EXHIBIT 10.1





                                CREDIT AGREEMENT



                                  by and among



                                GTECH CORPORATION
                                  as Borrower,


                             BANK OF AMERICA, N.A.,
                      as Administrative Agent and as Lender


                             THE BANK OF NOVA SCOTIA
                       as Syndication Agent and as Lender,

                        CREDIT LYONNAIS NEW YORK BRANCH,
                     as Co-Documentation Agent and as Lender

                              FLEET NATIONAL BANK,
                    as Co-Documentation Agent and as Lender,

                                       and

                   THE LENDERS PARTY HERETO FROM TIME TO TIME



                                  June 22, 2001


                         BANC OF AMERICA SECURITIES LLC,
                   as Sole Lead Arranger and Sole Book Manager



<PAGE>

                                Table of Contents

                                                                            Page

                                    ARTICLE I
                              Definitions and Terms

1.1.     Definitions...........................................................2
1.2.     Rules of Interpretation..............................................23

                                   ARTICLE II
                              The Credit Facilities

2.1.     Revolving Loans......................................................25
2.2.     Use of Proceeds......................................................27
2.3.     Notes................................................................28
2.4.     Swing Line...........................................................28

                                   ARTICLE III
                                Letters of Credit

3.1.     Letters of Credit....................................................30
3.2.     Reimbursement and Participations.....................................30
3.3.     Governmental Action..................................................33

                                   ARTICLE IV
                Eurodollar Funding, Fees, and Payment Conventions

4.1.     Interest Rate Options................................................34
4.2.     Conversions and Elections of Subsequent Interest Periods.............34
4.3.     Payment of Interest..................................................35
4.4.     Prepayments of Eurodollar Rate Loans.................................35
4.5.     Manner of Payment....................................................35
4.6.     Fees.................................................................36
4.7.     Pro Rata Payments....................................................37
4.8.     Computation of Rates and Fees........................................37
4.9.     Deficiency Advances; Failure to Purchase Participations..............37
4.10.    Intraday Funding.....................................................38

                                    ARTICLE V
                             Change in Circumstances

5.1.     Increased Cost and Reduced Return....................................39
5.2.     Limitation on Types of Loans.........................................40
5.3.     Illegality...........................................................41
5.4.     Treatment of Affected Loans..........................................41
5.5.     Compensation.........................................................41
5.6.     Taxes................................................................42
5.7.     Replacement Banks....................................................44



<PAGE>
                                Table of Contents
                                   (continued)
                                                                            Page

                                   ARTICLE VI
            Conditions to Making Loans and Issuing Letters of Credit

6.1.     Conditions of Initial Advance........................................45
6.2.     Conditions of Revolving Loans and Letter of Credit...................47

                                   ARTICLE VII
                         Representations and Warranties

7.1.     Organization and Authority...........................................49
7.2.     Loan Documents.......................................................49
7.3.     Solvency.............................................................50
7.4.     Material Subsidiaries and Stockholders...............................50
7.5.     Intentionally Omitted................................................50
7.6.     Financial Condition..................................................50
7.7.     Title to Properties..................................................51
7.8.     Taxes................................................................51
7.9.     Other Agreements.....................................................51
7.10.    Litigation...........................................................52
7.11.    Margin Stock.........................................................52
7.12.    Regulated Company....................................................52
7.13.    Patents, Etc.........................................................52
7.14.    No Untrue Statement..................................................52
7.15.    No Consents, Etc.....................................................53
7.16.    Employee Benefit Plans...............................................53
7.17.    No Default...........................................................54
7.18.    Environmental Laws...................................................54
7.19.    Employment Matters...................................................54
7.20.    RICO.................................................................55
7.21.    Foreign Assets Control Regulations, etc..............................55

                                  ARTICLE VIII
                              Affirmative Covenants

8.1.     Financial Reports, Etc...............................................56
8.2.     Maintain Properties..................................................57
8.3.     Existence, Qualification, Etc........................................57
8.4.     Regulations and Taxes................................................57
8.5.     Insurance............................................................57
8.6.     True Books...........................................................58
8.7.     Right of Inspection..................................................58
8.8.     Observe all Laws.....................................................58
8.9.     Pay Indebtedness to Lenders and Perform Other Covenants..............58
8.10.    Covenants Extending to Other Persons.................................58
8.11.    Officer's Knowledge of Default.......................................58
8.12.    Suits or Other Proceedings...........................................59
8.13.    Notice of Environmental Complaint or Condition.......................59
8.14.    Environmental Compliance.............................................59
8.15.    Indemnification......................................................59
8.16.    Further Assurances...................................................59
8.17.    Employee Benefit Plans...............................................60
8.18.    Intentionally Omitted................................................60
8.19.    New Subsidiaries.....................................................60
8.20.    Use of Proceeds......................................................61

                                   ARTICLE IX
                               Negative Covenants

9.1.     Financial Covenants..................................................62
9.2.     Liens................................................................62
9.3.     Guaranties...........................................................64
9.4.     Disposition of Assets................................................64
9.5.     Investments; Acquisitions............................................64
9.6.     Merger or Consolidation..............................................65
9.7.     Dividends, Redemptions and Other Payments............................66
9.8.     Transactions with Affiliates.........................................66
9.9.     Benefit Plans........................................................66
9.10.    Fiscal Year..........................................................67
9.11.    Dissolution, Etc.....................................................67
9.12.    Limitations on Sales and Leasebacks..................................67
9.13.    Change in Control....................................................67
9.14.    Transactive Corporation..............................................67
9.15.    Synthetic Lease Obligations..........................................67

                                    ARTICLE X
                       Events of Default and Acceleration

10.1.    Events of Default....................................................68
10.2.    Agent to Act.........................................................72
10.3.    Cumulative Rights....................................................72
10.4.    No Waiver............................................................72
10.5.    Allocation of Proceeds...............................................72


<PAGE>
                                Table of Contents
                                   (continued)
                                                                            Page

                                   ARTICLE XI
                                    The Agent

11.1.    Appointment and Authorization of Agent...............................74
11.2.    Delegation of Duties.................................................74
11.3.    Liability of Agent...................................................74
11.4.    Reliance by Agent....................................................75
11.5.    Notice of Default....................................................75
11.6.    Credit Decision; Disclosure of Information by Agent..................76
11.7.    Indemnification of Agent.............................................76
11.8.    Agents in their Individual Capacities................................77
11.9.    Successor Agent......................................................77
11.10.   Sole Lender..........................................................77
11.11.   Agent Notices........................................................77
11.12.   Syndication and Co-Documentation Agents..............................78

                                   ARTICLE XII
                                  Miscellaneous

12.1.    Assignments and Participations.......................................79
12.2.    Notices..............................................................81
12.3.    Right of Set-off; Adjustments........................................82
12.4.    Survival.............................................................83
12.5.    Expenses.............................................................83
12.6.    Amendments and Waivers...............................................83
12.7.    Counterparts; Facsimile Signatures...................................84
12.8.    Termination..........................................................84
12.9.    Indemnification; Limitation of Liability.............................85
12.10.   Severability.........................................................86
12.11.   Entire Agreement.....................................................86
12.12.   Agreement Controls...................................................86
12.13.   Usury Savings Clause.................................................86
12.14.   Confidentiality......................................................87
12.15.   Governing Law; Waiver of Jury Trial..................................88
12.16.   Special Funding Option...............................................89


<PAGE>



EXHIBIT A           APPLICABLE COMMITMENT PERCENTAGES........................A-1

EXHIBIT B           FORM OF ASSIGNMENT AND ACCEPTANCE........................B-1

EXHIBIT C           NOTICE OF APPOINTMENT (OR REVOCATION) OF
                    AUTHORIZED REPRESENTATIVE................................C-1

EXHIBIT D-1         FORM OF BORROWING NOTICE...............................D-1-1

EXHIBIT D-2         FORM OF BORROWING NOTICE--SWING LINE LOANS.............D-2-1

EXHIBIT E           FORM OF INTEREST RATE SELECTION NOTICE...................E-1

EXHIBIT F-1         FORM OF REVOLVING NOTE.................................F-1-1

EXHIBIT F-2         FORM OF SWING LINE NOTE................................F-2-1

EXHIBIT G           FORM OF OPINION OF BORROWER'S COUNSEL....................G-1

EXHIBIT H           COMPLIANCE CERTIFICATE...................................H-1

EXHIBIT I           FORM OF FACILITY GUARANTY................................I-1

EXHIBIT J           FORM OF CONFIDENTIALITY AGREEMENT........................J-1



Schedule 7.4        Material Subsidiaries....................................S-1

Schedule 7.6        Indebtedness.............................................S-2

Schedule 7.7        Liens....................................................S-3

Schedule 7.8        Tax Matters..............................................S-4

Schedule 7.18       Environmental Matters ...................................S-5

<PAGE>


                                CREDIT AGREEMENT


         THIS CREDIT AGREEMENT, dated as of June 22, 2001 (the "Agreement"),  is
made by and among GTECH CORPORATION, a Delaware corporation having its principal
place of business in West  Greenwich,  Rhode  Island (the  "Borrower"),  BANK OF
AMERICA,  N.A., a national banking association  organized and existing under the
laws of the United States, in its capacity as a Lender ("Bank of America"),  and
each other  financial  institution  executing  and  delivering a signature  page
hereto and each other  financial  institution  which may  hereafter  execute and
deliver an instrument of assignment  with respect to this Agreement  pursuant to
Section  12.1  (hereinafter  such  financial  institutions  may be  referred  to
individually as a "Lender" or  collectively as the "Lenders"),  BANK OF AMERICA,
N.A., a national  banking  association  organized and existing under the laws of
the United States, in its capacity as  administrative  agent for the Lenders (in
such  capacity,  and together with any successor  agent  appointed in accordance
with the terms of  Section  11.9,  the  "Agent"),  THE BANK OF NOVA  SCOTIA,  as
Syndication   Agent  and  as  Lender,   CREDIT  LYONNAIS  NEW  YORK  BRANCH,  as
Co-Documentation  Agent and as Lender,  FLEET NATIONAL BANK, as Co-Documentation
Agent and as Lender;

                              W I T N E S S E T H:

         WHEREAS,  the Borrower has requested that the Lenders make available to
the Borrower a revolving credit facility of up to $300,000,000,  the proceeds of
which are to be used to refinance  and replace the  Borrower's  Existing  Senior
Credit  Facility (as defined  below) and for working  capital and other  general
corporate  purposes and which shall include a letter of credit facility of up to
$100,000,000 for the issuance of standby and commercial  letters of credit and a
swing line facility of up to $25,000,000; and

         WHEREAS,  the  Lenders are  willing to make such  revolving  credit and
letter  of  credit  facilities  available  to the  Borrower  upon the  terms and
conditions set forth herein;

         NOW, THEREFORE, the Borrower, the Lenders and the Agent hereby agree as
follows:


<PAGE>



                                   ARTICLE I

                              Definitions and Terms
                              ---------------------

          1.1. Definitions.  For the purposes of this Agreement,  in addition to
the definitions  set forth above,  the following terms shall have the respective
meanings set forth below:

               "Acquisition"  means the acquisition of (i) a controlling  equity
          interest  in another  Person  (including  the  purchase  of an option,
          warrant or  convertible  or similar  type  security to acquire  such a
          controlling  interest at the time it becomes exercisable by the holder
          thereof), whether by purchase of such equity interest or upon exercise
          of an option or warrant for, or conversion of  securities  into,  such
          equity interest, or (ii) assets of another Person which constitute all
          or  substantially  all of the  assets  of such  Person or of a line or
          lines of business conducted by such Person.

               "Advance" means a borrowing  under the Revolving  Credit Facility
          consisting of a Base Rate Loan or a Eurodollar Rate Loan.

               "Affected  Loans" shall have the meaning set forth in Section 5.4
          hereof.

               "Affected  Type"  shall have the meaning set forth in Section 5.4
          hereof.

               "Affiliate"  means any Person (i) which  directly  or  indirectly
          through one or more intermediaries  controls,  or is controlled by, or
          is under common control with the Borrower;  or (ii) which beneficially
          owns or holds 15% or more of any class of the outstanding voting stock
          (or in the case of a Person which is not a corporation, 15% or more of
          the  equity  interest)  of the  Borrower;  or (iii) 15% or more of any
          class  of the  outstanding  voting  stock  (or in the case of a Person
          which is not a  corporation,  15% or more of the equity  interest)  of
          which  is  beneficially  owned  or  held  by the  Borrower.  The  term
          "control" means the possession,  directly or indirectly,  of the power
          to direct or cause the direction of the  management  and policies of a
          Person,  whether  through  ownership of voting  stock,  by contract or
          otherwise.

               "Agent-Related  Persons" means the Agent (including any successor
          administrative agent), together with its affiliates (including, in the
          case of Bank of America in its  capacity as the Agent,  BAS),  and the
          officers,  directors,  employees and attorneys-in-fact of such Persons
          and affiliates.

               "Applicable  Commitment Percentage" means, for each Lender at any
          time,  a fraction  (expressed  as a  percentage),  with respect to the
          Revolving Credit Facility (including  Participations in any Swing Line
          Loan and the Letter of Credit Facility),  the numerator of which shall
          be such Lender's  Revolving  Credit  Commitment and the denominator of
          which shall be the Total Revolving Credit Commitment, which Applicable
          Commitment Percentage for each Lender as of the Closing Date is as set
          forth in Exhibit A; provided that the Applicable Commitment Percentage
          of each  Lender  shall  be  increased  or  decreased  to  reflect  any
          assignments to or by such Lender  effected in accordance  with Section
          12.1.

               "Applicable  Lending Office" means,  for each Lender and for each
          Type of Loan, the "Lending  Office" of such Lender (or of an affiliate
          of such  Lender)  designated  for such  Type of Loan on the  signature
          pages  hereof or such other  office of such Lender (or an affiliate of
          such Lender) as such Lender may from time to time specify to the Agent
          and the Borrower by written notice in accordance with the terms hereof
          as the  office  by which  its  Loans  of such  Type are to be made and
          maintained.

               "Applicable  Margin"  means for purposes of  calculating  (i) the
          applicable  interest margin for the Interest Period for any Eurodollar
          Loan,  (ii) the applicable rate for the issuance of Standby Letters of
          Credit and (iii) the applicable rate of the Facility Fee, that percent
          per annum set forth as the  Applicable  Margin in the Pricing Grid and
          subject to further adjustment as therein provided.

               "Applications  and  Agreements  for  Letters  of  Credit"  means,
          collectively,  the  Applications and Agreements for Letters of Credit,
          or similar  documentation,  executed by the Borrower from time to time
          and  delivered  to the Issuing Bank to support the issuance of Letters
          of Credit.

               "Approved  Fund" means any Person  (other than a natural  Person)
          that (i) is or will be  engaged  in  making,  purchasing,  holding  or
          otherwise  investing in  commercial  loans and similar  extensions  of
          credit in the ordinary course of its business and (ii) is administered
          or managed  by (x) a Lender,  (y) an  affiliate  of a Lender or (z) an
          entity or an  affiliate  of an entity  that  administers  or manages a
          Lender.

               "Assignment  and   Acceptance"   shall  mean  an  Assignment  and
          Acceptance in the form of Exhibit B (with blanks  appropriately filled
          in)  delivered  to the Agent in  connection  with an  assignment  of a
          Lender's interest under this Agreement pursuant to Section 12.1.

               "Attributable Debt" means, as to any particular lease relating to
          a Sale and  Leaseback  Transaction,  the  present  value of all  Lease
          Rentals required to be paid by the Borrower or any Material Subsidiary
          under such lease  during the  remaining  term thereof  (determined  in
          accordance with generally accepted financial practice using a discount
          factor equal to the interest rate implicit in such lease);

               "Authorized  Representative"  means  any of the  Chairman,  Chief
          Executive Officer,  Chief Operating Officer,  Chief Financial Officer,
          Vice  President and  Treasurer,  Vice  President and  Controller,  and
          Director  of Treasury of the  Borrower or any other  Person  expressly
          designated  by the Chief  Financial  Officer or the  Treasurer  of the
          Borrower (or the Board of Directors of the  Borrower) as an Authorized
          Representative  of the  Borrower,  as set forth from time to time in a
          certificate in the form of Exhibit C.

               "Bank of America" means Bank of America, N.A. and its successors.

               "BAS" means Banc of America Securities LLC and its successors.

               "Base Rate" means,  for any day, the  fluctuating  rate per annum
          equal to the  higher of (i) the  Federal  Funds Rate for such day plus
          one-half of one  percent  (0.5%) and (ii) the Prime Rate for such day.
          Any  change in the Base Rate due to a change in the Prime  Rate or the
          Federal  Funds Rate shall be effective on the  effective  date of such
          change in the Prime Rate or Federal Funds Rate.

               "Base Rate Loan"  means a Loan for which the rate of  interest is
          determined by reference to the Base Rate.

               "Base Rate  Refunding  Loan" means a Base Rate Loan or Swing Line
          Loan made either to (i) satisfy Reimbursement Obligations arising from
          a drawing  under a Letter of  Credit  or (ii) pay Bank of  America  in
          respect of Swing Line Outstandings.

               "Board"  means  the Board of  Governors  of the  Federal  Reserve
          System (or any successor body).

               "Borrowing  Notice"  means the notice  delivered by an Authorized
          Representative  in  connection  with an  Advance  under the  Revolving
          Credit Facility or a Swing Line Loan, in the forms of Exhibits D-1 and
          D-2, respectively.

               "Business Day" means, (i) except as expressly  provided in clause
          (ii), any day which is not a Saturday,  Sunday or a day on which banks
          in the  States  of New York  and  North  Carolina  are  authorized  or
          obligated by law, executive order or governmental  decree to be closed
          and,  (ii) with  respect to the  selection,  funding,  interest  rate,
          payment,  and Interest  Period of any  Eurodollar  Rate Loan,  any day
          which is a Business Day, as described above, and on which the relevant
          international  financial  markets  are  open  for the  transaction  of
          business contemplated by this Agreement in London,  England, New York,
          New York and Charlotte, North Carolina.

               "Capital  Expenditures"  means,  with respect to the Borrower and
          its Subsidiaries,  for any period,  expenditures or costs for fixed or
          capital assets made by the Borrower and its  Subsidiaries  during such
          period which in accordance with GAAP applied on a Consistent Basis are
          characterized as capital expenditures;

               "Capital  Lease"  means  each  lease  which has been or should be
          capitalized  in  accordance  with GAAP as in effect  from time to time
          including Statement No. 13 of the Financial Accounting Standards Board
          and any successor thereof.

               "Change of Control" means, at any time:

                    (i) any  "person"  or  "group"  (each  as  used in  Sections
               13(d)(3) and 14(d)(2) of the Exchange Act) either (A) becomes the
               "beneficial  owner" (as  defined  in Rule  13d-3 of the  Exchange
               Act), directly or indirectly,  of Voting Securities of the Parent
               (or securities  convertible  into or exchangeable for such Voting
               Securities)  representing  more than 50% of the  combined  voting
               power of all Voting  Securities of the Parent (on a fully diluted
               basis) or (B) otherwise has the ability,  directly or indirectly,
               to elect a majority of the board of directors of the Parent; or

                    (ii) the  Parent  shall at any time  cease to own all of the
               capital stock of the Borrower.

                    "Closing  Date" means the date as of which this Agreement is
          executed by the  Borrower,  the Lenders and the Agent and on which the
          conditions set forth in Section 6.1 have been satisfied.

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

                    "Commercial   Letter  of   Credit"   means  an   irrevocable
          documentary  letter of credit issued  hereunder for the account of the
          Borrower;  provided  that the expiry  date of a  Commercial  Letter of
          Credit  shall not be later than twelve (12) months  subsequent  to the
          date of  issuance  thereof  and in no event  later than the  Revolving
          Credit Termination Date;

                    "Confidential Information" means with respect to each Lender
          all financial  information in such Lender's possession  concerning the
          Borrower and its Affiliates which has been delivered to such Lender by
          or on behalf of the Borrower pursuant to this Agreement. "Confidential
          Information" does not include, without limitation,  information which:
          (a) is in the public  domain;  (b) is  received by such Lender in good
          faith from a third  party who is not known to such  Lender to be bound
          by a  confidentiality  agreement  with the  Borrower  or known to such
          Lender to be otherwise prohibited from transmitting the information to
          such Lender by a contractual,  legal or fiduciary  obligation;  (c) is
          independently generated by such Lender; (d) is approved for release or
          disclosure by the Borrower in a separate  writing;  or (e) constitutes
          financial  statements delivered to the Agent or a Lender under Section
          8.1 that are otherwise publicly available;

                    "Consistent  Basis" in reference to the  application of GAAP
          means the accounting principles observed in the period referred to are
          comparable   in  all  material   respects  to  those  applied  in  the
          preparation  of the  audited  financial  statements  of  the  Borrower
          referred to as of the Closing Date in Section 7.6(a).

                    "Consolidated   Assets"   means,   as   of   any   date   of
          determination,  the total  assets of the Parent,  the Borrower and its
          Material Subsidiaries which would be shown as assets on a consolidated
          balance  sheet of the Parent as of such time  prepared  in  accordance
          with GAAP,  after  eliminating  all amounts  properly  attributable to
          minority  interests,  if any,  in the stock and  surplus  of  Material
          Subsidiaries;

                    "Consolidated  EBITDA"  means,  with respect to the Borrower
          and its Subsidiaries for any Four-Quarter Period ending on the date of
          computation thereof, the sum of, without duplication, (i) Consolidated
          Net Income  excluding  any  extraordinary  gains or losses,  plus (ii)
          Consolidated  Interest Expense,  plus (iii) taxes on income, plus (iv)
          amortization,  depreciation  and all other non-cash expense items, all
          determined on a consolidated  basis in accordance with GAAP applied on
          a Consistent Basis.

                    "Consolidated  Interest  Coverage Ratio" means, with respect
          to the  Borrower  and its  Subsidiaries  for any  Four-Quarter  Period
          ending  on  the  date  of  computation   thereof,  the  ratio  of  (i)
          Consolidated  EBITDA for such period,  to (ii)  Consolidated  Interest
          Expense for such period.

                    "Consolidated  Interest  Expense" means, with respect to any
          period of computation  thereof, the gross cash interest expense of the
          Borrower  and  its  Subsidiaries  for  such  period  determined  on  a
          consolidated  basis in  accordance  with GAAP  applied on a Consistent
          Basis.

                    "Consolidated   Net  Income"   means,   for  any  period  of
          computation   thereof,   the  net  income  of  the  Borrower  and  its
          Subsidiaries  determined on a  consolidated  basis in accordance  with
          GAAP applied on a Consistent Basis.

                    "Consolidated Shareholders' Equity" means, at any time as of
          which the amount thereof is to be determined,  shareholders' equity of
          the Parent,  the  Borrower and its  Subsidiaries  as  determined  on a
          consolidated  basis in  accordance  with GAAP  applied on a Consistent
          Basis;   provided,   however,   that   in   calculating   Consolidated
          Shareholder's   Equity,  any  amount  of  Brazilian  foreign  currency
          translation  adjustment,   whether  positive  or  negative,  shall  be
          excluded in all cases.

                    "Consolidated  Total Debt Ratio" means,  with respect to the
          Borrower  and  its  Subsidiaries,  the  ratio  of  Consolidated  Total
          Indebtedness at such date to Consolidated  EBITDA for the Four-Quarter
          Period  ending  on or  immediately  prior to the  date of  computation
          thereof;  provided,  however,  that the  calculation  of  Consolidated
          EBITDA for the purpose of  establishing  the  Consolidated  Total Debt
          Ratio for each of the four Four-Quarter  Periods ending next following
          the date of any  Acquisition  that is  accounted  for as a  "purchase"
          shall  include  the results of  operations  of the Person or assets so
          acquired on a historical  pro forma basis as if such  Acquisition  had
          been  consummated as a "pooling of  interests,"  and which amounts may
          include such  adjustments as are permitted under Regulation S-X of the
          Securities and Exchange Commission and reasonably  satisfactory to the
          Agent;

                    "Consolidated Total Indebtedness" means, with respect to the
          Borrower  and its  Subsidiaries  at any  time as of which  the  amount
          thereof is to be  determined,  the sum of (i)  Indebtedness  for Money
          Borrowed  of the  Borrower  and  its  Subsidiaries,  (ii)  all  direct
          guaranties of  non-consolidated  Indebtedness of any Person other than
          Subsidiaries  and (iii) the face amount of all outstanding  letters of
          credit  issued  for  the  account  of  the  Borrower  or  any  of  its
          Subsidiaries  and all  obligations  (to the  extent  not  duplicative)
          arising under such letters of credit, all determined on a consolidated
          basis in accordance with GAAP applied on a Consistent Basis; provided,
          however,  that  there  shall  be  excluded  from  the  calculation  of
          Consolidated Total  Indebtedness  guaranties by the Borrower or any of
          its Subsidiaries of non-consolidated Indebtedness of another Person up
          to an aggregate  principal  amount of $10,000,000 and all Indebtedness
          consisting of Capital Lease  obligations  incurred in connection  with
          off-balance sheet Sale and Leaseback Transactions;

                    "Consolidated  Total  Profits  Before  Tax"  means,  for any
          period,  the total profits before  extraordinary  gains and losses and
          before  Federal,  state,  local and foreign income or similar taxes of
          the Borrower and its Subsidiaries for such period,  as determined on a
          consolidated  basis in  accordance  with GAAP  applied on a Consistent
          Basis;

                    "Contingent  Obligation"  of any Person means all contingent
          liabilities  required  (or  which,  upon  the  creation  or  incurring
          thereof,  would  be  required)  to be  included  in  the  consolidated
          financial   statements   (including   footnotes)  of  such  Person  in
          accordance  with  GAAP  applied  on  a  Consistent  Basis,   including
          Statement No. 5 of the Financial  Accounting  Standards Board, and any
          obligation of such Person  guaranteeing any Indebtedness,  dividend or
          other  obligation of any other Person (the  "primary  obligor") in any
          manner, whether directly or indirectly,  including obligations of such
          Person however incurred:

                    (i) to purchase such Indebtedness or other obligation or any
               property or assets constituting security therefor;

                    (ii) to  advance  or supply  funds in any manner (A) for the
               purchase or payment of such Indebtedness or other obligation,  or
               (B) to  maintain a minimum  working  capital,  net worth or other
               balance sheet condition or any income statement  condition of the
               primary obligor;

                    (iii)  to grant  or  convey  any  lien,  security  interest,
               pledge,  charge or other encumbrance on any property or assets of
               such  Person  to secure  payment  of such  Indebtedness  or other
               obligation;

                    (iv) to lease  property or to purchase  securities  or other
               property or services  primarily  for the purpose of assuring  the
               owner or holder of such Indebtedness or obligation of the ability
               of the primary  obligor to make payment of such  Indebtedness  or
               other obligation; or

                    (v)  otherwise to assure the owner of such  Indebtedness  or
               such  obligation of the primary  obligor  against loss in respect
               thereof.

                    "Continue",  "Continuation",  and "Continued" shall refer to
          the  continuation  pursuant to Section 4.2 hereof of a Eurodollar Rate
          Loan of one Type as a  Eurodollar  Rate Loan of the same Type from one
          Interest Period to the next Interest Period.

                    "Convert",  "Conversion",  and "Converted"  shall refer to a
          conversion  pursuant to Section  4.2 of one Type of Loan into  another
          Type of Loan.

                    "Core  Business" of the Borrower or any of its  Subsidiaries
          means (a) the sale, lease,  delivery,  installation,  operation and/or
          maintenance by the Borrower or any of its  Subsidiaries  of computers,
          computer terminals and/or related hardware and software  pertaining to
          the  operation  of lotteries  and/or  similar  games of chance  and/or
          pari-mutuel  installations (including,  without limitation,  lotteries
          (on-line,  off-line, passive ticket, instant ticket, break-open ticket
          and  video),  bingo,  race  tracks,  jai alai,  legalized  bookmaking,
          off-track betting,  casino, keno and sports betting  facilities),  (b)
          any type of government or state  benefits  processing or  eligibility,
          (c) any type of  commercial  processing,  including  debit and  credit
          transactions,  (d) any type of information technology and the products
          and services related to such business,  (e) any type of communications
          services similar to that provided in (a) through (d) above and (f) the
          employment of any hardware or software utilized in any of the business
          described in (a) through (e) above whether by sale, lease,  license or
          service in either government or commercial enterprises worldwide;

                    "Credit Parties" means,  collectively,  the Borrower and the
          Guarantors.

                    "Default"  means  any  event or  condition  which,  with the
          giving or receipt of notice or lapse of time or both, would constitute
          an Event of Default hereunder.

                    "Default  Rate"  means (i) with  respect to each  Eurodollar
          Rate Loan, until the end of the Interest Period applicable thereto, at
          a rate of interest per annum which shall be two percent (2%) above the
          Eurodollar  Rate  applicable to such Loan, and thereafter at a rate of
          interest  per annum  which  shall be two  percent  (2%) above the Base
          Rate,  (ii)  with  respect  to Base  Rate  Loans,  Swing  Line  Loans,
          Reimbursement Obligations,  fees, and other amounts payable in respect
          of (x)  Obligations  or (y) (except as  otherwise  expressly  provided
          therein) the  obligations  of any Credit Party other than the Borrower
          under any of the other Loan  Documents,  a rate of interest  per annum
          which shall be two  percent  (2%) above the Base Rate and (iii) in any
          case, the maximum rate permitted by applicable law, if lower.

               "Determination Date" means the last day of each fiscal quarter of
          the Borrower.

                    "Dollars"  and the  symbol  "$" means  dollars  constituting
          legal tender for the payment of public and private debts in the United
          States of America.

                    "Domestic  Subsidiary"  means any Subsidiary of the Borrower
          organized under the laws of the United States of America, any state or
          territory thereof or the District of Columbia.

                    "Eligible Assignee" means (i) a Lender, (ii) an affiliate of
          a Lender, (iii) an Approved Fund and (iv) any other Person (other than
          a natural Person)having an office within the United States approved by
          the  Agent  and  unless  (x) such  Person  is  taking  delivery  of an
          assignment  in  connection  with  physical   settlement  of  a  credit
          derivatives transaction or (y) an Event of Default has occurred and is
          continuing at the time any  assignment is effected in accordance  with
          Section 12.1, the Borrower,  each such approval not to be unreasonably
          withheld  (provided  that the incurrence by the Borrower of additional
          costs  pursuant  to Section 5.6 as a result of such  assignment  shall
          constitute  a  reasonable  basis  for  withholding  such  consent)  or
          delayed; provided, however, that neither the Borrower nor an Affiliate
          of the Borrower shall qualify as an Eligible Assignee.  In addition to
          the foregoing,  an assignment (other than an assignment of 100% of its
          interest)  by Bank of America  shall not  include  any  portion of the
          Swing Line or obligation to issue Letters of Credit.

                    "Eligible  Securities" means all investment grade securities
          as  determined  by the rating  system of either S&P or Moody's,  other
          securities  not  subject to either  such  rating  system  which are of
          comparable  investment  grade  risk  profile  and any  other  class of
          securities previously approved in writing by the Required Lenders.

                    "Employee Benefit Plan" means (i) any employee benefit plan,
          including  any Pension  Plan,  within the  meaning of Section  3(3) of
          ERISA which (A) is maintained  for employees of the Borrower or any of
          its ERISA Affiliates,  or any Subsidiary or is assumed by the Borrower
          or any of its ERISA  Affiliates,  or any Subsidiary in connection with
          any  Acquisition  or (B)  has at any  time  been  maintained  for  the
          employees of the Borrower,  any current or former ERISA Affiliate,  or
          any Subsidiary,  but excluding any employee benefit plan that has been
          assumed by any other  Person in  connection  with the sale of an ERISA
          Affiliate or  Subsidiary  and under which  neither the Borrower or any
          ERISA Affiliate has any continuing  liability under ERISA and (ii) any
          plan, arrangement,  understanding or scheme maintained by the Borrower
          or any Subsidiary  that provides  retirement,  deferred  compensation,
          employee or retiree medical or life insurance,  severance  benefits or
          any other benefit  covering any employee or former  employee and which
          is  administered  under any Foreign  Benefit Law or  regulated  by any
          Governmental Authority other than the United States of America.

                    "Environmental  Laws"  means  any  federal,  state  or local
          statute, law, ordinance, code, rule, regulation, order, decree, permit
          or license regulating, relating to, or imposing liability or standards
          of  conduct  concerning,  any  environmental  matters  or  conditions,
          environmental   protection   or   conservation,    including   without
          limitation, the Comprehensive Environmental Response, Compensation and
          Liability  Act of 1980,  as  amended;  the  Superfund  Amendments  and
          Reauthorization Act of 1986, as amended; the Resource Conservation and
          Recovery  Act,  as  amended;  the Toxic  Substances  Control  Act,  as
          amended;  the Clean Air Act,  as  amended;  the Clean  Water  Act,  as
          amended; together with all regulations promulgated thereunder, and any
          other "Superfund" or "Superlien" law.

                    "ERISA" means the Employee Retirement Income Security Act of
          1974, as amended from time to time, and any successor  statute and all
          rules and regulations promulgated thereunder.

                    "ERISA  Affiliate",  as applied to the  Borrower,  means any
          Person  or trade or  business  which is a member  of a group  which is
          under  common  control  with  the  Borrower,  who  together  with  the
          Borrower,  is  treated  as a single  employer  within  the  meaning of
          Section 414(b) and (c) of the Code.

                    "Eurodollar  Rate  Loan"  means a Loan for which the rate of
          interest is determined by reference to the Eurodollar Rate.

                    "Eurodollar   Rate"  means  the  interest   rate  per  annum
          calculated according to the following formula:

               Eurodollar = Interbank  Offered Rate + Applicable Rate 1- Reserve
                            -----------------------
               Requirement Margin

                    "Event of Default" means any of the occurrences set forth as
          such in Section 10.1.

                    "Exchange Act" means the Securities Exchange Act of 1934, as
          amended, and the regulations promulgated thereunder.

                    "Existing   Senior  Credit   Facility"  means  that  certain
          $400,000,000  revolving  credit,  letter  of  credit,  swing  line and
          competitive  bid facilities  made available to the Borrower under that
          certain  Amended and Restated  Credit  Agreement  dated as of June 18,
          1997 by and  among  Bank of  America  (as  successor  to  NationsBank,
          National  Association),  as Administrative Agent, the other Co-Agents,
          each of the Lenders parties thereto,  and the Borrower,  and the other
          loan documents executed in connection therewith.

                    "Facility Fee" means that percent per annum,  based upon the
          Consolidated  Total  Debt  Ratio  for  the  Four-Quarter  Period  most
          recently ended,  set forth as the Facility Fee in the Pricing Grid and
          subject to further adjustment as therein provided.

                    "Facility  Guaranty"  means (i) the Parent Guaranty and (ii)
          each Guaranty  Agreement  between one or more Guarantors and the Agent
          (whether  now  existing or  hereafter  delivered  in  accordance  with
          Section  8.19  hereof) for the  benefit of the Agent and the  Lenders,
          substantially   in  the  form  of  Exhibit  I   attached   hereto  and
          incorporated herein by reference, delivered as of the Closing Date and
          otherwise  pursuant  to  Section  8.19,  as the same  may be  amended,
          modified or supplemented from time to time.

                    "Facility  Termination  Date"  means such date as all of the
          following shall have occurred: (a) the Borrower shall have permanently
          terminated the Revolving Credit Facility and the Swing Line by payment
          in  full  of all  Revolving  Credit  Outstandings,  Letter  of  Credit
          Outstandings  and Swing Line  Outstandings,  together with all accrued
          and unpaid interest,  fees and other Obligations with respect thereto,
          other than (i) the  undrawn  portion of Letters of Credit and (ii) all
          letter of credit fees relating thereto accruing after such date (which
          shall be payable  solely for the account of the Issuing Bank) computed
          (based on the interest rates and the Applicable Margin then in effect)
          on such undrawn amounts to the respective  expiry dates of the Letters
          of Credit,  in each case as have been fully cash  collateralized  in a
          manner satisfactory to the Issuing Bank; (b) all Swap Agreements shall
          have  been  terminated,  expired  or  cash  collateralized,   (c)  all
          Revolving Credit  Commitments and Letter of Credit  Commitments  shall
          have  terminated  or expired  and (d) the  Borrower  shall have fully,
          finally and  irrevocably  paid and  satisfied in full all  Obligations
          (other than Obligations consisting of continuing indemnities and other
          contingent  Obligations  of the Borrower or any Guarantor  that may be
          owing to the Lenders  pursuant  to the Loan  Documents  and  expressly
          survive termination of this Agreement);

                    "FASB 133" means Statement of Financial Accounting Standards
          No. 133.

                    "Federal Funds Rate" means,  for any day, the rate per annum
          (rounded upwards,  if necessary,  to the nearest 1/100 of 1%) equal to
          the  weighted  average  of  the  rates  on  overnight   Federal  funds
          transactions  with members of the Federal  Reserve System  arranged by
          Federal funds brokers on such day, as published by the Federal Reserve
          Bank  of New  York on the  Business  Day  next  succeeding  such  day;
          provided that (a) if such day is not a Business Day, the Federal Funds
          Rate for such day shall be such rate on such  transactions on the next
          preceding Business Day as so published on the next succeeding Business
          Day, and (b) if no such rate is so  published on such next  succeeding
          Business Day, the Federal Funds Rate for such day shall be the average
          rate  charged to Bank of America on such day on such  transactions  as
          reasonably determined by the Agent.

                    "Fee Letter" means that certain fee letter dated as of April
          11, 2001 between the Borrower and the Agent.

                    "Fiscal  Quarter" means the quarterly period of the Borrower
          ending on the last Saturday in each May, August, November and February
          of any Fiscal Year;

                    "Fiscal Year" means the annual period of the Borrower ending
          on the last Saturday of each February.

                    "Foreign  Benefit Law" means any  applicable  statute,  law,
          ordinance,  code,  rule,  regulation,  order or decree of any  foreign
          nation  or any  province,  state,  territory,  protectorate  or  other
          political  subdivision  thereof  regulating,  relating to, or imposing
          liability  or standards of conduct  concerning,  any Employee  Benefit
          Plan.

                    "Four-Quarter   Period"   means  a  period   of  four   full
          consecutive  fiscal  quarters of the  Borrower  and its  Subsidiaries,
          taken together as one accounting period.

                    "GAAP" means generally accepted accounting principles, being
          those  principles of  accounting  set forth in  pronouncements  of the
          Financial  Accounting  Standards  Board,  the  American  Institute  of
          Certified  Public   Accountants,   or  which  have  other  substantial
          authoritative  support and are applicable in the  circumstances  as of
          the date of a report.

                    "Government  Securities"  means  direct  obligations  of, or
          obligations  the timely payment of principal and interest on which are
          fully and unconditionally guaranteed by, the United States of America.

                    "Governmental  Authority"  shall  mean any  Federal,  state,
          municipal,  national  or other  governmental  department,  commission,
          board,   bureau,   court,   agency  or  instrumentality  or  political
          subdivision  thereof or any entity or  officer  exercising  executive,
          legislative,  judicial,  regulatory or administrative  functions of or
          pertaining  to any  government  or any  court,  in each  case  whether
          associated with a state of the United States,  the United States, or a
          foreign entity or government.

                    "Guarantors" means, collectively,  (i) the Parent, (ii) each
          Material  Domestic  Subsidiary  existing on the Closing Date and (iii)
          any other Person who shall become a Material Domestic Subsidiary after
          the Closing Date and shall execute and deliver to the Agent a Facility
          Guaranty as provided in Section 8.19 hereof.

                    "Hazardous  Material"  means  and  includes  any  pollutant,
          contaminant,  or  hazardous,  toxic or dangerous  waste,  substance or
          material    (including   without   limitation    petroleum   products,
          asbestos-containing  materials and lead),  the  generation,  handling,
          storage,  transportation,  disposal,  treatment, release, discharge or
          emission of which is subject to any Environmental Law.

                    "Indebtedness" of a Person means, without  duplication,  (i)
          all  Indebtedness  for Money  Borrowed,  (ii) all  obligations of such
          Person  arising under  acceptance  facilities,  (iii) the undrawn face
          amount of, and unpaid  reimbursement  obligations  in respect  of, all
          letters of credit  issued for the  account  of such  Person,  (iv) all
          obligations  of such Person upon which  interest  charges are actually
          paid,  (v) all  obligations of such Person under  conditional  sale or
          other title  retention  agreements  relating to property  purchased by
          such  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), (vi) all executory obligations
          of such Person in respect of Rate Hedging  Obligations,  and (vii) all
          Contingent Obligations in respect of Indebtedness set forth in clauses
          (i)  through  (vi) above of Persons  other  than the  Borrower  or any
          Subsidiary.  "Indebtedness" shall not include,  however, any Synthetic
          Lease Obligations or any intercompany indebtedness of the Borrower and
          its Subsidiaries.

                    "Indebtedness  for Money Borrowed" means with respect to any
          Person, without duplication,  (i) all indebtedness in respect of money
          borrowed  evidenced by a promissory note,  bond,  debenture or similar
          written  obligation for the payment of money, and (ii) all obligations
          under Capital Leases,  and the deferred purchase price of any property
          or  services,  including  in each case all such items  incurred by any
          partnership  or joint  venture as to which such  Person is liable as a
          general  partner or joint  venturer,  and excluding in each case trade
          payables  and  accrued  expenses  incurred in the  ordinary  course of
          business.   "Indebtedness  for  Money  Borrowed"  shall  not  include,
          however, any Synthetic Lease Obligations.

                    "Indemnified  Liabilities" has the meaning therefor provided
          in Section 12.9.

                    "Interbank   Offered  Rate"  means,   with  respect  to  any
          Eurodollar Rate Loan for the Interest Period applicable thereto:

                              (a)  the  rate  per   annum   equal  to  the  rate
                    determined  by the Agent to be the offered rate that appears
                    on the page of the Telerate  screen that displays an average
                    British  Bankers  Association  Interest  Settlement Rate for
                    deposits in Dollars  (for  delivery on the first day of such
                    Interest  Period) with a term  equivalent  to such  Interest
                    Period,  determined as of  approximately  11:00 a.m. (London
                    time)  two  Business  Days  prior to the  first  day of such
                    Interest Period, or

                              (b)  in  the  event  the  rate  referenced  in the
                    preceding  subsection  (a) does not  appear  on such page or
                    service or such page or service shall cease to be available,
                    the rate per annum equal to the rate determined by the Agent
                    to be the offered  rate on such other page or other  service
                    that  displays  an  average  British   Bankers   Association
                    Interest  Settlement  Rate  for  deposits  in  Dollars  (for
                    delivery on the first day of such  Interest  Period)  with a
                    term  equivalent to such Interest  Period,  determined as of
                    approximately  11:00 a.m.  (London  time) two Business  Days
                    prior to the first day of such Interest Period, or

                              (c) in  the  event  the  rates  referenced  in the
                    preceding  subsections  (a) and (b) are not  available,  the
                    rate  per  annum  determined  by the  Agent  as the  rate of
                    interest (rounded upward to the next 1/100th of 1%) at which
                    deposits  in Dollars  for  delivery on the first day of such
                    Interest Period in same day funds in the approximate  amount
                    of  the  Eurodollar  Rate  Loan  being  made,  continued  or
                    converted by Bank of America and with a term  equivalent  to
                    such  Interest  Rate would be  offered by Bank of  America's
                    London  Branch to major banks in the offshore  Dollar market
                    at their request at  approximately  11:00 a.m. (London time)
                    two  Business  Days prior to the first day of such  Interest
                    Period.

                    "Interest  Period" means,  for each  Eurodollar Rate Loan, a
          period  commencing  on the date such  Eurodollar  Rate Loan is made or
          Converted or Continued and ending,  at the Borrower's  option,  on the
          date one, two, three,  six or twelve months  thereafter as notified to
          the Agent by the  Authorized  Representative  in  accordance  with the
          terms hereof; provided that,

                              (i) if an Interest  Period for a  Eurodollar  Rate
                    Loan  would end on a day which is not a Business  Day,  such
                    Interest  Period shall be extended to the next  Business Day
                    (unless such extension  would cause the applicable  Interest
                    Period to end in the  succeeding  calendar  month,  in which
                    case such  Interest  Period shall end on the next  preceding
                    Business Day); and

                              (ii) any Interest  Period which 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 a calendar month.

                    "Interest  Rate  Selection  Notice" means the written notice
          delivered  by an  Authorized  Representative  in  connection  with the
          election of an  Interest  Period for any  Eurodollar  Rate Loan or the
          Conversion  of any  Eurodollar  Rate Loan into a Base Rate Loan or the
          Conversion  of any Base Rate Loan into a Eurodollar  Rate Loan, in the
          form of Exhibit E.

                    "Investment   Commitment"   means,   with   respect  to  any
          investment,  loan or advance, the amount initially advanced,  invested
          or disbursed less an amount equal to the sum of (i) repayments of such
          advances,  including all interest income therefrom, (ii) dividends and
          other  distributions  received  from  such  Person  paid  or  made  on
          securities  issued solely in consideration  of such investment,  (iii)
          net gains on sales or other dispositions of capital stock,  securities
          or assets of such Person purchased with such investment,  and (iv) all
          other net profits or other amounts net of expenses  realized from such
          investment   or  advance   and  all  other  net   returns  on  Capital
          Expenditures,   provided  that  the  aggregate   amount  of  all  such
          repayments,  dividends,  net  gains,  profits  and  other  amounts  so
          deducted  with  respect  to each such  investment,  advance or Capital
          Expenditure  shall not exceed  the  initial  principal  amount of such
          investment, advance or Capital Expenditure;

                    "Issuing Bank" means Bank of America as issuer of Letters of
          Credit under Article III.

                    "Lease Rentals" means, for any period, the sum of the rental
          and other  obligations  required  to be paid by the  lessee  under any
          lease,  excluding  any  amounts  required  to be  paid  by the  lessee
          (whether or not designated as rental or additional  rental) on account
          of maintenance and repairs, insurance, taxes and similar charges.

                    "Letter of Credit" means a Standby or  Commercial  Letter of
          Credit  issued by the Issuing Bank  pursuant to Article III hereof for
          the account of the Borrower in favor of a Person.

                    "Letter of Credit  Commitment"  means,  with respect to each
          Lender,  the  obligation of such Lender to acquire  Participations  in
          respect of Letters of Credit and  Reimbursement  Obligations  up to an
          aggregate  amount at any one time  outstanding  equal to such Lender's
          Applicable  Commitment  Percentage  of  the  Total  Letter  of  Credit
          Commitment as the same may be increased or decreased from time to time
          pursuant to this Agreement.

                    "Letter of Credit Facility" means the facility  described in
          Article III hereof  providing for the issuance by the Issuing Bank for
          the  account of the  Borrower  of  Letters  of Credit in an  aggregate
          stated amount at any time  outstanding  not exceeding the Total Letter
          of Credit Commitment minus outstanding Reimbursement Obligations.

                  "Letter  of  Credit  Outstandings"  means,  as of any  date of
         determination,  the  aggregate  amount  available to be drawn under all
         Letters of Credit plus Reimbursement Obligations then outstanding.

                  "Lien" means any interest in property  securing any obligation
         owed to, or a claim by, a Person other than the owner of the  property,
         whether such interest is based on the common law,  statute or contract,
         and including but not limited to the lien or security  interest arising
         from a mortgage, encumbrance,  pledge, security agreement,  conditional
         sale or trust receipt or a lease,  consignment or bailment for security
         purposes.  For the  purposes of this  Agreement,  the  Borrower and any
         Subsidiary shall be deemed to be the owner of any property which it has
         acquired or holds subject to a conditional  sale  agreement,  financing
         lease, or other arrangement pursuant to which title to the property has
         been retained by or vested in some other Person for security purposes.

