EXECUTION VERSION

                               FIFTH AMENDMENT TO
                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

         THIS FIFTH  AMENDMENT TO THIRD  AMENDED AND RESTATED  CREDIT  AGREEMENT
(this "Amendment"), dated as of December 31, 1999, is entered into by and among:

                  (1)  BELL   MICROPRODUCTS   INC.,  a  California   corporation
         ("Borrower");

                  (2) Each of the financial institutions listed in Schedule I to
         the  Restated  Credit  Agreement  referred  to in  Recital A below (the
         "Banks");

                  (3) CALIFORNIA BANK & TRUST, a California banking corporation,
         as   administrative   agent   for  the   Banks   (in   such   capacity,
         "Administrative Agent"); and

                  (4)  UNION  BANK  OF  CALIFORNIA,  N.A.,  a  national  banking
         association,  as  collateral  agent for the  Banks  (in such  capacity,
         "Collateral Agent").


                                    RECITALS

         A. Borrower,  the Banks,  Administrative Agent and Collateral Agent are
parties to a Third Amended and Restated  Credit  Agreement  dated as of November
12, 1998,  as amended by (i) that certain  First  Amendment to Third Amended and
Restated  Credit  Agreement  dated as of May 13, 1999,  (ii) that certain Second
Amendment to Third Amended and Restated  Credit  Agreement  dated as of July 21,
1999,  (iii) that certain Third  Amendment to Third Amended and Restated  Credit
Agreement dated as of October 15, 1999 and (iv) that certain Fourth Amendment to
Third  Amended and Restated  Credit  Agreement  dated as of December 8, 1999 (as
amended, the "Restated Credit Agreement").

         B.  Borrower  has  requested  the  Banks,   Administrative   Agent  and
Collateral Agent to amend the Restated Credit Agreement in certain respects.

         C. The Banks,  Administrative Agent and Collateral Agent are willing so
to amend  the  Restated  Credit  Agreement  upon the terms  and  subject  to the
conditions set forth below.


                                    AGREEMENT

         NOW,  THEREFORE,  in  consideration of the above recitals and for other
good and  valuable  consideration,  the receipt and adequacy of which are hereby
acknowledged,  Borrower,  the Banks,  Administrative  Agent and Collateral Agent
hereby agree as follows:

         1. Definitions, Interpretation. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined  herein,  all  other  capitalized  terms  used  herein  shall  have  the
respective  meanings given to those terms in the Restated Credit  Agreement,  as
amended by this Amendment.  The rules of construction  set forth

                                       1

<PAGE>


in  Section  I of  the  Restated  Credit  Agreement  shall,  to the  extent  not
inconsistent  with the terms of this Amendment,  apply to this Amendment and are
hereby incorporated by reference.

         2. Amendment to Credit  Agreement.  Subject to the conditions set forth
in paragraph 4 below,  the Restated Credit  Agreement is hereby amended so as to
incorporate  all of the changes set forth in the marked  version of the Restated
Credit Agreement attached hereto as Attachment A.

         3.  Representations  and  Warranties.  Borrower  hereby  represents and
warrants to  Administrative  Agent,  Collateral Agent and the Banks that, on the
date of this  Amendment  and after giving  effect to the  amendment set forth in
paragraph  2 above,  the  following  are and  shall be true and  correct  on the
Effective Date (as defined below):

                  (a) The  representations and warranties set forth in Paragraph
         4.01 of the  Restated  Credit  Agreement  are true and  correct  in all
         material respects;

                  (b) No  Default  or  Event  of  Default  has  occurred  and is
         continuing; and

                  (c) Each of the Credit Documents is in full force and effect.

         4.  Effective  Date.  The  amendment to the Restated  Credit  Agreement
effected by paragraph 2 above shall  become  effective on December 31, 1999 (the
"Effective  Date"),  subject to receipt by the Banks,  Administrative  Agent and
Collateral  Agent on or prior to the Effective  Date of the  following,  each in
form and substance satisfactory to the Banks,  Administrative Agent,  Collateral
Agent and their respective counsel:

                  (a) This  Amendment  duly  executed  by  Borrower,  the Banks,
         Administrative Agent and Collateral Agent;

                  (b) A letter in the form of Attachment B hereto  appropriately
         completed,   dated  the  Effective  Date  and  duly  executed  by  each
         Guarantor;

                  (c) A Certificate  of the Secretary or an Assistant  Secretary
         of Borrower, dated the Effective Date, certifying that (i) the Articles
         of  Incorporation  and Bylaws of  Borrower,  in the form  delivered  to
         Administrative  Agent on the Closing Date, are in full force and effect
         and have not been amended, supplemented, revoked or repealed since such
         date,  (ii) that the  resolution of Borrower,  in the form delivered to
         Administrative  Agent on the Closing  Date, is in full force and effect
         and has not been amended, supplemented,  revoked or repealed since such
         date,  and  (iii)  the  incumbency,  signatures  and  authority  of the
         officers of  Borrower  authorized  to execute,  deliver and perform the
         Credit  Agreement,  this Amendment,  the other Credit Documents and all
         other documents, instruments or agreements relating thereto executed or
         to be executed by Borrower; and

                  (d) Such other evidence as  Administrative  Agent,  Collateral
         Agent or any Bank may reasonably  request to establish the accuracy and
         completeness of the

                                       2

<PAGE>


         representations  and warranties  and the compliance  with the terms and
         conditions contained in this Amendment.

         5. Effect of this  Amendment.  On and after the  Effective  Date,  each
reference in the Restated Credit Agreement and the other Credit Documents to the
Restated Credit  Agreement  shall mean the Restated Credit  Agreement as amended
hereby.  Except as specifically amended above, (a) the Restated Credit Agreement
and the other  Credit  Documents  shall  remain in full force and effect and are
hereby ratified and confirmed and (b) the execution,  delivery and effectiveness
of this Amendment shall not, except as expressly  provided herein,  operate as a
waiver of any  right,  power,  or remedy of the Banks,  Administrative  Agent or
Collateral  Agent,  nor  constitute  a waiver of any  provision  of the Restated
Credit Agreement or any other Credit Document.

         6. Miscellaneous.

                  (a) Counterparts. This Amendment may be executed in any number
         of identical  counterparts,  any set of which signed by all the parties
         hereto shall be deemed to constitute a complete,  executed original for
         all purposes.

                  (b) Headings.  Headings in this Amendment are for  convenience
         of reference only and are not part of the substance hereof.

                  (c)  Governing  Law. This  Amendment  shall be governed by and
         construed  in  accordance  with  the laws of the  State  of  California
         without reference to conflicts of law rules.

                                       3

<PAGE>


         IN  WITNESS  WHEREOF,  Borrower,  the Banks,  Administrative  Agent and
Collateral  Agent have  caused this  Amendment  to be executed as of the day and
year first above written.


BORROWER:                               BELL MICROPRODUCTS INC.


                                        By: /s/ Remo E. Canessa
                                            ------------------------------------
                                            Name: Remo E. Canessa
                                            Title: Vice President of Finance
                                                   and CFO

                                        By: /s/ W. Don Bell
                                            ------------------------------------
                                            Name: W. Don Bell
                                            Title: President & CEO


ADMINISTRATIVE AGENT:                   CALIFORNIA BANK & TRUST,
                                        As Administrative Agent

                                        By: /s/ Stephen C. Bellicini
                                            ------------------------------------
                                            Name: Stephen C. Bellicini
                                            Title: Senior Vice President

                                        By: /s/ Carmen Sanz
                                            ------------------------------------
                                            Name: Carmen Sanz
                                            Title: Assistant Vice President


COLLATERAL AGENT:                       UNION BANK OF CALIFORNIA, N.A.,
                                        As Collateral Agent

                                        By: /s/ William E. Hinch
                                            ------------------------------------
                                            Name: William E. Hinch
                                            Title: Vice President

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

                                       4

<PAGE>


BANKS:                                  CALIFORNIA BANK & TRUST,
                                        As a Bank

                                        By: /s/ Stephen C. Bellicini
                                            ------------------------------------
                                            Name: Stephen C. Bellicini
                                            Title: Senior Vice President

                                        By: /s/ Carmen Sanz
                                            ------------------------------------
                                            Name: Carmen Sanz
                                            Title: Assistant Vice President


                                        UNION BANK OF CALIFORNIA, N.A.,
                                        As a Bank

                                        By: /s/ William E. Hinch
                                            ------------------------------------
                                            Name: William E. Hinch
                                            Title: Vice President

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


                                        SANWA BANK CALIFORNIA,
                                        As a Bank

                                        By: /s/ Clifford M. Wallace
                                            ------------------------------------
                                            Name: Clifford M. Wallace
                                            Title: Vice President


                                        COMERICA BANK - CALIFORNIA,
                                        As a Bank

                                        By: /s/ Scott T. Smith
                                            ------------------------------------
                                            Name: SCOTT T. SMITH
                                            Title: VICE PRESIDENT

                                       5

<PAGE>


                                        U.S. BANK NATIONAL ASSOCIATION,
                                        As a Bank

                                        By: /s/ Michael Powell
                                            ------------------------------------
                                            Name: Michael Powell
                                            Title: Vice President

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


                                        IBM CREDIT CORPORATION,
                                        As a Bank

                                        By: /s/ Thomas S. Curcid
                                            ------------------------------------
                                            Name: Thomas S. Curcid
                                            Title: Manager of Credit

                                       6

<PAGE>


                                  ATTACHMENT A

                   MARKED VERSION OF RESTATED CREDIT AGREEMENT



                                       7

<PAGE>



                                                            DRAFT CONFORMED COPY
                                                         (Through 5th Amendment)



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

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


                           THIRD AMENDED AND RESTATED

                                CREDIT AGREEMENT

                                      among

                             BELL MICROPRODUCTS INC.

                                       and

                             THE BANKS NAMED HEREIN

                                       and

                            CALIFORNIA BANK & TRUST,

                      as Administrative Agent for the Banks

                                November 12, 1998


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

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


<PAGE>


<TABLE>
                                                  CREDIT AGREEMENT

                                                 Table Of Contents

<CAPTION>
                                                                                                               Page
<S>      <C>                                                                                                    <C>
SECTION I.            INTERPRETATION.............................................................................2

         1.01.    Definitions....................................................................................2
         1.02.    GAAP...........................................................................................2
         1.03.    Headings.......................................................................................2
         1.04.    Plural Terms...................................................................................2
         1.05.    Time...........................................................................................2
         1.06.    Governing Law..................................................................................2
         1.07.    Construction...................................................................................2
         1.08.    Calculation of Interest and Fees...............................................................2
         1.09.    Other Interpretive Provisions..................................................................3


SECTION II.           CREDIT FACILITIES..........................................................................3

         2.01.    Revolving Loan Facility........................................................................3
         2.02.    Amount Limitations, Commitment Reductions, Etc.................................................6
         2.03.    Fees...........................................................................................7
         2.04.    Prepayments....................................................................................8
         2.05.    Other Payment Terms............................................................................9
         2.06.    Notes and Interest Account....................................................................10
         2.07.    Loan Funding..................................................................................10
         2.08.    Pro Rata Treatment............................................................................11
         2.09.    Change of Circumstances.......................................................................12
         2.10.    Taxes on Payments.............................................................................14
         2.11.    Funding Loss Indemnification..................................................................16
         2.12.    Security......................................................................................16


SECTION III.          CONDITIONS PRECEDENT......................................................................17

         3.01.    Conditions Precedent to Initial Revolving Loans...............................................17
         3.02.    Conditions Precedent to Each Credit Event.....................................................17
         3.03.    Covenant to Deliver...........................................................................18


SECTION IV.           REPRESENTATIONS AND WARRANTIES............................................................18

         4.01.    Borrower's Representations and Warranties.....................................................18
         4.02.    Reaffirmation.................................................................................23


SECTION V.            COVENANTS.................................................................................23

         5.01.    Affirmative Covenants.........................................................................23
         5.02.    Negative Covenants............................................................................26


SECTION VI.           DEFAULT...................................................................................29

         6.01.    Events of Default.............................................................................29
         6.02.    Remedies......................................................................................30


SECTION VII.          THE AGENTS AND RELATIONS AMONG BANKS......................................................31

                                                        -i-

<PAGE>


                                                 Table Of Contents
                                                    (continued)

                                                                                                               Page

         7.01.    Appointment, Powers and Immunities............................................................31
         7.02.    Reliance by Agents............................................................................31
         7.03.    Defaults......................................................................................32
         7.04.    Indemnification...............................................................................32
         7.05.    Non-Reliance..................................................................................32
         7.06.    Resignation or Removal of Administrative Agent................................................33
         7.07.    Resignation or Removal of Collateral Agent....................................................33
         7.08.    Agents in their Individual Capacity...........................................................34
         7.09.    Co-Agents.....................................................................................34


SECTION VIII.         MISCELLANEOUS.............................................................................34

         8.01.    Notices.......................................................................................34
         8.02.    Expenses......................................................................................35
         8.03.    Indemnification...............................................................................36
         8.04.    Waivers; Amendments...........................................................................36
         8.05.    Successors and Assigns........................................................................37
         8.06.    Setoff; Security Interest.....................................................................40
         8.07.    No Third Party Rights.........................................................................40
         8.08.    Partial Invalidity............................................................................40
         8.09.    Arbitration...................................................................................41
         8.10.    Jury Trial....................................................................................42
         8.11.    Counterparts..................................................................................42


SECTION IX.           EFFECTIVE DATE OF RESTATED CREDIT AGREEMENT...............................................43

         9.01.    Effective Date................................................................................43
         9.02.    Loans Under Existing Credit Agreement.........................................................43
         9.03.    Effect........................................................................................43

                                                       -ii-

<PAGE>


                                                 Table Of Contents
                                                    (continued)

                                                                                                               Page

SCHEDULES

         I               Banks (Preamble)
         II              Pricing Grid
         1.01            Definitions (1.01)
         3.01            Effective Date Conditions Precedent
         4.01(g)         Material Litigation
         4.01(q)         Subsidiaries
         5.01(j)         Documents to be Delivered by Borrower on or Prior
                         to the Tenex Data Acquisition Effective Date

EXHIBITS


         A        Notice of Revolving Loan Borrowing (2.01(b))
         B        Notice of Revolving Loan Conversion (2.01(d))
         C        Notice of Revolving Loan Interest Period Selection (2.01(e))
         D        Revolving Loan Note (2.07(a))
         E        Third Amended and Restated Security Agreement (2.13(a), 9.03)
         F        Third Amended and Restated Pledge Agreement (2.13(a), 9.03)
         G        Bell Canada Guaranty (2.13(a))
         H        Bell Canadian Pledge Agreement (2.13(b))
         I        Bell Tenex/Bell Future-Tech Guaranty (2.13(b), 2.13(c))
         J        Bell-Tenex/Bell   Future-Tech   Security  Agreement  (2.13(b),
                  2.13(c))
         K        Borrowing Base Certificate (5.01(a))
         L        Assignment Agreement (8.05(c))

</TABLE>

                                                       -iii-

<PAGE>



                                                                  CONFORMED COPY
                                                           THROUGH 5TH AMENDMENT

                   THIRD AMENDED AND RESTATED CREDIT AGREEMENT

         THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this "Restated Credit
Agreement"), dated as of November 12, 1998, is entered into by and among:

                  (1)  BELL   MICROPRODUCTS   INC.,  a  California   corporation
         ("Borrower");

                  (2)  Each  of the  financial  institutions  from  time to time
         listed  in  Schedule  I hereto,  as  amended  from  time to time  (such
         financial  institutions  to be referred to herein  collectively  as the
         "Banks");

                  (3) CALIFORNIA  BANK & TRUST  (formerly known as Sumitomo Bank
         of  California),   a  California  banking  corporation   ("CB&T"),   as
         administrative  agent for the Banks (in such capacity,  "Administrative
         Agent");

                  (4)   Prior   to   the   First   Amendment   Effective   Date,
         Administrative  Agent,  as  collateral  agent  for the  Banks  (in such
         capacity,  "Collateral  Agent"),  and on and after the First  Amendment
         Effective  Date,  UNION BANK OF  CALIFORNIA,  N.A., a national  banking
         association, as Collateral Agent; and

                  (5)   COMERICA    BANK-CALIFORNIA,    a   California   banking
         corporation, as co-agent for the Banks.


                                    RECITALS

         A. Borrower, Administrative Agent and the Banks are parties to a Second
Amended and Restated  Credit  Agreement  dated as of May 23, 1995 (as amended to
the date hereof, the "Existing Credit  Agreement"),  pursuant to which the Banks
have  provided  to  Borrower  (i) a  revolving  line of credit  facility  in the
principal amount of $100,000,000 and (ii) a letter of credit sub-facility in the
amount of $10,000,000 (collectively, the "Existing Credit Facility").


         B. Borrower has requested  Administrative  Agent and the Banks to amend
the Existing Credit Agreement so as to make certain changes.


         C.  Administrative  Agent  and the Banks  are  willing  so to amend the
Existing Credit Agreement upon the terms and subject to the conditions set forth
herein.  For  convenience  of reference,  the parties hereto wish to restate the
Existing Credit Agreement as so amended in its entirety.



<PAGE>


                                    AGREEMENT

         NOW,  THEREFORE,  in consideration of the above Recitals and the mutual
covenants  contained  herein,  the parties hereto hereby agree that the Existing
Credit  Agreement shall be amended and restated as of the date hereof to read in
its entirety as follows:


SECTION I. INTERPRETATION.

         1.01.  Definitions.  Unless otherwise indicated in this Restated Credit
Agreement or any other Credit  Document,  each term set forth in Schedule  1.01,
when used in this Restated Credit Agreement or any other Credit Document,  shall
have the  respective  meaning  given  to that  term in  Schedule  1.01 or in the
provision of this Restated Credit Agreement or other Credit Document  referenced
in Schedule 1.01.

         1.02.  GAAP.  Unless  otherwise   indicated  in  this  Restated  Credit
Agreement  or any other  Credit  Document,  all  accounting  terms  used in this
Restated Credit  Agreement or any other Credit Document shall be construed,  and
all  accounting  and financial  computations  hereunder or  thereunder  shall be
computed,  in  accordance  with GAAP.  If GAAP  changes  during the term of this
Restated Credit Agreement such that any covenants contained herein would then be
calculated in a different  manner or with different  components,  Borrower,  the
Banks and the Agents  agree to  negotiate  in good faith to amend this  Restated
Credit Agreement in such respects as are necessary to conform those covenants as
criteria for evaluating Borrower's financial condition to substantially the same
criteria  as were  effective  prior to such change in GAAP;  provided,  however,
that,  until  Borrower,  the Banks and the Agents so amend this Restated  Credit
Agreement,  all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.

         1.03. Headings.  Headings in this Restated Credit Agreement and each of
the other Credit  Documents are for  convenience  of reference  only and are not
part of the substance hereof or thereof.

         1.04. Plural Terms. All terms defined in this Restated Credit Agreement
or any other Credit Document in the singular form shall have comparable meanings
when used in the plural form and vice versa.

         1.05.  Time. All references in this Restated Credit  Agreement and each
of the  other  Credit  Documents  to a time of day  shall  mean  San  Francisco,
California time, unless otherwise indicated.

         1.06.  Governing  Law. This Restated  Credit  Agreement and each of the
other Credit Documents shall be governed by and construed in accordance with the
laws of the State of California without reference to conflicts of law rules.

         1.07.  Construction.  This Restated  Credit  Agreement is the result of
negotiations  among, and has been reviewed by,  Borrower,  each Bank, each Agent
and their respective counsel.  Accordingly, this Restated Credit Agreement shall
be deemed to be the product of all

                                       2

<PAGE>


parties  hereto,  and no  ambiguity  shall be  construed  in favor of or against
Borrower, any Bank or any Agent.

         1.08.  Calculation of Interest and Fees. All  calculations  of interest
and fees under this Restated Credit Agreement and the other Credit Documents for
any period (a) shall  include  the first day of such period and exclude the last
day of such  period  and (b) shall be  calculated  on the basis of a year of 360
days for actual days elapsed.

         1.09. Other Interpretive Provisions. References in this Restated Credit
Agreement to "Recitals," "Sections," "Paragraphs,"  "Subparagraphs,"  "Exhibits"
and "Schedules" are to recitals, sections, paragraphs,  subparagraphs,  exhibits
and schedules herein and hereto unless otherwise  indicated.  References in this
Restated  Credit  Agreement  and  each  of the  other  Credit  Documents  to any
document,  instrument or agreement (a) shall include all exhibits, schedules and
other  attachments  thereto,  (b) shall include all  documents,  instruments  or
agreements  issued or executed in replacement  thereof,  and (c) shall mean such
document,  instrument or agreement,  or replacement or predecessor  thereto,  as
amended,  modified and supplemented from time to time and in effect at any given
time. The words  "hereof,"  "herein" and "hereunder" and words of similar import
when used in this Restated  Credit  Agreement or any other Credit Document shall
refer to this Restated Credit  Agreement or such other Credit  Document,  as the
case may be, as a whole and not to any  particular  provision  of this  Restated
Credit  Agreement or such other Credit  Document,  as the case may be. The words
"include" and "including" and words of similar import when used in this Restated
Credit  Agreement  or any other  Credit  Document  shall not be  construed to be
limiting or exclusive. Notwithstanding references herein and in the other Credit
Documents  to each of the  financial  institutions  listed  from time to time on
Schedule I hereto as a "Bank," such references are not intended to indicate, and
should not be construed to mean, that each of such financial  institutions is in
fact a federally regulated "bank".


SECTION II. CREDIT FACILITIES.

         2.01. Revolving Loan Facility.

                  (a)  Revolving  Loan  Availability.  Subject  to the terms and
         conditions  of this Restated  Credit  Agreement  (including  the amount
         limitations set forth in Paragraph 2.03 and the conditions set forth in
         Section III),  each Bank  severally  agrees to advance to Borrower from
         time to time  during the period  beginning  on the  Effective  Date and
         ending on May 31, 2001 (the  "Revolving Loan Maturity Date") such loans
         as Borrower may request  under this  Paragraph  2.01  (individually,  a
         "Revolving Loan"); provided,  however, that the (i) aggregate principal
         amount of all Revolving Loans made by such Bank at any time outstanding
         shall not exceed such Bank's Revolving Loan Commitment at such time and
         (ii) the aggregate  principal amount of all Revolving Loans made by all
         Banks at any time outstanding shall not exceed the Total Revolving Loan
         Commitment  at such time.  All  Revolving  Loans shall be made on a pro
         rata  basis  by  the  Banks  in   accordance   with  their   respective
         Proportionate   Shares,  with  each  Revolving  Loan  Borrowing  to  be
         comprised  of a  Revolving  Loan  by each  Bank  equal  to such  Bank's
         Proportionate Share


                                       3

<PAGE>


         of such Revolving Loan Borrowing.  Except as otherwise provided herein,
         Borrower  may  borrow,  repay and  reborrow  Revolving  Loans until the
         Revolving Loan Maturity Date.

                  (b) Notice of Revolving Loan Borrowing. Borrower shall request
         each Revolving Loan Borrowing by delivering to Administrative  Agent an
         irrevocable  written  notice in the form of  Exhibit  A,  appropriately
         completed (a "Notice of Revolving Loan  Borrowing"),  which  specifies,
         among other things:

                           (i) The principal  amount of the requested  Revolving
                  Loan Borrowing;

                           (ii) Whether the requested  Revolving  Loan Borrowing
                  is to consist of (A)  Revolving  Loans which bear  interest as
                  provided in clause (i) of Subparagraph 2.01(c)  (individually,
                  a "Revolving  Prime Rate Loan") or (B)  Revolving  Loans which
                  bear  interest  as  provided  in clause  (ii) of  Subparagraph
                  2.01(c) (individually, a "Revolving LIBOR Loan");

                           (iii) If the requested Revolving Loan Borrowing is to
                  consist of Revolving LIBOR Loans,  the initial Interest Period
                  selected by Borrower for such  Revolving  Loans in  accordance
                  with Subparagraph 2.01(e); and

                           (iv)  The  date  of  the  requested   Revolving  Loan
                  Borrowing, which shall be a Business Day.

         Borrower  shall  give  each  Notice  of  Revolving  Loan  Borrowing  to
         Administrative  Agent at least three (3) Business  Days before the date
         of the requested  Revolving  Loan  Borrowing in the case of a Revolving
         Loan Borrowing consisting of Revolving LIBOR Loans and at least one (1)
         Business Day before the date of the requested  Revolving Loan Borrowing
         in the case of a Revolving Loan Borrowing consisting of Revolving Prime
         Rate Loans.  Each Notice of Revolving Loan Borrowing shall be delivered
         by first-class mail or facsimile to Administrative  Agent at the office
         or facsimile  number and during the hours  specified in Paragraph 8.01;
         provided,   however,   that   Borrower   shall   promptly   deliver  to
         Administrative  Agent the  original  of any  Notice of  Revolving  Loan
         Borrowing  initially  delivered  by  facsimile.   Each  Revolving  Loan
         Borrowing  consisting  of  Revolving  Prime Rate Loans  shall be in the
         minimum  amount of  $100,000  or an  integral  multiple  of $100,000 in
         excess thereof.  Each Revolving Loan Borrowing  consisting of Revolving
         LIBOR Loans  shall be in the minimum  amount of $500,000 or an integral
         multiple  of  $100,000 in excess  thereof.  Administrative  Agent shall
         notify each Bank no later than 5:00 p.m. California time on the date of
         receipt of each such Notice of Revolving Loan Borrowing of the contents
         thereof and of the amount and Type of each Revolving Loan to be made by
         such Bank as part of the requested Revolving Loan Borrowing.

                  (c) Revolving Loan Interest Rates. Borrower shall pay interest
         on the unpaid  principal amount of each Revolving Loan from the date of
         such Revolving Loan until the maturity thereof, at one of the following
         rates per annum:

                                       4

<PAGE>


                           (i) During such periods as such  Revolving  Loan is a
                  Revolving  Prime Rate Loan,  at a rate per annum  equal to the
                  Prime Rate, such rate to change from time to time as the Prime
                  Rate shall change; and

                           (ii) During such periods as such  Revolving Loan is a
                  Revolving  LIBOR Loan,  at a rate per annum equal at all times
                  during each  Interest  Period for such  Revolving  Loan to the
                  LIBO Rate for such Interest Period plus the Applicable  Margin
                  therefor,  such rate to change  from time to time  during such
                  Interest Period as the Applicable Margin shall change;

         provided,  however, that each of the rates set forth in clauses (i) and
         (ii) of this  Subparagraph  2.01(c)  shall be  increased by one percent
         (1.00%)  per  annum on the date an Event of  Default  occurs  and shall
         continue at such  increased rate unless and until such Event of Default
         is waived  in  accordance  with this  Restated  Credit  Agreement.  All
         Revolving  Loans in each Revolving Loan Borrowing  shall,  at any given
         time prior to  maturity,  bear  interest  at one,  and only one, of the
         above rates.

                  (d)  Conversion of Revolving  Loans.  Borrower may convert all
         Revolving Loans in any Revolving Loan Borrowing consisting of Revolving
         Prime Rate Loans into Revolving  LIBOR Loans and all Revolving Loans in
         any Revolving Loan Borrowing  consisting of Revolving  LIBOR Loans into
         Revolving Prime Rate Loans;  provided,  however, that any conversion of
         Revolving LIBOR Loans into Revolving Prime Rate Loans shall be made on,
         and only on,  the last day of an  Interest  Period  for such  Revolving
         LIBOR Loans. Borrower shall request such a conversion by an irrevocable
         written  notice  to  Administrative  Agent  in the form of  Exhibit  B,
         appropriately  completed  (a "Notice of  Revolving  Loan  Conversion"),
         which specifies, among other things:

                           (i)  The  Revolving  Loan  Borrowing  which  is to be
                  converted;

                           (ii) The  Type of Loans  into  which  such  Revolving
                  Loans are to be converted;

                           (iii) If such  Revolving  Loans  are to be  converted
                  into  Revolving  LIBOR  Loans,  the  initial  Interest  Period
                  selected by Borrower for such  Revolving  Loans in  accordance
                  with Subparagraph 2.01(e); and

                           (iv)  The  date of the  requested  conversion,  which
                  shall be a Business Day.

         Borrower  shall  give  each  Notice of  Revolving  Loan  Conversion  to
         Administrative  Agent at least three (3) Business  Days before the date
         of the requested  conversion in the case of a conversion into Revolving
         LIBOR  Loans and at least one (1)  Business  Day before the date of the
         requested  conversion in the case of a conversion  into Revolving Prime
         Rate Loans. Each Notice of Revolving Loan Conversion shall be delivered
         by first-class mail or facsimile to Administrative  Agent at the office
         or to the facsimile  number and during the hours specified in Paragraph
         8.01;  provided,  however,  that  Borrower  shall  promptly.

                                       5

<PAGE>


         deliver to Administrative Agent the original of any Notice of Revolving
         Loan Conversion initially delivered by facsimile.  Administrative Agent
         shall notify each Bank no later than 5:00 p.m.  California  time on the
         date of receipt of each such Notice of Revolving Loan Conversion of the
         contents  thereof and of the amount and Type of each  Revolving Loan to
         be  converted  by such  Bank as part of the  requested  Revolving  Loan
         Conversion.

                  (e) Revolving LIBOR Loan Interest Periods.

                           (i) The initial and each  subsequent  Interest Period
                  selected  by  Borrower  for a  Revolving  LIBOR  Loan shall be
                  thirty  (30),  sixty (60),  ninety  (90),  one-hundred  twenty
                  (120),  one-hundred  fifty (150) or  one-hundred  eighty (180)
                  days;  provided,  however,  that (A) any Interest Period which
                  would otherwise end on a day which is not a Business Day shall
                  be extended to the next  succeeding  Business  Day unless such
                  next Business Day falls in another  calendar  month,  in which
                  case  such  Interest  Period  shall  end  on  the  immediately
                  preceding  Business Day; (B) any Interest  Period which begins
                  on the last Business Day of a calendar  month (or on a day for
                  which  there  is  no  numerically  corresponding  day  in  the
                  calendar  month at the end of such Interest  Period) shall end
                  on the  last  Business  Day of a  calendar  month;  and (C) no
                  Interest  Period shall end after the  Revolving  Loan Maturity
                  Date.

