<PAGE>   1
                                                                     EXHIBIT 3.1


================================================================================

                                     SECOND
                      AMENDED AND RESTATED CREDIT AGREEMENT

                          DATED AS OF NOVEMBER 24, 1998

                                      AMONG

                       SPECIALTY EQUIPMENT COMPANIES, INC.
                                       AND
                 SPECIALTY EQUIPMENT MANUFACTURING CORPORATION,
                                  AS BORROWERS,

             BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
                                    AS AGENT,


                       THE FIRST NATIONAL BANK OF CHICAGO,
                             AS DOCUMENTATION AGENT,

                           FIRST UNION NATIONAL BANK,
                              AS SYNDICATION AGENT,

                                       AND

                  THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO



                                   ARRANGED BY
                      NATIONSBANC MONTGOMERY SECURITIES LLC

================================================================================








<PAGE>   2




                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                                        Page

<S>               <C>                                                                                           <C>
ARTICLE 1         DEFINITIONS.....................................................................................1
         1.1      Certain Defined Terms...........................................................................1
         1.2      Other Interpretive Provisions..................................................................21
         1.3      Accounting Principles..........................................................................22

ARTICLE 2         THE CREDITS....................................................................................22
         2.1      Amounts and Terms of Commitments...............................................................22
         2.2      Loan Accounts..................................................................................22
         2.3      Procedure for Borrowing........................................................................23
         2.4      Conversion and Continuation Elections..........................................................24
         2.5      Voluntary Termination or Reduction of Commitments..............................................25
         2.6      Optional Prepayments...........................................................................25
         2.7      Repayment......................................................................................26
         2.8      Interest.......................................................................................26
         2.9      Fees...........................................................................................27
                  (a)      Arrangement, Agency Fees..............................................................27
                  (b)      Upfront Fees..........................................................................27
                  (c)      Commitment Fee........................................................................27
                  (d)      L/C Fees..............................................................................27
         2.10     Computation of Fees and Interest...............................................................28
         2.11     Payments by Borrowers..........................................................................28
         2.12     Payments by the Lenders to the Agent...........................................................29
         2.13     Sharing of Payments, Etc.......................................................................29
         2.14     Extension of Scheduled Termination Date: Substitution of Lenders...............................30
         2.15     Optional Increase in Commitments...............................................................31
         2.16     Swing Line Commitment..........................................................................32
         2.17     Borrowing Procedures for Swing Line Loans......................................................32
         2.18     Prepayment or Refunding of Swing Line Loans....................................................32
         2.19     Participations in Swing Line Loans.............................................................33
         2.20     Participation Obligations Unconditional........................................................33
         2.21     Conditions to Swing Line Loans.................................................................34
         2.22     Appointment of Borrower Representative.........................................................34

ARTICLE 3         THE LETTERS OF CREDIT..........................................................................34
         3.1      The Letter of Credit Subfacility...............................................................34
         3.2      Issuance, Amendment and Renewal of Letters of Credit...........................................36
         3.3      Risk Participations, Drawings and Reimbursements...............................................38
         3.4      Repayment of Participations....................................................................40
         3.5      Role of the Issuing Lender.....................................................................40
         3.6      Obligations Absolute...........................................................................41
         3.7      Cash Collateral Pledge.........................................................................42
         3.8      Uniform Customs and Practice...................................................................42
</TABLE>

                                        i



<PAGE>   3

<TABLE>
<S>               <C>                                                                                           <C>
ARTICLE 4         TAXES, YIELD PROTECTION AND ILLEGALITY.........................................................42
         4.1      Taxes..........................................................................................42
         4.2      Illegality.....................................................................................44
         4.3      Increased Costs and Reduction of Return........................................................44
         4.4      Funding Losses.................................................................................45
         4.5      Inability to Determine Rates...................................................................46
         4.6      Reserves on Offshore Rate Loans................................................................46
         4.7      Certificates of Lenders........................................................................47
         4.8      Substitution of Lenders........................................................................47
         4.9      Survival.......................................................................................47

ARTICLE 5         CONDITIONS PRECEDENT...........................................................................47
         5.1      Conditions of Initial Loans....................................................................47
                  (a)      Credit Agreement and Notes............................................................47
                  (b)      Resolutions; Incumbency...............................................................47
                  (c)      Organization Documents; Good Standing.................................................48
                  (d)      Legal Opinion.........................................................................48
                  (e)      Payment of Fees.......................................................................48
                  (f)      Certificate...........................................................................48
                  (g)      Other Documents.......................................................................48
         5.2      Conditions to All Loans........................................................................49
                  (a)      Notice; Application...................................................................49
                  (b)      Continuation of Representations and Warranties........................................49
                  (c)      No Existing Default...................................................................49

ARTICLE 6         REPRESENTATIONS AND WARRANTIES.................................................................49
         6.1      Corporate Existence and Power..................................................................49
         6.2      Corporate Authorization; No Contravention......................................................50
         6.3      Governmental Authorization.....................................................................50
         6.4      Binding Effect.................................................................................50
         6.5      Litigation.....................................................................................50
         6.6      No Default.....................................................................................51
         6.7      ERISA Compliance...............................................................................51
         6.8      Use of Proceeds; Margin Regulations............................................................52
         6.9      Title to Properties............................................................................52
         6.10     Taxes..........................................................................................52
         6.11     Financial Condition............................................................................52
         6.12     Environmental Matters..........................................................................52
         6.13     Regulated Entities.............................................................................53
         6.14     No Burdensome Restrictions.....................................................................53
         6.15     Copyrights, Patents, Trademarks and Licenses, etc..............................................53
         6.16     Subsidiaries...................................................................................53
         6.17     Insurance......................................................................................53
</TABLE>


                                       ii

<PAGE>   4

<TABLE>
<S>               <C>                                                                                           <C>
         6.18     Swap Obligations...............................................................................53
         6.19     Full Disclosure................................................................................53
         6.20     Subordinated Debt..............................................................................54
         6.21     Transfer of Operating Assets...................................................................54
         6.22     Year 2000 Compliance...........................................................................54

ARTICLE 7         AFFIRMATIVE COVENANTS..........................................................................54
         7.1      Financial Statements...........................................................................54
         7.2      Certificates; Other Information................................................................55
         7.3      Notices........................................................................................55
         7.4      Preservation of Corporate Existence, Etc.......................................................56
         7.5      Maintenance of Property........................................................................57
         7.6      Insurance......................................................................................57
         7.7      Payment of Obligations.........................................................................57
         7.8      Compliance with Laws...........................................................................58
         7.9      Compliance with ERISA..........................................................................58
         7.10     Inspection of Property and Books and Records...................................................58
         7.11     Environmental Laws.............................................................................58
         7.12     Use of Proceeds................................................................................58

ARTICLE 8         NEGATIVE COVENANTS.............................................................................58
         8.1      Limitation on Liens............................................................................59
         8.2      Negative Pledge Agreements.....................................................................60
         8.3      Disposition of Assets..........................................................................60
         8.4      Consolidations and Mergers.....................................................................61
         8.5      Loans and Investments..........................................................................61
         8.6      Limitation on Indebtedness.....................................................................62
         8.7      Transactions with Affiliates...................................................................63
         8.8      Use of Proceeds................................................................................63
         8.9      Contingent Obligations.........................................................................63
         8.10     Joint Ventures.................................................................................63
         8.11     Lease Obligations..............................................................................63
         8.12     Restricted Payments............................................................................64
         8.13     ERISA..........................................................................................64
         8.14     Change in Business.............................................................................65
         8.15     Accounting Changes.............................................................................65
         8.16     Amendment of Indenture.........................................................................65
         8.17     Consolidated Funded Debt to Cash Flow Ratio....................................................65
         8.18     Consolidated Interest Coverage Ratio...........................................................65

ARTICLE 9         EVENTS OF DEFAULT..............................................................................65
         9.1      Event of Default...............................................................................65
                  (a)      Non-Payment...........................................................................65
                  (b)      Representation or Warranty............................................................65
                  (c)      Specific Defaults.....................................................................65
</TABLE>



                                       iii
<PAGE>   5

<TABLE>
<S>                        <C>                                                                                  <C>
                  (d)      Other Defaults........................................................................65
                  (e)      Cross-Default.........................................................................66
                  (f)      Insolvency; Voluntary Proceedings.....................................................66
                  (g)      Involuntary Proceedings...............................................................66
                  (h)      ERISA.................................................................................66
                  (i)      Monetary Judgments....................................................................67
                  (j)      Non-Monetary Judgments................................................................67
                  (k)      Change of Control.....................................................................67
                  (l)      Loss of Licenses......................................................................67
                  (m)      Invalidity of Subordination Provisions................................................67
         9.2      Remedies.......................................................................................67
         9.3      Rights Not Exclusive...........................................................................68

ARTICLE 10        THE AGENT......................................................................................68
         10.1     Appointment and Authorization; "Agent".........................................................68
         10.2     Delegation of Duties...........................................................................69
         10.3     Liability of Agent.............................................................................69
         10.4     Reliance by Agent..............................................................................70
         10.5     Notice of Default..............................................................................70
         10.6     Credit Decision................................................................................70
         10.7     Indemnification of Agent.......................................................................71
         10.8     Agent in Individual Capacity...................................................................71
         10.9     Successor Agent................................................................................71
         10.10    Withholding Tax................................................................................72
         10.11    Documentation Agent............................................................................73
         10.12    Syndication Agent..............................................................................73

ARTICLE 11        MISCELLANEOUS..................................................................................74
         11.1     Amendment and Restatement; Amendments and Waivers..............................................74
         11.2     Notices........................................................................................75
         11.3     No Waiver; Cumulative Remedies.................................................................76
         11.4     Costs and Expenses.............................................................................76
         11.5     Borrowers' Indemnification.....................................................................76
         11.6     Payments Set Aside.............................................................................77
         11.7     Successors and Assigns.........................................................................77
         11.8     Assignments, Participations, etc...............................................................77
         11.9     Confidentiality................................................................................79
         11.10    Set-off........................................................................................79
         11.11    Automatic Debits of Fees.......................................................................80
         11.12    Notification of Addresses, Lending Offices, Etc................................................80
         11.13    Counterparts...................................................................................80
         11.14    Severability...................................................................................80
         11.15    No Third Parties Benefited.....................................................................80
         11.16    Designated Senior Indebtedness.................................................................80
         11.17    Governing Law and Jurisdiction.................................................................80
         11.18    Waiver of Jury Trial...........................................................................81
         11.19    Joint and Several Liability....................................................................81
         11.20    Entire Agreement...............................................................................81
</TABLE>


                                       iv

<PAGE>   6



                             SCHEDULES AND EXHIBITS

<TABLE>
<CAPTION>
    SCHEDULES

<S>                             <C>                           
    Schedule 2.1                Commitments
    Schedule 3.1                Outstanding Letters of Credit
    Schedule 6.5                Litigation
    Schedule 6.7                ERISA
    Schedule 6.11               Permitted Liabilities
    Schedule 6.12               Environmental Matters
    Schedule 6.16               Subsidiaries and Minority Interests
    Schedule 6.17               Insurance Matters
    Schedule 8.1                Permitted Liens
    Schedule 8.6                Permitted Indebtedness
    Schedule 8.7                Transactions With Affiliates
    Schedule 8.9                Contingent Obligations
    Schedule 11.2               Lending Offices; Addresses for Notices

    EXHIBITS

    Exhibit A                   Form of Notice of Borrowing
    Exhibit B                   Form of Notice of Conversion/Continuation
    Exhibit C                   Form of Notice of Swing Line Loan
    Exhibit D                   Form of Compliance Certificate
    Exhibit E                   Form of Legal Opinion of Borrowers' Counsel
    Exhibit F                   Form of Assignment and Acceptance
    Exhibit G                   Form of Promissory Note
    Exhibit H                   Form of Request for Extension of Termination Date
    Exhibit I                   Form of Request for Increase in Commitments
</TABLE>


                                        v

<PAGE>   7




                                     SECOND
                      AMENDED AND RESTATED CREDIT AGREEMENT


         This SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is
entered into as of November 24, 1998, among SPECIALTY EQUIPMENT COMPANIES, INC.,
a Delaware corporation ("Holding Co."), and its Wholly-Owned Subsidiary,
SPECIALTY EQUIPMENT MANUFACTURING CORPORATION, a Delaware corporation
("Operating Co.") (Holding Co. and Operating Co. sometimes collectively referred
to herein as "Borrowers", and individually as "Borrower"), the several financial
institutions from time to time party to this Agreement (collectively, the
"Lenders", and individually, a "Lender"), and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as agent for the Lenders.

         WHEREAS, Borrowers, the financial institutions named therein, and the
Agent entered into that certain Amended and Restated Credit Agreement, dated as
of January 31, 1998, (the "Existing Credit Agreement");

         WHEREAS, Borrowers desire to increase the credit facility provided
under the Existing Credit Agreement and to make certain other amendments to the
terms and provisions of the Existing Credit Agreement;

         NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, and of any loans or extensions of credit
heretofore, now or hereafter made to or for the benefit of Borrowers by the
Lenders, the parties hereto hereby amend and restate the Existing Credit
Agreement as follows:


                                    ARTICLE 1

                                   DEFINITIONS

         1.1 CERTAIN DEFINED TERMS. The following terms have the following
         meanings:

                  "ACQUISITION" means any transaction or series of related
         transactions for the purpose of or resulting, directly or indirectly,
         in (a) the acquisition of all or substantially all of the assets of a
         Person, or of any business or division of a Person, (b) the acquisition
         of in excess of 50% of the capital stock, partnership interests,
         membership interests or equity of any Person, or otherwise causing any
         Person to become a Subsidiary, or (c) a merger or consolidation or any
         other combination with another Person (other than a Person that is a
         Subsidiary) provided that Borrower or the Subsidiary is the surviving
         entity.


<PAGE>   8


                  "AFFILIATE" means, as to any Person, any other Person which,
         directly or indirectly, is in control of, is controlled by, or is under
         common control with, such Person. A Person shall be deemed to control
         another Person if the controlling Person possesses, directly or
         indirectly, the power to direct or cause the direction of the
         management and policies of the other Person, whether through the
         ownership of voting securities, membership interests, by contract, or
         otherwise.

                  "AGENT" means BA in its capacity as agent for the Lenders
         hereunder, and any successor agent arising under Section 10.9.

                  "AGENT-RELATED PERSONS" means BA and any successor agent
         arising under Section 10.9, together with their respective Affiliates,
         and the officers, directors, employees, agents and attorneys-in-fact of
         such Persons and Affiliates.

                  "AGENT'S PAYMENT OFFICE" means the address for payments set
         forth on Schedule 11.2 or such other address as the Agent may from time
         to time specify.

                  "AGREEMENT" means this Second Amended and Restated Credit 
         Agreement.

                  "APPLICABLE COMMITMENT FEE PERCENTAGE" shall mean, for any
         Fiscal Quarter, the percentage set forth below opposite the
         Consolidated Funded Debt to Cash Flow Ratio as of the last day of the
         preceding Fiscal Quarter:


<TABLE>
<CAPTION>
           ------------------------------------------------------------------------ --------------------------------
                                  Consolidated Funded Debt                               Applicable Commitment
                                     to Cash Flow Ratio                                      Fee Percentage
           ------------------------------------------------------------------------ --------------------------------
<S>                                                                                             <C>   
           equal to or greater than 3.0 to 1.0                                                  0.300%
           ------------------------------------------------------------------------ --------------------------------
           less than 3.0 to 1.0,                                                                0.300%
           but equal to or greater than 2.5 to 1.0
           ------------------------------------------------------------------------ --------------------------------
           less than 2.5 to 1.0                                                                 0.250%
           but equal to or greater than 2.0 to 1.0

           less than 2.0 to 1.0                                                                 0.200%
           but equal to or greater than 1.5 to 1.0

           less than 1.5 to 1.0                                                                 0.175%
           ------------------------------------------------------------------------ --------------------------------
</TABLE>


         For purposes of the foregoing, the Applicable Commitment Fee Percentage
         at any time shall be determined by reference to the Consolidated Funded
         Debt to Cash Flow Ratio as of the last day of the most recently ended
         Fiscal Quarter and any change in the Applicable Commitment Fee
         Percentage shall become effective for all purposes five Business Days
         following receipt by Agent of the certificate and applicable financial
         statements described in Sections 7.1(a), 7.1(b) and 7.2(b).
         Notwithstanding the foregoing, at any time during which 




                                       2
<PAGE>   9


          Borrowers have failed to deliver the certificate and applicable
          financial statements described in Sections 7.1(a), 7.1(b) and 7.2(b)
          with respect to a Fiscal Quarter in accordance with the provisions
          thereof, for more than ten Business Days after such certificate and
          the applicable financial statements were due, the Consolidated Funded
          Debt to Consolidated Cash Flow Ratio shall be deemed, solely for
          purposes of this definition, to be equal to or greater than 3.0 to 1.0
          until such certificate and the applicable financial statements are
          delivered.

                  "APPLICABLE L/C FEE PERCENTAGE" shall mean, for any Fiscal
          Quarter, the percentage set forth below opposite the Consolidated
          Funded Debt to Cash Flow Ratio as of the last day of the preceding
          Fiscal Quarter:

<TABLE>
<CAPTION>
           -------------------------------------------------------------------------- ------------------------------
                                   Consolidated Funded Debt                                  Applicable L/C
                                      to Cash Flow Ratio                                     Fee Percentage
           -------------------------------------------------------------------------- ------------------------------
<S>                                                                                              <C>   
           equal to or greater than 3.0 to 1.0                                                   1.500%
           -------------------------------------------------------------------------- ------------------------------
           less than 3.0 to 1.0,                                                                 1.250%
           but equal to or greater than 2.5 to 1.0
           -------------------------------------------------------------------------- ------------------------------
           less than 2.5 to 1.0                                                                  1.000%
           but equal to or greater than 2.0 to 1.0

           less than 2.0 to 1.0                                                                  0.875%
           but equal to or greater than 1.5 to 1.0

           less than 1.5 to 1.0                                                                  0.750%
           -------------------------------------------------------------------------- ------------------------------
</TABLE>

         For purposes of the foregoing, the Applicable L/C Fee Percentage at any
         time shall be determined by reference to the Consolidated Funded Debt
         to Cash Flow Ratio as of the last day of the most recently ended Fiscal
         Quarter and any change in the Applicable L/C Fee Percentage shall
         become effective for all purposes five Business Days following receipt
         by Agent of the certificate and applicable financial statements
         described in Sections 7.1(a), 7.1(b) and 7.2(b). Notwithstanding the
         foregoing, at any time during which Borrowers have failed to deliver
         the certificate and applicable financial statements described in
         Sections 7.1(a), 7.1(b) and 7.2((b) with respect to a Fiscal Quarter in
         accordance with the provisions thereof, for more than ten Business Days
         after such certificate and the applicable financial statements were
         due, the Consolidated Funded Debt to Cash Flow Ratio shall be deemed,
         solely for purposes of this definition, to be equal to or greater than
         3.0 to 1.0 until such certificate and the applicable financial
         statements are delivered.

                  "APPLICABLE MARGIN" shall mean, for any Fiscal Quarter, the
         margin set forth below opposite the Consolidated Funded Debt to Cash
         Flow Ratio as of the last day of the preceding Fiscal Quarter:




                                       3
<PAGE>   10



<TABLE>
<CAPTION>
           -------------------------------------------------------------------------- -----------------------------
                                   Consolidated Funded Debt                                Applicable Margin
                                      to Cash Flow Ratio
           -------------------------------------------------------------------------- -----------------------------
<S>                                                                                             <C>   
           equal to or greater than 3.0 to 1.0                                                  1.500%
           -------------------------------------------------------------------------- -----------------------------
           less than 3.0 to 1.0,                                                                1.250%
           but equal to or greater than 2.5 to 1.0
           -------------------------------------------------------------------------- -----------------------------
           less than 2.5 to 1.0                                                                 1.000%
           but equal to or greater than 2.0 to 1.0

           less than 2.0 to 1.0                                                                 0.875%
           but equal to or greater than 1.5 to 1.0

           less than 1.5 to 1.0                                                                 0.750%
           -------------------------------------------------------------------------- -----------------------------
</TABLE>

         For purposes of the foregoing, the Applicable Margin at any time shall
         be determined by reference to the Consolidated Funded Debt to Cash Flow
         Ratio as of the last day of the most recently ended Fiscal Quarter and
         any change in the Applicable Margin shall become effective for all
         purposes five Business Days following receipt by Agent of the
         certificate and applicable financial statements described in Sections
         7.1(a), 7.1(b) and 7.2(b). Notwithstanding the foregoing, at any time
         during which Borrowers have failed to deliver the certificate and
         applicable financial statements described in Sections 7.1(a), 7.1(b)
         and 7.2(b) with respect to a Fiscal Quarter in accordance with the
         provisions thereof, for more than ten Business Days after such
         certificate and the applicable financial statements are due, the
         Consolidated Funded Debt to Cash Flow Ratio shall be deemed, solely for
         purposes of this definition, to be equal to or greater than 3.0 to 1.0
         until such certificate and the applicable financial statements are
         delivered.

                  "ARRANGER" means NationsBanc Montgomery Securities LLC.

                  "ASSIGNEE" has the meaning specified in subsection 11.8(a).

                  "ATTORNEY COSTS" means and includes all reasonable fees and
         disbursements of any law firm or other external counsel, the allocated
         cost of internal legal services and all disbursements of internal
         counsel.

                  "BA" means Bank of America National Trust and Savings 
         Association.



                                       4
<PAGE>   11



                  "BANKER'S ACCEPTANCES" means Banker's Acceptances issued by
         the Issuing Lender upon acceptance by the Issuing Lender of time drafts
         presented pursuant to Letters of Credit.

                  "BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 
         1978 (11 U.S.C. ?101, et seq.).

                  "BASE RATE" means, for any day, the higher of: (a) 0.50% per
         annum above the latest Federal Funds Rate; and (b) the rate of interest
         in effect for such day as publicly announced from time to time by BA in
         San Francisco, California, as its "reference rate." (The "reference
         rate" is a rate set by BA based upon various factors including BA's
         costs and desired return, general economic conditions and other
         factors, and is used as a reference point for pricing some loans, which
         may be priced at, above, or below such announced rate.)

                  Any change in the reference rate announced by BA shall take
         effect at the opening of business on the day specified in the public
         announcement of such change.

                  "BASE RATE LOAN" means a Loan that bears interest based on the
         Base Rate.

                  "BORROWER REPRESENTATIVE" means Holding Co.

                  "BORROWING" means a borrowing hereunder consisting of Loans of
         the same Type made to Borrowers on the same day by one or more Lenders
         under Article 2, and, other than in the case of Base Rate Loans, having
         the same Interest Period.

                  "BORROWING  DATE" means any date on which a Borrowing  occurs
         under  Section 2.3 or a Swing Line Loan is made under Section 2.17.

                  "BUSINESS DAY" means any day other than a Saturday, Sunday or
         other day on which commercial lenders in Chicago, Illinois, are
         authorized or required by law to close and, if the applicable Business
         Day relates to any Offshore Rate Loan, means such a day on which
         dealings are carried on in the applicable offshore dollar interbank
         market.

                  "CAPITAL ADEQUACY REGULATION" means any guideline, request or
         directive of any central bank or other Governmental Authority, or any
         other law, rule or regulation, whether or not having the force of law,
         in each case, regarding capital adequacy of any bank or of any
         corporation controlling a bank.

                  "CAPITAL LEASE" shall mean any lease of (or other arrangement
         conveying the right to use) real or personal property, or a combination
         thereof, which obligations are required to be classified and accounted
         for as capital leases on a balance sheet of such Person under GAAP and,
         for the purposes of this Agreement, the amount of such obligations at
         any time shall be the capitalized amount thereof at such time
         determined in accordance with GAAP.




                                       5
<PAGE>   12

                  "CAPITAL LEASE OBLIGATIONS" of any Person shall mean the
         obligations of such Person to pay rent or other amounts under any
         Capital Lease.

                  "CASH COLLATERALIZE" means to pledge and deposit with or
         deliver to the Agent, for the benefit of the Agent, the Issuing Lender
         and the Lenders, as collateral for the L/C Obligations, cash or deposit
         account balances pursuant to documentation in form and substance
         satisfactory to the Agent and the Majority Lenders. Derivatives of such
         term shall have corresponding meanings. Cash collateral shall be
         maintained in blocked accounts at BA or, with BA's consent, the Issuing
         Lender.

                  "CD RATE" means, for any Interest Period with respect to CD
         Rate Loans comprising part of the same Borrowing, the rate of interest
         (rounded upward to the next 1/100th of 1%) determined as follows:

                  CD Rate =         Certificate of Deposit Rate  + Assessment
                                    1.00 - Reserve Percentage      Rate

                  Where:

                           "Assessment Rate" means, for any day of such Interest
                  Period, the rate determined by the Agent as equal to the
                  annual assessment rate in effect on such day payable to the
                  FDIC by a member of the Bank Insurance Fund that is classified
                  as adequately capitalized and within supervisory subgroup "A"
                  (or a comparable successor assessment risk classification
                  within the meaning of 12 C.F.R. ?327.3) for insuring time
                  deposits at offices of such member in the United States; or,
                  in the event that the FDIC shall at any time hereafter cease
                  to assess time deposits based upon such classifications or
                  successor classifications, equal to the maximum annual
                  assessment rate in effect on such day that is payable to the
                  FDIC by commercial banks (whether or not applicable to any
                  particular Lender) for insuring time deposits at offices of
                  such banks in the United States.

                           "Certificate of Deposit Rate" means the rate of
                  interest per annum determined by the Agent to be the
                  arithmetic mean (rounded upward to the next 1/100th of 1%) of
                  the rates notified to the Agent as the rates of interest bid
                  by two or more certificate of deposit dealers of recognized
                  standing selected by the Agent for the purchase at face value
                  of dollar certificates of deposit issued by major United
                  States banks, for a maturity comparable to such Interest
                  Period and in the approximate amount of the CD Rate Loans to
                  be made, at the time selected by the Agent on the first day of
                  such Interest Period.