                  "Loan" or Loans" means any of the Revolving Loans or the Swing
         Line Loans.

                  "Loan Documents" means this Agreement, the Notes, the Facility
         Guaranties,  the Applications and Agreements for Letter of Credit,  and
         all other instruments and documents heretofore or hereafter executed or
         delivered to or in favor of any Lender  (including the Issuing Bank) or
         the  Agent  in  connection   with  the  Loans  made  and   transactions
         contemplated  under  this  Agreement,  as  the  same  may  be  amended,
         supplemented or replaced from the time to time.

                  "Material  Adverse Effect" means a material  adverse effect on
         (i) the business,  properties,  operations  or condition,  financial or
         otherwise, of the Parent or the Borrower and its Subsidiaries, taken as
         a whole,  (ii) the  ability of the Parent,  the  Borrower or the Credit
         Parties  taken  as  a  whole  to  pay  or  perform   their   respective
         obligations,  liabilities and indebtedness  under the Loan Documents as
         such payment or  performance  becomes due in accordance  with the terms
         thereof,  or (iii) the validity,  legality or  enforceability of any of
         the Loan Documents.

                  "Material Domestic  Subsidiary" means each Material Subsidiary
         which is a Domestic Subsidiary.

                  "Material Subsidiary" means the Passive Investment Company and
         any  direct  or  indirect   Subsidiary  of  the  Borrower  (other  than
         Transactive Corporation) which (i) has total assets equal to or greater
         than 5% of Consolidated Assets (calculated as of the most recent fiscal
         period with  respect to which the Agent shall have  received  financial
         statements  required to be delivered pursuant to Sections 8.1(a) or (b)
         (or if prior to delivery of any financial  statements  pursuant to such
         Sections, then calculated with respect to the Fiscal Year end financial
         statements   referenced  in  Section  7.6)  (the  "Required   Financial
         Information"))  or (ii)  has  profits  equal to or  greater  than 5% of
         Consolidated  Total Profits Before Tax  (calculated for the most recent
         period  for  which  the  Agent  has  received  the  Required  Financial
         Information);  provided,  however,  that any Material  Subsidiary under
         clauses (i) or (ii) above shall cease to be a Material  Subsidiary  and
         shall be released  immediately from its Facility Guaranty or obligation
         to  provide  a  Facility  Guaranty,  as  the  case  may  be,  if  it or
         substantially  all of its assets are sold or conveyed in a  transaction
         otherwise permitted under this Agreement.

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

                  "Multiemployer  Plan" means a "multiemployer  plan" as defined
         in  Section  4001(a)(3)  of ERISA to which  the  Borrower  or any ERISA
         Affiliate   is  making,   or  is  accruing  an   obligation   to  make,
         contributions  or has made,  or been  obligated to make,  contributions
         within the preceding six (6) Fiscal Years.

                  "Note   Agreement"   means  that  certain  Note  and  Guaranty
         Agreement  dated as of May 15,  1997 by and  among  the  Borrower,  the
         Parent and the note purchasers thereunder,  as in effect on the Closing
         Date,  pursuant to which the Borrower has issued the Private  Placement
         Debt;

                  "Notes"  means,  collectively,  the  Swing  Line  Note and the
         Revolving Notes.

                  "Obligations"   means   the   obligations,   liabilities   and
         Indebtedness  of the  Borrower  with respect to (i) the  principal  and
         interest on the Loans as evidenced by the Notes, (ii) the Reimbursement
         Obligations  and  otherwise in respect of the Letters of Credit,  (iii)
         all  liabilities of the Borrower to any Lender (or any affiliate of any
         Lender)  which arise under a Swap  Agreement,  and (iv) the payment and
         performance of all other  obligations,  liabilities and Indebtedness of
         the Borrower to the Lenders  (including the Issuing Bank), the Agent or
         BAS  hereunder,  under any one or more of the other Loan  Documents  or
         with respect to the Loans.

                  "Operating  Documents"  means with respect to any corporation,
         limited liability company,  partnership,  limited partnership,  limited
         liability  partnership  or other  legally  authorized  incorporated  or
         unincorporated  entity, the bylaws,  operating  agreement,  partnership
         agreement,  limited  partnership  agreement or other similar applicable
         documents  relating in a material way to the  operation,  governance or
         management of such entity.

                  "Organizational Action" means with respect to any corporation,
         limited liability company,  partnership,  limited partnership,  limited
         liability  partnership  or other  legally  authorized  incorporated  or
         unincorporated  entity,  any corporate,  organizational  or partnership
         action (including any required board of directors,  shareholder, member
         or partner action),  or other similar  official action,  as applicable,
         taken by such entity.

                  "Organizational   Documents"   means   with   respect  to  any
         corporation,    limited   liability   company,   partnership,   limited
         partnership,  limited liability partnership or other legally authorized
         incorporated or unincorporated  entity,  the articles of incorporation,
         certificate of incorporation, articles of organization,  certificate of
         limited  partnership  or other  applicable  organizational  or  charter
         documents relating to the creation of such entity.

                  "Outstandings" means, collectively, at any date, the Letter of
         Credit  Outstandings,  Swing Line  Outstandings  and  Revolving  Credit
         Outstandings on such date.

                  "Parent"   means  GTECH  Holdings   Corporation,   a  Delaware
         corporation, and owner of all of the common stock of the Borrower.

                  "Parent Guaranty" means that certain Guaranty Agreement of the
         Parent  dated as of the date  hereof  in  favor  of the  Agent  for the
         benefit of the Agent and the  Lenders and  guaranteeing  payment of the
         Obligations,  as the same may be amended, modified or supplemented from
         time to time;

                  "Participation"  means,  (i) with respect to any Lender (other
         than the Issuing Bank) and a Letter of Credit,  the extension of credit
         represented  by the  participation  of  such  Lender  hereunder  in the
         liability of the Issuing  Bank in respect of a Letter of Credit  issued
         by the Issuing Bank in  accordance  with the terms hereof and (ii) with
         respect to any Lender  (other  than Bank of  America)  and a Swing Line
         Loan, the extension of credit  represented by the participation of such
         Lender  hereunder  in the  liability of Bank of America in respect of a
         Swing Line Loan made by Bank of America  in  accordance  with the terms
         hereof.

                  "Passive  Investment  Company"  means a  single  wholly  owned
         Subsidiary  of the  Borrower  whose  function  and  activity  shall  be
         restricted solely to one or more of the following:  (a) the purchase of
         all or a  portion  of  the  Borrower's  accounts  receivable,  (b)  the
         purchase  of  all or a  portion  of the  intellectual  property  of the
         Borrower upon the condition that such intellectual property be licensed
         back to the Borrower and (c) the lending of money to and  management of
         investments of the Borrower and its Subsidiaries;

                  "PBGC" means the Pension Benefit Guaranty  Corporation and any
         successor thereto.

                  "Pension Plan" means any employee  pension benefit plan within
         the meaning of Section 3(2) of ERISA, other than a Multiemployer  Plan,
         which is subject to the  provisions of Title IV of ERISA or Section 412
         of the Code and which (i) is  maintained  for employees of the Borrower
         or any of its ERISA  Affiliates or is assumed by the Borrower or any of
         its ERISA  Affiliates in connection with any Acquisition or (ii) has at
         any time been  maintained  for the  employees  of the  Borrower  or any
         current or former ERISA Affiliate.

                  "Person"  means  an  individual,   partnership,   corporation,
         limited  liability  company,  limited  liability  partnership,   trust,
         unincorporated organization, association, joint venture or a government
         or agency or political subdivision thereof.


<PAGE>



                  "Pricing Grid" means:

                                                          Applicable Margin for
                                       Applicable Margin  Eurodollar Rate Loans
                Consolidated Total           for          and Letter of Credit
        Tier       Debt Ratio            Facility Fee            Fees
        ----    ------------------     -----------------  ----------------------

         I         Less than or equal       .150%                .750%
                   to .50 to 1.00

         II        Less than or equal       .175%                .825%
                   to 1.00 to 1.00 but
                   greater than .50 to
                   1.00

         III       Less than or equal       .225%                .925%
                   to 1.50 to 1.00 but
                   greater than 1.00 to
                   1.00

         IV        Less than or equal       .275%                1.025%
                   to 2.00 to 1.00 but
                   greater than 1.50 to
                   1.00

         V         Greater than 2.00 to     .375%                1.125%
                   1.00

                  The   Applicable   Margin  and  the   Facility  Fee  shall  be
         established based upon the Consolidated  Total Debt Ratio at the end of
         each fiscal quarter of the Borrower (each, a "Determination Date"). Any
         change in the  Applicable  Margin or the  Facility Fee  following  each
         Determination  Date shall be determined based upon the computations set
         forth in the  certificate  furnished  to the Agent  pursuant to Section
         8.1(a)(ii)  and Section  8.1(b)(ii),  subject to review and approval of
         such  computations by the Agent,  and shall be effective  commencing on
         the fifth Business Day following the date such  certificate is received
         until  the  fifth  Business  Day  following  the  date  on  which a new
         certificate  is  delivered  or is required to be  delivered,  whichever
         shall first  occur.  From the Closing  Date to the fifth  Business  Day
         following  the  date  the  certificate  referred  to in  the  preceding
         sentence for the fiscal period ended as at the first Determination Date
         is  delivered  or is required to be  delivered  (whichever  shall first
         occur),  the Applicable  Margin and the Facility Fee shall be Tier III.
         Notwithstanding the provisions of the two preceding  sentences,  if the
         Borrower  shall fail to deliver  any such  certificate  within the time
         period  required by Section 8.1, then the Agent shall give the Borrower
         notice of such  non-delivery and the Applicable Margin and Facility Fee
         shall be Tier V from the date such  certificate was due until the fifth
         Business  Day  following  the date the  appropriate  certificate  is so
         delivered.

                  "Prime  Rate" means the per annum rate of interest as publicly
         announced  from time to time by Bank of America  as its  "prime  rate".
         Such rate is a rate set by Bank of America  based upon various  factors
         including Bank of America'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 such rate  announced by Bank of America
         shall take effect at the opening of  business on the day  specified  in
         the public announcement of such change.

                  "Principal  Office"  means  the  principal  office  of Bank of
         America,  presently located at 101 North Tryon Street,  15th Floor, NC1
         001-15-04, Charlotte, North Carolina 28255, Attention: Agency Services,
         or such  other  office  and  address as the Agent may from time to time
         designate.

                  "Priority Debt" means the sum (without duplication) of (i) the
         aggregate  unpaid  principal  amount of Indebtedness of the Borrower or
         any Material Subsidiary secured by Liens (other than Liens permitted by
         Section 9.2(a), (b), (c), (d), (e), (g), (h), (i) and (j) hereof), plus
         (ii) all outstanding  Attributable Debt of the Borrower or any Material
         Subsidiary  (other than  Attributable Debt with respect to any Sale and
         Leaseback  Transaction permitted by Section 9.12(a) or (b) hereof) plus
         (iii) the aggregate  unpaid principal amount of all Indebtedness of all
         Material  Subsidiaries  (other  than  Indebtedness  of the  Borrower or
         Indebtedness of any Subsidiary  permitted hereunder and permitted under
         Section 10.8(a) through (d) of the Note Agreement);

                  "Private  Placement  Debt"  means  Indebtedness  of  up  to an
         aggregate  principal amount of $300,000,000  evidenced by certain 7.75%
         Series A Senior  Guaranteed  Notes due 2004 and  7.87%  Series B Senior
         Guaranteed  Notes due 2007 issued by the Borrower  pursuant to the Note
         Agreement;

                  "Rate Hedging Obligations" means, without duplication, any and
         all obligations of the Borrower or any Subsidiary,  whether absolute or
         contingent and howsoever and whensoever created, arising,  evidenced or
         acquired (including all renewals,  extensions and modifications thereof
         and substitutions therefor), under (i) any and all agreements,  devices
         or arrangements designed to protect at least one of the parties thereto
         from the  fluctuations  of interest  rates,  exchange  rates or forward
         rates  applicable  to such  party's  assets,  liabilities  or  exchange
         transactions,  including,  but not  limited to,  Dollar-denominated  or
         cross-currency  interest rate  exchange  agreements,  forward  currency
         exchange agreements, interest rate cap or collar protection agreements,
         forward rate  currency or interest  rate  options,  puts,  warrants and
         those commonly known as interest rate "swap" agreements; (ii) all other
         "derivative  instruments"  as defined in FASB 133 and which are subject
         to the  reporting  requirements  of FASB  133;  and  (iii)  any and all
         cancellations,  buybacks, reversals, terminations or assignments of any
         of the foregoing. For purposes of any computation hereunder,  each Rate
         Hedging Obligation shall be valued at the Rate Hedge Value thereof.

                  "Rate  Hedge  Value"  means,  with  respect to each  contract,
         instrument or other arrangement creating a Rate Hedging Obligation, the
         net obligations of the Borrower or any Subsidiary  thereunder  equal to
         the  termination  value thereof as  determined  in accordance  with its
         provisions (if such Rate Hedging Obligation has been terminated) or the
         mark to market value  thereof as  determined  on the basis of available
         quotations  from any  recognized  dealer in, or from Bloomberg or other
         similar service  providing  market  quotations for, the applicable Rate
         Hedging  Obligation  (if  such  Rate  Hedging  Obligation  has not been
         terminated).

                  "Regulation D" means Regulation D of the Board as the same may
         be amended or supplemented from time to time.

                  "Regulatory  Change"  means any change in, or the  adoption or
         making of new,  United  States  Federal  or state  laws or  regulations
         (including  Regulation D and capital  adequacy  regulations) or foreign
         laws or  regulations or the adoption or making after the date hereof of
         any  interpretations,  directives  or  requests  applying to a class of
         banks,  which  includes  any of the  Lenders,  under any United  States
         Federal or state or foreign laws or regulations  (whether or not having
         the force of law) by any court or  governmental  or monetary  authority
         charged with the interpretation or administration thereof or compliance
         by any Lender with any request or directive,  whether or not having the
         force of law,  whether  or not  failure  to comply  therewith  would be
         unlawful.

                  "Reimbursement   Obligation"  shall  mean  at  any  time,  the
         obligation  of the  Borrower  with  respect  to any Letter of Credit to
         reimburse  the  Issuing  Bank and the  Lenders  to the  extent of their
         respective Participations (including by the receipt by the Issuing Bank
         of  proceeds  of Loans  pursuant  to Section  2.1(c)(iii))  for amounts
         theretofore  paid by the Issuing Bank  pursuant to a drawing under such
         Letter of Credit.

                  "Related  LC  Documents"  shall have the  meaning set forth in
         Section 3.2(i)(i).

                  "Replacement Bank" means (i) any Lender or Lenders selected by
         the  Borrower  or (ii)  one or a group  of  banks  or  other  financial
         institutions selected by the Borrower and acceptable to and approved by
         the Agent and the Required Lenders in their reasonable discretion,  any
         of which shall replace any then existing Lender or Lenders  pursuant to
         Section 4.9 or 5.7 hereof and have a Revolving Credit  Commitment equal
         in amount to the Revolving Credit  Commitment of the replaced Lender or
         Lenders.

                  "Required Lenders" means, as of any date, Lenders on such date
         having Credit Exposures (as defined below) aggregating more than 50% of
         the  aggregate  Credit  Exposures of all the Lenders on such date.  For
         purposes of the preceding sentence, the amount of the "Credit Exposure"
         of each Lender shall be equal at all times (a) other than following the
         occurrence and during the  continuance  of an Event of Default,  to its
         Revolving  Credit  Commitment,  and (b)  following the  occurrence  and
         during the  continuance  of an Event of Default,  to the sum of (i) the
         aggregate  principal  amount  of such  Lender's  Applicable  Commitment
         Percentage  of Revolving  Credit  Outstandings  plus (ii) the amount of
         such  Lender's  Applicable  Commitment  Percentage  of Letter of Credit
         Outstandings  and  Swing  Line  Outstandings;  provided  that,  for the
         purpose of this definition only, (A) if any Lender shall have failed to
         fund its  Applicable  Commitment  Percentage  of any Advance,  then the
         Revolving  Credit  Commitment of such Lender shall be deemed reduced by
         the  amount  it so  failed  to fund for so long as such  failure  shall
         continue and such Lender's Credit Exposure attributable to such failure
         shall be deemed  held by any  Lender  making  more than its  Applicable
         Commitment  Percentage  of such  Advance to the  extent it covers  such
         failure, (B) if any Lender shall have failed to pay to the Issuing Bank
         upon demand its Applicable  Commitment  Percentage of any drawing under
         any  Letter  of  Credit  resulting  in  an  outstanding   Reimbursement
         Obligation (whether by funding its Participation therein or otherwise),
         such  Lender's  Credit  Exposure  attributable  to all Letter of Credit
         Outstandings  shall be deemed to be held by the Issuing Bank until such
         Lender shall pay such  deficiency  amount to the Issuing Bank  together
         with interest  thereon as provided in Section 4.9 and (C) if any Lender
         shall have  failed to pay to Bank of  America on demand its  Applicable
         Commitment  Percentage  of any Swing Line Loan  (whether by funding its
         Participation  therein or  otherwise),  such Lender's  Credit  Exposure
         attributable to all Swing Line Outstandings  shall be deemed to be held
         by Bank of America until such Lender shall pay such  deficiency  amount
         to Bank of  America  together  with  interest  thereon as  provided  in
         Section 4.9.

                  "Reserve  Requirement"  means, for any day during any Interest
         Period, the 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 Board 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"). The Eurodollar Rate for each outstanding Eurodollar Rate
         Loan shall be adjusted  automatically  as of the effective  date of any
         change in the Reserve Requirement.

                  "Revolving  Credit  Commitment"  means,  with  respect to each
         Lender,  the obligation of such Lender to make  Revolving  Loans to the
         Borrower  up  to  an  aggregate   principal  amount  at  any  one  time
         outstanding equal to such Lender's Applicable  Commitment Percentage of
         the Total Revolving Credit Commitment.

                  "Revolving  Credit  Facility" means the facility  described in
         Section 2.1 hereof  providing  for Loans to the Borrower by the Lenders
         in the  aggregate  principal  amount  of  the  Total  Revolving  Credit
         Commitment.

                  "Revolving  Credit  Outstandings"  means,  as of any  date  of
         determination,  the aggregate  principal  amount of all Revolving Loans
         then outstanding.

                  "Revolving  Credit  Termination  Date"  means  (i) the  Stated
         Termination  Date or (ii) such earlier date of  termination of Lenders'
         obligations pursuant to Section 10.1 upon the occurrence of an Event of
         Default,  or  (iii)  such  date as the  Borrower  may  voluntarily  and
         permanently  terminate the Revolving Credit Facility by payment in full
         of all  Revolving  Credit  Outstandings,  Swing Line  Outstandings  and
         Letter  of Credit  Outstandings  and  cancellation  of all  Letters  of
         Credit,  together with all accrued and unpaid interest,  fees and other
         amounts thereon.

                  "Revolving  Loan" means any  borrowing  pursuant to an Advance
         under the Revolving Credit Facility in accordance with Section 2.1.

                  "Revolving Notes" means, collectively, the promissory notes of
         the Borrower  evidencing  Revolving Loans executed and delivered to the
         Lenders as provided in Section 2.3 substantially in the form of Exhibit
         F-1,  with  appropriate  insertions  as to amounts,  dates and names of
         Lenders.

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

                  "Sale and Leaseback Transaction" means a transaction or series
         of  transactions  pursuant  to  which  the  Borrower  or  any  Material
         Subsidiary  shall sell or transfer to any Person any property,  whether
         now owned or hereafter  acquired,  and, as part of the same transaction
         or series of  transactions,  the  Borrower or any  Material  Subsidiary
         shall lease as lessee,  or similarly acquire the right to possession or
         use of, such property for a period in excess of three years.

                  "Single Employer Plan" means any employee pension benefit plan
         covered by Title IV of ERISA and in respect  of which the  Borrower  or
         any  Subsidiary  is an  "employer"  as described in Section  4001(b) of
         ERISA, which is not a Multiemployer Plan.

                  "Solvent" means, when used with respect to any Person, that at
         the time of determination:

                           (i)  the  fair  value  of its  assets  (both  at fair
                  valuation  and at present  fair  saleable  value on an orderly
                  basis) is in excess  of the total  amount of its  liabilities,
                  including Contingent Obligations; and

                           (ii) it is then  able and  expects  to be able to pay
                  its debts as they mature; and

                           (iii)  it has  capital  sufficient  to  carry  on its
                  business as conducted and as proposed to be conducted.

                  "SPC"  shall have the  meaning  set forth in Section  12.16(a)
         hereof.

                  "Standby Letter of Credit" means an irrevocable Standby Letter
         of Credit  issued  hereunder  for the  account of the  Borrower  or any
         Subsidiary,  provided  that the expiry date of such  Standby  Letter of
         Credit shall not be later than the Revolving Credit Termination Date;

                  "Stated  Termination  Date" means the fifth anniversary of the
         Closing Date.

                  "Subsidiary"  means  (i) any  corporation  or other  entity in
         which more than 50% of its outstanding  Voting  Securities or more than
         50% of all equity  interests  is owned  directly or  indirectly  by the
         Borrower  and/or by one or more of the  Borrower's  Subsidiaries  at or
         after  the  Closing  Date or (ii) any  joint  venture  whose  financial
         information  and  operations  are  required to be  consolidated  in the
         financial statements of the Borrower in accordance with GAAP applied on
         a Consistent Basis.

                  "Subsidiary Debt" means, without duplication,  that portion of
         Consolidated Total Indebtedness incurred by any Subsidiary;

                  "Subsidiary  Securities"  means the shares of capital stock or
         the other equity  interests issued by or equity  participations  in any
         Subsidiary, whether or not constituting a "security" under Article 8 of
         the Uniform Commercial Code as in effect in any jurisdiction.

                  "Swap  Agreement"  means one or more  agreements  between  the
         Borrower  and any one or more  Lenders  with  respect  to  Indebtedness
         evidenced by any or all of the Notes,  on terms mutually  acceptable to
         the Borrower and such Lender(s),  which agreements  create Rate Hedging
         Obligations.

                  "Swing Line" means the revolving line of credit established by
         Bank of America in favor of the Borrower pursuant to Section 2.4.

                  "Swing Line Loans"  means loans made by Bank of America to the
         Borrower pursuant to Section 2.4.

                  "Swing Line Note" means the  promissory  note of the  Borrower
         evidencing  the Swing Line executed and delivered to Bank of America as
         provided in Section 2.3 substantially in the form of Exhibit F-2.

                  "Swing   Line   Outstandings"   means,   as  of  any  date  of
         determination,  the aggregate  principal amount of all Swing Line Loans
         then outstanding.

                  "Swing  Line  Rate"  means  the rate of  interest  established
         pursuant to the Fee Letter;

                  "Synthetic Lease Obligations"  means all monetary  obligations
         of a lessee under any tax retention or other synthetic  leases which is
         treated as an  operating  lease  under GAAP but the  liabilities  under
         which are or would be  characterized as indebtedness of such Person for
         tax  purposes  or upon the  insolvency  of such  Person.  The amount of
         Synthetic  Lease  Obligations in respect of any synthetic  lease at any
         date of determination  thereof shall be equal to the aggregate purchase
         price of any property  subject to such lease less the aggregate  amount
         of  payments  of  rent  theretofore  made  which  reduce  the  lessee's
         obligations  under such synthetic lease and which are not the financial
         equivalent of interest.

                  "Termination  Event" means: (i) a "Reportable Event" described
         in Section 4043 of ERISA and the regulations  issued thereunder (unless
         the notice  requirement has been waived by applicable  regulation);  or
         (ii) the  withdrawal  of the  Borrower  or any ERISA  Affiliate  from a
         Pension  Plan  during  a plan  year  in  which  it  was a  "substantial
         employer" as defined in Section  4001(a)(2) of ERISA or was deemed such
         under Section  4062(e) of ERISA;  or (iii) the termination of a Pension
         Plan,  the filing of a notice of intent to  terminate a Pension Plan or
         the  treatment  of a Pension  Plan  amendment  as a  termination  under
         Section  4041 of  ERISA;  or (iv) the  institution  of  proceedings  to
         terminate  a  Pension  Plan by the  PBGC;  or (v) any  other  event  or
         condition which would constitute grounds under Section 4042(a) of ERISA
         for the  termination of, or the appointment of a trustee to administer,
         any Pension  Plan;  or (vi) the partial or complete  withdrawal  of the
         Borrower or any ERISA Affiliate from a Multiemployer Plan; or (vii) the
         imposition of a Lien pursuant to Section 412 of the Code or Section 302
         of  ERISA;  or (viii)  any  event or  condition  which  results  in the
         reorganization or insolvency of a Multiemployer Plan under Section 4241
         or Section 4245 of ERISA, respectively;  or (ix) any event or condition
         which results in the termination of a Multiemployer  Plan under Section
         4041A  of  ERISA  or the  institution  by the  PBGC of  proceedings  to
         terminate a Multiemployer  Plan under Section 4042 of ERISA; or (x) any
         event or condition  with respect to any Employee  Benefit Plan which is
         regulated by any Foreign Benefit Law that results in the termination of
         such Employee  Benefit Plan or the revocation of such Employee  Benefit
         Plan's authority to operate under the applicable Foreign Benefit Law.

                  "Total  Letter of Credit  Commitment"  means an amount  not to
         exceed $100,000,000.

                  "Total Revolving Credit  Commitment"  means a principal amount
         equal to $300,000,000,  as reduced from time to time in accordance with
         Section 2.1(e).

                  "Transactive  Corporation"  means Transactive  Corporation,  a
         Delaware corporation.

                  "Type" shall mean any type of Loan (i.e.,  a Base Rate Loan or
         a Eurodollar Rate Loan).

                  "Voting  Securities" means shares of capital stock issued by a
         corporation,  or equivalent  interests in any other Person, the holders
         of which are ordinarily,  in the absence of contingencies,  entitled to
         vote for the  election  of  directors  (or persons  performing  similar
         functions)  of such  Person,  even if the  right  so to vote  has  been
         suspended by the happening of such a contingency.

         1.2. Rules of Interpretation.

                  (a) All accounting terms not specifically defined herein shall
         have the meanings  assigned to such terms and shall be  interpreted  in
         accordance with GAAP applied on a Consistent Basis.

                  (b) Each term  defined in  Articles  1, 8 or 9 of the New York
         Uniform  Commercial  Code shall have the meaning given  therein  unless
         otherwise  defined  herein,  except  to the  extent  that  the  Uniform
         Commercial Code of another  jurisdiction is controlling,  in which case
         such terms shall have the meaning given in the Uniform  Commercial Code
         of the applicable jurisdiction.

                  (c) The  headings,  subheadings  and  table of  contents  used
         herein or in any other Loan  Document  are solely  for  convenience  of
         reference  and  shall not  constitute  a part of any such  document  or
         affect the meaning, construction or effect of any provision thereof.

                  (d) Except as otherwise expressly provided,  references in any
         Loan  Document to articles,  sections,  paragraphs,  clauses,  annexes,
         appendices,   exhibits  and  schedules  are   references  to  articles,
         sections,  paragraphs,   clauses,  annexes,  appendices,  exhibits  and
         schedules in or to such Loan Document.

                  (e) All  definitions  set forth  herein  or in any other  Loan
         Document shall apply to the singular as well as the plural form of such
         defined term, and all references to the masculine  gender shall include
         reference  to the  feminine or neuter  gender,  and vice versa,  as the
         context may require.

                  (f) When used herein or in any other Loan Document, words such
         as "hereunder", "hereto", "hereof" and "herein" and other words of like
         import  shall,  unless the context  clearly  indicates to the contrary,
         refer to the whole of the applicable document and not to any particular
         article, section, subsection, paragraph or clause thereof.

                  (g) References to "including" means including without limiting
         the  generality of any  description  preceding such term, and such term
         shall  not  limit a  general  statement  to  matters  similar  to those
         specifically mentioned.

                  (h)  Except as  otherwise  expressly  provided,  all dates and
         times of day  specified  herein  shall refer to such dates and times at
         Charlotte, North Carolina.

                  (i) Whenever  interest rates or fees are  established in whole
         or in part by reference to a numerical  percentage expressed as "___%",
         such arithmetic  expression shall be interpreted in accordance with the
         convention that 1% = 100 basis points.

                  (j)  Each of the  parties  to the  Loan  Documents  and  their
         counsel have reviewed and revised, or requested (or had the opportunity
         to  request)  revisions  to,  the  Loan  Documents,  and  any  rule  of
         construction  that  ambiguities are to be resolved against the drafting
         party shall be inapplicable in the construing and interpretation of the
         Loan Documents and all exhibits, schedules and appendices thereto.

                  (k) Any  reference  to an officer of the Borrower or any other
         Person by  reference  to the title of such  officer  shall be deemed to
         refer to each other officer of such Person, however titled,  exercising
         the same or substantially similar functions.

                  (l) All  references  to any  agreement or document as amended,
         modified or supplemented,  or words of similar effect,  shall mean such
         document  or  agreement,  as the case may be, as  amended,  modified or
         supplemented  from  time to time  only as and to the  extent  permitted
         therein and in the Loan Documents.

<PAGE>

                                   ARTICLE II

                              The Credit Facilities
                              ---------------------

         2.1. Revolving Loans.

                  (a)  Commitment.  Subject to the terms and  conditions of this
         Agreement,  each  Lender  severally  agrees  to  make  Advances  to the
         Borrower under the Revolving Credit Facility from time to time from the
         Closing Date until the Revolving Credit  Termination Date on a pro rata
         basis as to the total  borrowing  requested  by the Borrower on any day
         determined by such Lender's Applicable  Commitment Percentage up to but
         not exceeding the Revolving Credit Commitment of such Lender; provided,
         however,  that the  Lenders  will not be  required  and  shall  have no
         obligation  to make any such  Advance  (i) so long as a  Default  or an
         Event of Default has  occurred and is  continuing  or (ii) if the Agent
         has  accelerated  the  maturity  of any of the  Notes as a result of an
         Event of Default;  provided  further,  however,  that immediately after
         giving effect to each such Advance,  the amount of  Outstandings  shall
         not exceed the Total Revolving  Credit  Commitment.  Within such limits
         and subject to the other terms and  conditions of this  Agreement,  the
         Borrower may borrow,  repay  (without  premium or penalty) and reborrow
         under the Revolving  Credit Facility on a Business Day from the Closing
         Date until, but (as to borrowings and reborrowings) not including,  the
         Revolving Credit Termination Date.

                  (b) Amounts. The Outstandings shall not exceed at any time the
         Total  Revolving  Credit  Commitment,  and, in the event there shall be
         outstanding any such excess,  the Borrower shall  immediately make such
         payments  and  prepayments  as shall be  necessary  to comply with this
         restriction.  Each Advance under the Revolving Credit  Facility,  other
         than Base Rate Refunding  Loans,  shall be in a principal  amount of at
         least $5,000,000, and, if greater than $5,000,000, an integral multiple
         of $100,000.

                  (c) Advances. (i) An Authorized  Representative shall give the
         Agent (1) at least  three (3)  Business  Days'  irrevocable  telephonic
         notice of each Eurodollar Rate Loan (whether representing an additional
         borrowing  or  the  Continuation  of  a  borrowing   hereunder  or  the
         Conversion  of a  borrowing  hereunder  from  a  Base  Rate  Loan  to a
         Eurodollar   Rate  Loan)  prior  to  11:30  A.M.  and  (2)  irrevocable
         telephonic  notice  of each  Base  Rate  Loan  (other  than  Base  Rate
         Refunding  Loans to the extent  the same are  effected  without  notice
         pursuant to Section 2.1(c)(iii) and whether  representing an additional
         borrowing  hereunder  or the  Conversion  of borrowing  hereunder  from
         Eurodollar  Rate Loans to Base Rate  Loans)  prior to 11:30 A.M. on the
         day of  such  proposed  Revolving  Loan.  Each  such  notice  shall  be
         effective  upon receipt by the Agent,  shall  specify the amount of the
         borrowing,  the type of Revolving Loan (Base Rate or Eurodollar  Rate),
         the date of  borrowing  and, if a  Eurodollar  Rate Loan,  the Interest
         Period  to be used  in the  computation  of  interest.  The  Authorized
         Representative  shall  provide the Agent written  confirmation  of each
         such telephonic notice on the same day by telefacsimile transmission in
         the form of a Borrowing  Notice or Interest Rate  Selection  Notice (as
         applicable)  with  appropriate  insertions  but failure to provide such
         confirmation  shall not affect the validity of such telephonic  notice.
         Notice of receipt of such  Borrowing  Notice or Interest Rate Selection
         Notice,  as the case may be,  shall be  provided  by the  Agent to each
         Lender with reasonable  promptness,  but (provided the Agent shall have
         received  such  notice by 11:30  A.M.) not later than 1:00 P.M.  on the
         same day as the Agent's receipt of such notice. The Agent shall provide
         each  Lender  written   confirmation  of  such  telephonic   notice  by
         telefacsimile transmission but failure to provide such notice shall not
         affect the validity of such telephonic  notice. The Borrower shall have
         the option to elect the duration of subsequent  Interest Periods and to
         convert  the Loans  (other than Swing Line  Loans) in  accordance  with
         Section 4.2 hereof.

                  (ii) Not later than 2:30 P.M. on the date  specified  for each
         borrowing  under this Section 2.1, each Lender  shall,  pursuant to the
         terms and subject to the conditions of this Agreement,  make the amount
         of the Advance or Advances  to be made by it on such day  available  by
         wire  transfer  to the  Agent  in the  amount  of its pro  rata  share,
         determined according to such Lender's Applicable  Commitment Percentage
         of the Revolving  Loan or Revolving  Loans to be made on such day. Such
         wire transfer  shall be directed to the Agent at the  Principal  Office
         and shall be in the form of Dollars constituting  immediately available
         funds. The amount so received by the Agent shall,  subject to the terms
         and conditions of this Agreement,  be made available to the Borrower by
         delivery and deposit of the  proceeds  thereof by 3:00 p.m. on the date
         specified for each  borrowing to Borrower's  account at Fleet  National
         Bank, ABA routing number  011000390,  account number  07718069 (or such
         other account as may be directed by two (2) Authorized  Representatives
         of the Borrower).

                  (iii)  Notwithstanding  the  foregoing,  if a drawing  is made
         under any Letter of  Credit,  such  drawing  is honored by the  Issuing
         Bank,  and the  Borrower  shall not  immediately  fully  reimburse  the
         Issuing Bank in respect of such  drawing from other funds  available to
         the Borrower,  (A) provided  that the  conditions to making a Revolving
         Loan as herein  provided  shall then be  satisfied,  the  Reimbursement
         Obligation  arising from such drawing shall be paid to the Issuing Bank
         by the Agent without the  requirement of notice to or from the Borrower
         from immediately available funds which shall be advanced as a Base Rate
         Refunding  Loan to the Agent at its  Principal  Office  by each  Lender
         under the Revolving Credit Facility in an amount equal to such Lender's
         Applicable Commitment Percentage of such Reimbursement Obligation,  and
         (B) if the  conditions  to making a Revolving  Loan as herein  provided
         shall not then be satisfied,  each of the Lenders shall fund by payment
         to the Agent (for the  benefit of the  Issuing  Bank) at its  Principal
         Office in  immediately  available  funds the purchase  from the Issuing
         Bank of their respective  Participations  in the related  Reimbursement
         Obligation based on their respective Applicable Commitment  Percentages
         of the Total  Letter of Credit  Commitment.  If a drawing is  presented
         under any Letter of Credit in accordance with the terms thereof and the
         Borrower  shall not  immediately  reimburse the Issuing Bank in respect
         thereof,  then  notice of such  drawing  or payment  shall be  provided
         promptly by the Issuing  Bank to the Agent and the Agent shall  provide
         notice to each Lender by telephone or  telefacsimile  transmission.  If
         notice to the Lenders of a drawing  under any Letter of Credit is given
         by the Agent at or before 12:00 noon on any Business  Day,  each Lender
         shall  either make a Base Rate  Refunding  Loan or fund the purchase of
         its  Participation  as specified  above in the amount of such  Lender's
         Applicable  Commitment  Percentage of such drawing or payment and shall
         pay such amount to the Agent for the account of the Issuing Bank at the
         Principal  Office in Dollars and in immediately  available funds before
         2:30 P.M.  on the same  Business  Day. If such notice to the Lenders is
         given by the Agent after 12:00 noon on any  Business  Day,  each Lender
         shall either make such Base Rate  Refunding  Loan or fund such purchase
         before 12:00 noon on the next following Business Day.

                  (d) Repayment of Revolving Loans. The principal amount of each
         Revolving  Loan,  all  accrued  and  unpaid  interest,  fees and  other
         Obligations  shall be due and  payable to the Agent for the  benefit of
         each  Lender  in full on the  Revolving  Credit  Termination  Date,  or
         earlier as specifically  provided  herein.  The principal amount of any
         Revolving  Loan may be prepaid in whole or in part on any Business Day,
         upon (A) at least  three  (3)  Business  Days'  irrevocable  telephonic
         notice in the case of each  Revolving  Loan that is a  Eurodollar  Rate
         Loan from an Authorized  Representative (effective upon receipt) to the
         Agent prior to 10:30 A.M. and (B) irrevocable  telephonic notice in the
         case of each Revolving Loan that is a Base Rate Loan from an Authorized
         Representative  (effective  upon  receipt)  to the Agent prior to 10:30
         A.M.  on  the  day  of  such   proposed   repayment.   The   Authorized
         Representative  shall  provide the Agent written  confirmation  of each
         such telephonic notice but failure to provide such  confirmation  shall
         not effect the validity of such telephonic  notice.  All prepayments of
         Revolving  Loans  made  by  the  Borrower  shall  be in the  amount  of
         $5,000,000  or such  greater  amount  which is an integral  multiple of
         $100,000, or the amount equal to all Revolving Credit Outstandings,  or
         such other amount as necessary to comply with Section 2.1(b).

                  (e)  Reductions.   The  Borrower  shall,  by  notice  from  an
         Authorized  Representative,  have the  right  from time to time but not
         more frequently  than once each calendar month,  upon not less than ten
         (10)  Business  Days' prior  irrevocable  written  notice to the Agent,
         effective  upon  receipt,   to  reduce  the  Total   Revolving   Credit
         Commitment.  The Agent shall give each Lender,  within one (1) Business
         Day  of  receipt  of  such  notice,  telephonic  notice  (confirmed  in
         writing),  of such  reduction.  Each  such  reduction  shall  be in the
         aggregate  amount of  $10,000,000 or such greater amount which is in an
         integral  multiple  of  $1,000,000,   or  the  entire  remaining  Total
         Revolving Credit  Commitment,  and shall  permanently  reduce the Total
         Revolving Credit Commitment and the Revolving Credit Commitment of each
         Lender pro rata. No such  reduction  shall be permitted that results in
         the payment of any  Eurodollar  Rate Loan other than on the last day of
         the Interest  Period of such Loan unless such prepayment is accompanied
         by amounts due, if any, under Section 5.5 hereof. Each reduction of the
         Total Revolving  Credit  Commitment  shall be accompanied by payment of
         the  Revolving  Loans  or  Swing  Line  Loans  to the  extent  that the
         principal amount of the Outstandings exceeds the Total Revolving Credit
         Commitment after giving effect to such reduction, together with accrued
         and unpaid interest and fees on the amounts prepaid. A reduction of the
         Total  Revolving   Credit   Commitment  to  zero  and  payment  of  all
         Obligations  hereunder  (including the discharge of all  obligations of
         the Issuing  Bank and the Lenders with respect to the Letters of Credit
         and  Participations)  shall be deemed a cancellation and termination of
         this Agreement.

         2.2.  Use of Proceeds.  The proceeds of the Loans made  pursuant to the
Revolving  Credit  Facility  and the Swing Line  hereunder  shall be used by the
Borrower  (i) for  general  working  capital  needs and other  lawful  corporate
purposes,  including the making of Capital Expenditures permitted hereunder, and
(ii) to refinance the Borrower's Existing Senior Credit Facility.

         2.3. Notes.

                  (a) Revolving Notes. Revolving Loans made by each Lender shall
         be evidenced by the Revolving  Note payable to the order of such Lender
         in the respective amount of its Applicable Commitment Percentage of the
         Total Revolving Credit Commitment,  which Revolving Note shall be dated
         the  Closing  Date  or a  later  date  pursuant  to an  Assignment  and
         Acceptance and shall be duly  completed,  executed and delivered by the
         Borrower.

                  (b) Swing Line  Note.  The Swing  Line  Outstandings  shall be
         evidenced  by a separate  Swing  Line Note  payable to the order of the
         Bank of America in the  amount of the Swing  Line,  which Note shall be
         dated  the  Closing  Date and  shall be duly  completed,  executed  and
         delivered by the Borrower.

         2.4. Swing Line.

                  (a)  Notwithstanding  any other provision of this Agreement to
         the contrary,  in order to administer the Revolving  Credit Facility in
         an efficient  manner and to minimize the transfer of funds  between the
         Agent and the Lenders, Bank of America shall make available,  on a same
         day  basis,  Swing Line Loans to the  Borrower  prior to the  Revolving
         Credit Termination Date. Bank of America shall not be obligated to make
         any Swing Line Loan pursuant  hereto (i) if to the actual  knowledge of
         Bank  of  America  the  Borrower  is not in  compliance  with  all  the
         conditions  to  the  making  of  Revolving  Loans  set  forth  in  this
         Agreement,  (ii) if after  giving  effect to such Swing Line Loan,  the
         Swing Line Outstandings  exceed  $25,000,000,  or (iii) if after giving
         effect to such Swing Line Loan, the sum of the Swing Line Outstandings,
         Revolving Credit Outstandings and Letter of Credit Outstandings exceeds
         the Total Revolving Credit Commitment. The Borrower may, subject to the
         conditions  set  forth in the  preceding  sentence,  borrow,  repay and
         reborrow  under this  Section 2.4.  Unless  notified to the contrary by
         Bank of America,  borrowings  under the Swing Line shall be made in the
         minimum  amount  of  $500,000  or, if  greater,  in  amounts  which are
         integral multiples of $100,000,  or in the amount necessary to effect a
         Base  Rate  Refunding  Loan,  upon  written  request  by  telefacsimile
         transmission,  effective upon receipt, by an Authorized  Representative
         of the  Borrower  made to Bank of America  not later than 12:30 P.M. on
         the Business Day of the requested borrowing. Each such Borrowing Notice
         shall  specify the amount of the  borrowing  and the date of borrowing,
         and shall be in the form of Exhibit D-2, with  appropriate  insertions.
         Unless notified to the contrary by Bank of America, each repayment of a
         Swing Line Loan shall be in an amount which is an integral  multiple of
         $500,000 or the aggregate amount of all Swing Line Outstandings.

                  (b) The interest payable on Swing Line Loans is solely for the
         account of Bank of America. Swing Line Loans shall bear interest solely
         at the Swing Line Rate.  All accrued and unpaid  interest on Swing Line
         Loans  shall be  payable,  on the dates and in the manner  provided  in
         Section 4.3 with respect to interest on Base Rate Loans. Each provision
         of Section 2.1(c) and (d) hereof applicable to Base Rate Loans shall be
         applicable in all respects to each Swing Line Loan.

                  (c) Upon the making of a Swing Line Loan, each Lender shall be
         deemed to have purchased from Bank of America a  Participation  therein
         in an amount equal to that Lender's Applicable Commitment Percentage of
         such Swing Line Loan. Upon demand made by Bank of America,  each Lender
         shall,  according to its Applicable Commitment Percentage of such Swing
         Line  Loan,  promptly  provide to Bank of America  its  purchase  price
         therefor in an amount equal to its Participation  therein.  Any Advance
         made by a Lender  pursuant to demand of Bank of America of the purchase
         price of its Participation  shall be deemed to be a Base Rate Refunding
         Loan under  Section 2.1 if the  conditions  to making  Revolving  Loans
         shall then be satisfied.  If such  conditions  are not then  satisfied,
         such  Advance  shall be deemed to be the  funding by such Lender of the
         purchase  price of its  Participation  in such  Swing  Line  Loan.  The
         obligation  of each Lender to so provide its purchase  price to Bank of
         America shall be absolute and  unconditional  and shall not be affected
         by the  occurrence  of an Event of Default or any other  occurrence  or
         event.

         The  Borrower,  at its option  and  subject  to the terms  hereof,  may
request an Advance  pursuant  to Section  2.1 in an amount  sufficient  to repay
Swing  Line  Outstandings  on any  date and the  Agent  shall  provide  from the
proceeds of such  Advance to Bank of America the amount  necessary to repay such
Swing  Line  Outstandings  (which  Bank of  America  shall  then  apply  to such
repayment) and credit any balance of the Advance in immediately  available funds
in the manner  directed  by the  Borrower  pursuant to Section  2.1(c)(ii).  The
proceeds of such Advances  shall be paid to Bank of America for  application  to
the Swing Line  Outstandings  and the Lenders  shall then be deemed to have made
Loans in the amount of such  Advances.  The Swing Line shall  continue in effect
until the  Revolving  Credit  Termination  Date,  at which  time all Swing  Line
Outstandings  and accrued  interest and fees thereon shall be due and payable in
full.

<PAGE>

                                   ARTICLE III

                                Letters of Credit
                                -----------------

         3.1. Letters of Credit.  The Issuing Bank agrees,  subject to the terms
and  conditions of this  Agreement  and in reliance  upon the  agreements of the
other  Lenders  set forth in this  Article III and in Section  2.1(c)(ii),  upon
request  of the  Borrower  to issue  from  time to time for the  account  of the
Borrower  Letters of Credit upon delivery to the Issuing Bank of an  Application
and  Agreement  for  Letter  of  Credit  relating  thereto  in form and  content
reasonably  acceptable to the Issuing Bank; provided,  that (i) the Issuing Bank
shall not be  obligated  to issue (or renew) any Letter of Credit if it has been
notified by the Agent or has actual knowledge that a Default or Event of Default
has occurred and is continuing, (ii) the Letter of Credit Outstandings shall not
exceed the Total Letter of Credit Commitment and (iii) no Letter of Credit shall
be issued  (or  renewed)  if,  after  giving  effect  thereto,  Letter of Credit
Outstandings  plus Revolving Credit  Outstandings  plus Swing Line  Outstandings
shall exceed the Total Revolving Credit Commitment. No Letter of Credit shall be
issued by the  Issuing  Bank with an expiry  date  (including  all rights of the
Borrower or any beneficiary  named in such Letter of Credit to require  renewal)
or payment date  occurring  subsequent  to the fifth  Business Day preceding the
Revolving Credit  Termination  Date. Any request for the issuance of a Letter of
Credit  shall be deemed a  representation  and  warranty by the  Borrower to the
Issuing Bank and the Lenders that all the  representations  and  warranties  set
forth in Article  VII hereof and in the other Loan  Documents  (other than those
expressly  stated to refer to a particular  date) are true and correct as of the
date hereof except that the representations and warranties set forth in Sections
7.4 and 7.6 hereof  shall be deemed to include and take into  account any merger
or  consolidation  permitted  under  Section 9.6 hereof and the reference to the
financial  statement in Section 7.6(a) hereof are to those financial  statements
most recently delivered pursuant to Section 8.1.