                           (ii) Borrower shall notify Administrative Agent by an
                  irrevocable   written   notice  in  the  form  of  Exhibit  C,
                  appropriately  completed (a "Notice of Revolving Loan Interest
                  Period Selection"),  at least three (3) Business Days prior to
                  the last day of each Interest Period for Revolving LIBOR Loans
                  of the  Interest  Period  selected  by  Borrower  for the next
                  succeeding  Interest  Period for such  Revolving  LIBOR Loans.
                  Each Notice of Revolving Loan Interest Period  Selection shall
                  be given by first-class mail or facsimile to the office or the
                  facsimile  number and during the hours  specified in Paragraph
                  8.01; provided,  however, that Borrower shall promptly deliver
                  to  Administrative   Agent  the  original  of  any  Notice  of
                  Revolving Loan Interest Period Selection  initially  delivered
                  by facsimile. If Borrower fails to notify Administrative Agent
                  of the next  Interest  Period  for  Revolving  LIBOR  Loans in
                  accordance  with this  Subparagraph  2.01(e),  such  Revolving
                  Loans  shall  automatically  convert to  Revolving  Prime Rate
                  Loans on the last day of the current Interest Period therefor.
                  Administrative Agent shall notify each Bank no later than 5:00
                  p.m.  California  time on the  date of  receipt  of each  such
                  Notice of  Revolving  Loan  Interest  Period  Selection of the
                  contents  thereof and of the Interest Period selected for each
                  Revolving Loan.

                  (f) Scheduled  Revolving  Loan Payments.  Scheduled  Revolving
         Loan Payments.  Borrower shall repay to each Bank on the Revolving Loan
         Maturity Date the unpaid  principal  amount of each Revolving Loan made
         by such  Bank.  Borrower  shall  pay  accrued  interest  on the  unpaid
         principal  amount of each  Revolving  Loan on the last  Business Day in
         each month and upon prepayment (to the extent thereof) and at maturity.

                                       6

<PAGE>


                  (g) Purpose.  Borrower shall use the proceeds of the Revolving
         Loans made by the Banks on or after the Effective Date (i) to refinance
         the  loans  outstanding  under the  Existing  Credit  Agreement  on the
         Effective  Date and (ii) for  Borrower's  working  capital  and general
         corporate needs (including acquisitions approved by the Banks from time
         to time in their sole discretion).


         2.02. Letter of Credit Sub-facility.

                  (a)  Letter of Credit  Availability.  Subject to the terms and
         conditions  of this Restated  Credit  Agreement  (including  the amount
         limitations set forth in Paragraph  2.03),  Issuing Bank shall issue on
         behalf of Borrower from time to time during the period beginning on the
         Fifth Amendment  Effective Date and ending on the date which is fifteen
         (15) days prior to the  Revolving  Loan Maturity Date (the "LC Facility
         Expiration  Date") such letters of credit as Borrower may request under
         this Paragraph  2.02  (individually,  a "Letter of Credit");  provided,
         however, as follows:

                           (i) The aggregate  amount available for drawing under
                  all Letters of Credit at any time outstanding shall not exceed
                  Ten Million  Dollars  ($10,000,000)  (such amount,  as reduced
                  from time to time pursuant to this Restated Credit  Agreement,
                  to be referred to herein as the "LC Commitment").

                           (ii) Each  Letter of Credit  shall be an  irrevocable
                  standby Letter of Credit and the beneficiary or  beneficiaries
                  under each the Letter of Credit shall be the lender or lenders
                  providing  the  Canadian  dollar   revolving  line  of  credit
                  facility  to be  entered  into by  Bell-Tenex  in a  aggregate
                  principal  amount not to exceed the  equivalent of Ten Million
                  Dollars ($10,000,000).

                           (iii) Each Letter of Credit  shall expire on or prior
                  to the LC Facility Expiration Date.

                           (iv) Each  Letter of Credit  shall be governed by the
                  Uniform Customs and Practices for Documentary  Credits as most
                  recently  published by the  International  Chamber of Commerce
                  (the  "UCP")  prior to the date of  issuance of such Letter of
                  Credit  and the terms of the UCP are  hereby  incorporated  by
                  reference with respect to each Letter of Credit.

                           (v)  Each  Letter  of  Credit  shall  be  in  a  form
                  reasonably acceptable to Issuing Bank.

         Except as otherwise  provided  herein,  Borrower may request Letters of
         Credit,  cause or  allow  Letters  of  Credit  to  expire  and  request
         additional Letters of Credit until the LC Facility Expiration Date.

                  (b) LC  Application.  Borrower  shall  request  each Letter of
         Credit by  delivering  to Issuing  Bank (with a copy to  Administrative
         Agent)  an  irrevocable   written  application  in  a  form  reasonably
         acceptable  to Issuing Bank (it being  understood  that

                                       7

<PAGE>


         such form shall not contain terms inconsistent with the terms set forth
         in this Restated  Credit  Agreement),  appropriately  completed (an "LC
         Application"), which specifies, among other things:

                           (i) The  stated  amount  of the  requested  Letter of
                  Credit;

                           (ii) The name and address of the  beneficiary  of the
                  requested Letter of Credit;

                           (iii) The expiration date of the requested  Letter of
                  Credit  if such  date is prior to the LC  Facility  Expiration
                  Date;

                           (iv) The documentary conditions for drawing under the
                  requested Letter of Credit;

                           (v) The date of issuance for the requested  Letter of
                  Credit, which shall be a Business Day; and

                           (vi) The aggregate amount which will be available for
                  drawing under all outstanding Letters of Credit (including the
                  requested Letter of Credit), which amount shall not exceed the
                  LC Commitment.

         Borrower  shall give each LC Application to Issuing Bank at least three
         (3) Business Days before the proposed date of issuance of the requested
         Letter  of  Credit.  Each  LC  Application  shall  be  delivered  by an
         established  express courier service,  first-class mail or facsimile to
         Issuing  Bank  with a copy  thereof  to  Administrative  Agent at their
         respective  offices or facsimile numbers and during the hours specified
         in Paragraph  8.01;  provided,  however,  that Borrower  shall promptly
         deliver to Issuing  Bank the original of any LC  Application  initially
         delivered by facsimile. Administrative Agent shall promptly notify each
         Bank of the  contents  of  each LC  Application.  In the  event  of any
         conflict  between the terms of this Restated  Credit  Agreement and the
         terms  of any  LC  Application,  the  terms  of  this  Restated  Credit
         Agreement shall control.

                  (c) Disbursement and Reimbursement.

                           (i)  Disbursement.  Issuing Bank will notify Borrower
                  by facsimile  forthwith upon receipt of the presentment of any
                  demand for payment  under any Letter of Credit,  together with
                  notice of the amount of such payment and the date such payment
                  shall be made; provided, however that Issuing Bank shall incur
                  no  liability to Borrower or any third party for failure to so
                  notify.  Subject to the terms and provisions of such Letter of
                  Credit,  Issuing  Bank  shall make such  payment  (a  "Drawing
                  Payment") to the appropriate beneficiary.

                           (ii) Time of Reimbursement. Not later than 11:00 a.m.
                  on the day each Drawing Payment is to be made by Issuing Bank,
                  Borrower  shall  make or  cause to be made to  Issuing  Bank a
                  payment   in  the   amount   of  such   Drawing   Payment   (a

                                       8

<PAGE>


                  "Reimbursement  Payment");  provided,  however,  that Borrower
                  shall  make  such  Reimbursement  Payment  to,  or cause  such
                  Reimbursement  Payment to be made to, Administrative Agent for
                  the  benefit  of  the  Banks  if,   prior  to  the  time  such
                  Reimbursement  Payment  is made,  Issuing  Bank  has  notified
                  Borrower that it has  requested  the Banks  pursuant to clause
                  (ii) of  Subparagraph  2.02(d)  to pay to  Issuing  Bank their
                  respective Proportionate Shares of the Drawing Payment made by
                  Issuing  Bank.  If any such  Reimbursement  Payment is made to
                  Administrative Agent,  Administrative Agent shall promptly pay
                  to each  Bank  which has paid its  Proportionate  Share of the
                  Drawing  Payment,  such  Bank's  Proportionate  Share  of  the
                  Reimbursement  Payment and shall  promptly pay to Issuing Bank
                  the balance of such Reimbursement Payment.

                           (iii)   Reimbursement    Obligation   Absolute.   The
                  obligation of Borrower to reimburse Issuing Bank or the Banks,
                  as the case may be, for Drawing  Payments (such  obligation to
                  be referred to herein as a "Reimbursement  Obligation")  shall
                  be  absolute,  unconditional  and  irrevocable,  and  shall be
                  performed  strictly  in  accordance  with  the  terms  of this
                  Restated  Credit  Agreement  under and  without  regard to any
                  circumstances,  including,  without limitation (A) any lack of
                  validity or enforceability of any of the Credit Documents, (B)
                  the  existence  of any claim,  setoff,  defense or other right
                  which Borrower may have at any time against any beneficiary or
                  any  transferee  of any Letter of Credit (or any  Persons  for
                  whom  any  such  beneficiary  or  transferee  may be  acting),
                  Issuing Bank, Administrative Agent, Collateral Agent, any Bank
                  or any other Person,  whether in connection with this Restated
                  Credit Agreement,  the transactions  contemplated herein or in
                  the other Credit Documents,  or in any unrelated  transaction,
                  (C) any breach of contract or dispute  between  Borrower,  any
                  beneficiary  or any transferee of any Letter of Credit (or any
                  Persons for whom any such  beneficiary  or  transferee  may be
                  acting), Issuing Bank, Administrative Agent, Collateral Agent,
                  any Bank or any other  Person,  (D) any demand,  statement  or
                  other document presented under any Letter of Credit proving to
                  be forged, fraudulent,  invalid or insufficient in any respect
                  or any statement therein proving to be untrue or inaccurate in
                  any  respect,  (E) payment by Issuing Bank under any Letter of
                  Credit against presentation of a demand for payment which does
                  not comply  with the terms of such  Letter of Credit  provided
                  that Issuing Bank has used  reasonable  care in examining  all
                  documents  presented to it in  connection  with such demand in
                  accordance   with  the  UCP,   (F)  any   non-application   or
                  misapplication  by any  beneficiary  or any  transferee of any
                  Letter of Credit (or any Persons for whom any such beneficiary
                  or  transferee  may be acting) of the  proceeds of any drawing
                  under  such  Letter of Credit or (G) any delay,  extension  of
                  time, renewal,  compromise or other indulgence or modification
                  granted or agreed to by Issuing  Bank,  Administrative  Agent,
                  Collateral  Agent or any Bank,  with or  without  notice to or
                  approval  by  Borrower  (unless  such  notice or  approval  is
                  required by this Restated Credit Agreement or applicable law),
                  with respect to  Borrower's  indebtedness  under this Restated
                  Credit Agreement;  provided,  that this  Subparagraph  2.02(c)
                  shall not abrogate  any

                                       9

<PAGE>


                  right  which  Borrower  may have to seek to enjoin any drawing
                  under any Letter of Credit or to recover  damages from Issuing
                  Bank,  Administrative  Agent,  Collateral  Agent  or any  Bank
                  pursuant to Subparagraph 2.02(e).

                  (d) Bank Participations; Revolving Loan Funding.

                           (i)  Participation  Agreement.  Each Bank  severally,
                  unconditionally  and  irrevocably  agrees with Issuing Bank to
                  participate  in the  extension  of  credit  arising  from  the
                  issuance of each  Letter of Credit in an amount  equal to such
                  Bank's Proportionate Share of the stated amount of such Letter
                  of Credit from time to time,  and the  issuance of each Letter
                  of Credit shall be deemed a confirmation  by each such Bank of
                  such participation in such amount.

                           (ii) Participation Funding.  Issuing Bank may request
                  the Banks to fund their participations in Letters of Credit by
                  paying  to  Issuing  Bank all or any  portion  of any  Drawing
                  Payment made or to be made by Issuing Bank under any Letter of
                  Credit.  Issuing Bank shall make such a request by  delivering
                  to Administrative Agent (with a copy to Borrower), at any time
                  after the drawing for which such payment is requested has been
                  made upon  Issuing  Bank,  a written  request for such payment
                  which  specifies  the amount of such  Drawing  Payment and the
                  date on which such Drawing  Payment is to be made or was made;
                  provided,  however,  that  Issuing  Bank shall not request the
                  Banks to make any payment under this  Subparagraph  2.02(d) in
                  connection  with any  portion of a Drawing  Payment  for which
                  Issuing Bank has been reimbursed from a Reimbursement  Payment
                  by  Borrower  unless  such  Reimbursement   Payment  has  been
                  thereafter  recovered by Borrower.  Administrative Agent shall
                  promptly notify each Bank of the contents of each such request
                  and of  such  Bank's  Proportionate  Share  of the  applicable
                  portion of such Drawing Payment. Promptly following receipt of
                  such notice from Administrative  Agent, each Bank shall pay to
                  Administrative  Agent,  for the benefit of Issuing Bank,  such
                  Bank's  Proportionate  Share of the applicable portion of such
                  Drawing Payment.

                           (iii) Funding  Through  Revolving  Loans. At any time
                  any Reimbursement Obligations are outstanding,  Administrative
                  Agent may or,  upon the  written  request of Issuing  Bank (if
                  Borrower is not then the subject of a bankruptcy  proceeding),
                  shall   (subject   to  the  terms  and   conditions   of  this
                  Subparagraph 2.02(d)),  initiate a Revolving Loan Borrowing in
                  an  amount  not  exceeding   the  aggregate   amount  of  such
                  outstanding  Reimbursement Obligations and use the proceeds of
                  such  Loan to repay  all or a  portion  of such  Reimbursement
                  Obligations.   Administrative  Agent  shall  initiate  such  a
                  Revolving  Loan  Borrowing by  delivering to each Bank (with a
                  copy  to  Borrower)  a  written  notice  which  specifies  the
                  aggregate amount of outstanding Reimbursement Obligations, the
                  amount  of the  Revolving  Loan  Borrowing,  the  date of such
                  Revolving Loan Borrowing and the amount of the Loan to be made
                  by such Bank as part of such  Revolving Loan  Borrowing.  Each
                  Bank shall make

                                       10

<PAGE>


                  available to  Administrative  Agent funds in the amount of its
                  Proportionate  Share of such Loan as provided in  Subparagraph
                  2.09(a).  After  receipt of such funds,  Administrative  Agent
                  shall  promptly  disburse  such funds to Issuing  Bank and the
                  Banks,   as   appropriate,   in  payment  of  the  outstanding
                  Reimbursement Obligations.

                           (iv) Obligations Absolute. Each Bank's obligations to
                  fund its participations  under this Subparagraph 2.02(d) shall
                  be absolute,  unconditional  and  irrevocable and shall not be
                  affected by (A) the  occurrence or existence of any Default or
                  Event of Default, (B) any failure to satisfy any condition set
                  forth in Section III,  (C) any event or condition  which might
                  have a Material  Adverse Effect,  (D) the failure of any other
                  Bank to make any payment under this Subparagraph  2.02(d), (E)
                  any right of offset, abatement, withholding or reduction which
                  such Bank may have against Issuing Bank, Administrative Agent,
                  Collateral  Agent, any other Bank or Borrower,  (F) any event,
                  circumstance or condition set forth in Subparagraph 2.02(c) or
                  Subparagraph 2.02(e), or (G) any other event,  circumstance or
                  condition  whatsoever,  whether  or not  similar to any of the
                  foregoing; provided, that nothing in this Paragraph 2.02 shall
                  prejudice  any right which any Bank may have  against  Issuing
                  Bank for any action by Issuing  Bank which  constitutes  gross
                  negligence or willful misconduct.

                  (e) Liability of Issuing Bank, Etc.  Borrower agrees that none
         of Issuing Bank,  Administrative  Agent,  Collateral Agent or any other
         Bank (nor any of their  respective  directors,  officers or  employees)
         shall be liable or responsible for (i) the use which may be made of any
         Letter of Credit or the proceeds of any drawing  thereunder  or for any
         acts  or  omissions  of  any  beneficiary  or  transferee   thereof  in
         connection  therewith;  (ii) any  reference  which  may be made to this
         Restated Credit Agreement or to any Letter of Credit in any agreements,
         instruments or other documents relating to obligations  secured by such
         Letter of Credit;  (iii) the validity,  sufficiency  or  genuineness of
         documents,  or of any  endorsement(s)  thereon,  even if such documents
         should  in  fact  prove  to  be  in  any  or  all   respects   invalid,
         insufficient, fraudulent or forged or any statement therein prove to be
         untrue or inaccurate in any respect whatsoever; (iv) payment by Issuing
         Bank against  presentation  of  documents  which do not comply with the
         terms of any Letter of Credit,  including  failure of any  documents to
         bear any  reference  or  adequate  reference  to any  Letter of Credit,
         provided  that Issuing Bank has used  reasonable  care in examining all
         documents  presented to it in connection with a demand on any Letter of
         Credit  in  accordance  with the UCP;  or (v) any  other  circumstances
         whatsoever  in making or  failing to make  payment  under any Letter of
         Credit,  except only that  Issuing Bank shall be liable to Borrower for
         acts or events  described  in clauses  (i)  through  (v) above,  to the
         extent,  but only to the extent,  of any  damages  suffered by Borrower
         (excluding  consequential damages) which Borrower proves were caused by
         (A) Issuing Bank's willful misconduct, bad faith or gross negligence in
         determining  whether a drawing made under any Letter of Credit complies
         with the terms and conditions  therefor stated in such Letter of Credit
         or (B) Issuing Bank's willful misconduct, bad faith or gross negligence
         in  failing  to pay under any  Letter of Credit  after a drawing by the
         beneficiary thereof strictly complying with the terms and conditions of
         such Letter of Credit. Without limiting the foregoing,

                                       11

<PAGE>


         Issuing  Bank may  accept a drawing  that  appears on its face to be in
         order,   without   responsibility   for  further   investigation.   The
         determination  of  whether a drawing  has been made under any Letter of
         Credit  prior to its  expiration  or  whether a drawing  made under any
         Letter  of Credit is in proper  and  sufficient  form  shall be made by
         Issuing  Bank in its  sole  discretion,  which  determination  shall be
         conclusive  and binding upon  Borrower to the extent  permitted by law.
         Borrower  hereby  waives any right to object to any payment  made under
         any Letter of Credit  with regard to a drawing  request  that is in the
         form provided in such Letter of Credit but which varies with respect to
         punctuation, capitalization, spelling or similar matters of form.

                  (f)  Reports  of Issuing  Bank.  While any Letter of Credit is
         outstanding,   Issuing  Bank  shall  on  a  monthly  basis  provide  to
         Administrative Agent or any Bank such information regarding the Letters
         of Credit as Administrative  Agent or such Bank may reasonably request,
         including  the  Letters of Credit  outstanding,  the stated  amounts of
         outstanding  Letters of Credit,  the  expiration  dates of  outstanding
         Letters  of  Credit,  the  names of the  beneficiaries  of  outstanding
         Letters of Credit, the amounts of unpaid Reimbursement  Obligations and
         the amounts and times of Drawing Payments and Reimbursement Payments.

                  (g) Purpose.  Borrower  shall use the Letters of Credit solely
         as provided in clause (ii) of Subparagraph 2.02(a).

         2.03. Amount Limitations, Commitment Reductions, Etc.


                  (a) Borrowing Base.


                           (i) The aggregate  principal  amount of all Revolving
                  Loans  outstanding at any time, the aggregate amount available
                  for drawing under all Letters of Credit then  outstanding  and
                  the aggregate  amount of all  Reimbursement  Obligations  then
                  outstanding  (such  sum  to  be  referred  to  herein  as  the
                  "Outstanding  Facilities  Credit")  shall not exceed an amount
                  (the "Borrowing Base") equal to the lesser of:


                                    (A) The Total  Revolving Loan  Commitment at
                           such time; and

                                    (B) The sum at such time of:

                                             (1)   eighty   percent   (80%)   of
                                    Eligible Accounts; and

                                             (2) The lesser of (y) forty percent
                                    (40%)   of   Eligible   Inventory   and  (z)
                                    $60,000,000.

                           (ii)  For  the  purposes  of  this  Restated   Credit
                  Agreement,  the  Borrowing  Base on any date of  determination
                  shall be presumed to be the Borrowing Base determined pursuant
                  to  the  most  recent  of  (A)  the  latest   Borrowing   Base
                  Certificate  delivered  by  Borrower  prior  to  such  date of
                  determination  and (B) the

                                       12

<PAGE>


                  latest  audit  conducted  by or on  behalf of any Agent or any
                  Bank prior to such date of determination.


                  (b) Reduction or Cancellation  of  Commitments.  Borrower may,
         upon three (3) Business  Days written  notice to  Administrative  Agent
         (and, in the case of the LC Commitment,  to Issuing Bank),  permanently
         reduce the Total  Revolving Loan Commitment or the LC Commitment by the
         amount of One Million Dollars  ($1,000,000) or an integral  multiple of
         One Million Dollars  ($1,000,000) in excess thereof or cancel the Total
         Revolving Loan  Commitment or LC Commitment in its entirety;  provided,
         however, that:

                           (i) Borrower may not reduce the Total  Revolving Loan
                  Commitment  prior to the  Revolving  Loan Maturity  Date,  if,
                  after  giving  effect  to  such  reduction,   the  Outstanding
                  Facilities  Credit  would  exceed  the  Total  Revolving  Loan
                  Commitment; and

                           (ii) Borrower may not cancel the Total Revolving Loan
                  Commitment  prior to the  Revolving  Loan Maturity  Date,  if,
                  after giving effect to such cancellation,  any Revolving Loans
                  or Letters of Credit would then remain outstanding.

                  (c) Effect of Commitment  Reductions.  From the effective date
         of any reduction of the Total Revolving Loan Commitment,  the Revolving
         Loan Commitment Fees payable pursuant to Subparagraph  2.03(b) shall be
         computed  on the basis of the Total  Revolving  Loan  Commitment  as so
         reduced. Once reduced or cancelled, the Total Revolving Loan Commitment
         may not be increased or reinstated without the prior written consent of
         all  Banks.  Any  reduction  of the  Total  Revolving  Loan  Commitment
         pursuant to this  Paragraph  2.03 shall be applied to reduce the Banks'
         respective  Revolving  Loan  Commitments  pro rata  according  to their
         respective Proportionate Shares at the time of such reduction.

         2.04. Fees.


                  (a) Agent's Fee.  Borrower shall pay to  Administrative  Agent
         and the co-agents,  for their own account,  agent's fees in the amounts
         and at the times set forth in the Agent's Fee Letter.


                  (b) Revolving  Loan  Commitment  Fees.  Borrower  shall pay to
         Administrative  Agent,  for the  benefit  of the Banks as  provided  in
         clause (iii) of  Subparagraph  2.09(a),  nonrefundable  commitment fees
         (the "Revolving Loan Commitment  Fees") of seventeen and one-half basis
         points  (0.175%) per annum on the daily average Total Unused  Revolving
         Loan  Commitment  for the period  beginning on the  Effective  Date and
         ending on the Revolving  Loan  Maturity  Date.  Borrower  shall pay the
         Revolving Loan  Commitment  Fees in arrears on the last Business Day in
         each February,  May, August and November (commencing November 30, 1998)
         and on the Revolving Loan Maturity Date

                                       13

<PAGE>


         (or if the Total Revolving Loan Commitment is cancelled on a date prior
         to the Revolving Loan Maturity Date, on such prior date).

                  (c)  Fee  on  Increased  Commitment.  Borrower  shall  pay  to
         Administrative  Agent,  for the  benefit  of the Banks as  provided  in
         clause (iii) of Subparagraph  2.09(a),  a one time nonrefundable fee on
         the   increased   commitment   of  $75,000   (the  "Fee  on   Increased
         Commitment"). Borrower shall pay the Fee on Increased Commitment on the
         Effective Date.

                  (d) Letter of Credit Fees.

                           (i) Letter of Credit Usage Fee. Borrower shall pay to
                  Administrative  Agent, for the ratable benefit of the Banks as
                  provided   in  clause   (iv)  of   Subparagraph   2.09(a),   a
                  nonrefundable  usage fee for the  Letters  of Credit  (the "LC
                  Usage Fee") in an amount equal to $100,000.00 per year payable
                  on each  anniversary  of the issuance of the Letter of Credit,
                  $5,000  of  which  shall be the LC  Issuance  Fee for the sole
                  benefit of Issuing  Bank as  provided  in clause  (ii) of this
                  Subparagraph 2.04(d).

                           (ii) Letter of Credit  Issuance Fees.  Borrower shall
                  pay to  Administrative  Agent, for the sole benefit of Issuing
                  Bank,  nonrefundable  issuance  fees for the Letters of Credit
                  (the "LC Issuance Fees") in an amount equal to $5,000 per year
                  payable on each  anniversary  of the issuance of the Letter of
                  Credit.

                           (iii) Other Letter of Credit Fees. In addition to the
                  LC Issuance Fees,  Borrower  shall pay to Agent,  for the sole
                  benefit of Issuing Bank,  other  standard  reasonable  fees of
                  Issuing Bank for drawings  under,  transfers of and amendments
                  to any  Letter of  Credit  and  other  administrative  actions
                  performed  by Issuing  Bank in  connection  with any Letter of
                  Credit,  payable  at such  times  and in such  amounts  as are
                  consistent with Issuing Bank's standard fee policy at the time
                  of such amendment or other action.

         2.05 . Prepayments.

                  (a)  Terms  of all  Prepayments.  Upon the  prepayment  of any
         Revolving Loan (whether such prepayment is an optional prepayment under
         Subparagraph  2.05(b), a mandatory  prepayment required by Subparagraph
         2.05(c) or a mandatory  prepayment  required by any other  provision of
         this  Restated  Credit   Agreement  or  the  other  Credit   Documents,
         including,   without  limitation,   a  prepayment  upon  acceleration),
         Borrower  shall pay to the Bank which made such  Revolving Loan (i) all
         accrued  interest to the date of such prepayment on the amount prepaid,
         and (ii) if such prepayment is the prepayment of a Revolving LIBOR Loan
         on a day  other  than  the  last  day of an  Interest  Period  for such
         Revolving  LIBOR  Loan,  all amounts  payable to such Bank  pursuant to
         Paragraph 2.12.


                                       14

<PAGE>


                  (b) Optional  Prepayments.  At its option,  Borrower may, upon
         one (1)  Business  Day  notice  to  Administrative  Agent,  prepay  the
         Revolving  Loans  in  any  Revolving  Loan  Borrowing  in  part,  in an
         aggregate principal amount of $100,000 or more, or in whole.


                  (c) Mandatory  Prepayments.  If, at any time, the  Outstanding
         Facilities  Credit  exceeds the Borrowing  Base at such time,  Borrower
         shall   immediately   prepay   Revolving  Loans  and/or   Reimbursement
         Obligations then outstanding,  and, to the extent necessary, provide to
         Administrative  Agent cash collateral for any then outstanding  Letters
         of Credit, in an aggregate amount equal to such excess.


                  (d)  Application  of  Principal  Prepayments.  If no  Event of
         Default has  occurred  and is  continuing,  all  prepayments  which are
         applied to reduce the  principal  amount of  Revolving  Loans  shall be
         applied to Revolving  Loans as directed by Borrower.  If Borrower fails
         to direct the  application of any such  principal  prepayments or if an
         Event  of  Default  has  occurred  and is  continuing,  such  principal
         prepayments  shall  be  applied  first  to  Revolving  Loan  Borrowings
         consisting  of Revolving  Prime Rate Loans and then to  Revolving  Loan
         Borrowings  consisting  of Revolving  LIBOR in  chronological  order of
         maturity.


         2.06. Other Payment Terms.


                  (a) Place and Manner.  Borrower shall make all payments due to
         each Bank  hereunder  by  payments  to  Administrative  Agent,  for the
         account of such Bank and such  Bank's  Applicable  Lending  Office,  at
         Administrative  Agent's  office,  located at the address  specified  in
         Subparagraph  8.01(a), in lawful money of the United States and in same
         day or  immediately  available  funds not later than 10:00 a.m.  on the
         date due.  Amounts  received  after 10:00 a.m.  shall be deemed to have
         been  received on the next  Business  Day.  Administrative  Agent shall
         promptly disburse to each Bank no later than 1:00 p.m.  California time
         on  the  date  of  such   receipt   each  such   payment   received  by
         Administrative  Agent for such Bank. Borrower hereby requests,  directs
         and  authorizes  Administrative  Agent to  effect  the  payment  of all
         regularly  scheduled  principal,  interest and fee payments  payable by
         Borrower  under this  Restated  Credit  Agreement  or any other  Credit
         Document  and all fees and  expenses  payable by  Borrower  pursuant to
         Paragraph 8.02 by debiting any deposit  account  maintained by Borrower
         with CB&T for the amounts thereof when due.

                  (b) Date. Whenever any payment due hereunder shall fall due on
         a day other than a Business Day, such payment shall be made on the next
         succeeding  Business Day, and such  extension of time shall be included
         in the computation of interest or fees, as the case may be.

                  (c)  Late  Payments.  If any  amounts  required  to be paid by
         Borrower  under this  Restated  Credit  Agreement  or the other  Credit
         Documents (including, without limitation, principal or interest payable
         on any Revolving  Loan, any fees or other amounts)  remain

                                       15

<PAGE>


         unpaid after such amounts are due,  Borrower  shall pay interest on the
         aggregate,  outstanding balance of such amounts from the date due until
         those  amounts  are paid in full at a per annum rate equal to the Prime
         Rate plus two percent (2.00%), such rate to change from time to time as
         the Prime Rate shall change.

                  (d) Application of Payments.  All payments  hereunder shall be
         applied  first to unpaid fees,  costs and expenses then due and payable
         under this  Restated  Credit  Agreement or the other Credit  Documents,
         second to accrued  interest  then due and payable  under this  Restated
         Credit  Agreement or the other Credit  Documents  and finally to reduce
         the principal amount of outstanding Revolving Loans.


                  (e) Failure to Pay Administrative Agent. Unless Administrative
         Agent  shall  have  received  notice  from  Borrower  at least  one (1)
         Business Day prior to the date on which any payment is due to the Banks
         hereunder   that   Borrower   will  not  make  such  payment  in  full,
         Administrative  Agent may assume that Borrower has made such payment in
         full to Administrative Agent on such date and Administrative Agent may,
         in reliance upon such assumption,  cause to be distributed to each Bank
         on such due date an amount  equal to the amount then due such Bank.  If
         and to the extent  Borrower shall not have so made such payment in full
         to Administrative  Agent, such Bank shall repay to Administrative Agent
         forthwith on demand such amount  distributed to such Bank together with
         interest thereon, for each day from the date such amount is distributed
         to  such  Bank  until  the  date  such  Bank   repays  such  amount  to
         Administrative  Agent,  at the Federal  Funds Rate.  A  certificate  of
         Administrative  Agent submitted to any Bank with respect to any amounts
         owing by such Bank under this Subparagraph  2.06(e) shall be conclusive
         absent manifest error.

         2.07. Notes and Interest Account.


                  (a) Revolving Loan Notes.  The obligation of Borrower to repay
         the  Revolving  Loans made by each Bank and to pay interest  thereon at
         the rates  provided  herein shall be evidenced by a promissory  note in
         the form of Exhibit D  (individually,  a  "Revolving  Loan Note") which
         note shall be (i) payable to the order of such Bank, (ii) in the amount
         of such Bank's  Revolving  Loan  Commitment,  (iii) dated the Effective
         Date and (iv) otherwise  appropriately  completed.  Borrower authorizes
         each Bank to record on the  schedule  annexed to such Bank's  Revolving
         Loan Note the date and amount of each  Revolving Loan made by such Bank
         and of  each  payment  or  prepayment  of  principal  thereon  made  by
         Borrower,  and agrees that all such notations  shall  constitute  prima
         facie  evidence of the  matters  noted,  provided  that a failure to so
         record shall not affect Borrower's  obligations to repay each Revolving
         Loan,  interest thereon and all other amounts payable hereunder,  under
         such Revolving Loan Note or under any other Credit  Document.  Borrower
         further  authorizes  each  Bank to  attach  to and  make a part of such
         Bank's  Revolving  Loan Note  continuations  of the  schedule  attached
         thereto as necessary.

