<PAGE>

                                                                CONFORMED COPY






        *************************************************************


                           JOURNAL REGISTER COMPANY

                                  ---------


                               CREDIT AGREEMENT


                          Dated as of July 15, 1998


                                  ---------


                          THE CHASE MANHATTAN BANK,
                                   as Agent


                                  ---------


                            CHASE SECURITIES INC.,
                                 as Arranger


         ************************************************************


<PAGE>

                                                                            PAGE

                              TABLE OF CONTENTS


            This Table of Contents is not part of the  Agreement  to which it is
attached but is inserted for convenience only.

                                                                            PAGE

RECITALS.....................................................................1

Section 1.  Definitions and Accounting Matters...............................2
      1.01  Certain Defined Terms............................................2
      1.02  Accounting Terms and Determinations; Fiscal Periods.............26
      1.03  Classes and Types of Loans......................................27

Section 2.  Commitments.....................................................27
      2.01  Loans...........................................................27
      2.02  Borrowings......................................................30
      2.03  Changes of Commitments..........................................30
      2.04  Commitment Fees.................................................31
      2.05  Lending Offices.................................................32
      2.06  Several Obligations; Remedies Independent.......................33
      2.07  Evidence of Debt................................................33
      2.08  Conversion or Continuation of Loans; Optional Prepayments.......33
      2.09  Mandatory Prepayments...........................................35
      2.10  Letters of Credit...............................................36
      2.11  Swingline Loans.................................................41

Section 3.  Payments of Principal and Interest..............................42
      3.01  Repayment of Loans..............................................42
      3.02  Interest........................................................45

Section 4.  Payments; Pro Rata Treatment; Computations; Etc.................46
      4.01  Payments........................................................46
      4.02  Pro Rata Treatment..............................................47
      4.03  Computations....................................................47
      4.04  Minimum Amounts.................................................47
      4.05  Certain Notices.................................................48
      4.06  Non-Receipt of Funds by the Agent...............................49
      4.07  Sharing of Payments, Etc........................................50

Section 5.  Yield Protection and Illegality.................................52
      5.01  Additional Costs................................................52
      5.02  Limitation on Types of Loans....................................53
      5.03  Illegality......................................................54
      5.04  Treatment of Affected Loans.....................................54
      5.05  Compensation....................................................55
      5.06  Additional Costs in Respect of Letters of Credit................56
      5.07  Taxes...........................................................56

Section 6.  Conditions Precedent............................................57
      6.01  Effectiveness...................................................57
      6.02  Initial and Subsequent Extensions of Credit.....................60

Section 7.  Representations and Warranties..................................61
      7.01  Corporate Existence.............................................61
      7.02  Financial Condition.............................................61
      7.03  Litigation......................................................62
      7.04  No Breach.......................................................62
      7.05  Corporate Action................................................63
      7.06  Approvals.......................................................63
      7.07  Margin Stock....................................................63
      7.08  ERISA...........................................................63
      7.09  Taxes...........................................................64
      7.10  Investment Company Act..........................................64
      7.11  Public Utility Holding Company Act..............................64
      7.12  Compliance with Laws............................................64
      7.13  Disclosure......................................................64
      7.14  Security Documents..............................................65
      7.15  Assets of the Borrower..........................................65
      7.16  Material Agreements.............................................65
      7.17  Solvency........................................................65
      7.18  Labor Matters...................................................66
      7.19  Hazardous Materials.............................................66
      7.20  Subsidiaries, Etc...............................................68
      7.21  Copyrights, Permits and Trademarks..............................68
      7.22  Capitalization..................................................69
      7.23  Year 2000.......................................................69

Section 8.  Covenants of the Borrower.......................................69
      8.01  Financial Statements; Continuing Disclosure.....................69
      8.02  Litigation......................................................73
      8.03  Corporate Existence, Etc........................................73
      8.04  Insurance.......................................................74
      8.05  Prohibition of Fundamental Changes..............................74
      8.06  Limitation on Liens.............................................79
      8.07  Indebtedness....................................................80
      8.08  Investments.....................................................82
      8.09  Restricted Payments.............................................82
      8.10  Capital Expenditures............................................83
      8.11  Leverage Ratios.................................................84
      8.12  Fixed Charges Ratio.............................................85
      8.13  Interest Coverage Ratio.........................................85
      8.14  Working Capital.................................................85
      8.15  Lines of Business...............................................85
      8.16  Transactions with Affiliates....................................86
      8.17  Sale and Leaseback..............................................86
      8.18  Amendment of Certain Documents..................................86
      8.19  Use of Proceeds.................................................86
      8.20  Sales of Accounts...............................................87
      8.21  Interest Rate Protection........................................87
      8.22  Environmental Matters...........................................87
      8.23  Certain Obligations Respecting Subsidiaries.....................88
      8.24  Inactive Subsidiaries...........................................89
      8.25  Payments of Indebtedness........................................89

Section 9.  Events of Default...............................................90

Section 10.  The Agent......................................................93
      10.01  Appointment, Powers and Immunities.............................93
      10.02  Reliance by Agent..............................................94
      10.03  Defaults.......................................................94
      10.04  Rights as a Lender.............................................94
      10.05  Indemnification................................................95
      10.06  Non-Reliance on Agent and Other Lenders........................95
      10.07  Failure to Act.................................................95
      10.08  Resignation or Removal of Agent................................96
      10.09  Consents under Other Credit Documents..........................96

Section 11.  Miscellaneous..................................................96
      11.01  Waiver.........................................................97
      11.02  Notices........................................................97
      11.03  Expenses, Etc..................................................97
      11.04  Amendments, Etc................................................98
      11.05  Successors and Assigns.........................................99
      11.06  Assignments and Participations.................................99
      11.07  Survival......................................................101
      11.08  Captions......................................................101
      11.09  Counterparts..................................................102
      11.10  Governing Law; Submission to Jurisdiction.....................102
      11.11  Waiver of Jury Trial..........................................102
      11.12  Confidentiality...............................................102



<PAGE>


Annex 1           -     Commitments and Loans
Annex 2           -     Permitted Dispositions


SCHEDULE I        -     Consents and Approvals
SCHEDULE II       -     Litigation
SCHEDULE III      -     Investments
SCHEDULE IV       -     Subsidiaries
SCHEDULE V        -     Liens
SCHEDULE VI       -     Indebtedness
SCHEDULE VII      -     Hazardous Materials
SCHEDULE VIII     -     Capitalization
SCHEDULE IX       -     Inactive Subsidiaries


EXHIBIT A         -     Form of Borrower Security Agreement
EXHIBIT B-1       -     Form of Subsidiary Guarantor Security Agreement
EXHIBIT B-2       -     Form of Subsidiary Guarantee
EXHIBIT C         -     Form of Compliance Certificate
EXHIBIT D         -     Form of Assignment and Acceptance
EXHIBIT E-1       -     Form of Tranche A Term Note
EXHIBIT E-2       -     Form of Tranche B Term Note
EXHIBIT E-3       -     Form of Revolving Credit Note
EXHIBIT E-4       -     Form of Incremental Note
EXHIBIT F         -     Form of Incremental Loan Activation Notice
EXHIBIT G         -     Description of Subordination Terms



<PAGE>

          CREDIT  AGREEMENT dated as of July 15, 1998 between:  JOURNAL REGISTER
COMPANY, a corporation duly organized and validly existing under the laws of the
State of  Delaware  (the  "BORROWER");  each of the banks  and  other  financial
institutions that is a signatory hereto or which, pursuant to Section 2.01(c) or
11.06(b) hereof,  shall become a "Lender"  hereunder  (individually,  a "LENDER"
and,   collectively,   the   "LENDERS");   and  THE  CHASE  MANHATTAN  BANK,  as
administrative  agent  for the  Lenders  (in such  capacity,  together  with its
successors in such capacity, the "AGENT").

          The Borrower is the borrower under a Credit  Agreement dated as of May
2, 1997 with  certain of the Lenders and the Agent (as  heretofore  modified and
supplemented  and in effect on the date of this Agreement,  the "EXISTING CREDIT
AGREEMENT").  The  parties to the  Existing  Credit  Agreement  wish to amend in
certain  respects and to restate in its entirety the Existing Credit  Agreement,
it being the  intention  of the  parties  that the loans  outstanding  under the
Existing Credit  Agreement on the Effective Date (other than such loans required
to be paid as of the Effective Date as  contemplated  hereby) shall continue and
remain  outstanding  and not be  repaid  on the  Effective  Date,  but  shall be
assigned and reallocated among the Lenders as provided in Section 2.01 hereof.

          The Borrower and its  subsidiaries  are engaged as an integrated group
in the  business of  publishing,  distributing  and selling  newspapers,  and in
related  businesses,   and  in  furnishing  the  required  supplies,   services,
equipment,  credit  and other  facilities  for such  integrated  operation.  The
integrated  operation requires financing on such a basis that credit supplied to
the  Borrower  be made  available  from  time to  time to its  subsidiaries,  as
required  for  the  continued  successful  operation  of the  Borrower  and  its
subsidiaries,  separately, and the integrated operation as a whole. In addition,
on  the  Effective  Date,  the  Borrower   intends  to  consummate  the  Goodson
Acquisition (as defined below).  In connection with the foregoing,  the Borrower
has  requested  that the  Lenders  extend  credit  to the  Borrower  (to be made
available by the Borrower to its subsidiaries) in an aggregate principal or face
amount  up to but not  exceeding  $900,000,000  to  refinance  certain  existing
indebtedness of the Borrower and its Subsidiaries  and to provide  financing for
the  Goodson   Acquisition,   general   corporate   purposes,   other  permitted
acquisitions and working capital for the ongoing  operations of the Borrower and
its subsidiaries.  The Lenders are willing to extend such credit to the Borrower
on the terms and conditions of this  Agreement.  In addition,  at the request of
the  Borrower,  the  Lenders  may (but  are not  obligated  to)  make  available
additional term loans under this Agreement in an aggregate  principal  amount up
to but not exceeding $500,000,000.

          Accordingly,  the parties hereto hereby agree that the Existing Credit
Agreement  shall, as of the Effective  Date, be amended in certain  respects and
restated in its entirety as follows:


          Section 1. DEFINITIONS AND ACCOUNTING MATTERS.

          1.01 CERTAIN DEFINED TERMS. As used herein,  the following terms shall
have the following  meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and VICE VERSA):

          "ACQUISITION"  shall  mean any  transaction,  or any series of related
transactions,  consummated  after  the  date of this  Agreement,  by  which  the
Borrower and/or any of its  Subsidiaries  (a) acquires any going business or all
or  substantially  all of the  assets  of any  corporation,  partnership,  joint
venture or other firm or any  division of any  corporation,  partnership,  joint
venture or other  firm or the right to use or manage or  otherwise  exploit  any
such business or assets,  whether through purchase or lease of assets, merger or
otherwise,  (b) directly or indirectly  acquires  control of at least a majority
(in number of votes) of the  securities  of a  corporation  which have  ordinary
voting  power for the  election  of  directors  or (c)  directly  or  indirectly
acquires  control of a majority  ownership  interest in any  partnership,  joint
venture or other firm. The terms  "ACQUIRE" and "ACQUIRED"  used as a verb shall
have a correlative meaning.

          "ADMINISTRATIVE    QUESTIONNAIRE"   shall   mean   an   Administrative
Questionnaire in a form supplied by the Agent.

          "AFFILIATE"  shall mean,  with respect to any  specified  Person,  any
other Person which directly or indirectly  controls,  or is under common control
with, or is controlled by, such specified Person and, if such other Person is an
individual,  any member of the immediate family (including  parents,  spouse and
children) of such individual and any trust whose  principal  beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled by any such member or trust.  As used in this  definition,  "CONTROL"
(including,  with its  correlative  meanings,  "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") shall mean possession, directly or indirectly, of power to direct
or cause the direction of management or policies  (whether through  ownership of
securities  or  partnership  or  other  ownership  interests,   by  contract  or
otherwise),  PROVIDED  that,  in any event,  any Person  which owns  directly or
indirectly 10% or more of the securities  having  ordinary  voting power for the
election of directors or other governing body of a corporation or 10% or more of
the partnership or other ownership  interests of any other Person (other than as
a  limited  partner  of such  other  Person)  will be  deemed  to  control  such
corporation or other Person.  Notwithstanding  the foregoing,  (a) no individual
shall be an  Affiliate  of the  Borrower  or any of its  Subsidiaries  solely by
reason of his or her being a director,  officer or  employee of the  Borrower or
any of its  Subsidiaries and (b) none of the Borrower or any of its Subsidiaries
shall be Affiliates of each other.

          "APPLICABLE  LENDING  OFFICE" shall mean, for each Lender and for each
Type of Loan,  the  "Lending  Office" of such Lender (or of an Affiliate of such
Lender)  designated  for such Type of Loan in the  Administrative  Questionnaire
submitted by such Lender or such other office of such Lender (or of an Affiliate
of such  Lender) as such  Lender may from time to time  specify to the Agent and
the  Borrower  as the  office by which its Loans of such Type are to be made and
maintained.

          "APPLICABLE  MARGIN" shall mean, for any day, with respect to any Base
Rate Loan or Eurodollar  Loan of a particular  Class,  the  applicable  rate per
annum set forth below under the  caption  "Base Rate Loans other than  Tranche B
Term Loans",  "Eurodollar  Loans other than  Tranche B Term  Loans",  "Base Rate
Loans that are  Tranche B Term  Loans" or  "Eurodollar  Loans that are Tranche B
Term Loans",  as applicable,  based upon the Total Leverage Ratio as of the most
recent determination date:

===============================================================================
                      Base Rate      Eurodollar     Base Rate     Eurodollar
                     Loans other    Loans other    Loans that     Loans that
                     than Tranche   than Tranche   are Tranche   are Tranche B
  Total Leverage    B Term Loans   B Term Loans   B Term Loans    Term Loans
      Ratio:             (%)            (%)            (%)            ($)
  --------------    -------------  -------------  ------------   -------------
-------------------------------------------------------------------------------
    CATEGORY 1

 Greater than 5.5        0.25           1.50          0.50           1.75
       to 1
-------------------------------------------------------------------------------
    CATEGORY 2

Less than or equal
  to 5.5 to 1 and
  greater than or         0             1.25          0.25           1.50
 equal to 5.0 to 1
-------------------------------------------------------------------------------
    CATEGORY 3

Less than 5.0 to 1
 and greater than
or equal to 4.5 to        0             1.00            0            1.25
         1
-------------------------------------------------------------------------------
    CATEGORY 4

Less than 4.5 to 1
 and greater than
or equal to 4.0 to        0             0.875           0            1.125
         1
-------------------------------------------------------------------------------
    CATEGORY 5

Less than 4.0 to 1
 and greater than
or equal to 3.5 to        0             0.75            0            1.00
         1
-------------------------------------------------------------------------------
    CATEGORY 6

Less than 3.5 to 1
 and greater than
or equal to 3.0 to        0             0.625           0            1.00
         1
===============================================================================
    CATEGORY 7

Less than 3.0 to 1        0             0.50            0            1.00
===============================================================================

For purposes of this definition, the Total Leverage Ratio (i) for any day during
the period commencing on the Effective Date and ending on the third Business Day
after the first date the Borrower delivers to the Agent  consolidated  financial
statements  of the Borrower for the fiscal  quarter  ending  September  30, 1998
pursuant to Section 8.01(a) hereof shall be deemed to be in Category 2 above and
(ii) for any day  thereafter  shall be  determined on the basis of the then most
recent consolidated  financial statements of the Borrower delivered to the Agent
pursuant  to Section  8.01(a) or 8.01(b)  hereof.  Any change in the  Applicable
Margins as a result of a change in the Total  Leverage  Ratio shall be effective
as of the  third  Business  Day  following  the date the  relevant  consolidated
financial  statements  of the Borrower  are so delivered to the Agent,  PROVIDED
that in the event  that the  Borrower  shall  fail to  deliver  to the Agent any
consolidated  financial  statements by the respective date required  pursuant to
said Section 8.01(a) or 8.01(b), the Applicable Margins shall be deemed to be in
Category  1 above for each day during  the  period  commencing  on the date said
financial  statements  were so required to be delivered  and ending on the third
Business Day following the date such financial  statements are in fact delivered
to the Agent; PROVIDED, FURTHER, that the Applicable Margins shall be subject to
adjustment  based  on  the  foregoing  table  prior  to  the  delivery  of  such
consolidated  financial  statements  effective  as of  the  third  Business  Day
following the date (the  "ADJUSTMENT  EFFECTIVE  DATE") on which the Agent shall
have received a certificate of a Senior Officer (in form and detail satisfactory
to the Agent)  setting forth the Total  Leverage Ratio for the period in respect
of which such consolidated financial statements are required to be delivered and
annexing  thereto  calculations of the Total Leverage Ratio,  except that in the
event that the Total Leverage Ratio determined on the basis of such consolidated
financial statements when delivered pursuant to Section 8.01(a) or 8.01(b) shall
be in a lower numbered  Category in the foregoing  table than the Total Leverage
Ratio set forth in such certificate,  the Applicable Margin shall  automatically
be  adjusted  retroactively  to the  Adjustment  Effective  Date  based upon the
foregoing table; PROVIDED, FURTHER, that the Applicable Margins shall be subject
to adjustment  based on the foregoing  table on and as of any Borrowing  Date or
the date of any prepayment  described in the following  clause (y) if (i) either
(x) a borrowing of Revolving  Credit Loans occurs on such  Borrowing Date or (y)
the  Revolving  Credit Loans are prepaid at any time,  in each case in excess of
$20,000,000 in aggregate  principal  amount  (unless,  in the case of clause (x)
only,  the proceeds of such  borrowing are to be, and are in fact,  used to make
repayments of Term Loans or Incremental  Loans, in which case no such adjustment
to the Applicable Margins shall be so required to be made on such Borrowing Date
or the date of such  prepayment)  and (ii) such borrowing or prepayment,  as the
case  may be,  results  in a  change  in the  Total  Leverage  Ratio  as of such
Borrowing  Date or the date of such  prepayment  that would in turn  result in a
change in the  Applicable  Margins as reflected in the  certificate  of a Senior
Officer (in form and detail  satisfactory  to the Agent) setting forth the Total
Leverage Ratio after giving effect to such borrowing or prepayment,  as the case
may be,  and  annexing  thereto  calculations  of the Total  Leverage  Ratio and
delivered to the Agent (x) in the case of such borrowing, as required by Section
6.02(b)  hereof  and (y) in the  case  of such  prepayment,  together  with  the
relevant   notice  of   prepayment   as   required  by  Section   4.05   hereof.
Notwithstanding  the  provisions  of  the  immediately  preceding  sentence,  no
reduction in the Applicable  Margins  provided for by this  definition  shall be
effective  earlier  than the date three  Business  Days after the date the Agent
receives a notice from the Borrower specifically requesting such reduction.

          "APPROVED  FUND" shall mean with  respect to any Lender that is a fund
that invests in  commercial  loans,  any other fund that  invests in  commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.

          "APPROVED   SUBORDINATED  DEBT"  shall  mean  Subordinated  Debt  that
satisfies the requirements of clause (v) of Section 8.07(e) hereof.

          "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 11.06),  and accepted by the Agent, in the form of Exhibit D
hereto or any other form approved by the Agent.

          "BANKRUPTCY CODE" shall mean the United States Federal Bankruptcy Code
of 1978, as amended from time to time.

          "BASE RATE" shall mean,  with  respect to any Base Rate Loan,  for any
day,  the higher of (a) the  Federal  Funds Rate for such day PLUS 1/2 of 1% and
(b) the Prime Rate for such day.  Each change in any interest  rate provided for
herein based upon the Base Rate  resulting  from a change in the Base Rate shall
take effect at the time of such change in the Base Rate.

          "BASE RATE LOANS" shall mean Loans which bear  interest at rates based
upon the Base Rate.

          "BORROWER   SECURITY   AGREEMENT"  shall  mean  a  Security  Agreement
substantially  in the form of  Exhibit A hereto  between  the  Borrower  and the
Agent, as the same shall be amended,  supplemented or otherwise  modified and in
effect from time to time.

          "BORROWING  DATE"  shall  mean  each  date on  which  Loans  are  made
hereunder.

          "BUSINESS  DAY" shall mean any day on which  commercial  banks are not
authorized  or  required to close in New York City and, if such day relates to a
borrowing  of, a payment or  prepayment  of  principal  of or interest  on, or a
Conversion  of or into,  or a  Continuation  of, or an  Interest  Period  for, a
Eurodollar  Loan or a notice by the Borrower with respect to any such borrowing,
payment, prepayment, Conversion,  Continuation or Interest Period, which is also
a day on which  dealings  in  Dollar  deposits  are  carried  out in the  London
interbank market.

          "CAPITAL  EXPENDITURES"  shall  mean,  for  any  period,  expenditures
(including,   without   limitation,   the  aggregate  amount  of  Capital  Lease
Obligations  incurred  during such  period)  made by the  Borrower or any of its
Subsidiaries  to  acquire  or  construct  fixed  assets,   plant  and  equipment
(including  renewals,  improvements  and  replacements,  but excluding  repairs)
during such period  computed in  accordance  with GAAP;  PROVIDED  that "Capital
Expenditures"  (a) shall not  include  (i)  capitalized  interest  to the extent
otherwise included in "Capital  Expenditures" as required by GAAP or (ii) at the
option of the Borrower  (which  option  shall be  irrevocable  and  exercised in
writing  by notice to the  Agent),  any such  expenditures  (including,  without
limitation,  Capital  Lease  Obligations  incurred)  up  to  but  not  exceeding
$5,000,000  in the  aggregate  in any  fiscal  year and up to but not  exceeding
$10,000,000  in the aggregate  and (b) shall include  expenses in respect of the
Borrower's  and its  Subsidiaries'  on-line  services of up to $1,000,000 in the
aggregate in any fiscal year to the extent that such  expenses are excluded from
the  definition  of "Cash  Flow" in this  Section  1.01 for such  fiscal year in
accordance with clause (c)(ii) of the proviso to such definition.

          "CAPITAL  LEASE   OBLIGATIONS"   shall  mean,  for  any  Person,   all
obligations  of such  Person to pay rent or other  amounts  under a lease of (or
other  agreement  conveying  the  right  to use)  Property  to the  extent  such
obligations  are required to be classified  and accounted for as a capital lease
on a balance sheet of such Person under GAAP  (including  Statement of Financial
Accounting  Standards No. 13 of the Financial  Accounting  Standards Board) and,
for  purposes of this  Agreement,  the amount of such  obligations  shall be the
capitalized  amount thereof,  determined in accordance with GAAP (including such
Statement No. 13).

          "CASH EQUIVALENTS" shall mean:

               (a) direct obligations of the United States of America, or of any
          agency thereof, or obligations guaranteed as to principal and interest
          by the United States of America,  or of any agency thereof,  in either
          case  maturing  not more  than 180 days  from the date of  acquisition
          thereof;

               (b) certificates of deposit or Eurodollar time deposits  maturing
          on  demand or within  180 days  from the date of  acquisition  thereof
          issued by any Lender or bank or trust company organized under the laws
          of the  United  States of  America  or any state  thereof  and  having
          capital, surplus and undivided profits of at least $500,000,000;

               (c)  commercial  paper  rated  A-1 or  better or P-1 or better by
          Standard & Poor's  Ratings  Services,  a division  of The  McGraw-Hill
          Companies,  Inc. or Moody's Investors Service, Inc., respectively,  or
          their respective successors,  maturing not more than 180 days from the
          date of acquisition thereof;

               (d) operating deposit accounts with banks (including banks with a
          smaller capital,  surplus and undivided profits than that specified in
          clause (b) above); and

               (e) reverse  repurchase  agreements  with a term not in excess of
          180 days with any Person relating to obligations referred to in clause
          (a)  above  provided  that  the  obligations  of the  counterparty  to
          repurchase the securities  originally purchased by the Borrower or any
          of its Subsidiaries are secured by readily  marketable  assets so long
          as the  documentation  governing such agreements  requires (subject to
          customary  minimum  collateral  transfer  requirements)  that the fair
          market value of such assets  (subject to  application of any customary
          valuation discount  percentages) equal or exceed, on at least one date
          during every calendar month,  the market  valuation of such repurchase
          obligations  on such date (giving  effect to any  enforceable  netting
          arrangements).

          "CASH FLOW" shall mean,  for any period,  the sum of the following for
the Borrower and its Subsidiaries for such period,  determined on a consolidated
basis without  duplication  in  accordance  with GAAP:  operating  income before
taxes,  Interest Expense,  amortization and depreciation and extraordinary gains
and losses and  excluding  all other  non-cash  subtractions  from net operating
income not otherwise  excluded and excluding all other non-cash items of income;
PROVIDED  that:  (a) if any portion of such period  occurs on or before June 30,
1997,  Cash Flow shall be  determined on a Pro Forma Basis for such period as if
the  acquisition of The Taunton Daily Gazette  occurred on the first day of such
period  utilizing  the actual  Cash Flow of The  Taunton  Daily  Gazette for the
relevant period as increased by (i) for April, 1997, $21,436, (ii) for May, 1997
$21,853 and (iii) for June, 1997, $20,555;  (b) except as provided in clause (a)
above, if the Borrower or any of its Subsidiaries  shall have made any Permitted
Acquisition or shall have Disposed of one or more Newspapers or other businesses
related to newspaper publishing (or any part of any thereof) to any Person other
than an Obligor  during  such  period,  Cash Flow for any portion of such period
occurring prior to the date 12 complete  calendar months after the  consummation
of such  Permitted  Acquisition  or  Disposition,  as the case may be,  shall be
increased or decreased, as the case may be, by such an amount as shall be agreed
between the  Borrower  and the  Majority  Lenders  (or, if the  Borrower and the
Majority  Lenders shall fail to agree as to any such amount within 30 days after
the consummation of such Permitted  Acquisition or Disposition,  as the case may
be, by the actual  amount of the cash flow  attributable  to such  Newspapers or
other  business);  (c) there shall be excluded from the calculation of Cash Flow
(i) which  includes any period  during the fiscal year ended  December 31, 1997,
expenses in respect of the Borrower's and its  Subsidiaries'  implementation  of
their  on-line  services of up to $500,000 and (ii) for any fiscal  year,  other
expenses in respect of the Borrower's and its Subsidiaries'  on-line services of
up to $1,000,000;  and (d) there shall be excluded from the  calculation of Cash
Flow all payments under the Management Bonus Plan and accrued expenses  relating
to the  discontinuance  of JRN's StarShare Plan of up to an aggregate  amount of
$35,000,000.

          "CASUALTY  EVENT"  shall  mean,  with  respect to any  Property of any
Person,  any loss of, damage to or destruction of, or any condemnation or taking
of,  such  Property  for which such Person or any of its  Subsidiaries  receives
insurance proceeds, or proceeds of a condemnation award or other compensation.

          "CHANRY" shall mean Chanry Media, Inc. and its Subsidiaries.

          "CHASE" shall mean The Chase Manhattan Bank.

          "CLASS"  shall have the meaning  assigned to such term in Section 1.03
hereof.

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

          "COMMITMENT  PERCENTAGE"  shall mean (a) with respect to any Revolving
Credit Lender,  such Lender's Revolving Credit Commitment  Percentage;  (b) with
respect  to any  Tranche A Term  Loan  Lender,  the  ratio of (i) the  aggregate
outstanding  principal  amount of the Tranche A Term Loan(s) held by such Lender
to (ii) the aggregate  outstanding  principal amount of the Tranche A Term Loans
held by all of the Tranche A Term Loan Lenders;  (c) with respect to any Tranche
B Term Loan Lender, the ratio of (i) the aggregate  outstanding principal amount
of the  Tranche  B Term  Loan(s)  held by such  Lender  to  (ii)  the  aggregate
outstanding  principal  amount of the  Tranche B Term  Loans  held by all of the
Tranche B Term Loan Lenders;  and (d) with respect to each Series of Incremental
Loans and each Incremental Loan Lender holding Incremental Loans of such Series,
the  ratio of (i) the  amount  of the  Incremental  Loan of such  Series of such
Lender to (ii) the aggregate  amount of the Incremental Loan Commitments of such
Series of all of the Incremental Loan Lenders holding  Incremental Loans of such
Series (or, if the such Series of Incremental  Loan  Commitments have expired or
terminated,  the ratio of (i) the aggregate  outstanding principal amount of the
Incremental  Loan(s) of such Series  held by such  Lender to (ii) the  aggregate
outstanding principal amount of the Incremental Loans of such Series held by all
of the Incremental Loan Lenders).

          "COMMITMENTS"   shall  mean,   collectively,   the  Revolving   Credit
Commitments,  the  Tranche  A Term  Loan  Commitments,  the  Tranche B Term Loan
Commitments and the Incremental Loan Commitments.

          "COMPLIANCE  CERTIFICATE"  shall  mean  a  certificate  of  the  chief
financial  officer or controller of the Borrower,  substantially  in the form of
Exhibit C hereto and appropriately completed.

          "CONTINUE",   "CONTINUATION"   and  "CONTINUED"  shall  refer  to  the
continuation  pursuant  to Section  2.08  hereof of a  Eurodollar  Loan from one
Interest Period to the next Interest Period.

          "CONVERT",  "CONVERSION"  and "CONVERTED"  shall refer to a conversion
pursuant  to Section  2.08  hereof of Base Rate Loans into  Eurodollar  Loans or
Eurodollar  Loans into Base Rate Loans which may be  accompanied by the transfer
by a Lender  (at its sole  discretion)  of a Loan  from one  Applicable  Lending
Office to another.

          "CONVERTIBLE   DEBT"  shall  mean  Indebtedness   (whether  senior  or
subordinated)  of the Borrower  that may be converted  into capital stock of the
Borrower.

          "CREDIT  DOCUMENTS"  shall mean,  collectively,  this  Agreement,  the
Notes, the Letter of Credit Documents, the Subsidiary Guarantee and the Security
Documents.

          "DEFAULT" shall mean an Event of Default or an event which with notice
or lapse of time or both would become an Event of Default.

          "DISPOSITION" shall mean (a) any sale,  assignment,  transfer or other
disposition  of any Property  (whether  now owned or hereafter  acquired) by the
Borrower or any of its  Subsidiaries  to any other  Person,  excluding  any such
sale,  assignment,  transfer  or other  disposition  in the  ordinary  course of
business  and on  ordinary  business  terms,  or (b)  the  entering  into of any
agreement  by the  Borrower  or any of its  Subsidiaries  with any other  Person
pursuant to which such other  Person has the right to use or manage or otherwise
exploit any Property  (whether now owned or hereafter  acquired) of the Borrower
or such Subsidiary and pursuant to which such other Person is entitled, directly
or indirectly,  to retain all or a substantial part of the revenues derived from
the use or  management  or  other  exploitation  of  such  Property.  The  terms
"DISPOSE" and "DISPOSED" used as a verb shall have a correlative meaning.

          "DOLLARS"  and "$" shall mean  lawful  money of the  United  States of
America.

          "DOMESTIC  SUBSIDIARY"  means  any  Subsidiary  other  than a  Foreign
Subsidiary.

          "EFFECTIVE  DATE"  shall  mean the date upon which the  conditions  to
effectiveness  of this  Agreement  specified in Section 6 hereof shall have been
satisfied or waived.

          "ENVIRONMENTAL  CLAIM"  shall mean,  with  respect to any Person,  any
written or oral notice,  claim, demand or other communication  (each, a "claim")
by  any  other  Person  alleging  or  asserting  such  Person's   liability  for
investigatory  costs,  cleanup costs,  governmental  response costs,  damages to
natural  resources  or other  Property or health,  personal  injuries,  fines or
penalties  arising  out of,  based on or  resulting  from (i) the  presence,  or
Release, of any Hazardous Material at or from any location, whether or not owned
by such Person,  or (ii)  circumstances  forming the basis of any violation,  or
alleged  violation,  of any Environmental  Law. The term  "Environmental  Claim"
shall include,  without limitation,  any claim by any governmental authority for
enforcement,  cleanup, removal,  response,  remedial or other actions or damages
pursuant to any applicable  Environmental  Law, and any claim by any third party
seeking damages, contribution,  indemnification,  cost recovery, compensation or
injunctive relief resulting from the presence or Release of Hazardous  Materials
or arising  from  alleged  injury or threat of injury to  health,  safety or the
environment.

          "ENVIRONMENTAL  LAWS"  shall  mean  any and  all  present  and  future
Federal, state, local and foreign laws, rules or regulations,  and any orders or
decrees, in each case as now or hereafter in effect,  relating to the regulation
or protection of the environment  (including the environment as it affects human
health or safety) or to emissions,  discharges,  Releases or threatened Releases
of  pollutants,  contaminants,  chemicals  or toxic or hazardous  substances  or
wastes into the indoor or outdoor  environment,  including,  without limitation,
ambient air, soil,  surface water,  ground water,  wetlands,  land or subsurface
strata,  or otherwise  relating to the  manufacture,  processing,  distribution,
generation,  recycling, use, treatment, storage, disposal, transport or handling
of  pollutants,  contaminants,  chemicals  or toxic or hazardous  substances  or
wastes (or the effect of the same on human health or safety).

          "EQUITY  RIGHTS"  shall  mean,   with  respect  to  any  Person,   any
subscriptions,  options, warrants, commitments,  preemptive rights or agreements
of any kind (including,  without  limitation,  any stockholders' or voting trust
agreements)  for the issuance,  sale,  registration  or voting of, or securities
convertible  into,  any  additional  shares of capital  stock of any  class,  or
partnership or other ownership interests of any type in, such Person.

          "ERISA"  shall mean the  Employee  Retirement  Income  Security Act of
1974, as amended from time to time.

          "ERISA AFFILIATE" shall mean any corporation or trade or business that
is a member of any group of organizations (i) described in Section 414(b) or (c)
of the Code of which the  Borrower is a member and (ii)  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,  described  in  Section  414(m)  or (o) of the Code of  which  the
Borrower is a member.

          "EURODOLLAR BASE RATE" shall mean, with respect to any Eurodollar Loan
for any Interest  Period  therefor,  the rate  appearing on Page 3750 of the Dow
Jones Markets  Service (or on any successor or substitute  page of such Service,
or any successor to or substitute for such Service,  providing  rate  quotations
comparable  to  those  currently  provided  on such  page of  such  Service,  as
determined  by the Agent from time to time for purposes of providing  quotations
of interest rates applicable to dollar deposits in the London interbank  market)
at  approximately  11:00  a.m.,  London  time,  two  Business  Days prior to the
commencement  of such Interest  Period,  as the rate for dollar  deposits with a
maturity  comparable to such Interest Period. In the event that such rate is not
available  at such  time for any  reason,  then the  Eurodollar  Base  Rate with
respect to such  Eurodollar  Loan for such Interest  Period shall be the rate at
which  dollar  deposits  of  $5,000,000  and for a maturity  comparable  to such
Interest  Period are  offered  by the  principal  London  office of the Agent in
immediately  available funds to leading banks in the London  interbank market at
approximately   11:00  a.m.,  London  time,  two  Business  Days  prior  to  the
commencement of such Interest Period.

          "EURODOLLAR  LOANS" shall mean Loans the  interest  rates on which are
determined on the basis of rates  referred to in the  definition of  "Eurodollar
Base Rate" in this Section 1.01.

          "EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any Interest
Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/100  of 1%)  determined  by the  Agent  to be  equal  to the  quotient  of the
Eurodollar  Base Rate for such Loan for such Interest  Period DIVIDED BY 1 MINUS
the Reserve Requirement for such Loan for such Interest Period.

          "EVENT  OF  DEFAULT"  shall  have the  meaning  given to such  term in
Section 9 hereof.

          "EXCESS  CASH  FLOW"  shall  mean,  for  any  period,  the  sum of the
following  for such  period:  (a) Cash Flow  MINUS (b) the sum of the  following
(without   duplication  of  deductions):   (i)  Total  Debt  Service  PLUS  (ii)
prepayments  of  principal  of the Loans made  pursuant to Section  2.08 hereof,
PROVIDED that, in the case of any such prepayments of principal of the Revolving
Credit Loans, the Revolving Credit Commitments shall have been reduced by a like
amount PLUS (iii) prepayments of principal of the Loans made pursuant to Section
2.09 hereof PLUS (iv)  Capital  Expenditures  made as  permitted by Section 8.10
hereof (other than Capital Expenditures made pursuant to clause (z) thereof, but
only to the extent funded with the proceeds of Revolving  Credit Loans) PLUS (v)
cash  payments  in respect of  Permitted  Acquisitions  made  during such period
(except to the  extent  made with the  proceeds  of Loans  hereunder)  PLUS (vi)
Restricted  Payments made as permitted by Section  8.09(c) hereof PLUS (vii) any
net increase in Working  Capital (or MINUS any net decrease in Working  Capital)
PLUS  (viii)  costs paid in cash in  connection  with  obtaining  Interest  Rate
Protection  Agreements  PLUS (ix) taxes (other than deferred  taxes) paid during
such period or paid or expected to be paid in cash thereafter in respect of such
period,  in each case in respect  of income or  activities  earned or  conducted
during such period.

          "EXCLUDED  TAXES" shall mean,  with respect to the Agent,  any Lender,
the  Issuing  Lender or any other  recipient  of any payment to be made by or on
account of any  obligation  of the Borrower  hereunder,  (a) income or franchise
taxes  imposed  on (or  measured  by) its net  income  by the  United  States of
America,  or by the  jurisdiction  under  the laws of which  such  recipient  is
organized  or in which its  principal  office is located  or, in the case of any
Lender,  in which its  Applicable  Lending  Office is  located,  (b) any  branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other  jurisdiction  in which the Borrower is located and (c) in the case
of a Foreign  Lender,  any withholding tax that is imposed on amounts payable to
such  Foreign  Lender at the time such  Foreign  Lender  becomes a party to this
Agreement  or is  attributable  to such  Foreign  Lender's  failure or inability
(including  as a result  of such  Foreign  Lender's  lack of  entitlement  to an
exemption or  reduction of the type  referred to therein) to comply with Section
5.07(e) hereof.

          "EXISTING CREDIT  AGREEMENT" shall have the meaning given to such term
in the second paragraph hereof.

          "EXISTING  LENDER" shall mean each Lender which is a party to both the
Existing Credit Agreement and this Agreement.

          "FEDERAL  FUNDS  RATE"  shall  mean,  for any day,  the rate per annum
(rounded  upwards,  if  necessary,  to the  nearest  1/100  of 1%)  equal to the
weighted  average of the rates on  overnight  Federal  funds  transactions  with
members of the Federal  Reserve System arranged by Federal funds brokers on such
day, as  published  by the Federal  Reserve Bank of New York on the Business Day
next succeeding such day, PROVIDED that (a) if 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 immediately  preceding  Business Day as
so published on the next succeeding Business Day, and (b) if such rate is not so
published  for any day, the Federal Funds Rate for such day shall be the average
rate  charged to Chase on such day on such  transactions  as  determined  by the
Agent.

          "FIXED  CHARGES  RATIO" shall mean, at any date, the ratio of (a) Cash
Flow for the period of four complete  consecutive  fiscal  quarters ended on, or
most  recently  ended prior to,  such date to (b) Total  Fixed  Charges for such
period.

          "FOREIGN  LENDER"  shall mean any Lender that is  organized  under the
laws of a  jurisdiction  other than that in which the  Borrower is located.  For
purposes of this  definition,  the United States of America,  each State thereof
and  the  District  of  Columbia   shall  be  deemed  to   constitute  a  single
jurisdiction.

          "FOREIGN SUBSIDIARY" means any Subsidiary which is organized under the
laws of any jurisdiction outside the United States of America, any State thereof
and the District of Columbia.

          "GAAP" shall mean generally accepted accounting  principles applied on
a basis  consistent  with those which,  in accordance  with the last sentence of
Section 1.02(a) hereof,  are to be used in making the  calculations for purposes
of determining compliance with this Agreement.

          "GOODSON  ACQUISITION"  means  the  transactions  contemplated  by the
Goodson  Acquisition  Agreement  that  are to  take  place  either  prior  to or
substantially simultaneously with the Effective Date.

          "GOODSON ACQUISITION AGREEMENT" means the Master Agreement dated as of
May 17, 1998 by and among the sellers set forth on the signature  pages thereto,
Richard G. Schneidman, as the designated stockholder, and the Borrower.

          "GUARANTEE"  shall mean a  guarantee,  an  endorsement,  a  contingent
agreement to purchase or to furnish funds for the payment or maintenance  of, or
otherwise  to be or become  contingently  liable  under or with  respect to, the
Indebtedness,  other obligations,  net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other  distributions  upon
the stock or equity interests of any Person,  or an agreement to purchase,  sell
or lease (as  lessee or  lessor)  Property,  products,  materials,  supplies  or
services  primarily for the purpose of enabling a debtor to make payment of his,
her or its  obligations  or an agreement to assure a creditor  against loss, and
including,  without  limitation,  causing  a bank to issue a letter of credit or
other  similar  instrument  for the  benefit of another  Person,  but  excluding
endorsements  for collection or deposit in the ordinary course of business.  The
terms  "GUARANTEE"  and  "GUARANTEED"  used as a verb shall  have a  correlative
meaning.

          "HAZARDOUS  MATERIAL" shall mean,  collectively,  (a) any petroleum or
petroleum products,  flammable  materials,  explosives,  radioactive  materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated  biphenyls, (b) any chemicals or other materials or
substances  that are now or  hereafter  become  defined  as or  included  in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic  pollutants",  "contaminants",  "pollutants"  or words of similar  import
under any  Environmental  Law and (c) any other  chemical  or other  material or
substance,  exposure  to  which  is  now or  hereafter  prohibited,  limited  or
regulated under any Environmental Law.

          "HEDGING  AGREEMENT" means any swap agreement,  cap agreement,  collar
agreement, put or call, futures contract,  forward contract or similar agreement
or  arrangement  entered  into to  protect  against  or  mitigate  the effect of
fluctuations  in the price of the Borrower's  publicly issued common stock or in
interest  rates,  foreign  exchange rates or prices of  commodities  used in the
business of the Borrower and its Subsidiaries and any master agreement, schedule
and confirmation relating to any of the foregoing.

          "INACTIVE  SUBSIDIARIES"  shall mean the  Subsidiaries of the Borrower
listed on Schedule XI hereto (subject to Section 8.05(a)(i) hereof).

          "INCREMENTAL  LOAN"  shall  mean the  loans  provided  for by  Section
2.01(c) hereof, which may be Base Rate Loans and/or Eurodollar Loans.

          "INCREMENTAL  LOAN  ACTIVATION  DATE" shall mean,  with respect to any
Series of  Incremental  Loans,  the date  designated  as such in the  applicable
Incremental Loan Activation Notice.

          "INCREMENTAL LOAN ACTIVATION NOTICE" shall mean a notice substantially
in the form of Exhibit F hereto.

          "INCREMENTAL  LOAN  COMMITMENT"  shall mean:  (a) for each Lender that
executes and delivers an Incremental Loan Activation  Notice,  the commitment of
such  Lender to make one or more  Incremental  Loans on and  after  the  related
Incremental  Loan Activation Date up to an aggregate  principal  amount equal to
the  amount  set  opposite  the  name of such  Lender  on the  Incremental  Loan
Activation  Notice under the caption  "Incremental  Loan Commitment" and (b) for
each Lender that acquires all or a portion of another Lender's  Incremental Loan
Commitment by assignment  pursuant to Section 11.06(b) hereof, the obligation of
such Lender to make Incremental Loans up to an aggregate  principal amount equal
to such  Lender's  Incremental  Loan  Commitment  after  giving  effect  to such
assignment  (in each case, as the same may be reduced or increased  from time to
time pursuant to Section 2.03 hereof or Section 11.06(b) hereof).  The aggregate
principal amount of the Incremental Loan Commitments is zero as of the Effective
Date and shall not exceed $500,000,000.

          "INCREMENTAL LOAN LENDER" shall mean a Lender with an Incremental Loan
Commitment or an outstanding Incremental Loan.

          "INDEBTEDNESS" shall mean, as to any Person: (a) indebtedness created,
issued or  incurred by such Person for  borrowed  money  (whether by loan or the
issuance and sale of debt securities); (b) obligations of such Person to pay the
deferred purchase or acquisition price of property or services, other than trade
accounts  payable (other than for borrowed money) arising,  and accrued expenses
incurred,  in the  ordinary  course of business  so long as such trade  accounts
payable  are  payable  within  90 days of the  date  the  respective  goods  are
delivered or the  respective  services are rendered;  (c) such  indebtedness  or
other  obligations  of others  secured  by a Lien on  Property  of such  Person,
whether or not the respective  indebtedness  or other  obligation so secured has
been  assumed  by such  Person;  (d)  obligations  of such  Person in respect of
letters of credit or similar  instruments  issued or accepted by banks and other
financial  institutions  for the  account  of such  Person;  (e)  Capital  Lease
Obligations of such Person;  and (f)  Indebtedness of others  Guaranteed by such
Person;  PROVIDED that there shall be excluded from Indebtedness of the Borrower
and its Subsidiaries any of the foregoing  obligations of the Borrower or any of
its  Subsidiaries  described  in  clauses  (a)  through  (f) above  owing to the
Borrower or any other such Subsidiary, as the case may be.

          "INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.

          "INS" shall mean INS Holdings,  Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware.

          "INTEREST  COVERAGE  RATIO" shall mean, at any date,  the ratio of (a)
Cash Flow for the period of four complete  consecutive fiscal quarters ended on,
or most recently ended prior to, such date to (b) cash Interest Expense for such
period.

          "INTEREST EXPENSE" shall mean, for any period, interest expense of the
Borrower and its  Subsidiaries  for such period  (determined  on a  consolidated
basis  without   duplication  in  accordance  with  GAAP)   including,   without
limitation,  the following:  (a) all interest in respect of  Indebtedness of the
Borrower and its Subsidiaries  (including imputed interest expense in respect of
Capital Lease Obligations) paid, accrued or capitalized during such period; PLUS
(b) all  commitment and agency fees paid to the Lenders and/or the Agent and all
commitment  and agency  fees  accrued  during  such period and in either case in
connection  with this  Agreement  (but  excluding  any legal fees or expenses in
connection with this Agreement and the other Credit Documents); PLUS (c) the net
amounts  payable (or MINUS the net amounts  receivable)  by the Borrower and its
Subsidiaries  during such period under Interest Rate Protection  Agreements (but
in any event excluding  capitalized  costs incurred in connection with obtaining
Interest Rate Protection Agreements and the related amortization).

          "INTEREST  PERIOD" shall mean,  with respect to any  Eurodollar  Loan,
each period  commencing  on the date such  Eurodollar  Loan is made or Converted
from a Base  Rate  Loan or the last day of the  immediately  preceding  Interest
Period  for such Loan and  ending on the  numerically  corresponding  day in the
first, second, third, sixth or (to the extent available from all of the Lenders,
as determined by the Agent) ninth or twelfth month  thereafter,  as the Borrower
may select as provided in Section 4.05 hereof,  except that each Interest Period
which  commences on the last Business Day of a calendar month (or on any day for
which there is no numerically  corresponding  day in the appropriate  subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month.  Notwithstanding  the foregoing:  (a) if any Interest Period for
any  Revolving  Credit Loan would  otherwise  commence  before and end after the
Revolving Credit Commitment  Termination Date, such Interest Period shall end on
the Revolving Credit Commitment Termination Date; (b) no Interest Period for any
Term Loan of any Class may commence  before and end after any Principal  Payment
Date unless,  after giving effect thereto, the aggregate principal amount of the
Term Loans of such Class having Interest  Periods which end after such Principal
Payment Date shall be equal to or less than the  aggregate  principal  amount of
the Term Loans of such Class scheduled to be outstanding  after giving effect to
the payments of principal  required to be made on such  Principal  Payment Date;
(c) no  Interest  Period for any  Incremental  Loan of any  Series may  commence
before and end after any Principal  Payment Date for  Incremental  Loans of such
Series unless,  after giving effect thereto,  the aggregate  principal amount of
the  Incremental  Loans of such Series having  Interest  Periods which end after
such  Principal  Payment  Date  shall  be equal  to or less  than the  aggregate
principal  amount  of the  Incremental  Loans  of such  Series  scheduled  to be
outstanding after giving effect to the payment of principal  required to be made
on such Principal  Payment Date; (d) each Interest  Period which would otherwise
end on a day  which is not a  Business  Day  shall  end on the  next  succeeding
Business  Day  (or,  if such  next  succeeding  Business  Day  falls in the next
succeeding  calendar month, on the immediately  preceding Business Day); and (e)
notwithstanding the foregoing,  no Interest Period shall have a duration of less
than one month  and,  if the  Interest  Period  for any  Eurodollar  Loan  would
otherwise be a shorter period (by reason of clause (a), (b), (c) or (d) above or
otherwise), such Loan shall not be available hereunder.

          "INTEREST  RATE  PROTECTION   AGREEMENT"  means  a  Hedging  Agreement
providing for the transfer or mitigation of interest  risks either  generally or
under specific contingencies.

          "INVESTMENT" shall mean, for any Person: (a) the acquisition  (whether
for cash,  Property,  services or securities  or  otherwise)  of capital  stock,
bonds,  notes,  debentures,  partnership or other  ownership  interests or other
securities  of any other Person or any  agreement  to make any such  acquisition
(including,  without limitation,  any "short sale" or any sale of any securities
at a time when such  securities  are not owned by the Person  entering into such
short  sale);  (b) the making of any deposit  with,  or  advance,  loan or other
extension  of credit to, any other  Person  (including  the purchase of Property
from another  Person  subject to an  understanding  or agreement,  contingent or
otherwise,  to resell  such  Property to such  Person,  but  excluding  any such
advance,  loan or  extension  of  credit  having  a term not  exceeding  90 days
representing  the purchase price of inventory or supplies sold by such Person in
the ordinary course of business);  (c) the entering into of any Guarantee of, or
other contingent  obligation with respect to, Indebtedness or other liability of
any other Person and (without  duplication) any amount committed to be advanced,
lent  or  extended  to such  Person;  or (d) the  entering  into of any  Hedging
Agreement.

          "ISSUING  LENDER"  shall mean Chase,  in its capacity as the issuer of
Letters of Credit hereunder,  and its successors in such capacity as provided in
Section 2.10(j).

          "JRN"  shall mean  Journal  Register  Newspapers,  Inc.,  a  non-stock
corporation  duly organized and validly  existing under the laws of the State of
Delaware.

          "LC DISBURSEMENT"  means a payment made by the Issuing Lender pursuant
to a Letter of Credit.

          "LC EXPOSURE" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding  Letters of Credit at such time PLUS (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving  Credit Lender at
any time shall be its  Revolving  Credit  Commitment  Percentage of the total LC
Exposure at such time.

          "LETTER OF CREDIT" means any letter of credit issued  pursuant to this
Agreement.

          "LETTER  OF CREDIT  DOCUMENTS"  means,  with  respect to any Letter of
Credit,  collectively,  any  application  therefor  and  any  other  agreements,
instruments,  guarantees or other documents  (whether  general in application or
applicable  only to such Letter of Credit)  governing or  providing  for (a) the
rights and obligations of the parties  concerned or at risk with respect to such
Letter of Credit or (b) any  collateral  security  for any of such  obligations,
each as the same may be  modified  and  supplemented  and in effect from time to
time.

          "LIEN" shall mean, with respect to any Property,  any mortgage,  lien,
pledge, charge,  security interest or encumbrance of any kind in respect of such
Property.  For  purposes of this  Agreement  and the other Credit  Documents,  a
Person  shall be  deemed  to own  subject  to a Lien any  Property  which it has
acquired  or holds  subject  to the  interest  of a vendor or  lessor  under any
conditional  sale agreement,  capital lease or other title  retention  agreement
other than an operating lease relating to such Property.

          "LOANS" shall mean the Revolving  Credit Loans,  Tranche A Term Loans,
Tranche B Term Loans, Incremental Loans and Swingline Loans.

          "MAJORITY  LENDERS" shall mean, at any time,  Lenders having more than
50% of the sum of (a) the aggregate Revolving Credit Exposures at such time PLUS
(b) the aggregate outstanding principal amount of the Term Loans and Incremental
Loans at such time PLUS (c) the aggregate  unused amount of the  Commitments  at
such time.  The  "Majority  Lenders" of a particular  Class of Loans (other than
Revolving  Credit  Loans)  means  Lenders  having  outstanding  Loans and unused
Commitments of such Class  representing  more than 50% of the total  outstanding
Loans and unused Commitments of such Class at such time.

          "MAJORITY  REVOLVING  CREDIT  LENDERS"  shall mean Lenders having more
than 50% of the sum of (a) the aggregate  unused amount of the Revolving  Credit
Commitments at such time PLUS (b) the aggregate  Revolving  Credit  Exposures at
such time or, if the Revolving Credit  Commitments  have  terminated,  Revolving
Credit Lenders holding more than 50% of the aggregate Revolving Credit Exposures
at such time.

          "MANAGEMENT  BONUS PLAN" shall mean the Borrower's  "Management  Bonus
Plan" pursuant to which the Borrower has paid (or will pay)  management  bonuses
up to an aggregate amount of $35,000,000,  comprised of approximately  1,100,000
shares of common stock of the  Borrower  valued at the initial  public  offering
price of the  Borrower's  common  stock  and a cash  portion  that the  Borrower
expects will be used to satisfy the recipients' tax obligations arising from the
shares of common stock.

          "MARGIN   STOCK"  shall  mean  margin  stock  within  the  meaning  of
Regulation U and Regulation X.

          "MATERIAL  ADVERSE EFFECT" shall mean a material adverse effect on (a)
the Property,  business, financial condition,  operations,  assets, liabilities,
capitalization  or prospects of the  Borrower  and its  Subsidiaries  taken as a
whole, (b) the ability of the Borrower or any of its Subsidiaries to perform any
of  such  Person's  non-monetary   obligations  under  any  of  the  Transaction
Documents,  (c)  the  validity  or  enforceability  of any  of  the  Transaction
Documents, (d) the rights and remedies of the Lenders and the Agent under any of
the Credit  Documents or (e) the timely  payment of the principal of or interest
on the Loans or other amounts payable in connection therewith.

          "MULTIEMPLOYER  PLAN" shall mean a multiemployer  plan defined as such
in Section 3(37) of ERISA to which  contributions  have been made by the Company
or any ERISA Affiliate and which is covered by Title IV of ERISA.

          "NET PROCEEDS"  shall mean, with respect to any receipt of proceeds of
any  Disposition  referred  to in  Section  2.09(b)(i)  hereof or any  insurance
payment,  or any  condemnation  award or other  compensation  in  respect of any
Casualty Event referred to in Section  2.09(b)(ii)  hereof,  the excess, if any,
of:  (a) the  aggregate  amount  of such  proceeds  OVER  (b) the sum of (i) the
reasonable fees and  out-of-pocket  expenses  incurred by the Borrower or any of
its  Subsidiaries,  in the  case of any  such  Disposition,  in  effecting  such
Disposition  or, in the case of any such  Casualty  Event,  in  collecting  such
payment  or  compensation  (as the  case may be) PLUS  (ii) the  taxes  paid (or
reasonably  estimated to be payable) by the Borrower or any of its  Subsidiaries
in connection with any such Disposition or Casualty Event but only to the extent
payable within 120 days of such  Disposition or such Casualty Event (as the case
may be) or, if such  taxes  are not so paid  within  such 120  days,  only if an
amount equal to such taxes is  deposited  with the Agent for credit to an escrow
account to be held in such  account and used to pay the same when due PLUS (iii)
in the  case of any  such  Disposition  or  Casualty  Event,  any  contractually
required  repayments of Indebtedness of the Borrower or any of its  Subsidiaries
to the extent secured by a Lien on the related Property.

          "NEW LENDER" shall mean each Lender which is a party to this Agreement
but not the Existing Credit Agreement.

          "NEWSPAPER"  shall  mean  each  newspaper  owned or  operated  by,  or
proposed to be Acquired by, any  Subsidiary  of the Borrower (or, if the context
so requires, a Subsidiary of the Borrower that owns or operates,  or proposes to
Acquire,  such a newspaper)  and may include,  without  limitation,  tangible or
intangible  assets  used or  usable in the  operation  of such  newspaper,  real
property  used  in  connection  with  such  newspaper,   contracts,  leases  and
agreements  relating to such newspaper,  all licenses required for the operation
of such  newspaper  in  accordance  with  applicable  laws and  regulations  and
copyrights,  trademarks, trade names, logos, jingles, service marks, slogans and
promotional materials used in connection with such newspaper.

          "NOTES"  shall  mean  the  promissory  notes  (if any)  issued  by the
Borrower pursuant to Section 2.07(d) hereof.

          "OBLIGORS" shall mean,  collectively,  the Borrower and the Subsidiary
Guarantors.

          "OTHER  TAXES"  shall  mean any and all  present  or  future  stamp or
documentary  taxes or any other  excise or  property  taxes,  charges or similar
levies  arising  from any  payment  made under any Credit  Document  or from the
execution,  delivery or enforcement of, or otherwise with respect to, any Credit
Document.

          "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation  or any
entity succeeding to any or all of its functions under ERISA.

          "PERMITTED ACQUISITION" shall mean an Acquisition permitted by Section
8.05(b)(v) or (vi) hereof.

          "PERMITTED LIENS" shall mean, with respect to Liens on the Property of
the Borrower and/or any of its  Subsidiaries,  collectively,  Liens permitted by
Section 8.06 hereof.

          "PERSON" shall mean any individual,  corporation,  company,  voluntary
association,  partnership,  joint venture, trust, unincorporated organization or
government (or any agency, instrumentality or political subdivision thereof).

          "PHILADELPHIA PROJECT" shall mean a planned production/office facility
for the Philadelphia area (or part thereof),  including land,  buildings and any
and all equipment  and other assets used at such  facility in the  production of
the Borrower's and its Subsidiaries' and their customers' products.

          "PLAN"  shall mean an employee  benefit or other plan  established  or
maintained by the Borrower or any ERISA  Affiliate and which is covered by Title
IV of ERISA, other than a Multiemployer Plan.

          "POST-DEFAULT  RATE" shall mean,  in respect of any  principal  of any
Loan or any other  amount  owing to any of the  Lenders  or the  Agent  under or
pursuant to this Agreement or any other Credit Document,  a rate per annum equal
to 2% PLUS the Base  Rate as in effect  from  time to time  PLUS the  Applicable
Margin  (PROVIDED that, if any amount in respect of which interest is payable at
the  Post-Default  Rate is principal  of a Eurodollar  Loan and the day interest
thereon commences to be payable at the Post-Default Rate is a day other than the
last day of an  Interest  Period  therefor,  the  "Post-Default  Rate"  for such
principal  shall be, for the period from and including such day to but excluding
the last day of such  Interest  Period,  2% PLUS the interest rate for such Loan
for such Interest Period as provided in Section 3.02(b) hereof and,  thereafter,
the rate provided for above in this definition).

          "PRIME  RATE"  shall  mean  the  rate of  interest  from  time to time
announced by Chase at its  principal  office in New York,  New York as its prime
commercial lending rate.

          "PRINCIPAL  PAYMENT  DATES" shall mean (a) with respect to Term Loans,
the Quarterly  Dates  occurring in March,  June,  September and December of each
year,  commencing  with the Quarterly Date  occurring in June,  2000 through and
including  (i) March,  2006,  with  respect to  Tranche A Term  Loans,  and (ii)
September,  2006,  with  respect to Tranche B Term Loans and (b) with respect to
each Series of Incremental Loans, the dates on which the Borrower is required to
pay each scheduled  installment of such Loans as may be hereafter agreed between
the  Borrower  and  the  Lenders   providing  such  Loans,   PROVIDED  that  the
requirements of Section 3.01(e) hereof are satisfied.

          "PRO FORMA BASIS"  mean,  as to any Person,  for any of the  following
events  which occur  subsequent  to the  commencement  of a period for which the
financial  effect of such event is being  calculated,  and giving  effect to the
event for which such  calculation is being made,  such  calculation as will give
PRO FORMA effect to such event as if same had occurred at the  beginning of such
period of calculation, and

                    (a)  for  purposes  of  the   foregoing   calculation,   the
          transaction  giving rise to the need to calculate the PRO FORMA effect
          of any of the  following  events shall be assumed to have  occurred on
          the first day of the period of twelve  consecutive  complete  calendar
          months last ended before the  occurrence of the  respective  event for
          which  such PRO  FORMA  effect  is being  determined  (the  "REFERENCE
          PERIOD"),   and  in  calculating   compliance  with  any  ratio,  such
          compliance  will be determined  on the basis of the  Reference  Period
          (notwithstanding  anything to the contrary contained in the definition
          of the  relevant  ratio in this Section  1.01),  except in the case of
          calculating  compliance  with Section 8.14 which will be determined on
          the basis of the period of four complete  consecutive  fiscal quarters
          ended on, or most recently ended prior to, such calculation date;

                    (b) in  making  any  determination  in  connection  with the
          incurrence  or assumption of any  Indebtedness  under Section  8.07(e)
          hereof  or in  connection  with any  Permitted  Acquisition,  (i) such
          Indebtedness  shall be deemed to have been  incurred  or repaid at the
          beginning  of the  Reference  Period,  (ii)  if such  Indebtedness  is
          floating rate debt,  Interest  Expense for such  Indebtedness for such
          period  shall be computed on a PRO FORMA basis  utilizing  the average
          Eurodollar  Base Rate  (assuming  3-month  interest  periods)  for the
          Reference  Period PLUS the Applicable  Margin for the relevant type of
          such  floating  rate debt,  (iii) if such  Indebtedness  is fixed rate
          debt,  Interest Expense for such Indebtedness for the Reference Period
          shall be computed on a PRO FORMA basis  utilizing  such fixed rate and
          (iv)  any  other  Indebtedness   repaid  with  the  proceeds  of  such
          Indebtedness  shall be deemed to have been repaid at the  beginning of
          the Reference  Period and the Interest  Expense relating thereto shall
          be eliminated from the calculation;

                    (c) in making  any  determination  of Cash  Flow,  PRO FORMA
          effect shall be given to any Permitted Acquisition or Disposition,  in
          each case which occurred during the Reference  Period or subsequent to
          the  Reference  Period and prior to the  Transaction  Date, as if such
          Permitted Acquisition or Disposition,  as the case may be, occurred on
          the first day of the Reference Period; and

                    (d) in the event the  Borrower  wishes  to  reflect  any pro
          forma  cost  savings  in  making  any  determination  of Cash  Flow in
          connection with any Permitted Acquisition or Disposition, the Borrower
          shall  deliver to the Agent a statement  setting  forth in  reasonable
          detail such proposed pro forma cost savings that are projected in good
          faith to result from such Permitted Acquisition or Disposition, as the
          case may be, for the Reference Period as if such Permitted Acquisition
          or Disposition  had occurred on the first day of the Reference  Period
          (and the Agent will promptly furnish such statement to the Lenders for
          approval of the Majority  Lenders,  and if (but only if) such approval
          is granted such cost  savings (or the portion of such amounts  thereof
          that the Majority  Lenders shall have approved)  shall be reflected in
          the relevant calculation.

