CHAMPION PARTS INC
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<TYPE>EX-10
<SEQUENCE>2
<FILENAME>0002.txt
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                       Loan and Security Agreement




                             by and between
                CONGRESS FINANCIAL CORPORATION (SOUTHERN)
                               as Lender
                                  and
                          CHAMPION PARTS, INC.
                              as Borrower




                        Dated:  February 8, 2001



                      LOAN AND SECURITY AGREEMENT

               This Loan and Security Agreement dated February 8,
     2001 is entered into by and between Congress Financial Corporation
     (Southern), a Georgia corporation ("Lender") and Champion Parts, Inc.,
     an Illinois corporation ("Borrower").

                          W I T N E S S E T H:

               WHEREAS, Borrower has requested that Lender enter
     into certain financing arrangements with Borrower pursuant to which
     Lender may make loans and provide other financial accommodations to
     Borrower; and
               WHEREAS, Lender is willing to make such loans and
     provide such financial accommodations on the terms and conditions set
     forth herein;
               NOW, THEREFORE, in consideration of the mutual conditions and
     agreements set forth herein, and for other good and valuable
     consideration, the receipt and sufficiency of which is hereby
     acknowledged, the parties hereto agree as follows:

  SECTION 1.  DEFINITIONS

               All terms used herein which are defined in Article 1 or
     Article 9 of the Uniform Commercial Code shall have the meanings given
     therein unless otherwise defined in this Agreement.  All references to
     the plural herein shall also mean the singular and to the singular shall
     also mean the plural.  All references to Borrower and Lender pursuant to
     the definitions set forth in the recitals hereto, or to any other person
     herein, shall include their respective successors and assigns.  The
     words "hereof", "herein", "hereunder", "this Agreement" and words of
     similar import when used in this Agreement shall refer to this Agreement
     as a whole and not any particular provision of this Agreement and as
     this Agreement now exists or may hereafter be amended, modified,
     supplemented, extended, renewed, restated or replaced.  An Event of
     Default shall exist or continue or be continuing until such Event of
     Default is waived in accordance with Section 11.3.  Any accounting term
     used herein unless otherwise defined in this Agreement shall have the
     meanings customarily given to such term in accordance with GAAP.  For
     purposes of this Agreement, the following terms shall have the
     respective meanings given to them below:

               1.1 "Accounts" shall mean all present and future rights of
     Borrower to payment for goods sold or leased or for services rendered,
     which are not evidenced by instruments or chattel paper, and whether or
     not earned by performance.

               1.2 "Adjusted Tangible Net Worth" shall mean as to any
     Person, at any time, in accordance with GAAP (except as otherwise
     specifically set forth below), on a consolidated basis for such Person
     and its subsidiaries (if any), the amount equal to:  (a) the difference
     between:  (i) the aggregate net book value of all assets of such Person
     and its subsidiaries (other than Intangible Assets), calculating the
     book value of inventory for this purpose on a first-in-first-out basis,
     after deducting from such book values all appropriate reserves in
     accordance with GAAP (including all reserves for doubtful receivables,
     obsolescence, depreciation and amortization) and (ii) the aggregate
     amount of the indebtedness and other liabilities of such Person and its
     subsidiaries (including tax and other proper accruals) plus (b)
     indebtedness of such Person and its subsidiaries which is subordinated
     in right of payment to the full and final payment of all of the
     Obligations on terms and conditions acceptable to Lender.

               1.3 "Advance Auto" shall mean Advance Stores Company,
     Incorporated, a Virginia corporation, and its subsidiaries and
     affiliates.

               1.4 "Availability Reserves" shall mean, as of any date of
     determination, such amounts as Lender may from time to time establish and
     revise in good faith reducing the amount of Revolving Loans and Letter of
     Credit Accommodations which would otherwise be available to Borrower
     under the lending formula(s) provided for herein:  (a) to reflect events,
     conditions, contingencies or risks which, as determined by Lender in good
     faith, do or may adversely affect either (i) the Collateral or any other
     property which is security for the Obligations or its value, (ii) the
     assets, business or prospects of Borrower or any Obligor or (iii) the
     security interests and other rights of Lender in the Collateral
     (including the enforceability, perfection and priority thereof) or (b)
     to reflect Lender's good faith belief that any collateral report or
     financial information furnished by or on behalf of Borrower or any
     Obligor to Lender is or may have been incomplete, inaccurate or
     misleading in any material respect or (c) in respect of any state of
     facts which Lender determines in good faith constitutes an Event of
     Default or may, with notice or passage of time or both, constitute an
     Event of Default.

               1.5 "Auto Zone" shall mean Auto Zone, Inc., a Nevada
     corporation.

               1.6 "Blocked Accounts" shall have the meaning set forth in
     Section 6.3 hereof.

               1.7 "Champion Canada" shall mean Champion Parts (Canada),
     Ltd., a corporation formed under the laws of Ontario, and a
     wholly-owned Subsidiary of Borrower.

               1.8 "Code" shall mean the Internal Revenue Code of 1986, as
     the same now exists or may from time to time hereafter be amended,
     modified, recodified or supplemented, together with all rules,
     regulations and interpretations thereunder or related thereto.

               1.9 "Collateral" shall have the meaning set forth in Section 5
     hereof.

               1.10 "Core Return and Stock Adjustment Policies" shall mean
     the policies of Borrower and its Subsidiaries described on Exhibit C-1
     hereto, as amended from time to time with the written consent of Lender,
     which consent shall not be unreasonably withheld.

               1.11 "Dilution" shall mean, in each case based upon the
     experience of the immediately prior six (6) months, the result of
     dividing the Dollar amount of (a) bad debt write-downs, discounts,
     advertising, returns, promotions, credits, or other dilution with
     respect to the Accounts, by (b) Borrower's gross sales (excluding
     extraordinary and non-dilutive items).

               1.12 "Dilution Reserve" shall mean, as of any date of
     determination, an amount, to the extent positive, equal to the product
     of (a) Dilution minus five-hundredths (0.05) multiplied by (b) Eligible
     Accounts.

               1.13 "Dollars" or "$" shall mean United States dollars.

               1.14 "Eligible Accounts" shall mean Accounts created by
     Borrower or Champion Canada which are and continue to be acceptable to
     Lender based on the criteria set forth below.  In general, Accounts
     shall be Eligible Accounts if:

         (a) such Accounts arise from the actual and bona fide sale and
     delivery of goods by a Loan Party or rendition of services by a
     Loan Party in the ordinary course of its business which transactions are
     completed in accordance with the terms and provisions contained in any
     documents related thereto;

         (b) such Accounts are not unpaid more than sixty (60) days after the
     original due date or more than ninety (90) days after the date of the
     original invoice for them; provided, however, that in connection
     with the Accounts of Advance Auto and certain other Account Debtors of a
     Loan Party approved by Lender from time to time, such Accounts are not
     unpaid more than thirty (30) days after the original due date or one
     hundred twenty (120) days after the original invoice date;

         (c) such Accounts comply with the terms and conditions contained in
     Section 7.2(c) of this Agreement;

         (d) such Accounts do not arise from sales on consignment, guaranteed
     sale, sale and return, sale on approval, or other terms under which
     payment by the account debtor may be conditional or contingent;

         (e) such Accounts are denominated in Dollars, and (i) the chief
     executive office of the account debtor with respect to such Accounts is
     located in the United States of America or Canada; provided,
     such Accounts owed by Canadian account debtors and included as "Eligible
     Accounts" shall not exceed $1,000,000 in the aggregate, or (ii) at
     Lender's option, if either:  (x) the account debtor has delivered to
     Borrower an irrevocable letter of credit issued or confirmed by a bank
     satisfactory to Lender, sufficient to cover such Account, in form and
     substance satisfactory to Lender and, if required by Lender, the
     original of such letter of credit has been delivered to Lender or
     Lender's agent and the issuer thereof notified of the assignment of the
     proceeds of such letter of credit to Lender, or (y) such Account is
     subject to credit insurance payable to Lender issued by an insurer and
     on terms and in an amount acceptable to Lender, or (z) such Account is
     otherwise acceptable in all respects to Lender (subject to such lending
     formula with respect thereto as Lender may determine);

         (f) such Accounts do not consist of progress billings, bill and hold
     invoices or retainage invoices, except as to bill and hold invoices, if
     Lender shall have received an agreement in writing from the account
     debtor, in form and substance satisfactory to Lender, confirming the
     unconditional obligation of the account debtor to take the goods related
     thereto and pay such invoice;

         (g) the account debtor with respect to such Accounts has not
     asserted a counterclaim, defense or dispute and does not have, and
     does not engage in transactions which may give rise to, any right of
     setoff against such Accounts, except in the ordinary course of business
     in connection with the Core Return and Stock Adjustment Policies;
     provided, however, Accounts owed by Daimler Chrysler Corporation shall
     not be deemed Eligible Accounts until Lender receives satisfactory
     evidence of the settlement of any credits in favor of such account
     debtor on the books of Borrower or such account debtor;

         (h) there are no facts, events or occurrences which would impair the
     validity, enforceability or collectability of such Accounts or reduce
     the amount payable or delay payment thereunder;

         (i) such Accounts are subject to the first priority, valid and
     perfected security interest of Lender and any goods giving rise thereto
     are not, and were not at the time of the sale thereof, subject to any
     liens except those permitted in this Agreement;

         (j) neither the account debtor nor any officer or employee of the
     account debtor with respect to such Accounts is an officer, employee or
     agent of or affiliated with any Loan Party directly or indirectly
     by virtue of family membership, ownership, control, management or
     otherwise;

         (k) the account debtors with respect to such Accounts are not any
     foreign government, the United States of America, any State, political
     subdivision, department, agency or instrumentality thereof, unless, if
     the account debtor is the United States of America, any State, political
     subdivision, department, agency or instrumentality thereof,
     upon Lender's request, the Federal Assignment of Claims Act of 1940, as
     amended or any similar State or local law, if applicable, has been
     complied with in a manner satisfactory to Lender;

         (l) there are no proceedings or actions which are threatened or
     pending against the account debtors with respect to such
     Accounts which might result in any material adverse change in any such
     account debtor's financial condition;

         (m) such Accounts of a single account debtor or its affiliates do
     not constitute more than forty (40%) percent of all otherwise
     Eligible Accounts (but the portion of the Accounts not in excess of such
     percentage may be deemed Eligible Accounts); provided, however, such
     Accounts shall be subject to a (i) valid Set-Off Waiver Letter at all
     times in the case of (1) Advance Auto and (2) any other single Account
     Debtor (other than AutoZone) with Accounts constituting more than ten
     (10%) percent of all otherwise Eligible Accounts (but the portion of
     such Accounts not in excess of such ten percent amount may be deemed
     Eligible Accounts without a Set-Off Waiver Letter), and (b) in the case
     of AutoZone, an acknowledgement of the Core Return and Stock Adjustment
     Policies;

         (n) such Accounts are not owed by an account debtor who has Accounts
     unpaid more than ninety (90) days after the date of the original invoice
     for them which constitute more than fifty (50%) percent of the total
     Accounts of such account debtor, or for Advance Auto and certain other
     Account Debtors of a Loan Party approved by Lender from time to time,
     more than thirty (30) days after the original due date or
     one hundred twenty (120) days after the original invoice date, which
     constitute more than fifty (50%) percent of the total Accounts of such
     account debtor;

         (o) such Accounts are owed by account debtors whose total
     indebtedness to the Loan Parties does not exceed the credit limit
     with respect to such account debtors as determined by Lender from time to
     time (but the portion of the Accounts not in excess of such credit limit
     may still be deemed Eligible Accounts); and

         (p) such Accounts are owed by account debtors deemed creditworthy at
     all times by Lender, as reasonably determined by Lender.

 General criteria for Eligible Accounts may be established and revised from
 time to time by Lender in good faith.  Any Accounts which are not Eligible
 Accounts shall nevertheless be part of the Collateral.

               1.15 "Eligible Inventory" shall mean Inventory consisting of
     finished goods held for resale in the ordinary course of the business of
     Borrower or Champion Canada and Purchased Parts and Raw Core
     Materials for such finished goods which are acceptable to Lender based on
     the criteria set forth below.  In general, Eligible Inventory shall not
     include (a) work-in-process; (b) components which are not part of
     finished goods (other than Purchased Parts and Raw Core Materials); (c)
     spare parts for equipment; (d) packaging and shipping materials; (e)
     supplies used or consumed in a Loan Party's business; (f) Inventory at
     premises other than those owned and controlled by a Loan Party, except
     if Lender shall have received an agreement in writing from the person in
     possession of such Inventory and/or the owner or operator of such
     premises in form and substance satisfactory to Lender acknowledging
     Lender's first priority security interest in the Inventory, waiving
     security interests and claims by such person against the Inventory and
     permitting Lender access to, and the right to remain on, the premises so
     as to exercise Lender's rights and remedies and otherwise deal with the
     Collateral; (g) Inventory subject to a security interest or lien in
     favor of any person other than Lender except
     those permitted in this Agreement; (h) bill and hold goods; (i)
     unserviceable, obsolete or slow moving Inventory; (j) Inventory which is
     not subject to the first priority, valid and perfected security interest
     of Lender; (k) returned (except for Raw Core Materials returned to
     Borrower in the ordinary course of business), damaged and/or defective
     Inventory; (l) Inventory purchased or sold on consignment; and (m)
     Inventory not located in the United States of America or Canada;
     provided, the Value of Inventory located in Canada and included as
     "Eligible Inventory" shall not exceed $500,000 in the aggregate.
     General criteria for Eligible Inventory may be established and revised
     from time to time by Lender in good faith. Any Inventory which is not
     Eligible Inventory shall nevertheless be part of the Collateral.

               1.16 "Environmental Laws" shall mean all federal, state,
     district, local and foreign laws, rules, regulations, ordinances, and
     consent decrees relating to health, safety, hazardous substances,
     pollution and environmental matters, as now or at any time hereafter in
     effect, applicable to Borrower's business and facilities (whether or not
     owned by it), including laws relating to emissions, discharges, releases
     or threatened releases of pollutants, contamination, chemicals, or
     hazardous, toxic or dangerous substances, materials or wastes into the
     environment (including, without limitation, ambient air, surface water,
     ground water, land surface or subsurface strata) or otherwise relating
     to the generation, manufacture, processing, distribution, use, treatment,
     storage, disposal, transport or handling of pollutants, contaminants,
     chemicals, or hazardous, toxic or dangerous substances, materials or
     wastes.

               1.17 "Equipment" shall mean all of Borrower's now owned
     and hereafter acquired equipment, machinery, computers and computer
     hardware and software (whether owned or licensed), vehicles, tools,
     furniture, fixtures, all attachments, accessions and property now or
     hereafter affixed thereto or used in connection therewith, and
     substitutions and replacements thereof, wherever located.

               1.18 "ERISA" shall mean the United States Employee
     Retirement Income Security Act of 1974, as the same now exists or may
     hereafter from time to time be amended, modified, recodified or
     supplemented, together with all rules, regulations and interpretations
     thereunder or related thereto.

               1.19 "ERISA Affiliate" shall mean any person required to be
     aggregated with Borrower or any of its Subsidiaries under Sections 414(b),
     414(c), 414(m) or 414(o) of the Code.

               1.20 "Event of Default" shall mean the occurrence or existence
     of any event or condition described in Section 10.1 hereof.

               1.21 "Excess Availability" shall mean the amount, as determined
     by Lender, calculated at any time, equal to: (a) the lesser of (i)
     the amount of the Revolving Loans available to Borrower as of such time
     based on the applicable lending formulas multiplied by the Net Amount of
     Eligible Accounts and Value of Eligible Inventory, as determined by
     Lender, and subject to the sublimits and Availability Reserves from time
     to time established by Lender hereunder and (ii) the Maximum Revolving
     Credit, minus (b) the sum of: (i) the amount of all then outstanding and
     unpaid Obligations (but not including for this purpose the then
     outstanding principal amount of the Term Loans), plus (ii) the aggregate
     amount of all trade payables of Borrower which are more than sixty (60)
     days past due as of such time.

              1.22 "Financing Agreements" shall mean, collectively, this
     Agreement and all notes, guarantees, security agreements and other
     agreements, documents and instruments now or at any time hereafter
     executed and/or delivered by Borrower or any Obligor in connection with
     this Agreement, as the same now exist or may hereafter be amended,
     modified, supplemented, extended, renewed, restated or replaced.