                  (b) Interest Account. Borrower authorizes Administrative Agent
         to record in an account or accounts maintained by Administrative  Agent
         on its books (the "Interest

                                       16

<PAGE>


         Account") (i) the interest rates  applicable to all Revolving Loans and
         the effective  dates of all changes  thereto,  (ii) the Interest Period
         for each  Revolving  LIBOR  Loan,  (iii)  the date and  amount  of each
         principal  and interest  payment on each  Revolving  Loan and (iv) such
         other  information as  Administrative  Agent may determine is necessary
         for the computation of interest payable by Borrower hereunder.


         2.08. Loan Funding.


                  (a) Bank  Funding  and  Disbursement  to  Borrower.  Each Bank
         shall,  before 11:00 a.m. on the date of each Revolving Loan Borrowing,
         make  available  to  Administrative  Agent at its office  specified  in
         Paragraph 8.01, in same day or immediately available funds, such Bank's
         Proportionate   Share  of  such   Revolving   Loan   Borrowing.   After
         Administrative  Agent's  receipt of such funds and upon  fulfillment of
         the  applicable  conditions  set forth in Section  III,  Administrative
         Agent will  promptly  disburse  such  funds in same day or  immediately
         available  funds to Borrower.  Unless  otherwise  directed by Borrower,
         Administrative Agent shall disburse the proceeds of each Revolving Loan
         Borrowing  to  Borrower  by  disbursement  to the  account or  accounts
         specified in the applicable Notice of Revolving Loan Borrowing.


                  (b) Bank Failure to Fund.  Unless  Administrative  Agent shall
         have  received  notice  from a Bank prior to the date of any  Revolving
         Loan Borrowing that such Bank will not make available to Administrative
         Agent such Bank's Proportionate Share of such Revolving Loan Borrowing,
         Administrative  Agent may assume  that such Bank has made such  portion
         available to  Administrative  Agent on the date of such  Revolving Loan
         Borrowing in accordance with Subparagraph  2.08(a),  and Administrative
         Agent may, in reliance upon such assumption, make available to Borrower
         (or otherwise  disburse) on such date a  corresponding  amount.  If any
         Bank  does  not  make  the  amount  of its  Proportionate  Share of any
         Revolving Loan Borrowing available to Administrative  Agent on or prior
         to the date of such  Revolving Loan  Borrowing,  such Bank shall pay to
         Administrative  Agent,  on demand,  interest which shall accrue on such
         amount until made available to  Administrative  Agent at rates equal to
         (i) the daily  Federal  Funds Rate  during the period  from the date of
         such Revolving Loan Borrowing through the third Business Day thereafter
         and (ii) the Prime Rate  thereafter.  A certificate  of  Administrative
         Agent  submitted  to any Bank with  respect to any amounts  owing under
         this Subparagraph 2.08(b) shall be conclusive absent manifest error. If
         any Bank's  Proportionate  Share of any Revolving Loan Borrowing is not
         in fact made  available  to  Administrative  Agent by such Bank  within
         three  (3)  Business  Days  after  the  date  of  such  Revolving  Loan
         Borrowing,  Borrower shall pay to  Administrative  Agent, on demand, an
         amount  equal  to  such  Proportionate  Share  together  with  interest
         thereon,  for each day from the date such amount was made  available to
         Borrower until the date such amount is repaid to Administrative  Agent,
         at the interest  rate  applicable  at the time to the  Revolving  Loans
         comprising such Revolving Loan Borrowing.


                  (c) Banks'  Obligations  Several.  The  failure of any Bank to
         make the Revolving  Loan to be made by it as part of any Revolving Loan
         Borrowing shall not

                                       17

<PAGE>

         relieve  any  other  Bank  of its  obligation  hereunder  to  make  its
         Revolving  Loan on the date of such Revolving  Loan  Borrowing,  but no
         Bank shall be responsible for the failure of any other Bank to make the
         Revolving  Loan  to be  made by  such  other  Bank  on the  date of any
         Revolving Loan Borrowing.


         2.09. Pro Rata Treatment.


                  (a)  Borrowings,   Commitment   Reductions,   Etc.  Except  as
         otherwise provided herein:


                           (i)   Each   Revolving   Loan   Borrowing   and  each
                  participation in a Letter of Credit shall be made by the Banks
                  pro rata according to their respective Proportionate Shares at
                  the time of such  Revolving  Loan Borrowing or with respect to
                  such  participation  in Letters of Credit,  in accordance with
                  Subparagraph 2.02(d)(ii) hereof;

                           (ii)  Each  reduction  of the  Total  Revolving  Loan
                  Commitment shall be applied to reduce the respective Revolving
                  Loan  Commitments  of the Banks as  provided  in  Subparagraph
                  2.03(c);


                           (iii) Each  payment of  principal  of and interest on
                  Revolving  Loans in any Revolving Loan Borrowing shall be made
                  or  shared  among the Banks  holding  Revolving  Loans in such
                  Revolving  Loan Borrowing pro rata according to the respective
                  unpaid principal  amounts of such Revolving Loans held by such
                  Banks;


                           (iv) Each Reimbursement  Payment and interest payable
                  by Borrower thereon shall be shared among the Banks (including
                  Issuing  Bank)  which  made or funded the  applicable  Drawing
                  Payment pro rata according to the  respective  amounts of such
                  Drawing Payment so made or funded by such Banks;

                           (v) Each payment of Revolving  Loan  Commitment  Fees
                  and the Fee on Increased  Commitment shall be shared among the
                  Banks pro rata  according  to their  respective  Proportionate
                  Shares  provided that in the case of each Bank which becomes a
                  Bank  hereunder  after the date  hereof,  the  Revolving  Loan
                  Commitment  Fees shall be shared with such Bank  commencing on
                  the date upon which such Bank so became a Bank; and

                           (vi) Each  payment  of LC Usage  Fees shall be shared
                  among the Banks  (including  Issuing Bank in its capacity as a
                  Bank) pro rata  according  to their  respective  Proportionate
                  Shares  provided that in the case of each Bank which becomes a
                  Bank hereunder after the date hereof,  the LC Usage Fees shall
                  be shared  with such Bank  commencing  on the date upon  which
                  such Bank so became a Bank; and

                                       18

<PAGE>


                           (vii) All other payments  under this Restated  Credit
                  Agreement  and the  other  Credit  Documents  shall be for the
                  benefit of the Person or Persons specified.


                  (b) Sharing of Payments, Etc.


                           (i) If any Bank  shall  obtain any  payment  (whether
                  voluntary,  involuntary,  through the exercise of any right of
                  setoff,  or  otherwise)  on  account  of  Revolving  Loans  or
                  Reimbursement  Obligations owed to it in excess of its ratable
                  share of payments on account of such Revolving  Loans obtained
                  by all  Banks  entitled  to such  payments,  such  Bank  shall
                  forthwith purchase an assignment from the other Banks entitled
                  to such  excess  payments in the  Revolving  Loans as shall be
                  necessary  to cause such  purchasing  Bank to share the excess
                  payment ratably with each of them; provided,  however, that if
                  all or any  portion  of  such  excess  payment  is  thereafter
                  recovered from such  purchasing  Bank,  such purchase shall be
                  rescinded  and each other Bank shall  repay to the  purchasing
                  Bank  the  purchase  price  to the  extent  of  such  recovery
                  together  with an amount  equal to such other  Bank's  ratable
                  share  (according to the  proportion of (i) the amount of such
                  other  Bank's  required  repayment to (ii) the total amount so
                  recovered from the  purchasing  Bank) of any interest or other
                  amount  paid or payable by the  purchasing  Bank in respect of
                  the total amount so recovered.

                           (ii)  Borrower  agrees that any Bank so purchasing an
                  assignment  from  another Bank  pursuant to this  Subparagraph
                  2.09(b) may, to the fullest extent permitted by law,  exercise
                  all its rights of payment (including the right of setoff) with
                  respect to such  assignment  as fully as if such Bank were the
                  direct creditor of Borrower in the amount of such assignment.

                  2.10. Change of Circumstances.


                  (a) Inability to Determine  Rates.  If, on or before the first
         day of any Interest  Period for any Revolving  LIBOR Loan, (i) any Bank
         shall advise  Administrative Agent that the LIBO Rate for such Interest
         Period  cannot  be  adequately  and  reasonably  determined  due to the
         unavailability of funds in or other circumstances  affecting the London
         interbank  market or (ii) any Bank shall  advise  Administrative  Agent
         that  the  rates of  interest  for such  Revolving  LIBOR  Loans do not
         adequately  and  fairly  reflect  the cost to such  Bank of  making  or
         maintaining  such  Revolving  LIBOR Loans,  Administrative  Agent shall
         immediately give notice of such condition to Borrower. After the giving
         of any such  notice  and until  Administrative  Agent  shall  otherwise
         notify Borrower that the circumstances giving rise to such condition no
         longer exist,  Borrower's  right to request the making of or conversion
         to, and the Banks'  obligations  to make or convert to Revolving  LIBOR
         Loans shall be suspended.  Any Revolving LIBOR Loans outstanding at the
         commencement  of any such  suspension  shall be converted at the end of
         the then current  Interest  Period for such Revolving  LIBOR Loans into
         Revolving Prime Rate Loans unless such suspension has then ended.

                                       19

<PAGE>


                  (b)  Illegality.  If, after the date of this  Restated  Credit
         Agreement  the  adoption of any  Governmental  Rule,  any change in any
         Governmental  Rule or the application or requirements  thereof (whether
         such change  occurs in accordance  with the terms of such  Governmental
         Rule as enacted, as a result of amendment or otherwise),  any change in
         the  interpretation  or  administration of any Governmental Rule by any
         Governmental  Authority,  or compliance by any Bank with any request or
         directive  (whether or not having the force of law)of any  Governmental
         Authority (a "Change of Law") shall make it unlawful or impossible  for
         any Bank to make or maintain any Revolving  LIBOR Loan, such Bank shall
         immediately notify  Administrative Agent and Borrower of such Change of
         Law. Upon receipt of such notice,  (i) Borrower's  right to request the
         making of or  conversion  to,  and the  Banks'  obligations  to make or
         convert  to,  Revolving  LIBOR  Loans  shall  be  terminated,  and (ii)
         Borrower  shall,  at the  request of any Bank,  either (A)  pursuant to
         Subparagraph 2.01(d) convert any such then outstanding  Revolving LIBOR
         Loans  into  Revolving  Prime  Rate  Loans  at the  end of the  current
         Interest  Period for such  Revolving  LIBOR Loans,  or (B)  immediately
         repay or  convert  any such  Revolving  LIBOR  Loans if any Bank  shall
         notify  Borrower  that the such Bank may not lawfully  continue to fund
         and maintain such Revolving  LIBOR Loans.  Any conversion or prepayment
         of Revolving LIBOR Loans made pursuant to the preceding  sentence prior
         to the last day of an Interest  Period for such  Revolving  LIBOR Loans
         shall be deemed a prepayment  thereof for  purposes of  Paragraph 2.12.

                  (c)  Increased  Costs.  If,  after  the date of this  Restated
         Credit Agreement, any Change of Law:

                           (i) Shall  subject any Bank to any tax, duty or other
                  charge with  respect to any  Revolving  LIBOR  Loan,  or shall
                  change the basis of  taxation  of  payments by Borrower to any
                  Bank on such a  Revolving  LIBOR  Loan or in respect to such a
                  Revolving  LIBOR  Loan under this  Restated  Credit  Agreement
                  (except for changes in the rate of taxation on the overall net
                  income of any Bank); or

                           (ii)  Shall  impose,  modify or hold  applicable  any
                  reserve, special deposit or similar requirement against assets
                  held by,  deposits or other  liabilities in or for the account
                  of, advances or loans by, or any other acquisition of funds by
                  any Bank for any Revolving LIBOR Loan; or

                           (iii)  Shall  impose on any Bank any other  condition
                  related  to any  Revolving  LIBOR Loan or its  Revolving  Loan
                  Commitment;

         And the effect of any of the  foregoing is to increase the cost to such
         Bank of making,  renewing, or maintaining any such Revolving LIBOR Loan
         or its Revolving Loan Commitment or to reduce any amount  receivable by
         such Bank hereunder  (and, in the case of a Revolving  LIBOR Loan, such
         increased  cost or reduced  amount is not fully  reflected  in the LIBO
         Rate applicable to such Revolving LIBOR Loan); then Borrower shall from
         time to time,  upon  demand by such Bank,  pay to such Bank  additional


                                       20

<PAGE>

         amounts  sufficient to reimburse such Bank for such increased  costs or
         to compensate such Bank for such reduced  amounts.  A Bank shall demand
         such additional amounts by delivering to Borrower a written certificate
         which sets forth in reasonable  detail the  allocation of the increased
         costs or  reduced  amounts  to such  Bank's  Revolving  LIBOR  Loans or
         Revolving  Loan  Commitment,  as the case may be, and the  calculations
         from which such costs or amounts were derived,  which certificate shall
         constitute  prima  facie  evidence of such  increased  costs or reduced
         amounts.

                  (d) Capital Requirements.  If, after the date of this Restated
         Credit  Agreement,  any  Bank  determines  that (i) any  Change  of Law
         affects the amount of capital  required or expected to be maintained by
         such Bank or any  Person  controlling  such Bank (a  "Capital  Adequacy
         Requirement"),  (ii) the amount of capital  maintained  by such Bank or
         such Person which is attributable to or based upon the Revolving Loans,
         the Letters of Credit,  the Revolving Loan Commitments or this Restated
         Credit Agreement must be increased as a result of such Capital Adequacy
         Requirement  (taking into account such Bank's or such Person's policies
         with  respect to capital  adequacy)  and (iii) in the case of increased
         capital  attributable  to  or  based  upon  the  Revolving  Loans,  the
         increased  costs to such Bank or such Person of such increased  capital
         is  not  fully  reflected  in  the  interest  rates  applicable  to the
         Revolving Loans  hereunder and such Bank or such Person's  capital as a
         consequence  of its Revolving Loan  Commitments or the Revolving  Loans
         made by such Bank or such Person is reduced to a level below that which
         such Bank or such Person,  as the case may be, could have  achieved but
         for the occurrence of any such circumstance; then Borrower shall pay to
         such Bank or such  Person,  upon demand of such Bank,  such  amounts as
         such Bank or such Person shall  determine  are  necessary to compensate
         such Bank or such Person for the  increased  costs to such Bank or such
         Person of such  increased  capital  and for such  reduction  in rate of
         return.  A Bank shall demand such amounts by  delivering  to Borrower a
         written   certificate   which  sets  forth  in  reasonable  detail  the
         allocation  of the  increased  costs to such  Bank's  Revolving  Loans,
         Letters of Credit,  Revolving Loan  Commitment or this Restated  Credit
         Agreement,  as the case may be,  and the  calculations  from which such
         costs were derived,  which  certificate  shall  constitute  prima facie
         evidence of such increased costs.

               2.11. Taxes on Payments.

                  (a)  Payments  Free of Taxes.  All  payments  made by Borrower
         under this Restated  Credit  Agreement  and the other Credit  Documents
         shall be made free and clear of, and without  deduction or  withholding
         for or on account  of, any  present  or future  income,  stamp or other
         taxes,  levies,   imposts,   duties,   charges,   fees,  deductions  or
         withholdings,  now or hereafter imposed, levied, collected, withheld or
         assessed by any  Governmental  Authority  (except net income  taxes and
         franchise  taxes in lieu of net income taxes  imposed on any Agent or a
         Bank  as a  result  of a  present  or  former  connection  between  the
         jurisdiction of the Governmental  Authority  imposing such tax and such
         Agent or such Bank,  excluding a  connection  arising  solely from such
         Agent  or  such  Bank  having  executed,  delivered  or  performed  its
         obligations  or received a payment  under,  or enforced,  this Restated
         Credit Agreement or the other Credit  Documents) (all


                                       21

<PAGE>

         such  non-excluded  taxes,  levies,  imposts,  duties,  charges,  fees,
         deductions and withholdings being hereinafter  called "Taxes").  If any
         Taxes are required to be withheld from any amounts payable to any Agent
         or any Bank hereunder or under the other Credit Documents,  the amounts
         so payable to such Agent or such Bank shall be  increased to the extent
         necessary  to yield to such  Agent or such Bank  (after  payment of all
         Taxes)  interest or any such other  amounts  payable  hereunder  at the
         rates or in the amounts specified in this Restated Credit Agreement and
         the other Credit Documents. Whenever any Taxes are payable by Borrower,
         as   promptly   as  possible   thereafter,   Borrower   shall  send  to
         Administrative  Agent for its own  account  or for the  account of such
         other Agent or such Bank,  as the case may be, a  certified  copy of an
         original official receipt received by Borrower showing payment thereof.
         If Borrower fails to pay any Taxes when due to the  appropriate  taxing
         authority  or  fails  to remit to  Administrative  Agent  the  required
         receipts  or  other  required  documentary  evidence,   Borrower  shall
         indemnify the Agents and the Banks for any incremental taxes,  interest
         or  penalties  that may  become  payable  by any Agent or any Bank as a
         result of any such failure. The agreements in this Subparagraph 2.11(a)
         shall survive the termination of this Restated Credit Agreement.

                  (b)  Withholding  Exemption  Certificates.  On or prior to the
         Effective  Date (or the  Assignment  Effective  Date in the case of any
         Bank which becomes a Bank  hereunder  after the Effective  Date),  each
         Bank which is not  incorporated  under the laws of the United States of
         America or a state thereof shall deliver to Borrower and Administrative
         Agent  two duly  completed  copies of United  States  Internal  Revenue
         Service Form 1001 or 4224 (or successor  applicable  form), as the case
         may be,  certifying  in each case that such Bank is entitled to receive
         payments  under this Restated  Credit  Agreement  without  deduction or
         withholding of any United States federal income taxes.  Each Bank which
         delivers  to  Borrower  and  Administrative  Agent a Form  1001 or 4224
         pursuant to the immediately  preceding  sentence further  undertakes to
         deliver to Borrower and Administrative  Agent two further copies of the
         said letter and Form 1001 or 4224 (or successor  applicable  forms), or
         other manner of certification  or procedure,  as the case may be, on or
         before  the date  that any  such  letter  or form  expires  or  becomes
         obsolete or after the occurrence of any event requiring a change in the
         most recent letter and form previously  delivered by it to Borrower and
         Administrative  Agent,  and such extensions or renewals  thereof as may
         reasonably be requested by Borrower or Administrative Agent, certifying
         in the  case of a Form  1001 or 4224  that  such  Bank is  entitled  to
         receive payments under this Restated Credit Agreement without deduction
         or withholding of any United States federal income taxes, unless in any
         such cases an event (including without limitation any change in treaty,
         law or  regulation)  has  occurred  prior to the date on which any such
         delivery  would  otherwise  be  required  which  renders all such forms
         inapplicable  or which would  prevent a Bank from duly  completing  and
         delivering  any such  letter or form with  respect  to it and such Bank
         advises  Borrower  and  Administrative  Agent that it is not capable of
         receiving  payments  without any  deduction  or  withholding  of United
         States  federal  income tax.  Borrower shall not be required to pay any
         additional amounts to Administrative Agent or any Bank hereunder to the
         extent that the  obligation  to pay such  additional  amounts would not
         have arisen but for a failure by  Administrative  Agent


                                       23

<PAGE>

         or such Bank to comply with the provisions of this Subparagraph 2.11(b)
         or the last sentence of Subparagraph 8.05(c).

                  2.12.  Funding  Loss  Indemnification.  If Borrower  shall (a)
         repay or prepay any Revolving LIBOR Loan on any day other than the last
         day of an Interest Period therefor (whether an optional  prepayment,  a
         mandatory  prepayment,  a payment upon acceleration or otherwise),  (b)
         fail to borrow any Revolving LIBOR Loan for which a Notice of Revolving
         Loan Borrowing has been delivered to Administrative Agent (whether as a
         result  of  the  failure  to  satisfy  any  applicable   conditions  or
         otherwise) or (c) fail to convert any  Revolving  Prime Rate Loans into
         Revolving  LIBOR Loans in  accordance  with a Notice of Revolving  Loan
         Conversion  delivered to  Administrative  Agent (whether as a result of
         the  failure  to  satisfy  any  applicable  conditions  or  otherwise),
         Borrower shall,  upon demand by any Bank,  reimburse such Bank and hold
         such Bank harmless for all costs and losses  actually  incurred by such
         Bank as a result of such  repayment,  prepayment  or failure.  Borrower
         understands that such costs and losses may include, without limitation,
         losses  incurred by a Bank as a result of funding  and other  contracts
         entered into by such Bank to fund or in connection  with the funding of
         a Revolving  LIBOR Loan.  A Bank shall  demand  such  reimbursement  by
         delivering  to  Borrower  a written  certificate  which  sets  forth in
         reasonable detail the allocation of the costs and losses to such Bank's
         Revolving Loans and the  calculations  from which such costs and losses
         were derived,  which  certificate shall constitute prima facie evidence
         of such costs and losses.

                  2.13. Security

                  (a) Security Agreements; Guaranties; Etc. on Effective Date On
         the Effective Date, the Obligations shall be secured by the following:

                           (i) A Third Amended and Restated  Security  Agreement
                  in the form of  Exhibit  E, duly  executed  by  Borrower  (the
                  "Borrower Security Agreement");

                           (ii) A Third Amended and Restated Pledge Agreement in
                  the  form  of  Exhibit  F,  duly  executed  by  Borrower  (the
                  "Borrower Pledge Agreement"); and

                           (iii) A  Guaranty  in the  form of  Exhibit  G,  duly
                  executed by Bell Canada (the "Bell Canada Guaranty").

                  (b) Additional Security  Agreements;  Guaranties;  Etc. on the
         Tenex  Data  Acquisition  Effective  Date On and after  the Tenex  Data
         Acquisition  Effective Date, the  Obligations  shall also be secured by
         the following:

                           (i) A Pledge  Agreement  substantially in the form of
                  Exhibit H, duly  executed  by Bell  Canada  (the "Bell  Canada
                  Pledge Agreement").

                           (ii) A Guaranty  substantially in the form of Exhibit
                  I, duly executed by Bell-Tenex (the "Bell-Tenex Guaranty");


                                       23

<PAGE>

                           (iii) A Security Agreement  substantially in the form
                  of Exhibit J, duly  executed by  Bell-Tenex  (the  "Bell-Tenex
                  Security Agreement"); and

                           (iv)  One or  more  additional  security  agreements,
                  pledge   agreements,   guaranties   and   other   instruments,
                  agreements,     certificates,     opinions    and    documents
                  (collectively,  the "Bell-Tenex  Canadian Security Documents")
                  as either  Agent may  request  to  grant,  perfect,  maintain,
                  protect and evidence security interests in favor of Collateral
                  Agent, for the benefit of the Banks, in any or all present and
                  future personal property of Bell-Tenex located in Canada prior
                  to the Liens (other than Permitted  Liens) or other  interests
                  of any Person.

                  (c) Additional Security  Agreements;  Guaranties;  Etc. on the
         Future  Tech  Acquisition  Effective  Date On and after the Future Tech
         Acquisition  Effective Date, the  Obligations  shall also be secured by
         the following:

                           (i) A Guaranty  substantially  in the form of Exhibit
                  I, duly executed by Bell-Future  Tech (the  "Bell-Future  Tech
                  Guaranty");

                           (ii) A Security  Agreement  substantially in the form
                  of  Exhibit  J,  duly  executed  by   Bell-Future   Tech  (the
                  "Bell-Future Tech Security Agreement"); and

                  One or more additional security agreements, pledge agreements,
         guaranties and other instruments,  agreements,  certificates,  opinions
         and documents (collectively, the "Bell-Future Tech Security Documents")
         as either Agent may request to grant,  perfect,  maintain,  protect and
         evidence  security  interests  in favor of  Collateral  Agent,  for the
         benefit  of  the  Banks,  in any or all  present  and  future  personal
         property of  Bell-Future  Tech prior to the Liens (other than Permitted
         Liens) or other interests of any Person.

                  (d) Further  Assurances.  Borrower shall deliver to Collateral
         Agent, and shall cause each of Bell Canada,  Bell-Tenex and Bell-Future
         Tech  to  deliver,   such  additional   security   agreements,   pledge
         agreements, guaranties and other instruments, agreements, certificates,
         opinions and documents  (including  Uniform  Commercial  Code financing
         statements  and fixture  filings and landlord  waivers) as either Agent
         may request to:

                           (i) Grant,  perfect,  maintain,  protect and evidence
                  security  interests  in favor  of  Collateral  Agent,  for the
                  benefit  of  the  Banks,  in any or  all  present  and  future
                  personal  property of Borrower and its  Subsidiaries  prior to
                  the  Liens  or  other  interests  of any  Person  (other  than
                  Permitted Liens); or

                           (ii)  Otherwise  establish,   maintain,  protect  and
                  evidence the rights provided to Collateral Agent and the Banks
                  pursuant to the Security Documents.

         Borrower  shall  fully  cooperate  with  the  Agents  and  perform  all
         additional  acts  reasonably  requested  by the  Agents to  effect  the
         purposes of this Paragraph 2.13.


                                       24

<PAGE>

SECTION III.  CONDITIONS PRECEDENT.

         3.01.  Conditions Precedent to Initial Revolving Loans. The obligations
of the Banks to make the Revolving Loans in the initial Revolving Loan Borrowing
on or after the Effective Date are subject to receipt by  Administrative  Agent,
on or prior to the Effective Date, of (a) the Notice of Revolving Loan Borrowing
requesting  such  Revolving  Loan  Borrowing  delivered in accordance  with this
Restated  Credit  Agreement and (b) each item listed in Schedule  3.01,  each in
form and substance  satisfactory to  Administrative  Agent,  and with sufficient
copies for, Administrative Agent, Collateral Agent and each Bank.

         3.02. Conditions Precedent to Each Credit Event. The occurrence of each
Credit Event,  including the initial  Revolving  Loan  Borrowing on or after the
Effective  Date,  is subject  to the  further  conditions  that on the date such
Credit  Event is to occur and after  giving  effect to such  Credit  Event,  the
following shall be true and correct:

                  (a) The  representations and warranties set forth in Paragraph
         4.01 are true and correct in all  material  respects as if made on such
         date;

                  (b) No  Default  or  Event  of  Default  has  occurred  and is
         continuing or will result from such Credit Event;

                  (c) Each of the Credit  Documents  required to be delivered to
         Administrative Agent,  Collateral Agent or any Bank on or prior to such
         date remains in full force and effect  (except as  otherwise  agreed by
         Administrative Agent in writing); and

                  (d) In the case of Credit Events  consisting of Revolving Loan
         Borrowings or the issuance of a Letter of Credit (or any amendment of a
         Letter of Credit  that  increases  its  stated  amount or  extends  its
         maturity date), no material adverse change in the Eligible  Accounts or
         Eligible  Inventory  which  comprises  the  Borrowing  Base  shall have
         occurred  since the later date of (i) the latest audit  conducted by or
         on behalf of  Administrative  Agent,  Collateral Agent or any Bank, and
         (ii) the most recent Borrowing Base Certificate.

The submission by Borrower to Administrative  Agent or Issuing Bank, as the case
may be, of each Notice of  Revolving  Loan  Borrowing,  each Notice of Revolving
Loan Conversion,  each LC Application and each Notice of Revolving Loan Interest
Period Selection shall be deemed to be a representation and warranty by Borrower
as of the date thereon as to the above.

         3.03. Covenant to Deliver. Borrower agrees (not as a condition but as a
covenant) to deliver to  Administrative  Agent or Collateral  Agent, as the case
may be, each item required to be delivered to Administrative Agent or Collateral
Agent,  as the case may be, as a condition to the occurrence of any Credit Event
if such Credit Event occurs.  Borrower  expressly  agrees that the occurrence of
any such Credit Event prior to the receipt by Administrative Agent or Collateral
Agent,  as the case may be, of any such item  shall not  constitute  a waiver by
Administrative  Agent,  Collateral Agent or any Bank of Borrower's obligation to
deliver such item.


                                       25

<PAGE>

SECTION IV.  REPRESENTATIONS AND WARRANTIES.

         4.01. Borrower's Representations and Warranties. In order to induce the
Agents  and the Banks to enter into this  Restated  Credit  Agreement,  Borrower
hereby represents and warrants to the Agents and the Banks as follows:

                  (a) Due  Incorporation,  Qualification,  etc. Each of Borrower
         and its  Subsidiaries  (i) is a  corporation  duly  organized,  validly
         existing  and  in  good  standing  under  the  laws  of  its  state  of
         incorporation;  (ii) has the  power  and  authority  to own,  lease and
         operate its properties and carry on its business as now conducted;  and
         (iii) is duly  qualified,  licensed to do business and in good standing
         as a foreign  corporation in each jurisdiction  where the failure to be
         so qualified or licensed might have a Material Adverse Effect.

                  (b) Authority. The execution, delivery and performance by each
         of Borrower and its Subsidiaries of each Credit Document  executed,  or
         to be executed, by such Person and the consummation of the transactions
         contemplated  thereby  (i) are within the power of such Person and (ii)
         have been duly authorized by all necessary  actions on the part of such
         Person.

                  (c)  Enforceability.  Each Credit Document executed,  or to be
         executed,  by each of Borrower and its  Subsidiaries  has been, or will
         be, duly executed and delivered by such Person and constitutes, or will
         constitute,  a legal,  valid and  binding  obligation  of such  Person,
         enforceable against such Person in accordance with its terms, except as
         limited by bankruptcy,  insolvency or other laws of general application
         relating to or affecting the enforcement of creditors' rights generally
         and general principles of equity.

                  (d)  Non-Contravention.  The execution and delivery by each of
         Borrower and its Subsidiaries of the Credit Documents  executed,  or to
         be executed, by such Person and the performance and consummation of the
         transactions contemplated thereby do not (i) violate any Requirement of
         Law applicable to such Person; (ii) violate any provision of, or result
         in the breach or the  acceleration  of, or entitle any other  Person to
         accelerate  (whether  after  the  giving  of notice or lapse of time or
         both),  any Contractual  Obligation of such Person;  or (iii) result in
         the  creation or  imposition  of any Lien upon any  property,  asset or
         revenue of such Person (except such Liens as may be created in favor of
         any Agent or any Bank pursuant to this Restated Credit Agreement or the
         other Credit Documents).