         3.2. Reimbursement and Participations.

                  (a) The Borrower hereby  unconditionally  agrees to pay to the
         Issuing Bank  immediately on demand at the Principal Office all amounts
         required to pay all drafts  drawn or  purporting  to be drawn under the
         Letters of Credit and all reasonable  expenses  incurred by the Issuing
         Bank in  connection  with the  Letters of Credit,  and in any event and
         without  demand to place in possession of the Issuing Bank (which shall
         include  Advances under the Revolving  Credit  Facility if permitted by
         Section  2.1  and  Swing  Line  Loans  if  permitted  by  Section  2.4)
         sufficient  funds to pay all debts and  liabilities  arising  under any
         Letter of Credit; provided that to the extent permitted by Section 2.1,
         such amounts  shall be paid  pursuant to Advances  under the  Revolving
         Credit  Facility.  The Issuing Bank agrees to give the Borrower  prompt
         written notice of any request for a draw under a Letter of Credit.  The
         Borrower's  obligations to pay the Issuing Bank under this Section 3.2,
         and the Issuing Bank's right to receive the same, shall be absolute and
         unconditional and shall not be affected by any circumstance whatsoever,
         including  without  limitation the  unavailability of any Advance under
         the Revolving Credit Facility. In the event an Advance is not available
         under the Revolving  Credit  Facility,  the Issuing Bank may charge any
         account  the  Borrower  may have  with it for any and all  amounts  the
         Issuing Bank pays under a Letter of Credit, plus charges and reasonable
         expenses  as from time to time  agreed to by the  Issuing  Bank and the
         Borrower.  The Borrower  agrees to pay the Issuing Bank interest on any
         Reimbursement  Obligations not paid when due hereunder on demand at the
         Default  Rate from the date such amount was due and payable to the date
         such amount is paid in full.

                  (b) In accordance with the provisions of Section  2.1(c),  the
         Issuing  Bank  shall  notify  the Agent  (and  shall  also  notify  the
         Borrower)  of any  drawing  under any Letter of Credit as  promptly  as
         practicable following the receipt by the Issuing Bank of such drawing.

                  (c)  Each  Lender   (other   than  the  Issuing   Bank)  shall
         automatically  acquire on the date of issuance thereof, a Participation
         in the  liability  of the  Issuing  Bank in respect  of each  Letter of
         Credit  in an  amount  equal  to such  Lender's  Applicable  Commitment
         Percentage  of such  liability,  and to the extent that the Borrower is
         obligated to pay the Issuing  Bank under  Section  3.2(a),  each Lender
         (other   than   the   Issuing   Bank)   thereby,    shall   absolutely,
         unconditionally  and irrevocably  assume,  and shall be unconditionally
         obligated  to  pay to  the  Issuing  Bank,  its  Applicable  Commitment
         Percentage  of the  liability  of the Issuing Bank under such Letter of
         Credit  in  the  manner  and  with  the  effect   provided  in  Section
         2.1(c)(iii).

                  (d) Simultaneously with the making of each payment by a Lender
         to the Issuing  Bank  pursuant to Section  2.1(c)(iii)(B),  such Lender
         shall,  automatically and without any further action on the part of the
         Issuing Bank or such Lender, acquire a Participation in an amount equal
         to such payment  (excluding the portion thereof  constituting  interest
         accrued  prior to the date the Lender made its  payment) in the related
         Reimbursement  Obligation of the Borrower.  Each Lender's obligation to
         make payment to the Agent for the account of the Issuing Bank  pursuant
         to Section 2.1(c)(iii) and Section 3.2(c), and the right of the Issuing
         Bank to receive the same,  shall be absolute and  unconditional,  shall
         not be  affected  by any  circumstance  whatsoever  and  shall  be made
         without any offset, abatement,  withholding or reduction whatsoever. In
         the  event  the   Lenders   have   purchased   Participations   in  any
         Reimbursement  Obligation as set forth above,  then at any time payment
         (in fully collected, immediately available funds) of such Reimbursement
         Obligation,  in whole or in part,  is received by the Issuing Bank from
         the  Borrower,  the Issuing  Bank shall  promptly pay to each Lender an
         amount equal to its  Applicable  Commitment  Percentage of such payment
         from the Borrower.

                  (e) Promptly  following the end of each calendar quarter,  the
         Issuing Bank shall deliver to the Agent, and the Agent shall deliver to
         each Lender,  a notice  describing the aggregate  undrawn amount of all
         Letters of Credit at the end of such  quarter.  Upon the request of any
         Lender from time to time,  the Issuing Bank shall deliver to the Agent,
         and the Agent shall  deliver to such Lender at such  Lender's  expense,
         any other information  reasonably requested by such Lender with respect
         to each Letter of Credit outstanding.

                  (f) The  issuance by the Issuing Bank of each Letter of Credit
         shall, in addition to the conditions precedent set forth in Article VI,
         be subject to the conditions  that (x) such Letter of Credit be in such
         form and contain such terms as shall be reasonably  satisfactory to the
         Issuing Bank consistent with the then current  practices and procedures
         of the Issuing Bank with respect to similar letters of credit,  (y) the
         issuance of such  Letter of Credit  shall not violate any policy of the
         Issuing  Bank,  and (z) the Borrower  shall have executed and delivered
         such other  instruments  and  agreements  relating  to such  Letters of
         Credit as the Issuing Bank shall have reasonably  requested  consistent
         with such  practices and  procedures  and shall not be in conflict with
         any of the express terms herein contained.  Unless otherwise  expressly
         agreed by the Issuing Bank and the Borrower  when a Letter of Credit is
         issued  (including any such agreement  applicable to an existing Letter
         of Credit), (i) the rules of the "International Standby Practices 1998"
         published by the Institute of International  Banking Law & Practice (or
         such later version thereof as may be in effect at the time of issuance)
         shall apply to each standby Letter of Credit, and (ii) the rules of the
         Uniform Customs and Practice for Documentary  Credits, as most recently
         published by the  International  Chamber of Commerce (the "ICC") at the
         time  of  issuance   (including  the  ICC  decision  published  by  the
         Commission on Banking Technique and Practice on April 6, 1998 regarding
         the European  single  currency  (euro)) shall apply to each  commercial
         Letter of Credit.

                  (g) The Borrower agrees that the Issuing Bank may, in its sole
         discretion, accept or pay, as complying with the terms of any Letter of
         Credit,  any drafts or other documents  otherwise in order which may be
         signed or issued by an administrator,  executor, trustee in bankruptcy,
         debtor  in   possession,   assignee  for  the  benefit  of   creditors,
         liquidator, receiver, attorney in fact or other legal representative of
         a party who is authorized  under such Letter of Credit to draw or issue
         any drafts or other  documents.  The Issuing  Bank will use  reasonable
         care in accordance  with its  established  procedures for its customers
         generally to determine  that a legal  representative  is  authorized to
         sign a Letter of Credit for a party.

                  (h) Without  limiting the generality of the provisions of, and
         without  duplication  of, Section 12.9,  the Borrower  hereby agrees to
         defend, indemnify and hold harmless the Issuing Bank, each other Lender
         and the Agent from and against any and all claims and damages,  losses,
         liabilities, reasonable costs and expenses which the Issuing Bank, such
         other  Lender or the Agent may incur (or which may be  claimed  against
         the  Issuing  Bank,  such  other  Lender or the Agent) by any Person by
         reason of or in connection  with the issuance or transfer of or payment
         or  failure  to pay  under  any  Letter of  Credit;  provided  that the
         Borrower shall not be required to indemnify the Issuing Bank, any other
         Lender or the Agent for any claims, damages, losses, liabilities, costs
         or  expenses  to the  extent,  but only to the  extent,  caused  by the
         willful  misconduct or gross negligence of the party to be indemnified.
         The indemnification and hold harmless provisions of this Section 3.2(h)
         shall survive repayment of the Obligations, occurrence of the Revolving
         Credit  Termination Date, the Facility  Termination Date and expiration
         or termination of this Agreement.

                  (i) Without limiting Borrower's rights as set forth in Section
         3.2(h),  the  obligation of the Borrower to  immediately  reimburse the
         Issuing Bank for drawings  made under Letters of Credit and the Issuing
         Bank's right to receive such payment  shall be absolute,  unconditional
         and  irrevocable,  and  such  obligations  of  the  Borrower  shall  be
         performed  strictly in accordance  with the terms of this Agreement and
         such Letters of Credit and the related  Application  and  Agreement for
         any Letter of Credit, under the following circumstances:

                           (i) any lack of  validity  or  enforceability  of any
                  Letter of Credit,  the  obligation  supported by any Letter of
                  Credit or any other agreement or instrument  relating  thereto
                  (collectively, the "Related LC Documents");

                           (ii) any  amendment or waiver of or any consent to or
                  departure from all or any of the Related LC Documents;

                           (iii) the existence of any claim, setoff,  defense or
                  other  rights  which the Borrower may have at any time against
                  any  beneficiary  or any  transferee of a Letter of Credit (or
                  any persons or entities for whom any such  beneficiary  or any
                  such transferee may be acting),  the Agent, the Lenders or any
                  other Person,  whether in connection  with the Loan Documents,
                  the Related LC Documents or any unrelated transaction;

                           (iv) any breach of contract or other dispute  between
                  the Borrower and any beneficiary or any transferee of a Letter
                  of  Credit  (or  any  persons  or   entities   for  whom  such
                  beneficiary or any such transferee may be acting),  the Agent,
                  the Lenders or any other Person;

                           (v)  the  existence,  character,  quality,  quantity,
                  condition,  value,  or delivery  (including  the time,  place,
                  manner or order thereof) of property  described or purportedly
                  described in documents presented in connection with any Letter
                  of Credit or the existence,  nature or extent of any insurance
                  relating thereto;

                           (vi)  any  draft,  statement  or any  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
                  whatsoever;

                           (vii)  any  delay,   extension   of  time,   renewal,
                  compromise  or other  indulgence  or  modification  granted or
                  agreed to by the Agent,  with or without notice to or approval
                  by the  Borrower in respect of any of  Borrower's  Obligations
                  under this Agreement; or

                           (viii)   any   other    circumstance   or   happening
                  whatsoever, whether or not similar to any of the foregoing.

         3.3. Governmental Action. The Issuing Bank shall be under no obligation
to  issue  any  Letter  of  Credit  if any  order,  judgment  or  decree  of any
Governmental  Authority or  arbitrator  shall by its terms  purport to enjoin or
restrain  the  Issuing  Bank from  issuing  such  Letter of  Credit,  or any law
applicable  to the  Issuing  Bank or any  request or  directive  (whether or not
having the force of law) from any Governmental  Authority with jurisdiction over
the Issuing Bank shall prohibit,  or request that the Issuing Bank refrain from,
the  issuance  of  letters  of  credit  generally  or such  Letter  of Credit in
particular  or shall impose upon the Issuing Bank with respect to such Letter of
Credit any  restriction,  reserve or capital  requirement (for which the Issuing
Bank is not otherwise compensated  hereunder) not in effect on the Closing Date,
or shall impose upon the Letter of Credit any unreimbursed loss, cost or expense
which was not  applicable on the Closing Date and which the Issuing Bank in good
faith deems material to it.

<PAGE>

                                   ARTICLE IV

                Eurodollar Funding, Fees, and Payment Conventions
                -------------------------------------------------

         4.1.  Interest Rate Options.  Eurodollar Rate Loans and Base Rate Loans
may be  outstanding  at the same time  and,  so long as no  Default  or Event of
Default  shall have  occurred and be  continuing,  the  Borrower  shall have the
option  to elect  the  Type of Loan  and the  duration  of the  initial  and any
subsequent  Interest  Periods and to Convert  Revolving Loans in accordance with
Sections 2.1(c)(i) and 4.2, as applicable;  provided,  however,  (a) there shall
not be  outstanding  at any one time  Eurodollar  Rate  Loans  having  more than
fifteen (15) different  Interest Periods,  and (b) no Eurodollar Rate Loan shall
have an Interest Period that extends beyond the Stated  Termination Date. If the
Agent does not receive a Borrowing  Notice or an Interest Rate Selection  Notice
giving notice of election of the duration of an Interest Period or of Conversion
of any Loan to or  Continuation  of a Loan as a Eurodollar Rate Loan by the time
prescribed by Sections  2.1(c)(i) and 4.2, as applicable,  the Borrower shall be
deemed to have elected to obtain or Convert such Loan to (or Continue  such Loan
as) a Swing Line Loan,  if available  under Section  2.4(a),  until the Borrower
notifies the Agent in accordance with Section 4.2; provided,  however,  if Swing
Line Loans are not  available,  the Borrower  shall be deemed to have elected to
Convert or Continue  such Loan as a Base Rate Loan.  The  Borrower  shall not be
entitled to elect to Continue  any Loan as or Convert any Loan into a Eurodollar
Rate  Loan  if a  Default  or  Event  of  Default  shall  have  occurred  and be
continuing.

         4.2. Conversions and Elections of Subsequent Interest Periods. Provided
that no Default or Event of Default shall have  occurred and be  continuing  and
subject to the limitations set forth in the definition of "Interest  Period" and
in Section 4.1 and Article V, the Borrower may:

                  (a) after  notice to the Agent on or before  10:30 A.M. on any
         Business Day,  Convert all or a part of any  Eurodollar  Rate Loan to a
         Base  Rate  Loan  on the  last  day of the  Interest  Period  for  such
         Eurodollar Rate Loan; and

                  (b) upon  delivery  of notice to the Agent on or before  10:30
         A.M. three (3) Business  Days' prior to the date of such  Conversion or
         Continuation:

                           (i) elect a subsequent  Interest  Period for all or a
                  portion of any  Eurodollar  Rate Loan to begin on the last day
                  of the then current  Interest  Period for such Eurodollar Rate
                  Loan; or

                           (ii) Convert any Base Rate Loan to a Eurodollar  Rate
                  Loan on any Business Day.

         No Swing  Line Loan may be  converted  into any other  type of Loan and
none of such other types of Loans may be converted into Swing Line Loans.

         Each such notice  shall be effective  upon receipt by the Agent,  shall
specify the amount of the  Eurodollar  Rate Loan affected and the effective date
of such Continuation or Conversion, and, if a Continuation as or Conversion into
a Eurodollar  Rate Loan,  the Interest  Period to be  applicable  to the Loan as
Continued  or  Converted.  Where  telephonic  notice  is given,  the  Authorized
Representative  shall  provide  the  Agent  written  confirmation  of each  such
telephonic  notice in the form of a Borrowing  Notice or Interest Rate Selection
Notice (as applicable) with  appropriate  insertions but failure to provide such
confirmation shall not affect the validity of such telephonic notice.  Notice of
receipt of such Borrowing Notice or Interest Rate Selection  Notice, as the case
may be,  shall  be  provided  by the  Agent  to  each  Lender  by  telefacsimile
transmission  with  reasonable  promptness,  but  (provided the Agent shall have
received  such notice by 10:30 A.M.) not later than 1:00 P.M. on the same day as
the Agent's  receipt of such notice.  All such  Continuations  or Conversions of
Loans shall be effected pro rata based on the Applicable Commitment  Percentages
of the Lenders.  Each election and conversion pursuant to this Section 4.2 shall
be subject to the  limitations  on  Eurodollar  Rate Loans set forth in Sections
2.1(a), (b) and (c).

         4.3. Payment of Interest.  The Borrower shall pay interest to the Agent
at the Principal  Office for the account of each Lender on the  outstanding  and
unpaid principal  amount of each Revolving Loan made by such Lender,  commencing
on the first date of such  Revolving  Loan until  such  Revolving  Loan shall be
repaid,  at the  applicable  Base Rate or  Eurodollar  Rate as designated by the
Borrower in the related Borrowing Notice or Interest Rate Selection Notice or as
otherwise provided  hereunder.  Interest on each Revolving Loan shall be paid on
the  earlier of (a) in the case of any Base Rate Loan,  quarterly  in arrears of
the last Business Day of each  September,  December,  March or June,  commencing
June 2001, until the Revolving Credit Termination Date, at which date the entire
principal  amount of and all accrued  interest and fees on the  Revolving  Loans
shall be paid in full, (b) in the case of any Eurodollar  Rate Loan, on last day
of the  applicable  Interest  Period for such  Eurodollar  Rate Loan and if such
Interest  Period  extends for more than three (3) months,  at intervals of three
(3) months after the first day of such Interest Period,  and (c) upon payment in
full of the related Revolving Loan; provided,  however, that if any amount shall
not be paid when due (at maturity, by acceleration or otherwise) or any Event of
Default shall occur and be continuing,  all amounts outstanding  hereunder shall
bear interest thereafter until paid in full at the Default Rate.

         4.4.  Prepayments  of  Eurodollar  Rate Loans.  Whenever any payment of
principal shall be made in respect of any Loan  hereunder,  whether at maturity,
by acceleration, by optional or mandatory prepayment or as otherwise required or
permitted  hereunder,  with the effect  that any  Eurodollar  Rate Loan shall be
prepaid  in whole  or in part  prior  to the  last  day of the  Interest  Period
applicable  to such  Eurodollar  Rate Loan,  such payment of principal  shall be
accompanied by the additional payment, if any, required by Section 5.5.

         4.5. Manner of Payment.

                  (a) Each payment of principal  (including any  prepayment) and
         payment of interest and fees, and any other amount  required to be paid
         by or on behalf of the Borrower to the Lenders,  the Issuing Bank,  the
         Agent,  or Bank of America with respect to any Loan,  Letter of Credit,
         Reimbursement  Obligation,  or Swing  Line  Loan,  shall be made to the
         Agent at the Principal Office in Dollars in immediately available funds
         without condition or deduction for any setoff, recoupment, deduction or
         counterclaim  on or before 2:00 P.M.  on the date such  payment is due.
         The Agent may, but shall not be obligated  to, debit the amount of such
         payment,  when due, from any one or more ordinary  deposit  accounts of
         the Borrower with the Agent.

                  (b) Any payment made by or on behalf of the  Borrower  that is
         not made both in Dollars in  immediately  available  funds and prior to
         2:00 P.M.  on the date such  payment is to be made shall  constitute  a
         non-conforming  payment.  Any such non-conforming  payment shall not be
         deemed to be received until the later of (i) the time such funds become
         available  funds and (ii) the next  Business  Day.  Any  non-conforming
         payment  may  constitute  or become a Default  or Event of  Default  as
         otherwise  provided  herein.  Interest  shall continue to accrue at the
         Default Rate on any principal, interest, fees or other amounts required
         to be paid hereunder as to which no payment or a non-conforming payment
         is made from the date such amount was due and  payable  until the later
         of (i) the date  such  funds  become  available  funds or (ii) the next
         Business Day.

                  (c) In the event that any  payment  hereunder  or under any of
         the Notes or any other Loan  Document  becomes due and payable on a day
         other than a Business  Day, then such due date shall be extended to the
         next  succeeding  Business  Day  unless  provided  otherwise  under the
         definition of "Interest Period";  provided,  however, that interest and
         applicable  fees shall continue to accrue during the period of any such
         extension;  and provided further,  however,  that in no event shall any
         such due date be extended beyond the Revolving Credit Termination Date.

         4.6. Fees.

                  (a) Facility Fee. For the period beginning on the Closing Date
         and ending on the  Revolving  Credit  Termination  Date,  the  Borrower
         agrees to pay to the Agent,  for the pro rata  benefit  of the  Lenders
         based on their Applicable Commitment  Percentages,  a facility fee (the
         "Facility  Fee")  equal to the  product  of the  Applicable  Margin for
         calculating  the Facility Fee multiplied by the average daily amount of
         the Total Revolving Credit  Commitment.  Such payments of Facility Fees
         provided for in this Section 4.6(a) shall be due in arrears on the last
         Business Day of each September,  December, March and June commencing on
         the  Closing  Date to and on the  Revolving  Credit  Termination  Date.
         Notwithstanding  the  foregoing,  so long as any  Lender  fails to make
         available in accordance with the terms of this Agreement any portion of
         its Revolving Credit  Commitment when requested,  such Lender shall not
         be entitled to receive  payment of its pro rata share of such fee until
         such  Lender  shall  make  available  such  portion.  Each fee shall be
         calculated  on the basis of a year of 360 days for the actual number of
         days elapsed.

                  (b) Letter of Credit  Facility Fees. The Borrower shall pay to
         the  Agent,  for the pro rata  benefit  of the  Lenders  based on their
         Applicable  Commitment  Percentages,  quarterly  in arrears on the last
         Business Day of each September,  December, March and June, beginning on
         the Closing Date, a fee per annum equal to (i) for each Standby  Letter
         of Credit issued after the Closing  Date,  the product of the aggregate
         amount  available  to  be  drawn  on  such  Standby  Letter  of  Credit
         multiplied by the Applicable Margin for Eurodollar Rate Loans, and (ii)
         for each Commercial Letter of Credit issued after the Closing Date, the
         greater of (1) $75.00 and (2) the product of the stated  amount of such
         Commercial  Letter of Credit  multiplied  by  one-tenth  of one percent
         (.10%) . Such fees for Standby Letters of Credit shall be calculated on
         the basis of a year of 360 days for the  actual  number of days  during
         which such Letters of Credit are outstanding.

                  (c) Letter of Credit  Fronting and  Administrative  Fees.  The
         Borrower  shall pay to the Issuing  Bank a fronting fee as set forth in
         the Fee Letter.

                  (d) Additional  Fees. In addition to any fees described above,
         the Borrower agrees to pay to the Agent and the Issuing Bank such other
         fees as may be  agreed to from time to time in a  separate  writing  or
         writings.

         4.7. Pro Rata Payments.  Except as otherwise specified herein, (a) each
payment and prepayment on account of the principal of and interest on Loans, the
fees  described in Section 4.6(a) and (b), and  Reimbursement  Obligations as to
which the Lenders  have funded  their  respective  Participations  which  remain
outstanding,  shall be made to the Agent for the  account of the  Lenders in the
aggregate  amount  payable to the  Lenders  pro rata  based on their  Applicable
Commitment Percentages, and (b) each payment of principal of and interest on the
Swing Line Loans  shall be made to the Agent for the account of Bank of America.
All payments to be made by the Borrower hereunder, shall be made without set-off
or  counterclaim.   The  Agent  will  promptly  distribute  to  the  Lenders  in
immediately  available funds payments  received in fully collected,  immediately
available funds from the Borrower.

         4.8.  Computation  of  Rates  and  Fees.  Except  as may  be  otherwise
expressly provided,  (a) the Eurodollar Rate and the Default Rate and fees shall
be  computed on the basis of a year of 360 days and  calculated  for actual days
elapsed  and (b) the Base Rate shall be  computed  on the basis of a year of 365
(or 366 if a leap  year)  days and  calculated  for the  actual  number  of days
elapsed.

         4.9. Deficiency Advances; Failure to Purchase Participations. No Lender
shall be  responsible  for any  default  of any other  Lender in respect to such
other Lender's  obligation to make any Loan or Advance  hereunder or to fund its
purchase of any Participation  hereunder nor shall any Lender's Revolving Credit
Commitment,   Letter  of  Credit   Commitment   or   obligation  to  purchase  a
Participation  in Swing Line Loans be  increased  as a result of such default of
any other  Lender.  Without  limiting  the  generality  of the  foregoing or the
provisions  of Section 4.10, in the event any Lender shall fail to advance funds
to the Borrower as herein provided,  the Agent may in its discretion,  but shall
not be obligated to, advance under the applicable  Note in its favor as a Lender
all or any portion of such amount or amounts (each, a "deficiency  advance") and
shall  thereafter  be entitled to payments of  principal of and interest on such
deficiency  advance in the same manner and at the same interest rate or rates to
which such other Lender would have been  entitled had it made such Advance under
its applicable  Note;  provided that,  (i) such  defaulting  Lender shall not be
entitled to receive payments of principal, interest or fees with respect to such
deficiency advance until such deficiency advance (together with interest thereon
as provided in clause  (ii)) shall be paid by such Lender and (ii) upon  payment
to the Agent from such other  Lender of the  entire  outstanding  amount of each
such deficiency advance, together with accrued and unpaid interest thereon, from
the most recent date or dates  interest was paid to the Agent by the Borrower on
each Loan comprising the deficiency advance at the Federal Funds Rate, then such
payment  shall be  credited  against  the  applicable  Note of the Agent in full
payment of such  deficiency  advance  and the  Borrower  shall be deemed to have
borrowed the amount of such deficiency  advance from such other Lender as of the
most  recent  date or dates,  as the case may be,  upon  which any  payments  of
interest were made by the Borrower  thereon.  In the event any Lender shall fail
to fund its  purchase of a  Participation  after notice from the Issuing Bank or
Bank of America as the Swing Line Lender,  as applicable,  such Lender shall pay
to the Issuing Bank or Bank of America as the Swing Line Lender,  as applicable,
such amount on demand,  together  with interest at the Federal Funds Rate on the
amount so due from the date of such  notice to the date such  purchase  price is
received by the  Issuing  Bank or Bank of America as the Swing Line  Lender,  as
applicable.  In the event any Lender shall fail to advance funds to the Borrower
as herein provided and such failure shall continue for a period in excess of ten
(10) Business  Days,  then,  notwithstanding  the  provisions of Section  2.1(e)
hereof,  the Borrower may terminate such Lender's Revolving Credit Commitment by
repaying in full the amount of all  principal and interest due such Lender under
such  Lender's  Notes and all other  amounts due  hereunder  and providing for a
Replacement Bank.

         4.10. Intraday Funding. Without limiting the provisions of Section 4.9,
unless the  Borrower or any Lender has  notified  the Agent not later than 12:00
Noon of the Business Day before the date any payment  (including  in the case of
Lenders any  Advance) to be made by it is due,  that it does not intend to remit
such  payment,  the Agent may, in its  discretion,  assume that Borrower or each
Lender,  as the case may be,  has  timely  remitted  such  payment in the manner
required  hereunder and may, in its  discretion  and in reliance  thereon,  make
available such payment (or portion  thereof) to the Person  entitled  thereto as
otherwise provided herein. If such payment was not in fact remitted to the Agent
in the manner required hereunder, then:

                  (i) if Borrower failed to make such payment, each Lender shall
         forthwith  on  demand  repay to the Agent  the  amount of such  assumed
         payment made available to such Lender,  together with interest  thereon
         in respect of each day from and including the date such amount was made
         available by the Agent to such Lender to the date such amount is repaid
         to the Agent at the Federal Funds Rate; and

                  (ii) if any  Lender  failed  to make such  payment,  the Agent
         shall be entitled to recover such  corresponding  amount forthwith upon
         the  Agent's  demand  therefor.  The Agent  promptly  shall  notify the
         Borrower, and the Borrower shall promptly pay such corresponding amount
         to the  Agent in  immediately  available  funds  upon  receipt  of such
         demand,  but without paying any amounts pursuant to Section 5.5 hereof.
         The  Agent  also  shall  be  entitled  to  recover   interest  on  such
         corresponding  amount  in  respect  of each  day  from  the  date  such
         corresponding amount was made available by the Agent to the Borrower to
         the date such corresponding  amount is recovered by the Agent, (A) from
         such Lender at a rate per annum equal to the daily  Federal  Funds Rate
         or (B) from the  Borrower,  at a rate per annum  equal to the  interest
         rate applicable to the Loan which includes such  corresponding  amount.
         Until the Agent shall recover such  corresponding  amount together with
         interest  thereon,   such  corresponding   amount  shall  constitute  a
         deficiency  advance  within the meaning of Section 4.9.  Nothing herein
         shall be deemed to relieve  any Lender from its  obligation  to fulfill
         its commitments hereunder or to prejudice any rights which the Agent or
         the  Borrower may have against any Lender as a result of any default by
         such Lender hereunder.

<PAGE>

                                    ARTICLE V

                             Change in Circumstances
                             -----------------------


         5.1. Increased Cost and Reduced Return.

                  (a) If, after the date hereof,  the adoption of any applicable
         law, rule, or regulation, or any change in any applicable law, rule, or
         regulation,  or any  change  in the  interpretation  or  administration
         thereof by any  Governmental  Authority,  central  bank,  or comparable
         agency charged with the  interpretation or administration  thereof,  or
         compliance by any Lender (or its  Applicable  Lending  Office) with any
         request or  directive  (whether  or not having the force of law) of any
         such Governmental Authority, central bank, or comparable agency:

                           (i) shall  subject  such  Lender  (or its  Applicable
                  Lending Office) to any tax, duty, or other charge with respect
                  to any Eurodollar  Rate Loans,  its Note, or its obligation to
                  make Eurodollar Rate Loans, or change the basis of taxation of
                  any amounts payable to such Lender (or its Applicable  Lending
                  Office)  under  this  Agreement  or its Note in respect of any
                  Eurodollar Rate Loans (other than taxes imposed on the overall
                  net income of such  Lender by the  jurisdiction  in which such
                  Lender has its  principal  office or such  Applicable  Lending
                  Office);

                           (ii) shall impose,  modify,  or deem  applicable  any
                  reserve,  special deposit,  assessment or similar  requirement
                  (other   than  the   Reserve   Requirement   utilized  in  the
                  determination   of  the  Eurodollar   Rate)  relating  to  any
                  extensions  of credit or other assets of, or any deposits with
                  or other  liabilities or  commitments  of, such Lender (or its
                  Applicable   Lending  Office),   including   Revolving  Credit
                  Commitment of such Lender hereunder; or

                           (iii) shall impose on such Lender (or its  Applicable
                  Lending  Office) or on the London  interbank  market any other
                  condition  affecting this Agreement or its Note or any of such
                  extensions of credit or liabilities or commitments;

         and the result of any of the  foregoing is to increase the cost to such
         Lender (or its Applicable  Lending Office) of making,  Converting into,
         Continuing,  or maintaining  any Loans or to reduce any sum received or
         receivable by such Lender (or its Applicable Lending Office) under this
         Agreement or its Note with respect to any Eurodollar  Rate Loans,  then
         the Borrower  shall pay to such Lender on demand such amount or amounts
         as will compensate such Lender for such increased cost or reduction. If
         any Lender  requests  compensation  by the Borrower  under this Section
         5.1(a),  the Borrower may, by notice to such Lender (with a copy to the
         Agent), suspend the obligation of such Lender to make or Continue Loans
         of the Type with respect to which such compensation is requested, or to
         Convert  Loans of any other  Type into  Loans of such  Type,  until the
         event or condition  giving rise to such request  ceases to be in effect
         (in which  case the  provisions  of Section  5.4 shall be  applicable);
         provided that such suspension shall not affect the right of such Lender
         to receive the compensation so requested.

                  (b)  If,  after  the  date  hereof,   any  Lender  shall  have
         determined that the adoption of any applicable law, rule, or regulation
         regarding   capital   adequacy   or  any  change   therein  or  in  the
         interpretation or administration thereof by any Governmental Authority,
         central bank, or comparable  agency charged with the  interpretation or
         administration  thereof,  or any request or directive regarding capital
         adequacy  (whether  or not  having  the  force  of  law)  of  any  such
         Governmental  Authority,  central bank, or  comparable  agency,  has or
         would have the effect of reducing  the rate of return on the capital of
         such Lender or any corporation controlling such Lender as a consequence
         of such Lender's obligations hereunder to a level below that which such
         Lender or such  corporation  could have achieved but for such adoption,
         change,  request,  or directive (taking into consideration its policies
         with respect to capital  adequacy),  then from time to time upon demand
         the Borrower shall pay to such Lender such additional amount or amounts
         as will compensate such Lender for such reduction.

                  (c) Each Lender  shall  promptly  notify the  Borrower and the
         Agent of any event of which it has knowledge,  occurring after the date
         hereof, which will entitle such Lender to compensation pursuant to this
         Section 5.1 and will designate a different Applicable Lending Office if
         such designation will avoid the need for, or reduce the amount of, such
         compensation and will not, in the judgment of such Lender, be otherwise
         disadvantageous  to it. Any  Lender  claiming  compensation  under this
         Section  5.1 shall  furnish to the  Borrower  and the Agent a statement
         setting forth the nature of the change giving rise to the  compensation
         requested and the calculations, in reasonable detail, setting forth the
         additional  amount or amounts to be paid to it hereunder which shall be
         conclusive  in the  absence of  manifest  error.  In  determining  such
         amount,  such Lender may use any reasonable  averaging and  attribution
         methods.

                  (d) The  provisions  of this  Section  5.1 shall  continue  in
         effect notwithstanding the Facility Termination Date.

         5.2.  Limitation on Types of Loans.  If on or prior to the first day of
any Interest Period for any Eurodollar Rate Loan:

                  (a)  the  Agent  determines  (which   determination  shall  be
         conclusive  absent  manifest  error)  that by reason  of  circumstances
         affecting the relevant  market,  adequate and  reasonable  means do not
         exist for ascertaining the Eurodollar Rate for such Interest Period; or

                  (b) the Required Lenders determine (which  determination shall
         be conclusive)  and notify the Agent that the Eurodollar  Rate will not
         adequately  and  fairly  reflect  the cost to the  Lenders  of  funding
         Eurodollar Rate Loans for such Interest Period;

         then the Agent shall give the Borrower prompt notice thereof specifying
         the relevant Type of Loans and the relevant amounts or periods,  and so
         long as such condition remains in effect, the Lenders shall be under no
         obligation to make  additional  Loans of such Type,  Continue  Loans of
         such  Type,  or to  Convert  Loans of any other Type into Loans of such
         Type and the  Borrower  shall,  on the last day(s) of the then  current
         Interest  Period(s)  for the  outstanding  Loans of the affected  Type,
         either  prepay such Loans or Convert  such Loans into  another  Type of
         Loan in accordance with the terms of this Agreement.

         5.3. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes  unlawful for any Lender or its Applicable  Lending
Office to make,  maintain,  or fund Eurodollar Rate Loans  hereunder,  then such
Lender shall promptly notify the Borrower  thereof and such Lender's  obligation
to make or Continue  Eurodollar  Rate Loans and to Convert  other Types of Loans
into Eurodollar Rate Loans shall be suspended until such time as such Lender may
again  make,  maintain,  and fund  Eurodollar  Rate  Loans  (in  which  case the
provisions of Section 5.4 shall be applicable).

         5.4.  Treatment of Affected  Loans.  If the obligation of any Lender to
make a  Eurodollar  Rate Loan or to Continue,  or to Convert  Loans of any other
Type into, Loans of a particular Type shall be suspended pursuant to Section 5.2
or 5.3 hereof (Loans of such Type being herein called  "Affected Loans" and such
Type being herein called the "Affected  Type"),  such  Lender's  Affected  Loans
shall be automatically  Converted into Base Rate Loans on the last day(s) of the
then  current  Interest  Period(s)  for  Affected  Loans  (or,  in the case of a
Conversion  required by Section 5.3 hereof,  on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender  gives  notice as  provided  below that the  circumstances  specified  in
Section 5.2 or 5.3 hereof that gave rise to such Conversion no longer exist:

                  (a) to the extent that such Lender's  Affected Loans have been
         so  Converted,  all payments and  prepayments  of principal  that would
         otherwise be applied to such Lender's  Affected  Loans shall be applied
         instead to its Base Rate Loans; and

                  (b) all Loans that would  otherwise  be made or  Continued  by
         such Lender as Loans of the  Affected  Type shall be made or  Converted
         instead as Base Rate  Loans,  and all Loans of such  Lender  that would
         otherwise be Converted  into Loans of the Affected Type shall remain as
         Base Rate Loans.

         If such Lender gives notice to the Borrower  (with a copy to the Agent)
         that the circumstances specified in Section 5.2 or 5.3 hereof that gave
         rise to the  maintenance or Conversion of such Lender's  Affected Loans
         pursuant to this Section 5.4 no longer exist (which such Lender  agrees
         to do promptly upon such circumstances ceasing to exist) at a time when
         Loans of the Affected Type made by other Lenders are outstanding,  such
         Lender's Base Rate Loans shall be automatically Converted, on the first
         day(s) of the next succeeding  Interest  Period(s) for such outstanding
         Loans of the Affected  Type,  to the extent  necessary  so that,  after
         giving effect  thereto,  all Loans held by the Lenders holding Loans of
         the Affected Type and by such Lender are held pro rata (as to principal
         amounts,   Types,  and  Interest  Periods)  in  accordance  with  their
         respective Revolving Credit Commitments.

         5.5. Compensation. Upon demand of any Lender (with a copy to the Agent)
from time to time, the Borrower shall  promptly  compensate  such Lender for and
hold such Lender harmless from any actual loss,  cost or expense  incurred by it
as a result of:

any continuation,  conversion, payment or prepayment of any Eurodollar Rate Loan
on a day other than the last day of the Interest  Period for such Loan  (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or


         (b)      any  failure  by the  Borrower  (for a reason  other  than the
                  failure  of  such  Lender  to  make  a  Loan   notwithstanding
                  satisfaction of all conditions  precedent  thereto) to prepay,
                  borrow,  Continue or Convert any  Eurodollar  Rate Loan on the
                  date or in the amount notified by the Borrower;

including any loss of anticipated  profits and any loss or expense  arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower  shall also pay any customary  administrative  fees charged by such
Lender in connection with the foregoing.

A determination  of a Lender as to the amounts payable  pursuant to this Section
5.5  shall  be  conclusive   absent  manifest  error.   The  Lender   requesting
compensation   under  this   Section   5.5  shall   furnish  to  an   Authorized
Representative  and the Agent  calculations  in reasonable  detail setting forth
such Lender's  determination of the amount of such  compensation  which shall be
paid within thirty (30) days of the submission of such determination.

For purposes of calculating amounts payable by the Borrower to the Lenders under
this  Section 5.5,  each Lender  shall be deemed to have funded each  Eurodollar
Rate Loan made by it at the  Interbank  Offered  Rate  used in  determining  the
Eurodollar  Rate for such Loan by a matching  deposit or other  borrowing in the
applicable  offshore Dollar interbank  market for a comparable  amount and for a
comparable  period,  whether  or not such  Eurodollar  Rate  Loan was in fact so
funded.

         The   provisions   of  this  Section  5.5  shall   continue  in  effect
notwithstanding the Facility Termination Date.

         5.6. Taxes.

                  (a) Any and all payments by the Borrower to or for the account
         of any Lender or the Agent  hereunder or under any other Loan  Document
         shall be made free and clear of and without  deduction  for any and all
         present or future taxes, duties, levies, imposts,  deductions,  charges
         or withholdings,  and all liabilities with respect thereto,  excluding,
         in the case of each Lender and the Agent,  taxes imposed on its income,
         and franchise taxes imposed on it, by the  jurisdiction  under the laws
         of which such Lender (or its  Applicable  Lending  Office) or the Agent
         (as the case may be) is organized or any political  subdivision thereof
         (all such non-excluded  taxes,  duties,  levies,  imposts,  deductions,
         charges, withholdings, and liabilities being hereinafter referred to as
         "Taxes").  If the Borrower shall be required by law to deduct any Taxes
         from or in respect of any sum payable under this Agreement or any other
         Loan Document to any Lender or the Agent,  (i) the sum payable shall be
         increased as  necessary  so that after  making all required  deductions
         (including  deductions applicable to additional sums payable under this
         Section  5.6) such  Lender or the Agent,  as  applicable,  receives  an
         amount equal to the sum it would have  received had no such  deductions
         been made,  (ii) the  Borrower  shall make such  deductions,  (iii) the
         Borrower  shall pay the full amount  deducted to the relevant  taxation
         authority or other  authority in accordance  with  applicable  law, and
         (iv) the  Borrower  shall  furnish  to such  Lender  or the  Agent,  as
         applicable, at its address referred to in Section 12.2, the original or
         a  certified  copy of a  receipt,  as  applicable,  evidencing  payment
         thereof.

                  (b) In  addition,  the  Borrower  agrees  to pay  any  and all
         present or future  stamp or  documentary  taxes and any other excise or
         property  taxes or  charges  or  similar  levies  which  arise from any
         payment made under this  Agreement  or any other Loan  Document or from
         the  execution  or  delivery  of, or  otherwise  with  respect to, this
         Agreement or any other Loan Document (hereinafter referred to as "Other
         Taxes").

                  (c) The Borrower agrees to indemnify each Lender and the Agent
         for the full  amount  of Taxes  and  Other  Taxes  (including,  without
         limitation,  any  Taxes or  Other  Taxes  imposed  or  asserted  by any
         jurisdiction  on amounts  payable  under this Section 5.6) paid by such
         Lender or the Agent (as the case may be) and any  liability  (including
         penalties,  interest,  and expenses)  arising therefrom or with respect
         thereto.

                  (d) Each  Lender  organized  under the laws of a  jurisdiction
         outside the United States, on or prior to the date of its execution and
         delivery of this  Agreement  in the case of each  Lender  listed on the
         signature  pages hereof and on or prior to the date on which it becomes
         a Lender in the case of each other  Lender  shall  provide the Borrower
         and the  Agent two duly  signed  completed  copies  of either  IRS Form
         W-8BEN or any successor  thereto (relating to such Person and entitling
         it to an  exemption  from,  or  reduction  of,  withholding  tax on all
         payments  to be made to such  Person by the  Borrower  pursuant to this
         Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
         payments  to be made to such  Person by the  Borrower  pursuant to this
         Agreement) or such other evidence  satisfactory to the Borrower and the
         Agent that such Person is entitled to an exemption  from,  or reduction
         of, U.S.  withholding tax.  Thereafter and from time to time, each such
         Person  shall (a)  promptly  submit to the Agent such  additional  duly
         completed  and signed  copies of one of such  forms (or such  successor
         forms as shall be  adopted  from  time to time by the  relevant  United
         States taxing  authorities) as may then be available under then current
         United  States laws and  regulations  to avoid,  or such evidence as is
         satisfactory  to the Borrower and the Agent of any available  exemption
         from or reduction of, United States withholding taxes in respect of all
         payments  to be made to such  Person by the  Borrower  pursuant to this
         Agreement, (b) promptly notify the Agent of any change in circumstances
         which  would  modify  or  render  invalid  any  claimed   exemption  or
         reduction,  and  (c)  take  such  steps  as  shall  not  be  materially
         disadvantageous  to it, in the reasonable  judgment of such Lender, and
         as may be reasonably  necessary  (including the  re-designation  of its
         lending  office) to avoid any  requirement of applicable  laws that the
         Borrower  make any  deduction  or  withholding  for taxes from  amounts
         payable to such Person. If any Governmental  Authority asserts that the
         Agent did not properly  withhold any tax or other amount from  payments
         made in respect of such Person due solely to the failure of such Person
         to deliver  the  foregoing  documentation  or  failure  to provide  the
         foregoing notification, such Person shall indemnify the Agent therefor,
         including  all  penalties  and  interest,  any  taxes  imposed  by  any
         jurisdiction  on the amounts  payable to the Agent under this sentence,
         and costs and expenses  (including the reasonable  fees and expenses of
         counsel  (including  the  allocated  cost of internal  counsel)) of the
         Agent.  The  obligation of the Lenders under this Section shall survive
         the  resignation  or  replacement  of the Agent and shall  continue  in
         effect notwithstanding the Facility Termination Date.

                  (e) For any period  with  respect to which a Lender has failed
         to  provide  the  Borrower  and the  Agent  with the  appropriate  form
         pursuant to Section  5.6(d)  (unless such failure is due to a change in
         treaty, law, or regulation  occurring subsequent to the date on which a
         form originally was required to be provided),  such Lender shall not be
         entitled to indemnification under Section 5.6(a) or 5.6(b) with respect
         to Taxes imposed by the United States; provided, however, that should a
         Lender,  which is otherwise exempt from or subject to a reduced rate of
         withholding  tax,  become  subject to Taxes  because of its  failure to
         deliver a form required  hereunder,  the Borrower shall take such steps
         as such  Lender  shall  reasonably  request  to assist  such  Lender to
         recover such Taxes.

                  (f) If the Borrower is required to pay  additional  amounts to
         or for the account of any Lender  pursuant to this  Section  5.6,  then
         such  Lender  will  agree  to use  reasonable  efforts  to  change  the
         jurisdiction  of its  Applicable  Lending  Office so as to eliminate or
         reduce any such additional  payment which may thereafter accrue if such
         change,   in  the   judgment   of  such   Lender,   is  not   otherwise
         disadvantageous to such Lender.

                  (g) Within  thirty  (30) days after the date of any payment of
         Taxes, the Borrower shall furnish to the Agent or the applicable Lender
         the original or a certified copy of a receipt evidencing such payment.

                  (h) The  provisions  of this  Section  5.6 shall  continue  in
         effect notwithstanding the Facility Termination Date.

         5.7. Replacement Banks. In the event that any Lender (a) shall have its
obligation  to make or continue,  or convert other Loans into,  Eurodollar  Rate
Loans suspended pursuant to this Article V for a period in excess of thirty (30)
days, or (b) shall request compensation for additional costs pursuant to Section
5.1 hereof then,  notwithstanding  the provisions of Section 2.1(e) hereof,  the
Borrower may terminate such Lender's  Revolving Credit Commitment by repaying in
full the amount of all principal and interest due under such Lender's  Notes and
all other amounts due hereunder and providing for a Replacement Bank.



<PAGE>



                                   ARTICLE VI

            Conditions to Making Loans and Issuing Letters of Credit
            --------------------------------------------------------

         6.1. Conditions of Initial Advance. The effectiveness of this Agreement
and the  obligation  of the  Lenders  to make  the  initial  Advance  under  the
Revolving  Credit  Facility,  and of the  Issuing  Bank to issue  any  Letter of
Credit,  and of Bank of America  to make any Swing Line Loan,  is subject to the
conditions precedent that:

                  (a) the Agent shall have received on the Closing Date, in form
         and substance  reasonably  satisfactory  to the Agent and Lenders,  the
         following:

                           (i) executed originals of each of this Agreement, the
                  Notes,  the initial  Facility  Guaranties,  and the other Loan
                  Documents, together with all schedules and exhibits thereto;

                           (ii) the favorable  written  opinion or opinions with
                  respect   to  the   Loan   Documents   and  the   transactions
                  contemplated  thereby of counsel to the Credit  Parties  dated
                  the Closing  Date,  addressed to the Agent and the Lenders and
                  reasonably  satisfactory  to  Smith  Helms  Mulliss  &  Moore,
                  L.L.P.,  special  counsel to the Agent,  substantially  in the
                  form of Exhibit G or such other form as is accepted by Agent;

                           (iii) resolutions of the boards of directors or other
                  appropriate  governing body (or of the  appropriate  committee
                  thereof) of each Credit Party  certified  by its  secretary or
                  assistant  secretary  or other  appropriate  officer as of the
                  Closing Date,  approving and adopting the Loan Documents to be
                  executed by such Person,  authorizing the execution,  delivery
                  and  performance  thereof and  appointing  (in the case of the
                  Borrower) the initial Authorized Representative;

                           (iv)   specimen   signatures  of  officers  or  other
                  appropriate  representatives  executing the Loan  Documents on
                  behalf  of  each  of  the  Credit  Parties,  certified  by the
                  secretary or assistant secretary or other appropriate official
                  of such Credit Party;

                           (v)  the  Organizational  Documents  of  each  of the
                  Credit Parties  certified as of a recent date by the Secretary
                  of State of its state of organization;

                           (vi)  Operating  Documents  of  each  of  the  Credit
                  Parties  certified  as of the Closing Date as true and correct
                  by its secretary or assistant secretary;

                           (vii) certificates  issued as of a recent date by the
                  Secretaries  of  State  of  the  respective  jurisdictions  of
                  formation  of  each  of  the  Credit  Parties  as to  the  due
                  existence and good standing of such Person;

                           (viii)  appropriate  certificates of qualification to
                  do business,  good standing and, where appropriate,  authority
                  to conduct  business under assumed name,  issued in respect of
                  each  of  the  Credit  Parties  as of a  recent  date  by  the
                  Secretary of State or comparable official of each jurisdiction
                  in  which  the  failure  to be  qualified  to do  business  or
                  authorized  so to  conduct  business  could  have  a  Material
                  Adverse Effect;

                           (ix) notice of appointment of the initial  Authorized
                  Representative(s);

                           (x) certificate of an Authorized Representative dated
                  the Closing Date  demonstrating  compliance with the financial
                  covenants  contained in Sections  9.1(a)  through 9.1(d) as of
                  the end of the fiscal quarter most recently  reported prior to
                  the Closing Date, substantially in the form of Exhibit H;

                           (xi) a certificate of an Authorized Representative of
                  the Borrower certifying as to the continuing  effectiveness of
                  all policies of insurance required by the Loan Documents;

                           (xii) an initial  Borrowing  Notice,  if any, and, if
                  elected by the Borrower, Interest Rate Selection Notice;

                           (xiii) evidence that all fees payable by the Borrower
                  on the Closing  Date to the Agent,  BAS and the  Lenders  have
                  been paid in full, including the due diligence expenses of the
                  Agent and the reasonable  fees and expenses of counsel for the
                  Agent to the extent  invoiced  prior to or on the Closing Date
                  (which may include amounts  constituting  reasonable estimates
                  of such  fees  and  expenses  incurred  or to be  incurred  in
                  connection  with  the  transaction;   provided  that  no  such
                  estimate  shall  thereafter  preclude  the final  settling  of
                  accounts as to such fees and expenses);

                           (xiv) a certificate  of the Treasurer of the Borrower
                  as to the  matters  described  in  Section  6.1(b)(i)  through
                  (iii);

                           (xv)  repayment  in full of all  amounts  outstanding
                  under,   and   termination  of,  the  Existing  Senior  Credit
                  Facility; and

                           (xvi) such other documents, instruments, certificates
                  and opinions as the Agent or any Lender may reasonably request
                  on or  prior  to the  Closing  Date  in  connection  with  the
                  consummation of the transactions contemplated hereby; and

                  (b) In the good faith judgment of the Agent and the Lenders:

                           (i) there shall not have  occurred or become known to
                  the Agent or the Lenders any  information,  event,  condition,
                  situation or status since  February  24, 2001  concerning  the
                  Credit Parties prior to the Closing Date that has had or could
                  reasonably be expected to result in a Material Adverse Effect;

                           (ii) Except as set forth in the Borrower's  Form 10-K
                  filed with the  Securities  and  Exchange  Commission  for the
                  Borrower's Fiscal Year ended February 24, 2001, no litigation,
                  action, suit, investigation or other arbitral,  administrative
                  or  judicial  proceeding  shall be  pending or  threatened  in
                  writing  which  could  reasonably  be  likely  to  result in a
                  Material Adverse Effect; and

                           (iii) the  Credit  Parties  shall have  received  all
                  approvals,  consents and waivers, and shall have made or given
                  all  necessary  filings  and  notices as shall be  required to
                  consummate the  transactions  contemplated  hereby without the
                  occurrence of any default under, conflict with or violation of
                  (A) any applicable law, rule,  regulation,  order or decree of
                  any  Governmental  Authority or arbitral  authority or (B) any
                  agreement,  document or  instrument to which any of the Credit
                  Parties is a party or by which any of them or their properties
                  is  bound,  except  for  such  approvals,  consents,  waivers,
                  filings  and  notices  for  which the  non-receipt,  making or
                  giving of which will not have a Material Adverse Effect.

