UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

              For the quarterly period ended SEPTEMBER 30, 2000

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

             For the transition period from ________ to ________

                          Commission file number 1-9148

                                THE PITTSTON COMPANY
                               ---------------------
             (Exact name of registrant as specified in its charter)

                VIRGINIA                                     54-1317776
   -------------------------------                      -------------------
   (State or other jurisdiction of                       (I.R.S. Employer
   incorporation or organization)                       Identification No.)

              1801 BAYBERRY COURT, RICHMOND, VIRGINIA 23226-8100
              --------------------------------------------------
             (Address of principal executive offices) (Zip Code)

      Registrant's telephone number, including area code: (804) 289-9600
                                                          --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during  the  preceding  12  months  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ___

As of October 31, 2000, 51,777,782 shares of $1 par value Pittston Brink's Group
Common Stock were outstanding.

                                       1

                         PART I - FINANCIAL INFORMATION
                      THE PITTSTON COMPANY AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                September 30       December 31
                                                        2000              1999
- ------------------------------------------------------------------------------
                                                 (Unaudited)
                                                                 
ASSETS
Current assets:
Cash and cash equivalents                          $ 100,305           131,159
Accounts receivable (net of estimated
  uncollectible amounts: 2000 - $36,972;
  1999 - $36,238)                                    629,944           638,754
Inventories                                           35,791            43,979
Prepaid expenses and other current assets             49,415            37,756
Deferred income taxes                                 56,784            50,255
- ------------------------------------------------------------------------------
Total current assets                                 872,239           901,903
Property, plant and equipment, (net of
  accumulated depreciation, depletion and
  amortization: 2000 - $700,423; 1999 - $649,607)    928,894           930,476
Intangibles, net of accumulated amortization         290,499           298,501
Deferred pension assets                              116,912           122,476
Deferred income taxes                                 83,193            79,569
Other assets                                         135,372           135,659
- ------------------------------------------------------------------------------
Total assets                                      $2,427,109         2,468,584
- ------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings                              $ 111,562            90,085
Current maturities of long-term debt                 127,347            32,166
Accounts payable                                     286,265           301,194
Accrued liabilities                                  385,645           409,616
- ------------------------------------------------------------------------------
Total current liabilities                            910,819           833,061

Long-term debt, less current maturities              271,940           395,078
Postretirement benefits other than pensions          244,079           240,770
Workers' compensation and other claims                86,257            87,083
Deferred income taxes                                 16,583            16,272
Other liabilities                                    148,553           146,679
Commitments and contingent liabilities
Shareholders' equity:
Preferred stock, par value $10 per share:
  Authorized: 2,000 shares $31.25
  Series C Cumulative Convertible Preferred Stock;
  Issued and  outstanding:  2000 - 21 shares;
  1999 - 30 shares                                       214               296
Pittston Brink's Group Common Stock, par value
  $1 per share:
  Authorized: 100,000 shares; Issued and
  outstanding: 2000 - 51,778 shares;
  1999 - 40,861 shares - (Note 1)                     51,778            40,861
Pittston BAX Group Common Stock, par value
  $1 per share:
  Authorized: 50,000 shares - (Note 1)
  Issued and outstanding: 1999 - 20,825 shares             -            20,825
Pittston Minerals Group Common Stock, par value
  $1 per share:
  Authorized: 20,000 shares - (Note 1)
  Issued and outstanding: 1999 - 10,086 shares             -            10,086
Capital in excess of par value                       343,096           341,011
Retained earnings                                    457,550           443,349
Accumulated other comprehensive income               (81,383)          (56,528)
Employee benefits trust, at market value             (22,377)          (50,259)
- ------------------------------------------------------------------------------
Total shareholders' equity                           748,878           749,641
- ------------------------------------------------------------------------------
Total liabilities and shareholders' equity        $2,427,109         2,468,584
- ------------------------------------------------------------------------------

SEE ACCOMPANYING UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       2

                      THE PITTSTON COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (Unaudited)

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
                                     2000         1999        2000        1999
- ------------------------------------------------------------------------------
                                                         
Net sales                       $ 101,704      105,510     290,118     305,219
Operating revenues                953,598      938,598   2,817,447   2,666,059
- ------------------------------------------------------------------------------
Net sales and
  operating revenues            1,055,302    1,044,108   3,107,565   2,971,278

Costs and expenses:
Cost of sales                     105,333      113,283     307,607     324,698
Operating expenses                808,863      771,345   2,393,576   2,216,602
Selling, general and
  administrative expenses         123,051      121,891     366,461     346,846
Restructuring and other credits         -         (851)          -        (851)
- ------------------------------------------------------------------------------
Total costs and expenses        1,037,247    1,005,668   3,067,644   2,887,295
Other operating income, net         5,428        4,953      13,430      14,270
- ------------------------------------------------------------------------------
Operating profit                   23,483       43,393      53,351      98,253
Interest income                     1,676        1,520       5,202       4,106
Interest expense                  (12,100)      (9,240)    (32,690)    (28,747)
Other income (expense), net        (1,484)         111        (560)       (164)
- ------------------------------------------------------------------------------
Income before income taxes         11,575       35,784      25,303      73,448
Provision for income taxes          3,820       11,760       8,350      20,842
- ------------------------------------------------------------------------------
Net income                          7,755       24,024      16,953      52,606
Preferred stock dividends,
  net (Note 6)                      1,503        (231)       1,041      17,852
- ------------------------------------------------------------------------------
Net income attributed to common
  shares                        $   9,258       23,793      17,994      70,458
- ------------------------------------------------------------------------------
Net income per common share:
  Basic                         $    0.18          N/A        0.36         N/A
  Diluted                            0.15          N/A        0.34         N/A
- ------------------------------------------------------------------------------
Pittston Brink's Group
  (Notes 1 and 2):
Net income per common share:
  Basic                         $     N/A         0.56         N/A        1.50
  Diluted                             N/A         0.56         N/A        1.49
- ------------------------------------------------------------------------------
Pittston BAX Group (Notes 1 and 2):
Net income per common share:
  Basic                         $     N/A         0.45         N/A        0.63
  Diluted                             N/A         0.45         N/A        0.63
- ------------------------------------------------------------------------------
Pittston Minerals Group (Notes 1 and 2):
Net loss per common share:
  Basic                         $     N/A        (0.77)        N/A       (0.01)
  Diluted                             N/A        (0.77)        N/A       (1.87)
- ------------------------------------------------------------------------------
Pro forma net income per common
share (Notes 1 and 2):
  Basic                               N/A         0.48         N/A        1.44
  Diluted                             N/A         0.48         N/A        1.07
- ------------------------------------------------------------------------------
Comprehensive income (loss)     $  (2,484)      22,845      (6,861)     63,811
- ------------------------------------------------------------------------------

SEE ACCOMPANYING UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       3

                      THE PITTSTON COMPANY AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (Unaudited)

                                                                   Nine Months
                                                            Ended September 30
                                                              2000        1999
- ------------------------------------------------------------------------------
                                                                  
Cash flows from operating activities:
Net income                                               $  16,953      52,606
Adjustments to reconcile net income to net cash
  provided by operating activities:
  Noncash charges and other write-offs                         442         362
  Depreciation, depletion and amortization                 150,257     133,449
  Aircraft heavy maintenance expense                        29,312      36,664
  Provision for deferred income taxes                       (6,015)        746
  Provision for pensions, noncurrent                         2,068       7,732
  Provision for uncollectible accounts receivable           15,885      12,475
  Minority interest expense                                  1,942         681
  Equity in earnings of unconsolidated affiliates,
    net of dividends received                               (2,892)     (2,633)
  Other operating, net                                       8,629       7,172
  Change in operating assets and liabilities,
    net of effects of acquisitions and dispositions:
    Increase in accounts receivable                         (2,158)    (14,444)
    (Increase) decrease in inventories                       8,412      (4,166)
    Increase in prepaid expenses and other current assets   (5,318)     (2,001)
    Increase in other assets                               (11,144)     (7,828)
    Decrease in accounts payable and accrued liabilities   (32,961)     (2,382)
    (Decrease) increase in other liabilities                 2,107        (256)
    Decrease in workers' compensation and other claims,
    noncurrent                                              (1,359)     (5,478)
    Other, net                                               4,172          64
- ------------------------------------------------------------------------------
Net cash provided by operating activities                  178,332     212,763
- ------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property, plant and equipment                (164,005)   (196,951)
Aircraft heavy maintenance expenditures                    (41,808)    (51,490)
Acquisitions, net of cash acquired and related
  contingency payments                                      (3,880)       (429)
Proceeds from disposal of property, plant and equipment      4,371       8,177
Proceeds from disposition of investments                     2,275       1,143
Other, net                                                   1,245       5,932
- ------------------------------------------------------------------------------
Net cash used by investing activities                     (201,802)   (233,618)
- ------------------------------------------------------------------------------
Cash flows from financing activities:
Increase (decrease) in short-term borrowings                21,376      (6,502)
Additions to long-term debt                                 96,635     125,524
Reductions of long-term debt                              (119,491)    (74,168)
Repurchase of stock of the Company                          (2,162)    (23,494)
Proceeds from exercise of stock options                        482       2,156
Dividends paid                                              (4,224)     (7,670)
- ------------------------------------------------------------------------------
Net cash provided (used) by financing activities            (7,384)     15,846
- ------------------------------------------------------------------------------
Net decrease in cash and cash equivalents                  (30,854)     (5,009)
Cash and cash equivalents at beginning of period           131,159      83,894
- ------------------------------------------------------------------------------
Cash and cash equivalents at end of period               $ 100,305      78,885
- ------------------------------------------------------------------------------

SEE ACCOMPANYING UNAUDITED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

                                       4

                      THE PITTSTON COMPANY AND SUBSIDIARIES
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (Unaudited)

(1)   The  Pittston  Company  (the  "Company")  has five  operating  segments  -
      Brink's,  Incorporated  ("Brink's"),  Brink's Home Security, Inc. ("BHS"),
      BAX  Global  Inc.  ("BAX  Global"),   Pittston  Coal   Operations   ("Coal
      Operations")  and Other  Operations  which  consists of  Pittston  Mineral
      Ventures ("Mineral  Ventures") and the Company's timber, gas and equipment
      rebuild operations  (collectively,  "Allied  Operations").  On December 6,
      1999,  the  Company  announced  its  intention  to exit the coal  business
      through the sale of coal mining operations and reserves. Until the Company
      meets the  measurement  date criteria under  Accounting  Principles  Board
      ("APB")  Opinion No. 30,  "Reporting the Results of Operations - Reporting
      the Effects of Disposal  of a Segment of a  Business,  and  Extraordinary,
      Unusual  and  Infrequently   Occurring  Events  and  Transactions",   Coal
      Operations  will continue to be reported as an operating  segment.  Losses
      may be recorded upon the future disposition of the coal assets,  including
      additional  accruals primarily related to certain  postretirement  medical
      and multi-employer plans, as well as the net losses expected to occur from
      the measurement date to the closing date of the sale.

      The accompanying  unaudited  consolidated  financial  statements have been
      prepared in accordance with generally accepted  accounting  principles for
      interim  financial  reporting  and  with  applicable  quarterly  reporting
      regulations of the Securities and Exchange Commission.  Accordingly,  they
      do not  include all of the  information  and notes  required by  generally
      accepted accounting principles for complete financial  statements.  In the
      opinion of management,  all  adjustments  (consisting of normal  recurring
      accruals) considered necessary for a fair presentation have been included.
      Certain  prior  period  amounts have been  reclassified  to conform to the
      current period's financial statement  presentation.  Operating results for
      the interim periods of 2000 are not necessarily  indicative of the results
      that may be expected for the year ending  December  31, 2000.  For further
      information,  refer to the consolidated  financial  statements and related
      notes  included in the  Company's  annual report on Form 10-K for the year
      ended December 31, 1999.

      As previously  reported,  prior to January 14, 2000, the Company had three
      classes of common stock:  Pittston  Brink's  Group Common Stock  ("Brink's
      Stock"),  Pittston  BAX Group  Common  Stock ("BAX  Stock")  and  Pittston
      Minerals  Group Common Stock  ("Minerals  Stock"),  which were designed to
      provide  shareholders  with  securities  reflecting the performance of the
      Brink's Group, the BAX Group and the Minerals Group, respectively.

      On December 6, 1999,  the Company  announced  that its Board of  Directors
      (the "Board") had approved the  elimination  of the tracking stock capital
      structure by an exchange of all  outstanding  shares of Minerals Stock and
      BAX Stock for shares of Brink's Stock (the "Exchange").  The Exchange took
      place on January 14, 2000 (the "Exchange Date"), on which date, holders of
      Minerals  Stock  received  0.0817 share of Brink's Stock for each share of
      their Minerals  Stock;  and holders of BAX Stock received  0.4848 share of
      Brink's  Stock for each share of their BAX Stock based on the  shareholder
      approved formula and calculated as follows:

      (PER SHARE PRICES)            Brink's Stock    BAX Stock    Minerals Stock
      --------------------------------------------------------------------------

      Ten day average price*          $  18.92       $   7.98        $    1.34
      Exchange factor                     1.00           1.15             1.15
      --------------------------------------------------------------------------
      Fair Market Value, as defined*  $  18.92       $   9.17        $    1.54
      Exchange ratio                       N/A         0.4848           0.0817
      --------------------------------------------------------------------------

                                       5

      (PER SHARE PRICES)            Brink's Stock    BAX Stock    Minerals Stock
      --------------------------------------------------------------------------
                                                            
      Closing prices:
        December 3, 1999              $ 18.375       $ 10.0625       $   1.125
        December 6, 1999                21.500         10.1250           1.625
      --------------------------------------------------------------------------

      *The "Fair Market  Value" of each class of common stock was  determined by
      taking the average  closing price of that class of common stock for the 10
      trading  days  beginning  30  business  days  prior  to the  first  public
      announcement of the exchange proposal. Since the first public announcement
      was made on December 6, 1999,  the average  closing  price was  calculated
      during the 10 trading days beginning  October 22, 1999 and ending November
      4, 1999.

      From and after the Exchange  Date,  Brink's Stock is the only  outstanding
      class of common  stock of the  Company and  continues  to trade on the New
      York Stock  Exchange  under the symbol "PZB".  Prior to the Exchange Date,
      Brink's Stock reflected the  performance of the Brink's Group only;  after
      the Exchange Date,  Brink's Stock reflects the  performance of the Company
      as a whole.  Shares of Brink's  Stock after the Exchange  are  hereinafter
      referred to as "Pittston Common Stock".

      As a result of the Exchange on January 14, 2000, the Company issued 10,916
      shares  of  Pittston  Common  Stock,  which  consists  of 9,490  shares of
      Pittston  Common Stock equal to 100% of the Fair Market Value, as defined,
      of all BAX Stock and Minerals  Stock and 1,426  shares of Pittston  Common
      Stock equal to the  additional  15% of the Fair Market  Value of BAX Stock
      and Minerals Stock exchanged pursuant to the  above-described  formula. Of
      the 10,916  shares  issued,  10,196  shares  were issued to holders of BAX
      Stock  and  Minerals  Stock and 720  shares  were  issued to The  Pittston
      Company Employee Benefits Trust (the "Trust").

      Shares issued to holders of BAX Stock and Minerals Stock  (excluding those
      shares issued to the Trust) were distributed as follows:

                                                      Holders of    Holders of
      (IN THOUSANDS EXCEPT PER SHARE PRICES)          BAX Stock   Minerals Stock
      --------------------------------------------------------------------------

      Shares outstanding on January 13, 2000            19,475         9,273

      Brink's Stock issued pursuant to the Exchange:
        Based on 100% of Fair Market Value               8,207           657
        Based on 15% of Fair Market Value                1,233            99
      --------------------------------------------------------------------------
      Total shares issued on January 14, 2000            9,440           756
      Brink's Stock closing price per
        share - December 3, 1999                     $  18.375        18.375
      --------------------------------------------------------------------------
      Value as of December 3, 1999 of Brink's
        Stock issued pursuant to the Exchange        $ 173,460        13,892
      --------------------------------------------------------------------------

      As set forth in the Company's  Articles of  Incorporation  approved by the
      shareholders, in the event of a dissolution,  liquidation or winding up of
      the Company,  holders of Brink's Stock, BAX Stock and Minerals Stock would
      have  shared  on a per share  basis,  the  funds,  if any,  remaining  for
      distribution  to the common  shareholders.  In the case of Minerals Stock,
      such percentage had been set, using a nominal number of shares of Minerals
      Stock of 4,203 (the  "Nominal  Shares") in excess of the actual  number of
      shares of Minerals Stock  outstanding.  The liquidation  percentages  were
      subject to adjustment  in  proportion to the relative  change in the total
      number of shares of Brink's Stock,  BAX Stock and Minerals  Stock,  as the
      case may be, then  outstanding  to the total number of shares of all other
      classes of common stock then  outstanding  (which  totals,  in the case of
      Minerals Stock, shall include the Nominal Shares). As of December 3, 1999,
      such liquidation  percentages would have been  approximately  54%, 27% and
      19%  for  holders  of  Brink's  Stock,   BAX  Stock  and  Minerals  Stock,
      respectively.  Including  the  additional  shares  issued  pursuant to the
      Exchange, the liquidation percentages for former holders of Brink's Stock,
      BAX Stock and Minerals Stock,  respectively,  as of January 14, 2000 would
      have been approximately 79%, 19% and 2%.

                                       6

      Upon  completion  of the Exchange on January 14,  2000,  there were 49,484
      issued and  outstanding  shares of  Pittston  Common  Stock for use in the
      calculation of net income per common share.

(2)   The following are  reconciliations  between the  calculations of basic and
      diluted net income per share for the three and nine months ended September
      30,  2000 and the pro forma basic and diluted net income per share for the
      three and nine months ended September 30, 1999.

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
      The Company                     2000        1999         2000       1999
      ------------------------------------------------------------------------------
                                           (Pro forma)             (Pro forma)
                                                            
      Numerator:
      Net income - Basic           $ 7,755      24,024       16,953     52,606
      Convertible Preferred Stock
        dividends, net               1,503        (231)       1,041     17,852
      ------------------------------------------------------------------------------
      Basic net income per
        share numerator              9,258      23,793       17,994     70,458
      Effect of dilutive securities:
        Convertible Preferred Stock
        dividends, net              (1,503)          -       (1,041)   (17,852)
      ------------------------------------------------------------------------------
      Diluted net income per
        share numerator            $ 7,755      23,793       16,953     52,606

      Denominator:
      Basic weighted average common
        shares outstanding          50,235      49,223       49,939     49,017
      Effect of dilutive securities:
        Stock options                   35         161           43        194
        Assumed conversion of the
        Convertible Preferred Stock     36           -           37         66
      ------------------------------------------------------------------------------
      Diluted weighted average
        common shares outstanding   50,306      49,384       50,019     49,277
      ------------------------------------------------------------------------------

      Options to purchase  2,767  shares of  Pittston  Common  Stock,  at prices
      between  $15.91 and $315.06 per share and options to purchase 2,970 shares
      of Pittston  Common Stock,  at prices between $16.19 and $315.06 per share
      were  outstanding  during the three and nine months  ended  September  30,
      2000,  respectively,  but were not included in the  computation of diluted
      net income per share  because the  options'  exercise  prices were greater
      than the average  market price of the common shares,  and  therefore,  the
      effect would be antidilutive.

      For  purposes  of  calculating  the  September  30,  1999 pro forma  basic
      weighted average common shares  outstanding and the basic weighted average
      common shares  outstanding  for the period from January 1, 2000 to January
      13, 2000, the Company's basic weighted  average common shares  outstanding
      for BAX Stock and Minerals  Stock were  converted  into shares of Pittston
      Common  Stock  by  multiplying  such  average  shares  outstanding  by the
      respective  exchange  ratios  referred  to in  Note  1.  Included  in  the
      Company's   1999  pro  forma  diluted   weighted   average  common  shares
      outstanding and 2000 diluted  weighted  average common shares  outstanding
      are  converted  weighted  average  stock  options and  converted  weighted
      average Series C Cumulative  Preferred Stock (the  "Convertible  Preferred
      Stock")  to the  extent  that such  conversions  are  dilutive.  Pro forma
      converted  weighted options for 1999 and equivalent  Pittston Common Stock
      options outstanding, on BAX Stock and Minerals Stock, from January 1, 2000
      to January 13, 2000 are calculated by multiplying  those weighted  average
      options  having an exercise  price less than the average fair market value
      for Brink's Stock, BAX Stock and Minerals Stock by the respective exchange
      ratios. Pro forma converted

                                       7

      weighted   average   Convertible   Preferred   Stock  is   calculated   by
      multiplying  the  weighted  average  Convertible  Preferred Stock  by  the
      Minerals exchange ratio referred to in Note 1.

      Excluded  from the  Company's  1999 pro forma diluted net income per share
      calculations are converted options to the extent that such conversions are
      antidilutive.  Converted  options  are  calculated  by  multiplying  those
      options  having an exercise  price  greater  than the average  fair market
      value for Brink's  Stock,  BAX Stock and Minerals  Stock by the respective
      exchange  ratios.  Converted  exercise  prices related to these  converted
      options are  calculated by dividing the exercise  price of Brink's  Stock,
      BAX Stock and Minerals Stock by the respective exchange ratios.

      Pro forma options to purchase  2,447 shares of Pittston  Common Stock,  at
      prices  between  $19.09  and  $315.06  per share and pro forma  options to
      purchase 2,318 shares of Pittston  Common Stock,  at prices between $19.41
      and  $315.06 per share were  outstanding  during the three and nine months
      ended  September  30,  1999,  respectively,  but were not  included in the
      computation of diluted net income per share because the options'  exercise
      prices were  greater than the average  market  price of the common  shares
      and,  therefore,  the effect would be antidilutive.  The conversion of the
      Convertible Preferred Stock to 38 shares of Pittston Common Stock has been
      excluded in the  computation of diluted net income per share for the three
      months  ended  September  30,  1999  because  the  effect  of the  assumed
      conversion would be antidilutive.

      The shares of Pittston  Common  Stock held in the Trust are subject to the
      treasury  stock method and  effectively  are not included in the basic and
      diluted net income per share  calculations.  As of September  30, 2000 and
      1999, 1,444 and 2,407 pro forma shares,  respectively,  of Pittston Common
      Stock remained in the Trust.

      The following are reconciliations  between the Group calculations of basic
      and diluted net income (loss) per share by Group:

                                                                  Three Months
                                                      Ended September 30, 1999
                                              Brink's         BAX     Minerals
                                                Group       Group        Group
      --------------------------------------------------------------------------
                                                               
      Numerator:
      Net income (loss)                     $  22,031       8,672       (6,679)
      Convertible Preferred Stock
        dividends, net                              -           -         (231)
      --------------------------------------------------------------------------
      Basic net income (loss) per
        share numerator                        22,031       8,672       (6,910)
      Effect of dilutive securities:
        Convertible Preferred Stock
        dividends, net                              -           -            -
      --------------------------------------------------------------------------
      Diluted net income (loss) per
        share numerator                     $  22,031       8,672       (6,910)
      Denominator:
      Basic weighted average common
        shares outstanding                     39,122      19,316        9,014
      Effect of dilutive securities:
        Stock options                             147          29            -
      Assumed conversion of the
        Convertible Preferred Stock                 -           -            -
      --------------------------------------------------------------------------
      Diluted weighted average common
        shares outstanding                     39,269      19,345        9,014
      --------------------------------------------------------------------------

                                       8

                                                                   Nine Months
                                                      Ended September 30, 1999
                                              Brink's         BAX     Minerals
                                                Group       Group        Group
      --------------------------------------------------------------------------
                                                              
      Numerator:
      Net income (loss)                     $  58,434      12,144      (17,972)
      Convertible Preferred Stock
        dividends, net                              -           -       17,852
      --------------------------------------------------------------------------
      Basic net income (loss) per
        share numerator                        58,434      12,144         (120)
      Effect of dilutive securities:
        Convertible Preferred Stock
        dividends, net                              -           -      (17,852)
      --------------------------------------------------------------------------
      Diluted net income (loss) per
        share numerator                      $ 58,434      12,144      (17,972)
      Denominator:
      Basic weighted average common
        shares outstanding                     39,001      19,180        8,786
      Effect of dilutive securities:
        Stock options                             181          26            1
        Assumed conversion of the Convertible
         Preferred Stock                            -           -          813
      --------------------------------------------------------------------------
      Diluted weighted average common
        shares outstanding                     39,182      19,206        9,600
      --------------------------------------------------------------------------

      Options to  purchase  1,410  shares of Brink's  Stock,  at prices  between
      $25.57 and  $39.56  per share and  options  to  purchase  1,164  shares of
      Brink's  Stock,  at prices  between  $26.69 and  $39.56  per  share,  were
      outstanding  during the three and nine months  ended  September  30, 1999,
      respectively,  but were not  included  in the  computation  of diluted net
      income per share  because the options'  exercise  prices were greater than
      the average market price of the common shares and,  therefore,  the effect
      would be antidilutive.

      Options to purchase 2,017 and 2,263 shares of BAX Stock, at prices between
      $9.41 and  $27.91 per share,  were  outstanding  during the three and nine
      months ended  September 30, 1999,  respectively,  but were not included in
      the  computation  of diluted  net income per share  because  the  options'
      exercise  prices were greater than the average  market price of the common
      shares and, therefore, the effect would be antidilutive.

      Options to purchase 722 shares of Minerals  Stock, at prices between $1.56
      and $25.74 per  share,  were  outstanding  during the three  months  ended
      September 30, 1999 but were not included in the computation of diluted net
      loss per share  because the effect of all options  would be  antidilutive.
      Options to purchase 698 shares of Minerals  Stock, at prices between $1.81
      and $25.74 per  share,  were  outstanding  during  the nine  months  ended
      September 30, 1999,  but were not included in the  computation  of diluted
      net loss per share because the options'  exercise prices were greater than
      the average market price of the common shares,  and therefore,  the effect
      would be antidilutive.

      The  conversion  of the  Convertible  Preferred  Stock  to 460  shares  of
      Minerals  Stock has been excluded in the  computation  of diluted net loss
      per share in the three months ended  September 30, 1999 because the effect
      of the assumed conversion would be antidilutive.

      The  shares of Brink's  Stock,  BAX Stock and  Minerals  Stock held in the
      Trust are subject to the  treasury  stock method and  effectively  are not
      included  in  the  basic  and   diluted   net  income   (loss)  per  share
      calculations.  As of September  30, 1999,  1,691 shares of Brink's  Stock,
      1,466 shares of BAX Stock and 69 shares of Minerals  Stock remained in the
      Trust.

                                       9

(3)   Depreciation,  depletion and amortization of property, plant and equipment
      totaled $45,788 and $138,015 in the third quarter and first nine months of
      2000, respectively,  compared to $39,671 and $115,236 in the third quarter
      and first nine months of 1999, respectively.

(4)   Cash payments made for interest and income taxes, net of refunds received,
      were as follows:

                                         Three Months              Nine Months
                                   Ended September 30       Ended September 30
                                     2000        1999         2000        1999
      --------------------------------------------------------------------------
                                                            
      Interest                $    12,653       9,969       35,131      29,335
      Income taxes            $     6,228       9,052       25,030      31,483
      --------------------------------------------------------------------------

(5)   The  cumulative  impact of  foreign  currency  translation  deducted  from
      shareholders'  equity was $77,956 and  $59,623 at  September  30, 2000 and
      December 31, 1999, respectively. The cumulative impact of cash flow hedges
      deducted from and added to  shareholders'  equity was $4,118 and $2,540 at
      September 30, 2000 and December 31, 1999, respectively.

(6)   Under the share repurchase  programs  authorized by the Board, the Company
      purchased shares in the periods presented as follows:

                                         Three Months              Nine Months
                                   Ended September 30       Ended September 30
      (IN THOUSANDS)                 2000        1999         2000        1999
      --------------------------------------------------------------------------
                                                            
      Pittston Common Stock:
        Shares                          -         N/A            -         N/A
        Cost                      $     -         N/A            -         N/A
      Brink's Stock:
        Shares                        N/A           -          N/A       100.0
        Cost                      $   N/A           -          N/A       2,514
      Convertible Preferred Stock:
        Shares                        8.1           -           8.1       83.9
        Cost                      $ 2,162           -         2,162     20,980
      Excess carrying amount (a)  $ 1,734           -         1,734     19,201
      --------------------------------------------------------------------------

      (a) The excess of the carrying amount of the  Convertible  Preferred Stock
      over the cash paid to holders for  repurchases  made  during the  periods.
      This  amount  is  deducted  from  preferred  dividends  in  the  Company's
      Consolidated Statement of Operations.

      In March  1999,  the  Company  purchased  83.9  shares (or 839  depositary
      shares) of its  Convertible  Preferred  Stock for $20,980 and in September
      2000,  the Company  purchased 8.1 shares (or 81 depositary  shares) of its
      Convertible Preferred Stock for $2,162. The Convertible Preferred Stock is
      convertible  into Pittston Common Stock and has an annual dividend rate of
      $31.25  per  share.   Preferred   dividends   included  on  the  Company's
      Consolidated  Statement of Operations  for the three and nine months ended
      September 30, 2000 and the nine months ended September 30, 1999 are net of
      the $1,734 and $19,201,  which is the excess of the  carrying  amount over
      the cash paid to the holders of the Convertible Preferred Stock.

      At September 30, 2000, the Company had the remaining authority to purchase
      over time 900 shares of Pittston Common Stock and an additional  $5,394 of
      its Convertible  Preferred  Stock. The remaining  aggregate  purchase cost
      limitation for all common stock was $22,184 at September 30, 2000.

                                       10

(7)   On  October  3, 2000,  the  Company  entered  into a $370  million  credit
      agreement  with a syndicate of banks to replace the existing  $350 million
      credit  agreement  that was due to  expire  in May  2001.  The new  credit
      agreement includes a $185 million three year revolving credit facility and
      a $185 million short-term revolving credit facility,  both of which permit
      additional  borrowings,  repayments  and  reborrowings  up to the maximum.
      Among the covenants in the new credit  agreement are covenants  that limit
      the  Company's  maximum  allowable  indebtedness  and  provide for minimum
      coverage of interest  costs.  The  maturity  dates of the  short-term  and
      long-term portions of the credit agreement are October 2, 2001 and October
      3, 2003, respectively.

(8)   Staff  Accounting  Bulletin  ("SAB") No. 101, which provides  interpretive
      guidance on applying generally accepted  accounting  principles to revenue
      recognition in financial  statements will be implemented by the Company in
      the fourth quarter of 2000. The Company is currently assessing SAB No. 101
      as well as written guidance regarding its implementation  which was issued
      in late  October  2000.  As such,  no final  determination  has been  made
      whether the SAB will  materially  impact  (positively or  negatively)  the
      reported  results of the Company.  It is anticipated  that the impact,  if
      any,  related to the  implementation  of SAB No. 101 would only affect BHS
      and would be recorded as a change in accounting principle as of January 1,
      2000, as is called for in the SAB.

      Emerging Issues Task Force ("EITF") No. 00-10 "Accounting for Shipping and
      Handling Fees and Costs" will be  implemented by the Company in the fourth
      quarter of 2000. EITF No. 00-10 will require the Company's Coal Operations
      to begin reporting fees charged for certain shipping and handling activity
      on a disaggregated  basis (i.e.  separately report the associated revenues
      and costs)  whereas such fees are  currently  being netted  against  gross
      sales to arrive at reported  net sales.  The  implementation  of this EITF
      will not impact the  operating  profit or net income of the  Company as it
      will increase sales and costs of sales by equivalent amounts.

                                       11

                      THE PITTSTON COMPANY AND SUBSIDIARIES
        MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
                             AND FINANCIAL CONDITION

The following  discussion is a summary of the key factors  management  considers
necessary or useful in reviewing the Company's results of operations,  liquidity
and capital resources.

                              RESULTS OF OPERATIONS

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
(IN THOUSANDS)                        2000        1999        2000        1999
- ------------------------------------------------------------------------------
                                                         
Net sales and operating revenues:
Business and security services:
  Brink's                     $    370,803     347,930   1,088,962   1,013,279
  BHS                               61,783      58,124     181,988     170,261
  BAX Global                       521,012     532,544   1,546,497   1,482,519
- ------------------------------------------------------------------------------
Total business and security
  services                         953,598     938,598   2,817,447   2,666,059
- ------------------------------------------------------------------------------
Natural resources:
  Coal Operations                   91,294      99,417     259,673     288,540
  Other Operations                  10,410       6,093      30,445      16,679
- ------------------------------------------------------------------------------
Total natural resources            101,704     105,510     290,118     305,219
- ------------------------------------------------------------------------------
Net sales and operating
  revenues                    $  1,055,302   1,044,108   3,107,565   2,971,278
- ------------------------------------------------------------------------------

Operating profit (loss):
Business and security services:
  Brink's                     $     32,251      27,320      77,754      69,820
  BHS                               13,957      12,663      43,826      41,000
  BAX Global                       (12,651)     18,177     (29,058)     31,365
- ------------------------------------------------------------------------------
Total business and security
  services                          33,557      58,160      92,522     142,185
- ------------------------------------------------------------------------------
Natural resources:
  Coal Operations                   (7,430)     (8,816)    (29,581)    (27,847)
  Other Operations                   2,149        (466)      5,877         219
- ------------------------------------------------------------------------------
Total natural resources             (5,281)     (9,282)    (23,704)    (27,628)
- ------------------------------------------------------------------------------
Segment operating profit            28,276      48,878      68,818     114,557
General corporate expense           (4,793)     (5,485)    (15,467)    (16,304)
- ------------------------------------------------------------------------------
Operating profit              $     23,483      43,393      53,351      98,253
- ------------------------------------------------------------------------------

The Pittston  Company (the  "Company")  has five  operating  segments - Brink's,
Incorporated  ("Brink's"),  Brink's Home Security, Inc. ("BHS"), BAX Global Inc.
("BAX  Global"),   Pittston  Coal  Operations  ("Coal   Operations")  and  Other
Operations which consists of Pittston Mineral Ventures ("Mineral  Ventures") and
the  Company's  timber,  gas and  equipment  rebuild  operations  (collectively,
"Allied Operations").

On January 14, 2000, the Company completed an exchange of its Pittston BAX Group
Common Stock ("BAX Stock") and Pittston  Minerals Group Common Stock  ("Minerals
Stock") into Pittston Brink's Group Common Stock ("Brink's Stock"),  at exchange
ratios of 0.4848  share of Brink's  Stock for each share of BAX Stock and 0.0817
share  of  Brink's  Stock  for each  share of  Minerals  Stock.  Brink's  Stock,
hereinafter  referred to as Pittston Common Stock, now constitutes the Company's
only class of common stock and continues to trade on the New York Stock Exchange
under the symbol "PZB". See the "Capitalization" section for further discussion.

                                       12

On  December 6, 1999,  the  Company  announced  its  intention  to exit the coal
business  through the sale of coal mining  operations  and  reserves.  Until the
Company meets the measurement  date criteria under  Accounting  Principles Board
("APB")  Opinion No. 30,  "Reporting  the Results of  Operations - Reporting the
Effects of Disposal of a Segment of a Business,  and Extraordinary,  Unusual and
Infrequently  Occurring Events and Transactions",  Coal Operations will continue
to be reported as an operating  segment.  Losses may be recorded upon the future
disposition of the coal assets,  including additional accruals primarily related
to certain  postretirement  medical and multi-employer plans, as well as the net
losses  expected to occur from the  measurement  date to the closing date of the
sale.  The  process  of  finding  a buyer  or  buyers  for the  coal  assets  is
continuing,  but the  disposal is not likely to be  concluded  before the end of
2000.

In the third  quarter of 2000,  the Company  reported net income of $7.8 million
compared  with net  income  of  $24.0  million  in the  third  quarter  of 1999.
Operating profit totaled $23.5 million in the 2000 third quarter, a shortfall of
$19.9 million,  as compared with $43.4 million in the same period of 1999. Lower
operating  results  for BAX Global  ($30.8  million)  were  partially  offset by
increases in operating  results for Brink's  ($4.9  million),  Other  Operations
($2.6 million), Coal Operations ($1.4 million) and BHS ($1.3 million) as well as
lower  corporate  expenses ($0.7 million).  See further  discussion of operating
segments' financial results below.

In the first  nine  months of 2000,  the  Company  reported  net income of $17.0
million compared with $52.6 million in the first nine months of 1999.  Operating
profit  totaled  $53.4  million in the first nine months of 2000  compared  with
$98.3  million in the prior  year's  comparable  period,  a  reduction  of $44.9
million.  Lower  operating  results  at BAX  Global  ($60.4  million)  and  Coal
Operations ($1.7 million) were partially offset by increases in operating profit
for Brink's  ($7.9  million),  Other  Operations  ($5.7  million)  and BHS ($2.8
million)  as well as  lower  corporate  expenses  ($0.8  million).  See  further
discussion of operating segments' financial results below.

Preferred  dividends  included on the Company's  Statement of Operations for the
three  and nine  months  ended  September  30,  2000 and the nine  months  ended
September  30, 1999 were net of $1.7  million and $19.2  million,  respectively,
which represents the excess of the carrying amount of the Convertible  Preferred
Stock over the cash paid to the holders of the  Convertible  Preferred Stock for
repurchases made during the period.

BRINK'S
The following is a table of selected financial data for Brink's on a comparative
basis:

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
(IN THOUSANDS)                        2000        1999        2000        1999
- ------------------------------------------------------------------------------
                                                         
Operating revenues:
  North America (a)             $  160,424      146,807    475,099     426,531
  International                    210,379      201,123    613,863     586,748
- ------------------------------------------------------------------------------
Total operating revenues        $  370,803      347,930  1,088,962   1,013,279
- ------------------------------------------------------------------------------
Operating profit:
  North America (a)             $   16,327       12,038     41,370      32,087
  International                     15,924       15,282     36,384      37,733
- ------------------------------------------------------------------------------
Total segment profit            $   32,251       27,320     77,754      69,820
- ------------------------------------------------------------------------------
Depreciation and amortization   $   13,820       13,619     44,431      38,877
Cash capital expenditures           16,714       19,771     53,980      63,686
- ------------------------------------------------------------------------------

(a)  Comprises USA and Canada.

Brink's  worldwide  consolidated  revenues  totaled  $370.8 million in the third
quarter of 2000,  a 7%  increase  over third  quarter  1999  revenues  of $347.9
million.  Brink's operating profit of $32.3 million in the third quarter of 2000
represented an 18% increase from the $27.3 million  reported in the prior year's
quarter.  The increase in operating  profit is due to a $4.9 million  settlement
associated with an insurance  recoverable related to a prior year's robbery loss
in North America.

                                       13

The increase in Brink's  revenues was  attributable  to both North  American and
International operations.  Increased revenues in North America primarily related
to new business from armored car  operations.  International  revenue  increases
were primarily  attributable to Latin American  operations,  partially offset by
lower revenue from  European  operations.  The revenue  decreases in Europe were
primarily due to the impact of a weaker Euro partially offset by improvements in
the French  operations.  In the same comparative  periods,  foreign  translation
effects,  primarily the impact of the US dollar versus the European  currencies,
reduced reported revenues by approximately $15 million.

Brink's  operating  profit  increased  $4.9 million in the third quarter of 2000
versus the same  quarter of 1999.  Operating  profit in both North  American and
International  operations  increased  over the prior  year.  The North  American
operating  profits of $16.3  million  included the  aforementioned  $4.9 million
insurance  settlement.  While revenue growth in North America  remained  strong,
lower operating profits (excluding the settlement) resulted from increased labor
costs in expanding markets for armored car operations  (including ATM services),
increased  workers'  compensation  costs  and  lower  results  from air  courier
operations.   Increased  operating  profit  for  International   operations  was
attributable to improved  results in Asia/Pacific  and Latin America,  partially
offset by lower  results in Europe,  primarily  due to the  effects of the lower
Euro. The improved results in Asia/Pacific were largely due to a decrease in the
losses  in  Australia.   Latin  America  reported  increased  operating  profits
primarily due to improvements in operating performance in Argentina and Chile.

Brink's worldwide  consolidated  revenues totaled $1.1 billion in the first nine
months of 2000,  a $75.7  million  (7%)  increase  over the same period of 1999.
Brink's  operating  profit of $77.8  million  in the first  nine  months of 2000
represented  an 11% increase over the $69.8  million  reported in the prior year
period.

The increase in Brink's  revenues for the first nine months of 2000  compared to
the same period of 1999 was  attributable to both North American ($48.6 million)
and  International  operations  ($27.1  million).  Increased  revenues  in North
America primarily  related to growth in the armored car business.  International
revenue  increases were  attributable to operations in Latin America  (primarily
Brazil) and  Asia/Pacific,  partially offset by decreases in Europe,  due to the
effects  of  the  lower  Euro  partially   offset  by  improvements  in  France.
Improvements in Asia/Pacific stemmed from Australia and Hong Kong. International
revenues  (primarily Europe) for the nine month period were negatively  impacted
by the  strong US dollar  (approximately  $45  million).  During  the first nine
months of 2000, as compared to 1999,  the  acceleration  of reporting to current
month  reporting  for  Brink's  subsidiary  in France  increased  revenue by $22
million.  This increase was partially  offset by the effects of an industry-wide
strike in France in May, estimated at approximately $8 million.

The Brink's  operating  profit of $77.8 million,  an increase of $7.9 million in
the  first  nine  months  of 2000  compared  to the same  period  of  1999,  was
attributable to operations in North America as  International  operating  profit
decreased slightly.  North American operating profit for the nine months of 2000
included the  aforementioned  $4.9 million  insurance  settlement.  In addition,
higher North American operating profits also reflected improved profitability of
armored car operations largely due to increased volumes, and to a lesser extent,
improved results in currency and coin processing  services,  partially offset by
lower air courier results.  International operating profits reflect improvements
in the  Asia/Pacific  region  primarily  due to a  decrease  in  the  losses  in
Australia  and  improved  results in Hong Kong.  Latin  America  reported  lower
operating  profits  primarily  due to  overall  weaker  business  conditions  in
Venezuela,  which was partially offset by improvements in operating  performance
in Brazil and Argentina.  Operating profit in Europe was negatively  impacted by
the weaker Euro ($2.3 million) and the  previously-mentioned two week nationwide
strike of security personnel in France during the second quarter,  which reduced
operating profit by an estimated $5 million. This reduction was partially offset
by the  acceleration  of  reporting  in  France  discussed  above,  which  added
approximately $2 million to operating profit for the first nine months of 2000.

