[CONFORMED COPY]















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                            JOURNAL REGISTER COMPANY


                                    ---------



                                CREDIT AGREEMENT



                             Dated as of May 2, 1997



                                    ---------



                            THE CHASE MANHATTAN BANK,
                                    as Agent

                              THE BANK OF NEW YORK,
                                   CIBC, INC.,
                             FLEET NATIONAL BANK and
                          KEYBANK NATIONAL ASSOCIATION,
                               as Managing Agents



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<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........................................................ 31
     1.03  Classes and Types of Loans........................................ 32

Section 2.  Commitments...................................................... 33
     2.01  Loans............................................................. 33
     2.02  Borrowings........................................................ 38
     2.03  Changes of Commitments............................................ 38
     2.04  Commitment Fees................................................... 39
     2.05  Lending Offices................................................... 40
     2.06  Several Obligations; Remedies Independent......................... 40
     2.07  Evidence of Debt.................................................. 41
     2.08  Conversion or Continuation of Loans; Optional
              Prepayments.................................................... 41
     2.09  Mandatory Prepayments............................................. 44

Section 3.  Payments of Principal and Interest............................... 47
     3.01  Repayment of Loans................................................ 47
     3.02  Interest.......................................................... 50

Section 4.  Payments; Pro Rata Treatment; Computations;
              Etc............................................................ 51
     4.01  Payments.......................................................... 51
     4.02  Pro Rata Treatment................................................ 52
     4.03  Computations...................................................... 53
     4.04  Minimum Amounts................................................... 53
     4.05  Certain Notices................................................... 53
     4.06  Non-Receipt of Funds by the Agent................................. 54
     4.07  Sharing of Payments, Etc.......................................... 55

Section 5.  Yield Protection and Illegality.................................. 57
     5.01  Additional Costs.................................................. 57
     5.02  Limitation on Types of Loans...................................... 60
     5.03  Illegality........................................................ 61
     5.04  Treatment of Affected Loans....................................... 61
     5.05  Compensation...................................................... 62

Section 6.  Conditions Precedent............................................. 63
     6.01  Effectiveness..................................................... 63
     6.02  Initial and Subsequent Loans...................................... 65


                                       (i)

<PAGE>


                                                                            PAGE
Section 7.  Representations and Warranties................................... 67
     7.01  Corporate Existence............................................... 67
     7.02  Financial Condition............................................... 67
     7.03  Litigation.......................... ............................. 67
     7.04  No Breach......................................................... 68
     7.05  Corporate Action.................................................. 68
     7.06  Approvals......................................................... 68
     7.07  Margin Stock...................................................... 69
     7.08  ERISA............................................................. 69
     7.09  Taxes............................................................. 69
     7.10  Investment Company Act............................................ 69
     7.11  Public Utility Holding Company Act................................ 70
     7.12  Compliance with Laws.............................................. 70
     7.13  Disclosure........................................................ 70
     7.14  Security Documents................................................ 70
     7.15  Assets of the Borrower............................................ 71
     7.16  Material Agreements............................................... 71
     7.17  Solvency.......................................................... 71
     7.18  Labor Matters..................................................... 72
     7.19  Hazardous Materials............................................... 72
     7.20  Subsidiaries, Etc................................................. 75
     7.21  Copyrights, Permits and Trademarks................................ 75
     7.22  Mortgage Properties............................................... 76
     7.23  NOLs; Etc......................................................... 76
     7.24  Capitalization.................................................... 76

Section 8.  Covenants of the Borrower.  ..................................... 77
     8.01  Financial Statements; Continuing Disclosure....................... 77
     8.02  Litigation........................................................ 81
     8.03  Corporate Existence, Etc.......................................... 81
     8.04  Insurance......................................................... 82
     8.05  Prohibition of Fundamental Changes................................ 83
     8.06  Limitation on Liens............................................... 86
     8.07  Indebtedness...................................................... 88
     8.08  Investments....................................................... 90
     8.09  Restricted Payments............................................... 90
     8.10  Capital Expenditures.............................................. 91
     8.11  Total Debt Ratio.................................................. 92
     8.12  Fixed Charges Ratio............................................... 92
     8.13  Interest Coverage Ratio........................................... 92
     8.14  Working Capital................................................... 93
     8.15  Lines of Business................................................. 93
     8.16  Transactions with Affiliates............... ...................... 93
     8.17  Sale and Leaseback................................................ 93
     8.18  Amendment of Certain Documents.................................... 94
     8.19  Use of Proceeds................................................... 94
     8.20  Sales of Accounts................................................. 94
     8.21  Interest Rate Protection.......................................... 94
     8.22  Mortgages......................................................... 95
     8.23  Environmental Matters............................................. 97
     8.25  Certain Obligations Respecting Subsidiaries....................... 98

                                      (ii)

<PAGE>



     8.26  Inactive Subsidiaries............................................. 99

Section 9.  Events of Default................................................ 99

Section 10.  The Agent.......................................................104
     10.01  Appointment, Powers and Immunities...............................104
     10.02  Reliance by Agent................................................105
     10.03  Defaults.........................................................105
     10.04  Rights as a Bank.................................................105
     10.05  Indemnification..................................................106
     10.06  Non-Reliance on Agent and Other Banks............................106
     10.07  Failure to Act...................................................107
     10.08  Resignation or Removal of Agent..................................107
     10.09  Consents under Other Credit Documents............................108

Section 11.  Miscellaneous...................................................108
     11.01  Waiver...........................................................108
     11.02  Notices..........................................................109
     11.03  Expenses, Etc....................................................109
     11.04  Amendments, Etc..................................................111
     11.05  Successors and Assigns...........................................111
     11.06  Assignments and Participations...................................112
     11.07  Survival.........................................................114
     11.08  Captions.........................................................114
     11.09  Counterparts.....................................................114
     11.10  Governing Law; Submission to Jurisdiction........................114
     11.11  Waiver of Jury Trial.............................................115
     11.12  Confidentiality..................................................115

Annex 1             -   Commitments and Loans
Annex 2             -   Cash Flow Adjustments
Annex 3             -   NEN 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


EXHIBIT A           -   Form of Borrower Security Agreement
EXHIBIT B-1         -   Form of Amendment No. 1 to JCI/JNI Security Agreement
EXHIBIT B-2         -   Form of Amendment No. 1 to Subsidiary Guarantee
EXHIBIT C           -   Form of Compliance Certificate
EXHIBIT D           -   Form of Confidentiality Agreement


                                      (iii)

<PAGE>



EXHIBIT E-1         -  Form of Term Note
EXHIBIT E-2         -  Form of Revolving Credit Note
EXHIBIT E-3         -  Form of NEN Acquisition Note
EXHIBIT E-4         -  Form of New Britain Acquisition Note
EXHIBIT E-5         -  Form of PAD Note


                                      (iv)

<PAGE>



                  CREDIT  AGREEMENT  dated as of May 2,  1997  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
11.06(b) hereof,  shall become a "Bank" hereunder  (individually,  a "BANK" and,
collectively, the "BANKS"); and THE CHASE MANHATTAN BANK, as agent for the Banks
(in such capacity, together with its successors in such capacity, the "AGENT").

                  Journal News, Inc. and Journal  Company,  Inc.  (collectively,
the  "EXISTING  BORROWERS"),  in each case a wholly owned  subsidiary of Journal
Register Company, LLC ("JOURNAL REGISTER LLC"), a limited liability company duly
organized  and  validly  existing  under the laws of the State of New York,  are
borrowers  under an Amendment and  Restatement  dated as of December 17, 1996 of
Credit  Agreement  dated as of December 21, 1994 (the "1994  CREDIT  AGREEMENT")
with the 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,  Journal Register LLC is merging with and
into the Borrower,  with the Borrower being the surviving entity of such merger.
Effective on the  Effective  Date (as defined  below),  the  Borrower  wishes to
become a party to the Existing Credit Agreement as borrower and to assume all of
the  obligations of the Existing  Borrowers  under or in respect of the Existing
Credit  Agreement,  and in that  connection  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 Banks 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 that
connection, the Borrower has requested that the Banks make loans to the Borrower
(to be made  available  by the  Borrower to its  subsidiaries)  in an  aggregate
principal amount up to but not exceeding  $632,995,000 to provide  financing for
general corporate  purposes,  permitted  acquisitions of newspaper companies and
working capital 




                                CREDIT AGREEMENT

<PAGE>


                                      - 2 -



for the ongoing  operations of the Borrower and its subsidiaries.  The Banks are
willing to make such loans to the Borrower on the terms and  conditions  of this
Agreement.

                  Accordingly, the parties hereto hereby agree that the Existing
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 the Borrower and its
Subsidiaries,  any other Person which  directly or  indirectly  controls,  or is
under common  control with, or is controlled by, the Borrower 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




                                CREDIT AGREEMENT

<PAGE>


                                      - 3 -



securities  or  partnership  or  other  ownership  interests,   by  contract  or
otherwise),  PROVIDED  that,  in any event,  any Person  which owns  directly or
indirectly 5% or more of the  securities  having  ordinary  voting power for the
election of directors or other  governing body of a corporation or 5% 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,  (b) none of the  Borrower or any of its  Subsidiaries
shall be an Affiliate.

                  "AMENDMENT NO. 1 EFFECTIVE DATE" shall mean the effective date
of Amendment No. 1 dated as of May 5, 1995 to the 1994 Credit Agreement.

                  "AMENDMENT NO. 2 EFFECTIVE DATE" shall mean the effective date
of Amendment No. 2 dated as of June 20, 1995 to the 1994 Credit Agreement.

                  "APPLICABLE  LENDING OFFICE" shall mean, for each Bank and for
each Type of Loan, the "Lending Office" of such Bank (or of an affiliate of such
Bank)  designated  for  such  Type of Loan in the  Administrative  Questionnaire
submitted  by such Bank or such other office of such Bank (or of an affiliate of
such  Bank) as such  Bank 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:

                  (a) with  respect to Base Rate Loans,  0.25% at all times when
         the Total Debt  Ratio is greater  than or equal to 5.0 to 1 and 0.0% at
         all times when the Total Debt Ratio is less than 5.0 to 1; and

                  (b) with respect to Eurodollar Loans,  1.50% at all times when
         the Total Debt Ratio is greater than or equal to 5.0 to 1, 1.25% at all
         times when the Total  Debt  Ratio is greater  than or equal to 4.5 to 1
         but less than 5.0 to 1, 1.00% at all times when the Total Debt Ratio is
         greater  than or equal to 4.0 to 1 but less than 4.5 to 1, 0.75% at all
         times when the Total  Debt  Ratio is greater  than or equal to 3.5 to 1
         but less than 4.0 to 1,  0.625% at all times  when the Total Debt Ratio
         is  greater  than or equal to 3.0 to 1 but less than 3.5 to 1 and 0.50%
         at all times when the Total Debt Ratio is less than 3.0 to 1.




                                CREDIT AGREEMENT

<PAGE>


                                      - 4 -




For purposes of this  definition,  the Total Debt Ratio shall be determined  (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  pursuant to either  Section
8.01(a) or 8.01(b) hereof on the basis of the Total Debt Ratio  determined as of
the  Effective  Date on a pro forma basis  (after  giving  effect to the initial
public offering of the Borrower,  the application of the proceeds  thereof,  the
payment  in full of the  Warburg  Subordinated  Debt,  the  making  of the Loans
hereunder and the other  transactions  contemplated  to occur on or prior to the
Effective Date) and certified by a Senior Officer in the  certificate  delivered
pursuant to Section  6.01(g) hereof and (ii) for any day thereafter on the basis
of the then  most  recent  consolidated  financial  statements  of the  Borrower
delivered to the Agent pursuant to said Section  8.01(a) or 8.01(b).  Any change
in the Applicable  Margins as a result of a change in the Total Debt 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 Sections 8.01(a) or 8.01(b),  the Applicable  Margins shall be deemed to
be equal to the highest  Applicable  Margins  provided for in this Agreement 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  in
accordance  with paragraphs (a) and (b) above on and as of any Borrowing Date if
(i) a borrowing of  Revolving  Credit  Loans  occurs on such  Borrowing  Date in
excess of $10,000,000 in aggregate principal amount (unless the proceeds of such
borrowing are to be, and are in fact,  used to make repayments of Term Loans, in
which case no such adjustment to the Applicable  Margins shall be so required to
be made on such Borrowing  Date) and (ii) such borrowing  results in a change in
the Total Debt Ratio as of such  Borrowing  Date that would in turn  result in a
change in the  Applicable  Margins as reflected in the  certificate  of a Senior
Officer  delivered  to the Agent in  accordance  with and as required by Section
6.02(b)  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 TITLE REPORTS"  shall  mean,  collectively, (a)  the
Approved Title Reports referred to in Section 6.01(q)  of  the




                                CREDIT AGREEMENT

<PAGE>


                                      - 5 -



Existing Credit Agreement, (b) the NEN Title Reports after having been marked by
the  Borrowers'  counsel and  approved by the Agent and showing only those title
exceptions which are acceptable to the Agent as of the Amendment No. 1 Effective
Date,  (c) the New  Britain  Title  Reports  after  having  been  marked  by the
Borrowers'  counsel  and  approved  by the Agent and  showing  only those  title
exceptions which are acceptable to the Agent as of the Amendment No. 2 Effective
Date and (d) with respect to any Mortgage Property Acquired by any Obligor after
the Amendment No. 2 Effective  Date if such  Acquisition is financed in whole or
in part with the proceeds of PAD Loans hereunder or Permitted Additional Debt as
permitted by Section 8.07(e) hereof, title reports prepared by the Title Insurer
for the benefit of the Agent covering such Mortgage  Property  updated to within
30 days prior to the date such PAD Loans are made or such  Permitted  Additional
Debt is  incurred,  in each case,  after  having been  marked by the  Borrowers'
counsel and approved by the Agent and showing only those title  exceptions which
are  acceptable  to the  Agent as of the date  such PAD  Loans  are made or such
Permitted Additional Debt is incurred.

                  "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




                                CREDIT AGREEMENT

<PAGE>


                                      - 6 -



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" shall not include (a) capitalized interest to the extent otherwise
included in "Capital  Expenditures"  as required by GAAP or (b) at the option of
the Borrower  (which  option shall be (i)  irrevocable  and (ii) notified 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.

