AMENDED AND RESTATED
                                                  CREDIT AGREEMENT



                                                    by and among



                                                 GTECH CORPORATION,

                                                    as Borrower,


                                     THE LENDERS FROM TIME TO TIME PARTY HERETO,

                                                  BANK OF MONTREAL,
                                                   BANQUE PARIBAS,
                                                FLEET NATIONAL BANK,
                                            THE BANK OF NOVA SCOTIA, and
                                                  BANKBOSTON, N.A.,

                                                    as Co-Agents

                                                THE BANK OF NEW YORK,
                                               as Documentation Agent,

                                                         and

                                         NATIONSBANK, NATIONAL ASSOCIATION,
                                               as Administrative Agent



                                                    June 18, 1997



                                 AMENDED AND RESTATED CREDIT AGREEMENT


         THIS  AMENDED  AND  RESTATED  CREDIT  AGREEMENT,  dated  as of June 18,
1997 (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");

         Each lender  executing and  delivering a signature page hereto and each
other  lender  which  may  hereafter   execute  and  deliver  an  instrument  of
assignment  with  respect to this  Agreement  pursuant to Section  11.01  hereof
(hereinafter  such  lenders  may be referred  to  individually  as a "Lender" or
collectively as the "Lenders");

         NATIONSBANK,  NATIONAL  ASSOCIATION,  a  national  banking  association
organized  and  existing  under  the  laws  of  the  United  States  of  America
("NationsBank"),  in its  capacity as  administrative  agent for the Lenders (in
such  capacity,  and any  successor  appointed in  accordance  with the terms of
Section 10.09 hereof, the "Administrative  Agent");  THE BANK OF NEW YORK, a New
York  chartered  bank ("BNY"),  in its capacity as  Documentation  Agent for the
Lenders (in such capacity,  the  "Documentation  Agent");  and BANK OF MONTREAL,
BANQUE  PARIBAS,  FLEET NATIONAL  BANK, THE BANK OF NOVA SCOTIA and  BANKBOSTON,
N.A.,  in their  capacity as co-agents  for the Lenders (in such  capacity,  the
"Co-Agents").

                           W I T N E S S E T H:

         WHEREAS,  the  Borrower,  each of the lenders party thereto (the "Prior
Lenders"),  Bank of  America  Illinois,  The Bank of New York, Bank of Montreal,
Banque  Paribas,  Fleet National  Bank, The Bank of Nova Scotia and  BankBoston,
N.A.,  formerly  known  as  The  First  National  Bank  of  Boston  (the  "Prior
Co-Agents")   and   NationsBank,   National   Association,   formerly  known  as
NationsBank  of North  Carolina,  National  Association,  as agent  (the  "Prior
Agent"),  have entered into that certain Credit  Agreement dated as of September
15, 1994,  as amended  pursuant to the terms of that certain  Amendment No. 1 to
Credit  Agreement  dated as of May 29,  1996 (as so amended,  the "Prior  Credit
Agreement"),  pursuant to which the Prior  Lenders  have made  available  to the
Borrower a revolving credit facility in the maximum  aggregate  principal amount
at any time outstanding of  $500,000,000,  which includes (i) a letter of credit
facility  of  up  to  $100,000,000,   (ii)  a  swing  line  facility  of  up  to
$25,000,000,  and (iii) a competitive  bid facility,  the proceeds of such loans
have been used and are to be used for  working  capital  and  general  corporate
purposes; and

         WHEREAS,  Bank of America  Illinois  has  assigned  all of its interest
under the  Prior Credit  Agreement to  NationsBank,  National  Association,  The
Bank of New York and Toronto Dominion (New York), Inc.; and

         WHEREAS,  the Borrower has requested  that the Lenders,  the Co-Agents,
the  Documentation  Agent and the  Administrative  Agent  amend and  restate the
Prior  Credit  Agreement in its  entirety  to,  among other  things,  reduce the
amount of the Revolving  Credit Facility  thereunder and reflect certain changes
in the  lenders  party to the  Prior  Credit  Agreement  and the  Administrative
Agent,  the  Documentation  Agent,  the Co-Agents and the Lenders are willing to
amend and restate the Prior Credit  Agreement  pursuant to this  Agreement  upon
the terms and conditions set forth herein;

         NOW,  THEREFORE,   the  Borrower,  the  Lenders,  the  Co-Agents,   the
Documentation Agent, and the Administrative Agent hereby agree as follows:


                                                      ARTICLE I

                                                Definitions and Terms

         Amendment and  Restatement.  The Borrower,  the  Administrative  Agent,
the  Documentation  Agent,  the Co-Agents and the Lenders hereby agree that upon
the  effectiveness  of this  Agreement,  the terms and  provisions  of the Prior
Credit  Agreement  shall  be and  hereby  are  amended  and  restated  in  their
entirety  by the  terms  and  provisions  of this  Agreement  and the  terms and
provisions of the Prior Credit Agreement,  except as otherwise  provided herein,
shall be superseded by this Agreement.

         Notwithstanding  the  amendment  and  restatement  of the Prior  Credit
Agreement by this  Agreement,  the Borrower  shall  continue to be liable to the
Prior  Agent and each  Lender  with  respect to its  agreements  under the Prior
Credit  Agreement  to  indemnify  and hold  harmless  the  Prior  Agent and each
Lender  from and  against all claims,  demands,  liabilities,  damages,  losses,
costs,  charges  and  expenses  to which the Prior  Agent or any  Lender  may be
subject  arising  in  connection  with the  Prior  Credit  Agreement.  Except as
otherwise  selected by the  Borrower by delivery of a Borrowing  Notice prior to
the Closing Date in  accordance  with the terms hereof,  upon the  effectiveness
of this  Agreement  all  amounts  outstanding  and owing by  Borrower  under the
Prior Credit  Agreement as of the Closing  Date,  as  determined by the Lenders,
shall  constitute  Loans  hereunder   accruing  interest  (a)  with  respect  to
Eurodollar  Loans  under the Prior  Credit  Agreement,  at the  Eurodollar  Rate
hereunder,  (b)  with  respect  to  Base  Rate  Loans  under  the  Prior  Credit
Agreement,  at the Base Rate hereunder and (c) with respect to  Competitive  Bid
Loans  under the  Prior  Credit  Agreement,  at the  Absolute  Rate or the Index
Rate, as  applicable,  hereunder.  The parties  hereto agree that all Eurodollar
Rate Loans under the Prior Credit  Agreement on the Closing Date shall  continue
as  Eurodollar  Rate Loans  without  any  compensation  pursuant  to Section 5.4
hereof being due to the Agent or the Lenders.

         Each of the  parties  hereto  acknowledges  and  agrees  that  all Loan
Documents  (as  defined  in the Prior  Credit  Agreement),  other than the Prior
Credit  Agreement and the promissory notes  thereunder,  delivered in connection
with the Prior Credit  Agreement  (the  "Surviving  Loan  Documents")  remain in
full force and effect with respect to this  Agreement  and are deemed  delivered
hereunder.  All  Surviving  Loan  Documents  are  hereby  amended  so  that  all
references  in  such  documents  to  the  Credit   Agreement   shall  mean  this
Agreement,  as  amended,  supplemented  or  replaced  from  time  to  time,  all
references to the Agent shall mean the  Administrative  Agent and all references
to the Notes shall mean the Notes hereunder.

         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:

                  "Absolute  Rate" means an absolute  rate of interest per annum
         (rounded  upwards,  if  necessary,  to the  nearest  1/10,000th  of 1%)
         offered by a Lender pursuant to an Absolute Rate Bid Loan Request;

                  "Absolute  Rate Bid Loan Request"  means any  Competitive  Bid
         Quote Request  requesting the Lenders to offer to make  Competitive Bid
         Loans  at an  Absolute  Rate  (as  opposed  to a rate  composed  of the
         Applicable Index Rate plus (or minus) a margin);

                  "Absolute  Rate  Competitive  Bid Loan" means any  Competitive
         Bid Loan bearing interest at an Absolute Rate;

                  "Advance" means any borrowing  under (i) the Revolving  Credit
         Facility  consisting  of a Base Rate Loan or a LIBOR Loan,  as the case
         may be,  (ii) the Swing  Line  consisting  of Swing Line Loans or (iii)
         the Competitive Bid Facility consisting of Competitive Bid Loans;

                  "Affiliate"  means a Person (i) which  directly or  indirectly
         through one or more  intermediaries  controls,  or is controlled by, or
         is under common  control with,  the Borrower;  (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
         such Person,  whether  through  ownership of voting stock,  by contract
         or otherwise;

                  "Applicable  Commitment  Percentage"  means,  at any  time for
         each Lender with respect to the Revolving  Credit  Facility  (including
         its  Participations  and its  obligations  hereunder to  NationsBank to
         acquire  Participations),  a fraction (expressed as a percentage),  (A)
         the numerator of which shall be the amount of such  Lender's  Revolving
         Credit  Commitment  at such  date  of  determination  (which  Revolving
         Credit  Commitment  for each Lender as of the Closing Date is set forth
         in Exhibit A attached  hereto and  incorporated  herein by  reference),
         and (B) the  denominator of which shall be the Total  Revolving  Credit
         Commitment   at  such  date  of   determination;   provided  that  each
         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 11.01 hereof;

                  "Applicable  Index Rate" means,  in respect of any Competitive
         Bid Loan  requested  pursuant  to an Index Rate Bid Loan  Request,  the
         LIBOR  Base  Rate   applicable   to  the   Interest   Period  for  such
         Competitive Bid Loan;

                  "Applicable  Margin"  means for  purposes of  calculating  (i)
         the applicable  interest  margin for the Interest  Period for any LIBOR
         Loan,  (ii) the applicable  rate for the issuance of Standby Letters of
         Credit and (iii) the  applicable  rate of the Facility Fee for any date
         for  purposes  of  Section  2.12  hereof  (notice  of  which  shall  be
         delivered by the  Administrative  Agent to the Borrower and each Lender
         within five (5) days of the Compliance Date (as defined  below)),  that
         percent per annum set forth below which shall be (x)  determined  as of
         each  Determination  Date based upon the  computations set forth in the
         compliance   certificates   delivered  to  the   Administrative   Agent
         pursuant to Sections  7.01(a)(ii)  and 7.01(b)(ii)  hereof,  subject to
         review and approval of such  computations by the  Administrative  Agent
         which  review  shall be  completed  within five (5) days of the date of
         delivery,  and  delivered  to the  Administrative  Agent not later than
         the  time  set  forth in  Sections  7.01(a)  and  7.01(b)  hereof  (the
         "Compliance  Date")  and  (y)  applicable  to  all  LIBOR  Loans  made,
         renewed or converted,  Standby  Letters of Credit  outstanding  and any
         Facility  Fee  outstanding  and due and  payable,  on or after the most
         recent   Compliance   Date  to  occur,   based   upon  the   Borrower's
         Consolidated  Funded  Debt  Ratio and  Consolidated  Interest  Coverage
         Ratio as of the most recent Determination Date, as specified below:

<TABLE>
<CAPTION>


                                                                                        LIBOR and
                                                                  Consolidated          Letter of         Facility
                                    Consolidated                    Interest             Credit              Fee
                                       Funded                       Coverage           Applicable        Applicable
                                     Debt Ratio                       Ratio              Margin            Margin
       --------------- -------------------- -------- ---------------------- ----------------- -----------------
       --------------- -------------------- -------- ---------------------- ----------------- -----------------
       <S>             <C>                 <C>       <C>                              <C>               <C>

       Tier I          Equal to or                   Equal to or                      .1500%            .1000%
                       less than            and      greater than
                       .50 to 1.00                   15.00 to 1.00
       --------------- -------------------- -------- ---------------------- ----------------- -----------------
       --------------- -------------------- -------- ---------------------- ----------------- -----------------

       Tier II         Greater than                  Less than                        .2000%            .1125%
                       .50 to 1.00          and      15.00 to 1.00 but
                       but less than or              greater than or
                       equal to                      equal to 12.00 to
                       1.00 to 1.00                  1.00
       --------------- -------------------- -------- ---------------------- ----------------- -----------------
       --------------- -------------------- -------- ---------------------- ----------------- -----------------

       Tier III        Greater than                  Less than                        .2500%            .1250%
                       1.00 to 1.00         and      12.00 to 1.00 but
                       but less than or              greater than or
                       equal to                      equal to 9.00 to 1.00
                       2.00 to 1.00
       --------------- -------------------- -------- ---------------------- ----------------- -----------------
       --------------- -------------------- -------- ---------------------- ----------------- -----------------

       Tier IV         Greater than                  Less than                        .3375%            .1875%
                       2.00 to 1.00         and      9.00 to 1.00 but
                       but less than or              greater than or
                       equal to                      equal to 7.00 to 1.00
                       2.25 to 1.00
       --------------- -------------------- -------- ---------------------- ----------------- -----------------
       --------------- -------------------- -------- ---------------------- ----------------- -----------------

       Tier V          Greater than                  Less than                        .4000%            .2250%
                       2.25 to 1.00         and      7.00 to 1.00
       --------------- -------------------- -------- ---------------------- ----------------- -----------------
</TABLE>

         it  being  understood  that  failure  to  satisfy  either  of  the  two
         financial  ratios  specified in any Tier will result in the  applicable
         Tier being the highest  numeric  Tier in which  either  such  financial
         ratio is satisfied;  provided,  however,  that from the Closing Date to
         the date the  above-referenced  compliance  certificates  are delivered
         to the  Administrative  Agent and the applicable  Tier is  determinable
         by the  Administrative  Agent,  the  Applicable  Margin shall be as set
         forth in Tier III above;

                  "Applications  and  Agreements  for Letters of Credit"  means,
         collectively,  the  Applications  and  Agreements for Letters of Credit
         executed  by  the  Borrower   from  time  to  time  and   delivered  to
         NationsBank to support the issuance of Letters of Credit;

                  "Assignment   and   Acceptance"   means  an   Assignment   and
         Acceptance  substantially in the form of Exhibit B  attached hereto and
         incorporated  herein by  reference  (with blanks  appropriately  filled
         in)  delivered  to the  Administrative  Agent  in  connection  with  an
         assignment  of a Lender's  interest  under this  Agreement  pursuant to
         Section 11.01 hereof;

                  "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,
         Co-Chairmen,  Chief Executive Officer,  Chief Operating Officer,  Chief
         Financial  Officer,  Vice President and  Treasurer,  Vice President and
         Controller,  and  Assistant  Treasurer  of the  Borrower  or any  other
         person  expressly  designated  by the Chief  Financial  Officer  or the
         Treasurer  of  the  Borrower  as an  Authorized  Representative  of the
         Borrower,  as set forth from time to time in a certificate  in the form
         attached hereto as Exhibit C and incorporated herein by reference;

                  "Base  Rate"  means,  for any Base Rate Loan,  the  greater of
         (i) the  Prime  Rate or (ii) the  Federal  Funds  Effective  Rate  plus
         one-half  of one  percent  (.5%),  each  change in such Base Rate to be
         effective as of the  effective  date of any change in the Prime Rate or
         the Federal Funds Effective Rate giving rise thereto;

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

                  "Bid Rate Auction" means any  solicitation  of Competitive Bid
         Quotes  setting  forth  Absolute  Rates  or  Index  Rates  pursuant  to
         Section 2.03 hereof;

                  "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 the Swing  Line,  in the form  attached
         hereto as Exhibit D and incorporated herein by reference;

                  "Business  Day" means any day which is not a Saturday,  Sunday
         or a day on  which  banks  in the  State  of New York or State of North
         Carolina  are  authorized  or  obligated  by law,  executive  order  or
         governmental decree to be closed;

                  "Camelot"  means  Camelot Group PLC, a consortium of companies
         formed to operate the United  Kingdom  lottery,  of which the  Borrower
         is a member;

                  "Capital  Leases"  means all leases  which have been or should
         be  capitalized  in  accordance  with  Generally  Accepted   Accounting
         Principles  including  Statement  No.  13 of the  Financial  Accounting
         Standards  Board and any  successor  thereof  applied  on a  Consistent
         Basis;

                  "Closing  Date" means the date as of which this  Agreement  is
         executed by the  Borrower,  the Lenders,  the  Documentation  Agent and
         the  Administrative  Agent  and on which  the  conditions  set forth in
         Section 5.01 hereof have been satisfied;

                  "Code"  means the Internal  Revenue Code of 1986,  as amended,
         any successor  provision or provisions 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;

                  "Common  Stock"  means the  common  stock,  par value $.01 per
         share, of the Borrower;

                  "Competitive  Bid Borrowing" has the meaning  assigned to such
         term in Section 2.03 hereof;

                  "Competitive  Bid  Facility"  means the facility  described in
         Section  2.03  hereof  providing  for  Competitive  Bid  Loans  to  the
         Borrower;

                  "Competitive Bid Loan  Commitment"  means the aggregate amount
         which a  Lender  has  offered  to loan to the  Borrower  pursuant  to a
         Competitive  Bid Quote by such  Lender  not to exceed in the  aggregate
         an amount equal to the  Revolving  Credit  Facility  less all Revolving
         Credit Outstandings;

                  "Competitive  Bid Loans" means the Loans  bearing  interest at
         an Absolute Rate or Index Rate provided for in Section 2.03 hereof;

                  "Competitive  Bid Notes" means,  collectively,  the promissory
         notes of the Borrower with respect to  Competitive  Bid Loans  provided
         for  by  Section  2.03  hereof  executed  and  delivered  in  the  form
         attached  hereto as  Exhibit E and  incorporated  herein by  reference,
         with  appropriate   insertions  as  to  amounts,  dates  and  names  of
         Lenders,   and  all  promissory  notes  delivered  in  substitution  or
         exchange  therefor,  in  each  case  as  the  same  shall  be  amended,
         modified or supplemented and in effect from time to time;

                  "Competitive  Bid  Outstandings"  means,  as of  any  date  of
         determination,  the aggregate  principal  Indebtedness  of the Borrower
         on all Competitive Bid Loans then outstanding;

                  "Competitive  Bid  Quote"  means an offer in  accordance  with
         Section  2.03  hereof by a Lender to make a  Competitive  Bid Loan with
         an  Absolute  Rate or an  Index  Rate,  in the  form of  Exhibit  J and
         incorporated herein by reference;

                  "Competitive  Bid Quote  Request"  means  either  an  Absolute
         Rate Bid Loan Request or an Index Rate Bid Loan  Request in  accordance
         with  Section  2.03  hereof  by  the  Borrower  for   Competitive   Bid
         Borrowings,  in the form of Exhibit I attached hereto and  incorporated
         herein by reference;

                  "Compliance  Date" has the  meaning  assigned  to such term in
         the definition of "Applicable Margin" in this Section 1.01;

                  "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 known to such
         Lender at the time of such  disclosure;  (c)is  subsequently  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;   (d)is  independently  generated  by  such
         Lender;  (e) is approved for release or  disclosure  by the Borrower in
         a separate writing; or (f) constitutes  financial  statements delivered
         to the  Agent  or a  Lender  under  Section  7.01  that  are  otherwise
         publicly available;

                  "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;

                  "Consistent   Basis"  in  reference  to  the   application  of
         Generally   Accepted   Accounting   Principles   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  in  Section
         6.01(e)(i) hereof;

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

                  "Consolidated  EBDAIT"  means,  with  respect to the  Borrower
         and its  Subsidiaries  for any period 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 Generally  Accepted  Accounting
         Principles applied on a Consistent Basis;

                  "Consolidated  Funded Debt Ratio"  means,  with respect to the
         Borrower  and its  Subsidiaries  for the  Four  Quarter  Period  ending
         immediately  prior to the date of  computation  thereof,  the  ratio of
         Consolidated  Funded  Indebtedness at such date to Consolidated  EBDAIT
         for such Four Quarter Period;

                  "Consolidated  Funded  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
         Consolidated   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 Generally  Accepted  Accounting
         Principles  applied on a  Consistent  Basis;  provided,  however,  that
         there shall be excluded from the  calculation  of  Consolidated  Funded
         Indebtedness  guaranties by the Borrower or any of its  Subsidiaries of
         non-consolidated  Indebtedness  of  another  Person up to an  aggregate
         principal  amount of  $5,000,000  and all  Indebtedness  consisting  of
         Capital  Lease  obligations  incurred in  connection  with  off-balance
         sheet sale and leaseback transactions;

                  "Consolidated  Interest  Coverage  Ratio" means,  with respect
         to the  Borrower  and  its  Subsidiaries  for the  Four-Quarter  Period
         ending  immediately  prior  to the  date of  computation  thereof,  the
         ratio  of  Consolidated  EBDAIT  during  such  Four-Quarter  Period  to
         Consolidated Interest Expense during such Four-Quarter Period;

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

                  "Consolidated   Subsidiary"   means  any   Subsidiary  of  the
         Borrower  whose  financial  information  and operations are required to
         be  consolidated in the financial  statements of the Borrower  pursuant
         to Generally Accepted Accounting Principles;

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

                  "Consolidated  Total Assets"  means,  at any time,  the sum of
         all  items  which  would be  classified  as  assets  on a  consolidated
         balance sheet of the Borrower and its  Subsidiaries  in accordance with
         Generally  Accepted  Accounting  Principals  applied  on  a  Consistent
         Basis;

                  "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 in
         accordance with Generally Accepted  Accounting  Principles 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 Generally Accepted  Accounting  Principles 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;

                  "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  communications  services
         similar  to  that  provided  in  (a)  through  (c)  above  and  (e) any
         hardware or software  utilized in any of the business  described in (a)
         through  (d) above  whether  by sale,  lease,  license  or  service  in
         either government or commercial enterprises worldwide;

                  "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;

                  "Determination  Date"  means  the  last  day  of  each  fiscal
         quarterly period of the Borrower;

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

                  "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;

                  "Environmental  Laws"  means  any  federal,   state  or  local
         statute,  law,  ordinance,  code,  rule,  regulation,  order or  decree
         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,  at any date, the Employee  Retirement  Income
         Security Act of 1974, as amended, and the regulations  thereunder,  all
         as the same shall be in effect at such date;

                  "ERISA  Affiliate"  means any entity which would be aggregated
         at any  relevant  time with the  Borrower  pursuant to Section  414(b),
         (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA.

                  "Event of Default" means any of the  occurrences  set forth as
         such in Section 9.01 hereof;

                  "Federal  Funds  Effective  Rate" for any day, as used herein,
         means the rate per annum  (rounded  upward to the nearest  1/100 of 1%)
         announced by the Federal  Reserve  Bank of New York (or any  successor)
         on such day as being the  weighted  average  of the rates on  overnight
         Federal  funds  transactions  arranged by Federal  funds brokers on the
         previous  trading  day,  as  computed  and  announced  by such  Federal
         Reserve Bank (or any  successor)  in  substantially  the same manner as
         such Federal  Reserve Bank computes and announces the weighted  average
         it refers to as the "Federal  Funds  Effective  Rate" as of the date of
         this  Agreement;  provided,  if  such  Federal  Reserve  Bank  (or  its
         successor)  does not announce such rate on any day, the "Federal  Funds
         Effective  Rate"  for such day  shall be the  Federal  Funds  Effective
         Rate for the last day on which such rate was announced;

                  "Fee  Letter"  means  that  certain  fee  letter  dated  as of
         September 15, 1994 between the Borrower and the Administrative 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   pension,
         retirement,  healthcare,  death,  disability or other employee  benefit
         plan;

                  "Four-Quarter   Period"   means  a   period   of   four   full
         consecutive Fiscal Quarters, taken together as one accounting period;

                  "Generally   Accepted   Accounting   Principles"  means  those
         principles of accounting set forth in  pronouncements  of the Financial
         Accounting  Standards  Board or 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,  as such  principles  are from  time to time  supplemented  and
         amended, subject to compliance at all times with Section 1.02 hereof;

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

                  "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
         Administrative Agent a Guaranty as provided in Section 7.19 hereof;

                  "Guaranty"  means  each  Guaranty  Agreement,   including  the
         Parent  Guaranty,  of a Guarantor  (whether  now  existing or hereafter
         delivered  in  accordance  with  Section  7.19 hereof  individually  or
         jointly  and  severally   with  other   Guarantors)  in  favor  of  the
         Administrative  Agent  guaranteeing  in whole or in part the payment of
         Obligations,  substantially  in the form of Exhibit M  attached  hereto
         and  incorporated  herein  by  reference,  as the same may be  amended,
         modified or supplemented;


                  "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
         intercompany indebtedness of the Borrower and its Subsidiaries;

                  "Indebtedness  for Money  Borrowed"  means for any  Person all
         indebtedness   in  respect  of  money   borrowed,   including   without
         limitation,  all Capital Leases and the deferred  purchase price of any
         property or asset,  evidenced by a promissory note, bond,  debenture or
         similar  written  obligation for the payment of money  (including,  but
         not  limited  to,   conditional   sales  or  similar  title   retention
         agreements);

                  "Index  Rate" means an interest  rate equal to the  Applicable
         Index Rate plus (or minus) a margin;

                  "Index  Rate Bid  Loan  Request"  means  any  Competitive  Bid
         Quote Request  requesting the Lenders to offer to make  Competitive Bid
         Loans at an Index Rate;

                  "Index Rate  Competitive  Bid Loan" means any  Competitive Bid
         Loan bearing interest at an Index Rate;

                  "Interest  Period"  (a)for  each  LIBOR  Loan  means a period
         commencing  on the date such LIBOR Loan is made or  converted  and each
         subsequent  period  commencing  on the  last  day  of  the  immediately
         preceding  Interest  Period for such LIBOR  Loan,  and  ending,  at the
         Borrower's  option,  on the date one, two, three,  six or twelve months
         thereafter (to the extent a twelve month  Interest  Period is available
         to the  Required  Lenders'  customers  generally)  as  notified  to the
         Administrative  Agent  by  the  appropriate  Authorized  Representative
         three (3) LIBOR  Business  Days prior to the beginning of such Interest
         Period; provided that,

                           (i)      if  the   Borrower   fails  to  notify   the
                  Administrative  Agent  of the  length  of an  Interest  Period
                  three (3) LIBOR  Business  Days prior to the first day of such
                  Interest  Period,  the Loan for which such Interest Period was
                  to be determined shall be deemed to be a Base Rate Loan;

                           (ii)     if  an  Interest  Period  for a  LIBOR  Loan
                  would  end on a day  which  is not a LIBOR  Business  Day such
                  Interest  Period  shall be  extended  to the  next  succeeding
                  LIBOR  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 LIBOR Business Day);

                           (iii)    any  Interest  Period  which  begins  on the
                  last LIBOR  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 LIBOR Business Day of a calendar month; and

                           (iv)     no  Interest  Period  shall  extend past the
                  Revolving  Credit  Termination  Date,  and there  shall not be
                  more than  twenty (20)  Interest  Periods  outstanding  at any
                  one time for all Revolving  Credit Loans and  Competitive  Bid
                  Loans combined; and

                  (b)      for  each  Competitive  Bid  Loan  means  the  period
         commencing  on the date of such  borrowing  and  ending on such date as
         may be mutually  agreed upon by the  Borrower and the Lender or Lenders
         making the Advance or  Advances,  as the case may be,  comprising  such
         Competitive Bid Loan; provided that:

                           (i)      no  Interest  Period  for an  Absolute  Rate
                  Competitive  Bid  Loan  shall  be for a  period  of less  than
                  seven days or greater than 360 days;

                           (ii)     each  Interest  Period  for  an  Index  Rate
                  Competitive  Bid Loan  shall  begin on the date  such  Loan is
                  made and end on a date one, two,  three,  six or twelve months
                  thereafter,  as agreed upon by the  Borrower and the Lender or
                  Lenders making such Index Rate Competitive Bid Loan;

                           (iii)    if an  Interest  Period  for an  Index  Rate
                  Competitive  Bid Loan  would end on a day which is not a LIBOR
                  Business  Day such  Interest  Period  shall be extended to the
                  next  succeeding  LIBOR  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 LIBOR Business Day);

                           (iv)     any  Interest   Period  for  an  Index  Rate
                  Competitive  Bid Loan which begins on the last LIBOR  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  LIBOR
                  Business Day of a calendar month; and

                           (v)      no  Interest  Period  shall  extend past the
                  Revolving  Credit  Termination  Date and  there  shall  not be
                  more than  twenty (20)  Interest  Periods  outstanding  at any
                  one time for all Revolving  Credit Loans and  Competitive  Bid
                  Loans combined;

                  "Interest   Rate   Selection   Notice"   means   the   written
         confirmation  delivered by an Authorized  Representative  of telephonic
         notice in  connection  with the  selection  or  conversion  of interest
         rates as to outstanding  Revolving  Credit Loans,  in the form attached
         hereto as Exhibit H and incorporated herein by reference;

                  "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
         Consolidated 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;

                  "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;

                  "Lending  Office"  means,  as  to  each  Lender,  the  Lending
         Office of such Lender  designated on the  signature  pages hereof or in
         an  Assignment  and  Acceptance or such other office of such Lender (or
         of an  affiliate  of such  Lender) as such Lender may from time to time
         specify to an Authorized  Representative and the  Administrative  Agent
         as the office by which its Loans are to be made and maintained;

                  "Letter  of  Credit"  means  any  Standby  Letter of Credit or
         Commercial  Letter of Credit issued by  NationsBank  for the account of
         the Borrower in favor of a Person as described in Article III hereof;

                  "Letter  of Credit  Commitment"  means  with  respect  to each
         Lender,  the  obligation  of such Lender to acquire  Participations  up
         to an  aggregate  stated  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  NationsBank  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;

                  "Letter of Credit  Outstandings"  means all undrawn amounts of
         Letters of Credit plus Reimbursement Obligations;

                  "LIBOR  Base Rate"  means for any LIBOR Loan or a  Competitive
         Bid  Loan  bearing  interest  at the  Index  Rate,  in  respect  of the
         Interest  Period  specified  (or  deemed  specified)  in the  Borrowing
         Notice or in the  Interest  Rate  Selection  Notice for such LIBOR Loan
         or in the Index Rate Bid Loan  Request for such  Competitive  Bid Loan,
         the rate  (which  shall  be the  same  for  each  day of such  Interest
         Period)  for  deposits  in  Dollars  for a  period  comparable  to  the
         Interest  Period for such  LIBOR  Loan  which  appears on the Dow Jones
         Telerate  Service  page 3750 (or such  other page as may  replace  that
         page on that  service or such other  service  as may be  designated  as
         the  information   vendor  by  the   Administrative   Agent,   any  new
         information  vendor to be subject to the consent of the Borrower  which
         consent   will   not  be   unreasonably   withheld   or   delayed)   at
         approximately 11:00 A.M.  Charlotte,  North Carolina time two (2) LIBOR
         Business  Days prior to the  commencement  of the  applicable  Interest
         Period;  provided  that if such rate  does not  appear on such page and
         is  otherwise  unavailable,   the  rate  shall  be  determined  by  the
         Administrative  Agent  in good  faith  in  accordance  with  its  usual
         procedures for its customers generally;

                  "LIBOR  Business  Day"  means  a  Business  Day on  which  the
         relevant  international  financial markets are open for the transaction
         of the business  contemplated  by this  Agreement  in London,  England,
         New York, New York and Charlotte, North Carolina;

                  "LIBOR  Loan"  means a  Revolving  Credit  Loan for  which the
         rate of interest is determined by reference to the LIBOR Rate;

                  "LIBOR  Rate"  means,  for the  Interest  Period for any LIBOR
         Loan,  the  rate of  interest  per  annum  determined  pursuant  to the
         following formula:

                  LIBOR           LIBOR Base Rate           Applicable
                          =    ________________________  +
                  Rate         1 - Reserve Requirement       Margin

                  "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 its  Subsidiaries  shall be deemed to
         be the owners of any  property  which  either of them have  acquired or
         hold 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  Credit Loans or
         Swing Line Loans or Competitive Bid Loans;

                  "Loan  Documents"  means  this  Agreement,   the  Notes,  each
         Guaranty,  Applications  and  Agreements  for  Letters of  Credit,  the
         Reaffirmation   Agreement  and  all  other  instruments  and  documents
         heretofore  or  hereafter  executed or delivered to and in favor of any
         Lender  or the  Administrative  Agent in  connection  with the Loans or
         the Letters of Credit made,  issued or created under this  Agreement as
         the same may be amended, modified or supplemented from time to time;

                  "Material  Adverse Effect" means a material  adverse effect on
         (a) the business,  properties,  operations  or condition,  financial or
         otherwise,  of the Parent or Borrower and its  Subsidiaries  taken as a
         whole,  (b) the  ability of the  Borrower or any  Guarantor  to perform
         its  obligations  under  any of the  Loan  Documents  to  which it is a
         party  or (c)  the  validity  or  enforceability  of  any  of the  Loan
         Documents;

