall mean, as of any date of determination for
the four quarter period ending on such date, the sum of (a) the aggregate of all
taxes (including, without limitation, any federal, state, local and foreign
income (or equivalent) taxes) actually paid by the Borrower and its Subsidiaries
on a Consolidated basis during such period minus (b) the aggregate of all cash
tax refunds received by the Borrower and its Subsidiaries on a Consolidated
basis during such period.

      "Consolidated EBITDAP" shall mean, as of any date of determination for the
four quarter period ending on such date, (a) Consolidated Net Income for such
period plus (b) the sum of the following (without duplication) to the extent
deducted in calculating Consolidated Net Income: (i) Consolidated Interest
Expense for such period, (ii) tax expense (including, without limitation, any
federal, state, local and foreign income (or equivalent) taxes) of the Borrower
and its Subsidiaries for such period, (iii) depreciation and amortization for
such period, (iv) any non-cash loss or expense associated with any unfunded
post-retirement health or insurance benefit plans of the Borrower, but only to
the extent Section 420 of the Internal Revenue Code (or its successor provision)
was utilized by the Borrower in the preceding fiscal year of the Borrower, (v)
non-cash pension plan expenses for such period, (vi) non-recurring fees and
expenses paid in connection with the Transactions as well as any write-off of
any unamortized fees and expenses associated with prior financings now affected
by the Transactions for such period, (vii) charges associated with legal
judgments rendering the Borrower contributorily liable under CERCLA in the case
of GenCorp Inc. vs. Olin Corporation in an amount not to exceed $30,000,000 and
(viii) non-cash charges related to discontinued operations for such period minus
the following (without duplication): (A) cash charges to the extent such cash
charges were added back to Consolidated Net Income in calculating Consolidated
EBITDAP for a prior period after the Closing Date, except for cash charges
related to the GDX manufacturing facility in Chartres,

                                       7
<PAGE>

France for such period in an amount not to exceed $6,000,000, (B) cash
contributions to pension plans during such period to the extent not already
included in the calculation of Consolidated Net Income and (C) non-cash pension
plan income for such period.

Further, (1) for any four-quarter period, Consolidated EBITDAP shall be
calculated on a pro forma basis to exclude the effects of the GDX business, (2)
for any four-quarter period ending on or after the closing date of the AFC Sale
(to the extent that such date occurs), Consolidated EBITDAP shall be calculated
on a pro forma basis to exclude the effects of AFC and (3) for any four-quarter
period ending on after the closing date of any Permitted Acquisition,
Consolidated EBITDAP shall be calculated on a pro forma basis assuming the
consummation of such Permitted Acquisition as of the first day of such period.

      "Consolidated Fixed Charges" shall mean, as of any date of determination
for the four quarter period ending on such date, the sum of (a) Consolidated
Interest Expense net of interest income for such period plus (b) Consolidated
Scheduled Debt Payments for such period plus (c) Consolidated Cash Taxes for
such period, in each case for the Borrower and its Subsidiaries on a
Consolidated basis.

      "Consolidated Funded Debt" shall mean, on any date of calculation, Funded
Debt of the Borrower and its Subsidiaries on a Consolidated basis.

      "Consolidated Interest Expense" shall mean, as of any date of
determination for the four quarter period ending on such date, all interest
expense (excluding amortization of debt discount and premium, but including the
interest component under Capital Leases) for such period of the Borrower and its
Subsidiaries on a Consolidated basis. Notwithstanding the foregoing, for
purposes of calculating Consolidated Interest Expense for the fiscal quarters
ending February 28, 2005, May 31, 2005 and August 31, 2005, Consolidated
Interest Expense shall be annualized during such fiscal quarters such that (i)
for the calculation of Consolidated Interest Expense as of February 28, 2005,
Consolidated Interest Expense for the fiscal quarter then ending will be
multiplied by four (4), (ii) for the calculation of Consolidated Interest
Expense as of May 31, 2005, Consolidated Interest Expense for the two fiscal
quarter period then ending will be multiplied by two (2) and (iii) for the
calculation of Consolidated Interest Expense as of August 31, 2005, Consolidated
Interest Expense for the three fiscal quarter period then ending will be
multiplied by one and one-third (1 1/3).

      "Consolidated Net Income" shall mean, as of any date of determination for
the four quarter period ending on such date, the net income or net loss
(excluding (a) extraordinary losses and gains, (b) gains or losses from any sale
of a division or line of business and (c) all Non-Cash Non-Operating income or
loss) of the Borrower and its Subsidiaries on a Consolidated basis for such
period; provided, however, with respect to any Subsidiary or Permitted Joint
Venture that is not consolidated with the Borrower for purposes of the
Borrower's financial statements, only cash dividends and distributions made by
such Subsidiary or Permitted Joint Venture to the Borrower or a Subsidiary shall
be included in the calculation of Consolidated Net Income. Except as otherwise
specified, the applicable period shall be for the four consecutive quarters
ending as of the date of computation.

                                       8
<PAGE>

      "Consolidated Scheduled Debt Payments" shall mean, as of any date of
determination for the four quarter period ending on such date, the sum of all
scheduled payments of principal on Consolidated Funded Debt for such period
(including the principal component of payments due on Capital Leases during the
applicable period ending on such date); it being understood that scheduled
payments of principal on Consolidated Funded Debt shall not include optional
prepayments or the mandatory prepayments required pursuant to Section 2.9.
Notwithstanding the foregoing, for purposes of calculating Consolidated
Scheduled Debt Payments for the fiscal quarters ending February 28, 2005, May
31, 2005 and August 31, 2005, Consolidated Scheduled Debt Payments shall be
annualized during such fiscal quarters such that (i) for the calculation of
Consolidated Scheduled Debt Payments as of February 28, 2005, Consolidated
Scheduled Debt Payments for the fiscal quarter then ending will be multiplied by
four (4), (ii) for the calculation of Consolidated Scheduled Debt Payments as of
May 31, 2005, Consolidated Scheduled Debt Payments for the two fiscal quarter
period then ending will be multiplied by two (2) and (iii) for the calculation
of Consolidated Scheduled Debt Payments as of August 31, 2005, Consolidated
Scheduled Debt Payments for the three fiscal quarter period then ending will be
multiplied by one and one-third (1 1/3).

      "Consolidated Total Assets" shall mean, with respect to any Person, the
book value, determined on a consolidated basis in accordance with GAAP, of all
assets of such Person and its Subsidiaries.

      "Consolidated Working Capital" shall mean, as of any date of
determination, the excess of (a) current assets (excluding cash and Cash
Equivalents) of the Borrower and its Subsidiaries on a Consolidated basis at
such time less (b) current liabilities (excluding current maturities of long
term debt) of the Borrower and its Subsidiaries on a Consolidated basis at such
time, all as determined in accordance with GAAP.

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

      "Copyright Act" shall have the meaning set forth in Section 3.16.

      "Copyright Licenses" shall mean any agreement, whether written or oral,
providing for the grant by or to a Person of any right under any Copyright,
including, without limitation, any thereof referred to in Schedule 3.16 to this
Credit Agreement.

      "Copyrights" shall mean all copyrights of the Credit Parties and their
Subsidiaries in all works, now existing or hereafter created or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Copyright Office or in any similar
office or agency of the United States, any state thereof or any other country or
any political subdivision thereof, or otherwise, including, without limitation,
any thereof referred to in Schedule 3.16 and all renewals thereof.

      "Credit Documents" shall mean this Credit Agreement, each of the Notes,
any Joinder Agreement, the Letters of Credit, the LOC Documents, the
Environmental Indemnity and the

                                       9
<PAGE>

Security Documents and all other agreements, documents, certificates and
instruments delivered to the Administrative Agent or any Lender by any Credit
Party in connection therewith (other than any agreement, document, certificate
or instrument related to a Hedging Agreement).

      "Credit-Linked Account" shall mean the account established and maintained
by the Administrative Agent in its name and under its sole dominion and control,
designated as the "Wachovia Bank, National Association, as Administrative
Agent--GenCorp. Inc. Credit Linked Account" that shall be used solely for the
purposes set forth in Sections 2.6(b).

      "Credit-Linked Commitment" shall mean, with respect to each Credit-Linked
Lender, the sum of such Credit-Linked Lender's Credit-Linked LOC Commitment and
Term Loan Commitment.

      "Credit-Linked Commitment Percentage" shall mean, for each Credit-Linked
Lender, the percentage identified as its Credit-Linked Commitment Percentage on
Schedule 2.1(a) or in the Register, as such percentage may be modified in
connection with any assignment made in accordance with the provisions of Section
9.6(c).

      "Credit-Linked Commitment Period" shall mean, with respect to
Credit-Linked Letters of Credit, the period from and including the Closing Date
to but excluding the date that is ten (10) days prior to the Credit-Linked
Maturity Date.

      "Credit-Linked Deposit" shall mean, with respect to any Credit-Linked
Lender, such Credit-Linked Lender's funded Credit-Linked Participation in the
Credit-Linked LOC Committed Amount and all Credit-Linked Letters of Credit
issued thereunder, which funded Credit-Linked Participation shall be in an
amount equal to such Credit-Linked Lender's Credit-Linked LOC Commitment and
shall be deposited into the Credit-Linked Account on the Closing Date (or on the
date such Person becomes a Credit-Linked Lender) in accordance with the terms of
Section 2.6(a).

      "Credit-Linked Issuing Lender" shall mean, with respect to any
Credit-Linked Letter of Credit, the Administrative Agent or such other Lender as
requested by the Borrower and approved by the Administrative Agent, or any other
Person that was the Administrative Agent or a Lender at the time it issued such
Credit-Linked Letter of Credit but has ceased to be the Administrative Agent or
a Lender under the Credit Agreement.

      "Credit-Linked Lenders" shall mean, as of any date of determination, the
Lenders that hold a Credit-Linked Commitment on such date.

      "Credit-Linked Letters of Credit" shall mean (a) any letter of credit
issued by the Credit-Linked Issuing Lender pursuant to Section 2.5(a) and (b)
any Existing Letter of Credit, in each case as such letter of credit may be
amended, modified, extended, renewed or replaced from time to time.

      "Credit-Linked LOC Commitment" shall mean the commitment of the
Credit-Linked Issuing Lender to issue Credit-Linked Letters of Credit and with
respect to each Credit-Linked

                                       10
<PAGE>

Lender, the commitment of such Credit-Linked Lender to purchase its
Credit-Linked Participation in the Credit-Linked Letters of Credit up to such
Credit-Linked Lender's Credit-Linked Commitment Percentage of the Credit-Linked
LOC Committed Amount as specified in Schedule 2.1(a) or in the Register, as such
amount may be reduced from time to time in accordance with the provisions
hereof.

      "Credit-Linked LOC Committed Amount" shall have the meaning set forth in
Section 2.5(a).

      "Credit-Linked LOC Fronting Fee" shall have the meaning set forth in
Section 2.7(d).

      "Credit-Linked LOC Obligations" shall mean, at any time, the sum of (i)
the maximum amount which is, or at any time thereafter may become, available to
be drawn under Credit-Linked Letters of Credit then outstanding, assuming
compliance with all requirements for drawings referred to in such Credit-Linked
Letters of Credit plus (ii) the aggregate amount of all drawings under
Credit-Linked Letters of Credit honored by the Credit-Linked Issuing Lender but
not theretofore reimbursed.

      "Credit-Linked Maturity Date" shall mean the earlier of (a) the date that
is six (6) years after the Closing Date and (b) to the extent applicable, the
Accelerated Maturity Date.

      "Credit-Linked Note" shall mean the promissory notes of the Borrower in
favor of each Credit-Linked Issuing Lender evidencing the Borrower's obligation
to reimburse such Credit-Linked Issuing Lender for draws under Credit-Linked
Letters of Credit provided by such Credit-Linked Issuing Lender pursuant to
Section 2.5, as such promissory note may be amended, modified, restated, amended
and restated, supplemented, extended, renewed or replaced from time to time.

      "Credit-Linked Participation" shall have the meaning set forth in Section
2.5(c).

      "Credit-Linked Purchase" shall have the meaning set forth in Section
2.5(d).

      "Credit Party" shall mean any of the Borrower or the Guarantors.

      "Credit Party Obligations" shall mean, without duplication, (a) all of the
obligations, indebtedness and liabilities of the Credit Parties to the Lenders
(including the Issuing Lenders) and the Administrative Agent, whenever arising,
under this Credit Agreement, the Notes or any of the other Credit Documents,
including principal, interest, fees, reimbursements and indemnification
obligations and other amounts (including, but not limited to, any interest
accruing after the occurrence of a filing of a petition of bankruptcy under the
Bankruptcy Code with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (b) solely for
purposes of the Security Documents and the Guaranty, all liabilities and
obligations, whenever arising, owing from any Credit Party or any of their
Subsidiaries to any Hedging Agreement Provider arising under any Secured Hedging
Agreement.

                                       11
<PAGE>

      "Customary Permitted Liens" shall mean:

      (a) Liens for taxes not yet due and payable or which are being contested
in good faith by appropriate proceedings diligently pursued; provided that (i)
any proceedings commenced for the enforcement of such Liens shall have been
stayed or suspended within 30 days of the commencement thereof and (ii)
provision for the payment of all such taxes known to such Person has been made
on the books of such Person to the extent required by GAAP;

      (b) mechanic's, processor's, materialman's, carrier's, warehousemen's,
landlord's and similar Liens (including statutory and common law landlord's
liens under leases to which any Credit Party or any Subsidiary is a party)
arising by operation of law and arising in the ordinary course of business and
securing obligations of such Person that are not overdue for a period of more
than ninety (90) days or are being contested in good faith by appropriate
proceedings diligently pursued; provided that (i) any proceedings commenced for
the enforcement of such Liens shall have been stayed or suspended within thirty
(30) days of the commencement thereof and (ii) provision for the payment of such
Liens has been made on the books of such Person to the extent required by GAAP;

      (c) Liens arising in connection with worker's compensation, unemployment
insurance, old age pensions and social security benefits which are not overdue
or are being contested in good faith by appropriate proceedings diligently
pursued; provided that (i) any proceedings commenced for the enforcement of such
Liens shall have been stayed or suspended within 30 days of the commencement
thereof and (ii) provision for the payment of such Liens has been made on the
books of such Person to the extent required by GAAP;

      (d) Liens (i) incurred or deposits made in the ordinary course of business
to secure the performance of bids, tenders, statutory obligations, fee and
expense arrangements with trustees and fiscal agents (exclusive of obligations
incurred in connection with the borrowing of money or the payment of the
deferred purchase price of property) and customary deposits granted in the
ordinary course of business under operating leases and (ii) securing surety,
indemnity, performance, appeal and release bonds; provided that (A) full
provision for the payment of all such obligations has been made on the books of
such Person to the extent required by GAAP and (B) the aggregate amount of all
such obligations does not exceed $1,000,000 at any time outstanding;

      (e) Permitted Real Property Encumbrances;

      (f) attachment, judgment or other similar Liens arising in connection with
court or arbitration proceedings involving individually and in the aggregate
liability of $1,000,000 or less at any one time; provided the same are
discharged, or that execution or enforcement thereof is stayed pending appeal,
within thirty (30) days or, in the case of any stay of execution or enforcement
pending appeal, within such lesser time during which such appeal may be taken;

      (g) leases or subleases granted to others not interfering in any material
respect with the business of the Borrower or any of its Subsidiaries and any
interest or title of a lessor under any lease permitted by this Agreement or the
Security Documents;

                                       12
<PAGE>

      (h) customary rights of set off, revocation, refund or chargeback under
deposit agreements or under the UCC of banks or other financial institutions
where the Borrower or any of its Subsidiaries maintains deposits in the ordinary
course of business permitted by this Agreement; and

      (i) Environmental Liens, to the extent that (i) any proceedings commenced
for the enforcement of such Liens shall have been suspended or are being
contested in good faith, (ii) provision for all liability and damages that are
the subject of said Environmental Liens has been made on the books of such
Person to the extent required by GAAP and (iii) such Liens do not relate to
obligations exceeding $5,000,000 in the aggregate at any one time.

      "Debt Issuance" shall mean the issuance of any Indebtedness by the Credit
Parties or any of their Subsidiaries (excluding any Equity Issuance or any
Indebtedness of the Credit Parties and their Subsidiaries permitted to be
incurred pursuant to Section 6.1 hereof (other than Section 6.1(j)).

      "Declined Amount" shall have the meaning set forth in Section
2.9(b)(viii)(B).

      "Default" shall mean any of the events specified in Section 7.1, whether
or not any requirement for the giving of notice or the lapse of time, or both,
or any other condition, has been satisfied.

      "Defaulting Lender" shall mean, at any time, any Lender that at such time
(a) has failed to make a Loan or fund its portion of the Credit-Linked Deposit
required pursuant to the terms of this Credit Agreement, including the funding
of a Revolving Participation Interest or a Credit-Linked Participation in
accordance with the terms hereof and such default remains uncured, (b) has
failed to pay to the Administrative Agent or any Lender an amount owed by such
Lender pursuant to the terms of this Credit Agreement and such default remains
uncured, or (c) has been deemed insolvent or has become subject to a bankruptcy
or insolvency proceeding or to a receiver, trustee or similar official.

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

      "Domestic Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's Domestic Lending Office located in the United States
as shown on Schedule 9.2; and thereafter, such other office of such Lender
located in the United States as such Lender may from time to time specify to the
Administrative Agent and the Borrower as the office of such Lender at which
Alternate Base Rate Loans of such Lender are to be made.

      "Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.

      "Environmental Indemnity" shall mean the Unsecured Environmental Indemnity
dated as of the Closing Date among the Credit Parties and the Administrative
Agent, for the benefit of the

                                       13
<PAGE>

Lenders, as the same may from time to time be amended, restated, amended and
restated, supplemented or otherwise modified in accordance with the terms hereof
and thereof.

      "Environmental Laws" shall mean any and all applicable foreign, federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Credit Agreement.

      "Environmental Lien" shall mean a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or any limitations or
restrictions placed upon any real property owned, leased or operated by the
Borrower or any of its Subsidiaries by any Government Authority or court, or (b)
damages relating to, or costs incurred by such Governmental Authority in
response to, a release or threatened release of Materials of Environmental
Concern into the environment.

      "Equity Issuance" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock (including, without limitation, any issuance of shares of its
Capital Stock pursuant to the exercise of options or warrants or pursuant to the
conversion of any debt securities to equity) or (b) warrants or options that are
exercisable for shares of its Capital Stock. The term "Equity Issuance" shall
not include (i) any Asset Disposition, (ii) any Debt Issuance or (iii) any
equity issuance as consideration for a Permitted Acquisition.

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

      "Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

      "Event of Default" shall mean any of the events specified in Section 7.1;
provided, however, that any requirement for the giving of notice or the lapse of
time, or both, or any other condition, has been satisfied.

      "Excess Cash Flow" shall mean, with respect to any fiscal year period of
the Borrower and its Subsidiaries on a Consolidated basis, an amount equal to
(a) Consolidated EBITDAP for such period plus (b) decreases in Consolidated
Working Capital for such period minus (c) Consolidated Capital Expenditures for
such period minus (d) Consolidated Interest Expense for such period to the
extent paid in cash minus (e) Consolidated Cash Taxes paid during such period
minus (f) Consolidated Scheduled Debt Payments made during such period minus (g)
the

                                       14
<PAGE>

sum of all optional prepayments of principal on the Term Loan minus (h) to the
extent included in the determination of Consolidated EBITDAP for such period,
cash proceeds from Permitted Real Estate Sales during such period minus (i)
increases in Consolidated Working Capital for such period and minus (j) any cash
expense associated with any unfunded post-retirement health or insurance benefit
plan of the Borrower and its Subsidiaries during such period.

      "Existing Letters of Credit" shall mean the letters of credit listed on
Schedule 1.1(e).

      "Existing Subordinated Notes" shall mean, collectively, the 2007
Convertible Notes, the 2013 Senior Subordinated Notes and the 2024 Convertible
Notes, as the same may be amended, restated, supplemented or otherwise modified
from time to time as permitted hereunder.

      "Extension of Credit" shall mean, as to any Lender, (a) the making of a
Loan by such Lender or (b) the issuance of, or participation in, a Letter of
Credit by such Lender.

      "Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".

      "Fee Letter" shall mean the letter agreement dated November 8, 2004,
addressed to the Borrower from Wachovia and WCM, as amended, modified or
otherwise supplemented.

      "Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of (i)
Consolidated EBITDAP for such period minus Consolidated Capital Expenditures for
such period to (ii) Consolidated Fixed Charges for such period.

      "Flood Hazard Property" shall have the meaning set forth in Section
4.1(e)(v).

      "Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.

      "Funded Debt" shall mean, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) the maximum amount of
earnout obligations to the extent such earnout obligations appear as liabilities
on a balance sheet of such Person, (c) the principal portion of all Capital
Lease Obligations of such Person, (d) the maximum amount of all letters of
credit issued or bankers' acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (e) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (f) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product, (g) all Indebtedness of others of the type described in
clauses (a) through (f) hereof secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (h) all Guaranty Obligations of such Person with respect to
Indebtedness of another Person of the type described in clauses (a) through (f)
hereof, and (i) all

                                       15
<PAGE>

Indebtedness of the type described in clauses (a) through (f) hereof of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer (to the extent that such Person is liable therefore)
calculated based on the percentage of such Indebtedness for which such Person is
liable; provided, however, that Funded Debt shall not include (i) Indebtedness
among the Credit Parties or (ii) Indebtedness permitted under Section 6.1(i).

      "GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.

      "Government Acts" shall have the meaning set forth in Section 2.20.

      "Governmental Approvals" shall mean all authorizations, consents,
approvals, permits, licenses and exemptions of, registrations and filings with,
and reports to, all Governmental Authorities.

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

      "Granite Agreement" shall have the meaning set forth in Section 6.4(a).

      "Guarantor" shall have the meaning set forth in the first paragraph of
this Credit Agreement.

      "Guaranty" shall mean the guaranty of the Guarantors set forth in Article
X.

      "Guaranty Obligations" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such Indebtedness or
any property constituting security therefor, (b) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (c) to lease or
purchase property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (d) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.

      "Hedging Agreement Provider" shall mean any Person that enters into a
Secured Hedging Agreement with a Credit Party or any of its Subsidiaries that is
permitted by Section 6.1 to the extent such Person is a Lender, an Affiliate of
a Lender or any other Person that was a Lender (or

                                       16
<PAGE>

an Affiliate of a Lender) at the time it entered into the Secured Hedging
Agreement but has ceased to be a Lender (or whose Affiliate has ceased to be a
Lender) under the Credit Agreement.

      "Hedging Agreements" shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate hedging agreements.

      "Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations (including, without
limitation, the maximum amount of earnout obligations) of such Person incurred,
issued or assumed as the deferred purchase price of property or services
purchased by such Person (other than trade debt incurred in the ordinary course
of business and due within six (6) months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (e) the principal
portion of all Capital Lease Obligations of such Person, (f) the maximum amount
of all letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn thereunder
(to the extent unreimbursed), (g) all preferred Capital Stock issued by such
Person and which by the terms thereof could be (at the request of the holders
thereof or otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration, (h) the principal balance outstanding under any synthetic
lease, tax retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product, (i) payment obligations of such Person
under non-compete agreements, (j) all obligations of such Person under Hedging
Agreements, excluding any portion thereof which would be accounted for as
interest expense under GAAP, (k) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements, (l) all
Indebtedness of others of the type described in clauses (a) through (k) hereof
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed, (m) all Guaranty
Obligations of such Person with respect to Indebtedness of another Person of the
type described in clauses (a) through (k) hereof, and (n) all Indebtedness of
the type described in clauses (a) through (k) hereof of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer (to the extent that such Person is liable therefore) calculated
based on the percentage of such Indebtedness for which such Person is liable.

      "Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.

                                       17
<PAGE>

      "Intellectual Property" shall mean the Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses of the Credit
Parties and their Subsidiaries, all goodwill associated therewith and all rights
to sue for infringement thereof.

      "Intercompany Note" means a demand promissory note (or a promissory note
payable on a date reasonably satisfactory to the Administrative Agent) issued by
a Subsidiary directly to the Borrower in form and substance that is satisfactory
to the Administrative Agent.

      "Interest Coverage Ratio" shall mean the ratio of (a) Consolidated EBITDAP
for such period to (b) Consolidated Interest Expense net of interest income for
such period.

      "Interest Payment Date" shall mean (a) as to any Alternate Base Rate Loan,
the last day of each March, June, September and December and on the applicable
Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three
(3) months or less, the last day of such Interest Period, (c) as to any LIBOR
Rate Loan having an Interest Period longer than three (3) months, (i) each three
(3) month anniversary following the first day of such Interest Period and (ii)
the last day of such Interest Period and (d) as to any Loan which is the subject
of a mandatory prepayment required pursuant to Section 2.9(b), the date on which
such mandatory prepayment is due.

      "Interest Period" shall mean, with respect to any LIBOR Rate Loan,

            (a) initially, the period commencing on the Borrowing Date or
      conversion date, as the case may be, with respect to such LIBOR Rate Loan
      and ending one, two, three or six months thereafter, subject to
      availability to all applicable Lenders, as selected by the Borrower in the
      Notice of Borrowing or Notice of Conversion given with respect thereto;
      and

            (b) thereafter, each period commencing on the last day of the
      immediately preceding Interest Period applicable to such LIBOR Rate Loan
      and ending one, two, three or six months thereafter, subject to
      availability to all applicable Lenders, as selected by the Borrower by
      irrevocable notice to the Administrative Agent not less than three
      Business Days prior to the last day of the then current Interest Period
      with respect thereto; provided that the foregoing provisions are subject
      to the following:

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

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

                                       18
<PAGE>

                  (iii) if the Borrower shall fail to give notice as provided
            above, the Borrower shall be deemed to have selected an Alternate
            Base Rate Loan to replace the affected LIBOR Rate Loan;

                  (iv) no Interest Period in respect of any Loan shall extend
            beyond the applicable Maturity Date and, further with regard to any
            Term Loan, no Interest Period shall extend beyond any principal
            amortization payment date with respect to such Term Loan unless the
            portion of such Term Loan consisting of Alternate Base Rate Loans
            together with the portion of such Term Loan consisting of LIBOR Rate
            Loans with Interest Periods expiring prior to or concurrently with
            the date such principal amortization payment date is due, is at
            least equal to the amount of such principal amortization payment due
            on such date; and

                  (v) no more than eight (8) LIBOR Rate Loans may be in effect
            at any time. For purposes hereof, LIBOR Rate Loans with different
            Interest Periods shall be considered as separate LIBOR Rate Loans,
            even if they shall begin on the same date, although borrowings,
            extensions and conversions may, in accordance with the provisions
            hereof, be combined at the end of existing Interest Periods to
            constitute a new LIBOR Rate Loan with a single Interest Period.

      "Investment" shall mean (a) the acquisition (whether for cash, property,
services, assumption of Indebtedness, securities or otherwise) of shares of
Capital Stock, other ownership interests or other securities of any Person or
bonds, notes, debentures or all or substantially all of the assets of any Person
or (b) any deposit with, or advance, loan or other extension of credit to, any
Person (other than deposits made in the ordinary course of business) or (c) any
other capital contribution to or investment in any Person, including, without
limitation, any Guaranty Obligation (including any support for a letter of
credit issued on behalf of such Person) incurred for the benefit of such Person.

      "Issuing Lenders" shall mean, as of any date of determination, the
Administrative Agent and any other Credit-Linked Issuing Lender or Revolving
Issuing Lender that has issued a Letter of Credit that is outstanding on such
date of determination.

      "Issuing Lender Fees" shall have the meaning set forth in Section 2.7(e).

      "Joinder Agreement" shall mean a Joinder Agreement in substantially the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.

      "Joint Venture" means any corporation, partnership, limited liability
company, joint venture or other similar legal arrangement (whether created by
contract or conducted through a separate legal entity) now or hereafter formed
by the Borrower or any of its Subsidiaries with another Person that is not the
Borrower or any Subsidiary in order to conduct a common venture or enterprise
with such Person.

                                       19
<PAGE>

      "Lender" shall have the meaning set forth in the first paragraph of this
Credit Agreement and shall include each Issuing Lender.

      "Letters of Credit" shall mean, collectively, the Revolving Letters of
Credit and the Credit-Linked Letters of Credit.

      "Leverage Ratio" shall mean, as of any date of determination, the ratio of
(i) Consolidated Funded Debt on such date minus Performance Based Letters of
Credit on such date minus, so long as there are no Revolving Loans outstanding,
unrestricted cash held by the Credit Parties on such date to (ii) Consolidated
EBITDAP.

      "LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%). If, for any reason, neither of such rates is
available, then "LIBOR" shall mean the rate per annum at which, as determined by
the Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.

      "LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.

      "LIBOR Rate" shall mean a rate per annum (rounded upwards, if necessary,
to the next higher 1/100th of 1%) determined by the Administrative Agent
pursuant to the following formula:

            LIBOR Rate =                       LIBOR
                               ------------------------------------
                               1.00 - Eurodollar Reserve Percentage

      "LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.

                                       20
<PAGE>

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

      "Litigation Award" shall mean the receipt by the Borrower or any of its
Subsidiaries of cash or Cash Equivalents from any arbitration award, settlement,
court judgment or other award, judgment or settlement received in any
litigation-related proceeding.

      "Loan" shall mean a Revolving Loan, a Swingline Loan and/or a Term Loan,
as appropriate.

      "Loan to Value Test" shall mean, as of any date of determination, the
aggregate principal amount of the outstanding Term Loans plus the Credit-Linked
LOC Commitment is less than fifty percent (50%) of the appraised value of the
Credit Parties' owned real property based on the most recent appraisals
delivered to and acceptable to the Administrative Agent (including any new
appraisal obtained for purposes of determining compliance with such test as the
Administrative Agent may reasonably deem appropriate at such time; provided that
new appraisals shall not be ordered more than once annually).

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

      "Mandatory LOC Borrowing" shall have the meaning set forth in Section
2.2(e).

      "Mandatory Swingline Borrowing" shall have the meaning set forth in
Section 2.3(b)(ii).

      "Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property, assets or financial condition of the Borrower or
of the Credit Parties and their Subsidiaries taken as a whole, (b) the ability
of the Borrower or any Guarantor to perform its obligations, when such
obligations are required to be performed, under this Credit Agreement, any of
the Notes or any other Credit Document or (c) the validity or enforceability of
this Credit Agreement, any of the Notes or any of the other Credit Documents or
the rights or remedies of the Administrative Agent or the Lenders hereunder or
thereunder.

      "Material Contract" shall mean (a) any contract or other agreement,
written or oral, of the Credit Parties or any of their Subsidiaries representing
at least 7.5% of the total Consolidated revenues of the Credit Parties and their
Subsidiaries for any fiscal year and (b) any other contract, agreement, permit
or license, written or oral, of the Credit Parties or any of their Subsidiaries
as to which the breach, nonperformance, cancellation or failure to renew in
accordance with the terms thereof by any party thereto, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

                                       21
<PAGE>

      "Material Domestic Subsidiary" shall mean any Domestic Subsidiary of any
Credit Party, the Consolidated Total Assets of which were more than 7.5% of the
Consolidated Total Assets of the Borrower and its Subsidiaries as of the end of
the most recently completed fiscal year of the Borrower for which audited
financial statements are available; provided that, in the event the aggregate of
the Consolidated Total Assets of all Domestic Subsidiaries that do not
constitute Material Domestic Subsidiaries exceeds 7.5% of the Consolidated Total
Assets of the Borrower and its Subsidiaries as of such date, the Borrower (or
the Administrative Agent, in the event the Borrower has failed to do so within
ten (10) days of request therefor by the Administrative Agent) shall, to the
extent necessary, designate sufficient Domestic Subsidiaries to be deemed to be
"Material Domestic Subsidiaries" to eliminate such excess, and such designated
Domestic Subsidiaries shall thereafter constitute Material Domestic
Subsidiaries. Assets of Foreign Subsidiaries shall be converted into Dollars at
the rates used for purposes of preparing the consolidated balance sheet of the
Borrower included in such audited financial statements.

      "Material Foreign Subsidiary" shall mean any Foreign Subsidiary of any
Credit Party, the Consolidated Total Assets of which were more than 7.5% of the
Consolidated Total Assets of the Borrower and its Subsidiaries as of the end of
the most recently completed fiscal year of the Borrower for which audited
financial statements are available; provided that, in the event the aggregate of
the Consolidated Total Assets of all Foreign Subsidiaries that do not constitute
Material Foreign Subsidiaries exceeds 7.5% of the Consolidated Total Assets of
the Borrower and its Subsidiaries as of such date, the Borrower (or the
Administrative Agent, in the event the Borrower has failed to do so within ten
(10) days of request therefor by the Administrative Agent) shall, to the extent
necessary, designate sufficient Foreign Subsidiaries to be deemed to be
"Material Foreign Subsidiaries" to eliminate such excess, and such designated
Foreign Subsidiaries shall thereafter constitute Material Foreign Subsidiaries.
Assets of Foreign Subsidiaries shall be converted into Dollars at the rates used
for purposes of preparing the consolidated balance sheet of the Borrower
included in such audited financial statements.

      "Materials of Environmental Concern" shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.

      "Maturity Date" shall mean the Credit-Linked Maturity Date or the
Revolving Commitment Termination Date, as applicable.

      "Moody's" shall mean Moody's Investors Service, Inc.

      "Mortgage Instrument" shall mean any mortgage, deed of trust, deed to
secure debt or assignment of leases and rents executed by a Credit Party in
favor of the Administrative Agent pursuant to the terms of Section 4.1(e)(i),
5.10 or 5.12, as the same may be amended, modified, restated or supplemented
from time to time.

      "Mortgage Policy" shall mean, with respect to any Mortgage Instrument, an
ALTA mortgagee title insurance policy issued by a Title Company in such amount
as reasonably

                                       22
<PAGE>

approved by the Administrative Agent, assuring the Administrative Agent that
such Mortgage Instrument creates a valid and enforceable first priority mortgage
lien on the applicable Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policy shall be in form and
substance reasonably satisfactory to the Administrative Agent and shall provide
for affirmative insurance and such reinsurance as the Administrative Agent may
reasonably request.

      "Mortgaged Property" shall mean any owned or leased real property of a
Credit Party with respect to which such Credit Party executes a Mortgage
Instrument in favor of the Administrative Agent.

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

      "Net Cash Proceeds" shall mean the aggregate cash proceeds received by any
Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance, Debt Issuance, Recovery Event or Litigation Award, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions) associated therewith, (b) amounts held in escrow to
be applied as part of the purchase price of any Asset Disposition, (c) taxes
paid or payable as a result thereof, (d) with respect to any Asset Disposition
or Recovery Event, payment of the outstanding principal amount of, premium (if
any) and interest on any Indebtedness secured by a Lien on the assets subject to
such Asset Disposition or Recovery Event and (e) with respect to any Recovery
Event or Litigation Award, amounts payable directly or indirectly to
Governmental Authorities for such Recovery Event or Litigation Award to the
extent required by such Governmental Authorities or Contractual Obligations; it
being understood that "Net Cash Proceeds" shall include, without limitation, any
cash proceeds from the sale or other disposition of any non-cash consideration
(but only as and when such cash is actually received) received by any Credit
Party or any Subsidiary in any Asset Disposition, Equity Issuance, Debt
Issuance, Recovery Event or Litigation Award and any cash released from escrow
as part of the purchase price in connection with any Asset Disposition.

      "New Convertible Notes" shall mean the Borrower's 2.25% unsecured
subordinated convertible notes due 2024, as the same may be amended, restated,
supplemented or otherwise modified from time to time as permitted hereunder.

      "Non-Cash Non-Operating" shall mean (i) all non-cash expenses or income
incurred outside the normal course of business of the Credit Parties including
environmental reserve adjustments, litigation settlements and awards, business
restructuring costs and charges associated with impairments of tangible and
intangible assets, and (ii) (without duplication) all expenses reflected as a
restructuring item, unusual item, or the cumulative effect of a change in
accounting principle in the public financial statements of the Borrower.

      "Note" or "Notes" shall mean the Revolving Notes, the Swingline Notes, the
Credit-Linked Note and/or the Term Loan Notes, collectively, separately or
individually, as appropriate.

                                       23
<PAGE>

      "Notice of Borrowing" shall mean a request for a Revolving Loan borrowing
pursuant to Section 2.1(b)(i) or a request for a Swingline Loan borrowing
pursuant to Section 2.3(b)(i), as appropriate, in substantially the form of the
notice of borrowing attached hereto as Schedule 2.1(b)(i).

      "Notice of Conversion" shall have the meaning set forth in Section 2.11.

      "Obligations" shall mean, collectively, Loans, Revolving LOC Obligations
and Credit-Linked LOC Obligations and all other obligations of the Credit
Parties to the Administrative Agent and the Lenders under the Credit Documents.

      "OFAC" shall mean the U.S. Department of the Treasury's Office of Foreign
Assets Control.

      "Other Parties" shall have the meaning set forth in Section 10.7(c).

      "Participant" shall have the meaning set forth in Section 9.6(b).

      "Participation Interests" shall mean Revolving Participation Interests or
Credit-Linked Participations, individually or collectively as the context may
require.

      "Patent Licenses" shall mean all agreements, whether written or oral,
providing for the grant by or to a Person of any right to manufacture, use or
sell any invention covered by a Patent, including, without limitation, any
thereof referred to in Schedule 3.16 to this Credit Agreement.