                  "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 Bank 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 Rating Agency Incorporated or




                                CREDIT AGREEMENT

<PAGE>


                                      - 7 -



         Moody's Investors Service, Inc.,  respectively,  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) repurchase  agreements and 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  such
         agreements  are  entered  into on terms  and  conditions  substantially
         similar  to the  terms and  conditions  set forth in the form of Master
         Repurchase Agreement  promulgated by the Public Securities  Association
         with a "Buyer's  Margin Amount" (as defined  therein) at least equal to
         100%).

                  "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 after
October 1, 1995 but on or before June 30, 1997, Cash Flow shall be determined on
a pro forma basis for such period as if the Taunton Acquisition  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 an amount equal to the amount
specified  for the relevant  calendar  month in Annex 2 hereto,  (b) except with
respect to the Taunton  Acquisition,  if the Borrower or any of its Subsidiaries
shall  have  Acquired  or  Disposed  of one or more  Newspapers  or MVO 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  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  Banks (or,  if the  Borrower  and the
Majority  Banks shall fail to agree as to any such  amount  within 30 days after
the consummation of such Acquisition or Disposition,  as the case may be, by the
actual amount of the cash flow  attributable  to such Newspapers or MVO or other
business),  (c) there shall be excluded from the  calculation of Cash Flow which
includes any period during the fiscal year ended December 31, 1996, (i) reserves
of up to  $2,500,000 for additional litigation and receivables reserves and (ii)




                                CREDIT AGREEMENT

<PAGE>


                                      - 8 -



capitalized  expenses  in  respect  of  the  Borrower's  and  its  Subsidiaries'
development and implementation of their on-line services of up to $750,000,  (d)
there shall be excluded  from the  calculation  of Cash Flow which  includes any
period during the fiscal year ending December 31, 1997  capitalized  expenses in
respect of the Borrower's and its Subsidiaries'  development and  implementation
of their on-line services of up to $500,000 and (e) there shall be excluded from
the  calculation  of Cash Flow  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.

                  "COMMITMENTS" shall mean, collectively,  the  Revolving Credit
Commitments and the PAD Commitments.

                  "COMMITMENT  PERCENTAGE"  shall  mean (a) with  respect to any
Revolving  Credit  Bank,  the ratio of (i) the  amount of the  Revolving  Credit
Commitment  of such Bank TO (ii) the aggregate  amount of the  Revolving  Credit
Commitments  of all of the Revolving  Credit Banks (or, if the Revolving  Credit
Commitments  have  expired  or  terminated,  the  ratio  of  (i)  the  aggregate
outstanding  principal  amount of the Revolving Credit Loan(s) held by such Bank
TO (ii) the aggregate outstanding principal amount of the Revolving Credit Loans
held by all of the Revolving  Credit  Banks);  (b) with respect to any Term Loan
Bank, the ratio of (i) the aggregate  outstanding  principal  amount of the Term
Loan(s) held by such Bank TO (ii) the aggregate  outstanding principal amount of
the Term Loans held by all of the Term Loan Banks;  and (c) with respect to each
Series of PAD Loans and each Bank  holding PAD Loans of any Series of PAD Loans,
the ratio of (i) the amount of the PAD Commitment of such Series of such Bank TO
(ii) the aggregate amount of the PAD Commitments of such Series




                                CREDIT AGREEMENT

<PAGE>


                                      - 9 -



of all of the Banks  holding PAD Loans of such Series (or, if the such Series of
PAD  Commitments  have  expired or  terminated,  the ratio of (i) the  aggregate
outstanding principal amount of the PAD Loan(s) of such Series held by such Bank
TO (ii) the  aggregate  outstanding  principal  amount  of the PAD Loans of such
Series held by all of the Banks).

                  "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 Bank  (at its sole  discretion)  of a Loan  from  one  Applicable
Lending Office to
another.

                  "CREDIT DOCUMENTS" shall mean,  collectively,  this Agreement,
the Notes, 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.





                                CREDIT AGREEMENT

<PAGE>


                                     - 10 -



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

                  "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  ISSUANCE"  shall mean (a) the  issuance or sale after
the Effective Date by the Borrower or any of its  Subsidiaries  to any Person or
Persons of (i) any capital  stock,  (ii) any warrants or options  exercisable in
respect of any capital  stock (other than (x) any warrants or options  issued to
directors, officers, employees or consultants of the  Borrower  or




                                CREDIT AGREEMENT

<PAGE>


                                     - 11 -



any of its Subsidiaries  pursuant to employee  benefit plans  established in the
ordinary  course of business  and (y) any capital  stock of the Borrower or such
Subsidiary  issued upon the  exercise of such  warrants or options) or (iii) any
other security or instrument  representing  an equity  interest (or the right to
obtain  any equity  interest)  in the  Borrower  or such  Subsidiary  or (b) the
receipt by the Borrower or any of its  Subsidiaries  after the Effective Date of
any capital contribution (whether or not evidenced by any equity security issued
by the recipient of such contribution);  PROVIDED that Equity Issuance shall not
include (w) any such  issuance or sale by any  Subsidiary of the Borrower to the
Borrower or any other Subsidiary of the Borrower,  (x) any capital  contribution
by the  Borrower  or any of its  Subsidiaries  to any other  Subsidiary  of such
Person,  (y) any such issuance or sale pursuant to the Management  Bonus Plan or
Stock  Incentive  Plan  or  (z)  any  such  issuance  or  sale  relating  to the
acquisition  by the  Borrower  of all of the  capital  stock or other  ownership
interests of INS from Warburg and/or Warburg Affiliates.

                  "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 arithmetic mean (rounded
upwards, if necessary,  to the nearest 1/100 of 1%), as determined by the Agent,
of the rates per annum quoted by the respective Reference Banks at approximately
11:00 a.m.  London time (or as soon  thereafter as  practicable) on the date two
Business Days prior to the first day of such Interest Period for the offering by
the respective Reference Banks to leading banks




                                CREDIT AGREEMENT

<PAGE>


                                     - 12 -



in the London  interbank  market of Dollar  deposits having a term comparable to
such Interest Period and in an amount  comparable to the principal amount of the
Eurodollar Loans to be made by the respective  Reference Banks for such Interest
Period. If any Reference Bank is not participating in any Eurodollar Loan during
any Interest Period  therefor,  such Reference Bank shall quote a rate per annum
for such Loan for such  Interest  Period  by  reference  to an  amount  equal to
$5,000,000.  If any Reference Bank does not timely furnish such  information for
determination  of any  Eurodollar  Base Rate,  the Agent  shall  determine  such
Eurodollar  Base  Rate on the  basis  of  information  timely  furnished  by the
remaining Reference Banks.

                  "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
(other  than any such  prepayments  made  pursuant to Section  2.08(d)  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  (other than any such  prepayments  made pursuant to Section
2.09(d) 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 as permitted by Section
8.05(b)(iv)  hereof  (except  to the  extent  made  with the  proceeds  of Loans
hereunder  or the proceeds of Permitted  Additional  Debt) PLUS (vi)  Restricted
Payments  made as  permitted  by Section  8.09(c) 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 13 -



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.

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

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

                  "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 12 complete consecutive months ended on, or most
recently ended prior to, such date TO (b) Total Fixed Charges for such period.

                  "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.

                  "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




                                CREDIT AGREEMENT

<PAGE>


                                     - 14 -



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  ("PCBS"),  (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.

                  "INACTIVE SUBSIDIARIES" shall mean,  collectively,  Chanry and
its Subsidiaries,  The Hartford Times, Inc., Community Offset, Inc., Central New
Jersey Publishing Company, All Home Distribution,  Inc., Asheboro  Publications,
Inc.,  Orange Coast  Publishing  Company and The Tribune  Publishing  Company of
Royal Oak, Michigan.

                  "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, with respect to the Borrower or any of its Subsidiaries,
there shall be excluded from Indebtedness of the Borrower or of its Subsidiaries
any of the foregoing obligations




                                CREDIT AGREEMENT

<PAGE>


                                     - 15 -



of the Borrower or its  Subsidiaries  described in clauses (a) through (f) above
to the Borrower or any of its Subsidiaries.

                  "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 twelve complete  consecutive months 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
(other than Warburg  Subordinated  Debt) 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 Banks  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 or sixth 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 may commence  before and end after any Principal  Payment Date unless,
after giving effect thereto, the aggregate




                                CREDIT AGREEMENT

<PAGE>


                                     - 16 -



principal  amount of the Term Loans 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 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 PAD Loan of any Series may commence before and end after
any  Principal  Payment Date for PAD Loans of such Series  unless,  after giving
effect thereto,  the aggregate  principal amount of the PAD 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 PAD 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, in the case of an Interest Period for
Eurodollar  Loans,  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"  shall mean an interest
rate swap, cap or collar agreement or similar arrangement between any Person and
a financial  institution  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




                                CREDIT AGREEMENT

<PAGE>


                                     - 17 -



to be advanced, lent or extended to such Person; or (d) the entering into of any
Interest Rate Protection Agreement.

                  "JCI" shall mean Journal  Company,  Inc., a  corporation  duly
organized and validly existing under the laws of the State of Delaware.

                  "JCI/JNI SECURITY AGREEMENT" shall mean the Security Agreement
dated as of December 21, 1994 between the  Subsidiary  Guarantors and the Agent,
as the same shall be amended,  supplemented or otherwise  modified and in effect
from time to time.

                  "JNI"  shall mean  Journal  News,  Inc.,  a  corporation  duly
organized and validly existing under the laws of the State of Delaware.

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

                  "LENDER"  shall mean, at any time, (a) each Bank party to this
Agreement at such time and (b) any other  Person  holding  Permitted  Additional
Debt at such time if such other Person was a Bank party to this Agreement at the
time it provided such Permitted Additional Debt.

                  "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, Term Loans and
PAD Loans.

                  "MAJORITY BANKS" shall  mean  Majority  Revolving Credit Banks
and Majority Term Loan Banks.

                  "MAJORITY  REVOLVING CREDIT BANKS" shall mean Revolving Credit
Banks having at least 60% of the sum of (a) the  aggregate  unused amount of the
Revolving  Credit  Commitments  at such time PLUS (b) the aggregate  outstanding
principal amount of the Revolving Credit Loans at such time or, if the Revolving
Credit Commitments have terminated, Revolving Credit Banks holding at




                                CREDIT AGREEMENT

<PAGE>


                                     - 18 -



least 60% of the aggregate  outstanding principal amount of the Revolving Credit
Loans.

                  "MAJORITY  TERM LOAN BANKS"  shall mean Banks  having at least
60% of the sum of (a) the  aggregate  outstanding  principal  amount of the Term
Loans at such time PLUS (b) the aggregate  outstanding  principal  amount of the
PAD Loans at such time PLUS (c) if any PAD Commitments  are then in effect,  the
aggregate unused amount of the PAD Commitments at such time.

                  "MANAGEMENT BONUS PLAN" shall mean the Borrower's  "Management
Bonus Plan" pursuant to which the Borrower will pay management bonuses totalling
approximately $32,000,000, 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 Banks 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.

                  "MORTGAGE NOTICE" shall have the meaning given to such term in
Section 8.22 hereof.

                  "MORTGAGE PROPERTIES" shall mean, collectively, the properties
identified  in  Exhibit  D-1 to the  1994  Credit  Agreement,  the NEN  Mortgage
Properties, the New Britain Mortgage Properties and any additional real property
Acquired by any Obligor after the  Amendment  No. 2 Effective  Date if such real
property  is  financed  in  whole  or in part  with the  proceeds  of PAD  Loans
hereunder or Permitted  Additional Debt incurred as permitted by Section 8.07(e)
hereof,  PROVIDED that from and after the date of the  Disposition of any of the
foregoing  properties,  there shall be excluded  from  Mortgage  Properties  the
properties so Disposed of.





                                CREDIT AGREEMENT

<PAGE>


                                     - 19 -



                  "MORTGAGES"  shall mean  mortgages  or deeds of trust,  as the
case may be, if any, to be granted by the  Mortgagors to the Agent,  pursuant to
Section  8.22 hereof  substantially  in the form of Exhibit D to the 1994 Credit
Agreement  (with such  changes  thereto as the Agent shall  reasonably  request)
covering the Mortgage Properties.

                  "MORTGAGORS" shall mean each of the Subsidiary Guarantors, and
each other  Subsidiary of the Borrower that is required to execute and deliver a
Mortgage pursuant to the terms of this Agreement.

                  "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.

                  "MVO" shall mean  Mississippi  Valley  Offset  Company Inc., a
Missouri corporation that is a Subsidiary of JNI and a Subsidiary Guarantor.

                  "NEN  ACQUISITION"  shall  mean  the  Acquisition  of  various
publications and commercial printing operations located largely in the States of
Connecticut and Rhode Island  contemplated by the Asset Purchase Agreement dated
as of March 10, 1995 by and among NH Acquisition Corp. and Capital Cities Media,
Inc., Foothills Trader, Inc., Guilford Publishing Company,  Inc., Imprint,  Inc.
and Wilson Publishing Company (including all schedules and exhibits thereto).

                  "NEN  ACQUISITION  LOAN  BANKS"  shall mean Banks from time to
time  holding NEN  Acquisition  Loans  after  giving  effect to any  assignments
thereof permitted by Section 11.06 hereof.

                  "NEN  ACQUISITION  LOANS" shall mean the loans provided for by
Section 2.01(c) hereof,  which may be Base Rate Loans and/or  Eurodollar  Loans.
The NEN Acquisition  Loans outstanding as of the Effective Date are set forth in
Annex 1 hereto.

                  "NEN ACQUISITION ENVIRONMENTAL REPORTS" shall mean the Phase I
Environmental  Reports  entitled  "Elm City  Citizen  Newspapers,  349 New Haven
Avenue, Milford,  Connecticut",  "Shore Line Newspapers,  120 North Fair Street,
Guilford,  New Haven County,  Connecticut",  "Wilson Newspapers,  Inc., 187 Main
Street,  Wakefield,  Rhode Island",  "Imprint  Newspapers,  20 Isham Road,  West
Hartford,  Connecticut" and "Imprint  Printing,  Inc., 97 Defco Park Road, North
Haven, New Haven County, Connecticut", each prepared by H2M Associates, Inc. and
dated November, 1994.





                                CREDIT AGREEMENT

<PAGE>


                                     - 20 -



                  "NEN MORTGAGE PROPERTIES" shall mean the properties identified
in Attachment B to Amendment No. 1 to the 1994 Credit Agreement.

                  "NEN SURVEYS" shall have the meaning given to such term
in Section 4.11 of Amendment No. 1 to the 1994 Credit Agreement.