                           "Reserve Percentage" means, for any day of such
                  Interest Period, the maximum reserve percentage (expressed as
                  a decimal, rounded upward to the next 1/100th of 1%), as
                  determined by the Agent, in effect on such day (including any



                                       6
<PAGE>   13



                  ordinary, marginal, emergency, supplemental, special and other
                  reserve percentages), prescribed by the FRB for determining
                  the maximum reserves to be maintained by member banks of the
                  Federal Reserve System with deposits exceeding $1,000,000,000
                  for new non-personal time deposits for a period comparable to
                  such Interest Period and in an amount of $100,000 or more.

                  The CD Rate shall be adjusted, as to all CD Rate Loans then
         outstanding, automatically as of the effective date of any change in
         the Assessment Rate or the Reserve Percentage.

                  "CD RATE LOAN" means a Loan that bears interest based on the
         CD Rate.

                  "CHANGE OF CONTROL" means (a) the acquisition by any Person,
         or two or more Persons acting in concert, including, without
         limitation, any acquisition effected by means of a merger or
         consolidation, of beneficial ownership (within the meaning of Rule
         13d-3 of the SEC under the Exchange Act) of 50% or more of the
         outstanding shares of voting stock of Holding Co., or (b) during any
         period of 25 consecutive calendar months, commencing on November 1,
         1996, the ceasing of those individuals (the "Continuing Directors") who
         (i) were directors of Holding Co. on the first day of each such period
         or (ii) subsequently became directors of Holding Co. and whose initial
         election or initial nomination for election subsequent to that date was
         approved by a majority of the Continuing Directors then on the board of
         directors of Holding Co., to constitute a majority of the board of
         directors of Holding Co.

                  "CLOSING DATE" means the date on which all conditions
         precedent set forth in Section 5.1 are satisfied or waived by all
         Lenders (or, in the case of subsection 5.1(e), waived by the Person
         entitled to receive such payment).

                  "CODE" means the Internal Revenue Code of 1986, as amended,
         and regulations promulgated thereunder.

                  "COMMITMENT", as to each Lender, has the meaning specified in
         Section 2.1.

                  "COMMITMENT FEE" has the meaning specified in subsection
         2.9(c).

                  "COMPLIANCE CERTIFICATE" means a certificate substantially in
         the form of Exhibit D.

                  "CONSOLIDATED CASH FLOW FROM OPERATIONS" shall mean, for any
         period, Consolidated Net Income for such period plus the aggregate
         amount deducted in determining such Consolidated Net Income in respect
         of the following, each determined in accordance with GAAP: (i)
         Consolidated Interest Expense, (ii) income taxes, (iii) depreciation,
         depletion and amortization, (iv) non-cash charges for non-recurring or
         extraordinary items, and (v) repurchase premiums incurred in connection
         with purchases of the Senior Subordinated Notes.




                                       7
<PAGE>   14


                  "CONSOLIDATED FUNDED DEBT TO CASH FLOW RATIO" means the ratio
         of (i) the aggregate Funded Debt of Borrowers and their Subsidiaries
         computed on a consolidated basis in accordance with GAAP, to (ii) the
         aggregate Consolidated Cash Flow From Operations for the four
         immediately preceding Fiscal Quarters.

                  "CONSOLIDATED INTEREST COVERAGE RATIO" shall mean the ratio of
         (i) Consolidated Cash Flow from Operations to (ii) Consolidated
         Interest Expense.

                  "CONSOLIDATED INTEREST EXPENSE" shall mean, for any period,
         gross interest expense of Borrowers and their Subsidiaries computed on
         a consolidated basis in accordance with GAAP, including, without
         limitation, amortization of debt discounts and the portion of any
         Capital Lease Obligation allocable to interest expense.

                  "CONSOLIDATED NET INCOME" shall mean, for any period, the
         aggregate net income (or net deficit) of Borrowers and their
         Subsidiaries for such period computed on a consolidated basis in
         accordance with GAAP.

                  "CONTINGENT OBLIGATION" means, as to any Person, any direct or
         indirect liability of that Person, whether or not contingent, with or
         without recourse, (a) with respect to any Indebtedness, lease,
         dividend, letter of credit or other obligation (the "primary
         obligations") of another Person (the "primary obligor"), including any
         obligation of that Person (i) to purchase, repurchase or otherwise
         acquire such primary obligations or any security therefor, (ii) to
         advance or provide funds for the payment or discharge of any such
         primary obligation, or to maintain working capital or equity capital of
         the primary obligor or otherwise to maintain the net worth or solvency
         or any balance sheet item, level of income or financial condition of
         the primary obligor, (iii) to purchase property, securities or services
         primarily for the purpose of assuring the owner of any such primary
         obligation of the ability of the primary obligor to make payment of
         such primary obligation, or (iv) otherwise to assure or hold harmless
         the holder of any such primary obligation against loss in respect
         thereof (each, a "Guaranty Obligation"); (b) with respect to any Surety
         Instrument issued for the account of that Person or as to which that
         Person is otherwise liable for reimbursement of drawings or payments;
         (c) to purchase any materials, supplies or other property from, or to
         obtain the services of, another Person if the relevant contract or
         other related document or obligation requires that payment for such
         materials, supplies or other property, or for such services, shall be
         made regardless of whether delivery of such materials, supplies or
         other property is ever made or tendered, or such services are ever
         performed or tendered, or (d) in respect of any Swap Contract. The
         amount of any Contingent Obligation shall, in the case of Guaranty
         Obligations, be deemed equal to the stated or determinable amount of
         the primary obligation in respect of which such Guaranty Obligation is
         made or, if not stated or if indeterminable, the maximum reasonably
         anticipated liability in respect thereof, and in the case of other
         Contingent Obligations other than in respect of Swap Contracts, shall
         be equal to the maximum reasonably anticipated liability in respect
         thereof and, in the case of Contingent Obligations in respect of Swap
         Contracts, shall be equal to the Swap Termination Value.




                                       8
<PAGE>   15


                  "CONTRACTUAL OBLIGATION" means, as to any Person, any
         provision of any security issued by such Person or of any agreement,
         undertaking, contract, indenture, mortgage, deed of trust or other
         instrument, document or agreement to which such Person is a party or by
         which it or any of its property is bound.

                  "CONVERSION/CONTINUATION DATE" means any date on which, under
         Section 2.4, Borrowers (a) convert Loans of one Type to another Type,
         or (b) continue as Loans of the same Type, but with a new Interest
         Period, Loans having Interest Periods expiring on such date.

                  "DEFAULT" means any event or circumstance which, with the
         giving of notice, the lapse of time, or both, would (if not cured or
         otherwise remedied during such time) constitute an Event of Default.

                  "DOLLARS", "DOLLARS" and "$" each mean lawful money of the
         United States.

                  "EFFECTIVE AMOUNT" means, with respect to any outstanding L/C
         Obligations on any date, the amount of such L/C Obligations on such
         date after giving effect to any Issuances of Letters of Credit or
         Banker's Acceptances occurring on such date, any other changes in the
         aggregate amount of the L/C Obligations as of such date, including as a
         result of any reimbursements of outstanding unpaid drawings under any
         Letter of Credit or payments under Banker's Acceptances or any
         reduction in the maximum amount available for drawing under Letters of
         Credit or payment under Banker's Acceptances taking effect on such
         date.

                  "ELIGIBLE ASSIGNEE" means (a) a commercial bank organized
         under the laws of the United States, or any state thereof, and having a
         combined capital and surplus of at least $100,000,000; (b) a commercial
         bank organized under the laws of any other country which is a member of
         the Organization for Economic Cooperation and Development (the "OECD"),
         or a political subdivision of any such country, and having a combined
         capital and surplus of at least $100,000,000, provided that such bank
         is acting through a branch or agency located in the United States; and
         (c) a Person that is primarily engaged in the business of commercial
         banking and that is (i) a Subsidiary of a Lender, (ii) a Subsidiary of
         a Person of which a Lender is a Subsidiary, or (iii) a Person of which
         a Lender is a Subsidiary.

                  "ENVIRONMENTAL CLAIMS" means all claims, however asserted, by
         any Governmental Authority or other Person alleging potential liability
         or responsibility for violation of any Environmental Law, or for
         release or injury to the environment.



                                       9
<PAGE>   16



                  "ENVIRONMENTAL LAWS" means all federal, state or local laws,
         statutes, common law duties, rules, regulations, ordinances and codes,
         together with all administrative orders, directed duties, requests,
         licenses, authorizations and permits of, and agreements with, any
         Governmental Authorities, in each case relating to environmental,
         health, safety and land use matters.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended, and regulations promulgated thereunder.

                  "ERISA AFFILIATE" means any trade or business (whether or not
         incorporated) under common control with any Borrower within the meaning
         of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of
         the Code for purposes of provisions relating to Section 412 of the
         Code).

                  "ERISA EVENT" means (a) a Reportable Event with respect to a
         Pension Plan; (b) a withdrawal by any Borrower or any ERISA Affiliate
         from a Pension Plan subject to Section 4063 of ERISA during a plan year
         in which it was a substantial employer (as defined in Section
         4001(a)(2) of ERISA) or a cessation of operations which is treated as
         such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
         partial withdrawal by any Borrower or any ERISA Affiliate from a
         Multiemployer Plan or notification that a Multiemployer Plan is in
         reorganization; (d) the filing of a notice of intent to terminate, the
         treatment of a Plan amendment as a termination under Section 4041 or
         4041A of ERISA, or the commencement of proceedings by the PBGC to
         terminate a Pension Plan or Multiemployer Plan; (e) an event or
         condition which might reasonably be expected to constitute grounds
         under Section 4042 of ERISA for the termination of, or the appointment
         of a trustee to administer, any Pension Plan or Multiemployer Plan; or
         (f) the imposition of any liability under Title IV of ERISA, other than
         PBGC premiums due but not delinquent under Section 4007 of ERISA, upon
         any Borrower or any ERISA Affiliate.

                  "EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in
         the definition of "Offshore Rate".

                  "EVENT OF DEFAULT" means any of the events or circumstances
         specified in Section 9.1.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, and
         regulations promulgated thereunder.

                  "FDIC" means the Federal Deposit Insurance Corporation, and
         any Governmental Authority succeeding to any of its principal
         functions.



                                       10
<PAGE>   17


                  "FEDERAL FUNDS RATE" means, for any day, the rate set forth in
         the weekly statistical release designated as H.15(519), or any
         successor publication, published by the Federal Reserve Bank of New
         York (including any such successor, "H.15(519)") on the preceding
         Business Day opposite the caption "Federal Funds (Effective)"; or, if
         for any relevant day such rate is not so published on any such
         preceding Business Day, the rate for such day will be the arithmetic
         mean as determined by the Agent of the rates for the last transaction
         in overnight Federal funds arranged prior to 9:00 a.m. (New York City
         time) on that day by each of three leading brokers of Federal funds
         transactions in New York City selected by the Agent.

                  "FEE LETTER" has the meaning specified in subsection 2.9(a).

                  "FISCAL QUARTER" means each of the three-month periods that
         end on April 30, July 31, October 31 and January 31 in each Fiscal
         Year.

                  "FISCAL YEAR" means the twelve-month period that ends on
         January 31.

                  "FRB" means the Board of Governors of the Federal Reserve
         System, and any Governmental Authority succeeding to any of its
         principal functions.

                  "FUNDED DEBT" means, without duplication, at any date of
         determination thereof, the total of (a) all Indebtedness, that has a
         final maturity, or that is extendible or renewable at the option of the
         obligor to a date, one year or more after the date on which such
         Indebtedness is incurred, excluding all principal payments in respect
         thereof required to be made within one year from the date as of which
         Funded Debt is being determined, (b) all Guaranty Obligations with
         respect to such Indebtedness of others, and (c) in the case of
         Borrowers, the aggregate outstanding principal amount of all Borrowings
         to the extent not included in clause (a) above.

                  "FURTHER TAXES" means any and all present or future taxes,
         levies, assessments, imposts, duties, deductions, fees, withholdings or
         similar charges (including, without limitation, net income taxes and
         franchise taxes), and all liabilities with respect thereto, imposed by
         any jurisdiction on account of amounts payable or paid pursuant to
         Section 4.1.

                  "GAAP" means generally accepted accounting principles set
         forth from time to time in the opinions and pronouncements of the
         Accounting Principles Board and the American Institute of Certified
         Public Accountants and statements and pronouncements of the Financial
         Accounting Standards Board (or agencies with similar functions of
         comparable stature and authority within the U.S. accounting
         profession), which are applicable to the circumstances as of the
         Closing Date.

                  "GOVERNMENTAL AUTHORITY" means any nation or government, any
         state or other political subdivision thereof, any central bank (or
         similar monetary or regulatory authority) thereof, any entity
         exercising executive, legislative, judicial, 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.




                                       11
<PAGE>   18


                  "GUARANTY OBLIGATION" has the meaning specified in the
         definition of "Contingent Obligation".

                  "INDEBTEDNESS" of any Person means, without duplication, (a)
         all indebtedness for borrowed money; (b) all obligations issued,
         undertaken or assumed as the deferred purchase price of property or
         services (other than trade payables entered into in the ordinary course
         of business on ordinary terms); (c) all non-contingent reimbursement or
         payment obligations with respect to Surety Instruments; (d) all
         obligations evidenced by notes, bonds, debentures or similar
         instruments, including obligations so evidenced incurred in connection
         with the acquisition of property, assets or businesses; (e) all
         indebtedness created or arising under any conditional sale or other
         title retention agreement, or incurred as financing, in either case
         with respect to property acquired by the Person (even though the rights
         and remedies of the seller or lender under such agreement in the event
         of default are limited to repossession or sale of such property); (f)
         all obligations with respect to capital leases; (g) all indebtedness
         referred to in clauses (a) through (f) above secured by (or for which
         the holder of such Indebtedness has an existing right, contingent or
         otherwise, to be secured by) any Lien upon or in property (including
         accounts and contracts rights) owned by such Person, even though such
         Person has not assumed or become liable for the payment of such
         Indebtedness; and (h) all Guaranty Obligations in respect of
         indebtedness or obligations of others of the kinds referred to in
         clauses (a) through (g) above. For all purposes of this Agreement, the
         Indebtedness of any Person shall include all recourse Indebtedness of
         any partnership or joint venture or limited liability company in which
         such Person is a general partner or a joint venturer or a member.

                  "INDEMNIFIED LIABILITIES" has the meaning specified in Section
         11.5.

                  "INDEMNIFIED PERSON" has the meaning specified in Section
         11.5.

                  "INDEPENDENT AUDITOR" has the meaning specified in subsection
         7.1(a).

                  "INDENTURE" means the Indenture, dated as of December 1, 1993,
         between Holding Co. and Harris Trust and Savings Bank, as Trustee, as
         amended by a Supplemental Indenture, dated as of December 1, 1993,
         among Holding Co., Bloomfield Industries Canada Limited and Harris
         Trust and Savings Bank, as Trustee, and by a Supplemental Indenture,
         dated as of January 31, 1998, among Borrowers and Harris Trust and
         Savings Bank, as Trustee.

                  "INSOLVENCY PROCEEDING" means, with respect to any Person, (a)
         any case, action or proceeding with respect to such Person before any
         court or other Governmental Authority relating to bankruptcy,
         reorganization, insolvency, liquidation, receivership, dissolution,
         winding-up or relief of debtors, or (b) any general assignment for the
         benefit of creditors, composition, marshaling of assets for creditors,
         or other, similar arrangement in respect of its creditors generally or
         any substantial portion of its creditors; undertaken under U.S.
         Federal, state or foreign law, including the Bankruptcy Code.




                                       12
<PAGE>   19


                  "INTEREST PAYMENT DATE" means, as to any Loan other than a
         Base Rate Loan, the last day of each Interest Period applicable to such
         Loan and, as to any Base Rate Loan, the last Business Day of each
         calendar quarter and each date such Loan is converted into another Type
         of Loan, provided, however, that if any Interest Period for a CD Rate
         Loan or Offshore Rate Loan exceeds 90 days or three months,
         respectively, the date that falls 90 days or three months (as the case
         may be) after the beginning of such Interest Period and after each
         Interest Payment Date thereafter is also an Interest Payment Date.

                  "INTEREST PERIOD" means, (a) as to any Offshore Rate Loan, the
         period commencing on the Borrowing Date of such Loan or on the
         Conversion/Continuation Date on which the Loan is converted into or
         continued as an Offshore Rate Loan, and ending on the date one, two,
         three, six or twelve months thereafter as selected by Borrowers in its
         Notice of Borrowing or Notice of Conversion/Continuation; and (b) as to
         any CD Rate Loan, the period commencing on the Borrowing Date of such
         Loan or on the Conversion/Continuation Date on which the Loan is
         converted into or continued as a CD Rate Loan, and ending on the date
         30, 60, 90 or 180 days thereafter, as selected by Borrowers in their
         Notice of Borrowing or Notice of Conversion/Continuation.

         provided that:

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

                           (ii) any Interest Period pertaining 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
                  calendar month at the end of such Interest Period; and

                           (iii) no Interest Period for any Loan shall extend
                  beyond the Termination Date.

                  "IRS" means the Internal Revenue Service, and any Governmental
         Authority succeeding to any of its principal functions under the Code.

                  "ISSUANCE DATE" has the meaning specified in subsection 
         3.1(a).




                                       13
<PAGE>   20


                  "ISSUE" means, with respect to any Letter of Credit, to issue
         or to extend the expiry of, or to renew or increase the amount of, such
         Letter of Credit; and the terms "issued," "issuing" and "issuance" have
         corresponding meanings.

                  "ISSUING LENDER" means each of BA in its capacity as issuer of
         one or more Letters of Credit and Banker's Acceptances pursuant to
         Article 3, together with any replacement letter of credit issuer
         arising under subsection 10.1(b) or Section 10.9 and (ii) any other
         Lender or Affiliate of a Lender which the Agent and Borrowers have
         approved in writing as an "Issuing Lender" hereunder.

                  "JOINT VENTURE" means a single-purpose corporation,
         partnership, limited liability company, joint venture or other similar
         legal arrangement (whether created by contract or conducted through a
         separate legal entity) now or hereafter formed by any Borrower or any
         of its Subsidiaries with another Person in order to conduct a common
         venture or enterprise with such Person.

                  "L/C ADVANCE" means each Lender's participation in any L/C
         Borrowing in accordance with its Pro Rata Share.

                  "L/C AMENDMENT APPLICATION" means an application form for
         amendment of an outstanding Letter of Credit as shall at any time be in
         use by the applicable Issuing Lender, as such Issuing Lender shall
         request.

                  "L/C APPLICATION" means an application form for issuance of a
         standby letter of credit or a commercial letter of credit, as the case
         may be, as shall at any time be in use by the applicable Issuing
         Lender, as such Issuing Lender shall request.

                  "L/C BORROWING" means an extension of credit resulting from a
         drawing under any Letter of Credit which shall not have been reimbursed
         on the date when made nor converted into a Borrowing of Loans under
         subsection 3.3(c).

                  "L/C COMMITMENT" means the commitment of the Issuing Lenders
         to issue, and the commitment of the Lenders severally to participate
         in, Letters of Credit and Banker's Acceptances from time to time Issued
         or outstanding under Section 3 in an aggregate amount not to exceed on
         any date the lesser of $20,000,000 and the combined Commitments; it
         being understood that the L/C Commitment is a part of the combined
         Commitments rather than a separate, independent commitment.

                  "L/C OBLIGATIONS" means at any time the sum of (a) the
         aggregate undrawn amount of all Letters of Credit then outstanding,
         plus (b) the aggregate unpaid amount of all Banker's Acceptances
         outstanding at such time, plus (c) the amount of all unreimbursed
         drawings under all Letters of Credit and Banker's Acceptances,
         including all outstanding L/C Borrowings.




                                       14
<PAGE>   21


                  "L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
         Applications, the L/C Amendment Applications, the Banker's Acceptances
         and any other document relating to any Letter of Credit, including any
         of the applicable Issuing Lender's standard form documents for letter
         of credit issuances.

                  "LC ISSUANCE FEE" shall have the meaning given such term in
         subsection 2.9(d).

                  "LENDER" has the meaning specified in the introductory clause
         hereto.

                  "LENDING OFFICE" means, as to any Lender, the office or
         offices of such Lender specified as its "Lending Office" or "Domestic
         Lending Office" or "Offshore Lending Office", as the case may be, on
         Schedule 11.2, or such other office or offices as such Lender may from
         time to time notify Borrowers and the Agent.

                  "LETTERS OF CREDIT" means letters of credit issued by an
         Issuing Lender for the account of Borrowers pursuant to Article 3.

                  "LIEN" means any security interest, mortgage, deed of trust,
         pledge, hypothecation, assignment, charge or deposit arrangement,
         encumbrance, lien (statutory or other) or preferential arrangement of
         any kind or nature whatsoever in respect of any property (including
         those created by, arising under or evidenced by any conditional sale or
         other title retention agreement, the interest of a lessor under a
         capital lease, any financing lease having substantially the same
         economic effect as any of the foregoing, or the filing of any financing
         statement naming the owner of the asset to which such lien relates as
         debtor, under the Uniform Commercial Code or any comparable law) and
         any contingent or other agreement to provide any of the foregoing, but
         not including the interest of a lessor under an operating lease.

                  "LOAN" means an extension of credit by a Lender to Borrowers
         under Article 2, and may be a Base Rate Loan, a CD Rate Loan, an
         Offshore Rate Loan, a Swing Line Loan (each a "TYPE" of Loan) or an L/C
         Borrowing.

                  "LOAN DOCUMENTS" means this Agreement, any Notes, the Fee
         Letter and all other documents delivered to the Agent or any Lender in
         connection herewith.

                  "MAJORITY LENDERS" means Lenders holding Pro Rata Shares
         aggregating 66-2/3% or more; provided that if and so long as any Lender
         fails to fund any Loan when required by Section 2.3, Section 2.18 or
         Section 3.3 or a participation in a Swing Line Loan or an L/C Borrowing
         pursuant to Section 2.19 or Section 3.3, as the case may be, such
         Lender's Pro Rata Share shall be deemed for purposes of this definition
         to be reduced by the percentage which the defaulted amount constitutes
         of the combined Commitments (or, if the Commitments have terminated,
         the Total Outstandings), and (i) in the case of a failure to




                                       15
<PAGE>   22

         fund under Section 2.18, Section 2.19 or Section 3.3 the Pro Rata Share
         of the applicable Issuing Lender or the Swing Line Lender, as the case
         may be, shall be deemed for purposes of this definition to be increased
         by such percentage, and (ii) in the case of a failure to fund under
         Section 2.3, the Pro Rata Share of each of the other Lenders who have
         not so failed shall be deemed for purposes of this definition to be
         increased by the portion of such percentage which each of such other
         Lenders' Commitments bears to the sum of the total Commitments,
         exclusive of the Commitment of the failing Lender.

                  "MARGIN STOCK" means "margin stock" as such term is defined in
         Regulation T, U or X of the FRB.

                  "MATERIAL ADVERSE EFFECT" means (a) a material adverse change
         in, or a material adverse effect upon, the operations, business,
         properties, condition (financial or otherwise) or prospects of any
         Borrower or Borrowers and their Subsidiaries taken as a whole; (b) a
         material impairment of the ability of any Borrower or any Subsidiary to
         perform under any Loan Document and to avoid any Event of Default; or
         (c) a material adverse effect upon the legality, validity, binding
         effect or enforceability against any Borrower or any Subsidiary of any
         Loan Document.

                  "MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
         meaning of Section 4001(a)(3) of ERISA, to which any Borrower or any
         ERISA Affiliate makes, is making, or is obligated to make contributions
         or, during the preceding three calendar years, has made, or been
         obligated to make, contributions.

                  "NOTE" means a promissory note executed by Borrowers in favor
         of a Lender pursuant to Section 2.2, in substantially the form of
         Exhibit G.

                  "NOTICE OF BORROWING" means a notice in substantially the form
         of Exhibit A.

                  "NOTICE OF CONVERSION/CONTINUATION" means a notice in
         substantially the form of Exhibit B.

                  "NOTICE OF SWING LINE LOAN" means a notice substantially in
         the form of Exhibit C.

                  "OBLIGATIONS" means all advances, debts, liabilities,
         obligations, covenants and duties arising under any Loan Document owing
         by Borrowers to any Lender, the Agent, any Issuing Lender or any
         Indemnified Person, whether direct or indirect (including those
         acquired by assignment), absolute or contingent, due or to become due,
         now existing or hereafter arising.

                  "OFFSHORE RATE" means, for any Interest Period, with respect
         to Offshore Rate Loans comprising part of the same Borrowing, the rate
         of interest per annum (rounded upward to the next 1/16th of 1%)
         determined by the Agent as follows:





                                       16
<PAGE>   23


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

         Where,

                           "Eurodollar Reserve Percentage" means for any day for
                  any Interest Period the maximum reserve percentage (expressed
                  as a decimal, rounded upward to the next 1/100th of 1%) in
                  effect on such day (whether or not applicable to any Lender)
                  under regulations issued from time to time by the FRB for
                  determining the maximum reserve requirement (including any
                  emergency, supplemental or other marginal reserve requirement)
                  with respect to Eurocurrency funding (currently referred to as
                  "Eurocurrency liabilities"); and

                           "LIBOR" means the rate of interest per annum
                  determined by the Agent to be the rate at which deposits in
                  U.S. Dollars for the relevant Interest Period are offered
                  based on information presented to the Telerate Screen as of
                  11:00 a.m. (London time) two (2) Business Days prior to the
                  commencement of such Interest Period in the approximate amount
                  of the requested Offshore Rate Loan and having a maturity
                  approximately equal to such Interest Period; provided that if
                  at least two such offered rates appear on the Telerate Screen
                  (page 3750 or any successor screen) in respect of such
                  Interest Period, the arithmetic mean of all such rates (as
                  determined by Agent) will be the rate used; provided further,
                  that if the Telerate System ceases to provide LIBOR
                  quotations, such rate shall be the rate at which dollar
                  deposits in the approximate amount of the requested Offshore
                  Rate Loan for such Interest Period would be offered by BA to
                  major banks in the London interbank market at their request at
                  approximately 11:00 a.m. (London time) two Business Days prior
                  to the commencement of such Interest Period.

                           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 Loan that bears interest based on
         the Offshore Rate.