              1.23 "GAAP" shall mean generally accepted accounting
     principles in the United States of America as in effect from time to
     time as set forth in the opinions and pronouncements of the Accounting
     Principles Board and the American Institute of Certified Public
     Accountants and the statements and pronouncements of the Financial
     Accounting Standards Board which are applicable to the circumstances as
     of the date of determination consistently applied, except that, for
     purposes of Section 9.13 hereof, GAAP shall be determined on the basis
     of such principles in effect on the date hereof and consistent with
     those used in the preparation of the audited financial statements
     delivered to Lender prior to the date hereof.

              1.24 "Hazardous Materials" shall mean any hazardous, toxic or
     dangerous substances, materials and wastes, including, without limitation,
     hydrocarbons (including naturally occurring or man-made petroleum and
     hydrocarbons), flammable explosives, asbestos, urea formaldehyde
     insulation, radioactive materials, biological substances, polychlorinated
     biphenyls, pesticides, herbicides and any other kind and/or type of
     pollutants or contaminants (including, without limitation, materials which
     include hazardous constituents), sewage, sludge, industrial slag, solvents
     and/or any other similar substances, materials, or wastes and including
     any other substances, materials or wastes that are or become regulated
     under any Environmental Law (including, without limitation any that are
     or become classified as hazardous or toxic under any Environmental Law).

              1.25 "Information Certificate" shall mean the Information
     Certificate of Borrower constituting Exhibit A hereto containing material
     information with respect to Borrower, its business and assets provided
     by or on behalf of Borrower to Lender in connection with the preparation
     of this Agreement and the other Financing Agreements and the financing
     arrangements provided for herein.

              1.26 "Intangible Assets" shall mean assets that would be
     treated as intangibles under GAAP, including, without limitation,
     copyrights, trademarks, patents, goodwill, leases and franchises.

              1.27 "Inventory" shall mean all of Borrower's now owned and
     hereafter existing or acquired raw materials, work in process, finished
     goods and all other inventory of whatsoever kind or nature, wherever
     located.

              1.28 "Leasehold Mortgage" shall mean the Leasehold
     Mortgage, dated of even date herewith, by Borrower in favor of Lender
     with respect to the Real Property and related assets of Borrower in Hope,
     Arkansas.

              1.29 "Letter of Credit Accommodations" shall mean the letters
     of credit, merchandise purchase or other guaranties which are from time
     to time either (a) issued or opened by Lender for the account of
     Borrower or any Obligor or (b) with respect to which Lender has agreed
     to indemnify the issuer or guaranteed to the issuer the performance by
     Borrower of its obligations to such issuer.

              1.30 "Liquidation Value" shall mean the net orderly
     liquidation value as set forth in the most recent appraisal delivered to
     Lender from time to time pursuant to Section 7.3(d).

              1.31 "Loan Party" shall mean, individually, Borrower or
     Champion Canada, and "Loan Parties" shall mean both Borrower and
     Champion Canada.

              1.32 "Loans" shall mean the Revolving Loans and the Term
     Loans.

              1.33 "Maximum Credit" shall mean the amount of $14,000,000.

              1.34 "Maximum Revolving Credit" shall mean the amount of
     $11,087,000.

              1.35 "Mortgages" shall mean, individually and collectively,
     each of the following (as the same now exist or may hereafter be amended,
     modified, supplemented, extended, renewed, restated or replaced): (a) the
     Leasehold Mortgage, and (b) the Mortgage, dated of even date herewith, by
     Borrower in favor of Lender with respect to the Real Property and related
     assets of Borrower in Beech Creek, Pennsylvania.

              1.36 "NewCo" shall mean a Subsidiary to be formed by Borrower
     after the date hereof for the purpose of facilitating an acquisition.

              1.37 "Net Amount of Eligible Accounts" shall mean the gross
     amount of Eligible Accounts less, without duplication (a) sales, excise or
     similar taxes included in the amount thereof, (b) returns, discounts,
     claims, credits and allowances of any nature at any time issued, owing,
     granted, outstanding, available or claimed with respect thereto and (c)
     the Dilution Reserve.

              1.38 "Obligations" shall mean any and all Revolving Loans,
     the Term Loans, Letter of Credit Accommodations and all other
     obligations, liabilities and indebtedness of every kind, nature and
     description owing by Borrower to Lender and/or its affiliates,
     including principal, interest, charges, fees, costs and expenses,
     however evidenced, whether as principal, surety, endorser, guarantor or
     otherwise, whether arising under this Agreement or otherwise, whether
     now existing or hereafter arising, whether arising before, during or
     after the initial or any renewal term of this Agreement or after the
     commencement of any case with respect to Borrower under the United
     States Bankruptcy Code or any similar statute (including, without
     limitation, the payment of interest and other amounts which would
     accrue and become due but for the commencement of such case), whether
     direct or indirect, absolute or contingent, joint or several, due or
     not due, primary or secondary, liquidated or unliquidated, secured or
     unsecured, and however acquired by Lender.

              1.39 "Obligor" shall mean any guarantor, endorser, acceptor,
     surety or other person liable on or with respect to the Obligations or
     who is the owner of any property which is security for the Obligations,
     other than Borrower.

              1.40 "Payment Account" shall have the meaning set forth in
     Section 6.3 hereof.

              1.41 "Person" or "person" shall mean any individual, sole
     proprietorship, partnership, corporation (including, without limitation,
     any corporation which elects subchapter S status under the Internal
     Revenue Code of 1986, as amended), business trust, unincorporated
     association, joint stock corporation, trust, joint venture or other
     entity or any government or any agency or instrumentality or political
     subdivision thereof.

              1.42 "Prime Rate" shall mean the rate from time to time
     publicly announced by First Union National Bank, or its successors, at
     its office in Charlotte, North Carolina, as its prime rate, whether or
     not such announced rate is the best rate available at such bank.

              1.43 "Purchased Parts" shall mean new raw materials
     purchased by Borrower in the ordinary course of its business to be used
     in the production of finished goods.

              1.44 "Raw Core Materials" shall mean used core units that have
     been acquired by the Borrower as a result of sales or trade-ins from its
     customers or other persons, which are in rebuildable condition and are
     to be refurbished into finished goods of the Borrower, including used
     carburetors, diesel fuel injectors, constant velocity drive assemblies,
     water pumps, clutches, starters and alternators.

              1.45 "Real Property" shall mean all now owned and hereafter
     acquired real property of Borrower, including leasehold interests,
     together with all buildings, structures, and other improvements located
     thereon and all licenses, easements and appurtenances relating thereto,
     wherever located, including without limitation, the real property and
     related assets more particularly described in the Mortgages and located
     in Hope, Arkansas and Beech Creek, Pennsylvania.

              1.46 "Records" shall mean all of Borrower's present and future
     books of account of every kind or nature, purchase and sale agreements,
     invoices, ledger cards, bills of lading and other shipping evidence,
     statements, correspondence, memoranda, credit files and other data
     relating to the Collateral or any account debtor, together with the
     tapes, disks, diskettes and other data and software storage media and
     devices, file cabinets or containers in or on which the foregoing are
     stored (including any rights of Borrower with respect to the foregoing
     maintained with or by any other person).

              1.47 "Revolving Loan Interest Rate" shall mean a rate of three-
     quarters of one percent (0.75%) per annum in excess of the Prime Rate.

              1.48 "Revolving Loans" shall mean the loans now or hereafter
     made by Lender to or for the benefit of Borrower on a revolving basis
     (involving advances, repayments and readvances) as set forth in Section
     2.1 hereof.

              1.49 "Set-Off Waiver Letter" shall mean a letter executed by
     an account debtor of Borrower or any Obligor in favor of Lender, pursuant
     to which such account debtor (a) waives all rights of set-off and
     recoupment against Borrower or such Obligor, other than rights of
     set-off in the ordinary course of business pursuant to the Core Return
     and Stock Adjustment Policies, and (b) as appropriate, acknowledges the
     Core Return and Stock Adjustment Policies, which letter shall be in form
     and substance acceptable to Lender in its sole discretion.

              1.50 "Subsidiary" shall mean, with respect to any Person, any
     corporation, partnership, limited liability company, association or other
     business entity of which fifty percent (50%) or more of the total voting
     power of shares of stock (or equivalent ownership or controlling interest)
     entitled (without regard to the occurrence of any contingency) to vote
     in the election of directors, managers or trustees thereof is at the
     time owned or controlled, directly or indirectly, by that Person or one
     or more of the other Subsidiaries of that Person or a combination thereof.

              1.51 "Term Loan A" shall mean the term loan made by
     Lender to Borrower on the closing date as provided in Section 2.3(a).

              1.52 "Term Loan B" shall mean the term loan made by Lender
     to Borrower on the closing date as provided in Section 2.3(b).

              1.53 "Term Loan Interest Rate" shall mean a rate of one
     percent (1.0%) per annum in excess of the Prime Rate.

              1.54 "Term Loans" shall mean the Term Loan A and Term
     Loan B.

              1.55 "Value" shall mean, as determined by Lender in good
     faith, with respect to Inventory, the lower of (a) cost computed on a
     first-in-first-out basis in accordance with GAAP or (b) market value.

              1.56 "Western Rebuilders" shall mean Western Rebuilders,
     Inc., a California corporation.

  SECTION 2.  CREDIT FACILITIES

         2.1 Revolving Loans.

              (a) Subject to, and upon the terms and conditions
     contained herein, Lender agrees to make Revolving Loans to Borrower
     from time to time in amounts requested by Borrower up to  the amount
     equal to the sum of:

                 (i) eighty-five (85%) percent of the Net Amount of Eligible
                     Accounts, plus

                 (ii) the lesser of:  (A) the sum of (1) the lesser of (x)
                     seventy-six (76%) percent of the Value of Eligible
                     Inventory consisting of finished goods, or (y) 90% of the
                     Liquidation Value of Eligible Inventory consisting of
                     finished goods, plus (2) the lesser of (x) twenty-four
                     (24%) percent of the Value of Eligible Inventory
                     consisting of Purchased Parts, or (y) 90% of the
                     Liquidation Value of Eligible Inventory consisting of
                     Purchased Parts, plus (3) the lowest of (x) thirty-three
                     (33%) percent of the Value of Eligible Inventory
                     consisting of Raw Core Materials, (y) 90% of the
                     Liquidation Value of Eligible Inventory consisting of
                     Raw Core Materials, or (z) $2,000,000; or (B)
                     $6,000,000, less

                  (iii) any Availability Reserves.

              (b) Lender may, in its discretion, from time to time,
     upon not less than five (5) days prior notice to Borrower, (i) reduce the
     lending formula with respect to Eligible Accounts to the extent that
     Lender determines in good faith that: (A) the Dilution with respect to
     the Accounts for any period (based on the ratio of (1) the aggregate
     amount of reductions in Accounts other than as a result of payments in
     cash to (2) the aggregate amount of total sales) has increased in any
     material respect or may be reasonably anticipated to increase in any
     material respect above historical levels, or (B) the general
     creditworthiness of account debtors has declined or (ii) reduce the
     lending formula(s) with respect to Eligible Inventory to
     the extent that Lender determines that: (A) the number of days of the
     turnover of the Inventory for any period has changed in any material
     respect or (B) the Liquidation Value of the Eligible Inventory, or any
     category thereof, has decreased, or (C) the nature and quality of the
     Inventory has deteriorated.  In determining whether to reduce the
     lending formula(s), Lender may consider events, conditions,
     contingencies or risks which are also considered in determining Eligible
     Accounts, Eligible Inventory or in establishing Availability Reserves.
     Additionally, Lender may, in its discretion, take an additional reserve
     against the advance amount in connection with Eligible Accounts if
     Lender determines that the unapplied credits and chargebacks against
     Accounts on Borrower's books are not reconciled in a timely manner on or
     after the date hereof.

              (c) Except in Lender's discretion, the aggregate
     amount of the Loans and the Letter of Credit Accommodations outstanding
     at any time shall not exceed the Maximum Credit, and the aggregate amount
     of the Revolving Loans and the Letter of Credit Accommodations
     outstanding at any time shall not exceed the Maximum Revolving Credit.
     In the event that the outstanding amount of any component of the Loans,
     or the aggregate amount of the outstanding Loans and Letter of Credit
     Accommodations, exceed the amounts available under the lending
     formulas, the sublimits for Letter of Credit Accommodations set forth in
     Section 2.2(c) or the Maximum Credit or Maximum Revolving Credit, as
     applicable, such event shall not limit, waive or otherwise affect any
     rights of Lender in that circumstance or on any future occasions and
     Borrower shall, upon demand by Lender, which may be made at any time or
     from time to time, immediately repay to Lender the entire amount of any
     such excess(es) for which payment is demanded.

  2.2 Letter of Credit Accommodations.

              (a) Subject to, and upon the terms and conditions
     contained herein, at the request of Borrower, Lender agrees to provide or
     arrange for Letter of Credit Accommodations for the account of Borrower
     containing terms and conditions acceptable to Lender and the issuer
     thereof. Any payments made by Lender to any issuer thereof and/or related
     parties in connection with the Letter of Credit Accommodations shall
     constitute additional Revolving Loans to Borrower pursuant to this
     Section 2.

              (b) In addition to any charges, fees or expenses
     charged by any bank or issuer in connection with the Letter of Credit
     Accommodations, Borrower shall pay to Lender a letter of credit fee at a
     rate equal to two (2.0%) percent per annum on the daily outstanding
     balance of the Letter of Credit Accommodations for the immediately
     preceding month (or part thereof), payable in arrears as of the first day
     of each succeeding month.  Such letter of credit fee shall be calculated
     on the basis of a three hundred sixty (360) day year and actual days
     elapsed and the obligation of Borrower to pay such fee shall survive the
     termination or non-renewal of this Agreement.

              (c) No Letter of Credit Accommodations shall be available unless
     on the date of the proposed issuance of any Letter of Credit
     Accommodations, the Revolving Loans available to Borrower (subject to
     the Maximum Revolving Credit and any Availability Reserves) are equal to
     or greater than an amount equal to one hundred (100%) percent of the face
     amount thereof and all other commitments and obligations made or incurred
     by Lender with respect thereto.  Effective on the issuance of each Letter
     of Credit Accommodation, the amount of Revolving Loans which might
     otherwise be available to Borrower shall be reduced by the applicable
     amount set forth in this Section 2.2(c).

              (d) Except in Lender's discretion, the amount of all
     outstanding Letter of Credit Accommodations and all other commitments
     and obligations made or incurred by Lender in connection therewith shall
     not at any time exceed $1,750,000.  At any time an Event of Default exists
     or has occurred and is continuing, upon Lender's request, Borrower will
     either furnish cash collateral to secure the reimbursement obligations to
     the issuer in connection with any Letter of Credit Accommodations or
     furnish cash collateral to Lender for the Letter of Credit
     Accommodations, and in either case, the Revolving Loans otherwise
     available to Borrower shall not be reduced as provided in Section 2.2(c)
     to the extent of such cash collateral.

              (e) Borrower shall indemnify and hold Lender harmless from and
     against any and all losses, claims, damages, liabilities,
     costs and expenses which Lender may suffer or incur in connection with
     any Letter of Credit Accommodations and any documents, drafts or
     acceptances relating thereto, including, but not limited to, any losses,
     claims, damages, liabilities, costs and expenses due to any action taken
     by any issuer or correspondent with respect to any Letter of Credit
     Accommodation.  Borrower assumes all risks with respect to the acts or
     omissions of the drawer under or beneficiary of any Letter of Credit
     Accommodation and for such purposes the drawer or beneficiary shall be
     deemed Borrower's agent.  Borrower assumes all risks for, and agrees to
     pay, all foreign, Federal, State and local taxes, duties and levies
     relating to any goods subject to any Letter of Credit Accommodations or
     any documents, drafts or acceptances thereunder.  Borrower hereby
     releases and holds Lender harmless from and against any acts, waivers,
     errors, delays or omissions, whether caused by Borrower, by any issuer or
     correspondent or otherwise with respect to or relating to any Letter of
     Credit Accommodation.  The provisions of this Section 2.2(e) shall
     survive the payment of Obligations and the termination or non-renewal of
     this Agreement.