                  "NEN TITLE REPORTS" shall have the meaning  given to such term
in Section 4.12 of Amendment No. 1 to the 1994 Credit Agreement.

                  "NET PROCEEDS" shall mean:

                  (a) with respect to any receipt of proceeds of any Disposition
referred  to in  Section  2.09(b)  hereof  or  any  insurance  payment,  or  any
condemnation  award or other  compensation  in  respect  of any  Casualty  Event
referred to in Section 2.09(c) hereof, the excess, if any, of: (i) the aggregate
amount  of such  proceeds  OVER  (ii)  the sum of (x) 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 (y) 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 (z) 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;

                  (b) with respect to any Equity Issuance,  the aggregate amount
of all cash  received by the Borrower or any of its  Subsidiaries  in respect of
such  Equity  Issuance  or sale by the  Borrower  net of (only in the case of an
Equity Issuance referred to in clause (a) of the definition of that term or such
a sale by the Borrower)  reasonable fees and out-of-pocket  expenses incurred by
the Borrower or such Subsidiary in connection therewith; and

                  (c)  with  respect  to  any  issuance  of  Subordinated   Debt
permitted under Section 8.07 hereof,  the aggregate  amount of all cash received
by the Borrower or any of its  Subsidiaries  in respect of such  issuance net of
reasonable  fees and  out-of-pocket  expenses  (including,  without  limitation,
underwriting discounts)




                                CREDIT AGREEMENT

<PAGE>


                                     - 21 -



incurred by the Borrower or such Subsidiary in connection therewith.

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

                  "NEW BRITAIN  ACQUISITION"  shall mean the Acquisition of "The
New Britain  Herald"  located in New Britain,  Connecticut and other Property as
contemplated  by the Stock Purchase  Agreement  dated as of June 20, 1995 by and
among each of the shareholders of the Herald Publishing  Company and New Britain
Publishing Company (including all schedules and exhibits thereto).

                  "NEW BRITAIN ACQUISITION ENVIRONMENTAL REPORTS" shall mean the
Phase I Environmental  Site Assessment for The Herald Publishing Company at 7-15
Franklin  Square,  New  Britain,  Connecticut,  dated  June,  1995,  prepared by
Mitchell R. Chester, The East Hartford Gazette, 54 Connecticut  Boulevard,  East
Hartford, Connecticut, dated June, 1995, prepared by Mitchell R. Chester and One
Herald  Square,  New  Britain  Connecticut,   dated  March,  1991,  prepared  by
Consulting Environmental  Engineers,  Inc. and the Environmental Site Assessment
for The Herald at 1 Herald Square, New Britain, Connecticut,  dated April, 1995,
prepared by Haley & Aldrich, Inc.

                  "NEW BRITAIN ACQUISITION LOAN BANKS" shall mean the Banks from
time to time holding New Britain  Acquisition  Loans after giving  effect to any
assignments thereof permitted by Section 11.06 hereof.

                  "NEW BRITAIN  ACQUISITION LOANS" shall mean the loans provided
for by Section  2.01(d) hereof,  which may be Base Rate Loans and/or  Eurodollar
Loans. The New Britain  Acquisition  Loans  outstanding as of the Effective Date
are set forth in Annex 1 hereto.

                  "NEW BRITAIN MORTGAGE PROPERTIES" shall  mean  the  properties
identified in Attachment B to Amendment No. 2 to the 1994 Credit Agreement.

                  "NEW BRITAIN SURVEYS" shall  have  the  meaning  given to such
term in Section 4.11 of Amendment No. 2 to the 1994 Credit Agreement.

                  "NEW BRITAIN TITLE REPORTS" shall have  the  meaning  given to
such term in Section 4.12 of Amendment No. 2 to the 1994 Credit Agreement.





                                CREDIT AGREEMENT

<PAGE>


                                     - 22 -



                  "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 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.

                  "1994 CREDIT  AGREEMENT"  shall have the meaning given to such
term in the second paragraph hereof.

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

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

                  "PAD  COMMITMENTS"  shall mean any commitment(s) to make loans
to the Borrower pursuant to Section 2.01(e) hereof.

                  "PAD LOANS" shall mean, collectively,  (a) the NEN Acquisition
Loans, (b) the New Britain  Acquisition Loans and (c) the loans made pursuant to
the PAD  Commitments,  which may be Base Rate  Loans  and/or  Eurodollar  Loans.
Notwithstanding anything herein to the contrary, PAD Loans are not considered to
be Permitted Additional Debt.

                  "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 of any one
or more  Newspapers in the United States of America made as permitted by Section
8.05(b)(iv) hereof.

                  "PERMITTED ADDITIONAL DEBT" shall have the meaning assigned to
such term in Section 8.07(e) 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,




                                CREDIT AGREEMENT

<PAGE>


                                     - 23 -



trust, unincorporated organization or government (or any agency, instrumentality
or political subdivision thereof).

                  "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  Banks or the Agent  under or
pursuant to this Agreement or any other Credit Document,  a rate per annum equal
to 5% 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,  5% 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, NEN Acquisition  Loans and New Britain  Acquisition  Loans, the Quarterly
Dates occurring in March, June, September and December of each year,  commencing
with the first Quarterly Date after the Effective Date through and including (i)
December,  2002, with respect to Term Loans, and (ii) March,  2003, with respect
to NEN Acquisition  Loans and New Britain  Acquisition  Loans,  (b) May 5, 2003,
with respect to the last scheduled installment of the NEN Acquisition Loans, (c)
May 1, 2003,  with respect to the last scheduled  installment of the New Britain
Acquisition  Loans and (d) with  respect to each  Series of PAD Loans other than
NEN Acquisition Loans and New Britain  Acquisition 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 Bank  providing  such  Loans,
PROVIDED that the requirements of Section 3.01(e) hereof are satisfied.

                  "PROPERTY" shall mean all property  of  any  kind  whatsoever,
 whether real, personal or mixed and whether tangible  




                                CREDIT AGREEMENT

<PAGE>


                                     - 24 -



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 each
March,  June,  September and December in each year,  the first of which shall be
the first such day after the date of this Agreement.

                  "REFERENCE  BANKS"  shall mean Chase and/or such other Bank or
Banks as the Agent shall  select  (after  consultation  with the  Borrower)  and
designate to the Borrower as a "Reference  Bank" hereunder (or their  Applicable
Lending Offices, as the case may be).

                  "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 Bank, 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 Bank 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.

                  "REQUIRED  LENDERS" shall mean, at any time, Lenders having at
least 60% of the sum of (a) the aggregate  outstanding  principal  amount of the
Loans at such time PLUS (b) the aggregate  unused amount of the  Commitments  at
such time  PLUS (c) the  aggregate  outstanding  principal  amount of  Permitted
Additional Debt at such time.

                  "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 




                                CREDIT AGREEMENT

<PAGE>


                                     - 25 -



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  (a)  dividends  (in  cash,
property or obligations)  on, or other payments or  distributions on account of,
or payments or the setting apart of money for a sinking or other  analogous fund
for the purchase, redemption,  retirement or other acquisition of, any shares of
any class of stock of the Borrower,  but excluding  dividends  payable solely in
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)  and (b)  payments  (in  cash,  property  or  obligations)  or
distributions  on account of, or  payments  or the setting  apart of money for a
sinking or other  analogous  fund for the  purchase,  redemption,  retirement or
other acquisition of any Subordinated Debt.

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

                  "REVOLVING  CREDIT   COMMITMENT"  shall  mean:  (a)  for  each
Revolving  Credit Bank that is a party to this Agreement on the Effective  Date,
the  obligation of such Bank to make  Revolving  Credit Loans up to an aggregate
principal amount equal to the amount set forth opposite the name of such Bank on
Annex 1 hereto;  and (b) for each  Revolving  Credit Bank that acquires all or a
portion of another  Revolving  Credit  Bank's  Revolving  Credit  Commitment  by
assignment  pursuant to Section 11.06(b) hereof,  the obligation of such Bank to
make Revolving  Credit Loans up to an aggregate  principal  amount equal to such
Bank'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 $235,000,000 as of the
Effective Date.




                                CREDIT AGREEMENT

<PAGE>


                                     - 26 -




                  "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.

                  "REVOLVING CREDIT COMMITMENT TERMINATION DATE" shall  mean the
Quarterly Date occurring in December, 2003.

                  "SCHEDULED PAYMENT" shall mean each repayment of the principal
of the 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 NEN Acquisition
Loans  required  to be made on a  Principal  Payment  Date  pursuant  to Section
3.01(c) hereof,  each repayment of the principal of the New Britain  Acquisition
Loans  required  to be made on a  Principal  Payment  Date  pursuant  to Section
3.01(d) hereof, each repayment of PAD Loans other than NEN Acquisition Loans and
New  Britain  Acquisition  Loans  pursuant  to  Section  3.01(e)  hereof and the
reduction in the Revolving  Credit  Commitments  required by Section  2.03(b)(v)
hereof.  For  purposes  of  computing  Total  Debt  Service,  the amount of each
Scheduled Payment shall be (a) the aggregate principal amount of the Term Loans,
NEN  Acquisition  Loans,  New Britain  Acquisition  Loans and PAD Loans actually
repaid pursuant to Section 3.01(a),  Section 3.01(c), Section 3.01(d) or Section
3.01(e), respectively, hereof 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 pursuant to Section 2.09(a)
hereof after giving effect to the reduction in the Revolving Credit  Commitments
pursuant to Section 2.03(b)(v) hereof.

                  "SECURITY  DOCUMENTS" shall mean,  collectively,  the Borrower
Security  Agreement,  the JCI/JNI Security  Agreement and all Uniform Commercial
Code  financing  statements  required  thereby to be filed  with  respect to the
security  interests  created pursuant thereto and, if and to the extent executed
and delivered pursuant to Section 8.22 hereof,  the Mortgages,  any Supplemental
Mortgages and the Supplement to the Subsidiary  Guarantee referred to in Section
8.22(ii) hereof (PROVIDED that,  notwithstanding  the foregoing,  the Mortgages,
such Supplemental  Mortgages and such Subsidiary Guarantee shall be deemed to be
Security Documents and Transaction Documents for purposes of Sections 7.04, 7.05
and 7.06 hereof).

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





                                CREDIT AGREEMENT

<PAGE>


                                     - 27 -



                  "STOCK  INCENTIVE PLAN" shall mean the Borrower's  "1997 Stock
Incentive  Plan" which  authorized  the  granting of up to  4,843,750  shares of
common stock of the Borrower through  incentive stock options and  non-qualified
stock options to acquire common stock of the Borrower and awards of common stock
to directors,  officers and employees of or  consultants to the Borrower and its
Subsidiaries and Affiliates.

                  "SUBORDINATED DEBT" shall mean unsecured  Indebtedness (i) for
which the Borrower is directly and primarily liable, (ii) in respect of which no
Subsidiary of the Borrower is contingently or otherwise obligated and (iii) that
is  subordinated  to the  obligation  of the  Borrower to pay  principal  of and
interest  on the  Loans and Notes and  other  amounts  hereunder  on terms,  and
pursuant  to  documentation   containing   other  terms   (including   interest,
amortization,   covenants  and  events  of  default),   in  form  and  substance
satisfactory  to the  Majority  Banks;  PROVIDED  that  in no  event  shall  any
Subordinated  Debt provide for the payment of any principal thereof prior to the
date which is at least 91 days after the last scheduled  principal  payment date
of any of the Loans.

                  "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  of JNI for any  purpose of this  Agreement  other than to the extent
Chanry  is  included  in the  historical  financial  statements  of JNI  and its
Subsidiaries.  "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 the  Guarantee  Agreement
dated as of December  21, 1994  between the  Subsidiary  Guarantors  (including,
without  limitation,  from and after the  Effective  Date,  JNI and JCI) and the
Agent, as the same shall be 




                                CREDIT AGREEMENT

<PAGE>


                                     - 28 -



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.

                  "SUPPLEMENTAL  MORTGAGE"  shall have the meaning given to such
term in Section 8.22 hereof.

                  "SURVEYS" shall mean, collectively,  (a) the surveys delivered
to the Agent pursuant to Section 6.01(p) of the 1994 Credit  Agreement,  (b) the
NEN  Surveys,  (c) the New  Britain  Surveys  and (d) and each  other  survey of
Mortgage  Property  Acquired by any Obligor  after the Amendment No. 2 Effective
Date if such  Acquisition  is financed in whole or in part with the  proceeds of
PAD Loans hereunder or Permitted Additional Debt as permitted by Section 8.07(e)
hereof,  each  dated not more than 30 days  prior to the date such PAD Loans are
made or such Permitted Additional Debt is incurred, certified to the Agent, made
in accordance with the "Minimum Standard Detail  Requirements for ALTA/ACSM Land
Title Surveys"  established  and adopted by the American Land Title  Association
and American Congress on Surveying and Mapping in 1992, and meeting the accuracy
requirements of an "Urban" survey as defined therein,  showing all buildings and
other  improvements,  if any, all encroachments,  if any, all set-back lines, if
any, and all areas affected by any easements or other  instruments of record, if
any (the  recording  data in  respect of which  shall be marked on the  survey),
containing  metes and bounds  description of such Mortgage  Properties,  setting
forth the flood zone designations, if any, in which such Mortgage Properties are
located.

                  "TAUNTON  ACQUISITION"  shall mean the  acquisition by Taunton
Acquisition  Corp., a Delaware  corporation,  of the assets of The Taunton Daily
Gazette.

                  "TERM  LOAN  BANKS"  shall  mean the  Banks  from time to time
holding Term Loans after giving effect to any assignments  thereof  permitted by
Section 11.06 hereof.

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

                  "TITLE  COMMITMENTS" shall have the meaning given to such term
in Section 8.22 hereof.





                                CREDIT AGREEMENT

<PAGE>


                                     - 29 -



                  "TITLE  INSURER"  shall mean First  American  Title  Insurance
Company or such  other  title  insurance  company as the  Majority  Banks  shall
approve.

                  "TITLE  POLICIES" shall have the meaning given to such term in
Section 8.22 hereof.

                  "TITLE  REPORTS"  shall  mean,  collectively,  (a)  the  title
reports  delivered to the Agent  pursuant to Section  6.01(q) of the 1994 Credit
Agreement,  (b) the NEN Title Reports, (c) the New Britain Title Reports and (d)
each other title  report  prepared  by the Title  Insurer for the benefit of the
Agent covering Mortgage Property Acquired by any Obligor after the Amendment No.
2 Effective  Date if such  Acquisition  is financed in whole or in part with the
proceeds of PAD Loans  hereunder  or Permitted  Additional  Debt as permitted by
Section 8.07(e) hereof.

