REVOLVING CREDIT AGREEMENT



                                  by and among



                     AIR EXPRESS INTERNATIONAL CORPORATION,

                            THE LENDERS PARTY HERETO,

                       THE FIRST NATIONAL BANK OF CHICAGO,

                                   AS CO-AGENT

                                       AND

               THE BANK OF NEW YORK, AS AGENT AND AS ISSUING BANK




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

                                   $75,000,000
                                ----------------




                            Dated as of June 28, 1996





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


  <PAGE>







                                TABLE OF CONTENTS


1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION ............................. 1
     1.1. Definitions ..................................................... 1
     1.2. Principles of Construction ..................................... 21

2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT ....................... 22
     2.1. Revolving Credit Loans ......................................... 22
     2.2. Revolving Credit Notes ......................................... 22
     2.3. Procedure for Borrowing Revolving Credit Loans ................. 23
     2.4. Competitive Bid Loans; Procedure ............................... 24
     2.5. Termination or Reduction of Commitments and
          Letter of Credit Commitment .................................... 27
     2.6. Prepayments of the Loans ....................................... 27
     2.7. Use of Proceeds ................................................ 28
     2.8. Letter of Credit Sub-Facility .................................. 29
     2.9. Letter of Credit Participation and Funding
          Commitments .................................................... 30
     2.10. Absolute Obligation With Respect to Letter of
           Credit Payments ............................................... 31
     2.11. Payments ...................................................... 31
     2.12. Extensions .................................................... 32
     2.13. Agent's Records ............................................... 33

3. INTEREST, FEES, YIELD PROTECTIONS, ETC. ............................... 33
     3.1. Interest Rate and Payment Dates ................................ 33
     3.2. Fees ........................................................... 35
     3.3. Conversions and Continuations .................................. 35
     3.4. Concerning Eurodollar Interest Periods ......................... 36
     3.5. Indemnification for Loss ....................................... 37
     3.6. Capital Adequacy ............................................... 38
     3.7. Reimbursement for Increased Costs .............................. 38
     3.8. Illegality of Funding .......................................... 39
     3.9. Substituted Interest Rate ...................................... 40
     3.10. Taxes ......................................................... 40
     3.11. Option to Fund ................................................ 42

4. REPRESENTATIONS AND WARRANTIES ........................................ 43
     4.1. Subsidiaries ................................................... 43
     4.2. Existence and Power ............................................ 43
     4.3. Authority ...................................................... 44
     4.4. Binding Agreement .............................................. 44




                                   
<PAGE>




     4.5. Litigation ..................................................... 44
     4.6. Required Consents .............................................. 44
     4.7. Absence of Defaults; No Conflicting Agreements ................. 45
     4.8. Compliance with Applicable Laws ................................ 45
     4.9. Taxes .......................................................... 45
     4.10. Governmental Regulations ...................................... 46
     4.11. Federal Reserve Regulations; Use of Loan
           Proceeds ...................................................... 46
     4.12. Plans ......................................................... 46
     4.13. Financial Statements .......................................... 47
     4.14. Property ...................................................... 47
     4.15. Authorizations ................................................ 48
     4.16. Environmental Matters ......................................... 48
     4.17. Absence of Certain Restrictions ............................... 49
     4.18. Status as Senior Indebtedness ................................. 49
     4.19. Security Interest ............................................. 49
     4.20. No Misrepresentation .......................................... 49

5. CONDITIONS TO EFFECTIVENESS ........................................... 50
     5.1. Evidence of Action ............................................. 50
     5.2. This Agreement ................................................. 50
     5.3. Notes .......................................................... 50
     5.4. Subsidiary Guaranty ............................................ 50
     5.5. Absence of Litigation .......................................... 51
     5.6. Approvals and Consents ......................................... 51
     5.7. Intercompany Notes ............................................. 51
     5.8. Opinion of Counsel ............................................. 51
     5.9. Opinion of Special Counsel ..................................... 51
     5.10. Subordinated Indenture ........................................ 52
     5.11. Property, Public Liability and Other
           Insurance ..................................................... 52
     5.12. Fees .......................................................... 52
     5.13. Fees and Expenses of Special Counsel .......................... 52
     5.14. Other Documents ............................................... 52

6. CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF
   CREDIT ................................................................ 52
     6.1. Compliance ..................................................... 52
     6.2. Borrowing Request; Letter of Credit Request;
          Competitive Bid Request ........................................ 53
     6.3. Other Documents ................................................ 53

7. AFFIRMATIVE COVENANTS ................................................. 53


                                      -ii-


<PAGE>

     7.1. Financial Statements and Information ........................... 53
     7.2. Certificates; Other Information ................................ 54
     7.3. Legal Existence ................................................ 57
     7.4. Taxes .......................................................... 57
     7.5. Insurance ...................................................... 57
     7.6. Performance of Obligations ..................................... 58
     7.7. Condition of Property .......................................... 58
     7.8. Observance of Legal Requirements ............................... 58
     7.9. Inspection of Property; Books and Records;
          Discussions .................................................... 58
     7.10. Authorizations ................................................ 59
     7.11. Financial Covenants ........................................... 59
     7.12. Additional Material Domestic Subsidiaries ..................... 59
     7.13. Concerning the Collateral ..................................... 60

8. NEGATIVE COVENANTS .................................................... 60
     8.1. Indebtedness ................................................... 60
     8.2. Liens .......................................................... 61
     8.3. Merger, Consolidations and Acquisitions ........................ 62
     8.4. Dispositions ................................................... 64
     8.5. Investments, Loans, Etc. ....................................... 64
     8.6. Restricted Payments ............................................ 65
     8.7. Line of Business; Cash Management Procedures ................... 65
     8.8. ERISA .......................................................... 66
     8.9. Sale and Leaseback Transactions ................................ 66
     8.10. Amendments, Etc. of Certain Documents and
           Agreements .................................................... 66
     8.11. Transactions with Affiliates .................................. 66
     8.12. Issuance of Additional Capital Stock .......................... 66
     8.13. Limitation on Certain Restrictions on
           Subsidiaries .................................................. 67

9. DEFAULT ............................................................... 67
     9.1. Events of Default .............................................. 67
     9.2. Contract Remedies .............................................. 70

10. THE AGENT ............................................................ 71
     10.1. Appointment ................................................... 71
     10.2. Delegation of Duties .......................................... 71
     10.3. Exculpatory Provisions ........................................ 71
     10.4. Reliance by Agent ............................................. 72
     10.5. Notice of Default ............................................. 73
     10.6. Non-Reliance on Agent and Other Lenders ....................... 73






                                      -iii-
<PAGE>






     10.7. Indemnification ............................................... 73
     10.8. Agent in Its Individual Capacity .............................. 74
     10.9. Successor Agent ............................................... 75
     10.10. Co-Agent ..................................................... 75

11. OTHER PROVISIONS ..................................................... 75
     11.1. Amendments and Waivers ........................................ 75
     11.2. Notices ....................................................... 76
     11.3. No Waiver; Cumulative Remedies ................................ 78
     11.4. Survival of Representations and Warranties
           and Certain Obligations ....................................... 78
     11.5. Payment of Expenses and Taxes ................................. 78
     11.6. Lending Offices ............................................... 79
     11.7. Assignments and Participations ................................ 79
     11.8. Indemnity ..................................................... 81
     11.9. Limitation of Liability ....................................... 82
     11.10. Counterparts ................................................. 82
     11.11. Adjustments; Set-off ......................................... 83
     11.12. Construction ................................................. 84
     11.13. Governing Law ................................................ 84
     11.14. Headings Descriptive ......................................... 84
     11.15. Severability ................................................. 84
     11.16. Integration .................................................. 84
     11.17. Consent to Jurisdiction ...................................... 85
     11.18. Service of Process ........................................... 85
     11.19. No Limitation on Service or Suit ............................. 85
     11.20. WAIVER OF TRIAL BY JURY ...................................... 85

EXHIBITS

Exhibit A                     List of Commitments
Exhibit B-1                   Form of Revolving Credit Note
Exhibit B-2                   Form of Competitive Bid Note
Exhibit C                     Form of Borrowing Request
Exhibit D                     Form of Competitive Bid Request
Exhibit E                     Form of Invitation to Bid
Exhibit F                     Form of Competitive Bid
Exhibit G                     Form of Competitive Bid Accept/Reject Letter
Exhibit H                     Form of Competitive Bid Loan Confirmation
Exhibit I                     Form of Subsidiary Guaranty
Exhibit J                     Form of Assignment and Acceptance Agreement
Exhibit K                     Form of Compliance Certificate
Exhibit L                     Form of Opinion of Counsel




                                      -iv-
<PAGE>




Exhibit M                     Form of Opinion of Special Counsel
Exhibit N                     Form of Notice of Conversion/Continuation
Exhibit O                     Form of Letter of Credit Request

SCHEDULES

Schedule 1.1a                 List of Lending Offices
Schedule 1.1b                 List of Existing Pension Plans
Schedule 4.1                  List of Subsidiaries; Capitalization
Schedule 4.5                  List of Litigation
Schedule 5.4                  List of Persons Signing the Subsidiary Guaranty
                                    on the Effective Date
Schedule 8.1                  List of Existing Indebtedness
Schedule 8.2                  List of Existing Liens
Schedule 8.5                  List of Existing Investments





                                      -v-
<PAGE>




     REVOLVING  CREDIT  AGREEMENT,  dated as of June 28, 1996,  by and among AIR
EXPRESS INTERNATIONAL CORPORATION, a Delaware corporation (the "Borrower"),  the
lenders party hereto  (together with their  respective  assigns,  the "Lenders",
each a "Lender"),  THE FIRST NATIONAL BANK OF CHICAGO,  as Co-Agent and THE BANK
OF NEW YORK, as agent for the Lenders (in such capacity, the "Agent") and as the
Issuing Bank (as such term is defined below).


1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION

     1.1. Definitions

     As used in this Agreement,  terms defined in the preamble have the meanings
therein indicated, and the following terms have the following meanings:

     "ABR  Advances":  the Revolving  Credit Loans (or any portions  thereof) at
such time as they (or such portions) are made and/or being  maintained at a rate
of interest based upon the Alternate Base Rate.

     "Accountants":  Arthur  Andersen LLP (or any  successor  thereto),  or such
other firm of certified  public  accountants  of  recognized  national  standing
selected by the Borrower and reasonably satisfactory to the Agent.

     "Accumulated Funding Deficiency": as defined in Section 302 of ERISA.

     "Acquisition":   with  respect  to  any  Person,   the  purchase  or  other
acquisition  by such  Person,  by any means  whatsoever  (including  by  devise,
bequest,  gift,  through  a  dividend  or  otherwise  and  whether  in a  single
transaction  or in a series of related  transactions),  of (i) the Capital Stock
of, or other equity securities of, any other Person if, immediately  thereafter,
such other Person would be either a Subsidiary of such Person or otherwise under
the control of such  Person,  (ii) any  business,  going  concern or division or
segment  thereof,  or (iii) the  Property of any other  Person other than in the
ordinary course of business,  provided,  however,  that no acquisition of all or
substantially  all of the assets of such other  Person  shall be deemed to be in
the ordinary course of business.

     "Advance":  with respect to a Revolving  Credit  Loan,  an ABR Advance or a
Eurodollar Advance, as the case may be.

     "Affected Advance": as defined in Section 3.9.

     "Affiliate":  as to  any  Person,  any  other  Person  which,  directly  or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (i) to vote 5%

<PAGE>


or more of the securities or other  interests  having  ordinary voting power for
the election of directors or other managing Persons thereof or (ii) to direct or
cause the direction of the  management  and policies of such Person,  whether by
contract or otherwise.

     "Aggregate  Commitment  Amount":  on any  date,  the sum of the  Commitment
Amounts of all Lenders on such date.

     "Aggregate  Credit Exposure":  as of any date of determination,  the sum of
(i)  the  outstanding  principal  balance  of the  Revolving  Credit  Loans  and
Competitive Bid Loans of all Lenders, plus (ii) an amount equal to the Letter of
Credit Exposure of all Lenders.

     "Aggregate Revolving Credit Exposure": as of any date of determination, the
sum of (i) the outstanding  principal  balance of the Revolving  Credit Loans of
all Lenders,  plus (ii) an amount equal to the Letter of Credit  Exposure of all
Lenders.

     "Agreement":  this Revolving Credit Agreement,  as the same may be amended,
supplemented or otherwise modified from time to time.

     "Alternate  Base Rate":  on any date, a rate of interest per annum equal to
the higher of (i) the  Federal  Funds Rate in effect on such date plus 1/2 of 1%
or (ii) the BNY Rate in effect on such date.

     "Applicable Fee  Percentage":  (a) with respect to the Facility Fee and the
Letter of Credit  Commissions,  at all times during which the applicable Pricing
Level set forth below is in effect,  the percentage set forth below next to such
Pricing Level and under the applicable column, subject to the provisos set forth
below:

                            Applicable Fee Percentage

                                                          Letter of
                                    Facility              Credit
            Pricing Level             Fee                 Commissions
            -------------           --------              -----------

            Pricing Level I          0.125%                0.250%
            Pricing Level II         0.125%                0.275%
            Pricing Level III        0.150%                0.300%
            Pricing Level IV         0.150%                0.350%
            Pricing Level V          0.250%                0.500%

     (b)  The  Applicable  Fee  Percentage  shall  be  based  on the  Compliance
Certificate most recently delivered pursuant to Section 7.1(c), and shall become
effective on the date such Compliance Certificate is delivered to the Lenders.




                                      -2-
<PAGE>




     (c) Notwithstanding  anything to the contrary contained in this definition,
(i) with respect to each period,  if any,  during which the Borrower shall be in
Default  of  its  obligations  under  Section  7.1(c),   for  purposes  of  this
definition,  the  applicable  Pricing Level shall  conclusively  be deemed to be
Pricing Level V during each such period, and (ii) except as otherwise  specified
in the preceding clause (i), during the period  commencing on the Effective Date
and  ending on the date the  Compliance  Certificate  required  to be  delivered
pursuant to Section 7.1(c) in respect of the fiscal quarter ending June 30, 1996
is delivered to the Agent,  the applicable  Pricing Level shall  conclusively be
deemed to be Pricing Level I.

     "Applicable  Lending Office":  in respect of any Lender, (i) in the case of
such  Lender's ABR  Advances and  Competitive  Bid Loans,  its Domestic  Lending
Office and (ii) in the case of such Lender's Eurodollar Advances, its Eurodollar
Lending Office.

     "Applicable  Margin":  (a) with respect to the unpaid  principal  amount of
Eurodollar  Advances,  in each case at all  times  during  which the  applicable
Pricing Level set forth below is in effect,  the percentage set forth below next
to such Pricing Level, subject to the provisos set forth below:

                  Pricing Level                    Applicable Margin
                  -------------                    -----------------

               Pricing Level I                         0.250%
               Pricing Level II                        0.275% 
               Pricing Level III                       0.300% 
               Pricing Level IV                        0.350% 
               Pricing Level V                         0.500%.

     (b) The Applicable Margin shall be based on the Compliance Certificate most
recently delivered pursuant to Section 7.1(c), and shall become effective on the
date such Compliance Certificate is delivered to the Lenders.

     (c) Notwithstanding  anything to the contrary contained in this definition,
(i) with respect to each period,  if any,  during which the Borrower shall be in
Default  of  its  obligations  under  Section  7.1(c),   for  purposes  of  this
definition,  the  applicable  Pricing Level shall  conclusively  be deemed to be
Pricing Level V during each such period, and (ii) except as otherwise  specified
in the preceding clause (i), during the period  commencing on the Effective Date
and  ending on the date the  Compliance  Certificate  required  to be  delivered
pursuant to Section 7.1(c) in respect of the fiscal quarter ending June 30, 1996
is delivered to the Agent,  the applicable  Pricing Level shall  conclusively be
deemed to be Pricing Level I.

     "Approved Bank": any bank whose short-term commercial paper rating from (i)
S&P is at least A-1 or the equivalent thereof or (ii) Moody's is at least P-1 or
the equivalent thereof.




                                      -3-
<PAGE>





     "Assignment  and  Acceptance  Agreement":   an  assignment  and  acceptance
agreement executed by an assignor and an assignee pursuant to which the assignor
assigns  to  the  assignee  all or any  portion  of  such  assignor's  Note  and
Commitment, substantially in the form of Exhibit J.

     "Assignment Fee": as defined in Section 11.7(b).

     "Authorized  Signatory":  as to (i) any Person which is a corporation,  the
chairman of the board,  the president,  any vice president,  the chief financial
officer or any other duly authorized  officer  (acceptable to the Agent) of such
Person and (ii) any Person which is not a  corporation,  the general  partner or
other managing Person thereof.

     "Benefited Lender": as defined in Section 11.11.

     "Bid Rate": as defined in Section 2.4(b).

     "BNY": The Bank of New York.

     "BNY  Rate":  a rate of  interest  per annum  equal to the rate of interest
publicly  announced  in New  York  City by BNY  from  time to time as its  prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.

     "Borrowing  Date": any Business Day on which (i) the Lenders make Revolving
Credit Loans in accordance with a Borrowing  Request or (ii) one or more Lenders
make Competitive Bid Loans pursuant to Competitive Bids which have been accepted
by the Borrower.

     "Borrowing  Request":  a request for Revolving  Credit Loans in the form of
Exhibit C.

     "Business  Day":  for all  purposes  other than as set forth in clause (ii)
below, (i) any day other than a Saturday,  a Sunday or a day on which commercial
banks  located  in New York  City are  authorized  or  required  by law or other
governmental  action  to  close,  and  (ii)  with  respect  to all  notices  and
determinations  in connection  with,  and payments of principal and interest on,
Eurodollar  Advances,  any day which is a Business  Day  described in clause (i)
above and which is also a day on which  Eurodollar  funding between banks may be
carried on in London, England.

     "Capital  Lease  Obligations":  with respect to any Person,  obligations of
such Person with  respect to leases  which are  required to be  capitalized  for
financial reporting purposes in accordance with GAAP.




                                      -4-
<PAGE>




     "Capital  Stock":  as to any  Person,  all shares,  interests,  partnership
interests,  limited liability company  interests,  participations,  rights in or
other equivalents (however designated) of such Person's equity interest (however
designated) and any rights,  warrants or options exchangeable for or convertible
into such shares, interests, participations, rights or other equivalents.

     "Cash Equivalents":  (i) securities issued or directly and fully guaranteed
or  insured  by the  United  States  or any  agency or  instrumentality  thereof
(provided  that the full  faith and  credit of the  United  States is pledged in
support thereof) having  maturities of not more than six months from the date of
acquisition, (ii) Dollar denominated time deposits,  certificates of deposit and
bankers  acceptances  of (x) any Lender or (y) any Approved  Bank,  in each case
with maturities of not more than six months from the date of acquisition,  (iii)
commercial  paper  issued by any Approved  Bank or by the parent  company of any
Approved Bank and  commercial  paper issued by, or guaranteed by, any industrial
or financial company with a short-term  commercial paper rating of at least A- 1
or the equivalent  thereof by S&P or at least P-1 or the  equivalent  thereof by
Moody's,  or guaranteed by any industrial or financial  company with a long term
unsecured  debt rating of at least A or A-2, or the  equivalent of each thereof,
by S&P or  Moody's,  as the case may be,  and in each case  maturing  within six
months after the date of acquisition,  (iv) marketable direct obligations issued
by any state of the United States or any political subdivision of any such state
or any public  instrumentality  thereof maturing within six months from the date
of acquisition  thereof and, at the time of  acquisition,  having one of the two
highest  ratings  obtainable  from either S&P or Moody's and (v)  investments in
money  market  funds  substantially  all the  assets of which are  comprised  of
securities of the types described in clauses (i) through (iv) above.

     "Change of Control":  after the Effective Date, (i) any "person" or "group"
(within the meaning of Sections  13(d) and 14(d)(2) of the  Securities  Exchange
Act of 1934, as amended) shall have become the "beneficial owner" (as defined in
Rule 13d-3 under such Act) of Voting  Shares  entitled to exercise more than 20%
of the total power of all outstanding Voting Shares (including any Voting Shares
which are not then  outstanding  of which  such  person  or group is deemed  the
beneficial  owner),  or (ii) a change in the Board of  Directors of the Borrower
shall  have  occurred  in which the  individuals  who  constituted  the Board of
Directors  of the Borrower at the  beginning of the two year period  immediately
preceding  such change  (together  with any other director whose election by the
Board of  Directors  of the  Borrower or whose  nomination  for  election by the
shareholders  of the  Borrower  was approved by a vote of at least two thirds of
the directors  then in office who either were directors at the beginning of such
period or whose  election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the directors then in office.



                                      -5-
<PAGE>





     "Code":  the Internal Revenue Code of 1986, as the same may be amended from
time to time, or any successor  thereto,  and the rules and  regulations  issued
thereunder, as from time to time in effect.

     "Collateral": the assets and other property in which a security interest is
granted to the Agent under the Loan Documents.

     "Commitment":  in respect of any Lender,  such Lender's  undertaking during
the Commitment  Period to make Revolving  Credit Loans and to participate in the
obligations  of the  Issuing  Bank under and in  connection  with each Letter of
Credit, in each case subject to the terms and conditions hereof, in an aggregate
outstanding principal amount not exceeding the Commitment Amount of such Lender.

     "Commitment  Amount":  as of any date and with  respect to any Lender,  the
amount set forth adjacent to its name under the heading  "Commitment  Amount" in
Exhibit  A on such  date or, in the  event  that  such  Lender is not  listed on
Exhibit A, the  "Commitment  Amount"  which such Lender  shall have assumed from
another Lender in accordance  with Section 11.7 on or prior to such date, as the
same may be reduced from time to time pursuant to Section 2.5.

     "Commitment  Percentage":  as to any Lender,  the percentage  equal to such
Lender's  Commitment  Amount divided by the Aggregate  Commitment  Amount of all
Lenders.

     "Commitment   Period":  the  period  from  the  Effective  Date  until  the
Commitment Termination Date.

     "Commitment  Termination Date": the earlier of the Business Day immediately
preceding the Maturity Date or such other date upon which the Commitments  shall
have been terminated in accordance with Section 2.5 or Section 9.2.

     "Compensatory Interest Payment": as defined in Section 3.1(c).

     "Competitive  Bid":  an offer by a Lender to make a  Competitive  Bid Loan,
substantially in the form of Exhibit F.

     "Competitive  Bid  Accept/Reject  Letter":  a  notification  given  by  the
Borrower pursuant to Section 2.4(c) substantially in the form of Exhibit G.

     "Competitive  Bid Loan": a Loan from a Lender to the Borrower made pursuant
to Section 2.4.




                                      -6-
<PAGE>





     "Competitive  Bid Loan  Confirmation":  a  confirmation  by the  Agent to a
Lender of the  acceptance  by the  Borrower of any  Competitive  Bid (or Portion
thereof) made by such Lender, substantially in the form of Exhibit H.

     "Competitive Bid Note" and  "Competitive Bid Notes":  as defined in Section
2.4(g).

     "Competitive Bid Request":  a request by the Borrower for Competitive Bids,
substantially in the form of Exhibit D.

     "Competitive  Interest  Period":  with respect to any Competitive Bid Loan,
the period commencing on the Borrowing Date with respect to such Competitive Bid
Loan and  ending on the date  requested  in the  Competitive  Bid  Request  with
respect to such Competitive Bid Loan, which date shall not be earlier than seven
days after the  Borrowing  Date with  respect to such  Competitive  Bid Loan nor
later than 90 days after the Borrowing Date with respect to such Competitive Bid
Loan; provided,  however, that if any Competitive Interest Period would end on a
day other than a Business  Day,  such  Interest  Period shall be extended to the
next succeeding  Business Day, unless such next succeeding Business Day would be
a date on or after the Maturity  Date, in which case such  Competitive  Interest
Period shall end on the next preceding  Business Day, and provided  further that
no Competitive Interest Period shall end after the Maturity Date. Interest shall
accrue from and including the first day of a Competitive Interest Period to, but
excluding, the last day of such Competitive Interest Period.

     "Compliance  Certificate":  a  certificate  substantially  in the  form  of
Exhibit K.

     "Consolidated":  the Borrower and its Subsidiaries on a consolidated  basis
in accordance with GAAP.

     "Consolidated  EBIT":  for any period,  net income of the  Borrower and its
Subsidiaries  on a  Consolidated  basis in respect of such  period,  plus to the
extent deducted in determining such net income, the sum of, without duplication,
interest  expense and provision  for income taxes,  in each case of the Borrower
and its Subsidiaries on a Consolidated basis.

     "Consolidated  EBITDA":  for any period, net income of the Borrower and its
Subsidiaries  on a  Consolidated  basis in respect of such  period,  plus to the
extent deducted in determining such net income, the sum of, without duplication,
interest  expense,  provision for income taxes,  depreciation,  amortization and
other non-cash  charges,  in each case of the Borrower and its Subsidiaries on a
Consolidated basis.




                                      -7-
<PAGE>





     "Consolidated Net Worth": with respect to the Borrower and its Subsidiaries
on a Consolidated  basis at any date, the  stockholders'  equity of the Borrower
and the Subsidiaries on a Consolidated basis.

     "Consolidated  Total Debt":  at any date of  determination,  the  aggregate
Indebtedness  (other  than  Indebtedness  described  in clause  (iv)  (except in
respect of unreimbursed  obligations in respect of drafts drawn under letters of
credit  which  have  been paid by the  issuer  thereof)  or clause  (vii) of the
definition  thereof)  on such date of the  Borrower  and its  Subsidiaries  on a
Consolidated basis.

     "Contingent  Obligation":  as to any Person (the "secondary obligor"),  any
obligation of such secondary obligor (i) guaranteeing or in effect  guaranteeing
any return on any investment made by another Person,  or (ii) guaranteeing or in
effect  guaranteeing  any  Indebtedness,  lease,  dividend  or other  obligation
("primary  obligation")  of any other  Person  (the  "primary  obligor")  in any
manner,  whether  directly or indirectly,  including,  without  limitation,  any
obligation of such secondary obligor,  whether  contingent,  (A) to purchase any
such primary obligation or any Property constituting direct or indirect security
therefor,  (B) to advance or supply funds (x) for the purchase or payment of any
such primary  obligation or (y) to maintain working capital or equity capital of
the primary  obligor or  otherwise  to maintain the net worth or solvency of the
primary obligor, (C) to purchase Property,  securities or services primarily for
the purpose of assuring the  beneficiary  of any such primary  obligation of the
ability of the primary obligor to make payment of such primary  obligation,  (D)
otherwise to assure or hold harmless the beneficiary of such primary  obligation
against loss in respect  thereof,  and (E) in respect of the  liabilities of any
partnership in which such secondary obligor is a general partner,  except to the
extent  that  such  liabilities  of such  partnership  are  nonrecourse  to such
secondary obligor and its separate Property,  provided,  however,  that the term
"Contingent  Obligation"  shall not include the  indorsement of instruments  for
deposit or  collection  in the ordinary  course of  business.  The amount of any
Contingent  Obligation  of a Person shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent  Obligation  is made or, if not stated or  determinable,  the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith.

     "Control Person": as defined in Section 3.6.

     "Default":  any event or condition which constitutes an Event of Default or
which,  with the giving of notice,  the lapse of time,  or any other  condition,
would, unless cured or waived, become an Event of Default.

     "Disposition":  with respect to any Person, any sale, assignment,  transfer
or other  disposition by such Person, by any means, of (i) the Capital Stock of,
or other equity interests of, any other Person, (ii) any business, going concern
or division or segment thereof, or (iii) any other Property of such Person other
than in the ordinary course of



                                      -8-
<PAGE>




business,  provided, however, that no sale, assignment,  transfer or disposition
of (a)  all or  substantially  all of the  Property  of such  Person  or (b) any
Operating Entity shall be deemed to be in the ordinary course of business.

     "Disqualified  Stock": any class or series of Capital Stock that, either by
its  terms,  by the  terms  of any  security  into  which it is  convertible  or
exchangeable  at the option of the holder thereof by contract or otherwise,  is,
or upon the  happening  of an event or passage of time would be,  required to be
redeemed  prior  to the  Maturity  Date (as from  time to time  extended)  or is
redeemable at the option of the holder thereof at any time prior to the Maturity
Date (as from time to time extended),  or is convertible into or exchangeable at
the option of the holder  thereof for debt  securities  at any time prior to the
Maturity Date (as from time to time extended).

     "Dollars" and "$": lawful currency of the United States of America.

     "Domestic Lending Office": in respect of any Lender,  initially, the office
or offices of such Lender designated as such on Schedule 1.1a; thereafter,  such
other office of such Lender through which it shall be making or maintaining  ABR
Advances or Competitive  Bid Loans,  as reported by such Lender to the Agent and
the Borrower,  provided that any Lender may so report different Domestic Lending
Offices  for  all of its ABR  Advances  and all of its  Competitive  Bid  Loans,
whereupon  references to the Domestic  Lending  Office of such Lender shall mean
either or both of such offices, as applicable.

     "Domestic Subsidiary": each Subsidiary of the Borrower other than a Foreign
Subsidiary.

     "Effective Date": June 28, 1996.

     "Eligible  Assignee":  a Lender,  any  affiliate  of a Lender and any other
bank,   insurance  company,   pension  fund,  mutual  fund  or  other  financial
institution.

     "Employee  Benefit  Plan":  an employee  benefit plan within the meaning of
Section 3(3) of ERISA  maintained,  sponsored or contributed to by the Borrower,
any of its Subsidiaries or any ERISA Affiliate.