                                       14

BRINK'S HOME SECURITY
The  following is a table of selected  financial  data for BHS on a  comparative
basis:

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
(DOLLARS IN THOUSANDS)                2000        1999        2000        1999
- ------------------------------------------------------------------------------
                                                          
Operating profit:
Monitoring and service           $  20,612      19,355     62,299      57,797
Net marketing, sales and
  installation                      (6,655)     (6,692)   (18,473)    (16,797)
- ------------------------------------------------------------------------------
Total segment profit             $  13,957      12,663     43,826      41,000
- ------------------------------------------------------------------------------
Monthly recurring revenues (a)                             17,739      16,545
- ------------------------------------------------------------------------------
Annualized disconnect rate,
  net of moves                        7.5%        8.4%       7.8%        8.1%
- ------------------------------------------------------------------------------
Number of subscribers:
  Beginning of period              659,879     614,380    643,277     585,565
  Installations                     20,193      26,917     62,448      79,592
  Disconnects, net                 (12,524)    (13,100)   (38,177)    (36,960)
- ------------------------------------------------------------------------------
End of period                      667,548     628,197    667,548     628,197
- ------------------------------------------------------------------------------
Depreciation and amortization (b)$  13,693      12,624     40,982      37,319
Cash capital expenditures           19,186      21,610     54,586      60,848
- ------------------------------------------------------------------------------

(a) Monthly recurring revenues are calculated based on the number of subscribers
at period end multiplied by the average fee per subscriber  received in the last
month of the period for monitoring, maintenance and related services.
(b) Includes the write-off of capitalized subscriber installation  costs related
to disconnects.

Revenues for BHS  increased  by $3.7 million (6%) to $61.8  million in the third
quarter of 2000 compared to the same period of 1999. In the first nine months of
2000,  revenues for BHS increased $11.7 million (7%) to $182.0 million  compared
to the first nine months of 1999.  This  increase in revenues  for the three and
nine month periods was due to higher ongoing  monitoring  and service  revenues,
reflecting  a 6% increase  in the  subscriber  base as well as  slightly  higher
average monitoring fees. As a result of such growth,  monthly recurring revenues
at September 30, 2000 of $17.7 million grew 7% versus September 30, 1999.

Operating  profit in the third  quarter and first nine months of 2000  increased
$1.3 million  (10%) and $2.8 million  (7%),  respectively,  compared to the same
periods of 1999.  Operating profit was favorably impacted by increases generated
from  monitoring  and service  activities  of $1.3 million (6%) and $4.5 million
(8%) for the third  quarter  and first  nine  months of 2000,  respectively,  as
compared to the prior year periods. These improvements were due primarily to the
contribution  associated with the growth in the subscriber base, slightly higher
average monitoring fees and a lower net disconnect rate,  partially offset by an
increase in service costs.  Growth in operating  profit in the third quarter and
first nine  months of 2000 as  compared  to the same  periods of 1999  reflected
increased costs (including some start-up expenses) associated with the growth in
new distribution  channels (including new construction,  multi-family and dealer
programs) as BHS moves to expand its methods of acquiring new  customers.  These
costs were  partially  offset by the impact of fewer  system  installations  and
higher average  connection fees  associated  with the  traditional  distribution
channels.  In addition,  operating  profit during the quarter  benefited  from a
decrease in the growth rate of installation  losses per subscriber.  Net cost of
marketing,  sales and installation activities on a per install and overall basis
during the final  quarter of 2000 may  continue  to be impacted by the growth in
new  distribution  channels and several  initiatives  implemented  in the fourth
quarter of 1999,  including increasing the connection fee per installation and a
tightening of the company's credit policy. While these initiatives have improved
BHS'  profitability  through  September  30,  2000,  their  effects  may be less
pronounced in the future.

                                       15

BAX GLOBAL
The  following  is a table  of  selected  financial  data  for BAX  Global  on a
comparative basis:

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
(IN THOUSANDS)                        2000        1999        2000        1999
- ------------------------------------------------------------------------------
                                                         
Operating revenues:
  Americas (a)                  $  305,960      318,851    924,788     889,737
  International                    228,865      224,537    663,086     629,947
  Eliminations/other               (13,813)     (10,844)   (41,377)    (37,165)
- ------------------------------------------------------------------------------
Total operating revenues        $  521,012      532,544  1,546,497   1,482,519
- ------------------------------------------------------------------------------
Operating profit (loss):
  Americas (b)                  $  (12,130)      21,460    (24,368)     42,107
  International (b)                  8,209        7,612     24,469      21,676
  Other (b)                         (8,730)     (10,895)   (29,159)    (32,418)
- ------------------------------------------------------------------------------
Total segment profit (loss)     $  (12,651)      18,177    (29,058)     31,365
- ------------------------------------------------------------------------------
Depreciation and amortization   $   15,328       10,134     43,806      29,420
Cash capital expenditures           15,941       23,646     41,505      56,711
- ------------------------------------------------------------------------------
Worldwide expedited freight
  services:
  Revenues                      $  435,156      447,942  1,272,439   1,242,613
  Weight (million pounds)              439          459      1,312       1,298
- ------------------------------------------------------------------------------

(a)  Includes  Intra-US  revenue of $153.5  million  and $168.1  million for the
quarters ended September 30, 2000 and 1999,  respectively and $460.2 million and
$461.6  million  for  the  nine  months  ended  September  30,  2000  and  1999,
respectively.
(b) Expenses  associated with major information  technology projects and certain
overhead  costs have been  reallocated  in 1999 from Other to the  Americas  and
International, respectively.

Worldwide  revenues for the 2000 third quarter  decreased 2% over the 1999 third
quarter to $521.0  million.  The operating loss in the third quarter of 2000 was
$12.7  million,  compared to a profit of $18.2  million in the third  quarter of
1999.

Operating revenues in the third quarter of 2000 decreased $11.5 million compared
to the same period of 1999,  mainly due to a decrease  in  Americas  revenues of
$12.9  million (4%) which was partially  offset by an increase in  international
revenues of $4.3 million (2%).  The decrease in Americas  revenues was primarily
due to a  decrease  in  domestic  expedited  volume  partially  offset  by small
increases in the domestic  expedited yield. The  International  revenue increase
reflects growth in the Atlantic region due to increased export volumes,  and the
Pacific region which continues to experience revenue increases related to supply
chain management.  However, the rate of revenue growth in this region is slowing
as export volumes related to the high technology industry soften.

Operating  results for the third quarter of 2000 declined $30.8 million compared
to the same period of 1999,  reflecting  significantly  lower performance in the
Americas region partially offset by an improvement in International results. The
operating loss in the Americas region was primarily the result of higher service
costs  for the  fleet of  aircraft,  lower  domestic  expedited  volume,  higher
administrative  expenses  and  higher  fuel  costs  (for  both  air  and  ground
transportation)  which were not covered in their entirety by fuel surcharges and
hedging  activities.  Operating  results in the Americas  were also  impacted by
higher  depreciation  and  amortization  expense,  reflecting  the  depreciation
associated  with  higher  expenditures  on  aircraft  modifications  in 1999 and
information systems placed in service in late 1999. Additionally,  the operating
results in the  Americas  included a bad debt  provision of  approximately  $4.5
million related to the bankruptcy filing during the quarter of a customer of the
Americas  operations  and  approximately  $1.5  million  associated  with  staff
reductions  related to the partial  realignment  of BAX Global's  organizational
structure,  primarily at its  corporate  headquarters.  International  operating
profits  increased  slightly due to higher yields in supply chain management and
transportation services in the Pacific region, partially offset by lower results
in the Atlantic  region due to lower volumes and higher  operating  costs.  Cost
control  efforts have been  initiated in the Atlantic  region  during the fourth
quarter of 2000.

                                       16

Over the course of 2000,  the  operating  performance  of BAX Global's  Americas
region has been  negatively  impacted by soft demand and higher  transportation,
operating  and  administrative  costs  relative  to that  demand.  In  addition,
conditions  indicate  that  demand in the fourth  quarter of 2000 will not reach
1999 levels. As such, BAX Global is continuing to evaluate alternatives directed
at returning its Americas  operations to profitability.  Among such alternatives
are ways to improve sales  performance and to reduce  transportation,  operating
and  administrative  expenses.  Through  actions  taken  in the  third  quarter,
employee-related  costs have already been reduced by approximately $8 million on
an annualized  basis. The  alternatives  for further cost reductions,  which are
still being  evaluated,  could  affect  future  earnings as well as the carrying
value of BAX Global's  assets.  At this time,  and until such  alternatives  are
finalized,  it is not  practicable  to  estimate,  with  certainty,  the overall
outcome of the alternatives or their impact,  if any, on the financial  position
and/or  results of  operations  of the Company.  However,  management  currently
anticipates  that,  at a  minimum,  transportation  costs will be reduced by $20
million to $25 million on an annualized basis.

A supplier,  which  formerly  provided  the  majority of BAX  Global's  727 lift
capacity  and which also  operates  controlled  lift for the freight  forwarding
community,  filed for  Chapter 11  bankruptcy  protection  in early May of 2000.
Since  that time,  BAX Global has  lessened  its  dependency  on this  supplier,
through a negotiated reduction in lift capacity, which resulted in a decrease in
total cost but an increase in the unit cost of its existing lift commitment with
this supplier.

BAX Global's airline subsidiary,  Air Transport International ("ATI"), reached a
tentative  agreement  during  the third  quarter  with the  local  union for the
International Brotherhood of Teamsters,  representing ATI's cockpit crewmembers.
The Company anticipates a resolution by mid-November 2000.

Worldwide  revenues for the first nine months of 2000 increased 4% over the same
period of 1999 to $1.5 billion.  The operating  loss in the first nine months of
2000 was $29.1 million,  compared to a profit of $31.4 million in the first nine
months of 1999.

Operating  revenues  in the first nine months of 2000  increased  as a result of
increases  in  both  International  and  Americas  revenues.   The  increase  in
International  revenues of $33.1  million  (5%) was  primarily  due to continued
growth  in the  Pacific  region  from  increased  supply  chain  management  and
transportation  services  in the  high  technology  industry,  as well as in the
Atlantic  region  due  to an  increase  in  export  volumes.  Americas  revenues
increased $35.1 million (4%) primarily as a result of increased  export volumes.
Domestic and international  fuel surcharges have resulted in a small increase in
yields for the first nine months of 2000.  The  increase  in domestic  expedited
freight yield was partially offset by a decrease in volume.

Operating  results  for the first nine  months of 2000  declined  $60.4  million
compared to the same period of 1999, reflecting  significantly lower performance
in the Americas region partially offset by improved  International  results. The
operating loss in the Americas region was primarily the result of lower volumes,
higher service costs for its fleet of aircraft,  higher administrative costs and
increases  in fuel  costs  which  were not  covered  in their  entirety  by fuel
surcharges and hedging activities. Operating results in the Americas region were
also impacted by higher  depreciation and amortization  expense,  reflecting the
depreciation  associated with higher  expenditures on aircraft  modifications in
1999 and information  systems placed in service in late 1999. Americas operating
results also include a bad debt provision of approximately  $4.5 million related
to the current period  bankruptcy of a customer of the America's  Operations and
approximately  $1.5  million  associated  with staff  reductions  related to the
partial  realignment  of BAX Global's  organizational  structure.  International
profits  increased  primarily due to higher yielding supply chain management and
transportation services in the Pacific region. In the first nine months of 1999,
the International  results included a benefit of approximately $1.3 million from
the reversal of excess incentive accruals. In addition,  Other operating results
for the first nine months of 2000 include expenses of approximately $1.3 million
associated with an employment agreement with a former executive.

                                       17

COAL OPERATIONS
The  following is a table of selected  financial  data for Coal  Operations on a
comparative basis:

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
(IN THOUSANDS)                        2000        1999        2000        1999
- ------------------------------------------------------------------------------
                                                            
Coal margin                       $  2,591        4,161      2,732      14,556
Other operating income                 934        2,692      3,013       5,963
Restructuring and other credits          -          851          -         851
- ------------------------------------------------------------------------------
Margin and other income              3,525        7,704      5,745      21,370
- ------------------------------------------------------------------------------
Idle equipment and closed mines        882        2,346      2,289       6,426
Inactive employee costs              7,206        9,435     22,801      27,728
Selling, general and
  administrative (a)                 2,867        4,739     10,236      15,063
- ------------------------------------------------------------------------------
Total other costs and expenses (a)  10,955       16,520     35,326      49,217
- ------------------------------------------------------------------------------
Total segment loss (a)            $ (7,430)      (8,816)   (29,581)    (27,847)
- ------------------------------------------------------------------------------
Depreciation and amortization     $  5,176        8,343     16,947      23,791
Cash capital expenditures            3,843        3,178     10,030       9,704
- ------------------------------------------------------------------------------
Coal sales (tons):
  Metallurgical                      1,179        1,267      3,152       3,760
  Steam                              2,037        2,138      5,772       6,049
- ------------------------------------------------------------------------------
Total coal sales                     3,216        3,405      8,924       9,809
- ------------------------------------------------------------------------------
Production/purchased (tons):
  Production                         2,551        2,616      7,447       8,025
  Purchased                            442          464      1,090       1,908
- ------------------------------------------------------------------------------
Total                                2,993        3,080      8,537       9,933
- ------------------------------------------------------------------------------
Coal margin per ton               $   0.81          1.22      0.31        1.48
- ------------------------------------------------------------------------------

(a) Prior year selling,  general and administrative  costs included in operating
profit  for Coal  Operations  and Other  Operations  have been  reclassified  to
conform to the current year's segment presentation.

Net sales for the third  quarter of 2000 were $91.3  million,  a decrease  of 8%
from the 1999 third  quarter.  Operating  loss was $7.4  million in the  current
year's quarter compared to $8.8 million in the prior year's quarter.

Coal  Operations'  net sales for the third  quarter  of 2000  decreased  by $8.1
million  over the prior  year's  quarter,  largely as a result of reduced  sales
volume which  declined by 0.2 million tons from the 3.4 million tons sold in the
third  quarter  of  1999.  Metallurgical  sales  volumes  declined  slightly  as
increases in domestic metallurgical coal sales volume were partially offset by a
decline in export  metallurgical  coal sales  volume  reflecting  the  continued
softness  in the export  market.  Steam coal sales in the third  quarter of 2000
decreased by 0.1 million  tons (5%) to 2.0 million  tons and steam  realizations
declined as an above-market contract reset to market in early 2000.

The  operating  loss in the third quarter of 2000 compared to the same period in
1999  reflects a $1.6  million  decline in total coal margin and a $1.8  million
decrease in other  operating  income offset by decreases in idle and closed mine
costs ($1.5  million),  inactive  employee  costs ($2.2  million)  and  selling,
general and administrative costs ($1.9 million).  Operating results in the third
quarter of 2000 benefited from lower pension and postretirement benefit expenses
as well as lower  amortization  expense,  primarily  the result of an impairment
charge recorded in the fourth quarter of 1999.  Operating  results for the third
quarter of 1999 included a $2.4 million  benefit of litigation  settlements  and
favorable workers' compensation claim experience. In addition, operating results
for the third quarter of 1999 included $0.8 million of costs  associated  with a
salaried staff reduction.

                                       18

Total  coal  margin  for the third  quarter  of 2000  declined  by $0.41 per ton
compared to the same period of 1999.  Virginia margins were negatively  impacted
by higher production costs due to temporary adverse mining conditions at some of
the  Company's  mines,  as well as continued  softness in export  markets.  West
Virginia  steam  margins  improved  from  the same  period  of 1999 due to lower
production costs. All operations have been impacted by higher diesel fuel prices
during 2000.

Other operating  income decreased $1.8 million in the third quarter of 2000 from
the comparable 1999 quarter,  primarily due to a favorable litigation settlement
and a Federal Black Lung Excise Tax refund, all recorded during 1999.

Idle  equipment and closed mine costs  decreased  $1.5 million in the 2000 third
quarter from the  comparable  1999 quarter  primarily due to the idlement of the
Meadow  River mine in West  Virginia  during  1999.  This mine was  subsequently
closed  during  the fourth  quarter  of 1999.  Inactive  employee  costs,  which
represent  long-term employee  liabilities for pension and retiree medical costs
for inactive employees,  decreased 24% over the prior year's quarter as a result
of lower premiums  related to the Coal Industry  Retiree Benefit Act of 1992 and
lower  pension  and  postretirement  benefit  expense.  Full  year  pension  and
postretirement  benefit  expense  for 2000 is  expected  to be lower  than  1999
primarily due to favorable  demographic  changes and an increase in the discount
rate from 7.0% to 7.5%.

Coal  Operations  net sales for the first nine months of 2000 decreased over the
prior year by $28.9  million due almost  entirely to reduced  sales volume which
declined  0.9  million  tons from the 9.8  million  tons sold in the first  nine
months of 1999.  Through  September  30, 2000,  metallurgical  coal sales volume
decreased  16% or 0.6 million tons as compared to the first nine months of 1999.
This volume  decrease  represented  an increase in domestic  metallurgical  coal
sales  which was more than  offset by a decrease  in export  metallurgical  coal
sales due to continued softness in export markets. Steam coal sales in the first
nine months of 2000  decreased by 0.3 million tons (5%) to 5.8 million  tons. In
addition,  steam realizations also declined as an above-market contract reset to
market in early 2000.

Coal  Operations  generated an operating loss of $29.6 million in the first nine
months of 2000 as  compared to $27.8  million for the same period of 1999.  This
decrease in results reflects an $11.8 million decline in total coal margin and a
$2.9 million  decline in other  operating  income (as 1999 included a benefit of
$2.5 million from the settlement of litigation),  partially  offset by decreases
in idle and closed  mine costs ($4.1  million),  inactive  employee  costs ($4.9
million) and selling,  general and administrative costs ($4.8 million). As noted
above, operating results benefited from lower pension and postretirement benefit
expenses as well as lower amortization expense in the first nine months of 2000.

Total coal  margin  declined  by $1.17 per ton for the first nine months of 2000
compared to the same period of 1999.  Virginia margins were negatively  impacted
by higher production costs due to temporary adverse mining conditions at some of
the  Company's  mines as well as  continued  softness  in export  markets.  West
Virginia  steam  margins were  negatively  impacted by higher  production  costs
resulting  from the  "mountaintop  removal"  controversy  discussed  below.  All
operations have been impacted by higher diesel fuel prices during 2000.

Other operating  income decreased $2.9 million for the first nine months of 2000
from  the  comparable  1999  period   primarily  due  to  favorable   litigation
settlements and a Federal Black Lung Excise Tax refund all recorded during 1999.

Idle  equipment and closed mine costs  decreased  $4.1 million in the first nine
months of 2000 from the comparable 1999 period  primarily due to the idlement of
the Meadow River mine in West Virginia during 1999.  This mine was  subsequently
closed during the fourth quarter of 1999. Of the $3.3 million liability recorded
in the fourth  quarter of 1999 for other closure costs of the Meadow River mine,
approximately  $2.2  million  has been  paid as of  September  30,  2000.  It is
anticipated that  substantially all  of  the  remaining  liability will be  paid

                                       19

by the end of 2000.  Inactive employee costs, which represent long-term employee
liabilities  for pension  and  retiree  medical  costs for  inactive  employees,
decreased  18% over the same  period  last  year as a result of  slightly  lower
premiums related to the Coal Industry Retiree Benefit Act of 1992, lower medical
benefit expense for workers on temporary  lay-off primarily related to the first
quarter 1999 idlement of Meadow River mine and lower pension and  postretirement
benefit expense.

A controversy  related to a method of mining called  "mountaintop  removal" that
began in mid-1998 in West  Virginia  involving  an unrelated  party  resulted in
delays in the issuance of all mining permits in West Virginia. These delays have
prevented  the  timely  issuance  of  several  mine  permits  necessary  for the
uninterrupted mining of Vandalia Resources,  Inc.  ("Vandalia"),  a wholly-owned
subsidiary of Pittston Coal. Vandalia is actively pursuing the issuance of these
permits,  but when,  or if, these  permits will be issued is currently  unknown.
During the first nine months of 2000,  the delay in obtaining  these permits did
not  result  in a  significant  number of jobs  lost but did  impact  production
efficiencies and costs by requiring mining in less productive areas.  Failure to
obtain  approval of these  permits will  ultimately  result in the  depletion of
permitted  reserves.  Such depletion would force the cessation of mining and the
corresponding loss of jobs. Vandalia and other affected parties in West Virginia
are currently exploring all legal and legislative remedies that may be available
to resolve this matter.

On February 10, 1999, the US District Court for the Eastern District of Virginia
entered a final  judgment  in favor of  certain of the  Company's  subsidiaries,
ruling that the Federal  Black Lung Excise Tax  ("FBLET")  imposed under Section
4121 of the Internal Revenue Code is  unconstitutional as applied to export coal
sales  and  ordering  a refund  to the  subsidiaries.  A total  of $0.8  million
(including  interest)  was  refunded in 1999 for the FBLET that those  companies
paid for the quarter ended March 31, 1997. The Company has sought refunds of the
FBLET it paid on export coal sales for all open statutory periods and expects to
receive such refunds for some or all of that tax paid (plus  interest)  pursuant
to a review of claim  documentation by the Internal Revenue Service.  Currently,
the  Company  expects  FBLET  refunds of between  $12  million  and $20  million
(pre-tax) most of which is expected to be received before  mid-2001.  Due to the
uncertainty of the ultimate amounts and timing of the FBLET refunds, the Company
has not currently  recorded a receivable  for such amounts.  The Company is also
pursuing additional claims pending a decision by the US Supreme Court related to
another Company.  The ultimate amounts and timing of such additional refunds, if
any, cannot be determined at this time.

Coal Operations  continues cash funding for charges  recorded in prior years for
facility  closure  costs  recorded  as  restructuring  and other  charges in the
Statement of Operations. The following table analyzes the changes in liabilities
during the first nine months of 2000 for such costs:

                                                          Employee
                                                Mine  Termination,
                                                 and       Medical
                                               Plant           and
                                             Closure     Severance
(IN THOUSANDS)                                 Costs         Costs       Total
- ------------------------------------------------------------------------------
                                                               
Balance as of December 31, 1999           $    6,596        13,622      20,218
Payments                                         783         1,223       2,006
- ------------------------------------------------------------------------------
Balance as of September 30, 2000          $    5,813        12,399      18,212
- ------------------------------------------------------------------------------

                                       20

OTHER OPERATIONS
The following is a table of selected  financial  data for Other  Operations on a
comparative basis:

                                          Three Months             Nine Months
                                    Ended September 30      Ended September 30
(IN THOUSANDS)                        2000        1999        2000        1999
- ------------------------------------------------------------------------------
                                                            
Net sales:
  Mineral Ventures                $  4,446        3,047     12,863       9,711
  Allied Operations (a)              5,964        3,046     17,582       6,968
- ------------------------------------------------------------------------------
Total net sales                   $ 10,410        6,093     30,445      16,679
- ------------------------------------------------------------------------------
Operating profit (loss):
  Mineral Ventures                $     26       (2,002)       204      (4,030)
  Allied Operations (a) (b)          2,123        1,536      5,673       4,249
- ------------------------------------------------------------------------------
Total segment profit (loss)       $  2,149         (466)     5,877         219
- ------------------------------------------------------------------------------
Depreciation and amortization:
  Mineral Ventures                $    888          700      2,693       2,353
  Allied Operations                    360          365      1,086       1,044
- ------------------------------------------------------------------------------
Total depreciation and
  amortization                    $  1,248        1,065      3,779       3,396
- ------------------------------------------------------------------------------

Certain  1999  amounts  have  been  restated  to  conform  to the  current  year
classifications.
(a) Includes timber, natural gas and equipment rebuild operations.
(b) Prior year  selling, general and  administrative costs included in operating
profit  for Coal  Operations  and Other  Operations  have been  reclassified  to
conform to the current year's segment presentation.

Mineral  Ventures  generated  net sales during the third quarter of 2000 of $4.5
million,  a 46% increase from the $3.0 million  reported in the third quarter of
1999.  The increase in net sales was the result of an increase in ounces of gold
sold and  higher  gold  realizations.  Ounces of gold sold  increased  from 10.6
thousand ounces in the third quarter of 1999 to 15.2 thousand ounces in the same
period of 2000.  Breakeven  results were  achieved in the third  quarter of 2000
compared to a $2.0 million loss in the same period of 1999 reflecting an $89 per
ounce  (32%)  decrease  in the cash cost of gold sold,  in  addition to a $4 per
ounce (1%) increase in average  realization.  Cash cost per ounce,  in US dollar
terms, was lower in the third quarter of 2000 due to the impact on unit costs of
the  greater  production  volume and, to a lesser  extent,  a weaker  Australian
dollar.

Mineral  Ventures  generated  net sales  during the first nine months of 2000 of
$12.9 million,  a 32% increase from the $9.7 million  reported in the first nine
months of 1999.  The  increase  in net sales was the  result of an  increase  in
ounces of gold sold and higher gold realizations.  Ounces of gold sold increased
from 33.8  thousand  ounces in the first  nine  months of 1999 to 42.8  thousand
ounces in the same period of 2000. Operating profit for the first nine months of
2000 was $0.2 million  compared to an operating loss of $4.0 million in the same
period of 1999,  reflecting  a $50 per ounce (19%)  decrease in the cash cost of
gold sold, in addition to a $13 per ounce (5%) increase in average  realization.
Cash  cost per ounce in US dollar  terms was lower in the first  nine  months of
2000 due to  increased  production  volume,  and, to a lesser  extent,  a weaker
Australian dollar.

Net sales from the gas, timber and equipment rebuild businesses amounted to $6.0
million and $3.0  million in the third  quarter of 2000 and 1999,  respectively.
The  improvement  was primarily  due to higher  natural gas prices and increased
revenues from timber  (reflecting the start-up of the hard wood chip mill during
the third quarter of 1999) and continued growth in equipment rebuilds. Operating
profit from the gas, timber and equipment  rebuild  businesses  amounted to $2.1
million and $1.5 million in the third  quarters of 2000 and 1999,  respectively.
The increase was primarily due to increased natural gas prices,  offset by lower
operating profits from the timber business, reflecting start-up costs associated
with the tie mill.

                                       21

Net sales from the gas,  timber and  equipment  rebuild  businesses  amounted to
$17.6  million  and $7.0  million  in the  first  nine  months of 2000 and 1999,
respectively.  The  improvement  was primarily due to the  previously  mentioned
higher  natural gas prices and  increased  revenues  from  timber and  equipment
rebuilds. Operating profit from the gas, timber and equipment rebuild businesses
amounted to $5.7  million and $4.2  million in the first nine months of 2000 and
1999, respectively. The increase was mainly due to higher natural gas prices and
related  royalties as well as additional  equipment  rebuild business  partially
offset by lower operating profit from the timber business,  reflecting  start-up
costs associated with the tie mill.

FOREIGN OPERATIONS
A portion of the Company's  financial results is derived from activities in over
100 countries each with a local  currency other than the US dollar.  Because the
financial  results of the Company are reported in US dollars,  they are affected
by changes in the value of the various foreign  currencies in relation to the US
dollar.  Changes  in  exchange  rates  may also  affect  transactions  which are
denominated  in  currencies  other than the  functional  currency.  The  Company
periodically  enters into such  transactions in the course of its business.  The
diversity of foreign  operations  helps to mitigate a portion of the impact that
foreign  currency  fluctuations  may have in any one  country on the  translated
results. The Company, from time to time, uses foreign currency forward contracts
to hedge  transactional  risks associated with foreign  currencies.  Translation
adjustments  of net monetary  assets and  liabilities  denominated  in the local
currency relating to operations in countries with highly inflationary  economies
are included in net income,  along with all transaction  gains or losses for the
period.  A  subsidiary  in  Venezuela  operates  in such a  highly  inflationary
economy.

The Company is also  subject to other risks  customarily  associated  with doing
business  in  foreign  countries,   including  labor  and  economic  conditions,
political  instability,  controls  on  repatriation  of  earnings  and  capital,
nationalization,  expropriation  and other forms of restrictive  action by local
governments.  The future effects, if any, of such risks on the Company cannot be
predicted.

OTHER OPERATING INCOME, NET
Other operating  income,  net, which is a component of each operating  segment's
previously discussed operating profit, generally includes the Company's share of
net earnings or losses of  unconsolidated  foreign  affiliates,  royalty income,
gains and losses from foreign currency exchange and from sales of coal operating
assets.  Other  operating  income,  net for the  three  and  nine  months  ended
September 30, 2000 was $5.4 million and $13.4 million, respectively, compared to
$5.0 million and $14.3 million, respectively, in the three and nine months ended
September 30, 1999. The increase in other operating income for the third quarter
of 2000 as compared to the same period of 1999 was  primarily  due to higher net
gains from foreign currency  exchange and increased  earnings of  unconsolidated
foreign affiliates  partially offset by lower gains from litigation  settlements
at the Company's  Coal  Operations.  Other  operating  income for the first nine
months of 1999 includes  approximately $3.5 million of gains from the settlement
of litigation at Coal  Operations.  These gains more than offset higher  royalty
income,  increased earnings of unconsolidated  foreign affiliates and higher net
gains  from  foreign  currency  exchange  in the first nine  months of 2000,  as
compared to the same period of 1999.

INTEREST EXPENSE, NET
Net interest expense  increased $2.7 million (35%) and $2.8 million (12%) in the
third  quarter and first nine months of 2000 as compared to the same  periods of
1999.  This increase was  predominantly  due to higher  average  borrowings  and
higher US interest  rates.  Interest  costs on  borrowings  under the new credit
agreement  are expected to increase due to an increase in the average  borrowing
costs of approximately 80 to 90 basis points on an annualized basis.

OTHER INCOME/EXPENSE, NET
Other income/expense, net for the three and nine months ended September 30, 2000
was expense of $1.5 million and $0.6 million,  respectively,  compared to income
of $0.1  million and expense of $0.2  million,  respectively,  for the three and
nine months ended  September 30, 1999. The $1.6 million  additional  expense for
the  three-month  period was primarily  due to an increase in minority  interest
expense (due to improved results of consolidated subsidiaries),  lower net gains
on the sale of assets and lower foreign currency net translation gains. The $0.4
million  additional  expense for the nine month  period  includes a $1.9 million
gain on an investment held by Coal  Operations  recorded in the first quarter of
2000, which was more than offset

                                       22

by an  increase  in  minority  interest  expense  (due to  improved  results  of
consolidated  affiliates),  lower gains on the sale of assets and lower  foreign
currency net translation gains.

INCOME TAXES
In both the 2000 and 1999 periods presented,  the provision for income taxes was
less than the statutory  federal income tax rate of 35% primarily due to the tax
benefits of percentage  depletion and lower taxes on foreign  income,  partially
offset by provisions for goodwill amortization and state income taxes.

The  difference  in the  effective  tax rate for the nine  month  periods  ended
September 30, 2000 and 1999 is primarily a result of the change in the Company's
reporting  entities  due  to  the  elimination  of the  tracking  stock  capital
structure.  Under the prior reporting  structure,  a separate effective tax rate
was estimated for each Group and was applied to each Group's year-to-date pretax
earnings.  The quarterly tax provision  reflected in the consolidated  financial
statements of the Company was a combination of the three Group's tax provisions.
This resulted in quarterly (not annual)  fluctuations  in the  consolidated  tax
rate. However, with the elimination of the tracking stock capital structure, the
Company  reports  its  results of  operations  as one entity and a  consolidated
effective tax rate is computed.  As a result, the effective tax rate is expected
to be relatively consistent from quarter to quarter,  exclusive of the impact of
the potential coal sale or other extraordinary or currently unanticipated items.

                               FINANCIAL CONDITION

CASH FLOW REQUIREMENTS
Net cash provided by operating  activities  during the first nine months of 2000
totaled $178.3 million  compared with $212.8 million in the first nine months of
1999. This decrease resulted primarily from lower earnings combined with a small
increase  in the cash  required to fund  working  capital,  partially  offset by
slightly  higher non-cash  charges.  The small increase in cash required to fund
working capital was primarily due to additional working capital  requirements at
BAX Global, offset by a reduction in working capital requirements at Brink's and
a  decrease  in coal  inventories  at Coal  Operations.  Non-cash  charges  were
impacted  by  higher  depreciation   (primarily  at  BAX  Global),  lower  heavy
maintenance  expense  and lower  pension  expense  which  primarily  reflects  a
decrease in service cost due to favorable demographic changes and an increase in
the discount  rate from 7.0% to 7.5%.  Both pension and  postretirement  medical
expenses are  expected to continue at levels  lower than last year,  through the
end of 2000.

INVESTING ACTIVITIES
Cash capital expenditures for the first nine months of 2000 were $164.0 million,
down from  $197.0  million in the  comparable  period of 1999.  Of the 2000 cash
capital  expenditures,  $54.0  million was spent by Brink's,  $54.6  million was
spent by BHS, $41.5 million was spent by BAX Global, and $13.2 million was spent
by Natural  Resource  Operations.  Lower cash capital  expenditures in the first
nine months of 2000 versus the same period of 1999 were  primarily  due to lower
levels of spending at BHS for customer installations, at BAX Global for aircraft
modifications  and at Brink's  for IT  expenditures.  For the full year of 2000,
company-wide  cash capital  expenditures are projected to range between $215 and
$225 million.  The foregoing amounts exclude  expenditures that have been or are
expected to be financed through capital leases and any acquisition expenditures.
Net cash used in  investing  activities  for the first nine  months of 2000 also
includes  approximately $2.2 million of cash proceeds relating to the sale of an
investment  held by the Company's Coal  Operations and $3.8 million of cash used
to fund other acquisitions (primarily at Brink's).

During the first nine months of 2000,  heavy  maintenance  expenditures of $41.8
million  decreased $9.7 million over the same period in 1999.  This decrease was
primarily due to increased  efforts to control  spending and a reduced number of
planes in the fleet.

                                       23

FINANCING
The Company  intends to fund cash  capital  expenditures  through cash flow from
operating  activities or through  operating leases if the latter are financially
attractive. Any additional funding that may be required will be financed through
the Company's revolving credit agreements or other borrowing arrangements.

Net cash used by financing activities was $7.4 million for the first nine months
of 2000, compared with net cash provided of $15.8 million for the same period in
1999.  Activities  in 1999  included  higher net  borrowings  used  primarily to
finance the purchase of the Company's Preferred Stock. The 2000 levels reflected
repayments  under  the  Facility  (described  below)  due  primarily  to  excess
borrowings  at December 31, 1999 as well as  repayments of a portion of the debt
of Brink's France and Venezuela.

On October 3, 2000,  the Company  entered into a $370 million  credit  agreement
with a  syndicate  of banks to replace the then  existing  $350  million  credit
agreement that was due to expire in May 2001. The new credit agreement  includes
a  $185  million  three  year  revolving  credit  facility  and a  $185  million
short-term   revolving  credit  facility,   both  of  which  permit   additional
borrowings,  repayments and reborrowings up to the maximum. Interest costs under
the new credit  agreement are expected to increase  primarily due to an increase
in the average  borrowing  costs of  approximately  80 to 90 basis  points on an
annualized basis.  Among the covenants in the new credit agreement are covenants
that limit the Company's maximum allowable  indebtedness and provide for minimum
coverage of interest  costs.  The maturity dates of the short-term and long-term
portions  of the  credit  agreement  are  October  2, 2001 and  October 3, 2003,
respectively.

Prior to entering into the new credit agreement and through  September 30, 2000,
the Company had a $350 million  credit  agreement with a syndicate of banks (the
"Facility").  The Facility  included a $100 million term loan and also permitted
additional borrowings, repayments and reborrowings of up to an aggregate of $250
million.  As of September  30, 2000 and December  31, 1999,  borrowings  of $100
million were outstanding  under the term loan portion of the Facility and $181.1
million  and  $185  million,   respectively,   of  additional   borrowings  were
outstanding under the remainder of the Facility.

MARKET RISKS AND HEDGING AND DERIVATIVE ACTIVITIES
The Company has  activities in well over 100 countries and a number of different
industries.  These  operations  expose the Company to a variety of market risks,
including the effects of changes in foreign currency exchange rates and interest
rates. In addition,  the Company  consumes and sells certain  commodities in its
businesses,  exposing  it to the  effects  of  changes  in the  prices  of  such
commodities.  These financial and commodity  exposures are monitored and managed
by the Company as an integral part of its overall risk management  program.  The
diversity of foreign  operations  helps to mitigate a portion of the impact that
foreign currency rate fluctuations may have in any one country on the translated
results.   The  Company's  risk  management  program  considers  this  favorable
diversification  effect as it  measures  the  Company's  exposure  to  financial
markets and as appropriate, seeks to reduce the potentially adverse effects that
the  volatility  of  certain  markets  may  have on its  operating  results.  In
addition,  the Company,  in some cases, is able to adjust its pricing to cover a
portion of the increase in the cost of certain commodities (primarily jet fuel).
The Company has not had any material  change in its market risk exposures  since
December 31, 1999.

CAPITALIZATION
As  previously  discussed,  prior to January  14,  2000,  the  Company had three
classes of common stock: Brink's Stock, BAX Stock and Minerals Stock, which were
designed to provide  shareholders with securities  reflecting the performance of
the Brink's Group, the BAX Group and the Minerals Group, respectively.

On December 6, 1999,  the Company  announced  that its Board of  Directors  (the
"Board") had approved the elimination of the tracking stock capital structure by
an exchange of all outstanding shares of Minerals Stock and BAX Stock for shares
of Brink's Stock (the  "Exchange").  The Exchange took place on January 14, 2000

                                       24

(the "Exchange Date"), on which date,  holders of Minerals Stock received 0.0817
share of Brink's Stock for each share of their  Minerals  Stock;  and holders of
BAX Stock  received  0.4848  share of Brink's  Stock for each share of their BAX
Stock based on the shareholder approved formula and calculated as follows:

(PER SHARE PRICES)                Brink's Stock      BAX Stock  Minerals Stock
- ------------------------------------------------------------------------------
                                                            
Ten day average price*                $   18.92      $    7.98       $    1.34
Exchange factor                            1.00           1.15            1.15
- ------------------------------------------------------------------------------
Fair Market Value, as defined*        $   18.92      $    9.17       $    1.54
Exchange ratio                              N/A         0.4848          0.0817
- ------------------------------------------------------------------------------
Closing prices:
  December 3, 1999                    $  18.375      $ 10.0625       $   1.125
  December 6, 1999                       21.500        10.1250           1.625
- ------------------------------------------------------------------------------

*The "Fair Market Value" of each class of common stock was  determined by taking
the average  closing price of that class of common stock for the 10 trading days
beginning  30  business  days  prior to the  first  public  announcement  of the
exchange proposal.  Since the first public  announcement was made on December 6,
1999,  the  average  closing  price was  calculated  during the 10 trading  days
beginning October 22, 1999 and ending November 4, 1999.

From and after the Exchange Date, Brink's Stock is the only outstanding class of
common  stock of the  Company  and  continues  to  trade  on the New York  Stock
Exchange  under the symbol  "PZB".  Prior to the Exchange  Date,  Brink's  Stock
reflected the  performance  of the Brink's Group only;  after the Exchange Date,
Brink's  Stock  reflects the  performance  of The  Pittston  Company as a whole.
Shares of Brink's  Stock  after the  Exchange  are  hereinafter  referred  to as
"Pittston Common Stock".

As a result of the Exchange on January 14, 2000, the Company  issued  10,916,367
shares of Pittston Common Stock,  which consists of 9,490,227 shares of Pittston
Common  Stock equal to 100% of the Fair  Market  Value,  as defined,  of all BAX
Stock and Minerals Stock and 1,426,140  shares of Pittston Common Stock equal to
the  additional  15% of the Fair Market  Value of BAX Stock and  Minerals  Stock
exchanged  pursuant to the  above-described  formula.  Of the 10,916,367  shares
issued, 10,195,630 shares were issued to holders of BAX Stock and Minerals Stock
and 720,737 shares were issued to The Pittston Company  Employee  Benefits Trust
(the "Trust").

Shares issued to holders of BAX Stock and Minerals Stock (excluding those shares
issued to the Trust) were distributed as follows:

                                                      Holders of    Holders of
(IN MILLIONS EXCEPT PER SHARE PRICES)                 BAX Stock   Minerals Stock
- --------------------------------------------------------------------------------

Shares outstanding on January 13, 2000                   19.5          9.3

Brink's Stock issued pursuant to the Exchange:
  Based on 100% of Fair Market Value                      8.2          0.7
  Based on 15% of Fair Market Value                       1.2          0.1
- --------------------------------------------------------------------------------
Total shares issued on January 14, 2000                   9.4          0.8
Brink's Stock closing price per share
  - December 3, 1999                                 $ 18.375       18.375
- --------------------------------------------------------------------------------
Value as of December 3, 1999 of Brink's
  Stock issued pursuant to the Exchange              $  173.5         13.9
- --------------------------------------------------------------------------------

As  set  forth  in the  Company's  Articles  of  Incorporation  approved  by the
shareholders,  in the event of a  dissolution,  liquidation or winding up of the
Company,  holders of Brink's  Stock,  BAX Stock and  Minerals  Stock  would have
shared on a per share basis,  the funds, if any,  remaining for  distribution to
the common shareholders. In the case of Minerals Stock, such percentage had been
set,  using a nominal  number of shares of Minerals  Stock of 4.2  million  (the
"Nominal  Shares") in excess of the actual  number of shares of  Minerals  Stock
outstanding.   The  liquidation   percentages  were  subject  to  adjustment  in
proportion  to the  relative  change  in the total  number of shares of  Brink's
Stock, BAX Stock and Minerals Stock, as the case

                                       25

may be, then  outstanding  to the total number of shares of all other classes of
common stock then  outstanding  (which  totals,  in the case of Minerals  Stock,
shall  include the Nominal  Shares).  As of December 3, 1999,  such  liquidation
percentages  would  have been  approximately  54%,  27% and 19% for  holders  of
Brink's  Stock,  BAX Stock  and  Minerals  Stock,  respectively.  Including  the
additional  shares issued pursuant to the Exchange the  liquidation  percentages
for former holders of Brink's Stock, BAX Stock and Minerals Stock, respectively,
as of January 14, 2000 would have been approximately 79%, 19% and 2%.

Upon completion of the Exchange on January 14, 2000,  there were a total of 49.5
million issued and  outstanding  shares of Pittston  Common Stock for use in the
calculation of net income per common share.

Under the  share  repurchase  programs  authorized  by the  Board,  the  Company
purchased shares in the periods presented:

                                          Three Months             Nine Months
(DOLLARS IN MILLIONS,               Ended September 30      Ended September 30
SHARES IN THOUSANDS)                 2000         1999       2000         1999
- ------------------------------------------------------------------------------
                                                             
Pittston Common Stock:
  Shares                                -         N/A            -        N/A
  Cost                            $     -         N/A            -        N/A
Brink's Stock:
  Shares                              N/A           -          N/A      100.0
  Cost                            $   N/A           -          N/A        2.5
Convertible Preferred Stock:
  Shares                              8.2           -          8.2       83.9
  Cost                            $   2.2           -          2.2       21.0
Excess carrying amount (a)        $   1.7           -          1.7       19.2
- ------------------------------------------------------------------------------

(a) The excess of the  carrying  amount of the Series C  Cumulative  Convertible
Preferred  Stock  (the  "Convertible  Preferred  Stock")  over the cash  paid to
holders for  repurchases  made during the periods.  This amount is deducted from
preferred dividends in the Company's Consolidated Statement of Operations.