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

                  "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 of  principal  of
Indebtedness which Indebtedness is included in Total Debt; (b) Interest Expense;
and (c) payments of principal of and cash interest on Warburg  Subordinated Debt
(other  than the payment in full of the Warburg  Subordinated  Debt  pursuant to
Section  6.01(f)  hereof);  PROVIDED  that solely for  purposes  of  determining
compliance  with: (i) Section 8.12 hereof at any date,  payments of principal of
and cash interest on Warburg  Subordinated  Debt (to the extent  included in the
calculation of Total Debt Service for such




                                CREDIT AGREEMENT

<PAGE>


                                     - 30 -



period), shall be deemed, except as otherwise permitted by clause (ii) below, to
have been paid in equal monthly  installments  during such period;  (ii) Section
8.12 hereof at any date occurring during fiscal year 1996, payments of principal
of and cash interest on Warburg Subordinated Debt (to the extent included in the
calculation of Total Debt Service for such period),  may, at the election (which
election  shall be notified by the Borrower to the Agent on or prior to the date
of each  such  payment)  of the  Borrower,  be deemed to have been paid in equal
monthly  installments during a period of up to 24 complete calendar months ended
on, or most recently  ended prior to, such payment date;  and (iii) Section 8.12
hereof at any date  occurring  on or after  January  1,  1997,  each  payment of
principal of or cash  interest on Warburg  Subordinated  Debt made during fiscal
year 1996 (to the extent  included in the  calculation of Total Debt Service for
such  fiscal  year)  shall  be  reduced  by the  sum of the  following  (without
duplication of deductions):  (w) the amount of such payment of principal or cash
interest made with proceeds of Permitted  Additional  Debt and with proceeds (up
to but not exceeding  $5,000,000 in the aggregate) of Warburg Subordinated Debt;
(x) Excess Cash Flow for fiscal year 1995,  if any; (y) Excess Cash Flow for the
period  commencing  on January 1, 1996 and ended on the date of such  payment of
principal  or  interest;  and (z) the  lesser  of (I)  $6,000,000  and (II) cash
balances and Cash  Equivalents  of the Borrower as at December 31, 1994 as shown
on the  combined  consolidated  financial  statements  of JNI and JCI and  their
respective  Subsidiaries  delivered to the Agent pursuant to the Existing Credit
Agreement.

                  "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.

                  "TRANSACTION DOCUMENTS" shall mean,  collectively,  the Credit
Documents  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 PAD
Loans  hereunder or Permitted  Additional  Debt as permitted by Section  8.07(e)
hereof.





                                CREDIT AGREEMENT

<PAGE>


                                     - 31 -



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

                  "WARBURG"  shall  mean,  collectively:   (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,  and (v) any other venture  banking fund in which
Warburg, Pincus & Co. is the general partner.

                  "WARBURG  AFFILIATE"  shall mean any  Subsidiary of any of the
entities  listed in clauses (i) through (v),  inclusive,  of the  definition  of
"Warburg" in this Section 1.01.

                  "WARBURG  SUBORDINATED  DEBT" shall mean  Indebtedness  of JNI
and/or JCI owed to Warburg  immediately prior to the Effective Date as listed in
Schedule VI hereto.

                  "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 Banks hereunder shall (unless otherwise disclosed to the Banks
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 Banks hereunder (which, prior
to the delivery of the first  consolidated  financial  statements  under Section
8.01 hereof,  shall mean the combined  financial  statements of Journal Register
LLC and its  Subsidiaries  as at December  31, 1996  referred to in Section 7.02
hereof).  All  calculations made for the purposes of determining compliance with




                                CREDIT AGREEMENT

<PAGE>


                                     - 32 -



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 Banks  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 combined
financial statements of Journal Register LLC and its Subsidiaries as at December
31, 1996 referred to in Section 7.02 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  Banks shall have
objected to so determining such compliance  within 30 days after delivery to the
Banks 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 combined  financial  statements  of Journal  Register LLC and its
Subsidiaries as at December 31, 1996 referred to in Section 7.02 hereof).

                  (b)    The Borrower shall deliver to the  Banks  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.

                  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 Term
Loan or a PAD 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 33 -




constitutes a Type. In addition,  PAD Loans (and  Commitments to make PAD Loans)
are  distinguished by "Series".  The Series of a PAD Loan (or of a Commitment to
make a PAD  Loan)  refers  both to the date  such PAD Loan was made (or the date
such PAD  Commitment was extended to the Borrower) and the purpose for which the
proceeds  of such PAD Loan may be  utilized  and only PAD Loans made on the same
specified  date and only for the same  specified  purpose are included  within a
particular  Series of PAD Loans.  Loans may be identified by both Class and Type
and PAD Loans may also be identified by Series.


                  Section 2.  COMMITMENTS.

                  2.01   LOANS.

                  (a)    TERM LOANS. On the Effective Date, (i) the "Term Loans"
(as defined in the Existing  Credit  Agreement) held by the Existing Banks 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 Term Loans  hereunder and each of the New Banks that is a Term
Loan Bank (and each Existing  Bank, if any,  whose  relative  proportion of Term
Loans hereunder is increasing over its relative  proportion of "Term Loans" held
by it under the Existing  Credit  Agreement  (each an "INCREASING  EXISTING TERM
LOAN BANK"))  shall,  by  assignments  from the Existing  Banks,  if any,  whose
relative  proportion of the Term Loans hereunder is decreasing from its relative
proportion of "Term 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 Term Loans of the  Existing  Banks so  designated  and
continued (the Term Loan Banks shall,  through the Agent,  make such  additional
adjustments among themselves as shall be necessary), (ii) each such New Bank and
each  Increasing  Existing  Term Loan Bank  severally  agrees,  on the terms and
conditions of this  Agreement,  to make a term loan (on a non pro-rata basis) to
the Borrower in Dollars and/or (iii) the Borrower shall prepay the Term Loans of
the Existing Banks (on a non pro-rata basis), in each case in such amounts, such
that after giving effect thereto,  the Term Loan Banks shall hold the Term Loans
hereunder in the respective principal amounts specified in Annex 1 hereto.

                  From and after the Effective  Date,  the Borrower (as provided
in Section 2.08(a) hereof) may Convert Term Loans of one Type into Term Loans of
another Type (as provided in Section  2.08(a)  hereof) or Continue Term Loans of
one Type as Term Loans of the same Type (as provided in Section 2.08(a) hereof).




                                CREDIT AGREEMENT

<PAGE>


                                     - 34 -




                  (b)    REVOLVING CREDIT LOANS. On the Effective Date,  (i) the
"Revolving  Credit Loans" (as defined in the Existing Credit  Agreement) held by
the Existing Banks 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 Bank (including,
without limitation,  each New Bank that is a Revolving Credit Bank) shall have a
Revolving Credit  Commitment in the amount set opposite the name of such Bank on
Annex 1 hereto, (iii) each of the New Banks that is a Revolving Credit Bank (and
each  Existing  Bank, 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 BANK")) shall, by assignments  from the
Existing  Banks,  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  Banks so
designated  and  continued  (and the Revolving  Credit Banks shall,  through the
Agent, make such additional adjustments among themselves as shall be necessary),
(iv) each  such New Bank and each  Increasing  Existing  Revolving  Credit  Bank
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 Banks
(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 Banks 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 Bank
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 Bank's Revolving Credit Commitment as then in effect. 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 AGREEMENT

<PAGE>


                                     - 35 -



Credit  Loans of one Type as  Revolving  Credit Loans of the same Type.

                  (c)    NEN  ACQUISITION  LOANS. On the Effective Date, (i) the
"NEN  Acquisition  Loans" (as defined in the Existing Credit  Agreement) held by
the Existing Banks under the Existing Credit Agreement shall automatically,  and
without any action on the part of any Person, be designated and continued as NEN
Acquisition  Loans hereunder and each of the New Banks that is a NEN Acquisition
Loan Bank (and each Existing  Bank,  if any,  whose  relative  proportion of NEN
Acquisition  Loans hereunder is increasing over its relative  proportion of "NEN
Acquisition  Loans"  held by it under the  Existing  Credit  Agreement  (each an
"INCREASING EXISTING NEN ACQUISITION LOAN BANK")) shall, by assignments from the
Existing Banks, if any, whose relative  proportion of the NEN Acquisition  Loans
hereunder is decreasing from its relative  proportion of "NEN 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
NEN Acquisition Loans of the Existing Banks so designated and continued (and the
NEN  Acquisition  Loan Banks  shall,  through  the Agent,  make such  additional
adjustments among themselves as shall be necessary), (ii) each such New Bank and
each Increasing  Existing NEN  Acquisition  Loan Bank severally  agrees,  on the
terms and conditions of this  Agreement,  to make a term loan (on a non pro-rata
basis) to the Borrower in Dollars and/or (iii) the Borrower shall prepay the NEN
Acquisition  Loans of the Existing Banks (on a non pro-rata basis), in each case
in such amounts, such that after giving effect thereto, the NEN Acquisition Loan
Banks shall hold the NEN Acquisition Loans hereunder in the respective principal
amounts specified in Annex 1 hereto.

                  From and  after  the  Effective  Date,  the  Borrower  may (as
provided in Section 2.08(a)  hereof)  Convert NEN Acquisition  Loans of one Type
into NEN Acquisition  Loans of the other Type or Continue NEN Acquisition  Loans
of one Type as NEN Acquisition Loans of the same Type.

                  (d)    NEW BRITAIN ACQUISITION LOANS. On  the  Effective Date,
(i) the "New  Britain  Acquisition  Loans" (as  defined in the  Existing  Credit
Agreement) held by the Existing Banks under the Existing Credit  Agreement shall
automatically,  and without any action on the part of any Person,  be designated
and  continued as New Britain  Acquisition  Loans  hereunder and each of the New
Banks that is a New Britain  Acquisition  Loan Bank (and each Existing  Bank, if
any, whose relative  proportion of New Britain  Acquisition  Loans  hereunder is
increasing over its relative  proportion of "New Britain Acquisition Loans" held
by  it  under  




                                CREDIT AGREEMENT

<PAGE>


                                     - 36 -



the Existing  Credit  Agreement  (each an  "INCREASING  EXISTING NEW NEW BRITAIN
ACQUISITION  LOAN BANK")) shall, by assignments from the Existing Banks, if any,
whose  relative  proportion of the New Britain  Acquisition  Loans  hereunder is
decreasing from its relative  proportion of "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 New Britain
Acquisition Loans of the Existing Banks so designated and continued (and the New
Britain  Acquisition Loan Banks shall,  through the Agent,  make such additional
adjustments among themselves as shall be necessary), (ii) each such New Bank and
each Increasing  Existing New Britain Acquisition Loan Bank severally agrees, on
the  terms  and  conditions  of this  Agreement,  to make a term  loan (on a non
pro-rata  basis) to the  Borrower in Dollars  and/or  (iii) the  Borrower  shall
prepay  the New  Britain  Acquisition  Loans  of the  Existing  Banks  (on a non
pro-rata  basis),  in each case in such  amounts,  such that after giving effect
thereto,  the New  Britain  Acquisition  Loan Banks  shall hold the New  Britain
Acquisition  Loans hereunder in the respective  principal  amounts  specified in
Annex 1 hereto.

                  From and  after  the  Effective  Date,  the  Borrower  may (as
provided in Section 2.08(a) hereof) Convert New Britain Acquisition Loans of one
Type into New  Britain  Acquisition  Loans of the  other  Type or  Continue  New
Britain  Acquisition  Loans of one Type as New Britain  Acquisition Loans of the
same Type.

                  (e)    PAD LOANS.  From and after the Effective Date, any Bank
or any other Person (other than Warburg or any Warburg  Affiliate) may provide a
new PAD Commitment to the Borrower in compliance  with Section 8.07(e) hereof as
if it were  Permitted  Additional  Debt,  PROVIDED  that  each of the  following
conditions  is  satisfied  as of the date each such new PAD  Commitment  becomes
effective hereunder:

                  (i)      no Default shall have occurred and  be  continuing as
         of such date;

                  (ii)     the sum of the aggregate outstanding principal amount
         of the PAD Loans (excluding the NEN Acquisition  Loans and New  Britain
         Acquisition Loans) PLUS the aggregate  outstanding  principal amount of
         Permitted  Additional Debt PLUS the aggregate  unused amount of the PAD
         Commitments  then in  effect  PLUS the  unused  amount  of such new PAD
         Commitment shall not exceed $125,000,000 as of such date; and

                  (iii)    such Bank or such  other  Person  shall  have  agreed
         to provide such new Commitment and, if not already a Bank,




                                CREDIT AGREEMENT

<PAGE>


                                     - 37 -



         shall have agreed to be bound by the  provisions of this Agreement as a
         "Bank"  hereunder  pursuant  to  documentation  in form  and  substance
         satisfactory to the Agent;

and upon the  execution  and delivery of such  documentation,  such Bank or such
other Person,  if not already a Bank hereunder,  shall become a "Bank" hereunder
having the  obligations,  rights and benefits of a Bank hereunder  holding a PAD
Commitment in an amount equal to the amount of such new PAD Commitment.

                  If a  Bank  extends  a new  PAD  Commitment  to  the  Borrower
pursuant  to this  Section  2.01(e),  such  Bank  agrees,  on the  terms of this
Agreement  and subject to such other  conditions as may be agreed to between the
Borrower  and such  Bank,  to make a PAD Loan or PAD  Loans to the  Borrower  in
Dollars on such date(s) as shall be agreed between such Bank and the Borrower in
an  aggregate  principal  amount  as shall be agreed  between  such Bank and the
Borrower.  Thereafter,  the Borrower may (as provided in Section 2.08(a) hereof)
Convert PAD Loans of one Type into PAD Loans of the other Type or  Continue  Pad
Loans of one Type as PAD Loans of the same Type.

                  (f)    LIMIT ON EURODOLLAR LOANS.