      "Patents" shall mean all letters patent of the United States or any other
country, now existing or hereafter arising, and all improvement patents,
reissues, reexaminations, patents of additions, renewals and extensions thereof,
including, without limitation, any thereof referred to in Schedule 3.16 to this
Credit Agreement, and (ii) all applications for letters patent of the United
States or any other country, now existing or hereafter arising, and all
provisionals, divisions, continuations and continuations-in-part and substitutes
thereof, including, without limitation, any thereof referred to in Schedule 3.16
to this Credit Agreement.

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

      "Performance Based Letters of Credit" shall mean letters of credit backing
advanced deposits or performance based contracts.

      "Permitted Acquisition" shall mean an acquisition or any series of related
acquisitions by a Credit Party of (a) all or substantially all of the assets or
a majority of the outstanding Voting Securities or economic interests of a
Person that is incorporated, formed or organized in the United States or (b) any
division, line of business or other business unit of a Person that is
incorporated, formed or organized in the United States (such Person or such
division, line of business or other business unit of such Person shall be
referred to herein as the "Target"), in each case that is a type of business (or
assets used in a type of business) permitted to be engaged in by

                                       24
<PAGE>

the Credit Parties and their Subsidiaries pursuant to Section 6.3, so long as
(i) no Default or Event of Default shall then exist or would exist after giving
effect thereto, (ii) the Credit Parties shall demonstrate to the reasonable
satisfaction of the Administrative Agent and the Required Lenders that, after
giving effect to the acquisition on a pro forma basis, the Credit Parties are in
compliance with each of the financial covenants set forth in Section 5.9, (iii)
the Administrative Agent, on behalf of the Lenders, shall have received (or
shall receive in connection with the closing of such acquisition) a first
priority perfected security interest in all property (including, without
limitation, Capital Stock) acquired with respect to the Target in accordance
with the terms of Sections 5.10 and 5.12 and the Target, if a it would be a
Material Domestic Subsidiary, shall have executed a Joinder Agreement in
accordance with the terms of Section 5.10, (iv) the Administrative Agent and the
Lenders shall have received (A) a description of the material terms of such
acquisition and (B) if the total consideration (including without limitation
earn out obligations, deferred compensation, non-competition arrangements and
the amount of Indebtedness and other liabilities assumed by the Credit Parties
and their Subsidiaries) to be paid by the Credit Parties and their Subsidiaries
in connection with such acquisition exceeds $25,000,000, (1) audited financial
statements (or, if unavailable, management-prepared financial statements) of the
Target for its two most recent fiscal years and for any fiscal quarters ended
within the fiscal year to date and (2) consolidated projected income statements
of the Borrower and its consolidated Subsidiaries (giving effect to such
acquisition), all in form and substance reasonably satisfactory to the
Administrative Agent, (v) the Target shall have earnings before interest, taxes,
depreciation, amortization and non-cash and pension plan income or expenses for
the four fiscal quarter period prior to the acquisition date in an amount
greater than $0, (vi) such acquisition shall not be a "hostile" acquisition and
the appropriate approvals of the applicable Credit Party and the Target shall
have been obtained, (vii) after giving effect to such acquisition, there shall
be at least $50,000,000 of borrowing availability under the Revolving Committed
Amount and (viii) the aggregate (A) cash consideration (including, without
limitation, earn out obligations, deferred compensation and payments under
non-competition arrangements) paid (or to be paid) by the Credit Parties and
their Subsidiaries in connection with any such acquisition shall not exceed
$25,000,000 and (B) total consideration (including, without limitation, (1) the
maximum amount of earnout obligations, (2) deferred compensation, (3) payments
under non-competition arrangements and (4) the amount of Indebtedness and other
liabilities assumed by the Credit Parties and their Subsidiaries) paid (or to be
paid) by the Credit Parties and their Subsidiaries in connection with any such
acquisition shall not exceed $100,000,000.

      "Permitted Investments" shall mean:

            (a) cash and Cash Equivalents;

            (b) Investments set forth on Schedule 1.1(b), which Investments
      shall not exceed the amount thereof on the Closing Date (after giving
      effect to the Transactions consummated on the Closing Date), in each case
      as such Investments may be adjusted due to appreciation, repayment of
      principal, payment of interest, return of capital or similar
      circumstances; provided, however, any such Investment consisting of
      intercompany Indebtedness owed by a Credit Party to a Subsidiary that is
      not a Credit Party shall not be repaid in cash or Cash Equivalents and
      shall not be renewed, extended, refinanced or replaced; provided further,
      however, the Credit Parties shall be permitted to

                                       25
<PAGE>

      write-off Investments consisting of intercompany Indebtedness owing by
      Subsidiaries that are not Credit Parties to the extent such Indebtedness
      was existing prior to the Closing Date;

            (c) receivables owing to the Credit Parties or any of their
      Subsidiaries or any receivables and advances to suppliers, in each case if
      created, acquired or made in the ordinary course of business and payable
      or dischargeable in accordance with customary trade terms;

            (d) (i) loans and advances to employees for relocation and related
      expenses and (ii) loans and advances to employees in the ordinary course
      of business in an aggregate principal amount not exceeding $1,500,000;
      provided that such loans and advances shall comply with all applicable
      Requirements of Law;

            (e) Investments (including debt obligations) received in connection
      with the bankruptcy or reorganization of suppliers and customers and in
      settlement of delinquent obligations of, and other disputes with,
      customers and suppliers arising in the ordinary course of business;

            (f) Investments (including debt securities) received as
      consideration for Permitted Real Estate Sales to the extent such
      Investments, together with all other non-cash consideration received for
      such Permitted Real Estate Sales, do not exceed $75,000,000 in the
      aggregate;

            (g) Hedging Agreements permitted hereunder;

            (h) deposits in a customary fashion in the ordinary course of
      business;

            (i) Investments in and unsecured loans to any Credit Party by any
      Credit Party or any of its Subsidiaries; provided, however, that in the
      case of such intercompany loan or advance by a Credit Party to another
      Credit Party, each such loan shall be evidenced by an Intercompany Note
      payable to the Credit Party, in form and substance satisfactory to
      Administrative Agent, which Intercompany Notes shall be delivered and
      pledged to the Administrative Agent as part of the Collateral;

            (j) Permitted Acquisitions and Investments assumed in connection
      with Permitted Acquisitions;

            (k) Guaranty Obligations permitted pursuant to Section 6.1(h) and
      6.1(k);

            (l) Investments in the GDX facility in Chartres, France in order to
      fund the cash costs in connection with the closure of such facility in an
      aggregate amount not to exceed $20,000,000; and

                                       26
<PAGE>

            (m) additional loans, advances and/or Investments of a nature not
      contemplated by the foregoing clauses hereof in an aggregate amount not to
      exceed $15,000,000 outstanding at any time.

      "Permitted Joint Venture" shall mean a Joint Venture established by a
Credit Party for the purpose of developing and/or selling one or more real
properties of the Credit Parties.

      "Permitted Liens" shall mean:

            (a) Liens created by or otherwise existing under or in connection
      with this Credit Agreement or the other Credit Documents in favor of the
      Secured Parties;

            (b) Liens in favor of a Hedging Agreement Provider in connection
      with a Secured Hedging Agreement; provided that such Liens shall secure
      the Credit Party Obligations and the obligations under such Secured
      Hedging Agreement on a pari passu basis;

            (c) Liens securing purchase money indebtedness and Capital Lease
      Obligations (and refinancings thereof) to the extent permitted under
      Section 6.1(c); provided, that (i) any such Lien attaches to such property
      concurrently with or within (120) days after the acquisition thereof and
      (ii) such Lien attaches solely to the property so acquired in such
      transaction;

            (d) Customary Permitted Liens;

            (e) Liens existing on the Closing Date listed on Schedule 1.1(c)
      hereto and any extension, renewal or replacement thereof but only if the
      principal amount of the Indebtedness (including, for purposes of this
      clause (e), any additional Indebtedness incurred pursuant to revolving
      commitments in an amount not in excess of the available commitment as set
      forth on Schedule 6.1(b) secured thereby) is not increased and such Liens
      do not extend to or cover any other property or assets;

            (f) Liens securing Indebtedness permitted pursuant to Section
      6.1(d); provided, that any such Lien does not extend to any other property
      (other than accessions and additions to the property secured thereby);

            (g) Liens on special tooling assets and Intellectual Property of
      Aerojet as required by the terms of the contract with Lockheed Martin
      regarding the Atlas Program;

            (h) Liens securing the financing of insurance premiums associated
      with insurance coverage obtained in the normal course of business not to
      exceed $7,000,000 in the aggregate at any time outstanding; and

            (i) additional Liens (other than Liens on any real property owned by
      the Borrower or any of its Subsidiaries which is located in the State of
      California or the State of Nevada) incurred by the Borrower and its
      Subsidiaries which do not secure

                                       27
<PAGE>

      Indebtedness for money borrowed so long as the value of the property
      subject to such Liens, and the obligations secured thereby, do not exceed
      $5,000,000 in the aggregate at any one time outstanding.

      In connection with the granting of Liens of the type described in clause
(c) above by the Borrower or any of its Subsidiaries, at the reasonable request
of the Borrower, and at the Borrower's expense, the Administrative Agent shall
take (and is hereby authorized to take) any actions reasonably requested by the
Borrower in connection therewith (including, without limitation, by executing
appropriate lien releases in favor of the holder or holders of such Liens, in
either case solely with respect to the item or items of equipment or other
assets subject to such Liens).

      "Permitted Real Estate Sales" shall mean (a) the sale of any owned or
leased real property of a Credit Party, (b) the contribution, sale or other
transfer of any owned or leased real property of a Credit Party to a Permitted
Joint Venture, (c) the sale of any owned or leased real property by a Permitted
Joint Venture to the extent such owned or leased real property was contributed,
sold or otherwise transferred to such Permitted Joint Venture by a Credit Party
and (d) the sale of any ownership interest (or economic interest) in a Permitted
Joint Venture, in each case that satisfies the following requirements: (i) with
respect to sales under clauses (a), (b) or (d) above, no Default or Event of
Default shall exist at the time of such sale or be caused by such sale, (ii)
such sale is for fair market value, (iii) the Net Cash Proceeds of such sale are
applied to the Loans to the extent required pursuant to Section 2.9(b), and (iv)
unless otherwise approved by the Required Lenders with respect to (a) and (b)
above (without duplication), (A) the total consideration received by the Credit
Parties for such sale, contribution or other transfer, when combined with the
total consideration received by the Credit Parties for all other Permitted Real
Estate Sales under clauses (a) and (b) above, shall not exceed $150,000,000 in
the aggregate for all such Permitted Real Estate Sales and (B) the non-cash
consideration received by the Credit Parties for such sale, contribution or
other transfer, when combined with the non-cash consideration received by the
Credit Parties for all other Permitted Real Estate Sales under clauses (a) and
(b) above, shall not exceed $75,000,000 in the aggregate for all such Permitted
Real Estate Sales.

      "Permitted Real Property Encumbrances" shall mean (a) those liens,
encumbrances and other matters affecting title to any Mortgaged Property listed
in the applicable Mortgage Policy in respect thereof (or any update thereto) and
found, on the date of delivery of such Mortgage Policy to the Administrative
Agent in accordance with the terms hereof, reasonably acceptable by the
Administrative Agent, (b) as to any particular real property at any time, such
easements, encroachments, covenants, restrictions, rights of way, minor defects,
irregularities or encumbrances on title which do not, in the reasonable opinion
of the Administrative Agent, materially impair such real property for the
purpose for which it is held by the mortgagor or owner, as the case may be,
thereof, or the Lien held by the Administrative Agent, (c) municipal and zoning
laws, regulations, codes and ordinances, which are not violated in any material
respect by the existing improvements and the present use made by the mortgagor
or owner, as the case may be, of such real property, (d) general real estate
taxes and assessments not yet delinquent, and (e) such other items to which the
Administrative Agent may consent.

                                       28
<PAGE>

      "Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

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

      "Pledge Agreement" shall mean the Pledge Agreement dated as of the Closing
Date given by the Borrower and the Guarantors to the Administrative Agent, for
the benefit of the Secured Parties, as the same may from time to time be
amended, restated, amended and restated, supplemented or otherwise modified in
accordance with the terms hereof and thereof.

      "Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.

      "Properties" shall have the meaning set forth in Section 3.10(a).

      "Purchasing Lenders" shall have the meaning set forth in Section 9.6(c).

      "Recovery Event" shall mean the receipt by the Credit Parties or any of
their Subsidiaries of any cash insurance proceeds or condemnation or
expropriation award payable by reason of theft, loss, physical destruction or
damage, taking or similar event with respect to any of their respective property
or assets other than obsolete property or assets no longer used or useful in the
business of the Credit Parties or any of their Subsidiaries.

      "Register" shall have the meaning set forth in Section 9.6(d).

      "Reorganization" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.

      "Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.

      "Required Lenders" shall mean, at any time, Lenders holding in the
aggregate more than fifty percent (50%) of (a) the sum of (i) the Revolving
Commitments and (ii) the Credit-Linked Commitments or (b) if the Commitments
have been terminated, the sum of the outstanding Revolving Loans, Term Loans and
Participation Interests; provided, however, that if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Lenders the Commitments of such Lender or, after
termination of the Commitments, the outstanding Revolving Loans, Term Loans and
Participation Interests of such Lender.

      "Required Secured Parties" shall mean, at any time, Lenders and Hedging
Agreement Providers holding in the aggregate more than fifty percent (50%) of
(a) the sum of (i) the

                                       29
<PAGE>

Revolving Commitments, (ii) the Credit-Linked Commitments and (iii) the
termination value of all Secured Hedging Agreements (whether or not actually
terminated) or (b) if the Commitments have been terminated, the sum of (i) the
outstanding Revolving Loans, Term Loans and Participation Interests and (ii) the
termination value of all Secured Hedging Agreements; provided, however, that if
any Lender shall be a Defaulting Lender at such time, then there shall be
excluded from the determination of Required Secured Parties the Commitments of
such Lender or, after termination of the Commitments, the outstanding Revolving
Loans, Term Loans and Participation Interests of such Lender.

      "Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.

      "Responsible Officer" shall mean, as to (a) the Borrower, the Chief
Executive Officer, Chief Financial Officer, the President or any Vice President
or (b) any other Credit Party, any duly authorized officer thereof.

      "Restricted Payment" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (b)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (d) any payment with respect to any earnout obligation, (e) any
payment, prepayment, redemption or similar payment with respect to any
Subordinated Debt of any Credit Party or any of its Subsidiaries and (f) to the
extent not included in the corporate overhead of such Credit Party or such
Subsidiary, the payment by any Credit Party or any of its Subsidiaries of any
management, advisory or consulting fee to any Person or the payment of any
extraordinary salary, bonus or other form of compensation to any Person who is
directly or indirectly a significant partner, shareholder, owner or executive
officer of any such Person.

      "Revolving Commitment" shall mean, with respect to each Revolving Lender,
the commitment of such Revolving Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding up to an amount equal to such Revolving
Lender's Revolving Commitment Percentage of the Revolving Committed Amount.

      "Revolving Commitment Fee" shall have the meaning set forth in Section
2.7(a).

      "Revolving Commitment Percentage" shall mean, for each Revolving Lender,
the percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a) or in the Register, as such percentage may be modified in connection with
any assignment made in accordance with the provisions of Section 9.6(c).

                                       30
<PAGE>

      "Revolving Commitment Period" shall mean (a) with respect to Revolving
Loans, the period from and including the Closing Date to but excluding the
Revolving Commitment Termination Date and (b) with respect to Revolving Letters
of Credit, the period from and including the Closing Date to but excluding the
date that is thirty (30) days prior to the Revolving Commitment Termination
Date.

      "Revolving Commitment Termination Date" shall mean the earlier of (a) the
date that is five (5) years after the Closing Date and (b) to the extent
applicable, the Accelerated Maturity Date.

      "Revolving Committed Amount" shall have the meaning set forth in Section
2.1(a).

      "Revolving Issuing Lender" shall mean, with respect to any Revolving
Letter of Credit, the Administrative Agent or such other Lender as requested by
the Borrower and approved by the Administrative Agent, or any other Person that
was the Administrative Agent or a Lender at the time it issued such Revolving
Letter of Credit but has ceased to be the Administrative Agent or a Lender under
the Credit Agreement.

      "Revolving Lender" shall mean, as of any date of determination, a Lender
holding a Revolving Commitment on such date.

      "Revolving Letters of Credit" shall mean any letter of credit issued by
the Revolving Issuing Lender pursuant to Section 2.2(a), as such letter of
credit may be amended, modified, extended, renewed or replaced from time to
time.

      "Revolving Loan" shall have the meaning set forth in Section 2.1.

      "Revolving LOC Commitment" shall mean the commitment of the Revolving
Issuing Lender to issue Revolving Letters of Credit and with respect to each
Revolving Lender, the commitment of such Revolving Lender to purchase
participation interests in the Letters of Credit up to such Revolving Lender's
LOC Commitment as specified in Schedule 2.1(a) or in the Register, as such
amount may be reduced from time to time in accordance with the provisions
hereof.

      "Revolving LOC Commitment Fee" shall have the meaning set forth in Section
2.7(c).

      "Revolving LOC Committed Amount" shall have the meaning set forth in
Section 2.2(a).

      "Revolving LOC Fronting Fee" shall have the meaning set forth in
Section 2.7(c).

      "Revolving LOC Obligations" shall mean, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become, available to be
drawn under Revolving Letters of Credit then outstanding, assuming compliance
with all requirements for drawings referred to in such Revolving Letters of
Credit plus (ii) the aggregate amount of all drawings

                                       31
<PAGE>

under Revolving Letters of Credit honored by the Revolving Issuing Lender but
not theretofore reimbursed.

      "Revolving Note" or "Revolving Notes" shall mean the promissory notes of
the Borrower (if any) made by the Borrower pursuant to Section 2.1(e) and
payable to the order of any of the Revolving Lenders evidencing the Revolving
Loans provided by any such Revolving Lender, individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
amended and restated, supplemented, extended, renewed or replaced from time to
time.

      "Revolving Participation Interest" shall mean a participation interest
purchased by a Revolving Lender in LOC Obligations as provided in Section 2.2(c)
and in Swingline Loans as provided in Section 2.3.

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

      "Sanctioned Country" shall mean a country subject to a sanctions program
identified on the list maintained by OFAC and available at
http://www.treas.gov/offices/eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time.

      "Sanctioned Person" shall mean (i) a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise
published from time to time, or (ii) (A) an agency of the government of a
Sanctioned Country, (B) an organization controlled by a Sanctioned Country, or
(C) a person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.

      "SEC" shall mean the Securities and Exchange Commission or any successor
thereto.

      "Secured Hedging Agreement" shall mean any Hedging Agreement between a
Credit Party and a Hedging Agreement Provider, as amended, restated, amended and
restated, modified, supplemented or extended from time to time.

      "Secured Parties" shall mean the Lenders and the Hedging Agreement
Providers.

      "Security Agreement" shall mean the Security Agreement dated as of the
Closing Date given by the Borrower and the Guarantors to the Administrative
Agent, for the benefit of the Secured Parties, as amended, restated, amended and
restated, modified or supplemented from time to time in accordance with its
terms.

      "Security Documents" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and
delivered and/or filed in connection with the attachment and perfection of the
Administrative Agent's security interests and liens arising thereunder,
including, without limitation, UCC financing statements and patent, trademark
and copyright filings.

                                       32
<PAGE>

      "Senior Consolidated Funded Debt" shall mean all Consolidated Funded Debt
excluding any Subordinated Debt.

      "Senior Leverage Ratio" shall mean, as of any date of determination, the
ratio of (a) Senior Consolidated Funded Debt on such date minus Performance
Based Letters of Credit on such date minus, so long as there are no Revolving
Loans outstanding, unrestricted cash held by the Credit Parties on such date to
(b) Consolidated EBITDAP minus Consolidated EBITDAP attributable to any real
property sold during the period of calculation minus Consolidated EBITDAP
attributable to the Granite Agreement for the fiscal year of the Borrower ended
November 30, 2004 minus cash dividends and distributions received by the
Borrower and its Subsidiaries from Permitted Joint Ventures during such period.

      "Shortfall Amount" shall mean, for any period of determination, the amount
by which the interest that would be payable for such fiscal period for a LIBOR
Rate borrowing in the amount of the Credit-Linked Deposits and with a one month
or three month interest period (as such interest period is determined by the
Administrative Agent from time to time) exceeds the return on the investment of
the Credit-Linked Deposits in the Credit-Linked Account for such period.

      "Single Employer Plan" shall mean any Plan that is not a Multiemployer
Plan.

      "Specified Sales" shall mean the sale, transfer, lease or other
disposition of (a) inventory and materials in the ordinary course of business
and (b) cash into Cash Equivalents or Cash Equivalents into cash.

      "Subordinated Debt" shall mean any Indebtedness incurred by any Credit
Party (including, without limitation, the Existing Subordinated Notes and the
New Convertible Notes) which by its terms is specifically subordinated in right
of payment to the prior payment of the Credit Party Obligations and contains
subordination and other terms acceptable to the Administrative Agent.

      "Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity (other than a Permitted Joint Venture)
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, limited liability
company or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Credit Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.

      "Swingline Commitment" shall mean the commitment of the Swingline Lender
to make Swingline Loans in an aggregate principal amount at any time outstanding
up to the Swingline Committed Amount, and the commitment of the Revolving
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.3(a), as such amounts may be reduced from time to time in
accordance with the provisions hereof.

                                       33
<PAGE>

      "Swingline Committed Amount" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.3(a).

      "Swingline Lender" shall mean the Administrative Agent and any successor
swingline lender.

      "Swingline Loan" shall have the meaning set forth in Section 2.3(a).

      "Swingline Note" shall mean the promissory note of the Borrower in favor
of the Swingline Lender evidencing the Swingline Loans provided pursuant to
Section 2.3(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

      "Tax Exempt Certificate" shall have the meaning set forth in Section 2.19.

      "Taxes" shall have the meaning set forth in Section 2.19.

      "Term Loan" shall mean any term loan made by a Credit-Linked Lender
pursuant to Section 2.5(a) or any term loan into which a Credit-Linked Purchase
is converted pursuant to Section 2.5(d)(ii).

      "Term Loan Commitment" shall mean, with respect to each Credit-Linked
Lender, the commitment of such Credit-Linked Lender to make Term Loans in a
principal amount equal to such Credit-Linked Lender's Term Loan Commitment
Percentage of the Term Loan Committed Amount.

      "Term Loan Commitment Percentage" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on Schedule 2.1(a)
or in the Register, as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6.

      "Term Loan Committed Amount" shall have the meaning set forth in
Section 2.4(a).

      "Term Loan Maturity Date" shall mean the earlier of (a) the date that is
six (6) years after the Closing Date and (b) to the extent applicable, the
Accelerated Maturity Date.

      "Term Loan Note" or "Term Loan Notes" shall mean the promissory notes of
the Borrower (if any) made by the Borrower pursuant to Section 2.4(d) and
payable to the order of any of the Credit-Linked Lenders evidencing the Term
Loans provided by any such Credit-Linked Lender, individually or collectively,
as appropriate, as such promissory notes may be amended, modified, restated,
amended and restated, supplemented, extended, renewed or replaced from time to
time.

                                       34
<PAGE>

      "Trademark License" shall mean any agreement, whether written or oral,
providing for the grant by or to a Person of any right to use any Trademark,
including, without limitation, any thereof referred to in Schedule 3.16 to this
Credit Agreement.

      "Trademarks" shall mean all trademarks, trade names, corporate names,
company names, business names, fictitious business names, service marks,
elements of package or trade dress of goods or services, logos and other source
or business identifiers, together with the goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, including, without limitation, any thereof referred to in
Schedule 3.16 to this Credit Agreement, and (ii) all renewals thereof including,
without limitation, any thereof referred to in Schedule 3.16.

      "Tranche" shall mean the collective reference to (a) LIBOR Rate Loans
whose Interest Periods begin and end on the same day and (b) Alternate Base Rate
Loans made on the same day. A Tranche with respect to LIBOR Rate Loans may
sometimes be referred to as a "Eurodollar Tranche".

      "Transactions" shall mean the closing of this Credit Agreement and the
other Credit Documents and the consummation of the other transactions
contemplated hereby to occur in connection with such closing (including, without
limitation, the borrowing of the Term Loans and the payment of fees and expenses
in connection with all of the foregoing).

      "Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.

      "Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.

      "UCC" shall mean the Uniform Commercial Code from time to time in effect
in any applicable jurisdiction.

      "UCP" shall have the meaning set forth in Section 2.2(g).

      "Unadjusted Senior Leverage Ratio" shall mean, as of any date of
determination, the ratio of (a) Senior Consolidated Funded Debt on such date
minus Performance Based Letters of Credit on such date to (b) Consolidated
EBITDAP minus Consolidated EBITDAP attributable to any real property sold during
the period of calculation minus Consolidated EBITDAP attributable to the Granite
Agreement for the fiscal year of the Borrower ended November 30, 2004 minus cash
dividends and distributions received by the Borrower and its Subsidiaries from
Permitted Joint Ventures during such period.

      "Unreimbursed Drawing" shall have the meaning set forth in Section
2.5(d)(ii).

                                       35
<PAGE>

      "Voting Securities" shall mean any class of Capital Stock of a Person
pursuant to which the holders thereof have, at the time of determination, the
general voting power under ordinary circumstances to vote for the election of
directors, managers, trustees or general partners of such Person (irrespective
of whether or not at the time any other class or classes will have or might have
voting power by reason of the happening of any contingency).

      "Wachovia" shall mean Wachovia Bank, National Association, a national
banking association, together with its successors and/or assigns.

      "WCM" shall mean Wachovia Capital Markets, LLC, together with its
successors and assigns.

      "Weighted Average Life to Maturity" shall mean, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the total of the
product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity in respect thereof by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.

      SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.

            (a) Unless otherwise specified therein, all terms defined in this
      Credit Agreement shall have the defined meanings when used in the Notes or
      other Credit Documents or any certificate or other document made or
      delivered pursuant hereto.

            (b) 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
      Credit Agreement, and Section, subsection, Schedule and Exhibit references
      are to this Credit Agreement unless otherwise specified.

            (c) The meanings given to terms defined herein shall be equally
      applicable to both the singular and plural forms of such terms.

      SECTION 1.3 ACCOUNTING TERMS.

      Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
Consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant

                                       36
<PAGE>

change in GAAP became effective, until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Borrower and the Required
Lenders.

      The Borrower shall deliver to the Administrative Agent and each Lender at
the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.

      SECTION 1.4 TIME REFERENCES.

      Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).

                                   ARTICLE II

                           THE LOANS; AMOUNT AND TERMS

      SECTION 2.1 REVOLVING LOANS.

            (a) Revolving Commitment. During the Revolving Commitment Period,
      subject to the terms and conditions hereof, each Revolving Lender
      severally agrees to make revolving credit loans in Dollars ("Revolving
      Loans") to the Borrower from time to time for the purposes hereinafter set
      forth; provided, however, that (i) with regard to each Revolving Lender
      individually, the sum of such Revolving Lender's Revolving Commitment
      Percentage of the aggregate principal amount of outstanding Revolving
      Loans plus outstanding Swingline Loans plus outstanding Revolving LOC
      Obligations shall not exceed such Revolving Lender's Revolving Commitment
      and (ii) with regard to the Revolving Lenders collectively, the sum of the
      aggregate principal amount of outstanding Revolving Loans plus outstanding
      Swingline Loans plus outstanding Revolving LOC Obligations shall not
      exceed the Revolving Committed Amount then in effect. For purposes hereof,
      the aggregate principal amount available for Revolving Loan borrowings
      hereunder shall be EIGHTY MILLION DOLLARS ($80,000,000) (as such aggregate
      maximum amount may be reduced from time to time as provided in Section
      2.8, the "Revolving Committed Amount"). Revolving Loans may consist of
      Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof,
      as the Borrower may request, and may be repaid and reborrowed in
      accordance with the provisions hereof; provided, however, the Revolving
      Loans made on the Closing Date or on either of the two (2) Business Days
      immediately following the Closing Date may only consist of Alternate Base
      Rate Loans. LIBOR Rate Loans shall be made by each Revolving Lender at its
      LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending
      Office.

                                       37
<PAGE>

            (b) Revolving Loan Borrowings.

                  (i) Notice of Borrowing. The Borrower may request a Revolving
            Loan borrowing by delivering a written Notice of Borrowing (or
            telephone notice promptly confirmed in writing by delivery of a
            written Notice of Borrowing, which delivery may be by fax) to the
            Administrative Agent not later than 1:00 P.M. on the date of the
            requested borrowing in the case of Alternate Base Rate Loans, and on
            the third Business Day prior to the date of the requested borrowing
            in the case of LIBOR Rate Loans. Each such Notice of Borrowing shall
            be irrevocable and shall specify (A) that a Revolving Loan is
            requested, (B) the date of the requested borrowing (which shall be a
            Business Day), (C) the aggregate principal amount to be borrowed and
            (D) whether the borrowing shall be comprised of Alternate Base Rate
            Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
            Loans are requested, the Interest Period(s) therefor. If the
            Borrower shall fail to specify in any such Notice of Borrowing (1)
            an applicable Interest Period in the case of a LIBOR Rate Loan, then
            such notice shall be deemed to be a request for an Interest Period
            of one month, or (2) the Type of Revolving Loan requested, then such
            notice shall be deemed to be a request for an Alternate Base Rate
            Loan hereunder. The Administrative Agent shall give notice to each
            Revolving Lender promptly upon receipt of each Notice of Borrowing,
            the contents thereof and each such Revolving Lender's share thereof.

                  (ii) Minimum Amounts. Each Revolving Loan that is made as an
            Alternate Base Rate Loan shall be in a minimum aggregate amount of
            $1,000,000 and integral multiples of $100,000 in excess thereof (or
            the remaining amount of the Revolving Committed Amount, if less).
            Each Revolving Loan that is made as a LIBOR Rate Loan shall be in a
            minimum aggregate amount of $2,000,000 and integral multiples of
            $1,000,000 in excess thereof (or the remaining amount of the
            Revolving Committed Amount, if less).

                  (iii) Advances. Each Revolving Lender will make its Revolving
            Commitment Percentage of each Revolving Loan borrowing available to
            the Administrative Agent for the account of the Borrower at the
            office of the Administrative Agent specified in Section 9.2, or at
            such other office as the Administrative Agent may designate in
            writing, by 3:00 P.M. (1:00 P.M. in the case of LIBOR Rate Loans) on
            the date specified in the applicable Notice of Borrowing, in Dollars
            and in funds immediately available to the Administrative Agent. Such
            borrowing will then be made available to the Borrower by the
            Administrative Agent on the date specified in the applicable Notice
            of Borrowing (by the end of business Eastern Time on such date) by
            crediting the account of the Borrower on the books of such office
            with the aggregate of the amounts made available to the
            Administrative Agent by the Revolving Lenders and in like funds as
            received by the Administrative Agent.

                                       38
<PAGE>

            (c) Repayment. Subject to the terms of this Credit Agreement,
      Revolving Loans may be borrowed, repaid and reborrowed during the
      Revolving Commitment Period. The principal amount of all Revolving Loans
      shall be due and payable in full on the Revolving Commitment Termination
      Date.

            (d) Interest. Subject to the provisions of Section 2.10(b),
      Revolving Loans shall bear interest as follows:

                  (i) Alternate Base Rate Loans. During such periods as
            Revolving Loans shall be comprised of Alternate Base Rate Loans,
            each such Alternate Base Rate Loan shall bear interest at a per
            annum rate equal to the sum of the Alternate Base Rate plus the
            Applicable Percentage; and

                  (ii) LIBOR Rate Loans. During such periods as Revolving Loans
            shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
            shall bear interest at a per annum rate equal to the sum of the
            LIBOR Rate plus the Applicable Percentage.

      Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date.

            (e) Revolving Notes. The Borrower's obligation to pay each Revolving
      Lender's Revolving Loans shall be evidenced, upon such Revolving Lender's
      request, by a Revolving Note made payable to such Revolving Lender in
      substantially the form of Schedule 2.1(e).

      SECTION 2.2 REVOLVING LETTER OF CREDIT SUBFACILITY.

            (a) Issuance. Subject to the terms and conditions hereof and of the
      LOC Documents, if any, and any other terms and conditions which the
      Revolving Issuing Lender may reasonably require, during the Revolving
      Commitment Period the Revolving Issuing Lender shall issue, and the
      Revolving Lenders shall participate in, standby Revolving Letters of
      Credit for the account of the Borrower from time to time upon request in a
      form acceptable to the Revolving Issuing Lender; provided, however, that
      (i) the aggregate amount of Revolving LOC Obligations shall not at any
      time exceed FIFTY MILLION DOLLARS ($50,000,000) (the "Revolving LOC
      Committed Amount"), (ii) with regard to each Revolving Lender
      individually, the sum of such Revolving Lender's Revolving Commitment
      Percentage of the aggregate principal amount of outstanding Revolving
      Loans plus outstanding Swingline Loans plus outstanding Revolving LOC
      Obligations shall not exceed such Revolving Lender's Revolving Commitment,
      (iii) with regard to the Revolving Lenders collectively, the sum of the
      aggregate principal amount of outstanding Revolving Loans plus outstanding
      Swingline Loans plus outstanding Revolving LOC Obligations shall not
      exceed the Revolving Committed Amount then in effect, (iv) all Revolving
      Letters of Credit shall be denominated in Dollars and (v) Revolving
      Letters of Credit may be issued for any lawful corporate purposes,
      including in connection with workers' compensation and other insurance
      programs. Except as otherwise expressly agreed upon by all the Revolving

                                       39
<PAGE>

      Lenders, no Revolving Letter of Credit shall have an original expiry date
      more than twelve (12) months from the date of issuance; provided, however,
      so long as no Default or Event of Default has occurred and is continuing
      and subject to the other terms and conditions to the issuance of Revolving
      Letters of Credit hereunder, the expiry dates of Revolving Letters of
      Credit may be extended annually or periodically from time to time on the
      request of the Borrower or by operation of the terms of the applicable
      Revolving Letter of Credit to a date not more than twelve (12) months from
      the date of extension; provided, further, that no Revolving Letter of
      Credit, as originally issued or as extended, shall have an expiry date
      extending beyond the date that is ten (10) days prior to the Revolving
      Commitment Termination Date. Each Revolving Letter of Credit shall comply
      with the related LOC Documents. The issuance and expiry date of each
      Revolving Letter of Credit shall be a Business Day. Any Revolving Letter
      of Credit issued hereunder shall be in a minimum original face amount of
      $100,000 or such lesser amount as approved by the Revolving Issuing
      Lender.

            (b) Notice and Reports. The request for the issuance of a Revolving
      Letter of Credit shall be submitted to the Revolving Issuing Lender and
      the Administrative Agent at least three (3) Business Days prior to the
      requested date of issuance. The Revolving Issuing Lender will promptly
      upon request provide to the Administrative Agent for dissemination to the
      Revolving Lenders a detailed report specifying the Revolving Letters of
      Credit which are then issued and outstanding and any activity with respect
      thereto which may have occurred since the date of any prior report, and
      including therein, among other things, the account party, the beneficiary,
      the face amount, expiry date as well as any payments or expirations which
      may have occurred. The Revolving Issuing Lender will further provide to
      the Administrative Agent promptly upon request copies of the Revolving
      Letters of Credit.

            (c) Participations. Each Revolving Lender, upon issuance of any
      Revolving Letter of Credit (or upon a Person becoming a Revolving Lender
      hereunder), shall be deemed to have purchased, without recourse to the
      Revolving Issuing Lender, and the Revolving Issuing Lender shall be deemed
      to have granted without recourse to the Revolving Issuing Lender, a risk
      participation from the Revolving Issuing Lender in such Revolving Letter
      of Credit and the obligations arising thereunder and any collateral
      relating thereto, in each case in an amount equal to its Revolving
      Commitment Percentage of the maximum amounts available to be drawn under
      such Revolving Letter of Credit and shall absolutely, unconditionally and
      irrevocably assume, as primary obligor and not as surety, and be obligated
      to pay to the Revolving Issuing Lender therefor and discharge when due,
      its Revolving Participation Interest by paying its Revolving Commitment
      Percentage of the amounts drawn under such Revolving Letter of Credit.
      Without limiting the scope and nature of each Revolving Lender's
      participation in any Revolving Letter of Credit, to the extent that the
      Revolving Issuing Lender has not been reimbursed as required hereunder or
      under any LOC Document, each such Revolving Lender shall fund its
      Revolving Participation Interest therein by paying to the Revolving
      Issuing Lender its Revolving Commitment Percentage of such unreimbursed
      drawing in same day funds on the day of notification by the Revolving
      Issuing Lender of an unreimbursed drawing pursuant to and in accordance
      with the

                                       40
<PAGE>

      provisions of subsection (d) hereof. The obligation of each Revolving
      Lender to so pay the Revolving Issuing Lender shall be absolute and
      unconditional and shall not be affected by the occurrence of a Default, an
      Event of Default or any other occurrence or event. Any such payment shall
      not relieve or otherwise impair the obligation of the Borrower to
      reimburse the Revolving Issuing Lender under any Revolving Letter of
      Credit, together with interest as hereinafter provided.