For purposes of this definition, whenever PRO FORMA effect is to be given to any
occurrence  or event,  the PRO FORMA  calculations  shall be  determined in good
faith by a Senior Officer of the Borrower.

          "PROPERTY"  shall mean all  property of any kind  whatsoever,  whether
real,  personal or mixed and whether  tangible or  intangible,  and any right or
interest in or to any such property of any kind whatsoever.

          "QUARTERLY  DATES" shall mean the last  Business  Day of March,  June,
September and December in each year,  the first of which shall be the first such
day after the date of this Agreement.

          "REGISTER"  shall have the  meaning  assigned  to such term in Section
11.06 hereof.

          "REGULATION  A",  "REGULATION  D",  "REGULATION U" and  "REGULATION X"
shall  mean,  respectively,   Regulation  A,  Regulation  D,  Regulation  U  and
Regulation  X of the Board of Governors  of the Federal  Reserve  System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.

          "REGULATORY CHANGE" shall mean, with respect to any Lender, any change
after the date of this Agreement in United States Federal,  state or foreign law
or regulations (including, without limitation,  Regulation D) or the adoption or
making after such date of any interpretation, directive or request applying to a
class of banks  including  such  Lender of or under any United  States  Federal,
state or foreign law or regulations  (whether or not having the force of law and
whether or not failure to comply  therewith  would be  unlawful) by any court or
governmental  or  monetary   authority   charged  with  the   interpretation  or
administration thereof.

          "RELEASE" shall mean any release, spill, emission,  leaking,  pumping,
injection, deposit, disposal,  discharge,  dispersal, leaching or migration into
the indoor or outdoor environment,  including,  without limitation, the movement
of Hazardous  Materials through ambient air, soil, surface water,  ground water,
wetlands, land or subsurface strata.

          "RESERVE  REQUIREMENT"  shall mean,  for any  Interest  Period for any
Eurodollar  Loan,  the average  maximum rate at which  reserves  (including  any
marginal,  supplemental  or emergency  reserves)  are required to be  maintained
during such  Interest  Period under  Regulation D by member banks of the Federal
Reserve  System in New York City with  deposits  exceeding  one billion  Dollars
against  "Eurocurrency  liabilities"  (as such  term is used in  Regulation  D).
Without  limiting the effect of the  foregoing,  the Reserve  Requirement  shall
include any other  reserves  required to be  maintained  by such member banks by
reason of any Regulatory  Change with respect to (a) any category of liabilities
which includes  deposits by reference to which the Eurodollar Base Rate is to be
determined  as  provided in the  definition  of  "Eurodollar  Base Rate" in this
Section 1.01 or (b) any category of  extensions  of credit or other assets which
includes Eurodollar Loans.

          "RESTRICTED  PAYMENT"  shall mean any  dividend or other  distribution
(whether in cash,  securities or other property but excluding  dividends payable
solely in  additional  shares of common stock of the Borrower or, in the case of
dividends  on  preferred  stock of the  Borrower,  in shares of common  stock or
preferred  stock of the same issue)  with  respect to any shares of any class of
capital  stock  of the  Borrower  or any of  its  Subsidiaries,  or any  payment
(whether in cash,  securities or other property),  including any sinking fund or
similar   deposit,   on  account  of  the  purchase,   redemption,   retirement,
acquisition,  cancellation or termination of any such shares of capital stock of
the Borrower or any option, warrant or other right to acquire any such shares of
capital stock of the Borrower.

          "REVOLVING  CREDIT  COMMITMENT"  shall  mean:  (a) for each  Revolving
Credit  Lender that is a party to this  Agreement  on the  Effective  Date,  the
obligation  of such  Lender  to  make  Revolving  Credit  Loans  and to  acquire
participations  in Letters of Credit and  Swingline  Loans (and on the Effective
Date to assume  obligations in respect of the  designation  and  continuation of
"Revolving Credit Loans" under the Existing Credit Agreement as Revolving Credit
Loans  hereunder  as  provided  in Section  2.01(b)  hereof) up to an  aggregate
principal  amount equal to the amount set forth opposite the name of such Lender
on Annex 1 hereto under the caption "Revolving Credit  Commitment";  and (b) for
each Revolving Credit Lender that acquires all or a portion of another Revolving
Credit Lender's  Revolving Credit  Commitment by assignment  pursuant to Section
11.06(b)  hereof,  the obligation of such Lender to make Revolving  Credit Loans
and to acquire  participations in Letters of Credit and Swingline Loans up to an
aggregate  principal amount equal to such Lender's  Revolving Credit  Commitment
after giving effect to such assignment (in each case, as the same may be reduced
or  increased  from time to time  pursuant  to  Section  2.03  hereof or Section
11.06(b)  hereof).  The original  aggregate  principal  amount of the  Revolving
Credit Commitments is $400,000,000 as of the Effective Date.

          "REVOLVING CREDIT  COMMITMENT  PERCENTAGE" shall mean, with respect to
any Revolving Credit Lender, the ratio of (a) the amount of the Revolving Credit
Commitment  of such Lender to (b) the aggregate  amount of the Revolving  Credit
Commitments of all of the Revolving  Credit Lenders (or, if the Revolving Credit
Commitments  have expired or terminated,  the ratio of (a) the Revolving  Credit
Exposure of such Lender to (b) the aggregate  Revolving  Credit Exposures of the
Revolving Credit Lenders).

          "REVOLVING CREDIT COMMITMENT REDUCTION DATES" shall mean the Quarterly
Dates occurring in March, June, September and December of each year,  commencing
with the  Quarterly  Date  occurring  in June,  2002 through and  including  the
Revolving Credit Commitment Termination Date.

          "REVOLVING  CREDIT   COMMITMENT   TERMINATION  DATE"  shall  mean  the
Quarterly Date occurring in March, 2006.

          "REVOLVING  CREDIT EXPOSURE" means,  with respect to any Lender at any
time, the sum of the  outstanding  principal  amount of such Lender's  Revolving
Credit Loans and its LC Exposure and Swingline Exposure at such time.

          "REVOLVING  CREDIT  LENDERS" shall mean (a) on the Effective Date, the
Lenders having Revolving  Credit  Commitments as indicated on Annex 1 hereto and
(b) thereafter,  the Lenders from time to time having  Revolving Credit Exposure
and holding Revolving Credit  Commitments after giving effect to any assignments
thereof permitted by Section 11.06 hereof.

          "REVOLVING  CREDIT LOANS" shall mean the loans provided for by Section
2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.

          "SCHEDULED  PAYMENT" shall mean each repayment of the principal of the
Tranche A Term Loans required to be made on a Principal Payment Date pursuant to
Section  3.01(a)  hereof,  each repayment of the principal of the Tranche B Term
Loans  required  to be made on a  Principal  Payment  Date  pursuant  to Section
3.01(b)  hereof,  each  repayment  of the  principal  of the  Incremental  Loans
required  to be made on a Principal  Payment  Date  pursuant to Section  3.01(e)
hereof and the reduction in the Revolving Credit Commitments required by Section
2.03(b)(ii) hereof. For purposes of computing Total Debt Service for any period,
the amount of each Scheduled Payment shall be the aggregate  principal amount of
the Tranche A Term Loans,  Tranche B Term Loans and  Incremental  Loans actually
repaid  during  such  period  pursuant to Section  3.01(a),  Section  3.01(b) or
Section 3.01(e) hereof,  respectively,  on a Principal Payment Date after giving
effect to any  reductions in the amount  required to be repaid on such Principal
Payment  Date  pursuant to Section  2.08 or 2.09  hereof PLUS (b) the  aggregate
principal  amount of the  Revolving  Credit Loans  actually  repaid  during such
period  pursuant to Section  2.09(a) hereof after giving effect to the reduction
in the Revolving Credit Commitments  pursuant to Section 2.03(b)(ii) hereof PLUS
(c) the aggregate  principal amount of Loans prepaid during such period pursuant
to Section 2.08(c) hereof to the extent such prepaid amount would otherwise have
been required to be paid during such period pursuant to Section 3.01(a), Section
3.01(b) or Section 3.01(e) hereof.

          "SECURITY DOCUMENTS" shall mean,  collectively,  the Borrower Security
Agreement,   the  Subsidiary   Guarantor  Security  Agreement  and  all  Uniform
Commercial Code financing  statements  required thereby to be filed with respect
to the security interests created pursuant thereto.

          "SENIOR DEBT" shall mean, at any date,  Total Debt  outstanding  as at
such date MINUS the sum of  Approved  Subordinated  Debt PLUS  Convertible  Debt
(whether the same constitutes senior or subordinated  Indebtedness)  outstanding
as at such date.

          "SENIOR  LEVERAGE RATIO" shall mean, at any date, the ratio of (a) the
aggregate  principal  amount of Senior Debt of the Borrower and its Subsidiaries
outstanding  as at such  date to (b) Cash Flow for the  period of four  complete
consecutive  fiscal  quarters  ended on, or most  recently  ended prior to, such
date.

          "SENIOR  OFFICER" shall mean the President,  Executive Vice President,
Chief Financial Officer,  Controller or Vice  President-Finance of the Borrower,
as the context requires.

          "SERIES" shall have the meaning  assigned to such term in Section 1.03
hereof.

          "SUBORDINATED  DEBT" shall mean any unsecured  Indebtedness  for which
the Borrower is directly and primarily liable (other than Convertible Debt) that
is  expressly  subordinated  in right of  payment  to the  payment  of any other
Indebtedness of the Borrower.

          "SUBSIDIARY" shall mean, for any Person, any corporation,  partnership
(other  than any  limited  partnership  of which such Person is solely a limited
partner) or other entity of which at least a majority of the securities or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
of such corporation, partnership or other entity (irrespective of whether or not
at the time  securities  or other  ownership  interests  of any  other  class or
classes of such  corporation,  partnership  or other  entity shall have or might
have voting power by reason of the happening of any  contingency) is at the time
directly  or  indirectly  owned  or  controlled  by such  Person  or one or more
Subsidiaries  of such Person or by such Person and one or more  Subsidiaries  of
such Person; PROVIDED that Chanry shall not be deemed to be a Subsidiary for any
purpose  of this  Agreement  other  than to the  extent  Chanry is  included  in
historical financial statements relevant hereto. "WHOLLY OWNED SUBSIDIARY" shall
mean  any  such  corporation,  partnership  or other  entity  of which  all such
securities  or other  ownership  interests,  other  than  directors'  qualifying
shares, are so owned or controlled.

          "SUBSIDIARY GUARANTEE" shall mean a Guarantee Agreement  substantially
in the form of Exhibit B-2 hereto  between  the  Subsidiary  Guarantors  and the
Agent, as the same shall be amended,  supplemented or otherwise  modified and in
effect from time to time.

          "SUBSIDIARY  GUARANTOR  SECURITY  AGREEMENT"  shall  mean  a  Security
Agreement substantially in the form of Exhibit B-1 hereto between the Subsidiary
Guarantors  and the  Agent,  as the  same  shall  be  amended,  supplemented  or
otherwise modified and in effect from time to time.

          "SUBSIDIARY  GUARANTORS"  shall mean each of the  Subsidiaries  of the
Borrower which are, from time to time, parties to the Subsidiary Guarantee.

          "SWINGLINE  EXPOSURE" shall mean, at any time, the aggregate principal
amount of all Swingline Loans  outstanding at such time. The Swingline  Exposure
of any  Revolving  Credit  Lender  at any  time  shall be its  Revolving  Credit
Commitment Percentage of the total Swingline Exposure at such time.

          "SWINGLINE  LOANS"  shall mean the loans  provided for by Section 2.11
hereof, which shall be Base Rate Loans.

          "SWINGLINE  LENDER"  shall mean  Chase,  in its  capacity as lender of
Swingline Loans hereunder.

          "TAXES"  shall  mean any and all  present  or  future  taxes,  levies,
imposts, duties, deductions, charges or withholdings imposed by any governmental
authority.

          "TERM LOAN LENDERS" shall mean the Tranche A Term Loan Lenders and the
Tranche B Term Loan Lenders.

          "TERM  LOANS"  shall mean the  Tranche A Term Loans and the  Tranche B
Term Loans.

          "TOTAL DEBT" shall mean, at any date, all Indebtedness of the Borrower
and its  Subsidiaries  that  would be listed as a  liability  on a  consolidated
balance sheet of the Borrower and its  Subsidiaries  as at such date prepared in
accordance  with GAAP and including in any event  obligations  in respect of (a)
agreements-not-to-compete  and (b) the  liabilities  described  in  Schedule  VI
hereto but  excluding in any event income  taxes  payable or deferred,  unearned
circulation  revenue,  liabilities  under  Plans  and  liabilities  of the  type
described in Statement of Financial  Accounting  Standards Nos. 87, 106, 107 and
109 of the Financial  Accounting  Standards  Board to the extent the same may be
treated as an accrued expense under GAAP.

          "TOTAL  DEBT  SERVICE"  shall  mean,  for any  period,  the sum of the
following for the Borrower and its Subsidiaries for such period, determined on a
consolidated  basis without  duplication in accordance  with GAAP: (a) Scheduled
Payments and other  regularly  scheduled  payments for such period in respect of
principal of Indebtedness  which Indebtedness is included in Total Debt; and (b)
cash Interest Expense for such period.

          "TOTAL  FIXED  CHARGES"  shall mean,  for any  period,  the sum of the
following for the Borrower and its Subsidiaries for such period, determined on a
consolidated  basis without  duplication in accordance with GAAP: (a) Total Debt
Service;  (b) Capital  Expenditures  made as  permitted  by Section  8.10 hereof
(other than Capital  Expenditures made pursuant to clause (z) thereof);  and (c)
taxes (other than deferred taxes) paid during such period or paid or expected to
be payable in cash thereafter in respect of such period, in each case in respect
of income or activities earned or conducted during such period.

          "TOTAL  LEVERAGE  RATIO" shall mean, at any date, the ratio of (a) the
aggregate  principal  amount of Total Debt of the Borrower and its  Subsidiaries
outstanding  as at such  date to (b) Cash Flow for the  period of four  complete
consecutive  fiscal  quarters  ended on, or most  recently  ended prior to, such
date.

          "TRANCHE A TERM LOAN  COMMITMENT"  shall mean for each  Tranche A Term
Loan  Lender  that is a party  to this  Agreement  on the  Effective  Date,  the
obligation  of such Lender on the  Effective  Date to make  Tranche A Term Loans
and/or to assume  obligations in respect of the designation and  continuation of
certain  "Loans"  under the  Existing  Credit  Agreement as Tranche A Term Loans
hereunder as provided in Section  2.01(a)  hereof up to an  aggregate  principal
amount equal to the amount set forth opposite the name of such Lender on Annex 1
hereto under the caption  "Tranche A Term Loan  Commitment"  (as the same may be
reduced  pursuant to Section  2.03  hereof).  The original  aggregate  principal
amount  of the  Tranche  A  Term  Loan  Commitments  is  $250,000,000  as of the
Effective Date.

          "TRANCHE A TERM LOAN LENDERS"  shall mean (a) on the  Effective  Date,
the Lenders  having  Tranche A Term Loan  Commitments  as  indicated  on Annex 1
hereto and (b) thereafter,  the Lenders from time to time holding Tranche A Term
Loans after giving effect to any assignments  thereof permitted by Section 11.06
hereof.

          "TRANCHE A TERM LOANS"  shall mean the loans  provided  for by Section
2.01(a) hereof in respect of the Tranche A Term Loan  Commitments,  which may be
Base Rate Loans and/or Eurodollar Loans.

          "TRANCHE B TERM LOAN  COMMITMENT"  shall mean for each  Tranche B Term
Loan  Lender  that is a party  to this  Agreement  on the  Effective  Date,  the
obligation  of such Lender on the  Effective  Date to make  Tranche B Term Loans
and/or to assume  obligations in respect of the designation and  continuation of
certain  "Loans"  under the  Existing  Credit  Agreement as Tranche B Term Loans
hereunder as provided in Section  2.01(a)  hereof up to an  aggregate  principal
amount equal to the amount set forth opposite the name of such Lender on Annex 1
hereto under the caption  "Tranche B Term Loan  Commitment"  (as the same may be
reduced  pursuant to Section 2.03). The original  aggregate  principal amount of
the Tranche B Term Loan Commitments is $250,000,000 as of the Effective Date.

          "TRANCHE B TERM LOAN LENDERS"  shall mean (a) on the  Effective  Date,
the Lenders  having  Tranche B Term Loan  Commitments  as  indicated  on Annex 1
hereto and (b) thereafter,  the Lenders from time to time holding Tranche B Term
Loans after giving effect to any assignments  thereof permitted by Section 11.06
hereof.

          "TRANCHE B TERM LOANS"  shall mean the loans  provided  for by Section
2.01(a) hereof in respect of the Tranche B Term Loan  Commitments,  which may be
Base Rate Loans and/or Eurodollar Loans.

          "TRANSACTION   DOCUMENTS"   shall  mean,   collectively,   the  Credit
Documents,  the Goodson Acquisition Agreement and each other material agreement,
instrument or other  document  (including  all  schedules and exhibits  thereto)
entered into and delivered in connection with any Acquisition consummated by any
Obligor after the Effective Date if such  Acquisition is financed in whole or in
part with the proceeds of Incremental Loans hereunder.

          "TYPE"  shall have the meaning  assigned to such term in Section  1.03
hereof.

          "WORKING  CAPITAL" shall mean, at any time, the excess, if any, of the
current assets (net of cash and Cash Equivalents and excluding  accrued interest
thereon) of the Borrower and its  Subsidiaries  over their  current  liabilities
(excluding any such  liabilities in respect of the current  portion of long-term
debt, liabilities under Plans and liabilities of the type described in Statement
of Financial  Accounting  Standards  Nos. 87, 106, 107 and 109 of the  Financial
Accounting  Standards Board and accrued Interest  Expense,  accrued income taxes
payable or deferred, each determined on a consolidated basis without duplication
in accordance with GAAP).

          1.02 ACCOUNTING TERMS AND DETERMINATIONS; FISCAL PERIODS.

          (a) Except as otherwise  expressly  provided  herein,  all  accounting
terms  used  herein  shall be  interpreted,  and all  financial  statements  and
certificates and reports as to financial matters required to be delivered to the
Agent and the Lenders hereunder shall (unless otherwise disclosed to the Lenders
in writing at the time of delivery thereof in the manner described in subsection
(b)  below) be  prepared,  in  accordance  with  generally  accepted  accounting
principles  applied on a basis  consistent with those used in the preparation of
the latest financial statements furnished to the Lenders hereunder (which, prior
to the delivery of the first  consolidated  financial  statements  under Section
8.01 hereof,  shall mean the consolidated  financial  statements of the Borrower
and its  Subsidiaries  as at December  31, 1997  referred to in Section  7.02(a)
hereof).  All calculations made for the purposes of determining  compliance with
this Agreement shall (except as otherwise  expressly provided herein) be made by
application  of  generally  accepted  accounting  principles  applied on a basis
consistent  with those used in the preparation of the latest annual or quarterly
consolidated  financial  statements furnished to the Lenders pursuant to Section
8.01(a)  or (b)  hereof  (or  prior  to the  delivery  of  the  first  financial
statements   under  Section  8.01  hereof,   used  in  the  preparation  of  the
consolidated  financial  statements of the Borrower and its  Subsidiaries  as at
December 31, 1997 referred to in Section 7.02(a) hereof) unless (i) the Borrower
shall have objected to determining  such compliance on such basis at the time of
delivery of such consolidated  financial statements or (ii) the Majority Lenders
shall have  objected  to so  determining  such  compliance  within 30 days after
delivery to the Lenders of such consolidated financial statements,  in either of
which events such  calculations  shall be made on a basis  consistent with those
used in the preparation of the latest  consolidated  financial  statements as to
which such  objection  shall not have been made (which,  if objection is made in
respect of the first consolidated  financial  statements delivered under Section
8.01 hereof,  shall mean the consolidated  financial  statements of the Borrower
and its  Subsidiaries  as at December  31, 1997  referred to in Section  7.02(a)
hereof).

          (b) The Borrower  shall deliver to the Lenders at the same time as the
delivery of any annual or quarterly financial statement under Section 8.01(a) or
(b) hereof,  as the case may be, (i) a description  in reasonable  detail of any
material variation between the application of accounting  principles employed in
the preparation of such statement and the  application of accounting  principles
employed in the  preparation of the  immediately  preceding  annual or quarterly
financial  statements as to which no objection has been made in accordance  with
the last  sentence of paragraph (a) above and (ii)  reasonable  estimates of the
difference between such statements arising as a consequence thereof.

          (c) The Borrower  will not,  nor will the  Borrower  permit any of its
Subsidiaries to, change the last day of its fiscal year from December 31, or the
last days of the first three  fiscal  quarters in each of its fiscal  years from
March 31, June 30 and September 30,  respectively,  except that the Borrower may
utilize a 4, 4, 5 week month  schedule  with a year-end date nearest to December
31.

          1.03 CLASSES AND TYPES OF LOANS.  Loans hereunder are distinguished by
"Class" and by "Type".  The Class of a Loan (or of a Commitment  to make a Loan)
refers to whether such Loan is a Revolving Credit Loan, a Tranche A Term Loan, a
Tranche B Term Loan,  an  Incremental  Loan or a Swingline  Loan,  each of which
constitutes a Class.  The "Type" of a Loan refers to whether such Loan is a Base
Rate Loan or a Eurodollar  Loan, each of which  constitutes a Type. In addition,
Incremental  Loans (and  Incremental  Loan  Commitments)  are  distinguished  by
"Series".  The  Series  of  an  Incremental  Loan  (or  of an  Incremental  Loan
Commitment)  refers to the Incremental Loan Activation  Notice pursuant to which
one or more  Incremental Loan Lenders assumed an Incremental Loan Commitment and
Incremental  Commitments  assumed  pursuant to each  Incremental Loan Activation
Notice and Incremental  Loans made in respect  thereof,  shall each constitute a
Series. Loans may be identified by both Class and Type and Incremental Loans may
also be identified by Series.


          Section 2. COMMITMENTS.

          2.01 LOANS.

          (a) TRANCHE A TERM LOANS AND TRANCHE B TERM  LOANS.  On the  Effective
Date,  (i)  the  "Term  Loans",   "NEN  Acquisition  Loans",  and  "New  Britain
Acquisition  Loans" (each, as defined in the Existing Credit  Agreement) held by
the Existing  Lenders under the Existing Credit Agreement  immediately  prior to
the Effective  Date shall  automatically,  and without any action on the part of
any Person,  be  designated  and  continued as Tranche A Term Loans or Tranche B
Term Loans hereunder and each of the New Lenders that is a Term Loan Lender (and
each Existing Lender, if any, whose relative  proportion of Tranche A Term Loans
or Tranche B Term Loans hereunder is increasing over its relative  proportion of
"Term Loans",  "NEN Acquisition Loans", and "New Britain Acquisition Loans" held
by it under the Existing  Credit  Agreement  (each an "INCREASING  EXISTING TERM
LOAN LENDER"))  shall, by assignments from the Existing  Lenders,  if any, whose
relative  proportion  of the  Tranche  A Term  Loans  or  Tranche  B Term  Loans
hereunder is  decreasing  from its relative  proportion  of "Term  Loans",  "NEN
Acquisition  Loans",  and "New Britain  Acquisition  Loans" held by it under the
Existing  Credit  Agreement  (which   assignments   shall  be  deemed  to  occur
automatically  on the Effective  Date),  acquire a portion of the Tranche A Term
Loans  and/or  Tranche B Term Loan of the  Existing  Lenders so  designated  and
continued (the Term Loan Lenders shall,  through the Agent, make such additional
adjustments  among themselves as shall be necessary),  (ii) each such New Lender
and each Increasing Existing Term Loan Lender severally agrees, on the terms and
conditions of this Agreement,  to make one or more term loans (on a non pro-rata
basis) to the Borrower in Dollars  and/or  (iii) the  Borrower  shall prepay the
Tranche A Term Loans and the Tranche B Term Loans of the Existing  Lenders (on a
non pro-rata basis), in each case in such amounts, such that after giving effect
thereto,  (x) the aggregate  outstanding  principal amount of the Tranche A Term
Loans shall be equal to the original aggregate amount of the Tranche A Term Loan
Commitments  and the Tranche A Term Loan  Lenders  shall hold the Tranche A Term
Loans hereunder ratably in accordance with their respective  Tranche A Term Loan
Commitments and (y) the aggregate  outstanding principal amount of the Tranche B
Term Loans shall be equal to the original aggregate amount of the Tranche B Term
Loan  Commitments  and the Tranche B Term Loan Lenders  shall hold the Tranche B
Term Loans hereunder ratably in accordance with their respective  Tranche B Term
Loan Commitments.

          From and after the  Effective  Date,  (i) the Borrower (as provided in
Section  2.08(a)  hereof)  may  Convert  Tranche  A Term  Loans of one Type into
Tranche A Term Loans of another Type (as provided in Section  2.08(a) hereof) or
Continue  Tranche A Term  Loans of one Type as  Tranche A Term Loans of the same
Type (as provided in Section  2.08(a) hereof) and (ii) the Borrower (as provided
in Section  2.08(a)  hereof) may  Convert  Tranche B Term Loans of one Type into
Tranche B Term Loans of another Type (as provided in Section  2.08(a) hereof) or
Continue  Tranche B Term  Loans of one Type as  Tranche B Term Loans of the same
Type (as  provided  in Section  2.08(a)  hereof).  Amounts  repaid or prepaid in
respect of Term Loans may not be reborrowed.

          (b) REVOLVING  CREDIT LOANS. On the Effective Date, (i) the "Revolving
Credit Loans" (as defined in the Existing Credit Agreement) held by the Existing
Lenders under the Existing Credit Agreement  immediately  prior to the Effective
Date shall  automatically,  and without any action on the part of any Person, be
designated  and  continued  as  Revolving  Credit  Loans  outstanding  under the
Revolving  Credit  Commitments,  (ii) each Revolving  Credit Lender  (including,
without  limitation,  each New Lender that is a Revolving  Credit  Lender) shall
have a Revolving  Credit  Commitment in the amount set opposite the name of such
Lender on Annex 1 hereto,  (iii)  each of the New  Lenders  that is a  Revolving
Credit Lender (and each Existing  Lender,  if any, whose relative  proportion of
Revolving  Credit   Commitments   hereunder  is  increasing  over  its  relative
proportion  of  "Revolving  Credit  Commitments"  held by it under the  Existing
Credit Agreement (each an "INCREASING EXISTING REVOLVING CREDIT LENDER")) shall,
by assignments from the Existing Lenders,  if any, whose relative  proportion of
the  Revolving  Credit  Commitments  hereunder is  decreasing  from its relative
proportion  of  "Revolving  Credit  Commitments"  held by it under the  Existing
Credit Agreement (which  assignments  shall be deemed to occur  automatically on
the  Effective  Date),  acquire a portion of the  Revolving  Credit Loans of the
Existing  Lenders so designated and continued (and the Revolving  Credit Lenders
shall,  through the Agent, make such additional  adjustments among themselves as
shall be  necessary),  (iv) each such New  Lender and each  Increasing  Existing
Revolving  Credit Lender severally  agrees,  on the terms and conditions of this
Agreement,  to make (on a non  pro-rata  basis) a  revolving  credit loan to the
Borrower in Dollars  and/or (v) the Borrower  shall prepay the Revolving  Credit
Loans of the Existing  Lenders (on a non pro-rata  basis),  in each case in such
amounts,  such that after giving effect thereto and any other  Revolving  Credit
Loans made to the Borrower on the Effective  Date, the Revolving  Credit Lenders
shall hold the Revolving Credit Loans hereunder ratably in accordance with their
respective Revolving Credit Commitments.

          From and  after the  Effective  Date,  each  Revolving  Credit  Lender
severally agrees, on the terms of this Agreement, to make Revolving Credit Loans
to the Borrower in Dollars  during the period from and  including  the Effective
Date to but excluding the Revolving  Credit  Commitment  Termination  Date in an
aggregate  principal  amount at any one time outstanding up to but not exceeding
the  amount  of such  Lender's  Revolving  Credit  Commitment  as then in effect
PROVIDED, that in no event shall Revolving Credit Exposure of such Lender exceed
such Lender's  Revolving  Credit  Commitment or the aggregate  Revolving  Credit
Exposures of all of the Revolving  Credit Lenders exceed the aggregate amount of
the Revolving Credit Commitments of the Revolving Credit Lenders. Subject to the
terms of this Agreement,  during such period the Borrower may borrow, prepay and
reborrow the amount of the Revolving  Credit  Commitments  by means of Base Rate
Loans and  Eurodollar  Loans and may (as  provided  in Section  2.08(a)  hereof)
Convert  Revolving  Credit Loans of one Type into Revolving  Credit Loans of the
other Type or Continue  Revolving  Credit Loans of one Type as Revolving  Credit
Loans of the same Type.

          (c)  INCREMENTAL  LOANS.  The  Borrower and one or more of the Lenders
(and/or any other bank or financial  institution that thereby becomes a "Lender"
hereunder,   with  the  consent  of  the  Agent  (which  consent  shall  not  be
unreasonably  withheld)),  may at any time after the  Effective  Date agree that
such Lender (or other bank or financial institution) shall become an Incremental
Loan  Lender  by  executing  and  delivering  to the Agent an  Incremental  Loan
Activation Notice specifying the respective  Incremental Loan Commitment of such
Incremental  Lenders,  the  Incremental  Loan  Activation  Date,  the  period of
availability of such Incremental Loan Commitment,  the amortization schedule for
such Incremental Loan to be made in respect of such Incremental Loan Commitment,
and otherwise  duly  completed.  Subject to the terms and  conditions  set forth
herein,  each  Incremental  Loan  Lender  severally  agrees  to make one or more
Incremental  Loans to the  Borrower  during the period  from and  including  the
Incremental  Loan  Activation Date to but excluding the last day of the relevant
availability  period  for  such  Incremental  Loan  Commitment  in an  aggregate
principal  amount up to but not  exceeding the amount of such  Incremental  Loan
Lender's  Incremental  Loan  Commitment.  Nothing  in this  Agreement  shall  be
construed to obligate any Lender to provide any Incremental Loan Commitment.

          From and after the Incremental  Loan Activation Date, (i) the Borrower
(as provided in Section  2.08(a)  hereof) may Convert  Incremental  Loans of one
Type into  Incremental  Loans of another  Type (as  provided in Section  2.08(a)
hereof) or Continue  Incremental  Loans of one Type as Incremental  Loans of the
same Type (as provided in Section 2.08(a) hereof).  Amounts repaid or prepaid in
respect of Incremental Loans may not be reborrowed.

          (d) LIMIT ON EURODOLLAR  LOANS. No more than sixteen separate Interest
Periods in respect of Eurodollar  Loans of a Class may be outstanding  from each
Lender at any one time.

          2.02  BORROWINGS.  The  Borrower  shall  give the Agent  (which  shall
promptly notify the Lenders)  notice of each borrowing  hereunder as provided in
Section  4.05  hereof.  Not  later  than  12:00  noon New York  time on the date
specified for each  borrowing  hereunder,  each Lender shall make  available the
amount of the Loan to be made by it on such  date to the  Agent,  at an  account
designated by the Agent,  in  immediately  available  funds,  for account of the
Borrower.  The amount so received by the Agent  shall,  subject to the terms and
conditions of this  Agreement,  be made  available to the Borrower by depositing
the  same,  in  immediately  available  funds,  in an  account  of the  Borrower
(designated by the Borrower)  maintained  with Chase PROVIDED that any Revolving
Credit Loan that is a Base Rate Loan and is made to finance the reimbursement of
an LC  Disbursement  as provided in Section  2.10(f) hereof shall be remitted by
the Agent to the Issuing Lender.  This Section 2.02 shall not apply to Swingline
Loans made by the Swingline  Lender,  as to which Section  2.11(b)  hereof shall
apply.

          2.03 CHANGES OF COMMITMENTS.

          (a)  VOLUNTARY.  The  Borrower  shall have the right to  terminate  or
reduce the aggregate amount of the Revolving  Credit  Commitments at any time or
from time to time prior to the Revolving Credit Commitment  Termination Date and
shall  have the  right to  terminate  or  reduce  the  aggregate  amount  of the
Incremental  Loan  Commitments  of any  Series  at any time or from time to time
prior to the date such  Commitment is scheduled to terminate as set forth in the
Incremental  Loan  Activation  Notice  for such  Series;  PROVIDED  that (i) the
Borrower shall give notice of each such  termination or reduction as provided in
Section  4.05 hereof and (ii) each  partial  reduction  shall be in an aggregate
amount at least equal to $1,000,000.

          (b) REDUCTION OF REVOLVING CREDIT COMMITMENTS.

                    (i) The Revolving  Credit  Commitments  shall  automatically
          terminate  at  the  opening  of  business  on  the  Revolving   Credit
          Commitment Termination Date.

                    (ii) The Revolving Credit  Commitments  shall  automatically
          reduce on each Revolving Credit Commitment Reduction Date set forth in
          column (A) below to the amount set forth in column (B) below  opposite
          such Revolving Credit Commitment Reduction Date:

                 (A)                                 (B)
          Revolving Credit                    Revolving Credit
        Commitment Reduction                 Commitments Reduced
         Date Falling on or                   to the Following
             Nearest to:                          Amounts:
             -----------                          --------

            June 30, 2002                        $386,250,000
            September 30, 2002                   $372,500,000
            December  31, 2002                   $358,750,000

            March 31, 2003                       $345,000,000
            June 30, 2003                        $328,750,000
            September 30, 2003                   $312,500,000
            December  31, 2003                   $296,250,000

            March 31, 2004                       $280,000,000
            June 30, 2004                        $255,000,000
            September 30, 2004                   $230,000,000
            December  31, 2004                   $205,000,000

            March 31, 2005                       $180,000,000
            June 30, 2005                        $135,000,000
            September 30, 2005                   $ 90,000,000
            December  31, 2005                   $ 45,000,000

            March 31, 2006                              0

          PROVIDED  that,  if at the opening of  business on any such  Revolving
          Credit  Commitment  Reduction Date the amount of the Revolving  Credit
          Commitments  then in effect  is equal to or less  than the  respective
          amount set forth in column (B) above  opposite such  Revolving  Credit
          Commitment  Reduction  Date,  no further  reductions  in the Revolving
          Credit  Commitments as of such date shall be required pursuant to this
          Section 2.03(b)(ii).

          (c)  TERMINATION  OF  TERM  LOAN   COMMITMENTS  AND  INCREMENTAL  LOAN
COMMITMENTS.  The Term Loan  Commitments of each Class shall terminate after the
borrowing of Loans of such Class on the Effective  Date.  The  Incremental  Loan
Commitments  of each  Series  shall  terminate  on the date  specified  for such
termination in the Incremental Loan Activation Notice for such Series.

          (d) TERMINATION AND REDUCTIONS PERMANENT.  Commitments once terminated
or reduced may not be reinstated.

          2.04 COMMITMENT FEES.

          (a) The Borrower  shall pay to the Agent for account of each Revolving
Credit  Lender a  commitment  fee on the  daily  average  unused  amount of such
Lender's  Revolving  Credit  Commitment,  for the period from and  including the
Effective  Date to but  excluding  the  earlier of the date such  Commitment  is
terminated  or expires,  at a rate per annum equal to 3/8 of 1%, except that for
any day on which the  Total  Leverage  Ratio is less than 4.50 to 1,  commitment
fees  payable by the  Borrower  hereunder  in respect  of the  Revolving  Credit
Commitments  shall be  calculated  at a rate per annum  equal to 1/4 of 1%.  For
purposes  of  computing  commitment  fees  under  this  paragraph  (a),  (i) the
Revolving  Credit  Commitment  of a Lender (other than a Lender that is also the
Swingline  Lender)  shall be deemed to be used to the extent of the  outstanding
Revolving  Credit  Loans  and LC  Exposure  of such  Lender  (and the  Swingline
Exposure of such Lender  shall be  disregarded  for such  purpose)  and (ii) the
Revolving Credit  Commitment of a Lender that is also the Swingline Lender shall
be deemed to be used to the extent of the outstanding Revolving Credit Loans, LC
Exposure and Swingline Exposure of such Lender.

          (b) The  Borrower  shall pay to the Agent for  account of each  Lender
having an  Incremental  Loan  Commitment a commitment  fee on the daily  average
unused amount of such Lender's Incremental Loan Commitment,  for the period from
and including  such date as shall be agreed between such Lender and the Borrower
to but excluding  the earlier of the date such  Incremental  Loan  Commitment is
terminated  or expires,  at a rate per annum equal to 3/8 of 1%, except that for
any day on which the  Total  Leverage  Ratio is less than 4.50 to 1,  commitment
fees  payable by the  Borrower  hereunder  in respect  of the  Incremental  Loan
Commitments shall be calculated at a rate per annum equal to 1/4 of 1%.

          (c) For purposes of this Section 2.04, the commitment fee rate for any
day during the period  commencing on the Effective  Date and ending on the third
Business  Day  after  the  first  date  the  Borrower   delivers  to  the  Agent
consolidated  financial statements of the Borrower for the fiscal quarter ending
September  30, 1998 pursuant to Section  8.01(a)  hereof shall be 3/8 of 1%. The
commitment  fee  rate for any day  thereafter  shall  be  based  upon the  Total
Leverage  Ratio  determined  on the basis of the then most  recent  consolidated
financial  statements of the Borrower delivered to the Agent pursuant to Section
8.01(a) or 8.01(b) hereof.  Any change in the commitment fee rate as a result of
a change in the Total Leverage Ratio shall be effective as of the third Business
Day following  the date the relevant  consolidated  financial  statements of the
Borrower  are so  delivered  to the Agent,  PROVIDED  that in the event that the
Borrower  shall  fail  to  deliver  to  the  Agent  any  consolidated  financial
statements by the respective  date required  pursuant to said Section 8.01(a) or
8.01(b),  the  commitment  fee rate  shall be 3/8 of 1% for each day  during the
period  commencing on the date said financial  statements were so required to be
delivered and ending on the third Business Day following the date such financial
statements are in fact delivered to the Agent. Notwithstanding the provisions of
the  immediately  preceding  sentence,  no reduction in the  commitment fee rate
provided  for by  paragraph  (a) or (b) of this  Section 2.04 shall be effective
earlier than the date three  Business  Days after the date the Agent  receives a
notice from the Borrower specifically requesting such reduction.

          (d) Accrued  commitment  fees shall be payable on each Quarterly Date,
commencing  with the first  Quarterly Date after the Effective  Date, in arrears
and on the earlier of the date the related Commitments are terminated or expire.

          2.05 LENDING OFFICES. The Loans of each Type made by each Lender shall
be made and maintained at such Lender's  Applicable  Lending Office for Loans of
such Type.

          2.06 SEVERAL  OBLIGATIONS;  REMEDIES  INDEPENDENT.  The failure of any
Lender to make any Loan to be made by it on the date  specified  therefor  shall
not relieve any other  Lender of its  obligation  to make its Loan on such date,
but neither any Lender nor the Agent shall be responsible for the failure of any
other Lender to make a Loan to be made by such other Lender. The amounts payable
by the Borrower at any time  hereunder  and under the Notes to each Lender shall
be, as between the Borrower on the one hand and such Lender on the other hand, a
separate and  independent  debt and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and the Notes, and it shall not
be necessary for any other Lender or the Agent to consent to, or be joined as an
additional  party in, any  proceedings  for such  purposes;  PROVIDED  that this
Section  2.06  shall not be  construed  to permit  acceleration  of the Loans or
cancellation  of the Commitments by any Lender except in accordance with Section
9 hereof or as otherwise expressly permitted by the terms hereof.

          2.07 EVIDENCE OF DEBT.

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

          (b) The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made or continued hereunder,  the Class and Type thereof and
the Interest  Period  applicable  thereto,  (ii) the amount of any  principal or
interest  due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Agent hereunder
for the account of the Lenders and each Lender's share thereof.

          (c) The entries made in the accounts  maintained pursuant to paragraph
(a) or (b) of this Section 2.07 shall be PRIMA FACIE  evidence of the  existence
and amounts of the obligations  recorded  therein;  PROVIDED that the failure of
any Lender or the Agent to maintain such accounts or any error therein shall not
in any  manner  affect  the  obligation  of the  Borrower  to repay the Loans in
accordance with the terms of this Agreement.

          (d)  Any  Lender  may  request  that  Loans  made or  continued  by it
hereunder be evidenced by a promissory note(s). In such event, the Borrower,  at
its own expense, shall prepare,  execute and deliver to such Lender a promissory
note(s) payable to the order of such Lender (or, if requested by such Lender, to
such Lender and its registered assigns) and substantially in the form of Exhibit
E-1, E-2, E-3 or E-4 hereto, as appropriate,  and such note(s) shall be evidence
of such Loans (and all amounts payable in respect thereof).

          2.08 CONVERSION OR CONTINUATION OF LOANS; OPTIONAL PREPAYMENTS.

          (a) CONVERSION OR  CONTINUATION.  Subject to Section 4.04 hereof,  the
Borrower  shall  have the right to  Convert  Loans of one Type into Loans of the
other Type or to  Continue  Loans of one Type as Loans of the same Type,  at any
time or from time to time;  PROVIDED that: (i) the Borrower shall give the Agent
notice of each such  Conversion  or  Continuation  as provided  in Section  4.05
hereof;  (ii)  Eurodollar  Loans  may be  Converted  only on the  last day of an
Interest Period for such Loans and (iii) Swingline Loans may not be Converted or
Continued.

          (b) OPTIONAL PREPAYMENTS. Subject to Section 4.04 hereof, the Borrower
shall  have the right to prepay  Loans in whole or in part  without  premium  or
penalty (but subject to the penultimate  sentence of Section 3.02 hereof) at any
time or from time to time;  PROVIDED that: (i) the Borrower shall give the Agent
notice of each such prepayment as provided in Section 4.05 hereof (and, upon the
date specified in any such notice of prepayment,  the amount to be prepaid shall
become due and payable  hereunder);  (ii) Eurodollar Loans may be prepaid at any
time and from time to time,  PROVIDED  that the Borrower  pays any amounts owing
under  Section 5.05 hereof in the event of any such  prepayment  on a date other
than the last day of an Interest  Period for such Loans;  and (iii)  unless such
prepayment  is being made  pursuant  to Section  2.08(c),  each such  prepayment
shall, at the option of the Borrower,  be applied to the prepayment of Revolving
Credit  Loans,  Tranche A Term Loans,  Tranche B Term Loans,  Incremental  Loans
and/or  Swingline  Loans  (the  amount of the Loans of each  Class and Series of
Loans so prepaid to be applied  ratably to the  installments  of such Loans then
outstanding).

          (c) TERM  LOAN  AND  INCREMENTAL  LOAN  OPTIONAL  PREPAYMENTS.  On any
Business  Day (the  "PREPAYMENT  DATE")  occurring  in any  calendar  year,  the
Borrower shall have the right to prepay in whole but not in part without premium
or penalty (but subject to the penultimate  sentence of Section 3.02 hereof) the
one or two quarterly installments of principal of all Term Loans and Incremental
Loans that are  scheduled to be paid on the first and/or second (as the case may
be) Principal Payment Dates immediately  following the Prepayment Date; PROVIDED
that:  (i) the Borrower  shall give the Agent notice of each such  prepayment as
provided in Section 4.05 hereof (and, upon the date specified in any such notice
of prepayment,  the amount to be prepaid shall become due and payable hereunder)
and a  certificate  of a Senior  Officer with  respect to each such  prepayment,
which notice shall  specify that such  prepayment is being made pursuant to this
Section 2.08(c) and which certificate  shall be in form and detail  satisfactory
to the Agent and shall  specify  the  amount of the Term  Loans and  Incremental
Loans to be  prepaid  pursuant  to this  Section  2.08(c)  and  shall  contain a
calculation  of  interest  thereon  to be paid as  required  by the  penultimate
sentence of Section 3.02  hereof;  (ii)  Eurodollar  Loans may be prepaid at any
time and from time to time,  PROVIDED  that the Borrower  pays any amounts owing
under  Section 5.05 hereof in the event of any such  prepayment  on a date other
than the last day of an  Interest  Period  for such  Loans;  (iii) the amount so
prepaid (the  "PREPAYMENT  AMOUNT")  shall be equal to the  aggregate  principal
amount of all Term Loans and all  Incremental  Loans scheduled to be paid on the
first and/or  second (as the case may be) Principal  Payment  Dates  immediately
following the  Prepayment  Date PLUS accrued  interest on such Loans through the
Prepayment  Date (it being  understood that if the Agent shall receive an amount
more than the Prepayment Amount, then the amount of such prepayment in excess of
the  Prepayment  Amount shall be deemed to have been a prepayment  of Term Loans
and  Incremental  Loans made pursuant to Section 2.08(b)  hereof);  and (iv) the
Borrower may make only one  prepayment  pursuant to this Section  2.08(c) during
any calendar year.

          2.09 MANDATORY PREPAYMENTS.

          (a) REVOLVING CREDIT COMMITMENT REDUCTIONS. If, after giving effect to
any  termination or reduction of the Revolving  Credit  Commitments  pursuant to
Section  2.03 hereof,  the  aggregate  Revolving  Credit  Exposures  exceeds the
aggregate  amount of the Revolving  Credit  Commitments  as then in effect,  the
Borrower  shall,  on the  date of  such  termination  or  reduction,  apply  the
aggregate amount of such excess,  first, to prepay Swingline Loans,  second,  to
prepay  Revolving  Credit Loans and third,  to provide  cover for LC Exposure as
specified in Section 2.10(k).

          (b) DISPOSITIONS AND CASUALTY EVENTS.

                    (i) If, at any time or from time to time,  the  Borrower  or
          any  of  its   Subsidiaries   shall  receive  Net  Proceeds  from  any
          Disposition  (other than any Disposition  permitted under clauses (i),
          (ii),  (iv),  (v),  (vi) and (viii) of Section  8.05(c)  hereof),  the
          Borrower  shall,  within 365 days after  receipt of such Net  Proceeds
          (subject to the proviso below,  if such proceeds have not been applied
          by such 365th day,  then on such 365th day) unless the Borrower  shall
          have  used  all  or a  portion  of  such  proceeds  to  consummate  an
          Acquisition,  apply or cause to be  applied  (as  provided  in Section
          2.09(c) hereof) to the prepayment of principal of the Loans (and/or to
          provide cover for LC Exposure as specified in Section  2.10(k) hereof)
          in an  amount  equal  to the  lesser  of (i) the  amount  of such  Net
          Proceeds or (ii) the amount thereof  remaining after the  consummation
          of such Acquisition;  PROVIDED that if on such 365th day such proceeds
          have  not  been so used but the  Borrower  or any of its  Subsidiaries
          shall have entered into an agreement  with respect to an  Acquisition,
          then,  within 90 days thereafter,  the Borrower or such Subsidiary may
          use all or a portion  of such Net  Proceeds  (but not in excess of the
          aggregate  amount  of all cash  consideration  and all cash  costs and
          expenses  in  respect  of  such   Acquisition)   to  consummate   such
          Acquisition, and any portion of such Net Proceeds not so used shall be
          applied to prepay the Loans  (and/or to provide  cover for LC Exposure
          as specified in Section 2.10(k) hereof) in as provided herein.

                    (ii) Within two Business  Days after receipt of any proceeds
          by the Borrower or any of its  Subsidiaries in respect of any Casualty
          Event   affecting   any  Property  of  the  Borrower  or  any  of  its
          Subsidiaries (except to the extent such proceeds are to be applied (or
          are committed to be applied) within 365 days after the date of receipt
          of such proceeds towards the repair,  reconstruction or replacement of
          such Property,  and if such proceeds have not been so utilized by such
          365th day, then on such 365th day) the Borrower shall apply,  or cause
          to be applied,  an amount equal to the Net  Proceeds of such  Casualty
          Event or such  unutilized  portion  thereof  (as  provided  in Section
          2.09(c)  hereof),  to prepay principal of the Loans (and/or to provide
          cover for LC Exposure as specified in Section 2.10(k) hereof).

Notwithstanding  the foregoing  clauses (i) and (ii), the Borrower shall have no
obligation to make any such application in respect of the Net Proceeds  received
in respect of any single  Disposition  or  Casualty  Event  unless and until the
aggregate amount of all Net Proceeds received in respect of all Dispositions and
Casualty  Events  exceeds  $20,000,000  in the aggregate for any fiscal year, in
which case an amount equal to the amount of such excess shall be so applied.

          (c)  APPLICATION  OF PAYMENTS.  Prepayments  of Loans made pursuant to
clauses  (b)(i) and (ii) of this  Section 2.09 shall be applied,  first,  to the
Tranche A Term  Loans,  Tranche B Term Loans and  Incremental  Loans pro rata in
accordance with the respective  aggregate principal amounts of the Loans of such
Classes and, with respect to Incremental  Loans, pro rata in accordance with the
aggregate  principal amounts of the Incremental Loans of each Series (the amount
of the Loans of each such Class and  Series so prepaid to be applied  ratably to
the  installments  of such Loans then  outstanding)  and,  if the Tranche A Term
Loans,  Tranche B Term Loans and Incremental Loans shall have been paid in full,
the excess shall be applied to the aggregate  Revolving  Credit  Exposures (such
excess to be  applied,  first,  to prepay  Swingline  Loans,  second,  to prepay
Revolving  Credit Loans and third, to provide cover for LC Exposure as specified
in Section  2.10(k) in an  aggregate  amount  equal to such  excess)  but not to
reduce the Revolving Credit Commitments.

          (d) NOTICE; DELIVERY OF CERTIFICATE. The Borrower shall give notice to
the Agent of each  prepayment  pursuant to this  Section 2.09 in the same manner
and at the same time as is  required  for any  optional  prepayment  pursuant to
Section  2.08  hereof.  At the  time it makes  any  prepayment  of the  Loans as
required  by  paragraph  (b) above,  the  Borrower  will  deliver to the Agent a
certificate of a Senior Officer,  in form and detail  satisfactory to the Agent,
containing calculations of Net Proceeds or in respect of the related Disposition
or Casualty Event,  as the case may be, and any deductions  therefrom in respect
of amounts  that are not required to be prepaid  pursuant to this Section  2.09,
and specifying the amount of each such prepayment.

          2.10 LETTERS OF CREDIT.

          (a) GENERAL.  Subject to the terms and conditions set forth herein, in
addition to the Loans  provided  for in Section  2.01  hereof,  the Borrower may
request  the Issuing  Lender to issue,  at any time and from time to time during
the period from and including the Effective  Date to but excluding the Revolving
Credit  Commitment  Termination  Date,  Letters of Credit for its own account in
such  form  as  is   acceptable  to  the  Issuing   Lender  in  its   reasonable
determination.  Letters of Credit issued hereunder shall constitute  utilization
of the Revolving Credit Commitments.

          (b) NOTICE OF ISSUANCE,  AMENDMENT,  RENEWAL OR EXTENSION.  To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an
outstanding  Letter of Credit),  the Borrower shall hand deliver or telecopy (or
transmit by electronic  communication,  if  arrangements  for doing so have been
approved by the Issuing Lender) to the Issuing Lender and the Agent  (reasonably
in advance of the requested date of issuance, amendment, renewal or extension) a
notice  requesting the issuance of a Letter of Credit, or identifying the Letter
of Credit  to be  amended,  renewed  or  extended,  and  specifying  the date of
issuance,  amendment,  renewal or extension (which shall be a Business Day), the
date on which  such  Letter  of Credit is to expire  (which  shall  comply  with
paragraph (d) of this Section  2.10),  the amount of such Letter of Credit,  the
name and address of the beneficiary  thereof and such other information as shall
be  necessary  to prepare,  amend,  renew or extend  such  Letter of Credit.  If
requested  by the Issuing  Lender,  the  Borrower  also shall submit a letter of
credit  application on the Issuing Lender's standard form in connection with any
request for a Letter of Credit.  In the event of any  inconsistency  between the
terms and  conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Lender  relating to any Letter
of Credit, the terms and conditions of this Agreement shall control.

          (c)  LIMITATIONS  ON  AMOUNTS.  A Letter  of Credit  shall be  issued,
amended, renewed or extended only if (and upon issuance,  amendment,  renewal or
extension of each Letter of Credit the Borrower shall be deemed to represent and
warrant  that),  after giving  effect to such  issuance,  amendment,  renewal or
extension (i) the aggregate LC Exposure of the Issuing  Lender  (determined  for
these  purposes  without  giving  effect to the  participations  therein  of the
Revolving  Credit Lenders  pursuant to paragraph (e) of this Section 2.10) shall
not exceed $30,000,000 (MINUS the aggregate outstanding principal or face amount
of the obligations in respect of letters of credit or similar instruments issued
under Section 8.07(g) hereof) and (ii) the aggregate  Revolving Credit Exposures
of the Revolving  Credit  Lenders  shall not exceed the aggregate  amount of the
Revolving Credit Commitments of the Revolving Credit Lenders.

          (d) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to
the close of business on the  earlier of (i) the date  twelve  months  after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof  including any "evergreen"  Letter of Credit that provides for
such renewal or extension,  twelve months after the then-current expiration date
of such Letter of Credit,  so long as such  renewal or extension  occurs  within
three  months of such  then-current  expiration  date) and (ii) the date that is
five Business Days prior to the Revolving Credit Commitment Termination Date.

          (e)  PARTICIPATIONS.  By the  issuance  of a Letter of  Credit  (or an
amendment to a Letter of Credit  increasing  the amount  thereof) by the Issuing
Lender,  and without any further action on the part of the Issuing Lender or the
Lenders,  the Issuing Lender hereby grants to each Revolving Credit Lender,  and
each  Revolving  Credit  Lender  hereby  acquires  from the  Issuing  Lender,  a
participation  in such Letter of Credit equal to such Revolving  Credit Lender's
Revolving Credit  Commitment  Percentage of the aggregate amount available to be
drawn under such Letter of Credit. Each Revolving Credit Lender acknowledges and
agrees that its obligation to acquire participations  pursuant to this paragraph
in respect of Letters of Credit is absolute and  unconditional  and shall not be
affected by any  circumstance  whatsoever,  including any amendment,  renewal or
extension of any Letter of Credit or the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever.

          In consideration  and in furtherance of the foregoing,  each Revolving
Credit Lender hereby absolutely and unconditionally  agrees to pay to the Agent,
for the account of the Issuing Lender,  such Revolving Credit Lender's Revolving
Credit Commitment  Percentage of each LC Disbursement made by the Issuing Lender
promptly  upon the  request of the  Issuing  Lender at any time from the time of
such LC Disbursement until such LC Disbursement is reimbursed by the Borrower or
at any time after any  reimbursement  payment is  required to be refunded to the
Borrower for any reason.  Each such payment  shall be made in the same manner as
provided in Section  2.02 hereof  with  respect to Loans made by such  Revolving
Credit  Lender,  and the Agent  shall  promptly  pay to the  Issuing  Lender the
amounts so received by it from the Revolving Credit Lenders.  Promptly following
receipt  by the Agent of any  payment  from the  Borrower  pursuant  to the next
following  paragraph,  the Agent shall  distribute  such  payment to the Issuing
Lender or, to the extent that the  Revolving  Credit  Lenders have made payments
pursuant  to this  paragraph  to  reimburse  the  Issuing  Lender,  then to such
Revolving  Credit Lenders and the Issuing Lender as their  interests may appear.
Any payment  made by a Revolving  Credit  Lender  pursuant to this  paragraph to
reimburse the Issuing Lender for any LC Disbursement shall not constitute a Loan
and shall not  relieve the  Borrower  of its  obligation  to  reimburse  such LC
Disbursement.

          (f)   REIMBURSEMENT.   If  the  Issuing   Lender  shall  make  any  LC
Disbursement in respect of a Letter of Credit,  the Borrower shall reimburse the
Issuing  Lender in  respect  of such LC  Disbursement  by paying to the Agent an
amount equal to such LC Disbursement  not later than 12:00 noon New York time on
(i) the Business Day that the Borrower  receives notice of such LC Disbursement,
if such  notice  is  received  prior to  10:00  a.m.  New York  time or (ii) the
Business  Day  immediately  following  the day that the Borrower  receives  such
notice,  if such notice is not received  prior to such time,  PROVIDED  that the
Borrower may,  subject to the conditions to borrowing set forth herein,  request
in  accordance  herewith  that such  payment be financed  with the proceeds of a
Revolving  Credit Loan or  Swingline  Loan in an  equivalent  amount and, to the
extent so financed,  the  Borrower's  obligation  to make such payment  shall be
discharged  and  replaced by the  resulting  Revolving  Credit Loan or Swingline
Loan; PROVIDED that any such Revolving Credit Loan shall be a Base Rate Loan. If
the  Borrower  fails to make such  payment when due, the Agent shall notify each
Revolving Credit Lender of the applicable LC Disbursement,  the payment then due
from the  Borrower  in  respect  thereof  and  such  Revolving  Credit  Lender's
Revolving Credit Commitment Percentage thereof.

          (g) OBLIGATIONS  ABSOLUTE.  The Borrower's  obligation to reimburse LC
Disbursements  as  provided  in  paragraph  (f) of this  Section  2.10  shall be
absolute,  unconditional  and  irrevocable,  and shall be performed  strictly in
accordance  with the terms of this  Agreement  under  any and all  circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of  Credit,  or any term or  provision  therein,  (ii) any draft or other
document presented under a Letter of Credit proving to be forged,  fraudulent or
invalid in any respect or any  statement  therein  being untrue or inaccurate in
any  respect,  (iii)  payment  by the  Issuing  Lender  under a Letter of Credit
against  presentation of a draft or other document that does not comply strictly
with  the  terms  of such  Letter  of  Credit,  and  (iv)  any  other  event  or
circumstance  whatsoever,  whether or not similar to any of the foregoing,  that
might,  but for the  provisions  of this  Section  2.10,  constitute  a legal or
equitable discharge of the Borrower's obligations hereunder.

          Neither the Agent,  the Lenders  nor the  Issuing  Lender,  nor any of
their respective directors, officers, employees, attorneys or agents, shall have
any liability or  responsibility by reason of or in connection with the issuance
or  transfer  of any Letter of Credit by the  Issuing  Lender or any  payment or
failure to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence),  or any error,  omission,  interruption,
loss or  delay  in  transmission  or  delivery  of any  draft,  notice  or other
communication  under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of technical
terms or any  consequence  arising from causes beyond the control of the Issuing
Lender; PROVIDED that the foregoing shall not be construed to excuse the Issuing
Lender from  liability to the  Borrower to the extent of any direct  damages (as
opposed to consequential  damages,  claims in respect of which are hereby waived
by the  Borrower to the extent  permitted  by  applicable  law)  suffered by the
Borrower  that are caused by the Issuing  Lender's  gross  negligence or willful
misconduct when determining whether drafts and other documents presented under a
Letter of Credit comply with the terms  thereof.  The parties  hereto  expressly
agree that:

                    (i) the Issuing  Lender may accept  documents that appear on
          their face to be in substantial  compliance with the terms of a Letter
          of Credit without responsibility for further investigation, regardless
          of any notice or  information  to the  contrary,  and may make payment
          upon  presentation  of  documents  that  appear on their face to be in
          substantial compliance with the terms of such Letter of Credit;

                    (ii) the Issuing  Lender  shall have the right,  in its sole
          discretion,  to  decline  to accept  such  documents  and to make such
          payment if such documents are not in strict  compliance with the terms
          of such Letter of Credit; and

                    (iii) this sentence shall  establish the standard of care to
          be exercised by the Issuing Lender when determining whether drafts and
          other  documents  presented  under a Letter of Credit  comply with the
          terms  thereof (and the parties  hereto  hereby  waive,  to the extent
          permitted by applicable  law, any standard of care  inconsistent  with
          the foregoing).

          (h)  DISBURSEMENT  PROCEDURES.  The  Issuing  Lender  shall,  within a
reasonable time following its receipt thereof,  examine all documents purporting
to represent a demand for payment under a Letter of Credit.  The Issuing  Lender
shall  promptly  after such  examination  notify the Agent and the  Borrower  by
telephone  (confirmed  by  telecopy)  of such demand for payment and whether the
Issuing  Lender has made or will make an LC  Disbursement  thereunder;  PROVIDED
that any failure to give or delay in giving  such  notice  shall not relieve the
Borrower of its  obligation  to reimburse  the Issuing  Lender and the Revolving
Credit Lenders with respect to any such LC Disbursement.

          (i)  INTERIM  INTEREST.  If  the  Issuing  Lender  shall  make  any LC
Disbursement,  then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC  Disbursement  is made, the unpaid amount thereof shall
bear interest,  for each day from and including the date such LC Disbursement is
made  to  but  excluding  the  date  that  the  Borrower   reimburses   such  LC
Disbursement, at the rate per annum then applicable to Base Rate Loans; PROVIDED
that, if the Borrower fails to reimburse such LC Disbursement  when due pursuant
to paragraph (f) of this Section 2.10, then clause (x) of the second sentence of
Section 3.02 hereof shall apply.  Interest  accrued  pursuant to this  paragraph
shall be for the account of the Issuing Lender,  except that interest accrued on
and after  the date of  payment  by any  Revolving  Credit  Lender  pursuant  to
paragraph (f) of this Section 2.10 to reimburse the Issuing  Lender shall be for
the account of such Revolving Credit Lender to the extent of such payment.