                  (i)    On the Effective Date, all "Interest Periods" under the
Existing Credit Agreement in respect of the "Eurodollar  Loans"  thereunder that
are being continued hereunder shall be continued hereunder until the end of such
Interest  Periods and shall not be  terminated  and,  subject to the  provisions
hereof,  the Borrower  shall be permitted to Continue  such Loans as  Eurodollar
Loans or to Convert  such Loans  into Base Rate Loans of the  appropriate  Class
hereunder.  Notwithstanding  the restatement of the Existing Credit Agreement as
of the Effective  Date, all accrued and unpaid interest on the "Loans" under the
Existing  Credit  Agreement  that are being  continued  hereunder  shall  remain
payable  and be  paid  by the  Borrower  to the  respective  Existing  Banks  in
accordance with Section 3.02 hereof as if such Loans were made hereunder.  As of
the Effective  Date,  after giving  effect to the  adjustments  contemplated  by
Sections 2.01(a),  (b), (c) and (d) and this Section 2.01(f), the relevant Banks
shall hold Loans of a particular  Class pro rata  according to their  respective
Commitments  and within each such Class the relevant Banks shall hold Loans of a
particular Type pro rata according to the amounts of their respective Commitment
Percentages  and, in the case of  Eurodollar  Loans  having  different  Interest
Periods,  such  Loans  shall be  allocated  pro rata  among the  relevant  Banks
according the amount of such Loans respectively held by such Banks.





                                CREDIT AGREEMENT

<PAGE>


                                     - 38 -



                  (ii)   No more than eight separate Interest Periods in respect
of  Eurodollar  Loans of a Class  may be  outstanding  from each Bank at any one
time.

                  (g)   ASSUMPTION OF EXISTING  LOANS.  By its execution of this
Agreement the Borrower  hereby assumes all of the obligations of JNI and JCI, as
borrowers,  under  the  Existing  Credit  Agreement  with  respect  to the loans
thereunder that are being continued hereunder and all other amounts payable with
respect  thereto that remain unpaid as of the Effective Date (except for amounts
contemplated to be paid as of the Effective Date under Section 6.01(f)  hereof).
From and after  the  Effective  Date,  neither  JNI nor JCI  shall be  borrowers
hereunder  but shall  each be a  Subsidiary  Guarantor  party to the  Subsidiary
Guarantee and fully liable thereunder.

                  2.02  BORROWINGS.  The  Borrower  shall give the Agent  (which
shall promptly notify the Banks) 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 Bank shall make  available  the
amount  of the  Loan  to be made by it on such  date to the  Agent,  at  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.

                  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;  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.




                                CREDIT AGREEMENT

<PAGE>


                                     - 39 -




                  (ii)   The Revolving Credit  Commitments  shall  automatically
         reduce  by  the  aggregate  principal  amount  of  each  prepayment  of
         Revolving  Credit Loans made as required by Section  2.09(b),  2.09(c),
         2.09(d) or 2.09(e) hereof.

                  (iii)  The Revolving Credit  Commitments  shall  automatically
         reduce by the amount of any  prepayment of Revolving  Credit Loans that
         would have been required to have been made pursuant to Section 2.09(b),
         2.09(c),  2.09(d) or 2.09(e)  hereof but for the  provisions of Section
         2.09(g) hereof.

                  (iv)   If any event of the type described in Section  2.09(b),
         2.09(c), 2.09(d) or 2.09(e) hereof occurs on any date when no Loans are
         outstanding and the Revolving Credit Commitments are in effect, then on
         such date the Revolving Credit Commitments shall  automatically  reduce
         by an amount equal to the aggregate  principal amount of the Loans that
         would have been required to have been repaid had Loans been outstanding
         on such date in a principal amount equal to the aggregate amount of the
         Revolving Credit Commitments in effect on such date.

                  (v)    The Revolving Credit  Commitments  shall  automatically
         reduce to (x)  $195,000,000 at the opening of business on the Quarterly
         Date occurring in December,  2000, (y)  $155,000,000  at the opening of
         business on the  Quarterly  Date  occurring in  December,  2001 and (z)
         $115,000,000 at the opening of business on the Quarterly Date occurring
         in December,  2002, PROVIDED that, if at the opening of business on any
         such Quarterly Date the amount of the Revolving Credit Commitments then
         in  effect  is equal to or less than the  respective  amount  specified
         above, no further  reductions in the Revolving Credit Commitments as of
         such date shall be required pursuant to this Section 2.03(b)(v).

                  (c)    EFFECT  OF  COMMITMENT  REDUCTIONS.  Commitments   once
terminated or reduced may not be reinstated.

                  2.04   COMMITMENT FEES. The  Borrower  shall  pay to the Agent
for account of each Bank having a PAD  Commitment a commitment  fee on the daily
average  unused  amount of such Bank's PAD  Commitment,  for the period from and
including such date as shall be agreed between such Bank and the Borrower to but
excluding the earlier of the date such PAD  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 Debt Ratio is less than 4.50 to 1, commitment fees payable by the Borrower
hereunder




                                CREDIT AGREEMENT

<PAGE>


                                     - 40 -



in respect of the PAD Commitments  shall be calculated at a rate per annum equal
to 1/4 of 1%  (PROVIDED  that no reduction  in  commitment  fee pursuant to this
sentence shall be effective  earlier than the date three Business Days after the
date  the  Agent  receives  a  certificate  of the  Borrower  as to the  related
reduction in the Total Debt Ratio and specifically  requesting such reduction in
such  commitment  fee).  The Borrower shall pay to the Agent for account of each
Revolving  Credit Bank a commitment  fee on the daily  average  unused amount of
such Bank'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  Debt 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%  (PROVIDED  that no
reduction in commitment fee pursuant to this sentence shall be effective earlier
than  the  date  three  Business  Days  after  the date  the  Agent  receives  a
certificate of the Borrower as to the related  reduction in the Total Debt Ratio
and  specifically  requesting  such reduction in such commitment  fee).  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.  Notwithstanding the
foregoing,  as of the  Effective  Date the  commitment  fees with respect to the
Revolving Credit  Commitments shall be determined on the basis of the Total Debt
Ratio  as of the  Effective  Date  as set  forth  in the  certificate  furnished
pursuant to Section 6.01(g) hereof.

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

                  2.06   SEVERAL OBLIGATIONS; REMEDIES INDEPENDENT.  The failure
of any Bank to make any  Loan to be made by it on the  date  specified  therefor
shall not  relieve  any other  Bank of its  obligation  to make its Loan on such
date, but neither any Bank nor the Agent shall be responsible for the failure of
any other Bank to make a Loan to be made by such other Bank. The amounts payable
by the Borrower at any time hereunder and under the Notes to each Bank shall be,
as  between  the  Borrower  on the one hand and such Bank on the other  hand,  a
separate  and  independent  debt and each Bank 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 Bank 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 41 -



to permit acceleration of the Loans or cancellation  of  the  Commitments by any
Bank  except in  accordance  with  Section 9 hereof  or as  otherwise  expressly
permitted by the terms hereof.

                  2.07   EVIDENCE OF DEBT.

                  (a)    Each Bank shall maintain in  accordance  with its usual
practice an account or accounts  evidencing the  indebtedness of the Borrower to
such Bank  resulting  from each Loan made or  continued  hereunder by such Bank,
including  the amounts of principal  and interest  payable and paid to such Bank
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 Bank  hereunder and (iii) the amount of any sum received by the
Agent hereunder for the account of the Banks and each Bank'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 Bank 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 Bank 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 Bank a promissory
note(s)  payable to the order of such Bank (or, if  requested  by such Bank,  to
such Bank and its registered  assigns) and  substantially in the form of Exhibit
E-1, E-2, E-3, E-4 or E-5, 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 42 -



in Section 4.05 hereof;  and (ii) Eurodollar  Loans may be Converted only on the
last day of an Interest Period for such Loans.

                  (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) or 2.08(d),
each such  prepayment  shall,  at the option of the Borrower,  be applied to the
prepayment of Revolving Credit Loans,  Term Loans,  and/or PAD 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 PAD LOAN  OPTIONAL  PREPAYMENTS.  On  any
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 PAD 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 PAD 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) Euro- dollar 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 43 -



aggregate  principal  amount of all Term Loans and all PAD 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 PAD 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.

                  (d)    ESTIMATED EXCESS CASH FLOW. The Borrower shall have the
right to prepay  without  premium or  penalty  (but  subject to the  penultimate
sentence of Section 3.02 hereof) the amount the  Borrower  reasonably  estimates
will be payable  pursuant  to Section  2.09(d)  hereof on the next date for such
prepayment  specified in said Section 2.09(d) (the "REQUIRED  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(d) and which  certificate  shall be in form and
detail  satisfactory  to the Agent and shall contain a calculation  of estimated
Excess Cash Flow computed with respect to the related  Required  Prepayment Date
and prepaid  pursuant to this  Section  2.08(d);  (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) each
such prepayment shall be applied in the manner provided in said Section 2.09(d);
(iv) the Borrower may make only one prepayment  pursuant to this Section 2.08(d)
during any calendar  year;  and (v) if the actual amount of the Loans that would
otherwise have been required to be prepaid  pursuant to said Section  2.09(d) on
the Required  Prepayment Date determined in accordance with said Section 2.09(d)
shall exceed the estimated amount paid by the Borrower  pursuant to this Section
2.08(d),  then the Borrower  shall make a prepayment  in an amount equal to such
excess in  accordance  with said  Section  2.09(d)  on or  before  the  Required
Prepayment Date (it being  understood that if such estimated amount exceeds such
actual amount,  the Borrower shall not be entitled to any refund with respect to
such  excess and such  excess  shall be applied  to the  prepayment  of the next
Scheduled  Payment  or, if the Term Loans and PAD Loans  shall have been paid in
full,  to 





                                CREDIT AGREEMENT

<PAGE>


                                     - 44 -


the  repayment of  Revolving  Credit  Loans and the  reduction of the  Revolving
Credit Commitments).

                  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  unpaid  principal
amount  of the  Revolving  Credit  Loans  exceeds  the  aggregate  amount of the
Revolving  Credit  Commitments  as then in effect,  the  Borrower  shall  prepay
Revolving  Credit  Loans  on the date of such  termination  or  reduction  in an
aggregate amount equal to the amount of such excess.

                  (b)    DISPOSITIONS. 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), (v)
and (vi) of Section 8.05(c)  hereof,  but, in the case of said clause (ii), only
to the extent such Net Proceeds are applied (or are  committed to be applied) by
the Borrower or such Subsidiary  within 90 days of such  Disposition to purchase
like Property to be used in the ordinary  course of its business),  the Borrower
shall,  within  240 days  after  receipt of such Net  Proceeds  (subject  to the
proviso below, if such proceeds have not been applied by such 240th day, then on
such 240th 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(f) hereof) to the prepayment of principal of the Loans 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 240th 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 as provided
herein;  and,  PROVIDED  FURTHER that the Borrower  shall have no obligations to
make any such application in respect of the Net Proceeds  received in respect of
any single Disposition unless and until the aggregate amount of all Net Proceeds
received in respect of all Dispositions effected on and after the Effective Date
exceeds  $2,000,000,  in which case an amount equal to the amount of such excess
shall be so applied.





                                CREDIT AGREEMENT

<PAGE>


                                     - 45 -



                  (c)    CASUALTY EVENTS. 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 180 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  180th  day,  then on such  180th  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(f) hereof), to prepay principal of the Loans,  PROVIDED that the
Borrower shall have no obligation to make any such application in respect of the
Net Proceeds  received in respect of any single Casualty Event unless the amount
of such Net Proceeds exceeds $50,000,  in which case an amount equal to the full
amount received shall be so applied.

                  (d)    EXCESS  CASH  FLOW.  Not  later than five Business Days
after receipt by the Agent of the annual  consolidated  financial  statements of
the Borrower and its  Subsidiaries  to be delivered by the Borrower  pursuant to
Section 8.01(b) hereof (or, if such  consolidated  financial  statements are not
received by the last day on which they are required to be  delivered,  not later
than five  Business Days after the last day on which such  financial  statements
are  required by said  Section  8.01(b) to be so  delivered)  in respect of each
fiscal year of the  Borrower  (commencing  with fiscal year 1999),  the Borrower
shall  apply an amount  equal to 50% of Excess Cash Flow for such fiscal year or
the excess of such amount over the  estimated  Excess Cash Flow  prepayment  for
such fiscal year made pursuant to Section 2.08(d) hereof (as provided in Section
2.09(f)  hereof) to the prepayment of principal of the Loans;  PROVIDED that the
Borrower shall not be required to make any prepayment under this Section 2.09(d)
with respect to any fiscal year if, as of the last day of such fiscal year,  the
Total  Debt  Ratio is less  than  3.0 to 1 (as  demonstrated  in the  Compliance
Certificate  delivered  under  Section  8.01  hereof  accompanying  the  audited
consolidated  financial statements of the Borrower as of the end of and for such
fiscal year).

                  (e)    EQUITY ISSUANCES AND SUBORDINATED  DEBT. Not later than
240 days after  receipt by the Borrower of Net  Proceeds of any Equity  Issuance
(other than the proceeds of the Borrower's  initial public offering  received as
of the Effective Date and applied as  contemplated by Section 6.01(f) hereof) or
the issuance or  incurrence of any  Subordinated  Debt  permitted  under Section
8.07(g) hereof after the Effective Date (and,  subject to the proviso below,  if
such proceeds have not been applied by such




                                CREDIT AGREEMENT

<PAGE>


                                     - 46 -



240th day, then on such 240th day) unless the Borrower  shall have used all or a
portion of such proceeds to consummate an Acquisition,  the Borrower shall apply
or cause to be applied (as provided in Section 2.09(f) hereof) to the prepayment
of  principal  of the Loans 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 240th 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 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 proceeds not so used shall be applied to prepay the Loans as
provided herein.

                  (f)    APPLICATION OF PAYMENTS.   Prepayments  of  Loans  made
pursuant to clauses (b), (c), (d) and (e) of this Section 2.09 shall be applied,
first,  to the  Term  Loans  and PAD  Loans  pro  rata in  accordance  with  the
respective  aggregate  principal  amounts of the Loans of such Classes and, with
respect  to PAD  Loans,  pro rata in  accordance  with the  aggregate  principal
amounts of the PAD 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 Term Loans and PAD Loans  shall have been
paid in full, to the Revolving Credit Loans.