     "Environmental Laws": any and all federal, state and local laws relating to
the  environment,  the  use,  storage,  transporting,  manufacturing,  handling,
discharge,   disposal  or  recycling  of  hazardous  substances,   materials  or
pollutants or industrial hygiene,  and including,  without  limitation,  (i) the
Comprehensive  Environmental  Response,   Compensation  and  Liability  Act,  as
amended,  42 USCA ss.9601 et seq.; (ii) the Resource  Conservation  and Recovery
Act of 1976,  as amended,  42 USCA  ss.6901 et seq.;  (iii) the Toxic  Substance
Control  Act,  as amended,  15 USCA  ss.2601 et seq.;  (iv) the Water  Pollution
Control  Act, as  amended,  33 USCA  ss.1251 et seq.;  (v) the Clean Air Act, as
amended, 42




                                      -9-
<PAGE>




USCA ss.7401 et seq.; (vi) the Hazardous Materials Transportation  Authorization
Act of  1994,  as  amended,  49  USCA  ss.5101  et seq.  and  (vii)  all  rules,
regulations, judgments, decrees, injunctions and restrictions thereunder and any
analogous state law.

     "ERISA":  the Employee  Retirement  Income Security Act of 1974, as amended
from time to time, and the rules and regulations issued thereunder, as from time
to time in effect.

     "ERISA  Affiliate":  when used with  respect to an Employee  Benefit  Plan,
ERISA, the PBGC or a provision of the Code pertaining to employee benefit plans,
any Person that is a member of any group of organizations  within the meaning of
Sections  414(b)  or (c) of the Code  (or,  solely  for  purposes  of  potential
liability under Section  302(c)(11) of ERISA and Section  412(c)(11) of the Code
and the lien created  under  Section  302(f) of ERISA and Section  412(n) of the
Code,  Sections  414(m) or (o) of the Code) of which the  Borrower or any of its
Subsidiaries is a member.

     "Eurodollar Advances": the Revolving Credit Loans (or any portions thereof)
at such time as they (or such  portions)  are made or are being  maintained at a
rate of interest based upon the Eurodollar Rate.

     "Eurodollar  Interest  Period":  with  respect  to any  Eurodollar  Advance
requested by the  Borrower,  the period  commencing  on, as the case may be, the
Borrowing Date or  Conversion/Continuation  Date with respect to such Eurodollar
Advance and ending one, two, three or six months thereafter,  as selected by the
Borrower  in its  irrevocable  Borrowing  Request or its  irrevocable  Notice of
Conversion/Continuation,  provided, however, that (i) if any Eurodollar Interest
Period would otherwise end on a day which is not a Business Day, such Eurodollar
Interest Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Eurodollar  Interest Period into
another calendar month, in which event such Eurodollar Interest Period shall end
on the  immediately  preceding  Business  Day and (ii) any  Eurodollar  Interest
Period that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such  Eurodollar  Interest  Period)  shall end on the last  Business Day of a
calendar  month.  Eurodollar  Interest  Periods  shall be  subject  to the rules
contained in Section 3.4.

     "Eurodollar  Lending  Office":  in respect of any  Lender,  initially,  the
office,  branch or affiliate of such Lender  designated as such on Schedule 1.1a
(or, if no such office  branch or affiliate is specified,  its Domestic  Lending
Office);  thereafter,  such other  office,  branch or  affiliate  of such Lender
through which it shall be making or maintaining Eurodollar Advances, as reported
by such Lender to the Agent and the Borrower.

     "Eurodollar   Rate":  with  respect  to  the  Eurodollar   Interest  Period
applicable  to any  Eurodollar  Advance,  a  rate  of  interest  per  annum,  as
determined by the Agent, obtained



                                      -10-
<PAGE>




by dividing  (and then  rounding  to the  nearest  1/16 of 1% or, if there is no
nearest 1/16 of 1%, then to the next higher 1/16 of 1%):

     (b) the rate,  as  reported  by BNY to the Agent,  quoted by BNY to leading
banks in the  interbank  eurodollar  market as the rate at which BNY is offering
Dollar deposits in an amount equal  approximately  to the Eurodollar  Advance of
BNY to which  such  Interest  Period  shall  apply  for a  period  equal to such
Interest Period,  as quoted at approximately  11:00 a.m. two Business Days prior
to the first day of such Interest Period, by

     (c) a number equal to 1.00 minus the  aggregate of the then stated  maximum
rates  during  such  Eurodollar  Interest  Period  of all  reserve  requirements
(including,  without limitation,  marginal, emergency,  supplemental and special
reserves),  expressed as a decimal, established by the Board of Governors of the
Federal  Reserve  System and any other banking  authority to which BNY and other
major United States money center banks are subject,  in respect of  eurocurrency
funding (currently referred to as "Eurocurrency  liabilities" in Regulation D of
the Board of Governors of the Federal Reserve System) or in respect of any other
category of  liabilities  including  deposits by reference to which the interest
rate on  Eurodollar  Advances is  determined  or any category of  extensions  of
credit or other  assets  which  includes  loans by  non-domestic  offices of any
Lender to United States  residents.  Such reserve  requirements  shall  include,
without  limitation,  those imposed under such Regulation D. Eurodollar Advances
shall be deemed to  constitute  Eurocurrency  liabilities  and as such  shall be
deemed to be subject to such reserve requirements without benefit of credits for
proration, exceptions or offsets which may be available from time to time to any
Lender  under  such   Regulation  D.  The  Eurodollar  Rate  shall  be  adjusted
automatically  on and as of the effective date of any change in any such reserve
requirement.

     "Event of Default":  any of the events  specified in Section 9.1,  provided
that any requirement  for the giving of notice,  the lapse of time, or any other
condition has been satisfied.

     "Existing Pension Plan": a Pension Plan listed on Schedule 1.1b hereto.

     "Extension Request" as defined in Section 2.12.

     "Facility Fee" as defined in Section 3.2(a).

     "Federal  Funds  Rate":  for any day,  a rate  per  annum  (expressed  as a
decimal,  rounded upwards, if necessary,  to the next higher 1/100 of 1%), equal
to the weighted  average of the rates on overnight  federal  funds  transactions
with members of the Federal  Reserve System arranged by federal funds brokers on
such day, as published  by the Federal  Reserve Bank of New York on the Business
Day next succeeding  such day,  provided that (i) if the day for which such rate
is to be  determined  is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day




                                      -11-
<PAGE>




as so published on the next  succeeding  Business  Day, and (ii) if such rate is
not so published  for any day, the Federal  Funds Rate for such day shall be the
average of the quotations for such day on such  transactions  received by BNY as
determined by BNY and reported to the Agent.

     "Fees": as defined in Section 2.11(a).

     "Financial Officer":  as to any Person, the chief financial officer of such
Person or such other officer as shall be satisfactory to the Agent.

     "Financial Statements": as defined in Section 4.13.

     "Foreign Subsidiary": each Subsidiary of the Borrower that is not organized
under the laws of the United States.

     "Funded Current Liability Percentage":  as defined in Section 401(a)(29) of
the Code.

     "GAAP":  generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public  Accountants and in the statements and pronouncements of the
Financial  Accounting  Standards  Board or in such other statement by such other
entity as may be approved by a significant segment of the accounting profession,
which  are  applicable  to the  circumstances  as of the date of  determination,
consistently applied.

     "Governmental  Authority":  any foreign, federal, state, municipal or other
government,  or  any  department,  commission,  board,  bureau,  agency,  public
authority or instrumentality thereof, or any court or arbitrator.

     "Hazardous Substance": any hazardous or toxic substance, material or waste,
including,  but not  limited  to, (i) those  substances,  materials,  and wastes
listed in the United States  Department of  Transportation  Hazardous  Materials
Table (49 CFR 172.111) or by the  Environmental  Protection  Agency as hazardous
substances (40 CFR Part 302) and amendments  thereto and  replacements  therefor
and (ii) any substance,  pollutant or material defined as, or designated in, any
Environmental  Law as a "hazardous  substance,"  "toxic  substance,"  "hazardous
material,"  "hazardous waste," "restricted hazardous waste," "pollutant," "toxic
pollutant" or words of similar import.

     "Highest  Lawful Rate":  as to any Lender or the Issuing Bank,  the maximum
rate  of  interest,  if  any,  that at any  time  or  from  time to time  may be
contracted for, taken, charged or received by such Lender on the Notes or by the
Issuing Bank on the Reimbursement  Agreements held thereby,  as the case may be,
or which may be owing to



                                      -12-
<PAGE>




such Lender or the  Issuing  Bank  pursuant  the Loan  Documents  under the laws
applicable to such Lender or the Issuing Bank and this transaction.

     "Indebtedness":  as to any Person,  at a particular  time,  all items which
constitute,  without  duplication,  (i)  indebtedness  for borrowed money or the
deferred  purchase price of Property (other than trade payables  incurred in the
ordinary  course of  business),  (ii)  indebtedness  evidenced by notes,  bonds,
debentures  or  similar  instruments,  (iii)  obligations  with  respect  to any
conditional sale or title retention  agreement,  (iv) indebtedness arising under
acceptance  facilities and the amount available to be drawn under all letters of
credit  issued for the  account of such  Person and,  without  duplication,  all
drafts drawn  thereunder to the extent such Person shall not have reimbursed the
issuer in respect of the issuer's  payment of such drafts,  (v) all  liabilities
secured by any Lien on any Property owned by such Person even though such Person
has not assumed or otherwise  become liable for the payment  thereof (other than
carriers', warehousemen's,  mechanics', repairmen's or other like non-consensual
statutory Liens arising in the ordinary course of business),  (vi) Capital Lease
Obligations, and (vii) Contingent Obligations.

     "Indemnified Liabilities": as defined in Section 11.5.

     "Indemnified Person" and "Indemnified Persons": as defined in Section 11.8.

     "Intercompany  Indebtedness":  (i)  Indebtedness  of the Borrower to one or
more of its wholly-owned  Subsidiaries,  and (ii) demand  indebtedness of one or
more of the wholly-owned Subsidiaries of the Borrower to the Borrower or any one
or more of the other wholly-owned Subsidiaries of the Borrower.

     "Interest  Coverage Ratio": at any date of determination,  the ratio of (i)
Consolidated  EBIT  to  (ii)  the  interest  expense  of the  Borrower  and  its
Subsidiaries  on a Consolidated  basis, in each case for the four fiscal quarter
period  ending  on such  date or,  if such  date is not the last day of a fiscal
quarter, for the immediately preceding four fiscal quarter period.

     "Interest  Payment Date":  (i) as to any ABR Advance,  the last day of each
March,  June,  September  and December  commencing  on the first of such days to
occur after such ABR Advance is made or any  Eurodollar  Advance is converted to
an ABR Advance,  (ii) as to any Eurodollar  Advance as to which the Borrower has
selected a Eurodollar  Interest Period of one, two or three months, the last day
of the applicable Eurodollar Interest Period, (iii) as to any Eurodollar Advance
as to which the  Borrower  has  selected  a  Eurodollar  Interest  Period of six
months,  the day which is three  months  after the first day of such  Eurodollar
Interest Period and the last day of such Eurodollar  Interest Period, (iv) as to
any Competitive Bid Loan, the last day of such Competitive  Interest Period, and
(v) as to all Advances and Competitive Bid Loans, the Maturity Date.




                                      -13-
<PAGE>





     "Interest Period": a Eurodollar  Interest Period or a Competitive  Interest
Period, as the context may require.

     "Investments": as defined in Section 8.5.

     "Invitation to Bid": an invitation to make  Competitive Bids in the form of
Exhibit E.

     "Issuing Bank": BNY

     "Letter of Credit" and "Letters of Credit": as defined in Section 2.8.

     "Letter of Credit Commissions": as defined in Section 3.2(b).

     "Letter of Credit Commitment":  the commitment of the Issuing Bank to issue
Letters of Credit under and in accordance with the terms of this Agreement,  and
the commitment of the Lenders to participate in the Letter of Credit Exposure as
set forth in Section 2.9.

     "Letter  of  Credit  Exposure":  at any  date,  (i) in  respect  of all the
Lenders, the sum, without duplication,  of (x) the aggregate undrawn face amount
of the outstanding  Letters of Credit at such date, (y) the aggregate  amount of
unpaid drafts drawn on all Letters of Credit at such date, and (z) the aggregate
unpaid Reimbursement  Obligations at such date (after giving effect to any Loans
made  on such  date to pay any  such  Reimbursement  Obligations),  and  (ii) in
respect of any Lender,  an amount equal to such Lender's  Commitment  Percentage
multiplied by the amount determined under clause (i) of this definition.

     "Letter of Credit Request": a request in the form of Exhibit O.

     "Leverage  Ratio":  at  any  date  of  determination,   the  ratio  of  (x)
Consolidated  Total  Debt on such date to (y)  Consolidated  EBITDA for the four
fiscal  quarter  period ending on such date or, if such date is not the last day
of a fiscal quarter, for the immediately preceding four fiscal quarter period.

     "Lien":  any  mortgage,  pledge,  hypothecation,   assignment,  deposit  or
preferential  arrangement,  encumbrance,  lien  (statutory  or other),  or other
security  agreement  or  security  interest  of any kind or  nature  whatsoever,
including,  without  limitation,  any conditional  sale or other title retention
agreement  and any capital or  financing  lease  having  substantially  the same
economic effect as any of the foregoing.

     "Loans":  the Revolving  Credit Loans and/or the  Competitive Bid Loans, as
the case may be.




                                      -14-
<PAGE>





     "Loan Documents":  collectively,  this Agreement, the Notes, the Subsidiary
Guaranty and the Reimbursement Agreements.

     "Loan Party": with respect to any Loan Document, any Person (other than the
Agent,  the Issuing Bank or any Lender) which,  in accordance  with the terms of
such Loan Document, is or is to be a party thereto.

     "Managing  Person":  with respect to any Person that is a (i)  corporation,
its board of directors,  (ii) a limited liability company, its board of control,
managing member or members,  (iii) a limited  partnership,  its general partner,
(iv) a general  partnership,  its managing partner or executive committee or (v)
such other managing body or Person analogous to the foregoing.

     "Margin Stock": any "margin stock", as defined in Regulation U of the Board
of  Governors  of the  Federal  Reserve  System,  as the  same  may be  amended,
supplemented or otherwise modified from time to time.

     "Material  Adverse Change":  a material adverse change in (i) the financial
condition,  operations,  business,  prospects or Property of (A) the Borrower or
(B) the Borrower and its Subsidiaries  taken as a whole, (ii) the ability of the
Borrower or any Subsidiary to perform its  obligations  under the Loan Documents
or (iii) the ability of the Agent, the Issuing Bank or any Lender to enforce the
Loan Documents.

     "Material  Adverse Effect":  a material adverse effect on (i) the financial
condition,  operations,  business,  prospects or Property of (A) the Borrower or
(B) the Borrower and its Subsidiaries  taken as a whole, (ii) the ability of the
Borrower or any Subsidiary to perform its  obligations  under the Loan Documents
or (iii) the ability of the Agent, the Issuing Bank or any Lender to enforce the
Loan Documents.

     "Material Domestic  Subsidiary":  as of any date, each Domestic  Subsidiary
which (a) as of the fiscal quarter end immediately preceding such date had gross
revenues in excess of $2,500,000 for the four fiscal quarters then ended, or (b)
has total assets in excess of $5,000,000.

     "Maturity Date":  June 28, 1999 (or any date subsequent  thereto  resulting
from an  extension  of the  Maturity  Date  pursuant to Section  2.12),  or such
earlier  date on which  the Notes  shall  become  due and  payable,  whether  by
acceleration or otherwise.

     "Maximum Offer": as defined in Section 2.4(b).

     "Maximum Request": as defined in Section 2.4(a).

     "Moody's": Moody's Investors Service, Inc., or any successor thereto.




                                      -15-
<PAGE>





     "Multiemployer  Plan":  a Pension  Plan  which is a  multiemployer  plan as
defined in Section 4001(a)(3) of ERISA.

     "Note":  a Revolving Credit Note or a Competitive Bid Note, as the case may
be.

     "Notes":  the Revolving  Credit Notes and/or the  Competitive Bid Notes, as
the case may be.

     "Notice of Conversion/Continuation":  a notice substantially in the form of
Exhibit N.

     "Operating Entity":  (i) any Person, (ii) any business or operating unit of
a Person  which is,  or could be,  operated  separate  and apart  from the other
businesses and operations of such Person,  or (ii) any other line of business or
business segment.

     "PBGC": the Pension Benefit Guaranty  Corporation  established  pursuant to
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
functions thereof.

     "Pension Plan":  at any date of  determination,  any Employee  Benefit Plan
(including  a  Multiemployer  Plan),  the funding  requirements  of which (under
Section  302 of ERISA or Section 412 of the Code) are, or at any time within the
six  years  immediately  preceding  such  date,  were in whole  or in part,  the
responsibility of the Borrower, any of its Subsidiaries or any ERISA Affiliate.

     "Permitted Acquisition": an Acquisition permitted by Section 8.3(e).

     "Permitted Lien": a Lien permitted to exist under Section 8.2(a).

     "Person":  any individual,  firm,  partnership,  limited liability company,
joint  venture,  corporation,  association,  business  enterprise,  joint  stock
company,  unincorporated association, trust, Governmental Authority or any other
entity, whether acting in an individual,  fiduciary,  or other capacity, and for
the purpose of the definition of "ERISA Affiliate", a trade or business, and for
the purpose of the definition of "ERISA Affiliate", a trade or business.

     "Portion": as defined in Section 2.4(b).

     "Pricing  Level":  Pricing  Level I, Pricing  Level II,  Pricing Level III,
Pricing Level IV or Pricing Level V, as the case may be.




                                      -16-
<PAGE>





     "Pricing  Level I": any time when the Leverage  Ratio is less than or equal
to 1.80:1.00.

     "Pricing  Level  II":  any time when the  Leverage  Ratio is  greater  than
1.80:1.00 but less than or equal to 2.00:1.00.

     "Pricing  Level  III":  any time when the  Leverage  Ratio is greater  than
2.00:1.00 but less than or equal to 2.25:1.00.

     "Pricing  Level  IV":  any time when the  Leverage  Ratio is  greater  than
2.25:1.00 but less than or equal to 2.50:1.00.

     "Pricing  Level  V":  any time  when the  Leverage  Ratio is  greater  than
2.50:1.00.

     "Prohibited  Transaction":  a transaction  that is prohibited under Section
4975 of the Code or Section 406 of ERISA and not exempt  under  Section  4975 of
the Code or Section 408 of ERISA.

     "Property":  all types of real,  personal,  tangible,  intangible  or mixed
property.

     "Real  Property":  all real property owned or leased by the Borrower or any
of its Subsidiaries.

     "Regulatory Change": (i) the introduction or phasing in of any law, rule or
regulation after the Relevant Date, (ii) the issuance or promulgation  after the
Relevant  Date of any  directive,  guideline or request from any central bank or
United States or foreign Governmental Authority (whether or not having the force
of law),  or (iii) any change after the Relevant Date in the  interpretation  of
any  existing  law,  rule,  regulation,  directive,  guideline or request by any
central bank or United States or foreign Governmental Authority charged with the
administration  thereof.  For purposes of this  definition,  the term  "Relevant
Date" shall mean (i) in the case of each Lender  listed on the  signature  pages
hereto,  the  Effective  Date,  or (ii) in the case of each  other  Lender,  the
effective date of the Assignment and Acceptance  Agreement  pursuant to which it
became a Lender.

     "Reimbursement Agreement": as defined in Section 2.8(b).

     "Reimbursement Obligation": the obligation of the Borrower to reimburse the
Issuing Bank for amounts drawn under the Letter of Credit.

     "Reportable  Event":  with respect to any Pension  Plan,  (i) any event set
forth in Sections  4043(b) (other than a Reportable Event as to which the 30 day
notice requirement is waived by the PBGC under applicable regulations),  4062(c)
or 4063(a) of



                                      -17-
<PAGE>




ERISA or the regulations  thereunder,  (ii) an event requiring the Borrower, any
of its Subsidiaries or any ERISA Affiliate to provide security to a Pension Plan
under  Section  401(a)(29) of the Code, or (iii) any failure to make any payment
required by Section 412(m) of the Code.

     "Required Lenders":  at any date of determination,  (i) if on such date the
Commitments  exist and no  Revolving  Credit  Loans or  Letters  of  Credit  are
outstanding, Lenders having Commitment Amounts equal to more than 66-2/3% of the
sum of the Aggregate  Commitment  Amount;  (ii) if on such date the  Commitments
exist and Revolving Credit Loans or Letters of Credit are  outstanding,  Lenders
which have Revolving Credit Loans  outstanding and  unreimbursed  obligations in
respect of Letters of Credit in an  aggregate  unpaid  amount equal to more than
66-2/3% of the Aggregate  Revolving Credit  Exposure;  and (iii) if on such date
the  Commitments  have been  terminated  or otherwise no longer  exist,  Lenders
holding Notes having an aggregate  unpaid  principal  balance equal to more than
66-2/3% of the Aggregate Credit Exposure.

     "Restricted   Payment":  as  to  any  Person  (i)  any  dividend  or  other
distribution,  direct or  indirect,  on  account  of any  shares of any class of
Capital  Stock  or  other  equity  interest  in  such  Person  now or  hereafter
outstanding  (other  than a dividend  payable  solely in shares of such  Capital
Stock to the  holders  of such  shares)  and (ii)  any  redemption,  retirement,
sinking  fund or  similar  payment,  purchase  or other  acquisition,  direct or
indirect,  of any shares of any class of Capital Stock or other equity  interest
in such Person now or hereafter outstanding.

     "Revolving Credit Exposure": with respect to any Lender as of any date, the
sum as of such date of (i) the  outstanding  principal  balance of such Lender's
Revolving  Credit  Loans plus (ii) an amount  equal to such  Lender's  Letter of
Credit Exposure.

     "Revolving Credit Loan" and "Revolving Credit Loans": as defined in Section
2.1.

     "Revolving Credit Note" and "Revolving Credit Notes": as defined in Section
2.2.

     "Sale and  Leaseback  Transaction":  any  transaction  or series of related
transactions  pursuant to which a Person  sells or  transfers  any  Property and
leases,  or purchases on an installment  payment  basis,  such Property from the
buyer or transferee thereof.

     "S&P":  Standard & Poor's Rating  Services,  a division of The  McGraw-Hill
Companies, Inc., or any successor thereto.





                                      -18-
<PAGE>




     "SEC": the Securities and Exchange Commission or any Governmental Authority
succeeding to the functions thereof.

     "Special  Counsel":  Emmet,  Marvin & Martin,  LLP,  special counsel to the
Agent.

     "Submission Deadline": as defined in Section 2.4(b).

     "Subordinated  Debentures":  the 6% Convertible Subordinated Debentures due
2003, issued by the Borrower pursuant to the Subordinated Indenture, as the same
may be  amended,  supplemented  or  otherwise  modified  from  time  to  time in
accordance with the Section 8.10.

     "Subordinated Indenture":  the Subordinated Indenture,  dated as of January
15, 1993,  by and between the  Borrower  and the Trustee,  pursuant to which the
Subordinated Debentures were issued, as the same may be amended, supplemented or
otherwise modified in accordance with the provisions of Section 8.10.

     "Subordinated  Indenture Refinance Documents":  the Term Loan Agreement, in
final form, by and between the Borrower and BNY, providing for a term loan to be
made available to the Borrower in connection  with the redemption and repurchase
of the  Subordinated  Debentures,  together with all documents,  instruments and
other agreements executed or delivered in connection therewith,  in each case as
amended, supplemented or otherwise modified from time to time.

     "Subordinated Indenture Refinance Indebtedness": all Indebtedness, together
with all  other  accrued  and  unpaid  obligations,  of the  Borrower  under the
Subordinated Indenture Refinance Documents.

     "Subsidiary": as to any Person, any corporation,  association, partnership,
limited liability company,  joint venture or other business entity of which such
Person or any of its Subsidiaries of such Person, directly or indirectly, either
(i)  in  respect  of a  corporation,  owns  or  controls  more  than  50% of the
outstanding  Capital Stock having  ordinary  voting power to elect a majority of
the Managing  Person,  irrespective of whether a class or classes shall or might
have voting  power by reason of the  happening  of any  contingency,  or (ii) in
respect of an association,  partnership, joint venture or other business entity,
is  entitled  to  share in more  than 50% of the  profits  and  losses,  however
determined.

     "Subsidiary Guaranty": as defined in Section 5.4.

     "Tax":  any  present  or future  tax,  levy,  impost,  duty,  charge,  fee,
deduction or  withholding of any nature and whatever  called,  by a Governmental
Authority, on whomsoever and wherever imposed,  levied,  collected,  withheld or
assessed.




                                      -19-
<PAGE>





     "Tax on the Overall  Net  Income":  as to any Person,  a Tax imposed by the
jurisdiction in which that Person's  principal office (and/or,  in the case of a
Lender, its Domestic Lending Office) is located or by any political  subdivision
or  taxing  authority  thereof  or in which  that  Person  is deemed to be doing
business  on all or part of the net  income,  profits  or gains  of that  Person
(whether  worldwide,  or only  insofar  as such  income,  profits  or gains  are
considered to arise in or to relate to a particular jurisdiction, or otherwise).

     "Termination  Event":  with respect to any Pension  Plan,  (i) a Reportable
Event,  (ii) the  termination  of a Pension  Plan,  or the filing of a notice of
intent to terminate a Pension Plan, or the treatment of a Pension Plan amendment
as a  termination  under  Section  4041(c) of ERISA,  (iii) the  institution  of
proceedings to terminate a Pension Plan under Section 4042 of ERISA, or (iv) the
appointment  of a trustee to  administer  any Pension Plan under Section 4042 of
ERISA.

     "Trustee":  The  Bank  of New  York,  as  trustee  under  the  Subordinated
Indenture or any successor trustee thereunder.

     "Unfunded  Pension  Liabilities":  with respect to any Pension Plan, at any
date of determination,  the amount determined by taking the accumulated  benefit
obligation,  as disclosed in accordance  with Statement of Accounting  Standards
No. 87,  "Employers'  Accounting  for  Pensions",  over the fair market value of
Pension Plan assets.

     "United States": the United States of America (including the States thereof
and the District of Columbia).

     "Unqualified Amount": as defined in Section 3.1(c).

     "Unrecognized  Retiree  Welfare  Liability":  with  respect to any Employee
Benefit Plan that provides  postretirement benefits other than pension benefits,
the amount of the  transition  obligation,  as  determined  in  accordance  with
Statement of Financial Accounting Standards No. 106, "Employers'  Accounting for
Postretirement  Benefits Other Than  Pensions," as of the most recent  valuation
date, that has not been  recognized as an expense in an income  statement of the
Borrower  and its  Subsidiaries,  provided  that  (i)  prior  to the  date  such
Statement  is  applicable  to the  Borrower,  such  amount  shall be based on an
estimate made in good faith of such transition obligation, and (ii) for purposes
of  determining  the  aggregate  amount  of  the  Unrecognized  Retiree  Welfare
Liability,  Plans  maintained  by a  Subsidiary  that is not  otherwise an ERISA
Affiliate shall be included.

     "Voting  Shares":  all outstanding  shares of any class or classes (however
designated)  of Capital  Stock  entitled to vote  generally  in the  election of
members of the Board of Directors.




                                      -20-
<PAGE>





     1.2. Principles of Construction

     (a) All terms defined in a Loan Document shall have the meanings given such
terms therein when used in the other Loan Documents or any certificate,  opinion
or other document made or delivered  pursuant thereto,  unless otherwise defined
therein.

     (b) As used in the Loan Documents and in any certificate,  opinion or other
document made or delivered  pursuant  thereto,  accounting  terms not defined in
Section 1.1, and  accounting  terms partly defined in Section 1.1, to the extent
not defined,  shall have the respective meanings given to them under GAAP. If at
any time any change in GAAP would affect the  computation of any financial ratio
or  requirement  set forth in this  Agreement,  the Agent,  the  Lenders and the
Borrower  shall  negotiate in good faith to amend such ratio or  requirement  to
reflect such change in GAAP  (subject to the approval of the Required  Lenders),
provided that, until so amended, (i) such ratio or requirement shall continue to
be computed in  accordance  with GAAP prior to such change  therein and (ii) the
Borrower  shall provide to the Agent and the Lenders  financial  statements  and
other  documents  required  under  this  Agreement  or as  reasonably  requested
hereunder setting forth a reconciliation  between  calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

     (c) The words  "hereof",  "herein",  "hereto" and  "hereunder"  and similar
words when used in a Loan Document  shall refer to such Loan Document as a whole
and not to any particular provision thereof,  and Section,  schedule and exhibit
references  contained  therein  shall refer to Sections  thereof or schedules or
exhibits thereto unless otherwise expressly provided therein.

     (d) The phrase "may not" is prohibitive and not permissive.

     (e) Unless the context  otherwise  requires,  words in the singular  number
include the plural, and words in the plural include the singular.

     (f)  Unless  specifically  provided  in a Loan  Document  to the  contrary,
references to a time shall refer to New York City time.

     (g) Unless specifically provided in a Loan Document to the contrary, in the
computation of periods of time from a specified date to a later  specified date,
the word "from" means "from and  including"  and the words "to" and "until" each
means "to but excluding".

     (h)  References in any Loan Document to a fiscal period shall refer to that
fiscal period of the Borrower.