            (d) Reimbursement. In the event of any drawing under any Revolving
      Letter of Credit, the Revolving Issuing Lender will promptly notify the
      Borrower and the Administrative Agent. The Borrower shall reimburse the
      Revolving Issuing Lender on the day of drawing under any Revolving Letter
      of Credit (either with the proceeds of a Revolving Loan obtained hereunder
      or otherwise) in same day funds as provided herein or in the LOC Documents
      if the Borrower shall have been given notice of such drawing by 12:00 Noon
      and otherwise on the next Business Day after such drawing if the Borrower
      shall have been given notice of such drawing after 12:00 Noon. If the
      Borrower shall be given notice of a drawing by 12:00 Noon and shall fail
      to reimburse the Revolving Issuing Lender on the same date of such notice,
      the unreimbursed amount of such drawing shall bear interest from the date
      of notice until payment in full at a per annum rate equal to the ABR
      Default Rate. If the Borrower shall be given notice of a drawing after
      12:00 Noon, the unreimbursed amount of such drawing shall bear interest
      from the date of notice until the next Business Day at a per annum rate
      equal to the Alternate Base Rate plus the Applicable Percentage and if the
      Borrower shall fail to reimburse the Revolving Issuing Lender on such next
      Business Day, the unreimbursed amount of such drawing shall bear interest
      from the Business Day succeeding the date of notice until payment in full
      at a per annum rate equal to the ABR Default Rate. Unless the Borrower
      shall immediately notify the Revolving Issuing Lender and the
      Administrative Agent of its intent to otherwise reimburse the Revolving
      Issuing Lender, the Borrower shall be deemed to have requested a Mandatory
      LOC Borrowing in the amount of the drawing as provided in subsection (d)
      hereof, the proceeds of which will be used to satisfy the reimbursement
      obligations. The Borrower's reimbursement obligations hereunder shall be
      absolute and unconditional under all circumstances irrespective of any
      rights of set-off, counterclaim or defense to payment the Borrower may
      claim or have against the Revolving Issuing Lender, the Administrative
      Agent, the Lenders, the beneficiary of the Revolving Letter of Credit
      drawn upon or any other Person, including without limitation any defense
      based on any failure of the Borrower to receive consideration or the
      legality, validity, regularity or unenforceability of the Revolving Letter
      of Credit; provided that the Borrower shall not be deemed to have waived
      any claims it may have against the Revolving Issuing Lender, the
      Administrative Agent, the Lenders, the beneficiary of the Revolving Letter
      of Credit drawn upon or any other Person and may separately pursue such
      claims after payment of such reimbursement obligations. The Revolving
      Issuing Lender will promptly notify the Administrative Agent (which shall
      promptly notify the Revolving Lenders) of the amount of any unreimbursed
      drawing and each Revolving Lender shall promptly fund its Revolving
      Participation Interest therein by paying to the Administrative Agent for
      the account of the Revolving Issuing Lender, in Dollars and in immediately
      available funds, the amount of such Revolving Lender's Revolving
      Commitment Percentage of such

                                       41
<PAGE>

      unreimbursed drawing. Such payment shall be made on the day such notice is
      received by such Revolving Lender from the Revolving Issuing Lender if
      such notice is received at or before 2:00 P.M., otherwise such payment
      shall be made at or before 12:00 Noon on the Business Day next succeeding
      the day such notice is received. If such Revolving Lender does not pay
      such amount to the Revolving Issuing Lender in full upon such request,
      such Revolving Lender shall, on demand, pay to the Administrative Agent
      for the account of the Revolving Issuing Lender interest on the unpaid
      amount during the period from the date of such drawing until such
      Revolving Lender pays such amount to the Revolving Issuing Lender in full
      at a rate per annum equal to, if paid within two (2) Business Days of the
      date of drawing, the Federal Funds Effective Rate and thereafter at a rate
      equal to the Alternate Base Rate. Each Revolving Lender's obligation to
      make such payment to the Revolving Issuing Lender, and the right of the
      Revolving Issuing Lender to receive the same, shall be absolute and
      unconditional, shall not be affected by any circumstance whatsoever and
      without regard to the termination of this Credit Agreement or the
      Commitments hereunder, the existence of a Default or Event of Default or
      the acceleration of the Credit Party Obligations hereunder and shall be
      made without any offset, abatement, withholding or reduction whatsoever.

            (e) Repayment with Revolving Loans. On any day on which the Borrower
      shall have requested, or been deemed to have requested, a Revolving Loan
      to reimburse a drawing under a Revolving Letter of Credit, the
      Administrative Agent shall give notice to the Revolving Lenders that a
      Revolving Loan has been requested or deemed requested in connection with a
      drawing under a Revolving Letter of Credit, in which case a Revolving Loan
      borrowing comprised entirely of Alternate Base Rate Loans (each such
      borrowing, a "Mandatory LOC Borrowing") shall be made (without giving
      effect to any termination of the Commitments pursuant to Section 7.2) pro
      rata based on each Revolving Lender's respective Revolving Commitment
      Percentage (determined before giving effect to any termination of the
      Commitments pursuant to Section 7.2) and the proceeds thereof shall be
      paid directly to the Revolving Issuing Lender for application to the
      respective Revolving LOC Obligations. Each Revolving Lender hereby
      irrevocably agrees to make such Revolving Loans on the day such notice is
      received by the Revolving Lenders from the Administrative Agent if such
      notice is received at or before 2:00 P.M., otherwise such payment shall be
      made at or before 12:00 Noon on the Business Day next succeeding the day
      such notice is received, in each case notwithstanding (i) the amount of
      Mandatory LOC Borrowing may not comply with the minimum amount for
      borrowings of Revolving Loans otherwise required hereunder, (ii) whether
      any conditions specified in Section 4.2 are then satisfied, (iii) whether
      a Default or an Event of Default then exists, (iv) failure for any such
      request or deemed request for Revolving Loan to be made by the time
      otherwise required in Section 2.1(b), (v) the date of such Mandatory LOC
      Borrowing, or (vi) any reduction in the Revolving Committed Amount after
      any such Revolving Letter of Credit may have been drawn upon. In the event
      that any Mandatory LOC Borrowing cannot for any reason be made on the date
      otherwise required above (including, without limitation, as a result of
      the occurrence of a Bankruptcy Event), then each such Revolving Lender
      hereby agrees that it shall forthwith fund (as of the date the Mandatory
      LOC Borrowing would otherwise have occurred, but adjusted for any payments
      received from the Borrower on or after such date and prior to such
      purchase) its Revolving Participation

                                       42
<PAGE>

      Interests in the outstanding Revolving LOC Obligations; provided, further,
      that in the event any Revolving Lender shall fail to fund its Revolving
      Participation Interest on the day the Mandatory LOC Borrowing would
      otherwise have occurred, then the amount of such Revolving Lender's
      unfunded Revolving Participation Interest therein shall bear interest
      payable by such Revolving Lender to the Revolving Issuing Lender upon
      demand, at the rate equal to, if paid within two (2) Business Days of such
      date, the Federal Funds Effective Rate, and thereafter at a rate equal to
      the Alternate Base Rate.

            (f) Modification, Extension. The issuance of any supplement,
      modification, amendment, renewal, or extension to any Revolving Letter of
      Credit shall, for purposes hereof, be treated in all respects the same as
      the issuance of a new Revolving Letter of Credit hereunder.

            (g) Uniform Customs and Practices. The Revolving Issuing Lender
      shall have the Letters of Credit be subject to The Uniform Customs and
      Practice for Documentary Credits, as published as of the date of issue by
      the International Chamber of Commerce (the "UCP"), in which case the UCP
      may be incorporated therein and deemed in all respects to be a part
      thereof.

            (h) Designation of Subsidiaries as Account Parties. Notwithstanding
      anything to the contrary set forth in this Agreement, a Revolving Letter
      of Credit issued hereunder may contain a statement to the effect that such
      Revolving Letter of Credit is issued for the account of a Subsidiary of
      the Borrower; provided that, notwithstanding such statement, the Borrower
      shall be the actual account party for all purposes of this Agreement for
      such Revolving Letter of Credit and such statement shall not affect the
      Borrower's reimbursement obligations hereunder with respect to such
      Revolving Letter of Credit.

      SECTION 2.3 SWINGLINE LOAN SUBFACILITY.

            (a) Swingline Commitment. During the Revolving Commitment Period,
      subject to the terms and conditions hereof, the Swingline Lender, in its
      individual capacity, agrees to make certain revolving credit loans to the
      Borrower (each a "Swingline Loan" and, collectively, the "Swingline
      Loans") for the purposes hereinafter set forth; provided, however, (i) the
      aggregate amount of Swingline Loans outstanding at any time shall not
      exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the "Swingline Committed
      Amount"), and (ii) the sum of the aggregate principal amount of
      outstanding Revolving Loans plus outstanding Swingline Loans plus
      outstanding Revolving LOC Obligations shall not exceed the Revolving
      Committed Amount. Swingline Loans hereunder may be repaid and reborrowed
      in accordance with the provisions hereof.

            (b) Swingline Loan Borrowings.

                  (i) Notice of Borrowing and Disbursement. The Swingline Lender
            will make Swingline Loans available to the Borrower on any Business
            Day upon delivery of a Notice of Borrowing by the Borrower to the
            Administrative Agent

                                       43
<PAGE>

            not later than 2:00 P.M. on such Business Day. Swingline Loan
            borrowings hereunder shall be made in minimum amounts of $100,000
            and in integral amounts of $100,000 in excess thereof. Such
            borrowing will then be made available to the Borrower by the
            Swingline Lender on the date specified in the applicable Notice of
            Borrowing (by the end of business Eastern Time on such date) by
            crediting the account of the Borrower on the books of such office
            with the aggregate of the amounts made available to the
            Administrative Agent by the Swingline Lender and in like funds as
            received by the Administrative Agent.

                  (ii) Repayment of Swingline Loans. Each Swingline Loan
            borrowing shall be due and payable on the Revolving Commitment
            Termination Date. The Swingline Lender may, at any time, in its sole
            discretion, by written notice to the Borrower and the Administrative
            Agent, demand repayment of its Swingline Loans by way of a Revolving
            Loan borrowing, in which case the Borrower shall be deemed to have
            requested a Revolving Loan borrowing comprised entirely of Alternate
            Base Rate Loans in the amount of such Swingline Loans; provided,
            however, that in the following circumstances, any such demand shall
            also be deemed to have been given one Business Day prior to each of
            (1) the Revolving Commitment Termination Date, (2) the occurrence of
            any Bankruptcy Event, (3) upon acceleration of the Credit Party
            Obligations hereunder, whether on account of a Bankruptcy Event or
            any other Event of Default, and (4) the exercise of remedies in
            accordance with the provisions of Section 7.2 hereof (each such
            Revolving Loan borrowing made on account of any such deemed request
            therefor as provided herein being hereinafter referred to as
            "Mandatory Swingline Borrowing"). Each Revolving Lender hereby
            irrevocably agrees to make such Revolving Loans promptly upon any
            such request or deemed request on account of each Mandatory
            Swingline Borrowing in the amount and in the manner specified in the
            preceding sentence and on the same such date notwithstanding (I) the
            amount of the Mandatory Swingline Borrowing may not comply with the
            minimum amount for borrowings of Revolving Loans otherwise required
            hereunder, (II) whether any conditions specified in Section 4.2 are
            then satisfied, (III) whether a Default or an Event of Default then
            exists, (IV) failure of any such request or deemed request for
            Revolving Loans to be made by the time otherwise required in Section
            2.1(b)(i), (V) the date of such Mandatory Swingline Borrowing, or
            (VI) any reduction in the Revolving Committed Amount or termination
            of the Revolving Commitments immediately prior to such Mandatory
            Swingline Borrowing or contemporaneously therewith. In the event
            that any Mandatory Swingline Borrowing cannot for any reason be made
            on the date otherwise required above (including, without limitation,
            as a result of the commencement of a proceeding under the Bankruptcy
            Code), then each Revolving Lender hereby agrees that it shall
            forthwith purchase (as of the date the Mandatory Swingline Borrowing
            would otherwise have occurred, but adjusted for any payments
            received from the Borrower on or after such date and prior to such
            purchase) from the Swingline Lender such participations in the
            outstanding Swingline Loans as shall be necessary to cause each such
            Revolving Lender to share in such Swingline Loans ratably based upon
            its respective Revolving

                                       44
<PAGE>

            Commitment Percentage (determined before giving effect to any
            termination of the Commitments pursuant to Section 7.2); provided
            that (x) all interest payable on the Swingline Loans shall be for
            the account of the Swingline Lender until the date as of which the
            respective participation is purchased, and (y) at the time any
            purchase of participations pursuant to this sentence is actually
            made, the purchasing Revolving Lender shall be required to pay to
            the Swingline Lender interest on the principal amount of such
            participation purchased for each day from and including the day upon
            which the Mandatory Swingline Borrowing would otherwise have
            occurred to but excluding the date of payment for such
            participation, at the rate equal to, if paid within two (2) Business
            Days of the date of the Mandatory Swingline Borrowing, the Federal
            Funds Effective Rate, and thereafter at a rate equal to the
            Alternate Base Rate.

            (c) Interest on Swingline Loans. Subject to the provisions of
      Section 2.11(b), Swingline Loans shall bear interest at a per annum rate
      equal to the Alternate Base Rate plus the Applicable Percentage for
      Revolving Loans that are Alternate Base Rate Loans. Interest on Swingline
      Loans shall be payable in arrears on each Interest Payment Date.

            (d) Swingline Note. The Swingline Loans shall be evidenced by a duly
      executed promissory note of the Borrower to the Swingline Lender in the
      original amount of the Swingline Committed Amount and substantially in the
      form of Schedule 2.3(d).

      SECTION 2.4 CREDIT-LINKED FACILITY--TERM LOAN SUBFACILITY.

            (a) Initial Term Loan. Subject to the terms and conditions hereof
      and in reliance upon the representations and warranties set forth herein,
      each Credit-Linked Lender severally agrees to make available to the
      Administrative Agent on the Closing Date such Credit-Linked Lender's
      Credit-Linked Commitment Percentage of Term Loans in Dollars in the
      aggregate principal amount of TWENTY-FIVE MILLION DOLLARS ($25,000,000)
      (as such amount may be increased by any Credit-Linked Purchase that is
      converted to Term Loans pursuant to Section 2.5(d)(ii), the "Term Loan
      Committed Amount") for the purposes hereinafter set forth; provided,
      however, (i) with regard to each Credit-Linked Lender individually, the
      sum of such Credit-Linked Lender's Credit-Linked Commitment Percentage of
      the aggregate principal amount of the outstanding Term Loans plus
      outstanding Credit-Linked LOC Obligations shall not at any time exceed
      such Credit-Linked Lender's Credit-Linked Commitment and (ii) with regard
      to the Credit-Linked Lenders collectively, the sum of the aggregate
      principal amount of the outstanding Term Loans plus outstanding
      Credit-Linked LOC Obligations shall not at any time exceed the
      Credit-Linked Committed Amount then in effect. Upon receipt by the
      Administrative Agent of the proceeds of the Term Loan made on the Closing
      Date, such proceeds will then be made available to the Borrower by the
      Administrative Agent by crediting the account of the Borrower on the books
      of the office of the Administrative Agent specified in Section 9.2, or at
      such other office as the Administrative Agent may designate in writing,
      with the aggregate of such proceeds made available to the Administrative
      Agent by the Credit-Linked Lenders and in like funds as received by the
      Administrative Agent (or by crediting such other account(s) as

                                       45
<PAGE>

      directed by the Borrower). Each Term Loan may consist of Alternate Base
      Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower
      may request. Amounts repaid or prepaid on any Term Loan may not be
      reborrowed. LIBOR Rate Loans shall be made by each Credit-Linked Lender at
      its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic
      Lending Office.

            (b) Repayment of Term Loans. The principal amount of the Term Loans
      shall be repaid in twenty-four (24) consecutive calendar quarterly
      installments as follows, unless accelerated sooner pursuant to Section
      7.2:

<TABLE>
<CAPTION>
Principal Amortization Payment Dates     Term Loan Principal Amortization Payment
------------------------------------     ----------------------------------------
<S>                                      <C>
          February 28, 2005                              $250,000

            May 31, 2005                                 $250,000

           August 31, 2005                               $250,000

          November 30, 2005                              $250,000

          February 28, 2006                              $250,000

            May 31, 2006                                 $250,000

           August 31, 2006                               $250,000

          November 30, 2006                              $250,000

          February 28, 2007                              $250,000

            May 31, 2007                                 $250,000

           August 31, 2007                               $250,000

          November 30, 2007                              $250,000

          February 28, 2008                              $250,000

            May 31, 2008                                 $250,000

           August 31, 2008                               $250,000

          November 30, 2008                              $250,000

          February 28, 2009                              $250,000

            May 31, 2009                                 $250,000

           August 31, 2009                               $250,000

          November 30, 2009                              $250,000

          February 28, 2010                              $250,000

            May 31, 2010                                 $250,000

           August 31, 2010                               $250,000

     Credit-Linked Maturity Date         Remaining principal amount of Term Loans
</TABLE>

      The outstanding principal amount of the Term Loans and all accrued but
      unpaid interest and other amounts payable with respect to the Term Loans
      shall be repaid on the Credit-Linked Maturity Date.

            (c) Interest on the Term Loans. Subject to the provisions of Section
      2.11, the Term Loan shall bear interest as follows:

                                       46
<PAGE>

                  (i) Alternate Base Rate Loans. During such periods as the Term
            Loans shall be comprised of Alternate Base Rate Loans, each such
            Alternate Base Rate Loan shall bear interest at a per annum rate
            equal to the sum of the Alternate Base Rate plus the Applicable
            Percentage; and

                  (ii) LIBOR Rate Loans. During such periods as the Term Loans
            shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
            shall bear interest at a per annum rate equal to the sum of the
            LIBOR Rate plus the Applicable Percentage.

                  Interest on the Term Loans shall be payable in arrears on each
            Interest Payment Date.

            (d) Term Loan Notes. The Borrower's obligation to pay each
      Credit-Linked Lender's portion of the Term Loans shall be evidenced, upon
      such Credit-Linked Lender's request, by a Term Loan Note made payable to
      such Credit-Linked Lender in substantially the form of Schedule 2.4(d).

      SECTION 2.5 CREDIT-LINKED FACILITY - LETTER OF CREDIT SUBFACILITY.

            (a) Issuance. Subject to the terms and conditions hereof and of the
      LOC Documents, if any, and any other terms and conditions which the
      Credit-Linked Issuing Lender may reasonably require, during the
      Credit-Linked Commitment Period the Credit-Linked Issuing Lender shall
      issue, and the Credit-Linked Lenders shall participate in, standby
      Credit-Linked Letters of Credit for the account of the Borrower from time
      to time upon request in a form acceptable to the Credit-Linked Issuing
      Lender; provided, however, that (i) the aggregate amount of Credit-Linked
      LOC Obligations shall not at any time exceed the lesser of (A)
      SEVENTY-FIVE MILLION DOLLARS ($75,000,000) (as reduced from time to time
      in accordance with the terms of Section 2.5(d)(ii) or Section 2.8(a), the
      "Credit-Linked LOC Committed Amount") and (B) the principal amount of the
      Credit-Linked Deposit, (ii) with regard to each Credit-Linked Lender
      individually, (A) the sum of such Credit-Linked Lender's Credit-Linked
      Commitment Percentage of the outstanding Credit-Linked LOC Obligations
      shall not exceed such Credit-Linked Lender's Credit-Linked Deposit and (B)
      the sum of such Credit-Linked Lender's Credit-Linked Commitment Percentage
      of the aggregate principal amount of the outstanding Term Loans plus
      outstanding Credit-Linked LOC Obligations shall not at any time exceed
      such Credit-Linked Lender's Credit-Linked Commitment, (iii) with regard to
      the Credit-Linked Lenders collectively, the sum of the aggregate principal
      amount of outstanding Term Loans plus outstanding Credit-Linked LOC
      Obligations shall not at any time exceed the Credit-Linked Committed
      Amount then in effect, (iv) no Credit-Linked Letter of Credit may be
      issued without the Administrative Agent confirming in writing to any
      Credit-Linked Issuing Lender (other than the Administrative Agent in its
      capacity as a Credit-Linked Issuing Lender) that, after giving effect to
      the issuance of such Credit-Linked Letter of Credit, the requirement set
      forth in clause (iii) above shall be satisfied, (v) all Credit-Linked
      Letters of Credit shall be denominated in Dollars and (vi) Credit-Linked
      Letters of Credit shall be issued for any lawful corporate

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<PAGE>

      purposes, including in connection with workers' compensation and other
      insurance programs. Except as otherwise expressly agreed upon by all the
      Credit-Linked Lenders, no Credit-Linked Letter of Credit shall have an
      original expiry date more than twelve (12) months from the date of
      issuance; provided, however, the expiry dates of Credit-Linked Letters of
      Credit may be extended annually or periodically from time to time at the
      request of the Borrower or by operation of the terms of the applicable
      Letter of Credit to a date not more than twelve (12) months from the date
      of extension; provided, further, that (x) no Credit-Linked Letter of
      Credit, as originally issued or as extended, shall have an expiry date
      extending beyond the date that is ten (10) days prior to the Credit-Linked
      Maturity Date and (y) if an Event of Default exists at the time such
      Credit-Linked Letter of Credit is to be extended, the Credit-Linked
      Issuing Lender may or, at the direction of Credit-Linked Lenders holding
      more than 50% of the Credit-Linked Commitments, the Credit-Linked Issuing
      Lender shall refuse to extend such Credit-Linked Letter of Credit, in
      which case such Credit-Linked Letter of Credit shall terminate at the end
      of the current term thereof. Each Credit-Linked Letter of Credit shall
      comply with the related LOC Documents. The issuance and expiry date of
      each Credit-Linked Letter of Credit shall be a Business Day. Any
      Credit-Linked Letters of Credit issued hereunder shall be in a minimum
      original face amount of $100,000 or such lesser amount as approved by the
      Credit-Linked Issuing Lender.

            (b) Notice and Reports. The request for the issuance of a
      Credit-Linked Letter of Credit shall be submitted to the Credit-Linked
      Issuing Lender and the Administrative Agent at least three (3) Business
      Days prior to the requested date of issuance. The Credit-Linked Issuing
      Lender will promptly upon request provide to the Administrative Agent for
      dissemination to the Credit-Linked Lenders a detailed report specifying
      the Credit-Linked Letters of Credit which are then issued by such
      Credit-Linked Issuing Lender and outstanding and any activity with respect
      thereto which may have occurred since the date of any prior report, and
      including therein, among other things, the account party, the beneficiary,
      the face amount, expiry date as well as any payments or expirations which
      may have occurred. The Credit-Linked Issuing Lender will further provide
      to the Administrative Agent promptly upon request copies of the
      Credit-Linked Letters of Credit.

            (c) Participations. Each Credit-Linked Lender, upon issuance of any
      Credit-Linked Letter of Credit (or upon a Person becoming a Credit-Linked
      Lender hereunder) and, in the case of each Existing Letter of Credit, on
      the Closing Date, shall be deemed to have irrevocably purchased, without
      recourse to the Credit-Linked Issuing Lender, and the Credit-Linked
      Issuing Lender shall be deemed to have irrevocably granted without
      recourse to the Credit-Linked Issuing Lender, a risk participation (a
      "Credit-Linked Participation") from the Credit-Linked Issuing Lender in
      such Credit-Linked Letter of Credit and the obligations arising thereunder
      and any collateral relating thereto, in each case in an amount equal to
      its Credit-Linked Commitment Percentage of the maximum amounts available
      to be drawn under such Credit-Linked Letter of Credit and shall
      absolutely, unconditionally and irrevocably assume, as primary obligor and
      not as surety, and be obligated to pay to the Credit-Linked Issuing Lender
      therefor and discharge when due, its Credit-Linked Commitment Percentage
      of the obligations arising under such

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<PAGE>

      Credit-Linked Letter of Credit. Without limiting the scope and nature of
      each Credit-Linked Lender's participation in any Credit-Linked Letter of
      Credit, to the extent that the Credit-Linked Issuing Lender has not been
      reimbursed as required hereunder or under any LOC Document, each such
      Credit-Linked Lender shall fund its Credit-Linked Participation Interest
      therein by paying to the Credit-Linked Issuing Lender, from funds
      deposited by such Credit-Linked Lender into the Credit-Linked Deposit, its
      Credit-Linked Commitment Percentage of such unreimbursed drawing in same
      day funds on the day of notification by the Credit-Linked Issuing Lender
      of an unreimbursed drawing pursuant to and in accordance with the
      provisions of subsection (d) hereof. The obligation of each Credit-Linked
      Lender to so pay the Credit-Linked Issuing Lender shall be absolute and
      unconditional and shall not be affected by the occurrence of a Default, an
      Event of Default or any other occurrence or event.

            (d) Reimbursement; Funding of Participation Interests.

                  (i) Reimbursement by Borrower. In the event of any drawing
            under any Credit-Linked Letter of Credit, the Credit-Linked Issuing
            Lender will promptly notify the Borrower and the Administrative
            Agent. If a drawing under a Credit-Linked Letter of Credit is in
            excess of $15,000,000, the Borrower shall be deemed to have
            requested a Credit-Linked Purchase in the amount of such drawing as
            provided in subsection (d)(ii) below, the proceeds of which shall be
            used to satisfy the reimbursement obligations. If a drawing under a
            Credit-Linked Letter of Credit is less than $15,000,000, the
            Borrower shall reimburse the Credit-Linked Issuing Lender on the day
            of such drawing (either with the proceeds of a Revolving Loan
            obtained hereunder or otherwise) in same day funds as provided
            herein or in the LOC Documents if the Borrower shall have been given
            notice of such drawing by 12:00 Noon and otherwise on the next
            Business Day after such drawing if the Borrower shall have been
            given notice of such drawing after 12:00 Noon. If the Borrower shall
            be given notice of a drawing by 12:00 Noon and shall fail to
            reimburse the Credit-Linked Issuing Lender on the same date of such
            notice, the unreimbursed amount of such drawing shall bear interest
            from the date of notice until the first to occur of (A) the
            reimbursement of such drawing or (B) the conversion of such
            Unreimbursed Drawing to a Term Loan pursuant to subsection (d)(ii)
            below at a per annum rate equal to the ABR Default Rate. If the
            Borrower shall be given notice of a drawing after 12:00 Noon, the
            unreimbursed amount of such drawing shall bear interest from the
            date of notice until the next Business Day at a per annum rate equal
            to the Alternate Base Rate plus the Applicable Percentage and if the
            Borrower shall fail to reimburse the Credit-Linked Issuing Lender on
            such next Business Day, the unreimbursed amount of such drawing
            shall bear interest from the Business Day succeeding the date of
            notice until the first to occur of (A) the reimbursement of such
            drawing or (B) the conversion of such Unreimbursed Drawing to a Term
            Loan pursuant to subsection (d)(ii) below at a per annum rate equal
            to the ABR Default Rate. Unless the Borrower shall promptly notify
            the Credit-Linked Issuing Lender and the Administrative Agent of its
            intent to otherwise reimburse the Credit-Linked Issuing Lender after
            receipt by the Borrower of notice of a drawing, the Borrower

                                       49
<PAGE>

            shall be deemed to have requested a Credit-Linked Purchase in the
            amount of such drawing as provided in subsection (d)(ii) below, the
            proceeds of which will be used to satisfy the reimbursement
            obligations. The Borrower's reimbursement obligations hereunder
            shall be absolute and unconditional under all circumstances
            irrespective of any rights of set-off, counterclaim or defense to
            payment the Borrower may claim or have against the Credit-Linked
            Issuing Lender, the Administrative Agent, the Lenders, the
            beneficiary of the Credit-Linked Letter of Credit drawn upon or any
            other Person, including without limitation any defense based on any
            failure of the Borrower to receive consideration or the legality,
            validity, regularity or unenforceability of the Credit-Linked Letter
            of Credit; provided that the Borrower shall not be deemed to have
            waived any claims it may have against the Credit-Linked Issuing
            Lender, the Administrative Agent, the Lenders, the beneficiary of
            the Credit-Linked Letter of Credit drawn upon or any other Person
            and may separately pursue such claims after payment of such
            reimbursement obligations.

                  (ii) Funding of Participation Interests by Credit-Linked
            Lenders; Conversion to Term Loans. After any drawing under any
            Credit-Linked Letter of Credit and upon the earlier of (A) the
            failure of the Borrower to reimburse such drawing in accordance with
            the terms of subsection (d)(i) hereof, (B) receipt by the
            Credit-Linked Issuing Lender of notice from the Borrower that it
            will not exercise its right to reimburse such drawing and (C) the
            occurrence or continuation of a Default or an Event of Default, (1)
            in order to fund its Credit-Linked Participation Interest in such
            unreimbursed drawing (an "Unreimbursed Drawing"), each Credit-Linked
            Lender hereby authorizes the Administrative Agent to pay the
            Credit-Linked Issuing Lender (such payment, a "Credit-Linked
            Purchase") in the amount of such Credit-Linked Lender's
            Credit-Linked Commitment Percentage of such Unreimbursed Drawing,
            solely from such Credit-Linked Lender's Credit-Linked Deposit, and
            such Credit-Linked Lender hereby irrevocably authorizes the
            Administrative Agent to charge the Credit-Linked Account for such
            purpose, (2) the Credit-Linked LOC Committed Amount shall be
            automatically reduced by the amount of each Credit-Linked Purchase
            and shall not be reinstated, (3) such Unreimbursed Drawing shall be
            automatically converted to a funded Term Loan consisting of an
            Alternate Base Rate Loan without any further act by the Borrower,
            the Credit-Linked Issuing Lender, the Administrative Agent or any
            Credit-Linked Lender, which Term Loan shall be subject to the terms
            and conditions of Section 2.4 and (4) the Term Loan Committed Amount
            shall be automatically permanently increased by the amount of each
            Credit-Linked Purchase. The Credit-Linked Issuing Lender will
            promptly notify the Administrative Agent (which shall notify the
            Credit-Linked Lenders) of the amount of any Unreimbursed Drawing.
            Each Credit-Linked Lender's obligation to fund its Credit-Linked
            Participation Interest in any Unreimbursed Drawing by paying to the
            Credit-Linked Issuing Lender its Credit-Linked Commitment Percentage
            of any Unreimbursed Drawing, and the right of the Credit-Linked
            Issuing Lender to receive the same, shall be absolute and
            unconditional, shall be made without any offset, abatement,
            withholding or

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<PAGE>

            reduction whatsoever and shall not be affected by any circumstance
            whatsoever and without regard to (I) whether any conditions
            specified in Section 4.2 are then satisfied, (II) whether a Default
            or an Event of Default then exists, (III) the date of such
            Credit-Linked Purchase and Term Loan, (IV) any reduction in the
            Credit-Linked Committed Amount after any such Credit-Linked Letter
            of Credit may have been drawn upon, (V) the termination of this
            Credit Agreement or the Commitments hereunder or (VI) the
            acceleration of the Credit Party Obligations hereunder.

            (e) Repayment of Participations.

                  (i) At any time after the Credit-Linked Issuing Lender has
            made a payment under any Credit-Linked Letter of Credit and has
            received from the Credit-Linked Account the proceeds of
            Credit-Linked Purchases by the Credit-Linked Lenders in respect of
            such payment in accordance with Section 2.5(d) (which Credit-Linked
            Purchases have been converted to Term Loans in accordance with such
            Section), if the Administrative Agent receives for the account of
            the Credit-Linked Issuing Lender any payment in respect of the
            related Unreimbursed Drawing or interest thereon for any period
            after such Unreimbursed Drawing was paid with a Credit-Linked
            Purchase, the Administrative Agent will distribute to such
            Credit-Linked Lender its Term Loan Commitment Percentage thereof. If
            the Credit-Linked Issuing Lender shall have received from the
            Credit-Linked Account the proceeds of Credit-Linked Purchases by the
            Credit-Linked Lenders and thereafter shall receive any direct
            payment from the Borrower in respect of the Unreimbursed Drawing
            with respect to which such Credit-Linked Purchases were made, the
            Credit-Linked Issuing Lender shall immediately pay the amount
            received to the Administrative Agent for distribution to the
            Credit-Linked Lenders in accordance with this Section 2.5(e).

                  (ii) If any payment received by the Administrative Agent for
            the account of the Credit-Linked Issuing Lender pursuant to Section
            2.5(e)(i) and distributed to the Credit-Linked Lenders by the
            Administrative Agent is required to be returned under any
            circumstance (including pursuant to any settlement entered into by
            the Credit-Linked Issuing Lender), each Credit-Linked Lender shall
            pay to the Administrative Agent for the account of the Credit-Linked
            Issuing Lender its Credit-Linked Commitment Percentage thereof on
            demand of the Administrative Agent, plus interest thereon from the
            date of such demand to the date such amount is returned by such
            Credit-Linked Lender, at a rate per annum equal to the Federal Funds
            Rate from time to time in effect.

            (f) Modification, Extension. The issuance of any supplement,
      modification, amendment, renewal, or extension to any Credit-Linked Letter
      of Credit shall, for purposes hereof, be treated in all respects the same
      as the issuance of a new Credit-Linked Letter of Credit hereunder.

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<PAGE>

            (g) Uniform Customs and Practices. The Credit-Linked Issuing Lender
      shall have the Letters of Credit be subject to The Uniform Customs and
      Practice for Documentary Credits, as published as of the date of issue by
      the UCP in which case the UCP may be incorporated therein and deemed in
      all respects to be a part thereof.

            (h) Designation of Subsidiaries as Account Parties. Notwithstanding
      anything to the contrary set forth in this Agreement, a Credit-Linked
      Letter of Credit issued hereunder may contain a statement to the effect
      that such Credit-Linked Letter of Credit is issued for the account of a
      Subsidiary of the Borrower; provided that, notwithstanding such statement,
      the Borrower shall be the actual account party and borrower for all
      purposes of this Agreement for such Credit-Linked Letter of Credit and any
      Credit-Linked Purchase and Term Loan with respect to an Unreimbursed
      Drawing thereunder and such statement shall not affect the Borrower's
      reimbursement obligations hereunder with respect to such Credit-Linked
      Letter of Credit and its repayment obligations hereunder with respect to
      such Term Loan.

            (i) Existing Letters of Credit. Each Existing Letter of Credit shall
      be deemed for all purposes of this Agreement and the other Credit
      Documents to be a Credit-Linked Letter of Credit. The Borrower's
      reimbursement obligations in respect of each Existing Letter of Credit,
      and each Credit-Linked Lender's Participation Interests therein, shall be
      governed by the terms of this Credit Agreement.

            (j) Credit-Linked Note. The Borrower's reimbursement obligations
      with respect to the Credit-Linked Letters of Credit issued pursuant to
      this Section 2.5 shall be evidenced by a Credit-Linked Note made payable
      to the Credit-Linked Issuing Lender in substantially the form of Schedule
      2.5(j).

      SECTION 2.6 CREDIT-LINKED DEPOSITS.

            (a) Funding of Credit-Linked Deposits. Subject to the terms and
      conditions set forth herein and in consideration of each Credit-Linked
      Lender's Credit-Linked Participation, each Credit-Linked Lender severally
      agrees to fund such Lender's Credit-Linked Deposit to the Administrative
      Agent in Dollars on the Closing Date in an amount equal to its
      Credit-Linked Commitment for deposit by the Administrative Agent in the
      Credit-Linked Account. Each Credit-Linked Lender's Credit-Linked Deposit
      represents such Lender's funded Credit-Linked Participation.

            (b) Purpose of Credit-Linked Deposits. The Credit-Linked Deposits
      will be held by the Administrative Agent in its name in the Credit-Linked
      Account, on behalf of the Credit-Linked Lenders and for the benefit of the
      Credit-Linked Issuing Lender. The Credit-Linked Account will be under the
      sole dominion and control of the Administrative Agent and no Person other
      than the Administrative Agent shall have the right of withdrawal from the
      Credit-Linked Account nor any other right or power with respect to the
      Credit-Linked Deposits or the Credit-Linked Account. Unless returned to
      the Credit-Linked Lenders, the Credit-Linked Deposits shall not be used
      for any purpose other than

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<PAGE>

      funding the Credit-Linked Participations in the Credit-Linked Letters of
      Credit without the prior written consent of each Credit-Linked Issuing
      Lender.

            (c) Actions of Administrative Agent. In charging the Credit-Linked
      Account or otherwise exercising any rights of set-off with respect
      thereto, the Administrative Agent acts as the agent of the Credit-Linked
      Issuing Lender.

            (d) Grant of Security Interest in Credit-Linked Account. The
      Administrative Agent hereby grants, and the Credit-Linked Lenders hereby
      grant and hereby authorize the Administrative Agent to grant, to the
      Credit-Linked Issuing Lender, a security interest in and Lien on the
      Credit-Linked Account, the Credit-Linked Deposits and all cash, Cash
      Equivalents or other amounts or investments from time to time in the
      Credit-Linked Account. The foregoing security interest and Lien shall
      secure the obligations of the Credit-Linked Lenders to fund their
      Credit-Linked Participation Interests in any Unreimbursed Drawing by
      paying the Credit-Linked Issuing Lender for such Unreimbursed Drawing.
      Each of the Administrative Agent and the Credit-Linked Lenders agree to
      execute such agreements and documents and take such actions as may be
      reasonably required by the Credit-Linked Issuing Lender to perfect and
      protect the foregoing security interest and Lien.