         6.2.   Conditions  of  Revolving  Loans  and  Letter  of  Credit.   The
obligations  of the Lenders to make any  Advances  and the Issuing Bank to issue
(or renew)  Letters  of Credit  and Bank of  America  to make Swing Line  Loans,
hereunder on or subsequent  to the Closing Date are subject to the  satisfaction
of the following conditions:

                  (a) the  Agent or, in the case of Swing  Line  Loans,  Bank of
         America shall have  received a Borrowing  Notice as required by Article
         II and the Lenders  have  received  notice of receipt of such notice of
         borrowing or request pursuant to Section 2.1(c)(i) hereof;

                  (b) the  representations  and warranties of the Credit Parties
         set forth in Article VII and in each of the other Loan Documents  shall
         be true and correct on and as of the date of such  Advance,  Swing Line
         Loan or Letter of Credit  issuance or renewal,  with the same effect as
         though such  representations  and warranties had been made on and as of
         such  date,  except  (i) to the extent  that such  representations  and
         warranties   expressly  relate  to  an  earlier  date,  (ii)  that  the
         representations and warranties set forth in Sections 7.4 and 7.6 hereof
         shall be  deemed  to  include  and take  into  account  any  merger  or
         consolidation  permitted  under Section 9.6 hereof,  and (iii) that the
         financial  statements  referred to in Section 7.6(a) shall be deemed to
         be those financial  statements most recently delivered to the Agent and
         the Lenders pursuant to Section 8.1;

                  (c) in the case of the  issuance  of a Letter of  Credit,  the
         Borrower  shall have  executed  and  delivered  to the Issuing  Bank an
         Application  and  Agreement  for  Letter of Credit in form and  content
         reasonably  acceptable  to the Issuing  Bank  together  with such other
         instruments and documents as it shall reasonably request;

                  (d) at the time of (and after giving  effect to) each Advance,
         Swing Line Loan or the  issuance  or renewal of a Letter of Credit,  no
         Default or Event of Default  specified in Article X shall have occurred
         and be continuing; and

                  (e)      immediately after giving effect to:

                           (i) a Revolving  Loan,  a Swing Line Loan or a Letter
                  of Credit or renewal thereof,  (1) the sum of Letter of Credit
                  Outstandings  plus Revolving  Credit  Outstandings  plus Swing
                  Line Outstandings  shall not exceed the Total Revolving Credit
                  Commitment  and  (2)  each  Lender's   Applicable   Commitment
                  Percentage  of Revolving  Loans and  Participations  shall not
                  exceed its Revolving Credit Commitment; and

                           (ii) a Letter  of  Credit  or  renewal  thereof,  the
                  aggregate principal balance of all outstanding  Participations
                  in Letters of Credit and Reimbursement  Obligations (or in the
                  case  of  the  Issuing  Bank,  its  remaining  interest  after
                  deduction of all  Participations  of the Lenders in Letters of
                  Credit and  Reimbursement  Obligations) for each Lender and in
                  the  aggregate  shall  not  exceed,  respectively,   (X)  such
                  Lender's  Letter of Credit  Commitment or (Y) the Total Letter
                  of Credit Commitment.

                           (iii) a Swing Line Loan, the Swing Line  Outstandings
                  shall not exceed $25,000,000; and


<PAGE>



                                  ARTICLE VII

                         Representations and Warranties
                         ------------------------------

The Borrower  represents and warrants with respect to itself,  the Parent and to
its  Subsidiaries  (which  representations  and  warranties  shall  survive  the
delivery of the documents  mentioned herein and the making of Loans and issuance
of Letters of Credit), that:

         7.1.     Organization and Authority.

                  (a) Each Credit  Party is a  corporation  duly  organized  and
         validly   existing   under  the  laws  of  the   jurisdiction   of  its
         incorporation;

                  (b)  Each  Credit  Party  (x)  has  the  requisite  power  and
         authority to own its properties and assets and to carry on its business
         as now being conducted and as  contemplated in the Loan Documents,  and
         (y)  is  qualified  to do  business  and  in  good  standing  in  every
         jurisdiction  in which  failure to be so qualified or in good  standing
         could reasonably be expected to have a Material Adverse Effect;

                  (c) The  Borrower  has the power  and  authority  to  execute,
         deliver and perform  this  Agreement  and the Notes,  and to borrow and
         request  issuance  of  Letters  of Credit  hereunder,  and to  execute,
         deliver and perform  each of the other Loan  Documents to which it is a
         party;

                  (d) Each Credit Party (other than the  Borrower) has the power
         and authority to execute,  deliver and perform the applicable  Facility
         Guaranty  and each of the other Loan  Documents to which it is a party;
         and

                  (e) When executed and delivered, each of the Loan Documents to
         which any Credit Party is a party will be the legal,  valid and binding
         obligation  or  agreement,  as the case may be, of such  Credit  Party,
         enforceable  against  such Credit Party in  accordance  with its terms,
         subject  to  the  effect  of  any  applicable  bankruptcy,  moratorium,
         insolvency,   reorganization   or  other   similar  law  affecting  the
         enforceability  of  creditors'  rights  generally  and to the effect of
         general  principles  of equity  which may  limit  the  availability  of
         equitable  remedies  (whether  considered  in a proceeding at law or in
         equity).

         7.2. Loan  Documents.  The execution,  delivery and performance by each
Credit Party of each of the Loan Documents to which it is a party:

                  (a) have been duly authorized by all requisite  Organizational
         Action of such Credit Party required for the lawful execution, delivery
         and performance thereof;

                  (b) do not violate the  Organizational  Documents or Operating
         Documents  of such  Credit  Party and do not  violate in a manner  that
         would  reasonably  be  likely to have a  Material  Adverse  Effect  any
         provisions of (i) any applicable  law, rule or regulation,  or (ii) any
         judgment, writ, order,  determination,  decree or arbitral award of any
         Governmental  Authority  or arbitral  authority  binding on such Credit
         Party or its properties, or;

                  (c) does not and will not be in  conflict  with,  result  in a
         breach of or  constitute an event of default,  or an event which,  with
         notice or lapse of time or both,  would  constitute an event of default
         in a manner that would  reasonably be likely to have a Material Adverse
         Effect under any contract, indenture,  agreement or other instrument or
         document  to  which  such  Credit  Party is a  party,  or by which  the
         properties or assets of such Credit Party are bound; and

                  (d) does not and will not result in the creation or imposition
         of any material Lien,  charge or  encumbrance of any nature  whatsoever
         upon  any of the  properties  or  assets  of such  Credit  Party or any
         Subsidiary  except  any  Liens in favor of the  Agent  and the  Lenders
         created by the Loan Documents.

         7.3. Solvency.  Each Credit Party is Solvent after giving effect to the
transactions contemplated by this Agreement and the other Loan Documents.

         7.4.  Material  Subsidiaries  and  Stockholders.  The  Borrower  has no
Material  Subsidiaries other than those Persons listed as Material  Subsidiaries
in  Schedule  7.4 and  additional  Subsidiaries  created or  acquired  after the
Closing Date in compliance with Section 8.19; Schedule 7.4 states as of the date
hereof  the  correct  name of each  Material  Subsidiary,  the  jurisdiction  of
organization  of  each  Material  Subsidiary,  the  organizational  form of each
entity,  the  authorized and issued  capitalization  of each  Subsidiary  listed
thereon, the number of shares or other equity interests of each class of capital
stock or interest  issued and  outstanding of each such Material  Subsidiary and
the number and/or  percentage  of  outstanding  shares or other equity  interest
(including  options,  warrants and other rights to acquire any interest) of each
such class of capital stock or other equity interest owned by the Borrower;  the
outstanding  shares or other equity  interests of each Material  Subsidiary have
been duly  authorized and validly  issued and are fully paid and  nonassessable;
and  Borrower  owns  beneficially  and of record all the issued and  outstanding
shares of capital stock or equity interests of each Material Subsidiary owned by
it, free and clear of any Lien.

         7.5. Intentionally Omitted.

         7.6. Financial Condition.

                  (a) The  Borrower has  heretofore  furnished to each Lender an
         audited  consolidated balance sheet of the Parent, the Borrower and its
         Subsidiaries  as at  February  24,  2001 and the notes  thereto and the
         related  consolidated   statements  of  operations,   cash  flows,  and
         stockholders'  equity for the Fiscal  Year then ended as  examined  and
         certified by Ernst & Young. Except as set forth therein, such financial
         statements  (including the notes thereto)  present fairly the financial
         condition and results of operations of the Parent, the Borrower and its
         Subsidiaries  as of  the  end of  and  for  such  Fiscal  Year,  all in
         conformity with GAAP applied on a Consistent Basis;

                  (b) since the later of (i) the date of the  audited  financial
         statements delivered pursuant to Section 7.6(a) hereof or (ii) the date
         of the audited financial statements most recently delivered pursuant to
         Section 8.1(a) hereof,  there has not occurred any event,  condition or
         circumstance  which has had or could  reasonably  be expected to have a
         Material  Adverse  Effect,  nor  have  the  businesses,  properties  or
         operations of the Parent, the Borrower and its Subsidiaries, considered
         as a whole, been materially adversely affected as a result of any fire,
         explosion,   earthquake,  accident,  strike,  lockout,  combination  of
         workers, flood, embargo or act of God; and

                  (c) except as set forth in Schedule 7.6 or the Borrower's Form
         10-K  filed  with  the  Securities  and  Exchange  Commission  for  the
         Borrower's Fiscal Year ended February 24, 2001, neither the Parent, the
         Borrower nor any  Subsidiary  has incurred,  other than in the ordinary
         course of business, any material Indebtedness.  Neither the Parent, the
         Borrower nor any  Subsidiary  is in default and no waiver of default is
         currently in effect, in the payment of any principal or interest on any
         Indebtedness  of the Parent,  the  Borrower or such  Subsidiary  and no
         event or  condition  exists  with  respect to any  Indebtedness  of the
         Parent, the Borrower or any Subsidiary the outstanding principal amount
         of which exceeds  $30,000,000 that would permit (or that with notice or
         the lapse of time, or both,  would permit) one or more Persons to cause
         such  Indebtedness to become due and payable before its stated maturity
         or before its regularly scheduled dates of payment.

         7.7.  Title  to  Properties.  The  Borrower  and  each of its  Material
Subsidiaries  and each other Credit Party has title to all its material real and
personal properties,  which is not subject to any transfer restrictions or Liens
of any kind,  except (i) for the transfer  restrictions  and Liens  described in
Schedule 7.7, (ii) for Liens permitted by Section 9.2, and (iii) where a failure
to have such title  would not  reasonably  be likely to have a Material  Adverse
Effect.  All  material  leases that the Borrower is a party to as lessee are (as
against the Borrower and, to the best knowledge of the Borrower,  as against the
lessor  thereunder) valid and subsisting and are in full force and effect in all
material respects.

         7.8. Taxes.  Except as set forth in Schedule 7.8, the Borrower and each
of its  Subsidiaries and each other Credit Party has filed or caused to be filed
or caused to be properly  extended  all  federal,  state,  local and foreign tax
returns  which  are  required  to be  filed  by it and,  except  for  taxes  and
assessments being contested in good faith by appropriate  proceedings diligently
conducted  and against  which  reserves  reflected in the  financial  statements
described in Section 7.6(a) or Sections  8.1(a) or (b) and  satisfactory  to the
Borrower's independent certified public accountants have been established,  have
paid or caused to be paid all material  taxes as shown on said returns or on any
assessment  received by it, to the extent that such taxes have become and remain
due and before they have become delinquent.  The federal income tax liability of
the Borrower and its  Subsidiaries  has been determined by the Internal  Revenue
Service and paid for all Fiscal Years up to and  including the Fiscal Year ended
February 25, 1995.

         7.9. Other Agreements. No Credit Party is

                  (a) a party to or  subject  to any  judgment,  order,  decree,
         agreement, lease or instrument, or subject to other restrictions, which
         individually or in the aggregate could reasonably be expected to have a
         Material Adverse Effect; or

                  (b) in default in the  performance,  observance or fulfillment
         of any of the  obligations,  covenants or  conditions  contained in any
         agreement or  instrument  to which such Credit Party is a party,  which
         default  has, or if not  remedied  within any  applicable  grace period
         could reasonably be likely to have, a Material Adverse Effect.

         7.10. Litigation. Except as set forth in the Borrower's Form 10-K filed
with the Securities and Exchange Commission for the Borrower's Fiscal Year ended
February 24, 2001, there is no action, suit,  investigation or proceeding at law
or in  equity  or by or before  any  Governmental  Authority  or  arbitral  body
pending,  or, to the  knowledge of the  Borrower,  threatened  by or against any
Credit Party or  affecting  any Credit  Party or any  properties  or rights of a
Credit  Party,  which  could  reasonably  be likely to have a  Material  Adverse
Effect.

         7.11.  Margin Stock. The proceeds of the borrowings made hereunder will
be used by the Borrower only for the purposes expressly  authorized herein. None
of such  proceeds  will be used,  directly  or  indirectly,  for the  purpose of
purchasing  or  carrying  any margin  stock or for the  purpose of  reducing  or
retiring any  Indebtedness  which was  originally  incurred to purchase or carry
margin  stock  or for any  other  purpose  which  violates  or  which  would  be
inconsistent  with  Regulation U (12 CFR Part 221) or  Regulation X (12 CFR Part
224) of the Board.  Neither the Borrower,  the Parent nor any other Credit Party
nor any  agent  acting  on their  respective  behalf  has taken or will take any
action which might cause this  Agreement or any of the documents or  instruments
delivered  pursuant  hereto to violate any regulation of the Board or to violate
the Securities  Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended,  or any state securities laws, in each case as in effect on the date
hereof.

         7.12.  Regulated  Company.  No  Credit  Party  is  (i)  an  "investment
company," or an "affiliated person" of, or "promoter" or "principal underwriter"
for,  an  "investment  company",  as such terms are  defined  in the  Investment
Company  Act of 1940,  as  amended  (15  U.S.C.  ss.  80a-1,  et seq.) or (ii) a
"holding  company"  or a  "subsidiary  company"  or  "affiliate"  of a  "holding
company" as such terms are defined in the Public Utility  Holding Company Act of
1935, as amended.  The Letters of Credit and  application of the proceeds of the
Loans and repayment  thereof by the Borrower and the performance by the Borrower
and the  other  Credit  Parties  of the  transactions  contemplated  by the Loan
Documents  will not violate any  provision of the  foregoing  acts, or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder,
in each case as in effect on the date hereof.

         7.13.  Patents,  Etc.  The Borrower and each other Credit Party owns or
has the right to use, under valid license agreements or otherwise,  all patents,
licenses,  franchises,  trademarks,  trademark rights,  trade names,  trade name
rights,  trade secrets and copyrights,  or rights thereto,  that are material or
necessary to the business,  operations,  affairs, financial condition, assets or
properties of the Parent or the Borrower or its  Subsidiaries  taken as a whole,
as now  conducted  and as  contemplated  by the Loan  Documents,  without  known
conflict with any patent,  license,  franchise,  trademark,  trade secret, trade
name,  copyright,  other proprietary right of any other Person, except for those
conflicts  that,  individually  or in the  aggregate,  could not  reasonably  be
expected to have a Material Adverse Effect.

         7.14.  No Untrue  Statement.  Neither (a) this  Agreement nor any other
Loan Document or certificate or document  executed and delivered by or on behalf
of the Borrower or any other Credit Party in accordance  with or pursuant to any
Loan Document nor (b) any statement, representation, or warranty provided to the
Agent or the Lenders in connection  with the  negotiation  or preparation of the
Loan Documents  contains any  misrepresentation  or untrue statement of material
fact or omits to state a material fact necessary,  in light of the  circumstance
under which it was made, in order to make any such warranty,  representation  or
statement contained therein not misleading in any material respect.

         7.15. No Consents, Etc. Neither the respective businesses or properties
of the Parent,  the Borrower or any of its  Subsidiaries,  nor any  relationship
between the  Parent,  the  Borrower  and any of its  Subsidiaries  and any other
Person,  nor any  circumstance  in connection  with the execution,  delivery and
performance of the Loan Documents and the transactions  contemplated thereby, is
such  as to  require  a  consent,  approval  or  authorization  of,  or  filing,
registration  or  qualification  with,  any  Governmental   Authority  or  other
authority or any other Person on the part of the Parent,  the Borrower or any of
its  Subsidiaries as a condition to the execution,  delivery and performance of,
or consummation of the transactions  contemplated by this Agreement or the other
Loan Documents,  which, if not obtained or effected,  would be reasonably likely
to  have  a  Material  Adverse  Effect,  or  if  so,  such  consent,   approval,
authorization,  filing,  registration or qualification has been duly obtained or
effected, as the case may be.

         7.16. Employee Benefit Plans.

                  (a) The  Borrower and each ERISA  Affiliate  is in  compliance
         with  all  applicable  provisions  of  ERISA  and the  regulations  and
         published interpretations thereunder and in compliance with all Foreign
         Benefit Laws with respect to all Employee  Benefit Plans except for any
         required  amendments for which the remedial amendment period as defined
         in  Section  401(b)  of the Code  has not yet  expired.  Each  Employee
         Benefit Plan that is intended to be qualified  under Section  401(a) of
         the Code has been determined or the Borrower or its  Subsidiaries is in
         the  process of  obtaining  a  determination  by the  Internal  Revenue
         Service to be so  qualified,  each trust  related to such plan has been
         determined  to be exempt  under  Section  501(a) of the Code,  and each
         Employee  Benefit Plan subject to any Foreign  Benefit Law has received
         the required  approvals by any Governmental  Authority  regulating such
         Employee  Benefit Plan. No material  liability has been incurred by the
         Borrower or any ERISA Affiliate which remains unsatisfied for any taxes
         or  penalties  with  respect  to  any  Employee  Benefit  Plan  or  any
         Multiemployer Plan;

                  (b)  Neither  the  Borrower  nor any ERISA  Affiliate  has (i)
         engaged in a nonexempt prohibited transaction described in Section 4975
         of the Code or  Section  406 of  ERISA  affecting  any of the  Employee
         Benefit Plans or the trusts created  thereunder which could subject any
         such  Employee  Benefit  Plan or trust to a material  tax or penalty on
         prohibited  transactions  imposed under  Internal  Revenue Code Section
         4975 or ERISA,  (ii) incurred any accumulated  funding  deficiency with
         respect to any Employee  Benefit  Plan,  whether or not waived,  or any
         other  liability to the PBGC which remains  outstanding  other than the
         payment of premiums and there are no premium payments which are due and
         unpaid,  (iii) failed to make a required  contribution  or payment to a
         Multiemployer Plan, (iv) failed to make a required installment or other
         required payment under Section 412 of the Code, Section 302 of ERISA or
         the  terms of such  Employee  Benefit  Plan,  or (v)  failed  to make a
         required  contribution  or payment,  or otherwise  failed to operate in
         compliance with any Foreign Benefit Law regulating any Employee Benefit
         Plan;

                  (c)  No  Termination  Event  has  occurred  or  is  reasonably
         expected  to occur with  respect to any Pension  Plan or  Multiemployer
         Plan, and neither the Borrower nor any ERISA Affiliate has incurred any
         unpaid withdrawal liability with respect to any Multiemployer Plan;

                  (d) The present  value of all vested  accrued  benefits  under
         each  Employee  Benefit Plan which is subject to Title IV of ERISA,  or
         the funding of which is regulated  by any Foreign  Benefit Law did not,
         as of the most  recent  valuation  date for each such plan,  exceed the
         then  current  value  of the  assets  of  such  Employee  Benefit  Plan
         allocable to such benefits;

                  (e) To the best of the  Borrower's  knowledge,  each  Employee
         Benefit  Plan which is  subject to Title IV of ERISA or the  funding of
         which is  regulated  by any  Foreign  Benefit  Law,  maintained  by the
         Borrower or any ERISA  Affiliate,  has been  administered in accordance
         with its terms in all  material  respects and is in  compliance  in all
         material respects with all applicable requirements of ERISA, applicable
         Foreign Benefit Law and other applicable laws, regulations and rules;

                  (f) The  consummation  of the  Loans and the  issuance  of the
         Letters of Credit  provided for herein will not involve any  prohibited
         transaction  under  ERISA  which  is  not  subject  to a  statutory  or
         administrative exemption; and

                  (g)   No   material   proceeding,    claim,   lawsuit   and/or
         investigation  exists or, to the best  knowledge of the Borrower  after
         due inquiry, is threatened concerning or involving any Employee Benefit
         Plan (other than routine claims for benefits).

         7.17.  No Default.  As of the date  hereof,  to the  knowledge  of each
Authorized Representative, there does not exist any Default or Event of Default.

         7.18.  Environmental  Laws.  Except  as listed on  Schedule  7.18,  the
Borrower and each  Subsidiary and each other Credit Party is in compliance  with
all applicable  Environmental  Laws and has been issued and currently  maintains
all  required  federal,  state and local  permits,  licenses,  certificates  and
approvals  except to the extent  non-compliance  could reasonably be expected to
have a Material Adverse Effect.  Except as listed on Schedule 7.18,  neither the
Borrower nor any  Subsidiary nor any other Credit Party has been notified of any
pending or threatened action, suit, proceeding or investigation, and neither the
Borrower  nor any  Subsidiary  nor any other Credit Party is aware of any facts,
which (a) calls into  question,  or could  reasonably  be  expected to call into
question, compliance by the Borrower or any Subsidiary or any other Credit Party
with any Environmental Laws which non-compliance could reasonably be expected to
have a Material  Adverse Effect,  (b) seeks, or could  reasonably be expected to
form the basis of a meritorious proceeding,  to suspend, revoke or terminate any
license, permit or approval necessary for the operation of the Borrower's or any
Subsidiary's  or any other  Credit  Party's  business or  facilities  or for the
generation,  handling, storage, treatment or disposal of any Hazardous Materials
which suspension, revocation or termination could reasonably be expected to have
a  Material  Adverse  Effect,  or (c) seeks to  cause,  or could  reasonably  be
expected to form the basis of a meritorious proceeding to cause, any property of
the  Borrower  or any  Subsidiary  or other  Credit  Party to be  subject to any
restrictions  on  ownership,   use,  occupancy  or  transferability   under  any
Environmental  Law which  restrictions  could  reasonably  be expected to have a
Material Adverse Effect.

         7.19.  Employment  Matters.  Except to the extent a failure to maintain
compliance  would not have a Material  Adverse  Effect or except as disclosed on
the Borrower's  Form 10-K filed with the Securities and Exchange  Commission for
the  Borrower's  Fiscal Year ended  February  24,  2001,  the  Borrower and each
Subsidiary and each other Credit Party is in compliance in all material respects
with  all  applicable  laws,  rules  and  regulations  pertaining  to  labor  or
employment  matters,  including  without  limitation  those pertaining to wages,
hours,  occupational  safety and taxation,  and there is neither pending nor, to
the  knowledge  of  the  Borrower,  threatened  any  litigation,  administrative
proceeding  or  investigation,  in respect  of such  matters  which,  if decided
adversely, could reasonably be likely, individually or in the aggregate, to have
a Material Adverse Effect.

         7.20.  RICO.  Neither the Borrower nor any Material  Subsidiary nor any
other  Credit  Party is engaged in or has engaged in any course of conduct  that
could  reasonably be expected to subject any of their  respective  properties to
any  Lien,  seizure  or other  forfeiture  under  any  criminal  law,  racketeer
influenced and corrupt  organizations  law, civil or criminal,  or other similar
laws.

         7.21. Foreign Assets Control Regulations, etc. Neither the Indebtedness
incurred  by the  Borrower  hereunder  nor the  Borrower's  use of the  proceeds
thereof will  violate the Trading with the Enemy Act, as amended,  or any of the
foreign assets control  regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto.



<PAGE>



                                  ARTICLE VIII

                              Affirmative Covenants
                              ---------------------

Until the Facility Termination Date, unless the Required Lenders shall otherwise
consent in writing,  the Borrower  will, and where  applicable,  will cause each
other Credit Party to:

         8.1. Financial Reports,  Etc. (a) As soon as practical and in any event
within 95 days after the end of each Fiscal Year of the Parent, deliver or cause
to be delivered to the Agent and each Lender (i) consolidated  balance sheets of
the Parent, the Borrower and its Subsidiaries as at the end of such Fiscal Year,
and the notes thereto,  and the related  consolidated  statements of operations,
stockholders'  equity and cash flows, and the respective notes thereto, for such
Fiscal Year,  setting forth comparative  financial  statements for and as of the
end of the preceding  Fiscal Year, all prepared in accordance  with GAAP applied
on a Consistent  Basis and containing  opinions of Ernst & Young,  or other such
independent certified public accountants selected by the Borrower and of similar
nature,  which are  unqualified as to the scope of the audit performed and as to
the "going  concern" status of the Parent and its  Subsidiaries  and without any
exception  not  reasonably  acceptable  to  the  Required  Lenders,  and  (ii) a
certificate of an Authorized Representative who also is an officer of the Parent
as to the  absence  of  any  Default  or  Event  of  Default  and  demonstrating
compliance with Section 9.1, which  certificate  shall be in the form of Exhibit
H;

         (b) as soon as practical  and in any event within 50 days after the end
of each fiscal  quarter  (except the last  fiscal  quarter of the Fiscal  Year),
deliver to the Agent and each  Lender  (i)  consolidated  balance  sheets of the
Parent,  the Borrower and its Subsidiaries as at the end of such fiscal quarter,
and the related  consolidated  statements of operations and stockholders' equity
for such  fiscal  quarter  and  statements  of cash flow for the period from the
beginning  of the  then  current  Fiscal  Year  through  the end of such  Fiscal
Quarter,  setting  forth in each case in  comparative  form the  figures for the
corresponding  periods  from the  preceding  Fiscal  Year and  accompanied  by a
certificate  of an Authorized  Representative  to the effect that such financial
statements present fairly the financial position of the Parent, the Borrower and
its Subsidiaries as of the end of such reporting period and the results of their
operations  and the  changes  in their  financial  position  for such  reporting
period,  prepared in conformity with GAAP applied on a Consistent Basis, without
notes and subject to year-end  audit  adjustments,  and (ii) a certificate of an
Authorized  Representative  as to the absence of any Default or Event of Default
and  containing  computations  for  such  quarter  comparable  to that  required
pursuant to Section 8.1(a)(ii);

         (c) together with each delivery of the financial statements required by
Section  8.1(a)(i),  deliver  to the  Agent  and each  Lender a letter  from the
Borrower's accountants specified in Section 8.1(a)(i) stating that in performing
the audit necessary to render an opinion on the financial  statements  delivered
under Section  8.1(a)(i),  they obtained no knowledge of any Default or Event of
Default by the Borrower in the  fulfillment  of the terms and provisions of this
Agreement insofar as they relate to financial matters (which at the date of such
statement  remains  uncured);  or if the accountants have obtained  knowledge of
such Default or Event of Default,  a statement  specifying the nature and period
of existence thereof;

         (d)  promptly  upon  their  becoming  available  to the  Borrower,  the
Borrower shall deliver to the Agent and each Lender a copy of (i) all regular or
special  reports or  effective  registration  statements  which the Parent,  the
Borrower  or  any  Subsidiary  shall  file  with  the  Securities  and  Exchange
Commission (or any successor thereto) or any securities  exchange,  and (ii) any
proxy statement distributed by the Parent, the Borrower or any Subsidiary to its
shareholders,  bondholders  or the  financial  community  in  general,  all such
reports  and  statements  to be  delivered  without  exhibits  unless  otherwise
reasonably requested by the Agent;

         (e)  promptly,  from time to time,  deliver or cause to be delivered to
the Agent and each Lender such other  information  regarding  Borrower's and any
Subsidiary's  operations,  business  affairs,  assets,  properties and financial
condition as the Agent or such Lender may reasonably request.

         The Agent and the  Lenders are hereby  authorized  to deliver a copy of
any such financial information delivered hereunder to the Lenders (or the parent
of any Lender or a  wholly-owned  subsidiary  of the parent of any Lender) or to
the Agent, to any regulatory authority having jurisdiction over the Agent or any
of the Lenders pursuant to any written request therefor,  or, subject to Section
12.1(d)  hereof,  to  any  other  Person  who  shall  acquire  or  consider  the
acquisition of a  participation  interest in or assignment of any Loan or Letter
of Credit  permitted by this  Agreement or as  otherwise  permitted  pursuant to
Section 12.14 hereof.

         8.2.  Maintain  Properties.  Maintain all  properties  necessary to its
operations  in  good  working  order  and  condition  (ordinary  wear  and  tear
excepted),   make  all  needed  repairs,   replacements  and  renewals  to  such
properties, and preserve, protect and maintain free from Liens (other than Liens
permitted  under  Section 9.2  hereof) all  material  trademarks,  trade  names,
patents,  copyrights,  trade secrets,  know-how, and other intellectual property
and proprietary  information (or adequate licenses thereto), in each case as are
necessary  or useful to  conduct  its  business  as  currently  conducted  or as
contemplated  hereby,  all in accordance  with  customary  and prudent  business
practices.

         8.3. Existence,  Qualification,  Etc. Do or cause to be done all things
necessary  to preserve and keep in full force and effect (a) its  existence  and
(b) all material rights, franchises and permits, except to the extent terminated
or conveyed in connection with a transaction permitted under Section 9.4 or 9.6,
and  maintain  its  license  or  qualification  to  do  business  as  a  foreign
corporation  and good  standing in each  jurisdiction  in which its ownership or
lease  of  property  or the  nature  of  its  business  makes  such  license  or
qualification  necessary  and where the failure to be so  licensed or  qualified
would be reasonably likely to have a Material Adverse Effect.

         8.4.  Regulations  and Taxes.  File all  income tax or similar  returns
required  to be filed in any  jurisdiction  and  comply  with all  statutes  and
governmental regulations and pay all taxes,  assessments,  governmental charges,
claims for labor,  supplies,  rent and any other  obligation  before they become
delinquent  which,  if unpaid,  might  become a Lien against any of its material
properties,  except  liabilities  being  contested in good faith by  appropriate
proceedings  diligently  conducted  provided that adequate reserves with respect
thereto are maintained on the books of the applicable  Person in accordance with
GAAP.

         8.5.  Insurance.  (a) Keep all of its insurable  properties  adequately
insured at all times with responsible  insurance carriers against loss or damage
by fire and other  hazards to the  extent  and in the manner as are  customarily
insured against by similar businesses owning such properties similarly situated,
(b) maintain  general public  liability  insurance at all times with responsible
insurance  carriers  against  liability  on  account  of damage to  persons  and
property and (c) maintain insurance under all applicable  workers'  compensation
laws (or in the  alternative,  maintain  required  reserves if self-insured  for
workers' compensation purposes), such policies of insurance to have such limits,
deductibles,  exclusions,  co-insurance and other  provisions  providing no less
coverages  than are  maintained by similarly  situated  entities of  established
reputation  engaged in the same or similar lines of business and such  insurance
policies to be in form reasonably  satisfactory to the Agent. The Borrower shall
use its best efforts to ensure that each of the policies of insurance  described
in this  Section  8.5  providing  material  coverage  and  policy  limits to the
Borrower  and its  Subsidiaries  on a  consolidated  basis will provide that the
insurer  shall  give the Agent not less than  thirty  (30) days'  prior  written
notice  before any such  policy  shall  terminate,  lapse,  be  cancelled  or be
materially amended.

         8.6.  True Books.  Keep true books of record and account in which full,
true and correct entries will be made of all of its dealings and transactions in
accordance  with  customary  business  practices,  and set up on its books  such
reserves as may be required by GAAP with  respect to doubtful  accounts  and all
taxes, assessments,  charges, levies and claims and with respect to its business
in general,  and include such reserves in interim as well as year-end  financial
statements.

         8.7. Right of Inspection. Permit any Person designated by the Agent, at
the Agent's expense  (unless a Default or Event or Default shall exist,  then at
the Borrower's expense),  to visit and inspect any of the properties,  corporate
books  and  financial  reports  of  the  Parent,  the  Borrower  or  any  of its
Subsidiaries and to discuss its or their affairs, finances and accounts with its
or their principal officers and independent certified public accountants, all at
such reasonable times and as often as the Agent may reasonably request.

         8.8. Observe all Laws. Conform to and duly observe all laws (including,
without  limitation,  Environmental  Laws),  rules and regulations and all other
valid requirements of any Governmental  Authority with respect to the conduct of
its  business  and obtain and  maintain  in effect all  licenses,  certificates,
permits,  franchises  and other  governmental  authorizations  necessary  to the
ownership of its properties or the conduct of its business, except to the extent
that non-compliance with such requirements or failure to obtain or maintain such
governmental  authorizations could not reasonably be expected to have a Material
Adverse Effect.

         8.9. Pay Indebtedness to Lenders and Perform Other Covenants. Make full
and timely  payment of the  principal of and interest on the Notes and all other
Obligations, whether now existing or hereafter arising.

         8.10. Covenants Extending to Other Persons.  Cause each of its Material
Subsidiaries to do with respect to itself, its business and its assets,  each of
the things required of the Borrower in Sections 8.2 through 8.9, inclusive.

         8.11.   Officer's   Knowledge   of   Default.   Upon   any   Authorized
Representative  obtaining  knowledge  of any  Default or Event of Default or any
default under any other material  obligation of the Parent,  the Borrower or any
Subsidiary,  or any event, development or occurrence which would have a Material
Adverse Effect,  cause such officer or an Authorized  Representative to promptly
deliver to the Agent written notice  thereof,  the period of existence  thereof,
and what action the Borrower proposes to take with respect thereto.

         8.12. Suits or Other  Proceedings.  Upon any Authorized  Representative
obtaining knowledge of any litigation or other proceedings  (including,  without
limitation,  any environmental proceedings) being instituted against the Parent,
the  Borrower  or any  Subsidiary  or  otherwise  questioning  the  validity  or
enforceability  of, or the ability of any Credit  Party to enter into or perform
under, the Loan Documents,  or any attachment,  levy, execution or other process
being instituted against any assets of the Borrower or any Subsidiary,  making a
claim or claims in an  aggregate  stated  amount  greater than  $25,000,000  not
otherwise  covered by insurance,  promptly  deliver to the Agent written  notice
thereof stating the nature and status of such litigation,  dispute,  proceeding,
levy, execution or other process.

         8.13. Notice of Environmental Complaint or Condition.  Promptly provide
to the  Agent  true,  accurate  and  complete  copies  of any and  all  notices,
complaints,  orders, directives, claims or citations received by the Borrower or
any  Subsidiary  relating to any material (a) violation or alleged  violation by
the Parent, the Borrower or any Subsidiary of any applicable  Environmental Law;
(b) release or threatened  release by the Borrower or any Subsidiary,  or by any
Person handling,  transporting or disposing of any Hazardous  Material on behalf
of the  Borrower or any  Subsidiary,  or at any  facility  or property  owned or
leased or operated by the Borrower or any Subsidiary, of any Hazardous Material,
except where occurring legally pursuant to a permit or license; or (c) liability
or alleged liability of the Borrower or any Subsidiary for the costs of cleaning
up, removing, remediating or responding to a release of Hazardous Materials.

         8.14. Environmental Compliance. If the Borrower or any Subsidiary shall
receive any  letter,  notice,  complaint,  order,  directive,  claim or citation
alleging  that the  Borrower  or any  Subsidiary  has  violated  any  applicable
Environmental  Laws which could  reasonably be likely to have a Material Adverse
Effect,  promptly  deliver  a copy of such  notice  to the  Agent  and use their
reasonable best efforts to remove or remedy, or cause the applicable  Subsidiary
to remove or remedy,  such violation or release or satisfy such liability within
a reasonable time.

         8.15. Indemnification. Without limiting the generality of Section 12.9,
the  Borrower  hereby  agrees to  defend,  indemnify  and hold the Agent and the
Lenders,  and any affiliate of any Lender party to a Swap  Agreement,  and their
respective officers, directors,  employees and agents, harmless from and against
any and  all  claims,  losses,  penalties,  liabilities,  damages  and  expenses
(including assessment and cleanup costs and reasonable attorneys' fees, expenses
and  disbursements)  arising directly or indirectly from, out of or by reason of
(a) the violation of any  Environmental Law by the Borrower or any Subsidiary or
with  respect to any property  owned,  operated or leased by the Borrower or any
Subsidiary or (b) the handling, storage,  transportation,  treatment,  emission,
release, discharge or disposal of any Hazardous Materials by or on behalf of the
Borrower or any Subsidiary, or on or with respect to property owned or leased or
operated by the Borrower or any Subsidiary.  The provisions of this Section 8.15
shall continue in effect notwithstanding the Facility Termination Date.

         8.16.  Further  Assurances.  At  the  Borrower's  reasonable  cost  and
expense,  upon request of the Agent or the Lenders,  duly execute and deliver or
cause to be duly executed and delivered,  to the Agent such further instruments,
documents,  certificates,  agreements and financing and continuation statements,
and do and cause to be done such further acts that may be  reasonably  necessary
or advisable in the reasonable  opinion of the Agent or the Lenders to carry out
more  effectively  the  provisions  and purposes of this Agreement and the other
Loan Documents.

         8.17. Employee Benefit Plans.

                  (a) With reasonable promptness, and in any event within thirty
         (30) days thereof,  give notice to the Agent of (a) each funding waiver
         request  filed with respect to any Pension Plan and all  communications
         received or sent by the Borrower or any ERISA Affiliate with respect to
         such request and (b) the failure of the Borrower or any ERISA Affiliate
         to make a required installment or payment under Section 302 of ERISA or
         Section  412 of the  Code  (in  the  case  of  Employee  Benefit  Plans
         regulated  by the Code or ERISA) or under any  Foreign  Benefit Law (in
         the case of Employee  Benefit  Plans  regulated by any Foreign  Benefit
         Law) by the due date;

                  (b)  Promptly  and in any event  within  fifteen  (15) days of
         becoming aware of the  occurrence or forthcoming  occurrence of any (a)
         Termination  Event or (b) nonexempt  "prohibited  transaction," as such
         term is defined in Section 406 of ERISA or Section 4975 of the Code, in
         connection  with  any  Employee  Benefit  Plan  or  any  trust  created
         thereunder,  deliver  to the  Agent  a  notice  specifying  the  nature
         thereof,  what action the Borrower or any ERISA Affiliate has taken, is
         taking or proposes to take with respect  thereto and,  when known,  any
         action  taken  or  threatened  by the  Internal  Revenue  Service,  the
         Department of Labor or the PBGC with respect thereto; and

                  (c) With reasonable promptness but in any event within fifteen
         (15) days for  purposes  of clauses  (a),  (b) and (c),  deliver to the
         Agent  copies  of (a) any  unfavorable  determination  letter  from the
         Internal  Revenue Service  regarding the  qualification  of an Employee
         Benefit Plan under Section 401(a) of the Code, (b) all notices received
         by  the  Borrower  or  any  ERISA   Affiliate  of  the  PBGC's  or  any
         Governmental  Authority's  intent to  terminate  any Pension Plan or to
         have a trustee  appointed  to  administer  any Pension  Plan,  (c) each
         Schedule B  (Actuarial  Information)  to the annual  report  (Form 5500
         Series) filed by the Borrower or any ERISA  Affiliate with the Internal
         Revenue Service with respect to each Employee  Benefit Plan and (d) all
         notices  received  by  the  Borrower  or  any  ERISA  Affiliate  from a
         Multiemployer  Plan  sponsor  concerning  the  imposition  or amount of
         withdrawal  liability  pursuant to Section 4202 of ERISA.  The Borrower
         will notify the Agent in writing  within five (5) Business  Days of the
         Borrower or any ERISA Affiliate  obtaining  knowledge or reason to know
         that the Borrower or any ERISA Affiliate has filed or intends to file a
         notice  of  intent to  terminate  any  Pension  Plan  under a  distress
         termination within the meaning of Section 4041(c) of ERISA.

         8.18. Intentionally Omitted.

         8.19. New  Subsidiaries.  Promptly,  but no later than  twenty-one (21)
days after (a) the  acquisition or creation of any  Subsidiary  which would have
been a Material Domestic  Subsidiary if included in the Borrower's  consolidated
financial  statements for the fiscal year then most recently  ended,  or (b) any
previously  existing Person becomes a Material Domestic  Subsidiary as reflected
in the then most recent financial  statements  delivered pursuant to Section 8.1
hereof,  cause to be  delivered to the Agent for the benefit of the Lenders each
of the following:

                  (a) a Facility  Guaranty  executed by such  Material  Domestic
         Subsidiary  substantially  in the form of Exhibit  I, with  appropriate
         insertions of identifying  information  and such other changes to which
         the Agent may consent in its discretion;

                  (b) an opinion of  counsel to the  Subsidiary  dated as of the
         date of delivery of the Facility  Guaranty provided for in this Section
         8.19 and addressed to the Agent and the Lenders,  in form and substance
         reasonably   acceptable  to  the  Agent  (which   opinion  may  include
         assumptions and  qualifications of similar effect to those contained in
         the opinions of counsel delivered  pursuant to Section 6.1(a)),  to the
         effect that:

                           (i)  such  Subsidiary  is  duly  organized,   validly
                  existing  and in  good  standing  in the  jurisdiction  of its
                  formation,  has the  requisite  power and authority to own its
                  properties  and  conduct  its  business as then owned and then
                  conducted and proposed to be conducted and to execute, deliver
                  and perform the  Facility  Guaranty  described in this Section
                  8.19 to which  such  Subsidiary  is a  signatory,  and is duly
                  qualified to transact  business  and is in good  standing as a
                  foreign  corporation or partnership in each other jurisdiction
                  in which the character of the properties  owned or leased,  or
                  the business carried on by it, requires such qualification and
                  the failure to be so qualified  would  reasonably be likely to
                  result in a Material Adverse Effect;

                           (ii) the execution,  delivery and  performance of the
                  Facility Guaranty described in this Section 8.19 to which such
                  Subsidiary  is a signatory  have been duly  authorized  by all
                  requisite  corporate  or  partnership  action  (including  any
                  required shareholder or partner approval),  such agreement has
                  been duly executed and delivered and constitutes the valid and
                  binding agreement of such Subsidiary, enforceable against such
                  Subsidiary in accordance with its terms, subject to the effect
                  of  any   applicable   bankruptcy,   moratorium,   insolvency,
                  reorganization    or   other   similar   law   affecting   the
                  enforceability  of  creditors'  rights  generally  and  to the
                  effect of general principles of equity (whether  considered in
                  a proceeding at law or in equity);

                  (c)  current  copies  of  the  Organizational   Documents  and
         Operating  Documents of such Material Domestic  Subsidiary,  minutes of
         duly called and conducted  meetings (or duly effected  consent actions)
         of the Board of Directors,  partners, or appropriate committees thereof
         (and, if required by such Organizational Documents, Operating Documents
         or applicable law, of the shareholders) of such Subsidiary  authorizing
         the actions and the  execution  and delivery of documents  described in
         this Section 8.19.

         8.20.  Use of  Proceeds.  Use the  proceeds of the Loans solely for the
purposes specified in Section 2.2 hereof.



<PAGE>



                                   ARTICLE IX

                               Negative Covenants
                               ------------------

Until the Facility Termination Date, unless the Required Lenders shall otherwise
consent in  writing,  the  Borrower  will not,  nor will it permit any  Material
Subsidiary or the Parent to:

         9.1. Financial Covenants.

         (a)   Consolidated    Shareholders'    Equity.    Permit   Consolidated
Shareholders'  Equity to be less than (i)  $175,000,000  from the  Closing  Date
until (but  excluding)  the last day of the second fiscal quarter of the current
Fiscal Year (the  "Closing Date  Quarter"),  and (ii) as at the last day of each
fiscal quarter of the Borrower  commencing with the third quarter of the current
Fiscal  Year until (but  excluding)  the last day of the next  following  fiscal
quarter of the Borrower, the sum of (A) the amount of Consolidated Shareholders'
Equity  required to be maintained  pursuant to this Section 9.1(a) as at the end
of the immediately preceding fiscal quarter (or, in the case of the Closing Date
Quarter,  required to be  maintained  as of the Closing  Date),  plus (B) 50% of
Consolidated Net Income (with no reduction for net losses during any period) for
the fiscal  quarter  of the  Borrower  ending on such day,  plus (C) 100% of the
aggregate  amount of all increases in the stated capital and additional  paid-in
capital accounts of the Borrower  resulting from the issuance,  sale or exchange
of equity  securities  or other  capital  investments.  Any increase  calculated
pursuant hereto shall be determined based upon financial statements delivered in
accordance with Section 8.1(a) hereof; provided, however, such increase shall be
deemed  effective as of the first day of the Fiscal Year in which such financial
statements are delivered.

         (b) Consolidated  Total Debt Ratio.  Permit the Consolidated Total Debt
Ratio as of the end of any Four-Quarter Period to be greater than 2.25 to 1.00.

         (c)  Consolidated  Interest  Coverage  Ratio.  Permit the  Consolidated
Interest Coverage Ratio as of the end of any Four-Quarter Period to be less than
5.00 to 1.00.