                                      -21-
<PAGE>




2.       AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT

         2.1.     Revolving Credit Loans

     Subject to the terms and conditions hereof,  each Lender severally (and not
jointly) agrees to make revolving  credit loans (each a "Revolving  Credit Loan"
and, as the context may require,  collectively  with all other Revolving  Credit
Loans  of such  Lender  and/or  with the  Revolving  Credit  Loans of all  other
Lenders,  the "Revolving Credit Loans") to the Borrower from time to time during
the Commitment Period,  provided,  however, that immediately after giving effect
thereto  (i) such  Lender's  Revolving  Credit  Exposure  would not exceed  such
Lender's  Commitment  Amount and (ii) the Aggregate  Credit  Exposure  would not
exceed the  Aggregate  Commitment  Amount.  During the  Commitment  Period,  the
Borrower  may  borrow,  prepay  in  whole  or in part  and  reborrow  under  the
Commitments,  all in accordance with the terms and conditions of this Agreement.
Subject  to the  provisions  of  Sections  2.3 and  3.3,  at the  option  of the
Borrower,  Revolving  Credit Loans may be made as (i) one or more ABR  Advances,
(ii) one or more Eurodollar Advances or (iii) any combination thereof.

     2.2. Revolving Credit Notes

     The  Revolving  Credit  Loans made by each Lender  shall be  evidenced by a
promissory note of the Borrower,  substantially in the form of Exhibit B-1, with
appropriate  insertions  therein  as to date  and  principal  amount  (each,  as
indorsed  or  modified  from  time to  time,  a  "Revolving  Credit  Note"  and,
collectively  with  the  Revolving  Credit  Notes  of  all  other  Lenders,  the
"Revolving  Credit Notes"),  payable to the order of such Lender for the account
of its Applicable  Lending  Office,  dated the Effective Date, and in the stated
principal  amount equal to such  Lender's  Commitment  Amount.  The  outstanding
principal  balance of the Revolving Credit Loans shall be due and payable on the
Maturity Date.

     2.3. Procedure for Borrowing Revolving Credit Loans

     (a) The Borrower may borrow Revolving Credit Loans under the Commitments on
any Business  Day during the  Commitment  Period,  provided,  however,  that the
Borrower  shall notify the Agent by the delivery of a Borrowing  Request,  which
shall be sent by facsimile and shall be irrevocable  (confirmed promptly, and in
any event within five Business Days, by the delivery to the Agent of a Borrowing
Request  manually  signed by the  Borrower),  no later  than 11:00  a.m.,  three
Business Days prior to the requested  Borrowing  Date, in the case of Eurodollar
Advances,  and 11:00 a.m., on the requested  Borrowing  Date, in the case of ABR
Advances, specifying (i) the aggregate principal amount to be borrowed under the
Commitments,  (ii) the requested Borrowing Date, (iii) whether such borrowing is
to consist of one or more Eurodollar  Advances,  ABR Advances,  or a combination
thereof and, if the borrowing is to consist of one or more Eurodollar  Advances,
the length of the




                                      -22-
<PAGE>




Eurodollar Interest Period for each such Eurodollar Advance. Each (i) Eurodollar
Advance shall equal no less than $1,000,000 or such amount plus a whole multiple
of $100,000 in excess  thereof and (ii) each ABR Advance made on each  Borrowing
Date shall equal no less than  $500,000 or such amount plus a whole  multiple of
$100,000 in excess thereof or, if less,  the excess of the Aggregate  Commitment
Amount over the Aggregate Credit Exposure.

     (b) Upon receipt of each Borrowing Request, the Agent shall promptly notify
each Lender  thereof.  Subject to its  receipt of the notice  referred to in the
preceding  sentence,  each  Lender  will  make  the  amount  of  its  Commitment
Percentage of the requested Revolving Credit Loan available to the Agent for the
account of the Borrower at the office of the Agent set forth in Section 11.2 not
later than 12:00 noon on the relevant  Borrowing Date requested by the Borrower,
in funds immediately  available to the Agent at such office. The amounts so made
available  to the  Agent  on such  Borrowing  Date  will  then,  subject  to the
satisfaction of the terms and conditions of this Agreement, as determined by the
Agent, be made available on such date to the Borrower by the Agent at the office
of the Agent  specified in Section 11.2 by crediting the account of the Borrower
on the books of such office with the  aggregate of said amounts  received by the
Agent.

     (c) Unless the Agent  shall have  received  prior  notice from a Lender (by
telephone  or  otherwise,  such notice to be promptly  confirmed by facsimile or
other  writing)  that such  Lender  will not make  available  to the Agent  such
Lender's  Commitment  Percentage of the Revolving  Credit Loans requested by the
Borrower, the Agent may assume that such Lender has made such share available to
the Agent on the Borrowing Date in accordance  with this Section,  provided that
such Lender  received  notice of the  requested  Revolving  Credit Loan from the
Agent,  and the Agent may, in reliance upon such  assumption,  make available to
the Borrower on the Borrowing Date a corresponding  amount. If and to the extent
such Lender shall not have so made its  Commitment  Percentage of such Revolving
Credit  Loans  available to the Agent,  such Lender and the  Borrower  severally
agree to pay to the Agent forthwith on demand such corresponding  amount (to the
extent not  previously  paid by the other),  together with interest  thereon for
each day from the date such amount is made available to the Borrower to the date
such  amount is paid to the Agent,  at a rate per annum equal to, in the case of
the  Borrower,  the  applicable  interest  rate set forth in Section 3.1 for ABR
Advances, and, in the case of such Lender, at a rate of interest per annum equal
to the  Federal  Funds Rate for the first  three days after the due date of such
payment  until the date such  payment is  received  by the Agent and the Federal
Funds Rate plus 2% thereafter.  Such payment by the Borrower,  however, shall be
without prejudice to its rights against such Lender. If such Lender shall pay to
the Agent such corresponding  amount,  such amount so paid shall constitute such
Lender's  Revolving  Credit  Loan as  part of the  Revolving  Credit  Loans  for
purposes of this Agreement,  which Revolving Credit Loan shall be deemed to have
been made by such Lender on the  Borrowing  Date  applicable  to such  Revolving
Credit Loans.





                                      -23-
<PAGE>




     (d) If a Lender makes a new  Revolving  Credit Loan on a Borrowing  Date on
which the Borrower is to repay a Revolving  Credit Loan or Competitive  Bid Loan
from such Lender,  such Lender  shall apply the  proceeds of such new  Revolving
Credit Loan to make such repayment,  and only the excess of the proceeds of such
new Revolving Credit Loan over the Revolving Credit Loan or Competitive Bid Loan
being repaid need be made available to the Agent.

     2.4. Competitive Bid Loans; Procedure

     (a)  The  Borrower  may  make a  request  for a  Competitive  Bid  Loan  by
delivering  a  Competitive  Bid Request to the Agent as set forth below by 11:00
a.m.  at least one  Business  Day prior to the  proposed  Borrowing  Date.  Each
Competitive Bid Request given to the Agent (which shall promptly on the same day
give notice thereof to each Lender by facsimile transmission of an Invitation to
Bid if the  Competitive  Bid Request is not rejected  pursuant to this  Section)
shall be given in writing by facsimile transmission  (confirmed promptly, and in
any  event  within  five  Business  Days,  by the  delivery  to the  Agent  of a
Competitive Bid Request manually signed by the Borrower),  and shall specify (i)
the proposed  Borrowing Date,  which shall be a Business Day, (ii) the aggregate
amount of the requested  Competitive  Bid Loans (the "Maximum  Request"),  which
shall be in a principal  amount equal to $1,000,000  or an integral  multiple of
$100,000 in excess thereof,  (iii) the Competitive  Interest  Period(s) therefor
and the last day of each such Competitive Interest Period, and (iv) if more than
one Competitive Interest Period is so specified,  the principal amount allocable
to each such  Competitive  Interest  Period (which amount shall not be less than
$1,000,000  or an integral  multiple of  $100,000 in excess  thereof);  provided
however,  that immediately after giving effect to the requested  Competitive Bid
Loan, the Aggregate  Credit  Exposure shall not exceed the Aggregate  Commitment
Amount.  A Competitive  Bid Request that does not conform  substantially  to the
form of Exhibit D shall be  rejected,  and the Agent shall  promptly  notify the
Borrower of such rejection.  Notwithstanding  anything  contained  herein to the
contrary,  (i) not more than three Competitive Interest Periods may be requested
pursuant to any Competitive Bid Request,  and (ii) not more than six Competitive
Bid Loans may be outstanding at any one time, provided, however, that at no time
shall the number of the Competitive  Interest  Periods in respect of outstanding
Competitive Bid Loans and Eurodollar  Interest Periods in respect of outstanding
Eurodollar Advances exceed eight.

     (b) Each Lender in its sole discretion may (but is not obligated to) submit
one or more  Competitive  Bids to the Agent not later  than  10:00  a.m.  on the
proposed  Borrowing  Date specified in such  Competitive  Bid Request (such time
being herein called the "Submission  Deadline"),  by facsimile or other writing,
and thereby irrevocably offer to make all or any part (any such part referred to
as  a  "Portion")  of  any  Competitive  Bid  Loan  described  in  the  relevant
Competitive  Bid  Request at a rate of  interest  per annum  (each a "Bid Rate")
specified  therein in an aggregate  principal amount of not less than $1,000,000
or an integral multiple of $100,000 in excess thereof, provided that Competitive
Bids submitted




                                      -24-
<PAGE>




by BNY may only be  submitted  if BNY  notifies the Borrower of the terms of its
Competitive Bid not later than thirty minutes prior to the Submission  Deadline.
Multiple  Competitive  Bids  may be  delivered  to the  Agent by a  Lender.  The
aggregate Portions of Competitive Bid Loans for any or all Competitive  Interest
Periods  offered by each  Lender in its  Competitive  Bid may exceed the Maximum
Request  contained in the relevant  Competitive Bid Request,  provided that each
Competitive Bid shall set forth the maximum  aggregate amount of the Competitive
Bid Loans offered  thereby which the Borrower may accept (the "Maximum  Offer"),
which Maximum Offer shall not exceed the Maximum  Request.  If the Agent has not
received a  Competitive  Bid from any Lender by the  Submission  Deadline,  such
Lender  shall be  deemed  not to have  made a  Competitive  Bid and shall not be
permitted or obligated to make a Competitive Bid Loan on the proposed  Borrowing
Date.

     (c) The Agent shall promptly give notice by telephone  (promptly  confirmed
by facsimile or other writing) to the Borrower of all Competitive  Bids received
by the Agent  prior to the  Submission  Deadline  which  comply in all  material
respects with this Section.  The Borrower,  shall, in its sole  discretion,  but
subject to Section 2.4(d), irrevocably accept or reject any such Competitive Bid
(or any Portion  thereof) not later than 10:30 a.m. on the day of the Submission
Deadline by notice to the Agent by  telephone  (confirmed  by facsimile or other
writing in the form of a Competitive Bid Accept/Reject  Letter promptly the same
day). Promptly upon receipt by the Agent of such a Competitive Bid Accept/Reject
Letter,  the Agent will give notice to each Lender that  submitted a Competitive
Bid as to the extent, if any, that such Lender's Competitive Bid shall have been
accepted.  If the  Agent  fails  to  receive  notice  from the  Borrower  of its
acceptance or rejection of any Competitive Bids at or prior to 10:30 a.m. on the
day of the Submission  Deadline,  all such  Competitive  Bids shall be deemed to
have been rejected by the Borrower,  and the Agent will give to each Lender that
submitted a Competitive  Bid notice of such  rejection by telephone on such day.
In due course  following the acceptance of any Competitive  Bid, the Agent shall
notify  each  Lender  which  submitted  a  Competitive  Bid,  in the  form  of a
Competitive Bid Loan Confirmation, of the amount, maturity date and Bid Rate for
each Competitive Bid Loan.

     (d) If the Borrower  accepts a Portion of a proposed  Competitive  Bid Loan
for a single Competitive  Interest Period at the Bid Rate provided therefor in a
Lender's  Competitive  Bid,  such  Portion  shall be in a  principal  amount  of
$1,000,000  or an integral  multiple of $100,000 in excess  thereof  (subject to
such lesser allocation as may be made pursuant to the provisions of this Section
2.4(d)). The aggregate principal amount of Competitive Bid Loans accepted by the
Borrower  following  Competitive  Bids  responding to a Competitive  Bid Request
shall  not  exceed  the  Maximum  Request.  The  aggregate  principal  amount of
Competitive  Bid  Loans  accepted  by  the  Borrower   pursuant  to  a  Lender's
Competitive  Bid shall not exceed the Maximum  Offer therein  contained.  If the
Borrower accepts any Competitive Bid Loans or Portion offered in any Competitive
Bid, the Borrower must accept  Competitive  Bids (and  Competitive Bid Loans and
Portions  thereby offered) based  exclusively  upon the successively  lowest Bid
Rates within each Competitive Interest




                                      -25-
<PAGE>




Period and no other  criteria.  If two or more Lenders submit  Competitive  Bids
with  identical  Bid  Rates for the same  Competitive  Interest  Period  and the
Borrower  accepts any thereof,  the Borrower  shall,  subject to the first three
sentences of this Section 2.4(d),  accept all such Competitive Bids as nearly as
possible in proportion to the amounts of such  Lender's  respective  Competitive
Bids with identical Bid Rates for such Competitive  Interest  Period,  provided,
that if the amount of Competitive Bid Loans to be so allocated is not sufficient
to enable  each  such  Lender to make  such  Competitive  Bid Loan (or  Portions
thereof) in an aggregate  principal amount of $1,000,000 or an integral multiple
of $100,000 in excess  thereof,  the Borrower  shall round the  Competitive  Bid
Loans (or Portions thereof)  allocated to such Lender or Lenders as the Borrower
shall select as  necessary  to a minimum of $500,000 or an integral  multiple of
$100,000 in excess thereof.

     (e) Not later than 2:00 p.m. on the relevant  Borrowing  Date,  each Lender
whose  Competitive  Bid was accepted by the Borrower shall make available to the
Agent at its office set forth in Section 11.2, in immediately  available  funds,
the  proceeds of such  Lender's  Competitive  Bid  Loan(s).  The amounts so made
available  to the  Agent  on such  Borrowing  Date  will  then,  subject  to the
satisfaction of the terms and conditions of this Agreement, as determined by the
Agent,  be made  available  by the  Agent  in like  funds  as  received  on such
Borrowing Date to the Borrower by the Agent at the office of the Agent set forth
in Section  11.2 by  crediting  the account of the Borrower on the books of such
office with the aggregate of such amounts received by the Agent.

     (f) All notices  required by this Section 2.4 shall be given in  accordance
with Section 11.2.

     (g) The  Competitive  Bid Loans made by each Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit B-2 (each,
as  indorsed  or  modified  from time to time,  a  "Competitive  Bid Note"  and,
collectively  with  the  Competitive  Bid  Notes  of  all  other  Lenders,   the
"Competitive Bid Notes"), payable to the order of such Lender for the account of
its Applicable  Lending Office,  and dated the Effective Date. Each  Competitive
Bid Loan  shall be due and  payable  on the  earlier  of (i) the last day of the
Competitive  Interest  Period  applicable  thereto and (ii) the  Maturity  Date.
Competitive Bid Loans may not be prepaid.

     2.5.   Termination  or  Reduction  of  Commitments  and  Letter  of  Credit
Commitment

     (a) Voluntary Reductions.  The Borrower shall have the right, upon at least
three  Business  Days' prior written  notice to the Agent,  to (i) terminate the
Commitments  of all of the Lenders,  provided that after giving  effect  thereto
(and any contemporaneous prepayment of the Loans), the Aggregate Credit Exposure
shall equal zero or (ii) from time to time to permanently reduce the Commitments
of all of the Lenders,  provided,  however, that (x) any such reduction shall be
in the amount of $5,000,000 or such amount plus a whole  multiple of $500,000 in
excess thereof and (y) the Borrower shall prepay the



                                      -26-
<PAGE>




Revolving Credit Loans as required by Section 2.6(b) so that  immediately  after
giving  effect  thereto (and any  contemporaneous  prepayment  of the  Revolving
Credit Loans),  the Aggregate Credit Exposure shall be less than or equal to the
Aggregate  Commitment  Amount,  and the Revolving  Credit Exposure of any Lender
shall be less than or equal to such Lender's Commitment Amount.

     (b) In General.  Each reduction of the Aggregate Commitment Amount shall be
made by reducing  each  Lender's  Commitment  Amount by an amount  equal to such
Lender's  Commitment  Percentage  of such  reduction.  Simultaneously  with each
reduction of the Aggregate  Commitment  Amount under this Section,  the Borrower
shall  pay the  Facility  Fee  accrued  on the  amount  by which  the  Aggregate
Commitment Amount shall have been reduced.

     2.6. Prepayments of the Loans

     (a)  Voluntary  Prepayments.  The Borrower  may, at its option,  prepay the
Revolving  Credit Loans without premium or penalty (but subject to Section 3.5),
in full at any  time or in part  from  time to time by  notifying  the  Agent in
writing at least one Business Day prior to the proposed  prepayment date, in the
case of  Revolving  Credit Loans  consisting  of ABR Advances and at least three
Business  Days prior to the proposed  prepayment  date, in the case of Revolving
Credit Loans consisting of Eurodollar Advances, specifying whether the Revolving
Credit Loans to be prepaid consist of ABR Advances,  Eurodollar  Advances,  or a
combination thereof,  the amount to be prepaid and the date of prepayment.  Such
notice shall be irrevocable and the amount specified in such notice shall be due
and payable on the date specified, together with accrued interest to the date of
such payment on the amount prepaid. Upon receipt of such notice, the Agent shall
promptly  notify each Lender thereof.  Each partial  prepayment of the Revolving
Credit Loans  pursuant to this  subsection  shall be in an  aggregate  principal
amount of $500,000  or such  amount plus a whole  multiple of $100,000 in excess
thereof, or, if less, the outstanding  principal balance of the Revolving Credit
Loans.  After giving effect to any partial  prepayment  of the Revolving  Credit
Loans with respect to Eurodollar Advances which were made (whether as the result
of a borrowing or a conversion) on the same date and which had the same Interest
Period,  the  outstanding  principal  amount of such  Eurodollar  Advances shall
exceed  (subject to Section 3.3) $1,000,000 or such amount plus a whole multiple
of $100,000 in excess thereof.

     (b)  Mandatory  Prepayments  of  Loans  Relating  to  Terminations  of  the
Commitments and Reductions of the Aggregate  Commitment  Amount.  Simultaneously
with the termination of the Commitments of all of the Lenders and each reduction
of the Aggregate  Commitment Amount under Section 2.5, the Borrower shall prepay
the Loans in full in the case of the  termination  of the  Commitments of all of
the Lenders and prepay the Loans by the amount,  if any, by which the  Aggregate
Credit Exposure exceeds the Aggregate  Commitment  Amount as so reduced,  in the
case of a reduction of the Aggregate Commitment Amount.





                                      -27-
<PAGE>




     (c) In General.  All  prepayments  of Revolving  Credit Loans shall be made
together  with  accrued  interest to the date of such  prepayment  on the amount
prepaid.  Unless  otherwise  specified  by  the  Borrower,  each  prepayment  of
Revolving  Credit Loans shall first be applied to ABR Advances and thereafter to
Eurodollar  Advances  in any manner  deemed  appropriate  by the  Agent.  If any
prepayment is made in respect of any  Eurodollar  Advance,  in whole or in part,
prior to the last day of the applicable  Interest Period, the Borrower agrees to
indemnify the Lenders in accordance with Section 3.5.

     2.7. Use of Proceeds

     The  Borrower  agrees that the  proceeds of the Loans shall be used solely,
directly or indirectly, for the Borrower's general corporate and working capital
purposes  not  inconsistent  with  the  provisions  hereof,  including,  without
limitation,  the making of Permitted Acquisitions.  Notwithstanding  anything to
the contrary contained in any Loan Document, the Borrower agrees that no part of
the  proceeds of any Loan will be used,  directly or  indirectly,  for a purpose
which  violates  any law,  including,  without  limitation,  the  provisions  of
Regulations G, U or X of the Board of Governors of the Federal  Reserve  System,
as amended.

     2.8. Letter of Credit Sub-Facility

     (a) Subject to the terms and conditions of this Agreement, the Issuing Bank
agrees,  in reliance on the  agreement of the other Lenders set forth in Section
2.9,  to issue  standby  letters  of credit  (the  "Letters  of  Credit";  each,
individually, a "Letter of Credit") during the Commitment Period for the account
of the Borrower,  provided that immediately after the issuance of each Letter of
Credit (i) the  aggregate  amount  available  to be drawn  under all  Letters of
Credit  (whether or not the  conditions  for drawing  thereunder  have or may be
satisfied) would not exceed $15,000,000,  and (ii) the Aggregate Credit Exposure
would not exceed the Aggregate  Commitment Amount.  Each Letter of Credit issued
pursuant to this Section shall have a termination  date which shall be not later
than the earlier of (1) twelve months after the date of issuance thereof and (2)
the Business Day  immediately  preceding the Maturity  Date. No Letter of Credit
shall be issued if the Agent, or any Lender by notice to the Agent no later than
1:00 p.m.  one  Business  Day prior to the  requested  date of  issuance of such
Letter of Credit,  shall have determined that any condition set forth in Section
5 or 6 has not been satisfied.

     (b) Each Letter of Credit  shall be issued for the account of the  Borrower
solely for workmen's compensation purposes and performance and payment bonds and
other obligations of like nature.  The Borrower shall give the Agent a Letter of
Credit  Request for the  issuance of each Letter of Credit by 11:00 a.m.,  three
Business  Days prior to the  requested  date of issuance.  Such Letter of Credit
Request shall be  accompanied  by the Issuing Bank's  standard  Application  and
Agreement for Standby Letter of Credit (each, a




                                      -28-
<PAGE>




"Reimbursement  Agreement") executed by an Authorized Signatory of the Borrower,
and  shall  specify  (i)  the  beneficiary  of such  Letter  of  Credit  and the
obligations  of the  Borrower in respect of which such Letter of Credit is to be
issued,  (ii) the Borrower's proposal as to the conditions under which a drawing
may be made under such Letter of Credit and the  documentation to be required in
respect  thereof,  (iii) the maximum amount to be available under such Letter of
Credit, and (iv) the requested date of issuance.  Upon receipt of such Letter of
Credit Request from the Borrower,  the Agent shall  promptly  notify the Issuing
Bank and each other Lender thereof. The Issuing Bank shall, on the proposed date
of issuance  and subject to the other terms and  conditions  of this  Agreement,
issue the requested Letter of Credit. Each Letter of Credit shall be in form and
substance reasonably satisfactory to the Issuing Bank, with such provisions with
respect to the conditions  under which a drawing may be made  thereunder and the
documentation  required  in respect of such  drawing as the  Issuing  Bank shall
reasonably require.  Each Letter of Credit shall be used solely for the purposes
described therein.

     (c) Each  payment by the  Issuing  Bank of a draft  drawn under a Letter of
Credit shall give rise to an obligation on the part of the Borrower to reimburse
the Issuing Bank immediately for the amount thereof.

     (d)  Notwithstanding  anything to the contrary  contained  herein or in any
Reimbursement Agreement, to the extent that the terms of this Agreement shall be
inconsistent with the terms of such Reimbursement  Agreement,  the terms of this
Agreement shall govern.

     2.9. Letter of Credit Participation and Funding Commitments

     (a) Each Lender hereby unconditionally and irrevocably,  severally (and not
jointly)  for itself  only and without any notice to or the taking of any action
by such Lender, takes an undivided  participating interest in the obligations of
the Issuing Bank under and in connection with each Letter of Credit in an amount
equal to such  Lender's  Commitment  Percentage  of the amount of such Letter of
Credit.  Each  Lender  shall be liable to the  Issuing  Bank for its  Commitment
Percentage of the unreimbursed  amount of any draft drawn and honored under each
Letter of Credit.  Each Lender  shall also be liable for an amount  equal to the
product  of its  Commitment  Percentage  and any  amounts  paid by the  Borrower
pursuant to Sections 2.8(c) and 2.10 that are subsequently rescinded or avoided,
or  must  otherwise  be  restored  or  returned.   Such  liabilities   shall  be
unconditional  and without  regard to the  occurrence of any Default or Event of
Default or the compliance by the Borrower with any of its obligations  under the
Loan Documents.

     (b) The Issuing Bank shall  promptly  notify the Agent,  and the Agent will
promptly  notify each  Lender  (which  notice  shall be  promptly  confirmed  in
writing),  of the date and the amount of any draft presented under any Letter of
Credit with  respect to which full  reimbursement  of payment is not made by the
Borrower as provided in Section 2.8(c),




                                      -29-
<PAGE>




and forthwith  upon receipt of such notice,  such Lender (other than the Issuing
Bank in its  capacity  as a Lender)  shall make  available  to the Agent for the
account of the  Issuing  Bank its  Commitment  Percentage  of the amount of such
unreimbursed  draft at the office of the Agent  specified  in Section  11.2,  in
lawful money of the United States and in  immediately  available  funds,  before
4:00 p.m., on the day such notice was given by the Agent, if the relevant notice
was given by the Agent at or prior to 1:00 p.m.,  on such day,  and before 12:00
noon, on the next  Business  Day, if the relevant  notice was given by the Agent
after 1:00 p.m.,  on such day. The Agent shall  distribute  the payments made by
each Lender  (other than the Issuing Bank in its capacity as a Lender)  pursuant
to the immediately  preceding sentence to the Issuing Bank promptly upon receipt
thereof in like funds as received. Each Lender shall indemnify and hold harmless
the Agent and the Issuing Bank from and against any and all losses,  liabilities
(including liabilities for penalties), actions, suits, judgments, demands, costs
and expenses  (including,  without  limitation,  reasonable  attorneys' fees and
expenses and an administration  fee of not less than $100 payable to the Issuing
Bank as the issuer of the relevant Letter of Credit)  resulting from any failure
on the part of such Lender to provide, or from any delay in providing, the Agent
with such  Lender's  Commitment  Percentage of the amount of any payment made by
the Issuing Bank under a Letter of Credit in accordance with this subsection (b)
(except in respect of losses,  liabilities or other obligations  suffered by the
Issuing Bank  resulting from the gross  negligence or willful  misconduct of the
Issuing  Bank).  If a Lender does not make  available to the Agent when due such
Lender's Commitment  Percentage of any unreimbursed  payment made by the Issuing
Bank under a Letter of Credit  (other than  payments made by the Issuing Bank by
reason of its gross  negligence  or willful  misconduct),  such Lender  shall be
required to pay  interest  to the Agent for the  account of the Issuing  Bank on
such  Lender's  Commitment  Percentage of such payment at a rate of interest per
annum  equal to the  Federal  Funds Rate for the first  three days after the due
date of such  payment  until the date such  payment is received by the Agent and
the  Federal  Funds Rate plus 2%  thereafter.  The Agent shall  distribute  such
interest  payments to the  Issuing  Bank upon  receipt  thereof in like funds as
received.

     (c) Whenever the Agent is reimbursed  by the  Borrower,  for the account of
the  Issuing  Bank,  for any payment  under a Letter of Credit and such  payment
relates to an amount  previously  paid by a Lender in respect of its  Commitment
Percentage of the amount of such payment under such Letter of Credit,  the Agent
will pay over such  payment to such  Lender (i) before 4:00 p.m. on the day such
payment from the  Borrower is received,  if such payment is received at or prior
to 1:00 p.m.  on such day,  or (ii)  before  12:00  noon on the next  succeeding
Business  Day, if such payment from the Borrower is received  after 1:00 p.m. on
such day.

     2.10. Absolute Obligation With Respect to Letter of Credit Payments

     The  Borrower's  obligation  to reimburse  the Agent for the account of the
Issuing  Bank in  respect  of a Letter of Credit  for each  payment  under or in
respect of such Letter of Credit shall be absolute and  unconditional  under any
and all circumstances and



                                      -30-
<PAGE>




irrespective  of any  set-off,  counterclaim  or defense  to  payment  which the
Borrower may have or have had against the  beneficiary of such Letter of Credit,
the Agent,  the Issuing Bank, as issuer of such Letter of Credit,  any Lender or
any other  Person,  including,  without  limitation,  any  defense  based on the
failure of any  drawing to  conform to the terms of such  Letter of Credit,  any
drawing document proving to be forged,  fraudulent or invalid,  or the legality,
validity,  regularity  or  enforceability  of such  Letter of Credit;  provided,
however, that the Borrower shall not be obligated to reimburse the Agent for the
account of the Issuing Bank,  as issuer of a Letter of Credit,  for any wrongful
payment under such Letter of Credit made as a result of the Issuing Bank's gross
negligence or willful misconduct.

