EXHIBIT 4(a)


      
                            LOAN AGREEMENT


                                BETWEEN



                       KABLE NEWS COMPANY, INC.,
                        AN ILLINOIS CORPORATION

                                  AND

     AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, AS AGENT
                   AND ALL LENDERS AS DEFINED HEREIN


<PAGE>





                            TABLE OF CONTENTS



ARTICLE I    DEFINITIONS................................................1


ARTICLE II   THE CREDITS...............................................17
      2.1.   Commitment................................................17
      2.2.   Required Payments; Termination............................17
      2.3.   Ratable Loans.............................................17
      2.4.   Types of Advances.........................................17
      2.5.   Commitment Fee;  Reductions in Aggregate Revolving Loan
             Commitment................................................17
      2.6.   Minimum  Amount of Each  Advance and Maximum  Number of
             Outstanding Eurodollar Advances...........................18
      2.7.   Optional Principal Payments...............................18
      2.8.   Method of Selecting Types and Interest  Periods for New
             Advances..................................................18
      2.9.   Conversion and Continuation of Outstanding Advances.......19
      2.10.  Changes in Interest Rate, etc.............................19
      2.11.  Rates Applicable After Default............................20
      2.12.  Method of Payment.........................................20
      2.13.  Noteless Agreement; Evidence of Indebtedness..............20
      2.14.  Telephonic Notices........................................21
      2.15.  Interest Payment Dates; Interest and Fee Basis............21
      2.16.  Notification of Advances,  Interest Rates,  Prepayments
             and Commitment Reductions.................................22
      2.17.  Limitation on Outstanding Amount of Revolving Loan........22
      2.18.  Installment Loan..........................................22
      2.19.  Term Loan.................................................22
      2.20.  Lending Installations.....................................23
      2.21.  Periodic Funding by Lenders...............................23
      2.22.  Non-Receipt of Funds by the Agent.........................25


ARTICLE III  YIELD PROTECTION TAXES....................................25
      3.1.   Yield Protection..........................................25
      3.2.   Changes in Capital Adequacy Regulations...................26
      3.3.   Availability of Types of Advances.........................26
      3.4.   Funding Indemnification...................................27
      3.5.   Taxes.....................................................27
      3.6.   Lender Statements; Survival of Indemnity..................28
<PAGE>


ARTICLE IV   CONDITIONS PRECEDENT......................................29
      4.1.   Initial Advance...........................................29
      4.2.   Each Advance..............................................31


ARTICLE V    REPRESENTATIONS AND WARRANTIES............................32
      5.1.   Existence and Standing....................................32
      5.2.   Authorization and Validity................................32
      5.3.   No Conflict; Government Consent...........................32
      5.4.   Financial Statements......................................33
      5.5.   Material Adverse Change...................................33
      5.6.   Taxes.....................................................33
      5.7.   Litigation and Contingent Obligations.....................33
      5.8.   Subsidiaries..............................................34
      5.9.   ERISA.....................................................34
      5.10.  Accuracy of Information...................................34
      5.11.  Regulation U..............................................34
      5.12.  Material Agreements.......................................34
      5.13.  Compliance With Laws......................................35
      5.14.  Ownership of Properties...................................35
      5.15.  Plan Assets; Prohibited Transactions......................35
      5.16.  Environmental Matters.....................................35
      5.17.  Investment Company Act....................................35
      5.18.  Public Utility Holding Company Act........................36
      5.19.  Subordinated Indebtedness.................................36
      5.20.  Post-Retirement Benefits..................................36
      5.21.  Insurance.................................................36
      5.22.  Solvency..................................................36


ARTICLE VI   COVENANTS.................................................37
      6.1.   Financial and Other Reporting.............................37
      6.2.   Use of Proceeds...........................................39
      6.3.   Notice of Default.........................................39
      6.4.   Conduct of Business.......................................40
      6.5.   Taxes.....................................................40
      6.6.   Insurance.................................................40
      6.7.   Compliance with Laws......................................40
      6.8.   Maintenance of Properties.................................40
      6.9.   Inspection................................................40
      6.10.  Dividends.................................................41
      6.11.  Indebtedness..............................................41
      6.12.  Merger....................................................41
      6.13.  Sale of Assets............................................42
      6.14.  Investments and Acquisitions..............................42
<PAGE>

      6.15.  Liens.....................................................43
      6.16.  Capital Expenditures......................................44
      6.17.  Affiliates................................................44
      6.18.  Subordinated Indebtedness.................................44
      6.19.  Other Agreements..........................................44
      6.20.  Disposition of Indebtedness of Subsidiary or Parent.......44
      6.21.  Business Activities.......................................44
      6.22.  Availability    of   Revolving    Loan    Advances   to
             Fulfillment, Export, Canada and International.............45
      6.23.  Loans or Advances to Parent and Subsidiary................45
      6.24.  Financial Covenants.......................................45
             6.24.1.  Consolidated Current Ratio.......................45
             6.24.2.  Consolidated Cash Flow Coverage..................45
             6.24.3.  Consolidated Tangible Net Worth..................46
             6.24.4.  Ratio of Collections.............................46
             6.24.5.  Ratio of Returns.................................46
      6.25.  Lock Box..................................................46
      6.26.  Year 2000.................................................47


ARTICLE VII  DEFAULTS................................  ................47


ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES............50
      8.1.   Acceleration..............................................50
      8.2.   Amendments................................................50
      8.3.   Preservation of Rights....................................51


ARTICLE IX   GENERAL PROVISIONS........................................51
      9.1.   Survival of Representations...............................51
      9.2.   Governmental Regulation...................................51
      9.3.   Headings..................................................52
      9.4.   Entire Agreement..........................................52
      9.5.   Several Obligations; Benefits of this Agreement...........52
      9.6.   Expenses; Indemnification.................................52
      9.7.   Numbers of Documents......................................53
      9.8.   Accounting................................................53
      9.9.   Severability of Provisions................................53
      9.10.  Nonliability of Lenders...................................53
      9.11.  Confidentiality...........................................53
      9.12.  Nonreliance...............................................54

<PAGE>


ARTICLE X    THE AGENT.................................................54
      10.1.  Appointment; Nature of Relationship.......................54
      10.2.  Powers....................................................54
      10.3.  General Immunity..........................................55
      10.4.  No Responsibility for Loans, Recitals, etc................55
      10.5.  Action on Instructions of Lenders.........................55
      10.6.  Employment of Agents and Counsel..........................55
      10.7.  Reliance on Documents; Counsel............................56
      10.8.  Agent's Reimbursement and Indemnification.................56
      10.9.  Notice of Default.........................................56
      10.10. Rights as a Lender........................................57
      10.11. Lender Credit Decision....................................57
      10.12. Successor Agent...........................................57
      10.13. Agent's Fee...............................................58
      10.14. Delegation to Affiliates..................................58
      10.15. Execution of Collateral Documents.........................58
      10.16. Collateral Releases.......................................58


ARTICLE XI   SETOFF; RATABLE PAYMENTS..................................59
      11.1.  Setoff....................................................59
      11.2.  Ratable Payments..........................................59


ARTICLE XII  BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........59
      12.1.  Successors and Assigns....................................59
      12.2.  Participations............................................60
             12.2.1  Permitted Participants; Effect....................60
             12.2.2.  Voting Rights....................................60
             12.2.3.  Benefit of Setoff................................60
      12.3.  Assignments...............................................61
             12.3.1.  Permitted Assignments............................61
             12.3.2.  Effect; Effective Date...........................61
      12.4.  Dissemination of Information..............................62
      12.5.  Tax Treatment.............................................62


ARTICLE XIII NOTICES...................................................62
      13.1.  Notices...................................................62
      13.2.  Change of Address.........................................63
<PAGE>


ARTICLE XIV  COUNTERPARTS..............................................63


ARTICLE XV   CHOICE OF LAW;  CONSENT  TO  JURISDICTION;  WAIVER OF
             JURY TRIAL................................................63
      15.1.  CHOICE OF LAW.............................................63
      15.2.  CONSENT TO JURISDICTION...................................63
      15.3.  WAIVER OF JURY TRIAL......................................64


EXHIBIT A    FORM OF OPINION...........................................69


EXHIBIT B    COMPLIANCE CERTIFICATE....................................70


EXHIBIT C    ASSIGNMENT AGREEMENT......................................74


EXHIBIT D    LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION............86


EXHIBIT E-1, E-2 & E-3    NOTES........................................87


EXHIBIT F    CERTIFICATE OF BORROWER RE: ANNUAL FINANCIAL
             STATEMENTS................................................88


EXHIBIT G    MONTHLY COMPLIANCE CERTIFICATE............................89


EXHIBIT H    MONTHLY   COLLATERAL   REPORT   ACCOUNTS   RECEIVABLE
             COLLATERAL................................................90


EXHIBIT I    ACTUAL COLLECTIONS AND ESTIMATED NET BILLING REPORT.......91


SCHEDULE 1   SUBSIDIARIES AND OTHER INVESTMENTS........................92


SCHEDULE 2   INDEBTEDNESS AND LIENS....................................93


SCHEDULE 3   PERMITTED  AFFILIATES  IN  CONNECTION  WITH  ELIGIBLE
             ACCOUNTS..................................................94

<PAGE>

                           LOAN AGREEMENT

      This  Agreement,  dated as of September  15, 1998, is among KABLE
NEWS COMPANY,  INC., an Illinois corporation,  as Borrower, the Lenders
and  AMERICAN  NATIONAL  BANK AND TRUST  COMPANY OF CHICAGO,  as Agent.
The parties hereto agree as follows:

                              ARTICLE I

                             DEFINITIONS

      As used in this Agreement:

      "Account" as defined in the U.C.C.

      "Account Debtor" as defined in the U.C.C.

      "Acquisition"  means any  transaction,  or any  series of related
transactions,  consummated on or after the date of this  Agreement,  by
which the  Borrower or any of its  Subsidiaries  (i) acquires any going
business  or  all or  substantially  all of  the  assets  of any  firm,
corporation  or  limited  liability   company,   or  division  thereof,
whether  through  purchase  of  assets,  merger  or  otherwise  or (ii)
directly or  indirectly  acquires  (in one  transaction  or as the most
recent  transaction  in a series of  transactions)  at least a majority
(in  number of votes) of the  securities  of a  corporation  which have
ordinary  voting  power  for the  election  of  directors  (other  than
securities  having  such  power  only by reason of the  happening  of a
contingency)  or a  majority  (by  percentage  or voting  power) of the
outstanding   ownership   interests   of  a   partnership   or  limited
liability company.

      "Actual  Collections and Estimated Net Billing Report" is defined
in Section 6.1 (xi).

      "Advance"   means  a  borrowing   hereunder  (or   conversion  or
continuation  thereof)  consisting  of  the  aggregate  amount  of  the
several  Loans made on the same  Borrowing  Date (or date of conversion
or  continuation)  by the Lenders to the Borrower of the same Type and,
in the case of Eurodollar Advances, for the same Interest Period.

      "Affiliate"  of any Person  means any other  Person  directly  or
indirectly  controlling,  controlled  by or under  common  control with
such  Person.  A Person  shall be deemed to control  another  Person if
the  controlling  Person  owns  10% or  more  of any  class  of  voting
securities (or other ownership  interests) of the controlled  Person or
possesses,  directly  or  indirectly,  the power to direct or cause the
direction  of the  management  or  policies of the  controlled  Person,
whether through ownership of stock, by contract or otherwise.

      "Agent"  means  American  National  Bank  and  Trust  Company  of
Chicago in its capacity as  contractual  representative  of the Lenders
pursuant  to  Article  X,  and  not in  its  individual  capacity  as a
Lender, and any successor Agent appointed pursuant to Article X.
<PAGE>

      "Aggregate  Commitment" means the aggregate of the Commitments of
all the  Lenders,  as reduced  from time to time  pursuant to the terms
hereof.

      "Agreement"  means this Loan  Agreement,  as it may be amended or
modified and in effect from time to time.

      "Agreement   Accounting   Principles"  means  generally  accepted
accounting  principles  as in effect  from time to time,  applied  in a
manner   consistent   with  that  used  in  preparing   the   financial
statements referred to in Section 5.4.

      "American"  means  American  National  Bank and Trust  Company of
Chicago.

      "Applicable  Fee Rate" means,  at any time, the  percentage  rate
per annum at which  Commitment  Fees are accruing on the unused portion
of the Revolving  Loan  Commitment at such time as set forth in Section
2.5.

      "Applicable  Margin" means,  with respect to Advances relating to
the Revolving  Loan of any Type at any time,  the  percentage  rate per
annum  which is  applicable  at such time with  respect to  Advances of
such Type as set forth in the Pricing Schedule.

      "Article"  means an  article  of this  Agreement  unless  another
document is specifically referenced.

      "Authorized  Officer"  means  Daniel  Friedman,  Chairman  of the
Board,  President and Chief Executive  Officer,  Bruce  Obendorf,  Vice
President,  Director  of Finance  or David E.  Bakener,  Treasurer  and
Controller of the Borrower, acting singly.

      "Borrower"   means  Kable  News   Company,   Inc.,   an  Illinois
corporation, and its successors and assigns.

      "Borrower   Entities"   means   collectively   Borrower,   Export
Fulfillment, Canada and International.

      "Borrowing  Date"  means  a date  on  which  an  Advance  is made
hereunder.

      "Borrowing Notice" is defined in Section 2.8.

      "Business Day" means (i) with respect to any  borrowing,  payment
or  rate  selection  of  Eurodollar  Advances,  a  day  (other  than  a
Saturday  or Sunday) on which banks  generally  are open in Chicago and
New York  for the  conduct  of  substantially  all of their  commercial
lending  activities  and on which dealings in United States dollars are
carried  on in the  London  interbank  market  and (ii)  for all  other
purposes,  a day  (other  than a Saturday  or  Sunday)  on which  banks
generally are open in Chicago for the conduct of  substantially  all of
their commercial lending activities.

      "Canada"  means  Kable News  Company of Canada  LTD,  an Ontario,
Canada corporation.
<PAGE>

      "Canada   Security   Agreement"   means  that  certain   Security
Agreement  dated  September 15,  1998  executed  by  Canada in favor of
Agent for the ratable  benefit of the Lenders,  as it may be amended or
modified and in effect from time to time.

      "Capital   Expenditures"   means,   without   duplication,    any
expenditures  for any purchase or other  acquisition of any asset which
would be  classified  as a fixed  or  capital  asset on a  consolidated
balance  sheet  of  the  Borrower  and  its  Subsidiaries  prepared  in
accordance   with  Agreement   Accounting   Principles   excluding  (i)
expenditures  of  insurance  proceeds  to rebuild or replace  any asset
after a casualty loss and (ii) leasehold  improvement  expenditures for
which the  Borrower  or a  Subsidiary  is  reimbursed  promptly  by the
lessor.

      "Capitalized  Lease" of a Person  means any lease of  Property by
such Person as lessee  which would be  capitalized  on a balance  sheet
of  such  Person  prepared  in  accordance  with  Agreement  Accounting
Principles.

      "Capitalized  Lease  Obligations" of a Person means the amount of
the  obligations  of such Person under  Capitalized  Leases which would
be shown as a liability on a balance  sheet of such Person  prepared in
accordance with Agreement Accounting Principles.

      "Cash Collateral Account" is defined in Section 6.25.

      "Cash Equivalent  Investments"  means (i) short-term  obligations
of,  or fully  guaranteed  by,  the  United  States  of  America,  (ii)
commercial  paper  rated  A-1 or  better  by S&P  or P-1 or  better  by
Moody's,  (iii)  demand  deposit  accounts  maintained  in the ordinary
course of  business,  and (iv)  certificates  of deposit  issued by and
time  deposits  with  commercial  banks  (whether  domestic or foreign)
having  capital  and  surplus in excess of  $100,000,000;  provided  in
each case that the same  provides  for  payment of both  principal  and
interest  (and  not  principal  alone  or  interest  alone)  and is not
subject  to any  contingency  regarding  the  payment of  principal  or
interest.

      "Change in Control"  means (i) Parent  shall  cease to own,  free
and clear of all  Liens or other  encumbrances,  at least  one  hundred
percent  (100%)  of the  outstanding  shares  of  voting  stock  of the
Borrower  on a fully  diluted  basis and (ii)  Borrower  shall cease to
own,  free and clear of all Liens or other  encumbrances,  at least one
hundred  percent  (100%) of the  outstanding  shares of voting stock of
Export, Canada, International and Fulfillment.

      "Code"  means the  Internal  Revenue  Code of 1986,  as  amended,
reformed or otherwise modified from time to time.

      "Collateral  Documents" means,  collectively,  the Kable Security
Agreement,  Fulfillment Security Agreement,  Export Security Agreement,
Canada  Security  Agreement,   International  Security  Agreement,  the
Trademark Security Agreement and the Stock Pledge Agreement.

      "Commitment"  means,  for each  Lender,  the  obligation  of such
Lender to make Loans not  exceeding  the amount set forth  opposite its
signature  below or as set forth in any Notice of  Assignment  relating
<PAGE>

to any  assignment  that  has  become  effective  pursuant  to  Section
12.3.2,  as such amount may be modified  from time to time  pursuant to
the terms hereof.

      "Compliance Certificate" is defined in Section 6.1 (ix).

      "Consolidated  Capital Expenditures" means, with reference to any
period,  the Capital  Expenditures of the Borrower and its Subsidiaries
calculated on a consolidated basis for such period.

      "Consolidated   Current  Assets"  means  all  current  assets  of
Borrower and its  Subsidiaries  calculated on a  consolidated  basis in
accordance with Agreement  Accounting  Principles  excluding,  however,
all  intangible  assets  (including,  but not limited to,  goodwill and
intellectual  property  rights  such  as  copyright)  and  specifically
including  cash  items  in any bank or  trust  company  (on hand and in
transit);  customers'  Accounts,  bills and notes receivable (less such
reserves  as may  be  required  by  Agreement  Accounting  Principles);
merchandise   inventories   and   inventories   of  raw  materials  and
supplies,  of working  materials  in process and of  finished  products
(valued at not in excess of the cost or current  market value  thereof,
whichever  is  less);  readily  marketable  securities  (each  maturing
within  one year from the date of  determination  and taken at nor more
than cost or  current  market  value,  whichever  is  lower);  and such
other  tangible  assets as, in  accordance  with  Agreement  Accounting
Principles,  would be included in current  assets,  all after deduction
of appropriate  reserves;  provided,  however that in computing Current
Assets  there  shall be  excluded:  1) any  notes  receivable  from the
Parent;  and 2) any assets which are assigned,  pledged or deposited as
security  for or for the  purpose of paying any  Indebtedness  which is
not included in current liabilities.

      "Consolidated  Cash Flow"  means  Consolidated  Net Income  after
taxes for any period plus the aggregate  amount of the  Borrower's  and
its Subsidiary's  depreciation,  amortization (excluding capitalization
of  internal  expenses  over  twelve  (12)  months or less),  taxes and
Consolidated Interest Expense for said period.

      "Consolidated  Cash  Flow  Coverage  Ratio"  means  the  ratio of
Consolidated Cash Flow to Consolidated Debt Service.

      "Consolidated  Current  Liabilities"  means all  Indebtedness  of
Borrower  and  its  Subsidiaries  calculated  on a  consolidated  basis
payable on demand or  maturing  not more than one year from the date as
of which current  liabilities  are to be determined,  final  maturities
and prepayments of Indebtedness  and sinking fund payments  required to
be made in respect of any  Indebtedness  within one (1) year after said
date,  and all other  items  (including  taxes  accrued  as  estimated)
which in  accordance  with  Agreement  Accounting  Principles  would be
included  as  current  liabilities.  The  amount  owing to the  Lenders
under the Revolving Loan shall be deemed a "Current Liability".

      "Consolidated  Current  Ratio"  means the  ratio of  Consolidated
Current Assets to Consolidated Current Liabilities.
<PAGE>

      "Consolidated  Debt  Service"  means  the  Consolidated  Interest
Expense  for any  period  plus the  aggregate  principal  amount of all
Indebtedness  for  borrowed  money  of  Borrower  and its  Subsidiaries
payable or becoming due during said period.

      "Consolidated  Indebtedness"  means at any time the  Indebtedness
of the  Borrower  and its  Subsidiaries  calculated  on a  consolidated
basis as of such time.

      "Consolidated  Interest  Expense"  means,  with  reference to any
period,  the  interest  expense of the  Borrower  and its  Subsidiaries
calculated on a consolidated basis for such period.

      "Consolidated  Net Income"  means,  with reference to any period,
the  net  income  (or  loss)  of  the  Borrower  and  its  Subsidiaries
calculated on a consolidated basis for such period.

      "Consolidated   Tangible   Net  Worth"  means  at  any  date  the
consolidated   stockholders'   equity   of   the   Borrower   and   its
Subsidiaries   determined  in  accordance  with  Agreement   Accounting
Principles,  less their consolidated  Intangible Assets, all determined
as of such date. For purposes of this  definition  "Intangible  Assets"
means  the  amount  (to  the  extent   reflected  in  determining  such
consolidated  stockholders'  equity) of (i) all  write-ups  (other than
write-ups  resulting from foreign  currency  translations and write-ups
of assets of a going  concern  business made within twelve months after
the  acquisition of such business)  subsequent to April 30, 1998 in the
book value of any asset  owned by Borrower  or a  Subsidiary,  (ii) all
investments in unconsolidated  Subsidiaries and all equity  investments
in  Persons  which are not  Subsidiaries,  (iii) all  unamortized  debt
discount  and  expense,   unamortized   deferred   charges,   goodwill,
patents,   trademarks,   service   marks,   trade  names,   copyrights,
organization  or  developmental  expenses and other  intangible  items,
(iv) amounts due from  Parent,  (v) amounts due from  Affiliates,  (vi)
all inter-company  assets,  (vii) amounts due from officers,  directors
or   employees,   (viii)   all   unamortized   acquisition   costs  and
unamortized  signing  bonuses,  (ix) all prepaid  expenses  (other than
income  taxes),  and (x) any  other  intangible  assets as  defined  in
accordance with the Agreement Accounting Principles.

      "Consolidated  Rentals" means, with reference to any period,  the
Rentals  of  the  Borrower  and  its   Subsidiaries   calculated  on  a
consolidated basis for such period.

      "Contingent   Obligation"   of  a  Person  means  any  agreement,
undertaking or arrangement  by which such Person  assumes,  guarantees,
endorses,  contingently  agrees to  purchase  or provide  funds for the
payment of, or otherwise  becomes or is  contingently  liable upon, the
obligation  or  liability  of any other  Person,  or agrees to maintain
the net worth or working  capital or other  financial  condition of any
other  Person,  or otherwise  assures any creditor of such other Person
against  loss,  including,  without  limitation,  any  comfort  letter,
operating agreement or take-or-pay contract.

      "Conversion/Continuation Notice" is defined in Section 2.9.

      "Controlled  Group"  means all members of a  controlled  group of
corporations  or other  business  entities and all trades or businesses
(whether or not  incorporated)  under common  control  which,  together

<PAGE>



with the Borrower or any of its  Subsidiaries,  are treated as a single
employer under Section 414 of the Code.

      "Corporate  Base  Rate"  means  a rate  per  annum  equal  to the
corporate  base rate of interest  announced  by  American  from time to
time, changing when and as said corporate base rate changes.

      "Default" means an event described in Article VII.

      "Eligible  Accounts" means an Account (including credits due from
publishers  to any  Borrowing  Entity  as  set  forth  under  Item 7 of
Exhibit H attached  hereto)  owing by a Person to each of the  Borrower
Entities  which meets the following  requirements  at the time it comes
into  existence  and  continues  to meet the same until it is collected
in full:

           (a)  it is genuine and in all  respects  what it purports to
      be;

           (b)  it is created in the ordinary  course of each  Borrower
      Entity's  business  and  arises  from:  (a)  the  performance  of
      services  by each  Borrower  Entity and such  services  have been
      fully  performed,   acknowledged  and  accepted  by  the  Account
      Debtor;  or (b) the  sale or  lease  of  goods  by each  Borrower
      Entity,   including  C.O.D.  sales,  and  such  goods  have  been
      completed in accordance with Account Debtor's  specifications (if
      any) and  delivered  to and accepted by the Account  Debtor,  and
      each  Borrower  Entity has  possession  of, or has  delivered  to
      Lender  at  Lender's  request,  shipping  and  delivery  receipts
      evidencing such shipment;

           (c)  in  the  case  of  all  Fulfillment   Services,  it  is
      evidenced   by  an  invoice   rendered  to  the  Account   Debtor
      thereunder and is due and payable no later than  forty-five  (45)
      days after the date of the  invoice  and is not more than  ninety
      (90) days past due,  and in the case of all  Newsstand  Services,
      it is evidenced by an invoice to the Account  Debtor  (except for
      estimated  net  billings  added  to the net  account  receivables
      shown  on the  Monthly  Collateral  Report  pursuant  to  Section
      6.1(xi))  thereunder  and is not unpaid for more than one hundred
      twenty (120) days from the date of the invoice;

           (d)  it is  owned by each  Borrower  Entity,  said  Borrower
      Entity  has the right to subject  it to a  security  interest  in
      favor of Agent for the ratable benefit of all Lenders,  and it is
      subject to a first priority  perfected security interest in favor
      of Agent for the ratable benefit of all Lenders,  and to no other
      claims,  Liens  security  interests or  encumbrances  whatsoever,
      other than Permitted Liens;

           (e)  it is a valid,  legally  enforceable and  unconditional
      obligation of the Account Debtor  thereunder,  and is not subject
      to setoff,  counterclaim,  credit, allowance or adjustment by the
      Account Debtor  thereunder  (except as recognized  under the last
      sentence  of this  definition  of Eligible  Accounts),  or to any
      claim by such Account  Debtor  denying  liability  thereunder  in
      whole or in part,  and such  Account  Debtor  has not  refused to
      accept  and/or has not  returned  or offered to return any of the
      goods or services which are the subject of such Account;

           (f)  to the knowledge of any Borrowing Entity,  there are no
      proceedings  or  actions  which are then  threatened  or  pending
      against the Account  Debtor  which might  result in any  material
      adverse  change in its  financial  condition or in its ability to
      pay any Account in full;
<PAGE>

           (g)  it does not arise out of a contract or order which,  by
      its terms,  forbids or makes void or unenforceable the assignment
      by each  Borrower  Entity to Agent of the  Account  arising  with
      respect thereto;

           (h)  the  Account   Debtor  is  not  a  director,   officer,
      employee,  agent,  Subsidiary,  Parent or  Affiliate  (except for
      those  Affiliates  listed  in  Schedule  3  attached  hereto)  of
      Parent, Borrower or any of Borrower's Subsidiaries;

           (i)  the  Account  Debtor is a resident or citizen of and is
      located within the United States of America,  except for Accounts
      due and  owing to  Export  or  Canada  which may be due and owing
      from Account Debtors located in Canada;

           (j)  it is not an Account  with respect to which the Account
      Debtor is the United States of America or any department,  agency
      or  instrumentality  thereof,  unless the  Borrower  assigns  its
      right to payment of such  Account  to Agent  pursuant  to, and in
      full  compliance  with,  the Assignment of Claims Act of 1940, as
      amended;

           (k)  it is not an Account  with respect to which the Account
      Debtor is any state,  municipality or any  department,  agency or
      instrumentality  thereof,  unless the Borrower Entity assigns its
      rights to payment of such  Account to Agent  pursuant  to, and in
      full compliance with all applicable  laws,  rules and regulations
      relating thereto;

           (l)  it is not an Account  with respect to which the Account
      Debtor is located in a state which requires the Borrower  Entity,
      as a  precondition  to commencing or maintaining an action in the
      courts of that state,  either to  (A) receive  a  certificate  of
      authority to do business  and be in good  standing in such state,
      or (B) file a notice of  business  activities  report or  similar
      report  with  such  state's  taxing  authority,  unless  (x)  the
      Borrower  Entity  has  taken  one of  the  actions  described  in
      clauses  (A) or (B),  (y) the  failure to take one of the actions
      described in either clause (A) or (B) may be cured  retroactively
      by the  Borrower  Entity  at its  election,  or (z) the  Borrower
      Entity has  proven,  to Agent's  satisfaction,  that it is exempt
      from any such requirements under any such state's laws; and

           (m)  it is not an Account which,  when added to a particular
      Account  Debtor's  other  indebtedness  to each  Borrower  Entity
      results in all  accounts  in the  aggregate  from the  particular
      Account Debtor  exceeding fifty (50%) percent of all Accounts due
      to the applicable Borrower Entity.