         (d) Total  Subsidiary  Indebtedness.  Permit at any time the  aggregate
amount of Indebtedness of the Borrower's  Subsidiaries  (other than endorsements
of negotiable  instruments  for deposit or collection or similar  transaction in
the  ordinary  course  of  business)  to be  greater  than  the  lesser  of  (i)
$50,000,000  and (ii) 33% of  Consolidated  EBITDA for the  Four-Quarter  Period
ending on (or most recently prior to) the date of calculation thereof.

         9.2. Liens.  Incur, create or permit to exist any Lien, charge or other
encumbrance of any nature  whatsoever with respect to any property or assets now
owned or hereafter acquired by the Borrower or any Subsidiary, including without
limitation any capital stock of the Borrower or any of its  Subsidiaries,  other
than

                  (a) Liens  created in favor of the Agent and the  Lenders,  or
         otherwise  existing  as of the date hereof and as set forth in Schedule
         7.7;

                  (b) Liens imposed by law for taxes,  assessments or charges of
         any  Governmental  Authority  for claims not yet due or which are being
         contested  in  good  faith  by   appropriate   proceedings   diligently
         conducted,  and  with  respect  to  which  adequate  reserves  or other
         appropriate provisions are being maintained in accordance with GAAP;

                  (c)  statutory  Liens of  landlords  and  Liens  of  carriers,
         warehousemen,  mechanics, materialmen and other Liens imposed by law or
         created in the ordinary  course of business and for amounts not yet due
         or which are being  contested in good faith by appropriate  proceedings
         diligently  conducted  and with respect to which  adequate  reserves or
         other  appropriate  provisions are being  maintained in accordance with
         GAAP;

                  (d) Liens incurred or deposits made in the ordinary  course of
         business (including, without limitation, surety bonds and appeal bonds)
         in connection with workers'  compensation,  unemployment  insurance and
         other types of social security benefits or to secure the performance of
         tenders,  bids,  leases,  contracts  (other than for the  repayment  of
         Indebtedness),  statutory  obligations and other similar obligations or
         arising as a result of progress payments under government contracts;

                  (e)  easements  (including,  without  limitation,   reciprocal
         easement agreements and utility agreements),  rights-of-way, covenants,
         consents, reservations,  encroachments, variations and zoning and other
         restrictions,  charges or encumbrances (whether or not recorded), which
         do not interfere  materially with the ordinary  conduct of the business
         of the Borrower or any Material  Subsidiary and which do not materially
         detract  from  the  value  of the  property  to which  they  attach  or
         materially  impair the use  thereof  to the  Borrower  or any  Material
         Subsidiary;

                  (f) Liens on assets of the Borrower or any of its Subsidiaries
         and on the  capital  stock  of any of its  Subsidiaries,  provided  the
         aggregate fair market value (as reasonably  determined by the Borrower)
         of all assets and such capital  stock subject to such pledges shall not
         exceed $25,000,000;

                  (g)  deposits  to  secure  the  performance  of  bids,   trade
         contracts  (other than for borrowed  money),  contracts with respect to
         the Core Business,  leases,  statutory  obligations,  surety and appeal
         bonds,  performance bonds and other  obligations of a like nature,  and
         rights of usufruct and similar  rights to continued use and  possession
         of lottery equipment or other property in favor of lottery authorities,
         in each case incurred in the ordinary course of business;

                  (h)  Liens  securing  Indebtedness  of the  Borrower  and  its
         Subsidiaries  incurred to finance the  acquisition  of fixed or capital
         assets,  including  any  items of  equipment  acquired  after  the date
         hereof,  and refinancings  thereof,  provided that (i) such Liens shall
         attach  concurrently  with or within 30 days of the acquisition of such
         fixed or capital  assets or items of equipment,  (ii) such Liens do not
         at any time encumber any property  other than the property  financed by
         such Indebtedness,  (iii) the amount of Indebtedness secured thereby is
         not increased and (iv) the principal amount of Indebtedness  secured by
         any such Lien shall at no time  exceed  100% of the  original  purchase
         price of such property at the time it was acquired;

                  (i) Liens arising as a result of the use of commercial letters
         of credit to finance the purchase price of goods in the ordinary course
         of business in transactions not otherwise prohibited hereunder in favor
         of the bank issuing such commercial letter of credit and attaching only
         on such goods so financed; and

                  (j) Liens  arising  out of  judgments  or awards in respect of
         which the Parent, the Borrower or any of its Subsidiaries shall in good
         faith be prosecuting an appeal or proceedings for review and in respect
         of which it shall have secured a subsisting  stay of execution  pending
         such appeal or proceedings for review,  provided that it shall have set
         aside on its books adequate  reserves,  to the extent  required by GAAP
         applied on a Consistent Basis, with respect to such judgment or award.

         9.3.   Guaranties.   Incur,   create,   or  assume  any  guaranties  of
non-consolidated  Indebtedness  in an  aggregate  principal  amount in excess of
$50,000,000.

         9.4.  Disposition of Assets. The Borrower will not, and will not permit
any Guarantor to,  directly or indirectly,  sell,  lease,  transfer or otherwise
dispose  of  (collectively  a  "Disposition")  any of its  properties  or assets
unless, after giving effect to such proposed Disposition, the aggregate net book
value of all assets  that were the  subject of a  Disposition  during the twelve
calendar months immediately preceding the date of such proposed Disposition (the
"Disposition  Date") does not exceed 15% of Consolidated Assets as at the end of
the  quarterly  fiscal  period of the Borrower  ended  immediately  prior to the
Disposition  Date. Any  Disposition of shares of stock of any Subsidiary  shall,
for  purposes  of this  Section,  be  valued at an  amount  that  bears the same
proportion  to the book  value of the  total  assets of such  Subsidiary  as the
number of such shares bears to the total number of issued and outstanding shares
of  stock of such  Subsidiary.  Notwithstanding  the  foregoing,  the  following
Dispositions shall not be taken into account under this Section 9.4:

                  (a)  any  Disposition  of  inventory,   equipment,   fixtures,
         supplies or materials  made in the ordinary  course of business at fair
         value;

                  (b)  any  Disposition  to  the  Parent  or  to a  wholly-owned
         Material Domestic Subsidiary; and

                  (c) any  Disposition  the net  proceeds  of which are  applied
         within 180 days of the related Disposition Date to (x) the repayment of
         Consolidated  Total  Indebtedness  (and any associated  premium) of the
         Borrower or such Guarantor or (y) the acquisition of assets (other than
         current  assets) to be used in the  ordinary  course of business of the
         Borrower or such Guarantor.

         9.5. Investments;  Acquisitions.  Purchase, own, invest in or otherwise
acquire,  directly  or  indirectly,  any  stock  or other  securities  or all or
substantially  all of the assets of, or make  investments  in or permit to exist
any  interest  whatsoever  in, any other  Person or permit to exist any loans or
advances to, or Capital  Expenditures  with respect to, any Person,  except that
Borrower and its Subsidiaries may maintain investments or invest in

                  (a) Eligible Securities;

                  (b) other securities for which the aggregate purchase price or
         initial investment for all such securities does not exceed $10,000,000;

                  (c)  investments  existing  as of the date  hereof  and either
         disclosed on the financial  statements of the Parent,  the Borrower and
         its Subsidiaries  referred to in Section 7.6 hereof or individually and
         in the  aggregate  not  required  to be  disclosed  in  such  financial
         statements or the notes thereto;

                  (d) accounts  receivable  arising and trade credit  granted in
         the  ordinary  course  of  business  and  any  securities  received  in
         satisfaction  or  partial   satisfaction  thereof  in  connection  with
         accounts  of  financially  troubled  Persons to the  extent  reasonably
         necessary in order to prevent or limit loss;

                  (e) key man  life  insurance  with  respect  to its  executive
         officers;

                  (f) investments in, advances to or Capital  Expenditures  with
         respect to any Person  other than those  Persons  described  in clauses
         (a),  (b),  (c),  (d),  (e),  (g),  (h),  (i), (j) and (k) hereof in an
         aggregate Investment Commitment at any time not to exceed $150,000,000;
         provided that no single or series of related  investments,  advances or
         Capital  Expenditures  permitted under this Section 9.5(f) shall exceed
         at any time an Investment Commitment of $75,000,000;

                  (g) investments in, advances to or Capital  Expenditures  with
         respect to the Borrower or any Subsidiary  engaged in the Core Business
         and loans or advances by the Passive Investment Company to the Borrower
         or any Guarantor in connection with the Core Business;

                  (h) loans and advances to officers, directors and employees of
         the  Borrower  or  its  Subsidiaries  for  travel,   entertainment  and
         relocation  expenses and other business  purposes,  all in the ordinary
         course of business;

                  (i)  investments of the Borrower under any agreement  creating
         Rate Hedging Obligations;

                  (j) investments  representing  stock or obligations  issued to
         the Parent,  the Borrower or any of its  Subsidiaries  in settlement of
         claims  against  any  other  Person  by  reason  of  a  composition  or
         readjustment of debt or a reorganization of any debtor of the Parent or
         such Subsidiary; and

                  (k) other  loans,  advances  and  investments  in an aggregate
         principal amount at any time outstanding not to exceed $5,000,000.

         9.6. Merger or  Consolidation.  (a) Consolidate  with or merge into any
other Person,  or (b) permit any other Person to consolidate  with or merge into
it, provided,  however,  so long as no Default or Event of Default exists at the
time of or would result  therefrom (i) any  Subsidiary may merge or transfer all
or substantially  all of its assets into or consolidate with the Borrower or any
wholly-owned Subsidiary,  and (ii) any Person may merge with the Borrower if the
Borrower shall be the survivor thereof; provided,  however,  notwithstanding the
foregoing,  no Material  Domestic  Subsidiary may consolidate with or merge into
any Subsidiary unless such Material Domestic  Subsidiary is the survivor of such
consolidation or merger or the Subsidiary is also a Material Domestic Subsidiary
and no Default or Event of  Default  shall  exist  after  giving  effect to such
merger or consolidation.

         9.7. Dividends,  Redemptions and Other Payments.  If (a) any Default or
Event of Default  shall exist  under  Sections  9.1 (a),  (b) or (c) hereof or a
Default  or Event of  Default  under any such  section  would be  created by the
declaration or payment of cash dividends or any other payment or distribution of
cash on  account  of its  capital  stock or the  purchase,  redemption  or other
retirement of its capital stock,  or (b) an Event of Default has occurred and is
continuing,  declare  or pay any cash  dividends  or make any other  payment  or
distribution of cash on any shares of stock of any class of the Borrower, now or
hereafter outstanding,  or purchase,  redeem or otherwise retire any such shares
in  consideration  of cash or apply or set apart any of their assets therefor or
make any other  distribution  (by redemption of capital or otherwise) in respect
of  any  such  shares  in  consideration  of  cash,  or  agree  to do any of the
foregoing.

         9.8. Transactions with Affiliates. Enter into any transaction after the
Closing  Date,  including,  without  limitation,  the purchase,  sale,  lease or
exchange of property,  real or personal,  or the rendering of any service,  with
any Affiliate (other than a Guarantor),  except (a) that such Persons may render
services to the Borrower or its  Subsidiaries for compensation at the same rates
generally paid by Persons engaged in the same or similar businesses for the same
or  similar  services  and (b) in the  ordinary  course of and  pursuant  to the
reasonable  requirements  of  the  Borrower's  (or  any  Subsidiary's)  business
consistent with past practice of the Borrower and its Subsidiaries and upon fair
and reasonable  terms no less favorable to the Borrower (or any Subsidiary) than
would be obtained in a comparable arm's-length  transaction with a Person not an
Affiliate.

         9.9.  Benefit  Plans.  With  respect  to  all  Employee  Benefit  Plans
maintained by the Borrower or any ERISA Affiliate:

                  (a)  terminate  any of such  Employee  Benefit  Plans so as to
         incur any liability to the PBGC established pursuant to ERISA or to any
         other Person exercising  similar duties and functions under any Foreign
         Benefit Law where such termination  would be reasonably  likely to have
         or would have a Material Adverse Effect;

                  (b) engage in any non-exempt prohibited  transaction involving
         any of such  Employee  Benefit  Plans or any trust  created  thereunder
         which would  subject the  Borrower  or an ERISA  Affiliate  to a tax or
         penalty or other  liability on  prohibited  transactions  imposed under
         Code Section 4975 or ERISA or under any Foreign Benefit Law;

                  (c)  fail  to  pay to  any  such  Employee  Benefit  Plan  any
         contribution which it is obligated to pay under the terms of such plan;

                  (d)  allow  or  suffer  to  exist  any   accumulated   funding
         deficiency,  whether or not waived,  with respect to any such  Employee
         Benefit Plan;

                  (e) allow or suffer to exist any  occurrence  of a  reportable
         event or any other event or condition,  which  presents a material risk
         of termination by the PBGC, or to any other Person  exercising  similar
         duties  and  functions  under  any  Foreign  Benefit  Law,  of any such
         Employee Benefit Plan that is a Single Employer Plan, which termination
         could result in any liability to the PBGC or under any Foreign  Benefit
         Law; or

                  (f)  incur  any  withdrawal  liability  with  respect  to  any
         Multiemployer  Plan which would be  reasonably  likely to have or would
         have a Material Adverse Effect.

         9.10.  Fiscal  Year.  Change its Fiscal Year without the consent of the
Required Lenders,  which consent shall not be unreasonably  withheld or delayed;
provided,  however, that each of the Lenders agrees that if an amendment to this
Agreement is required solely to make  adjustments to the financial  covenants in
Section 9.1 hereof as a result of such change in Fiscal  Year,  no fees shall be
charged to the Borrower for such amendment.

         9.11. Dissolution,  Etc. Wind up, liquidate or dissolve (voluntarily or
involuntarily)  or commence or suffer any  proceedings  seeking any such winding
up,  liquidation  or  dissolution,  except in connection  with (a) the merger or
consolidation of Material  Subsidiaries  into each other or into the Borrower as
permitted  pursuant to Section 9.6 hereof and (b) the declaration of bankruptcy,
liquidation and dissolution of Subsidiaries which are not Material Subsidiaries.

         9.12.  Limitations  on Sales and  Leasebacks.  Enter  into any Sale and
Leaseback Transaction as lessee unless:

                  (a) such  Sale  and  Leaseback  Transaction  is  between  such
         Material  Subsidiary  and the  Borrower  or the  Parent,  between  such
         Material Subsidiary and any wholly-owned Material Subsidiary or between
         the Borrower or the Parent and any wholly-owned Material Subsidiary;

                  (b) the  proceeds  received by the  Borrower or such  Material
         Subsidiary  from  such Sale and  Leaseback  Transaction  as lessee  are
         applied  within  180  days of the date of such  transaction  to (x) the
         prepayment  of  Consolidated  Total  Indebtedness  (and any  associated
         premium)  of the  Borrower  or  such  Material  Subsidiary  or (y)  the
         acquisition  of assets  (other than  current  assets) to be used in the
         ordinary   course  of  business  of  the  Borrower  or  such   Material
         Subsidiary, as the case may be; or

                  (c) at the time of  entering  into  such  Sale  and  Leaseback
         Transaction and immediately after giving effect thereto,  Priority Debt
         shall not exceed 15% of Consolidated Assets.

         9.13. Change in Control.  Cause, suffer or permit to exist or occur any
Change of Control.

         9.14. Transactive  Corporation.  Permit Transactive Corporation to have
(a) total assets equal to or greater than 5% of Consolidated  Assets at any time
or (b) profits equal to or greater than 5% of Consolidated  Total Profits Before
Tax at any time unless  Transactive  Corporation  shall have been  designated  a
Material Subsidiary  hereunder  (notwithstanding  the exclusion contained in the
definition  thereof) by the  Borrower  and shall have  provided to the Agent all
Loan Documents required of a Material Subsidiary hereunder.

         9.15. Synthetic Lease Obligations.  Create, incur or permit to exist at
any time  Synthetic  Lease  Obligations  in an  aggregate  amount  in  excess of
$50,000,000.



<PAGE>



                                   ARTICLE X

                       Events of Default and Acceleration
                       ----------------------------------

         10.1.  Events of Default.  If any one or more of the  following  events
(herein called "Events of Default")  shall occur for any reason  whatsoever (and
whether such  occurrence  shall be voluntary or  involuntary or come about or be
effected by operation of law or pursuant to or in compliance  with any judgment,
decree  or  order  of  any  court  or  any  order,  rule  or  regulation  of any
Governmental Authority), that is to say:

                  (a) if default  shall be made in the due and punctual  payment
         of the  principal  of  any  Loan,  Reimbursement  Obligation  or  other
         Obligation,  when and as the  same  shall  be due and  payable  whether
         pursuant to any  provision  of Article II or Article III or Article IV,
         at maturity, by acceleration or otherwise; or

                  (b) if default  shall be made in the due and punctual  payment
         of any amount of  interest  on any Loan,  Reimbursement  Obligation  or
         other  Obligation  and such amount  remains unpaid for five (5) or more
         days or of any fees or other amounts payable to the Lenders,  the Agent
         or the Issuing  Bank under the Loan  Documents on the date on which the
         same shall be due and payable and such amounts remain unpaid for thirty
         (30) or more days; or

                  (c) if default shall be made in the  performance or observance
         of any  covenant  set forth in Sections  8.3(a),  8.11,  8.12,  8.20 or
         Sections 9.1, 9.2, 9.3, 9.4, 9.5, 9.6, 9.7, 9.11, 9.12 or 9.13; or

                  (d)  if  a  default  shall  be  made  in  the  performance  or
         observance  of,  or  shall  occur  under  any  covenant,  agreement  or
         provision contained in this Agreement, any Facility Guaranty, the Notes
         or any other Loan  Documents  (other than as  described in clauses (a),
         (b) or (c) above) and such default  shall  continue (i) for thirty (30)
         or more  days  after the  receipt  of  notice  of such  default  by the
         Authorized  Representative  from the  Agent or any  Lender  or (ii) for
         forty-five (45) days after an Authorized  Representative  becomes aware
         of such  default,  or if such default is of a type that cannot be cured
         within  thirty (30) days or forty-five  (45) days,  as applicable  (but
         reasonably can be cured within ninety (90) days),  and the Parent,  the
         Borrower or any of its  Subsidiaries  is  diligently  and in good faith
         attempting to cure such default, such default shall continue unremedied
         for a  period  of  ninety  (90) or  more  days  after  such  notice  or
         awareness, or if an Event of Default shall occur under any of the other
         Loan Documents or in any instrument or document  evidencing or creating
         any obligation,  guaranty, or Lien in favor of the Agent or the Lenders
         or delivered to the Agent or the Lenders in connection with or pursuant
         to  this  Agreement  or  any  of the  Obligations,  or if any  material
         provision  of any Loan  Document  ceases to be in full force and effect
         (other than by reason of termination  by the Agent),  or if without the
         written consent of the Agent, any material  provision of this Agreement
         or any other  Loan  Document  shall be  disaffirmed,  or the  validity,
         binding  nature or  enforceability  thereof  shall be  contested by the
         Borrower,  the Parent or any Guarantor,  or this Agreement or any other
         Loan Document shall terminate, be terminable or be terminated or become
         void  or  unenforceable  for  any  reason  whatsoever  (other  than  in
         accordance  with its terms in the  absence  of  default or by reason of
         termination by the Agent or any Lender); or

                  (e) if a default  (whether as  principal  or as  guarantor  or
         other  surety)  shall  occur,  which is not  waived and as to which any
         applicable  grace  period  has  expired,  (i)  in  the  payment  of any
         principal,  interest,  premium  or other  amounts  with  respect to any
         Indebtedness  (other than the  Obligations)  of the  Borrower or of any
         Subsidiary  in an amount  not less than  $30,000,000  in the  aggregate
         outstanding,  or (ii) in the performance,  observance or fulfillment of
         any term or covenant  contained in any agreement or instrument under or
         pursuant to which any such Indebtedness may have been issued,  created,
         assumed,  guaranteed or secured by the Borrower or any Subsidiary,  and
         if such  default  shall permit the holder of any such  Indebtedness  to
         accelerate  the maturity  thereof or (iii) under the Note  Agreement or
         the notes thereunder (as defined in the Note Agreement); or

                  (f) if any representation, warranty or other statement of fact
         contained in any Loan Document or in any writing,  certificate,  report
         or statement at any time  furnished to the Agent or any Lender by or on
         behalf of the  Borrower  or any other  Credit  Party  pursuant to or in
         connection  with any Loan  Document,  or  otherwise,  shall be false or
         misleading  in any material  respect when given or made or deemed given
         or made; or

                  (g) if the  Borrower,  the Parent or any  Material  Subsidiary
         shall (i) fail to pay,  admit in  writing  its  inability  to pay or be
         unable to pay its debts  generally  as they become due,  (ii) file,  or
         consent by answer or otherwise to the filing  against it of, a petition
         for relief or  reorganization  or  arrangement or any other petition in
         bankruptcy,  for  liquidation or to take  advantage of any  insolvency,
         reorganization,  bankruptcy,  receivership or similar law,  domestic or
         foreign;  make an assignment  for the benefit of its  creditors;  (iii)
         commence a  proceeding  for the  appointment  of a  receiver,  trustee,
         liquidator or conservator of itself or of the whole or any  substantial
         part  of  its  property;   (iv)  file  a  petition  or  answer  seeking
         reorganization  or  arrangement  or similar  relief  under the  Federal
         bankruptcy laws or any other applicable  Federal,  state or foreign law
         or statute; (v) be adjudicated as insolvent or to be liquidated or (vi)
         take any corporate action for the purpose of any of the foregoing; or

                  (h) if a court of competent jurisdiction shall enter an order,
         judgment or decree ordering the dissolution,  winding-up or liquidation
         of,  or  appointing  a  custodian,  receiver,  trustee,  liquidator  or
         conservator of, the Borrower,  the Parent or any Material Subsidiary or
         of the whole or any substantial  part of its properties and such order,
         judgment  or decree  continues  unstayed  and in effect for a period of
         sixty (60) days, or approve a petition filed against the Borrower,  the
         Parent or any Material Subsidiary seeking reorganization or arrangement
         or  similar  relief  under  the  Federal  bankruptcy  laws or any other
         applicable  law or statute of the United States of America or any state
         or foreign  country,  province or other  political  subdivision,  which
         petition is not  dismissed  within  sixty (60) days;  or if,  under the
         provisions  of any other law for the relief or aid of debtors,  a court
         of  competent  jurisdiction  shall  assume  custody  or  control of the
         Borrower,  the Parent or any Material Subsidiary or of the whole or any
         substantial  part of its properties,  which control is not relinquished
         within sixty (60) days; or if there is commenced  against the Borrower,
         the  Parent or any  Material  Subsidiary  any  proceeding  or  petition
         seeking reorganization, arrangement or similar relief under the Federal
         bankruptcy  laws or any other  applicable  law or statute of the United
         States of America or any state or foreign  country,  province  or other
         political  subdivision which proceeding or petition remains undismissed
         for a period of sixty (60) days; or if the Borrower,  the Parent or any
         Material  Subsidiary  takes any action to  indicate  its  consent to or
         approval of any such proceeding or petition; or

                  (i) if (i) any  judgment  where  the  amount  not  covered  by
         insurance (or the amount as to which the insurer  denies  liability) is
         in excess of $30,000,000 is rendered  against the Borrower,  the Parent
         or any  Subsidiary,  or (ii)  there is any  attachment,  injunction  or
         execution   against  any  of  the  Borrower's,   the  Parent's  or  any
         Subsidiary's  properties for any amount in excess of  $30,000,000;  and
         such  judgment,  attachment,  injunction or execution  remains  unpaid,
         unstayed,  undischarged,  unbonded or undismissed for a period of sixty
         (60) days; or

                  (j) if the Parent,  the Borrower or any Subsidiary shall cease
         all or any part of its  operations  and such  cessation  is  reasonably
         likely to have a Material Adverse Effect; or

                  (k) if (i) the Borrower or any ERISA Affiliate shall engage in
         any prohibited  transaction  (as described in Section  9.9(b)  hereof),
         which  is not  subject  to a  statutory  or  administrative  exemption,
         involving  any  Employee  Benefit  Plan of the  Borrower  or any  ERISA
         Affiliate,  (ii) any accumulated  funding deficiency (as referred to in
         Section 9.9(d) hereof), whether or not waived, shall exist with respect
         to any Single Employer Plan,  (iii) a reportable  event (as referred to
         in Section 9.9(e) hereof) (other than a reportable  event for which the
         statutory notice requirement to the PBGC has been waived by regulation)
         shall occur with  respect to, or  proceeding  shall  commence to have a
         trustee appointed,  or a trustee shall be appointed to administer or to
         terminate,   any  Single  Employer  Plan,  which  reportable  event  or
         institution  or  proceedings  is,  in  the  reasonable  opinion  of the
         Required  Lenders,  likely to result in the  termination of such Single
         Employer  Plan for  purposes  of Title IV of ERISA,  and in the case of
         such a reportable event, the continuance of such reportable event shall
         be unremedied for sixty (60) days after notice of such reportable event
         pursuant to Section 4043(a),  (c) or (d) of ERISA is given, as the case
         may be, (iv) any Single  Employer Plan shall  terminate for purposes of
         Title IV of ERISA, and such termination results in a material liability
         of the Borrower or any ERISA  Affiliate to such Single Employer Plan or
         the PBGC,  (v) the Borrower or any  Subsidiary  shall  withdraw  from a
         Multiemployer  Plan for purposes of Title IV of ERISA, and, as a result
         of any such withdrawal, the Borrower or any ERISA Affiliate shall incur
         withdrawal  liability  to such  Multiemployer  Plan,  or (vi) any other
         material event or condition  shall occur or exist;  and in each case in
         clauses  (i)  through  (vi) of this  Section  10.1(k),  such  event  or
         condition,  together with all other such events or conditions,  if any,
         could  reasonably  be  expected  to subject  the  Borrower or any ERISA
         Affiliate to any material tax, penalty or other liabilities; or

                  (l) if the Borrower or any Subsidiary  shall breach any of the
         material  terms or  conditions  of any Swap  Agreement  and such breach
         shall  continue  beyond  any grace  period,  if any,  relating  thereto
         pursuant to its terms; or

                  (m) if the Parent shall (i) cease to exist other than due to a
         merger  into the  Borrower,  (ii)  conduct any  business  other than as
         currently  conducted  in  connection  with its  ownership of the common
         stock of the  Borrower,  (iii)  make  any  investment,  acquisition  or
         expenditure  other than for daily  operating  expenses of its  business
         presently  conducted or (iv) incur any  Indebtedness for Money Borrowed
         after the Closing Date; provided,  however, that the Parent may conduct
         acquisitions  of entities in which shares of its capital  stock are all
         or a portion of the  consideration  paid and upon the  consummation  of
         which the acquired  entity is  substantially  simultaneously  merged or
         consolidated  into the Borrower or a Subsidiary in accordance  with the
         terms of this Agreement;

                  (n) if there shall occur and not be waived an Event of Default
         as defined in any of the other Loan Documents;

then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived,

                  (A) either or both of the following  actions may be taken: the
         Agent  may  with  the  consent  of  the  Required  Lenders,  and at the
         direction  of, the Required  Lenders  shall,  (i) declare the Revolving
         Credit  Commitment,  the Letter of Credit Commitment and any obligation
         of the Lenders to make Revolving  Loans, and of Bank of America to make
         Swing  Line  Loans  and the  Issuing  Bank to issue  Letters  of Credit
         terminated,  whereupon  the  obligation  of each Lender to make further
         Revolving  Loans,  of Bank of America to make further Swing Line Loans,
         and  of the  Issuing  Bank  to  issue  additional  Letters  of  Credit,
         hereunder  shall terminate  immediately,  and (ii) declare by notice to
         the Borrower any or all of the  Obligations to be  immediately  due and
         payable,  and the same,  including all interest accrued thereon and all
         other  obligations of the Borrower to the Agent and the Lenders,  shall
         forthwith  become  immediately  due and  payable  without  presentment,
         demand,  protest,  notice or other  formality of any kind, all of which
         are  hereby  expressly  waived,  anything  contained  herein  or in any
         instrument evidencing the Obligations to the contrary  notwithstanding;
         provided, however, that notwithstanding the above, if there shall occur
         an Event of Default  under clause (g) or (h) above,  then the Revolving
         Credit   Commitment  and  the  Letter  of  Credit  Commitment  and  the
         obligation of the Lenders to make Revolving  Loans,  of Bank of America
         to make Swing Line Loans,  and of the Issuing Bank to issue  Letters of
         Credit hereunder shall  automatically  terminate and any and all of the
         Obligations  shall be immediately due and payable without the necessity
         of any  action by the Agent or the  Required  Lenders  or notice to the
         Agent or the Lenders;

                  (B) The  Borrower  shall,  upon  demand  of the  Agent  or the
         Required Lenders,  or immediately  without notice,  demand or any other
         action  if an  Event of  Default  under  clause  (g) or (h)  above  has
         occurred,  deposit cash with the Agent in an amount equal to the amount
         of any Letter of Credit  Outstandings,  as collateral  security for the
         repayment  of any future  drawings  or payments  under such  Letters of
         Credit and the Borrower shall  forthwith  deposit and pay such amounts,
         and such amounts shall be held by the Agent  pursuant to the terms of a
         cash collateral agreement acceptable to the Lenders; and

                  (C) the Agent and each of the  Lenders  shall  have all of the
         rights and  remedies  available  under the Loan  Documents or under any
         applicable law.

         10.2.  Agent to Act.  In case any one or more  Events of Default  shall
occur and not have been  waived,  subject to the  provisions  of Article XI, the
Agent with the consent of the Required Lenders, may, and at the direction of the
Required Lenders shall, proceed to protect and enforce the rights or remedies of
the  Lenders  and the Agent  hereunder  either by suit in equity or by action at
law, or both, whether for the specific performance of any covenant, agreement or
other provision  contained  herein or in any other Loan Document,  or to enforce
the payment of the Obligations or any other legal or equitable right or remedy.

         10.3.  Cumulative  Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained  herein or in any other Loan Document,  and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.

         10.4.  No Waiver.  No course of dealing  between the  Borrower  and any
Lender or the  Agent or any  failure  or delay on the part of any  Lender or the
Agent in exercising  any rights or remedies under any Loan Document or otherwise
available  to it shall  operate  as a waiver of any  rights or  remedies  and no
single or partial  exercise of any rights or remedies  shall operate as a waiver
or preclude  the  exercise of any other  rights or remedies  hereunder or of the
same right or remedy on a future occasion.

         10.5.  Allocation of Proceeds.  If an Event of Default has occurred and
not been waived, and the maturity of the Notes has been accelerated  pursuant to
Article X hereof,  all payments  received by the Agent hereunder,  in respect of
any principal of or interest on the  Obligations or any other amounts payable by
the Borrower hereunder, shall be applied by the Agent in the following order:

                  (a) amounts due to the Agent, the Lenders and the Issuing Bank
         pursuant to Sections 3.2(g), 3.2(h), 4.6(a), 4.6(b), 4.6(c), 8.15, 12.5
         and 12.9;

                  (b) amounts due to the Agent and the Issuing Bank  pursuant to
         Section 4.6(d);

                  (c)  payments  of  interest  on Loans,  Swing  Line  Loans and
         Reimbursement Obligations, to be applied for the ratable benefit of the
         Lenders  (with  amounts  payable in respect of Swing Line  Outstandings
         being included in such calculation and paid to Bank of America);

                  (d)  payments  of  principal  of Loans,  Swing  Line Loans and
         Reimbursement Obligations, to be applied for the ratable benefit of the
         Lenders  (with  amounts  payable in respect of Swing Line  Outstandings
         being included in such calculation and paid to Bank of America);

                  (e)  payments  of cash  amounts  to the  Agent in  respect  of
         outstanding Letters of Credit pursuant to Section 10.1(B);

                  (f)  payments  of all other  amounts due under any of the Loan
         Documents,  if any,  to be  applied  for  the  ratable  benefit  of the
         recipients,  including  amounts  due to any of  the  Lenders  or  their
         affiliates in respect of Obligations  consisting of  liabilities  under
         any Swap Agreement with any of the Lenders or their affiliates on a pro
         rata basis according to the amounts owed; and

                  (g) any surplus  remaining  after  application as provided for
         herein,  to the Borrower or otherwise as may be required by  applicable
         law.

<PAGE>

                                   ARTICLE XI

                                    The Agent
                                    ---------

         11.1.  Appointment and  Authorization  of Agent. (a) Each Lender hereby
irrevocably  (subject to Section 11.9)  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 herein 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  or
participant,  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 terms "agent" or "Agent" herein and in
the other Loan  Documents 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 Bank shall act on behalf of the Lenders with respect to
any Letter 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
Required  Lenders to act for the Issuing  Bank with respect  thereto;  provided,
however, that the Issuing Bank shall have all of the benefits and immunities (i)
provided  to the Agent in this  Article  XI with  respect  to any acts  taken or
omissions  suffered by the Issuing  Bank in  connection  with  Letters of Credit
issued by it or proposed to be issued by it and the  Applications and Agreements
for  Letters of Credit  pertaining  to the  Letters of Credit as fully as if the
term  "Agent" as used in this  Article XI included the Issuing Bank with respect
to such acts or omissions, and (ii) as additionally provided herein with respect
to the Issuing Bank.

         11.2.  Delegation  of Duties.  The Agent may  execute any of its duties
under the Agreement or any other Loan Document by or through  agents,  employees
or  attorneys-in-fact  and shall be  entitled  to advice  of  counsel  and other
consultants  or experts  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  it  selects  in the  absence  of gross  negligence  or willful
misconduct.

         11.3.  Liability of Agent. No Agent-Related  Person shall (a) be liable
for  any  action  taken  or  omitted  to be  taken  by any of them  under  or in
connection  with this  Agreement or any other Loan Document or the  transactions
contemplated  hereby (except for its own gross negligence or willful  misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any  manner  to  any  Lender  or  participant  for  any  recital,  statement,
representation  or warranty  made by any Credit  Party or any  officer  thereof,
contained herein 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 Credit Party 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
or participant 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
Credit Party or any affiliate thereof.

         11.4. Reliance by Agent.

         (a) The Agent shall be entitled to rely,  and shall be fully  protected
in  relying,  upon any  Note,  writing,  communication,  signature,  resolution,
representation,  notice,  consent,  certificate,  affidavit,  letter,  telegram,
facsimile,   telex  or  telephonic  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,  and upon  advice and  statements  of legal
counsel (including counsel to any Credit Party),  independent  accountants,  and
other experts  selected by the Agent.  The Agent may deem and treat the payee of
any  Note as the  owner  thereof  for all  purposes  unless  an  Assignment  and
Acceptance shall have been filed with and accepted by the Agent. The Agent shall
be fully  justified  in failing or  refusing  to take any action  under any Loan
Document unless it shall first receive such advice or concurrence of the Lenders
or the Required 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  (other than any liability or expense  resulting  from the
gross negligence or willful misconduct of the Agent) 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 Required Lenders or all the Lenders, if required hereunder, and such request
and any action  taken or failure to act pursuant  thereto  shall be binding upon
all the  Lenders  and  participants.  Where  this  Agreement  or any other  Loan
Document  expressly  permits or prohibits an action unless the Required  Lenders
otherwise determine, the Agent shall, and in all other instances, the Agent may,
but shall not be required  to,  initiate any  solicitation  for the consent or a
vote of the Lenders.

         (b)  For  purposes  of  determining   compliance  with  the  conditions
specified in Section  6.1,  each Lender  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 a Lender.

         11.5.  Notice  of  Default.  The  Agent  shall  not be  deemed  to have
knowledge or notice of the occurrence of any Default or Event of Default, unless
the Agent shall have  received  written  notice  from a Lender or an  Authorized
Representative 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  within  three (3) days of
such  receipt.  The Agent shall take such action with respect to such Default or
Event of Default as shall be  reasonably  directed  by all of the Lenders or the
Required  Lenders,  as  applicable,  in  accordance  with  Article X;  provided,
however,  that unless and until the Agent has received any such  direction,  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.

         11.6. Credit Decision;  Disclosure of Information by Agent. Each Lender
acknowledges  that no  Agent-Related  Person  has  made  any  representation  or
warranty to it, and that no act by the Agent  hereinafter  taken,  including any
consent to and  acceptance  of any  assignment  or review of the  affairs of any
Credit  Party or any  affiliate  thereof,  shall be  deemed  to  constitute  any
representation or warranty by any  Agent-Related  Person to any Lender as to any
matter,  including  whether any  Agent-Related  Persons have disclosed  material
information  in their  possession.  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  creditworthiness  of the Credit
Parties and their  respective  subsidiaries,  and all  applicable  bank or other
regulatory laws relating to the transactions  contemplated  hereby, and made its
own decision to enter into this  Agreement  and to extend credit to the Borrower
and any other Credit Party 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
creditworthiness  of the  Borrower  and the other  Credit  Parties.  Except  for
notices,  reports and other documents  expressly required to be furnished to the
Lenders by the Agent herein, 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
creditworthiness  of any of  the  Credit  Parties  or  any of  their  respective
affiliates which may come into the possession of any Agent-Related Person.

         11.7.  Indemnification  of  Agent.  Whether  or  not  the  transactions
contemplated  hereby are  consummated,  the Lenders shall  indemnify upon demand
each  Agent-Related  Person (to the extent not reimbursed by or on behalf of any
Credit Party and without  limiting the obligation of any Credit Party to do so),
ratably  according  to  the  respective   principal  amount  of  the  Notes  and
Participations  held by them (or, if no Notes or Participations are outstanding,
ratably in accordance with their respective Applicable Commitment Percentages as
then in effect),  and hold harmless each  Agent-Related  Person from and against
any and all Indemnified  Liabilities incurred by it; provided,  however, that no
Lender  shall be  liable  for the  payment  to any  Agent-Related  Person of any
portion of such  Indemnified  Liabilities  resulting  from such  Person's  gross
negligence or willful  misconduct;  provided,  however,  that no action taken in
accordance  with the  directions  of the  Required  Lenders  shall be  deemed to
constitute gross negligence or willful  misconduct for purposes of this Section.
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
the reasonable fees and expenses of counsel for the Agent and including the cost
of internal  counsel)  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 the
Borrower.   The   undertaking   in  this  Section   shall   continue  in  effect
notwithstanding the Facility Termination Date and the resignation or replacement
of the Agent.

         11.8.  Agents in their  Individual  Capacities.  Bank of  America,  the
Co-Documentation  Agents and the Syndication Agent (collectively,  the "Facility
Agents") and their 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 each of the Credit  Parties and their  respective  affiliates  as
though the  Facility  Agents were not agents or, in the case of Bank of America,
the Issuing Bank hereunder and without notice to or consent of the Lenders.  The
Lenders  acknowledge that,  pursuant to such activities,  the Facility Agents or
their  affiliates  may receive  information  regarding  any Credit  Party or its
affiliates  (including  information  that  may  be  subject  to  confidentiality
obligations  in favor of such Credit Party or such  affiliate)  and  acknowledge
that  the  Facility  Agents  shall  be  under  no  obligation  to  provide  such
information to them.  With respect to its Loans,  each Facility Agent shall have
the same  rights and powers  under this  Agreement  as any other  Lender and may
exercise  such  rights and powers as though it were not an agent or, in the case
of Bank of America,  the Issuing  Bank,  and the terms  "Lender"  and  "Lenders"
include each Facility Agent in its individual capacity.

         11.9.  Successor  Agent.  The Agent may  resign as Agent  upon 30 days'
written notice to the Borrower and each Lender.  If the Agent resigns under this
Agreement,  so long as there shall not have occurred and be continuing a Default
or an Event of Default,  the Borrower  may appoint and the Required  Lenders may
approve  (which  approval  shall not be  unreasonably  withheld  or  delayed)  a
successor  agent for the Lenders,  or if a Default or an Event of Default  shall
have occurred and be  continuing,  the Required  Lenders may appoint a successor
Agent for the  Lenders,  which  successor  Agent  shall be any  commercial  bank
organized  under the laws of the United  States or any state thereof or licensed
to do  business  in the United  States or any state  thereof,  having a combined
surplus  and capital of not less than  $250,000,000.  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 the Borrower,  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,
power 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 XI and Sections  8.15,  12.5 and 12.9 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 Required  Lenders appoint a successor
agent as provided for above.

         11.10. Sole Lender.  Notwithstanding anything to the contrary contained
herein,  until there shall be two or more Lenders,  all  references to the Agent
herein  and in the  other  Loan  Documents  shall be  deemed to refer to Bank of
America as Lender.

         11.11.  Agent Notices.  The Agent hereby agrees to promptly  deliver to
each of the Lenders  copies of all  information  delivered  pursuant to Sections
8.11,  8.12,  8.13, 8.14, 8.16 or 8.17 and all written notices received from the
Credit  Parties  hereunder,  provided  that  the  failure  to  so  provide  such
information  and  notices  shall  not,  in  the  absence  of the  Agent's  gross
negligence or willful misconduct,  impair the rights and protections provided to
the Agent under this Article XI.

         11.12.  Syndication  and  Co-Documentation  Agents.  The parties hereto
agree that the Syndication Agent and Co-Documentation Agent shall have no duties
or  responsibilities  hereunder in such capacity upon or after execution of this
Agreement.

<PAGE>


                                  ARTICLE XII

                                  Miscellaneous
                                  -------------


         12.1. Assignments and Participations. (a) Each Lender may assign to one
or more Eligible  Assignees all or a portion of its rights and obligations under
this Agreement  (including,  without limitation,  all or a portion of its Loans,
its Revolving  Note, its Revolving  Credit  Commitment and its  Participations);
provided, however, that

                  (i) except in the case of an assignment  to another  Lender or
         an affiliate of a Lender or an assignment  of all of a Lender's  rights
         and obligations under this Agreement, any such partial assignment shall
         be in an  amount  at  least  equal  to  $10,000,000  in the case of any
         assignment of a Revolving  Credit  Commitment  unless each of the Agent
         and, so long as no Event of Default has occurred and is continuing, the
         Borrower  otherwise  consents (each such consent not to be unreasonably
         withheld or delayed);

                  (ii)  each  such   assignment  by  a  Lender  shall  be  of  a
         proportionate  part of all of its  rights  and  obligations  under this
         Agreement and its  Revolving  Note (except that any  assignment  (other
         than an  assignment  of 100% of its  interest) by Bank of America shall
         not include its  rights,  benefits or duties as the Issuing  Bank or as
         the provider of Swing Line Loans; and

                  (iii) (x) the  parties to such  assignment  shall  execute and
         deliver to the Agent for  acceptance by it an Assignment and Acceptance
         in the form of  Exhibit  B hereto,  together  with any  Revolving  Note
         subject to such  assignment  and a processing  and  recordation  fee of
         $3,500, and (y) each assignee shall execute and deliver to the Borrower
         a confidentiality agreement in the form of Exhibit J hereto.

Upon execution,  delivery, and acceptance of such Assignment and Acceptance, the
assignee  thereunder  shall  be a  party  hereto  and,  to the  extent  of  such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such  assignment,  be released from
its  obligations  under this  Agreement  (and, in the case of an Assignment  and
Acceptance  covering all of the assigning  Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party thereto but shall continue
to be entitled to the benefits of Article V and Sections 12.5 and 12.9. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate  arrangements so that, if required,  new
Revolving  Notes are issued (at the  reasonable  expense of the Borrower) to the
assignor and the assignee. If the assignee is not incorporated under the laws of
the  United  States of  America  or a state  thereof,  it shall  deliver  to the
Borrower  and  the  Agent  certification  as  to  exemption  from  deduction  or
withholding of Taxes in accordance  with Section 5.6. Any assignment or transfer
by a Lender of rights or  obligations  under this Agreement that does not comply
with this  subsection  shall be treated for purposes of this Agreement as a sale
by such Lender of a  participation  in such rights and obligations in accordance
with subsection (d) of this Section.

         (b) The Agent shall maintain at its address referred to in Section 12.2
a copy of each  Assignment  and  Acceptance  delivered to and accepted as herein
required and a register for the  recordation  of the names and  addresses of the
Lenders and the Revolving  Credit  Commitment  of, and  principal  amount of the
Revolving Loans and the Letter of Credit Outstandings owing to, each Lender from
time to time (the  "Register").  The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the Agent
and the Lenders may treat each Person  whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary.  The Register shall be available for inspection by the Borrower or
any Lender at any reasonable  time and from time to time upon  reasonable  prior
notice.

         (c) Upon its receipt of an Assignment  and  Acceptance  executed by the
parties  thereto and accepted by all other Persons whose  acceptance is required
hereunder,  together with any Note subject to such assignment and payment of the
processing  fee, the Agent shall,  if such  Assignment  and  Acceptance has been
completed and is in substantially the form of Exhibit B hereto,  (i) accept such
Assignment and Acceptance,  (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.

         (d) Any Lender may, without the consent of or notice to the Borrower to
the Agent, sell participations to one or more Persons in all or a portion of its
rights,  obligations or rights and obligations  under this Agreement  (including
all  or  a  portion  of  its  Revolving  Credit   Commitment  or  its  Loans  or
Participations);  provided,  however,  that (i) such Lender's  obligations under
this  Agreement  shall remain  unchanged,  (ii) such Lender shall remain  solely
responsible to the other parties hereto for the performance of such obligations,
(iii)  the  participant  shall be  entitled  to the  benefit  of the  provisions
contained in Sections  5.1, 5.5 and 5.6 and shall be entitled to the benefits of
and subject to the  provisions  of Section  12.3,  and (iv) the  Borrower  shall
continue to deal solely and directly  with such Lender in  connection  with such
Lender's  rights  and  obligations  under  this  Agreement.   Any  agreement  or
instrument  pursuant to which a Lender sells such a participation  shall provide
that such Lender shall retain the sole right to enforce the  obligations  of the
Borrower  relating  to its  Loans  and its Note and to  approve  any  amendment,
modification,  or  waiver  of  any  provision  of  this  Agreement  (other  than
amendments,  modifications, or waivers reducing the principal, interest, fees or
other amounts payable to such participant, postponing any scheduled date for the
payment  of money to such  participant,  or  releasing  any  Guarantor  from its
Facility Guaranty).  Notwithstanding  the foregoing,  a participant shall not be
entitled  to receive  any  greater  payment  under  Section  5.1 or 5.6 than the
applicable  Lender  would  have been  entitled  to receive  with  respect to the
participation sold to such participant,  unless the sale of the participation to
such  participant  is  made  with  the  Borrower's  prior  written  consent.   A
participant organized under the laws of a jurisdiction outside the United States
shall not be  entitled to the  benefits  of Section  5.6 unless the  Borrower is
notified of the  participation  sold to such  participant  and such  participant
agrees,  for the  benefit of the  Borrower,  to comply with  Sections  5.6(d)and
5.6(f) as though it were a Lender.

         (e)  Notwithstanding  any other  provision set forth in this Agreement,
any Lender may at any time  assign or pledge all or any portion of its Loans and
its  Note to  secure  obligations  of  such  Lender,  including  any  pledge  or
assignment to secure  obligations of such Lender to any Federal  Reserve Bank as
collateral  security pursuant to Regulation A and any Operating  Circular issued
by such Federal  Reserve  Bank. No such  assignment  shall release the assigning
Lender from its obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.

         (f) Any Lender may furnish any  information  concerning the Borrower or
any of its  Subsidiaries  in the  possession of such Lender from time to time to
assignees and participants  (including  prospective assignees and participants),
subject, however, to the provisions of Section 12.14 hereof.

         (g) If the consent of the Borrower to an  assignment  or to an Eligible
Assignee is required hereunder  (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of Section 12.1(a)),  the Borrower shall be deemed to have
given its  consent  ten  Business  Days after the date  notice  thereof has been
delivered to the Borrower by the  assigning  Lender  (through the Agent)  unless
such consent is expressly  refused by the Borrower  prior to such fifth Business
Day.