              (f) Nothing contained herein shall be deemed or
     construed to grant Borrower any right or authority to pledge the credit
     of Lender in any manner.  Lender shall have no liability of any kind with
     respect to any Letter of Credit Accommodation provided by an issuer other
     than Lender unless Lender has duly executed and delivered to such issuer
     the application or a guarantee or indemnification in writing with respect
     to such Letter of Credit Accommodation.  Borrower shall be bound by any
     interpretation made in good faith by Lender, or any other issuer or
     correspondent under or in connection with any Letter of Credit
     Accommodation or any documents, drafts or acceptances thereunder,
     notwithstanding that such interpretation may be inconsistent with any
     instructions of Borrower.  Lender shall have the sole and exclusive right
     and authority to, and Borrower shall not: (i) at any time an Event of
     Default exists or has occurred and is continuing, (A) approve or resolve
     any questions of non-compliance of documents, (B) give any instructions
     as to acceptance or rejection of any documents or goods or (C) execute
     any and all applications for steamship or airway guaranties, indemnities
     or delivery orders, and (ii) at all times, (A) grant any extensions of
     the maturity of, time of payment for, or time of presentation of, any
     drafts, acceptances, or documents, and (B) agree to any amendments,
     renewals, extensions, modifications, changes or cancellations of any of
     the terms or conditions of any of the applications, Letter of Credit
     Accommodations, or documents, drafts or acceptances thereunder or any
     letters of credit included in the Collateral.  Lender may take such
     actions either in its own name or in Borrower's name.

              (g) Any rights, remedies, duties or obligations
     granted or undertaken by Borrower to any issuer or correspondent in any
     application for any Letter of Credit Accommodation, or any other
     agreement in favor of any issuer or correspondent relating to any Letter
     of Credit Accommodation, shall be deemed to have been granted or
     undertaken by Borrower to Lender.  Any duties or obligations undertaken
     by Lender to any issuer or correspondent in any application for any
     Letter of Credit Accommodation, or any other agreement by Lender in
     favor of any issuer or correspondent relating to any Letter of Credit
     Accommodation, shall be deemed to have been undertaken by Borrower to
     Lender and to apply in all respects to Borrower.

  2.3 Term Loans.

              (a)	Lender is making a Term Loan A to Borrower in
     the original principal amount of $815,000.  The Term Loan A is (i)
     evidenced by a Term Loan A Promissory Note in such original principal
     amount duly executed and delivered by Borrower to Lender concurrently
     herewith; (ii) to be repaid, together with interest and other amounts,
     in accordance with this Agreement, the Term Loan A Promissory Note, and
     the other Financing Agreements and (iii) secured by all of the
     Collateral.

              (b)	 Lender is making a Term Loan B to Borrower in
     the original principal amount of $2,098,000.  The Term Loan B is (i)
     evidenced by a Term Loan B Promissory Note in such original principal
     amount duly executed and delivered by Borrower to Lender concurrently
     herewith; (ii) to be repaid, together with interest and other amounts,
     in accordance with this Agreement, the Term Loan B Promissory Note, and
     the other Financing Agreements and (iii) secured by all of the
     Collateral.

  2.4 Availability Reserves.

              All Revolving Loans otherwise available to Borrower pursuant to
     the lending formulas and subject to the Maximum Revolving Credit and
     other applicable limits hereunder shall be subject to Lender's continuing
     right to establish and revise Availability Reserves.

  SECTION 3.  INTEREST AND FEES

  3.1 Interest.

              (a) Borrower shall pay to Lender interest on the
     outstanding principal amount of the non-contingent Obligations at the
     rate of (i) the Term Loan Interest Rate with respect to the Term Loans,
     and (ii) the Revolving Loan Interest Rate with respect to the Revolving
     Loans and all other non-contingent Obligations, except that Borrower
     shall pay to Lender interest, at Lender's option, without notice, at a
     rate of interest which is four percent (4.0%)  per annum in excess of the
     otherwise applicable interest rate: (i) on the non-contingent Obligations
     for the period from and after the date of termination or non-renewal
     hereof, or the date of the occurrence of an Event of Default, and for so
     long as such Event of Default is continuing as determined by Lender and
     until such time as Lender has received full and final payment of all such
     Obligations (notwithstanding entry of any judgment against Borrower) and
     (ii) on the Revolving Loans at any time outstanding in excess of the
     amounts available to Borrower under Section 2 (whether or not such
     excess(es), arise or are made with or without Lender's knowledge or
     consent and whether made before or after an Event of Default).  All
     interest accruing hereunder on and after the occurrence of any of the
     events referred to in Sections 3.1(a)(i) or 3.1(a)(ii) above shall be
     payable on demand.

              (b) Interest shall be payable by Borrower to Lender
     monthly in arrears not later than the first day of each calendar month
     and shall be calculated on the basis of a three hundred sixty (360) day
     year and actual days elapsed.  The interest rate shall increase or
     decrease by an amount equal to each increase or decrease in the Prime
     Rate effective on the first day of the month after any change in such
     Prime Rate is announced based on the Prime Rate in effect on the last
     day of the month in which any such change occurs.  In no event shall
     charges constituting interest payable by Borrower to Lender exceed the
     maximum amount or the rate permitted under any applicable law or
     regulation, and if any part or provision of this Agreement is in
     contravention of any such law or regulation, such part or provision
     shall be deemed amended to conform thereto.

  3.2 Closing Fee.

              Borrower shall pay to Lender as a closing fee the amount of
     $105,000, which shall be fully earned as of and payable on the date
     hereof.

  3.3 Facility Fee.

              Intentionally Omitted.

  3.4 Servicing Fee.

              Borrower shall pay to Lender monthly a servicing fee in an
     amount equal to $2,000 in respect of Lender's services for each month
     (or part thereof) while this Agreement remains in effect and for so long
     thereafter as any of the Obligations are outstanding, which fee shall be
     fully earned as of and payable in advance on the date hereof and on
     the first day of each month hereafter.

  3.5 Unused Line Fee.

              Borrower shall pay to Lender monthly an unused line fee at a
     rate equal to three-eighths (.375%) of one percent per annum calculated
     upon the amount by which the Maximum Revolving Credit exceeds the average
     daily principal balance of the outstanding Revolving Loans and Letter of
     Credit Accommodations during the immediately preceding month (or part
     thereof) while this Agreement is in effect and for so long thereafter as
     any of the Obligations are outstanding, which fee shall be payable on the
     first day of each month in arrears.

  SECTION 4.  CONDITIONS PRECEDENT

  4.1 Conditions Precedent to Initial Loans and Letter of Credit
      Accommodations.

              Each of the following is a condition precedent to Lender
     making the initial Loans and providing the initial Letter of Credit
     Accommodations hereunder:

              (a) Lender shall have received, in form and substance
     satisfactory to Lender, all releases, terminations and such other
     documents as Lender may request to evidence and effectuate the
     termination by the existing lender or lenders to Borrower and Obligors of
     their respective financing arrangements with Borrower and each Obligor
     and the termination and release by it or them, as the case may be, of any
     interest in and to any assets and properties of Borrower and each Obligor,
     duly authorized, executed and delivered by it or each of them, including,
     but not limited to, (i) UCC termination statements for all UCC financing
     statements previously filed by it or any of them or their predecessors,
     as secured party and Borrower or any Obligor, as debtor and (ii)
     satisfactions and discharges of any mortgages, deeds of trust or deeds to
     secure debt by Borrower or any Obligor in favor of such existing lender
     or lenders, in form acceptable for recording in the appropriate
     government office;

              (b) Lender shall have received evidence, in form and substance
     satisfactory to Lender, that Lender has valid perfected and first
     priority security interests in and liens upon the Collateral and any
     other property which is intended to be security for the Obligations
     (including all assets of Champion Canada and each of Borrower's other
     Subsidiaries (other than Western Rebuilders) and all capital stock owned
     by Borrower in each of Borrower's Subsidiaries) or the liability of any
     Obligor in respect thereof, subject only to the security interests and
     liens permitted herein or in the other Financing Agreements;

              (c) all requisite corporate action and proceedings in
     connection with this Agreement and the other Financing Agreements shall
     be satisfactory in form and substance to Lender, and Lender shall have
     received all information and copies of all documents, including, without
     limitation, records of requisite corporate action and proceedings which
     Lender may have requested in connection therewith, such documents where
     requested by Lender or its counsel to be certified by appropriate
     corporate officers or governmental authorities;

              (d) no material adverse change shall have occurred in the
     assets, business or prospects of Borrower since the date of Lender's
     latest field examination and no change or event shall have occurred
     which would impair the ability of Borrower or any Obligor to perform its
     obligations hereunder or under any of the other Financing Agreements to
     which it is a party or of Lender to enforce the Obligations or realize
     upon the Collateral;

              (e) Lender shall have received appraisals of the Real
     Property, Equipment and Inventory, in form and substance acceptable to
     Lender;

              (f) Lender shall have received a copy of the management letter
     issued to Borrower by its accountants as of the period ending December
     31, 1999, in form and substance acceptable to Lender;

              (g) Lender shall have completed a field review of the Records
     and such other information with respect to the Collateral as Lender may
     require to determine the amount of Revolving Loans available
     to Borrower, the results of which shall be satisfactory to Lender, not
     more than three (3) business days prior to the date hereof;

              (h) the Excess Availability as determined by Lender, as of the
     date hereof, shall be not less than $1,200,000 after giving effect to
     the initial Loans made or to be made and Letter of Credit Accommodations
     issued or to be issued in connection with the initial transactions
     hereunder;

              (i) Lender shall have received environmental audits
     of Borrower's plants and the Real Property conducted by an independent
     environmental engineering firm acceptable to Lender, and in form, scope
     and methodology satisfactory to Lender, confirming (i) Borrower is in
     compliance with all material applicable Environmental Laws and (ii) the
     absence of any material environmental problems;

              (j) Lender shall have received, in form and substance
     satisfactory to Lender, a valid and effective title insurance policy
     issued by a company and agent acceptable to Lender (i) insuring the
     priority, amount and sufficiency of the Mortgages, (ii) insuring against
     matters that would be disclosed by surveys and (iii) containing any
     legally available endorsements, assurances or affirmative coverage
     requested by Lender for protection of its interests;

              (k) Lender shall have received, in form and substance
     satisfactory to Lender, all consents, waivers, acknowledgments and
     other agreements from third persons which Lender may deem necessary or
     desirable in order to permit, protect and perfect its security interests
     in and liens upon the Collateral or to effectuate the provisions or
     purposes of this Agreement and the other Financing Agreements, including,
     without limitation, a Set-Off Waiver Letter executed by each of Advance
     Auto and John Deere and Co., an acknowledgement of the Core Return and
     Stock Adjustment Policies by AutoZone, acknowledgements by lessors,
     mortgagees and warehousemen of Lender's security interests in the
     Collateral, waivers by such persons of any security interests, liens or
     other claims by such persons to the Collateral and agreements permitting
     Lender access to, and the right to remain on, the premises to exercise
     its rights and remedies and otherwise deal with the Collateral;

              (l) Lender shall have received evidence of insurance
     and loss payee endorsements required hereunder and under the other
     Financing Agreements, in form and substance satisfactory to Lender, and
     certificates of insurance policies and/or endorsements naming Lender as
     loss payee;

              (m) Lender shall have received, in form and substance
     satisfactory to Lender, such opinion letters of counsel to
     Borrower and its Subsidiaries with respect to the Financing Agreements
     and  such other matters as Lender may request (including an opinion
     letter of Canadian counsel to Borrower and Champion Canada and opinion
     letters of local counsel to Borrower in each jurisdiction where any
     Mortgage is to be recorded);

              (n) Lender shall have received a duly executed pledge agreement
     in favor of Lender, delivered by Borrower with respect to its equity
     interests in each Subsidiary of Borrower;

              (o) Lender shall have received a duly executed Guaranty and
     Security Agreement delivered by Champion Canada and each other Subsidiary
     of Borrower (other than Western Rebuilders) in favor of Lender;

              (p) Lender shall have received a report from Borrower of core
     return eligibility status by customer, units and dollars, as of the date
     hereof; and

              (q) the other Financing Agreements and all instruments and
     documents hereunder and thereunder shall have been duly executed and
     delivered to Lender, in form and substance satisfactory to Lender.

  4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations.

              Each of the following is an additional condition precedent to
     Lender making Loans and/or providing Letter of Credit Accommodations to
     Borrower, including the initial Loans and Letter of Credit Accommodations
     and any future Loans and Letter of Credit Accommodations:

              (a) all representations and warranties contained herein and in
     the other Financing Agreements shall be true and correct in all material
     respects with the same effect as though such representations and
     warranties had been made on and as of the date of the making of each such
     Loan or providing each such Letter of Credit Accommodation and after
     giving effect thereto; and

              (b) no Event of Default and no event or condition which, with
     notice or passage of time or both, would constitute an Event of Default,
     shall exist or have occurred and be continuing on and as of the date
     of the making of such Loan or providing each such Letter of Credit
     Accommodation and after giving effect thereto.

  SECTION 5.  GRANT OF SECURITY INTEREST

              To secure payment and performance of all Obligations,
     Borrower hereby grants to Lender a continuing security interest in, a
     lien  upon, and a right of set off against, and hereby assigns to Lender
     as security, the following property and interests in property, whether
     now owned or hereafter acquired or existing, and wherever located
     (collectively, the "Collateral"):

  5.1 Accounts;

  5.2  all present and future contract rights, general intangibles
     (including, but not limited to, tax and duty refunds, registered and
     unregistered patents, trademarks, service marks, copyrights, trade names,
     applications for the foregoing, trade secrets, goodwill, processes,
     drawings, blueprints, customer lists, licenses, whether as licensor or
     licensee, choses in action and other claims and existing and future
     leasehold interests in equipment, real estate and fixtures), chattel
     paper, documents, instruments, investment property, letters of credit,
     bankers' acceptances and guaranties;

  5.3  all present and future monies, securities, credit balances, deposits,
     deposit accounts and other property of Borrower now or hereafter held or
     received by or in transit to Lender or its affiliates or at any other
     depository or other institution from or for the account of Borrower,
     whether for safekeeping, pledge, custody, transmission, collection or
     otherwise, and all present and future liens, security interests, rights,
     remedies, title and interest in, to and in respect of Accounts and other
     Collateral, including, without limitation, (a) rights and remedies under
     or relating to guaranties, contracts of suretyship, letters of credit and
     credit and other insurance related to the Collateral, (b) rights of
     stoppage in transit, replevin, repossession, reclamation and other rights
     and remedies of an unpaid vendor, lienor or secured party, (c) goods
     described in invoices, documents, contracts or instruments with respect
     to, or otherwise representing or evidencing, Accounts or other Collateral,
     including, without limitation, returned, repossessed and reclaimed goods,
     and (d) deposits by and property of account debtors or other persons
     securing the obligations of account debtors;

  5.4 Inventory;

  5.5 Equipment;

  5.6 Real Property;

  5.7 Records; and

  5.8  all products and proceeds of the foregoing, in any form,
     including, without limitation, insurance proceeds and all claims against
     third parties for loss or damage to or destruction of any or all of the
     foregoing.

SECTION 6.  COLLECTION AND ADMINISTRATION

  6.1 Borrower's Loan Account.

              Lender shall maintain one or more loan account(s) on its books
     in which shall be recorded (a) all Loans, Letter of Credit Accommodations
     and other Obligations and the Collateral, (b) all payments made by or
     on behalf of Borrower and (c) all other appropriate debits and credits
     as provided in this Agreement, including, without limitation, fees,
     charges, costs, expenses and interest.  All entries in the loan
     account(s) shall be made in accordance with Lender's customary practices
     as in effect from time to time.

  6.2 Statements.

              Lender shall render to Borrower each month a statement setting
     forth the balance in the Borrower's loan account(s) maintained by Lender
     for Borrower pursuant to the provisions of this Agreement, including
     principal, interest, fees, costs and expenses.  Each such statement shall
     be subject to subsequent adjustment by Lender but shall, absent manifest
     errors or omissions, be considered correct and deemed accepted by
     Borrower and conclusively binding upon Borrower as an account stated
     except to the extent that Lender receives a written notice from Borrower
     of any specific exceptions of Borrower thereto within thirty (30) days
     after the date such statement has been mailed by Lender.  Until such
     time as Lender shall have rendered to Borrower a written statement as
     provided above, the balance in Borrower's loan account(s) shall be
     presumptive evidence of the amounts due and owing to Lender by Borrower.