      An Account  which is at any time an Eligible  Account,  but which
      subsequently  fails  to meet any of the  foregoing  requirements,
      shall forthwith cease to be an Eligible  Account.  Further,  with
      respect to any Account,  if Agent at any time or times  hereafter
      determines,  in  its  sole  and  absolute  discretion,  that  the
      prospect of payment or  performance  by the Account  Debtor is or
      will  be  impaired,  notwithstanding  anything  to  the  contrary
      contained  above,  such  Account  shall no longer be an  Eligible
      Account.  In  addition,  if at any time  more  than  ten  percent
      (10%) of the amount of all  Accounts  owing from any one  Account
      Debtor of any  Borrowing  Entity remain unpaid beyond ninety (90)
      days from the due date of said  invoices in  connection  with any
<PAGE>

      Fulfillment  Services or remain unpaid beyond one hundred  twenty
      (120) days from the date of said invoices in connection  with any
      Newsstand  Services,  then all Accounts  relating to said Account
      Debtor  shall  be  considered  to  be  Ineligible  Accounts.   In
      addition,  in connection with all Accounts  relating to Newsstand
      Services to reflect that the Account  Debtor,  in connection with
      same,  has the right to return and does return a large  volume of
      magazines for which each Borrowing  Entity has rendered  invoices
      in  connection  therewith  there shall be deducted  from Eligible
      Accounts an amount  reasonably  determined by Borrower to reflect
      this future reduction in Eligible Accounts.

      "Environmental Laws" means any and all federal,  state, local and
foreign statutes,  laws, judicial decisions,  regulations,  ordinances,
rules,  judgments,   orders,  decrees,  plans,  injunctions,   permits,
concessions,   grants,  franchises,   licenses,  agreements  and  other
governmental  restrictions  relating  to  (i)  the  protection  of  the
environment,  (ii) the  effect  of the  environment  on  human  health,
(iii)  emissions,  discharges or releases of pollutants,  contaminants,
hazardous  substances  or wastes into  surface  water,  ground water or
land,  or  (iv)  the  manufacture,   processing,   distribution,   use,
treatment,  storage,  disposal,  transport  or handling of  pollutants,
contaminants,  hazardous  substances or wastes or the clean-up or other
remediation thereof.

      "ERISA"  means the  Employee  Retirement  Income  Security Act of
1974, as amended from time to time,  and any rule or regulation  issued
thereunder.

      "Eurodollar  Advance"  means an Advance  which bears  interest at
the applicable Eurodollar Rate.

      "Eurodollar  Base  Rate"  means,  with  respect  to a  Eurodollar
Advance  for  the  relevant  Interest  Period,  the  applicable  London
interbank  offered rate for deposits in U.S.  dollars  appearing on Dow
Jones Markets  (Telerate) Page 3750 as of 11:00 a.m.  (London time) two
Business  Days  prior to the first  day of such  Interest  Period,  and
having a maturity  approximately  equal to such Interest Period.  If no
London  interbank  offered  rate of such  maturity  then appears on Dow
Jones  Markets  (Telerate)  Page 3750,  then the  Eurodollar  Base Rate
shall be equal to the London  interbank  offered  rate for  deposits in
U.S.  dollars  maturing  immediately  before or immediately  after such
maturity,  whichever  is higher,  as  determined  by the Agent from Dow
Jones Markets  (Telerate)  Page 3750.  If Dow Jones Markets  (Telerate)
Page 3750 is not  available,  the applicable  Eurodollar  Base Rate for
the  relevant  Interest  Period  shall  be the rate  determined  by the
Agent to be the rate at which  American  offers  to place  deposits  in
U.S. dollars with  first-class  banks in the London interbank market at
approximately  11:00 a.m.  (London time) two Business Days prior to the
first  day of  such  Interest  Period,  in the  approximate  amount  of
American's  relevant  portion of the  Eurodollar  Advance  and having a
maturity approximately equal to such Interest Period.

      "Eurodollar  Loan"  means  a Loan  which  bears  interest  at the
applicable Eurodollar Rate.

      "Eurodollar  Rate" means,  with  respect to a Eurodollar  Advance
for the relevant  Interest  Period,  the sum of (i) the quotient of (a)
the Eurodollar  Base Rate applicable to such Interest  Period,  divided
by (b) one minus  the  Reserve  Requirement  (expressed  as a  decimal)
applicable to such Interest  Period,  plus the Applicable  Margin.  The
Eurodollar  Rate shall be rounded to the next  higher  multiple of 1/16
of 1% if the rate is not such a multiple.
<PAGE>

      "Excluded  Taxes" means, in the case of each Lender or applicable
Lending  Installation  and the Agent,  taxes imposed on its overall net
income,  and  franchise  taxes  imposed on it, by (i) the  jurisdiction
under the laws of which  such  Lender or the Agent is  incorporated  or
organized  or (ii)  the  jurisdiction  in  which  the  Agent's  or such
Lender's  principal   executive  office  or  such  Lender's  applicable
Lending Installation is located.

      "Exhibit" refers to an exhibit to this Agreement,  unless another
document is specifically referenced.

      "Export" means Kable News Export, Ltd., a Delaware corporation.

      "Export   Security   Agreement"   means  that  certain   Security
Agreement  dated  September 15,  1998  executed  by  Export in favor of
Agent,  for the ratable  benefit of the  Lenders,  as it may be amended
or modified and in effect from time to time.

      "Facility  Termination  Date"  means  September  15,  2001 or any
earlier date on which the  Aggregate  Commitment  is reduced to zero or
otherwise terminated pursuant to the terms hereof.

      "Federal Funds  Effective  Rate" means,  for any day, an interest
rate  per  annum  equal  to  the  weighted  average  of  the  rates  on
overnight  Federal  funds  transactions  with  members  of the  Federal
Reserve  System  arranged  by Federal  funds  brokers  on such day,  as
published  for such day (or,  if such day is not a  Business  Day,  for
the  immediately  preceding  Business Day) by the Federal  Reserve Bank
of New York,  or, if such  rate is not so  published  for any day which
is a Business  Day,  the  average of the  quotations  at  approximately
10:00 a.m.  (Chicago  time) on such day on such  transactions  received
by the Agent from three Federal  funds  brokers of recognized  standing
selected by the Agent in its sole discretion.

      "Financial  Contract" of a Person  means (i) any  exchange-traded
or  over-the-counter  futures,  forward,  swap or  option  contract  or
other  financial  instrument  with  similar  characteristics,  (ii) any
agreements,  devices or arrangements  providing for payments related to
fluctuations  of  interest  rates,  exchange  rates or  forward  rates,
including,  but not  limited to,  interest  rate  exchange  agreements,
forward  currency  exchange  agreements,  interest  rate cap or  collar
protection agreements, forward rate currency or interest rate options.

      "Floating  Rate"  means,  for any day, a rate per annum  equal to
(i) the  Corporate  Base  Rate for such  day plus  (ii) the  Applicable
Margin,  in each  case  changing  when and as the  Corporate  Base Rate
changes.

      "Floating  Rate Advance" means an Advance which bears interest at
the Floating Rate.

      "Floating  Rate Loan"  means a Loan which  bears  interest at the
Floating Rate.

      "Fulfillment"  means Kable Fulfillment  Services of Ohio, Inc., a
Delaware corporation.
<PAGE>

      "Fulfillment  Security  Agreement"  means that  certain  Security
Agreement  dated  September 15, 1998 executed by  Fulfillment  in favor
of  Agent,  for  the  ratable  benefit  of  the  Lenders,  as it may be
amended or modified and in effect from time to time.

      "Fulfillment  Services"  means  all  services  performed  by  any
Borrowing  Entity for any of its customers  relating to product,  order
and  subscription   processing  and  fulfillment;   customer   service;
telemarketing and related services.

      "Guarantors"  means the Parent  and  Subsidiary  Guarantors,  and
their successors and assigns.

      "Guaranty"  means that certain Guaranty dated as of September 15,
1998  executed  by the  Parent in favor of the Agent,  for the  ratable
benefit  of the  Lenders,  as it  may be  amended  or  modified  and in
effect from time to time.

      "Indebtedness"  of a Person means such  Person's (i)  obligations
for  borrowed  money,   (ii)  obligations   representing  the  deferred
purchase  price of Property or services  (other than  accounts  payable
arising in the ordinary  course of such  Person's  business  payable on
terms  customary  in the  trade),  (iii)  obligations,  whether  or not
assumed,   secured  by  Liens  or  payable  out  of  the   proceeds  or
production  from  property now or  hereafter  owned or acquired by such
Person,  (iv)  obligations  which are evidenced by notes,  acceptances,
or  other  instruments,  (v) obligations  of such  Person  to  purchase
securities or other property  arising out of or in connection  with the
sale of the  same or  substantially  similar  securities  or  property,
(vi) Capitalized  Lease  Obligations,  (vii)  obligations in connection
with the  issuance  of  Letters  of  Credit,  (viii)  obligations  of a
Person in  connection  with  Financial  Contracts;  (ix)  Rate  Hedging
Obligations;  and (x) any other  obligation for borrowed money or other
financial  accommodation which in accordance with Agreement  Accounting
Principles  would be shown as a liability on the  consolidated  balance
sheet of such Person.

      "Interest Period" means, with respect to a Eurodollar  Advance, a
period of one,  two,  three or six months  commencing on a Business Day
selected by the  Borrower  pursuant to this  Agreement.  Such  Interest
Period  shall  end on the day  which  corresponds  numerically  to such
date one,  two,  three or six  months  thereafter,  provided,  however,
that if there is no such  numerically  corresponding  day in such next,
second,  third or sixth  succeeding  month,  such Interest Period shall
end on the  last  Business  Day of such  next,  second,  third or sixth
succeeding  month.  If an Interest  Period would otherwise end on a day
which is not a Business  Day,  such  Interest  Period  shall end on the
next  succeeding  Business Day,  provided,  however,  that if said next
succeeding  Business Day falls in a new calendar  month,  such Interest
Period shall end on the immediately preceding Business Day.

      "Installment Loan" as defined in Section 2.18.

      "International" means Kable News International,  Inc., a Delaware
corporation.

      "International  Security  Agreement"  means that certain Security
Agreement dated September 15, 1998 executed by  International  in favor
of Agent for the ratable  benefit of the Lenders,  as it may be amended
and modified, and in effect from time to time.
<PAGE>

      "Investment"  of a Person  means any loan,  advance  (other  than
commission,  travel and  similar  advances to  officers  and  employees
made in the ordinary  course of  business),  extension of credit (other
than  accounts  receivable  arising in the ordinary  course of business
on terms  customary  in the trade) or  contribution  of capital by such
Person;  stocks,  bonds, mutual funds,  partnership  interests,  notes,
debentures  or other  securities  owned  by such  Person;  any  deposit
accounts  and  certificate  of  deposit  owned  by  such  Person;   and
structured notes,  derivative  financial  instruments and other similar
instruments or contracts owned by  such Person.

      "Kable Security  Agreement" means that certain Security Agreement
dated  September 15,  1998 executed by Borrower in favor of Agent,  for
the ratable  benefit of the Lenders,  as it may be amended and modified
and in effect from time to time.

      "Lenders" means the lending  institutions listed on the signature
pages of this Agreement and their respective successors and assigns.

      "Lending  Installation"  means,  with  respect to a Lender or the
Agent,  the office,  branch,  subsidiary or affiliate of such Lender or
the Agent  listed on the  signature  pages  hereof or on a Schedule  or
otherwise  selected  by such  Lender or the Agent  pursuant  to Section
3.6.

      "Letter  of  Credit"  of a Person  means a letter  of  credit  or
similar  instrument  which  is  issued  upon  the  application  of such
Person  or upon  which  such  Person is an  account  party or for which
such Person is in any way liable.

      "Lien" means any lien  (statutory  or other),  mortgage,  pledge,
hypothecation,   assignment,   deposit   arrangement,   encumbrance  or
preference,  priority  or  other  security  agreement  or  preferential
arrangement  of any  kind  or  nature  whatsoever  (including,  without
limitation,  the interest of a vendor or lessor  under any  conditional
sale, Capitalized Lease or other title retention agreement).

      "Loan" means,  with respect to a Lender,  such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).

      "Loan  Documents"  means  this  Agreement  and any  Notes  issued
pursuant to Section 2.13,  the Collateral  Documents,  the Stock Pledge
Agreement, the Subsidiary Guaranties and the Guaranty.

      "Material  Adverse Effect" means a material adverse effect on (i)
the business,  Property,  condition  (financial or otherwise),  results
of  operations,  or  prospects  of the  Borrower  and its  Subsidiaries
taken as a whole,  (ii) the ability of the  Borrower,  Parent,  Canada,
International,  Export and  Fulfillment  to perform  their  obligations
under  the Loan  Documents  to which  they  are a party,  or (iii)  the
validity or  enforceability  of any of the Loan Documents or the rights
or remedies of the Agent or the Lenders thereunder.

      "Material Indebtedness" is defined in Section 7.5.
<PAGE>

      "Monthly Collateral Report" is defined in Section 6.1(x).

      "Multiemployer  Plan"  means  a  Plan  maintained  pursuant  to a
collective  bargaining  agreement or any other arrangement to which the
Borrower  or any  member  of the  Controlled  Group is a party to which
more than one employer is obligated  to make  contributions  other than
a Single Employer Plan.

      "Net  Mark-to-Market  Exposure" of a Person means, as of any date
of  determination,  the excess (if any) of all  unrealized  losses over
all  unrealized  profits  of such  Person  arising  from  Rate  Hedging
Agreements.  "Unrealized  losses"  means the fair  market  value of the
cost to such Person of  replacing  such Rate  Hedging  Agreement  as of
the date of  determination  (assuming the Rate Hedging  Agreement  were
to be terminated as of that date),  and "unrealized  profits" means the
fair  market  value of the gain to such Person of  replacing  such Rate
Hedging  Agreement as of the date of determination  (assuming such Rate
Hedging Agreement were to be terminated as of that date).

      "Newsstand   Services"  means  all  services   performed  by  any
Borrowing  Entity for any of its customers  relating to the single copy
distribution  of paperbacks,  magazines and related  products on behalf
of said customers.

      "Non-U.S. Lender" is defined in Section 3.5(iv).

      "Note"  means any  promissory  note  issued at the  request  of a
Lender  pursuant  to Section  2.13 in the form of Exhibit  E-1,  E-2 or
E-3.

      "Notice of Assignment" is defined in Section 12.3.2.

      "Obligations"  means all  unpaid  principal  of and  accrued  and
unpaid  interest  on the Loans,  all  accrued  and unpaid  fees and all
expenses,  reimbursements,  indemnities  and other  obligations  of the
Borrower  to  the   Lenders  or  to  any  Lender,   the  Agent  or  any
indemnified party arising under the Loan Documents.

      "Other Taxes" is defined in Section 3.5(ii).

      "Parent" means AMREP Corporation, an Oklahoma corporation.

      "Participants" is defined in Section 12.2.1.

      "Payment Date" means the fifteenth  (15th) day of the first month
following the end of each calendar quarter.

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

      "Person"  means any  natural  person,  corporation,  firm,  joint
venture,   partnership,   limited   liability   company,   association,
enterprise,  trust or other entity or  organization,  or any government
or political  subdivision or any agency,  department or instrumentality
thereof.
<PAGE>

      "Plan"  means an employee  pension  benefit plan which is covered
by Title  IV of  ERISA or  subject  to the  minimum  funding  standards
under  Section  412 of the Code as to which the  Borrower or any member
of the Controlled Group may have any liability.

      "Pricing  Schedule" means the Schedule attached hereto identified
as such.

      "Property" of a Person means any and all property,  whether real,
personal,  tangible,  intangible,  or mixed,  of such Person,  or other
assets owned, leased or operated by such Person.

      "Purchasers" is defined in Section 12.3.1.

      "Rate  Hedging   Agreement"   means  an   agreement,   device  or
arrangement  providing for payments  which are related to  fluctuations
of interest  rates,  exchange  rates or forward rates,  including,  but
not limited to,  dollar-denominated  or  cross-currency  interest  rate
exchange  agreements,  forward currency exchange  agreements,  interest
rate cap or collar  protection  agreements,  forward  rate  currency or
interest rate options, puts and warrants.

      "Rate  Hedging  Obligations"  of  a  Person  means  any  and  all
obligations  of  such  Person,   whether  absolute  or  contingent  and
howsoever  and  whensoever  created,  arising,  evidenced  or  acquired
(including  all  renewals,  extensions  and  modifications  thereof and
substitutions   therefor),   under   (i)  any  and  all  Rate   Hedging
Agreements,  and (ii) any and all cancellations,  buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.

      "Regulation  D" means  Regulation  D of the Board of Governors of
the  Federal  Reserve  System as from  time to time in  effect  and any
successor  thereto or other  regulation or official  interpretation  of
said Board of  Governors  relating to reserve  requirements  applicable
to member banks of the Federal Reserve System.

      "Regulation  U" means  Regulation  U of the Board of Governors of
the  Federal  Reserve  System as from  time to time in  effect  and any
successor  or  other  regulation  or  official  interpretation  of said
Board of  Governors  relating to the  extension  of credit by banks for
the purpose of  purchasing  or carrying  margin  stocks  applicable  to
member banks of the Federal Reserve System.

      "Reportable  Event"  means  a  reportable  event  as  defined  in
Section 4043 of ERISA and the  regulations  issued under such  section,
with  respect to a Plan,  excluding,  however,  such events as to which
the PBGC has by regulation  waived the  requirement of Section  4043(a)
of ERISA that it be notified  within 30 days of the  occurrence of such
event,  provided,  however,  that a failure to meet the minimum funding
standard  of Section  412 of the Code and of Section 302 of ERISA shall
be a  Reportable  Event  regardless  of the issuance of any such waiver
of the notice  requirement in accordance  with either  Section  4043(a)
of ERISA or Section 412(d) of the Code.

      "Reports" is defined in Section 9.6.
<PAGE>

      "Required  Lenders"  means  Lenders  in the  aggregate  having at
least  fifty-one  percent (51%) of the Aggregate  Commitment or, if the
Aggregate  Commitment  has been  terminated,  Lenders in the  aggregate
holding  at  least  fifty-one  percent  (51%) of the  aggregate  unpaid
principal amount of the outstanding Advances.

      "Reserve  Requirement" means, with respect to an Interest Period,
the  maximum  aggregate  reserve  requirement   (including  all  basic,
supplemental,  marginal  and other  reserves)  which is  imposed  under
Regulation D on Eurocurrency liabilities.

      "Revolving  Loan"  means  that  portion  of  the  Loans  made  in
connection with Revolving Loan Commitment.

      "Revolving Loan  Commitment"  means that portion of the Aggregate
Commitment equal to Forty Million Dollars ($40,000,000.00).

      "Schedule"  refers  to a  specific  schedule  to this  Agreement,
unless another document is specifically referenced.

      "Section"  means a  numbered  section of this  Agreement,  unless
another document is specifically referenced.

      "Secured  Obligations" means,  collectively,  (i) the Obligations
and (ii) all Rate Hedging Obligations owing to one or more Lenders.

      "Single  Employer  Plan" means a Plan  maintained by the Borrower
or any member of the  Controlled  Group for  employees  of the Borrower
or any member of the Controlled Group.

      "Stock  Pledge   Agreement"   means  that  certain  Stock  Pledge
Agreement  dated  September 15,  1998  executed  by  Parent in favor of
Agent,  for the ratable  benefit of the  Lenders,  as it may be amended
or modified and in effect from time to time.

      "Subsidiary  Guaranties"  means that certain Guaranty dated as of
September  15, 1998  executed by Export,  that certain  Guaranty  dated
September  15, 1998  executed by  Fulfillment,  that  certain  Guaranty
dated as of  September  15, 1998  executed  by Canada and that  certain
Guaranty dated September 15, 1998 executed by International.

      "Subsidiary  Guarantors"  means Export,  Fulfillment,  Canada and
International and their successors and assigns.

      "Subordinated  Indebtedness"  of a Person means any  Indebtedness
of such Person the payment of which is  subordinated  to payment of the
Obligations to the written satisfaction of the Required Lenders.
<PAGE>

      "Subsidiary" of a Person means (i) any corporation  more than 50%
of the  outstanding  securities  having  ordinary voting power of which
shall at the time be owned or controlled,  directly or  indirectly,  by
such  Person or by one or more of its  Subsidiaries  or by such  Person
and one or more of its Subsidiaries,  or (ii) any partnership,  limited
liability  company,  association,  joint  venture or  similar  business
organization  more than 50% of the ownership  interests having ordinary
voting  power  of which  shall  at the time be so owned or  controlled.
Unless  otherwise  expressly  provided,  all  references  herein  to  a
"Subsidiary" shall mean a Subsidiary of the Borrower.

      "Substantial  Portion" means, with respect to the Property of the
Borrower  and its  Subsidiaries,  Property  which (i)  represents  more
than  10%  of  the   consolidated   assets  of  the  Borrower  and  its
Subsidiaries   as  would  be  shown  in  the   consolidated   financial
statements  of the Borrower and its  Subsidiaries  as at the  beginning
of the  twelve-month  period  ending  with  the  month  in  which  such
determination  is made,  or (ii) is  responsible  for more  than 10% of
the  consolidated  net sales or of the  consolidated  net income of the
Borrower  and  its   Subsidiaries   as   reflected  in  the   financial
statements referred to in clause (i) above.

      "Taxes"  means  any and all  present  or  future  taxes,  duties,
levies, imposts, deductions,  charges or withholdings,  and any and all
liabilities  with  respect to the  foregoing,  but  excluding  Excluded
Taxes.

      "Term Loan" as defined in Section 2.19.

      "Trademark  Security  Agreement"  means  that  certain  Trademark
Collateral  Assignment and Security  Agreement dated September 15, 1998
executed by  Borrower in favor of Agent for the ratable  benefit of the
Lenders, as it may be amended or modified in effect from time to time.

      "Transferee" is defined in Section 12.4.

      "Type" means,  with respect to any Advance in connection with the
Revolving  Loan,  its nature as a Floating Rate Advance or a Eurodollar
Advance.

      "U.C.C." means the Uniform  Commercial Code or comparable statute
or successor  statute or any successor  statute  thereto,  as in effect
from time to time in the relevant jurisdiction.

      "Unfunded  Liabilities"  means the  amount  (if any) by which the
present  value of all vested and unvested  accrued  benefits  under all
Single  Employer  Plans  exceeds the fair market value of all such Plan
assets  allocable to such benefits,  all determined as of the then most
recent  valuation date for such Plans using PBGC actuarial  assumptions
for single employer plan terminations.

      "Unmatured  Default"  means an event  which  but for the lapse of
time or the giving of notice, or both, would constitute a Default.

      "Wholly-Owned  Subsidiary"  of a Person means (i) any  Subsidiary
all of the  outstanding  voting  securities  of which shall at the time
be owned or controlled,  directly or indirectly,  by such Person or one
<PAGE>

or more  Wholly-Owned  Subsidiaries  of such Person,  or by such Person
and one or more  Wholly-Owned  Subsidiaries of such Person, or (ii) any
partnership,  limited liability company, association,  joint venture or
similar business  organization  100% of the ownership  interests having
ordinary  voting  power  of  which  shall  at the  time be so  owned or
controlled.

      "Year  2000  Issues"  means  anticipated   costs,   problems  and
uncertainties   associated  with  the  inability  of  certain  computer
applications  to effectively  handle data including  dates on and after
January 1, 2000, as such  inability  affects the business,  operations,
and  financial  condition of the Borrower and its  Subsidiaries  and of
the  Borrower's and its  Subsidiaries'  material  customers,  suppliers
and vendors.

      The  foregoing  definitions  shall be equally  applicable to both
the singular and plural forms of the defined terms.

                             ARTICLE II

                             THE CREDITS

      2.1. Commitment.  From and including  the date of this  Agreement
and prior to the  Facility  Termination  Date,  each  Lender  severally
agrees,  on the terms and  conditions set forth in this  Agreement,  to
make Loans to the  Borrower  from time to time in amounts not to exceed
in  the  aggregate  at any  one  time  outstanding  the  amount  of its
Commitment.  Subject to the terms of this  Agreement,  the Borrower may
borrow,   repay  and  reborrow  at  any  time  prior  to  the  Facility
Termination  Date amounts in connection  with the Revolving  Loan,  but
not the  Installment  Loan  and  Term  Loan.  The  Commitments  to lend
hereunder shall expire on the Facility Termination Date.

      2.2. Required  Payments;  Termination.  Any outstanding  Advances
and  all  other  unpaid  Obligations  shall  be  paid  in  full  by the
Borrower on the Facility Termination Date.

      2.3. Ratable  Loans.  Each  Advance  hereunder  shall  consist of
Loans  made from the  several  Lenders  ratably  in  proportion  to the
ratio  that  their   respective   Commitments  bear  to  the  Aggregate
Commitment.

      2.4. Types of  Advances.  The  Advances  in  connection  with the
Revolving  Loan may be Floating Rate  Advances or Eurodollar  Advances,
or a combination  thereof,  selected by the Borrower in accordance with
Sections 2.8 and 2.9.