                  (e) Approvals.  No consent,  approval,  order or authorization
         of, or  registration,  declaration  or filing  with,  any  Governmental
         Authority  or  other  Person  (including,   without   limitation,   the
         shareholders  of  any  Person)  is  required  in  connection  with  the
         execution and delivery of the Credit Documents  executed by Borrower or
         its   Subsidiaries   and  the  performance  and   consummation  of  the
         transactions contemplated thereby.


                                       26

<PAGE>

                  (f) No Violation or Default.  Neither  Borrower nor any of its
         Subsidiaries  is in  violation of or in default with respect to (i) any
         Requirement  of Law  applicable  to such Person;  (ii) any  Contractual
         Obligation of such Person (nor is there any waiver in effect which,  if
         not in effect, would result in such a violation or default),  where, in
         each case,  such  violation  or default  could have a Material  Adverse
         Effect.  Without  limiting the  generality  of the  foregoing,  neither
         Borrower nor any of its Subsidiaries (A) has violated any Environmental
         Laws,  (B) has any liability  under any  Environmental  Laws or (C) has
         received notice or other  communication of an investigation or is under
         investigation by any Governmental Authority having authority to enforce
         Environmental  Laws,  where such violation,  liability or investigation
         could have a Material  Adverse  Effect.  No Event of Default or Default
         has occurred and is continuing.

                  (g)  Litigation.  Except as set forth (with the dollar amounts
         claimed)  in  Schedule   4.01(g),   no  actions   (including,   without
         limitation,  derivative actions),  suits, proceedings or investigations
         are  pending  or, to the  knowledge  of  Borrower,  threatened  against
         Borrower or any of its Subsidiaries at law or in equity in any court or
         before any other  Governmental  Authority  which (i) could (alone or in
         the aggregate) have a Material  Adverse Effect or (ii) seeks to enjoin,
         either directly or indirectly,  the execution,  delivery or performance
         by Borrower or any of its  Subsidiaries of the Credit  Documents or the
         transactions contemplated thereby.

                  (h) Title. Borrower and its Subsidiaries own and have good and
         marketable  title  in fee  simple  absolute  to,  or a valid  leasehold
         interest in, all their  respective  real  properties  and good title to
         their other  respective  assets and properties as reflected in the most
         recent Financial  Statements delivered to Bank (except those assets and
         properties  disposed of in the ordinary course of business or otherwise
         in compliance  with this Restated  Credit  Agreement  since the date of
         such Financial  Statements)  and all  respective  assets and properties
         acquired by Borrower and its Subsidiaries since such date (except those
         disposed  of in  the  ordinary  course  of  business  or  otherwise  in
         compliance  with this  Restated  Credit  Agreement).  Such  assets  and
         properties are subject to no Lien, except for Permitted Liens.

                  (i) Financial Statements. The Financial Statements of Borrower
         and its Subsidiaries which have been delivered to Administrative  Agent
         and the  Banks,  (i) are in  accordance  with the books and  records of
         Borrower and its Subsidiaries, which have been maintained in accordance
         with good business practice; (ii) have been prepared in conformity with
         GAAP; and (iii) fairly present the  respective  financial  positions of
         Borrower and its Subsidiaries at such date. Neither Borrower nor any of
         its Subsidiaries has any contingent obligations, liability for taxes or
         other  outstanding  obligations  which are  material in the  aggregate,
         except as disclosed  in the audited  Financial  Statements  of Borrower
         dated December 31, 1997,  furnished by Borrower to Administrative Agent
         and the Banks prior to the date hereof, or in the Financial  Statements
         delivered   to   Administrative   Agent  and  the  Banks   pursuant  to
         Subparagraph 5.01(a)(ii) or (iii).


                                       27

<PAGE>

                  (j) Equity  Securities.  The authorized  Equity  Securities of
         Borrower  consist  of (i)  20,000,000  shares of common  stock of which
         approximately  8,832,665 shares are duly issued and  outstanding,  (ii)
         10,000,000  shares of  preferred  stock  none of which  shares are duly
         issued and outstanding,  (iii) no warrants to purchase shares of common
         stock are issued and outstanding, (iv) the Almo Warrant, (v) options to
         purchase  1,720,785 shares of common stock,  pursuant to the 1998 Stock
         Option Plan, of which  approximately  1,395,113 options are outstanding
         and (vi)  251,674  shares  of common  stock  reserved  pursuant  to the
         Company's   Employee  Stock  Purchase  Plan.  All  outstanding   Equity
         Securities (except for the option to purchase common stock) of Borrower
         are duly  authorized,  validly issued,  fully paid and  non-assessable.
         There  are no  other  outstanding  subscriptions,  options,  conversion
         rights,  warrants  or other  agreements  or  commitments  of any nature
         whatsoever (firm or conditional)  obligating Borrower to issue, deliver
         or sell,  or cause to be  issued,  delivered  or sold,  any  additional
         Equity Securities of Borrower,  or obligating Borrower to grant, extend
         or enter into any such agreement or commitment.  All Equity  Securities
         of Borrower have been offered and sold in  compliance  with all federal
         and state securities laws and all other Requirements of Law.

                  (k) No Agreements to Sell Assets.  Neither Borrower nor any of
         its Subsidiaries has any legal obligation,  absolute or contingent,  to
         any  Person  to sell all or a  substantial  portion  of the  assets  of
         Borrower or its  Subsidiaries  (other than sales in the ordinary course
         of  business),  or  to  effect  any  merger,   consolidation  or  other
         reorganization  of Borrower or any of its Subsidiaries or to enter into
         any agreement with respect thereto.

                  (l)      Employee Benefit Plans.

                           (i) Based upon the latest valuation of each "employee
                  pension  benefit  plan" (within the meaning of section 3(2) of
                  ERISA) that either Borrower or any ERISA  Affiliate  maintains
                  or  contributes  to,  or  has  any  obligation   under  (which
                  valuation  occurred  within  twelve months of the date of this
                  representation),  the aggregate  benefit  liabilities  of such
                  plan  within  the  meaning  of  Section  4001 of ERISA did not
                  exceed the aggregate value of the assets of such plan. Neither
                  Borrower  nor  any  ERISA  Affiliate  has any  liability  with
                  respect  to any  post-retirement  benefit  under any  Employee
                  Benefit  Plan which is a welfare  plan (as  defined in section
                  3(1)  of  ERISA),   other  than   liability  for  health  plan
                  continuation  coverage  described  in Part 6 of Title  I(B) of
                  ERISA,  which liability for health plan contribution  coverage
                  will not have a Material Adverse Effect.

                           (ii) Each  Employee  Benefit Plan  complies,  in both
                  form and operation,  in all material respects, with its terms,
                  ERISA  and the  Code,  and no  condition  exists  or event has
                  occurred  with  respect to any such plan which would result in
                  the  incurrence by either  Borrower or any ERISA  Affiliate of
                  any material liability, fine or penalty. Each Employee Benefit
                  Plan,  related trust agreement,  arrangement and commitment of
                  Borrower or any ERISA  Affiliate is legally  valid and binding
                  and in full force and  effect.  No  Employee  Benefit  Plan is
                  being


                                       28

<PAGE>

                  audited or investigated by any government agency or is subject
                  to any pending or threatened  claim or suit.  Neither Borrower
                  nor any ERISA  Affiliate  nor any  fiduciary  of any  Employee
                  Benefit  Plan has engaged in a  prohibited  transaction  under
                  section 406 of ERISA or section 4975 of the Code.

                           (iii)  Neither   Borrower  nor  any  ERISA  Affiliate
                  contributes to any  Multiemployer  Plan.  Neither Borrower nor
                  any  ERISA  Affiliate  has  incurred  any  material  liability
                  (including secondary liability) to any Multiemployer Plan as a
                  result  of  a  complete  or  partial   withdrawal   from  such
                  Multiemployer  Plan under Section 4201 of ERISA or as a result
                  of a sale of  assets  described  in  Section  4204  of  ERISA.
                  Neither  Borrower nor any ERISA  Affiliate  has been  notified
                  that any Multiemployer  Plan is in reorganization or insolvent
                  under and within the meaning of Section  4241 or Section  4245
                  of ERISA or that any  Multiemployer  Plan intends to terminate
                  or has been terminated under Section 4041A of ERISA.

                  (m)  Other  Regulations.  Neither  Borrower  nor  any  of  its
         Subsidiaries is subject to regulation under the Investment  Company Act
         of 1940,  the Public Utility  Holding  Company Act of 1935, the Federal
         Power Act, any state public  utilities  code or to any federal or state
         statute or  regulatory  scheme  which would limit its ability  execute,
         deliver  and  perform  any of the Credit  Documents  executed  or to be
         executed by it.

                  (n) Patent and Other  Rights.  Borrower  and its  Subsidiaries
         own,  and have the full right to  license  without  the  consent of any
         other Person,  all patents,  licenses,  trademarks,  trade names, trade
         secrets, service marks, copyrights and all rights with respect thereto,
         which are required to conduct their businesses as now conducted.

                  (o) Governmental Charges and Other Indebtedness.  Borrower and
         its Subsidiaries have filed or caused to be filed all tax returns which
         are required to be filed by them.  Borrower and its  Subsidiaries  have
         paid,  or made  provision  for the  payment  of,  all  taxes  and other
         Governmental Charges which have or may have become due pursuant to said
         returns  or  otherwise   and  all  other   Indebtedness,   except  such
         Governmental Charges or Indebtedness, if any, which are being contested
         in  good  faith  and  as to  which  adequate  reserves  (determined  in
         accordance  with GAAP)  have been  provided  or which  could not have a
         Material Adverse Effect if unpaid.

                  (p) Margin Stock.  Borrower owns no Margin Stock which, in the
         aggregate,  would  constitute  a  substantial  part  of the  assets  of
         Borrower,  and no  proceeds  of any  Revolving  Loan  will  be  used to
         purchase  or carry,  directly  or  indirectly,  and no Letter of Credit
         shall be used to support the purchase of, any Margin Stock or to extend
         credit,  directly  or  indirectly,  to any  Person  for the  purpose of
         purchasing or carrying any Margin Stock.

                  (q)  Subsidiaries,  etc.  Set forth in  Schedule  4.01(q) is a
         complete list of all of Borrower's  Subsidiaries,  the  jurisdiction of
         incorporation of each, the classes of Equity Securities of each and the
         number of shares and percentages of shares of each such class


                                       29

<PAGE>

         owned directly or indirectly by Borrower. Except for such Subsidiaries,
         Borrower has no Subsidiaries,  is not a partner in any partnership or a
         joint venturer in any joint venture.

                  (r) Solvency,  Etc.  Borrower and each of its  Subsidiaries is
         Solvent and,  after the execution and delivery of the Credit  Documents
         and the consummation of the transactions  contemplated thereby, will be
         Solvent.

                  (s)  Catastrophic  Events.  Neither  Borrower  nor  any of its
         Subsidiaries  and none of their  properties  is or has been affected by
         any fire, explosion,  accident, strike, lockout or other labor dispute,
         drought, storm, hail, earthquake, embargo, act of God or other casualty
         that  could  have a  Material  Adverse  Effect.  There are no  disputes
         presently  subject to grievance  procedure,  arbitration  or litigation
         under any of the collective bargaining agreements, employment contracts
         or employee  welfare or incentive plans to which Borrower or any of its
         Subsidiaries  is a party,  and there  are no  strikes,  lockouts,  work
         stoppages  or  slowdowns,  or,  to  the  best  knowledge  of  Borrower,
         jurisdictional  disputes or organizing activity occurring or threatened
         which could have a Material Adverse Effect.

                  (t) Burdensome Contractual Obligations,  Etc. Neither Borrower
         nor any of its  Subsidiaries and none of their properties is subject to
         any  Contractual  Obligation or  Requirement  of Law which could have a
         Material Adverse Effect.

                  (u) No Material  Adverse Effect.  No event has occurred and no
         condition  exists which could reasonably be expected to have a Material
         Adverse Effect.

                  (v) Year 2000  Compatibility.  Borrower  and its  Subsidiaries
         have  reviewed  the areas within their  business and  operations  which
         could be  materially  adversely  affected  by, and are taking all steps
         Borrower and its Subsidiaries  consider reasonably necessary to address
         on a timely  basis,  the "Year  2000  Problem"  (that is, the risk that
         computer  applications  used by Borrower  and its  Subsidiaries  may be
         unable to  recognize  and  perform  properly  date-sensitive  functions
         involving  certain dates prior to and any date on or after December 31,
         1999), and have made related  appropriate inquiry of material suppliers
         and vendors. Based upon such review and program, Borrower believes that
         the "Year 2000 Problem" will not have a Material Adverse Effect.

                  (w)  Accuracy  of  Information  Furnished.  None of the Credit
         Documents and none of the other certificates, statements or information
         furnished  to any Agent or any Bank by or on behalf of  Borrower or any
         of its  Subsidiaries  in  connection  with the Credit  Documents or the
         transactions  contemplated  thereby contains or will contain any untrue
         statement of a material  fact or omits or will omit to state a material
         fact  necessary  to  make  the  statements  therein,  in  light  of the
         circumstances under which they were made, not misleading.

         4.02. Reaffirmation.  Borrower shall be deemed to have reaffirmed,  for
the  benefit  of the Banks and the  Agents,  each  representation  and  warranty
contained in Paragraph 4.01 on and as of the date of each Credit Event.


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<PAGE>

SECTION V.  COVENANTS.

         5.01.  Affirmative  Covenants.  Until the  termination of this Restated
Credit  Agreement and the  satisfaction in full by Borrower of all  Obligations,
Borrower will comply, and will cause compliance,  with the following affirmative
covenants, unless Required Banks shall otherwise consent in writing:

                  (a) Financial Statements, Reports, etc. Borrower shall furnish
         to Administrative  Agent or if otherwise  specified herein,  Collateral
         Agent  (with a copy for each  Bank to be  forwarded  by  Administrative
         Agent or Collateral Agent,  respectively)  the following,  each in such
         form and such detail as  Administrative  Agent or Collateral  Agent, as
         applicable, shall reasonably request:

                           (i) Within fifty (50) days after the last day of each
                  fiscal  quarter  of  Borrower,  (A) a copy  of  the  Financial
                  Statements  of  Borrower  for such  quarter and for the fiscal
                  year to date (including  consolidated Financial Statements for
                  Borrower and its Subsidiaries),  certified by the president or
                  chief  financial  officer of  Borrower  to present  fairly the
                  financial   condition,   results  of   operations   and  other
                  information  reflected  therein  and to have been  prepared in
                  accordance  with GAAP (subject to year-end audit  adjustments)
                  and (B) the  Form  10-Q  Report  filed  by  Borrower  with the
                  Securities and Exchange Commission for such quarter;

                           (ii) Within  ninety-five (95) days after the close of
                  each  fiscal  year of  Borrower,  (A)  copies  of the  audited
                  Financial  Statements  of  Borrower  for such year  (including
                  consolidated   Financial   Statements  for  Borrower  and  its
                  Subsidiaries),   prepared  by  independent   certified  public
                  accountants  acceptable to Bank, (B) copies of the unqualified
                  opinions (or qualified opinions  reasonably  acceptable to the
                  Banks) and management letters delivered by such accountants in
                  connection   with   all   such   Financial   Statements,   (C)
                  certificates  of all such  accountants to Bank stating that in
                  making the  examination  necessary for their opinion they have
                  obtained no knowledge of any Event of Default or Default which
                  has occurred and is continuing,  or if, in the opinion of such
                  accountants,  an Event of Default or Default has  occurred and
                  is continuing,  a statement as to the nature thereof (or other
                  certificates  of such  accountants  reasonably  acceptable  to
                  Required Banks) and (D) the Form 10-K Report filed by Borrower
                  with the Securities and Exchange Commission for such year;

                           (iii)   Contemporaneously   with  the  quarterly  and
                  year-end  financial   statements  required  by  the  foregoing
                  clauses (i) and (ii), a certificate  of the president or chief
                  financial officer of Borrower in such detail as Administrative
                  Agent  may  reasonably   request  which  (A)  sets  forth  the
                  calculations   conducted   to  verify  that   Borrower  is  in
                  compliance  with each of the financial  covenants set forth in
                  Paragraph  5.02(m) and stating that no Event of Default and no
                  Default has occurred and is continuing,  or, if any such Event
                  of  Default or  Default  has  occurred  and is  continuing,  a
                  statement  as to the nature  thereof and what action


                                       31

<PAGE>

                  Borrower  proposes to take with  respect  thereto,  (B) states
                  that the Year 2000  remediation  efforts of  Borrower  and its
                  Subsidiaries  are  proceeding as scheduled,  and (C) indicates
                  whether an auditor,  regulator or third party  consultant  has
                  issued a management  letter or other  communication  regarding
                  any Material Adverse Effect the Year 2000 exposure, program or
                  progress could have on Borrower and its Subsidiaries  taken as
                  a whole;

                           (iv) As soon as available  and in no event later than
                  twenty (20) days after the last day of each fiscal  month,  to
                  Collateral   Agent   (A)   agings   of   Borrower's   and  its
                  Subsidiaries'  accounts  receivable and accounts payable as of
                  the last day of each month, (B) a report of Borrower's and its
                  Subsidiaries'  inventory as of the last day of such month, and
                  (C) a  certificate  in the form of  Exhibit K (or  other  form
                  acceptable to Collateral  Agent),  appropriately  completed (a
                  "Borrowing   Base   Certificate"),   which   sets   forth  the
                  calculation  of the Borrowing Base as of such last day of such
                  month,  certified by the chief financial  officer or treasurer
                  of Borrower;

                           (v) As soon as  possible  and in no event  later than
                  five (5) Business Days after any officer of Borrower  knows of
                  the occurrence or existence of (A) any Reportable  Event under
                  any  Employee  Benefit  Plan or  Multiemployer  Plan;  (B) any
                  actual or  threatened  litigation,  suits,  claims or disputes
                  against  Borrower  or  any  of  its   Subsidiaries   involving
                  potential  monetary  damages payable by Borrower or any of its
                  Subsidiaries   of   $1,000,000   or  more  (alone  or  in  the
                  aggregate);  (C) any  other  event or  condition  which  could
                  reasonably be expected to have a Material  Adverse Effect;  or
                  (D) any Event of  Default or  Default;  the  statement  of the
                  president or chief financial officer of Borrower setting forth
                  details of such event, condition,  Event of Default or Default
                  and the action  which  Borrower  proposes to take with respect
                  thereto;

                           (vi) As soon as  possible  and in no event later than
                  five (5) Business Days after they are sent,  made available or
                  filed, copies of all registration statements and reports filed
                  by  Borrower  with  the  Securities  and  Exchange  Commission
                  (including 8Q reports) and all reports,  proxy  statements and
                  financial statements sent or made available by Borrower to its
                  shareholders generally;

                           (vii) As soon as possible  and in no event later than
                  five (5) Business Days after they are filed, copies of all IRS
                  Form 5500 reports for all Employee  Benefit Plans  required to
                  file such form; and

                           (viii)    Such   other    instruments,    agreements,
                  certificates,  opinions, statements, documents and information
                  relating  to  the   operations  or  condition   (financial  or
                  otherwise)  of  Borrower  or  any  of  its  Subsidiaries,  and
                  compliance by Borrower and its Subsidiaries  with the terms of
                  this Restated Credit  Agreement and the other Credit Documents
                  as any Agent may from time to time reasonably request.


                                       32

<PAGE>

                  (b) Books and Records.  Borrower and its Subsidiaries shall at
         all times keep proper  books of record and account in which full,  true
         and correct  entries will be made of their  transactions  in accordance
         with GAAP.

                  (c) Inspections.  Borrower and its  Subsidiaries  shall permit
         any  Person  designated  by  Collateral  Agent in its  sole  discretion
         (including without limitation any Bank that so requests,  which request
         shall not be unreasonably  denied),  upon reasonable  notice and during
         normal  business  hours, to visit and inspect any of the properties and
         offices of Borrower and its  Subsidiaries,  to conduct audits of any or
         all of the  Collateral at Borrower's  expense,  to examine the books of
         account of Borrower  and its  Subsidiaries  and to discuss the affairs,
         finances and accounts of Borrower and its Subsidiaries  with, and to be
         advised as to the same by, their  officers,  auditors and  accountants,
         all at such times and  intervals  as  Collateral  Agent may  reasonably
         request, including, without limitation, an annual audit of the accounts
         and inventory of Borrower and its  Subsidiaries,  the fees and expenses
         of which shall be payable by Borrower pursuant to Subparagraph 8.02(b).
         Audit fees payable by Borrower in connection  with audits of all or any
         portion  of the  Collateral  shall be charged at a rate of $750 per day
         per person  plus  direct  costs of travel,  lodging  and  out-of-pocket
         expenses.

                  (d) Insurance. Each of Borrower and its Subsidiaries shall (i)
         insure its inventory  against such risks, in such amounts and with such
         insurers  satisfactory to the Banks; (ii) carry and maintain additional
         insurance of the types and in the amounts customarily carried from time
         to time during the term of this  Restated  Credit  Agreement  by others
         engaged in substantially the same business as such Person and operating
         in the same  geographic  area as such Person,  including  fire,  public
         liability, property damage and worker's compensation, such insurance to
         be carried with  companies  and in amounts  satisfactory  to the Banks;
         (iii) name  Collateral  Agent as additional  insured or loss payee,  as
         appropriate,  on all such  insurance;  and (iv)  deliver to  Collateral
         Agent from time to time,  as  Collateral  Agent may request,  schedules
         setting forth all insurance then in effect and policy  endorsements for
         such insurance naming  Collateral  Agent as additional  insured or loss
         payee.

                  (e) Governmental Charges and Other Indebtedness.  Borrower and
         its Subsidiaries shall promptly pay and discharge before delinquent (i)
         all taxes and other  Governmental  Charges prior to the date upon which
         penalties accrue thereon,  except such  Governmental  Charges as may in
         good  faith  be  contested  or  disputed  by  appropriate  proceedings,
         provided that in each such case appropriate  reserves are maintained in
         accordance with GAAP,  (ii) all  Indebtedness  which, if unpaid,  could
         become a Lien upon the  property of Borrower  or its  Subsidiaries  and
         (iii) all other  Indebtedness  which, if unpaid,  could have a Material
         Adverse  Effect,  except  such  Indebtedness  as may in good  faith  be
         contested  or  disputed  by  appropriate  proceedings,   or  for  which
         arrangements for deferred payment have been made, provided that in each
         such case appropriate reserves are maintained in accordance with GAAP.


                                       33

<PAGE>


                  (f) Use of  Proceeds.  Borrower  shall use the proceeds of the
         Revolving Loans only for the purposes set forth in Subparagraph 2.01(g)
         and Borrower  shall  request the issuance of Letters of Credit only for
         the purposes set forth in Subparagraph 2.02(a)(ii).  Borrower shall not
         use any part of the  proceeds  of any  Revolving  Loan or any Letter of
         Credit,  directly  or  indirectly,  for the  purpose of  purchasing  or
         carrying any Margin Stock or for the purpose of  purchasing or carrying
         or trading in any  securities  under such  circumstances  as to involve
         Borrower or Bank in a violation of  Regulations T, U or X issued by the
         Federal Reserve Board.

                  (g) General  Business  Operations.  Each of  Borrower  and its
         Subsidiaries  shall (i) preserve and maintain its  corporate  existence
         and all of its rights,  privileges and franchises  reasonably necessary
         to the conduct of its business, (ii) conduct its business activities in
         compliance with all  Requirements  of Law and  Contractual  Obligations
         applicable to such Person, the violation of which could have a Material
         Adverse  Effect,  (iii) keep all property  useful and  necessary in its
         business in good working  order and  condition,  ordinary wear and tear
         excepted,  and (iv) not change its chief executive office and principal
         place of business from San Jose,  California  without  ninety (90) days
         prior written notice to Collateral Agent.

                  (h) Landlord Waivers and Consents. Borrower shall use its best
         efforts to obtain  such  landlord  waivers  and  consents,  in form and
         substance  satisfactory to Collateral  Agent,  as Collateral  Agent may
         from time to time request  pursuant to which each such  landlord  shall
         acknowledge  Collateral Agent's and the Banks' senior security interest
         in all of Borrower's  and its  Subsidiaries'  inventory  stored at such
         locations, disclaim any interest in such inventory and agree to provide
         Collateral  Agent  on  behalf  of  the  Banks  access  to  remove  such
         inventory.

                  (i) Year 2000  Compatibility.  Borrower  and its  Subsidiaries
         shall take all acts  reasonably  necessary to ensure that all software,
         hardware,  firmware,  equipment,  goods  and  systems  utilized  by  or
         material to their  business,  operations  or financial  condition  will
         properly perform date sensitive functions before,  during and after the
         year 2000.  At the  request of  Administrative  Agent,  Borrower  shall
         provide to Administrative  Agent such  certifications or other evidence
         of compliance with this Subparagraph  5.01(i) as  Administrative  Agent
         may from time to time require.

                  (j)  Tenex-Data  Acquisition.  On or prior to the  Tenex  Data
         Acquisition  Effective  Date,  Borrower  shall  obtain  and  deliver to
         Administrative Agent each item listed in Schedule 5.01(j), each in form
         and  substance   reasonably   satisfactory  to  the  Agents,  and  with
         sufficient copies for, the Agents and each Bank.

                  (k)  Inventory  Appraisal.  Borrower  covenants  that  it will
         complete and deliver to the Collateral Agent and the Banks an inventory
         appraisal,  in form and substance  satisfactory to the Collateral Agent
         and the Banks, within 90 days of the Fourth Amendment Effective Date.


                                       34

<PAGE>

         5.02. Negative Covenants. Until the termination of this Restated Credit
Agreement and the satisfaction in full by Borrower of all Obligations,  Borrower
will comply, and will cause compliance,  with the following negative  covenants,
unless Required Banks or Banks,  as the case may be, shall otherwise  consent in
writing:

                  (a) Indebtedness. Neither Borrower nor any of its Subsidiaries
         shall create,  incur, assume or permit to exist any Indebtedness except
         for Permitted Indebtedness.

                  (b) Liens.  Neither Borrower nor any of its Subsidiaries shall
         create, incur, assume or permit to exist any Lien on or with respect to
         any of its assets or  property of any  character,  whether now owned or
         hereafter acquired, except for Permitted Liens.

                  (c)  Asset  Dispositions.  Neither  Borrower  nor  any  of its
         Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
         its assets or property, whether now owned or hereafter acquired, except
         in the ordinary course of its business.

                  (d) Mergers,  Acquisitions,  Etc.  Neither Borrower nor any of
         its Subsidiaries  shall consolidate with or merge into any other Person
         or  permit  any  other  Person  to merge  into it,  or  acquire  all or
         substantially  all of the assets of any other  Person,  except that any
         wholly-owned  Subsidiary  of  Borrower  may merge into  Borrower or any
         other wholly-owned Subsidiary of Borrower.

                  (e) Investments.  Neither Borrower nor any of its Subsidiaries
         shall make any Investment except for Permitted Investments.

                  (f) Dividends,  Redemptions,  Etc.  Borrower shall not (i) pay
         any dividends or make any distributions on its Equity Securities;  (ii)
         purchase, redeem, retire, defease or otherwise acquire for value any of
         its Equity  Securities;  (iii)  return any capital to any holder of its
         Equity Securities as such; (iv) make any distribution of assets, Equity
         Securities,  obligations  or  securities  to any  holder of its  Equity
         Securities  as such;  or (v) set  apart  any sum for any such  purpose;
         except that Borrower may pay Permitted Dividends.

                  (g) Capital Expenditures.  Borrower and its Subsidiaries shall
         not pay or incur Capital  Expenditures which exceed in aggregate in any
         fiscal year $5,000,000.

                  (h)  Change  in  Business.  Neither  Borrower  nor  any of its
         Subsidiaries  shall  engage,  either  directly  or  indirectly  through
         Affiliates,  in any  business  substantially  different  from  and  not
         incidental to its present business.

                  (i)  Indebtedness  Payments.  Neither  Borrower nor any of its
         Subsidiaries   shall  (i)  make  any   payment   on  the   Subordinated
         Indebtedness;  (ii)  prepay,  redeem,  purchase,  defease or  otherwise
         satisfy in any manner  prior to the  scheduled  repayment  thereof  any
         other  Indebtedness  for borrowed money (other than the Obligations) or
         lease  obligations;   (iii)  amend,  modify  or  otherwise  change  the
         subordination  provisions  of any  Subordinated  Indebtedness;  or (iv)
         amend,  modify  or  otherwise  change  the  terms  of any


                                       35

<PAGE>

         Subordinated  Indebtedness or any other Indebtedness for borrowed money
         (other than the  Obligations) or lease  obligations so as to accelerate
         the scheduled repayment thereof.

                  (j) ERISA.  Neither Borrower nor any ERISA Affiliate shall (i)
         adopt or  institute  any  Employee  Benefit  Plan  that is an  employee
         pension benefit plan within the meaning of Section 3(2) of ERISA,  (ii)
         take  any  action   which  will  result  in  the  partial  or  complete
         withdrawal,  within the  meanings of  sections  4203 and 4205 of ERISA,
         from a Multiemployer  Plan, (iii) engage or permit any Person to engage
         in any  transaction  prohibited by section 406 of ERISA or section 4975
         of the Code involving any Employee Benefit Plan or  Multiemployer  Plan
         which would subject either  Borrower or any ERISA Affiliate to any tax,
         penalty or other  liability  including a liability to  indemnify,  (iv)
         incur or allow to exist any accumulated  funding deficiency (within the
         meaning of section 412 of the Code or section  302 of ERISA),  (v) fail
         to make full  payment when due of all amounts due as  contributions  to
         any Employee  Benefit Plan or  Multiemployer  Plan, (vi) fail to comply
         with the  requirements  of section 4980B of the Code or Part 6 of Title
         I(B) of ERISA,  or (vii) adopt any  amendment to any  Employee  Benefit
         Plan which would  require  the posting of security  pursuant to section
         401(a)(29) of the Code, where singly or  cumulatively,  the above would
         have a Material Adverse Effect.

                  (k) Transactions With Affiliates.  Neither Borrower nor any of
         its Subsidiaries  shall enter into any Contractual  Obligation with any
         Affiliate or engage in any other  transaction with any Affiliate except
         that  Borrower and its  Subsidiaries  may (i) sell assets to each other
         for fair value and (ii) engage in other transactions with each other or
         with  Affiliates  upon terms at least as  favorable to Borrower and its
         Subsidiaries as arms-length transactions with unaffiliated Persons.

                  (l)  Accounting  Changes.  Neither  Borrower  nor  any  of its
         Subsidiaries  shall  change (i) its fiscal  year  (currently  January 1
         through  December  31) or  (ii)  its  accounting  practices  except  as
         required by GAAP.