                  "Material    Domestic    Subsidiary"   means   each   Material
         Subsidiary  which is organized  and  existing  under the laws of one of
         the states of the United States of America;

                  "Material   Subsidiary"   means  (i) any  direct  or  indirect
         Subsidiary  which  has  total  assets  equal to or  greater  than 5% of
         Consolidated  Total Assets  (calculated at any time as of the then most
         recent  fiscal year end) or has profits  before tax equal to or greater
         than 5% of  Consolidated  Total Profits  Before Tax  (calculated at any
         time as of the then most  recent  fiscal  year  end),  (ii)Transactive
         Corporation,  a Delaware  corporation and (iii) the Passive  Investment
         Company, if and when created or acquired;  provided,  however, that any
         Material  Subsidiary  under clauses (i) or (ii) above shall cease to be
         a Material  Subsidiary  and shall be released  from its  obligation  to
         provide a Guaranty  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   Investor   Service,   a  Delaware
         corporation;

                  "Multi-employer  Plan" means an 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 also a  multi-employer  plan as  defined  in  Section
         4001(a)(3) of ERISA;

                  "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 Revolving Credit Notes, the
         Swing Line Note and the Competitive Bid 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,  (iii) all  liabilities  of Borrower to 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,   the   Documentation   Agent  or  the
         Administrative  Agent  hereunder,  under  any one or more of the  other
         Loan Documents or with respect to the Loans;

                  "Outstandings"  means, at any time of  determination,  the sum
         of the Revolving Credit  Outstandings,  Letter of Credit  Outstandings,
         Swing Line Outstandings and Competitive Bid Outstandings;

                  "Parent"   means  GTECH  Holdings   Corporation,   a  Delaware
         corporation and owner of all of the Common Stock;

                  "Parent  Guaranty"  means that certain  Guaranty  Agreement of
         the Parent  dated as of the date hereof in favor of the  Administrative
         Agent and guaranteeing payment of the Obligations;

                  "Participation"  means,  with  respect  to any  Lender  (other
         than   NationsBank),   the  extension  of  credit  represented  by  the
         participation   of  such  Lender   hereunder   in  the   liability   of
         NationsBank  in  respect  of a Swing Line Loan made or Letter of Credit
         issued by NationsBank 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 (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;

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

                  "Prime  Rate" means the rate of interest  per annum  announced
         publicly  by  NationsBank  as its prime  rate  from  time to time.  The
         Prime Rate is not  necessarily  the best or the lowest rate of interest
         offered by NationsBank;

                  "Priority  Debt" means the sum  (without  duplication)  of (i)
         the aggregate  unpaid  principal amount of Indebtedness of the Borrower
         and  any  Material  Subsidiary  secured  by  Liens  (other  than  Liens
         permitted by Section  8.06(a),  (b),  (c), (d), (e), (g), (h), (i) and
         (j)  hereof),  plus  (ii)  all  outstanding  Attributable  Debt  of the
         Borrower  and any Material  Subsidiary  (other than  Attributable  Debt
         with  respect  to any  Sale  and  Leaseback  Transaction  permitted  by
         Section  8.15(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);

                  "Principal  Office"  means the  office  of the  Administrative
         Agent at NationsBank,  National  Association,  NationsBank  Plaza,  6th
         Floor,  NC  1002-06-19,  Charlotte,  North Carolina  28255,  Attention:
         Agency   Services,   or  such   other   office   and   address  as  the
         Administrative Agent may from time to time designate;

                  "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;

                  "Quotation  Date"  shall  have the  meaning  assigned  to such
         term in Section 2.03(c)(iv) hereof;

                  "Racimec"  means  Racimec   Informatic   Brasileira   S.A.,  a
         Brazilian  company  presently engaged in the marketing and servicing of
         lotteries;

                  "Rate Hedging  Obligations"  means any and all  obligations of
         the  Borrower,   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;
         and (ii) any and all cancellations,  buybacks, reversals,  terminations
         or assignments of any of the foregoing;

                  "Reaffirmation  Agreement" means the  Reaffirmation  Agreement
         executed  by each of the  existing  Guarantors  as of the  date  hereof
         ratifying  and  consenting  to  the  amendments  to  the  Prior  Credit
         Agreement  made  herein  and  reaffirming  the  guaranties   issued  in
         connection with the Prior Credit Agreement;

                  "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"  means at any time, the obligation
         of the  Borrower  with  respect  to any  Letter of Credit to  reimburse
         NationsBank  and  the  Lenders  to  the  extent  of  their   respective
         Participations  (including  by the receipt by  NationsBank  of proceeds
         of Loans  pursuant to  Section 3.02  hereof)  for  amounts  theretofore
         paid by NationsBank pursuant to a drawing under such Letter of Credit;

                  "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  Administrative   Agent  and  the  Required  Lenders  in  their
         reasonable  discretion,  any of which shall  replace any then  existing
         Lender or Lenders  pursuant  to Section  2.13 or 4.07 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 at least
         51% 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 (i) at all times prior to the
         Reduction  Date (as  defined  below) be equal to its  Revolving  Credit
         Commitment  plus the  amount  of such  Lender's  Applicable  Commitment
         Percentage  of Swing  Line  Loans and  Letter  of Credit  Outstandings;
         provided  that,  if any Lender shall have failed to pay to  NationsBank
         upon  demand its  Applicable  Commitment  Percentage  of any Swing Line
         Loan  or  drawing   under  any  Letter  of  Credit   resulting   in  an
         outstanding  Reimbursement  Obligation,  such Lender's  Credit Exposure
         attributable   to  such   Swing   Line   Loans  or   Letter  of  Credit
         Outstandings  or both  shall be  deemed to be held by  NationsBank  for
         purposes of this  definition  and (ii) on and after the Reduction  Date
         be equal to the amount of  Competitive  Bid Loans owing to such Lender;
         "Reduction   Date"  means  the  date  on  which  the  Revolving  Credit
         Commitment  of all of the Lenders and the  obligations  of  NationsBank
         to make  Swing  Line  Loans and issue  Letters  of  Credit  shall  have
         terminated  and all  Revolving  Credit  Outstandings,  all  Swing  Line
         Outstandings  and all  Letter of Credit  Outstandings  shall  have been
         paid in full;

                  "Reserve  Requirement"  means, for any LIBOR Loan, the maximum
         aggregate rate at which reserves  (including,  without limitation,  any
         marginal,  supplemental  or  emergency  reserves)  are  required  to be
         maintained  with  respect  thereto  under  Regulation D  by the  member
         banks of the Federal  Reserve  System with respect to Dollar funding in
         the  London  interbank  market.  Without  limiting  the  effect  of the
         foregoing,  the Reserve  Requirement  shall reflect any other  reserves
         required  to be  maintained  by such  member  banks  by  reason  of any
         Regulatory   Change  against  (i) any  category  of  liabilities  which
         includes  deposits by  reference  to which the LIBOR Base Rate is to be
         determined  or  (ii) any  category  of  extensions  of  credit or other
         assets which include LIBOR Loans;

                  "Revolving  Credit  Commitment"  means  with  respect  to each
         Lender,  the obligation of such Lender to make  Revolving  Credit Loans
         to the  Borrower  and to  purchase  Participations  up to an  aggregate
         principal  amount at any one time  outstanding  equal to the amount set
         forth  opposite such Lender's name on Exhibit A  hereto as the same may
         be  increased  or  decreased   from  time  to  time  pursuant  to  this
         Agreement;  provided,  however,  that amounts advanced by any Lender as
         Competitive Bid Loans shall not reduce such Lender's  Revolving  Credit
         Commitment or modify its obligation to make its  Applicable  Commitment
         Percentage of Advances under the Revolving Credit Facility;

                  "Revolving  Credit  Facility" means the facility  described in
         Section  2.01  hereof  providing  for  Loans  to  the  Borrower  by the
         Lenders  in an  aggregate  principal  amount  equal  to (i)  the  Total
         Revolving Credit Commitment,  less (ii) the aggregate  principal amount
         of Swing  Line  Outstandings  and  Letter  of Credit  Outstandings  and
         Competitive Bid Outstandings;

                  "Revolving  Credit  Loan"  means a Loan made  pursuant  to the
         Revolving  Credit  Facility (but  specifically  excludes all Swing Line
         Loans) pursuant to Section 2.01 hereof;

                  "Revolving Credit Notes" means,  collectively,  the promissory
         notes of the Borrower  evidencing  Revolving  Credit Loans executed and
         delivered  to  the  Lenders  as  provided  in  Section  2.08(a)  hereof
         substantially   in  the  form   attached   hereto  as   Exhibit  F  and
         incorporated  herein by reference,  with  appropriate  insertions as to
         amounts,  dates and names of  Lenders,  as the same  shall be  amended,
         modified or supplemented and in effect from time to time;

                  "Revolving  Credit  Outstandings"  means,  as of any  date  of
         determination,  the aggregate  principal  Indebtedness  of the Borrower
         on all Revolving Credit Loans then outstanding;

                  "Revolving  Credit  Termination  Date"  means the  earliest to
         occur of (i) the fifth  anniversary  of the Closing  Date,  or (ii) the
         date of  termination of Lenders'  obligations  pursuant to Section 9.01
         hereof upon the  occurrence of an Event of Default,  or (iii) such date
         as  the  Borrower  may  voluntarily   and  permanently   terminate  the
         Revolving  Credit  Facility and the Competitive Bid Facility by payment
         in  full  of  all   Obligations   (including   the   discharge  of  all
         Obligations of  NationsBank  and the Lenders with respect to Letters of
         Credit and Participations) pursuant to Section 2.09 hereof;

                  "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;

                  "S&P" means  Standard & Poor's  Ratings  Group,  a division of
         McGraw-Hill;

                  "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 Multi-employer 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, without limitation, 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;

                  "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;

                  "Subsidiary"  means  (i)any  corporation  or other  entity in
         which more than 50% of its  outstanding  stock having  ordinary  voting
         power 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 Generally  Accepted  Accounting  Principles
         applied on a Consistent Basis;

                  "Swap  Agreement"  means one or more  agreements  with respect
         to  Indebtedness  evidenced  by the Notes  between the Borrower and any
         Person,  on terms  mutually  acceptable  to Borrower  and such  Person,
         which agreements create Rate Hedging Obligations;

                  "Swing Line" means the  revolving  line of credit  established
         by  NationsBank  in favor of the  Borrower  pursuant  to  Section  2.02
         hereof;

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

                  "Swing  Line  Loans"  means  Loans  made  by   NationsBank  to
         Borrower pursuant to Section 2.02 hereof;

                  "Swing Line Note" means the  promissory  note of the  Borrower
         evidencing  Swing Line Loans  executed  and  delivered  to  NationsBank
         substantially   in  the  form   attached   hereto  as   Exhibit G   and
         incorporated  herein  by  reference,  as the  same  shall  be  amended,
         modified or supplemented and in effect from time to time;

                  "Swing   Line   Outstandings"   means,   as  of  any  date  of
         determination,  the  aggregate  principal  Indebtedness  of Borrower on
         all Swing Line Loans then outstanding;

                  "Total Letter of Credit  Commitment"  means an amount equal to
         $100,000,000; and

                  "Total Revolving Credit  Commitment"  means an amount equal to
         $400,000,000,  as reduced from time to time in accordance with Section
         2.09 hereof.

         Accounting  Terms.  All  accounting  terms  not  specifically   defined
herein shall have the meanings  assigned to such terms and shall be  interpreted
in accordance  with  Generally  Accepted  Accounting  Principles as in effect on
the date of the audited  financial  statements  of the  Borrower  referred to in
Section 6.01(f)(i) hereof and applied on a Consistent Basis.

         Terms  Consistent.  All of the terms  defined in this  Agreement  shall
have such defined  meanings  when used in any of the Loan  Documents  unless the
context  shall  require   otherwise.   All  references  to  the  Borrower,   the
Administrative  Agent and any Lender  shall be deemed to include  any  successor
or  permitted  assign of any  thereof.  All plural  references  and  definitions
shall  have  a  corresponding   meaning  in  the  singular,   and  all  singular
references and definitions shall have a corresponding meaning in the plural.


                                            ARTICLE II

                                            The Loans

         2.01  Revolving Credit Loans

         (a)      Commitment.  Subject  to the  terms  and  conditions  of  this
Agreement,  each Lender  severally  agrees to make and continue  Advances  under
the Revolving  Credit Facility to the Borrower,  from time to time on a pro rata
basis  as  to  the  total  borrowing  requested  by  the  Borrower  on  any  day
determined  by its  Applicable  Commitment  Percentage  of the  Total  Revolving
Credit  Commitment 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  Advance  (i) so long as a Default or an
Event of Default has occurred and is  continuing  or (ii) if the  Administrative
Agent has  accelerated  the maturity of the  Revolving  Credit Notes as a result
of an Event of  Default;  provided  further,  however,  that  immediately  after
giving effect to each such Advance,  the principal amount of Outstandings  shall
not exceed the Total  Revolving  Credit  Commitment.  Within  such  limits,  the
Borrower  may  borrow,   repay   (without   premium  or  penalty)  and  reborrow
hereunder,  on a  Business  Day in the case of a Base  Rate  Loan and on a LIBOR
Business Day in the case of a LIBOR Loan,  from the Closing Date until,  but (as
to  borrowings   and   reborrowings)   not  including,   the  Revolving   Credit
Termination Date.

         (b)      Amounts.  Except as  otherwise  permitted  by the Lenders from
time to time, the aggregate unpaid  principal  amount of the Outstandings  shall
not  exceed  at  any  time  an  amount  equal  to  the  Total  Revolving  Credit
Commitment.  Each  Revolving  Credit Loan made,  converted or continued,  unless
made in accordance  with Section  2.01(c)(iv) or 3.02(c)  hereof,  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 and Rate Selection.

         (i)      The  appropriate  Authorized  Representative  shall  give  the
Administrative  Agent (A)  irrevocable  telephonic  notice of each  LIBOR  Loan,
whether  representing  an  additional  Advance  hereunder or the  conversion  of
borrowings  hereunder  from Base Rate Loans to LIBOR Loans or the  election of a
subsequent  Interest Period for any LIBOR Loan, prior to 11:30 A.M.,  Charlotte,
North  Carolina  time at least  three (3) LIBOR  Business  Days prior to the day
such  Advance is to be made or such Loan is to be converted  or  continued;  and
(B)  irrevocable  telephonic  notice  of each Base  Rate  Loan  representing  an
additional  Advance  hereunder or the  conversion of borrowings  hereunder  from
LIBOR Loans to Base Rate Loans prior to  11:30 A.M.  Charlotte,  North  Carolina
time on the day  such  Advance  is to be made or such  Loan is to be  converted.
Each such notice,  which shall be effective  upon receipt by the  Administrative
Agent,  shall  specify the amount of the Advance,  the type (Base Rate or LIBOR)
of Loan,  the date of the Advance and, if a LIBOR Loan,  the Interest  Period to
be used in the  computation  of interest.  An  Authorized  Representative  shall
provide the  Administrative  Agent written  confirmation of each such telephonic
notice  on  the  same  day  by  telefacsimile  transmission  in  the  form  of a
Borrowing  Notice for  additional  Advances,  or in the form of an Interest Rate
Selection  Notice  for  the  selection  or  conversion  of  interest  rates  for
outstanding  Revolving Credit Loans, in each case with  appropriate  insertions,
but failure to provide such  confirmation  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 2.11 hereof.  If the  Administrative  Agent
does not receive a notice of  election  of duration of an Interest  Period or to
convert by the time prescribed  hereby and by Section 2.11 hereof,  the Borrower
shall be deemed to have  elected to convert to or  continue  such Loan as a Base
Rate Loan until the  Borrower  otherwise  notifies the  Administrative  Agent in
accordance herewith and with Section 2.11 hereof.

         (ii)     Notice of receipt of each  Borrowing  Notice and Interest Rate
Selection  Notice shall be provided by the  Administrative  Agent to each Lender
with  reasonable  promptness,  but not later  than 1:00 P.M.,  Charlotte,  North
Carolina  time  on the  same  day as  Administrative  Agent's  receipt  of  such
notice.   The   Administrative   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.

         (iii)    Not later than 2:30 P.M.,  Charlotte,  North  Carolina time on
the date  specified  for each Advance of a Revolving  Credit  Loan,  each Lender
shall,  pursuant to the terms and subject to the  conditions of this  Agreement,
make the amount of the  Revolving  Credit Loan or Loans to be made by it on such
day available to the  Administrative  Agent, by depositing or  transferring  the
proceeds  thereof in immediately  available funds at the Principal  Office.  The
amount so received by the Administrative  Agent shall,  subject to the terms and
conditions of this  Agreement,  be made available to the Borrower by delivery of
the  proceeds  thereof  to  an  account   designated  by  the  Borrower  in  the
applicable Borrowing Notice by an Authorized Representative.

         (iv)     Notwithstanding  the  foregoing,  if a drawing  is made  under
any Letter of Credit prior to the Revolving Credit  Termination  Date, notice of
such drawing and resulting  Reimbursement  Obligation shall be provided promptly
by NationsBank to the Administrative  Agent and the  Administrative  Agent shall
provide  notice to each  Lender by  telephone.  If such notice to the Lenders of
a drawing  under any  Letter of Credit is given by the  Administrative  Agent at
or before 12:00 noon  Charlotte,  North  Carolina  time on any Business Day, the
Borrower shall be deemed to have requested,  and each Lender shall,  pursuant to
the  conditions  of this  Agreement,  make a Base Rate Loan under the  Revolving
Credit   Facility  in  the  amount  of  such  Lender's   Applicable   Commitment
Percentage  of such  Reimbursement  Obligation  and shall pay such amount to the
Administrative  Agent for the account of NationsBank at the Principal  Office in
Dollars and in immediately  available  funds before 2:30 P.M.  Charlotte,  North
Carolina  time on the same  Business  Day.  If notice to the Lenders is given by
the  Administrative  Agent after 12:00 noon  Charlotte,  North  Carolina time on
any  Business  Day,  the Borrower  shall be deemed to have  requested,  and each
Lender  shall,  pursuant  to the terms and  subject  to the  conditions  of this
Agreement,  make a Base Rate Loan under the  Revolving  Credit  Facility  in the
amount of such Lender's Applicable  Commitment  Percentage of such Reimbursement
Obligation  and  shall  pay such  amount  to the  Administrative  Agent  for the
account of  NationsBank  at the Principal  Office in Dollars and in  immediately
available  funds before 12:00 noon  Charlotte,  North  Carolina time on the next
following  Business  Day.  Such Base Rate Loan shall  continue  unless and until
the  Borrower  converts  such  Base Rate  Loan in  accordance  with the terms of
Section 2.11 hereof.

         2.02 Swing Line Loans.

                  (a)      Notwithstanding   any   other   provision   of   this
         Agreement  to the  contrary,  NationsBank  shall make  available  Swing
         Line Loans to the Borrower  prior to the Revolving  Credit  Termination
         Date.  NationsBank  shall not make any Swing Line Loan pursuant  hereto
         (i) if the Borrower is not in  compliance  with all the  conditions  to
         the  making of  Revolving  Credit  Loans  set forth in this  Agreement,
         (ii) if after  giving  effect to such Swing  Line Loan,  the Swing Line
         Outstandings  would  exceed  $25,000,000,  or  (iii)  if  after  giving
         effect to such  Swing  Line  Loan,  the sum of all  Outstandings  would
         exceed the Total Revolving Credit Commitment.

                  (b)      Each provision of Section  2.01(c) hereof  applicable
         to Base Rate Loans shall be  applicable  in all  respects to each Swing
         Line  Loan.  Each  Borrowing  Notice  submitted  to the  Administrative
         Agent with  respect to Swing Line Loans shall  specify,  in addition to
         the items required by Section 2.01(c)(i)  hereof,  that such Advance is
         a Swing Line Loan and the  applicable  Swing Line  Rate.  All  Advances
         made  pursuant  to  this  Section  2.02  shall  bear  interest  at  the
         applicable Swing Line Rate.

                  (c)      All  Advances  made by  NationsBank  under  the Swing
         Line pursuant to this Section 2.02  outstanding  on any day shall be in
         the minimum  principal amount of $500,000 and any integral  multiple of
         $100,000 in excess thereof.

                  (d)      The  Borrower  and each Lender  acknowledge  that all
         Swing Line Loans are to be made solely by  NationsBank  to the Borrower
         but that such  Lender  shall  share the risk of loss  with  respect  to
         such Advances by purchasing from  NationsBank a  Participation  in such
         Swing  Line  Loan  in an  amount  equal  to  such  Lender's  Applicable
         Commitment  Percentage  of such Swing Line Loan.  Upon  demand  made by
         NationsBank,  each Lender shall,  according to such Lender's Applicable
         Commitment  Percentage  of such Swing Line  Loan,  promptly  provide to
         NationsBank  its  purchase  price  therefor  in an amount  equal to its
         Participation  therein.  Any  advance  made  by a  Lender  pursuant  to
         demand  of  NationsBank  of the  purchase  price  of its  Participation
         shall be deemed a Base Rate Loan under the  Revolving  Credit  Facility
         unless the Borrower  converts  such Base Rate Loan in  accordance  with
         Section 2.11 hereof.  The  obligation  of each Lender to so provide its
         purchase price to NationsBank  shall be absolute and  unconditional and
         shall not be affected by the  occurrence  of an Event of Default or any
         other occurrence or event.

                  (e)      Borrower  at its option  may  request an Advance as a
         Revolving  Credit Loan pursuant to Section  2.01(a) hereof in an amount
         sufficient  to repay  any or all Swing  Line  Loans on any date and the
         Administrative  Agent shall upon the receipt of such  Advance,  provide
         to  NationsBank  the amount  necessary to repay such Swing Line Loan or
         Loans  (which  NationsBank  shall  then  apply to such  repayment)  and
         credit  any  balance  of such  Revolving  Credit  Loan  in  immediately
         available  funds  to  an  account  designated  by  the  Borrower.   The
         proceeds  of  such   Advances   shall  be  paid  to   NationsBank   for
         application  to the  Swing  Line  Outstandings  and the  Participations
         therein  purchased by the Lenders  pursuant to Section  2.02(d)  above,
         and the  Lenders  shall  then be deemed to have made  Revolving  Credit
         Loans in the amount of such  Advances.  The Swing  Line shall  continue
         in effect until the earlier of (i)  occurrence  and  continuation  of a
         Default or Event of Default,  or (ii) the Revolving Credit  Termination
         Date.  The Swing Line shall be  reinstated  at the time any  Default or
         Event  of  Default  is  cured,   provided  that  the  Revolving  Credit
         Termination Date has not occurred.

         2.03 Competitive Bid Loans

                  (a)      In addition to Revolving  Credit  Loans,  at any time
prior to the Revolving  Credit  Termination Date during which the conditions set
forth in  Section 2.03(b)  below are  satisfied,  the Borrower may, as set forth
in this  Section  2.03,  request the Lenders to make offers to make  Competitive
Bid Loans to the  Borrower  in  Dollars.  The  Lenders  may,  but shall  have no
obligation  to,  make such  offers  and the  Borrower  may,  but  shall  have no
obligation to, accept any such offers,  in the manner set forth in this Section
2.03.  The  making of a  Competitive  Bid Loan by any  Lender  shall not  reduce
such Lender's  Revolving Credit  Commitment  except as calculated based upon the
Total  Revolving  Credit  Commitment  as reduced by such  Competitive  Bid Loan.
Competitive Bid Outstandings,  together with the sum of all other  Outstandings,
shall not exceed the Total Revolving Credit Commitment at any time.

                  (b)      When the  Borrower  wishes to request  offers to make
Competitive  Bid Loans,  it shall give the  Administrative  Agent  (which  shall
promptly  notify  the  Lenders)  either  an Index  Rate Bid Loan  Request  to be
received  no later than  11:00 a.m.  Charlotte,  North  Carolina  time three (3)
LIBOR  Business  Days  prior to the date of  borrowing  proposed  therein  or an
Absolute  Rate  Bid  Loan  Request  to be  received  no  later  than  11:00 a.m.
Charlotte,  North  Carolina  time  one (1)  Business  Day  prior  to the date of
borrowing  proposed  therein  (or such other time and date as the  Borrower  and
the  Administrative  Agent,  with  the  consent  of the  Required  Lenders,  may
agree).  The Borrower may request  offers to make  Competitive  Bid Loans for up
to four (4) different  Interest  Periods in a single notice (a "Competitive  Bid
Borrowing").  Each such  Competitive  Bid Quote Request  shall be  substantially
in the form of Exhibit I  attached hereto and  incorporated  herein by reference
and shall specify as to each Competitive Bid Borrowing:

                           (i)      the proposed  date of such  Competitive  Bid
                  Borrowing,  which  shall be a  Business  Day in the case of an
                  Absolute  Rate Bid Loan  Request  or a LIBOR  Business  Day in
                  the case of an Index Rate Bid Loan Request;

                           (ii)     the  aggregate  amount  of such  Competitive
                  Bid  Borrowing,  which  shall  be at least  $5,000,000  (or in
                  integral  multiples  of $100,000 in excess  thereof) but shall
                  not cause the limits  specified in Section  2.03(a)  hereof to
                  be violated;
                           (iii)    the  duration  of  the  Interest  Period  or
                  Interest  Periods  applicable  thereto  (which may be not less
                  than 7 nor more  than 360 days  with  respect  to an  Absolute
                  Rate  Competitive  Bid Loan and which must be one, two, three,
                  six  or  twelve   months   with   respect  to  an  Index  Rate
                  Competitive Bid Loan); and

                           (iv)     the  date  on  which  the   Competitive  Bid
                  Quotes are to be submitted  if it is before the proposed  date
                  of borrowing  (the date on which such  Competitive  Bid Quotes
                  are to be submitted is called the "Quotation Date").

                  (c)      (i)      Each   Lender   may   submit   one  or  more
Competitive  Bid Quotes,  each  containing  an offer to make a  Competitive  Bid
Loan in response to any  Competitive  Bid Quote  Request;  provided that, if the
Borrower's  request  under  Section  2.03(b)  hereof  specified  more  than  one
Interest  Period,  such Lender may make a single  submission  containing  one or
more  Competitive  Bid Quotes for each such Interest  Period.  Each  Competitive
Bid Quote must be  submitted  to the  Administrative  Agent not later than 10:00
a.m.  Charlotte,  North  Carolina time on the Quotation Date (or such other time
and date as the Borrower and the  Administrative  Agent, with the consent of the
Required  Lenders,  may agree)  provided that any  Competitive  Bid Quote may be
submitted  by  NationsBank  only if  NationsBank  notifies  the  Borrower of the
terms of the offer contained therein not later than 9:45 a.m.  Charlotte,  North
Carolina  time on the Quotation  Date.  Subject to Articles IV, V and IX hereof,
any Competitive  Bid Quote so made shall be irrevocable  except with the consent
of the Administrative Agent given on the instructions of the Borrower.

                  (d)      Each  Competitive  Bid Quote  shall be  substantially
in the form of Exhibit J attached  hereto and  incorporated  herein by reference
and shall specify:

                           (i)      the  proposed  date  of  borrowing  and  the
                  Interest Periods applicable to all or each portion thereof;

                           (ii)     the  principal  amount  of  the  Competitive
                  Bid Loan for  which  each  such  offer  is being  made,  which
                  principal   amount  shall  be  at  least   $1,000,000  (or  in
                  integral  multiples of $100,000 in excess  thereof);  provided
                  that the aggregate  principal  amount of all  Competitive  Bid
                  Loans for which a Lender  submits  Competitive  Bid Quotes may
                  not  exceed  the  principal  amount  of  the  Competitive  Bid
                  Borrowing  for a particular  Interest  Period for which offers
                  were requested;

                           (iii)    the rate of  interest  offered for each such
                  Competitive Bid Loan; and

                           (iv)     the identity of the quoting Lender.

Unless  otherwise  agreed  by the  Administrative  Agent  and the  Borrower,  no
Competitive  Bid  Quote  shall  contain   qualifying,   conditional  or  similar
language  or propose  terms  other than or in addition to those set forth in the
applicable  Competitive  Bid  Quote  Request.  Any  subsequent  Competitive  Bid
Quote submitted by a Lender that amends,  modifies or is otherwise  inconsistent
with a previous  Competitive  Bid Quote submitted by such Lender with respect to
the  same   Competitive   Bid  Quote  Request  shall  be   disregarded   by  the
Administrative  Agent unless such subsequent  Competitive Bid Quote is submitted
solely to correct a manifest error in such former Competitive Bid Quote.

                  (e)      The   Administrative   Agent  shall  as  promptly  as
practicable  after the  Competitive Bid Quote is submitted (but in any event not
later than 10:30 a.m.  Charlotte,  North  Carolina time on the Quotation  Date),
notify the  Borrower  in writing by  facsimile  of the terms of any  Competitive
Bid Quote  submitted  by a Lender that is in  accordance  with  Section  2.03(c)
hereof.  The  Administrative  Agent's  notice to the Borrower  shall specify (i)
the  aggregate  principal  amount of the  Competitive  Bid  Borrowing  for which
Competitive  Bid Quotes have been  received  and (ii) the  respective  principal
amount  and  interest  rate so offered by each  Lender  (identifying  the Lender
that  made  each   Competitive  Bid  Quote).   As  promptly  as  possible,   the
Administrative  Agent shall forward to the Borrower  copies of each  Competitive
Bid Quote submitted to the Administrative Agent.

                  (f)      Not later than 11:00 a.m.  Charlotte,  North Carolina
time on the  Quotation  Date (or such  other time and date as the  Borrower  and
the  Administrative  Agent,  with  the  consent  of the  Required  Lenders,  may
agree),  the Borrower  shall notify the  Administrative  Agent of its acceptance
or  nonacceptance  of the  Competitive  Bid Quotes so notified to it pursuant to
Section  2.03(e)  hereof (and the failure of the Borrower to give such notice by
such time shall constitute  nonacceptance)  and the  Administrative  Agent shall
promptly  notify each affected  Lender.  In the case of acceptance,  such notice
shall  specify  the  aggregate  principal  amount  of offers  for each  Interest
Period that are accepted.  The Borrower may accept a  Competitive  Bid Quote for
the  entire  principal  amount of the  Competitive  Bid Loan so  offered  or any
portion  thereof.  The  Borrower's  acceptance  of  Competitive  Bid  Quotes  is
further subject to the following conditions:

                           (i)      the  aggregate   principal  amount  of  each
                  Competitive  Bid  Borrowing  may  not  exceed  the  applicable
                  amount  set  forth  in  the  related   Competitive  Bid  Quote
                  Request;

                           (ii)     the  aggregate   principal  amount  of  each
                  Competitive  Bid Borrowing  shall be at least  $5,000,000  (or
                  in  integral  multiples  of $100,000  in excess  thereof)  but
                  shall  not  cause  the  limits  specified  in  Section 2.03(a)
                  hereof to be violated;

                           (iii)    except  as  provided  below,  acceptance  of
                  Competitive  Bid  Quotes may be made only in  ascending  order
                  of interest  rates  beginning with the lowest rate so offered;
                  and

                           (iv)     the    Borrower    may   not    accept   any
                  Competitive  Bid  Quotes  where the  Administrative  Agent has
                  correctly  advised  the  Borrower  that such  Competitive  Bid
                  Quote  fails  to  comply  with  Section   2.03(d)   hereof  or
                  otherwise  fails  to  comply  with  the  requirements  of this
                  Agreement  (including,  without  limitation,  Section  2.03(a)
                  hereof).

                  (g)      If  Competitive  Bid  Quotes  are made by two or more
Lenders  with the  same  Absolute  Rate or  Index  Rate,  as  applicable,  for a
greater  aggregate  principal  amount  than  the  amount  in  respect  of  which
Competitive  Bid Quotes are  permitted to be accepted  for the related  Interest
Period  after the  acceptance  of all  Competitive  Bid  Quotes,  if any, of all
lower  Absolute Rates or Index Rates,  as applicable,  offered by any Lender for
such related Interest  Period,  the principal amount of Competitive Bid Loans in
respect of which such  Competitive  Bid Quotes are  accepted  shall be allocated
by the  Borrower  among such  Lenders as nearly as  possible  (in  amounts of at
least  $1,000,000  or in integral  multiples  of $100,000 in excess  thereof) in
proportion to the aggregate  principal  amount of such  Competitive  Bid Quotes.
Determinations  by the Borrower of the amounts of Competitive  Bid Loans and the
lowest bid as provided in Section  2.03(f)(iii)  hereof shall be  conclusive  in
the absence of manifest error.