         (h) Whenever in this  Agreement  any of the parties  hereto is referred
to, such  reference  shall be deemed to include  the  successors  and  permitted
assigns of such party and all  covenants,  provisions  and  agreements  by or on
behalf of the Borrower which are contained in the Loan Documents  shall inure to
the benefit of the successors and permitted  assigns of the Agent,  the Lenders,
or any of them.  The Borrower may not assign or otherwise  transfer to any other
Person any  right,  power,  benefit,  or  privilege  (or any  interest  therein)
conferred  hereunder or under any of the other Loan  Documents,  or delegate (by
assumption or otherwise) to any other Person any duty, obligation,  or liability
arising hereunder or under any of the other Loan Documents except with the prior
written consent of each Lender, and any such purported assignment, delegation or
other transfer shall be void.  Nothing in this Agreement,  expressed or implied,
shall be  construed  to confer upon any Person  (other than the parties  hereto,
their  respective  successors  and assigns  permitted  hereby and, to the extent
expressly  contemplated  hereby,  the Indemnitees) any legal or equitable right,
remedy or claim under or by reason of this Agreement.

         12.2.  Notices.  Any notice shall be  conclusively  deemed to have been
received by any party hereto and be effective (i) on the day on which  delivered
(including hand delivery by commercial  courier  service) to such party (against
receipt  therefor),  (ii) on the date of transmission to such party, in the case
of notice by  telefacsimile  (where the proper  transmission  of such  notice is
either  acknowledged  by  the  recipient  or  electronically  confirmed  by  the
transmitting  device), or (iii) on the fifth Business Day after the day on which
mailed to such party,  if sent prepaid by certified or registered  mail,  return
receipt  requested,  in each case delivered,  transmitted or mailed, as the case
may be, to the address or telefacsimile number, as appropriate,  set forth below
or such other address or number as such party shall specify by notice hereunder:

                  (a)   if to the Borrower:

                        GTECH Corporation
                        55 Technology Way
                        West Greenwich, Rhode Island  02817
                        Attention:  Vice President and Treasurer
                        Telephone:  (401) 392-1000
                        Telefacsimile:  (401) 392-4940

                        with a copy to the General Counsel at the same address:
                        Telefacsimile:  (401) 392-0391

                  (b)   if to the Agent:

                        Bank of America, N.A.
                        101 North Tryon Street, 15th Floor
                        NC1-001-15-04
                        Charlotte, North Carolina  28255
                        Attention: Agency Services
                        Telephone:       (704) 388-1553
                        Telefacsimile:   (704) 386-9923

                        with a copy to:

                        Bank of America, N.A.
                        335 Madison Avenue, 5th Floor
                        NY1-503-05-05
                        New York, New York  10017
                        Attention:  Igor Suica
                        Telephone:       (212) 503-8701
                        Telefacsimile:   (212) 503-7066

                    (c) if to the Lenders:

                        At the addresses set forth on the signature pages hereof
                        and  on  the  signature  page  of  each  Assignment  and
                        Acceptance;

                    (d) if to any other Credit  Party,  at the address set forth
                        on the signature page of the Facility  Guaranty executed
                        by such Credit Party, as the case may be.

         12.3. Right of Set-off;  Adjustments.  (a) The Borrower agrees that the
Agent and each Lender shall have a lien for all the  Obligations of the Borrower
upon all  deposits  or deposit  accounts,  of any kind,  or any  interest in any
deposits or deposit  accounts  thereof,  now or  hereafter  pledged,  mortgaged,
transferred  or  assigned  to the  Agent  or such  Lender  or  otherwise  in the
possession or control of the Agent or such Lender  (other than for  safekeeping)
for any purpose for the account or benefit of the  Borrower  and  including  any
balance of any deposit  account or of any credit of the Borrower  with the Agent
or  such  Lender,  whether  now  existing  or  hereafter   established,   hereby
authorizing the Agent and each Lender at any time or times with or without prior
notice  while an Event of  Default  exists to apply  such  balances  or any part
thereof to such of the  Obligations of the Borrower to the Lenders then past due
and in such amounts as they may elect,  and whether or not any collateral or the
responsibility of other Persons  primarily,  secondarily or otherwise liable may
be deemed  adequate.  For the purposes of this  paragraph,  all  remittances and
property  shall be deemed to be in the possession of the Agent or such Lender as
soon as the  same may be put in  transit  to it by mail or  carrier  or by other
bailee.

         (b) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of the Loans owing to it, or interest thereon, or receive
any collateral in respect  thereof  (whether  voluntarily or  involuntarily,  by
set-off,  or  otherwise),  in a greater  proportion  than any such payment to or
collateral  received  by any other  Lender,  if any,  in  respect  of such other
Lender's Loans owing to it, or interest  thereon,  such benefitted  Lender shall
purchase  for cash  from the  other  Lenders a  participating  interest  in such
portion of each such other  Lender's  Loans owing to it, or shall  provide  such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be  necessary  to cause  such  benefitted  Lender to share  the  excess
payment or benefits of such  collateral  or  proceeds  ratably  with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter  recovered  from such  benefitted  Lender or is repaid in
whole or in part by such benefitted Lender in good faith settlement of a pending
or  threatened  avoidance  claim,  such  purchase  shall be  rescinded,  and the
purchase  price  and  benefits  returned,  to the  extent  of such  recovery  or
settlement payment,  but without interest.  For purposes of this Section 12.3(b)
the term "pro rata"  shall be  determined  with  respect  to both the  Revolving
Credit  Commitment of each Lender and to the Total Revolving  Credit  Commitment
after subtraction in each case of amounts,  if any, by which any such Lender has
not  funded  its  share  of  the   outstanding   Revolving   Credit   Loans  and
Participations,  as the case may be.  The  Borrower  expressly  consents  to the
foregoing  arrangements and agrees that any Lender so purchasing a participation
from a Lender pursuant to this Section 12.3 may, to the fullest extent permitted
by law, exercise all of its rights of payment  (including,  without  limitation,
all rights of  set-off,  banker's  lien or  counterclaim)  with  respect to such
participation  as  fully  as if such  Person  were the  direct  creditor  of the
Borrower in the amount of such participation.

         12.4.  Survival.   All  covenants,   agreements,   representations  and
warranties  made herein shall survive the making by the Lenders of the Loans and
the  expiration  of the Letters of Credit and the  execution and delivery to the
Lenders of this  Agreement  and the Notes and shall  continue  in full force and
effect so long as any  Obligations  remain  outstanding  or any  Lender  has any
Revolving Credit Commitment hereunder or the Borrower has continuing obligations
hereunder unless otherwise provided herein.

         12.5.  Expenses.  The Borrower  agrees to pay on demand all  reasonable
costs and  expenses  of the Agent and BAS in  connection  with the  syndication,
preparation, due diligence, execution, delivery,  administration,  modification,
and  amendment  of this  Agreement,  the  other  Loan  Documents,  and the other
documents  to  be  delivered  hereunder,   including,  without  limitation,  the
reasonable  fees and  expenses  of  counsel  for the Agent and BAS with  respect
thereto and with  respect to advising  the Agent and BAS as to their  rights and
responsibilities under the Loan Documents, provided, however, that the only fees
and  expenses  to be paid in  connection  with the closing of the Loan are those
provided in the Fee Letter.  The  Borrower  further  agrees to pay on demand all
reasonable costs and expenses of the Agent and the Lenders  (including,  without
limitation,  reasonable  attorneys'  fees and expenses) in  connection  with the
enforcement (whether through negotiations,  legal proceedings,  or otherwise) of
the Loan Documents and the other documents to be delivered hereunder.

         12.6.  Amendments  and Waivers.  Any provision of this Agreement or any
other Loan Document may be amended or waived if, but only if, such  amendment or
waiver is in writing and is signed by the  Borrower or other  applicable  Credit
Party party to such Loan Document and either the Required Lenders or (as to Loan
Documents  other than the Credit  Agreement) the Agent on behalf of the Required
Lenders  (and,  if Article XI or the rights or duties of the Agent are  affected
thereby, by the Agent);  provided that no such amendment or waiver shall, unless
signed by each Lender  directly  affected  thereby,  (i) increase the  Revolving
Credit  Commitments of such Lenders or the Total  Revolving  Credit  Commitment,
(ii) reduce the  principal of or rate of interest on any  Revolving  Loan or any
fees or other  amounts  payable  hereunder,  except that only the consent of the
Required Lenders shall be necessary to amend the definition of "Default Rate" or
to waive any  obligation  of the Borrower to pay  interest at the Default  Rate,
(iii)  postpone  any date  fixed for the  payment  or  mandatory  prepayment  of
principal,  interest, fees or other amounts payable hereunder or for termination
of any  Revolving  Credit  Commitment,  or (iv)  change  the  percentage  of the
Revolving  Credit  Commitment or of the unpaid principal amount of the Notes, or
the number of Lenders, which shall be required for the Lenders or any of them to
take any action under this Section 12.6 or any other provision of this Agreement
or (v)  release  any  Guarantor  except as  expressly  contemplated  in the Loan
Documents; and provided,  further, that no such amendment or waiver that affects
the rights,  privileges or  obligations  of Bank of America as provider of Swing
Line Loans,  shall be effective  unless  signed in writing by Bank of America or
that affects the rights, privileges or obligations of the Issuing Bank as issuer
of Letters of Credit, shall be effective unless signed in writing by the Issuing
Bank.

         No notice to or demand on the  Borrower  in any case shall  entitle the
Borrower  to any  other  or  further  notice  or  demand  in  similar  or  other
circumstances,  except  as  otherwise  expressly  provided  herein.  No delay or
omission on any Lender's or the Agent's part in exercising any right,  remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.

         12.7.  Counterparts;   Facsimile  Signatures.  This  Agreement  may  be
executed  in any  number of  counterparts,  each of which when so  executed  and
delivered  shall be deemed an original,  and it shall not be necessary in making
proof of this  Agreement  to  produce  or  account  for more than one such fully
executed  counterpart.  Signatures on communications  and other documents may be
transmitted  by  facsimile  only with the  consent  of the Agent in its sole and
absolute  discretion in each instance.  The effectiveness of any such signatures
accepted by the Agent shall,  subject to applicable law, have the same force and
effect as manual  signatures and shall be binding on all parties.  The Agent may
also require that any such signature be confirmed by a manually signed hard copy
thereof.  Each party hereto hereby adopts as an original executed signature page
each signature page hereafter  furnished by such party to the Agent (or an agent
of the Agent)  bearing (with the consent of the Agent) a facsimile  signature by
or on behalf of such party.  Nothing  contained in this Section  shall limit the
provisions of Section 11.4.

         12.8.  Termination.  This  Agreement  shall  terminate  on the Facility
Termination  Date,  except that (x) those  provisions which by the express terms
thereof continue in effect  notwithstanding  the Facility  Termination Date, and
(y) obligations in the nature of continuing indemnities or expense reimbursement
obligations not yet due and payable,  shall continue in effect.  Notwithstanding
the  foregoing,  if  after  receipt  of any  payment  of all or any  part of the
Obligations,  the Agent,  the Issuing Bank or any Lender  [(including  the Swing
Line  lender)] is for any reason  compelled  to  surrender  such  payment to any
Person  because  such  payment  is  determined  to  be  void  or  voidable  as a
preference,  impermissible  setoff,  a diversion of trust funds or for any other
reason or elects to repay any such amount in good faith  settlement of a pending
or threatened  avoidance  claim,  (i) this  Agreement  including the  provisions
pertaining to  Participations in Letters of Credit,  Reimbursement  Obligations,
and Swing Line Loans)  shall  continue in full force (or be  reinstated,  as the
case may be) and the Borrower  shall be liable to, and shall  indemnify and hold
the Agent,  the Issuing  Bank or such Lender  harmless  for,  the amount of such
payment  surrendered until the Agent, the Issuing Bank or such Lender shall have
been finally and irrevocably  paid in full, and (ii) in the event any portion of
any amount so required to be surrendered by the Agent or the Issuing Bank or the
Swing Line lender shall have been distributed to the Lenders,  the Lenders shall
promptly  repay such  amounts to the Agent or the Issuing Bank or the Swing Line
lender on demand therefor. The provisions of the foregoing sentence shall be and
remain effective  notwithstanding  any contrary action which may have been taken
by the Agent, the Issuing Bank or the Lenders in reliance upon such payment, and
any such contrary action so taken shall be without prejudice to the Agent's, the
Issuing  Bank's or the Lenders'  rights under this Agreement and shall be deemed
to have been conditioned upon such payment having become final and irrevocable.

         12.9. Indemnification; Limitation of Liability. (a) The Borrower agrees
to indemnify  and hold harmless  each  Agent-Related  Person and each Lender and
each of their affiliates and their respective  officers,  directors,  employees,
agents, and advisors (each, an "Indemnified Party") from and against any and all
claims, damages, losses,  liabilities,  costs, and expenses (including,  without
limitation,  reasonable  attorneys' fees) that may be incurred by or asserted or
awarded  against  any  Indemnified  Party,  in each  case  arising  out of or in
connection with or by reason of (including,  without  limitation,  in connection
with any investigation,  litigation,  or proceeding or preparation of defense in
connection therewith) the Loan Documents,  any of the transactions  contemplated
herein or the actual or  proposed  use of the  proceeds of the Loans (all of the
foregoing,  collectively,  the "Indemnified Liabilities"),  except to the extent
such  claim,  damage,  loss,  liability,  cost,  or expense is found in a final,
non-appealable  judgment by a court of competent  jurisdiction  to have resulted
from such  Indemnified  Party's gross negligence or willful  misconduct.  In the
case of an investigation,  litigation or other proceeding to which the indemnity
in this Section 12.9 applies,  such indemnity shall be effective  whether or not
such  investigation,  litigation or  proceeding is brought by the Borrower,  its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any  Indemnified  Party is  otherwise a party  thereto and whether or not the
transactions  contemplated  hereby are consummated.  The Borrower agrees that no
Indemnified  Party shall have any  liability  (whether  direct or  indirect,  in
contract or tort or otherwise) to it, any of its Subsidiaries, any Guarantor, or
any  security  holders or  creditors  thereof  arising out of,  related to or in
connection with the transactions  contemplated herein, except to the extent that
such  liability  is  found  in a final  non-appealable  judgment  by a court  of
competent  jurisdiction to have directly resulted from such Indemnified  Party's
gross  negligence or willful  misconduct.  The Borrower agrees not to assert any
claim against any Agent-Related Person, any Lender, any of their affiliates,  or
any of their respective directors,  officers, employees,  attorneys, agents, and
advisers, on any theory of liability, for special, indirect,  consequential,  or
punitive damages arising out of or otherwise relating to the Loan Documents, any
of the  transactions  contemplated  herein or the actual or proposed  use of the
proceeds of the Loans.

         (b) If a claim  is to be made by a party  entitled  to  indemnification
under this  Section  12.9 or Section  8.15  hereof  against  the  Borrower,  the
applicable  Indemnified Party shall give written notice to the Borrower promptly
after such Indemnified Party receives actual notice of any claim,  action, suit,
loss,  cost,  liability,  damage or expense incurred or instituted for which the
indemnification is sought. If requested by the Borrower in writing,  and so long
as no Default or Event of Default  shall have occurred and be  continuing,  such
Indemnified  Party shall  contest at the expense of the Borrower  the  validity,
applicability  and/or  amount of such  suit,  action,  or cause of action to the
extent  such  contest  may be  conducted  in good faith on  legally  supportable
grounds.  If any lawsuit or enforcement  action is filed against any Indemnified
Party,  written  notice  thereof  shall  be  given  to the  Borrower  as soon as
practicable  (and in any event  within 20 days after the service of the citation
or  summons).  Notwithstanding  the  foregoing,  the  failure  so to notify  the
Borrower as provided in this section will  relieve the Borrower  from  liability
hereunder only if and to the extent that such failure  results in the forfeiture
by  the  Borrower  of  any  substantive  rights  or  defenses.   The  applicable
Indemnified Party shall control the defense and investigation of such lawsuit or
action  and shall  employ  and  engage  counsel  of its own choice to handle and
defend the same, at the Borrower's reasonable cost, risk and expense;  provided,
however,   that  the  Borrower  may,  at  its  own  cost   participate   in  the
investigation,  trial and  defense  of such  lawsuit  or action  and any  appeal
arising therefrom. If the Borrower has acknowledged to any Indemnified Party its
obligation to indemnify hereunder, such Indemnified Party, so long as no Default
or Event of Default shall have occurred and be continuing, shall not settle such
lawsuit or enforcement  action without the prior written consent of the Borrower
and, if the Borrower has not so acknowledged  its obligation,  such  Indemnified
Party shall not settle such lawsuit or enforcement  action without giving twenty
(20)  days'  prior  written  notice  of such  settlement  and its  terms  to the
Borrower.  The  agreements  and  obligations  of the Borrower  contained in this
Section 12.9 shall continue in effect  notwithstanding the Facility  Termination
Date, the final payment in full of the  Obligations  and the termination of this
Agreement.

         12.10.  Severability.  If any provision of this  Agreement or the other
Loan Documents shall be determined to be illegal or invalid as to one or more of
the parties  hereto,  then such provision shall remain in effect with respect to
all parties,  if any, as to whom such provision is neither  illegal nor invalid,
and in any event all other provisions  hereof shall remain effective and binding
on the parties hereto.

         12.11. Entire Agreement.  This Agreement,  together with the other Loan
Documents,  constitutes  the entire  agreement among the parties with respect to
the subject matter hereof and supersedes all previous  proposals,  negotiations,
representations,  commitments  and  other  communications  between  or among the
parties,  both  oral and  written,  with  respect  thereto  (except  that  those
provisions (if any) which by the express terms of the commitment letter dated as
of April 11,  2001,  executed  by Bank of America  and BAS and  accepted  by the
Borrower,  survive the closing of the  Revolving  Credit  Facility and Letter of
Credit Facility, shall survive and continue in effect).

         12.12.  Agreement  Controls.  In the event  that any term of any of the
Loan Documents other than this Agreement conflicts with any express term of this
Agreement,  the terms and  provisions  of this  Agreement  shall  control to the
extent of such conflict.

         12.13.  Usury  Savings  Clause.  Notwithstanding  any  other  provision
herein,  the aggregate  interest rate charged under any of the Notes,  including
all  charges or fees in  connection  therewith  deemed in the nature of interest
under  applicable  law shall not exceed the Highest Lawful Rate (as such term is
defined  below).  If the rate of  interest  (determined  without  regard  to the
preceding  sentence) under this Agreement at any time exceeds the Highest Lawful
Rate (as defined  below),  the  outstanding  amount of the Loans made  hereunder
shall  bear  interest  at the  Highest  Lawful  Rate  until the total  amount of
interest due hereunder  equals the amount of interest  which would have been due
hereunder if the stated rates of interest set forth in this Agreement had at all
times been in effect.  In addition,  if when the Loans made hereunder are repaid
in full the total  interest  due  hereunder  (taking  into  account the increase
provided for above) is less than the total  amount of interest  which would have
been due  hereunder if the stated rates of interest set forth in this  Agreement
had at all times  been in  effect,  then to the  extent  permitted  by law,  the
Borrower  shall pay to the Agent an amount equal to the  difference  between the
amount of interest paid and the amount of interest which would have been paid if
the  Highest  Lawful Rate had at all times been in effect.  Notwithstanding  the
foregoing,  it is the  intention  of the  Lenders  and the  Borrower  to conform
strictly to any applicable usury laws. Accordingly, if any Lender contracts for,
charges, or receives any consideration  which constitutes  interest in excess of
the Highest Lawful Rate,  then any such excess shall be cancelled  automatically
and,  if  previously  paid,  shall at such  Lender's  option be  applied  to the
outstanding  amount of the Loans made  hereunder or be refunded to the Borrower.
As used in this  paragraph,  the term  "Highest  Lawful  Rate" means the maximum
lawful  interest  rate,  if any,  that at any  time or from  time to time may be
contracted  for,  charged,  or received under the laws applicable to such Lender
which are  presently  in effect  or, to the extent  allowed  by law,  under such
applicable  laws  which  may  hereafter  be in effect  and which  allow a higher
maximum nonusurious interest rate than applicable laws now allow.

         12.14. Confidentiality.

         (a)  Except  as  necessary  to  exercise  its  rights  or  perform  its
obligations under this Agreement or as permitted  pursuant to this Section 12.14
or Section 8.1 hereof,  each Lender  (including,  for  purposes of this  Section
12.14, any participant  thereof) shall keep  confidential and shall not disclose
any  Confidential  Information  unless the Borrower has, in its sole discretion,
previously and expressly  consented to such disclosure in writing.  A Lender may
disclose such Confidential Information (i) to its and its affiliates' directors,
officers,  employees and agents, including accountants,  legal counsel and other
advisors (it being  understood  that the Persons to whom such disclosure is made
will be informed of the  confidential  nature of such Information and instructed
to keep such  Information  confidential);  (ii) to the extent  requested  by any
Governmental Authority or regulatory authority;  (iii) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process; (iv)
to any other party to this Agreement; (v) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding  relating to this Agreement
or the enforcement of rights hereunder;  (vi) subject to an agreement containing
provisions  substantially the same as those of this Section, to (1) any Eligible
Assignee  of or  Participant  in, or any  prospective  Eligible  Assignee  of or
Participant in, any of its rights or obligations under this Agreement or (2) any
direct or indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective  counterparty's  professional advisor)
to any credit  derivative  transaction  relating to obligations of the Borrower;
(vii) with the consent of the  Borrower;  (viii) to the extent such  Information
(1)  becomes  publicly  available  other  than as a result  of a breach  of this
Section or (2) becomes available to the Agent or any Lender on a nonconfidential
basis from a source other than the Borrower; or (ix) to the National Association
of Insurance  Commissioners or any other similar  organization or any nationally
recognized rating agency that requires access to information about a Lender's or
its  affiliates'  investment  portfolio in connection  with ratings  issued with
respect to such Lender or its affiliates.

         (b) Upon the expiration or earlier  termination of this  Agreement,  or
the  cessation of any Lender's  status as a party hereto or a  participant  of a
party hereto,  the Lender(s) shall promptly  deliver to the Borrower all records
or  other  information  in  any  media  containing  or  embodying   Confidential
Information  which were delivered or made available to the Lenders in connection
herewith,  including  any  copies  thereof,  and to the extent  such  records or
information  is not  returned,  shall  certify  that such  information  has been
destroyed;   provided,   however,  that  each  Lender  may  retain  Confidential
Information  required to be retained by any order of any Governmental  Authority
or otherwise required by law or regulation.

         (c) This Section  12.14 shall  indefinitely  survive the  expiration or
earlier  termination of this Agreement,  or the cessation of any Lender's status
as a party hereto.

         12.15. Governing Law; Waiver of Jury Trial.

                  (a) THIS  AGREEMENT  AND THE  OTHER  LOAN  DOCUMENTS  SHALL BE
         GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
         NEW YORK APPLICABLE TO CONTRACTS  EXECUTED,  AND TO BE FULLY PERFORMED,
         IN SUCH STATE.

                  (b) THE BORROWER HEREBY  EXPRESSLY AND IRREVOCABLY  AGREES AND
         CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
         TO THIS  AGREEMENT  AND THE  TRANSACTIONS  CONTEMPLATED  HEREIN  MAY BE
         INSTITUTED  IN ANY STATE OR FEDERAL  COURT SITTING IN THE COUNTY OF NEW
         YORK, STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE EXECUTION
         AND  DELIVERY OF THIS  AGREEMENT,  THE  BORROWER  EXPRESSLY  WAIVES ANY
         OBJECTION  THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN,
         OR TO THE  EXERCISE OF  JURISDICTION  OVER IT AND ITS  PROPERTY BY, ANY
         SUCH COURT IN ANY SUCH SUIT,  ACTION OR  PROCEEDING,  AND THE  BORROWER
         HEREBY  IRREVOCABLY   SUBMITS  GENERALLY  AND  UNCONDITIONALLY  TO  THE
         JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

                  (c) THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE BY
         PERSONAL  SERVICE OF A COPY OF THE SUMMONS AND COMPLAINT OR OTHER LEGAL
         PROCESS IN ANY SUCH SUIT,  ACTION OR  PROCEEDING,  OR BY  REGISTERED OR
         CERTIFIED  MAIL  (POSTAGE  PREPAID)  TO THE  ADDRESS  OF  THE  BORROWER
         PROVIDED IN SECTION  12.2,  OR BY ANY OTHER METHOD OF SERVICE  PROVIDED
         FOR UNDER THE APPLICABLE LAWS IN EFFECT IN THE STATE OF NEW YORK.

                  (d) NOTHING  CONTAINED IN SUBSECTIONS  (b) OR (c) HEREOF SHALL
         PRECLUDE  THE AGENT OR ANY LENDER  FROM  BRINGING  ANY SUIT,  ACTION OR
         PROCEEDING  ARISING  OUT OF OR  RELATING  TO ANY LOAN  DOCUMENT  IN THE
         COURTS OF ANY JURISDICTION  WHERE THE BORROWER OR ANY OF THE BORROWER'S
         PROPERTY OR ASSETS MAY BE FOUND OR LOCATED.  TO THE EXTENT PERMITTED BY
         THE  APPLICABLE  LAWS OF ANY SUCH  JURISDICTION,  THE  BORROWER  HEREBY
         IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
         WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
         THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
         COURT  OR  COURTS  WHICH  NOW  OR  HEREAFTER  MAY  BE  AVAILABLE  UNDER
         APPLICABLE LAW.

                  (e) IN ANY  ACTION OR  PROCEEDING  TO  ENFORCE  OR DEFEND  ANY
         RIGHTS  OR  REMEDIES  UNDER  OR  RELATED  TO ANY LOAN  DOCUMENT  OR ANY
         AMENDMENT,  INSTRUMENT,  DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN
         THE  FUTURE  BE  DELIVERED  IN  CONNECTION  THEREWITH,  OR IN  ANY  WAY
         CONNECTED  WITH OR INCIDENTAL TO THE DEALINGS OF THE PARTIES  HERETO OR
         ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT,  WHETHER NOW EXISTING OR
         HEREAFTER  ARISING,  THE  BORROWER,  THE AGENT AND THE  LENDERS  HEREBY
         AGREE, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION,
         SUIT OR PROCEEDING  SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY
         AND HEREBY  IRREVOCABLY  WAIVE,  TO THE EXTENT  PERMITTED BY APPLICABLE
         LAW,  ANY  RIGHT  SUCH  PERSON  MAY  HAVE TO  TRIAL BY JURY IN ANY SUCH
         ACTION,  SUIT OR  PROCEEDING.  ANY PARTY TO THIS  AGREEMENT MAY FILE AN
         ORIGINAL  COUNTERPART  OR A COPY OF THIS  SECTION  WITH  ANY  COURT  AS
         WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER
         OF THEIR RIGHT TO TRIAL BY JURY.

                  (f) THE BORROWER HEREBY  EXPRESSLY WAIVES ANY OBJECTION IT MAY
         HAVE THAT ANY COURT TO WHOSE  JURISDICTION IT HAS SUBMITTED PURSUANT TO
         THE TERMS HEREOF IS AN INCONVENIENT FORUM.

         12.16. Special Funding Option.

         (a)  Notwithstanding  anything to the contrary  contained  herein,  any
Lender (for the purposes of this Section 12.16,  a "Granting  Lender") may grant
to a special purpose funding vehicle (for the purposes of this Section 12.16, an
"SPC") the option to make, on behalf of such Granting  Lender,  all or a portion
of the Advances and  Participations  which such Granting  Lender is obligated to
make (a "Funding  Obligation")  hereunder,  such option to be exercisable in the
sole discretion of the SPC; provided, however, that

                  (i) such Granting  Lender's  obligations  under this Agreement
         and the  Loan  Documents  shall  remain  unchanged,  including  without
         limitation  the  indemnification  obligations  of the  Granting  Lender
         pursuant to Section 11.7 hereof;

                  (ii) such Granting  Lender shall remain solely  responsible to
         the  other  parties   hereto  for  the   performance   of  all  funding
         obligations;

                  (iii) the  Borrowers  and the Lenders  shall  continue to deal
         solely and directly with such Granting  Lender in connection  with such
         Granting  Lender's  rights and obligations  under this  Agreement;  the
         Agent shall continue to deal directly with the Granting Lender as agent
         for the SPC with  respect to  distribution  of  payment  of  principal,
         interest and fees, notices of Conversion and Continuation and all other
         matters;

                  (iv) such  Granting  Lender  shall  retain  the sole  right to
         enforce the obligations of the Borrowers  relating to its Loans and its
         Notes  and  its   Participations   and  to   approve   any   amendment,
         modification,  or waiver of any  provision of this  Agreement,  each of
         which may, if so agreed in writing  between the Granting Lender and the
         SPC,  require the prior consent of any such SPC which has exercised the
         option to undertake  the Funding  Obligation  in  connection  with such
         Granting Lender's  Commitments and Participations and Obligations owing
         thereto  before  the  Granting  Lender  approves  any  such  amendment,
         modification or waiver;

                  (v) the  granting  of such  option  shall  not  constitute  an
         assignment  to or  participation  of  such  SPC of or in  the  Granting
         Lender's Commitments and Participations and Obligations owing thereto;

                  (vi) such SPC shall not become a Lender  hereunder as a result
         of the granting of such option;

                  (vii) such SPC shall not become obligated or committed to make
         Advances as a result of the granting of such option;

                  (viii)  if such SPC  elects  not to  exercise  such  option or
         otherwise fails to make all or any part of an Advance or Participation,
         the  Granting  Lender  shall  retain  its  funding  obligation  and  be
         obligated to make the entire Advance or Participation or any portion of
         such Advance or Participation not made by such SPC; and

         (b)  Advances  and  Participations  made by an SPC  hereunder  shall be
deemed to satisfy the funding  obligation  and  utilize  the  Commitment  of the
Granting  Lender as if, and to the same extent,  such Advances were made by such
Granting Lender.

         (c) Each  party  hereto  agrees  that no SPC  shall be  liable  for any
indemnity  or payment  under this  Agreement  for which a Granting  Lender would
otherwise  be liable so long as, and to the extent  that,  the  Granting  Lender
provides such indemnity or makes such payment.  In furtherance of the foregoing,
each party hereto hereby agrees (which  agreement  shall survive the termination
of this  Agreement)  that,  prior to the date that is one year and one day after
the  payment  in  full of all  outstanding  commercial  paper  or  other  senior
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against,  such SPC any bankruptcy,  reorganization,  arrangement,
insolvency or liquidation  proceedings or similar  proceedings under the laws of
the United States of America or any State thereof.

         (d)  Notwithstanding   anything  to  the  contrary  contained  in  this
Agreement,  an SPC may (i) at any time and  without  paying any  processing  fee
therefor,  assign or participate  all or a portion of its interests in any Loans
or  Participations  as they may exist  consistent with the terms of this Section
12.16  to  its  Granting  Lender  or to  any  financial  institutions  providing
liquidity and/or credit support to or for the account of such SPC to support the
funding  or  maintenance  of Loans or  Participations,  and (ii)  disclose  on a
confidential basis any nonpublic  information  relating to Advances made by such
SPC hereunder to any rating agency,  commercial  paper dealer or provider of any
surety or guarantee to such SPC.

         (e) This  Section  12.16 may not be amended  without the prior  written
consent of the  Granting  Lender on behalf of which such SPC has made all or any
part of its Advances which remain outstanding at the time of such amendment.

                         [Signatures on following pages]



<PAGE>


         IN WITNESS  WHEREOF,  the parties hereto have caused this instrument to
be made,  executed and delivered by their duly authorized officers as of the day
and year first above written.


                                       GTECH CORPORATION

                                       By: /s/ William M. Pieri
                                          --------------------------------------
                                           William M. Pieri
                                           Vice President and Treasurer



                                       BANK OF AMERICA, N.A.,
                                       as Agent for the Lenders


                                       By: /s/ Igor Suica
                                          --------------------------------------
                                           Igor Suica
                                           Vice President

<PAGE>


                                       BANK OF AMERICA, N.A., as Lender


                                       By: /s/ Igor Suica
                                          --------------------------------------
                                           Igor Suica
                                           Vice President


                                       Lending Office:
                                           Bank of America, N.A.
                                           101 North Tryon Street, 15th Floor
                                           NC1-001-15-04
                                           Charlotte, North Carolina  28255
                                           Attention: Agency Services
                                           Telephone:
                                           Telefacsimile:

                                       Wire Transfer Instructions:
                                           Bank of America, N.A.
                                           ABA#  053000196
                                           Account No.: 13662122506
                                           Reference: GTECH Corporation
                                           Attention:  Agency Services



<PAGE>


                                       THE  BANK OF  NOVA SCOTIA, as Syndication
                                       Agent and as Lender


                                       By: /s/ Authorized Signatory
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------


                                       Lending Office:
                                           The Bank of Nova Scotia
                                           600 Peachtree Street, N.E.
                                           Suite 2700
                                           Atlanta, Georgia  30308
                                           Attention:  Jill Quiroz
                                           Telephone:        (404) 877-1544
                                           Telefacsimile:    (404) 888-8998

                                       Wire Transfer Instructions:
                                           The Bank of Nova Scotia
                                           One Liberty Plaza
                                           New York, New York
                                           ABA#  026002532
                                           Account No.:  The Bank of Nova Scotia
                                           Reference:    Boston Loan Service A/C
                                                         #0609137  Ref.  GTECH
                                           Attention:



<PAGE>


                                       CREDIT  LYONNAIS  NEW  YORK  BRANCH,   as
                                       Co-Documentation Agent and as Lender


                                       By: /s/ Deborah Bradley
                                          --------------------------------------
                                       Name: Deborah Bradley
                                            ------------------------------------
                                       Title: First Vice President
                                             -----------------------------------


                                       Lending Office:
                                           Credit Lyonnais New York Branch
                                           1301 Avenue of the Americas
                                           New York, New York  10019
                                           Attention:  Agnes Castillo
                                           Telephone:        (216) 261-7669
                                           Telefacsimile:    (216) 261-7696

                                       Wire Transfer Instructions:
                                           Federal Reserve Bank
                                           ABA#  026-008-073
                                           Account No.: For Account of Credit
                                                        Lyonnais NY Branch
                                           Reference:  GTECH Corporation
                                           Attention:  Loan Servicing



<PAGE>


                                       FLEET NATIONAL BANK, as  Co-Documentation
                                       Agent and as Lender


                                       By: /s/ Harvey H. Thayer, Jr.
                                          --------------------------------------
                                       Name: Harvey H. Thayer, Jr.
                                            ------------------------------------
                                       Title: Managing Director
                                             -----------------------------------


                                       Lending Office:
                                           Fleet National Bank
                                           100 Federal Street
                                           Boston, Massachusetts  02110
                                           Attention:  Judy Vetters
                                           Telephone:        (617) 434-5182
                                           Telefacsimile:    (617) 434-0800

                                       Wire Transfer Instructions:
                                           Fleet National Bank
                                           Boston, Massachusetts
                                           ABA#  011000138
                                           Account No.:  151035166156
                                           Reference: GTECH Corporation
                                           Attention:  Commercial Loan Services



<PAGE>


                                       CITIZENS BANK OF RHODE ISLAND, as Lender


                                       By: /s/ Stephen P. Higginbotham
                                          --------------------------------------
                                       Name: Stephen P. Higginbotham
                                            ------------------------------------
                                       Title: Senior Vice President
                                             -----------------------------------


                                       Lending Office:
                                           Citizens Bank of Rhode Island
                                           1 Riverside Drive
                                           East Providence, Rhode Island  02905
                                           Attention:  Carol Hawkins
                                           Telephone:        (401) 734-5296
                                           Telefacsimile:    (401) 734-5385

                                       Wire Transfer Instructions:
                                           Citizens Bank
                                           Providence, Rhode Island
                                           ABA#  011500120
                                           Account No.:  1015524
                                           Reference: GTECH Corporation
                                           Attention:  Carol Hawkins



<PAGE>


                                       THE BANK OF NEW YORK, as Lender


                                       By: /s/ Kenneth P. Sneider, Jr.
                                          --------------------------------------
                                       Name: Kenneth P. Sneider, Jr.
                                            ------------------------------------
                                       Title: Vice President
                                             -----------------------------------


                                       Lending Office:
                                           The Bank of New York
                                           One Wall Street
                                           New York, New York  10286
                                           Attention:  Laina Chan
                                           Telephone:        (212) 635-6720
                                           Telefacsimile:    (212) 635-6426

                                       Wire Transfer Instructions:
                                           The Bank of New York
                                           ABA#  021-000-018
                                           Account No.:  GLA #111556
                                           Reference:
                                           Attention:  Loan Processing Support


<PAGE>


                                       ALLIED IRISH BANKS, p.l.c., as Lender


                                       By: /s/ Anthony O'Reilly
                                          --------------------------------------
                                       Name: Anthony O'Reilly
                                            ------------------------------------
                                       Title: Vice President
                                             -----------------------------------


                                       Lending Office:
                                           Allied Irish Banks, p.l.c.
                                           New York, New York
                                           Attention:  Anthony O'Reilly
                                           Telephone:        (212) 515-6847
                                           Telefacsimile:    (212) 339-8325

                                       Wire Transfer Instructions:
                                           Chase Manhattan Bank
                                           New York, New York
                                           ABA#
                                           Account Name:  AIB Dublin
                                           Account No.:  001 1 907599
                                           Reference:  AIB Corporate Banking NY
                                           Attention:


<PAGE>


                                       KEY CORPORATE CAPITAL, INC., as Lender


                                       By: /s/ Jeff Kalinowski
                                          --------------------------------------
                                       Name: Jeff Kalinowski
                                            ------------------------------------
                                       Title: Vice President
                                             -----------------------------------


                                       Lending Office:
                                           Key Corporate Capital, Inc.
                                           127 Public Square
                                           MC:  OH-01-27-0402
                                           Cleveland, Ohio  44114
                                           Attention:
                                           Telephone:
                                           Telefacsimile:

                                       Wire Transfer Instructions:
                                           KeyBank
                                           Cleveland, Ohio
                                           ABA#  041-001-039
                                           Account No.:  3057
                                           Reference: GTECH Corporation
                                           Attention:  Specialty Loan Services


<PAGE>


                                       COMMERZBANK AG, New York and Grand Cayman
                                       Branches


                                       By: /s/ Robert Donohue
                                          --------------------------------------
                                       Name: Robert Donohue
                                            ------------------------------------
                                       Title: Senior Vice President
                                             -----------------------------------

                                       By: /s/ Peter Doyle
                                          --------------------------------------
                                       Name: Peter Doyle
                                            ------------------------------------
                                       Title: Vice President
                                             -----------------------------------

                                       Lending Office:
                                           Commerzbank AG, New York Branch
                                           New York, New York
                                           Attention:  Al Caputo
                                           Telephone:        (212) 266-7694
                                           Telefacsimile:    (212) 266-7204

                                       Wire Transfer Instructions:
                                          Commerzbank AG, New York Branch
                                          New York, New York
                                          ABA#  026-008-044
                                          Account No.:  150-101731805
                                          Reference: GTECH Corporation
                                          Attention: Commercial Lending Services






<PAGE>


                                    EXHIBIT A

                        APPLICABLE COMMITMENT PERCENTAGES


                                                             Applicable
                             Revolving Credit                Commitment
Lender                         Commitment                    Percentage
------                         ----------                    ----------

Bank of America, N.A         $49,000,000                    16.3333333333%
Bank of Nova Scotia           42,000,000                    14.0000000000%
Credit Lyonnais               42,000,000                    14.0000000000%
Fleet Bank                    42,000,000                    14.0000000000%
Bank of New York              25,000,000                     8.3333333333%
Commerzbank                   25,000,000                     8.3333333333%
Allied Irish                  25,000,000                     8.3333333333%
Citizens                      25,000,000                     8.3333333333%
Key Bank                      25,000,000                     8.3333333333%
                              ----------                     ------------

                            $300,000,000                              100%




<PAGE>


                                    EXHIBIT B

                        FORM OF ASSIGNMENT AND ACCEPTANCE

         Reference is made to the Credit Agreement dated as of __________,  2001
(as amended, restated,  extended,  supplemented or otherwise modified in writing
from time to time, the "Agreement";  the terms defined therein being used herein
as therein  defined),  among  GTECH  Corporation,  a Delaware  corporation  (the
"Borrower"),  the Lenders from time to time party thereto,  and Bank of America,
N.A., as Agent, the Issuing Bank and Swing Line Lender, The Bank of Nova Scotia,
as  Syndication  Agent,  Credit  Lyonnais New York Branch,  as  Co-Documentation
Agent, and Fleet National Bank, as Co-Documentation Agent.

         The assignor  identified on the signature page hereto (the  "Assignor")
and the assignee  identified on the signature page hereto (the "Assignee") agree
as follows:

         1.       (a)  Subject  to  paragraph  11,  effective  as  of  the  date
                  specified  on Schedule 1 hereto (the  "Effective  Date"),  the
                  Assignor hereby  irrevocably sells and assigns to the Assignee
                  without  recourse to the  Assignor,  and the  Assignee  hereby
                  irrevocably  purchases  and assumes from the Assignor  without
                  recourse to the Assignor, the interest described on Schedule 1
                  hereto  (the  "Assigned  Interest")  in and to the  Assignor's
                  rights and obligations under the Agreement.

         (a)      From and after the Effective Date, (i) the Assignee shall be a
                  party  under the  Agreement  and will have all the  rights and
                  obligations  of a  Lender  for all  purposes  under  the  Loan
                  Documents to the extent of the Assigned  Interest and be bound
                  by  the  provisions  thereof,  and  (ii)  the  Assignor  shall
                  relinquish  its rights and be  released  from its  obligations
                  under the  Agreement to the extent of the  Assigned  Interest.
                  The Assignor  and/or the  Assignee,  as agreed by the Assignor
                  and the Assignee,  shall  deliver,  in  immediately  available
                  funds,  any  applicable  assignment fee required under Section
                  12.1 of the Agreement.

         2. On the Effective  Date, the Assignee  shall pay to the Assignor,  in
immediately  available  funds,  an  amount  equal to the  purchase  price of the
Assigned Interest as agreed upon by the Assignor and the Assignee.

         3. From and after the Effective Date, the Agent shall make all payments
under the Agreement and the Notes,  if any, in respect of the Assigned  Interest
(including all payments of principal, interest and fees with respect thereto) to
the  Assignee.  The  Assignor  and  the  Assignee  shall  make  all  appropriate
adjustments in payments under the Agreement and such Notes,  if any, for periods
prior to the Effective Date directly between themselves.

         4.       The Assignor represents and warrants to the Assignee that:

                  (a)      the Assignor is the legal and beneficial owner of the
                           Assigned Interest,  and the Assigned Interest is free
                           and clear of any adverse claim;

                  (b)      the Assigned Interest listed on Schedule 1 accurately
                           and completely sets forth the  outstanding  amount of
                           all Loans and Participations relating to the Assigned
                           Interest as of the Effective Date;

                  (c)      it has the power and authority and the legal right to
                           make,   deliver  and  perform,   and  has  taken  all
                           necessary   action,   to  authorize  the   execution,
                           delivery  and  performance  of  this  Assignment  and
                           Acceptance, and any and all other documents delivered
                           by it in  connection  herewith  and  to  fulfill  its
                           obligations under, and to consummate the transactions
                           contemplated  by, this  Assignment and Acceptance and
                           the Loan Documents,  and no consent or  authorization
                           of, filing with, or other act by or in respect of any
                           Governmental  Authority,  is required  in  connection
                           herewith or therewith; and

                  (d)      this Assignment and Acceptance constitutes the legal,
                           valid and binding obligation of the Assignor.

The Assignor makes no  representation  or warranty and assumes no responsibility
with respect to the financial condition of the Borrower or any of its Affiliates
or the performance by the Borrower or any of its Affiliates of their  respective
obligations under the Loan Documents, and assumes no responsibility with respect
to any  statements,  warranties or  representations  made under or in connection
with any Loan Document or the  execution,  legality,  validity,  enforceability,
genuineness,  sufficiency  or value of any Loan Document other than as expressly
set forth above.

         5. The Assignee  represents  and warrants to the Assignor and the Agent
that:

                  (a) it is an Eligible Assignee;

                  (b) it has the full power and authority and the legal right to
          make,  deliver and perform,  and has taken all  necessary  action,  to
          authorize the execution,  delivery and  performance of this Assignment
          and  Acceptance,  and any and all other  documents  delivered by it in
          connection  herewith  and to fulfill  its  obligations  under,  and to
          consummate  the  transactions  contemplated  by, this  Assignment  and
          Acceptance and the Loan Documents, and no consent or authorization of,
          filing  with,  or  other  act by or in  respect  of  any  Governmental
          Authority, is required in connection herewith or therewith;

                  (c) this  Assignment  and  Acceptance  constitutes  the legal,
         valid and binding obligation of the Assignee;

                  (d)  under  applicable  laws  no tax  will be  required  to be
         withheld by the Agent or the  Borrower  with respect to any payments to
         be made to the  Assignee  hereunder  or under  any Loan  Document,  and
         unless  otherwise  indicated  in  the  space  opposite  the  Assignee's
         signature  below,  no tax  forms  described  in  Section  5.6(d) of the
         agreement are required to be delivered by the Assignee; and

                  (e)  the  Assignee  has  received  a copy  of  the  Agreement,
          together  with copies of the most recent  financial  statements of the
          Borrower  delivered  pursuant  thereto,  and such other  documents and
          information  as it has  deemed  appropriate  to make  its  own  credit
          analysis and decision to enter into this  Assignment  and  Acceptance.
          The Assignee has  independently and without reliance upon the Assignor
          or the Agent and based on such  information as the Assignee has deemed
          appropriate,  made its own credit  analysis and decision to enter into
          this Assignment and Acceptance.  The Assignee will,  independently and
          without  reliance  upon the Agent or any  Lender,  and based upon such
          documents and  information  as it shall deem  appropriate at the time,
          continue  to make its own  credit  decisions  in taking or not  taking
          action under the Agreement.

         5.       The Assignee  appoints and  authorizes  the Agent to take such
                  action as agent on its behalf and to exercise  such powers and
                  discretion  under the  agreement,  the other Loan Documents or
                  any other instrument or document  furnished pursuant hereto or
                  thereto as are  delegated  to the Agent by the terms  thereof,
                  together with such powers as are incidental thereto.

         6.       The Assignee  appoints and  authorizes  the agent to take such
                  action as agent on its behalf and to exercise  such powers and
                  discretion  under the  Agreement,  the other Loan Documents or
                  any other instrument or document  furnished pursuant hereto or
                  thereto as are  delegated  to the Agent by the terms  thereof,
                  together with such powers as are incidental thereto.

         7.       If  either  the  Assignee  or the  Assignor  desires a Note to
                  evidence  its Loans,  it shall  request the Agent to procure a
                  Note from the Borrower.

         8.       The  Assignor  and the  Assignee  agree to execute and deliver
                  such other instruments,  and take such other action, as either
                  party  may   reasonably   request  in   connection   with  the
                  transactions contemplated by this Assignment and Acceptance.

         9.       This Assignment and Acceptance shall be binding upon and inure
                  to the benefit of the parties and their respective  successors
                  and assigns;  provided,  however,  that the Assignee shall not
                  assign its rights or obligations  hereunder  without the prior
                  written consent of the Assignor and any purported  assignment,
                  absent such consent, shall be void.

         10.      This  Assignment  and  Acceptance may be executed by facsimile
                  signatures  with the same  force  and  effect  as if  manually
                  signed and may be executed in one or more  counterparts,  each
                  of which shall be deemed an original but all of which together
                  shall constitute one and the same instrument.  This Assignment
                  and   Acceptance   shall  be  governed  by  and  construed  in
                  accordance  with the laws of the state  specified  in  Section
                  12.14(a) of the Agreement.