                  (m) Financial Covenants. Borrower shall not permit:

                           (i) Its Quick  Ratio to be less than 0.50 to 1.00 for
                  any fiscal quarter;

                           (ii) Its Working Capital to be less than  $60,000,000
                  for any fiscal quarter;

                           (iii) Its Tangible Net Worth, for any fiscal quarter,
                  to be less  than the sum of (1)  $70,000,000  plus  (2)  fifty
                  percent  (50%) of the sum of  Borrower's  Net Income After Tax
                  for each quarter  (excluding  any quarter in which such amount
                  was negative)  beginning with the quarter ending June 30, 1998
                  plus  (3) one  hundred  percent  (100%)  of the  Net  Proceeds
                  derived  from any  issuance by  Borrower of Equity  Securities
                  minus (4) the net book value  assigned to the Almo Warrants in
                  accordance with GAAP;


                                       36

<PAGE>

                           (iv) Its  Leverage  Ratio to be greater  than 3.50 to
                  1.00 for any fiscal quarter;

                           (v) Its  Interest  Coverage  Ratio  (A) for the three
                  quarter  period  beginning  on April 1,  1998  and  ending  on
                  December  31,  1998 to be less than 2.00 to 1.00;  and (B) for
                  any consecutive four-quarter period thereafter to be less than
                  2:00 to 1:00; or

                           (vi) Its Net Operating Income or Net Income After Tax
                  to be (1) a loss in excess of $350,000  for any quarter or (2)
                  a loss of any amount for any consecutive two-quarter period.

SECTION VI.  DEFAULT.

         6.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:

                  (a)  Borrower  shall  fail  to pay  when  due  any  principal,
         interest or other  payment  required  under the terms of this  Restated
         Credit Agreement or any of the other Credit Documents; or

                  (b) Borrower or any of its Subsidiaries  shall fail to observe
         or perform any covenant,  obligation,  condition or agreement set forth
         in clause (v)(D) of  Subparagraph  5.01(a),  Subparagraph  5.01(c) (but
         only to the extent Borrower denies such right to conduct inspections to
         Collateral Agent acting on behalf of the Banks),  Subparagraph  5.01(d)
         or Paragraph 5.02; or

                  (c) Borrower or any of its Subsidiaries  shall fail to observe
         or perform  any other  covenant,  obligation,  condition  or  agreement
         contained  in  this  Restated  Credit  Agreement  or the  other  Credit
         Documents and such failure shall continue for ten (10) days; or

                  (d)  Any  representation,   warranty,  certificate,  or  other
         statement (financial or otherwise) made or furnished by or on behalf of
         Borrower or any of its  Subsidiaries  to any Agent or any Bank in or in
         connection  with this  Restated  Credit  Agreement  or any of the other
         Credit Documents, or as an inducement to any Agent or any Bank to enter
         into  this  Restated  Credit  Agreement,  shall  be  false,  incorrect,
         incomplete  or  misleading  in  any  material   respect  when  made  or
         furnished; or

                  (e) Borrower or any of its Subsidiaries shall fail to make any
         payment when due under the terms of any bond, debenture,  note or other
         evidence  of  Indebtedness  to be paid by such Person  (excluding  this
         Restated Credit  Agreement and the other Credit Documents but including
         any  other  evidence  of   Indebtedness  of  Borrower  or  any  of  its
         Subsidiaries  to any Bank) and such failure shall  continue  beyond any
         period of grace provided with respect thereto,  or shall default in the
         observance or  performance  of any other  agreement,  term or condition
         contained  in any  such  bond,  debenture,  note or other


                                       37

<PAGE>

         evidence of Indebtedness,  and the effect of such failure or default is
         to cause, or permit the holder or holders thereof to cause Indebtedness
         in an  aggregate  amount of $200,000 or more to become due prior to its
         stated date of maturity; or

                  (f) Borrower or any of its Subsidiaries shall (i) apply for or
         consent  to the  appointment  of a  receiver,  trustee,  liquidator  or
         custodian of itself or of all or a  substantial  part of its  property,
         (ii) be unable,  or admit in writing  its  inability,  to pay its debts
         generally  as they  mature,  (iii)  make a general  assignment  for the
         benefit of its or any of its creditors, (iv) be dissolved or liquidated
         in full or in part,  (v) become  insolvent (as such term may be defined
         or interpreted under any applicable statute), (vi) commence a voluntary
         case or other proceeding seeking  liquidation,  reorganization or other
         relief  with  respect  to  itself or its  debts  under any  bankruptcy,
         insolvency  or other  similar law now or hereafter in effect or consent
         to any such relief or to the appointment of or taking possession of its
         property by any  official in an  involuntary  case or other  proceeding
         commenced  against  it,  or (vi) take any  action  for the  purpose  of
         affecting any of the foregoing; or

                  (g) Proceedings  for the  appointment of a receiver,  trustee,
         liquidator  or custodian of Borrower or any of its  Subsidiaries  or of
         all or a substantial  part of the property  thereof,  or an involuntary
         case or other proceedings seeking liquidation,  reorganization or other
         relief with respect to Borrower or any of its Subsidiaries or the debts
         thereof  under any  bankruptcy,  insolvency or other similar law now or
         hereafter in effect shall be commenced and an order for relief  entered
         or such  proceeding  shall not be dismissed or discharged  within sixty
         (60) days of commencement; or

                  (h) A final  judgment  or order  for the  payment  of money in
         excess of $200,000 (exclusive of amounts covered by insurance issued by
         an insurer not an  Affiliate  of  Borrower)  shall be rendered  against
         Borrower  or  any  of  its  Subsidiaries  and  the  same  shall  remain
         undischarged  and unpaid for a period of thirty (30) days during  which
         execution  shall not be  effectively  stayed,  or any  judgment,  writ,
         assessment,  warrant of  attachment,  or execution  or similar  process
         shall be issued or levied against a substantial part of the property of
         Borrower or any of its Subsidiaries and such judgment, writ, or similar
         process shall not be released,  stayed,  vacated or otherwise dismissed
         within thirty (30) days after issue or levy; or

                  (i) Any Credit  Document or any material  term  thereof  shall
         cease to be, or be asserted by Borrower or any of its  Subsidiaries not
         to be, a  legal,  valid  and  binding  obligation  of  Borrower  or its
         Subsidiaries enforceable in accordance with its terms; or

                  (j) Any Reportable Event occurs which constitutes  grounds for
         the  termination  of any  Employee  Benefit Plan by the PBGC or for the
         appointment  of a trustee to administer  any Employee  Benefit Plan, or
         any  Employee  Benefit Plan shall be  terminated  within the meaning of
         Title IV of ERISA or a trustee  shall be  appointed to  administer  any
         Employee Benefit Plan; or


                                       38

<PAGE>

                  (k) One or more conditions exist or events have occurred which
         might reasonably indicate,  or reasonably result in, a Material Adverse
         Effect.

         6.02.  Remedies.  Upon the  occurrence  or  existence  of any  Event of
Default (other than an Event of Default  referred to in Subparagraph  6.01(f) or
6.01(g))  and at any time  thereafter  during the  continuance  of such Event of
Default,  Administrative  Agent may, with the consent of the Required  Banks, or
shall, upon instructions from the Required Banks, by written notice to Borrower,
(a)  terminate  the  Revolving  Loan  Commitments,  the LC  Commitment  and  the
obligations of the Banks and the Issuing Bank to make Revolving  Loans, or issue
Letters of Credit,  as the case may be, (b) declare all outstanding  Obligations
payable  by  Borrower  hereunder  to be  immediately  due  and  payable  without
presentment,  demand,  protest or any other notice of any kind, all of which are
hereby  expressly  waived,  anything  contained  herein  or in the  Notes to the
contrary   notwithstanding,   and/or   (c)   direct   Borrower   to  deliver  to
Administrative  Agent funds in an amount equal to the aggregate stated amount of
all outstanding Letters of Credit. Upon the occurrence or existence of any Event
of Default described in Subparagraph 6.01(f) or 6.01(g), immediately and without
notice,  (1)  the  Revolving  Loan  Commitments,   the  LC  Commitment  and  the
obligations  of the  Banks and  Issuing  Bank to make  Revolving  Loans or issue
Letters of Credit, as the case may be, shall automatically terminate and (2) all
outstanding Obligations payable by Borrower hereunder shall automatically become
immediately due and payable,  without presentment,  demand, protest or any other
notice of any kind, all of which are hereby expressly waived, anything contained
herein or in the  Notes to the  contrary  notwithstanding.  In  addition  to the
foregoing  remedies,  upon the  occurrence or existence of any Event of Default,
Administrative  Agent may exercise any right, power or remedy permitted to it by
law,  either by suit in equity or by action at law, or both.  Immediately  after
taking any action under this Paragraph 6.02,  Administrative  Agent shall notify
each Bank of such action.


SECTION VII.  THE AGENTS AND RELATIONS AMONG BANKS.

         7.01. Appointment, Powers and Immunities. Each Bank hereby appoints and
authorizes  Administrative  Agent  and  Collateral  Agent  to act  as its  agent
hereunder and under the other Credit Documents with such powers as are expressly
delegated  to  Administrative  Agent or  Collateral  Agent by the  terms of this
Restated  Credit  Agreement and the other Credit  Documents,  together with such
other powers as are reasonably incidental thereto.  Neither Administrative Agent
nor  Collateral  Agent shall have any duties or  responsibilities  except  those
expressly  set forth in this  Restated  Credit  Agreement or in any other Credit
Document,  be a  trustee  for any Bank or have any  fiduciary  duty to any Bank.
Notwithstanding   anything   to   the   contrary   contained   herein,   neither
Administrative  Agent nor Collateral  Agent shall be required to take any action
which is contrary to this Restated Credit Agreement or any other Credit Document
or applicable law.  Neither  Administrative  Agent nor Collateral  Agent nor any
Bank  shall  be  responsible  to any  other  Agent  or Bank  for  any  recitals,
statements,  representations  or warranties  made by Borrower or any  Subsidiary
contained in this Restated Credit Agreement or in any other Credit Document, for
the value, validity, effectiveness,  genuineness,  enforceability or sufficiency
of this  Restated  Credit  Agreement,  or any other  Credit  Document or for any
failure by Borrower or any  Subsidiary to perform their  respective  obligations
hereunder or thereunder.  Administrative  Agent and Collateral  Agent may employ
agents and  attorneys-in-fact and shall


                                       39

<PAGE>

not be  responsible  to any other Agent or Bank for the negligence or misconduct
of any such agents or  attorneys-in-fact  selected by it with  reasonable  care.
Neither  Administrative  Agent nor Collateral  Agent nor any of their respective
directors, officers, employees or agents shall be responsible to any other Agent
or any Bank for any action taken or omitted to be taken by it or them  hereunder
or under any other  Credit  Document or in  connection  herewith  or  therewith,
except for its or their own gross  negligence or willful  misconduct.  Except as
otherwise  provided under this Restated Credit Agreement,  Administrative  Agent
and Collateral Agent shall take such action with respect to the Credit Documents
as shall be directed by the Required Banks.

         7.02.  Reliance by Agents.  Administrative  Agent and Collateral  Agent
shall  be  entitled  to rely  upon any  certificate,  notice  or other  document
(including any cable, telegram, facsimile or telex) reasonably believed by it in
good faith to be genuine  and  correct  and to have been signed or sent by or on
behalf of the proper Person or Persons,  and upon advice and statements of legal
counsel,  independent  accountants and other experts selected by  Administrative
Agent and  Collateral  Agent with  reasonable  care. As to any other matters not
expressly provided for by this Restated Credit Agreement, neither Administrative
Agent nor Collateral  Agent shall be required to take any action or exercise any
discretion,  but  shall  be  required  to act or to  refrain  from  acting  upon
instructions  of the Required Banks and shall in all cases be fully protected by
the Banks in acting, or in refraining from acting,  hereunder or under any other
Credit Document in accordance with the  instructions of the Required Banks,  and
such  instructions  of the Required Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.

         7.03. Defaults.  Neither  Administrative Agent nor any Collateral Agent
shall be deemed to have  knowledge or notice of the occurrence of any Default or
Event of Default unless  Administrative Agent and Collateral Agent have received
a notice from any other Agent,  a Bank or Borrower,  referring to this  Restated
Credit  Agreement,  describing such Default or Event of Default and stating that
such notice is a "Notice of  Default".  If  Administrative  Agent or  Collateral
Agent receives such a notice of the occurrence of a Default or Event of Default,
such Agent  shall give prompt  notice  thereof to the other Agent and the Banks.
Administrative Agent and Collateral Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Required
Banks or all of the Banks if  unanimity  is required;  provided,  however,  that
until  Administrative  Agent and  Collateral  Agent  shall  have  received  such
directions,  Administrative  Agent and  Collateral  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 they shall deem  advisable  in the best
interest of the Banks.

         7.04.  Indemnification.  Without  limiting the  Obligations of Borrower
hereunder,  each Bank agrees to indemnify  Administrative  Agent and  Collateral
Agent,  ratably in accordance with their  Proportionate  Shares, for 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 be imposed on, incurred by or asserted against Administrative Agent and
Collateral  Agent in any way relating to or arising out of this Restated  Credit
Agreement or any documents  contemplated  by or referred to herein or therein or
the transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents;  provided, however, that
no Bank shall be liable for any of the  foregoing  to the extent


                                       40

<PAGE>

they  arise  from   Administrative   Agent's  and/or  Collateral  Agent's  gross
negligence or willful  misconduct.  Administrative  Agent and  Collateral  Agent
shall be fully  justified  in refusing to take or to continue to take any action
hereunder  unless it shall first be indemnified to its satisfaction by the Banks
against any and all  liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.

         7.05. Non-Reliance. Each Bank represents that it has, independently and
without reliance on Administrative  Agent,  Collateral Agent, or any other Bank,
and based on such documents and information as it has deemed  appropriate,  made
its own  appraisal of the  financial  condition  and affairs of Borrower and the
Subsidiaries  and  decision to enter into this  Restated  Credit  Agreement  and
agrees that it will,  independently  and without  reliance  upon  Administrative
Agent,  Collateral  Agent or any other  Bank,  and based on such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
appraisals  and  decisions in taking or not taking  action  under this  Restated
Credit Agreement. Neither Administrative Agent nor Collateral Agent nor any Bank
shall be  required to keep  informed  as to the  performance  or  observance  by
Borrower  or any  Subsidiary  of the  obligations  under  this  Restated  Credit
Agreement  or any other  document  referred to or provided for herein or to make
inquiry of, or to inspect the properties or books of Borrower or any Subsidiary.
Except for  notices,  reports  and other  documents  and  information  expressly
required to be furnished to the Banks by Administrative  Agent and/or Collateral
Agent hereunder,  neither Administrative Agent nor Collateral Agent nor any Bank
shall have any duty or  responsibility  to provide  any other  Agent or any Bank
with any credit or other  information  concerning  Borrower  or any  Subsidiary,
which may come into the  possession of any Agent,  or such Bank or any of its or
their Affiliates.  Administrative  Agent and Collateral Agent shall provide each
Bank with copies of any Credit  Documents and any other  documents,  instruments
and agreements  delivered to  Administrative  Agent and/or  Collateral  Agent in
connection therewith requested by such Bank.

         7.06.  Resignation or Removal of Administrative  Agent.  Subject to the
appointment  and  acceptance  of a  successor  Administrative  Agent as provided
below,  Administrative  Agent may resign at any time by giving notice thereof to
the Banks, and  Administrative  Agent may be removed at any time with or without
cause by the Required Banks. Upon any such resignation or removal,  the Required
Banks shall have the right to appoint a successor  Administrative  Agent,  which
Administrative Agent shall be reasonably acceptable to Borrower. If no successor
Administrative  Agent shall have been  appointed by the Required Banks and shall
have  accepted  such  appointment  within  thirty  (30) days after the  retiring
Administrative  Agent's giving of notice of  resignation or the Required  Banks'
removal of the retiring  Administrative Agent, then the retiring  Administrative
Agent may,  on behalf of the Banks,  appoint a successor  Administrative  Agent,
which shall be a bank having a combined  capital,  surplus and retained earnings
of not less than U.S.  $250,000,000 and which shall be reasonably  acceptable to
Borrower.  Upon  the  acceptance  of any  appointment  as  Administrative  Agent
hereunder by a successor  Administrative  Agent,  such successor  Administrative
Agent shall thereupon succeed to and become vested with all the rights,  powers,
privileges  and duties of the retiring  Administrative  Agent,  and the retiring
Administrative  Agent  shall be  discharged  from  its  duties  and  obligations
hereunder.  After any retiring  Administrative  Agent's  resignation  or removal
hereunder as  Administrative  Agent,  the  provisions  of this Section VII shall
continue in effect for


                                       41

<PAGE>

its benefit in respect of any  actions  taken or omitted to be taken by it while
it was acting as Administrative Agent.

         7.07.  Resignation  or  Removal  of  Collateral  Agent.  Subject to the
appointment  and acceptance of a successor  Collateral  Agent as provided below,
Collateral   Agent  may  resign  at  any  time  by  giving  notice   thereof  to
Administrative  Agent and the Banks,  and Collateral Agent may be removed at any
time with or without cause by the Required Banks.  Upon any such  resignation or
removal,  the  Required  Banks  shall  have the  right to  appoint  a  successor
Collateral  Agent,  which  Collateral  Agent shall be  reasonably  acceptable to
Borrower.  If no  successor  Collateral  Agent shall have been  appointed by the
Required Banks and shall have accepted such appointment  within thirty (30) days
after the retiring  Collateral  Agent's  giving of notice of  resignation or the
Required Banks' removal of the retiring  Collateral Agent,  then  Administrative
Agent may, on behalf of the Banks,  appoint a successor  Collateral Agent, which
shall be a Bank under this Agreement and which shall be reasonably acceptable to
Borrower.  Upon the acceptance of any appointment as Collateral  Agent hereunder
by a successor Collateral Agent, such successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers,  privileges and duties
of the retiring  Collateral  Agent,  and the retiring  Collateral Agent shall be
discharged  from its  duties  and  obligations  hereunder.  After  any  retiring
Collateral  Agent's  resignation or removal  hereunder as Collateral  Agent, the
provisions  of this  Section  VII shall  continue  in effect for its  benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Collateral Agent.

         7.08.  Agents  in  their  Individual  Capacity.   Each  Agent  and  its
affiliates may make loans to, accept  deposits from and generally  engage in any
kind of business with  Borrower and its  Subsidiaries  and  affiliates as though
such Agent were not an Agent hereunder. With respect to Revolving Loans made and
Letters of Credit issued, if any, by CB&T or UBOC as a Bank, CB&T and UBOC shall
have the same rights and powers under this  Restated  Credit  Agreement  and the
other Credit  Documents as any other Bank and may exercise the same as though it
were not an Agent,  and the terms "Bank" or "Banks"  shall include CB&T and UBOC
in their individual capacity.

         7.09.  Co-Agents.  None of the Banks identified  herein as a "co-agent"
shall have any right, power, obligation, liability, responsibility or duty under
this Restated  Credit  Agreement or any other Credit  Document  other than those
applicable to all Banks as such.  Without  limiting the  foregoing,  none of the
Banks  so  identified  as a  "co-agent"  shall  have or be  deemed  to have  any
fiduciary  relationship  with any Bank. Each Bank  acknowledges  that it has not
relied,  and will not rely,  on any of the Banks  identified  as a "co-agent" in
deciding to enter into this Restated Credit Agreement or in taking or not taking
action hereunder.

         7.10. Assignment and Delegation. Collateral Agent may from time to time
(i) assign or transfer all or any portion of its rights,  benefits or privileges
as "collateral  agent"  hereunder or under any of the other Credit  Documents to
one or more Banks and/or (ii) delegate to or  subcontract  with, or authorize or
appoint one or more Banks to perform all or any portion of the duties, covenants
or  obligations  to  be  performed  by  Collateral  Agent  in  its  capacity  as
"collateral  agent"  hereunder or under any of the other Credit  Documents.  Any
such other Bank shall be


                                       42

<PAGE>

entitled to all of the indemnities,  immunities and other protective  provisions
that Collateral  Agent is entitled to hereunder as if such other Bank were named
as "Collateral  Agent"  hereunder.  Collateral Agent shall not be responsible to
any other Agent or Bank for the negligence or misconduct of any such other Bank.

SECTION VIII.  MISCELLANEOUS.


         8.01.  Notices.  Except as  otherwise  provided  herein,  all  notices,
requests,  demands,  consents,  instructions or other  communications to or upon
Borrower,  any Bank or any Agent under this  Restated  Credit  Agreement  or the
other Credit Documents shall be in writing and faxed, mailed or delivered, if to
Borrower,  Administrative Agent or Collateral Agent, at its respective facsimile
number or address set forth below,  if to any Bank,  at the address or facsimile
number  specified  beneath the heading  "Address for Notices"  under the name of
such Bank in Schedule  I, or if to Issuing  Bank,  at the  address or  facsimile
number  indicated in a notice  given by Issuing  Bank to the other  parties from
time to time (or to such  other  facsimile  number or  address  for any party as
indicated  in any  notice  given by that  party to the  other  party).  All such
notices and  communications  shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the Business Day following
the deposit with such service;  (b) when mailed, first class postage prepaid and
addressed as aforesaid  through the United States Postal Service,  upon receipt;
(c) when delivered by hand, upon delivery; and (d) when sent by facsimile,  upon
confirmation  of  receipt;  provided,  however,  that any  notice  delivered  to
Administrative  Agent or Issuing  Bank under  Section II shall not be  effective
until received by such Person.


    Administrative Agent:     California Bank & Trust
                              320 California Street, Suite 600
                              San Francisco, CA 94104
                              Attn:  Relationship Manager - Bell
                                         Microproducts
                              Telephone: (415) 445-8725
                              Facsimile: (415) 296-9617


    Collateral Agent:         Union Bank of California, N.A.
                              Northern California Commercial Banking Group
                              350 California Street, 10th Floor
                              San Francisco, CA 94104
                              Attention: William Hinch
                                         Vice President
                              Telephone: (415) 705-7028
                              Facsimile: (415) 705-7111


                                       43

<PAGE>

    Borrower:                 Bell Microproducts Inc.
                              1941 Ringwood Avenue
                              San Jose, California 95131
                              Attention: Mr. Remo Canessa
                                         Vice President, Chief Financial Officer
                              Telephone: (408) 467-2773
                              Facsimile: (408) 451-1632

Each Notice of Revolving Loan Borrowing, Notice of Revolving Loan Conversion or,
Notice of Revolving Loan Interest  Period  Selection or LC Application  (or copy
thereof, as the case may be) shall be given by Borrower to Administrative Agent,
and in the case of an LC  Application,  to Issuing  Bank,  to the office of such
Person located at the address  referred to above during  Administrative  Agent's
normal  business  hours;  provided,  however,  that any such notice  received by
Administrative  Agent  after  12:00  noon on any  Business  Day  shall be deemed
received by  Administrative  Agent on the next  Business  Day. In any case where
this Restated Credit Agreement  authorizes notices,  requests,  demands or other
communications  by Borrower to any Agent or any Bank to be made by  telephone or
facsimile, such Agent or Bank may conclusively presume that anyone purporting to
be a person  designated in any incumbency  certificate or other similar document
received by such Agent or Bank is such a person.

         8.02. Expenses. Borrower shall pay within thirty (30) days of a written
demand  therefor,  whether  or not any  Revolving  Loan is made or any Letter of
Credit is issued  hereunder,  (a) all  reasonable  fees and expenses,  including
reasonable  attorneys'  fees and  expenses,  incurred by any Agent in connection
with the preparation,  execution and delivery of, and the exercise of its duties
under,  this Restated Credit Agreement and the other Credit  Documents,  and the
preparation,  execution  and delivery of  amendments  and waivers  hereunder and
thereunder,   (b)  all  reasonable  fees  and  expenses,   including  reasonable
attorneys'  fees and  expenses,  incurred  by any Agent in  connection  with the
exercise of its duties (including  permitted audits and inspections)  under this
Restated Credit Agreement and the other Credit Documents, and (c) all reasonable
fees and expenses,  including reasonable attorneys' fees and expenses,  incurred
by any Agent and the Banks in the enforcement or attempted enforcement of any of
the  Obligations  or in  preserving  any of the Agent's or the Banks' rights and
remedies (including,  without limitation, all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Credit Documents or
the Obligations or any bankruptcy or similar  proceeding  involving  Borrower or
any of its Subsidiaries).  As used herein, the term "reasonable  attorneys' fees
and expenses" shall include, without limitation, allocable costs and expenses of
each Agent's and each Bank's in-house legal counsel and staff.

         8.03. Indemnification. To the fullest extent permitted by law, Borrower
agrees to protect,  indemnify, defend and hold harmless Agents and the Banks and
their  respective  directors,  officers,  employees,  agents  and any  affiliate
thereof  ("Indemnitees")  from and against any liabilities,  losses,  damages or
expenses of any kind or nature and from any suits,  claims or demands (including
in respect of or for reasonable  attorney's fees and other expenses)  arising on
account of or in connection with any matter or thing or action or failure to act
by  Indemnitees,  or any of  them,  arising  out of or  relating  to the  Credit
Documents,  including without  limitation any


                                       44

<PAGE>

use by Borrower of any  proceeds of the  Revolving  Loans,  except to the extent
such liability arises from the willful misconduct or gross negligence of (a) any
Agent  acting  on behalf of the  Banks or (b) such  Indemnitee.  Upon  receiving
knowledge of any suit,  claim or demand asserted by a third party that any Agent
or any Bank believes is covered by this indemnity, such Agent or such Bank shall
give  Borrower  notice  of the  matter  and an  opportunity  to  defend  it,  at
Borrower's sole cost and expense,  with legal counsel satisfactory to such Agent
or such  Bank,  as the case may be.  Such  Agent or such  Bank may also  require
Borrower to defend the matter.  Any failure or delay of any Agent or any Bank to
notify Borrower of any such suit,  claim or demand shall not relieve Borrower of
its obligations  under this Paragraph 8.03 but shall reduce such  obligations to
the  extent  of any  increase  in those  obligations  caused  solely  by an such
unreasonable  failure or delay. The obligations of Borrower under this Paragraph
8.03 shall survive the payment and performance of the Obligations.

         8.04. Waivers;  Amendments. Any term, covenant,  agreement or condition
of this Restated Credit Agreement or any other Credit Document may be amended or
waived if such  amendment  or waiver is in writing and is signed by Borrower and
the Required Banks; provided, however that:

                  (a) Any  amendment,  waiver or consent which (i) increases the
         Total  Revolving  Loan  Commitment,  (ii)  extends the  Revolving  Loan
         Maturity  Date,  (iii)  reduces  the  principal  of or  interest on any
         Revolving Loan or any fees or other amounts  payable for the account of
         the Banks hereunder, (iv) increases the LC Commitment or extends the LC
         Facility  Expiration Date, (v) postpones any date fixed for any payment
         of the principal of or interest on any Revolving Loans or Reimbursement
         Obligations or any fees or other amounts payable for the account of the
         Banks  hereunder or thereunder,  (v) amends this Paragraph  8.04,  (vi)
         amends the definition of Borrowing Base,  Eligible  Accounts,  Eligible
         Inventory or Required Banks,  (vii) releases any part of the Collateral
         other than an immaterial  part of the  Collateral,  (viii) releases any
         Guarantor from its Guaranty or decreases the amount of the  obligations
         guaranteed  by such  Guarantor  under  its  Guaranty,  or  (ix)  amends
         Subparagraph 5.02(m) must be in writing and signed by all Banks;


                  (b) Any  amendment,  waiver  or  consent  which  increases  or
         decreases the Revolving Loan Commitment or  Proportionate  Share of any
         Bank must be in writing and signed by such Bank;

                  (c) Any  amendment,  waiver or consent which  increases the LC
         Commitment or otherwise  affects the rights or  obligations  of Issuing
         Bank must be in writing and signed by Issuing Bank; and

                  (d) Any amendment,  waiver or consent which affects the rights
         of any Agent must be in writing and signed by such Agent.

No failure or delay by any Agent or any Bank in exercising  any right  hereunder
shall operate as a waiver  thereof or of any other right nor shall any single or
partial  exercise of any such right preclude any other further  exercise thereof
or of any other right.  Unless otherwise  specified in


                                       45

<PAGE>

such waiver or consent,  a waiver or consent given  hereunder shall be effective
only in the specific instance and for the specific purpose for which given.

         8.05.    Successors and Assigns.

                  (a) Binding  Effect.  This Restated  Credit  Agreement and the
         other Credit  Documents  shall be binding upon and inure to the benefit
         of Borrower, the Banks, the Agents, all future holders of the Revolving
         Loan  Notes and their  respective  successors  and  permitted  assigns,
         except that  Borrower  may not assign or transfer  any of its rights or
         obligations under any Credit Document without the prior written consent
         of the Agents and each Bank.  All  references in this  Restated  Credit
         Agreement to any Person shall be deemed to include all  successors  and
         assigns of such Person.

                  (b)  Participations.  Any Bank may, in the ordinary  course of
         its commercial  lending business and in accordance with applicable law,
         at any time sell to one or more banks or other  financial  institutions
         ("Participants") participating interests in any Revolving Loan owing to
         such Bank,  any  Revolving  Loan Note held by such Bank,  any Revolving
         Loan  Commitment of such Bank or any other  interest of such Bank under
         this Restated Credit Agreement and the other Credit  Documents  without
         the consent of any other party hereto;  provided,  however, that a Bank
         may not sell a participation  which would increase the Taxes payable by
         Borrower under  Paragraph 2.11 without the consent of Borrower.  In the
         event  of any  such  sale by a Bank  of  participating  interests  to a
         Participant,   such  Bank's  obligations  under  this  Restated  Credit
         Agreement to the other parties to this Restated Credit  Agreement shall
         remain  unchanged,  such Bank shall remain solely  responsible  for the
         performance  thereof,  such Bank  shall  remain  the holder of any such
         Revolving  Loan  Note  for all  purposes  under  this  Restated  Credit
         Agreement and Borrower and the Agents shall continue to deal solely and
         directly  with such Bank in  connection  with such  Bank's  rights  and
         obligations  under this Restated Credit Agreement;  provided,  however,
         that any  agreement  pursuant  to which any Bank sells a  participating
         interest to a  Participant  may require the selling  Bank to obtain the
         consent of such  Participant in order for such Bank to agree in writing
         to any  amendment  of a  type  specified  in  clause  (a)(i),  (a)(ii),
         (a)(iii) or (a)(iv) of Paragraph  8.04.  Borrower  also agrees that any
         Bank  which  has  transferred  all  or  part  of its  interests  in the
         Revolving  Loan  Commitments  and the  Revolving  Loans  to one or more
         Participants shall,  notwithstanding any such transfer,  be entitled to
         the full benefits  accorded such Bank under 2.10,  Paragraph  2.11, and
         Paragraph 2.12, as if such Bank had not made such transfer.