          (j)  REPLACEMENT  OF THE ISSUING  LENDER.  The  Issuing  Lender may be
replaced at any time by written agreement  between the Borrower,  the Agent, the
replaced  Issuing  Lender  and the  successor  Issuing  Lender  (which  shall be
selected from among the Lenders). The Agent shall notify the Lenders of any such
replacement of the Issuing Lender. At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of the
replaced Issuing Lender pursuant to paragraph (l) of this Section 2.10. From and
after the effective  date of any such  replacement,  (i) the  successor  Issuing
Lender shall have all the rights and obligations of the replaced  Issuing Lender
under this Agreement  with respect to Letters of Credit to be issued  thereafter
and (ii) references herein to the term "Issuing Lender" shall be deemed to refer
to such successor or to any previous  Issuing  Lender,  or to such successor and
all  previous  Issuing  Lenders,  as  the  context  shall  require.   After  the
replacement of an Issuing Lender  hereunder,  the replaced  Issuing Lender shall
remain a party hereto and shall continue to have all the rights and  obligations
of an Issuing  Lender  under this  Agreement  with  respect to Letters of Credit
issued  by it prior to such  replacement,  but shall  not be  required  to issue
additional Letters of Credit.

          (k) CASH  COLLATERALIZATION.  If either (i) an Event of Default  shall
occur and be continuing and the Borrower  receives  notice from the Agent or the
Majority Lenders (or, if the maturity of the Loans has been accelerated, Lenders
with LC Exposure  representing more than 50% of the total LC Exposure) demanding
the  deposit of cash  collateral  pursuant  to this  paragraph  (k), or (ii) the
Borrower shall be required to provide cover for LC Exposure  pursuant to Section
2.09(a)  or  (b)  hereof,  the  Borrower  shall  immediately  deposit  into  the
Collateral  Account under and as defined in the Borrower  Security  Agreement an
amount in cash equal to, in the case of an Event of Default,  the LC Exposure as
of such date PLUS any accrued and unpaid  interest  thereon  and, in the case of
cover  pursuant to said Section  2.09(a) or (b), the amount  required under said
Section  2.09(a) or (b), as the case may be;  PROVIDED  that the  obligation  to
deposit  such cash  collateral  shall  become  effective  immediately,  and such
deposit shall become immediately due and payable, without demand or other notice
of any kind,  upon the  occurrence  of any Event of Default  with respect to the
Borrower described in Section 9(f) or (g) hereof.  Such deposit shall be held by
the Agent in the  Collateral  Account (as so defined) as collateral in the first
instance for the LC Exposure under this Agreement and thereafter for the payment
of the  Secured  Obligations  under  and as  defined  in the  Borrower  Security
Agreement, and for these purposes the Borrower hereby grants a security interest
to the Agent for the  benefit of the  Lenders in the  Collateral  Account (as so
defined) and in any financial assets (as defined in the Uniform  Commercial Code
as in effect from time to time in the State of New York) or other  property held
therein.

          (l) LETTER OF CREDIT FEES. The Borrower agrees to pay (i) to the Agent
for the account of each Revolving Credit Lender a participation fee with respect
to its  participations  in Letters of Credit,  which shall  accrue at a rate per
annum  equal to the  Applicable  Margin  for  Revolving  Credit  Loans  that are
Eurodollar  Loans on the average daily amount of such Revolving  Credit Lender's
LC Exposure  (excluding any portion  thereof  attributable  to  unreimbursed  LC
Disbursements)  during the period from and including  the Effective  Date to but
excluding  the  later  of the  date on  which  such  Revolving  Credit  Lender's
Revolving  Credit  Commitment  terminates  and the date on which such  Revolving
Credit Lender ceases to have any LC Exposure,  and (ii) to the Issuing  Lender a
fronting  fee,  which  shall  accrue  at the rate of 1/8 of 1% per  annum on the
average  daily  amount  of  the  LC  Exposure  (excluding  any  portion  thereof
attributable to unreimbursed LC Disbursements and, with respect to any Letter of
Credit,  excluding  the LC Exposure of the Issuing  Lender with respect  thereto
(determined for this purposes after giving effect to the participations  therein
of the other Revolving  Credit Lenders pursuant to paragraph (e) of this Section
2.10)) during the period from and including the Effective  Date to but excluding
the later of the date of termination of the Revolving Credit Commitments and the
date on  which  there  ceases  to be any LC  Exposure,  as  well as the  Issuing
Lender's  standard  fees with  respect to the  issuance,  amendment,  renewal or
extension of any Letter of Credit or processing of drawings thereunder.  Accrued
participation  fees and fronting fees shall be payable on each  Quarterly  Date,
commencing  with the first  Quarterly Date after the Effective  Date, in arrears
and on the earlier of the date the Revolving  Credit  Commitments are terminated
or expire.

          2.11 SWINGLINE LOANS.

          (a) AGREEMENT TO MAKE SWINGLINE LOANS. The Swingline Lender agrees, on
the terms of this Agreement,  to make Swingline Loans to the Borrower in Dollars
during the period from and  including  the  Effective  Date to but excluding the
Revolving Credit Commitment  Termination Date, in an aggregate  principal amount
at any time  outstanding  that will not  result in (i) the  aggregate  principal
amount of outstanding Swingline Loans exceeding $5,000,000 or (ii) the aggregate
Revolving  Credit  Exposures  exceeding  the  aggregate  amount of the Revolving
Credit Commitments of the Revolving Credit Lenders;  PROVIDED that the Swingline
Lender  shall  not be  required  to  make  a  Swingline  Loan  to  refinance  an
outstanding Swingline Loan. Subject to the terms of this Agreement,  during such
period the Borrower may borrow, prepay and reborrow Swingline Loans.

          (b) NOTICE  REGARDING  SWINGLINE  LOANS BY THE BORROWER.  The Borrower
shall give the Agent (which shall  promptly  notify the Lenders)  notice of each
borrowing of Swingline Loans  hereunder as provided in Section 4.05 hereof.  The
Swingline  Lender shall make each  Swingline  Loan  available to the Borrower by
means of a credit  to the  general  deposit  account  of the  Borrower  with the
Swingline  Lender  (or,  in the case of a  Swingline  Loan made to  finance  the
reimbursement  of  an  LC  Disbursement  as  provided  in  Section  2.10(f),  by
remittance  to the Issuing  Lender) by 3:00 p.m. New York time on the  requested
date of such Swingline Loan.

          (c) PARTICIPATIONS BY REVOLVING CREDIT LENDERS IN SWINGLINE Loans. The
Swingline  Lender may by written  notice given to the Agent not later than 10:00
a.m. New York time on any Business Day require the Revolving  Credit  Lenders to
acquire participations on such Business Day in all or a portion of the Swingline
Loans  outstanding.  Such notice to the Agent shall specify the aggregate amount
of Swingline Loans in which Revolving Credit Lenders will participate.  Promptly
upon  receipt  of such  notice,  the Agent  will  give  notice  thereof  to each
Revolving  Credit  Lender,  specifying  in such  notice  such  Revolving  Credit
Lender's Revolving Credit Commitment Percentage of such Swingline Loan or Loans.
Each Revolving Credit Lender hereby absolutely and unconditionally  agrees, upon
receipt of notice as provided above in this paragraph,  to pay to the Agent, for
the account of the Swingline  Lender,  such Revolving Credit Lender's  Revolving
Credit  Commitment  Percentage of such Swingline  Loan or Loans.  Each Revolving
Credit  Lender   acknowledges   and  agrees  that  its   obligation  to  acquire
participations  in Swingline  Loans  pursuant to this  paragraph is absolute and
unconditional  and  shall  not  be  affected  by  any  circumstance  whatsoever,
including  the  occurrence  and   continuance  of  a  Default  or  reduction  or
termination of the Commitments, and that each such payment shall be made without
any offset,  abatement,  withholding  or reduction  whatsoever.  Each  Revolving
Credit  Lender shall  comply with its  obligation  under this  paragraph by wire
transfer  of  immediately  available  funds,  in the same  manner as provided in
Section 2.02 hereof with respect to Loans made by such Revolving  Credit Lender,
and the Agent shall promptly pay to the Swingline Lender the amounts so received
by it from the Revolving Credit Lenders.  The Agent shall notify the Borrower of
any  participations  in any Swingline Loan acquired  pursuant to this paragraph,
and  thereafter  payments in respect of such Swingline Loan shall be made to the
Agent and not to the  Swingline  Lender.  Any amounts  received by the Swingline
Lender from the Borrower  (or other party on behalf of the  Borrower) in respect
of a Swingline  Loan after receipt by the Swingline  Lender of the proceeds of a
sale of participations therein shall be promptly remitted to the Agent; any such
amounts  received by the Agent  shall be  promptly  remitted by the Agent to the
Revolving  Credit Lenders that shall have made their  payments  pursuant to this
paragraph  and to the  Swingline  Lender,  as their  interests  may appear.  The
purchase of  participations in a Swingline Loan pursuant to this paragraph shall
not relieve the Borrower of any default in the payment thereof.


          Section 3. PAYMENTS OF PRINCIPAL AND INTEREST.

          3.01 REPAYMENT OF LOANS.

          (a) The  Borrower  hereby  promises to pay to the Agent for account of
each Tranche A Term Loan Lender the aggregate  principal amount of the Tranche A
Term Loans held by such Lender in twenty-four consecutive quarterly installments
payable on the Principal  Payment Dates,  the aggregate  principal  amount to be
paid on each Principal  Payment Date in respect of all Tranche A Term Loans held
by all Tranche A Term Loan Lenders to be in the amount specified below:

            Principal Payment Date                Aggregate Amount
                 Occurring In:                      of Payment
            ----------------------                ----------------

            June 2000                               $ 6,250,000
            September 2000                          $ 6,250,000
            December 2000                           $ 6,250,000

            March 2001                              $ 6,250,000
            June 2001                               $ 7,812,500
            September 2001                          $ 7,812,500
            December 2001                           $ 7,812,500

            March 2002                              $ 7,812,500
            June 2002                               $ 9,375,000
            September 2002                          $ 9,375,000
            December 2002                           $ 9,375,000

            March 2003                              $ 9,375,000
            June 2003                               $10,937,500
            September 2003                          $10,937,500
            December 2003                           $10,937,500

            March 2004                              $10,937,500
            June 2004                               $12,500,000
            September 2004                          $12,500,000
            December 2004                           $12,500,000

            March 2005                              $12,500,000
            June 2005                               $15,625,000
            September 2005                          $15,625,000
            December 2005                           $15,625,000

            March 2006                              $15,625,000

          (b) The  Borrower  hereby  promises to pay to the Agent for account of
each Tranche B Term Loan Lender the aggregate  principal amount of the Tranche B
Term Loans held by such Lender in twenty-six  consecutive quarterly installments
payable on the Principal  Payment Dates,  the aggregate  principal  amount to be
paid on each Principal  Payment Date in respect of all Tranche B Term Loans held
by all Tranche B Term Loan Lenders to be in the amount specified below:

            Principal Payment Date                 Aggregate Amount
                 Occurring In:                        of Payment
            ----------------------                 ----------------

            June 2000                               $   250,000
            September 2000                          $   250,000
            December 2000                           $   250,000

            March 2001                              $   250,000
            June 2001                               $   250,000
            September 2001                          $   250,000
            December 2001                           $   250,000

            March 2002                              $   250,000
            June 2002                               $   250,000
            September 2002                          $   250,000
            December 2002                           $   250,000

            March 2003                              $   250,000
            June 2003                               $   250,000
            September 2003                          $   250,000
            December 2003                           $   250,000

            March 2004                              $   250,000
            June 2004                               $   250,000
            September 2004                          $   250,000
            December 2004                           $   250,000

            March 2005                              $   250,000
            June 2005                               $12,500,000
            September 2005                          $12,500,000
            December 2005                           $12,500,000

            March 2006                              $12,500,000
            June 2006                               $97,500,000
            September 2006                          $97,500,000

          (c) The  Borrower  hereby  promises to pay to the Agent for account of
each  Revolving  Credit  Lender the full  outstanding  principal  amount of such
Lender's  Revolving  Credit Loans,  and each of such Lender's  Revolving  Credit
Loans shall mature, on the Revolving Credit Commitment Termination Date.

          (d) The Borrower  hereby  promises to pay to the Swingline  Lender the
full  outstanding  principal  amount of each  Swingline  Loan on the  earlier of
Revolving  Credit  Commitment  Termination  Date and the first  date  after such
Swingline  Loan is made that is the 15th or last day of a calendar  month and is
at least seven Business Days after such Swingline Loan is made; PROVIDED that on
each date that a Revolving  Credit Loan is made,  the  Borrower  shall repay all
Swingline Loans then outstanding.

          (e) The  Borrower  hereby  promises to pay to the Agent for account of
each Incremental Loan Lender the aggregate principal amount of Incremental Loans
held by such  Lender on such  days and at such  times as shall be agreed by such
Lender and the  Borrower in the relevant  Incremental  Loan  Activation  Notice,
PROVIDED that if the proceeds (or any part of the proceeds) of such Loans are to
be used to finance Permitted  Acquisitions,  the Borrower shall not, except upon
the  acceleration  of such  Loans  following  an Event of  Default,  agree or be
contractually  obligated to repay more than 6% of the original  principal amount
of such Loans in the first  12-month  period  following  the  borrowing  of such
Loans, more than 8% of the original principal amount of such Loans in the second
12-month  period  following  the  borrowing of such Loans,  more than 10% of the
original  principal  amount of such Loans in the third 12-month period following
the borrowing of such Loans,  more than 12% of the original  principal amount of
such Loans in the fourth 12-month period  following the borrowing of such Loans,
more  than 14% of the  original  principal  amount  of such  Loans in the  fifth
12-month  period  following  the  borrowing of such Loans,  more than 16% of the
original  principal  amount of such Loans in the sixth 12-month period following
the borrowing of such Loans,  more than 17% of the original  principal amount of
such Loans in the seventh 12-month period  following  borrowing of such Loans or
more  than 17% of the  original  principal  amount of such  Loans in the  eighth
12-month period following the borrowing of such Loans,  except that the Borrower
may agree or be  contractually  obligated to repay all or any part of such Loans
in a single payment,  or pursuant to scheduled  payments,  on or after September
30, 2006.

          (f) Any prepayment of Term Loans of any Class or of Incremental  Loans
shall be applied to reduce the subsequent scheduled repayments of the Term Loans
of such Class or Incremental  Loans to be made pursuant to paragraph (a), (b) or
(e) of this  Section  3.01,  as the  case  may  be,  ratably,  in the  case of a
prepayment  made pursuant to Section  2.08(b) or 2.09(b)(i) or (ii) hereof.  Any
prepayment  pursuant to Section  2.08(c)  hereof  shall be applied to reduce the
subsequent  scheduled  repayments  of the Term  Loans and  Incremental  Loans as
therein provided.

          3.02 INTEREST.  The Borrower  hereby  promises to pay to the Agent for
account of each Lender interest on the unpaid principal amount of each Loan made
by such  Lender for the period from and  including  the date of such Loan to but
excluding the date such Loan shall be paid in full,  at the following  rates per
annum:

                    (a) during such periods  such Loan is a Base Rate Loan,  the
          Base Rate (as in effect from time to time) PLUS the Applicable Margin;
          and

                    (b) during such periods such Loan is a Eurodollar  Loan, for
          each Interest  Period relating  thereto,  the Eurodollar Rate for such
          Loan for such Interest Period PLUS the Applicable Margin.

Notwithstanding   the  foregoing,   (x)  upon  the  occurrence  and  during  the
continuance  of an Event of Default  specified in clause (a) of Section 9 hereof
arising by reason of a failure to pay  principal  of or  interest  on any of the
Loans or to reimburse  any LC  Disbursement,  the Borrower  will (to the fullest
extent  permitted  by the law of the  State of New  York)  pay to the  Agent for
account of each Lender interest at the applicable  Post-Default Rate on the full
outstanding  principal amount of each of such Lender's Loans (whether or not due
and payable) and the full face amount all unreimbursed LC Disbursements  and (y)
upon the occurrence and during the continuance of an Event of Default  specified
in said clause (a) arising by reason of a failure to pay any other  amount,  the
Borrower  will (to the fullest  extent  permitted by the law of the State of New
York) pay to the  Agent for  account  of the Agent or any  Lender to which  such
amount is owed  interest on such  amount at the  applicable  Post-Default  Rate.
Accrued interest on each Loan shall be payable (i) in the case of each Base Rate
Loan, quarterly on the Quarterly Dates, commencing with the first Quarterly Date
occurring after the Effective Date, (ii) in the case of each Eurodollar Loan, on
the last day of each Interest  Period  therefor and, if such Interest  Period is
longer than three months,  at three month  intervals  following the first day of
such Interest  Period,  and (iii) in the case of each Loan,  upon the payment or
prepayment  thereof or the  Conversion  of such Loan to a Loan of the other Type
(but only on the principal  amount so paid,  prepaid or Converted),  except that
(A) interest payable at the Post-Default Rate shall be payable from time to time
on demand and (B) interest payable as a result of a retroactive  increase in the
Applicable  Margin in accordance  with the second  proviso of the  definition of
"Applicable  Margin"  in  Section  1.01  hereof  shall be  payable  on the third
Business Day after the delivery of the relevant financial statements pursuant to
Section  8.01(a) or 8.01(b)  hereof.  Promptly  after the  determination  of any
interest  rate provided for herein or any change  therein,  the Agent shall give
notice  thereof  to the  Lenders  to which  such  interest  is  payable  and the
Borrower.


          Section 4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

          4.01 PAYMENTS.

          (a) Except to the extent otherwise  provided  herein,  all payments of
principal,   interest  and  other  amounts,   and  all   reimbursements   of  LC
Disbursements,  to be made by the Borrower under this  Agreement,  the Notes and
the other Credit  Documents shall be made in Dollars,  in immediately  available
funds,  without deduction,  set-off or counterclaim,  to the Agent at an account
designated by the Agent,  not later than 11:00 a.m. New York time on the date on
which such  payment  shall become due (each such payment made after such time on
such due date to be deemed to have  been  made on the next  succeeding  Business
Day).

          (b) Any Lender for whose  account any such payment is to be made,  may
(but shall not be obligated  to) debit the amount of any such  payment  which is
not made by such time to any ordinary  deposit account of the Borrower with such
Lender (with notice to the Borrower and the Agent,  provided that the failure of
such  Lender to so  notify  the  Borrower  and the Agent  shall not  affect  the
validity of the  actions  taken by such Lender as  permitted  by this  paragraph
(b)).

          (c) The Borrower  shall, at the time of making each payment under this
Agreement  or any Note for  account of any Lender,  specify to the Agent  (which
shall notify the intended  recipients  thereof) the Loans, LC  Disbursements  or
other amounts  payable by the Borrower  hereunder to which such payment is to be
applied in which case such  payment  shall,  subject to Section  4.02 hereof and
unless an Event of Default shall have occurred and be continuing,  be applied as
so specified (and in the event that the Borrower  fails to so specify,  or if an
Event of Default has occurred and is continuing,  the Agent may distribute  such
payment to the Lenders  and/or the other  Person(s) to which amounts are payable
by the  Borrower  hereunder  in such manner as the  Majority  Lenders or, in the
absence of instructions from the Majority Lenders, the Agent may determine to be
appropriate, subject to Section 4.02 hereof).

          (d) Each  payment  received by the Agent under this  Agreement  or any
Note  for  account  of a  Lender  shall  be  paid  promptly  to such  Lender  in
immediately  available  funds, for account of such Lender's  Applicable  Lending
Office for the Loan in respect of which such payment is made.

          (e) If the due date of any payment  under this  Agreement  or any Note
would  otherwise fall on a day which is not a Business Day such payment shall be
made on the immediately preceding Business Day.

          4.02 PRO RATA  TREATMENT.  Except  to the  extent  otherwise  provided
herein: (a) each payment of commitment fees under Section 2.04 hereof in respect
of Commitments of a particular Class and Series shall be made for account of the
relevant  Lenders,  and each  termination  or  reduction  of the  amount  of the
Commitments of a particular  Class and Series under Section 2.03 hereof shall be
applied to the  respective  Commitments of such Class and Series of the relevant
Lenders, pro rata according to the amounts of their Commitment Percentages;  (b)
the making,  Conversion  and  Continuation  of Loans of a  particular  Class and
Series of a particular Type (other than Conversions provided for by Section 5.04
hereof)  shall be made pro rata  among the  relevant  Lenders  according  to the
amounts of their  respective  Commitment  Percentages and Eurodollar  Loans of a
particular  Class and Series  made,  Converted  or Continued on the same day but
having different Interest Periods shall be allocated pro rata among the relevant
Lenders  according  to the  amounts  of  such  Loans  respectively  held by such
Lenders; (c) each payment or prepayment by the Borrower of Loans of a particular
Class and Series (other than  Swingline  Loans) shall be made for account of the
relevant  Lenders pro rata in accordance  with the respective  unpaid  principal
amounts of such  Loans held by the  relevant  Lenders;  and (d) each  payment of
interest on Loans of a particular  Class and Series (other than Swingline Loans)
shall be made for account of the relevant  Lenders pro rata in  accordance  with
the amounts of the interest on such Loans then due and payable to such Lenders.

          4.03  COMPUTATIONS.  Interest on Eurodollar  Loans,  commitment  fees,
participation fees and fronting fees shall be computed on the basis of a year of
360 days and actual days elapsed (including the first day but excluding the last
day)  occurring in the period for which  payable and interest on Base Rate Loans
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed  (including  the first day but  excluding  the last day)
occurring  in the  period  for which  payable.  Notwithstanding  the  foregoing,
interest on Base Rate Loans  determined  by reference to the Federal  Funds Rate
shall be computed on the basis of a year of 360 days.

          4.04 MINIMUM AMOUNTS.  Except for Conversions made pursuant to Section
5.04  hereof  and  prepayments  made  pursuant  to  Section  2.09  hereof,  each
borrowing, Conversion, Continuation and prepayment of principal of (a) Base Rate
Loans  shall be in an amount  equal to  $2,000,000  or an  integral  multiple of
$1,000,000  ($500,000 in the case of Incremental Loans of each Series) in excess
thereof  and (b)  Eurodollar  Loans  shall be in an amount  equal to  $5,000,000
($1,000,000  in the case of  Incremental  Loans of each  Series) or an  integral
multiple  of  $1,000,000  ($500,000  in the  case of  Incremental  Loans of each
Series) in excess thereof (borrowings, Conversions, Continuations or prepayments
of or into Loans of different Types or, in the case of Eurodollar Loans,  having
different  Interest  Periods at the same time  hereunder  to be deemed  separate
borrowings,  Conversions,  Continuations  and  prepayments  for  purposes of the
foregoing, one for each Type or Interest Period), except that each borrowing and
prepayment of Swingline  Loans shall be in an amount at least equal to $500,000.
Anything  in this  Agreement  to the  contrary  notwithstanding,  the  aggregate
principal amount of Eurodollar Loans having the same Interest Period shall be at
least equal to $5,000,000  ($1,000,000 in the case of Incremental  Loans of each
Series) and, if any Eurodollar  Loans would  otherwise be in a lesser  principal
amount for any period, such Loans shall be Base Rate Loans during such period.

          4.05 CERTAIN NOTICES.  Except as otherwise provided herein, notices by
the Borrower of  terminations  or  reductions  of  Commitments,  of  borrowings,
Conversions,  Continuations  and  prepayments of Loans, of Types of Loans and of
the duration of Interest  Periods  shall be  irrevocable  and shall be effective
only if received by the Agent (and,  in the case of a borrowing or prepayment of
Swingline  Loans,  the  Swingline  Lender) not later than 10:00 a.m. (or, in the
case of borrowings or prepayments of Swingline Loans,  12:00 noon) New York time
on the number of Business  Days prior to the date of the  relevant  termination,
reduction, borrowing, Conversion, Continuation or prepayment or the first day of
such Interest Period specified below:

                                                  Number of
               Notice                        Business Days Prior
               ------                        -------------------

            Termination or
            reduction of Commitments                  2

            Borrowing or  prepayment  of,
            or  Conversion  into,  Base 
            Rate Loans (other than any 
            such  borrowing on the 
            Effective  Date and any
            borrowing or prepayment of
            Swingline Loans)                          1

            Borrowing of Base Rate
            Loans on the Effective
            Date and any borrowing or
            prepayment of Swingline Loans         same day

            Borrowing or prepayment of,
            Conversion into,
            Continuation as, or
            duration of Interest Period
            for, Eurodollar Loans                     3

Each such notice of  termination  or reduction  shall  specify the amount of the
Commitments  to be  terminated  or  reduced.  Each  such  notice  of  borrowing,
Conversion,  Continuation or prepayment  shall specify the Loans to be borrowed,
Converted,  Continued or prepaid and the amount (subject to Section 4.04 hereof)
and Type of the Loans to be  borrowed,  Converted,  Continued or prepaid and the
date of borrowing,  Conversion,  Continuation  or  prepayment  (which shall be a
Business Day). Each such notice of borrowing or  Continuation  of, or Conversion
into,  a  Eurodollar  Loan shall  specify the  duration of the  Interest  Period
therefor.  The Agent shall  promptly  notify the Lenders of the contents of each
such notice. In the event that the Borrower fails to select the Type of Loan, or
the duration of any Interest  Period for any  Eurodollar  Loan,  within the time
period and otherwise as provided in this Section 4.05, such Loan (if outstanding
as a Eurodollar Loan) will be  automatically  Converted into a Base Rate Loan on
the  last  day  of the  then  current  Interest  Period  for  such  Loan  or (if
outstanding  as a Base Rate Loan) will  remain as, or (if not then  outstanding)
will be made as, a Base Rate Loan.

          4.06  NON-RECEIPT  OF FUNDS BY THE AGENT.  Unless the Agent shall have
been  notified by a Lender or the Borrower  (the  "PAYOR")  prior to the date on
which the Payor is to make payment to the Agent of (in the case of a Lender) the
proceeds  of a Loan to be made by such Lender  hereunder  or (in the case of the
Borrower)  a  payment  to the Agent for  account  of one or more of the  Lenders
hereunder  (such  payment being herein  called the  "REQUIRED  PAYMENT"),  which
notice shall be effective  upon receipt,  that the Payor does not intend to make
the  Required  Payment to the  Agent,  the Agent may  assume  that the  Required
Payment has been made and may, in reliance upon such  assumption  (but shall not
be required to), make the amount thereof available to the intended  recipient(s)
on such date; and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient(s) of such payment shall, on demand, repay to the Agent the
amount so made available  together with interest  thereon in respect of each day
during the period commencing on the date (the "ADVANCE DATE") such amount was so
made  available by the Agent until the date the Agent  recovers such amount at a
rate  per  annum  equal to the  Federal  Funds  Rate  for such day and,  if such
recipient(s)  shall  fail  promptly  to make such  payment,  the Agent  shall be
entitled  to recover  such  amount,  on demand,  from the Payor,  together  with
interest as aforesaid,  PROVIDED that if neither the  recipient(s) nor the Payor
shall return the Required Payment to the Agent within three Business Days of the
Advance  Date,  then,  retroactively  to the  Advance  Date,  the  Payor and the
recipient(s)  shall each be obligated to pay interest on the Required Payment as
follows:

                    (i) if the Required  Payment shall represent a payment to be
          made by the Borrower to the Lenders, the Borrower and the recipient(s)
          shall  each be  obligated  retroactively  to the  Advance  Date to pay
          interest in respect of the Required Payment at the  Post-Default  Rate
          (and, in case the  recipient(s)  shall return the Required  Payment to
          the Agent,  without  limiting the  obligation  of the  Borrower  under
          Section  3.02  hereof  to pay  interest  to such  recipient(s)  at the
          Post-Default Rate in respect of the Required Payment) and

                    (ii) if the Required  Payment shall represent  proceeds of a
          Loan to be made by the  Lenders  to the  Borrower,  the  Payor and the
          Borrower shall each be obligated  retroactively to the Advance Date to
          pay  interest  in  respect  of the  Required  Payment  at the  rate of
          interest  provided for such Required  Payment pursuant to Section 3.02
          hereof (and, in case the Borrower shall return the Required Payment to
          the Agent,  without  limiting  any claim the Borrower may have against
          the Payor in respect of the Required Payment).

          4.07 SHARING OF PAYMENTS, ETC.

          (a) The Borrower  agrees that, in addition to (and without  limitation
of) any right of set-off,  bankers' lien or  counterclaim a Lender may otherwise
have, each Lender shall be entitled,  at its option,  to offset balances held by
it for account of the Borrower at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender's Loans, or
any other amount  payable to such Lender  hereunder,  which is not paid when due
(regardless  of whether such  balances are then due to the  Borrower),  in which
case it shall promptly notify the Borrower and the Agent thereof,  PROVIDED that
such Lender's failure to give such notice shall not affect the validity thereof.

          (b) (i) At any time and from  time to time  prior to the time that all
of the Loans are declared or become due and payable pursuant to Section 9 hereof
and all of the Commitments  hereunder are terminated pursuant to said Section 9,
if any Lender shall obtain  payment of any  principal of or interest on any Loan
of any  Class and  Series  (other  than any  Swingline  Loan)  made by it to the
Borrower  under this  Agreement or payment of any other  amount  relating to the
Loans or  Commitments of such Class and Series under this Agreement or any other
Credit Document or payment in respect of its  participations in LC Disbursements
and Swingline Loans through the exercise of any right of set-off,  banker's lien
or counterclaim or similar right or otherwise, and, as a result of such payment,
such Lender  shall have  received a greater  percentage  of the  principal of or
interest  on the Loans or  Commitments  of such  Class and  Series or such other
amounts  relating to the Loans of such Class and Series or payment in respect of
its participations in LC Disbursements and Swingline Loans then due hereunder by
the Borrower to such Lender than the  percentage  received by any other Lenders,
it shall promptly purchase from such other Lenders participations in (or, if and
to the extent  specified by such Lender,  direct interests in) the Loans of such
Class and Series made by such other Lenders (or in interest due thereon,  as the
case may be) or such other amounts  relating to the Loans or Commitments of such
Class and Series or in LC Disbursements  and Swingline Loans,  respectively,  in
such  amounts  and make  such  other  adjustments  from time to time as shall be
equitable,  to the end that all the  Lenders  shall  share the  benefit  of such
excess  payment  (net of any  expenses  which may be  incurred by such Lender in
obtaining or preserving  such excess  payment) pro rata in  accordance  with the
unpaid  principal  and/or interest on the Loans of such Class and Series held by
each of the Lenders or such other amounts  relating to the Loans or  Commitments
of such Class and Series or  payment  in  respect  of its  participations  in LC
Disbursements and Swingline Loans owing to each of the Lenders.  To such end all
the Lenders shall make appropriate  adjustments  among themselves (by the resale
of  participations  sold or  otherwise)  if such  payment is  rescinded  or must
otherwise be restored.

          (ii) At any time  from and  after  the time  that all of the Loans are
declared or become due and  payable  pursuant to Section 9 hereof and all of the
Commitments  hereunder are terminated  pursuant to said Section 9, if any Lender
shall obtain payment of any principal of or interest on any Loan (other than any
Swingline  Loan) made by it to the Borrower  under this  Agreement or payment in
respect of its participations in LC Disbursements and Swingline Loans or payment
of any other amount under this  Agreement or any other Credit  Document  through
the exercise of any right of set-off,  banker's lien or  counterclaim or similar
right or  otherwise,  and, as a result of such  payment,  such Lender shall have
received a greater  percentage  of the  principal of or interest on the Loans or
payments in respect of its  participations  in LC  Disbursements  and  Swingline
Loans or such other  amounts  then due  hereunder by the Borrower to such Lender
than the percentage  received by any other Lenders,  it shall promptly  purchase
from such other Lenders participations in (or, if and to the extent specified by
such Lender,  direct  interests  in) the Loans made by such other Lenders (or in
interest  due thereon,  as the case may be) or LC  Disbursements  and  Swingline
Loans or such other amounts,  respectively,  in such amounts and make such other
adjustments  from  time to time as shall be  equitable,  to the end that all the
Lenders  shall  share the benefit of such excess  payment  (net of any  expenses
which may be incurred  by such Lender in  obtaining  or  preserving  such excess
payment) pro rata in accordance with the unpaid principal and/or interest on the
Loans held by each of the Lenders or  payments in respect of its  participations
in LC  Disbursements  and  Swingline  Loans owing to each of the Lenders or such
other  amounts  owing to each of the Lenders.  To such end all the Lenders shall
make appropriate  adjustments  among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored.

          (c) The Borrower  agrees that any Lender so purchasing a participation
(or direct  interest)  in the Loans made by other  Lenders (or in  interest  due
thereon,  as the case may be) or payments in respect of its participations in LC
Disbursements  and Swingline Loans may exercise all rights of set-off,  bankers'
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct  creditor of the  Borrower in the amount of such
participation.

          (d) Nothing  contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to  exercise,  and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower. If, under any applicable  bankruptcy,  insolvency or
other  similar law, any Lender  receives a secured claim in lieu of a set-off to
which this Section 4.07 applies,  such Lender shall, to the extent  practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the  rights of the  Lenders  entitled  under this  Section  4.07 to share in the
benefits of any recovery on such secured claim.


          Section 5. YIELD PROTECTION AND ILLEGALITY.


          5.01 ADDITIONAL COSTS.


          (a) The  Borrower  shall pay directly to each Lender from time to time
such amounts as such Lender may  determine to be necessary to  compensate it for
any costs  which  such  Lender  determines  are  attributable  to its  making or
maintaining  of any  Eurodollar  Loans or its  obligation to make any Eurodollar
Loans  hereunder,  or any  reduction  in any amount  receivable  by such  Lender
hereunder in respect of any of such Loans or such obligation  (such increases in
costs and  reductions  in amounts  receivable  being herein  called  "ADDITIONAL
COSTS"), resulting from any Regulatory Change which:

                    (i)  imposes or modifies  any  reserve,  special  deposit or
          similar  requirements (other than the Reserve Requirement  utilized in
          the  determination  of the Eurodollar  Rate for such Loan) relating to
          any  extensions  of credit or other assets of, or any deposits with or
          other  liabilities of, such Lender (including any of such Loans or any
          deposits  referred to in the definition of  "Eurodollar  Base Rate" in
          Section 1.01 hereof),  or any commitment of such Lender (including the
          Commitments of such Lender hereunder); or

                    (ii) imposes any other condition affecting this Agreement or
          its Notes (or any of such  extensions  of  credit or  liabilities)  or
          Commitments.

          If any  Lender  requests  compensation  from the  Borrower  under this
Section 5.01(a),  the Borrower may, by notice to such Lender (with a copy to the
Agent),  suspend the  obligation  of such Lender to make or Continue  Eurodollar
Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the Regulatory
Change  giving  rise to such  request  ceases to be in effect (in which case the
provisions of Section 5.04 hereof shall be applicable).

          (b) Without  limiting the effect of the provisions of Section  5.01(a)
hereof, in the event that, by reason of any Regulatory Change, any Lender either
(i) incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a  category  of  deposits  or other  liabilities  of such
Lender  which  includes  deposits by  reference  to which the  interest  rate on
Eurodollar  Loans is determined  as provided in this  Agreement or a category of
extensions  of credit or other assets of such Lender which  includes  Eurodollar
Loans or (ii) becomes  subject to  restrictions on the amount of such a category
of  liabilities  or assets which it may hold,  then, if such Lender so elects by
notice to the Borrower (with a copy to the Agent), the obligation of such Lender
to make or  Continue,  or to Convert  Base Rate  Loans  into,  Eurodollar  Loans
hereunder shall be suspended until such Regulatory Change ceases to be in effect
(in which case the provisions of Section 5.04 hereof shall be applicable).

          (c) Without  limiting the effect of the  foregoing  provisions of this
Section 5.01 (but without duplication),  the Borrower shall pay directly to each
Lender from time to time on request such amounts as such Lender may determine to
be necessary to  compensate  such Lender for any costs which it  determines  are
attributable  to the  maintenance  by such  Lender  (or any  Applicable  Lending
Office),  pursuant to any law or regulation or any interpretation,  directive or
request (whether or not having the force of law) of any court or governmental or
monetary  authority (i) following any Regulatory Change or (ii) implementing any
risk-based  capital  guideline or other  requirement  (whether or not having the
force  of law and  whether  or not the  failure  to  comply  therewith  would be
unlawful)  heretofore or hereafter  issued by any government or  governmental or
supervisory  authority,  of capital in respect of its Commitments or Loans (such
compensation to include, without limitation, an amount equal to any reduction of
the rate of return on assets or equity of such Lender (or any Applicable Lending
Office)  to a level  below that which  such  Lender (or any  Applicable  Lending
Office)  could  have  achieved  but for such  law,  regulation,  interpretation,
directive or request).

          (d) Each Lender will notify the Borrower of any event  occurring after
the date of this Agreement that will entitle such Lender to  compensation  under
paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but in any
event  within 60 days,  after such  Lender  obtains  actual  knowledge  thereof;
PROVIDED,  however,  that if any Lender fails to give such notice within 60 days
after it obtains  actual  knowledge of such an event,  such Lender  shall,  with
respect to compensation  payable pursuant to this Section 5.01 in respect of any
costs resulting from such event,  only be entitled to payment under this Section
5.01 for costs  incurred  from and after the date 60 days prior to the date that
such Lender does give such notice; and PROVIDED,  FURTHER, that each Lender will
designate a  different  Applicable  Lending  Office for the Loans of such Lender
affected  by such event if such  designation  will avoid the need for, or reduce
the amount  of,  such  compensation  and will not,  in the sole  opinion of such
Lender, be disadvantageous to such Lender, except that such Lender shall have no
obligation  to  designate an  Applicable  Lending  Office  located in the United
States of  America.  Each  Lender  will  furnish to the  Borrower a  certificate
setting  forth  the  basis  and  amount  of  each  request  by such  Lender  for
compensation under paragraph (a) or (c) of this Section 5.01. Determinations and
allocations by any Lender for purposes of this Section 5.01 of the effect of any
Regulatory Change pursuant to Section 5.01(a) or (b) hereof, or of the effect of
capital  maintained  pursuant to Section 5.01(c) hereof, on its costs or rate of
return of  maintaining  Loans or its  obligation  to make  Loans,  or on amounts
receivable by it in respect of Loans,  and of the amounts required to compensate
such Lender under this Section  5.01,  shall be  conclusive,  PROVIDED that such
determinations and allocations are made on a reasonable basis.

          5.02  LIMITATION  ON TYPES OF LOANS.  Anything  herein to the contrary
notwithstanding,  if, on or prior to the  determination  of the Eurodollar  Base
Rate for any Interest Period:

                    (a) the  Agent  determines  (which  determination  shall  be
          conclusive)  that  quotations  of  interest  rates  for  the  relevant
          deposits  referred to in the definition of  "Eurodollar  Base Rate" in
          Section 1.01 hereof are not being provided in the relevant  amounts or
          for the  relevant  maturities  for  purposes of  determining  rates of
          interest for Eurodollar Loans as provided herein; or

                    (b) if the related  Loans are Revolving  Credit  Loans,  the
          Majority  Revolving  Credit Lenders or, if the related Loans are Loans
          of any other  Class,  the  Majority  Lenders of such  Class  determine
          (which  determination  shall be conclusive)  and notify the Agent that
          the  relevant  rates of  interest  referred  to in the  definition  of
          "Eurodollar  Base Rate" in Section 1.01 hereof upon the basis of which
          the rate of interest for Eurodollar  Loans for such Interest Period is
          to be determined  are not likely  adequately to cover the cost to such
          Lenders of making or  maintaining  Eurodollar  Loans for such Interest
          Period;

then the Agent shall give the Borrower and each of the Lenders which are to make
or hold such Loans prompt notice thereof,  and so long as such condition remains
in  effect,  such  Lenders  shall  be  under no  obligation  to make  additional
Eurodollar  Loans,  to Continue  Eurodollar  Loans or to Convert Base Rate Loans
into  Eurodollar  Loans and the Borrower  shall,  on the last day(s) of the then
current  Interest  Period(s) for the outstanding  Eurodollar  Loans held by such
Lenders,  either prepay such Eurodollar  Loans or Convert such Eurodollar  Loans
into Base Rate Loans in accordance with Section 2.08 hereof.

          5.03   ILLEGALITY.   Notwithstanding   any  other  provision  of  this
Agreement,  in the  event  that  it  becomes  unlawful  for  any  Lender  or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans  hereunder,  then such Lender shall promptly  notify the Borrower  thereof
(with a copy to the Agent) and such Lender's obligation to make or Continue,  or
to Convert Base Rate Loans into,  Eurodollar Loans shall be suspended until such
time as such Lender may again make and maintain  Eurodollar Loans (in which case
the provisions of Section 5.04 hereof shall be applicable).

          5.04 TREATMENT OF AFFECTED  LOANS.  If the obligation of any Lender to
make or  Continue,  or to Convert  Base Rate  Loans  into,  Eurodollar  Loans is
suspended  pursuant to Section 5.01 or 5.03  hereof,  such  Lender's  Eurodollar
Loans shall be  automatically  Converted into Base Rate Loans on the last day(s)
of the then current  Interest  Period(s) for such  Eurodollar  Loans (or, in the
case of a Conversion effected as permitted by Section 5.01(b) or 5.03 hereof, on
such earlier date as such Lender may specify to the Borrower  with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances  specified  in Section 5.01 or 5.03 hereof which gave rise to such
Conversion no longer exist:

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

                    (b) all Loans which would  otherwise be made or Continued by
          such  Lender  as  Eurodollar  Loans  shall  be made or  Converted  and
          Continued  instead  as Base Rate Loans and all Base Rate Loans of such
          Lender which would otherwise be Converted into Eurodollar  Loans shall
          be made as or shall remain as Base Rate Loans.

If such Lender gives notice to the Borrower  (with a copy to the Agent) that the
circumstances  specified  in Section  5.01 or 5.03 hereof which gave rise to the
Conversion  of such  Lender's  Eurodollar  Loans of any Class  pursuant  to this
Section 5.04 no longer exist (which such Lender  agrees to do promptly upon such
circumstances  ceasing to exist) at a time when  Eurodollar  Loans of such Class
held by other  Lenders are  outstanding,  such  Lender's Base Rate Loans of such
Class  shall  be  automatically  Converted,  on the  first  day(s)  of the  next
succeeding  Interest  Period(s) for such  outstanding  Eurodollar  Loans, to the
extent necessary so that,  after giving effect thereto,  all Loans of such Class
held by such  Lenders  and by such  Lender  are held  pro rata (as to  principal
amounts,  Types and  Interest  Periods)  in  accordance  with  their  respective
Commitments.

          5.05 COMPENSATION.  The Borrower shall pay to the Agent for account of
each Lender,  upon the request of such Lender through the Agent,  such amount or
amounts as shall be  sufficient  (in the  reasonable  opinion of such Lender) to
compensate  it for any loss,  cost or expense which such Lender  determines  are
attributable to:

                    (a)  any  payment,   prepayment   (including  any  mandatory
          prepayment) or Conversion of a Eurodollar Loan made by such Lender for
          any reason  (including,  without  limitation,  the acceleration of the
          Loans pursuant to Section 9 hereof but excluding any  prepayment  made
          as of the  Effective  Date) on a date  other  than the last day of the
          Interest Period for such Loan; or

                    (b) any failure by the Borrower  for any reason  (including,
          without  limitation,  the failure of any of the  conditions  precedent
          specified in Section 6 hereof to be  satisfied) to borrow a Eurodollar
          Loan from such Lender on the date for such borrowing  specified in the
          relevant  notice of borrowing given pursuant to Section 2.02 hereof or
          to  Convert a Base Rate  Loan into a  Eurodollar  Loan on the date for
          such Conversion, or to Continue a Eurodollar Loan on the date for such
          Continuation,  in each case as  specified  in the  relevant  notice of
          Conversion  or  Continuation,  as the case may be,  given  pursuant to
          Section  2.08(a) hereof or to prepay a Eurodollar Loan on the date for
          such prepayment  specified in the relevant notice of prepayment  given
          pursuant to Section 2.08(b) or 2.09(d), as the case may be.

Without limiting the effect of the preceding  sentence,  such compensation shall
include an amount  equal to the  excess,  if any,  of (i) the amount of interest
which otherwise would have accrued on the principal  amount so paid,  prepaid or
Converted or not  borrowed,  Continued or Converted for the period from the date
of such  payment,  prepayment,  Conversion  or failure to  borrow,  Continue  or
Convert to the last day of the then current  Interest  Period for such Loan (or,
in the case of a failure to borrow, Continue or Convert, the Interest Period for
such Loan which would have commenced on the date  specified for such  borrowing,
Continuation  or Conversion)  at the  applicable  rate of interest for such Loan
provided for herein over (ii) the  interest  component of the amount such Lender
would have bid in the London  interbank  market for Dollar  deposits  of leading
banks in  amounts  comparable  to such  principal  amount  and  with  maturities
comparable to such period (as reasonably determined by such Lender).

          5.06  ADDITIONAL  COSTS IN  RESPECT  OF  LETTERS  OF  CREDIT.  Without
limiting the  obligations of the Borrower under Section 5.01 hereof (but without
duplication),  if as a result of any Regulatory Change or any risk-based capital
guideline or other requirement  heretofore or hereafter issued by any government
or  governmental or supervisory  authority  there shall be imposed,  modified or
deemed applicable any tax, reserve, special deposit, capital adequacy or similar
requirement  against or with  respect to or measured by  reference to Letters of
Credit issued or to be issued  hereunder and the result shall be to increase the
cost to any Lender or Lenders of issuing (or  purchasing  participations  in) or
maintaining its obligation  hereunder to issue (or purchase  participations  in)
any Letter of Credit  hereunder  or reduce any amount  receivable  by any Lender
hereunder  in respect  of any  Letter of Credit  (which  increases  in cost,  or
reductions  in  amount  receivable,  shall be the  result  of such  Lender's  or
Lenders' reasonable  allocation of the aggregate of such increases or reductions
resulting from such event), then, upon demand by such Lender or Lenders (through
the Agent),  the Borrower shall pay immediately to the Agent for account of such
Lender or  Lenders,  from time to time as  specified  by such  Lender or Lenders
(through  the  Agent),  such  additional  amounts  as  shall  be  sufficient  to
compensate  such Lender or Lenders  (through the Agent) for such increased costs
or reductions in amount. A statement as to such increased costs or reductions in
amount  incurred  by any such  Lender or  Lenders,  submitted  by such Lender or
Lenders to the Borrower  shall be conclusive in the absence of manifest error as
to the amount thereof.

          5.07 TAXES.

          (a) PAYMENTS  FREE OF TAXES.  Any and all payments by or on account of
any  obligation  of the Borrower  hereunder  or under any other Credit  Document
shall be made free and clear of and without  deduction for any Indemnified Taxes
or Other Taxes;  PROVIDED  that if the Borrower  shall be required to deduct any
Indemnified  Taxes or Other Taxes from such  payments,  then (i) the sum payable
shall be increased  as  necessary  so that after making all required  deductions
(including  deductions  applicable to additional sums payable under this Section
5.07) the Agent,  Lender or  Issuing  Lender  (as the case may be)  receives  an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower  shall make such  deductions  and (iii) the Borrower shall pay
the full amount  deducted to the relevant  governmental  authority in accordance
with applicable law.

          (b) PAYMENT OF OTHER TAXES BY THE BORROWER. In addition,  the Borrower
shall pay any Other Taxes to the relevant  governmental  authority in accordance
with applicable law.

          (c) INDEMNIFICATION BY THE BORROWER.  The Borrower shall indemnify the
Agent,  each Lender and the Issuing Lender,  within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified  Taxes or Other  Taxes  imposed or asserted  on or  attributable  to
amounts  payable under this Section 5.07) paid by the Agent,  such Lender or the
Issuing Lender,  as the case may be, and any penalties,  interest and reasonable
expenses  arising  therefrom  or  with  respect  thereto,  whether  or not  such
Indemnified  Taxes or Other Taxes were correctly or legally  imposed or asserted
by the relevant governmental  authority.  A certificate as to the amount of such
payment  or  liability  delivered  to the  Borrower  by a Lender or the  Issuing
Lender,  or by the  Agent on its own  behalf  or on  behalf  of a Lender  or the
Issuing Lender, shall be conclusive absent manifest error.

          (d) EVIDENCE OF PAYMENTS.  As soon as practicable after any payment of
Indemnified  Taxes or Other Taxes by the Borrower to a  governmental  authority,
the Borrower  shall  deliver to the Agent the original or a certified  copy of a
receipt issued by such governmental authority evidencing such payment, a copy of
the return  reporting such payment or other evidence of such payment  reasonably
satisfactory to the Agent.

          (e)  FOREIGN  LENDERS.  Any  Foreign  Lender  that is  entitled  to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located,  or any treaty to which such jurisdiction is a
party,  with  respect to  payments  under this  Agreement  shall  deliver to the
Borrower  (with  a copy  to the  Agent),  at the  time or  times  prescribed  by
applicable law or reasonably requested by the Borrower,  such properly completed
and executed  documentation  prescribed  by  applicable  law as will permit such
payments to be made without  withholding or at a reduced rate.  Without limiting
the foregoing,  properly completed and executed copies of United States Internal
Revenue  Service Form W-8 (or any  successor  form)  certifying  to such Foreign
Lender's  entitlement to a complete exemption from United States withholding tax
on  payments  of  interest  to be made under this  Agreement  and under any Note
delivered to such Foreign Lender, together with a certificate to the effect that
such Foreign  Lender is not a "bank" within the meaning of Section  881(c)(3)(A)
of the Code, shall satisfy the requirements of this Section 5.07(e) with respect
to any  Foreign  Lender  that is not a "bank"  within  the  meaning  of  Section
881(c)(3)(A) of the Code.

          Section 6. CONDITIONS PRECEDENT.

          6.01 Effectiveness.  The effectiveness of this Agreement is subject to
the conditions  precedent  that, on or prior to August 30, 1998, the Agent shall
have received the following  documents (with sufficient copies for each Lender),
each of which  shall  be  reasonably  satisfactory  to each  Lender  in form and
substance:

                    (a) CORPORATE  DOCUMENTS.  Certificates  of the  appropriate
          governmental  authority as to the good standing of each Obligor in its
          jurisdiction  of  organization,  certified  copies of the  charter and
          by-laws (or equivalent documents) of each Obligor and of all corporate
          or other authority for each of them  (including,  without  limitation,
          board of  director  resolutions  and  evidence  of the  incumbency  of
          officers) with respect to the execution,  delivery and  performance of
          this Agreement and each other Transaction  Document to which each is a
          party and each other document to be delivered by any of them from time
          to time in connection  herewith and  therewith  and the  extensions of
          credit hereunder (and the Agent and each Lender may conclusively  rely
          on such  certificate  until it  receives  notice in  writing  from the
          Borrower to the contrary).

                    (b) SENIOR OFFICER'S CERTIFICATE.  A certificate of a Senior
          Officer,  dated the Effective Date, to the effect set forth in clauses
          (i) and (ii) of Section 6.02(a) hereof.

                    (c)  BORROWER  SECURITY  AGREEMENT.  The  Borrower  Security
          Agreement,  substantially  in the  form  of  Exhibit  A  hereto,  duly
          executed by the  Borrower  and the Agent.  In  addition,  the Borrower
          shall have taken such other  action as the Agent shall have  requested
          in order to perfect the  security  interests  created  pursuant to the
          Borrower Security Agreement, including, without limitation, delivering
          to the Agent (i) stock certificates with undated stock powers executed
          in blank and (ii) appropriately  completed and duly executed copies of
          Uniform  Commercial  Code  financing  statements  with  respect to the
          Property covered by the Borrower  Security  Agreement,  in proper form
          for filing in all  jurisdictions  in which such filing is necessary or
          appropriate  to establish,  perfect,  protect and preserve the rights,
          titles,  interests,  remedies,  powers,  privileges  and  Liens of the
          Agent, for the benefit of the Lenders, thereunder.

                    (d) SUBSIDIARY GUARANTOR SECURITY AGREEMENT.  The Subsidiary
          Guarantor Security Agreement, substantially in the form of Exhibit B-1
          hereto,  duly executed by each of the  Subsidiary  Guarantors  and the
          Agent. In addition,  the Subsidiary  Guarantors  shall have taken such
          other action as the Agent shall have requested in order to perfect the
          security  interests  created  pursuant  to  the  Subsidiary  Guarantor
          Security Agreement,  including, without limitation,  delivering to the
          Agent (i) stock  certificates  with undated  stock powers  executed in
          blank and (ii)  appropriately  completed and duly  executed  copies of
          Uniform  Commercial  Code  financing  statements  with  respect to the
          Property covered by the Subsidiary  Guarantor Security  Agreement,  in
          proper  form for filing in all  jurisdictions  in which such filing is
          necessary or appropriate to establish,  perfect,  protect and preserve
          the rights, titles, interests,  remedies, powers, privileges and Liens
          of the Agent, for the benefit of the Lenders, thereunder.

                    (e)  SUBSIDIARY   GUARANTEE.   The   Subsidiary   Guarantee,
          substantially in the form of Exhibit B-2 hereto, duly executed by each
          of the Subsidiary Guarantors and the Agent.

                    (f) REPAYMENT OF CERTAIN AMOUNTS.  Evidence that the accrued
          and unpaid  interest on, any "Loans" held by any Existing Lender under
          the Existing  Credit  Agreement  that are required to be prepaid as of
          the  Effective  Date under  Section 2.01  hereof,  and all accrued and
          unpaid commitment fees on the "Revolving Credit Commitments" under the
          Existing Credit Agreement held by the Existing Lenders shall have been
          paid in full.

                    (g)  OPINIONS  OF COUNSEL TO THE  OBLIGORS.  Opinions of (i)
          Wachtell,  Lipton,  Rosen & Katz,  special  New  York  counsel  to the
          Obligors and (ii) local counsel in Kansas and Missouri  (which counsel
          shall be  satisfactory  to the Agent) to certain of the  Obligors,  in
          each  case  addressed  to the  Lenders  and the  Agent  and  dated the
          Effective  Date, and in form and substance  satisfactory  to the Agent
          (and the Borrower  hereby  instructs each such counsel to deliver such
          opinion to the Lenders and the Agent).

                    (h) OPINION OF SPECIAL NEW YORK COUNSEL TO CHASE. An opinion
          of Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase,
          addressed  to the Lenders and dated the  Effective  Date,  in form and
          substance satisfactory to the Agent.

                    (i)  ENVIRONMENTAL  SURVEYS.  An  environmental  survey  and
          assessment  prepared  by  ENVIRON  Corporation  in form and  substance
          satisfactory   to  the  Agent  with  respect  to  all  material  owned
          Properties  to be  acquired  by the  Borrower  as part of the  Goodson
          Acquisition.

                    (j) CONSUMMATION OF GOODSON  ACQUISITION.  Evidence that the
          Goodson  Acquisition  shall  have  been (or  shall be  simultaneously)
          consummated in all material  respects in accordance  with the terms of
          the  Goodson  Acquisition  Agreement  (except  for any  modifications,
          supplements  or  material  waivers  thereof,  or written  consents  or
          determinations  made by the parties thereto,  that shall be reasonably
          satisfactory  to the  Majority  Lenders,  and  the  Agent  shall  have
          received a  certificate  of a Senior  Officer of the  Borrower to such
          effect and to the effect that  attached  thereto are true and complete
          copies of each  material  document  delivered in  connection  with the
          closing of the Goodson Acquisition pursuant to the Goodson Acquisition
          Agreement   (including,   but  only  to  the  extent  available  after
          reasonable efforts,  copies of each legal opinion delivered by counsel
          to the respective  sellers  thereunder to the Borrower pursuant to the
          Goodson   Acquisition   Agreement  in  connection   with  the  Goodson
          Acquisition,  together  with a  letter  from  each  such  counsel  (or
          authorization  within such  counsel's  opinion)  authorizing  reliance
          thereon by the Agent and the  Lenders,  it being  understood  that the
          Borrower shall request  counsel for the respective  sellers to deliver
          such a reliance letter).

                    (k) FINANCIAL STATEMENTS.  The financial statements referred
          to in Section 7.02 hereof.

                    (l) LIEN  SEARCHES.  The  results of a recent  search,  by a
          Person satisfactory to the Agent, of Uniform Commercial Code, judgment
          and tax lien filings in each relevant  jurisdiction  where Property of
          the Obligors (including,  without limitation,  Property to be acquired
          by  any of the  Obligors  pursuant  to  the  Goodson  Acquisition)  is
          located,  and the results of such search  shall reveal no liens on any
          of the Property of the Obligors except for Permitted Liens or Liens to
          be  discharged  on  or  prior  to  the  Effective   Date  pursuant  to
          documentation satisfactory to the Agent.

                    (m) APPROVALS.  All  governmental  and third party approvals
          necessary or, in the discretion of the Agent,  advisable in connection
          with the Goodson  Acquisition,  the financing  contemplated hereby and
          the  continuing  operations  of  the  Borrower  and  its  Subsidiaries
          (including,  without  limitation,  the ownership of the Property to be
          acquired pursuant to the Goodson Acquisition) shall have been obtained
          and be in full force and effect,  and all applicable  waiting  periods
          shall have expired without any action being taken or threatened by any
          competent authority which would restrain,  prevent or otherwise impose
          adverse  conditions  on  the  Goodson  Acquisition  or  the  financing
          thereof.

                    (n) OTHER  DOCUMENTS.  The Agent  shall have  received  such
          other certificates,  opinions,  documents and instruments  relating to
          the  transactions  contemplated  hereby as the Agent or any  Lender or
          special New York counsel to Chase may reasonably request.

The  obligation of any Lender to continue any  "Revolving  Credit  Loan",  "Term
Loan",  "NEN Acquisition Loan" or "New Britain  Acquisition  Loan", in each case
under and as defined in the Existing Credit Agreement,  as Loans hereunder or to
make any other  extension  of credit  hereunder  on the  Effective  Date is also
subject to the payment by the Borrower of such fees as the  Borrower  shall have
agreed  to pay to any  Lender or the Agent in  connection  herewith,  including,
without limitation, the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy,  special New York counsel to Chase, in connection with the  negotiation,
preparation,  execution  and  delivery of this  Agreement  and the other  Credit
Documents and the extensions of credit  hereunder (to the extent that statements
for such fees and expenses have been delivered to the Borrower).

          From and after  the  Effective  Date the  "Notes"  under the  Existing
Credit Agreement shall be deemed  cancelled,  and each Existing Lender agrees to
return such "Notes" (if any) held by it to the Borrower as soon as practicable.

          6.02 INITIAL AND SUBSEQUENT EXTENSIONS OF CREDIT.


          (a) The  obligation  of each Lender to make each Loan to be made by it
to the  Borrower  hereunder  or  otherwise  extend  any  credit to the  Borrower
(including, without limitation, the continuance of certain loans and commitments
under the Existing Credit Agreement on the Effective Date as provided in Section
2.01  hereof,  the  making of any other  extension  of credit  hereunder  on the
Effective Date, the issuance,  extension,  renewal or amendment of any Letter of
Credit,  and the  making of any  Incremental  Loan) is  subject  to the  further
conditions  precedent that both immediately  prior to the making of such Loan or
other extension of credit,  or such issuance,  extension,  renewal or amendment,
and after  giving  effect  thereto:  (i) no Default  shall have  occurred and be
continuing; and (ii) the representations and warranties made by the Borrower and
each other Obligor in each of the Credit Documents to which it is a party, shall
be true on and as of the date of the making of such Loan or other  extension  of
credit, or such issuance,  extension,  renewal or amendment, with the same force
and  effect  as if  made on and as of  such  date  (except  to the  extent  such
representations and warranties expressly relate to an earlier date). Each notice
of borrowing or request for the issuance,  extension,  renewal or amendment of a
Letter of Credit  by the  Borrower  hereunder  shall be deemed to  constitute  a
certification  to the effect  set forth in the  foregoing  clauses  (i) and (ii)
(both  as of the  date of such  notice  or  request  and,  unless  the  Borrower
otherwise  notifies  the Agent  prior to the date of such  borrowing,  issuance,
extension,  renewal or amendment,  as of the date of such  borrowing,  issuance,
extension, renewal or amendment).

          (b) In addition,  the  obligation of each  Revolving  Credit Lender to
make each  Revolving  Credit Loan to be made by it to the Borrower  hereunder on
any Borrowing Date  (including,  without  limitation,  the making of the initial
Revolving Credit Loans) is subject to the further  condition  precedent that, if
the  aggregate  principal  amount  of all  Revolving  Credit  Loans  to be  made
hereunder  on such  Borrowing  Date is in  excess  of  $20,000,000  (unless  the
proceeds of such Loans are to be, and are in fact,  used to make  repayments  of
Term Loans or Incremental Loans), the Agent shall have received a certificate of
a Senior  Officer (in form and detail  satisfactory  to the Agent) setting forth
the Total  Leverage  Ratio after giving  effect to the making of such  Revolving
Credit Loans and annexing thereto calculations of the Total Leverage Ratio.

          (c) In addition,  the  obligation of each  Revolving  Credit Lender to
make each  Revolving  Credit Loan to be made by it to the Borrower  hereunder on
any Borrowing Date  (including,  without  limitation,  the making of the initial
Revolving Credit Loans) is subject to the further condition  precedent that both
immediately  prior to such Loan and after giving effect  thereto no action shall
have been taken by the Majority  Lenders  (including,  without  limitation,  any
modification  or  amendment  to this  Agreement  or the  waiver  of any  default
hereunder)  which  action  has the  effect of causing  any  condition  precedent
specified in clauses (i) and (ii) of paragraph (a) above to be satisfied  unless
such action has been  consented to by the Majority  Revolving  Credit Lenders or
such  condition  precedent  would  otherwise be satisfied in the absence of such
action by the Majority Lenders.

          (d) In addition,  the  obligation of each  Incremental  Loan Lender to
make  each  Incremental  Loan  to  be  made  by  it to  the  Borrower  hereunder
(including,  without limitation, the making of the initial Incremental Loans) is
subject to the further condition  precedent that immediately after giving effect
to such Loan the Borrower shall be in compliance with Sections 8.11,  8.12, 8.13
and 8.14 hereof (calculated on a Pro Forma Basis as if such Incremental Loan had
been made on the first day of the relevant calculation period).