     2.11. Payments

     (a) Each payment,  including each prepayment,  of principal and interest on
the Loans,  of the Facility Fee, the Letter of Credit  Commissions and of all of
the  other  fees to be paid to the  Agent  and  the  Lenders  pursuant  to or in
connection  with  this  Agreement  (the  Facility  Fee,  the  Letter  of  Credit
Commissions,  together with all of such other fees, being sometimes  hereinafter
collectively  referred to as the "Fees") shall be made by the Borrower  prior to
12:00 noon on the date such  payment is due to the Agent for the  account of the
applicable Lenders at the Agent's office specified in Section 11.2, in each case
in lawful money of the United States, in immediately available funds and without
set-off or counterclaim. As between the Borrower and the Lenders, any payment by
the  Borrower to the Agent for the account of the Lenders  shall be deemed to be
payment by the Borrower to the Lenders.  The failure of the Borrower to make any
such  payment by such time shall not  constitute a Default,  provided  that such
payment is made on such due date,  but any such payment made after 12:00 noon on
such due date shall be deemed to have been made on the next Business Day for the
purpose of calculating  interest on amounts  outstanding on the Loans.  Promptly
upon receipt  thereof by the Agent,  each  payment of principal  and interest on
Revolving  Credit Loans shall be remitted by the Agent in like funds as received
to each Lender pro rata according to its share of the funds being paid. Promptly
upon receipt  thereof by the Agent,  each payment of principal and interest on a
Competitive Bid Loan shall be remitted by the Agent in like funds as received to
the Lender that made such  Competitive Bid Loan;  provided that if more than one
Lender made a Competitive  Bid Loan to the Borrower on the same day, at the same
interest rate and for the same Competitive  Interest Period,  any payment on any
such  Competitive  Bid Loan  shall be  remitted  by the  Agent in like  funds as
received pro rata  according to the  outstanding  principal  balance of all such
Competitive Bid Loans.  Promptly upon receipt thereof by the Agent, each payment
of the  Facility Fee and the Letter of Credit  Commissions  shall be remitted by
the Agent in like funds as received to each  Lender pro rata  according  to such
Lender's Commitment Amount.

     (b) If any payment  hereunder,  under the Notes or under any  Reimbursement
Agreement shall be due and payable on a day which is not a Business Day, the due
date  thereof  (except as otherwise  provided in the  definition  of  Eurodollar
Interest  Period)  shall be extended to the next  Business  Day and (except with
respect to payments in



                                      -31-
<PAGE>




respect of the Fees) interest shall be payable at the applicable  rate specified
herein during such extension,  provided,  however that if such next Business Day
is after the Maturity  Date,  any such payment  shall be due on the  immediately
preceding Business Day.

     2.12. Extensions

     Provided that no Default or Event of Default shall exist,  the Borrower may
request, on any one date that is not less than 60 days prior to the then current
Maturity Date,  that the Maturity Date be extended for an additional 365 days by
giving written  notice  thereof (each an "Extension  Request") to the Agent and,
upon  receipt of such  notice,  the Agent  shall  promptly  notify  each  Lender
thereof. Each Lender shall endeavor to respond to the Extension Request, if any,
within 30 days of its receipt of notice thereof, provided that each Lender which
shall  have  failed  so to  respond  by such time  shall be  deemed  not to have
consented  thereto.  In the event that any Lender shall not have  consented,  in
accordance with this Section 2.12, to such extension,  the then current Maturity
Date shall not be extended  and shall  remain in full force and  effect.  In the
event that all Lenders shall have so consented,  the then existing Maturity Date
shall be extended to the day which is 365 days after such date (or, if such date
is not a Business Day, the Business Day immediately preceding such day).

     2.13. Agent's Records

     The Agent's records regarding the amount of each Loan and Letter of Credit,
each  payment  by the  Borrower  of  principal  and  interest  on the  Loans and
Reimbursement  Obligations and other  information  relating to the Loans and the
Letters of Credit shall be presumptively correct absent manifest error.


3.       INTEREST, FEES, YIELD PROTECTIONS, ETC.

     3.1. Interest Rate and Payment Dates

     (a) Prior to Maturity.  Except as otherwise  provided in Section 3.1(b) and
3.1(c), prior to maturity,  (i) Competitive Bid Loans shall bear interest at the
applicable Bid Rates  accepted by the Borrower  pursuant to Section 2.4 and (ii)
Revolving Credit Loans shall bear interest on the outstanding  principal balance
thereof at the applicable interest rate or rates per annum set forth below:

                  ADVANCES                         RATE

         Each ABR Advance            Alternate Base Rate.




                                      -32-
<PAGE>




        Each Eurodollar Advance     Eurodollar  Rate  for the  applicable  
                                    Interest  Period  plus the Applicable 
                                    Margin.

     (b) Default Rate.  Upon the  occurrence  and during the  continuance  of an
Event of Default under Section  9.1(a) or (b), the unpaid  principal  balance of
the Loans shall bear interest at a rate per annum  (whether  before or after the
entry of a judgment  thereon) equal to 2% plus the rate which would otherwise be
applicable  pursuant to Section 2.4 (in the case of  Competitive  Bid Loans) and
Section 3.1(a) (in the case of Revolving  Credit  Loans),  from the date of such
nonpayment  to, but not  including,  the date such balance is paid in full.  For
purposes of the preceding sentence,  the rate applicable pursuant to Section 2.4
or 3.1(a),  as the case may be, to any  overdue,  principal,  interest  or other
amount payable under the Loan  Documents  shall be (i) in the case of an overdue
principal balance of any Eurodollar Advance, the applicable Eurodollar Rate plus
the Applicable Margin until the last day of the applicable  Eurodollar  Interest
Period (or the  earlier  termination  thereof  pursuant to this  Agreement)  and
thereafter at the Alternate Base Rate, (ii) in the case of an overdue  principal
balance of any  Competitive Bid Loan, the applicable Bid Rate until the last day
of the  applicable  Competitive  Interest  Period  (or the  earlier  termination
thereof  pursuant to this  Agreement)  and thereafter at the Alternate Base Rate
and (iii) in all other cases at the Alternate Base Rate. All such interest shall
be payable on demand.

     (c) Highest  Lawful Rate. At no time shall the interest rate payable on the
Loans,  together  with the Fees and all  other  amounts  payable  under the Loan
Documents,  to the extent the same are construed to constitute interest,  exceed
the Highest  Lawful  Rate.  If in respect of any period  during the term of this
Agreement,  any amount paid hereunder, to the extent the same shall (but for the
provisions  of this Section)  constitute  or be deemed to  constitute  interest,
would exceed the maximum amount of interest permitted by the Highest Lawful Rate
during such period (such amount being hereinafter referred to as an "Unqualified
Amount"),  then (i) such Unqualified  Amount shall be applied or shall be deemed
to have been applied as a prepayment of the Loans, and (ii) if in any subsequent
period  during the term of this  Agreement,  all amounts  payable  hereunder  in
respect  of such  period  which  constitute  or shall be  deemed  to  constitute
interest  shall be less than the  maximum  amount of interest  permitted  by the
Highest  Lawful Rate  during such  period,  then the  Borrower  shall pay to the
Lender  in  respect  of such  period an amount  (each a  "Compensatory  Interest
Payment")  equal  to the  lesser  of (x) a sum  which,  when  added  to all such
amounts,  would equal the maximum  amount of interest  permitted  by the Highest
Lawful Rate  during  such  period,  and (y) an amount  equal to the  Unqualified
Amount less all other Compensatory Interest Payments made in respect thereof.

     (d) In General. Interest on (i) ABR Advances to the extent based on the BNY
Rate shall be  calculated on the basis of a 365 or 366-day year (as the case may
be),  and (ii) ABR  Advances  to the extent  based on the  Federal  Funds  Rate,
Eurodollar  Advances and  Competitive Bid Loans shall be calculated on the basis
of a  360-day  year,  in each  case,  for the  actual  number  of days  elapsed,
including the first day but excluding the last. Except as




                                      -33-
<PAGE>




otherwise  provided in Section  3.1(b),  interest shall be payable in arrears on
each Interest Payment Date and upon each payment  (including  prepayment) of the
Loans.  Any change in the interest rate on the Revolving  Credit Loans resulting
from a change in the Alternate  Base Rate or reserve  requirements  shall become
effective  as of the opening of  business on the day on which such change  shall
become effective.  The Agent shall, as soon as practicable,  notify the Borrower
and the  Lenders of the  effective  date and the amount of any change in the BNY
Rate, but any failure to so notify shall not in any manner affect the obligation
of the  Borrower  to pay  interest  on the Loans in the amounts and on the dates
required.  Each determination of the Alternate Base Rate or a Eurodollar Rate by
the Agent  pursuant to this  Agreement  shall be  conclusive  and binding on all
parties hereto absent  manifest  error.  The Borrower  acknowledges  that to the
extent  interest  payable on ABR Advances is based on the BNY Rate, the BNY Rate
is only one of the bases for  computing  interest on loans made by the  Lenders,
and by basing interest payable on ABR Advances on the BNY Rate, the Lenders have
not  committed to charge,  and the Borrower  has not in any way  bargained  for,
interest  based on a lower or the lowest rate at which the Lenders may now or in
the future make loans to other borrowers.

     3.2. Fees

     (a) Facility Fees. The Borrower agrees to pay to the Agent, for the account
of the Lenders in accordance  with each Lender's  Commitment  Percentage,  a fee
(the  "Facility  Fee"),  during the period from the  Effective  Date through the
Maturity Date, at a rate per annum equal to the Applicable Fee Percentage on the
average daily Aggregate Commitment Amount, regardless of usage. The Facility Fee
shall be payable (i)  quarterly in arrears on the last day of each March,  June,
September  and  December  during  such period  commencing  on the first such day
following the Effective Date, (ii) on the date of any reduction in the Aggregate
Commitment  Amount (to the extent of such  reduction)  and (iii) on the Maturity
Date.  The Facility Fee shall be  calculated  on the basis of a 360-day year for
the actual number of days elapsed.

     (b) Letter of Credit Commissions.  The Borrower agrees to pay to the Agent,
for the  account of the  Lenders in  accordance  with each  Lender's  Commitment
Percentage,  commissions  (the "Letter of Credit  Commissions")  with respect to
each  Letter of Credit for the period  from and  including  the date of issuance
thereof to and including the expiration date thereof,  at a rate per annum equal
to the Applicable  Fee  Percentage in effect on the date of issuance  thereof on
the average daily amount available to be drawn under such Letter of Credit.  The
Letter of Credit  Commissions  shall be (i) calculated on the basis of a 360-day
year for the  actual  number of days  elapsed,  and (ii)  payable  quarterly  in
arrears on the last day of each  March,  June,  September  and  December of each
year, on the expiration or cancellation of such Letter of Credit. In addition to
the Letter of Credit  Commissions,  the  Borrower  agrees to pay to the  Issuing
Bank, for its own account,  its standard fees and charges customarily charged to
customers similar to the Borrower with respect to any Letter of Credit.





                                      -34-
<PAGE>




     (c) Agent's and Issuing  Bank's  Fees.  The  Borrower  agrees to pay to the
Agent and the Issuing Bank, for their own respective  accounts,  such other fees
as have been  agreed to in writing by the  Borrower,  the Agent and the  Issuing
Bank.

     3.3. Conversions and Continuations

     (a) The  Borrower  may  elect  from  time to  time to  convert  one or more
Eurodollar  Advances to ABR  Advances by giving the Agent at least one  Business
Day's prior irrevocable  notice of such election by the delivery by facsimile of
a Notice of  Conversion/Continuation,  specifying the amount to be so converted,
provided,  that any such conversion of Eurodollar Advances shall only be made on
the last day of the Eurodollar  Interest Period applicable thereto. In addition,
the  Borrower  may  elect  from  time to time to (i)  convert  ABR  Advances  to
Eurodollar  Advances and (ii) to continue Eurodollar Advances by selecting a new
Eurodollar  Interest Period therefor,  in each case by giving the Agent at least
three Business Days' prior  irrevocable  notice of such election by the delivery
by facsimile of a Notice of Conversion/Continuation, in the case of a conversion
to, or  continuation  of,  Eurodollar  Advances,  specifying the amount to be so
converted and the initial Eurodollar Interest Period relating thereto,  provided
that any such  conversion of ABR Advances to Eurodollar  Advances  shall only be
made on a Business Day and any continuation of Eurodollar Advances shall only be
made  on the  last  day of the  Eurodollar  Interest  Period  applicable  to the
Eurodollar  Advances which are to be continued as such new Eurodollar  Advances.
The  Agent  shall  promptly  provide  the  Lenders  with a notice  of each  such
election.  Loans may be converted  pursuant to this Section in whole or in part,
provided  that the  amount to be  converted  to each  Eurodollar  Advance,  when
aggregated  with any  Eurodollar  Advance to be made on such date in  accordance
with Section 2.3 and having the same  Eurodollar  Interest  Period as such first
Eurodollar  Advance,  shall equal no less than  $1,000,000 or such amount plus a
whole multiple of $100,000 in excess thereof.

     (b)  Notwithstanding  anything in this Agreement to the contrary,  upon the
occurrence and during the  continuance of a Default or an Event of Default,  the
Borrower  shall have no right to elect to convert any  existing ABR Advance to a
Eurodollar  Advance or to continue a Eurodollar  Advance as a Eurodollar Advance
with a new Eurodollar  Interest Period. In such event, such ABR Advance shall be
automatically  continued as an ABR Advance or such  Eurodollar  Advance shall be
automatically  converted  to an ABR  Advance  on the last day of the  Eurodollar
Interest Period applicable to such Eurodollar Advance. In addition,  if an Event
of Default  shall have  occurred  and be  continuing,  the Agent  shall,  at the
request of the Required Lenders, notify the Borrower (by telephone or otherwise)
that all, or such lesser amount as the Required Lenders shall designate,  of the
outstanding  Eurodollar  Advances  shall  be  automatically   converted  to  ABR
Advances,  in which  event  such  Eurodollar  Advances  shall  be  automatically
converted to ABR Advances on the date such notice is given.





                                      -35-
<PAGE>




     (c) Each  conversion  or  continuation  shall be effected by each Lender by
applying the proceeds of its new ABR Advance or Eurodollar  Advance, as the case
may  be,  to its  Advances  (or  portion  thereof)  being  converted  (it  being
understood that such conversion shall not constitute a borrowing for purposes of
Sections 4, 5 or 6).

     (d) Competitive Bid Loans may not be converted or continued.

     3.4. Concerning Eurodollar Interest Periods

     Notwithstanding any other provision of any other Loan Document:

     (a) If the Borrower  shall have failed to elect a Eurodollar  Advance under
Section 2.3 or 3.3, as the case may be, in connection  with any borrowing of new
Revolving  Credit  Loans or  expiration  of a  Eurodollar  Interest  Period with
respect to any existing Eurodollar  Advance,  the amount of the Revolving Credit
Loans  subject to such  borrowing  or such  existing  Eurodollar  Advance  shall
thereafter  be an ABR Advance  until such time,  if any, as the  Borrower  shall
elect a new Eurodollar Advance pursuant to Section 3.3.

     (b) No  Eurodollar  Interest  Period  selected in respect of  conversion or
continuation of any Eurodollar  Advance comprising a Revolving Credit Loan shall
end after the Maturity Date.

     (c) The Borrower shall not be permitted to have more than eight  Eurodollar
Advances outstanding at any one time, provided,  however,  that at no time shall
the  number of the  Competitive  Interest  Periods  in  respect  of  outstanding
Competitive Bid Loans and Eurodollar  Interest Periods in respect of outstanding
Eurodollar Advances exceed eight.

     3.5. Indemnification for Loss

     Notwithstanding  anything  contained  herein  to the  contrary,  if (i) the
Borrower  shall fail for any reason to borrow,  convert or  continue  an Advance
after it shall have given  notice to do so in which it shall  have  requested  a
Eurodollar  Advance pursuant to Section 2.3 or 3.3, (ii) the Borrower shall fail
to borrow a Competitive Bid Loan after it shall have accepted one or more offers
therefor  pursuant to Section 2.4,  (iii) a Eurodollar  Advance or a Competitive
Bid  Loan  shall  be  terminated  for any  reason  prior  to the last day of the
Interest Period applicable  thereto,  or (iv) any repayment or prepayment of the
principal amount of a Eurodollar  Advance is made by the Borrower for any reason
on a date  which is prior to the  last  day of the  Interest  Period  applicable
thereto,  the Borrower  agrees to indemnify each Lender  against,  and to pay on
demand  directly to such Lender the amount  (calculated by such Lender using any
method chosen by such Lender which is  customarily  used by such Lender for such
purpose) equal to any loss or out-of-pocket expense suffered by such Lender as a
result of such  failure to borrow,  convert or  continue,  or such  termination,
repayment or




                                      -36-
<PAGE>




prepayment,  including  any loss,  cost or expense  suffered  by such  Lender in
liquidating  or employing  deposits  acquired to fund or maintain the funding of
such  Eurodollar  Advance or its  Competitive  Bid Loan,  as the case may be, or
redeploying funds prepaid or repaid, in amounts which correspond to its pro rata
share of such  Eurodollar  Advance or its  Competitive Bid Loan, as the case may
be, and any internal  processing  charge  customarily  charged by such Lender in
connection  therewith.  At the election of such Lender, and without limiting the
generality of the  foregoing,  but without  duplication,  such  compensation  on
account of losses may include an amount  equal to the excess of (i) the interest
(excluding  the  Applicable  Margin)  that  would  have been  received  from the
Borrower under this Agreement on any amounts to be reemployed during an Interest
Period or its remaining  portion over (ii) the interest  component of the return
that such Lender  determines it could have obtained had it placed such amount on
deposit (A) in the case of a Eurodollar  Advance,  in the  interbank  eurodollar
market selected for a period equal to the applicable  Eurodollar Interest Period
or its remaining  portion and (B) in the case of a Competitive  Bid Loan, in the
domestic  certificate  of  deposit  market  selected  for a period  equal to the
applicable   Competitive   Interest  Period  or  its  remaining  portion.   Each
determination  by the  Agent  or a  Lender  pursuant  to this  Section  shall be
conclusive and binding on the Borrower absent manifest error.

     3.6. Capital Adequacy

     If the amount of capital  required  or  expected  to be  maintained  by any
Lender or any Person  directly or indirectly  owning or controlling  such Lender
(each a "Control  Person"),  shall be affected by the occurrence of a Regulatory
Change and such Lender shall have determined  that Regulatory  Change shall have
had or will  thereafter  have the effect of  reducing  (i) the rate of return on
such Lender's or such Control Person's capital,  or (ii) the asset value to such
Lender or such Control Person of the Loans made or maintained by such Lender, in
either case to a level below that which such Lender or such Control Person could
have  achieved or would  thereafter  be able to achieve but for such  Regulatory
Change  (after  taking  into  account  such  Lender's or such  Control  Person's
policies  regarding  capital  adequacy) by an amount deemed by such Lender to be
material to such Lender or Control Person, then, within ten days after demand by
such Lender,  the Borrower  shall pay to such Lender or such Control Person such
additional amount or amounts as shall be sufficient to compensate such Lender or
such Control Person, as the case may be, for such reduction.

     3.7. Reimbursement for Increased Costs

     If any Lender shall determine that a Regulatory Change:

     (a) does or shall  subject  any Lender to any Taxes of any kind  whatsoever
with respect to any Eurodollar  Advances or its obligations under this Agreement
to make Eurodollar Advances,  or change the basis of taxation of payments to any
Lender of principal,  interest or any other amount payable  hereunder in respect
of its Eurodollar




                                      -37-
<PAGE>




Advances,  or impose on the Agent,  the  Issuing  Bank or such  Lender any other
condition  regarding the Letters of Credit  including  any Taxes  required to be
withheld  from  any  amounts  payable  under  the  Loan  Documents  (except  for
imposition  of, or change in the rate of, Tax on the  Overall Net Income of such
Lender); or

     (b) does or shall impose,  modify or make  applicable any reserve,  special
deposit,  compulsory  loan,  assessment,  increased cost or similar  requirement
against assets held by, or deposits of, or advances or loans by, or other credit
extended by, or any other  acquisition of funds by, any office of such Lender in
respect  of its  Eurodollar  Advances  which is not  otherwise  included  in the
determination  of a Eurodollar  Rate or against any Letters of Credit  issued or
participated  in by any  Lender;  and the result of any of the  foregoing  is to
increase the cost to such Lender of making, renewing, converting,  continuing or
maintaining  its Eurodollar  Advances or its commitment to make such  Eurodollar
Advances,  or to reduce  any  amount  receivable  hereunder  in  respect  of its
Eurodollar  Advances,  or to increase the cost to the Issuing Bank of issuing or
maintaining  the  Letters of Credit or the cost to any  Lender of  participating
therein  or the  cost  to the  Agent  or the  Issuing  Bank  of  performing  its
respective  functions hereunder with respect to the Letters of Credit,  then, in
any such case, the Borrower  shall pay such Lender,  within 10 days after demand
therefor,  such  additional  amounts as is sufficient to compensate such Lender,
the Issuing Bank or the Agent,  as the case may be, for such  additional cost or
reduction  in such amount  receivable  which such Lender deems to be material as
determined  by such Lender,  the Issuing Bank or the Agent,  as the case may be;
provided,  however,  that nothing in this Section  shall require the Borrower to
indemnify the Lenders with respect to  withholding  Taxes for which the Borrower
has no  obligation  under  Section  3.10.  No  failure  by any  Lender to demand
compensation  for any increased  cost in respect of a Eurodollar  Advance during
any  Interest  Period  applicable  thereto  shall  constitute  a waiver  of such
Lender's  right to demand such  compensation  at any time.  A statement  setting
forth  the  calculations  of any  additional  amounts  payable  pursuant  to the
foregoing  sentence submitted by a Lender, the Issuing Bank or the Agent, as the
case may be, to the Borrower shall be conclusive absent manifest error.

     3.8. Illegality of Funding

     Notwithstanding  any other provision hereof, if any Lender shall reasonably
determine that any law, regulation,  treaty or directive,  or any change therein
or in the interpretation or application thereof, shall make it unlawful for such
Lender to make or  maintain  any  Eurodollar  Advance  as  contemplated  by this
Agreement, such Lender shall promptly notify the Borrower and the Agent thereof,
and (i) the  commitment  of such  Lender to make  such  Eurodollar  Advances  or
convert ABR Advances to Eurodollar  Advances shall forthwith be suspended,  (ii)
such Lender shall fund its portion of each  requested  Eurodollar  Advance as an
ABR Advance and (iii) such Lender's  Revolving  Credit Loans then outstanding as
such Eurodollar Advances, if any, shall be converted automatically to an ABR




                                      -38-
<PAGE>




Advance  on  the  last  day of  the  then  current  Eurodollar  Interest  Period
applicable thereto or at such earlier time as may be required. If the commitment
of any Lender with respect to Eurodollar  Advances is suspended pursuant to this
Section and such Lender shall have  obtained  actual  knowledge  that it is once
again legal for such Lender to make or maintain Eurodollar Advances, such Lender
shall  promptly  notify the Agent and the Borrower  thereof and, upon receipt of
such notice by each of the Agent and the Borrower,  such Lender's  commitment to
make or maintain Eurodollar Advances shall be reinstated.

     3.9. Substituted Interest Rate

     In the event that (i) the Agent shall have determined (which  determination
shall  be  conclusive   and  binding  upon  the  Borrower)  that  by  reason  of
circumstances  affecting the  interbank  eurodollar  market either  adequate and
reasonable  means do not exist for  ascertaining  the Eurodollar Rate applicable
pursuant to Section 3.1 or (ii) the  Required  Lenders  shall have  notified the
Agent that they have  determined  (which  determination  shall be conclusive and
binding on the Borrower) that the applicable Eurodollar Rate will not adequately
and fairly  reflect the cost to such  Lenders of  maintaining  or funding  loans
bearing  interest based on such Eurodollar  Rate, with respect to any portion of
the Revolving Credit Loans that the Borrower has requested be made as Eurodollar
Advances or Eurodollar  Advances that will result from the requested  conversion
or  continuation  of any portion of the Advances into or of Eurodollar  Advances
(each, an "Affected Advance"),  the Agent shall promptly notify the Borrower and
the Lenders (by telephone or otherwise,  to be promptly confirmed in writing) of
such  determination,  on or, to the extent  practicable,  prior to the requested
Borrowing Date or  Conversion/Continuation  Date for such Affected Advances.  If
the Agent shall give such notice, (a) any Affected Advances shall be made as ABR
Advances,  (b) the  Advances  (or any  portion  thereof)  that were to have been
converted  to or  continued  as  Affected  Advances  shall  be  converted  to or
continued as ABR Advances and (c) any  outstanding  Affected  Advances  shall be
converted,  on the last day of the then current Eurodollar  Interest Period with
respect thereto, to ABR Advances. Until any notice under clauses (i) or (ii), as
the case may be, of this  Section has been  withdrawn by the Agent (by notice to
the  Borrower  promptly  upon either (x) the Agent having  determined  that such
circumstances  affecting  the  interbank  eurodollar  no  longer  exist and that
adequate and  reasonable  means do exist for  determining  the  Eurodollar  Rate
pursuant to Section 3.1 or (y) the Agent having been  notified by such  Required
Lenders  that  circumstances  no longer  render  the  Advances  (or any  portion
thereof) Affected Advances,  no further Eurodollar Advances shall be required to
be made by the  Lenders,  nor shall the  Borrower  have the right to  convert or
continue all or any portion of the  Revolving  Credit Loans to or as  Eurodollar
Advances.

     3.10. Taxes

     (a) Payments to Be Free and Clear. Provided that all documentation, if any,
then required to be delivered by any Lender or the Agent  pursuant to subsection
(c) has




                                      -39-
<PAGE>




been delivered,  all sums payable by the Borrower under the Loan Documents shall
be paid free and clear of and (except to the extent required by law) without any
deduction or  withholding on account of any Tax (other than a Tax on the Overall
Net Income of any Lender  (for which  payment  need not be free and clear but no
deduction or withholding  shall be made unless then required by applicable law))
imposed, levied, collected,  withheld or assessed by or within the United States
or  any  political  subdivision  in  or  of  the  United  States  or  any  other
jurisdiction  from or to which a payment is made by or on behalf of the Borrower
or by any  federation  or  organization  of which the United  States or any such
jurisdiction is a member at the time of payment.

     (b)  Grossing-up  of  Payments.  If the  Borrower  or any  other  Person is
required by law to make any deduction or  withholding on account of any such Tax
from any sum paid or payable by the  Borrower  to the Agent or any Lender  under
any of the Loan Documents:

     (i) the  Borrower  shall  notify  the  Agent  and such  Lender  of any such
requirement  or any  change  in any  such  requirement  as soon as the  Borrower
becomes aware of it;

     (ii) the Borrower shall pay any such Tax before the date on which penalties
attach  thereto,  such payment to be made (if the liability to pay is imposed on
the Borrower) for its own account or (if that  liability is imposed on the Agent
or such Lender, as the case may be) on behalf of and in the name of the Agent or
such Lender;

     (iii) the sum  payable by the  Borrower to the Agent or a Lender in respect
of which the relevant  deduction,  withholding  or payment is required  shall be
increased  to the  extent  necessary  to ensure  that,  after the making of that
deduction, withholding or payment, the Agent or such Lender, as the case may be,
receives on the due date therefor a net sum equal to what it would have received
had no such deduction, withholding or payment been required or made; and

     (iv)  within 30 days after  paying any sum from which it is required by law
to make any deduction or  withholding,  and within 30 days after the due date of
payment of any Tax which it is required by clause (b) above to pay, the Borrower
shall deliver to the Agent and the applicable  Lender  evidence  satisfactory to
the other affected parties of such deduction,  withholding or payment and of the
remittance thereof to the relevant Governmental Authority;

provided  that no such  additional  amount  shall be  required to be paid to any
Lender  under  clause (iii) above except to the extent that any change after the
date hereof (in the case of each Lender listed on the signature pages hereof) or
after the date of the Assignment and Acceptance Agreement pursuant to which such
Lender  became  a  Lender  (in the  case  of  each  other  Lender)  in any  such
requirement for a deduction, withholding or payment as is



                                      -40-
<PAGE>




mentioned  therein  shall  result in an increase in the rate of such  deduction,
withholding  or payment from that in effect at the date of this  Agreement or at
the date of such  Assignment and  Acceptance,  as the case may be, in respect of
payments to such Lender.

     (c) U.S. Tax Certificates.  Each Lender that is organized under the laws of
any  jurisdiction  other than the United  States shall  deliver to the Agent for
transmission to the Borrower,  on or prior to the Effective Date (in the case of
each Lender  listed on the signature  pages hereof) or on the effective  date of
the Assignment and  Acceptance  Agreement  pursuant to which it becomes a Lender
(in the case of each other Lender),  and at such other times as may be necessary
in the  determination  of the  Borrower  or the  Agent  (each in the  reasonable
exercise of its  discretion),  such  certificates,  documents or other evidence,
properly  completed  and  duly  executed  by  such  Lender  (including,  without
limitation,  Internal  Revenue  Service Form W-8,  Form 1001 or Form 4224 or any
other  certificate  or statement of exemption  required by Treasury  Regulations
Section 1.1441-4(a), Section 1.1441-6(c), Section 35a9999-4 or Section 35a9999-5
or any  successor  thereto)  to  establish  that such  Lender is not  subject to
deduction or withholding of United States federal income tax under Section 1441,
1442 or 3406 of the Code or otherwise (or under any comparable provisions of any
successor  statute)  with respect to any  payments to such Lender of  principal,
interest,  fees or other amounts  payable under any of the Loan  Documents.  The
Borrower shall not be required to pay any  additional  amount to any such Lender
under subsection  (b)(iii) above if such Lender shall have failed to satisfy the
requirements of the immediately preceding sentence; provided that if such Lender
shall have  satisfied  such  requirements  on the Effective Date (in the case of
each Lender  listed on the signature  pages hereof) or on the effective  date of
the Assignment and Acceptance Agreement pursuant to which it became a Lender (in
the case of each other  Lender),  nothing in this  subsection  shall relieve the
Borrower of its obligation to pay any additional  amounts pursuant to subsection
(b)(iii) in the event that,  as a result of any change in  applicable  law, such
Lender is no longer  properly  entitled to deliver  certificates,  documents  or
other evidence at a subsequent  date  establishing  the fact that such Lender is
not subject to withholding as described in the immediately preceding sentence.