                  (c)  Assignments.  Any Bank may, in the ordinary course of its
         commercial  lending  business and in accordance with applicable law, at
         any time,  sell and assign to any Bank,  any affiliate of a Bank or any
         other bank or financial institution (individually,  an "Assignee Bank")
         all or a portion  of its  rights and  obligations  under this  Restated
         Credit  Agreement  and the  other  Credit  Documents  (such a sale  and
         assignment to be referred to herein as an "Assignment")  pursuant to an
         assignment   agreement  in  the  form  of  Exhibit  L  (an  "Assignment
         Agreement"),  executed by each Assignee Bank and such


                                       46

<PAGE>

         assignor  Bank (an  "Assignor  Bank") and  delivered to  Administrative
         Agent for its  acceptance  and  recording  in the  Register;  provided,
         however, that:

                           (i)  Without  the  written  consent of  Borrower  and
                  Administrative   Agent   (which   consent  of   Borrower   and
                  Administrative Agent shall not be unreasonably  withheld),  no
                  Bank may make any  Assignment  to any  Assignee  Bank which is
                  not, immediately prior to such Assignment, a Bank hereunder or
                  an affiliate  which  controls,  is  controlled  by or is under
                  common control with a Bank hereunder;

                           (ii)  Without  the written  consent of  Borrower  and
                  Administrative   Agent   (which   consent  of   Borrower   and
                  Administrative Agent shall not be unreasonably  withheld),  no
                  Bank may make any  Assignment  to any  Assignee  Bank  unless,
                  after giving effect to such Assignment, (A) the Revolving Loan
                  Commitment  of the Assignee  Bank is $5,000,000 or an integral
                  multiple  thereof and (B) the Revolving Loan Commitment of the
                  Assignor  Bank is  either  (1) $0,  if the  Assignor  Bank has
                  assigned  its  entire  Revolving  Loan   Commitment,   or  (2)
                  $5,000,000 or an integral  multiple  thereof,  if the Assignor
                  Bank  has  assigned  less  than  its  entire   Revolving  Loan
                  Commitment; and

                           (iii) No Bank may make any Assignment  which does not
                  assign and delegate an equal pro rata  interest in such Bank's
                  Revolving  Loans,  Revolving  Loan  Commitment  and all  other
                  rights,  duties  and  obligations  of  such  Bank  under  this
                  Restated Credit Agreement and the other Credit Documents.

         Upon  such  execution,  delivery,  acceptance  and  recording  of  each
         Assignment  Agreement,  from and after the  Assignment  Effective  Date
         determined  pursuant to such  Assignment  Agreement,  (A) each Assignee
         Bank  thereunder  shall  be a  Bank  hereunder  with a  Revolving  Loan
         Commitment  as set forth on Attachment 1 to such  Assignment  Agreement
         and shall have the rights,  duties and obligations of such a Bank under
         this Restated Credit Agreement and the other Credit Documents,  and (B)
         the  Assignor  Bank  thereunder  shall be a Bank with a Revolving  Loan
         Commitment as set forth on Attachment 1 to such  Assignment  Agreement,
         or, if the  Revolving  Loan  Commitment  of the Assignor  Bank has been
         reduced to $0, the  Assignor  Bank shall cease to be a Bank;  provided,
         however,  that any such  Assignor  Bank which ceases to be a Bank shall
         continue  to be  entitled  to the  benefits  of any  provision  of this
         Restated  Credit  Agreement which by its terms survives the termination
         of this Restated Credit Agreement.  Each Assignment  Agreement shall be
         deemed  to amend  Schedule  I to the  extent,  and only to the  extent,
         necessary to reflect the addition of each Assignee  Bank,  the deletion
         of each Assignor Bank which  reduces its Revolving  Loan  Commitment to
         $0, and the resulting  adjustment of Revolving Loan Commitments arising
         from the  purchase  by each  Assignee  Bank of all or a portion  of the
         rights and  obligations of an Assignor Bank under this Restated  Credit
         Agreement and the other Credit Documents. On or prior to the Assignment
         Effective  Date  determined  pursuant  to  each  Assignment  Agreement,
         Borrower,  at Assignor  Bank's  expense,  shall  execute and deliver to
         Administrative  Agent, in exchange for the  surrendered  Revolving Loan
         Note of the Assignor Bank


                                       47

<PAGE>

         thereunder,  a new  Revolving  Loan Note to the order of each  Assignee
         Bank  thereunder  (with each new Revolving Loan Note to be in an amount
         equal to the Revolving Loan  Commitment  assumed by such Assignee Bank)
         and, if the Assignor  Bank is  continuing  as a Bank  hereunder,  a new
         Revolving  Loan Note to the order of the  Assignor  Bank  (with the new
         Revolving  Loan Note to be in an  amount  equal to the  Revolving  Loan
         Commitment  retained by it). Each such new Revolving Loan Note shall be
         dated the Effective  Date and otherwise be in the form of the Revolving
         Loan  Note  replaced  thereby  (provided  that  Borrower  shall  not be
         obligated  to pay  any  additional  interest  to any  Assignee  Bank in
         respect of any principal  payments made prior to the Effective  Date of
         the  Assignment  to such  Assignee  Bank).  The  Revolving  Loan  Notes
         surrendered  by the Assignor  Bank shall be returned by  Administrative
         Agent to Borrower marked  "replaced".  Each Assignee Bank which was not
         previously a Bank  hereunder  and which is not  incorporated  under the
         laws of the United States of America or a state thereof  shall,  within
         three (3)  Business  Days of becoming a Bank,  deliver to Borrower  and
         Administrative  Agent  two  duly  completed  copies  of  United  States
         Internal  Revenue  Service Form 1001 or 4224 (or  successor  applicable
         form),  as the case may be,  certifying  in each case that such Bank is
         entitled  to receive  payments  under this  Restated  Credit  Agreement
         without  deduction or  withholding  of any United States federal income
         taxes.

                  (d)  Register.  Administrative  Agent  shall  maintain  at its
         address  referred  to in  Paragraph  8.01 a  copy  of  each  Assignment
         Agreement  delivered  to it and a  register  (the  "Register")  for the
         recordation  of the names and  addresses of the Banks and the Revolving
         Loan  Commitments  of each Bank from time to time.  The  entries in the
         Register  shall be  conclusive  in the absence of manifest  error,  and
         Borrower,  Administrative  Agent and the Banks  may treat  each  Person
         whose name is  recorded in the  Register as the owner of the  Revolving
         Loans  recorded  therein  for  all  purposes  of this  Restated  Credit
         Agreement.  The Register  shall be available for inspection by Borrower
         or any  Bank  at any  reasonable  time  and  from  time  to  time  upon
         reasonable prior notice.

                  (e) Registration.  Upon its receipt of an Assignment Agreement
         executed by an Assignor  Bank and an Assignee  Bank (and, to the extent
         required  by  Subparagraph  8.05(c),  by  Borrower  and  Administrative
         Agent),  together with payment to Administrative  Agent by the Assignor
         Bank of a registration  and  processing  fee of $2,500,  Administrative
         Agent shall (i) promptly accept such  Assignment  Agreement and (ii) on
         the Effective Date of the Assignment determined pursuant thereto record
         the  information  contained  therein in the Register and give notice of
         such   acceptance   and   recordation   to  the  Banks  and   Borrower.
         Administrative  Agent may, from time to time at its  election,  prepare
         and deliver to the Banks and  Borrower a revised  Schedule I reflecting
         the names,  addresses and respective  Revolving Loan Commitments of all
         Banks then parties hereto.

                  (f) Collateral  Security.  Notwithstanding any other provision
         contained  in this  Restated  Credit  Agreement  and any  other  Credit
         Document to the contrary, any Bank may assign all or any portion of the
         Revolving  Loans held by it to any Federal  Reserve  Bank or the United
         States  Treasury as collateral  security,  provided that any payment in


                                       48

<PAGE>

         respect of such assigned  Revolving Loan made by Borrower to or for the
         account of the assigning or pledging Bank in accordance  with the terms
         of this Restated Credit Agreement shall satisfy Borrower's  obligations
         hereunder in respect of such assigned  Revolving Loans to the extent of
         such payment.  No such assignment shall release the assigning Bank from
         its obligations hereunder.

                  (g) Confidentiality. The Agents and the Banks may disclose the
         Credit  Documents  and any financial or other  information  relating to
         Borrower  or any  Subsidiary  to each  other or to any  Participant  or
         Assignee Bank or potential  Participant or Assignee Bank which is not a
         direct  competitor  of Borrower and which agrees in writing to maintain
         the  confidentiality  thereof in accordance with safe and sound lending
         practices.

         8.06.    Setoff; Security Interest.

                  (a)  Setoff.  In  addition  to any rights and  remedies of the
         Banks  provided by law,  each Bank shall have the right  without  prior
         notice to Borrower,  any such notice being expressly waived by Borrower
         to the extent  permitted by  applicable  law, upon the  occurrence  and
         during the continuance of a Default or an Event of Default,  to set-off
         and apply  against any  Obligations  of Borrower to such Bank which are
         then due and payable,  any amount owing from such Bank to Borrower,  at
         or at any time  after,  the  happening  of any of the  above  mentioned
         events, and as security for such Obligations, Borrower hereby grants to
         each  Bank a  continuing  security  interest  in any and all  deposits,
         accounts or moneys of Borrower then or thereafter  maintained with such
         Bank, subject in each case to Subparagraph 2.09(b). The aforesaid right
         of set-off may be exercised  by such Bank  against  Borrower or against
         any  trustee in  bankruptcy,  debtor in  possession,  assignee  for the
         benefit of  creditors,  receiver or  execution,  judgment or attachment
         creditor of Borrower or against anyone else claiming through or against
         Borrower or such trustee in bankruptcy, debtor in possession,  assignee
         for the  benefit of  creditors,  receiver,  or  execution,  judgment or
         attachment  creditor,  notwithstanding  the  fact  that  such  right of
         set-off  shall  not  have  been  exercised  by such  Bank  prior to the
         occurrence  of a  Default  or an Event of  Default.  Each  Bank  agrees
         promptly to notify Borrower after any such set-off and application made
         by such Bank,  provided  that the failure to give such notice shall not
         affect the validity of such set-off and application.

                  (b)  Security  Interest.  As  security  for  the  Obligations,
         Borrower  hereby grants to each Bank,  for the benefit of all Banks,  a
         continuing  security interest in any and all deposit accounts or moneys
         of Borrower now or hereafter maintained with such Bank. Each Bank shall
         have all of the rights of a secured party with respect to such security
         interest.

         8.07. No Third Party Rights. Nothing expressed in or to be implied from
this  Restated  Credit  Agreement is intended to give,  or shall be construed to
give, any Person,  other than the parties hereto and their permitted  successors
and assigns hereunder,  any benefit or legal or equitable right, remedy or claim
under or by virtue of this  Restated  Credit  Agreement or under or by virtue of
any provision herein.


                                       49

<PAGE>

         8.08. Partial Invalidity. If at any time any provision of this Restated
Credit Agreement is or becomes illegal,  invalid or unenforceable in any respect
under  the  law  or  any  jurisdiction,   neither  the  legality,   validity  or
enforceability of the remaining provisions of this Restated Credit Agreement nor
the legality,  validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.

         8.09.    Arbitration.

                  (a)  This  Paragraph  8.09  concerns  the  resolution  of  any
         controversies  or claims  between or among  Borrower,  any Bank and any
         Agent, including but not limited to those that arise from:

                           (i)  This  Restated  Credit  Agreement  or any  other
                  Credit Document;

                           (ii) Any violation of this Restated Credit  Agreement
                  or any other Credit Document; or

                           (iii)  Any  claims  for  damages  resulting  from any
                  business conducted between Borrower and any Bank or any Agent,
                  including  claims for injury to persons,  property or business
                  interests.

                  (b) At the  request of  Borrower,  any Bank or any Agent,  any
         controversies  or claims will be settled by  arbitration  in accordance
         with the United States  Arbitration Act. The United States  Arbitration
         Act will apply even though this Restated Credit Agreement provides that
         it is governed by California law.

                  (c)  Arbitration  proceedings  will  be  administered  by  the
         American Arbitration  Association and will be subject to its commercial
         rules of  arbitration.  The  arbitration  will be conducted  within the
         California county of San Francisco.  Borrower,  the Banks and any Agent
         expressly agree that the arbitrator(s) (i) shall apply contract law and
         (ii) shall not be empowered to make any award which a California  court
         is not empowered to make or any award for punitive damages.

                  (d)  For  purposes  of  the  application  of  the  statute  of
         limitations, the filing of an arbitration pursuant to this paragraph is
         the equivalent of the filing of a lawsuit, and any claim or controversy
         which  may  be  arbitrated  under  this  paragraph  is  subject  to any
         applicable  statute  of  limitations.  The  arbitrators  will  have the
         authority to decide  whether any such claim or controversy is barred by
         the statute of limitations and if so to dismiss the arbitration on that
         basis.

                  (e)  If  there  is  a  dispute  as  to  whether  an  issue  is
         arbitrable, the arbitrators will have the authority to resolve any such
         dispute.

                  (f) The decision that results from an  arbitration  proceeding
         may be submitted  to any  authorized  court of law to be confirmed  and
         enforced.


                                       50

<PAGE>

                  (g) The  procedure  described  above  will  not  apply  if the
         controversy  or  claim,  at the  time  of the  proposed  submission  to
         arbitration  arises from or relates to an obligation to Bank secured by
         real property  located in  California.  If the obligation is secured by
         real  property,  Borrower,  each Bank and each  Agent  must  consent to
         submission of the claim or controversy to  arbitration.  If all parties
         do not consent to arbitration, the controversy or claim will be settled
         as follows:

                           (i) Borrower, the Banks and the Agents will designate
                  a referee (or a panel of referees) selected under the auspices
                  of the American Arbitration  Association in the same manner as
                  arbitrators are selected in Association-sponsored proceedings;

                           (ii)  The   designated   referee  (or  the  panel  of
                  referees)  will  be  appointed  by  a  court  as  provided  in
                  California  Code  of  Civil  Procedure  Section  638  and  the
                  following related sections;

                           (iii) The  referee (or the  presiding  referee of the
                  panel) will be an active attorney or a retired judge; and

                           (iv) The award that  results from the decision of the
                  referee  (or the panel)  will be entered as a judgment  in the
                  court that  appointed  the  referee,  in  accordance  with the
                  provisions of California Code of Civil Procedure  Sections 644
                  and 645.

                  (h) This  Paragraph 8.09 does not limit the right of Borrower,
         any Bank or any Agent to:

                           (i) Exercise self-help remedies such as setoff;

                           (ii)  Foreclose  against or sell any real or personal
                  property collateral; or

                           (iii) Take action in a court of law,  before,  during
                  or after the  arbitration  proceeding  to  obtain  an  interim
                  remedy or additional or supplementary remedies.

                  (i) The  pursuit  of or a decision  in an action for  interim,
         additional or supplementary  remedies, or the filing of a court action,
         does not constitute a waiver of the right of Borrower,  any Bank or any
         Agent, including the suing party, to submit the controversy or claim to
         arbitration.

         8.10. Jury Trial.  EACH OF BORROWER,  THE BANKS AND THE AGENTS,  TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY  IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,  PROCEEDING,  OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS RESTATED CREDIT AGREEMENT OR ANY
OTHER CREDIT DOCUMENT NOT RESOLVED PURSUANT TO PARAGRAPH 8.09.


                                       51

<PAGE>

         8.11.  Counterparts.  This Restated Credit Agreement may be executed in
any number of identical counterparts, any set of which signed by all the parties
hereto  shall be deemed to  constitute  a complete,  executed  original  for all
purposes.

SECTION IX.  EFFECTIVE DATE OF RESTATED CREDIT AGREEMENT.

         9.01.  Effective  Date.  This Restated  Credit  Agreement  shall become
effective on a Business Day on or prior to November  12, 1998 as  designated  by
Borrower in a written notice to  Administrative  Agent (the  "Effective  Date"),
subject to receipt by Administrative  Agent (a) at least three (3) Business days
prior  to the  Effective  Date of  Borrower's  written  notice  designating  the
Effective Date and (b) on or prior to the Effective Date, of each item listed in
Schedule 3.01, each in form and substance reasonably  satisfactory to the Banks,
and with sufficient copies for, each Agent and each Bank.

         9.02. Loans Under Existing Credit Agreement. On the Effective Date, all
loans  outstanding  under the Existing  Credit  Agreement  shall be deemed to be
Revolving Loans made by each of the Banks under this Restated Credit  Agreement,
and all accrued unpaid  interest  thereon shall begin to accrue  interest at the
rates set forth in this Restated Credit Agreement.

         9.03.  Effect.  On and after the Effective  Date,  this Restated Credit
Agreement,  the Borrower  Security  Agreement and the Borrower Pledge  Agreement
shall  amend,  restate in their  entirety  and replace,  without  novation,  the
Existing Credit Agreement,  the Amended and Restated Security Agreement dated as
of May 23,  1995  executed by  Borrower  in favor of  Administrative  Agent (the
"Existing  Borrower  Security  Agreement")  and the Amended and Restated  Pledge
Agreement   dated  as  of  May  23,  1995  executed  by  Borrower  in  favor  of
Administrative  Agent (the "Existing Borrower Pledge Agreement"),  respectively;
provided,  however,  that the  execution  and delivery of this  Restated  Credit
Agreement, the Borrower Security Agreement and the Borrower Pledge Agreement and
the other Credit Documents shall not (a) operate as a waiver of any right, power
or  remedy of the  Banks  under the  Existing  Credit  Agreement,  the  Existing
Security  Agreement  or the  Existing  Pledge  Agreement,  except to the  extent
expressly  waived in this  Restated  Credit  Agreement,  the  Borrower  Security
Agreement,  the Borrower Pledge Agreement or the other Credit Documents,  or (b)
extinguish  or impair any  obligations  of Borrower  under the  Existing  Credit
Agreement,  the Existing  Security  Agreement or the Existing  Pledge  Agreement
except to the extent any such obligation is actually satisfied by Borrower.

                      [The next page is the signature page]


                                       52

<PAGE>


         IN  WITNESS  WHEREOF,  Borrower,  the Banks,  Administrative  Agent and
Collateral Agent have caused this Restated Credit Agreement to be executed as of
the day and year first above written.

BORROWER:                                         BELL MICROPRODUCTS INC.


                                                  By:________________________
                                                       Name:
                                                       Title:


ADMINISTRATIVE AGENT:                             CALIFORNIA BANK & TRUST,
                                                  As Administrative Agent

                                                  By:________________________
                                                       Name:
                                                       Title:


                                                  By:________________________
                                                       Name:
                                                       Title:


COLLATERAL AGENT:                                 UNION BANK OF CALIFORNIA, N.A.
                                                  As Collateral Agent

                                                  By:________________________
                                                       Name:
                                                       Title:


BANKS:                                            CALIFORNIA BANK & TRUST,
                                                  As a Bank

                                                  By:________________________
                                                       Name:
                                                       Title:


                                                  By:________________________
                                                       Name:
                                                       Title:


                                       53

<PAGE>

                                                 UNION BANK OF CALIFORNIA, N.A.


                                                 By:___________________________
                                                      Name:
                                                      Title:


                                                 SANWA BANK CALIFORNIA,
                                                 As a Bank

                                                 By:___________________________
                                                      Name:
                                                      Title:


                                                 COMERICA BANK-CALIFORNIA,
                                                 As a Bank

                                                 By:___________________________
                                                      Name:
                                                      Title:


                                                 U.S. BANK NATIONAL ASSOCIATION,
                                                 As a Bank

                                                 By:___________________________
                                                      Name:
                                                      Title:


                                                 By:___________________________
                                                      Name:
                                                      Title:


                                       54


<PAGE>


                                                 IBM CREDIT CORPORATION,
                                                 As a Bank

                                                 By:___________________________

                                                      Name:
                                                      Title:



                                       55

<PAGE>

                                   SCHEDULE I

                                      BANKS

                     Bank                              Revolving Loan Commitment

CALIFORNIA BANK & TRUST                                       $30,000,000

Applicable Lending Office: 465 California
Street, First FloorSan Francisco, CA 94104

Address for Notices: 465 California Street,
First Floor San Francisco, CA 94104
Attn: Relationship Manager Bell Microproducts
Telephone: (415) 875-1445
Facsimile (415) 875-1456

UNION BANK OF CALIFORNIA, N.A.                                $30,000,000

Applicable Lending Office: 99 Almaden Boulevard,
2nd Floor San Jose, CA  95133

Address for Notices: Northern California
Commercial Banking Group 350 California Street,
10th Floor San Francisco, CA  94104
Attention:  William Hinch Vice President
Telephone: (415)705-7028
Facsimile  (415) 705-7111


                                      I-1

<PAGE>


COMERICA BANK - CALIFORNIA                                    $30,000,000

Applicable Lending Office: California
Corporate Banking 155 Grand Avenue,
Suite 402 Oakland, CA 94612

Address for Notices: California Corporate
Banking 155 Grand Avenue, Suite 402
Oakland, CA 94612 Attn:  Scott Smith
Telephone: (510) 645-2202
Facsimile  (510) 645-2220

SANWA BANK CALIFORNIA                                         $20,000,000

Applicable Lending Office:San Jose
CBC220 Almaden Boulevard San Jose, CA
95113-2003

Address for Notices: 220 Almaden Boulevard
San Jose, CA  95113-2003
Attn: Clifford M. Wallace
Telephone: (408) 297-6500
Facsimile  (408) 292-4092


                                      I-2

<PAGE>

U.S. BANK NATIONAL ASSOCIATION                                $20,000,000
Applicable Lending Office:
U.S. Bank National Association
Corporate Banking Center
2890 North Main Street
Walnut Creek, CA  94596

Address for Notices:
U.S. Bank National Association
California Corporate Banking
2890 North Main Street
Walnut Creek, CA
94596
Attn: Michael Powell
Telephone: (925) 942-9489
Facsimile  (925) 945-6919

IBM CREDIT CORPORATION                                        $30,000,000

Applicable Lending Office:
IBM Credit Corporation
5000 Executive Parkway, Suite 450
San Ramon, CA  94583

Address for Notices:
IBM Credit Corporation
5000 Executive Parkway, Suite 450
San Ramon, CA  94583
Attn: Region Manager, West
Telephone: (925) 277-5600
Facsimile: (925) 277-5675


                                      I-3

<PAGE>

                                   SCHEDULE II

                                  PRICING GRID

                           LEVEL 1    LEVEL 2    LEVEL 3    LEVEL 4    LEVEL 5
                           PERIOD     PERIOD     PERIOD     PERIOD     PERIOD

APPLICABLE
MARGINS:                   1.45%      1.65%      1.85%      2.05%      2.25%


                                   EXPLANATION

1.       The  Applicable  Margin for each  Revolving  LIBOR Loan will be set for
         each Pricing Period and will vary depending upon whether such period is
         a Level 1 Period,  a Level 2 Period, a Level 3 Period, a Level 4 Period
         or a Level 5 Period.

2.       The first Pricing Period,  which commences on the November 12, 1998 and
         ends on February 28, 1999, will be a Level 3 Period.

3.       Each  Pricing  Period  thereafter  will be a Level 1 Period,  a Level 2
         Period,  a  Level  3  Period,  a Level  4  Period  or a Level 5  Period
         depending upon Borrower's Leverage Ratio (as calculated pursuant to the
         definition of "Leverage Ratio" set forth in Schedule 1.01) for the most
         recent  fiscal  quarter  period  ending  prior to the first day of such
         Pricing Period as follows:

         (a)      If, during any Pricing  Period,  Borrower's  Leverage Ratio is
                  less than 2.00 to 1.00,  Borrower's  pricing will be a Level 1
                  Period.

         (b)      If, during any Pricing  Period,  Borrower's  Leverage Ratio is
                  greater  than or equal to 2.00 to 1.00 but less  than or equal
                  to 2.50 to 1.00, Borrower's pricing will be a Level 2 Period.

         (c)      If, during any Pricing  Period,  Borrower's  Leverage Ratio is
                  greater  than  2.50 to 1.00 but less  than or equal to 3.00 to
                  1.00, Borrower's pricing will be a Level 3 Period.

         (d)      If, during any Pricing  Period,  Borrower's  Leverage Ratio is
                  greater  than  3.00 to 1.00 but less  than or equal to 3.25 to
                  1.00, Borrower's pricing will be a Level 4 Period.

         (e)      If, during any Pricing  Period,  Borrower's  Leverage Ratio is
                  greater than 3.25 to 1.00,  Borrower's pricing will be a Level
                  5 Period.


                                      II-1

<PAGE>

                                  SCHEDULE 1.01

                                   DEFINITIONS

         "Adjusted  Net Income"  shall mean,  with respect to any Person for any
period, the sum,  determined on a consolidated basis in accordance with GAAP, of
the following:

                  (a)  The  net  income  or net  loss  of  such  Person  and its
         Subsidiaries  for such  period  before  provision  for income  taxes or
         interest;

                                      minus

                  (b) The sum of (i) all extraordinary and non-recurring  income
         of such Person and its Subsidiaries accruing during such period (to the
         extent added in calculating net income or loss in clause (a) above) and
         (ii) all dividends paid or declared by such Person and its Subsidiaries
         during such period (except for dividends paid or payable to such Person
         or any of its wholly-owned Subsidiaries).

         "Adjusted Total Liabilities" shall mean, with respect to any Person for
any period, the sum of the following:

                  (a) The total  liabilities of such Person and its Subsidiaries
         (determined on a consolidated basis in accordance with GAAP);

                                      plus

                  (b) To the  extent  not  included  in clause  (a)  above,  all
         liabilities of such Person and its  Subsidiaries  under or with respect
         to  (i)  Synthetic   Leases  and  (ii)  letters  of  credit,   banker's
         acceptances or other similar facilities.

         "Administrative  Agent"  shall have the  meaning  given to that term in
clause (3) of the introductory paragraph hereof.

         "Affiliate"  shall mean,  with  respect to any Person,  (a) each Person
that,  directly or indirectly,  owns or controls,  whether  beneficially or as a
trustee,  guardian or other fiduciary, five percent (5%) or more of any class of
Equity Securities of such Person,  (b) each Person that controls,  is controlled
by or is under common  control with such Person or any  Affiliate of such Person
or (c) each of such Person's employees, officers, directors, joint venturers and
partners;  provided,  however,  that in no case  shall  any Agent or any Bank be
deemed to be an Affiliate of Borrower or any of its Subsidiaries for purposes of
this Restated Credit Agreement. For the purpose of this definition, "control" of
a Person  shall mean the  possession,  directly or  indirectly,  of the power to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.

         "Agents" shall mean Administrative Agent and Collateral Agent.


                                     1.01-1

<PAGE>

         "Agent's Fee Letter"  shall mean the letter  agreement  dated as of the
Fourth Amendment Effective Date among Borrower, Administrative Agent, Collateral
Agent and Comerica Bank - California.

         "Almo" shall mean Almo corporation, a Pennsylvania corporation.

         "Almo  Warrant"  shall  mean,  collectively,  the  warrants  issued  by
Borrower to Almo in connection with Borrower's  acquisition of substantially all
of the  assets  of  Almo's  computer  products  division  entitling  Almo or any
subsequent  holder  thereof to convert such  warrants  into no more than 350,000
shares of Equity Securities issued by Borrower.

         "Applicable  Lending  Office" shall mean, with respect to any Bank, (a)
initially,  its office  designated as such in Schedule I (or, in the case of any
Bank which becomes a Bank by an Assignment pursuant to Subparagraph 8.05(c), its
office  designated  as  such in the  applicable  Assignment  Agreement)  and (b)
subsequently,  such  other  office  or  offices  of such Bank may  designate  to
Administrative  Agent as the office at which such  Bank's  Revolving  Loans will
thereafter be maintained  and for the account of which all payments of principal
of, and interest on, such Bank's Revolving Loans will thereafter be made.

         "Applicable  Margin" shall mean,  with respect to any  Revolving  LIBOR
Loan at any time,  the per annum  margin  which is  determined  pursuant  to the
Pricing  Grid and  added to the LIBO Rate for such  Revolving  LIBOR  Loan.  The
Applicable  Margins  shall be determined as provided in the Pricing Grid and may
change for each Pricing Period.

         "Assignee   Bank"  shall  have  the  meaning  given  to  that  term  in
Subparagraph 8.05(c).

         "Assignment"  shall have the meaning given to that term in Subparagraph
8.05(c).

         "Assignment  Agreement"  shall have the  meaning  given to that term in
Subparagraph 8.05(c).

         "Assignment Effective Date" shall have, with respect to each Assignment
Agreement, the meaning set forth therein.

         "Assignor   Bank"  shall  have  the  meaning  given  to  that  term  in
Subparagraph 8.05(c).

         "Banks"  shall have the meaning given to that term in clause (2) of the
introductory  paragraph  hereof.  Unless otherwise  indicated,  the term "Banks"
shall include any Bank acting as Issuing Bank but not in its capacity as such.

         "Bell Canada" shall mean Bell  Microproducts  Canada Inc., a California
corporation and a wholly-owned Subsidiary of Borrower.

         "Bell  Canada  Guaranty"  shall have the meaning  given to that term in
Subparagraph 2.13(a).


                                     1.01-2

<PAGE>


         "Bell Canada  Pledge  Agreement"  shall have the meaning  given to that
term in Subparagraph 2.13(b).

         "Bell-Future Tech" shall mean Bell  Microproducts-Future  Tech, Inc., a
California corporation and a wholly-owned Subsidiary of the Borrower.

         "Bell-Future  Tech Security  Documents" shall have the meaning given to
that term in Subparagraph 2.13(c).

         "Bell-Future  Tech Guaranty"  shall have the meaning given to that term
in Subparagraph 2.13(c).

         "Bell-Future  Tech Security  Agreement" shall have the meaning given to
that term in Subparagraph 2.13(c).

         "Bell-Tenex"  shall mean Bell  Microproducts  Canada-Tenex  Data ULC, a
Nova Scotia, Canada unlimited liability company and a wholly-owned Subsidiary of
Bell Canada.

         "Bell-Tenex  Canadian Security  Documents" shall have the meaning given
to that term in Subparagraph 2.13(b).

         "Bell-Tenex  Guaranty"  shall  have the  meaning  given to that term in
Subparagraph 2.13(b).

         "Bell-Tenex  Security  Agreement"  shall have the meaning given to that
term in Subparagraph 2.13(b).

         "Borrower"  shall have the meaning  given to that term in clause (1) of
the introductory paragraph hereof.

         "Borrower  Pledge  Agreement" shall have the meaning given to that term
in Subparagraph 2.13(a).

         "Borrower Security Agreement" shall have the meaning given to that term
in Subparagraph 2.13(a).

         "Borrowing  Base"  shall  have  the  meaning  given  to  that  term  in
Subparagraph 2.03(a).

         "Borrowing Base Certificate"  shall have the meaning given to that term
in Subparagraph 5.01(a).

         "Business Day" shall mean any day on which (a) commercial banks are not
authorized or required to close in San  Francisco,  California or New York,  New
York and (b) if such Business Day is related to a Revolving LIBOR Loan, dealings
in Dollar deposits are carried out in the London interbank market.


                                     1.01-3

<PAGE>


         "Capital  Adequacy  Requirement"  shall have the meaning  given to that
term in Subparagraph 2.10(d).