                  (g)    LIMITATIONS ON PREPAYMENTS OF LOANS.    Notwithstanding
anything in this Section 2.09 to the contrary:

                  (i)    if any Permitted Additional Debt is  outstanding at the
         time any  prepayment  of  Loans  is  required  to be made  pursuant  to
         paragraph  (b), (c), (d) or (e) above,  then the maximum  amount of Net
         Proceeds  or  Excess  Cash  Flow,  as the  case may be,  that  shall be
         required to be applied to the prepayment of the Loans and the reduction
         of the Revolving  Credit  Commitments  pursuant to said  paragraph (b),
         (c),  (d) or (e) at such time  shall be equal to (x) the  product  (the
         "ADJUSTED  AMOUNT")  of (I) the amount of Net  Proceeds  or Excess Cash
         Flow,  as the case may be,  that would  otherwise  be required to be so
         applied  but  for  the  provisions  of  this  Section  2.09(g)(i)  (the
         "ORIGINAL  AMOUNT")  MULTIPLIED  BY (II) a fraction,  the  numerator of
         which is the sum of the aggregate  outstanding  principal amount of the
         Loans and the unused amount of the Revolving Credit Commitments at such
         time  and  the  denominator  of  which  is the  sum  of  the  aggregate
         outstanding principal amount of the Loans, the




                                CREDIT AGREEMENT

<PAGE>


                                     - 47 -



         unused  Revolving  Credit  Commitments  and the aggregate   outstanding
         principal  amount of Permitted  Additional  Debt at such time PLUS  (y)
         the  amount,  if any,  by which  (I) the  Original  Amount  MINUS   the
         Adjusted Amount EXCEEDS (II) the amount of any prepayment of  Permitted
         Additional  Debt that is required to be made  simultaneously  with  the
         prepayment of the Loans  pursuant to paragraph (b), (c), (d) or (e)  of
         this Section 2.09; and

                  (ii)   no prepayment of Revolving Credit Loans pursuant to any
         of paragraph  (b),  (c),  (d), (e) or (f) above shall be required to be
         made except to the extent that on the date such  prepayment is required
         to be made the amount  otherwise  required  to be prepaid  exceeds  the
         aggregate unused amount of the Revolving  Credit  Commitments in effect
         on such date.

                  (h) 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),  (c),  (d), (e) or (f) above or, if no prepayment of
the Loans is  required  by  paragraph  (e) above,  at the time it  receives  Net
Proceeds  of any  Equity  Issuance,  the  Borrower  will  deliver to the Agent a
certificate of a Senior Officer,  in form and detail  satisfactory to the Agent,
containing  calculations  of Excess Cash Flow or Net  Proceeds or the Total Debt
Ratio in  respect  of, or after  giving  effect  to,  the  related  Disposition,
Casualty  Event or  Equity  Issuance,  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 or, if no
prepayment of Loans is required by paragraph (e) or (g) above,  specifying  that
no  prepayment  of the Loans is required and also  specifying  the amount of the
reduction  pursuant to Section 2.03(b) hereof,  if any, in the Revolving  Credit
Commitments.


                  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 Term Loan Bank the aggregate  principal amount of the Term Loans
held by such Bank in twenty-three  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 Term Loans held by all Term Loan Banks
to be in the amount specified below:




                                CREDIT AGREEMENT

<PAGE>


                                     - 48 -




                  Principal Payment Date             Aggregate Amount
                       OCCURRING IN:                    OF PAYMENT
                  ----------------------             ------------------

                  June 1997                              $10,000,000
                  September 1997                         $10,000,000
                  December 1997                          $10,000,000
                  March 1998                             $13,000,000
                  June 1998                              $13,000,000
                  September 1998                         $13,000,000
                  December 1998                          $13,000,000
                  March 1999                             $14,937,500
                  June 1999                              $14,937,500
                  September 1999                         $14,937,500
                  December 1999                          $14,937,500
                  March 2000                             $16,937,500
                  June 2000                              $16,937,500
                  September 2000                         $16,937,500
                  December 2000                          $16,937,500
                  March 2001                             $18,937,500
                  June 2001                              $18,937,500
                  September 2001                         $18,937,500
                  December 2001                          $18,937,500
                  March 2002                             $17,750,000
                  June 2002                              $17,750,000
                  September 2002                         $17,750,000
                  December 2002                          $17,750,000

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

                  (c)    The Borrower hereby  promises  to pay to the  Agent for
account of each NEN Acquisition Loan Bank the aggregate  principal amount of the
NEN  Acquisition  Loans held by such Bank in twenty-five  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 NEN
Acquisition  Loans  held by all NEN  Acquisition  Loan Banks to be in the amount
specified below:

                  Principal Payment Date             Aggregate Amount
                     OCCURRING IN/ON:                   OF PAYMENT
                  ----------------------             -----------------

                       June 1997                         $  742,500
                       September 1997                    $  742,500
                       December 1997                     $  742,500
                       March 1998                        $  907,500




                                CREDIT AGREEMENT

<PAGE>


                                     - 49 -



                       June 1998                         $  907,500
                       September 1998                    $  907,500
                       December 1998                     $  907,500
                       March 1999                        $1,072,500
                       June 1999                         $1,072,500
                       September 1999                    $1,072,500
                       December 1999                     $1,072,500
                       March 2000                        $1,237,500
                       June 2000                         $1,237,500
                       September 2000                    $1,237,500
                       December 2000                     $1,237,500
                       March 2001                        $1,361,250
                       June 2001                         $1,361,250
                       September 2001                    $1,361,250
                       December 2001                     $1,361,250
                       March 2002                        $1,402,500
                       June 2002                         $1,402,500
                       September 2002                    $1,402,500
                       December 2002                     $1,402,500
                       March 2003                        $1,897,500
                       May 5, 2003                       $1,897,500

                  (d)    The  Borrower hereby promises to pay to the  Agent  for
account of each New Britain Acquisition Loan Bank the aggregate principal amount
of  the  New  Britain  Acquisition  Loans  held  by  such  Bank  in  twenty-five
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 New Britain  Acquisition  Loans held by all New Britain  Acquisition Loan
Banks to be in the amount specified below:

                  Principal Payment Date             Aggregate Amount
                     OCCURRING IN/ON:                   OF PAYMENT
                  ----------------------             -----------------

                         March 1997                       $292,500
                         June 1997                        $292,500
                         September 1997                   $292,500
                         December 1997                    $292,500
                         March 1998                       $357,500
                         June 1998                        $357,500
                         September 1998                   $357,500
                         December 1998                    $357,500
                         March 1999                       $422,500
                         June 1999                        $422,500
                         September 1999                   $422,500
                         December 1999                    $422,500
                         March 2000                       $487,500
                         June 2000                        $487,500




                                CREDIT AGREEMENT

<PAGE>


                                     - 50 -



                         September 2000                   $487,500
                         December 2000                    $487,500
                         March 2001                       $536,250
                         June 2001                        $536,250
                         September 2001                   $536,250
                         December 2001                    $536,250
                         March 2002                       $552,500
                         June 2002                        $552,500
                         September 2002                   $552,500
                         December 2002                    $552,500
                         March 2003                       $552,500
                         May 1, 2003                      $942,500

                  (e)    The Borrower hereby promises to pay  to  the  Agent for
the  account of each Bank  holding PAD Loans  (other than NEN  Acquisition Loans
and  New Britain   Acquisition  Loans)  the  aggregate  principal amount of such
Loans  held by such  Bank on such  days and at such  times as shall be agreed by
such Bank and the  Borrower,  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 such Loans more
quickly than would be permitted by Section  8.07(e)(i) hereof if such Loans were
Permitted Additional Debt.

                  3.02   INTEREST.  The Borrower  hereby  promises to pay to the
Agent for account of each Bank interest on the unpaid  principal  amount of each
Loan made by such Bank 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,  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 Bank  interest  at the
applicable Post-Default Rate on the full outstanding principal amount of




                                CREDIT AGREEMENT

<PAGE>


                                     - 51 -



each of such  Bank's  Loans  (whether or not due and  payable)  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 Bank 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  interest
payable at the  Post-Default  Rate shall be payable from time to time on demand.
Promptly after the determination of any interest rate provided for herein or any
change  therein,  the Agent shall give notice thereof to the Banks 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 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  Bank  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 Bank (with  notice to the Borrower  and the Agent,  PROVIDED  that the
failure of such Bank to so notify the  Borrower  and the Agent  shall not affect
the validity of the actions  taken by such Bank as  permitted by this  paragraph
(b)).





                                CREDIT AGREEMENT

<PAGE>


                                     - 52 -



                  (c)    The Borrower shall, at the time of making each  payment
under this  Agreement or any Note for account of any Bank,  specify to the Agent
(which shall notify the intended  recipients thereof) the Loans 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 fail to so specify, or if an Event
of Default has occurred and is continuing, the Agent may distribute such payment
to the Banks  and/or the other  Person(s)  to which  amounts  are payable by the
Borrower  hereunder in such manner as the  Majority  Banks or, in the absence of
instructions from the Majority Banks, 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 Bank  shall be paid  promptly  to such  Bank in
immediately  available  funds,  for  account of such Bank'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 Banks,  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  Banks,   pro  rata  according  to  the  amounts  of  their  Commitment
Percentages;  (b) the making,  Conversion and  Continuation of Revolving  Credit
Loans,  Term  Loans or PAD Loans of a  particular  Series of a  particular  Type
(other than  Conversions  provided for by Section 5.04 hereof) shall be made pro
rata among the  relevant  Banks  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  Banks  according to the
amounts of such  Loans  respectively  held by such  Banks;  (c) each  payment or
prepayment of Revolving  Credit  Loans,  Term Loans or PAD Loans of a particular
Series by the Borrower  shall be made for account of the relevant Banks pro rata
in accordance with the respective unpaid principal amounts of such Loans held by
the relevant Banks; and (d) each payment of interest on Revolving




                                CREDIT AGREEMENT

<PAGE>


                                     - 53 -



Credit Loans,  Term Loans or PAD Loans of a particular  Series shall be made for
account of the  relevant  Banks pro rata in  accordance  with the amounts of the
interest on such Loans then due and payable to such Banks.

                  4.03   COMPUTATIONS.  Interest   on   Eurodollar   Loans   and
commitment  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 2.08(d) or 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 a multiple of
$1,000,000  ($500,000 in the case of PAD 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 PAD Loans of each Series) or a multiple of  $1,000,000  ($500,000
in the  case of PAD  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).  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 PAD 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. Notices by  the  Borrower to the Agent
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 not later than 10:00 a.m. 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:





                                CREDIT AGREEMENT

<PAGE>


                                     - 54 -



                                                          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)                              1

                  Borrowing of Base Rate
                  Loans on the Effective
                  Date                                      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 Banks of the contents of each such
notice.  In the event that the Borrower  fail 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 Bank 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 Bank) the
proceeds  of a Loan to be made by such  Bank  hereunder  or (in the  case of the
Borrower)  a  payment  to the  Agent  for  account  of one or more of the  Banks
hereunder (such payment being herein called the "REQUIRED




                                CREDIT AGREEMENT

<PAGE>


                                     - 55 -



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 Banks,  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 Banks 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 Bank may
otherwise have, each Bank shall be entitled,  at its option,  to offset balances
held by it for




                                CREDIT AGREEMENT

<PAGE>


                                     - 56 -



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 Bank's Loans,  or
any other  amount  payable  to such Bank  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 Bank'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 Bank shall obtain  payment of any  principal of or interest on
any Loan of any Class and Series 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  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 Bank 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  then due  hereunder  by the  Borrower  to such Bank than the
percentage  received by any other Banks,  it shall  promptly  purchase from such
other Banks  participations in (or, if and to the extent specified by such Bank,
direct interests in) the Loans of such Class and Series made by such other Banks
(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,  respectively,  in such
amounts and make such other adjustments from time to time as shall be equitable,
to the end that all the Banks shall  share the  benefit of such  excess  payment
(net of any  expenses  which  may be  incurred  by such  Bank  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 Banks
or such other  amounts  relating to the Loans or  Commitments  of such Class and
Series  owing  to each of the  Banks.  To such  end  all the  Banks  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 Bank
shall obtain  payment of any  principal of or interest on any Loan made by it to
the Borrower under this Agreement or payment of any other amount




                                CREDIT AGREEMENT

<PAGE>


                                     - 57 -



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 Bank  shall  have  received  a greater
percentage  of the  principal of or interest on the Loans or such other  amounts
then due hereunder by the Borrower to such Bank than the percentage  received by
any other Banks, it shall promptly purchase from such other Banks participations
in (or, if and to the extent  specified by such Bank,  direct  interests in) the
Loans made by such other Banks (or in interest due thereon,  as the case may be)
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
Banks shall share the benefit of such excess  payment (net of any expenses which
may be incurred by such Bank 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 Banks or such other amounts  owing to each of the Banks.  To such
end all the Banks 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  Bank  so  purchasing  a
participation  (or  direct  interest)  in the Loans  made by other  Banks (or in
interest  due  thereon,  as the case may be) may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such  Bank were a direct  holder  of Loans in the  amount of such
participation.

                  (d)  Nothing  contained  herein  shall  require  any  Bank  to
exercise any such right or shall  affect the right of any Bank 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 Bank receives a secured claim in lieu of a
set-off to which this  Section  4.07  applies,  such Bank  shall,  to the extent
practicable,  exercise its rights in respect of such  secured  claim in a manner
consistent  with the rights of the Banks  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 Bank from time to
time such amounts as such Bank may determine to be




                                CREDIT AGREEMENT

<PAGE>


                                     - 58 -



necessary  to  compensate  it for any  costs  which  such  Bank  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 Bank 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) changes  the basis of  taxation of any amounts  payable to
         such Bank under this  Agreement  or its Notes in respect of any of such
         Loans  (other  than taxes  imposed on or  measured  by the  overall net
         income of such Bank or of its Applicable Lending Office for any of such
         Loans by the  jurisdiction in which such Bank has its principal  office
         or such Applicable Lending Office); or

             (ii) 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 Bank (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 Bank  (including the Commitments of
         such Bank hereunder); or

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

                  If any Bank requests compensation from the Borrower under this
Section  5.01(a),  the Borrower  may, by notice to such Bank (with a copy to the
Agent),  suspend  the  obligation  of such Bank 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 Bank
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 Bank 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 Bank  which  includes  Eurodollar
Loans or (ii) becomes  subject to  restrictions on the amount of such a category
of




                                CREDIT AGREEMENT

<PAGE>


                                     - 59 -



liabilities or assets which it may hold,  then, if such Bank so elects by notice
to the Borrower (with a copy to the Agent),  the obligation of such Bank 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 Bank from time to time on request such  amounts as such Bank may  determine
to be necessary to compensate  such Bank for any costs which it  determines  are
attributable to the maintenance by such Bank (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 Bank (or any  Applicable  Lending
Office) to a level below that which such Bank (or any Applicable Lending Office)
could have achieved but for such law, regulation,  interpretation,  directive or
request).