     3.11. Option to Fund

     Each Lender has  indicated  that,  if the  Borrower  requests a  Eurodollar
Advance or such Lender makes a Competitive Bid Loan to the Borrower, such Lender
may wish to  purchase  one or more  deposits  in order to fund or  maintain  its
funding  of  its  Commitment  Percentage  of  such  Eurodollar  Advance  or  its
Competitive  Bid Loans,  as the case may be,  during the  Interest  Period  with
respect  thereto;  it being  understood  that the  provisions of this  Agreement
relating to such funding are included  only for the purpose of  determining  the
rate of  interest  to be paid in  respect  of such  Eurodollar  Advance  and any
amounts owing under  Sections 3.5 and 3.7. Each Lender shall be entitled to fund
and maintain its funding of all or any part of each Eurodollar  Advance and each
Competitive  Bid Loan in any  manner  it sees fit,  but all such  determinations
under Section 3.5 and 3.7 shall be




                                      -41-
<PAGE>




made as if each  Lender  had  actually  funded  and  maintained  its  Commitment
Percentage of each such Eurodollar  Advance or its Competitive Bid Loans, as the
case may be,  during the  applicable  Interest  Period  through the  purchase of
deposits in an amount equal to the amount of its  Commitment  Percentage of such
Eurodollar  Advance or the amount of its  Competitive Bid Loans, as the case may
be, having a maturity corresponding to such Interest Period. Any Lender may fund
its Commitment  Percentage of each  Eurodollar  Advance or its  Competitive  Bid
Loans,  as the case may be,  from or for the  account of any branch or office of
such Lender as such Lender may choose from time to time.


4.       REPRESENTATIONS AND WARRANTIES

     In order to induce the Agent and the  Lenders to enter into this  Agreement
and to make the Loans and the  Issuing  Bank to issue the  Letters of Credit and
the  Lenders  to   participate   therein,   the  Borrower  makes  the  following
representations and warranties to the Agent, the Issuing Bank and each Lender:

     4.1. Subsidiaries

     As of the Effective Date, the Borrower has only the  Subsidiaries set forth
on, and the  percentage  ownership by the Borrower and its  Subsidiaries  of the
authorized,  issued  and  outstanding  Capital  Stock (or  partnership  or other
interests,  as the case may be) of each  such  Subsidiary  is as set  forth  on,
Schedule 4.1. As of the Effective Date, except as set forth on Schedule 4.1, the
shares of, or partnership or other interests in, each Subsidiary of the Borrower
are owned  beneficially  and of record by the Borrower or another  Subsidiary of
the  Borrower,  are free and clear of all Liens  except as  permitted by Section
8.2, and are duly authorized,  validly issued, fully paid and nonassessable.  As
of the  Effective  Date,  except as set forth on Schedule  4.1,  (i) neither the
Borrower nor any of its Subsidiaries has issued any securities convertible into,
or options or warrants for, any common or preferred equity  securities  thereof,
and (ii) there are no agreements,  voting trusts or understandings  binding upon
the Borrower or any of its Subsidiaries with respect to the voting securities of
the  Borrower or any of its  Subsidiaries  or  affecting in any manner the sale,
pledge,  assignment or other disposition  thereof,  including any right of first
refusal, option,  redemption,  call or other right with respect thereto, whether
similar or dissimilar to any of the foregoing.

     4.2. Existence and Power

     Each of the  Borrower  and each of its  Subsidiaries  is duly  organized or
formed and validly  existing in good standing under the laws of the jurisdiction
of its incorporation or formation,  has all requisite power and authority to own
its  Property  and to carry on its  business  as now  conducted,  and is in good
standing and authorized to do business in each  jurisdiction in which the nature
of the business conducted therein or the Property owned




                                      -42-
<PAGE>




therein makes such qualification necessary, except where such failure to qualify
could not reasonably be expected to have a Material Adverse Effect.

     4.3. Authority

     Each of the  Borrower  and  each of its  Subsidiaries  has full  power  and
authority to own its Property,  conduct its business,  and enter into,  execute,
deliver and perform the terms of the Loan Documents to which it is a party,  all
of which  have been duly  authorized  by all  proper  and  necessary  corporate,
partnership or other action, as the case may be, and are in full compliance with
its certificate of  incorporation  and by- laws or partnership  agreement and/or
other organic documents, as the case may be.

     4.4. Binding Agreement

     The Loan Documents (other than the Notes)  constitute,  and the Notes, when
issued and delivered  pursuant hereto for value received,  will constitute,  the
valid  and  legally  binding  obligations  of  the  Borrower  and  each  of  its
Subsidiaries to the extent the Borrower or such Subsidiary,  as the case may be,
is a party  thereto,  enforceable  in accordance  with their  respective  terms,
except  as  such  enforceability  may  be  limited  by  applicable   bankruptcy,
insolvency,  reorganization  or other similar laws affecting the  enforcement of
creditors' rights generally.

     4.5. Litigation

     Except  as set  forth on  Schedule  4.5,  there  are no  actions,  suits or
proceedings  at law or in  equity  or by or before  any  Governmental  Authority
(whether  purportedly  on behalf  of the  Borrower  or any of its  Subsidiaries)
pending or, to the knowledge of the Borrower, threatened against the Borrower or
any  of  its  Subsidiaries,  or  maintained  by  the  Borrower  or  any  of  its
Subsidiaries,  or which may affect the  Property  of the  Borrower or any of its
Subsidiaries,  which (i) could reasonably be expected to have a Material Adverse
Effect,  (ii) call into question the validity or enforceability of, or otherwise
seek to invalidate,  any Loan Document, or (iii) which might, individually or in
the  aggregate,   materially  and  adversely  affect  any  of  the  transactions
contemplated by any Loan Document.

     4.6. Required Consents

     Except for information  filings  required to be made in the ordinary course
of business which are not a condition to the  performance by the Borrower or any
of its  Subsidiaries  under the Loan  Documents,  no consent,  authorization  or
approval of, filing with, notice to, or exemption by, stockholders or holders of
any other equity  interest,  any  Governmental  Authority or any other Person is
required to authorize, or is required in connection with the execution, delivery
and performance of the Loan Documents to which the Borrower




                                      -43-
<PAGE>




or any of its  Subsidiaries  is a party or is  required  as a  condition  to the
validity or enforceability of the Loan Documents to which is a party.

     4.7. Absence of Defaults; No Conflicting Agreements

     (a) Neither the Borrower nor any of its  Subsidiaries  is in default  under
any  mortgage,  indenture  (including,   without  limitation,  the  Subordinated
Indenture),  contract or  agreement to which it is a party or by which it or any
of its  Property  is bound,  the effect of which  default  could  reasonably  be
expected to have a Material Adverse Effect.  No provision of any statute,  rule,
regulation,  judgment,  directive,  decree or order,  or any  existing  material
mortgage, indenture, contract or agreement, in each case binding on the Borrower
or any of its  Subsidiaries  or affecting the Property of the Borrower or any of
its  Subsidiaries  conflicts with, or requires any consent which has not already
been obtained  under,  or would in any way prohibit the  execution,  delivery or
performance by the Borrower or any of its Subsidiaries of the terms of, any Loan
Document.  The  execution,  delivery  or  carrying  out of the terms of the Loan
Documents  will not  constitute  a default  under,  or result in the creation or
imposition  of, or  obligation  to  create,  any Lien upon any  Property  of the
Borrower  or any of its  Subsidiaries  or result in a breach of or  require  the
mandatory repayment of or other acceleration of payment under or pursuant to the
terms  of any such  mortgage,  indenture  (including,  without  limitation,  the
Subordinated Indenture), contract or agreement.

     (b) Neither the  Borrower  nor any of its  Subsidiaries  is in default with
respect to any  judgment,  order,  writ,  injunction,  decree or decision of any
Governmental  Authority  which  default  could  reasonably be expected to have a
Material Adverse Effect.

     4.8. Compliance with Applicable Laws

     The  Borrower  and each of its  Subsidiaries  is  complying in all material
respects with all statutes,  regulations,  rules and orders of all  Governmental
Authorities which are applicable to the Borrower or such Subsidiary, a violation
of which could  reasonably be expected to have a Material  Adverse  Effect.  The
Borrower and each of its  Subsidiaries  has filed or caused to be filed with all
Governmental Authorities all reports, applications,  documents,  instruments and
information  required  to be  filed  pursuant  to all  applicable  laws,  rules,
regulations and requests which, if not so filed, could reasonably be expected to
have a Material Adverse Effect.

     4.9. Taxes

     The Borrower and each of its  Subsidiaries  has filed or caused to be filed
all tax  returns  required  to be  filed  and has  paid,  or has  made  adequate
provision  for the  payment  of, all taxes  shown to be due and  payable on said
returns or in any assessments  made against it (other than those being contested
as required under Section 7.4) which would be material




                                      -44-
<PAGE>




to the  Borrower  or any of its  Subsidiaries,  and no tax Liens have been filed
against the Borrower or any of its Subsidiaries and no claims are being asserted
with  respect  to such  taxes  which are  required  by GAAP (as in effect on the
Effective  Date) to be  reflected  in the  Financial  Statements  and are not so
reflected  therein.  The  charges,  accruals  and  reserves  on the books of the
Borrower and each of its Subsidiaries with respect to all federal,  state, local
and other taxes are, to the best  knowledge  of the  Borrower,  adequate for the
payment of all such taxes, and the Borrower knows of no unpaid  assessment which
is due and payable against the Borrower or any of its Subsidiaries or any claims
being  asserted  which could  reasonably be expected to have a Material  Adverse
Effect,  except such thereof as are being  contested as required  under  Section
7.4, and for which  adequate  reserves  have been set aside in  accordance  with
GAAP.

     4.10. Governmental Regulations

     Neither the Borrower nor any of its Subsidiaries nor any Person  controlled
by,  controlling,  or under  common  control  with,  the  Borrower or any of its
Subsidiaries,  is subject to regulation under the Public Utility Holding Company
Act of 1935, as amended,  the Federal Power Act, as amended,  or the  Investment
Company  Act of 1940,  as amended,  or is subject to any  statute or  regulation
which prohibits or restricts the incurrence of Indebtedness,  including, without
limitation,  statutes or regulations  relative to common or contract carriers or
to the sale of electricity,  gas, steam,  water,  telephone,  telegraph or other
public utility services.

     4.11. Federal Reserve Regulations; Use of Loan Proceeds

     Neither the Borrower nor any of its Subsidiaries is engaged principally, or
as one of its important activities,  in the business of extending credit for the
purpose of purchasing  or carrying any Margin Stock.  After giving effect to the
making of each Loan,  Margin Stock will  constitute  less than 25% of the assets
(as determined by any reasonable method) of the Borrower and its Subsidiaries.

     4.12. Plans

     Each Employee  Benefit Plan  maintained or participated in by the Borrower,
its  Subsidiaries  or the ERISA  Affiliates is in compliance  with ERISA and the
Code, where  applicable,  in all material  respects.  Each Employee Benefit Plan
maintained or  participated  in by the Borrower,  its  Subsidiaries or the ERISA
Affiliates is in compliance with ERISA and the Code,  where  applicable,  in all
material  respects.  As of the Effective Date, (i) there are no Unfunded Pension
Liabilities under the Pension Plans, excluding any plan which is a Multiemployer
Plan, and (ii) there is no  Unrecognized  Retiree  Welfare  Liability  under any
applicable  Employee Benefit Plan. The Borrower and each of its Subsidiaries and
ERISA Affiliates has complied with the requirements of Section 515 of ERISA with
respect to each Pension Plan which is a Multiemployer  Plan. As of the Effective
Date, the aggregate po-




                                      -45-
<PAGE>




tential annual withdrawal  liability payments,  as determined in accordance with
Title IV of ERISA,  of the Borrower and its  Subsidiaries  and ERISA  Affiliates
with respect to all Pension Plans which are Multiemployer  Plans does not exceed
$250,000. The Borrower and its Subsidiaries and ERISA Affiliates have, as of the
Effective Date, made all contributions or payments to or under each such Pension
Plan  required  by law or the  terms of such  Pension  Plan or any  contract  or
agreement with respect thereto.  No material  liability to the PBGC has been, or
is expected by the Borrower,  any of its  Subsidiaries or any ERISA Affiliate to
be,  incurred  by the  Borrower,  any such  Subsidiary  or any ERISA  Affiliate.
Liability,  as  referred  to in this  Section  includes  any joint  and  several
liability.  Each  Employee  Benefit Plan which is a group health plan within the
meaning of Section  5000(b)(1)  of the Code is in material  compliance  with the
continuation of health care coverage  requirements of Section 4980B of the Code.
Notwithstanding  anything to the contrary  contained in this  Section  4.12,  no
representation  or warranty  contained  in this  Section 4.12 shall be made with
respect to any liability  incurred by the Borrower,  any of its  Subsidiaries or
any ERISA Affiliate in respect of the District 65 Multiemployer Pension Plan, so
long as the aggregate amount of all such liabilities does not exceed $2,500,000.

     4.13. Financial Statements

     The Borrower has  heretofore  delivered to the Agent and the Lenders copies
of its Form 10-K for the fiscal year ending  December 31, 1995,  containing  the
audited  Consolidated  Balance Sheets of the Borrower and its Subsidiaries as of
December  31,  1995,  and  December  31,  1994,  and  the  related  Consolidated
Statements  of  Operations,  Stockholders'  Investment  and Cash  Flows  for the
periods  then ended,  and its Form 10-Q for the fiscal  quarter  ended March 31,
1996 , containing the unaudited  Consolidated  Balance Sheet of the Borrower and
its Subsidiaries for such fiscal quarter, together with the related Consolidated
Statements of Operations, Stockholders' Investment and Cash Flows for the fiscal
quarter  then  ended  (with the  applicable  related  notes and  schedules,  the
"Financial   Statements").   The  Financial   Statements   fairly   present  the
Consolidated  financial  condition and results of the operations of the Borrower
and its Subsidiaries as of the dates and for the periods  indicated  therein and
have been prepared in conformity with GAAP. Except as reflected in the Financial
Statements  or in the  footnotes  thereto,  neither the  Borrower nor any of its
Subsidiaries  has any  obligation  or  liability  of any  kind  (whether  fixed,
accrued,  contingent,  unmatured or otherwise)  which,  in accordance with GAAP,
should have been shown in the Financial  Statements  and was not. Since December
31, 1995, the Borrower and each of its  Subsidiaries  has conducted its business
only in the ordinary course and there has been no Material Adverse Change.

     4.14. Property

     Each  of the  Borrower  and  each of its  Subsidiaries  has  (i)  good  and
marketable  title to all of its  Property,  title to  which is  material  to the
Borrower or such Subsidiary and




                                      -46-
<PAGE>




(ii) a valid leasehold  interest in all Property,  a leasehold interest in which
is  material  to the  Borrower or such  Subsidiary,  in each case  subject to no
Liens, except Permitted Liens.

     4.15. Authorizations

     Each of the  Borrower  and each of its  Subsidiaries  possesses  or has the
right to use all  franchises,  licenses  and other  rights as are  material  and
necessary  for the conduct of its  business,  and with respect to which it is in
compliance,  with no known  conflict with the valid rights of others which could
reasonably be expected to have a Material Adverse Effect.  No event has occurred
which  permits or, to the best  knowledge of the  Borrower,  after notice or the
lapse of time or both, or any other  condition,  could reasonably be expected to
permit,  the revocation or termination of any such  franchise,  license or other
right which  revocation or  termination  could  reasonably be expected to have a
Material Adverse Effect.

     4.16. Environmental Matters

     (a) No  Hazardous  Substances  have  been  generated  or  manufactured  on,
transported  to or from,  treated  at,  stored  at or  discharged  from any Real
Property in violation of any  Environmental  Laws; no Hazardous  Substances have
been discharged  into subsurface  waters under any Real Property in violation of
any  Environmental  Laws; no Hazardous  Substances have been discharged from any
Real  Property  on or into  Property  or waters  (including  subsurface  waters)
adjacent to any Real Property in violation of any Environmental  Laws; and there
are not now, nor ever have been, on any Real Property any  underground  or above
ground storage tanks regulated under any Environmental Laws.

     (b) Neither  the  Borrower  nor any of its  Subsidiaries  (i) has  received
notice  (written  or oral) or  otherwise  learned  of any claim,  demand,  suit,
action,  proceeding,  event,  condition,  report,  directive,  Lien,  violation,
non-compliance or investigation indicating or concerning any potential or actual
liability (including,  without limitation,  potential liability for enforcement,
investigatory  costs,  cleanup costs,  government response costs, removal costs,
remedial costs, natural resources damages,  Property damages,  personal injuries
or  penalties)  arising  in  connection  with:  (x) any  non-compliance  with or
violation of the requirements of any applicable  Environmental  Laws, or (y) the
presence of any  Hazardous  Substance on any Real Property (or any Real Property
previously  owned by the Borrower or any of its  Subsidiaries) or the release or
threatened release of any Hazardous Substance into the environment, (ii) has any
threatened or actual  liability in connection with the presence of any Hazardous
Substance on any Real  Property (or any Real  Property  previously  owned by the
Borrower or any of its Subsidiaries) or the release or threatened release of any
Hazardous  Substance  into the  environment,  (iii) has  received  notice of any
federal or state investigation  evaluating whether any remedial action is needed
to respond to the presence of any  Hazardous  Substance on any Real Property (or
any Real Property  previously owned by the Borrower or any of its  Subsidiaries)
or a  release  or  threatened  release  of  any  Hazardous  Substance  into  the
environment for which the Borrower or any of its Subsidiaries




                                      -47-
<PAGE>




is or may be liable, or (iv) has received notice that the Borrower or any of its
Subsidiaries is or may be liable to any Person under any Environmental Law.

     4.17. Absence of Certain Restrictions

     No indenture,  certificate of designation for preferred stock, agreement or
instrument  to which the Borrower or any of its  Subsidiaries  is a party (other
than this Agreement), prohibits or limits in any way, directly or indirectly the
ability of any Subsidiary of the Borrower to make  Restricted  Payments or repay
any Indebtedness to the Borrower or to another Subsidiary of the Borrower.

     4.18. Status as Senior Indebtedness

     On and after the Effective  Date, the obligations of the Loan Parties under
the Loan Documents  constitute "Senior  Indebtedness" under, and as such term is
defined in, the Subordinated Indenture.

     4.19. Security Interest

     The  Loan  Documents,  together  with  the  delivery  to the  Agent  of the
promissory  notes  constituting  the Collateral  and the  continuous  possession
thereof by the Agent in the State of New York, creates a continuing  enforceable
security interest in the Collateral,  to the extent such creation is governed by
the New York Uniform Commercial Code as in effect on the date of this Agreement,
securing the payment of the  obligations  of each of the Loan Parties  under the
Loan Documents to which it is a party.

     4.20. No Misrepresentation

     No  representation  or  warranty  contained  in any  Loan  Document  and no
certificate,  Financial  Statement,  written notice, or report from time to time
furnished  by the Borrower or any of its  Subsidiaries  in  connection  with the
transactions  contemplated  thereby,  contains or will contain a misstatement of
material fact, or, to the best knowledge of the Borrower,  omits or will omit to
state a  material  fact  required  to be stated in order to make the  statements
therein contained not misleading in the light of the  circumstances  under which
made,  provided,  however,  that  any  projections  and/or  pro-forma  financial
information   contained   therein  are  based  upon  good  faith  estimates  and
assumptions believed by the Borrower to be reasonable at the time made, it being
recognized  by the Agent and the  Lenders  that  such  projections  as to future
events are not to be viewed as facts,  and that actual results during the period
or  periods  covered  by any such  projections  may  differ  from the  projected
results.






                                      -48-
<PAGE>




5.       CONDITIONS TO EFFECTIVENESS

     The  effectiveness of this Agreement shall be subject to the fulfillment of
the following conditions precedent:

     5.1. Evidence of Action

     The Agent shall have received a certificate,  dated the Effective  Date, of
the Secretary,  Assistant Secretary or other analogous  counterpart of each Loan
Party (i) attaching a true and complete copy of the  resolutions of its Managing
Person and of all documents evidencing all necessary  corporate,  partnership or
similar  action (in form and  substance  reasonably  satisfactory  to the Agent)
taken by it to  authorize  the  Loan  Documents  to which it is a party  and the
transactions  contemplated  thereby,  (ii) attaching a true and complete copy of
its  organizational  documents,  (iii)  setting  forth  the  incumbency  of  the
corporate  officer(s) or other analogous  counterparts thereof who may sign such
Loan Documents, including therein a signature specimen of such corporate officer
or  counterpart,  as the case may be, and (iv)  attaching a certificate  of good
standing of the  Secretary of State of the State of its formation and each other
jurisdiction in which it is qualified to conduct business except, in the case of
such  other  jurisdiction,  when  the  failure  to be in good  standing  in such
jurisdiction would not have a Material Adverse Effect.

     5.2. This Agreement

     The Agent shall have received counterparts of this Agreement signed by each
of the  parties  hereto  (or  receipt  by the  Agent  from a party  hereto  of a
facsimile  signature  page  signed by such  party  which  shall  have  agreed to
promptly provide the Agent with originally executed counterparts hereof).

     5.3. Notes

     The  Agent  shall  have  received  the  Revolving   Credit  Notes  and  the
Competitive Bid Notes, duly executed by an Authorized Signatory of the Borrower.

     5.4. Subsidiary Guaranty

     The Borrower  shall have delivered or caused to be delivered to the Agent a
guaranty,  dated the Effective  Date,  executed by each of the parties listed on
Schedule  5.4,  and in the  form of  Exhibit  I (as  the  same  may be  amended,
supplemented   or  otherwise   modified  from  time  to  time,  the  "Subsidiary
Guaranty").





                                      -49-
<PAGE>




     5.5. Absence of Litigation

     There shall be no injunction,  writ, preliminary restraining order or other
order  of  any  nature  issued  by any  Governmental  Authority  in any  respect
affecting the  transactions  provided for in the Loan Documents and no action or
proceeding by or before any  Governmental  Authority  has been  commenced and is
pending or, to the knowledge of the Borrower,  threatened, seeking to prevent or
delay the  transactions  contemplated  by the Loan Documents or challenging  any
other  terms  and  provisions  hereof or  thereof  or  seeking  any  damages  in
connection  therewith,  and the Agent shall have received a certificate,  in all
respects  satisfactory to the Agent, of an executive  officer of the Borrower to
the foregoing effects.

     5.6. Approvals and Consents

     All  approvals  and  consents  of all  Persons  required  to be obtained in
connection with the  consummation of the  transactions  contemplated by the Loan
Documents  shall have been  obtained and shall be in full force and effect,  and
all required notices have been given and all required waiting periods shall have
expired,  and the Agent  shall have  received  a  certificate,  in all  respects
satisfactory  to the  Agent,  of an  executive  officer of the  Borrower  to the
foregoing effects.

     5.7. Intercompany Notes

     Each Loan Party  shall have  delivered  to the Agent,  in  accordance  with
Section 8.5(f), a promissory note evidencing Intercompany  Indebtedness owing to
such Person,  together with an allonge evidencing the pledge of such note to the
Agent.

     5.8. Opinion of Counsel

     The Agent shall have received an opinion of Cummings & Lockwood, counsel to
the Borrower and the parties listed on Schedule 5.4, addressed to the Agent, the
Co-Agent,  the Issuing Bank and the Lenders (and  permitting  Special Counsel to
rely  thereon),  and  dated the  Effective  Date,  substantially  in the form of
Exhibit L.

     5.9. Opinion of Special Counsel

     The Agent shall have received an opinion of Special  Counsel,  addressed to
the Agent,  the  Issuing  Bank and the  Lenders  and dated the  Effective  Date,
substantially in the form of Exhibit M.





                                      -50-
<PAGE>




     5.10. Subordinated Indenture

     The Agent shall have  received a fully  executed  copy of the  Subordinated
Indenture,  certified to be a true and complete copy thereof by the Secretary or
Assistant  Secretary  of the  Borrower,  which  shall be in form  and  substance
satisfactory to the Agent.

     5.11. Property, Public Liability and Other Insurance

     The Agent shall have received a certificate of all insurance  maintained by
the Borrower and its Subsidiaries in form and substance reasonably  satisfactory
to the Agent.

     5.12. Fees

     All fees payable to the Agent on the first  Borrowing  date shall have been
paid.

     5.13. Fees and Expenses of Special Counsel

     The  fees  and  expenses  of  Special   Counsel  in  connection   with  the
preparation, negotiation and closing of the Loan Documents shall have been paid.

     5.14. Other Documents

     The Agent  shall  have  received  such  other  documents,  each in form and
substance  reasonably  satisfactory to the Agent, as the Agent shall  reasonably
require in connection  with the making of the first  Revolving  Credit Loans and
the issuance of first Letters of Credit.


6.       CONDITIONS OF LENDING - ALL LOANS AND LETTERS OF CREDIT

     The obligation of each Lender to make any Loan or the Issuing Bank to issue
any Letter of Credit on a Borrowing Date and each Lender to participate  therein
is  subject  to  the  prior   satisfaction   of  the  conditions   precedent  to
effectiveness  set forth in Section 5 and to the  satisfaction  of the following
conditions  precedent as of the date of such Loan or the issuance of such Letter
of Credit, as the case may be:

     6.1. Compliance

     On each  Borrowing Date and after giving effect to the Loans to be made and
the  Letters of Credit to be issued  thereon (i) there shall exist no Default or
Event of Default,  (ii) the representations and warranties contained in the Loan
Documents  shall  be true  and  correct  with the same  effect  as  though  such
representations and warranties had been made on



                                      -51-
<PAGE>




such Borrowing Date,  except to the extent such  representations  and warranties
specifically  relate to an earlier date, in which case such  representations and
warranties  shall have been true and correct on and as of such earlier date, and
(iii) no Material  Adverse  Change shall have occurred  since December 31, 1995.
Each borrowing by the Borrower shall  constitute a certification by the Borrower
as of such Borrowing Date that each of the foregoing matters is true and correct
in all respects.

     6.2. Borrowing Request; Letter of Credit Request; Competitive Bid Request

     With  respect  to the  Loans to be made,  and the  Letters  of Credit to be
issued,  on each Borrowing Date, the Agent shall have received,  (i) in the case
of Revolving Credit Loans, a Borrowing  Request,  (ii) in the case of Letters of
Credit, a Letter of Credit Request, and (iii) in the case Competitive Bid Loans,
a  Competitive  Bid Request and such other  documents  required to be  delivered
pursuant to Section 2.4, in each case duly executed by an  Authorized  Signatory
of the Borrower.

     6.3. Other Documents

     The Agent  shall have  received  such other  documents  as the Agent or the
Lenders shall reasonably request.


7.       AFFIRMATIVE COVENANTS

     The Borrower agrees that, so long as this Agreement is in effect,  any Loan
or Reimbursement  Obligation  (contingent or otherwise) in respect of any Letter
of Credit remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender, the Issuing Bank or the Agent, the Borrower shall:

     7.1. Financial Statements and Information

     Maintain, and cause each of its Subsidiaries to maintain, a standard system
of accounting in accordance  with GAAP,  and furnish or cause to be furnished to
the Agent and each Lender:

     (a) As soon as available,  but in any event within 90 days after the end of
each fiscal year, a copy of its Consolidated Balance Sheet as at the end of such
fiscal year,  together with the related  Consolidated  Statements of Operations,
Stockholders' Investment and Cash Flows as of and through the end of such fiscal
year,  setting  forth  in each  case in  comparative  form the  figures  for the
preceding  fiscal  year.  The   Consolidated   Balance  Sheet  and  Consolidated
Statements of Operations,  Stockholders'  Equity and Cash Flows shall be audited
and certified  without  qualification  by the Accountants,  which  certification
shall (i) state that the examination by such Accountants in connection with such



                                      -52-
<PAGE>




Consolidated  financial  statements  has been made in accordance  with generally
accepted  auditing  standards  and,  accordingly,  included  such  tests  of the
accounting  records  and  such  other  auditing  procedures  as were  considered
necessary in the circumstances, and (ii) include the opinion of such Accountants
that such  Consolidated  financial  statements  have been prepared in accordance
with GAAP in a manner consistent with prior fiscal periods,  except as otherwise
specified in such opinion.  Notwithstanding  any of the foregoing,  the Borrower
may satisfy its obligation under this subsection (a) by furnishing copies of the
Borrower's  annual report on Form 10-K in respect of such fiscal year,  together
with the  financial  statements  required to be attached  thereto,  provided the
Borrower is  required  to file such annual  report on Form 10-K with the SEC and
such filing is actually made.

     (b) As soon as available,  but in any event within 45 days after the end of
each of the first three  fiscal  quarters,  a copy of the  Consolidated  Balance
Sheet of the Borrower as at the end of each such quarterly period, together with
the related Consolidated Statements of Operations,  Stockholders' Investment and
Cash Flows for such  period  and for the  elapsed  portion  of the  fiscal  year
through such date,  setting forth in each case in  comparative  form the figures
for the  corresponding  periods of the  preceding  fiscal  year,  certified by a
Financial Officer of the Borrower, as being complete and correct in all material
respects and as presenting fairly the Consolidated  financial  condition and the
Consolidated  results  of  operations  of the  Borrower  and  its  Subsidiaries.
Notwithstanding  any of the  foregoing,  the Borrower may satisfy its obligation
under this  subsection  (b) by  furnishing  copies of the  Borrower's  quarterly
report  on Form  10-Q in  respect  of such  fiscal  quarter,  together  with the
financial  statements required to be attached thereto,  provided the Borrower is
required to file such quarterly report on Form 10-Q with the SEC and such filing
is actually made.