            (e) Investment of Credit-Linked Deposits. Pending the use of the
      Credit-Linked Deposits to fund the Credit-Linked Lenders' Credit-Linked
      Participation Interests in Unreimbursed Drawings under the Credit-Linked
      Letters of Credit, the Administrative Agent will invest such Credit-Linked
      Deposits and will pay to Credit-Linked Lenders in arrears on the last
      Business Day of each calendar quarter any return on such investment during
      the previous calendar quarter up to an amount not to exceed LIBOR as of
      the last Business Day of such previous calendar quarter.

            (f) Reduction of Credit-Linked Deposit. If any Credit-Linked
      Purchase is made with proceeds of the Credit-Linked Deposits, the
      Credit-Linked Deposits shall be automatically permanently reduced by the
      amount of such Credit-Linked Purchase. If the Borrower elects to reduce
      the Credit-Linked LOC Committed Amount pursuant to Section 2.8(a), the
      Credit-Linked Deposit shall be automatically permanently reduced by a
      corresponding amount and the amount of such reduction shall be returned to
      the Credit-Linked Lenders on a pro rata basis by the Administrative Agent.

      SECTION 2.7 FEES.

            (a) Revolving Commitment Fee. In consideration of the Revolving
      Commitments, the Borrower agrees to pay to the Administrative Agent, for
      the ratable benefit of the Revolving Lenders, a commitment fee (the
      "Revolving Commitment Fee") in an amount equal to 0.50% per annum on the
      average daily unused amount of the Revolving Committed Amount. For
      purposes of computation of the Revolving Commitment Fee, Revolving LOC
      Obligations shall be considered usage but Swingline Loans shall not be
      considered usage of the Revolving Committed Amount.

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<PAGE>

            (b) Credit-Linked Subfacility Fee. In consideration of the
      Credit-Linked LOC Commitment and the Credit-Linked Participations, the
      Borrower agrees to pay to the Administrative Agent, for the ratable
      benefit of the Credit-Linked Lenders, a subfacility fee (the
      "Credit-Linked Subfacility Fee") in an amount equal to 3.00% plus the
      Shortfall Amount per annum on the average daily Credit-Linked LOC
      Committed Amount. The Credit-Linked Subfacility Fee shall be payable at
      the end of each LIBOR period used to determine the Shortfall Amount.

            (c) Revolving LOC Fees. In consideration of the Revolving LOC
      Commitments, the Borrower agrees to pay to the Administrative Agent, for
      the ratable benefit of the Revolving Lenders, a fee (the "Revolving LOC
      Commitment Fee") equal to the Applicable Percentage for Revolving Loans
      that are LIBOR Rate Loans per annum on the average daily maximum amount
      available to be drawn under each Revolving Letter of Credit from the date
      of issuance to the date of expiration. In addition to such Revolving LOC
      Commitment Fee, the Borrower agrees to pay to the Revolving Issuing
      Lender, for its own account without sharing by the Revolving Lenders, an
      additional fronting fee (the "Revolving LOC Fronting Fee") of one-quarter
      of one percent (0.25%) per annum on the average daily maximum amount
      available to be drawn under each Revolving Letter of Credit issued by it.

            (d) Credit-Linked LOC Fronting Fees. The Borrower agrees to pay to
      the Credit-Linked Issuing Lender, for its own account without sharing by
      the Credit-Linked Lenders, a fronting fee (the "Credit-Linked LOC Fronting
      Fee") of one-tenth of one percent (0.10%) per annum on the average daily
      maximum amount available to be drawn under each Credit-Linked Letter of
      Credit (other than an Existing Letter of Credit) issued by it. The
      Credit-Linked LOC Fronting Fee shall be payable at the time of issuance
      and of renewal of the applicable Credit-Linked Letter of Credit.

            (e) Issuing Lender Fees. In addition to the Revolving LOC Fronting
      Fees and the Credit-Linked LOC Fronting Fees payable pursuant to this
      Section, the Borrower shall pay to the Issuing Lender for its own account
      without sharing by the other Lenders the reasonable and customary charges
      from time to time of the Issuing Lender with respect to the amendment,
      transfer, administration, cancellation and conversion of, and drawings
      under, the Letters of Credit (collectively, the "Issuing Lender Fees").

            (f) Administrative Fee. The Borrower agrees to pay to the
      Administrative Agent the annual administrative fee as described in the Fee
      Letter.

            (g) Payment of Fees. The Revolving Commitment Fees, Revolving LOC
      Commitment Fees, Revolving LOC Fronting Fees and Issuing Lender Fees shall
      each be payable quarterly in arrears on the last Business Day of each
      calendar quarter.

      SECTION 2.8 COMMITMENT REDUCTIONS.

            (a) Voluntary Reductions. The Borrower shall have the right to
      terminate or permanently reduce the unused portion of the Revolving
      Committed Amount and the

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<PAGE>

      Credit-Linked LOC Committed Amount at any time or from time to time upon
      not less than five (5) Business Days' prior written notice to the
      Administrative Agent (which shall notify the Lenders thereof as soon as
      practicable) of each such termination or reduction, which notice shall
      specify the effective date thereof and the amount of any such reduction
      which shall be in a minimum amount of $2,000,000 or a whole multiple of
      $1,000,000 in excess thereof and shall be irrevocable and effective upon
      receipt by the Administrative Agent; provided that (i) no such reduction
      or termination of the Revolving Committed Amount shall be permitted if
      after giving effect thereto, and to any prepayments of the Revolving Loans
      made on the effective date thereof, the sum of the aggregate principal
      amount of outstanding Revolving Loans plus outstanding Swingline Loans
      plus outstanding Revolving LOC Obligations would exceed the Revolving
      Committed Amount then in effect and (ii) no such reduction or termination
      of the Credit-Linked LOC Committed Amount shall be permitted if after
      giving effect thereto, the outstanding Credit-Linked LOC Obligations would
      exceed the Credit-Linked LOC Committed Amount then in effect or the
      Credit-Linked Deposits at such time.

            (b) Maturity Date. The Revolving Commitments, the LOC Commitments
      and the Swingline Commitment shall automatically terminate on the
      Revolving Commitment Termination Date. The Term Loan Commitment and the
      Credit-Linked LOC Commitment shall automatically terminate on the
      Credit-Linked Maturity Date.

      SECTION 2.9 PREPAYMENTS.

            (a) Optional Prepayments. The Borrower shall have the right to
      prepay the Revolving Loans and the Term Loans in whole or in part from
      time to time as the Borrower may elect; provided, however, that (i) each
      partial prepayment of Term Loans shall be in a minimum principal amount of
      $1,000,000 and integral multiples of $100,000 in excess thereof and (ii)
      each voluntary prepayment of the Term Loan shall be applied to the
      remaining amortization payments thereof on a pro rata basis. The Borrower
      shall give at least three (3) Business Days' (but not more than five (5)
      Business Days') irrevocable notice in the case of LIBOR Rate Loans and at
      least one (1) Business Day's (but not more than five (5) Business Days')
      irrevocable notice in the case of Alternate Base Rate Loans, to the
      Administrative Agent (which shall notify the Lenders thereof as soon as
      practicable). Subject to the foregoing terms, amounts prepaid under this
      Section 2.9(a) shall be applied first to Alternate Base Rate Loans and
      then to LIBOR Rate Loans in direct order of Interest Period maturities.
      All prepayments under this Section 2.9(a) shall be subject to Section
      2.18, but otherwise without premium or penalty. Interest on the principal
      amount prepaid shall be due and payable on any date that a prepayment is
      made hereunder through the date of prepayment.

            (b) Mandatory Prepayments.

                  (i) (A) Revolving Committed Amount. If at any time after the
            Closing Date, the sum of the aggregate principal amount of
            outstanding Revolving Loans plus outstanding Swingline Loans plus
            outstanding Revolving LOC Obligations shall exceed the Revolving
            Committed Amount then in effect,

                                       55
<PAGE>

            the Borrower immediately shall prepay the Revolving Loans and
            Swingline Loans and (after all Revolving Loans and Swingline Loans
            have been repaid) cash collateralize the Revolving LOC Obligations
            in an amount sufficient to eliminate such excess.

                        (B) Credit-Linked LOC Committed Amount. If at any time
                  after the Closing Date, the aggregate amount of Credit-Linked
                  LOC Obligations shall exceed the lesser of (1) the
                  Credit-Linked LOC Committed Amount and (2) the principal
                  amount of the Credit-Linked Deposit, the Borrower immediately
                  shall cash collateralize the Credit-Linked LOC Obligations in
                  the amount of such excess.

                  (ii) Excess Cash Flow. Within one hundred ten (110) days after
            the end of each fiscal year (commencing with the fiscal year ending
            November 30, 2005), the Borrower shall prepay the Loans in an amount
            equal to 50% of the Excess Cash Flow earned during such prior fiscal
            year. Any payments of Excess Cash Flow shall be applied as set forth
            in clause (viii) below.

                  (iii) Asset Dispositions. Promptly following any Asset
            Disposition (or related series of Asset Dispositions), the Borrower
            shall prepay the Loans in an aggregate amount equal to the Net Cash
            Proceeds derived from such Asset Disposition (or related series of
            Asset Dispositions) (such prepayment to be applied as set forth in
            clause (viii) below); provided that (A) the Net Cash Proceeds from
            Asset Dispositions in any fiscal year shall not be required to be so
            applied until the aggregate amount of such Net Cash Proceeds is
            equal to or greater than $1,000,000 for such fiscal year, (B) the
            Borrower shall be permitted to reinvest up to $10,000,000 of Net
            Cash Proceeds received from Asset Dispositions in the aggregate in
            fixed or capital assets so long as (1) no Default or Event of
            Default shall have occurred and be continuing at the time of such
            Asset Disposition and at the time of such reinvestment, (2) before
            or promptly after such Asset Disposition, the Borrower delivers to
            the Administrative Agent a certificate stating that such Net Cash
            Proceeds will be reinvested in accordance with the terms of this
            Section 2.8(b)(iii) and (3) such reinvestments occurs within 365
            days of the receipt of such Net Cash Proceeds, and (C) with respect
            to any Permitted Real Estate Sale, the Borrower shall not be
            required to prepay Loans with the Net Cash Proceeds from such
            Permitted Real Estate Sale to the extent the Loan to Value Test is
            satisfied after giving effect to such Permitted Real Estate Sale.

                  (iv) Debt Issuances. Promptly, upon receipt by any Credit
            Party or any of its Subsidiaries of proceeds from any Debt Issuance,
            the Borrower shall prepay the Loans in an aggregate amount equal to
            100% of the Net Cash Proceeds of such Debt Issuance (such prepayment
            to be applied as set forth in clause (viii) below).

                  (v) Issuances of Equity. Promptly, upon receipt by any Credit
            Party or any of its Subsidiaries of proceeds from any Equity
            Issuance, the Borrower shall

                                       56
<PAGE>

            prepay the Loans in an aggregate amount equal to 50% of the Net Cash
            Proceeds of such Equity Issuance (such prepayment to be applied as
            set forth in clause (viii) below).

                  (vi) Recovery Event. To the extent Net Cash Proceeds received
            in connection with any Recovery Event are not used to acquire fixed
            or capital assets in replacement of the assets subject to such
            Recovery Event within 365 days of the receipt of such Net Cash
            Proceeds, immediately following the 365th day occurring after the
            receipt of such Net Cash Proceeds, the Borrower shall prepay the
            Loans in an aggregate amount equal to 100% of such Net Cash Proceeds
            (such prepayment to be applied as set forth in clause (vii) below);
            provided that (A) the Net Cash Proceeds from Recovery Events in any
            fiscal year shall not be required to be so applied until the
            aggregate amount of such Net Cash Proceeds is equal to or greater
            than $1,000,000 for such fiscal year, (B) after the occurrence and
            during the continuation of a Default, any Net Cash Proceeds shall be
            delivered to the Administrative Agent in escrow until the earlier of
            (I) the cure of such Default at which time the Net Cash Proceeds
            shall be used by the Borrower as set forth herein and (II) the
            occurrence of an Event of Default at which time the Net Cash
            Proceeds shall be used to prepay the Loans as set forth herein and
            (C) after the occurrence and during the continuance of an Event of
            Default, any Net Cash Proceeds received in connection with any
            Recovery Event shall be promptly used to prepay the Loans (such
            prepayment to be applied as set forth in clause (viii) below) and
            the Borrower and its Subsidiaries shall not have the right to
            reinvest such Net Cash Proceeds.

                  (vii) Litigation Award. To the extent Net Cash Proceeds
            received in connection with any Litigation Award are not reinvested
            in the business of the Credit Parties within 365 days of the receipt
            of such Net Cash Proceeds, immediately following the 365th day
            occurring after the receipt of such Net Cash Proceeds, the Borrower
            shall prepay the Loans in an aggregate amount equal to one 100% of
            such Net Cash Proceeds (such prepayment to be applied as set forth
            in clause (viii) below); provided that (A) the Net Cash Proceeds
            from any Litigation Award in any fiscal year shall not be required
            to be so applied until the aggregate amount of such Net Cash
            Proceeds is equal to or greater than $1,000,000 for such fiscal
            year, (B) after the occurrence and during the continuation of a
            Default, any Net Cash Proceeds shall be delivered to the
            Administrative Agent in escrow until the earlier of (I) the cure of
            such Default at which time the Net Cash Proceeds shall be used by
            the Borrower as set forth herein and (II) the occurrence of an Event
            of Default at which time the Net Cash Proceeds shall be used to
            prepay the Loans as set forth herein and (C) after the occurrence
            and during the continuance of an Event of Default, any Net Cash
            Proceeds received in connection with any Litigation Award shall be
            promptly used to prepay the Loans (such prepayment to be applied as
            set forth in clause (viii) below) and the Borrower and its
            Subsidiaries shall not have the right to reinvest such Net Cash
            Proceeds.

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                  (viii) Application of Mandatory Prepayments. All amounts
            required to be paid pursuant to this Section 2.9(b) shall be applied
            as follows:

                        (A) with respect to all amounts prepaid pursuant to
                  Section 2.9(b)(i), (1) first to the outstanding Swingline
                  Loans, (2) second to the outstanding Revolving Loans and (3)
                  third to a cash collateral account in respect of Revolving LOC
                  Obligations; and

                        (B) with respect to all amounts prepaid pursuant to
                  Sections 2.9(b)(ii) through (vii), (1) first to the Term Loans
                  (pro rata to the remaining amortization payments set forth in
                  Section 2.4(b)); provided that, so long as there are Swingline
                  Loans, Revolving Loans or Revolving Letters of Credit
                  outstanding, any Credit-Linked Lender may decline to accept
                  any such prepayment (collectively, the "Declined Amount"), in
                  which case the Declined Amount shall first be distributed to
                  the Credit-Linked Lenders accepting prepayments made pursuant
                  to this clause (B)(1) (and applied pro rata to the remaining
                  amortization payments relating thereto) and then to the
                  outstanding Swingline Loans, Revolving Loans and Revolving LOC
                  Obligations in accordance with the remainder of this Section
                  2.8(b)(viii)(B), (2) second to outstanding Swingline Loans
                  (without a corresponding permanent reduction in the Revolving
                  Committed Amount), (3) third to the outstanding Revolving
                  Loans (without a corresponding permanent reduction in the
                  Revolving Committed Amount) and (4) fourth any remaining
                  amounts shall be paid to the Borrower. Within the parameters
                  of the applications set forth above, prepayments shall be
                  applied first to Alternate Base Rate Loans and then to LIBOR
                  Rate Loans in direct order of Interest Period maturities. All
                  prepayments under this Section 2.9(b) shall be subject to
                  Section 2.18 and be accompanied by interest on the principal
                  amount prepaid through the date of prepayment.

            (c) Hedging Obligations Unaffected. Any repayment or prepayment made
      pursuant to this Section 2.9 shall not affect the Borrower's obligation to
      continue to make payments under any Secured Hedging Agreement, which shall
      remain in full force and effect notwithstanding such repayment or
      prepayment, subject to the terms of such Secured Hedging Agreement.

      SECTION 2.10 DEFAULT RATE AND PAYMENT DATES.

            (a) If all or a portion of the principal amount of any Loan which is
      a LIBOR Rate Loan shall not be paid when due or continued as a LIBOR Rate
      Loan in accordance with the provisions of Section 2.11 (whether at the
      stated maturity, by acceleration or otherwise), such overdue principal
      amount of such Loan shall be converted to an Alternate Base Rate Loan at
      the end of the Interest Period applicable thereto.

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            (b) Upon the occurrence, and during the continuance, of an Event of
      Default, at the election of the Required Lenders, the principal of and, to
      the extent permitted by law, interest on the Loans and any other amounts
      owing hereunder or under the other Credit Documents shall bear interest,
      payable on demand (and monthly if demand is not made), at a per annum rate
      2% greater than the rate which would otherwise be applicable (or if no
      rate is applicable, whether in respect of interest, fees or other amounts,
      then the ABR Default Rate).

            (c) Interest on each Loan shall be payable in arrears on each
      Interest Payment Date; provided that interest accruing pursuant to Section
      2.10(b) shall be payable from time to time on demand.

      SECTION 2.11 CONVERSION OPTIONS.

            (a) The Borrower may, in the case of Revolving Loans and the Term
      Loans, elect from time to time to convert Alternate Base Rate Loans to
      LIBOR Rate Loans by giving the Administrative Agent at least three (3)
      Business Days' prior irrevocable written notice of such election, such
      notice to be in substantially the form of the notice of conversion
      attached hereto as Schedule 2.11 (a "Notice of Conversion"). In addition,
      the Borrower may elect from time to time to convert LIBOR Rate Loans to
      Alternate Base Rate Loans by delivering an irrevocable Notice of
      Conversion to the Administrative Agent by 1:00 P.M. one Business Date
      prior to the proposed date of conversion. If the date upon which an
      Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a
      Business Day, then such conversion shall be made on the next succeeding
      Business Day. All or any part of outstanding Alternate Base Rate Loans may
      be converted as provided herein; provided that (i) no Loan may be
      converted into a LIBOR Rate Loan when any Default or Event of Default has
      occurred and is continuing and (ii) partial conversions shall be in an
      aggregate principal amount of $2,000,000 or a whole multiple of $1,000,000
      in excess thereof. LIBOR Rate Loans may only be converted to Alternate
      Base Rate Loans on the last day of the applicable Interest Period. If the
      date upon which a LIBOR Rate Loan is to be converted to an Alternate Base
      Rate Loan is not a Business Day, then such conversion shall be made on the
      next succeeding Business Day and during the period from such last day of
      an Interest Period to such succeeding Business Day such Loan shall bear
      interest as if it were an Alternate Base Rate Loan.

            (b) Any LIBOR Rate Loans may be continued as such upon the
      expiration of an Interest Period with respect thereto by compliance by the
      Borrower with the notice provisions contained in Section 2.12(a);
      provided, that no LIBOR Rate Loan may be continued as such when any
      Default or Event of Default has occurred and is continuing, in which case
      such Loan shall be automatically converted to an Alternate Base Rate Loan
      at the end of the applicable Interest Period with respect thereto. If the
      Borrower shall fail to give timely notice of an election to continue a
      LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted
      hereunder, such LIBOR Rate Loans shall be automatically converted to
      Alternate Base Rate Loans at the end of the applicable Interest Period
      with respect thereto.

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      SECTION 2.12 COMPUTATION OF INTEREST AND FEES.

            (a) Interest payable hereunder with respect to any Alternate Base
      Rate Loan based on the Prime Rate shall be calculated on the basis of a
      year of 365 days (or 366 days, as applicable) for the actual days elapsed.
      All fees, interest and all other amounts payable hereunder shall be
      calculated on the basis of a 360 day year for the actual days elapsed. The
      Administrative Agent shall as soon as practicable notify the Borrower and
      the Lenders of each determination of a LIBOR Rate on the Business Day of
      the determination thereof. Any change in the interest rate on a Loan
      resulting from a change in the Alternate Base Rate shall become effective
      as of the opening of business on the day on which such change in the
      Alternate Base Rate shall become effective. The Administrative Agent shall
      as soon as practicable notify the Borrower and the Lenders of the
      effective date and the amount of each such change.

            (b) Each determination of an interest rate by the Administrative
      Agent pursuant to any provision of this Credit Agreement shall be
      conclusive and binding on the Borrower and the Lenders in the absence of
      manifest error. The Administrative Agent shall, at the request of the
      Borrower, deliver to the Borrower a statement showing the computations
      used by the Administrative Agent in determining any interest rate.

            (c) It is the intent of the Lenders and the Credit Parties to
      conform to and contract in strict compliance with applicable usury law
      from time to time in effect. All agreements between the Lenders and the
      Credit Parties are hereby limited by the provisions of this paragraph
      which shall override and control all such agreements, whether now existing
      or hereafter arising and whether written or oral. In no way, nor in any
      event or contingency (including but not limited to prepayment or
      acceleration of the maturity of any Obligation), shall the interest taken,
      reserved, contracted for, charged, or received under this Credit
      Agreement, under the Notes or otherwise, exceed the maximum nonusurious
      amount permissible under applicable law. If, from any possible
      construction of any of the Credit Documents or any other document,
      interest would otherwise be payable in excess of the maximum nonusurious
      amount, any such construction shall be subject to the provisions of this
      paragraph and such interest shall be automatically reduced to the maximum
      nonusurious amount permitted under applicable law, without the necessity
      of execution of any amendment or new document. If any Lender shall ever
      receive anything of value which is characterized as interest on the Loans
      under applicable law and which would, apart from this provision, be in
      excess of the maximum nonusurious amount, an amount equal to the amount
      which would have been excessive interest shall, without penalty, be
      applied to the reduction of the principal amount owing on the Loans and
      not to the payment of interest, or refunded to the Borrower or the other
      payor thereof if and to the extent such amount which would have been
      excessive exceeds such unpaid principal amount of the Loans. The right to
      demand payment of the Loans or any other Indebtedness evidenced by any of
      the Credit Documents does not include the right to receive any interest
      which has not otherwise accrued on the date of such demand, and the
      Lenders do not intend to charge or receive any unearned interest in the
      event of such demand. All interest paid or agreed to be paid to the
      Lenders with respect to the Loans shall, to the extent permitted by
      applicable law,

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<PAGE>

      be amortized, prorated, allocated, and spread throughout the full stated
      term (including any renewal or extension) of the Loans so that the amount
      of interest on account of such indebtedness does not exceed the maximum
      nonusurious amount permitted by applicable law.

      SECTION 2.13 PRO RATA TREATMENT AND PAYMENTS.

            (a) Allocation of Payments Before Exercise of Remedies. Each
      borrowing of Revolving Loans and any reduction of the Revolving
      Commitments shall be made pro rata according to the respective Revolving
      Commitment Percentages of the Revolving Lenders. Each borrowing of a Term
      Loan by conversion of a Credit-Linked LOC Advance to a Term Loan and any
      reduction of the Credit-Linked Commitments shall be made pro rata
      according to the respective Credit-Linked Commitment Percentages of the
      Credit-Linked Lenders. Unless otherwise indicated herein, each payment
      under this Credit Agreement or any Note shall be applied, first, to any
      fees then due and owing by the Borrower pursuant to Section 2.7, second,
      to interest then due and owing hereunder and under the Notes and, third,
      to principal then due and owing hereunder and under the Notes. Each
      payment on account of any fees pursuant to Section 2.7 shall be made pro
      rata in accordance with the respective amounts due and owing (except as to
      the Revolving LOC Fronting Fees, the Credit-Linked LOC Fronting Fees and
      the Issuing Lender Fees, which fees shall be for the account of the
      applicable Issuing Lender). Each voluntary prepayment on account of
      principal of the Loans shall be applied in accordance with the terms of
      Section 2.9(a). Each mandatory prepayment on account of principal of the
      Loans shall be applied in accordance with Section 2.9(b). All payments
      (including prepayments) to be made by the Borrower on account of
      principal, interest and fees shall be made without defense, set-off or
      counterclaim (except as provided in Section 2.19(b)) and shall be made to
      the Administrative Agent for the account of the Lenders, the Issuing
      Lenders or the Swingline Lender, as the case may be, at the Administrative
      Agent's office specified on Section 9.2 in Dollars and in immediately
      available funds not later than 1:00 P.M. on the date when due. The
      Administrative Agent shall distribute such payments to the Lenders
      entitled thereto promptly upon receipt in like funds as received. If any
      payment hereunder (other than payments on the LIBOR Rate Loans) becomes
      due and payable on a day other than a Business Day, such payment shall be
      extended to the next succeeding Business Day, and, with respect to
      payments of principal, interest thereon shall be payable at the then
      applicable rate during such extension. If any payment on a LIBOR Rate Loan
      becomes due and payable on a day other than a Business Day, the maturity
      thereof shall be extended to the next succeeding Business Day unless the
      result of such extension would be to extend such payment into another
      calendar month, in which event such payment shall be made on the
      immediately preceding Business Day.

            (b) Allocation of Payments After Exercise of Remedies.
      Notwithstanding any other provisions of this Agreement to the contrary,
      after the exercise of remedies (other than the invocation of default
      interest pursuant to Section 2.10(b)) by the Administrative Agent or the
      Lenders pursuant to Section 7.2 (or after the Commitments shall
      automatically terminate and the Loans (with accrued interest thereon) and
      all other

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<PAGE>

      amounts under the Credit Documents shall automatically become due and
      payable in accordance with the terms of such Section), all amounts
      collected or received by the Administrative Agent or any Lender on account
      of the Credit Party Obligations or in respect of the Collateral shall be
      paid over or delivered as follows (irrespective of whether the following
      costs, expenses, fees, interest, premiums, scheduled periodic payments or
      Credit Party Obligations are allowed, permitted or recognized as a claim
      in any proceeding resulting from the occurrence of a Bankruptcy Event):

                  FIRST, to the payment of all reasonable out-of-pocket costs
            and expenses (including without limitation reasonable attorneys'
            fees) of the Administrative Agent and the Issuing Lenders in
            connection with enforcing the rights of the Lenders under the Credit
            Documents and any protective advances made by the Administrative
            Agent with respect to the Collateral under or pursuant to the terms
            of the Security Documents;

                  SECOND, to the payment of any fees owed to the Administrative
            Agent and the Issuing Lenders;

                  THIRD, to the payment of all reasonable out-of-pocket costs
            and expenses (including without limitation, reasonable attorneys'
            fees) of each of the Lenders in connection with enforcing its rights
            under the Credit Documents or otherwise enforcing its rights with
            respect to the Credit Party Obligations owing to such Lender;

                  FOURTH, to the payment of all of the Credit Party Obligations
            consisting of accrued fees and interest, including, with respect to
            any Secured Hedging Agreement, any fees, premiums and scheduled
            periodic payments due under such Secured Hedging Agreement and any
            interest accrued thereon;

                  FIFTH, to the payment of the outstanding principal amount of
            the Credit Party Obligations, including the payment or cash
            collateralization of the outstanding LOC Obligations and, with
            respect to any Secured Hedging Agreement, any breakage, termination
            or other payments due under such Secured Hedging Agreement and any
            interest accrued thereon;

                  SIXTH, to all other Credit Party Obligations and other
            obligations which shall have become due and payable under the Credit
            Documents or otherwise and not repaid pursuant to clauses "FIRST"
            through "FIFTH" above; and

                  SEVENTH, to the payment of the surplus, if any, to whoever may
            be lawfully entitled to receive such surplus.

            In carrying out the foregoing, (i) amounts received shall be applied
      in the numerical order provided until exhausted prior to application to
      the next succeeding category; (ii) each of the Secured Parties shall
      receive an amount equal to its pro rata share (based on the proportion
      that the then outstanding Loans and LOC Obligations held

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<PAGE>

      by such Lender or the outstanding obligations payable to such Hedging
      Agreement Provider bears to the aggregate then outstanding Loans, LOC
      Obligations and obligations payable under all Secured Hedging Agreements)
      of amounts available to be applied pursuant to clauses "THIRD", "FOURTH",
      "FIFTH" AND "SIXTH" above; and (iii) to the extent that any amounts
      available for distribution pursuant to clause "FIFTH" above are
      attributable to the issued but undrawn amount of outstanding Letters of
      Credit, such amounts shall be held by the Administrative Agent in a cash
      collateral account and applied to reimburse the Issuing Lender from time
      to time for any drawings under such Letters of Credit. Notwithstanding the
      foregoing terms of this Section 2.13(b), only Collateral proceeds and
      payments under the Guaranty with respect to Secured Hedging Agreements (as
      opposed to ordinary course principal, interest and fee payments hereunder)
      shall be applied to obligations under any Secured Hedging Agreement.

      SECTION 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.

            (a) Unless the Administrative Agent shall have been notified in
      writing by a Lender prior to the date a Loan is to be made by such Lender
      (which notice shall be effective upon receipt) that such Lender does not
      intend to make the proceeds of such Loan available to the Administrative
      Agent, the Administrative Agent may assume that such Lender has made such
      proceeds available to the Administrative Agent on such date, and the
      Administrative Agent may in reliance upon such assumption (but shall not
      be required to) make available to the Borrower a corresponding amount. If
      such corresponding amount is not in fact made available to the
      Administrative Agent, the Administrative Agent shall be able to recover
      such corresponding amount from such Lender. If such Lender does not pay
      such corresponding amount forthwith upon the Administrative Agent's demand
      therefor, the Administrative Agent will promptly notify the Borrower, and
      the Borrower shall immediately pay such corresponding amount to the
      Administrative Agent. The Administrative Agent shall also be entitled to
      recover from the Lender or the Borrower, as the case may be, interest on
      such corresponding amount in respect of each day from the date such
      corresponding amount was made available by the Administrative Agent to the
      Borrower to the date such corresponding amount is recovered by the
      Administrative Agent at a per annum rate equal to (i) from the Borrower at
      the applicable rate for the applicable borrowing pursuant to the Notice of
      Borrowing and (ii) from a Lender at the Federal Effective Funds Rate.

            (b) Unless the Administrative Agent shall have been notified in
      writing by the Borrower, prior to the date on which any payment is due
      from it hereunder (which notice shall be effective upon receipt) that the
      Borrower does not intend to make such payment, the Administrative Agent
      may assume that such Borrower has made such payment when due, and the
      Administrative Agent may in reliance upon such assumption (but shall not
      be required to) make available to each Lender on such payment date an
      amount equal to the portion of such assumed payment to which such Lender
      is entitled hereunder, and if the Borrower has not in fact made such
      payment to the Administrative Agent, such Lender shall, on demand, repay
      to the Administrative Agent the amount made available to such Lender. If
      such amount is repaid to the Administrative Agent on a date after the date
      such amount was made available to such Lender, such Lender shall pay to
      the

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      Administrative Agent on demand interest on such amount in respect of each
      day from the date such amount was made available by the Administrative
      Agent to such Lender to the date such amount is recovered by the
      Administrative Agent at a per annum rate equal to the Federal Funds
      Effective Rate.

            (c) A certificate of the Administrative Agent submitted to the
      Borrower or any Lender with respect to any amount owing under this Section
      2.14 shall be conclusive in the absence of manifest error.

      SECTION 2.15 INABILITY TO DETERMINE INTEREST RATE.

      Notwithstanding any other provision of this Credit Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two (2) Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain as or be
converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as,
continued as, or converted into, LIBOR Rate Loans for the Interest Periods so
affected.

      SECTION 2.16 ILLEGALITY.

      Notwithstanding any other provision of this Credit Agreement, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Credit Agreement or to obtain in the
interbank eurodollar market through its LIBOR Lending Office the funds with
which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent and the Borrower thereof, (b) the commitment of such Lender
hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall
forthwith be suspended until the Administrative Agent shall give notice that the
condition or situation which gave rise to the suspension shall no longer exist,
and (c) such Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall
be converted on the last day of the Interest Period for such Loans or within
such earlier period as required by law as Alternate Base Rate Loans. The
Borrower hereby agrees promptly to pay any Lender, upon its demand, any
additional amounts necessary to compensate such Lender for actual and direct
costs (but not including anticipated profits) reasonably incurred by such Lender
in making any repayment in accordance with this Section

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including, but not limited to, any interest or fees payable by such Lender to
lenders of funds obtained by it in order to make or maintain its LIBOR Rate
Loans hereunder. A certificate as to any additional amounts payable pursuant to
this Section submitted by such Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be
payable pursuant to this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.

      SECTION 2.17 REQUIREMENTS OF LAW.

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

                  (i) shall subject such Lender to any tax of any kind
            whatsoever with respect to any Letter of Credit, any participation
            therein or any application relating thereto, any LIBOR Rate Loan
            made by it, or change the basis of taxation of payments to such
            Lender in respect thereof (except for tax on the overall net income
            of such Lender and changes in the rate of such tax);

                  (ii) shall impose, modify or hold applicable any reserve,
            special deposit, compulsory loan or similar requirement against
            assets held by, deposits or other liabilities in or for the account
            of, advances, loans or other extensions of credit by, or any other
            acquisition of funds by, any office of such Lender which is not
            otherwise included in the determination of the LIBOR Rate hereunder;
            or

                  (iii) shall impose on such Lender any other condition;

      and the result of any of the foregoing is to increase the cost to such
      Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit
      or the participations therein or to reduce any amount receivable hereunder
      or under any Note, then, in any such case, the Borrower shall promptly pay
      such Lender, upon its demand, any additional amounts necessary to
      compensate such Lender for such additional cost or reduced amount
      receivable which such Lender reasonably deems to be material as determined
      by such Lender with respect to its LIBOR Rate Loans or Letters of Credit.
      A certificate as to any additional amounts payable pursuant to this
      Section submitted by such Lender, through the Administrative Agent, to the
      Borrower shall be conclusive in the absence of manifest error. Each Lender
      agrees to use reasonable efforts (including reasonable efforts to change
      its Domestic Lending Office or LIBOR Lending Office, as the case may be)
      to avoid or to minimize any amounts which might otherwise be payable
      pursuant to this paragraph of this Section; provided, however, that such
      efforts shall not cause the imposition on such Lender of any additional
      costs or legal or regulatory burdens deemed by such Lender to be material.

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<PAGE>

            (b) If any Lender shall have reasonably determined that the adoption
      of or any change in any Requirement of Law regarding capital adequacy or
      in the interpretation or application thereof or compliance by such Lender
      or any corporation controlling such Lender with any request or directive
      regarding capital adequacy (whether or not having the force of law) from
      any central bank or Governmental Authority made subsequent to the date
      hereof does or shall have the effect of reducing the rate of return on
      such Lender's or such corporation's capital as a consequence of its
      obligations hereunder to a level below that which such Lender or such
      corporation could have achieved but for such adoption, change or
      compliance (taking into consideration such Lender's or such corporation's
      policies with respect to capital adequacy) by an amount reasonably deemed
      by such Lender to be material, then from time to time, within fifteen (15)
      days after demand by such Lender, the Borrower shall pay to such Lender
      such additional amount as shall be certified by such Lender as being
      required to compensate it for such reduction. Such a certificate as to any
      additional amounts payable under this Section submitted by a Lender (which
      certificate shall include a description of the basis for the computation),
      through the Administrative Agent, to the Borrower shall be conclusive
      absent manifest error.

            (c) The agreements in this Section 2.17 shall survive the
      termination of this Credit Agreement and payment of the Notes and all
      other amounts payable hereunder.

      SECTION 2.18 INDEMNITY.

      The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) the failure by the Borrower to pay the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) the failure of the Borrower to accept a borrowing after
the Borrower has given a notice in accordance with the terms hereof, (c) the
failure of the Borrower to make any prepayment after the Borrower has given a
notice in accordance with the terms hereof, and/or (d) the making by the
Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is
not the last day of the Interest Period with respect thereto, in each case
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender, through the Administrative
Agent, to the Borrower (which certificate must be delivered to the
Administrative Agent within thirty (90) days following such default, prepayment
or conversion and shall be conclusive in the absence of manifest error);
provided that if such certificate is not be delivered to the Administrative
Agent within ninety (90) days following such Lender becoming aware of such
default, prepayment or conversion, such Lender shall only be entitled to receive
payment pursuant to this Section with respect to losses or expenses incurred by
such Lender during the ninety (90) days prior to the date such Lender delivers
such certificate to the Administrative Agent. The agreements in this Section
shall survive termination of this Credit Agreement and payment in full of the
Credit Party Obligations.

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      SECTION 2.19 TAXES.

            (a) All payments made by the Borrower hereunder or under any Note
      will be, except as provided in Section 2.19(b), made free and clear of,
      and without deduction or withholding for, any present or future taxes,
      levies, imposts, duties, fees, assessments or other charges of whatever
      nature now or hereafter imposed by any Governmental Authority or by any
      political subdivision or taxing authority thereof or therein with respect
      to such payments (but excluding any tax imposed on or measured by the net
      income or profits of a Lender pursuant to the laws of the jurisdiction in
      which it is organized or the jurisdiction in which the principal office or
      applicable lending office of such Lender is located or any subdivision
      thereof or therein) and all interest, penalties or similar liabilities
      with respect thereto (all such non-excluded taxes, levies, imposts,
      duties, fees, assessments or other charges being referred to collectively
      as "Taxes"). If any Taxes on payments made by the Borrower hereunder are
      so levied or imposed, the Borrower agrees to pay the full amount of such
      Taxes, and such additional amounts as may be necessary so that every
      payment of all amounts due under this Credit Agreement or under any Note,
      after withholding or deduction for or on account of any Taxes, will not be
      less than the amount provided for herein or in such Note. The Borrower
      will furnish to the Administrative Agent as soon as practicable after the
      date the payment of any Taxes is due pursuant to applicable law certified
      copies (to the extent reasonably available and required by law) of tax
      receipts evidencing such payment by the Borrower. The Borrower agrees to
      indemnify and hold harmless each Lender, and reimburse such Lender upon
      its written request, for the amount of any Taxes so levied or imposed and
      paid by such Lender.