                  (d) Each Bank will notify the Borrower of any event  occurring
after the date of this  Agreement  that will entitle  such Bank 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 Bank obtains actual  knowledge  thereof;
PROVIDED,  however,  that if any Bank fails to give such  notice  within 60 days
after it  obtains  actual  knowledge  of such an event,  such Bank  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 Bank does give such  notice;  and  PROVIDED,  FURTHER,  that each Bank will
designate  a  different  Applicable  Lending  Office  for the Loans of such Bank
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 Bank,
be  disadvantageous to such Bank, except that such Bank shall have no obligation
to  designate  an  Applicable  Lending  Office  located in the United  States of
America.  Each Bank will furnish to the Borrower a certificate setting forth the
basis and amount of each request by such Bank




                                CREDIT AGREEMENT

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                                     - 60 -



for compensation under paragraph (a) or (c) of this Section 5.01. Determinations
and  allocations  by any Bank 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 Bank 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  Banks  or, if the  related  Loans are Term
         Loans,  the  Majority  Term  Loan  Banks  (determined,  solely  for the
         purposes  of this  Section  5.02(b),  as if no PAD  Loans  or PAD  Loan
         Commitments were outstanding) or, if the related Loans are PAD Loans of
         a  particular  Series,  Banks  holding  at least  60% of the  aggregate
         outstanding  principal amount of the PAD Loans of such Series 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 Banks of
         making or maintaining Eurodollar Loans for such Interest Period;

then the Agent shall give the  Borrower  and each of the Banks which are to make
or hold such Loans prompt notice thereof,  and so long as such condition remains
in effect, such Banks 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 Banks,
either prepay such Eurodollar  Loans or Convert such Eurodollar  Loans into Base
Rate Loans in accordance with Section 2.08 hereof.




                                CREDIT AGREEMENT

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                                     - 61 -




                  5.03 ILLEGALITY.  Notwithstanding  any other provision of this
Agreement,  in the event that it becomes unlawful for any Bank or its Applicable
Lending  Office to honor its  obligation  to make or maintain  Eurodollar  Loans
hereunder,  then such Bank shall  promptly  notify the Borrower  thereof (with a
copy to the Agent) and such Bank's obligation to make or Continue, or to Convert
Base Rate Loans into,  Eurodollar  Loans shall be  suspended  until such time as
such Bank 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
Bank 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 Bank'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 Bank may specify to the  Borrower  with a copy to the
Agent) and,  unless and until such Bank 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  Bank's  Eurodollar  Loans of any
         Class have been so Converted, all payments and prepayments of principal
         which would  otherwise  be applied to such Bank'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 Bank as Eurodollar  Loans shall be made or Converted and Continued
         instead  as Base Rate  Loans and all Base Rate Loans of such Bank which
         would otherwise be Converted into Eurodollar  Loans shall be made as or
         shall remain as Base Rate Loans.

If such Bank 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 Bank's Eurodollar Loans of any Class pursuant to this Section
5.04  no  longer  exist  (which  such  Bank  agrees  to do  promptly  upon  such
circumstances  ceasing to exist) at a time when  Eurodollar  Loans of such Class
held by other Banks are  outstanding,  such Bank'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 Banks and by such Bank are held pro rata (as to principal




                                CREDIT AGREEMENT

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                                     - 62 -



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 Bank,  upon the  request of such Bank  through  the Agent,  such
amount or  amounts as shall be  sufficient  (in the  reasonable  opinion of such
Bank) to compensate it for any loss,  cost or expense which such Bank determines
are attributable to:

                  (a)  any  payment,   prepayment   (including   any   mandatory
         prepayment)  or Conversion  of a Eurodollar  Loan made by such Bank 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 Bank 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.

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 Bank
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 Bank).






                                CREDIT AGREEMENT

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                                     - 63 -



                  Section 6.  CONDITIONS PRECEDENT.

                  6.01  EFFECTIVENESS.  The  effectiveness  of this Agreement is
subject to the  conditions  precedent  that,  on or prior to June 30, 1997,  the
Agent shall have received the following  documents (with  sufficient  copies for
each Bank), each of which shall be reasonably  satisfactory to the Agent 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 Loans  hereunder
         (and the Agent and each Bank 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,  (ii) copies of duly completed and executed  Uniform  Commercial
         Code financing  statements with respect to the Property  covered by the
         Security  Agreement,  for  filing,  appropriately  completed  and  duly
         executed  copies of Uniform  Commercial Code financing  statements,  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 Banks,  thereunder,  and (iii) the
         results of record searches,  by a Person  satisfactory to the Agent, of
         the Uniform Commercial Code filings which may have been filed with




                                CREDIT AGREEMENT

<PAGE>


                                     - 64 -



         respect to the Property of the Borrower  covered thereby and such other
         Persons or names as the Agent shall specify,  in the filing offices and
         other records in each of the jurisdictions  requested by the Agent, and
         of judgment and tax liens with respect to the Borrower.

                  (d) JCI/JNI SECURITY AGREEMENT. Amendment No. 1 to the JCI/JNI
         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
         (including,  without  limitation,  delivering to the Agent, for filing,
         appropriately  completed and duly executed copies of Uniform Commercial
         Code  financing  statements) as the Agent shall have requested in order
         to perfect  the  security  interests  created  pursuant  to the JCI/JNI
         Security  Agreement  (to the extent such  filings have not already been
         effected pursuant to the Existing Credit Agreement).

                  (e)  SUBSIDIARY  GUARANTEE.  Amendment No. 1 to the Subsidiary
         Guarantee,  substantially  in  the  form  of  Exhibit  B-2 hereto, duly
         executed by the Subsidiary Guarantors and the Agent.

                  (f)  REPAYMENT  OF  CERTAIN  AMOUNTS.  Evidence  that  (i) the
         accrued and unpaid  interest on, any "Loans" held by any Existing  Bank
         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 Banks shall have been
         paid in full,  (ii) all Warburg  Subordinated  Debt shall have been (or
         shall be  simultaneously)  paid in full (or arrangements for payment in
         full of the  Warburg  Subordinated  Indebtedness  within one day of the
         Effective  Date  satisfactory  to the Agent  shall  have been made) and
         (iii)  $90,000,000 in aggregate  principal  amount of the "Terms Loans"
         outstanding under the Existing Credit Agreement shall have been prepaid
         as of the Effective Date (and not less than $55,000,000 of the proceeds
         from the  Borrower's  initial  public equity  offering shall be used to
         make such prepayment).

                  (g)   APPLICATION  OF  IPO  PROCEEDS;   TOTAL  DEBT  RATIO.  A
         certificate of a Senior  Officer,  dated the Effective Date, (i) to the
         effect that the initial  public equity  offering by the Borrower  shall
         have been  consummated  and specifying the intended use by the Borrower
         of the net proceeds thereof (including, without limitation, the payment
         in full of the




                                CREDIT AGREEMENT

<PAGE>


                                     - 65 -



         Warburg  Subordinated Debt and the prepayment of Term Loans required by
         Section  6.01(f) hereof) and (ii) setting forth the Total Debt Ratio as
         at the Effective  Date  (calculated  as of the Effective  Date on a pro
         forma basis after giving effect to such initial public equity  offering
         and the application of the proceeds thereof to repay such  Indebtedness
         and the  aggregate  amount  of  Loans  to be made or  continued  on the
         Effective Date).

                  (h) OPINION OF SPECIAL NEW YORK  COUNSEL TO THE  OBLIGORS.  An
         opinion of Wachtell,  Lipton, Rosen & Katz, special New York counsel to
         certain of the Obligors, addressed to the Banks and the Agent and dated
         the Effective  Date, in form and  substance  satisfactory  to the Agent
         (and the Borrower hereby instructs such counsel to deliver such opinion
         to the Banks and the Agent).

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

                  (j) 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 Bank or  special
         New York counsel to Chase may reasonably request.

The  obligation  of any Bank to continue  any  "Revolving  Credit Loan" or "Term
Loan" under the  Existing  Credit  Agreement  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 Bank 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 Bank
agrees to return such "Notes" to the Borrower as soon as practicable.

                  6.02  INITIAL AND SUBSEQUENT LOANS.





                                CREDIT AGREEMENT

<PAGE>


                                     - 66 -



                  (a) The  obligation  of each Bank to make each Loan to be made
by it to the Borrower hereunder (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 and the making of any other
Loan on the Effective Date) is subject to the further conditions  precedent that
both  immediately  prior to such Loan 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 Loans 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).

                  (b) In addition,  the obligation of each Revolving Credit Bank
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  $10,000,000  (unless  the
proceeds of such Loans are to be, and are in fact,  used to make  repayments  of
Term Loans), the Agent shall have received a certificate of a Senior Officer (in
form and detail  satisfactory  to the Agent)  stating the Total Debt Ratio after
giving effect to the making of such Revolving  Credit Loans and annexing thereto
calculations of the Total Debt Ratio.

                  (c) In addition,  the obligation of each Revolving Credit Bank
to make each  Revolving  Credit Loan to be made by it to the Borrower  hereunder
(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 Banks (including, without limitation, any modification or amendment
to this Agreement or the waiver of any default  hereunder)  which action has the
effect of causing the 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 Banks or such conditions precedent would otherwise
be satisfied in the absence of such action by the Majority Banks.

                  (d) Each notice of borrowing by the Borrower  hereunder  shall
be deemed to constitute a  certification  to the effect set forth in clauses (i)
and (ii) of paragraph (a) above (both as of the date of such notice and,  unless
the Borrower otherwise




                                CREDIT AGREEMENT

<PAGE>


                                     - 67 -



notifies the Agent prior to the date of such  borrowing,  as of the date of such
borrowing).


                  Section 7.   REPRESENTATIONS  AND  WARRANTIES.   The  Borrower
represents and warrants to each of the Banks 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.  The  audited  combined  financial
statements of Journal  Register LLC and its Subsidiaries for the fiscal years of
Journal  Register  LLC ended on  December  31,  1995 and  December  31, 1996 are
complete  and correct and fairly  present the  combined  financial  condition of
Journal  Register  LLC  and  its  Subsidiaries  as at the  respective  dates  of
presentation  specified therein and the combined results of their operations for
the respective periods of presentation specified therein, all in accordance with
GAAP applied on a consistent basis.  Neither Journal Register LLC nor any of its
Subsidiaries  had on December  31,  1996 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 combined  balance sheet of Journal Register LLC
and its  Subsidiaries  as at said  date  included  in the  financial  statements
referred to in the first  sentence of this  Section 7.02 and except as set forth
in Schedule  II hereto.  Since  December  31,  1996,  there has been no material
adverse  change in the financial  condition,  business,  operations,  prospects,
assets,   liabilities  or   capitalization  of  Journal  Register  LLC  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




                                CREDIT AGREEMENT

<PAGE>


                                     - 68 -



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




                                CREDIT AGREEMENT

<PAGE>


                                     - 69 -



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.





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                                     - 70 -



                  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.

                  7.13 DISCLOSURE. 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 Bank in connection
with the  negotiation,  preparation  or delivery of this Agreement and the other
Transaction Documents or included therein or delivered pursuant thereto 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
Banks in connection with this Agreement and the other Transaction  Documents and
the  transactions  contemplated  hereby and thereby  will 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 Banks for use in  connection  with the
transactions contemplated hereby.

                  7.14 SECURITY DOCUMENTS.  On and after the Effective Date, the
JCI/JNI  Security  Agreement will create in favor of the Agent,  for the ratable
benefit  of the  Banks,  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 JCI/JNI




                                CREDIT AGREEMENT

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                                     - 71 -



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 Banks,  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:

                  (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,  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,  unreasonably
         small  capital to carry out its business as conducted or as proposed to
         be conducted; and





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                  (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.  None  of  the  Borrower  or  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: (i) Schedule VII hereto,
(ii) the  Letter  dated  June 16,  1992  from the  United  States  Environmental
Protection  Agency to New Haven  Register,  Inc.,  (iii) the documents  entitled
"Pre-Financing  Environmental  Risk  Assessment of Community  Newspapers,  Inc."
prepared  by  Pilko  &  Associates,   Inc.  ("PILKO")  dated  January  3,  1991;
"Environmental  Assessment  of the Register  Citizen,  Torrington,  Connecticut"
prepared  by  Pilko  dated  September  24,  1993;   "Underground   Storage  Tank
Investigation,  The Register Citizen, for Torrington,  Connecticut"  prepared by
Fuss & O'Neill,  Inc.  dated  September 28, 1993;  "Environmental  Assessment of
Journal Company,  Inc. and New Haven Acquisition  Corp." prepared by Pilko dated
September 11, 1993;  "Environmental Assessment of New Haven Register, New Haven,
Connecticut" prepared by Pilko dated October 12, 1993; "Environmental Assessment
of Composing Facility,  St. Louis,  Missouri prepared by Pilko dated October 12,
1993;  "Environmental  Assessment  of 15 Operating  Facilities  owned by Journal
Company,  Inc., Telephone Interviews  Concerning 4 Additional Sites" prepared by
Pilko  dated  December,  1993;  "Limited  Subsurface  Assessment  Report  of 207
Pocasset Street, Fall River,  Massachusetts" prepared by Cistar Associates, Inc.
dated July 21, 1993; "Phase I Environmental Site Assessment of Farmington Valley
Herald, Simsbury, Connecticut" prepared by Fuss




                                CREDIT AGREEMENT

<PAGE>


                                     - 73 -



& O'Neill, Inc. dated August 1994; and "Limited  Environmental  Investigation of
The Bristol Press, Bristol,  Connecticut" prepared by Environmental Risk Limited
dated July 1994, (iv) the NEN Acquisition  Environmental Reports and (v) the New
Britain  Acquisition   Environmental   Reports  (together,   the  "ENVIRONMENTAL
REPORTS"):

                  (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  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;





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<PAGE>


                                     - 74 -



                      (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.

                  (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




                                CREDIT AGREEMENT

<PAGE>


                                     - 75 -



         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 Banks.

                  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 is engaged in any business of any kind  whatsoever
on the date hereof.  None of the Inactive  Subsidiaries  of the Borrower 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  owns or possesses,  or has 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 76 -



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 MORTGAGE PROPERTIES.  The Mortgage Properties  identified
as being  owned  or  leased  by  Subsidiaries  of JNI and JCI are the only  real
property owned or leased by the Borrower or any of its  Subsidiaries  other than
(i) office or garage space and (ii) other premises leased by the Borrower or any
of its  Subsidiaries,  PROVIDED  that the  aggregate  annual rental for all such
other premises described in this clause (ii) does not exceed $1,000,000.