  6.3 Collection of Accounts.

              (a) Borrower shall establish and maintain, at its expense,
     blocked accounts or lockboxes and related blocked accounts (in
     either case, "Blocked Accounts"), as Lender may specify, with such banks
     as are acceptable to Lender into which Borrower shall promptly deposit
     and direct its account debtors to directly remit all payments on
     Accounts and all payments constituting proceeds of Inventory or other
     Collateral in the identical form in which such payments are made,
     whether by cash, check or other manner.  The banks at which the Blocked
     Accounts are established shall enter into an agreement, in form and
     substance satisfactory to Lender, providing that all items received or
     deposited in the Blocked Accounts are the property of Lender, that the
     depository bank has no lien upon, or right to setoff against, the
     Blocked Accounts, the items received for deposit therein, or the funds
     from time to time on deposit therein and that the depository bank will
     wire, or otherwise transfer, in immediately available funds, on a daily
     basis, all funds received or deposited into the Blocked Accounts to such
     bank account of Lender as Lender may from time to time designate for
     such purpose ("Payment Account").  Borrower agrees that all payments
     made to such Blocked Accounts or other funds received and collected by
     Lender, whether on the Accounts or as proceeds of Inventory or other
     Collateral or otherwise shall be the property of Lender.

              (b) For purposes of calculating interest on the
     Obligations, such payments or other funds received will be applied
     (conditional upon final collection) to the Obligations one (1) business
     day following the date of receipt of immediately available funds by
     Lender in the Payment Account.  For purposes of calculating the amount
     of the Revolving Loans available to Borrower such payments will be
     applied (conditional upon final collection) to the Obligations on the
     business day of receipt by Lender in the Payment Account, if such
     payments are received within sufficient time (in accordance with
     Lender's usual and customary practices as in effect from time to time)
     to credit Borrower's loan account on such day, and if not, then on the
     next business day.

              (c) Borrower and all of its affiliates, subsidiaries,
     shareholders, directors, employees or agents shall, acting as trustee for
     Lender, receive, as the property of Lender, any monies, checks, notes,
     drafts or any other payment relating to and/or proceeds of Accounts or
     other Collateral which come into their possession or under their control
     and immediately upon receipt thereof, shall deposit or cause the same to
     be deposited in the Blocked Accounts, or remit the same or cause the same
     to be remitted, in kind, to Lender.  In no event shall the same be
     commingled with Borrower's own funds.  Borrower agrees to reimburse
     Lender on demand for any amounts owed or paid to any bank at which a
     Blocked Account is established or any other bank or person involved in
     the transfer of funds to or from the Blocked Accounts arising out of
     Lender's payments to or indemnification of such bank or person.  The
     obligation of Borrower to reimburse Lender for such amounts pursuant to
     this Section 6.3 shall survive the termination or non-renewal of this
     Agreement.

  6.4 Payments.

              All Obligations shall be payable to the Payment Account as
     provided in Section 6.3 or such other place as Lender may designate from
     time to time.  Lender may apply payments received or collected from
     Borrower or for the account of Borrower (including, without limitation,
     the monetary proceeds of collections or of realization upon any
     Collateral) to such of the Obligations, whether or not then due, in such
     order and manner as Lender determines.  At Lender's option, all principal,
     interest, fees, costs, expenses and other charges provided for in this
     Agreement or the other Financing Agreements may be charged directly to
     the loan account(s) of Borrower.  Borrower shall make all payments to
     Lender on the Obligations free and clear of, and without deduction or
     withholding for or on account of, any setoff, counterclaim, defense,
     duties, taxes, levies, imposts, fees, deductions, withholding,
     restrictions or conditions of any kind.  If after receipt of any payment
     of, or proceeds of Collateral applied to the payment of, any of the
     Obligations, Lender is required to surrender or return such payment or
     proceeds to any Person for any reason, then the Obligations intended to
     be satisfied by such payment or proceeds shall be reinstated and continue
     and this Agreement shall continue in full force and effect as if such
     payment or proceeds had not been received by Lender.  Borrower shall be
     liable to pay to Lender, and does hereby indemnify and hold Lender
     harmless for the amount of any payments or proceeds surrendered or
     returned.  This Section 6.4 shall remain effective notwithstanding any
     contrary action which may be taken by Lender in reliance upon such
     payment or proceeds.  This Section 6.4 shall survive the payment of the
     Obligations and the termination or non-renewal of this Agreement.

  6.5 Authorization to Make Loans.

              Lender is authorized to make the Loans and provide the Letter
     of Credit Accommodations based upon telephonic or other instructions
     received from anyone purporting to be an officer of Borrower or other
     authorized person or, at the discretion of Lender, if such Loans are
     necessary to satisfy any Obligations.  All requests for Loans or Letter
     of Credit Accommodations hereunder shall specify the date on which the
     requested advance is to be made or Letter of Credit Accommodations
     established (which day shall be a business day) and the amount of the
     requested Loan.  Requests received after 11:00 a.m. Atlanta, Georgia time
     on any day shall be deemed to have been made as of the opening of
     business on the immediately following business day.  All Loans and
     Letter of Credit Accommodations under this Agreement shall be
     conclusively presumed to have been made to, and at the request of and
     for the benefit of, Borrower when deposited to the credit of Borrower or
     otherwise disbursed or established in accordance with the instructions
     of Borrower or in accordance with the terms and conditions of this
     Agreement.

  6.6 Use of Proceeds.

              Borrower shall use the initial proceeds of the Loans provided by
     Lender to Borrower hereunder only for: (a) payments to each of the
     persons listed in the disbursement direction letter furnished by Borrower
     to Lender on or about the date hereof and (b) costs, expenses and fees in
     connection with the preparation, negotiation, execution and delivery of
     this Agreement and the other Financing Agreements.  All other Loans made
     or Letter of Credit Accommodations provided by Lender to Borrower
     pursuant to the provisions hereof shall be used by Borrower only for
     general operating, working capital and other proper corporate purposes of
     Borrower not otherwise prohibited by the terms hereof.  None of the
     proceeds will be used, directly or indirectly, for the purpose of
     purchasing or carrying any margin security or for the purposes of
     reducing or retiring any indebtedness which was originally incurred to
     purchase or carry any margin security or for any other purpose which
     might cause any of the Loans to be considered a "purpose credit" within
     the meaning of Regulation G of the Board of Governors of the Federal
     Reserve System, as amended.

  SECTION 7.  COLLATERAL REPORTING AND COVENANTS

  7.1 Collateral Reporting.

             Borrower shall provide Lender with the following documents in a
     form satisfactory to Lender: (a) on a daily basis, a schedule of sales
     made, credits issued and cash received; (b) on a weekly basis or more
     frequently as Lender may request, (i) perpetual inventory reports, and
     (ii) inventory reports by location, class and category; (c) on a monthly
     basis or more frequently as Lender may request, (i) agings
     of accounts payable, (ii) agings of accounts receivable (together with a
     reconciliation to the previous month's aging and general ledger), (iii)
     reports of core return eligibility status by customer, units and dollars,
     with respect to customers representing Borrower's seven (7) largest
     customers ranked by sales volume and customers constituting more than
     ten percent (10%) of Eligible Accounts as of the date hereof, for the
     previous twenty-four (24) or twelve (12) month period, as applicable in
     connection with such customer's Core Return and Stock Adjustment Policies
     (with an acknowledgment from any such customer if requested by Lender),
     and (iv) copies of core bank statements; (d) upon Lender's request, (i)
     copies of customer statements and credit memos, remittance advices and
     reports, and copies of deposit slips and bank statements, (ii) copies of
     shipping and delivery documents, and (iii) copies of purchase orders,
     invoices and delivery documents for Inventory and Equipment acquired by
     Borrower; and (e) such other reports as to the Collateral as Lender shall
     request from time to time; provided, however, that so long as no Event of
     Default and no event or condition which, with notice or the passage of
     time or both, would constitute an Event of Default, shall exist, Borrower
     shall be liable for the cost and expense of no more than four (4)
     collateral audits in any twelve (12) month period.  If any of Borrower's
     records or reports of the Collateral are prepared or maintained by an
     accounting service, contractor, shipper or other agent, Borrower hereby
     irrevocably authorizes such service, contractor, shipper or agent to
     deliver such records, reports, and related documents to Lender and to
     follow Lender's instructions with respect to further services at any time
     that an Event of Default exists or has occurred and is continuing.

  7.2 Accounts Covenants.

             (a) Borrower shall notify Lender promptly of: (i)
     any material delay in Borrower's performance of any of its obligations to
     any account debtor or the assertion of any claims, offsets, defenses or
     counterclaims by any account debtor, or any disputes with account
     debtors, or any settlement, adjustment or compromise thereof, (ii) all
     material adverse information relating to the financial condition of any
     account debtor and (iii) any event or circumstance which, to Borrower's
     knowledge would cause Lender to consider any then existing Accounts as
     no longer constituting Eligible Accounts.  No credit, discount, allowance
     or extension or agreement for any of the foregoing shall be granted to
     any account debtor without Lender's consent, except in the ordinary
     course of Borrower's business in accordance with practices and policies
     previously disclosed in writing to Lender.  So long as no Event of
     Default exists or has occurred and is continuing, Borrower shall settle,
     adjust or compromise any claim, offset, counterclaim or dispute with any
     account debtor.  At any time that an Event of Default exists or has
     occurred and is continuing, Lender shall, at its option, have the
     exclusive right to settle, adjust or compromise any claim, offset,
     counterclaim or dispute with account debtors or grant any credits,
     discounts or allowances.

             (b) Borrower shall promptly report to Lender any return of
     Inventory by an account debtor having a sales price in excess of
     $50,000.  At any time that Inventory is returned, reclaimed or
     repossessed, the related Account shall not be deemed an Eligible Account.
     In the event any account debtor returns Inventory when an Event of
     Default exists or has occurred and is continuing, Borrower shall, upon
     Lender's request, (i) hold the returned Inventory in trust for Lender,
     (ii) segregate all returned Inventory from all of its other property,
     (iii) dispose of the returned Inventory solely according to Lender's
     instructions, and (iv) not issue any credits, discounts or allowances
     with respect thereto without Lender's prior written consent.

             (c) With respect to each Account:  (i) the amounts
     shown on any invoice delivered to Lender or schedule thereof delivered to
     Lender shall be true and complete, (ii) no payments shall be made thereon
     except payments immediately delivered to Lender pursuant to the terms of
     this Agreement, (iii) no credit, discount, allowance or extension or
     agreement for any of the foregoing shall be granted to any account debtor
     except as reported to Lender in accordance with this Agreement and except
     for credits, discounts, allowances or extensions made or given in the
     ordinary course of Borrower's business in accordance with practices and
     policies previously disclosed to Lender, (iv) there shall be no setoffs,
     deductions, contras, defenses, counterclaims or disputes existing or
     asserted with respect thereto except as reported to Lender in accordance
     with the terms of this Agreement, (v) none of the transactions giving
     rise thereto will violate any applicable State or Federal laws or
     regulations, all documentation relating thereto will be legally
     sufficient under such laws and regulations and all such documentation
     will be legally enforceable in accordance with its terms.

             (d) Lender shall have the right at any time or times,
     in Lender's name or in the name of a nominee of Lender, to verify the
     validity, amount or any other matter relating to any Account or other
     Collateral, by mail, telephone, facsimile transmission or otherwise.

             (e) Borrower shall deliver or cause to be delivered to
     Lender, with appropriate endorsement and assignment, with full recourse
     to Borrower, all chattel paper and instruments which Borrower now owns
     or may at any time acquire immediately upon Borrower's receipt thereof,
     except as Lender may otherwise agree.

             (f) Lender may, at any time or times that an Event
     of Default exists or has occurred and is continuing, (i) notify any or
     all account debtors that the Accounts have been assigned to Lender and
     that Lender has a security interest therein and Lender may direct any or
     all accounts debtors to make payment of Accounts directly to Lender, (ii)
     extend the time of payment of, compromise, settle or adjust for cash,
     credit, return of merchandise or otherwise, and upon any terms or
     conditions, any and all Accounts or other obligations included in the
     Collateral and thereby discharge or release the account debtor or any
     other party or parties in any way liable for payment thereof without
     affecting any of the Obligations, (iii) demand, collect or enforce
     payment of any Accounts or such other obligations, but without any duty
     to do so, and Lender shall not be liable for its failure to collect or
     enforce the payment thereof nor for the negligence of its agents or
     attorneys with respect thereto and (iv) take whatever other action Lender
     may deem necessary or desirable for the protection of its interests.  At
     any time that an Event of Default exists or has occurred and is
     continuing, at Lender's request, all invoices and statements sent to any
     account debtor shall state that the Accounts and such other obligations
     have been assigned to Lender and are payable directly and only to Lender
     and Borrower shall deliver to Lender such originals of documents
     evidencing the sale and delivery of goods or the performance of services
     giving rise to any Accounts as Lender may require.

  7.3 Inventory Covenants.

              With respect to the Inventory: (a) Borrower shall at all times
     maintain inventory records reasonably satisfactory to Lender, keeping
     correct and accurate records itemizing and describing the kind, type,
     quality and quantity of Inventory, Borrower's cost therefor and daily
     withdrawals therefrom and additions thereto; (b) Borrower shall conduct
     a physical count of the Inventory at least once each year, but at any
     time or times as Lender may request on or after an Event of Default, and
     promptly following such physical inventory shall supply
     Lender with a report in the form and with such specificity as may be
     reasonably satisfactory to Lender concerning such physical count; (c)
     Borrower shall not remove any Inventory from the locations set forth or
     permitted herein, without the prior written consent of Lender, except for
     sales of Inventory in the ordinary course of Borrower's business and
     except to move Inventory directly from one location set forth or permitted
     herein to another such location; (d) upon Lender's request, Borrower
     shall, at its expense, no more than twice in any twelve (12) month period,
     but at any time or times as Lender may request on or after an Event of
     Default or after any bulk purchase of Inventory or other acquisition
     permitted hereunder, deliver or cause to be delivered to Lender written
     reports or appraisals as to the Inventory in form, scope and methodology
     acceptable to Lender and by an appraiser acceptable to Lender, addressed
     to Lender or upon which Lender is expressly permitted to rely; (e)
     Borrower shall produce, use, store and maintain the Inventory, with all
     reasonable care and caution and in accordance with applicable standards
     of any insurance and in conformity with applicable laws (including, but
     not limited to, the requirements of the Federal Fair Labor Standards Act
     of 1938, as amended and all rules, regulations and orders related there);
     (f) Borrower assumes all responsibility and liability arising from or
     relating to the production, use, sale or other disposition of the
     Inventory; (g) Borrower shall not sell Inventory to any customer on
     approval, or any other basis which entitles the customer to return or
     may obligate Borrower to repurchase such Inventory; (h) Borrower shall
     keep the Inventory in good and marketable condition; and (i) Borrower
     shall not, without prior written notice to Lender, acquire or
     accept any Inventory on consignment or approval, provided, however,
     Borrower may accept inventory from Daimler Chrysler Corporation and
     American Honda Motor Company, Inc. on consignment so long as
     Borrower segregates such consigned inventory from the Inventory of
     Borrower and clearly identifies such consigned inventory (and the owner
     thereof) to the satisfaction of Lender.

  7.4 Equipment Covenants.  With respect to the Equipment:

              (a) upon Lender's request, Borrower shall, at its expense, at
     any time or times as Lender may request on or after an Event of Default,
     deliver or cause to be delivered to Lender written reports or appraisals
     as to the Equipment in form, scope and methodology acceptable to Lender
     and by an appraiser acceptable to Lender; (b) Borrower shall keep the
     Equipment in good order, repair, running and marketable condition
     (ordinary wear and tear excepted); (c) Borrower shall use the Equipment
     with all reasonable care and caution and in accordance with applicable
     standards of any insurance and in conformity with all applicable laws;
     (d) the Equipment is and shall be used in Borrower's business and not for
     personal, family, household or farming use; (e) Borrower shall not remove
     any Equipment from the locations set forth or permitted herein, except to
     the extent necessary to have any Equipment repaired or maintained in the
     ordinary course of the business of Borrower or to move Equipment directly
     from one location set forth or permitted herein to another such location
     and except for the movement of motor vehicles used by or for the benefit
     of Borrower in the ordinary course of business; (f) the Equipment is now
     and shall remain personal property and Borrower shall not permit any of
     the Equipment to be or become a part of or affixed to real property; and
     (g) Borrower assumes all responsibility and liability arising from the
     use of the Equipment.