            (b) Each Lender that is not a United States person (as such term is
      defined in Section 7701(a)(30) of the Code) agrees to deliver to the
      Borrower and the Administrative Agent on or prior to the Closing Date, or
      in the case of a Lender that is an assignee or transferee of an interest
      under this Credit Agreement pursuant to Section 9.6(c) (unless the
      respective Lender was already a Lender hereunder immediately prior to such
      assignment or transfer), on the date of such assignment or transfer to
      such Lender, (i) if the Lender is a "bank" within the meaning of Section
      881(c)(3)(A) of the Code, two (2) accurate and complete original signed
      copies of Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY (or
      successor forms) certifying such Lender's entitlement to a complete
      exemption from United States withholding tax with respect to payments to
      be made under this Credit Agreement and under any Note, or (ii) if the
      Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
      Code, Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY as set forth
      in clause (i) above, or (x) a certificate in substantially the form of
      Schedule 2.20 (any such certificate, a "Tax Exempt Certificate") and (y)
      two (2) accurate and complete original signed copies of Internal Revenue
      Service Form W-8BEN (or successor form) certifying such Lender's
      entitlement to an exemption from United States withholding tax with
      respect to payments of interest to be made under this Credit Agreement and
      under any Note. In addition, each Lender agrees that it will deliver upon
      the Borrower's request updated versions of the foregoing, as applicable,
      whenever the previous certification has become obsolete or inaccurate in
      any material respect, together with such other forms as may be required in
      order to

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      confirm or establish the entitlement of such Lender to a continued
      exemption from or reduction in United States withholding tax with respect
      to payments under this Credit Agreement and any Note. Notwithstanding
      anything to the contrary contained in Section 2.19(a), but subject to the
      immediately succeeding sentence, (x) the Borrower shall be entitled, to
      the extent it is required to do so by law, to deduct or withhold Taxes
      imposed by the United States (or any political subdivision or taxing
      authority thereof or therein) from interest, fees or other amounts payable
      hereunder for the account of any Lender which is not a United States
      person (as such term is defined in Section 7701(a)(30) of the Code) for
      U.S. federal income tax purposes to the extent that such Lender has not
      provided to the Borrower U.S. Internal Revenue Service Forms that
      establish a complete exemption from such deduction or withholding and (y)
      the Borrower shall not be obligated pursuant to Section 2.19(a) hereof to
      gross-up payments to be made to a Lender in respect of Taxes imposed by
      the United States if (I) such Lender has not provided to the Borrower the
      Internal Revenue Service Forms required to be provided to the Borrower
      pursuant to this Section 2.19(b) or (II) in the case of a payment, other
      than interest, to a Lender described in clause (ii) above, to the extent
      that such Forms do not establish a complete exemption from withholding of
      such Taxes. Notwithstanding anything to the contrary contained in the
      preceding sentence or elsewhere in this Section 2.19, the Borrower agrees
      to pay additional amounts and to indemnify each Lender in the manner set
      forth in Section 2.19(a) (without regard to the identity of the
      jurisdiction requiring the deduction or withholding) in respect of any
      amounts deducted or withheld by it as described in the immediately
      preceding sentence as a result of any changes after the Closing Date in
      any applicable law, treaty, governmental rule, regulation, guideline or
      order, or in the interpretation thereof, relating to the deducting or
      withholding of Taxes.

            (c) Each Lender agrees to use reasonable efforts (including
      reasonable efforts to change its Domestic Lending Office or LIBOR Lending
      Office, as the case may be) to avoid or to minimize any amounts which
      might otherwise be payable pursuant to this Section; provided, however,
      that such efforts shall not cause the imposition on such Lender of any
      additional costs or legal or regulatory burdens deemed by such Lender in
      its sole discretion to be material.

            (d) If the Borrower pays any additional amount pursuant to this
      Section 2.19 with respect to a Lender, such Lender shall use reasonable
      efforts to obtain a refund of tax or credit against its tax liabilities on
      account of such payment; provided that such Lender shall have no
      obligation to use such reasonable efforts if either (i) it is in an excess
      foreign tax credit position or (ii) it believes in good faith, in its sole
      discretion, that claiming a refund or credit would cause adverse tax
      consequences to it. In the event that such Lender receives such a refund
      or credit, such Lender shall pay to the Borrower an amount that such
      Lender reasonably determines is equal to the net tax benefit obtained by
      such Lender as a result of such payment by the Borrower. In the event that
      no refund or credit is obtained with respect to the Borrower's payments to
      such Lender pursuant to this Section 2.19, then such Lender shall upon
      request provide a certification that such Lender has not received a refund
      or credit for such payments.

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            (e) The agreements in this Section 2.19 shall survive the
      termination of this Credit Agreement and the payment of the Notes and all
      other amounts payable hereunder.

      SECTION 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.

            (a) In addition to its other obligations under Section 2.2 and
      Section 2.5, the Borrower hereby agrees to protect, indemnify, pay and
      save each Issuing Lender and each Lender harmless from and against any and
      all claims, demands, liabilities, damages, losses, costs, charges and
      expenses (including reasonable attorneys' fees) that each Issuing Lender
      or such Lender may incur or be subject to as a consequence, direct or
      indirect, of (i) the issuance of any Letter of Credit or (ii) the failure
      of such Issuing Lender to honor a drawing under a 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
      (all such acts or omissions, herein called "Government Acts").

            (b) As between the Borrower and each Issuing Lender and each Lender,
      the Borrower shall assume all risks of the acts, omissions or misuse of
      any Letter of Credit by the beneficiary thereof. Neither any Issuing
      Lender nor any Lender shall be responsible: (i) for the form, validity,
      sufficiency, accuracy, genuineness or legal effect of any document
      submitted by any party in connection with the application for and issuance
      of any Letter of Credit, even if it should in fact prove to be in any or
      all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
      for the validity or sufficiency of any instrument transferring or
      assigning or purporting to transfer or assign any Letter of Credit or the
      rights or benefits thereunder or proceeds thereof, in whole or in part,
      that may prove to be invalid or ineffective for any reason; (iii) for
      failure of the beneficiary of a Letter of Credit to comply fully with
      conditions required in order to draw upon a Letter of Credit; (iv) for
      errors, omissions, interruptions or delays in transmission or delivery of
      any messages, by mail, cable, telegraph, telex or otherwise, whether or
      not they be in cipher; (v) for errors in interpretation of technical
      terms; (vi) for any loss or delay in the transmission or otherwise of any
      document required in order to make a drawing under a Letter of Credit or
      of the proceeds thereof; and (vii) for any consequences arising from
      causes beyond the control of any Issuing Lender or any Lender, including,
      without limitation, any Government Acts. None of the above shall affect,
      impair, or prevent the vesting of each Issuing Lender's rights or powers
      hereunder.

            (c) In furtherance and extension and not in limitation of the
      specific provisions hereinabove set forth, any action taken or omitted by
      any Issuing Lender or any Lender, under or in connection with any Letter
      of Credit or the related certificates, if taken or omitted in the absence
      of gross negligence or willful misconduct, shall not put such Issuing
      Lender or such Lender under any resulting liability to the Borrower. It is
      the intention of the parties that this Credit Agreement shall be construed
      and applied to protect and indemnify each Issuing Lender and each Lender
      against any and all risks involved in the issuance of the Letters of
      Credit, all of which risks are hereby assumed by the Borrower, including,
      without limitation, any and all risks of the acts or omissions, whether
      rightful or wrongful, of any Government Authority. The Issuing Lenders and
      the Lenders shall not, in any way, be liable for any failure by any
      Issuing Lender or anyone

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      else to pay any drawing under any Letter of Credit as a result of any
      Government Acts or any other cause beyond the control of the Issuing
      Lenders and the Lenders.

            (d) Nothing in this Section 2.20 is intended to limit the
      reimbursement obligation of the Borrower contained in Section 2.2 and
      Section 2.5 hereof. The obligations of the Borrower under this Section
      2.20 shall survive the termination of this Credit Agreement. No act or
      omissions of any current or prior beneficiary of a Letter of Credit shall
      in any way affect or impair the rights of the Credit-Linked Issuing Lender
      and the Lenders to enforce any right, power or benefit under this Credit
      Agreement.

            (e) Notwithstanding anything to the contrary contained in this
      Section 2.20, the Borrower shall have no obligation to indemnify any
      Issuing Lender or any Lender in respect of any liability incurred by such
      Issuing Lender or such Lender arising out of the gross negligence or
      willful misconduct of such Issuing Lender (including action not taken by
      such Issuing Lender or such Lender), as determined by a court of competent
      jurisdiction or pursuant to arbitration.

      SECTION 2.21 REPLACEMENT OF LENDERS.

      If any Lender shall become affected by any of the changes or events
described in Sections 2.16, 2.17, 2.18 or 2.19 (any such Lender being
hereinafter referred to as a "Replaced Lender") and shall petition the Borrower
for any increased cost or amounts thereunder, then in such case, the Borrower
may, upon at least thirty (30) Business Days' notice to the Administrative Agent
and such Replaced Lender and so long as no Default or Event of Default has
occurred and is continuing, designate a replacement lender (a "Replacement
Lender") acceptable to the Administrative Agent in its reasonable discretion, to
which such Replaced Lender shall, subject to its receipt (unless a later date
for the remittance thereof shall be agreed upon by the Borrower and the Replaced
Lender) of all amounts owed to such Replaced Lender under Sections 2.16, 2.17,
2.18 or 2.19, assign at par all (but not less than all) of its rights,
obligations, Loans and Commitments hereunder; provided, that all amounts owed to
such Replaced Lender by the Borrower (except liabilities which by the terms
hereof survive the payment in full of the Loans and termination of this
Agreement) shall be paid in full as of the date of such assignment. Upon any
assignment by any Lender pursuant to this Section 2.21 becoming effective, the
Replacement Lender shall thereupon be deemed to be a "Lender" for all purposes
of this Agreement and such Replaced Lender shall thereupon cease to be a
"Lender" for all purposes of this Agreement and shall have no further rights or
obligations hereunder (other than pursuant to Sections 2.16, 2.17, 2.18 or 2.19,
and 9.5 while such Replaced Lender was a Lender). If any Replaced Lender shall
refuse to assign its rights, obligations, Loans and Commitment in accordance
with the terms of this Section 2.21, the Replaced Lender shall cease to be a
"Lender" for all purposes of this Agreement upon payment to the Replaced Lender
of all amounts owing to such Replaced Lender in accordance with the terms of
this Section 2.21 without any further action of such Replaced Lender and so long
as no Default or Event of Default shall have occurred and be continuing, the
Borrower shall have the right to designate a Replacement Lender acceptable to
the Administrative Agent in its reasonable discretion.

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                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

      To induce the Lenders to enter into this Credit Agreement and to make the
Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Administrative Agent and to each Lender that:

      SECTION 3.1 FINANCIAL CONDITION.

            (a) (i) The audited Consolidated financial statements of the
      Borrower and its consolidated Subsidiaries for the fiscal years ended
      November 30, 2001, 2002 and 2003, together with the related Consolidated
      statements of income or operations, equity and cash flows for the fiscal
      years ended on such dates, (ii) the unaudited Consolidated financial
      statements of the Borrower and its Subsidiaries for the nine-month period
      ending on August 31, 2004, together with the related Consolidated
      statements of income or operations, equity and cash flows for the
      nine-month period ending on such date and (iii) a pro forma balance sheet
      of the Borrower and its Subsidiaries as of the last day of the quarter
      ended immediately prior to the Closing Date:

                  (A) were prepared in accordance with GAAP consistently applied
            throughout the period covered thereby, except as otherwise expressly
            noted therein;

                  (B) fairly present the financial condition of the Borrower and
            its Subsidiaries as of the date thereof (subject, in the case of the
            unaudited financial statements, to normal year-end adjustments) and
            results of operations for the period covered thereby;

                  (C) show all material Indebtedness and other liabilities,
            direct or contingent, of the Borrower and its Subsidiaries as of the
            date thereof, including liabilities for taxes, material commitments
            and contingent obligations, required to be shown on a balance sheet
            prepared in accordance with GAAP; and

                  (D) show all other material Indebtedness and other
            liabilities, direct or contingent, of the Borrower and its
            Subsidiaries as of the date thereof, in the notes (shown in
            accordance with GAAP) to the financial statements referred to in
            Section 3.1(a)(i) and (ii) above.

            (b) The six-year projections of the Borrower and its Subsidiaries
      delivered to the Lenders on or prior to the Closing Date have been
      prepared in good faith based upon reasonable assumptions.

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      SECTION 3.2 NO CHANGE.

      Since November 30, 2003, there has been no development or event which has
had or could reasonably be expected to have a Material Adverse Effect.

      SECTION 3.3 CORPORATE EXISTENCE.

      Each of the Credit Parties (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the requisite power and authority and the legal right to own and operate all its
material property, to lease the material property it operates as lessee and to
conduct the business in which it is currently engaged, and (c) is duly qualified
to conduct business and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except to the extent that such failure to
qualify could not reasonably be expected to have a Material Adverse Effect. The
jurisdictions in which the Credit Parties as of the Closing Date are organized
and qualified to do business are described on Schedule 3.3.

      SECTION 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

      Each of the Credit Parties has full power and authority and the legal
right to make, deliver and perform the Credit Documents to which it is party and
has taken all necessary action to authorize the execution, delivery and
performance by it of the Credit Documents to which it is party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or with the execution, delivery or performance of any
Credit Document by any of the Credit Parties (other than those which have been
obtained) or with the validity or enforceability of any Credit Document against
any of the Credit Parties (except such filings as are necessary in connection
with the perfection of the Liens created by such Credit Documents). Each Credit
Document to which it is a party has been duly executed and delivered on behalf
of the applicable Credit Party. Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of each such Credit Party,
enforceable against such Credit Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

      SECTION 3.5 COMPLIANCE WITH LAWS; NO CONFLICT; NO DEFAULT.

            (a) The execution, delivery and performance by each Credit Party of
      the Credit Documents to which such Credit Party is a party, in accordance
      with their respective terms, the borrowings hereunder and the Transactions
      do not and will not, by the passage of time, the giving of notice or
      otherwise, (i) require any Governmental Approval (other than such
      Governmental Approvals that have been obtained or made and not subject to
      suspension, revocation or termination) or violate any Requirement of Law
      relating to such Credit Party, (ii) conflict with, result in a breach of
      or constitute a default under the articles of incorporation, bylaws,
      articles of organization, operating agreement

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      or other organizational documents of such Credit Party or any material
      indenture, agreement or other instrument to which such Person is a party
      or by which any of its properties may be bound or any Governmental
      Approval relating to such Person, or (iii) result in or require the
      creation or imposition of any Lien upon or with respect to any property
      now owned or hereafter acquired by such Person other than Liens arising
      under the Credit Documents.

            (b) Each Credit Party (i) (x) has all Governmental Approvals
      required by law for it to conduct its business, each of which is in full
      force and effect, (y) each such Governmental Approval is final and not
      subject to review on appeal and (z) each such Governmental Approval is not
      the subject of any pending or, to the best of its knowledge, threatened
      attack by direct or collateral proceeding, and (ii) is in compliance with
      each Governmental Approval applicable to it and in compliance with all
      other Requirements of Law relating to it or any of its respective
      properties, in each case except to the extent the failure to obtain such
      Governmental Approval or failure to comply with such Governmental Approval
      or Requirement of Law could not reasonably be expected to have a Material
      Adverse Effect. Each Credit Party possesses or has the right to use, all
      leaseholds, licenses, easements and franchises and all authorizations and
      other rights that are material to and necessary for the conduct of its
      business. Except to the extent noncompliance with the foregoing
      leaseholds, easements and franchises could not reasonably be expected to
      have a Material Adverse Effect, all of the foregoing are in full force and
      effect, and the Credit Parties are in substantial compliance with the
      foregoing without any known conflict with the valid rights of others. No
      event has occurred which permits, or after notice or lapse of time or both
      would permit, the revocation or termination of any such Governmental
      Approval, leasehold, license, easement, franchise or other right, which
      termination or revocation could, individually or in the aggregate,
      reasonably be expected to have Material Adverse Effect.

            (c) None of the Credit Parties is in default under or with respect
      to any of its Material Contracts or under or with respect to any of its
      other Contractual Obligations, or any judgment, order or decree to which
      it is a party, in any respect which could reasonably be expected to have a
      Material Adverse Effect. No Default or Event of Default has occurred and
      is continuing.

      SECTION 3.6 NO MATERIAL LITIGATION.

      No litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Credit Parties,
threatened by or against any of them or against any of their respective
properties or revenues (a) with respect to the Credit Documents or any Loan or
any of the Transactions, or (b) which could reasonably be expected to have a
Material Adverse Effect.

      SECTION 3.7 INVESTMENT COMPANY ACT; PUHCA.

      None of the Credit Parties (a) is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as

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amended or (b) is 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.

      SECTION 3.8 MARGIN REGULATIONS.

      No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Credit
Parties (a) are not engaged, principally or as one of its important activities,
in the business of extending credit for the purpose of "purchasing" or
"carrying" "margin stock" within the respective meanings of each of such terms
under Regulation U and (b) taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Credit Parties taken as a
group does not exceed 25% of the value of their assets.

      SECTION 3.9 ERISA.

      Neither a Reportable Event nor an "accumulated funding deficiency" (within
the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code, except
to the extent that any such occurrence or failure to comply would not reasonably
be expected to have a Material Adverse Effect. No termination of a Single
Employer Plan has occurred resulting in any liability that has remained
underfunded, and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year period which could reasonably be expected to have a Material Adverse
Effect. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount which could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower, nor any Subsidiary of the
Borrower nor any Commonly Controlled Entity is currently subject to any
liability for a complete or partial withdrawal from a Multiemployer Plan that
could reasonably be expected to have a Material Adverse Effect.

      SECTION 3.10 ENVIRONMENTAL MATTERS.

            (a) Except where such violation or liability could not reasonably be
      expected to have a Material Adverse Effect, the facilities and properties
      owned, leased or operated by any of the Credit Parties (the "Properties")
      do not contain any Materials of Environmental Concern in amounts or
      concentrations which (i) constitute a violation of, or (ii) could give
      rise to liability under, any Environmental Law.

            (b) Except where such violation, contamination or non-compliance
      could not reasonably be expected to have a Material Adverse Effect, the
      Properties and all operations of the Credit Parties at the Properties are
      in compliance, and have in the last

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      five (5) years been in compliance, in all material respects with all
      applicable Environmental Laws, and there is no contamination at, under or
      about the Properties or violation of any Environmental Law with respect to
      the Properties or the business operated by the any of the Credit Parties
      (the "Business").

            (c) None of the Credit Parties has received any written or actual
      notice of violation, alleged violation, non-compliance, liability or
      potential liability regarding environmental matters or compliance with
      Environmental Laws with regard to any of the Properties or the Business,
      nor does any of the Credit Parties have knowledge of any such threatened
      notice which could reasonably be expected to have a Material Adverse
      Effect.

            (d) Except where such violation or liability could not reasonably be
      expected to have a Material Adverse Effect, Materials of Environmental
      Concern have not been transported or disposed of from the Properties in
      violation of, or in a manner or to a location which could give rise to
      liability under any Environmental Law, nor have any Materials of
      Environmental Concern been generated, treated, stored or disposed of at,
      on or under any of the Properties in violation of, or in a manner that
      could give rise to liability under, any applicable Environmental Law.

            (e) No judicial proceeding or governmental or administrative action
      is pending or, to the knowledge of any Credit Party, threatened, under any
      Environmental Law to which any of the Credit Parties is or will be named
      as a party with respect to the Properties or the Business, nor are there
      any consent decrees or other decrees, consent orders, administrative
      orders or other orders, or other administrative or judicial requirements
      outstanding under any Environmental Law with respect to the Properties or
      the Business which could reasonably be expected to have a Material Adverse
      Effect.

            (f) Except where such violation or liability could not reasonably be
      expected to have a Material Adverse Effect, there has been no release or
      threat of release of Materials of Environmental Concern at or from the
      Properties, or arising from or related to the operations of any of the
      Credit Parties in connection with the Properties or otherwise in
      connection with the Business, in violation of or in amounts or in a manner
      that could give rise to liability under Environmental Laws.

      SECTION 3.11 USE OF PROCEEDS.

      The proceeds of the Extensions of Credit will be used (i) to refinance
certain existing Indebtedness of the Borrower, (ii) to pay any fees and expenses
associated with this Credit Agreement and other financings of the Borrower on
the Closing Date, (iii) to finance Permitted Acquisitions and (iv) for working
capital and other general corporate purposes of the Borrower and its
Subsidiaries.

      SECTION 3.12 SUBSIDIARIES.

      Set forth on Schedule 3.12 (as updated quarterly by the Borrower) is a
complete and accurate list of all Subsidiaries of the Credit Parties.
Information on such Schedule includes the

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number of shares of each class of Capital Stock or other equity interests
outstanding; the number and percentage of outstanding shares of each class of
stock owned by the Credit Parties or any of their Subsidiaries; the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and similar rights. The outstanding Capital Stock and other equity
interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).

      SECTION 3.13 OWNERSHIP.

      Each of the Credit Parties is the owner of, and has good and marketable
title to, all of its respective assets, which, together with assets leased or
licensed by the Credit Parties, represents all assets individually or in the
aggregate material to the conduct of the businesses of the Credit Parties, taken
as a whole on the date hereof, and none of such assets is subject to any Lien
other than Permitted Liens. Each Credit Party enjoys peaceful and undisturbed
possession under all of its material leases and all such material leases are
valid and subsisting and in full force and effect. The Credit Parties have made
available complete and accurate copies of all material leases to the
Administrative Agent.

      SECTION 3.14 INDEBTEDNESS.

      Except as otherwise permitted under Section 6.1, the Credit Parties have
no Indebtedness.

      SECTION 3.15 TAXES.

      Each of the Credit Parties has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all material amounts of taxes shown thereon to be due (including interest and
penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. None of the Credit Parties is aware as of the Closing Date
of any proposed tax assessments against it or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.

      SECTION 3.16 INTELLECTUAL PROPERTY RIGHTS.

      Each of the Credit Parties and their Subsidiaries owns, or has the legal
right to use, all Intellectual Property necessary for each of them to conduct
its business as currently conducted. Set forth on Schedule 3.16 (as updated
quarterly by the Borrower) is a list of all Intellectual Property (other than
Intellectual Property of de minimus value) owned by each of the Credit Parties
and their Subsidiaries or that the Credit Parties or any of their Subsidiaries
has the right to use. Except as disclosed in Schedule 3.16 hereto, with respect
to the material Intellectual Property of the Credit Parties, (a) one or more of
the Credit Parties has the right to use such Intellectual Property in perpetuity
and without payment of royalties, (b) all material registrations with and
applications to Governmental Authorities in respect of such Intellectual
Property are

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valid and in full force and effect and are not subject to the taking of any
interest therein, and no taxes or maintenance fees payable with respect to such
Intellectual Property to maintain their validity or effectiveness are
delinquent, and (c) there are no restrictions on the direct or indirect transfer
of any Contractual Obligation, or any interest therein, held by any of the
Credit Parties in respect of such Intellectual Property. None of the Credit
Parties is in default (or with the giving of notice or lapse of time or both,
would be in default) in any material respect under any license to use such
Intellectual Property; no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does the Credit
Parties or any of their Subsidiaries know of any such claim; and, to the
knowledge of the Credit Parties or any of their Subsidiaries, the use of such
Intellectual Property by the Credit Parties or any of their Subsidiaries does
not infringe on the rights of any Person, except for such defaults, claims and
infringements that in the aggregate could not reasonably be expected to have a
Material Adverse Effect. The Credit Parties have recorded or deposited with and
paid to the United States Copyright Office, the Register of Copyrights, the
Copyrights Royalty Tribunal or other Governmental Authority, all notices,
statements of account, royalty fees and other documents and instruments required
under the terms and conditions of any Contractual Obligation of the Credit
Parties and/or under Title 17 of the United States Code and the rules and
regulations issued thereunder (collectively, the "Copyright Act"), and are not
liable to any Person for copyright infringement under the Copyright Act or any
other law, rule, regulation, contract or license as a result of their business
operations. Schedule 3.16 may be updated from time to time by the Borrower to
include new Intellectual Property by giving written notice thereof to the
Administrative Agent.

      SECTION 3.17 SOLVENCY.

      After giving effect to the Transactions, the fair saleable value of each
Credit Party's assets, measured on a going concern basis, exceeds all probable
liabilities, including those to be incurred pursuant to this Credit Agreement.
After giving effect to the Transactions, none of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the Transactions, debts beyond its ability to pay such debts as
they become due. In executing the Credit Documents and consummating the
Transactions, none of the Credit Parties intends to hinder, delay or defraud
either present or future creditors or other Persons to which one or more of the
Credit Parties is or will become indebted.

      SECTION 3.18 INVESTMENTS.

      All Investments of each of the Credit Parties are Permitted Investments.

      SECTION 3.19 LOCATION OF COLLATERAL.

      Set forth on Schedule 3.19(a) is a list of the Properties of the Credit
Parties and their Subsidiaries as of the Closing Date with street address,
county and state where located. Set forth on Schedule 3.19(b) is a list of all
locations where any tangible personal property of the Credit Parties and their
Subsidiaries is located as of the Closing Date, including county and state where

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located. Set forth on Schedule 3.19(c) is the chief executive office and
principal place of business of each of the Credit Parties as of the Closing
Date.

      SECTION 3.20 NO BURDENSOME RESTRICTIONS.

      None of the Credit Parties is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.

      SECTION 3.21 BROKERS' FEES.

      None of the Credit Parties and their Subsidiaries has any obligation to
any Person in respect of any finder's, broker's, investment banking or other
similar fee in connection with the Credit Agreement and the loans hereunder,
other than the closing and other fees payable pursuant to this Credit Agreement
and as set forth in the Fee Letter.

      SECTION 3.22 LABOR MATTERS.

      There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Credit Parties as of the Closing Date, other than
as set forth in Schedule 3.22 hereto, and none of the Credit Parties is
suffering or has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five (5) years, other than as set
forth in Schedule 3.22 hereto.

      SECTION 3.23 ACCURACY AND COMPLETENESS OF INFORMATION.

      All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties in writing to the Administrative
Agent or any Lender for purposes of or in connection with this Credit Agreement
or any other Credit Document (other than any projection provided by the Borrower
in good faith), or any transaction contemplated hereby or thereby, is or will be
true and accurate in all material respects and not incomplete by omitting to
state any material fact necessary to make such information not misleading. There
is no fact now known to any of the Credit Parties which has, or could reasonably
be expected to have, a Material Adverse Effect which fact has not been set forth
herein, in the financial statements of the Credit Parties furnished to the
Administrative Agent and/or the Lenders, or in any certificate, opinion or other
written statement made or furnished by or on behalf of the Credit Parties to the
Administrative Agent and/or the Lenders.

      SECTION 3.24 MATERIAL CONTRACTS.

      Schedule 3.24 sets forth a complete and accurate list of all Material
Contracts of the Credit Parties and their Subsidiaries in effect as of the
Closing Date. Other than as set forth in Schedule 3.24, each such Material
Contract is, and after giving effect to the Transactions will be, in full force
and effect in accordance with the terms thereof. The Credit Parties and their
Subsidiaries have made available to the Administrative Agent a true and complete
copy of each

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Material Contract. Schedule 3.24 may be updated from time to time by the
Borrower to include new Material Contracts by giving written notice thereof to
the Administrative Agent.

      SECTION 3.25 INSURANCE.

      The insurance coverage of the Credit Parties and their Subsidiaries as of
the Closing Date is outlined as to carrier, policy number, expiration date, type
and amount on Schedule 3.25 and such insurance coverage complies with the
requirements set forth in Section 5.5(b).

      SECTION 3.26 SECURITY DOCUMENTS.

      The Security Documents create valid security interests in, and Liens on,
the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the execution of control agreements with
respect to deposit and securities accounts and the filing or recording of
appropriate financing statements, Mortgage Instruments and notices of grants of
security interests in Intellectual Property, in each case in favor of the
Administrative Agent on behalf of the Secured Parties) perfected security
interests and Liens, prior to all other Liens other than Permitted Liens.

      SECTION 3.27 REGULATION H.

      No Mortgaged Property is a Flood Hazard Property.

      SECTION 3.28 CLASSIFICATION OF SENIOR INDEBTEDNESS.

      The Credit Party Obligations constitute "Senior Indebtedness" under and as
defined in any agreement governing any Subordinated Debt (including, without
limitation, the Existing Subordinated Notes and the New Convertible Notes) and
the subordination provisions set forth in each such agreement are legally valid
and enforceable against the parties thereto.

      SECTION 3.29 COMPLIANCE WITH TRADING WITH THE ENEMY ACT, OFAC RULES AND
REGULATIONS AND PATRIOT ACT.

            (a) Neither any Credit Party nor any of its Subsidiaries is an
      "enemy" or an "ally of the enemy" within the meaning of Section 2 of the
      Trading with the Enemy Act of the United States of America (50 U.S.C. App.
      Section 1 et seq.), as amended. Neither any Credit Party nor any or its
      Subsidiaries is in violation of (i) the Trading with the Enemy Act, as
      amended, (ii) any of the foreign assets control regulations of the United
      States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
      any enabling legislation or executive order relating thereto or (iii) the
      Patriot Act (as defined in Section 9.17). None of the Credit Parties (A)
      is a blocked person described in section 1 of the Anti-Terrorism Order or
      (B) to the best of its knowledge, engages in any dealings or transactions,
      or is otherwise associated, with any such blocked person.

            (b) None of the Borrower, any Subsidiary of the Borrower or any
      Affiliate of the Borrower or any Guarantor (i) is a Sanctioned Person,
      (ii) has more than 15% of its

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      assets in Sanctioned Countries, or (iii) derives more than 15% of its
      operating income from investments in, or transactions with Sanctioned
      Persons or Sanctioned Countries. The proceeds of any Loan will not be used
      and have not been used to fund any operations in, finance any investments
      or activities in or make any payments to, a Sanctioned Person or a
      Sanctioned Country.

                                   ARTICLE IV

                              CONDITIONS PRECEDENT

      SECTION 4.1 CONDITIONS TO CLOSING DATE.

         This Credit Agreement shall become effective upon, and the obligation
of each Lender to make the initial Revolving Loans, Term Loans and Swingline
Loans on the Closing Date and to fund its Credit-Linked Deposit is subject to,
the satisfaction of the following conditions precedent:

            (a) Execution of Credit Agreement and Credit Documents. The
      Administrative Agent shall have received (i) counterparts of this Credit
      Agreement, (ii) for the account of each Lender with a Revolving Commitment
      requesting a promissory note, a Revolving Note, (iii) for the account of
      the Swingline Lender, the Swingline Note, (iv) for the account of each
      Credit-Linked Issuing Lender, a Credit-Linked Note, (v) counterparts of
      the Security Agreement and the Pledge Agreement and (vi) counterparts of
      any other Credit Document, in each case conforming to the requirements of
      this Credit Agreement and executed by duly authorized officers of the
      Credit Parties and the other parties thereto, as applicable.

            (b) Authority Documents. The Administrative Agent shall have
      received the following:

                  (i) Articles of Incorporation; Partnership Agreement. Copies
            of the articles of incorporation, partnership agreement or other
            charter documents of each Credit Party certified to be true and
            complete as of a recent date by the appropriate governmental
            authority of the state of its organization or formation.

                  (ii) Resolutions. Copies of resolutions of the board of
            directors of each Credit Party approving and adopting the Credit
            Documents and the Transactions and authorizing execution and
            delivery thereof, certified by an officer of such Credit Party as of
            the Closing Date to be true and correct and in force and effect as
            of such date.

                  (iii) Bylaws. A copy of the bylaws or other operating
            agreement of each Credit Party certified by an officer of such
            Credit Party as of the Closing Date to be true and correct and in
            force and effect as of such date.

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                  (iv) Good Standing. Copies of (i) certificates of good
            standing, existence or its equivalent with respect to the each
            Credit Party certified as of a recent date by the appropriate
            governmental authorities of the state of incorporation and each
            other state in which the failure of such Credit Party to be
            qualified to do business could reasonably be expected to have a
            Material Adverse Effect and (ii) to the extent readily available, a
            certificate indicating payment of all corporate and other franchise
            taxes certified as of a recent date by the appropriate governmental
            taxing authorities.

                  (v) Incumbency. An incumbency certificate of each Credit Party
            certified by a secretary or assistant secretary to be true and
            correct as of the Closing Date.

            Each officer's certificate delivered pursuant to this Section 4.1(b)
      shall be substantially in the form of Schedule 4.1(b) hereto.

            (c) Legal Opinions of Counsel. The Administrative Agent shall have
      received an opinion or opinions of counsel for the Credit Parties, dated
      as of the Closing Date and addressed to the Administrative Agent and the
      Lenders, in form and substance acceptable to the Administrative Agent.

            (d) Personal Property Collateral. The Administrative Agent shall
      have received, in form and substance satisfactory to the Administrative
      Agent:

                  (i) searches of UCC filings in the jurisdiction of the chief
            executive office and jurisdiction of formation of each Credit Party
            and each jurisdiction where any Collateral is located or where a
            filing would need to be made in order to perfect the Administrative
            Agent's security interest in the Collateral, copies of the financing
            statements on file in such jurisdictions and evidence that no Liens
            exist other than Permitted Liens and Liens that are to be terminated
            on the Closing Date;

                  (ii) UCC financing statements for each appropriate
            jurisdiction as is necessary, in the Administrative Agent's sole
            discretion, to perfect the Administrative Agent's security interest
            in the Collateral;

                  (iii) searches of ownership of Intellectual Property in the
            appropriate governmental offices;

                  (iv) such patent/trademark/copyright filings as requested by
            the Administrative Agent in order to perfect the Administrative
            Agent's security interest in the Intellectual Property;

                  (v) all stock certificates, if any, evidencing the Capital
            Stock pledged to the Administrative Agent pursuant to the Pledge
            Agreement, together with duly executed in blank undated stock powers
            attached thereto;

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                  (vi) all instruments and chattel paper in the possession of
            any of the Credit Parties, together with allonges or assignments as
            may be necessary or appropriate to perfect the Administrative
            Agent's security interest in the Collateral;

                  (vii) duly executed consents as are necessary, in the
            Administrative Agent's sole discretion, to perfect the Lenders'
            security interest in the Collateral; and

                  (viii) subject to Section 5.14(c), such duly executed account
            control agreements as requested by the Administrative Agent with
            respect to Collateral for which a control agreement is required for
            perfection of the Administrative Agent's security interest under the
            Uniform Commercial Code.

            (e) Real Property Collateral. The Administrative Agent shall have
      received, in form and substance satisfactory to the Administrative Agent:

                  (i) fully executed and notarized Mortgage Instruments
            encumbering the Mortgaged Properties (and assigning the leases and
            rents with respect to such Mortgaged Properties) listed in Schedule
            3.19(a);

                  (ii) a title report obtained by the Credit Parties in respect
            of each of the Mortgaged Properties listed in Schedule 3.19(a);

                  (iii) a Mortgage Policy with respect to each of the Mortgaged
            Properties listed in Schedule 3.19(a);

                  (iv) a satisfactory appraisal of certain real property
            designated by the Administrative Agent from an appraiser selected by
            the Administrative Agent;

                  (v) evidence as to (A) whether any Mortgaged Property listed
            in Schedule 3.19(a) is in an area designated by the Federal
            Emergency Management Agency as having special flood or mud slide
            hazards (a "Flood Hazard Property") and (B) if any such Mortgaged
            Property is a Flood Hazard Property, (1) whether the community in
            which such Mortgaged Property is located is participating in the
            National Flood Insurance Program, (2) the applicable Credit Party's
            written acknowledgment of receipt of written notification from the
            Administrative Agent (x) as to the fact that such Mortgaged Property
            is a Flood Hazard Property and (y) as to whether the community in
            which each such Flood Hazard Property is located is participating in
            the National Flood Insurance Program and (z) copies of insurance
            policies or certificates of insurance of the Credit Parties
            evidencing flood insurance reasonably satisfactory to the
            Administrative Agent and naming the Administrative Agent as sole
            loss payee on behalf of the Lenders;

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                  (vi) to the extent available, surveys of the Mortgaged
            Properties listed in Schedule 3.19(a); and

                  (vii) an opinion of counsel to the Credit Parties for each
            jurisdiction in which the Mortgaged Properties are located.

            (f) Liability and Casualty Insurance. The Administrative Agent shall
      have received copies of insurance policies or certificates of insurance
      evidencing liability and casualty insurance (including, but not limited
      to, business interruption insurance) meeting the requirements set forth
      herein or in the Security Documents. The Administrative Agent shall be
      named as loss payee on all casualty insurance policies and as additional
      insured on all liability insurance policies, in each case for the benefit
      of the Lenders.

            (g) Litigation. There shall not exist any pending litigation or
      investigation affecting or relating to (i) any Credit Party or any of its
      Subsidiaries that in the reasonable judgment of the Administrative Agent
      and Lenders could have a Material Adverse Effect on any Credit Party or
      any of its Subsidiaries, this Agreement or the other Credit Documents,
      that has not been settled, dismissed, vacated, discharged or terminated
      prior to the Closing Date or (ii) this Agreement or the other Credit
      Documents that have not been settled, dismissed, vacated, discharged or
      terminated prior to the Closing Date.