     (c) Within 45 days after the end of each of the first three fiscal quarters
(90 days after the end of the last fiscal  quarter),  a Compliance  Certificate,
certified by a Financial Officer of the Borrower.

     (d) As soon as available,  but in any event within 45 days after the end of
each fiscal quarter,  a copy of (i) the Borrower's  directors' report in respect
of such fiscal quarter, and (ii) the Borrower's daily cash flow report, dated as
of the end of the most recent fiscal quarter.

     (e) Such  other  information  as the  Agent or any  Lender  may  reasonably
request from time to time.

     7.2. Certificates; Other Information

     Furnish to the Agent and each Lender:

     (a) Prompt written notice if: (i) any  Indebtedness  of the Borrower or any
of its  Subsidiaries in an aggregate amount in excess of $250,000 is declared or
shall




                                      -53-
<PAGE>




become due and payable prior to its stated  maturity,  or is called and not paid
when due,  (ii) a default  shall have  occurred  under any note  (other than the
Notes) or the  holder  of any such  note,  or other  evidence  of  Indebtedness,
certificate  or security  evidencing any such  Indebtedness  or any obligee with
respect to any other Indebtedness of the Borrower or any of its Subsidiaries has
the right to declare  Indebtedness in an aggregate  amount in excess of $250,000
due and payable prior to its stated  maturity or, (iii) there shall occur and be
continuing a Default, an Event of Default or a Material Adverse Change.

     (b) Prompt written notice of: (i) any citation, summons, subpoena, order to
show cause or other  document  naming the Borrower or any of its  Subsidiaries a
party to any proceeding before any Governmental Authority which could reasonably
be expected to have a Material  Adverse  Effect or which calls into question the
validity or enforceability  of any of the Loan Documents,  and include with such
notice a copy of such citation,  summons, subpoena, order to show cause or other
document,  (ii) any lapse or other termination of any material license,  permit,
franchise  or  other  authorization  issued  to  the  Borrower  or  any  of  its
Subsidiaries by any Person or Governmental  Authority,  and (iii) any refusal by
any  Person  or  Governmental  Authority  to renew or extend  any such  material
license,  permit,  franchise or other authorization,  which lapse,  termination,
refusal or dispute  could  reasonably  be  expected  to have a Material  Adverse
Effect.

     (c) Promptly  upon becoming  available,  copies of all material (i) special
reports,  schedules  and  other  material  which  the  Borrower  or  any  of its
Subsidiaries  may now or  hereafter  be  required to file with or deliver to any
securities exchange or the SEC, or any other Governmental  Authority  succeeding
to the functions  thereof and (ii) news releases and annual reports  relating to
the Borrower or any of its Subsidiaries.

     (d)  Prompt  written  notice in the  event  that the  Borrower,  any of its
Subsidiaries or any ERISA  Affiliate  knows, or has reason to know, that (i) any
Termination  Event with  respect to a Pension  Plan (other than the  District 65
Multiemployer  Pension Plan, so long as the aggregate  amount of all liabilities
incurred by the Borrower,  its  Subsidiaries and the ERISA Affiliates in respect
thereof  shall not exceed  $2,500,000)  has  occurred  or will  occur,  (ii) any
condition  exists with  respect to a Pension  Plan  (other than the  District 65
Multiemployer  Pension Plan, so long as the aggregate  amount of all liabilities
incurred by the Borrower,  its  Subsidiaries and the ERISA Affiliates in respect
thereof  shall  not  exceed  $2,500,000)  which  presents  a  material  risk  of
termination  of the Pension Plan,  imposition of an excise tax,  requirement  to
provide security to the Pension Plan or other liability on the Borrower,  any of
its  Subsidiaries  or  any  ERISA  Affiliate,  (iii)  the  Borrower,  any of its
Subsidiaries  or any ERISA  Affiliate  has  applied  for a waiver of the minimum
funding  standard  under  Section 412 of the Code with respect to a Pension Plan
(other than the District 65 Multiemployer Pension Plan, so long as the aggregate
amount of all liabilities  incurred by the Borrower,  its  Subsidiaries  and the
ERISA  Affiliates  in respect  thereof  shall not exceed  $2,500,000),  (iv) the
aggregate amount of the Unfunded Pension  Liabilities under all Pension Plans is
in excess of $250,000, (v) the aggregate amount of Unrecognized




                                      -54-
<PAGE>




Retiree  Welfare  Liability  under all applicable  Employee  Benefit Plans is in
excess of $250,000,  (vi) the  Borrower,  any of its  Subsidiaries  or any ERISA
Affiliate  has engaged in a Prohibited  Transaction  with respect to an Employee
Benefit Plan, (vii) the imposition of any tax under Section 4980B(a) of the Code
or (viii) the  assessment  of a civil  penalty  under  Section  502(c) of ERISA,
together  with a  certificate  of the  president  or a Financial  Officer of the
Borrower  setting  forth the  details  of such  event and the  action  which the
Borrower,  such Subsidiary or such ERISA Affiliate proposes to take with respect
thereto, together with a copy of all notices and filings with respect thereto.

     (e)  Prompt  written  notice  in  the  event  that  Borrower,  any  of  its
Subsidiaries  or any ERISA Affiliate shall receive a demand letter from the PBGC
notifying the  Borrower,  such  Subsidiary or such ERISA  Affiliate of any final
decision  finding  liability and the date by which such  liability must be paid,
together  with a copy of such letter and a  certificate  of the  president  or a
Financial  Officer of the Borrower  setting forth the action which the Borrower,
such Subsidiary or such ERISA Affiliate proposes to take with respect thereto.

     (f) Promptly upon the same becoming available, and in any event by the date
such  amendment  is  adopted,  a copy of any  Pension  Plan  amendment  that the
Borrower, any of its Subsidiaries or any ERISA Affiliate proposes to adopt which
would  require the posting of security  under  Section  401(a)(29)  of the Code,
together  with a  certificate  of the  president  or a Financial  Officer of the
Borrower  setting  forth the reasons for the adoption of such  amendment and the
action which the Borrower,  such Subsidiary or such ERISA Affiliate  proposes to
take with respect thereto.

     (g) As soon as  possible  and in any  event  by the  tenth  day  after  any
required  installment  or other  payment under Section 412 of the Code owed to a
Pension  Plan  shall have  become due and owing and remain  unpaid a copy of the
notice of failure to make  required  contributions  provided  to the PBGC by the
Borrower, any of its Subsidiaries or any ERISA Affiliate under Section 412(n) of
the Code,  together with a certificate  of the president or a Financial  Officer
setting  forth the action  which the  Borrower,  such  Subsidiary  or such ERISA
Affiliate proposes to take with respect thereto.

     (h) If the  termination  of any Pension Plan would result in the imposition
of any tax under Section 4980 of the Code,  then as soon as possible,  but in no
event less than 60 days  before the due date of the tax,  a  certificate  of the
president or a Financial  Officer of the Borrower  setting  forth the  estimated
amount of such tax, any reversion, and the proposed use of such reversion.  This
subsection shall apply to a transaction  notwithstanding a reduction or complete
elimination  of a tax because of the  operation  of either  Sections  4980(d) or
420(a)(3)(A) of the Code.





                                      -55-
<PAGE>




     (i)  Prompt  written  notice  of any  order,  notice,  claim or  proceeding
received by, or brought  against,  the Borrower or any of its  Subsidiaries,  or
with respect to any of the Real Property, under any Environmental Law.

     (j) Such  other  information  as the Agent or any Lender  shall  reasonably
request from time to time.

     7.3. Legal Existence

     Except as may otherwise be permitted by Sections 8.3 and 8.4, maintain, and
cause each of its  Subsidiaries  to  maintain,  its  corporate,  partnership  or
analogous existence, as the case may be, in good standing in the jurisdiction of
its  incorporation  or  formation  and in each other  jurisdiction  in which the
failure so to do could reasonably be expected to have a Material Adverse Effect.

     7.4. Taxes

     Pay and discharge  when due, and cause each of its  Subsidiaries  so to do,
all Taxes,  assessments and governmental charges,  license fees and levies upon,
or with  respect  to, the  Borrower  or such  Subsidiary  and all Taxes upon the
income,  profits and  Property of the Borrower  and its  Subsidiaries,  which if
unpaid, could reasonably be expected to have a Material Adverse Effect or become
a Lien on the  Property of the  Borrower or such  Subsidiary  (other than a Lien
described in Section 8.2(a)(i)),  unless and to the extent only that such Taxes,
assessments,  charges,  license fees and levies shall be contested in good faith
and by  appropriate  proceedings  diligently  conducted  by the Borrower or such
Subsidiary,  provided  that the Borrower  shall give the Agent prompt  notice of
such  contest and that such reserve or other  appropriate  provision as shall be
required  by the  Accountants  in  accordance  with  GAAP  shall  have been made
therefor.

     7.5. Insurance

     Maintain, and cause each of its Subsidiaries to maintain,  with financially
sound and  reputable  insurance  companies  insurance  on all its Property in at
least such  amounts and against at least such risks (but  including in any event
public liability,  product liability and business interruption  coverage) as are
usually  insured  against in the same general  area by companies  engaged in the
same or a similar business; and furnish to the Agent, upon written request, full
information as to the insurance carried.

     7.6. Performance of Obligations

     Pay and discharge  when due, and cause each of its  Subsidiaries  so to do,
all  lawful  Indebtedness,  obligations  and claims  for  labor,  materials  and
supplies  or  otherwise  which,  if unpaid,  might (i) have a  Material  Adverse
Effect, or (ii) become a Lien upon



                                      -56-
<PAGE>




Property of the Borrower or any of its Subsidiaries other than a Permitted Lien,
unless and to the extent only that the validity of such Indebtedness, obligation
or  claim  shall be  contested  in good  faith  and by  appropriate  proceedings
diligently  conducted by it,  provided  that the  Borrower  shall give the Agent
prompt  notice of any such  contest and that such  reserve or other  appropriate
provision as shall be required by the  Accountants in accordance with GAAP shall
have been made therefor.

     7.7. Condition of Property

     At all times, maintain,  protect and keep in good repair, working order and
condition (ordinary wear and tear excepted),  and cause each of its Subsidiaries
so to do, all Property  necessary to the  operation  of the  Borrower's  or such
Subsidiary's business.

     7.8. Observance of Legal Requirements

     Observe and comply in all respects,  and cause each of its  Subsidiaries so
to do,  with  all  laws,  ordinances,  orders,  judgments,  rules,  regulations,
certifications,  franchises,  permits, licenses,  directions and requirements of
all  Governmental  Authorities,  which  now  or at  any  time  hereafter  may be
applicable  to it, a violation of which could  reasonably  be expected to have a
Material Adverse Effect, except such thereof as shall be contested in good faith
and by appropriate  proceedings  diligently  conducted by it,  provided that the
Borrower  shall  give the  Agent  prompt  notice of such  contest  and that such
reserve or other  appropriate  provision as shall be required by the Accountants
in accordance with GAAP shall have been made therefor.

     7.9. Inspection of Property; Books and Records; Discussions

     At  all   reasonable   times,   upon   reasonable   prior  notice,   permit
representatives  of the  Agent  and each  Lender  to visit  the  offices  of the
Borrower and each of its Subsidiaries,  to examine the books and records thereof
and  Accountants'  reports  relating  thereto,  and to make  copies or  extracts
therefrom,  to discuss the affairs of the Borrower and each such Subsidiary with
the respective officers thereof,  and to examine and inspect the Property of the
Borrower  and each such  Subsidiary  and to meet and  discuss the affairs of the
Borrower and each such Subsidiary with the Accountants.

     7.10. Authorizations

     Maintain, and cause each of its Subsidiaries to maintain, in full force and
effect, all material licenses, franchises, permits, licenses, authorizations and
other rights as are necessary for the conduct of its business.

     7.11. Financial Covenants





                                      -57-
<PAGE>




     (a) Interest Coverage Ratio. As of any date,  maintain an Interest Coverage
Ratio of not less than 4.00:1.00.

     (b) Leverage Ratio.  As of any date,  maintain a Leverage Ratio of not more
than 3.00:1.00.

     (c) Consolidated Net Worth. As of any date, maintain Consolidated Net Worth
in an  amount  not  less  than  the  sum of (i)  $125,000,000,  (ii)  50% of the
cumulative  positive  net  income  of the  Borrower  and its  Subsidiaries  on a
Consolidated basis in respect of each completed fiscal quarter during the period
commencing  on January  1, 1996 and  ending on such  date,  and (iii) 50% of the
difference,  if  any,  between  Consolidated  Net  Worth  as of  such  date  and
Consolidated  Net Worth as of December 31, 1995,  to the extent such  difference
shall  have  resulted  from  equity  issuances  by  the  Borrower  or any of its
Subsidiaries or conversions of the Subordinated  Debentures into equity pursuant
to the terms thereof.

     7.12. Additional Material Domestic Subsidiaries

     (a) On or prior to each  date  hereafter  upon  which a Person  shall  have
become a Material Domestic  Subsidiary,  cause such Material Domestic Subsidiary
to  become a party to the  Subsidiary  Guaranty,  in  accordance  with the terms
thereof, on and as of such date.

     (b) Cause each Material Domestic Subsidiary which shall have become a party
to the Subsidiary  Guaranty at any time after the Effective  Date, to deliver to
the Agent,  simultaneously  with the execution  and delivery of the same,  (i) a
certificate,  dated the date such Material Domestic Subsidiary shall have become
a  party  to  the  Subsidiary  Guaranty,  executed  by  such  Material  Domestic
Subsidiary and  substantially  in the form of, and with  substantially  the same
attachments as, the certificate which would have been required under Section 5.1
if such  Material  Domestic  Subsidiary  had  become a party  to the  Subsidiary
Guaranty on or before the Effective  Date,  (ii) each promissory note evidencing
Intercompany  Indebtedness  required  to be  pledged  to the Agent  pursuant  to
Section  8.5(f) and (iii) if  requested  by the Agent,  an opinion of counsel to
such  Material  Domestic  Subsidiary,  covering the same matters with respect to
such  Material  Domestic  Subsidiary  as were covered by the opinions  delivered
pursuant to Section 5.8, in form and substance  reasonably  satisfactory  to the
Agent.

     7.13. Concerning the Collateral

     The  Borrower  shall,  and shall  cause each other Loan Party to,  promptly
execute  and  deliver  at  its  own  expense,   all   certificates,   documents,
instruments,  financing and  continuation  statements  and  amendments  thereto,
notices and other  agreements,  and take all further action,  that the Agent may
reasonably request from time to time, in order to perfect




                                      -58-
<PAGE>




and protect the security  interest  granted to the Agent in the Collateral or to
enable the Agent to exercise and enforce its rights and remedies with respect to
the Collateral.


     8. NEGATIVE COVENANTS

     The Borrower agrees that, so long as this Agreement is in effect,  any Loan
or Reimbursement  Obligation  (contingent or otherwise) in respect of any Letter
of Credit remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender,  the Issuing Agent or the Agent, the Borrower shall
not, directly or indirectly:

     8.1. Indebtedness

     Create, incur, assume or suffer to exist any Indebtedness, or permit any of
its  Subsidiaries  so to do, except (i)  Indebtedness  under the Loan Documents,
(ii)  Indebtedness  under  the  Subordinated  Indenture  and in  respect  of the
Subordinated   Debentures,    (iii)   the   Subordinated   Indenture   Refinance
Indebtedness,  (iv)  Indebtedness  set forth on Schedule  8.1, (v)  Intercompany
Indebtedness,  (vi)  Indebtedness  of the Borrower and its  Subsidiaries  not in
excess  of  $10,000,000  in the  aggregate  at any one  time  outstanding  under
reimbursement agreements (other than the Reimbursement Agreements) in respect of
letters  of  credit,  (vii)  Indebtedness  in  respect  of  Sale  and  Leaseback
Transactions  permitted under Section 8.9,  (viii)  Indebtedness of the Borrower
and its Subsidiaries  incurred in the ordinary course of business (A) in respect
of capital  leases,  (B) secured by Liens on Property  (including,  in the event
such Property  constitutes  capital stock of a newly acquired  Subsidiary of the
Borrower,  Liens on the Property of such Subsidiary) acquired by the Borrower or
any of its Subsidiaries  after the date hereof,  provided that such Liens are in
existence on the date of such  acquisition  and were not placed on such Property
in contemplation of such acquisition,  and (C) other purchase money Indebtedness
of the Borrower and its  Subsidiaries,  provided  that,  in each case under this
clause (viii),  the Lien securing such Indebtedness is permitted by Section 8.2,
(ix)  Indebtedness  of the Borrower not in excess of $15,000,000 at any one time
outstanding in respect of industrial  development  bonds issued for its benefit,
and (x) other unsecured Indebtedness of the Borrower and its Subsidiaries not in
excess of $20,000,000 in the aggregate at any one time outstanding.

     8.2. Liens

     (a)  Create,  incur,  assume  or  suffer  to exist any Lien upon any of its
Property,  whether  now  owned  or  hereafter  acquired,  or  permit  any of its
Subsidiaries  so to do,  except  (i) Liens for  Taxes,  assessments  or  similar
charges  incurred in the ordinary course of business which are not delinquent or
which  are being  contested  in  accordance  with  Section  7.4,  provided  that
enforcement  of such  Liens  is  stayed  pending  such  contest,  (ii)  Liens in
connection with workers'  compensation,  unemployment  insurance or other social
security  obligations (but not ERISA), (iii) deposits or pledges to secure bids,
tenders,




                                      -59-
<PAGE>




contracts  (other than  contracts for the payment of money),  leases,  statutory
obligations,  surety  and  appeal  bonds and other  obligations  of like  nature
arising in the ordinary course of business,  (iv) zoning ordinances,  easements,
rights of way, minor  defects,  irregularities,  and other similar  restrictions
affecting  real Property  which do not  adversely  affect the value of such real
Property or the financial condition of the Borrower or such Subsidiary or impair
its use for the  operation of the  business of the Borrower or such  Subsidiary,
(v)  Liens  arising  by  operation  of law  such as  mechanics',  materialmen's,
carriers',  warehousemen's  liens  incurred in the  ordinary  course of business
which are not delinquent or which are being contested in accordance with Section
7.6,  provided that  enforcement  of such Liens is stayed  pending such contest,
(vi) Liens  arising out of  judgments  or decrees  which are being  contested in
accordance with Section 7.6,  provided that  enforcement of such Liens is stayed
pending such contest,  (vii) Liens arising under Sale and Leaseback Transactions
permitted  under  Section 8.9,  (viii) Liens on Property of the Borrower and its
Subsidiaries  existing on the Effective  Date as set forth on Schedule 8.2, (ix)
Liens under capital leases and Liens on Property  (including,  in the event such
Property  constitutes  capital  stock  of a  newly  acquired  Subsidiary  of the
Borrower,  Liens on the  Property of such  Subsidiary)  hereafter  acquired  and
either  existing on such Property when  acquired,  or created  contemporaneously
with such acquisition,  to secure the payment or financing of the purchase price
thereof,  provided  that such Liens  attach only to the Property so purchased or
acquired and provided  further  that the  Indebtedness  secured by such Liens is
permitted by Section 8.1(viii), and (x) Liens securing Indebtedness permitted by
Section 8.1(ix).

     (b)  Enter  into or  permit  any of its  Subsidiaries  to enter  into,  any
agreement  which  prohibits  or  limits  the  ability  of the  Borrower  or such
Subsidiary to create,  incur, assume or suffer to exist any Lien upon any of its
Property,  whether now owned or hereafter  acquired  except (i)  purchase  money
mortgages or capital leases otherwise permitted by this Agreement in which case,
any  prohibition  or  limitation  shall  only be  effective  against  the assets
financed thereby, and (ii) this Agreement.

     8.3. Merger, Consolidations and Acquisitions

     Consolidate  with, be acquired by, merge into or with any Person,  make any
Acquisition or enter into any binding agreement to do any of the foregoing which
is not  contingent on obtaining the consent of the Required  Lenders,  or permit
any Subsidiary so to do, except:

     (a)  Acquisitions  pursuant to Sale and  Leaseback  Transactions  permitted
under Section 8.9;

     (b) provided that (i) the Agent shall have received ten days' prior written
notice and (ii) immediately before and after giving effect thereto no Default or
Event of Default shall exist, any direct or indirect wholly-owned  Subsidiary of
the Borrower may merge or  consolidate  with the Borrower or any other direct or
indirect wholly-owned




                                      -60-
<PAGE>




Subsidiary  of the  Borrower,  provided  that in the  event of a  merger  of the
Borrower and such wholly-owned Subsidiary, the Borrower shall be the survivor;

     (c) mergers involving  Subsidiaries as part of an Acquisition  permitted by
subsection  (e) below,  provided  that no Capital  Stock is issued in connection
therewith except to the extent permitted by Section 8.12;.

     (d) Investments permitted by Section 8.5; and

     (e) other Acquisitions by the Borrower or any Subsidiary  provided that the
following conditions are satisfied:

          (i) no Default or Event of Default shall exist  immediately  before or
     after giving effect to such Acquisition;

          (ii) the  Person to be  acquired  or the owner of the  Property  to be
     acquired, as the case may be, is engaged at the time of such Acquisition in
     substantially the same line of business as the Borrower or such Subsidiary,
     as the case may be;

          (iii) the Acquisition  shall have been approved by the Managing Person
     of the Person to be acquired or the owner of the  Property to be  acquired,
     as the case may be,  and by the  Managing  Person of the  Borrower  or such
     Subsidiary, as the case may be;

          (iv) all of the representations and warranties  contained in Section 4
     shall be true and correct as if made at the time of the Acquisition, except
     to the extent such representations and warranties specifically relate to an
     earlier date, in which case such  representations and warranties shall have
     been true and correct on and as of such earlier date;

          (v)  the  aggregate  consideration   (excluding  any  portion  thereof
     constituting Capital Stock of the Borrower or such Subsidiary,  as the case
     may be) paid in  connection  with such  Acquisition  (or  series of related
     transactions) shall not exceed $50,000,000;

          (vi) in the event that the aggregate  consideration paid in connection
     with such  Acquisition  shall be greater than  $7,500,000,  the Agent shall
     have received a certificate  (containing  calculations in reasonable detail
     with respect to the matters set forth in clause (B) below) of the Financial
     Officer of the  Borrower,  in all  respects  satisfactory  to the Agent and
     dated the date of such  Acquisition,  certifying  (A) with  respect  to the
     matters  set forth in clauses (i) and (iv) of this  Section  8.3(e) and (B)
     that immediately after giv-




                                      -61-
<PAGE>




     ing effect to such Acquisition and any Indebtedness  incurred or assumed in
     connection  therewith,  the Borrower will be in compliance with each of the
     financial covenants contained in Section 7.11;

          (vii) in the event that (A) the aggregate  consideration to be paid in
     connection with such Acquisition shall be greater than $37,500,000, and (B)
     all or any  portion  of  such  consideration  is to be  financed  with  the
     proceeds of any Loans or in  connection  with the issuance of any Letter of
     Credit,  the Required  Lenders shall have consented to such  Acquisition in
     writing;

          (viii) in the event that the aggregate  consideration  (excluding  any
     portion  thereof  constituting  Capital  Stock  of  the  Borrower  or  such
     Subsidiary,  as the case may be) paid in connection  with such  Acquisition
     (or series of related  transactions)  shall exceed  $15,000,000,  the Agent
     shall have received:

                    (A)  copies  of  the  audited  balance  sheets  and  related
               statements  of income and cash flows of the Person to be acquired
               or the owner of the Property to be acquired,  as the case may be,
               for the three fiscal years immediately preceding the date of such
               Acquisition  (or if such audited  statements  are not  available,
               unaudited  statements  for such periods  certified by a Financial
               Officer of such  Person or owner,  as the case may be),  together
               with,  in each case if  available,  unaudited  quarterly  balance
               sheets and  related  statements  of income and cash flows for the
               fiscal  quarters  of such  Person or  owner,  as the case may be,
               ending  after  the  date  of  the  last  such  annual   financial
               statement;

                    (B) a certificate  of the Financial  Officer of the Borrower
               (including  computations,   where  applicable)  in  all  respects
               satisfactory to the Agent and dated the date of such Acquisition,
               certifying  that after giving effect to such  Acquisition and any
               Indebtedness incurred or assumed in connection therewith which is
               permitted by Section 8.1, the Borrower will be in compliance with
               each of the  financial  covenants  contained in Section 7.11 on a
               pro-forma  basis after giving effect to such  Acquisition and any
               Indebtedness incurred or assumed in connection therewith which is
               permitted  by Section  8.1 for the  period  from the date of such
               Acquisition  through  the first  day of the  fourth  full  fiscal
               quarter ending after the date of such Acquisition; and




                                      -62-
<PAGE>





          (ix) the Agent shall have received such other information or documents
     as the Agent shall have reasonably requested.

          8.4. Dispositions

     Make any Disposition, or permit any of its Subsidiaries so to do, except:

               (a)  Dispositions  of any  Investments  permitted  under  Section
          8.5(a);

               (b)  Dispositions  pursuant  to Sale and  Leaseback  Transactions
          permitted under Section 8.9; and

               (c)  other  Dispositions  not in  excess  of  $10,000,000  in the
          aggregate during any fiscal year.

     8.5. Investments, Loans, Etc.

     At any time,  purchase or otherwise acquire,  hold or invest in the Capital
Stock of, or any other interest in, any Person,  or make any loan or advance to,
or enter into any  arrangement  for the purpose of providing funds or credit to,
or make any other  investment,  whether  by way of  capital  contribution,  time
deposit or otherwise,  in or with any Person,  or permit any of its Subsidiaries
so to do,  (all of which are  sometimes  referred  to  herein as  "Investments")
except:

               (a)  Investments  by the  Borrower  or  any  Subsidiary  in  Cash
          Equivalents;

               (b)  Investments  existing  on the date  hereof  as set  forth on
          Schedule 8.5;

               (c) normal business banking accounts and short-term  certificates
          of  deposit  and time  deposits  in, or issued by,  federally  insured
          institutions in amounts not exceeding the limits of such insurance;

               (d) Acquisitions permitted by Section 8.3;

               (e)  Investments  in  joint  ventures  by the  Borrower  and  its
          wholly-owned   Subsidiaries  not  in  excess  of  $25,000,000  in  the
          aggregate at any one time outstanding; and





                                      -63-
<PAGE>




               (f)  Investments  by the  Borrower  or  any  of its  wholly-owned
          Subsidiaries in Intercompany Indebtedness permitted under Section 8.1,
          provided  that any  such  Intercompany  Indebtedness  owed to any Loan
          Party shall be evidenced by a promissory  note and such note (except a
          note which  evidences  Indebtedness  payable to a Foreign  Subsidiary)
          shall be pledged and delivered to the Agent as collateral security for
          all of the  obligations  and  liabilities of such Loan Party under the
          Loan Documents, in each case whether fixed,  contingent,  now existing
          or hereafter arising, created, assumed, incurred or acquired.

     8.6. Restricted Payments

     Declare or pay any Restricted  Payments,  or permit any of its Subsidiaries
so to do, except that:  (i) any  wholly-owned  Subsidiary may declare and/or pay
Restricted Payments,  and (ii) provided that immediately before and after giving
effect  thereto,  no  Default  or Event of  Default  shall or would  exist,  the
Borrower may make  Restricted  Payments,  in respect of each fiscal year,  in an
aggregate  amount not in excess of 50% of the net income of the Borrower and its
Subsidiaries  on Consolidated  basis in respect of such fiscal year.  Restricted
Payments shall be calculated on a noncumulative  basis so that payments not made
in a fiscal year may not be carried over and made in any subsequent fiscal year.

     8.7. Line of Business; Cash Management Procedures

     (a) Engage in any  business,  or permit any of its  Subsidiaries  so to do,
that is materially different from the business conducted by the Borrower and the
Subsidiaries on the Effective Date.

     (b)  Alter  or  modify  in any  material  respect  the  international  cash
management procedures for its Subsidiaries from those in effect on the Effective
Date, or permit any of its Subsidiaries so to do.

     8.8. ERISA

     Establish or contribute, or permit any of its Subsidiaries so to do, to any
Pension Plan (other than an Existing Pension Plan) except to the extent that the
same could not  reasonably be expected to result in a Material  Adverse  Effect,
cause any Pension Plan to have a Funded  Current  Liability  Percentage  of less
than 60 percent,  or increase benefits,  or permit any of its Subsidiaries so to
do, under any  Employee  Benefit  Plan or  establish  or  contribute  to any new
Employee Benefit Plan except to the extent that the same could not reasonably be
expected to result in a Material Adverse Effect.

     8.9. Sale and Leaseback Transactions





                                      -64-
<PAGE>




     Enter  into  any Sale  and  Leaseback  Transaction,  or  permit  any of its
Subsidiaries  so to do,  except  that (a) the  Borrower  may enter into Sale and
Leaseback Transactions in an amount not in excess of $15,000,000 at any one time
outstanding in respect of industrial  development  bonds issued for its benefit,
and (b) the  Borrower  and its  Subsidiaries  may  enter  into  other  Sale  and
Leaseback  Transactions  in an  amount  not  in  excess  of  $10,000,000  in the
aggregate at any one time outstanding.

     8.10. Amendments, Etc. of Certain Documents and Agreements

     Amend,  supplement or otherwise modify (i) its certificate of incorporation
or  by-laws,  or cause,  permit or  otherwise  allow  any  Subsidiary  to amend,
supplement or otherwise  modify its certificate of  incorporation or by-laws or,
if such Subsidiary is not a corporation,  any analogous  counterpart thereof, or
(ii) the Subordinated  Indenture as in effect on the date hereof, unless, in any
such case, such amendment,  supplement or modification  would not materially and
adversely affect the Issuing Bank, the Agent or any Lender.