In March  1999,  the  Company  purchased  0.08  million  shares (or 0.8  million
depositary  shares) of its Convertible  Preferred Stock for $21.0 million and in
September  2000,  the  Company  purchased  .008  million  shares (or .08 million
depositary  shares) of its  Convertible  Preferred  Stock for $2.2 million.  The
Convertible Preferred Stock is convertible into Pittston Common Stock and has an
annual dividend rate of $31.25 per share.  Preferred  dividends  included on the
Company's  Consolidated  Statement of  Operations  for the three and nine months
ended  September  30, 2000 and the three  months ended March 31, 1999 are net of
$1.7  million  and  $19.2  million,  respectively,  which is the  excess  of the
carrying  amount of the  Convertible  Preferred  Stock over the cash paid to the
holders of the Convertible Preferred Stock.

As of September 30, 2000,  the Company had the  remaining  authority to purchase
over time 0.9 million  shares of Pittston  Common Stock and an  additional  $5.4
million of its Convertible  Preferred  Stock. The remaining  aggregate  purchase
cost limitation for all common stock was $22.2 million as of September 30, 2000.

DIVIDENDS
The Board intends to declare and pay dividends, if any, on Pittston Common Stock
based on the earnings,  financial condition, cash flow and business requirements
of the Company.

During the first nine months of 2000,  the Board  declared  and the Company paid
cash  dividends  of 7.50 cents per share of Pittston  Common  Stock.  During the
first  nine  months  of 1999,  the  Board  declared  and the  Company  paid cash
dividends of 7.50 cents per share of Brink's Stock, 18.00 cents per share of BAX
Stock  and  2.50  cents  per  share of  Minerals  Stock.  Dividends  paid on the
Convertible  Preferred Stock in the first nine months of 2000 and 1999 were $0.7
million and $1.3 million, respectively.

                                       26

PENDING ACCOUNTING CHANGES
Staff Accounting Bulletin ("SAB") No. 101, which provides  interpretive guidance
on applying generally accepted  accounting  principles to revenue recognition in
financial statements will be implemented by the Company in the fourth quarter of
2000. The Company is currently assessing SAB No. 101 as well as written guidance
regarding its implementation  which was issued in late October 2000. As such, no
final  determination  has  been  made  whether  the SAB will  materially  impact
(positively  or  negatively)  the  reported  results  of  the  Company.   It  is
anticipated that the impact,  if any, related to the  implementation  of SAB No.
101 would  only  affect  BHS and  would be  recorded  as a change in  accounting
principle as of January 1, 2000, as is called for in the SAB.

Emerging  Issues Task Force  ("EITF")  No.  00-10  "Accounting  for Shipping and
Handling  Fees and  Costs"  will be  implemented  by the  Company  in the fourth
quarter of 2000.  EITF no. 00-10 will require the Company's  Coal  Operations to
begin  reporting  fees charged for certain  shipping and handling  activity on a
disaggregated  basis (i.e.  separately report the associated revenues and costs)
whereas such fees are  currently  being netted  against gross sales to arrive at
reported  net  sales.  The  implementation  of this  EITF  will not  impact  the
operating  profit or net  income of the  Company as it will  increase  sales and
costs of sales by equivalent amounts.

FORWARD LOOKING INFORMATION
Certain of the matters  discussed  herein,  including  statements  regarding the
impact at BHS of growth in new distribution  channels and certain initiatives on
the net cost of  marketing,  sales and  installation  costs and their  impact on
profitability  in the  future,  the  potential  impact  of SAB  No.  101 on BHS'
operations,  BAX Global's evaluation of alternatives to further reduce costs and
the effect on future  earnings and the carrying value of BAX Global's  assets or
on the  financial  position  and/or the results of  operations  of the  Company,
reductions in transportation costs at BAX Global,  fourth quarter demand for BAX
Global's services,  financing  alternatives,  the anticipated  resolution of BAX
Global's ATI's  negotiations  with the local Teamsters Union,  benefits expense,
issuance of mining permit approvals,  payment of liabilities associated with the
closure of the Meadow River mine, changes in foreign exchange rates, projections
about effective tax rates,  the amount and timing of anticipated  FBLET refunds,
market  risk and capital  spending,  expectations  that EITF No.  00-10 will not
impact the operating  profit or net income of the Company,  increased  borrowing
costs of the Company,  the sale of coal assets (including the likely date of the
sale) and the  recording of losses  relating  thereto  involve  forward  looking
information  which is subject to known and  unknown  risks,  uncertainties,  and
contingencies which could cause actual results, performance or achievements,  to
differ  materially from those which are anticipated.  Such risks,  uncertainties
and contingencies, many of which are beyond the control of the Company, include,
but are not limited to, overall  economic and business  conditions in the United
States and other countries,  the demand for the Company's products and services,
the success of new distribution channels at BHS, the effective implementation of
BHS initiatives  related to the net cost of marketing,  sales and  installation,
the  ultimate  outcome  of the  Company's  analysis  of SAB No. 101 and EITF No.
00-10, the results of BAX Global's  evaluation of alternatives to further reduce
costs,  the  effective  implementation  of BAX  Global's  initiatives  to reduce
overall operating costs, the vote on the tentative agreement between ATI and the
local Teamsters Union,  pricing and other  competitive  factors in the industry,
geological   conditions,   new   government   regulations   and/or   legislative
initiatives,  variations in costs or expenses, variations in the prices of coal,
the timing and outcome of the Internal  Revenue Service  administrative  process
dealing  with FBLET as well as decisions  to be made by the Supreme  Court,  the
timing  and  ultimate  outcome  of selling  coal  assets,  the amount of Company
borrowings,  demographic  changes and  increases or decreases in discount  rates
related to benefits  expense,  delays in the issuance of mining  permits and the
ability of counterparties to perform.

                                       27

                           PART II - OTHER INFORMATION

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K
- ------      --------------------------------

(a)   Exhibits:

      Exhibit
      Number
      -------

      10    $370,000,000  Credit  Agreement, dated  as of October 3, 2000, among
            the  Registrant, as   Borrower,  Certain  of  Its  Subsidiaries,  as
            Guarantors,   Various  Lenders  and  Fleet  National  Bank and Chase
            Manhattan Bank as Co-Syndication Agents and  Bank of  America, N.A.,
            as Administrative Agent

      27    Financial Data Schedule

(b)   There were no reports on Form 8-K filed during the third quarter of 2000.

                                       28

                                    SIGNATURE

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

                                                  THE PITTSTON COMPANY

November 7, 2000                         By      /S/ ROBERT T. RITTER
                                           -------------------------------------
                                                    Robert T. Ritter
                                                    (Vice President -
                                                Chief Financial Officer)

                                       29

                                  $370,000,000

                                CREDIT AGREEMENT

                                      among

                              THE PITTSTON COMPANY
                                   as Borrower

                           CERTAIN OF ITS SUBSIDIARIES
                                  as Guarantors

                                 VARIOUS LENDERS

                                       and

                               FLEET NATIONAL BANK
                                       and
                            THE CHASE MANHATTAN BANK
                            as Co-Syndication Agents

                                       and

                            BANK OF AMERICA, N.A.
                             as Administrative Agent

                           Dated as of October 3, 2000

                         BANC OF AMERICA SECURITIES LLC
                         Lead Arranger and Book Manager

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE I DEFINITIONS, ETC...................................................1
Section 1.1  Definitions.....................................................1
Section 1.2  General........................................................18
Section 1.3  Other Definitions and Provisions...............................19
Section 1.4  Accounting Terms...............................................19
ARTICLE II CREDIT FACILITIES................................................19
Section 2.1 Amount and Terms of Credit......................................19
Section 2.2 Procedure for Advances of Revolving Credit Loans................20
Section 2.3 Repayment of Loans..............................................21
Section 2.4 Revolving Credit Notes..........................................22
Section 2.5 Competitive Bid Loans and Procedure.............................22
Section 2.6 Intentionally Omitted...........................................24
Section 2.7 Commitment Reductions and Increases.............................24
Section 2.8 Termination; Extension Options..................................26
ARTICLE III LETTER OF CREDIT FACILITY.......................................27
Section 3.1 L/C Commitment..................................................27
Section 3.2 Procedure for Issuance of Letters of Credit.....................28
Section 3.3 Fees and Other Charges..........................................28
Section 3.4 L/C Participations..............................................29
Section 3.5 Reimbursement Obligation of the Borrower........................30
Section 3.6 Obligations Absolute............................................30
Section 3.7 Effect of L/C Application.......................................31
ARTICLE IV GENERAL LOAN PROVISIONS..........................................31
Section 4.1 Interest and Utilization Fee....................................31
Section 4.2 Conversion and Continuation of Revolving Credit Loans...........33
Section 4.3 Facility Fees...................................................34
Section 4.4 Manner of Payment...............................................35
Section 4.5 Crediting of Payments and Proceeds..............................35
Section 4.6 Adjustments.....................................................35
Section 4.7 Nature of Obligations of Lenders Regarding Extensions of
            Credit; Assumption by the Administrative Agent..................36
Section 4.8 Changed Circumstances...........................................37
Section 4.9 Indemnity.......................................................40
Section 4.10 Capital Requirements...........................................40
Section 4.11 Taxes..........................................................41
ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING......................43
Section 5.1 Closing.........................................................43
Section 5.2 Conditions to Closing...........................................43
Section 5.3 Conditions to All Extensions of Credit..........................46
ARTICLE VI REPRESENTATIONS AND WARRANTIES...................................46
Section 6.1 Representations and Warranties..................................46
Section 6.2 Accuracy and Completeness of Information........................50

Section 6.3 Labor Matters...................................................50
Section 6.4 Survival of Representations and Warranties, Etc.................51
ARTICLE VII FINANCIAL INFORMATION AND NOTICES...............................51
Section 7.1 Financial Statements, Etc.......................................51
Section 7.2 Notice of Litigation and Other Matters..........................53
ARTICLE VIII AFFIRMATIVE COVENANTS..........................................54
Section 8.1 Payment of Taxes, etc...........................................54
Section 8.2 Maintenance of Insurance........................................54
Section 8.3 Preservation of Corporate Existence, etc........................54
Section 8.4 Compliance with Laws, etc.......................................55
Section 8.5 Compliance with ERISA...........................................55
Section 8.6 Compliance with Contracts, etc..................................55
Section 8.7 Access to Properties............................................55
Section 8.8 Conduct of Business.............................................55
Section 8.9 Use of Proceeds.................................................55
Section 8.10 Additional Guarantors..........................................55
ARTICLE IX NEGATIVE COVENANTS...............................................56
Section 9.1 Financial Covenants.............................................56
Section 9.2 Limitations on Liens............................................56
Section 9.3 Disposition of Debt and Shares of  Restricted Subsidiaries;
            Issuance of Shares by Restricted Subsidiaries; Consolidation,
            Merger or Disposition of Assets.................................58
Section 9.4 Transactions with Affiliates....................................59
Section 9.5 Compliance with Regulations T, U and X..........................59
Section 9.6 Hedging Agreements..............................................60
Section 9.7 ERISA...........................................................60
Section 9.8 Limitations on Acquisitions.....................................60
Section 9.9 Sale Leaseback Transactions.....................................61
Section 9.10 Limitations on Investments.....................................61
ARTICLE X GUARANTY..........................................................62
Section 10.1 Guaranty of Payment............................................62
Section 10.2 Obligations Unconditional......................................62
Section 10.3 Modifications..................................................63
Section 10.4 Waiver of Rights...............................................63
Section 10.5 Reinstatement..................................................64
Section 10.6 Remedies.......................................................64
Section 10.7 Limitation of Guaranty.........................................64
Section 10.8 Termination of Guaranty Upon Divestiture.......................65
ARTICLE XI DEFAULT AND REMEDIES.............................................65
Section 11.1 Events of Default..............................................65
Section 11.2 Remedies.......................................................68
Section 11.3 Rights and Remedies Cumulative; Non-Waiver; etc................69
ARTICLE XII THE ADMINISTRATIVE AGENT........................................69
Section 12.1 Appointment....................................................69
Section 12.2 Delegation of Duties...........................................69
Section 12.3 Exculpatory Provisions.........................................70
Section 12.4 Reliance by the Administrative Agent...........................70

Section 12.5 Notice of Default..............................................70
Section 12.6 Non-Reliance on the Administrative Agent and Other Lenders.....71
Section 12.7 Indemnification................................................71
Section 12.8 The Administrative Agent in Its Individual Capacity............72
Section 12.9 Resignation of the Administrative Agent; Successor
             Administrative Agent...........................................72
ARTICLE XIII MISCELLANEOUS..................................................73
Section 13.1 Notices........................................................73
Section 13.2 Expenses, Indemnity............................................74
Section 13.3 [Intentionally Omitted.].......................................75
Section 13.4 Governing Law..................................................75
Section 13.5 Consent to Jurisdiction........................................75
Section 13.6 Waiver of Jury Trial...........................................76
Section 13.7 Reversal of Payments...........................................76
Section 13.8 Accounting Matters.............................................76
Section 13.9 Successors and Assigns; Participations; Confidentiality........76
Section 13.10 Amendments, Waivers and Consents..............................80
Section 13.11 Performance of Duties.........................................80
Section 13.12 All Powers Coupled with Interest..............................80
Section 13.13 Survival of Indemnities.......................................81
Section 13.14 Titles and Captions...........................................81
Section 13.15 Severability of Provisions....................................81
Section 13.16 Counterparts.     ............................................81
Section 13.17 Binding Effect; Amendment and Restatement; Term of Agreement..81
Section 13.18 Inconsistencies with Other Documents; Independent
              Effect of Covenants...........................................82

                                    SCHEDULES

Schedule 1.1(a) - Commitments as of Closing Date
Schedule 1.1(b) - Unrestricted Subsidiaries of the Borrower as of Closing Date
Schedule 6.1.6 - Subsidiaries of the Borrower as of Closing Date
Schedule 9.2 - Liens as of Closing Date
Schedule 13.1 - Notice Addresses for Lenders

                                    EXHIBITS

Exhibit A      -    Form of Revolving Credit Note
Exhibit B      -    Form of Notice of Revolving Credit Borrowing
Exhibit C      -    Form of Notice of Account Designation
Exhibit D      -    Form of Notice of Prepayment
Exhibit E      -    Form of Guarantor Joinder Agreement
Exhibit F      -    Form of Notice of Conversion/Continuation
Exhibit G      -    Form of Assignment and Acceptance

      CREDIT AGREEMENT dated as of October 3, 2000 among THE PITTSTON COMPANY, a
Virginia  corporation (the "Borrower"),  certain of the Borrower's  Subsidiaries
from time to time  party  hereto  (each a  "Guarantor,"  and  together  with the
Borrower,  the "Credit  Parties," and each, a "Credit Party"),  the Lenders from
time to time party hereto,  FLEET NATIONAL BANK and THE CHASE MANHATTAN BANK, as
Co-Syndication  Agents, and BANK OF AMERICA,  N.A., as Administrative Agent (the
"Administrative  Agent")  (all  capitalized  terms used  herein  and  defined in
Section 1.1 are used herein as therein defined).

                              STATEMENT OF PURPOSE

      WHEREAS,  the  Borrower  wishes  to  establish  with  the  Lenders  credit
facilities  providing  for  revolving  loans  and  letters  of  credit  of up to
$370,000,000 in the aggregate  maximum principal amount at any time outstanding,
and the  Lenders and the  Administrative  Agent are  willing to  establish  such
credit facilities on the terms and conditions set forth herein;

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

                                    ARTICLE I

                                 DEFINITIONS, ETC.

      Section 1.1  Definitions.

      The following  terms when used in this  Agreement  shall have the meanings
assigned to them below:

      "364  Day  Facility"  means  the  short  term  revolving  credit  facility
established pursuant to Section 2.1 hereof.

      "364 Day Facility  Commitment" means (a) as to any Lender,  the obligation
of such Lender to make Revolving Credit Loans under the 364 Day Facility for the
account of the Borrower in an aggregate principal amount at any time outstanding
not to exceed the amount  set forth  opposite  such  Lender's  name on  Schedule
1.1(a) hereto, as such amount may be increased,  reduced or modified at any time
or from time to time pursuant to the terms hereof and (b) as to all Lenders, the
aggregate 364 Day Facility  Commitment of all Lenders to make  Revolving  Credit
Loans under the 364 Day  Facility,  as such amount may be reduced or modified at
any time or from time to time pursuant to the terms hereof. The 364 Day Facility
Commitment  of all Lenders on the Closing Date shall be One Hundred  Eighty Five
Million and No/100s Dollars ($185,000,000).

      "364 Day Facility  Commitment  Percentage"  means, as to any Lender at any
time,  the ratio of (a) the amount of the 364 Day  Facility  Commitment  of such
Lender to (b) the aggregate 364 Day Facility Commitment of all of the Lenders.

      "364 Day Facility Fee" shall have the meaning  assigned thereto in Section
4.3.1.

                                       1

      "364 Day Facility  Specified  Maturity Date" means October 2, 2001 or such
later date as determined pursuant to Section 2.8.3.

      "364 Day  Facility  Termination  Date"  means  the  earliest  of the dates
referred to in Section 2.8.1.

      "Administrative   Agent"   means  Bank  of  America  in  its  capacity  as
Administrative Agent hereunder,  and any successor thereto appointed pursuant to
Section 12.9.

      "Administrative  Agent's  Office"  means the office of the  Administrative
Agent  specified in or determined in accordance  with the  provisions of Section
13.1.3.

      "Affiliate"  means,  with respect to any Person,  any other Person  (other
than  a  Subsidiary)   which   directly  or  indirectly   through  one  or  more
intermediaries,  controls, or is controlled by, or is under common control with,
such  first  Person or any of its  Subsidiaries.  The term  "control"  means the
possession,  directly  or  indirectly,  of any  power to  direct  or  cause  the
direction of the management and policies of a Person,  whether through ownership
of voting securities, by contract or otherwise.

      "Aggregate  Revolving Credit  Commitment" means (a) as to any Lender,  the
aggregate of such Lender's 364 Day Facility  Commitment  and Three Year Facility
Commitment, as such amount may be increased,  reduced or modified at any time or
from time to time  pursuant to the terms hereof and (b) as to all  Lenders,  the
aggregate 364 Day Facility  Commitment and Three Year Facility Commitment of all
Lenders,  as such  amount may be reduced or modified at any time or from time to
time pursuant to the terms hereof. The Aggregate  Revolving Credit Commitment of
all  Lenders on the  Closing  Date shall be Three  Hundred  Seventy  Million and
No/100s Dollars ($370,000,000).

      "Aggregate Revolving Credit Commitment Percentage" means, as to any Lender
at any  time,  the  ratio  of  (a)  such  Lender's  Aggregate  Revolving  Credit
Commitment  to (b)  the  Aggregate  Revolving  Credit  Commitment  of all of the
Lenders.

      "Agreement"   means  this  Credit   Agreement,   as   amended,   restated,
supplemented or otherwise modified.

      "Applicable Law" means all applicable  provisions of constitutions,  laws,
statutes,   ordinances,   rules,  treaties,   regulations,   permits,  licenses,
approvals, interpretations and orders of Governmental Authorities and all orders
and decrees of all courts and arbitrators.

      "Applicable  LT Rating" means as to each of Moody's and S&P, its rating of
the  Borrower's  senior,  unsecured,  long-term,  non-credit-enhanced  debt  for
borrowed  money (or of the unsecured  long-term  debt of any other  Person,  the
rating  of  which  by  Moody's  and  S&P  is  based  upon a  senior,  unsecured,
non-credit-enhanced guarantee by the Borrower).

      "Applicable  Percentage"  means,  for  purposes  of  calculating  (a)  the
interest rate  applicable to Offshore  Rate Loans under Section  4.1.1;  (b) the
Utilization Fee under Section 4.1.6; or (c) the Facility Fees under Section 4.3,
the  applicable  percentage  set  forth in the  following  tables  opposite  the
Applicable LT Rating:

                                       2

                        Offshore           Offshore
                        Rate               Rate
                        Loans              Loans      Facility
                        under     Facility under the  Fee for   Utilization
                        the 364   Fee for  Three      Three     Fee with
 Pricing  Applicable LT Day       364 Day  Year       Year      Utilization
  Level      Rating     Facility  Facility Facility   Facility  >50%
- ---------------------------------------------------------------------------
                                                
I           A-/A3 or     0.290%    0.085%    0.275%    0.100%     0.125%
              above
- ---------------------------------------------------------------------------
II          BBB+/Baa1    0.525%    0.100%    0.500%    0.125%     0.125%

- ---------------------------------------------------------------------------
III         BBB/Baa2     0.850%    0.150%    0.825%    0.175%     0.125%

- ---------------------------------------------------------------------------
IV          BBB-/Baa3    1.050%    0.200%    1.025%    0.225%     0.125%

- ---------------------------------------------------------------------------
V            BB+/Ba1     1.250%    0.250%    1.200%    0.300%     0.125%

- ---------------------------------------------------------------------------
VI          BB/Ba2 or    1.400%    0.350%    1.350%    0.400%     0.125%
              below
- ---------------------------------------------------------------------------

For purposes of the foregoing,  (i) if the Applicable LT Ratings  established by
Moody's and S&P are different but correspond to consecutive Pricing Levels, then
the  Pricing  Level with the lower  number  (I.E.,  corresponding  to the better
rating)  shall  apply,  and (ii) if the  Applicable  LT Ratings  established  by
Moody's and S&P are different and correspond to non-consecutive  Pricing Levels,
then the Pricing  Level with a number equal to the higher  Pricing  Level number
(I.E.,  corresponding  to the worse  rating)  MINUS one shall  apply  (I.E.,  if
Moody's and S&P's  Applicable LT Ratings  correspond to Pricing Levels I and IV,
respectively, then Pricing Level III will apply).

      The Applicable  Percentage shall be adjusted on the date five (5) Business
Days  after the date of any  change in the  Applicable  LT  Ratings  (each  such
adjustment date a "Rate Determination  Date"). Each Applicable  Percentage shall
be  effective  from  a  Rate   Determination  Date  until  the  next  such  Rate
Determination Date. Adjustments in the Applicable Percentages shall be effective
as to existing  Extensions of Credit as well as any new Extension of Credit made
thereafter.

      "Arranger" means Banc of America Securities LLC.

      "Assignment and  Acceptance"  shall have the meaning  assigned  thereto in
Section 13.9.2(c).

     "Bank  of  America"  means  Bank  of  America,  N.A.,  a  national  banking
association, and its successors.
                                       3

      "Bankruptcy  Event"  means  any of the  Events  of  Default  set  forth in
Sections  11.1.8,  11.1.9 or  11.1.11,  or any of those  events  which  with the
passage of time, the giving of notice or any other  condition,  would constitute
such an Event of Default.

      "Base Rate" means,  at any time,  the higher of (a) the Prime Rate and (b)
the sum of (i) the  Federal  Funds Rate plus (ii) 1/2 of 1%;  each change in the
Base Rate shall take  effect  simultaneously  with the  corresponding  change or
changes in the Prime Rate or the Federal Funds Rate.

      "Base Rate Loan" means any Loan bearing  interest at a rate based upon the
Base Rate as provided in Section 4.1.1.

      "Board" shall mean the Board of Governors of the Federal Reserve System of
the United States (or any successor thereof).

      "Borrower" means The Pittston Company, a Virginia corporation.

      "Business  Day" means any day other  than a  Saturday,  a Sunday,  a legal
holiday or a day on which banking institutions are authorized or required by law
or other governmental  action to close in Charlotte,  North Carolina,  Richmond,
Virginia  or New York,  New York;  provided  that in the case of  Offshore  Rate
Loans,  such day is also a day on which dealings between banks are carried on in
U.S. dollar deposits in the London interbank market.

      "Capital  Lease"  means,  with  respect  to any  Person who is a lessee of
property,  any lease of any property that should,  in  accordance  with GAAP, be
classified and accounted for as a capital lease on the lessee's balance sheet.

      "Capital  Lease  Obligation"  means the  amount of the  liability  that is
capitalized in respect of any Capital Lease in accordance with GAAP.

      "Cash  Equivalents"  means (a) demand deposits  maintained in the ordinary
course of business,  (b) securities  issued or directly and fully  guaranteed or
insured by the United States or any agency or instrumentality  thereof (provided
that the full  faith and  credit of the  United  States is  pledged  in  support
thereof)  having  maturities  of not more than  twelve  months  from the date of
acquisition,  (c) time  deposits,  certificates  of  deposit,  master  notes and
bankers acceptances of (i) any Lender, (ii) any commercial bank or trust company
(or any Affiliate  thereof) having capital and surplus in excess of $500,000,000
or (iii) any bank whose short-term  commercial paper rating from S&P is at least
A-2 or the equivalent  thereof or from Moody's is at least P-2 or the equivalent
thereof (any such bank,  trust  company or Affiliate  thereof being an "Approved
Institution"),  in each case with  maturities of not more than 270 days from the
date of  acquisition,  (d)  commercial  paper and  variable  or fixed rate notes
issued by any Approved  Institution  (or by the parent  company  thereof) or any
variable rate notes issued by, or guaranteed by, any domestic  corporation rated
A-2 (or similar  ratings by successor  rating  agencies) or better by S&P or P-2
(or  similar  ratings by  successor  rating  agencies)  or better by Moody's and
maturing within six months of the date of acquisition, (e) repurchase agreements
entered into by any Person with a bank or trust  company  (including  any of the
Lenders) or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct  obligations issued by or fully guaranteed by the United
States in which such  Person  shall have a  perfected  first  priority  security

                                       4

interest  (subject  to no other  Liens)  and  having,  on the  date of  purchase
thereof,  a fair market  value of at least 100% of the amount of the  repurchase
obligations,  (f)  Investments,  classified in  accordance  with GAAP as current
assets,  in money market  investment  programs  registered  under the Investment
Company  Act  of  1940,  as  amended,   which  are   administered   by  Approved
Institutions,  (g) obligations of states,  municipalities,  counties,  political
subdivisions,  agencies of the foregoing and other  similar  entities,  rated at
least A, MIG-1 or MIG-2 by Moody's or at least A by S&P (or  similar  ratings by
successor rating agencies),  (h) unrated obligations of states,  municipalities,
counties,  political  subdivisions,  agencies of the foregoing and other similar
entities,  supported  by  irrevocable  letters  of  credit  issued  by  Approved
Institutions,  or (i) unrated  general  obligations  of states,  municipalities,
counties,  political  subdivisions,  agencies of the foregoing and other similar
entities,  provided that the issuer has other  outstanding  general  obligations
rated at least A, MIG-1 or MIG-2 by Moody's or A by S&P (or  similar  ratings by
successor rating agencies).

      "Change in Control"  shall be deemed to have occurred if (i) any person or
group of persons (within the meaning of Section 13(d) of the Securities Exchange
Act, as  amended)  shall  obtain,  directly or  indirectly,  beneficially  or of
record,  ownership  or control in one or more series of  transactions  of shares
representing more than 35% of the aggregate ordinary voting power represented by
the issued and  outstanding  capital stock of the  Borrower,  provided that such
person or group of persons shall be deemed to have  obtained  such  ownership or
control  on the date  thirty  days  after the date that such  person or group of
persons actually obtains such ownership or control, (ii) a majority of the seats
on the board of  directors of the  Borrower  shall be occupied by persons  other
than (x)  directors  on the date of this  Agreement or (y)  directors  initially
nominated  or  appointed  by action of the board of directors of the Borrower or
(iii)  there  shall  have  occurred  under  any  indenture  or other  instrument
evidencing Debt of the Borrower or any Restricted  Subsidiary for borrowed money
in excess of  $25,000,000 a "change in control" (as defined in such indenture or
other instrument evidencing such Debt) beyond any grace period permitted therein
obligating  the Borrower or any Restricted  Subsidiary to repurchase,  redeem or
repay all or any part of such Debt or any capital stock provided for therein.

      "Closing Date" means the date of this Agreement or such later Business Day
upon which each  condition  described  in Section  5.2 and  Section 5.3 shall be
satisfied or waived in all respects.

      "Code"  means  the  Internal  Revenue  Code of  1986,  and the  rules  and
regulations thereunder, each as amended, supplemented or otherwise modified from
time to time.

      "Commitment"  means,  as to any Lender at any time,  such Lender's 364 Day
Facility  Commitment,  Three Year  Facility  Commitment  or Aggregate  Revolving
Credit Commitment, as the context requires.

      "Commitment Percentage" means, as to any Lender at any time, such Lender's
364  Day  Facility  Commitment   Percentage,   Three  Year  Facility  Commitment
Percentage or Aggregate Revolving Credit Commitment  Percentage,  as the context
requires.

      "Competitive  Bid"  means an offer by a Lender to make a  Competitive  Bid
Loan in accordance with Section 2.5.

                                       5

      "Competitive Bid Loan" means any Loan made pursuant to Section 2.5 and all
such Loans collectively as the context requires.

      "Competitive Bid Rate" means the rate of interest per annum expressed as a
percentage  rate in the form of a decimal  to no more than four  decimal  places
offered by a Lender making a Competitive Bid with respect to any Competitive Bid
Loan.

      "Consolidated  Debt"  means  Debt  of  the  Borrower  and  its  Restricted
Subsidiaries,  determined on a consolidated  basis in accordance with GAAP after
giving  appropriate  effect to any  outside  minority  interests  in  Restricted
Subsidiaries.

       "Consolidated  EBITDA"  shall mean,  for the Borrower and its  Restricted
Subsidiaries for any period,  an amount equal to the sum of (a) Consolidated Net
Income  for  such  period  plus  (b)  to  the  extent  deducted  in  determining
Consolidated Net Income for such period, (i) Consolidated Interest Expense, (ii)
income tax expense, (iii) depreciation, depletion and amortization, and (iv) all
other non-cash  charges,  determined on a consolidated  basis in accordance with
GAAP after giving  appropriate  effect to any outside minority  interests in the
Restricted Subsidiaries.

      "Consolidated  Interest  Expense" means, for any period, as applied to the
Borrower and its Restricted Subsidiaries,  all interest expense (whether paid or
accrued)  and  capitalized  interest,   including  without  limitation  (a)  the
amortization  of debt  discount and premium,  (b) the interest  component  under
Capital  Leases,  and (c) the  implied  interest  component,  discount  or other
similar fees or charges in connection with any asset  securitization  program in
each case  determined  on a  consolidated  basis in  accordance  with GAAP after
giving  appropriate  effect to any outside minority  interests in the Restricted
Subsidiaries.

      "Consolidated  Lease  Rentals" means Lease Rentals of the Borrower and its
Restricted  Subsidiaries,  determined on a consolidated basis in accordance with
GAAP after giving  appropriate  effect to any outside minority  interests in the
Restricted Subsidiaries.

      "Consolidated  Net Income" means,  for any period,  the net income,  after
taxes,  of  the  Borrower  and  its  Restricted  Subsidiaries  for  such  period
determined  on a  consolidated  basis  in  accordance  with  GAAP  after  giving
appropriate   effect  to  any  outside  minority  interests  in  the  Restricted
Subsidiaries,  but excluding,  to the extent  reflected in determining  such net
income,  (a) any  extraordinary  gains and losses for such period,  (b) any loss
arising  from or relating to the  initial  classification  of any portion of the
Pittston   Minerals  Group  as   discontinued   operations  and  any  subsequent
adjustments associated with the disposition of such discontinued operations, (c)
any non-cash  write-down  or write-off in the book value of any assets,  and (d)
any loss in connection with the disposition of any assets.

      "Consolidated Net Worth" means, as of any date, as applied to the Borrower
and its Restricted Subsidiaries, shareholders' equity or net worth as determined
and  computed  on a  consolidated  basis in  accordance  with GAAP after  giving
appropriate   effect  to  any  outside  minority  interests  in  the  Restricted
Subsidiaries,  provided that in determining "Consolidated Net Worth" there shall
be (a) included any issuance of preferred stock by the Borrower and (b) excluded
(i) any extraordinary  gains and losses,  (ii) any loss arising from or relating
to the initial  classification  of any portion of the Pittston Minerals Group as

                                       6

discontinued  operations  and any  subsequent  adjustments  associated  with the
disposition of such discontinued  operations,  (iii) any non-cash  write-down or
write-off in the book value of any assets , and (iv) any loss in connection with
the disposition of any assets.

      "Consolidated  Total  Assets"  means,  as of  any  date,  the  assets  and
properties  of the Borrower and its  Restricted  Subsidiaries,  determined  on a
consolidated  basis in accordance with GAAP after giving  appropriate  effect to
any outside minority interests in the Restricted Subsidiaries.

      "Contaminant"  shall  mean  any  waste,   hazardous  material,   hazardous
substance,  toxic  substance,  hazardous  waste,  special  waste,  petroleum  or
petroleum-derived  substance or waste that is regulated under any  Environmental
Law.

      "Credit Facility" means the collective  reference to the 364 Day Facility,
the Three Year  Facility and the L/C Facility or any one of them, as the context
requires.

      "Credit  Parties"  means,  collectively,  the Borrower and the Guarantors;
"Credit Party" means any one of them.

      "Current SEC Reports"  means the most recent  report on Form 10-K,  or any
successor  form,  and any  amendments  thereto  filed by the  Borrower  with the
Securities and Exchange  Commission (the  "Commission") and any reports on Forms
10-Q and/or 8-K, or any successor  forms, and any amendments  thereto,  filed by
the Borrower with the Commission after the date of such report on Form 10-K.

      "Debt" of any Person means at any date,  without  duplication,  the sum of
the  following  determined  and  calculated  in  accordance  with GAAP:  (a) all
obligations  of such Person for  borrowed  money,  (b) all  obligations  of such
Person issued or assumed as the deferred  purchase price of property or services
purchased by such Person (other than trade debt incurred in the ordinary  course
of business  and due within six months of the  incurrence  thereof)  which would
appear as liabilities on a balance sheet of such Person,  (c) all Debt of others
secured  by (or for  which  the  holder  of such  Debt  has an  existing  right,
contingent  or  otherwise,  to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person,  whether
or not the  obligations  secured  thereby have been  assumed,  provided that for
purposes  hereof the amount of such Debt shall be  calculated  at the greater of
(i) the amount of such Debt as to which  there is  recourse  to such  Person and
(ii) the fair market value of the property which is subject to the Lien, (d) all
Support  Obligations  of such  Person  with  respect to Debt of others,  (e) the
principal  portion of all obligations of such Person under Capital  Leases,  (f)
the maximum amount of all drafts drawn under standby letters of credit issued or
bankers'  acceptances  facilities created for the account of such Person (to the
extent unreimbursed),  and (g) the outstanding attributed principal amount under
any asset  securitization  program of such Person.  The Debt of any Person shall
include the Debt of any  partnership  or joint venture in which such Person is a
general  partner or a joint  venturer,  but only to the extent to which there is
recourse to such Person for payment of such Debt.

      "Default" means any of the events specified in Section 11.1 which with the
passage of time,  the  giving of notice or both,  would  constitute  an Event of
Default.

                                       7

      "Dollars"  or "$" means,  unless  otherwise  qualified,  dollars in lawful
currency of the United States.

      "Eligible  Assignee"  means (a) a Lender;  (b) an Affiliate of a Lender or
any fund that  invests  in bank  loans  and is  managed  by the same  investment
advisor  as  another   Lender;   and  (c)  any  other  Person  approved  by  the
Administrative  Agent  and,  unless  an Event of  Default  has  occurred  and is
continuing,  the  Borrower  (such  approval not to be  unreasonably  withheld or
delayed by the Borrower or the Administrative  Agent);  provided,  however, that
(i) neither the Borrower nor an  Affiliate of the Borrower  shall  qualify as an
Eligible  Assignee  and (ii)  neither  any  Person  engaged in the same lines of
business as the  Borrower or any of its  Subsidiaries  nor any  Affiliate of any
such Person shall qualify as an Eligible Assignee.

      "Environmental  Laws" means any and all federal,  state, local and foreign
laws, statutes,  ordinances,  rules, regulations,  permits, licenses, approvals,
binding  interpretations  and  orders  of courts  or  Governmental  Authorities,
relating to the protection of human health or the  environment,  including,  but
not  limited  to,  requirements  pertaining  to  the  manufacture,   processing,
distribution,  use,  treatment,  storage,  disposal,  transportation,  handling,
reporting,  licensing,  permitting,  investigation  or  remediation of Hazardous
Materials.

      "ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and  regulations  thereunder,  each as amended,  supplemented or otherwise
modified from time to time.

      "ERISA  Affiliate"  means any Person who  together  with the  Borrower  is
treated as a single employer  within the meaning of Section 414(b),  (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.

      "Eurodollar  Reserve  Percentage"  means,  for  any  day,  the  percentage
(expressed as a decimal and rounded  upwards,  if necessary,  to the next higher
1/16th of 1%)  which is in  effect  for such day as  prescribed  by the  Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic,  supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member  bank of the  Federal  Reserve  System  in New York City and to which the
Administrative Agent or any Lender is then subject.

      "Event of  Default"  means any of the events  specified  in Section  11.1,
provided  that any  requirement  for passage of time,  giving of notice,  or any
other condition, has been satisfied.

      "Existing  Credit  Agreement" means the Credit Agreement dated as of March
4, 1994 among the Borrower,  the lenders  parties  thereto,  The Chase Manhattan
Bank  (successor to Chemical  Bank),  Credit  Suisse First Boston  (successor to
Credit Suisse) and Morgan Guaranty Trust Company as Co-Agents, and Credit Suisse
First Boston, as  Administrative  Agent, as amended and in effect on the Closing
Date.

      "Extensions  of Credit"  means,  as to any  Lender at any time,  an amount
equal to the sum of (a) the aggregate  principal  amount of all Revolving Credit
Loans  made by such  Lender  then  outstanding,  (b) such  Lender's  Three  Year
Facility  Commitment  Percentage of the L/C Obligations then outstanding and (c)
the aggregate  principal amount of all Competitive Bid Loans made by such Lender

                                       8

then  outstanding.  "Extension  of  Credit"  means,  as to any  Lender  (a)  any
component  of such  Lender's  Extensions  of  Credit  or (b) the  making  of, or
participation  in, a Loan by such  Lender or the  issuance or  extension  of, or
participation in, a Letter of Credit by such Lender, as the context may require.

      "FDIC" means the Federal Deposit Insurance  Corporation,  or any successor
thereto.

      "Federal  Funds  Rate"  means,  the rate per annum  (rounded  upwards,  if
necessary,  to the next higher 1/16th of 1%)  representing  the daily  effective
federal  funds  rate as quoted by the  Administrative  Agent  and  confirmed  in
Federal  Reserve  Board  Statistical  Release  H.15  (519) or any  successor  or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not  available,  then "Federal  Funds Rate" shall mean a daily rate
which is determined,  in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national  federal funds
market at 9:00 a.m. (Charlotte time). Rates for any weekend day or holiday shall
be the same as the rate for the immediately preceding Business Day.

      "Financial  Letters of Credit"  shall mean any Letter of Credit  issued to
any Person  other than an Affiliate of the Borrower to secure the payment by any
such Person of its  financial  obligations,  or to provide  counter or "back-up"
guarantees  in support  of bank  guarantees,  letters of credit or other  credit
facilities  afforded to the Borrower or any of its  Subsidiaries,  or to support
local currency borrowings outside the United States.

      "Fiscal Year" means the fiscal year of the Borrower  ending on December 31
in any year.

      "Foreign  Lender"  means any Lender that is organized  under the laws of a
jurisdiction other than the United States or any State or territory thereof.

      "Foreign  Pension  Plan"  shall mean any plan,  fund  (including,  without
limitation,  any  superannuation  fund) or other similar program  established or
maintained  outside the United  States of America by the  Borrower or any one or
more of its Subsidiaries  primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America,  which plan,
fund or other similar program  provides,  or results in,  retirement  income,  a
deferral of income in  contemplation  of  retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.

      "Foreign  Subsidiary"  means each  Subsidiary  of the Borrower that is not
incorporated  under the laws of the  United  States  or any  State or  territory
thereof.

      "GAAP"  means  generally  accepted  accounting  principles  in the  United
States, as recognized by the American  Institute of Certified Public Accountants
and  the  Financial  Accounting   Standards  Board,   consistently  applied  and
maintained on a consistent  basis  throughout the period  indicated,  subject to
Section 1.4.

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

      "Governmental  Authority" means any nation,  province,  state or political
subdivision  thereof,  and any  government or any Person  exercising  executive,

                                       9

legislative,   regulatory  or  administrative  functions  of  or  pertaining  to
government,  and any  corporation or other entity owned or  controlled,  through
stock or capital ownership or otherwise, by any of the foregoing.

      "Guaranteed   Obligations"  means,   without   duplication,   all  of  the
obligations  of the  Borrower  to the  Lenders  and  the  Administrative  Agent,
whenever  arising,  under this  Agreement,  the Notes or any other Loan Document
(including, but not limited to, obligations with respect to principal,  interest
and fees).

      "Guarantor"  means  each  Subsidiary  of  the  Borrower  identified  as  a
"Guarantor" on the signature pages hereto and any Material  Domestic  Subsidiary
that  becomes a Guarantor  hereunder  after the Closing  Date by  execution of a
Guarantor Joinder Agreement pursuant to Section 8.10.

      "Guarantor Joinder Agreement" means a Guarantor Joinder Agreement executed
by a Guarantor and the Administrative Agent in substantially the form of Exhibit
E, as amended, restated, supplemented or otherwise modified.

      "Hazardous  Materials"  means any substances or materials (a) which are or
become  regulated  or  defined  as  hazardous  wastes,   hazardous   substances,
pollutants,  contaminants,  chemical  substances or mixtures or toxic substances
under  any  Environmental  Law,  (b)  which  are  toxic,  explosive,  corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful
to  human  health  or  the  environment  and  are  or  become  regulated  by any
Governmental  Authority,  (c) the  presence of which  require  investigation  or
remediation  under any  Environmental  Law,  (d) the  discharge  or  emission or
release of which  requires a permit or license under any Applicable Law or other
Governmental  Approval,  or (e) which  contain,  without  limitation,  asbestos,
polychlorinated   biphenyls,   urea  formaldehyde  foam  insulation,   petroleum
hydrocarbons,  petroleum derived  substances or waste,  crude oil, nuclear fuel,
natural gas or synthetic gas.

      "Hedging  Agreement"  means any agreement with respect to an interest rate
swap, collar,  cap, floor or forward rate agreement,  foreign currency agreement
or other  agreement  executed to protect the Borrower or any Subsidiary  against
fluctuations  in the prices of commodities,  and any confirming  letter executed
pursuant  to such  hedging  agreement,  all as amended,  restated  or  otherwise
modified from time to time.