                  (h)      Any Lender  whose offer to make any  Competitive  Bid
Loan has been  accepted  shall,  not  later  than  1:00  p.m.  Charlotte,  North
Carolina  time on the date  specified  for the  making  of such  Loan,  make the
amount of such  Loan  available  to the  Administrative  Agent at the  Principal
Office in  Dollars  and in  immediately  available  funds,  for  account  of the
Borrower.  The amount so received by the  Administrative  Agent  shall,  subject
to the  terms  and  conditions  of  this  Agreement,  be made  available  to the
Borrower on such date by  depositing  the same,  in Dollars  and in  immediately
available funds, in an account specified by the Borrower.

                  (i)      The parties  hereto agree that each  Competitive  Bid
Loan (as defined in the Prior Credit  Agreement)  advanced by a Lender under the
Prior  Credit  Agreement  and  described  on Schedule  2.03(i)  hereto  shall be
deemed  to be as of the  Closing  Date a  Competitive  Bid  Loan  hereunder  and
evidenced by such Lender's Competitive Bid Note.

         2.04 Payment  of  Interest.(a)The Borrower shall  pay  interest  to the
Administrative  Agent at the Principal  Office for the account of each Lender on
the  outstanding  and unpaid  principal  amount of each Loan made by such Lender
for the  period  commencing  on the date of such Loan  until  such Loan shall be
due (i) in the case of each  Revolving  Credit  Loan,  at the LIBOR  Rate or the
Base  Rate,  as  elected  or  deemed   elected  by  the  Borrower  or  otherwise
applicable  to such  Loan as  herein  provided,  (ii) in the case of each  Swing
Line Loan,  at the Swing Line Rate;  and (iii)in  the case of each  Competitive
Bid  Loan,  at the  applicable  Absolute  Rate or  Index  Rate,  as  applicable;
provided,  however,  that if any amount shall not be paid when due (at maturity,
by  acceleration  or otherwise),  all amounts  outstanding  hereunder shall bear
interest  thereafter,  payable on demand,  (A) in the case of a LIBOR Loan, at a
rate of interest  per annum which shall be two percent  (2%) plus the LIBOR Rate
for such LIBOR  Loan  until the end of the  Interest  Period  during  which such
payment was due, and  thereafter  at a rate of interest per annum which shall be
two  percent  (2%)  plus the Base  Rate,  (B) in the case of a Base Rate Loan or
Swing Line Loan,  at a rate of  interest  per annum  which  shall be two percent
(2%) plus the Base Rate,  and (C) in the case of a  Competitive  Bid Loan,  at a
rate of interest  per annum which  shall be two percent  (2%) plus the  Absolute
Rate or Index Rate, as applicable,  for such  Competitive Bid Loan until the end
of the Interest  Period  during which such payment was due, and  thereafter at a
rate of interest  per annum which shall be two percent  (2%) plus the Base Rate,
or (in each case) the maximum rate  permitted by  applicable  law,  whichever is
lower,  from the date  such  amount  was due and  payable  until  the date  such
amount is paid in full.

         (b)      Interest  on the  outstanding  principal  balance of each Loan
shall be  computed  on the  basis of a year of 360 days  with  respect  to LIBOR
Loans and all  Competitive  Bid Loans and 365 days with  respect  to Swing  Line
Loans  and  Base  Rate  Loans  and  calculated  for the  actual  number  of days
elapsed.  Interest  on each Loan shall be paid  (i)quarterly  in arrears on the
last Business Day of each  September,  December,  March or June  commencing June
1997,  on each Base Rate  Loan,  Absolute  Rate  Competitive  Bid Loan and Swing
Line  Loan,  (ii)on  the last day of the  applicable  Interest  Period for each
LIBOR Loan and  Competitive  Bid Loan and, for any LIBOR Loan or Competitive Bid
Loan having any  Interest  Period  extending  beyond  three (3) months or ninety
(90) days, as applicable,  also on the date occurring  every three (3) months or
ninety  (90) days after the  commencement  of such  Interest  Period,  and (iii)
upon payment in full of the principal amount of such Loan.

         2.05 Payment of Principal.The principal amount of all Revolving  Credit
Outstandings  and all Swing Line  Outstandings  shall be due and  payable to the
Administrative  Agent for the  benefit of each  Lender in full on the  Revolving
Credit  Termination  Date,  or  earlier  as  herein  expressly   provided.   The
principal  amount of each  Competitive  Bid Loan shall be due and payable to the
Lender  making  such  Competitive  Bid  Loan  in  full  on the  last  day of the
Interest  Period  therefor,  or  earlier  as  herein  expressly  provided.   The
principal  amount of Base Rate  Loans and Swing  Line  Loans may be  prepaid  in
whole  or in  part  at any  time.  The  principal  amount  of  LIBOR  Loans  and
Competitive  Bid  Loans  may  only  be  prepaid  at the  end  of the  applicable
Interest Period,  unless the Borrower shall pay to the Administrative  Agent for
the account of the  Lenders the amount,  if any,  required  under  Section  4.04
hereof.  In the event that at any time  Outstandings  exceed the Total Revolving
Credit  Commitment,  a principal  amount of the  Revolving  Credit  Outstandings
equal to or  greater  than such  excess  shall be due and  payable  immediately.
All  prepayments  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 such other
amount as  necessary  to  comply  with this  Section 2.05  or with  Section 2.09
hereof.

     2.06 Non-Conforming Payments. (a) Each  payment  of  principal  (including
any  prepayment)  and  payment of interest  shall be made to the  Administrative
Agent at the  Principal  Office,  for the  account of each  Lender's  applicable
Lending Office,  in Dollars and in immediately  available funds before 2:00 P.M.
Charlotte,   North   Carolina  time  on  the  date  such  payment  is  due.  The
Administrative  Agent may,  but shall not be  obligated  to, debit the amount of
any  such  payment  which  is not  made by such  time  to any  ordinary  deposit
account,  if any, of the Borrower with the  Administrative  Agent.  The Borrower
shall give the  Administrative  Agent prior telephonic  notice of any payment of
principal,  such  notice to be given by not later  than  11:00  a.m.  Charlotte,
North Carolina time, on the date of such payment.

         (b)      The  Administrative  Agent  shall  deem any  payment  by or on
behalf of the  Borrower  hereunder  that is not made both (i)in  Dollars and in
immediately  available  funds  and  (ii)prior  to 2:00  P.M.  Charlotte,  North
Carolina  time  on the  date  payment  is due  to be a  non-conforming  payment,
absent  manifest  error.  Any such payment shall not be deemed to be received by
the  Administrative  Agent  until the time such funds  become  available  funds.
Any  non-conforming  payment  may  constitute  or become a  Default  or Event of
Default.  The  Administrative  Agent shall give prompt  notice to an  Authorized
Representative  and each of the  Lenders  (confirmed  in writing) if any payment
is  non-conforming.  Interest  shall  continue to accrue on any  principal as to
which a  non-conforming  payment is made until such funds become available funds
(but in no event  less  than the  period  from the date of such  payment  to the
next  succeeding  Business  Day) at the  respective  rates of interest per annum
specified  in Section  2.04(a)  hereof in respect of late  payments of interest,
from the date such  amount  was due and  payable  until the date such  amount is
paid in full.

         (c)      In the event  that any  payment  hereunder  or under the Notes
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  clause (i)(B)  under  the  definition  of  "Interest  Period;"
provided  that interest  shall  continue to accrue during the period of any such
extension.

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

         (c)      Swing Line Loans made by  NationsBank  shall be evidenced  by,
and be repayable  with interest in accordance  with the terms of, the Swing Line
Note dated the Closing Date and duly executed and delivered by the Borrower.

         (d)      Competitive  Bid Loans made by any Lender  shall be  evidenced
by,  and be  repayable  with  interest  in  accordance  with the terms  of,  the
Competitive  Bid Note  payable to the order of such  Lender and duly  completed,
executed and delivered by the Borrower.

    2.08 Pro Rata Payments.  Except  as  otherwise  provided  herein,  (a)each
payment and  prepayment of principal and interest on the Revolving  Credit Loans
and  the  fees   described   in  Section  2.12  hereof  shall  be  made  to  the
Administrative  Agent for the  account of the  Lenders in the  aggregate  amount
payable  to  the  Lenders  pro  rata  based  on  their   Applicable   Commitment
Percentages,  (b) each  payment of  principal  of and interest on the Swing Line
Loans   shall  be  made  to  the   Administrative   Agent  for  the  account  of
NationsBank,  (c) each payment of principal and interest on the  Competitive Bid
Loans  shall  be  made  to the  Administrative  Agent  for  the  account  of the
respective  Lender  making such  Competitive  Bid Loan.  All payments to be made
by the Borrower  hereunder,  shall be made without set-off or counterclaim.  The
Administrative  Agent will promptly  distribute  such  payments  received to the
Lenders as provided for herein.

     2.09 Reductions; Cancellation.  The  Borrower  shall  have the  right  from
time to time (but not more  frequently  than once  during each  calendar  month)
upon not less than ten (10)  Business  Days  written  notice from an  Authorized
Representative  to the  Administrative  Agent  to  reduce  the  Total  Revolving
Credit  Commitment.  The  Administrative  Agent shall give each  Lender,  within
one  (1)  Business  Day,  telephonic  notice  (confirmed  in  writing)  of  such
reduction.  Each such  reduction  shall be in the amount of  $10,000,000 or such
greater  amount  which is in an  integral  multiple  of  $1,000,000,  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 LIBOR 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  4.04  hereof.  Each  reduction  of the
Total  Revolving  Credit  Commitment  shall be  accompanied  by  payment  of the
principal  amount of the Revolving  Credit  Outstandings  to the extent that the
Outstandings  exceed the Total Revolving  Credit  Commitment after giving effect
to such  reduction,  together  with  accrued and unpaid  interest 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  NationsBank  and the  Lenders  with  respect to the  Letters of
Credit  and  Participations  and  Competitive  Bid  Loans)  shall  be  deemed  a
cancellation and termination of this Agreement.

         2.10  Increase  and  Decrease in  Amounts. The amount of the Total
Revolving Credit Commitment which shall be available to the Borrower shall be
reduced by the aggregate amount of all Outstandings.

         2.11  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 below and in Sections
4.01(b),  4.02 and 4.03 hereof, the Borrower may:

         (a)      on two (2) Business Days' notice to the  Administrative  Agent
on or before  10:30 A.M.  Charlotte,  North  Carolina  time on any  Business Day
convert  all or a part of LIBOR  Loans to Base Rate Loans on the last day of the
Interest Period for such LIBOR Loans; and

         (b)      on   three   (3)   LIBOR   Business   Days'   notice   to  the
Administrative Agent on or before 10:30 A.M. Charlotte, North Carolina time:

                  (i)      elect  a  subsequent  Interest  Period  for  all or a
         portion  of  LIBOR  Loans  to  begin  on the  last  day of the  current
         Interest Period for such LIBOR Loans; or

                  (ii)     convert  Base Rate Loans to LIBOR  Loans on any LIBOR
         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.

         Notice  of  any  such  elections  or  conversions   shall  specify  the
effective  date of such  election  or  conversion  and,  with  respect  to LIBOR
Loans,  the  Interest  Period  to be  applicable  to the  Loan as  continued  or
converted.  Each  election  and  conversion  pursuant to this Section 2.11 shall
be subject to the  limitations  on LIBOR  Loans set forth in the  definition  of
"Interest  Period"  herein and in Sections  2.01(a),  (b) and (c) and Article IV
hereof.  All such  continuations  or  conversions of Loans shall be effected pro
rata based on the Applicable Commitment Percentages of the Lenders.

        2.12  Facility Fee

                  (b)      For the  period  beginning  on the  Closing  Date and
         ending on the Revolving  Credit  Termination  Date, the Borrower agrees
         to pay to the  Administrative  Agent,  for the pro rata  benefit of the
         Lenders  based  on  their  Applicable  Commitment  Percentages  of  the
         Revolving  Credit  Facility,  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.

                  (c)      Such  payments of Facility  Fees provided for in this
         Section  2.12 shall be due in arrears on the last  Business Day of each
         September,  December,  March and June beginning June 1997 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  during the period
         of its  failure.  Each fee shall be  calculated  on the basis of a year
         of 360 days for the actual number of days elapsed.

        2.13 Deficiency  Advances.
                No Lender shall be  responsible  for any default
of any other  Lender in respect of such other  Lender's  obligation  to make any
Loan  hereunder  nor  shall  the  Revolving  Credit  Commitment  of  any  Lender
hereunder  be  increased  as a  result  of such  default  of any  other  Lender.
Without  limiting  the  generality  of the  foregoing,  in the event any  Lender
shall fail to advance  funds to the  Borrower  as herein  provided,  NationsBank
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  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,  upon  payment  to  NationsBank  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  NationsBank  by the Borrower on each Loan  comprising  the
deficiency  advance at the interest  rate per annum for  overnight  borrowing by
NationsBank  from a Federal  Reserve  Bank,  then such payment shall be credited
against the applicable  Note of  NationsBank 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 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 2.09 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.

       2.14  Use of Proceeds.
         The  proceeds  of the  Loans  made  pursuant  to the
Revolving  Credit  Facility,  the  Competitive  Bid  Facility and the Swing Line
hereunder  shall  be  used by the  Borrower  for  working  capital  and  general
corporate needs of the Borrower and its  Subsidiaries,  including  prepaying the
Existing Credit Facility.

         2.15 Additional  Fees.
                  In  addition  to  any  fees  described  above,  the
Borrower agrees to pay to the  Administrative  Agent and NationsBank  such other
fees as may be agreed to in a separate writing or writings.

                                    ARTICLE III

                                Letters of Credit

   3.01 Letters  of  Credit.  NationsBank  agrees,  subject  to the  terms  and
conditions  of this  Agreement,  upon request and for the account of Borrower or
any  Subsidiary,  to issue from time to time Letters of Credit upon  delivery to
NationsBank  of an  Application  and  Agreement for Letter of Credit in form and
content  reasonably  acceptable  to  NationsBank;  provided,  that the Letter of
Credit  Outstandings  shall not  exceed the Total  Letter of Credit  Commitment.
No Letter  of Credit  shall be  issued  by  NationsBank  with an expiry  date or
payment  date  occurring  subsequent  to the fifth  Business Day  preceding  the
Revolving Credit  Termination  Date.  NationsBank  shall not issue any Letter of
Credit if  immediately  after giving  effect  thereto,  the  Outstandings  would
exceed the Total Revolving  Credit  Commitment.  Any request for the issuance of
a  Letter  of  Credit  shall be  deemed a  representation  and  warranty  by the
Borrower  to  NationsBank  and the  Lenders  that  all the  representations  and
warranties  set forth in  Article  VI 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  6.01(d)  and (e) hereof  shall be deemed to include  and
take into  account any merger or  consolidation  permitted  under  Section  8.09
hereof and the  reference  to the  financial  statement  in  Section  6.01(f)(i)
hereof are to those  financial  statements most recently  delivered  pursuant to
Section 7.01.

         3.02  Reimbursement.

                  (a)      The   Borrower    hereby    unconditionally    agrees
immediately  to  pay to  NationsBank  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  NationsBank  in
connection  with the  Letters of Credit and in any event and  without  demand to
place in  possession of  NationsBank  (which shall  include  Advances  under the
Revolving  Credit  Facility)  sufficient  funds to pay all debts and liabilities
arising  under any Letter of Credit;  provided  that to the extent  permitted by
Section  2.01(c)(iv)  hereof,  such amounts  shall be paid  pursuant to Advances
under  the  Revolving  Credit  Facility.   The  Borrower's  obligations  to  pay
NationsBank  under this Section  3.02,  and  NationsBank'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.  NationsBank  agrees to give
the Borrower  prompt  written notice of any request for a draw under a Letter of
Credit.  In the event an Advance is not  available  under the  Revolving  Credit
Facility,  NationsBank  may charge any account the Borrower may have with it for
any and all  amounts  NationsBank  pays under a Letter of Credit,  plus  charges
and reasonable  expenses as from time to time agreed to by  NationsBank  and the
Borrower.  The Borrower  agrees to pay  NationsBank  interest on any amounts not
paid when due  hereunder  on demand at the Base Rate plus two percent  (2%),  or
the maximum  rate  permitted by  applicable  law,  whichever is lower,  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
2.01(c) hereof,  NationsBank  shall notify the  Administrative  Agent (and shall
also  notify  the  Borrower)  of any  drawing  under  any  Letter  of  Credit as
promptly as practicable following the receipt by NationsBank of such drawing.

                  (c)      Each   Lender   (other   than   NationsBank)    shall
automatically  acquire on the date of issuance  thereof,  a Participation in the
liability  of  NationsBank  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  NationsBank  under Section
3.02(a)  hereof,  each  Lender  (other  than  NationsBank)   thereby  shall,  as
hereinafter described,  absolutely,  unconditionally and irrevocably assume, and
shall  be  unconditionally  obligated  to pay  to  NationsBank,  its  Applicable
Commitment  Percentage  of the  liability  of  NationsBank  under such Letter of
Credit.

                           (i)      Prior to the  Revolving  Credit  Termination
                  Date, each Lender (other than NationsBank)  shall,  subject to
                  the terms and  conditions  of Article II  hereof,  make a Base
                  Rate Loan to the  Borrower  by  paying  to the  Administrative
                  Agent for the account of NationsBank  at the Principal  Office
                  in  Dollars  and in  immediately  available  funds,  an amount
                  equal  to  its   Applicable   Commitment   Percentage  of  any
                  Reimbursement  Obligation,  all as  described  in and pursuant
                  to Section 2.01(c) hereof.

                           (ii)     With  respect to  drawings  under any of the
                  Letters of Credit  for which a  Revolving  Credit  Loan is not
                  made as set forth in clause  (i)  above,  each  Lender  (other
                  than  NationsBank),   upon  receipt  from  the  Administrative
                  Agent of  notice  of a  drawing  in the  manner  described  in
                  Section 2.01(c)    hereof,   shall   promptly   pay   to   the
                  Administrative  Agent for the  account of  NationsBank,  prior
                  to the applicable  time set forth in  Section 2.01(c)  hereof,
                  its   Applicable   Commitment   Percentage  of  such  drawing.
                  Simultaneously  with the  making  of each  such  payment  by a
                  Lender  to  the  Administrative   Agent  for  the  account  of
                  NationsBank,  such  Lender  shall,  automatically  and without
                  any  further  action  on  the  part  of  NationsBank  or  such
                  Lender,  acquire a  Participation  in an amount  equal to such
                  payment   (excluding   the   portion   thereof    constituting
                  interest)  in  the  related  Reimbursement  Obligation  of the
                  Borrower.  The  Reimbursement   Obligations  of  the  Borrower
                  shall be  immediately  due and  payable  by  Revolving  Credit
                  Loans  made  in  accordance  with  Section 2.01(c)  hereof  or
                  otherwise.

                           (iii)    Each  Lender's  obligation  to make  payment
                  to the  Administrative  Agent for the  account of  NationsBank
                  pursuant   to  this   Section   3.02(c),   and  the  right  of
                  NationsBank  to receive  the same,  shall be made  without any
                  offset,  abatement,  withholding or reduction  whatsoever.  If
                  any  Lender is  obligated  to pay but does not pay  amounts to
                  the  Administrative  Agent for the account of  NationsBank  in
                  full upon such  request as required  by this  Section 3.02(c),
                  such  Lender  shall,  on  demand,  pay to  the  Administrative
                  Agent for the  account of  NationsBank  interest on the unpaid
                  amount for each day during the period  commencing  on the date
                  of notice  given to such Lender  pursuant  to  Section 2.01(c)
                  hereof   until   such   Lender   pays   such   amount  to  the
                  Administrative  Agent for the account of  NationsBank  in full
                  at the  interest  rate per annum for  overnight  borrowing  by
                  NationsBank from a Federal Reserve Bank.

                           (iv)     In the  event  the  Lenders  have  purchased
                  Participations  in any  Reimbursement  Obligation as set forth
                  in clause  (ii)  above,  then at any time  payment is received
                  by NationsBank  as issuer of the  applicable  Letter of Credit
                  from the Borrower of such Reimbursement  Obligation,  in whole
                  or in part,  NationsBank  shall  pay to each  Lender an amount
                  equal  to  its  Applicable   Commitment   Percentage  of  such
                  payment from the Borrower.

                  (d)      Promptly   following   the  end  of   each   calendar
quarter,  NationsBank  shall  deliver  to  the  Administrative  Agent,  and  the
Administrative  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,  NationsBank  shall deliver to
the  Administrative  Agent, and the  Administrative  Agent shall deliver to such
Lender at such Lender's expense,  any other information  reasonably requested by
such Lender with respect to Letter of Credit Outstandings.

                  (e)      The  issuance  by   NationsBank  of  each  Letter  of
Credit  shall,  in addition to the  conditions  precedent set forth in Sections
5.01 and 5.02 hereof,  be subject to the  conditions  that such Letter of Credit
be in such form and contain such terms as shall be  reasonably  satisfactory  to
NationsBank  consistent  with the  then  current  practices  and  procedures  of
NationsBank  with respect to similar  letters of credit,  and the Borrower shall
have executed and delivered such other  instruments  and agreements  relating to
such  Letter  of  Credit  as  NationsBank   shall  have   reasonably   requested
consistent  with such practices and  procedures.  All Letters of Credit shall be
issued  pursuant  to and  subject  to  the  Uniform  Customs  and  Practice  for
Documentary   Credits,   1993  revision,   International   Chamber  of  Commerce
Publication No.500 and all subsequent amendments and revisions thereto.

                  (f)      The  Borrower  agrees  that  NationsBank  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.
NationsBank  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.

                  (g)      Without  duplication  of Section  10.07  hereof,  the
Borrower  hereby  agrees to defend,  indemnify  and hold  harmless  NationsBank,
each other  Lender and the  Administrative  Agent from and  against  any and all
claims and damages,  losses,  liabilities,  reasonable  costs and expenses which
NationsBank,  such other Lender or the Administrative  Agent may incur (or which
may be claimed  against  NationsBank,  such other  Lender or the  Administrative
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  NationsBank,  any other
Lender  or  the   Administrative   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  provisions  of  this  Section  3.02(g)  shall  survive   repayment  of  the
Obligations,  the  occurrence  of the Revolving  Credit  Termination  Date,  and
expiration or termination of this Agreement.

                  (h)      Without  limiting  Borrower's  rights as set forth in
Section 3.02(g) above,  the obligation of the Borrower to immediately  reimburse
NationsBank  for  drawings  made  under  Letters  of Credit  shall be  absolute,
unconditional  and  irrevocable,  and shall be performed  strictly in accordance
with the terms of this  Agreement  and such  Letters of Credit  and the  related
Applications  and  Agreements  for  Letters  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 Documents");

                           (ii)     any  amendment  or waiver of or any  consent
                  to or departure from all or any of the Related 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  for whom any such  beneficiary  or
                  any such  transferee  may be  acting),  Administrative  Agent,
                  Lenders or any other Person,  whether in  connection  with the
                  Loan  Documents,   the  Related  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),
                  Administrative Agent, Lenders or any other Person;

                           (v)      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;

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

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

         3.03 Letter  of  Credit  Fee.
                 The   Borrower   agrees  to  pay  to  the
Administrative  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  June 1997, a fee
per annum  equal to (i) for each  Standby  Letter of Credit,  the product of the
average  daily amount  available  to be drawn on such  Standby  Letter of Credit
during such Fiscal  Quarter  multiplied  by the  Applicable  Margin with respect
thereto  and (ii) for each  Commercial  Letter of  Credit,  the  greater  of (A)
$75.00 and (B) the  product of the stated  amount of such  Commercial  Letter of
Credit  Outstanding  during any portion of such  Fiscal  Quarter  multiplied  by
one-tenth of one percent  (1/10%).  Such fees 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.

        3.04 Other   Fees.
   The   Borrower   shall   pay   to   NationsBank    such
administrative  fees and other fees, if any, in  connection  with the Letters of
Credit in such amounts and at such times as  NationsBank  and the Borrower shall
agree from time to time.

                                                     ARTICLE IV

                                           Yield Protection and Illegality

   4.01  Additional   Costs.   (a)  The  Borrower  shall  promptly  pay  to  the
Administrative  Agent for the  account  of a Lender  from time to time,  without
duplication,  such  amounts as such  Lender may  determine  to be  necessary  to
compensate  it for any costs  incurred by such Lender  which it  determines  are
attributable  to its making or  maintaining  any Loan or its  obligation to make
any  Loans,  or the  issuance  or  maintenance  by  NationsBank  of or any other
Lender's  Participation  in  any  Letter  of  Credit  issued  hereunder,  or any
reduction  in any amount  receivable  by such Lender under or in respect of this
Agreement,  the Notes or the  Letters  of Credit in respect of any of such Loans
or such  obligation or the Letters of Credit,  including  reductions in the rate
of return on a Lender's  capital  (such  increases  in costs and  reductions  in
amounts receivable and returns being herein called "Additional  Costs"),  in all
cases resulting solely from any Regulatory  Change which:  (i)changes the basis
of taxation of any amounts  payable to such Lender  under this  Agreement or the
Notes in respect of any of such  Loans or  Letters of Credit  (other  than taxes
imposed on or measured by the  income,  revenues or assets of any Lender  unless
such taxes arise  solely by virtue of the  activities  of the Lending  Office of
such  Lender  pursuant  to or in respect of this  Agreement  or any of the other
Loan Documents);  or (ii)imposes or modifies any reserve,  special deposit,  or
similar  requirements  relating to any  extensions of credit or other assets of,
or any deposits with or other  liabilities  of, such Lender (other than any such
reserve,  deposit  or  requirement  reflected  in the  LIBOR  Rate  computed  in
accordance  with the  definition of such term set forth in Section 1.01 hereof);
or  (iii) has  or would  have the  effect  of  reducing  the rate of  return  on
capital  of such  Lender to a level  below that  which  such  Lender  could have
achieved  but  for  such  Regulatory  Change  (taking  into  consideration  such
Lender's policies,  or policies of the parent  corporation of such Lender,  with
respect to capital  adequacy);  or  (iv)imposes  any other  condition  having a
financially  adverse  effect on the  Administrative  Agent or such Lender  under
this  Agreement or adversely  affecting the Notes or the issuance or maintenance
of, or any  Lender's  Participation  in,  the  Letters of Credit (or any of such
extensions  of credit or  liabilities).  Each Lender  will notify an  Authorized
Representative  and the  Administrative  Agent of any event  occurring after the
Closing Date which would  entitle it to  compensation  pursuant to this Section
4.01(a) as  promptly  as  practicable  after it obtains  knowledge  thereof  and
determines to request such compensation.

         (b)      Without  limiting the effect of the  foregoing  provisions  of
this Section 4.01, in the event that, by reason of any  Regulatory  Change,  any
Lender  either  (i)incurs  Additional  Costs based on or measured by the excess
above a  specified  level of the  amount  of a  category  of  deposits  or other
liabilities  of such Lender  which  includes  deposits by reference to which the
interest  rate  on  LIBOR  Loans  and  Index  Rate   Competitive  Bid  Loans  is
determined  as provided in this  Agreement or a category of extensions of credit
or other  assets of any  Lender  which  includes  LIBOR  Loans  and  Index  Rate
Competitive Bid Loans or  (ii) becomes  subject to restrictions on the amount of
such a  category  of  liabilities  or assets  which it may hold,  then,  if such
Lender so elects by notice to the  Administrative  Agent (which  shall  promptly
deliver such notice to the  Lenders),  the  obligation  hereunder of such Lender
to make Index Rate  Competitive  Bid Loans or make and continue,  and to convert
Base Rate Loans  into,  LIBOR  Loans that are the  subject of such  restrictions
shall be  suspended  until  the date  such  Regulatory  Change  ceases  to be in
effect and the Borrower shall,  on the last day(s) of the then current  Interest
Period(s) for  outstanding  LIBOR Loans convert such Loans into Base Rate Loans;
provided,  however,  that the  suspension of such  obligation and the conversion
of any LIBOR  Loans into Base Rate Loans  shall  apply only to any Lender who is
affected  by such  restrictions  and who has  provided  such notice to the other
Lenders,   and  any   obligation  of  the  other  Lenders  to  make  Index  Rate
Competitive  Bid Loans or make and  continue,  and to  convert  Base Rate  Loans
into,  LIBOR  Loans shall not be  affected  by such  restrictions.  In the event
that the  obligation of some,  but not all, of the Lenders to make and continue,
or to convert Base Rate Loans into,  LIBOR Loans is suspended,  then any request
by the Borrower  during the pendency of such  suspension  for a LIBOR Loan shall
be deemed a request for such LIBOR Loan from the  Lender(s)  not subject to such
suspension  and for a Base Rate Loan from the  Lender(s) who are subject to such
suspension,  in each  case  in the  respective  amounts  based  on the  Lenders'
respective Applicable Commitment Percentages.

       (c)      Determinations  by any Lender for  purposes  of this  Section
4.01  of  the  effect  of any  Regulatory  Change  on its  costs  of  making  or
maintaining,  or being  committed  to make,  Loans or on its  Participations  in
Letters  of Credit or by  NationsBank  as issuer of any  Letter of Credit of the
effect of any  Regulatory  Change on its costs in  connection  with the issuance
or  maintenance  of  any  Letter  of  Credit  issued  hereunder,  or on  amounts
receivable  by any Lender in  respect of Loans or Letters of Credit,  and of the
additional  amounts  required  to  compensate  such  Lender  in  respect  of any
Additional Costs, shall be made taking into account such Lender's  policies,  or
the policies of the parent  corporation of such Lender,  as to the allocation of
capital,  costs and other items and shall be conclusive  absent  manifest error.
The  Lender  requesting  such  compensation   shall  furnish  to  an  Authorized
Representative  and  the  Administrative  Agent  a  written  explanation  of the
Regulatory Change and  calculations,  in reasonable  detail,  setting forth such
Lender's determination of any such Additional Costs.

         (d)      The   provisions  of  this  Section  4.01  shall  survive  the
payment in full of the Obligations and the termination of this Agreement.

    4.02 Suspension  of   Loans.  Anything   herein   to   the    contrary
notwithstanding,  if, on or prior to the  determination of any interest rate for
any LIBOR Loan or Index Rate Competitive Bid Loan for any Interest  Period,  the
Administrative  Agent or Required Lenders determine (which  determination  shall
be conclusive absent manifest error) that:

                  (a)      quotations   of  interest   rates  for  the  relevant
         deposits  referred to in the  definition of LIBOR Base Rate in Section
         1.01 hereof are not being  provided in the relevant  amounts or for the
         relevant  maturities for purposes of  determining  the rate of interest
         for such LIBOR Loan or Index Rate  Competitive  Bid Loan as provided in
         this Agreement; or

                  (b)      the  relevant  rates of  interest  referred to in the
         definition  of "LIBOR Base Rate" in Section  1.01 hereof upon the basis
         of which the LIBOR Rate or the Index Rate for such  Interest  Period is
         to be determined do not  adequately  reflect the cost to the Lenders of
         making or  maintaining  such LIBOR Loan or Index Rate  Competitive  Bid
         Loan for such Interest Period;

then  the  Administrative  Agent  shall  give  the  Lenders  and  an  Authorized
Representative  prompt notice thereof,  and so long as such condition remains in
effect,  the  Lenders  shall be under no  obligation  to make  such  Index  Rate
Competitive  Bid Loans or make or continue  such LIBOR Loans that are subject to
such  condition,  or to convert Loans into LIBOR Loans,  and the Borrower  shall
on the last  day(s)  of the then  current  Interest  Period(s)  for  outstanding
LIBOR Loans  convert such LIBOR Loans into Base Rate Loans.  The  Administrative
Agent  shall  give  the  Lenders  and  an   Authorized   Representative   notice
describing  any event or  condition  described  in this  Section  4.02  promptly
following the  determination by the  Administrative  Agent that the availability
of LIBOR Loans or Index Rate  Competitive  Bid Loans is, or is to be,  suspended
as a result thereof.