     8.11. Transactions with Affiliates

     Become, or permit any Subsidiary to become, a party to any transaction with
an Affiliate  of the Borrower on a basis less  favorable to the Borrower and its
Subsidiaries than if such transaction were not with an Affiliate.

     8.12. Issuance of Additional Capital Stock

     Issue any additional Capital Stock, or permit any of its Subsidiaries so to
do,  provided  that if no Default or Event of Default  would  exist  immediately
before or after giving effect thereto,  the Borrower or any of its  Subsidiaries
may issue additional Capital Stock (other than Disqualified Stock).

     8.13. Limitation on Certain Restrictions on Subsidiaries

     Directly  or  indirectly  create or  otherwise  cause or suffer to exist or
become  effective,  any  encumbrance or restriction on the ability of any of its
Subsidiaries  to (i) pay  Restricted  Payments or any  Indebtedness  owed to the
Borrower or any of its Subsidiaries of the Borrower, (ii) make loans or advances
to the Borrower or any  Subsidiary of the Borrower or (iii)  transfer any of its
Property to the Borrower, or permit any of its Subsidiaries so to do, except for
such encumbrances or restrictions  existing under or by reason of (x) applicable
law and (y) the Loan Documents.


9.       DEFAULT





                                      -65-
<PAGE>




     9.1. Events of Default

     The following shall each constitute an "Event of Default" hereunder:

     (a) The failure of the  Borrower to make any  payment of  principal  on any
Note,  or  any  reimbursement  payment  hereunder  or  under  any  Reimbursement
Agreement, when due and payable; or

     (b) The  failure of the  Borrower to make any  payment of  interest,  Fees,
expenses or other  amounts  payable  under any Loan Document or otherwise to the
Agent with  respect to the loan  facilities  established  hereunder  within five
Business Days of the date when due and payable; or

     (c) The  failure of the  Borrower  to observe or perform  any  covenant  or
agreement contained in Sections 2.7, 7.3, 7.11, 7.12 or Section 8; or

     (d) The  failure of the  Borrower  to observe  or perform  any other  term,
covenant,  or agreement  contained in any Loan  Document and such failure  shall
have continued  unremedied for a period of 30 days after the Borrower shall have
obtained knowledge thereof; or

     (e) Any representation or warranty made by any Loan Party (or by an officer
thereof  on its  behalf) in any Loan  Document  or in any  certificate,  report,
opinion (other than an opinion of counsel) or other document  delivered or to be
delivered  pursuant  thereto,  shall prove to have been  incorrect or misleading
(whether because of misstatement or omission) in any material respect when made;
or

     (f)  Liabilities  and/or other  obligations of the Borrower (other than its
obligations under the Notes) or any of its  Subsidiaries,  whether as principal,
guarantor,  surety or other  obligor,  for the  payment of any  Indebtedness  or
operating leases in an aggregate amount in excess of $500,000,  (i) shall become
or shall be  declared  to be due and  payable  prior to the  expressed  maturity
thereof,  or (ii) shall not be paid when due or within any grace  period for the
payment thereof, or (iii) any holder of any such obligation shall have the right
to declare  such  obligation  due and payable  prior to the  expressed  maturity
thereof;

     (g) Any license,  franchise,  permit,  right,  approval or agreement of the
Borrower or any of its Subsidiaries is not renewed, or is suspended,  revoked or
terminated and the non-renewal,  suspension,  revocation or termination  thereof
would have a Material Adverse Effect; or

     (h)  The  Borrower  or  any  of  its  Subsidiaries  shall  (i)  suspend  or
discontinue its business,  (ii) make an assignment for the benefit of creditors,
(iii) generally



                                      -66-
<PAGE>




not be paying  its debts as such debts  become  due,  (iv) admit in writing  its
inability to pay its debts as they become due, (v) file a voluntary  petition in
bankruptcy,  (vi) become insolvent (however such insolvency shall be evidenced),
(vii)  file any  petition  or answer  seeking  for  itself  any  reorganization,
arrangement,  composition,  readjustment of debt,  liquidation or dissolution or
similar  relief under any present or future  statute,  law or  regulation of any
jurisdiction,  (viii)  petition  or  apply  to any  tribunal  for any  receiver,
custodian or any trustee for any substantial  part of its Property,  (ix) be the
subject of any such proceeding filed against it which remains  undismissed for a
period of 45 days, (x) file any answer  admitting or not contesting the material
allegations  of any such  petition  filed  against it or any order,  judgment or
decree  approving  such  petition in any such  proceeding,  (xi) seek,  approve,
consent to, or acquiesce in any such  proceeding,  or in the  appointment of any
trustee, receiver, sequestrator,  custodian, liquidator, or fiscal agent for it,
or any substantial part of its Property,  or an order is entered  appointing any
such  trustee,  receiver,  custodian,  liquidator or fiscal agent and such order
remains in effect for 45 days,  or (xii) take any formal  action for the purpose
of effecting any of the foregoing or looking to the  liquidation  or dissolution
of the Borrower or such Subsidiary; or

     (i) An order for relief is entered under the United States  bankruptcy laws
or any other  decree or order is  entered  by a court  having  jurisdiction  (i)
adjudging the Borrower or any of its  Subsidiaries  bankrupt or insolvent,  (ii)
approving  as properly  filed a petition  seeking  reorganization,  liquidation,
arrangement,  adjustment or  composition of or in respect of the Borrower or any
of its  Subsidiaries  under  the  United  States  bankruptcy  laws or any  other
applicable  Federal or state  law,  (iii)  appointing  a  receiver,  liquidator,
assignee,  trustee,  custodian,  sequestrator (or other similar official) of the
Borrower or any of its  Subsidiaries or of any substantial  part of the Property
thereof,  or (iv) ordering the winding up or  liquidation  of the affairs of the
Borrower  or any of its  Subsidiaries,  and any such  decree or order  continues
unstayed and in effect for a period of 45 days; or

     (j)  Judgments or decrees  against the Borrower or any of its  Subsidiaries
aggregating  in excess of  $500,000  shall  remain  unpaid,  unstayed on appeal,
undischarged, unbonded or undismissed for a period of 30 days; or

     (k) The  occurrence  of an "Event of  Default"  under,  and as such term is
defined in, the Subsidiary Guaranty; or

     (l) The  Subsidiary  Guaranty  shall cease,  for any reason,  to be in full
force and effect or any Loan Party which is a party  thereto  shall so assert in
writing or shall disavow any of its obligations thereunder; or

     (m) A Change of Control shall have occurred or been agreed upon; or





                                      -67-
<PAGE>




     (n) (i) any  Termination  Event shall occur (other than with respect to the
District 65  Multiemployer  Pension Plan, so long as the aggregate amount of all
liabilities incurred by the Borrower,  its Subsidiaries and the ERISA Affiliates
in respect thereof shall not exceed  $2,500,000);  (ii) any Accumulated  Funding
Deficiency,  whether waived, shall exist with respect to any Pension Plan (other
than with respect to the District 65 Multiemployer  Pension Plan, so long as the
aggregate amount of all liabilities  incurred by the Borrower,  its Subsidiaries
and the ERISA Affiliates in respect thereof shall not exceed $2,500,000);  (iii)
any Person shall engage in any  Prohibited  Transaction  involving  any Employee
Benefit Plan; (iv) the Borrower,  any of its Subsidiaries or any ERISA Affiliate
shall fail to pay when due an amount  which is payable by it to the PBGC or to a
Pension  Plan  under  Title IV of  ERISA;  (v) the  imposition  of any tax under
Section  4980B(a)  of the Code;  (vi) the  assessment  of a civil  penalty  with
respect to any Employee Benefit Plan under Section 502(c) of ERISA; or (vii) any
other  event or  condition  shall  occur or exist with  respect  to an  Employee
Benefit Plan which would have a Material Adverse Effect; or

     (o) There shall occur (i) a "Fundamental Change" under, and as such term is
defined in, the Subordinated  Indenture as in effect on the Effective Date, (ii)
an "Event of Default"  under,  and as such term is defined in, the  Subordinated
Indenture as in effect on the date  hereof,  (iii) any other event (other than a
voluntary   redemption  or  repurchase  by  the  Borrower  of  the  Subordinated
Debentures in accordance with the terms of the  Subordinated  Indenture)  which,
after the giving of notice,  the lapse of time, or both, or the  satisfaction of
any other condition, would give the holders of Subordinated Debentures the right
to require the Borrower to redeem or  repurchase  the same, or (iv) an "Event of
Default"  under,  and as such term is  defined  in, any  Subordinated  Indenture
Refinance Document.

     9.2. Contract Remedies

     (a) Upon the  occurrence  of an Event of Default or at any time  thereafter
during  the  continuance  thereof,  (a) if such  event is an  Event  of  Default
specified in clause (h) or (i) above,  the Commitments of all of the Lenders and
the Letter of Credit Commitment shall  immediately and  automatically  terminate
and the Loans,  all  accrued  and unpaid  interest  thereon,  any  Reimbursement
Obligations owing or contingently owing in respect of all outstanding Letters of
Credit and all other amounts owing under the Loan  Documents  shall  immediately
become due and payable, and the Borrower shall forthwith deposit an amount equal
to the Letter of Credit Exposure in a cash collateral account with and under the
exclusive  control of the Agent,  and the Agent may,  and, upon the direction of
the  Required  Lenders  shall,  exercise  any and all  remedies and other rights
provided  in the Loan  Documents,  and (b) if such  event is any other  Event of
Default,  any or all of the following actions may be taken: (i) with the consent
of the Required  Lenders,  the Agent may, and upon the direction of the Required
Lenders shall, by notice to the Borrower,  declare the Commitments of all of the
Lenders  and  the  Letter  of  Credit  Commitment  to be  terminated  forthwith,
whereupon such Commitments and the Letter of Credit Commitment shall im-




                                      -68-
<PAGE>




mediately  terminate,  and (ii) with the consent of the  Required  Lenders,  the
Agent may, and upon the direction of the Required  Lenders  shall,  by notice of
default to the  Borrower,  declare the Loans,  all  accrued and unpaid  interest
thereon, any Reimbursement Obligations owing or contingently owing in respect of
all  outstanding  Letters of Credit and all other  amounts  owing under the Loan
Documents to be due and payable forthwith,  whereupon the same shall immediately
become due and payable, and the Borrower shall forthwith deposit an amount equal
to the Letter of Credit Exposure in a cash collateral account with and under the
exclusive control of the Agent, and the Agent may, and upon the direction of the
Required Lenders shall,  exercise any and all remedies and other rights provided
pursuant to the Loan  Documents.  Except as otherwise  provided in this Section,
presentment,  demand,  protest  and all  other  notices  of any kind are  hereby
expressly waived. The Borrower hereby further expressly waives and covenants not
to assert any appraisement,  valuation,  stay, extension,  redemption or similar
laws,  now or at any time  hereafter  in force  which  might  delay,  prevent or
otherwise impede the performance or enforcement of any Loan Document.

     (b) In the event that the  Commitments of all the Lenders and the Letter of
Credit  Commitment  shall  have been  terminated  or the Loans  shall  have been
declared due and payable  pursuant to the provisions of this Section,  any funds
received by the Agent, the Issuing Bank and the Lenders from or on behalf of the
Borrower  shall be applied by the Agent,  the  Issuing  Bank and the  Lenders in
liquidation  of  the  Loans,  the   Reimbursement   Obligations  and  the  other
obligations of the Borrower under the Loan Documents in the following manner and
order: (i) first, to the payment of interest on, and then the principal  portion
of,  any Loans  which the Agent may have  advanced  on behalf of any  Lender for
which the Agent has not then been  reimbursed  by such  Lender or the  Borrower;
(ii)  second,  to the  payment  of any fees or  expenses  due the Agent from the
Borrower,  (iii) third, to reimburse the Agent, the Issuing Bank and the Lenders
for any expenses (to the extent not paid pursuant to clause (ii) above) due from
the Borrower  pursuant to the  provisions of Section 11.5;  (iv) fourth,  to the
payment of accrued  Fees and all other fees,  expenses and amounts due under the
Loan Documents  (other than principal and interest on the Loans);  (v) fifth, to
the  payment  of  interest  due on the  Loans;  (vi)  sixth,  to the  payment of
principal outstanding on the Loans and under the Reimbursement  Agreements;  and
(vii)  seventh,  to the  payment of any other  amounts  owing to the Agent,  the
Issuing Bank and the Lenders under any Loan Document.


10.      THE AGENT

     10.1. Appointment

     Each of the Issuing Bank and each Lender hereby irrevocably  designates and
appoints  BNY as the Agent of the Issuing  Bank and such  Lender  under the Loan
Documents  and  each of the  Issuing  Bank and each  Lender  hereby  irrevocably
authorizes  the Agent to take such action on its behalf under the  provisions of
the Loan Documents and to exercise




                                      -69-
<PAGE>




such powers and perform such duties as are  expressly  delegated to the Agent by
the  terms of the  Loan  Documents,  together  with  such  other  powers  as are
reasonably  incidental  thereto.  Notwithstanding  any provision to the contrary
elsewhere  in any  Loan  Document,  the  Agent  shall  not have  any  duties  or
responsibilities  other than those expressly set forth therein, or any fiduciary
relationship  with the  Issuing  Bank or any Lender,  and no implied  covenants,
functions,  responsibilities,  duties,  obligations or liabilities shall be read
into the Loan Documents or otherwise exist against the Agent.

     10.2. Delegation of Duties

     The Agent may  execute  any of its duties  under the Loan  Documents  by or
through  agents  or  attorneys-in-fact  and shall be  entitled  to rely upon the
advice of counsel concerning all matters pertaining to such duties.

     10.3. Exculpatory Provisions

     Neither the Agent nor any of its officers,  directors,  employees,  agents,
attorneys-in-fact  or  affiliates  shall be (i) liable  for any action  lawfully
taken or omitted to be taken by it or such Person  under or in  connection  with
the Loan  Documents  (except the Agent for its own gross  negligence  or willful
misconduct), or (ii) responsible in any manner to the Issuing Bank or any of the
Lenders for any recitals, statements,  representations or warranties made by any
Loan Party or any officer  thereof  contained  in the Loan  Documents  or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection  with, the Loan Documents or for
the value, validity, effectiveness,  genuineness, perfection,  enforceability or
sufficiency of any of the Loan Documents or for any failure of any Loan Party or
any other Person to perform its obligations  thereunder.  The Agent shall not be
under any  obligation  to the  Issuing  Bank or any  Lender to  ascertain  or to
inquire as to the observance or  performance of any of the agreements  contained
in, or conditions of, the Loan Documents, or to inspect the properties, books or
records of any Loan Party. The Issuing Bank and the Lenders acknowledge that the
Agent  shall not be under any duty to take any  discretionary  action  permitted
hereunder  unless  the  Agent  shall be  requested  in  writing  to do so by the
Required  Lenders.  The Agent shall not be under any liability or responsibility
whatsoever,  as Agent, to any Loan Party or any other Person as a consequence of
any failure or delay in performance,  or any breach,  by the Issuing Bank or any
Lender of any of its obligations under any of the Loan Documents.

     10.4. Reliance by Agent

     The  Agent  shall be  entitled  to rely,  and shall be fully  protected  in
relying, upon any writing, resolution, notice, consent, certificate,  affidavit,
opinion,  letter,  cablegram,  telegram,  facsimile,  telex or teletype message,
statement,  order or other document or conversation believed by it to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons and upon advice and statements of legal counsel (including,




                                      -70-
<PAGE>




without  limitation,  counsel to any Loan Party),  independent  accountants  and
other  experts  selected by the Agent.  The Agent may treat the Issuing  Bank or
each  Lender,  as the case may be, or the Person  designated  in the last notice
filed with it under this  Section,  as the holder of all of the interests of the
Issuing Bank or such Lender,  as the case may be, in its Loans,  its Notes,  the
Letters of Credit and the Reimbursement Agreements, as applicable, until written
notice of  transfer,  signed by the  Issuing  Bank or such Lender (or the Person
designated in the last notice filed with the Agent) and by the Person designated
in such written notice of transfer,  in form and substance  satisfactory  to the
Agent,  shall have been filed with the Agent.  The Agent  shall not be under any
duty to  examine or pass upon the  validity,  effectiveness,  enforceability  or
genuineness of the Loan Documents or any instrument,  document or  communication
furnished  pursuant thereto or in connection  therewith,  and the Agent shall be
entitled to assume that the same are valid,  effective  and  genuine,  have been
signed or sent by the proper  parties and are what they purport to be. The Agent
shall be fully  justified  in failing or refusing  to take any action  under the
Loan  Documents  unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate.  The Agent shall in all cases be fully
protected in acting,  or in refraining from acting,  under the Loan Documents in
accordance with a request or direction of the Required Lenders, and such request
or direction  and any action taken or failure to act pursuant  thereto  shall be
binding  upon the Issuing  Bank,  all the Lenders and all future  holders of the
Notes and the Reimbursement Obligations.

     10.5. Notice of Default

     The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default unless the Agent has received  written notice
thereof from the Issuing Bank, a Lender or the  Borrower.  In the event that the
Agent  receives such a notice,  the Agent shall  promptly give notice thereof to
the Issuing Bank, the Lenders and the Borrower. The Agent shall take such action
with  respect to such  Default or Event of Default as shall be  directed  by the
Required Lenders, provided,  however, that unless and until the Agent shall have
received  such  directions,  the Agent may (but shall not be obligated  to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem to be in the best interests of the Lenders.

     10.6. Non-Reliance on Agent and Other Lenders

     Each of the  Issuing  Bank  and each  Lender  expressly  acknowledges  that
neither  the Agent nor any of its  respective  officers,  directors,  employees,
agents,   attorneys-in-fact  or  affiliates  has  made  any  representations  or
warranties to it and that no act by the Agent hereinafter,  including any review
of  the  affairs  of  any  Loan  Party,   shall  be  deemed  to  constitute  any
representation or warranty by the Agent to any Lender.  Each of the Issuing Bank
and each Lender  represents to the Agent that it has,  independently and without
reliance  upon the Agent,  the  Issuing  Bank or any  Lender,  and based on such
documents and information as it has deemed appropriate,  made its own evaluation
of and investigation into




                                      -71-
<PAGE>




the  business,   operations,   Property,   financial  and  other  condition  and
creditworthiness  of the Borrower and its Subsidiaries and made its own decision
to enter into this  Agreement.  Each of the  Issuing  Bank and each  Lender also
represents that it will,  independently and without reliance upon the Agent, the
Issuing Bank or any Lender,  and based on such  documents and  information as it
shall deem  appropriate at the time,  continue to make its own credit  analysis,
evaluations  and  decisions  in  taking  or not  taking  action  under  any Loan
Document,  and to make such investigation as it deems necessary to inform itself
as to the business,  operations,  Property,  financial  and other  condition and
creditworthiness  of the  Borrower  and its  Subsidiaries.  Except for  notices,
reports and other  documents  expressly  required to be furnished to the Issuing
Bank  and/or the  Lenders by the Agent  hereunder,  the Agent shall not have any
duty or responsibility to provide the Issuing Bank or any Lender with any credit
or other information concerning the business,  operations,  Property,  financial
and  other  condition  or  creditworthiness  of  the  Borrower  or  any  of  its
Subsidiaries  which  may come  into the  possession  of the  Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

     10.7. Indemnification

     Each Lender agrees to indemnify and hold harmless the Agent in its capacity
as such (to the extent not  promptly  reimbursed  by the  Borrower  and  without
limiting the  obligation  of the  Borrower to do so), pro rata  according to the
aggregate  of the  outstanding  principal  balance  of the Loans and any  unpaid
Reimbursement  Obligations  (or at any time  when no Loans are  outstanding  and
there are no  unpaid  Reimbursement  Obligations,  according  to its  Commitment
Percentage),  from and against  any and all  liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever  including,  without limitation,  any amounts paid to the
Lenders  (through the Agent) by any Loan Party pursuant to the terms of the Loan
Documents,  that are  subsequently  rescinded or avoided,  or must  otherwise be
restored or returned) which may at any time (including,  without limitation,  at
any time  following  the  payment of the Notes) be imposed  on,  incurred  by or
asserted  against  the Agent in any way  relating  to or arising out of the Loan
Documents or any other  documents  contemplated by or referred to therein or the
transactions  contemplated thereby or any action taken or omitted to be taken by
the Agent under or in connection with any of the foregoing;  provided,  however,
that  no  Lender  shall  be  liable  for  the  payment  of any  portion  of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent resulting solely from the finally
adjudicated  gross  negligence  or  willful  misconduct  of the  Agent.  Without
limitation of the foregoing,  each Lender agrees to reimburse the Agent promptly
upon  demand for its pro rata share of any unpaid  fees owing to the Agent,  and
any costs and  expenses  (including,  without  limitation,  reasonable  fees and
expenses of counsel)  payable by the Borrower  under Section 11.5, to the extent
that the Agent has not been  paid  such fees or has not be  reimbursed  for such
costs and expenses, by the Borrower.  The failure of any Lender to reimburse the
Agent  promptly upon demand for its pro rata share of any amount  required to be
by the Lenders to the Agent as provided in this Section shall not




                                      -72-
<PAGE>




relieve any other Lender of its obligation  hereunder to reimburse the Agent for
its pro rata share of such amount,  but no Lender shall be  responsible  for the
failure of other Lender to reimburse the Agent for such other  Lender's pro rata
share  of  such  amount.  The  agreements  in this  Section  shall  survive  the
termination  of the  Commitments  of all of the  Lenders,  the  Letter of Credit
Commitment, and the payment of all amounts payable under the Loan Documents.

     10.8. Agent in Its Individual Capacity

     BNY and its respective  affiliates may make loans to, accept deposits from,
issue letters of credit for the account of, and generally  engage in any kind of
business  with, the Borrower and its  Subsidiaries  as though BNY were not Agent
hereunder.  With respect to the Commitment  made or renewed by BNY and the Notes
issued  to BNY,  BNY  shall  have the same  rights  and  powers  under  the Loan
Documents  as any  Lender  and may  exercise  the same as though it were not the
Issuing Bank or the Agent,  and the terms  "Lender" and "Lenders"  shall in each
case include BNY.

     10.9. Successor Agent

     If at any time the Agent deems it advisable, in its sole discretion, it may
submit to the  Issuing  Bank and each of the  Lenders  a  written  notice of its
resignation as Agent under the Loan Documents,  such resignation to be effective
upon the earlier of (i) the written  acceptance of the duties of the Agent under
the Loan Documents by a successor  Agent and (ii) on the 30th day after the date
of such notice.  Upon any such resignation,  the Required Lenders shall have the
right to appoint from among the Lenders a successor Agent. If no successor Agent
shall  have  been  so  appointed  by the  Required  Lenders  and  accepted  such
appointment  in writing  within 30 days  after the  retiring  Agent's  giving of
notice of  resignation,  then the  retiring  Agent may, on behalf of the Issuing
Bank and the Lenders,  appoint a successor Agent, which successor Agent shall be
a commercial  bank  organized  under the laws of the United States of America or
any State thereof and having a combined capital,  surplus, and undivided profits
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
retiring Agent, and the retiring Agent's rights,  powers,  privileges and duties
as Agent under the Loan  Documents  shall be terminated.  The Loan Parties,  the
Issuing Bank and the Lenders shall execute such  documents as shall be necessary
to effect such appointment. After any retiring Agent's resignation as Agent, the
provisions  of the Loan  Documents  shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under the Loan  Documents.
If at any time  there  shall  not be a duly  appointed  and  acting  Agent,  the
Borrower  agrees to make each payment due under the Loan  Documents  directly to
the Issuing Bank and the Lenders entitled thereto during such time.

     10.10. Co-Agent




                                      -73-
<PAGE>





     The Co-Agent shall have no duties or obligations under the Loan Documents.


11. OTHER PROVISIONS

     11.1. Amendments and Waivers

     With the  written  consent  of the  Required  Lenders,  the  Agent  and the
appropriate Loan Parties may, from time to time, enter into written  amendments,
supplements or  modifications of the Loan Documents and, with the consent of the
Required  Lenders,  the Agent on behalf of the Issuing  Bank and the Lenders may
execute  and  deliver  to any such  parties a written  instrument  waiving  or a
consent  to a  departure  from,  on such terms and  conditions  as the Agent may
specify in such instrument, any of the requirements of the Loan Documents or any
Default or Event of Default and its consequences; provided, however, that:

     (a) no such amendment, supplement,  modification,  waiver or consent shall,
without the consent of all of the Lenders, (i) increase the Commitment Amount of
any Lender or the  Aggregate  Commitment  Amount,  (ii) extend the Maturity Date
(other than an extension  pursuant to Section 2.12), (iii) decrease the rate, or
extend the time of  payment,  of interest  of, or change,  forgive or extend the
time of payment of, the principal  amount of, or change the pro rata  allocation
of  payments  under,  any Note,  (iv)  release all or  substantially  all of the
collateral or any guarantor  (except in connection  with the Disposition of such
guarantor  in which case such  guarantor  may be  released  from the  Subsidiary
Guaranty and any promissory notes evidencing  Intercompany  Indebtedness of such
guarantor  may be released by the Agent upon the request of the  Borrower),  (v)
change the provisions of Sections 3.6, 3.10,  9.1(a),  11.1 or 11.7(a),  or (vi)
change the definition of "Required Lenders"; and

     (b) without the written  consent of the Issuing  Bank,  no such  amendment,
supplement, modification or waiver shall change the Letter of Credit Commitment,
change the amount or the time of payment of the Letter of Credit  Commissions or
change  any  other  term or  provision  which  relates  to the  Letter of Credit
Commitment  or the  Letters of Credit or any other  rights of the  Issuing  Bank
under any Loan Document; and

     (c)  without the written  consent of BNY,  no such  amendment,  supplement,
modification or waiver shall amend,  modify or waive any provision of Section 10
or otherwise  change any of the rights or obligations of the Agent  hereunder or
under the Loan Documents.

     Any such amendment, supplement,  modification or waiver shall apply equally
to the  Issuing  Bank and each of the  Lenders  and  shall be  binding  upon the
parties to




                                      -74-
<PAGE>




the applicable Loan Document,  the Lenders,  the Issuing Bank, the Agent and all
future holders of the Notes and the  Reimbursement  Obligations.  In the case of
any waiver,  the parties to the applicable Loan Document,  the Issuing Bank, the
Lenders  and the Agent shall be restored  to their  former  position  and rights
hereunder and under the outstanding Notes and other Loan Documents to the extent
provided  for in such waiver,  and any Default or Event of Default  waived shall
not extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon. The Loan Documents may not be amended orally or by any
course of conduct.

     11.2. Notices

     All notices,  requests and demands to or upon the respective parties to the
Loan  Documents  to be  effective  shall be in  writing  and,  unless  otherwise
expressly provided therein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail,  first-class  postage prepaid,
or, in the case of notice by facsimile,  when sent,  addressed as follows in the
case of the  Borrower,  the Issuing Bank or the Agent,  at the Domestic  Lending
Office,  in the case of each Lender,  or to such other addresses as to which the
Agent may be hereafter  notified by the respective parties thereto or any future
holders of the Notes and the Reimbursement Obligations:

                  The Borrower:

                  Air Express International Corporation
                  120 Tokeneke Road
                  Darien, Connecticut 06820
                  Attention:    Paul J. Gallagher,
                                Vice President and
                                  Treasurer
                  Telephone:    (203) 655-5776
                  Facsimile:    (203) 655-5734

                  The Agent or the Issuing Bank:

                  The Bank of New York
                  One Wall Street
                  Agency Function Administration
                  18th Floor
                  New York, New York 10286
                  Attention:    Ramona Washington
                  Telephone:    (212) 635-4699
                  Facsimile:    (212) 635-6365 or 6366 or 6367

                  with a copy to:




                                      -75-
<PAGE>





                  Janet L. Wolff,
                  Vice President
                  BNY Business Center, Inc.
                  301 Tresser Boulevard
                  8 Stamford Forum
                  Stamford, Connecticut 06901
                  Telephone:    (203) 967-8000
                  Facsimile:    (203) 967-8006

except that any notice,  request or demand by the Borrower to or upon the Agent,
the Issuing Bank or the Lenders  pursuant to Sections  2.3, 2.4 or 3.3 shall not
be effective until received. Any party to a Loan Document may rely on signatures
of the parties  thereto which are  transmitted by facsimile or other  electronic
means as fully as if originally signed.

     11.3. No Waiver; Cumulative Remedies

     No  failure  to  exercise  and no delay in  exercising,  on the part of the
Agent,  the Issuing Bank or any Lender,  any right,  remedy,  power or privilege
under any Loan Document shall operate as a waiver thereof;  nor shall any single
or partial  exercise of any right,  remedy,  power or  privilege  under any Loan
Document  preclude any other or further  exercise thereof or the exercise of any
other  right,  remedy,  power or  privilege.  The rights,  remedies,  powers and
privileges  under the Loan  Documents  are  cumulative  and not exclusive of any
rights, remedies, powers and privileges provided by law.

     11.4. Survival of Representations and Warranties and Certain Obligations

     (a) All representations and warranties made under the Loan Documents and in
any  document,  certificate  or  statement  delivered  pursuant  thereto  or  in
connection  therewith  shall  survive  the  execution  and  delivery of the Loan
Documents.

     (b) The obligations of the Borrower under Sections 3.5, 3.6, 3.7, 3.8, 3.9,
3.10,  3.11,  11.5 and 11.8 shall survive the  termination of the Commitments of
all of the Lenders,  the Letter of Credit Commitment,  the payment of the Loans,
the Reimbursement  Obligations in respect of the Letters of Credit and all other
amounts payable under the Loan Documents.