            (h) Solvency Certificate. The Administrative Agent shall have
      received an officer's certificate prepared by the chief financial officer
      of the Borrower as to the financial condition, solvency and related
      matters of each of the Credit Parties and the Credit Parties and their
      Subsidiaries taken as a whole, after giving effect to the initial
      borrowings under the Credit Documents, in substantially the form of
      Schedule 4.1(h) hereto.

            (i) Account Designation Letter. The Administrative Agent shall have
      received the executed Account Designation Letter in the form of Schedule
      1.1(a) hereto.

            (j) Organizational Structure. The corporate and capital and
      ownership structure of the Credit Parties and their Subsidiaries (after
      giving effect to the Transactions) shall be as described in Schedule 3.12.
      The Administrative Agent shall be satisfied with the management structure,
      legal structure, voting control, liquidity, total leverage and total
      capitalization of the Credit Parties and their Subsidiaries after giving
      effect to the Transactions.

            (k) Consents. The Administrative Agent shall have received evidence
      that all boards of directors, governmental, shareholder and material third
      party consents and approvals necessary in connection with the Transactions
      have been obtained and all applicable waiting periods have expired without
      any action being taken by any authority that could restrain, prevent or
      impose any material adverse conditions on such transactions or that could
      seek or threaten any of the foregoing.

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            (l) Compliance with Laws. The Transactions shall be in compliance
      with all applicable laws and regulations (including all applicable
      securities and banking laws, rules and regulations).

            (m) Bankruptcy. There shall be no bankruptcy or insolvency
      proceedings with respect to Credit Parties or any of their Subsidiaries.

            (n) Existing Indebtedness of the Credit Parties. All of the existing
      Indebtedness for borrowed money of the Borrower and its Subsidiaries
      (other than Indebtedness permitted to exist pursuant to Section 6.1) shall
      be repaid in full and all security interests related thereto shall be
      terminated on the Closing Date.

            (o) Financial Statements. The Administrative Agent and the Lenders
      shall have received copies of the financial statements referred to in
      Section 3.1 hereof, each in form and substance satisfactory to it.

            (p) No Material Adverse Change. Since November 30, 2003, there shall
      not have occurred any event or development that has had or could
      reasonably be expected to have a Material Adverse Effect on the business,
      properties, operations or financial condition of the Borrower or any of
      its Subsidiaries and there shall not have occurred any material disruption
      or material adverse change in the financial, banking or capital markets
      (including the loan syndication market) that has impaired or would impair
      the Arranger's ability to syndicate the facilities.

            (q) Financial Condition Certificate. The Administrative Agent shall
      have received a certificate or certificates executed by a Responsible
      Officer of the Borrower as of the Closing Date stating that (i) no action,
      suit, investigation, injunction, order, claim or proceeding is pending,
      ongoing or, to the knowledge of any Credit Party, threatened in any court
      or before any other Governmental Authority that purports to affect any
      Credit Party or any transaction contemplated by the Credit Documents,
      which action, suit, investigation, injunction, order, claim or proceeding
      could reasonably be expected to have a Material Adverse Effect and (ii)
      immediately after giving effect to this Credit Agreement, the other Credit
      Documents, and all the Transactions contemplated to occur on such date,
      (A) no Default or Event of Default exists, (B) all representations and
      warranties contained herein and in the other Credit Documents (i) that
      contain a materiality qualification shall be true and correct and (ii)
      that do not contain a materiality qualification shall be true and correct
      in all material respects, and (C) the Credit Parties are in pro forma
      compliance with each of the initial financial covenants set forth in
      Section 5.9 (as evidenced through detailed calculations of such financial
      covenants on a schedule to such certificate) as of August 31, 2004.

            (r) New Convertible Notes. The Borrower shall have received Net Cash
      Proceeds from the issuance of the New Convertible Notes in an amount of
      not less than $48,500,000, on terms and conditions and pursuant to
      documentation satisfactory in all respects to the Administrative Agent and
      such Net Cash Proceeds shall have been used to redeem a like amount (less
      any premium and fees) of the 2007 Convertible Notes.

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            (s) Equity Issuance. The Borrower shall (i) have received Net Cash
      Proceeds from a public equity issuance in an amount of not less than
      $95,000,000, on terms and conditions and pursuant to documentation
      satisfactory in all respects to the Administrative Agent and (ii) deposit
      with the Administrative Agent or a Lender not less than $58,000,000 of
      such Net Cash Proceeds to claw-back and/or tender for an aggregate amount
      of $58,000,000 (including fees and expenses incurred in connection
      therewith) of the 2013 Senior Subordinated Notes (the "Claw-Back") within
      the applicable notice periods and on terms acceptable to the
      Administrative Agent.

            (t) Total Funded Debt. The Administrative Agent shall have received
      evidence that, immediately after giving effect to the Transactions, Total
      Funded Debt (net of the amount deposited with the Administrative Agent for
      purposes of consummating the Claw-Back) is less than or equal to
      $500,000,000.

            (u) Consolidated EBITDAP. The Administrative Agent shall have
      received evidence reasonably satisfactory thereto provided by the Credit
      Parties that Consolidated EBITDAP is not less than $70,000,000 for the
      twelve (12) month period ending as of August 31, 2004.

            (v) Patriot Act Certificate. The Administrative Agent shall have
      received a certificate satisfactory thereto, for benefit of itself and the
      Lenders, provided by the Borrower that sets forth information required by
      the Patriot Act (as defined in Section 9.17) including, without
      limitation, the identity of the Borrower, the name and address of the
      Borrower and other information that will allow the Administrative Agent or
      any Lender, as applicable, to identify the Borrower in accordance with the
      Patriot Act.

            (w) Fees. The Administrative Agent and the Lenders shall have
      received all fees, if any, owing pursuant to the Fee Letter and Section
      2.7.

            (x) Additional Matters. All other documents and legal matters in
      connection with the Transactions shall be reasonably satisfactory in form
      and substance to the Administrative Agent and its counsel.

      SECTION 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.

      The obligation of each Lender to make any Extension of Credit (other than
the obligation of each Lender to fund its portion of a Mandatory LOC Borrower or
a Mandatory Swingline Borrower, which shall be governed by the terms of Section
2.2 and Section 2.3, respectively) hereunder is subject to the satisfaction of
the following conditions precedent on the date of making such Extension of
Credit:

            (a) Representations and Warranties. The representations and
      warranties made by the Credit Parties herein, in the Security Documents or
      which are contained in any certificate furnished at any time under or in
      connection herewith (i) that contain a materiality qualification shall be
      true and correct on and as of the date of such Extension

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<PAGE>

      of Credit as if made on and as of such date (except for those which
      expressly relate to an earlier date) and (ii) that do not contain a
      materiality qualification shall be true and correct in all material
      respects on and as of the date of such Extension of Credit as if made on
      and as of such date (except for those which expressly relate to an earlier
      date).

            (b) No Default or Event of Default. No Default or Event of Default
      shall have occurred and be continuing on such date or after giving effect
      to the Extension of Credit to be made on such date unless such Default or
      Event of Default shall have been waived in accordance with this Credit
      Agreement.

            (c) Compliance with Commitments. Immediately after giving effect to
      the making of any such Extension of Credit (and the application of the
      proceeds thereof), (i) the sum of the aggregate principal amount of
      outstanding Revolving Loans plus outstanding Swingline Loans plus
      outstanding Revolving LOC Obligations shall not exceed the Revolving
      Committed Amount then in effect, (ii) the Revolving LOC Obligations shall
      not exceed the Revolving LOC Committed Amount, (iii) the Swingline Loans
      shall not exceed the Swingline Committed Amount and (iv) the sum of the
      aggregate principal amount of the outstanding Term Loans plus outstanding
      Credit-Linked LOC Obligations shall not exceed the Credit-Linked Committed
      Amount.

            (d) Additional Conditions to Revolving Loans. If such Loan is made
      pursuant to Section 2.1, all conditions set forth in such Section shall
      have been satisfied.

            (e) Additional Conditions to Revolving Letters of Credit. If such
      Extension of Credit is made pursuant to Section 2.2, all conditions set
      forth in such Section shall have been satisfied.

            (f) Additional Conditions to Swingline Loans. If such Loan is made
      pursuant to Section 2.3, all conditions set forth in such Section shall
      have been satisfied.

            (g) Additional Conditions to Credit-Linked Letters of Credit. If
      such Extension of Credit is made pursuant to Section 2.5, all conditions
      set forth in such Section shall have been satisfied.

      Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (g) of this
Section have been satisfied.

                                   ARTICLE V

                             AFFIRMATIVE COVENANTS

      The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated and the

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Credit Party Obligations under the Credit Documents have been paid in full, the
Credit Parties shall, and shall cause each of their Subsidiaries to:

      SECTION 5.1 FINANCIAL STATEMENTS.

      Furnish to the Administrative Agent and each of the Lenders:

            (a) Annual Financial Statements. As soon as available after the end
      of each fiscal year of the Borrower (commencing with the fiscal year
      ending November 30, 2004), but in any event on or before the earlier of
      (i) the date the Borrower is required to file its annual financial
      statements on Form 10-K with the SEC and (ii) the date that is ninety (90)
      days after the end of such fiscal year, a copy of (A) the Borrower's
      annual financial statements on Form 10-K as filed with the SEC or (B) the
      Consolidated balance sheet of the Borrower and its consolidated
      Subsidiaries as at the end of such fiscal year and the related
      Consolidated statements of income and retained earnings and of cash flows
      of the Borrower and its consolidated Subsidiaries for such year, audited
      by a firm of independent certified public accountants reasonably
      acceptable to the Administrative Agent, setting forth in each case in
      comparative form the figures for the preceding fiscal year, reported on
      without a "going concern" or like qualification or exception, or
      qualification indicating that the scope of the audit was inadequate to
      permit such independent certified public accountants to certify such
      financial statements without such qualification;

            (b) Quarterly Financial Statements. As soon as available after the
      end of each of the first three fiscal quarters of the Borrower, but in any
      event on or before the earlier of (i) the date the Borrower is required to
      file its quarterly financial statements on Form 10-Q with the SEC and (ii)
      the date that is forty-five (45) days after the end of such fiscal
      quarter, a copy of (A) the Borrower's quarterly financial statements on
      Form 10-Q as filed with the SEC or (B) a company-prepared Consolidated
      balance sheet of the Borrower and its consolidated Subsidiaries as at the
      end of such period and related company-prepared Consolidated statements of
      income and retained earnings and of cash flows for the Borrower and its
      consolidated Subsidiaries for such quarterly period and for the portion of
      the fiscal year ending with such period, in each case setting forth in
      comparative form the figures for the corresponding period or periods of
      the preceding fiscal year (subject to normal recurring year-end audit
      adjustments); and

            (c) Annual Financial Plans. As soon as practicable and in any event
      within sixty (60) days after the end of each fiscal year, a Consolidated
      budget and cash flow projections prepared on a quarterly basis of the
      Borrower and its Subsidiaries for the following fiscal year, in form and
      detail reasonably acceptable to the Administrative Agent, such budget to
      be prepared by the Borrower in a manner consistent with GAAP and to
      include an operating and capital budget and a summary of the material
      assumptions made in the preparation of such budget. Such budget shall be
      accompanied by a certificate of the treasurer or chief financial officer
      of the Borrower to the effect that the budgets and other financial data
      are based on reasonable estimates and assumptions, all of which such
      officer believes are fair in light of the conditions which existed at the

                                       87
<PAGE>

      time the budget was made, have been prepared on the basis of the
      assumptions stated therein, and reflect, as of the time so furnished, the
      reasonable estimate of the Borrower and its Subsidiaries of the budgeted
      results of the operations and other information budgeted therein;

all such financial statements referred to in subsections (a) and (b) above shall
(i) fairly present in all material respects the financial condition and results
from operations of the entities and for the periods specified and to be prepared
in reasonable detail and in accordance with GAAP (subject, in the case of
interim statements, to normal recurring year-end audit adjustments) applied
consistently throughout the periods reflected therein and further accompanied by
a description of, and an estimation of the effect on the financial statements on
account of, any change in the application of accounting principles as provided
in Section 1.3, if applicable and (ii) be deemed delivered for purposes of the
Section 5.1 when such financial statements are delivered to the SEC.

      SECTION 5.2 CERTIFICATES; OTHER INFORMATION.

      Furnish to the Administrative Agent and each of the Lenders, to the extent
not publicly available through filings under the Securities Exchange Act of
1934:

            (a) concurrently with the delivery of the financial statements
      referred to in Section 5.1(a) above, a certificate of the independent
      certified public accountants reporting on such financial statements
      stating that in making the examination necessary therefor no knowledge was
      obtained of any Default or Event of Default, except as specified in such
      certificate;

            (b) concurrently with the delivery of the financial statements
      referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a
      Responsible Officer substantially in the form of Schedule 5.2(b) (i)
      stating that (A) such financial statements present fairly the financial
      position of the Borrower and its consolidated Subsidiaries for the periods
      indicated in conformity with GAAP applied on a consistent basis, (B) to
      the knowledge of such Responsible Officer, each of the Credit Parties
      during such period observed or performed in all material respects all of
      its covenants and other agreements, and satisfied in all material respects
      every condition, contained in this Credit Agreement to be observed,
      performed or satisfied by it, and (C) such Responsible Officer has
      obtained no knowledge of any Default or Event of Default except as
      specified in such certificate and (ii) providing calculations in
      reasonable detail required to indicate compliance with Section 5.9 as of
      the last day of such period; provided that, for purposes of the first
      certificate of a Responsible Officer provided after the Closing Date, such
      certificate shall provide calculations in reasonable detail indicating
      compliance on a pro forma basis (giving effect to the Transactions) with
      the initial financial covenant levels in Section 5.9 utilizing the audited
      financial statements for the Borrower's fiscal year 2004;

            (c) within thirty (30) days after the same are sent, copies of all
      financial statements and reports (other than those otherwise provided
      pursuant to Section 5.1 and

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<PAGE>

      those which are of a promotional nature) and other financial information
      which the Borrower sends to its shareholders;

            (d) within ninety (90) days after the end of each fiscal year of the
      Borrower, a certificate containing information regarding (i) the
      calculation of Excess Cash Flow and (ii) the amount of all Asset
      Dispositions, Debt Issuances, and Equity Issuances that were made during
      the prior fiscal year and amounts received in connection with any Recovery
      Event during the prior fiscal year;

            (e) promptly upon receipt thereof, a copy or summary of any other
      report, or "management letter" submitted or presented by independent
      accountants to the Borrower or any of its Subsidiaries in connection with
      any annual, interim or special audit of the books of such Person;

            (f) promptly upon their becoming available, copies of any material
      non-routine correspondence or official notices received by the Credit
      Parties or any of their Subsidiaries from any federal, state or local
      governmental authority which regulates the operations of the Credit
      Parties and their Subsidiaries; and

            (g) promptly, such additional financial and other information as the
      Administrative Agent, on behalf of any Lender, may from time to time
      reasonably request.

      Documents required to be delivered pursuant to Section 5.1(a) or Section
      5.1(b) may be delivered electronically and if so delivered, shall be
      deemed to have been delivered on the date received by the Administrative
      Agent by electronic mail with all relevant attachments. The Administrative
      Agent may post such documents on the Borrower's behalf on
      IntraLinks/IntraAgency or another relevant website, if any, to which each
      Lender and the Administrative Agent have access (whether a commercial,
      third-party website or whether sponsored by the Administrative Agent);
      provided that the Borrower shall deliver paper copies of such documents to
      the Administrative Agent upon its request. Notwithstanding anything
      contained herein, (A) the Borrower shall be entitled to deliver the
      compliance certificate required by Section 5.2(b) by electronic mail and
      if so delivered shall be deemed to have been delivered on the date
      received by the Administrative Agent by electronic mail with all relevant
      attachments, and (B) whether or not delivery of any compliance certificate
      required by Section 5.2(b) is effected pursuant to the preceding clause
      (A), the Borrower shall be required to provide paper copies of the
      compliance certificates required by Section 5.2(b) to the Administrative
      Agent.

      SECTION 5.3 PAYMENT OF TAXES; OTHER OBLIGATIONS; PERFORMANCE OF CERTAIN
OTHER AGREEMENTS.

      Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material taxes
(Federal, state, local and any other taxes) and

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<PAGE>

other obligations and liabilities of whatever nature and any additional costs
that are imposed as a result of any failure to so pay, discharge or otherwise
satisfy such taxes, obligations and liabilities, except when the amount or
validity of any such taxes, obligations and liabilities is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Credit Parties. Except as otherwise provided below, each Credit Party shall
faithfully keep and perform, or cause to be kept and performed, all of the
covenants, conditions, and agreements contained in each material lease
(including any equipment lease), rental agreement, management contract,
franchise agreement, construction contract, technical services agreement or
other material contract, license or permit, now or hereafter existing, on the
part of such Credit Party to be kept and performed with respect to such Person's
real property subject to any Mortgage Instrument (including performance of all
covenants to be performed under any and all leases of such real property or any
part thereof) and shall at all times use commercially reasonable efforts to
enforce, with respect to each other party to said agreements, all obligations,
covenants and agreements by such other party to be performed thereunder;
provided that a Credit Party shall not have any obligation under this Section
5.3 unless such Credit Party's performance or breach of its obligations with
respect to any such covenants, conditions or agreements could reasonably be
expected to have a Material Adverse Effect. Subject to the terms of Section 6.8,
nothing in this Section 5.3 should be interpreted or construed to impose any
limit on the ability of any Credit Party to modify, amend or terminate any such
agreements without prior notice to or consent of the Agent or the Lenders, so
long as any such modification, amendment or termination could not reasonably be
expected to have a Material Adverse Effect. In the event of any conflict between
the provisions of this Section 5.3 and the provisions of any Mortgage
Instrument, the provisions of this Section 5.3 shall control.

      SECTION 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.

      Continue to engage in business of the same general type as now conducted
by it on the Closing Date and preserve, renew and keep in full force and effect
its existence and good standing take all reasonable action to maintain all
rights, privileges and franchises necessary in the normal conduct of its
business; comply with all Contractual Obligations and Requirements of Law
applicable to it except to the extent that failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.

      SECTION 5.5 MAINTENANCE OF PROPERTY; INSURANCE.

            (a) Keep all material property useful and necessary in its business
      in good working order and condition (ordinary wear and tear and
      obsolescence excepted).

            (b) Maintain with financially sound and reputable insurance
      companies insurance on all its property (including without limitation its
      tangible Collateral) in at least such amounts and against at least such
      risks as are usually insured against in the same geographical area by
      companies engaged in the same or a similar business (including, without
      limitation, business interruption insurance); and furnish to the
      Administrative Agent, upon written request, full information as to the
      insurance carried. The Administrative Agent shall be named as loss payee
      or mortgagee, as its interest may

                                       90
<PAGE>

      appear, and the Administrative Agent shall be named as an additional
      insured with respect to any such insurance providing coverage in respect
      of any Collateral, and each provider of any such insurance shall agree, by
      endorsement upon the policy or policies issued by it or by independent
      instruments furnished to the Administrative Agent, that it will give the
      Administrative Agent thirty (30) days prior written notice before any such
      policy or policies shall be altered or canceled, and that no act or
      default of any Credit Party or any other Person shall affect the rights of
      the Administrative Agent or the Lenders under such policy or policies.

            (c) In case of any material loss, damage to or destruction of the
      Collateral of any Credit Party or any part thereof, such Credit Party
      shall promptly give written notice thereof to the Administrative Agent
      generally describing the nature and extent of such damage or destruction.
      In case of any loss, damage to or destruction of the Collateral of any
      Credit Party or any part thereof, such Credit Party, whether or not the
      insurance proceeds, if any, received on account of such damage or
      destruction shall be sufficient for that purpose, at such Credit Party's
      cost and expense, will promptly repair or replace the Collateral of such
      Credit Party so lost, damaged or destroyed unless such Credit Party shall
      have reasonably determined that such repair or replacement of the affected
      Collateral is not economically feasible or is not deemed in the best
      business interest of such Credit Party.

      SECTION 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.

      Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the
Administrative Agent or any Lender, the Administrative Agent or any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time, upon reasonable notice and as
often as may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Credit Parties with officers
and employees of the Credit Parties and with their independent certified public
accountants (a representative of the Borrower may be present at any such meeting
with the independent certified public accountants).

      SECTION 5.7 NOTICES.

            (a) Promptly after any Credit Party obtains actual knowledge
      thereof, provide written notice to the Administrative Agent (which shall
      transmit such notice to each Lender as soon as practicable) of the
      occurrence of any Default or Event of Default.

            (b) Promptly (but in no event later than two (2) Business Days after
      any Credit Party obtains actual knowledge thereof) provide written notice
      of the following to the Administrative Agent (which shall transmit such
      notice to each Lender as soon as practicable):

                  (i) the occurrence of any default or event of default under
            any Contractual Obligation of any of the Credit Parties which could
            reasonably be

                                       91
<PAGE>

            expected to have a Material Adverse Effect or involve a monetary
            claim that could reasonably be expected to result in liability to
            the Credit Parties in excess of $5,000,000;

                  (ii) any litigation, or any investigation or proceeding (A)
            affecting any of the Credit Parties which, if adversely determined,
            could reasonably be expected to have a Material Adverse Effect or
            (B) affecting or with respect to this Credit Agreement or any other
            Credit Document;

                  (iii) (A) the occurrence or expected occurrence of any
            Reportable Event with respect to any Plan, a failure to make any
            material required contribution to a Plan, the creation of any Lien
            in favor of the PBGC (other than a Permitted Lien) or a Plan or any
            withdrawal from, or the termination, Reorganization or Insolvency
            of, any Multiemployer Plan or (B) the institution of proceedings or
            the taking of any other action by the PBGC or any Credit Party or
            any Commonly Controlled Entity or any Multiemployer Plan with
            respect to the withdrawal from, or the terminating, Reorganization
            or Insolvency of, any Plan;

                  (iv) any notice of any material violation received by any
            Credit Party from any Governmental Authority including, without
            limitation, any notice of material violation of Environmental Laws;

                  (v) any labor controversy that has resulted in, or threatens
            to result in, a strike or other work action against any Credit Party
            which could reasonably be expected to have a Material Adverse
            Effect;

                  (vi) any attachment, judgment, lien, levy or order exceeding
            $2,500,000 shall be assessed against any Credit Party other than
            Permitted Liens; and

                  (vii) any other development or event which could reasonably be
            expected to have a Material Adverse Effect.

      Each notice pursuant to this Section shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto. In the case of any notice of a Default or Event of Default, the
Borrower shall specify that such notice is a Default or Event of Default notice
on the face thereof.

      SECTION 5.8 ENVIRONMENTAL LAWS.

            (a) Comply in all material respects with all applicable
      Environmental Laws and obtain and comply in all material respects with and
      maintain any and all licenses, approvals, notifications, registrations or
      permits required by applicable Environmental Laws except, in each case, to
      the extent that failure to do so could not reasonably be expected to have
      a Material Adverse Effect.

                                       92
<PAGE>

            (b) Conduct and complete all investigations, studies, sampling and
      testing, and all remedial, removal and other actions required under
      Environmental Laws and comply in all material respects with all lawful
      orders and directives of all Governmental Authorities regarding
      Environmental Laws except to the extent that the same are being contested
      in good faith by appropriate proceedings and the pendency of such
      proceedings could not reasonably be expected to have a Material Adverse
      Effect.

            (c) Defend, indemnify and hold harmless the Administrative Agent and
      the Lenders, and their respective employees, agents, officers and
      directors, from and against any and all claims, demands, penalties, fines,
      liabilities, settlements, damages, costs and expenses of whatever kind or
      nature known or unknown, contingent or otherwise, arising out of, or in
      any way relating to the violation of, noncompliance with or liability
      under, any Environmental Law applicable to the operations of the Credit
      Parties or the Properties, or any orders, requirements or demands of
      Governmental Authorities related thereto, including, without limitation,
      reasonable attorney's and consultant's fees, investigation and laboratory
      fees, response costs, court costs and litigation expenses, except to the
      extent that any of the foregoing arise out of the gross negligence,
      unlawful acts or willful misconduct of the party seeking indemnification
      therefor. The agreements in this paragraph shall survive repayment of the
      Notes and all other amounts payable hereunder.

      SECTION 5.9 FINANCIAL COVENANTS.

      Commencing on the day immediately following the Closing Date, each of the
Credit Parties shall, and shall cause each of its Subsidiaries to, comply with
the following financial covenants (which shall be calculated on a quarterly
basis in connection with the delivery of the quarterly compliance certificate
required by Section 5.2(b)):

            (a) Leverage Ratio. At all times, the Leverage Ratio during the
      following periods shall be less than or equal to:

<TABLE>
<CAPTION>
                  Period                          Maximum Ratio
------------------------------------------        -------------
<S>                                               <C>
Closing Date through May 31, 2005                  8.25 to 1.0
June 1, 2005 through November 30, 2005             7.50 to 1.0
December 1, 2005 through November 30, 2006         6.75 to 1.0
December 1, 2006 through November 30, 2007         6.00 to 1.0
December 1, 2007 and thereafter                    5.50 to 1.0
</TABLE>

            (b) Senior Leverage Ratio. At all times, the Senior Leverage Ratio
      during the following periods shall be less than or equal to:

<TABLE>
<CAPTION>
                  Period                          Maximum Ratio
------------------------------------------        -------------
<S>                                               <C>
Closing Date through May 31, 2005                  3.0 to 1.0
June 1, 2005 and thereafter                        2.5 to 1.0
</TABLE>

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<PAGE>

            (c) Fixed Charge Coverage Ratio. At all times, the Fixed Charge
      Coverage Ratio shall be greater than or equal:

<TABLE>
<CAPTION>
                  Period                          Maximum Ratio
------------------------------------------        -------------
<S>                                               <C>
Closing Date through May 31, 2005                  1.05 to 1.0
June 1, 2005 through November 30, 2005             1.10 to 1.0
December 1, 2005 through November 30, 2006         1.15 to 1.0
December 1, 2006 and thereafter                    1.20 to 1.0
</TABLE>

            (d) Interest Coverage Ratio. At all times, the Interest Coverage
      Ratio shall be greater than or equal:

<TABLE>
<CAPTION>
                  Period                          Maximum Ratio
------------------------------------------        -------------
<S>                                               <C>
Closing Date through November 30, 2006             2.00 to 1.0
December 1, 2006 and thereafter                    2.25 to 1.0
</TABLE>

      Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in this Section 5.9,
(i) after consummation of any Permitted Acquisition, (A) income statement items
and other balance sheet items (whether positive or negative) attributable to the
Target acquired in such transaction shall be included in such calculations to
the extent relating to such applicable period, subject to adjustments mutually
acceptable to the Borrower and the Administrative Agent, and (B) Indebtedness of
a Target which is retired in connection with a Permitted Acquisition shall be
excluded from such calculations and deemed to have been retired as of the first
day of such applicable period and (ii) after any asset sale permitted by Section
6.4(a)(viii)-(xi), (I) income statement items, cash flow statement items and
other balance sheet items (whether positive or negative) attributable to the
property or assets disposed of shall be excluded in such calculations to the
extent relating to such applicable period, subject to adjustments mutually
acceptable to the Borrower and the Administrative Agent and (II) Indebtedness
that is repaid with the proceeds of such asset sale shall be excluded from such
calculations and deemed to have been repaid as of the first day of such
applicable period it being understood and agreed that, upon the consummation of
the AFC Sale, all Consolidated Capital Expenditures of Aerojet Fine Chemicals
LLC shall be excluded from the calculation of the financial covenants set forth
in this Section 5.9.

      SECTION 5.10 ADDITIONAL GUARANTORS.

      The Credit Parties will cause each of their Material Domestic
Subsidiaries, whether newly formed, after acquired or otherwise existing, to
promptly (and in any event within thirty (30) days after such Material Domestic
Subsidiary is formed or acquired (or such longer period of time as agreed to by
the Administrative Agent in its reasonable discretion)) become a Guarantor
hereunder by way of execution of a Joinder Agreement. In connection therewith,
the Credit Parties shall give notice to the Administrative Agent not less than
ten (10) days prior to creating a Material Domestic Subsidiary (or such shorter
period of time as agreed to by the Administrative Agent in its reasonable
discretion), or acquiring the Capital Stock of any other Person. The Credit
Party Obligations shall be secured by, among other things, a first priority

                                       94
<PAGE>

perfected security interest in the Collateral of such new Guarantor and a pledge
of 100% of the Capital Stock of such new Guarantor and its Domestic Subsidiaries
and 65% (or such higher percentage that would not result in adverse tax
consequences for the Borrower or such new Guarantor) of the voting Capital Stock
and 100% of the non-voting Capital Stock of its first-tier Foreign Subsidiaries.
In connection with the foregoing, the Credit Parties shall deliver to the
Administrative Agent, with respect to each new Guarantor to the extent
applicable, substantially the same documentation required pursuant to Sections
4.1(b)-(f) and 5.12 and such other documents or agreements as the Administrative
Agent may reasonably request.

      SECTION 5.11 COMPLIANCE WITH LAW.

      Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.

      SECTION 5.12 PLEDGED ASSETS.

            (a) Each Credit Party will cause 100% of the Capital Stock of each
      of its direct or indirect Material Domestic Subsidiaries and 65% of the
      Capital Stock of each of its first-tier Material Foreign Subsidiaries to
      be subject at all times to a first priority, perfected Lien in favor of
      the Administrative Agent pursuant to the terms and conditions of the
      Security Documents or such other security documents as the Administrative
      Agent shall reasonably request.

            (b) If, subsequent to the Closing Date, a Credit Party shall acquire
      any real property or any securities, instruments, chattel paper or other
      personal property required for perfection to be delivered to the
      Administrative Agent as Collateral hereunder or under any of the Security
      Documents, the Borrower shall promptly (and in any event within three (3)
      Business Days) after any Responsible Officer of a Credit Party acquires
      knowledge of same notify the Administrative Agent of same. Each Credit
      Party shall, and shall cause each of its Subsidiaries to, take such action
      at its own expense as reasonably requested by the Administrative Agent
      (including, without limitation, any of the actions described in Section
      4.1(d) or (e) hereof) to ensure that the Administrative Agent has a first
      priority perfected Lien to secure the Credit Party Obligations (subject to
      Permitted Liens) in (i) all personal property of the Credit Parties
      located in the United States (including, without limitation, take all
      actions necessary under the Federal Assignment of Claims Act to ensure the
      Administrative Agent has a first priority perfected Lien on any government
      receivables), (ii) to the extent deemed to be material by the
      Administrative Agent or the Required Lenders in its or their reasonable
      discretion, all other personal property of the Credit Parties, subject in
      each case only to Permitted Liens, and (iii) to the extent deemed to be
      material by the Administrative Agent or the Required Lenders in its or
      their reasonable discretion, such real property of the Credit Parties
      located in the United States as deemed material. Each Credit Party shall,
      and shall cause each of its Subsidiaries to, adhere to the covenants
      regarding the location of personal property as set forth in the Security
      Documents.

                                       95
<PAGE>

      SECTION 5.13 COVENANTS REGARDING PATENTS, TRADEMARKS AND COPYRIGHTS.

            (a) Concurrently with the delivery of quarterly and annual financial
      statements of the Borrower pursuant to Sections 5.1 and 5.2 hereof, the
      Borrower shall notify the Administrative Agent if it knows or has reason
      to know that any application, letters patent or registration relating to
      any material Patent, Patent License, Trademark or Trademark License of the
      Credit Parties or any of their Subsidiaries may become abandoned, or of
      any adverse determination or development (including, without limitation,
      the institution of, or any such determination or development in, any
      proceeding in the United States Patent and Trademark Office or any court)
      regarding the Borrower's or any of its Subsidiary's ownership of any
      material Patent or Trademark, its right to patent or register the same, or
      to enforce, keep and maintain the same, or its rights under any material
      Patent License or Trademark License.

            (b) Concurrently with the delivery of quarterly and annual financial
      statements of the Borrower pursuant to Sections 5.1 and 5.2 hereof, the
      Borrower shall notify the Administrative Agent after it knows or has
      reason to know of any adverse determination or development (including,
      without limitation, the institution of, or any such determination or
      development in, any proceeding in any court) regarding any material
      Copyright or Copyright License of the Credit Parties or any of their
      Subsidiaries, whether (i) such material Copyright or Copyright License may
      become invalid or unenforceable prior to its expiration or termination, or
      (ii) the Borrower's or any of its Subsidiary's ownership of such material
      Copyright, its right to register the same or to enforce, keep and maintain
      the same, or its rights under such material Copyright License, may become
      affected.

            (c) (i) Concurrently with the delivery of quarterly and annual
            financial statements of the Borrower pursuant to Sections 5.1 and
            5.2 hereof, the Borrower shall notify the Administrative Agent of
            any filing by any Credit Party or any of its Subsidiaries, either
            itself or through any agent, employee, licensee or designee, of any
            application for registration of any Intellectual Property (other
            than Intellectual Property of de minimus value) with the United
            States Copyright Office or United States Patent and Trademark Office
            or any similar office or agency in any other country or any
            political subdivision thereof.

                  (ii) Concurrently with the delivery of quarterly and annual
            financial statements of the Borrower pursuant to Sections 5.1 and
            5.2 hereof, the Borrower shall provide the Administrative Agent and
            its counsel a complete and correct list in all material respects of
            all new Copyright Licenses, Patent Licenses and Trademark Licenses
            (other than Copyright Licenses, Patent Licenses and Trademark
            Licenses of de minimus value) not previously disclosed on Schedule
            3.16 or otherwise disclosed to the Administrative Agent pursuant to
            this Section 5.13(c)(ii).

                                       96
<PAGE>

                  (iii) Upon request of the Administrative Agent, the Borrower
            shall execute and deliver any and all agreements, instruments,
            documents, and papers as the Administrative Agent may reasonably
            request to evidence the Administrative Agent's security interest in
            the Intellectual Property and the general intangibles (other than
            Intellectual Property of de minimus value) referred to in clauses
            (i) and (ii), including, without limitation, the goodwill of the
            Borrower or its Subsidiaries relating thereto or represented thereby
            (or such other Intellectual Property or the general intangibles
            relating thereto or represented thereby as the Administrative Agent
            may reasonably request).

            (d) The Credit Parties and their Subsidiaries will take all
      necessary actions, including, without limitation, in any proceeding before
      the United States Patent and Trademark Office or the United States
      Copyright Office, to maintain each material item of Intellectual Property
      of the Credit Parties and their Subsidiaries, including, without
      limitation, payment of maintenance fees, filing of applications for
      renewal, affidavits of use, affidavits of incontestability and opposition,
      interference and cancellation proceedings; provided that the Credit
      Parties shall have the right to abandon any item of Intellectual Property
      which the Borrower determines is no longer of significant value or useful
      or necessary to the business of the Borrower and its Subsidiaries.

            (e) In the event that any Credit Party becomes aware that any
      material Intellectual Property is infringed, misappropriated or diluted by
      a third party in any material respect, the Credit Parties shall notify the
      Administrative Agent promptly after it learns thereof and shall, unless
      the Credit Parties shall reasonably determine that such Intellectual
      Property is not material to the business of the Credit Parties and their
      Subsidiaries taken as a whole or as to which the Credit Parties reasonably
      conclude that the cost of such proceeding or its likelihood of success
      does not justify its prosecution, promptly sue for infringement,
      misappropriation or dilution and to recover any and all damages for such
      infringement, misappropriation or dilution, and take such other actions as
      the Credit Parties shall reasonably deem appropriate under the
      circumstances to protect such Intellectual Property.

      SECTION 5.14 FURTHER ASSURANCES; POST-CLOSING COVENANTS.

            (a) Further Assurances. Upon the reasonable request of the
      Administrative Agent, promptly perform or cause to be performed any and
      all acts and execute or cause to be executed any and all documents for
      filing under the provisions of the Uniform Commercial Code or any other
      Requirement of Law which are necessary or advisable to maintain in favor
      of the Administrative Agent, for the benefit of the Secured Parties, Liens
      on the Collateral that are duly perfected in accordance with the
      requirements of, or the obligations of the Credit Parties under, the
      Credit Documents and all applicable Requirements of Law.

            (b) Landlord Waiver. Within sixty (60) days after the Closing Date
      (or such extended period of time as agreed to by the Administrative
      Agent), the Credit Parties shall use commercially reasonable efforts to
      deliver to the Administrative Agent a

                                       97
<PAGE>

      landlord waiver with respect to the real property located in Camden,
      Arizona executed by the landlord on such real property, such landlord
      waiver to be in form and substance reasonably satisfactory to the
      Administrative Agent.

            (c) Account Control Agreements. Within sixty (60) days after the
      Closing Date (or such extended period of time as agreed to by the
      Administrative Agent), the Credit Parties shall use commercially
      reasonable efforts to deliver to the Administrative Agent, to the extent
      not delivered to the Administrative Agent on or prior to the Closing Date,
      such duly executed account control agreements as requested by the
      Administrative Agent with respect to Collateral for which a control
      agreement is required for perfection of the Administrative Agent's
      security interest under the Uniform Commercial Code.