      "Interest Coverage Ratio" means, as of the last day of any fiscal quarter,
the ratio of (a) Consolidated  EBITDA to (b) Consolidated  Interest Expense,  in
each case for the period of four (4)  consecutive  fiscal  quarters ending as of
such day.

      "Interest  Period"  shall  have the  meaning  assigned  thereto in Section
4.1.2.

      "Investment"  in any Person means (a) the  acquisition  (whether for cash,
property,  services,  assumption  of  indebtedness,  securities or otherwise) of
capital stock, bonds, notes,  debentures,  partnership,  joint ventures or other
ownership interests or other securities of such Person, (b) any deposit with, or
advance,  loan or other extension of credit to, such Person (other than deposits
made in  connection  with the  purchase  of  equipment  or other  assets  in the
ordinary  course  of  business)  or (c) any  other  capital  contribution  to or
investment in such Person.

                                       10

      "Issuing  Lender"  means Bank of America in its  capacity as issuer of any
Letter  of  Credit,  and any  other  Lender  mutually  acceptable  and on  terms
satisfactory to the Borrower and the Administrative Agent.

      "Labor  Laws"  shall mean any and all  federal,  state,  local and foreign
statutes, laws, regulations, ordinances, rules, judgments and orders relating to
employment, equal employment opportunity, nondiscrimination, immigration, wages,
hours,  benefits,  collective  bargaining,  the payment of social  security  and
similar taxes, occupational safety and health, and plant closing.

      "L/C  Application"  means an  application,  in the form  specified  by any
Issuing  Lender from time to time,  requesting  such  Issuing  Lender to issue a
Letter of Credit.

      "L/C Commitment" means $100,000,000.

      "L/C Facility" means the letter of credit facility established pursuant to
Article III hereof.

      "L/C Fee" shall have the meaning assigned thereto in Section 3.3.1.

      "L/C Obligations" means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate  amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.

      "L/C  Participants"  means the  collective  reference  to all the  Lenders
having a Three  Year  Facility  Commitment  other  than the  applicable  Issuing
Lender.

      "Lease"  means a lease,  other than a Capital  Lease,  of real or personal
property.

      "Lease  Rentals"  for any  period  means the sum of the  rental  and other
obligations  to be paid by the lessee under a Lease during the remaining term of
such Lease  (excluding  any  extension  or renewal  thereof at the option of the
lessor or the lessee  unless  such  option has been  exercised),  excluding  any
amount required to be paid by the lessee  (whether or not therein  designated as
rental or additional  rental) on account of maintenance and repairs,  insurance,
taxes, assessments, water rates and similar charges.

      "Lender"  means each Person  executing  this  Agreement as a Lender as set
forth on the  signature  pages hereto and each Person that  hereafter  becomes a
party to this Agreement as a Lender pursuant to Section  13.9.2,  other than any
party hereto that ceases to be a party  hereto  pursuant to any  Assignment  and
Acceptance.

      "Lending  Office"  means,  with respect to any Lender,  the office of such
Lender   maintaining  such  Lender's   Aggregate   Revolving  Credit  Commitment
Percentage of the Revolving Credit Loans.

      "Letters  of Credit"  shall have the meaning  assigned  thereto in Section
3.1.

      "Leverage  Ratio"  shall mean,  as of the date of any  determination  with
respect to the Borrower, the ratio of (a) the sum of (i) Consolidated Debt as of

                                       11

such date,  plus (ii) the amount by which (A) the  aggregate  amount,  as of the
preceding  December  31 (or as of such date if such  date is  December  31),  of
Consolidated  Lease Rentals  under  non-cancellable  Leases  entered into by the
Borrower or any of its Subsidiaries,  discounted to present value at 10% and net
of aggregate minimum  non-cancellable  sublease  rentals,  determined on a basis
consistent with Note 13 to the Borrower's  consolidated  financial statements at
and for the period  ended  December 31, 1999,  included in the  Borrower's  1999
annual report to shareholders,  exceeds (B) $350,000,000,  to (b) the sum of (i)
the amount  determined  pursuant to clause (a), plus (ii) Consolidated Net Worth
as of such date.

      "LIBOR"  means,  for  any  Offshore  Rate  Loan  for any  Interest  Period
therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the nearest
1/16th of 1%)  appearing on Telerate  Page 3750 (or any  successor or equivalent
page) as the London  interbank  offered  rate for deposits in Dollars and in the
approximate  amount of the Loan to be made or continued  as, or converted  into,
such  Offshore  Rate Loan at  approximately  11:00  a.m.  (London  time) two (2)
Business  Days  prior  to the  first  day of  such  Interest  Period  for a term
comparable to such Interest Period; provided,  however, if more than one rate is
specified on Telerate Page 3750 the relevant rate shall be the  arithmetic  mean
of all such  rates.  If for any  reason  such  rate is not  available,  the term
"LIBOR" shall mean, for any Offshore Rate Loan for any Interest Period therefor,

            (a) the  rate per  annum  (rounded  upwards,  if  necessary,  to the
      nearest  1/16th of 1%) appearing on Reuters Screen LIBO Page as the London
      interbank  offered  rate for  deposits in Dollars  and in the  approximate
      amount of the Loan to be made or  continued  as, or converted  into,  such
      Offshore  Rate Loan at  approximately  11:00  a.m.  (London  time) two (2)
      Business  Days prior to the first day of such  Interest  Period for a term
      comparable to such Interest Period;  provided,  however,  if more than one
      rate is specified on Reuters  Screen LIBO Page, the relevant rate shall be
      the arithmetic mean of all such rates, or

            (b) if no rate is  available on the Reuters  Screen LIBO page,  then
      the rate  determined by the  Administrative  Agent at which Dollars in the
      approximate  amount of the Loan to be made or  continued  as, or converted
      into,  such  Offshore Rate Loan are offered by leading banks in the London
      interbank  market  at  approximately  11:00  a.m.  (London  time)  two (2)
      Business  Days prior to the first day of the  applicable  Interest  Period
      (rounded upwards, if necessary, to the nearest 1/16th of 1%).

      "Lien"  means,  with respect to any asset,  any  mortgage,  lien,  pledge,
charge,  security  interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset  which it has  acquired  or holds  subject to the  interest  of a
vendor or lessor under any conditional  sale  agreement,  Capital Lease or other
title retention agreement relating to such asset.

      "Loan Documents" means,  collectively,  this Agreement, the Notes, the L/C
Applications,   any  Guarantor   Joinder  Agreement  and  each  other  document,
instrument  and  agreement  executed  and  delivered by any Credit Party for the
benefit  of the  Administrative  Agent or any  Lender  in  connection  with this
Agreement, all as may be amended, restated or otherwise modified.

                                       12

      "Loans" means the collective  reference to the Revolving  Credit Loans and
the Competitive Bid Loans; "Loan" means any one of such Loans.

      "Margin Stock" shall have the meaning given such term under Regulation U.

      "Material  Adverse  Effect"  means (a) a  material  adverse  effect on the
financial  condition or results of operations of the Borrower and its Restricted
Subsidiaries  taken as a whole  that  would  impair  the  ability  of the Credit
Parties to perform their  obligations under the Loan Documents or (b) a material
adverse  effect on the rights or remedies  of the Lenders or the  Administrative
Agent under the Loan Documents.

      "Material Domestic  Subsidiary" means any Subsidiary of the Borrower which
(a) is organized  under the laws of the United States,  any state thereof or the
District of Columbia and (b) together with its Subsidiaries,  (i) owns more than
twenty percent (20%) of Consolidated Total Assets or (ii) accounts for more than
twenty percent (20%) of Consolidated EBITDA.

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

      "Multiemployer  Plan" means a  "multiemployer  plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making,  has
made, is accruing or has accrued an obligation to make, contributions within the
preceding six years.

      "Notes"  means the  collective  reference to the  Revolving  Credit Notes;
"Note" means any one of such Notes.

      "Notice of Account Designation" shall have the meaning assigned thereto in
Section 2.2.2.

      "Notice  of  Conversion/Continuation"  shall  have  the  meaning  assigned
thereto in Section 4.2.

      "Notice of Prepayment"  shall have the meaning assigned thereto in Section
2.3.3.

      "Notice of Revolving  Credit  Borrowing"  shall have the meaning  assigned
thereto in Section 2.2.1.

       "Obligations"  means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) all payment and
other  obligations  owing by the Credit  Parties to any Lender or Affiliate of a
Lender or the  Administrative  Agent under any Hedging Agreement with any Lender
or Affiliate of a Lender (which Hedging Agreement is permitted  hereunder),  and
(c) all  other  fees  and  commissions  (including  attorney's  fees),  charges,
indebtedness,   loans,  liabilities,   financial  accommodations,   obligations,
covenants  and  duties  owing  by  the  Credit  Parties  to the  Lenders  or the
Administrative Agent, of every kind, nature and description, direct or indirect,
absolute  or  contingent,  due  or  to  become  due,  contractual  or  tortious,
liquidated  or  unliquidated,  and whether or not evidenced by any note, in each
case under or in respect of this  Agreement,  any Note, or any of the other Loan
Documents.

                                       13

      "Offshore  Rate"  means,  for any  Interest  Period,  with  respect  to an
Offshore Rate Loan, the rate of interest per annum  (rounded  upward to the next
1/16th of 1%) determined by the Administrative Agent as follows:

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

The Offshore Rate shall be adjusted  automatically as to all Offshore Rate Loans
then  outstanding  as of the  effective  date of any  change  in the  Eurodollar
Reserve Percentage.

      "Offshore Rate Loan" means a Revolving  Credit Loan bearing  interest at a
rate based upon the Offshore Rate as provided in Section 4.1.1.

      "Operating  Lease"  shall  mean,  as  to  any  Person,  as  determined  in
accordance with GAAP, any lease of property (whether real, personal or mixed) by
such Person as lessee which is not a Capital Lease.

      "Other Taxes" shall have the meaning assigned thereto in Section 4.11.2.

      "PBGC"  means the Pension  Benefit  Guaranty  Corporation  referred to and
defined in ERISA or any successor agency.

      "Pension Plan" means any employee pension benefit plan (within the meaning
of Section 3(2) of ERISA),  other than a Multiemployer Plan, which is subject to
the provisions of Title IV of ERISA or Section 412 of the Code and is maintained
for the employees of the Borrower or any of its ERISA Affiliates.

      "Performance  Letters of Credit" means any trade or documentary  Letter of
Credit issued to secure the performance by any Person of its obligations,  or to
guarantee  or  otherwise  secure any  Person's  obligations  relating  to a bid,
advance  payment  or  security  deposit,  retention  release,  custom  and  duty
deferment guaranty or bond, warranty or performance bond or other guaranty.

      "Person"  means an individual,  corporation,  limited  liability  company,
partnership,  association,  trust,  business trust,  joint venture,  joint stock
company,  pool,  syndicate,  sole proprietorship,  unincorporated  organization,
Governmental Authority or any other form of entity or group thereof.

     "Pittston  Minerals  Group" means Pittston  Minerals  Group,  Inc., and its
Subsidiaries.

      "Prime  Rate"  means,  at  any  time,  the  rate  of  interest  per  annum
established  from time to time by Bank of America as its prime rate in effect at
its principal office in Charlotte, North Carolina. Each change in the Prime Rate
shall be  effective  as of the opening of business on the day such change in the
Prime Rate occurs.  The parties hereto  acknowledge that the rate established by
Bank of  America  as its  Prime  Rate is an index or base  rate  and  shall  not
necessarily be its lowest or best rate charged to its customers or other banks.

      "Prior Bank  Commitment"  means the Borrower's  committed  credit facility
evidenced by the Existing Credit Agreement.

                                       14

      "Real  Property" of any Person means all the right,  title and interest of
such Person in and to land, improvements and fixtures, including leaseholds.

      "Reimbursement  Obligation"  means  the  obligation  of  the  Borrower  to
reimburse  each Issuing  Lender  pursuant to Section 3.5 for amounts drawn under
Letters of Credit issued at the request of the Borrower.

      "Register" has the meaning assigned thereto in Section 13.9.4.

      "Reportable  Event" means an event  described in Section  4043(c) of ERISA
with  respect to a Pension  Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day  notice  period is waived  under  subsection
 .22, .23, .27 or .28 of PBGC Regulation Section 4043.

      "Required  Lenders"  means,  at any date, any combination of Lenders whose
Aggregate Revolving Credit Commitment  Percentage equals more than fifty percent
(50%)  of the  Aggregate  Revolving  Credit  Commitment  or,  if  the  Aggregate
Revolving Credit Commitment has been terminated,  any combination of Lenders who
collectively  hold  more  than  fifty  percent  (50%)  of the  aggregate  unpaid
principal  amount of the Extensions of Credit  (excluding  the aggregate  unpaid
principal  amount of  Competitive  Bid Loans);  provided  that,  for purposes of
declaring  the Loans to be due and  payable  pursuant to Article XI, and for all
purposes  after the Loans  become due and  payable  pursuant  to Article XI, the
outstanding  Competitive  Bid  Loans of the  Lenders  shall be  included  in the
Lenders'  respective  Aggregate  Revolving  Credit  Commitment   Percentages  in
determining the Required Lenders.

      "Responsible  Officer"  means any of the  following:  the chief  executive
officer or chief  financial  officer of the Borrower or any other officer of the
Borrower   proposed  by  the  Borrower   and   reasonably   acceptable   to  the
Administrative Agent.

      "Restricted Subsidiary" means:

      (i)   any   Subsidiary  of  the  Borrower  at the  date of this  Agreement
other than a Subsidiary  designated as an Unrestricted  Subsidiary in Schedule
1.1(b);

      (ii)  any Material Domestic Subsidiary of the Borrower;

      (iii) any Subsidiary of the Borrower that is a Guarantor;

      (iv)  any Subsidiary of the Borrower that  owns, directly  or  indirectly,
any of the capital stock of any Guarantor; and

      (v)   any Person that  becomes a  Subsidiary  of  the  Borrower  after the
date hereof  unless  prior to such  Person  becoming a  Subsidiary  the board of
directors  of  the  Borrower  designates  such  Subsidiary  as  an  Unrestricted
Subsidiary,  in each case  provided  that none of the  shares of any  Restricted
Subsidiary are owned, directly or indirectly, by an Unrestricted Subsidiary.

A Restricted  Subsidiary  (other than any Subsidiary  that is a Guarantor or any
Subsidiary  that owns,  directly or indirectly,  any of the capital stock of any

                                       15

Guarantor)  may be  designated  by the board of  directors of the Borrower as an
Unrestricted  Subsidiary by written notice to the Administrative Agent, but only
if (a)  the  Subsidiary  owns  no  shares  of  the  Borrower  or any  Restricted
Subsidiary and (b) immediately after such designation, the Leverage Ratio is not
greater  than 0.55 to 1.00 and the Interest  Coverage  Ratio is at least 3.00 to
1.00. An Unrestricted  Subsidiary may be designated by the board of directors of
the Borrower as a Restricted  Subsidiary by written notice to the Administrative
Agent, but only if immediately  after such designation (x) the Borrower shall be
in  compliance  with Section 9.2 and (y) the Leverage  Ratio is not greater than
0.55 to 1.00 and the Interest Coverage Ratio is at least 3.00 to 1.00.

      "Revolving Credit Loan" means any loan (other than a Competitive Bid Loan)
made to the  Borrower  pursuant to Section 2.2 under the 364 Day Facility or the
Three Year Facility, and all such loans collectively as the context requires.

      "Revolving  Credit Notes" means the collective  reference to the Revolving
Credit  Notes made by the  Borrower  payable to the order of each  Lender with a
Three Year Facility Commitment or a 364 Day Facility  Commitment,  substantially
in the form of Exhibit A hereto,  and any amendments and modifications  thereto,
any  substitutes  therefor,  and any  replacements,  restatements,  renewals  or
extensions  thereof,  in whole or in part;  "Revolving Credit Note" means any of
such Revolving Credit Notes.

      "Sale  and  Leaseback  Transaction"  means the sale by the  Borrower  or a
Restricted  Subsidiary  to any  Person  (other  than any  Credit  Party)  of any
property  or  asset  and,  as  part  of  the  same   transaction  or  series  of
transactions, the leasing as lessee by the Borrower or any Restricted Subsidiary
of the  same  or  another  property  or  asset  which  it  intends  to  use  for
substantially the same purpose.

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

      "Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation,  limited liability company,  partnership,  association or other
entity the accounts of which would be  consolidated  with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared  in  accordance  with  GAAP as of  such  date,  as  well  as any  other
corporation, limited liability company, partnership, association or other entity
(a) of which  securities or other  ownership  interests  representing  more than
fifty  percent  (50%) of the  equity or more  than  fifty  percent  (50%) of the
ordinary voting power or, in the case of a partnership,  more than fifty percent
(50%)  of the  general  partnership  interests  are,  as of  such  date,  owned,
controlled or held, or (b) that is, as of such date,  otherwise  controlled,  by
the parent or one or more subsidiaries of the parent or by the parent and one or
more  subsidiaries  of the parent.  Unless  otherwise  qualified,  references to
"Subsidiary" or "Subsidiaries" herein shall refer to those of the Borrower.

      "Support  Obligation"  means,  with  respect  to any  Person,  at any date
without duplication, any Debt of another Person that is guaranteed,  directly or
indirectly  in any  manner,  by such  Person  or  endorsed  (otherwise  than for
collection  or deposit in the ordinary  course of business) or  discounted  with
recourse by such Person or any Debt of another Person that has the substantially

                                       16

equivalent or similar  economic effect of being  guaranteed by such Person or of
otherwise making such Person contingently liable therefor,  through an agreement
or otherwise, including, without limitation, an agreement (i) to purchase, or to
advance or supply  funds for the payment or purchase  of, such Debt,  or (ii) to
make any loan, advance,  capital  contribution or other investment in such other
Person to assure a minimum equity,  asset base, working capital or other balance
sheet  condition  for any  date,  or to  provide  funds for the  payment  of any
liability,  dividend or stock liquidation  payment, or otherwise to supply funds
to or in any manner  invest in such other  Person  (unless  such  investment  is
expected to constitute a permitted investment under Section 9.10).

      "Taxes" shall have the meaning assigned thereto in Section 4.11.1.

      "Termination  Date"  means the 364 Day  Facility  Termination  Date or the
Three Year Facility Termination Date, as the context requires.

      "Termination  Event" means any of the following  that result in a Material
Adverse Effect:  (a) a "Reportable Event" described in Section 4043 of ERISA, or
(b) the  withdrawal of the Borrower or any ERISA  Affiliate  from a Pension Plan
during a plan  year in which  it was a  "substantial  employer"  as  defined  in
Section  4001(a)(2) of ERISA,  or (c) the  termination  of a Pension  Plan,  the
filing of a notice of intent to terminate a Pension  Plan or the  treatment of a
Pension Plan amendment as a termination  under Section 4041 of ERISA, or (d) the
institution of proceedings to terminate, or to seek the appointment of a trustee
with  respect  to,  any  Pension  Plan by the PBGC,  or (e) any  other  event or
condition which would constitute  grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan,
or (f) the partial or complete withdrawal of the Borrower or any ERISA Affiliate
from a  Multiemployer  Plan, or (g) the imposition of a Lien pursuant to Section
412 of the Code or Section  302 of ERISA,  or (h) any event or  condition  which
results  in the  reorganization  or  insolvency  of a  Multiemployer  Plan under
Sections 4241 or 4245 of ERISA,  or (i) any event or condition  which results in
the  termination  of a  Multiemployer  Plan under  Section 4041A of ERISA or the
institution  by PBGC of  proceedings  to  terminate a  Multiemployer  Plan under
Section 4042 of ERISA.

      "Three Year  Facility"  means the  multi-year  revolving  credit  facility
established pursuant to Section 2.1 hereof.

      "Three  Year  Facility  Commitment"  means  (a)  as  to  any  Lender,  the
obligation  of such Lender to make  Revolving  Credit Loans under the Three Year
Facility for the account of the Borrower in an aggregate principal amount at any
time  outstanding not to exceed the amount set forth opposite such Lender's name
on Schedule  1.1(a) hereto as such amount may be reduced or modified at any time
or from time to time pursuant to the terms hereof and (b) as to all Lenders, the
aggregate Three Year Facility Commitment of all Lenders to make Revolving Credit
Loans under the Three Year  Facility,  as such amount may be reduced or modified
at any time or from time to time  pursuant to the terms  hereof.  The Three Year
Facility  Commitment  of all  Lenders on the  Closing  Date shall be One Hundred
Eighty Five Million and No/100s Dollars ($185,000,000).

                                       17

      "Three Year Facility Commitment Percentage" means, as to any Lender at any
time, the ratio of (a) the amount of the Three Year Facility  Commitment of such
Lender  to (b)  the  aggregate  Three  Year  Facility  Commitment  of all of the
Lenders.

      "Three  Year  Facility  Fee" shall have the  meaning  assigned  thereto in
Section 4.3.2.

      "Three Year Facility Specified Maturity Date" means October 3, 2003.

      "Three Year  Facility  Termination  Date" means the  earliest of the dates
referred to in Section 2.8.2.

      "UCC" means, with respect to any Letter of Credit,  the Uniform Commercial
Code as in  effect  in the  State in which  the  corporate  headquarters  of the
relevant  Issuing Lender is located or such other  jurisdiction as is acceptable
to the relevant Issuing Lender, as amended,  restated or otherwise modified from
time to time.

      "Unfunded Current Liability" of any Pension Plan means the amount, if any,
by which the actuarial  present value of the accumulated plan benefits under the
Pension Plan as of the close of its most recent year,  determined  in accordance
with actuarial  assumptions at such time  consistent with Statement of Financial
Accounting  Standards  No 87,  exceeds  the sum of (a) the  market  value of the
assets allocable thereto and (b) $5,000,000.

      "Uniform   Customs"   means   the  Uniform   Customs   and   Practice  for
Documentary   Credits  (1993  Revision),   International   Chamber  of  Commerce
Publication No. 500.

      "United States" and "U.S." means the United States of America.

      "Unrestricted  Subsidiary"  means any  Subsidiary  other than a Restricted
Subsidiary.

      "Utilization"  means,  for any day, (a) the aggregate  principal amount of
all outstanding Loans divided by (b) the Aggregate  Revolving Credit Commitment,
the result being expressed as a percentage.

      "Utilization  Fee"  means,  for any day,  a per  annum  rate  equal to the
Applicable Percentage for the Utilization on such day.

      Section 1.2  General.

            Unless  otherwise  specified,  a reference  in this  Agreement  to a
particular  section,  subsection,  Schedule  or Exhibit is a  reference  to that
section,  subsection,  Schedule or Exhibit of this Agreement.  Wherever from the
context it appears  appropriate,  each term  stated in either  the  singular  or
plural  shall  include the  singular  and  plural,  and  pronouns  stated in the
masculine,  feminine or neuter gender shall include the masculine,  feminine and
neuter. Any reference herein to "Charlotte time" or "London time" shall refer to
the applicable time of day in Charlotte,  North Carolina or London,  England, as
applicable.

                                       18

      Section 1.3  Other Definitions and Provisions.

             1.3.1 Use of Capitalized  Terms.  Unless otherwise defined therein,
all capitalized  terms defined in this Agreement shall have the defined meanings
provided  herein  when used in this  Agreement,  the  Notes  and the other  Loan
Documents  or any  certificate,  report  or  other  document  made or  delivered
pursuant to this Agreement.

             1.3.2 Miscellaneous. The words  "hereof,"  "herein" and "hereunder"
and words of similar  import  when used in this  Agreement  shall  refer to this
Agreement as a whole and not to any particular provision of this Agreement.

      Section 1.4  Accounting Terms.

            Except as otherwise  expressly provided herein, all accounting terms
used herein shall be interpreted,  and all financial statements and certificates
and  reports  as  to  financial   matters   required  to  be  delivered  to  the
Administrative  Agent or the Lenders hereunder shall be prepared,  in accordance
with GAAP applied on a consistent  basis. All calculations made for the purposes
of  determining  compliance  with this  Agreement  shall  (except  as  otherwise
expressly  provided  herein) be made by  application  of GAAP applied on a basis
consistent  with  the most  recent  annual  or  quarterly  financial  statements
delivered  pursuant  to  Section  7.1 (or,  prior to the  delivery  of the first
financial statements pursuant to Section 7.1, consistent with the annual audited
financial statements referenced in Section 6.1.7); provided, however, if (a) the
Borrower shall object to determining  such  compliance on such basis at the time
of delivery of such financial  statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Administrative Agent or the Required
Lenders  shall so  object  in  writing  within 60 days  after  delivery  of such
financial statements, then such calculations shall be made on a basis consistent
with the most  recent  financial  statements  delivered  by the  Borrower to the
Administrative  Agent or the  Lenders as to which no such  objection  shall have
been made.

                                   ARTICLE II

                                CREDIT FACILITIES

      Section 2.1 Amount and Terms of Credit.

            2.1.1  Description of Facilities.  Upon the terms and subject to the
conditions  set forth in this  Agreement:  (i) the Lenders  hereby  grant to the
Borrower a short term revolving  credit  facility (the "364 Day Facility") and a
multi-year  revolving  credit facility (the " Three Year Facility")  pursuant to
which  each  Lender  severally  agrees  to make  Revolving  Credit  Loans to the
Borrower in Dollars in accordance  with Section 2.2 and (ii) the parties  hereto
agree  that  each  Lender  may,  in its  sole  discretion,  make  bids  to  make
Competitive Bid Loans to the Borrower in Dollars in accordance with Section 2.5;
provided that (A) the aggregate  principal  amount of all outstanding  Revolving
Credit Loans (after  giving effect to any amount  requested)  made under the 364
Day Facility shall not exceed the 364 Day Facility Commitment less the aggregate
principal amount of all outstanding Competitive Bid Loans made under the 364 Day
Facility;  and the aggregate  principal  amount of outstanding  Revolving Credit

                                       19

Loans made under the 364 Day Facility by any Lender shall not at any time exceed
such  Lender's  364 Day Facility  Commitment;  and (B) the  aggregate  principal
amount of all  outstanding  Revolving  Credit Loans (after  giving effect to any
amount  requested) made under the Three Year Facility shall not exceed the Three
Year Facility  Commitment  less the sum of (x) all  outstanding  L/C Obligations
plus (y) the aggregate principal amount of all outstanding Competitive Bid Loans
made  under the Three  Year  Facility;  and the  aggregate  principal  amount of
outstanding  Revolving  Credit  Loans made under the Three Year  Facility by any
Lender  shall  not  at  any  time  exceed  such  Lender's  Three  Year  Facility
Commitment.  Each  Revolving  Credit  Loan  made by a Lender  under  the 364 Day
Facility or the Three Year Facility shall be in a principal amount equal to such
Lender's  Commitment  Percentage of the aggregate  principal amount of Revolving
Credit  Loans  requested  under such  facility  on such  occasion.  Each  Lender
severally agrees,  and by making any advance hereunder shall be deemed severally
to represent,  that none of the funds made available by such Lender with respect
to any  Revolving  Credit  Loan or any  Competitive  Bid Loan  constitute  "plan
assets" within the meaning of 29 C.F.R. Section 2510.3-101.

            2.1.2  Application of Facilities.  The Credit  Facility  established
hereby  shall be used by the Borrower and its  Restricted  Subsidiaries  for any
lawful purpose, including, without being limited to:

                  (a)   refinance   existing   Debt  of  the  Borrower  and  its
      Subsidiaries,  including  without  limitation,  Debt outstanding under the
      Prior Bank Commitment; and

                  (b)  finance  the  working  capital,   capital   expenditures,
      acquisitions permitted under this Agreement and general corporate purposes
      of the Borrower and its Subsidiaries;  provided,  however, that no portion
      of the  proceeds  of any Loan  shall be used to fund any such  acquisition
      unless at such time the board of  directors of the subject  company  shall
      have  either  (i)  approved  such   acquisition   or   recommended  it  to
      shareholders  or (ii) taken a position that it will neither  recommend for
      or against such acquisition;

and, accordingly,  the Borrower shall apply all amounts borrowed by it hereunder
in or towards satisfaction of such purposes and neither the Administrative Agent
nor any Lender shall be obligated to see to the application thereof.

      Section 2.2 Procedure for Advances of Revolving Credit Loans.

            2.2.1 Requests for Revolving  Credit Loans.  The Borrower shall give
the  Administrative  Agent irrevocable prior written notice in the form attached
hereto as Exhibit B (a "Notice of Revolving  Credit  Borrowing")  not later than
(i) 11:00 a.m.  (Charlotte time) on the same Business Day as each Base Rate Loan
and (ii) 12:00 noon  (Charlotte  time) at least three (3)  Business  Days before
each Offshore Rate Loan, of its intention to borrow,  specifying (A) the date of
such borrowing, which shall be a Business Day, (B) whether such Revolving Credit
Loan is to be made under the 364 Day  Facility or the Three Year  Facility,  (C)
the amount of such  borrowing,  which shall be in an amount  equal to the unused
amount of the 364 Day Facility Commitment or the Three Year Facility Commitment,
as applicable,  or if less, (x) with respect to Base Rate Loans, in an aggregate
principal  amount of  $1,000,000  or a whole  multiple of  $1,000,000  in excess
thereof,  and (y) with respect to Offshore Rate Loans, in an aggregate principal

                                       20

amount of $5,000,000 or a whole  multiple of $1,000,000 in excess  thereof,  (D)
whether such  Revolving  Credit Loan is to be an Offshore Rate Loan or Base Rate
Loan,  (E) in the case of an Offshore  Rate Loan,  the  duration of the Interest
Period  applicable  thereto  and  (F)  the  aggregate  principal  amount  of all
Competitive Bid Loans to the Borrower outstanding under the 364 Day Facility and
the Three Year Facility.  Notices received after 11:00 a.m.  (Charlotte time) or
12:00 noon (Charlotte time), as applicable, shall be deemed received on the next
Business Day. The Administrative Agent shall promptly notify the Lenders of each
Notice of Revolving Credit Borrowing.

            2.2.2  Disbursement of Revolving Credit Loans. Each Lender will make
available to the Administrative  Agent, for the account of the Borrower,  at the
Administrative   Agent's   Office  in  funds   immediately   available   to  the
Administrative  Agent,  such  Lender's  Commitment  Percentage  of the Revolving
Credit  Loans  to be  made on  such  borrowing  date no  later  than  2:00  p.m.
(Charlotte time) on the proposed borrowing date. The Borrower hereby irrevocably
authorizes the  Administrative  Agent to disburse the proceeds of each borrowing
requested by the Borrower pursuant to this Section 2.2 in immediately  available
funds by  crediting  or wiring  such  proceeds  to the  deposit  account  of the
Borrower   identified  in  the  most  recent  notice  of  account   designation,
substantially   in  the  form  of   Exhibit  C  hereto  (a  "Notice  of  Account
Designation"),  delivered by the Borrower to the Administrative  Agent or as may
be otherwise agreed upon by the Borrower and the Administrative  Agent from time
to time. Subject to Section 4.7 hereof,  the  Administrative  Agent shall not be
obligated to disburse the portion of the proceeds of any  Revolving  Credit Loan
requested  pursuant to this Section 2.2 for which any Lender is  responsible  to
the extent that such Lender has not made available to the  Administrative  Agent
its Commitment Percentage of such Revolving Credit Loan.

      Section 2.3 Repayment of Loans.

            2.3.1  Repayment on Termination  Date.  Subject to the provisions of
Section 2.8.3, the Borrower agrees to repay the outstanding  principal amount of
all Loans made to it under, and its Reimbursement Obligations under, the 364 Day
Facility in full on the 364 Day Facility  Termination Date, with all accrued but
unpaid interest thereon. The Borrower agrees to repay the outstanding  principal
amount of all Loans made to it under, and its  Reimbursement  Obligation  under,
the Three Year  Facility in full on the Three Year  Facility  Termination  Date,
with all accrued but unpaid interest thereon.

            2.3.2  Mandatory  Repayment of Loans.  If at any time (A) the sum of
the  outstanding  principal  amount of all Loans made under the 364 Day Facility
exceeds  the 364 Day  Facility  Commitment  of all Lenders or (B) the sum of the
outstanding principal amount of all Loans made under the Three Year Facility and
all outstanding L/C  Obligations  exceeds the Three Year Facility  Commitment of
all  Lenders,  the  Borrower  agrees to repay  immediately  upon notice from the
Administrative  Agent, by payment to the Administrative Agent for the account of
the Lenders,  Revolving  Credit Loans,  L/C Obligations or Competitive Bid Loans
and/or furnish cash collateral  reasonably  satisfactory  to the  Administrative
Agent, in an amount equal to such excess.  Such cash collateral shall be applied
in  accordance  with Section  11.2.2.  Any repayment of such Offshore Rate Loans
other than on the last day of the Interest  Period  applicable  thereto shall be
accompanied by any amount required to be paid pursuant to Section 4.9 hereof.

                                       21

            2.3.3  Optional  Repayments.  The  Borrower may at any time and from
time to time repay the  Revolving  Credit Loans made to it, in whole or in part,
upon at least three (3) Business Days irrevocable  notice to the  Administrative
Agent  with  respect  to  Offshore  Rate  Loans  and upon one (1)  Business  Day
irrevocable  notice with respect to Base Rate Loans, in the form attached hereto
as  Exhibit D (a  "Notice  of  Prepayment")  specifying  the date and  amount of
repayment;  and whether  such loans were made under the 364 Day  Facility or the
Three Year Facility, or a combination thereof, and, if a combination, the amount
allocable to each;  and whether the  repayment is of Offshore  Rate Loans,  Base
Rate Loans,  or a  combination  thereof,  and, if of a  combination,  the amount
allocable to each. Upon receipt of such notice, the  Administrative  Agent shall
promptly notify each Lender.  If any such notice is given,  the amount specified
in such notice  shall be due and  payable on the date set forth in such  notice.
Partial  repayments  shall be in an aggregate  amount of  $1,000,000  or a whole
multiple of  $1,000,000 in excess  thereof with respect to Base Rate Loans,  and
$5,000,000 or a whole  multiple of $1,000,000 in excess  thereof with respect to
Offshore Rate Loans.

            2.3.4  Limitation on Repayment of Offshore Rate Loans.  The Borrower
may not repay any  Offshore  Rate Loan on any day other  than on the last day of
the Interest Period  applicable  thereto unless such repayment is accompanied by
any amount required to be paid pursuant to Section 4.9 hereof.

            2.3.5 Limitation on Repayment of Competitive Bid Loans. The Borrower
may not repay any  Competitive Bid Loan on any day other than on the last day of
the Interest Period applicable  thereto except,  and on such terms, as agreed to
by the Borrower and the Lender which made such Competitive Bid Loan.

      Section 2.4 Revolving Credit Notes.

            Each  Lender's  Revolving  Credit  Loans and the  obligation  of the
Borrower to repay such  Revolving  Credit  Loans shall be  evidenced by separate
Revolving  Credit Notes  executed by the  Borrower  payable to the order of such
Lender. Each Revolving Credit Note shall be dated the date hereof and shall bear
interest on the unpaid principal amount thereof at the applicable  interest rate
per annum specified in Section 4.1.

      Section 2.5 Competitive Bid Loans and Procedure.

            (a) Subject to the terms and conditions set forth herein,  from time
to time until the expiration or termination  of the Aggregate  Revolving  Credit
Commitment,  each  Lender  may (but  shall not have any  obligation  to)  submit
Competitive Bids under the 364 Day Facility or the Three Year Facility,  and the
Borrower may (but shall not have any obligation to) accept  Competitive Bids and
borrow  Competitive Bid Loans,  which shall be denominated in Dollars;  provided
that (i) the sum of the  aggregate  principal  amount of  outstanding  Revolving
Credit Loans made under the 364 Day Facility plus the aggregate principal amount
of  outstanding  Competitive  Bid Loans  made  thereunder  shall not at any time
exceed  the  364 Day  Facility  Commitment  and  (ii)  the sum of the  aggregate
principal amount of outstanding Revolving Credit Loans made under the Three Year
Facility plus the aggregate  principal  amount of  outstanding  Competitive  Bid
Loans made  thereunder  shall not at any time  exceed  the Three  Year  Facility
Commitment less the sum of all outstanding L/C Obligations.

                                       22

            (b)  Each   Competitive  Bid  shall  be  submitted  by  telecopy  or
electronic mail to the Borrower or by telephone  (promptly  confirmed in writing
to the Borrower) not later than 10:30 a.m. (Charlotte time) on the proposed date
of such borrowing and,  unless timely  accepted,  shall  automatically  lapse at
11:30 a.m. (Charlotte time) on such date. A Competitive Bid may be for an amount
greater than (or less than) such Lender's Commitment. Each Competitive Bid shall
be  irrevocable  and shall  specify (i) the  principal  amount (which shall be a
minimum of $1,000,000 and an integral multiple of $100,000 in excess thereof) of
the Competitive Bid Loan or Loans that the applicable Lender is willing to make,
(ii) the  Competitive Bid Rate or Rates at which such Lender is prepared to make
such Loan or Loans  (expressed  as a percentage  rate per annum in the form of a
decimal  to no more than four  decimal  places)  and (iii) the  Interest  Period
applicable  to each such Loan and the last day thereof.  The Borrower may accept
or reject any  Competitive  Bid;  provided that the Borrower  shall not accept a
Competitive  Bid  made at a  particular  Competitive  Bid  Rate if the  Borrower
rejects a Competitive Bid made at a lower Competitive Bid Rate.

            (c) The provisions of the preceding  paragraph  notwithstanding,  if
Competitive  Bids were made by  Lenders  on a  Business  Day with  respect  to a
particular  Interest Period and such bids lapsed at 11:30 a.m.  (Charlotte time)
on such Business Day pursuant to the preceding  paragraph,  the Borrower may, in
its  sole  and  absolute  discretion,  subject  only to the  provisions  of this
paragraph, contact one or more of such Lenders, by telephone, telecopy or email,
prior to 3:00 p.m.  (Charlotte  time) on such  Business Day to request that such
Lenders  reinstate such Competitive Bids for such Interest Period or provide new
Competitive Bids for such Interest Period on such Business Day. Each Competitive
Bid so  reinstated  shall be  submitted  by telecopy or  electronic  mail to the
Borrower or by telephone  (promptly confirmed in writing to the Borrower) on the
proposed date of such borrowing. Notwithstanding anything to the contrary in any
Competitive  Bid  reinstated or submitted  pursuant to this  paragraph each such
Competitive  Bid shall be  irrevocable  in respect of the date on which it is to
reinstated  or submitted  and shall  automatically  expire at the earlier of (a)
3:00 p.m.  (Charlotte  time) on the date  submitted  and (b) one hour after such
Competitive Bid is received by the Borrower.

            (d) The Borrower may, in its sole and absolute  discretion,  subject
only to the provisions of this paragraph  accept any  Competitive  Bid submitted
under this Section by notifying the Lender  submitting  such  Competitive Bid by
telephone,  telecopy  or email not later than the  expiration  time of such bid,
which  acceptance  notice  shall be further  confirmed to such Lender and to the
Administrative Agent in writing by telecopy or email not later than the close of
business  on the date of  acceptance,  indicating  the  Interest  Period and the
agreed  interest rate on and principal  amount of the Competitive Bid Loan to be
made by such  Lender  on such  Business  Day.  A notice  given  by the  Borrower
pursuant to this paragraph shall be irrevocable.

            (e) Not  later  than  5:00  p.m.  (Charlotte  time) on the  proposed
borrowing  date,  each  Lender  whose  Competitive  Bid has been  accepted  will
disburse its Competitive Bid Loan in immediately available funds by crediting or
wiring such  proceeds to the deposit  account of the Borrower  identified in its
most  recent  Notice of Account  Designation.  Each such  Lender  shall  furnish
account  wiring  instructions  to the Borrower for the payment of principal  and
interest.

                                       23

            (f)  At the  written  request  of any  Lender,  the  Borrower  shall
disclose to the Administrative  Agent the Competitive Bids received and accepted
by the Borrower on any date  specified in such request,  provided that such date
is not more than 30 days prior to the date on which such  request is received by
the Borrower.

            (g) While any  Competitive  Bid Loan made under the 364 Day Facility
is outstanding,  the 364 Day Facility  Commitment of each Lender shall be deemed
used for all  purposes  by an amount  equal to its pro rata share  (based on its
respective 364 Day Facility  Commitment  Percentage) of the principal  amount of
such Competitive Bid Loan.

            (h)  While any  Competitive  Bid Loan  made  under  the  Three  Year
Facility is outstanding, the Three Year Facility Commitment of each Lender shall
be deemed used for all  purposes by an amount equal to its pro rata share (based
on its respective  Three Year Facility  Commitment  Percentage) of the principal
amount of such Competitive Bid Loan.

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

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

                (iii) The  Competitive  Bid  Loans made  by each Lender shall be
      evidenced by such Lender's respective Revolving Credit Notes.

            (j) Unless  such  Competitive  Bid Loan is  renewed at the  Lender's
option upon request of the Borrower,  the Borrower  shall repay the  outstanding
principal amount of each Competitive Bid Loan made to it in full on the last day
of the Interest Period applicable thereto,  with all accrued but unpaid interest
thereon.  Competitive  Bid Loans may not be repaid  prior to the last day of the
applicable Interest Period except in accordance with Sections 2.3.2 and 2.3.5.

      Section 2.6 Intentionally Omitted.

      Section 2.7 Commitment Reductions and Increases.

            2.7.1 Voluntary Reduction.  The Borrower shall have the right at any
time and from time to time, upon at least three (3) Business Days' prior written
notice to the  Administrative  Agent, to permanently  reduce (except as provided
below),  without  premium  or  penalty,  (i) (A)  the  entire  364 Day  Facility

                                       24

Commitment at any time or (B) portions of the 364 Day Facility  Commitment  from
time to time in an aggregate  principal  amount not less than  $5,000,000 or any
whole multiple of $1,000,000 in excess thereof or (ii) (A) the entire Three Year
Facility  Commitment  at any time or (B)  portions  of the Three  Year  Facility
Commitment  from time to time,  in an aggregate  principal  amount not less than
$5,000,000 or any whole multiple of $1,000,000 in excess thereof.