     11.5. Payment of Expenses and Taxes

     The Borrower agrees,  promptly upon  presentation of a statement or invoice
therefor,  and whether any Loan is made or any Letter of Credit is issued (i) to
pay or  reimburse  the  Agent  for  all its  out-of-pocket  costs  and  expenses
reasonably  incurred  in  connection  with  the  development,   preparation  and
execution of, the Loan Documents and any




                                      -76-
<PAGE>




amendment,  supplement or modification  thereto  (whether or not executed),  any
documents  prepared  in  connection   therewith  and  the  consummation  of  the
transactions contemplated thereby, including, without limitation, the reasonable
fees and  disbursements of Special Counsel,  (ii) to pay or reimburse the Agent,
the Issuing Bank and the Lenders for all of their respective costs and expenses,
including,  without  limitation,  reasonable fees and  disbursements of counsel,
incurred  in  connection  with  (A) any  Default  or Event  of  Default  and any
enforcement or collection  proceedings resulting therefrom or in connection with
the negotiation of any restructuring or "work-out" (whether  consummated or not)
of the obligations of any Loan Party under any of the Loan Documents and (B) the
enforcement of this Section, (iii) to pay, indemnify,  and hold each Lender, the
Issuing Bank and the Agent harmless from and against,  any and all recording and
filing fees and any and all  liabilities  with respect to, or resulting from any
delay in paying,  stamp,  excise and other similar  taxes,  if any, which may be
payable or  determined  to be  payable  in  connection  with the  execution  and
delivery of, or consummation of any of the transactions  contemplated by, or any
amendment,  supplement or modification  of, or any waiver or consent under or in
respect of, the Loan  Documents and any such other  documents,  and (iv) to pay,
indemnify and hold each Lender, the Issuing Bank and the Agent and each of their
respective  officers,  directors and employees harmless from and against any and
all other liabilities, obligations, claims, losses, damages, penalties, actions,
judgments,  suits,  costs,  expenses  or  disbursements  of any  kind or  nature
whatsoever   (including,   without  limitation,   reasonable  counsel  fees  and
disbursements)  with  respect to the  enforcement  and  performance  of the Loan
Documents,  the use of the  proceeds  of the Loans and the Letters of Credit and
the enforcement and performance of the provisions of any subordination agreement
in favor of the Agent,  the  Issuing  Bank and the Lenders  (all the  foregoing,
collectively,  the "Indemnified Liabilities") and, if and to the extent that the
foregoing  indemnity may be unenforceable for any reason, the Borrower agrees to
make the maximum  payment  permitted or not  prohibited  under  applicable  law;
provided,  however,  that the Borrower shall have no obligation hereunder to pay
Indemnified  Liabilities  to the Agent,  the Issuing Bank or any Lender  arising
from the finally  adjudicated  gross  negligence  or willful  misconduct  of the
Agent,  the Issuing Bank or such Lender or claims between one indemnified  party
and another  indemnified party. The agreements in this Section shall survive the
termination  of the  Commitments  of all of the  Lenders,  the  Letter of Credit
Commitment and the payment of all amounts payable under the Loan Documents.

     11.6. Lending Offices

     Each of the Issuing  Bank and each Lender  shall have the right at any time
and from time to time to transfer any Loan or the Reimbursement Obligations to a
different  office,  provided that the Issuing Bank or such Lender shall promptly
notify the Agent and the Borrower of any such change of office.

     11.7. Assignments and Participations





                                      -77-
<PAGE>




     (a) The Loan  Documents  shall be binding  upon and inure to the benefit of
the Borrower,  the Lenders,  the Issuing Bank, the Agent,  all future holders of
the Notes and the Reimbursement Obligations, and their respective successors and
assigns,  except that no Loan Party may assign,  delegate or transfer any of its
rights or obligations under the Loan Documents without the prior written consent
of the Agent, the Issuing Bank and each Lender.

     (b) Each of the Issuing  Bank and each  Lender  shall have the right at any
time, upon written notice to the Agent of its intent to do so, to sell,  assign,
transfer or negotiate  all or any part of its rights and  obligations  under the
Loan  Documents  to one or more of its  affiliates,  to one or more of the other
Lenders (or to  affiliates  of such other  Lenders)  or, with the prior  written
consent of the Borrower, the Agent and the Issuing Bank (which consent shall not
be unreasonably withheld and, in the case of the Borrower, shall not be required
upon the occurrence and during the continuance of an Event of Default), to sell,
assign,  transfer  or  negotiate  all or any part of its rights and  obligations
under the Loan Documents to any other Eligible Assignee,  provided that (i) each
such sale, assignment,  transfer or negotiation (other than sales,  assignments,
transfers or  negotiations  (x) to its  affiliates  or (y) its entire  interest)
shall be in a minimum  amount of $5,000,000  and (ii) there shall be paid to the
Agent by it a fee (the "Assignment  Fee") of $3,000.  For each  assignment,  the
parties  to such  assignment  shall  execute  and  deliver  to the Agent for its
acceptance  and  recording an Assignment  and  Acceptance  Agreement.  Upon such
execution,  delivery,  acceptance and recording by the Agent, from and after the
effective  date  specified in such  Assignment  and  Acceptance  Agreement,  the
assignee  thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance Agreement, the assignor Lender or the Issuing Bank, as
the case may be,  thereunder  shall be released from its  obligations  under the
Loan Documents. The Borrower agrees upon written request of the Agent and at the
Borrower's expense to execute and deliver (1) to such assignee, Notes, dated the
effective  date of such  Assignment and  Acceptance  Agreement,  in an aggregate
principal  amount equal to the Loans  assigned to, and  Commitments  assumed by,
such  assignee and (2) to such  assignor  Lender if it did not assign its entire
interest,  a Revolving  Credit Note, dated the effective date of such Assignment
and Acceptance Agreement,  in an aggregate principal amount equal to the balance
of such assignor  Lender's  Commitment  Amount, if any, and each assignor Lender
shall cancel and return to the Borrower its existing  Note.  Upon any such sale,
assignment or other transfer, the Commitments and the Commitment Percentages set
forth in Exhibit A shall be adjusted  accordingly by the Agent and a new Exhibit
A shall be distributed by the Agent.

     (c) Each of the Issuing  Bank and each Lender may grant  participations  in
all or any part of its  rights  under  the  Loan  Documents  to one or  Eligible
Assignees,  provided that (i) its  obligations  under the Loan  Documents  shall
remain unchanged,  (ii) it shall remain solely  responsible to the other parties
to the  Loan  Documents  for the  performance  of such  obligations,  (iii)  the
Borrower,  the Issuing Bank,  the Agent and the Lenders,  as  applicable,  shall
continue to deal solely and directly with it in  connection  with its rights and
obligations




                                      -78-
<PAGE>




under the Loan Documents,  (iv) no sub-participations shall be permitted and (v)
the  voting  rights  of any  holder of any  participation  shall be  limited  to
decisions that only do any of the following:  (A) subject the participant to any
additional obligation,  (B) reduce the principal of, or interest on the Notes or
any fees or other amounts payable hereunder, (C) postpone any date fixed for the
payment of principal  of, or interest on the Notes or any fees or other  amounts
payable hereunder, or (D) release any security interest or collateral, except to
the extent that such release is specifically  provided for in any Loan Document.
The  Borrower  acknowledges  and  agrees  that any such  participant  shall  for
purposes of Sections  3.5,  3.6, 3.7, 3.8, 3.9, 3.10 and 3.11, be deemed to be a
"Lender";  provided,  however, the Borrower shall not, at any time, be obligated
to pay any  participant  in any  interest  of the  Issuing  Bank  or any  Lender
hereunder  any sum in  excess  of the sum which  the  Borrower  would  have been
obligated  to pay to the  Issuing  Bank or such  Lender,  as the case may be, in
respect of such  interest had the Issuing  Bank or such Lender,  as the case may
be, not sold such participation.

     (d) If any (i)  assignment is made pursuant to subsection (b) above or (ii)
any participation is granted pursuant to subsection (c) above,  shall be made to
any Person that is not a United  States  Person,  such Person shall furnish such
certificates,  documents or other  evidence to the Borrower and the Agent in the
case of clause (i), and to the Borrower and the Issuing Bank or the Lender which
sold such  participation,  as the case may be, in the case of  clause  (ii),  as
shall be required by Section 3.10(c).

     (e) Neither the Issuing Bank nor any Lender shall, as between and among the
Borrower,  the Issuing Bank,  the Agent and such Lender,  as the case may be, be
relieved of any of its  obligations  under the Loan Documents as a result of any
sale, assignment,  transfer or negotiation of, or granting of participations in,
all or any part of its Loans,  its Notes,  its Commitment,  the Letter of Credit
Commitment, or the Reimbursement Agreements, as applicable, except that it shall
be  relieved  of its  obligations  to the extent of any such  sale,  assignment,
transfer,  or negotiation of all or any part of its Loans,  its Commitment,  its
Notes, the Letter of Credit  Commitment,  or the  Reimbursement  Agreements,  as
applicable, pursuant to subsection (b) above.

     (f) Notwithstanding anything to the contrary contained in this Section, the
Issuing  Bank or any Lender  may at any time or from time to time  assign all or
any portion of its rights under the Loan  Documents to a Federal  Reserve  Bank,
provided  that any such  assignment  shall not release  such  assignor  from its
obligations thereunder.

     11.8. Indemnity

     The Borrower agrees to defend,  protect,  indemnify,  and hold harmless the
Agent, the Co-Agent,  the Issuing Bank and each and all of the Lenders,  each of
their  respective  Affiliates  and each of the respective  officers,  directors,
employees and agents of each of the foregoing (each an "Indemnified Person" and,
collectively,   the  "Indemnified   Persons")  from  and  against  any  and  all
liabilities, obligations, losses, damages, penalties, ac-




                                      -79-
<PAGE>




tions,  judgments,  suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever (including,  without limitation, the fees and disbursements
of counsel for such  Indemnified  Persons in connection with any  investigative,
administrative or judicial proceeding, whether direct, indirect or consequential
and whether based on any federal or state laws or other  statutory  regulations,
including,  without limitation,  securities and commercial laws and regulations,
under common law or at equitable  cause, or on contract or otherwise,  including
any  liabilities and costs under  Environmental  Laws,  Federal,  state or local
health or safety laws, regulations, or common law principles, arising from or in
connection with the past, present or future operations of the Borrower or any of
its  Subsidiaries,  or their respective  predecessors in interest,  or the past,
present or future environmental condition of the Property of the Borrower or any
of its Subsidiaries,  the presence of asbestos-containing  materials at any such
Property,  or the release or threatened release of any Hazardous  Substance into
the environment from any such Property) in any manner relating to or arising out
of the  Loan  Documents,  any  commitment  letter  or fee  letter  executed  and
delivered  by the Borrower or any of its  Subsidiaries,  the Issuing Bank and/or
the Agent, the  capitalization of the Borrower or any of its  Subsidiaries,  the
Commitments,  the  Letter of Credit  Commitment,  the making  of,  issuance  of,
management of and  participation  in the Loans or the Letters of Credit,  or the
use or  intended  use of the  Letters  of Credit and the  proceeds  of the Loans
hereunder,  provided  that the  Borrower  shall  have no  obligation  under this
Section to an  Indemnified  Person with  respect to any of the  foregoing to the
extent found in a final judgment of a court having jurisdiction to have resulted
primarily out of the gross  negligence or wilful  misconduct of such Indemnified
Person or arising  solely from claims  between one such  Indemnified  Person and
another such  Indemnified  Person.  The  indemnity  set forth herein shall be in
addition  to any  other  obligations  or  liabilities  of the  Borrower  to each
Indemnified  Person under the Loan Documents or at common law or otherwise,  and
shall  survive any  termination  of the Loan  Documents,  the  expiration of the
Commitments  of all of the  Lenders,  the  Letter of Credit  Commitment  and the
payment of all Indebtedness of the Loan Parties under the Loan Documents.

     11.9. Limitation of Liability

     No claim may be made by the Borrower or any of its Subsidiaries, any Lender
or other Person against the Agent,  the Co-Agent,  the Issuing Bank, any Lender,
or any directors, officers, employees, or agents of any of them for any special,
indirect,  consequential  or punitive damages in respect of any claim for breach
of contract or any other  theory of  liability  arising out of or related to the
transactions  contemplated by any Loan Document,  or any act,  omission or event
occurring  in   connection   therewith,   and  each  of  the  Borrower  and  its
Subsidiaries,  and each of the Co-Agent, the Issuing Bank and each Lender hereby
waives,  releases  and  agrees  not to sue upon any claim for any such  damages,
whether or not  accrued and  whether or not known or  suspected  to exist in its
favor.

     11.10. Counterparts




                                      -80-
<PAGE>





     Each Loan Document (other than the Notes) may be executed by one or more of
the  parties  thereto on any  number of  separate  counterparts  and all of said
counterparts  taken  together  shall be  deemed to  constitute  one and the same
document.  It shall not be  necessary  in making  proof of any Loan  Document to
produce  or  account  for more  than one  counterpart  signed by the party to be
charged. A counterpart of any Loan Document or to any document  evidencing,  and
of any an amendment,  modification, consent or waiver to or of any Loan Document
transmitted  by  facsimile  shall  be  deemed  to  be  an  originally   executed
counterpart. A set of the copies of the Loan Documents signed by all the parties
thereto shall be deposited  with each of the Borrower,  the Issuing Bank and the
Agent.  Any party to a Loan  Document may rely upon the  signatures of any other
party thereto which are  transmitted by facsimile or other  electronic  means to
the same extent as if originally signed.

     11.11. Adjustments; Set-off

     (a) If any Lender (a  "Benefited  Lender")  shall at any time  receive  any
payment  of  all or any  part  of its  Loans,  its  Notes  or the  Reimbursement
Obligations,  or receive any collateral in respect thereof (whether  voluntarily
or  involuntarily,  by set-off,  pursuant to events or proceedings of the nature
referred to in Section 9.1 (h) or (i), or  otherwise),  in a greater  proportion
than any such payment to and collateral  received by any other Lender in respect
of such other  Lender's  Loans,  Notes or the  Reimbursement  Obligations,  such
Benefited  Lender shall  purchase  for cash from each of the other  Lenders such
portion of each such other Lender's  Loans and Notes,  and shall provide each of
such other  Lenders  with the benefits of any such  collateral,  or the proceeds
thereof,  as shall be  necessary  to cause  such  Benefited  Lender to share the
excess payment or benefits of such  collateral or proceeds  ratably with each of
the  Lenders,  provided,  however,  that if all or any  portion  of such  excess
payment or benefits is thereafter  recovered  from such Benefited  Lender,  such
purchase shall be rescinded,  and the purchase price and benefits  returned,  to
the extent of such recovery, but without interest. The Borrower agrees that each
Lender so  purchasing  a portion  of  another  Lender's  Loans and the Notes may
exercise  all  rights  of  payment  (including,  without  limitation,  rights of
set-off,  to the extent not  prohibited  by law) with respect to such portion as
fully as if such Lender were the direct holder of such portion.

     (b) In  addition to any rights and  remedies  of the  Issuing  Bank and the
Lenders  provided  by law,  upon the  occurrence  of an Event of Default and the
acceleration of the obligations owing in connection with the Loan Documents,  or
at any time  upon the  occurrence  and  during  the  continuance  of an Event of
Default,  under Section  9.1(a) or (b), each of the Issuing Bank and each Lender
shall have the right,  without  prior  notice to the  Borrower or any other Loan
Party,  any such notice  being  expressly  waived by the Borrower and each other
Loan Party to the extent not prohibited by applicable  law, to set-off and apply
against any indebtedness,  whether matured or unmatured, of the Borrower or such
other Loan Party, as the case may be, to the Issuing Bank or such Lender, as the
case may be, any amount owing from the Issuing Bank or such Lender,  as the case
may be, to the Borrower or




                                      -81-
<PAGE>




such  other  Loan  Party,  as the case may be,  at,  or at any time  after,  the
happening of any of the above-mentioned  events. To the extent not prohibited by
applicable  law, the aforesaid  right of set-off may be exercised by the Issuing
Bank or such Lender, as the case may be, against the Borrower or such other Loan
Party,  as the case may be, or against  any  trustee in  bankruptcy,  custodian,
debtor in  possession,  assignee  for the  benefit of  creditors,  receiver,  or
execution,  judgment or  attachment  creditor of the Borrower or such other Loan
Party,  as the case may be, or against  anyone else claiming  through or against
the  Borrower or such other Loan Party,  as the case may be, or such  trustee in
bankruptcy,  custodian,  debtor  in  possession,  assignee  for the  benefit  of
creditors,   receiver,   or   execution,   judgment  or   attachment   creditor,
notwithstanding  the  fact  that  such  right of  set-off  shall  not have  been
exercised by the Issuing  Bank or such Lender,  as the case may be, prior to the
making,  filing or issuance, or service upon the Issuing Bank or such Lender, as
the case may be,  of, or of notice  of, any such  petition,  assignment  for the
benefit of  creditors,  appointment  or  application  for the  appointment  of a
receiver,  or issuance of  execution,  subpoena,  order or warrant.  Each of the
Issuing  Bank and each Lender  agrees  promptly to notify the  Borrower  and the
Agent after any such set-off and application made by such Lender,  provided that
the failure to give such notice  shall not affect the  validity of such  set-off
and application.

     11.12. Construction

     Each Loan  Party  represents  that it has been  represented  by  counsel in
connection with the Loan Documents and the transactions contemplated thereby and
that the  principle  that  agreements  are to be  construed  against  the  party
drafting the same shall be inapplicable.

     11.13. Governing Law

     The Loan Documents and the rights and obligations of the parties thereunder
shall be governed by, and construed and  interpreted  in  accordance  with,  the
internal laws of the State of New York, without regard to principles of conflict
of laws.

     11.14. Headings Descriptive

     Section  headings have been inserted in the Loan Documents for  convenience
only and shall not be construed to be a part thereof.

     11.15. Severability

     Every  provision of the Loan Documents is intended to be severable,  and if
any term or provision thereof shall be invalid, illegal or unenforceable for any
reason, the validity,  legality and  enforceability of the remaining  provisions
thereof  shall  not  be  affected  or  impaired  thereby,  and  any  invalidity,
illegality or unenforceability in any jurisdiction shall




                                      -82-
<PAGE>




not  affect  the  validity,  legality  or  enforceability  of any  such  term or
provision in any other jurisdiction.

     11.16. Integration

     All  exhibits  to a Loan  Document  shall be deemed  to be a part  thereof.
Except for agreements between the Agent and/or the Issuing Bank and the Borrower
with respect to certain fees, the Loan Documents embody the entire agreement and
understanding  among the Borrower,  the Agent,  the Issuing Bank and the Lenders
with respect to the subject  matter  thereof and supersede all prior  agreements
and  understandings  among the  Borrower,  the Agent,  the Issuing  Bank and the
Lenders with respect to the subject matter thereof.

     11.17. Consent to Jurisdiction

     Each Loan Party hereby  irrevocably  submits to the jurisdiction of any New
York  State or  Federal  court  sitting  in the City of New York  over any suit,
action or proceeding arising out of or relating to the Loan Documents. Each Loan
Party  hereby  irrevocably  waives,  to  the  fullest  extent  permitted  or not
prohibited  by law,  any  objection  which it may now or  hereafter  have to the
laying of the venue of any such  suit,  action or  proceeding  brought in such a
court and any claim that any such suit,  action or proceeding  brought in such a
court has been brought in an inconvenient  forum.  Each Loan Party hereby agrees
that a final judgment in any such suit,  action or proceeding  brought in such a
court, after all appropriate appeals, shall be conclusive and binding upon it.

     11.18. Service of Process

     Each Loan Party  hereby  irrevocably  consents to the service of process in
any suit,  action or proceeding by sending the same by first class mail,  return
receipt requested or by overnight  courier service,  to the address of such Loan
Party set forth in Section 11.2 of the applicable Loan Document executed by such
Loan Party.  Each Loan Party  hereby  agrees that any such  service (i) shall be
deemed in every respect  effective  service of process upon it in any such suit,
action, or proceeding,  and (ii) shall to the fullest extent enforceable by law,
be taken and held to be valid personal service upon and personal delivery to it.

     11.19. No Limitation on Service or Suit

     Nothing  in the Loan  Documents  or any  modification,  waiver,  consent or
amendment  thereto shall affect the right of the Agent,  the Issuing Bank or any
Lender to serve process in any manner permitted by law or limit the right of the
Agent,  the  Issuing  Bank or any Lender to bring  proceedings  against any Loan
Party in the  courts of any  jurisdiction  or  jurisdictions  in which such Loan
Party may be served.

     11.20. WAIVER OF TRIAL BY JURY




                                      -83-
<PAGE>





     EACH OF THE AGENT,  THE ISSUING  BANK,  THE  LENDERS  AND THE LOAN  PARTIES
HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL  BY JURY IN  RESPECT  OF ANY  LITIGATION  ARISING  OUT OF,  UNDER  OR IN
CONNECTION  WITH THE LOAN DOCUMENTS OR THE  TRANSACTIONS  CONTEMPLATED  THEREIN.
FURTHER, EACH LOAN PARTY HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE
ISSUING BANK,  THE AGENT,  OR THE LENDERS,  OR COUNSEL TO THE ISSUING BANK,  THE
AGENT OR THE LENDERS, HAS REPRESENTED,  EXPRESSLY OR OTHERWISE, THAT THE ISSUING
BANK, THE AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION,  SEEK
TO  ENFORCE  THIS  WAIVER OF RIGHT TO JURY  TRIAL  PROVISION.  EACH  LOAN  PARTY
ACKNOWLEDGES  THAT THE ISSUING BANK, THE AGENT AND THE LENDERS HAVE BEEN INDUCED
TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.






                                      -84-
<PAGE>




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


                                                 AIR EXPRESS INTERNATIONAL
                                                 CORPORATION


                                                 By: /s/ DENNIS M. DOLAN
                                                     ________________________
                                                 Name: Dennis M. Dolan
                                                       ______________________
                                                 Title: Vice President and Chief
                                                        Financial Officer
                                                       ______________________


                                                 THE BANK OF NEW YORK,
                                                 Individually, as Issuing Bank
                                                 and as Agent


                                                 By: /s/DAVID M. DUFFY
                                                     ________________________
                                                 Name: David M. Duffy
                                                       ______________________
                                                 Title: Vice President
                                                       ______________________


                                                 THE FIRST NATIONAL BANK OF 
                                                 CHICAGO, Individually and as
                                                 Co-Agent


                                                 By: /s/TIMOTHY J. KING
                                                     ________________________
                                                 Name: Timothy J. King
                                                       ______________________
                                                 Title: Vice President
                                                       ______________________


                                                 THE FIRST NATIONAL BANK OF 
                                                 BOSTON


                                                 By: /s/ LISA J. GELFAND
                                                     ________________________
                                                 Name: Lisa J. Gelfand
                                                       ______________________
                                                 Title: Vice President
                                                       ______________________






                                      -85-
<PAGE>




                                                FIRST UNION BANK OF CONNECTICUT


                                                By: /s/ JAMES J. McKENNA
                                                    ________________________
                                                Name: James J. McKenna
                                                      ______________________
                                                Title: Executive Vice President
                                                      ______________________



                                      -86-
<PAGE>




                                 AMENDMENT NO. 1
                                       TO
                           REVOLVING CREDIT AGREEMENT


     AMENDMENT  NO. 1 (this  "Amendment"),  dated as of April 24,  1998,  to the
Revolving Credit Agreement,  dated as of June 28, 1996, by and among AIR EXPRESS
INTERNATIONAL CORPORATION (the "Borrower"), the Lenders party thereto, THE FIRST
NATIONAL BANK OF CHICAGO, as Co-Agent and THE BANK OF NEW YORK, as agent for the
Lenders (in such  capacity,  the  "Agent")  and as the Issuing Bank (as amended,
supplemented or otherwise modified, the "Credit Agreement").

                                    RECITALS

     A. Capitalized  terms used herein which are defined in the Credit Agreement
shall have the meanings therein defined.

     B. The Borrower has requested  that the Agent and the Lenders amend certain
covenants  contained  in the  Credit  Agreement,  and,  subject to the terms and
conditions  set forth herein,  the Agent and the Lenders are willing to agree to
the foregoing.

     In  consideration of the covenants,  conditions and agreements  hereinafter
set forth,  and for other  good and  valuable  consideration,  the  receipt  and
adequacy of which are acknowledged, it is agreed as follows:

     1.  Subsection  7.11(c) of the Credit  Agreement is amended and restated in
its entirety as follows:

               (c)  Consolidated  Net Worth. As of any date,
          maintain Consolidated Net Worth in an amount not




                                      -1-
<PAGE>




          less than the sum of (i) $250,000,000, (ii) 50% of
          the cumulative positive net income of the Borrower
          and its  Subsidiaries  on a Consolidated  basis in
          respect of each  completed  fiscal  quarter during
          the  period  commencing  on  January  1,  1998 and
          ending  on  such  date,   and  (iii)  50%  of  the
          difference, if any, between Consolidated Net Worth
          as of such date and  Consolidated  Net Worth as of
          December 31, 1997,  to the extent such  difference
          shall have resulted  from equity  issuances by the
          Borrower or any of its Subsidiaries.

     2.  Section  8.6 of the Credit  Agreement  is amended  and  restated in its
entirety as follows:

               8.6 Restricted Payments

               Declare or pay any  Restricted  Payments,  or
          permit any of its  Subsidiaries  so to do,  except
          that: (i) any wholly-owned  Subsidiary may declare
          and/or pay Restricted  Payments to its parent, and
          (ii)  provided that  immediately  before and after
          giving  effect  thereto,  no  Default  or Event of
          Default  shall or would  exist,  the  Borrower may
          make Restricted Payments.

     3.  Section  11.2 of the Credit  Agreement  is amended by deleting the name
"Janet L. Wolff" and the address and phone  numbers  therewith and replacing the
same with the following:

                  Geraldine J. Turkington,
                  Vice President
                  The Bank of New York
                  10 Mason Street, 3rd Floor




                                      -2-
<PAGE>




                  Greenwich, Connecticut  06830
                  Telephone: (203) 863-2697
                  Facsimile:  (203) 863-2610

     4. In order to induce the Agent and the Lenders to execute this  Amendment,
the Borrower,  and each  Guarantor (as defined in the  Subsidiary  Guaranty) (i)
certifies  that,  immediately  after  giving  effect  to  this  Amendment,   all
representations  and warranties  contained in the Credit  Agreement are true and
correct in all  respects  as of the date  hereof and that no Default or Event of
Default  exists  under the  Credit  Agreement,  (ii)  reaffirms  and  admits the
validity  and   enforceability   of  the  Loan  Documents  and  its  obligations
thereunder,  and (iii)  agrees and admits  that it has no valid  defenses  to or
offsets  against any of its  obligations to the Bank under the Loan Documents as
of the date hereof.

     5. By signing below, each Guarantor consents to this Amendment.

     6. In all other respects, the Credit Agreement and the other Loan Documents
shall remain in full force and effect.

     7. This  Amendment may be executed in any number of  counterparts,  each of
which shall be an original and all of which shall  constitute one agreement.  It
shall not be necessary  in making proof of this  Amendment to produce or account
for more  than one  counterpart  containing  the  signature  of the  party to be
charged.

     8. This Amendment is being  delivered in and is intended to be performed in
the State of New York and shall be construed  and is  enforceable  in accordance
with,  and shall be  governed  by,  the  internal  laws of the State of New York
without regard to principles of conflict of laws.

     9. This Amendment  shall be subject to such  conditions and  limitations as
are specified herein, and the rights of the Borrower, the Lenders, the



                                      -3-
<PAGE>




Issuing  Bank and the  Agent  under the  Credit  Agreement  and the  other  Loan
Documents shall be otherwise unaffected.





                                      -4-
<PAGE>




     IN WITNESS  WHEREOF,  the parties  have caused  this  Amendment  to be duly
executed as of the date first written above.


                               AIR EXPRESS INTERNATIONAL CORPORATION


                               By:      /s/PAUL J. GALLAGHER
                               Name:    Paul J. Gallagher
                               Title:   Vice President and Treasurer



                              THE BANK OF NEW YORK,
                              Individually, as Issuing Bank
                              and as Agent


                              By:       /s/ GERALDINE J. TURKINGTON
                              Name:     Geraldine J. Turkington
                              Title:    Vice President


                              THE FIRST NATIONAL BANK OF CHICAGO,
                              Individually and as Co-Agent


                              By:       /s/ AARON LANSKI




                                      -5-
<PAGE>




                              Name:     Aaron Lanski
                              Title:    Vice President


                              BANKBOSTON, N.A.


                              By:       /s/ RICHARD KLOUDA
                              Name:     Richard Klouda
                              Title:    Vice President


                              FIRST UNION NATIONAL BANK


                              By:       /s/ STEVEN DOROSH
                              Name:     Steven Dorosh
                              Title:    Vice President



CONSENTED AND AGREED TO:

AIR EXPRESS INTERNATIONAL USA, INC.
VOTAINER USA, INC.
RADIX VENTURES, INC.
LUSK SHIPPING COMPANY, INC.
RADIX GROUP INTERNATIONAL, INC.




                                      -6-
<PAGE>





As to each of the foregoing:


By:       /s/ PAUL J. GALLAGHER
Name:     Paul J. Gallagher
Title:    Vice President and Treasurer



                                     -7-