      2.5. Commitment  Fee;  Reductions  in Aggregate  Revolving  Loan 
Commitment.  The  Borrower  agrees to pay to the Agent for the  account
of each  Lender a  commitment  fee of  one-quarter  percent  (1/4%) per
annum on the daily  unused  portion  of such  Lender's  Revolving  Loan
Commitment   from  the  date  hereof  to  and  including  the  Facility
Termination  Date,  payable on each Payment Date  hereafter  and on the
Facility  Termination  Date.  The Borrower may  permanently  reduce the
aggregate  Revolving  Loan  Commitment  in  whole,  or in part  ratably
among the Lenders in integral  multiples of $100,000.00,  upon at least
five  Business  Days' written  notice to the Agent,  which notice shall
specify the amount of any such reduction,  provided,  however, that the
amount of the aggregate  Revolving  Loan  Commitment may not be reduced
below the aggregate  principal  amount of the  outstanding  Advances in
<PAGE>

connection  with  the  Revolving  Loan.  All  accrued  commitment  fees
shall  be  payable  on the  effective  date of any  termination  of the
obligations of the Lenders to make Loans hereunder.

      2.6. Minimum  Amount  of Each  Advance  and  Maximum  Number  of 
Outstanding  Eurodollar  Advances.  Each Eurodollar Advance shall be in
the minimum  amount of  $1,000,000.00  (and in multiples of $100,000.00
if in excess  thereof),  and each Floating Rate Advance shall be in the
minimum  amount of  $100,000.00  (and in multiples of  $10,000.00 if in
excess  thereof),  provided,  however,  that any Floating  Rate Advance
may  be  in  the  amount  of  the  unused   aggregate   Revolving  Loan
Commitment.  In addition,  at no time shall there be  outstanding  more
than four (4) individual Eurodollar Advances.

      2.7. Optional Principal  Payments.  The Borrower may from time to
time pay,  without penalty or premium,  all  outstanding  Floating Rate
Advances,  or, in a minimum  aggregate  amount  of  $100,000.00  or any
integral  multiple of $10,000.00 in excess thereof,  any portion of the
outstanding  Floating  Rate  Advances  upon two  Business  Days'  prior
notice to the Agent.  The Borrower  may from time to time pay,  subject
to the  payment of any  funding  indemnification  amounts  required  by
Section  3.4  but  without   penalty  or   premium,   all   outstanding
Eurodollar   Advances,   or,   in  a   minimum   aggregate   amount  of
$1,000,000.00  or  any  integral  multiple  of  $100,000.00  in  excess
thereof,  any  portion  of the  outstanding  Eurodollar  Advances  upon
three Business Days' prior notice to the Agent.

      2.8. Method of  Selecting  Types and  Interest  Periods  for New 
Advances.  In  connection  with all Advances  relating to the Revolving
Loan,  the  Borrower  shall select the Type of Advance and, in the case
of each  Eurodollar  Advance,  the Interest Period  applicable  thereto
from  time to time.  The  Borrower  shall  give the  Agent  irrevocable
notice (a "Borrowing  Notice") not later than 2:00 p.m.  (Chicago time)
on any  Borrowing  Date of each  Floating Rate Advance and two Business
Days  before  the   Borrowing   Date  for  each   Eurodollar   Advance,
specifying:

   (i)     the Borrowing  Date,  which shall be a Business Day, of such
           Advance,

  (ii)     the aggregate amount of such Advance,

 (iii)     the Type of Advance selected, and

  (iv)     in the case of each Eurodollar Advance,  the Interest Period
           applicable thereto.

The Agent will make the funds  received  from the Lenders,  or provided
by Agent  pursuant to Section 2.21,  hereof,  available to the Borrower
at the  Agent's  aforesaid  address  not later than 5:00 p.m.  (Chicago
time) on any Borrowing Date.

      2.9. Conversion  and   Continuation   of  Outstanding   Advances.
Floating  Rate  Advances  shall  continue  as  Floating  Rate  Advances
unless  and until  such  Floating  Rate  Advances  are  converted  into
<PAGE>

Eurodollar  Advances  pursuant  to this  Section  2.9 or are  repaid in
accordance  with Section 2.7. Each  Eurodollar  Advance shall  continue
as a Eurodollar  Advance until the end of the then applicable  Interest
Period  therefor,  at  which  time  such  Eurodollar  Advance  shall be
automatically  converted  into a Floating Rate Advance  unless (x) such
Eurodollar  Advance is or was repaid in accordance  with Section 2.7 or
(y) the Borrower  shall have given the Agent a  Conversion/Continuation
Notice  (as  defined  below)  requesting  that,  at  the  end  of  such
Interest  Period,  such  Eurodollar  Advance  continue as a  Eurodollar
Advance  for the  same  or  another  Interest  Period.  Subject  to the
terms of  Section  2.6,  the  Borrower  may elect  from time to time to
convert all or any part of a Floating  Rate  Advance  into a Eurodollar
Advance.  The  Borrower  shall  give the  Agent  irrevocable  notice (a
"Conversion/Continuation  Notice")  of each  conversion  of a  Floating
Rate  Advance  into  a  Eurodollar   Advance  or   continuation   of  a
Eurodollar  Advance not later than 10:00 a.m.  (Chicago  time) at least
three  Business Days prior to the date of the  requested  conversion or
continuation, specifying:

   (i)     the requested  date,  which shall be a Business Day, of such
           conversion or continuation,

  (ii)     the aggregate  amount and Type of the Advance which is to be
           converted or continued, and

 (iii)     the amount of such Advance which is to be converted  into or
           continued  as a  Eurodollar  Advance and the duration of the
           Interest Period applicable thereto.

      2.10. Changes in Interest  Rate, etc.  Each Floating Rate Advance
shall bear interest on the outstanding  principal  amount thereof,  for
each  day from  and  including  the  date  such  Advance  is made or is
automatically  converted  from a  Eurodollar  Advance  into a  Floating
Rate Advance  pursuant to Section 2.9, to but  excluding the date it is
paid or is  converted  into a  Eurodollar  Advance  pursuant to Section
2.9  hereof,  at a rate per annum equal to the  Floating  Rate for such
day.  Changes in the rate of  interest  on that  portion of any Advance
maintained as a Floating  Rate Advance will take effect  simultaneously
with each change in the Alternate Base Rate.  Each  Eurodollar  Advance
shall bear interest on the  outstanding  principal  amount thereof from
and including the first day of the Interest Period  applicable  thereto
to (but not  including)  the last day of such  Interest  Period  at the
interest   rate   determined   by  the  Agent  as  applicable  to  such
Eurodollar  Advance based upon the Borrower's  selections under Section
2.8 and 2.9 and  otherwise  in  accordance  with the terms  hereof.  No
Interest Period may end after the Facility Termination Date.

      2.11. Rates  Applicable After Default.  Notwithstanding  anything
to  the  contrary   contained  in  Section  2.8  or  2.9,   during  the
continuance  of a Default or  Unmatured  Default the  Required  Lenders
may, at their  option,  by notice to the Borrower  (which notice may be
revoked  at the  option of the  Required  Lenders  notwithstanding  any
provision  of Section 8.2  requiring  unanimous  consent of the Lenders
to changes in  interest  rates),  declare  that no Advance  may be made
as,  converted  into or continued as a Eurodollar  Advance.  During the
continuance  of a Default the Required  Lenders  may, at their  option,
by notice to the  Borrower  (which  notice may be revoked at the option
of the Required  Lenders  notwithstanding  any provision of Section 8.2
requiring  unanimous  consent of the  Lenders  to  changes in  interest
rates),  declare that (i) each  Eurodollar  Advance shall bear interest
for  the  remainder  of the  applicable  Interest  Period  at the  rate
otherwise  applicable to such Interest  Period plus 3% per annum,  (ii)
each  Floating  Rate  Advance  shall bear  interest at a rate per annum
equal to the  Floating  Rate in  effect  from  time to time plus 3% per
annum and (iii)  interest on the Term Loan and  Installment  Loan shall
bear  interest at a rate per annum equal to the  interest  rate then in
<PAGE>

effect from time to time thereunder  plus 3% per annum,  provided that,
during the  continuance  of a Default  under  Section  7.6 or 7.7,  the
interest  rates set forth in clauses  (i),  (ii) and (iii)  above shall
be  applicable  to all  Advances  without any election or action on the
part of the Agent or any Lender.

      2.12. Method of  Payment.   All   payments  of  the   Obligations
hereunder shall be made,  without setoff,  deduction,  or counterclaim,
in  immediately  available  funds to the Agent at the  Agent's  address
specified   pursuant  to  Article   XIII,   or  at  any  other  Lending
Installation  of the Agent  specified  in  writing  by the Agent to the
Borrower,  by noon  (local  time)  on the date  when  due and  shall be
applied   ratably  by  the  Agent  among  the  Lenders.   Each  payment
delivered  to the  Agent  for  the  account  of  any  Lender  shall  be
delivered  promptly  by the  Agent to such  Lender  in the same type of
funds that the Agent  received  at its  address  specified  pursuant to
Article  XIII or at any  Lending  Installation  specified  in a  notice
received  by  the  Agent  from  such   Lender.   The  Agent  is  hereby
authorized  to charge  the  account  of the  Borrower  maintained  with
American  for  each  payment  of  principal,  interest  and  fees as it
becomes due hereunder.

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

      (ii) The Agent  shall  also  maintain  accounts  in which it will
record (a) the  amount of each Loan made  hereunder,  the Type  thereof
and the  Interest  Period with respect  thereto,  (b) the amount of any
principal  or  interest  due and  payable or to become due and  payable
from the  Borrower to each Lender  hereunder  and (c) the amount of any
sum  received  by the  Agent  hereunder  from  the  Borrower  and  each
Lender's share thereof.

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

      (iv) Any  Lender may  request  that its Loans be  evidenced  by a
promissory  note  (a  "Note").   In  such  event,  the  Borrower  shall
prepare,  execute  and  deliver  to such  Lender a Note  payable to the
order of such  Lender  in a form  supplied  by the  Agent.  Thereafter,
the Loans  evidenced  by such Note and  interest  thereon  shall at all
times  (including  after any  assignment  pursuant to Section  12.3) be
represented  by one or more  Notes  payable  to the  order of the payee
named therein or any assignee  pursuant to Section 12.3,  except to the
extent that any such Lender or assignee  subsequently  returns any such
Note for  cancellation  and  requests  that such  Loans  once  again be
evidenced as described in paragraphs (i) and (ii) above.

      2.14. Telephonic  Notices. The  Borrower  hereby  authorizes  the
Lenders and the Agent to extend,  convert or continue Advances,  effect
selections  of  Types  of  Advances  and to  transfer  funds  based  on
telephonic  notices  made by any  person  or  persons  the Agent or any
<PAGE>

Lender  in  good  faith   believes  to  be  acting  on  behalf  of  the
Borrower.  The  Borrower  agrees  to  deliver  promptly  to the Agent a
written  confirmation,  if such  confirmation is requested by the Agent
or any  Lender,  of each  telephonic  notice  signed  by an  Authorized
Officer.  If the written  confirmation  differs in any material respect
from the  action  taken by the Agent and the  Lenders,  the  records of
the Agent and the Lenders shall govern absent manifest error.

      2.15. Interest Payment Dates; Interest and Fee.  Interest accrued
on each  Floating  Rate Advance  shall be payable on each Payment Date,
commencing  with the  first  such date to occur  after the date  hereof
and at maturity.  Interest  accrued on each  Eurodollar  Advance  shall
be payable on the last day of its applicable  Interest  Period,  on any
date  on  which  the   Eurodollar   Advance  is  prepaid,   whether  by
acceleration or otherwise,  and at maturity.  Interest  accrued on each
Eurodollar  Advance having an Interest  Period longer than three months
shall  also be  payable  on the last day of each  three-month  interval
during such  Interest  Period.  Interest and  commitment  fees shall be
calculated  for actual  days  elapsed  on the basis of a 360-day  year.
Interest  shall be  payable  for the day an Advance is made but not for
the day of any  payment  on the  amount  paid if  payment  is  received
prior to noon  (local  time) at the place of  payment.  If any  payment
of  principal  of or interest on an Advance  shall  become due on a day
which is not a Business  Day,  such  payment  shall be made on the next
succeeding  Business Day and, in the case of a principal payment,  such
extension  of  time  shall  be  included  in   computing   interest  in
connection with such payment.

      2.16. Notification of Advances, Interest Rates,  Prepayments and 
Commitment  Reductions.  Promptly  after  receipt  thereof,  the  Agent
will notify each Lender of the  contents of each  Aggregate  Commitment
reduction  notice,  Borrowing Notice,  Conversion/Continuation  Notice,
and repayment  notice  received by it hereunder.  The Agent will notify
each  Lender  of  the  interest  rate  applicable  to  each  Eurodollar
Advance  promptly  upon  determination  of such  interest rate and will
give each Lender  prompt  notice of each change in the  Corporate  Base
Rate.

      2.17. Limitation on  Outstanding Amount of Revolving  Loan. At no
time shall the  outstanding  amount of the Revolving Loan exceed eighty
percent  (80%)  of  the  Eligible  Accounts.   If,  at  any  time,  the
outstanding  amount of the Revolving  Loan exceeds eighty percent (80%)
of the Eligible  Accounts for any reason,  including a determination by
Agent  that an  account  is no longer  an  Eligible  Account,  Borrower
shall  immediately  pay to  Agent  the  amount  of  said  excess  to be
applied to reduce the then principal balance of the Revolving Loan.

      2.18. Installment  Loan.  In  addition  to  the  Revolving  Loan,
contemporaneously  with the execution of this Agreement,  Lenders shall
make an installment  loan (the  "Installment  Loan") to Borrower in the
aggregate   principal  amount  of  One  Million  Two  Hundred  Thousand
Dollars  ($1,200,000.00).  The  Installment  Loan  shall be  secured by
the   Collateral   Documents,   is   specifically   included  with  the
Obligations as defined  herein,  and shall bear interest at the rate of
the  Corporate  Base  Rate as  changing  from  time to  time.  Borrower
shall repay the Installment  Loan through  payments of interest only at
the Corporate  Base Rate  commencing on the first day of October and on
the first day of each month  thereafter  together with annual principal
payments of Four Hundred Thousand Dollars  ($400,000.00)  commencing on
December  31,  1998  and on the last  day of each  December  thereafter
with a  final  payment  of  the  then  full  principal  balance  of the
<PAGE>

Installment  Loan  together  with all  remaining  accrued  interest  on
October  31,  2000.  The  Installment  Loan may be  prepaid at any time
without  penalty or  premium.  Any  prepayment  shall be applied to the
payments  due on the  Installment  Loan in the  inverse  order of their
maturity.

      2.19. Term  Loan.  In   addition  to  the   Revolving   Loan  and
Installment  Loan,   contemporaneously   with  the  execution  of  this
Agreement,  Lenders  shall  make a  term  loan  (the  "Term  Loan")  to
Borrower  in  the  aggregate  principal  amount  of  One  Million  Five
Hundred  Thousand  Dollars  ($1,500,000.00).  The  Term  Loan  shall be
secured by the Collateral Documents,  is specifically  including within
the  Obligations  as defined  herein,  and shall bear  interest  at the
rate of the  Corporate  Base  Rate as  changing  from time to time plus
fifty (50) basis  points.  Borrower  shall repay the Term Loan  through
payment of  quarterly  payments  of  accrued  interest  plus  quarterly
principal   payments  of  One  Hundred  Twenty  Five  Thousand  Dollars
($125,000.00)  commencing  on November 30, 1998 and  continuing  on the
last day of each February,  May, August and November  thereafter with a
final  payment  of the then  full  principal  balance  of the Term Loan
together with all remaining  accrued  interest on August 31, 2001.  The
Term Loan may be prepaid at any time  without  penalty or premium.  Any
prepayment  shall be  applied to the  payments  due on the Term Loan in
the inverse order of their maturity.

      2.20. Lending  Installations. Each  Lender  may book its Loans at
any  Lending  Installation  selected  by such Lender and may change its
Lending  Installation  from time to time.  All terms of this  Agreement
shall  apply to any such  Lending  Installation  and the  Loans and any
Notes  issued  hereunder  shall be deemed  held by each  Lender for the
benefit of such  Lending  Installation.  Each  Lender  may,  by written
notice to the Agent and the Borrower in  accordance  with Article XIII,
designate  replacement  or  additional  Lending  Installations  through
which  Loans  will be made by it and for whose  account  Loan  payments
are to be made.

      2.21. Periodic Funding by Lenders.

      (i)  Because  the  Borrower  anticipates  requesting  Advances in
           connection  with the  Revolving  Loan on a daily  basis  and
           repaying  the  Revolving  Loan  on  a  daily  basis  through
           collections  resulting  in the  amount  of  the  outstanding
           Revolving Loan  fluctuating from day to day, and in order to
           administer the Revolving Loan in an efficient  manner and to
           minimize  the  transfer  of funds  between the Agent and the
           Lenders,  the Lenders  hereby  instruct  the Agent,  and the
           Agent may (but is not obligated to) (A) make  available,  on
           behalf of the  Lenders,  the full amount of all  Advances in
           connection   with  the  Revolving   Loan  requested  by  the
           Borrower (not to exceed  $40,000,000.00  in the aggregate at
           any one time  outstanding)  without giving each Lender prior
           notice of the  proposed  Advance  relating to the  Revolving
           Loan,  of such  Lender's ratable  portion  thereof  and the
           other  matters  covered by the  Borrowing  Notice and (B) if
           the Agent has made any such  amounts  available  as provided
           in clause (A), upon  repayment of the Revolving  Loan by the
           Borrower,  apply such amounts repaid directly to the amounts
           made  available by the Agent in  accordance  with clause (A)
           and not yet settled as described  below;  provided  that the
           Agent shall not  advance  funds as  described  in clause (A)
           above  if the  Agent  has  actually  received  prior to such
           Advance  related to the Revolving  Loan a  certificate  from
           the Borrower  pursuant to and in accordance with Section 6.2
<PAGE>

           that an Unmatured Default or Default then exists.

      (ii) If the Agent  advances the  Revolving  Loan on behalf of the
           Lenders,  as provided in paragraph (i), above, the amount of
           the  outstanding  Revolving  Loan and each Lender's  ratable
           portion  thereof shall be computed  twice a week rather than
           daily and shall be adjusted  upward or downward on the basis
           of the amount of the  outstanding  Revolving Loan as of 5:00
           p.m.   (Chicago  time)  on  the  Business  Day   immediately
           preceding the date of each computation;  provided,  however,
           that the Agent  retains  the  absolute  right at any time or
           from  time to time to make the  above-described  adjustments
           at intervals more frequent than twice a week.

      (iii)The Agent  shall  deliver to each of the  Lenders  after the
           end of each  computation  period,  or such lesser  period or
           periods as the Agent shall  determine,  a summary  statement
           of the  amount of the  outstanding  Revolving  Loan for such
           period (such period or periods being  hereafter  referred to
           as a  "Settlement  Period").  If the  summary  statement  is
           sent by the  Agent  and  received  by the  Lenders  prior to
           12:30 p.m.  (Chicago  time) on any  Business Day each Lender
           shall make the  transfers  described in the next  succeeding
           sentence no later than 3:00 p.m.  (Chicago  time) on the day
           such  summary  statement  was  sent;  and  if  such  summary
           statement  is sent by the Agent and  received by the Lenders
           after 12:30 p.m.  (Chicago  time) on any Business  Day, each
           Lender  shall  make such  transfers  no later than 3:00 p.m.
           (Chicago time) on the next succeeding Business Day.

      (iv) If in  any  Settlement  Period,  the  amount  of a  Lender's
           ratable  portion of the  Revolving  Loan is in excess of the
           amount  of  the  Revolving  Loan  actually  funded  by  such
           Lender,  such Lender shall  forthwith (but in no event later
           than the time set forth in paragraph (iii),  above) transfer
           to the  Agent  by wire  transfer  in  immediately  available
           funds the amount of such excess;  and, on the other hand, if
           the amount of a Lender's  ratable  portion of the  Revolving
           Loan in any  Settlement  Period is less  than the  amount of
           the  Revolving  Loan  actually  funded by such  Lender,  the
           Agent  shall  forthwith  transfer  to  such  Lender  by wire
           transfer in immediately  available  funds the amount of such
           difference.  The  obligation  of  each  of  the  Lenders  to
           transfer such funds shall be irrevocable  and  unconditional
           and  without  recourse  to or  warranty  by the  Agent.  The
           Agent and the Lenders agree to make their  respective  books
           and records at the end of each Settlement  Period to reflect
           at all times the dollar amount of their  respective  ratable
           portions of the outstanding Revolving Loan.

      (v)  Because the Agent on behalf of the Lenders may be  advancing
           and/or  may be repaid the  Revolving  Loan prior to the time
           when the Lenders will actually  advance and/or be repaid the
           Revolving Loan,  interest with respect to the Revolving Loan
           shall be  allocated  by the Agent to each Lender  (including
           the Agent) in  accordance  with the amount of the  Revolving
           Loan  actually   advanced  by  and  repaid  to  each  Lender
           (including  the Agent)  during  each  Settlement  Period and
           shall  accrue from and  including  the date such  portion of
           the  Revolving  Loan is advanced by the Agent but  excluding
           the date such  portion of the  Revolving  Loan was repaid by
           the Borrower in accordance  with this  Agreement or actually
<PAGE>

           settled  by the  applicable  Lender  as  described  in  this
           Section 2.21.

      2.22. Non-Receipt of Funds by the Agent.  Unless the  Borrower or
a Lender,  as the case may be,  notifies the Agent prior to the date on
which it is  scheduled  to make payment to the Agent of (i) in the case
of a  Lender,  the  proceeds  of a Loan  or  (ii)  in the  case  of the
Borrower,  a payment of  principal,  interest  or fees to the Agent for
the  account  of the  Lenders,  that it does not  intend  to make  such
payment,  the Agent may assume  that such  payment  has been made.  The
Agent  may,  but shall not be  obligated  to,  make the  amount of such
payment  available  to the  intended  recipient  in reliance  upon such
assumption.  If such  Lender or the  Borrower,  as the case may be, has
not in fact made such  payment  to the  Agent,  the  recipient  of such
payment  shall,  on demand by the Agent,  repay to the Agent the amount
so made  available  together with  interest  thereon in respect of each
day during the period  commencing  on the date such  amount was so made
available  by the Agent until the date the Agent  recovers  such amount
at a rate per annum  equal to (x) in the case of  payment  by a Lender,
the  Federal  Funds  Effective  Rate for such day or (y) in the case of
payment by the Borrower,  the interest rate  applicable to the relevant
Loan.

                             ARTICLE III

                       YIELD PROTECTION; TAXES

      3.1. Yield  Protection.   If,  on  or  after  the  date  of  this
Agreement,   the   adoption   of  any  law  or  any   governmental   or
quasi-governmental  rule,  regulation,  policy,  guideline or directive
(whether  or not  having  the  force  of  law),  or any  change  in the
interpretation  or  administration   thereof  by  any  governmental  or
quasi-governmental   authority,   central  bank  or  comparable  agency
charged  with  the   interpretation  or  administration   thereof,   or
compliance by any Lender or applicable  Lending  Installation  with any
request or  directive  (whether  or not having the force of law) of any
such authority, central bank or comparable agency:

   (i)     subjects any Lender or any applicable  Lending  Installation
           to any Taxes,  or changes  the basis of taxation of payments
           (other than with  respect to  Excluded  Taxes) to any Lender
           in respect of its Eurodollar Loans, or

  (ii)     imposes  or  increases  or  deems  applicable  any  reserve,
           assessment,  insurance  charge,  special  deposit or similar
           requirement  against  assets  of,  deposits  with or for the
           account  of,  or  credit  extended  by,  any  Lender  or any
           applicable  Lending  Installation  (other than  reserves and
           assessments  taken into account in determining  the interest
           rate applicable to Eurodollar Advances), or

 (iii)     imposes  any  other  condition  the  result  of  which is to
           increase  the cost to any Lender or any  applicable  Lending
           Installation   of  making,   funding  or   maintaining   its
           Eurodollar  Loans or reduces  any amount  receivable  by any
           Lender or any applicable Lending  Installation in connection
           with its  Eurodollar  Loans,  or requires  any Lender or any
           applicable   Lending   Installation   to  make  any  payment
<PAGE>

           calculated  by reference to the amount of  Eurodollar  Loans
           held  or  interest  received  by  it,  by an  amount  deemed
           material by such Lender,

and the  result  of any of the  foregoing  is to  increase  the cost to
such  Lender  or   applicable   Lending   Installation   of  making  or
maintaining  its  Eurodollar  Loans  or  Commitment  or to  reduce  the
return  received by such Lender or applicable  Lending  Installation in
connection  with such Eurodollar  Loans or Commitment,  in each case by
an amount  deemed  material  by such  Lender,  then,  within 15 days of
demand  by such  Lender,  the  Borrower  shall  pay  such  Lender  such
additional  amount or amounts as will  compensate  such Lender for such
increased cost or reduction in amount received.

      3.2. Changes  in  Capital  Adequacy  Regulations.   If  a  Lender
determines   the  amount  of  capital   required   or  expected  to  be
maintained by such Lender,  any Lending  Installation of such Lender or
any corporation  controlling  such Lender is increased as a result of a
Change,  then,  within 15 days of demand by such  Lender,  the Borrower
shall pay such  Lender  the  amount  necessary  to  compensate  for any
shortfall  in the  rate of  return  on the  portion  of such  increased
capital  which  such  Lender   determines  is   attributable   to  this
Agreement,  its Loans or its Commitment to make Loans hereunder  (after
taking into account  such  Lender's  policies as to capital  adequacy).
"Change"  means (i) any change after the date of this  Agreement in the
Risk-Based  Capital  Guidelines  or (ii) any  adoption  of or change in
any other law,  governmental or  quasi-governmental  rule,  regulation,
policy,  guideline,   interpretation,  or  directive  (whether  or  not
having  the  force  of law)  after  the  date of this  Agreement  which
affects the amount of capital  required  or  expected to be  maintained
by  any  Lender  or  any  Lending   Installation   or  any  corporation
controlling  any  Lender.  "Risk-Based  Capital  Guidelines"  means (i)
the  risk-based  capital  guidelines  in effect in the United States on
the date of this Agreement,  including  transition  rules, and (ii) the
corresponding    capital   regulations    promulgated   by   regulatory
authorities  outside  the  United  States  implementing  the July  1988
report of the Basle  Committee on Banking  Regulation  and  Supervisory
Practices Entitled  "International  Convergence of Capital Measurements
and  Capital   Standards,"   including   transition   rules,   and  any
amendments  to  such  regulations  adopted  prior  to the  date of this
Agreement.

      3.3. Availability   of  Types   of   Advances.   If  any   Lender
determines  that  maintenance  of its  Eurodollar  Loans at a  suitable
Lending   Installation   would  violate  any   applicable   law,  rule,
regulation,  or  directive,  whether or not having the force of law, or
if the  Required  Lenders  determine  that (i)  deposits  of a type and
maturity   appropriate  to  match  fund  Eurodollar  Advances  are  not
available or (ii) the  interest  rate  applicable  to a Type of Advance
does not  accurately  reflect  the cost of making or  maintaining  such
Advance,   then  the  Agent  shall  suspend  the  availability  of  the
affected Type of Advance and require any affected  Eurodollar  Advances
to be repaid or converted  to Floating  Rate  Advances,  subject to the
payment of any  funding  indemnification  amounts  required  by Section
3.4.