         "Capital  Asset"  shall  mean,  with  respect to any  Person,  tangible
property owned or leased (in the case of a Capital Lease) by such Person, or any
expense  incurred  by any Person  that is  required by GAAP to be reported as an
asset on such Person's balance sheet.

         "Capital  Event"  shall  mean  the  sale or  issuance  by  Borrower  of
Borrower's Equity Securities or Subordinated  Indebtedness in one transaction or
a series of related transaction (other than in connection with the conversion of
the Almo Warrant or any stock option or similar plan of Borrower  created in the
normal course of Borrower's business).

         "Capital  Expenditures"  shall mean, with respect to any Person and any
period, all amounts expended and Indebtedness incurred or assumed by such Person
during such period for the acquisition of real property and other Capital Assets
(including  amounts expended and Indebtedness  incurred or assumed in connection
with Capital Leases).

         "Capital  Leases"  shall mean any and all lease  obligations  that,  in
accordance with GAAP, are required to be capitalized on the books of a lessee.

         "CB&T" shall have the meaning given to that term in Recital A.

         "Change  of  Law"  shall  have  the  meaning  given  to  that  term  in
Subparagraph 2.10(b).

         "Code"  shall mean the Internal  Revenue Code of 1986,  as amended from
time to time.

         "Collateral" shall mean all property in which any Agent or any Bank has
a Lien to secure the Obligations.

         "Collateral  Agent" shall have the meaning given to that term in clause
(3) of the  introductory  paragraph  hereof or any other Person that assumes the
duties and responsibilities of Collateral Agent pursuant to Subparagraph 7.07.

         "Contractual Obligation" of any Person shall mean, any indenture, note,
security,  deed  of  trust,  mortgage,   security  agreement,  lease,  guaranty,
instrument, contract, agreement or other form of obligation to which such Person
is a party or by which such Person or any of its property is bound.

         "Credit   Documents"  shall  mean  and  include  this  Restated  Credit
Agreement,  the  LC  Applications,   the  Revolving  Loan  Notes,  the  Security
Documents, all amendments hereof and thereof, all waivers and consents hereunder
and thereunder and all other documents,  instruments and agreements delivered by
Borrower or any of its  Subsidiaries to any Agent or any Bank in connection with
this Restated Credit Agreement.

         "Credit  Event"  shall  mean the  making  of any  Revolving  Loan,  the
conversion of any Revolving Loan from one Type of Revolving Loan to another Type
or the selection of a new


                                     1.01-4

<PAGE>

Interest  Period for any Revolving  LIBOR Loan, or the issuance of any Letter of
Credit or any  amendment  of any  Letter of Credit  which  increases  its stated
amount or extends its expiration date.

         "Default" shall mean any event or circumstance  not yet constituting an
Event of Default  which with the giving of any notice or the lapse of any period
of time or both, would become an Event of Default.

         "Dollars"  and "$" shall mean the lawful  currency of the United States
of America and, in relation to any payment under this Restated Credit Agreement,
same day or immediately available funds.

         "Drawing  Payment"  shall  have  the  meaning  given  to  that  term in
Subparagraph 2.02(c).


         "EBITDA" shall mean, with respect to any Person for any period, the sum
of the  following,  determined on a consolidated  basis in accordance  with GAAP
where applicable:

                  (a)  The  net  income  or net  loss  of  such  Person  and its
         Subsidiaries for such period before provision for income taxes;

                                      plus

                  (b) The sum (to the extent  deducted in calculating net income
         or loss in clause  (a)  above)  of (i) all  Interest  Expenses  of such
         Person and its  Subsidiaries  accruing  during such period and (ii) all
         depreciation  and  amortization  of such  Person  and its  Subsidiaries
         accruing during such period.

         "Effective Date" shall have the meaning given to that term in Paragraph
9.01.

         "Eligible Accounts" shall mean, with respect to Borrower and, after the
Tenex Data Acquisition and the delivery to  Administrative  Agent of each of the
items listed on Schedule  5.01(j),  Bell-Tenex,  the aggregate net amount of all
accounts (as defined in the California  Uniform Commercial Code) of Borrower and
Bell-Tenex, except, to the extent not already deducted, the following:

                  (a) Any account which does not arise from the sale or lease of
         goods  or  services  rendered  to the  account  debtor  thereon  in the
         ordinary course of Borrower's or the Canadian  Subsidiaries'  business,
         or which arises from a sale,  lease or service which has not been fully
         performed by Borrower or Bell-Tenex;

                  (b) Any  account or portion  thereof to the extent the same is
         subject  to any  right  of  discount,  credit,  allowance,  rescission,
         setoff,   claim  or  defense  or  which  is  otherwise  not  valid  and
         enforceable against the account debtor thereon;

                  (c) Any  account  which  is not  subject  to a first  priority
         perfected  security  interest  in favor  of  Collateral  Agent  for the
         benefit of the Agents and the Banks;


                                     1.01-5

<PAGE>

                  (d) Any account  which is not owned by Borrower or  Bell-Tenex
         free and clear of all Liens,  rights and interests of all other Persons
         except for Permitted Liens;

                  (e) Any  account  which is unpaid  more than  ninety (90) days
         after the invoice date therefor;

                  (f) Any  account  arising  from a  consignment  by Borrower or
         Bell-Tenex as consignee or a COD shipment;

                  (g) Any account payable by (i) the United States government or
         any  department,  agency or other  subdivision  thereof  (except to the
         extent Borrower  complies with the Federal  Assignment of Claims Act of
         1940, as amended),  (ii) a Person located in any  jurisdiction  outside
         the United States or Canada  (excluding the provinces of  Newfoundland,
         Nova Scotia,  Prince Edward Island, New Brunswick,  Nunavut,  Manitoba,
         Saskatchewan,  Alberta and the Yukon  Territory),  except to the extent
         secured by a letter of credit  acceptable to Collateral Agent, or (iii)
         an Affiliate of Borrower;

                  (h) Any account  payable by an account debtor (i) which is the
         subject  of  any   bankruptcy,   insolvency,   liquidation  or  similar
         proceeding,  (ii) which has made an  assignment  for the benefit of its
         creditors,  (iii) for which a receiver has been appointed or (iv) which
         has  admitted in writing its  inability  to pay its debts as such debts
         become due;

                  (i) All accounts payable by an account debtor which has failed
         to pay twenty percent (20%) or more of its total accounts  payable owed
         to Borrower and/or  Bell-Tenex within ninety (90) days of their invoice
         date;

                  (j) Any  account  payable  by an  account  debtor in which the
         total  accounts  payable from such account  debtor  exceeds twenty five
         percent  (25%) of the total  amount of all  Eligible  Accounts,  to the
         extent  of  such  excess  (except  as  approved  from  time  to time by
         Collateral Agent); and

                  (k)  Any  other  account  which  Collateral  Agent  reasonably
         determines is unlikely to be paid in full within ninety (90) days after
         the invoice date.

         (As used in clauses (a)-(k) of this definition, the term "account" when
         used in the singular  form shall mean an account  arising from a single
         invoice.)

         "Eligible  Inventory"  shall mean,  with respect to Borrower and, after
the Tenex Data Acquisition and the delivery to  Administrative  Agent of each of
the items  listed on  Schedule  5.01(j),  Bell-Tenex,  the net book value of all
inventory (as defined in the California Uniform Commercial Code) of Borrower and
Bell-Tenex, except the following:

                  (a)  Any  inventory  which  is not  held  by or on  behalf  of
         Borrower or Bell-Tenex for sale or lease in the ordinary  course of its
         business;

                  (b)      Any inventory consisting of work-in-process;


                                     1.01-6

<PAGE>

                  (c) Any  inventory  which is not  subject to a first  priority
         perfected  security  interest  in favor  of  Collateral  Agent  for the
         benefit of the Agents and the Banks;

                  (d) Any inventory  located in any jurisdiction  other than the
         United States or Canada (excluding the provinces of Newfoundland,  Nova
         Scotia,  Prince Edward Island, New Brunswick,  Manitoba,  Saskatchewan,
         Alberta and Yukon Territory);

                  (e) Any inventory which is not owned by Borrower or Bell-Tenex
         free and clear of all Liens,  rights and interests of all other Persons
         except for Permitted Liens;

                  (f) Any inventory which is obsolete, unsalable or damaged;

                  (g) Any  inventory  which has been  consigned  by  Borrower or
         Bell-Tenex (except for such inventory on consignment approved from time
         to time by Collateral Agent);

                  (h)  The  portion  of any  inventory  shown  on the  books  of
         Borrower or Bell-Tenex  representing any purchase price discount earned
         by Borrower or Bell-Tenex; and

                  (i) Any other  inventory  which  Collateral  Agent  reasonably
         determines is unlikely to be sold at or above its net book value.

         "Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of section 3(3) of ERISA maintained or contributed to by Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.

         "Environmental  Laws"  means all  Requirements  of Law  relating to the
protection of human health or the environment,  including,  without  limitation,
(a) all  Requirements of Law,  pertaining to reporting,  licensing,  permitting,
investigation, and remediation of emissions, discharges, releases, or threatened
releases of hazardous materials, chemical substances, pollutants,  contaminants,
or hazardous or toxic substances,  materials or wastes whether solid, liquid, or
gaseous  in  nature,  into the air,  surface  water,  groundwater,  or land,  or
relating to the manufacture,  processing, distribution, use, treatment, storage,
disposal,   transport,   or  handling  of   chemical   substances,   pollutants,
contaminants,  or hazardous or toxic substances,  materials,  or wastes, whether
solid,  liquid, or gaseous in nature; and (b) all Requirements of Law pertaining
to the protection of the health and safety of employees or the public.

         "Equity  Securities"  of any Person  shall  mean (a) all common  stock,
preferred stock,  participations,  shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants,  options and other rights to acquire
any of the foregoing.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be  amended  or  supplemented,  including  any
rules or regulations issued in connection therewith.


                                     1.01-7

<PAGE>

         "ERISA  Affiliate"  shall mean any Person  which is treated as a single
employer with Borrower under Section 414 of the Code.

         "Event  of  Default"  shall  have the  meaning  given  to that  term in
Paragraph 6.01.

         "Excluded  Collateral" shall have the meaning given to that term in the
Borrower Security Agreement.

         "Existing  Borrower Pledge  Agreement"  shall have the meaning given to
that term in Paragraph 9.03.

         "Existing Borrower Security  Agreement" shall have the meaning given to
that term in Paragraph 9.03.

         "Existing  Credit  Agreement" shall have the meaning given to that term
in Recital A.

         "Federal Funds Rate" shall mean,  for any day, the weighted  average of
the per annum rates on overnight Federal funds transactions with member banks of
the Federal Reserve System arranged by Federal funds brokers as published by the
Federal  Reserve  Bank of New York for such  day,  (or,  if such  rate is not so
published for any day, the average rate quoted to  Administrative  Agent on such
day by three (3)  Federal  funds  brokers of  recognized  standing  selected  by
Administrative Agent).

         "Federal  Reserve  Board"  shall  mean the  Board of  Governors  of the
Federal Reserve System.

         "Fee on Increased Commitment" shall have the meaning given to that term
in Subparagraph 2.03(c).

         "Financial  Statements"  shall  mean,  with  respect to any  accounting
period for any Person,  statements of income and of changes in cash flow of such
Person for such period,  and balance sheets of such Person as of the end of such
period,  setting  forth  in  each  case  in  comparative  form  figures  for the
corresponding  period in the preceding fiscal year if such period is less than a
full fiscal year or, if such period is a full fiscal year, corresponding figures
from the  preceding  annual  audit,  all  prepared in  reasonable  detail and in
accordance with GAAP.

         "First Amendment Effective Date" shall mean May 14, 1999.

         "Fourth Amendment Effective Date" shall mean December 8, 1999.

         "Fifth Amendment Effective Date" shall mean December 31, 1999.

         "Future Tech  Acquisition"  shall mean the  acquisition  by Bell-Future
Tech of substantially all of the assets of the Future Tech International, Inc.

         "Future Tech  Acquisition  Effective Date" shall mean the date that the
Future Tech Acquisition is consummated.


                                     1.01-8

<PAGE>

         "GAAP"  shall  mean  generally  accepted   accounting   principles  and
practices  as in  effect in the  United  States  of  America  from time to time,
consistently  applied,  provided,  however,  that with respect to Borrower,  the
definition  of  "current  liabilities"  as set forth in GAAP shall  include  the
Obligations.

         "Governmental  Authority" shall mean any domestic or foreign  national,
state or local government,  any political  subdivision  thereof, any department,
agency,  authority  or  bureau  of any of the  foregoing,  or any  other  entity
exercising  executive,  legislative,   judicial,  regulatory  or  administrative
functions of or pertaining to government,  including,  without  limitation,  the
Federal  Deposit   Insurance   Corporation,   the  Federal  Reserve  Board,  the
Comptroller of the Currency, any central bank or any comparable authority.

         "Governmental Charges" shall mean all levies, assessments, fees, claims
or other charges imposed by any  Governmental  Authority upon or relating to (i)
Borrower or any of its Subsidiaries,  (ii) the Revolving Loans, (iii) employees,
payroll,  income or gross receipts of Borrower or any of its Subsidiaries,  (iv)
the ownership or use of any of its assets by Borrower or any of its Subsidiaries
or (v) any other aspect of the business of Borrower or any of its Subsidiaries.

         "Governmental  Rule" shall mean any law, rule,  regulation,  ordinance,
order, code interpretation,  judgment, decree, directive,  guidelines, policy or
similar form of decision of any Governmental Authority.

         "Guaranty" shall mean, collectively,  the Bell Canada Guaranty and, the
Bell-Tenex Guaranty and the Bell-Future Tech Guaranty.

         "Indebtedness"  of any Person  shall mean and  include (a) all items of
indebtedness  and liabilities  which, in accordance with GAAP, would be included
in determining  liabilities  that are shown on the liability side of the balance
sheet of such Person,  (b) all  indebtedness  and  liabilities  of other Persons
assumed or  guaranteed  by such  Person or in  respect  of which such  Person is
secondarily  or  contingently   liable  whether  by  any  agreement  to  acquire
indebtedness and liabilities or to supply or advance funds or otherwise, and (c)
all  indebtedness  and  liabilities of other Persons  secured by any Lien in any
property of such Person (including without limitation Capital Leases).

         "Indemnitees"  shall have the meaning  given to that term in  Paragraph
8.03.

         "Interest  Account"  shall  have  the  meaning  given  to that  term in
Subparagraph 2.07(b).

         "Interest  Coverage  Ratio" shall mean,  with respect to any Person for
any period,  the ratio,  determined on a consolidated  basis in accordance  with
GAAP,  of (a) the sum of the Adjusted  Net Income and Interest  Expenses of such
Person and its Subsidiaries for such period to (b) the Interest Expenses of such
Person and its Subsidiaries for such period.


                                     1.01-9

<PAGE>

         "Interest  Expenses"  shall  mean,  with  respect to any Person for any
period, the sum,  determined on a consolidated basis in accordance with GAAP, of
(a) all interest expenses of such Person and its Subsidiaries during such period
(including, without limitation, (i) the amortization of debt discounts, (ii) the
amortization   of  all  fees  payable  in  connection  with  the  incurrence  of
Indebtedness to the extent included in interest expense and (iii) the portion of
any Capitalized  Lease  Obligations  allocable to interest expense and financing
charges  attributable to Synthetic Leases whether calculated as interest expense
or rental  expense)  plus (b) all letter of credit  fees  payable by such Person
accruing during such period.

         "Interest Period" shall mean, with respect to any Revolving LIBOR Loan,
the time  periods  selected by  Borrower  pursuant  to  Subparagraph  2.01(b) or
Subparagraph  2.01(d) which commences on the first day of such Revolving Loan or
the  effective  date of any  conversion  and ends on the  last day of such  time
period,  and  thereafter,  each  subsequent  time  period  selected  by Borrower
pursuant  to  Subparagraph  2.01(e)  which  commences  on  the  last  day of the
immediately preceding time period and ends on the last day of that time period.

         "Investment"  of any Person  shall mean any loan or advance of funds by
such Person to any other Person (other than advances to employees of such Person
for moving and travel expense,  drawing accounts and similar expenditures in the
ordinary  course of business),  any purchase or other  acquisition of any Equity
Securities or Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person (including,
without  limitation,  any  Indebtedness  incurred  by such  Person  of the  type
described in clauses (b) and (c) of the definition of  "Indebtedness"  on behalf
of any other Person);  provided,  however,  that  Investments  shall not include
accounts receivable or other indebtedness owed by customers of such Person which
are current assets and arose from sales in the ordinary  course of such Person's
business.

         "Issuing Bank" shall mean CB&T, in its capacity as issuer of Letters of
Credit under Paragraph 2.02.

         "LC  Application"  shall  have  the  meaning  given  to  that  term  in
Subparagraph 2.02(b).

         "LC  Commitment"   shall  have  the  meaning  given  to  that  term  in
Subparagraph 2.02(a).

         "LC Facility Expiration Date" shall have the meaning given to that term
in Subparagraph 2.02(a).

         "LC  Issuance  Fees"  shall  have the  meaning  given  to that  term in
Subparagraph 2.04(c).

         "LC  Usage  Fee"  shall  have  the  meaning   given  to  that  term  in
Subparagraph 2.04(c).

         "Letter  of  Credit"  shall  have the  meaning  given  to that  term in
Subparagraph 2.02(a).

         "Leverage  Ratio"  shall mean,  with respect to any Person at any time,
the ratio,  determined on a consolidated  basis in accordance  with GAAP, of (a)
the Adjusted Total


                                    1.01-10

<PAGE>

Liabilities of such Person and its Subsidiaries at such time to (b) the Tangible
Net Worth of such Person and its Subsidiaries at such time.

         "LIBO Rate" shall mean,  with  respect to any  Interest  Period for the
Revolving  LIBOR Loans in any Revolving Loan  Borrowing  consisting of Revolving
LIBOR Loans, a rate per annum equal to the quotient of (a) the rate per annum at
which  Dollar  deposits are offered to CB&T in the London  interbank  eurodollar
currency  market on the second  Business Day prior to the  commencement  of such
Interest Period at or about 11:00 A.M.  (London time) (for delivery on the first
day of such Interest  Period) for a term  comparable to such Interest Period and
in an amount  approximately equal to the amount of the Revolving Loan to be made
by CB&T as part of such Revolving Loan  Borrowing,  divided by (b) one minus the
Reserve  Requirement  for such Revolving  Loans in effect from time to time. The
LIBO Rate  applicable  to any  Revolving  Loan for any Interest  Period shall be
automatically  adjusted during such Interest Period to reflect any change in the
applicable Reserve Requirement.

         "Lien" shall mean, with respect to any property, any security interest,
mortgage,  pledge,  lien, claim,  charge or other encumbrance in, of, or on such
property or the income therefrom, including, without limitation, the interest of
a vendor or lessor under a conditional  sale  agreement,  Capital Lease or other
title retention agreement, or any agreement to provide any of the foregoing, and
the filing of any financing  statement or similar  instrument  under the Uniform
Commercial Code or comparable law of any jurisdiction.

         "Margin  Stock" shall have the meaning given to that term in Regulation
U issued by the Federal  Reserve  Board,  as amended from time to time,  and any
successor regulation thereto.

         "Material  Adverse Effect" shall mean a material  adverse effect on (a)
the business, assets,  operations,  prospects or financial or other condition of
Borrower or any of its  Subsidiaries;  (b) the ability of Borrower or any of its
Subsidiaries  to pay or perform the  Obligations in accordance with the terms of
this Restated Credit  Agreement and the other Credit  Documents;  (c) the rights
and remedies of any Agent or any Bank under this Restated Credit Agreement,  the
other Credit Documents or any related  document,  instrument or agreement or (d)
the value of the Collateral, any Agent's or any Bank's security interests in the
Collateral or the perfection or priority of such security interests.

         "Maturity"   shall  mean,   with   respect  to  any   Revolving   Loan,
Reimbursement  Obligation,  interest,  fees or other amount  payable by Borrower
under this Restated  Credit  Agreement or the other Credit  Documents,  the date
such Revolving Loan,  Reimbursement  Obligation,  interest,  fee or other amount
becomes due, whether upon the stated maturity or due date, upon  acceleration or
otherwise.

         "Multiemployer  Plan"  shall  mean any  multiemployer  plan  within the
meaning of section 3(37) of ERISA  maintained or  contributed  to by Borrower or
any ERISA Affiliate.

         "Net Income  After Tax" shall mean,  with respect to any Person for any
period,  the net income or net loss of such Person and its Subsidiaries for such
period (after provision for income taxes), determined on a consolidated basis in
accordance with GAAP.


                                    1.01-11

<PAGE>

         "Net Operating  Income" shall mean,  with respect to any Person for any
period, the sum,  determined on a consolidated basis in accordance with GAAP, of
the following:

                  (a)  The  net  income  or net  loss  of  such  Person  and its
         Subsidiaries for such period (before provision for income taxes);

                                      plus

                  (b) The sum (to the extent  deducted in calculating net income
         or loss in clause (a)  above) of all  extraordinary  and  non-recurring
         expenses  of such  Person and its  Subsidiaries  accruing  during  such
         period;

                                      minus

                  (c) The sum (to the extent added in calculating  net income or
         loss in clause (a) above) of all extraordinary and non-recurring income
         of such Person and its Subsidiaries accruing during such period.

         "Net  Proceeds"  shall mean with respect to the sale or issuance of any
Indebtedness,  any Equity  Security or any other  security  by any  Person,  the
aggregate  consideration received by such Person from such sale or issuance less
the sum of the actual amount of the reasonable fees and  commissions  payable to
Persons other than such Person or any Affiliate of such Person,  the  reasonable
legal and other professional expenses and the other reasonable expenses directly
related to such sale or issuance that are to be paid by such Person.

         "Notice of Revolving  Loan  Borrowing"  shall have the meaning given to
that term in Subparagraph 2.01(b).

         "Notice of Revolving Loan  Conversion"  shall have the meaning given to
that term in Subparagraph 2.01(d).

         "Notice of Revolving  Loan Interest  Period  Selection"  shall have the
meaning given to that term in Subparagraph 2.01(e).

         "Obligations"  shall mean and include,  with  respect to Borrower,  all
loans, advances, debts, liabilities, and obligations, howsoever arising, owed by
Borrower to any Agent or the Banks of every kind and description (whether or not
evidenced  by any note or  instrument  and  whether  or not for the  payment  of
money),  direct or indirect,  absolute or contingent,  due or to become due, now
existing or  hereafter  arising  pursuant to the terms of this  Restated  Credit
Agreement or any of the other Credit Documents, including without limitation all
interest,  fees,  charges,  expenses,  attorneys'  fees  and  accountants'  fees
chargeable to Borrower or payable by Borrower hereunder or thereunder.

         "Outstanding  Facilities  Credit"  shall have the meaning given to that
term in Subparagraph 2.03(a).

         "Participant" shall have the meaning given to that term in Subparagraph
8.05(b).


                                    1.01-12

<PAGE>

         "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation,  or any
successor thereto.

         "Permitted Dividend" shall mean and include:

                  (a) Dividends payable solely in the common stock of Borrower;

                  (b) Dividends payable by any wholly-owned Subsidiary solely to
         Borrower; and

                  (c)  Repurchases  of employee  stock  pursuant  to  repurchase
         agreements.

         "Permitted Indebtedness" shall mean and include:

                  (a)  Indebtedness  to   subcontractors   and  trade  creditors
         incurred in the ordinary course of business;

                  (b) Indebtedness of Borrower to the Banks and the Agents under
         this Restated Credit Agreement and the other Credit Documents;

                  (c) Unsecured Indebtedness of Borrower,  provided that (A) the
         Obligations  shall at all times rank  senior in right of  payment  with
         such unsecured  Indebtedness,  (B) such unsecured Indebtedness does not
         contain  material  provisions that are more restrictive to Borrower and
         its  Subsidiaries  than  the  material  provisions  contained  in  this
         Restated Credit Agreement,  (C) no principal payable in connection with
         such unsecured Indebtedness is scheduled for payment on or prior to the
         Maturity  Date,  and  (D)  such  unsecured  Indebtedness  is  otherwise
         acceptable to the Banks in their sole discretion;

                  (d) Purchase money Indebtedness  incurred to acquire a Capital
         Asset provided that (i) such  Indebtedness does not exceed the purchase
         price of such Capital  Asset,  (ii) such  Indebtedness  is incurred not
         later than  thirty  (30) days after the  acquisition  of such asset and
         (iii) the sum of all payments due on such purchase  money  Indebtedness
         and Capital  Leases and operating  leases  referred to in the following
         clause (e) shall not  exceed in the  aggregate  $500,000  in any fiscal
         year;

                  (e)  Indebtedness  under Capital  Leases and operating  leases
         provided  that the sum of all payments  due on such Capital  Leases and
         operating  leases and purchase  money  Indebtedness  referred to in the
         preceding clause (d) shall not exceed in the aggregate  $500,000 in any
         fiscal year; provided,  however, that amounts paid by Borrower pursuant
         to that  certain  operating  lease  agreement,  dated as of October 22,
         1999, by and between Borrower and Winthrop Resources Corporation, shall
         be excluded from the  calculation  set forth in this clause (e) and the
         preceding  clause  (d)  for so  long  as the  sum of all  payments  due
         thereunder  does not exceed in the  aggregate  $1,000,000 in any fiscal
         year;

                  (f) Indebtedness of any wholly-owned Subsidiary of Borrower to
         Borrower  arising from the extension by Borrower to such  Subsidiary of
         working capital financing in the ordinary course of Borrower's and such
         Subsidiary's  businesses,  provided  that,  to


                                    1.01-13

<PAGE>

         the extent requested by Collateral Agent, such Subsidiary has taken all
         steps necessary to grant to Borrower and perfect security  interests in
         the assets of such Subsidiary as security for such Indebtedness;

                  (g)  Indebtedness  arising from the endorsement of instruments
         in the ordinary course of business;

                  (h)  Indebtedness of Borrower and its Subsidiaries to any Bank
         under Rate  Contracts,  provided,  that (A) all such  arrangements  are
         entered into in connection  with bona fide hedging  operations  and not
         for  speculation  and (B) the aggregate net amount owed by Borrower and
         its  Subsidiaries  under, on account of or otherwise in connection with
         such Rate Contracts does not exceed  $50,000,000  (marked to market) at
         any time; and

                  (i) Other Indebtedness not exceeding $100,000 at any time.

         "Permitted Investments" shall mean and include:

                  (a) Deposits with commercial banks organized under the laws of
         the United  States or a state  thereof to the extent such  deposits are
         fully insured by the Federal Deposit Insurance Corporation;

                  (b)  Investments  in  marketable  obligations  issued or fully
         guaranteed  by the United States and maturing not more than ninety (90)
         days from the date of issuance;

                  (c)  Investments  (including  debt  obligations)  received  in
         connection  with the  bankruptcy  or  reorganization  of  customers  or
         suppliers and in settlement  of  delinquent  obligations  of, and other
         disputes with, customers or suppliers;

                  (d)  Investments   arising  under  Rate  Contracts   otherwise
         permitted  pursuant  to  clause  (h) of the  definition  of  "Permitted
         Indebtedness"; and

                  (e) Investments not otherwise  permitted  hereby not exceeding
         in the aggregate $50,000 at any time outstanding.

         "Permitted Liens" shall mean and include:

                  (a) Liens for taxes or other  governmental  charges not at the
         time  delinquent  or  thereafter   payable  without  penalty  or  being
         contested in good faith,  provided  provision is made to the reasonable
         satisfaction  of Collateral  Agent for the eventual  payment thereof if
         subsequently found payable;

                  (b) Liens of carriers, warehousemen,  mechanics,  materialmen,
         vendors,  and landlords incurred in the ordinary course of business for
         sums not overdue or being contested in good faith,  provided  provision
         is made to the  reasonable  satisfaction  of  Collateral  Agent for the
         eventual payment thereof if subsequently found payable;


                                    1.01-14

<PAGE>

                  (c)  Deposits   under  workers'   compensation,   unemployment
         insurance  and social  security  laws or to secure the  performance  of
         bids,  tenders,  contracts  (other than for the  repayment  of borrowed
         money) or  leases,  or to  secure  statutory  obligations  of surety or
         appeal bonds or to secure indemnity, performance or other similar bonds
         in the ordinary course of business;

                  (d) Liens  arising  out of a judgment  or award not  exceeding
         $100,000  (exclusive  of any amounts  covered by insurance  issued by a
         Person not an Affiliate of Borrower) with respect to which an appeal is
         being  prosecuted,  a stay of  execution  pending  appeal  having  been
         secured;

                  (e)  Liens  securing  purchase  money   indebtedness  if  such
         indebtedness  is Permitted  Indebtedness  pursuant to clause (d) of the
         definition  thereof and such Liens do not extend to property other than
         the property financed with such indebtedness;

                  (f) Liens securing  obligations  under a Capital Lease if such
         lease  is  Permitted   Indebtedness  pursuant  to  clause  (e)  of  the
         definition  thereof and such Liens do not extend to property other than
         the property leased under such Capital Lease;

                  (g)  Liens  in favor of any  Agent or any Bank to  secure  the
         Obligations;

                  (h) Leases,  subleases,  licenses and  sublicenses  granted to
         Borrower  the  granting  of which  is not  prohibited  pursuant  to the
         definition of Permitted Indebtedness;

                  (i) Liens in favor of customs  and revenue  authorities  which
         secure payment of duties in connection with the importation of goods;

                  (j) Liens existing on property  acquired by Borrower or any of
         its  Subsidiaries at the time of such  acquisition  (including Liens on
         the assets of any Person at the time such Person  becomes a  Subsidiary
         of Borrower),  unless such Liens were created in  contemplation of such
         acquisition;

                  (k)  Liens on  insurance  policies  and the  proceeds  thereof
         incurred  solely to secure the financing of premiums owing with respect
         thereto;

                  (l) Liens in favor of Borrower; and

                  (m)  Such   minor   defects,   irregularities,   encumbrances,
         easements,  rights of way,  and  clouds on title as  normally  exist on
         similar  properties  which do not,  individually  or in the  aggregate,
         materially impair the property affected thereby or the use thereof.

         "Person"  shall  mean and  include  an  individual,  a  partnership,  a
corporation   (including  a  business   trust),   a  joint  stock  company,   an
unincorporated  association,  a limited liability  company,  a joint venture,  a
trust or other entity or a Governmental Authority.

         "Pricing Grid" shall mean Schedule II.


                                    1.01-15

<PAGE>

         "Pricing Period" shall mean (a) the period  commencing on the Effective
Date and ending on February 28, 1999, (b) the period commencing on March 1, 1999
and ending on May 31, 1999, and (c) each consecutive three-calendar month period
thereafter  which commences on the day following the last day of the immediately
preceding  three-calendar  month  period  and ends on the last day of that  time
period as follows:

                  (i) December 1st through  February  28th or February  29th (as
         applicable);

                  (ii) March 1st through May 31st;

                  (iii) June 1st through August 31st; and

                  (iv) September 1st through November 30th.