  7.5 Power of Attorney.

              Borrower hereby irrevocably designates and appoints Lender
     (and all persons designated by Lender) as Borrower's true and lawful
     attorney-in-fact, and authorizes Lender, in Borrower's or Lender's name,
     to:  (a) at any time an Event of Default or event which with notice or
     passage of time or both would constitute an Event of Default exists or
     has occurred and is continuing (i) demand payment on Accounts or other
     proceeds of Inventory or other Collateral, (ii) enforce payment of
     Accounts by legal proceedings or otherwise, (iii) exercise all of
     Borrower's rights and remedies to collect any Account or other Collateral,
     (iv) sell or assign any Account upon such terms, for such amount and at
     such time or times as Lender deems advisable, (v) settle, adjust,
     compromise, extend or renew an Account, (vi) discharge and release
     any Account, (vii) prepare, file and sign Borrower's name on any proof of
     claim in bankruptcy or other similar document against an account debtor,
     (viii) notify the post office authorities to change the address for
     delivery of Borrower's mail to an address designated by Lender, and open
     and dispose of all mail addressed to Borrower, and (ix) do all acts and
     things which are necessary, in Lender's determination, to fulfill
     Borrower's obligations under this Agreement and the other Financing
     Agreements and (b) at any time to (i) take control in any manner of any
     item of payment or proceeds thereof, (ii) have access to any lockbox or
     postal box into which Borrower's mail is deposited, (iii) endorse
     Borrower's name upon any items of payment or proceeds thereof and deposit
     the same in Lender's account for application to the Obligations, (iv)
     endorse Borrower's name upon any chattel paper, document, instrument,
     invoice, or similar document or agreement relating to any Account or any
     goods pertaining thereto or any other Collateral, (v) sign Borrower's
     name on any verification of Accounts and notices thereof to account
     debtors and (vi) execute in Borrower's name and file any UCC financing
     statements or amendments thereto.  Borrower hereby releases Lender and
     its officers, employees and designees from any liabilities arising from
     any act or acts under this power of attorney and in furtherance thereof,
     whether of omission or commission, except as a result of Lender's own
     gross negligence or willful misconduct as determined pursuant to a final
     non-appealable order of a court of competent jurisdiction.

  7.6 Right to Cure.

              Lender may, at its option, in order to preserve, protect,
     insure or maintain the Collateral and the rights of Lender
     with respect thereto (a) cure any default by Borrower under any agreement
     with a third party or pay or bond on appeal any judgment entered against
     Borrower, (b) discharge taxes, liens, security interests or other
     encumbrances at any time levied on or existing with respect to the
     Collateral and (c) pay any amount, incur any expense or perform any act
     which, in Lender's judgment, is necessary or appropriate.  Lender may add
     any amounts so expended to the Obligations and charge Borrower's account
     therefor, such amounts to be repayable by Borrower on demand.  Lender
     shall be under no obligation to effect such cure, payment or bonding and
     shall not, by doing so, be deemed to have assumed any obligation or
     liability of Borrower.  Any payment made or other action taken by Lender
     under this Section shall be without prejudice to any right to assert an
     Event of Default hereunder and to proceed accordingly.

  7.7 Access to Premises.

              From time to time as requested by Lender, at the cost and
     expense of Borrower, (a) Lender or its designee shall have complete
     access to all of Borrower's premises during normal business hours and
     after notice to Borrower, or at any time and without notice to Borrower
     if an Event of Default exists or has occurred and is continuing, for
     the purposes of inspecting, verifying and auditing the Collateral and
     all of Borrower's books and records, including, without limitation, the
     Records, and (b) Borrower shall promptly furnish to Lender such copies of
     such books and records or extracts therefrom as Lender may request, and
     (c) use during normal business hours such of Borrower's personnel,
     equipment, supplies and premises as may be reasonably necessary for the
     foregoing and if an Event of Default exists or has occurred and is
     continuing for the collection of Accounts and realization of other
     Collateral.

  SECTION 8.  REPRESENTATIONS AND WARRANTIES

              Borrower hereby represents and warrants to Lender the
     following (which shall survive the execution and delivery of this
     Agreement), the truth and accuracy of which are a continuing condition
     of the making of Loans and providing Letter of Credit Accommodations by
     Lender to Borrower:

  8.1 Corporate Existence, Power and Authority; Subsidiaries.

              Borrower is a corporation duly organized and in good standing
     under the laws of its state of incorporation and is duly qualified as a
     foreign corporation and in good standing in all states or other
     jurisdictions where the nature and extent of the business transacted by
     it or the ownership of assets makes such qualification necessary, except
     for those jurisdictions in which the failure to so qualify would not have
     a material adverse effect on Borrower's financial condition, results of
     operation or business or the rights of Lender in or to any of the
     Collateral.  The execution, delivery and performance of this Agreement,
     the other Financing Agreements and the transactions contemplated
     hereunder and thereunder are all within Borrower's corporate powers,
     have been duly authorized and are not in contravention of law or the
     terms of Borrower's articles of incorporation, by-laws, or other
     organizational documentation, or any indenture, agreement or undertaking
     to which Borrower is a party or by which Borrower or its property are
     bound.  This Agreement and the other Financing Agreements constitute
     legal, valid and binding obligations of Borrower enforceable in
     accordance with their respective terms.  Borrower does not have any
     Subsidiaries except as set forth on the Information Certificate.

  8.2 Financial Statements; No Material Adverse Change.

              All financial statements relating to Borrower which have been or
     may hereafter be delivered by Borrower to Lender have been prepared in
     accordance with GAAP and fairly present the financial condition and the
     results of operation of Borrower as at the dates and for the periods set
     forth therein.  Except as disclosed in any interim financial statements
     furnished by Borrower to Lender prior to the date of this Agreement,
     there has been no material adverse change in the assets, liabilities,
     properties and condition, financial or otherwise, of Borrower, since the
     date of the most recent audited financial statements furnished by
     Borrower to Lender prior to the date of this Agreement.

  8.3 Chief Executive Office; Collateral Locations.

              The chief executive office of Borrower and Borrower's Records
     concerning Accounts are located only at the address set forth below and
     its only other places of business and the only other locations of
     Collateral, if any, are the addresses set forth in the Information
     Certificate, subject to the right of Borrower to establish new locations
     in accordance with Section 9.2 below.  The Information Certificate
     correctly identifies any of such locations which are not owned by
     Borrower and sets forth the owners and/or operators thereof and to
     the best of Borrower's knowledge, the holders of any mortgages on such
     locations.

  8.4 Priority of Liens; Title to Properties.

              The security interests and liens granted to Lender under this
     Agreement and the other Financing Agreements constitute valid and
     perfected first priority liens and security interests in and upon the
     Collateral subject only to the liens indicated on Schedule 8.4 hereto and
     the other liens permitted under Section 9.8 hereof.  Borrower has good
     and marketable title to all of its properties and assets subject to no
     liens, mortgages, pledges, security interests, encumbrances or charges
     of any kind, except those granted to Lender and such others as are
     specifically listed on Schedule 8.4 hereto or permitted under
     Section 9.8 hereof.

  8.5 Tax Returns.

              Borrower has filed, or caused to be filed, in a timely manner
     all tax returns, reports and declarations which are required
     to be filed by it (without requests for extension except as previously
     disclosed in writing to Lender).  All information in such tax returns,
     reports and declarations is complete and accurate in all material
     respects.  Borrower has paid or caused to be paid all taxes due and
     payable or claimed due and payable in any assessment received by it,
     except taxes the validity of which are being contested in good faith by
     appropriate proceedings diligently pursued and available to Borrower and
     with respect to which adequate reserves have been set aside on its books.
     Adequate provision has been made for the payment of all accrued and
     unpaid Federal, State, county, local, foreign and other taxes whether or
     not yet due and payable and whether or not disputed.

  8.6 Litigation.

              Except as set forth on the Information Certificate, there is no
     present investigation by any governmental agency pending, or to the best
     of Borrower's knowledge threatened, against or affecting Borrower, its
     assets or business and there is no action, suit, proceeding or claim by
     any Person pending, or to the best of Borrower's knowledge threatened,
     against Borrower or its assets or goodwill, or against or affecting any
     transactions contemplated by this Agreement, which if adversely
     determined against Borrower would result in any material adverse change
     in the assets, business or prospects of Borrower or would impair the
     ability of Borrower to perform its obligations hereunder or under any of
     the other Financing Agreements to which it is a party or of Lender to
     enforce any Obligations or realize upon any Collateral.

  8.7 Compliance with Other Agreements and Applicable Laws.

              Borrower is not in default in any material respect under, or in
     violation in any material respect of any of the terms of, any agreement,
     contract, instrument, lease or other commitment to which it is a party or
     by which it or any of its assets are bound and Borrower is in compliance
     in all material respects with all applicable provisions of laws, rules,
     regulations, licenses, permits, approvals and orders of any foreign,
     Federal, State or local governmental authority.

  8.8 Environmental Compliance.

              (a) Except as set forth on Schedule 8.8 hereto,
     Borrower has not generated, used, stored, treated, transported,
      manufactured, handled, produced or disposed of any Hazardous Materials,
     on or off its premises (whether or not owned by it) in any manner which
     at any time violates any applicable Environmental Law or any license,
     permit, certificate, approval or similar authorization thereunder and
     the operations of Borrower complies in all material respects with all
     Environmental Laws and all licenses, permits, certificates, approvals
     and similar authorizations thereunder.

              (b) Except as set forth on Schedule 8.8 hereto, there
     has been no investigation, proceeding, complaint, order, directive,
     claim, citation or notice by any governmental authority or any other
     person nor is any pending or to the best of Borrower's knowledge
     threatened, with respect to any non-compliance with or violation of the
     requirements of any Environmental Law by Borrower or the release, spill
     or discharge, threatened or actual, of any Hazardous Material or the
     generation, use, storage, treatment, transportation, manufacture,
     handling, production or disposal of any Hazardous Materials or any
     other environmental, health or safety matter, which affects Borrower or
     its business, operations or assets or any properties at which Borrower
     has transported, stored or disposed of any Hazardous Materials.

              (c) Borrower has no material liability (contingent or
     otherwise) in connection with a release, spill or discharge, threatened
     or actual, of any Hazardous Materials or the generation, use, storage,
     treatment, transportation, manufacture, handling, production or disposal
     of any Hazardous Materials.

              (d) Borrower has all licenses, permits, certificates,
     approvals or similar authorizations required to be obtained or filed in
     connection with the operations of Borrower under any Environmental Law
     and all of such licenses, permits, certificates, approvals or similar
     authorizations are valid and in full force and effect.

  8.9 Employee Benefits.

              (a) Borrower has not engaged in any transaction in
     connection with which Borrower or any of its ERISA Affiliates could be
     subject to either a civil penalty assessed pursuant to Section 502(i) of
     ERISA or a tax imposed by Section 4975 of the Code, including any
     accumulated funding deficiency described in Section 8.8(c) hereof and any
     deficiency with respect to vested accrued benefits described in Section
     8.9(d) hereof.

              (b) No liability to the Pension Benefit Guaranty
     Corporation has been or is expected by Borrower to be incurred with
     respect to any employee pension benefit plan of Borrower or any of its
     ERISA Affiliates.  There has been no reportable event (within the meaning
     of Section 4043(b) of ERISA) or any other event or condition with respect
     to any employee pension benefit plan of Borrower or any of its ERISA
     Affiliates which presents a risk of termination of any such plan by the
     Pension Benefit Guaranty Corporation.

              (c) Full payment has been made of all amounts
     which Borrower or any of its ERISA Affiliates is required under Section
     302 of ERISA and Section 412 of the Code to have paid under the terms of
     each employee pension benefit plan as contributions to such plan as of
     the last day of the most recent fiscal year of such plan ended prior to
     the date hereof, and no accumulated funding deficiency (as defined in
     Section 302 of ERISA and Section 412 of the Code), whether or not
     waived, exists with respect to any employee pension benefit plan,
     including any penalty or tax described in Section 8.9(a) hereof and
     any deficiency with respect to vested accrued benefits described in
     Section 8.9(d) hereof.

              (d) As of January 1, 2000, the total present value of
     all accrued benefits under all employee pension benefit plans maintained
     by Borrower that are subject to Title IV of ERISA did not exceed the
     total value of the assets of such plans (including accrued employer
     contributions).

              (e) Except as set forth on Schedule 8.9(e) hereto, neither
     Borrower nor any of its ERISA Affiliates is or has been obligated to
     contribute within the last seven years to any "multiemployer plan" (as
     such term is defined in Section 4001(a)(3) of ERISA that is subject to
     Title IV of ERISA.  As of the date hereof, neither Borrower nor any of
     its ERISA Affiliates has any continuing liability to contribute to any
     such multiemployer plans.

  8.10 Accuracy and Completeness of Information.

              All information furnished by or on behalf of Borrower in writing
     to Lender in connection with this Agreement or any of the other Financing
     Agreements or any transaction contemplated hereby or thereby, including,
     without limitation, all information on the Information Certificate is
     true and correct in all material respects on the date as of which such
     information is dated or certified and does not omit any material fact
     necessary in order to make such information not misleading.  No event or
     circumstance has occurred which has had or could reasonably be expected
     to have a material adverse affect on the business, assets or prospects of
     Borrower, which has not been fully and accurately disclosed to Lender in
     writing.

  8.11 Survival of Warranties; Cumulative.

              All representations and warranties contained in this Agreement
     or any of the other Financing Agreements shall survive the execution and
     delivery of this Agreement and shall be deemed to have been made again to
     Lender on the date of each additional borrowing or other credit
     accommodation hereunder and shall be conclusively presumed to have been
     relied on by Lender regardless of any investigation made or information
     possessed by Lender.  The representations and warranties set forth herein
     shall be cumulative and in addition to any other representations or
     warranties which Borrower shall now or hereafter give, or cause to be
     given, to Lender.

  SECTION 9.  AFFIRMATIVE AND NEGATIVE COVENANTS

  9.1 Maintenance of Existence.

             Borrower shall at all times preserve, renew and keep in full,
     force and effect its corporate existence and rights and franchises with
     respect thereto and maintain in full force and effect all permits,
     licenses, trademarks, tradenames, approvals, authorizations, leases and
     contracts necessary to carry on the business as presently or proposed to
     be conducted.  Borrower shall give Lender thirty (30) days prior written
     notice of any proposed change in its corporate name, which notice shall
     set forth the new name and Borrower shall deliver to Lender a copy of the
     amendment to the Articles of Incorporation of Borrower providing for the
     name change certified by the Secretary of State of the jurisdiction of
     incorporation of Borrower as soon as it is available.

  9.2 New Collateral Locations.
             Borrower may open any new location within the continental United
     States provided Borrower (a) gives Lender thirty (30) days prior written
     notice of the intended opening of any such new location and (b) executes
     and delivers, or causes to be executed and delivered, to Lender such
     agreements, documents, and instruments as Lender may deem reasonably
     necessary or desirable to protect its interests in the Collateral at such
     location, including, without limitation, UCC financing statements.

  9.3 Compliance with Laws, Regulations, Etc.

             (a) Borrower shall, at all times, comply in all
     material respects with all laws, rules, regulations, licenses, permits,
     approvals and orders applicable to it and duly observe all requirements
     of any Federal, State or local governmental authority, including, without
     limitation, the Employee Retirement Security Act of 1974, as amended, the
     Occupational Safety and Hazard Act of 1970, as amended, the Fair Labor
     Standards Act of 1938, as amended, and all statutes, rules, regulations,
     orders, permits and stipulations relating to environmental pollution and
     employee health and safety, including, without limitation, all of the
     Environmental Laws.

             (b) Borrower shall establish and maintain, at its
     expense, a system to assure and monitor its continued compliance with all
     Environmental Laws in all of its operations, which system shall include
     annual reviews of such compliance by employees or agents of Borrower
     who are familiar with the requirements of the Environmental Laws.  Copies
     of all environmental surveys, audits, assessments, feasibility studies
     and results of remedial investigations shall be promptly furnished, or
     caused to be furnished, by Borrower to Lender.  Borrower shall take
     prompt and appropriate action to respond to any non-compliance with any
     of the Environmental Laws and shall regularly report to Lender on such
     response.

             (c) Borrower shall give both oral and written notice
     to Lender immediately upon Borrower's receipt of any notice of, or
     Borrower's otherwise obtaining knowledge of, (i) the occurrence of any
     event involving the release, spill or discharge, threatened or actual, of
     any Hazardous Material or (ii) any investigation, proceeding, complaint,
     order, directive, claims, citation or notice with respect to: (A) any
     non-compliance with or violation of any Environmental Law by Borrower or
     (B) the release, spill or discharge, threatened or actual, of any
     Hazardous Material or (C) the generation, use, storage, treatment,
     transportation, manufacture, handling, production or disposal of any
     Hazardous Materials or (D) any other environmental, health or safety
     matter, which affects Borrower or its business, operations or assets or
     any properties at which Borrower transported, stored or disposed of any
     Hazardous Materials.