                  "ORGANIZATION DOCUMENTS" means (i) for any corporation, the
         certificate or articles of incorporation, the bylaws, any certificate
         of determination or instrument relating to the rights of preferred
         shareholders of such corporation, any shareholder rights agreement, and
         all applicable resolutions of the board of directors (or any committee
         thereof) of such corporation, (ii) for any partnership or joint
         venture, the partnership or joint venture agreement and any other
         organizational document of such entity, (iii) for any limited liability
         company, the certificate or articles of organization, the operating
         agreement and any other organizational document of such limited
         liability company, (iv) for any trust, the declaration 





                                       17
<PAGE>   24

         of trust, the trust agreement and any other organization
         document of such trust, and (v) for any other entity, the document or
         agreement pursuant to which such entity was formed and any other
         organizational document of such entity.

                  "OTHER TAXES" means any present or future stamp, court or
         documentary taxes or any other excise or property taxes, charges or
         similar levies which arise from any payment made hereunder or from the
         execution, delivery, performance, enforcement or registration of, or
         otherwise with respect to, this Agreement or any other Loan Document.

                  "PARTICIPANT" has the meaning specified in subsection 11.8(d).

                  "PBGC" means the Pension Benefit Guaranty Corporation, or any
         Governmental Authority succeeding to any of its principal functions
         under ERISA.

                  "PENSION PLAN" means a pension plan (as defined in Section
         3(2) of ERISA) subject to Title IV of ERISA which any Borrower
         sponsors, maintains, or to which it makes, is making, or is obligated
         to make contributions, or in the case of a multiple employer plan (as
         described in Section 4064(a) of ERISA) has made contributions at any
         time during the immediately preceding five (5) plan years.

                  "PERMITTED LIENS" has the meaning specified in Section 8.1.

                  "PERMITTED SWAP OBLIGATIONS" means all unsecured obligations
         (contingent or otherwise) of Borrowers or any Subsidiary existing or
         arising under Swap Contracts, provided that each of the following
         criteria is satisfied: (a) such obligations are (or were) entered into
         by such Person in the ordinary course of business for the purpose of
         directly mitigating risks associated with liabilities, commitments or
         assets held or reasonably anticipated by such Person, or changes in the
         value of securities issued by such Person in conjunction with a
         securities repurchase program not otherwise prohibited hereunder, and
         not for purposes of speculation or taking a "market view", and (b) such
         Swap Contracts do not contain (i) any provision ("walk-away" provision)
         exonerating the non-defaulting party from its obligation to make
         payments on outstanding transactions to the defaulting party, or (ii)
         any provision creating or permitting the declaration of an event of
         default, termination event or similar event upon the occurrence of an
         Event of Default hereunder (other than an Event of Default under
         subsection 9.1(a).

                  "PLAN" means an employee benefit plan (as defined in Section
         3(3) of ERISA) which any Borrower sponsors or maintains or to which any
         Borrower makes, is making, or is obligated to make contributions and
         includes any Pension Plan.

                  "PLAN OF INTERNAL RESTRUCTURING" means the Plan of Internal
         Restructuring adopted by the Board of Directors of Holding Co. and
         approved by the stockholders of Holding Co. at the Annual Meeting of
         Stockholders of Holding Co. on April 30, 1997.



                                       18
<PAGE>   25


                  "PRO RATA SHARE" means, as to any Lender at any time, the
         percentage equivalent (expressed as a decimal, rounded to the ninth
         decimal place) at such time of such Lender's Commitment divided by the
         combined Commitments (or, after the Commitments have terminated, which
         (i) the principal amount of such Lender's Loans plus (without
         duplication) the participation of such Lender in (or in the case of an
         Issuing Lender or the Swing Line Lender, the unparticipated portion of)
         the Effective Amount of all L/C Obligations and the principal amount of
         all Swing Line Loans constitutes of (ii) the aggregate principal amount
         of all Loans and Swing Line Loans plus (without duplication) the
         Effective Amount of all L/C Obligations).

                  "REPLACEMENT LENDER" has the meaning specified in Section 4.8.

                  "REPORTABLE EVENT" means, any of the events set forth in
         Section 4043(c) of ERISA or the regulations thereunder, other than any
         such event for which the 30-day notice requirement under ERISA has been
         waived in regulations issued by the PBGC.

                  "REQUIREMENT OF LAW" means, as to any Person, any law
         (statutory or common), treaty, rule or regulation or determination of
         an arbitrator or of a Governmental Authority, in each case applicable
         to or binding upon the Person or any of its property or to which the
         Person or any of its property is subject.

                  "RESPONSIBLE OFFICER" means the chief executive officer or the
         president of Holding Co., or any other officer having substantially the
         same authority and responsibility; or, with respect to compliance with
         financial covenants, the chief financial officer or the treasurer of
         Holding Co., or any other officer having substantially the same
         authority and responsibility.

                  "SEC" means the Securities and Exchange Commission, or any
         Governmental Authority succeeding to any of its principal functions.

                  "SENIOR SUBORDINATED NOTES" means Holding Co.'s 11-3/8% Senior
         Subordinated Notes due 2003 issued pursuant to the Indenture which are
         outstanding on the Closing Date.

                  "SUBORDINATED DEBT" means that portion of the Indebtedness of
         any Borrower and its Subsidiaries which is subordinated in a manner
         satisfactory in form and substance to the Lenders as to right and time
         of payment of principal and interest thereon to any and all of the
         Obligations.

                  "SUBSIDIARY" of a Person means any corporation, association,
         partnership, limited liability company, joint venture or other business
         entity of which more than 50% of the voting stock, membership interests
         or other equity interests (in the case of Persons other than
         corporations), is owned or controlled directly or indirectly by the
         Person, or one or more of the Subsidiaries of the Person, or a
         combination thereof. Unless the context otherwise clearly requires,
         references herein to a "Subsidiary" refer to a Subsidiary of any
         Borrower.



                                       19
<PAGE>   26


                  "SURETY INSTRUMENTS" means all letters of credit (including
         standby and commercial), banker's acceptances, bank guaranties,
         shipside bonds, surety bonds and similar instruments.

                  "SWAP CONTRACT" means any agreement, whether or not in
         writing, relating to any transaction that is a rate swap, basis swap,
         forward rate transaction, commodity swap, commodity option, equity or
         equity index swap or option, bond, note or bill option, interest rate
         option, forward foreign exchange transaction, cap, collar or floor
         transaction, currency swap, cross-currency rate swap, swaption,
         currency option or any other, similar transaction (including any option
         to enter into any of the foregoing) or any combination of the
         foregoing, and, unless the context otherwise clearly requires, any
         master agreement relating to or governing any or all of the foregoing.

                  "SWAP TERMINATION VALUE" means, in respect of any one or more
         Swap Contracts, after taking into account the effect of any legally
         enforceable netting agreement relating to such Swap Contracts, (a) for
         any date on or after the date such Swap Contracts have been closed out
         and termination value(s) determined in accordance therewith, such
         termination value(s), and (b) for any date prior to the date referenced
         in clause (a), the amount(s) determined as the mark-to-market value(s)
         for such Swap Contracts, as determined by any Borrower based upon one
         or more mid-market or other readily available quotations provided by
         any recognized dealer in such Swap Contracts (which may include any
         Lender).

                  SWING LINE COMMITMENT" means the commitment of the Swing Line
         Lender to make Swing Line Loans hereunder.

                  "SWING LINE LENDER" means BA in its capacity as swing line
         lender hereunder, together with any replacement swing line lender
         arising under Section 10.9.

                  "SWING LINE LOAN" has the meaning specified in Section 2.16.

                  "SWING LINE RATE" means the rate per annum quoted by BA as its
         cost for obtaining overnight Federal funds on such day plus the
         Applicable Margin. The Swing Line Rate for any day that is not a
         Business Day shall be the Swing Line Rate for the preceding Business
         Day.

                  "TAXES" means any and all present or future taxes, levies,
         assessments, imposts, duties, deductions, fees, withholdings or similar
         charges, and all liabilities with respect thereto, excluding, in the
         case of each Lender and the Agent, respectively, taxes imposed on or
         measured by its net income by the jurisdiction (or any political
         subdivision thereof) under the laws of which such Lender or the Agent,
         as the case may be, is organized or maintains a lending office.




                                       20
<PAGE>   27


                  "TERMINATION DATE" means the earlier to occur of:

                           (a) November 30, 2003 (or such later date to which
                  the Termination Date may be extended pursuant to Section
                  2.14); and

                           (b) the date on which the Commitments terminate in
                  accordance with the provisions of this Agreement.

                  "TOTAL OUTSTANDINGS" means the sum of the aggregate principal
         amount of all outstanding Loans (whether Base Rate Loans, CD Rate
         Loans, Offshore Rate Loans or Swing Line Loans) plus the Effective
         Amount of all L/C Obligations.

                  "TYPE" has the meaning specified in the definition of "Loan."

                  "UNFUNDED PENSION LIABILITY" means the excess of a Plan's
         benefit liabilities under Section 4001(a)(16) of ERISA, over the
         current value of that Plan's assets, determined in accordance with the
         assumptions used for funding the Pension Plan pursuant to Section 412
         of the Code for the applicable plan year.

                  "UNITED STATES" and "U.S." each means the United States of
         America.

                  "UPFRONT FEES" has the meaning specified in subsection 2.9(b).

                  "WHOLLY-OWNED SUBSIDIARY" means any corporation in which
         (other than directors' qualifying shares required by law) 100% of the
         capital stock of each class having ordinary voting power, and 100% of
         the capital stock of every other class, in each case, at the time as of
         which any determination is being made, is owned, beneficially and of
         record, by any Borrower, or by one or more of the other Wholly-Owned
         Subsidiaries, or both.

         1.2      OTHER INTERPRETIVE PROVISIONS

                  (a The meanings of defined terms are equally applicable to the
         singular and plural forms of the defined terms.

                  (b The words "hereof", "herein", "hereunder" and similar words
         refer to this Agreement as a whole and not to any particular provision
         of this Agreement; and subsection, Section, Schedule and Exhibit
         references are to this Agreement unless otherwise specified.

                  (c (i The term "documents" includes any and all instruments,
         documents, agreements, certificates, indentures, notices and other
         writings, however evidenced.

                           (ii The term "including" is not limiting and means
         "including without limitation".





                                       21
<PAGE>   28

                           (iii In the computation of periods of time from a
         specified date to a later specified date, the word "from" means "from
         and including"; the words "to" and "until" each mean "to but
         excluding", and the word "through" means "to and including".

                  (d Unless otherwise expressly provided herein, (i) references
         to agreements (including this Agreement) and other contractual
         instruments shall be deemed to include all subsequent amendments and
         other modifications thereto, but only to the extent such amendments and
         other modifications are not prohibited by the terms of any Loan
         Document, and (ii) references to any statute or regulation are to be
         construed as including all statutory and regulatory provisions
         consolidating, amending, replacing, supplementing or interpreting the
         statute or regulation.

                  (e The captions and headings of this Agreement are for
         convenience of reference only and shall not affect the interpretation
         of this Agreement.

                  (f This Agreement and other Loan Documents may use several
         different limitations, tests or measurements to regulate the same or
         similar matters. All such limitations, tests and measurements are
         cumulative and shall each be performed in accordance with their terms.
         Unless otherwise expressly provided, any reference to any action of the
         Agent or the Lenders by way of consent, approval or waiver shall be
         deemed modified by the phrase "in its/their sole discretion."

                  (g This Agreement and the other Loan Documents are the result
         of negotiations among and have been reviewed by counsel to the Agent,
         Borrowers and the other parties, and are the products of all parties.
         Accordingly, they shall not be construed against the Lenders or the
         Agent merely because of the Agent's or Lenders' involvement in their
         preparation.

         1.3 ACCOUNTING PRINCIPLES. Unless the context otherwise clearly 
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.


                                    ARTICLE 2

                                   THE CREDITS

         2.1 AMOUNTS AND TERMS OF COMMITMENTS. Each Lender severally agrees, on
the terms and conditions set forth herein, to make Loans to Borrowers from time
to time on any Business Day during the period from the Closing Date to the
Termination Date, in an aggregate amount not to exceed at any time outstanding,
the amount set forth on Schedule 2.1 (such amount as the same may be reduced
under Section 2.5, increased pursuant to Section 2.15 or changed as a result of
one or more assignments under Section 11.8, such Lender's "Commitment");
provided, however, that, after giving effect to any Borrowing, the Total
Outstandings shall not at any time exceed the combined 





                                       22
<PAGE>   29


Commitments, and provided, further that the aggregate principal amount of the
Loan of any Lender, plus the participation of such Lender in the principal
amount of all outstanding Swing Line Loans and in the Effective Amount of all
L/C Obligations shall not exceed such Lender's Commitment. Within the limits of
each Lender's Commitment, and subject to the other terms and conditions hereof,
Borrowers may borrow under this Section 2.1, prepay under Section 2.6 and
reborrow under this Section 2.1.

         2.2 LOAN ACCOUNTS. The Loans made by each Lender and the Letters of
Credit Issued by each Issuing Lender shall be evidenced by one or more accounts
or records maintained by such Lender or Issuing Lender, as the case may be, in
the ordinary course of business. The accounts or records maintained by the
Agent, each Issuing Lender and each Lender shall be rebuttable presumptive
evidence of the amount of the Loans made by the Lenders to Borrowers and the
Letters of Credit Issued for the account of the Borrowers, and the interest and
payments thereon. Any failure so to record or any error in doing so shall not,
however, limit or otherwise affect the obligation of Borrowers hereunder to pay
any amount owing with respect to the Loans or any Letter of Credit. Upon the
request of any Lender made through the Agent, the Loans made by such Lender may
be evidenced by one or more Notes, instead of or in addition to loan accounts.

         2.3 PROCEDURE FOR BORROWING.

                  (a Each Borrowing shall be made upon Borrower Representative's
         irrevocable written notice delivered to the Agent in the form of a
         Notice of Borrowing (which notice must be received by the Agent prior
         to 10:00 a.m. (Chicago time) (i) three Business Days prior to the
         requested Borrowing Date, in the case of Offshore Rate Loans; (ii) two
         Business Days prior to the requested Borrowing Date, in the case of CD
         Rate Loans, and (iii) on the requested Borrowing Date, in the case of
         Base Rate Loans, specifying:

                           (A0 the amount of the Borrowing, which shall be in an
                  aggregate minimum amount of $1,000,000 or any multiple of
                  $500,000 in excess thereof;

                           (B0 the requested Borrowing Date, which shall be a
                  Business Day;

                           (C0 the Type of Loans comprising the Borrowing;
                  provided that if the Notice of Borrowing fails to specify the
                  Type of Loan, the Loan shall be a Base Rate Loan; and

                           (D0 in the case of Offshore Rate Loans and CD Rate
                  Loans, the duration of the Interest Period applicable to such
                  Loans included in such notice. If the Notice of Borrowing
                  fails to specify the duration of the Interest Period for any
                  Borrowing comprised of CD Rate Loans or Offshore Rate Loans,
                  such Interest Period shall be 30 days or one month,
                  respectively.



                                       23
<PAGE>   30


provided, however, that with respect to the Borrowing to be made on the Closing
Date, the Notice of Borrowing shall be delivered to the Agent not later than
10:00 a.m. (Chicago time) one Business Day before the Closing Date and such
Borrowing will consist of Base Rate Loans only.

                  (b The Agent will promptly notify each Lender of its receipt
         of any Notice of Borrowing and of the amount of such Lender's Pro Rata
         Share of that Borrowing.

                  (c Each Lender will make the amount of its Pro Rata Share of
         each Borrowing available to the Agent for the account of Borrowers at
         the Agent's Payment Office by 2:00 p.m. (Chicago time) on the Borrowing
         Date requested by Borrower Representative in funds immediately
         available to the Agent. The proceeds of all such Loans will then be
         made available to Borrowers by the Agent at such office by crediting
         the account of Borrowers on the books of BA (or the commercial banking
         affiliate of any successor agent appointed pursuant to Section 10.9
         hereof, as applicable) with the aggregate of the amounts made available
         to the Agent by the Lenders and in like funds as received by the Agent.

                  (d After giving effect to any Borrowing, unless the Agent
         shall otherwise consent, there may not be more than six different
         Interest Periods in effect for all Borrowings.

         2.4 CONVERSION AND CONTINUATION ELECTIONS

                  (a Borrower Representative may, upon irrevocable written
         notice to the Agent in accordance with subsection 2.4(b):

                           (i elect, as of any Business Day, in the case of Base
                  Rate Loans, or as of the last day of the applicable Interest
                  Period, in the case of any other Type of Loans, to convert any
                  such Loans (or any part thereof in an amount not less than
                  $1,000,000, or that is in an integral multiple of $500,000 in
                  excess thereof) into Loans of any other Type; or

                           (ii elect, as of the last day of the applicable
                  Interest Period, to continue any Loans having Interest Periods
                  expiring on such day (or any part thereof in an amount not
                  less than $1,000,000, or that is in an integral multiple of
                  $500,000 in excess thereof) for another Interest Period;

         provided, that if at any time the aggregate amount of CD Rate Loans or
         Offshore Rate Loans in respect of any Borrowing is reduced, by payment,
         prepayment, or conversion of part thereof to be less than $1,000,000,
         such CD Rate Loans or Offshore Rate Loans, as the case may be, shall
         automatically convert into Base Rate Loans, and on and after such date
         the right of Borrowers to continue such Loans as, and convert such
         Loans into, Offshore Rate Loans or CD Rate Loans, as the case may be,
         shall terminate.



                                       24
<PAGE>   31


                  (b Borrower Representative shall deliver a Notice of
         Conversion/Continuation to be received by the Agent not later than
         10:00 a.m. (Chicago time) at least (i) three Business Days in advance
         of the Conversion/Continuation Date, if the Loans are to be converted
         into or continued as Offshore Rate Loans; (ii) two Business Days in
         advance of the Conversion/Continuation Date, if the Loans are to be
         converted into or continued as CD Rate Loans; and (iii) on the
         Conversion/Continuation Date, if the Loans are to be converted into
         Base Rate Loans, specifying:

                           (A0 the proposed Conversion/Continuation Date;

                           (B0 the aggregate amount of Loans to be converted or
                  continued;

                           (C0 the Type of Loans resulting from the proposed
                  conversion or continuation; and

                           (D0 other than in the case of conversions into Base
                  Rate Loans, the duration of the requested Interest Period.

                  (c If upon the expiration of any Interest Period applicable to
         CD Rate Loans or Offshore Rate Loans, Borrowers have failed to select
         timely a new Interest Period to be applicable to such CD Rate Loans or
         Offshore Rate Loans, as the case may be, or if any Default or Event of
         Default then exists, Borrowers shall be deemed to have elected to
         convert such CD Rate Loans or Offshore Rate Loans into Base Rate Loans
         effective as of the expiration date of such Interest Period.

                  (d The Agent will promptly notify each Lender of its receipt
         of a Notice of Conversion/Continuation, or, if no timely notice is
         provided by Borrower Representative, the Agent will promptly notify
         each Lender of the details of any automatic conversion. All conversions
         and continuations shall be made ratably according to the respective
         outstanding principal amounts of the Loans with respect to which the
         notice was given held by each Lender.

                  (e Unless the Majority Lenders otherwise consent, during the
         existence of a Default or Event of Default, Borrowers may not elect to
         have a Loan converted into or continued as an Offshore Rate Loan or a
         CD Rate Loan.

                  (f After giving effect to any conversion or continuation of
         Loans, unless the Agent shall otherwise consent, there may not be more
         than six different Interest Periods in effect for all Borrowings.

         2.5 VOLUNTARY TERMINATION OR REDUCTION COMMITMENTS. Borrowers may, upon
not less than five Business Days' prior notice to the Agent, terminate the
Commitments and this Agreement, or permanently reduce the Commitments by an
aggregate minimum amount of 





                                       25
<PAGE>   32

$1,000,000 or any multiple of $500,000 in excess thereof; unless, after giving
effect thereto and to any prepayments of Loans made on the effective date
thereof, the Total Outstandings would exceed the amount of the combined
Commitments then in effect. Once reduced in accordance with this Section , the
Commitments may not be increased (except pursuant to Section 2.15). Any
reduction of the Commitments shall be applied to reduce the Commitment of each
Lender according to its Pro Rata Share. All accrued commitment fees to, but not
including the effective date of any reduction or termination of Commitments,
shall be paid on the effective date of such reduction or termination. If
Borrowers terminate the Commitments, Borrowers shall pay all accrued and unpaid
interest, fees and other amounts payable hereunder on the date of such
termination. Upon the termination of the Commitments, this Agreement shall
terminate, except for the provisions of Article 4, Section 11.5 and such other
provisions hereof which are specified as surviving the payment of the
Obligations.

         2.6 OPTIONAL PREPAYMENTS. Subject to the proviso to subsection 2.4(a)
and to Section 4.4, Borrowers may, from time to time, upon irrevocable notice to
the Agent, which notice must be received by the Agent prior to 10:00 a.m.
Chicago time (i) two Business Days prior to the date of prepayment in the case
of Offshore Rate Loans or CD Rate Loans, and (ii) on the date of prepayment in
the case of Base Rate Loans, ratably prepay outstanding Loans designated by
Borrowers in whole or in part, in minimum amounts of $1,000,000 or any multiple
of $500,000 in excess thereof (or if any Base Rate Loan has been made pursuant
to subsection 2.18(b) or Section 3.3 in an aggregate amount equal to the
aggregate amount of such Base Rate Loan). Such notice of prepayment shall
specify the date and amount of such prepayment and the Loans to be prepaid. The
Agent will promptly notify each Lender of its receipt of any such notice, and of
such Lender's Pro Rata Share of such prepayment. If such notice is given by
Borrowers, Borrowers shall make such prepayment and the payment amount specified
in such notice shall be due and payable on the date specified therein, together
with accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.4. Unless the Agent is instructed otherwise by
Borrowers in writing, any prepayments pursuant to this Section 2.6 shall be
applied first to any Base Rate Loans. Borrowers may from time to time (upon
notice and procedures stated in Section 2.3 hereof) reborrow amounts which have
been paid by Borrowers as optional prepayments.

         2.7 REPAYMENT. Borrowers shall repay to the Lenders on the Termination
Date all Loans.

         2.8 INTEREST

                  (a Each Loan shall bear interest on the outstanding principal
         amount thereof from the applicable Borrowing Date at a rate per annum
         equal to (i) the Offshore Rate plus the Applicable Margin , or (ii) the
         CD Rate Plus the Applicable Margin, or (iii) the Base Rate, as the case
         may be (and subject to Borrowers right to convert to other Types of
         Loans under Section 2.4). Each Swing Line Loan shall bear interest on
         the outstanding principal amount thereof from the applicable Borrowing
         Date at a rate per annum equal to the Swing Line Rate or such other
         rate as may be agreed to from time to time by Borrowers and the Swing
         Line Lender.





                                       26
<PAGE>   33


                  (b Interest on each Loan shall be paid in arrears on each
         Interest Payment Date. Interest shall also be paid on the date of any
         conversion of Offshore Rate Loans under Section 2.4 and prepayment of
         Loans under Section 2.6 for the portion of the Loans so converted or
         prepaid and upon payment (including prepayment) in full thereof and,
         during the existence of any Event of Default, interest shall be paid on
         demand of the Agent at the request or with the consent of the Majority
         Lenders.

                  (c Notwithstanding subsection (a) of this Section, while any
         Event of Default exists or after acceleration, Borrowers shall pay
         interest (after as well as before entry of judgment thereon to the
         extent permitted by law) on the principal amount of all outstanding
         Loans and other Obligations, at a rate per annum which is determined by
         adding 2% per annum to the Applicable Margin then in effect for such
         Loans and, in the case of Obligations not subject to an Applicable
         Margin, at a rate per annum equal to the Base Rate plus 2%; provided,
         however, that, on and after the expiration of any Interest Period
         applicable to any Offshore Rate Loan or CD Rate Loan outstanding on the
         date of occurrence of such Event of Default or acceleration, the
         principal amount of such Loan shall, during the continuation of such
         Event of Default or after acceleration, bear interest at a rate per
         annum equal to the Base Rate plus 2%.

                  (d Anything herein to the contrary notwithstanding, the
         obligations of Borrowers to any Lender hereunder shall be subject to
         the limitation that payments of interest shall not be required for any
         period for which interest is computed hereunder, to the extent (but
         only to the extent) that contracting for or receiving such payment by
         such Lender would be contrary to the provisions of any law applicable
         to such Lender limiting the highest rate of interest that may be
         lawfully contracted for, charged or received by such Lender, and in
         such event Borrowers shall pay such Lender interest at the highest rate
         permitted by applicable law.





                                       27
<PAGE>   34


         2.9 FEES

                  (a ARRANGEMENT, AGENCY FEES. Holding Co. shall pay to the
         Agent and the Arranger for their own accounts, such fees as are
         required by the letter agreement ("Fee Letter") among Holding Co., the
         Agent and the Arranger dated September 28, 1998.

                  (b UPFRONT FEES. On the Closing Date Holding Co. shall pay to
         Agent for the benefit of Lenders such fees with respect to each
         Lender's Commitment ("Upfront Fees") as separately agreed by Arranger,
         Lenders and Borrowers.

                  (c COMMITMENT FEE. If during any calendar quarter prior to the
         Termination Date (or portion of the calendar quarter for 1998 and the
         calendar quarter in which the Termination Date occurs), the average
         daily balance of the Revolving Loan is less than $200,000,000,
         Borrowers shall pay to Agent, for the ratable benefit of the Lenders,
         in addition to any interest, late charges or liquidated damages due
         under this Agreement, an amount ("Commitment Fee") equal to the
         quotient of (i) an amount equal to (A) the positive difference between
         $200,000,000 and the average daily balance of the Loans during such
         calendar quarter (or portion of the calendar quarter for 1998 and the
         calendar quarter in which the Termination Date occurs), multiplied by
         (B) a rate equal to the Applicable Commitment Fee Percentage divided by
         (ii) four. The amount of any Commitment Fee shall be payable within
         five days after determination thereof by Agent and notice to Borrowers
         of the amount thereof.