          Section 7. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to each of the Lenders and the Agent that:

          7.01 CORPORATE  EXISTENCE.  Each of the Borrower and its Subsidiaries:
(a) is a corporation duly organized, validly existing and in good standing under
the  laws of the  jurisdiction  of its  incorporation;  (b)  has  all  requisite
corporate power,  and has all material  governmental  licenses,  authorizations,
consents and approvals necessary, to own its assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do business in
all jurisdictions in which the nature of the business conducted by it makes such
qualification   necessary   and  where  failure  so  to  qualify  would  (either
individually or in the aggregate) have a Material Adverse Effect.

          7.02 FINANCIAL CONDITION.

          (a) The  audited  consolidated  statements  of  income,  shareholders'
equity and cash flows of the Borrower and its  Subsidiaries for the fiscal years
ended on December 31, 1996 and December 31, 1997,  and the related  consolidated
balance sheet of the Borrower and its  Subsidiaries as at the end of such years,
are complete and correct and fairly present the consolidated financial condition
and  results  of  operations  of the  Borrower  and its  Subsidiaries  as at the
respective dates of presentation  specified therein and the consolidated results
of  their  operations  for the  respective  periods  of  presentation  specified
therein, all in accordance with GAAP applied on a consistent basis.

          (b) The unaudited consolidated  statements of income and cash flows of
the  Borrower and its  Subsidiaries  for the fiscal  quarter  ended on March 31,
1998,  and the  related  consolidated  balance  sheet  of the  Borrower  and its
Subsidiaries as at the end of such fiscal quarter,  are complete and correct and
fairly present the consolidated financial condition and results of operations of
the Borrower and its  Subsidiaries  as at the respective  dates of  presentation
specified  therein  and the  consolidated  results of their  operations  for the
respective  periods of presentation  specified  therein,  all in accordance with
GAAP  applied  on  a  consistent   basis  (subject  to  normal   year-end  audit
adjustments).

          (c) The pro forma  consolidated  balance sheet of the Borrower and its
Subsidiaries  as at March 31,  1998,  adjusted  to give  effect  to the  Goodson
Acquisition,  the incurrence of all Indebtedness and obligations  being incurred
in connection  herewith and the repayment of Indebtedness  required to be repaid
by Section 6.01(f) hereof, was prepared using reasonable estimates and pro forma
adjustments,  and is complete and correct and fairly  presents the  consolidated
pro forma  financial  condition of the Borrower and its  Subsidiaries as at such
date.

          (d) Neither the Borrower nor any of its  Subsidiaries  had on December
31, 1997 any material  contingent  liabilities,  liabilities for taxes,  unusual
forward or long-term  commitments or unrealized or  anticipated  losses from any
unfavorable  commitments,  except as referred to or reflected or provided for in
the  consolidated  balance sheet of the Borrower and its Subsidiaries as at said
date included in the financial  statements  referred to in paragraph (a) of this
Section 7.02 and except as set forth in Schedule II hereto.  Since  December 31,
1997,  there has been no material  adverse  change in the  financial  condition,
business,  operations,  prospects,  assets, liabilities or capitalization of the
Borrower and its Subsidiaries taken as a whole.

          7.03 LITIGATION.  Except as described in Schedule II hereto, there are
no  legal  or  arbitral   proceedings  or  any  proceedings  by  or  before  any
governmental or regulatory authority or agency, now pending or (to the knowledge
of the  Borrower)  threatened  against the  Borrower or any of its  Subsidiaries
which  might  reasonably  be  expected  to be  adversely  determined  and, if so
determined, might reasonably be expected to have a Material Adverse Effect.

          7.04 NO BREACH.

          (a)  The  making  and  performance  by the  Borrower  and  each of its
Subsidiaries of the Transaction  Documents to which it is or is intended to be a
party will not  conflict  with or result in a breach of, or require  any consent
under,  (i) its  charter  or  by-laws,  (ii) any  applicable  law or  regulation
(including,  without  limitation,  Regulation U or  Regulation  X), or (iii) any
judgment,  order,  writ,  injunction  or  decree  of any  court or  governmental
authority  or agency  applicable  to or  binding on the  Borrower  or any of its
Subsidiaries, as the case may be.

          (b)  The  making  and  performance  by the  Borrower  and  each of its
Subsidiaries of each of the Transaction  Documents to which it is or is intended
to be a party as  contemplated  hereby  will not  conflict  with or  result in a
breach of, or require any consent  under,  any  agreement or instrument to which
the Borrower or any of its Subsidiaries is a party or by which it is bound or to
which it is  subject,  or  constitute  a  default  under any such  agreement  or
instrument,  or result in, or require,  the creation or  imposition  of any Lien
(other  than  the  Liens  created  by the  Security  Documents)  upon any of its
Properties pursuant to the terms of any such agreement or instrument.

          7.05 CORPORATE  ACTION.  The Borrower and each of its Subsidiaries has
all necessary corporate power and authority to execute,  deliver and perform its
obligations  under  each  of the  Transaction  Documents  to  which  it is or is
intended to be a party and the execution,  delivery and  performance  thereof by
the  Borrower  and each of its  Subsidiaries  has been  duly  authorized  by all
necessary  corporate  action on its part;  and this  Agreement has been duly and
validly executed and delivered by the Borrower and constitutes,  and each of the
other  Transaction  Documents to which the Borrower and each of its Subsidiaries
is intended to be a party when executed and delivered by it will constitute, its
legal, valid and binding  obligation,  enforceable in accordance with its terms,
except as the same may be limited by (a) bankruptcy, insolvency, reorganization,
moratorium or similar laws of general applicability affecting the enforcement of
creditors'  rights and (b) general  principles of equity  (regardless of whether
such enforceability is considered in a proceeding in equity or at law).

          7.06 APPROVALS.  No  authorizations,  approvals or consents of, and no
filings or  registrations  with,  any  governmental  or regulatory  authority or
agency are necessary for the execution,  delivery or performance by the Borrower
and each of its  Subsidiaries of the Transaction  Documents to which it is or is
intended to be a party or for the validity or enforceability  thereof except for
the authorizations,  approvals, consents, filings and/or registrations listed or
described in Schedule I hereto  (each of which has been  obtained or made and is
in full force and effect,  except as specified in said  Schedule I, and true and
complete copies of which have been furnished to the Agent).

          7.07 MARGIN STOCK. 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, whether immediate,  incidental or ultimate, of
buying  or  carrying  Margin  Stock  and no part  of the  proceeds  of any  Loan
hereunder  will be used to buy or carry any Margin Stock.  Neither the making of
any Loan hereunder,  nor the use of any of the proceeds thereof, will violate or
be inconsistent with the provisions of Regulation U or Regulation X.

          7.08 ERISA. The Borrower and the ERISA Affiliates have fulfilled their
respective obligations under the minimum funding standards of ERISA and the Code
with respect to each Plan and are in  compliance  in all material  respects with
the presently applicable provisions of ERISA and the Code, and have not incurred
any unsatisfied  liability to the PBGC or any Plan or Multiemployer  Plan (other
than an obligation to fund or make  contributions to any such Plan in accordance
with its terms and in the ordinary  course of business or an  obligation  to pay
premiums when due).

          7.09 TAXES.  The Borrower and its  Subsidiaries  have filed all United
States  Federal  income tax returns and all other material tax returns which are
required to be filed by them and has paid and will pay all taxes due pursuant to
such  returns or pursuant to any  assessment  received by the Borrower or any of
its  Subsidiaries,  except  (a) for any such tax the  payment  of which is being
contested in good faith and by proper  proceedings  and against  which  adequate
reserves are being  maintained  in  accordance  with GAAP or (b) as specified in
Schedule  II hereto.  The  charges,  accruals  and  reserves on the books of the
Borrower and its Subsidiaries in respect of taxes and other governmental charges
are, in the opinion of the Borrower, adequate.

          7.10  INVESTMENT  COMPANY  ACT.  Neither the  Borrower  nor any of its
Subsidiaries  is  an  "investment  company",  or a  company  "controlled"  by an
"investment company",  within the meaning of the Investment Company Act of 1940,
as amended.

          7.11 PUBLIC UTILITY HOLDING COMPANY ACT.  Neither the Borrower nor any
of its  Subsidiaries  is a "holding  company",  or an  "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

          7.12 COMPLIANCE  WITH LAWS. The Borrower and each of its  Subsidiaries
is in  compliance  with,  and has  obtained  all  permits,  licenses  and  other
authorizations which are required under, all applicable Federal, state and local
statutes,  laws, regulations,  ordinances,  rules,  judgments,  orders, decrees,
permits,  concessions,   grants,  franchises,  licenses,  agreements  and  other
governmental  restrictions,  except to the extent  failure  so to comply,  or to
obtain any such permit, license or authorization,  would not, individually or in
the aggregate,  have a Material  Adverse Effect.  No Default has occurred and is
continuing.

          7.13  DISCLOSURE.  To the  best  knowledge  of the  Borrower  and  its
Subsidiaries, no information,  report, financial statement, exhibit, schedule or
disclosure letter furnished in writing by or on behalf of the Borrower or any of
its  Subsidiaries to the Agent or any Lender in connection with the negotiation,
preparation or delivery of this Agreement and the other Transaction Documents or
included therein or delivered pursuant thereto  (including,  without limitation,
the  Confidential  Information  Memorandum  dated June 1998 with  respect to the
facilities  provided  herein)  contains any untrue statement of material fact or
omits or omitted to state any material  fact  necessary  to make the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.  All  written  information  furnished  after the date  hereof by the
Borrower and its  Subsidiaries  to the Agent and the Lenders in connection  with
this  Agreement  and  the  other  Transaction  Documents  and  the  transactions
contemplated  hereby and thereby will, to the best knowledge of the Borrower and
its Subsidiaries,  be true,  complete and accurate in every material respect, or
(in the case of projections)  based on reasonable  estimates,  on the date as of
which such  information  is stated or  certified.  There is no fact  (other than
matters  of a  general  economic  nature)  known to the  Borrower  or any of its
Subsidiaries  that  could  have a  Material  Adverse  Effect  that  has not been
disclosed herein, in the other Transaction  Documents or in a report,  financial
statement,  exhibit,  schedule,  disclosure letter or other writing furnished to
the Lenders for use in connection with the transactions contemplated hereby.

          7.14  SECURITY  DOCUMENTS.  On  and  after  the  Effective  Date,  the
Subsidiary  Guarantor  Security Agreement will create in favor of the Agent, for
the ratable benefit of the Lenders,  a legal,  valid,  enforceable and perfected
security interest in all right, title and interest of the Obligors party thereto
in the  collateral  described  therein,  subject  to no other  Lien,  except for
Permitted  Liens and  except  as  provided  in  Section  2(a) of the  Subsidiary
Guarantor  Security  Agreement;  PROVIDED  that with  respect  to such  security
interest in such  collateral  located in a state,  perfection  of such  security
interest  will  occur  only  after the  financing  statements  (which  financing
statements are referred to in Section  6.01(d)  hereof)  required to be filed in
such  state have been  properly  filed.  On and after the  Effective  Date,  the
Borrower  Security  Agreement will create in favor of the Agent, for the ratable
benefit of the Lenders,  a legal,  valid,  enforceable  and  perfected  security
interest  in all right,  title and  interest of the  Borrower in the  collateral
described  therein,  subject to no other Lien,  except for  Permitted  Liens and
except as provided in Section 2(a) of the Borrower Security Agreement;  PROVIDED
that with  respect to such  security  interest in such  collateral  located in a
state,  perfection of such security interest will occur only after the financing
statements  (which  financing  statements  are  referred  to in Section  6.01(c)
hereof) required to be filed in such state have been properly filed.

          7.15 ASSETS OF THE BORROWER. Each of the Borrower and its Subsidiaries
has good and  marketable  title  in fee  simple  to,  or  valid  and  subsisting
leasehold interests in, all its real property,  and good and marketable title to
all of its other  Properties,  free and  clear of Liens  (other  than  Permitted
Liens).

          7.16  MATERIAL  AGREEMENTS.  Neither  the  Borrower  nor  any  of  its
Subsidiaries  is (a) a party to any  agreement or  instrument  or subject to any
corporate  restriction  which has or is likely to have a Material Adverse Effect
or (b) in default  under any  agreement or  instrument to which any of them is a
party or by which any of them is bound or to which any of them is subject in any
manner which is,  individually or in the aggregate,  reasonably likely to have a
Material Adverse Effect.

          7.17 SOLVENCY.  After giving effect to the  transactions  contemplated
hereby and by the other  Transaction  Documents  and the making of the Loans and
other extensions of credit hereunder:

                    (a) the fair salable value of the assets of the Borrower and
          each of its Subsidiaries exceeds and will,  immediately  following the
          making of each Loan and other  extension of credit  hereunder,  exceed
          the amount  which will be  required to be paid on or in respect of its
          existing debts and other liabilities as they mature;

                    (b) neither the Borrower nor any of its Subsidiaries has, or
          will  have,  immediately  following  the making of each Loan and other
          extension of credit hereunder, unreasonably small capital to carry out
          its business as conducted or as proposed to be conducted; and

                    (c) neither the Borrower nor any of its Subsidiaries intends
          to, or believes  that it will,  incur debts  beyond its ability to pay
          such debts as they mature.

          7.18 LABOR MATTERS.  Neither the Borrower nor any of its  Subsidiaries
has  experienced  any strike,  labor dispute,  slow down or work stoppage due to
labor  disagreements which has had (during the period of five years prior to the
date hereof) or would have or is continuing to have a Material Adverse Effect.

          7.19 HAZARDOUS  MATERIALS.  The Borrower and each of its  Subsidiaries
have obtained all permits,  licenses and other authorizations which are required
under all  Environmental  Laws,  except to the  extent  failure to have any such
permit,  license or authorization  would not,  individually or in the aggregate,
have a Material Adverse Effect. The Borrower and each of its Subsidiaries are in
compliance  with the terms and  conditions  of all such  permits,  licenses  and
authorizations,   and  are  also  in  compliance  with  all  other  limitations,
restrictions,  conditions, standards, prohibitions,  requirements,  obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation,  code, plan, order, decree, judgment,  injunction,  notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply would not,  individually or in the aggregate,  have a Material
Adverse Effect.

          In addition, except as set forth in Schedule VII hereto:

                    (a)   No   notice,   notification,   demand,   request   for
          information,  citation, summons or order has been issued, no complaint
          has been filed, no penalty has been assessed and no  investigation  or
          review is pending or, to the best  knowledge  of the  Borrower and its
          Subsidiaries,  threatened  by any Person  with  respect to any alleged
          failure by the Borrower or any of its Subsidiaries to have any permit,
          license or  authorization  required in connection  with the conduct of
          the  business  of the  Borrower  or any of its  Subsidiaries  or  with
          respect   to   any   generation,    treatment,   storage,   recycling,
          transportation,  use,  disposal or Release of any Hazardous  Materials
          generated by the Borrower or any of its Subsidiaries.

                    (b) To the best of the  knowledge  of the  Borrower  and its
          Subsidiaries,  neither the  Borrower nor any of its  Subsidiaries  has
          handled any  Hazardous  Material,  other than as a  generator,  on any
          property now or  previously  owned or leased by the Borrower or any of
          its  Subsidiaries  to an  extent  that it has,  or may  reasonably  be
          expected to have, a Material  Adverse Effect and to the best knowledge
          of the Borrower and its Subsidiaries:

                              (i) no  polychlorinated  biphenyls  are present at
                    any  property  currently  owned  or any  premises  currently
                    leased by the Borrower or any of its Subsidiaries;

                              (ii)  no  friable   asbestos  is  present  at  any
                    property currently owned or any premises currently leased by
                    the Borrower or any of its Subsidiaries;

                              (iii) no  underground  storage tanks for Hazardous
                    Materials,  active or abandoned,  are now or were previously
                    operated at any property  currently owned by the Borrower or
                    any of its  Subsidiaries,  and,  with  respect  to  premises
                    currently leased by the Borrower or any of its Subsidiaries,
                    no underground storage tanks for Hazardous Materials, active
                    or  abandoned,  are now or were  previously  operated by the
                    Borrower  or any of its  Subsidiaries,  except  for  certain
                    tanks  used  for the  storage  of  heating  oil or  unleaded
                    gasoline;

                              (iv) no Hazardous Materials have been Released, in
                    a  reportable  quantity,  where  such a  quantity  has  been
                    established  by  statute,  ordinance,  rule,  regulation  or
                    order,  at, on or under any property now or previously owned
                    by the Borrower or any of its Subsidiaries; and

                              (v) no  Hazardous  Materials  have been  otherwise
                    Released  at, on or under  any  property  now or  previously
                    owned  or  any  premises  now  or  currently  leased  by the
                    Borrower  or any of its  Subsidiaries  to an extent  that it
                    has,  or may  reasonably  be  expected  to have,  a Material
                    Adverse Effect.

                    (c) Neither the  Borrower  nor any of its  Subsidiaries  has
          transported  or  arranged  for  the  transportation  of any  Hazardous
          Material to any  location  that is listed on the  National  Priorities
          List  ("NPL")   under  the   Comprehensive   Environmental   Response,
          Compensation and Liability Act of 1980, as amended ("CERCLA"),  listed
          for  possible  inclusion  on the NPL by the  Environmental  Protection
          Agency  in the  Comprehensive  Environmental  Response  and  Liability
          Information   System,   as  provided  for  by  40  C.F.R.   ss.  300.5
          ("CERCLIS"),  or on any  similar  state or  local  list or that is the
          subject  of  Federal,  state or  local  enforcement  actions  or other
          investigations  that  may lead to  Environmental  Claims  against  the
          Borrower or any of its Subsidiaries.

                    (d) No Hazardous  Material  generated by the Borrower or any
          of its Subsidiaries has been recycled, treated, stored, disposed of or
          Released by the  Borrower or any of its  Subsidiaries  at any location
          other than those  listed in Schedule  VII  hereto,  except for certain
          tanks used for the storage of heating oil or unleaded gasoline.

                    (e) No  oral  or  written  notification  of a  Release  of a
          Hazardous  Material  has been filed by or on behalf of the Borrower or
          any of its  Subsidiaries and no property now, or to the best knowledge
          of the Borrower  previously,  owned or premises leased by the Borrower
          or any of its  Subsidiaries  is listed or proposed  for listing on the
          National Priorities list promulgated pursuant to CERCLA, on CERCLIS or
          on  any  similar  state  list  of  sites  requiring  investigation  or
          clean-up.

                    (f)  There are no Liens  arising  under or  pursuant  to any
          Environmental  Laws on any of the property owned or premises leased by
          the Borrower or any of its  Subsidiaries,  and no  government  actions
          have been  taken or are in process  which  could  subject  any of such
          property  to  such  Liens  and  neither  the  Borrower  nor any of its
          Subsidiaries  would be  required  to place any  notice or  restriction
          relating to the presence of Hazardous  Materials at any property owned
          by it in any deed to such property.

                    (g) Neither the  Borrower  nor any of its  Subsidiaries  has
          retained or assumed  any  liabilities  (contingent  or  otherwise)  in
          respect  of any  Environmental  Claims  (i)  under  the  terms  of any
          contract or  agreement  or (ii) by operation of law as a result of the
          sale of assets or stock.

                    (h)  There  have  been  no   environmental   investigations,
          studies,  audits,  tests,  reviews or other  analyses  conducted by or
          which are in the possession of the Borrower or any of its Subsidiaries
          in relation to any  property or facility  now or  previously  owned or
          leased by the Borrower or any of its Subsidiaries  which have not been
          made available to the Lenders.

          7.20  SUBSIDIARIES,  ETC.  Schedule  IV  hereto  sets  forth as of the
Effective Date a complete and correct list of all  Subsidiaries  of the Borrower
(and the respective  jurisdiction of  incorporation of each such Subsidiary) and
of all Investments  held by the Borrower or any of its Subsidiaries in any joint
venture or other Person.  Except as otherwise  specified in said Schedule IV and
except for the Liens created by the Security Documents,  the Borrower owns, free
and clear of Liens,  all  outstanding  shares of each such  Subsidiary (and each
such  Subsidiary  owns, free and clear of Liens,  all outstanding  shares of its
Subsidiaries)   and  all  such  shares  are  validly  issued,   fully  paid  and
non-assessable  and the Borrower (or the respective  Subsidiary) also owns, free
and clear of Liens, all such Investments.  None of the Inactive  Subsidiaries of
the Borrower (a) is engaged in any business of any kind  whatsoever  on the date
hereof  or  (b)  has  any  Indebtedness  or  other  obligations  (contingent  or
otherwise) which, if such Inactive Subsidiary failed to pay or perform the same,
would have a Material Adverse Effect.

          7.21  COPYRIGHTS,   PERMITS  AND  TRADEMARKS.  The  Borrower  and  its
Subsidiaries  own or possess,  or have a valid  license or  sub-license  in, all
domestic and foreign letters patent,  patents,  patent applications,  patent and
know-how licenses, inventions,  technology, permits, trademark registrations and
applications, trademarks, trade names, trade secrets, service marks, copyrights,
product designs, applications,  formulae, processes, circulation and other lists
of subscribers or purchasers of newspapers  and the industrial  property  rights
("PROPRIETARY  RIGHTS") used or necessary in the operation of its  businesses in
the manner in which they are currently being conducted and which are material to
the Property,  business, financial condition,  operations,  assets, liabilities,
capitalization  or prospects of the  Borrower  and its  Subsidiaries  taken as a
whole. Neither the Borrower nor any of its Subsidiaries is aware of any existing
or threatened  infringement or  misappropriation  of any  proprietary  rights of
others by the Borrower or any of its  Subsidiaries or of any proprietary  rights
of the  Borrower or any of its  Subsidiaries  by others which is material to the
financial condition,  business,  operations,  prospects,  assets, liabilities or
capitalization of the Borrower and its Subsidiaries taken as a whole.

          7.22 CAPITALIZATION.  Set forth in Schedule VIII hereto are the number
and type of shares of authorized  capital stock of the Borrower on the Effective
Date, and the number of shares that are issued and outstanding, and each of such
issued and outstanding shares has been duly and validly issued and is fully paid
and  nonassessable.  As of the Effective  Date,  except as set forth in Schedule
VIII, (x) there are no outstanding Equity Rights with respect to the Borrower or
any of its  Subsidiaries  and (y) there are no  outstanding  obligations  of the
Borrower or any of its Subsidiaries to repurchase,  redeem, or otherwise acquire
any shares of capital stock of the Borrower or any of its  Subsidiaries  nor are
there any outstanding  obligations of the Borrower or any of its Subsidiaries to
make payments to any Person, such as "phantom stock" payments,  where the amount
thereof is calculated with reference to the fair market value or equity value of
the Borrower or any of its Subsidiaries.

          7.23 YEAR  2000.  Any  reprogramming  required  to permit  the  proper
functioning,  in and  following the year 2000,  of (a) the  Borrower's  computer
systems and (b) equipment containing embedded microchips  (including systems and
equipment  supplied by others or, to the extent  reasonably  controllable by the
Borrower,  with which the Borrower's  systems  interface) and the testing of all
such systems and equipment, as so reprogrammed, will be completed by November 1,
1999,  except to the extent that the failure to so complete  such  reprogramming
and testing could not reasonably be expected to have a Material  Adverse Effect.
The cost to the Borrower of such reprogramming and testing and of the reasonably
foreseeable  consequences of year 2000 to the Borrower (including  reprogramming
errors and the  failure of others'  systems or  equipment)  will not result in a
Default  or a Material  Adverse  Effect.  Except  for such of the  reprogramming
referred to in the  preceding  sentence as may be  necessary,  the  computer and
management  information  systems of the Borrower and its  Subsidiaries  are and,
with upgrading, maintenance and capital expenditures, will continue for the term
of this  Agreement  to be,  sufficient  to permit the  Borrower  to conduct  its
business without a Material Adverse Effect.

          Section  8.  COVENANTS  OF  THE  BORROWER.  So  long  as  any  of  the
Commitments  are in effect  and until  payment in full of the  principal  of and
interest on all Loans, the  reimbursement of all LC Disbursements  and all other
amounts  payable by the Borrower  hereunder and the termination or expiration of
all Letters of Credit:

          8.01 FINANCIAL STATEMENTS;  CONTINUING DISCLOSURE.  The Borrower shall
deliver to the Agent:

                    (a) as soon as  available  and in any  event  within 50 days
          after  the end of each of the  first  three  fiscal  quarters  of each
          fiscal year of the Borrower, consolidated and consolidating statements
          of income of the Borrower and its Subsidiaries for such fiscal quarter
          and for the period from the beginning of the respective fiscal year to
          the end of such  fiscal  quarter,  and the  related  consolidated  and
          consolidating  balance sheets of the Borrower and its  Subsidiaries as
          at the end of such fiscal quarter,  setting forth (in the case of such
          consolidated   statements   of   income)  in   comparative   form  the
          corresponding   consolidated  figures  for  the  corresponding  fiscal
          quarter  in the  preceding  fiscal  year  and  (in  the  case  of such
          consolidated  balance  sheet) in  comparative  form the  corresponding
          consolidated  balance sheet figures as at the end of the corresponding
          fiscal  quarter  in  the  preceding  fiscal  year,  accompanied  by  a
          certificate of a Senior Officer,  which  certificate  shall state that
          said financial  statements fairly present the financial  condition and
          results  of  operations  of  the  Borrower  and  its  Subsidiaries  in
          accordance with generally accepted accounting principles, consistently
          applied,  as at the end of, and for, the relevant  period  (subject to
          normal year-end audit adjustments);

                    (b) as soon as  available  and in any event  within 105 days
          after  the  end  of  each  fiscal  year  of  the   Borrower,   audited
          consolidated statements of income, shareholders' equity and cash flows
          of the  Borrower  and its  Subsidiaries  and  unaudited  consolidating
          statements  of income of the  Borrower and its  Subsidiaries  for such
          year, and the related consolidated and consolidating  balance sheet of
          the Borrower and its Subsidiaries as at the end of such year,  setting
          forth in each case in comparative form the  corresponding  figures for
          the preceding  fiscal year, and  accompanied by (i) an opinion on such
          consolidated  financial  statements of  independent  certified  public
          accountants of recognized national standing, which opinion shall state
          that  said  financial   statements  fairly  present  the  consolidated
          financial  condition and results of operations of the Borrower and its
          Subsidiaries  as at the end of,  and  for,  such  fiscal  year,  and a
          certificate   of  such   accountants   stating  that,  in  making  the
          examination  necessary for their opinion,  they obtained no knowledge,
          except as specifically  stated,  of any Default and (ii) a certificate
          of  a  Senior  Officer,   which  certificate  shall  state  that  such
          consolidating  financial statements  consolidated financial statements
          fairly present the  consolidating  financial  condition and results of
          operations of the Borrower and its  Subsidiaries  in  accordance  with
          generally accepted accounting principles,  consistently applied, as at
          the end of, and for, such fiscal year;

                    (c) promptly upon their  becoming  available,  copies of all
          registration  statements and regular periodic  reports,  if any, which
          the  Borrower  or any of its  Subsidiaries  shall  have filed with the
          Securities  and  Exchange   Commission  (or  any  governmental  agency
          substituted therefor) or any national securities exchange;

                    (d)  promptly  upon  the  mailing   thereof  to  the  public
          shareholders,  if  any,  of the  Borrower  or any of its  Subsidiaries
          generally,  copies  of all  financial  statements,  reports  and proxy
          statements  so mailed  (and,  in the case of the annual  report of the
          Borrower, with sufficient copies for each of the Lenders);

                    (e)  within  ten  days  after  the  Borrower  or  any of its
          Subsidiaries  knows or has reason to believe that any of the events or
          conditions  specified below with respect to any Plan or  Multiemployer
          Plan has occurred or exists,  a statement signed by a senior financial
          officer of the Borrower setting forth details respecting such event or
          condition  and the  action,  if any,  that the  Borrower  or its ERISA
          Affiliate  proposes to take with  respect  thereto  (and a copy of any
          report or  notice  required  to be filed  with or given to PBGC by the
          Borrower  or  an  ERISA  Affiliate  with  respect  to  such  event  or
          condition):

                              (i) any  reportable  event,  as defined in Section
                    4043(b) of ERISA and the regulations issued thereunder, with
                    respect to a Plan,  as to which  PBGC has not by  regulation
                    waived the  requirement of Section  4043(a) of ERISA that it
                    be notified  within 30 days of the  occurrence of such event
                    (PROVIDED  that  a  failure  to  meet  the  minimum  funding
                    standard of Section 412 of the Code or Section 302 of ERISA,
                    including,  without  limitation,  the  failure to make on or
                    before its due date a  required  installment  under  Section
                    412(m) of the Code or  Section  302(e) of ERISA,  shall be a
                    reportable  event  regardless of the issuance of any waivers
                    in  accordance  with  Section  412(d) of the Code);  and any
                    request for a waiver  under  Section  412(d) of the Code for
                    any Plan;

                              (ii) the distribution  under Section 4041 of ERISA
                    of a notice of intent to  terminate  any Plan or any  action
                    taken by the Borrower or an ERISA Affiliate to terminate any
                    Plan;

                              (iii) the institution by PBGC of proceedings under
                    Section  4042  of  ERISA  for  the  termination  of,  or the
                    appointment  of a trustee to  administer,  any Plan,  or the
                    receipt by the  Borrower or any ERISA  Affiliate of a notice
                    from a Multiemployer Plan that such action has been taken by
                    PBGC with respect to such Multiemployer Plan;

                              (iv) the  complete  or partial  withdrawal  from a
                    Multiemployer  Plan by the  Borrower or any ERISA  Affiliate
                    that  results in  liability  under  Section  4201 or 4204 of
                    ERISA  (including  the  obligation  to satisfy any secondary
                    liability as a result of a purchaser default) or the receipt
                    by the  Borrower  or any ERISA  Affiliate  of notice  from a
                    Multiemployer   Plan  that  it  is  in   reorganization   or
                    insolvency pursuant to Section 4241 or 4245 of ERISA or that
                    it intends to  terminate  or has  terminated  under  Section
                    4041A of ERISA;

                              (v) the institution of a proceeding by a fiduciary
                    of any Multiemployer  Plan against the Borrower or any ERISA
                    Affiliate to enforce Section 515 of ERISA,  which proceeding
                    is not dismissed within 30 days; and

                              (vi)  the  adoption  of an  amendment  to any Plan
                    that,  pursuant to Section 401(a)(29) of the Code or Section
                    307 of ERISA,  would result in the loss of tax-exempt status
                    of the trust of which such Plan is a part if the Borrower or
                    an ERISA Affiliate  fails to timely provide  security to the
                    Plan in accordance with the provisions of said Sections;

                    (f) promptly  after the Borrower knows or has reason to know
          that any Default has occurred, a notice (which notice shall state that
          it is a "Notice of Default") of such  Default  describing  the same in
          reasonable detail and, together with such notice or as soon thereafter
          as  possible,  a  description  of the action  taken and proposed to be
          taken with respect thereto;

                    (g)  promptly  upon receipt  thereof,  a copy of any notice,
          filing, claim or other document received by the Borrower in respect of
          any Subordinated Debt or Convertible Debt of the Borrower;

                    (h) promptly  after the  occurrence  thereof,  notice of any
          strike,  labor  dispute,  slow  down or work  stoppage  due to a labor
          disagreement  (or any  material  development  regarding  any  thereof)
          affecting  the  Borrower  or  any  of  its  Subsidiaries  which  could
          reasonably be expected,  individually  or in the aggregate,  to have a
          Material Adverse Effect;

                    (i) promptly upon obtaining  actual  knowledge of any claim,
          demand, action, event, condition or report or investigation  involving
          any  potential  or  actual  liability  of the  Borrower  or any of its
          Subsidiaries  arising in connection with (i) any noncompliance with or
          violation  of  the  requirements  of  any   Environmental   Law  which
          individually or in the aggregate could  reasonably be expected to have
          a Material  Adverse Effect or (ii) a Release or threatened  Release of
          any Hazardous Materials into the environment which could reasonably be
          expected, individually or in the aggregate, to have a Material Adverse
          Effect or which Release the Borrower or one of its Subsidiaries  would
          have  a  duty  to  report  to  a  governmental   authority  under  any
          Environmental  Law and which  Release  could  reasonably  be expected,
          individually or in the aggregate, to have a Material Adverse Effect, a
          notice describing the same in reasonable detail;

                    (j) each time the Borrower furnishes a statement pursuant to
          clause (a) or clause (b) of this  Section  8.01, a report (in the form
          heretofore furnished to the Agent) describing in reasonable detail the
          circulation  volume and advertising  lineage for each of the newspaper
          properties of the Borrower and its Subsidiaries for the fiscal quarter
          or fiscal year covered by such statement; and

                    (k) from time to time such other  information  regarding (i)
          the business, affairs or financial condition of the Borrower or any of
          its  Subsidiaries   (including,   without  limitation,   any  Plan  or
          Multiemployer Plan and any reports or other information required to be
          filed under  ERISA),  (ii)  compliance  by the Borrower and any of its
          Subsidiaries with its obligations  under any Transaction  Document and
          (iii) such other  matters  relating to the  transactions  contemplated
          hereby, as any Lender or the Agent may reasonably request.

The Borrower will furnish to the Agent (with  sufficient  copies for each of the
Lenders),  each time it furnishes financial statements pursuant to clause (a) or
(b) of this Section 8.01, a Compliance Certificate,  duly completed and executed
by a Senior  Officer  (i) to the effect  that no  Default  has  occurred  and is
continuing  (or, if any Default has occurred and is  continuing,  describing the
same in  reasonable  detail and  describing  the action taken and proposed to be
taken with  respect  thereto) and (ii) setting  forth in  reasonable  detail the
computations  necessary to determine  whether the Borrower is in compliance with
Sections 8.05(b)(v) and (vi), 8.05(c)(ii), (iii), (vii) and (viii), 8.06(h), (i)
and (j), 8.07(d) and (e), 8.08(e),  8.09, 8.10, 8.11, 8.12, 8.13, 8.14, 8.20 and
8.26 hereof as of the end of the respective fiscal quarter or fiscal year.

          8.02 LITIGATION. The Borrower will promptly give to each Lender notice
of all legal or arbitral  proceedings,  and of all  proceedings by or before any
governmental or regulatory  authority or agency, and any material development in
respect of such legal or other proceedings, affecting the Borrower or any of its
Subsidiaries,  except  proceedings  which,  if adversely  determined,  could not
reasonably be expected,  individually  or in the  aggregate,  to have a Material
Adverse Effect.

          8.03 CORPORATE EXISTENCE,  ETC. The Borrower will, and will cause each
of its Subsidiaries to:

                    (a) preserve and maintain its corporate existence and all of
          its material rights,  privileges and franchises (provided that nothing
          in  this  Section  8.03  shall  prohibit  any  transaction   expressly
          permitted by Section 8.05 hereof);

                    (b) comply with the  requirements  of all  applicable  laws,
          rules,   regulations   and  orders  of   governmental   or  regulatory
          authorities  if  failure  to  comply  with  such  requirements   could
          reasonably be expected,  individually  or in the aggregate,  to have a
          Material Adverse Effect;

                    (c)  pay  and   discharge   all   taxes,   assessments   and
          governmental  charges  or  levies  imposed  on it or on its  income or
          profits or on any of its Property prior to the date on which penalties
          attach thereto,  except for any such tax,  assessment,  charge or levy
          the  payment of which is being  contested  in good faith and by proper
          proceedings and against which adequate  reserves are being  maintained
          in  accordance   with  GAAP  or  except  to  the  extent  such  taxes,
          assessments,  charges  and  levies do not  exceed  $50,000  (as to the
          Borrower and its Subsidiaries) in the aggregate;

                    (d)  maintain  all of its  Property  used or  useful  in its
          business in good working order and  condition,  ordinary wear and tear
          excepted;

                    (e) keep  proper  books of record and account in which full,
          true  and  correct   entries   shall  be  made  of  all  dealings  and
          transactions  in relation to its business and  activities,  and permit
          representatives  of any Lender or the Agent,  during  normal  business
          hours, to examine,  copy and make extracts from its books and records,
          to inspect its  Properties,  and to discuss its  business  and affairs
          with its  officers and  independent  public  accountants  (and by this
          provision  the Borrower  authorizes  said  accountants  to discuss the
          business and affairs of the Borrower with such  representatives),  all
          to the extent reasonably requested by such Lender or the Agent, as the
          case may be; and

                    (f) hold a meeting at least annually with the Lenders (if so
          requested  by the  Agent) to  discuss  such  matters  relating  to the
          financial  condition  of the Borrower  and its  Subsidiaries  and such
          other matters as any of the Lenders shall reasonably request.

          8.04 INSURANCE.


                    (a)  The  Borrower   will,   and  will  cause  each  of  its
          Subsidiaries  to,  keep  insured by  financially  sound and  reputable
          insurers all Property of a character  usually  insured by corporations
          engaged in the same or similar  business  similarly  situated  against
          loss or damage of the kinds  and in the  amounts  customarily  insured
          against by such  corporations  and carry such  other  insurance  as is
          usually  carried  by  such  corporations.   Each  policy  of  property
          insurance   required  to  be   maintained  by  the  Borrower  and  its
          Subsidiaries  under  this  Section  8.04  shall name the Agent as loss
          payee or  additional  insured  (but only to the extent that any single
          loss shall exceed $100,000 (as to the Borrower and its  Subsidiaries))
          and shall provide that it will not be canceled or reduced,  or allowed
          to lapse without renewal,  except after not less than 30 days' written
          notice to the Agent,  nor by any  occupancy or use of any Property for
          purposes  more  hazardous  than  permitted  by such  policy nor by any
          foreclosure  or  other  proceedings  relating  to such  Property.  The
          Borrower  will advise the Agent  promptly of any policy  cancellation,
          reduction or material amendment.

                    (b) After the Effective  Date, upon the request of the Agent
          at any time or from time to time,  not  later  than 15  Business  Days
          prior to the  termination or expiry date of any insurance  required to
          be maintained by the Borrower  hereunder the Borrower shall deliver to
          the Agent certificates of insurance evidencing that such insurance has
          been  renewed,  subject only to the payment of premiums as they become
          due. In addition, the Borrower will not modify in any material respect
          any of the  provisions  of any  policy  with  respect to  casualty  or
          liability  insurance  without  delivering  the  original  copy  of the
          endorsement reflecting such modification to the Agent and, if required
          by the Agent in writing,  accompanied  by a written report of any firm
          of independent  insurance brokers of nationally  recognized  standing,
          stating  that,  in  their  opinion,   such  policy  (as  so  modified)
          adequately  protects the interests of the Lenders and the Agent, is in
          compliance  with the provisions of this Section 8.04 and is comparable
          in all  respects  with  insurance  carried by  responsible  owners and
          operators  of similar  Properties.  The  Borrower  shall not obtain or
          carry separate  insurance  concurrent in form or  contributing  in the
          event of loss with that required by this Section 8.04 unless the Agent
          is the named insured thereunder,  with loss payable as provided herein
          (but only to the  extent  any  single  loss  thereunder  shall  exceed
          $100,000  (as to the  Borrower  and its  Subsidiaries)).  The Borrower
          shall  immediately   notify  the  Agent  whenever  any  such  separate
          insurance is obtained and shall deliver to the Agent  certificates  of
          insurance evidencing the same.

          8.05 PROHIBITION OF FUNDAMENTAL CHANGES.

                    (a) The Borrower will not, nor will the Borrower  permit any
          of its  Subsidiaries  to,  enter  into any  transaction  of  merger or
          consolidation  or  amalgamation,  or  liquidate,  wind up or  dissolve
          itself (or suffer any liquidation or dissolution), except that:

                              (i) any  Subsidiary  of the Borrower may be merged
                    or  consolidated  with or  into  (x)  the  Borrower,  if the
                    Borrower shall be the  continuing or surviving  corporation,
                    or (y) any other  Subsidiary of the Borrower;  PROVIDED that
                    (x) if any such transaction shall be between a Subsidiary of
                    the Borrower and a Wholly Owned  Subsidiary of the Borrower,
                    the  Wholly  Owned  Subsidiary  shall be the  continuing  or
                    surviving  entity  and  if any  such  transaction  shall  be
                    between a Subsidiary  of the  Borrower  that is a Subsidiary
                    Guarantor  and a Subsidiary  of the  Borrower  that is not a
                    Subsidiary  Guarantor,  the Subsidiary  that is a Subsidiary
                    Guarantor  shall be the  continuing or surviving  entity and
                    (y)  if  any  such  merger  or  consolidation  involves  any
                    Inactive  Subsidiary and another  Subsidiary  that is not an
                    Inactive  Subsidiary,  the  continuing  or surviving  entity
                    thereof shall not be an Inactive  Subsidiary for purposes of
                    this Agreement;

                              (ii) the capital stock of each Inactive Subsidiary
                    of the  Borrower  may be Disposed of and each such  Inactive
                    Subsidiary may be liquidated; and

                              (iii)  JRN and INS may merge  into or  consolidate
                    with the Borrower or any of its Subsidiaries,  PROVIDED that
                    the Borrower, if it is a party to such transaction, shall be
                    the continuing or surviving entity.

                    (b) The Borrower will not, nor will the Borrower  permit any
          of its  Subsidiaries  to,  acquire any business or assets from, or any
          capital  stock or other  ownership  interest  of, or be a party to any
          Acquisition of, any Person other than:

                              (i) purchases by the Borrower and its Subsidiaries
                    in the ordinary  course of business of  inventory  and other
                    assets  to be  sold  or  used  in  the  ordinary  course  of
                    business;

                              (ii) Investments permitted by Section 8.08 hereof;

                              (iii)  Capital  Expenditures  made as permitted by
                    Section 8.10 hereof;

                              (iv) the Goodson Acquisition;

                              (v)  Acquisitions by the Borrower of Newspapers in
                    the United  States,  PROVIDED that (x) no Acquisition of any
                    Newspaper  may be made pursuant to this clause (v) if, after
                    giving effect thereto,  either (A) cash flow attributable to
                    such Newspaper's commercial printing business, if any, would
                    have  contributed more than 15% of Cash Flow of the Borrower
                    and its Subsidiaries  (calculated on a Pro Forma Basis after
                    giving  effect  to such  Acquisition)  for the  period of 12
                    complete  calendar  months ended on, or most recently  ended
                    prior to, the date of the  consummation of such  Acquisition
                    or (B) cash flow  attributable to daily newspapers and their
                    related  publications,  mail  products,  services  and other
                    businesses (including,  without limitation, on-line ventures
                    and  audiotext)  and any other related  activities,  if any,
                    would  have  contributed  less  than 50% of Cash Flow of the
                    Borrower  and its  Subsidiaries  (calculated  on a Pro Forma
                    Basis  after  giving  effect  to such  Acquisition)  for the
                    period  of 12  complete  calendar  months  ended on, or most
                    recently  ended  prior to, the date of the  consummation  of
                    such Acquisition,  (y) no Default shall have occurred and be
                    continuing  or  would  occur  after  giving  effect  to such
                    Acquisition  and (z) at least 5  Business  Days prior to the
                    consummation  of such  Acquisition  (or, if any  adjustments
                    with respect thereto  contemplated in the definition of "Pro
                    Forma Basis" require the consent of the Majority Lenders, at
                    least 10  Business  Days  prior to such  consummation),  the
                    Agent shall have received a certificate  of a Senior Officer
                    certifying as to the foregoing and containing  calculations,
                    in form and detail satisfactory to the Agent,  demonstrating
                    in  reasonable  detail  compliance  with this clause (v) and
                    Sections 8.07, 8.11, 8.12, 8.13 and 8.14 hereof  (calculated
                    on  a  Pro  Forma   Basis  after   giving   effect  to  such
                    Acquisition);

                              (vi)  Acquisitions  by the Borrower of  Newspapers
                    outside  of  the   United   States   and   Acquisitions   of
                    non-Newspaper   Properties,   PROVIDED   that  (x)  no  such
                    Acquisition  may be made  pursuant  to this  clause (vi) if,
                    after   giving   effect   thereto,   either  (A)  cash  flow
                    attributable  to the  Properties so Acquired,  if any, would
                    have  contributed more than 20% of Cash Flow of the Borrower
                    and its Subsidiaries  (calculated on a Pro Forma Basis after
                    giving  effect  to such  Acquisition)  for the  period of 12
                    complete  calendar  months ended on, or most recently  ended
                    prior to, the date of the  consummation of such  Acquisition
                    or (B) cash flow  attributable to daily newspapers and their
                    related  publications,  mail  products,  services  and other
                    businesses (including,  without limitation, on-line ventures
                    and  audiotext)  and any other related  activities,  if any,
                    would  have  contributed  less  than 50% of Cash Flow of the
                    Borrower  and its  Subsidiaries  (calculated  on a Pro Forma
                    Basis  after  giving  effect  to such  Acquisition)  for the
                    period  of 12  complete  calendar  months  ended on, or most
                    recently  ended  prior to, the date of the  consummation  of
                    such Acquisition,  (y) no Default shall have occurred and be
                    continuing  or  would  occur  after  giving  effect  to such
                    Acquisition  and (z) at least 5  Business  Days prior to the
                    consummation  of such  Acquisition  (or, if any  adjustments
                    with respect thereto  contemplated in the definition of "Pro
                    Forma Basis" require the consent of the Majority Lenders, at
                    least 10  Business  Days  prior to such  consummation),  the
                    Agent shall have received a certificate  of a Senior Officer
                    certifying as to the foregoing and containing  calculations,
                    in form and detail satisfactory to the Agent,  demonstrating
                    in reasonable  detail  compliance  with this clause (vi) and
                    Sections 8.07, 8.11, 8.12, 8.13 and 8.14 hereof  (calculated
                    on  a  Pro  Forma   Basis  after   giving   effect  to  such
                    Acquisition); and

                              (vii) the  Borrower  and each of its  Subsidiaries
                    may acquire  any  business  or assets  from,  or any capital
                    stock or other ownership  interests of, or be a party to any
                    Acquisition of, each other.

                    (c) The Borrower will not, nor will the Borrower  permit any
          of its  Subsidiaries  to,  Dispose of any of its  Property or business
          (including,   without  limitation,  any  capital  stock  of  any  such
          Subsidiary, receivables and leasehold interests), whether now owned or
          hereafter acquired, except:

                              (i) any  inventory or other assets  Disposed of in
                    the ordinary course of business;

                              (ii)  obsolete  or  worn-out  property,  tools  or
                    equipment  no longer used or useful in its  business so long
                    as the amount  thereof  Disposed  of in any single  calendar
                    year by the Borrower and its  Subsidiaries  shall not have a
                    fair market value in excess of $1,000,000;

                              (iii) any other  assets of the  Borrower or any of
                    its Subsidiaries  Disposed of for cash in an amount not less
                    than their fair  market  value so long as (w) the  aggregate
                    fair market value of all assets  Disposed of by the Borrower
                    and its  Subsidiaries  (A) during  any fiscal  year does not
                    exceed 15% of Cash Flow of the Borrower and its Subsidiaries
                    for such  fiscal year or (B) after the  Effective  Date does
                    not exceed 30% of  cumulative  Cash Flow of the Borrower and
                    its  Subsidiaries  for the period  from the  Effective  Date
                    through  the end of the  fiscal  quarter  ended  on, or most
                    recently  ended  prior to, the date of the  consummation  of
                    such   Disposition,   (x)  after   giving   effect  to  such
                    Disposition,  Cash Flow attributable to daily newspapers and
                    their  related  publications,  mail  products,  services and
                    other businesses  (including,  without  limitation,  on-line
                    ventures and audiotext) and any other related activities, if
                    any, would have contributed at least 50% of Cash Flow of the
                    Borrower  and its  Subsidiaries  (calculated  on a Pro Forma
                    Basis  after  giving  effect  to such  Disposition)  for the
                    period  of 12  complete  calendar  months  ended on, or most
                    recently  ended  prior to, the date of the  consummation  of
                    such Disposition,  (y) no Default shall have occurred and be
                    continuing  or  would  occur  after  giving  effect  to such
                    Disposition  and (z) at least 5  Business  Days prior to the
                    consummation  of such  Disposition  (or, if any  adjustments
                    with respect thereto  contemplated in the definition of "Pro
                    Forma Basis" require the consent of the Majority Lenders, at
                    least 10  Business  Days  prior to such  consummation),  the
                    Agent shall have received a certificate  of a Senior Officer
                    certifying as to the foregoing and containing  calculations,
                    in form and detail satisfactory to the Agent,  demonstrating
                    compliance  with this clause (iii) and Sections 8.07,  8.11,
                    8.12, 8.13 and 8.14 hereof  (calculated on a Pro Forma Basis
                    after giving effect to such Disposition);

                              (iv)  assets  of  the   Borrower  or  any  of  its
                    Subsidiaries   consisting  of  cash,  Cash  Equivalents  and
                    Inter-company Notes (as defined in the Subsidiary  Guarantor
                    Security  Agreement)  Disposed of by the  Borrower or any of
                    its Subsidiaries to each other;

                              (v) the Borrower and its  Subsidiaries may Dispose
                    of any of  its  Property  or  business  (including,  without
                    limitation,  any  capital  stock  of  any of  such  Person's
                    Subsidiaries,  receivables and leasehold interests), whether
                    now owned or hereafter acquired, to each other;

                              (vi) the Borrower and its Subsidiaries may Dispose
                    of all or any  part  of the  assets  identified  on  Annex 2
                    hereto for cash in an amount not less than their fair market
                    value so long as the  aggregate  fair  market  value (net of
                    Disposition-related  costs) of the assets so  Disposed of by
                    the   Borrower   and  its   Subsidiaries   does  not  exceed
                    $5,000,000;

                              (vii)  the  Borrower  and  its   Subsidiaries  may
                    Dispose of (x) the capital stock of any of their  respective
                    Subsidiaries  substantially  all of the  business  of  which
                    consists  of  the  sale,  development,  installation  and/or
                    maintenance  of  computer  hardware or software or of any of
                    the assets of any such  Subsidiary  or (y) any of the assets
                    of any  such  Subsidiary  used  in its  commercial  printing
                    activities  and  not  necessary  for  the  operation  of any
                    Newspaper,  PROVIDED that (A) each such Disposition shall be
                    for cash in an amount not less than the fair market value of
                    the stock or assets so Disposed of, (B) after giving  effect
                    to each such  Disposition,  Cash Flow  attributable to daily
                    newspapers  and their related  publications,  mail products,
                    services   and   other   businesses   (including,    without
                    limitation,  on-line  ventures and  audiotext) and any other
                    related activities,  if any, would have contributed at least
                    50% of  Cash  Flow  of the  Borrower  and  its  Subsidiaries
                    (calculated on a Pro Forma Basis after giving effect to such
                    Disposition)  for the period of 12 complete  calendar months
                    ended on, or most  recently  ended prior to, the date of the
                    consummation of such Disposition,  (C) no Default shall have
                    occurred  and be  continuing  or would  occur  after  giving
                    effect to such  Disposition and (D) at least 5 Business Days
                    prior to the  consummation of such  Disposition  (or, if any
                    adjustments   with  respect  thereto   contemplated  in  the
                    definition  of "Pro Forma Basis"  require the consent of the
                    Majority  Lenders,  at least 10 Business  Days prior to such
                    consummation),  the Agent shall have  received a certificate
                    of a  Senior  Officer  certifying  as to the  foregoing  and
                    containing calculations,  in form and detail satisfactory to
                    the Agent,  demonstrating  compliance with this clause (vii)
                    and  Sections  8.07,   8.11,  8.12,  8.13  and  8.14  hereof
                    (calculated on a Pro Forma Basis after giving effect to such
                    Disposition); and

                              (viii)  the  Borrower  and  its  Subsidiaries  may
                    Dispose   of  any  one  or  more   Newspapers   and/or   any
                    non-Newspaper   Properties  in  exchange  for  one  or  more
                    Newspapers  having a value  (together  with the value of any
                    other consideration  received in connection therewith) equal
                    to or greater than the value of the  Properties  so Disposed
                    of, as determined in good faith by the board of directors of
                    the  Borrower  or  such  Subsidiary,  as the  case  may  be;
                    PROVIDED that (x) after giving effect to each such exchange,
                    Cash Flow attributable to daily newspapers and their related
                    publications,  mail products,  services and other businesses
                    (including,   without   limitation,   on-line  ventures  and
                    audiotext) and any other related  activities,  if any, would
                    have  contributed  at least 50% of Cash Flow of the Borrower
                    and its Subsidiaries  (calculated on a Pro Forma Basis after
                    giving  effect  to such  Disposition)  for the  period of 12
                    complete  calendar  months ended on, or most recently  ended
                    prior to, the date of the consummation of such exchange, (y)
                    no Default  shall have  occurred and be  continuing or would
                    occur after  giving  effect to such  Disposition  and (z) at
                    least 5  Business  Days  prior to the  consummation  of such
                    Disposition  (or, if any  adjustments  with respect  thereto
                    contemplated  in the definition of "Pro Forma Basis" require
                    the consent of the  Majority  Lenders,  at least 10 Business
                    Days  prior to such  consummation),  the  Agent  shall  have
                    received a certificate of a Senior Officer  certifying as to
                    the  foregoing  and  containing  calculations,  in form  and
                    detail satisfactory to the Agent,  demonstrating  compliance
                    with this clause (viii) and Sections 8.07,  8.11, 8.12, 8.13
                    and 8.14  hereof  (calculated  on a Pro  Forma  Basis  after
                    giving effect to such Disposition).

          8.06 LIMITATION ON LIENS. The Borrower will not, nor will the Borrower
permit any of its Subsidiaries to, create,  incur, assume or suffer to exist any
Lien upon any of its  Property  (including,  without  limitation,  the  Property
covered by the Security  Documents),  whether now owned or  hereafter  acquired,
except:

                    (a) Liens created by the Security Documents;

                    (b) Liens on assets of its Subsidiaries existing on the date
          hereof and listed in Schedule V hereto;

                    (c) Liens for taxes, assessments or charges imposed on it or
          any of its property by any governmental authority not yet due or which
          are being  contested in good faith and by  appropriate  proceedings if
          adequate  reserves with respect thereto are maintained on the books of
          the  Borrower  or any of its  Subsidiaries,  as the  case  may be,  in
          accordance with GAAP;

                    (d) statutory  Liens of carriers,  warehousemen,  mechanics,
          materialmen,  repairmen,  or other like Liens  arising in the ordinary
          course of business  which are not overdue for a period of more than 30
          days or which are being  contested  in good  faith and by  appropriate
          proceedings;

                    (e)  pledges  or  deposits  under   worker's   compensation,
          unemployment insurance and other social security legislation;

                    (f) Liens (other than any Lien imposed by ERISA) incurred on
          deposits to secure the  performance of bids,  trade  contracts  (other
          than for borrowed money), leases,  statutory  obligations,  surety and
          appeal bonds,  performance bonds and  return-of-money  bonds and other
          obligations  of a like  nature  incurred  in the  ordinary  course  of
          business;

                    (g) easements, rights-of-way, restrictions and other similar
          encumbrances   incurred  in  the  ordinary   course  of  business  and
          encumbrances consisting of zoning restrictions,  easements,  licenses,
          restrictions  on the use of Property or minor  imperfections  in title
          thereto,  all of which, in the aggregate,  are not material in amount,
          and which do not in any case materially  detract from the value of the
          Property  subject  thereto or materially  interfere  with the ordinary
          conduct of the business of the Borrower or any of its Subsidiaries;

                    (h) Liens  (except  in the case of real  property)  securing
          Indebtedness  incurred by the Borrower or any of its  Subsidiaries  to
          finance the purchase of Property  used in the  ordinary  course of its
          business in an aggregate  amount not exceeding  $10,000,000 (as to the
          Borrower and its Subsidiaries) at any one time outstanding, so long as
          no such Lien shall cover any other Property or secure any Indebtedness
          other than the Indebtedness incurred to purchase such Property;

                    (i) Liens  (except  in the case of real  property)  securing
          additional Indebtedness or other obligations of the Borrower or any of
          its Subsidiaries in an aggregate amount not exceeding  $10,000,000 (as
          to the Borrower and its Subsidiaries) at any one time outstanding;

                    (j) Liens securing Capital Lease Obligations permitted under
          Section 8.07(d) hereof, PROVIDED that (i) the aggregate amount of such
          obligations  so  secured  under  this  clause  (j)  shall  not  exceed
          $50,000,000 at any one time outstanding  (MINUS the aggregate value of
          the Property  subject at such time to sale and leaseback  arrangements
          permitted under Section 8.17 hereof) and (ii) such Liens encumber only
          the respective  Properties  subject to the respective leases (or other
          agreements) governing or evidencing such Capital Lease Obligations;

                    (k) any extension,  renewal or replacement of the foregoing,
          PROVIDED  that the Liens  permitted  by this  clause  (k) shall not be
          spread to cover any additional  Indebtedness or Property (other than a
          substitution of like Property); and

                    (l) until the  Effective  Date,  the Liens in respect of the
          Existing Credit Agreement.

          8.07 INDEBTEDNESS. The Borrower will not, nor will the Borrower permit
any of its  Subsidiaries  to, create,  incur or suffer to exist any Indebtedness
except:

                    (a) Indebtedness under the Credit Documents to which it is a
          party;

                    (b)   Indebtedness   in  respect  of  the  Existing   Credit
          Agreement;

                    (c)  Indebtedness of the Borrower or any of its Subsidiaries
          (other than  Indebtedness in respect of the Existing Credit Agreement)
          outstanding on the date hereof and listed on Schedule VI hereto;

                    (d)  Indebtedness of the Borrower or any of its Subsidiaries
          (other than  Indebtedness  described in clauses (a) through (c) above)
          in an aggregate principal or face amount not exceeding $100,000,000 at
          any one time outstanding;

                    (e) additional unsecured  Indebtedness  (including,  without
          limitation,  Subordinated  Debt) or unsecured  Convertible Debt of the
          Borrower,  PROVIDED that (i) after giving effect to the  incurrence of
          any such  Indebtedness  and the  application of proceeds  thereof,  no
          Default  shall  have  occurred  and  be  continuing;   (ii)  any  such
          Subordinated  Debt  or  Convertible  Debt  may  be  guaranteed  by any
          Subsidiary  of the Borrower  (subject to clause (v) or (vi) below,  as
          applicable),  (iii) no scheduled payments,  prepayments,  redemptions,
          retirements,  or sinking or defeasance  fund or like payments on or in
          respect of such  Indebtedness  shall be required prior to the 91st day
          after the last  scheduled  principal  payment date of any of the Loans
          (other  than  Incremental  Loans of a  Series,  the  Incremental  Loan
          Activation  Notice with respect to which was  executed  and  delivered
          after the date of  incurrence  by the Borrower of such  Indebtedness),
          except that scheduled  payments,  prepayments,  redemptions or sinking
          fund or  like  payments  or  final  maturity  on or in  respect  of an
          aggregate   principal   amount  of  Convertible   Debt  not  exceeding
          $200,000,000  may be required  prior to the last  scheduled  principal
          payment date of any of the Loans; (iv) the covenants and defaults with
          respect  to such  Indebtedness  shall  be no more  restrictive  on the
          Borrower and its  Subsidiaries  than the covenants and defaults  under
          this  Agreement;  (v)  in  the  case  of any  Subordinated  Debt  that
          constitutes  Approved   Subordinated  Debt,  the  subordination  terms
          relating  thereto shall be no less favorable to the Lenders than those
          set forth in Exhibit G hereto or otherwise  shall be  satisfactory  in
          form and substance to the Majority Lenders, PROVIDED that, in the case
          of any Guarantee by any  Subsidiary  of such  Subordinated  Debt,  the
          obligations of such  Subsidiary in respect of such Guarantee  shall be
          subordinated  in right of  payment  to such  Subsidiary's  obligations
          under the Subsidiary  Guarantee to the same as, or to a greater extent
          than,  the  subordination  provisions  applicable  to the  Borrower in
          respect  of  such  Subordinated   Debt);  (vi)  in  the  case  of  any
          Convertible Debt (whether senior or  subordinated)  that is Guaranteed
          by any Subsidiary of the Borrower,  the obligations of such Subsidiary
          in respect of such Guarantee shall be subordinated in right of payment
          to such  Subsidiary's  obligations  under the Subsidiary  Guarantee on
          terms no less favorable to the Lenders than those set forth in Exhibit
          G  hereto  or  otherwise  satisfactory  in form and  substance  to the
          Majority  Lenders;  and (vii) at least 5  Business  Days  prior to the
          incurrence of such  Indebtedness  (or, if any adjustments with respect
          thereto  contemplated  in the  definition of "Pro Forma Basis" require
          the consent of the Majority  Lenders,  at least 10 Business Days prior
          to such incurrence),  the Agent shall have received a certificate of a
          Senior   Officer   certifying  as  to  the  foregoing  and  containing
          calculations,   in  form  and  detail   satisfactory   to  the  Agent,
          demonstrating  compliance  with this  paragraph (e) and Sections 8.07,
          8.11,  8.12,  8.13 and 8.14  hereof  (calculated  on a Pro Forma Basis
          after giving effect to such incurrence and the application of proceeds
          thereof as if such  Indebtedness had been incurred on the first day of
          the relevant  calculation period) and, in the case of any Subordinated
          Debt, specifying whether or not such Indebtedness constitutes Approved
          Subordinated  Debt (and attaching copies of the definitive  indenture,
          loan agreement or other agreement governing such Indebtedness);

                    (f)  Indebtedness  evidenced by  promissory  notes issued in
          connection  with  repurchases of stock and/or options  contemplated by
          Section 8.09(c) hereof; and

                    (g)  obligations of the Borrower or any of its  Subsidiaries
          in respect of letters of credit or similar instruments (other than any
          Letter of Credit  issued  pursuant to Section 2.10  hereof)  issued or
          accepted by banks and other financial institutions (including, without
          limitation,   any  Lender)  for  account  of  the   Borrower  or  such
          Subsidiary,  as the case may be,  in an  aggregate  face or  principal
          amount not exceeding  $30,000,000 at any one time  outstanding  (MINUS
          the  aggregate  LC Exposure at such time),  PROVIDED  that if any such
          letter of credit or similar instrument is issued by any Lender (or any
          of its Affiliates)  the obligations of the obligor(s)  thereof will be
          secured and/or guaranteed,  on a PARI PASSU basis with the obligations
          hereunder,  on the terms of, and pursuant  to, the Security  Documents
          and the Subsidiary Guarantee.