             (d) Without limiting the generality of the foregoing,
     whenever Lender reasonably determines that there is non-compliance, or
     any condition which requires any action by or on behalf of Borrower in
     order to avoid any material non-compliance, with any Environmental Law,
     Borrower shall, at Lender's request and Borrower's expense: (i) cause an
     independent environmental engineer acceptable to Lender to conduct such
     tests of the site where Borrower's non-compliance or alleged non-
     compliance with such Environmental Laws has occurred as to such non-
     compliance and prepare and deliver to Lender a report as to such non-
     compliance setting forth the results of such tests, a proposed plan for
     responding to any environmental problems described therein, and an
     estimate of the costs thereof and (ii) provide to Lender a supplemental
     report of such engineer whenever the scope of such non-compliance, or
     Borrower's response thereto or the estimated costs thereof, shall change
     in any material respect.  Furthermore, without limiting the generality of
     the foregoing and specifically in connection with Borrower's Real
     Property located in Beech Creek, Pennsylvania, Borrower (i) shall at all
     times establish and maintain a clean-up plan acceptable to Lender and
     its consultants, (ii) shall engage a contractor to perform routine
     monitoring and progress reporting on the environmental clean-up of such
     site, such contractor, reporting and monitoring to be acceptable to
     Lender and its consultants, (iii) shall deliver such reports to Lender
     (and its consultants) upon completion thereof, and (iv) shall allow
     Lender and its consultants to visit such site and meet with such
     contractor, upon  Lender's request, to evaluate such monitoring and
     clean-up plan and the status thereof.

             (e) Borrower shall indemnify and hold harmless Lender, its
     directors, officers, employees, agents, invitees, representatives,
     successors and assigns, from and against any and all losses, claims,
     damages, liabilities, costs, and expenses (including attorneys' fees and
     legal expenses) directly or indirectly arising out of or attributable to
     the use, generation, manufacture, reproduction, storage, release,
     threatened release, spill, discharge, disposal or presence of a Hazardous
     Material, including, without limitation, the costs of any required or
     necessary repair, cleanup or other remedial work with respect to any
     property of Borrower and the preparation and implementation of any
     closure, remedial or other required plans.  All representations,
     warranties, covenants and indemnifications in this Section 9.3 shall
     survive the payment of the Obligations and the termination or non-renewal
     of this Agreement.

  9.4 Payment of Taxes and Claims.

             Borrower shall duly pay and discharge all taxes, assessments,
     contributions and governmental charges upon or against it or its
     properties or assets, except for taxes the validity of which are being
     contested in good faith by appropriate proceedings diligently pursued and
     available to Borrower and with respect to which adequate reserves have
     been set aside on its books.  Borrower shall be liable for any tax or
     penalties imposed on Lender as a result of the financing arrangements
     provided for herein and Borrower agrees to indemnify and hold Lender
     harmless with respect to the foregoing, and to repay to Lender on demand
     the amount thereof, and until paid by Borrower such amount shall be added
     and deemed part of the Loans, provided, that, nothing contained herein
     shall be construed to require Borrower to pay any income or franchise
     taxes attributable to the income of Lender from any amounts charged or
     paid hereunder to Lender.  The foregoing indemnity shall survive the
     payment of the Obligations and the termination or non-renewal of this
     Agreement.

  9.5 Insurance.

             Borrower shall, at all times, maintain with financially sound and
     reputable insurers insurance with respect to the Collateral against loss
     or damage and all other insurance of the kinds and in the amounts
     customarily insured against or carried by corporations of established
     reputation engaged in the same or similar businesses and similarly
     situated.  Said policies of insurance shall be satisfactory to Lender as
     to form, amount and insurer.  Borrower shall furnish certificates,
     policies or endorsements to Lender as Lender shall require as proof of
     such insurance, and, if Borrower fails to do so, Lender is authorized,
     but not required, to obtain such insurance at the expense of Borrower.
     All policies shall provide for at least fifteen (15) days prior written
     notice to Lender of any cancellation or reduction of coverage and that
     Lender may act as attorney for Borrower in obtaining, and at any time an
     Event of Default exists or has occurred and is continuing, adjusting,
     settling, amending and canceling such insurance.  Borrower shall cause
     Lender to be named as a loss payee and an additional insured (but without
     any liability for any premiums) under such insurance policies and
     Borrower shall obtain non-contributory lender's loss payable endorsements
     to all insurance policies in form and substance satisfactory to Lender.
     Such lender's loss payable endorsements shall specify that the proceeds
     of such insurance shall be payable to Lender as its interests may appear
     and further specify that Lender shall be paid regardless of any act or
     omission by Borrower or any of its affiliates.  At its option, Lender may
     apply any insurance proceeds received by Lender at any time to the cost
     of repairs or replacement of Collateral and/or to payment of the
     Obligations, whether or not then due, in any order and in such manner as
     Lender may determine or hold such proceeds as cash collateral for the
     Obligations.

  9.6 Financial Statements and Other Information.

             (a) Borrower shall keep proper books and records in which true
     and complete entries shall be made of all dealings or transactions
     of or in relation to the Collateral and the business of Borrower and its
     Subsidiaries (if any) in accordance with GAAP and Borrower shall furnish
     or cause to be furnished to Lender: (i) within ninety (90) days after the
     end of each fiscal month coinciding with the end of Borrower's fiscal
     year, and thirty (30) days after the end of each other fiscal month,
     (A) monthly unaudited consolidated financial statements, and, if Borrower
     has any Subsidiaries, unaudited consolidating financial statements
     (including in each case balance sheets, statements of income and loss and
     statements of shareholders' equity), all in reasonable detail, fairly
     presenting the financial position and the results of the operations of
     Borrower and its Subsidiaries as of the end of and through such fiscal
     month, and (B) a completed Compliance Certificate, substantially in the
     form of Exhibit C-2 hereto, demonstrating compliance by Borrower with
     Section 9.13 hereof as of the last day of the immediately preceding month,
     and (ii) within ninety (90) days after the end of each fiscal year,
     audited consolidated financial statements and, if Borrower has any
     Subsidiaries, audited consolidating financial statements of Borrower and
     its Subsidiaries (including in each case balance sheets, statements of
     income and loss, statements of cash flow and statements of shareholders'
     equity), and the accompanying notes thereto, all in reasonable detail,
     fairly presenting the financial position and the results of the
     operations of Borrower and its Subsidiaries as of the end of and for
     such fiscal year, together with the opinion of independent certified
     public accountants, which accountants shall be an independent accounting
     firm selected by Borrower and reasonably acceptable to Lender, that such
     financial statements have been prepared in accordance with GAAP, and
     present fairly the results of operations and financial condition of
     Borrower and its Subsidiaries as of the end of and for the fiscal year
     then ended.  Lender confirms that, as of the date hereof, the accounting
     firm of BDO Seidman, LLP, is acceptable to Lender.

             (b) Borrower shall promptly notify Lender in writing of the
     details of (i) any loss, damage, investigation, action, suit, proceeding
     or claim relating to the Collateral or any other property which is
     security for the Obligations or which would result in any material
     adverse change in Borrower's business, properties, assets, goodwill or
     condition, financial or otherwise and (ii) the occurrence of any Event of
     Default or event which, with the passage of time or giving of notice or
     both, would constitute an Event of Default.

             (c) Borrower shall promptly after the sending or filing thereof
     furnish or cause to be furnished to Lender copies of all reports
     which Borrower sends to its stockholders generally and copies of all
     reports and registration statements which Borrower files with the
     Securities and Exchange Commission, any national securities exchange or
     the National Association of Securities Dealers, Inc.

             (d)	Borrower shall furnish or cause to be furnished
     to Lender such budgets, forecasts, projections and other information
     respecting the Collateral and the business of Borrower, as Lender may,
     from time to time, reasonably request. Lender is hereby authorized to
     deliver a copy of any financial statement or any other information
     relating to the business of Borrower to any court or other government
     agency or to any participant or assignee or prospective participant or
     assignee. Borrower hereby irrevocably authorizes and directs all
     accountants or auditors to deliver to Lender, at Borrower's expense,
     copies of the financial statements of Borrower and any reports or
     management letters prepared by such accountants or auditors on behalf of
     Borrower and to disclose to Lender such information as they may have
     regarding the business of Borrower. Any documents, schedules, invoices or
     other papers delivered to Lender may be destroyed or otherwise disposed
     of by Lender one (1) year after the same are delivered to Lender, except
     as otherwise designated by Borrower to Lender in writing.

  9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc.

             Borrower shall not, directly or indirectly, (a) merge into or
     with or consolidate with any other Person or permit any other Person to
     merge into or with or consolidate with it (except that so long as no
     Event of Default then exists and Lender receives thirty (30) days prior
     written notice (i) so long as Borrower is the surviving entity, a
     Subsidiary of Borrower party to a duly executed Guaranty and Security
     Agreement in favor of Lender may merge into or with or consolidate with
     Borrower, and (ii) Borrower may permit any Subsidiary party to a duly
     executed Guaranty and Security Agreement in favor of Lender, to merge
     into or with or consolidate with one or more such Subsidiaries, or (b)
     sell, assign, lease, transfer, abandon or otherwise dispose of any stock
     or indebtedness to any other Person or any of its assets to any other
     Person (except for (i) sales of Inventory in the ordinary course of
     business, (ii) the disposition of worn-out or obsolete Equipment or
     Equipment no longer used in the business of Borrower so long as
     (A) if an Event of Default exists or has occurred and is continuing,
     any proceeds are paid to Lender and (B) such sales do not involve
     Equipment having an aggregate fair market value in excess of $25,000
     for all such Equipment disposed of in any fiscal year of Borrower,
     and (iii) the sale of Borrower's equity interests in Advance Automotive
     Industries, Inc., an Ontario corporation, provided, however that the
     proceeds of such sale are used to repay Revolving Loans hereunder and
     provided further, however, that so long as no Event of Default then
     exists and Borrower has Excess Availability in an amount not less than
     $600,000, Borrower may retain proceeds in an amount not to exceed
     $840,000 ("Retained Funds") in a bank account subject to a first priority
     security interest of Lender, or (c) form or acquire any Subsidiaries
     other than NewCo or the Subsidiaries in existence as of the date hereof,
     or (d) wind up, liquidate or dissolve, or (e) agree to do any of the
     foregoing.

  9.8 Encumbrances.

             Borrower shall not create, incur, assume or suffer to exist any
     security interest, mortgage, pledge, lien, charge or other encumbrance
     of any nature whatsoever on any of its assets or properties, including,
     without limitation, the Collateral, except: (a) liens and security
     interests of Lender; (b) liens securing the payment of taxes, either not
     yet overdue or the validity of which are being contested in good faith
     by appropriate proceedings diligently pursued and available to  Borrower
     and with respect to which adequate reserves have been set aside
     on its books; (c) non-consensual statutory liens (other than liens
     securing the payment of taxes) arising in the ordinary course of
     Borrower's business to the extent: (i) such liens secure indebtedness
     which is not overdue or (ii) such liens secure indebtedness relating to
     claims or liabilities which are fully insured and being defended at the
     sole cost and expense and at the sole risk of the insurer or being
     contested in good faith by appropriate proceedings diligently pursued and
     available to Borrower, in each case prior to the commencement of
     foreclosure or other similar proceedings and with respect to which
     adequate reserves have been set aside on its books; (d) zoning
     restrictions, easements, licenses, covenants and other restrictions
     affecting the use of real property which do not interfere in any material
     respect with the use of such real property or ordinary conduct of the
     business of Borrower as presently conducted thereon or materially impair
     the value of the real property which may be subject thereto; (e) purchase
     money security interests in Equipment (including capital leases) and
     purchase money mortgages on real estate not to exceed $450,000 in the
     aggregate at any time outstanding so long as such security interests and
     mortgages do not apply to any property of Borrower other than the
     Equipment or real estate so acquired, and the indebtedness secured
     thereby  does not exceed the cost of the Equipment or real estate so
     acquired, as the case may be; and (f) the security interests and liens
     set forth on Schedule 8.4 hereto.

  9.9 Indebtedness.

             Borrower shall not incur, create, assume, become or be liable in
     any manner with respect to, or permit to exist, any obligations or
     indebtedness, except (a) the Obligations; (b) trade obligations
     and normal accruals in the ordinary course of business not yet due and
     payable, or with respect to which the Borrower is contesting in good
     faith the amount or validity thereof by appropriate proceedings
     diligently pursued and available to Borrower, and with respect to which
     adequate reserves have been set aside on its books; (c) purchase money
     indebtedness (including capital leases) to the extent not incurred or
     secured by liens (including capital leases) in violation of any other
     provision of this Agreement; and (d) obligations or indebtedness set
     forth on the Information Certificate or on Schedule 9.9 hereto;
     provided, that, (i) Borrower may only make regularly scheduled payments
     of principal and interest in respect of such indebtedness in accordance
     with the terms of the agreement or instrument evidencing or giving rise
     to such indebtedness as in effect on the date hereof, (ii) Borrower
     shall not, directly or indirectly, (A) amend,modify, alter or change
     the terms of such indebtedness or any agreement, document or instrument
     related thereto as in effect on the date hereof, or (B) redeem, retire,
     defease, purchase or otherwise acquire such indebtedness, or set aside
     or otherwise deposit or invest any sums for such purpose, and (iii)
     Borrower shall furnish to Lender all notices or demands in connection
     with such indebtedness either received by Borrower or on its behalf,
     promptly after the receipt thereof, or sent by Borrower or on its
     behalf, concurrently with the sending thereof, as the case may be.

  9.10 Loans, Investments, Guarantees, Etc.

             Borrower shall not, directly or indirectly, make any loans or
     advance money or property to any Person, or invest in (by capital
     contribution, dividend or otherwise) or purchase or repurchase the stock
     or indebtedness or all or a substantial part of the assets or property of
     any Person, or guarantee, assume, endorse, or otherwise become
     responsible for (directly or indirectly) the indebtedness,
     performance, obligations or dividends of any Person or agree to do any of
     the foregoing, except:  (a) the endorsement of instruments for
     collection or deposit in the ordinary course of business; (b) investments
     in:  (i) short-term direct obligations of the United States Government,
     (ii) negotiable certificates of deposit issued by any bank satisfactory
     to Lender, payable to the order of the Borrower or to bearer and
     delivered to Lender, and (iii) commercial paper rated A1 or P1;
     provided, that, as to any of the foregoing, unless waived in writing by
     Lender, Borrower shall take such actions as are deemed necessary by
     Lender to perfect the security interest of Lender in such investments;
     (c) the guarantees, if any, set forth in the Information Certificate;
     (d) the acquisition of all or a substantial part of the assets or
     property of any Person; provided, that, (i) no Event of Default shall be
     continuing at the time of such acquisition or be caused thereby,
     (ii) Borrower shall take such actions as are deemed necessary by Lender
     to perfect the security interest of Lender in such assets and shall
     deliver to Lender the appraisal required by Section 7.3(d) hereof, and
     (iii) Borrower shall obtain Lender's prior written consent to such
     acquisition, which consent shall not be unreasonably withheld or
     delayed, and (e) (i) the investments and capital contributions existing
     as of the date hereof in the Subsidiaries of Borrower as of the date
     hereof, and (ii) loans or advances by Borrower to its Subsidiaries
     (other than NewCo or Western Rebuilders) in the ordinary course of
     business, and (iii) in connection with an acquisition, a capital
     contribution to NewCo of the Retained Funds  referenced in Section
     9.7(b)(iii).  Borrower shall not make any other loan, advance or
     transfer to NewCo except as expressly permitted above.  Borrower shall
     not make any loan, advance or transfer to Western Rebuilders.

  9.11 Dividends and Redemptions.

             Borrower shall not, directly or indirectly, declare or pay any
     dividends on account of any shares of class of capital stock of Borrower
     now or hereafter outstanding, or set aside or otherwise deposit or
     invest any sums for such purpose, or redeem, retire, defease, purchase or
     otherwise acquire any shares of any class of capital stock (or set aside
     or otherwise deposit or invest any sums for such purpose) for any
     consideration other than common stock or apply or set apart any sum, or
     make any other distribution (by reduction of capital or otherwise) in
     respect of any such shares or agree to do any of the foregoing, except
     as set forth on Schedule 9.11 hereto.