            2.7.2 Payments Related to a Voluntary Reduction.

                  (a)  Each   permanent   reduction  of  the  364  Day  Facility
      Commitment  made  pursuant to this  Section 2.7 shall be  accompanied,  if
      necessary,  by a payment of principal  sufficient  to reduce the aggregate
      outstanding  Revolving Credit Loans made under the 364 Day Facility to the
      amount of the new 364 Day Facility  Commitment after such reduction to the
      364 Day  Facility  Commitment.  Any  reduction  of the  364  Day  Facility
      Commitment to zero (including upon  termination of the 364 Day Facility on
      the 364 Day Facility  Termination Date) shall be accompanied by payment of
      all outstanding Revolving Credit Loans made under the 364 Day Facility and
      shall result in the termination of the 364 Day Facility Commitment and the
      364 Day  Facility.  If any  reduction of the 364 Day  Facility  Commitment
      requires the repayment of any Offshore Rate Loan,  such repayment shall be
      accompanied  by any amount  required  to be paid  pursuant  to Section 4.9
      hereof.  Notwithstanding  anything  herein  to the  contrary,  the 364 Day
      Facility  Commitment may not be permanently reduced by an amount such that
      the 364 Day Facility  Commitment  (after giving effect  thereto)  would be
      less than the  aggregate  amount of all unpaid  principal  of and interest
      (for the applicable Interest Periods) on outstanding Competitive Bid Loans
      made under the 364 Day Facility.

                  (b)  Each  permanent  reduction  of the  Three  Year  Facility
      Commitment  made  pursuant to this  Section 2.7 shall be  accompanied,  if
      necessary,  by a  payment  of  principal  sufficient  to  reduce  (or cash
      collateralize) the aggregate outstanding Revolving Credit Loans made under
      the Three Year Facility and L/C Obligations,  as applicable, to the amount
      of the new Three Year  Facility  Commitment  after such  reduction  to the
      Three Year Facility  Commitment and, if the Three Year Facility Commitment
      as so reduced is less than the aggregate amount of all outstanding Letters
      of Credit,  the Borrower shall be required to deposit in a cash collateral
      account opened by the  Administrative  Agent an amount equal to the amount
      by which the aggregate  then undrawn and unexpired  amount of such Letters
      of Credit exceeds the Three Year Facility  Commitment as so reduced.  Such
      cash collateral  shall be applied in accordance  with Section 11.2.2.  Any
      reduction of the Three Year Facility  Commitment to zero  (including  upon
      termination  of the  Three  Year  Facility  on  the  Three  Year  Facility
      Termination  Date)  shall be  accompanied  by payment  of all  outstanding
      Revolving  Credit Loans made under the Three Year Facility (and furnishing
      of cash collateral  satisfactory to the  Administrative  Agent for all L/C
      Obligations)  and  shall  result  in the  termination  of the  Three  Year
      Facility  Commitment and the Three Year Facility.  If any reduction of the
      Three Year Facility Commitment requires the repayment of any Offshore Rate
      Loan,  such repayment  shall be  accompanied by any amount  required to be
      paid pursuant to Section 4.9 hereof.  Notwithstanding  anything  herein to
      the contrary,  the Three Year Facility  Commitment  may not be permanently
      reduced by an amount such that the Three Year Facility  Commitment  (after

                                       25

      giving  effect  thereto)  would be less than the  aggregate  amount of all
      unpaid principal of and interest (for the applicable  Interest Periods) on
      outstanding Competitive Bid Loans made under the Three Year Facility.

     2.7.3  Commitment  Increases.  Subject to the terms and  conditions set set
forth herein, upon 30 days' advance written notice to the Administrative  Agent,
the  Borrower  shall have the right,  at any time and from time to time from the
Closing Date until the termination of the Aggregate  Revolving Credit Commitment
(but no more than  once in any  twelve-month  period)  to  increase  the 364 Day
Facility  Commitment  and the Three Year  Facility  Commitment  by an  aggregate
amount  of up to  $100,000,000;  provided  that (i) any such  increase  shall be
allocated  pro rata between the Three Year Facility  Commitment  and the 364 Day
Facility  Commitment and (ii) any such increase shall be in a minimum  principal
amount of $15,000,000 and an integral  multiple of $5,000,000 in excess thereof.
An  increase  in the 364 Day  Facility  Commitment  and the Three Year  Facility
Commitment hereunder shall be subject to satisfaction of the following:  (A) the
amount of such increase shall be offered first to the existing Lenders, (B) each
existing Lender shall have the right,  but not the obligation,  to commit to all
or a portion of such proposed  increase to the 364 Day Facility  Commitment  and
the  Three  Year  Facility  Commitment  on a pro rata  basis  (based on its then
existing  Commitments),  (C) in  the  event  the  additional  commitments  which
existing  Lenders are willing to take shall  exceed the amount  requested by the
Borrower,  then the additional  commitments  shall be allocated in proportion to
the commitments of existing  Lenders willing to take additional  commitments and
(D) if the amount of the additional  commitments requested by the Borrower shall
exceed the  additional  commitments  which the  existing  Lenders are willing to
take,  then the  Borrower  may  invite  commercial  banks  and  other  financial
institutions  reasonably  acceptable  to the  Administrative  Agent to join this
Agreement as Lenders hereunder for the portion of the additional commitments not
taken by existing Lenders, provided that such institutions shall enter into such
joinder agreements to give effect thereto as the Administrative Agent and/or the
Borrower may  reasonably  request.  In connection  with any increase in, or new,
Commitments pursuant to this Section, Schedule 1.1(a) hereto shall be revised to
reflect the modified  commitment  percentages and commitments of the Lenders and
any new Lenders.

      Section 2.8 Termination; Extension Options.

            2.8.1  Termination  of 364 Day Facility.  The 364 Day Facility shall
terminate on the earliest of (a) the 364 Day Facility  Specified  Maturity Date,
(b) the date of termination  of the 364 Day Facility  Commitment by the Borrower
pursuant  to  Section  2.7.1,  and (c) the  date of  termination  of the 364 Day
Facility  by the  Administrative  Agent on behalf  of the  Lenders  pursuant  to
Section 11.2.1.

            2.8.2  Termination of Three Year  Facility.  The Three Year Facility
shall  terminate  on the  earliest  of (a) the  Three  Year  Facility  Specified
Maturity Date, (b) the date of termination of the Three Year Facility Commitment
by the Borrower  pursuant to Section  2.7.1,  and (c) the date of termination of
the Three Year  Facility  by the  Administrative  Agent on behalf of the Lenders
pursuant to Section 11.2.1.

            2.8.3 364 Day Facility  Extension Option.  Not earlier than the date
sixty (60) days prior to, nor later than  thirty (30) days prior to, the 364 Day
Facility Specified Maturity Date then in effect, the Borrower may deliver to the

                                       26

Administrative  Agent  (which shall  promptly  transmit to each Lender) a notice
requesting that the 364 Day Facility  Specified Maturity Date be extended for an
additional  364 day period.  Within  fifteen  (15) days after its receipt of any
such  notice,  each  Lender  shall  notify  the  Administrative   Agent  of  its
willingness or  unwillingness  to so extend its 364 Day  Commitment.  Any Lender
that shall fail to so notify the  Administrative  Agent within such period shall
be deemed to have declined to extend its 364 Day Facility Commitment. If Lenders
holding a majority  (I.E.,  greater than 50%) in amount of the aggregate 364 Day
Facility  Commitment (as of the date such 15-day notice period expires) agree to
extend their 364 Day Facility  Commitments,  the  Administrative  Agent shall so
notify the  Borrower  and each  Lender  which  shall have so  consented  to such
request,  whereupon  (i) the  respective  364 Day Facility  Commitments  of such
consenting  Lenders shall without  further act be extended for an additional 364
day  period,  (ii) the term "364 Day  Facility  Specified  Maturity  Date" shall
thenceforth  mean, as to the Loans of such consenting  Lenders under the 364 Day
Facility,  the last day of such  additional 364 day period and (iii) the 364 Day
Facility Commitments of the non-extending Lenders shall terminate on the 364 Day
Facility Specified Maturity Date in effect prior to such extension and the Loans
and other  amounts  owed to such  Lenders  shall  become due and payable on such
date. If Lenders  holding a majority  (I.E.,  greater than 50%) in amount of the
aggregate 364 Day Facility  Commitment (as of the date such 15-day notice period
expires)  shall not have agreed to extend  their 364 Day  Facility  Commitments,
then none of the 364 Day Facility  Commitments shall be extended and the 364 Day
Facility Specified Maturity Date shall remain unchanged.

                                   ARTICLE III

                          LETTER OF CREDIT FACILITY

      Section 3.1 L/C Commitment.

            Subject to the terms and conditions hereof,  each Issuing Lender, in
reliance on the  agreements  of the other  Lenders  set forth in Section  3.4.1,
agrees to issue  letters of credit  ("Letters of Credit") for the account of the
Borrower on any  Business  Day from the Closing  Date to but not  including  the
Three Year  Facility  Termination  Date in such form as may be  requested by the
Borrower and approved from time to time by such Issuing Lender;  provided,  that
no Issuing  Lender shall have any  obligation  to issue any Letter of Credit if,
after giving effect to such issuance,  (a) the L/C Obligations  would exceed the
L/C  Commitment  or (b)  the  sum of  (i)  the  aggregate  principal  amount  of
outstanding Revolving Credit Loans made under the Three Year Facility,  (ii) the
aggregate  principal amount of L/C Obligations and (iii) the aggregate principal
amount of Competitive Bid Loans made under the Three Year Facility, would exceed
the  Three  Year  Facility  Commitment.  Each  Letter  of  Credit  shall  (A) be
denominated in Dollars,  (B) be a letter of credit issued to support obligations
of the Borrower or any of its Restricted Subsidiaries,  contingent or otherwise,
(C) expire on a date not later than one year after the date of issuance  thereof
and not later  than the  Three  Year  Facility  Specified  Maturity,  and (D) be
subject to the Uniform  Customs and, to the extent not  inconsistent  therewith,
the laws of the  State in  which  the  corporate  headquarters  of the  relevant
Issuing  Lender is located or such other  jurisdiction  as is  acceptable to the
relevant  Issuing  Lender.  No Issuing  Lender shall at any time be obligated to
issue any Letter of Credit  hereunder if such issuance  would  conflict with, or
cause such Issuing  Lender or any L/C  Participant  to exceed any limits imposed

                                       27

by, any Applicable Law.  References  herein to "issue" and  derivations  thereof
with respect to Letters of Credit shall also include extensions or modifications
of any existing Letters of Credit, unless the context otherwise requires.

      Section 3.2 Procedure for Issuance of Letters of Credit.

            The Borrower  may from time to time request that any Issuing  Lender
issue a Letter of Credit (or  amend,  extend or renew an  outstanding  Letter of
Credit) by delivering to such Issuing Lender at any address mutually  acceptable
to the Borrower and such Issuing Lender an L/C Application  therefor,  completed
to the  satisfaction  of such  Issuing  Lender,  and  such  other  certificates,
documents and other papers and information as such Issuing Lender may reasonably
request. The L/C Application will contain a representation and warranty that the
conditions  specified  in Section  5.3 hereof have been  satisfied  or waived in
writing by the Administrative  Agent as of the date of the L/C Application.  The
L/C  Application  will  also  state  the  aggregate   principal  amount  of  all
Competitive Bid Loans  outstanding under the 364 Day Facility and the Three Year
Facility. Upon receipt of any L/C Application, such Issuing Lender shall process
such L/C  Application  and the  certificates,  documents  and other  papers  and
information  delivered  to it in  connection  therewith in  accordance  with its
customary  procedures  and shall,  subject to Section 3.1,  this Section 3.2 and
Article V hereof, promptly issue the Letter of Credit (or amend, extend or renew
the outstanding  Letter of Credit)  requested thereby (but in no event shall any
Issuing  Lender be required  to issue any Letter of Credit (or amend,  extend or
renew an  outstanding  Letter of Credit)  earlier than three (3)  Business  Days
after  its  receipt  of  the  L/C  Application   therefor  and  all  such  other
certificates,  documents and other papers and information  relating  thereto) by
issuing the original of such Letter of Credit to the  beneficiary  thereof or as
otherwise may be agreed by such Issuing Lender and the Borrower.  Within fifteen
(15) Business Days after the end of each calendar  quarter,  each Issuing Lender
(or the  Administrative  Agent if the  Administrative  Agent agrees to undertake
such  action)  shall  report to each Lender all  Letters of Credit  issued by it
during the previous calendar quarter and the average daily undrawn and unexpired
amounts for all Letters of Credit for each day in such calendar quarter.

      Section 3.3 Fees and Other Charges.

            3.3.1 The Borrower agrees to pay to the  Administrative  Agent,  for
the account of each Issuing Lender and the L/C Participants,  a letter of credit
fee (the "L/C Fee") with respect to each Letter of Credit issued by such Issuing
Lender in an amount determined as follows:

                  (a) as to  Performance  Letters of Credit,  the average  daily
            undrawn  amount of such issued Letters of Credit as reported by such
            Issuing Lender (or the Administrative Agent) pursuant to Section 3.2
            times 50% of the Applicable  Percentage for Offshore Rate Loans then
            in effect as to the Three Year Facility; and

                  (b) as to  Financial  Letters of  Credit,  the  average  daily
            undrawn  amount of such issued Letters of Credit as reported by such
            Issuing Lender (or the Administrative Agent) pursuant to Section 3.2
            times the  Applicable  Percentage  for  Offshore  Rate Loans then in
            effect as to the Three Year Facility.

                                       28

The L/C Fee shall be payable  quarterly  in arrears on the last  Business Day of
each calendar quarter,  commencing on the first of such dates to occur after the
Closing Date, and on the Three Year Facility Termination Date.

            3.3.2 The Administrative Agent shall, promptly following its receipt
thereof, distribute to each Issuing Lender and the L/C Participants the L/C Fees
received by the  Administrative  Agent in accordance with their respective Three
Year Facility Commitment Percentages.

            3.3.3 In addition to the L/C Fee, the Borrower  agrees to pay to the
relevant Issuing Lender that has issued a Letter of Credit at the request of the
Borrower,  for such Issuing  Lender's own account  without  sharing by the other
Lenders,  (i) a fronting fee of 0.125% per annum based on the  aggregate  stated
amount of such  Letter of  Credit  for the  stated  duration  thereof,  and (ii)
customary  charges  of  such  Issuing  Lender  with  respect  to  the  issuance,
amendment,  transfer,  administration,   cancellation  and  conversion  of,  and
drawings under, such Letters of Credit.

      Section 3.4 L/C Participations.

            3.4.1 Each  Issuing  Lender  irrevocably  agrees to grant and hereby
grants to each L/C  Participant,  and,  to induce such  Issuing  Lender to issue
Letters of Credit hereunder,  each L/C Participant  irrevocably agrees to accept
and purchase and hereby accepts and purchases from such Issuing  Lender,  on the
terms and conditions  hereinafter stated, for such L/C Participant's own account
and risk,  an  undivided  interest  equal to such L/C  Participant's  Three Year
Facility Commitment  Percentage in such Issuing Lender's  obligations and rights
under each Letter of Credit  issued  hereunder and the amount of each draft paid
by such Issuing Lender  thereunder.  Each L/C  Participant  unconditionally  and
irrevocably  agrees with each Issuing  Lender that, if a draft is paid under any
Letter of Credit for which such Issuing  Lender is not reimbursed in full by the
Borrower in accordance  with the terms of this  Agreement,  such L/C Participant
shall pay to such Issuing  Lender upon demand at such Issuing  Lender's  address
for notices  specified  herein an amount equal to such L/C  Participant's  Three
Year Facility  Commitment  Percentage  of the amount of such draft,  or any part
thereof, which is not so reimbursed.

            3.4.2 Upon becoming  aware of any amount  required to be paid by any
L/C  Participant to any Issuing  Lender  pursuant to Section 3.4.1 in respect of
any  unreimbursed  portion of any payment made by such Issuing  Lender under any
Letter of Credit, the Administrative  Agent shall notify each L/C Participant of
the amount and due date of such required payment and such L/C Participant  shall
pay to such Issuing  Lender the amount  specified on the applicable due date. If
any such amount is paid to such  Issuing  Lender  after the date such payment is
due,  such L/C  Participant  shall  pay to such  Issuing  Lender on  demand,  in
addition to such amount,  the product of (i) such  amount,  times (ii) the daily
average Federal Funds Rate as determined by the Administrative  Agent during the
period from and including the date such payment is due to the date on which such
payment is immediately  available to such Issuing Lender, times (iii) a fraction
the  numerator of which is the number of days that elapse during such period and
the  denominator  of which is 360. A  certificate  of any  Issuing  Lender  with

                                       29

respect to any amounts owing under this Section 3.4.2 shall be conclusive in the
absence of manifest error.  With respect to payment to any Issuing Lender of the
unreimbursed  amounts  described in this Section 3.4.2, if the L/C  Participants
receive  notice that any such  payment is due (A) prior to 1:00 p.m.  (Charlotte
time) on any Business  Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m.  (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.

            3.4.3  Whenever,  at any time  after  any  Issuing  Lender  has made
payment under any Letter of Credit and has received from any L/C Participant the
Three Year Facility  Commitment  Percentage  of such payment in accordance  with
this  Section  3.4,  such Issuing  Lender  receives any payment  related to such
Letter of Credit  (whether  directly  from the  Borrower  or  otherwise,  or any
payment of interest on account thereof),  such Issuing Lender will distribute to
such L/C  Participant  its pro rata share  thereof in  accordance  with such L/C
Participant's Three Year Facility Commitment Percentage;  provided,  that in the
event that any such payment received by such Issuing Lender shall be required to
be returned by such Issuing Lender,  such L/C  Participant  shall return to such
Issuing Lender the portion thereof previously distributed by such Issuing Lender
to it.

      Section 3.5 Reimbursement Obligation of the Borrower.

            The Borrower  agrees to reimburse  each Issuing  Lender on each date
such Issuing  Lender or the  Administrative  Agent  notifies the Borrower of the
date and  amount of a draft paid  under any  Letter of Credit  requested  by the
Borrower  for the  amount of (i) such  draft so paid and (ii) any  taxes,  fees,
charges or other costs or expenses  incurred by any Issuing Lender in connection
with such payment.  Each such payment shall be made to the  appropriate  Issuing
Lender at its address for notices specified herein in Dollars and in immediately
available  funds.  Interest  shall be payable on any and all  amounts  remaining
unpaid by the Borrower  under this Article III from the date such amounts become
payable (whether at stated maturity, by acceleration or otherwise) until payment
in full at the rate which  would be payable on any  outstanding  Base Rate Loans
which were then overdue.  If the Borrower fails to timely reimburse such Issuing
Lender on the date the Borrower  receives the notice referred to in this Section
3.5,  the  Borrower  shall be deemed to have timely  given a Notice of Revolving
Credit Borrowing pursuant to Section 2.2 hereunder to the  Administrative  Agent
requesting the Lenders to make a Base Rate Loan under the Three Year Facility on
such date in an amount equal to the amount of such draft paid, together with any
taxes,  fees,  charges or other costs or expenses incurred by any Issuing Lender
and to be reimbursed  pursuant to this Section 3.5 and, regardless of whether or
not the conditions  precedent  specified in Article V have been  satisfied,  the
Lenders  shall make Base Rate Loans in such amount,  the proceeds of which shall
be applied  to  reimburse  such  Issuing  Lender  for the amount of the  related
drawing and costs and expenses.  Notwithstanding the foregoing,  nothing in this
Section  3.5 shall  obligate  the  Lenders  to make such Base Rate  Loans if the
making of such Base Rate Loans would  violate the  automatic  stay under federal
bankruptcy laws.

      Section 3.6 Obligations Absolute.

            The Borrower's obligations under this Article III (including without
limitation the  Reimbursement  Obligation)  shall be absolute and  unconditional

                                       30

under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment  which the  Borrower may have or have had against any Issuing
Lender or any  beneficiary of a Letter of Credit.  The Borrower also agrees with
each Issuing  Lender that no Issuing  Lender shall be  responsible  for, and the
Borrower's  Reimbursement Obligation under Section 3.5 shall not be affected by,
among  other  things,  the  validity  or  genuineness  of  documents  or of  any
endorsements  thereon,  even  though  such  documents  shall in fact prove to be
invalid,  fraudulent or forged, or any dispute between or among the Borrower and
any  beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be  transferred or any claims  whatsoever of the Borrower  against
any  beneficiary  of such  Letter of Credit or any such  transferee.  No Issuing
Lender  shall  be  liable  for any  error,  omission,  interruption  or delay in
transmission,   dispatch  or   delivery  of  any  message  or  advice,   however
transmitted,  in  connection  with any  Letter of  Credit,  except for errors or
omissions   caused  by  such  Issuing   Lender's  gross  negligence  or  willful
misconduct.  The Borrower agrees that any action taken or omitted by any Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents,  if done in the absence of gross negligence or willful misconduct and
in accordance  with the standards of care specified in the Uniform  Customs and,
to the  extent  not  inconsistent  therewith,  the UCC,  shall be binding on the
Borrower and shall not result in any  liability  of such  Issuing  Lender to the
Borrower.  The  responsibility  of  each  Issuing  Lender  to  the  Borrower  in
connection  with any draft  presented  for  payment  under any  Letter of Credit
shall,  in addition to any payment  obligation  expressly  provided  for in such
Letter of Credit,  be limited to determining that the documents  (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.

      Section 3.7 Effect of L/C Application.

            To the extent that any provision of any L/C  Application  related to
any Letter of Credit is  inconsistent  with the  provisions of this Article III,
the provisions of this Article III shall apply.

                                   ARTICLE IV

                             GENERAL LOAN PROVISIONS

      Section 4.1 Interest and Utilization Fee.

            4.1.1  Interest  Rate  Options.  Subject to the  provisions  of this
Section 4.1, at the election of the Borrower, the aggregate principal balance of
any Revolving  Credit Loans shall bear interest at (i) the Base Rate or (ii) the
Offshore Rate plus the  Applicable  Percentage for Offshore Rate Loans under the
364 Day Facility or the Three Year Facility,  as applicable;  provided that such
interest  rate shall be  increased  by any amount  required  pursuant to Section
4.1.6.  The Borrower shall select the rate of interest and Interest  Period,  if
any,  applicable to any Revolving  Credit Loan at the time a Notice of Revolving
Credit  Borrowing  is given  pursuant  to Section 2.2 or at the time a Notice of
Conversion/Continuation  is given pursuant to Section 4.2. Each Revolving Credit
Loan or portion thereof bearing interest based on the Base Rate shall be a "Base
Rate Loan," and each Revolving  Credit Loan or portion thereof bearing  interest
based on the  Offshore  Rate shall be an  "Offshore  Rate  Loan." Any  Revolving
Credit  Loan or any  portion  thereof  as to  which  the  Borrower  has not duly
specified an interest rate as provided  herein shall be deemed a Base Rate Loan.

                                       31

A Competitive  Bid Loan will bear interest at the Competitive Bid Rate specified
in the Competitive Bid accepted by the Borrower with respect to such Competitive
Bid Loan.

            4.1.2 Interest  Periods.  In connection with each Offshore Rate Loan
and each  Competitive  Bid Loan,  the  Borrower,  by giving  notice at the times
described in Section 4.1.1,  shall elect an interest  period (each, an "Interest
Period") to be applicable to such Revolving  Credit Loan or such Competitive Bid
Loan, which Interest Period shall, unless otherwise agreed by the Administrative
Agent and the Lenders,  be a period of one (1), two (2),  three (3), six (6) or,
if available to all the Lenders, nine (9) or twelve (12), months with respect to
each Offshore Rate Loan and a period of one (1) day to one hundred  eighty-three
(183) days with respect to each Competitive Bid Loan; provided that:

                  (a) the Interest  Period shall commence on the date of advance
      of or conversion to any Offshore Rate Loan and, in the case of immediately
      successive  Interest  Periods,   each  successive  Interest  Period  shall
      commence on the date on which the next preceding Interest Period expires;

                  (b) if any  Interest  Period would  otherwise  expire on a day
      that is not a Business Day, such Interest  Period shall expire on the next
      succeeding  Business  Day;  provided,  that if any  Interest  Period  with
      respect to an Offshore Rate Loan would  otherwise  expire on a day that is
      not a  Business  Day but is a day of the  month  after  which  no  further
      Business Day occurs in such month,  such  Interest  Period shall expire on
      the next preceding Business Day;

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

                  (d) no Interest  Period  shall extend  beyond the  Termination
      Date of the facility under which the Offshore Rate Loan or Competitive Bid
      Loan with respect to which such Interest Period relates was made; and

                  (e) there shall be no more than nine (9)  Offshore  Rate Loans
      outstanding  hereunder at any time (it being understood that, for purposes
      hereof,  Offshore  Rate Loans with  different  Interest  Periods  shall be
      considered as separate Offshore Rate Loans, even if they begin on the same
      date, although  borrowings,  extensions and conversions may, in accordance
      with the  provisions  hereof,  be combined  by the  Borrower at the end of
      existing  Interest  Periods to  constitute a new Offshore Rate Loan with a
      single Interest Period).

            4.1.3 Default Rate. Subject to Section 11.3, unless otherwise agreed
by the  Administrative  Agent and the Required Lenders,  upon the occurrence and
during the continuance of an Event of Default,  (a) the Borrower shall no longer
have the option to request  Offshore Rate Loans,  (b) all  outstanding  Offshore
Rate Loans shall bear  interest at a rate per annum equal to two percent (2%) in

                                       32

excess of the rate then  applicable to such Offshore Rate Loans until the end of
the applicable  Interest  Period and thereafter at a rate per annum equal to two
percent (2%) in excess of the rate then  applicable to Base Rate Loans,  (c) all
outstanding Base Rate Loans shall bear interest at a rate per annum equal to two
percent (2%) in excess of the rate then  applicable  to Base Rate Loans and (iv)
each  outstanding  Competitive  Bid Loan shall bear interest at a rate per annum
equal  to two  percent  (2%) in  excess  of the  rate  then  applicable  to such
Competitive  Bid Loan.  Interest shall continue to accrue on the amount of Loans
outstanding  after the filing by or against the Borrower of any petition seeking
any relief in  bankruptcy  or under any act or law  pertaining  to insolvency or
debtor relief, whether state, federal or foreign.

            4.1.4 Interest Payment and  Computation.  Interest on each Base Rate
Loan  shall be payable in  arrears  on the last  Business  Day of each  calendar
quarter  commencing  on the first of such dates to occur after the Closing Date,
and interest on each Offshore Rate Loan and each  Competitive  Bid Loan shall be
payable on the last day of each Interest Period applicable thereto,  and if such
Interest  Period  exceeds  three (3) months,  at the end of each three (3) month
interval during such Interest Period. Interest on all Loans and all fees payable
hereunder  shall be computed on the basis of a 360-day year and assessed for the
actual number of days elapsed;  provided that interest on Loans bearing interest
at a rate based upon the Prime Rate shall be  computed on the basis of a 365- or
366-day year, as applicable.

            4.1.5 Maximum Rate. In no contingency or event  whatsoever shall the
aggregate  of all amounts  deemed  interest  hereunder or under any of the Notes
charged or collected  pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible  under any Applicable Law which
a  court  of  competent  jurisdiction  shall,  in a  final  determination,  deem
applicable  hereto.  In the event that such a court  determines that the Lenders
have charged or received interest  hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Borrower's  option
(or if an  Event  of  Default  has  occurred  and  is  then  continuing,  at the
Administrative Agent's option), (i) promptly refund to the Borrower any interest
received  by Lenders  in excess of the  maximum  lawful  rate or (ii) apply such
excess to the principal balance of the Obligations. It is the intent hereof that
the Borrower  not pay or contract to pay,  and that  neither the  Administrative
Agent nor any Lender  receive or contract to receive,  directly or indirectly in
any  manner  whatsoever,  interest  in excess  of that  which may be paid by the
Borrower under Applicable Law.

            4.1.6  Utilization  Fee. In the case of all Loans,  on each day that
Utilization  is  greater  than  50%,  the  otherwise  applicable  interest  rate
determined  pursuant  to Section  4.1.1  shall be  increased  by the  Applicable
Percentage for Utilization Fee.

      Section 4.2 Conversion and Continuation of Revolving Credit Loans.

            Provided  that no Default or Event of Default  has  occurred  and is
then continuing,  and subject to the terms of this Agreement, the Borrower shall
have the option (a) to convert all or any portion of its  outstanding  Base Rate
Loans in a  principal  amount  equal to  $5,000,000  or any  whole  multiple  of
$1,000,000 in excess  thereof into one or more Offshore Rate Loans and (b)(i) to
convert all or any part of its  outstanding  Offshore  Rate Loans in a principal
amount equal to $1,000,000 or a whole  multiple of $1,000,000 in excess  thereof

                                       33

into Base Rate Loans or (ii) to continue  Offshore  Rate Loans as Offshore  Rate
Loans for an additional  Interest  Period;  provided  that if any  conversion or
continuation  is made  prior  to the  expiration  of any  Interest  Period,  the
Borrower  shall pay any amount  required  to be paid  pursuant  to  Section  4.9
hereof.  Whenever the Borrower  desires to convert or continue  Revolving Credit
Loans as  provided  above,  the  Borrower  shall give the  Administrative  Agent
irrevocable prior written notice in the form attached as Exhibit F (a "Notice of
Conversion/Continuation")  not later than 12:00 noon (Charlotte  time) three (3)
Business Days before the day on which a proposed  conversion or  continuation of
such  Revolving  Credit  Loan  is to be  effective  (except  in  the  case  of a
conversion  of an Offshore Rate Loan to a Base Rate Loan, in which case same day
notice  not later  than 11:00 a.m.  (Charlotte  time) by the  Borrower  shall be
sufficient)  specifying  (A) the  Revolving  Credit  Loans  to be  converted  or
continued, the facility under which such Loans were made and, in the case of any
Offshore  Rate Loan to be converted or  continued,  the last day of the Interest
Period  therefor,  (B) the effective  date of such  conversion  or  continuation
(which shall be a Business  Day),  (C) the  principal  amount of such  Revolving
Credit  Loans to be converted  or  continued  and (D) the Interest  Period to be
applicable to such converted or continued Offshore Rate Loan. The Administrative
Agent    shall    promptly    notify   the    Lenders   of   such    Notice   of
Conversion/Continuation.

      Section 4.3 Facility Fees.

            4.3.1  364  Day  Facility.   The  Borrower  agrees  to  pay  to  the
Administrative Agent, for the account of the Lenders, a non-refundable  facility
fee (the "364 Day  Facility  Fee") at a rate per annum  equal to the  Applicable
Percentage for Facility Fee for the 364 Day Facility on the average daily amount
of the  aggregate  364 Day Facility  Commitment  during the  applicable  period,
regardless  of  usage.  The 364 Day  Facility  Fee  shall  apply  to the  period
commencing  on the  Closing  Date and ending on the  termination  of the 364 Day
Facility  Commitment and shall be payable in arrears on the last Business Day of
each calendar quarter for the immediately preceding calendar quarter (or portion
thereof),  beginning  with the first such date to occur after the Closing  Date.
Such 364 Day Facility Fee shall be  distributed by the  Administrative  Agent to
the Lenders pro rata in accordance with the Lenders' respective 364 Day Facility
Commitment Percentages.

            4.3.2  Three  Year  Facility.  The  Borrower  agrees  to  pay to the
Administrative Agent, for the account of the Lenders, a non-refundable  facility
fee (the "Three Year Facility  Fee") at a rate per annum equal to the Applicable
Percentage  for  Facility Fee for the Three Year  Facility on the average  daily
amount of the aggregate  Three Year Facility  Commitment  during the  applicable
period,  regardless  of usage.  The Three Year  Facility  Fee shall apply to the
period commencing on the Closing Date and ending on the termination of the Three
Year  Facility  Commitment  and shall be payable in arrears on the last Business
Day of each calendar quarter for the immediately  preceding calendar quarter (or
portion thereof),  beginning with the first such date to occur after the Closing
Date.  Such Three Year Facility Fee shall be distributed  by the  Administrative
Agent to the Lenders pro rata in accordance with the Lenders'  respective  Three
Year Facility Commitment Percentages.

                                       34

      Section 4.4 Manner of Payment.

            Each payment by any Credit  Party on account of the  principal of or
interest on the Loans or of any fee,  commission or other amounts (including the
Reimbursement  Obligation)  payable to the Lenders  under this  Agreement or any
Note shall be made on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office for the account of the
Lenders (other than as set forth below),  in Dollars,  in immediately  available
funds  and  shall  be  made  without  any  set-off,  counterclaim  or  deduction
whatsoever. Such payments shall be made no later than 3:00 p.m. (Charlotte time)
on the relevant date.  Any payment  received  after 3:00 p.m.  (Charlotte  time)
shall be deemed to have been made on the next  succeeding  Business  Day for all
purposes. Each payment to the Administrative Agent of the L/C Fees shall be made
in  like  manner,  but  for  the  account  of the  Issuing  Lenders  and the L/C
Participants. Each payment to the Administrative Agent of Administrative Agent's
fees or expenses shall be made for the account of the  Administrative  Agent and
any amount  payable to any Lender under  Section 4.8,  4.9,  4.10,  4.11 or 13.2
shall be paid to the  Administrative  Agent for the  account  of the  applicable
Lender. The Administrative  Agent shall distribute any such payments received by
it for the account of any other Lender to such Lender promptly following receipt
thereof  and shall  wire  advice of the  amount of such  credit to such  Lender.
Subject to Section  4.1.2(b),  if any payment  under this  Agreement or any Note
shall be specified  to be made upon a day which is not a Business  Day, it shall
be made on the next succeeding day which is a Business Day and such extension of
time shall in such case be included in computing  any interest if payable  along
with such payment.

      Section 4.5 Crediting of Payments and Proceeds.

            In the event  that any  Credit  Party  shall  fail to pay any of the
Obligations  when due and the  Obligations  have been  accelerated  pursuant  to
Section 11.2, all payments  received by the Lenders upon the Notes and the other
Obligations and all net proceeds from the  enforcement of the Obligations  shall
be applied  first to all  expenses  then due and  payable by the Credit  Parties
hereunder,  then to all indemnity obligations then due and payable by the Credit
Parties hereunder, then to all Administrative Agent's fees then due and payable,
then to all commitment and other fees and commissions then due and payable, then
to accrued and unpaid interest on the Notes, the  Reimbursement  Obligations and
any termination  payments due in respect of a Hedging  Agreement with any Lender
or Affiliate of a Lender (which Hedging  Agreement is permitted  hereunder) (pro
rata in accordance with all such amounts due),  then to the principal  amount of
the Notes and  Reimbursement  Obligations  (pro rata in accordance with all such
amounts due) and then to the cash collateral account described in Section 11.2.2
hereof to the extent of any L/C Obligations then outstanding, in that order.

      Section 4.6 Adjustments.

            If any Lender (a "Benefited  Lender")  shall at any time receive any
payment of all or part of the Obligations owing to it, or interest  thereon,  or
if any  Lender  shall at any time  receive  any  collateral  in  respect  to the
Obligations owing to it (whether  voluntarily or  involuntarily,  by set- off or
otherwise)  in a greater  proportion  than any such  payment  to and  collateral
received by any other  Lender,  if any, in respect of the  Obligations  owing to

                                       35

such other Lender, or interest thereon, such Benefited Lender shall purchase for
cash from the other Lenders such portion of each such other Lender's  Extensions
of Credit,  or shall  provide  such other  Lenders with the benefits of any such
collateral,  or the  proceeds  thereof,  as shall  be  necessary  to cause  such
Benefited  Lender to share the excess payment or benefits of such  collateral or
proceeds ratably with each of the Lenders;  provided, that if all or any portion
of such excess  payment or benefits is thereafter  recovered from such Benefited
Lender,  such purchase  shall be rescinded,  and the purchase price and benefits
returned to the extent of such  recovery,  but without  interest.  The  Borrower
agrees that each Lender so purchasing a portion of another  Lender's  Extensions
of Credit may exercise  all rights of payment  (including,  without  limitation,
rights of set-off)  with respect to such portion as fully as if such Lender were
the direct holder of such portion.

      Section  4.7 Nature of  Obligations  of Lenders  Regarding  Extensions  of
Credit; Assumption by the Administrative Agent.

            The  obligations  of the Lenders  under this  Agreement  to make the
Loans and issue or  participate  in Letters of Credit  are  several  and are not
joint or joint and several.  Unless the Administrative Agent shall have received
notice from a Lender  prior to a proposed  borrowing  date that such Lender will
not make available to the Administrative  Agent such Lender's ratable portion of
the Revolving  Credit Loans to be borrowed  (which notice shall not release such
Lender from its obligations hereunder), the Administrative Agent may assume that
such  Lender has made such  portion or amount  available  to the  Administrative
Agent on the proposed  borrowing date in accordance with Section 2.2.2,  and the
Administrative  Agent may, in reliance upon such  assumption,  make available to
the  Borrower  on such  date a  corresponding  amount.  If such  amount  is made
available to the Administrative  Agent on a date after such borrowing date, such
Lender shall pay to the  Administrative  Agent on demand an amount,  until paid,
equal to the  product  of (a) the amount not made  available  by such  Lender in
accordance with the terms hereof, times (b) the daily average Federal Funds Rate
during  such  period as  determined  by the  Administrative  Agent,  times (c) a
fraction  the  numerator  of which is the  number of days that  elapse  from and
including  such  borrowing  date to the  date on  which  such  amount  not  made
available by such Lender in  accordance  with the terms hereof shall have become
immediately  available to the Administrative  Agent and the denominator of which
is 360. A certificate  of the  Administrative  Agent with respect to any amounts
owing under this Section 4.7 shall be conclusive, absent manifest error. If such
Lender's  Commitment  Percentage  of such  Revolving  Credit  Loans  is not made
available to the  Administrative  Agent by such Lender within three (3) Business
Days of such  borrowing  date,  the  Administrative  Agent  shall be entitled to
recover such amount made  available by the  Administrative  Agent with  interest
thereon at the rate per annum applicable to such borrowing,  on demand, from the
Borrower.  The failure of any Lender to make available its Commitment Percentage
of any Revolving  Credit Loan or a Competitive  Bid Loan shall not relieve it or
any other Lender of its obligation  hereunder to make its Commitment  Percentage
of  such  Revolving  Credit  Loan  or any  Competitive  Bid  Loan  respectively,
available on the  borrowing  date,  but no Lender shall be  responsible  for the
failure of any other Lender to make its Commitment  Percentage of such Revolving
Credit Loan or any Competitive Bid Loan available on the borrowing date.

                                       36

      Section 4.8 Changed Circumstances.

            4.8.1  Circumstances  Affecting Offshore Rate Availability.  If with
respect  to any  Interest  Period:  (i) the  Administrative  Agent or any Lender
(after consultation with the Administrative  Agent) shall determine that for any
reason  adequate and reasonable  means do not exist for determining the Offshore
Rate for any requested  Interest Period with respect to a proposed Offshore Rate
Loan or (ii) the Required Lenders  reasonably and in good faith determine (which
determination shall be conclusive) and notify the Administrative  Agent that the
LIBOR Rate will not  adequately  and  fairly  reflect  the cost to the  Required
Lenders  of  funding  Offshore  Rate Loans for such  Interest  Period,  then the
Administrative  Agent  shall  forthwith  give  notice  thereof to the  Borrower.
Thereafter,  until the  Administrative  Agent  notifies the  Borrower  that such
circumstances  no longer exist,  the  obligation of the Lenders to make Offshore
Rate Loans and the right of the Borrower to convert any Revolving Credit Loan to
or  continue  any  Revolving  Credit  Loan as an  Offshore  Rate  Loan  shall be
suspended,  and the Borrower shall repay in full (or cause to be repaid in full)
the then  outstanding  principal amount of each such Offshore Rate Loan together
with accrued  interest  thereon,  on the last day of the then  current  Interest
Period  applicable to such  Offshore  Rate Loan or convert the then  outstanding
principal  amount of each such  Offshore Rate Loan to a Base Rate Loan as of the
last day of such Interest Period.

            4.8.2 Laws Affecting Offshore Rate Availability.  If, after the date
hereof,  the introduction of, or any change in, any Applicable Law or any change
in the interpretation or administration  thereof by any Governmental  Authority,
central  bank  or  comparable   agency  charged  with  the   interpretation   or
administration  thereof, or compliance by any Lender (or any of their respective
Lending Offices) with any request or directive  (whether or not having the force
of law) issued after the date hereof of any such Governmental Authority, central
bank or comparable  agency,  shall make it unlawful or impossible for any of the
Lenders (or any of their  respective  Lending  Offices) to honor its obligations
hereunder to make or maintain any Offshore Rate Loan, such Lender shall promptly
give notice thereof to the  Administrative  Agent and the  Administrative  Agent
shall  promptly give notice to the Borrower and the other  Lenders.  Thereafter,
until the Administrative  Agent notifies the Borrower that such circumstances no
longer  exist,  (i) the  obligations  of the affected  Lender or Lenders to make
Offshore  Rate  Loans and the right of the  Borrower  to convert  any  Revolving
Credit Loan of the affected  Lender or Lenders or continue any Revolving  Credit
Loan of the  affected  Lender or  Lenders  as an  Offshore  Rate  Loan  shall be
suspended  and  thereafter  the Borrower may select from the affected  Lender or
Lenders  only Base Rate  Loans  hereunder,  (ii) if any of the  Lenders  may not
lawfully  continue  to  maintain  an  Offshore  Rate Loan to the end of the then
current Interest Period applicable thereto, the applicable Offshore Rate Loan of
the affected  Lender or Lenders  shall  immediately  be converted to a Base Rate
Loan for the  remainder of such Interest  Period and the Borrower  shall pay any
amount  required to be paid pursuant to Section 4.9 in connection  therewith and
(iii) if any of the Lenders may not lawfully  continue to maintain a Competitive
Bid Loan which bears interest at a rate based on the Offshore Rate to the end of
the then current  Interest Period  applicable  thereto at such rate of interest,
such Competitive Bid Loan of the affected Lender shall  immediately be converted
to a Base Rate Loan for the  remainder  of such  Interest  Period.  The Borrower
shall  repay  the  outstanding  principal  amount of any  Competitive  Bid Loans
converted  into Base Rate Loans in accordance  with clause (iii) of this Section
4.8.2,  together  with all  accrued but unpaid  interest  thereon and any amount

                                       37

required  to be paid  pursuant  to Section  4.9  hereof,  on the last day of the
Interest Period applicable to such Competitive Bid Loans.