  4.03 Illegality.  Notwithstanding  any other  provision  of this  Agreement,
in the event that it  becomes  unlawful  for any Lender to honor its  obligation
to make or maintain LIBOR Loans or Index Rate  Competitive Bid Loans  hereunder,
then such Lender  shall  promptly  notify the Borrower  thereof  (with a copy to
the  Administrative  Agent)  and such  Lender's  obligation  to make  Index Rate
Competitive  Bid Loans or make or continue  LIBOR  Loans,  or convert  Base Rate
Loans into LIBOR Loans,  shall be  suspended  until such time as such Lender may
again make and maintain  LIBOR Loans or Index Rate  Competitive  Bid Loans,  and
such  Lender's  outstanding  LIBOR  Loans and Index Rate  Competitive  Bid Loans
shall be converted into Base Rate Loans in accordance with  Section 2.11  hereof
on the respective  last days of the then current  Interest  Periods with respect
to such Loans or within  such  earlier  period as  required  by law. If any such
conversion  of a LIBOR Loan or an Index Rate  Competitive  Bid Loan  occurs on a
day which is not the last day of the then current  Interest  Period with respect
thereto,  the  Borrower  shall  pay such  amounts,  if any,  as may be  required
pursuant  to Section  4.04  hereof.  In the event that the  obligation  of some,
but not all, of the Lenders to make or  continue,  or to convert Base Rate Loans
into,  LIBOR Loans is  suspended,  then any request by the  Borrower  during the
pendency  of such  suspension  for a LIBOR  Loan  shall be deemed a request  for
such LIBOR Loan from the  Lender(s)  not  subject to such  suspension  and for a
Base Rate Loan from the  Lender(s) who are subject to such  suspension,  in each
case in the  respective  amounts  based on the  Lenders'  respective  Applicable
Commitment Percentages.

    4.04 Compensation. The Borrower  shall  promptly  pay to each Lender,  upon
the request of such Lender,  such amount or amounts as shall be  sufficient  (in
the  determination  of Lender) to  compensate  it for any actual  loss,  cost or
expense incurred by it as a result of:

                  (a)      any   payment,    prepayment   or   conversion,    as
         applicable,  of a LIBOR  Loan or Index Rate  Competitive  Bid Loan on a
         date  other  than the last day of the  Interest  Period  for such LIBOR
         Loan or Index Rate Competitive Bid Loan,  including without  limitation
         any conversion required pursuant to this Article IV; or

                  (b)      any  failure by the  Borrower  to borrow a LIBOR Loan
         or Index  Rate  Competitive  Bid Loan or to  convert  a Base  Rate Loan
         into a  LIBOR  Loan  on the  date  for  such  borrowing  or  conversion
         specified in the relevant  Borrowing  Notice or Interest Rate Selection
         Notice under Article II hereof;

A determination  of a Lender as to the amounts payable pursuant to this Section
4.04  shall  be  conclusive   absent  manifest  error.  The  Lender   requesting
compensation   under  this   Section  4.04  shall   furnish  to  an   Authorized
Representative  and the  Administrative  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.

         4.05  Alternate  Interest  Rate.  In the event any Lender  suspends the
making of any LIBOR  Loan  pursuant  to this  Article IV  (herein a  "Restricted
Lender"),  the  Restricted  Lender's  Applicable  Commitment  Percentage  of any
LIBOR Loan  shall bear  interest  at the Base Rate until the  Restricted  Lender
once again  makes  available  the  applicable  LIBOR Loan.  Notwithstanding  the
provisions  of  Section 2.04(b)   hereof,  interest  shall  be  payable  to  the
Restricted  Lender  at the  time and  manner  as paid to  those  Lenders  making
available LIBOR Loans.

       4.06 Taxes. (a) All payments by the Borrower  of  principal  of,  and
interest on, the Loans and all other  amounts  payable  hereunder  shall be made
free and clear of and without  deduction for any future  excise,  stamp or other
taxes, fees,  duties,  levies,  imposts,  charges,  deductions,  withholdings or
other  charges of any nature  whatsoever  imposed by any taxing  authority,  but
excluding (i) franchise taxes,  (ii) any taxes other than withholding  taxes and
taxes  that would be  imposed  as a result of a  connection  between a Lender or
the  Administrative  Agent and the jurisdiction  imposing such taxes (other than
a connection  arising  solely by virtue of the  activities of the Lending Office
of such  Lender or the  Administrative  Agent  pursuant to or in respect of this
Agreement  or any  other  Loan  Document)  and (iii)  any  taxes  imposed  on or
measured by any Lender's  assets,  net income,  receipts or branch profits (such
non-excluded  items being  collectively  called "Taxes").  In the event that any
withholding or deduction  from any payment to be made by the Borrower  hereunder
is required  in respect of any Taxes  pursuant to any  applicable  law,  rule or
regulation,  then the Borrower shall (upon thirty (30) days' prior notice,  such
notice to include reasonable documentation of any amounts due):

                  (A)      pay  directly  to the  relevant  authority  the  full
         amount required to be so withheld or deducted;

                  (B)      promptly  forward  to  the  Administrative  Agent  an
         official   receipt   or  other   documentation   satisfactory   to  the
         Administrative Agent evidencing such payment to such authority; and

                  (C)      pay to the  Administrative  Agent for the  account of
         the  Lenders  such  additional  amount or  amounts as is  necessary  to
         ensure  that the net  amount  actually  received  by each  Lender  will
         equal the full  amount  such  Lender  would have  received  had no such
         withholding or deduction been required.

         (b)      Prior to the date  that any  Lender or  participant  organized
under the laws of a  jurisdiction  outside  the  United  States  becomes a party
hereto,  such Person shall deliver to the Borrower and the Administrative  Agent
such  certificates,  documents  or other  evidence,  as  required  by the  Code,
properly  completed,  currently  effective  and duly  executed by such Lender or
participant  establishing  that such payment is (i) not subject to United States
Federal  backup  withholding  tax and (ii) not  subject to United States Federal
withholding  tax under  the Code  because  such  payment  is either  effectively
connected  with  the  conduct  by such  Lender  or  participant  of a  trade  or
business  in the United  States or totally  exempt from  United  States  Federal
withholding  tax by reason of the  application  of the provisions of a treaty to
which the United States is a party or such Lender is otherwise exempt.

         (c)      If, after  receiving  reasonable  prior  notice,  the Borrower
fails to pay any Taxes when due to the  appropriate  taxing  authority  or fails
to  remit  to the  Administrative  Agent,  for  the  account  of the  respective
Lender,  the  required  receipts or other  required  documentary  evidence,  the
Borrower  shall  indemnify the Lenders for any  incremental  Taxes,  interest or
penalties  that  may  become  payable  by any  Lender  as a  result  of any such
failure.  For purposes of this Section  4.06,  a  distribution  hereunder by the
Administrative  Agent or any Lender to or for the  account  of any Lender  shall
be deemed a payment by the Borrower.

    4.07 Replacement  Banks.  In the event  that any  Lender  (a) shall have its
obligation  to make or  continue,  or convert  other  Loans  into,  LIBOR  Loans
suspended  pursuant  to this  Article IV  for a period in excess of thirty  (30)
days,  or (b) shall  request  compensation  for  Additional  Costs  pursuant  to
Section  4.01  hereof  then,  notwithstanding  the  provisions  of Section  2.09
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.

                                                      ARTICLE V

                                             Conditions of Effectiveness

  5.01 Conditions of  Effectiveness.  The  effectiveness  of this Agreement is
subject to the  conditions  precedent that the  Administrative  Agent shall have
received on the Closing Date, in form and substance  reasonably  satisfactory to
the Administrative Agent and Lenders, the following:

                  (a)      executed  originals  of each of this  Agreement,  the
         Parent  Guaranty  and  the  Notes,  together  with  all  schedules  and
         exhibits hereto and thereto;

                  (b)      executed  originals  of  a  Reaffirmation   Agreement
         from each existing Guarantor;

                  (c)      favorable   written   opinions   of  counsel  to  the
         Borrower and the  Guarantors  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 forms of Exhibits K-1 and K-2 attached  hereto and  incorporated
         herein by reference;

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

                  (e)      specimen  signatures  of  officers  of the  Borrower,
         the Parent and each other  Guarantor  executing  the Loan  Documents on
         behalf  of  such  Person,  certified  by  the  secretary  or  assistant
         secretary  or  other  appropriate  official  of the  Borrower  or  such
         Guarantor, as applicable;

                  (f)      the charter  documents  of the  Borrower,  the Parent
         and  each  other  Guarantor  certified  as  of a  recent  date  by  the
         Secretary of State or other appropriate  Governmental  Authority of its
         jurisdiction of incorporation;

                  (g)      the  by-laws  of the  Borrower,  the  Parent and each
         other  Guarantor  certified  as of the Closing Date as true and correct
         by the  secretary  or  assistant  secretary  of the Person to whom such
         by-laws relate;

                  (h)      certificates  issued  as  of a  recent  date  by  the
         Secretary of State or other appropriate  Governmental  Authority of its
         jurisdiction  of  incorporation  as  to  the  due  existence  and  good
         standing of the Borrower, the Parent and each other Guarantor therein;

                  (i)      all  applicable  fees  payable by the Borrower on the
         Closing Date;

                  (j)      with  respect  to the  Borrower  and each  Guarantor,
         appropriate   certificates  of  qualification  to  do  business,   good
         standing and, where  appropriate,  authority to conduct  business under
         assumed  name,  issued as of a recent date by the Secretary of State or
         other  appropriate  Governmental  Authority  of  each  jurisdiction  in
         which the failure to be  qualified to do business or  authorized  so to
         conduct business could result in a Material Adverse Effect;

                  (k)      a  certificate  of an  Authorized  Representative  of
         the  Borrower  certifying  as to the  continuing  effectiveness  of all
         policies of insurance required hereunder;

                  (l)      a  certificate  of  the  Assistant  Treasurer  of the
         Borrower  in the form of Exhibit L hereto  certifying  compliance  with
         certain financial covenants hereunder; and

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

   5.02 Conditions  of  Advances.  The  obligations  of the Lenders to make any
Advances or incur  Participations in Letters of Credit,  and NationsBank to make
Swing Line Loans and to issue Letters of Credit  hereunder,  on or subsequent to
the Closing Date are subject to the satisfaction of the following conditions:

                  (a)      the  Administrative   Agent  shall  have  received  a
         notice of such  borrowing  or request as  required by Article II hereof
         and the  Lenders  have  received  notice of receipt  of such  notice of
         borrowing or request pursuant to Section 2.01(c)(ii) hereof;

                  (b)      the  representations  and  warranties of the Borrower
         and each  Guarantor  set forth in  Article VI hereof and in each of the
         other Loan  Documents  shall be true and  correct on and as of the date
         of such  Advance or  issuance  of such  Letters of Credit,  as the case
         may be,  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  6.01(d)  and (e) hereof  shall be deemed to include
         and take into  account  any  merger or  consolidation  permitted  under
         Section 8.08 hereof, and (iii) that the financial  statements  referred
         to in  Section 6.01(e)(i)  hereof shall be deemed to be those financial
         statements  most  recently  delivered to the  Administrative  Agent and
         the Lenders pursuant to Section 7.01 hereof;

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

                  (d)      at the time of each  such  Advance,  Swing  Line Loan
         or issuance  of each  Letter of Credit,  as the case may be, no Default
         or Event of Default shall have occurred and be continuing;

                  (e)      immediately  after  giving  effect  to a  Swing  Line
         Loan,  the  aggregate   Swing  Line   Outstandings   shall  not  exceed
         $25,000,000;

                  (f)      immediately  after issuing any Letter of Credit,  the
         aggregate  Letter of Credit  Outstandings  shall not  exceed  the Total
         Letter of Credit Commitment; and

                  (g)      immediately  after  giving  effect  to  any  Loan  or
         Letter  of Credit  (i) the sum of the  Revolving  Credit  Outstandings,
         Swing   Line   Outstandings,   Letter   of  Credit   Outstandings   and
         Competitive  Bid  Outstandings  shall not  exceed  the Total  Revolving
         Credit  Commitment,   and  (ii)  each  Lender's  Applicable  Commitment
         Percentage  of  Revolving  Credit  Loans and  Participations  shall not
         exceed its Revolving Credit Commitment.

                                                     ARTICLE VI

                                           Representations and Warranties

         6.01  Representations   and   Warranties
                         The Borrower  represents and warrants
with  respect  to itself  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:

                  (a)      Organization and Authority.

                           (i)      the  Borrower,  the Parent and each Material
                  Subsidiary  is  a  corporation   duly  organized  and  validly
                  existing   under   the  laws  of  the   jurisdiction   of  its
                  incorporation or creation;

                           (ii)     the  Borrower,  the Parent and each Material
                  Subsidiary  (A) 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 (B) is  qualified  to do business  and in good
                  standing  in  every  jurisdiction  in which  failure  to be so
                  qualified  or  in  good  standing   could  not  reasonably  be
                  expected to have a Material Adverse Effect;

                           (iii)    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;

                           (iv)     each  Guarantor  has the power and authority
                  to execute,  deliver and  perform the  Guaranty  and the other
                  Loan Documents to which it is a party; and

                           (v)      when  executed  and  delivered,  each of the
                  Loan  Documents to which  Borrower or any Guarantor is a party
                  will  be  the  legal,   valid  and   binding   obligation   or
                  agreement,   as  the  case  may  be,  of   Borrower   or  such
                  Guarantor,  enforceable  against Borrower or such Guarantor 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 in a proceeding
                  at law or in equity);

                  (b)      Loan   Documents.   The   execution,   delivery   and
         performance  by the  Borrower  and each  Guarantor  of each of the Loan
         Documents to which the Borrower or a Guarantor is a party:

                           (i)      have been duly  authorized  by all requisite
                  corporate   action   (including   any   required   shareholder
                  approval) of the Borrower or the Guarantor  signatory  thereto
                  required for the lawful  execution,  delivery and  performance
                  thereof;

                           (ii)     do  not  violate  in  a  manner  that  would
                  reasonably  be likely to have a  Material  Adverse  Effect any
                  provisions  of (1)any  applicable  law,  rule or  regulation,
                  (2) any  order  of any  court or other  agency  of  government
                  binding  on  the   Borrower   or  any   Guarantor,   or  their
                  respective   properties,   or   (3) the   charter   documents,
                  documents  of   organization   or  governance  or  by-laws  of
                  Borrower or any Guarantor;

                           (iii)    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  indenture,  agreement or other  instrument to which
                  Borrower  or  any  Guarantor  is a  party,  or  by  which  the
                  properties  or assets of Borrower or any  Guarantor are bound;
                  and

                           (iv)     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
                  Borrower  or any  Guarantor  except  any Liens in favor of the
                  Administrative  Agent  and the  Lenders  created  by the  Loan
                  Documents;

                  (c)      Solvency.  Borrower  and each  Guarantor  are Solvent
         after  giving  effect  to  the   transactions   contemplated   by  this
         Agreement and the other Loan Documents;

                  (d)      Material  Subsidiaries  and  Stockholders.   Borrower
         has no  Material  Subsidiaries  other  than  those  Persons  listed  as
         Material  Subsidiaries  in Schedule  6.01(d) hereto which schedule sets
         forth  the  correct  name  and  jurisdiction  of  organization  of each
         Material  Subsidiary  and the  percentage  of shares  of each  class of
         capital stock or similar  equity  interest of each Material  Subsidiary
         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,
         free and clear of any Lien;

                  (e)      Financial Condition.

                           (i)      The  Borrower  has  heretofore  furnished to
                  each  Lender  audited   consolidated  balance  sheets  of  the
                  Parent,  the Borrower and its  Subsidiaries as at February 22,
                  1997  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 Generally  Accepted  Accounting  Principles  applied on a
                  Consistent Basis;

                           (ii)     Since  February  22,  1997,  there  have not
                  occurred any events having a Material  Adverse  Effect and the
                  businesses,  properties  and  operations  of the  Parent,  the
                  Borrower and its  Subsidiaries,  considered  as a whole,  have
                  not been  materially  adversely  affected  as a result  of any
                  fire,  explosion,   earthquake,   accident,  strike,  lockout,
                  combination of workers, flood, embargo or act of God;

                           (iii)    Set   forth  on   Schedule   6.01(e)   is  a
                  complete and correct list of all  outstanding  Indebtedness of
                  the Parent and the  Borrower  and its  Subsidiaries  as of the
                  Closing  Date.  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  $25,000,000  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;

                  (f)      Title to  Properties.  The  Borrower and its Material
         Subsidiaries  have title to all their  respective  material  owned real
         and personal properties,  subject to no transfer  restrictions or Liens
         of any  kind,  except  (i) for  the  transfer  restrictions  and  Liens
         described in Schedule  6.01(f)  hereto,  (ii) for Liens permitted under
         Section  8.05  hereof  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;

                  (g)      Taxes.  The  Borrower  and  its   Subsidiaries   have
         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 them and except for taxes and  assessments  being contested
         in good  faith by  appropriate  proceedings  diligently  conducted  and
         against  which  reserves  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 them,  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 24,
         1996;

                  (h)      Other  Agreements.   Neither  the  Borrower  nor  any
         Material Subsidiary is

                           (i)      a  party  to any  judgment,  order,  decree,
                  agreement  or  instrument  or  subject to  restrictions  which
                  could  reasonably  be  expected  to  have a  Material  Adverse
                  Effect; or

                           (ii)     other  than  as  set  forth  in   Schedule
                  6.01(h) hereto,  in default in the performance,  observance or
                  fulfillment   of  any  of  the   obligations,   covenants   or
                  conditions  contained in any  agreement or instrument to which
                  the  Borrower  or any  Subsidiary  is a party,  which  default
                  has, or if not  remedied  within any  applicable  grace period
                  could  reasonably  be  expected  to have,  a Material  Adverse
                  Effect;

                  (i)      Litigation.  Except as set forth in the  Parent's  or
         any  Subsidiary's  most  recent  Annual  Report on Form 10-K  delivered
         pursuant  to  Section  7.01(d)  hereof,  there  is no  action,  suit or
         proceeding  at  law  or in  equity  or by or  before  any  governmental
         instrumentality  or  agency  or  arbitral  body  pending,  or,  to  the
         knowledge  of the  Borrower,  threatened  by or against the Borrower or
         any  Subsidiary  or  affecting  the Borrower or any  Subsidiary  or any
         properties  or rights of the  Borrower or any  Subsidiary,  which could
         reasonably   be  expected  to  have  a  Material   Adverse   Effect  or
         questioning  the  validity  or  enforceability  of, or the  ability  of
         Borrower to perform under, the Loan Documents;

                  (j)      Margin   Stock. Neither   the   Borrower   nor   any
         Subsidiary  owns  any  "margin  stock"  as  such  term  is  defined  in
         Regulation  U, as amended  (12  C.F.R.  Part  221),  of the Board.  The
         proceeds of the  borrowings  made pursuant to Article II hereof will be
         used by the  Borrower  and its  Subsidiaries  only for the purposes set
         forth in Section  2.14  hereof.  None of the  Letters of Credit or 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
         might  constitute  any of the Loans  under  this  Agreement  a "purpose
         credit"  within the meaning of said  Regulation  U or  Regulation X (12
         C.F.R.  Part 224) of the  Board.  Neither  the  Borrower  nor any agent
         acting in its  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;

                  (k)      Investment  Company.  Neither  the  Borrower  nor any
         Subsidiary 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.  S80a-1,  et seq.) or (ii)  subject to
         regulation  under the Public  Utility  Holding  Company Act of 1935, as
         amended,  the  Interstate  Commerce  Act,  as  amended,  or the Federal
         Power Act, 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 of the  transactions  contemplated  by this
         Agreement  will not  violate  any  provision  of said Act, or any rule,
         regulation or order issued by the  Securities  and Exchange  Commission
         thereunder, in each case as in effect on the date hereof;

                  (l)      No  Untrue  Statement.  Neither  this  Agreement  nor
         any other  Loan  Document  or  certificate  or  document  executed  and
         delivered  by  or on  behalf  of  the  Borrower  or  any  Guarantor  in
         accordance  with or pursuant to any Loan  Document  knowingly  contains
         any  misrepresentation  or untrue  statement of material  fact or omits
         to state a  material  fact  necessary,  in  light of the  circumstances
         under which such  representation  or  statement  was made,  in order to
         make any such  representation or statement  contained herein or therein
         not misleading in any material respect;

                  (m)      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
         hereby 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  or if so, such  consent,  approval,  authorization,  filing,
         registration  or  qualification  has been obtained or effected,  as the
         case may be;

                  (n)      Licenses,  Etc.  The  Borrower,  the  Parent and each
         Subsidiary   own  or  possess  all   licenses,   permits,   franchises,
         authorizations,  patents,  copyrights,  service  marks,  trademarks and
         trade names,  or rights  thereto,  that are  material to the  business,
         operations,  affairs, financial condition,  assets or properties of the
         Parent or the Borrower or its  Subsidiaries  taken as a whole,  without
         known  conflict with the rights of others,  except for those  conflicts
         that,  individually  or in  the  aggregate,  could  not  reasonably  be
         expected to have a Material Adverse Effect;

                  (o)      Benefit Plans.

                           (i)      None   of   the   employee   benefit   plans
                  maintained   at  any  time  by  the   Borrower  or  any  ERISA
                  Affiliate or the trusts  created  thereunder  has engaged in a
                  prohibited  transaction  or violated  any Foreign  Benefit Law
                  which could  subject any such  employee  benefit plan or trust
                  to a  material  tax  or  penalty  on  prohibited  transactions
                  imposed  under  Code  Section  4975  or  ERISA  or  under  any
                  Foreign Benefit Law;

                           (ii)     None   of   the   employee   benefit   plans
                  maintained at any time by the Borrower or any ERISA  Affiliate
                  which  are  employee  pension  benefit  plans  and  which  are
                  subject  to Title IV of ERISA or any  Foreign  Benefit  Law or
                  the trusts  created  thereunder  has been  terminated so as to
                  result in a material  liability  of the  Borrower  under ERISA
                  or under any  Foreign  Benefit  Law nor has any such  employee
                  benefit plan of the Borrower or any ERISA  Affiliate  incurred
                  any  material  liability to the PBGC  established  pursuant to
                  ERISA  or any  other  Person  exercising  similar  duties  and
                  functions  under  any  Foreign  Benefit  Law,  other  than for
                  required  insurance  premiums  which have been paid or are not
                  yet  due and  payable;  neither  the  Borrower  nor any  ERISA
                  Affiliate  has withdrawn  from or caused a partial  withdrawal
                  to occur with  respect to any  Multi-employer  Plan  resulting
                  in  any  assessed  and  unpaid   withdrawal   liability;   the
                  Borrower  and its ERISA  Affiliates  have made or provided for
                  all  contributions  to all such employee pension benefit plans
                  which they  maintain  and which are  required as of the end of
                  the most  recent  fiscal  year under  each such plan;  neither
                  the Borrower nor any Subsidiary  has incurred any  accumulated
                  funding  deficiency with respect to any such plan,  whether or
                  not  waived;  nor has  there  been any  reportable  event,  or
                  other event or  condition,  which  presents a material risk of
                  termination  of any such  employee  benefit  plan by such PBGC
                  or any other Person  exercising  similar  duties and functions
                  under any Foreign Benefit Law;

                           (iii)    The  present  value  of all  vested  accrued
                  benefits  under the employee  pension  benefit plans which are
                  subject  to  Title IV of ERISA  or any  Foreign  Benefit  Law,
                  maintained  by the Borrower or any ERISA  Affiliate,  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 plans allocable to such benefits;

                           (iv)     The   consummation  of  the  Loans  and  the
                  issuance of the Letters of Credit  provided for in  Article II
                  and  Article III   hereof  will  not  involve  any  prohibited
                  transaction  under ERISA or any  Foreign  Benefit Law which is
                  not subject to a statutory or administrative exemption;

                           (v)      To the  best  of the  Borrower's  knowledge,
                  each  employee  pension  benefit  plan  subject to Title IV of
                  ERISA or 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 and other  applicable  laws,  regulations  and rules and
                  any applicable Foreign Benefit Law;

                           (vi)     There  has  been  no  withdrawal   liability
                  incurred  and unpaid with respect to any  Multi-employer  Plan
                  to which  the  Borrower  or any  ERISA  Affiliate  is or was a
                  contributor;

                           (vii)    As  used  in  this   Agreement,   the  terms
                  "employee  benefit  plan,"  "employee  pension  benefit plan,"
                  "accumulated  funding  deficiency,"  "reportable  event,"  and
                  "accrued   benefits"   shall  have  the  respective   meanings
                  assigned   to  them  in  ERISA,   and  the  term   "prohibited
                  transaction"  shall have the  meaning  assigned  to it in Code
                  Section 4975 and ERISA; and

                           (viii)   Neither   the   Borrower   nor   any   ERISA
                  Affiliate  has  any  liability  not  disclosed  on  any of the
                  financial   statements   referred  to  in  Section  6.01(e)(i)
                  hereof or  furnished  to the Lenders  pursuant to Section 7.01
                  hereof,  contingent  or  otherwise,  under any plan or program
                  or  the  equivalent  for  unfunded  post-retirement  benefits,
                  including   pension,   medical  and  death   benefits,   which
                  liability  could  reasonably  be  expected  to have a Material
                  Adverse Effect;

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

                  (q)      Hazardous   Materials.    The   Borrower   and   each
         Subsidiary  is  in  compliance  in  all  material   respects  with  all
         applicable   Environmental  Laws  and  neither  the  Borrower  nor  any
         Subsidiary  has  been  notified  of any  action,  suit,  proceeding  or
         investigation  which calls into question  compliance by the Borrower or
         any Subsidiary with any  Environmental  Laws or which seeks to suspend,
         revoke or terminate any license,  permit or approval  necessary for the
         generation,  handling,  storage, treatment or disposal of any Hazardous
         Material  any of which  would  reasonably  be likely to have a Material
         Adverse Effect;

                  (r)      RICO.   Neither  the   Borrower   nor  any   Material
         Subsidiary  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;

                  (s)      Employment  Matters.   Except  as  disclosed  in  the
         Parent's or any  Subsidiary's  most recent  Annual  Report on Form 10-K
         delivered  pursuant to Section  7.01(d)  hereof,  the  Borrower and all
         Subsidiaries  are 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 the noncompliance with
         which could  reasonably be expected to have a Material  Adverse  Effect
         and there is neither  pending nor, to the  knowledge  of the  Borrower,
         threatened any litigation,  administrative  proceeding or investigation
         in  respect of such  matters,  an adverse  ruling or  determination  in
         which could  reasonably be expected to have a Material  Adverse Effect;
         and

                  (t)      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.

                                                     ARTICLE VII

                                                Affirmative Covenants

         Until the  Obligations  have been paid and  satisfied  in full and this
Agreement has been  terminated in accordance  with the terms hereof,  unless the
Required Lenders shall otherwise consent in writing, the Borrower will:

  7.01  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  Administrative  Agent  and each  Lender  (i) the
consolidated  balance sheets of the Parent,  the Borrower and its  Subsidiaries,
in each case with the notes  thereto,  and the related  consolidated  statements
of operations,  cash flow,  and  shareholders'  equity and the respective  notes
thereto for and as of the end of such Fiscal  Year,  setting  forth  comparative
financial  statements  for and as of the end of the preceding  Fiscal Year,  all
prepared in accordance with Generally  Accepted  Accounting  Principles  applied
on a Consistent  Basis and containing  opinions of Ernst & Young,  or other such
independent   certified  public  accountants  of  similar  stature,   which  are
unqualified  and without  exception  not  reasonably  acceptable to the Required
Lenders;  and  (ii) a  certificate  of an  Authorized  Representative  as to the
existence of any Default or Event of Default and  demonstrating  compliance with
Sections 8.01, 8.02, 8.03 and 8.04(ii)  hereof,  which  certificate  shall be in
the form attached hereto as Exhibit L and incorporated herein by reference;

         (b)      as soon as  practical  and in any event  within 50 days  after
the end of each  Fiscal  Quarter  (other  than the last  Fiscal  Quarter  in any
Fiscal  Year)  deliver  to the  Administrative  Agent  and each  Lender  (i)the
consolidated  balance sheets of the Parent,  the Borrower and its  Subsidiaries,
as of the end of such Fiscal  Quarter,  the related  consolidated  statements of
operations  and  shareholders'  equity for such Fiscal Quarter and statements of
cash flow for the period from the  beginning of the 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
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,  in conformity with the standards set forth
in Section  6.01(e)(i)  hereof with  respect to interim  financials,  and (ii)a
certificate of an Authorized  Representative  as to the existence of any Default
or Event of Default and containing  computations for such quarter  comparable to
that required pursuant to Section 7.01(a)(ii) hereof;

         (c)      together  with  each  delivery  of  the  financial  statements
required by Section 7.01(a)(i) hereof,  deliver to the Administrative  Agent and
each  Lender a letter  from the  Borrower's  accountants  specified  in Section 
7.01(a)(i)  hereof stating that, in performing the audit  necessary to render an
opinion on the financial  statements  delivered under Section 7.01(a)(i) hereof,
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);  and 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,
deliver  to the  Administrative  Agent  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,  its  shareholders  or  bondholders or the financial
community in general,  all such reports and  statements to be delivered  without
exhibits unless otherwise reasonably requested by the Administrative Agent; and
        
       (e)      promptly,   from  time  to  time,   deliver  or  cause  to  be
delivered  to  the  Administrative   Agent  such  other  information   regarding
Borrower's  and  each  Subsidiary's   operations,   business  affairs,   assets,
properties and financial  condition as the  Administrative  Agent may reasonably
request.  The  Administrative  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  Administrative  Agent,  to  any  regulatory
authority  having  jurisdiction  over any of the Lenders pursuant to any written
request  therefor,  or, subject to Section 11.01(g) 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 11.17 hereof.

      7.02 Maintain  Properties. Maintain  all  properties   necessary  to  its
operations  in  good  working  order  and  condition  (ordinary  wear  and  tear
excepted)  and  make  all  needed  repairs,  replacements  and  renewals  as are
necessary  to  conduct  its  business  in  accordance  with  customary  business
practices.

    7.03  Existence,  Qualification,  Etc. Do or  cause  to be done  all  things
necessary  to preserve and keep in full force and effect its  existence  and all
material rights and franchises,  trade names,  trademarks and permits, except to
the extent  terminated  or conveyed in connection  with a transaction  permitted
under  Section  8.08 or 8.14 hereof,  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.

  7.04 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 properties
except  any of the  foregoing  being  contested  in good  faith  by  appropriate
proceedings  diligently  conducted and against which adequate reserves have been
established in conformity with Generally Accepted Accounting Principles.

     7.05 Insurance.  (a)  Keep  all  of  its  insurable  properties  adequately
insured at all times and  maintain  general  public  liability  insurance at all
times with  responsible  insurance  carriers  against loss or damage by fire and
other hazards as are customarily  insured against by similar  businesses  owning
such  properties  similarly  situated,  and (b)  maintain  insurance  under  all
applicable  workers'   compensation  laws  (or  in  the  alternative,   maintain
required reserves if self-insured for workers'  compensation  purposes),  all on
such  terms  and  in  such  amounts  as are  customary  for  similarly  situated
entities  of  established  reputation  engaged in the same or  similar  lines of
business.  The  Borrower  shall use its best  efforts to ensure that each of the
policies  of  insurance  described  in  this  Section  7.05  providing  material
coverage  and  policy  limits  to  the  Borrower  and  its   Subsidiaries  on  a
consolidated  basis will provide that the insurer shall give the  Administrative
Agent not less than  thirty  (30) days'  prior  written  notice  before any such
policy shall terminate, lapse, be cancelled or be materially amended.

       7.06 True Books; Right of Inspection (a) Keep true  books of record
and account in which  full,  true and  correct  entries  shall 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 Generally  Accepted
Accounting   Principles  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;  and (b) permit any Person designated by the  Administrative  Agent,
at the  Administrative  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  Administrative
Agent may reasonably request.

       7.07 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.

    7.08 Observe all Laws.  Conform  to and duly  observe  all  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,  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.

         7.09   Covenants Extending to Material Subsidiaries.
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 7.02 through 7.08 hereof, inclusive.

         7.10 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 Borrower or any
Subsidiary  which would
have a Material  Adverse Effect,  promptly deliver to the  Administrative  Agent
written notice  thereof,  the period of existence  thereof,  and what action the
Borrower proposes to take with respect thereto.

       7.11 Suits or Other Proceedings.
            Upon   any   Authorized   Representative
obtaining  knowledge of any  litigation or other  proceedings  being  instituted
against the Borrower or any  Subsidiary  or otherwise  questioning  the validity
or  enforceability  of, or the ability of the  Borrower 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,  in an
aggregate  stated  amount  greater than  $25,000,000  not  otherwise  covered by
insurance,  promptly deliver to the Administrative  Agent written notice thereof
stating the nature and status of such  litigation,  dispute,  proceeding,  levy,
execution or other process.

  7.12 Notice of Discharge of Hazardous Material or Environmental Complaint.  
           Promptly  provide to the  Administrative  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  Borrower  or any
Subsidiary  of any  applicable  Environmental  Laws;  (b) release or  threatened
release by the Borrower or any  Subsidiary  of any  Hazardous  Material,  except
where occurring  legally;  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.