                  (d L/C FEES. Borrowers agree to pay (i) to the Agent, for the
         ratable benefit of the Lenders, a per annum fee ("L/C Issuance Fee"),
         payable quarterly, in arrears, prorated for any period less than one
         year based on the Issuing Lender's customary practices, (a) with
         respect to the Letters of Credit which are cash collateralized in a
         manner acceptable to the Issuing Lender, equal to 0.250% of the undrawn
         face amount of such Letter of Credit from time to time, and (b) with
         respect to all other Letters of Credit, equal to the Applicable L/C Fee
         Percentage of the undrawn face amount of such Letter of Credit from
         time to time, in each case calculated on the basis of the actual daily
         undrawn face amount of Letters of Credit, and in any event the L/C
         Issuance Fee shall not be less than $150, plus (ii) to the applicable
         Issuing Lender, for such Issuing Lender's own account and not for the
         account of any Lender, in addition to the L/C Issuance Fee, such
         Issuing Lender's standard administrative operating fees and charges in
         effect from time to time for issuing and administering any Letter of
         Credit. In the event the applicable Issuing Lender consents to the
         extension or renewal of the term ("Extended Term") of a Letter of
         Credit pursuant to subsection 3.2(d) ("Extended Letter of Credit"),
         then Borrowers shall pay an additional L/C Issuance Fee with respect to
         each Extended Letter of Credit for each year or partial year the terms
         of such Extended Letter of Credit extends beyond the term specified in
         subsection 3.1(c). With respect to the payment of any fees or expenses
         that become due hereunder, Borrowers authorize and direct the Agent, at
         its option, to cause such payment to be paid when due by charging such
         payment as a Base Rate Loan advance pursuant to Section 2.3 of this
         Agreement.




                                       28
<PAGE>   35

         2.10  COMPUTATION OF FEES AND INTEREST

                  (a All computations of interest for Base Rate Loans when the
         Base Rate is determined by BA's "reference rate" shall be made on the
         basis of a year of 365 or 366 days, as the case may be, and actual days
         elapsed. All other computations of fees and interest shall be made on
         the basis of a 360-day year and actual days elapsed (which results in
         more interest being paid than if computed on the basis of a 365-day
         year). Interest and fees shall accrue during each period during which
         interest or such fees are computed from the first day thereof to the
         last day thereof.

                  (b Each determination of an interest rate by the Agent shall
         be conclusive and binding on Borrowers and the Lenders in the absence
         of manifest error. The Agent will, at the request of Borrowers or any
         Lender, deliver to Borrowers or the Lender, as the case may be, a
         statement showing the quotations used by the Agent in determining any
         interest rate and the resulting interest rate.

         2.11  PAYMENTS BY BORROWERS

                  (a All payments to be made by Borrowers shall be made without
         set-off, recoupment or counterclaim. Except as otherwise expressly
         provided herein, all payments by Borrowers shall be made to the Agent
         for the account of the Lenders at the Agent's Payment Office, and shall
         be made in dollars and in immediately available funds, no later than
         1:00 p.m. (Chicago time) on the date specified herein. The Agent will
         promptly distribute to each Lender its Pro Rata Share (or other
         applicable share as expressly provided herein) of such payment in like
         funds as received. Any payment received by the Agent later than 1:00
         p.m. (Chicago time) shall be deemed to have been received on the
         following Business Day and any applicable interest or fee shall
         continue to accrue.

                  (b Subject to the provisions set forth in the definition of
         "Interest Period" herein, whenever any payment is due on a day other
         than a Business Day, such payment shall be made on the following
         Business Day, and such extension of time shall in such case be included
         in the computation of interest or fees, as the case may be.

                  (c Unless the Agent receives notice from Borrowers prior to
         the date on which any payment is due to the Lenders that Borrowers will
         not make such payment in full as and when required, the Agent may
         assume that Borrowers have made such payment in full to the Agent on
         such date in immediately available funds and the Agent may (but shall
         not be so required), in reliance upon such assumption, distribute to
         each Lender on such due date an amount equal to the amount then due
         such Lender. If and to the extent Borrowers have not made such payment
         in full to the Agent, each Lender shall repay to the Agent on demand
         such amount distributed to such Lender, together with interest thereon
         at the Federal Funds Rate for each day from the date such amount is
         distributed to such Lender until the date repaid.




                                       29
<PAGE>   36


         2.12  PAYMENTS BY THE LENDERS TO THE AGENT

                  (a Unless the Agent receives notice from a Lender on or prior
         to the Closing Date or, with respect to any Borrowing after the Closing
         Date, at least one Business Day prior to the date of such Borrowing,
         that such Lender will not make available as and when required hereunder
         to the Agent for the account of Borrowers the amount of that Lender's
         Pro Rata Share of the Borrowing, the Agent may assume that each Lender
         has made such amount available to the Agent in immediately available
         funds on the Borrowing Date and the Agent may (but shall not be so
         required), in reliance upon such assumption, make available to
         Borrowers on such date a corresponding amount. If and to the extent any
         Lender shall not have made its full amount available to the Agent in
         immediately available funds and the Agent in such circumstances has
         made available to Borrowers such amount, that Lender shall on the
         Business Day following such Borrowing Date make such amount available
         to the Agent, together with interest at the Federal Funds Rate for each
         day during such period. A notice of the Agent submitted to any Lender
         with respect to amounts owing under this subsection (a) shall be
         conclusive, absent manifest error. If such amount is so made available,
         such payment to the Agent shall constitute such Lender's Loan on the
         date of Borrowing for all purposes of this Agreement. If such amount is
         not made available to the Agent on the Business Day following the
         Borrowing Date, the Agent will notify Borrowers of such failure to fund
         and, upon demand by the Agent, Borrowers shall pay such amount to the
         Agent for the Agent's account, together with interest thereon for each
         day elapsed since the date of such Borrowing, at a rate per annum equal
         to the interest rate applicable at the time to the Loans comprising
         such Borrowing.

                  (b The failure of any Lender to make any Loan on any Borrowing
         Date shall not relieve any other Lender of any obligation hereunder to
         make a Loan on such Borrowing Date, but no Lender shall be responsible
         for the failure of any other Lender to make the Loan to be made by such
         other Lender on any Borrowing Date.

         2.13  SHARING OF PAYMENTS, ETC. If, other than as expressly provided 
elsewhere herein (including in Section 2.15 with respect to any prepayment made
to give effect to a non-pro-rata subscription for an increase in the Commitments
or with respect to payments of principal of and interest on Swing Line Loans),
any Lender shall obtain any payment or other recovery (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of principal of or interest on any Loan, or any other amount payable
hereunder in excess of its Pro Rata Share (or other share contemplated
hereunder), such Lender shall immediately (a) notify the Agent of such fact, and
(b) purchase from the other Lenders such participations in the Loans made by
them as shall be necessary to cause such purchasing Lender to share the excess
payment pro rata with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the purchasing
Lender, such purchase shall to that extent be rescinded and each other Lender
shall repay to the purchasing Lender the purchase price paid therefor, together
with an amount equal to such paying Lender's ratable share (according to the
proportion of (i) the amount of such paying





                                       30
<PAGE>   37

Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Borrowers agree
that any Lender so purchasing a participation from another Lender may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 11.10) with respect to such
participation as fully as if such Lender were the direct creditor of Borrowers
in the amount of such participation. The Agent will keep records (which shall be
conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Lenders following
any such purchases or repayments.

         2.14  EXTENSION OF SCHEDULED TERMINATION DATE: SUBSTITUTION OF LENDERS

                  (a At any time during the ten-day period commencing on October
         30, 1999 and ending on November 8, 1999, Borrowers may, at their
         option, request all Lenders to extend the scheduled Termination Date by
         one year by means of a letter, addressed to each Lender and the Agent,
         substantially in the form of Exhibit H. Each Lender electing (in its
         sole and complete discretion) so to extend the scheduled Termination
         Date shall deliver signed counterparts of such letter to Borrowers and
         the Agent no later than 30 days after the date of such request by
         Borrowers (such 30th day, the "Extension Response Date"). Any Lender
         which does not deliver such counterparts by the Extension Response Date
         shall be deemed to have declined to extend the scheduled Termination
         Date). If all Lenders elect to extend the scheduled Termination Date,
         the scheduled Termination Date shall be extended for an additional
         one-year period on the date on which the Agent has received signed
         counterparts of such letter from all Lenders (and the Agent shall
         promptly notify Borrowers and the Lenders of such extensions). If all
         Lenders do not elect to extend the scheduled Termination Date, the
         provisions of subsection (b) below shall apply.

                  (b If the scheduled Termination Date is not extended pursuant
         to subsection (a) above after a request by Borrowers, Borrowers may, at
         any time prior to the 45th day after the Extension Response Date for
         such request, arrange for any Lender that did not elect to extend the
         Termination Date (a "Declining Lender") to assign its Loans, its
         Commitment and all of its other rights and obligations hereunder to one
         or more other Lenders and/or Eligible Assignees (any such Person, a
         "Successor Lender"); provided that no assignment to an Eligible
         Assignee which is not a Lender shall be effective without the prior
         written consent of the Agent (which consent shall not be unreasonably
         withheld or delayed). Any such assignment shall be made pursuant to an
         Assignment and Acceptance between the Declining Lender and each
         applicable Successor Lender (it being understood that no Declining
         Lender shall be required to make any such assignment unless all of such
         Declining Lender's Loans, Commitment and other rights and obligations
         hereunder are being assigned concurrently pursuant to one or more
         assignments). On the date of any such assignment, (i) the Successor
         Lender(s) shall pay to the Declining Lender an amount equal to the
         principal amount of all of such Declining Lender's outstanding Loans,
         (ii) Borrowers shall pay to the Declining Lender an amount equal to all
         accrued interest, fees and other amounts then owed to such Declining
         Lender hereunder or in connection herewith (including any amount
         payable




                                       31
<PAGE>   38

         pursuant to Section 4.4, assuming for such purpose that such Declining
         Lender's Offshore Rate Loans were prepaid on the date of such
         assignment) and (iii) the Declining Lender shall cease to be a Lender
         hereunder. If BA shall become a Declining Lender and is replaced as a
         Lender (and as an Issuing Lender and Swing Line Lender) pursuant to
         this subsection (b), BA shall resign as Agent and the provisions of
         Section 10.9 shall apply.

                  (c If all Declining Lenders have been replaced pursuant to
         subsection (b) on or before the 45th day after the applicable Extension
         Response Date, then the scheduled Termination Date shall be extended
         for an additional one-year period (and the Agent shall promptly notify
         Borrowers and the Lenders of such extension).

         2.15 OPTIONAL INCREASE COMMITMENTS. Borrowers may at any time, by means
of a letter to the Agent and each Lender substantially in the form of Exhibit I
request that the Lenders increase the combined Commitments; provided that (i)
such letter shall be accompanied by evidence reasonably satisfactory to the
Agent that the board of directors of each Borrower has approved such increase
and (ii) in no event shall the aggregate amount of the combined Commitments
exceed $250,000,000 without the written consent of all Lenders. Each Lender
shall have the option (in its sole and complete discretion) to subscribe for its
proportionate share of such increase, according to its then-existing Pro Rata
Share. Each Lender shall respond to Borrowers' request within 20 Business Days
by submitting a response in the form of Attachment 1 to Exhibit I to the Agent
(and any Lender not responding within such period shall be deemed to have
declined such request). At the option of Borrowers, any part of the proposed
increase not so subscribed may be assumed, within ten Business Days after all
Lenders have responded to (or are deemed to have declined) such request, by one
or more existing Lenders and/or by one or more Persons meeting the
qualifications of an Eligible Assignee, in amounts which are acceptable to
Borrowers; it being understood that any assumption by a Person which is not an
existing Lender shall be subject to consent of the Agent (which consent shall
not be unreasonably withheld or delayed). Any increase in the combined
Commitments pursuant to this Section 2.15 shall become effective on the earliest
to occur of (a) the date on which the proposed increase has been fully
subscribed, (b) ten Business Days after the date on which all Lenders have
responded to (or are deemed to have declined) Borrowers' request for an
increase, and (c) the date, which shall not be earlier than the date on which
all Lenders have responded to (or are deemed to have declined) Borrowers'
request for an increase, on which Borrower Representative notifies Agent that
Borrowers accept an increase in the combined Commitments which is less than the
full amount of the requested increase. The Agent shall promptly notify Borrowers
and the Lenders of any increase in the amount of the combined Commitments
pursuant to this Section 2.15 and of the Commitment and Pro Rata Share of each
Lender after giving effect thereto. Borrowers acknowledge that, in order to
maintain Loans in accordance with each Lender's Pro Rata Share, a reallocation
of the Commitments as a result of a non-pro-rata subscription to an increase in
the combined Commitments may require prepayment of all or portions of certain
Loans on the date of such increase (and any such prepayment shall be subject to
the provisions of Section 4.4).

         2.16 SWING LINE COMMITMENT. Subject to the terms and conditions of this
Agreement, the Swing Line Lender agrees to make loans to Borrowers on a
revolving basis (each such loan, a "Swing Line Loan") from time to time on any
Business Day during the period from the Effective Date 




                                       32
<PAGE>   39

to the Termination Date in an aggregate principal amount at any one time
outstanding not to exceed $5,000,000; provided that after giving effect to any
proposed Swing Line Loan, the Total Outstandings shall not exceed the combined
Commitments.

         2.17 BORROWING PROCEDURES FOR SWING LINE LOANS. Borrower Representative
shall provide a Notice of Swing Line Loan or telephonic notice (followed by a
confirming Notice of Swing Line Loan) of a proposed Swing Line Loan to the Agent
and the Swing Line Lender not later than 12:00 noon Chicago time on the proposed
Borrowing Date. Each such notice shall be effective upon receipt by the Agent
and the Swing Line Lender and shall specify the date and the principal amount of
such Swing Line Loan. Unless the Swing Line Lender has received written notice
prior to 11:00 a.m. Chicago time on the proposed Borrowing Date from the Agent
or any Lender that one or more of the conditions precedent set forth in Article
5 with respect to such Swing Line Loan is not then satisfied, the Swing Line
Lender shall pay over the requested principal amount to Borrowers on the
requested Borrowing Date in immediately available funds. Each Swing Line Loan
shall be made on a Business Day and shall be in the amount of $1,000,000 or a
higher integral multiple thereof. The Swing Line Lender will promptly notify the
Agent of the making and amount of each Swing Line Loan. Each Swing Line Loan
shall be paid in full by Borrowers on or before the seventh Business Day after
the Borrowing Date for such Swing Line Loan and on the Termination Date.

         2.18 PREPAYMENT OR REFUNDING OF SWING LINE LOANS

                  (a Borrowers may, at any time and from time to time, prepay
         any Swing Line Loan to Borrowers in whole or in part, in an amount
         equal to $1,000,000 or a higher integral multiple thereof. Borrowers
         shall deliver a notice of prepayment in accordance with Section 11.2 to
         be received by the Agent and the Swing Line Lender not later than 11:00
         a.m. Chicago time on the Business Day of such prepayment, specifying
         the date and amount of such prepayment. If such notice is given by
         Borrowers, the payment amount specified in such notice shall be due and
         payable on the date specified therein.

                  (b The Swing Line Lender may, at any time in its sole and
         absolute discretion, and shall, on the sixth Business Day after the
         Borrowing Date for each Swing Line Loan, on behalf of Borrowers (which
         hereby irrevocably direct the Swing Line Lender to act on their
         behalf), request each Lender to make a Loan in an amount equal to such
         Lender's Pro Rata Share of the principal amount of the Swing Line Loans
         to Borrowers outstanding on the date such notice is given. Unless any
         of the events described in subsection 9.1(f) or (g) shall have occurred
         (in which event the procedures of Section 2.19 shall apply), and
         regardless of whether the conditions precedent set forth in this
         Agreement to the making of Loans are then satisfied or the aggregate
         amount of such Loans is not in the minimum or integral amount otherwise
         required hereunder, each Lender shall make the proceeds of its Loan
         available to the Agent for the account of the Swing Line Lender at the
         Agent's Payment Office prior to 12:00 noon Chicago time in immediately
         available funds on the Business Day next succeeding the date such
         notice is given. The proceeds of such Loans shall be immediately
         applied to repay the outstanding Swing Line Loans of Borrowers. All
         Loans made pursuant to this Section 2.18 shall be Base Rate Loans (but,
         subject to the other provisions of this Agreement, may be converted to
         Offshore Rate Loans or CD Rate Loans).



                                       33
<PAGE>   40


         2.19 PARTICIPATIONS IN SWING LINE LOANS

                  (a) If an event described in subsection 9.1(f) or (g) exists
         (or for any reason the Lenders may not make Loans pursuant to Section
         2.18, each Lender will, upon notice from the Agent, purchase from the
         Swing Line Lender (and the Swing Line Lender will sell to each Lender)
         an undivided participation interest in all outstanding Swing Line Loans
         in an amount equal to its Pro Rata Share of the outstanding principal
         amount of the Swing Line Loans (and each Lender will immediately
         transfer to the Agent, for the account of the Swing Line Lender, in
         immediately available funds, the amount of its participation).

                  (b) Whenever, at any time after the Swing Line Lender has
         received payment for any Lender's participation interest in the Swing
         Line Loans pursuant to subsection 2.19(a), the Swing Line Lender
         receives any payment on account thereof, the Swing Line Lender will
         distribute to the Agent for the account of such Lender its
         participation interest in such amount (appropriately adjusted, in the
         case of interest payments, to reflect the period of time during which
         such Lender's participation interest was outstanding and funded) in
         like funds as received; provided, however, that in the event that such
         payment received by the Swing Line Lender is required to be returned,
         such Lender will return to the Agent for the account of the Swing Line
         Lender any portions thereof previously distributed by the Swing Line
         Lender to it in like funds as such payment is required to be returned
         by the Swing Line Lender.

         2.20 PARTICIPATION OBLIGATIONS UNCONDITIONAL

                  (a) Each Lender's obligation to make Loans pursuant to Section
         2.18 and/or to purchase participation interests in Swing Line Loans
         pursuant to Section 2.19 shall be absolute and unconditional and shall
         not be affected by any circumstance whatsoever, including (a) any
         set-off, counterclaim, recoupment, defense or other right which such
         Lender may have against the Swing Line Lender, either Borrower or any
         other Person for any reason whatsoever; (b) the occurrence or
         continuance of an Event of Default or Default; (c) any adverse change
         in the condition (financial or otherwise) of either Borrower or any
         other Person; (d) any breach of this Agreement or any other Loan
         Document by either Borrower or any other Person; (e) any inability of
         Borrowers to satisfy the conditions precedent to borrowing set forth in
         this Agreement on the date upon which any such Loan is to be made or
         any participation interest therein in to be purchased; or (f) any other
         circumstance, happening or event whatsoever, whether or not similar to
         any of the foregoing.

                  (b) Notwithstanding the provisions of subsection 2.20(a), no
         Lender shall be required to make any Loan to Borrowers to refund a
         Swing Line Loan pursuant to Section 2.18 or to purchase a participation
         interest in a Swing Line Loan pursuant to Section 2.19 if, prior to the
         making by the Swing Line Lender of such Swing Line Loan, the Swing Line



                                       34
<PAGE>   41


         Lender received written notice from any Lender specifying that such
         Lender believed in good faith that one or more of the conditions
         precedent to the making of such Swing Line Loan were not satisfied and,
         in fact, such conditions precedent were not satisfied at the time of
         the making of such Swing Line Loan; provided that the obligation of
         such Lender to make such Loans and to purchase such participation
         interests shall be reinstated upon the earlier to occur of (i) the date
         on which such Lender notifies the Swing Line Lender that its prior
         notice has been withdrawn and (ii) the date on which all conditions
         precedent to the making of such Swing Line Loan have been satisfied (or
         waived by the Majority Lenders or all Lenders, as applicable).

         2.21 CONDITIONS TO SWING LINE LOANS. Notwithstanding any other
provision of this Agreement, the Swing Line Lender shall not be obligated to
make any Swing Line Loan if a Default or an Event of Default exists or would
result therefrom.

         2.22 APPOINTMENT OF BORROWER REPRESENTATIVE. Each Borrower hereby
designates Holding Co. as its representative and agent on its behalf for the
purposes of issuing Notices of Borrowings, Notices of Swing Line Loans, Requests
for Extension of Termination Date and Requests for Increase in Commitments,
giving instructions with respect to the disbursement of the proceeds of the
Loans, selecting interest rate options, requesting Letters of Credit, giving and
receiving all other notices and consents hereunder or under any of the other
Loan Documents and taking all other actions (including in respect of compliance
with covenants) on behalf of any Borrower or Borrowers under the Loan Documents.
Borrower Representative hereby accepts such appointment. Agent and each Lender
may regard any notice or other communication pursuant to any Loan Document from
Borrower Representative as a notice or communication from all Borrowers, and may
give any notice or communication required or permitted to be given to any
Borrower or Borrowers hereunder to Borrower Representative on behalf of such
Borrower or Borrowers. Each Borrower agrees that each notice, election,
representation and warranty, covenant, agreement and undertaking made on its
behalf by Borrower Representative shall be deemed for all purposes to have been
made by such Borrower and shall be binding upon and enforceable against such
Borrower to the same extent as if the same had been made directly by such
Borrower.

                                    ARTICLE 3

                              THE LETTERS OF CREDIT

         3.1 THE LETTER OF CREDIT SUBFACILITY.

                  (a) On the terms and conditions set forth herein (i) each
         Issuing Lender agrees, (A) from time to time on any Business Day during
         the period from the Closing Date to the Termination Date to issue
         Letters of Credit and/or Banker's Acceptances for the account of either
         Borrower, and to amend or renew Letters of Credit and/or Banker's
         Acceptances previously issued by it, in accordance with subsections
         3.2(c) and 3.2(d), and (B) to honor properly drawn drafts under the
         Letters of Credit issued by it; and (ii) the Lenders severally 




                                       35
<PAGE>   42

          agree to participate in Letters of Credit and Banker's Acceptances
          Issued for the account of either Borrower; provided that no Issuing
          Lender shall be obligated to Issue, and no Lender shall be obligated
          to participate in, any Letter of Credit if as of the date of Issuance
          of such Letter of Credit (the "Issuance Date") (1) the Total
          Outstandings exceed the combined Commitments, (2) the Effective Amount
          of all L/C Obligations would exceed the L/C Commitment, or (3) the
          participation of any Lender in the Effective Amount of all L/C
          Obligations plus the participation of such Lender in the principal
          amount of all outstanding Swing Line Loans plus the outstanding
          principal amount of the Loans of such Lender would exceed such
          Lender's Commitment. Within the foregoing limits, and subject to the
          other terms and conditions hereof, the ability of the Borrowers to
          obtain Letters of Credit shall be fully revolving, and, accordingly,
          the Borrowers may, during the foregoing period, obtain Letters of
          Credit to replace Letters of Credit which have expired or which have
          been drawn upon and reimbursed.

                  (b) No Issuing Lender shall be under any obligation to Issue
          any Letter of Credit if:

                           (i) any order, judgment or decree of any Governmental
                  Authority or arbitrator shall by its terms purport to enjoin
                  or restrain such Issuing Lender from Issuing such Letter of
                  Credit, or any Requirement of Law applicable to such Issuing
                  Lender or any request or directive (whether or not having the
                  force of law) from any Governmental Authority with
                  jurisdiction over such Issuing Lender shall prohibit, or
                  request that such Issuing Lender refrain from, the Issuance of
                  letters of credit generally or such Letter of Credit in
                  particular or shall impose upon such Issuing Lender with
                  respect to such Letter of Credit any restriction, reserve or
                  capital requirement (for which such Issuing Lender is not
                  otherwise compensated hereunder) not in effect on the Closing
                  Date, or shall impose upon such Issuing Lender any
                  unreimbursed loss, cost or expense which was not applicable on
                  the Closing Date and which such Issuing Lender in good faith
                  deems material to it (it being understood that the applicable
                  Issuing Lender shall promptly notify the Borrowers and the
                  Agent of any of the foregoing events or circumstances);


                           (ii) such Issuing Lender has received written notice
                  from any Lender, the Agent or either Borrower, on or prior to
                  the Business Day prior to the requested date of Issuance of
                  such Letter of Credit or Bankers Acceptance, that one or more
                  of the applicable conditions contained in Section 5 is not
                  then satisfied;

                           (iii) the expiry date of such requested Letter of
                  Credit or Bankers Acceptance is after the Termination Date,
                  unless all of the Lenders have approved such expiry date in
                  writing;



                                       36
<PAGE>   43


                           (iv) such Letter of Credit does not provide for
                  drafts, or is not otherwise in form and substance acceptable
                  to such Issuing Lender, or the Issuance of a Letter of Credit
                  or Bankers Acceptance shall violate any applicable policies of
                  such Issuing Lender; or

                           (v) such Letter of Credit or Bankers Acceptance is
                  denominated in a currency other than Dollars.

                  (c) Each Letter of Credit shall by its terms expire not later
         than the earlier of (i) the first anniversary of the date of issuance
         or extension (subject to extension or renewal by the Issuing Lender as
         contemplated by Section 3.2) and (ii) the Termination Date. Each
         Bankers Acceptance shall have a term of six months or less. Each Letter
         of Credit and each Bankers Acceptance shall by its terms provide for
         payment of drawings in Dollars.

                  (d) As of the Closing Date, the outstanding Letters of Credit
         listed on Schedule 3.1 which were originally issued pursuant to the
         Existing Credit Agreement shall be deemed to be issued by the Issuing
         Lender and outstanding under this Agreement and shall be subject to all
         of the terms and conditions of this Agreement.

         3.2 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT.

                  (a) Each Letter of Credit shall be issued upon the irrevocable
         written request of Borrowers Representative received by the applicable
         Issuing Lender (with a copy sent by Borrower's Representative to the
         Agent) at least one Business Day (or such shorter time as the Issuing
         Lender and the Agent may agree in a particular instance in their sole
         discretion) prior to the proposed date of issuance. Each such request
         for issuance of a Letter of Credit shall be by facsimile, confirmed
         immediately (by messenger or overnight courier) in an original writing,
         in the form of an L/C Application, and shall specify in form and detail
         satisfactory to the applicable Issuing Lender: (i) the face amount of
         the Letter of Credit; (ii) the expiry date of the Letter of Credit;
         (iii) the name and address of the beneficiary thereof; (iv) the
         documents to be presented by the beneficiary of the Letter of Credit in
         case of any drawing thereunder; (v) the full text of any certificate to
         be presented by the beneficiary in case of any drawing thereunder; (vi)
         the Borrower requesting the Issuance of such Letter of Credit; and
         (vii) such other matters as such Issuing Lender may require.