          8.08 INVESTMENTS.  The Borrower will not, nor will the Borrower permit
any of its Subsidiaries to, make or permit to remain outstanding any Investments
except:

                    (a) Investments in Cash Equivalents;

                    (b)  Investments  existing  on the date hereof and listed on
          Schedule III hereto;

                    (c) Hedging  Agreements  entered into in the ordinary course
          of the Borrower's financial planning and not for speculative purposes,
          including, without limitation, the Interest Rate Protection Agreements
          required by Section 8.21 hereof;

                    (d) subject to Section 8.05 hereof,  additional  Investments
          by the Borrower and its Subsidiaries in each other;

                    (e)   additional   Investments   by  the  Borrower  and  its
          Subsidiaries  not exceeding an aggregate  amount of $50,000,000 (as to
          the Borrower and its Subsidiaries);

                    (f) Investments by the Borrower in the Inactive Subsidiaries
          of the Borrower outstanding on the date hereof; and

                    (g) Acquisitions expressly permitted by Section 8.05 hereof.

          8.09 RESTRICTED PAYMENTS. The Borrower will not, nor will the Borrower
permit any of its Subsidiaries to, make any Restricted Payment except for:

                    (a) cash  dividends paid by the Borrower on its common stock
          not  exceeding  in any fiscal year of the  Borrower an amount equal to
          (x) if  immediately  prior to the making of such dividend  payment and
          after giving effect thereto, the Total Leverage Ratio is less than 4.5
          to 1, 50% of the  cumulative  Excess  Cash Flow  (commencing  with the
          fiscal year ending  December  31, 1997) and after  deducting  any cash
          dividends  theretofore made after December 31, 1997 as permitted under
          this clause (a) (or Section 8.09(a) of the Existing Credit  Agreement)
          or (y) if immediately  prior to the making of such dividend payment or
          after giving effect  thereto,  the Total Leverage Ratio is equal to or
          greater  than  4.5 to 1,  25%  of  the  cumulative  Excess  Cash  Flow
          (commencing  with the fiscal year ending  December 31, 1997) and after
          deducting any cash dividends  theretofore made after December 31, 1997
          as permitted under this clause (a) (or Section 8.09(a) of the Existing
          Credit Agreement), PROVIDED that no such dividend shall be made on any
          date if a Default has occurred and is continuing on such date or would
          occur after giving effect thereto;

                    (b)  additional  cash  dividends paid by the Borrower on its
          common  stock  not  exceeding  $4,000,000  in any  fiscal  year of the
          Borrower; and

                    (c)  repurchases  of common stock of the Borrower or options
          therefor from any Person (including,  without  limitation,  any of its
          Affiliates)  in an aggregate  amount not to exceed  $30,000,000 in any
          fiscal year so long as no Default has  occurred and is  continuing  on
          the  date of such  repurchase  or  would  occur  after  giving  effect
          thereto.

          8.10  CAPITAL  EXPENDITURES.  The  Borrower  will  not,  nor  will the
Borrower permit any of its Subsidiaries to, make any Capital  Expenditure on any
date during any of the fiscal  years of the Borrower set forth below if (a) Cash
Flow for the  period  of 12  complete  consecutive  months  ending  on,  or most
recently ended prior to, such date MINUS (b) the sum of the aggregate  amount of
Capital  Expenditures  made by the Borrower and its Subsidiaries  during such 12
month  period and the amount of such  Capital  Expenditure  proposed  to be made
would be less than the amount set forth below opposite such year:

                        YEAR          AMOUNT

                        1998        $140,000,000
                        1999        $145,000,000
                        2000        $155,000,000
                        2001        $165,000,000
                        2002        $175,000,000
                        2003        $185,000,000
                        2004        $195,000,000
                        2005        $205,000,000
                        2006        $215,000,000

PROVIDED  that (x) to the extent the Borrower or any of its  Subsidiaries  shall
sell or  otherwise  dispose  of any  capital  asset in the  ordinary  course  of
business or receive  insurance  proceeds in respect of any capital asset that is
the subject of a Casualty  Event and,  subject to the  requirements  of Sections
2.09(b),  apply (or commit to apply) the proceeds  thereof within 365 days after
such  Disposition or reasonably  promptly after such Casualty Event to acquire a
like capital  asset,  the amount of such proceeds so applied shall not be deemed
to be a Capital Expenditure within the period in which such acquisition is made,
(y) notwithstanding any of the foregoing,  the Borrower and its Subsidiaries may
make Capital  Expenditures in an aggregate amount not exceeding  $30,000,000 (as
to the Borrower and its Subsidiaries) during any fiscal year of the Borrower and
(z) notwithstanding any of the foregoing,  the Borrower and its Subsidiaries may
make Capital Expenditures in respect of the Philadelphia Project in an aggregate
amount not exceeding  $50,000,000 (it being understood that the Borrower and its
Subsidiaries  may make  Capital  Expenditures  in  respect  of the  Philadelphia
Project in excess of  $50,000,000  to the extent  permitted to be made under any
other provisions of this Section 8.10).

          8.11 LEVERAGE RATIOS.


          (a) The Borrower shall be subject to either paragraph (b) or paragraph
(c) of this Section 8.11 as provided in this  paragraph  (a). From and after the
Effective Date and until the Borrower has elected to be subject to paragraph (c)
of this Section 8.11 as provided in the next succeeding  sentence,  the Borrower
shall be subject  to  paragraph  (b) of this  Section  8.11.  From and after the
incurrence  by the Borrower of  Indebtedness  permitted  under  Section  8.07(e)
hereof,  the  Borrower  may from  time to time  elect to be  subject  to  either
paragraph (b) or paragraph (c) of this Section 8.11. Each such election shall be
irrevocable,  shall be in writing,  shall become effective on the third Business
Day  after  receipt  by the Agent  thereof  and  shall  remain  in effect  until
superseded by a subsequent  election that has been  delivered by the Borrower to
the Agent and has become effective as provided above.

          (b) The  Borrower  will not,  at any time  during any period set forth
below  during which the Borrower is subject to this  paragraph  (b),  permit the
Total  Leverage  Ratio to exceed the ratio set forth  under the  caption  "Total
Leverage Ratio" below opposite such period:

                  PERIOD                                    TOTAL LEVERAGE RATIO

      From and including the Effective Date
      through and including December 30, 1999                     6.00 to 1

      From and including December 31, 1999
      through and including December 30, 2000                     5.75 to 1

      From and including December 31, 2000
      through and including December 30, 2001                     5.50 to 1

      From and including December 31, 2001
      through and including December 30, 2002                     5.25 to 1

      From and including December 31, 2002
      through and including December 30, 2003                     5.00 to 1

      From and including December 31, 2003
      through and including December 30, 2004                     4.75 to 1

      From and including December 31, 2004
      and at all times thereafter                                 4.50 to 1

PROVIDED  that in the event that (i) at any time  during  which the  Borrower is
subject to paragraph (c) of this Section 8.11 any Convertible Debt is refinanced
with the proceeds of Loans and (ii) at the time of or following such refinancing
the Borrower elects to be subject to this paragraph (b) as provided in paragraph
(a) above,  then the Borrower  will not, at any time during any period set forth
above  during which the Borrower is subject to this  paragraph  (b),  permit the
Total Leverage Ratio to exceed the lesser of (x) 5.00 to 1 and (y) the ratio set
forth above opposite the relevant period.

          (c) The  Borrower  will not,  at any time  during any period set forth
below during which the Borrower is subject to this paragraph (c),  permit either
(i) the Total  Leverage  Ratio to exceed  the  ratio set forth  below  under the
caption "Total  Leverage Ratio" opposite such period or (ii) the Senior Leverage
Ratio to exceed the ratio set forth  below under the  caption  "Senior  Leverage
Ratio" opposite such period:

                       PERIOD            TOTAL LEVERAGE  SENIOR LEVERAGE
                                             RATIO            RATIO
             From and including the
             Effective Date through        6.50 to 1        5.00 to 1
             and including December
             30, 2001

             From and including
             December 31, 2001 through     6.00 to 1        4.75 to 1
             and including December
             30, 2002

             From and including
             December 31, 2002 through     5.75 to 1        4.50 to 1
             and including December
             30, 2003

             From and including
             December 31, 2003 and at      5.50 to 1        4.25 to 1
             all times thereafter

          8.12 FIXED CHARGES RATIO. The Borrower will not at any time permit the
Fixed Charges Ratio to be less than 1 to 1.

          8.13 INTEREST COVERAGE RATIO. The Borrower will not at any time permit
the Interest Coverage Ratio to be less than 2 to 1.

          8.14 WORKING CAPITAL. The Borrower will not at any time permit Working
Capital to be less than zero.

          8.15 LINES OF BUSINESS.  The Borrower  will not, nor will the Borrower
permit  any of its  Subsidiaries  to  engage  to any  substantial  extent in any
business  other than the  business of  printing,  publishing,  distributing  and
selling newspapers or other  publications  (whether in print or electronic form)
and proprietary information data bases in connection therewith,  solicitation of
advertising,  dissemination of news and information,  commercial  printing,  and
activities relating to the sale, development, installation and/or maintenance of
computer  hardware or  software  of the types  engaged in on the date hereof and
other activities incidental or related to each of the foregoing.

          8.16  TRANSACTIONS WITH AFFILIATES.  Except as expressly  permitted by
this  Agreement  (including,  without  limitation,  Section  8.05  hereof),  the
Borrower  will not, nor will the  Borrower  permit any of its  Subsidiaries  to,
directly or indirectly: (a) make any Investment in an Affiliate of the Borrower;
(b)  transfer,  sell,  lease,  assign or  otherwise  Dispose of any assets to an
Affiliate of the  Borrower;  (c) merge into or  consolidate  with or purchase or
acquire  assets  from an  Affiliate;  or (d) enter  into any  other  transaction
directly or  indirectly  with or for the benefit of an Affiliate of the Borrower
(including, without limitation,  Guarantees and assumptions of obligations of an
Affiliate of the Borrower);  PROVIDED that (i) any Affiliate of the Borrower who
is an individual may serve as a director, officer or employee of the Borrower or
its Subsidiaries and receive reasonable  compensation for his or her services in
such  capacity  and  (ii) the  Borrower  and its  Subsidiaries  may  enter  into
transactions providing for the purchase or sale of inventory and other assets or
the  provision  of  services  (including,   without  limitation,   printing  and
advertising  representation  services) in the ordinary course of business if the
monetary or business  consideration  arising therefrom would be substantially as
advantageous  to the Borrower and its  Subsidiaries  as the monetary or business
consideration  which would obtain in a comparable  transaction with a Person not
an Affiliate of the Borrower.

          8.17 SALE AND LEASEBACK.  The Borrower will not, nor will the Borrower
permit any of its  Subsidiaries  to, enter into any  arrangement  with any other
Person (other than the Borrower and its Subsidiaries)  providing for the leasing
by the Borrower or any of its  Subsidiaries  of real or personal  property which
has  been  or is to be  sold  or  transferred  by  the  Borrower  or  any of its
Subsidiaries to such other Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such  property or rental
obligations of the Borrower or any of its Subsidiaries, except that the Borrower
and its  Subsidiaries  may  enter  into  any  such  arrangements  so long as the
aggregate  value of  Property  subject  thereto  at any time  shall  not  exceed
$50,000,000.

          8.18 AMENDMENT OF CERTAIN  DOCUMENTS.  The Borrower will not,  without
the prior written consent of the Majority Lenders, amend or otherwise modify, or
consent to any amendment or other modification of, or waive any provision of any
agreement, instrument or other document evidencing or governing any Subordinated
Debt,  Convertible  Debt or any  other  Indebtedness  of the  Borrower  incurred
pursuant to Section  8.07(e)  hereof if such amendment or waiver would result in
such  Subordinated  Debt,  Convertible Debt or other  Indebtedness not complying
with the requirements of said Section 8.07(e).

          8.19  USE OF  PROCEEDS.  The  Borrower  will use the  proceeds  of the
Revolving  Credit  Loans  and the  Incremental  Loans  solely  (a)  for  general
corporate  purposes of the Borrower and its Subsidiaries,  including for working
capital requirements of the Borrower and its Subsidiaries in the ordinary course
of business,  (b) for extensions of credit to any of its Subsidiaries and (c) to
finance  Permitted  Acquisitions.  In all  events,  the  Borrower  will  use the
proceeds of the Loans in compliance  with all  applicable  legal and  regulatory
requirements, including, without limitation, Regulation U and Regulation X.

          8.20 SALES OF ACCOUNTS.  The Borrower  will not, nor will the Borrower
permit any of its Subsidiaries to, sell, with or without  recourse,  or discount
or otherwise  sell for less than the face value  thereof,  any of their notes or
accounts  receivable  except that the  Borrower or any of its  Subsidiaries  may
sell, without recourse,  accounts  receivable of individual account debtors that
the  Borrower or such  Subsidiary  reasonably  and in good faith  believes to be
uncollectible  or  otherwise  difficult  to  collect in the  ordinary  course of
business so long as the aggregate face amount (less applicable  reserves) of all
such  accounts  receivable of the Borrower and its  Subsidiaries  so sold in any
fiscal year of the Borrower does not exceed $500,000 (as to the Borrower and its
Subsidiaries).

          8.21  INTEREST  RATE  PROTECTION.  Not later  than 197 days  after the
Effective  Date,  the Borrower  and/or its  Subsidiaries  will have in place and
thereafter  maintain  in full  force  and  effect  (and in a  manner  reasonably
satisfactory to the Agent) one or more Interest Rate Protection  Agreements with
one or more of the Lenders or  Affiliates  of Lenders (or with  another  bank or
financial  institution  having a capital,  surplus and  undivided  profits of at
least  $500,000,000)  such that the average maximum rate of interest  payable by
the Borrower  shall not exceed 10% per annum for  consecutive  periods  (each of
which,  at the time such  Interest  Rate  Protection  Agreement is entered into,
shall be of at least two  years'  duration)  as to a  principal  amount at least
equal to the  Applicable  Percentage of either of the following  amounts (at the
election  of the  Borrower):  (a) the  aggregate  principal  amount of the Loans
scheduled to be outstanding  during the respective  period; or (b) the aggregate
principal amount of Total Debt scheduled to be outstanding during the respective
period; PROVIDED that the Borrower's obligations under clause (b) above shall be
deemed satisfied to the extent of the aggregate principal amount of Indebtedness
of the Borrower  scheduled to be outstanding  during the respective  period that
bears  interest at a fixed rate per annum that is less than or equal to 10%. For
purposes of this Section 8.21,  "APPLICABLE  PERCENTAGE"  shall mean (i) 0%, for
any period  during  which the Total  Leverage  Ratio is less than 3.5 to 1, (ii)
33-1/3%,  for any period during which the Total  Leverage  Ratio is less than or
equal  to 5.25 to 1 and  greater  than or  equal  to 3.5 to 1,  and  (iii)  50%,
otherwise  (in  each  case  as  demonstrated  by the  most  recent  consolidated
financial statements of the Borrower and related Compliance Certificate required
to be delivered under Section 8.01 hereof).

          8.22 ENVIRONMENTAL  MATTERS. The Borrower will, and will cause each of
its Subsidiaries to, comply in all material respects with all Environmental Laws
now or hereafter  applicable  to the Borrower  and its  Subsidiaries,  and shall
obtain, at or prior to the time required by applicable  Environmental  Laws, all
environmental,  health and safety  permits,  licenses  and other  authorizations
necessary for its operations and maintain such  authorizations in full force and
effect.

          8.23 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.

          (a) The Borrower  will,  and will cause each of its  Subsidiaries  to,
take such action from time to time as shall be  necessary to ensure that each of
the  Subsidiaries of the Borrower is a Wholly Owned  Subsidiary  (except for any
stock or other  equity  interests of such  Subsidiary  which is owned by a third
party as of the Effective  Date, as listed in Schedule IV hereto).  In the event
that any additional  shares of capital stock or other ownership  interests shall
be issued by any Subsidiary,  the respective Obligor agrees forthwith to deliver
to the  Agent  pursuant  to the  relevant  Security  Document  the  certificates
evidencing such shares of stock or other  ownership  interests (in the case of a
Foreign  Subsidiary,  only to the extent required under paragraph (b) below), if
any,  accompanied by undated stock or transfer  powers  executed in blank and to
take such  other  action as the Agent  shall  request to  perfect  the  security
interest created therein pursuant to the relevant  Security  Document;  PROVIDED
that,  in the event of any Domestic  Subsidiary  organized as a  partnership  or
limited  liability  company,  the  Borrower  shall cause each of the partners or
members  thereof,  as the case may be, to enter into a pledge  agreement in form
and substance  satisfactory  to the Agent pursuant to which the Agent, on behalf
of the Lenders, shall be granted a first priority perfected security interest in
all of the equity interests of such partnership or limited  liability company to
secure the obligations owing to the Lenders hereunder and under the other Credit
Documents,  subject to no other Lien (and the  organizational  document for such
partnership or limited  liability  company shall  expressly  authorize each such
partner or member to so pledge its equity interests therein and shall contain no
other  restriction  against  the Agent  enforcing  such  security  interest  and
transferring such equity interests to a third party).

          (b) The  Borrower  will take such  action,  and will cause each of its
Subsidiaries  to take such  action,  from time to time as shall be  necessary to
ensure that all Subsidiaries of the Borrower are "Subsidiary  Guarantors"  under
the Subsidiary Guarantee.  Without limiting the generality of the foregoing,  in
the event that the Borrower or any of its Subsidiaries shall form or acquire any
new Subsidiary  after the date hereof,  the Borrower and its  Subsidiaries  will
cause such new Subsidiary to:

                    (i) become a  "Subsidiary  Guarantor"  under the  Subsidiary
          Guarantee  and  under  the  Subsidiary  Guarantor  Security  Agreement
          pursuant to an instrument satisfactory to the Agent;

                    (ii) cause such  Subsidiary  to take such action  (including
          delivering such shares of stock, executing and delivering such Uniform
          Commercial  Code financing  statements as shall be necessary to create
          and  perfect   valid  and   enforceable   first   priority   Liens  on
          substantially  all of the Property of such new Subsidiary  (other than
          real Property interests) as collateral security for the obligations of
          such new Subsidiary thereunder; and

                    (iii) deliver such proof of corporate action,  incumbency of
          officers and other  documents  (other than  opinions of counsel) as is
          consistent  with those  delivered by each Obligor  pursuant to Section
          6.01 on the  Effective  Date or as the  Agent  shall  have  reasonably
          requested;

          PROVIDED  that  if  such  Subsidiary  is a  Foreign  Subsidiary,  such
          Subsidiary  shall not be  required  to become a  Subsidiary  Guarantor
          under  the  Subsidiary   Guarantee  or  a  Securing  Party  under  the
          Subsidiary  Guarantor  Security Agreement and, if such Subsidiary is a
          direct Domestic Subsidiary of the Borrower or of a Domestic Subsidiary
          of the Borrower,  the Borrower shall forthwith  pledge,  or cause such
          Subsidiary  to pledge,  to the Agent (for the benefit of the  Lenders)
          under the relevant Security Document (or, at the request of the Agent,
          under a pledge or other similar agreement  governed by the law of such
          Foreign  Subsidiary's  jurisdiction  of  organization)  (x) 65% of the
          voting capital stock of such Foreign Subsidiary having ordinary voting
          power for the election of the board of  directors  of such  Subsidiary
          and (y) 100% of all other stock of such Foreign Subsidiary

          (c) The Borrower will not, and will not permit any of its Subsidiaries
to, enter into, incur or permit to exist any indenture, agreement, instrument or
other arrangement that, directly or indirectly,  prohibits or restrains,  or has
the  effect  of  prohibiting  or  restraining,  or  imposes  materially  adverse
conditions  upon,  the  incurrence or payment of  Indebtedness,  the granting of
Liens, the declaration or payment of dividends, the making of loans, advances or
Investments or the sale, assignment,  transfer or other disposition of Property,
in each case by any  Subsidiary;  PROVIDED that the foregoing shall not apply to
(i)  restrictions  and  conditions  imposed  by law or by this  Agreement,  (ii)
customary  restrictions and conditions  contained in agreements  relating to the
sale  of  a  Subsidiary  pending  such  sale,  provided  such  restrictions  and
conditions  apply  only to the  Subsidiary  that is to be sold and such  sale is
permitted  hereunder,  (iii) restrictions or conditions imposed by any agreement
relating  to  secured   Indebtedness   permitted  by  this   Agreement  if  such
restrictions  or conditions  apply only to the property or assets  securing such
Indebtedness,  (iv) customary  provisions in leases and other contracts  entered
into in the ordinary course of business  restricting the assignment  thereof and
(v) any such restriction in existence on the date hereof and that could not have
a Material Adverse Effect.

          8.24 INACTIVE SUBSIDIARIES. Anything in this Agreement to the contrary
notwithstanding,  except as permitted under Section  8.05(a)(i)  hereof, (a) the
Borrower  will not, nor will the  Borrower  permit any of its  Subsidiaries  to,
engage in any  transaction  or any other business with or for the benefit of any
Inactive  Subsidiary,  and (b) the Borrower  will not permit any of its Inactive
Subsidiaries  to engage in any business or create or incur any  Indebtedness  or
create or incur any other  obligations  (contingent or otherwise) after the date
hereof.

          8.25  PAYMENTS OF  INDEBTEDNESS.  Neither the  Borrower nor any of its
Subsidiaries  will purchase,  redeem,  retire or otherwise acquire for value, or
set apart any money for a sinking,  defeasance,  or other analogous fund for the
purchase, redemption,  retirement or other acquisition of, or make any voluntary
payment or  prepayment  of the  principal of or interest on, or any other amount
owing in respect of, any  Indebtedness  incurred as permitted by Section 8.07(e)
hereof,  except for (a)  regularly  scheduled  payments  of  interest in respect
thereof in accordance with the instruments  governing such  Indebtedness and (b)
with respect to Convertible Debt,  regularly  scheduled payments of principal in
respect thereof in accordance with the  instruments  governing such  Convertible
Debt, to the extent permitted by Section 8.07(e) hereof).


          Section 9. EVENTS OF DEFAULT.  If one or more of the following  events
(herein called "EVENTS OF DEFAULT") shall occur and be continuing:

                    (a) the Borrower shall default in the payment (including any
          required  prepayment)  when due of any principal of or interest on any
          Loan,  any  reimbursement  of an LC  Disbursement  or any other amount
          payable by the  Borrower  hereunder  or under any of the other  Credit
          Documents; or any Obligor shall default in the payment when due of any
          amount payable by such Obligor under any of the Credit Documents; or

                    (b) the Borrower or any of its Subsidiaries shall default in
          the  payment  when due of any  principal  of or interest on any of its
          Indebtedness   (other  than  as  described  in  paragraph  (a)  above)
          aggregating  $10,000,000  or more,  or in the payment  when due of any
          amount under any Interest  Rate  Protection  Agreement  for a notional
          principal amount exceeding $10,000,000;  or any event specified in any
          note, agreement, indenture or other document evidencing or relating to
          any such  Indebtedness  or any event  specified in any  Interest  Rate
          Protection  Agreement  shall  occur if the  effect of such event is to
          cause, or (with the giving of any notice or the lapse of time or both)
          to permit the holder or holders of such  Indebtedness (or a trustee or
          agent on behalf of such holder or holders) to cause, such Indebtedness
          to become  due,  or to be  prepaid  in full  (whether  by  redemption,
          purchase,  offer  to  purchase  or  otherwise),  prior  to its  stated
          maturity or to have the interest rate thereon reset to a level so that
          securities  evidencing such Indebtedness trade at a level specified in
          relation to the par value  thereof or, in the case of an Interest Rate
          Protection Agreement, to permit the payments owing under such Interest
          Rate Protection Agreement to be liquidated; or

                    (c) any  representation,  warranty or certification  made or
          deemed  made by any  Obligor in any  Transaction  Document  (or in any
          modification or supplement thereto),  or in any certificate  furnished
          to any Lender or the Agent pursuant to the provisions  thereof,  shall
          prove to have been false or  misleading  as of the time  made,  deemed
          made or furnished in any material respect; or

                    (d) the Borrower shall default in the  performance of any of
          its obligations under clause (f) of Section 8.01 hereof, clause (a) of
          Section 8.03 hereof (as to the  obligation  to maintain the  corporate
          existence of the Borrower and its  Subsidiaries  only),  clause (a) of
          Section 8.04 hereof,  Sections 8.05 through 8.21  (inclusive)  hereof,
          Section  8.23 hereof or Section  8.25  hereof;  or the Borrower or any
          other Obligor shall default in the  performance of any of its or their
          other obligations hereunder or under any of the other Credit Documents
          to which the Borrower or any other Obligor is a party and such default
          shall continue unremedied for a period of 30 days after notice thereof
          to the Borrower by the Agent or any Lender (through the Agent); or

                    (e) the Borrower or any of its  Subsidiaries  shall admit in
          writing its inability to, or be generally  unable to, pay its debts as
          such debts become due; or

                    (f) the Borrower or any of its Subsidiaries  shall (i) apply
          for or consent to the  appointment of, or the taking of possession by,
          a receiver,  custodian, trustee or liquidator of itself or of all or a
          substantial part of its property,  (ii) make a general  assignment for
          the benefit of its  creditors,  (iii)  commence a voluntary case under
          the  Bankruptcy  Code (as now or  hereafter  in  effect),  (iv) file a
          petition  seeking  to take  advantage  of any  other law  relating  to
          bankruptcy, insolvency, reorganization,  winding-up, or composition or
          readjustment  of  debts,  (v)  fail  to  controvert  in a  timely  and
          appropriate  manner,  or acquiesce  in writing to, any petition  filed
          against it in an involuntary  case under the Bankruptcy  Code, or (vi)
          take any  corporate  action for the  purpose of  effecting  any of the
          foregoing; or

                    (g) a  proceeding  or case shall be  commenced,  without the
          application or consent of the Borrower or any of its Subsidiaries,  in
          any court of  competent  jurisdiction,  seeking  (i) its  liquidation,
          reorganization,  dissolution  or  winding-up,  or the  composition  or
          readjustment  of  its  debts,  (ii)  the  appointment  of  a  trustee,
          receiver,  custodian,  liquidator  or the like of the Borrower or such
          Subsidiary or of all or any substantial  part of its assets,  or (iii)
          similar relief in respect of the Borrower or such Subsidiary under any
          law relating to bankruptcy, insolvency, reorganization, winding-up, or
          composition or adjustment of debts,  and such proceeding or case shall
          continue  undismissed,  or an order,  judgment or decree  approving or
          ordering any of the foregoing  shall be entered and continue  unstayed
          and in effect, for a period of 60 or more days; or an order for relief
          against  the  Borrower  or such  Subsidiary  shall  be  entered  in an
          involuntary case under the Bankruptcy Code; or

                    (h) a final  judgment or judgments  for the payment of money
          in excess of $10,000,000 in the aggregate shall be rendered by a court
          or courts against the Borrower and/or any of its  Subsidiaries and the
          same shall not be discharged (or adequate  provision shall not be made
          for such  discharge),  or a stay of  execution  thereof  shall  not be
          procured,  within  45 days  from  the date of  entry  thereof  and the
          Borrower or such Subsidiary  shall not, within said period of 45 days,
          or such longer  period  during which  execution of the same shall have
          been stayed,  appeal  therefrom and cause the execution  thereof to be
          stayed during such appeal; or

                    (i) an event  or  condition  specified  in  Section  8.01(e)
          hereof shall occur or exist with respect to any Plan or  Multiemployer
          Plan and, as a result of such event or  condition,  together  with all
          other such events or conditions,  the Borrower or any ERISA  Affiliate
          shall  incur  or in the  opinion  of the  Majority  Lenders  shall  be
          reasonably likely to incur a liability to a Plan, a Multiemployer Plan
          or PBGC (or any  combination  of the  foregoing)  which is material in
          relation to the financial condition, business, operations,  prospects,
          assets,   liabilities  or  capitalization  of  the  Borrower  and  its
          Subsidiaries taken as a whole; or

                    (j) except for any  expiration or  termination in accordance
          with  its  terms or  resulting  from any  action  by the  Agent or any
          Lender, any of the Liens created by the Security Documents,  shall not
          constitute  a valid and  perfected  Lien on the  collateral  described
          therein (to the extent perfection by filing, registration, recordation
          or  possession  is required  herein or therein) in favor of the Agent,
          free and clear of all other Liens  (other than  Permitted  Liens);  or
          except  for  expiration  in  accordance  with  its  terms,  any of the
          Security Documents shall for whatever reason be terminated or cease to
          be in full force and effect,  or the  enforceability  thereof shall be
          contested by the Borrower or any other Obligor; or

                    (k)  Any  of  the  following   events  shall  occur  and  be
          continuing:

                              (i) any  person or group  (within  the  meaning of
                    Rule 13d-5 under the  Securities  Exchange  Act of 1934,  as
                    amended (the "EXCHANGE  ACT") and Section 13(d) and 14(d) of
                    the  Exchange  Act (other than  (collectively,  the "WARBURG
                    ENTITIES")  (i) Warburg,  Pincus  Capital  Company,  L.P., a
                    Delaware limited partnership,  (ii) Warburg,  Pincus Capital
                    Partners,  L.P.,  a  Delaware  limited  partnership,   (iii)
                    Warburg,   Pincus   Investors,   L.P.,  a  Delaware  limited
                    partnership,  (iv) Warburg, Pincus & Co., a New York general
                    partnership,  (v) any other  venture  banking  fund in which
                    Warburg,  Pincus & Co. is the  general  partner and (vi) any
                    Subsidiary  of, or any  successor  to, any of the  foregoing
                    entities)  becomes,  directly  or  indirectly,  in a  single
                    transaction or in a related series of transactions by way of
                    merger,  consolidation  or  other  business  combination  or
                    otherwise,  the "beneficial owner" (as defined in Rule 13d-3
                    under the  Exchange  Act) of more  than 35% (or such  higher
                    percentage  as shall be  owned at such  time by the  Warburg
                    Entities)  of  the  capital  stock  of  the  Borrower  on  a
                    fully-diluted  basis (in other words,  giving  effect to the
                    exercise of any warrants,  options and  conversion and other
                    rights); or

                              (ii) a majority of the Board of  Directors  of the
                    Borrower shall no longer be composed of individuals  (x) who
                    are members of said Board on the Effective  Date,  (y) whose
                    election or  nomination  to said Board has been  approved by
                    individuals   referred  to  in  the  foregoing   clause  (x)
                    constituting  at the time of such  election or nomination at
                    least a  majority  of said  Board or (z) whose  election  or
                    nomination  to  said  Board  was  approved  by   individuals
                    referred   to  in  the   foregoing   clauses   (x)  and  (y)
                    constituting  at the time of such  election or nomination at
                    least a majority of said Board; or

                    (l) there shall have been  asserted  against the Borrower or
          any of its Subsidiaries an  Environmental  Claim that, in the judgment
          of  the  Majority  Lenders  is  reasonably  likely  to  be  determined
          adversely  against  the  Borrower or such  Subsidiary,  and the amount
          thereof (either individually or in the aggregate) is reasonably likely
          to have a Material  Adverse Effect  (insofar as such amount is payable
          by the Borrower or such  Subsidiary  but after  deducting  any portion
          thereof that is reasonably  expected to be paid by other  creditworthy
          Persons jointly and severally liable therefor);

          THEREUPON:  (1) in the  case of an  Event of  Default  other  than one
          referred to in clause (f) or (g) of this Section 9 with respect to any
          Obligor, (A) the Agent may and, upon request of the Majority Revolving
          Credit Lenders (and, if at the time of such Event of Default there are
          any outstanding  unused  Incremental Loan Commitments,  Lenders having
          outstanding unused Incremental Loan Commitments representing more than
          50% of the total  outstanding  unused  Incremental Loan Commitments at
          such time) shall, by notice to the Borrower, terminate the Commitments
          and they shall  thereupon  terminate,  and (B) the Agent may and, upon
          request  of the  Majority  Lenders  shall,  by notice to the  Borrower
          declare  the  principal  amount then  outstanding  of, and the accrued
          interest on, the Loans all reimbursement  obligations in respect of LC
          Disbursements and all other amounts payable by the Borrower  hereunder
          and  under the  Notes  (including,  without  limitation,  any  amounts
          payable  under  Section 5.05 hereof) to be forthwith  due and payable,
          whereupon  such amounts shall be immediately  due and payable  without
          presentment,  demand, protest or other formalities of any kind, all of
          which are hereby expressly waived by the Borrower; and (2) in the case
          of the occurrence of an Event of Default  referred to in clause (f) or
          (g) of this  Section 9 with respect to any  Obligor,  the  Commitments
          shall  automatically  be  terminated  and the  principal  amount  then
          outstanding  of,  and  the  accrued   interest  on,  the  Loans,   all
          reimbursement obligations in respect of LC Disbursements and all other
          amounts  payable  by  the  Borrower  hereunder  and  under  the  Notes
          (including, without limitation, any amounts payable under Section 5.05
          hereof) shall automatically become immediately due and payable without
          presentment,  demand, protest or other formalities of any kind, all of
          which are hereby expressly waived by the Borrower.


          Section 10. THE AGENT.


          10.01   APPOINTMENT,   POWERS  AND  IMMUNITIES.   Each  Lender  hereby
irrevocably  appoints and authorizes the Agent to act as its agent hereunder and
under the other Credit Documents with such powers as are specifically  delegated
to the Agent by the terms of this  Agreement and of the other Credit  Documents,
together with such other powers as are reasonably  incidental thereto. The Agent
(which term as used in this sentence and in Section 10.05 and the first sentence
of Section 10.06 hereof shall include  reference to its  Affiliates  and its own
and its Affiliates' officers,  directors,  employees and agents): (a) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents,  and shall not by reason of this Agreement or
any  other  Credit  Document  be a  trustee  for any  Lender;  (b)  shall not be
responsible  to the Lenders for any  recitals,  statements,  representations  or
warranties contained in this Agreement or in any other Transaction  Document, or
in any certificate or other document referred to or provided for in, or received
by any of them under, this Agreement or any other Transaction  Document,  or for
the value, validity, effectiveness,  genuineness,  enforceability or sufficiency
of this  Agreement,  any Note or any  other  Transaction  Document  or any other
document referred to or provided for herein or therein or for any failure by the
Borrower or any other  Person to perform  any of its  obligations  hereunder  or
thereunder;  (c) shall not be required to initiate or conduct any  litigation or
collection  proceedings  hereunder or under any other Credit  Document;  and (d)
shall not be  responsible  for any  action  taken or  omitted  to be taken by it
hereunder  or under any other  Credit  Document  or under any other  document or
instrument  referred  to or  provided  for herein or  therein  or in  connection
herewith  or  therewith,   except  for  its  own  gross  negligence  or  willful
misconduct.  The Agent may employ agents and  attorneys-in-fact and shall not be
responsible   for  the   negligence   or   misconduct  of  any  such  agents  or
attorneys-in-fact selected by it in good faith. The Agent may deem and treat the
payee of any Note as the holder thereof for all purposes hereof unless and until
a notice of the  assignment  or transfer  thereof shall have been filed with the
Agent,  together with the consent of the Borrower to such assignment or transfer
(to the extent provided in Section 11.06(b) hereof).

          10.02 RELIANCE BY AGENT.  The Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any
thereof by telephone,  telecopy,  telex, telegram or cable) believed by it to be
genuine  and  correct  and to have  been  signed  or sent by or on behalf of the
proper  Person or Persons,  and upon  advice and  statements  of legal  counsel,
independent  accountants  and other  experts  selected  by the Agent.  As to any
matters  not  expressly  provided  for by this  Agreement  or any  other  Credit
Document,  the Agent  shall in all cases be fully  protected  in  acting,  or in
refraining from acting,  hereunder or thereunder in accordance with instructions
given by the Majority  Lenders or, if provided  herein,  in accordance  with the
instructions  given  by the  Majority  Revolving  Credit  Lenders  or all of the
Lenders as is  required  in such  circumstance,  and such  instructions  of such
Lenders and any action taken or failure to act pursuant thereto shall be binding
on all of the Lenders.

          10.03  DEFAULTS.  The Agent shall not be deemed to have  knowledge  or
notice of the occurrence of a Default unless the Agent has received  notice from
a Lender or the Borrower specifying such Default and stating that such notice is
a "Notice of Default". In the event that the Agent receives such a notice of the
occurrence  of a Default,  the Agent  shall give  prompt  notice  thereof to the
Lenders. The Agent shall (subject to Section 10.07 hereof) take such action with
respect to such  Default as shall be  directed  by the  Majority  Lenders or, if
provided herein,  the Majority  Revolving Credit Lenders,  PROVIDED 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 as it shall deem  advisable in the best interest of
the Lenders  except to the extent that this  Agreement  expressly  requires that
such  action  be  taken,  or not be taken,  only  with the  consent  or upon the
authorization of the Majority Lenders,  the Majority Revolving Credit Lenders or
all of the Lenders.

          10.04  RIGHTS AS A LENDER.  With  respect to its  Commitments  and the
Loans made by it, Chase (and any successor acting as Agent) in its capacity as a
Lender  hereunder  shall have the same rights and powers  hereunder as any other
Lender and may exercise the same as though it were not acting as the Agent,  and
the term "Lender" or "Lenders" shall,  unless the context  otherwise  indicates,
include the Agent in its individual capacity. Chase (and any successor acting as
Agent) and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in and generally engage in
any kind of banking,  trust or other  business with the Borrower (and any of its
Subsidiaries or Affiliates) as if it were not acting as the Agent, and Chase and
its  Affiliates  may accept fees and other  consideration  from the Borrower for
services in  connection  with this  Agreement  or  otherwise  without  having to
account for the same to the Lenders.

          10.05  INDEMNIFICATION.  The Lenders  agree to indemnify the Agent (to
the extent not reimbursed  under Section 11.03 hereof,  but without limiting the
obligations of the Borrower under said Section 11.03) ratably in accordance with
the aggregate principal amount of the Loans held by the Lenders (or, if no Loans
are at the  time  outstanding,  ratably  in  accordance  with  their  respective
Commitments),  for  any  and  all  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind and nature  whatsoever  that may be imposed  on,  incurred  by or  asserted
against the Agent  (including by any Lender)  arising out of or by reason of any
investigation  in or in any way relating to or arising out of this  Agreement or
any  other  Transaction  Document  or any  other  documents  contemplated  by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including,  without  limitation,  the costs and  expenses  that the Borrower is
obligated to pay under Section 11.03 hereof, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents,  PROVIDED that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.

          10.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees that
it has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed  appropriate,  made its
own credit analysis of the Borrower and its  Subsidiaries  and decision to enter
into this Agreement and that it will,  independently  and without  reliance upon
the Agent or any other Lender, and based on such documents and information as it
shall  deem  appropriate  at the time,  continue  to make its own  analysis  and
decisions in taking or not taking action under this Agreement or under any other
Credit  Document.  The Agent shall not be required to keep itself informed as to
the  performance  or observance by the Borrower of this  Agreement or any of the
other Credit Documents or any other document  referred to or provided for herein
or therein or to inspect the  Properties  or books of the Borrower or any of its
Subsidiaries.  Except for notices,  reports and other  documents and information
expressly  required to be  furnished  to the Lenders by the Agent  hereunder  or
under the Security Documents or delivered to the Agent with the intent that such
notices, reports and other documents and information shall be distributed to the
Lenders  pursuant  to the terms  hereof,  the  Agent  shall not have any duty or
responsibility  to  provide  any  Lender  with any  credit or other  information
concerning the affairs,  financial  condition or business of the Borrower or any
of its Subsidiaries (or any of its Affiliates) that may come into the possession
of the Agent or any of its Affiliates.

          10.07  FAILURE TO ACT.  Except for action  expressly  required  of the
Agent  hereunder  and under the other Credit  Documents,  the Agent shall in all
cases be fully  justified in failing or refusing to act hereunder and thereunder
unless it shall receive further  assurances to its satisfaction from the Lenders
of their indemnification  obligations under Section 10.05 hereof against any and
all  liability  and  expense  that may be  incurred by it by reason of taking or
continuing to take any such action.

          10.08 RESIGNATION OR REMOVAL OF AGENT.  Subject to the appointment and
acceptance of a successor Agent as provided  below,  the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower, and the Agent may
be removed at any time with or without cause by the Majority  Lenders.  Upon any
such  resignation  or  removal,  the  Majority  Lenders  shall have the right to
appoint a successor  Agent from among the Lenders.  If no successor  Agent shall
have been so  appointed  by the Majority  Lenders and shall have  accepted  such
appointment  within  30 days  after  the  retiring  Agent's  giving of notice of
resignation or the Majority  Lenders'  removal of the retiring  Agent,  then the
retiring Agent may, on behalf of the Lenders,  appoint a successor Agent,  which
shall be a bank  which has an office in the  United  States of  America,  with a
combined  capital and surplus of at least  $500,000,000,  PROVIDED  that if such
successor Agent shall not have an office in New York, New York at which payments
hereunder and notices delivered  hereunder and under the Security  Documents are
to be made, then the parties hereto agree to effect such  modifications  to this
Agreement  and the  Security  Documents as shall be  appropriate  to permit such
payments to be made and such  notices to be  delivered to a non-New York office.
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 shall be discharged from its duties and obligations  hereunder.  After any
retiring  Agent's  resignation or removal  hereunder as Agent, the provisions of
this  Section  10 shall  continue  in effect  for its  benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.

          10.09  CONSENTS  UNDER OTHER  CREDIT  DOCUMENTS.  Except as  otherwise
provided in Section  11.04 hereof with respect to this  Agreement and the Notes,
the Agent may, with the prior written  consent of the Majority  Lenders (but not
otherwise),  consent to any modification,  supplement or waiver under any of the
Credit Documents,  PROVIDED that,  without the prior consent of each Lender, the
Agent  shall not (except as  expressly  provided  in the Credit  Documents)  (a)
release any material  portion of the collateral or otherwise  terminate any Lien
with  respect  thereto  under  any  Security  Document  or  (b)  release  all or
substantially all of the Subsidiary Guarantors from their respective obligations
under any Security Document to which it is a party or the Subsidiary  Guarantee,
except  that no  such  consent  shall  be  required,  and the  Agent  is  hereby
authorized,  to release any such collateral,  terminate any such Lien or release
any such  Subsidiary  Guarantor in connection  with a  Disposition  as permitted
hereby or by any of the other Credit  Documents or to which the Majority Lenders
have consented.


          Section 11. MISCELLANEOUS.


          11.01  WAIVER.  No  failure  on the part of the Agent or any Lender to
exercise and no delay in  exercising,  and no course of dealing with respect to,
any right,  power or privilege under this Agreement or any Note shall operate as
a waiver thereof,  nor shall any single or partial exercise of any right,  power
or  privilege  under this  Agreement  or any Note  preclude any other or further
exercise  thereof or the exercise of any other right,  power or  privilege.  The
remedies  provided  herein are  cumulative  and not  exclusive  of any  remedies
provided by law.

          11.02  NOTICES.  All notices  and other  communications  provided  for
herein  (including,  without  limitation,  any  modifications  of, or waivers or
consents under,  this Agreement or any Note) shall be given or made by telecopy,
telegraph,  cable or otherwise in writing and telecopied,  telegraphed,  cabled,
mailed or delivered to the intended recipient at (i) in the case of the Borrower
and the  Agent,  the  "Address  for  Notices"  specified  below  its name on the
signature pages hereof and (ii) in the case of each of the Lenders,  the address
(or telecopy number) set forth in its  Administrative  Questionnaire;  or, as to
any party,  at such  other  address  as shall be  designated  by such party in a
notice to each other party. Except as otherwise provided in this Agreement,  all
such communications  shall be deemed to have been duly given when transmitted by
telecopier,  delivered to the telegraph or cable office or personally  delivered
or,  in the  case of a  mailed  notice,  upon  receipt,  in each  case  given or
addressed as aforesaid.

          11.03  EXPENSES,  ETC. The Borrower agrees to pay or reimburse each of
the  Lenders  and the Agent  for:  (a) all  reasonable  out-of-pocket  costs and
expenses of the Agent (including,  without  limitation,  the reasonable fees and
expenses of Milbank,  Tweed, Hadley & McCloy, special New York counsel to Chase)
in connection with (i) the negotiation,  preparation,  execution and delivery of
this Agreement and the other Credit Documents, the making of the Loans hereunder
and the  syndication  of the  credit  facilities  hereby  provided  and (ii) the
negotiation or preparation of any  modification,  supplement or waiver of any of
the terms of this Agreement or any of the other Credit Documents (whether or not
consummated); (b) all reasonable out-of-pocket costs and expenses of the Lenders
and the Agent (including,  without limitation,  the reasonable fees and expenses
of legal  counsel) in  connection  with (i) any Default and any  enforcement  or
collection proceedings resulting therefrom,  including,  without limitation, all
manner of participation in or other involvement with (x) bankruptcy, insolvency,
receivership,  foreclosure,  winding up or liquidation proceedings, (y) judicial
or regulatory  proceedings and (z) workout,  restructuring or other negotiations
or  proceedings  (whether  or not  the  workout,  restructuring  or  transaction
contemplated  thereby is  consummated)  and (ii) the enforcement of this Section
11.03;  and (c)  all  transfer,  stamp,  documentary  or  other  similar  taxes,
assessments  or  charges  levied by any  governmental  or revenue  authority  in
respect of this  Agreement  or any of the other  Credit  Documents  or any other
document  referred  to  herein  or  therein  and  all  costs,  expenses,  taxes,
assessments   and  other  charges   incurred  in  connection  with  any  filing,
registration,  recording or perfection of any security interest  contemplated by
any Credit Document or any other document referred to therein.

          The Borrower  hereby agrees to indemnify the Agent,  each Lender,  the
Affiliates  of the Agent and of each  Lender  and  their  respective  directors,
officers,  employees,  attorneys and agents from, and hold each of them harmless
against, any and all losses,  liabilities,  claims, damages or expenses incurred
by any of them (including,  without limitation, any and all losses, liabilities,
claims,  damages or expenses incurred by the Agent or any Lender, whether or not
the Agent or any Lender is a party  thereto)  arising out of or by reason of any
investigation  or  litigation or other  proceedings  (including  any  threatened
investigation  or  litigation  or  other  proceedings)  relating  to  the  Loans
hereunder  or  any  actual  or  proposed  use  by  the  Borrower  or  any of its
Subsidiaries of the proceeds of any of the Loans hereunder,  including,  without
limitation,  the  reasonable  fees and  disbursements  of  counsel  incurred  in
connection with any such  investigation or litigation or other  proceedings (but
excluding any such losses, liabilities,  claims, damages or expenses incurred by
reason  of the  gross  negligence  or  willful  misconduct  of the  Person to be
indemnified).  Without  limiting the generality of the  foregoing,  the Borrower
will  indemnify  the Agent  and each  Lender  from,  and hold the Agent and each
Lender harmless against, any losses,  liabilities,  claims,  damages or expenses
described in the  preceding  sentence  (excluding,  as provided in the preceding
sentence,  any loss,  liability,  claim, damage or expense incurred by reason of
the gross  negligence  or willful  misconduct  of the Person to be  indemnified)
arising under any Environmental  Law as a result of the past,  present or future
operations of the Borrower or any of its  Subsidiaries  (or any  predecessor  in
interest to the Borrower or any of its  Subsidiaries),  or the past,  present or
future  condition of any site or facility owned,  operated or leased at any time
by the  Borrower  or any  of  its  Subsidiaries  (or  any  such  predecessor  in
interest), or any Release or threatened Release of any Hazardous Materials at or
from any such site or facility, including any such Release or threatened Release
that shall  occur  during any  period  when the Agent or any Lender  shall be in
possession  of any such site or facility  following the exercise by the Agent or
any  Lender of any of its  rights  and  remedies  hereunder  or under any of the
Security Documents.

          11.04 AMENDMENTS,  ETC. Except as otherwise expressly provided herein,
any  provision  of  this  Agreement  or the  Notes  or any of the  other  Credit
Documents  may be  amended  or  modified  only by an  instrument  signed  by the
Borrower and the Majority Lenders,  or by the Borrower and the Agent acting with
the written consent of the Majority Lenders, and any provision of this Agreement
or any of the other Credit Documents may be waived by the Majority Lenders or by
the Agent acting with the consent of the Majority Lenders; PROVIDED that no such
instrument  shall (i) increase  any  Commitment  of any Lender or the  aggregate
amount  of the  Commitments  (other  than,  in each  case,  as a  result  of the
execution and delivery of an Incremental Loan Activation  Notice), or extend the
date or  decrease  the amount of any  scheduled  reduction  thereof  pursuant to
Section  2.03  hereof,  without  the  written  consent of each  Lender  directly
affected  thereby,   (ii)  reduce  the  principal  amount  of  any  Loan  or  LC
Disbursement or reduce the rate of interest thereon,  or reduce any fees payable
hereunder, without the written consent of each Lender directly affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement,  or any interest thereon, or any fees payable hereunder,  or
reduce  the  amount  of,  waive or excuse  any such  payment,  or  postpone  the
scheduled date of reduction or expiration of any Commitment, without the written
consent of each Lender directly affected thereby, (iv) alter the manner in which
payments or prepayments of principal,  interest or other amounts hereunder shall
be applied  as among the  Lenders  or Types or  Classes  of Loans,  without  the
written  consent of each Lender,  (v) alter the  obligations  of the Borrower to
prepay  Loans  without the written  consent of each Lender or (vi) change any of
the  provisions of this Section 11.04 or the  definition of the terms  "Majority
Lenders" or "Majority  Revolving Credit Lenders",  or any other provision hereof
specifying  the number or  percentage  of Lenders  required  to waive,  amend or
modify any  rights  hereunder  or make any  determination  or grant any  consent
hereunder, without the written consent of each Lender; and PROVIDED FURTHER that
no such agreement shall amend,  modify or otherwise  affect the rights or duties
of the Agent, the Issuing Lender or the Swingline  Lender hereunder  without the
prior written consent of the Agent, the Issuing Lender or the Swingline  Lender,
as the case may be.

          11.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
permitted assigns.

          11.06 ASSIGNMENTS AND PARTICIPATIONS.


          (a) The Borrower may not assign its rights or obligations hereunder or
under the Notes without the prior consent of all of the Lenders and the Agent.

          (b) Each  Lender  may assign  any of its  Loans,  its  Notes,  and its
Commitments  (but only with the consent of the Borrower  and the Agent,  and, in
the case of any assignment of Revolving Credit  Commitments,  the Issuing Lender
and the Swingline  Lender,  which consent in each case shall not be unreasonably
withheld);  PROVIDED  that (i) no such consent  shall be required in the case of
any assignment to another  Lender,  an Affiliate of a Lender or an Approved Fund
with  respect  to a Lender or an  Affiliate  of a Lender  and no  consent by the
Borrower  shall be required if a Default has  occurred and is  continuing;  (ii)
each such assignment shall be in an amount at least equal to $5,000,000  (unless
(x) such  assignment  is to  another  Lender,  an  Affiliate  of a Lender  or an
Approved  Fund with respect to a Lender or an  Affiliate of a Lender,  (y) after
giving  effect  to  such  assignment  and all  other  such  assignments  by such
assigning  Lender  occurring  simultaneously  or  substantially   simultaneously
therewith, such assigning Lender shall hold no Commitments or Loans hereunder or
(z) the  Borrower  and  the  Agent  shall  otherwise  agree);  (iii)  each  such
assignment  by a Lender of its  Revolving  Credit  Exposure or Revolving  Credit
Commitment  (and obligation to acquire  participations  in Letters of Credit and
Swingline  Loans)  shall be made in such manner so that the same  portion of its
Revolving  Credit  Exposure and Revolving  Credit  Commitment (and obligation to
acquire  participations in Letters of Credit and Swingline Loans) is assigned to
the  respective  assignee;  (iv)  each  such  assignment  by  a  Lender  of  its
Incremental  Loans of a particular  Series or Incremental  Loan Commitments of a
particular  Series  shall be made in such manner so that the same portion of its
Incremental Loans of such Series and Incremental Loan Commitments of such Series
is assigned to the respective assignee; (v) the parties to each assignment shall
execute and deliver to the Agent an Assignment and  Acceptance,  together with a
processing and  recordation fee of $3,500;  and (vi) the assignee,  if it is not
already a Lender,  shall deliver to the Agent an  Administrative  Questionnaire.
Upon  acceptance and recording  pursuant to paragraph (d) of this Section 11.06,
from and after the effective date specified in each  Assignment and  Acceptance,
the assignee  thereunder  shall have, to the extent of such  assignment  (unless
otherwise  provided in such  assignment with the consent of the Borrower and the
Agent),  the obligations,  rights and benefits of a Lender hereunder holding the
Commitment(s),  Loans, LC Exposure and Swingline  Exposure (or portions thereof)
assigned  to it (in  addition  to the  Commitment(s),  Loans,  LC  Exposure  and
Swingline Exposure, if any, theretofore held by such assignee) and the assigning
Lender  shall,  to  the  extent  of  such  assignment,   be  released  from  the
Commitment(s) (or portion(s) thereof) so assigned.

          (c) MAINTENANCE OF REGISTER BY THE AGENT.  The Agent,  acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices in New
York  City a copy  of  each  Assignment  and  Acceptance  delivered  to it and a
register for the recordation of the names and addresses of the Lenders,  and the
Commitments of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive,  and the Borrower,  the Agent,  the
Issuing  Lender and the Lenders may treat each Person  whose name is recorded in
the Register pursuant to the terms hereof as a Lender hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower,  the Issuing Lender and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.

          (d) EFFECTIVENESS OF ASSIGNMENTS. Upon its receipt of a duly completed
Assignment and Acceptance  executed by an assigning Lender and an assignee,  the
assignee's  completed  Administrative  Questionnaire  (unless the assignee shall
already be a Lender  hereunder),  the processing and recordation fee referred to
in  paragraph  (b) of  this  Section  11.06  and  any  written  consent  to such
assignment  required by  paragraph  (b) of this Section  11.06,  the Agent shall
accept such  Assignment  and  Acceptance  and record the  information  contained
therein in the Register.  No assignment  shall be effective for purposes of this
Agreement  unless it has been  recorded  in the  Register  as  provided  in this
paragraph.

          (e) A Lender may sell or agree to sell to one or more other  Persons a
participation  in all or any part of its rights and  obligations  hereunder  and
under the other Credit Documents,  in which event each such participant shall be
entitled to the rights and benefits of the provisions of Section  8.01(k) hereof
with respect to its  participation in such rights and obligations as if (and the
Borrower shall be directly  obligated to such participant  under such provisions
as if) such participant were a "Lender" for purposes of said Section,  but shall
not have any other  rights or  benefits  under this  Agreement  or any Note (the
participant's  rights against such Lender in respect of such participation to be
those set forth in the agreement  (the  "PARTICIPATION  AGREEMENT")  executed by
such Lender in favor of the participant). All amounts payable by the Borrower to
any Lender under  Section 5 hereof shall be determined as if such Lender had not
sold or agreed  to sell any  participations  in such Loan and as if such  Lender
were  funding all of such Loan in the same way that it is funding the portion of
such Loan in which no participations  have been sold. In no event shall a Lender
that  sells  a  participation   be  obligated  to  the  participant   under  the
Participation  Agreement to take or refrain from taking any action  hereunder or
under such Lender's Note except that such Lender may agree in the  Participation
Agreement that it will not, without the consent of the participant, agree to (i)
the increase or extension of the term, or the extension of the time or waiver of
any requirement for the reduction or termination,  of such Lender's Commitments,
(ii) the extension of any date fixed for the payment of principal of or interest
on the  related  Loan  or  Loans  or any  portion  of any  fees  payable  to the
participant,  (iii) the reduction of any payment of principal thereof,  (iv) the
reduction  of the rate at which  either  interest is payable  thereon or (if the
participant is entitled to any part thereof) commitment fee is payable hereunder
to a level  below the rate at which  the  participant  is  entitled  to  receive
interest or commitment fee (as the case may be) in respect of such participation
or (v) release any collateral or otherwise terminate any Lien under the Security
Documents  (other than in connection with the Disposition of Property  permitted
hereunder or to which the Majority Lenders have consented hereunder).

          (f) In addition to the assignments and participations  permitted under
the foregoing  provisions of this Section 11.06,  any Lender may (without notice
to the Borrower,  the Agent or any other Lender and without  payment of any fee)
(i) assign  and  pledge all or any  portion of its Loans and its Notes to secure
obligations  of such Lender,  including  any such pledge to any Federal  Reserve
Bank pursuant to Regulation A and any Operating  Circular issued by such Federal
Reserve  Bank and this  Section  11.06  shall  not  apply to any such  pledge or
assignment of security interest and (ii) assign all or any portion of its rights
under this Agreement and its Loans and its Notes to an Affiliate of such Lender.
No such  assignment  shall  release the  assigning  Lender from its  obligations
hereunder.

          (g) A Lender may  furnish  any  information  concerning  the  Borrower
and/or any of its  Subsidiaries  in the  possession  of such Lender from time to
time  to  assignees  and  participants   (including  prospective  assignees  and
participants), subject, however, to the provisions of Section 11.12 hereof.

          (h) Anything in this Section 11.06 to the contrary notwithstanding, no
Lender may assign or  participate  any interest in any Loan held by it hereunder
to the Borrower or any of its  Subsidiaries or any Affiliates  without the prior
consent of each Lender.

          11.07  SURVIVAL.  The obligations of the Borrower under Sections 5.01,
5.05,  5.06 and 11.03 hereof,  and the  obligations of the Lenders under Section
10.05 hereof,  shall survive the repayment of the Loans and the  termination  of
the Commitments.  In addition,  each representation and warranty made, or deemed
to be made by a notice  of any  Loan or other  extension  of  credit  hereunder,
herein or pursuant  hereto shall survive the making of such  representation  and
warranty,  and no Lender shall be deemed to have waived, by reason of making any
Loan or other  extension  of credit  hereunder,  any  Default  that may arise by
reason  of such  representation  or  warranty  proving  to have  been  false  or
misleading, notwithstanding that such Lender or the Agent may have had notice or
knowledge or reason to believe that such representation or warranty was false or
misleading  at the time such Loan or other  extension  of credit  hereunder  was
made.

          11.08  CAPTIONS.  The  table of  contents  and  captions  and  section
headings  appearing  herein are included solely for convenience of reference and
are  not  intended  to  affect  the  interpretation  of any  provision  of  this
Agreement.

          11.09  COUNTERPARTS.  This  Agreement may be executed in any number of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument  and any of the parties  hereto may execute this Agreement by signing
any such counterpart.

          11.10 GOVERNING LAW;  SUBMISSION TO  JURISDICTION.  This Agreement and
the Notes shall be governed by, and construed in accordance with, the law of the
State of New York. The Borrower hereby submits to the nonexclusive  jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State  Court  sitting in New York  County for the  purposes  of all
legal  proceedings  arising  out  of  or  relating  to  this  agreement  or  the
transactions  contemplated  hereby.  The  Borrower  irrevocably  waives,  to the
fullest  extent  permitted by law, any  objection  which it may now or hereafter
have to the laying of the venue of any such  proceeding  brought in such a court
and any claim that any such proceeding  brought in such a court has been brought
in an inconvenient forum.

          11.11 WAIVER OF JURY TRIAL.  EACH OF THE  BORROWER,  THE AGENT AND THE
BANKS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

          11.12  CONFIDENTIALITY.  Each  Lender  and the  Agent  agrees  to keep
confidential,  in  accordance  with  their  customary  procedures  for  handling
confidential  information  of this nature and in accordance  with safe and sound
banking or investment  practices,  all non-public  information  provided to such
Lender by or on behalf of the Borrower or any of its  Subsidiaries or Affiliates
in connection  with this Agreement and identified as being  confidential  at the
time the same is delivered to the Lenders or the Agent; PROVIDED that any Lender
or the Agent  may  disclose  such  information  (a) to the  extent  required  by
statute,  rule,  regulation or judicial  process,  (b) to counsel for any of the
Lenders or the Agent,  (c) to  examiners,  auditors or  accountants,  (d) to the
Agent or any other Lender (or to Chase Securities  Inc.), (e) in connection with
any  litigation to which any one or more of the Lenders or the Agent is a party,
(f) to a subsidiary or Affiliate of any Lender or the Agent, (g) to any assignee
or participant (or prospective  assignee or participant) of or in any rights and
obligations  under this Agreement and the other Credit Documents so long as such
assignee or participant (or prospective  assignee or participant) first executes
and delivers to the respective  Lender a  confidentiality  agreement  containing
provisions  substantially  the same as those of this Section  11.12,  (h) to any
other  Person in the course of the  enforcement  of any  Lender's or the Agent's
rights or remedies  hereunder  or under any other  Credit  Document,  (i) to any
other creditor of any Obligor at any time during the  continuance of an Event of
Default or (j) that  subsequently  becomes  publicly  available  (other  than by
reason of a breach by any  Lender or the  Agent of its  obligations  under  this
Section 11.12).


<PAGE>



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



                                          JOURNAL REGISTER COMPANY


                                          By: /S/ JEAN B. CLIFTON
                                             -----------------------------------
                                             Title: Executive Vice President



<PAGE>








                                    LENDERS


                                              THE CHASE MANHATTAN BANK,
                                                 Individually, Issuing Lender,
                                                 Swingline and as Agent



                                              By /S/ DAVID G. STAPLES
                                                 -------------------------------
                                                 Title: Vice President



      ABN AMRO BANK N.V.                      BANK OF MONTREAL, CHICAGO BRANCH



      By /S/ WILLIAM S. BENNET                By /S/ KAREN KLAPPER
         --------------------------------        -------------------------------
         Title: Vice President                   Title: Director


      By /S/ ANN SCHWALBENBERG
         --------------------------------
         Title: Vice President



      THE BANK OF NEW YORK                    BANK OF TOKYO MITSUBISHI
                                              TRUST COMPANY


      By /S/ EDWARD F. RYAN, JR.              By /S/ GLENN B. ECKERT
         --------------------------------        -------------------------------
         Title: Senior Vice President            Title: Vice President


      BANKBOSTON, N.A.                        BANQUE NATIONALE DE PARIS



      By /S/ JENNIFER R. BURAS                By /S/ SERGE DESRAYAUD
         --------------------------------        -------------------------------
         Title: Director                         Title: Vice President


                                              By /S/ MARCUS JONES
                                                 -------------------------------
                                                 Title: Vice President



      CIBC INC.                               CITY NATIONAL BANK



      By /S/ HAROLD BIRK                      By /S/ DAVID C. BURGE
         --------------------------------        -------------------------------
         Title: Executive Director               Title: Senior Vice President
                CIBC Oppenheimer                                  
                Corp., As Agent


      COMPAGNIE FINANCIERE DE CIC             COOPERATIVE CENTRALE
      ET DE L'UNION EUROPEENNE                RAIFFEISEN-BOERENLEENBANK B.A.,
                                              "RABOBANK NEDERLAND", NEW YORK
                                              BRANCH
      By /S/ BRIAN O'LEARY
         --------------------------------
         Title: Vice President
                                              By /S/ W. PIETER C. KODDE
                                                 -------------------------------
                                                 Title: Vice President
      By /S/ SEAN MOUNIER
         --------------------------------
         Title: First Vice President
                                              By /S/ DANA W. HEMENWAY
                                                 -------------------------------
                                                 Title: Vice President



      CRESTAR BANK                            DAI-ICHI KANGYO BANK, LTD.