   7.13 Environmental  Compliance.  If the  Borrower  or any  Subsidiary  shall
receive  notice  from  any  Governmental  Authority  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  Administrative  Agent and use its  reasonable  best
efforts to remove or remedy,  or cause the  applicable  Subsidiary  to remove or
remedy, such violation within a reasonable time.

   7.14  Indemnification.    Defend,    indemnify    and   hold   harmless   the
Administrative   Agent  and  the  Lenders,   and  their   respective   officers,
directors,  employees and agents,  from and against any and all claims,  losses,
liabilities,  damages  and  expenses  (including,  without  limitation,  cleanup
costs and reasonable  attorneys'  fees) arising directly or indirectly from, out
of or by reason of the  handling,  storage,  treatment,  emission or disposal of
any  Hazardous  Material by or in respect of the Borrower or any  Subsidiary  or
property  owned  or  leased  or  operated  by the  Borrower  or any  Subsidiary.
Notwithstanding  anything in this Article VII to the  contrary,  the  provisions
of this Section 7.14 shall  survive  repayment  of the  Obligations,  occurrence
of the Revolving  Credit  Termination Date and expiration or termination of this
Agreement.

    7.15 Further Assurances.  At the Borrower's  cost and expense,  upon request
of the  Administrative  Agent,  duly  execute  and  deliver  or cause to be duly
executed and delivered,  to the Administrative  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  Administrative  Agent
to carry out more  effectively  the  provisions  and purposes of this  Agreement
and the other Loan Documents.

    7.16 Benefit Plans.  Comply in all material  respects with all  requirements
of ERISA  and any  Foreign  Benefit  Law  applicable  to it and  furnish  to the
Administrative  Agent as soon as practicable  and in any event (a) within thirty
(30) days after the  Borrower  knows or has  reason to know that any  reportable
event  or other  event  under  any  Foreign  Benefit  Law  with  respect  to any
employee  benefit plan  maintained by the Borrower or any ERISA  Affiliate which
could  give  rise  to  termination  or the  imposition  of any  material  tax or
penalty  has  occurred,   written  statement  of  an  Authorized  Representative
describing in reasonable  detail such  reportable  event or such other event and
any action which the Borrower or  applicable  ERISA  Affiliate  proposes to take
with  respect  thereto,  together  with a copy of any notice of such  reportable
event given to the PBGC or to any other  applicable  Person  exercising  similar
duties and  functions  under any Foreign  Benefit  Law or a statement  that said
notice,  if required,  will be filed with the annual report of the United States
Department  of  Labor  with  respect  to  such  plan  if such  filing  has  been
authorized,  (b) promptly after receipt  thereof,  a copy of any notice that the
Borrower  or any ERISA  Affiliate  may  receive  from the PBGC or from any other
Person  exercising  similar duties and functions  under any Foreign  Benefit Law
relating  to the  intention  of the PBGC or any such  Person  to  terminate  any
employee  benefit  plan or plans of the  Borrower or any ERISA  Affiliate  or to
appoint a trustee to  administer  any such plan,  and (c) within 10 days after a
filing with the PBGC  pursuant to Section  412(n) of the Code or with any Person
pursuant  to any  Foreign  Benefit Law of a notice of failure to make a required
installment  or other  payment  with  respect  to a plan,  a  certificate  of an
Authorized  Representative  setting  forth  details as to such  failure  and the
action  that the  Borrower  or its  affected  ERISA  Affiliate,  as  applicable,
proposes  to take with  respect  thereto,  together  with a copy of such  notice
given to the PBGC or to such Person.

   7.17 Intellectual  Property.  Continue  at all  times to  preserve,  protect
and maintain  free from Liens  (other than Liens  permitted  under  Section 8.05
hereof)  its  material  patents,  copyrights,  licenses,  trademarks,  trademark
rights,  trade names,  trade name rights,  service  marks,  service mark rights,
trade  secrets  and  know-how   necessary  or  useful  in  the  conduct  of  its
operations.

    7.18 Use  of  Proceeds.  Use  the  proceeds  of the  Loans  solely  for  the
purposes specified in Section 2.14 hereof.

    7.19 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 
7.01 hereof,  cause to be delivered to the Administrative  Agent for the benefit
of the Lenders each of the following:

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

                  (ii)     an  opinion  of  in-house  counsel  of  the  Borrower
         dated  as of the  date of  delivery  of the  Guaranty  provided  in the
         foregoing  clause (i) and  addressed  to the  Administrative  Agent and
         the Lenders,  reasonably  acceptable  to the  Administrative  Agent and
         substantially  in  the  form  of  the  opinions  of  counsel  delivered
         pursuant to  Section 5.01  hereof with  respect to each  Guarantor  and
         Guaranty on the Closing Date;

                  (iii)    current    copies   of   the    charter    or   other
         organizational  documents  and any  bylaws  of such  Material  Domestic
         Subsidiary,  minutes of duly  called and  conducted  meetings  (or duly
         effected  consent  actions) of the Board of Directors,  or  appropriate
         committees   thereof  (and,  if  required  by  such  charter  or  other
         organizational  documents  or  bylaws  or by  applicable  laws,  of the
         shareholders),  of such  Subsidiary  authorizing  the  actions  and the
         execution  and delivery of documents  described in  clause (i)  of this
         Section  7.19 and evidence  satisfactory  to the  Administrative  Agent
         (confirmation  of  the  receipt  of  which  will  be  provided  by  the
         Administrative  Agent  to the  Lenders)  that  such  Material  Domestic
         Subsidiary  is Solvent as of such date and after  giving  effect to the
         Guaranty.

                                                    ARTICLE VIII

                                                 Negative Covenants

         Until the  Obligations  have been paid and  satisfied  in full and this
Agreement has been  terminated in accordance  with the terms hereof,  unless the
Required  Lenders  shall  otherwise  consent in writing,  the Borrower will not,
nor will it permit any Material Subsidiary or the Parent to:

         8.01  Consolidated  Funded  Debt  Ratio. 
      Consolidated  Funded  Debt Ratio.  Permit at any time the  Consolidated
Funded Debt Ratio to be greater than 2.95 to 1.00.

         8.02 Consolidated  Interest Coverage Ratio. 
                Permit  at  any  time  the
Consolidated Interest Coverage Ratio to be less than 5.00 to 1.00.

         8.03    Consolidated     Shareholders'    Equity.    
                     Permit  at any time  Consolidated
Shareholders'  Equity  to be less  than  (a)  $268,000,000  during  the  current
Fiscal  Year and (b) during  each Fiscal  Year  thereafter,  beginning  with the
Fiscal  Year  commencing  March 1, 1998,  an amount  equal to the sum of (i) the
amount of  Consolidated  Shareholders'  Equity  required under this Section 8.03
for the  immediately  preceding  Fiscal  Year plus (ii) fifty  percent  (50%) of
Consolidated   Net  Income  during  the  immediately   preceding   Fiscal  Year;
provided,  however,  in no event  shall the  Consolidated  Shareholders'  Equity
requirement  be  decreased  as a result  of a net loss of the  Borrower  and its
Subsidiaries  (i.e.,  negative  Consolidated  Net Income)  for any Fiscal  Year.
Any  increase   calculated  pursuant  hereto  shall  be  determined  based  upon
financial  statements  delivered  in  accordance  with Section  7.01(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.

   8.04 Indebtedness.  Permit  any  Subsidiary  to  incur,  create,  assume  or
permit to exist any Indebtedness, howsoever evidenced, except for

                  (a)      the   endorsement  of  negotiable   instruments   for
         deposit or collection or similar  transactions  in the ordinary  course
         of business; and

                  (b)      Consolidated  Subsidiary  Debt not in  excess  of the
         lesser of (A) 25% of  Consolidated  EBDAIT for the Four Quarter  Period
         ended on the most recent Determination Date and (B) $75,000,000.
 
    8.05 Guaranties. Incur,    create   or   assume   any    guaranties    of
non-consolidated  Indebtedness  in an  aggregate  principal  amount in excess of
$50,000,000.

    8.06 Liens.  Incur,  create or permit to exist any pledge,  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  of  its
Subsidiaries,  including  without  limitation  any capital stock of the Borrower
or any of its Subsidiaries, other than

                  (a)      Liens  existing  as of  the  date  hereof  and as set
         forth in Schedule 6.01(f) hereto;

                  (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
         Generally Accepted Accounting Principles;

                  (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 Generally Accepted Accounting Principles;

                  (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 $50,000,000;

                  (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 Generally  Accepted  Accounting  Principles  applied on a Consistent
         Basis, with respect to such judgment or award.

   8.07 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 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  6.01(e)  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  8.07(f) shall exceed at any time an  Investment  Commitment of
         $75,000,000;

                  (g)      investments in Consolidated  Subsidiaries  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.

   8.08 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,  (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,  (ii) any  Person may merge with the  Borrower  if the
Borrower shall be the survivor  thereof and such merger shall not cause,  create
or result in the  occurrence  of any  Default or Event of  Default  and (iii) 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 (iv) in
any case  hereunder,  no Event of Default  shall  exist after  giving  effect to
such merger or consolidation.

  8.09 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.

   8.10  Benefit  Plans.  With respect to all  employee  pension  benefit  plans
maintained by the Borrower or any ERISA Affiliate:

                  (a)      terminate  any  of  such  employee   pension  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  prohibited  transaction  involving any
         of  such   employee   pension   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  pension  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
         pension 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  pension  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
         Multi-employer  Plan which would be reasonably  likely to have or would
         have a Material Adverse Effect.

         8.11 Fiscal Year.  Change its Fiscal Year.

     8.12 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  8.08  hereof  and  (b)  the   declaration  of
bankruptcy,  liquidation and dissolution of Subsidiaries  which are not Material
Subsidiaries.

       8.13 Dividends,   Redemptions  and  Other   Payments.   
                   If (a) any  Default  or
Event of Default  shall  exist  under  Sections  8.01,  8.02 or 8.03 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.

   8.14 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 8.14:

                  (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 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  Funded  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.

         8.15 Sale   and   Leaseback   Transactions.  
                     The Borrower will not, and will not permit  any  Material
Subsidiary   to,  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  Funded  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.


                                                     ARTICLE IX

                                         Events of Default and Acceleration

    9.01 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
administrative or governmental body), that is to say:

                  (a)      if  default  shall  be made  in the due and  punctual
         payment  of the  principal  of any  Loan or  Reimbursement  Obligation,
         when and as the same shall be due and payable  whether  pursuant to any
         provision  of  Article  II  or  Article III  hereof,  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 and such amount  remains
         unpaid  for  five  (5) or more  days or of any  fees or  other  amounts
         payable to the Lenders,  the Administrative  Agent or NationsBank 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  7.10,  7.11,  7.18 or
         Sections 8.01,  8.02,  8.03, 8.04, 8.05, 8.06, 8.07, 8.08, 8.12, 8.13, 
         8.14 or 8.15 hereof; 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  Guaranty  or the  Notes
         (other  than as  described  in clause  (a),  (b) or (c) above) and such
         default shall  continue  (i)for thirty (30) or more days after receipt
         of notice of such  default  by an  Authorized  Representative  from the
         Administrative   Agent  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 Administrative  Agent or the Lenders
         or delivered to the  Administrative  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  any  action  by  the
         Administrative  Agent),  or if  without  the  written  consent  of  the
         Administrative  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
         any action by the Administrative 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  $25,000,000  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 (as defined in the Note Agreement); or

                  (f)      if any  representation,  warranty or other  statement
         of  fact  contained  herein  or  any  other  Loan  Document  or in  any
         writing,  certificate,  report or  statement  at any time  furnished to
         the  Administrative  Agent  or  any  Lender  by or  on  behalf  of  the
         Borrower  or any  Guarantor  pursuant  to or in  connection  with  this
         Agreement or the other Loan  Documents,  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  law or
         statute,  Federal,  state or foreign;  (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  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 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  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 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  $25,000,000  is  rendered  against  the  Borrower  or any
         Subsidiary,  or (ii)there is any  attachment,  injunction or execution
         against any of the  Borrower's or any  Subsidiary's  properties for any
         amount  in  excess  of  $25,000,000;  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  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  
         8.10(ii)   hereof),   which  is  not   subject   to  a   statutory   or
         administrative  exemption,  involving any employee pension benefit plan
         of the Borrower or any ERISA Affiliate,  (ii)any  accumulated  funding
         deficiency  (as  referred to in Section  8.10(iv)  hereof),  whether or
         not  waived,  shall  exist with  respect to any Single  Employer  Plan,
         (iii)a  reportable  event (as referred to in Section  8.10(v)  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  Multi-employer  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  Multi-employer  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  9.01(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 or the  Borrower  shall  become a party
         to or the subject of any  agreement,  transaction  or related series of
         transactions  pursuant  to or as a  result  of  which  (i) any  Person,
         other than the  Parent,  acquires  any  shares of capital  stock of the
         Borrower  or (ii) any  Person or group of  Persons  acting  in  concert
         acquires  voting  control,  directly or  indirectly,  whether by tender
         offer or in one or more  negotiated  block or market  transactions,  of
         more  than  fifty  percent  (50%)  of  the  shares  of the  issued  and
         outstanding capital stock of any class of the Parent; or

                  (n)      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,  (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;

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:  (i)the  Administrative  Agent may,  and at the
                  direction  of  the  Required   Lenders   shall,   declare  any
                  obligation  of  the  Lenders  to  make  further  Loans  and of
                  NationsBank to issue Letters of Credit  terminated,  whereupon
                  the  obligation  of each Lender to make  further  Loans and of
                  NationsBank  to  issue  Letters  of  Credit,  hereunder  shall
                  terminate  immediately,   and  (ii)the  Administrative  Agent
                  shall  at the  direction  of the  Required  Lenders,  at their
                  option,  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  Administrative  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  obligation of the Lenders to make
                  Advances  and  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  presentment,  demand,  protest,  notice or other formality
                  of any kind or any action by the  Administrative  Agent or the
                  Required  Lenders  or  notice to the  Administrative  Agent or
                  the Lenders;

                           (B)      the  Borrower  shall,  upon  demand  of  the
                  Administrative  Agent or the  Required  Lenders,  deposit cash
                  with  the  Administrative  Agent  in an  amount  equal  to the
                  amount of all  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  Administrative  Agent  pursuant  to the
                  terms of the applicable  Application  and Agreement for Letter
                  of Credit; and

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

   9.02 Administrative  Agent  to Act.  In case  any  one or more  Events  of 
Default  shall occur and not have been  waived,  the  Administrative  Agent may,
and at the  direction  of the  Required  Lenders  shall,  proceed to protect and
enforce  their rights or remedies  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.

   9.03 Cumulative  Rights.  No  right  or  remedy  herein  conferred  upon the
Lenders or the  Administrative  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.

    9.04 No Waiver.  No course of dealing  between the  Borrower  and any Lender
or the  Administrative  Agent or any  failure or delay on the part of any Lender
or the  Administrative  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.

    9.05 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
this Article IX, all payments  received by the  Administrative  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
Administrative Agent in the following order:

                  (a)      amounts due to NationsBank  and the Lenders  pursuant
to Sections 2.12, 3.02(f), 3.03, 7.14, 11.05 and 11.10 hereof;

                  (b)      amounts   due  to   (A)   NationsBank   pursuant   to
Section 3.04  hereof,  and (B) to NationsBank  and/or the  Administrative  Agent
pursuant to Sections 2.12 and 2.15 hereof;

                  (c)      payments  of  interest  on  Loans  and  Reimbursement
Obligations;

                  (d)      payments  of  principal  on Loans  and  Reimbursement
Obligations;

                  (e)      payment of cash amounts to the  Administrative  Agent
in respect of Letter of Credit Outstandings pursuant to Section 9.01(B) hereof;

                  (f)      payments   of  all  other   amounts  due  under  this
Agreement, if any; and

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

                                                 ARTICLE X

                                          The Administrative Agent

   10.01 Appointment.  Each Lender  (including  NationsBank  in its  capacity as
maker of Swing  Line  Loans and as  issuer  of the  Letters  of  Credit)  hereby
irrevocably  designates and appoints  NationsBank as the Administrative Agent of
the Lenders under this  Agreement,  and each of the Lenders  hereby  irrevocably
authorizes  NationsBank  as the  Administrative  Agent for such Lender,  to take
such action on its behalf under the  provisions of this  Agreement and the other
Loan  Documents and to exercise  such powers as are  expressly  delegated to the
Administrative  Agent by the terms of this  Agreement,  together with such other
powers as are reasonably  incidental  thereto.  The  Administrative  Agent shall
not have any  duties  or  responsibilities,  except  those  expressly  set forth
herein, or any fiduciary  relationship  with any of the Lenders,  and no implied
covenants,  functions,  responsibilities,  duties,  obligations  or  liabilities
shall  be  read  into  this   Agreement   or   otherwise   exist   against   the
Administrative Agent.

   10.02 Attorneys-in-fact. The Administrative  Agent may  execute  any of its
duties  under this  Agreement  by or  through  agents or  attorneys-in-fact  and
shall be entitled to advice of counsel  concerning  all  matters  pertaining  to
such duties.  The  Administrative  Agent shall not be responsible to the Lenders
for the  negligence,  gross  negligence  or willful  misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

  10.03 Limitation on Liability.  Neither the  Administrative  Agent nor any of
its  officers,  directors,  employees,  agents  or  attorneys-in-fact  shall  be
liable to the  Lenders for any action  lawfully  taken or omitted to be taken by
it or them under or in connection  with this  Agreement  except for its or their
own gross negligence or willful  misconduct.  Neither the  Administrative  Agent
nor any of its  affiliates  shall be  responsible  in any  manner  to any of the
Lenders for any recitals,  statements,  representations  or  warranties  made by
the  Borrower  or any of its  Subsidiaries,  or any  officer  or  representative
thereof,  contained in this Agreement or in any of the other Loan Documents,  or
in  any  certificate,  report,  statement  or  other  document  referred  to  or
provided for in or received by the  Administrative  Agent under or in connection
with this Agreement,  or for the value,  validity,  effectiveness,  genuineness,
enforceability  or  sufficiency  of  this  Agreement  or any of the  other  Loan
Documents,  or for any  failure  of the  Borrower  to  perform  its  obligations
thereunder,  or for any  recitals,  statements,  representations  or  warranties
made, or for the value,  validity,  effectiveness,  genuineness,  enforceability
or sufficiency of any collateral.  The  Administrative  Agent shall not be under
any  obligation  to any of the  Lenders  to  ascertain  or to  inquire as to the
observance or performance  of any of the terms,  covenants or conditions of this
Agreement  or any of the other Loan  Documents on the part of the Borrower or to
inspect the properties, books or records of the Borrower or its Subsidiaries.

     10.04 Reliance.Subject to the provisions hereof,  the Administrative  Agent
shall be entitled to rely,  and shall be fully  protected  in relying,  upon any
Note, writing,  resolution,  notice, consent,  certificate,  affidavit,  letter,
cablegram,  telegram,  telecopy  or  telex  message,  statement,  order or other
document  or  conversation  believed by it to be genuine and correct and to have
been  signed,  sent or made by the proper  Person or Persons and upon advice and
statements  of legal  counsel  (including,  without  limitation,  counsel to the
Borrower),   independent   accountants   and  other  experts   selected  by  the
Administrative  Agent.  The  Administrative  Agent  may deem and treat the payee
of any Note as the owner  thereof  for all  purposes  unless an  Assignment  and
Acceptance  shall  have  been  filed  with and  accepted  by the  Administrative
Agent.  The  Administrative  Agent  shall  be  fully  justified  in  failing  or
refusing to take any action under this  Agreement  unless it shall first receive
advice or  concurrence  of the  Lenders or the  Required  Lenders as provided in
this  Agreement and 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
Administrative  Agent)  which  may be  incurred  by it by  reason  of  taking or
continuing  to take any  such  action.  The  Administrative  Agent  shall in all
cases be fully  protected in acting,  or in refraining  from acting,  under this
Agreement  in  accordance  with a request of all of the Lenders or the  Required
Lenders,  as  applicable,  and such  request and any action  taken or failure to
act pursuant  thereto  shall be binding upon all the Lenders and all present and
future holders of the Notes.

    10.05 Notice of Default. The Administrative  Agent  shall not be deemed to
have  knowledge or notice of the  occurrence  of any Default or Event of Default
unless  the  Administrative  Agent  has  received  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".  In
the  event  that  the   Administrative   Agent  receives  such  a  notice,   the
Administrative  Agent shall  promptly  give notice  thereof to the Lenders.  The
Administrative  Agent  shall take such action  with  respect to such  Default or
Event of Default as shall be  reasonably  directed  by all of the Lenders or the
Required   Lenders,   as  applicable;   provided  that,  unless  and  until  the
Administrative  Agent shall have received such  directions,  the  Administrative
Agent may (but shall not be  obligated  to) take such  action,  or refrain  from
taking  such  action,  with  respect  to such  Default or Event of Default as it
shall deem advisable in the best interests of the Lenders.

    10.06 No  Representations. Each Lender expressly  acknowledges  that neither
the   Administrative   Agent   nor  any  of  its   affiliates   has   made   any
representations  or  warranties  to it and  that  no  act by the  Administrative
Agent  hereafter  taken,  including any review of the affairs of the Borrower or
any of its  Subsidiaries,  shall be deemed to constitute any  representation  or
warranty by the  Administrative  Agent to any Lender.  Each Lender represents to
the  Administrative  Agent that it has,  independently and without reliance upon
the  Administrative  Agent or any other Lender,  and based on such documents and
information  as it  has  deemed  appropriate,  made  its  own  appraisal  of and
investigation into the financial condition,  creditworthiness,  affairs,  status
and nature of the  Borrower  and its  Subsidiaries  and made its own decision to
enter  into  this   Agreement.   Each  Lender  also  represents  that  it  will,
independently  and without reliance upon the  Administrative  Agent or any other
Lender,   and  based  on  such  documents  and  information  as  it  shall  deem
appropriate at the time,  continue to make its own credit  analysis,  appraisals
and  decisions in taking or not taking  action under this  Agreement and to make
such  investigation  as it deems necessary to inform itself as to the status and
affairs,  financial or otherwise,  of the Borrower and its Subsidiaries.  Except
for notices,  reports and other documents  expressly required to be furnished to
the Lenders by the  Administrative  Agent hereunder,  the  Administrative  Agent
shall  not  have any duty or  responsibility  to  provide  any  Lender  with any
credit or other  information  concerning  the  affairs,  financial  condition or
business  of the  Borrower  or any of its  Subsidiaries  which may come into the
possession of the Administrative Agent or any of its affiliates.

 10.07 Indemnification.  The  Lenders,  severally  and not  jointly,  agree to
indemnify  the  Administrative  Agent in its capacity as such (to the extent not
reimbursed  by  the  Borrower  and  without  limiting  any  obligations  of  the
Borrower  or any  Subsidiary  so to do),  including  its  employees,  directors,
officers and agents,  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)  from  and  against  any  and all
liabilities,   obligations,  losses,  damages,  penalties,  actions,  judgments,
suits,  costs,  expenses or disbursements of any kind or nature whatsoever which
may at any  time  (including,  without  limitation  at any  time  following  the
payment  of the  Notes) be imposed  on,  incurred  by or  asserted  against  the
Administrative Agent, including its employees,  directors,  officers and agents,
in any way relating to or arising out of this  Agreement  or any other  document
contemplated by or referred to herein or the  transactions  contemplated  hereby
or  any  action  taken  or  omitted  by the  Administrative  Agent  under  or in
connection  with any of the  foregoing;  provided that no Lender shall be liable
for the  payment  of any  portion  of  such  liabilities,  obligations,  losses,
damages,   penalties,    actions,   judgments,   suits,   costs,   expenses   or
disbursements  resulting  from the  Administrative  Agent's gross  negligence or
willful  misconduct.  The  agreements  in this Section  10.07 shall  survive the
final payment in full of the Obligations and the termination of this Agreement.

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

  10.09 Resignation.   If   the   Administrative   Agent   shall   resign   as
Administrative  Agent under this Agreement,  prior written notice of which shall
be  delivered  by the  Administrative  Agent to the  Borrower  and  each  Lender
thirty (30) days prior to its  effectiveness,  then,  so long as there shall not
have  occurred  and be  continuing  a Default or Event of Default,  the Borrower
may appoint and the Required  Lenders may approve  (which  approval shall not be
unreasonably  withheld  or  delayed) a  successor  Administrative  Agent for the
Lenders,  or if a  Default  or Event  of  Default  shall  have  occurred  and be
continuing,  the Required Lenders may appoint a successor  Administrative  Agent
for  the  Lenders,  which  successor  Administrative  Agent  shall  be  (i)  the
Documentation  Agent  or  any  Co-Agent  hereunder  (and  no  approvals  by  the
Required Lenders shall be required in the case of the  Documentation  Agent or a
Co-Agent) or (ii) 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,  whereupon  such successor  Administrative  Agent shall succeed to
the  rights,  powers  and  duties  of the  former  Administrative  Agent and the
obligations  of  the  former   Administrative  Agent  shall  be  terminated  and
cancelled,  without  any other or further act or deed on the part of such former
Administrative  Agent  or  any of  the  parties  to  this  Agreement;  provided,
however,  that the former  Administrative  Agent's  resignation shall not become
effective until such successor  Administrative  Agent has been appointed and has
succeeded of record to all right,  title and interest in any collateral  held by
the Administrative  Agent;  provided,  further, that if the Required Lenders and
the Borrower cannot agree as to a successor  Administrative  Agent within ninety
(90) days  after the  effective  date of such  resignation,  the  Administrative
Agent  shall  appoint a  successor  Administrative  Agent  which  satisfies  the
criteria  set forth above in this Section  10.09 for a successor  Administrative
Agent and the parties hereto agree to execute  whatever  documents are necessary
to effect  such  action  under this  Agreement  or any other  document  executed
pursuant  to  this  Agreement;   provided,   however  that  in  such  event  all
provisions of this Agreement and the other Loan  Documents  shall remain in full
force  and  effect.  After  any  retiring   Administrative  Agent's  resignation
hereunder  as  Administrative  Agent,  the  provisions  of this  Article X shall
inure  to its  benefit  as to any  actions  taken or  omitted  to be taken by it
while it was Administrative Agent under this Agreement.

    10.10 Sharing of Payments, etc. Each  Lender  agrees  that  if it  shall,
through the  exercise  of a right of banker's  lien,  set-off,  counterclaim  or
otherwise,  obtain payment with respect to its Obligations  (other than pursuant
to Article  IV hereof)  which  results in its  receiving  more than its pro rata
share of the aggregate  payments with respect to all of the  Obligations  (other
than any payment  pursuant to Article IV hereof),  then (A) such Lender shall be
deemed  to have  simultaneously  purchased  from the  other  Lenders  a share in
their  Obligations  so that the  amount of the  Obligations  held by each of the
Lenders  shall be pro rata and (B) such  other  adjustments  shall be made  from
time to time as  shall be  equitable  to  insure  that the  Lenders  share  such
payments  ratably;  provided,  however,  that for purposes of this Section 10.10
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. If all or any  portion  of any such  excess
payment is thereafter  recovered  from the Lender which  received the same,  the
purchase  provided in this  Section  10.10 shall be  rescinded  to the extent of
such  recovery,  without  interest.  The  Borrower  expressly  consents  to  the
foregoing  arrangements  and agrees that each Lender so  purchasing a portion of
the other Lenders'  Obligations  may exercise all rights of payment  (including,
without limitation,  all rights of set-off,  banker's lien or counterclaim) with
respect to such  portion as fully as if such  Lender  were the direct  holder of
such portion.

         10.11 Documentation  Agent and  Co-Agents.  The  Documentation  Agent
and each of the  Co-Agents identified in the fourth  paragraph of the first page
of this  Agreement  shall have no rights,  duties,  obligations  or  liabilities
hereunder  with  respect  to being  named as  Documentation  Agent or a Co-Agent
herein and shall have only those rights,  duties,  obligations  and  liabilities
applicable to a Lender hereunder.

   10.12 Notice to Lenders. The  Administrative  Agent shall  promptly  deliver
to  each  Lender  copies  or  notice  of each  notification,  request  or  other
communication or document or agreement,  as applicable,  received by it from the
Borrower pursuant to Sections 2.03(f),  2.06(a),  2.09, 2.11, 3.02(b),  7.01(d),
7.01(e), 7.10, 7.11, 7.12, 7.13, 7.15, 7.16 and 7.19 hereof.


                                        ARTICLE XI

                                      Miscellaneous

       11.01   Assignments   and   Participations.

         (a)      At any time after the Closing  Date each Lender may,  with the
prior  written  consent  of the  Administrative  Agent and the  Borrower,  which
consents  shall not be  unreasonably  withheld,  assign to one or more financial
institutions  all  or a  portion  of  its  rights  and  obligations  under  this
Agreement and the other Loan Documents  (including,  without limitation,  all or
a  portion  of any Note  payable  to its  order);  provided,  that (i) each such
assignment shall be of a constant,  and not a varying,  percentage of all of the
assigning  Lender's rights and obligations  (including  Revolving  Credit Loans,
Competitive Bid Loans and  Participations)  under this Agreement,  (ii) for each
assignment  involving the issuance and transfer of a Note, the assigning  Lender
shall execute an Assignment and Acceptance and the Borrower  hereby  consents to
execute a  replacement  Note or Notes to give  effect to the  assignment  within
five (5) days of the  execution of such  Assignment  and  Acceptance,  (iii) the
minimum  Revolving  Credit  Commitment  which shall be  assigned is  $10,000,000
(together   with   which  the   assigning   Lender's   applicable   portion   of
Participations  and the Letter of Credit  Commitment  shall also be assigned) or
such  lesser  amount   constituting  all  of  such  Lender's   Revolving  Credit
Commitment  (and  applicable  portion  of  Participations  and  Letter of Credit
Commitment),  (iv) such  assignee  shall  have an office  located  in the United
States,  (v) an  assignment  (other than an  assignment of 100% of its interest)
by  NationsBank  shall not include  any portion of the Swing Line or  obligation
to issue  Letters of Credit,  (vi) each  assignee  shall  execute and deliver to
the  Borrower  a  confidentiality  agreement  in the form of  Exhibit N  hereto,
(vii) no consent of the  Borrower or  Administrative  Agent shall be required in
connection  with any  assignment  by a Lender  to such  Lender's  parent  or any
wholly-owned  subsidiary of such  Lender's  parent and  (viii)the  Borrower may
condition  its consent to any  assignment  hereunder  upon the Lender  assigning
all of its rights and  obligations  hereunder.  Upon such  execution,  delivery,
approval and  acceptance,  from and after the effective  date  specified in each
Assignment and Acceptance,  (x) the assignee  thereunder shall be a party hereto
and,  to the extent  that rights and  obligations  hereunder  or under the other
Loan  Documents  have  been  assigned  or  negotiated  to it  pursuant  to  such
Assignment  and  Acceptance,  have  the  rights  and  obligations  of  a  Lender
hereunder  and  thereunder  and a  holder  of such  Notes  and (y) the  assignor
thereunder  shall, to the extent that rights and obligations  hereunder or under
the other Loan  Documents  have been  assigned or  negotiated  by it pursuant to
such  Assignment  and  Acceptance,  relinquish  its rights and be released  from
that  portion  of its  obligations  under  this  Agreement  and the  other  Loan
Documents  applicable  to the  rights  so  assigned.  Any  Lender  who  makes an
assignment shall pay to the Administrative  Agent a one-time  administrative fee
of  $3,000.00;  provided  further  that in the event the  provisions  under this
Agreement  for  providing  a  Replacement   Bank  are  implemented   through  an
assignment, the $3,000.00 administration fee shall be payable by the Borrower.