                  (b) Promptly upon receipt of any L/C Application or L/C
         Amendment Application, the applicable Issuing Lender will confirm with
         the Agent (by telephone or in writing) that the Agent has received a
         copy of such L/C Application or L/C Amendment Application from the
         Borrowers and, if not, such Issuing Lender will provide the Agent with
         a copy thereof. Unless the applicable Issuing Lender has received on or
         before the Business Day immediately preceding the date such Issuing
         Lender is to issue a requested Letter of Credit, (A) notice from the
         Agent directing such Issuing Lender not to issue such Letter of Credit
         because such issuance is not then permitted under subsection 3.1(a) as
         a result of the 




                                       37
<PAGE>   44

         limitations set forth in clauses (1) through (3) thereof or (B) a
         notice described in subsection 3.1(b)(ii), then, subject to the terms
         and conditions hereof, such Issuing Lender shall, on the requested
         date, issue a Letter of Credit for the account of Borrowers in
         accordance with such Issuing Lender's usual and customary business
         practices.

                  (c) From time to time while a Letter of Credit is outstanding
         and prior to the Termination Date, the applicable Issuing Lender will,
         upon the written request of Borrower Representative received by such
         Issuing Lender (with a copy sent by Borrower Representative to the
         Agent) at least one Business Day (or such shorter time as the
         applicable Issuing Lender and the Agent may agree in a particular
         instance in their sole discretion) prior to the proposed date of
         amendment, amend any Letter of Credit issued by it. Each such request
         for amendment of a Letter of Credit shall be made by facsimile,
         confirmed immediately (by messenger or overnight courier) in an
         original writing, made in the form of an L/C Amendment Application and
         shall specify in form and detail satisfactory to such Issuing Lender:
         (i) the Letter of Credit to be amended; iii) the proposed date of
         amendment of such Letter of Credit (which shall be a Business Day);
         (iii) the nature of the proposed amendment, and (iv) such other matters
         as such Issuing Lender may require. No Issuing Lender shall have any
         obligation to amend any Letter of Credit if: (A) such Issuing Lender
         would have no obligation, at such time to issue such Letter of Credit
         in its amended form under the terms of this Agreement; or (B) the
         beneficiary of such Letter of Credit does not accept the proposed
         amendment to such Letter of Credit. The Agent will promptly notify the
         Lenders of any Issuance of a Letter of Credit.

                  (d) The Issuing Lenders and the Lenders agree that, while a
         Letter of Credit is outstanding and prior to the Termination Date, at
         the option of Borrower Representative and upon the written request of
         Borrower Representative received by the applicable Issuing Lender (with
         a copy sent by Borrower Representative to the Agent) at least one
         Business Day (or such shorter time as the applicable Issuing Lender and
         the Agent may agree in a particular instance in their sole discretion)
         prior to the proposed date of notification of renewal, the applicable
         Issuing Lender shall be entitled to authorize the automatic renewal of
         any Letter of Credit issued by it. Each such request for renewal of a
         Letter of Credit shall be made by facsimile, confirmed immediately in
         an original writing, in the form of an L/C Amendment Application, and
         shall specify in form and detail satisfactory to the applicable Issuing
         Lender: (i) the Letter of Credit to be renewed; (ii) the proposed date
         of notification of renewal of such Letter of Credit (which shall be a
         Business Day); (iii) the revised expiry date of such Letter of Credit
         (which, unless all Lenders otherwise consent in writing, shall be prior
         to the Termination Date); and (iv) such other matters pertaining to
         such Letter of Credit as such Issuing Lender may reasonably require. No
         Issuing Lender shall be under any obligation to renew any Letter of
         Credit if: (A) such Issuing Lender would have no obligation at such
         time to issue or amend such Letter of Credit in its renewed form under
         the terms of this Agreement; or (B) the beneficiary of such Letter of
         Credit does not accept the proposed renewal of such Letter of Credit.
         If any outstanding Letter of Credit shall provide that it shall be
         automatically renewed unless the beneficiary thereof receives notice
         from the applicable 





                                       38
<PAGE>   45

         Issuing Lender that such Letter of Credit shall not be renewed, and if
         at the time of renewal such Issuing Lender would be entitled to
         authorize the automatic renewal of such Letter of Credit in accordance
         with this subsection 3.2(d) upon the request of Borrowers but such
         Issuing Lender shall not have received any L/C Amendment Application
         from Borrowers with respect to such renewal or other written direction
         by Borrowers with respect thereto, such Issuing Lender shall
         nonetheless be permitted to allow such Letter of Credit to renew, and
         Borrowers and the Lenders hereby authorize any such renewal, and,
         accordingly, such Issuing Lender shall be deemed to have received an
         L/C Amendment Application from Borrowers requesting such renewal.

                  (e) Each Issuing Lender may, at its election (or as required
         by the Agent at the direction of the Majority Lenders), deliver any
         notice of termination or other communication to any Letter of Credit
         beneficiary or transferee, and take any other action as necessary or
         appropriate, at any time and from time to time, in order to cause the
         expiry date of such Letter of Credit to be a date not later than the
         Termination Date.

                  (f) This Agreement shall control in the event of any conflict
         with any L/C-Related Document (other than any Letter of Credit).

                  (g) Each Issuing Lender will deliver to the Agent,
         concurrently or promptly following its delivery of a Letter of Credit,
         or amendment to or renewal of a Letter of Credit, to an advising bank
         or a beneficiary, a true and complete copy of such Letter of Credit or
         of such amendment or renewal.

         3.3 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS.

                  (a) Immediately upon the Issuance of each Letter of Credit on
         or after the Initial Closing Date, each Lender shall be deemed to and
         hereby irrevocably and unconditionally agrees to, purchase from the
         applicable Issuing Lender a participation in such Letter of Credit and
         each drawing thereunder in an amount equal to the product of (i) such
         Lender's Pro Rata Share times (ii) the maximum amount available to be
         drawn under such Letter of Credit and the amount of such drawing,
         respectively. For purposes of Section 2.1, each Issuance of a Letter of
         Credit shall be deemed to utilize the Commitment of each Lender by an
         amount equal to the amount of such participation.

                  (b) In the event of any request for a drawing under a Letter
         of Credit by the beneficiary or transferee thereof, the applicable
         Issuing Lender will promptly notify Borrowers and the Agent. Borrowers
         shall (subject, if applicable, to their right to obtain Base Rate Loans
         as provided below) reimburse the applicable Issuing Lender prior to
         10:30 a.m. Chicago time on each date that any amount is paid by such
         Issuing Lender under any Letter of Credit (each such date, an "Honor
         Date") in an amount equal to the amount so paid by such Issuing Lender;
         provided that, to the extent that any Issuing Lender accepts a drawing
         under a Letter of Credit after 10:30 a.m. Chicago time Borrowers will
         not be obligated to reimburse such 




                                       39
<PAGE>   46

          Issuing Lender until the next Business Day and the "Honor Date" for
          such Letter of Credit shall be such next Business Day. If Borrowers
          fail to reimburse an Issuing Lender for the full amount of any drawing
          under any Letter of Credit by 10:30 a.m. Chicago time on the Honor
          Date, such Issuing Lender will promptly notify the Agent and the Agent
          will promptly notify each Lender thereof, and Borrowers shall be
          deemed to have requested that Base Rate Loans be made by the Lenders
          to be disbursed on the Honor Date under such Letter of Credit, subject
          to the amount of the unutilized portion of the combined Commitments
          and subject to the conditions set forth in Section 5.2 other than
          Section 5.2(a). Any notice given by the Issuing Lender or the Agent
          pursuant to this subsection 3.3(b) may be oral if immediately
          confirmed in writing (including by facsimile); provided that the lack
          of such an immediate confirmation shall not affect the conclusiveness
          or binding effect of such notice.

                  (c) Each Lender shall upon any notice pursuant to subsection
         3.3(b) make available to the Agent for the account of the applicable
         Issuing Lender an amount in Dollars and in immediately available funds
         equal to its Pro Rata Share of the amount of the drawing, whereupon the
         Lenders shall (subject to subsection 3.3(d)) each be deemed to have
         made a Loan consisting of a Base Rate Loan to Borrowers in such amount.
         If any Lender so notified fails to make available to the Agent for the
         account of the applicable Issuing Lender the amount of such Lender's
         Pro Rata Share of the amount of such drawing by no later than 1:00 p.m.
         Chicago time on the Honor Date, then interest shall accrue on such
         Lender's obligation to make such payment, from the Honor Date to the
         date such Lender makes such payment, at a rate per annum equal to the
         Federal Funds Rate in effect from time to time during such period. The
         Agent will promptly give notice of the occurrence of the Honor Date,
         but failure of the Agent to give any such notice on the Honor Date or
         in sufficient time to enable any Lender to effect such payment on such
         date shall not relieve such Lender from its obligations under this
         Section 3.3.

                  (d) With respect to any unreimbursed drawing that is not
         converted into Base Rate Loans, in whole or in part, because of the
         failure of Borrowers to satisfy the conditions set forth in Section 5.2
         (other than subsection 5.2(a) which need not be satisfied) or for any
         other reason, Borrowers shall be deemed to have incurred from the
         applicable Issuing Lender an L/C Borrowing in the amount of such
         drawing, which L/C Borrowing shall be due and payable on demand and
         shall bear interest (payable on demand) at a rate per annum equal to
         the Base Rate plus 2%, and each Lender's payment to such Issuing Lender
         pursuant to subsection 3.3(c) shall be deemed payment in respect of its
         participation in such L/C Borrowing and shall constitute an L/C Advance
         from such Lender in satisfaction of its participation obligation under
         this Section 3.3.

                  (e) Each Lender's obligation in accordance with this Agreement
         to make the Loans or L/C Advances, as contemplated by this Section 3.3,
         as a result of a drawing under a Letter of Credit, shall be absolute
         and unconditional and without recourse to any Issuing Lender and shall
         not be affected by any circumstance, including (i) any set-off,
         counterclaim, recoupment, defense or other right which such Lender may
         have against the applicable Issuing 


                                       40
<PAGE>   47

         Lender, Borrowers or any other Person for any reason whatsoever; (ii)
         the occurrence or continuance of a Default or an Event of Default, or a
         Material Adverse Effect; or (iii) any other circumstance, happening or
         event whatsoever, whether or not similar to any of the foregoing;
         provided that each Lender's obligation to make Loans under this Section
         3.3 is subject to the conditions set forth in Section 5.2 (other than
         subsection 5.2(a)).


          3.4     REPAYMENT OF PARTICIPATIONS.

                  (a) Upon (and only upon) receipt by the Agent for the account
         of an Issuing Lender of immediately available funds from or on behalf
         of Borrowers (i) in reimbursement of any payment made by such Issuing
         Lender under a Letter of Credit with respect to which any Lender has
         paid the Agent for the account of such Issuing Lender for such Lender's
         participation in such Letter of Credit pursuant to Section 3.3 or (ii)
         in payment of interest thereon, the Agent will pay to each Lender, in
         the same funds as those received by the Agent for the account of such
         Issuing Lender, the amount of such Lender's Pro Rata Share of such
         funds, and such Issuing Lender shall receive the amount of the Pro Rata
         Share of such funds of any Lender that did not so pay the Agent for the
         account of such Issuing Lender.

                  (b) If the Agent or an Issuing Lender is required at any time
         to return to either Borrower, or to a trustee, receiver, liquidator or
         custodian, or to any official in any Insolvency Proceeding, any portion
         of any payment made by or on behalf of such Borrower to the Agent for
         the account of an Issuing Lender pursuant to subsection 3.4(a) in
         reimbursement of a payment made under a Letter of Credit or interest or
         fee thereon, each Lender shall, on demand of the Agent, forthwith
         return to the Agent or the applicable Issuing Lender the amount of its
         Pro Rata Share of any amount so returned by the Agent or such Issuing
         Lender plus interest thereon from the date such demand is made to the
         date such amount is returned by such Lender to the Agent or such
         Issuing Lender, at a rate per annum equal to the Federal Funds Rate in
         effect from time to time.

          3.5     ROLE OF THE ISSUING LENDER.

                  (a) Each Lender and each Borrower agree that, in paying any
         drawing under a Letter of Credit, the applicable Issuing Lender shall
         not have any responsibility to obtain any document (other than any
         sight draft and certificate expressly required by such Letter of
         Credit) or to ascertain or inquire as to the validity or accuracy of
         any such document or the authority of the Person executing or
         delivering any such document.

                  (b) No Issuing Lender or Agent-Related Person, nor any of
         their respective correspondents, participants or assignees, shall be
         liable to any Lender for: (i) any action taken or omitted in connection
         herewith at the request or with the approval of the Lenders (including
         the Majority Lenders, as applicable); (ii) any action taken or omitted
         in the absence of gross negligence or willful misconduct; or (iii) the
         due execution, effectiveness, validity or enforceability of any L/C
         Related Document.





                                       41
<PAGE>   48


                  (c) The Borrowers hereby assume all risks of the acts or
         omissions of any beneficiary or transferee with respect to its use of
         any Letter of Credit; provided that this assumption is not intended to,
         and shall not, preclude either Borrower pursuing such rights and
         remedies as it may have against the beneficiary or transferee at law or
         under any other agreement. No Issuing Lender or Agent-Related Person,
         nor any of their respective correspondents, participants or assignees,
         shall be liable or responsible for any of the matters described in
         clauses (i) through (vii) of Section 3 6; provided that, anything in
         such clauses to the contrary notwithstanding, Borrowers may have a
         claim against an Issuing Lender, and such Issuing Lender may be liable
         to Borrowers, to the extent, but only to the extent, of any direct, as
         opposed to consequential or exemplary, damages suffered by Borrowers
         which Borrowers prove were caused by such Issuing Lender's willful
         misconduct or gross negligence or such Issuing Lender's willful failure
         to pay under any Letter of Credit after the presentation to it by the
         beneficiary of a sight draft and certificate(s) and/or documents
         strictly complying with the terms and conditions of such Letter of
         Credit. In furtherance and not in limitation of the foregoing: (i) an
         Issuing Lender may accept documents that appear on their face to be in
         order, without responsibility for further investigation, regardless of
         any notice or information to the contrary (absent such Issuing Lender's
         willful misconduct or gross negligence); and (ii) no Issuing Lender
         shall be responsible for the validity or sufficiency of any instrument
         transferring or assigning or purporting to transfer or assign a Letter
         of Credit or the rights or benefits thereunder or proceeds thereof in
         whole or in part, which may prove to be invalid or ineffective for any
         reason (absent such Issuing Lender's gross negligence or willful
         misconduct).

         3.6     OBLIGATIONS ABSOLUTE.  The obligations of Borrowers under this
Agreement and any L/C-Related Document to reimburse the applicable Issuing
Lender for a drawing under a Letter of Credit issued for the account of either
Borrower, and to repay any L/C Borrowing and any drawing under any such Letter
of Credit converted into Loans, shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement and each
such other L/C-Related Document under all circumstances, including the
following:

                           (i) any lack of validity or enforceability of this
                  Agreement or any L/C-Related Document;

                           (ii) any change in the time, manner or place of
                  payment of, or in any other term of, all or any of the
                  obligations of the applicable Borrower in respect of any
                  Letter of Credit or any other amendment or waiver of or any
                  consent to departure from all or any of the L/C-Related
                  Documents;

                           (iii) the existence of any claim, set-off, defense or
                  other right that either Borrower may have at any time against
                  any beneficiary or any transferee of any Letter of Credit (or
                  any Person for whom any such beneficiary or any such
                  transferee may be acting), the applicable Issuing Lender or
                  any other Person, whether in connection


                                       42
<PAGE>   49
                  with this Agreement, the transactions contemplated hereby or
                  by any L/C-Related Document or any unrelated transaction;

                           (iv) any draft, demand, certificate or other document
                  presented under any Letter of Credit proving to be forged,
                  fraudulent, invalid or insufficient in any respect or any
                  statement therein being untrue or inaccurate in any respect;
                  or any loss or delay in the transmission or otherwise of any
                  document required in order to make a drawing under any Letter
                  of Credit;

                           (v) any payment by an Issuing Lender under any Letter
                  of Credit against presentation of a draft or certificate or
                  document that does not strictly comply with the terms of such
                  Letter of Credit; or any payment made by an Issuing Lender
                  under any Letter of Credit to any Person purporting to be a
                  trustee in bankruptcy, debtor-in-possession, assignee for the
                  benefit of creditors, liquidator, receiver or other
                  representative of or successor to any beneficiary or any
                  transferee of any Letter of Credit, including any arising in
                  connection with any Insolvency Proceeding;

                           (vi) any exchange, release or non-perfection of any
                  collateral, or any release or amendment or waiver of or
                  consent to departure from any other guarantee, for all or any
                  of the obligations of either Borrower in respect of any Letter
                  of Credit; or

                           (vii) any other circumstance or happening whatsoever,
                  whether or not similar to any of the foregoing, including any
                  other circumstance that might otherwise constitute a defense
                  available to, or a discharge of, such Borrowers.

         3.7      If any Letter of Credit remains outstanding and partially or 
wholly undrawn as of the Termination Date, then Borrowers jointly and severally
agree to immediately Cash Collateralize the L/C Obligations in an amount equal
to the maximum amount then available to be drawn under all Letters of Credit.

         3.8     The Uniform Customs and Practice for Documentary Credits as 
published by the International Chamber of Commerce ("UCP") most recently at the
time of issuance of any Letter of Credit shall (unless otherwise expressly
provided in such Letter of Credit) apply to such Letter of Credit.




                                       43
<PAGE>   50

                                    ARTICLE 4

                     TAXES, YIELD PROTECTION AND ILLEGALITY

         4.1      TAXES.

                  (a) Any and all payments by Borrowers to any Lender or the
         Agent under this Agreement and any other Loan Document shall be made
         free and clear of, and without deduction or withholding for, any Taxes.
         In addition, Borrowers shall pay all Other Taxes.

                  (b) If Borrowers shall be required by law to deduct or
         withhold any Taxes, Other Taxes or Further Taxes from or in respect of
         any sum payable hereunder to any Lender or the Agent, then:

                           (i) the sum payable shall be increased as necessary
                  so that, after making all required deductions and withholdings
                  (including deductions and withholdings applicable to
                  additional sums payable under this Section), such Lender or
                  the Agent, as the case may be, receives and retains an amount
                  equal to the sum it would have received and retained had no
                  such deductions or withholdings been made;

                           (ii) Borrowers shall make such deductions and
                  withholdings;

                           (iii) Borrowers shall pay the full amount deducted or
                  withheld to the relevant taxing authority or other authority
                  in accordance with applicable law; and

                           (iv) Borrowers shall also pay to each Lender or the
                  Agent for the account of such Lender, at the time interest is
                  paid, Further Taxes in the amount that the respective Lender
                  specifies as necessary to preserve the after-tax yield the
                  Lender would have received if such Taxes, Other Taxes or
                  Further Taxes had not been imposed.

                  (c) Borrowers agree to indemnify and hold harmless each Lender
         and the Agent for the full amount of (i) Taxes, (ii) Other Taxes, and
         (iii) Further Taxes in the amount that the respective Lender specifies
         as necessary to preserve the after-tax yield the Lender would have
         received if such Taxes, Other Taxes or Further Taxes had not been
         imposed, and any liability (including penalties, interest, additions to
         tax and expenses) arising therefrom or with respect thereto, whether or
         not such Taxes, Other Taxes or Further Taxes were correctly or legally
         asserted. Payment under this indemnification shall be made within 30
         days after the date the Lender or the Agent makes written demand
         therefor.

                  (d) If any Lender becomes entitled to claim any
         indemnification payment pursuant to this Section 4.1, it shall notify
         Borrowers thereof within 90 days after such Lender becomes aware of the
         nature and extent of such claim and shall also notify Agent thereof. A


                                       44
<PAGE>   51

         certificate as to any additional amounts payable pursuant to this
         Section 4.1 submitted by a Lender to Borrowers shall be conclusive
         absent manifest error. Such certificate shall outline in reasonable
         detail the computation of any amounts claimed by it under this Section
         4.1 and the assumptions underlying such computation. No Lender shall,
         however, be required to disclose, in such certificate or otherwise, any
         proprietary or confidential information. No Lender shall be entitled to
         any indemnification payment under this Section 4.1 unless it shall have
         notified Borrowers that it will demand indemnification not later than
         90 days after the date on which the Lender becomes aware of the nature
         and extent of the claim.

                  (e) Within 30 days after the date of any payment by Borrowers
         of Taxes, Other Taxes or Further Taxes, Borrowers shall furnish to each
         Lender or the Agent the original or a certified copy of a receipt
         evidencing payment thereof, or other evidence of payment satisfactory
         to such Lender or the Agent.

                  (f) If Borrowers are required to pay any amount to any Lender
         or the Agent pursuant to subsection (b) or (c) of this Section, then
         such Lender shall use reasonable efforts (consistent with legal and
         regulatory restrictions) to change the jurisdiction of its Lending
         Office so as to eliminate any such additional payment by Borrowers
         which may thereafter accrue, if such change in the sole judgment of
         such Lender is not otherwise disadvantageous to such Lender.

         4.2      ILLEGALITY

                  (a) If any Lender determines that the introduction of any
         Requirement of Law, or any change in any Requirement of Law, or in the
         interpretation or administration of any Requirement of Law, has made it
         unlawful, or that any central bank or other Governmental Authority has
         asserted that it is unlawful, for any Lender or its applicable Lending
         Office to make Offshore Rate Loans, then, on notice thereof by the
         Lender to Borrowers through the Agent, any obligation of that Lender to
         make Offshore Rate Loans shall be suspended until the Lender notifies
         the Agent and Borrowers that the circumstances giving rise to such
         determination no longer exist.

                  (b) If a Lender determines that it is unlawful to maintain any
         Offshore Rate Loan, Borrowers shall, upon its receipt of notice of such
         fact and demand from such Lender (with a copy to the Agent), prepay in
         full such Offshore Rate Loans of that Lender then outstanding, together
         with interest accrued thereon and amounts required under Section 4.4,
         either on the last day of the Interest Period thereof, if the Lender
         may lawfully continue to maintain such Offshore Rate Loans to such day,
         or immediately, if the Lender may not lawfully continue to maintain
         such Offshore Rate Loan. If Borrowers are required to so prepay any
         Offshore Rate Loan, then concurrently with such prepayment, Borrowers
         shall borrow from the affected Lender, in the amount of such repayment,
         a Base Rate Loan.



                                       45
<PAGE>   52

                  (c) If the obligation of any Lender to make or maintain
         Offshore Rate Loans has been so terminated or suspended, Borrowers may
         elect, by giving notice to the Lender through the Agent that all Loans
         which would otherwise be made by the Lender as Offshore Rate Loans
         shall be instead Base Rate Loans.

                  (d) Before giving any notice to the Agent under this Section,
         the affected Lender shall designate a different Lending Office with
         respect to its Offshore Rate Loans if such designation will avoid the
         need for giving such notice or making such demand and will not, in the
         judgment of the Lender, be illegal or otherwise disadvantageous to the
         Lender.

         4.3      INCREASED COSTS AND REDUCTION OF RETURN

                  (a) If any Lender determines that, due to either (i) the
         introduction of or any change in or in the interpretation of any law or
         regulation or (ii) the compliance by that Lender with any guideline or
         request from any central bank or other Governmental Authority (whether
         or not having the force of law), there shall be any increase in the
         cost to such Lender of agreeing to make or making, funding or
         maintaining any Offshore Rate Loans or CD Rate Loans or participating
         in any Letter of Credit, or, in the case of Issuing Lender, any
         increase in the cost to Issuing Lender of agreeing to Issue, Issuing or
         maintaining any Letter of Credit or of agreeing to make or making,
         funding or maintaining any unpaid drawing under any Letter of Credit,
         then Borrowers shall be liable for, and shall from time to time, upon
         demand (with a copy of such demand to be sent to the Agent), pay to the
         Agent for the account of such Lender, additional amounts as are
         sufficient to compensate such Lender for such increased costs.

                  (b) If any Lender shall have determined that (i) the
         introduction of any Capital Adequacy Regulation, (ii) any change in any
         Capital Adequacy Regulation, (iii) any change in the interpretation or
         administration of any Capital Adequacy Regulation by any central bank
         or other Governmental Authority charged with the interpretation or
         administration thereof, or (iv) compliance by such Lender (or its
         Lending Office) or any corporation controlling such Lender with any
         Capital Adequacy Regulation, affects or would affect the amount of
         capital required or expected to be maintained by such Lender or any
         corporation controlling such Lender and (taking into consideration such
         Lender's or such corporation's policies with respect to capital
         adequacy and such Lender's desired return on capital) determines that
         the amount of such capital is increased as a consequence of its
         Commitments, Loans, credits or obligations under this Agreement, then,
         upon demand of such Lender to Borrowers through the Agent, Borrowers
         shall pay to such Lender, from time to time as specified by such
         Lender, additional amounts sufficient to compensate such Lender for
         such increase.

                  (c) Upon receiving a demand to pay amounts pursuant to
         subsection 4.3(a) or 4.3(b), Borrowers may require the applicable
         Lender to provide an opinion from such Lender's legal counsel or
         independent accountants to the effect that (i) events of the type
         described in subsection 4.3(a) or 4.3(b), as the case may be, have
         occurred, and (ii) as a result 


                                       46
<PAGE>   53

         of the occurrence of such events, the Lender has incurred costs of the
         type described in subsection 4.3(a) or 4.3(b), as the case may be. The
         fees and expenses of the legal counsel or independent accountants of
         the Lender shall be borne by Borrowers.

         4.4 FUNDING LOSSES. Borrowers shall reimburse each Lender and hold each
Lender harmless from any loss or expense which the Lender may sustain or incur
as a consequence of:

                  (a) the failure of Borrowers to make on a timely basis any
         payment of principal of any Offshore Rate Loan or CD Rate Loan;

                  (b) the failure of Borrowers to borrow, continue or convert a
         Loan after Borrowers have given (or are deemed to have given) a Notice
         of Borrowing or a Notice of Conversion/ Continuation;

                  (c) the failure of Borrowers to make any prepayment in
         accordance with any notice delivered under Section 2.6;

                  (d) the prepayment or other payment (including after
         acceleration thereof) of an Offshore Rate Loan or a CD Rate Loan on a
         day that is not the last day of the relevant Interest Period; or

                  (e) the automatic conversion under Section 2.4 of any Offshore
         Rate Loan or CD Rate Loan to a Base Rate Loan on a day that is not the
         last day of the relevant Interest Period;

including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or CD Rate Loans or
from fees payable to terminate the deposits from which such funds were obtained.
For purposes of calculating amounts payable by Borrowers to the Lenders under
this Section and under subsection 4.3(a), (i) each Offshore Rate Loan made by a
Lender (and each related reserve, special deposit or similar requirement) shall
be conclusively deemed to have been funded at the LIBOR used in determining the
Offshore Rate for such Offshore Rate Loan by a matching deposit or other
borrowing in the interbank Eurodollar market for a comparable amount and for a
comparable period, whether or not such Offshore Rate Loan is in fact so funded,
and (ii) each CD Rate Loan made by a Lender (and each related reserve, special
deposit or similar requirement) shall be conclusively deemed to have been funded
at the rate used in determining the CD Rate for such CD Rate Loan by the
issuance of Agent's certificate of deposit in a comparable amount and for a
comparable period, whether or not such CD Rate Loan is in fact so funded.