         11.      The  effectiveness  of  the  assignment  described  herein  is
                  subject to:

                  (a)      if such consent is required by the Agreement, receipt
                           by the  Assignor  and the  Assignee of the consent of
                           the Agent, the Issuing Bank and the Swing Line Lender
                           and/or  the  Borrower  to  the  assignment  described
                           herein.  By  delivering a duly executed and delivered
                           copy of this  Assignment and Acceptance to the Agent,
                           the Assignor and the Assignee hereby request any such
                           required  consent and request that the Agent register
                           the  Assignee  as  a  Lender   under  the   Agreement
                           effective as of the Effective Date; and

                  (b)      receipt  by  the  Agent  of  (or  other  arrangements
                           acceptable   to  the  Agent  with   respect  to)  any
                           applicable assignment fee referred to in Section 12.1
                           of the  Agreement  and  any  tax  forms  required  by
                           Section 5.6(d) of the Agreement.

         By signing below, the Agent agrees to register the Assignee as a Lender
under the  Agreement,  effective  as of the  Effective  Date with respect to the
Assigned  Interest,   and  will  adjust  the  registered  Applicable  Commitment
Percentage of the Assignor  under the Agreement to reflect the assignment of the
Assigned Interest.

         12. Attached hereto as Schedule 2 is all contact,  address, account and
other administrative information relating to the Assignee.

         IN WITNESS WHEREOF,  the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers.

                                        Assignor:

                                        [NAME OF ASSIGNOR]


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


Tax forms required by Section 5.6(d)    Assignee:
of the Agreement included.
                                        [NAME OF ASSIGNEE]


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

In accordance with and subject to Section 12.1 of the
Credit  Agreement,  the  undersigned  consent  to the
foregoing assignment as of the Effective Date.

[BORROWER]


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




<PAGE>


BANK OF AMERICA, N.A., as Agent, Issuing
Bank and Swing Line Lender


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


<PAGE>


                     SCHEDULE 1 TO ASSIGNMENT AND ACCEPTANCE

                              THE ASSIGNED INTEREST


Effective Date:
               ----------------------------

                         Type and
                         amount of outstanding       Assigned Applicable
Assigned Commitment      Obligations assigned        Commitment Percentage
-------------------      --------------------        ---------------------

$                        [type] $                                %
 ------------------              ------------               -----



<PAGE>


                     SCHEDULE 2 TO ASSIGNMENT AND ACCEPTANCE

                             ADMINISTRATIVE DETAILS


(Assignee  to list  names of credit  contacts,  addresses,  phone and  facsimile
numbers, electronic mail addresses and account and payment information.)


<PAGE>


C-2
#413235.23

                                    EXHIBIT C

       NOTICE OF APPOINTMENT (OR REVOCATION) OF AUTHORIZED REPRESENTATIVE

         Reference  is  hereby  made  to  the  Credit   Agreement  dated  as  of
____________  __, 2001 (the  "Agreement")  among GTECH  Corporation,  a Delaware
corporation  (the  "Borrower"),  the Lenders (as defined in the Agreement),  and
Bank of  America,  N.A.,  as Agent for the Lenders  ("Agent"),  The Bank of Nova
Scotia,   as   Syndication   Agent,   Credit   Lyonnais  New  York  Branch,   as
Co-Documentation  Agent and Fleet  National  Bank,  as  Co-Documentation  Agent.
Capitalized terms used but not defined herein shall have the respective meanings
therefor set forth in the Agreement.

         The Borrower hereby nominates, constitutes and appoints each individual
named below as an Authorized Representative under the Loan Documents, and hereby
represents and warrants that (i) set forth opposite each such  individual's name
is a true and  correct  statement  of such  individual's  office  (to which such
individual has been duly elected or appointed),  a genuine specimen signature of
such  individual  and an address  for the  giving of notice,  and (ii) each such
individual  has  been  duly  authorized  by the  Borrower  to act as  Authorized
Representative under the Loan Documents:

   Name and Address                   Office               Specimen Signature


-----------------------------   --------------------    ------------------------
-----------------------------
-----------------------------


-----------------------------   --------------------    ------------------------
-----------------------------
-----------------------------



Borrower  hereby revokes  (effective upon receipt hereof by the Agent) the prior
appointment of ________________ as an Authorized Representative.


<PAGE>



         This the ___ day of __________________, 20__.


                                        GTECH CORPORATION

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




<PAGE>



                                   EXHIBIT D-1

                            FORM OF BORROWING NOTICE

To:      Bank of America, N.A.,
         as Agent
         101 North Tryon Street, 15th Floor
         NC1-001-15-14
         Charlotte, North Carolina  28255
         Attention: Agency Services
         Telefacsimile:  (704) 409-0296

         Reference is hereby made to the Credit  Agreement dated as of _________
__, 2001 (the "Agreement") among GTECH Corporation,  a Delaware corporation (the
"Borrower"),  the Lenders (as  defined in the  Agreement),  and Bank of America,
N.A.,  as  Agent  for  the  Lenders  ("Agent"),  The  Bank of  Nova  Scotia,  as
Syndication Agent, Credit Lyonnais New York Branch, as  Co-Documentation  Agent,
and Fleet National Bank, as Co-Documentation  Agent.  Capitalized terms used but
not defined herein shall have the respective  meanings therefor set forth in the
Agreement.

         The Borrower through its Authorized  Representative hereby gives notice
to the Agent that  Loans of the type and  amount set forth  below be made on the
date indicated:


<TABLE>
<CAPTION>
Type of Loan                        Interest                  Aggregate
(check one)                         Period(1)                 Amount(2)                 Date of Loan(3)
 ---------                          ---------                 ---------                 ---------------

<S>                              <C>                       <C>                          <C>
--------------                      ---------------           ----------------------    ------------------------
Base Rate Loan

Eurodollar Rate Loan
                                    ---------------           ----------------------    ------------------------


-----------------------
</TABLE>

(1)      For any Eurodollar Rate Loan, one, two, three, six or twelve months.

(2)      Must be  $5,000,000  or if greater an integral  multiple  of  $100,000,
         unless a Base Rate Refunding Loan.

(3)      At least three (3) Business Days later if a Eurodollar Rate Loan.

         The Borrower  hereby  requests that the proceeds of Loans  described in
this  Borrowing  Notice be made  available to the  Borrower as follows:  [insert
transmittal instructions].




<PAGE>


         The undersigned hereby certifies that:


         1. No Default or Event of Default has occurred and is continuing either
now or after giving effect to the borrowing described herein; and

         2. All the  representations  and warranties set forth in Article VII of
the Agreement and in the Loan Documents  (other than those  expressly  stated to
refer to a  particular  date) are true and correct as of the date hereof  except
that  the  reference  to the  financial  statements  in  Section  7.6(a)  of the
Agreement shall be deemed to refer to those  financial  statements most recently
delivered to you pursuant to Section 8.1 of the Agreement  (it being  understood
that any financial statements delivered pursuant to Section 8.1(b) have not been
certified by independent public accountants).

         3. All conditions  contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full .

                                       GTECH CORPORATION


                                       BY:
                                          --------------------------------------
                                                Authorized Representative

                                       DATE:
                                            ------------------------------------




<PAGE>


                                   EXHIBIT D-2

                   FORM OF BORROWING NOTICE--SWING LINE LOANS

To:      Bank of America, N.A.,
         101 North Tryon Street, 15th Floor
         NC1-001-15-14
         Charlotte, North Carolina  28255
         Attention: Agency Services
         Telefacsimile:  (704) 409-0296

         Reference  is hereby made to the Credit  Agreement  dated as of _______
__, 2001 (the "Agreement") among GTECH Corporation,  a Delaware corporation (the
"Borrower"),  the Lenders (as  defined in the  Agreement),  and Bank of America,
N.A.,  as  Agent  for  the  Lenders  ("Agent"),  The  Bank of  Nova  Scotia,  as
Syndication Agent, Credit Lyonnais New York Branch, as  Co-Documentation  Agent,
and Fleet National Bank, as Co-Documentation  Agent.  Capitalized terms used but
not defined herein shall have the respective  meanings therefor set forth in the
Agreement.

         The Borrower through its Authorized  Representative hereby gives notice
to Bank of America  that a Swing Line Loan of the amount set forth below be made
on the date indicated:

           Amount(1)                          Date of Loan

         -----------------                    ---------------- ----, ------

-----------------------

(1)      Must be $500,000 or if greater an integral multiple of $100,000, unless
         a Base Rate Refunding Loan.

         The  Borrower  hereby  requests  that the  proceeds of Swing Line Loans
described in this Borrowing Notice be made available to the Borrower as follows:
[insert transmittal instructions] .






         The undersigned hereby certifies that:

         1. No Default or Event of Default has occurred and is continuing either
now or after giving effect to the borrowing described herein; and

          2. All the  representations and warranties set forth in Article VII of
the Agreement and in the Loan Documents  (other than those  expressly  stated to
refer to a  particular  date) are true and correct as of the date hereof  except
that  the  reference  to the  financial  statements  in  Section  7.6(a)  of the
Agreement shall be deemed to refer to those  financial  statements most recently
delivered to you pursuant to Section 8.1 of the Agreement  (it being  understood
that any financial statements delivered pursuant to Section 8.1(b) have not been
certified by independent public accountants).

         3. All conditions  contained in the Agreement to the making of any Loan
requested hereby have been met or satisfied in full.




                                     BY:
                                        ----------------------------------------
                                               Authorized Representative

                                     DATE:
                                          --------------------------------------




<PAGE>


                                    EXHIBIT E

                     FORM OF INTEREST RATE SELECTION NOTICE

To:      Bank of America, N.A., as Agent
         101 North Tryon Street, 15th Floor
         NC1-001-15-14
         Charlotte, North Carolina  28255
         Attention:  Agency Services
         Telefacsimile:  (704) 409-0296

         Reference is hereby made to the Credit  Agreement  dated as of June 22,
2001 (the  "Agreement")  among GTECH  Corporation,  a Delaware  corporation (the
"Borrower"),  the Lenders (as  defined in the  Agreement),  and Bank of America,
N.A.,  as  Agent  for  the  Lenders  ("Agent"),  The  Bank of  Nova  Scotia,  as
Syndication Agent, Credit Lyonnais New York Branch, as  Co-Documentation  Agent,
and Fleet National Bank, as Co-Documentation  Agent.  Capitalized terms used but
not defined herein shall have the respective  meanings therefor set forth in the
Agreement.

         The Borrower through its Authorized  Representative hereby gives notice
to the Agent of the following selection of a type of Loan and Interest Period:

<TABLE>
<CAPTION>
Type of Loan                        Interest                  Aggregate
(check one)                         Period(1)                 Amount(2)                 Date of Loan(3)
 ---------                          ------                    ------                    ------------

<S>                               <C>                         <C>                      <C>
Revolving Loan
--------------
Base Rate Loan
                                    ---------------           --------------------      ------------------------

Eurodollar Rate Loan
                                    ---------------           --------------------      ------------------------

</TABLE>


(1)      For any Eurodollar Rate Loan, one, two, three, six or twelve months.

(2)      Must be  $5,000,000  or if greater an integral  multiple  of  $100,000,
         unless a Base Rate Refunding Loan.

(3)      At least three (3) Business Days later if a Eurodollar  Rate Loan;  may
         be same Business Day in case of a Base Rate Loan.


                                           GTECH CORPORATION


                                           BY:
                                              ----------------------------------
                                                    Authorized Representative

                                           DATE:
                                                --------------------------------




<PAGE>


                                   EXHIBIT F-1

                             FORM OF REVOLVING NOTE

                                 Promissory Note
                                (Revolving Loan)

$----------------------                                ---------, --------------

                                                                           2001
                                                         ----------- ----,


         FOR VALUE RECEIVED,  GTECH Corporation,  a Delaware  corporation having
its principal  place of business  located in West  Greenwich,  Rhode Island (the
"Borrower"),     hereby     promises     to    pay    to    the     order     of
_______________________________________________    (the   "Lender"),    in   its
individual  capacity,  at the office of BANK OF AMERICA,  N.A., as agent for the
Lenders  (the  "Agent"),  located  at 101  North  Tryon  Street,  NC1-001-15-04,
Charlotte,  North  Carolina 28255 (or at such other place or places as the Agent
may designate in writing) at the times set forth in the Credit  Agreement  dated
as of  ________________,  2001 among the Borrower,  the  financial  institutions
party thereto (collectively,  the "Lenders") the Agent, The Bank of Nova Scotia,
as  Syndication  Agent,  Credit  Lyonnais New York Branch,  as  Co-Documentation
Agent, and Fleet National Bank, as Co-Documentation Agent (the "Agreement" --all
capitalized  terms  not  otherwise  defined  herein  shall  have the  respective
meanings set forth in the  Agreement),  in lawful money of the United  States of
America,   in   immediately   available   funds,   the   principal   amount   of
______________________________ ____________________________ ($_____________) or,
if less than such principal amount, the aggregate unpaid principal amount of all
Revolving Loans made by the Lender to the Borrower  pursuant to the Agreement on
the Revolving  Credit  Termination  Date or such earlier date as may be required
pursuant to the terms of the Agreement, and to pay interest from the date hereof
on the unpaid  principal  amount hereof,  in like money, at said office,  on the
dates and at the rates provided in Articles II and IV of the  Agreement.  All or
any  portion of the  principal  amount of Loans may be prepaid or required to be
prepaid as provided in the Agreement.

         The Credit  Agreement  provides for the acceleration of the maturity of
this Revolving Note upon the occurrence of certain events and for prepayments of
Revolving Loans upon the terms and conditions  specified therein.  If payment of
all sums due hereunder is accelerated  under the terms of the Agreement or under
the terms of the other Loan Documents executed in connection with the Agreement,
the then  remaining  principal  amount and accrued but unpaid  interest  thereon
evidenced by this  Revolving  Note shall bear interest which shall be payable on
demand at the Default Rate, or the maximum rate permitted under  applicable law,
if lower, until such principal and interest have been paid in full.  Further, in
the event of such acceleration,  this Revolving Note, and all other indebtedness
of the Borrower to the Lender shall become immediately due and payable,  without
presentation,  demand,  protest  or notice of any kind,  all of which are hereby
waived by the Borrower.

         In the event this  Revolving Note is not paid when due at any stated or
accelerated  maturity,  the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest due hereunder thereon at the rates set forth above.

         Interest hereunder shall be computed as provided in the Agreement.

         This  Revolving  Note is one of the Revolving  Notes referred to in the
Agreement and is issued pursuant to and entitled to the benefits and security of
the Agreement to which reference is hereby made for a more complete statement of
the terms and conditions upon which the Revolving Loans evidenced hereby were or
are made  and are to be  repaid.  This  Revolving  Note is  subject  to  certain
restrictions on transfer or assignment as provided in the Agreement.  Payment of
all amounts due under this Note is guaranteed by each Guarantor  pursuant to the
Facility Guaranties.

         This  Revolving  Note shall be governed by and  construed in accordance
with the laws of the State of New York.

         All Persons bound on this obligation,  whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the  full  extent  permitted  by law all  defenses  based  on  suretyship  or
impairment of collateral  and the benefits of all  provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of  liability  hereon  until  judgment  be  obtained  and
execution issued against any other of them and returned  unsatisfied or until it
can be shown that the maker or any other party hereto had no property  available
for the  satisfaction  of the debt  evidenced by this  instrument,  or until any
other  proceedings  can be had against any of them, also their right, if any, to
require  the  holder  hereof to hold as  security  for this  Revolving  Note any
collateral  deposited  by any of said Persons as  security.  Protest,  notice of
protest, notice of dishonor,  diligence or any other formality are hereby waived
by all parties bound hereon.


                            [Signature page follows.]



         IN WITNESS  WHEREOF,  the Borrower has caused this Revolving Note to be
made,  executed and delivered by its duly  authorized  representative  as of the
date and year first above written, all pursuant to authority duly granted.


                                       GTECH CORPORATION


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



<PAGE>

                                   EXHIBIT F-2

                             FORM OF SWING LINE NOTE

                                 Promissory Note
                                (Swing Line Loan)


$25,000,000                                            ---------, --------------

                                                                           2001
                                                         ----------- ----,


         FOR VALUE RECEIVED,  GTECH Corporation,  a Delaware  corporation having
its principal  place of business  located in West  Greenwich,  Rhode Island (the
"Borrower"), hereby promises to pay to the order of BANK OF AMERICA, N.A. ("Bank
of America"),  in its individual capacity,  at Bank of America's offices located
at 101 North Tryon Street, NC1-001-15-04, Charlotte, North Carolina 28255 (or at
such other  place or places as Bank of America may  designate)  at the times set
forth in the Credit  Agreement dated as of ________ __, 2001 among the Borrower,
the financial institutions party thereto (collectively,  the "Lenders") and Bank
of America,  N.A.,  as agent for the  Lenders  (the  "Agent"),  The Bank of Nova
Scotia,   as   Syndication   Agent,   Credit   Lyonnais  New  York  Branch,   as
Co-Documentation  Agent, and Fleet National Bank, as Co-Documentation  Agent (as
amended,  supplemented or otherwise  modified from time to time, the "Agreement"
-- all capitalized  terms not otherwise defined herein shall have the respective
meanings set forth in the  Agreement),  in lawful money of the United  States of
America,  in immediately  available  funds,  the principal amount of TWENTY FIVE
MILLION AND NO/100 DOLLARS  ($25,000,000) or if less than such principal amount,
the aggregate  unpaid  principal  amount of all Swing Line Loans made by Bank of
America to the  Borrower  pursuant  to the  Agreement  on the  Revolving  Credit
Termination  Date or such earlier date as may be required  pursuant to the terms
of the  Agreement,  and to pay  interest  from the  date  hereof  on the  unpaid
principal amount hereof,  in like money, at said office, on the dates and at the
rates provided in Articles II and IV of the Agreement. All or any portion of the
principal  amount  of  Swing  Line  Loans  may be  prepaid  as  provided  in the
Agreement.

         If payment of all sums due hereunder is accelerated  under the terms of
the  Agreement  or under the  terms of the  other  Loan  Documents  executed  in
connection with the Agreement,  the then remaining  principal amount and accrued
but unpaid  interest shall bear interest which shall be payable on demand at the
Default  Rate, or the maximum rate  permitted  under  applicable  law, if lower,
until such principal and interest have been paid in full.  Further, in the event
of such  acceleration,  this Note, and all other indebtedness of the Borrower to
the Lender  shall become  immediately  due and  payable,  without  presentation,
demand,  protest or notice of any kind,  all of which are  hereby  waived by the
Borrower.

         In the  event  this  Note  is not  paid  when  due  at  any  stated  or
accelerated  maturity,  the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees, and
interest thereon at the rates set forth above.

         Interest  hereunder  shall be computed  (i) in the case of a Eurodollar
Loan,  on the  basis  of a 360 day  year for the  actual  number  of days in the
interest  period,  and (ii) in the case of a Base Rate Loan, on the basis of the
actual number of days elapsed in a 365/366 day year.

         This Note is the Swing Line Note  referred to in the  Agreement  and is
issued pursuant to and entitled to the benefits and security of the Agreement to
which  reference is hereby made for a more  complete  statement of the terms and
conditions upon which the Swing Line Loans evidenced hereby were or are made and
are to be repaid.  This Note is subject to certain  restrictions  on transfer or
assignment as provided in the  Agreement.  Payment of all amounts due under this
Note is guaranteed by each Guarantor pursuant to the Facility Guaranties.

         This Note shall be governed by and  construed  in  accordance  with the
laws of the State of New York.

         All Persons bound on this obligation,  whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the  full  extent  permitted  by law all  defenses  based  on  suretyship  or
impairment of collateral  and the benefits of all  provisions of law for stay or
delay of execution or sale of property or other satisfaction of judgment against
any of them on account of  liability  hereon  until  judgment  be  obtained  and
execution issued against any other of them and returned  unsatisfied or until it
can be shown that the maker or any other party hereto had no property  available
for the  satisfaction  of the debt  evidenced by this  instrument,  or until any
other  proceedings  can be had against any of them, also their right, if any, to
require  the  holder  hereof to hold as  security  for this Note any  collateral
deposited by any of said Persons as security. Protest, notice of protest, notice
of dishonor,  diligence or any other  formality are hereby waived by all parties
bound hereon.


                            [Signature page follows.]



         IN WITNESS  WHEREOF,  the  Borrower  has  caused  this Note to be made,
executed and delivered by its duly authorized  representative as of the date and
year first above written, all pursuant to authority duly granted.


                                           GTECH CORPORATION


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




<PAGE>





                                    EXHIBIT G

                      FORM OF OPINION OF BORROWER'S COUNSEL




                                                             June __, 2001



To Each of the Agent
   and the Lenders
   Listed on Schedule I
   Attached Hereto

         Re:      $300,000,000 Revolving Credit, Swing Line and Letter of Credit
                  Facilities to GTECH Corporation

Ladies and Gentlemen:

         We have  acted as  special  counsel  to GTECH  Corporation,  a Delaware
corporation (the "Borrower"), GTECH Holdings Corporation, a Delaware corporation
(the "Parent"),  GTECH Rhode Island Corporation, a Rhode Island corporation (the
"Rhode  Island  Guarantor"),  and GTECH Latin  America  Corporation,  a Delaware
corporation (the "Latin America  Guarantor"  which,  together with the Borrower,
the Parent, and the Rhode Island Guarantor,  may be collectively  referred to as
the "Obligors"), in connection with each of the revolving credit facility, swing
line  facility  and  letter  of  credit  facility  (collectively,   the  "Credit
Facilities")  being made  available  by you to the  Borrower on this date in the
maximum  principal  amount  outstanding of  $300,000,000  pursuant to the Credit
Agreement  of even date  herewith  among the  Borrower,  Bank of America,  N.A.,
individually and as Administrative Agent, The Bank of Nova Scotia,  individually
and as Syndication Agent,  Credit Lyonnais New York Branch,  individually and as
Co-Documentation    Agent,   Fleet   National   Bank,    individually   and   as
Co-Documentation  Agent,  and the other  Lenders party thereto from time to time
(the "Credit Agreement").

         We have also acted as special  counsel to (a) the Parent in  connection
with the  Guaranty  Agreement of even date  herewith  between the Parent and the
Agent for the  benefit  of the  Lenders  to the Credit  Agreement  (the  "Parent
Guaranty") and (b) the Rhode Island Guarantor and the Latin America Guarantor in
connection  with the Guaranty  Agreement of even date  herewith  among the Rhode
Island Guarantor,  the Latin America Guarantor, and the Agent for the benefit of
the Lenders to the Credit Agreement (the "Subsidiary Guaranty).

         We have been  requested  by the Borrower to deliver this opinion to you
in accordance  with the condition set forth in Section  6.1(a)(ii) of the Credit
Agreement.  All  capitalized  terms not otherwise  defined herein shall have the
meanings given to such terms in the Credit Agreement.


         As such counsel, we have reviewed the following documents:

                  1.       the Credit Agreement;

                  2.       the Notes;

                  3.       the Parent Guaranty; and

                  4.       the Subsidiary Guaranty.


The Credit Agreement and the Notes are  collectively  referred to hereinafter as
the "Borrower  Loan  Documents".  All the foregoing  documents are  collectively
referred to hereinafter as the "Loan Documents".


         In  these  capacities,  we have  examined  and are  familiar  with  the
following documents relating to the Borrower:

         a.       Certificate of Good Standing issued by the Delaware  Secretary
                  of State on June 11, 2001;

         b.       Restated  Certificate of Incorporation dated as of January 13,
                  1993, certified by the Delaware Secretary of State on June 11,
                  2001;

         c.       Amended  and  Restated  Bylaws as  certified  in the  Borrower
                  Secretary's Certificate (as hereinafter defined);

         d.       Certificate  of  Good  Standing  issued  by the  Rhode  Island
                  Secretary of State on June 12, 2001;

         e.       Certificate  of  Status  Foreign  Corporation  issued  by  the
                  California Secretary of State on June 13, 2001;

         f.       Certificate of Legal Existence issued by the Georgia Secretary
                  of State on June 12, 2001;

         g.       Certificate of Good Standing  issued by the New York Secretary
                  of State on June 8, 2001;

         h.       Certificate of Good Standing  issued by the Texas Secretary of
                  State on June 12, 2001; and

         i.       Certificate of Assistant  Secretary of even date herewith (the
                  "Borrower Secretary's Certificate"),  relating to, among other
                  things,   authorization   to  enter   into  the   transactions
                  contemplated  by the Borrower Loan Documents and execution and
                  delivery of the Borrower Loan Documents and related  documents
                  and instruments.


         In  these  capacities,  we have  examined  and are  familiar  with  the
following documents relating to the Parent:

         j.       Certificate of Good Standing issued by the Delaware  Secretary
                  of State on June 11, 2001;

         k.       Restated  Certificate of Incorporation dated as of January 22,
                  1990, as amended, certified by the Delaware Secretary of State
                  on June 11, 2001;

         l.       Amended  and  Restated  Bylaws  as  certified  in  the  Parent
                  Secretary's Certificate (as hereinafter defined);

         m.       Certificate  of  Good  Standing  issued  by the  Rhode  Island
                  Secretary of State on June 12, 2001; and

         n.       Certificate of Assistant  Secretary of even date herewith (the
                  "Parent  Secretary's  Certificate"),  relating to, among other
                  things,   authorization   to  enter   into  the   transactions
                  contemplated by the Parent Guaranty and execution and delivery
                  of the Parent Guaranty and related documents and instruments.


         In  these  capacities,  we have  examined  and are  familiar  with  the
following documents relating to the Rhode Island Guarantor:

         o.       Certificate  of  Good  Standing  issued  by the  Rhode  Island
                  Secretary of State on June 12, 2001;

         p.       Certificate  of  Incorporation  dated as of August  13,  1997,
                  certified by the Rhode Island Secretary of State;

         q.       Bylaws as certified in the Rhode Island Guarantor  Secretary's
                  Certificate (as hereinafter defined); and

         r.       Certificate of Assistant  Secretary of even date herewith (the
                  "Rhode Island Guarantor Secretary's Certificate") relating to,
                  among   other   things,   authorization   to  enter  into  the
                  transactions  contemplated  by  the  Subsidiary  Guaranty  and
                  execution and delivery of the Subsidiary  Guaranty and related
                  documents and instruments.

         In  these  capacities,  we have  examined  and are  familiar  with  the
following documents relating to the Latin America Guarantor:

         s.       Certificate of Good Standing issued by the Delaware  Secretary
                  of State on June 12, 2001;

         t.       Certificate  of  Incorporation  dated as of November 28, 1989,
                  certified by the Delaware Secretary of State;

         u.       Bylaws as certified in the Latin America Guarantor Secretary's
                  Certificate (as hereinafter defined); and

         v.       Certificate of Assistant  Secretary of even date herewith (the
                  "Latin America Guarantor  Secretary's  Certificate")  relating
                  to,  among  other  things,  authorization  to  enter  into the
                  transactions  contemplated  by  the  Subsidiary  Guaranty  and
                  execution and delivery of the Subsidiary  Guaranty and related
                  documents and instruments.


         In addition,  for  purposes of giving this  opinion,  we have  examined
originals or copies,  certified or otherwise identified to our satisfaction,  of
certificates   of  public   officials,   certificates   of  officials  or  other
representatives  of the  Obligors,  and such  other  documents,  instruments  or
certificates  or have made such  inquiries as we have deemed  appropriate as the
basis for the opinions expressed below.

         We  have  assumed,  without  independent  verification,  that:  (i) all
signatures are genuine  (other than the  signatures of the  Obligors),  (ii) the
competency  of the  individual  signatories  to the Loan  Documents,  (iii)  all
documents  submitted  to us as  originals  are  authentic,  (iv)  all  documents
submitted to us as copies conform with the originals of those documents, (v) all
documents  examined by us are accurate and complete,  (vi) the legal capacity of
all persons  (other than the  Obligors)  executing  documents,  (vii) the proper
indexing and accuracy of all public  records and  documents,  and (viii) the due
issuance and validity of all laws, ordinances and regulations.

         We assume for purposes of this opinion that each of the Loan  Documents
has been duly authorized,  executed and delivered by each person (other than the
Obligors)  and  constitutes  a valid  and  binding  obligation  of such  person,
enforceable  against it in accordance  with its terms. We are not expressing any
opinion as to, and hereby assume that all actions have been taken to effect your
compliance  with any state or  federal  laws (or  regulations  of any  political
subdivision  thereof)  applicable  to the  transactions  described  in the  Loan
Documents.  We assume throughout that you have and will exercise your rights and
remedies  under  the Loan  Documents  in good  faith  and in a  manner  which is
commercially  reasonable.  We assume  that the  Borrower  has  received  or will
receive  the  proceeds  of the Loan and that the  proceeds  will be used for the
purposes set forth in the Credit Agreement.

         The opinions  expressed below are made in reliance upon the accuracy of
the  representations,  warranties,  and other information  contained in the Loan
Documents and otherwise  obtained  during our  examination  of the documents and
other matters described above, including,  without limitation,  the facts stated
in the Certificate dated as of even date herewith executed by the Obligors, (the
"Certificate"),  a copy of which is attached  hereto as Exhibit A.  Whenever our
opinion refers to "the best of our knowledge",  it is based solely on the actual
knowledge of attorneys who are currently  partners or employees of this firm and
who are directly  involved in the  representation  of the Obligors in connection
with the  transactions  described  in the Loan  Documents.  Except to the extent
expressly set forth herein, we have not undertaken any independent investigation
to determine the existence or absence of such facts,  and no inference as to our
knowledge  of the  existence  or absence of such facts  should be drawn from our
representation  of  Obligors.  In  particular,  we  advise  you that we have not
searched the dockets of any court or undertaken a judgment  search for judgments
against the Obligors in any jurisdiction.

         The opinions hereinafter expressed are qualified to the extent that (i)
the  enforceability  of  any  agreement  or  instrument  or  any  right  granted
thereunder  may be subject to or affected  by, any  bankruptcy,  reorganization,
insolvency,   avoidance,   fraudulent   conveyance,   arrangement,   moratorium,
marshaling  or other  similar  laws  relating  to or  affecting  the  rights  of
creditors, generally, (ii) the remedy of injunctive relief, specific performance
and any other equitable  remedies may be unavailable in any  jurisdiction or may
be withheld as a matter of judicial discretion,  (iii) the enforceability of any
agreement  or  instrument  or any right  granted  thereunder  may be  subject to
general  principles  of  equity,  including,  without  limitation,  concepts  of
materiality,  reasonableness, good faith and fair dealing (regardless of whether
enforceability  be  considered  in a proceeding  in equity or in law) and to the
discretion of the court before which  proceedings  thereof may be brought,  (iv)
the  enforceability  of  any  agreement  or  instrument  or  any  right  granted
thereunder  may be subject to public policy  considerations  or court  decisions
which may limit rights to obtain indemnification,  (v) the enforceability of any
agreement or instrument or any right  granted  thereunder  may be subject to the
enforceability  under  certain  circumstances  under  applicable  law  or  court
decisions  of  certain  provisions  in  the  Loan  Documents   expressly  or  by
implication  waiving  broadly or vaguely stated  rights,  unknown future rights,
defenses to obligations or rights granted by law, where such waivers are against
public  policy  or  prohibited  by  law,  and  (vi)  certain  rights,  remedies,
forfeitures, penalties, waivers or elections contained in the Loan Documents may
be rendered  ineffective  or limited by  applicable  laws or judicial  decisions
governing  such  provisions,  but the  application  thereof  would  not,  in our
opinion,  render the Loan Documents  invalid as a whole,  or render the remedies
provided for therein, taken as a whole, inadequate for the practical realization
of the benefits intended to be provided thereby.

         In addition, we express no opinion: (a) as to the enforceability of any
provision providing for indemnification  insofar as such  indemnification  would
violate public policy; (b) as to the binding effect,  validity or enforceability
of any waiver of constitutional  rights contained in the Loan Documents;  or (c)
as to the  binding  effect  or  validity  of any  provision  in any of the  Loan
Documents which provides that delays by any of the Lenders will not operate as a
waiver.

         In this  regard,  we are  advised  that you  understand  the  potential
problems  posed by the  execution,  delivery and  performance  of the Subsidiary
Guaranty by the Rhode Island  Guarantor  and by the Latin  America  Guarantor to
secure the liability of the Borrower under the Borrower Loan Documents. Although
we assume that the Rhode Island  Guarantor  and the Latin  America  Guarantor is
each receiving  valuable  consideration  for its  undertaking,  the Rhode Island
Guarantor and the Latin America  Guarantor is each  undertaking an assumption of
liability to repay  borrowings  that will be utilized by the  Borrower.  In this
situation,  if a bankruptcy  proceeding or litigation involving the claims of an
unpaid creditor should be commenced  against the Rhode Island  Guarantor  and/or
the Latin America  Guarantor,  there is a possibility that a trustee or creditor
of the Rhode Island  Guarantor or the Latin America  Guarantor  will assert that
the  execution  and  delivery of the  Subsidiary  Guaranty  by the Rhode  Island
Guarantor  and  by  the  Latin  America   Guarantor   constituted  a  fraudulent
conveyance. The case law in this area is limited and not uniform, and there is a
possibility that a court could invalidate the Subsidiary Guaranty.


         You have not asked us to pass upon your  power and  authority  to enter
into the Loan Documents or to effect the transactions  contemplated thereby, and
for purposes of this opinion we are assuming  that each of you has all requisite
power and authority and has taken all necessary  corporate  action to enter into
the Loan Documents,  and that each of the Loan Documents constitutes a valid and
binding obligation of you enforceable  against you in accordance with its terms.
We express no opinion as to whether  you must be  qualified  or  licensed  to do
business in the State of New York or the State of Rhode Island.


         We have not passed on, are not passing on, and assume no responsibility
for the accuracy,  completeness,  or fairness of any statement,  information, or
financial  data  furnished  to you by the  Obligors  or any  other  party to the
transactions   described   herein.   Our   assumption   of  certain   facts  and
representations as set forth above does not constitute our  representation  that
we have independently  verified such facts or representations,  or the accuracy,
completeness  or fairness  of any  statement,  information,  or  financial  data
furnished to you in this matter. We express no opinion as to the  reasonableness
of our assumptions  made herein,  although (not having conducted any independent
investigation) nothing has come to our attention which would lead us to question
the reasonableness of any assumption made in this opinion.


         We have not made or undertaken to make any  investigation  of the state
of title to the  property  described  in the Loan  Documents,  and we express no
opinion with respect to the adequacy of the  description of any real or personal
property in the Loan  Documents,  the state of title to such  property or to the
perfection or priority of any liens created by the Loan  Documents.  No opinions
are  expressed  herein  as to the  compliance  of any  such  property  with  any
applicable  zoning,  subdivision,   building,  safety,  environmental,   health,
hazardous waste, wetlands protection or other applicable laws or regulations.


         We express no opinion as to the  solvency of the  Obligors or any other
person,   and  we  assume  for  purposes  of  this  opinion  that   transactions
contemplated by the Loan Documents do not render any of such persons insolvent.


         We are  members of the bar of the States of New York and Rhode  Island,
and we express no opinion as to the laws of any state or jurisdiction other than
the States of New York and Rhode  Island and the  general  corporate  law of the
State of  Delaware  and  federal law of the United  States.  We also  express no
opinion  as to  whether a federal  court  (whether  sitting in or outside of the
State of New York) or a state court  outside of the State of New York would give
effect to the choice of New York law provided for in the Loan Documents.

         Based on and subject to the foregoing, we are of the opinion that:

         1. The Borrower,  the Parent and the Latin America  Guarantor is each a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and is duly qualified to transact business as a foreign
corporation  and is in good  standing  in all other  jurisdictions  in which the
nature of its business  requires such  qualification and where the failure to be
so qualified or in good standing would have a Material Adverse Effect.

         2. The Rhode Island Guarantor is a corporation duly organized,  validly
existing and in good standing under the laws of the State of Rhode Island and is
duly  qualified  to transact  business as a foreign  corporation  and is in good
standing in all other jurisdictions in which the nature of its business requires
such  qualification and where the failure to be so qualified or in good standing
would have a Material Adverse Effect.

         3. Each of the Obligors has full  corporate  power and authority to own
its assets and conduct the  businesses in which it is now engaged,  and has full
corporate  power and authority to enter into each of the Loan Documents to which
it is a party and to perform its respective obligations thereunder.

         4. Each of the Borrower Loan Documents has been duly  authorized by the
Board of Directors of the Borrower and executed and  delivered by the  Borrower,
and  constitutes  the  legal,  valid and  binding  obligation  of the  Borrower,
enforceable against the Borrower in accordance with its respective terms.

         5.  The  Parent  Guaranty  has been  duly  authorized  by the  Board of
Directors  of  the  Parent  and  executed  and  delivered  by  the  Parent,  and
constitutes the legal, valid and binding obligations of the Parent,  enforceable
against the Parent in accordance with its terms.

         6. The  Subsidiary  Guaranty has been duly  authorized  by the Board of
Directors of the Rhode Island  Guarantor and executed and delivered by the Rhode
Island Guarantor,  and constitutes the legal,  valid and binding  obligations of
the Rhode Island  Guarantor,  enforceable  against the Rhode Island Guarantor in
accordance with its terms.

         7. The  Subsidiary  Guaranty has been duly  authorized  by the Board of
Directors of the Latin America Guarantor and executed and delivered by the Latin
America Guarantor,  and constitutes the legal, valid and binding  obligations of
the Latin America Guarantor,  enforceable against the Latin America Guarantor in
accordance with its terms.

         8. Neither the execution or delivery of, nor performance by each of the
Obligors of its respective  obligations  under the Loan  Documents,  (a) does or
will conflict with, violate or constitute a breach of (i) its charter or bylaws,
(ii) any laws,  rules or  regulations  applicable  to such  Obligor  which  such
conflict, violation or breach would have a Material Adverse Effect, or (iii) any
contract,  agreement,  indenture, lease, instrument, other documents,  judgment,
writ,  determination,  order or decree to which  such  Obligor  is a party or by
which such Obligor or any of its properties is bound,  the consequences of which
in any of the above cases would have a Material Adverse Effect,  or (b) requires
the  prior  consent  of,  notice to or  filing  with any  court or  Governmental
Authority to the extent that failure  thereof does not cause a Material  Adverse
Effect,  or (c) does or will result in the creation or  imposition  of any Lien,
pledge,  charge or  encumbrance of any nature upon or with respect to any of the
properties, real or personal, of the Obligors.

         9. Except as set forth in (a) the Loan  Documents,  (b) the  Borrower's
Form 10-K filed with the Securities  and Exchange  Commission for the Borrower's
fiscal year ended February 24, 2001 and (c) the Certificate, there is no pending
or, to the best of our knowledge,  threatened,  action,  suit,  investigation or
proceeding against any Obligor, nor, to the best of our knowledge,  is there any
basis  therefore,   before  or  by  any  court  or  Governmental  Authority,  or
governmental department,  commission, board, bureau, instrumentality,  agency or
arbitral  authority  an adverse  result in which  would have a Material  Adverse
Effect,  including,  without limitation,  any action,  suit,  investigation,  or
proceeding under any environmental or labor law.

         10.  None of the  transactions  contemplated  by the Credit  Agreement,
including,  without limitation, the use of the Letters of Credit or the proceeds
of any Advance  made to the  Borrower,  will violate or result in a violation of
Regulation  T, U or X of the Board of Governors of the Federal  Reserve  System,
and,  to the best of our  knowledge,  the  Borrower  does not own or  intend  to
purchase or carry any "margin securities" as defined in said regulations.

         We render no opinion on matters  except as  specifically  stated.  This
opinion speaks as of the date of issuance,  and we assume no  responsibility  to
update or supplement  this opinion to reflect any facts or  circumstances  which
may  hereafter  come to our attention or any changes in laws which may hereafter
occur.

         Our opinions  contained herein are rendered solely for your information
in connection  with the Loan Documents and the related  documents or instruments
thereto and may not be relied upon in any manner by any other person,  entity or
agency, or by you for any other purpose.  Without our prior written consent, our
opinions  herein  shall not be  quoted  or  otherwise  included,  summarized  or
referred  to in any  publication  or  document,  in whole  or in  part,  for any
purposes whatsoever,  or furnished to any other person, entity or agency, except
(i) as may be required by you by applicable  law or regulation or request of any
Governmental  Authority or regulatory  agencies,  and (ii) pursuant to any legal
process  to which you are  subject  or in  connection  with any legal  action or
proceeding  with  respect to the Loan  Documents  and the related  documents  or
instruments thereto.


                       The Next Page is the Signature Page



<PAGE>


                                               Very truly yours,

                                               EDWARDS & ANGELL, LLP


                                               By: /s/ Walter G.D. Reed
                                                  ------------------------------
                                                       Walter G.D. Reed, Partner




<PAGE>


                     AUTHORIZATION FOR BORROWER'S, PARENT'S,
             RHODE ISLAND GUARANTOR'S AND LATIN AMERICA GUARANTOR'S
                                COUNSEL'S OPINION




                                                    June 22, 2001


Edwards & Angell, LLP
2800 Financial Plaza
Providence, Rhode Island 02903

         We  have  engaged  you  to  represent  us in  connection  with  a  loan
transaction  with Bank of  America,  N.A.,  individually  and as  Administrative
Agent, The Bank of Nova Scotia,  individually and as Syndication  Agent,  Credit
Lyonnais New York Branch,  individually and as Co-Documentation Agent, and Fleet
National Bank,  individually and as Co-Documentation Agent and the other Lenders
party  thereto (the  "Lenders").  Agent and the Lenders have  requested  certain
legal  opinions,  one of which may be given  either by you as our attorney or by
the Agent's and the Lenders' attorneys. You have explained to us that under Rule
2.3 of the Rhode  Island Rules of  Professional  Conduct you may  undertake  and
evaluate  matters  affecting  us for the  benefit of third  parties  only if you
reasonably believe that the evaluation is compatible with your representation of
us in connection with the matter and we consent after you consult with us.

         You have explained to us that Agent and the Lenders have requested that
they be  furnished a legal  opinion by you as our  attorney  with respect to our
authority and status as a borrower or a guarantor, as applicable,  to enter into
the loan transaction.

         In addition to the authority/status  opinion mentioned above, the Agent
and the Lenders  require an opinion  concerning the validity,  binding effect or
enforceability  of the loan documents or the  availability  of legal remedies of
the Agent and the Lenders under the loan documents.  Under Section 19-9-7 of the
Rhode Island  General Laws of 1956, as amended,  you have advised us that we (or
you) are not required to give this  opinion.  If we (or you) elect not to do so,
the opinion will be  furnished by counsel  selected by the Agent and the Lenders
on the basis of your authority/status opinion.

         Prior to 1993, when Section 19-9-7 (formerly 19-19-10) was enacted, you
have informed us, as a matter of your common practice,  you regularly  furnished
legal  opinions for your  borrowing  clients that  included both of the opinions
mentioned above. You have advised us that if we voluntarily  authorize you to do
so, you are  prepared to satisfy the  requirements  of the Agent and the Lenders
concerning, both opinions.

         After due  consultation,  we hereby  voluntarily  authorize and request
that you  prepare  and  submit  to the Agent  and the  Lenders  a legal  opinion
satisfactory  to the Agent and the Lenders in  connection  with our pending loan
transaction with the Agent and the Lenders  combining the two opinions  referred
to above. We specifically  acknowledge  that this  authorization  permits you to
opine as to the validity,  binding effect or  enforceability  of any of the loan
documents  or the  availability  of any legal  remedies  thereunder.  We further
acknowledge that this  authorization  and request has not been required of us by
the Agent or the Lenders or by anyone on behalf of the Agent or the Lenders.

                                    Very truly yours,

                                    Borrower:

                                    GTECH CORPORATION


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


                                    Parent:

                                    GTECH HOLDINGS CORPORATION


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



                                    Rhode Island Guarantor:

                                    GTECH RHODE ISLAND CORPORATION


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

                        Signatures Continued on Next Page


<PAGE>


                                    Latin America Guarantor:

                                    GTECH LATIN AMERICA CORPORATION


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




<PAGE>



                                   SCHEDULE I

         Bank of America, N.A., individually and as Administrative Agent for the
         Lenders

         Credit Lyonnais New York Branch,  individually and as  Co-Documentation
         Agent

         Fleet National Bank, individually and as Co-Documentation Agent

         Citizens Bank of Rhode Island

         The Bank of New York

         Allied Irish Banks, p.l.c.

         Key Corporate Capital, Inc.

         The Bank of Nova Scotia, individually and as Syndication Agent

         Commerzbank AG, New York and Grand Cayman



<PAGE>


                                    EXHIBIT A

          Certificate of Borrower, Parent, Rhode Island Guarantor and
                            Latin America Guarantor


                                                     June 22, 2001

Edwards & Angell, LLP
2800 Financial Plaza
Providence, Rhode Island 02903

Ladies and Gentlemen:

         In  connection  with the  extension  of the  Credit  Facilities  to the
Borrower,  which  Credit  Facilities  are  described  in the  opinion  (the "E&A
Opinion") which you are rendering of even date to the Agent and the Lenders, the
undersigned hereby certify that:

         1. Neither the execution or delivery of, nor performance by each of the
Obligors of its respective  obligations  under the Loan  Documents,  (a) does or
will conflict  with,  violate or  constitute a breach of (i) any laws,  rules or
regulations applicable to such Obligor which such conflict,  violation or breach
would  have  a  Material  Adverse  Effect,  or  (ii)  any  contract,  agreement,
indenture,  lease, instrument,  other documents,  judgment, writ, determination,
order or decree to which such Obligor is a party or by which such Obligor or any
of its properties is bound,  the consequences of which in any of the above cases
would have a Material  Adverse  Effect,  or (b) requires  the prior  consent of,
notice to or filing with any court or Governmental  Authority to the extent that
failure thereof does not cause a Material  Adverse  Effect,  or (c) does or will
result in the creation or imposition of any Lien, pledge,  charge or encumbrance
of any nature upon or with respect to any of the  properties,  real or personal,
of the Obligors.

         2. Except as set forth in (a) the Loan Documents and (b) the Borrower's
Form 10-K filed with the Securities  and Exchange  Commission for the Borrower's
fiscal year ended February 24, 2001, there is no pending or threatened,  action,
suit,  investigation or proceeding against any Obligor,  nor, is there any basis
therefore,  before or by any court or  Governmental  Authority,  or governmental
department,  commission,  board,  bureau,  instrumentality,  agency or  arbitral
authority  an adverse  result in which  would have a  Material  Adverse  Effect,
including,  without limitation,  any action, suit, investigation,  or proceeding
under any environmental or labor law.

         3. The Borrower does not own or intend to purchase or carry any "margin
securities"  as  defined  in  Regulation  U with  the  proceeds  of  the  Credit
Facilities.

         4. The following  states are the only ones where an Obligor needs to be
qualified to transact  business as a foreign  corporation in which the nature of
its  business  may  require  such  qualification  and where the failure to be so
qualified or in good  standing  could  reasonably be expected to have a Material
Adverse Effect:

         Borrower:  California, Georgia, New York, Texas



<PAGE>


         Terms not  defined  herein  shall have the same  meanings as in the E&A
opinion.