         "Prime Rate" shall mean the per annum rate  publicly  announced by CB&T
from  time to time at its head  office  as its prime  rate.  The  Prime  Rate is
determined by CB&T from time to time as a means of pricing credit  extensions to
some customers and is neither  directly tied to any external rate of interest or
index nor necessarily  the lowest rate of interest  charged by CB&T at any given
time for any particular class of customers or credit extensions.

         "Proportionate Share" shall mean, with respect to any Bank at any time,
a fraction  (expressed as a  percentage),  the numerator of which is such Bank's
Revolving Loan Commitment at such time and the denominator of which is the Total
Revolving Loan Commitment at such time.

         "Quick Ratio" shall mean,  with respect to any Person at any time,  the
ratio,  determined on a consolidated  basis in accordance  with GAAP, of (a) the
cash and trade accounts  receivable of such Person and its  Subsidiaries at such
time to (b) the current  liabilities of such Person and its Subsidiaries at such
time.

         "Rate Contracts" shall mean swap agreements (as that term is defined in
Section 101 of the Federal  Bankruptcy  Reform Act of 1978,  as amended) and any
other  agreements  or  arrangements   designed  to  provide  protection  against
fluctuations in interest or currency exchange rates.

         "Reimbursement Obligation" shall have the meaning given to that term in
Subparagraph 2.02(c).

         "Reimbursement  Payment"  shall have the meaning  given to that term in
Subparagraph 2.02(c).

         "Reportable  Event" shall have the meaning  given to that term in ERISA
and applicable regulations thereunder.

         "Required  Banks"  shall  mean  (a) at any  time  Revolving  Loans  are
outstanding, Banks holding sixty-six and two-thirds percent (66 2/3%) or more of
the aggregate  principal  amount of


                                    1.01-16

<PAGE>

such  Revolving  Loans and (b) at any time no Revolving  Loans are  outstanding,
Banks  whose  Proportionate  Shares  equal or exceed  sixty-six  and  two-thirds
percent (66 2/3%).

         "Requirement  of Law"  applicable  to any  Person  shall  mean  (a) the
Articles or Certificate of Incorporation and By-laws,  Partnership  Agreement or
other organizational or governing documents of such Person, (b) any Governmental
Rule  applicable  to such  Person,  (c) any license,  permit,  approval or other
authorization  granted by any  Governmental  Authority  to or for the benefit of
such Person and (d) any judgment,  decision or determination of any Governmental
Authority or arbitrator,  in each case applicable to or binding upon such Person
or any of its  property  or to  which  such  Person  or any of its  property  is
subject.

         "Reserve  Requirement"  shall  mean,  with  respect  to  any  day in an
Interest  Period for a  Revolving  LIBOR  Loan,  the  aggregate  of the  reserve
requirement   rates  (expressed  as  a  decimal)  in  effect  on  such  day  for
eurocurrency  funding  (currently  referred to as "Eurocurrency  liabilities" in
Regulation D of the Federal Reserve Board) required to be maintained by a member
bank  of  the  Federal  Reserve  System.  As  used  herein,  the  term  "reserve
requirement"  shall include,  without  limitation,  any basic,  supplemental  or
emergency reserve requirements imposed on Bank by any Governmental Authority.

         "Restated  Borrower Pledge  Agreement"  shall have the meaning given to
that term in Paragraph 9.03.

         "Restated Borrower Security  Agreement" shall have the meaning given to
that term in Paragraph 9.03.

         "Restated  Credit  Agreement" shall have the meaning given to that term
in the introductory paragraph hereof.

         "Revolving  LIBOR Loan"  shall have the  meaning  given to that term in
Subparagraph 2.01(b).

         "Revolving  Loan"  shall  have  the  meaning  given  to  that  term  in
Subparagraph 2.01(a).

         "Revolving  Loan   Borrowing"   shall  mean  a  borrowing  by  Borrower
consisting  of a  Revolving  Loan  made by each Bank on the same date and of the
same Type pursuant to a single Notice of Revolving Loan Borrowing.

         "Revolving Loan Commitment"  shall mean, with respect to each Bank, the
amount set forth  opposite  the name of such Bank in Schedule I under the column
entitled "Revolving Loan Commitment" or as reduced from time to time pursuant to
Paragraph 2.03 hereof.

         "Revolving Loan  Commitment  Fees" shall have the meaning given to that
term in Subparagraph 2.04(b).

         "Revolving  Loan  Maturity  Date" shall have the meaning  given to that
term in Subparagraph 2.01(a).


                                    1.01-17

<PAGE>


         "Revolving  Loan  Note"  shall have the  meaning  given to that term in
Subparagraph 2.07(a).

         "Revolving  Prime Rate Loan" shall have the meaning  given to that term
in Subparagraph 2.01(b).

         "SecurityDocuments"  shall mean and include (i) prior to the Tenex Data
Acquisition Effective Date and after the Future Tech Acquisition Effective Date,
the Borrower Security Agreement,  the Borrower Pledge Agreement, the Bell Canada
Guaranty,  and all other documents,  instruments and agreements delivered to any
Agent  or  any  Bank  to  secure  the  Obligations  or in  connection  with  the
Collateral; (ii) on and after the Tenex Data Acquisition Effective Date, each of
the items  listed in clause (i) above,  the Bell Canada  Pledge  Agreement,  the
Bell-Tenex Guaranty, the Bell-Tenex Security Agreement,  the Bell-Tenex Canadian
Security Documents; and (iii) on and after the Future Tech Acquisition Effective
Date,  each of the  items  listed in  clause  (i) and  clause  (ii)  above,  the
Bell-Future  Tech  Guaranty,  the  Bell-Future  Tech  Security  Agreement,   the
Bell-Future Tech Security  Documents,  and all other documents,  instruments and
agreements  delivered to any Agent or any Bank to secure the  Obligations  or in
connection with the Collateral.

         "Senior  Adjusted  Total  Liabilities"  shall  mean,  with  respect  to
Borrower at any time, the difference of the following:

                  (a)  The  Adjusted  Total  Liabilities  of  Borrower  and  its
         Subsidiaries at such time;

                                      minus

                  (b)  The  aggregate   principal  amount  of  all  Subordinated
         Indebtedness of Borrower permitted pursuant to Subparagraph 5.02(b) and
         clause (c) of the definition of "Permitted Indebtedness".

          "Solvent"  shall mean, with respect to any Person on any date, that on
such date (a) the fair value of the  property of such Person is greater than the
fair  value  of  the  liabilities  (including,  without  limitation,  contingent
liabilities)  of such Person,  (b) the present fair saleable value of the assets
of such  Person is not less than the  amount  that will be  required  to pay the
probable  liability  of such  Person on its debts as they  become  absolute  and
matured,  (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities  mature  and  (d)  such  Person  is not  engaged  in  business  or a
transaction,  and is not about to engage in business or a transaction, for which
such Person's property would constitute an unreasonably small amount of capital.

         "Subordinated  Indebtedness"  shall  mean  the  unsecured  subordinated
Indebtedness of Borrower permitted  pursuant to Subparagraph  5.02(b) and clause
(c) of the definition of "Permitted Indebtedness".


                                    1.01-18

<PAGE>

         "Subsidiary" of any Person shall mean (a) any corporation of which more
than 50% of the issued and outstanding  Equity Securities having ordinary voting
power  to  elect a  majority  of the  Board  of  Directors  of such  corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation  shall or might have voting power upon the occurrence of any
contingency)  is at the time directly or indirectly  owned or controlled by such
Person,  by such Person and one or more of its other  Subsidiaries  or by one or
more of such Person's other  Subsidiaries,  (b) any partnership,  joint venture,
limited  liability  company or other  association  of which more than 50% of the
equity  interest  having the power to vote,  direct or control the management of
such  partnership,  joint venture or other  association is at the time owned and
controlled  by such  Person,  by  such  Person  and  one or  more  of the  other
Subsidiaries or by one or more of such Person's other  subsidiaries  and (c) any
other  Person  included  in  the  Financial  Statements  of  such  Person  on  a
consolidated basis.

         "Synthetic Lease" shall mean an off-balance sheet financing arrangement
for  equipment or real estate which is treated as an operating  lease under GAAP
but  pursuant  to which the  lessee of such  equipment  or real  estate  has the
benefits  and burdens of  ownership  of the leased  equipment or real estate for
U.S. tax purposes.

         "Tangible  Net Worth"  shall  mean,  with  respect to any Person at any
time,  the  remainder  at such  time,  determined  on a  consolidated  basis  in
accordance  with  GAAP,  of  (a)  the  total  assets  of  such  Person  and  its
Subsidiaries  minus (b) the sum (without  limitation and without  duplication of
deductions) of (i) the total  liabilities  of such Person and its  Subsidiaries,
(ii)  all  reserves   established  by  such  Person  and  its  Subsidiaries  for
anticipated losses and expenses (to the extent not deducted in calculating total
assets in clause (a) above),  (iii) all intangible assets of such Person and its
Subsidiaries  (to the extent included in calculating  total assets in clause (a)
above), including, without limitation,  goodwill (including any amounts, however
designated  on the  balance  sheet,  representing  the  cost of  acquisition  of
businesses and investments in excess of underlying tangible assets), trademarks,
trademark  rights,  trade  name  rights,  copyrights,  patents,  patent  rights,
licenses,   unamortized  debt  discount,   marketing  expenses,   organizational
expenses,  non-compete agreements and deferred research and development and (iv)
the amount, if any, by which the aggregate intercompany receivables owed to such
Person by its Affiliates exceeds the aggregate intercompany  receivables payable
by such Person to its Affiliates.

         "Taxes"  shall have the meaning  given to such term in  Paragraph 2.11.

         "Tenex Data  Acquisition"  shall mean the  acquisition by Bell-Tenex of
substantially  all of the assets of the Tenex Data Division of Axidata,  Inc., a
Canadian corporation and a Subsidiary of Abitibi, Inc., a Canadian corporation.

         "Tenex Data  Acquisition  Effective  Date" shall mean the date that the
Tenex Data Acquisition is consummated.

         "Total Revolving Loan Commitment"  shall mean One Hundred Sixty Million
Dollars  ($160,000,000)  or, if such amount is reduced pursuant to 2.03(b),  the
amount to which so reduced and in effect at such time.


                                    1.01-19

<PAGE>


         "Total Unused Revolving Loan  Commitment"  shall mean, at any time, the
remainder of (a) the Total  Revolving Loan Commitment at such time minus (b) the
Outstanding Facilities Credit at such time.


         "Type" shall mean, with respect to any Revolving Loan or Revolving Loan
Borrowing at any time,  the  classification  of such Revolving Loan or Revolving
Loan  Borrowing by the type of interest rate it then bears,  whether an interest
rate based on the Prime Rate or the LIBO Rate.

         "UBOC" shall mean Union Bank of  California, N.A., a  national  banking
association.

         "Working  Capital" shall mean,  with respect to any Person at any time,
the  working  capital  of such  Person  and its  Subsidiaries,  determined  on a
consolidated basis in accordance with GAAP.


                                    1.01-20
<PAGE>

                                  SCHEDULE 3.01

                       EFFECTIVE DATE CONDITIONS PRECEDENT

A.       PRINCIPAL CREDIT DOCUMENTS.

                  (1)    The Third Amended and Restated Credit Agreement,   duly
                         executed by Borrower, each Bank, Administrative   Agent
                         and Collateral Agent;

                  (2)    The Revolving  Loan Note payable to  each  Bank,  duly
                         executed by Borrower;

                  (3)    The Borrower  Security  Agreement,   duly  executed  by
                         Borrower;

                  (4)    The  Borrower   Pledge  Agreement,  duly   executed  by
                         Borrower; and

                  (5)    The Bell Canada Guaranty, duly executed by Bell Canada;

B.       FINANCIAL STATEMENTS, FINANCIAL CONDITION, ETC.

                  (1) Copies of (a) the audited Financial Statements of Borrower
         and its  Subsidiaries  for the fiscal  year ended  December  31,  1997,
         prepared  by  Pricewaterhousecoopers,  LLP.,  and (b)  the  unqualified
         opinion (or qualified opinion  reasonably  acceptable to the Banks) and
         management  letter (if any) delivered by such accountants in connection
         with such Financial Statements; and

                  (2) A Borrowing  Base  Certificate  dated the  Effective  Date
         which sets forth the  calculation of the Borrowing Base as of September
         30, 1998, certified by the Chief Financial Officer of Borrower.

C.       BORROWER CORPORATE DOCUMENTS.

                  (1) The Articles of Incorporation of Borrower, certified as of
         a recent date prior to the Effective  Date by the Secretary of State of
         California;

                  (2) A Certificate of Good Standing (or comparable certificate)
         for Borrower, certified as of a recent date prior to the Effective Date
         by the Secretary of State of California;

                  (3) A certificate  of the  Secretary of Borrower,  dated as of
         the date of this Restated  Credit  Agreement,  certifying  (a) that the
         Articles of  Incorporation  of Borrower,  in the form  certified by the
         Secretary of State of California and delivered to Administrative  Agent
         pursuant to item C(1)  hereof,  is in full force and effect and has not
         been amended, supplemented,  revoked or repealed since the date of such
         certification;  (b) that attached thereto is a true and correct copy of
         the Bylaws of Borrower  as in effect on the  Effective  Date;  (c) that
         attached  thereto  are true and  correct  copies  of  resolutions  duly
         adopted by the Board of Directors of Borrower and continuing in effect,
         which authorize


                                   3.01(e)-1
<PAGE>

         the  execution,  delivery and  performance by Borrower of this Restated
         Credit  Agreement  and the other  Credit  Documents  executed  or to be
         executed  by  Borrower  and  the   consummation  of  the   transactions
         contemplated hereby and thereby;  and (d) that there are no proceedings
         for  the   dissolution  or   liquidation  of  Borrower   (commenced  or
         threatened);

                  (4) A certificate  of the  Secretary of Borrower,  dated as of
         the date of this Restated Credit Agreement,  certifying the incumbency,
         signatures  and  authority  of the officers of Borrower  authorized  to
         execute,  deliver and perform this  Restated  Credit  Agreement and the
         other applicable Credit Documents on behalf of Borrower; and

                  (5) A Certificate of Good Standing (or comparable certificate)
         for each Subsidiary of Borrower, certified as of a recent date prior to
         the  Effective  Date by the  Secretary of State (or  comparable  public
         official) of such  Subsidiary's  jurisdiction of incorporation  (or, in
         the case of a foreign  subsidiary,  an opinion of counsel acceptable to
         Administrative Agent to such effect).

D.       BELL CANADA CORPORATE DOCUMENTS.

                  (1) The Certificate of Incorporation of Bell Canada, certified
         as of a recent  date  prior  to the  Effective  Date by the  California
         Secretary of State;

                  (2) A Certificate of Good Standing (or comparable certificate)
         for Bell Canada,  certified as of a recent date prior to the  Effective
         Date by the California Secretary of State;

                  (3) A certificate of the Secretary of  Bell-Canada,  dated the
         Effective Date, certifying (a) that the Certificate of Incorporation of
         Bell-Canada, in the form certified by the California Secretary of State
         and delivered to Administrative  Agent pursuant to item D(1) hereof, is
         in full  force  and  effect  and has not  been  amended,  supplemented,
         revoked  or  repealed  since the date of such  certification;  (b) that
         attached  thereto  is a true and  correct  copy of the  Bylaws  of Bell
         Canada as in effect on the Effective  Date;  (c) that attached  thereto
         are true and correct copies of resolutions duly adopted by the Board of
         Directors of Bell Canada and continuing in effect,  which authorize the
         execution,  delivery  and  performance  by Bell  Canada  of the  Credit
         Documents   executed   or  to  be  executed  by  Bell  Canada  and  the
         consummation of the transactions  contemplated hereby and thereby;  and
         (d) that there are no proceedings for the dissolution or liquidation of
         Bell Canada (commenced or threatened); and

                  (4) A certificate  of the Secretary of Bell Canada,  dated the
         Effective Date, certifying the incumbency,  signatures and authority of
         the officers of Bell Canada authorized to execute,  deliver and perform
         the applicable Credit Documents on behalf of Bell Canada.


                                   3.01(e)-2
<PAGE>


E.       SECURITY DOCUMENTS.

                  (1)  All  Uniform   Commercial   Code   financing   statements
         (including   amendments  and  fixture  filings)  and  other  documents,
         instruments and agreements  reasonably requested by Collateral Agent to
         perfect  the  security  interests,  liens and  assignments  granted  to
         Collateral  Agent by Borrower  in  connection  herewith,  appropriately
         completed and duly executed by the appropriate parties;

                  (2) Uniform Commercial Code search certificates evidencing the
         filing of the  financing  statements  necessary to perfect the security
         interests  granted to  Collateral  Agent by  Borrower  pursuant  to the
         Credit  Documents  prior  to the  financing  statements  of  all  other
         Persons;

                  (3)  The  certificates   representing  the  stock  pledged  to
         Collateral  Agent pursuant to the Borrower Pledge  Agreement,  together
         with blank  stock  powers for each such  certificate  duly  executed by
         Borrower.

                  (4)  Such  other  documents,  instruments  and  agreements  as
         Collateral  Agent may  reasonably  request to establish and perfect the
         Liens granted to Collateral  Agent or any Bank in this  Agreement,  the
         Security Documents and the other Credit Documents.

F.       OPINIONS.

                  (1) A written opinion of Wilson,  Sonsini,  Goodrich & Rosati,
         outside  counsel  to  Borrower,  dated  as of the  Effective  Date  and
         addressed to  Administrative  Agent and each Bank,  covering such legal
         matters as Administrative Agent may reasonably request and otherwise in
         form and substance satisfactory to Administrative Agent.

G.       OTHER ITEMS.

                  (1) A duly completed and timely delivered Notice of Borrowing.

                  (2) A certificate of the President,  a Vice President or Chief
         Financial Officer of Borrower,  addressed to  Administrative  Agent and
         the Banks and dated as of the Effective Date, certifying that:

                           (a) The  representations  and warranties set forth in
                  Paragraph 4.01 are true and correct as of such date;

                           (b) No Event of Default or Default has  occurred  and
                  is continuing as of such date; and

                           (c)  Each  of the  Credit  Documents  required  to be
                  delivered to  Administrative  Agent or any Bank on or prior to
                  the  Effective  Date is in full  force  and  effect as of such
                  date;


                                   3.01(e)-3
<PAGE>

                  (3)   Certificates   of  insurance  in  forms   acceptable  to
         Collateral Agent,  naming Collateral Agent as additional  insured or as
         loss payee;

                  (4) All fees payable to Administrative  Agent and the Banks on
         or prior to the Effective Date;

                  (5) All fees and expenses of  Administrative  Agent's  counsel
         through the Effective Date; and

                  (6) Such other evidence as any Bank may reasonably  request to
         establish  the accuracy and  completeness  of the  representations  and
         warranties and the compliance  with the terms and conditions  contained
         in this Restated Credit Agreement and the other Credit Documents.


                                   3.01(g)-4

<PAGE>

                                SCHEDULE 4.01(g)

                               MATERIAL LITIGATION

                                      None






                                   4.01(g)-1


<PAGE>




                                SCHEDULE 4.01(q)
<TABLE>
                                  SUBSIDIARIES
<CAPTION>

Name                                       Jurisdiction         Classes         Outstanding       Percent
                                                of                 of             Shares           Owned
                                           Incorporation          Stock         -----------        -----
                                           -------------        -------
<S>                                         <C>                  <C>               <C>              <C>
Bell Microproducts Canada, Inc.             California           Common              100            100%
Bell Microproducts-Future Tech, Inc.        California           Common            1,000            100%
</TABLE>


                                   4.01(q)-1
<PAGE>


                                SCHEDULE 5.01(j)

                      DOCUMENTS TO BE DELIVERED BY BORROWER
            ON OR PRIOR TO THE TENEX DATA ACQUISITION EFFECTIVE DATE

A.       PRINCIPAL BELL CANADA AND BELL-TENEX CREDIT DOCUMENTS.

                  (1) The Bell Canada  Pledge  Agreement,  duly executed by Bell
         Canada;

                  (2) The Bell-Tenex Guaranty, duly executed by Bell-Tenex;

                  (3)  The  Bell-Tenex  Security  Agreement,  duly  executed  by
         Bell-Tenex; and

                  (4) The Bell-Tenex Canadian Security Documents,  duly executed
         by Bell-Tenex.

B.       BELL-TENEX CORPORATE DOCUMENTS.

                  (1) The Certificate of Incorporation of Bell-Tenex,  certified
         as of a recent date prior to the Tenex Data Acquisition  Effective Date
         by the Deputy Registrar of Joint Stock Companies of Nova Scotia;

                  (2) A Certificate of Good Standing (or comparable certificate)
         for  Bell-Tenex,  certified as of a recent date prior to the Tenex Data
         Acquisition  Effective  Date by the  Deputy  Registrar  of Joint  Stock
         Companies of Nova Scotia;

                  (3) A certificate  of the Secretary of  Bell-Tenex,  dated the
         Tenex  Data  Acquisition   Effective  Date,  certifying  (a)  that  the
         Certificate of  Incorporation  of Bell-Tenex,  in the form certified by
         the  Deputy  Registrar  of Joint  Stock  Companies  of Nova  Scotia and
         delivered to  Administrative  pursuant to item B(1) hereof,  is in full
         force and effect  and has not been  amended,  supplemented,  revoked or
         repealed  since  the  date of such  certification;  (b)  that  attached
         thereto is a true and correct  copy of the  Memorandum  and Articles of
         Association  of Bell-Tenex  as in effect on the Tenex Data  Acquisition
         Effective  Date; (c) that attached  thereto are true and correct copies
         of resolutions duly adopted by the Board of Directors of Bell-Tenex and
         continuing  in effect,  which  authorize  the  execution,  delivery and
         performance  by  Bell-Tenex of the Credit  Documents  executed or to be
         executed  by  Bell-Tenex  and  the  consummation  of  the  transactions
         contemplated hereby and thereby;  and (d) that there are no proceedings
         for  the  dissolution  or  liquidation  of  Bell-Tenex   (commenced  or
         threatened); and

                  (4) A certificate  of the Secretary of  Bell-Tenex,  dated the
         Tenex Data  Acquisition  Effective  Date,  certifying  the  incumbency,
         signatures  and authority of the officers of  Bell-Tenex  authorized to
         execute,  deliver and perform the applicable Credit Documents on behalf
         of Bell-Tenex.


                                   5.01(j)-1
<PAGE>

C.       SECURITY DOCUMENTS.

                  (1) All Uniform Commercial Code financing statements and other
         documents,   instruments   and  agreements   reasonably   requested  by
         Collateral  Agent  to  perfect  the  security   interests,   liens  and
         assignments  granted to Collateral  Agent by Bell Canada and Bell-Tenex
         in connection  herewith,  appropriately  completed and duly executed by
         the appropriate parties;

                  (2) Search  certificates or similar  documentation  evidencing
         the  filing  of the  financing  statements  necessary  to  perfect  the
         security  interests  granted  to  Collateral  Agent by Bell  Canada and
         Bell-Tenex  pursuant  to the  Credit  Documents  will be  prior  to the
         financing statements of all other Persons;

                  (3)  The  certificates   representing  the  stock  pledged  to
         Collateral Agent pursuant to the Bell Canada Pledge Agreement, together
         with blank  stock  powers for each such  certificate  duly  executed by
         Borrower.

                  (4)  Such  other  documents,  instruments  and  agreements  as
         Collateral  Agent may  reasonably  request to establish and perfect the
         Liens granted to Collateral  Agent or any Bank in this  Agreement,  the
         Security Documents and the other Credit Documents.

D.       OPINIONS.

                  (1) A written opinion of Wilson,  Sonsini,  Goodrich & Rosati,
         outside  counsel to  Borrower,  dated as of the Tenex Data  Acquisition
         Effective  Date and  addressed to  Administrative  Agent and each Bank,
         covering  such legal  matters as  Administrative  Agent may  reasonably
         request  and   otherwise  in  form  and   substance   satisfactory   to
         Administrative Agent.

                  (2) Written  opinions of Blake,  Cassels & Graydon and Stewart
         McKelvey  Stirling Scales,  outside counsel to Bell-Tenex,  dated as of
         the  Tenex  Data   Acquisition   Effective   Date  and   addressed   to
         Administrative  Agent and each Bank,  covering  such  legal  matters as
         Administrative  Agent may reasonably  request and otherwise in form and
         substance satisfactory to Administrative Agent.

E.       OTHER ITEMS.

                  (1) A certificate of the President,  a Vice President or Chief
         Financial Officer of Borrower,  addressed to  Administrative  Agent and
         the Banks and dated as of the Tenex Data  Acquisition  Effective  Date,
         certifying that:

                           (a) The  representations  and warranties set forth in
                  Paragraph 4.01 are true and correct as of such date;

                           (b) No Event of Default or Default has  occurred  and
                  is continuing as of such date; and


                                   5.01(j)-2
<PAGE>

                           (c)  Each  of the  Credit  Documents  required  to be
                  delivered to  Administrative  Agent or any Bank on or prior to
                  the Tenex Data Acquisition Effective Date is in full force and
                  effect as of such date;

                  (3)   Certificates   of  insurance  in  forms   acceptable  to
         Collateral Agent,  naming Collateral Agent as additional  insured or as
         loss payee with respect to the assets of Bell-Tenex secured pursuant to
         the Bell-Tenex  Security Agreement and the Bell-Tenex Canadian Security
         Documents;

                  (4) Such other evidence as any Bank may reasonably  request to
         establish  the accuracy and  completeness  of the  representations  and
         warranties and the compliance  with the terms and conditions  contained
         in this Restated Credit Agreement and the other Credit Documents.


                                   5.01(j)-3
<PAGE>

                                  ATTACHMENT B

                        FORM OF GUARANTOR CONSENT LETTER

                                December 31, 1999

TO:      ADMINISTRATIVE AGENT,
         As Administrative Agent for the Banks
         and the Agents under the
         Restated Credit Agreement referred to below

         1.       Reference is made to the following:

                  (a) The Third Amended and Restated  Credit  Agreement dated as
         of November 12, 1998, among Borrower,  the Banks,  Administrative Agent
         and  Collateral  Agent,  as amended by that certain First  Amendment to
         Third Amended and Restated  Credit  Agreement dated as of May 13, 1999,
         that  certain  Second  Amendment to Third  Amended and Restated  Credit
         Agreement  dated as of July 21, 1999,  that certain Third  Amendment to
         Third  Amended and Restated  Credit  Agreement  dated as of October 15,
         1999 and that certain  Fourth  Amendment to Third  Amended and Restated
         Credit  Agreement  dated  as of  December  8,  1999  (as  amended,  the
         "Restated Credit Agreement");

                  (b) [The Bell Canada  Guaranty,  dated as of November 12, 1998
         (the " Bell Canada Guaranty"),] [The Bell-Tenex  Guaranty,  dated as of
         November 20, 1998 (the "Bell-Tenex  Guaranty"),]  [The Bell-Future Tech
         Guaranty, dated as of July 20, 1999 (the "Bell-Future Tech Guaranty"),]
         executed  by the  undersigned  ("Guarantor")  in favor of the Banks and
         Collateral Agent; and

                  (c) The Fifth  Amendment to Third Amended and Restated  Credit
         Agreement,  dated as of December 31, 1999,  among Borrower,  the Banks,
         Administrative  Agent and  Collateral  Agent (the " Fifth  Amendment");

         2. Guarantor  hereby  confirms that it is a wholly-owned  subsidiary of
[Bell Microproducts Inc., a California  corporation] [Bell Microproducts  Canada
Inc.,  a  California  corporation  ("Bell  Canada")  and that  Bell  Canada is a
wholly-owned subsidiary of Bell Microproducts Inc., a California corporation].

         3.  Guarantor  hereby  consents  to  the  Fifth  Amendment.   Guarantor
expressly  agrees that the Fifth  Amendment  shall in no way affect or alter the
rights, duties, or obligations of Guarantor, the Banks or Collateral Agent under
the [Bell Canada Guaranty] [Bell-Tenex Guaranty] [Bell-Future Tech Guaranty].

         4.  Pursuant  to  the  [Bell  Canada  Guaranty]  [Bell-Tenex  Guaranty]
[Bell-Future  Tech Guaranty],  Guarantor  continues to guaranty the payment when
due of, inter alia, all loans,  advances,  debts,  liabilities and  obligations,
however arising, owed by the Borrower to any Agent or any Bank of every kind and
description  now  existing  or  hereafter  arising  pursuant to the terms


                                      B-1
<PAGE>

of the Restated Credit Agreement as amended by the Fifth Amendment or any of the
other Credit Documents.

         5.  The  [Pledge]  [Security]  Agreement,  dated  as of  [November  20,
1998][July  20, 1999]  executed by Guarantor in favor of  Collateral  Agent (the
"[Pledge] [Security]  Agreement") and any other security granted to any Agent or
any of the Banks from time to time as security for the  obligations of Guarantor
under  the  [Bell  Canada  Guaranty]  [Bell-Tenex  Guaranty]  [Bell-Future  Tech
Guaranty]  remains  in full force and effect  and  unamended,  and the  security
interests, mortgages, charges, liens, assignments, transfers and pledges granted
by  Guarantor  pursuant  to the  [Pledge]  [Security]  Agreement  and such other
documents (if any) continue to extend to all debts, liabilities and obligations,
present  or future,  direct or  indirect,  absolute  or  contingent,  matured or
unmatured, at any time due or accruing due, of Guarantor to any of the Banks and
any Agent arising under,  in connection  with or pursuant to the Restated Credit
Agreement and the other Credit Documents,  as acknowledged and confirmed by this
Guarantor Consent Letter,  notwithstanding  the amendment of the Restated Credit
Agreement by the Fifth Amendment.

         6. From and after the date hereof, the term "Restated Credit Agreement"
as used in the [Bell-Canada  Guaranty] [Bell-Tenex  Guaranty]  [Bell-Future Tech
Guaranty]  shall mean the  Restated  Credit  Agreement,  as amended by the Fifth
Amendment.

         7.  Guarantor's  consent to the Fifth  Amendment shall not be construed
(i) to have been required by the terms of the [Bell Canada Guaranty] [Bell-Tenex
Guaranty]  [Bell-Future  Tech Guaranty],  any other Credit Document or any other
document,  instrument  or  agreement  relating  thereto or (ii) to  require  the
consent of Guarantor  in  connection  with any future  amendment of the Restated
Credit Agreement or any other Credit Document.


                                      B-2
<PAGE>


         IN WITNESS  WHEREOF,  Guarantor  has executed  this  Guarantor  Consent
Letter as of the day and year first written above.

                                      [BELL/MICROPRODUCTS CANADA-TENEX DATA ULC]
                                      [BELL MICROPRODUCTS CANADA INC.]
                                      [BELL MICROPRODUCTS - FUTURE TECH, INC.]


                                       By: _____________________________

                                           Name:________________________

                                           Title:_______________________







                                      B-3