      3.4. Funding  Indemnification.  If any  payment  of a  Eurodollar
Advance  occurs on a date  which is not the last day of the  applicable
Interest  Period,  whether  because  of  acceleration,   prepayment  or
otherwise,  or a Eurodollar  Advance is not made on the date  specified
by the Borrower  for any reason other than default by the Lenders,  the
Borrower  will  indemnify  each Lender for any loss or cost incurred by
it resulting  therefrom,  including,  without  limitation,  any loss or
cost  in  liquidating  or  employing   deposits  acquired  to  fund  or
maintain such Eurodollar Advance.
<PAGE>

      3.5. Taxes.  (i)  All  payments  by the  Borrower  to or for  the
account  of any Lender or the Agent  hereunder  or under any Note shall
be  made  free  and  clear  of and  without  deduction  for any and all
Taxes.  If the  Borrower  shall be  required by law to deduct any Taxes
from or in respect of any sum  payable  hereunder  to any Lender or the
Agent,  (a) the sum payable  shall be  increased  as  necessary so that
after making all required deductions  (including  deductions applicable
to  additional  sums payable under this Section 3.5) such Lender or the
Agent  (as the  case may be)  receives  an  amount  equal to the sum it
would  have  received  had  no  such  deductions  been  made,  (b)  the
Borrower  shall make such  deductions,  (c) the Borrower  shall pay the
full amount  deducted to the  relevant  authority  in  accordance  with
applicable  law and (d) the  Borrower  shall  furnish  to the Agent the
original copy of a receipt  evidencing  payment  thereof within 30 days
after such payment is made.

      (ii) In addition,  the Borrower  hereby agrees to pay any present
or future stamp or  documentary  taxes and any other excise or property
taxes,  charges or similar  levies  which arise from any  payment  made
hereunder  or under any Note or from the  execution  or delivery of, or
otherwise with respect to, this Agreement or any Note ("Other Taxes").

      (iii)  The  Borrower  hereby  agrees to  indemnify  the Agent and
each  Lender for the full amount of Taxes of the type  contemplated  by
clause (i) or Other Taxes  (including,  without  limitation,  any Taxes
or Other  Taxes  imposed on amounts  payable  under this  Section  3.5)
paid  by  the  Agent  or  such  Lender  and  any  liability  (including
penalties,  interest and  expenses)  arising  therefrom or with respect
thereto.   Payments  due  under  this  indemnification  shall  be  made
within  30 days of the  date  the  Agent or such  Lender  makes  demand
therefor pursuant to Section 3.6.

      (iv) Each Lender that is not  incorporated  under the laws of the
United  States  of  America  or  a  state  thereof  (each  a  "Non-U.S.
Lender")  agrees that it will,  not less than ten  Business  Days after
the date of this  Agreement,  (i) deliver to each of the  Borrower  and
the Agent two duly completed  copies of United States Internal  Revenue
Service Form 1001 or 4224,  certifying  in either case that such Lender
is  entitled  to  receive   payments  under  this   Agreement   without
deduction or  withholding  of any United States  federal  income taxes,
and  (ii)  deliver  to each of the  Borrower  and  the  Agent a  United
States  Internal  Revenue  Form W-8 or W-9,  as the  case  may be,  and
certify that it is entitled to an exemption  from United  States backup
withholding  tax. Each Non-U.S.  Lender  further  undertakes to deliver
to each of the  Borrower  and the  Agent  (x)  renewals  or  additional
copies  of such  form (or any  successor  form) on or  before  the date
that  such  form  expires  or  becomes  obsolete,  and  (y)  after  the
occurrence  of any event  requiring a change in the most  recent  forms
so  delivered by it, such  additional  forms or  amendments  thereto as
may be  reasonably  requested by the  Borrower or the Agent.  All forms
or amendments  described in the preceding  sentence  shall certify that
such  Lender is  entitled  to receive  payments  under  this  Agreement
without  deduction or  withholding  of any United States federal income
taxes,  unless 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  such  Lender  from  duly
completing  and  delivering  any such form or amendment with respect to
it and such Lender  advises the  Borrower  and the Agent that it is not
capable of receiving  payments  without any deduction or withholding of
United States federal income tax.
<PAGE>

      (v) For any period  during which a Non-U.S.  Lender has failed to
provide  the  Borrower  with an  appropriate  form  pursuant  to clause
(iv),  above (unless such failure is due to a change in treaty,  law or
regulation,  or any  change  in the  interpretation  or  administration
thereof by any  governmental  authority,  occurring  subsequent  to the
date on which a form  originally  was  required to be  provided),  such
Non-U.S.  Lender  shall not be entitled to  indemnification  under this
Section  3.5  with  respect  to Taxes  imposed  by the  United  States;
provided  that,  should a Non-U.S.  Lender  which is  otherwise  exempt
from or subject to a reduced  rate of  withholding  tax become  subject
to Taxes  because  of its  failure  to  deliver a form  required  under
clause  (iv),  above,  the  Borrower  shall  take  such  steps  as such
Non-U.S.  Lender  shall  reasonably  request  to assist  such  Non-U.S.
Lender to recover such Taxes.

      (vi)  Any  Lender  that  is  entitled  to an  exemption  from  or
reduction  of  withholding  tax with  respect  to  payments  under this
Agreement   or  any  Note   pursuant   to  the  law  of  any   relevant
jurisdiction  or any treaty shall deliver to the Borrower  (with a copy
to the  Agent),  at the time or times  prescribed  by  applicable  law,
such  properly  completed  and  executed  documentation  prescribed  by
applicable  law  as  will  permit  such  payments  to be  made  without
withholding or at a reduced rate.

      3.6. Lender  Statements;  Survival  of  Indemnity.  To the extent
reasonably  possible,  each Lender shall designate an alternate Lending
Installation,  other  than  the  ones  shown  on  the  signature  pages
hereof,  with respect to its  Eurodollar  Loans to reduce any liability
of the  Borrower to such Lender under  Sections  3.1, 3.2 and 3.5 or to
avoid the  unavailability of Eurodollar  Advances under Section 3.3, so
long as  such  designation  is not,  in the  judgment  of such  Lender,
disadvantageous  to such Lender.  Each Lender  shall  deliver a written
statement  of such  Lender to the  Borrower  (with a copy to the Agent)
as to the amount due,  if any,  under  Section  3.1,  3.2,  3.4 or 3.5.
Such  written  statement  shall  set  forth in  reasonable  detail  the
calculations  upon which such Lender  determined  such amount and shall
be final,  conclusive  and  binding on the  Borrower  in the absence of
manifest  error.  In determining  such amount,  each Lender may use any
reasonable   averaging  and  attribution   methods.   Determination  of
amounts  payable under such  Sections in  connection  with a Eurodollar
Loan shall be calculated  as though each Lender  funded its  Eurodollar
Loan  through  the  purchase  of a  deposit  of the type  and  maturity
corresponding  to the deposit  used as a reference in  determining  the
Eurodollar  Rate  applicable to such Loan,  whether in fact that is the
case or not. Unless  otherwise  provided  herein,  the amount specified
in the  written  statement  of any  Lender  shall be  payable on demand
after  receipt  by  the  Borrower  of  such  written   statement.   The
obligations  of the  Borrower  under  Sections  3.1,  3.2,  3.4 and 3.5
shall  survive  payment  of the  Obligations  and  termination  of this
Agreement.

                             ARTICLE IV

                        CONDITIONS PRECEDENT

      4.1. Initial  Advance.  The Lenders shall not be required to make
the initial  Advance  hereunder  unless the Borrower  has  furnished to
the Agent with sufficient copies for the Lenders:

   (i)     Copies of the articles or  certificate of  incorporation  of
           the  Borrower,  each  Subsidiary  of the  Borrower  and  the
           Parent  together with all  amendments,  and a certificate of
<PAGE>

           good   standing,   each   certified   by   the   appropriate
           governmental officer in its jurisdiction of incorporation.

  (ii)     Copies,  certified by the  Secretary or Assistant  Secretary
           of  the  Borrower,  each  Subsidiary  of  Borrower  and  the
           Parent,  of  its  by-laws  and of its  Board  of  Directors'
           resolutions  and of resolutions or actions of any other body
           authorizing  the  execution  of the Loan  Documents to which
           the  Borrower,  each  Subsidiary  of the  Borrower  and  the
           Parent is a party.

 (iii)     An  incumbency  certificate,  executed by the  Secretary  or
           Assistant  Secretary of the  Borrower,  each  Subsidiary  of
           Borrower  and the Parent,  which shall  identify by name and
           title and bear the  signatures  of the  Authorized  Officers
           and any other officers of the Borrower,  each  Subsidiary of
           Borrower  and  the  Parent   authorized  to  sign  the  Loan
           Documents  to  which  the  Borrower,   each   Subsidiary  of
           Borrower and the Parent is a party,  upon which  certificate
           the Agent and the  Lenders  shall be  entitled to rely until
           informed of any change in writing by the Borrower.

  (iv)     Certificates  of good standing  and/or  qualification  to do
           business for the Borrower,  each  Subsidiary of Borrower and
           Parent   issued   for   all   jurisdictions   wherein   said
           qualification  is  necessary  as a  result  of said  parties
           owning assets or doing business therein.

   (v)     A certificate,  signed by the chief financial officer of the
           Borrower,  stating  that on the  initial  Borrowing  Date no
           Default or Unmatured Default has occurred and is continuing.

  (vi)     A written  opinion of the Borrower's  counsel,  addressed to
           the Lenders in substantially the form of Exhibit A.

 (vii)     Any Notes  requested  by a Lender  pursuant to Section  2.13
           payable to the order of each such requesting Lender.

(viii)     Written money transfer  instructions,  in substantially  the
           form of Exhibit D,  addressed  to the Agent and signed by an
           Authorized  Officer,  together with such other related money
           transfer  authorizations  as the Agent  may have  reasonably
           requested.

  (ix)     The executed Kable Security Agreement.

   (x)     The executed Fulfillment Security Agreement.

  (xi)     The executed Export Security Agreement.

 (xii)     The executed Canada Security Agreement.

(xiii)     The Executed International Security Agreement.
<PAGE>

 (xiv)     The executed Guaranty.

  (xv)     The executed Subsidiary Guaranties.

 (xvi)     The executed Stock Pledge Agreement.

(xvii)     The executed Trademark Security Agreement.

(xviii)    Delivery of all stock certificates and executed  assignments
           as required  under the Stock Pledge  Agreement and the Kable
           Security Agreement.

 (xix)     Executed  UCC-1 and UCC-2  financing  statements in favor of
           Agent for the  ratable  benefit of all  Lenders  executed by
           Borrower, Fulfillment,  Export, Canada and International for
           filing and/or recording in all applicable jurisdictions.

  (xx)     Executed UCC-1 and UCC-2  financing  statements  executed by
           Fulfillment,  Export,  Canada and  International in favor of
           Borrower  with  assignment  of same to Agent for the ratable
           benefit  of all  Lenders in  connection  with the grant of a
           security  interest  by  Fulfillment,   Export,   Canada  and
           International  to  Borrower  as  described  in Section  6.22
           hereof.

 (xxi)     An executed Monthly Collateral Report.

(xxii)     An executed  Actual  Collections  and  Estimated Net Billing
           Report.

(xxiii)    The insurance certificate described in Section 5.21.

(xxiv)     Such other  documents  as any Lender or its counsel may have
           reasonably requested.

      4.2. Each.  The  Lenders  shall  not  be  required  to  make  any
Advance  (other than an Advance that,  after giving effect  thereto and
to the  application  of the  proceeds  thereof,  does not  increase the
aggregate  amount of  outstanding  Advances),  unless on the applicable
Borrowing Date:

   (i)     There exists no Default or Unmatured Default.

  (ii)     The  representations  and warranties  contained in Article V
           are true and  correct as of such  Borrowing  Date  except to
           the extent any such  representation or warranty is stated to
           relate  solely  to an  earlier  date,  in  which  case  such
           representation  or warranty shall have been true and correct
           on and as of such earlier date.

 (iii)     All legal  matters  incident  to the making of such  Advance
           shall be satisfactory to the Lenders and their counsel.
<PAGE>

      Each  Borrowing  Notice with respect to each such  Advance  shall
constitute  a  representation  and  warranty by the  Borrower  that the
conditions   contained   in   Sections   4.2(i)   and  (ii)  have  been
satisfied.   Any  Lender  may  require  a  duly  completed   compliance
certificate  in  substantially  the form of Exhibit B as a condition to
making an Advance.

                              ARTICLE V

                   REPRESENTATIONS AND WARRANTIES

      The Borrower represents and warrants to the Lenders that:

      5.1. Existence  and  Standing.  Each  of  the  Borrower  and  its
Subsidiaries   is  a   corporation,   partnership   (in  the   case  of
Subsidiaries  only) or  limited  liability  company  duly and  properly
incorporated  or organized,  as the case may be,  validly  existing and
(to the extent such concept  applies to such  entity) in good  standing
under the laws of its  jurisdiction  of  incorporation  or organization
and has  all  requisite  authority  to  conduct  its  business  in each
jurisdiction  in  which  its  business  is  conducted,  except  in such
jurisdictions  where failure to obtain said authority  would not have a
Material Adverse Effect.

      5.2. Authorization  and Validity.  The Borrower,  each Subsidiary
and  Parent  have the power and  authority  and legal  right to execute
and  deliver  the  Loan  Documents  to which  they  are a party  and to
perform  their  obligations  thereunder.  The execution and delivery by
the  Borrower,  each  Subsidiary  and Parent of the Loan  Documents  to
which  they  are  a  party  and  the  performance  of  its  obligations
thereunder have been duly authorized by proper  corporate  proceedings,
and the Loan Documents to which the Borrower,  each  Subsidiary and the
Parent is a party constitute  legal,  valid and binding  obligations of
the  Borrower,  each  Subsidiary  and Parent  enforceable  against  the
Borrower,  each  Subsidiary  and the  Parent in  accordance  with their
terms,   except  as  enforceability   may  be  limited  by  bankruptcy,
insolvency  or similar laws  affecting  the  enforcement  of creditors'
rights  generally  and subject  also to the  availability  of equitable
remedies if equitable remedies are sought.

      5.3. No Conflict;  Government Consent.  Neither the execution and
delivery  by the  Borrower,  each  Subsidiary  or  Parent  of the  Loan
Documents  to  which  it  is a  party,  nor  the  consummation  of  the
transactions therein  contemplated,  nor compliance with the provisions
thereof  will violate  (i) any  law,  rule,  regulation,  order,  writ,
judgment,  injunction,  decree or award  binding on the Borrower or any
of its  Subsidiaries  or Parent,  or (ii) the  Borrower's,  Parent's or
any   Subsidiary's    articles   or   certificate   of   incorporation,
partnership   agreement,   certificate  of  partnership,   articles  or
certificate   of   organization,   by-laws,   or   operating  or  other
management  agreement,  as the case may be, or (iii) the  provisions of
any  indenture,  instrument  or  agreement to which the Borrower or any
of its  Subsidiaries  or Parent is a party or is  subject,  or by which
it, or its  Property,  is  bound,  or  conflict  with or  constitute  a
default  thereunder,   or  result  in,  or  require,  the  creation  or
imposition  of any Lien in, of or on the  Property of the Borrower or a
Subsidiary  or  Parent  pursuant  to the  terms of any such  indenture,
instrument or agreement.  No order,  consent,  adjudication,  approval,
license,  authorization,  or  validation  of, or filing,  recording  or
registration  with,  or exemption by, or other action in respect of any
governmental or public body or authority,  or any subdivision  thereof,
which  has  not  been   obtained   by  the   Borrower  or  any  of  its
Subsidiaries  or Parent,  is required to be obtained by the Borrower or
<PAGE>

any of its  Subsidiaries  or Parent in  connection  with the  execution
and  delivery  of  the  Loan  Documents,   the  borrowings  under  this
Agreement,   the  payment  and  performance  by  the  Borrower  of  the
Obligations   or   the   legality,    validity,   binding   effect   or
enforceability of any of the Loan Documents.

      5.4. Financial  Statements.   The  April  30,  1998  consolidated
financial  statements of the Borrower and its  Subsidiaries  heretofore
delivered to the Lenders were  prepared in  accordance  with  generally
accepted  accounting  principles in effect on the date such  statements
were prepared and fairly present the consolidated  financial  condition
and  operations of the Borrower and its  Subsidiaries  at such date and
the  consolidated  results  of their  operations  for the  period  then
ended.

      5.5. Material  Adverse  Change.  Since May 1, 1998 there has been
no change in the business,  Property,  prospects,  condition (financial
or  otherwise)  or  results  of  operations  of the  Borrower  and  its
Subsidiaries  which  could  reasonably  be  expected to have a Material
Adverse  Effect.  Parent has  disclosed  to Agent and  Lenders  that it
anticipates  the  possibility  of  divesting   itself  of  one  of  its
wholly-owned  subsidiaries  to-wit AMREP Southwest Inc.  ("Southwest").
Agent and Lenders  acknowledge  that (i) the  execution  of the present
Agreement  creates no security  interest in their favor in any stock or
assets of  Southwest,  (ii) that they have no  objection to and consent
to said divestiture by Parent,  and (iii) that said  divestiture  shall
not be  deemed  to be an event  which  would  have a  Material  Adverse
Effect under this Agreement on Borrower or Parent.

      5.6. Taxes.  The  Parent,  Borrower  and  its  Subsidiaries  have
filed all United  States  federal tax returns and all other tax returns
which are  required  to be filed  and have paid all taxes due  pursuant
to said returns or pursuant to any  assessment  received by the Parent,
Borrower or any of its  Subsidiaries,  except  such  taxes,  if any, as
are being  contested  in good faith and as to which  adequate  reserves
have been provided in accordance with Agreement  Accounting  Principles
and  as to  which  no  Lien  exists.  The  consolidated  United  States
income tax  returns of the group  including  Parent,  Borrower  and its
United States  Subsidiaries  have been audited by the Internal  Revenue
Service  through  the  fiscal  year ended  December  31,  1989.  No tax
liens have been filed and no claims  (except as  disclosed  in the most
recent  10-K of the  Parent)  are being  asserted  with  respect to any
such taxes.  The  charges,  accruals  and  reserves on the books of the
Borrower  and  its  Subsidiaries  in  respect  of any  taxes  or  other
governmental charges are adequate.

      5.7. Litigation   and   Contingent   Obligations.   There  is  no
litigation,  arbitration,  governmental  investigation,  proceeding  or
inquiry  pending  or,  to  the  knowledge  of any  of  their  officers,
threatened   against  or   affecting   the   Borrower  or  any  of  its
Subsidiaries  or Parent  which could  reasonably  be expected to have a
Material  Adverse  Effect or which  seeks to  prevent,  enjoin or delay
the  making of any  Loans.  Other than any  liability  incident  to any
litigation,  arbitration  or proceeding  which could not  reasonably be
expected  to  have a  Material  Adverse  Effect,  the  Borrower  has no
material  contingent  obligations  not provided for or disclosed in the
financial statements referred to in Section 5.4.

      5.8. Subsidiaries.  Schedule 1 contains an  accurate  list of all
Subsidiaries  of  the  Borrower  as of  the  date  of  this  Agreement,
setting forth their  respective  jurisdictions  of organization and the
percentage  of  their  respective  capital  stock  or  other  ownership
interests  owned  by the  Borrower  or other  Subsidiaries.  All of the
issued  and  outstanding  shares of  capital  stock or other  ownership
<PAGE>

interests of such  Subsidiaries  have been (to the extent such concepts
are  relevant   with  respect  to  such   ownership   interests)   duly
authorized and issued and are fully paid and non-assessable.

      5.9. ERISA.  The  Unfunded  Liabilities  of all  Single  Employer
Plans  do  not  in  the  aggregate  exceed  $100,000.00.   Neither  the
Borrower  nor any other member of the  Controlled  Group is a member of
any  Multiemployer  Plans.  Each Plan complies in all material respects
with  all  applicable   requirements   of  law  and   regulations,   no
Reportable  Event has occurred  with  respect to any Plan,  neither the
Borrower nor any other  member of the  Controlled  Group has  withdrawn
from  any Plan or  initiated  steps to do so,  and no steps  have  been
taken to reorganize or terminate any Plan.

      5.10. Accuracy of Information.  No information, exhibit or report
furnished by the Borrower or any of its  Subsidiaries  or Parent to the
Agent or to any  Lender  in  connection  with the  negotiation  of,  or
compliance   with,   the  Loan   Documents   contained   any   material
misstatement  of fact or omitted  to state a material  fact or any fact
necessary to make the statements contained therein not misleading.

      5.11. Regulation  U.  Margin  stock (as defined in Regulation  U)
constitutes  less  than  25%  of  the  value  of  those  assets  of the
Borrower and its  Subsidiaries  which are subject to any  limitation on
sale, pledge, or other restriction hereunder.

      5.12. Material   Agreements.   Neither  the   Borrower   nor  any
Subsidiary  nor Parent is a party to any  agreement  or  instrument  or
subject  to any  charter or other  corporate  restriction  which  could
reasonably  be  expected  to have a Material  Adverse  Effect.  Neither
the  Borrower  nor any  Subsidiary  nor  Parent  is in  default  in the
performance,  observance  or  fulfillment  of any  of the  obligations,
covenants or  conditions  contained in (i) any agreement to which it is
a  party,  which  default  could  reasonably  be  expected  to  have  a
Material   Adverse   Effect  or  (ii)  any   agreement  or   instrument
evidencing or governing Indebtedness.

      5.13. Compliance With Laws.  The  Borrower  and its  Subsidiaries
have  complied  with  all  applicable  statutes,   rules,  regulations,
orders and  restrictions  of any domestic or foreign  government or any
instrumentality   or  agency  thereof  having   jurisdiction  over  the
conduct  of  their  respective  businesses  or the  ownership  of their
respective  Property  except for any  failure to comply with any of the
foregoing  which  could not  reasonably  be expected to have a Material
Adverse Effect.

      5.14. Ownership of  Properties.  Except as set forth on  Schedule
2, on the date of this  Agreement,  the Borrower  and its  Subsidiaries
will have good title,  free of all Liens other than those  permitted by
Section  6.15,  to all of the  Property  and  assets  reflected  in the
Borrower's most recent  consolidated  financial  statements provided to
the Agent as owned by the Borrower and its Subsidiaries.

      5.15. Plan Assets; Prohibited  Transactions.  The Borrower is not
an  entity  deemed to hold  "plan  assets"  within  the  meaning  of 29
C.F.R. Subsection 2510.3-101 of an employee benefit plan (as defined in
Section  3(3) of  ERISA)  which is  subject  to Title I of ERISA or any
plan  (within  the  meaning of Section  4975 of the Code),  and neither
the  execution  of this  Agreement  nor the  making of Loans  hereunder
gives rise to a  prohibited  transaction  within the meaning of Section
406 of ERISA or Section 4975 of the Code.
<PAGE>

      5.16. Environmental  Matters.  In  the  ordinary  course  of  its
business,   the  officers  of  the  Borrower  consider  the  effect  of
Environmental   Laws  on  the   business  of  the   Borrower   and  its
Subsidiaries,  in the  course  of  which  they  identify  and  evaluate
potential  risks  and  liabilities  accruing  to  the  Borrower  due to
Environmental  Laws. On the basis of this  consideration,  the Borrower
has concluded  that  Environmental  Laws cannot  reasonably be expected
to  have a  Material  Adverse  Effect.  Neither  the  Borrower  nor any
Subsidiary  has received  any notice to the effect that its  operations
are  not  in  material  compliance  with  any of  the  requirements  of
applicable  Environmental  Laws or are the  subject  of any  federal or
state  investigation  evaluating  whether any remedial action is needed
to respond to a release of any toxic or  hazardous  waste or  substance
into the  environment,  which  non-compliance  or remedial action could
reasonably be expected to have a Material Adverse Effect.

      5.17. Investment  Company  Act.  Neither  the  Borrower  nor  any
Subsidiary is an "investment  company" or a company  "controlled" by an
"investment  company",  within the  meaning of the  Investment  Company
Act of 1940, as amended.

      5.18. Public  Utility Holding  Company Act.  Neither the Borrower
nor any  Subsidiary is a "holding  company" or a  "subsidiary  company"
of a "holding  company",  or an "affiliate"  of a "holding  company" or
of a "subsidiary  company" of a "holding  company",  within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

      5.19. Subordinated  Indebtedness.   The  Obligations   constitute
senior   indebtedness   which  is  entitled  to  the  benefits  of  the
subordination provisions of all outstanding Subordinated Indebtedness.

      5.20. Post-Retirement  Benefits.   The   present   value  of  the
expected  cost  of  post-retirement   medical  and  insurance  benefits
payable by the  Borrower  and its  Subsidiaries  to its  employees  and
former  employees,  as  estimated by the  Borrower in  accordance  with
procedures and assumptions  deemed  reasonable by the Required Lenders,
does not exceed $100,000.00.

      5.21. Insurance.  The certificate  signed  by  the  President  or
Chief  Financial   Officer  of  the  Borrower,   that  attests  to  the
existence  and adequacy of, and  summarizes,  the property and casualty
insurance  program  carried by the Borrower  with respect to itself and
its  Subsidiaries  and that has been  furnished  by the Borrower to the
Agent  and  the  Lenders,  is  complete  and  accurate.   This  summary
includes  the  insurer's  or  insurers'   name(s),   policy  number(s),
expiration  date(s),   amount(s)  of  coverage,  type(s)  of  coverage,
exclusion(s),  and  deductibles.  This  summary also  includes  similar
information,    and   describes   any   reserves,   relating   to   any
self-insurance program that is in effect.

      5.22. Solvency.  (i) Immediately  after the  consummation  of the
transactions  to occur on the date  hereof  and  immediately  following
the  making of each  Loan,  if any,  made on the date  hereof and after
giving  effect to the  application  of the proceeds of such Loans,  (a)
the fair value of the assets of the  Borrower and its  Subsidiaries  on
a consolidated  basis, at a fair  valuation,  will exceed the debts and
liabilities,  subordinated,  contingent or  otherwise,  of the Borrower
and its  Subsidiaries  on a  consolidated  basis;  (b) the present fair
saleable  value of the property of the  Borrower  and its  Subsidiaries
on a  consolidated  basis will be greater  than the amount that will be
required  to pay  the  probable  liability  of  the  Borrower  and  its
<PAGE>

Subsidiaries  on  a  consolidated   basis  on  their  debts  and  other
liabilities,  subordinated,  contingent or otherwise, as such debts and
other  liabilities  become  absolute and matured;  (c) the Borrower and
its  Subsidiaries  on a  consolidated  basis  will be able to pay their
debts and liabilities,  subordinated,  contingent or otherwise, as such
debts  and  liabilities  become  absolute  and  matured;  and  (d)  the
Borrower and its  Subsidiaries  on a  consolidated  basis will not have
unreasonably  small  capital  with which to conduct the  businesses  in
which they are engaged as such  businesses  are now  conducted  and are
proposed to be conducted after the date hereof.