                                        Very truly yours,

                                        Borrower:

                                        GTECH CORPORATION


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


                                        Parent:

                                        GTECH HOLDING CORPORATION


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


                                        Rhode Island Guarantor:

                                        GTECH RHODE ISLAND CORPORATION


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

                        Signatures Continued on Next Page


<PAGE>


                                        Latin America Guarantor:

                                        GTECH LATIN AMERICA CORPORATION


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





<PAGE>


                                    EXHIBIT H

                             COMPLIANCE CERTIFICATE

[Bank of America, N.A.,
as Administrative Agent
101 North Tryon Street, 15th Floor
NC1-001-15-14
Charlotte, North Carolina  28255
Attention: Agency Services
Telefacsimile:  (704) 409-0296

[Bank of America, N.A.,
as Administrative Agent
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Telephone: (704) 388-3917
Telefacsimile:  (704) 386-9923
Attention: Dana Weir, Agency Services]



         Reference is hereby made to the Credit Agreement dated as of ______ __,
2001 (the  "Agreement")  among GTECH  Corporation,  a Delaware  corporation (the
"Borrower"),  the  Lenders (as  defined in the  Agreement)  and Bank of America,
N.A.,  as  Agent  for  the  Lenders  ("Agent"),  The  Bank of  Nova  Scotia,  as
Syndication Agent, Credit Lyonnais New York Branch, as  Co-Documentation  Agent,
and Fleet National Bank, as Co-Documentation  Agent.  Capitalized terms used but
not otherwise  defined  herein shall have the respective  meanings  therefor set
forth in the Agreement. The undersigned, a duly authorized and acting Authorized
Representative,  hereby  certifies to you as of __________  (the  "Determination
Date") as follows:

1.       Calculations:

         A.       Compliance   with   Section  9.1  of  the  Credit   Agreement:
                  Consolidated Shareholders' Equity

                  1.  Consolidated Shareholders' Equity
                      required at the end of immediately
                      preceding fiscal quarter                    $_____________

                  2.  50% of Consolidated Net Income
                      for such fiscal quarter                     $_____________

100% of the aggregate amount of increases
                      in stated capital and additional paid-in
                      capital accounts resulting from issuance of equity
                      securities or other capital investments
                      during such fiscal quarter                  $_____________

                  4.  Sum of 1. plus 2. plus 3.                   $_____________

                  Required: Consolidated Shareholders' Equity as of the last day
                  of such fiscal quarter must exceed line A.4.

         B.       Compliance with Section 9.1(b): Consolidated Total Debt Ratio

                  1.   Consolidated Total Indebtedness            $_____________

                  2.   Consolidated EBITDA
                       a. Consolidated Net Income (as calculated
                          in the definition thereof, excluding
                          extraordinary gains and losses)         $_____________
                       b. Consolidated Interest Expense (as
                          calculated in the definition thereof) $_________
                       c. Taxes on income                       $_________
                       d. Amortization and depreciation         $_________
                       e. other non-cash expenses               $_________
                       f. Consolidated EBITDA
                          (sum of  a. through e.)               $_________

         3.       Consolidated  Leverage  Ratio:  Ratio  of  Consolidated  Total
                  Indebtedness  (B.1.) to Consolidated  EBITDA (B.2.) is ____ to
                  1.00.

                  Required:  The Consolidated  Debt Ratio for such  Four-Quarter
                  Period must not be greater than 2.25 to 1:00

         C.       Compliance with Section 9.1(c): Consolidated Interest Coverage
                  Ratio

                  1.   Consolidated EBITDA (from B.2., above)     $_____________

                  2.   Consolidated Interest Expense            $_________

                  3.   The  ratio  of  the  Consolidated  EBITDA  (C.1.)  to
                       Consolidated  Interest  Expense  (C.2.)  is ______ to
                       1.00.

                  Required:   The  Consolidated  Interest  Coverage  Ratio  such
                  Four-Quarter Period must not be less than 5.00 to 1.00.

2.       No Default

                  A.   Since   __________   (the   date  of  the  last   similar
         certification),  (a) the  Borrower  has not  defaulted  in the keeping,
         observance,  performance or fulfillment of its obligations  pursuant to
         any of the Loan  Documents;  and (b) no  Default  or  Event of  Default
         specified in Article X of the Agreement has occurred and is continuing.

                  B. If a  Default  or  Event  of  Default  has  occurred  since
         __________ (the date of the last similar  certification),  the Borrower
         proposes to take the  following  action with respect to such Default or
         Event of Default: _______________________________. (Note, if no Default
         or Event of Default has occurred, insert "Not Applicable").

         The  Determination  Date is the  date of the  last  required  financial
statements  submitted  to the  Lenders in  accordance  with  Section  8.1 of the
Agreement.


IN  WITNESS  WHEREOF,  I  have  executed  this  Certificate  this  _____  day of
__________, 2___.


                                    By:
                                       -----------------------------------------
                                             Authorized Representative

                                    Name:
                                         ---------------------------------------

                                    Title:
                                          --------------------------------------



<PAGE>


                                    EXHIBIT I

                            FORM OF FACILITY GUARANTY


                               GUARANTY AGREEMENT

         THIS  GUARANTY  AGREEMENT  (this  "Guaranty  Agreement"),  dated  as of
_________ __, 2___, is made by EACH OF THE  UNDERSIGNED  (each a "Guarantor" and
collectively  the  "Guarantors")  to BANK OF AMERICA,  N.A., a national  banking
association organized and existing under the laws of the United States, as agent
(in such  capacity,  the  "Agent") for each of the lenders  (the  "Lenders"  and
collectively  with the Agent,  the "Secured  Parties") now or hereafter party to
the Credit  Agreement (as defined  below).  All  capitalized  terms used but not
otherwise  defined herein shall have the meanings  ascribed to such terms in the
Credit Agreement.

                              W I T N E S S E T H:

         WHEREAS,    the   Secured   Parties   have   agreed   to   provide   to
________________________ (the "Borrower") certain credit facilities, including a
revolving  credit  facility  with a letter of credit  and  swing  line  sublimit
pursuant  to the terms of that  certain  Credit  Agreement  dated as of June 22,
2001,  among the Borrower,  the Agent,  The Bank of Nova Scotia,  as Syndication
Agent,  Credit  Lyonnais  New York  Branch,  as  Co-Documentation  Agent,  Fleet
National Bank, as  Co-Documentation  Agent and the Lenders (as from time to time
amended, modified, supplemented or restated, the "Credit Agreement"); and

         WHEREAS,  each Guarantor is [the Parent] [, directly or  indirectly,  a
wholly owned  Subsidiary] of the Borrower and will  materially  benefit from the
Loans and Advances made and to be made,  and the Letters of Credit issued and to
be issued, under the Credit Agreement; and

         WHEREAS,  each  Guarantor  is  required  to enter  into  this  Guaranty
Agreement pursuant to the terms of the Credit Agreement; and

         WHEREAS, a material part of the consideration  given in connection with
and as an inducement  to the  execution and delivery of the Credit  Agreement by
the Secured  Parties was the  obligation of the Borrower to cause each Guarantor
to enter into this Guaranty Agreement,  and the Secured Parties are unwilling to
extend and  maintain the credit  facilities  provided  under the Loan  Documents
unless the Guarantors enter into this Guaranty Agreement;

         NOW,  THEREFORE,  in consideration of the premises and mutual covenants
contained herein, the parties hereto agree as follows:

         1.   Guaranty.   Each   Guarantor   hereby   jointly   and   severally,
unconditionally, absolutely, continually and irrevocably guarantees to the Agent
for the benefit of the Secured  Parties the payment and  performance  in full of
the Borrower's Liabilities (as defined below). For all purposes of this Guaranty
Agreement,  "Borrower's Liabilities" means: (a) the Borrower's prompt payment in
full, when due or declared due and at all such times, of all Obligations and all
other amounts pursuant to the terms of the Credit Agreement,  the Notes, and all
other Loan Documents  heretofore,  now or at any time or times hereafter  owing,
arising,  due or payable  from the  Borrower  to any one or more of the  Secured
Parties,  including principal,  interest,  premiums and fees (including, but not
limited to, loan fees and  attorneys'  fees and  expenses);  (b) the  Borrower's
prompt,  full and faithful  performance,  observance  and  discharge of each and
every agreement,  undertaking,  covenant and provision to be performed, observed
or  discharged  by the Borrower  under the Credit  Agreement  and all other Loan
Documents;  and (c) the Borrower's  prompt payment in full, when due or declared
due and at all such times, of Rate Hedging  Obligations now or hereafter arising
under Swap Agreements.  The Guarantors' obligations to the Secured Parties under
this  Guaranty  Agreement  are  hereinafter  collectively  referred  to  as  the
"Guarantors' Obligations" and, with respect to each Guarantor individually,  the
"Guarantor's Obligations".  Notwithstanding the foregoing, the liability of each
Guarantor  individually  with respect to its  Guarantor's  Obligations  shall be
limited to an aggregate amount equal to the largest amount that would not render
its obligations  hereunder  subject to avoidance under Section 548 of the United
States Bankruptcy Code or any comparable provisions of any applicable state law.

         Each Guarantor  agrees that it is jointly and  severally,  directly and
primarily  liable  (subject  to  the  limitation  in the  immediately  preceding
sentence) for the Borrower's Liabilities.

         2. Payment.  If the Borrower shall default in payment or performance of
any of the Borrower's  Liabilities,  whether principal,  interest,  premium, fee
(including,  but not limited to, loan fees and attorneys' fees and expenses), or
otherwise,  when and as the same shall become due, and after  expiration  of any
applicable grace period, whether according to the terms of the Credit Agreement,
by acceleration, or otherwise, or upon the occurrence and during the continuance
of any Event of  Default  under  the  Credit  Agreement,  then any or all of the
Guarantors  will, upon demand thereof by the Agent,  fully pay to the Agent, for
the  benefit  of the  Secured  Parties,  subject  to  any  restriction  on  each
Guarantor's  Obligations  set forth in Section 1 hereof,  an amount equal to all
the Borrower's Liabilities then due and owing.

         3. Absolute Rights and  Obligations.  This is a guaranty of payment and
not of collection.  The Guarantors'  Obligations  under this Guaranty  Agreement
shall be joint and several, absolute and unconditional irrespective of, and each
Guarantor hereby expressly  waives,  to the extent permitted by law, any defense
to its obligations under this Guaranty Agreement and any other Loan Documents to
which it is a party by reason of:

         (a) any lack of  legality,  validity  or  enforceability  of the Credit
Agreement,  of any of the  Notes,  of any other Loan  Document,  or of any other
agreement or instrument creating,  providing security for, or otherwise relating
to any of the Guarantors' Obligations, any of the Borrower's Liabilities, or any
other guaranty of any of the Borrower's  Liabilities (the Loan Documents and all
such other  agreements and  instruments  being  collectively  referred to as the
"Related Agreements");

         (b) any action taken under any of the Related Agreements,  any exercise
of any right or power therein conferred,  any failure or omission to enforce any
right  conferred  thereby,  or any waiver of any covenant or  condition  therein
provided;

         (c)  any  acceleration  of  the  maturity  of  any  of  the  Borrower's
Liabilities,  of the Guarantor's  Obligations of any other Guarantor,  or of any
other  obligations  or  liabilities  of any  Person  under  any  of the  Related
Agreements;

         (d)  any  release,  exchange,  non-perfection,   lapse  in  perfection,
disposal,  deterioration  in value, or impairment of any security for any of the
Borrower's Liabilities, for any of the Guarantor's Obligations of any Guarantor,
or for any other  obligations  or  liabilities  of any  Person  under any of the
Related Agreements;

         (e) any dissolution of the Borrower or any Guarantor or any other party
to a Related  Agreement,  or the combination or consolidation of the Borrower or
any  Guarantor  or any other party to a Related  Agreement  into or with another
entity or any  transfer  or  disposition  of any assets of the  Borrower  or any
Guarantor or any other party to a Related Agreement;

         (f) any extension (including without limitation  extensions of time for
payment),  renewal,   amendment,   restructuring  or  restatement  of,  and  any
acceptance of late or partial payments under, the Credit  Agreement,  any of the
Notes or any other Loan Document or any other Related Agreement,  in whole or in
part;

         (g) the existence, addition,  modification,  termination,  reduction or
impairment of value, or release of any other guaranty (or security  therefor) of
the  Borrower's   Liabilities  (including  without  limitation  the  Guarantor's
Obligations  of any other  Guarantor  and  obligations  arising  under any other
Facility Guaranty now or hereafter in effect);

         (h) any waiver of, forbearance or indulgence under, or other consent to
any change in or departure  from any term or  provision  contained in the Credit
Agreement,  any other Loan  Document or any other Related  Agreement,  including
without  limitation any term  pertaining to the payment or performance of any of
the  Borrower's  Liabilities,  any of the  Guarantor's  Obligations of any other
Guarantor,  or any of the  obligations  or liabilities of any party to any other
Related Agreement;

         (i) any other  circumstance  whatsoever  (with or without  notice to or
knowledge  of any  Guarantor)  which may or might in any manner or to any extent
vary the  risks of such  Guarantor,  or might  otherwise  constitute  a legal or
equitable  defense  available  to, or  discharge  of, a surety  or a  guarantor,
including without limitation any right to require or claim that resort be had to
the Borrower or any other Credit  Party or to any  collateral  in respect of the
Borrower's Liabilities or Guarantors' Obligations.

         It is the express  purpose  and intent of the parties  hereto that this
Guaranty Agreement and the Guarantors'  Obligations  hereunder shall be absolute
and  unconditional  under any and all  circumstances and shall not be discharged
except by payment as herein provided.

         4. Currency and Funds of Payment.  All Guarantors'  Obligations will be
paid in lawful  currency  of the  United  States of America  and in  immediately
available funds, regardless of any law, regulation or decree now or hereafter in
effect that might in any manner affect the Borrower's Liabilities, or the rights
of any Secured Party with respect  thereto as against the Borrower,  or cause or
permit to be invoked any alteration in the time,  amount or manner of payment by
the Borrower of any or all of the Borrower's Liabilities.

         5. Events of Default.  Without  limiting  the  provisions  of Section 2
hereof,  in the event  that  there  shall  occur and be  continuing  an Event of
Default, then notwithstanding any collateral or other security or credit support
for the  Borrower's  Liabilities,  at the Agent's  election  and without  notice
thereof or demand therefor, the Guarantors' Obligations shall immediately be and
become due and payable.

         6.  Subordination.  Until this  Guaranty  Agreement  is  terminated  in
accordance  with  Section  23  hereof,  each  Guarantor  hereby  unconditionally
subordinates  all present and future debts,  liabilities or  obligations  now or
hereafter owing to such Guarantor (i) of the Borrower, to the payment in full of
the  Borrower's  Liabilities,  (ii) of  every  other  Guarantor  (an  "obligated
guarantor"),  to the  payment  in full of the  Guarantors'  Obligations  of such
obligated   guarantor,   and  (iii)  of  each  other  Person  now  or  hereafter
constituting a Credit Party,  to the payment in full of the  obligations of such
Credit Party owing to any Secured  Party and arising  under the Loan  Documents.
All amounts  due under such  subordinated  debts,  liabilities,  or  obligations
shall, upon the occurrence and during the continuance of an Event of Default, be
collected  and, upon request by the Agent,  paid over forthwith to the Agent for
the benefit of the Secured Parties on account of the Borrower's Liabilities, the
Guarantors' Obligations,  or such other obligations,  as applicable,  and, after
such request and pending such payment,  shall be held by such Guarantor as agent
and bailee of the  Secured  Parties  separate  and apart  from all other  funds,
property and accounts of such Guarantor.

         7. Suits.  Each  Guarantor from time to time shall pay to the Agent for
the benefit of the Secured Parties,  on demand, at the Agent's place of business
set forth in the Credit  Agreement or such other address as the Agent shall give
notice of to such Guarantor,  the Guarantors'  Obligations as they become or are
declared due, and in the event such payment is not made forthwith, the Agent may
proceed to suit against any one or more or all of the Guarantors. At the Agent's
election,  one or more and successive or concurrent  suits may be brought hereon
by the Agent  against any one or more or all of the  Guarantors,  whether or not
suit has been commenced against the Borrower, any other Guarantor,  or any other
Person and whether or not the Secured  Parties  have taken or failed to take any
other action to collect all or any portion of the Borrower's Liabilities or have
taken or failed to take any actions against any collateral  securing  payment or
performance  of  all  or  any  portion  of  the  Borrower's   Liabilities,   and
irrespective  of any event,  occurrence,  or  condition  described  in Section 3
hereof.

         8.  Set-Off  and  Waiver.  Each  Guarantor  waives  any right to assert
against any Secured  Party as a defense,  counterclaim,  set-off,  recoupment or
cross  claim,  any  defense  (legal or  equitable)  or other  claim  which  such
Guarantor  may now or at any time  hereafter  have  against the  Borrower or the
Secured Parties without waiving any additional defenses, set-offs, counterclaims
or other claims  otherwise  available to such Guarantor.  Each Guarantor  agrees
that each Secured  Party shall have a lien for all the  Guarantor's  Obligations
upon all  deposits  or deposit  accounts,  of any kind,  or any  interest in any
deposits or deposit accounts, now or hereafter pledged,  mortgaged,  transferred
or assigned to such Secured  Party or otherwise in the  possession or control of
such Secured Party for any purpose (other than solely for  safekeeping)  for the
account or benefit  of such  Guarantor,  including  any  balance of any  deposit
account or of any credit of such Guarantor  with the Secured Party,  whether now
existing or hereafter established, and hereby authorizes each Secured Party from
and after the occurrence and  continuation of an Event of Default at any time or
times with or without prior notice to apply such balances or any part thereof to
such of the Guarantor's  Obligations to the Secured Parties then due and in such
amounts as provided for in the Credit  Agreement or otherwise as they may elect.
For the purposes of this Section 8, all remittances and property shall be deemed
to be in the  possession  of a  Secured  Party as soon as the same may be put in
transit to it by mail or carrier or by other bailee.

         9.       Waiver of Notice; Subrogation.

                  (a) Each  Guarantor  hereby waives to the extent  permitted by
         law notice of the following  events or  occurrences:  (i) acceptance of
         this Guaranty Agreement; (ii) the Lenders' heretofore, now or from time
         to time  hereafter  making  Loans and  issuing  Letters  of Credit  and
         otherwise  loaning  monies or giving or extending  credit to or for the
         benefit of the Borrower,  whether  pursuant to the Credit  Agreement or
         the  Notes or any other  Loan  Document  or  Related  Agreement  or any
         amendments,  modifications,  or supplements thereto, or replacements or
         extensions thereof; (iii) presentment,  demand,  default,  non-payment,
         partial payment and protest;  and (iv) any other event,  condition,  or
         occurrence  described in Section 3 hereof.  Each Guarantor  agrees that
         each Secured Party may heretofore,  now or at any time hereafter do any
         or all of the  foregoing  in such  manner,  upon such terms and at such
         times as each Secured Party, in its sole and absolute discretion, deems
         advisable, without in any way or respect impairing, affecting, reducing
         or releasing such Guarantor from its Guarantor's Obligations,  and each
         Guarantor  hereby  consents to each and all of the foregoing  events or
         occurrences.

                  (b) Each  Guarantor  hereby agrees that payment or performance
         by such Guarantor of its  Guarantor's  Obligations  under this Guaranty
         Agreement may be enforced by the Agent on behalf of the Secured Parties
         upon  demand by the Agent to such  Guarantor  without  the Agent  being
         required,  such Guarantor  expressly waiving to the extent permitted by
         law any  right it may  have to  require  the  Agent,  to (i)  prosecute
         collection  or seek to enforce or resort to any  remedies  against  the
         Borrower  or  any  other  Guarantor  or  any  other  guarantor  of  the
         Borrower's  Liabilities,  or (ii)  seek to  enforce  or  resort  to any
         remedies with respect to any security interests,  Liens or encumbrances
         granted  to the  Agent  or any  Lender  or  other  party  to a  Related
         Agreement by the Borrower,  any other  Guarantor or any other Person on
         account of the Borrower's Liabilities or any guaranty thereof, IT BEING
         EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY SUCH GUARANTOR THAT
         DEMAND UNDER THIS GUARANTY  AGREEMENT MAY BE MADE BY THE AGENT, AND THE
         PROVISIONS HEREOF ENFORCED BY THE AGENT, AT ANY TIME AFTER ANY EVENT OF
         DEFAULT OCCURS AND IS CONTINUING UNDER THE CREDIT AGREEMENT.

                  (c)  Each  Guarantor  further  agrees  with  respect  to  this
         Guaranty  Agreement  that  it  shall  have  no  right  of  subrogation,
         reimbursement,  contribution or indemnity, nor any right of recourse to
         security  for the  Borrower's  Liabilities  unless  and  until  93 days
         immediately  following the Facility Termination Date shall have elapsed
         without the filing or commencement,  by or against any Credit Party, of
         any state or federal action,  suit,  petition or proceeding seeking any
         reorganization,  liquidation  or other relief or arrangement in respect
         of creditors of, or the appointment of a receiver,  liquidator, trustee
         or  conservator  in respect to, such Credit  Party or its assets.  This
         waiver is expressly  intended to prevent the  existence of any claim in
         respect to such subrogation,  reimbursement,  contribution or indemnity
         by any  Guarantor  against the estate of any other  Credit Party within
         the meaning of Section 101 of the  Bankruptcy  Code,  in the event of a
         subsequent case involving any other Credit Party. If an amount shall be
         paid to any  Guarantor on account of such rights at any time during the
         continuance  of an  Event  of  Default  prior  to  termination  of this
         Guaranty  Agreement in  accordance  with the  provisions  of Section 23
         hereof,  such  amount  shall be held in trust  for the  benefit  of the
         Secured  Parties  and shall  forthwith  be paid to the  Agent,  for the
         benefit of the Secured  Parties,  to be credited  and applied  upon the
         Guarantors'  Obligations,  whether matured or unmatured,  in accordance
         with the terms of the Credit  Agreement  or  otherwise  as the  Secured
         Parties may elect.  The  agreements  in this  subsection  shall survive
         repayment of all of the  Guarantors'  Obligations,  the  termination or
         expiration of this Guaranty Agreement in any manner,  including but not
         limited to  termination  in  accordance  with  Section  23 hereof,  and
         occurrence of the Facility Termination Date.

         10.  Effectiveness;  Enforceability.  This Guaranty  Agreement shall be
effective  as of the date first above  written and shall  continue in full force
and effect until termination in accordance with Section 23 hereof.  Any claim or
claims  that the  Secured  Parties  may at any time  hereafter  have  against  a
Guarantor  under this Guaranty  Agreement may be asserted by the Agent on behalf
of the  Secured  Parties  by  written  notice  directed  to  such  Guarantor  in
accordance with Section 25 hereof.

         11.  Representations  and  Warranties.   Each  Guarantor  warrants  and
represents to the Agent, for the benefit of the Secured Parties,  that (a) it is
a  corporation  duly  organized  and  validly  existing  under  the  laws of the
jurisdiction of its  incorporation  and has the requisite power and authority to
(i) own its  properties  and  assets and to carry on its  business  as now being
conducted  and as  contemplated  in the Loan  Documents,  and  (ii) to  execute,
deliver and perform this Guaranty Agreement,  (b) it is qualified to do business
and in good standing in every  jurisdiction  in which failure to be so qualified
or in good  standing  could  reasonably  be expected to have a Material  Adverse
Effect, (c) it is duly authorized to execute,  deliver and perform this Guaranty
Agreement;  that this Guaranty Agreement has been duly executed and delivered on
behalf  of such  Guarantor  by its  duly  authorized  representatives,  (d) this
Guaranty  Agreement  is legal,  valid,  binding  and  enforceable  against  such
Guarantor in accordance with its terms except as  enforceability  may be limited
by bankruptcy, insolvency, reorganization,  moratorium or similar laws affecting
the  enforcement  of  creditors'  rights  generally  and  by  general  equitable
principles, and (e) such Guarantor's execution, delivery and performance of this
Guaranty Agreement do not violate or constitute a breach of any of its Operating
Documents or Organizational Documents, any agreement or instrument to which such
Guarantor  is a party,  or any law,  order,  regulation,  decree or award of any
Governmental  Authority  or  arbitral  body to  which  it or its  properties  or
operations is subject.

         12. Expenses.  Each Guarantor agrees to be jointly and severally liable
for the payment of all reasonable fees and expenses,  including attorneys' fees,
incurred  by any  Secured  Party  in  connection  with the  enforcement  of this
Guaranty Agreement, whether or not suit be brought.

         13.  Reinstatement.  Each Guarantor agrees that this Guaranty Agreement
shall continue to be effective or be reinstated, as the case may be, at any time
payment  received by any Secured Party in respect of any Borrower's  Liabilities
is  rescinded  or must be restored  for any reason,  or is repaid by any Secured
Party in whole or in part in good faith  settlement of any pending or threatened
avoidance claim.

         14.  Attorney-in-Fact.  To the extent  permitted by law, each Guarantor
hereby  appoints  the Agent,  for the  benefit of the Secured  Parties,  as such
Guarantor's  attorney-in-fact for the purposes of carrying out the provisions of
this Guaranty Agreement and taking any action and executing any instrument which
the Agent may deem  necessary or advisable to  accomplish  the purposes  hereof,
which appointment is coupled with an interest and is irrevocable; provided, that
the Agent shall have and may exercise  rights under this power of attorney  only
upon the occurrence and during the continuance of an Event of Default.

         15. Reliance.  Each Guarantor represents and warrants to the Agent, for
the benefit of the Secured Parties,  that: (a) such Guarantor has adequate means
to obtain on a continuing  basis (i) from the Borrower,  information  concerning
the Borrower and the  Borrower's  financial  condition and affairs and (ii) from
other reliable sources,  such other information as it deems material in deciding
to provide  this  Guaranty  Agreement  ("Other  Information"),  and has full and
complete  access  to  the  Borrower's  books  and  records  and  to  such  Other
Information;  (b) such  Guarantor is not relying on any Secured  Party or its or
their employees,  directors,  agents or other representatives or affiliates,  to
provide any such information,  now or in the future; (c) such Guarantor has been
furnished  with and  reviewed the terms of the Credit  Agreement  and such other
Loan Documents as it has requested,  is executing this Guaranty Agreement freely
and deliberately,  and understands the obligations and financial risk undertaken
by providing  this Guaranty  Agreement;  (d) such Guarantor has relied solely on
the  Guarantor's own  independent  investigation,  appraisal and analysis of the
Borrower,   the  Borrower's   financial   condition  and  affairs,   the  "Other
Information", and such other matters as it deems material in deciding to provide
this Guaranty  Agreement and is fully aware of the same;  and (e) such Guarantor
has not  depended  or relied  on any  Secured  Party or its or their  employees,
directors,  agents or other  representatives or affiliates,  for any information
whatsoever  concerning  the Borrower or the Borrower's  financial  condition and
affairs or any other matters  material to such  Guarantor's  decision to provide
this  Guaranty  Agreement,   or  for  any  counseling,   guidance,   or  special
consideration  or any  promise  therefor  with  respect to such  decision.  Each
Guarantor  agrees  that  no  Secured  Party  has  any  duty  or   responsibility
whatsoever,  now or in the future,  to provide to such Guarantor any information
concerning the Borrower or the Borrower's  financial  condition and affairs,  or
any Other  Information,  other than as expressly  provided herein,  and that, if
such Guarantor  receives any such  information  from any Secured Party or its or
their employees,  directors, agents or other representatives or affiliates, such
Guarantor will  independently  verify the  information  and will not rely on any
Secured  Party  or  its  or  their   employees,   directors,   agents  or  other
representatives or affiliates, with respect to such information.

         16. Rules of Interpretation.  The rules of interpretation  contained in
Sections  1.2(c) through 1.2(l) of the Credit  Agreement  shall be applicable to
this  Guaranty  Agreement  and  are  hereby   incorporated  by  reference.   All
representations  and warranties  contained  herein shall survive the delivery of
documents and any extension of credit referred to herein or guaranteed hereby.

         17. Entire Agreement. This Guaranty Agreement, together with the Credit
Agreement  and other  Loan  Documents,  constitutes  and  expresses  the  entire
understanding  between the parties  hereto  with  respect to the subject  matter
hereof,  and  supersedes  all prior  negotiations,  agreements,  understandings,
inducements,  commitments  or conditions,  express or implied,  oral or written,
except as herein  contained.  The express terms hereof control and supersede any
course of performance or usage of the trade  inconsistent  with any of the terms
hereof.  Except as provided in Section 23,  neither this Guaranty  Agreement nor
any portion or provision hereof may be changed, altered, modified, supplemented,
discharged,  canceled, terminated, or amended orally or in any manner other than
as provided in the Credit Agreement.

         18. Binding Agreement;  Assignment.  This Guaranty  Agreement,  and the
terms,  covenants and conditions hereof,  shall be binding upon and inure to the
benefit  of  the  parties  hereto,   and  to  their  respective   heirs,   legal
representatives,  successors and assigns;  provided,  however, that no Guarantor
shall be permitted to assign any of its rights,  powers,  duties or  obligations
under this Guaranty  Agreement or any other  interest  herein  without the prior
written consent of the Agent.  Without  limiting the generality of the foregoing
sentence of this  Section 18, any Lender may assign to one or more  Persons,  or
grant to one or more  Persons  participations  in or to,  all or any part of its
rights and obligations  under the Credit  Agreement (to the extent  permitted by
the Credit Agreement); and to the extent of any such assignment or participation
such other Person  shall,  to the fullest  extent  permitted  by law,  thereupon
become  vested with all the benefits in respect  thereof  granted to such Lender
herein or otherwise, subject however, to the provisions of the Credit Agreement,
including  Article XI thereof  (concerning  the Agent) and Section  12.1 thereof
concerning  assignments and  participations.  All references herein to the Agent
shall include any successor thereof.

         19.  Swap  Agreements.  All  obligations  of the  Borrower  under  Swap
Agreements to which any Lender or its  affiliates are a party shall be deemed to
be Borrower's Liabilities, and each Lender or affiliate of a Lender party to any
such Swap Agreement shall be deemed to be a Secured Party hereunder with respect
to such Borrower's Liabilities;  provided,  however, that such obligations shall
cease to be Borrower's  Liabilities at such time as such Person (or affiliate of
such Person) shall cease to be a "Lender" under the Credit Agreement.

         20.  Severability.  The  provisions  of  this  Guaranty  Agreement  are
independent of and separable from each other. If any provision  hereof shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or  enforceability  of any other provision hereof,
but  this  Guaranty   Agreement  shall  be  construed  as  if  such  invalid  or
unenforceable provision had never been contained herein.

         21. Counterparts. This Guaranty Agreement may be executed in any number
of counterparts  each of which when so executed and delivered shall be deemed an
original,  and it shall  not be  necessary  in  making  proof  of this  Guaranty
Agreement to produce or account for more than one such  counterpart  executed by
the Guarantor against whom enforcement is sought.

         22.  Indemnification.  Without limitation of Section 12.9 of the Credit
Agreement  or any other  indemnification  provision in any Loan  Document,  each
Guarantor  agrees to indemnify  and hold harmless each Secured Party and each of
their affiliates and their respective officers,  directors,  employees,  agents,
and advisors (each, an "Indemnified Party") from and against any and all claims,
damages,   losses,   liabilities,   costs,  and  expenses  (including,   without
limitation,  reasonable  attorneys' fees) that may be incurred by or asserted or
awarded  against  any  Indemnified  Party,  in each  case  arising  out of or in
connection with or by reason of (including,  without  limitation,  in connection
with any  investigation,  litigation or proceeding or  preparation of defense in
connection therewith) the Loan Documents,  any of the transactions  contemplated
herein  or the  actual or  proposed  use of the  proceeds  of the Loans or other
extension of credit under the Loan  Documents  [(including  any of the foregoing
arising from the  negligence of the  Indemnified  Party)],  except to the extent
such  claim,  damage,  loss,  liability,  cost,  or expense is found in a final,
non-appealable  judgment by a court of competent  jurisdiction  to have resulted
from such  Indemnified  Party's gross negligence or willful  misconduct.  In the
case of an investigation,  litigation or other proceeding to which the indemnity
in this Section 22 applies,  such  indemnity  shall be effective  whether or not
such investigation, litigation or proceeding is brought by such Guarantor or any
other  Credit  Party,  any  of  their  respective  directors,   shareholders  or
creditors, or an Indemnified Party or any other Person, or any Indemnified Party
is otherwise a party  thereto and whether or not the  transactions  contemplated
hereby are consummated.  Each Guarantor  agrees that no Indemnified  Party shall
have  any  liability  (whether  direct  or  indirect,  in  contract  or  tort or
otherwise) to it, any of its subsidiaries or affiliates, or any security holders
or  creditors  thereof  arising  out of,  related to or in  connection  with the
transactions  contemplated  herein,  except to the extent that such liability is
found in a final non-appealable judgment by a court of competent jurisdiction to
have directly resulted from such Indemnified Party's gross negligence or willful
misconduct.  Each  Guarantor  agrees not to assert any claim against any Secured
Party, any of its affiliates,  or any of their directors,  officers,  employees,
attorneys,  agents,  or  advisers,  on any  theory of  liability,  for  special,
indirect,  consequential,  or  punitive  damages  arising  out  of or  otherwise
relating to the Loan Documents, any of the transactions  contemplated therein or
the actual or proposed  use of the  proceeds of the Loans or other  extension of
credit under the Loan Documents. The agreements in this Section 22 shall survive
repayment  of  all  of  the  Guarantors'  Obligations  and  the  termination  or
expiration of this Guaranty  Agreement in any manner,  including but not limited
to termination upon occurrence of the Facility Termination Date.

         23.  Termination.  Subject  to  reinstatement  pursuant  to  Section 13
hereof, this Guaranty Agreement and all of the Guarantors' Obligations hereunder
(excluding  those  obligations  and  liabilities  that  expressly  survive  such
termination) shall terminate on the Facility Termination Date.

         24.  Remedies  Cumulative;  Late Payments.  All remedies  hereunder are
cumulative  and are not  exclusive of any other rights and remedies of the Agent
or any other Secured Party  provided by law or under the Credit  Agreement,  the
other Loan Documents or other applicable  agreements or instruments.  The making
of the Loans and other  extensions  of credit to the  Borrower  pursuant  to the
Credit  Agreement shall be conclusively  presumed to have been made or extended,
respectively,  in reliance  upon each  Guarantor's  guaranty  of the  Borrower's
Liabilities  pursuant to the terms  hereof.  Any amounts not paid when due under
this Guaranty Agreement shall bear interest at the Default Rate.

         25. Notices. Any notice required or permitted hereunder shall be given,
(a) with respect to each Guarantor, at the address [of the Borrower indicated in
Section 12.2 of the Credit  Agreement]  [at the address for such  Guarantor  set
forth below its  signature on this Guaranty  Agreement]  and (b) with respect to
the Agent or any other  Secured  Party,  at the  Agent's  address  indicated  in
Section 12.2 of the Credit  Agreement.  All such addresses may be modified,  and
all such notices shall be given and shall be  effective,  as provided in Section
12.2 of the Credit Agreement.

         26.      Governing Law; Venue; Waiver of Jury Trial.

                  (a) THIS  AGREEMENT  SHALL BE GOVERNED  BY, AND  CONSTRUED  IN
         ACCORDANCE  WITH,  THE  LAWS OF THE  STATE OF NEW  YORK  APPLICABLE  TO
         CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

                  (b) EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY AGREES AND
         CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
         TO THIS  AGREEMENT  AND THE  TRANSACTIONS  CONTEMPLATED  HEREIN  MAY BE
         INSTITUTED  IN ANY STATE OR FEDERAL  COURT SITTING IN THE COUNTY OF NEW
         YORK, STATE OF NEW YORK, UNITED STATES OF AMERICA AND, BY THE EXECUTION
         AND DELIVERY OF THIS  AGREEMENT,  SUCH GUARANTOR  EXPRESSLY  WAIVES ANY
         OBJECTION  THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN,
         OR TO THE  EXERCISE OF  JURISDICTION  OVER IT AND ITS  PROPERTY BY, ANY
         SUCH COURT IN ANY SUCH SUIT,  ACTION OR PROCEEDING,  AND EACH GUARANTOR
         HEREBY  IRREVOCABLY   SUBMITS  GENERALLY  AND  UNCONDITIONALLY  TO  THE
         JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING.

                  (c) EACH GUARANTOR  AGREES THAT SERVICE OF PROCESS MAY BE MADE
         BY PERSONAL  SERVICE OF A COPY OF THE SUMMONS  AND  COMPLAINT  OR OTHER
         LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING,  OR BY REGISTERED
         OR CERTIFIED MAIL (POSTAGE  PREPAID) TO THE ADDRESS FOR NOTICES TO SUCH
         GUARANTOR  IN EFFECT  PURSUANT  TO SECTION  25 HEREOF,  OR BY ANY OTHER
         METHOD OF SERVICE  PROVIDED FOR UNDER THE APPLICABLE  LAWS IN EFFECT IN
         THE STATE OF NEW YORK.

                  (d) NOTHING  CONTAINED IN SUBSECTIONS  (b) or (c) HEREOF SHALL
         PRECLUDE THE AGENT FROM BRINGING ANY SUIT, ACTION OR PROCEEDING ARISING
         OUT  OF OR  RELATING  TO  ANY  LOAN  DOCUMENT  IN  THE  COURTS  OF  ANY
         JURISDICTION WHERE ANY GUARANTOR OR ANY OF SUCH GUARANTOR'S PROPERTY OR
         ASSETS  MAY BE  FOUND  OR  LOCATED.  TO  THE  EXTENT  PERMITTED  BY THE
         APPLICABLE  LAWS  OF  ANY  SUCH  JURISDICTION,  EACH  GUARANTOR  HEREBY
         IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
         WAIVES, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, OBJECTION TO
         THE EXERCISE OF JURISDICTION OVER IT AND ITS PROPERTY BY ANY SUCH OTHER
         COURT  OR  COURTS  WHICH  NOW  OR  HEREAFTER  MAY  BE  AVAILABLE  UNDER
         APPLICABLE LAW.

                  (e) IN ANY  ACTION OR  PROCEEDING  TO  ENFORCE  OR DEFEND  ANY
         RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR ANY AMENDMENT,
         INSTRUMENT,  DOCUMENT OR AGREEMENT  DELIVERED OR THAT MAY IN THE FUTURE
         BE DELIVERED IN CONNECTION  THEREWITH,  EACH GUARANTOR AND THE AGENT ON
         BEHALF OF THE SECURED PARTIES HEREBY AGREE, TO THE EXTENT  PERMITTED BY
         APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT OR PROCEEDING SHALL BE TRIED
         BEFORE A COURT AND NOT BEFORE A JURY AND HEREBY  IRREVOCABLY  WAIVE, TO
         THE EXTENT  PERMITTED BY APPLICABLE  LAW, ANY RIGHT ANY SUCH PERSON MAY
         HAVE TO TRIAL BY JURY IN ANY SUCH ACTION, SUIT OR PROCEEDING.

                  (f) EACH GUARANTOR  HEREBY  EXPRESSLY  WAIVES ANY OBJECTION IT
         MAY HAVE THAT ANY COURT TO WHOSE JURISDICTION IT HAS SUBMITTED PURSUANT
         TO THE TERMS HEREOF IS AN INCONVENIENT FORUM.

                            [Signature page follows.]


<PAGE>


IN WITNESS  WHEREOF,  the parties  hereto have duly executed and delivered  this
Guaranty Agreement as of the day and year first written above.


                                   GUARANTORS:

                                   ---------------------------------------------
WITNESS:

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

                                   [Address for Notices:

                                   -----------------------------------
                                   -----------------------------------
                                   -----------------------------------
                                   Telefacsimile: (___) ___-____]

                                   [Complete if Borrower's address is not to be
                                   used pursuant to Section 25]


                                   AGENT:

                                   BANK OF  AMERICA,  N.A.,  as  Agent  for the
                                   Lenders


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






<PAGE>


                                    EXHIBIT J

                        FORM OF CONFIDENTIALITY AGREEMENT

         THIS AGREEMENT  made this _____ day of __________,  20__ by and between
GTECH  CORPORATION  with  its  principal  office  at  55  Technology  Way,  West
Greenwich,  Rhode  Island  02817  (GTECH  CORPORATION  and  any  affiliates  and
subsidiaries     are    referred    to     hereinafter     as    "GTECH")    and
___________________________________           with           offices          at
___________________________________  (referred to  hereinafter as the "Potential
Transferee").

         WHEREAS,  GTECH creates,  develops,  manufacturers  and markets various
goods,  including  without  limitation   computerized  gaming  systems  and  the
components  thereof (hardware and software  included),  and services,  including
without limitation implementation,  modification,  promotion, and maintenance of
such systems; and

         WHEREAS,   GTECH  is  a  party  to  that   certain   Credit   Agreement
dated________________ ___, 2001, among GTECH Corporation,  the Lenders which are
parties thereto (the "Lenders"),  and Bank of America,  N.A., in its capacity as
Administrative  Agent for the Lenders (as amended or supplemented  and in effect
from time to time,  the "Credit  Agreement")  (capitalized  terms not  otherwise
defined  herein  shall  have  the  same  meaning  as set  forth  in  the  Credit
Agreement); and

         WHEREAS,  the  Potential  Transferee  is  interested  in exploring  the
possibility  of  becoming a  participant  and/or an  assignee  (a  "Transferee")
pursuant to Section  12.1 of the Credit  Agreement  (hereinafter  referred to as
"Explorations"); and

         WHEREAS,  the Lender  proposing to transfer a portion of its rights and
obligations  under the Loan  Documents (the  "Transferor  Lender") is permitted,
pursuant  to Section  12.1(f)  of the  Credit  Agreement,  to  disclose  certain
information  respecting  GTECH,  subject to the  execution  and  delivery by the
Potential Transferee of this Agreement;

         NOW,  THEREFORE,  in consideration of the foregoing and of the promises
and covenants herein contained, the parties agree as follows:

         1.       The parties  acknowledge that, as used in this Agreement,  the
                  term   "Confidential    Information"   means   all   financial
                  information in the Transferor Lender's  possession  concerning
                  GTECH  and its  affiliates  which  has been  delivered  to the
                  Transferor  Lender by or on behalf  of GTECH  pursuant  to the
                  Credit Agreement or which has been delivered to the Transferor
                  Lender  by or on  behalf  of  GTECH  in  connection  with  the
                  Transferor  Lender's  credit  evaluations  of  GTECH  and  its
                  affiliates prior to becoming a party to the Credit  Agreement,
                  and which is  disclosed  to the  Potential  Transferee  by the
                  Transferor  Lender under or in connection  with  Explorations.
                  Confidential Information does not include, without limitation,
                  information which is:

                  (a)      in the public domain;

                  (b)      already known to the Potential Transferee at the time
                           of such disclosure;

                  (c)      subsequently  received by the Potential Transferee in
                           good faith from a third party who is not known to the
                           Potential Transferee to be bound by a confidentiality
                           agreement  with  GTECH  or  known  to  the  Potential
                           Transferee   to   be   otherwise    prohibited   from
                           transmitting   the   information   to  the  Potential
                           Transferee  by  a  contractual,  legal  or  fiduciary
                           obligation;

                  (d)      independently  generated by the Potential Transferee;
                           or

                  (e)      approved  for  release  or  disclosure  by GTECH in a
                           separate writing.

         2.       Except as necessary  to conduct  Explorations,  the  Potential
                  Transferee  shall keep  confidential  and never  disclose  any
                  Confidential   Information  unless  GTECH  has,  in  its  sole
                  discretion,  previously  and expressly  consented to such use,
                  duplication or disclosure in writing. The Potential Transferee
                  may  disclose  such  Confidential  Information  to:  (a) those
                  directors,   officers,   employees,  agents,  accountants  and
                  attorneys  of the  Potential  Transferee  whose  knowledge  is
                  necessary to conduct the Explorations,  provided that all such
                  persons  shall be  advised  of their  obligations  to  protect
                  GTECH's  interest,  which  obligations  shall be  identical to
                  those of the Potential  Transferee  under this Agreement;  (b)
                  examiners  or  regulatory   agencies  having   supervisory  or
                  examination   authority  over  the  Potential   Transferee  in
                  accordance  with  customary  banking  practices;  and  (c) any
                  person pursuant to the order of any Governmental  Authority or
                  as otherwise required by law.

         3.       The parties acknowledge and agree that:

                  (a)      All   Confidential   Information   disclosed   by  or
                           belonging to GTECH is and shall remain the  exclusive
                           and valuable property of GTECH;

                  (b)      The Potential  Transferee  does not hereby obtain any
                           license  or  other  interest  in or  to  Confidential
                           Information or the subjects thereof; and

                  (c)      At  GTECH's  request,  and  in  any  event  upon  the
                           completion   of  the   Explorations,   the  Potential
                           Transferee   shall  promptly  deliver  to  GTECH  all
                           records or other  things in any media  containing  or
                           embodying   Confidential   Information   which   were
                           delivered  or  made   available   to  the   Potential
                           Transferee during or in connection with Explorations,
                           including   any   copies   thereof,   and  any  other
                           Confidential  Information  retained by the  Potential
                           Transferee will be either  destroyed by the Potential
                           Transferee   or,  to  the   extent   such   Potential
                           Transferee   shall   have   become  a  Lender  (or  a
                           participant  of a  Lender),  held  by  the  Potential
                           Transferee  subject to the terms of Section  12.14 of
                           the Credit Agreement.

         4.       (a)   The   Potential   Transferee   acknowledges   that   the
                  restrictions on the use, duplication and disclosure of GTECH's
                  Confidential  Information  set forth herein are  reasonable to
                  protect GTECH's business interests. If any provision hereof is
                  held invalid under any applicable  rule of law such invalidity
                  shall not affect  other  provisions  hereof which can be given
                  effect  without  the invalid  provisions,  and to this end the
                  provisions  hereof are  declared  to be  severable.  The above
                  notwithstanding,   any  such  invalid   provisions   shall  be
                  construed and enforced (to the extent  possible) in accordance
                  with the original intent of the parties as herein expressed.

                  (b)      This  Agreement  shall  not  be  modified  except  in
                           writing signed by both parties hereto.

                  (c)      No waiver of any provisions of the Agreement shall be
                           effective  unless  agreed to in  writing by the party
                           against  whom such  waiver is sought to be  enforced.
                           Waiver of any default or breach  hereunder  shall not
                           constitute  a waiver of any other  default  or breach
                           whether similar or otherwise.

                  (d)      The validity, interpretation, and enforcement of this
                           Agreement  shall be governed by the laws of the State
                           of New York  other than any rule  which  might  refer
                           such matters to the laws of any other jurisdiction.

                  (e)      The provisions of this Agreement  shall  indefinitely
                           survive   the   termination   of  the   Explorations;
                           provided,  however, if the Potential Transferee shall
                           become a Lender (or a participant  of a Lender),  the
                           provisions of this  Agreement  shall be superseded by
                           Section 12.14 of the Credit Agreement.

                  (f)      This Agreement shall be binding upon and inure to the
                           benefit  of  GTECH,  its  legal  representatives  and
                           successors;  and the Potential Transferee,  its legal
                           representatives and successors.


<PAGE>




         IN  WITNESS   WHEREOF  the  parties  have  by  their  duly   authorized
representatives executed this Agreement as of the date first written above.


GTECH CORPORATION                           Potential Transferee


By                                          By
  --------------------------------            ---------------------------------
Signature                                   Signature



----------------------------------          ------------------------------------
Name (Print or Type)                        Name (Print or Type)


----------------------------------          ------------------------------------
Title                                       Title


----------------------------------          ------------------------------------
Date                                        Date



<PAGE>


                                  Schedule 7.4

                              Material Subsidiaries

GTECH Rhode Island Corporation, a Rhode Island corporation

         o        1,000 shares authorized

         o        1,000 shares issued, all to GTECH Corporation

GTECH Latin America Corporation, a Delaware corporation

         o        8,000 shares authorized

         o        100 shares issued, all to GTECH Corporation

GTECH Brasil LTDA, a company organized under the laws of Brazil

         o        __________ shares authorized

         o        __________ shares issued, all to GTECH Corporation

<PAGE>


                                  Schedule 7.6

                                  Indebtedness

                                      None.



<PAGE>


                                  Schedule 7.7

                                      Liens

                                      None.


<PAGE>


                                  Schedule 7.8

                                   Tax Matters

                                      None.

<PAGE>


                                  Schedule 7.18

                              Environmental Matters

                                      None.