         (b)      By executing  and  delivering an  Assignment  and  Acceptance,
the  Lender  assignor  thereunder  and the  assignee  thereunder  confirm to and
agree  with  each  other  and the  other  parties  hereto  as  follows:  (i) the
assignment  made  under  such  Assignment  and  Acceptance  is made  under  such
Assignment and Acceptance  without recourse to such Lender  assignor;  (ii) such
assigning   Lender   makes  no   representation   or  warranty  and  assumes  no
responsibility  with respect to the  financial  condition of the Borrower or any
Subsidiary or the  performance  or observance by the Borrower or any  Subsidiary
of any of its  obligations  under any Loan  Document or any other  instrument or
document  furnished  pursuant  thereto;  (iii)such  assigning  Lender  makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in  connection  with any
Loan Document or any other instrument or document  furnished  pursuant  thereto;
(iv) such  assigning  Lender is the legal and  beneficial  owner of the interest
being  assigned  under  such  Assignment  and  Acceptance;   (iv)such  assignee
confirms  that it has received a copy of this  Agreement,  together  with copies
of the  financial  statements  referred  to in  Section  6.01(e)  hereof or most
recently  delivered  pursuant to Section  7.01  hereof,  as the case may be, and
such other Loan Documents and other  documents and  information as it has deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and  Acceptance;  (v) such assignee will,  independently  and without
reliance  upon the  Administrative  Agent,  such  assigning  Lender or any other
Lender  and  based  on  such   documents  and   information  as  it  shall  deem
appropriate  at the time,  continue to make its own credit  decisions  in taking
or not taking  action  under this  Agreement;  (vi) such  assignee  appoints and
authorizes the  Administrative  Agent to take such action as agent on its behalf
and to exercise such powers under this  Agreement,  the Notes and the other Loan
Documents as are delegated to the  Administrative  Agent by the terms hereof and
thereof,  together with such powers as are reasonably  incidental  thereto;  and
(vii) such assignee  agrees that it will perform in accordance  with their terms
all of the  obligations  which by the terms of this Agreement are required to be
performed by it as a Lender and a holder of such Notes.

         (c)      The  Administrative   Agent  shall  maintain  at  its  address
referred to herein a copy of each  Assignment  and  Acceptance  delivered to and
accepted by it.

         (d)      Upon its receipt of an Assignment and  Acceptance  executed by
an  assigning  Lender,  the  Administrative  Agent shall give prompt  notice and
shall forward a copy thereof to Borrower.

         (e)      Nothing  herein  shall  prohibit  any Lender from  pledging or
assigning  any Note to any Federal  Reserve Bank in accordance  with  applicable
law.

         (f)      If,  pursuant  to this  Section  11.01,  any  interest in this
Agreement or any Note is transferred  to any assignee  Lender which is organized
under the laws of any  jurisdiction  other than the  United  States or any state
thereof,  the assigning  Lender shall cause such assignee  Lender,  concurrently
with the  effectiveness  of such  transfer,  (i) to represent  to the  assigning
Lender (for the benefit of the assigning Lender,  the  Administrative  Agent and
the Borrower)  that under  applicable law and treaties no taxes will be required
to be withheld  by the  Administrative  Agent,  the  Borrower  or the  assigning
Lender  with  respect  to any  payments  to be made to such  assignee  Lender in
respect  of the  Loans  and  (ii)  to  furnish  to  the  assigning  Lender,  the
Administrative  Agent and the Borrower  such  certificates,  documents and other
evidence as required to comply with the  penultimate  paragraph  of Section 4.06
hereof,  and the  assignee  Lender  shall  comply  from  time to time  with  all
applicable  United States laws and regulations  with regard to such  withholding
tax exemption.

         (g)      Each Lender may sell  participations  at its expense to one or
more  banks as to all or a portion  of its  rights  and  obligations  under this
Agreement;  provided,  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) such
Lender  shall  remain  the holder of any Notes  issued to it for the  purpose of
this  Agreement,  (iv)  such  participations  shall be in a  minimum  amount  of
$5,000,000  and,  in  the  case  of a  participation  in  the  Revolving  Credit
Facility,  shall include an allocable  portion of such Lender's  Participations,
(v) Borrower,  the Administrative  Agent and the other Lenders shall continue to
deal solely and  directly  with such  Lender in  connection  with such  Lender's
rights and  obligations  under  this  Agreement  and with  regard to any and all
payments  to be made  under this  Agreement;  provided,  that the  participation
agreement  between a Lender and its  participants  may provide  that such Lender
will obtain the approval of such  participant  prior to such  Lender's  agreeing
to any amendment or waiver of any provisions of this  Agreement  which would (A)
extend the maturity of any Note,  (B) reduce the interest  rate  hereunder,  (C)
increase  the  Revolving   Credit   Commitment   of  the  Lender   granting  the
participation  other than as  permitted  by Section  2.10  hereof or (D) release
any  Guarantor,  and  (vi) the sale of any  such  participations  which  require
Borrower to file a  registration  statement  with the United  States  Securities
and  Exchange  Commission  or under the  securities  regulations  or laws of any
state shall not be permitted.

         (h)      The  Borrower  may not assign any  rights,  powers,  duties or
obligations  under this Agreement or the other Loan Documents  without the prior
written consent of all of the Lenders.

    11.02 Notices. All  notices  shall be in  writing,  except as to  telephonic
notices  expressly  permitted or required  herein,  and written notices shall be
delivered by hand  delivery,  telefacsimile,  overnight  courier or certified or
registered  mail.  Any  notice  shall  be  conclusively   deemed  to  have  been
received by any party hereto and be  effective on the day on which  delivered to
such party (against  (except as to telephonic or  telefacsimile  notice) receipt
therefor  or, in the case of telex,  verification  by return) at the address set
forth  below or such  other  address as such  party  shall  specify to the other
parties in writing,  or if sent prepaid by certified or  registered  mail return
receipt  requested  on the third  Business  Day  after the day on which  mailed,
addressed to such party at said address:

                  (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 Administrative Agent:

                           NationsBank, National Association
                           NationsBank Plaza, NC 1002-06-19
                           6th Floor
                           Charlotte, North Carolina  28255
                           Attention:  Angela H. Berry, Agency Services
                           Telephone:  (704) 386-8958
                           Telefacsimile:  (704) 386-9923

                           with a copy to:
                           NationsBank, National Association
                           Corporate Banking
                           767 Fifth Avenue, 5th Floor
                           New York, New York 10153-0083
                           Attention:  Patricia G. McCormack
                           Telephone:  (212) 407-5373
                           Telefacsimile:  (212) 751-6909

                  (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.

   11.03 Setoff. The  Borrower  agrees that the  Administrative  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  Administrative  Agent  or  such  Lender  or  otherwise  in the
possession  or control of the  Administrative  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 Administrative  Agent or such Lender,  whether now existing or
hereafter  established,  hereby  authorizing the  Administrative  Agent and each
Lender  at any  time or  times  with or  without  prior  notice  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  Administrative  Agent or such Lender as soon as the same may
be put in transit to it by mail or carrier or by other bailee.

    11.04 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 of the  Obligations  remain  outstanding or any Lender has
any  commitment  hereunder.  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 this
Agreement,  the Notes and the other Loan  Documents  shall  inure to the benefit
of the successors and permitted assigns of the Lenders or any of them.

    11.05 Expenses. The  Borrower  agrees  (a)  except  as  otherwise  agreed in
writing,  to pay or reimburse the  Administrative  Agent for all its  reasonable
out-of-pocket  costs and  reasonable  expenses  incurred in connection  with the
preparation,  negotiation  and  execution of this  Agreement or any of the other
Loan Documents and the  consummation  of the  transactions  contemplated  hereby
and thereby,  and all such costs and expenses in connection  with any amendment,
supplement or  modification  to this Agreement or any other Loan  Document,  all
disbursements  of  counsel  to the  Administrative  Agent,  all  reasonable  due
diligence  expenses and syndication  expenses,  including,  without  limitation,
travel expenses of the  Administrative  Agent and its counsel in connection with
due diligence and syndication  member meetings and copying and binding  expenses
for syndication  members,  (b)to pay or reimburse the Administrative  Agent and
the Lenders for all their reasonable  costs and expenses  incurred in connection
with the  enforcement  or  preservation  of any rights under this  Agreement and
the other Loan  Documents,  including  without  limitation,  the reasonable fees
and  disbursements  of their  counsel  and any  payments in  indemnification  or
otherwise  payable by the Lenders to the  Administrative  Agent  pursuant to the
Loan  Documents  provided,  that in the  event the  Administrative  Agent or the
Lenders are  unsuccessful  in their efforts to preserve or enforce their rights,
they shall not be entitled to be  reimbursed  for the fees and expenses of their
counsel  incurred  in such  efforts,  and (c)to  pay,  and  indemnify  and hold
harmless the  Administrative  Agent and the Lenders from,  any and all recording
and filing fees and any and all  liabilities  with respect to, or resulting from
any  failure  on  the  part  of  the   Borrower  to  pay  or  delay  in  paying,
documentary,  stamp,  excise  and  other  similar  taxes,  if any,  which may be
payable or  determined  to be  payable  in  connection  with the  execution  and
delivery of this Agreement or any other Loan  Documents,  or consummation of any
amendment,  supplement or modification  of, or any waiver or consent under or in
respect of, this  Agreement or any other Loan  Documents.  All of the  foregoing
costs,   liabilities   and  expenses  will  be  paid  by  the  Borrower  to  the
Administrative  Agent  except to the extent such cost,  liability  or expense is
(i) found in a judgment by a court of competent  jurisdiction  to have  resulted
from  the  gross  negligence  or  willful   misconduct  of  the  party  claiming
reimbursement or  indemnification,  (ii) incurred or suffered in connection with
legal proceedings  commenced against  Administrative  Agent or any Lender by any
security  holder  or  creditor  thereof  arising  out of and based  upon  rights
afforded any such  security  holder or creditor  solely in its capacity as such,
or (iii)  incurred or suffered in connection  with legal  proceedings  commenced
against   or   disputes   between   Administrative   Agent  or  any   Lender  by
Administrative  Agent or any Lender,  unless such proceedings or disputes relate
directly to Borrower or  Borrower's  actions in connection  with this  Agreement
and  are  commenced   against  an  indemnified  party  solely  as  a  result  of
Administrative  Agent's  capacity  as  administrative  or  Administrative  Agent
hereunder.

    11.06 Amendments; Waivers.  No  amendment,  modification  or  waiver  of any
provision of this  Agreement or any of the Loan  Documents and no consent by the
Lenders to any  departure  therefrom by the Borrower  shall be effective  unless
such  amendment,  modification  or waiver  shall be in writing and signed by the
Borrower  and the  Administrative  Agent,  but only  upon  having  received  the
written  consent of the Required  Lenders,  and the same shall then be effective
only for the period and on the  conditions  and for the specific  instances  and
purposes  specified  in  such  writing;   provided,   however,   that,  no  such
amendment, modification or waiver

                  (i)      which,  whether by  amendment  or waiver of a Default
         or an Event of Default,  changes,  extends or waives any  provision  of
         Section  10.10 hereof or this Section  11.06,  decreases  the amount of
         or extends the due date of any  scheduled  installment  of or decreases
         the  rate  of  interest  or the  amount  of any  fee  payable  on or in
         connection  with any  Obligation,  changes the  definition  of Required
         Lenders,   permits  an  assignment  by  Borrower  of  its   Obligations
         hereunder,   reduces   the   required   consent  of  Lenders   provided
         hereunder,  extends the Revolving Credit  Termination Date or increases
         the Revolving Credit  Commitment or the Letter of Credit  Commitment of
         any Lender,  waives any  condition to the making of any Loan,  releases
         any  Guarantor or waives a Default or Event of Default  under  Section 
         9.01(g) or (h) hereof shall be  effective  unless in writing and signed
         by each of the Lenders; or

                  (ii)     which affects the rights,  privileges,  immunities or
         indemnities of the  Administrative  Agent shall be effective  unless in
         writing and signed by the Administrative Agent.

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 Administrative  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.   No  partial   exercise  by  the
Administrative  Agent or the Lenders of any rights or remedies  hereunder  shall
operate as a waiver of any other  rights or remedies  that may also be available
hereunder.

    11.07 Counterparts.  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.

   11.08 Termination.  The  termination of this  Agreement  shall not affect any
rights  of  the  Borrower,  the  Lenders  or  the  Administrative  Agent  or any
obligation of the Borrower,  the Lenders or the  Administrative  Agent,  arising
prior to the  effective  date of such  termination,  and the  provisions  hereof
shall  continue to be fully  operative  until all  transactions  entered into or
rights  created or  obligations  incurred  prior to such  termination  have been
fully  disposed of,  concluded or liquidated and the  Obligations  arising prior
to or after such  termination  have been  irrevocably  and finally paid in full.
The rights  granted to the  Administrative  Agent for the benefit of the Lenders
hereunder and under the other Loan  Documents  shall  continue in full force and
effect,  notwithstanding  the  termination of this  Agreement,  until all of the
Obligations  have  been  paid  in  full  after  the  termination  hereof  or the
Borrower  has  furnished  the  Lenders  and  the  Administrative  Agent  with an
indemnification  satisfactory to the  Administrative  Agent and each Lender with
respect  thereto.  All  representations,   warranties,  covenants,  waivers  and
agreements  contained herein shall survive  termination  hereof until payment in
full of the Obligations  unless otherwise provided herein.  Notwithstanding  the
foregoing,  if after  receipt of any payment  pursuant to the Loan  Documents of
all or any part of the  Obligations,  any 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,  this Agreement  shall continue in full force and
the  Borrower  shall be liable to pay,  and shall  indemnify  and hold  harmless
such  Lender  for,  the amount of such  payment  surrendered  until such  Lender
shall have been finally and  irrevocably  paid in full.  The  provisions  of the
foregoing  sentence shall be and remain effective  notwithstanding  any contrary
action which may have been taken by the Lenders in reliance  upon such  payment,
and any  such  contrary  action  so  taken  shall be  without  prejudice  to the
Lenders'  rights  under  this  Agreement  and  shall  be  deemed  to  have  been
conditioned upon such payment having become final and irrevocable.

   11.09 Governing  Law. All  documents  executed  pursuant to the  transactions
contemplated herein, including,  without limitation,  this Agreement and each of
the other Loan  Documents  shall be deemed to be contracts  made under,  and for
all purposes  shall be  construed  in  accordance  with,  the internal  laws and
judicial  decisions  of the State of New York.  The Borrower  hereby  submits to
the  jurisdiction  and venue of the state and federal courts of New York for the
purposes of resolving disputes hereunder or for the purposes of collection.

   11.10 Indemnification.  (a) In  consideration  of the  execution and delivery
of  this  Agreement  by  the  Administrative  Agent  and  each  Lender  and  the
extension  of  the  Letter  of  Credit  Commitments  and  the  Revolving  Credit
Commitments,  the Borrower  hereby  indemnifies,  exonerates  and holds free and
harmless the  Administrative  Agent and each Lender and each of their respective
officers,  directors,  employees  and  agents  (collectively,  the  "Indemnified
Parties")  from and  against  any and all  actions,  causes  of  action,  suits,
losses,  costs,  liabilities  and damages and  expenses  incurred in  connection
therewith   whatsoever  with  respect  to  or  arising  out  of  the  execution,
delivery,  enforcement  and  performance of this  Agreement,  the Notes,  or the
Guaranties  (irrespective  of whether any such  Indemnified  Party is a party to
the  action  for  which   indemnification   hereunder   is  sought),   including
attorneys'   fees   and    disbursements    (collectively,    the   "Indemnified
Liabilities")  incurred  by the  Indemnified  Parties or any of them as a result
of,  or  arising  out of,  or  relating  to any  transaction  financed  or to be
financed in whole or in part,  directly or indirectly,  with the proceeds of any
Loan or  supported  by any Letter of  Credit,  except to the extent (a) any such
Indemnified  Liabilities  arose  for the  account  of a  particular  Indemnified
Party  by  reason  of  the  gross  negligence  or  willful  misconduct  of  such
Indemnified  Party, (b) such  Indemnified  Liability is (i) incurred or suffered
in connection with legal  proceedings  commenced  against such Indemnified Party
by any  security  holder or  creditor  thereof  arising  out of and  based  upon
rights  afforded any such security  holder or creditor solely in its capacity as
such,  or (ii)  incurred  or  suffered  in  connection  with  legal  proceedings
commenced  against  or  disputes  between  any  Indemnified  Party by any  other
Indemnified  Party,  unless  such  proceedings  or disputes  relate  directly to
Borrower  or  Borrower's  actions  in  connection  with this  Agreement  and are
commenced  against  an  Indemnified  Party  solely  as a  result  of  any  other
Indemnified   Party's   capacity  as   administrative   or   syndication   agent
hereunder.  If  and  to  the  extent  that  the  foregoing  undertaking  may  be
unenforceable  for any reason,  the Borrower  hereby  agrees to make the maximum
contribution  to the  payment  and  satisfaction  of  each  of  the  Indemnified
Liabilities which is permissible under applicable law.

         (b)      If  a  claim   is  to  be  made   by  a  party   entitled   to
indemnification  under this  Section  11.10 or Section  7.14 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  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 provisions of this Section 
11.10  shall  survive  the  final  payment  in full of the  Obligations  and the
termination of this Agreement.
         
  11.11 Headings  and  References.  The  headings of the  Articles and Sections
of this  Agreement are inserted for  convenience  of reference  only and are not
intended  to be a part of, or to affect the  meaning or  interpretation  of this
Agreement.  Words such as "hereof",  "hereunder",  "herein" and words of similar
import shall refer to this  Agreement in its entirety and not to any  particular
Section or provisions  hereof,  unless so expressly  specified.  As used herein,
the singular  shall  include the plural,  and the  masculine  shall  include the
feminine or a neutral gender, and vice versa, whenever the context requires.

   11.12 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.

   11.13 Entire  Agreement.  This  Agreement  and  the  Schedules  and  Exhibits
hereto,   together  with  the  other  Loan  Documents,   constitute  the  entire
agreement  between the parties  with  respect to the subject  matter  hereof and
thereof and supersede  all previous  proposals,  negotiations,  representations,
commitments  and other  communications  between or among the parties,  both oral
and written, with respect thereto.

   11.14 Agreement  Controls.  In the  event  that  any  term of any of the Loan
Documents  other than this Agreement  conflicts with any term of this Agreement,
the terms and provisions of this Agreement shall control.

   11.15 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
New York  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,  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 and when the Loans made  hereunder  are repaid in
full the total  interest  due  hereunder  (taking  into  account the  limitation
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  Administrative  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 canceled  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  non-usurious  interest  rate than
applicable laws now allow.

    11.16 Waiver of Jury Trial. EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO
HEREBY  WAIVES  ANY  RIGHT  IT MAY  HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY
LITIGATION  DIRECTLY OR INDIRECTLY  ARISING OUT OF, UNDER OR IN CONNECTION  WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.

   11.17 Confidentiality.  (a) Except as  necessary  to  exercise  its rights or
perform its  obligations  under this Agreement or as permitted  pursuant to this
Section 11.17 or Section 7.01(e) hereof,  each Lender  (including,  for purposes
of this Section  11.17,  any  participant  thereof) shall never use or duplicate
any  Confidential   Information  and  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  to (i)those  directors,
officers,  employees,  agents,  accountants  and  attorneys of such Lender whose
knowledge is necessary to such  Lender's  performance  hereunder  provided  that
all  such  persons  shall  be  advised  of  their  obligations  to  protect  the
Borrower's  interests,  which  obligations  shall be  identical to those of such
Lender  under this  Agreement;  (ii)examiners  or  regulatory  agencies  having
supervisory  or  examination  authority  over  such  Lender in  accordance  with
customary banking  practices;  and (iii)any Person pursuant to the order of any
Governmental Authority or as otherwise required by law.

         (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.

         (c)      This Section 11.17 shall  indefinitely  survive the expiration
or earlier  termination  of this  Agreement,  or the  cessation  of any Lender's
status as a party hereto.

                        

         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:
Title: Chief Financial Officer


NATIONSBANK, NATIONAL
ASSOCIATION, as
Administrative Agent for
the Lenders


By:
Title: Senior Vice President


THE BANK OF NEW YORK, as
Documentation
Agent for the Lenders


By:
Title:

<PAGE>

NATIONSBANK, NATIONAL
ASSOCIATION


By:
Title:

Lending Office:

NationsBank, National
Association
Independence Center
NC1 001-15-04
Charlotte, North Carolina
28255
Attention: Dana
Weir
Agency
Services
Telephone: (704)
388-3917
Telefacsimile: (704)
386-9923

Wire Transfer
Instructions:
NationsBank, National
Association
ABA# 053000196
Reference: GTECH
Corporation
Account No.: 13662122506
Attention:
Commercial Loan
 
Operations


THE BANK OF NEW YORK


By:
Title: Assistant Vice
President

Lending Office:

1 Wall Street, 22 Floor
New York, New York 10286
Attention: G. Andrew
Keith
Telephone:
(212)
635-6864
Telefacsimile: (212)
635-6999

With a copy to:

1 Wall Street, 22 Floor
New York, New York 10286
Attention: Terry Blackburn
Telephone:
(212)
635-6787
Telefacsimile: (212)
635-6397/6426

Wire Transfer
Instructions:

The Bank of New York
ABA# 021000018
Reference: GTECH
Account No.: GLA/111556
Attention: Lorna Alleyne


BANK OF MONTREAL


By:
Title: Director

Lending Office:

Bank of Montreal
430 Park Avenue, 14th
Floor
New York, New York 10023
Attention: Lisa Megeaski
Telephone:
(212)
605-1441
Telefacsimile: (212)
605-1454

With a copy to:

Bank of Montreal
430 Park Avenue, 8th Floor
New York, New York 10023
Attention: John Moncavage
Telephone:
(212)
605-1681
Telefacsimile: (212)
605-1618

Wire Transfer
Instructions:

Harris Trust & Savings
Bank
115 South LaSalle
Chicago, Illinois 60603
ABA# 071000288
Reference: Bank of
Montreal, Chicago
Account No.: 1248566


BANQUE PARIBAS


By:
Title: Assistant Vice
President



By:
Title: Vice President


Lending Office:

787 Seventh Avenue
New York, New York 10019
Attention: Terri Knuth
Telephone:
(212)
841-2229
Telefacsimile: (212)
841-2217

With a copy to:

787 Seventh Avenue
New York, New York 10019
Attention: Roseann Burke
Telephone:
(212)
841-2091
Telefacsimile: (212)
841-2333

Wire Transfer
Instructions:

Bankers Trust New York
 
________________________________
ABA# 021-001-033
Reference: G Tech
Corporation
Account No.:
04-202-195/Banque
Paribas NY
Attention: Loan Servicing
Dept.


FLEET NATIONAL BANK


By:
Title: Vice President

Lending Office:

111 Westminster Street
Providence, Rhode Island
02903
Attention: John D. Webb
Telephone:
(401)
278-6486
Telefacsimile: (401)
278-5726

With a copy to:

Hinckley Allen & Snyder
1500 Fleet Center
Providence, Rhode Island
02903
Attention: Joe Curran,
Esq.
Telephone:
(401)
274-2000
Telefacsimile: (401)
277-9600

Wire Transfer
Instructions:

Fleet National Bank
ABA# 011500010
Reference: GTECH
Attention: Grace Bento,
Ext. 3447



THE BANK OF NOVA SCOTIA


By:
Title:

Lending Office:

Boston Branch
101 Federal Street
Boston, Massachusetts
02110
Attention: Michael R.
Bradley
Telephone:
(617)
737-6312
Telefacsimile: (617)
951-2177

With a copy to:

Funding Office
Atlanta Agency
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attention: Ms. Dana Hall
Telephone:
(404)
877-1553
Telefacsimile: (404)
888-8998

Wire Transfer
Instructions:

The Bank of Nova Scotia
New York Agency
ABA# 0260-0253-2
Reference: GTECH
Account No.: BNS-Boston
#6091137



BANKBOSTON, N.A.


By:
Title:

Lending Office:

BankBoston, N.A.
100 Federal Street
01-15-02
Boston, Massachusetts
02110
Attention: Carol A. Lovell
Telephone:
(617)
434-1475
Telefacsimile: (617)
434-0637

With a copy to:

BankBoston, N.A.
100 Federal Street
01-15-02
Boston, Massachusetts
02110
Attention: Nancy E. Bolton
Telephone:
(617)
434-3431
Telefacsimile: (617)
434-0637

Wire Transfer
Instructions:

BankBoston, N.A.
100 Federal Street
Boston, Massachusetts
02110
ABA# 011-000-390
Reference: GTECH Corp.
Account No.: Angela
Moore, Commercial
Attention: Loan Services



BANK OF TOKYO-MITSUBISHI
TRUST COMPANY


By:
Title:

Lending Office:

Bank of Tokyo-Mitsubishi
Trust Company
1251 Avenue of the
Americas
New York, New York
10116-3138
Attention: Loan
Operations Dept.
Telephone:
(201)
413-8570
Telefacsimile: (201)
413-8225

With a copy to:

Bank of Tokyo-Mitsubishi
Trust Company
125 Summer Street, Suite
1170
Boston, Massachusetts
02110
Attention: Patrick D.
Bonebrake
Telephone:
(617)
330-7437
Telefacsimile: (617)
330-7422

Wire Transfer
Instructions:

Bank of Tokyo-Mitsubishi
Trust Company
New York, New York
ABA# 026-009687
Reference: GTECH
Account No.: 97770477
Attention: Loan
Operations Dept.


CREDIT LYONNAIS NEW YORK
BRANCH


By:
Title:

Lending Office:

Credit Lyonnais
1301 Avenue of the
Americas
10th Floor
New York, New York 10019
Attention: Heidi Rosen
Telephone:
(212)
261-7241
Telefacsimile: (212)
459-3179

Wire Transfer
Instructions:

Credit Lyonnais New York
Branch
F/D Credit Lyonnais*
ABA# 026-008-073
Reference: GTECH
Account No.: N/A
Attention: Loan Servicing

 


MELLON BANK, N.A.


By:
Title: First Vice
President

Lending Office:

One Boston Place, 6th
Floor
Boston, Massachusetts
02108
Attention: Steve Wagner
Telephone:
(617)
722-7064
Telefacsimile: (617)
722-3516

Wire Transfer
Instructions:

Mellon Bank Pittsburgh,
P.A.
ABA# 0430061
Account No.: 990873800
Reference: GTECH
Corporation
 
Attention:______________________


COMMERZBANK AG, NEW YORK
BRANCH


By:
Title:

Lending Office:

Telephone:
Telefacsimile:

Wire Transfer
Instructions:

ABA#
Account No.:
Reference:
Attention:

<PAGE>

                                       EXHIBIT A

                             Revolving Credit Commitments


Lender                               Revolving Credit Commitment

NationsBank, N.A.                         $65,600,000

The Bank of New York                      $48,000,000

Bank of Montreal                          $38,400,000

Banque Paribas                            $38,400,000

Fleet National Bank                       $38,400,000

The Bank of Nova Scotia                   $38,400,000

BankBoston, N.A.                          $38,400,000

Bank of Tokyo-Mitsubishi Trust Company    $28,000,000

Credit Lyonnais                           $28,000,000

Mellon Bank, N.A.                         $19,200,000

Commerzbank AG, New York Branch           $19,200,000

     Total Revolving Credit Commitment    $400,000,000

<PAGE>
                                  EXHIBIT B

                        Form of Assignment and Acceptance

                                DATED                , 19    

         Reference is made to the Amended and Restated  Credit  Agreement  dated
as of June 18,  1997 (as  amended  or  supplemented  and in effect  from time to
time, the "Agreement")  among GTECH  Corporation (the  "Borrower"),  the Lenders
(as  defined  in the  Agreement),  the  Documentation  Agent (as  defined in the
Agreement),  the  Co-Agents  (as  defined  in the  Agreement)  and  NationsBank,
National Association,  as Administrative Agent for the Lenders  ("Administrative
Agent").  Unless  otherwise  defined herein,  terms defined in the Agreement are
used herein with the same meanings.

________________________ (the "Assignor") and ____________________________
(the "Assignee") agree as follows:


         1. The Assignor hereby sells  and  assigns  to  the  Assignee,
WITHOUT  RECOURSE,  and the  Assignee  hereby  purchases  and  assumes  from the
Assignor,  a  _______%(specify percentage in not less than 9 decimal points)
interest  in and to all of the  Assignor's  rights and
obligations  under  the  Agreement  and  the  other  Loan  Documents  as of  the
Effective  Date  (as  defined  below),  including,   without  limitation,   such
percentage  interest  in the Loans  owing to,  and  Participations  held by, the
Assignor on the Effective Date, and the Notes held by the Assignor.

         2.       The  Assignor (i)  represents  and  warrants  that,  as of the
date hereof, the aggregate  outstanding  principal amounts of the Loans owing to
it  (without  giving  effect to  assignments  thereof  which have not yet become
effective)  are  as  follows:  $_____________  of  Revolving  Credit  Loans  and
$_________ of Competitive Bid Loans;  the aggregate  principal amount of Letters
of Credit in which it is deemed to have a  Participation  under the Agreement is
$________;  and the aggregate  principal  amount of Swing Line Loans in which it
is deemed  to have a  Participation  under the  Agreement  is  $_________;  (ii)
represents  and  warrants  that it is the  legal  and  beneficial  owner  of the
interests  being  assigned by it hereunder and that such  interests are free and
clear of any adverse  claim;  (iii)  makes no  representation  or  warranty  and
assumes  no  responsibility  with  respect  to  any  statements,  warranties  or
representations  made  in or in  connection  with  the  Agreement  or any of the
other Loan  Documents or any other  instrument  or document  furnished  pursuant
thereto,  or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of the  Agreement  or any of the other Loan  Documents  or
any other  instrument  or document  furnished  pursuant  thereto;  (iv) makes no
representation  or warranty  and assumes no  responsibility  with respect to the
financial  condition of the  Borrower or any  Guarantor  or the  performance  or
observance  by the  Borrower or any  Guarantor of any of its  obligations  under
the  Agreement  or any of the other Loan  Documents or any other  instrument  or
document  furnished  pursuant  thereto and (v) attaches the Notes referred to in
paragraph 1 above (other than any  Competitive  Bid Note) and requests  that the
Administrative  Agent exchange such Notes for (or issue an additional  Note with
respect  to any  Competitive  Bid Loan) (A) new  Revolving  Credit  Notes  dated
_____________,  19__ as  follows:  a  Revolving  Credit  Note  in the  principal
amount  of  $________________  payable  to  the  order  of the  Assignor,  and a
Revolving  Credit Note in the principal amount of  $________________  payable to
the order of the Assignee;  and (B) new  Competitive  Bid Notes dated  ________,
19__ as follows: a Competitive Bid Note payable to the order of the Assignee.

         3.       The  Assignee  (i)  confirms  that it has  received  a copy of
the Agreement,  together with copies of the financial  statements referred to in
Section 6.01(e) and delivered  pursuant to Section 7.01 thereof,  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;  (ii)
agrees   that  it   will,   independently   and   without   reliance   upon  the
Administrative  Agent,  the  Assignor,  or any  other  Lender  and based on such
documents and  information as it shall deem  appropriate  at the time,  continue
to make its own  credit  decisions  in taking  or not  taking  action  under the
Agreement;  (iii) appoints and authorizes the Administrative  Agent to take such
actions on its behalf and to exercise  such powers  under the Loan  Documents as
are delegated to the  Administrative  Agent by the terms thereof,  together with
such  powers as are  reasonably  incidental  thereto;  (iv)  agrees that it will
perform in  accordance  with  their  terms all of the  obligations  which by the
terms of the Agreement  are required to be performed by it as a Lender;  and (v)
specifies  as its address  for notices the office set forth  beneath its name on
the signature pages hereof.

         4.       The effective date for this  Assignment  and Acceptance  shall
be   _____________________________   (the  "Effective   Date").   Following  the
execution  of this  Assignment  and  Acceptance  and the consent  thereto by the
Borrower,  it will be delivered to the  Administrative  Agent for acceptance and
recording by the Administrative Agent.

         5.       Upon  such  acceptance  and  recording,  as of  the  Effective
Date,  (i) the  Assignee  shall be a party to the  Agreement  and, to the extent
provided in this Assignment and  Acceptance,  have the rights and obligations of
a Lender  thereunder  and under the other Loan  Documents  and (ii) the Assignor
shall,  to the extent  provided in this  Assignment and  Acceptance,  relinquish
its rights and be released  from its  obligations  under the  Agreement  and the
other Loan Documents.

         6.       Upon  such  acceptance  and  recording,  from  and  after  the
Effective  Date,  the  Administrative  Agent shall make all  payments  under the
Agreement  and Notes in  respect of the  interest  assigned  hereby  (including,
without  limitation,  all payments of principal,  interest,  commitment fees and
letter of credit fees with respect  thereto) to the  Assignee.  The Assignor and
Assignee  shall  make  all   appropriate   adjustments  in  payments  under  the
Agreement  and the  Notes  for  periods  prior to the  Effective  Date  directly
between themselves.

         7.       This  Assignment  and  Acceptance  shall  be  governed  by and
construed in accordance with, the laws of the State of New York.