      (ii) The  Borrower  does not  intend  to, or to permit any of its
Subsidiaries   to,  and  does  not  believe  that  it  or  any  of  its
Subsidiaries  will,  incur  debts  beyond its ability to pay such debts
as they  mature,  taking into account the timing of and amounts of cash
to be  received  by it or any such  Subsidiary  and the  timing  of the
amounts of cash to be payable on or in respect of its  Indebtedness  or
the Indebtedness of any such Subsidiary.

                              ARTICLE VI

                              COVENANTS

      During the term of this  Agreement,  unless the Required  Lenders
shall otherwise consent in writing:

      6.1. Financial and Other  Reporting.  The Borrower will maintain,
for  itself and each  Subsidiary,  a system of  accounting  established
and  administered  in accordance  with  generally  accepted  accounting
principles, and furnish to the Lenders:

   (i)     Within ten (10) days  after the  Parent  files its Form 10-K
           with the Securities and Exchange  Commission but in no event
           later than one hundred  fifteen  (115) days after the end of
           each fiscal  year,  unaudited  financial  statements  of the
           Borrower and its Subsidiaries,  accompanied by: (a) an audit
           opinion  from  Borrower's   independent   Certified   Public
           Accountant  ("Accountant")  on the  Accounts of the Borrower
           and its Subsidiaries;  (b) a consolidating report that shows
           the   financial   statements   of  the   Borrower   and  its
           Subsidiaries and the financial  statements of the Parent and
           its   Subsidiaries   (other  than  the   Borrower   and  its
           Subsidiaries);  and (c) a  letter  addressed  to the  Lender
           from the  Accountants  stating  that they have no  knowledge
           that anything has occurred which constitutes,  or which with
           the  passage  of time or  service  of notice  or both  would
           constitute,  a Default  under  this  Agreement  or any other
           agreement  between the Borrower.  its  Subsidiaries,  Parent
           and the  Lender or stating  that such an event has  occurred
           and specifying  each such event,  all as of the close of the
           fiscal year with  respect to which the  financial  statement
           has been prepared.

  (ii)     Within  twenty (25) days after the end of each month of each
           fiscal year of Borrower,  the Borrower will supply the Agent
           with  interim  financial  statements  signed by a  financial
           officer of the Borrower  reflecting the financial  condition
<PAGE>

           of the Borrower and its  Subsidiaries  as of the end of such
           month and the results of the  operations of the Borrower and
           its Subsidiaries since the beginning of the fiscal year.

 (iii)     The  annual  financial   statements  provided  for  in  this
           Article shall be accompanied by a certificate  signed by the
           Chairman of the Board,  the  President or an Executive  Vice
           President  of the  Borrower  stating  that a  review  of the
           activities  of the  Borrower  and its  Subsidiaries  and the
           Parent   during   such   period  has  been  made  under  the
           supervision  of such  individual  with a view to determining
           that  the  Borrower,   its   Subsidiaries  and  Parent  have
           observed,  performed and  fulfilled  all of its  obligations
           under this Agreement and the other Loan Documents,  and that
           to the best of such  individual's  knowledge,  no event  has
           occurred  which  constitutes,  or which with the  passage of
           time or  service  of  notice  or  both  would  constitute  a
           Default,  or  stating  that such an event has  occurred  and
           specifying   each   such   event.   The   annual   financial
           statements of the Borrower  shall also be  accompanied  by a
           certificate in the form attached  hereto as Exhibit F signed
           by the Chairman of the Board,  the  President,  an Executive
           Vice President or the Treasurer of the Borrower.

  (iv)     Within  three (3)  Business  Days after the Parent files its
           Form 10-K with the  Securities  and Exchange  Commission but
           in no event  later  than one  hundred  five (105) days after
           the close of each  fiscal  year,  a copy of such Form  10-K.
           In addition,  upon their becoming  available,  copies of all
           regular and periodic reports,  if any, which the Borrower or
           any of  its  Subsidiaries  or  the  Parent  files  with  the
           Securities  and  Exchange  Commission  or  any  governmental
           agency or agencies substituted  therefor,  or any similar or
           corresponding  governmental department,  commission,  board,
           bureau  or  agency,   domestic  or  foreign,   or  with  any
           securities exchange;  and with copies of all reports,  proxy
           statements  and  financial  statements  delivered or sent by
           the  Borrower  or any of its  Subsidiaries  or the Parent to
           its stockholders.

   (v)     Together  with  the  financial   statements  required  under
           Sections  6.1(i)  and  (ii),  a  compliance  certificate  in
           substantially  the form of  Exhibit  B signed  by its  chief
           financial  officer  showing the  calculations  necessary  to
           determine  compliance  with this  Agreement and stating that
           no Default or Unmatured  Default  exists,  or if any Default
           or Unmatured  Default exists,  stating the nature and status
           thereof.

  (vi)     Within  270 days  after the  close of each  fiscal  year,  a
           statement  of  the  Unfunded   Liabilities  of  each  Single
           Employer Plan,  certified as correct by an actuary  enrolled
           under ERISA.

 (vii)     As soon as  possible  and in any event  within 10 days after
           the Borrower  knows that any  Reportable  Event has occurred
           with respect to any Plan,  a statement,  signed by the chief
           financial   officer  of  the   Borrower,   describing   said
           Reportable Event and the action which the Borrower  proposes
           to take with respect thereto.
<PAGE>

(viii)     As soon as  possible  and in any event  within 10 days after
           receipt by the  Borrower,  a copy of (a) any notice or claim
           to the effect that the  Borrower or any of its  Subsidiaries
           is or may  be  liable  to  any  Person  as a  result  of the
           release by the  Borrower,  any of its  Subsidiaries,  or any
           other  Person of any toxic or  hazardous  waste or substance
           into  the  environment,  and (b)  any  notice  alleging  any
           violation  of any  federal,  state or  local  environmental,
           health or safety law or  regulation  by the  Borrower or any
           of its Subsidiaries.

  (ix)     Within  twenty-five  (25) days  after the end of each  month
           during  the  term  of this  Agreement,  the  Borrower  shall
           complete  and  deliver  to the  Agent a  monthly  Compliance
           Certificate ("Compliance  Certificate") in the form attached
           hereto as Exhibit G.

   (x)     Within  twenty-five  (25) days  after the end of each  month
           during  the  term  of this  Agreement,  the  Borrower  shall
           complete  and  deliver  to the  Agent a  Monthly  Collateral
           Report  ("Monthly  Collateral  Report") in the form attached
           hereto as Exhibit H.

  (xi)     On or before  the third  (3rd)  Business  Day of each  month
           during  the  term  of this  Agreement,  the  Borrower  shall
           complete and deliver to the Agent an Actual  Collections and
           Estimated  Net  Billing  Report  ("Actual   Collections  and
           Estimated Net Billing  Report") in the form attached  hereto
           as Exhibit I. Among  other  things,  the Actual  Collections
           and   Estimated   Net  Billing   Report  will  indicate  the
           estimated  net  billings  of the  Borrower  for the  current
           month  on  the   basis  of  the  "on  sale   date"  of  each
           publication  and such  net  billings  will  then be added to
           "net  account  receivables"  for the  immediately  preceding
           month.

 (xii)     In no event later than one hundred  fifteen (115) days after
           the end of  each  fiscal  year,  financial  projections  for
           Borrower  and its  Subsidiaries  for the  subsequent  fiscal
           year in a form and content reasonably acceptable to Agent.

(xiii)     Such    other    information    (including     non-financial
           information)  as the  Agent or any  Lender  may from time to
           time reasonably request.

      6.2. Use of  Proceeds.  The  Borrower  will,  and will cause each
Subsidiary  to, use the proceeds of the  Advances  for working  capital
purposes only,  and to repay  outstanding  Advances.  The Borrower will
not, nor will it permit any  Subsidiary  to, use any of the proceeds of
the  Advances to  purchase  or carry any "margin  stock" (as defined in
Regulation  U).  Borrower  shall also be entitled to disburse  portions
of any  Advance  to its  Subsidiaries  as  described  in  Section  6.22
hereof.

      6.3. Notice of Default.  The Borrower  will,  and will cause each
Subsidiary  to,  give  prompt  notice in writing to the  Lenders of the
occurrence  of any  Default  or  Unmatured  Default  and  of any  other
development,   financial  or  otherwise,   which  could  reasonably  be
expected to have a Material Adverse Effect.
<PAGE>

      6.4. Conduct  of  Business.  The  Borrower  will,  and will cause
each   Subsidiary   to,   carry  on  and   conduct   its   business  in
substantially  the same manner and in substantially  the same fields of
enterprise  as it is presently  conducted  and do all things  necessary
to remain duly  incorporated  or  organized,  validly  existing and (to
the extent such concept  applies to such entity) in good  standing as a
domestic  corporation,  partnership or limited liability company in its
jurisdiction  of  incorporation  or  organization,  as the case may be,
and  maintain all  requisite  authority to conduct its business in each
jurisdiction in which its business is conducted.

      6.5. Taxes.  The Borrower and each United States  Subsidiary will
be included  in a timely  filed  complete  and  correct  United  States
consolidated   federal  income  tax  return  filed  by  the  Parent  of
Borrower and Borrower will,  and will cause each  Subsidiary to, timely
file  complete  and  correct  applicable  foreign,  state and local tax
returns  required  by law and pay when due all taxes,  assessments  and
governmental  charges  and  levies  upon it or its  income,  profits or
Property,  except  those  which are being  contested  in good  faith by
appropriate  proceedings  and with respect to which  adequate  reserves
have  been  set  aside  in   accordance   with   Agreement   Accounting
Principles.

      6.6. Insurance.   The   Borrower   will,   and  will  cause  each
Subsidiary   to,   maintain  with   financially   sound  and  reputable
insurance  companies  insurance  on all their  Property in such amounts
and  covering  such  risks  as  is  consistent   with  sound   business
practice,  and the  Borrower  will  furnish to any Lender upon  request
full information as to the insurance carried.

      6.7. Compliance  with Laws.  The  Borrower  will,  and will cause
each Subsidiary to, comply with all laws, rules,  regulations,  orders,
writs,  judgments,  injunctions,  decrees  or awards to which it may be
subject including, without limitation, all Environmental Laws.

      6.8. Maintenance  of  Properties.  The  Borrower  will,  and will
cause  each  Subsidiary  to,  do  all  things  necessary  to  maintain,
preserve,  protect and keep its Property in good repair,  working order
and  condition,  and make all  necessary and proper  repairs,  renewals
and  replacements  so  that  its  business  carried  on  in  connection
therewith may be properly conducted at all times.

      6.9. Inspection.   The  Borrower   will,   and  will  cause  each
Subsidiary  to, permit the Agent and the Lenders,  by their  respective
representatives  and agents, to inspect any of the Property,  books and
financial  records of the Borrower and each Subsidiary,  to examine and
make copies of the books of  accounts  and other  financial  records of
the  Borrower  and  each  Subsidiary,   and  to  discuss  the  affairs,
finances and accounts of the Borrower  and each  Subsidiary  with,  and
to be  advised as to the same by,  their  respective  officers  at such
reasonable  times  and  intervals  as  the  Agent  or  any  Lender  may
designate.

      6.10.Dividends.  The  Borrower  will not,  nor will it permit any
Subsidiary to,  declare or pay any dividends or make any  distributions
on its capital stock (other than  dividends  payable in its own capital
stock) or  redeem,  repurchase  or  otherwise  acquire or retire any of
its capital stock at any time  outstanding,  except that any Subsidiary
may declare and pay  dividends  or make  distributions  to the Borrower
or to a Wholly-Owned Subsidiary;  provided,  however, that the Borrower
(a) may  pay to the  Parent  on a  quarterly  basis  an  amount  not to
exceed fifty percent (50%) of the  Borrower's  Consolidated  Net Income
after provision for income taxes for the preceding  fiscal quarter,  as
shown on the Borrower's financial statements,  provided,  however, that
at the  end  of  any  fiscal  year  the  aggregate  of  such  quarterly
payments  shall  not  exceed  fifty  percent  (50%)  of the  Borrower's
<PAGE>

Consolidated  Net Income  after  provision  for  income  taxes for such
fiscal year and (b) may pay to Parent on an estimated  quarterly  basis
an amount not to exceed (x) Borrower's  Consolidated  Net Income before
provision  for  income  taxes  for  such  period  times  (y)  the  then
applicable  federal statutory  corporate income tax rate.  Irrespective
of the foregoing,  no dividends  shall be paid to the Parent under this
Section 6.10  unless  the  Borrower  is in  compliance  with all of the
covenants  contained in this  Agreement,  nor may any dividends be paid
if there is  existing a Default  or an  Unmatured  Default,  or if said
payment of dividends would cause a Default.

      6.11. Indebtedness. The  Borrower  will  not,  nor will it permit
any Subsidiary to, create,  incur or suffer to exist any  Indebtedness,
except:

   (i)     The Loans, and

  (ii)     Indebtedness  not to exceed an outstanding  amount in excess
           of the amount as set forth in Schedule 2, and

 (iii)     In  addition  to the  Indebtedness  described  in  6.11(ii),
secured and  unsecured  Indebtedness  of all  Borrowing  Entities in an
amount not to exceed  outstanding  at any time  during the term of this
Agreement  Six  Million  and  No/100  Dollars  ($6,000,000.00)  in  the
aggregate  for all  Borrowing  Entities  owing to any Party  other than
Lenders and inter-company Indebtedness.

      6.12. Merger.  The  Borrower will  not,  nor will it  permit  any
Subsidiary  to,  merge or  consolidate  with or into any other  Person,
except   that  a   Subsidiary   may  merge  into  the   Borrower  or  a
Wholly-Owned Subsidiary.

      6.13. Sale of Assets.  The  Borrower will not, nor will it permit
any  Subsidiary  to, lease,  sell or otherwise  dispose of its Property
to any other Person, except:

   (i)     Sales of inventory in the ordinary course of business.

  (ii)     Leases,  sales or other  dispositions  of its Property that,
           together  with all other  Property of the  Borrower  and its
           Subsidiaries  previously leased,  sold or disposed of (other
           than  inventory  in the  ordinary  course  of  business)  as
           permitted by this  Section  during the  twelve-month  period
           ending  with  the  month in which  any such  lease,  sale or
           other  disposition  occurs,  do not constitute a Substantial
           Portion   of  the   Property   of  the   Borrower   and  its
           Subsidiaries.

      6.14. Investments  and  Acquisitions.  The Borrower will not, nor
will  it  permit  any  Subsidiary  to,  make or  suffer  to  exist  any
Investments  (including without limitation,  loans and advances to, and
other Investments in,  Subsidiaries),  or commitments  therefor,  or to
<PAGE>

create  any  Subsidiary  or to  become  or  remain  a  partner  in  any
partnership  or  joint  venture,  or to  make  any  Acquisition  of any
Person, except:

   (i)     Cash Equivalent Investments;

  (ii)     Existing  Investments in Subsidiaries and other  Investments
           in existence on the date hereof and described in Schedule 1;

 (iii)     Loans or advances to  employees  not  exceeding  $100,000 in
           the aggregate outstanding;

  (iv)     Loans from Borrower to its Subsidiaries  pursuant to Section
           6.22 hereof;

   (v)     Acquisitions  which  in  the  aggregate  do not  exceed  the
           expenditure  of an amount in excess of  $3,000,000.00  on an
           annual basis,  provided following said Acquisitions Borrower
           and its  Subsidiaries  are still in compliance  with all the
           Financial Covenants described in Section 6.24 hereof;

  (vi)     Advances  to  publishers  in  the  ordinary  course  of  the
           Borrower's business;

 (vii)     Loans to  publishers  evidenced  by  promissory  notes which
           shall bear  interest  on the unpaid  principal  balance  but
           which shall not exceed One  Million  Five  Hundred  Thousand
           Dollars ($1,500,000.00) in the aggregate; and

(viii)     Loans or advances to the Parent not exceeding  $5,400,000.00
           in the aggregate at any time.

      6.15. Liens.  The Borrower  will  not,  nor  will it  permit  any
Subsidiary  to,  create,  incur,  or suffer to exist any Lien in, of or
on the Property of the Borrower or any of its Subsidiaries, except:

   (i)     Liens for  taxes,  assessments  or  governmental  charges or
           levies on its  Property if the same shall not at the time be
           delinquent or  thereafter  can be paid without  penalty,  or
           are  being  contested  in  good  faith  and  by  appropriate
           proceedings  and for which  adequate  reserves in accordance
           with  Agreement  Accounting  Principles  shall have been set
           aside on its books.

  (ii)     Liens imposed by law, such as carriers',  warehousemen's and
           mechanics'  liens and other  similar  liens  arising  in the
           ordinary   course  of  business   which  secure  payment  of
           obligations  not more  than 60 days  past  due or which  are
           being  contested  in good faith by  appropriate  proceedings
           and for which  adequate  reserves  shall have been set aside
           on its books.

 (iii)     Liens  arising  out of pledges or  deposits  under  worker's
           compensation   laws,   unemployment   insurance,   old   age
           pensions,  or other social security or retirement  benefits,
           or similar legislation.
<PAGE>

  (iv)     Utility  easements,  building  restrictions  and such  other
           encumbrances  or charges  against real  property as are of a
           nature  generally  existing  with respect to properties of a
           similar  character  and  which  do not in any  material  way
           affect the  marketability  of the same or interfere with the
           use  thereof  in  the   business  of  the  Borrower  or  its
           Subsidiaries.

   (v)     (a) Liens  existing  on the date  hereof  and  described  in
           Schedule  2  together  with  any  future  Liens  on the same
           property  described  in  Schedule  2 and also  (b)  Purchase
           Money Liens  ("Purchase  Money Liens")  placed on additional
           property  purchased  after the date hereof provided that (x)
           in  connection  with  Purchase  Money Liens (i) no such Lien
           shall extend to any property  other than the property at the
           time being purchased and (ii) the  Indebtedness  incurred in
           connection  with said Lien does not  exceed  ninety  percent
           (90%) of the Purchase  Price of the property  being acquired
           unless Agent consents,  in writing,  to a higher  percentage
           and  (y)  the  total  Indebtedness   secured  by  the  Liens
           described  in (a) and (b) hereof  does not exceed the sum of
           the  aggregate  total  amount  of   Indebtedness   shown  on
           Schedule   2   plus   Six   Million   and   No/100   Dollars
           ($6,000,000.00).

  (vi)     Liens  in  favor  of  the  Agent,  for  the  benefit  of the
           Lenders, granted pursuant to any Collateral Document.

 (vii)     Security   interests   in   favor   of   American   securing
           Indebtedness   incurred  prior  to  the  execution  of  this
           Agreement  and which are to be released  upon the funding of
           the first Advance hereunder.

      6.16. Capital  Expenditures.  The Borrower  will not, nor will it
permit any  Subsidiary  to,  expend,  or be  committed  to  expend,  in
excess  of  $4,000,000.00  for  Capital  Expenditures  during  any  one
fiscal  year  on a  non-cumulative  basis  in  the  aggregate  for  the
Borrower and its Subsidiaries.

      6.17. Affiliates.  The Borrower will not, and will not permit any
Subsidiary  to,  enter  into  any   transaction   (including,   without
limitation,  the purchase or sale of any Property or service)  with, or
make any payment or transfer to, any  Affiliate  except in the ordinary
course of business and pursuant to the reasonable  requirements  of the
Borrower's or such  Subsidiary's  business and upon fair and reasonable
terms no less  favorable  to the Borrower or such  Subsidiary  than the
Borrower or such  Subsidiary  would obtain in a comparable  arms-length
transaction.

      6.18. Subordinated  Indebtedness. The Borrower will not, and will
not permit any  Subsidiary  to, make any amendment or  modification  to
the  indenture,  note or other  agreement  evidencing  or governing any
Subordinated  Indebtedness,   or  directly  or  indirectly  voluntarily
prepay,  defease or in substance defease,  purchase,  redeem, retire or
otherwise acquire, any Subordinated Indebtedness.

      6.19. Other  Agreements.  The  Borrower  will  not, and  will not
permit its  Subsidiaries  to, enter into or acquiesce in any  agreement
which limits or restricts  the right of the Borrower or any  Subsidiary
to comply with the  provisions  of this  Agreement  or which  limits or
<PAGE>

restricts  the  rights of the  Borrower  or any  Subsidiary  and/or the
Agent,  as assignee  for the ratable  benefit of the Lender,  under any
promissory  note from the Parent under  Section 6.14 or which limits or
restricts  the  rights  of the  Parent  to  comply  with any  guarantee
delivered or given pursuant hereto.

      6.20. Disposition of  Indebtedness  of Subsidiary or Parent.  The
Borrower will not sell, assign,  pledge,  transfer or otherwise dispose
of  or  encumber,   except  as  permitted   by  this   Agreement,   any
indebtedness  owing  to it from  any of its  Subsidiaries  or from  the
Parent.

     6.21.  Business  Activities.  The  Borrower  will not engage in any
type of business  except  the  businesses  in which it was  engaged  on 
April 30,  1998, including,  without  limitation,  the distribution of 
paperbacks,  magazines and related products;  product,  order and 
subscription  processing and fulfillment; customer  service; 
telemarketing and related  services.  However,  Borrower may become 
engaged in the publishing  business if such business does not at any time
account for greater than ten percent (10%) of  Borrower's  revenues on
an annual basis.

      6.22. Availability  of Revolving  Loan Advances to  Fulfillment, 
Export,  Canada and  International.  Borrower agrees that as additional
consideration  for  Fulfillment,   Export,   Canada  and  International
executing and delivering the  Fulfillment  Security  Agreement,  Export
Security   Agreement,   Canada  Security  Agreement  and  International
Security  Agreement and the Subsidiary  Guaranties that Borrower shall,
when requested by Fulfillment,  Export,  Canada or International,  make
available  and loan to Export,  Fulfillment,  Canada and  International
portions of the Advances  relating to the Revolving  Loan to be used by
Export,  Fulfillment,  Canada and  International  for  working  capital
purposes.  Borrower shall keep accurate  books and records  relating to
all of said loans to  Export,  Fulfillment,  Canada  and  International
and  shall,  if  requested  by Agent,  supply to Agent all  information
relating  to same.  Borrower  hereby  accepts  the grant of a  security
interest  in  all  the  assets  of  Fulfillment,   Export,  Canada  and
International  as set forth in the  acknowledgement  signed by  Export,
Fulfillment,   Canada  and   International   attached   hereto  and  by
Borrower's  execution  hereof assigns same together with all loans made
in  connection  therewith  to  Agent  for the  ratable  benefit  of all
Lenders to further secure the repayment of the Obligations.

      6.23. Loans or Advances to Parent and  Subsidiary.  The  Borrower
will  cooperate  with the Lenders in enforcing any and all  obligations
of the Parent and any  Subsidiary to the Borrower  pursuant to loans or
advances  made to the  Parent  or any  Subsidiary  in  accordance  with
Section 6.14  and in  ensuring  that the  Parent  and  each  Subsidiary
comply  with  any and all  covenants  and  warranties  entered  into in
connection with such loans or advances.

      6.24. Financial Covenants.

           6.24.1.  Consolidated  Current Ratio.  The Borrower will, at
      all times,  maintain  a  Consolidated  Current  Ratio of not less
      than 1.00 to 1.00.

           6.24.2.   Consolidated  Cash  Flow  Coverage.  The  Borrower
      will  from the  fiscal  quarter  beginning  May,  1998 and at all
      times  thereafter  maintain  a  Consolidated  Cash Flow  Coverage
<PAGE>

      Ratio,  measured at the end of each fiscal quarter  calculated by
      taking the sum of the  numerators of the  Consolidated  Cash Flow
      Coverage  Ratio  for  the  fiscal  quarter  then  ending  and the
      immediately  three  preceding  fiscal  quarters and dividing such
      amount by the sum of the  denominators of the  Consolidated  Cash
      Flow  Coverage  Ratio for the fiscal  quarter then ending and the
      immediately  three  preceding  fiscal quarters with the resultant
      ratio being not less than 1.00 to 1.00.

           6.24.3.   Consolidated  Tangible  Net  Worth.  The  Borrower
      will,  from the date of this  Agreement  through  April 30,  1999
      maintain  a  Consolidated  Tangible  Net  Worth  of no less  than
      $2,800,000.00.  Thereafter,  as of  the  end of  each  subsequent
      fiscal  year of Borrower  said  Consolidated  Tangible  Net Worth
      must increase by and be maintained  thereafter at an amount equal
      to the prior  year's  Consolidated  Tangible  Net Worth  plus the
      greater  of (x)  $500,000.00  or (y) fifty  percent  (50%) of the
      Consolidated  Net Income of Borrower  for the  applicable  fiscal
      year.

           6.24.4.   Ratio  of   Collections.   The  Borrower  and  its
      Subsidiaries  shall never allow the ratio of (x) the consolidated
      collections  of amounts  relating to all Accounts of Borrower and
      its  Subsidiaries  to (y)  all  outstanding  and  due  and  owing
      Accounts  of  Borrower  and  its  Subsidiaries  to be  less  than
      thirteen percent (13%).

           6.24.5.   Ratio   of   Returns.   The   Borrower   and   its
      Subsidiaries  will  never  allow  the  ratio of (x)  consolidated
      actual  returns,  allowances  and  discounts to (y)  consolidated
      reserves  for  returns to average  less than  sixty-five  percent
      (65%)  for any three (3)  month  period  during  the term of this
      Agreement.

      6.25. Lock Box.  The Borrower shall  establish a lock box account
with the Agent  (herein  called the "Cash  Collateral  Account") in the
Borrower's  name and each  Borrowing  Entity  shall  direct all Account
Debtors to  directly  remit all  payments  on Accounts to same and into
which Cash  Collateral  Account the Borrower and each  Subsidiary  will
immediately  deposit all  payments  constituting  proceeds of Accounts,
whether  in the form of cash or check or some  other  form of  payment.
All  payments  made  to  the  Cash  Collateral  Account  shall  be  the
exclusive  property  of the Agent for the  ratable  benefit  of all the
Lenders  and no  person  other  than the  Agent  shall  have a right of
setoff  against  such  Cash  Collateral  Account.   All  such  payments
received in the Cash  Collateral  Account shall be applied  against the
principal  balance  of the  Revolving  Loan  (a) on the  date  that any
check,  draft or similar  item of payment  has been  honored  and final
settlement  thereof has been  reflected as available to the Agent,  and
(b) in connection  with wire  transfers on the date  received  provided
said wire transfer is received by Agent by 12:00 p.m.  (Chicago  time),
and if received  after 12:00 p.m.  (Chicago  time) on the next Business
Day after receipt.