  9.12 Transactions with Affiliates.

             Borrower shall not enter into any transaction for the purchase,
     sale or exchange of property or the rendering of any service to or by any
     affiliate, except in the ordinary course of and pursuant to the
     reasonable requirements of Borrower's business and upon fair and
     reasonable terms no less favorable to the Borrower than Borrower would
     obtain in a comparable arm's length transaction with an unaffiliated
     person.

  9.13 Adjusted Tangible Net Worth.

              Borrower shall, at all times, maintain Adjusted Tangible Net
     Worth of not less than $100,000.

  9.14 Costs and Expenses.

              Borrower shall pay to Lender on demand all costs, expenses,
     filing fees and taxes paid or payable in connection with the preparation,
     negotiation, execution, delivery, recording, administration, collection,
     liquidation, enforcement and defense of the Obligations, Lender's rights
     in the Collateral, this Agreement, the other Financing Agreements and all
     other documents related hereto or thereto, including any amendments,
     supplements or consents which may hereafter be contemplated (whether or
     not executed) or entered into in respect hereof and thereof, including,
     but not limited to: (a) all costs and expenses of filing or recording
     (including Uniform Commercial Code financing statement filing taxes and
     fees, documentary taxes, intangibles taxes and mortgage recording taxes
     and fees, if applicable); (b) costs and expenses and fees for
     title insurance and other insurance premiums, environmental audits,
     surveys, assessments, engineering reports and inspections, appraisal fees
     and search fees; (c) costs and expenses of remitting loan proceeds,
     collecting checks and other items of payment, and establishing and
     maintaining the Blocked Accounts, together with Lender's customary
     charges and fees with respect thereto; (d) charges, fees or expenses
     charged by any bank or issuer in connection with the Letter of Credit
     Accommodations; (e) costs and expenses of preserving and protecting the
     Collateral; (f) costs and expenses paid or incurred in connection with
     obtaining payment of the Obligations, enforcing the security interests
     and liens of Lender, selling or otherwise realizing upon the Collateral,
     and otherwise enforcing the provisions of this Agreement and the other
     Financing Agreements or defending any claims made or threatened against
     Lender arising out of the transactions contemplated hereby and thereby
     (including, without limitation, preparations for and consultations
     concerning any such matters); (g) all out-of-pocket expenses and costs
     heretofore and from time to time hereafter incurred by Lender during the
     course of periodic field examinations of the Collateral and Borrower's
     operations, plus a per diem charge at the rate of $750 per person per day
     for Lender's examiners in the field and office; and (h) the reasonable
     fees and disbursements of counsel (including legal assistants) to Lender
     in connection with any of the foregoing.

  9.15 Compliance with ERISA.

              Borrower shall not with respect to any "employee pension
     benefit plans" maintained by Borrower or any of its ERISA Affiliates:

              (a) (i) terminate any of such employee pension benefit plans so
     as to incur any liability to the Pension Benefit Guaranty Corporation
     established pursuant to ERISA, (ii) allow or suffer to exist any
     prohibited transaction involving any of such employee pension benefit
     plans or any trust created thereunder which would subject Borrower or
     such ERISA Affiliate to a tax or penalty or other liability on prohibited
     transactions imposed under Section 4975 of the Code or ERISA, (iii) fail
     to pay to any such employee pension benefit plan any contribution which
     it is obligated to pay under Section 302 of ERISA, Section 412 of the
     Code or the terms of such plan, (iv) allow or suffer to exist any
     accumulated funding deficiency, whether or not waived, with respect to
     any such employee pension benefit plan, (v) allow or suffer to exist any
     occurrence of a reportable event or any other event or condition which
     presents a material risk of termination by the Pension Benefit Guaranty
     Corporation of any such employee pension benefit plan that is a single
     employer plan, which termination could result in any liability to the
     Pension Benefit Guaranty Corporation or (vi) incur any withdrawal
     liability with respect to any multiemployer pension plan.

              (b) As used in this Section 9.15, the term "employee
     pension benefit plans," "employee benefit plans", "accumulated funding
     deficiency" and "reportable event" shall have the respective meanings
     assigned to them in ERISA, and the term "prohibited transaction" shall
     have the meaning assigned to it in Section 4975 of the Code and ERISA.

  9.16 After Acquired Real Property.

              If Borrower or any Subsidiary of Borrower (other than NewCo)
     hereafter acquires any Real Property, fixtures or any other property that
     is of the kind or nature described in the Mortgage and such Real
     Property, fixtures or other property at any one location has a fair
     market value in an amount equal to or greater than $100,000 (or if an
     Event of Default exists, then regardless of the fair market value of such
     assets), without limiting any other rights of Lender, or duties or
     obligations of Borrower, upon Lender's request, Borrower shall execute
     and deliver, or shall cause such Subsidiary to execute and deliver, to
     Lender, a mortgage, deed of trust or deed to secure debt, as Lender may
     determine, in form and substance substantially similar
     to the Mortgage and as to any provisions relating to specific state laws
     satisfactory to Lender and in form appropriate for recording in the real
     estate records of the jurisdiction in which such Real Property or other
     property is located granting to Lender a first and only lien and mortgage
     on and security interest in such Real Property, fixtures or other
     property (except as Borrower would otherwise be permitted to incur
     hereunder or under the Mortgage or as otherwise consented to in writing
     by Lender) and such other agreements, documents and instruments as
     lender may require in connection therewith.

  9.17 Borrower's Leased Premises in Hope, Arkansas.

         Borrower shall (i) provide Lender with copies of  any and all notices
     given or required to be given by Borrower under the Subject Lease (as
     defined in the Leasehold Mortgage), including the notice not to extend
     the term of the Subject Lease as contemplated by Section 13.1 of the
     Leasehold Mortgage, and (ii) at least thirty (30) days prior to the
     expiration of the term of the Subject Lease, as such term may be
     extended, Borrower shall take all actions necessary to exercise the
     Purchase Options (as defined in the Leasehold Mortgage) and as set forth
     in Section 13.2 of the Subject Lease and shall reacquire the Project (as
     defined in the Subject Lease).

  9.18 Further Assurances.

              At the request of Lender at any time and from time to time,
     Borrower shall, at its expense, duly execute and deliver, or cause to be
     duly executed and delivered, such further agreements, documents and
     instruments, and do or cause to be done such further acts as may be
     necessary or proper to evidence, perfect, maintain and enforce the
     security interests and the priority thereof in the Collateral
     and to otherwise effectuate the provisions or purposes of this Agreement
     or any of the other Financing Agreements.  Lender may at any time and
     from time to time request a certificate from an officer of Borrower
     representing that all conditions precedent to the making of Loans and
     providing Letter of Credit Accommodations contained herein are satisfied.
     In the event of such request by Lender, Lender may, at its option, cease
     to make any further Loans or provide any further Letter of Credit
     Accommodations until Lender has received such certificate and, in
     addition, Lender has determined that such conditions are satisfied.
     Where permitted by law, Borrower hereby authorizes Lender to execute and
     file one or more UCC financing statements signed only by Lender.

  SECTION 10.  EVENTS OF DEFAULT AND REMEDIES

  10.1 Events of Default.

              The occurrence or existence of any one or more of the following
     events are referred to herein individually as an "Event of Default", and
     collectively as "Events of Default":

              (a) Borrower fails to pay when due any of the Obligations;

              (b) (i) Borrower fails to perform, keep or observe
     any term, covenant, condition or provision contained in Sections 9.1
     (Maintenance of Existence) or 9.16 (After Acquired Real Property) of this
     Agreement, and such failure continues for a period of ten (10) days; or
     (ii) Borrower fails to perform, keep or observe any term, covenant,
     condition or provision contained in Sections 9.2 (New Collateral
     Locations), 9.3 (Compliance with Laws), or 9.6 (Financial Statements and
     Other Information) of this Agreement, and such failure continues for a
     period of three (3) days; provided, however, the ten (10) and three (3)
     day periods set forth in the foregoing clauses (i) and (ii) shall not
     apply in the case of: (A) any failure to observe any such covenant which
     is not capable of being cured at all or within the applicable period or
     which has been the subject of a prior failure within the preceding six
     (6) month period or (B) an intentional breach of Borrower or any Obligor
     of any such covenant; or (iii) Borrower fails to perform, keep or
     observe any other term, covenant, condition or provision contained in
     this Agreement or any of the other Financing Agreements

              (c) any representation, warranty or statement of fact
     made by Borrower to Lender in this Agreement, the other Financing
     Agreements or any other agreement, schedule, confirmatory assignment or
     otherwise shall when made or deemed made be false or misleading in any
     material respect;

              (d) any Obligor revokes, terminates or fails to
     perform any of the terms, covenants, conditions or provisions of any
     guarantee, endorsement or other agreement of such party in favor of
     Lender;

              (e) any judgment for the payment of money is
     rendered against Borrower or any Obligor in excess of $100,000 in any one
     case or $200,000 in the aggregate and shall remain undischarged or
     unvacated for a period in excess of thirty (30) days or execution shall
     at any time not be effectively stayed, or any judgment other than for the
     payment of money, or injunction, attachment, garnishment or execution is
     rendered against Borrower or any Obligor or any of their assets;

              (f) any Obligor (being a natural person or a general
     partner of an Obligor which is a partnership) dies or Borrower or any
     Obligor, which is a partnership or corporation, dissolves or suspends or
     discontinues doing business;

              (g) Borrower or any Obligor becomes insolvent
     (however defined or evidenced), makes an assignment for the benefit of
     creditors, makes or sends notice of a bulk transfer or calls a meeting of
     its creditors or principal creditors;

              (h) a case or proceeding under the bankruptcy laws
     of the United States of America now or hereafter in effect or under any
     insolvency, reorganization, receivership, readjustment of debt,
     dissolution or liquidation law or statute of any jurisdiction now or
     hereafter in effect (whether at law or in equity) is filed against
     Borrower or any Obligor or all or any part of its properties and such
     petition or application is not dismissed within forty-five (45) days
     after the date of its filing or Borrower or any Obligor shall file any
     answer admitting or not contesting such petition or application or
     indicates its consent to, acquiescence in or approval of, any
     such action or proceeding or the relief requested is granted sooner;

              (i) a case or proceeding under the bankruptcy laws
     of the United States of America now or hereafter in effect or under any
     insolvency, reorganization, receivership, readjustment of debt,
     dissolution or liquidation law or statute of any jurisdiction now or
     hereafter in effect (whether at a law or equity) is filed by Borrower or
     any Obligor or for all or any part of its property;

              (j) any default by Borrower or any Obligor under
     any agreement, document or instrument relating to any indebtedness for
     borrowed money owing to any person other than Lender, or any capitalized
     lease obligations, contingent indebtedness in connection with any
     guarantee, letter of credit, indemnity or similar type of instrument in
     favor of any person other than Lender, in any case in an amount in
     excess of $75,000, which default continues for more than the applicable
     cure period, if any, with respect thereto, or any default by Borrower or
     any Obligor under any material contract, lease, license or other
     obligation to any person other than Lender, which default continues for
     more than the applicable cure period, if any, with respect thereto;

              (k) the indictment or threatened indictment of
     Borrower or any Obligor under any criminal statute, or commencement or
     threatened commencement of criminal or civil proceedings against
     Borrower or any Obligor, pursuant to which statute or proceedings the
     penalties or remedies sought or available include forfeiture of any of
     the property of Borrower or such Obligor;

              (l) there shall be a material adverse change in the
     business, senior management, assets or prospects of Borrower or any
     Obligor after the date hereof; or

              (m) there shall be an event of default under any of
     the other Financing Agreements.

  10.2 Remedies.

              (a) At any time an Event of Default exists or has
     occurred and is continuing, Lender shall have all rights and remedies
     provided in this Agreement, the other Financing Agreements, the Uniform
     Commercial Code and other applicable law, all of which rights and
     remedies may be exercised without notice to or consent by Borrower or any
     Obligor, except as such notice or consent is expressly provided for
     hereunder or required by applicable law.  All rights, remedies and powers
     granted to Lender hereunder, under any of the other Financing Agreements,
     the Uniform Commercial Code or other applicable law, are cumulative, not
     exclusive and enforceable, in Lender's discretion, alternatively,
     successively, or concurrently on any one or more occasions, and shall
     include, without limitation, the right to apply to a court of equity for
     an injunction to restrain a breach or threatened breach by Borrower of
     this Agreement or any of the other Financing Agreements.  Lender may, at
     any time or times, proceed directly against Borrower or any Obligor to
     collect the Obligations without prior recourse to the Collateral.

              (b) Without limiting the foregoing, at any time an Event of
     Default exists or has occurred and is continuing, Lender may, in its
     discretion and without limitation, (i) accelerate the payment of all
     Obligations and demand immediate payment thereof to Lender (provided,
     that, upon the occurrence of any Event of Default described in Sections
     10.1(h) and 10.1(i), all Obligations shall automatically become
     immediately due and payable), (ii) with or without judicial process or
     the aid or assistance of others, enter upon any premises on or in which
     any of the Collateral may be located and take possession of the
     Collateral or complete processing, manufacturing and repair of all or
     any portion of the Collateral, (iii) require Borrower, at Borrower's
     expense, to assemble and make available to Lender any part or all of the
     Collateral at any place and time designated by Lender, (iv) collect,
     foreclose, receive, appropriate, setoff and realize upon any and all
     Collateral, (v) remove any or all of the Collateral from any premises on
     or in which the same may be located for the purpose of effecting the
     sale, foreclosure or other disposition thereof or for any other purpose,
     (vi) sell, lease, transfer, assign, deliver or otherwise dispose of any
     and all Collateral (including, without limitation, entering into
     contracts with respect thereto, public or private sales at any exchange,
     broker's board, at any office of Lender or elsewhere) at such prices or
     terms as Lender may deem reasonable, for cash, upon credit or for future
     delivery, with Lender having the right to purchase the whole or any part
     of the Collateral at any such public sale, all of the foregoing being
     free from any right or equity of redemption of Borrower, which right or
     equity of redemption is hereby expressly waived and released by Borrower
     and/or (vii) terminate this Agreement.  If any of the Collateral is sold
     or leased by Lender upon credit terms or for future delivery, the
     Obligations shall not be reduced as a result thereof until payment
     therefore is finally collected by Lender.  If notice of disposition of
     Collateral is required by law, five (5) days prior notice by Lender to
     Borrower designating the time and place of any public sale or the time
     after which any private sale or other intended disposition of Collateral
     is to be made, shall be deemed to be reasonable notice thereof and
     Borrower waives any other notice.  In the event Lender institutes an
     action to recover any Collateral or seeks recovery of any Collateral by
     way of prejudgment remedy, Borrower waives the posting of any bond which
     might otherwise be required.

              (c) Lender may apply the cash proceeds of Collateral actually
     received by Lender from any sale, lease, foreclosure or
     other disposition of the Collateral to payment of the Obligations, in
     whole or in part and in such order as Lender may elect, whether or not
     then due. Borrower shall remain liable to Lender for the payment of any
     deficiency with interest at the highest rate provided for herein and all
     costs and expenses of collection or enforcement, including attorneys'
     fees and legal expenses.

              (d) Without limiting the foregoing, from and during
     the continuance of an Event of Default or an event which with notice or
     passage of time or both would constitute an Event of Default, Lender may,
     at its option, without notice, (i) cease making Loans or arranging for
     Letter of Credit Accommodations or reduce the lending formulas or amounts
     of Revolving Loans and Letter of Credit Accommodations available to
     Borrower and/or (ii) terminate any provision of this Agreement providing
     for any future Loans or Letter of Credit Accommodations to be made by
     Lender to Borrower.

  SECTION 11.  JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

  11.1 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

              (a) The validity, interpretation and enforcement of
     this Agreement and the other Financing Agreements and any dispute arising
     out of the relationship between the parties hereto, whether in contract,
     tort, equity or otherwise, shall be governed by the internal laws of the
     State of Georgia (without giving effect to principles of conflicts of
     law).