      By /S/ J. ERIC MILHAM                   By /S/ NANCY STENGEL
         --------------------------------        -------------------------------
         Title: Vice President                   Title: Assistant Vice President



      DRESDNER BANK AG, NEW YORK AND          FIRST HAWAIIAN BANK
      GRAND CAYMAN BRANCHES


                                              By /S/ JAMES C. POLK
                                                 -------------------------------
      By /S/ JANE MAJESKI                        Title: Assistant Vice President
         --------------------------------
         Title: First Vice President


      By /S/ BRIAN HAUGHNEY
         --------------------------------
         Title: Assistant Treasurer



      THE FIRST NATIONAL BANK OF              FIRST UNION NATIONAL BANK
      MARYLAND


                                              By /S/ DOUGLAS E. BLACKMAN
                                                 -------------------------------
      By /S/ W. BLAKE HAMPSON                    Title: Vice President
         --------------------------------
         Title: Vice President


      FLEET BANK N.A.                         GENERAL ELECTRIC CAPITAL
                                              CORPORATION


      By /S/ RUSS J. LOPINTO
         --------------------------------
         Title: Vice President                By /S/ JANET K. WILLIAMS
                                                 -------------------------------
                                                 Title: Duly Authorized
                                                        Signatory



      GREAT WEST LIFE & ANNUITY               KEY CORPORATE CAPITAL INC.
      INSURANCE COMPANY


                                              By /S/ KENNETH J. KEELER
                                                 -------------------------------
      By /S/ WAYNE T. HOFFMAN                    Title: Senior Portfolio
         --------------------------------               Manager
         Title: Vice President Investments

      By /S/ JAMES G. LOWERY
         --------------------------------
         Title: Assistant Vice President
                Investments


      KZH-CNC CORPORATION                     THE LONG-TERM CREDIT BANK OF
                                              JAPAN, LIMITED


      By /S/ VIRGINIA CONWAY
         --------------------------------
         Title: Authorized Signatory          By /S/ KEN YOSHIZAKI
                                                 -------------------------------
                                                 Title: Deputy General Manager



                                              MERRILL LYNCH SENIOR FLOATING
                                              RATE FUND, INC.




                                              By /S/ ANDREW C. LIGGIO
                                                 -------------------------------
                                                 Title: Authorized Signatory



      MICHIGAN NATIONAL BANK                  NATEXIS BANQUE BFCE



      By /S/ DRAGA B. PALINCAS                By /S/ EVAN S. KRAUS
         --------------------------------        -------------------------------
         Title: Relationship Manager             Title: Associate

                                              By /S/ WILLIAM C. MAIER
                                                 -------------------------------
                                                 Title: Vice President
                                                        Group Manager



      NATIONSBANK, N.A.                       PARIBAS



      By /S/ PAMELA S. KURTZMAN               By /S/ WILLIAM B. SCHINK
         --------------------------------        -------------------------------
         Title: Vice-President                   Title: Director


                                              By /S/ LYNNE S. RANDALL
                                                 -------------------------------
                                                 Title: Director



      PNC BANK, NATIONAL ASSOCIATION          THE ROYAL BANK OF SCOTLAND plc



      By /S/ KAREN L. KOOMAN                  By /S/ KAREN L. STEFANCIC
         --------------------------------        -------------------------------
         Title: Senior Banking Officer           Title: Vice President



      SUMMIT BANK                             SUNTRUST BANK CENTRAL FLORIDA,
                                              N.A.


      By /S/ HENRY G. KUSH, JR.
         --------------------------------
         Title: Vice President                By /S/ RONALD K. RUEVE
                                                 -------------------------------
                                                 Title: Vice President



      UNION BANK OF CALIFORNIA, N.A.          US TRUST



      By /S/ SONIA L. ISAACS                  By /S/ EASTMAN, D. G.
         --------------------------------        -------------------------------
         Title: Vice President                   Title: Vice President



<PAGE>







                                    LENDERS



      DEEPROCK & COMPANY
      By: Eaton Vance Management,
             as Investment Advisor


      By /S/ PAYSON F. SWAFFIELD
         --------------------------------
         Title: Vice President



<PAGE>



                                    LENDERS



      AMSOUTH BANK



      By /S/ BRYAN GRANTHAM
        ---------------------------------
        Title: Commercial Banking Officer

                                                                       EXHIBIT A
                                                                [CONFORMED COPY]




                           BORROWER SECURITY AGREEMENT

            BORROWER  SECURITY  AGREEMENT  dated  as of July  15,  1998  between
JOURNAL  REGISTER  COMPANY,  a corporation  duly organized and validly  existing
under the laws of the State of Delaware (the "BORROWER") and THE CHASE MANHATTAN
BANK, as  administrative  agent for the banks and other  financial  institutions
party to the Credit Agreement referred to below (in such capacity, together with
its successors in such capacity, the "AGENT").

            The  Borrower  and the  Agent are  parties  to a  Borrower  Security
Agreement dated as of May 13, 1997 (as heretofore  modified and supplemented and
in effect on the date  hereof,  the  "EXISTING  BORROWER  SECURITY  Agreement"),
pursuant to which the  Borrower  pledged and granted a security  interest in the
Collateral  (as so defined  in the  Existing  Borrower  Security  Agreement)  as
security  for the Secured  Obligations  (as so defined)  including,  INTER ALIA,
obligations  of the Borrower  under a Credit  Agreement  dated as of May 2, 1997
with certain banks and the Agent (as heretofore modified and supplemented and in
effect  on the  date  of  this  Agreement,  the  "EXISTING  CREDIT  AGREEMENT").
Substantially   concurrently  herewith,  the  parties  to  the  Existing  Credit
Agreement  are amending in certain  respects  and  restating in its entirety the
Existing Credit  Agreement  pursuant to a Credit  Agreement dated as of the date
hereof (as modified and in effect from time to time, the CREDIT AGREEMENT").

            To  induce  said  banks  and the  Agent  to enter  into  the  Credit
Agreement  and to extend  credit  thereunder,  and for other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower  has agreed to pledge and grant a security  interest in the  Collateral
(as  hereinafter  defined)  as  security  for  the  Secured  Obligations  (as so
defined),  and to confirm the prior  pledge and grant of a security  interest in
the  "Collateral"  (as  defined in the  Existing  Borrower  Security  Agreement)
pursuant to the Existing Borrower  Security  Agreement and in that connection to
amend and restate in its  entirety  the Existing  Borrower  Security  Agreement.
Accordingly, the parties hereto hereby agree as follows:

            Section 1.  DEFINITIONS.  Terms defined in the Credit Agreement
are used herein as defined therein.  In addition, as used herein:

            "ACCOUNTS"  shall  have  the  meaning  ascribed  thereto  in Section
      3(d) hereof.

            "BUSINESS"  shall mean the  business  of  newspaper  publishing  and
      offset  printing  and the  other  businesses  from  time to  time,  now or
      hereafter, conducted by the Borrower and its Subsidiaries.

            "COLLATERAL" shall  have  the  meaning ascribed thereto in Section 3
      hereof.

            "COLLATERAL  ACCOUNT"  shall have the  meaning  ascribed  thereto in
      Section 4.01 hereof.

            "COPYRIGHT COLLATERAL" shall mean all Copyrights,  whether now owned
      or  hereafter  acquired  by the  Borrower,  that are  associated  with the
      Business, including each Copyright identified in Annex 2 hereto.

            "COPYRIGHTS" shall mean all copyrights,  copyright registrations and
      applications for copyright registrations,  including,  without limitation,
      all renewals and  extensions  thereof,  the right to recover for all past,
      present and future infringements thereof, and all other rights of any kind
      whatsoever accruing thereunder or pertaining thereto.

            "DOCUMENTS" shall  have  the  meaning  ascribed  thereto in  Section
      3(j) hereof.

            "EQUIPMENT" shall  have  the  meaning  ascribed  thereto  in Section
      3(h) hereof.

            "EQUITY  COLLATERAL"  shall  mean,   collectively,   the  Collateral
      described  in clauses (a) through (c) of Section 3 hereof and the proceeds
      of and to any  such  property  and,  to the  extent  related  to any  such
      property  or such  proceeds,  all  books,  correspondence,  credit  files,
      records, invoices and other papers.

            "INSTRUMENTS" shall  have  the  meaning  ascribed thereto in Section
      3(e) hereof.

            "INTELLECTUAL  PROPERTY"  shall mean,  collectively,  all  Copyright
      Collateral,  all Patent Collateral and all Trademark Collateral,  together
      with  (a)  all  inventions,  processes,  production  methods,  proprietary
      information,  know-how and trade  secrets used or useful in the  Business;
      (b) all licenses or user or other agreements  granted to the Borrower with
      respect to any of the  foregoing,  in each case  whether now or  hereafter
      owned  or used  including,  without  limitation,  the  licenses  or  other
      agreements with respect to the Copyright Collateral, the Patent Collateral
      or the Trademark Collateral listed in Annex 5 hereto; (c) all information,
      customer lists,  identification  of suppliers,  data,  plans,  blueprints,
      specifications,    designs,   drawings,   recorded   knowledge,   surveys,
      engineering   reports,   test  reports,   manuals,   materials  standards,
      processing  standards,   performance  standards,  catalogs,  computer  and
      automatic machinery software and programs,  and the like pertaining to the
      operation  by the  Borrower of the  Business;  (d) all field  repair data,
      sales data and other information  relating to sales or service of products
      now or hereafter  manufactured and which pertain to the Business;  (e) all
      accounting  information  which  pertains to the  Business and all media in
      which or on which any of the  information  or knowledge or data or records
      which  pertain to the  Business may be recorded or stored and all computer
      programs  used  for the  compilation  or  printout  of  such  information,
      knowledge,   records  or  data;  (f)  all  licenses,   consents,  permits,
      variances,  certifications  and approvals of governmental  agencies now or
      hereafter held by the Borrower pertaining to the operation by the Borrower
      and its Subsidiaries of the Business; and (g) all causes of action, claims
      and  warranties  now or  hereafter  owned or acquired  by the  Borrower in
      respect of any of the items listed above.

            "INTER-COMPANY NOTES" shall mean, collectively, each promissory note
      issued by any Subsidiary  Guarantor and owing to the Borrower or any other
      Subsidiary  Guarantor,  whether now  existing or  hereinafter  coming into
      existence.

            "INVENTORY" shall  have  the  meaning  ascribed  thereto  in Section
      3(f) hereof.

            "ISSUERS" shall mean each direct Subsidiary of the Borrower.

            "MOTOR VEHICLES" shall mean motor vehicles,  tractors,  trailers and
      other like  property,  whether or not the title  thereto is  governed by a
      certificate of title or ownership.

            "PATENT  COLLATERAL"  shall mean all  Patents,  whether now owned or
      hereafter acquired by the Borrower, that are associated with the Business,
      including each Patent identified in Annex 3 hereto.

            "PATENTS" shall mean all patents and patent applications, including,
      without limitation,  the inventions and improvements described and claimed
      therein together with the reissues,  divisions,  continuations,  renewals,
      extensions  and  continuations-in-part  thereof,  all  income,  royalties,
      damages and payments now or hereafter  due and/or  payable  under and with
      respect thereto, including,  without limitation,  damages and payments for
      past or future  infringements  thereof, the right to sue for past, present
      and future infringements  thereof,  and all rights  corresponding  thereto
      throughout the world.

            "PLEDGED  EQUITY" shall have the meaning ascribed thereto in Section
      3(a) hereof.

            "SECURED OBLIGATIONS" shall mean, collectively,  (a) the obligations
      of the Borrower to pay the principal of and interest on the Loans made (or
      as of the Effective Date, continued) by the Lenders to, and the Notes held
      by each Lender of, the  Borrower  and all other  amounts from time to time
      owing  to the  Lenders  or the  Agent by the  Borrower  under  the  Credit
      Agreement  (including,   without  limitation,  all  LC  Disbursements  and
      interest thereon) and the Notes and interest thereon,  (b) the obligations
      of the  Borrower  and/or any of its  Subsidiaries  to pay all amounts from
      time to time  owing to any  Lender  or any  Affiliate  of a Lender  by the
      Borrower  and/or  any of  its  Subsidiaries  in  respect  of  any  Hedging
      Agreement  entered into by the Borrower and/or any of its Subsidiaries and
      such Lender or such Affiliate,  (c) the obligations of the Borrower to pay
      all  amounts  owing  from time to time in  respect of letters of credit or
      similar  instruments  issued under Section 8.07(g) of the Credit Agreement
      issued by any  Lender or any  Affiliate  of a Lender  for  account  of the
      Borrower  and (d) all  obligations  of the Borrower to the Lenders and the
      Agent  hereunder  and under the other  Credit  Documents  (other  than the
      Credit Agreement and the Notes) to which the Borrower is a party.

            "TRADEMARK COLLATERAL" shall mean all Trademarks,  whether now owned
      or  hereafter  acquired  by the  Borrower,  that are  associated  with the
      Business,   including  each  Trademark   identified  in  Annex  4  hereto.
      Notwithstanding the foregoing, the Trademark Collateral does not and shall
      not include any Trademark which would be rendered invalid, abandoned, void
      or  unenforceable by reason of its being included as part of the Trademark
      Collateral.

            "TRADEMARKS"  shall mean all trade  names,  trademarks  and  service
      marks, logos,  trademark and service mark registrations,  and applications
      for  trademark  and  service  mark   registrations,   including,   without
      limitation, all renewals of trademark and service mark registrations,  all
      rights  corresponding  thereto  throughout the world, the right to recover
      for all past, present and future  infringements  thereof, all other rights
      of  any  kind  whatsoever   accruing  thereunder  or  pertaining  thereto,
      together,  in each  case,  with the  product  lines  and  goodwill  of the
      business  connected  with the use of, and  symbolized  by, each such trade
      name, trademark and service mark.

            "UNIFORM  COMMERCIAL CODE" shall mean the Uniform Commercial Code as
      in effect in the State of New York from time to time.

            Section 2.  REPRESENTATIONS AND WARRANTIES.  The Borrower represents
and warrants to the Lenders and the Agent that:

            (a) the Borrower is the sole  beneficial  owner of the Collateral in
      which it  purports  to grant a  security  interest  pursuant  to Section 3
      hereof and no Lien  exists or will exist upon any such  Collateral  at any
      time (and,  with respect to the Equity  Collateral,  no right or option to
      acquire  the same exists in favor of any other  Person),  except for Liens
      permitted  under  Section 8.06 of the Credit  Agreement and except for the
      pledge and security  interest in favor of the Agent for the benefit of the
      Lenders created or provided for herein which pledge and security  interest
      constitutes a first priority perfected pledge and security interest in and
      to all of such Collateral (other than Intellectual  Property registered or
      otherwise located outside of the United States of America);

            (b) the Pledged Equity evidenced by the  certificates  identified in
      Annex 1 hereto  is,  and all other  Pledged  Equity in which the  Borrower
      shall  hereafter  grant a security  interest  pursuant to Section 3 hereof
      will be, duly authorized, validly issued, fully paid and nonassessable (in
      the case of any equity  interest  in a  corporation)  and duly  issued and
      outstanding  (in the case of any equity  interest in any other entity) and
      none of such  Pledged  Equity  is or will be  subject  to any  contractual
      restriction,  or any restriction under the charter,  by-laws,  partnership
      agreement,  limited liability  company  agreement or other  organizational
      document  of the  respective  Issuers  of such  Pledged  Equity,  upon the
      transfer of such Pledged Equity (except for any such restriction contained
      herein or in the Credit Agreement);

            (c) the Pledged Equity identified in Annex 1 hereto  constitutes all
      of the  issued  and  outstanding  shares  of  capital  stock,  partnership
      interest,  limited  liability  company or other ownership  interest of any
      class or  character of the Issuers  beneficially  owned by the Borrower on
      the date hereof  (whether or not  registered  in the name of the Borrower)
      and  said  Annex  1  correctly  identifies,  as at the  date  hereof,  the
      respective  Issuers of such Pledged Equity,  the respective  class and (in
      the case of any corporate  Issuer) par value of the shares comprising such
      Pledged Equity and the respective  number of shares (and registered  owner
      thereof) evidenced by each such certificate;

            (d)  Annexes 2, 3 and 4 hereto,  respectively,  set forth a complete
      and correct list of all  Copyrights,  Patents and Trademarks  owned by the
      Borrower on the date  hereof;  except  pursuant to licenses and other user
      agreements  entered  into  by the  Borrower  in  the  ordinary  course  of
      business,  which  are  listed  in Annex 5 hereto,  the  Borrower  owns and
      possesses  the right to use,  and has done  nothing to authorize or enable
      any other Person to use, any Copyright, Patent or Trademark listed in said
      Annexes 2, 3 and 4, and all registrations  listed in said Annexes 2, 3 and
      4 are valid and in full  force and  effect;  except as may be set forth in
      said  Annex  5,  the  Borrower  owns and  possesses  the  right to use all
      Copyrights,  Patents and  Trademarks  necessary  for the  operation of the
      Business;

            (e) Annex 5 hereto  sets forth a complete  and  correct  list of all
      licenses and other user agreements  included in the Intellectual  Property
      on the date hereof;

            (f) to the Borrower's knowledge,  (i) except as set forth in Annex 5
      hereto,  there is no violation by others of any right of the Borrower with
      respect to any Copyright, Patent or Trademark listed in Annexes 2, 3 and 4
      hereto and (ii) the  Borrower is not,  in  connection  with the  Business,
      infringing in any respect upon any  Copyright,  Patent or Trademark of any
      other  Person;  and no  proceedings  have been  instituted  or are pending
      against the Borrower or, to the Borrower's knowledge,  threatened,  and no
      claim against the Borrower has been received by the Borrower, alleging any
      such violation, except as may be set forth in said Annex 5;

            (g) the  Borrower  does  not own any  Trademarks  registered  in the
      United States of America to which the last  sentence of the  definition of
      Trademark Collateral applies;

            (h) any goods now or  hereafter  produced by the  Borrower or any of
      its Subsidiaries included in the Collateral have been and will be produced
      in compliance  with the  requirements  of the Fair Labor Standards Act, as
      amended; and

            (i) Annex 6 hereto  correctly and completely  specifies the location
      of the  chief  executive  office or  principal  place of  business  of the
      Borrower and also  correctly and  completely  specifies the place at which
      all Inventory or Equipment of the Borrower is located.

            Section 3. COLLATERAL. As collateral security for the prompt payment
in full when due (whether at stated  maturity,  by acceleration or otherwise) of
the Secured  Obligations,  the Borrower  hereby  pledges and grants to the Agent
(and  confirms the prior pledge and grant to the Agent  pursuant to the Existing
Borrower  Security  Agreement,  which are hereby confirmed  hereunder),  for the
benefit of the Lenders as hereinafter  provided,  a security  interest in all of
the  Borrower's  right,  title and  interest  in,  to and  under  the  following
property,  whether now owned by the Borrower or  hereafter  acquired and whether
now existing or hereafter coming into existence, and wherever located (all being
collectively referred to herein as "COLLATERAL"):

            (a) the shares of capital stock (whether common or preferred) of, or
      partnership, limited liability company or other ownership interest in, the
      respective  Issuers  identified  in Annex 1 hereto and all other shares of
      capital stock or partnership, limited liability company or other ownership
      interest of whatever  class or character of the Issuers,  now or hereafter
      owned  by the  Borrower,  together  with in  each  case  the  certificates
      evidencing the same (collectively, the "PLEDGED EQUITY");

            (b) all  shares,  securities,  moneys  or  property  representing  a
      dividend on any of the Pledged  Equity,  or representing a distribution or
      return of capital upon or in respect of the Pledged  Equity,  or resulting
      from a split-up,  revision,  reclassification  or other like change of the
      Pledged  Equity  or  otherwise  received  in  exchange  therefor,  and any
      subscription  warrants,  rights or options  issued to the  holders  of, or
      otherwise in respect of, the Pledged Equity;

            (c) without  affecting  the  obligations  of the Borrower  under any
      provision prohibiting such action hereunder or under the Credit Agreement,
      in the event of any consolidation or merger in which any Issuer is not the
      surviving entity, all ownership interests of any class or character of the
      successor  entity  (unless such successor  entity is the Borrower  itself)
      formed by or resulting from such consolidation or merger;

            (d) all  accounts  and general  intangibles  (each as defined in the
      Uniform  Commercial  Code) of the Borrower  constituting  any right to the
      payment of money,  including  (but not  limited  to) all moneys due and to
      become due to the  Borrower  in respect of any loans or  advances  for the
      purchase  price of Inventory or Equipment or other goods sold or leased or
      for  services  rendered,  all moneys due and to become due to the Borrower
      under any guarantee  (including a letter of credit) of the purchase  price
      of Inventory or Equipment sold by the Borrower and all tax refunds and any
      and all rights of the  Borrower  in any escrow or trust  account,  whether
      fixed or contingent,  and, upon the  termination or revocation  thereof or
      return of sums contained in any escrow or trust account or otherwise,  any
      and all  amounts due to, to become due to, or  received  by, the  Borrower
      therefrom, whether as a result of one or more orders of a Bankruptcy Court
      or otherwise  (such  accounts,  general  intangibles and moneys due and to
      become due being herein called collectively "ACCOUNTS");

            (e) all Inter-company Notes,  instruments,  chattel paper or letters
      of credit (each as defined in the Uniform Commercial Code) of the Borrower
      including,   without   limitation,   any  of  the  foregoing   evidencing,
      representing,  arising  from or  existing  in  respect  of,  relating  to,
      securing or  otherwise  supporting  the  payment of, any of the  Accounts,
      including  (but  not  limited  to)  promissory  notes,  drafts,  bills  of
      exchange,   trade   acceptances  and  the   Inter-company   Notes  (herein
      collectively called "INSTRUMENTS");

            (f) all inventory (as defined in the Uniform Commercial Code) of the
      Borrower,  including Motor Vehicles held by the Borrower for lease,  fuel,
      tires  and other  spare  parts,  all goods  obtained  by the  Borrower  in
      exchange for such inventory,  and any products made or processed from such
      inventory including all substances,  if any, commingled therewith or added
      thereto (herein collectively called "INVENTORY");

            (g)   all  Intellectual Property  and  all other accounts or general
      intangibles  of  the  Borrower  not  constituting Intellectual Property or
      Accounts;

            (h) all equipment (as defined in the Uniform Commercial Code) of the
      Borrower,  including  all  Motor  Vehicles  used in the  Business  (herein
      collectively called "EQUIPMENT");

            (i)   each  contract and other agreement of the Borrower relating to
      the sale or other disposition of Inventory or Equipment;

            (j) all  documents  of title (as defined in the  Uniform  Commercial
      Code)  or  other  receipts  of  the  Borrower   covering,   evidencing  or
      representing   Inventory  or   Equipment   (herein   collectively   called
      "DOCUMENTS");

            (k) all  rights,  claims and  benefits of the  Borrower  against any
      Person  arising out of,  relating to or in  connection  with  Inventory or
      Equipment purchased by the Borrower,  including,  without limitation,  any
      such rights, claims or benefits against any Person storing or transporting
      such Inventory or Equipment;

            (l)   the balance from time to time in the Collateral Account;

            (m) all  tangible  property  (including  all  machinery,  apparatus,
      equipment,   fittings,   personal   property,   and  any  other   fixtures
      whatsoever),  now or hereafter located on or attached to real estate,  and
      any and all products and  accessions to any such property  which may exist
      at any time;

            (n) all  rents,  revenues,  proceeds,  issues,  profits,  royalties,
      income  and  other  benefits  derived  from  real  estate,  and  from  any
      improvements or fixtures thereon;

            (o) all  proceeds of  insurance  in effect with  respect to any real
      estate, or with respect to improvements or fixtures  thereon,  and any and
      all awards made for the taking by eminent domain,  or by any proceeding or
      purchase in lieu  thereof,  of any real  estate,  or any  improvements  or
      fixtures thereon,  including without  limitation any awards resulting from
      any  damage  to any  real  estate,  improvements  or  fixtures  for  which
      compensation shall be given by any governmental authority; and

            (p) all other  tangible  and  intangible  property of the  Borrower,
      including, without limitation, proceeds, products and accessions of and to
      any of the property of the  Borrower  described in clauses (a) through (o)
      above in this Section 3 (including,  without  limitation,  any proceeds of
      insurance  thereon),  and, to the extent related to any property described
      in said  clauses or such  proceeds,  products and  accessions,  all books,
      correspondence,   credit  files,  records,   invoices  and  other  papers,
      including,  without limitation,  all tapes, cards, computer runs and other
      papers  and  documents  in the  possession  or under  the  control  of the
      Borrower  or any  computer  bureau or  service  company  from time to time
      acting for the Borrower.

            Section 4.  CASH PROCEEDS OF COLLATERAL.

            4.01 COLLATERAL  ACCOUNT.  There has heretofore been  established at
Chase a cash  collateral  account  (the  "COLLATERAL  ACCOUNT"),  which may be a
"securities  account"  (as defined in Section  8-501 of the  Uniform  Commercial
Code,  in the name and under the sole dominion and control of the Agent (and, in
the  case of a  securities  account,  in  respect  of  which  the  Agent  is the
"entitlement   holder"  (as  defined  in  Section  8-102(a)(7)  of  the  Uniform
Commercial  Code)),  into which there shall be  deposited  from time to time the
cash proceeds of any of the Collateral (including proceeds of insurance thereon)
required  to be  delivered  to the  Agent  pursuant  hereto  and into  which the
Borrower may from time to time deposit any additional amounts which it wishes to
pledge to the Agent for the  benefit  of the  Lenders as  additional  collateral
security  hereunder  or that,  as  provided  in  Section  2.10(k)  of the Credit
Agreement,  the Borrower is required to pledge as collateral security hereunder.
The balance from time to time in the Collateral Account shall constitute part of
the  Collateral  hereunder  and  shall not  constitute  payment  of the  Secured
Obligations until applied as hereinafter provided.  Except as expressly provided
in the next sentence, the Agent shall remit the collected balance outstanding to
the credit of the Collateral Account to or upon the order of the Borrower as the
Borrower  shall from time to time instruct.  However,  at any time following the
occurrence  and during the  continuance  of an Event of  Default,  the Agent may
(and,  if  instructed  by such of the Lenders as are  required  for such purpose
under the Credit Agreement, shall), in its (or their) discretion, apply or cause
to be applied  (subject to collection) the balance from time to time outstanding
to  the  credit  of  the  Collateral  Account  to the  payment  of  the  Secured
Obligations  in the manner  specified in Section  5.09 hereof.  The balance from
time to time in the  Collateral  Account shall be subject to withdrawal  only by
the Agent and only as provided herein.

            4.02  PROCEEDS OF ACCOUNTS.  Except as permitted by Section  5.01(b)
hereof,  the  Borrower  shall  instruct  all account  debtors and other  Persons
obligated  in respect of all  Accounts  to make all  payments  in respect of the
Accounts either (a) directly to the Agent (by instructing  that such payments be
remitted  to a post  office box which shall be in the name and under the control
of the Agent) or (b) to one or more other banks in the United  States of America
(by instructing  that such payments be remitted to a post office box which shall
be in the name and under the control of the Agent) under  arrangements,  in form
and substance  satisfactory  to the Agent,  pursuant to which the Borrower shall
have  irrevocably  instructed  such  other  bank (and such other bank shall have
agreed) to remit all proceeds of such payments directly to the Agent for deposit
into the Collateral Account.  All payments made to the Agent, as provided in the
preceding sentence, shall be immediately deposited in the Collateral Account. In
addition to the  foregoing,  the  Borrower  agrees  that if the  proceeds of any
Collateral  hereunder  (including payments made in respect of Accounts) shall be
received by it, the Borrower shall as promptly as possible deposit such proceeds
into the Collateral Account. Until so deposited, all such proceeds shall be held
in trust by the  Borrower  for and as the property of the Agent (for the benefit
of the Lenders) and shall not be commingled  with any other funds or property of
the Borrower.

            4.03 INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT. Amounts on deposit
in the  Collateral  Account  shall be  invested  from  time to time in such Cash
Equivalents as the Borrower (or, after the occurrence and during the continuance
of a Default,  the Agent) shall determine,  which Cash Equivalents shall be held
in the name and be under the control of the Agent, provided that (i) at any time
after the  occurrence  and during the  continuance  of an Event of Default,  the
Agent may (and,  if  instructed  by such of the Lenders as are required for such
purpose under the Credit  Agreement,  shall) in its (or their) discretion at any
time and from time to time elect to liquidate any such Cash  Equivalents  and to
apply or cause to be applied the proceeds  thereof to the payment of the Secured
Obligations in the manner specified in Section 5.09 hereof and (ii) if requested
by the  Borrower,  such Cash  Equivalents  may be held in the name and under the
control of one or more of the Lenders.

            4.04 COVER FOR LC EXPOSURE.  Amounts  deposited  into the Collateral
Account as cover for LC Exposure under the Credit Agreement  pursuant to Section
2.09(a),   (b)  or  (c)  or  Section  2.10(k)  thereof  shall  be  held  by  the
Administrative  Agent  in  a  separate  sub-account   (designated  "LC  Exposure
Sub-Account")  and  all  amounts  held  in  such  sub-account  shall  constitute
collateral security FIRST for the LC Exposure  outstanding from time to time and
SECOND as collateral security for the other Secured Obligations hereunder.

            Section 5. FURTHER ASSURANCES; REMEDIES. In furtherance of the grant
of the pledge and security interest  pursuant to Section 3 hereof,  the Borrower
hereby agrees with each Lender and the Agent as follows:

            5.01  DELIVERY AND OTHER PERFECTION.  The Borrower shall:

            (a) if any of the  above-described  shares,  securities,  monies  or
      property required to be pledged by the Borrower under clauses (a), (b) and
      (c) of Section 3 hereof are received by the Borrower, forthwith either (x)
      transfer and deliver to the Agent such shares or securities so received by
      the  Borrower  (together  with the  certificates  for any such  shares and
      securities  duly endorsed in blank or  accompanied by undated stock powers
      duly  executed  in  blank)  all of which  thereafter  shall be held by the
      Agent, pursuant to the terms of this Agreement,  as part of the Collateral
      (and until so  transferred  and  delivered to the Agent,  all such shares,
      securities,  monies or property shall be held in trust by the Borrower for
      and as the  property of the Agent (for the benefit of the  Lenders) or (y)
      take such other action as the Agent shall deem necessary or appropriate to
      duly record the Lien created hereunder in such shares, securities,  monies
      or property referred to in said clauses (a), (b) and (c);

            (b) deliver and pledge to the Agent (for the benefit of the Lenders)
      any and all Instruments,  including, without limitation, all Inter-company
      Notes,  endorsed and/or  accompanied by such instruments of assignment and
      transfer in such form and  substance  as the Agent may  request;  PROVIDED
      that so long as no Default  shall have  occurred  and be  continuing,  the
      Borrower may retain for collection in the ordinary  course any Instruments
      received by it in the  ordinary  course of business  and the Agent  shall,
      promptly upon request of the Borrower,  make appropriate  arrangements for
      making any other  Instrument  pledged by the Borrower  available to it for
      purposes of  presentation,  collection or renewal (any such arrangement to
      be effected,  to the extent deemed appropriate by the Agent, against trust
      receipt or like document);  PROVIDED,  FURTHER, that so long as no Default
      shall have occurred and be continuing,  if any Inter-company  Note pledged
      by the  Borrower  has been  transferred  by the  Borrower to a  Subsidiary
      Guarantor as permitted by Section 8.05(c)(iv) of the Credit Agreement, the
      Agent  shall,  promptly  upon the request of the  Borrower,  deliver  such
      Inter-company Note to such Subsidiary  Guarantor for purposes of effecting
      such transfer,  PROVIDED that,  except in connection with the cancellation
      of such Inter-company  Note, the Agent shall receive in exchange therefor,
      a substitute  Inter-company Note payable to the such Subsidiary  Guarantor
      in a like aggregate unpaid principal amount;

            (c)  give,  execute,  deliver,  file  and/or  record  any  financing
      statement,  notice, instrument,  document,  agreement or other papers that
      may be necessary  or  desirable  (in the judgment of the Agent) to create,
      preserve,  perfect or validate  any  security  interest  granted  pursuant
      hereto or to enable the Agent to exercise and enforce its rights hereunder
      with respect to such security  interest,  including,  without  limitation,
      causing any or all of the Equity  Collateral to be  transferred  of record
      into the name of the Agent or its  nominee  (and the Agent  agrees that if
      any  Equity  Collateral  is  transferred  into its name or the name of its
      nominee, the Agent will thereafter promptly give to the Borrower copies of
      any notices and  communications  received by it with respect to the Equity
      Collateral  pledged by the Borrower  hereunder),  provided that notices to
      account debtors in respect of any Accounts or Instruments shall be subject
      to the provisions of clause (i) below;

            (d) without  limiting the  obligations of the Borrower under Section
      5.04(c) hereof, upon the acquisition after the date hereof by the Borrower
      of any Equipment covered by a certificate of title or ownership, cause the
      Agent to be  listed as the  lienholder  on such  certificate  of title and
      within 120 days of the acquisition thereof deliver evidence of the same to
      the Agent;

            (e)  keep  full and  accurate  books  and  records  relating  to the
      Collateral,  and stamp or  otherwise  mark such books and  records in such
      manner  as the  Agent  may  reasonably  require  in order to  reflect  the
      security interests granted by this Agreement;

            (f)  furnish to the Agent  from time to time (but,  unless a Default
      shall have occurred and be continuing,  no more frequently than quarterly)
      statements and schedules further  identifying and describing the Copyright
      Collateral,   the  Patent   Collateral   and  the  Trademark   Collateral,
      respectively,  and such other  reports in  connection  with the  Copyright
      Collateral,  the Patent  Collateral and the Trademark  Collateral,  as the
      Agent may reasonably request, all in reasonable detail;

            (g)  promptly  upon request of the Agent,  following  receipt by the
      Agent of any  statements,  schedules  or  reports  pursuant  to clause (f)
      above,  modify this Agreement by amending  Annex 2, 3 or 4 hereto,  as the
      case may be, to include any Copyright,  Patent or Trademark  which becomes
      part of the Collateral under this Agreement;

            (h) permit  representatives of the Agent, upon reasonable notice, at
      any time during normal  business  hours to inspect and make abstracts from
      its  books  and  records   pertaining  to  the   Collateral,   and  permit
      representatives  of the Agent to be  present  at the  Borrower's  place of
      business to receive copies of all communications and remittances  relating
      to the  Collateral,  and forward  copies of any notices or  communications
      received by the Borrower with respect to the Collateral all in such manner
      as the Agent may require;

            (i) upon the occurrence  and during the  continuance of any Default,
      upon  request of the  Agent,  promptly  notify  (and the  Borrower  hereby
      authorizes  the Agent so to notify) each account  debtor in respect of any
      Accounts or  Instruments  that such  Collateral  has been  assigned to the
      Agent hereunder,  and that any payments due or to become due in respect of
      such Collateral are to be made directly to the Agent; and

            (j) in the event of any  termination,  revocation  or return of sums
      contained  in any  escrow  account,  trust  account  or  escrow  or  trust
      arrangement  in which  the  Borrower  has a direct or  indirect  interest,
      whether legal or equitable,  promptly deposit any amounts recovered by the
      Borrower from any such account or from any Person who theretofore received
      any such  amount  from  any such  account,  directly  into the  Collateral
      Account.

            5.02  OTHER  FINANCING  STATEMENTS  AND LIENS.  Except as  otherwise
permitted under Section 8.06 of the Credit Agreement,  without the prior written
consent of the Agent (granted with the  authorization  of such of the Lenders as
are required for such purpose under the Credit  Agreement),  the Borrower  shall
not file or suffer to be on file, or authorize or permit to be filed or to be on
file, in any  jurisdiction,  any  financing  statement or like  instrument  with
respect to the  Collateral  in which the Agent is not named as the sole  secured
party for the benefit of the Lenders.

            5.03 PRESERVATION OF RIGHTS. The Agent shall not be required to take
steps  necessary  to preserve  any rights  against  prior  parties to any of the
Collateral.

            5.04  SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.

            (a)  EQUITY COLLATERAL.

            (1) The Borrower  will cause the Equity  Collateral to constitute at
all times 100% of the  ownership  interests  of any class or  character  of each
Issuer then outstanding.

            (2) So long as no  Event  of  Default  shall  have  occurred  and be
continuing, the Borrower shall have the right to exercise all voting, consensual
and other  powers of  ownership  pertaining  to the  Equity  Collateral  for all
purposes  not  inconsistent  with  the  terms  of  this  Agreement,  the  Credit
Agreement,  the Notes or any other instrument or agreement referred to herein or
therein,  provided  that the  Borrower  agrees  that it will not vote the Equity
Collateral in any manner that is inconsistent  with the terms of this Agreement,
the Credit Agreement,  the Notes or any such other instrument or agreement;  and
the Agent shall  execute and deliver to the Borrower or cause to be executed and
delivered  to the Borrower all such  proxies,  powers of attorney,  dividend and
other orders,  and all such instruments,  without recourse,  as the Borrower may
reasonably  request  for the purpose of enabling  the  Borrower to exercise  the
rights and powers  which it is  entitled to  exercise  pursuant to this  Section
5.04(a)(2).

            (3)  Unless  and  until an  Event of  Default  has  occurred  and is
continuing,  but  subject  to the  provisions  of  Section  8.09  of the  Credit
Agreement which limit the right of the Borrower and its  Subsidiaries to declare
or make any  Restricted  Payment,  the Borrower shall be entitled to receive and
retain any dividends or distributions in respect of the Equity Collateral.

            (4) If any Event of  Default  shall have  occurred,  then so long as
such Event of Default shall continue, and whether or not the Agent or any Lender
exercises any available right to declare any Secured  Obligation due and payable
or seeks or pursues any other relief or remedy  available to it under applicable
law or under this Agreement,  the Credit Agreement, any other Credit Document or
any other agreement relating to such Secured Obligation, all dividends and other
distributions  on the Equity  Collateral shall be paid directly to the Agent and
retained  by it in the  Collateral  Account  as part of the  Equity  Collateral,
subject to the terms of this  Agreement,  and,  if the Agent shall so request in
writing,  the  Borrower  agrees to execute and deliver to the Agent  appropriate
additional  dividend,  distribution  and other orders and documents to that end,
provided  that if  such  Event  of  Default  is  cured,  any  such  dividend  or
distribution  theretofore paid to the Agent shall,  upon request of the Borrower
(except  to the  extent  theretofore  applied  to the  Secured  Obligations)  be
returned by the Agent to the Borrower.

            (b)   INTELLECTUAL PROPERTY.

            (1) For the  purpose of enabling  the Agent to  exercise  rights and
remedies  under  Section 5.05 hereof at such time as the Agent shall be lawfully
entitled to exercise such rights and  remedies,  and for no other  purpose,  the
Borrower hereby grants to the Agent, to the extent  assignable,  an irrevocable,
non-exclusive   license   (exercisable  without  payment  of  royalty  or  other
compensation to the Borrower) to use,  assign,  license or sublicense any of the
Intellectual   Property  (other  than  the  Trademark   Collateral  or  goodwill
associated therewith) now owned or hereafter acquired by the Borrower,  wherever
the same may be located,  including  in such  license  reasonable  access to all
media in which any of the  licensed  items may be  recorded or stored and to all
computer programs used for the compilation or printout thereof.

            (2) Notwithstanding  anything contained herein to the contrary,  but
subject to the  provisions of Section 8.05 of the Credit  Agreement  which limit
the right of the Borrower and its Subsidiaries to dispose of their property,  so
long as no Event of Default shall have occurred and be continuing,  the Borrower
will be permitted to exploit, use, enjoy, protect, license, sublicense,  assign,
sell, dispose of or take other actions with respect to the Intellectual Property
in the ordinary course of the Business. In furtherance of the foregoing,  unless
an Event of Default shall have  occurred and is continuing  the Agent shall from
time to time,  upon  the  request  of the  Borrower,  execute  and  deliver  any
instruments,  certificates or other documents,  in the form so requested,  which
the Borrower shall have certified are  appropriate (in its judgment) to allow it
to take any action  permitted  above  (including  relinquishment  of the license
provided   pursuant  to  clause  (1)  immediately   above  as  to  any  specific
Intellectual Property).  Further, upon the payment in full of all of the Secured
Obligations  and  cancellation or termination of the Commitments and LC Exposure
or earlier expiration of this Agreement or release of the Collateral,  the Agent
shall  grant back to the  Borrower  the license  granted  pursuant to clause (1)
immediately above. The exercise of rights and remedies under Section 5.05 hereof
by the Agent shall not  terminate  the rights of the holders of any  licenses or
sublicenses  theretofore  granted by the Borrower in  accordance  with the first
sentence of this clause (2).

            (c)   MOTOR VEHICLES.

            (1) At the request of the Agent,  the Borrower  shall deliver to the
Agent originals of the certificates of title or ownership for the Motor Vehicles
owned by it with the Agent listed as lienholder.

            (2) Upon the  acquisition  after the date hereof by the  Borrower of
any Motor Vehicle, at the request of the Agent the Borrower shall deliver to the
Agent  originals  of the  certificates  of title  or  ownership  for such  Motor
Vehicle,  together with the manufacturer's  statement of origin,  with the Agent
listed as lienholder;  provided, however, if the Motor Vehicle to be acquired is
subject to a purchase  money security  interest,  the Agent shall be listed as a
junior lienholder to the Person holding such purchase money security interest.

            (3) Without  limiting  Section  5.10  hereof,  the  Borrower  hereby
appoints  the  Agent as its  attorney-in-fact,  effective  the date  hereof  and
terminating  upon the  termination of the obligations of the Borrower under this
Agreement,  for the purpose of (i) executing on behalf of the Borrower  title or
ownership  applications  for filing with  appropriate  state  agencies to enable
Motor  Vehicles now owned or  hereafter  acquired by the Borrower to be retitled
and the Agent listed as lienholder  thereon,  (ii) filing such applications with
such state agencies and (iii)  executing such other documents and instruments on
behalf of, and taking  such  other  action in the name of, the  Borrower  as the
Agent  may deem  necessary  or  advisable  to  accomplish  the  purposes  hereof
(including,  without  limitation,  the purpose of creating in favor of the Agent
(for the benefit of the  Lenders) a  perfected  lien on the Motor  Vehicles  and
exercising the rights and remedies of the Agent under Section 5.05 hereof). This
appointment as attorney-in-fact is irrevocable and coupled with an interest.

            (4) Any certificates of title or ownership delivered pursuant to the
terms hereof shall be accompanied by odometer  statements for each Motor Vehicle
covered thereby.

            5.05 EVENTS OF DEFAULT, ETC. During the period during which an Event
of Default shall have occurred and be continuing:

            (i) the Borrower  shall,  at the request of the Agent,  assemble the
      Collateral owned by it at such place or places,  reasonably  convenient to
      both the Agent and the Borrower, designated in its request;

            (ii) the  Agent may make any  reasonable  compromise  or  settlement
      deemed  desirable with respect to any of the Collateral and may extend the
      time of payment, arrange for payment in installments,  or otherwise modify
      the terms of, any of the Collateral;

            (iii) the Agent  shall  have all of the  rights  and  remedies  with
      respect to the Collateral of a secured party under the Uniform  Commercial
      Code (whether or not said Code is in effect in the jurisdiction  where the
      rights and remedies are asserted) and such additional  rights and remedies
      to which a  secured  party is  entitled  under  the laws in  effect in any
      jurisdiction  where any rights and  remedies  hereunder  may be  asserted,
      including,  without limitation, the right, to the maximum extent permitted
      by law, to exercise all voting,  consensual  and other powers of ownership
      pertaining  to the  Collateral  as if the Agent were the sole and absolute
      owner  thereof (and the Borrower  agrees to take all such action as may be
      appropriate to give effect to such right);

            (iv) the Agent in its discretion  may, in its name or in the name of
      the Borrower or otherwise,  demand,  sue for, collect or receive any money
      or property at any time payable or receivable on account of or in exchange
      for any of the Collateral, but shall be under no obligation to do so; and

            (v) the Agent may, upon 10 Business  Days' prior  written  notice to
      the Borrower of the time and place,  with respect to the Collateral or any
      part  thereof  which  shall  then be or  shall  thereafter  come  into the
      possession,  custody or control of the Agent,  the Lenders or any of their
      respective agents,  sell, lease, assign or otherwise dispose of all or any
      of such  Collateral,  at such place or places as the Agent deems best, and
      for cash or on credit or for future delivery (without thereby assuming any
      credit risk), at public or private sale,  without demand of performance or
      notice of  intention  to effect any such  disposition  or of time or place
      thereof (except such notice as is required above or by applicable  statute
      and  cannot be waived)  and the Agent or any Lender or anyone  else may be
      the  purchaser,  lessee,  assignee  or  recipient  of  any  or  all of the
      Collateral so disposed of at any public sale (or, to the extent  permitted
      by law, at any private  sale),  and thereafter  hold the same  absolutely,
      free from any claim or right of  whatsoever  kind,  including any right or
      equity of redemption (statutory or otherwise),  of the Borrower,  any such
      demand,  notice or right and  equity  being  hereby  expressly  waived and
      released.  In the event of any sale,  assignment,  or other disposition of
      any of the Trademark  Collateral,  the goodwill of the Business  connected
      with  and  symbolized  by  the  Trademark   Collateral   subject  to  such
      disposition shall be included,  and the Borrower shall supply to the Agent
      or  its  designee,  for  inclusion  in  such  sale,  assignment  or  other
      disposition,   all  Intellectual   Property  relating  to  such  Trademark
      Collateral.  The Agent may,  without  notice or  publication,  adjourn any
      public or private sale or cause the same to be adjourned from time to time
      by  announcement  at the time and place fixed for the sale,  and such sale
      may be made at any time or place to which the same may be so adjourned.

The proceeds of each collection,  sale or other  disposition  under this Section
5.05, including by virtue of the exercise of the license granted to the Agent in
Section  5.04(b)(1)  hereof,  shall be applied in  accordance  with Section 5.09
hereof.

            The  Borrower  recognizes  that,  by reason of certain  prohibitions
contained  in the  Securities  Act of 1933,  as amended,  and  applicable  state
securities laws, the Agent may be compelled,  with respect to any sale of all or
any part of the Collateral,  to limit purchasers to those who will agree,  among
other things,  to acquire the Collateral  for their own account,  for investment
and  not  with a view  to the  distribution  or  resale  thereof.  The  Borrower
acknowledges  that any such  private  sales may be at prices  and on terms  less
favorable to the Agent than those obtainable  through a public sale without such
restrictions,  and,  notwithstanding  such  circumstances,  agrees that any such
private  sale  shall be deemed to have  been made in a  commercially  reasonable
manner and that the Agent shall have no obligation to engage in public sales and
no  obligation  to  delay  the sale of any  Collateral  for the  period  of time
necessary  to permit the  respective  Issuer  thereof to  register it for public
sale.

            5.06  DEFICIENCY.  If the  proceeds  of  sale,  collection  or other
realization  of or upon the  Collateral  pursuant  to  Section  5.05  hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured  Obligations,  the Borrower  shall remain  liable for any
deficiency.

            5.07 REMOVALS,  ETC.  Without at least 30 days' prior written notice
to the Agent,  the  Borrower  shall not (i) maintain any of its books or records
with respect to the  Collateral  at any office or maintain  its chief  executive
office or its principal  place of business at any place, or permit any Inventory
or  Equipment  to be  located  anywhere  other  than  at one  of  the  locations
identified in Annex 6 hereto or in transit from one of such locations to another
or (ii) change its  corporate  name,  or the name under which it does  business,
from the name shown on the Borrower's signature page hereto.

            5.08  PRIVATE  SALE.  The  Agent  and the  Lenders  shall  incur  no
liability as a result of the sale of the Collateral, or any part thereof, at any
private  sale  pursuant  to Section  5.05  hereof  conducted  in a  commercially
reasonable  manner.  The Borrower  hereby waives any claims against the Agent or
any Lender  arising by reason of the fact that the price at which the Collateral
may have been sold at such a private  sale was less than the price  which  might
have been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations, even if the Agent accepts the first offer received and does
not offer the Collateral to more than one offeree.

            5.09  APPLICATION OF PROCEEDS.  Except as otherwise herein expressly
provided and except as provided  below in this Section 5.09, the proceeds of any
collection,  sale or  other  realization  of all or any  part of the  Collateral
pursuant hereto,  and any other cash at the time held by the Agent under Section
4 hereof or this Section 5, shall be applied by the Agent:

            FIRST, to the payment of the costs and expenses of such  collection,
      sale or other realization,  including  reasonable  out-of-pocket costs and
      expenses of the Agent and the fees and expenses of its agents and counsel,
      and all expenses, and advances made or incurred by the Agent in connection
      therewith;

            NEXT, to the payment in full of the Secured Obligations in each case
      equally and ratably in accordance with the respective amounts thereof then
      due and owing or as the Lenders holding the same may otherwise agree; and

            FINALLY,  after payment in full of the Secured  Obligations,  to the
      payment to the Borrower,  or its  successors or assigns,  or as a court of
      competent jurisdiction may direct, of any surplus then remaining.

Notwithstanding the foregoing, the proceeds of any cash or other amounts held in
the "LC Exposure Sub-Account" of the Collateral Account pursuant to Section 4.04
hereof shall be applied FIRST to the LC Exposure  outstanding  from time to time
and SECOND to the other Secured Obligations in the manner provided above in this
Section 5.09.

            As used in this Section 5, "PROCEEDS" of Collateral shall mean cash,
securities and other property  realized in respect of, and distributions in kind
of,  Collateral,  including  any  thereof  received  under  any  reorganization,
liquidation or adjustment of debt of the Borrower or any issuer of or obligor on
any of the Collateral.

            5.10 ATTORNEY-IN-FACT. Without limiting any rights or powers granted
by this  Agreement  to the Agent while no Event of Default has  occurred  and is
continuing,  upon the  occurrence  and  during the  continuance  of any Event of
Default the Agent is hereby appointed the  attorney-in-fact  of the Borrower for
the  purpose of carrying  out the  provisions  of this  Section 5 and taking any
action and  executing  any  instruments  which the Agent may deem  necessary  or
advisable   to   accomplish   the  purposes   hereof,   which   appointment   as
attorney-in-fact  is irrevocable and coupled with an interest.  Without limiting
the  generality of the  foregoing,  so long as the Agent shall be entitled under
this Section 5 to make collections in respect of the Collateral, the Agent shall
have the right and power to receive, endorse and collect all checks made payable
to the  order of the  Borrower  representing  any  dividend,  payment,  or other
distribution  in respect of the  Collateral or any part thereof and to give full
discharge for the same.

            5.11  PERFECTION.  Prior to or  concurrently  with the execution and
delivery  of  this  Agreement,  the  Borrower  shall  (i)  file  such  financing
statements  and other  documents  in such  offices  as the Agent may  request to
perfect the security interests granted by Section 3 hereof, (ii) cause the Agent
(to the extent  requested by any Lender) to be listed as the  lienholder  on all
certificates  of title or  ownership  relating  to Motor  Vehicles  owned by the
Borrower,  (iii)  deliver to the Agent all  certificates  identified  in Annex 1
hereto,  accompanied  by undated  stock  powers duly  executed in blank and (iv)
deliver  to  the  Agent  the  Inter-company  Notes  owing  to the  Borrower  and
outstanding on the date hereof,  endorsed and/or accompanied by such instruments
of  assignment  and  transfer  in such  form  and  substance  as the  Agent  may
reasonably request.

            5.12 TERMINATION.  When all Secured Obligations shall have been paid
in full and the Commitments of the Lenders under the Credit Agreement and all LC
Exposure shall have expired or been terminated,  the obligations of the Borrower
under this Agreement shall terminate,  and the Agent shall forthwith cause to be
assigned,  transferred and delivered,  against receipt but without any recourse,
warranty  or  representation  whatsoever,  any  remaining  Collateral  and money
received  in  respect  thereof,  to or on the  order of the  Borrower  and to be
released and cancelled all licenses and rights referred to in Section 5.04(b)(1)
hereof.  The Agent  shall also  execute and  deliver to the  Borrower  upon such
termination such Uniform  Commercial Code termination  statements,  certificates
for terminating the Liens on the Motor Vehicles and such other  documentation as
shall be  reasonably  requested  by the Borrower to effect the  termination  and
release of the Liens on the Collateral.

            5.13  EXPENSES.  The  Borrower  agrees  to  pay  to  the  Agent  all
out-of-pocket  expenses  (including  reasonable  expenses for legal  services of
every kind) of, or incident to, the enforcement of any of the provisions of this
Section 5, or  performance  by the Agent of any  obligations  of the Borrower in
respect of the  Collateral  which the Borrower has failed or refused to perform,
or any actual or  attempted  sale,  or any  exchange,  enforcement,  collection,
compromise or settlement in respect of any of the  Collateral,  and for the care
of the Collateral  and defending or asserting  rights and claims of the Agent in
respect thereof,  by litigation or otherwise,  including  expenses of insurance,
and all such expenses  shall be Secured  Obligations  to the Agent secured under
Section 3 hereof.

            5.14 FURTHER ASSURANCES. The Borrower agrees that, from time to time
upon the written  request of the Agent,  the  Borrower  will execute and deliver
such  further  documents  and do such  other  acts and  things  as the Agent may
reasonably request in order fully to effect the purposes of this Agreement.

            5.15  RELEASE OF MOTOR  VEHICLES.  So long as no Default  shall have
occurred and be  continuing,  upon the request of the Borrower,  the Agent shall
execute and deliver to the  Borrower  such  instruments  as the  Borrower  shall
reasonably  request to remove the  notation  of the Agent as  lienholder  on any
certificate of title for any Motor Vehicle;  PROVIDED that any such  instruments
shall be delivered,  and the release effective only upon receipt by the Agent of
a certificate from the Borrower stating that the Motor Vehicle the lien on which
is to be  released  is to be sold or has  suffered a Casualty  Event (with title
thereto passing to the casualty  insurance company therefor in settlement of the
claim for such loss) and any  proceeds  of such sale or Casualty  Event,  unless
such  proceeds are not required to be applied as provided in Section  2.09(b) or
(c) of the Credit Agreement, being paid to the Agent hereunder.

            5.16  RELEASE  OF  COLLATERAL.  So long  as no  Default  shall  have
occurred and be  continuing,  upon the request of the Borrower,  the Agent shall
execute and deliver to the  Borrower  such  instruments  as the  Borrower  shall
reasonably  request  to  release  any  Collateral  that  is  the  subject  of  a
Disposition  that is permitted by the Credit  Agreement or to which the Majority
Lenders have consented.

            Section 6.  MISCELLANEOUS.

            6.01 NO  WAIVER.  No  failure on the part of the Agent or any of its
agents to  exercise,  and no course of dealing  with respect to, and no delay in
exercising,  any  right,  power or remedy  hereunder  shall  operate as a waiver
thereof;  nor shall any  single or partial  exercise  by the Agent or any of its
agents of any right,  power or remedy  hereunder  preclude  any other or further
exercise  thereof or the  exercise  of any other  right,  power or  remedy.  The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.

            6.02 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall
be governed by, and  construed in accordance  with,  the law of the State of New
York. The Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern  District of New York and of any New York
State Court sitting in New York County for the purposes of all legal proceedings
arising out of or relating to this  Agreement or the  transactions  contemplated
hereby. The Borrower irrevocably waives, to the fullest extent permitted by law,
any  objection  that it may now or hereafter  have to the laying of the venue of
any  such  proceeding  brought  in such a court  and any  claim  that  any  such
proceeding brought in such a court has been brought in an inconvenient forum.

            6.03 WAIVER OF JURY TRIAL.  THE BORROWER,  THE AGENT AND EACH LENDER
HEREBY  IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL  PROCEEDING  ARISING  OUT OF OR  RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

            6.04 NOTICES. All notices, requests,  consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at its
address or telecopier  number specified  pursuant to Section 11.02 of the Credit
Agreement and shall be deemed to have been given at the times  specified in said
Section 11.02.

            6.05  WAIVERS,  ETC.  The  terms of this  Agreement  may be  waived,
altered  or  amended  only by an  instrument  in writing  duly  executed  by the
Borrower  and the Agent (with the consent of such of the Lenders as are required
for such purpose under the Credit Agreement). Any such amendment or waiver shall
be binding  upon the  Borrower,  the Agent and each  Lender,  each holder of any
Secured Obligation and the Borrower.

            6.06  SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon
and  inure to the  benefit  of the  respective  successors  and  assigns  of the
Borrower,  the Agent,  the Lenders  and each  holder of the Secured  Obligations
(provided, however, that the Borrower shall not assign or transfer its rights or
obligations  hereunder  without the prior written  consent of the Agent,  acting
with the consent of such of the Lenders as are required  for such purpose  under
the Credit Agreement).

            6.07  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same instrument
and any of the parties  hereto may execute  this  Agreement  by signing any such
counterpart.

            6.08 AGENTS.  The Agent may employ agents and  attorneys-in-fact  in
connection  herewith  and  shall  not  be  responsible  for  the  negligence  or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.

            6.09   SEVERABILITY.   If  any  provision   hereof  is  invalid  and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other  provisions  hereof  shall remain in full force and effect in such
jurisdiction  and  shall be  liberally  construed  in favor of the Agent and the
Lenders in order to carry out the  intentions of the parties hereto as nearly as
may be possible and (b) the  invalidity  or  unenforceability  of any  provision
hereof in any jurisdiction  shall not affect the validity or  enforceability  of
such provision in any other jurisdiction.


<PAGE>



            IN WITNESS  WHEREOF,  the parties  hereto have caused this  Borrower
Security  Agreement  to be duly  executed  as of the day and  year  first  above
written.


                                    JOURNAL REGISTER COMPANY


                                    By /S/ JEAN B. CLIFTON
                                       -----------------------------------------
                                       Title: Executive Vice President



                                    THE CHASE MANHATTAN BANK,
                                        as Agent


                                    By /S/ DAVID G. STAPLES
                                       -----------------------------------------
                                       Title: Vice President



<PAGE>


                                                                         ANNEX 1


                             LIST OF PLEDGED EQUITY


                                       REGISTERED
  ISSUER           CERTIFICATE NOS.      OWNER                 NUMBER OF SHARES
  ------           ----------------    ----------              ----------------



<PAGE>

                                                                         ANNEX 2


                 LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
                    APPLICATIONS FOR COPYRIGHT REGISTRATIONS



TITLE             DATE FILED            REGISTRATION NO.    EFFECTIVE DATE
-----             ----------            ----------------    --------------




<PAGE>

                                                                         ANNEX 3


                     LIST OF PATENTS AND PATENT APPLICATIONS


                  PATENT
FILE               DATE                 COUNTRY             REGISTRATION NO.
----              ------                -------             ----------------





<PAGE>

                                                                         ANNEX 4


                LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
                  TRADEMARK AND SERVICE MARK REGISTRATIONS AND
            APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS


                                 U.S. TRADEMARKS


                        APPLICATION (A)
                        REGISTRATION (R)              REGISTRATION
MARK                    OR SERIES NO. (S)             OR FILING DATE
----                    -----------------             --------------













<PAGE>

                                                                         ANNEX 5


                LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS






<PAGE>

                                                                         ANNEX 6


                                LIST OF LOCATIONS



State Street Square
50 West State Street
Trenton, NJ







                                                                     EXHIBIT B-1
                                                                [CONFORMED COPY]





                     SUBSIDIARY GUARANTOR SECURITY AGREEMENT


            SUBSIDIARY  GUARANTOR  SECURITY  AGREEMENT dated as of July 15, 1998
between each of the  Subsidiaries of Journal  Register  Company (the "BORROWER")
identified  under the caption  "SUBSIDIARY  GUARANTORS"  on the signature  pages
hereof (individually a "SUBSIDIARY GUARANTOR" and, collectively, the "SUBSIDIARY
GUARANTORS"  and,  together with the Borrower,  the  "OBLIGORS");  and THE CHASE
MANHATTAN  BANK,  as  administrative  agent for the  banks  and other  financial
institutions  party to the Credit Agreement referred to below (in such capacity,
together with its successors in such capacity, the "AGENT").

            The  Subsidiary  Guarantors  and the Agent are parties to a Security
Agreement dated as of December 21, 1994 (as heretofore modified and supplemented
(including, without limitation, by Amendment No. 1 to JCI/JNI Security Agreement
dated as of May 13,  1997)  and in  effect  on the date  hereof,  the  "EXISTING
SUBSIDIARY  GUARANTOR  SECURITY  AGREEMENT"),  pursuant to which the  Subsidiary
Guarantors pledged and granted a security interest in the Collateral (as defined
in the Existing  Subsidiary  Guarantor  Security  Agreement) as security for the
Secured  Obligations (as so defined) including,  INTER ALIA,  obligations of the
Borrower under a Credit Agreement dated as of May 2, 1997 with certain banks and
the Agent (as heretofore  modified and supplemented and in effect on the date of
this Agreement,  the "EXISTING CREDIT  AGREEMENT").  Substantially  concurrently
herewith,  the parties to the Existing Credit  Agreement are amending in certain
respects and restating in its entirety the Existing Credit Agreement pursuant to
a Credit Agreement dated as of the date hereof (as modified and supplemented and
in effect from time to time, the "CREDIT AGREEMENT"). In addition, in connection
with the  amendment  and  restatement  of the  Existing  Credit  Agreement,  the
Subsidiary  Guarantors  and the Agent are amending and restating in its entirety
the  Guarantee  Agreement  dated as of December 21, 1994 pursuant to a Guarantee
Agreement  dated as of the date  hereof (as  modified  and  supplemented  and in
effect from time to time,  the  "SUBSIDIARY  GUARANTEE")  whereby the Subsidiary
Guarantors  guarantee the obligations of the Borrower under the Credit Documents
and certain other obligations of the Borrower.