      The  Borrower,   each  of  its  Subsidiaries  and  any  of  their
Affiliates,  employees,  agents  or  other  persons  acting  for  on in
concert  with the  Borrower  shall  (acting as  trustee  for the Agent)
receive  as the  sole  and  exclusive  property  of the  Agent  for the
ratable  benefit of all Lenders any monies,  checks,  notes,  drafts or
any other payments  relating to and/or  proceeds of Accounts which come
into the  possession  or under  the  control  of the  Borrower  or such
persons.  Immediately  upon  receipt of such  funds,  the  Borrower  or
<PAGE>

such  persons  shall  cause  the  same  to be  deposited  in  the  Cash
Collateral  Account  or  shall  deliver  the  same to the  Agent in the
identical  form in which such item of payment was  received,  provided,
however,  that  the  Borrower  may  deposit  proceeds  in The  Bank  of
Montreal  in  Toronto,  Canada  and Amcore  Bank of Ogle  County in Mt.
Morris,  Illinois  for  clearance  purposes  only,  provided  that such
proceeds are  transmitted to the  Borrower's  Cash  Collateral  Account
from time to time,  but not less  frequently  than  within one (1) week
of deposit at Amcore  Bank of Ogle  County and in  connection  with The
Bank of Montreal,  said transmittals  shall be not less frequently than
when said  deposits  held by said bank  reach an amount of  $100,000.00
or more.  The Borrower  will  indemnify and save harmless the Agent and
all Lenders from and against all  liabilities  and expenses,  including
reasonable  attorneys'  fees on account of any adverse  claim  asserted
against the Agent and all Lenders  relating  to any  proceeds  received
by the Agent from any obligor on any Account  owing to the  Borrower or
its  Subsidiaries,  and such  obligation of the Borrower shall continue
in  effect  after  and   notwithstanding   the   termination   of  this
Agreement, the discharge of the Obligations and the release hereof.

      6.26. Year 2000.  The  Borrower will take all actions  reasonably
necessary  to  assure  that  the  Year  2000  Issues  will  not  have a
Material  Adverse  Effect  on the  business,  operations  or  financial
condition  of  the  Borrower  or  any of  its  Subsidiaries.  Upon  the
Agent's   request,   the  Borrower   will  provide  the  Agent  with  a
description  of  its  plan  to  address  Year  2000  issues,  including
updates and progress  reports.  The  Borrower  will advise the Agent of
any  reasonably  anticipated  Material  Adverse Effect on the business,
operations or financial  condition of the Borrower or its  Subsidiaries
as a result of Year 2000 issues.

                             ARTICLE VII

                              DEFAULTS

      The  occurrence of any one or more of the following  events shall
constitute a Default:

      7.1. Any  representation or warranty made or deemed made by or on
behalf of the  Borrower  or any of its  Subsidiaries  to the Lenders or
the Agent under or in  connection  with this  Agreement,  any Loan,  or
any  certificate  or  information  delivered  in  connection  with this
Agreement or any other Loan Document  shall be materially  false on the
date as of which made.

      7.2. Nonpayment  of principal of any Loan when due, or nonpayment
of  interest  upon  any  Loan  or  of  any   commitment  fee  or  other
obligations  under any of the Loan Documents  within ten days after the
same becomes due.

      7.3. The  breach  by  the   Borrower  of  any  of  the  terms  or
provisions of Article VI.

      7.4. The  breach  by the  Borrower  (other  than a  breach  which
constitutes  a Default  under  another  Section of this Article VII) of
any  of  the  terms  or  provisions  of  this  Agreement  which  is not
remedied  within five days after  written  notice from the Agent or any
Lender.
<PAGE>

      7.5. Failure of the  Borrower or any of its  Subsidiaries  or any
Guarantor  to pay when due any  Indebtedness  aggregating  in excess of
$100,000.00 ("Material  Indebtedness");  or the default by the Borrower
or  any of  its  Subsidiaries  or  any  Guarantor  in  the  performance
(beyond the applicable  grace period with respect  thereto,  if any) of
any term,  provision or  condition  contained  in any  agreement  under
which any such  Material  Indebtedness  was created or is governed,  or
any other  event shall occur or  condition  exist,  the effect of which
default  or event is to cause,  or to permit  the  holder or holders of
such Material  Indebtedness  to cause,  such Material  Indebtedness  to
become due prior to its stated maturity;  or any Material  Indebtedness
of the Borrower or any of its  Subsidiaries  or any Guarantor  shall be
declared   to  be  due  and  payable  or  required  to  be  prepaid  or
repurchased  (other than by a  regularly  scheduled  payment)  prior to
the  stated   maturity   thereof;   or  the  Borrower  or  any  of  its
Subsidiaries  or any  Guarantor  shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.

      7.6. The  Borrower or any of its  Subsidiaries  or any  Guarantor
shall (i) have an order for  relief  entered  with  respect to it under
the Federal  bankruptcy  laws as now or hereafter in effect,  (ii) make
an  assignment  for the benefit of  creditors,  (iii) apply for,  seek,
consent  to,  or  acquiesce   in,  the   appointment   of  a  receiver,
custodian,  trustee,  examiner,  liquidator or similar  official for it
or  any  Substantial  Portion  of  its  Property,  (iv)  institute  any
proceeding  seeking an order for relief  under the  Federal  bankruptcy
laws as now or  hereafter  in  effect or  seeking  to  adjudicate  it a
bankrupt   or   insolvent,   or  seeking   dissolution,   winding   up,
liquidation,  reorganization,  arrangement,  adjustment or  composition
of it or its debts  under any law  relating to  bankruptcy,  insolvency
or  reorganization  or relief of  debtors  or fail to file an answer or
other   pleading   denying  the  material   allegations   of  any  such
proceeding  filed  against it, (v) take any  corporate  or  partnership
action to  authorize or effect any of the  foregoing  actions set forth
in  this  Section  7.6 or (vi)  fail  to  contest  in  good  faith  any
appointment or proceeding described in Section 7.7.

      7.7. Without  the   application,   approval  or  consent  of  the
Borrower  or any of its  Subsidiaries,  or any  Guarantor  a  receiver,
trustee,  examiner,  liquidator or similar  official shall be appointed
for the  Borrower or any of its  Subsidiaries  or any  Guarantor or any
Substantial  Portion of its  Property,  or a  proceeding  described  in
Section  7.6(iv)  shall be  instituted  against the  Borrower or any of
its  Subsidiaries  or any  Guarantor  and  such  appointment  continues
undischarged or such proceeding  continues  undismissed or unstayed for
a period of 30 consecutive days.

      7.8. Any court,  government or governmental agency shall condemn,
seize or otherwise  appropriate,  or take custody or control of, all or
any portion of the  Property of the Borrower  and its  Subsidiaries  or
any Guarantor  which,  when taken  together with all other  Property of
the  Borrower  and its  Subsidiaries  or any  Guarantor  so  condemned,
seized,  appropriated,  or taken  custody  or  control  of,  during the
twelve-month  period  ending  with the month in which  any such  action
occurs, constitutes a Substantial Portion.

      7.9. The  Borrower or any of its  Subsidiaries  shall fail within
30 days to pay,  bond or otherwise  discharge any judgment or order for
the payment of money in excess of  $100,000.00,  which is not stayed on
appeal or otherwise being appropriately contested in good faith.
<PAGE>

      7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the  aggregate  $100,000.00  or any  Reportable  Event  shall
occur in connection with any Plan.

      7.11. The Borrower  or any of its  Subsidiaries  shall (i) be the
subject of any  proceeding or  investigation  pertaining to the release
by the  Borrower,  any of its  Subsidiaries  or any other Person of any
toxic or hazardous  waste or substance  into the  environment,  or (ii)
violate  any  Environmental  Law,  which,  in  the  case  of  an  event
described in clause (i) or clause (ii),  could  reasonably  be expected
to have a Material Adverse Effect.

      7.12. Any Change in Control shall occur.

      7.13. The  occurrence of any  "default",  as  defined in any Loan
Document  (other  than  this  Agreement)  or the  breach  of any of the
terms or provisions of any Loan Document  (other than this  Agreement),
which  default or breach  continues  beyond any period of grace therein
provided.

      7.14. Nonpayment by the Borrower of any Rate  Hedging  Obligation
when due or the  breach  by the  Borrower  of any  term,  provision  or
condition contained in any Rate Hedging Agreement.

      7.15. Any Guaranty or Subsidiary Guaranty shall fail to remain in
full force or effect or any  action  shall be taken to  discontinue  or
to  assert  the  invalidity  or  unenforceability  of any  Guaranty  or
Subsidiary  Guaranty,  or any  Guarantor  shall fail to comply with any
of the terms or provisions  of any Guaranty or  Subsidiary  Guaranty to
which  it is a  party,  or any  Guarantor  shall  deny  that it has any
further  liability  under any Guaranty or Subsidiary  Guaranty to which
it is a party, or shall give notice to such effect.

      7.16. Any Collateral Document shall for any reason fail to create
a  valid  and  perfected  first  priority   security  interest  in  any
collateral  purported  to be covered  thereby,  except as  permitted by
the  terms  of any  Collateral  Document,  or any  Collateral  Document
shall  fail to remain in full  force or effect or any  action  shall be
taken to discontinue  or to assert the  invalidity or  unenforceability
of any  Collateral  Document,  or the Borrower,  Subsidiary of Borrower
or Parent shall fail to comply with any of the terms or  provisions  of
any Collateral Document.

      7.17. The  representations and  warranties  set forth in  Section
5.15 (Plan Assets;  Prohibited  Transactions") shall at any time not be
true and correct.

                             ARTICLE VIII

            ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

      8.1. Acceleration.  If any  Default  described  in Section 7.6 or
7.7  occurs  with  respect  to the  Borrower,  the  obligations  of the
Lenders to make Loans hereunder shall  automatically  terminate and the
Obligations  shall  immediately  become  due and  payable  without  any
election  or  action  on the part of the  Agent or any  Lender.  If any
other  Default  occurs,  the  Required  Lenders  (or the Agent with the
consent  of  the  Required   Lenders)  may  terminate  or  suspend  the
obligations  of the  Lenders to make Loans  hereunder,  or declare  the
<PAGE>

Obligations to be due and payable,  or both,  whereupon the Obligations
shall  become  immediately  due  and  payable,   without   presentment,
demand,  protest  or  notice of any  kind,  all of which  the  Borrower
hereby expressly waives.

      If,  within 30 days after  acceleration  of the  maturity  of the
Obligations or  termination  of the  obligations of the Lenders to make
Loans  hereunder as a result of any Default  (other than any Default as
described  in  Section  7.6 or 7.7 with  respect to the  Borrower)  and
before any  judgment or decree for the payment of the  Obligations  due
shall have been  obtained or entered,  the  Required  Lenders (in their
sole  discretion)  shall so direct,  the Agent shall,  by notice to the
Borrower, rescind and annul such acceleration and/or termination.

      8.2. Amendments.  Subject  to  the  provisions  of  this  Article
VIII,  the  Required  Lenders (or the Agent with the consent in writing
of the Required  Lenders)  and the  Borrower may enter into  agreements
supplemental  hereto  for  the  purpose  of  adding  or  modifying  any
provisions  to the Loan  Documents or changing in any manner the rights
of the  Lenders  or the  Borrower  hereunder  or  waiving  any  Default
hereunder;  provided,  however,  that  no such  supplemental  agreement
shall, without the consent of all of the Lenders:

   (i)     Extend  the  final  maturity  of any  Loan or  postpone  any
           regularly  scheduled  payment  of  principal  of any Loan or
           forgive all or any portion of the principal  amount thereof,
           or  reduce  the  rate  or  extend  the  time of  payment  of
           interest or fees thereon.

  (ii)     Reduce  the  percentage   specified  in  the  definition  of
           Required Lenders.

 (iii)     Extend the Facility  Termination  Date, or reduce the amount
           or extend  the  payment  date for,  the  mandatory  payments
           required  under  Section  2.2, or increase the amount of the
           Commitment of any Lender  hereunder,  or permit the Borrower
           to assign its rights under this Agreement.

  (iv)     Amend this Section 8.2.

   (v)     Release any  guarantor of any Advance or, except as provided
           in the Collateral  Documents,  release all or  substantially
           all of the Collateral.

  (vi)     Change the percentage set forth in Section 2.17.

No amendment of any provision of this  Agreement  relating to the Agent
shall be  effective  without  the  written  consent of the  Agent.  The
Agent  may waive  payment  of the fee  required  under  Section  12.3.2
without obtaining the consent of any other party to this Agreement.

      8.3. Preservation  of  Rights.   No  delay  or  omission  of  the
Lenders or the Agent to  exercise  any right  under the Loan  Documents
shall  impair such right or be  construed to be a waiver of any Default
or an acquiescence  therein,  and the making of a Loan  notwithstanding
the  existence  of a  Default  or  the  inability  of the  Borrower  to
satisfy  the  conditions  precedent  to such Loan shall not  constitute
<PAGE>

any  waiver or  acquiescence.  Any single or  partial  exercise  of any
such right  shall not  preclude  other or further  exercise  thereof or
the  exercise of any other  right,  and no waiver,  amendment  or other
variation  of  the  terms,   conditions   or  provisions  of  the  Loan
Documents  whatsoever  shall be valid  unless in writing  signed by the
Lenders  required  pursuant to Section 8.2, and then only to the extent
in such  writing  specifically  set forth.  All  remedies  contained in
the Loan  Documents  or by law  afforded  shall be  cumulative  and all
shall be available to the Agent and the Lenders  until the  Obligations
have been paid in full.

                              ARTICLE IX

                         GENERAL PROVISIONS

      9.1. Survival  of   Representations.   All   representations  and
warranties of the Borrower  contained in this  Agreement  shall survive
the making of the Loans herein contemplated.

      9.2. Governmental   Regulation.   Anything   contained   in  this
Agreement  to  the  contrary   notwithstanding,   no  Lender  shall  be
obligated  to  extend  credit  to  the  Borrower  in  violation  of any
limitation  or  prohibition  provided  by  any  applicable  statute  or
regulation.

      9.3. Section   headings   in  the  Loan   Documents   are  for
convenience   of   reference   only,   and   shall   not   govern   the
interpretation of any of the provisions of the Loan Documents.

      9.4. Entire  Agreement.  The Loan  Documents  embody  the  entire
agreement  and  understanding  among  the  Borrower,  the Agent and the
Lenders and supersede all prior  agreements  and  understandings  among
the  Borrower,  the  Agent  and the  Lenders  relating  to the  subject
matter thereof.

      9.5. Several  Obligations;   Benefits  of  this  Agreement.   The
respective  obligations  of the Lenders  hereunder  are several and not
joint  and no  Lender  shall  be the  partner  or  agent  of any  other
(except  to the  extent  to which  the  Agent is  authorized  to act as
such).  The  failure of any Lender to  perform  any of its  obligations
hereunder   shall  not  relieve  any  other  Lender  from  any  of  its
obligations  hereunder.  This  Agreement  shall not be  construed so as
to confer any right or benefit  upon any Person  other than the parties
to this Agreement and their respective successors and assigns.

      9.6. Expenses;   Indemnification.    (i)   The   Borrower   shall
reimburse the Agent for any costs,  internal charges and  out-of-pocket
expenses  (including  attorneys' fees and time charges of attorneys for
the Agent,  which  attorneys  may be  employees  of the Agent)  paid or
incurred   by  the   Agent  in   connection   with   the   preparation,
negotiation,   execution,  delivery,  syndication,  review,  amendment,
modification,  and  administration of the Loan Documents.  The Borrower
also  agrees to  reimburse  the Agent and the  Lenders  for any  costs,
internal  charges  and  out-of-pocket  expenses  (including  attorneys'
fees and time  charges  of  attorneys  for the Agent  and the  Lenders,
which  attorneys  may be employees of the Agent or the Lenders) paid or
incurred by the Agent or any Lender in connection  with the  collection
and  enforcement of the Loan  Documents.  Expenses being  reimbursed by
the Borrower  under this Section  include,  without  limitation,  costs
and expenses  incurred in connection with the Reports  described in the
following  sentence.  The Borrower  acknowledges that from time to time
<PAGE>

American  may prepare  and may  distribute  to the  Lenders  (but shall
have  no  obligation  or  duty  to  prepare  or to  distribute  to  the
Lenders)  certain  audit  reports  (the  "Reports")  pertaining  to the
Borrower's  assets  for  internal  use  by  American  from  information
furnished  to it by or on behalf of the  Borrower,  after  American has
exercised its rights of inspection pursuant to this Agreement.

      (ii) The Borrower  hereby  further  agrees to indemnify the Agent
and each Lender,  its  directors,  officers and  employees  against all
losses,  claims,  damages,   penalties,   judgments,   liabilities  and
expenses  (including,  without  limitation,  all expenses of litigation
or  preparation  therefor  whether  or not the Agent or any Lender is a
party  thereto)  which any of them may pay or incur  arising  out of or
relating   to  this   Agreement,   the  other   Loan   Documents,   the
transactions   contemplated   hereby   or  the   direct   or   indirect
application  or  proposed  application  of the  proceeds  of  any  Loan
hereunder  except to the  extent  that they are  determined  in a final
non-appealable  judgment by a court of competent  jurisdiction  to have
resulted from the gross  negligence or willful  misconduct of the party
seeking  indemnification.  The  obligations  of the Borrower under this
Section 9.6 shall survive the termination of this Agreement.

      9.7. Numbers  of  Documents.  All  statements,  notices,  closing
documents,  and  requests  hereunder  shall be  furnished  to the Agent
with  sufficient  counterparts  so that the  Agent may  furnish  one to
each of the Lenders.

      9.8. Accounting.  Except as provided to the contrary herein,  all
accounting  terms used herein shall be  interpreted  and all accounting
determinations  hereunder  shall be made in accordance  with  Agreement
Accounting Principles.

      9.9. Severability  of  Provisions.  Any  provision  in  any  Loan
Document that is held to be inoperative,  unenforceable,  or invalid in
any  jurisdiction  shall,  as to  that  jurisdiction,  be  inoperative,
unenforceable,  or invalid without  affecting the remaining  provisions
in that jurisdiction or the operation,  enforceability,  or validity of
that  provision  in  any  other  jurisdiction,  and  to  this  end  the
provisions of all Loan Documents are declared to be severable.

      9.10. Nonliability  of  Lenders.  The  relationship  between  the
Borrower  on the one hand and the  Lenders  and the  Agent on the other
hand shall be solely  that of borrower  and  lender.  Neither the Agent
nor  any  Lender  shall  have  any  fiduciary  responsibilities  to the
Borrower.   Neither   the  Agent   nor  any   Lender   undertakes   any
responsibility  to the  Borrower  to review or inform the  Borrower  of
any matter in connection  with any phase of the Borrower's  business or
operations.  The  Borrower  agrees  that  neither  the  Agent  nor  any
Lender  shall have  liability  to the  Borrower  (whether  sounding  in
tort,  contract or  otherwise)  for losses  suffered by the Borrower in
connection  with,  arising  out  of,  or in any  way  related  to,  the
transactions  contemplated  and  the  relationship  established  by the
Loan Documents,  or any act,  omission or event occurring in connection
therewith,  unless it is determined in a final non-appealable  judgment
by a court of competent  jurisdiction  that such losses  resulted  from
the gross  negligence  or  willful  misconduct  of the party from which
recovery  is sought.  Neither  the Agent nor any Lender  shall have any
liability  with respect to, and the Borrower  hereby  waives,  releases
and agrees  not to sue for,  any  special,  indirect  or  consequential
damages  suffered by the Borrower in connection  with,  arising out of,
or in  any  way  related  to the  Loan  Documents  or the  transactions
contemplated thereby.
<PAGE>

      9.11. Confidentiality.    Each  Lender   agrees   to   hold   any
confidential  information  which  it  may  receive  from  the  Borrower
pursuant to this  Agreement in  confidence,  except for  disclosure (i)
to  its   Affiliates   and  to  other  Lenders  and  their   respective
Affiliates,   (ii)   to   legal   counsel,   accountants,   and   other
professional  advisors  to that  Lender  or to a  Transferee,  (iii) to
regulatory  officials,  (iv) to any Person as requested  pursuant to or
as required by law,  regulation,  or legal  process,  (v) to any Person
in  connection  with any legal  proceeding  to which  that  Lender is a
party, and (vi) permitted by Section 12.4.

      9.12. Nonreliance.  Each Lender hereby represents  that it is not
relying on or looking to any margin  stock (as defined in  Regulation U
of the  Board of  Governors  of the  Federal  Reserve  System)  for the
repayment of the Loans provided for herein.

                              ARTICLE X

                              THE AGENT

      10.1. Appointment; Nature of Relationship.  The American National
Bank and Trust  Company of Chicago is hereby  appointed  by each of the
Lenders as its contractual  representative  (herein  referred to as the
"Agent")  hereunder  and under each other  Loan  Document,  and each of
the   Lenders   irrevocably   authorizes   the  Agent  to  act  as  the
contractual  representative  of such  Lender with the rights and duties
expressly  set  forth  herein  and in the  other  Loan  Documents.  The
Agent  agrees  to act  as  such  contractual  representative  upon  the
express  conditions  contained in this Article X.  Notwithstanding  the
use of  the  defined  term  "Agent,"  it is  expressly  understood  and
agreed  that the Agent  shall not have any  fiduciary  responsibilities
to any Lender by reason of this  Agreement  or any other Loan  Document
and that the Agent is merely acting as the  contractual  representative
of the Lenders  with only those  duties as are  expressly  set forth in
this  Agreement  and the other Loan  Documents.  In its capacity as the
Lenders'  contractual  representative,  the Agent  (i) does not  hereby
assume  any  fiduciary  duties  to  any  of  the  Lenders,  (ii)  is  a
"representative"  of the Lenders  within the  meaning of Section  9-105
of the Uniform  Commercial  Code and (iii) is acting as an  independent
contractor,  the  rights  and  duties  of which  are  limited  to those
expressly  set forth in this  Agreement  and the other Loan  Documents.
Each of the  Lenders  hereby  agrees  to assert  no claim  against  the
Agent on any  agency  theory  or any  other  theory  of  liability  for
breach of  fiduciary  duty,  all of which  claims  each  Lender  hereby
waives.

      10.2. Powers. The Agent shall have and may  exercise  such powers
under the Loan  Documents  as are  specifically  delegated to the Agent
by the  terms  of  each  thereof,  together  with  such  powers  as are
reasonably   incidental  thereto.  The  Agent  shall  have  no  implied
duties to the  Lenders,  or any  obligation  to the Lenders to take any
action thereunder except any action  specifically  provided by the Loan
Documents to be taken by the Agent.

      10.3. General  Immunity.   Neither  the  Agent  nor  any  of  its
directors,  officers,  agents  or  employees  shall  be  liable  to the
Borrower,  the  Lenders or any  Lender for any action  taken or omitted
to be taken by it or them  hereunder  or under any other Loan  Document
or in  connection  herewith  or  therewith  except to the  extent  such
action or inaction is  determined  in a final  non-appealable  judgment
<PAGE>

by a court of  competent  jurisdiction  to have  arisen  from the gross
negligence or willful misconduct of such Person.

      10.4. No Responsibility  for Loans,  Recitals,  etc.  Neither the
Agent nor any of its  directors,  officers,  agents or employees  shall
be  responsible  for or have any duty to  ascertain,  inquire  into, or
verify  (a)  any  statement,   warranty  or   representation   made  in
connection with any Loan Document or any borrowing  hereunder;  (b) the
performance  or  observance  of any of the  covenants or  agreements of
any obligor under any Loan  Document,  including,  without  limitation,
any  agreement  by an obligor to furnish  information  directly to each
Lender;  (c) the  satisfaction  of any  condition  specified in Article
IV,  except  receipt of items  required to be  delivered  solely to the
Agent;  (d) the  existence  or  possible  existence  of any  Default or
Unmatured  Default;  (e) the validity,  enforceability,  effectiveness,
sufficiency   or   genuineness  of  any  Loan  Document  or  any  other
instrument  or  writing  furnished  in  connection  therewith;  (f) the
value,  sufficiency,  creation,  perfection  or priority of any Lien in
any  collateral  security;  or  (g)  the  financial  condition  of  the
Borrower or any  guarantor of any of the  Obligations  or of any of the
Borrower's  or  any  such  guarantor's  respective  Subsidiaries.   The
Agent shall have no duty to disclose  to the Lenders  information  that
is not  required to be  furnished  by the Borrower to the Agent at such
time,  but is  voluntarily  furnished  by  the  Borrower  to the  Agent
(either in its capacity as Agent or in its individual capacity).

      10.5. Action on  Instructions of Lenders.  The Agent shall in all
cases be fully  protected  in acting,  or in  refraining  from  acting,
hereunder  and  under  any  other  Loan  Document  in  accordance  with
written  instructions  signed by the Required  Lenders (except for acts
of gross  negligence  or willful  misconduct  of Agent in carrying  out
said  written  instructions),  and  such  instructions  and any  action
taken or failure  to act  pursuant  thereto  shall be binding on all of
the Lenders.  The Lenders  hereby  acknowledge  that the Agent shall be
under no duty to take any  discretionary  action  permitted to be taken
by it pursuant to the  provisions  of this  Agreement or any other Loan
Document  unless  it  shall be  requested  in  writing  to do so by the
Required  Lenders.  The Agent  shall be fully  justified  in failing or
refusing  to take  any  action  hereunder  and  under  any  other  Loan
Document  unless it shall first be indemnified to its  satisfaction  by
the Lenders pro rata  against any and all  liability,  cost and expense
that it may incur by reason  of taking or  continuing  to take any such
action.

      10.6. Employment  of Agents and  Counsel.  The Agent may  execute
any of  its  duties  as  Agent  hereunder  and  under  any  other  Loan
Document by or through  employees,  agents, and  attorneys-in-fact  and
shall  not  be  answerable  to  the  Lenders,  except  as to  money  or
securities  received by it or its  authorized  agents,  for the default
or  misconduct of any such agents or  attorneys-in-fact  selected by it
with  reasonable  care.  The  Agent  shall be  entitled  to  advice  of
counsel  concerning the contractual  arrangement  between the Agent and
the  Lenders  and  all  matters   pertaining  to  the  Agent's   duties
hereunder and under any other Loan Document.