         4.5 INABILITY TO DETERMINE RATES. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the Offshore
Rate or the CD Rate for any requested Interest Period with respect to a proposed
Offshore Rate Loan or CD Rate Loan, or that the Offshore Rate or the CD Rate
applicable pursuant to subsection 2.8(a) for any requested Interest Period with
respect to a proposed Offshore Rate Loan or CD Rate Loan does not adequately and


                                       47
<PAGE>   54

fairly reflect the cost to the Lenders of funding such Loan, the Agent will
promptly so notify Borrowers and each Lender. Thereafter, the obligation of the
Lenders to make or maintain CD Rate Loans or Offshore Rate Loans, as the case
may be, hereunder shall be suspended until the Agent upon the instruction of the
Majority Lenders revokes such notice in writing. Upon receipt of such notice,
Borrowers may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If Borrowers do not revoke such
Notice, the Lenders shall make, convert or continue the Loans, as proposed by
Borrowers, in the amount specified in the applicable notice submitted by
Borrowers, but such Loans shall be made, converted or continued as Base Rate
Loans instead of CD Rate Loans or Offshore Rate Loans, as the case may be.

         4.6 RESERVES ON OFFSHORE RATE LOANS. Borrowers shall pay to each
Lender, as long as such Lender shall be required under regulations of the FRB to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional costs on the unpaid principal amount of each Offshore
Rate Loan equal to the actual costs of such reserves allocated to such Loan by
the Lender (as determined by the Lender in good faith, which determination shall
be conclusive), payable on each date on which interest is payable on such Loan,
provided Borrowers shall have received at least 15 days' prior written notice
(with a copy to the Agent) of such additional interest from the Lender. If a
Lender fails to give notice 15 days prior to the relevant Interest Payment Date,
such additional interest shall be payable 15 days from receipt of such notice.

         4.7 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation under this Article 4 shall deliver to Borrowers (with a copy to the
Agent) a certificate setting forth in reasonable detail the amount payable to
the Lender hereunder and such certificate shall be conclusive and binding on
Borrowers in the absence of manifest error.

         4.8 SUBSTITUTION OF LENDERS.  Upon the receipt by Borrowers from any
Lender (an "Affected Lender") of a claim for compensation under Section 4.3,
Borrowers may: (i) request the Affected Lender to use its best efforts to obtain
a replacement Lender or financial institution satisfactory to Borrowers to
acquire and assume all or a ratable part of all of such Affected Lender's Loans
and Commitment (a "Replacement Lender"); (ii) request one more of the other
Lenders to acquire and assume all or part of such Affected Lender's Loans and
Commitment; or (iii) designate a Replacement Lender. Any such designation of a
Replacement Lender under clause (i) or (iii) shall be subject to the prior
written consent of the Agent (which consent shall not be unreasonably withheld).

         4.9 SURVIVAL. The agreements and obligations of Borrowers in this
Article 4 shall survive the payment of all other Obligations.




                                       48
<PAGE>   55

                                    ARTICLE 5

                              CONDITIONS PRECEDENT

         5.1     CONDITION OF INITIAL LOANS. The obligation of each Lender to 
make its initial Loan hereunder is subject to the condition that the Agent shall
have received on or before the Closing Date all of the following, in form and
substance reasonably satisfactory to the Agent and each Lender, and in
sufficient copies for each Lender:

                  (a) CREDIT AGREEMENT AND NOTES. This Agreement and the Notes
         executed by each party thereto;

                  (b) RESOLUTIONS; INCUMBENCY

                           (i) Copies of the resolutions of the board of
                  directors of each Borrower and each Subsidiary that may become
                  party to a Loan Document authorizing the transactions
                  contemplated hereby, certified as of the Closing Date by the
                  Secretary or an Assistant Secretary of such Person; and

                           (ii) A certificate of the Secretary or Assistant
                  Secretary of each Borrower, and each Subsidiary that may
                  become party to a Loan Document certifying the names and true
                  signatures of the officers of such Borrower or such Subsidiary
                  authorized to execute, deliver and perform, as applicable,
                  this Agreement, and all other Loan Documents to be delivered
                  by it hereunder;

                  (c) ORGANIZATION DOCUMENTS; GOOD STANDING. Each of the
         following documents:

                           (i) the articles or certificate of incorporation and
                  the bylaws of each Borrower and each Subsidiary party to any
                  Loan Document as in effect on the Closing Date, certified by
                  the Secretary or Assistant Secretary of such Borrower or such
                  Subsidiary as of the Closing Date; and

                           (ii) a good standing certificate for each Borrower
                  and each Subsidiary party to any Loan Document from the
                  Secretary of State (or similar, applicable Governmental
                  Authority) of its state of incorporation and each state where
                  such Borrower or such Subsidiary is qualified to do business
                  as a foreign corporation as of a recent date, together with a
                  bring-down certificate by facsimile, dated the Closing Date;

                  (d) LEGAL OPINION. An opinion of Sonnenschein, Nath &
         Rosenthal, counsel to Borrowers and addressed to the Agent and the
         Lenders, substantially in the form of Exhibit E;



                                       49
<PAGE>   56
         (e) PAYMENT OF FEES. Evidence of payment by Borrowers of all accrued
and unpaid fees, costs and expenses to the extent then due and payable on the
Closing Date, together with Attorney Costs of BA to the extent invoiced prior to
or on the Closing Date, plus such additional amounts of Attorney Costs as shall
constitute BA's reasonable estimate of Attorney Costs incurred or to be incurred
by it through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between Borrowers and BA);
including any such costs, fees and expenses arising under or referenced in
Sections 2.9 and 11.4;

                  (f) CERTIFICATE. A certificate signed by a Responsible
         Officer, dated as of the Closing Date, stating that:

                           (i) the representations and warranties contained in
                  Article 6 are true and correct on and as of such date, as
                  though made on and as of such date;

                           (ii) no Default or Event of Default exists or would
                  result from the initial Borrowing; and

                           (iii) there has occurred since July 31, 1998 no event
                  or circumstance that has resulted or could reasonably be
                  expected to result in a Material Adverse Effect; and

                  (g) OTHER DOCUMENTS. Such other approvals, opinions, documents
         or materials as the Agent or any Lender may reasonably request.

         5.2 CONDITIONS TO ALL LOANS, The obligation of each Lender to make any
Loan to be made by it (including its initial Loan) or to continue or convert any
Loan under Section 2.4 and the obligation of the Issuing Lender to issue any
Letter of Credit is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or Conversion/Continuation Date or
Issuance Date:

                  (a) NOTICE; APPLICATION. The Agent shall have received (with,
         in the case of the initial Loan only, a copy for each Lender) a Notice
         of Borrowing or a Notice of Conversion/Continuation, as applicable or,
         in the case of the Issuance of any Letter of Credit, the Issuing Lender
         and the Agent shall have received an Application as required under
         Section 3.2;

                  (b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
         representations and warranties in Article 6 shall be true and correct
         on and as of such Borrowing Date or Conversion/Continuation Date or
         Issuance Date with the same effect as if made on and as of such
         Borrowing Date or Conversion/Continuation Date or Issuance Date (except
         to the extent such representations and warranties expressly refer to an
         earlier date, in which case 


                                       50
<PAGE>   57

         they shall be true and correct as of such earlier date); provided,
         however, that Borrowers may from time to time update the information
         set forth in the Schedules referred to in Article 6 for changes
         occurring subsequent to the Closing Date so long as the new matters set
         forth in the updated Schedules have not resulted in, and cannot
         reasonably be expected to result in, a Material Adverse Effect; and

                  (c) NO EXISTING DEFAULT. No Default or Event of Default shall
         exist or shall result from such Borrowing or continuation or
         conversion.

Each Notice of Borrowing and Notice of Conversion/Continuation submitted by
Borrowers hereunder shall constitute a representation and warranty by Borrowers
hereunder, as of the date of each such notice and as of each Borrowing Date or
Conversion/Continuation Date or Issuance Date, as applicable, that the
conditions in this Section 5.2 are satisfied.

                                    ARTICLE 6

                         REPRESENTATIONS AND WARRANTIES

         Borrowers, jointly and severally, represent and warrant to the Agent
and each Lender that:

         6.1 CORPORATE EXISTENCE AND POWER. Each Borrower and each of its
Subsidiaries:

                  (a) is a corporation duly organized, validly existing and in
         good standing under the laws of the jurisdiction of its incorporation;

                  (b) has the power and authority and all governmental licenses,
         authorizations, consents and approvals to own its assets, carry on its
         business and to execute, deliver, and perform its obligations under the
         Loan Documents;

                  (c) is duly qualified as a foreign corporation and is licensed
         and in good standing under the laws of each jurisdiction where its
         ownership, lease or operation of property or the conduct of its
         business requires such qualification or license; and

                  (d)      is in compliance with all Requirements of Law;

except, in each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.

         6.2 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by each Borrower and its Subsidiaries of this Agreement and each
other Loan Document to which such Person is party, have been duly authorized by
all necessary corporate action, and do not and will not:



                                       51
<PAGE>   58

                  (a) contravene the terms of any of that Person's Organization
         Documents;

                  (b) conflict with or result in any breach or contravention of,
         or the creation of any Lien under, any document evidencing any
         Contractual Obligation to which such Person is a party or any order,
         injunction, writ or decree of any Governmental Authority to which such
         Person or its property is subject; or

                  (c) violate any Requirement of Law.

         6.3 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, Borrowers or any
of their Subsidiaries of this Agreement or any other Loan Document.

         6.4 BINDING EFFECT. This Agreement and each other Loan Document to
which any Borrower or any of its Subsidiaries is a party constitute the legal,
valid and binding obligations of such Borrower and any of its Subsidiaries to
the extent it is a party thereto, enforceable against such Person in accordance
with their respective terms.

         6.5 LITIGATION. Except as specifically disclosed in Schedule 6.5, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of Borrowers, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against any Borrower, or its
Subsidiaries or any of their respective properties which:

                  (a) purport to affect or pertain to this Agreement or any
         other Loan Document, or any of the transactions contemplated hereby or
         thereby; or

                  (b) if determined adversely to such Borrower or its
         Subsidiaries, could reasonably be expected to have a Material Adverse
         Effect. No injunction, writ, temporary restraining order or any order
         of any nature has been issued by any court or other Governmental
         Authority purporting to enjoin or restrain the execution, delivery or
         performance of this Agreement or any other Loan Document, or directing
         that the transactions provided for herein or therein not be consummated
         as herein or therein provided.

         6.6 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by Borrowers. As of the Closing Date,
neither any Borrower nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under subsection 9.1(e).





                                       52
<PAGE>   59


         6.7      ERISA COMPLIANCE.  Except as specifically disclosed in 
Schedule 6.7:

                  (a) Each Plan is in compliance in all material respects with
         the applicable provisions of ERISA, the Code and other federal or state
         law. Each Plan which is intended to qualify under Section 401(a) of the
         Code has received a favorable determination letter from the IRS and to
         the best knowledge of Borrowers, nothing has occurred which would cause
         the loss of such qualification. Each Borrower and each ERISA Affiliate
         has made all required contributions to any Plan subject to Section 412
         of the Code, and no application for a funding waiver or an extension of
         any amortization period pursuant to Section 412 of the Code has been
         made with respect to any Plan.

                  (b) There are no pending or, to the best knowledge of
         Borrowers, threatened claims, actions or lawsuits, or action by any
         Governmental Authority, with respect to any Plan which has resulted or
         could reasonably be expected to result in a Material Adverse Effect.
         There has been no prohibited transaction or violation of the fiduciary
         responsibility rules with respect to any Plan which has resulted or
         could reasonably be expected to result in a Material Adverse Effect.

                  (c) (i) No ERISA Event has occurred or is reasonably expected
         to occur; (ii) no Pension Plan has any Unfunded Pension Liability;
         (iii) neither any Borrower nor any ERISA Affiliate has incurred, or
         reasonably expects to incur, any liability under Title IV of ERISA with
         respect to any Pension Plan (other than premiums due and not delinquent
         under Section 4007 of ERISA); (iv) neither any Borrower nor any ERISA
         Affiliate has incurred, or reasonably expects to incur, any liability
         (and no event has occurred which, with the giving of notice under
         Section 4219 of ERISA, would result in such liability) under Section
         4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
         neither any Borrower nor any ERISA Affiliate has engaged in a
         transaction that could be subject to Section 4069 or 4212(c) of ERISA.

         6.8 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 7.12
and Section 8.8. Neither any Borrower nor any Subsidiary is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.

         6.9 TITLE TO PROPERTIES. Each Borrower and each Subsidiary has good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of each Borrower and its Subsidiaries is subject to no Liens, other 
than Permitted Liens.

         6.10 TAXES. Each Borrower and its Subsidiaries has filed all Federal
and other material tax returns and reports required to be filed, and have paid
all Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, 




                                       53
<PAGE>   60


income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings and for which adequate
reserves have been provided in accordance with GAAP. There is no proposed tax
assessment against any Borrower or any Subsidiary that would, if made, have a
Material Adverse Effect.

         6.11 FINANCIAL CONDITION.

                  (a) The unaudited consolidated financial statements of Holding
         Co. and its Subsidiaries dated July 31, 1998, and the related
         consolidated statements of income or operations, shareholders' equity
         and cash flows for the Fiscal Quarter ended on that date:

                           (i) were prepared in accordance with GAAP
                  consistently applied throughout the period covered thereby,
                  except as otherwise expressly noted therein, subject to
                  ordinary, good faith year end audit adjustments;

                           (ii) fairly present the financial condition of
                  Holding Co. and its Subsidiaries as of the date thereof and
                  results of operations for the period covered thereby; and

                           (iii) except as specifically disclosed in Schedule
                  6.11, show all material indebtedness and other liabilities,
                  direct or contingent, of Holding Co. and its consolidated
                  Subsidiaries as of the date thereof, including liabilities for
                  taxes, material commitments and Contingent Obligations.

                  (b) Since July 31, 1998, there has been no Material Adverse
         Effect.

         6.12 ENVIRONMENTAL MATTERS. Except as specifically disclosed in
Schedule 6.12, each Borrower and its Subsidiaries are in compliance with all
applicable Environmental Laws and no Environmental Claims have been asserted
against any Borrower or any of its Subsidiaries which in either case could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

         6.13 REGULATED ENTITIES. No Borrower, no Person controlling any
Borrower, and no Subsidiary, is an "Investment Company" within the meaning of
the Investment Company Act of 1940. No Borrower is subject to regulation under
the Public Utility Holding Company Act of 1935, the Federal Power Act, the 
Interstate Commerce Act, any state public utilities code, or any other Federal 
or state statute or regulation limiting its ability to incur Indebtedness.

         6.14 NO BURDENSOME RESTRICTIONS. Neither any Borrower nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, any of
which could reasonably be expected to have a Material Adverse Effect.



                                       54
<PAGE>   61

         6.15 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. Each Borrower
or its Subsidiaries own or are licensed or otherwise have the right to use all
of the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of Borrowers, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Borrower or any
Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in Schedule 6.5, no claim or litigation regarding any of
the foregoing is pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of Borrowers, proposed, which, in either case,
could reasonably be expected to have a Material Adverse Effect.

         6.16 SUBSIDIARIES. As of the Closing Date, Borrowers have no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.16 hereto and have no equity investments in any other corporation or entity
other than those specifically disclosed in part (b) of Schedule 6.16.

         6.17 INSURANCE. Except as specifically disclosed in Schedule 6.17, the
properties of each Borrower and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of any Borrower, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where Borrower or such Subsidiary operates. Agent and each Lender
acknowledge and agree that the insurance coverages and insurers set forth in the
summary of insurance provided by Borrowers prior to the Closing Date satisfies
the requirements of this Section 6.17 as of the Closing Date.

         6.18 SWAP OBLIGATIONS. Neither any Borrower nor any of its Subsidiaries
has incurred any outstanding obligations under any Swap Contracts.

         6.19 FULL DISCLOSURE. None of the representations or warranties made by
any Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of any Borrower or any Subsidiary in connection with the Loan
Documents, contains any untrue statement of a material fact or omits any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.

         6.20 SUBORDINATED DEBT. The subordination provisions of the Indenture
and the Senior Subordinated Notes are enforceable against the holders of the
Senior Subordinated Notes by Agent and the Lenders. All Obligations, including
the Obligations to pay principal of and interest on the Obligations, constitute
Senior Indebtedness entitled to the benefits of the subordination provisions
contained in the Indenture and the Senior Subordinated Notes. The principal of
and interest on the Notes and all other Obligations will constitute "senior
indebtedness" as that or any similar term is or may be used in any other
instrument evidencing or applicable to any other Subordinated Debt. 


                                       55
<PAGE>   62

Borrowers acknowledge that Agent and each Lender are entering into this
Agreement and are extending the Commitments in reliance upon the subordination
provisions of the Indenture and the Senior Subordinated Notes and this Section
6.20. The provisions of this Section 6.20 shall be applicable only during such
time as the Senior Subordinated Notes remain outstanding.

         6.21 TRANSFER OF OPERATING ASSETS. Pursuant to the Plan of Internal
Restructuring, substantially all of the operating, manufacturing, sales and
marketing assets and related liabilities of Holding Co. (but not Holding Co.'s
intellectual property rights, other than pursuant to licenses of such rights by
Holding Co. to Operating Co.), were transferred by Holding Co. to Operating Co.,
effective as of January 31, 1998.

         6.22 YEAR 2000 COMPLIANCE. Borrowers have conducted a comprehensive
review and assessment of Borrowers' computer applications and made inquiry of
Borrowers' and their Subsidiaries key suppliers, vendors and customers with
respect to the "year 2000 problem" (that is, the risk that computer applications
may not be able to properly perform date-sensitive functions after December 31,
1999) and, based on that review and inquiry, Borrowers do not believe the year
2000 problem will result in a material adverse change in Borrowers' business
condition (financial or otherwise), operations, properties or prospects, or
ability to repay the obligations.

                                    ARTICLE 7

                              AFFIRMATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:

         7.1 FINANCIAL STATEMENTS. Borrowers shall deliver to the Agent, in form
and detail satisfactory to the Agent and the Majority Lenders, with sufficient
copies for each Lender:

                  (a) as soon as available, but not later than 90 days after the
         end of each Fiscal Year (commencing with the Fiscal Year ended January
         31, 1999), a copy of the audited consolidated balance sheet of
         Borrowers and their Subsidiaries as at the end of such year and the
         related consolidated statements of income or operations, shareholders'
         equity and cash flows for such year, setting forth in each case in
         comparative form the figures for the previous Fiscal Year, and
         accompanied by the opinion of KPMG Peat Marwick LLP or another
         nationally-recognized independent public accounting firm ("Independent
         Auditor") which report shall state that such consolidated financial
         statements present fairly the financial position for the periods
         indicated in conformity with GAAP applied on a basis consistent with
         prior years. Such opinion shall not be qualified or limited as to the
         scope of audit or the financial condition of Borrowers and their
         Subsidiaries as a going concern; and



                                       56
<PAGE>   63

                  (b) as soon as available, but not later than 45 days after the
         end of each of the first three Fiscal Quarters of each Fiscal Year
         (commencing with the Fiscal Quarter ended October 31, 1998), a copy of
         the unaudited consolidated balance sheet of Borrowers and their
         Subsidiaries as of the end of such quarter and the related consolidated
         statements of income or operations, shareholders' equity and cash flows
         for the period commencing on the first day and ending on the last day
         of such quarter, and certified by a Responsible Officer as fairly
         presenting, in accordance with GAAP (subject to ordinary, good faith
         year-end audit adjustments), the financial position and the results of
         operations of Borrowers and their Subsidiaries.

         7.2 CERTIFICATES; OTHER INFORMATION. Borrowers shall furnish to the
Agent, with sufficient copies for each Lender:

                  (a) concurrently with the delivery of the financial statements
         referred to in subsection 7.1(a), a statement of performance versus
         financial covenants included in Holding Co.'s annual report;

                  (b) concurrently with the delivery of the financial statements
         referred to in subsections 7.1(a) and (b), a Compliance Certificate
         executed by a Responsible Officer;

                  (c) promptly, copies of all financial statements and reports
         that any Borrower sends to its shareholders, and copies of all
         financial statements and regular, periodical or special reports
         (including Forms 10K, 10Q and 8K) that any Borrower or any Subsidiary
         may make to, or file with, the SEC;

                  (d) Within 30 days after the beginning of each Fiscal Year
         Borrowers' "corporate business plan" in form and content reasonably
         acceptable to Agent together with appropriate supporting details as
         reasonably requested by Agent; and

                  (e) promptly, such additional information regarding the
         business, financial or corporate affairs of any Borrower or any
         Subsidiary as the Agent, at the request of any Lender, may from time to
         time reasonably request.

         7.3 NOTICES. Borrowers shall promptly notify the Agent and each Lender:

                  (a) of the occurrence of any Default or Event of Default, and
         of the occurrence or existence of any event or circumstance that
         foreseeably will become a Default or Event of Default;

                  (b) of (i) any breach or non-performance of, or any default
         under, a Contractual Obligation of any Borrower or any Subsidiary; (ii)
         any dispute, litigation, investigation, proceeding or suspension
         between any Borrower or any Subsidiary and any Governmental Authority;
         (iii) the commencement of, or any material development in, any
         litigation or 


                                       57
<PAGE>   64

         proceeding affecting any Borrower or any Subsidiary; including pursuant
         to any applicable Environmental Laws; or (iv) any change in the
         financial condition or operations of any Borrower or any Subsidiary,
         which has resulted, or is likely to result, in a Material Adverse
         Effect;

                  (c) of the occurrence of any of the following events affecting
         any Borrower or any ERISA Affiliate (but in no event more than 10 days
         after such event), and deliver to the Agent and each Lender a copy of
         any notice with respect to such event that is filed with a Governmental
         Authority and any notice delivered by a Governmental Authority to any
         Borrower or any ERISA Affiliate with respect to such event:

                           (i) an ERISA Event;

                           (ii) a material increase in the Unfunded Pension
                  Liability of any Pension Plan;

                           (iii) the adoption of, or the commencement of
                  contributions to, any Plan subject to Section 412 of the Code
                  by any Borrower or any ERISA Affiliate; or

                           (iv) the adoption of any amendment to a Plan subject
                  to Section 412 of the Code, if such amendment results in a
                  material increase in contributions or Unfunded Pension
                  Liability.

                  (d) of any material change in accounting policies or financial
         reporting practices by any Borrower or any of its consolidated
         Subsidiaries.

         Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action (if any) the affected Borrower or
any affected Subsidiary proposes to take with respect thereto and at what time.
Each notice under subsection 7.3(a) shall describe with particularity any and
all clauses or provisions of this Agreement or other Loan Document that have
been (or foreseeably will be) breached or violated.

         7.4 PRESERVATION OF CORPORATE EXISTENCE, ETC. Each Borrower shall, and
shall cause each Subsidiary to:

                  (a) preserve and maintain in full force and effect its
         corporate existence and good standing under the laws of its state or
         jurisdiction of incorporation;

                  (b) preserve and maintain in full force and effect all
         governmental rights, privileges, qualifications, permits, licenses and
         franchises necessary or desirable in the normal conduct of its business
         except in connection with transactions permitted by Section 8.4 and
         sales of assets permitted by Section 8.3;




                                       58
<PAGE>   65

                  (c) use reasonable efforts, in the ordinary course of
         business, to preserve its business organization and goodwill; and

                  (d) preserve or renew all of its registered patents,
         trademarks, trade names and service marks, the non-preservation of
         which could reasonably be expected to have a Material Adverse Effect.

         7.5 MAINTENANCE OF PROPERTY. Each Borrower shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in good working order and condition, ordinary wear and
tear excepted, except as permitted by Section 8.3. Each Borrower and each
Subsidiary shall use the standard of care typical in the industry in the
operation and maintenance of its facilities.

         7.6 INSURANCE. Each Borrower shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons. Agent and each Lender
acknowledge and agree that the insurance coverages and insurers set forth in the
summary of insurance provided by Borrowers prior to the Closing Date satisfied
the requirements of this Section 7.6 as of the Closing Date.

         7.7 PAYMENT OF OBLIGATIONS. Each Borrower shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:

                  (a) all tax liabilities, assessments and governmental charges
         or levies upon it or its properties or assets, unless the same are
         being contested in good faith by appropriate proceedings and adequate
         reserves in accordance with GAAP are being maintained by such Borrower
         or such Subsidiary;

                  (b) all lawful claims which, if unpaid, would by law become a
         Lien (other than a Permitted Lien) upon its property; and

                  (c) all indebtedness, as and when due and payable, but subject
         to any subordination provisions contained in any instrument or
         agreement evidencing such Indebtedness.

         7.8 COMPLIANCE WITH LAWS. Each Borrower shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.



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         7.9 COMPLIANCE WITH ERISA. Each Borrower shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.

         7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. Each Borrower shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in conformity with GAAP consistently applied. Each Borrower shall
permit, and shall cause each Subsidiary to permit, representatives and
independent contractors of the Agent or any Lender to visit and inspect any of
their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to Borrowers. If any Default or Event of Default
exists, such inspection shall be at the expense of Borrowers, otherwise it shall
be at the expense of the Lenders. If any Default or Event of Default exists,
such inspection may be conducted at any time during normal business hours and
without advance notice.