            (d) SNDA. Within sixty (60) days after the Closing Date (or such
      extended period of time as agreed to by the Administrative Agent), the
      Credit Parties shall use commercially reasonable efforts to deliver to the
      Administrative Agent a subordination, nondisturbance and attornment
      agreement with respect to the real property located in Redmond, Washington
      executed by the tenant on such real property, such agreement to be in form
      and substance reasonably satisfactory to the Administrative Agent.

            (e) Intellectual Property. Within ninety (90) days after the Closing
      Date (or such extended period of time as agreed to by the Administrative
      Agent), to the extent required by the Administrative Agent, the Borrower
      shall provide evidence to the Administrative Agent, in form and substance
      reasonably satisfactory to the Administrative Agent, that all chain of
      title issues with respect to the material Intellectual Property of the
      Credit Parties have been corrected in the appropriate records of the
      United States Patent and Trademark Office and the United States Copyright
      Office.

                                   ARTICLE VI

                               NEGATIVE COVENANTS

      The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Credit Agreement is in effect and until the
Commitments have terminated and the Credit Party Obligations under the Credit
Documents have been paid in full, that:

      SECTION 6.1 INDEBTEDNESS.

      The Credit Parties will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:

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

            (b) Indebtedness of the Credit Parties and their Subsidiaries
      existing as of the Closing Date as set forth on Schedule 6.1(b) and any
      renewals, refinancings or extensions

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      thereof; provided, however, that (i) subject to clause (ii) below, the
      principal amount of such Indebtedness as renewed, refinanced or extended
      (as determined as of the date of the renewal, refinancing or extension of
      such Indebtedness in accordance with GAAP), does not exceed the principal
      amount of the Indebtedness refinanced thereby on such date plus costs and
      fees incurred in connection with such renewal, refinancing or extension,
      (ii) if such Indebtedness is owed by a Credit Party to a Subsidiary that
      is not a Credit Party, such Indebtedness shall not be repaid in cash or
      Cash Equivalents and shall not be renewed, extended, refinanced or
      replaced, (iii) the Weighted Average Life to Maturity of such Indebtedness
      is not decreased and (iv) in the case of any such Indebtedness, as
      renewed, refinanced or extended, which is in excess of $5,000,000, such
      Indebtedness is upon terms and subject to documentation which is in form
      and substance reasonably satisfactory to the Administrative Agent;

            (c) Indebtedness incurred or acquired after the Closing Date
      consisting of Capital Leases or Indebtedness incurred to provide all or a
      portion of the purchase price or cost of construction of an asset;
      provided that (i) such Indebtedness when incurred (A) does not exceed one
      hundred percent (100%) of the fair market value of the asset subject to
      such purchase money financing or Capital Lease and (B) is not less than
      seventy percent (70%) of the fair market value of such asset; (ii) no such
      Indebtedness shall be refinanced for a principal amount in excess of the
      principal balance outstanding thereon at the time of such refinancing; and
      (iii) the aggregate amount of such Indebtedness outstanding at any time,
      together with Indebtedness outstanding and permitted by Section 6.1(d)
      (without double counting) shall not exceed $15,000,000;

            (d) Indebtedness of a Subsidiary of the Borrower issued and
      outstanding on or prior to the date on which such Subsidiary was acquired
      by the Borrower or a Subsidiary of the Borrower in a transaction
      constituting a Permitted Acquisition (other than Indebtedness issued as
      consideration in, or to provide all or any portion of the funds utilized
      to consummate such Permitted Acquisition) and any extension, renewal or
      replacement thereof (including costs and fees incurred in connection with
      such extension, renewal or replacement); provided, that the aggregate
      amount of such Indebtedness outstanding at any time shall not exceed
      $10,000,000;

            (e) Indebtedness of the Credit Parties and their Subsidiaries
      pursuant to the Existing Subordinated Notes and the New Convertible Notes;
      provided that the Existing Subordinated Notes and the New Convertible
      Notes may be refinanced including costs and fees or extended so long as
      (i) no Default or Event of Default shall have occurred and be continuing
      or would result therefrom, (ii) the principal amount of such Existing
      Subordinated Notes will not be increased in connection with such
      refinancing or extension (except by an amount equal to the costs and fees
      incurred in connection with such refinancing or extension), (iii) the
      terms of the refinanced or extended notes shall be reasonably satisfactory
      to the Administrative Agent and shall be substantially similar or more
      favorable to the Credit Parties and their Subsidiaries (and the
      subordination terms thereof shall be substantially similar or more
      favorable to the Lenders) than the Existing Subordinated Notes or the New
      Convertible Notes, (iv) the maturity date of such refinanced or extended
      notes shall be at least six (6) months after the Credit-Linked

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      Maturity Date and (v) the Weighted Average Life to Maturity of such
      refinanced or extended notes is not decreased;

            (f) unsecured Indebtedness incurred by the Credit Parties and owed
      to any Credit Party or any of its Subsidiaries; provided, however, that in
      the case of such intercompany Indebtedness consisting of a loan or advance
      by a Credit Party to another Credit Party, each such loan shall be
      evidenced by an Intercompany Note payable to the Credit Party, in form and
      substance satisfactory to Administrative Agent, which Intercompany Notes
      shall be delivered and pledged to the Administrative Agent as part of the
      Collateral;

            (g) Indebtedness and obligations owing under Secured Hedging
      Agreements and other Hedging Agreements entered into in order to manage
      existing or anticipated interest rate or currency exchange rate risks and
      not for speculative purposes;

            (h) Indebtedness of the Credit Parties and their Subsidiaries
      consisting of unsecured Guaranty Obligations incurred to satisfy bonding
      obligations not in excess of $5,000,000 at any one time which arise in the
      ordinary course of business;

            (i) Indebtedness of the Borrower consisting of unsecured Guaranty
      Obligations in favor of the United States Environmental Protection Agency
      which are incurred on behalf of Aerojet in connection with environmental
      remediation; provided, that such Guaranty Obligations permitted under this
      Section 6.1(k) shall not at any time exceed $120,000,000;

            (j) additional unsecured Indebtedness for money borrowed not
      otherwise covered by clauses (a) through (l) above; provided that the
      aggregate outstanding principal amount of all such other Indebtedness
      permitted under this Section 6.1(i) shall in no event exceed $20,000,000
      at any time; and

            (k) Guaranty Obligations in respect of Indebtedness of a Credit
      Party to the extent such Indebtedness is permitted to exist or be incurred
      pursuant to this Section 6.1 and any renewal, refinancing or extension of
      such Guaranty Obligations to the extent such Indebtedness is permitted to
      be renewed, refinanced or extended hereunder; provided that if the
      Indebtedness with respect to which such Guaranty Obligations relate is
      unsecured, such Guaranty Obligations shall also be unsecured.

      SECTION 6.2 LIENS.

      The Credit Parties will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of their respective property or assets of any kind (whether real or personal,
tangible or intangible), whether now owned or hereafter acquired, except for
Permitted Liens.

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      SECTION 6.3 NATURE OF BUSINESS.

      The Credit Parties will not, nor will they permit any Subsidiary to, alter
the character of the business of the Credit Parties and their Subsidiaries,
taken as a whole, in any material respect from that conducted as of the Closing
Date (including the development and sale of real estate) other than the changes
in business, if any, related to the AFC Sale.

      SECTION 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.

      The Credit Parties will not, nor will they permit any Subsidiary to:

            (a) dissolve, liquidate or wind up its affairs, consolidate or merge
      with another Person, or sell, transfer, lease or otherwise dispose of its
      property or assets or agree to do so at a future time except the
      following, without duplication, shall be expressly permitted:

                  (i) Specified Sales;

                  (ii) the disposition of property or assets as a result of a
            Recovery Event to the extent the Net Cash Proceeds therefrom are
            used to repay Loans pursuant to Section 2.9(b)(vi) or repair or
            replace damaged property or to purchase or otherwise acquire new
            assets or property in accordance with the terms of Section
            2.9(b)(vi);

                  (iii) the sale, lease or transfer of property or assets from a
            Credit Party to another Credit Party; provided that prior to or
            simultaneously with any such sale, lease or transfer, all actions
            required by the Administrative Agent shall be taken to insure the
            continued perfection and priority of the Administrative Agent's
            Liens on such property and assets;

                  (iv) the consolidation, liquidation or merger of a Credit
            Party into another Credit Party or any Subsidiary into a Credit
            Party; provided that (A) prior to or simultaneously with any such
            consolidation, liquidation or merger, all actions required by the
            Administrative Agent shall be taken to insure the continued
            perfection and priority of the Administrative Agent's Liens on the
            property and assets of each such Credit Party and (B) if such
            consolidation, liquidation or merger involves the Borrower, the
            Borrower shall be the surviving entity;

                  (v) the dissolution, liquidation or winding up of a Subsidiary
            that is not a Credit Party; provided that prior to or simultaneously
            with any such dissolution, liquidation or winding up, all assets of
            such Subsidiary are transferred to a Credit Party or a Subsidiary
            thereof;

                  (vi) the termination of any Hedging Agreement permitted
            pursuant to Section 6.1;

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                  (vii) the Borrower and its Subsidiaries may sell or discount,
            in each case without recourse and in the ordinary course of
            business, accounts receivable arising in the ordinary course of
            business (A) which are overdue, or (B) which the Borrower or such
            Subsidiary may reasonably determine are difficult or uneconomic to
            collect but only in connection with the compromise or collection
            thereof consistent with customary industry practice (and not as part
            of any bulk sale or financing of receivables);

                  (viii) the Borrower and its Subsidiaries may license its
            patents, trade secrets, know-how and other intellectual property
            (the "Technology"); provided that such license shall be assignable
            to the Administrative Agent or any assignee of the Administrative
            Agent without the consent of the licensee and no such license shall
            (A) transfer ownership of such Technology to any other Person or (B)
            require the Borrower to pay any fees for any such use;

                  (ix) the AFC Sale; provided that at the time of such sale (A)
            no Event of Default has occurred and is continuing and no Default or
            Event of Default would result therefrom and (B) such sale is for
            fair market value as determined by the board of directors of the
            Borrower;

                  (x) Permitted Real Estate Sales;

                  (xi) the grant of certain rights pertaining to "Aggregates" to
            Granite Construction Company pursuant to the Agreement Granting
            Right to Mine Aggregates dated November 18, 2004 (the "Granite
            Agreement");

                  (xii) the sale, transfer or other disposition of any assets
            that are obsolete, worn out or no longer useful in any Credit
            Party's business; and

                  (xiii) the sale, transfer, lease or other disposition of any
            other assets, provided that the aggregate Net Cash Proceeds received
            from the sale of all assets subject to this Section 6.4(a)(xi) which
            are not reinvested to acquire assets to be used in such Person's
            business shall not exceed $20,000,000 in any fiscal year of the
            Borrower;

      provided, that, with respect to subsections (i), (ii), (vii), (viii),
      (ix), (xi), (xii) and (xiii) above, at least 75% of the consideration
      received therefor by such Credit Party shall be in the form of cash or
      Cash Equivalents; and, provided, further, that the non-cash portion of any
      such consideration shall be in compliance with the provisions of Section
      6.5 hereof; or

            (b) purchase, lease or otherwise acquire (in a single transaction or
      a series of related transactions) the property or assets of any Person
      (other than purchases or other acquisitions of inventory, leases,
      materials, property and equipment in the ordinary course of business,
      except as otherwise limited or prohibited herein), except for

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      (i) transactions permitted pursuant to Section 6.4(a), (ii) Investments
      permitted pursuant to Section 6.5 and (iii) Permitted Acquisitions.

      SECTION 6.5 ADVANCES, INVESTMENTS AND LOANS.

      The Credit Parties will not, nor will they permit any Subsidiary to, lend
money or extend credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person except for Permitted Investments.

      SECTION 6.6 TRANSACTIONS WITH AFFILIATES.

      The Credit Parties will not, nor will they permit any Subsidiary to, enter
into any transaction or series of transactions (other than compensation, bonus
and benefit arrangements for employees approved by the board of directors of the
Borrower, and reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder), whether or not in the ordinary
course of business, with any officer, director, shareholder or Affiliate other
than on terms and conditions substantially as favorable as would be obtainable
in a comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.

      SECTION 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.

      The Credit Parties will not, nor will they permit any Subsidiary to,
create, form or acquire any Subsidiaries, except in accordance with the terms
hereof. The Credit Parties will not sell, transfer, pledge or otherwise dispose
of any Capital Stock or other equity interests in any of its Subsidiaries, nor
will it permit any of its Subsidiaries to issue, sell, transfer, pledge or
otherwise dispose of any of their Capital Stock or other equity interests,
except in a transaction permitted by Section 6.4(a).

      SECTION 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS;
ACCOUNTING POLICIES.

            (a) No Credit Party will, nor will they permit any of its
      Subsidiaries to, (i) change its fiscal year, (ii) amend, modify or change
      its articles of incorporation, certificate of designation (or corporate
      charter or other similar organizational document), operating agreement,
      bylaws (or other similar document) or other agreements related to its
      Capital Stock in any respect adverse to the interests of the Lenders
      without the prior written consent of the Required Lenders, (iii) amend,
      modify, cancel or terminate or fail to renew or extend (if renewable or
      extendable by its terms) or permit the amendment, modification,
      cancellation or termination of any of its Material Contracts in any
      respect materially adverse to the interests of the Lenders without the
      prior written consent of the Required Lenders, or (iv) change its state of
      incorporation, organization or formation or have more than one state of
      incorporation, organization or formation.

            (b) The Borrower shall not, nor shall it permit any of its
      Subsidiaries to make or permit to be made any change in accounting
      policies affecting the presentation of

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      financial statements or reporting practices from those employed by it on
      the date hereof; unless (i) such change is required or permitted by GAAP
      and (ii) such change is disclosed to the Lenders through the
      Administrative Agent or otherwise.

      SECTION 6.9 LIMITATION ON RESTRICTED ACTIONS.

      The Credit Parties will not, nor will they permit any Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions to any Credit Party on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness or other obligation owed to
any Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its properties or assets to any Credit Party, or (e)
act as a Guarantor or encumber its assets to the extent required by the Credit
Documents, except (in respect of any of the matters referred to in clauses
(a)-(d) above) for such encumbrances or restrictions existing under or by reason
of (i) this Credit Agreement and the other Credit Documents, (ii) applicable law
and regulations, (iii) any document or instrument governing Indebtedness
incurred pursuant to Section 6.1(c); provided that any such restriction
contained therein relates only to the asset or assets constructed or acquired in
connection therewith, (iv) any Permitted Lien or any document or instrument
governing any Permitted Lien; provided that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Lien or
(v) any such encumbrance or restriction consisting of customary non-assignment
provisions in leases or licenses restricting leasehold interests or licenses, as
applicable, entered into in the ordinary course of business.

      SECTION 6.10 RESTRICTED PAYMENTS.

      The Credit Parties will not, nor will they permit any Subsidiary to,
directly or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to the Borrower (directly or indirectly through its
Subsidiaries), (c) subject to the subordination terms of such Subordinated Debt,
(i) to make regularly scheduled interest payments on the Existing Subordinated
Notes and the New Convertible Notes, (ii) so long as no Event of Default has
occurred and is continuing and no Default or Event of Default would result
therefrom, to make the Claw-Back in an amount not to exceed $58,000,000
(inclusive of all fees, expenses and premiums incurred in connection therewith)
during the ninety (90) day period immediately following the Closing Date, (iii)
so long as no Event of Default has occurred and is continuing and no Default or
Event of Default would result therefrom, to refinance the 2007 Convertible
Notes, the 2013 Senior Subordinated Notes and the 2024 Convertible Notes on
substantially similar or more favorable terms to the Lenders and on terms
reasonably satisfactory to the Administrative Agent, (iv) to redeem (with funds
other than from the Facilities) the 2007 Convertible Notes and the 2024
Convertible Notes to the extent required by the mandatory redemption provisions
of the indentures therefor as in effect on the Closing Date and (v) so long as
no Event of Default has occurred and is continuing and no Default or Event of
Default would result therefrom from and after the date when there shall be no
outstanding amounts under the Term Loan, to redeem all or a portion of the 2013
Senior Subordinated Notes with the proceeds of Asset Dispositions (in accordance
with the terms

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of the indenture for the 2013 Senior Subordinated Notes as in effect on the
Closing Date) that are not prepaid pursuant to Section 2.9(b), so long as, after
giving pro forma effect to such redemption, (x) the Unadjusted Senior Leverage
Ratio is less than 2.0 to 1.0, (y) there are no Revolving Loans outstanding and
(z) the Loan to Value Test is satisfied, (d) so long as no Event of Default has
occurred and is continuing and no Default or Event of Default would result
therefrom, to pay earnout obligations incurred as part of the consideration for
a Permitted Acquisition and (e) so long as no Default or Event of Default has
occurred and is continuing and no Default or Event of Default would result
therefrom, to repurchase Capital Stock upon the termination of employment,
death, permanent disability or retirement of employees or management in an
aggregate amount not to exceed $2,000,000 annually.

      SECTION 6.11 AMENDMENT OF SUBORDINATED DEBT.

      The Credit Parties will not, nor will it permit any Subsidiary to, without
the prior written consent of the Required Lenders, amend, modify, waive or
extend or permit the amendment, modification, waiver or extension of any term of
any document governing or relating to any Subordinated Debt (including, without
limitation, the Existing Subordinated Notes or the New Convertible Notes) in a
manner that is adverse to the interests of the Lenders.

      SECTION 6.12 SALE LEASEBACKS.

      The Credit Parties will not, nor will they permit any Subsidiary to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an operating lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which any Credit Party or any of their Subsidiaries has
sold or transferred or is to sell or transfer to any other Person (other than
the Borrower or any of its Subsidiaries) or (b) which the Borrower or any of its
Subsidiaries intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred by the Borrower or any
of its Subsidiaries to any Person (other than the Borrower or any of its
Subsidiaries) in connection with such lease, except for such sale leasebacks in
the amount of $15,000,000 in the aggregate during the term of this Agreement.

      SECTION 6.13 NO FURTHER NEGATIVE PLEDGES.

      The Credit Parties will not, nor will they permit any Subsidiary to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Credit Agreement and the other Credit Documents and
(b) pursuant to any document or instrument governing Indebtedness incurred
pursuant to Section 6.1(c); provided that any such restriction contained therein
relates only to the asset or assets constructed or acquired in connection
therewith, and (c) in connection with any Permitted Lien or any document or
instrument governing any Permitted Lien; provided that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien.

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      SECTION 6.14 ACCOUNTS.

      The Credit Parties and their Subsidiaries will not maintain deposit and
securities accounts (other than pension accounts) with Persons, other than the
Administrative Agent, the Lenders and other Persons that have entered into a
control agreement with the Administrative Agent, in form and substance
satisfactory to the Administrative Agent, with respect to the accounts held with
such Person, that contain an aggregate balance at any time of more than
$10,000,000.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

      SECTION 7.1 EVENTS OF DEFAULT.

      An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):

            (a) Payment Default. The Borrower shall fail to pay any principal on
      any Loan or Note when due (whether at maturity, by reason of acceleration
      or otherwise) in accordance with the terms thereof or hereof; or the
      Borrower shall fail to reimburse any Revolving Issuing Lender or any
      Credit-Linked Issuing Lender, as appropriate, for any LOC Obligations or
      any Credit-Linked LOC Obligations when due (whether at maturity, by reason
      of acceleration or otherwise) in accordance with the terms hereof; or the
      Borrower shall fail to pay any interest on any Loan or Note or any fee or
      other amount payable hereunder when due (whether at maturity, by reason of
      acceleration or otherwise) in accordance with the terms thereof or hereof
      and such failure shall continue unremedied for three (3) Business Days; or
      any Guarantor shall fail to pay on the Guaranty in respect of any of the
      foregoing or in respect of any other Guaranty Obligations thereunder.

            (b) Misrepresentation. Any representation or warranty made or deemed
      made herein, in the Security Documents or in any of the other Credit
      Documents or which is contained in any certificate, document or financial
      or other statement furnished at any time under or in connection with this
      Credit Agreement shall prove to have been incorrect, false or misleading
      in any material respect on or as of the date made or deemed made.

            (c) Covenant Default. (i) Any Credit Party shall fail to perform,
      comply with or observe any term, covenant or agreement applicable to it
      contained in Sections 5.4, 5.7, 5.9 or Article VI hereof; (ii) any Credit
      Party shall fail to perform, comply with or observe any term, covenant or
      agreement applicable to it contained in Sections 5.1(a), 5.1(b), 5.2(b),
      5.2(d), 5.2(e), 5.2(f) or 5.2(g) and such breach or failure to comply is
      not cured within five (5) days of its occurrence or (iii) any Credit Party
      shall fail to comply with any other covenant contained in this Credit
      Agreement or the other Credit Documents or any other agreement, document
      or instrument among any Credit Party, the Administrative Agent and the
      Lenders or executed by any Credit Party in favor of the

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      Administrative Agent or the Lenders (other than as described in Sections
      7.1(a) or 7.1(c)(i) above), and such breach or failure to comply is not
      cured within thirty (30) days of its occurrence.

            (d) Debt Cross-Default. Any Credit Party shall (i) default in any
      payment of principal of or interest on any Indebtedness (other than the
      Loans, Reimbursement Obligations and the Guaranty) in a principal amount
      outstanding of at least $5,000,000 for the Borrower and any of its
      Subsidiaries in the aggregate beyond any applicable grace period (not to
      exceed 30 days), if any, provided in the instrument or agreement under
      which such Indebtedness was created; (ii) default in the observance or
      performance of any other agreement or condition relating to any
      Indebtedness (other than the Loans, Reimbursement Obligations and the
      Guaranty) in a principal amount outstanding of at least $5,000,000 in the
      aggregate for the Credit Parties and their Subsidiaries or contained in
      any instrument or agreement evidencing, securing or relating thereto, or
      any other event shall occur or condition exist, the effect of which
      default or other event or condition is to cause, or to permit the holder
      or holders of such Indebtedness or beneficiary or beneficiaries of such
      Indebtedness (or a trustee or agent on behalf of such holder or holders or
      beneficiary or beneficiaries) to cause, with the giving of notice if
      required, such Indebtedness to become due prior to its stated maturity; or
      (iii) breach or default any Secured Hedging Agreement (subject to any
      grace period therein).

            (e) Other Cross-Defaults. The Credit Parties or any of their
      Subsidiaries shall default in (i) the payment when due under any Material
      Contract or (ii) in the performance or observance, of any obligation or
      condition of any Material Contract and such failure to perform or observe
      such other obligation or condition results in the termination of such
      Material Contract.

            (f) Bankruptcy Default. (i) The Credit Parties or any of their
      Subsidiaries shall commence any case, proceeding or other action (A) under
      any existing or future law of any jurisdiction, domestic or foreign,
      relating to bankruptcy, insolvency, reorganization or relief of debtors,
      seeking to have an order for relief entered with respect to it, or seeking
      to have it judged bankrupt or insolvent, or seeking reorganization,
      arrangement, adjustment, winding-up, liquidation, dissolution, composition
      or other relief with respect to it or its debts (provided that the
      Borrower may wind up or dissolve Subsidiaries in accordance with the terms
      of Section 6.4(a)), or (B) seeking appointment of a receiver, trustee,
      custodian, conservator or other similar official for it or for all or any
      substantial part of its assets, or the Credit Parties or any of their
      Subsidiaries shall make a general assignment for the benefit of its
      creditors; or (ii) there shall be commenced against the any Credit Party
      or any of its Subsidiaries any case, proceeding or other action of a
      nature referred to in clause (i) above which (A) results in the entry of
      an order for relief or any such adjudication or appointment or (B) remains
      undismissed, undischarged or unbonded for a period of sixty (60) days
      (provided that no Lender shall be required to make an Extension of Credit
      during such sixty (60) day period); or (iii) there shall be commenced
      against any Credit Party or any of its Subsidiaries any case, proceeding
      or other action seeking issuance of a warrant of attachment, execution,
      distraint or similar process against all or any substantial part of its
      assets which results in the entry of an

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      order for any such relief which shall not have been vacated, discharged,
      or stayed or bonded pending appeal within sixty (60) days from the entry
      thereof (provided that no Lender shall be required to make an Extension of
      Credit during such 60 day period); or (iv) the Credit Parties or any of
      their Subsidiaries shall take any action in furtherance of, or indicating
      its consent to, approval of, or acquiescence in, any of the acts set forth
      in clause (i), (ii) or (iii) above; or (v) the Credit Parties or any of
      their Subsidiaries shall generally not, or shall be unable to, or shall
      admit in writing its inability to, pay its debts as they become due.

            (g) Judgment Default. One or more judgments, orders, decrees or
      arbitration awards shall be entered against the Credit Parties or any of
      their Subsidiaries involving in the aggregate a liability (to the extent
      not paid when due or covered by insurance) of $5,000,000 or more and all
      such judgments, orders, decrees or arbitration awards shall not have been
      paid and satisfied, vacated, discharged, stayed or bonded pending appeal
      within thirty (30) days from the entry thereof.

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

            (i) Change of Control. A Change of Control shall have occurred.

            (j) Failure of Credit Documents. This Credit Agreement (including
      the Guaranty) or any other Credit Document or any provision hereof or
      thereof shall cease to be in full force and effect (other than in
      accordance with its terms) or to give the Administrative Agent and/or the
      Lenders the security interests, liens, rights, powers and privileges
      purported to be created thereby, or any Credit Party or any Person acting
      by or on behalf of any Credit Party shall (i) deny or disaffirm any Credit
      Party's obligations under this Credit Agreement or any other Credit
      Document or (ii) assert the invalidity or lack of perfection or priority
      of any Lien granted to the Administrative Agent pursuant to the Security
      Documents.

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            (k) Hedging Agreement. Any termination payment shall be due by a
      Credit Party under any Hedging Agreement and such amount is not paid
      within the later to occur of five (5) Business Days after the due date
      thereof or the expiration of grace periods, if any, in such Hedging
      Agreement.

            (l) Subordinated Debt. Any default (which is not waived or cured
      within the applicable period of grace) or event of default shall occur
      under any Subordinated Debt (including, without limitation, the 2007
      Convertible Notes, the 2024 Convertible Notes, the Existing Subordinated
      Notes or the New Convertible Notes) or the subordination provisions
      contained therein shall cease to be in full force and effect or to give
      the Lenders the rights, powers and privileges purported to be created
      thereby.

      SECTION 7.2 ACCELERATION; REMEDIES.

      Upon the occurrence and during the continuation of an Event of Default,
then, and in any such event, (a) if such event is a Bankruptcy Event,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and the
Borrower shall immediately pay to the Administrative Agent cash collateral as
security for the Revolving LOC Obligations and the Credit-Linked LOC Obligations
for subsequent drawings under then outstanding Revolving Letters of Credit and
Credit-Linked Letters of Credit in an amount equal to the maximum amount which
may be drawn under such Letters of Credit then outstanding, and (b) if such
event is any other Event of Default, subject to the terms of Section 8.5, with
the written consent of the Required Lenders, the Administrative Agent may, or
upon the written request of the Required Lenders, the Administrative Agent
shall, take any or all of the following actions: (i) by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; (ii) by notice of default to the Borrower declare
the Loans (with accrued interest thereon) and all other amounts owing under this
Credit Agreement and the Notes to be due and payable forthwith and direct the
Borrower to pay to the Administrative Agent cash collateral as security for the
Revolving LOC Obligations and Credit-Linked LOC Obligations for subsequent
drawings under then outstanding Revolving Letters of Credit or Credit-Linked
Letters of Credit in an amount equal to the maximum amount of which may be drawn
under such Letters of Credit then outstanding, whereupon the same shall
immediately become due and payable; and/or (iii) exercise on behalf of the
Lenders all of its other rights and remedies under this Credit Agreement, the
other Credit Documents and applicable law. Except as expressly provided above in
this Section 7.2, presentment, demand, protest and all other notices of any kind
are hereby expressly waived by the Credit Parties

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                                  ARTICLE VIII

                            THE ADMINISTRATIVE AGENT

      SECTION 8.1 APPOINTMENT.

            (a) Each Lender hereby irrevocably designates and appoints Wachovia
      as the Administrative Agent of such Lender under this Credit Agreement,
      and each such Lender irrevocably authorizes Wachovia, as the
      Administrative Agent for such Lender, to take such action on its behalf
      under the provisions of this Credit Agreement and to exercise such powers
      and perform such duties as are expressly delegated to the Administrative
      Agent by the terms of this Credit Agreement, together with such other
      powers as are reasonably incidental thereto. Notwithstanding any provision
      to the contrary elsewhere in this Credit Agreement, the Administrative
      Agent shall not have any duties or responsibilities, except those
      expressly set forth herein, or any fiduciary relationship with any Lender,
      and no implied covenants, functions, responsibilities, duties, obligations
      or liabilities shall be read into this Credit Agreement or otherwise exist
      against the Administrative Agent.

            (b) Each Revolving Issuing Lender shall act on behalf of the Lenders
      with respect to any Revolving Letters of Credit issued by it and the
      documents associated therewith, and each Revolving Issuing Lender shall
      have all of the benefits and immunities (i) provided to the Administrative
      Agent in this Article VIII with respect to any acts taken or omissions
      suffered by such Revolving Issuing Lender in connection with Revolving
      Letters of Credit issued by it or proposed to be issued by it and the
      applications and agreements for letters of credit pertaining to such
      Revolving Letters of Credit as fully as if the term "Administrative Agent"
      as used in this Article VIII included such Revolving Issuing Lender with
      respect to such acts or omissions, and (ii) as additionally provided
      herein with respect to any Issuing Lender.

            (c) Each Credit-Linked Issuing Lender shall act on behalf of the
      Credit-Linked Lenders with respect to any Credit-Linked Letters of Credit
      issued by it and the documents associated therewith, and each
      Credit-Linked Issuing Lender shall have all of the benefits and immunities
      (i) provided to the Administrative Agent in this Article VIII with respect
      to any acts taken or omissions suffered by such Credit-Linked Issuing
      Lender in connection with Credit-Linked Letters of Credit issued by it or
      proposed to be issued by it and the applications and agreements for
      letters of credit pertaining to such Credit-Linked Letters of Credit as
      fully as if the term "Administrative Agent" as used in this Article VIII
      included such Credit-Linked Issuing Lender with respect to such acts or
      omissions, and (ii) as additionally provided herein with respect to any
      Issuing Lender.

      SECTION 8.2 DELEGATION OF DUTIES.

      The Administrative Agent may execute any of its duties under this Credit
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the

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negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care. Without limiting the foregoing, the Administrative Agent may
appoint one of its affiliates as its agent to perform the functions of the
Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.

      SECTION 8.3 EXCULPATORY PROVISIONS.

      Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact, Subsidiaries or affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Credit Agreement (except for its or such
Person's own gross negligence or willful misconduct) or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Credit Party or any officer thereof contained in this
Credit Agreement or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Credit Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Credit
Documents or for any failure of any Credit Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance by any Credit Party of any of the agreements contained in, or
conditions of, this Credit Agreement, or to inspect the properties, books or
records of any Credit Party.

      SECTION 8.4 RELIANCE BY ADMINISTRATIVE AGENT.

            (a) The Administrative Agent shall be entitled to rely, and shall be
      fully protected in relying, upon any note, writing, resolution, notice,
      consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
      telex or teletype message, statement, order or other document or
      conversation believed by it in good faith to be genuine and correct and to
      have been signed, sent or made by the proper Person or Persons and upon
      advice and statements of legal counsel (including, without limitation,
      counsel to the Credit Parties), independent accountants and other experts
      selected by the Administrative Agent. The Administrative Agent may deem
      and treat the payee of any Note as the owner thereof for all purposes
      unless an executed Commitment Transfer Supplement has been filed with the
      Administrative Agent pursuant to Section 9.6(c) with respect to the Loans
      evidenced by such Note. The Administrative Agent shall be fully justified
      in failing or refusing to take any action under this Credit Agreement
      unless it shall first receive such advice or concurrence of the Required
      Lenders as it deems appropriate or it shall first be indemnified to its
      satisfaction by the Lenders against any and all liability and expense
      which may be incurred by it by reason of taking or continuing to take any
      such action. The Administrative Agent shall in all cases be fully
      protected in acting, or in refraining from acting, under any of the Credit
      Documents in accordance with a request of the Required Lenders or all of
      the Lenders, as may be required under this Credit Agreement, and such
      request and any action taken or failure to act pursuant thereto shall be
      binding upon all the Lenders and all future holders of the Notes.

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            (b) For purposes of determining compliance with the conditions
      specified in Section 4.1, each Lender that has signed this Credit
      Agreement shall be deemed to have consented to, approved or accepted or to
      be satisfied with, each document or other matter required thereunder to be
      consented to or approved by or acceptable or satisfactory to a Lender.

      SECTION 8.5 NOTICE OF DEFAULT.

      The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Credit Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.

      SECTION 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.

      Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
any Credit Party, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower or any other Credit Party and
made its own decision to make its Loans hereunder and enter into this Credit
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Credit
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower or any other Credit Party which may come into the possession of the

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Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.

      SECTION 8.7 INDEMNIFICATION.

      The Lenders agree to indemnify each of the Administrative Agent, Issuing
Lenders and the Swingline Lender (each an "Indemnified Party") in its capacity
as such hereunder (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to such
Lenders' respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
such Indemnified Party in any way relating to or arising out of any Credit
Document or any documents contemplated by or referred to herein or therein or
the Transactions contemplated hereby or thereby or any action taken or omitted
by an Indemnified Party under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable to an Indemnified Party for
the payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting from such Indemnified Party's gross negligence or willful
misconduct, as determined by a court of competent jurisdiction. The agreements
in this Section 8.7 shall survive the termination of this Credit Agreement and
payment of the Notes, any Reimbursement Obligation and all other amounts payable
hereunder.

      SECTION 8.8 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.

      The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower and
the other Credit Parties as though the Administrative Agent were not the
Administrative Agent hereunder. With respect to the Loans made or renewed by it
and any Note issued to it, the Administrative Agent shall have the same rights
and powers under this Credit Agreement as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.

      SECTION 8.9 SUCCESSOR ADMINISTRATIVE AGENT.

      The Administrative Agent may resign as Administrative Agent upon thirty
(30) days' prior written notice to the Borrower and the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Credit
Agreement and the other Credit Documents, then the Required Lenders shall
appoint from among the Lenders a successor administrative agent for the Lenders,
which successor agent shall be approved by the Borrower (such approval not to be
unreasonably withheld) so long as no Event of Default has occurred and is
continuing, whereupon such successor administrative agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor administrative agent effective
upon such appointment and approval, and the former Administrative Agent's
rights, powers and duties as Administrative Agent shall be terminated,

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without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Credit Agreement or any
holders of the Notes. If no successor Administrative Agent has accepted
appointment as Administrative Agent within thirty (30) days after the retiring
Administrative Agent's giving notice of resignation, the retiring Administrative
Agent shall have the right, on behalf of the Lenders, to appoint a successor
administrative agent, which successor shall be approved by the Borrower (such
approval not to be unreasonably withheld) so long as no Event of Default has
occurred and is continuing; provided that such successor administrative agent
has minimum capital and surplus of at least $500,000,000. If no successor
administrative agent has accepted appointment as Administrative Agent within
sixty (60) days after the retiring Administrative Agent's giving notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
become effective and the Lenders shall perform all duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor administrative agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the indemnification
provisions of this Credit Agreement and the other Credit Documents and the
provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Credit Agreement. In connection with any resignation by the Administrative Agent
pursuant to this Section 8.9, the Credit-Linked Deposits shall be transferred to
an account held at or otherwise under the dominion of the successor
Administrative Agent.

      SECTION 8.10 OTHER AGENTS.

      None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a "syndication agent," "documentation
agent," "co-agent," "book manager," "book runner," "lead manager," "arranger,"
"lead arranger" or "co-arranger" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than, in the case
of such Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.

      SECTION 8.11 RELEASE OF COLLATERAL AND AFC.

      Each of the Lenders hereby authorizes the Administrative Agent to release
(a) any Collateral sold, transferred or otherwise disposed of by the Credit
Parties to the extent such sale, transfer or other disposition is permitted by
the terms of the Credit Documents and (b) Aerojet Fine Chemicals LLC from the
Guaranty upon the consummation of the AFC Sale (to the extent the AFC Sale is
for all or substantially all of the voting stock thereof). Upon any sale of
Collateral permitted by the terms of the Credit Documents (including, without
limitation, the AFC Sale) the Administrative Agent shall, at the request and
expense of the Borrower, release such Collateral and any Liens related thereto.

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                                   ARTICLE IX

                                  MISCELLANEOUS

      SECTION 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.