              (b) Borrower and Lender irrevocably consent and
     submit to the non-exclusive jurisdiction of a Georgia state court or a
     superior court located in Fulton County, Georgia and the United States
     District Court for the Northern District of Georgia and waive any
     objection based on venue or forum non conveniens with respect to any
     action instituted therein arising under this Agreement or any of the
     other Financing Agreements or in any way connected with or related or
     incidental to the dealings of the parties hereto in respect of this
     Agreement or any of the other Financing Agreements or the transactions
     related hereto or thereto, in each case whether now existing or hereafter
     arising, and whether in contract, tort, equity or otherwise, and agree
     that any dispute with respect to any such matters shall be heard only in
     the courts described above (except that Lender shall have the right to
     bring any action or proceeding against Borrower or its property in the
     courts of any other jurisdiction which Lender deems necessary or
     appropriate in order to realize on the Collateral or to otherwise
     enforce its rights against Borrower or its property).

              (c) Borrower hereby waives personal service of any and all
     process upon it and consents that all such service of process may be
     made by certified mail (return receipt requested) directed to its
     address set forth on the signature pages hereof and service so made
     shall be deemed to be completed five (5) days after the same shall have
     been so deposited in the U.S. mails, or, at Lender's option, by service
     upon Borrower in any other manner provided under the rules of any such
     courts.  Within thirty (30) days after such service, Borrower shall
     appear in answer to such process, failing which Borrower shall be deemed
     in default and judgment may be entered by Lender against Borrower for the
     amount of the claim and other relief requested.

              (d) BORROWER AND LENDER EACH HEREBY
     WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
     ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
     ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
     AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS
     OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR
     INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN
     RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER
     FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED
     HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING
     OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT,
     EQUITY OR OTHERWISE.  BORROWER AND LENDER EACH
     HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
     DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
     BY COURT TRIAL WITHOUT A JURY AND THAT BORROWER OR
     LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF
     THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE
     OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
     THEIR RIGHT TO TRIAL BY JURY.

              (e) Lender shall not have any liability to Borrower
     (whether in tort, contract, equity or otherwise) for losses suffered by
     Borrower in connection with, arising out of, or in any way related to the
     transactions or relationships contemplated by this Agreement, or any act,
     omission or event occurring in connection herewith, unless it is
     determined by a final and non-appealable judgment or court order binding
     on Lender, that the losses were the result of acts or omissions
     constituting gross negligence or willful misconduct.  In any such
     litigation, Lender shall be entitled to the benefit of the rebuttable
     presumption that it acted in good faith and with the exercise of ordinary
     care in the performance by it of the terms of this Agreement.

  11.2 Waiver of Notices.

               Borrower hereby expressly waives demand, presentment, protest
     and notice of protest and notice of dishonor with respect to any and all
     instruments and commercial paper, included in or evidencing any of the
     Obligations or the Collateral, and any and all other
     demands and notices of any kind or nature whatsoever with respect to the
     Obligations, the Collateral and this Agreement, except such as are
     expressly provided for herein.  No notice to or demand on Borrower which
     Lender may elect to give shall entitle Borrower to any other or further
     notice or demand in the same, similar or other circumstances.

  11.3 Amendments and Waivers.

               Neither this Agreement nor any provision hereof shall be
     amended, modified, waived or discharged orally or by course of conduct,
     but only by a written agreement signed by an authorized officer of
     Lender.  Lender shall not, by any act, delay, omission or otherwise be
     deemed to have expressly or impliedly waived any of its rights, powers
     and/or remedies unless such waiver shall be in writing and signed by an
     authorized officer of Lender.  Any such waiver shall be enforceable only
     to the extent specifically set forth therein.  A waiver by Lender of any
     right, power and/or remedy on any one occasion shall not be construed as
     a bar to or waiver of any such right, power and/or remedy  which Lender
     would otherwise have on any future occasion, whether similar in kind or
     otherwise.

  11.4 Waiver of Counterclaims.

               Borrower waives all rights to interpose any claims, deductions,
     setoffs or counterclaims of any nature (other then compulsory
     counterclaims) in any action or proceeding with respect to this
     Agreement, the Obligations, the Collateral or any matter arising
     therefrom or relating hereto or thereto.

  11.5 Indemnification.

               Borrower shall indemnify and hold Lender, and its directors,
     agents, employees and counsel, harmless from and against any and all
     losses, claims, damages, liabilities, costs or expenses
     imposed on, incurred by or asserted against any of them in connection
     with any litigation, investigation, claim or proceeding commenced or
     threatened related to the negotiation, preparation, execution, delivery,
     enforcement, performance or administration of this Agreement, any other
     Financing Agreements, or any undertaking or proceeding related to any of
     the transactions contemplated hereby or any act, omission, event or
     transaction related or attendant thereto, including, without limitation,
     amounts paid in settlement, court costs, and the fees and expenses of
     counsel.  To the extent that the undertaking to indemnify, pay and hold
     harmless set forth in this Section may be unenforceable because it
     violates any law or public policy, Borrower shall pay the maximum portion
     which it is permitted to pay under applicable law to Lender in
     satisfaction of indemnified matters under this Section.  The foregoing
     indemnity shall survive the payment of the Obligations and the
     termination or non-renewal of this Agreement.

  SECTION 12.  TERM OF AGREEMENT; MISCELLANEOUS

  12.1 Term.

               (a) This Agreement and the other Financing Agreements shall
     become effective as of the date set forth on the first page hereof and
     shall continue in full force and effect for a term ending on the
     date three (3) years from the date hereof (the "Renewal Date"), and from
     year to year thereafter, unless sooner terminated pursuant to the terms
     hereof; provided, that, Lender may, at its option, extend the Renewal
     Date to the date four (4) years from the date hereof by giving Borrower
     notice at least sixty (60) days prior to the third anniversary of this
     Agreement.  Lender or Borrower (subject to Lender's right to extend the
     Renewal Date as provided above) may terminate this Agreement and the
     other Financing Agreements effective on the Renewal Date or on the
     anniversary of the Renewal Date in any year by giving to the other party
     at least sixty (60) days prior written notice; provided, that, this
     Agreement and all other Financing Agreements must be terminated
     simultaneously.  Upon the effective date of termination or non-renewal
     of the Financing Agreements, Borrower shall pay to Lender, in full, all
     outstanding and unpaid Obligations and shall furnish cash collateral to
     Lender in such amounts as Lender determines are reasonably necessary to
     secure Lender from loss, cost, damage or expense, including attorneys'
     fees and legal expenses, in connection with any contingent Obligations,
     including issued and outstanding Letter of Credit Accommodations and
     checks or other payments provisionally credited to the Obligations
     and/or as to which Lender has not yet received final and indefeasible
     payment.  Such cash collateral shall be remitted by wire transfer in
     Federal funds to such bank account of Lender, as Lender may, in its
     discretion, designate in writing to Borrower for such purpose.  Interest
     shall be due until and including the next business day, if the amounts
     so paid by Borrower to the bank account designated by Lender are
     received in such bank account later than 12:00 noon, Atlanta, Georgia
     time.

               (b) No termination of this Agreement or the other
     Financing Agreements shall relieve or discharge Borrower of its
     respective duties, obligations and covenants under this Agreement or
     the other Financing Agreements until all Obligations have been fully
     and finally discharged and paid, and Lender's continuing security
     interest in the Collateral and the rights and remedies of Lender
     hereunder, under the other Financing Agreements and applicable law,
     shall remain in effect until all such Obligations have been fully and
     finally discharged and paid.

               (c) If for any reason this Agreement is terminated prior to the
     end of the then current term or renewal term of this Agreement, in view
     of the impracticality and extreme difficulty of ascertaining actual
     damages and by mutual agreement of the parties as to a reasonable
     calculation of Lender's lost profits as a result thereof, Borrower
     agrees to pay to Lender, upon the effective date of such termination, an
     early termination fee in the amount set forth below if such termination
     is effective in the period indicated:

                  Amount			                        	Period

  (i)    	3.0% of Maximum Credit             after the date hereof but prior
                                             to or on the on (1)year
                                             anniversary of the date hereof

  (ii)	   1.5% of Maximum Credit             after the one (1)year anniversary
                                             of the date hereof but prior
                                             to or on the two (2)year
                                             anniversary of the date hereof

  (iii)	  .75% of Maximum Credit             after the two (2)year anniversary
                                             of the date hereof but prior to
                                             the Renewal Date or the then
                                             current term of the Agreement

               Such early termination fee shall be presumed to be the
     amount of damages sustained by Lender as a result of such early
     termination and Borrower agrees that it is reasonable under the
     circumstances currently existing.  The early termination fee provided
     for in this Section 12.1 shall be deemed included in the Obligations.
     Notwithstanding the foregoing, Lender hereby agrees to waive payment of
     the foregoing early termination fee if this Agreement is terminated prior
     to the end of the then current term or renewal term solely as a result of
     the refinancing of all Obligations with the proceeds of a new credit
     facility provided by First Union National Bank or an affiliate thereof
     and no Event of Default then exists hereunder.

  12.2 Notices.

              All notices, requests and demands hereunder shall be in writing
     and (a) made to Lender at its address set forth below and to Borrower at
     its chief executive office set forth below, or to such other
     address as either party may designate by written notice to the other in
     accordance with this provision, and (b) deemed to have been given or
     made: if delivered in person, immediately upon delivery; if by telex,
     telegram or facsimile transmission, immediately upon sending and upon
     confirmation of receipt; if by nationally recognized overnight courier
     service with instructions to deliver the next business day, one
     (1) business day after sending; and if by certified mail, return receipt
     requested, five (5) days after mailing.

  12.3 Partial Invalidity.

              If any provision of this Agreement is held to be invalid or
     unenforceable, such invalidity or unenforceability shall not invalidate
     this Agreement as a whole, but this Agreement shall be construed as
     though it did not contain the particular provision held to be invalid or
     unenforceable and the rights and obligations of the parties shall
     be construed and enforced only to such extent as shall be permitted by
     applicable law.

  12.4 Successors.

              This Agreement, the other Financing Agreements and any other
     document referred to herein or therein shall be binding upon and inure
     to the benefit of and be enforceable by Lender, Borrower and their
     respective successors and assigns, except that Borrower may not assign
     its rights under this Agreement, the other Financing Agreements and any
     other document referred to herein or therein without the prior written
     consent of Lender.  Lender may, after notice to Borrower, assign its
     rights and delegate its obligations under this Agreement and the other
     Financing Agreements and further may assign, or sell participations in,
     all or any part of the Loans, the Letter of Credit Accommodations or any
     other interest herein to another financial institution or other person,
     in which event, the assignee or participant shall have, to the extent of
     such assignment or participation, the same rights and benefits as it
     would have if it were  Lender hereunder, except as otherwise provided by
     the terms of such assignment or participation.

  12.5 Entire Agreement.

              This Agreement, the other Financing Agreements, any supplements
     hereto or thereto, and any instruments or documents delivered or to be
     delivered in connection herewith or therewith represents the entire
     agreement and understanding concerning the subject matter hereof and
     thereof between the parties hereto, and supersede all other
     prior agreements, understandings, negotiations and discussions,
     representations, warranties, commitments, proposals, offers and contracts
     concerning the subject matter hereof, whether oral or written.






               IN WITNESS WHEREOF, Lender and Borrower have
caused these presents to be duly executed as of the day and year first above
written.


LENDER                                      BORROWER


CONGRESS FINANCIAL CORPORATION              CHAMPION PARTS, INC.
(Southern)
By:_____________________________            By:___________________________
Title:___________________________           Title:________________________

Address:                                    Chief Executive Office:

200 Galleria Parkway, Suite 1500            2005 West Avenue B
Atlanta, Georgia 30339                      Hope, AR 71801






                         TABLE OF CONTENTS


 SECTION 1.  	DEFINITIONS	                                                  1

 SECTION 2.  	CREDIT FACILITIES	                                            11

 2.1	         Revolving Loans.	                                             11

 2.2	         Letter of Credit Accommodations.	                             12

 2.3	         Term Loans.	                                                  14

 2.4	         Availability Reserves.	                                       14

 SECTION 3.  	INTEREST AND FEES	                                            14

 3.1	         Interest.	                                                    14

 3.2	         Closing Fee.	                                                 15

 3.3	         Facility Fee.	                                                15

 3.4	         Servicing Fee.	                                               15

 3.5	         Unused Line Fee.	                                             15

 SECTION 4.  	CONDITIONS PRECEDENT	                                         15

 4.1	         Conditions Precedent to Initial Loans and Letter of Credit
              Accommodations.	                                              15

 4.2	         Conditions Precedent to All Loans and Letter of Credit
              Accommodations.	                                              18

 SECTION 5.  	GRANT OF SECURITY INTEREST	                                   18

 SECTION 6.  	COLLECTION AND ADMINISTRATION	                                19

 6.1	         Borrower's Loan Account.	                                     19

 6.2	         Statements.	                                                  20

 6.3	         Collection of Accounts.	                                      20

 6.4	         Payments.	                                                    21

 6.5	         Authorization to Make Loans.	                                 21

 6.6	         Use of Proceeds.	                                             22

 SECTION 7.  	COLLATERAL REPORTING AND COVENANTS	                           22

 7.1	         Collateral Reporting.	                                        22

 7.2	         Accounts Covenants.	                                          23

 7.3	         Inventory Covenants.	                                         24

 7.4	         Equipment Covenants.	                                         25

 7.5	         Power of Attorney.	                                           26

 7.6	         Right to Cure.	                                               26

 7.7	         Access to Premises	                                           27

 SECTION 8.  	REPRESENTATIONS AND WARRANTIES	                               27

 8.1	         Corporate Existence, Power and Authority; Subsidiaries.	      27

 8.2	         Financial Statements; No Material Adverse Change.	            27

 8.3	         Chief Executive Office; Collateral Locations.	                28

 8.4	         Priority of Liens; Title to Properties.	                      28

 8.5	         Tax Returns.	                                                 28

 8.6	         Litigation.	                                                  28

 8.7	         Compliance with Other Agreements and Applicable Laws.	        29

 8.8	         Environmental Compliance.	                                    29

 8.9	         Employee Benefits.	                                           29

 8.10	        Accuracy and Completeness of Information.	                    30

 8.11	        Survival of Warranties; Cumulative.	                          31

 SECTION 9.  	AFFIRMATIVE AND NEGATIVE COVENANTS	                           31

 9.1	         Maintenance of Existence.	                                    31

 9.2	         New Collateral Locations.	                                    31

 9.3	         Compliance with Laws, Regulations, Etc.	                      31

 9.4	         Payment of Taxes and Claims.	                                 33

 9.5	         Insurance.	                                                   33

 9.6	         Financial Statements and Other Information.	                  34

 9.7	         Sale of Assets, Consolidation, Merger, Dissolution, Etc.	     35

 9.8	         Encumbrances.	                                                36

 9.9	         Indebtedness.	                                                36

 9.10	        Loans, Investments, Guarantees, Etc.	                         37

 9.11	        Dividends and Redemptions.	                                   37

 9.12	        Transactions with Affiliates.	                                37

 9.13	        Adjusted Tangible Net Worth.	                                 38

 9.14	        Costs and Expenses.	                                          38

 9.15	        Compliance with ERISA	                                        38

 9.16	        After Acquired Real Property.	                                39

 9.17	        Borrower's Leased Premises in Hope, Arkansas.	                39

 9.18	        Further Assurances.	                                          40

 SECTION 10. 	EVENTS OF DEFAULT AND REMEDIES	                               40

 10.1	        Events of Default.	                                           40

 10.2	        Remedies.	                                                    42

 SECTION 11.  JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW	 43

 11.1	        Governing Law; Choice of Forum; Service of Process; Jury
              Trial Waiver.	                                                43

 11.2	        Waiver of Notices.	                                           45

 11.3	        Amendments and Waivers.	                                      45

 11.4	        Waiver of Counterclaims.	                                     45

 11.5	        Indemnification.	                                             45

 SECTION 12.  TERM OF AGREEMENT; MISCELLANEOUS	                             46

 12.1	        Term.	                                                        46

 12.2	        Notices.	                                                     47

 12.3	        Partial Invalidity.                                           47

 12.4	        Successors.	                                                  48

 12.5	        Entire Agreement.	                                            48







                  INDEX TO EXHIBITS AND SCHEDULES


    Exhibit A		          Information Certificate

    Exhibit C-1		        Core Return and Stock Adjustment Policies

    Exhibit C-2	        	Compliance Certificate

    Schedule 8.4	       	Existing Liens

    Schedule 8.8		       Environmental Compliance

    Schedule 8.9(e)	     Contributions to Multiemployer Plans

    Schedule 9.9		       Permitted Debt

    Schedule 9.11		      Permitted Dividends and Other Distributions on
                         Capital Stock




</TEXT>
</DOCUMENT>