            4.8.3 Increased Costs.  If, after the date hereof,  the introduction
of,  or  any  change  in,  any  Applicable  Law,  or in  the  interpretation  or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration  thereof, or compliance
by any of the  Lenders (or any of their  respective  Lending  Offices)  with any
request or  directive  (whether or not having the force of law) issued after the
date hereof of such Authority, central bank or comparable agency:

                  (a)  shall  subject  any  of the  Lenders  (or  any  of  their
      respective  Lending Offices) to any tax, duty or other charge with respect
      to any Note, Letter of Credit or L/C Application or shall change the basis
      of taxation of payments to any of the Lenders (or any of their  respective
      Lending  Offices) of the  principal of or interest on any Note,  Letter of
      Credit or L/C Application or any other amounts due under this Agreement in
      respect  thereof (except for changes in the rate of tax on the overall net
      income of any of the Lenders or any of their  respective  Lending  Offices
      imposed by the  jurisdiction  in which such Lender is  organized  or is or
      should be qualified to do business or such Lending Office is located); or

                  (b)  shall  impose,  modify  or deem  applicable  any  reserve
      (including,  without limitation, any imposed by the Board other than those
      used to  calculate  the  Offshore  Rate),  special  deposit,  insurance or
      capital or similar requirement against assets of, deposits with or for the
      account  of, or credit  extended  by any of the  Lenders  (or any of their
      respective  Lending Offices) or shall impose on any of the Lenders (or any
      of their respective Lending Offices) or the foreign exchange and interbank
      markets any other condition affecting any Note;

and the result of any event of the kind described in this Section  4.8.3,  is to
increase the costs to any of the Lenders of  maintaining  any Offshore Rate Loan
or Competitive Bid Loan or of issuing or  participating  in Letters of Credit or
to reduce the yield or amount of any sum  received or  receivable  by any of the
Lenders  under this  Agreement or under the Notes or any Letter of Credit or L/C
Application in an amount deemed by such Lender to be material,  then such Lender
may promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify the Borrower of such fact and demand compensation  therefor and,
within  fifteen  (15) days after such notice by the  Administrative  Agent,  the
Borrower  shall pay to such  Lender  such  additional  amount or amounts as will
compensate  such  Lender  or  Lenders  for  such  increased  cost or  reduction;
provided,  however,  that to the extent any  reduction  in the rate of return on
such  Lender's  capital  results both from its  obligations  hereunder  and from
developments  in  its  business  or  financial  position  not  related  to  this
Agreement,  such Lender shall, in determining the amount necessary to compensate
it under  this  Section  4.8.3,  attempt  in good  faith to take  account of the
relative contributions of such obligations hereunder and such other developments
or change in its financial position to such reduction.  The Administrative Agent
and the  applicable  Lender will  promptly  notify the  Borrower of any event of
which it has knowledge which will entitle such Lender to  compensation  pursuant
to this Section  4.8.3;  provided that the  Administrative  Agent shall incur no
liability  whatsoever to the Lenders or the Borrower in the event it fails to do
so. The  amount of such  compensation  shall be  determined,  in the  applicable

                                       38

Lender's  reasonable  discretion,  based upon the  assumption  that such  Lender
funded its Aggregate Revolving Credit Commitment Percentage of the Offshore Rate
Loans, or the amount of any  Competitive  Bid Loans made by such Lender,  in the
London  interbank  market  and using any  reasonable  attribution  or  averaging
methods which such Lender deems appropriate and practical. A certificate of such
Lender setting forth in reasonable  detail the basis for determining such amount
or amounts  necessary  to  compensate  such  Lender  shall be  forwarded  to the
Borrower through the Administrative Agent and shall be conclusively  presumed to
be correct save for manifest error.

            4.8.4 Mitigation.  If any Lender demands  compensation under Section
4.8.3  or if the  obligation  of any  Lender  to make  Offshore  Rate  Loans  is
suspended under Section 4.8.2,  then such Lender will use reasonable  efforts to
designate a different  Lending Office for each affected Loan if such designation
would avoid the need for, or reduce the amount of, such  compensation  or permit
such Lender to make and maintain  Offshore  Rate Loans under  Section  4.8.2 and
would not, in the sole judgment of such Lender, be otherwise  disadvantageous to
such Lender. A certificate of such Lender setting forth the additional amount or
amounts  required to compensate  such Lender in respect of any increased  costs,
the  changes  as a result  of  which  such  amounts  are due and the  manner  of
computing   such  amounts  shall  be  deemed   conclusive,   provided  that  the
determinations  set forth in such  certificate  are made  reasonably and in good
faith. If any Lender demands  compensation  from the Borrower under this Section
4.8 more than one hundred  eighty (180) days after such Lender had  knowledge of
the occurrence of the event giving rise to such compensation, the Borrower shall
not be obligated to  reimburse  such Lender for amounts  incurred as a result of
the  occurrence  of such event more than one hundred  eighty (180) days prior to
the date on which the Lender made such demand (provided that if the event giving
rise to the compensation or indemnification is retroactive, then the one hundred
eighty  (180) day period  referred  to above  shall be  extended  to include the
period of  retroactive  effect).  Notwithstanding  any other  provisions of this
Section 4.8, no Lender  shall  demand  compensation  for any  increased  cost or
reduction referred to above if it shall not at the time be the general policy or
practice  of such Lender to demand such  compensation  in similar  circumstances
under comparable provisions of other credit agreements, if any.

            4.8.5   Replacement   of  a  Lender.   If  (a)  any  Lender  demands
compensation  under Section 4.8.3 (which  compensation is not demanded by all of
the Lenders) and the Borrower  deems such  additional  amounts to be material or
(b) the  obligation  of any Lender to make or  maintain  Offshore  Rate Loans is
suspended under Section 4.8.1 or Section 4.8.2, then, in each case, the Borrower
may, so long as no Default or Event of Default has occurred  and is  continuing,
obtain,  at the  Borrower's  expense,  one or more other  Lenders  or,  with the
consent  of the  Administrative  Agent,  one or more  other  Eligible  Assignees
willing to replace  such Lender,  and such Lender  shall  execute and deliver to
such  Eligible  Assignee  an  Assignment  and  Acceptance  with  respect to such
Lender's  entire interest under this Agreement and the Notes for an amount equal
to the principal  balance of all Loans and L/C Obligations  held by the affected
Lender and all accrued  interest and fees with respect  thereto through the date
of such assignment,  provided that the Borrower shall have paid to such affected
Lender the compensation that it is entitled to receive under Section 4.8 through
the date of such  assignment.  Upon the execution by such  Eligible  Assignee of
such Assignment and Acceptance and compliance  with the  requirements of Section
13.9.2  hereof,  such  Eligible  Assignee  shall succeed to all of such Lender's
rights and duties under this Agreement.  If the Borrower  exercises its election

                                       39

under  this  Section  4.8.5 to  replace a  Lender,  the  Borrower  shall pay the
administrative fee payable to the Administrative Agent under Section 13.9.2.

      Section 4.9 Indemnity.

            The  Borrower  hereby  indemnifies  each of the Lenders  against any
loss, cost or expense incurred by a Lender as a result of (a) any failure by the
Borrower to borrow,  convert or repay any amount in connection with any Offshore
Rate Loan hereunder on the date specified  therefor in the applicable  Notice of
Revolving  Credit  Borrowing  or  Notice  of   Continuation/Conversion   or  any
Competitive  Bid accepted by the Borrower in  accordance  with the terms of this
Agreement,  (b) any payment,  prepayment or conversion of any Offshore Rate Loan
on a date other than the last day of the Interest Period therefor. The amount of
such loss or expense shall be determined,  in the applicable Lender's reasonable
discretion,  based upon the  assumption  that such Lender funded its  Commitment
Percentage of the Offshore Rate Loans in the London  interbank  market and using
any  reasonable  attribution  or  averaging  methods  which  such  Lender  deems
appropriate  and  practical.  A  certificate  of such  Lender  setting  forth in
reasonable  detail the basis for determining such amount or amounts necessary to
compensate  such  Lender  shall  be  forwarded  to  the  Borrower   through  the
Administrative  Agent and shall be conclusively  presumed to be correct save for
manifest error.

      Section 4.10 Capital Requirements.

            If either (a) the  introduction of, or any change or proposed change
in, or in the  interpretation of, any Applicable Law, or (b) compliance with any
guideline  or request  issued  after the date hereof  from any  central  bank or
comparable  agency or other  Governmental  Authority  (whether or not having the
force of law),  has or would have the effect of  reducing  the rate of return on
the capital of, or has affected or would  affect the amount of capital  required
to be maintained by, any Lender or any corporation  controlling such Lender as a
consequence of, or with reference to any Lender's 364 Day Facility Commitment or
Three Year Facility  Commitment and other  commitments  of this type,  below the
rate which the Lender or such other corporation could have achieved but for such
introduction, change or compliance by an amount such Lender deems material, then
within five (5)  Business  Days after  written  demand by any such  Lender,  the
Borrower  shall pay to such Lender from time to time as specified by such Lender
additional amounts sufficient to compensate such Lender or other corporation for
such reduction;  provided, however, that to the extent any reduction in the rate
of return on such Lender's  capital results both from its obligations  hereunder
and from developments in its business or financial  position not related to this
Agreement,  such Lender shall, in determining the amount necessary to compensate
it under this  Section,  attempt in good faith to take  account of the  relative
contributions  of such  obligations  hereunder  and such other  developments  or
change in its financial position to such reduction. A certificate of such Lender
setting  forth in  reasonable  detail  the basis for  determining  such  amounts
necessary to compensate  such Lender shall be forwarded to the Borrower  through
the Administrative  Agent and shall be conclusively  presumed to be correct save
for manifest error.

                                       40

      Section 4.11 Taxes.

            4.11.1 Payments Free and Clear. Any and all payments by the Borrower
hereunder  or under the Notes or the  Letters  of Credit  shall be made free and
clear of and without deduction for any and all present or future taxes,  levies,
imposts,  deductions,  charges or withholding,  and all liabilities with respect
thereto,  excluding (i) in the case of each Lender and the Administrative Agent,
taxes  imposed on (or measured  by) its gross or net income or  franchise  taxes
imposed by the relevant taxing authority or other Governmental  Authority,  (ii)
in the case of each  Lender,  any  withholding  taxes  payable  with  respect to
payments  hereunder  or under the other Loan  Documents  under laws  (including,
without limitation, any statute, treaty, ruling, determination or regulation) in
effect on the  Closing  Date for such  Lender  (or such later date on which such
Lender becomes a Lender  hereunder) or on the date, if any, on which such Lender
changes any  applicable  Lending  Office by  designating a different  applicable
Lending  Office,  but not excluding any  withholding  taxes payable  solely as a
result of any  change in such laws  occurring  after the  Closing  Date (or such
later date on which such Lender becomes a Lender hereunder) or after the date of
designation of such new Lending Office, as the case may be, and (iii) any branch
profits tax  imposed by the United  States of America or any similar tax imposed
by any  other  jurisdiction  (all  such  non-excluded  taxes,  levies,  imposts,
deductions,  charges, withholdings and liabilities being hereinafter referred to
as "Taxes").  If the Borrower  shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note or Letter of Credit
to any  Lender  or the  Administrative  Agent,  (A) the  sum  payable  shall  be
increased  as may be  necessary  so that after  making all  required  deductions
(including  deductions  applicable to additional sums payable under this Section
4.11) such Lender or the  Administrative  Agent (as the case may be) receives an
amount equal to the amount such party would have received had no such deductions
been made, (B) the Borrower shall make such  deductions,  (C) the Borrower shall
pay the full amount deducted to the relevant taxing authority or other authority
in accordance  with  applicable  law, and (D) the Borrower  shall deliver to the
Administrative  Agent evidence of such payment to the relevant taxing  authority
or other authority in the manner provided in Section 4.11.4.  The Borrower shall
not,  however,  be  required  to pay any  amounts  pursuant to clause (A) of the
preceding  sentence  to any  Foreign  Lender  or the  Administrative  Agent  not
organized  under the laws of the United States of America or a state thereof (or
the District of Columbia) if such  Foreign  Lender or the  Administrative  Agent
fails to comply with the requirements of Section 4.11.5.

            4.11.2  Stamp  and Other Taxes. In addition,  the Borrower shall pay
any present or future stamp,  registration,  recordation or documentary taxes or
any other similar fees or charges or excise  taxes,  levies of the United States
or  any  state  or  political  subdivision  thereof  or any  applicable  foreign
jurisdiction  which arise from any payment made hereunder or from the execution,
delivery  or  registration  of, or  otherwise  similarly  with  respect to, this
Agreement,  the Loans, the Letters of Credit,  the other Loan Documents,  or the
perfection of any rights or security  interest in respect  thereto  (hereinafter
referred to as "Other Taxes").

            4.11.3  Indemnity.  The Borrower shall indemnify each Lender and the
Administrative Agent ("Lender's  Indemnitees") for the full amount of Taxes that
the Borrower should have withheld,  but failed to withhold,  pursuant to Section
4.11.1 and Other Taxes (including, without limitation, any Taxes and Other Taxes
imposed by any  jurisdiction on amounts payable under this Section 4.11) paid by
such Lender or the Administrative Agent (as the case may be) and  any  liability

                                       41

(including  interest and  penalties,  if any) arising  therefrom or with respect
thereto.  In the  event a claim  against  Lender's  Indemnitees  arises  that is
covered by the  indemnity  provisions  of this Section  4.11.3,  notice shall be
given promptly by such Lender or the  Administrative  Agent (as the case may be)
to  Borrower.  Borrower  shall  have the  right to  contest  and  defend  by all
appropriate   legal  proceedings  any  third-party  claim  and  to  control  all
settlements (unless such Lender or the Administrative Agent agrees to assume the
cost of settlement  and to forgo such  indemnity)  and to select lead counsel to
defend any and all third-party  claims at the sole cost and expense of Borrower,
as the  case  may be;  provided,  however,  that  Borrower  may not  effect  any
settlement  that could  result in any cost,  expense or  liability  to  Lender's
Indemnitees unless such Lender or the  Administrative  Agent consents in writing
to such  settlement,  which consent shall not be unreasonably  withheld.  Any of
Lender's  Indemnitees  may  select  and engage  counsel  to  participate  in any
defense,  in which event such  counsel  shall be at the sole cost and expense of
the party  selecting  and engaging such  counsel.  In  connection  with any such
claim,  action or  proceeding,  the parties shall  cooperate with each other and
provide  each  other  with  access  to  relevant  books  and  records  in  their
possession.  If a Lender or the Administrative  Agent shall become aware that it
is or may be  entitled  to  receive a refund,  credit  or  reduction  (including
interest and penalties,  if any) in respect of Taxes or Other Taxes, it promptly
shall  notify  the  Borrower  of the  availability  of such  refund,  credit  or
reduction  and shall,  within thirty (30) days after receipt of a request by the
Borrower  pursue  or timely  claim  such  refund,  credit  or  reduction  at the
Borrower's expense. If any Lender or the Administrative  Agent receives a refund
or realizes a credit or  reduction in tax in respect of any Taxes or Other Taxes
withheld by the  Borrower or for which such Lender or the  Administrative  Agent
has received  payment from the Borrower  hereunder,  it promptly shall repay the
amount of such refund or benefit of such credit or reduction  in tax  (including
penalties  and  interest  refunded,  plus  interest  received,  if  any)  to the
Borrower.

            4.11.4  Evidence  of Payment. Within thirty (30) days after the date
of any  payment  of Taxes or Other  Taxes,  the  Borrower  shall  furnish to the
Administrative  Agent, at its address  referred to in Section 13.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.

            4.11.5  Delivery of Tax  Forms. Each Foreign Lender shall deliver to
the Borrower,  with a copy to the  Administrative  Agent, on the Closing Date or
concurrently  with the delivery of the relevant  Assignment and  Acceptance,  as
applicable,  two United States  Internal  Revenue  Service Forms W-8ECI or Forms
W-8BEN, as applicable (or successor forms), properly completed and certifying in
each case that such  Foreign  Lender is  entitled to a complete  exemption  from
withholding  or deduction for or on account of any United States  federal income
taxes.  Each Foreign Lender  further  agrees to deliver to the Borrower,  with a
copy  to the  Administrative  Agent,  a Form  W-8ECI  or  W-8BEN,  or  successor
applicable  forms or manner of  certification,  as the case may be, on or before
the date that any such form expires or becomes  obsolete or after the occurrence
of any event requiring a change in the most recent form previously  delivered by
it to the Borrower,  certifying  that such Foreign Lender is entitled to receive
payments  under this  Agreement  without  deduction or withholding of any United
States federal income taxes (unless in any such case an event (including without
limitation any change in treaty,  law or  regulation)  has occurred prior to the
date on which any such delivery  would  otherwise be required which renders such
forms  inapplicable or the exemption to which such forms relate  unavailable and
such Foreign Lender notifies the Borrower and the  Administrative  Agent that it

                                       42

is not entitled to receive payments  without  deduction or withholding of United
States federal income  taxes).  Each Lender that is organized  under the laws of
the United States or any state thereof or the District of Columbia shall deliver
to the  Borrower  an  original  copy of Internal  Revenue  Service  Form W-9 (or
applicable successor form) properly completed and duly executed by such Lender.

            4.11.6  Survival. Without  prejudice  to  the  survival of any other
agreement of the Borrower  hereunder,  the  agreements  and  obligations  of the
Borrower contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the 364 Day Facility Commitment and the Three
Year  Facility  Commitment,  but shall be limited in duration to the  applicable
statute of  limitations  for Taxes or Other Taxes for which  indemnification  is
sought.

            4.11.7  Additional Provisions.

                  (a) The Borrower shall not be required to indemnify any Lender
      or to pay any  additional  amounts  to any  Lender in  respect of Taxes or
      Other  Taxes  pursuant  to this  Section  4.11 to the extent  that (i) the
      obligation to pay such additional  amounts would not have arisen but for a
      failure by such Lender to comply with the  provisions of this Section 4.11
      or (ii) the  obligation  with respect to such Taxes or Other Taxes existed
      on the Closing  Date (or later date on which such  Lender  became a Lender
      hereunder)  in respect of such  Lender or,  with  respect to payments to a
      newly  designated  Lending  Office,   existed  on  the  date  such  Lender
      designated such new Lending Office with respect to a Loan.

                  (b)  Any  Lender  or the  Administrative  Agent  claiming  any
      additional  amount  payable  pursuant to this  Section  4.11 shall use all
      reasonable  efforts  (consistent  with legal and regulatory  restrictions)
      that would avoid the need for or reduce the amount of any such  additional
      amounts which may thereafter  accrue  (including but not limited to filing
      any  certificate  or document  requested  by the  Borrower or changing the
      jurisdiction of its applicable Lending Office).

                                  ARTICLE V

                CLOSING; CONDITIONS OF CLOSING AND BORROWING

      Section 5.1 Closing.

            The parties  hereto shall  execute and deliver this  Agreement as of
11:00 a.m. (Charlotte time) on October 3, 2000 or on such other date and at such
other time as the parties hereto shall mutually agree.

      Section 5.2 Conditions to Closing.

            The  obligations  of the Lenders to close this Agreement are subject
to the satisfaction or waiver of each of the following conditions:

                                       43

            5.2.1 Executed Loan Documents.  This Agreement, the Revolving Credit
Notes and all other  applicable Loan Documents shall have been duly  authorized,
executed and delivered to the Administrative Agent by the parties thereto, shall
be in full  force and  effect and no default  (including  without  limitation  a
Default)  shall exist  thereunder,  and the Credit  Parties shall have delivered
original counterparts thereof to the Administrative Agent.

            5.2.2 Closing Certificates; etc.

                  (a) Officers'  Certificates.  The  Administrative  Agent shall
      have received a certificate  from a Responsible  Officer on behalf of each
      Credit  Party,  in  form  and  substance  reasonably  satisfactory  to the
      Administrative   Agent,  to  the  effect  that  all   representations  and
      warranties of such Credit Party  contained in this Agreement and the other
      Loan  Documents are true and correct in all material  respects;  that such
      Credit Party is not in violation of any of the covenants contained in this
      Agreement and the other Loan Documents;  that,  after giving effect to the
      transactions  contemplated  by this  Agreement,  no  Default  or  Event of
      Default  has  occurred  and is  continuing;  and that each of the  closing
      conditions  has been  satisfied or waived  (assuming  satisfaction  of the
      Administrative Agent where not advised otherwise).

                  (b) General Certificates.  The Administrative Agent shall have
      received a certificate  of the secretary,  assistant  secretary or general
      counsel  of  each  Credit  Party  certifying  as  to  the  incumbency  and
      genuineness  of the  signature  of  each  officer  of  such  Credit  Party
      executing  Loan  Documents  to which  it is a party  and  certifying  that
      attached thereto is a true,  correct and complete copy of (A) the articles
      of  incorporation  of  such  Credit  Party  and  all  amendments  thereto,
      certified as of a recent date by the appropriate Governmental Authority in
      its jurisdiction of incorporation,  (B) the bylaws of such Credit Party as
      in effect on the date of such certifications, (C) resolutions duly adopted
      by the Board of Directors of such Credit Party authorizing, as applicable,
      the  borrowings  contemplated  hereunder and the  execution,  delivery and
      performance  of this Agreement and the other Loan Documents to which it is
      a party,  and (D) each  certificate  required to be delivered  pursuant to
      Section 5.2.2(c).

                  (c) Certificates of Good Standing.  The  Administrative  Agent
      shall have received long-form certificates as of a recent date of the good
      standing or active status, as applicable,  of the Credit Parties under the
      laws of their  respective  jurisdictions  of  organization  and short-form
      certificates  as of a recent  date of the good  standing  of the  Borrower
      under the laws of each other  jurisdiction where the Borrower is qualified
      to do  business  and  where a  failure  to be so  qualified  would  have a
      Material Adverse Effect.

                  (d) Opinions of Counsel.  The Administrative  Agent shall have
      received  opinions in form and substance  reasonably  satisfactory  to the
      Administrative  Agent  of the  Vice  President-Law  and  Secretary  of the
      Borrower  and  of  Hunton  &  Williams,  counsel  to the  Credit  Parties,
      addressed to the Administrative  Agent and the Lenders with respect to the
      Credit  Parties,  the  Loan  Documents  and  such  other  matters  as  the
      Administrative Agent shall reasonably request.

                                       44

            5.2.3 Consents; Defaults.

                  (a) Governmental and Third Party Approvals. The Borrower shall
      have obtained all approvals, authorizations and consents of any Person and
      of all Governmental  Authorities and courts having jurisdiction  necessary
      in order to enter into this  Agreement and the other Loan  Documents as of
      the Closing Date. Additionally, there shall not exist any judgment, order,
      injunction  or  other  restraint  issued  or filed  or a  hearing  seeking
      injunctive relief or other restraint  pending or notified  prohibiting the
      transactions  contemplated  by this Agreement and the other Loan Documents
      or otherwise referred to herein or therein.

                  (b) No Event of Default. No Default or Event of  Default shall
      have occurred and be continuing.

            5.2.4 No Material  Adverse  Effect.  Since December 31, 1999 nothing
shall have occurred (and neither the Administrative  Agent nor the Lenders shall
have become aware of any facts or conditions not previously known) which has had
a Material Adverse Effect.

            5.2.5 Financial Matters.

                  (a) Financial Statements.  The Administrative Agent shall have
      received  the Annual  Report on Form 10-K of the  Borrower  for the fiscal
      year ended as of December 31, 1999 and the  Quarterly  Report on Form 10-Q
      of the Borrower for the six month period ended as of June 30, 2000.

                  (b)  Payment  at  Closing.  The  Borrower  shall have paid any
      accrued and unpaid fees or commissions due hereunder  (including,  without
      limitation,  reasonable  legal fees and  expenses)  to the  Administrative
      Agent and  Lenders,  and to any  other  Person  such  amount as may be due
      thereto in connection with the transactions contemplated hereby, including
      all  taxes,  fees and other  charges  in  connection  with the  execution,
      delivery, recording, filing and registration of any of the Loan Documents.

            5.2.6 Litigation. Except as set forth in the Current SEC Reports, as
of the Closing Date, there shall be no actions, suits or proceedings pending or,
to the best  knowledge  of the  Borrower,  threatened  (i) with  respect to this
Agreement or any other Loan Document or (ii) which the  Administrative  Agent or
the Required  Lenders shall  reasonably  determine would have a Material Adverse
Effect.

            5.2.7   Termination  of  Prior  Bank  Commitment.   The  Prior  Bank
Commitment shall have been (or will be upon the initial borrowing  hereunder and
the application of the proceeds  thereof) (i) paid in full, (ii) the obligations
of  the  Borrower  thereunder  satisfied  and  the  commitment  of  the  lenders
thereunder  terminated  and (iii) either (A) all  outstanding  promissory  notes
issued by the Borrower with respect thereto canceled and the originally executed
copies thereof returned to the Borrower or the  Administrative  Agent (who shall
promptly  forward such notes to the  Borrower) or (B) the  Administrative  Agent
otherwise shall have received  evidence  satisfactory to it that such Prior Bank
Commitment has been terminated.

                                       45

      Section 5.3 Conditions to All Extensions of Credit.

            The  obligation  of each  Lender  to make any  Extension  of  Credit
hereunder  (including the initial  Extension of Credit to be made  hereunder) is
subject  to  the  satisfaction  of the  following  conditions  precedent  on the
relevant borrowing or issue date, as applicable:

            5.3.1   Continuation  of   Representations   and   Warranties.   The
representations and warranties contained in Article VI shall be true and correct
in all material  respects on and as of such  borrowing or issuance date with the
same effect as if made on and as of such date, except for any representation and
warranty made as of an earlier date,  which  representation  and warranty  shall
remain true and correct in all material respects as of such earlier date.

            5.3.2  No Existing  Default.  Immediately  after  the  making of the
requested  borrowing,  no Default or Event of Default shall have occurred and be
continuing  hereunder  (i) on the  borrowing  date with  respect to such Loan or
after  giving  effect  to the Loans to be made on such date or (ii) on the issue
date with  respect  to such  Letter of  Credit  or after  giving  effect to such
Letters of Credit on such date.

            5.3.3 Notice of Revolving Credit Borrowing. The Administrative Agent
shall have  received a Notice of Revolving  Credit  Borrowing  from the relevant
Borrower in accordance  with Section  2.2.1 and a Notice of Account  Designation
specifying the account or accounts to which the proceeds of any Loans made after
the Closing Date are to be disbursed.

The  occurrence  of the Closing Date and the  acceptance  by the Borrower of the
benefits of each Extension of Credit hereunder shall constitute a representation
and warranty by the Borrower to the Administrative Agent and each of the Lenders
that all the conditions specified in Sections 5.2 and 5.3 and applicable to such
borrowing have been  satisfied as of that time. All of the Notes,  certificates,
legal  opinions and other  documents and papers  referred to in Sections 5.2 and
5.3, unless otherwise specified,  shall be delivered to the Administrative Agent
for the account of each of the Lenders and,  except for the Notes, in sufficient
counterparts  or  copies  for  each of the  Lenders  and  shall  be in form  and
substance reasonably satisfactory to the Administrative Agent.

                                   ARTICLE VI

                         REPRESENTATIONS AND WARRANTIES

     Section 6.1 Representations and Warranties.

            To induce the  Administrative  Agent and  Lenders to enter into this
Agreement and to induce the Lenders to make  Extensions of Credit,  the Borrower
hereby represents and warrants to the Administrative Agent and Lenders that:

            6.1.1  Corporate  Existence.  The  Borrower  (a) is duly  organized,
validly  existing and in good standing under the laws of the jurisdiction of its
incorporation or formation; (b) has the requisite power and authority to own its
property  and  assets  and to carry on its  business  as now  conducted;  (c) is
qualified  to do  business in every  jurisdiction  where such  qualification  is
required,  except  where the  failure  so to  qualify  would not have a Material
Adverse  Effect;  and  (d)  has  all  Governmental  Approvals  required  by  any

                                       46

Applicable Law for it to conduct its business,  except where the failure to have
such Governmental Approvals would not have a Material Adverse Effect.

            6.1.2  Non-Contravention.  Each Credit Party has the corporate power
to execute and deliver and to perform its  obligations  under the Loan Documents
and to borrow hereunder. The execution, delivery, and performance by each of the
Credit  Parties  of the Loan  Documents  to which it is a party  have  been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the  shareholders of such Credit Party,  (ii) violate
any  provision of any law,  rule,  regulation  (including,  without  limitation,
Regulation T, U or X of the Board), order, writ, judgment,  injunction,  decree,
determination,  or award presently in effect having applicability to such Credit
Party or any  Restricted  Subsidiary  or of the charter or bylaws of such Credit
Party or any Restricted Subsidiary,  (iii) result in a breach of or constitute a
default under any indenture or loan or credit  agreement or any other agreement,
lease, or instrument to which such Credit Party or any Restricted  Subsidiary is
a party or by  which it or its  properties  may be  bound or  affected,  or (iv)
result in the  creation of a Lien of any nature  upon or with  respect to any of
the  properties  now owned or  hereafter  acquired by such  Credit  Party or any
Restricted  Subsidiary;  and each Credit Party and each Restricted Subsidiary is
not in  default  under  any such  order,  writ,  judgment,  injunction,  decree,
determination,  or award or any such indenture,  agreement, lease, or instrument
or in default under any such law, rule, or regulation,  which default would have
a Material Adverse Effect.

            6.1.3  No Consent. No  authorization,  consent,  approval,  license,
exemption of, or filing or registration  with, or any other action in respect of
any  Governmental  Authority  is or will be necessary  for the valid  execution,
delivery or performance by any Credit Party of the Loan Documents to which it is
a party.

            6.1.4  Execution  and  Delivery;   Binding  Obligations.   The  Loan
Documents  have been duly executed and  delivered by each Credit Party  thereto.
The Loan  Documents  constitute  legal,  valid,  and binding  obligations of the
Credit Parties  enforceable in accordance with their respective terms, except as
such  enforcement  may be limited  by  bankruptcy,  insolvency,  reorganization,
moratorium or similar  state or federal  debtor relief laws from time to time in
effect  which affect the  enforcement  of  creditors'  rights in general and the
availability of equitable remedies.

            6.1.5  Title  to  Properties.   The  Borrower  and  each  Restricted
Subsidiary  has good and  marketable  title to all of the  material  assets  and
properties owned by it, and valid leasehold interests in all material assets and
properties  leased  by it,  free  and  clear  of all  Liens  except  such as are
permitted  by  Section  9.2 and  except  for  covenants,  restrictions,  rights,
easements  and minor  irregularities  in title which do not  interfere  with the
occupation,  use and enjoyment by the Borrower or such Restricted  Subsidiary of
such  properties  and  assets in the  normal  course of  business  as  presently
conducted or materially impair the value thereof for such business.

            6.1.6  Subsidiaries.  Each  Subsidiary  of the Borrower is listed on
Schedule 6.1.6,  including the jurisdiction of organization,  classes of capital
stock,  ownership and ownership percentages thereof. All the outstanding capital
stock of the  Borrower's  Subsidiaries  shown in Schedule  6.1.6 hereto as being
owned by the Borrower or any of its  Subsidiaries  have been duly authorized and

                                       47

validly issued,  are fully paid and  nonassessable and are free and clear of any
Lien except as set forth on Schedule 9.2. No  Subsidiary  owns any capital stock
of the Borrower.  Each of the  Restricted  Subsidiaries  of the Borrower is duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its  organization;  and each  Restricted  Subsidiary (i) has the
requisite power and authority to own its property and assets and to carry on its
business  as  now  conducted,   (ii)  is  qualified  to  do  business  in  every
jurisdiction where such  qualification is required,  except where the failure so
to  qualify  would  not  have a  Material  Adverse  Effect  and  (iii)  has  all
Governmental  Approvals  required  by any  Applicable  Law for it to conduct its
business, except where the failure to have such Governmental Approvals would not
have a Material Adverse Effect.

            6.1.7 Financial Statements.

                  (a) The  consolidated  balance  sheet of the  Borrower and its
      Subsidiaries  as at  December  31,  1999,  and  the  related  consolidated
      statements  of  operations,  shareholders'  equity  and  cash  flow of the
      Borrower and its Subsidiaries for the fiscal year then ended, certified by
      KPMG  LLP,  independent  public  accountants,  copies  of which  have been
      delivered  to the  Lenders,  fairly  present  the  consolidated  financial
      condition  of the Borrower  and its  Subsidiaries  as at such date and the
      consolidated   results  of  the   operations   of  the  Borrower  and  its
      Subsidiaries for the period ended on such date, all prepared in accordance
      with GAAP applied on a consistent basis.

                  (b) The unaudited  consolidated  balance sheet of the Borrower
      and  its  Subsidiaries  as  at  June  30,  2000,  the  related   unaudited
      consolidated  statement of  operations  and cash flows of the Borrower and
      its Subsidiaries  for the fiscal quarter then ended,  copies of which have
      been delivered to the Lenders,  fairly present the consolidated  financial
      condition  of the Borrower  and its  Subsidiaries  as at such date and the
      consolidated   results  of  the   operations   of  the  Borrower  and  its
      Subsidiaries  for  the  period  ended  on such  date,  subject  to  normal
      recurring  year-end  adjustments,  all  prepared in  accordance  with GAAP
      (except for the  omission of notes)  applied on a  consistent  basis;  and
      there has been no material  adverse change in such condition or operations
      since December 31, 1999 that has had a Material Adverse Effect.

            6.1.8  Litigation.  There  are no  actions,  suits,  or  proceedings
pending  or, to the  knowledge  of a  Responsible  Officer of any Credit  Party,
threatened,  against  any  Credit  Party  or any  Restricted  Subsidiary  or the
properties  of  any  Credit  Party  or  any  Restricted  Subsidiary  before  any
Governmental  Authority or arbitrator that would have a Material Adverse Effect.
Neither any Credit  Party nor any  Restricted  Subsidiary  is in default (in any
respect  which would have a Material  Adverse  Effect)  with respect to any law,
rule, regulation,  order, writ, judgment,  injunction,  decree, determination or
award  presently in effect and  applicable to any Credit Party or any Restricted
Subsidiary.

            6.1.9 Taxes.  The Borrower and each Restricted  Subsidiary has filed
all material tax returns  (Federal,  state,  and local) required to be filed and
paid all taxes shown thereon to be due,  including  interest and  penalties,  or
provided adequate reserves, in accordance with GAAP, for the payment thereof.

                                       48

            6.1.10  ERISA.  Each Pension Plan  has  complied  with and  has been
administered  in  all  material  respects  in  accordance  with  the  applicable
provisions  of  ERISA  and the  Code.  No  Pension  Plan  has  terminated  under
circumstances giving rise to liability of the Borrower or any ERISA Affiliate to
the PBGC under  Section 4062,  4063 or 4064 of ERISA,  which  liability  remains
unpaid in whole or in part,  and no lien under Section 4068 of ERISA exists with
respect  to  the  assets  of  the  Borrower  or any  Restricted  Subsidiary.  No
Reportable  Event has  occurred  with  respect to any Pension  Plan,  except for
Reportable Events previously  disclosed in writing to the Lenders that would not
have a Material Adverse Effect.  No accumulated  funding  deficiency  within the
meaning  of  Section  302 of ERISA or Section  412 of the Code  (whether  or not
waived) exists with respect to any Pension Plan, nor does any lien under Section
302 of ERISA or Section 412 of the Code exist with respect to any Pension Plan.

            Neither the  Borrower  nor any ERISA  Affiliate  has  completely  or
partially withdrawn from any one or more Multiemployer Plans under circumstances
which would give rise to withdrawal  liability  which,  in the aggregate,  would
have a Material  Adverse Effect and which has not been fully paid as of the date
hereof.  Neither the Borrower nor any ERISA  Affiliate has received  notice that
any Multiemployer Plan is in reorganization  (within the meaning of Section 4241
of ERISA),  is insolvent  (within the meaning of Section 4245 of ERISA),  or has
terminated under Title IV of ERISA,  nor, to the best knowledge of the Borrower,
is any such  reorganization,  insolvency  or  termination  reasonably  likely to
occur, where such  reorganization,  insolvency or termination has resulted in an
increase in the contributions  required to be made to such Multiemployer Plan in
an amount that would have a Material  Adverse  Effect.  Neither the Borrower nor
any ERISA Affiliate has failed to make any contribution to a Multiemployer  Plan
which is required under ERISA or an applicable  collective  bargaining agreement
in an amount which is material in the aggregate (except to the extent there is a
good faith dispute as to whether any  contribution  is owed,  the amount owed or
the existence of facts that would give rise to a withdrawal).

            6.1.11  No  Default. No Default and no Event of Default has occurred
and is continuing.

            6.1.12  Federal Reserve Regulations.

                  (a) Neither the Borrower nor any Subsidiary of the Borrower is
      engaged  principally,  or as  one  of  its  important  activities,  in the
      business of  extending  credit for the purpose of  purchasing  or carrying
      Margin Stock.

                  (b) No part of the proceeds of the Loans will be used, whether
      directly  or  indirectly,   and  whether   immediately,   incidentally  or
      ultimately,  for any purpose  which  entails a  violation  of, or which is
      inconsistent  with,  the  provisions  of the  Regulations  of  the  Board,
      including, without limitation, Regulations T, U or X.

            6.1.13  Investment  Company  Act.  Neither  the  Borrower  nor   any
Subsidiary is an "investment  company" or a company controlled by an "investment
company"  as each  term is  defined  in the  Investment  Company  Act of 1940 or
subject to regulation thereunder.

                                       49

            6.1.14  Environmental  Matters.  In  the  ordinary  course  of   its
business, the Borrower conducts an ongoing review of the effect of Environmental
Laws and laws  relating  to  occupational  safety  and  health on the  business,
operations and properties of the Borrower and its Subsidiaries, in the course of
which it identifies and evaluates  associated  liabilities and costs  (including
any  capital  or  operating  expenditures  required  for  clean-up,  closure  or
restoration  of  properties  presently  or  previously  owned,  any  capital  or
operating   expenditures   required  to  achieve  or  maintain  compliance  with
environmental protection and occupational health and safety standards imposed by
law  or  as a  condition  of  any  license,  permit  or  contract,  any  related
constraints  on  operating  activities,  including  any  periodic  or  permanent
shutdown of any facility or reduction in the level of or change in the nature of
operations  conducted  thereat and any actual or potential  liabilities to third
parties,  including employees, and any related costs and expenses). On the basis
of  this  review,   the  Borrower   represents  and  warrants  that   applicable
Environmental  Laws and laws relating to occupational  health and safety do not,
and would not have a Material  Adverse Effect.  The Borrower and each Restricted
Subsidiary has obtained and holds all material  permits,  licenses and approvals
required  under  Environmental  Laws which are  necessary for the conduct of its
business  and  the  operation  of its  facilities,  and  the  Borrower  and  its
Restricted  Subsidiaries  have not received any written notice of any failure to
be in compliance  with the terms and  conditions  of such permits,  licenses and
approvals, which failure would have a Material Adverse Effect.

      Section 6.2 Accuracy and Completeness of Information.

            The financial statements referenced in Section 6.1.7, the  financial
statements  provided to the  Administrative  Agent pursuant to Sections 7.1.1(a)
and 7.1.1(b)  and the written  information  with  respect to the Credit  Parties
contained  in this  Agreement,  taken as a whole,  does not contain any material
misstatement  of fact or omit to state any material  fact  necessary to make the
statements  therein,  in light of the circumstances  under which such statements
were then made, not misleading.

      Section 6.3 Labor Matters.

            Neither any Credit Party nor any Restricted Subsidiary is engaged in
any unfair labor practice  under the National  Labor  Relations Act, as amended,
that would have a Material Adverse Effect. There is (a) no unfair labor practice
complaint  pending against any Credit Party or any Restricted  Subsidiary or, to
the knowledge of any Responsible Officer of any Credit Party, threatened against
any  Credit  Party or any  Restricted  Subsidiary,  before  the  National  Labor
Relations  Board,  except for any such  complaint that would not have a Material
Adverse  Effect;  (b) no strike,  labor  dispute,  slowdown or stoppage  pending
against any Credit Party or any  Restricted  Subsidiary  or, to the knowledge of
any Responsible Officer of any Credit Party, threatened against any Credit Party
or any  Restricted  Subsidiary,  except  for any  such  strike,  labor  dispute,
slowdown or stoppage that would not have a Material  Adverse Effect;  and (c) no
union representation question exists with respect to the employees of any Credit
Party or any Restricted Subsidiary,  except for any such question that would not
have a Material Adverse Effect.

                                       50

      Section 6.4 Survival of Representations and Warranties, Etc.

            All  representations and warranties set forth in this Article VI and
all representations and warranties  contained in any certificate related hereto,
or  any  of  the  Loan  Documents   (including  but  not  limited  to  any  such
representation or warranty made in or in connection with any amendment  thereto)
shall constitute  representations and warranties made under this Agreement.  All
representations  and  warranties  made  under  this  Article VI shall be made or
deemed to be made at and as of the Closing Date,  shall survive the Closing Date
and shall not be waived by the  execution  and delivery of this  Agreement,  any
investigation made by or on behalf of the Lenders or any borrowing hereunder.

                                   ARTICLE VII

                        FINANCIAL INFORMATION AND NOTICES

      Until  all  the  Obligations   (other  than   Obligations   under  Hedging
Agreements)  have been paid and  satisfied  in full and the later of the 364 Day
Facility  Termination Date or the Three Year Facility  Termination  Date, unless
consent has been obtained in the manner set forth in Section  13.10 hereof,  the
Borrower will:

      Section 7.1 Financial Statements, Etc.

            7.1.1 Furnish or cause to be furnished to the  Administrative  Agent
at its  address as set forth in  Section  13.1,  or such other  office as may be
designated in writing by the Administrative Agent from time to time:

                  (a) annually,  as soon as  available,  but in any event within
      120 days after the last day of each Fiscal  Year, a  consolidated  balance
      sheet of the  Borrower and its  Subsidiaries,  as at such last day of such
      Fiscal Year,  and  consolidated  statements of  operations,  shareholders'
      equity and cash flow for the Borrower and its Subsidiaries for such Fiscal
      Year,  each prepared in accordance  with GAAP, in reasonable  detail,  and
      audited  by KPMG LLP or any other  firm of  independent  certified  public
      accountants of recognized national standing and whose opinion shall not be
      qualified with respect to scope limitations imposed by the Borrower or any
      Subsidiary,  the status of the  Borrower and its  Subsidiaries  as a going
      concern or the  accounting  principles  followed  by the  Borrower  or any
      Subsidiary not in accordance with GAAP;

                  (b) as soon as  available,  but in any  event  within  60 days
      after the end of each of the first three fiscal quarterly  periods of each
      Fiscal  Year,  a  consolidated  balance  sheet  of the  Borrower  and  its
      Subsidiaries  as at the last day of such fiscal  quarter and  consolidated
      statements  of  operations  and  cash  flows  for  the  Borrower  and  its
      Subsidiaries for such fiscal quarter, and for the then current Fiscal Year
      through the end of such fiscal  quarter,  prepared in accordance with GAAP
      (except for omission of notes and subject to year-end adjustments);

                  (c) at the same time as it delivers the  financial  statements
      required under the provisions of clause (a) above, a certificate signed by

                                       51

      the chief financial officer or the chief executive officer of the Borrower
      to the effect that such  officer has made due inquiry and that to the best
      of the  knowledge of such officer  except as stated  therein no Default or
      Event of Default has occurred hereunder and that such officer has made due
      inquiry and that to the best of the  knowledge of such  officer  except as
      stated therein no default has occurred under any other  agreement to which
      the  Borrower  is a party or by which it is bound,  or by which any of its
      properties or assets may be affected,  which would have a Material Adverse
      Effect and specifying in reasonable detail the exceptions, if any, to such
      statements;

                  (d) at the same time as it delivers the  financial  statements
      required under the provisions of clauses (a) and (b) above, a statement of
      a  financial  officer  of the  Borrower  showing  the  Leverage  Ratio and
      Interest Coverage Ratio by reasonably  detailed  calculation thereof as of
      the last day of the  fiscal  period  to which  such  financial  statements
      relate;

                  (e) at the same time as it delivers the  financial  statements
      required under the provisions of clause (b) above, a certificate signed by
      a financial officer of the Borrower and stating that such officer has made
      due inquiry and that to the best of his  knowledge  no Default or Event of
      Default  has  occurred  and is  continuing,  or, if a Default  or Event of
      Default has occurred and is  continuing,  specifying the nature and extent
      thereof;

                  (f) at the same time as it delivers the  financial  statements
      required under the provisions of clauses (a) and (b) above, a statement of
      a financial officer of the Borrower showing the aggregate principal amount
      of Competitive  Bid Loans  outstanding  under the 364 Day Facility and the
      Three Year  Facility  as of the last day of the fiscal  period as to which
      such financial statements relate; and

                  (g)  immediately,  but in any event  within three (3) Business
      Days after a Responsible  Officer of any Credit Party obtains knowledge of
      the  occurrence of any Default or Event of Default,  a certificate  of the
      chief  financial  officer or the chief  executive  officer of the Borrower
      setting  forth the details  thereof and the action  which the  Borrower is
      taking or proposes to take with respect thereto.