         7.11 ENVIRONMENTAL LAWS. Each Borrower shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.

         7.12 USE OF PROCEEDS. Borrowers shall use the proceeds of the Loans for
(i) the refinancing of existing indebtedness, (ii) the repurchase of Senior
Subordinated Notes, and (iii) working capital and other general corporate
purposes not in contravention of any Requirement of Law or of any Loan Document.


                                    ARTICLE 8

                               NEGATIVE COVENANTS

         So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Lenders waive compliance in
writing:

         8.1 LIMITATION ON LIENS. No Borrower shall, or shall suffer or permit
any Subsidiary to, directly or indirectly, make, create, incur, assume or suffer
to exist any Lien upon or with respect to any part of its property, whether now
owned or hereafter acquired, other than the following ("Permitted Liens"):

                  (a) any Lien existing on property of any Borrower or any
         Subsidiary on the Closing Date and set forth in Schedule 8.1 securing
         Indebtedness outstanding on such date;



                                       60
<PAGE>   67
                  (b) any Lien created under any Loan Document;

                  (c) Liens for taxes, fees, assessments or other governmental
         charges which are not delinquent or remain payable without penalty, or
         to the extent that non-payment thereof is permitted by Section 7.7,
         provided that no notice of lien has been filed or recorded under the
         Code;

                  (d) carriers', warehousemen's, mechanics', landlords',
         materialmen's, repairmen's or other similar Liens arising in the
         ordinary course of business which are not delinquent or remain payable
         without penalty or which are being contested in good faith and by
         appropriate proceedings, which proceedings have the effect of
         preventing the forfeiture or sale of the property subject thereto;

                  (e) Liens (other than any Lien imposed by ERISA) consisting of
         pledges or deposits required in the ordinary course of business in
         connection with workers' compensation, unemployment insurance and other
         social security legislation;

                  (f) Liens on the property of any Borrower or any Subsidiary
         securing (i) the non-delinquent performance of bids, trade contracts
         (other than for borrowed money), leases, statutory obligations, (ii)
         contingent obligations on surety and appeal bonds, and (iii) other
         non-delinquent obligations of a like nature; in each case, incurred in
         the ordinary course of business, provided all such Liens in the
         aggregate would not (even if enforced) cause a Material Adverse Effect;

                  (g) Liens consisting of judgment or judicial attachment liens,
         provided that the enforcement of such Liens is effectively stayed and
         all such liens in the aggregate at any time outstanding for Borrowers
         and their Subsidiaries do not exceed $500,000;

                  (h) easements, rights-of-way, restrictions and other similar
         encumbrances incurred in the ordinary course of business which, in the
         aggregate, do not interfere with the ordinary conduct of the businesses
         of Borrowers and their Subsidiaries;

                  (i) purchase money security interests on any property acquired
         or held by Borrowers or their Subsidiaries in the ordinary course of
         business, securing Indebtedness incurred or assumed for the purpose of
         financing all or any part of the cost of acquiring such property;
         provided that (i) such Lien attaches solely to the property so acquired
         in such transaction, (ii) the principal amount of the debt secured
         thereby does not exceed 100% of the cost of such property, and (iii)
         the principal amount of the Indebtedness secured by any and all such
         purchase money security interests shall not at any time exceed,
         together with Indebtedness permitted under subsection 8.6(e), $500,000;



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<PAGE>   68

                  (j) Liens securing obligations in respect of capital leases on
         assets subject to such leases, provided that such capital leases are
         otherwise permitted hereunder;

                  (k) Liens arising solely by virtue of any statutory or common
         law provision relating to Lender's liens, rights of set-off or similar
         rights and remedies as to deposit accounts or other funds maintained
         with a creditor depository institution; provided that, except for
         deposits serving as cash collateral for Letters of Credit, (i) such
         deposit account is not a dedicated cash collateral account and is not
         subject to restrictions against access by Borrower in excess of those
         set forth by regulations promulgated by the FRB, and (ii) such deposit
         account is not intended by any Borrower or any Subsidiary to provide
         collateral to the depository institution;

                  (l) Liens on any property securing Indebtedness permitted to
         be incurred pursuant to subsections 8.6(d) and (g).

         8.2 NEGATIVE PLEDGE AGREEMENTS. No Borrower shall, or shall suffer or
permit any Subsidiary to, directly or indirectly, become subject to any
contractual restriction (other than restrictions set forth in this Agreement)
that would limit or preclude such Borrower or such Subsidiary from granting
liens on its assets to secure Indebtedness that is senior in right of payment to
the Senior Subordinated Notes.

         8.3 DISPOSITION OF ASSETS. No Borrower shall, or shall suffer or permit
any Subsidiary to, directly or indirectly, sell, assign, lease, convey, transfer
or otherwise dispose of (whether in one or a series of transactions) any
property (including accounts and notes receivable, with or without recourse) or
enter into any agreement to do any of the foregoing, except:

                  (a) dispositions of inventory, or used, worn-out or surplus
         equipment, all in the ordinary course of business;

                  (b) the sale of equipment to the extent that such equipment is
         exchanged for credit against the purchase price of similar replacement
         equipment, or the proceeds of such sale are reasonably promptly applied
         to the purchase price of such replacement equipment;

                  (c) dispositions of inventory by any Borrower or any
         Subsidiary to any Borrower or any Subsidiary pursuant to reasonable
         business requirements;

                  (d) transfers of assets by any Subsidiary to any Borrower; and

                  (e) dispositions not otherwise permitted hereunder which are
         made for fair market value; provided, that (i) at the time of any
         disposition, no Event of Default shall exist or shall result from such
         disposition, (ii) the aggregate sales price from such disposition shall
         be paid in cash, and (iii) the aggregate value of all assets so sold by
         Borrowers and their Subsidiaries, together, shall not exceed in any
         fiscal year $500,000.



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<PAGE>   69

         8.4 CONSOLIDATIONS AND MERGERS. No Borrower shall, or shall suffer or
permit any Subsidiary to, merge, consolidate with or into, or convey, transfer,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, or to liquidate or dissolve
its business, except:

                  (a) any Subsidiary may merge with any Borrower, provided that
         Borrower shall be the continuing or surviving corporation, or with any
         one or more Subsidiaries, provided that if any transaction shall be
         between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
         Subsidiary shall be the continuing or surviving corporation; and

                  (b) any Subsidiary may sell all or substantially all of its
         assets (upon voluntary liquidation or otherwise), to any Borrower or
         another Wholly-Owned Subsidiary.

         8.5 LOANS AND INVESTMENTS. No Borrower shall purchase or acquire, or
suffer or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
Affiliate of any Borrower (together, "Investments"), except for:

                  (a) Investments held by any Borrower or Subsidiary in the form
         of cash equivalents or short term marketable securities;

                  (b) extensions of credit in the nature of accounts receivable
         or notes receivable arising from the sale or lease of goods or services
         in the ordinary course of business;

                  (c) extensions of credit by any Borrower to any of its
         Wholly-Owned Subsidiaries or by any of its Wholly-Owned Subsidiaries to
         another of its Wholly-Owned Subsidiaries;

                  (d) Investments incurred in order to consummate Acquisitions
         otherwise permitted herein, provided that (i) Borrowers deliver to the
         Agent not less than 30 days prior written notice of any such
         Acquisition, (ii) No Default or Event of Default shall have occurred
         and be continuing or would occur or exist upon consummation of the
         Acquisition, (iii) Borrowers deliver to Agent not less than ten
         Business Days prior to the effective date of the Acquisition
         calculations in reasonable detail and in form and content acceptable to
         Agent demonstrating compliance on a pro-forma basis with the covenants
         contained in Sections 8.17 and 8.18 for the 12-month period immediately
         preceding the proposed effective date of the Acquisition or the
         12-month period immediately following the proposed effective date of
         the Acquisition calculated on the basis that the Acquisition had
         occurred effective as of the first day of each of such 12-month
         periods, (iv) Borrowers deliver to Agent not less than ten Business
         Days prior to the effective date of the Acquisition calculations in
         reasonable detail 


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<PAGE>   70

         and in form and content acceptable to Agent demonstrating that
         Borrower's Consolidated Total Funded Debt to Cash Flow Ratio would not
         exceed 3.25 to 1.0 immediately after the consummation of such
         Acquisition, (v) the total consideration paid for any such Acquisition
         (including the assumption of Indebtedness) shall not exceed $30,000,000
         at the time of such Investment, (vi) such Acquisitions are undertaken
         in accordance with all applicable Requirements of Law, and (vii) the
         prior, effective written consent or approval to such Acquisition of the
         board of directors or equivalent governing body of the acquiree is
         obtained, and provided, further, that with respect to any Acquisitions
         as to which the conditions set forth in the foregoing clauses (i)
         through (iv) and (vi) and (vii) are satisfied but the total
         consideration paid exceeds the limitation set forth in the foregoing
         clause (v), Lenders and Agent agree that their consent thereto will not
         be unreasonably withheld; and

                  (e) Investments constituting Permitted Swap Obligations or
         payments or advances under Swap Contracts relating to Permitted Swap
         Obligations.

         8.6 LIMITATION ON INDEBTEDNESS. No Borrower shall, or shall suffer or
permit any Subsidiary to, create, incur, assume, suffer to exist, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:

                  (a) Indebtedness incurred pursuant to this Agreement;

                  (b) Indebtedness consisting of Contingent Obligations
         permitted pursuant to Section 8.9;

                  (c) Indebtedness evidenced by the Senior Subordinated Notes;

                  (d) Indebtedness existing on the Closing Date and set forth in
         Schedule 8.6;

                  (e) Indebtedness secured by Liens permitted by subsection
         8.1(i) in an aggregate amount outstanding not to exceed $500,000;

                  (f) Indebtedness incurred in connection with leases permitted
         pursuant to Section 8.11;

                  (g) Indebtedness secured by Liens permitted under subsection
         8.1(l) in an aggregate amount outstanding not to exceed the remainder
         of (i) $7,000,000, minus (ii) the sum of (x) the outstanding principal
         amount of Indebtedness described in subsection 8.6(d) and 8.6(e), plus
         (y) the amount of all Liens permitted under subsection 8.1(g); and

                  (h) Indebtedness which is unsecured and incurred for business
         purposes in an aggregate amount outstanding not to exceed the remainder
         of (i) $15,000,000, minus (ii) the sum of (x) the existing amount of
         Indebtedness referred to in subsection 8.6(b), plus (y) the outstanding
         principal amount of Indebtedness permitted under subsection 8.6(g).



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<PAGE>   71

         8.7 TRANSACTIONS WITH AFFILIATES. No Borrower shall, or and shall
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of Borrower, except upon fair and reasonable terms no less favorable
to such Borrower or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of such Borrower or such
Subsidiary; provided, however, that the provisions of this Section 8.7 shall not
preclude the loans to certain executive officers of Holding Co. described on
Schedule 8.7, or any transaction between Borrowers.

         8.8 USE OF PROCEEDS. No Borrower shall, or shall suffer or permit any
Subsidiary to, use any portion of the Loan proceeds, directly or indirectly, (i)
to purchase or carry Margin Stock, (ii) to repay or otherwise refinance
indebtedness of any Borrower or others incurred to purchase or carry Margin
Stock, (iii) to extend credit for the purpose of purchasing or carrying any
Margin Stock, or (iv) to acquire any security in any transaction that is subject
to Section 13 or 14 of the Exchange Act.

         8.9 CONTINGENT OBLIGATIONS. No Borrower shall, or shall suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:

                  (a) endorsements for collection or deposit in the ordinary
         course of business;

                  (b) Permitted Swap Obligations;

                  (c) Contingent Obligations of Borrowers and their Subsidiaries
         existing as of the Closing Date and listed in Schedule 8.9; and

                  (d) L/C Obligations.

         8.10 JOINT VENTURES. No Borrower shall, or shall suffer or permit any
Subsidiary to enter into any Joint Venture, other than in the ordinary course of
business and other than foreign joint ventures related to the current lines of
business of Borrowers and their Subsidiaries.

         8.11 LEASE OBLIGATIONS. No Borrower shall, or shall suffer or permit
any Subsidiary to, create or suffer to exist any obligations for the payment of
rent for any property under lease or agreement to lease, except for:

                  (a) leases of Borrowers and of Subsidiaries in existence on
         the Closing Date and any renewal, extension or refinancing thereof;

                  (b) operating leases entered into by any Borrower or any
         Subsidiary after the Closing Date in the ordinary course of business;

                  (c) leases entered into by any Borrower or any Subsidiary
         after the Closing Date pursuant to sale-leaseback transactions
         permitted under subsection 8.3(e);



                                       65
<PAGE>   72

                  (d) capital leases other than those permitted under clauses
         (a) and (c) of this Section, entered into by any Borrower or any
         Subsidiary after the Closing Date to finance the acquisition of
         equipment; provided that the aggregate annual rental payments for all
         such capital leases shall not exceed in any Fiscal Year $5,000,000.

         8.12 RESTRICTED PAYMENTS. No Borrower shall, or shall suffer or permit
any Subsidiary to, declare or make any dividend payment or other distribution of
assets, properties, cash, rights, obligations or securities on account of any
shares of any class of its capital stock, or purchase, redeem or otherwise
acquire for value any shares of its capital stock or any warrants, rights or
options to acquire such shares, now or hereafter outstanding; except that:

                  (a) any Borrower and any Wholly-Owned Subsidiary may declare
         and make dividend payments or other distributions payable solely in its
         common stock;

                  (b) any Borrower and any Wholly-Owned Subsidiary may purchase,
         redeem or otherwise acquire shares of its common stock or warrants or
         options to acquire any such shares with the proceeds received from the
         substantially concurrent issue of new shares of its common stock;

                  (c) any Borrower and any Wholly-Owned Subsidiary may declare
         or pay cash dividends to its stockholders, provided, that, (i)
         immediately after giving effect to such proposed action, no Default or
         Event of Default would exist, and (ii) the aggregate amount of such
         dividends paid after January 31, 1998 may not exceed 35% of the
         cumulative Consolidated Net Income arising after January 31, 1998;

                  (d) Holding Co. may purchase, redeem or otherwise acquire
         shares of its common stock, provided (i) immediately after giving
         effect to such acquisition of stock no Default or Event of Default
         would exist and (ii) the aggregate consideration paid for all such
         acquisitions of stock does not exceed the sum of (x) $15,000,000, plus
         (y) 35% of the aggregate positive Consolidated Net Income arising after
         January 31, 1998 and computed on a cumulative consolidated basis and
         calculated for purposes of this subsection 8.12(d) without reduction
         for any repurchase premiums incurred in connection with purchases of
         the Senior Subordinated Notes; and

                  (e) any Subsidiary may pay dividends to any Borrower.

         8.13 ERISA. No Borrower shall, or shall suffer or permit any of its
ERISA Affiliates to: (a) engage in a prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan which has resulted or
could reasonably expected to result in liability of Borrowers in an aggregate
amount in excess of $100,000; or (b) engage in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA.



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<PAGE>   73

         8.14 CHANGE IN BUSINESS. No Borrower shall, or shall suffer or permit
any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by Borrower and its
Subsidiaries on the date hereof.

         8.15 ACCOUNTING CHANGES. No Borrower shall, or shall suffer or permit
any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
any Borrower or of any Subsidiary.

         8.16 AMENDMENT OF INDENTURE. Borrowers shall not participate in or
permit any modification of the Indenture which would in any respect amend,
modify or impair the extent and manner in which the subordination provisions of
the Indenture extend to the benefit of the Lenders with respect to the
Obligations.

         8.17 CONSOLIDATED FUNDED DEBT TO CASH FLOW RATIO. Borrowers shall not
permit their Consolidated Total Funded Debt to Cash Flow Ratio as of the end of
any Fiscal Quarter to exceed 3.5 to 1.0.

         8.18 CONSOLIDATED INTEREST COVERAGE RATIO. Borrowers shall not permit
their Consolidated Interest Coverage Ratio for any period of four consecutive
Fiscal Quarters to be less than 3.5 to 1.0.

                                    ARTICLE 9

                                EVENTS OF DEFAULT

         9.1 EVENT OF DEFAULT. Any of the following shall constitute an "Event
of Default":

                  (a) NON-PAYMENT. Borrowers fail to pay, (i) when and as
         required to be paid herein, any amount of principal of any Loan or of
         any L/C Obligation, or (ii) within five days after the same becomes
         due, any interest, fee or any other amount payable hereunder or under
         any other Loan Document; or

                  (b) REPRESENTATION OR WARRANTY. Any representation or warranty
         by any Borrower or any Subsidiary made or deemed made herein, in any
         other Loan Document, or which is contained in any certificate, document
         or financial or other statement by any Borrower, any Subsidiary, or any
         Responsible Officer, furnished at any time under this Agreement, or in
         or under any other Loan Document, is incorrect in any material respect
         on or as of the date made or deemed made; or

                  (c) SPECIFIC DEFAULTS. Any Borrower fails to perform or
         observe any term, covenant or agreement contained in any of Section
         7.1, 7.2, 7.3 or 7.9 or in Article 8; or



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<PAGE>   74

                  (d) OTHER DEFAULTS. Any Borrower or any Subsidiary party
         thereto fails to perform or observe any other term or covenant
         contained in this Agreement or any other Loan Document, and such
         default shall continue unremedied for a period of 20 days after the
         date upon which written notice thereof is given to Borrowers by the
         Agent or any Lender; or

                  (e) CROSS-DEFAULT. Any Borrower or any Subsidiary (A) fails to
         make any payment in respect of any Indebtedness or Contingent
         Obligation, having an aggregate principal amount (including undrawn or
         available amounts and including amounts owing to all creditors under
         any combined or syndicated credit arrangement) of more than $3,000,000
         when due (whether by scheduled maturity, required prepayment,
         acceleration, demand, or otherwise) and such failure continues after
         the applicable grace or notice period, if any, specified in the
         relevant document on the date of such failure; or (B) fails to perform
         or observe any other condition or covenant, or any other event shall
         occur or condition exist, under any agreement or instrument relating to
         any such Indebtedness or Contingent Obligation, and such failure
         continues after the applicable grace or notice period, if any,
         specified in the relevant document on the date of such failure if the
         effect of such failure, event or condition is to cause, or to permit
         the holder or holders of such Indebtedness or beneficiary or
         beneficiaries of such Indebtedness (or a trustee or agent on behalf of
         such holder or holders or beneficiary or beneficiaries) to cause such
         Indebtedness to be declared to be due and payable prior to its stated
         maturity, or such Contingent Obligation to become payable or cash
         collateral in respect thereof to be demanded; or

                  (f) INSOLVENCY; VOLUNTARY PROCEEDINGS. Any Borrower or any
         Subsidiary (i) ceases or fails to be solvent, or generally fails to
         pay, or admits in writing its inability to pay, its debts as they
         become due, subject to applicable grace periods, if any, whether at
         stated maturity or otherwise; (ii) voluntarily ceases to conduct its
         business in the ordinary course; (iii) commences any Insolvency
         Proceeding with respect to itself; or (iv) takes any action to
         effectuate or authorize any of the foregoing; or

                  (g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
         Proceeding is commenced or filed against any Borrower or any
         Subsidiary, or any writ, judgment, warrant of attachment, execution or
         similar process, is issued or levied against a substantial part of any
         Borrower's or any Subsidiary's properties, and any such proceeding or
         petition shall not be dismissed, or such writ, judgment, warrant of
         attachment, execution or similar process shall not be released, vacated
         or fully bonded within 60 days after commencement, filing or levy; (ii)
         any Borrower or any Subsidiary admits the material allegations of a
         petition against it in any Insolvency Proceeding, or an order for
         relief (or similar order under non-U.S. law) is ordered in any
         Insolvency Proceeding; or (iii) any Borrower or any Subsidiary
         acquiesces in the appointment of a receiver, trustee, custodian,
         conservator, liquidator, mortgagee in possession (or agent therefor),
         or other similar Person for itself or a substantial portion of its
         property or business; or



                                       68
<PAGE>   75

                  (h) ERISA. (i) An ERISA Event shall occur with respect to a
         Pension Plan or Multiemployer Plan which has resulted or could
         reasonably be expected to result in liability of any Borrower under
         Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC
         in an aggregate amount in excess of $100,000, (ii) the aggregate amount
         of Unfunded Pension Liability among all Pension Plans at any time
         exceeds $100,000; or (iii) any Borrower or any ERISA Affiliate shall
         fail to pay when due, after the expiration of any applicable grace
         period, any installment payment with respect to its withdrawal
         liability under Section 4201 of ERISA under a Multiemployer Plan in an
         aggregate amount in excess of $100,000; or

                  (i) MONETARY JUDGMENTS. One or more non-interlocutory
         judgments, non-interlocutory orders, decrees or arbitration awards is
         entered against any Borrower or any Subsidiary involving in the
         aggregate a liability (to the extent not covered by independent
         third-party insurance as to which the insurer does not dispute
         coverage) as to any single or related series of transactions, incidents
         or conditions, of $1,000,000 or more, and the same shall remain
         unsatisfied, unvacated and unstayed pending appeal for a period of 10
         days after the entry thereof; or

                  (j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order
         or decree is entered against any Borrower or any Subsidiary which does
         or could reasonably be expected to have a Material Adverse Effect, and
         there shall be any period of 10 consecutive days during which a stay of
         enforcement of such judgment or order, by reason of a pending appeal or
         otherwise, shall not be in effect; or

                  (k) CHANGE OF CONTROL. There occurs any Change of Control; or

                  (l) LOSS OF LICENSES. Any Governmental Authority revokes or
         fails to renew any material license, permit or franchise of any
         Borrower or any Subsidiary, or any Borrower or any Subsidiary for any
         reason loses any material license, permit or franchise, or any Borrower
         or any Subsidiary suffers the imposition of any restraining order,
         escrow, suspension or impound of funds in connection with any
         proceeding (judicial or administrative) with respect to any material
         license, permit or franchise; or

                  (m) INVALIDITY OF SUBORDINATION PROVISIONS. The subordination
         provisions of the Indenture (at any time when any of the Senior
         Subordinated Notes remain outstanding) or any agreement or instrument
         governing any other Subordinated Debt is for any reason revoked or
         invalidated, or otherwise cease to be in full force and effect, any
         Person contests in any manner the validity or enforceability thereof or
         denies that it has any further liability or obligation thereunder, or
         the Indebtedness hereunder is for any reason subordinated or does not
         have the priority contemplated by this Agreement or such subordination
         provisions.

         9.2 REMEDIES. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Lenders,



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                  (a) declare the commitment of each Lender to make Loans
         (including the commitment of the Swing Line Lender to make Swing Line
         Loans) and the obligation of each Issuing Lender to Issue Letters of
         Credit to be terminated, whereupon such commitments and obligation
         shall be terminated;

                  (b) declare an amount equal to the maximum aggregate amount
         that is or at any time thereafter may become available for drawing
         under all outstanding Letters of Credit (whether or not any beneficiary
         shall have presented, or shall be entitled at such time to present, the
         drafts or other documents required to draw under such Letters of
         Credit) to be immediately due and payable, and declare the unpaid
         principal amount of all outstanding Loans, all interest accrued and
         unpaid thereon, and all other amounts owing or payable hereunder or
         under any other Loan Document to be immediately due and payable,
         without presentment, demand, protest or other notice of any kind, all
         of which are hereby expressly waived by Borrowers; and

                  (c) exercise on behalf of itself and the Lenders all rights
         and remedies available to it and the Lenders under the Loan Documents
         or applicable law;

provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 8.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each 
Lender to make Loans and the obligation of the Issuing Lender to Issue Letters 
of Credit shall automatically terminate and the unpaid principal amount of all 
outstanding Loans and all interest and other amounts as aforesaid shall 
automatically become due and payable without further act of the Agent, the 
Issuing Lender or any other Lender.

         9.3 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.




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                                   ARTICLE 10

                                    THE AGENT

         10.1     APPOINTMENT AND AUTHORIZATION; "AGENT".

                  (a) Each Lender hereby irrevocably (subject to Section 10.9)
         appoints, designates and authorizes the Agent to take such action on
         its behalf under the provisions of this Agreement and each other Loan
         Document and to exercise such powers and perform such duties as are
         expressly delegated to it by the terms of this Agreement or any other
         Loan Document, together with such powers as are reasonably incidental
         thereto. Notwithstanding any provision to the contrary contained
         elsewhere in this Agreement or in any other Loan Document, the Agent
         shall not have any duties or responsibilities, except those expressly
         set forth herein, nor shall the Agent have or be deemed to have any
         fiduciary relationship with any Lender, and no implied covenants,
         functions, responsibilities, duties, obligations or liabilities shall
         be read into this Agreement or any other Loan Document or otherwise
         exist against the Agent. Without limiting the generality of the
         foregoing sentence, the use of the term "agent" in this Agreement with
         reference to the Agent is not intended to connote any fiduciary or
         other implied (or express) obligations arising under agency doctrine of
         any applicable law. Instead, such term is used merely as a matter of
         market custom, and is intended to create or reflect only an
         administrative relationship between independent contracting parties.

                  (b) The Issuing Lender shall act on behalf of the Lenders with
         respect to any Letters of Credit Issued by it and the documents
         associated therewith until such time and except for so long as the
         Agent may agree at the request of the Majority Lenders to act for the
         Issuing Lender with respect thereto; provided, however, that the
         Issuing Lender shall have all of the benefits and immunities (i)
         provided to the Agent in this Article 10 with respect to any acts taken
         or omissions suffered by the Issuing Lender in connection with Letters
         of Credit Issued by it or proposed to be Issued by it and the
         application and agreements for letters of credit pertaining to the
         Letters of Credit as fully as if the term "Agent", as used in this
         Article 10, included the Issuing Lender with respect to such acts or
         omissions, and (ii) as additionally provided in this Agreement with
         respect to the Issuing Lender.

                  (c) The Swing Line Lender shall have all of the benefits and
         immunities (i) provided to the Agent in this Article 10 with respect to
         any acts taken or omissions suffered by the Swing Line Lender in
         connection with Swing Line Loans made or proposed to be made by it as
         fully as if the term "Agent", as used in this Article 10, included the
         Swing Line Lender with respect to such acts or omissions, and (ii) as
         additionally provided in this Agreement with respect to the Swing Line
         Lender.

         10.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.

         10.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any 


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<PAGE>   78

other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct), or (ii) be responsible in any manner to
any of the Lenders for any recital, statement, representation or warranty made
by any Borrower or any Subsidiary or Affiliate of any Borrower, or any officer
thereof, contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document, or the validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document, or for any failure
of any Borrower or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall 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 any other Loan Document, or to inspect the properties, books or
records of any Borrower or any Subsidiary or Affiliate of any Borrower.