[NAME OF ASSIGNOR]

By:
Name:
Title:

Notice Address:
After the Effective Date:
Outstanding Revolving Credit Loans:$________________
Outstanding Competitive Bid Loans: $________________
Outstanding Participation in
Letters of Credit Outstanding:$___________________
Outstanding Participations in
Swing Line Loans: $________________


[NAME OF ASSIGNEE]

By:
Name:
Title:

Notice Address/Lending Office
Wire transfer Instructions:
After the Effective Date:
Outstanding Revolving Credit Loans:$______________
Outstanding Competitive Bid Loans: $________________
Outstanding Participation in
Letters of Credit Outstanding:$________________
Outstanding Participations in
Swing Line Loans:$________________

Accepted this ____ day of _______, 19___

NATIONSBANK, NATIONAL
ASSOCIATION, as Administrative
Agent

By:
Name:
Title:

Consented to:

GTECH CORPORATION


By:                                                  
Name:                                          
Title:                                         
<PAGE>

                                     EXHIBIT C

                     Notice of Appointment (or Revocation) of Authorized
                                     Representative

         Reference is hereby made to the Amended and Restated  Credit  Agreement
dated as of June 18,  1997 (as amended or  supplemented  and in effect from time
to  time,  the  "Agreement")  among  GTECH  Corporation  (the  "Borrower"),  the
Lenders (as defined in the Agreement),  the  Documentation  Agent (as defined in
the  Agreement),  the Co-Agents (as defined in the Agreement)  and  NationsBank,
National Association,  as Administrative Agent for the Lenders  ("Administrative
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

       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),  and (ii)
each  such  individual  has  been  duly  authorized  by the  Borrower  to act as
Authorized  Representative  under the Loan Documents for the limited purposes of
giving telephone instructions with respect to rates and Interest Periods.

         Name and Address               Office

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

         This the ___ day of __________________, 19__.

GTECH CORPORATION
By:
Name:
Title:
<PAGE>
                                 EXHIBIT D

                  Form of Borrowing Notice--Revolving Credit Loans
                               and Swing Line Loans

To:      NationsBank, National Association,
            as Administrative Agent
         Independence Center
         Charlotte, North Carolina 28255
         Telephone: (704) 388-3917
         Telefacsimile:  (704) 386-9923
         Attention: Dana Weir, Agency Services

         Reference is hereby made to the Amended and Restated  Credit  Agreement
dated as of June 18,  1997 (as amended or  supplemented  and in effect from time
to  time,  the  "Agreement")  among  GTECH  Corporation  (the  "Borrower"),  the
Lenders (as defined in the Agreement),  the  Documentation  Agent (as defined in
the  Agreement),  the Co-Agents (as defined in the Agreement)  and  NationsBank,
National Association,  as Administrative Agent for the Lenders  ("Administrative
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  confirms
its prior notice of  borrowing  given to the  Administrative  Agent by telephone
at __________  __.m. on  ____________,  19__ to the effect that Revolving Credit
Loans or Swing  Line  Loans of the type and  amount  set forth  below be made on
the date indicated:

Type of Loan             Interest               Aggregate      
                          Date of               Interest
(check one)              Period(1)              Amount(2)
                           Loan(3)               Rate(4)

Base
Rate Loan

LIBOR Loan

Swing Line
 Loan

(1)      For any  LIBOR  Loan  only,  one,  two,  three,  six or (to the  extent
         available) twelve months.

(2)      Must be  $5,000,000  or an  integral  multiple  of  $100,000  in excess
         thereof for  Revolving  Credit  Loans;  must be $500,000 or an integral
         multiple of $100,000 in excess thereof for Swing Line Loans.

(3)      At least three (3) LIBOR  Business  Days later if a LIBOR Loan;  may be
         same Business Day in case of a Base Rate Loan or Swing Line Loans.

(4)      For Swing Line Loans only, the Swing Line Rate.

         The Borrower  hereby  requests  that the  proceeds of Revolving  Credit
Loans or 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  exists  either now or after
giving effect to the borrowing described herein; and

         2.       All  the   representations   and   warranties   set  forth  in
Article VI of the Agreement  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
Section  6.01(d)  and (e) of the  Agreement  shall be deemed to include and take
into account any merger or  consolidation  permitted  under  Section 8.09 of the
Agreement and the reference to the  financial  statements in Section  6.01(f)(i)
of the Agreement are to those financial  statements  most recently  delivered to
you pursuant to Section 7.01 of the Agreement; and

         3.       After  giving  effect  to  Loans  requested  hereby,  (i)  the
Outstandings  will not exceed the Total  Revolving  Credit  Commitment  and (ii)
Swing Line Outstandings will not exceed $25,000,000.

GTECH CORPORATION


BY:_________________________
Authorized Representative
<PAGE>

                                 EXHIBIT E

                          Form of Competitive Bid Note

                                 PROMISSORY NOTE
                                (Competitive Bid)
                                                      Charlotte, North Carolina
                                                               __________, 1997

         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
___________________________________  (insert name of Lender)  (the   "Lender"),
in  its  individual
capacity,   at   the   office   of   NationsBank,   National   Association,   as
Administrative  Agent for the Lender (the  "Administrative  Agent"),  located at
Independence  Center,  15th Floor,  Charlotte,  North Carolina 28255 (or at such
other place as the  Administrative  Agent may  designate) at the times set forth
in the Amended and Restated  Credit  Agreement dated of even date herewith among
the  Borrower,  the financial  institutions  party  thereto  (collectively,  the
"Lenders"),  the  Documentation  Agent (as defined  therein),  the Co-Agents (as
defined therein) and the  Administrative  Agent (as amended and supplemented and
in effect from time to time, the "Credit  Agreement";  all capitalized terms not
otherwise  defined  herein shall have the  respective  meanings set forth in the
Credit  Agreement),  in lawful  money of the  United  States of  America  and in
immediately  available  funds,  the  aggregate  unpaid  principal  amount of all
Competitive  Bid Loans made by the Lender to the  Borrower,  on the dates and in
the principal  amounts set forth in the Lender's  related  Competitive Bid Quote
and  accepted  by the  Borrower,  and to pay  interest  on the unpaid  principal
amount of each such  Competitive  Bid Loan,  at such  office,  in like money and
funds,  for the  period  commencing  on the  date of such  Competitive  Bid Loan
until such  Competitive  Bid Loan shall be paid in full,  at the rates per annum
and on the dates set forth in the  Lender's  related  Competitive  Bid Quote and
accepted by the Borrower.

         The date,  amount,  interest rate and maturity date of each Competitive
Bid Loan made by the Lender to the  Borrower,  and each  payment made on account
of the  principal  thereof,  shall be  recorded  by the Lender on its books and,
prior to any  transfer  of this Note,  endorsed  by the  Lender on the  schedule
attached hereto or any  continuation  thereof,  provided that the failure of the
Lender  to make any  such  recordation  or  endorsement  shall  not  affect  the
obligations  of the  Borrower  to make a payment  when due of any  amount  owing
under the Credit  Agreement  or  hereunder  in respect  of the  Competitive  Bid
Loans made by the Lender.

         This  Note  is one of the  Competitive  Bid  Notes  referred  to in the
Credit  Agreement and is issued in  replacement  of and not as payment for those
certain  competitive  bid notes  issued by the Borrower in  connection  with the
Prior  Credit  Agreement.  This Note is issued  pursuant to and  entitled to the
benefits  and  security of the Credit  Agreement  to which  reference  is hereby
made for a more complete  statement of the terms and  conditions  upon which the
Competitive  Bid  Loans  evidenced  hereby  were  made or are made and are to be
repaid.   This  Note  is  subject  to  certain   restrictions   on  transfer  or
assignment  as  provided  in the Credit  Agreement.  Payment of all  amounts due
under this Note is guaranteed by each Guarantor pursuant to the Guaranties.

         The Credit  Agreement  provides for the acceleration of the maturity of
this  Note  upon  the  occurrence  of  certain  events  and for  prepayments  of
Competitive Bid Loans upon the terms and conditions specified therein.

         If payment of all sums due  hereunder  is  accelerated  under the terms
of the  Credit  Agreement  or  under  the  terms  of the  other  Loan  Documents
executed in connection with the Credit Agreement,  the then remaining  principal
amount and  accrued  but unpaid  interest  shall bear  interest  which  shall be
payable  on demand at the rates per annum set forth in  Article II of the Credit
Agreement,  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  presentment,
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  on the basis of a 360 day year
for the actual number of days in the interest period.

         Except as  permitted  by Section  11.01 of the Credit  Agreement,  this
Note may not be assigned by the Lender to any other Person.

         This Note shall be governed by, and construed in accordance  with,  the
law 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 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  issues  against any other of
them and  returned  satisfied  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.  Presentment,  protest,  notice of  protest,  notice of  dishonor,
diligence  and each other  formality  are  hereby  waived by all  parties  bound
hereon.
         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

ATTEST: By:
Name:
By:____________________________
Title:
__________ Secretary

[SEAL]


                        SCHEDULE OF COMPETITIVE BID LOANS

         This   Note   evidences   Competitive   Bid   Loans   made   under  the
within-described  Credit  Agreement  to  the  Borrower,  on  the  dates,  in the
principal amounts,  of the types,  bearing interest at the rates and maturing on
the  dates  set  forth  below,  subject  to  the  payments  and  prepayments  of
principal set forth below:

<TABLE>

<CAPTION>
     <S>          <C>             <C>         <C>           <C>            <C>           <C>            <C>
 
     Date         Principal       Type        Interest      Maturity        Amount        Unpaid        Notation
      of            Amount         of           Rate         Date of       Paid or       Principal       Made By 
     Loan             of          Loan                         Loan        Prepaid         Amount 
                     Loan 
 
</TABLE>

<PAGE>

                                 EXHIBIT F

                        Form of Revolving Credit Note

                               PROMISSORY NOTE
                              (Revolving Credit)
_____________________1                               Charlotte, North Carolina
                                                               __________, 1997


         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
___________________________________2   (the   "Lender"),   in   its   individual
capacity,   at   the   office   of   NationsBank,   National   Association,   as
Administrative  Agent for the Lender (the  "Administrative  Agent"),  located at
NationsBank,  N.A.  Plaza,  101 South Tryon Street,  Charlotte,  North  Carolina
28255 (or at such other  place as the  Administrative  Agent may  designate)  at
the times set forth in the Amended and Restated  Credit  Agreement dated of even
date herewith  among the  Borrower,  the  financial  institutions  party thereto
(collectively,  the "Lenders"),  the  Documentation  Agent (as defined therein),
the  Co-Agents  (as defined  therein) and the  Administrative  Agent (as amended
and  supplemented and in effect from time to time, the "Credit  Agreement";  all
capitalized  terms  not  otherwise  defined  herein  shall  have the  respective
meanings  set forth in the  Credit  Agreement),  in lawful  money of the  United
States of America,  in  immediately  available  funds,  the principal  amount of
[__________________________________]3  DOLLARS  ($__________)1  or, if less than
such principal  amount,  the aggregate  unpaid principal amount of all Revolving
Credit  Loans  made  by  the  Lender  to the  Borrower  pursuant  to the  Credit
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  Article  II of the  Credit  Agreement.  All or any  portion of the
principal  amount of  Revolving  Credit  Loans may be prepaid as provided in the
Credit Agreement.

_______________________________

1        Insert Lender's Revolving Credit Commitment in arabic numerals.

2        Insert name of Lender in capital letters.

3        Insert Lender's Revolving Credit Commitment in words.


         This  Note  is one of  the  Revolving  Credit  Notes  in the  aggregate
principal  amount of  $400,000,000  referred to in the Credit  Agreement  and is
issued in replacement of and not as payment for those certain  revolving  credit
notes issued by the  Borrower in  connection  with the Prior  Credit  Agreement.
This Note is issued  pursuant to and  entitled to the  benefits  and security of
the Credit  Agreement  to which  reference  is hereby  made for a more  complete
statement  of the terms and  conditions  upon which the 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 Credit  Agreement.
Payment of all  amounts  due under  this Note is  guaranteed  by each  Guarantor
pursuant to the Guaranties.

         The Credit  Agreement  provides for the acceleration of the maturity of
this  Note  upon  the  occurrence  of  certain  events  and for  prepayments  of
Revolving Credit Loans upon the terms and conditions specified therein.

         If payment of all sums due  hereunder  is  accelerated  under the terms
of the  Credit  Agreement  or  under  the  terms  of the  other  Loan  Documents
executed in connection with the Credit Agreement,  the then remaining  principal
amount and  accrued  but unpaid  interest  shall bear  interest  which  shall be
payable  on demand at the rates per annum set forth in  Article II of the Credit
Agreement,  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  presentment,
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.

         Except as  permitted  by Section  11.01 of the Credit  Agreement,  this
Note may not be assigned by the Lender to any other Person.

         This Note shall be governed by, and construed in accordance  with,  the
law 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 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  issues  against any other of
them and  returned  satisfied  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.  Presentment,  protest,  notice of  protest,  notice of  dishonor,
diligence  and each other  formality  are  hereby  waived by all  parties  bound
hereon.

         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

ATTEST:

By:
Secretary 
Title:

[SEAL]

<PAGE>
                                  EXHIBIT G

                             Form of Swing Line Note

                               PROMISSORY NOTE
                                 (Swing Line)
$25,000,000                                          Charlotte, North Carolina
                                                               __________, 1997


         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  NATIONSBANK,  NATIONAL
ASSOCIATION,  (the  "Lender"),  in its  individual  capacity,  at the  office of
NationsBank,  National Association,  as Administrative Agent for the Lender (the
"Administrative  Agent"),  located at NationsBank  Corporate  Center,  100 North
Tryon Street,  Charlotte,  North  Carolina  28255 (or at such other place as the
Administrative  Agent may  designate)  at the times set forth in the Amended and
Restated Credit  Agreement  dated of even date herewith among the Borrower,  the
financial  institutions  party  thereto  (collectively,   the  "Lenders"),   the
Documentation  Agent (as defined  therein),  the Co-Agents (as defined  therein)
and the  Administrative  Agent (as amended and  supplemented  and in effect from
time to time,  the  "Credit  Agreement";  all  capitalized  terms not  otherwise
defined  herein  shall  have the  respective  meanings  set forth in the  Credit
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 the  Lender to the
Borrower  pursuant to the Credit  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 Article II of the Credit  Agreement.
All or any  portion of the  principal  amount of Swing Line Loans may be prepaid
as provided in the Credit Agreement.

         This Note is the Swing Line Note  referred  to in the Credit  Agreement
and is issued  in  replacement  of and not as  payment  for the swing  line note
issued by the  Borrower in  connection  with the Prior  Credit  Agreement.  This
Note is issued  pursuant to and  entitled to the  benefits  and  security of the
Credit  Agreement  to  which  reference  is  hereby  made  for a  more  complete
statement  of the terms and  conditions  upon which the 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 Credit  Agreement.
Payment of all  amounts  due under  this Note is  guaranteed  by each  Guarantor
pursuant to the Guaranties.

         If payment of all sums due  hereunder  is  accelerated  under the terms
of the  Credit  Agreement  or  under  the  terms  of the  other  Loan  Documents
executed in connection with the Credit Agreement,  the then remaining  principal
amount and  accrued  but unpaid  interest  shall bear  interest  which  shall be
payable  on demand at the rates per annum set forth in  Article II of the Credit
Agreement,  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  presentment,
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  on the basis of a 365 day year
for the actual number of days in the interest period.

         Except as  permitted  by Section  11.01 of the Credit  Agreement,  this
Note may not be assigned by the Lender to any other Person.

         This Note shall be governed by, and construed in accordance  with,  the
law 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 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  issues  against any other of
them and  returned  satisfied  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.  Presentment,  protest,  notice of  protest,  notice of  dishonor,
diligence  and each other  formality  are  hereby  waived by all  parties  bound
hereon.

         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

ATTEST:

By:
Secretary Title:
[SEAL]

<PAGE>

                                     EXHIBIT H

                           Interest Rate Selection Notice

To:      NationsBank, National Association,
            as Administrative Agent
         Independence Center
         Charlotte, North Carolina 28255
         Telephone: (704) 388-3917
         Telefacsimile:  (704) 386-9923
         Attention: Dana Weir, Agency Services


         Reference is hereby made to the Amended and Restated  Credit  Agreement
dated as of June 18,  1997 (as amended or  supplemented  and in effect from time
to time, the "Credit  Agreement") among GTECH Corporation (the "Borrower"),  the
Lenders  (as  defined  in the Credit  Agreement),  the  Documentation  Agent (as
defined  in the  Credit  Agreement),  the  Co-Agents  (as  defined in the Credit
Agreement) and NationsBank,  National  Association,  as Administrative Agent for
the Lenders  ("Administrative  Agent").  Capitalized  terms used but not defined
herein  shall  have the  respective  meanings  therefor  set forth in the Credit
Agreement.

         The Borrower  through its  Authorized  Representative  hereby  confirms
its prior notice of a selection  of a type of Loan and Interest  Period given to
the    Administrative    Agent   by   telephone   at    __________    __.m.   on
_________________,  199__ to the  following  effect  in  respect  of  [check  as
applicable] Revolving Credit Loans:

         Type of Loan               Interest                        Effective
         (Check One)                Period (1)       Amount(2)       Date (3) 


         LIBOR Loan   _____

         BASE
         RATE Loan    _____

               
         (1)      For any LIBOR  Loan one,  two,  three,  six or (to the  extent
                  available) twelve months.

         (2)      Must be  $5,000,000  or an  integral  multiple  of $100,000 in
                  excess thereof.

         (3)      At  least  three  (3)  LIBOR   Business  Days  after  date  of
                  telephonic  notice if a LIBOR Loan;  may be same  Business Day
                  in case of a Base Rate Loan.


         This the _____ day of ______________, 199__.




GTECH CORPORATION


By:
Authorized Representative

<PAGE>

                                      EXHIBIT I

                        Form of Competitive Bid Quote Request

                                       [Date]

To:                        NationsBank,       National      Association,      as
                           Administrative Agent

Attention:                 Dana Weir, Agency Services
                           Telephone: (704) 388-3917
                           Telefacsimile:  (704) 386-9923

Re:                        [Absolute Rate] [Index Rate] Bid Loan Request

         Pursuant to Section 2.03 of the Amended and Restated  Credit  Agreement
dated as of June 18,  1997 (as amended or  supplemented  and in effect from time
to time,  the "Credit  Agreement"  among GTECH  Corporation,  the lenders  named
therein,  the  Documentation  Agent (as  defined in the Credit  Agreement),  the
Co-Agents  (as  defined  in the  Credit  Agreement)  and  NationsBank,  National
Association,  as  Administrative  Agent,  we hereby  give notice that we request
Competitive  Bid Quotes  for the  following  proposed  Competitive  Bid  Loan(s)
bearing interest at an [Absolute Rate] [Index Rate] :

Borrowing                  Quotation                      Interest
    Date                     Date   1     Amount  2      Period 3



         Terms used  herein  have the  meanings  assigned  to them in the Credit
Agreement.


GTECH Corporation


By:
Title: Vice President and Treasurer


_________________________________________

         1 For  use if an  Absolute  Rate  or  Index  Rate  is  requested  to be
submitted before the borrowing date.

         2 Each amount must be  $5,000,000  or an integral  multiple of $100,000
in excess thereof.

         3 A period  of not less  than 7 days nor more  than 360 days  after the
making of such  Competitive  Bid Loan and ending on a Business  Day with respect
to Absolute Rate Bid Loan Requests or a period of one,  two,  three,  six or (to
the extent  available)  twelve months after the making of such  Competitive  Bid
Loan and  ending on a LIBOR  Business  Day with  respect  to Index Rate Bid Loan
Requests.

<PAGE>

                                   EXHIBIT J

                           Form of Competitive Bid Quote

To:               NationsBank, National Association, as Administrative Agent

Attention:        Dana Weir, Agency Services
                  Telephone: (704) 388-3917
                  Telefacsimile:  (704) 386-9923

Re:               Competitive Bid Quote to GTECH Corporation (the "Borrower")

         The  Competitive  Bid Quote is given in accordance with Section 2.03 of
the  Amended  and  Restated  Credit  Agreement  dated  as of June  18,  1997 (as
amended  or  supplemented   and  in  effect  from  time  to  time,  the  "Credit
Agreement")   among  GTECH   Corporation,   the  lenders  named   therein,   the
Documentation  Agent (as defined in the Credit  Agreement),  the  Co-Agents  (as
defined in the Credit  Agreement)  and  NationsBank,  National  Association,  as
Administrative  Agent.  Terms  defined in the Credit  Agreement  are used herein
as defined therein.

         In response to the Borrower's request dated  ______________,  199__, we
hereby make the following Competitive Bid Quote(s) on the following terms:

                  1.       Quoting Bank:

                  2.       Person to contact at Quoting Bank:

                  3.       We hereby  offer to make  Competitive  Bid Loan(s) in
         the  following   principal   amount(s),   for  the  following  Interest
         Period(s) and at the following rate(s):

Borrowing          Quotation               Interest
  Date             Date   1     Amount2    Period 3               Rate4


______________________________

         1  As specified in the related Competitive Bid Quote Request

         2 The  principal  amount  bid for each  Interest  Period may not exceed
the principal  amount  requested.  Bids must be made for at least  $1,000,000 or
an integral multiple of $100,000 in excess thereof.

         3 A period  of not less  than 7 days nor more  than 360 days  after the
making of such  Competitive  Bid Loan and ending on a Business  Day with respect
to Absolute Rate  Competitive Bid Quotes or a period of one, two, three,  six or
(to the extent  available)  twelve  months after the making of such  Competitive
Bid  Loan  and  ending  on a LIBOR  Business  Day with  respect  to  Index  Rate
Competitive  Bid  Quotes,  as  specified  in the related  Competitive  Bid Quote
Request.

         4  Specify rate of interest or margin.

         We understand  and agree that the offer(s) set forth above,  subject to
the  satisfaction  of  the  applicable   conditions  set  forth  in  the  Credit
Agreement,  irrevocably  obligate(s) us to make the  Competitive Bid Loan(s) for
which any offer(s) (is/are) accepted, in whole or in part.


Dated: ______________, 199_

Very truly yours,

[NAME OF LENDER]


By:
Authorized Officer

<PAGE>

                                       EXHIBIT K-1

                               Form of Opinion of Counsel to the
                           Borrower and Counsel to the Guarantors




                      [Stationery of Counsel for Borrower and Guarantor]



                                                  __________, 1997



Each of the Lenders party to the
  Credit Agreement referenced below and
  NationsBank, National Association, as Administrative Agent
Independence Center, 15th Floor
Charlotte, North Carolina 28255

Re:      $400,000,000  Revolving Credit, Swing Line,  Competitive Bid and Letter
         of Credit Facilities to GTECH Corporation

Ladies and Gentlemen:

         We have acted as counsel to GTECH  Corporation (the  "Company"),  GTECH
Holdings  Corporation  (the  "Parent")  and the other  Guarantors  in connection
with each of the revolving  credit  facility,  swing line facility,  competitive
bid  facility  and  letter  of  credit  facility   (collectively,   the  "Credit
Facilities")  being  made  available  by you to the  Company on this date in the
maximum  aggregate  principal  amount at any time  outstanding  of  $400,000,000
pursuant to the Amended and  Restated  Credit  Agreement  of even date  herewith
between you, the  Documentation  Agent (as defined  therein),  the Co-Agents (as
defined therein) and the Company (the "Credit Agreement").

         We have been  requested  by the Company to deliver this opinion to each
of  the  Lenders  party  to  the  Credit  Agreement  and  NationsBank,  National
Association,  as  Administrative  Agent,  in  accordance  with the condition set
forth in Section  5.01(c) of the Credit  Agreement.  All  capitalized  terms not
otherwise  defined  herein  shall have the  meanings  provided  therefor  in the
Credit Agreement.

         We  have  also  acted  as  counsel  to the  Parent  and  each  Material
Domestic  Subsidiary  in  connection  with the  Guaranties of even date herewith
between  the  Administrative  Agent  and the  Parent or each  Material  Domestic
Subsidiary, as applicable (the "Guaranty Agreements").

Each of the Lenders party to the
  Credit Agreement referenced below and
  NationsBank, National Association, as Administrative Agent
__________________, 1997



         As such counsel, we have reviewed the following documents:

         1.       the Credit Agreement;

         2.       each Revolving Credit Note;

         3.       each Competitive Bid Note;

         4.       the Swing Line Note;

         5.       the Reaffirmation Agreement; and

         6        the Guaranty Agreements.

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

         For  purposes of the  opinions  expressed  below,  we have assumed that
all natural  persons  executing the Loan Documents have legal capacity to do so;
all  signatures  other  than those of the  Company  and each  Material  Domestic
Subsidiary  on  all  documents  submitted  to  us  are  genuine;  all  documents
submitted to us as originals are  authentic;  and all documents  submitted to us
as certified  copies or  photocopies  conform to the original  documents,  which
themselves are authentic.

         In addition,  for  purposes of giving this  opinion,  we have  examined
corporate  records  of the  Company,  the  Parent  and  each  Material  Domestic
Subsidiary,  certificates  of  public  officials,  certificates  of  appropriate
officials of the Company,  the Parent and each Material Domestic  Subsidiary and
such other documents or made such inquiries as we have deemed appropriate.

         Based upon and subject to the foregoing, it is our opinion that:

         1.       The  Company has full  corporate  power and  authority  to own
its  assets and  conduct  the  businesses  in which it is now  engaged,  and the
Company  has full  corporate  power  and  authority  to enter  into  each of the
Company Loan Documents and to perform its obligations thereunder.

         2.       The  Parent and each  Material  Domestic  Subsidiary  has full
corporate  power and  authority to own its assets and conduct the  businesses in
which it is now engaged,  and the Parent and each Material  Domestic  Subsidiary
has full  corporate  power and authority to enter into its  respective  Guaranty
Agreement and to perform its obligations thereunder.

         3.       Each of the Company Loan  Documents  has been duly  authorized
by the  Board  of  Directors  of the  Company,  executed  and  delivered  by the
Company,  and constitutes the legal,  valid and binding  obligation,  agreement,
instrument  or  conveyance,  as the case  may be,  of the  Company,  enforceable
against the Company in accordance with its respective  terms,  except (i)as the
enforceability  thereof  may be limited by  applicable  bankruptcy,  insolvency,
reorganization  and other  similar  laws  relating  to or  affecting  creditors'
rights  generally  and (ii)as the  enforceability  of the  remedial  provisions
thereof may be limited by general equitable principles;  provided,  however, the
application  of such  equitable  principles or  limitations  of law does not, in
our  opinion,  materially  interfere  with  the  practical  realization  of  the
benefits intended to be conferred under the Company Loan Documents.

         4.       Each of the Guaranty  Agreements  has been duly  authorized by
the Board of Directors of the Parent or each Material  Domestic  Subsidiary,  as
applicable,  executed  and  delivered  by the Parent or each  Material  Domestic
Subsidiary,  as  applicable,  and  constitutes  the  legal,  valid  and  binding
obligation  and agreement of the Parent and each Material  Domestic  Subsidiary,
enforceable  against  the  Parent  and  each  Material  Domestic  Subsidiary  in
accordance with its respective terms,  except (i)as the enforceability  thereof
may be limited by applicable  bankruptcy,  insolvency,  reorganization and other
similar laws relating to or affecting  creditors'  rights  generally and (ii)as
the  enforceability  of  the  remedial  provisions  thereof  may be  limited  by
general  equitable  principles;  provided,  however,  the  application  of  such
equitable   principles  or   limitations  of  law  does  not,  in  our  opinion,
materially  interfere with the practical  realization  of the benefits  intended
to be conferred under each of the Guaranty Agreements.

         5.       Neither the execution or delivery of, nor  performance  by the
Company,  the  Parent or any  Material  Domestic  Subsidiary  of its  respective
obligations  under the Loan  Documents to which it is a party,  (a) does or will
conflict  with,  violate or  constitute a breach of the charter or bylaws of the
Company,  the Parent or of any  Material  Domestic  Subsidiary,  or (b) requires
the  prior  consent  of,  notice to or  filing  with any  court or  governmental
authority,  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  Company,  the  Parent  or any
Material Domestic Subsidiary.

         6.       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  Company,  will violate or result in a
violation of Section 7 of the Securities  Exchange Act of 1934, as amended,  any
regulation issued pursuant thereto,  or Regulation G,  T, U or X of the Board of
Governors of the Federal  Reserve  System,  and to the best of our knowledge the
Company does not own or intend to purchase or carry any "margin  securities"  as
defined in said regulations.

         We are not  expressing  any  opinion as to any matter  relating  to any
jurisdiction  other  than  the  laws  of the  State  of New  York,  the  General
Corporation  Law of the State of Delaware  and the United  States of America and
we assume no  responsibility  as to the  applicability  of the laws of any other
jurisdiction as to the subject transaction or the effect of such laws thereon.

         Our opinions  contained  herein are rendered only as of the date hereof
and we undertake no obligation to update our opinions after the date hereof.

         Our   opinions   contained   herein  are   rendered   solely  for  your
information  in connection  with the Loan  Documents  and the Credit  Facilities
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  regulatory  agencies to which you are subject,  (ii) pursuant to any
legal  process  to  which  you are  subject  or in  connection  with  any  legal
proceeding  with  respect  to the  Loan  Documents  and  (iii)  to a  successor,
assignee or other transferee permitted under the Loan Documents.

                                                     Very truly yours,
<PAGE>


                            EXHIBIT K-2

                 Form of Opinion of Borrower's In-House Counsel



                                                  __________, 1997



Each of the Lenders party to the
  Credit Agreement referenced below and
  NationsBank, National Association, as Administrative Agent
Independence Center, 15th Floor
Charlotte, North Carolina 28255

Re:      $400,000,000  Revolving Credit, Swing Line,  Competitive Bid and Letter
         of Credit Facilities to GTECH Corporation

Ladies and Gentlemen:

         I am the general  counsel for GTECH  Corporation  (the  "Company")  and
have acted in such  capacity in  connection  with each of the  revolving  credit
facility,  swing line  facility,  competitive  bid facility and letter of credit
facility  (collectively,  the "Credit  Facilities")  being made available by you
to the Company on this date in the  maximum  aggregate  principal  amount at any
time  outstanding of  $400,000,000  pursuant to the Amended and Restated  Credit
Agreement  of even  date  herewith  between  you and the  Company  (the  "Credit
Agreement").

         I have been  requested  by the Company to deliver  this opinion to each
of  the  Lenders  party  to  the  Credit  Agreement  and  NationsBank,  National
Association,  as  Administrative  Agent,  in  accordance  with the condition set
forth in Section  5.01(b) of the Credit  Agreement.  All  capitalized  terms not
otherwise  defined  herein  shall have the  meanings  provided  therefor  in the
Credit Agreement.

         I have  also  acted  as  general  counsel  to  each  Material  Domestic
Subsidiary in connection  with the Guaranties of even date herewith  between the
Administrative  Agent  and each  Material  Domestic  Subsidiary  (the  "Guaranty
Agreements").

         As such general counsel, I have reviewed the following documents:

         1.       the Credit Agreement;

         2.       each Revolving Credit Note;

Each of the Lenders party to the
  Credit Agreement referenced below and
  NationsBank, National Association, as Administrative Agent
__________________, 1997

         3.       each Competitive Bid Note;

         4.       the Swing Line Note;

         5.       the Reaffirmation Agreement; and

         6        the Guaranty Agreements.

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

         For purposes of the opinions  expressed  below, I have assumed that all
natural  persons  executing the Loan Documents have legal capacity to do so; all
signatures  other  than  those  of  the  Company  and  each  Material   Domestic
Subsidiary  on all  documents  submitted  to me or my  staff  are  genuine;  all
documents  submitted  to me or my  staff as  originals  are  authentic;  and all
documents  submitted  to me or my  staff  as  certified  copies  or  photocopies
conform to the original documents, which themselves are authentic.

         In  addition,  for  purposes of giving this  opinion,  I have  examined
corporate  records  of  the  Company  and  each  Material  Domestic  Subsidiary,
certificates of public officials,  certificates of appropriate  officials of the
Company and each Material  Domestic  Subsidiary and such other documents or made
such inquiries as I or they have deemed appropriate.

         Based upon and subject to the foregoing, it is my opinion that:

         1.       The  Company  is  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.       Each  Material  Domestic  Subsidiary  is  a  corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its organization  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.       Neither the execution or delivery of, nor  performance  by the
Company  or any  Material  Domestic  Subsidiary  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 the
Company  or  to  any  Material  Domestic  Subsidiary,   or  (ii)  any  contract,
agreement,   indenture,  lease,  instrument,  other  document,  judgment,  writ,
determination,  order or decree to which the  Company or any  Material  Domestic
Subsidiary  is a  party  or by  which  the  Company  or  any  Material  Domestic
Subsidiary  or any of  its or  their  respective  properties  is  bound,  or (b)
requires  the  prior  consent  of,  notice  to  or  filing  with  any  court  or
governmental  authority,  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 Company or any
Material Domestic Subsidiary.