      10.7. Reliance  on   Documents;  Counsel.   The  Agent  shall  be
entitled  to  rely  upon  any  Note,  notice,   consent,   certificate,
affidavit,  letter, telegram,  statement, paper or document believed by
it to be genuine  and  correct  and to have been  signed or sent by the
proper person or persons,  and, in respect to legal  matters,  upon the
opinion  of  counsel  selected  by  the  Agent,  which  counsel  may be
employees of the Agent.
<PAGE>

      10.8. Agent's Reimbursement  and  Indemnification.   The  Lenders
agree to reimburse  and  indemnify  the Agent  ratably in proportion to
their  respective   Commitments  (or,  if  the  Commitments  have  been
terminated,  in proportion to their  Commitments  immediately  prior to
such  termination)  (i) for any amounts not  reimbursed by the Borrower
for  which the  Agent is  entitled  to  reimbursement  by the  Borrower
under the Loan Documents,  (ii) for any other expenses  incurred by the
Agent on behalf of the Lenders,  in  connection  with the  preparation,
execution,  delivery,   administration  and  enforcement  of  the  Loan
Documents  (including,  without  limitation,  for any expenses incurred
by the Agent in connection  with any dispute  between the Agent and any
Lender  or  between  two or  more of the  Lenders)  and  (iii)  for any
liabilities,   obligations,   losses,  damages,   penalties,   actions,
judgments,  suits,  costs,  expenses or  disbursements  of any kind and
nature  whatsoever  which may be imposed  on,  incurred  by or asserted
against  the Agent in any way  relating  to or arising  out of the Loan
Documents or any other  document  delivered in connection  therewith or
the transactions  contemplated thereby (including,  without limitation,
for any such  amounts  incurred  by or  asserted  against  the Agent in
connection  with any  dispute  between  the  Agent  and any  Lender  or
between two or more of the Lenders),  or the  enforcement of any of the
terms of the Loan  Documents or of any such other  documents,  provided
that no Lender  shall be liable for any of the  foregoing to the extent
any of the foregoing is found in a final  non-appealable  judgment by a
court  of  competent  jurisdiction  to have  resulted  from  the  gross
negligence or willful  misconduct of the Agent or the gross  negligence
or willful  misconduct  on any agent or  attorney-in-fact  selected  by
Agent  pursuant to Section 10.6.  The  obligations of the Lenders under
this  Section  10.8  shall  survive  payment  of  the  Obligations  and
termination of this Agreement.

      10.9. Notice of  Default.  The Agent  shall not be deemed to have
knowledge  or notice of the  occurrence  of any  Default  or  Unmatured
Default  hereunder  unless the Agent has received written notice from a
Lender or the Borrower  referring  to this  Agreement  describing  such
Default  or  Unmatured  Default  and  stating  that  such  notice  is a
"notice  of  default".  In the  event  that the Agent  receives  such a
notice, the Agent shall give prompt notice thereof to the Lenders.

      10.10. Rights  as a  Lender.  In  the  event  the  Agent  is a
Lender,  the Agent shall have the same rights and powers  hereunder and
under any other Loan  Document with respect to its  Commitment  and its
Loans as any  Lender  and may  exercise  the same as though it were not
the Agent,  and the term "Lender" or "Lenders"  shall, at any time when
the  Agent  is  a  Lender,  unless  the  context  otherwise  indicates,
include  the  Agent  in its  individual  capacity.  The  Agent  and its
Affiliates  may accept  deposits  from,  lend  money to, and  generally
engage in any kind of trust,  debt,  equity  or other  transaction,  in
addition  to those  contemplated  by this  Agreement  or any other Loan
Document,  with the  Borrower or any of its  Subsidiaries  in which the
Borrower or such  Subsidiary  is not  restricted  hereby from  engaging
with any other Person.  The Agent, in its individual  capacity,  is not
obligated to remain a Lender.

      10.11. Lender Credit Decision.  Each Lender  acknowledges that
it has,  independently  and  without  reliance  upon  the  Agent or any
other  Lender and based on the  financial  statements  prepared  by the
Borrower  and such other  documents  and  information  as it has deemed
appropriate,  made its own credit  analysis  and decision to enter into
this  Agreement  and  the  other  Loan  Documents.   Each  Lender  also
acknowledges  that it will,  independently  and without  reliance  upon
the  Agent  or any  other  Lender  and  based  on  such  documents  and
information  as it shall  deem  appropriate  at the time,  continue  to
<PAGE>

make its own  credit  decisions  in taking or not taking  action  under
this Agreement and the other Loan Documents.

      10.12. Successor  Agent.  The Agent may  resign at any time by
giving  written  notice  thereof to the Lenders and the Borrower,  such
resignation to be effective upon the  appointment of a successor  Agent
or, if no successor  Agent has been  appointed,  forty-five  days after
the  retiring  Agent  gives  notice of its  intention  to  resign.  The
Agent may be  removed  at any time  with or  without  cause by  written
notice  received by the Agent from the Required  Lenders,  such removal
to be effective on the date  specified  by the Required  Lenders.  Upon
any such  resignation or removal,  the Required  Lenders shall have the
right  to  appoint,  on  behalf  of the  Borrower  and the  Lenders,  a
successor  Agent.  If no  successor  Agent shall have been so appointed
by  the  Required  Lenders  within  thirty  days  after  the  resigning
Agent's  giving notice of its  intention to resign,  then the resigning
Agent may  appoint,  on  behalf  of the  Borrower  and the  Lenders,  a
successor  Agent.  Notwithstanding  the  previous  sentence,  the Agent
may at any time  without  the  consent of the  Borrower  or any Lender,
appoint  any  of  its  Affiliates  which  is  a  commercial  bank  as a
successor  Agent  hereunder.  If the Agent has resigned or been removed
and no  successor  Agent has been  appointed,  the  Lenders may perform
all the duties of the Agent  hereunder and the Borrower  shall make all
payments in respect of the  Obligations  to the  applicable  Lender and
for all  other  purposes  shall  deal  directly  with the  Lenders.  No
successor  Agent shall be deemed to be appointed  hereunder  until such
successor  Agent  has  accepted  the  appointment.  Any such  successor
Agent shall be a commercial  bank having capital and retained  earnings
of at least  $100,000,000.  Upon the  acceptance of any  appointment as
Agent  hereunder  by a  successor  Agent,  such  successor  Agent shall
thereupon  succeed to and become  vested with all the  rights,  powers,
privileges  and  duties of the  resigning  or removed  Agent.  Upon the
effectiveness   of  the  resignation  or  removal  of  the  Agent,  the
resigning  or removed  Agent  shall be  discharged  from its duties and
obligations   hereunder  and  under  the  Loan  Documents.   After  the
effectiveness   of  the  resignation  or  removal  of  an  Agent,   the
provisions  of this Article X shall  continue in effect for the benefit
of such Agent in respect  of any  actions  taken or omitted to be taken
by it while it was  acting as the Agent  hereunder  and under the other
Loan  Documents.  In the event that there is a  successor  to the Agent
by  merger,  or the Agent  assigns  its duties  and  obligations  to an
Affiliate  pursuant to this  Section  10.12,  then the term  "Corporate
Base Rate" as used in this  Agreement  shall mean the prime rate,  base
rate or other analogous rate of the new Agent.

      10.13. Agent's Fee. The Borrower  agrees to pay to Agent,  for
its own  Account,  an annual Agent Fee in advance of  $25,000.00.  Said
Agent's  Fee  shall  be  paid  to  Agent   contemporaneously  with  the
execution   of  this   Agreement  on  each  annual   anniversary   date
thereafter.

      10.14. Delegation   to   Affiliates.   The  Borrower  and  the
Lenders  agree  that the Agent may  delegate  any of its  duties  under
this  Agreement  to any of its  Affiliates.  Any  such  Affiliate  (and
such  Affiliate's  directors,  officers,  agents and  employees)  which
performs  duties in connection  with this  Agreement  shall be entitled
to  the  same  benefits  of  the  indemnification,   waiver  and  other
protective  provisions  to which the Agent is entitled  under  Articles
IX and X.

      10.15. Execution of Collateral  Documents.  The Lenders hereby
empower  and  authorize  the  Agent  to  execute  and  deliver  to  the
Borrower  on their  behalf any  security  agreement(s)  and all related
<PAGE>

financing   statements  and  any  financing   statements,   agreements,
documents  or  instruments  as shall be  necessary  or  appropriate  to
effect the purposes of any security agreement(s).

      10.16. Collateral  Releases.  The Lenders  hereby  empower and
authorize  the Agent to execute  and  deliver to the  Borrower on their
behalf any  agreements,  documents or instruments as shall be necessary
or  appropriate  to effect any  releases of  Collateral  which shall be
permitted  by the terms  hereof or of any other Loan  Document or which
shall  otherwise  have been  approved by the  Required  Lenders (or, if
required by the terms of Section 8.2, all of the Lenders) in writing.

                              ARTICLE XI

                      SETOFF; RATABLE PAYMENTS

      11.1. Setoff.  In addition  to, and  without  limitation  of, any
rights of the Lenders  under  applicable  law, if the Borrower  becomes
insolvent,  however  evidenced,  or any  Default  occurs,  any  and all
deposits  (including  all  account  balances,  whether  provisional  or
final  and  whether  or not  collected  or  available)  and  any  other
Indebtedness  at any time held or owing by any Lender or any  Affiliate
of any Lender to or for the credit or  account of the  Borrower  may be
offset and  applied  toward the  payment  of the  Obligations  owing to
such  Lender,  whether  or not the  Obligations,  or any  part  hereof,
shall then be due.

      11.2. Ratable Payments.  If any  Lender,  whether  by  setoff  or
otherwise,  has payment made to it upon its Loans (other than  payments
received  pursuant  to  Section  3.1,  3.2,  3.4 or 3.5)  in a  greater
proportion  than  that  received  by  any  other  Lender,  such  Lender
agrees,  promptly upon demand,  to purchase a portion of the Loans held
by the other  Lenders so that  after such  purchase  each  Lender  will
hold its  ratable  proportion  of  Loans.  If any  Lender,  whether  in
connection  with setoff or amounts  which might be subject to setoff or
otherwise,   receives   collateral   or   other   protection   for  its
Obligations  or such  amounts  which may be  subject  to  setoff,  such
Lender  agrees,  promptly  upon demand,  to take such action  necessary
such  that  all  Lenders  share  in the  benefits  of  such  collateral
ratably  in  proportion  to their  Loans.  In case any such  payment is
disturbed  by  legal  process,   or  otherwise,   appropriate   further
adjustments shall be made.

                              ARTICLE XII

           BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

      12.1.Successors  and  Assigns.  The terms and  provisions  of the
Loan  Documents  shall be binding  upon and inure to the benefit of the
Borrower and the Lenders and their  respective  successors and assigns,
except  that (i) the  Borrower  shall not have the right to assign  its
rights  or   obligations   under  the  Loan   Documents  and  (ii)  any
assignment  by any  Lender  must  be made in  compliance  with  Section
12.3.  Notwithstanding  clause (ii) of this Section,  any Lender may at
any time,  without  the consent of the  Borrower  or the Agent,  assign
all or any portion of its rights under this  Agreement  and any Note to
a Federal Reserve Bank; provided,  however,  that no such assignment to
a Federal  Reserve Bank shall  release the  transferor  Lender from its
obligations  hereunder.  The Agent may treat the Person  which made any
<PAGE>

Loan or which  holds any Note as the  owner  thereof  for all  purposes
hereof  unless and until such Person  complies with Section 12.3 in the
case of an  assignment  thereof or, in the case of any other  transfer,
a  written  notice  of the  transfer  is  filed  with  the  Agent.  Any
assignee  or  transferee  of the rights to any Loan or any Note  agrees
by  acceptance  of such  transfer or  assignment to be bound by all the
terms and  provisions  of the Loan  Documents.  Any request,  authority
or consent of any  Person,  who at the time of making  such  request or
giving  such  authority  or  consent  is the owner of the rights to any
Loan  (whether  or not a Note has been  issued  in  evidence  thereof),
shall be conclusive  and binding on any subsequent  holder,  transferee
or assignee of the rights to such Loan.

      12.2. Participations.

           12.2.1 Permitted  Participants;  Effect.  Any Lender may, in
      the  ordinary  course  of its  business  and in  accordance  with
      applicable  law,  at any time sell to one or more  banks or other
      entities  ("Participants")  participating  interests  in any Loan
      owing  to  such  Lender,  any  Note  held  by  such  Lender,  any
      Commitment  of such  Lender or any other  interest of such Lender
      under  the Loan  Documents.  In the  event of any such  sale by a
      Lender  of  participating   interests  to  a  Participant,   such
      Lender's  obligations  under  the  Loan  Documents  shall  remain
      unchanged,  such Lender shall remain  solely  responsible  to the
      other parties  hereto for the  performance  of such  obligations,
      such  Lender  shall  remain the owner of its Loans and the holder
      of any Note  issued to it in evidence  thereof  for all  purposes
      under the Loan  Documents,  all amounts  payable by the  Borrower
      under this  Agreement  shall be  determined as if such Lender had
      not sold such participating  interests,  and the Borrower and the
      Agent  shall  continue  to deal  solely  and  directly  with such
      Lender in connection  with such Lender's  rights and  obligations
      under the Loan Documents.

           12.2.2.  Voting  Rights.  Each Lender  shall retain the sole
      right to approve,  without the  consent of any  Participant,  any
      amendment,  modification  or waiver of any  provision of the Loan
      Documents  other than any amendment,  modification or waiver with
      respect to any Loan or Commitment in which such  Participant  has
      an  interest  which  forgives  principal,  interest  or  fees  or
      reduces the  interest  rate or fees  payable  with respect to any
      such Loan or Commitment,  extends the Facility  Termination Date,
      postpones any date fixed for any  regularly-scheduled  payment of
      principal   of,  or  interest  or  fees  on,  any  such  Loan  or
      Commitment,  releases any  guarantor of any such Loan or releases
      all or substantially all of the collateral,  if any, securing any
      such Loan.

           12.2.3.  Benefit of Setoff.  The  Borrower  agrees that each
      Participant  shall be deemed to have the right of setoff provided
      in  Section  11.1 in  respect of its  participating  interest  in
      amounts  owing under the Loan  Documents to the same extent as if
      the amount of its  participating  interest were owing directly to
      it as a Lender  under  the Loan  Documents,  provided  that  each
      Lender shall retain the right of setoff  provided in Section 11.1
      with  respect to the amount of  participating  interests  sold to
      each   Participant.   The  Lenders   agree  to  share  with  each
      Participant,  and each  Participant,  by exercising  the right of
      setoff  provided  in  Section  11.1,  agrees  to share  with each
      Lender,  any amount  received  pursuant  to the  exercise  of its
<PAGE>

      right of setoff,  such  amounts to be shared in  accordance  with
      Section 11.2 as if each Participant were a Lender.

      12.3. Assignments.

           12.3.1.  Permitted  Assignments.  Any  Lender  may,  in  the
      ordinary   course  of  its  business  and  in   accordance   with
      applicable  law, at any time assign to one or more banks or other
      entities  ("Purchasers")  all  or any  part  of  its  rights  and
      obligations  under the Loan Documents.  Such assignment  shall be
      substantially  in the form of  Exhibit C or in such other form as
      may be agreed  to by the  parties  thereto.  The  consent  of the
      Borrower and the Agent shall be required  prior to an  assignment
      becoming  effective  with  respect to a Purchaser  which is not a
      Lender or an  Affiliate  thereof;  provided,  however,  that if a
      Default  has  occurred  and is  continuing,  the  consent  of the
      Borrower  shall  not  be  required.  Such  consent  shall  not be
      unreasonably  withheld or  delayed.  Each such  assignment  shall
      (unless each of the Borrower  and the Agent  otherwise  consents)
      be in an amount not less than the lesser of (i)  $5,000,000.00 or
      (ii) the remaining  amount of the assigning  Lender's  Commitment
      (calculated as at the date of such assignment).

           12.3.2.  Effect;  Effective  Date.  Upon (i) delivery to the
      Agent  of a  notice  of  assignment,  substantially  in the  form
      attached  as Exhibit I to  Exhibit C (a "Notice of  Assignment"),
      together with any consents  required by Section 12.3.1,  and (ii)
      payment  of a  $3,000  fee  to  the  Agent  for  processing  such
      assignment,   such  assignment  shall  become  effective  on  the
      effective  date  specified  in such  Notice  of  Assignment.  The
      Notice  of  Assignment  shall  contain  a  representation  by the
      Purchaser  to the effect that none of the  consideration  used to
      make  the  purchase  of  the   Commitment  and  Loans  under  the
      applicable  assignment  agreement  are "plan  assets"  as defined
      under ERISA and that the rights and  interests  of the  Purchaser
      in and under the Loan  Documents  will not be "plan assets" under
      ERISA. On and after the effective date of such  assignment,  such
      Purchaser  shall  for all  purposes  be a  Lender  party  to this
      Agreement  and any other Loan  Document  executed by or on behalf
      of the Lenders and shall have all the rights and  obligations  of
      a Lender  under the Loan  Documents,  to the same extent as if it
      were an original party hereto,  and no further  consent or action
      by the  Borrower,  the  Lenders or the Agent shall be required to
      release the  transferor  Lender with respect to the percentage of
      the Aggregate  Commitment and Loans  assigned to such  Purchaser.
      Upon the  consummation of any assignment to a Purchaser  pursuant
      to this Section 12.3.2,  the transferor Lender, the Agent and the
      Borrower  shall,  if  the  transferor  Lender  or  the  Purchaser
      desires that its Loans be evidenced  by Notes,  make  appropriate
      arrangements  so that new Notes or, as  appropriate,  replacement
      Notes are issued to such  transferor  Lender and new Notes or, as
      appropriate,  replacement Notes, are issued to such Purchaser, in
      each  case  in  principal  amounts  reflecting  their  respective
      Commitments, as adjusted pursuant to such assignment.

      12.4. Dissemination of Information. The Borrower  authorizes each
Lender  to  disclose  to any  Participant  or  Purchaser  or any  other
Person  acquiring  an interest in the Loan  Documents  by  operation of
law (each a "Transferee")  and any  prospective  Transferee any and all
information    in   such    Lender's    possession    concerning    the
creditworthiness  of  the  Borrower  and  its  Subsidiaries,  including
<PAGE>

without limitation any information  contained in any Reports;  provided
that each Transferee and prospective  Transferee  agrees to be bound by
Section 9.11 of this Agreement.

      12.5. Tax  Treatment.  If any interest  in any Loan  Document  is
transferred  to any  Transferee  which is  organized  under the laws of
any  jurisdiction  other than the United  States or any State  thereof,
the transferor  Lender shall cause such Transferee,  concurrently  with
the  effectiveness  of such transfer,  to comply with the provisions of
Section 3.5(iv).

                            ARTICLE XIII

                               NOTICES

      13.1. Notices.  Except as otherwise  permitted  by  Section  2.14
with respect to  borrowing  notices,  all  notices,  requests and other
communications  to any party hereunder  shall be in writing  (including
electronic  transmission,  facsimile  transmission or similar  writing)
and shall be given to such  party:  (x) in the case of the  Borrower or
the  Agent,  at its  address  or  facsimile  number  set  forth  on the
signature pages hereof,  (y) in the case of any Lender,  at its address
or  facsimile  number set forth  below its  signature  hereto or (z) in
the case of any party,  at such other  address or  facsimile  number as
such  party may  hereafter  specify  for the  purpose  by notice to the
Agent  and the  Borrower  in  accordance  with the  provisions  of this
Section 13.1. Each such notice,  request or other  communication  shall
be effective (i) if given by facsimile  transmission,  when transmitted
to the facsimile  number  specified in this Section and confirmation of
receipt  is  received,  (ii) if  given by mail,  72  hours  after  such
communication  is  deposited  in the mails  with  first  class  postage
prepaid,  addressed  as  aforesaid,  or (iii)  if  given  by any  other
means,  when  delivered  (or, in the case of  electronic  transmission,
received)  at the address  specified  in this  Section;  provided  that
notices  to the Agent  under  Article II shall not be  effective  until
received.

      13.2. Change of Address.  The  Borrower, the Agent and any Lender
may each  change the  address for service of notice upon it by a notice
in writing to the other parties hereto.

                             ARTICLE XIV

                            COUNTERPARTS

      This  Agreement  may be executed  in any number of  counterparts,
all of which taken  together shall  constitute  one agreement,  and any
of the parties  hereto may execute  this  Agreement by signing any such
counterpart.  This  Agreement  shall  be  effective  when  it has  been
executed  by the  Borrower,  the Agent and the  Lenders  and each party
has notified the Agent by facsimile  transmission  or telephone that it
has taken such action.


<PAGE>

                            ARTICLE XV

    CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

      15.1. CHOICE  OF  LAW.  THE  LOAN  DOCUMENTS  (OTHER  THAN  THOSE
CONTAINING  A  CONTRARY  EXPRESS  CHOICE  OF LAW  PROVISION)  SHALL  BE
CONSTRUED  IN  ACCORDANCE  WITH THE  INTERNAL  LAWS (AND NOT THE LAW OF
CONFLICTS)  OF THE STATE OF  ILLINOIS,  BUT  GIVING  EFFECT TO  FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.

      15.2. CONSENT TO  JURISDICTION.  THE BORROWER HEREBY  IRREVOCABLY
SUBMITS  TO  THE  NON-EXCLUSIVE   JURISDICTION  OF  ANY  UNITED  STATES
FEDERAL OR  ILLINOIS  STATE COURT  SITTING IN CHICAGO,  ILLINOIS IN ANY
ACTION OR PROCEEDING  ARISING OUT OF OR RELATING TO ANY LOAN  DOCUMENTS
AND THE BORROWER HEREBY  IRREVOCABLY  AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR  PROCEEDING  MAY BE HEARD AND  DETERMINED IN ANY SUCH
COURT AND  IRREVOCABLY  WAIVES ANY  OBJECTION  IT MAY NOW OR  HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH  SUIT,  ACTION OR  PROCEEDING  BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN  INCONVENIENT  FORUM.  NOTHING
HEREIN  SHALL  LIMIT  THE  RIGHT OF THE  AGENT OR ANY  LENDER  TO BRING
PROCEEDINGS   AGAINST   THE   BORROWER  IN  THE  COURTS  OF  ANY  OTHER
JURISDICTION.  ANY  JUDICIAL  PROCEEDING  BY THE  BORROWER  AGAINST THE
AGENT  OR ANY  LENDER  OR ANY  AFFILIATE  OF THE  AGENT  OR ANY  LENDER
INVOLVING,  DIRECTLY OR  INDIRECTLY,  ANY MATTER IN ANY WAY ARISING OUT
OF,  RELATED TO, OR CONNECTED  WITH ANY LOAN DOCUMENT  SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS.

      15.3. WAIVER  OF JURY  TRIAL.  THE  BORROWER, THE  AGENT AND EACH
LENDER   HEREBY  WAIVE  TRIAL  BY  JURY  IN  ANY  JUDICIAL   PROCEEDING
INVOLVING,  DIRECTLY OR  INDIRECTLY,  ANY MATTER  (WHETHER  SOUNDING IN
TORT,  CONTRACT OR  OTHERWISE)  IN ANY WAY ARISING OUT OF,  RELATED TO,
OR CONNECTED  WITH ANY LOAN  DOCUMENT OR THE  RELATIONSHIP  ESTABLISHED
THEREUNDER.


<PAGE>

      IN WITNESS WHEREOF, the Borrower,  the Lenders and the Agent have
duly executed this Agreement as of the date first above written.


                                    KABLE NEWS COMPANY, INC.,
                                    an Illinois corporation


                                    By:___________________________

                                    Title:________________________
                                          16 South Wesley Avenue
                                          Mt. Morris, Illinois
                                          Attention: President
                                          Telephone: (815)734-4151
                                          FAX:       (815)734-5233


Commitments


      $21,350,000.00 (50%)          AMERICAN NATIONAL BANK AND
      --------------                TRUST COMPANY OF CHICAGO,
                                    Individually and as Agent

                                    By:__________________________

                                    Title:_______________________
 
                                             Chicago, Illinois

                                    Attention: James R. Popp
                                          Telephone: (312)661-6532
                                          FAX:       (312)661-3566
 


<PAGE>

     $9,607,500.00 (22.5%)          HELLER FINANCIAL, INC.
     -------------
                                    By:__________________________

                                    Title:_______________________
                                          500 West Monroe
                                          Chicago, Illinois 60661

                                    Attention: Venkat Venkatesan
                                          Telephone: (312) 441-6859
                                          FAX:       (312) 441-6199
 

      $5,871,250.00 (13.75%)        MERRILL LYNCH BUSINESS
      -------------                 FINANCIAL SERVICES INC.

                                    By:__________________________

                                    Title:_______________________
                                          33 West Monroe Street, 22nd Floor
                                          Chicago, Illinois 60603

                                    Attention: Gary Stewart
                                          Telephone: (312) 269-4423
                                          FAX:       (312) 845-9093
 

      $5,871,250.00 (13.75%)        FIRST BANK
      -------------
                                    By:__________________________

                                    Title:_______________________
                                          4565 West Harrison Street
                                          Hillside, Illinois 60162

                                    Attention: Bill Lavery
                                          Telephone: (708) 236-1680
                                          FAX:       (708) 236-1661
 
      $42,700,000.00
      ===============

<PAGE>

               CERTIFICATE OF ACKNOWLEDGEMENT AND PLEDGE



The  undersigned,  wholly-owned  subsidiaries  of Kable  News  Company,
Inc., an Illinois  corporation  ("Borrower") hereby execute the present
certificate  and  agree  to  be  bound  by  and  honor  all  covenants,
conditions   and  terms  of  the   attached   Loan   Agreement   ("Loan
Agreement")  applicable to each of the undersigned.  In addition,  each
of  the  undersigned,  by  their  execution  hereof,  hereby  grants  a
security  interest  in  favor  of  Borrower  in and  to  all  presently
existing  and  hereafter   arising  accounts,   inventory,   equipment,
general  intangibles,  instruments  and chattel  paper and the proceeds
of all of the  foregoing  of each  of  said  companies  to  secure  all
amounts  advanced  and/or  lent to each of said  companies  pursuant to
Section 6.22 of the Loan Agreement.

                               KABLE NEWS EXPORT, LTD.


                               By:_________________________________
                               Title:_______________________________


                               KABLE NEWS COMPANY OF CANADA, LTD.


                               By:_________________________________
                               Title:_______________________________


                               KABLE NEWS INTERNATIONAL, INC.


                               By:_________________________________
                               Title:_______________________________


                               KABLE FULFILLMENT SERVICES
                               OF OHIO, INC.


                               By:_________________________________
                               Title:_______________________________




<PAGE>

                          PRICING SCHEDULE


                ========================================
                                    Applicable Margin
                ========================================
                 Eurodollar Rate    275 Basis Points
                ========================================
                  Floating Rate      50 Basis Points
                ========================================



<PAGE>

                              EXHIBIT A

                           FORM OF OPINION





<PAGE>

                              EXHIBIT B

                       COMPLIANCE CERTIFICATE



To:   The Lenders parties to the
      Credit Agreement Described Below



      This  Compliance   Certificate  is  furnished  pursuant  to  that
certain Credit Agreement dated as of ______________ , ____________  (as
amended,   modified,  renewed  or  extended  from  time  to  time,  the
"Agreement")  among the  ___________________________  (the "Borrower"),
the  Lenders  party  thereto  and  American  National  Bank  and  Trust
Company  of  Chicago,  as  Agent  for  the  Lenders.  Unless  otherwise
defined herein,  capitalized terms used in this Compliance  Certificate
have the meanings ascribed thereto in the Agreement.