         10.4 RELIANCE BY AGENT.

                  (a) The Agent shall be entitled to rely, and shall be fully
         protected in relying, upon any writing, resolution, notice, consent,
         certificate, affidavit, letter, telegram, facsimile, telex or telephone
         message, statement or other document or conversation 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 counsel to Borrowers), independent accountants and
         other experts selected by the Agent. The Agent shall be fully justified
         in failing or refusing to take any action under this Agreement or any
         other Loan Document unless it shall first receive such advice or
         concurrence of the Majority Lenders as it deems appropriate and, if it
         so requests, it shall first be indemnified to its satisfaction by the
         Lenders against any and all liability and expense which may be incurred
         by it by reason of taking or continuing to take any such action. The
         Agent shall in all cases be fully protected in acting, or in refraining
         from acting, under this Agreement or any other Loan Document in
         accordance with a request or consent of the Majority Lenders and such
         request and any action taken or failure to act pursuant thereto shall
         be binding upon all of the Lenders.

                  (b) For purposes of determining compliance with the conditions
         specified in Section 5.1, each Lender that has executed this Agreement
         shall be deemed to have consented to, approved or accepted or to be
         satisfied with, each document or other matter either sent by the Agent
         to such Lender for consent, approval, acceptance or satisfaction, or
         required thereunder to be consented to or approved by or acceptable or
         satisfactory to the Lender.

         10.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Lenders, unless the Agent shall have
received written notice from a Lender or Borrowers referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Lenders of its receipt of any
such notice. The Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Majority Lenders in 


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<PAGE>   79

accordance with Article 9; provided, however, that unless and until the Agent
has received any such request, the 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 or in the best interest
of the Lenders, except to the extent that this Agreement expressly requires that
such action be taken or not be taken, only with the consent or upon the
authorization of the Majority Lenders.

         10.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of
Borrowers and their Subsidiaries, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to the Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
credit worthiness of Borrowers and their Subsidiaries, and all applicable Lender
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrowers
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person 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 investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and credit worthiness of Borrowers.
Except for notices, reports and other documents expressly herein required to be
furnished to the Lenders by the Agent, the Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or credit worthiness of Borrowers which may come into the possession
of any of the Agent-Related Persons.

         10.7 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers
and without limiting the obligation of Borrowers to do so), pro rata, from and
against any and all Indemnified Liabilities; provided, however, that no Lender
shall be liable for the payment to the Agent-Related Persons of any portion of
such Indemnified Liabilities resulting solely from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its ratable share of any costs
or out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of Borrowers. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.



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         10.8 AGENT IN INDIVIDUAL CAPACITY. BA and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with any Borrower and its
Subsidiaries and Affiliates as though BA were not the Agent, the Swing Line
Lender or the Issuing Lender hereunder and without notice to or consent of the
Lenders. The Lenders acknowledge that, pursuant to such activities, BA or its
Affiliates may receive information regarding any Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Borrower or such Affiliates) and acknowledge that the Agent shall
be under no obligation to provide such information to them. With respect to its
Loans, BA shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not the Agent, the
Swing Line Lender or the Issuing Lender, and the terms "Lender" and "Lenders"
include BA in its individual capacity.

         10.9 SUCCESSOR AGENT. The Agent may, and at the request of the Majority
Lenders shall, resign as Agent upon 30 days' notice to the Lenders. If the Agent
resigns under this Agreement, the Majority Lenders shall appoint from among the
Lenders a successor agent for the Lenders which successor agent shall be
approved by Borrowers. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may appoint, after consulting
with the Lenders and Borrowers, a successor agent from among the Lenders. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article 10 and
Sections 11.4 and 11.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Lenders shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Lenders appoint a successor agent as provided for above.
Notwithstanding the foregoing, however, BA may not be removed as the Agent at
the request of the Majority Banks unless BA and any applicable Affiliate shall
also simultaneously be replaced as "Swing Line Lender" and as "Issuing Lender"
hereunder pursuant to documentation in form and substance reasonably
satisfactory to BA.

         10.10 WITHHOLDING TAX.

                  (a) If any Lender is a "foreign corporation, partnership or
         trust" within the meaning of the Code and such Lender claims exemption
         from, or a reduction of, U.S. withholding tax under Sections 1441 or
         1442 of the Code, such Lender agrees with and in favor of the Agent, to
         deliver to the Agent:

                           (i) if such Lender claims an exemption from, or a
                  reduction of, withholding tax under a United States tax
                  treaty, two properly completed and executed copies of IRS Form
                  1001 before the payment of any interest in the first 


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<PAGE>   81

                  calendar year and before the payment of any interest in each
                  third succeeding calendar year during which interest may be
                  paid under this Agreement;

                           (ii) if such Lender claims that interest paid under
                  this Agreement is exempt from United States withholding tax
                  because it is effectively connected with a United States trade
                  or business of such Lender, two properly completed and
                  executed copies of IRS Form 4224 before the payment of any
                  interest is due in the first taxable year of such Lender and
                  in each succeeding taxable year of such Lender during which
                  interest may be paid under this Agreement; and

                            (iii) such other form or forms as may be required
                  under the Code or other laws of the United States as a
                  condition to exemption from, or reduction of, United States
                  withholding tax.

         Such Lender agrees to promptly notify the Agent of any change in
         circumstances which would modify or render invalid any claimed
         exemption or reduction.

                  (b) If any Lender claims exemption from, or reduction of,
         withholding tax under a United States tax treaty by providing IRS Form
         1001 and such Lender sells, assigns, grants a participation in, or
         otherwise transfers all or part of the Obligations of Borrowers to such
         Lender, such Lender agrees to notify the Agent of the percentage amount
         in which it is no longer the beneficial owner of Obligations of
         Borrowers to such Lender. To the extent of such percentage amount, the
         Agent will treat such Lender's IRS Form 1001 as no longer valid.

                  (c) If any Lender claiming exemption from United States
         withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
         grants a participation in, or otherwise transfers all or part of the
         Obligations of Borrowers to such Lender, such Lender agrees to
         undertake sole responsibility for complying with the withholding tax
         requirements imposed by Sections 1441 and 1442 of the Code.

                  (d) If any Lender is entitled to a reduction in the applicable
         withholding tax, the Agent may withhold from any interest payment to
         such Lender an amount equivalent to the applicable withholding tax
         after taking into account such reduction. However, if the forms or
         other documentation required by subsection (a) of this Section are not
         delivered to the Agent, then the Agent may withhold from any interest
         payment to such Lender not providing such forms or other documentation
         an amount equivalent to the applicable withholding tax imposed by
         Sections 1441 and 1442 of the Code, without reduction.

                  (e) If the IRS or any other Governmental Authority of the
         United States or other jurisdiction asserts a claim that the Agent did
         not properly withhold tax from amounts paid to or for the account of
         any Lender (because the appropriate form was not delivered or was not
         properly executed, or because such Lender failed to notify the Agent of
         a change in 


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<PAGE>   82

         circumstances which rendered the exemption from, or reduction of,
         withholding tax ineffective, or for any other reason) such Lender shall
         indemnify the Agent fully for all amounts paid, directly or indirectly,
         by the Agent as tax or otherwise, including penalties and interest, and
         including any taxes imposed by any jurisdiction on the amounts payable
         to the Agent under this Section, together with all costs and expenses
         (including Attorney Costs). The obligation of the Lenders under this
         subsection shall survive the payment of all Obligations and the
         resignation or replacement of the Agent.

         10.11 DOCUMENTATION AGENT. The Lender identified on the facing page or
signature pages of this Agreement or any related document as the "Documentation
Agent" shall not have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, the Lender so identified as the "Documentation
Agent" shall not have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
the Lender so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.

         10.12 SYNDICATION AGENT. The Lender identified on the facing page or
signature pages of this Agreement or any related document as the "Syndication
Agent" shall not have any right, power, obligation, liability, responsibility or
duty under this Agreement other than those applicable to all Lenders as such.
Without limiting the foregoing, the Lender so identified as the "Syndication
Agent" shall not have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
the Lender so identified in deciding to enter into this Agreement or in taking
or not taking action hereunder.





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<PAGE>   83

                                   ARTICLE 11

                                  MISCELLANEOUS

         11.1     AMENDMENT AND RESTATEMENT; AMENDMENTS AND WAIVERS.

                  (a) This Agreement amends and restates in its entirety the
         Existing Credit Agreement and, upon the effectiveness of this
         Agreement, the terms and provisions of the Existing Credit Agreement
         shall, subject to this Section 11.1(a), be superseded hereby and
         thereby. All references to "Credit Agreement" contained in the other
         Loan Documents delivered in connection with the Existing Credit
         Agreement shall be deemed to refer to this Second Amended and Restated
         Credit Agreement. Notwithstanding the amendment and restatement of the
         Existing Credit Agreement by this Agreement, the Obligations owing to
         the Lenders and the Agent by Borrower under the Existing Credit
         Agreement remain outstanding as of the date hereof and constitute
         continuing Borrowers' Obligations hereunder. The Obligations shall in
         all respects be continuing, and this Agreement shall not be deemed to
         evidence or result in a novation or repayment and reborrowing of the
         Obligations. In furtherance of and without limiting the foregoing, from
         and after the date of this Agreement, the terms, conditions and
         covenants governing the Obligations shall be solely as set forth in
         this Agreement, which shall supersede the Existing Credit Agreement in
         its entirety.

                  (b) No amendment or waiver of any provision of this Agreement
         or any other Loan Document, and no consent with respect to any
         departure by any Borrower or any applicable Subsidiary therefrom, shall
         be effective unless the same shall be in writing and signed by the
         Majority Lenders (or by the Agent at the written request of the
         Majority Lenders) and Borrowers and acknowledged by the Agent, and then
         any such waiver or consent shall be effective only in the specific
         instance and for the specific purpose for which given; provided,
         however, that no such waiver, amendment, or consent shall, unless in
         writing and signed by all the Lenders and Borrowers and acknowledged by
         the Agent, do any of the following:

                           (i) increase (except pursuant to Section 2.15) or
                  extend the Commitment of any Lender (or reinstate any
                  Commitment terminated pursuant to Section 9.2);

                           (ii) postpone or delay any date fixed by this
                  Agreement or any other Loan Document for any payment of
                  principal, interest, fees or other amounts due to the Lenders
                  (or any of them) hereunder or under any other Loan Document;

                           (iii) reduce the principal of, or the rate of
                  interest specified herein on any Loan, or any fees or other
                  amounts payable hereunder or under any other Loan Document;



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<PAGE>   84

                           (iv) change the percentage of the Commitments or of
                  the aggregate unpaid principal amount of the Loans which is
                  required for the Lenders or any of them to take any action
                  hereunder; or

                           (v) amend this Section, or Section 2.13, or any
                  provision herein providing for consent or other action by all
                  Lenders;

         and, provided further, that (i) no amendment, waiver or consent shall,
         unless in writing and signed by the Agent in addition to the Majority
         Lenders or all the Lenders, as the case may be, affect the rights or
         duties of the Agent under this Agreement or any other Loan Document,
         (ii) no amendment, waiver or consent shall, unless in writing and
         signed by the Issuing Lender in addition to the Majority Lenders or all
         Lenders, as the case may be, affect the rights or duties of the Issuing
         Lender under this Agreement or any L/C-Related Document relating to any
         Letter of Credit Issued or to be Issued by it, and (iii) no amendment,
         waiver or consent shall, unless in writing and signed by the Swing Line
         Lender in addition to the Majority Lenders or all Lenders, as the case
         may be, affect the rights or duties of the Swing Line Lender under this
         Agreement or any other Loan Document.

         11.2     NOTICES.

                  (a) All notices, requests, consents, approvals, waivers and
         other communications shall be in writing (including, unless the context
         expressly otherwise provides, by facsimile transmission, provided that
         any matter transmitted by Borrowers or Borrower Representative by
         facsimile (i) shall be immediately confirmed by a telephone call to the
         recipient at the number specified on Schedule 11.2, and (ii) shall be
         followed promptly by delivery of a hard copy original thereof) and
         mailed, faxed or delivered, to the address or facsimile number
         specified for notices on Schedule 11.2; or, as directed to Borrowers or
         the Agent, to such other address as shall be designated by such party
         in a written notice to the other parties, and as directed to any other
         party, at such other address as shall be designated by such party in a
         written notice to Borrowers and the Agent.

                  (b) All such notices, requests and communications shall, when
         transmitted by overnight delivery, or faxed, be effective when
         delivered for overnight (next-day) delivery, or transmitted in legible
         form by facsimile machine, respectively, or if mailed, upon the third
         Business Day after the date deposited into the U.S. mail, or if
         delivered, upon delivery; except that notices pursuant to Article 2 or
         10 to the Agent shall not be effective until actually received by the
         Agent.

                  (c) Any agreement of the Agent and the Lenders herein to
         receive certain notices by telephone or facsimile is solely for the
         convenience and at the request of Borrowers. The Agent and the Lenders
         shall be entitled to rely on the authority of any Person purporting to
         be a Person authorized by Borrowers to give such notice and the Agent
         and the Lenders shall not have any liability to Borrowers or other
         Person on account of any action taken or not 


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<PAGE>   85

         taken by the Agent or the Lenders in reliance upon such telephonic or
         facsimile notice. The obligation of Borrowers to repay the Loans and
         L/C Obligations shall not be affected in any way or to any extent by
         any failure by the Agent and the Lenders to receive written
         confirmation of any telephonic or facsimile notice or the receipt by
         the Agent and the Lenders of a confirmation which is at variance with
         the terms understood by the Agent and the Lenders to be contained in
         the telephonic or facsimile notice.

         11.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.

         11.4 COSTS AND EXPENSES.  Borrowers shall:

                  (a) whether or not the transactions contemplated hereby are
         consummated, pay or reimburse BA (including in its capacity as Agent)
         and each Lender within five Business Days after demand (subject to
         subsection 5.1(f)) for all reasonable costs and expenses incurred by BA
         (including in its capacity as Agent, Swing Line Lender, Issuing Lender
         and a Lender) and each Lender in connection with the development,
         preparation, delivery and execution of, and any amendment, supplement,
         waiver or modification to (in each case, whether or not consummated),
         this Agreement, any Loan Document and any other documents prepared in
         connection herewith or therewith, and the consummation of the
         transactions contemplated hereby and thereby, including reasonable
         Attorney Costs incurred by BA (including in its capacity as Agent,
         Swing Line Lender, Issuing Lender and a Lender) and any Lender with
         respect thereto; provided, however, that each Lender, other than Agent,
         shall seek to avoid duplication of efforts in order to limit the fees
         and expenses payable hereunder; and

                  (b) pay or reimburse the Agent and each Lender within five
         Business Days after demand (subject to subsection 5.1(e)) for all
         reasonable costs and expenses (including Attorney Costs) incurred by
         them in connection with the enforcement, attempted enforcement, or
         preservation of any rights or remedies under this Agreement or any
         other Loan Document during the existence of an Event of Default or
         after acceleration of the Loans (including in connection with any
         "workout" or restructuring regarding the Loans, and including in any
         Insolvency Proceeding or appellate proceeding).



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<PAGE>   86

         11.5 BORROWERS' INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, each Borrower, jointly and severally, shall
indemnify, defend and hold the Agent-Related Persons, and each Lender and each
of its respective officers, directors, employees, counsel, agents and
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including Attorney
Costs) of any kind or nature whatsoever which may at any time (including at any
time following repayment of the Loans, the termination of the Letters of Credit
and the termination, resignation or replacement of the Agent or replacement of
any Lender) be imposed on, incurred by or asserted against any such Person in
any way relating to or arising out of this Agreement or any document
contemplated by or referred to herein, or the transactions contemplated hereby,
or any action taken or omitted by any such Person under or in connection with
any of the foregoing, including with respect to any investigation, litigation or
proceeding (including any Insolvency Proceeding or appellate proceeding) related
to or arising out of this Agreement or the Loans or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that
Borrowers shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations.

         11.6 PAYMENTS SET ASIDE. To the extent that Borrowers make a payment to
the Agent or the Lenders, or the Agent or the Lenders exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Lender in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any Insolvency Proceeding or otherwise, then
(a) to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender severally agrees to pay to the Agent upon demand its pro rata share
of any amount so recovered from or repaid by the Agent.

         11.7 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Borrowers may not assign or transfer any of
its rights or obligations under this Agreement without the prior written consent
of the Agent and each Lender.

         11.8     ASSIGNMENTS, PARTICIPATIONS, ETC.



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                  (a) Any Lender may, with the written consent of the Borrowers
         (at all times other than during the existence of an Event of Default)
         and Agent, which consents shall not be unreasonably withheld, at any
         time assign and delegate to one or more Eligible Assignees (provided
         that no written consent of the Agent or the Borrowers shall be required
         in connection with any assignment and delegation by a Lender to an
         Eligible Assignee that is an Affiliate of such Lender) (each an
         "Assignee") all, or any ratable part of all, of the Loans, the
         Commitments and the other rights and obligations of such Lender
         hereunder, in a minimum amount equal to the lesser of (i) $5,000,000 or
         (ii) the remaining amount of such Lender's Commitments; provided,
         however, that Borrowers and the Agent may continue to deal solely and
         directly with such Lender in connection with the interest so assigned
         to an Assignee until (i) written notice of such assignment, together
         with payment instructions, addresses and related information with
         respect to the Assignee, shall have been given to Borrowers and the
         Agent by such Lender and the Assignee; (ii) such Lender and its
         Assignee shall have delivered to Borrowers and the Agent an Assignment
         and Acceptance in the form of Exhibit F ("Assignment and Acceptance"),
         together with any Note or Notes subject to such assignment, and (iii)
         the assignor Lender or Assignee has paid to the Agent a processing fee
         in the amount of $2,500.

                  (b) From and after the date that the Agent notifies the
         assignor Lender that it has received (and provided its consent with
         respect to) an executed Assignment and Acceptance and payment of the
         above-referenced processing fee, (i) the Assignee thereunder shall be a
         party hereto and, to the extent that rights and obligations hereunder
         have been assigned to it pursuant to such Assignment and Acceptance,
         shall have the rights and obligations of a Lender under the Loan
         Documents, and (ii) the assignor Lender shall, to the extent that
         rights and obligations hereunder and under the other Loan Documents
         have been assigned by it pursuant to such Assignment and Acceptance,
         relinquish its rights and be released from its obligations under the
         Loan Documents.

                  (c) Within five Business Days after its receipt of notice by
         the Agent that it has received an executed Assignment and Acceptance
         and payment of the processing fee, Borrowers shall execute and deliver
         to the Agent, new Notes evidencing such Assignee's assigned Loans and
         Commitment and, if the assignor Lender has retained a portion of its
         Loans and its Commitment, replacement Notes in the principal amount of
         the Loans retained by the assignor Lender (such Notes to be in exchange
         for, but not in payment of, the Notes held by such Lender). Immediately
         upon each Assignee's making its processing fee payment under the
         Assignment and Acceptance, this Agreement shall be deemed to be amended
         to the extent, but only to the extent, necessary to reflect the
         addition of the Assignee and the resulting adjustment of the
         Commitments arising therefrom. The Commitment allocated to each
         Assignee shall reduce such Commitments of the assigning Lender pro
         tanto.

                  (d) Any Lender may at any time sell to one or more commercial
         Lenders or other Persons not Affiliates of Borrowers (a "Participant")
         participating interests in any Loans, the Commitment of that Lender and
         the other interests of that Lender (the "originating Lender") 


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         hereunder and under the other Loan Documents; provided, however, that
         (i) the originating Lender's obligations under this Agreement shall
         remain unchanged, (ii) the originating Lender shall remain solely
         responsible for the performance of such obligations, (iii) Borrowers
         and the Agent shall continue to deal solely and directly with the
         originating Lender in connection with the originating Lender's rights
         and obligations under this Agreement and the other Loan Documents, and
         (iv) no Lender shall transfer or grant any participating interest under
         which the Participant has rights to approve any amendment to, or any
         consent or waiver with respect to, this Agreement or any other Loan
         Document, except to the extent such amendment, consent or waiver would
         require unanimous consent of the Lenders as described in the first
         proviso to Section 11.1. In the case of any such participation, the
         Participant shall be entitled to the benefit of Sections 4.1, 4.3 and
         11.5 as though it were also a Lender hereunder, and if amounts
         outstanding under this Agreement are due and unpaid, or shall have been
         declared or shall have become due and payable upon the occurrence of an
         Event of Default, each Participant shall be deemed to have the right of
         set-off in respect of its participating interest in amounts owing under
         this Agreement to the same extent as if the amount of its participating
         interest were owing directly to it as a Lender under this Agreement.

                  (e) Notwithstanding any other provision in this Agreement, any
         Lender may at any time create a security interest in, or pledge, all or
         any portion of its rights under and interest in this Agreement and the
         Note held by it in favor of any Federal Reserve Lender in accordance
         with Regulation A of the FRB or U.S. Treasury Regulation 31 CFR
         ?203.14, and such Federal Reserve Lender may enforce such pledge or
         security interest in any manner permitted under applicable law.

         11.9 CONFIDENTIALITY. Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" or
"secret" by Borrowers and provided to it by any Borrower or any Subsidiary, or
by the Agent on such Borrower's or such Subsidiary's behalf, under this
Agreement or any other Loan Document, and neither it nor any of its Affiliates
shall use any such information other than in connection with or in enforcement
of this Agreement and the other Loan Documents or in connection with other
business now or hereafter existing or contemplated with any Borrower or any
Subsidiary; except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by the Lender, or
(ii) was or becomes available on a non-confidential basis from a source other
than any Borrower, provided that such source is not bound by a confidentiality
agreement with any Borrower known to the Lender; provided, however, that any
Lender may disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which the Lender is subject or in
connection with an examination of such Lender by any such authority; (B)
pursuant to subpoena or other court process; (C) when required to do so in
accordance with the provisions of any applicable Requirement of Law; (D) to the
extent reasonably required in connection with any litigation or proceeding to
which the Agent, any Lender or their respective Affiliates may be party; (E) to
the extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Loan Document; (F) to such Lender's independent
auditors and other professional advisors; (G) to any Participant or Assignee,
actual or 


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potential, provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Lenders hereunder; (H) as to any
Lender or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which any Borrower or any
Subsidiary is party or is deemed party with such Lender or such Affiliate; and
(I) to its Affiliates.

         11.10 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to Borrowers, any such notice being waived by Borrowers to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of any Borrower against any and all Obligations owing to such
Lender, now or hereafter existing, irrespective of whether or not the Agent or
such Lender shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify Borrowers and the Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.

         11.11 AUTOMATIC DEBITS OF FEES. With respect to any fee, or any other
cost or expense (including Attorney Costs) due and payable to the Agent, Issuing
Lender or BA under the Loan Documents, Borrowers hereby irrevocably authorize BA
to debit any deposit account of any Borrower with BA in an amount such that the
aggregate amount debited from all such deposit accounts does not exceed such fee
or other cost or expense. If there are insufficient funds in such deposit
accounts to cover the amount of the fee or other cost or expense then due, such
debits will be reversed (in whole or in part, in BA's sole discretion) and such
amount not debited shall be deemed to be unpaid. No such debit under this
Section shall be deemed a set-off.

         11.12 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender
shall notify the Agent in writing of any changes in the address to which notices
to the Lender should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.

         11.13 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.

         11.14 SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.

         11.15 NO THIRD PARTIES BENEFITED. This Agreement is made and entered
into for the sole protection and legal benefit of Borrowers, the Lenders, the
Agent and the Agent-Related Persons, 


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<PAGE>   90

and their permitted successors and assigns, and no other Person shall be a
direct or indirect legal beneficiary of, or have any direct or indirect cause of
action or claim in connection with, this Agreement or any of the other Loan
Documents.

         11.16 DESIGNATED SENIOR INDEBTEDNESS. The Obligations are hereby
designated by Borrowers as "Designated Senior Indebtedness", as defined in the
Indenture.

         11.17 GOVERNING LAW AND JURISDICTION.

                  (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
         CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS;
         PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING
         UNDER FEDERAL LAW.

                  (b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
         AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF
         THE STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT
         OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
         BORROWERS, THE AGENT AND THE LENDERS CONSENTS, FOR ITSELF AND IN
         RESPECT OF ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THOSE
         COURTS. EACH OF BORROWERS, THE AGENT AND THE LENDERS IRREVOCABLY WAIVES
         ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED
         ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
         HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
         IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. BORROWERS,
         THE AGENT AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
         COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
         PERMITTED BY ILLINOIS LAW.

         11.18 WAIVER OF JURY TRIAL. BORROWERS, THE LENDERS AND THE AGENT EACH
WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. BORROWERS, THE
LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, 


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<PAGE>   91

COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
ANY PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

         11.19 JOINT AND SEVERAL LIABILITY. Each Borrower hereby agrees that
such Borrower is jointly and severally liable for the full and prompt payment
(whether at stated maturity, by acceleration or otherwise) and performance of,
all Obligations owed or hereafter owing to the Agent and the Lenders by each
other Borrower.

         11.20 ENTIRE AGREEMENT. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among Borrowers, the
Lenders and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.





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<PAGE>   92






         IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agent have
caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.


SPECIALTY EQUIPMENT COMPANIES,               BANK OF AMERICA NATIONAL
INC.                                         TRUST AND SAVINGS ASSOCIATION,
                                             as Agent

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


SPECIALTY EQUIPMENT                          BANK OF AMERICA NATIONAL
MANUFACTURING CORPORATION                    TRUST AND SAVINGS ASSOCIATION,
                                             as a Lender

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


                                             THE FIRST NATIONAL BANK OF
                                             CHICAGO,
                                             as Documentation Agent and as a 
                                             Lender




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

                                             FIRST UNION NATIONAL BANK, as
                                             Syndication Agent and as a Lender
                                             
                                             By:
                                                --------------------------------
                                                  Name:
                                                       -------------------------
                                                  Title:
                                                        ------------------------


                                       86
<PAGE>   93


                                             HARRIS TRUST AND SAVINGS BANK,
                                             as a Lender


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


                                             U.S. BANK NATIONAL ASSOCIATION,
                                             as a Lender


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


                                             ABN AMRO BANK N.V., as a Lender


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


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


                                       87