      Neither this Credit Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this Section nor
may the Borrower or any Guarantor be released except in accordance with the
provisions of this Section 9.1. The Required Lenders may, or, with the written
consent of the Required Lenders, the Administrative Agent may, from time to
time, (a) enter into with the Borrower or any other Credit Party written
amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Credit Agreement or
the other Credit Documents or changing in any manner the rights of the Lenders
or of the Borrower or any other Credit Party hereunder or thereunder or (b)
waive, on such terms and conditions as the Required Lenders may specify in such
instrument, any of the requirements of this Credit Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, waiver, supplement,
modification or release shall:

                  (i) reduce the amount or extend the scheduled date of maturity
            of any Loan or Note or any installment thereon, or reduce the stated
            rate of any interest or fee payable hereunder (except in connection
            with a waiver of interest at the increased post-default rate set
            forth in Section 2.11(a) which shall be determined by a vote of the
            Required Lenders) or extend the scheduled date of any payment
            thereof or increase the amount or extend the expiration date of any
            Lender's Commitment, in each case without the written consent of
            each Lender directly affected thereby; provided that, it is
            understood and agreed that no waiver, reduction or deferral of a
            mandatory prepayment required pursuant to Section 2.9(b), nor any
            amendment of Section 2.9(b) or the definitions of Asset Disposition,
            Debt Issuance, Equity Issuance, Excess Cash Flow, or Recovery Event,
            shall constitute a reduction of the amount of, or an extension of
            the scheduled date of, any principal installment of any Loan or
            Note; or

                  (ii) amend, modify or waive any provision of this Section 9.1
            or reduce the percentage specified in the definition of Required
            Lenders, without the written consent of all the Lenders; or

                  (iii) amend, modify or waive any provision of Article VIII
            without the written consent of the then Administrative Agent; or

                  (iv) release the Borrower or all or substantially all of the
            Guarantors from their respective obligations hereunder or under the
            Guaranty, without the written consent of all of the Lenders and any
            Hedging Agreement Provider; or

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                  (v) release all or substantially all of the Collateral without
            the written consent of all of the Secured Parties; or

                  (vi) subordinate the Loans to any other Indebtedness without
            the written consent of all of the Lenders; or

                  (vii) permit a Letter of Credit to have an original expiry
            date more than twelve (12) months from the date of issuance without
            the consent of each of the Revolving Lenders or Credit-Linked
            Lenders, as applicable; provided, that the expiry date of any Letter
            of Credit may be extended in accordance with the terms of Section
            2.2(a) or Section 2.5(a), as applicable; or

                  (viii) permit the Borrower to assign or transfer any of its
            rights or obligations under this Credit Agreement or other Credit
            Documents; or

                  (ix) amend, modify or waive any provision of the Credit
            Documents requiring consent, approval or request of the Required
            Lenders or all Lenders without the written consent of the Required
            Lenders or all the Lenders as appropriate; or

                  (x) amend, modify or waive the order in which Credit Party
            Obligations are paid in Section 2.9(b)(viii) or the pro rata
            treatment of payments in Section 2.13(a), without the written
            consent of each Lender directly affected thereby; provided that,
            notwithstanding the foregoing, such order or treatment may be
            modified without the consent of each Lender directly affected
            thereby (but with the consent of the Required Lenders) to permit
            additional extensions of credit constituting (A) term loans to share
            ratably with the Term Loan in the application of repayment or
            prepayments pursuant to Section 2.9 or Section 2.13 with the consent
            of the Required Lenders, or (B) revolving loans to share ratably
            with the Revolving Loans in the application of repayments or
            prepayments pursuant to Section 2.9 or Section 2.13 with the consent
            of the Required Lenders; or

                  (xi) amend, modify or waive the order in which Credit Party
            Obligations are paid in Section 2.13(b) or the definition of "Credit
            Party Obligations" to delete or otherwise modify the treatment of
            any obligations referenced in such definition without the written
            consent of each Secured Party directly affected thereby; provided
            that, notwithstanding the foregoing, such order may be modified
            without the consent of each Secured Party directly affected thereby
            to permit additional extensions of credit approved by the Required
            Lenders to share ratably with the Credit Party Obligations; or

                  (xii) amend, modify or waive the definition of "Secured
            Hedging Agreement", "Hedging Agreement Provider" or "Secured Party"
            without the consent of each Hedging Agreement Provider; or

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                  (xiii) without the written consent of the Revolving Lenders
            holding in the aggregate more than 50% of the Revolving Commitments
            (or if the Revolving Commitments have been terminated, 50% of the
            outstanding Revolving Loans and Revolving Participation Interests),
            amend, modify or waive any provision specific to the revolving
            credit facility, swingline subfacility and revolving letter of
            credit subfacility provided under Sections 2.1, 2.2 and 2.3; or

                  (xiv) without the written consent of the Credit-Linked Lenders
            holding in the aggregate more than 50% of the Credit-Linked
            Commitments (or if the Credit-Linked Commitments have been
            terminated, 50% of the outstanding Term Loans and Credit-Linked
            Participation Interests), amend, modify or waive any provision
            specific to the credit-linked facilities provided under Sections 2.4
            and 2.5.

      provided, further, that no amendment, waiver or consent affecting the
rights or duties of the Administrative Agent, any Issuing Lender or the
Swingline Lender under any Credit Document shall in any event be effective,
unless in writing and signed by the Administrative Agent, such Issuing Lender
and/or the Swingline Lender, as applicable, in addition to the Lenders required
hereinabove to take such action.

      Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

      Notwithstanding any of the foregoing to the contrary, the consent of the
Credit Parties shall not be required for any amendment, modification or waiver
of the provisions of Article VIII (other than the provisions of Section 8.9);
provided, however, that the Administrative Agent will provide written notice to
the Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing Schedule 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided, however, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrower and
each Lender.

      Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.

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      SECTION 9.2 NOTICES.

      Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein or (c) the day following the day on which the same has
been delivered prepaid to a reputable national overnight air courier service, in
each case, addressed as follows in the case of the Borrower, the other Credit
Parties and the Administrative Agent, and as set forth on Schedule 9.2 in the
case of the Lenders, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:

      The Borrower
      and the other
      Credit Parties:               GenCorp Inc.
                                    P.O. Box 537012
                                    Sacramento, CA 95813-7012
                                    Attention: Chief Financial Officer
                                    Telephone: (916) 351-8585
                                    Telecopier: (916) 351-8668

      With a copy to:               William L. Horton, Jr.
                                    Shaw Pittman LLP
                                    2300 N Street, NW
                                    Washington, DC 20037
                                    Telephone:  (202) 663-9249
                                    Telecopier: (202) 663-8007

      The Administrative
                  Agent:            Wachovia Bank, National Association
                                    201 South College Street
                                    NC0680/CP8
                                    Charlotte, NC 28288-0608
                                    Attention:  Syndication Agency Services
                                    Telephone:  (704) 374-2698
                                    Telecopier: (704) 383-0288

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                                    with a copy to:

                                    Wachovia Bank, National Association
                                    One Wachovia Center, DC-5
                                    Charlotte, NC  28288-0735
                                    Attention:  Scott Santa Cruz
                                    Telephone:  (704) 383-1988
                                    Telecopier: (704) 383-7611

                                    and

                                    Attention:  Richard Nelson
                                    Telephone:  (704) 715-1455
                                    Telecopier: (704) 383-7611

provided, that notices given by the Borrower pursuant to Section 2.1 or Section
2.12 hereof shall be effective only upon receipt thereof by the Administrative
Agent.

      SECTION 9.3 NO WAIVER; CUMULATIVE REMEDIES.

      No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

      SECTION 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.

      All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Credit Agreement and the Notes
and the making of the Loans; provided that all such representations and
warranties shall terminate on the date upon which the Commitments have been
terminated and all amounts owing hereunder and under any Notes have been paid in
full.

      SECTION 9.5 PAYMENT OF EXPENSES AND TAXES.

      The Credit Parties agree (a) to pay or reimburse the Administrative Agent
and WCM for all reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this Credit
Agreement and the other Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
Transactions, together with the reasonable fees and disbursements of counsel to
the Administrative Agent, (b) to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights

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under this Credit Agreement, the Notes and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender, the Administrative Agent and WCM harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, (d) to pay, indemnify, and hold each Lender, the Administrative Agent
and WCM and their Affiliates harmless from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of the
Credit Documents and any such other documents and the use, or proposed use, of
proceeds of the Loans and (e) to pay any civil penalty or fine assessed by the
U. S. Department of the Treasury's Office of Foreign Assets Control against, and
all reasonable costs and expenses (including counsel fees and disbursements)
incurred in connection with defense thereof by the Administrative Agent or any
Lender as a result of the funding of Loans, the issuance of Letters of Credit,
the acceptance of payments or of Collateral due under the Credit Documents (all
of the foregoing, collectively, the "indemnified liabilities"); provided,
however, that the Borrower shall not have any obligation hereunder to the
Administrative Agent, WCM or any Lender with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of the Administrative
Agent, WCM or such Lender, as determined by a court of competent jurisdiction.
The agreements in this Section 9.5 shall survive repayment of the Loans, Notes
and all other amounts payable hereunder.

      SECTION 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.

            (a) This Credit Agreement shall be binding upon and inure to the
      benefit of the Borrower, the Lenders, the Administrative Agent, all future
      holders of the Notes and their respective successors and assigns, except
      that the Borrower may not assign or transfer any of its rights or
      obligations under this Credit Agreement or the other Credit Documents
      without the prior written consent of each Lender.

            (b) Any Lender may, in the ordinary course of its business and in
      accordance with applicable law, at any time sell to one or more banks or
      other entities ("Participants") participating interests in any Loan owing
      to such Lender, any Note held by such Lender, any Commitment of such
      Lender, or any other interest of such Lender hereunder, in each case in
      minimum amounts of $1,000,000 (or, if less, the entire amount of such
      Lender's Obligations, Commitments or other interests). In the event of any
      such sale by a Lender of participating interests to a Participant, such
      Lender's obligations under this Credit Agreement to the other parties to
      this Credit Agreement shall remain unchanged, such Lender shall remain
      solely responsible for the performance thereof, such Lender shall remain
      the holder of any such Note for all purposes under this Credit Agreement,
      and the Borrower and the Administrative Agent shall continue to deal
      solely and directly with such Lender in connection with such Lender's
      rights and obligations

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      under this Credit Agreement. No Lender shall transfer or grant any
      participation under which the Participant shall have rights to approve any
      amendment to or waiver of this Credit Agreement or any other Credit
      Document except to the extent such amendment or waiver would (i) extend
      the scheduled maturity of any Loan or Note or any installment thereon in
      which such Participant is participating, or reduce the stated rate or
      extend the time of payment of interest or fees thereon (except in
      connection with a waiver of interest at the increased post-default rate)
      or reduce the principal amount thereof, or increase the amount of the
      Participant's participation over the amount thereof then in effect (it
      being understood that a waiver of any Default or Event of Default shall
      not constitute a change in the terms of such participation, and that an
      increase in any Commitment or Loan shall be permitted without consent of a
      Participant if such Participant's participation is not increased as a
      result thereof), (ii) release any material Guarantor from its obligations
      under the Guaranty, (iii) release all or substantially all of the
      Collateral, or (iv) consent to the assignment or transfer by the Borrower
      of any of its rights and obligations under this Credit Agreement. In the
      case of any such participation, the Participant shall not have any rights
      under this Credit Agreement or any of the other Credit Documents (the
      Participant's rights against such Lender in respect of such participation
      to be those set forth in the agreement executed by such Lender in favor of
      the Participant relating thereto) and all amounts payable by the Borrower
      hereunder shall be determined as if such Lender had not sold such
      participation; provided that each Participant shall be entitled to the
      benefits of Sections 2.16, 2.17, 2.18, and 2.19 with respect to its
      participation in the Commitments and the Loans outstanding from time to
      time; provided, that no Participant shall be entitled to receive any
      greater amount pursuant to such Sections than the transferor Lender would
      have been entitled to receive in respect of the amount of the
      participation transferred by such transferor Lender to such Participant
      had no such transfer occurred.

            (c) Any Lender may, in the ordinary course of its business and in
      accordance with applicable law, at any time, sell or assign to any Lender,
      any Affiliate or Approved Fund of such Lender or any Approved Fund of an
      Affiliate of such Lender and with the consent of the Administrative Agent,
      each Revolving Issuing Lender and, so long as no Event of Default has
      occurred and is continuing, the Borrower (which consent of the Borrower
      shall not be unreasonably withheld or delayed), to one or more additional
      banks, insurance companies or other financial institutions or any funds
      investing in bank loans ("Purchasing Lenders"), all or any part of its
      rights and obligations under this Credit Agreement in minimum amounts of
      (i) $5,000,000 with respect to its Revolving Commitment and its Revolving
      Loans (or, if less, the entire amount of such Lender's Revolving
      Commitment and Revolving Loans), (ii) $3,000,000 (or any lesser amount as
      approved by the Administrative Agent) with respect to its Term Loan (or,
      if less, the entire amount of such Lender's Term Loan) and (iii) and
      $3,000,000 in the case of an assignment of Credit-Linked Revolving Loans
      or any Credit-Linked Commitment (or, if less, the entire amount of such
      Lender's Credit-Linked Commitment), pursuant to a Commitment Transfer
      Supplement, executed by such Purchasing Lender, such transferor Lender
      and, to the extent required by this Section 9.6, the Administrative Agent
      and the Borrower), and delivered to the Administrative Agent for its
      acceptance and recording in the Register; provided, however, that any sale
      or assignment to an existing Lender, an

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      Affiliate or Approved Fund of an existing Lender or an Approved Fund of an
      Affiliate of an existing Lender (A) shall require the consent of the
      Administrative Agent and each Revolving Issuing Lender, but shall not
      require the consent of the Borrower and (B) shall not be subject to the
      minimum assignment amounts specified herein. Upon such execution,
      delivery, acceptance and recording, from and after the Transfer Effective
      Date specified in such Commitment Transfer Supplement, (x) the Purchasing
      Lender thereunder shall be a party hereto and, to the extent provided in
      such Commitment Transfer Supplement, have the rights and obligations of a
      Lender hereunder with a Commitment as set forth therein, and (y) the
      transferor Lender thereunder shall, to the extent provided in such
      Commitment Transfer Supplement, be released from its obligations under
      this Credit Agreement (and, in the case of a Commitment Transfer
      Supplement covering all or the remaining portion of a transferor Lender's
      rights and obligations under this Credit Agreement, such transferor Lender
      shall cease to be a party hereto). Such Commitment Transfer Supplement
      shall be deemed to amend this Credit Agreement to the extent, and only to
      the extent, necessary to reflect the addition of such Purchasing Lender
      and the resulting adjustment of Commitment Percentages arising from the
      purchase by such Purchasing Lender of all or a portion of the rights and
      obligations of such transferor Lender under this Credit Agreement and the
      Notes. On or prior to the Transfer Effective Date specified in such
      Commitment Transfer Supplement, the Borrower, at its own expense, shall
      execute and deliver to the Administrative Agent in exchange for the Notes
      delivered to the Administrative Agent pursuant to such Commitment Transfer
      Supplement new Notes to the order of such Purchasing Lender in an amount
      equal to the Commitment assumed by it pursuant to such Commitment Transfer
      Supplement and, unless the transferor Lender has not retained a Commitment
      hereunder, new Notes to the order of the transferor Lender in an amount
      equal to the Commitment retained by it hereunder. Such new Notes shall be
      dated the Closing Date and shall otherwise be in the form of the Notes
      replaced thereby. The Notes surrendered by the transferor Lender shall be
      returned by the Administrative Agent to the Borrower marked "canceled".

            (d) The Administrative Agent shall maintain at its address referred
      to in Section 9.2 a copy of each Commitment Transfer Supplement delivered
      to it and a register (the "Register") for the recordation of the names and
      addresses of the Lenders and the Commitment of, and principal amount of
      the Loans owing to, each Lender from time to time. The entries in the
      Register shall be conclusive, in the absence of manifest error, and the
      Borrower, the Administrative Agent and the Lenders may treat each Person
      whose name is recorded in the Register as the owner of the Loan recorded
      therein for all purposes of this Credit Agreement. The Register shall be
      available for inspection by the Borrower or any Lender at any reasonable
      time and from time to time upon reasonable prior notice.

            (e) Upon its receipt of a duly executed Commitment Transfer
      Supplement, together with payment to the Administrative Agent by the
      transferor Lender or the Purchasing Lender (except for any assignment by a
      Lender to an Affiliate of such Lender), as agreed between them, of a
      registration and processing fee of $3,500 for each Purchasing Lender
      listed in such Commitment Transfer Supplement and the Notes

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      subject to such Commitment Transfer Supplement, the Administrative Agent
      shall (i) accept such Commitment Transfer Supplement and (ii) record the
      information contained therein in the Register.

            (f) Each Credit Party authorizes each Lender to disclose to any
      Participant or Purchasing Lender (each, a "Transferee") and any
      prospective Transferee any and all financial information in such Lender's
      possession concerning the Credit Parties and their Affiliates which has
      been delivered to such Lender by or on behalf of a Credit Party pursuant
      to this Credit Agreement or which has been delivered to such Lender by or
      on behalf of a Credit Party in connection with such Lender's credit
      evaluation of the Credit Parties and their Affiliates prior to becoming a
      party to this Credit Agreement, in each case subject to Section 9.14.

            (g) At the time of each assignment pursuant to this Section 9.6 to a
      Person which is not already a Lender hereunder and which is not a United
      States person (as such term is defined in Section 7701(a)(30) of the Code)
      for federal income tax purposes, the respective assignee Lender shall
      provide to the Borrower and the Administrative Agent the appropriate
      Internal Revenue Service Forms (and, if applicable, a Tax Exempt
      Certificate) described in Section 2.19.

            (h) Nothing herein shall prohibit any Lender from pledging or
      assigning any of its rights under this Credit Agreement (including,
      without limitation, any right to payment of principal and interest under
      any Note) to any Federal Reserve Bank in accordance with applicable laws.

            (i) The Credit-Linked Deposit funded by any Credit-Linked Lender
      pursuant to Section 2.6 shall not be released in connection with any
      assignment of its Credit-Linked Commitment but shall instead be purchased
      by the relevant assignee and continue to be held for application in
      accordance with the terms of Section 2.6 in respect of the Credit-Linked
      Commitment assigned to such assignee.

      SECTION 9.7 ADJUSTMENTS; SET-OFF.

            (a) Each Lender agrees that if any Lender (a "benefited Lender")
      shall at any time receive any payment of all or part of its Loans, or
      interest thereon, or receive any collateral in respect thereof (whether
      voluntarily or involuntarily, by set-off, pursuant to events or
      proceedings of the nature referred to in Section 7.1(e), or otherwise) in
      a greater proportion than any such payment to or collateral received by
      any other Lender, if any, in respect of such other Lender's Loans, or
      interest thereon, such benefited Lender shall purchase for cash from the
      other Lenders a participating interest in such portion of each such other
      Lender's Loan, or shall provide such other Lenders with the benefits of
      any such collateral, or the proceeds thereof, as shall be necessary to
      cause such benefited Lender to share the excess payment or benefits of
      such collateral or proceeds ratably with each of the Lenders; provided,
      however, that if all or any portion of such excess payment or benefits is
      thereafter recovered from such benefited Lender, such purchase shall be
      rescinded, and the purchase price and benefits returned, to the extent of
      such recovery,

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      but without interest. The Borrower agrees that each Lender so purchasing a
      portion of another Lender's Loans may exercise all rights of payment
      (including, without limitation, rights of set-off) with respect to such
      portion as fully as if such Lender were the direct holder of such portion.

            (b) In addition to any rights and remedies of the Lenders provided
      by law (including, without limitation, other rights of set-off), each
      Lender shall have the right, with the consent of the Administrative Agent
      or the Required Lenders, but without prior notice to the Borrower, any
      such notice being expressly waived by the Borrower to the extent permitted
      by applicable law, during the continuance of an Event of Default, to
      setoff and appropriate and apply any and all deposits (general or special,
      time or demand, provisional or final), in any currency, and any other
      credits, indebtedness or claims, in any currency, in each case whether
      direct or indirect, absolute or contingent, matured or unmatured, at any
      time held by or owing to such Lender or any branch or agency thereof to or
      for the credit or the account of the Borrower or any other Credit Party,
      or any part thereof in such amounts as such Lender may elect, against and
      on account of the Loans and other Credit Party Obligations of the Borrower
      and the other Credit Parties and claims of every nature and description of
      any Lender against the Borrower and the other Credit Parties, in any
      currency, whether arising hereunder, under any other Credit Document or
      any Secured Hedging Agreement, as such Lender may elect, whether or not
      such Lender or any other Lender has made any demand for payment and
      although such obligations, liabilities and claims may be contingent or
      unmatured. The aforesaid right of set-off may be exercised by each Lender
      against the Borrower, any other Credit Party or against any trustee in
      bankruptcy, debtor in possession, assignee for the benefit of creditors,
      receiver or execution, judgment or attachment creditor of the Borrower or
      any other Credit Party, or against anyone else claiming through or against
      the Borrower, any other Credit Party or any such trustee in bankruptcy,
      debtor in possession, assignee for the benefit of creditors, receiver, or
      execution, judgment or attachment creditor, notwithstanding the fact that
      such right of set-off shall not have been exercised by such Lender prior
      to the occurrence of any Event of Default. Each Lender agrees promptly to
      notify the Borrower and the Administrative Agent after any such set-off
      and application made by such Lender; provided, however, that the failure
      to give such notice shall not affect the validity of such set-off and
      application.

      SECTION 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.

      The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Credit
Agreement.

      SECTION 9.9 COUNTERPARTS.

      This Credit Agreement may be executed by one or more of the parties to
this Credit Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Credit Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

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      SECTION 9.10 INTEGRATION; EFFECTIVENESS; CONTINUING AGREEMENT.

            (a) This Credit Agreement, together with the other Credit Documents,
      comprises the complete and integrated agreement of the parties on the
      subject matter hereof and thereof and supersedes all prior agreements,
      written or oral, on such subject matter. In the event of any conflict
      between the provisions of this Credit Agreement and those of any other
      Credit Document, the provisions of this Credit Agreement shall control;
      provided that the inclusion of supplemental rights or remedies in favor of
      the Administrative Agent or the Lenders in any other Credit Document shall
      not be deemed a conflict with this Credit Agreement. Each Credit Document
      was drafted with the joint participation of the respective parties thereto
      and shall be construed neither against nor in favor of any party, but
      rather in accordance with the fair meaning thereof.

            (b) This Credit Agreement shall become effective at such time when
      all of the conditions set forth in Section 4.1 have been satisfied or
      waived by the Lenders and it shall have been executed by the Borrower, the
      Guarantors and the Administrative Agent, and the Administrative Agent
      shall have received copies hereof (telefaxed or otherwise) which, when
      taken together, bear the signatures of each Lender, and thereafter this
      Credit Agreement shall be binding upon and inure to the benefit of the
      Borrower, the Guarantors, the Administrative Agent and each Lender and
      their respective successors and permitted assigns.

            (c) This Credit Agreement shall be a continuing agreement and shall
      remain in full force and effect until all Loans, Revolving LOC
      Obligations, Credit-Linked LOC Obligations, interest, fees and other
      Credit Party Obligations (other than those obligations that expressly
      survive the termination of this Credit Agreement) have been paid in full
      and all Commitments and Letters of Credit have been terminated. Upon
      termination, the Credit Parties shall have no further obligations (other
      than those obligations that expressly survive the termination of this
      Credit Agreement) under the Credit Documents and the Administrative Agent
      shall, at the request and expense of the Borrower, deliver all the
      Collateral in its possession to the Borrower and release all Liens on the
      Collateral; provided that should any payment, in whole or in part, of the
      Credit Party Obligations be rescinded or otherwise required to be restored
      or returned by the Administrative Agent or any Lender, whether as a result
      of any proceedings in bankruptcy or reorganization or otherwise, then the
      Credit Documents shall automatically be reinstated and all Liens of the
      Administrative Agent shall reattach to the Collateral and all amounts
      required to be restored or returned and all costs and expenses incurred by
      the Administrative Agent or any Lender in connection therewith shall be
      deemed included as part of the Credit Party Obligations.

      SECTION 9.11 SEVERABILITY.

      Any provision of this Credit Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition

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or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

      SECTION 9.12 GOVERNING LAW.

      This Credit Agreement and the Notes and the rights and obligations of the
parties under this Credit Agreement and the Notes shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

      SECTION 9.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

      All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Credit Agreement, any Note or any of the other
Credit Documents may be brought in any state or federal court of competent
jurisdiction in the State of New York, and, by execution and delivery of this
Credit Agreement, each of the Borrower and the other Credit Parties accepts, for
itself and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts solely for purposes of any
proceeding arising out of this Credit Agreement or any of the other Credit
Documents (and not as a general submission to New York jurisdiction) and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Credit Agreement from which no appeal has been taken or is
available. Each of the Borrower and the other Credit Parties irrevocably agrees
that all service of process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address set
forth in Section 9.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto, such service being hereby
acknowledged by the each of the Borrower and the other Credit Parties to be
effective and binding service in every respect. Each of the Borrower, the other
Credit Parties, the Administrative Agent and the Lenders irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any such action or proceeding in any such jurisdiction.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against the Borrower or the other Credit Parties in the court of any other
jurisdiction.

      SECTION 9.14 CONFIDENTIALITY.

      The Administrative Agent and each of the Lenders agrees that, without the
prior consent of the Borrower, it will use its best efforts not to disclose any
information (the "Information") with respect to the Credit Parties which is
furnished pursuant to this Credit Agreement, any other Credit Document or any
documents contemplated by or referred to herein or therein and which is
designated by the Borrower to the Lenders in writing as confidential or as to
which it is otherwise reasonably clear such Information is not public, except
that any Lender may disclose any such information (a) to its employees,
Affiliates, auditors and counsel or to another Lender, (b) as has become
generally available to the public other than by a breach of this Section 9.14,
(c) 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 such

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Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the OCC or the NAIC or similar organizations (whether in the
United States or elsewhere) or their successors, (d) as may be required or
appropriate in response to any summons or subpoena or any law, order, regulation
or ruling applicable to such Lender, (e) to any prospective Participant or
assignee in connection with any contemplated transfer pursuant to Section 9.6;
provided that such prospective transferee shall have been made aware of this
Section 9.14 and shall have agreed to be bound by its provisions as if it were a
party to this Credit Agreement, (f) to Gold Sheets and other similar bank trade
publications; such information to consist of deal terms and other information
regarding the credit facilities evidenced by this Credit Agreement customarily
found in such publications, (g) in connection with any suit, action or
proceeding for the purpose of defending itself, reducing its liability, or
protecting or exercising any of its claims, rights, remedies or interests under
or in connection with the Credit Documents or any Secured Hedging Agreement, (h)
to any direct or indirect contractual counterparty in swap agreements or such
contractual counterparty's professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 9.14), and (i) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender. Notwithstanding the foregoing, Wachovia may disclose Information,
without notice to the Borrower, to governmental regulatory authorities in
connection with any regulatory examination of Wachovia or in accordance with
Wachovia's regulatory compliance policy.

      SECTION 9.15 ACKNOWLEDGMENTS.

      The Borrower and the other Credit Parties each hereby acknowledges that:

            (a) it has been advised by counsel in the negotiation, execution and
      delivery of each Credit Document;

            (b) neither the Administrative Agent nor any Lender has any
      fiduciary relationship with or duty to the Borrower or any other Credit
      Party arising out of or in connection with this Credit Agreement and the
      relationship between Administrative Agent and Lenders, on one hand, and
      the Borrower and the other Credit Parties, on the other hand, in
      connection herewith is solely that of debtor and creditor; and

            (c) no joint venture exists among the Lenders or among the Borrower
      or the other Credit Parties and the Lenders.

      SECTION 9.16 WAIVERS OF JURY TRIAL; WAIVER OF CONSEQUENTIAL DAMAGES.

      THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
Each of the Borrower, the other Credit Parties, the Administrative Agent and the
Lenders agree not

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to assert any claim against any other party to this Credit Agreement or any
their respective directors, officers, employees, attorneys, Affiliates or
agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the
Transactions.

      SECTION 9.17 PATRIOT ACT NOTICE.

      Each Lender and the Administrative Agent (for itself and not on behalf of
any other party) hereby notifies the Borrower that, pursuant to the requirements
of the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26,
2001 (the "Patriot Act"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrower in accordance
with the Patriot Act.

                                    ARTICLE X

                                    GUARANTY

      SECTION 10.1 THE GUARANTY.

      In order to induce the Lenders to enter into this Credit Agreement and any
Hedging Agreement Provider to enter into any Secured Hedging Agreement and to
extend credit hereunder and thereunder and in recognition of the direct benefits
to be received by the Guarantors from the Extensions of Credit hereunder and any
Secured Hedging Agreement, each of the Guarantors hereby agrees with the
Administrative Agent, the Lenders and the Hedging Agreement Providers as
follows: each Guarantor hereby unconditionally and irrevocably jointly and
severally guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, by acceleration or otherwise, of
any and all indebtedness of the Borrower to the Administrative Agent, the
Lenders and the Hedging Agreement Providers. If any or all of the indebtedness
becomes due and payable hereunder or under any Secured Hedging Agreement, each
Guarantor unconditionally promises to pay such indebtedness to the
Administrative Agent, the Secured Parties or their respective order, or demand,
together with any and all reasonable expenses which may be incurred by the
Administrative Agent or the Secured Parties in collecting any of the Credit
Party Obligations. The word "indebtedness" is used in this Article X in its most
comprehensive sense and means any and all advances, debts, obligations and
liabilities of the Borrower arising in connection with this Credit Agreement,
the other Credit Documents or any Secured Hedging Agreement, including
specifically all Credit Party Obligations, in each case, heretofore, now, or
hereafter made, incurred or created, whether voluntarily or involuntarily,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
whether or not such indebtedness is from time to time reduced, or extinguished
and thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable.

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      Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation,
Bankruptcy Laws).

      SECTION 10.2 BANKRUPTCY.

      Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all Credit Party
Obligations of the Borrower to the Secured Parties whether or not due or payable
by the Borrower upon the occurrence of any of the events specified in Section
7.1(f), and unconditionally promises to pay such Credit Party Obligations to the
Administrative Agent for the account of the Secured Parties, or order, on
demand, in lawful money of the United States. Each of the Guarantors further
agrees that to the extent that the Borrower or a Guarantor shall make a payment
or a transfer of an interest in any property to the Administrative Agent or any
Secured Party, which payment or transfer or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise is avoided,
and/or required to be repaid to the Borrower or a Guarantor, the estate of the
Borrower or a Guarantor, a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such avoidance or repayment, the obligation or part thereof intended
to be satisfied shall be revived and continued in full force and effect as if
said payment had not been made.

      SECTION 10.3 NATURE OF LIABILITY.

      The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the Credit Party Obligations of the
Borrower whether executed by any such Guarantor, any other guarantor or by any
other party, and no Guarantor's liability hereunder shall be affected or
impaired by (a) any direction as to application of payment by the Borrower or by
any other party, or (b) any other continuing or other guaranty, undertaking
(except to the extent received and applied to the reduction by payment of the
Credit Party Obligations)or maximum liability of a guarantor or of any other
party as to the Credit Party Obligations of the Borrower, or (c) any payment on
or in reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to the Administrative Agent or any Secured
Party on the Credit Party Obligations which the Administrative Agent or such
Secured Party repays the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.

      SECTION 10.4 INDEPENDENT OBLIGATION.

      The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other Guarantor or the

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Borrower and whether or not any other Guarantor or the Borrower is joined in any
such action or actions.

      SECTION 10.5 AUTHORIZATION.

      Each of the Guarantors authorizes the Administrative Agent and each
Secured Party without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the Credit Party Obligations or any part thereof in
accordance with this Agreement and any Secured Hedging Agreement, as applicable,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any Guarantor or any other party for the payment of this
Guaranty or the Credit Party Obligations and exchange, enforce waive and release
any such security, (c) apply such security and direct the order or manner of
sale thereof as the Administrative Agent and the Lenders in their discretion may
determine and (d) release or substitute any one or more endorsers, Guarantors,
the Borrower or other obligors.

      SECTION 10.6 RELIANCE.

      It is not necessary for the Administrative Agent or any Secured Party to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any
Credit Party Obligations made or created in reliance upon the professed exercise
of such powers shall be guaranteed hereunder.

      SECTION 10.7 WAIVER.

            (a) Each of the Guarantors waives any right (except as shall be
      required by applicable statute and cannot be waived) to require the
      Administrative Agent or any Secured Party to (i) proceed against the
      Borrower, any other guarantor or any other party, (ii) proceed against or
      exhaust any security held from the Borrower, any other guarantor or any
      other party, or (iii) pursue any other remedy in the Administrative
      Agent's or any Secured Party's power whatsoever. Each of the Guarantors
      waives any defense based on or arising out of any defense of the Borrower,
      any other guarantor or any other party other than payment in full of the
      Credit Party Obligations (other than contingent indemnity obligations),
      including without limitation any defense based on or arising out of the
      disability of the Borrower, any other guarantor or any other party, or the
      unenforceability of the Credit Party Obligations or any part thereof from
      any cause, or the cessation from any cause of the liability of the
      Borrower other than payment in full of the Credit Party Obligations. The
      Administrative Agent may, at its election, foreclose on any security held
      by the Administrative Agent by one or more judicial or nonjudicial sales
      (to the extent such sale is permitted by applicable law), or exercise any
      other right or remedy the Administrative Agent or any Lender may have
      against the Borrower or any other party, or any security, without
      affecting or impairing in any way the liability of any Guarantor hereunder
      except to the extent the Credit Party Obligations have been paid in full
      and the Commitments have been terminated. Each of the Guarantors waives
      any

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      defense arising out of any such election by the Administrative Agent or
      any of the Lenders, even though such election operates to impair or
      extinguish any right of reimbursement or subrogation or other right or
      remedy of the Guarantors against the Borrower or any other party or any
      security.

            (b) Each of the Guarantors waives all presentments, demands for
      performance, protests and notices, including without limitation notices of
      nonperformance, notice of protest, notices of dishonor, notices of
      acceptance of this Guaranty, and notices of the existence, creation or
      incurring of new or additional Credit Party Obligations. Each Guarantor
      assumes all responsibility for being and keeping itself informed of the
      Borrower's financial condition and assets, and of all other circumstances
      bearing upon the risk of nonpayment of the Credit Party Obligations and
      the nature, scope and extent of the risks which such Guarantor assumes and
      incurs hereunder, and agrees that neither the Administrative Agent nor any
      Lender shall have any duty to advise such Guarantor of information known
      to it regarding such circumstances or risks.

            (c) Each of the Guarantors hereby agrees it will not exercise any
      rights of subrogation which it may at any time otherwise have as a result
      of this Guaranty (whether contractual, under Section 509 of the Bankruptcy
      Code, or otherwise) to the claims of any Secured Party against the
      Borrower or any other guarantor of the Credit Party Obligations of the
      Borrower owing to such Secured Party (collectively, the "Other Parties")
      and all contractual, statutory or common law rights of reimbursement,
      contribution or indemnity from any Other Party which it may at any time
      otherwise have as a result of this Guaranty until such time as the Credit
      Party Obligations shall have been paid in full and the Commitments have
      been terminated. Each of the Guarantors hereby further agrees not to
      exercise any right to enforce any other remedy which the Administrative
      Agent or any Secured Party now have or may hereafter have against any
      Other Party, any endorser or any other guarantor of all or any part of the
      Credit Party Obligations of the Borrower and any benefit of, and any right
      to participate in, any security or collateral given to or for the benefit
      of the Secured Parties to secure payment of the Credit Party Obligations
      of the Borrower until such time as the Credit Party Obligations (other
      than contingent indemnity obligations) shall have been paid in full and
      the Commitments have been terminated.

      SECTION 10.8 LIMITATION ON ENFORCEMENT.

      The Secured Parties agree that this Guaranty may be enforced only by the
action of the Administrative Agent acting upon the instructions of the Required
Secured Parties and that no Secured Party shall have any right individually to
seek to enforce or to enforce this Guaranty, it being understood and agreed that
such rights and remedies may be exercised by the Administrative Agent for the
benefit of the Secured Parties under the terms of this Credit Agreement and
under any Secured Hedging Agreement. The Secured Parties further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.

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      SECTION 10.9 CONFIRMATION OF PAYMENT.

      The Administrative Agent and the Lenders will, upon request after payment
of the indebtedness and obligations which are the subject of this Guaranty and
termination of the Commitments relating thereto, confirm to the Borrower, the
Guarantors or any other Person that such indebtedness and obligations have been
paid and the Commitments relating thereto terminated, subject to the provisions
of Section 10.2.

                     [REMAINDER OF PAGE INTENTIONALLY BLANK]

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      IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement
to be duly executed and delivered by its proper and duly authorized officers as
of the day and year first above written.

BORROWER:                               GENCORP, INC.,
                                        an Ohio corporation

                                        By: /s/ Kari Van Gundy
                                           ----------------------------------
                                        Name: Kari Van Gundy
                                        Title: Vice President, Treasurer

GUARANTORS:                             AEROJET-GENERAL CORPORATION,
                                        an Ohio corporation

                                        By: /s/ Mark A. Whitney
                                           ----------------------------------
                                        Name: Mark A. Whitney
                                        Title: Secretary

                                        AEROJET ORDNANCE TENNESSEE, INC.,
                                        a Tennessee corporation

                                        By: /s/ Nabara Kazimi
                                           ----------------------------------
                                        Name: Nabara Kazimi
                                        Title: Assistant Treasurer

                                        AEROJET FINE CHEMICALS LLC,
                                        a Delaware limited liability company

                                        By: /s/ Yasmin R. Seyal
                                           ----------------------------------
                                        Name: Yasmin R. Seyal
                                        Title: Treasurer

<PAGE>

ADMINISTRATIVE AGENT
AND LENDERS:                            WACHOVIA BANK, NATIONAL
                                        ASSOCIATION,
                                        as Administrative Agent and as a Lender

                                        By: /s/ Jeffrey M. Foley
                                           ----------------------------------
                                        Name: Jeffrey M. Foley
                                        Title: Vice President

<PAGE>

                        [SCHEDULES INTENTIONALLY OMITTED]

</TEXT>
</DOCUMENT>