      THE UNDERSIGNED HEREBY CERTIFIES THAT:

      1.  I am the duly elected________________________of the Borrower;

      2. I have  reviewed the terms of the  Agreement  and I have made,
or have caused to be made under my  supervision,  a detailed  review of
the  transactions  and conditions of the Borrower and its  Subsidiaries
during  the  accounting  period  covered  by  the  attached   financial
statements;

      3. The  examinations  described in paragraph 2 did not  disclose,
and I have no knowledge  of, the  existence  of any  condition or event
which  constitutes a Default or Unmatured  Default during or at the end
of the accounting period covered by the attached  financial  statements
or as of the date of this Certificate, except as set forth below;

      4.  Schedule I attached  hereto  sets  forth  financial  data and
computations   evidencing  the  Borrower's   compliance   with  certain
covenants  of the  Agreement,  all of which data and  computations  are
true, complete and correct; and

      5.  Schedule  II attached  hereto sets forth the various  reports
and  deliveries  which  are  required  at this time  under  the  Credit
Agreement,  the Security  Agreement  and the other Loan  Documents  and
the status of compliance.


<PAGE>

      Described  below are the  exceptions,  if any, to  paragraph 3 by
listing,  in detail,  the nature of the condition or event,  the period
during  which it has  existed  and the action  which the  Borrower  has
taken,  is  taking,  or  proposes  to take  with  respect  to each such
condition or event:

                                                                   
___________________________________________________________________
                                                                   
___________________________________________________________________
                                                                   
___________________________________________________________________
                                                                   
___________________________________________________________________

      The foregoing certifications,  together with the computations set
forth in  Schedule  I hereto  and the  financial  statements  delivered
with this  Certificate in support  hereof,  are made and delivered this
_______ day of _________________ , _____________.


                                     _______________________________


<PAGE>

                SCHEDULE I TO COMPLIANCE CERTIFICATE

                Compliance as of _________, ______ with
                Provisions of _______ and _________ of
                            the Agreement


<PAGE>

                SCHEDULE II TO COMPLIANCE CERTIFICATE

                Reports and Deliveries Currently Due


<PAGE>

                              EXHIBIT C

                        ASSIGNMENT AGREEMENT

      This Assignment  Agreement (this "Assignment  Agreement") between
________________________ (the "Assignor") __________________ and      
(the  "Assignee")  is dated as of ________________, 19_____. The parties
hereto agree as follows:

      1.  PRELIMINARY  STATEMENT.  The  Assignor is a party to a Credit
Agreement (which, as it may be amended,  modified,  renewed or extended
from time to time is herein  called the "Credit  Agreement")  described
in Item 1 of Schedule 1 attached  hereto  ("Schedule  1").  Capitalized
terms  used  herein and not  otherwise  defined  herein  shall have the
meanings attributed to them in the Credit Agreement.

      2.  ASSIGNMENT  AND  ASSUMPTION.  The  Assignor  hereby sells and
assigns  to  the  Assignee,  and  the  Assignee  hereby  purchases  and
assumes  from  the  Assignor,  an  interest  in and  to the  Assignor's
rights  and  obligations  under the  Credit  Agreement  such that after
giving  effect to such  assignment  the Assignee  shall have  purchased
pursuant  to  this   Assignment   Agreement  the  percentage   interest
specified  in  Item 3 of  Schedule  1 of  all  outstanding  rights  and
obligations  under the  Credit  Agreement  relating  to the  facilities
listed  in Item 3 of  Schedule  1 and the  other  Loan  Documents.  The
aggregate  Commitment (or Loans, if the applicable  Commitment has been
terminated)  purchased by the  Assignee  hereunder is set forth in Item
4 of Schedule 1.

      3.  EFFECTIVE   DATE.  The  effective  date  of  this  Assignment
Agreement  (the  "Effective  Date")  shall  be the  later  of the  date
specified  in  Item 5 of  Schedule  1 or two  Business  Days  (or  such
shorter  period  agreed to by the Agent)  after a Notice of  Assignment
substantially  in the form of  Exhibit  "I"  attached  hereto  has been
delivered  to the Agent.  Such Notice of  Assignment  must  include any
consents  required to be  delivered  to the Agent by Section  12.3.1 of
the  Credit  Agreement.  In no event will the  Effective  Date occur if
the  payments  required to be made by the  Assignee to the  Assignor on
the  Effective  Date under  Sections 4 and 5 hereof are not made on the
proposed  Effective  Date.  The  Assignor  will notify the  Assignee of
the  proposed  Effective  Date no later than the  Business Day prior to
the  proposed  Effective  Date.  As of  the  Effective  Date,  (i)  the
Assignee  shall have the rights and  obligations  of a Lender under the
Loan Documents with respect to the rights and  obligations  assigned to
the Assignee  hereunder  and (ii) the  Assignor  shall  relinquish  its
rights and be released  from its  corresponding  obligations  under the
Loan Documents with respect to the rights and  obligations  assigned to
the Assignee hereunder.

      4. PAYMENT  OBLIGATIONS.  On and after the  Effective  Date,  the
Assignee  shall be entitled to receive  from the Agent all  payments of
principal,  interest  and fees with  respect to the  interest  assigned
hereby.  The Assignee  shall advance  funds  directly to the Agent with
respect to all Loans and  reimbursement  payments  made on or after the
Effective  Date with respect to the  interest  assigned  hereby.  **[In
consideration  for the sale and assignment of Loans hereunder,  (i) the
Assignee  shall pay the  Assignor,  on the  Effective  Date,  an amount
equal to the  principal  amount of the  portion  of all  Floating  Rate
Loans  assigned  to the  Assignee  hereunder  and (ii) with  respect to
<PAGE>

each  Fixed  Rate  Loan  made  by  the  Assignor  and  assigned  to the
Assignee  hereunder  which is outstanding on the Effective Date, (a) on
the last day of the  Interest  Period  therefor or (b) on such  earlier
date agreed to by the  Assignor  and the Assignee or (c) on the date on
which  any  such  Fixed  Rate  Loan  becomes  due (by  acceleration  or
otherwise)(the  date as described in the foregoing  clauses (a), (b) or
(c)  being  hereinafter   referred  to  as  the  "Payment  Date"),  the
Assignee  shall  pay the  Assignor  an  amount  equal to the  principal
amount  of  the  portion  of  such  Fixed  Rate  Loan  assigned  to the
Assignee  which is  outstanding  on the Payment  Date.  If the Assignor
and the  Assignee  agree that the Payment Date for such Fixed Rate Loan
shall be the  Effective  Date,  they shall agree to the  interest  rate
applicable  to the  portion  of such Loan  assigned  hereunder  for the
period  from the  Effective  Date to the end of the  existing  Interest
Period  applicable  to such  Fixed  Rate  Loan  (the  "Agreed  Interest
Rate")  and any  interest  received  by the  Assignee  in excess of the
Agreed  Interest Rate shall be remitted to the  Assignor.  In the event
interest for the period from the  Effective  Date to but not  including
the  Payment  Date is not  paid by the  Borrower  with  respect  to any
Fixed Rate Loan sold by the  Assignor to the  Assignee  hereunder,  the
Assignee  shall pay to the  Assignor  interest  for such  period on the
portion of such Fixed Rate Loan sold by the  Assignor  to the  Assignee
hereunder  at the  applicable  rate  provided by the Credit  Agreement.
In the event a  prepayment  of any Fixed Rate Loan which is existing on
the  Payment  Date  and  assigned  by  the  Assignor  to  the  Assignee
hereunder  occurs  after the  Payment  Date but  before  the end of the
Interest  Period  applicable  to such  Fixed Rate  Loan,  the  Assignee
shall remit to the Assignor the excess of the  prepayment  penalty paid
with  respect to the  portion of such Fixed Rate Loan  assigned  to the
Assignee  hereunder  over the amount which would have been paid if such
prepayment  penalty was calculated  based on the Agreed  Interest Rate.
The  Assignee  will  also  promptly  remit  to  the  Assignor  (i)  any
principal  payments  received from the Agent with respect to Fixed Rate
Loans  prior to the  Payment  Date and (ii) any  amounts of interest on
Loans and fees  received  from the Agent which relate to the portion of
the Loans  assigned to the Assignee  hereunder for periods prior to the
Effective  Date,  in the case of  Floating  Rate Loans or fees,  or the
Payment  Date,  in the case of Fixed  Rate  Loans,  and not  previously
paid by the  Assignee  to the  Assignor.]**  In the event  that  either
party  hereto  receives  any payment to which the other party hereto is
entitled  under this  Assignment  Agreement,  then the party  receiving
such amount shall promptly remit it to the other party hereto.

**Each Assignor may insert its standard  payment  provisions in lieu of
the payment terms included in this Exhibit.

      5. FEES PAYABLE BY THE  ASSIGNEE.  The Assignee  shall pay to the
Assignor  a fee  on  each  day  on  which  a  payment  of  interest  or
commitment  fees is made under the  Credit  Agreement  with  respect to
the amounts  assigned to the Assignee  hereunder  (other than a payment
of interest or  commitment  fees for the period prior to the  Effective
Date or, in the case of Fixed Rate Loans,  the Payment Date,  which the
Assignee is obligated  to deliver to the  Assignor  pursuant to Section
4  hereof).  The  amount  of such fee shall be the  difference  between
(i) the  interest  or fee,  as  applicable,  paid with  respect  to the
amounts  assigned to the  Assignee  hereunder  and (ii) the interest or
fee,  as  applicable,  which  would have been paid with  respect to the
amounts  assigned to the Assignee  hereunder if each  interest rate was
_____ of 1% less than the interest rate paid by the  Borrower or if the
commitment fee was _____ of 1% less  than the  commitment  fee  paid by
the Borrower,  as  applicable.  In addition,  the  Assignee  agrees to 
pay _____% of  the  recordation  fee  required  to  be  paid  to  the 
Agent in connection with this Assignment Agreement.
<PAGE>

      6.   REPRESENTATIONS  OF  THE  ASSIGNOR;   LIMITATIONS  ON  THE  
ASSIGNOR'S  LIABILITY.  The Assignor  represents  and warrants  that it
is the legal and  beneficial  owner of the interest  being  assigned by
it  hereunder  and that such  interest is free and clear of any adverse
claim  created by the Assignor.  It is  understood  and agreed that the
assignment  and assumption  hereunder are made without  recourse to the
Assignor  and  that the  Assignor  makes  no  other  representation  or
warranty  of any kind to the  Assignee.  Neither the  Assignor  nor any
of its officers,  directors,  employees,  agents or attorneys  shall be
responsible   for   (i)   the  due   execution,   legality,   validity,
enforceability,  genuineness,  sufficiency  or  collectability  of  any
Loan Document,  including without  limitation,  documents  granting the
Assignor  and the other  Lenders a security  interest  in assets of the
Borrower  or  any  guarantor,  (ii)  any  representation,  warranty  or
statement  made in or in  connection  with any of the  Loan  Documents,
(iii) the financial  condition or  creditworthiness  of the Borrower or
any guarantor,  (iv) the  performance of or compliance  with any of the
terms or provisions of any of the Loan  Documents,  (v)  inspecting any
of the Property,  books or records of the Borrower,  (vi) the validity,
enforceability,  perfection,  priority, condition, value or sufficiency
of any  collateral  securing or purporting to secure the Loans or (vii)
any  mistake,  error of  judgment,  or action  taken or  omitted  to be
taken in connection with the Loans or the Loan Documents.

      7.  REPRESENTATIONS  OF THE  ASSIGNEE.  The Assignee (i) confirms
that it has  received a copy of the  Credit  Agreement,  together  with
copies of the financial  statements  requested by the Assignee and such
other  documents and  information as it has deemed  appropriate to make
its own credit  analysis  and  decision  to enter into this  Assignment
Agreement,   (ii)  agrees  that  it  will,  independently  and  without
reliance  upon the Agent,  the  Assignor or any other  Lender and based
on such documents and  information at it shall deem  appropriate at the
time,  continue  to make its own  credit  decisions  in  taking  or not
taking action under the Loan  Documents,  (iii) appoints and authorizes
the Agent to take such  action as agent on its behalf  and to  exercise
such powers under the Loan  Documents as are  delegated to the Agent by
the  terms  thereof,  together  with  such  powers  as  are  reasonably
incidental  thereto,  (iv)  agrees that it will  perform in  accordance
with  their  terms  all of the  obligations  which by the  terms of the
Loan  Documents  are required to be  performed  by it as a Lender,  (v)
agrees that its payment  instructions  and notice  instructions  are as
set forth in the  attachment  to Schedule 1, (vi) confirms that none of
the funds,  monies,  assets or other  consideration  being used to make
the  purchase and  assumption  hereunder  are "plan  assets" as defined
under ERISA and that its rights,  benefits  and  interests in and under
the Loan  Documents  will not be "plan  assets"  under ERISA,  **[(vii)
confirms that it is an Eligible  Assignee,]**  **[and  (viii)  attaches
the forms  prescribed  by the  Internal  Revenue  Service of the United
States  certifying  that the  Assignee is entitled to receive  payments
under  the Loan  Documents  without  deduction  or  withholding  of any
United States federal income taxes]**.**

*to be inserted if required by the Credit Agreement.
**to be inserted if the  Assignee  is not  incorporated  under the laws
of the United States, or a state thereof.

      8.  INDEMNITY.  The  Assignee  agrees to  indemnify  and hold the
Assignor  harmless  against  any and all  losses,  costs  and  expenses
(including,   without  limitation,   reasonable  attorneys'  fees)  and
<PAGE>

liabilities  incurred by the Assignor in connection  with or arising in
any  manner  from the  Assignee's  non-performance  of the  obligations
assumed under this Assignment Agreement.

      9.  SUBSEQUENT   ASSIGNMENTS.   After  the  Effective  Date,  the
Assignee  shall  have the  right  pursuant  to  Section  12.3.1  of the
Credit  Agreement  to  assign  the  rights  which are  assigned  to the
Assignee  hereunder  to any  entity or  person,  provided  that (i) any
such  subsequent  assignment  does not  violate  any of the  terms  and
conditions of the Loan Documents or any law, rule,  regulation,  order,
writ,  judgment,  injunction  or decree and that any  consent  required
under  the  terms of the Loan  Documents  has  been  obtained  and (ii)
unless the prior  written  consent of the  Assignor  is  obtained,  the
Assignee is not thereby  released from its  obligations to the Assignor
hereunder,  if any remain unsatisfied,  including,  without limitation,
its obligations under Sections 4, 5 and 8 hereof.

      10.  REDUCTIONS  OF  AGGREGATE  COMMITMENT.  If any  reduction in
the Aggregate  Commitment  occurs  between the date of this  Assignment
Agreement and the Effective  Date,  the percentage  interest  specified
in Item 3 of Schedule 1 shall  remain the same,  but the dollar  amount
purchased  shall  be  recalculated   based  on  the  reduced  Aggregate
Commitment.

      11.  ENTIRE   AGREEMENT.   This  Assignment   Agreement  and  the
attached  Notice  of  Assignment   embody  the  entire   agreement  and
understanding  between  the  parties  hereto  and  supersede  all prior
agreements and  understandings  between the parties hereto  relating to
the subject matter hereof.

      12.  GOVERNING LAW. This  Assignment  Agreement shall be governed
by the  internal  law,  and not the law of  conflicts,  of the State of
Illinois.

      13.  NOTICES.  Notices  shall  be  given  under  this  Assignment
Agreement  in the  manner set forth in the  Credit  Agreement.  For the
purpose  hereof,  the addresses of the parties  hereto (until notice of
a  change  is  delivered)  shall  be  the  address  set  forth  in  the
attachment to Schedule 1.

      IN  WITNESS  WHEREOF,  the  parties  hereto  have  executed  this
Assignment  Agreement by their duly authorized  officers as of the date
first above written.

                               **[NAME OF ASSIGNOR]**

                               By:___________________________________
 
                               Title:________________________________
                                     ________________________________
                                     ________________________________

                               **[NAME OF ASSIGNEE]**

                               By:___________________________________
 
                               Title:________________________________
                                     ________________________________
                                     ________________________________


<PAGE>

                             SCHEDULE 1

                       to Assignment Agreement

1.    Description and Date of Credit Agreement:

2.    Date of Assignment Agreement:               , 19  

3.    Amounts (As of Date of Item 2 above):

                                       Facility  Facility  Facility  Facility
                                          1*       2*          3*       4*   
                                       --------  --------  --------  --------
      a.   Total of Commitments
           (Loans)** under
           Credit Agreement            $         $         $         $       
                                       --------  --------  --------  --------

      b.   Assignee's Percentage
           of each Facility purchased
           under the Assignment
           Agreement***                       %         %         %         %
                                       --------  --------  --------  --------

      c.   Amount of Assigned Share in
           each Facility purchased under
           the Assignment
           Agreement                   $         $         $         $       
                                       --------  --------  --------  --------


4.    Assignee's Aggregate (Loan
      Amount)**  Commitment Amount
       Purchased Hereunder:                                $      
                                                           -------------

5.    Proposed Effective Date:                             -------------
 

Accepted and Agreed:

**[NAME OF ASSIGNOR]**                    **[NAME OF ASSIGNEE]**
By:__________________________             By:_________________________
Title:_______________________             Title:______________________



  *   Insert specific facility names per Credit Agreement
 **   If a  Commitment  has been  terminated,  insert  outstanding  Loans in
      place of Commitment
***   Percentage taken to 2 decimal places


<PAGE>

          Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

                  ADMINISTRATIVE INFORMATION SHEET
                  --------------------------------

   Attach Assignor's Administrative Information Sheet, which must
     include notice addresses for the Assignor and the Assignee
                      (Sample form shown below)

                        ASSIGNOR INFORMATION
                        --------------------

Contact:

Name:______________________________  Telephone No.:___________________________
Fax No.:___________________________  Telex No.:_______________________________
                                     Answerback:______________________________
Payment Information:

Name & ABA # of Destination Bank:_____________________________________________
                                 _____________________________________________
 
Account Name & Number for Wire Transfer:______________________________________
                                        ______________________________________

Other Instructions:___________________________________________________________
______________________________________________________________________________

Address for Notices for Assignor:                                             
                                                                        
                                                                        

                        ASSIGNEE INFORMATION
                        --------------------

Credit Contact:

Name:______________________________  Telephone No.:___________________________
Fax No.:___________________________  Telex No.:_______________________________
                                     Answerback:______________________________
Key Operations Contacts:

Booking Installation:______________  Booking Installation:____________________
Name:______________________________  Name:____________________________________
Telephone No.:_____________________  Telephone No.:___________________________
Fax No.:___________________________  Fax No.:_________________________________
Telex No.:_________________________  Telex No.:_______________________________
Answerback:________________________  Answerback:______________________________
<PAGE>

Payment Information:

Name & ABA # of Destination Bank:_____________________________________________
                                 _____________________________________________
 
Account Name & Number for Wire Transfer:______________________________________
                                        ______________________________________

Other Instructions:___________________________________________________________
______________________________________________________________________________


Address for Notices for Assignee:_____________________________________________
                                 _____________________________________________
                                 _____________________________________________


<PAGE>

  AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO ("ANB") INFORMATION

Assignee will be called promptly upon receipt of the signed agreement.

Initial Funding Contact:                Subsequent Operations Contact:
-----------------------                 -----------------------------

Name:______________________________     Name:______________________________
Telephone No.:_____________________     Telephone No.:_____________________
Fax No.:___________________________     Fax No.:___________________________
                     ANB Telex No.:________________________

Initial Funding Standards:
-------------------------

Libor - Fund 2 days after rates are set.

ANB Wire Instructions:
---------------------


Address for Notices for ANB:
---------------------------




<PAGE>

                             EXHIBIT "I"
                       to Assignment Agreement

                               NOTICE
                            OF ASSIGNMENT
                            -------------

                                                 _____________, 19_____


To:      **[NAME OF BORROWER]**
         _______________________
         _______________________

         **[NAME OF AGENT]**
         _______________________
         _______________________


From: **[NAME OF ASSIGNOR]** (the "Assignor")

      **[NAME OF ASSIGNEE]** (the "Assignee")


      1. We  refer  to  that  Credit  Agreement  (the  "Credit   Agreement")
described  in  Item  1  of  Schedule  1  attached  hereto   ("Schedule  1").
Capitalized  terms used herein and not otherwise  defined  herein shall have
the meanings attributed to them in the Credit Agreement.

      2. This Notice of  Assignment  (this  "Notice") is given and delivered
to the  Borrower  and the Agent  pursuant  to  Section  12.3.2 of the Credit
Agreement.

      3. The  Assignor and the  Assignee  have  entered  into an  Assignment
Agreement, dated as of ___________, 19___ (the   "Assignment"), pursuant  to
which,  among other things, the Assignor has sold,  assigned,  delegated and
transferred to the Assignee,  and the Assignee has  purchased,  accepted and
assumed  from the Assignor the  percentage  interest  specified in Item 3 of
Schedule  1 of all  outstandings,  rights and  obligations  under the Credit
Agreement  relating  to the  facilities  listed in Item 3 of Schedule 1. The
Effective  Date of the  Assignment  shall be the later of the date specified
in Item 5 of  Schedule 1 or two  Business  Days (or such  shorter  period as
agreed to by the Agent)  after this Notice of  Assignment  and any  consents
and  fees  required  by  Sections  **[12.3.1  and  12.3.2]**  of the  Credit
Agreement  have been  delivered to the Agent,  provided  that the  Effective
Date shall not occur if any  condition  precedent  agreed to by the Assignor
and the Assignee has not been satisfied.

*To be  included  only  if  consent  must  be  obtained  from  the  Borrower
pursuant to Section 12.3.1 of the Credit Agreement.
<PAGE>

      4. The Assignor  and the Assignee  hereby give to the Borrower and the
Agent  notice of the  assignment  and  delegation  referred  to herein.  The
Assignor  will confer with the Agent before the date  specified in Item 5 of
Schedule 1 to determine if the Assignment  Agreement  will become  effective
on such date  pursuant  to Section 3 hereof,  and will confer with the Agent
to determine  the  Effective  Date pursuant to Section 3 hereof if it occurs
thereafter.   The  Assignor   shall  notify  the  Agent  if  the  Assignment
Agreement  does not become  effective  on any proposed  Effective  Date as a
result of the failure to satisfy the conditions  precedent  agreed to by the
Assignor  and the  Assignee.  At the  request  of the  Agent,  the  Assignor
will  give  the  Agent  written  confirmation  of  the  satisfaction  of the
conditions precedent.

      5. The  Assignor or the  Assignee  shall pay to the Agent on or before
the Effective Date the  processing fee of $3,000  required by Section 12.3.2
of the Credit Agreement.

      6. If Notes are  outstanding  on the Effective  Date, the Assignor and
the  Assignee  request  and  direct  that the  Agent  prepare  and cause the
Borrower to execute and  deliver new Notes or, as  appropriate,  replacement
notes,  to the Assignor and the Assignee.  The Assignor and, if  applicable,
the Assignee  each agree to deliver to the Agent the original  Note received
by it from the  Borrower  upon its receipt of a new Note in the  appropriate
amount.

      7. The   Assignee   advises   the  Agent  that   notice  and   payment
instructions are set forth in the attachment to Schedule 1.

      8. The  Assignee  hereby  represents  and  warrants  that  none of the
funds,  monies,  assets  or  other  consideration  being  used to  make  the
purchase  pursuant  to the  Assignment  are "plan  assets" as defined  under
ERISA and that its rights,  benefits,  and  interests  in and under the Loan
Documents will not be "plan assets" under ERISA.

      9. The  Assignee  authorizes  the Agent to act as its agent  under the
Loan  Documents  in  accordance   with  the  terms  thereof.   The  Assignee
acknowledges  that the Agent has no duty to supply  information with respect
to the Borrower or the Loan  Documents  to the  Assignee  until the Assignee
becomes a party to the Credit Agreement.*

*May be eliminated if Assignee is a party to the Credit  Agreement  prior to
the Effective Date.

NAME OF ASSIGNOR                          NAME OF ASSIGNEE

By:___________________________            By:______________________________

Title:________________________            Title:___________________________


ACKNOWLEDGED **[AND CONSENTED TO]**       ACKNOWLEDGED**[AND CONSENTED TO]**
 BY **[NAME OF AGENT]**                    BY **[NAME OF BORROWER]**

By:___________________________            By:______________________________
Title:________________________            Title:___________________________

         **[Attach photocopy of Schedule 1 to Assignment]**


<PAGE>

                              EXHIBIT D

            LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

To:   American National Bank and Trust Company of Chicago,
      as Agent (the "Agent") under the Loan Agreement
      Described Below.

Re:   Loan Agreement, dated __________________,  _______   (as the
      same may be amended or modified, the "Loan Agreement"), among
      _______________ (the  "Borrower"),  the  Lenders  named  therein 
      and the Agent. Capitalized  terms used herein and not otherwise  
      defined  herein shall have the meanings assigned thereto in the 
      Loan Agreement.

      The Agent is  specifically  authorized  and  directed to act upon
the following  standing  money  transfer  instructions  with respect to
the  proceeds of Advances  or other  extensions  of credit from time to
time until  receipt by the Agent of a specific  written  revocation  of
such instructions by the Borrower,  provided,  however,  that the Agent
may otherwise  transfer  funds as hereafter  directed in writing by the
Borrower in  accordance  with  Section  13.1 of the Loan  Agreement  or
based on any  telephonic  notice made in  accordance  with Section 2.14
of the Loan Agreement.

Facility Identification Number(s)______________________________________________

Customer/Account Name__________________________________________________________
 
Transfer Funds To______________________________________________________________
                 ______________________________________________________________
                 ______________________________________________________________

For Account No.________________________________________________________________

Reference/Attention To_________________________________________________________

Authorized Officer (Customer Representative)        Date_______________________

___________________________                         ___________________________
(Please Print)                                      Signature

Bank Officer Name                                    Date______________________

___________________________                         ___________________________
(Please Print)                                      Signature

(Deliver Completed Form to Credit Support Staff For Immediate Processing)


<PAGE>

                       EXHIBIT E-1, E-2 & E-3

                                NOTES




<PAGE>

                              EXHIBIT F

                        CERTIFICATE OF BORROWER
                    RE: ANNUAL FINANCIAL STATEMENTS




<PAGE>

                               EXHIBIT G

                    MONTHLY COMPLIANCE CERTIFICATE




<PAGE>

                              EXHIBIT H

       MONTHLY COLLATERAL REPORT ACCOUNTS RECEIVABLE COLLATERAL




<PAGE>

                               EXHIBIT I

          ACTUAL COLLECTIONS AND ESTIMATED NET BILLING REPORT




<PAGE>

                             SCHEDULE 1

                 SUBSIDIARIES AND OTHER INVESTMENTS
                     (See Sections 5.8 and 6.14)

Investment    Jurisdiction of      Owned      Amount of      Percent
   In           Organization        By       Investment     Ownership
----------    ---------------     ------     ----------     ---------







<PAGE>

                               SCHEDULE 2

                         INDEBTEDNESS AND LIENS
                   (See Sections 5.14, 6.11 and 6.15)


                                                          Maturity
Indebtedness       Indebtedness       Property           and Amount
Incurred By           Owed To     Encumbered (If Any)   of Indebtedness
------------       ------------   -------------------   ---------------

<PAGE>


                               SCHEDULE 3

        PERMITTED AFFILIATES IN CONNECTION WITH ELIGIBLE ACCOUNTS


Any corporations majority owned or controlled by Nicholas G. Karabots.