            To  induce  said  banks  and the  Agent  to enter  into  the  Credit
Agreement  and to extend  credit  thereunder,  and for other  good and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Subsidiary Guarantors have agreed to pledge and grant a security interest in the
Collateral (as hereinafter  defined) as security for the Secured Obligations (as
so defined), and to confirm the prior pledge and grant of a security interest in
the  "Collateral"  (as defined in the  Existing  Subsidiary  Guarantor  Security
Agreement) pursuant to the Existing Subsidiary  Guarantor Security Agreement and
in that connection to amend and restate in its entirety the Existing  Subsidiary
Guarantor Security  Agreement.  Accordingly,  the parties hereto hereby agree as
follows:

            Section 1.  DEFINITIONS.  Terms defined in the Credit Agreement
are used herein as defined therein.  In addition, as used herein:

            "ACCOUNTS" shall  have  the  meaning  ascribed  thereto  in  Section
      3(d) hereof.

            "BUSINESS"  shall mean the  business  of  newspaper  publishing  and
      offset  printing  and the  other  businesses  from  time to  time,  now or
      hereafter, conducted by the Borrower and its Subsidiaries.

            "COLLATERAL" shall have  the  meaning  ascribed thereto in Section 3
      hereof.

            "COLLATERAL  ACCOUNT"  shall have the  meaning  ascribed  thereto in
      Section 4.01 hereof.

            "COPYRIGHT COLLATERAL" shall mean all Copyrights,  whether now owned
      or  hereafter  acquired  by any of the  Subsidiary  Guarantors,  that  are
      associated with the Business, including each Copyright identified in Annex
      2 hereto.

            "COPYRIGHTS" shall mean all copyrights,  copyright registrations and
      applications for copyright registrations,  including,  without limitation,
      all renewals and  extensions  thereof,  the right to recover for all past,
      present and future infringements thereof, and all other rights of any kind
      whatsoever accruing thereunder or pertaining thereto.

            "DOCUMENTS"  shall  have  the  meaning  ascribed  thereto in Section
      3(j) hereof.

            "EQUIPMENT" shall have  the  meaning  ascribed  thereto  in  Section
      3(h) hereof.

            "EQUITY  COLLATERAL"  shall  mean,   collectively,   the  Collateral
      described  in clauses (a) through (c) of Section 3 hereof and the proceeds
      of and to any  such  property  and,  to the  extent  related  to any  such
      property  or such  proceeds,  all  books,  correspondence,  credit  files,
      records, invoices and other papers.

            "INSTRUMENTS" shall have  the  meaning  ascribed  thereto in Section
      3(e) hereof.

            "INTELLECTUAL  PROPERTY"  shall mean,  collectively,  all  Copyright
      Collateral,  all Patent Collateral and all Trademark Collateral,  together
      with  (a)  all  inventions,  processes,  production  methods,  proprietary
      information,  know-how and trade  secrets used or useful in the  Business;
      (b) all  licenses  or  user  or  other  agreements  granted  to any of the
      Subsidiary  Guarantors with respect to any of the foregoing,  in each case
      whether now or hereafter owned or used including,  without limitation, the
      licenses or other agreements with respect to the Copyright Collateral, the
      Patent  Collateral or the Trademark  Collateral  listed in Annex 5 hereto;
      (c) all information,  customer lists,  identification of suppliers,  data,
      plans, blueprints, specifications,  designs, drawings, recorded knowledge,
      surveys,  engineering reports, test reports, manuals, materials standards,
      processing  standards,   performance  standards,  catalogs,  computer  and
      automatic machinery software and programs,  and the like pertaining to the
      operation by any of the  Subsidiary  Guarantors of the  Business;  (d) all
      field repair data, sales data and other  information  relating to sales or
      service of products now or hereafter manufactured and which pertain to the
      Business;  (e) all accounting  information  which pertains to the Business
      and all media in which or on which any of the  information or knowledge or
      data or records  which  pertain to the  Business may be recorded or stored
      and all computer  programs  used for the  compilation  or printout of such
      information,  knowledge,  records  or data;  (f) all  licenses,  consents,
      permits, variances,  certifications and approvals of governmental agencies
      now or hereafter  held by any of the Subsidiary  Guarantors  pertaining to
      the operation by the Borrower and its  Subsidiaries  of the Business;  and
      (g) all causes of action,  claims and warranties now or hereafter owned or
      acquired  by any of the  Subsidiary  Guarantors  in  respect of any of the
      items listed above.

            "INTER-COMPANY NOTES" shall mean, collectively, each promissory note
      issued by any Subsidiary  Guarantor and owing to the Borrower or any other
      Subsidiary  Guarantor,  whether now  existing or  hereinafter  coming into
      existence.

            "INVENTORY"  shall  have  the  meaning  ascribed  thereto in Section
      3(f) hereof.

            "ISSUERS"  shall mean,  collectively,  the  respective  corporations
      identified in Annex 1 hereto under the caption "ISSUER".

            "MOTOR VEHICLES" shall mean motor vehicles,  tractors,  trailers and
      other like  property,  whether or not the title  thereto is  governed by a
      certificate of title or ownership.

            "PATENT  COLLATERAL"  shall mean all  Patents,  whether now owned or
      hereafter  acquired  by  any  of  the  Subsidiary  Guarantors,   that  are
      associated with the Business,  including each Patent identified in Annex 3
      hereto.

            "PATENTS" shall mean all patents and patent applications, including,
      without limitation,  the inventions and improvements described and claimed
      therein together with the reissues,  divisions,  continuations,  renewals,
      extensions  and  continuations-in-part  thereof,  all  income,  royalties,
      damages and payments now or hereafter  due and/or  payable  under and with
      respect thereto, including,  without limitation,  damages and payments for
      past or future  infringements  thereof, the right to sue for past, present
      and future infringements  thereof,  and all rights  corresponding  thereto
      throughout the world.

            "PLEDGED  EQUITY" shall have the meaning ascribed thereto in Section
      3(a) hereof.

            "SECURED OBLIGATIONS" shall mean, collectively,  (a) the obligations
      of the Borrower to pay the principal of and interest on the Loans made (or
      as of the Effective Date, continued) by the Lenders to, and the Notes held
      by each Lender of, the  Borrower  and all other  amounts from time to time
      owing  to the  Lenders  or the  Agent by the  Borrower  under  the  Credit
      Documents  (including,   without  limitation,  all  LC  Disbursements  and
      interest  thereon)  and  interest  thereon,  (b)  the  obligations  of the
      Borrower  and/or any of its  Subsidiaries  to pay all amounts from time to
      time  owing to any  Lender or any  Affiliate  of a Lender by the  Borrower
      and/or any of its Subsidiaries in respect of any Hedging Agreement entered
      into by the  Borrower  and/or any of its  Subsidiaries  and such Lender or
      such  Affiliate,  (c) the  obligations  of the Borrower to pay all amounts
      owing  from time to time in  respect  of  letters  of  credit  or  similar
      instruments issued under Section 8.07(g) of the Credit Agreement issued by
      any Lender or any  Affiliate  of a Lender for account of the  Borrower and
      (d) all  obligations  of any  Subsidiary  Guarantor to the Lenders and the
      Agent  hereunder  and under  the  other  Credit  Documents  to which  such
      Subsidiary Guarantor is a party.

            "TRADEMARK COLLATERAL" shall mean all Trademarks,  whether now owned
      or  hereafter  acquired  by any of the  Subsidiary  Guarantors,  that  are
      associated with the Business, including each Trademark identified in Annex
      4 hereto. Notwithstanding the foregoing, the Trademark Collateral does not
      and shall not include  any  Trademark  which  would be  rendered  invalid,
      abandoned,  void or  unenforceable by reason of its being included as part
      of the Trademark Collateral.

            "TRADEMARKS"  shall mean all trade  names,  trademarks  and  service
      marks, logos,  trademark and service mark registrations,  and applications
      for  trademark  and  service  mark   registrations,   including,   without
      limitation, all renewals of trademark and service mark registrations,  all
      rights  corresponding  thereto  throughout the world, the right to recover
      for all past, present and future  infringements  thereof, all other rights
      of  any  kind  whatsoever   accruing  thereunder  or  pertaining  thereto,
      together,  in each  case,  with the  product  lines  and  goodwill  of the
      business  connected  with the use of, and  symbolized  by, each such trade
      name, trademark and service mark.

            "UNIFORM  COMMERCIAL CODE" shall mean the Uniform Commercial Code as
      in effect in the State of New York from time to time.

            Section  2.   REPRESENTATIONS   AND   WARRANTIES.   Each  Subsidiary
Guarantor represents and warrants to the Lenders and the Agent that:

            (a) such Subsidiary  Guarantor is the sole  beneficial  owner of the
      Collateral in which it purports to grant a security  interest  pursuant to
      Section 3 hereof and no Lien exists or will exist upon any such Collateral
      at any time  (and,  with  respect to the  Equity  Collateral,  no right or
      option to acquire  the same exists in favor of any other  Person),  except
      for Liens permitted under Section 8.06 of the Credit  Agreement and except
      for the pledge and security interest in favor of the Agent for the benefit
      of the Lenders  created or provided  for herein  which pledge and security
      interest  constitutes  a first  priority  perfected  pledge  and  security
      interest  in and  to  all of  such  Collateral  (other  than  Intellectual
      Property  registered or otherwise  located outside of the United States of
      America);

            (b) the Pledged  Equity  evidenced  by the  certificates  identified
      under the name of such Subsidiary  Guarantor in Annex 1 hereto is, and all
      other Pledged Equity in which such  Subsidiary  Guarantor  shall hereafter
      grant a  security  interest  pursuant  to Section 3 hereof  will be,  duly
      authorized,  validly issued,  fully paid and nonassessable (in the case of
      any equity interest in a corporation)  and duly issued and outstanding (in
      the case of any  equity  interest  in any other  entity)  and none of such
      Pledged Equity is or will be subject to any  contractual  restriction,  or
      any restriction under the charter, by-laws, partnership agreement, limited
      liability  company  agreement  or  other  organizational  document  of the
      respective  Issuers of such  Pledged  Equity,  upon the  transfer  of such
      Pledged Equity (except for any such restriction contained herein or in the
      Credit Agreement);

            (c) the Pledged  Equity  evidenced  by the  certificates  identified
      under the name of such Subsidiary  Guarantor in Annex 1 hereto constitutes
      all of the issued and  outstanding  shares of capital  stock,  partnership
      interest,  limited  liability  company or other ownership  interest of any
      class or character of the Issuers  beneficially  owned by such  Subsidiary
      Guarantor  on the date hereof  (whether or not  registered  in the name of
      such Subsidiary  Guarantor) and said Annex 1 correctly  identifies,  as at
      the date  hereof,  the  respective  Issuers of such  Pledged  Equity,  the
      respective  class and (in the case of any  corporate  Issuer) par value of
      the shares  comprising  such Pledged Equity and the  respective  number of
      shares (and registered owner thereof) evidenced by each such certificate;

            (d)  Annexes 2, 3 and 4 hereto,  respectively,  set forth  under the
      name of such  Subsidiary  Guarantor  a complete  and  correct  list of all
      Copyrights,  Patents and Trademarks owned by such Subsidiary  Guarantor on
      the date hereof;  except  pursuant to licenses  and other user  agreements
      entered  into by such  Subsidiary  Guarantor  in the  ordinary  course  of
      business,  which are listed in Annex 5 hereto,  such Subsidiary  Guarantor
      owns and  possesses the right to use, and has done nothing to authorize or
      enable any other Person to use, any Copyright,  Patent or Trademark listed
      in said Annexes 2, 3 and 4, and all  registrations  listed in said Annexes
      2, 3 and 4 are valid and in full  force and  effect;  except as may be set
      forth in said Annex 5, the Subsidiary Guarantors own and possess the right
      to use all Copyrights,  Patents and Trademarks necessary for the operation
      of the Business;

            (e) Annex 5 hereto  sets forth a complete  and  correct  list of all
      licenses and other user agreements  included in the Intellectual  Property
      on the date hereof;

            (f) to such  Subsidiary  Guarantor's  knowledge,  (i)  except as set
      forth in Annex 5 hereto,  there is no  violation by others of any right of
      such  Subsidiary  Guarantor  with  respect  to any  Copyright,  Patent  or
      Trademark  listed in  Annexes 2, 3 and 4 hereto,  respectively,  under the
      name of such Subsidiary  Guarantor and (ii) such  Subsidiary  Guarantor is
      not, in connection  with the Business,  infringing in any respect upon any
      Copyright,  Patent or Trademark of any other  Person;  and no  proceedings
      have been instituted or are pending against such Subsidiary  Guarantor or,
      to such Subsidiary Guarantor's knowledge, threatened, and no claim against
      such Subsidiary Guarantor has been received by such Subsidiary  Guarantor,
      alleging any such violation, except as may be set forth in said Annex 5;

            (g) such Subsidiary Guarantor does not own any Trademarks registered
      in the  United  States  of  America  to  which  the last  sentence  of the
      definition of Trademark Collateral applies;

            (h) any goods now or hereafter produced by such Subsidiary Guarantor
      or any of its  Subsidiaries  included in the Collateral have been and will
      be  produced  in  compliance  with  the  requirements  of the  Fair  Labor
      Standards Act, as amended; and

            (i) Annex 6 hereto  correctly and completely  specifies the location
      of the chief  executive  office or  principal  place of  business  of such
      Subsidiary Guarantor and also correctly and completely specifies the place
      at which all  Inventory  or  Equipment  of such  Subsidiary  Guarantor  is
      located.

            Section 3. COLLATERAL. As collateral security for the prompt payment
in full when due (whether at stated  maturity,  by acceleration or otherwise) of
the Secured  Obligations,  the Subsidiary  Guarantors hereby pledge and grant to
the Agent (and confirm the prior  pledge and grant to the Agent  pursuant to the
Existing  Subsidiary  Guarantor Security  Agreement,  which are hereby confirmed
hereunder),  for the benefit of the Lenders as hereinafter  provided, a security
interest in all of the Subsidiary  Guarantors'  right, title and interest in, to
and under the following property, whether now owned by the Subsidiary Guarantors
or  hereafter  acquired  and  whether  now  existing  or  hereafter  coming into
existence,  and wherever located (all being  collectively  referred to herein as
"COLLATERAL"):

            (a) the shares of capital stock (whether common or preferred) of, or
      partnership, limited liability company or other ownership interest in, the
      respective  Issuers  identified  in Annex 1 hereto  under the names of the
      respective  Subsidiary Guarantors and all other shares of capital stock or
      partnership,  limited  liability  company or other  ownership  interest of
      whatever class or character of the Issuers,  now or hereafter owned by the
      Subsidiary  Guarantors,  together  with  in  each  case  the  certificates
      evidencing the same (collectively, the "PLEDGED EQUITY");

            (b) all  shares,  securities,  moneys  or  property  representing  a
      dividend on any of the Pledged  Equity,  or representing a distribution or
      return of capital upon or in respect of the Pledged  Equity,  or resulting
      from a split-up,  revision,  reclassification  or other like change of the
      Pledged  Equity  or  otherwise  received  in  exchange  therefor,  and any
      subscription  warrants,  rights or options  issued to the  holders  of, or
      otherwise in respect of, the Pledged Equity;

            (c) without  affecting the obligations of the Subsidiary  Guarantors
      under any provision  prohibiting such action hereunder or under the Credit
      Agreement, in the event of any consolidation or merger in which any Issuer
      is not the  surviving  entity,  all  ownership  interests  of any class or
      character of the successor  entity (unless such  successor  entity is such
      Subsidiary   Guarantor   itself)   formed  by  or   resulting   from  such
      consolidation or merger;

            (d) all  accounts  and general  intangibles  (each as defined in the
      Uniform  Commercial  Code) of the Subsidiary  Guarantors  constituting any
      right to the payment of money,  including  (but not limited to) all moneys
      due and to become due to the Subsidiary Guarantors in respect of any loans
      or advances  for the  purchase  price of  Inventory  or Equipment or other
      goods  sold or leased or for  services  rendered,  all  moneys  due and to
      become due to the Subsidiary  Guarantors under any guarantee  (including a
      letter of credit) of the purchase  price of Inventory or Equipment sold by
      the  Subsidiary  Guarantors  and all tax refunds and any and all rights of
      the Subsidiary Guarantors in any escrow or trust account, whether fixed or
      contingent,  and, upon the termination or revocation  thereof or return of
      sums  contained in any escrow or trust account or  otherwise,  any and all
      amounts  due to,  to  become  due  to,  or  received  by,  the  Subsidiary
      Guarantors  therefrom,  whether  as a result  of one or more  orders  of a
      Bankruptcy  Court or otherwise  (such  accounts,  general  intangibles and
      moneys due and to become due being herein called collectively "ACCOUNTS");

            (e) all Inter-company Notes,  instruments,  chattel paper or letters
      of  credit  (each  as  defined  in the  Uniform  Commercial  Code)  of the
      Subsidiary Guarantors including,  without limitation, any of the foregoing
      evidencing, representing, arising from or existing in respect of, relating
      to, securing or otherwise  supporting the payment of, any of the Accounts,
      including  (but  not  limited  to)  promissory  notes,  drafts,  bills  of
      exchange,   trade   acceptances  and  the   Inter-company   Notes  (herein
      collectively called "INSTRUMENTS");

            (f) all inventory (as defined in the Uniform Commercial Code) of the
      Subsidiary  Guarantors,  including  Motor  Vehicles held by the Subsidiary
      Guarantors  for  lease,  fuel,  tires and  other  spare  parts,  all goods
      obtained by the Subsidiary Guarantors in exchange for such inventory,  and
      any  products  made  or  processed  from  such  inventory   including  all
      substances,   if  any,  commingled  therewith  or  added  thereto  (herein
      collectively called "INVENTORY");

            (g)   all  Intellectual  Property  and all other accounts or general
      intangibles of  the  Subsidiary  Guarantors  not constituting Intellectual
      Property or Accounts;

            (h) all equipment (as defined in the Uniform Commercial Code) of the
      Subsidiary  Guarantors,  including all Motor Vehicles used in the Business
      (herein collectively called "EQUIPMENT");

            (i)   each   contract   and   other   agreement  of  the  Subsidiary
      Guarantors relating to the sale or other disposition of Inventory or
      Equipment;

            (j) all  documents  of title (as defined in the  Uniform  Commercial
      Code) or other receipts of the Subsidiary Guarantors covering,  evidencing
      or  representing   Inventory  or  Equipment  (herein  collectively  called
      "DOCUMENTS");

            (k) all rights,  claims and  benefits of the  Subsidiary  Guarantors
      against any Person  arising  out of,  relating  to or in  connection  with
      Inventory or Equipment purchased by the Subsidiary Guarantors,  including,
      without limitation, any such rights, claims or benefits against any Person
      storing or transporting such Inventory or Equipment;

            (l)   the balance from time to time in the Collateral Account;

            (m) all  tangible  property  (including  all  machinery,  apparatus,
      equipment,   fittings,   personal   property,   and  any  other   fixtures
      whatsoever),  now or hereafter located on or attached to real estate,  and
      any and all products and  accessions to any such property  which may exist
      at any time;

            (n) all  rents,  revenues,  proceeds,  issues,  profits,  royalties,
      income  and  other  benefits  derived  from  real  estate,  and  from  any
      improvements or fixtures thereon;

            (o) all  proceeds of  insurance  in effect with  respect to any real
      estate, or with respect to improvements or fixtures  thereon,  and any and
      all awards made for the taking by eminent domain,  or by any proceeding or
      purchase in lieu  thereof,  of any real  estate,  or any  improvements  or
      fixtures thereon,  including without  limitation any awards resulting from
      any  damage  to any  real  estate,  improvements  or  fixtures  for  which
      compensation shall be given by any governmental authority; and

            (p) all other  tangible and  intangible  property of the  respective
      Subsidiary Guarantors,  including, without limitation,  proceeds, products
      and accessions of and to any of the property of the Subsidiary  Guarantors
      described in clauses (a) through (o) above in this  Section 3  (including,
      without limitation, any proceeds of insurance thereon), and, to the extent
      related  to any  property  described  in said  clauses  or such  proceeds,
      products and accessions, all books, correspondence, credit files, records,
      invoices  and other  papers,  including,  without  limitation,  all tapes,
      cards,  computer runs and other papers and documents in the  possession or
      under the control of the respective  Subsidiary Guarantors or any computer
      bureau or service  company  from time to time  acting  for the  respective
      Subsidiary Guarantors.

            Section 4.  CASH PROCEEDS OF COLLATERAL.

            4.01 COLLATERAL  ACCOUNT.  There has heretofore been  established at
Chase a cash  collateral  account  (the  "COLLATERAL  ACCOUNT"),  which may be a
"securities  account"  (as defined in Section  8-501 of the  Uniform  Commercial
Code,  in the name and under the sole dominion and control of the Agent (and, in
the  case of a  securities  account,  in  respect  of  which  the  Agent  is the
"entitlement   holder"  (as  defined  in  Section  8-102(a)(7)  of  the  Uniform
Commercial  Code)),  into which there shall be  deposited  from time to time the
cash proceeds of any of the Collateral (including proceeds of insurance thereon)
required  to be  delivered  to the  Agent  pursuant  hereto  and into  which the
Subsidiary Guarantors may from time to time deposit any additional amounts which
any of them  wishes to pledge to the Agent for the  benefit  of the  Lenders  as
additional  collateral security hereunder.  The balance from time to time in the
Collateral  Account shall constitute part of the Collateral  hereunder and shall
not constitute  payment of the Secured  Obligations until applied as hereinafter
provided.  Except as expressly  provided in the next  sentence,  the Agent shall
remit the collected balance  outstanding to the credit of the Collateral Account
to or upon the order of the Subsidiary  Guarantors as the Subsidiary  Guarantors
through the  Borrower  shall from time to time  instruct.  However,  at any time
following the occurrence and during the continuance of an Event of Default,  the
Agent may (and,  if  instructed  by such of the Lenders as are required for such
purpose under the Credit Agreement,  shall), in its (or their) discretion, apply
or cause to be applied  (subject to  collection)  the balance  from time to time
outstanding  to the  credit of the  Collateral  Account  to the  payment  of the
Secured  Obligations in the manner specified in Section 5.09 hereof. The balance
from time to time in the Collateral  Account shall be subject to withdrawal only
by the Agent and only as provided herein.

            4.02  PROCEEDS OF ACCOUNTS.  Except as permitted by Section  5.01(b)
hereof,  each Subsidiary  Guarantor shall instruct all account debtors and other
Persons  obligated in respect of all Accounts to make all payments in respect of
the Accounts either (a) directly to the Agent (by instructing that such payments
be  remitted  to a post  office  box  which  shall be in the name and  under the
control of the Agent) or (b) to one or more other banks in the United  States of
America  (by  instructing  that such  payments  be remitted to a post office box
which  shall  be in  the  name  and  under  the  control  of  the  Agent)  under
arrangements, in form and substance satisfactory to the Agent, pursuant to which
such Subsidiary Guarantor shall have irrevocably instructed such other bank (and
such  other  bank shall have  agreed)  to remit all  proceeds  of such  payments
directly to the Agent for deposit into the Collateral Account. All payments made
to the Agent,  as  provided  in the  preceding  sentence,  shall be  immediately
deposited  in  the  Collateral  Account.  In  addition  to the  foregoing,  each
Subsidiary  Guarantor  agrees that if the proceeds of any  Collateral  hereunder
(including  payments made in respect of Accounts)  shall be received by it, such
Subsidiary  Guarantor  shall as promptly as possible  deposit such proceeds into
the Collateral Account.  Until so deposited,  all such proceeds shall be held in
trust by such Subsidiary Guarantor for and as the property of the Agent (for the
benefit of the  Lenders)  and shall not be  commingled  with any other  funds or
property of such Subsidiary Guarantor.

            4.03 INVESTMENT OF BALANCE IN COLLATERAL ACCOUNT. Amounts on deposit
in the  Collateral  Account  shall be  invested  from  time to time in such Cash
Equivalents  as the  Subsidiary  Guarantors  through the Borrower (or, after the
occurrence and during the continuance of a Default,  the Agent) shall determine,
which Cash Equivalents shall be held in the name and be under the control of the
Agent,  provided  that (i) at any time  after  the  occurrence  and  during  the
continuance of an Event of Default, the Agent may (and, if instructed by such of
the Lenders as are required for such purpose under the Credit Agreement,  shall)
in its (or  their)  discretion  at any  time  and  from  time to time  elect  to
liquidate  any such Cash  Equivalents  and to apply or cause to be  applied  the
proceeds  thereof  to the  payment  of the  Secured  Obligations  in the  manner
specified  in  Section  5.09  hereof  and (ii) if  requested  by the  Subsidiary
Guarantors  through the Borrower,  such Cash Equivalents may be held in the name
and under the control of one or more of the Lenders.

            Section 5. FURTHER ASSURANCES; REMEDIES. In furtherance of the grant
of the pledge and security interest pursuant to Section 3 hereof, the Subsidiary
Guarantors  hereby jointly and severally agree with each Lender and the Agent as
follows:

            5.01  DELIVERY  AND OTHER PERFECTION.  Each   Subsidiary   Guarantor
shall:

            (a) if any of the  above-described  shares,  securities,  monies  or
      property required to be pledged by such Subsidiary Guarantor under clauses
      (a),  (b) and (c) of  Section 3 hereof  are  received  by such  Subsidiary
      Guarantor,  forthwith  either (x)  transfer  and deliver to the Agent such
      shares or securities so received by such  Subsidiary  Guarantor  (together
      with the  certificates for any such shares and securities duly endorsed in
      blank or  accompanied  by undated stock powers duly executed in blank) all
      of which thereafter  shall be held by the Agent,  pursuant to the terms of
      this  Agreement,  as part of the Collateral  (and until so transferred and
      delivered to the Agent,  all such shares,  securities,  monies or property
      shall  be  held  in  trust  by such  Subsidiary  Guarantor  for and as the
      property  of the Agent (for the benefit of the  Lenders)  and shall not be
      commingled with any other funds or property of such Subsidiary  Guarantor)
      or (y) take such  other  action  as the  Agent  shall  deem  necessary  or
      appropriate  to duly record the Lien  created  hereunder  in such  shares,
      securities,  monies or property  referred to in said  clauses (a), (b) and
      (c);

            (b) deliver and pledge to the Agent (for the benefit of the Lenders)
      any and all Instruments,  including, without limitation, all Inter-company
      Notes,  endorsed and/or  accompanied by such instruments of assignment and
      transfer in such form and  substance  as the Agent may  request;  PROVIDED
      that so long as no Default  shall have  occurred and be  continuing,  such
      Subsidiary  Guarantor may retain for collection in the ordinary course any
      Instruments  received by it in the  ordinary  course of  business  and the
      Agent shall,  promptly upon request of such Subsidiary  Guarantor  through
      the  Borrower,   make  appropriate   arrangements  for  making  any  other
      Instrument  pledged  by  such  Subsidiary  Guarantor  available  to it for
      purposes of  presentation,  collection or renewal (any such arrangement to
      be effected,  to the extent deemed appropriate by the Agent, against trust
      receipt or like document);  PROVIDED,  FURTHER, that so long as no Default
      shall have occurred and be continuing,  if any Inter-company  Note pledged
      by such  Subsidiary  Guarantor  has been  transferred  by such  Subsidiary
      Guarantor to another  Obligor as permitted by Section  8.05(c)(iv)  of the
      Credit  Agreement,  the Agent  shall,  promptly  upon the  request of such
      Subsidiary Guarantor,  deliver such Inter-company Note to such Obligor for
      purposes of effecting such transfer,  PROVIDED that,  except in connection
      with the cancellation of such Inter-company  Note, the Agent shall receive
      in exchange therefor,  a substitute  Inter-company Note payable to the new
      Obligor in a like aggregate unpaid principal amount;

            (c)  give,  execute,  deliver,  file  and/or  record  any  financing
      statement,  notice, instrument,  document,  agreement or other papers that
      may be necessary  or  desirable  (in the judgment of the Agent) to create,
      preserve,  perfect or validate  any  security  interest  granted  pursuant
      hereto or to enable the Agent to exercise and enforce its rights hereunder
      with respect to such security  interest,  including,  without  limitation,
      causing any or all of the Equity  Collateral to be  transferred  of record
      into the name of the Agent or its  nominee  (and the Agent  agrees that if
      any  Equity  Collateral  is  transferred  into its name or the name of its
      nominee,  the  Agent  will  thereafter  promptly  give  to the  respective
      Subsidiary Guarantor copies of any notices and communications  received by
      it with  respect  to the  Equity  Collateral  pledged  by such  Subsidiary
      Guarantor hereunder),  provided that notices to account debtors in respect
      of any  Accounts  or  Instruments  shall be subject to the  provisions  of
      clause (i) below;

            (d) without  limiting the obligations of such  Subsidiary  Guarantor
      under Section 5.04(c) hereof,  upon the acquisition  after the date hereof
      by such Subsidiary  Guarantor of any Equipment covered by a certificate of
      title or ownership, cause the Agent to be listed as the lienholder on such
      certificate  of  title  and  within  120 days of the  acquisition  thereof
      deliver evidence of the same to the Agent;

            (e)  keep  full and  accurate  books  and  records  relating  to the
      Collateral,  and stamp or  otherwise  mark such books and  records in such
      manner  as the  Agent  may  reasonably  require  in order to  reflect  the
      security interests granted by this Agreement;

            (f)  furnish to the Agent  from time to time (but,  unless a Default
      shall have occurred and be continuing,  no more frequently than quarterly)
      statements and schedules further  identifying and describing the Copyright
      Collateral,   the  Patent   Collateral   and  the  Trademark   Collateral,
      respectively,  and such other  reports in  connection  with the  Copyright
      Collateral,  the Patent  Collateral and the Trademark  Collateral,  as the
      Agent may reasonably request, all in reasonable detail;

            (g)  promptly  upon request of the Agent,  following  receipt by the
      Agent of any  statements,  schedules  or  reports  pursuant  to clause (f)
      above,  modify this Agreement by amending  Annex 2, 3 or 4 hereto,  as the
      case may be, to include any Copyright,  Patent or Trademark  which becomes
      part of the Collateral under this Agreement;

            (h) permit  representatives of the Agent, upon reasonable notice, at
      any time during normal  business  hours to inspect and make abstracts from
      its  books  and  records   pertaining  to  the   Collateral,   and  permit
      representatives of the Agent to be present at such Subsidiary  Guarantor's
      place of business to receive copies of all  communications and remittances
      relating  to  the  Collateral,  and  forward  copies  of  any  notices  or
      communications  received by such Subsidiary  Guarantor with respect to the
      Collateral all in such manner as the Agent may require;

            (i) upon the occurrence  and during the  continuance of any Default,
      upon request of the Agent,  promptly notify (and such Subsidiary Guarantor
      hereby  authorizes  the Agent so to notify) each account debtor in respect
      of any Accounts or Instruments  that such  Collateral has been assigned to
      the Agent hereunder, and that any payments due or to become due in respect
      of such Collateral are to be made directly to the Agent; and

            (j) in the event of any  termination,  revocation  or return of sums
      contained  in any  escrow  account,  trust  account  or  escrow  or  trust
      arrangement  in which any  Subsidiary  Guarantor  has a direct or indirect
      interest,  whether  legal  or  equitable,  promptly  deposit  any  amounts
      recovered by such  Subsidiary  Guarantor from any such account or from any
      Person who  theretofore  received  any such amount from any such  account,
      directly into the Collateral Account.

            5.02  OTHER  FINANCING  STATEMENTS  AND LIENS.  Except as  otherwise
permitted under Section 8.06 of the Credit Agreement,  without the prior written
consent of the Agent (granted with the  authorization  of such of the Lenders as
are  required  for such  purpose  under the Credit  Agreement),  the  Subsidiary
Guarantors  shall not file or suffer to be on file, or authorize or permit to be
filed or to be on file, in any  jurisdiction,  any  financing  statement or like
instrument with respect to the Collateral in which the Agent is not named as the
sole secured party for the benefit of the Lenders.

            5.03 PRESERVATION OF RIGHTS. The Agent shall not be required to take
steps  necessary  to preserve  any rights  against  prior  parties to any of the
Collateral.

            5.04  SPECIAL PROVISIONS RELATING TO CERTAIN COLLATERAL.

            (a)  EQUITY COLLATERAL.

            (1) The Subsidiary  Guarantors  will cause the Equity  Collateral to
constitute  at all  times  100%  of the  ownership  interests  of any  class  or
character of each Issuer then  outstanding  (or, in the case of the ownership by
New Haven Register, Inc. of the shares of The Hartford Times, Inc. ("HTI"), such
percentage  of the total number of shares of each class of capital  stock of HTI
owned as of the date hereof).

            (2) So long as no  Event  of  Default  shall  have  occurred  and be
continuing,  the  Subsidiary  Guarantors  shall have the right to  exercise  all
voting,  consensual  and other  powers of  ownership  pertaining  to the  Equity
Collateral for all purposes not  inconsistent  with the terms of this Agreement,
the Credit Agreement, the Notes or any other instrument or agreement referred to
herein or therein, provided that the Subsidiary Guarantors jointly and severally
agree  that they  will not vote the  Equity  Collateral  in any  manner  that is
inconsistent with the terms of this Agreement,  the Credit Agreement,  the Notes
or any such other  instrument  or  agreement;  and the Agent  shall  execute and
deliver to the  Subsidiary  Guarantors  or cause to be executed and delivered to
the  Subsidiary  Guarantors all such proxies,  powers of attorney,  dividend and
other orders,  and all such  instruments,  without  recourse,  as the Subsidiary
Guarantors  may  reasonably  request for the purpose of enabling the  Subsidiary
Guarantors to exercise the rights and powers which they are entitled to exercise
pursuant to this Section 5.04(a)(2).

            (3)  Unless  and  until an  Event of  Default  has  occurred  and is
continuing,  but  subject  to the  provisions  of  Section  8.09  of the  Credit
Agreement which limit the right of each of the Borrower and its  Subsidiaries to
declare or make any  Restricted  Payment,  the  Subsidiary  Guarantors  shall be
entitled to receive and retain any dividends or  distributions in respect of the
Equity Collateral.

            (4) If any Event of  Default  shall have  occurred,  then so long as
such Event of Default shall continue, and whether or not the Agent or any Lender
exercises any available right to declare any Secured  Obligation due and payable
or seeks or pursues any other relief or remedy  available to it under applicable
law or under this Agreement,  the Credit Agreement, any other Credit Document or
any other agreement relating to such Secured Obligation, all dividends and other
distributions  on the Equity  Collateral shall be paid directly to the Agent and
retained  by it in the  Collateral  Account  as part of the  Equity  Collateral,
subject to the terms of this  Agreement,  and,  if the Agent shall so request in
writing,  the Subsidiary  Guarantors  jointly and severally agree to execute and
deliver to the Agent  appropriate  additional  dividend,  distribution and other
orders  and  documents  to that end,  provided  that if such Event of Default is
cured,  any such dividend or distribution  theretofore  paid to the Agent shall,
upon  request of the  Subsidiary  Guarantors  (except to the extent  theretofore
applied to the Secured  Obligations)  be returned by the Agent to the Subsidiary
Guarantors.

            (b)   INTELLECTUAL PROPERTY.

            (1) For the  purpose of enabling  the Agent to  exercise  rights and
remedies  under  Section 5.05 hereof at such time as the Agent shall be lawfully
entitled to exercise such rights and  remedies,  and for no other  purpose,  the
Subsidiary  Guarantors hereby grant to the Agent, to the extent  assignable,  an
irrevocable,  non-exclusive  license  (exercisable without payment of royalty or
other  compensation  to the Subsidiary  Guarantors) to use,  assign,  license or
sublicense any of the Intellectual Property (other than the Trademark Collateral
or  goodwill  associated  therewith)  now  owned or  hereafter  acquired  by the
Subsidiary  Guarantors,  wherever  the same may be  located,  including  in such
license reasonable access to all media in which any of the licensed items may be
recorded or stored and to all  computer  programs  used for the  compilation  or
printout thereof.

            (2) Notwithstanding  anything contained herein to the contrary,  but
subject to the  provisions of Section 8.05 of the Credit  Agreement  which limit
the right of the Borrower and its Subsidiaries to dispose of their property,  so
long  as no  Event  of  Default  shall  have  occurred  and be  continuing,  the
Subsidiary  Guarantors  will be  permitted  to  exploit,  use,  enjoy,  protect,
license, sublicense, assign, sell, dispose of or take other actions with respect
to the  Intellectual  Property  in the  ordinary  course of the  business of the
Subsidiary  Guarantors.  In  furtherance  of the  foregoing,  unless an Event of
Default shall have occurred and is continuing the Agent shall from time to time,
upon the request of the Subsidiary Guarantors through the Borrower,  execute and
deliver  any  instruments,  certificates  or  other  documents,  in the  form so
requested,  which the  Subsidiary  Guarantors  through the  Borrower  shall have
certified are  appropriate  (in their judgment) to allow them to take any action
permitted above (including  relinquishment  of the license provided  pursuant to
clause (1) immediately above as to any specific Intellectual Property). Further,
upon the payment in full of all of the Secured  Obligations and  cancellation or
termination  of the  Commitments  and LC Exposure or earlier  expiration of this
Agreement  or  release  of the  Collateral,  the Agent  shall  grant back to the
Subsidiary  Guarantors the license  granted  pursuant to clause (1)  immediately
above.  The  exercise of rights and  remedies  under  Section 5.05 hereof by the
Agent  shall  not  terminate  the  rights  of the  holders  of any  licenses  or
sublicenses  theretofore granted by the Subsidiary Guarantors in accordance with
the first sentence of this clause (2).

            (c)   MOTOR VEHICLES.

            (1) At the request of the Agent,  each  Subsidiary  Guarantor  shall
deliver to the Agent originals of the certificates of title or ownership for the
Motor Vehicles owned by it with the Agent listed as lienholder.

            (2) Upon the  acquisition  after the date  hereof by any  Subsidiary
Guarantor  of any Motor  Vehicle,  at the  request of the Agent such  Subsidiary
Guarantor shall deliver to the Agent  originals of the  certificates of title or
ownership for such Motor Vehicle,  together with the manufacturer's statement of
origin,  with the Agent listed as lienholder;  PROVIDED,  however,  if the Motor
Vehicle to be acquired is subject to a purchase  money  security  interest,  the
Agent shall be listed as a junior lienholder to the Person holding such purchase
money security interest.

            (3) Without limiting Section 5.10 hereof, each Subsidiary  Guarantor
hereby appoints the Agent as its attorney-in-fact, effective the date hereof and
terminating upon the termination of the obligations of the Subsidiary Guarantors
under  this  Agreement,  for the  purpose  of (i)  executing  on  behalf of such
Subsidiary Guarantor title or ownership applications for filing with appropriate
state agencies to enable Motor Vehicles now owned or hereafter  acquired by such
Subsidiary  Guarantor to be retitled and the Agent listed as lienholder thereon,
(ii) filing such  applications with such state agencies and (iii) executing such
other  documents and  instruments  on behalf of, and taking such other action in
the name of,  such  Subsidiary  Guarantor  as the  Agent may deem  necessary  or
advisable to accomplish the purposes hereof (including,  without limitation, the
purpose of  creating  in favor of the Agent (for the  benefit of the  Lenders) a
perfected  lien on the Motor  Vehicles and exercising the rights and remedies of
the Agent under Section 5.05 hereof).  This appointment as  attorney-in-fact  is
irrevocable and coupled with an interest.

            (4) Any certificates of title or ownership delivered pursuant to the
terms hereof shall be accompanied by odometer  statements for each Motor Vehicle
covered thereby.

            5.05 EVENTS OF DEFAULT, ETC. During the period during which an Event
of Default shall have occurred and be continuing:

            (i) each  Subsidiary  Guarantor  shall, at the request of the Agent,
      assemble the  Collateral  owned by it at such place or places,  reasonably
      convenient to both the Agent and such Subsidiary Guarantor,  designated in
      its request;

            (ii) the  Agent may make any  reasonable  compromise  or  settlement
      deemed  desirable with respect to any of the Collateral and may extend the
      time of payment, arrange for payment in installments,  or otherwise modify
      the terms of, any of the Collateral;

            (iii) the Agent  shall  have all of the  rights  and  remedies  with
      respect to the Collateral of a secured party under the Uniform  Commercial
      Code (whether or not said Code is in effect in the jurisdiction  where the
      rights and remedies are asserted) and such additional  rights and remedies
      to which a  secured  party is  entitled  under  the laws in  effect in any
      jurisdiction  where any rights and  remedies  hereunder  may be  asserted,
      including,  without limitation, the right, to the maximum extent permitted
      by law, to exercise all voting,  consensual  and other powers of ownership
      pertaining  to the  Collateral  as if the Agent were the sole and absolute
      owner  thereof  (and  each  Subsidiary  Guarantor  agrees to take all such
      action as may be appropriate to give effect to such right);

            (iv) the Agent in its discretion  may, in its name or in the name of
      the  Subsidiary  Guarantors  or  otherwise,  demand,  sue for,  collect or
      receive any money or property at any time payable or receivable on account
      of or in  exchange  for any of the  Collateral,  but  shall  be  under  no
      obligation to do so; and

            (v) the Agent may, upon 10 Business  Days' prior  written  notice to
      the  Subsidiary  Guarantors  of the time and  place,  with  respect to the
      Collateral  or any part  thereof  which shall then be or shall  thereafter
      come into the possession,  custody or control of the Agent, the Lenders or
      any of their respective agents,  sell, lease,  assign or otherwise dispose
      of all or any of such  Collateral,  at such  place or  places as the Agent
      deems  best,  and for cash or on credit or for  future  delivery  (without
      thereby  assuming any credit  risk),  at public or private  sale,  without
      demand  of   performance  or  notice  of  intention  to  effect  any  such
      disposition or of time or place thereof (except such notice as is required
      above or by applicable  statute and cannot be waived) and the Agent or any
      Lender or anyone else may be the purchaser,  lessee, assignee or recipient
      of any or all of the  Collateral so disposed of at any public sale (or, to
      the extent permitted by law, at any private sale), and thereafter hold the
      same  absolutely,  free  from  any  claim or  right  of  whatsoever  kind,
      including any right or equity of redemption  (statutory or otherwise),  of
      the  Subsidiary  Guarantors,  any such demand,  notice or right and equity
      being  hereby  expressly  waived and  released.  In the event of any sale,
      assignment,  or other disposition of any of the Trademark Collateral,  the
      goodwill of the Business  connected  with and  symbolized by the Trademark
      Collateral  subject  to  such  disposition  shall  be  included,  and  the
      Subsidiary  Guarantors  shall  supply  to the Agent or its  designee,  for
      inclusion in such sale, assignment or other disposition,  all Intellectual
      Property  relating to such Trademark  Collateral.  The Agent may,  without
      notice or  publication,  adjourn  any public or private  sale or cause the
      same to be  adjourned  from time to time by  announcement  at the time and
      place  fixed for the sale,  and such sale may be made at any time or place
      to which the same may be so adjourned.

The proceeds of each collection,  sale or other  disposition  under this Section
5.05, including by virtue of the exercise of the license granted to the Agent in
Section  5.04(b)(1)  hereof,  shall be applied in  accordance  with Section 5.09
hereof.

            The  Subsidiary  Guarantors  recognize  that,  by reason of  certain
prohibitions contained in the Securities Act of 1933, as amended, and applicable
state securities  laws, the Agent may be compelled,  with respect to any sale of
all or any part of the Collateral,  to limit purchasers to those who will agree,
among  other  things,  to acquire  the  Collateral  for their own  account,  for
investment  and not  with a view to the  distribution  or  resale  thereof.  The
Subsidiary  Guarantors  acknowledge that any such private sales may be at prices
and on terms less favorable to the Agent than those obtainable  through a public
sale without such restrictions,  and, notwithstanding such circumstances,  agree
that any such private  sale shall be deemed to have been made in a  commercially
reasonable  manner  and that the Agent  shall  have no  obligation  to engage in
public  sales  and no  obligation  to delay the sale of any  Collateral  for the
period of time necessary to permit the respective  Issuer thereof to register it
for public sale.

            5.06  DEFICIENCY.  If the  proceeds  of  sale,  collection  or other
realization  of or upon the  Collateral  pursuant  to  Section  5.05  hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured  Obligations,  the  Subsidiary  Guarantors  shall  remain
liable for any deficiency.

            5.07 REMOVALS,  ETC.  Without at least 30 days' prior written notice
to the Agent,  the  Subsidiary  Guarantors  shall not (i)  maintain any of their
books or records with respect to the  Collateral at any office or maintain their
chief  executive  office or their  principal  place of business at any place, or
permit any  Inventory or Equipment to be located  anywhere  other than at one of
the locations  identified in Annex 6 hereto under their  respective  names or in
transit  from one of such  respective  locations  to another or (ii)  change the
respective  corporate  names,  or the  respective  names  under  which  they  do
business, from the names shown on the signature pages hereto.

            5.08  PRIVATE  SALE.  The  Agent  and the  Lenders  shall  incur  no
liability as a result of the sale of the Collateral, or any part thereof, at any
private  sale  pursuant  to Section  5.05  hereof  conducted  in a  commercially
reasonable manner. The Subsidiary Guarantors hereby waive any claims against the
Agent or any  Lender  arising  by reason of the fact that the price at which the
Collateral  may have been  sold at such a  private  sale was less than the price
which might have been  obtained at a public sale or was less than the  aggregate
amount of the  Secured  Obligations,  even if the Agent  accepts the first offer
received and does not offer the Collateral to more than one offeree.

            5.09  APPLICATION OF PROCEEDS.  Except as otherwise herein expressly
provided,  the proceeds of any collection,  sale or other  realization of all or
any part of the Collateral  pursuant hereto, and any other cash at the time held
by the Agent under  Section 4 hereof or this  Section 5, shall be applied by the
Agent:

            FIRST, to the payment of the costs and expenses of such  collection,
      sale or other realization,  including  reasonable  out-of-pocket costs and
      expenses of the Agent and the fees and expenses of its agents and counsel,
      and all expenses, and advances made or incurred by the Agent in connection
      therewith;

            NEXT, to the payment in full of the Secured Obligations in each case
      equally and ratably in accordance with the respective amounts thereof then
      due and owing or as the Lenders holding the same may otherwise agree; and

            FINALLY,  after payment in full of the Secured  Obligations,  to the
      payment to the  respective  Subsidiary  Guarantor,  or its  successors  or
      assigns,  or as a court  of  competent  jurisdiction  may  direct,  of any
      surplus then remaining.

As used in this Section 5, "PROCEEDS" of Collateral shall mean cash,  securities
and other  property  realized  in  respect  of,  and  distributions  in kind of,
Collateral, including any thereof received under any reorganization, liquidation
or adjustment of debt of the  Subsidiary  Guarantors or any issuer of or obligor
on any of the Collateral.

            5.10 ATTORNEY-IN-FACT. Without limiting any rights or powers granted
by this  Agreement  to the Agent while no Event of Default has  occurred  and is
continuing,  upon the  occurrence  and  during the  continuance  of any Event of
Default the Agent is hereby  appointed the  attorney-in-fact  of the  Subsidiary
Guarantors  for the purpose of carrying out the provisions of this Section 5 and
taking  any  action  and  executing  any  instruments  which  the Agent may deem
necessary or advisable to accomplish the purposes hereof,  which  appointment as
attorney-in-fact  is irrevocable and coupled with an interest.  Without limiting
the  generality of the  foregoing,  so long as the Agent shall be entitled under
this Section 5 to make collections in respect of the Collateral, the Agent shall
have the right and power to receive, endorse and collect all checks made payable
to the order of any Subsidiary Guarantor representing any dividend,  payment, or
other  distribution in respect of the Collateral or any part thereof and to give
full discharge for the same.

            5.11  PERFECTION.  Prior to or  concurrently  with the execution and
delivery  of this  Agreement,  each  Subsidiary  Guarantor  shall  (i) file such
financing  statements  and  other  documents  in such  offices  as the Agent may
request to perfect  the  security  interests  granted by Section 3 hereof,  (ii)
cause the Agent (to the  extent  requested  by any  Lender)  to be listed as the
lienholder on all certificates of title or ownership  relating to Motor Vehicles
owned by such Subsidiary Guarantor,  (iii) deliver to the Agent all certificates
identified in Annex 1 hereto,  accompanied by undated stock powers duly executed
in blank and (iv)  deliver to the Agent the  Inter-company  Notes  owing to such
Subsidiary  Guarantor  and  outstanding  on the  date  hereof,  endorsed  and/or
accompanied  by such  instruments  of  assignment  and transfer in such form and
substance as the Agent may reasonably request.

            5.12 TERMINATION.  When all Secured Obligations shall have been paid
in full and the Commitments of the Lenders under the Credit Agreement and all LC
Exposure  shall  have  expired  or  been  terminated,  the  obligations  of  the
Subsidiary Guarantors under this Agreement shall terminate,  and the Agent shall
forthwith cause to be assigned,  transferred and delivered,  against receipt but
without any  recourse,  warranty or  representation  whatsoever,  any  remaining
Collateral  and money  received  in respect  thereof,  to or on the order of the
respective  Subsidiary  Guarantors and to be released and cancelled all licenses
and  rights  referred  to in Section  5.04(b)(1)  hereof.  The Agent  shall also
execute  and  deliver  to  the  respective   Subsidiary   Guarantors  upon  such
termination such Uniform  Commercial Code termination  statements,  certificates
for terminating the Liens on the Motor Vehicles and such other  documentation as
shall be reasonably requested by the respective  Subsidiary Guarantors to effect
the termination and release of the Liens on the Collateral.

            5.13 EXPENSES. The Subsidiary Guarantors jointly and severally agree
to pay to the Agent all out-of-pocket  expenses  (including  reasonable expenses
for legal services of every kind) of, or incident to, the  enforcement of any of
the provisions of this Section 5, or performance by the Agent of any obligations
of the Subsidiary  Guarantors in respect of the Collateral  which the Subsidiary
Guarantors  have failed or refused to perform,  or any actual or attempted sale,
or any exchange, enforcement, collection, compromise or settlement in respect of
any of the  Collateral,  and for the care of the  Collateral  and  defending  or
asserting  rights and claims of the Agent in respect  thereof,  by litigation or
otherwise,  including  expenses of  insurance,  and all such  expenses  shall be
Secured Obligations to the Agent secured under Section 3 hereof.

            5.14 FURTHER ASSURANCES.  The Subsidiary Guarantors agree that, from
time to time upon the written  request of the Agent,  the Subsidiary  Guarantors
will  execute  and deliver  such  further  documents  and do such other acts and
things as the Agent may reasonably request in order fully to effect the purposes
of this Agreement.

            5.15  RELEASE OF MOTOR  VEHICLES.  So long as no Default  shall have
occurred and be continuing,  upon the request of any Subsidiary  Guarantor,  the
Agent shall execute and deliver to such Subsidiary Guarantor such instruments as
such Subsidiary Guarantor shall reasonably request to remove the notation of the
Agent as lienholder on any certificate of title for any Motor Vehicle;  PROVIDED
that any such  instruments  shall be delivered,  and the release  effective only
upon  receipt  by the  Agent of a  certificate  from such  Subsidiary  Guarantor
stating that the Motor Vehicle the lien on which is to be released is to be sold
or has  suffered a Casualty  Event (with title  thereto  passing to the casualty
insurance  company  therefor in  settlement  of the claim for such loss) and any
proceeds of such sale or Casualty  Event,  unless such proceeds are not required
to be applied as provided in Section 2.09(b)(i) or (ii) of the Credit Agreement,
being paid to the Agent hereunder.

            5.16  RELEASE  OF  COLLATERAL.  So long  as no  Default  shall  have
occurred  and be  continuing,  upon the request of a Subsidiary  Guarantor,  the
Agent shall execute and deliver to such Subsidiary Guarantor such instruments as
such  Subsidiary  Guarantor shall  reasonably  request to release any Collateral
that is the subject of a Disposition  that is permitted by the Credit  Agreement
or to which the Majority Lenders have consented.

            Section 6.  MISCELLANEOUS.

            6.01 NO  WAIVER.  No  failure on the part of the Agent or any of its
agents to  exercise,  and no course of dealing  with respect to, and no delay in
exercising,  any  right,  power or remedy  hereunder  shall  operate as a waiver
thereof;  nor shall any  single or partial  exercise  by the Agent or any of its
agents of any right,  power or remedy  hereunder  preclude  any other or further
exercise  thereof or the  exercise  of any other  right,  power or  remedy.  The
remedies herein are cumulative and are not exclusive of any remedies provided by
law.

            6.02 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement shall
be governed by, and  construed in accordance  with,  the law of the State of New
York. Each Subsidiary Guarantor hereby submits to the nonexclusive  jurisdiction
of the United States District Court for the Southern District of New York and of
any New York State  Court  sitting in New York  County for the  purposes  of all
legal  proceedings  arising  out  of  or  relating  to  this  Agreement  or  the
transactions  contemplated hereby. Each Subsidiary Guarantor irrevocably waives,
to the  fullest  extent  permitted  by  law,  any  objection  that it may now or
hereafter have to the laying of the venue of any such proceeding brought in such
a court and any claim that any such proceeding  brought in such a court has been
brought in an inconvenient forum.

            6.03 WAIVER OF JURY TRIAL. EACH SUBSIDIARY GUARANTOR,  THE AGENT AND
EACH LENDER HEREBY  IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY  LEGAL  PROCEEDING  ARISING  OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

            6.04 NOTICES. All notices, requests,  consents and demands hereunder
shall be in writing and telecopied or delivered to the intended recipient at the
Borrower's  address or telecopier number specified  pursuant to Section 11.02 of
the  Credit  Agreement  and  shall be  deemed  to have  been  given at the times
specified in said Section  11.02.  Any notice to be delivered to any  Subsidiary
Guarantor  hereunder  may be  delivered  to  the  Borrower  on  behalf  of  such
Subsidiary Guarantor.

            6.05  WAIVERS,  ETC.  The  terms of this  Agreement  may be  waived,
altered or  amended  only by an  instrument  in writing  duly  executed  by each
Subsidiary  Guarantor  and the Agent (with the consent of such of the Lenders as
are required for such purpose under the Credit Agreement). Any such amendment or
waiver  shall be  binding  upon each  Subsidiary  Guarantor,  the Agent and each
Lender, each holder of any Secured Obligation and the Subsidiary Guarantors.

            6.06  SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon
and inure to the  benefit  of the  respective  successors  and  assigns  of each
Subsidiary  Guarantor,  the Agent,  the  Lenders  and each holder of the Secured
Obligations  (PROVIDED,  however,  that no Subsidiary  Guarantor shall assign or
transfer its rights or obligations  hereunder  without the prior written consent
of the Agent, acting with the consent of such of the Lenders as are required for
such purpose under the Credit Agreement).

            6.07  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts, all of which together shall constitute one and the same instrument
and any of the parties  hereto may execute  this  Agreement  by signing any such
counterpart.

            6.08 AGENTS.  The Agent may employ agents and  attorneys-in-fact  in
connection  herewith  and  shall  not  be  responsible  for  the  negligence  or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.

            6.09   SEVERABILITY.   If  any  provision   hereof  is  invalid  and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other  provisions  hereof  shall remain in full force and effect in such
jurisdiction  and  shall be  liberally  construed  in favor of the Agent and the
Lenders in order to carry out the  intentions of the parties hereto as nearly as
may be possible and (b) the  invalidity  or  unenforceability  of any  provision
hereof in any jurisdiction  shall not affect the validity or  enforceability  of
such provision in any other jurisdiction.


<PAGE>



            IN WITNESS  WHEREOF,  the parties hereto have caused this Subsidiary
Guarantor  Security  Agreement to be duly  executed as of the day and year first
above written.

                              SUBSIDIARY GUARANTORS

                                    ALL HOME DISTRIBUTION, INC.
                                    ASHEBORO PUBLICATIONS, INC.
                                    CHANRY COMMUNICATIONS, LTD.
                                    CHANRY FREEPORT PENNYSAVER, INC.
                                    PENNYSAVER HOME DISTRIBUTION CORP.
                                    CHANRY MEDIA, INC
                                    CHANRY PENNYSAVER, INC.
                                    CHANRY PENNYSAVER II, INC.
                                    CHANRY PENNYSAVER III, INC.
                                    CHANRY PENNYSAVER IV, INC.
                                    THE HARTFORD TIMES, INC.
                                    INS HOLDINGS, INC.
                                    INS HOLDINGS (KANSAS), INC.
                                    INTEGRATED NEWSPAPER SYSTEMS, INC.
                                    INTERCOUNTY ACQUISITION
                                       CORPORATION
                                    JOURNAL COMPANY, INC.
                                    JOURNAL NEWS, INC.
                                    JOURNAL REGISTER EAST HOLDING
                                       COMPANY, INC.
                                    JOURNAL REGISTER EAST, INC.
                                    JOURNAL REGISTER NEWSPAPERS, INC.
                                    JOURNAL REGISTER SUPPLY, INC.
                                    THE LADUE NEWS, INC.
                                    MIDDLETOWN ACQUISITION CORP.
                                    NORTHEAST HOLDING COMPANY, INC.
                                    NORTHEAST PUBLISHING COMPANY, INC.
                                    ORANGE COAST PUBLISHING COMPANY
                                    REGISTER COMPANY, INC.
                                    ST. LOUIS SUN PUBLISHING COMPANY


                                    By /S/  JEAN B. CLIFTON
                                       -----------------------------------------
                                       Title: Executive Vice President,
                                              Chief Financial Officer, 
                                              Treasurer and Secretary

                                    CAPITOL CITY PUBLISHING COMPANY, LLC 
                                    CENTRAL ACQUISITION, LLC 
                                    HOUSATONIC ACQUISITION, LLC
                                    NEW HAVEN  REGISTER,  LLC
                                    OMMA  ACQUISITION, LLC 
                                    THE SARATOGIAN, LLC
                                    SUBURBAN NEWSPAPERS OF GREATER ST.LOUIS, LLC
                                    TAUNTON ACQUISITION, LLC
                                    TIMES HERALD PUBLISHING COMPANY, LLC


                                    BY /S/ JEAN B. CLIFTON
                                       -----------------------------------------
                                       Title:    Manager


                              AGENT

                                    THE CHASE MANHATTAN BANK,
                                    as Agent


                                    By /S/ DAVID G. STAPLES
                                       -----------------------------------------
                                       Title: Vice President



<PAGE>







                                                                         ANNEX 1


                             LIST OF PLEDGED EQUITY



[NAME OF SUBSIDIARY GUARANTOR]

                                               REGISTERED
ISSUER                CERTIFICATE NOS.           OWNER          NUMBER OF SHARES
------                ----------------         ----------       ----------------



<PAGE>


                                                                         ANNEX 2


                 LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
                    APPLICATIONS FOR COPYRIGHT REGISTRATIONS



[NAME OF SUBSIDIARY GUARANTOR]

TITLE             DATE FILED        REGISTRATION NO.        EFFECTIVE DATE
-----             ----------        ----------------        --------------



<PAGE>




                                                                         ANNEX 3


                     LIST OF PATENTS AND PATENT APPLICATIONS



JOURNAL NEWS, INC.
------------------

FILE           PATENT         COUNTRY          REGISTRATION NO.         DATE
----           ------         -------          ----------------         ----




<PAGE>

                                                                         ANNEX 4


                LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
                  TRADEMARK AND SERVICE MARK REGISTRATIONS AND
            APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS


                                 U.S. TRADEMARKS


[NAME OF SUBSIDIARY GUARANTOR]
------------------------------

                        APPLICATION (A)
                        REGISTRATION (R)              REGISTRATION
MARK                    OR SERIES NO. (S)             OR FILING DATE
----                    -----------------             --------------



                               FOREIGN TRADEMARKS
                               ------------------

[NAME OF SUBSIDIARY GUARANTOR]
------------------------------

                      APPLICATION (A)
REGISTRATION          OR
MARK                  REGISTRATION (R)              COUNTRY      FILING DATE (F)
----                  ----------------              -------      ---------------




<PAGE>


                                                                         ANNEX 5


                LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS



[NAME OF SUBSIDIARY GUARANTOR]
------------------------------


<PAGE>

                                                                         ANNEX 6


                                LIST OF LOCATIONS



[NAME OF SUBSIDIARY GUARANTOR]
------------------------------



                                                                     EXHIBIT B-2
                                                                [CONFORMED COPY]





                               GUARANTEE AGREEMENT


                  GUARANTEE AGREEMENT dated as of July 15, 1998, between each of
the  corporations  identified under the caption  "SUBSIDIARY  GUARANTORS" on the
signature  pages  hereto  (each  individually,  a  "SUBSIDIARY  GUARANTOR"  and,
collectively,  the  "SUBSIDIARY  GUARANTORS");  and THE CHASE MANHATTAN BANK, as
agent for the lenders or other  financial  institutions  or entities  party,  as
lenders,  to the Credit Agreement referred to below (in such capacity,  together
with its successors in such capacity, the "AGENT").

                  The  Subsidiary  Guarantors  and the  Agent are  parties  to a
Guarantee  Agreement  dated as of December 21, 1994 (as heretofore  modified and
supplemented  and in  effect  on  the  date  hereof,  the  "EXISTING  SUBSIDIARY
GUARANTEE "), pursuant to which the Subsidiary  Guarantors guaranteed the prompt
payment in full of the Guaranteed  Obligations (as so defined) including,  INTER
ALIA,  obligations of the Borrower under a Credit  Agreement  dated as of May 2,
1997 with certain banks and the Agent (as heretofore  modified and  supplemented
and in effect on the date of this Agreement,  the "EXISTING CREDIT  AGREEMENT").
Substantially   concurrently  herewith,  the  parties  to  the  Existing  Credit
Agreement  are amending in certain  respects  and  restating in its entirety the
Existing Credit  Agreement  pursuant to a Credit  Agreement dated as of the date
hereof  (as  modified  and  supplemented  and in effect  from time to time,  the
"CREDIT AGREEMENT").