         4.       There  is  no  pending  or,  to  the  best  of  my  knowledge,
threatened,  action, suit,  investigation or proceeding,  nor is there any basis
therefor,  before  or by any  court,  or  governmental  department,  commission,
board, bureau,  instrumentality,  agency or arbitral authority an adverse result
in which  would  have a  material  adverse  effect  on the  property,  business,
prospects,  profits or  conditions  (financial  or  otherwise) of the Company or
any Material Domestic  Subsidiary,  including,  without limitation,  any action,
suit, investigation, or proceeding under any environmental or labor law.

         5.       Neither the Company nor any Material  Domestic  Subsidiary  is
subject to any charter,  bylaw or other corporate  restrictions nor, to the best
of my knowledge,  is the Company or any Material  Domestic  Subsidiary  party to
or bound by any  contract  or  agreement  which  (i)  materially  and  adversely
affects its business,  properties  or condition  (financial  or  otherwise),  or
(ii)  restricts,  limits,  or prohibits  payment of any Obligation or Guarantied
Obligation  (as  defined  in the  Guaranty  Agreements)  or  performance  of its
obligations pursuant to the terms of the Loan Documents.

         I am not  admitted  to  practice  in any  jurisdiction  other  than the
State  of   California   and  the  District  of  Columbia.   I  have  made  such
examination of the Delaware  General  Corporation  Law ("DGCL") as I have deemed
appropriate  for  the  purposes  of  this  opinion,  but  I  have  not  made  an
independent  review of the laws of any state.  I am not  expressing  any opinion
as to any matter relating to any  jurisdiction  other than the DGCL and the laws
of  United  States  of  America  and  I  assume  no  responsibility  as  to  the
applicability  of  the  laws  of  any  other  jurisdiction  as  to  the  subject
transaction or the effect of such laws thereon.

         The opinions  contained  herein are rendered only as of the date hereof
and I undertake no obligation to update my opinions after the date hereof.

         The   opinions   contained   herein  are   rendered   solely  for  your
information  in connection  with the Loan  Documents  and the Credit  Facilities
and  may not be  relied  upon in any  manner  by any  other  person,  entity  or
agency,  or by you for any other purpose.  Without my prior written  consent the
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 as may be required by you by  applicable  law or regulation or request of
regulatory agencies to which you are subject.

                                                     Very truly yours,


<PAGE>

                                     EXHIBIT L

                              Compliance Certificate

To:      NationsBank, National Association,
            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 Amended and Restated  Credit  Agreement
dated as of June 18,  1997 (as  amended or  modified  and in effect from time to
time, the "Credit  Agreement")  among GTECH  Corporation (the  "Borrower"),  the
Lenders  (as  defined  in the Credit  Agreement),  the  Documentation  Agent (as
defined  in the  Credit  Agreement),  the  Co-Agents  (as  defined in the Credit
Agreement) and NationsBank,  National  Association,  as Administrative Agent for
the Lenders  ("Administrative  Agent").  Capitalized  terms used but not defined
herein  shall  have the  respective  meanings  therefor  set forth in the Credit
Agreement.   The   undersigned,   a  duly   authorized  and  acting   Authorized
Representative,  hereby certifies to you as of __________ [insert  Determination
Date] as follows:

1.       Calculations:

         A.       Compliance with Section 8.01. Consolidated
                  Funded Debt Ratio

1. Consolidated EBDAIT:

(i) Consolidated Net Income
(excluding any extraordinary
gains or losses), plus $__________

(ii) Consolidated Interest Expense, plus $__________

(iii) Taxes on income, plus $__________

(iv) Amortization and Depreciation, plus $__________

(v) all other non-cash expense items $__________

Total $__________

2. Consolidated Funded Indebtedness: $__________

3. Ratio of A.2. to A.1. ____ to 1.00

Required: Not greater than 2.95 to 1.00

B. Compliance with Section 8.02. Consolidated
Interest Coverage Ratio

1. Consolidated Interest
Expense $__________

2. Consolidated EBDAIT for Four
Quarter Period (as calculated in
A.1. above): $__________

3. Ratio of B.2 to B.1 ____ to 1.00

Required: Not less than 5.00 to 1.00

C. Compliance with Section 8.03. Consolidated
Net Worth

1. Consolidated Shareholders' Equity for preceding
Fiscal Year   $__________

2. Consolidated Net Income for preceding Fiscal Year $__________
(enter 0.00 if a negative figure)

3. C.2. x .50 $__________

4. C.3. + Consolidated Net Worth requirement for $__________
preceding Fiscal Year ($__________)

Required: C.1 must be equal to or greater than C.4

D. Compliance with Section 8.04(b).
Consolidated Subsidiary Debt

1. Consolidated Subsidiary Debt $__________

2. Consolidated EBDAIT for the Four
Quarter Period ended on the most
recent Determination Date
(as calculated in A.1. above): $__________

3. D.2. x .25 $__________

Required: D.1. must not be greater than
the lesser of D.3. and $75,000,000

2.       No Default

                           A.       To the best  knowledge  of the  undersigned,
                  since    __________    (the   date   of   the   last   similar
                  certification),   (a) Borrower   has  not   defaulted  in  any
                  material  respect in the keeping,  observance,  performance or
                  fulfillment   of  any   covenant  or  condition  of  the  Loan
                  Documents;   and  (b) no  Default  or  Event  of  Default  has
                  occurred.

                           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 7.01  of the
Credit Agreement.

         The undersigned  Authorized  Representative  hereby  certifies that the
information  set  forth  above  is true,  correct  and  complete  as of the date
hereof.

         IN WITNESS  WHEREOF,  I have executed this  Certificate  this _____ day
of __________, 19___.


Authorized Representative
for GTECH Corporation
<PAGE>
                                   EXHIBIT M

                            Form of Subsidiary Guaranty


                              SUBSIDIARY GUARANTY

         THIS  SUBSIDIARY  GUARANTY,  dated as of  _______________,  199__ (this
"Guaranty"),   is   made   by   and   between    _________________________,    a
_________________________   corporation  (the  "Guarantor"),   and  NATIONSBANK,
NATIONAL  ASSOCIATION,  as  Administrative  Agent for the  lenders  referred  to
below  (the  "Administrative   Agent").  All  capitalized  terms  used  but  not
defined  herein  shall  have the  respective  meaning  assigned  thereto  in the
Credit Agreement referred to below.

                                                W I T N E S S E T H:

         WHEREAS,  GTECH Corporation,  a Delaware  corporation (the "Borrower"),
the  financial  institutions  from time to time party  thereto (the  "Lenders"),
the  Documentation  Agent  (as  defined  therein),  the  Co-Agents  (as  defined
therein)  and  the  Administrative  Agent  have  entered  into  an  Amended  and
Restated  Credit  Agreement  dated  as of  ______________  ___,  1997 (as at any
time amended, modified or supplemented, the "Credit Agreement"); and

         WHEREAS,  the  Guarantor  is a Material  Domestic  Subsidiary  and will
receive  direct and indirect  material  benefit as a result of the extensions of
credit being made to the Borrower pursuant to the Credit Agreement; and

         WHEREAS,  pursuant to the terms of the Credit  Agreement  the Guarantor
is required to deliver this  Guaranty in order to obtain the  commitment  of the
Lenders to extend  credit  thereunder,  and the Lenders are  unwilling  to enter
into  the  Credit  Agreement  and  extend  credit  to the  Borrower  unless  the
Guarantor enters into this Guaranty;

         NOW,  THEREFORE,  in  consideration  of  the  premises,  the  Guarantor
hereby agrees as follows:

         2.       Guaranty.   The   Guarantor   does   hereby   absolutely   and
unconditionally,  for the  benefit of the  Administrative  Agent and the Lenders
(collectively,  the  "Beneficiaries"),  guarantee  the full and  timely  payment
when due,  whether by acceleration or otherwise,  (including  amounts which, but
for the operation of the automatic stay under  Section 362(a)  of the Bankruptcy
Code or any successor statute, would become due) of:

                  A.       All   indebtedness,   obligations   and   liabilities
         (direct,  by way of  guaranty or  otherwise)  of the  Borrower,  now or
         hereafter  existing,  under or in connection with the Credit Agreement,
         any other Loan  Document  and any other  instrument  evidencing  any of
         the foregoing,  and whether of principal,  interest (including interest
         which,  but for the filing of a petition in bankruptcy  with respect to
         the Borrower, would accrue), fees, expenses or otherwise; and

                  B.       all other  indebtedness,  obligations and liabilities
         of the Borrower  under  written  financing  arrangements  stated by the
         Guarantor and the Administrative Agent to be guaranteed hereby;

in each  case  whether  direct  or  indirect,  joint  or  several,  absolute  or
contingent,  liquidated or  unliquidated,  now or hereafter  existing,  amended,
extended,  renewed,  replaced,  refinanced or restructured,  whether or not from
time  to  time  decreased  or  extinguished  and  later  increased,  created  or
incurred  (all  indebtedness,   obligations  and  liabilities  of  the  Borrower
described in this  Section 1  are  collectively  referred to as the  "Guarantied
Obligations");  provided,  however,  that the  liability of the  Guarantor  with
respect to the Guarantied  Obligations  shall not exceed at any time the Maximum
Amount (as  hereinafter  defined).  The  "Maximum  Amount"  means 95% of (a) the
fair salable  value of the assets of such  Guarantor as of the date hereof minus
(b) the total liabilities of the Guarantor  (including  contingent  liabilities,
but excluding  liabilities  of the  Guarantor  under this Guaranty and the other
Loan  Documents  executed by the  Guarantor)  as of the date  hereof;  provided 
further,  however,  that if the  calculation of the Maximum Amount in the manner
provided  above as of the date payment is required of the Guarantor  pursuant to
this  Guaranty  would  result in a greater  positive  number,  then the  Maximum
Amount shall be deemed to be such greater positive number.

         3.       Guaranty  Of  Payment.  This is a guaranty  of payment and not
merely of  collection.  In the event of any default in payment or  otherwise  on
any of the Guarantied  Obligations,  the Guarantor will pay on demand all or any
portion of the Guarantied  Obligations due or thereafter  becoming due,  whether
by acceleration  or otherwise,  without offset of any kind  whatsoever,  without
any  Beneficiary  first  being  required  to make  demand  upon the  Borrower or
pursue any of its rights  against the  Borrower,  or against  any other  Person,
including  other  guarantors  (whether  or not  party  to  this  Guaranty);  and
without being  required to liquidate or to realize on any  collateral  security.
In any right of action accruing to any  Beneficiary,  such Beneficiary may elect
to proceed  against  (a)the  Guarantor  together with the Borrower or any other
guarantor in respect of such Guarantied  Obligation;  (b)the  Guarantor and the
Borrower or such other guarantor  individually in separate  actions;  or (c)the
Guarantor  only without  having first  commenced any action against the Borrower
or such other guarantor.

         4.       Right to Deal with Guarantied  Obligations.  Any  Beneficiary,
without  notice  to or  consent  of  Guarantor,  may do any  one or  more of the
following,  all without  impairing  the  liability of the  Guarantor  hereunder:
deal with any Guarantied  Obligations  and any collateral  security  therefor in
such manner as it may deem  advisable and renew,  amend or extend the Guarantied
Obligations,  the Loan Documents or any part thereof;  accept  partial  payment,
or  settle,  release,  compound,  or  compromise  the  same;  demand  additional
collateral   security  therefor,   and  substitute  or  release  the  same;  and
compromise  or settle with or release and  discharge  from  liability  any other
guarantor  of any  Guarantied  Obligation,  or any other  Person  liable to such
Beneficiary  for  all or  any  portion  of the  obligations  of any  obligor  in
respect of any Guarantied Obligation.

         5.       Waiver of Subrogation.  The Guarantor  hereby  unconditionally
waives  with  respect  to this  Guaranty  any right of  subrogation,  indemnity,
reimbursement or contribution from the Borrower and any other guarantor.

         6.       Other Waivers.  Guarantor hereby  unconditionally  waives with
respect to this  Guaranty:  (a)notice  of  acceptance  of this  Guaranty by any
Beneficiary  and any notice of the  incurring by the Borrower of any  Guarantied
Obligation;  (b)presentment for payment,  protest, notice of protest and notice
of dishonor  to any party  including  the  Borrower  or the  Guarantor;  (c) all
other  notices  which the Borrower or the Guarantor may be entitled to but which
may  legally be waived;  (d) demand for  payment as a  condition  of  liability;
(e)any  disability  of the Borrower or any other obligor or obligors or defense
available to the  Borrower,  the  Guarantor or any other  obligor or obligors in
respect of any  Guarantied  Obligation,  including  absence or  cessation of the
Borrower  or any such  other  obligor's  liability  for any  reason  whatsoever;
(f)any defense or  circumstances  which might  otherwise  constitute a legal or
equitable  discharge  of a guarantor  or surety;  and (g)all  rights  under any
otherwise  applicable  law dealing with or affecting  the rights of creditors of
Guarantor and inconsistent with the express provisions hereof.

         7.       Subordination.  Until the Guarantied  Obligations  are paid in
full the Guarantor  hereby  unconditionally  subordinates all present and future
debts,  liabilities  or  obligations  of the  Borrower to the  Guarantor  to the
Guarantied  Obligations,  and all amounts received by the Guarantor with respect
to such  debts,  liabilities  or  obligations  shall,  upon the  occurrence  and
during  the  continuance  of an  Event  of  Default,  be held in  trust  for the
benefit of, and shall be  immediately  paid over to, the Agent,  for the benefit
of the  Lenders,  and to any other  Persons  who  shall  have the  benefit  of a
guarantee by the  Guarantor of  Indebtedness  of the Borrower  which is owing to
such Persons and which ranks at least pari passu with the  Indebtedness  owed to
the  Lenders,   ratably  according  to  the  unpaid  principal  amount  of  such
Indebtedness  of the Borrower  owed to the Lenders and such other  Persons.  The
Guarantor,  at the request of the Agent,  shall  execute such further  documents
in favor of the Agent,  for the benefit of the Lenders,  to further evidence and
support the purpose of this Section 6.

         8.       No Right of Set  Off.  No act of  commission  or  omission  of
any kind or at any time  upon the part of the  Borrower  or any  Beneficiary  or
their  respective  successors  or assigns  in  respect of any matter  whatsoever
shall in any way affect or impair the rights of any  Beneficiary  to enforce any
right,  power,  or benefit  under this  Guaranty,  and no  set-off,  recoupment,
claim,  reduction  or  diminution  of any  obligation  or any defense  (legal or
equitable),  counterclaim,  cross  claim  or other  claim of any kind or  nature
which  Guarantor has or may have against the Borrower or any  Beneficiary or any
such  successor  or assign shall be available to or asserted by Guarantor in any
suit or action brought by any  Beneficiary,  or their  respective  successors or
assigns,  to enforce any right,  power or benefit  under this  Guaranty or as an
offset to payment hereunder.

         9.       Representations  and  Warranties.   Guarantor  represents  and
warrants to the Beneficiaries  that:  (a)no other agreement,  representation or
special  condition  exists between the Guarantor and any  Beneficiary  regarding
the liability of the Guarantor under this Guaranty;  nor does any  understanding
exist between the  Guarantor and any  Beneficiary  that the  obligations  of the
Guarantor  under this Guaranty are or will be other than as set out herein;  and
(b)as of the date  hereof,  the  Guarantor  has no  defense  whatsoever  to any
action  or   proceeding   that  may  be  brought  to  enforce   this   Guaranty.
Furthermore,   the   Guarantor   represents,   warrants   and   affirms  to  the
Beneficiaries   that,  to  its  knowledge,   each  of  the  representations  and
warranties  contained  in the Credit  Agreement  and made by the  Borrower  with
respect to the Guarantor and its  properties,  affairs and financial  condition,
is true and correct in all material respects.

         10.      No Waiver by  Beneficiaries.  No  failure or delay on the part
of any Beneficiary in exercising any right,  power or privilege  hereunder shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right,  power or  privilege  hereunder  preclude  any other or further  exercise
thereof,  or the exercise of any other  right,  power or  privilege.  Failure by
any  Beneficiary to insist upon strict  performance  hereof shall not constitute
a  relinquishment  of its right to demand  strict  performance  at another time.
Receipt  by any  Beneficiary  of any  payment  by any  Person on any  Guarantied
Obligation,   with   knowledge  of  a  default  in  respect  of  any  Guarantied
Obligation or of a breach of this Guaranty,  or both,  shall not be construed as
a waiver of the default or breach.

         11.      CONTINUING   GUARANTY;   TERMINATION.   THIS   GUARANTY  IS  A
CONTINUING  GUARANTY  AND SHALL  CONTINUE  IN FULL FORCE AND  EFFECT  UNTIL SUCH
TIME AS ALL GUARANTIED  OBLIGATIONS  SHALL HAVE BEEN  INDEFEASIBLY PAID IN FULL,
ALL  OUTSTANDINGS  SHALL HAVE BEEN PAID IN FULL OR TERMINATED AND NO BENEFICIARY
SHALL  BE  UNDER  ANY  FURTHER  OBLIGATION  TO LEND OR TO  ADVANCE  FUNDS TO THE
ACCOUNT OF THE  BORROWER,  OR ISSUE LETTERS OF CREDIT,  CONSTITUTING  GUARANTIED
OBLIGATIONS.

         12.      Benefits of  Agreement.  This  Guaranty  is freely  assignable
and transferable by the  Beneficiaries or any of them to any permitted  assignee
and  transferee  of  any  Guarantied   Obligation;   however,   the  duties  and
obligations  of  the  Guarantor  may  not be  delegated  or  transferred  by the
Guarantor  without the prior written  consent of all  Beneficiaries.  The rights
and  privileges  of the  Beneficiaries  shall  inure  to the  benefit  of  their
respective  successors  and  assigns,  and the  duties  and  obligations  of the
Guarantors shall bind their respective successors and assigns.

         13.      Expenses;  Indemnity.  The  Guarantor  will upon demand pay to
each  Beneficiary the amount of any and all reasonable  expenses,  including the
reasonable  fees and  expenses  of its  counsel  and of any  experts and agents,
which it may  incur in  connection  with  enforcement  of this  Guaranty  or the
failure by the  Guarantor  to perform or observe any of the  provisions  hereof.
To the extent  permitted by law,  the  Guarantor  agrees to  indemnify  and hold
harmless  each  Beneficiary  and  each  officer,  director,  employee,  or agent
thereof  from and against any and all claims,  demands,  losses,  judgments  and
liabilities   (including  liabilities  for  penalties)  of  whatsoever  kind  or
nature,  growing out of or resulting  from this  Guaranty or the exercise by any
Beneficiary  of any right or remedy  granted to it  hereunder or under the other
Loan  Documents,  other  than such  items  arising  out of gross  negligence  or
willful  misconduct on the part of such  Beneficiary.  If and to the extent that
the  obligations of the Guarantor under this  Section 12 are  unenforceable  for
any reason,  the  Guarantor  hereby agrees to make the maximum  contribution  to
the payment and  satisfaction  of such  obligations  which is permissible  under
applicable law.

         14.      Payments  in  U.S.  Dollars.  All  payments  to be made by the
Guarantor  pursuant  to any  provision  hereof  shall be made on the date due in
lawful money of the United States of America  ("Dollars" or designated  "$") and
in  immediately  available  funds to the  Administrative  Agent at the Principal
Office for the account of each  Beneficiary.  The  Administrative  Agent may, by
notice to the  Guarantor,  designate  a  different  address at which  subsequent
payments  hereunder  shall be made.  All payments  under this Guaranty  shall be
made free and clear of and  without  reduction  by  reason  of all  present  and
future income,  stamp,  registration and other taxes,  levies,  costs,  imposts,
deductions, charges, compulsory liens and withholdings whatsoever.

         15.      Amendments,  Waivers and  Consents.  No amendment or waiver of
any  provision of this  Guaranty or consent to any  departure  by the  Guarantor
herefrom  shall in any event be  effective  unless  the same shall be in writing
and signed by the Guarantor and the  Administrative  Agent,  with the consent of
the  Required  Lenders,  and then such  amendment,  waiver or  consent  shall be
effective only in the specific  instance and for the specific  purpose for which
given;  provided,  that no such amendment,  waiver or consent shall  (a)deprive
any Beneficiary of the benefits  generally of this Guaranty  without the written
consent of such  Beneficiary,  or (b)alter the provisions of this Section 14 or
of Section 11 without the written consent of all of the Beneficiaries.

         16.      Notices.  All  notices  shall  be  in  writing,  except  as to
telephonic  notices expressly  permitted or required herein, and written notices
shall  be  delivered  by hand  delivery,  telefacsimile,  overnight  courier  or
certified or registered  mail. Any notice shall be  conclusively  deemed to have
been  received  by any  party  hereto  and be  effective  on  the  day on  which
delivered  to such party  (against  (except as to  telephonic  or  telefacsimile
notice)  receipt  therefor or, in the case of telex,  verification by return) at
the address set forth  below or such other  address as such party shall  specify
to the other  parties in writing,  or if sent prepaid by certified or registered
mail return  receipt  requested on the third Business Day after the day on which
mailed, addressed to such party at said address:

                  (a)      if to the Guarantor:

                           _____________________
                           c/o GTECH Corporation
                           55 Technology Way
                           West Greenwich, Rhode Island  02817
                           Attention:  Vice President and Treasurer
                           Telephone:  (401) 392-1000
                           Telefacsimile:  (401) 392-0454

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

                  (b)      if to the Administrative Agent:

                           NationsBank, National Association
                           Independence Center, 15th Floor
                           Charlotte, North Carolina  28255
                           Attention: Dana Weir, Agency Services
                           Telephone:  (704) 388-3917
                           Telefacsimile:  (704) 386-9923

                           with a copy to:
                           NationsBank, National Association
                           Corporate Banking
                           767 Fifth Avenue, 5th Floor
                           New York, New York 10153-0083
                           Attention:       Ms. Patricia G. McCormack
                                            Senior Vice President
                           Telephone:  (212) 407-5373
                           Telefacsimile:  (212) 751-6909

                  (c)      if to the Lenders:

                           At the  addresses  set forth on the  signature  pages
                           of the Credit  Agreement  and on the  signature  page
                           of each Assignment and Acceptance.

         17.      Interpretation;  Partial  Invalidity.  Whenever  possible each
provision  of  this  Guaranty  shall  be  interpreted  in such  manner  as to be
effective  and  valid  under  applicable  law,  but if  any  provision  of  this
Guaranty  shall be  prohibited  by or  invalid  under such law,  such  provision
shall be  ineffective to the extent of such  prohibition or invalidity,  without
invalidating  the  remainder of such  provision or the  remaining  provisions of
this Guaranty.

         18.      Waiver of Immunity;  Jury Trial.  To the extent the  Guarantor
may  now or  hereafter  be  entitled,  in any  jurisdiction  in  which  judicial
proceedings  may at any time be  commenced  with  respect to this  Guaranty,  to
claim for itself or its  revenues or  properties  immunity  from suit,  set-off,
attachment  upon or prior to judgment or in aid of  execution  or execution of a
judgment  or from any other  legal  process,  and to the extent that in any such
jurisdiction  there  may  be  attributed  to  the  Guarantor  such  an  immunity
(whether or not claimed),  the Guarantor hereby  irrevocably agrees not to claim
and hereby  irrevocably  waives  such  immunity  until the  indebtedness  of the
Guarantor hereunder is discharged.

         Guarantor  hereby waives trial by jury in  connection  with any action,
suit or  proceeding  to which any  Beneficiary  is a party  arising  under or in
respect of this Guaranty.

         19.      Miscellaneous;  Remedies  Cumulative.  Unless  the  context of
this Guaranty  otherwise clearly requires,  references to the plural include the
singular,  the  singular  the  plural  and the part the  whole  and "or" has the
inclusive  meaning  represented  by the phrase  "and/or."  The section  headings
used herein are for  convenience of reference  only and shall not define,  limit
or  extend  the  provisions  of  this  Guaranty.   All  remedies  hereunder  are
cumulative  and are not  exclusive  of any  other  rights  and  remedies  of the
Beneficiaries  provided  by law or under the  Credit  Agreement,  the other Loan
Documents,  or other  applicable  agreements or  instruments.  The extensions of
credit to the  Borrower  pursuant  to the  Credit  Agreement  shall be  presumed
conclusively to have been made or extended,  respectively,  in reliance upon the
obligations of the Guarantor incurred pursuant to this Guaranty.

         20.      Governing  Law.  All  documents   executed   pursuant  to  the
transactions   contemplated   herein,   including,   without  limitation,   this
Guaranty,  shall be deemed to be  contracts  made  under,  and for all  purposes
shall  be  construed  in  accordance   with,  the  internal  laws  and  judicial
decisions  of the  State  of New  York.  The  Guarantor  hereby  submits  to the
jurisdiction  and  venue of the  state  and  federal  courts of New York for the
purposes of resolving disputes hereunder or for the purposes of collection.

         21.      Repayment  or  Recovery.  If  claim  is  ever  made  upon  any
Beneficiary  for  repayment  or  recovery  of any amount or amounts  received in
payment  or on  account  of any of the  Guarantied  Obligations  and  any of the
Beneficiaries  repays all or part of said amount by reason of (a)any  judgment,
decree or order of any court or  administrative  body having  jurisdiction  over
such payee or any of its  property,  or (b)any  settlement or compromise of any
such claim effected by such  Beneficiary  with any such claimant  (including the
original  obligor),  then and in such event the  Guarantor  agrees that any such
judgment,  decree,  order,  settlement or  compromise  shall be binding upon it,
notwithstanding  any  revocation  hereof  or the  cancellation  of any  Notes or
other   instrument   evidencing  any  Guarantied   Obligation  or  any  security
therefor,  and  the  Guarantor  shall  be and  remain  liable  to the  aforesaid
Beneficiary  for the  amount  so repaid or  recovered  to the same  extent as if
such amount had never originally been received by such Beneficiary.

         22.      Set-Off.  In addition to any rights now or  hereafter  granted
under  applicable  law  and  not by  way  of  limitation  of  any  such  rights,
Guarantor  agrees  that  each  Beneficiary   shall  have  a  lien  for  all  the
liabilities  of the  Guarantor  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 such  Beneficiary or
otherwise  in the  possession  or control of such  Beneficiary  (other  than for
safekeeping)  for any purpose for the  account or benefit of the  Guarantor  and
including  any balance of any deposit  account or of any credit of the Guarantor
with such  Beneficiary,  whether now  existing  or  hereafter  established,  and
hereby  authorizes  each  Beneficiary,   upon  the  occurrence  and  during  the
continuance  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  liabilities
of the Guarantor to such  Beneficiary  then past due and in such amounts as they
may elect,  and whether or not the  collateral  or the  responsibility  of other
Persons  primarily,  secondarily  or  otherwise  liable may be deemed  adequate.
For the  purposes of this  Section 21, all  remittances  and  property  shall be
deemed to be in the  possession of such  Beneficiary  as soon as the same may be
put in transit to it by mail or carrier or by other bailee.

         23.      Events of Default.  The following shall  constitute  Events of
Default ("Events of Default") under this Guaranty:

                  A.       The  occurrence  and   continuance  of  an  Event  of
         Default as defined in the Credit Agreement; or

                  B.       Failure  by the  Guarantor  to  perform,  observe  or
         comply in all material respects with any term,  covenant,  condition or
         provision  contained  in this  Guaranty  within  thirty (30) days after
         notice thereof by the Administrative Agent; or

                  C.       Any   warranty,   representation   or  other  written
         statement made by the Guarantor  herein or in any instrument  furnished
         by the Guarantor to any  Beneficiary  pursuant to this  Guaranty  shall
         be  false  or  misleading  in any  material  respect  on the date as of
         which it is made.

         24.      Credit  Agreement  Controls.  In the  event  that  any term of
this Guaranty  conflicts  with any term of the Credit  Agreement,  then the term
of the Credit Agreement shall control.

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



ATTEST:                       [GUARANTOR]

By:                             By:
                              Name:
Title:                     Title:
[COMPANY SEAL]

NATIONSBANK, NATIONAL
ASSOCIATION, as
Administrative Agent for
the Lenders
By:
Name:
Title:
<PAGE>
                                EXHIBIT N

                          Form of Confidentiality Agreement

         THIS  AGREEMENT  made this  _____  day of  __________,  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  Amended and Restated Credit
Agreement   dated________________  ___,  1997,  among  GTECH  Corporation, the
Lenders which are parties thereto (the "Lenders"),  the Documentation  Agent (as
defined therein),  the Co-Agents (as defined therein) and NationsBank,  National
Association,  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 11.01 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  11.01(a)  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  and,  in the
                  event  the  Potential  Transferee  becomes  a  Transferee,  as
                  necessary  as a Lender  (or a  participant  of a Lender  under
                  the Credit  Agreement),  the Potential  Transferee shall never
                  use or duplicate any  Confidential  Information and 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   this
                           Confidentiality 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  all of  the  following:  termination  of the
                           Explorations,  termination  of the  Credit  Agreement
                           and   termination   of  the  Potential   Transferee's
                           status as a Lender or a participant of a Lender.

                  (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 2.03(i)


                                      GTECH Corporation
                                    Revolving Debt Summary
                                     Outstanding Bid Loans
                                       As of June 18, 1997
<TABLE>
<CAPTION>

                   Amount           Term           Rate        # Of Days       Inception       Maturity
<S>               <C>            <C>             <C>              <C>        <C>              <C>
 
Bank of Tokyo      10,000,000     14 Day Bid      5.80625         14         June 6, 1997      June 20, 1997

Fleet Bank         40,000,000     14 Day Bid      5.74000         14         June 6, 1997      June 20, 1997

Credit Lyonnais    20,000,000     14 Day Bid      5.85000         14         June 6, 1997      June 20, 1997
                  ____________
Subtotal:         $70,000,000

</TABLE>
<PAGE>

                               Schedule 6.01(d)

 Transactive Corporation is a Delaware Corporation. Transactive Corporation is
 a wholly-owned subsidiary of GTECH Corporation.
<PAGE>


                               Schedule 6.01(e)

                               GTECH Corporation
                                  Debt Summary
                                    5/31/97
<TABLE>
<CAPTION>
 
      Bank                     S/T Outstanding                Description            Final Maturity
<S>                                   <C>                   <C>                          <C>   

Nations Facility                        0                    Term Loan                    9/99

Series A Senior Notes                                        Private Placement            2004
Series B Senior Notes                                        Private Placement            2007

Scotia Bank de Puerto Rico              2,136,000            Term Loan                    9/98

Woodchester Credit Lyonnais             1,867,511            Term Loan                    12/99

Citizens Trust                          0                    Demand Note                  Demand

First Union                             0                    Demand Note                  Demand

Commerzbank                                                  Demand Note                  Demand

Nations Bank                           698,082               Capital Lease                3/98
                                       481,103               Capital Lease                7/98
                                       681,024               Capital Lease                8/98

</TABLE>
<TABLE>
<CAPTION>

      Bank                        L/T Outstanding               Description              Final Maturity
<S>                                 <C>                      <C>                          <C> 

Nations Facility                     137,000,000                Term Loan                    9/99

Series A Senior Notes                150,000,000                Private Placement            2004
Series B Senior Notes                150,000,000                Private Placement            2007

Scotia Bank de Puerto Rico             1,058,000                Term Loan                    9/98

Woodchester Credit Lyonnais            3,268,151               Term Loan                    12/99

Citizens Trust                         1,000,000              Demand Note                  Demand

First Union                                0                  Demand Note                  Demand

Commerzbank                            3,400,000              Demand Note                  Demand

Nations Bank                               0                 Capital Lease                  3/98
                                          83,035             Capital Lease                  7/98
                                         176,809             Capital Lease                  8/98
                     
         Total:                      451,849,715

</TABLE>
<PAGE>
                                     Schedule 6.01(f)

To the extent any of the capital leases referenced in Schedule 6.01(e) are
determined to be loans with a security interest, they would be Liens.

<PAGE>

                                     Schedule 6.01(h)

The Texas Lottery  Commission  ("Lottery") has notified the Borrower of its
intention to assess liquidated  damages in connection with a gift made by one of
its  lobbyists to the Governor of Texas,  and has requested  information  on any
other  occasion when the Borrower or its  lobbyists  may have provided  meals or
entertainment to state officials  without  reimbursement.  While it has not done
so, the Lottery may take the  position  that such  actions  constitute a default
under the  Borrower's  contract with the Lottery.  In addition,  the Lottery has
instructed  its staff to  prepare  and issue,  by June 30,  1997,  requests  for
proposal for the same goods and services currently provided by the Borrower.  As
a result of this process, the Lottery may in the future attempt to terminate the
contract.