            7.1.2 Keep,  and cause each  Restricted  Subsidiary to keep,  proper
books of  record  and  accounts  in which  full,  true and  correct  entries  in
accordance  with GAAP shall be made of all dealings or  transactions in relation
to its business and activities and the business and activities of its Restricted
Subsidiaries;

            7.1.3 Furnish, and cause each Restricted Subsidiary to furnish, with
reasonable  promptness  such  other  financial  information  as any  Lender  may
reasonably request,  provided that the Borrower shall not be required to furnish
any information that would result in violation of any confidentiality  agreement
by which it is bound but, at the request of a Lender,  shall use its  reasonable
best efforts to obtain a waiver of such  agreement to permit  furnishing of such
information under this provision;

                                       52

            7.1.4  Promptly  after  the  same  are  available,  furnish  or make
available copies of all current reports on Form 8-K,  quarterly  reports on Form
10-Q,  annual  reports  on Form  10-K (or  similar  corresponding  reports)  and
registration  statements or statements  which the Borrower or any Subsidiary may
be required  to file with the  Securities  and  Exchange  Commission  (excluding
registration  statements  filed  pursuant  to employee  stock  option or benefit
plans);

            7.1.5  Change in Debt Rating.  Within three (3) Business  Days after
any  Responsible  Officer of the Borrower  receives  notice of any change in the
Applicable  LT  Rating,  furnish  written  notice  of  such  change  and the new
Applicable LT Rating to the Administrative Agent.

            7.1.6 Furnish,  and cause each Restricted  Subsidiary to furnish, to
the Administrative Agent, as soon as reasonably practicable after receipt by the
Borrower or any Restricted Subsidiary,  a copy of any written notice or claim to
the effect  that the  Borrower  or any  Restricted  Subsidiary  is liable to any
Person as a result of the  presence  or release of any  Contaminant  which claim
would have a Material Adverse Effect.

      Section 7.2 Notice of Litigation and Other Matters.

            Promptly (but in no event later than three (3) Business Days after a
Responsible  Officer of any Credit  Party  obtains  knowledge  thereof)  furnish
telephonic (confirmed in writing) or written notice of:

            (a)  the   commencement   of  all   proceedings  by  or  before  any
      Governmental  Authority  and all actions and  proceedings  in any court or
      before any arbitrator  against any of the Credit Parties or any Restricted
      Subsidiary  thereof  or any of  their  respective  properties,  assets  or
      businesses  (i) which in the  reasonable  judgment  of the Credit  Parties
      would have a Material  Adverse  Effect,  (ii) with respect to any material
      Debt of the Credit  Parties  or any of their  Restricted  Subsidiaries  or
      (iii) with respect to any Loan Document;

            (b)  any  notice  of any  violation  received  by any of the  Credit
      Parties  or  any  Restricted  Subsidiary  thereof  from  any  Governmental
      Authority  including,  without  limitation,  any  notice of  violation  of
      Environmental Laws, which in the reasonable judgment of the Credit Parties
      in any such case would have a Material Adverse Effect; and

            (c) (i) any  unfavorable  determination  letter  from  the  Internal
      Revenue Service  regarding the  qualification  of an Employee Benefit Plan
      under Section  401(a) of the Code (along with a copy thereof)  which would
      have a Material  Adverse Effect,  (ii) all notices  received by any of the
      Credit  Parties or any ERISA  Affiliate of the PBGC's  intent to terminate
      any Pension Plan or to have a trustee  appointed to administer any Pension
      Plan, (iii) all notices received by any of the Credit Parties or any ERISA
      Affiliate from a Multiemployer  Plan sponsor  concerning the imposition or
      amount of  withdrawal  liability  pursuant to Section  4202 of ERISA which
      would have a Material  Adverse Effect,  (iv) the Credit Parties  obtaining
      knowledge or reason to know that the Credit Parties or any ERISA Affiliate
      has filed or intends to file a notice of intent to  terminate  any Pension

                                       53

      Plan under a distress termination within the meaning of Section 4041(c) of
      ERISA and (v) the occurrence of a Reportable Event.

                                  ARTICLE VIII

                              AFFIRMATIVE COVENANTS

      Until all of the Obligations (other than any Obligations under any Hedging
Agreement)  have  been  paid  and  satisfied  in full  and the 364 Day  Facility
Commitment  and  the  Three  Year  Facility  Commitment  have  expired  or  been
terminated,  unless  consent  has been  obtained in the manner  provided  for in
Section 13.10, the Borrower will:

      Section 8.1 Payment of Taxes, etc.

            Pay and discharge,  and cause each Restricted  Subsidiary to pay and
discharge,  all taxes,  assessments and  governmental  charges or levies imposed
upon it or upon its income or profits,  or upon any properties  belonging to it,
prior to the date on which  penalties  attach  thereto,  and all  lawful  claims
which,  if unpaid,  might  become a lien or charge  upon any  properties  of the
Borrower or any  Restricted  Subsidiary;  provided,  however,  that  neither the
Borrower nor any  Restricted  Subsidiary  shall be required to pay any such tax,
assessment,  charge, levy or claim which is being contested in good faith and by
proper  proceedings  and against which it is  maintaining  adequate  reserves in
accordance with GAAP.

      Section 8.2 Maintenance of Insurance.

            Maintain,   and  cause  each  Restricted   Subsidiary  to  maintain,
insurance with  responsible  and reputable  insurance  companies or associations
(or, to the extent  consistent with prudent business  practice,  through its own
program of self-insurance) in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general  areas in which the Borrower or such  Restricted  Subsidiary
operates.

      Section 8.3 Preservation of Corporate Existence, etc.

            Preserve  and  maintain,  and cause each  Restricted  Subsidiary  to
preserve and maintain,  its corporate existence and material rights,  franchises
and privileges;  provided,  however, that nothing herein contained shall prevent
any merger or consolidation  permitted by Section 9.3; and provided further that
the  Borrower  shall not be  required  to  preserve  or to cause any  Restricted
Subsidiary to preserve its corporate existence or any such rights, franchises or
privileges if the Borrower shall determine that the  preservation  thereof is no
longer  desirable  in the  conduct  of the  business  of the  Borrower  and  its
Restricted  Subsidiaries  taken as a whole  and that  the  loss  thereof  is not
disadvantageous  in any  material  respect to the  Borrower  and its  Restricted
Subsidiaries taken as a whole.

                                       54

      Section 8.4 Compliance with Laws, etc.

            Comply,  and cause each  Restricted  Subsidiary to comply,  with the
requirements of all applicable laws,  rules,  regulations and orders (other than
laws, rules, regulations, and orders which are not final and are being contested
in good faith by proper  proceedings) of any Governmental  Authority  (including
Labor  Laws and  Environmental  Laws),  noncompliance  with  which  would have a
Material Adverse Effect.

      Section 8.5 Compliance with ERISA.

            Comply,  and cause each of its  Restricted  Subsidiaries  to comply,
with the minimum funding standards under ERISA with respect to its Pension Plans
and use its best efforts,  and cause each Restricted  Subsidiary to use its best
efforts, to comply in all material respects with all other applicable provisions
of ERISA and the regulations and interpretations promulgated thereunder.

      Section 8.6 Compliance with Contracts, etc.

            Perform, and cause each Restricted Subsidiary to perform, all of its
obligations  under the terms of each mortgage,  indenture,  security  agreement,
loan  agreement  or credit  agreement  and each  other  agreement,  contract  or
instrument  by which it is bound,  except  where the  failure to do so would not
have a Material Adverse Effect.

      Section 8.7 Access to Properties.

            Permit,  and  cause  its  Restricted  Subsidiaries  to  permit,  any
representatives  designated  by the  Administrative  Agent or any  Lender,  upon
reasonable prior notice to the Borrower, to visit the properties of the Borrower
or any  Restricted  Subsidiary  at  reasonable  times and as often as reasonably
requested.

      Section 8.8 Conduct of Business.

            Engage in, and cause its Restricted  Subsidiaries to engage in, only
in those  businesses in which the Borrower and its Restricted  Subsidiaries  are
engaged on the  Closing  Date and such other  businesses  reasonably  related or
complementary  thereto or in furtherance  thereof, or in other lines of business
which are  insignificant  when viewed in the overall  context of the  businesses
then  engaged in by the  Borrower  and its  Restricted  Subsidiaries  taken as a
whole.

      Section 8.9 Use of Proceeds.

            Use the  proceeds of the Loans  solely for the purposes set forth in
Section 2.1.2.

      Section 8.10 Additional Guarantors.

            In the event  that any  Person  (other  than any  Subsidiary  of the
Borrower  existing on the Closing  Date)  becomes a  wholly-owned  (directly  or
indirectly)  Material Domestic  Subsidiary after the Closing Date pursuant to an

                                       55

acquisition  (whether of stock or assets) or a merger,  Borrower  shall,  within
thirty  (30) days  after the end of the  fiscal  quarter  in which  such  Person
becomes a Material Domestic Subsidiary,  cause such Material Domestic Subsidiary
to become a Guarantor by execution and delivery of a Guarantor Joinder Agreement
and by  delivery of such other  documentation  as the  Administrative  Agent may
reasonably  request in  connection  therewith,  including,  without  limitation,
certified   resolutions  of  such  Material   Domestic   Subsidiary,   certified
organizational and authorizing  documents of such Material Domestic  Subsidiary,
favorable opinions of counsel to such Material Domestic  Subsidiary (which shall
cover,  among  other  things,  the  legality,   validity,   binding  effect  and
enforceability of the Guarantor  Joinder  Agreement) and other items of the type
required to be delivered  pursuant to Section  5.2.2,  all in form,  content and
scope reasonably  satisfactory to the Administrative Agent;  provided,  however,
that no such Person which becomes a Material Domestic Subsidiary pursuant to any
such  acquisition  or merger  shall be  required  to become a  Guarantor  if the
incurrence of such obligation  would violate any material  agreement  binding on
such Person and in existence on the date of such acquisition or merger.

                                   ARTICLE IX

                               NEGATIVE COVENANTS

      Until all of the Obligations (other than any Obligations under any Hedging
Agreement)  have  been  paid  and  satisfied  in full  and the 364 Day  Facility
Commitment  and  the  Three  Year  Facility  Commitment  have  expired  or  been
terminated  unless  consent has been obtained in the manner set forth in Section
13.10, the Borrower will not:

      Section 9.1 Financial Covenants.

            9.1.1 Maximum  Leverage Ratio.  Commencing with the end of the first
fiscal  quarter  ending after the Closing Date,  permit the Leverage Ratio as of
the end of each fiscal quarter to be greater than 55%.

            9.1.2 Minimum  Interest  Coverage Ratio.  Commencing with the end of
the first  fiscal  quarter  ending after the Closing  Date,  permit the Interest
Coverage  Ratio as of the end of each  fiscal  quarter  to be less  than 3.00 to
1.00.

      Section 9.2 Limitations on Liens.

            Create,  incur,  assume or suffer to exist, or permit any Restricted
Subsidiary  to create,  incur,  assume or suffer to exist,  any Lien on, or with
respect to, any of their  assets or  properties  (including  without  limitation
shares of capital stock or other ownership interests), real or personal, whether
now owned or hereafter acquired, except:

            (a) Liens  existing   on   the   Closing   Date  and  set  forth  on
Schedule 9.2;

            (b) Liens for taxes,  assessments and other governmental  charges or
levies not yet due or as to which the period of grace,  if any,  related thereto

                                       56

has not expired or which are being  contested  in good faith and by  appropriate
proceedings if adequate reserves are maintained to the extent required by GAAP;

            (c) The claims of materialmen,  mechanics,  carriers,  warehousemen,
processors or landlords for labor,  materials,  supplies or rentals  incurred in
the ordinary course of business,  (i) which are not overdue for a period of more
than  thirty  (30) days or (ii) which are being  contested  in good faith and by
appropriate  proceedings  if  adequate  reserves  are  maintained  to the extent
required by GAAP;

            (d) Liens  consisting  of deposits or pledges  made in the  ordinary
course of business (i) in connection with, or to secure payment of,  obligations
under workers'  compensation,  unemployment  insurance or similar legislation or
obligations  under customer service  contracts,  or (ii) to secure (or to obtain
letters  of  credit  that  secure)  the   performance   of  tenders,   statutory
obligations,  surety  bonds,  appeal  bonds,  bids,  leases  (other than Capital
Leases), performance bonds, purchase,  construction or sales contracts and other
similar  obligations,  in each case not incurred or made in connection  with the
borrowing  of money,  the  obtaining of advances or credit or the payment of the
deferred purchase price of property;

            (e) Liens  constituting   encumbrances  in   the  nature  of  zoning
restrictions,  easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case,  detract from the value of any material  parcel of real property or
impair the use thereof in the ordinary conduct of business;

            (f) Liens in favor of the Administrative  Agent for the  benefit  of
the Administrative Agent and the Lenders;

            (g) Liens on the  property  or assets of any  Restricted  Subsidiary
existing at the time such Restricted Subsidiary becomes a Subsidiary of a Credit
Party and not  incurred in  contemplation  thereof,  as long as the  outstanding
principal  amount of the Debt secured  thereby is not  voluntarily  increased by
such Restricted  Subsidiary after the date such Restricted  Subsidiary becomes a
Subsidiary of such Credit Party;

            (h) Liens on the  property  or assets of the  Credit  Parties or any
Restricted Subsidiary securing Debt which is incurred to finance the acquisition
of such  property or assets,  provided  that (i) each such Lien shall be created
simultaneously  with,  or within twelve months  after,  the  acquisition  of the
related  property or assets;  (ii) each such Lien does not at any time  encumber
any property  other than the related  property or assets  financed by such Debt;
(iii) the principal  amount of Debt secured by each such Lien is not  increased;
and (iv) the principal amount of Debt secured by each such Lien shall at no time
exceed 100% of the original purchase price of such related property or assets at
the time acquired;

            (i) Liens  consisting  of  judgment or  judicial  attachment  Liens,
provided  that (i) the claims  giving  rise to such  Liens are being  diligently
contested in good faith by appropriate  proceedings,  (ii) adequate reserves for
the  obligations   secured  by  such  Liens  have  been  established  and  (iii)
enforcement of such Liens has been stayed;

                                       57

            (j) Liens  created or deemed to exist in  connection  with any asset
securitization   program   (including  any  related  filings  of  any  financing
statements),  but only to the  extent  that  such  Liens  attach  to the  assets
actually  sold,  contributed,  financed  or  otherwise  conveyed  or  pledged in
connection with such securitization program;

            (k) Liens on property or assets of the  Borrower or  any  Restricted
Subsidiary  securing  indebtedness  owing to the  Borrower  or any other  Credit
Party;

            (l) Liens  on  coal  reserves  leased  by  the  Borrower  or by  any
Restricted Subsidiary as lessee,  securing Debt to the lessors thereof,  arising
out of such leases;

            (m) Liens on any Margin Stock purchased or carried  by the  Borrower
or any of its Subsidiaries;

            (n) The  extension,  renewal or replacement of any Lien permitted by
clauses (a), (g), (h) or (l), but only if the  principal  amount of Debt secured
by the Lien  immediately  prior  thereto  is not  increased  and the Lien is not
extended to other property; and

            (o) In addition to any Lien  permitted  by clauses (a) through  (n),
immediately  after giving  effect to any  concurrent  repayment of secured Debt,
Liens securing Debt of the Borrower or any Restricted  Subsidiary so long as the
sum of (A) the aggregate  principal amount of all such secured Debt plus (B) the
aggregate amount of Consolidated  Lease Rentals  (excluding  Consolidated  Lease
Rentals  under  Leases in  effect  as of  December  31,  1999 (and any  renewal,
extension or replacement  thereof) and Leases with respect to property not owned
by the Borrower on such date), discounted to present value at ten percent (10%),
compounded annually, arising out of all Sale and Leaseback Transactions to which
the Borrower or any of its Restricted  Subsidiaries  is then a party  (including
Sale and Leaseback Transactions,  if any, entered into pursuant to Section 9.9),
does not exceed 10% of Consolidated Net Worth;

provided  that the sale or transfer of (i) coal,  oil, gas or other  minerals in
place for a period of time until, or in an amount such that, the transferee will
realize  therefrom  a  specified  amount  of  money  (however  determined)  or a
specified  amount of such coal or other  minerals or (ii) any other  interest in
property of the character  commonly referred to as a "production  payment" shall
not be deemed to constitute Debt secured by a Lien.

      Section 9.3  Disposition  of Debt and Shares of  Restricted  Subsidiaries;
Issuance  of  Shares  by  Restricted  Subsidiaries;   Consolidation,  Merger  or
Disposition of Assets.

            (a)  Sell  or  otherwise   dispose  of,  or  permit  any  Restricted
Subsidiary to sell or otherwise dispose of, any capital stock or any Debt of any
Restricted Subsidiary, other than the sale of the capital stock of any member of
the  Pittston  Minerals  Group,  (b) in the case of any  Restricted  Subsidiary,
issue, sell or otherwise dispose of any of such Restricted  Subsidiary's capital
stock (other than directors'  qualifying shares, to satisfy preemptive rights or
in  connection  with a split or  combination  of shares or a dividend in shares)
except to the Borrower or another Restricted Subsidiary, (c) liquidate,  wind-up
or dissolve  itself (or suffer any  liquidation or  dissolution),  or permit any
Restricted  Subsidiary to liquidate,  wind-up or dissolve  itself (or suffer any
liquidation  or  dissolution),  or (d)  directly  or  indirectly,  or permit any

                                       58

Restricted Subsidiary to directly or indirectly,  consolidate with or merge with
or into or sell, lease or otherwise  dispose of all or substantially  all of its
assets  (other  than the sale of all or any part of the  assets of any member of
the Pittston Minerals Group) to any Person, unless, after giving effect thereto,
all of the following conditions shall be met:

                  (i)   the Leverage Ratio shall not be  greater  than  0.55  to
      1.00 and the Interest Coverage Ratio shall not be less than 3.00 to 1.00;

                  (ii)  in the case of a  merger  or  consolidation,  (A) if the
      Borrower  is  a  party  thereto,  the  Borrower  shall  be  the  surviving
      corporation, (B) if the Borrower is not a party thereto and another Credit
      Party  is  a  party  thereto,  a  Credit  Party  shall  be  the  surviving
      corporation  and (C) if no Credit Party is a party  thereto,  a Restricted
      Subsidiary shall be the surviving corporation;

                  (iii) in the case of a liquidation, winding-up or dissolution,
      any Credit Party (other than the  Borrower) or any  Restricted  Subsidiary
      may  liquidate,  wind-up  or  dissolve  itself  into a  Credit  Party or a
      Restricted Subsidiary; and

                  (iv)  no  Default or  Event of  Default  has occurred  and  is
      continuing.

Provided  that the  conditions  of this Section 9.3 are  satisfied,  none of the
foregoing  provisions  shall be deemed to  prohibit  the  Borrower or any of its
Restricted  Subsidiaries  from  selling,  transferring,  assigning  or otherwise
disposing  of  Margin  Stock for fair  market  value or  selling,  contributing,
financing or otherwise conveying or pledging assets in connection with any asset
securitization program permitted by Section 9.2(j).

      Section 9.4 Transactions with Affiliates.

            Engage, or permit any Restricted  Subsidiary to engage,  directly or
indirectly,  in any transaction with an Affiliate (other than a Credit Party) on
terms  more  favorable  to the  Affiliate  than would  have been  obtainable  in
arm's-length dealing.

      Section 9.5 Compliance with Regulations T, U and X.

            In the case of the  Borrower  and any  Subsidiary  of the  Borrower,
purchase or carry any Margin Stock or incur, create or assume any obligation for
borrowed money or other liability or make any investment,  capital contribution,
loan,  advance or extension of credit or sell or otherwise dispose of any assets
or pay any dividend or make any other  distribution to its  shareholders or take
or permit to be taken any other  action or permit to occur or exist any event or
condition if such action, event or condition would result in this Agreement, the
Loans,  the use of the proceeds thereof or the other  transactions  contemplated
hereby violating Regulation T, U or X.

                                       59

      Section 9.6 Hedging Agreements.

            Enter into or permit to exist,  or permit any Restricted  Subsidiary
to enter  into or  permit  to  exist,  Hedging  Agreements  for the  purpose  of
speculation  and not for the  purpose  of  hedging  risks  associated  with  the
businesses of the Borrower and its Restricted Subsidiaries.

      Section 9.7 ERISA.

            (a)  Terminate,  or permit  any of its  Restricted  Subsidiaries  to
terminate, any Pension Plan under circumstances which would reasonably result in
a material  liability  of the Borrower or any ERISA  Affiliate  to the PBGC,  or
permit to exist the  occurrence  of any  Reportable  Event or any other event or
condition  which presents a material risk of such a termination by the PBGC; (b)
engage,  or permit any of its  Subsidiaries or any Pension Plan to engage,  in a
"prohibited  transaction" (within the meaning of Section 406 of ERISA or Section
4975 of the Code) that would  reasonably  result in  material  liability  of the
Borrower or any of its Restricted  Subsidiaries;  (c) fail, or permit any of its
Restricted  Subsidiaries  to fail, to make any  contribution  to a Multiemployer
Plan which is required by ERISA or an applicable collective bargaining agreement
in an amount  which is  material  (except  to the  extent  there is a good faith
dispute as to whether any contribution is owed, the amount owed or the existence
of facts that would give rise to a  withdrawal);  or (d) completely or partially
withdraw,  or  permit  any of  its  Restricted  Subsidiaries  to  completely  or
partially  withdraw,  from a  Multiemployer  Plan,  if such  complete or partial
withdrawal  will result in any material  withdrawal  liability under Title IV of
ERISA.  For purposes of this Section 9.7, an amount is material if it would have
a Material Adverse Effect after aggregation with all other liabilities described
in this Section 9.7.

      Section 9.8 Limitations on Acquisitions.

            Acquire, or permit any Restricted  Subsidiary to acquire, all or any
portion of the capital stock or other ownership  interest in any Person which is
not  then a  Restricted  Subsidiary  or all or any  substantial  portion  of the
assets,  property  and/or  operations of a Person which is not then a Restricted
Subsidiary, unless:

            (a) the  aggregate  consideration  paid  by  the  acquiror  in  such
transaction  does not exceed 10% of  Consolidated  Total Assets as of the end of
the Fiscal Year most recently ended; or

            (b) in the event that the aggregate  consideration to be paid by the
acquiror in such transaction  exceeds 10% of Consolidated Total Assets as of the
end of the Fiscal Year most recently ended, (i) the Borrower shall have notified
the  Administrative  Agent at least five Business Days prior to the consummation
thereof that such an acquisition is pending  (furnishing  with such  information
reasonably  acceptable  to the  Administrative  Agent  demonstrating  pro  forma
compliance  with the financial  covenants  set forth in Section  9.1),  and (ii)
after giving  effect to such  acquisition  on a pro forma  basis,  no Default or
Event of Default  would exist under  Section  9.1.  Any notice  delivered to the
Administrative  Agent pursuant to this Section 9.8 shall be kept confidential by
the Administrative Agent in accordance with Section 13.9.7 below.

                                       60

      Section 9.9 Sale Leaseback Transactions.

            Sell or transfer,  or permit any Restricted  Subsidiaries to sell or
transfer,  any  material  property  or  assets  owned  by  the  Borrower  or any
Restricted  Subsidiary  on the Closing Date to any Person (other than any Credit
Party) with the  intention of taking back a lease of such  property or assets or
any  similar  property or assets,  if the sum of (A) the amount of  Consolidated
Lease Rentals,  discounted to present value at 10%, compounded  annually,  which
would arise out of such proposed Sale and  Leaseback  Transaction,  plus (B) the
aggregate amount of Consolidated  Lease Rentals  (excluding  Consolidated  Lease
Rentals  under  Leases in  effect  as of  December  31,  1999 (and any  renewal,
extension or replacement  thereof) and Leases with respect to property not owned
by the Borrower on such date), discounted to present value at ten percent (10%),
compounded annually, arising out of all other Sale and Leaseback Transactions to
which the Borrower or any of its Restricted  Subsidiaries is then a party,  plus
(C) the aggregate principal amount of all Debt of the Borrower or any Restricted
Subsidiary secured by Liens incurred in reliance on Section 9.2(o), would exceed
10% of Consolidated Net Worth.

      Section 9.10  Limitations on Investments.

            Make or permit to exist, or permit any Restricted Subsidiary to make
or permit to exist, any Investment, other than Investments which are:

            (a)   cash and Cash Equivalents;

            (b)   current assets generated in the ordinary course of business;

            (c)   accounts receivable  created, acquired or made in the ordinary
course of business and payable or  dischargeable  in accordance  with  customary
trade terms;

            (d)   Investments  consisting   of   capital   stock,   obligations,
securities  or other  property  received in  settlement  of accounts  receivable
(created in the ordinary course of business) from bankrupt obligors;

            (e)   advances to employees for  moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business;

            (f)   advances or loans to directors, officers and employees that do
not exceed $25,000,000 in the aggregate at any one time outstanding;

            (g)   advances or loans to customers  and  suppliers in the ordinary
course of business in an aggregate  amount  consistent with the past practice of
the Person making such advance or loan;

            (h)   loans to shareholders  intended to constitute dividends on, or
payment on account of, any capital stock;

            (i)   Investments  or  Support  Obligations  by the Borrower and its
Restricted Subsidiaries existing on the Closing Date;

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            (j)   Investments by the Borrower or its Restricted Subsidiaries  in
any Credit Party or any other  Subsidiary  (provided that such Investment  would
not otherwise constitute a breach of Section 9.8);

            (k)   Support  Obligations  of  the  Borrower   or  its   Restricted
Subsidiaries for the benefit of any Credit Party or any other Subsidiary;

            (l)   acquisitions permitted by Section 9.8;

            (m)   Investments in connection with the management of Pension Plans
and other benefit plans of the Borrower and its Subsidiaries  (including without
limitation The Pittston Company Employee Welfare Benefit Trust);

            (n)   Hedging Agreements permitted by Section 9.6; and

            (o)   Investments of a  nature  not  contemplated  in the  foregoing
subsections in an amount not to exceed 10% of Consolidated Net Worth.

                                    ARTICLE X

                                     GUARANTY

      Section 10.1  Guaranty of Payment.

            Subject to Section 10.7 below, each Guarantor hereby unconditionally
guarantees to each Lender and the Administrative Agent the prompt payment of the
Guaranteed  Obligations  in full  when due  (whether  at stated  maturity,  as a
mandatory prepayment, by acceleration or otherwise). This guaranty is a guaranty
of payment and not solely of collection  and is a continuing  guaranty and shall
apply to all Guaranteed Obligations whenever arising.

      Section 10.2  Obligations Unconditional.

            The  obligations  of  the  Guarantors  hereunder  are  absolute  and
unconditional,  irrespective of the value, genuineness,  validity, regularity or
enforceability of this Agreement,  or any other agreement or instrument referred
to herein,  to the fullest extent  permitted by Applicable Law,  irrespective of
any other  circumstance  whatsoever which might otherwise  constitute a legal or
equitable  discharge or defense of a surety or guarantor.  Each Guarantor agrees
that this  guaranty may be enforced by the Lenders  without the necessity at any
time of resorting to or exhausting  any security or  collateral  and without the
necessity  at any time of having  recourse to the Notes,  this  Agreement or any
other Loan Document or any collateral, if any, hereafter securing the Guaranteed
Obligations or otherwise and each  Guarantor  hereby waives the right to require
the  Lenders  to  proceed  against  any  other  Guarantor  or any  other  Person
(including a co-guarantor)  or to require the Lenders to pursue any other remedy
or enforce any other right.  Each Guarantor further agrees that it shall have no
right of subrogation, indemnity, reimbursement or contribution against any other
Guarantor (or any other  guarantor of the  Guaranteed  Obligations)  for amounts
paid under this guaranty  until such time as the Lenders have been paid in full,

                                       62

all  commitments  under this  Agreement  have been  terminated  and no Person or
Governmental   Authority   shall  have  any  right  to  request  any  return  or
reimbursement of funds from the Lenders in connection with monies received under
this  Agreement.  Each Guarantor  further agrees that nothing  contained  herein
shall prevent the Lenders from suing on the Notes,  this  Agreement or any other
Loan Document or foreclosing its security interest in or Lien on any collateral,
if any, securing the Guaranteed  Obligations or from exercising any other rights
available to it under this  Agreement,  the Notes,  or any other  instrument  of
security,  if any,  and the  exercise  of any of the  aforesaid  rights  and the
completion of any  foreclosure  proceedings  shall not constitute a discharge of
any Guarantor's  obligations hereunder;  it being the purpose and intent of each
Guarantor that its  obligations  hereunder  shall be absolute,  independent  and
unconditional under any and all circumstances. Neither a Guarantor's obligations
under  this  guaranty  nor any  remedy  for the  enforcement  thereof  shall  be
impaired,  modified,  changed  or  released  in  any  manner  whatsoever  by  an
impairment,  modification, change, release or limitation of the liability of any
other  Guarantor  or by reason of the  bankruptcy  or  insolvency  of such other
Guarantor.  Each Guarantor  waives any and all notice of the creation,  renewal,
extension or accrual of any of the Guaranteed Obligations and notice of or proof
of reliance of by the  Administrative  Agent or any Lender upon this guaranty or
acceptance of this guaranty. The Guaranteed Obligations,  and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended,  amended or waived,  in  reliance  upon this  guaranty.  All  dealings
between the Borrower and the Guarantors, on the one hand, and the Administrative
Agent  and the  Lenders,  on the  other  hand,  likewise  shall be  conclusively
presumed to have been had or consummated in reliance upon this guaranty.

      Section 10.3  Modifications.

            Each Guarantor agrees that (a) all or any part of the security which
hereafter may be held for the Guaranteed Obligations,  if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect,  perfect, secure or insure any such security interests or
Liens which hereafter may be held, if any, for the Guaranteed Obligations or the
properties  subject thereto;  (c) the time or place of payment of the Guaranteed
Obligations  may be changed or extended,  in whole or in part, to a time certain
or otherwise,  and may be renewed or  accelerated,  in whole or in part; (d) the
Borrower  and any other party  liable for payment  under this  Agreement  may be
granted  indulgences  generally;  (e) any of the  provisions of the Notes,  this
Agreement or any other Loan Document may be modified, amended or waived; (f) any
party (including any co-guarantor) liable for the payment thereof may be granted
indulgences  or be released;  and (g) any deposit  balance for the credit of the
Borrower or any other party liable for the payment of the Guaranteed Obligations
or liable upon any security  therefor may be released,  in whole or in part, at,
before or after the stated,  extended or accelerated  maturity of the Guaranteed
Obligations,  all without notice to or further assent by such  Guarantor,  which
shall remain  bound  thereon,  notwithstanding  any such  exchange,  compromise,
surrender,  extension,  renewal,  acceleration,   modification,   indulgence  or
release.

      Section 10.4  Waiver of Rights.

            Each Guarantor  expressly  waives to the fullest extent permitted by
applicable  law: (a) notice of acceptance of this guaranty by the Lenders and of

                                       63

all  Extensions of Credit to the Borrower by the Lenders;  (b)  presentment  and
demand for payment or  performance  of any of the  Guaranteed  Obligations;  (c)
protest and notice of dishonor or of default (except as specifically required in
this  Agreement)  with respect to the Guaranteed  Obligations or with respect to
any  security  therefor;   (d)  notice  of  the  Lenders  obtaining,   amending,
substituting for,  releasing,  waiving or modifying any Lien, if any,  hereafter
securing   the   Guaranteed   Obligations,   or  the   Lenders'   subordinating,
compromising, discharging or releasing such Liens, if any; (e) all other notices
to which the  Borrower  might  otherwise  be  entitled  in  connection  with the
guaranty  evidenced  by this  Article X; and (f) demand for  payment  under this
guaranty.  Without  limiting the  generality of the  foregoing,  each  Guarantor
hereby specifically waives the benefits of N.C. Gen. Stat. Sections 26-7 through
26-9, inclusive, to the extent applicable.

      Section 10.5  Reinstatement.

            The  obligations  of each  Guarantor  under this  Article X shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or  must  be  otherwise  restored  by  any  holder  of  any  of  the  Guaranteed
Obligations,   whether  as  a  result  of  any   proceedings  in  bankruptcy  or
reorganization  or otherwise,  and each Guarantor  agrees that it will indemnify
the Administrative  Agent and each Lender on demand for all reasonable costs and
expenses  (including,  without  limitation,  reasonable  fees  and  expenses  of
counsel) incurred by the Administrative  Agent or such Lender in connection with
such rescission or restoration,  including any such costs and expenses  incurred
in  defending  against  any claim  alleging  that  such  payment  constituted  a
preference,  fraudulent  transfer  or  similar  payment  under  any  bankruptcy,
insolvency or similar law.

      Section 10.6  Remedies.

            Each Guarantor  agrees that, as between such  Guarantor,  on the one
hand,  and the  Administrative  Agent and the  Lenders,  on the other hand,  the
Guaranteed  Obligations  may be  declared  to be  forthwith  due and  payable as
provided in Section 11.2 (and shall be deemed to have become  automatically  due
and payable in the circumstances  provided in Section 11.2)  notwithstanding any
stay, injunction or other prohibition preventing such declaration (or preventing
such  Guaranteed  Obligations  from becoming  automatically  due and payable) as
against any other  Person and that,  in the event of such  declaration  (or such
Guaranteed  Obligations  being  deemed  to  have  become  automatically  due and
payable),  such  Guaranteed  Obligations  (whether or not due and payable by any
other Person) shall forthwith become due and payable by such Guarantor.

      Section 10.7  Limitation of Guaranty.

            Notwithstanding  any provision to the contrary  contained herein, to
the extent the  obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable  for any reason  (including,  without  limitation,  because of any
applicable state or federal law relating to fraudulent conveyances or transfers)
then the obligations of such Guarantor hereunder shall be limited to the maximum
amount that is permissible  under  Applicable Law (whether  federal or state and
including,   without  limitation,   the  Federal  Bankruptcy  Code  (as  now  or
hereinafter in effect)).

                                       64

      Section 10.8  Termination of Guaranty Upon Divestiture

            The  obligations  of  any  Guarantor  under  this  Article  X  shall
automatically  terminate as to such  Guarantor upon any  consolidation,  merger,
sale or other  disposition  made in  accordance  with Section 9.3 as a result of
which such Guarantor is no longer a Subsidiary of the Borrower immediately after
the  consummation  of  such  transaction.   For  the  avoidance  of  doubt,  the
obligations  of Pittston  Minerals  Group,  Inc. and Pittston Coal  Company,  as
Guarantors shall  automatically  terminate upon the sale of the capital stock of
any member of the Pittston  Minerals Group to a Person which is not an Affiliate
of the Borrower or the sale of all or any substantial  part of the assets of any
member of the Pittston Minerals Group to any such Person.

                                   ARTICLE XI

                              DEFAULT AND REMEDIES

      Section 11.1  Events of Default.

            Each of the following shall constitute an Event of Default, whatever
the reason for such event and whether it shall be voluntary or involuntary or be
effected by  operation  of law or pursuant to any judgment or order of any court
or any order, rule or regulation of any Governmental Authority or otherwise:

            11.1.1  Default  in Payment of  Principal of or  Interest or Fees on
Loans and Reimbursement Obligation. The Borrower shall default in any payment of
principal  of,  or any  interest  or fees on,  any Loan,  Note or  Reimbursement
Obligation  when and as due (whether at maturity,  by reason of  acceleration or
otherwise),  and such default shall  continue  unremedied for three (3) Business
Days.

            11.1.2  Other Payment Default.  The  Borrower shall default  in  the
payment  when and as due  (whether at  maturity,  by reason of  acceleration  or
otherwise)  of any  other  amounts  owing  on any  Loan,  Note or  Reimbursement
Obligation  or the payment of any other  Obligation  (other than any  Obligation
under any Hedging  Agreement),  and such default shall  continue  unremedied for
three (3) Business Days after  written  notice  thereof from the  Administrative
Agent or any Lender.

            11.1.3  Misrepresentation. Any representation, warranty or statement
made or  deemed  to be made by the  Borrower  under  this  Agreement,  any  Loan
Document or any amendment  hereto or thereto or in any certificate  delivered to
the Administrative Agent or to any Lender pursuant hereto and thereto,  shall at
any time  prove to have been  incorrect  in any  material  respect  when made or
deemed made.

            11.1.4  Default in Performance of Certain  Covenants.  The  Borrower
shall  default in the  performance  or  observance  of any covenant or agreement
contained in Section 9.1, 9.3, 9.5 or 9.8(b)(ii).

            11.1.5  Default  in  Performance of  Other Covenants and Conditions.
Any Credit Party shall default in the  performance or  observance of  any  term,

                                       65

covenant,  condition or agreement  contained  in this  Agreement  (other than as
specifically  provided for in Sections  11.1.1 through 11.1.4) or any other Loan
Document and such default shall  continue for a period of thirty (30) days after
the earlier of a Responsible  Officer of the Borrower having actual knowledge of
such  default or receipt by the  Borrower  of written  notice  thereof  from the
Administrative Agent or any Lender.

            11.1.6  Debt  Cross-Default.   The   Borrower   or   any  Restricted
Subsidiary  shall (a) default in the payment  when due,  beyond any grace period
permitted from time to time, of any Debt (other than Debt incurred by any Credit
Party under this Agreement) heretofore or hereafter issued, assumed, guaranteed,
contracted  or incurred by it, and the  aggregate  amount of such Debt equals or
exceeds  $25,000,000  (or  equivalent),   (b)  default  in  the  performance  or
observance  of any other  covenant or provision of any  agreement or  instrument
under or by which any Debt (other than Debt  incurred by any Credit  Party under
this Agreement) is created,  evidenced or secured, if the effect of such default
pursuant to this  clause (b) is to cause,  or to permit the holder or holders of
such Debt (or a trustee  on its or their  behalf) to cause,  and such  holder or
holders  or  trustees  does  cause,  such Debt to become due prior to its stated
maturity,  and the  aggregate  amount  of the Debt the  maturity  of which is so
accelerated  pursuant  to this  clause  (b) equals or  exceeds  $25,000,000  (or
equivalent), or (c) be required to prepay any Debt (other than (A) Debt incurred
by any Credit Party under this  Agreement,  (B) the  redemption of any preferred
stock classified as Debt pursuant to any mandatory redemption provision, and (C)
any conversion of Debt (including preferred stock classified as Debt) to capital
stock pursuant to any conversion  right or option) prior to the maturity thereof
other than by regularly  scheduled principal payments if the aggregate amount of
such Debt which is required to be prepaid equals or exceeds $25,000,000.

            11.1.7  Change in Control. A Change in Control shall have occurred.

            11.1.8  Voluntary  Bankruptcy Proceeding. Any Credit Party shall (i)
commence a voluntary case under the federal bankruptcy laws (as now or hereafter
in effect),  (ii) file a petition  seeking to take  advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition  for adjustment of debts,  (iii) consent to or fail to contest
in a  timely  and  appropriate  manner  any  petition  filed  against  it  in an
involuntary  case under such  bankruptcy  laws or other laws,  (iv) apply for or
consent  to,  or fail  to  contest  in a  timely  and  appropriate  manner,  the
appointment of, or the taking of possession by, a receiver,  custodian,  trustee
or liquidator of itself or of a  substantial  part of its property,  domestic or
foreign, (v) admit in writing its inability to pay its debts as they become due,
(vi) make a general  assignment for the benefit of creditors,  or (vii) take any
corporate action for the purpose of authorizing any of the foregoing.

            11.1.9  Involuntary   Bankruptcy   Proceeding.   A  case   or  other
proceeding shall be commenced against any Credit Party in any court of competent
jurisdiction  seeking (i) relief  under the federal  bankruptcy  laws (as now or
hereafter in effect) or under any other laws,  domestic or foreign,  relating to
bankruptcy, insolvency, reorganization, winding up or composition for adjustment
of debts, or (ii) the appointment of a trustee, receiver, custodian,  liquidator
or the like for any  Credit  Party or for all or any  substantial  part of their
respective  assets,  domestic  or  foreign,  and such case or  proceeding  shall
continue without  dismissal or stay for a period of sixty (60) consecutive days,
or an order granting the relief requested in such case or proceeding (including,

                                       66

but not  limited to, an order for relief  under such  federal  bankruptcy  laws)
shall be entered.

            11.1.10 [Intentionally Omitted.]

            11.1.11 Similar Events.  Any event occurs or any proceeding is taken
with  respect to any  Credit  Party in any  jurisdiction  to which it is subject
which has an effect  equivalent  or  similar  to any of the  events set forth in
Sections 11.1.8 or 11.1.9.

            11.1.12 Judgment. A judgment or order for the payment of money which
causes the aggregate  amount of all such judgments to exceed  $25,000,000 in any
Fiscal Year shall be entered  against the Borrower or any Restricted  Subsidiary
by any court and such judgment or order shall not,  within sixty (60) days after
entry thereof,  be bonded,  discharged or stayed pending appeal, or shall not be
discharged within sixty (60) days after the expiration of such stay.