                  To induce said lenders to enter into the Credit  Agreement and
to extend  credit  thereunder  and to extend  credit to the Borrower  that would
constitute Other Indebtedness (as hereinafter  defined),  and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  each Subsidiary  Guarantor has agreed to guarantee the Guaranteed
Obligations  (as  hereinafter  defined),  and in that  connection  to amend  and
restate in its entirety  the Existing  Subsidiary  Guarantee.  Accordingly,  the
parties hereto hereby agree as follows:


                  Section 1. DEFINITIONS.  Terms defined in the Credit Agreement
are used herein as defined therein. In addition, as used herein, the term "OTHER
INDEBTEDNESS"  shall mean (a) the  obligations of the Borrower and/or any of its
Subsidiaries  to pay all  amounts  from time to time  owing to any Lender or any
Affiliate of a Lender by the Borrower and/or any of its  Subsidiaries in respect
of any  Hedging  Agreement  entered  into  by  the  Borrower  and/or  any of its
Subsidiaries  and such Lender or such  Affiliate and (b) the  obligations of the
Borrower  to pay all  amounts  owing  from time to time in respect of letters of
credit or  similar  instruments  issued  under  Section  8.07(g)  of the  Credit
Agreement  issued by any Lender or any  Affiliate of a Lender for account of the
Borrower.

                  Section 2.  THE GUARANTEE.

                  2.01 THE GUARANTEE.  The Subsidiary  Guarantors hereby jointly
and  severally  guarantee  to each  Lender  and the Agent  and their  respective
successors  and assigns the prompt  payment in full when due  (whether at stated
maturity,  by acceleration or otherwise) of the principal of and interest on the
Loans  made by the  Lenders  to,  and the  Note(s)  held by each  Lender of, the
Borrower  and all other  amounts  from time to time owing to the  Lenders or the
Agent by the Borrower under the Credit  Agreement and under the Notes and all LC
Disbursements  and all Other  Indebtedness  and interest  thereon,  in each case
strictly in accordance  with the terms thereof  (such  obligations  being herein
collectively  called the "GUARANTEED  OBLIGATIONS").  The Subsidiary  Guarantors
hereby  further  jointly and severally  agree that if the Borrower shall fail to
pay in full when due (whether at stated maturity,  by acceleration or otherwise)
any of the Guaranteed  Obligations,  the Subsidiary Guarantors will promptly pay
the same, without any demand or notice  whatsoever,  and that in the case of any
extension  of time of payment or renewal of any of the  Guaranteed  Obligations,
the same will be promptly  paid in full when due (whether at extended  maturity,
by  acceleration or otherwise) in accordance with the terms of such extension or
renewal.  In addition to the foregoing,  the  Subsidiary  Guarantors  agree,  as
principal  obligors and not as guarantors  only, to pay to the Agent and each of
the Lenders  forthwith upon demand,  in immediately  available  funds, all fees,
expenses and costs,  including,  without limitation,  reasonable attorney's fees
and  expenses,  incurred  or  expended  by any of them in  connection  with this
Guarantee and the preservation and enforcement of its or their rights hereunder,
together with interest on amounts recoverable under this Guarantee from the time
such amounts become due until payment at the Post-Default Rate.

                  2.02  OBLIGATIONS   UNCONDITIONAL.   The  obligations  of  the
Subsidiary  Guarantors under Section 2.01 hereof are absolute and unconditional,
joint and several, irrespective of the value, genuineness,  validity, regularity
or enforceability of the Credit Agreement or the Notes or any other agreement or
instrument  referred  to herein or  therein,  or any  substitution,  release  or
exchange  of any  other  guarantee  of or  security  for  any of the  Guaranteed
Obligations,   and,  to  the  fullest  extent   permitted  by  applicable   law,
irrespective  of  any  other   circumstance   whatsoever  that  might  otherwise
constitute a legal or equitable  discharge or defense of a surety or  guarantor,
it being the intent of this Section 2.02 that the  obligations of the Subsidiary
Guarantors  hereunder  shall be absolute and  unconditional,  joint and several,
under  any  and  all  circumstances.  Without  limiting  the  generality  of the
foregoing,  it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary  Guarantors  hereunder
which shall remain absolute and unconditional as described above:

                     (i) at any time or from time to time, without notice to the
         Subsidiary  Guarantors,  the time for any  performance of or compliance
         with  any of the  Guaranteed  Obligations  shall be  extended,  or such
         performance or compliance shall be waived;

                    (ii) any of the acts  mentioned in any of the  provisions of
         the Credit  Agreement or the Notes or any other agreement or instrument
         referred to herein or therein shall be done or omitted;

                   (iii) the maturity of any of the Guaranteed Obligations shall
         be accelerated, or any of the Guaranteed Obligations shall be modified,
         supplemented  or amended in any respect,  or any right under the Credit
         Agreement or the Notes or any other agreement or instrument referred to
         herein or therein shall be waived or any other  guarantee of any of the
         Guaranteed  Obligations  or any security  therefor shall be released or
         exchanged in whole or in part or otherwise dealt with; or

                    (iv) any lien or security  interest  granted to, or in favor
         of,  the Agent or any  Lender or  Lenders  as  security  for any of the
         Guaranteed Obligations shall be released or shall fail to be perfected.

The Subsidiary Guarantors hereby expressly waive diligence,  presentment, demand
of payment,  protest and all notices  whatsoever,  and any requirement  that the
Agent or any Lender  exhaust any right,  power or remedy or proceed  against the
Borrower  under the  Credit  Agreement  or the Notes or any other  agreement  or
instrument  referred to herein or therein, or against any other Person under any
other guarantee of, or security for, any of the Guaranteed Obligations.

                  2.03   REINSTATEMENT.   The   obligations  of  the  Subsidiary
Guarantors under this Section 2 shall be automatically  reinstated if and to the
extent  that for any  reason  any  payment  by or on behalf of the  Borrower  in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed  Obligations,  whether as a result of any
proceedings  in bankruptcy or  reorganization  or otherwise,  and the Subsidiary
Guarantors  jointly and severally  agree that they will  indemnify the Agent and
each Lender on demand for all reasonable costs and expenses (including,  without
limitation,  fees of counsel) incurred by the Agent or such Lender in connection
with such  rescission  or  restoration,  including  any such costs and  expenses
incurred in defending against any claim alleging that such payment constituted a
preference,  fraudulent  transfer  or  similar  payment  under  any  bankruptcy,
insolvency or similar law.

                  2.04 SUBROGATION. The Subsidiary Guarantors hereby jointly and
severally  agree  that  until  the  payment  and  satisfaction  in  full  of all
Guaranteed  Obligations  and the expiration or  termination  of the  Commitments
under the Credit  Agreement  they shall not exercise any right or remedy arising
by reason of any  performance by them of their guarantee in Section 2.01 hereof,
whether by subrogation or otherwise, against the Borrower or any other guarantor
of any of the  Guaranteed  Obligations or any security for any of the Guaranteed
Obligations.

                  2.05 REMEDIES. The Subsidiary Guarantors jointly and severally
agree  that,  as  between  the  Subsidiary   Guarantors  and  the  Lenders,  the
obligations  of the  Borrower  under the Credit  Agreement  and the Notes may be
declared to be forthwith  due and payable as provided in Section 9 of the Credit
Agreement (and shall be deemed to have become  automatically  due and payable in
the  circumstances  provided in said  Section 9) for  purposes  of Section  2.01
hereof notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against  the  Borrower  and  that,  in the  event of such  declaration  (or such
obligations  being deemed to have become  automatically  due and payable),  such
obligations  (whether or not due and payable by the  Borrower)  shall  forthwith
become due and payable by the Subsidiary Guarantors for purposes of said Section
2.01.

                  2.06  INSTRUMENT  FOR THE  PAYMENT OF MONEY.  Each  Subsidiary
Guarantor hereby  acknowledges  that the guarantee in this Section 2 constitutes
an instrument for the payment of money,  and consents and agrees that any Lender
or the Agent,  at its sole option,  in the event of a dispute by such Subsidiary
Guarantor  in the payment of any moneys due  hereunder,  shall have the right to
bring motion-action under New York CPLR Section 3213.

                  2.07 CONTINUING GUARANTEE.  The guarantee in this Section 2 is
a continuing guarantee,  and shall apply to all Guaranteed  Obligations whenever
arising.

                  2.08 RIGHTS OF CONTRIBUTION.  The Subsidiary Guarantors hereby
agree, as between themselves,  that if any Subsidiary  Guarantor shall become an
Excess  Funding  Guarantor  (as defined  below) by reason of the payment by such
Subsidiary  Guarantor  of any  Guaranteed  Obligations,  each  other  Subsidiary
Guarantor shall, on demand of such Excess Funding  Guarantor (but subject to the
next  sentence),  pay to such Excess  Funding  Guarantor an amount equal to such
Subsidiary Guarantor's Pro Rata Share (as defined below and determined, for this
purpose,  without  reference to the  Properties,  debts and  liabilities of such
Excess Funding  Guarantor) of the Excess Payment (as defined below) made by such
Excess Funding Guarantor in respect of such Guaranteed Obligations.  The payment
obligation of a Subsidiary  Guarantor to any Excess Funding Guarantor under this
Section 2.08 shall be  subordinate  and subject in right of payment to the prior
payment in full of the obligations of such Subsidiary  Guarantor under the other
provisions  of this  Section  2 and such  Excess  Funding  Guarantor  shall  not
exercise  any right or remedy  with  respect to such  excess  until  payment and
satisfaction in full of all of such obligations.

                  For  purposes  of  this  Section  2.08,  (i)  "EXCESS  FUNDING
GUARANTOR"  shall mean, in respect of any Guaranteed  Obligations,  a Subsidiary
Guarantor  that has  paid an  amount  in  excess  of its Pro Rata  Share of such
Guaranteed  Obligations,  (ii) "EXCESS  PAYMENT"  shall mean,  in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed  Obligations and (iii) "PRO RATA SHARE"
shall mean, for any Subsidiary Guarantor,  the ratio (expressed as a percentage)
of (x) the amount by which the aggregate  fair saleable  value of all Properties
of such  Subsidiary  Guarantor  (excluding  any  shares  of stock  of any  other
Subsidiary  Guarantor)  exceeds the amount of all the debts and  liabilities  of
such Subsidiary Guarantor  (including  contingent,  subordinated,  unmatured and
unliquidated  liabilities,  but excluding  the  obligations  of such  Subsidiary
Guarantor  hereunder and any obligations of any other Subsidiary  Guarantor that
have been  Guaranteed by such  Subsidiary  Guarantor) to (y) the amount by which
the aggregate  fair saleable  value of all Properties of the Borrower and all of
the Subsidiary  Guarantors  exceeds the amount of all the debts and  liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding  the  obligations  of  the  Subsidiary  Guarantors  hereunder)  of the
Borrower and all of the  Subsidiary  Guarantors  as of the date  hereof.  If any
entity becomes a Subsidiary  Guarantor hereunder  subsequent to the date hereof,
then for  purposes of this  Section 2.08 such  subsequent  Subsidiary  Guarantor
shall be deemed to have been a  Subsidiary  Guarantor  as of the date hereof and
the aggregate  present fair saleable value of Properties,  and the amount of the
debts and liabilities,  of such Subsidiary Guarantor as of the date hereof shall
be deemed  to be equal to such  value  and  amount  on the date such  Subsidiary
Guarantor becomes a Subsidiary Guarantor hereunder.

                  2.09  GENERAL  LIMITATION  ON  GUARANTEE  OBLIGATIONS.  In any
action or proceeding  involving any state corporate law, or any state or Federal
bankruptcy,  insolvency,  reorganization  or other law  affecting  the rights of
creditors  generally,  if the  obligations  of any  Subsidiary  Guarantor  under
Section  2.01 hereof would  otherwise,  taking into  account the  provisions  of
Section 2.08 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other  creditors,  on account of the amount
of its  liability  under said  Section  2.01,  then,  notwithstanding  any other
provision hereof to the contrary,  the amount of such liability  shall,  without
any further action by such Subsidiary  Guarantor,  the Agent, the Lenders or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable  and not  subordinated to the claims of other creditors as
determined in such action or proceeding.


                  Section 3.  REPRESENTATIONS  AND  WARRANTIES.  Each Subsidiary
Guarantor represents and warrants to the Lenders and the Agent that:

                  3.01 CORPORATE EXISTENCE.  Such Subsidiary Guarantor: (a) is a
corporation  duly organized and validly  existing and in good standing under the
laws of the jurisdiction of its incorporation;  (b) has all requisite  corporate
power, and has all material governmental licenses, authorizations,  consents and
approvals  necessary to own its assets and carry on its business as now being or
as  proposed  to be  conducted;  and  (c) is  qualified  to do  business  in all
jurisdictions  in which the nature of the  business  conducted  by it makes such
qualification   necessary   and  where  failure  so  to  qualify  would  (either
individually  or in  the  aggregate)  have  a  material  adverse  effect  on its
financial condition, operations, business or prospects.

                  3.02 LITIGATION.  Except as listed or described in Schedule II
to the  Credit  Agreement,  there are no legal or  arbitral  proceedings  or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of such Subsidiary  Guarantor)  threatened  against
such  Subsidiary  Guarantor  which might  reasonably be expected to be adversely
determined  and,  if  so  determined,   might  reasonably  be  expected  (either
individually  or in the  aggregate)  to have a  material  adverse  effect on the
financial  condition,  operations,  business  or  prospects  of such  Subsidiary
Guarantor  or on the  ability  of  such  Subsidiary  Guarantor  to  perform  its
obligations  hereunder or on the rights and remedies of the Agent or the Lenders
hereunder or on the validity or enforceability of this Guarantee.

                  3.03 NO BREACH.  None of the  execution  and  delivery of this
Guarantee Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions  hereof will conflict with or result in
a breach  of, or  require  any  consent  under,  the  charter or by-laws of such
Subsidiary Guarantor,  or any applicable law or regulation,  or any order, writ,
injunction or decree of any court or  governmental  authority or agency,  or any
agreement  or  instrument  to which such  Subsidiary  Guarantor is a party or by
which it is bound or to which it is subject,  or  constitute a default under any
such  agreement or  instrument,  or result in the creation or  imposition of any
Lien upon any of the revenues or assets of such Subsidiary Guarantor pursuant to
the terms of any such agreement or instrument.

                  3.04  CORPORATE  ACTION.  Such  Subsidiary  Guarantor  has all
necessary  corporate  power and  authority  to execute,  deliver and perform its
obligations  under  this  Guarantee  Agreement;  the  execution,   delivery  and
performance by such Subsidiary  Guarantor of this Guarantee  Agreement have been
duly  authorized  by all  necessary  corporate  action  on its  part;  and  this
Guarantee  Agreement  has been duly and validly  executed and  delivered by such
Subsidiary  Guarantor and constitutes its legal,  valid and binding  obligation,
enforceable in accordance  with its terms,  except as the same may be limited by
(a) bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the  enforcement of creditors'  rights  generally and (b) general  principles of
equity (regardless of whether such  enforceability is considered in a proceeding
in equity or at law).

                  3.05 APPROVALS.  No authorizations,  approvals or consents of,
and no filings or registrations  with, any governmental or regulatory  authority
or agency are  necessary  for the  execution,  delivery or  performance  by such
Subsidiary  Guarantor  of  this  Guarantee  Agreement  or for  the  validity  or
enforceability hereof.


                  Section 4.  MISCELLANEOUS.

                  4.01 NO  WAIVER.  No  failure  on the part of the Agent or any
Lender to  exercise,  and no course of dealing  with respect to, and no delay in
exercising,  any  right,  power or remedy  hereunder  shall  operate as a waiver
thereof;  nor shall any single or partial exercise by the Agent or any Lender of
any right,  power or remedy  hereunder  preclude  any other or further  exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.

                  4.02  NOTICES.  All  notices,  requests,  consents and demands
hereunder  shall be in writing  and  telecopied  or  delivered  to the  intended
recipient at the Borrower's  "Address for Notices" specified pursuant to Section
11.02 of the Credit Agreement (with such copies as specified  therein) and shall
be deemed to have been given at the times specified in said Section 11.02.

                  4.03 EXPENSES. The Subsidiary Guarantors jointly and severally
agree to reimburse  each of the Lenders and the Agent for all  reasonable  costs
and expenses of the Lenders and the Agent (including,  without  limitation,  the
reasonable  fees and  expenses  of legal  counsel)  in  connection  with (i) any
Default  and  any  enforcement  or  collection   proceedings  relating  thereto,
including,  without  limitation,  (x)  bankruptcy,   insolvency,   receivership,
foreclosure,  winding up or liquidation proceedings,  (y) judicial or regulatory
proceedings and (z) workout,  restructuring or other negotiations or proceedings
(whether or not the workout,  restructuring or transaction  contemplated thereby
is consummated) and (ii) the enforcement of this Section 4.04.

                  4.05  AMENDMENTS,  ETC. The terms of this Guarantee  Agreement
may be waived, altered or amended only by an instrument in writing duly executed
by each Subsidiary  Guarantor and the Agent (with the written consent of such of
the  Lenders as are  required  for such  purpose in Section  10.09 of the Credit
Agreement).  Any such  amendment  or waiver  shall be binding upon the Agent and
each Lender and each other holder of any of the Guaranteed Obligations.

                  4.06 SUCCESSORS AND ASSIGNS. This Guarantee Agreement shall be
binding upon and inure to the benefit of the  respective  successors and assigns
of each Subsidiary  Guarantor,  the Agent, the Lenders and each holder of any of
the Guaranteed  Obligations  (PROVIDED,  however,  that no Subsidiary  Guarantor
shall assign or transfer its rights hereunder  without the prior written consent
of the Agent).

                  4.07  CAPTIONS.  The captions and section  headings  appearing
herein are included  solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Guarantee Agreement.

                  4.08 COUNTERPARTS. This Guarantee Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same  instrument  and any of the parties  hereto may execute this  Guarantee
Agreement by signing any such counterpart.

                  4.09  SEVERABILITY.  If any  provision  hereof is invalid  and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other  provisions  hereof  shall remain in full force and effect in such
jurisdiction  and  shall be  liberally  construed  in favor of the Agent and the
Lenders in order to carry out the  intentions of the parties hereto as nearly as
may be possible and (b) the  invalidity  or  unenforceability  of any  provision
hereof in any jurisdiction  shall not affect the validity or  enforceability  of
such provision in any other jurisdiction.

                  4.10 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Guarantee
Agreement shall be governed by, and construed in accordance with, the law of the
state of New York. Each Subsidiary  Guarantor hereby submits to the nonexclusive
jurisdiction  of the United States  District Court for the Southern  District of
New York and of any New York  State  court  sitting  in New York  County for the
purposes of all legal  proceedings  arising out of or relating to this Guarantee
Agreement or the transactions  contemplated  hereby.  Each Subsidiary  Guarantor
irrevocably  waives,  to the fullest extent permitted by law, any objection that
it may now or hereafter  have to the laying of the venue of any such  proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.

                  4.11  WAIVER OF JURY TRIAL.  EACH  SUBSIDIARY  GUARANTOR,  THE
AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL  PROCEEDING  ARISING OUT
OF OR RELATING TO THIS  GUARANTEE  AGREEMENT  OR THE  TRANSACTIONS  CONTEMPLATED
HEREBY.


<PAGE>



                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Guarantee  Agreement to be duly  executed  and  delivered as of the day and year
first above written.

                              SUBSIDIARY GUARANTORS
                              ---------------------

                                  ALL HOME DISTRIBUTION, INC.
                                  ASHEBORO PUBLICATIONS, INC.
                                  CHANRY COMMUNICATIONS, LTD.
                                  CHANRY FREEPORT PENNYSAVER, INC.
                                  PENNYSAVER HOME DISTRIBUTION CORP.
                                  CHANRY MEDIA, INC
                                  CHANRY PENNYSAVER, INC.
                                  CHANRY PENNYSAVER II, INC.
                                  CHANRY PENNYSAVER III, INC.
                                  CHANRY PENNYSAVER IV, INC.
                                  THE HARTFORD TIMES, INC.
                                  INS HOLDINGS, INC.
                                  INS HOLDINGS (KANSAS), INC.
                                  INTEGRATED NEWSPAPER SYSTEMS, INC.
                                  INTERCOUNTY ACQUISITION
                                    CORPORATION
                                  JOURNAL COMPANY, INC.
                                  JOURNAL NEWS, INC.
                                  JOURNAL REGISTER EAST HOLDING
                                    COMPANY, INC.
                                  JOURNAL REGISTER EAST, INC.
                                  JOURNAL REGISTER NEWSPAPERS, INC.
                                  JOURNAL REGISTER SUPPLY, INC.
                                  THE LADUE NEWS, INC.
                                  MIDDLETOWN ACQUISITION CORP.
                                  NORTHEAST HOLDING COMPANY, INC.
                                  NORTHEAST PUBLISHING COMPANY, INC.
                                  ORANGE COAST PUBLISHING COMPANY
                                  REGISTER COMPANY, INC.
                                  ST. LOUIS SUN PUBLISHING COMPANY


                                  By /S/ JEAN B. CLIFTON
                                     ------------------------------------------
                                     Title: Executive Vice President, Chief
                                            Financial Officer, Treasurer and
                                            Secretary

                                   CAPITOL CITY PUBLISHING COMPANY, LLC
                                   CENTRAL ACQUISITION, LLC 
                                   HOUSATONIC ACQUISITION, LLC 
                                   NEW HAVEN REGISTER, LLC     
                                   OMMA ACQUISITION, LLC 
                                   THE SARATOGIAN, LLC  
                                   SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS, LLC
                                   TAUNTON ACQUISITION, LLC
                                   TIMES HERALD PUBLISHING COMPANY, LLC
                                                        

                                    By /S/ JEAN B. CLIFTON
                                       ----------------------------------------
                                       Title: Manager


                              AGENT
                              -----

                                    THE CHASE MANHATTAN BANK, as Agent
                                    


                                     By /S/ DAVID G. STAPLES
                                        ---------------------------------------
                                        Title: Vice President

                                                                       EXHIBIT C



                        [Form of Compliance Certificate]


               CERTIFICATE OF COMPLIANCE WITH CREDIT AGREEMENT
                            DATED AS OF _______, 1998


                            JOURNAL REGISTER COMPANY


            This Compliance Certificate is delivered pursuant to Section 8.01 of
the Credit  Agreement dated as of , 1998 (as amended,  supplemented or otherwise
modified  and in  effect  from time to time,  the  "CREDIT  AGREEMENT")  between
Journal  Register  Company (the  "BORROWER"),  the Lenders party thereto and The
Chase Manhattan Bank, as Agent.  Unless  otherwise  defined herein,  capitalized
terms used herein shall have the meanings assigned them in the Credit Agreement.
Entries on Annex A hereto shall relate to the periods  referred to in the Credit
Agreement for determination thereof and represent descriptive references only to
the  corresponding  components set forth in the relevant  sections of the Credit
Agreement (and the  definitions  therein  ancillary  thereto).  This  Compliance
Certificate relates to the fiscal [QUARTER/YEAR] of the Borrower ended
-----------, ----.

            I,  _____________________,  the  __________________ of the Borrower,
hereby  certify  that (a) no Default has  occurred  and is  continuing;  (b) the
financial  statements annexed hereto fairly present the financial  condition and
results of operations of the Borrower and its  Subsidiaries  in accordance  with
generally accepted accounting principles, consistently applied, as at the end of
[THE RELEVANT PERIOD]  [(SUBJECT TO NORMAL YEAR-END AUDIT  ADJUSTMENTS)] and (c)
the information contained in Annex A hereto is true and correct.


                                          JOURNAL REGISTER COMPANY



                                          By__________________________
                                            Name:
                                            Title:

Date:____________________


<PAGE>


                                                                         ANNEX A

                             COMPLIANCE CERTIFICATE

                          For the fiscal [QUARTER/YEAR]
               ended on ________, 199_ (the "CALCULATION PERIOD")


Section 8.05(c)(ii)
-------------------

The aggregate fair market value of obsolete or worn-out
property, tools or equipment of the Borrower and its
Subsidiaries disposed of pursuant to Section 8.05(c)(ii)
during the Calculation Period                               $________

Aggregate year to date                                      $________

MAXIMUM permitted in any calendar year                      $1,000,000
                                                             ---------


Section 8.05(c)(iii)
-------------------

The aggregate fair market value of the assets of the
Borrower and its Subsidiaries sold for cash pursuant
to Section 8.05(c)(iii) during the Calculation Period       $________

Aggregate year to date                                      $________

Aggregate since the Effective Date                          $________

(a) MAXIMUM permitted in any fiscal year is equal to
    15% of Cash Flow of the Borrower and its Subsidiaries
    for such fiscal year (as determined in item (b) in      $________
    Section 8.11(b) below)

(b) MAXIMUM permitted after the Effective Date is equal
    to 30% of cumulative Cash Flow of the Borrower (as
    determined in item (b) in Section 8.11(b) below)        $________
    


Section 8.05(c)(vi)
-------------------

The aggregate fair market value of the assets identified
on Annex 2 to the Credit Agreement sold for cash pursuant
to Section 8.05(c)(vi) of the Credit Agreement              $________
 
MAXIMUM permitted                                           $________


Section 8.06(h)
---------------

The maximum aggregate amount of Indebtedness of the
Borrower and its Subsidiaries outstanding at any time
during the  Calculation  Period secured by Liens
permitted by Section 8.06(h)                                $_________

MAXIMUM permitted at any time                               $10,000,000
                                                            -----------

Section 8.06(i)
---------------

The maximum aggregate amount of Indebtedness of the
Borrower and its Subsidiaries  outstanding at any time
during the Calculation Period secured by additional
Liens as permitted by Section 8.06(i)                       $_________

MAXIMUM permitted at any time                               $10,000,000
                                                            -----------

Section 8.06(j)
---------------

(a)   The maximum aggregate amount of Capital Lease
      Obligations permitted under Section 8.07(d) and
      outstanding at any time during the Calculation
      Period secured by Liens as permitted by Section       
      8.06(j)                                               $_________

(b)   The aggregate value of the Property subject to
      the sale and leaseback arrangements permitted 
      under Section 8.17                                    $_________ 

MAXIMUM permitted at any time ($50,000,000 minus (b)
above)                                                      $_________


Section 8.07(d)
---------------

The maximum aggregate amount of Indebtedness of the
Borrower and its Subsidiaries (other than Indebtedness
permitted by 8.07(a) and (c)) outstanding at any time
during the Calculation Period pursuant to Section 8.07(d)    $_________


MAXIMUM permitted at any time                               $100,000,000


Section 8.07(e)
---------------

The maximum aggregate amount of Convertible Debt of
the Borrower outstanding at any time during the 
Calculation Period pursuant to Section 8.07(e) and
having scheduled payments, prepayments, redemptions,
retirements, or sinking or defeasance fund or like payments
or final maturity on or in respect of such Indebtedness
required prior to the 91st day after the last scheduled
principal payment date of any of the Loans                  $_________


MAXIMUM permitted at any time                               $200,000,000


Section 8.08(e)
---------------

The aggregate amount of additional Investments made by
the Borrower and its Subsidiaries as permitted by 8.08(e)   $_________


MAXIMUM permitted                                           $50,000,000
                                                            -----------


Section 8.09(a)
---------------

The aggregate amount of cash dividends paid by the
Borrower on its common stock during the Calculation
Period                                                      $_________

(a)   Cumulative Excess Cash Flow                           $________

(b)   The Total Leverage Ratio as at the date of such
      payment                                                ______ to 1

MAXIMUM permitted cash dividends in any fiscal year

(i)   If (b) above is less than 4.50 to 1, 50% of
      the amount in clause (a) above                        $________

(ii)  If (b) above is greater than or equal to 4.50 to
      1, 25% of the amount in clause (a) above              $________


Section 8.09(b)
---------------

The aggregate amount of additional cash dividends
paid by the Borrower on its common stock during the
Calculation Period pursuant to Section 8.09(b)              $_________

MAXIMUM permitted in any fiscal year                        $4,000,000
                                                             ---------


Section 8.09(c)
---------------

The aggregate amount of common stock of the Borrower
or options thereto repurchased from any management
official upon his or her death or termination of
employment for cash or promissory notes                     $_________

MAXIMUM permitted in any fiscal year                        $30,000,000
                                                             ----------


Section 8.10
------------

(a)   The aggregate Capital Expenditures made by the
      Borrower and its Subsidiaries during the
      Calculation Period                                    $_________

(b)   The aggregate amount of proceeds from sales of
      assets in the ordinary course of business  pursuant
      to Section  8.05(c)(i)  or from  insurance in
      respect of any capital asset subject to a Casualty
      Event applied or to be applied or committed to be
      applied to the purchase of like assets within 365       
      days of such sale or Casualty Event                   $_________

(c)   Total Capital Expenditures ((a) MINUS (b))            $_________
                                      -----

(d)   Cash Flow for the period of twelve complete
      consecutive  months ended on, or most recently
      ended prior to, the last day of the Calculation
      Period (as determined in item (b) in                  $_________
      Section 8.11(b) below)

(e)   Capital Expenditures made during the period
      of twelve complete consecutive months ended on,
      or most recently ended prior to, the last day
      of the Calculation Period                             $_________

(f)   Cash Flow (as determined in item (d) above)
      MINUS Capital Expenditures (as determined in
      item (e) above)                                       $_________

      MAXIMUM (the greater of (i) $30,000,000 and
      (ii) the result of item (f) above PLUS $[INSERT
      APPROPRIATE  AMOUNT FROM  SECTION 8.10 OF THE
      CREDIT AGREEMENT] during [INSERT APPROPRIATE
      YEAR FROM THE CREDIT AGREEMENT]                       $_________


Section 8.10(z)

Capital Expenditures made in respect of the Philadelphia
Project in excess of the amounts set forth above           $_________


MAXIMUM permitted                                           $50,000,000
                                                            -----------



Section 8.11(b)
---------------

(a)   Total Debt (as defined in the Credit Agreement)
      of the Borrower and its Subsidiaries as at the
      last day of the Calculation Period                    $_________

(b)   Cash Flow of the Borrower and its Subsidiaries
      for the four quarters ended on or most recently
      ended prior to the last day of the Calculation Period:

      (i)   operating income before taxes, Interest
            Expense, amortization and depreciation
            and extraordinary gains and losses              $_________

      (ii)  other non-cash subtractions from net
            operating income and all other non-cash           
            items of income are                             $_________

      (iii) additions (or subtractions for) the
            acquisition of the Taunton Daily Gazette        $_________

      (iv)  adjustments for Permitted Acquisitions or
            Dispositions                                    $_________

      (v)   expenses in respect of the Borrower's and
            its Subsidiaries' implementation of their
            on-line services of up to $500,000 for any
            period during the fiscal year ended
            December 31, 1997                               $_________

      (vi)  other expenses in respect of the Borrower's
            and its Subsidiaries' on-line services of up
            to $1,000,000 for any fiscal year               $_________

      (vii) payments under the Management Bonus
            Plan and  accrued  expenses relating to the
            discontinuance of JRN's StarShare Plan          $_________
            not exceeding $35,000,000

(c)   Cash Flow ((i) MINUS (ii) PLUS (or MINUS)
     (iii) PLUS (or MINUS) (iv) PLUS (v) PLUS 
     (vi) PLUS $_________ (vii)                             $_________

(d)   The ratio of (a) to (c)                               _____ to 1

      MAXIMUM [INSERT APPROPRIATE RATIO FROM
      SECTION 8.11(A) OF THE CREDIT AGREEMENT] during       ______ to 1
      [INSERT PERIOD FROM THE CREDIT AGREEMENT]


Section 8.11(c)
---------------

(a)   [Total Debt/Senior Debt] (as defined in the
      Credit Agreement) of the Borrower and its
      Subsidiaries as at the last day of the                $_________
      Calculation Period

(b)   Cash Flow of the Borrower and its Subsidiaries
      for the four quarters ended on or most recently
      ended prior to the last day of the Calculation
      Period (as determined in item (b) in
      Section 8.11(b) above):                               $_________
      

(c)   The ratio of (a) to (b)                               _____ to 1

      MAXIMUM [INSERT APPROPRIATE RATIO FROM
      SECTION 8.11(C) OF THE CREDIT AGREEMENT] during       ______ to 1
      [INSERT PERIOD FROM THE CREDIT AGREEMENT]


Section 8.12
------------

(a)   Cash Flow of the Borrower and its Subsidiaries for
      the four quarters ended on or most recently ended
      prior to the last day of the Calculation Period (as
      determined in item (b) in Section 8.11(b) above)     $_________
      
(b)   Total Debt Service of the Borrower and its
      Subsidiaries  for  the Calculation Period:
      

      (i)   Scheduled Payments and other regularly
            scheduled payments for the Calculation
            Period in respect of principal of               $__________
            Indebtedness which Indebtedness is
            included in Total Debt; PLUS
                                                            
      (ii)  cash Interest Expense;                          $__________

            Equals                                          $__________

(c)   Capital Expenditures made during such Calculation
      Period (other than Capital Expenditures made
      pursuant to Section 8.10(z))                          $__________

(d)   taxes (other than deferred taxes)                     $__________

The ratio of (a) to ((b) PLUS (c) PLUS (d))                 _____ to 1
                         ----     ----

MINIMUM permitted                                           1 TO 1
                                                            ------


Section 8.13
------------

(a)   Cash Flow of the Borrower and its Subsidiaries for
      the four quarters ended on or most recently ended
      prior to the last day of the Calculation Period (as
      determined in item (b) in Section 8.11(b) above)      $_________
      

(b)   cash Interest Expense of the Borrower and its
      Subsidiaries or the four quarters ended on or most
      recently ended prior to the last day of the
      Calculation Period                                    $_________

The Interest Coverage Ratio ((a) to (b))                     _____ to 1

MINIMUM permitted                                            2 TO 1
                                                             ------


Section 8.14
------------

The Working Capital of the Borrower and its Subsidiaries
as at the last day of the Calculation Period                $_________


MINIMUM permitted                                           $0.00

Section 8.20
------------

(a)   The aggregate face amount of accounts
      receivable sold by the Borrower and its
      Subsidiaries for less than the face value             $_________
      during the Calculation Period

(b)   Aggregate year to date (less applicable               $_________
      reserves)

MAXIMUM permitted for any fiscal year                       $500,000
                                                            --------


                                                                       EXHIBIT D


                       [Form of Assignment and Acceptance]

                            ASSIGNMENT AND ACCEPTANCE

            Reference is made to the Credit  Agreement dated as of July 15, 1998
(as  amended  and in effect on the date  hereof,  the "THE  CREDIT  Agreement"),
between  Journal  Register  Company,  the  Lenders  named  therein and The Chase
Manhattan Bank, as Agent for the Lenders.  Terms defined in the Credit Agreement
are used herein with the same meanings.

            The Assignor  named on the reverse  hereof hereby sells and assigns,
without recourse,  to the Assignee named on the reverse hereof, and the Assignee
hereby purchases and assumes, without recourse, from the Assignor,  effective as
of the Assignment Date set forth on the reverse hereof,  the interests set forth
on the reverse  hereof (the "ASSIGNED  Interest") in the  Assignor's  rights and
obligations under the Credit Agreement, including the interests set forth on the
reverse hereof in the  Commitment(s)  of the Assignor on the Assignment Date and
Loan(s) owing to the Assignor  which are  outstanding  on the  Assignment  Date,
together with unpaid  interest  accrued on the assigned  Loans to the Assignment
Date, the  participations  in Letters of Credit,  LC Disbursements and Swingline
Loans held by the Assignor on the Assignment  Date, and the amount,  if any, set
forth on the reverse hereof of the fees accrued to the  Assignment  Date for the
account of the Assignor.  The Assignee hereby acknowledges  receipt of a copy of
the the Credit  Agreement.  From and after the Assignment  Date (i) the Assignee
shall be a party to and be bound by the provisions of the Credit  Agreement and,
to the extent of the interests assigned by this Assignment and Acceptance,  have
the rights and  obligations of a Lender  thereunder and (ii) the Assignor shall,
to the extent of the  interests  assigned  by this  Assignment  and  Acceptance,
relinquish  its rights and be  released  from its  obligations  under the Credit
Agreement.

            This   Assignment   and   Acceptance  is  being   delivered  to  the
Administrative  Agent together with (i) if the Assignee is a Foreign Lender, any
documentation  required  to be  delivered  by the  Assignee  pursuant to Section
5.07(e) of the Credit  Agreement,  duly  completed and executed by the Assignee,
and (ii) if the Assignee is not already a Lender under the Credit Agreement,  an
Administrative  Questionnaire in the form supplied by the Agent,  duly completed
by the Assignee. The [Assignee/Assignor]  shall pay the fee payable to the Agent
pursuant to Section 11.06(b) of the the Credit Agreement.

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


<PAGE>

Date of Assignment:

Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:

Effective Date of Assignment
("ASSIGNMENT DATE")(1):
                                                        Percentage Assigned of
                                                        Facility/Commitment
                                                        (set forth, to at
                                                        least 8 decimals, as a
                                                        percentage of the
                                                        Facility and the
                                                        aggregate Commitments
                                Principal Amount        of all Lenders
Facility                        Assigned                thereunder
--------                        ----------------        -----------------------

Commitment Assigned:            $                                            %

   Revolving Credit Commitment:
   Incremental Loan Commitment:

Loans:

   Revolving Credit Loans:
   Tranche A Term Loans:
   Tranche B Term Loans:
   Incremental Loans:

Fees Assigned (if any):


The terms set forth above and on the reverse side hereof are hereby agreed to:

                                    [NAME OF ASSIGNOR], as Assignor
                                    -------------------


                                    By:_________________________
                                      Name:
                                      Title:


----------------------------
(1)  Must  be at  least  five  Business  Days  after  execution  hereof  by all
     required parties.

<PAGE>

                                    [NAME OF ASSIGNEE], as Assignee
                                    -------------------


                                    By:_________________________
                                      Name:
                                      Title:


<PAGE>



The undersigned hereby consent to the within assignment:(2)


JOURNAL REGISTER COMPANY


By:_________________________
   Name:
   Title:


THE CHASE MANHATTAN BANK,
  as Administrative Agent,
  as Swingline Lender
  and as Issuing Lender


By:_________________________
   Name:
   Title:









-------------------------
     
(2)   Consents to be included to the extent required by Section  11.06(b) of the
      Credit Agreement.


<PAGE>
                                                                     EXHIBIT E-1



                          [Form of Tranche A Term Note]

                               TRANCHE A TERM NOTE


$[____________]                                           [____________], 1998
                                                            New York, New York


            FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of  [_____________________]
(the "BANK"), for account of its respective  Applicable Lending Offices provided
for by the Credit  Agreement  referred to below, at the principal  office of The
Chase Manhattan Bank at 270 Park Avenue, New York, New York 10017, the principal
sum of  [_______________]  Dollars,  in  lawful  money of the  United  States of
America and in immediately  available funds, in the respective principal amounts
payable  on the  Principal  Payment  Dates,  and to pay  interest  on the unpaid
principal amount hereof, at such office, in like money and funds, for the period
commencing on the date hereof until such principal sum shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.

            The date,  amount,  Type,  interest  rate and  duration  of Interest
Period  (if  applicable)  of each  Tranche  A Term  Loan made by the Bank to the
Borrower  under the Credit  Agreement,  and the date such Term Loan is Converted
from a Loan of one Type  into a Loan of  another  Type,  and the  amount of each
payment or prepayment made on account of the principal of such Term Loan,  shall
be  recorded by the Bank on its books and,  prior to any  transfer of this Note,
endorsed  by the  Bank  on the  schedule  attached  hereto  or any  continuation
thereof,  PROVIDED that the failure of the Bank to make any such  recordation or
endorsement  shall not affect the  obligations of the Borrower to make a payment
when due of any amount owing under the Credit  Agreement or hereunder in respect
of the Tranche A Term Loans made by the Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
_________,  1998 (as at any time  amended or  otherwise  modified,  the  "CREDIT
AGREEMENT") between the Borrower, the lenders named therein (including the Bank)
and The Chase Manhattan  Bank, as Agent,  and evidences the Tranche A Term Loans
made by the  Bank  thereunder.  Capitalized  terms  used in this  Note  have the
respective meanings assigned to them in the Credit Agreement.

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

            Except as permitted by Section 11.06 of the Credit  Agreement,  this
Note may not be assigned by the Bank to any other Person.

            THIS NOTE SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE  WITH,
THE LAW OF THE STATE OF NEW YORK.

                                    JOURNAL REGISTER COMPANY


                                    By_________________________
                                      Name:
                                     Title:


<PAGE>




                               TRANCHE A TERM LOAN


            This Note  evidences  the  Tranche A Term Loans made,  Continued  or
Converted  under the  within-described  Credit  Agreement to the Borrower of the
Type,  bearing interest at the rates and having Interest Periods (if applicable)
of  the  duration  set  forth  below,  subject  to  the  payments,  prepayments,
Continuations and Conversions of principal set forth below:

                                                Amount
                                                 Paid,
  Date                             Duration     Prepaid,
Continued     Type                    of       Continued     Unpaid
   or          of     Interest     Interest       or        Principal   Notation
Converted     Loan     Rate         Period     Converted     Amount     Made By
---------     ----    --------     ---------   ---------    ---------   --------



<PAGE>

                                                                     EXHIBIT E-2


                          [Form of Tranche B Term Note]

                               TRANCHE B TERM NOTE


$[____________]                                           [____________], 1998
                                                            New York, New York


            FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of  [_____________________]
(the "BANK"), for account of its respective  Applicable Lending Offices provided
for by the Credit  Agreement  referred to below, at the principal  office of The
Chase Manhattan Bank at 270 Park Avenue, New York, New York 10017, the principal
sum of  [_______________]  Dollars,  in  lawful  money of the  United  States of
America and in immediately  available funds, in the respective principal amounts
payable  on the  Principal  Payment  Dates,  and to pay  interest  on the unpaid
principal amount hereof, at such office, in like money and funds, for the period
commencing on the date hereof until such principal sum shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.

            The date,  amount,  Type,  interest  rate and  duration  of Interest
Period  (if  applicable)  of the  Tranche  B Term  Loan  made by the Bank to the
Borrower  under the Credit  Agreement,  and the date such Term Loan is Converted
from a Loan of one Type  into a Loan of  another  Type,  and the  amount of each
payment or prepayment made on account of the principal of such Term Loan,  shall
be  recorded by the Bank on its books and,  prior to any  transfer of this Note,
endorsed  by the  Bank  on the  schedule  attached  hereto  or any  continuation
thereof,  PROVIDED that the failure of the Bank to make any such  recordation or
endorsement  shall not affect the  obligations of the Borrower to make a payment
when due of any amount owing under the Credit  Agreement or hereunder in respect
of the Tranche B Term Loans made by the Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
_________,  1998 (as at any time  amended or  otherwise  modified,  the  "CREDIT
AGREEMENT") between the Borrower, the lenders named therein (including the Bank)
and The Chase Manhattan  Bank, as Agent,  and evidences the Tranche B Term Loans
made by the  Bank  thereunder.  Capitalized  terms  used in this  Note  have the
respective meanings assigned to them in the Credit Agreement.

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

            Except as permitted by Section 11.06 of the Credit  Agreement,  this
Note may not be assigned by the Bank to any other Person.

            THIS NOTE SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE  WITH,
THE LAW OF THE STATE OF NEW YORK.

                                    JOURNAL REGISTER COMPANY


                                    By_________________________
                                      Name:
                                     Title:


<PAGE>

                               TRANCHE B TERM LOAN


            This Note  evidences  the  Tranche B Term Loans made,  Continued  or
Converted  under the  within-described  Credit  Agreement to the Borrower of the
Type,  bearing interest at the rates and having Interest Periods (if applicable)
of  the  duration  set  forth  below,  subject  to  the  payments,  prepayments,
Continuations and Conversions of principal set forth below:


                                                Amount
                                                 Paid,
  Date                             Duration     Prepaid,
Continued     Type                    of       Continued     Unpaid
   or          of     Interest     Interest       or        Principal   Notation
Converted     Loan     Rate         Period     Converted     Amount     Made By
---------     ----    --------     ---------   ---------    ---------   --------



<PAGE>



                                                                     EXHIBIT E-3

                         [Form of Revolving Credit Note]

                              REVOLVING CREDIT NOTE


$[____________]                                           [____________], 1998
                                                            New York, New York

            FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of  [_____________________]
(the "BANK"),  for account of its respective  Applicable Lending Office provided
for by the Credit  Agreement  referred to below, at the principal  office of The
Chase Manhattan Bank at 270 Park Avenue, New York, New York 10017, the principal
sum of  [_______________]  Dollars  (or such  lesser  amount as shall  equal the
aggregate unpaid principal amount of the Revolving Credit Loans made by the Bank
to the  Borrower  under the  Credit  Agreement),  in lawful  money of the United
States of America and in  immediately  available  funds on the Revolving  Credit
Commitment  Termination Date, and to pay interest on the unpaid principal amount
of each such Revolving Credit Loan, at such office, in like money and funds, for
the  period  commencing  on the date of such  Revolving  Credit  Loan until such
Revolving  Credit Loan shall be paid in full,  at the rates per annum and on the
dates provided in the Credit Agreement.

            The date,  amount,  Type,  interest  rate and  duration  of Interest
Period (if  applicable)  of each  Revolving  Credit Loan made by the Bank to the
Borrowers under the Credit Agreement, and the date such Revolving Credit Loan is
Converted from a Loan of one Type into a Loan of another Type, and the amount of
each payment or prepayment  made on account of the principal  thereof,  shall be
recorded  by the Bank on its books  and,  prior to any  transfer  of this  Note,
endorsed  by the  Bank  on the  schedule  attached  hereto  or any  continuation
thereof,  PROVIDED that the failure of the Bank to make any such  recordation or
endorsement  shall not affect the  obligations of the Borrower to make a payment
when due of any amount owing under the Credit  Agreement or hereunder in respect
of the Revolving Credit Loans made by the Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
_________,  1998 (as at any time  amended or  otherwise  modified,  the  "CREDIT
AGREEMENT") between the Borrower, the lenders named therein (including the Bank)
and The Chase Manhattan  Bank, as Agent,  and evidences  Revolving  Credit Loans
made by the  Bank  thereunder.  Capitalized  terms  used in this  Note  have the
respective meanings assigned to them in the Credit Agreement.

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

            Except as permitted by Section 11.06 of the Credit  Agreement,  this
Note may not be assigned by the Bank to any other Person.

            THIS NOTE SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE  WITH,
THE LAW OF THE STATE OF NEW YORK.

                                    JOURNAL REGISTER COMPANY


                                    By_________________________
                                      Name:
                                     Title:


<PAGE>




                       SCHEDULE OF REVOLVING CREDIT LOANS


            This Note  evidences  Revolving  Credit  Loans  made,  Continued  or
Converted under the  within-described  Credit Agreement to the Borrower,  on the
dates, in the principal amounts, of the Types, bearing interest at the rates and
having Interest Periods (if applicable) of the duration set forth below, subject
to the payments,  prepayments,  Continuations  and  Conversions of principal set
forth below:



                                                Amount
                                                 Paid,
  Date                             Duration     Prepaid,
Continued     Type                    of       Continued     Unpaid
   or          of     Interest     Interest       or        Principal   Notation
Converted     Loan     Rate         Period     Converted     Amount     Made By
---------     ----    --------     ---------   ---------    ---------   --------



<PAGE>

                                                                     EXHIBIT E-4
                           [Form of Incremental Note]

                                INCREMENTAL NOTE


$[____________]                                           [____________], 1998
                                                            New York, New York


            FOR VALUE RECEIVED, JOURNAL REGISTER COMPANY, a Delaware corporation
(the "BORROWER") hereby promises to pay to the order of  [_____________________]
(the "BANK"), for account of its respective  Applicable Lending Offices provided
for by the Credit  Agreement  referred to below, at the principal  office of The
Chase Manhattan Bank at 270 Park Avenue, New York, New York 10017, the principal
sum of  [_______________]  Dollars,  in  lawful  money of the  United  States of
America and in immediately  available funds, in the respective principal amounts
payable  on the  Principal  Payment  Dates,  and to pay  interest  on the unpaid
principal amount hereof, at such office, in like money and funds, for the period
commencing on the date hereof until such principal sum shall be paid in full, at
the rates per annum and on the dates provided in the Credit Agreement.

            The date,  amount,  Type,  interest  rate and  duration  of Interest
Period (if applicable) of each Incremental Loan made by the Bank to the Borrower
under the Credit Agreement, and the date such Incremental Loan is Converted from
a Loan of one Type into a Loan of another  Type,  and the amount of each payment
or prepayment made on account of the principal of such  Incremental  Loan, shall
be  recorded by the Bank on its books and,  prior to any  transfer of this Note,
endorsed  by the  Bank  on the  schedule  attached  hereto  or any  continuation
thereof,  PROVIDED that the failure of the Bank to make any such  recordation or
endorsement  shall not affect the  obligations of the Borrower to make a payment
when due of any amount owing under the Credit  Agreement or hereunder in respect
of the Incremental Loans made by the Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
_________,  1998 (as at any time  amended or  otherwise  modified,  the  "CREDIT
AGREEMENT") between the Borrower, the lenders named therein (including the Bank)
and The Chase Manhattan Bank, as Agent, and evidences the Incremental Loans made
by the Bank thereunder.  Capitalized terms used in this Note have the respective
meanings assigned to them in the Credit Agreement.

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

            Except as permitted by Section 11.06 of the Credit  Agreement,  this
Note may not be assigned by the Bank to any other Person.


<PAGE>




            THIS NOTE SHALL BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE  WITH,
THE LAW OF THE STATE OF NEW YORK.

                                    JOURNAL REGISTER COMPANY


                                    By_________________________
                                      Name:
                                     Title:


<PAGE>






                                INCREMENTAL LOAN


            This  Note  evidences  the  Incremental  Loan  made,   Continued  or
Converted  under the  within-described  Credit  Agreement to the Borrower of the
Type,  bearing interest at the rates and having Interest Periods (if applicable)
of  the  duration  set  forth  below,  subject  to  the  payments,  prepayments,
Continuations and Conversions of principal set forth below:



                                                Amount
                                                 Paid,
  Date                             Duration     Prepaid,
Continued     Type                    of       Continued     Unpaid
   or          of     Interest     Interest       or        Principal   Notation
Converted     Loan     Rate         Period     Converted     Amount     Made By
---------     ----    --------     ---------   ---------    ---------   --------


<PAGE>


                                                                       EXHIBIT F


                       INCREMENTAL LOAN ACTIVATION NOTICE


To:   The Chase Manhattan Bank,
      as Administrative Agent under the Credit Agreement
      referred to below

            Reference  is  hereby  made  to the  Credit  Agreement  dated  as of
_________,  1998 (as modified and  supplemented and in effect from time to time,
the "CREDIT  AGREEMENT")  among Sinclair  Broadcast Group,  Inc., the Subsidiary
Guarantors party thereto,  the Lenders party thereto,  The Chase Manhattan Bank,
as  Administrative  Agent for the Lenders and  NationsBank  of Texas,  N.A.,  as
Documentation  Agent.  Terms  defined in the Credit  Agreement  and not  defined
herein are used herein as defined therein.

            This notice is an Incremental Loan Activation  Notice referred to in
the Credit  Agreement,  and the  Borrower and the Lender  signatory  hereto (the
"INCREMENTAL LOAN LENDER") hereby notify you that:

            1.    The Incremental Loan Activation Date is ___________.

            2.    The Incremental Loan Commitment of the Incremental Loan Lender
                  is set forth  opposite the  Incremental  Loan Lender's name on
                  the signature pages hereof under the caption "Incremental Loan
                  Commitment".

            The  Incremental  Loan Lender and the Borrower hereby agree that (a)
the rate of  commitment  fee  payable by the  Borrower to the  Incremental  Loan
Lender under Section 2.04 of the Credit  Agreement on the daily  average  unused
amount of the Incremental  Loan Lender's  Incremental  Loan Commitment  shall be
______________  , (b)  the  Applicable  Rate  for  Incremental  Loans  shall  be
______________,  and (c) the Incremental Loan Commitment of the Incremental Loan
Lender shall terminate on ____________.


                                          JOURNAL REGISTER COMPANY


                                          By____________________________
                                             Name:
                                             Title:



INCREMENTAL LOAN COMMITMENT         [NAME OF INCREMENTAL LOAN LENDER]
$


                                          By____________________________
                                             Name:
                                             Title:












CONSENTED TO:

THE CHASE MANHATTAN BANK,
    as Administrative Agent


By_______________________
   Name:
   Title:



                                                                       EXHIBIT G


                       DESCRIPTION OF SUBORDINATION TERMS


         The payment of  principal  of,  premium,  if any,  and  interest on the
Subordinated Debt (the "NOTES") will be subordinated in right of payment, as set
forth in the applicable  indenture or other  agreement  governing the Notes (the
"INDENTURE"),  to the  prior  payment  in full in cash of all  Senior  Debt  (as
defined below),  whether  outstanding on the date of the Indenture or thereafter
incurred.

         Upon any  distribution  to creditors of Journal  Register  Company (the
"COMPANY") in a liquidation  or  dissolution  of the Company or in a bankruptcy,
reorganization,  insolvency, receivership or similar proceedings relating to the
Company or its property,  in an  assignment  for the benefit of creditors or any
marshalling of the Company's assets and liabilities,  the holders of Senior Debt
will be entitled to receive payment in full in cash of all amounts in respect of
Senior Debt (including  interest after the  commencement of any such proceedings
at the  rate  specified  in the  applicable  Senior  Debt  (whether  or not such
interest is allowed as a claim in such proceedings)) before the holders of Notes
will be entitled to receive any payment with respect to the Notes, and until all
amounts in respect of Senior Debt are paid in full in cash any  distribution  to
which the  holders of Notes  would be  entitled  shall be made to the holders of
Senior Debt (except  that holders of Notes may receive and retain (i)  Permitted
Junior  Securities  (as defined  below) and (ii)  payments on account of, and in
accordance  with the terms of, the Notes made from funds held in any  defeasance
trust permitted under the Indenture).

         The Company also may not make any direct or indirect payment upon or in
respect of Notes  (except in Permitted  Junior  Securities or from funds held in
any defeasance  trust as provided  above) if (i) a default in the payment of the
principal of, premium, if any, or interest on Designated Senior Debt (as defined
below) occurs and is  continuing,  whether at maturity,  on account of mandatory
redemption or prepayment,  acceleration or otherwise,  or (ii) any other default
occurs and is  continuing  with respect to  Designated  Senior Debt that permits
holders  of the  Designated  Senior  Debt as to which  such  default  relates to
accelerate  its  maturity  and the trustee or agent for the holders of the Notes
receives a written notice of such default (a "PAYMENT BLOCKAGE NOTICE") from the
holders of any  Designated  Senior Debt (or a  representative  on their behalf).
Payments  on the  Notes may and  shall be  resumed  (a) in the case of a payment
default,  upon the date on which such default is cured or waived and (b) in case
of a nonpayment  default,  upon the earlier of the date on which such nonpayment
default  is cured or waived or 179 days  after the date on which the  applicable
Payment  Blockage Notice is so received,  unless any of the events  described in
clause (i) of the first  sentence of this  paragraph  has then  occurred  and is
continuing.  No new period of payment blockage may be commenced unless and until
360 days have elapsed  since the date of  commencement  of the payment  blockage
period  resulting  from  the  immediately  prior  Payment  Blockage  Notice.  No
nonpayment  default that existed or was  continuing on the date of delivery of a
Payment  Blockage  Notice with respect to the Designated  Senior Debt initiating
such blockage (to the extent that the holders of such Designated Senior Debt, or
a trustee or agent,  giving such Payment  Blockage  Notice had knowledge of such
existing or continuing default) shall be, or be made, the basis for a subsequent
Payment  Blockage Notice unless such default shall have been waived for a period
of not less than 90 consecutive days.

         If a distribution  or payment is made to holders of the Notes that, due
to the subordination provisions, should not have been made to them, such holders
will be required to hold such  distribution  or payment in trust for the holders
of Senior Debt and pay it over to them (pursuant to such written instructions as
the holders of Senior Debt or a  representative  on their  behalf may provide to
such holders of the Notes) as their interests may appear.

         The  failure  to make a payment  pursuant  to the Notes  because of the
restrictions  under the subordination  provisions  described herein shall not be
construed  as  preventing  the  occurrence  of an event  of  default  under  the
Indenture  and such  restrictions  shall not have any effect on the right of the
holders of the Notes to accelerate the Notes.

         The Indenture will require that the Company  promptly notify holders of
Senior Debt if payment of the Notes is accelerated.


Certain Definitions
-------------------

         "CREDIT  FACILITIES"  means,  with respect to the Company,  one or more
debt facilities (including,  without limitation,  the Senior Credit Facility) or
commercial paper facility with banks or other  institutional  lenders  providing
for revolving credit loans, other borrowings (including term loans), receivables
financing  (including  through  the sale of  receivables  to such  lenders or to
special  purpose  entities  formed to  borrow  from such  lenders  against  such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed,  refunded,  increased,  replaced or refinanced in whole or in part from
time to time.

         "DESIGNATED  SENIOR DEBT" means (i) any Indebtedness  outstanding under
or in respect of the  Senior  Credit  Facility  and (ii) any other  Senior  Debt
which,  at  the  time  of  determination,  has  an  aggregate  principal  amount
outstanding,  together with any  commitments to lend additional  amounts,  of at
least  $25.0  million,  if the  instrument  governing  such  other  Senior  Debt
expressly  provides  that it is  "Designated  Senior  Debt" for  purposes of the
Indenture.

         "OBLIGATIONS" means any principal, premium, if any, interest (including
interest  accruing on or after the filing of any petition in  bankruptcy  or for
reorganization  relating to the Company  whether or not a claim for  post-filing
interest is allowed in such proceeding),  penalties,  fees,  charges,  expenses,
indemnifications,  reimbursement  obligations,  damages,  guarantees  and  other
liabilities   or  amounts   payable  under  the   documentation   governing  any
Indebtedness (to be customarily defined in the Indenture) or in respect thereof.

         "PERMITTED  JUNIOR  SECURITIES"  means any securities of the Company or
any other Person that are (i) equity interests without special covenants or (ii)
debt  securities  expressly  subordinated in right of payment to all Senior Debt
(and any debt  securities  issued in exchange for Senior Debt) to  substantially
the same extent as, or to a greater extent than, the Notes are  subordinated  to
Senior Debt pursuant to the Indenture, in any event pursuant to a court order so
providing and as to which (a) the rate of interest on such securities  shall not
exceed the effective rate of interest on the Notes on the date of the Indenture,
(b) such  securities  shall not be entitled  to the  benefits  of  covenants  or
defaults materially more beneficial to the holders of such securities than those
in effect with  respect to the Notes on the date of the  Indenture  and (c) such
securities  shall not  provide  for  amortization  (including  sinking  fund and
mandatory prepayment  provisions) commencing prior to the date 91 days following
the final scheduled maturity date of the Senior Debt (as modified by the plan of
reorganization or readjustment pursuant to which such securities are issued).

         "SENIOR CREDIT FACILITY" means that certain Credit Agreement,  dated as
of [_____], 1998 between Journal Register Company,  various lending institutions
and The Chase Manhattan Bank as Administrative Agent thereunder providing for up
to $900  million of  Indebtedness,  including  any  related  notes,  guarantees,
collateral   documents,   instruments  and  agreements  executed  in  connection
therewith, and in each case as amended, restated,  modified,  renewed, extended,
refunded,  increased,  replaced or  refinanced  in whole or in part from time to
time and any agreement (and related documents)  providing  therefor  (including,
without limitation,  any agreement in respect of any successor credit facility),
whether by the same or any other lender,  creditor, group of lenders or group of
creditors.

         "SENIOR DEBT" means (i) all  Obligations  owed by the Company under, or
with respect to, the Senior Credit Facility or any other Credit  Facility,  (ii)
any other  Indebtedness  (such term to be customarily  defined in the Indenture)
permitted  under the terms of the Indenture,  unless the instrument  under which
such  Indebtedness is incurred  expressly  provides that it is in parity with or
subordinated  in right of  payment to the Notes,  (iii) all  obligations  of the
Company    under   or   in   respect   of    interest    rate    swaps,    caps,
shapeType1fFlipH0fFlipV0lineColor16777215fPreferRelativeResize0collars,  options
and similar arrangements and foreign currency hedges and (iv) all modifications,
renewals,  extensions,  replacements,  refinancings and refundings of any of the
foregoing, unless, in the instrument creating or evidencing the same or pursuant
to  which  the  same  is  outstanding,   it  is  expressly  provided  that  such
indebtedness,   obligations  or  guarantees,   as  the  case  may  be,  or  such
modifications,  renewals, extensions,  replacements,  refinancings or refundings
thereof,  are  not  senior  or  superior  in  right  of  payment  to the  Notes.
Notwithstanding anything to the contrary in the foregoing sentence,  Senior Debt
will  not  include  any  of  the  following,  to the  extent  it may  constitute
Indebtedness:  (a) any obligation of the Company to any of its  subsidiaries  or
affiliates  or any of  such  affiliate's  subsidiaries;  (b) any  liability  for
federal,  state,  local or other taxes owed or owing by the Company  (other than
such taxes owed or owing to the lenders under the Senior Credit  Facility);  (c)
any  accounts  payable  or other  liability  to trade  creditors  arising in the
ordinary  course of business (or guarantees  thereof or  instruments  evidencing
such liabilities); (d) any Indebtedness,  guarantee or obligation of the Company
(including,  without  limitation,  the Notes) which is expressly  subordinate or
junior by its terms in right of payment to any other Indebtedness,  guarantee or
obligation  of the  Company;  (e) that portion of any  Indebtedness  incurred in
violation of the debt  covenant  under the  Indenture  (other than  Indebtedness
under (i) the Senior Credit  Facility or (ii) any other Credit  Facility that is
incurred  on the basis of a  representation  by the  Company  to the  applicable
lenders that it is permitted to incur such Indebtedness under the Indenture); or
(f) any obligations in respect of capital stock of the Company.