            11.1.13 Guaranty.  At  any time  after the  execution  and  delivery
thereof,  the guaranty given by a Guarantor  hereunder or any provision  thereof
shall  cease to be in full  force or  effect  as to such  Guarantor,  except  as
provided in Sections 10.7 and 10.8, or such Guarantor or any Person acting by or
on behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under such guaranty.

            11.1.14 ERISA. An event described in each clause (i), (ii) and (iii)
below  shall have  occurred:  (i) any  Pension  Plan  shall fail to satisfy  the
minimum  funding  standard  required  for any plan  year or part  thereof  under
Section 412 of the Code or Section 302 of ERISA or a waiver of such  standard or
extension of any  amortization  period is sought or granted under Section 412 of
the Code or Section 303 or 304 of ERISA, a Reportable Event shall have occurred,
a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Pension
Plan  subject to Title IV of ERISA  shall be subject  to the  advance  reporting
requirement of PBGC Regulation  Section 4043.61  (without regard to subparagraph
(b)(1)  thereof) and an event  described in subsection .62 , .63, .64, .65, .66,
 .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with  respect to such Pension Plan within the  following  thirty (30) days,  any
Pension  Plan which is subject to Title IV of ERISA  shall have had or is likely
to have a trustee  appointed to administer  such Pension Plan,  any Pension Plan
which is  subject  to Title IV of ERISA is,  shall  have been or is likely to be
terminated  or to be the subject of  termination  proceedings  under ERISA,  any
Pension Plan shall have an Unfunded Current Liability,  a contribution  required
to be made with respect to a Pension Plan or a Foreign Pension Plan has not been
timely  made,  the  Credit  Parties  or any of their  Subsidiaries  or any ERISA
Affiliate has incurred or is likely to incur any liability to or on account of a
Pension Plan under Section 409,  502(i),  502(1),  515, 4062,  4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section  401(a)(29),  4971 or 4975 of the Code or
on  account of a group  health  plan (as  defined in Section  607(1) of ERISA or
Section  4980B(g)(2) of the Code) under Section 4980B of the Code, or the Credit
Parties  or any of  their  Subsidiaries  has  incurred  or is  likely  to  incur
liabilities  pursuant to one or more employee  welfare benefit plans (as defined
in Section  3(1) of ERISA) that provide  benefits to retired  employees or other
former  employees  (other  than as  required by Section 601 of ERISA) or Pension
Plans or Foreign  Pension Plans;  (ii) there shall result from any such event or
events the  imposition  of a lien,  the  granting  of a security  interest  or a
liability  or a  material  risk  of such a lien  being  imposed,  such  security
interest being granted or such liability  being  incurred,  and (iii) such lien,

                                       67

security  interest or liability,  individually,  and/or in the aggregate,  has a
Material Adverse Effect.

            11.1.15 Material    Adverse    Effect.    The    occurrence  of  any
circumstance,  development,  event or  condition  which has a  Material  Adverse
Effect.

      Section 11.2  Remedies.

            Upon the occurrence of an Event of Default,  with the consent of the
Required  Lenders,  the  Administrative  Agent may,  or upon the  request of the
Required Lenders,  the Administrative Agent shall, by notice to the Borrower and
each of the other Credit Parties:

            11.2.1  Acceleration:   Termination  of   Facilities.  Declare   the
principal  of and  interest  on the  Loans,  the  Notes  and  the  Reimbursement
Obligations at the time  outstanding,  and all other amounts owed to the Lenders
and to the  Administrative  Agent under this  Agreement or any of the other Loan
Documents (other than any Hedging Agreement) (including, without limitation, all
L/C  Obligations,  whether  or not the  beneficiaries  of the  then  outstanding
Letters of Credit shall have presented the documents  required  thereunder)  and
all  other   Obligations   (other  than  Obligations  owing  under  any  Hedging
Agreement),  to  be  forthwith  due  and  payable,   whereupon  the  same  shall
immediately become due and payable without presentment, demand, protest or other
notice  of any  kind,  all of  which  are  expressly  waived,  anything  in this
Agreement  or the other Loan  Documents  to the  contrary  notwithstanding,  and
terminate  the  Credit  Facility  and  any  right  of the  Borrower  to  request
borrowings or Letters of Credit thereunder;  provided,  that upon the occurrence
of an Event of Default  specified  in Sections  11.1.8,  11.1.9 or 11.1.11  with
respect to any of the Credit Parties, the Credit Facility shall be automatically
terminated and all Obligations  (other than obligations  owing under any Hedging
Agreement) shall automatically become due and payable.

            11.2.2  Letters  of Credit.  With  respect  to all Letters of Credit
with respect to which  presentment for honor shall not have occurred at the time
of an acceleration pursuant to the preceding paragraph,  require the Borrower at
such time to  deposit  or cause to be  deposited  in a cash  collateral  account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and  unexpired  amount of such  Letters  of  Credit.  Amounts  held in such cash
collateral account shall be applied by the  Administrative  Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof, if
any, remaining after all such Letters of Credit shall have expired or been fully
drawn upon shall be applied  to repay any other  unpaid  Obligations.  After all
such  Letters  of Credit  shall  have  expired or been  fully  drawn  upon,  the
Reimbursement  Obligations  shall have been satisfied and all other  Obligations
shall  have been paid in full,  the  balance,  if any,  in such cash  collateral
account shall be promptly returned to the Borrower.

            11.2.3  Rights of Collection.  Exercise on behalf of the Lenders all
of its other rights and remedies under this Agreement,  the other Loan Documents
and Applicable Law, in order to satisfy all of the Obligations.

                                       68

      Section 11.3 Rights and Remedies Cumulative; Non-Waiver; etc.

            The  enumeration  of the rights and  remedies of the  Administrative
Agent  and the  Lenders  set  forth  in this  Agreement  is not  intended  to be
exhaustive and the exercise by the  Administrative  Agent and the Lenders of any
right or remedy shall not preclude the exercise of any other rights or remedies,
all of which shall be cumulative, and shall be in addition to any other right or
remedy given  hereunder or under the Loan Documents or that may now or hereafter
exist in law or in equity or by suit or  otherwise.  No delay or failure to take
action on the part of the  Administrative  Agent or any Lender in exercising any
right,  power or  privilege  shall  operate as a waiver  thereof,  nor shall any
single or partial exercise of any such right,  power or privilege preclude other
or  further  exercise  thereof  or the  exercise  of any other  right,  power or
privilege  or shall be  construed  to be a waiver  of any Event of  Default.  No
course of dealing between the Credit Parties,  the Administrative  Agent and the
Lenders or their  respective  agents or employees  shall be effective to change,
modify or discharge  any  provision  of this  Agreement or any of the other Loan
Documents or to constitute a waiver of any Event of Default.

                                   ARTICLE XII

                            THE ADMINISTRATIVE AGENT

      Section 12.1  Appointment.

            Each of the Lenders hereby irrevocably  designates and appoints Bank
of America as  Administrative  Agent of such Lender under this Agreement and the
other  Loan  Documents  for the term  hereof  and each such  Lender  irrevocably
authorizes Bank of America as Administrative Agent for such Lender, to take such
action on its behalf under the  provisions of this  Agreement and the other Loan
Documents  and to exercise  such powers and perform such duties as are expressly
delegated to the  Administrative  Agent by the terms of this  Agreement and such
other  Loan  Documents,  together  with  such  other  powers  as are  reasonably
incidental  thereto.  Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents,  the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein,  or  any  fiduciary  relationship  with  any  Lender,  and  no  implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this  Agreement  or the other Loan  Documents  or  otherwise  exist
against the Administrative  Agent. Any reference to the Administrative  Agent in
this Article XII shall be deemed to refer to the Administrative  Agent solely in
its capacity as Administrative Agent and not in its capacity as a Lender.

      Section 12.2  Delegation of Duties.

            The  Administrative  Agent may execute any of its respective  duties
under this  Agreement  and the other  Loan  Documents  by or  through  agents or
attorneys-in-fact  and shall be  entitled  to advice of counsel  concerning  all
matters  pertaining  to such  duties.  The  Administrative  Agent  shall  not be
responsible for the negligence or misconduct of any agents or  attorneys-in-fact
selected by the Administrative Agent with reasonable care.

                                       69

      Section 12.3  Exculpatory Provisions.

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

      Section 12.4  Reliance by the Administrative Agent.

            The  Administrative  Agent shall be  entitled to rely,  and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message,  statement, order or other document or communications believed by it to
be  genuine  and  correct  and to have been  signed,  sent or made by the proper
Person or Persons and upon advice and  statements of legal  counsel  (including,
without limitation,  counsel to the Credit Parties), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent may
deem and  treat  the payee of any Note as the  owner  thereof  for all  purposes
unless such Note shall have been  transferred  in  accordance  with Section 13.9
hereof. The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement and the other Loan  Documents  unless it
shall first receive such advice or concurrence of the Required Lenders (or, when
expressly  required  hereby or by the  relevant  other  Loan  Document,  all the
Lenders)  as it deems  appropriate  or it  shall  first  be  indemnified  to its
satisfaction  by the Lenders against any and all liability and expense which may
be  incurred  by it by reason of taking or  continuing  to take any such  action
except for its own gross negligence or willful  misconduct.  The  Administrative
Agent shall in all cases be fully  protected in acting,  or in  refraining  from
acting,  under this Agreement and the Notes in accordance  with a request of the
Required Lenders (or, when expressly required hereby, all the Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.

      Section 12.5  Notice of Default.

            The  Administrative  Agent shall not be deemed to have  knowledge or
notice of the occurrence of any Default or Event of Default  hereunder unless it
has  received  notice  from a Lender or the  Credit  Parties  referring  to this
Agreement,  describing  such  Default or Event of Default and stating  that such
notice is a "notice  of  default."  In the event that the  Administrative  Agent

                                       70

receives such a notice,  it shall  promptly give notice  thereof to the Lenders.
The Administrative  Agent shall take such action with respect to such Default or
Event of  Default  as shall be  reasonably  directed  by the  Required  Lenders;
provided that unless and until the Administrative Agent shall have received such
directions,  the  Administrative  Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of  Default  as it shall  deem  advisable  in the  best  interests  of the
Lenders,  except to the extent that other provisions of this Agreement expressly
require  that any such action be taken or not be taken only with the consent and
authorization or the request of the Lenders or Required Lenders, as applicable.

      Section 12.6  Non-Reliance on the Administrative Agent and Other Lenders.

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

      Section 12.7  Indemnification.

            The  Lenders  agree to  indemnify  the  Administrative  Agent in its
capacity as such (to the extent not reimbursed by the Credit Parties and without
limiting any  obligation of the Credit Parties to do so),  ratably  according to
the  respective   amounts  of  their  Aggregate   Revolving  Credit   Commitment
Percentages  from and  against  any and all  liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including,  without limitation, at
any time following the payment of the Notes or any Reimbursement  Obligation) be
imposed on, incurred by or asserted against the Administrative  Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents  contemplated by or referred to herein or therein or the  transactions

                                       71

contemplated   hereby  or  thereby  or  any  action  taken  or  omitted  by  the
Administrative Agent under or in connection with any of the foregoing;  provided
that  no  Lender  shall  be  liable  for  the  payment  of any  portion  of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,   expenses  or   disbursements   to  the  extent  they  result  from  the
Administrative  Agent's bad faith, gross negligence or willful  misconduct.  The
agreements  in this  Section  12.7 shall  survive the payment of the Notes,  any
Reimbursement  Obligation  and  all  other  amounts  payable  hereunder  and the
termination of this Agreement.

      Section 12.8  The Administrative Agent in Its Individual Capacity.

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

      Section 12.9  Resignation  of   the   Administrative   Agent;    Successor
Administrative Agent.

            Subject to the appointment and acceptance of a successor as provided
below, the Administrative  Agent may resign at any time by giving notice thereof
to the Lenders and the Credit Parties.  Upon any such resignation,  the Required
Lenders shall have the right, subject to the approval of the Borrower so long as
no Default or Event of Default has occurred and is  continuing  (which  approval
will not be  unreasonably  withheld),  to appoint from among the other Lenders a
successor  Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required  Lenders and been approved by the Borrower (if
the  approval of the Borrower is required)  or have  accepted  such  appointment
within  thirty (30) days after the  Administrative  Agent's  giving of notice of
resignation,  then the Administrative Agent may appoint, subject to the approval
of the  Borrower so long as no Default or Event of Default has  occurred  and is
continuing  (which  approval  will not be  unreasonably  withheld),  a successor
Administrative  Agent, which successor shall have minimum capital and surplus of
at least $500,000,000 . Upon the acceptance of any appointment as Administrative
Agent   hereunder  by  a  successor   Administrative   Agent,   such   successor
Administrative  Agent  shall  thereupon  succeed to and become  vested  with all
rights, powers,  privileges and duties of the retiring Administrative Agent, and
the  retiring  Administrative  Agent  shall be  discharged  from its  duties and
obligations  hereunder.  After any retiring  Administrative  Agent's resignation
hereunder as  Administrative  Agent,  the  provisions of this Section 12.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.

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                                  ARTICLE XIII

                                  MISCELLANEOUS

      Section 13.1   Notices.

            13.1.1   Method of Communication.  Except  as  otherwise provided in
Article II, all notices and  communications  hereunder shall be in writing.  Any
notice shall be effective  if delivered by hand  delivery or sent via  telecopy,
recognized   overnight   courier  service  or  certified  mail,  return  receipt
requested,  and  shall  be  deemed  to have  been  delivered  (i) on the date of
delivery if delivered by hand,  (ii) on the Business Day of (or next  following)
transmission  when  transmitted or sent by telecopy,  (iii) on the next Business
Day after  delivery to a recognized  overnight  courier  service and (iv) on the
fifth  Business Day following the date sent by certified  mail,  return  receipt
requested.  A telephonic notice to the Administrative Agent as understood by the
Administrative  Agent will be deemed to be the  controlling and proper notice in
the event of a  discrepancy  with or  failure to  receive a  confirming  written
notice.

            13.1.2  Addresses  for  Notices.  Notices to any party shall be sent
to it at the following addresses, or any other address as to which all the other
parties are notified in writing.

      If to the Borrower:     The Pittston Company
                              1801 Bayberry Court
                              P. O. Box 18100
                              Richmond, VA  23226
                              Telephone:  (804) 289-9600
                              Telecopier: (804) 289-9770
                              Attention:  Treasurer

      If to the initial Guarantors:

            To the addresses set forth below their respective signatures on  the
signature pages hereto

      If to any subsequent Guarantors:

            To the address set forth in the related Guarantor Joinder Agreement

                                       73

      If to Bank of America as
      Administrative Agent:

                              Bank of America, N.A.
                              101 N. Tryon Street
                              Independence Center, 15th Floor
                              NC1-001-15-04
                              Charlotte, North Carolina  28255
                              Attn: Loretta Summers
                                    Agency Services
                              Telephone:  (704) 386-8958
                              Telecopy:   (704) 409-0022

      With a copy to:

                              Bank of America, N.A.
                              100 North Tryon Street, 17th Floor
                              Charlotte, North Carolina  28255
                              Attn: Michael J. McKenney
                              Telephone:  (704) 388-5920
                              Telecopy:   (704) 388-0960

      If to any Lender:

            To the address set forth on Schedule 13.1 hereto

            13.1.3  Administrative  Agent's  Office.  The  Administrative  Agent
hereby  designates  its office  located at the address set forth  above,  or any
subsequent  office which shall have been  specified  for such purpose by written
notice to the Credit  Parties and the  Lenders,  as the  Administrative  Agent's
Office  referred to herein,  to which  payments  due are to be made and at which
Loans will be disbursed.

      Section 13.2  Expenses, Indemnity.

            Each  party  to this  Agreement  agrees  to pay all its own fees and
expenses in connection  with the Loan Documents and any amendment,  modification
or waiver of the terms thereof;  provided,  however, that the Borrower agrees to
(a) pay all reasonable  out-of-pocket  expenses of the Administrative  Agent and
the Arranger in connection with (i) the  preparation,  execution and delivery of
this Agreement and each other Loan Document, whenever the same shall be executed
and  delivered,   including  without  limitation  the  reasonable  out-of-pocket
syndication and due diligence  expenses and reasonable fees and disbursements of
one counsel representing the Administrative Agent and (ii) where applicable, the
preparation,  execution and delivery of any waiver,  amendment or consent by the
Administrative  Agent, the Arranger or the Lenders relating to this Agreement or
any other  Loan  Document,  including  without  limitation  reasonable  fees and
disbursements of counsel  representing the Administrative Agent and the Lenders,
and (b) pay all reasonable  out-of-pocket  expenses of the Administrative Agent,

                                       74

the  Arranger  and  each  Lender  actually   incurred  in  connection  with  the
enforcement of any rights and remedies of the Administrative Agent, the Arranger
and the Lenders under the Credit Facility,  including,  to the extent reasonable
under  the  circumstances,  consulting  with  accountants,  attorneys  and other
Persons  concerning  the  nature,  scope or value of any  right or remedy of the
Administrative  Agent,  the Arranger or any Lender  hereunder or under any other
Loan Document or any factual  matters in connection  therewith,  which  expenses
shall include without  limitation the reasonable fees and  disbursements of such
Persons.   The   Borrower   hereby   indemnifies,   exonerates   and  holds  the
Administrative Agent, the Arranger and the Lenders, and each of their respective
Affiliates,  officers,  directors,  employees and agents (each an  "Indemnitee")
free and  harmless  from  and  against  any and all  losses,  penalties,  fines,
liabilities,  settlements,  damages,  costs  and  expenses  (including,  without
limitation,   reasonable   attorneys'   fees   and   disbursements,   reasonable
consultants'  fees  and  settlement  costs)   (collectively,   the  "Indemnified
Liabilities")   incurred  by  any  Indemnitee  in  connection  with  any  claim,
investigation, litigation or other proceeding (whether or not the Administrative
Agent,  the Arranger or any Lender is a party thereto) and the  prosecution  and
defense  thereof,  arising  out of or in  any  way  connected  with  the  Credit
Facility,  the Loans,  the Letters of Credit,  this  Agreement or any other Loan
Document or as a result of the breach of any of the Credit Parties'  obligations
hereunder,  except for any such Indemnified  Liabilities arising for the account
of a  particular  Indemnitee  by  reason  of  the  relevant  Indemnitee's  gross
negligence or willful  misconduct  as  determined  by a final and  nonappealable
decision  of a court of  competent  jurisdiction.  If and to the extent that the
foregoing  undertaking may be unenforceable for any reason,  the Borrower hereby
agrees to make the maximum  contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.

      Section 13.3  [Intentionally Omitted.]

      Section 13.4  Governing Law.

            This  Agreement,  the  Notes and the other  Loan  Documents,  unless
otherwise  expressly  set forth  therein,  shall be governed by,  construed  and
enforced in  accordance  with the laws of the State of North  Carolina,  without
giving effect to the conflict of law principles thereof.

      Section 13.5  Consent to Jurisdiction.

            Each  of the  parties  hereto  hereby  irrevocably  consents  to the
personal  jurisdiction  of the state and federal  courts  located in  Charlotte,
North  Carolina,  in any action,  claim or other  proceeding  arising out of any
dispute  in  connection  with this  Agreement,  the  Notes  and the  other  Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and  obligations.  Each of the parties hereto hereby  irrevocably
consents  to the  service of a summons and  complaint  and other  process in any
action, claim or proceeding brought by any other party hereto in connection with
this Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder,  or the performance of such rights and obligations,  on
behalf of itself or its  property,  in the manner  specified  in  Section  13.1.
Nothing in this Section 13.5 shall affect the right of any of the parties hereto
to serve legal process in any other manner permitted by Applicable Law or affect
the right of any of the parties hereto to bring any action or proceeding against
any  other  party  hereto  or  its   properties  in  the  courts  of  any  other
jurisdictions.

                                       75

      Section 13.6  Waiver of Jury Trial.

            THE  ADMINISTRATIVE  AGENT, EACH LENDER AND EACH CREDIT PARTY HEREBY
WAIVE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THEIR  RESPECTIVE  RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION,  CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY  DISPUTE  IN  CONNECTION  WITH THIS  AGREEMENT,  THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.

      Section 13.7  Reversal of Payments.

            To the extent any Credit  Party  makes a payment or  payments to the
Administrative   Agent  for  the   ratable   benefit  of  the   Lenders  or  the
Administrative  Agent receives any payment or proceeds of the  collateral  which
payments or proceeds or any part thereof are subsequently invalidated,  declared
to be fraudulent or  preferential,  set aside and/or  required to be repaid to a
trustee,  receiver or any other party under any bankruptcy law, state or federal
law,  common law or  equitable  cause,  then,  to the extent of such  payment or
proceeds repaid,  the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or proceeds
had not been received by the Administrative Agent.

      Section 13.8  Accounting Matters.

            Except  as  otherwise  expressly  provided  herein,  all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect  from  time  to  time,  provided  that,  if  the  Borrower  notifies  the
Administrative  Agent  that the  Credit  Parties  request  an  amendment  to any
provision  hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application  thereof on the operation of such provision
(or if the  Administrative  Agent  notifies the Credit Parties that the Required
Lenders  request  an  amendment  to any  provision  hereof  for  such  purpose),
regardless  of whether any such  notice is given  before or after such change in
GAAP or in the application thereof,  then such provision shall be interpreted on
the basis of GAAP as in effect and applied  immediately before such change shall
have  become  effective  until such  notice  shall have been  withdrawn  or such
provision amended in accordance therewith.

      Section 13.9  Successors and Assigns; Participations; Confidentiality.

            13.9.1  Benefit  of Agreement.  This Agreement shall be binding upon
and inure to the benefit of the Credit Parties,  the  Administrative  Agent, the
Arranger and the Lenders,  all future holders of the Notes, and their respective
successors  and permitted  assigns,  except that neither the Credit Parties nor,
except as permitted by Section 12.9,  the  Administrative  Agent shall assign or
transfer any of their rights or obligations under this Agreement.

            13.9.2  Assignment by Lenders. Each Lender may assign to one or more
Eligible  Assignees all or a portion of its  interests,  rights and  obligations
under this Agreement  (including,  without  limitation,  all or a portion of the
Extensions  of Credit at the time owing to it and the Note held by it)  provided
that:

                                       76

                  (a) each such  assignment  shall be of a  constant,  and not a
      varying,  percentage of all the  assigning  Lender's  Aggregate  Revolving
      Credit  Commitment  and  all  other  rights  and  obligations  under  this
      Agreement;

                  (b) except in the case of assignment  to another  Lender or to
      an  Affiliate  of the  assigning  Lender in which case  there  shall be no
      minimum,  if less than all of the assigning Lender's  Aggregate  Revolving
      Credit  Commitment  or Loans is to be assigned,  the  Aggregate  Revolving
      Credit  Commitment or Loans so assigned shall not be less than $10,000,000
      and the remaining  Aggregate  Revolving Credit Commitment of the assigning
      Lender shall not be less than $10,000,000 (or shall be zero);

                  (c) the  parties to each such  assignment  shall  execute  and
      deliver to the  Administrative  Agent, for its acceptance and recording in
      the  Register,  an  Assignment  and  Acceptance  in the form of  Exhibit G
      attached hereto (an "Assignment and Acceptance");

                  (d) such  assignment  shall not,  without  the  consent of the
      Borrower,  on behalf of itself and the other Credit  Parties,  require the
      Borrower, or any other Credit Party, to file a registration statement with
      the Securities and Exchange Commission or apply to or qualify the Loans or
      the Notes under the blue sky laws of any state; and

                  (e) the assigning Lender shall pay to the Administrative Agent
      an  assignment  fee of $3,500  upon the  execution  by such  Lender of the
      Assignment and Acceptance (including, but not limited to, an assignment by
      a Lender to another  Lender but  excluding an assignment by a Lender to an
      Affiliate of the assigning Lender).

Upon such  execution,  delivery,  acceptance and  recording,  from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least ten (10) Business Days after the  execution  thereof,  (A) the
assignee  thereunder  shall be a party hereto and, to the extent of the interest
assigned in such Assignment and Acceptance, have the rights and obligations of a
Lender hereby and (B) the Lender thereunder shall, to the extent of the interest
assigned  in such  assignment,  be  released  from its  obligations  under  this
Agreement.

            13.9.3  Rights  and  Duties  Upon   Assignment.   By  executing  and
delivering an Assignment and Acceptance, the assigning Lender thereunder and the
assignee  thereunder  confirm to and agree with each other and the other parties
hereto as set forth in such Assignment and Acceptance.

            13.9.4  Register. The Administrative Agent shall maintain a copy  of
each  Assignment  and  Acceptance  delivered  to  it  and  a  register  for  the
recordation  of the names and  addresses  of the  Lenders  and the amount of the
Extensions  of  Credit  with  respect  to each  Lender  from  time to time  (the
"Register").  No assignment  shall be effective  for purposes of this  Agreement
unless it has been recorded in the Register as provided in this  paragraph.  The
entries in the Register shall be conclusive,  in the absence of manifest  error,
and the Borrower,  the  Administrative  Agent,  the Arranger and the Lenders may
treat each person whose name is recorded in the  Register as a Lender  hereunder
for  all  purposes  of  this  Agreement.  The  Register  shall  be available for

                                       77

inspection  by the Borrower or Lenders at any  reasonable  time and from time to
time upon reasonable prior notice.

            13.9.5  Issuance  of  New   Notes,  Etc.  Upon  its  receipt  of  an
Assignment  and  Acceptance  executed  by an  assigning  Lender and an  Eligible
Assignee,  together  with any Note of such  assigning  Lender if such  Lender is
assigning all of its interests  hereunder,  and any required  written consent to
such  assignment,  the  Administrative  Agent  shall,  if  such  Assignment  and
Acceptance has been completed and is substantially in the form of Exhibit G:

                  (a)   accept such Assignment and Acceptance;

                  (b)   record   the  information   contained   therein  in  the
      Register;

                  (c)   give  prompt  notice  thereof  to  the  Lenders  and the
      Borrower, on behalf of itself and the other Credit Parties; and

                  (d)   promptly   deliver  a  copy   of  such   Assignment  and
      Acceptance to the Borrower.

Within ten (10)  Business  Days after  receipt of  notice,  the  Borrower  shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note (if  required  pursuant to this  Section),  a new Note to the order of such
Eligible Assignee (if it is not already a Lender).  Such new Note shall be dated
the effective date of such  Assignment and Acceptance and shall  otherwise be in
substantially  the form of the original Note delivered to the assigning  Lender.
Each surrendered Note shall be canceled and returned to the Borrower.

            13.9.6  Participations.  Each Lender may sell  participations to one
or more  banks  or other  entities  in all or a  portion  of its  rights  and/or
obligations  under  this  Agreement  (including,  without  limitation,  all or a
portion of its Extensions of Credit and the Notes held by it); provided that:

                  (a) each  such participation  shall be in an  amount  not less
      than $5,000,000;

                  (b) such Lender's obligations under this Agreement (including,
      without  limitation,  its Aggregate  Revolving  Credit  Commitment)  shall
      remain unchanged;

                  (c) such Lender shall remain solely responsible  to  the other
      parties hereto for the performance of such obligations;

                  (d) the Credit Parties, the Administrative Agent, the Arranger
      and the other Lenders shall continue to deal solely and directly with such
      Lender in connection with such Lender's rights and obligations  under this
      Agreement;

                  (e) such Lender shall not permit such participant the right to
      approve any waivers,  amendments or other  modifications to this Agreement
      or any other Loan Document other than waivers, amendments or modifications

                                       78

      which would reduce the principal of or the interest rate in respect of any
      Loan  or  Reimbursement  Obligation  in  which  such  participant  has  an
      interest,  extend the term or  increase  the amount of the  Commitment  in
      which such participant has an interest or reduce the amount of any fees to
      which such participant is entitled,  extend any scheduled payment date for
      principal, interest or fees on any Loan, or release any Guarantor from its
      guaranty  hereunder,  except as expressly  contemplated hereby or thereby;
      and

                  (f) any such disposition shall not, without the consent of the
      Borrower,  on behalf of itself and the other Credit  Parties,  require the
      Borrower or any other Credit Party,  to (A) file a registration  statement
      with the  Securities  and Exchange  Commission  or apply to or qualify the
      Revolving  Credit Loans or the  Revolving  Credit Notes under the blue sky
      law of any state or (B) have additional compensation requirements pursuant
      to Sections 4.8, 4.10 or 4.11.

            13.9.7  Disclosure  of  Information;  Confidentiality.  Each of  the
Administrative  Agent, the Issuing Lender and the Lenders agrees to maintain the
confidentiality  of the Information (as defined below),  except that Information
may be disclosed  (a) to its  Affiliates,  directors,  officers,  employees  and
agents,  including  accountants,  legal  counsel  and other  advisors  (it being
understood  that the Persons to whom such disclosure is made will be informed of
the  confidential  nature  of such  Information  and  instructed  to  keep  such
Information  confidential),  (b)  to the  extent  requested  by  any  regulatory
authority,  (c) to the extent  required by applicable  laws or regulations or by
any subpoena or similar legal process (after  providing  notice to the Borrower,
to the extent  practicable,  to permit an opportunity to seek a protective order
or  injunctive  relief),  (d) to any  other  party  to  this  Agreement,  (e) in
connection  with the exercise of any remedies  hereunder or any suit,  action or
proceeding  relating to this Agreement or the  enforcement of rights  hereunder,
(f) subject to an  agreement  containing  provisions  substantially  the same as
those of this Section,  to any assignee of or participant in, or any prospective
assignee  of or  participant  in,  any of its rights or  obligations  under this
Agreement, (g) with the prior written consent of the Borrower, (h) to the extent
such  Information  (i) becomes  publicly  available  other than as a result of a
breach of this Section by the disclosing party or (ii) becomes  available to the
Administrative  Agent,  the  Issuing  Lender or any Lender on a  nonconfidential
basis  from a source  other than the Credit  Parties  unless the  Administrative
Agent,  the Issuing Lender or such Lender,  as applicable,  has actual knowledge
that the disclosure of such  Information by such source  constituted a breach of
an obligation of such source to maintain  confidentiality of such Information or
(i) to Gold Sheets and other similar bank trade  publications,  such information
to  consist  of deal  terms and  other  information  (customarily  found in such
publications) upon the Borrower's prior review and approval. For the purposes of
this  Section,  "Information"  means all  information  received  from the Credit
Parties or any of their  Subsidiaries  relating  to the Credit  Parties or their
business,   other  than  any  such   information   that  is   available  to  the
Administrative  Agent,  the  Issuing  Lender or any Lender on a  nonconfidential
basis prior to disclosure by the Credit Parties. Any Person required to maintain
the  confidentiality  of  Information  as  provided  in this  Section  shall  be
considered  to have  complied  with its  obligation  to do so if such Person has
exercised  the same  degree  of care to  maintain  the  confidentiality  of such
Information as such Person would accord to its own confidential information.

                                       79

            13.9.8  Certain  Pledges  or  Assignments.   Nothing   herein  shall
prohibit any Lender from pledging or assigning  any Note to any Federal  Reserve
Bank in accordance with Applicable Law.

      Section 13.10  Amendments, Waivers and Consents.

            Except  as  set  forth  below,  any  term,  covenant,  agreement  or
condition of this Agreement or any of the other Loan Documents may be amended or
waived by the Lenders and any consent may be given by the Lenders,  if, but only
if,  such  amendment,  waiver or consent is in  writing  signed by the  Required
Lenders  (or by the  Administrative  Agent  with  the  consent  of the  Required
Lenders)  and  delivered  to the  Administrative  Agent  and,  in the case of an
amendment,  signed by the Credit Parties; provided, that no amendment, waiver or
consent shall, without the consent of each Lender affected thereby, (a) increase
the amount or extend the time of the  obligation of the Lenders to make Loans or
issue or participate in Letters of Credit (except as expressly  contemplated  by
Section 2.7 or Section 2.8), (b) extend the  originally  scheduled time or times
of payment of the principal of any Loan or Reimbursement  Obligation or the time
or times of payment of interest or fees on any Loan or Reimbursement Obligation,
(c) reduce the rate of  interest  or fees  payable on any Loan or  Reimbursement
Obligation,  (d)  reduce  the  principal  amount  of any  Loan or  Reimbursement
Obligation,  (e) permit any  subordination  of the  principal or interest on any
Loan or  Reimbursement  Obligation,  (f) permit any  assignment  (other  than as
specifically  permitted or  contemplated in this Agreement) of any of the Credit
Parties'  rights and obligations  hereunder,  (g) release any Guarantor from its
guaranty  hereunder  other  than upon the  disposition  by the  Borrower  of its
interest in such Guarantor in accordance with the terms of this Agreement or (h)
amend  the  provisions  of this  Section  13.10 or the  definition  of  Required
Lenders. In addition,  no amendment,  waiver or consent to the provisions of (i)
Article  XII shall be made  without the  written  consent of the  Administrative
Agent and (ii)  Article III shall be made  without  the written  consent of each
Issuing Lender.

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

      Section 13.11  Performance of Duties.

            The Credit Parties' obligations under this Agreement and each of the
Loan  Documents  shall be performed by the Credit Parties at their sole cost and
expense.

      Section 13.12  All Powers Coupled with Interest.

            All  powers of  attorney  and other  authorizations  granted  to the
Lenders,   the   Administrative   Agent  and  any  Persons   designated  by  the
Administrative  Agent or any Lender pursuant to any provisions of this Agreement

                                       80

or any of the other Loan Documents  shall be deemed coupled with an interest and
shall  be  irrevocable  so  long  as any of the  Obligations  remain  unpaid  or
unsatisfied or the Credit Facility has not been terminated.

      Section 13.13  Survival of Indemnities.

            Notwithstanding  any termination of this Agreement,  the indemnities
to which  the  Administrative  Agent  and the  Lenders  are  entitled  under the
provisions  of this Article XIII and any other  provision of this  Agreement and
the Loan Documents shall continue in full force and effect after the termination
of the Lenders' commitments hereunder and shall protect the Administrative Agent
and the Lenders against events arising after such termination as well as before,
including  after the Borrower's  acceptance of the Lenders'  commitments for the
Credit Facility, notwithstanding any failure of such facility to close.

      Section 13.14  Titles and Captions.

            Titles and captions of Articles,  Sections and  subsections  in this
Agreement are for convenience only, and neither limit nor amplify the provisions
of this Agreement.

      Section 13.15  Severability of Provisions.

            Any provision of this  Agreement or any other Loan Document which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be  ineffective  only to the  extent  of such  prohibition  or  unenforceability
without invalidating the remainder of such provision or the remaining provisions
hereof or thereof or affecting the validity or  enforceability of such provision
in any other jurisdiction.

      Section 13.16  Counterparts.

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

      Section 13.17  Binding   Effect;   Amendment  and  Restatement;  Term   of
Agreement.

            13.17.1 This  Agreement  shall become  effective at such time, on or
after the Closing Date,  that the conditions  precedent set forth in Section 5.2
have been  satisfied  or waived and when it shall have been  executed by each of
the Credit Parties and the Administrative  Agent, and the  Administrative  Agent
shall  have  received  copies  of  the  signature  pages  hereto  (telefaxed  or
otherwise)  which,  when taken  together,  bear the  signatures  of each  Lender
(including the Issuing  Lender),  and thereafter this Agreement shall be binding
upon and inure to the benefit of each Credit Party,  each Lender  (including the
Issuing  Lender) and the  Administrative  Agent,  together with their  permitted
successors and assigns.

            13.17.2 This Agreement  shall remain in effect from the Closing Date
through  and  including  the  date  upon  which  all  Obligations   (other  than

                                       81

obligations  owing by any Credit Party to any Lender or Affiliate of a Lender or
the   Administrative   Agent  under  any  Hedging  Agreement)  shall  have  been
indefeasibly  and irrevocably paid and satisfied in full. No termination of this
Agreement  shall affect the rights and obligations of the parties hereto arising
prior to such termination.

      Section 13.18  Inconsistencies with Other Documents; Independent Effect of
Covenants.

            13.18.1 In the event  there is a conflict or  inconsistency  between
this  Agreement and any other Loan Document,  the terms of this Agreement  shall
control,  provided,  that in the  event  there is a  conflict  or  inconsistency
between this Agreement and the letter agreement between the Administrative Agent
and the  Borrower  dated as of July 12, 2000  governing  certain  fees (the "Fee
Letter Agreement"),  which conflict or inconsistency  relates solely to a matter
affecting  (i) the  Administrative  Agent and/or its  Affiliates on one hand and
(ii) the Borrower on the other, the Fee Letter Agreement shall control.

            13.18.2 The  Borrower  expressly  acknowledges  and agrees that each
covenant  contained  in  Article  VIII  and  Article  IX  hereof  shall be given
independent effect.

                         [Signature pages to follow]

                                       82

      IN WITNESS  WHEREOF,  the parties hereto have caused their duly authorized
officers  to execute  and  deliver  this  Agreement  as of the date first  above
written.

BORROWER:               THE PITTSTON COMPANY,
                        a Virginia corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Vice President - Corporate Finance and Treasurer

GUARANTORS:             PITTSTON SERVICES GROUP, INC.,
                        a Virginia corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Vice President and Treasurer

                        Notice Address:
                        Pittston Services Group Inc.
                        1801 Bayberry Court
                        P.O. Box 18100
                        Richmond, Virginia 23226-8100
                        Attn: James B. Hartough, Vice President and Treasurer
                        Facsimile:  (804) 289-9760

                        PITTSTON MINERALS GROUP INC.,
                        a Virginia corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Vice President and Treasurer

                        Notice Address:
                        Pittston Minerals Group Inc.
                        1801 Bayberry Court
                        P.O. Box 18100
                        Richmond, Virginia 23226-8100
                        Attn: James B. Hartough, Vice President and Treasurer
                        Facsimile:  (804) 289-9760

                           [Signature Pages Continue]

                        PITTSTON COAL COMPANY,
                        a Delaware corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Vice President and Treasurer

                        Notice Address:
                        Pittston Coal Company
                        448 N.E. Main Street
                        Route 19
                        P.O. Box 5100
                        Lebanon, Virginia  24266
                        Attn: David C. Fields, Vice President and Chief
                              Financial Officer
                        Facsimile:  (540) 889-6060

                        BAX HOLDING COMPANY,
                        a Virginia corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Vice President and Treasurer

                        Notice Address:
                        BAX Holding Company
                        1801 Bayberry Court
                        P.O. Box 18100
                        Richmond, Virginia 23226-8100
                        Attn: James B. Hartough, Vice President and Treasurer
                        Facsimile:  (804) 289-9760

                        BAX GLOBAL INC.,
                        a Delaware corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Treasurer and Assistant Secretary

                        Notice Address:
                        BAX Global Inc.
                        16808 Armstrong Avenue
                        Irvine, California 92713
                        Attn: Daniel Crowley, Executive Vice President and
                              Chief Financial Officer
                        Facsimile:  (949) 260-2305

                           [Signature Pages Continue]

                        BRINK'S HOLDING COMPANY,
                        a Delaware corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Vice President and Treasurer

                        Notice Address:
                        Brink's Holding Company
                        1801 Bayberry Court
                        P.O. Box 18100
                        Richmond, Virginia  23226-8100
                        Attn:  James B. Hartough, Vice President and Treasurer
                        Facsimile: (804) 289-9760

                        BRINK'S, INCORPORATED,
                        a Delaware corporation

                        By:/s/
                           ---------------------------------
                        Name:  Michael T. Dan
                        Title: Chairman of the Board and Chief Executive Officer

                        Notice Address:
                        Brink's, Incorporated
                        One Thorndal Circle
                        Darien, Connecticut 06820-1225
                        Attn:  Christopher P. Corrini, Senior Vice President
                               and Chief Financial Officer
                        Facsimile: (203) 662-7854

                        BRINK'S HOME SECURITY, INC.,
                        a Delaware corporation

                        By:/s/
                           ---------------------------------
                        Name:  James B. Hartough
                        Title: Assistant Treasurer

                        Notice Address:
                        Brink's Home Security, Inc.
                        8880 Esters Boulevard
                        Irving, Texas  75063
                        Attn: Stephen C. Yevich, Senior Vice President -
                              Finance/Planning
                        Facsimile:  (972) 871-3307

                           [Signature Pages Continue]

LENDERS:                      BANK OF AMERICA, N.A.,
                              individually and as Administrative Agent

                              By:/s/
                                 ---------------------------------
                              Name:  Robert Mauriello
                              Title: Vice President

                              THE CHASE MANHATTAN BANK

                              By:/s/
                                 ---------------------------------
                              Name:  Sherry Misiak
                              Title: Vice President

                              FLEET NATIONAL BANK

                              By:/s/
                                 ---------------------------------
                              Name:  Jana Dombrowski
                              Title: Vice President

                              CREDIT SUISSE FIRST BOSTON

                              By:/s/
                                 ---------------------------------
                              Name:  Robert N. Finney    William S. Lutkins
                              Title: Managing Director   Vice President

                              THE BANK OF NOVA SCOTIA

                              By:/s/
                                 ---------------------------------
                              Name:  John Hopmans
                              Title: Managing Director

                              MELLON BANK, N.A.

                              By:/s/
                                 ---------------------------------
                              Name:  Edward L. McGrath
                              Title: First Vice President

                              FIRST UNION NATIONAL BANK

                              By:/s/
                                 ---------------------------------
                              Name:  Shannan S. Townsend
                              Title: Vice President

                                         [Signature Pages Continue]

                              BARCLAYS BANK PLC

                              By:/s/
                                 ---------------------------------
                              Name:  J. Davey
                              Title: Relationship Director

                              KBC BANK N.V.

                              By:/s/
                                 ---------------------------------
                              Name:  Jean-Pierre Diels
                              Title: First Vice President

                              By:/s/
                                 ---------------------------------
                              Name:  Patrick A. Janssens
                              Title: Vice President

                              BANK HAPOALIM B.M.

                              By:/s/
                                 ---------------------------------
                              Name:   Laura Anne Raffa       James P. Surless
                              Title:  First Vice President   Vice President
                                      & Corporate Manager

                              MALAYAN BANKING BERHAD

                              By:/s/
                                 ---------------------------------
                              Name:  Baharudin Abd. Majid
                              Title: General Manager

               5

This schedule contains summary  financial  information from The Pittston Company
Form 10Q for the nine months ended  September 30, 2000,  and is qualified in its
entirety by reference to such financial statements.

                              1,000

           9-MOS
                         DEC-31-2000
                              SEP-30-2000
                                         100,305
                                       115
                                  619,470
                                    36,972
                                     35,791
                               872,239
                                       1,629,317
                                 700,423
                               2,427,109
                          910,819
                                        271,940
                                        51,778
                                0
                                        214
                                     696,886
                 2,427,109
                                        290,118
                             3,107,565
                                          307,607
                                3,067,644
                                     0
                                15,885
                              32,690
                                 25,303
                                     8,350
                             16,953
                                       0
                                      0
                                            0
                                    16,953
                                       0.36
                                     0.34