                  7.23 NOLS;  ETC.  As of  December  31,  1993 and after  giving
effect to the  Consolidation  and the  other  Transactions  contemplated  by the
Transaction  Documents,  the Borrower in good faith reasonably believes that JNI
and  JCI  and  their  respective  Subsidiaries  will  have  net  operating  loss
carryforwards  for federal tax reporting  purposes of not less than $260,000,000
in the  aggregate  unrestricted  by any provision of Section 382 of the Code and
interest  carryforwards  for  federal  tax  reporting  purposes of not less than
$19,000,000 in the aggregate.

                  7.24  CAPITALIZATION.

                  (a) 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 duly and validly 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 77 -



thereof is calculated with reference to the fair market value or equity value of
the Borrower or any of its Subsidiaries.

                  (b) As of the  Effective  Date,  the Borrower owns 100% of the
capital stock of each of JNI and JCI. All of the issued and outstanding  capital
stock  of each of JNI and JCI has been  validly  issued  and is  fully  paid and
non-assessable.


                  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 and all other amounts payable by the Borrower hereunder:

                  8.01  FINANCIAL   STATEMENTS;   CONTINUING   DISCLOSURE.   The
Borrower  shall  deliver  to  the  Agent (with sufficient copies for each of the
Banks):

                  (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,  retained earnings 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




                                CREDIT AGREEMENT

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                                     - 78 -



         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;

                  (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




                                CREDIT AGREEMENT

<PAGE>


                                     - 79 -



                  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




                                CREDIT AGREEMENT

<PAGE>


                                     - 80 -



                  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 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 (a) 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 (b) 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 81 -




                  (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
         Bank or the Agent may reasonably request.

The Borrower will furnish to the Agent (with  sufficient  copies for each of the
Banks), each time it or they furnish 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(c)(ii) and (iii), 8.06(h) and (i), 8.07(e) and (f), 8.08(e), 8.09,
8.10,  8.11,  8.12,  8.13,  8.14 and 8.20 hereof as of the end of the respective
fiscal quarter or fiscal year.

                  8.02 LITIGATION.  The Borrower will promptly give to each Bank
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;





                                CREDIT AGREEMENT

<PAGE>


                                     - 82 -



                  (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 Bank 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 Bank or the Agent, as the case may be; and

                  (f) hold a  meeting  at least  annually  with the Banks (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 Banks 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,




                                CREDIT AGREEMENT

<PAGE>


                                     - 83 -



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 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 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  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 Banks 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  other than an  Inactive
         Subsidiary may be merged or consolidated with or into (A) the Borrower,
         if the Borrower  party to such  transaction  shall be the continuing or
         surviving  corporation  or (B) 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,




                                CREDIT AGREEMENT

<PAGE>


                                     - 84 -



         the  Wholly  Owned  Subsidiary  shall be the  continuing  or  surviving
         corporation 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  corporation
         and (y) any merger involving JNI and JCI shall comply with clause (iii)
         below;

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

            (iii) JNI and JCI may merge with each other;  PROVIDED  that (x) the
         continuing or surviving corporation is organized under the laws of, and
         has its chief  executive  office  in, a state of the  United  States of
         America,  (y) no Default shall have occurred and be continuing or would
         occur after giving effect to such merger and (z) after giving effect to
         such merger,  the  continuing  or surviving  corporation  will have net
         operating loss  carryforwards for federal tax reporting  purposes in an
         aggregate  amount  of not less than an  amount  equal to the  excess of
         $260,000,000  OVER the amount of any net operating  loss  carryforwards
         utilized  after  December  31, 1993  against  income of JNI and JCI and
         their respective  Subsidiaries and will have interest carryforwards for
         federal tax reporting  purposes in an aggregate amount of not less than
         an amount  equal to the  excess of  $19,000,000  OVER the amount of any
         interest  carryforwards utilized after December 31, 1993 against income
         of JNI and JCI and their respective Subsidiaries; and

                  (iv)  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;





                                CREDIT AGREEMENT

<PAGE>


                                     - 85 -



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

              (iv)  Acquisitions  by the  Borrower of  Newspapers  in the United
         States  (PROVIDED  that (w) each  such  Acquisition  shall be  financed
         solely with equity securities of the Borrower and/or the proceeds of an
         issuance or sale of equity  securities by the Borrower  and/or proceeds
         of Revolving Credit Loans and/or  Permitted  Additional Debt and/or Net
         Proceeds from any  Disposition  and/or the cumulative  Excess Cash Flow
         that remains  after the Borrower has performed  its  obligations  under
         Section  2.09(d)  hereof  and after  giving  effect  to any  Restricted
         Payments  made  as  permitted  by  Section  8.09(a)   hereof,   (x)  no
         Acquisition  of any  Newspaper may be made pursuant to this clause (iv)
         if,  after  giving  effect  thereto,  cash  flow  attributable  to such
         Newspaper's   commercial   printing   business,   if  any,  would  have
         contributed  more  than  10% of  Cash  Flow  of the  Borrower  and  its
         Subsidiaries and the  Newspaper(s) to be Acquired  (calculated on a pro
         forma basis) 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) prior to
         such  Acquisition,  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 Section  8.05 and  Sections  8.07,
         8.11,   8.12,  8.13  and  8.14  hereof  after  giving  effect  to  such
         Acquisition);

                  (v)      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; and

                  (vi)     the Borrower or any its Subsidiaries may acquire  all
         of  the  capital stock or other ownership interests of INS from Warburg
         and/or Warburg Affiliates.

                  (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;





                                CREDIT AGREEMENT

<PAGE>


                                     - 86 -



             (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 the aggregate fair market value of the assets so Disposed of
         by the Borrower and its Subsidiaries  during any calendar year does not
         exceed  $5,000,000  or such higher amount as may be consented to by the
         Majority Banks;

             (iv) assets of the Borrower or any of its  Subsidiaries  consisting
         of cash, Cash  Equivalents and  Inter-company  Notes (as defined in the
         JCI/JNI 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; and

                  (vi) the Borrower and its  Subsidiaries  may Dispose of all or
         any  part  of the  assets  heretofore  acquired  as  part  of  the  NEN
         Acquisition  and identified on Annex 3 hereto for cash in an amount not
         less than their fair market value so long as the aggregate  fair market
         value of the assets so Disposed of by the Borrower and its Subsidiaries
         does not exceed $1,775,000.

                  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 including, without
         limitation,  such Liens securing  Indebtedness  to any Bank incurred as
         permitted by Section 8.07(e) hereof;

                  (b) Liens on assets of its  Subsidiaries  existing on the date
         hereof and listed in  Schedule V hereto  (except  that  nothing  herein
         shall limit or otherwise  affect the  obligation of the Borrower  under
         Section  8.22(a) hereof to deliver Title Policies or Title  Commitments
         containing only




                                CREDIT AGREEMENT

<PAGE>


                                     - 87 -



         such exceptions and such  affirmative  coverage and endorsements as are
         approved or required by the Majority Banks under said Section 8.22(a));

                  (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 Mortgage Properties) 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  $4,000,000  (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;




                                CREDIT AGREEMENT

<PAGE>


                                     - 88 -




                  (i)   additional   Liens  (except  in  the  case  of  Mortgage
         Properties) securing  Indebtedness or other obligations of the Borrower
         or  any  of its  Subsidiaries  in an  aggregate  amount  not  exceeding
         $400,000  (as to the  Borrower  and its  Subsidiaries)  at any one time
         outstanding;

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

                  (k)  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  and,  until  the  day after the Effective Date, the  Warburg
         Subordinated Debt;

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

                  (d) income taxes  payable,  unearned  circulation  revenue and
         liabilities  under  Plans,  to the  extent  the same may be  treated as
         accrued  expenses  under  GAAP,  and taxes  paid or  payable in cash in
         respect of income or  activities  earned or  conducted  during  periods
         prior to December 31, 1994;

                  (e) Indebtedness ("PERMITTED ADDITIONAL DEBT") of the Borrower
         to one or  more  of the  Banks  (other  than  Indebtedness  under  this
         Agreement) and/or to any other Person in an aggregate principal or face
         amount not  exceeding (as to the  Borrower),  on or after the Effective
         Date an amount equal to  $125,000,000  (MINUS the sum of the  aggregate
         outstanding  principal  amount  of the  PAD  Loans  (excluding  the NEN
         Acquisition Loans and New Britain Acquisition Loans) PLUS the aggregate
         unused  amount of the PAD  Commitments  then in effect) at any one time
         outstanding, PROVIDED that: (i) if the proceeds (or any part of the




                                CREDIT AGREEMENT

<PAGE>


                                     - 89 -



         proceeds)  of such  Indebtedness  are to be used to  finance  Permitted
         Acquisitions,  the Borrower shall not, except upon the  acceleration of
         such  Indebtedness   following  an  event  of  default,   agree  or  be
         contractually obligated to repay more than 6% of the original principal
         amount of such  Indebtedness in the first 12 month period following the
         incurrence of such Indebtedness, more than 8% of the original principal
         amount of such Indebtedness in the second 12 month period following the
         incurrence  of  such  Indebtedness,  more  than  10%  of  the  original
         principal  amount of such  Indebtedness  in the  third 12 month  period
         following  the  incurrence of such  Indebtedness,  more than 12% of the
         original  principal amount of such  Indebtedness in the fourth 12 month
         period following the incurrence of such Indebtedness,  more than 14% of
         the  original  principal  amount of such  Indebtedness  in the fifth 12
         month period following the incurrence of such  Indebtedness,  more than
         16% of the original  principal amount of such Indebtedness in the sixth
         12 month period  following the  incurrence of such  Indebtedness,  more
         than 17% of the original  principal amount of such  Indebtedness in the
         seventh 12 month period  following the incurrence of such  Indebtedness
         or more than 17% of the original  principal amount of such Indebtedness
         in the  eighth  12  month  period  following  the  incurrence  of  such
         Indebtedness,  except that the Borrower  may agree or be  contractually
         obligated  to repay  all or any part of such  Indebtedness  in a single
         payment, or pursuant to scheduled payments,  on or after June 30, 2004;
         (ii)  both  immediately  prior to,  and after  giving  effect  to,  the
         incurrence of such Indebtedness,  no Default shall have occurred and be
         continuing;  (iii)  such  Indebtedness  is  incurred  pursuant  to  and
         governed  by  agreements  and  instruments  containing  such  terms and
         conditions as are satisfactory to the Majority Banks (unless such terms
         and conditions are no less favorable to the Borrower than those of this
         Agreement  and unless this  Agreement  permits the Borrower to agree to
         different  terms  and  conditions);  and (iv) if such  Indebtedness  is
         provided  by one or  more  of the  Lenders,  such  Indebtedness  may be
         guaranteed  by  the  Borrower's   Subsidiaries   under  the  Subsidiary
         Guarantee and its obligations in respect of such  Indebtedness and such
         Subsidiaries'  obligations under the Subsidiary Guarantee in respect of
         such   Indebtedness   may  be  secured  PARI  PASSU  with  the  Secured
         Obligations under and as defined in each of the Security Documents;

                  (f)      Indebtedness of  the Borrower  and  its  Subsidiaries
         (other than Indebtedness described in clauses (a) through (e) above) in
         an aggregate principal or face amount not




                                CREDIT AGREEMENT

<PAGE>


                                     - 90 -



         exceeding $25,000,000 (as to the Borrower and its  Subsidiaries) at any
         one time outstanding;

                  (g) Subordinated  Debt of the Borrower,  PROVIDED that (i) the
         Net Proceeds of such Subordinated Debt are applied to the prepayment of
         the Loans to the extent  required  by Section  2.09(e)  hereof and (ii)
         after giving effect to the incurrence of such Subordinated Debt and the
         application of proceeds thereof,  no Default shall have occurred and be
         continuing; and

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

                  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) 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 $2,000,000 (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
               in an amount not  exceeding in any fiscal year of the Borrower an
               amount equal to 50% of the cumulative Excess




                                CREDIT AGREEMENT

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                                     - 91 -



               Cash Flow  (commencing  with the fiscal year ending  December 31,
               1997) that remains after giving effect to any  Acquisitions  made
               as permitted by Section  8.05(b)(iv)  hereof and after  deducting
               any cash  dividends  theretofore  made as  permitted  under  this
               clause (c),  PROVIDED that no such dividend  shall be made on any
               date if (x) a Default has occurred and is continuing on such date
               (or would occur  after  giving  effect  thereto) or (y) the Total
               Debt Ratio on such date is equal to or greater  than 4.0 to 1 (or
               would be equal to or greater  than 4.0 to 1 after  giving  effect
               thereto);

                    (b)  additional  cash  dividends paid by the Borrower on its
               common stock in an amount not exceeding  $2,000,000 in any fiscal
               year of the Borrower;

                    (c)  repurchases  of common stock of the Borrower or options
               thereto  from any  management  official  upon his or her death or
               termination of employment for cash or promissory  notes,  so long
               as the aggregate amount paid in cash (i) for such common stock or
               options or (ii) in respect of such promissory notes in any fiscal
               year of the Borrower shall not exceed $5,000,000; and

                    (d) the payment in full of the Warburg  Subordinated Debt as
               contemplated by Section 6.01(f)(iii) hereof.

                  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
                                    ----               ------

                                    1997             $125,000,000
                                    1998             $140,000,000
                                    1999             $155,000,000
                                    2000             $170,000,000
                                    2001             $190,000,000
                                    2002             $210,000,000

PROVIDED  that (x) to the extent the Borrower or any of its  Subsidiaries  shall
sell or otherwise dispose of any capital asset




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                                     - 92 -



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) and (c) hereof,  apply (or commit to apply) the
proceeds thereof within 180 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 the foregoing, the
Borrower and its Subsidiaries may make Capital Expenditures of up to $20,000,000
(as to the Borrower and its Subsidiaries) during any fiscal year of the Borrower
and (z) in addition to the foregoing, the Borrower and its Subsidiaries may make
Capital  Expenditures  in  respect  of a  printing  facility  in the area in and
surrounding Philadelphia,  Pennsylvania of up to $25,000,000 (as to the Borrower
and  its   Subsidiaries)   (it  being  understood  that  the  Borrower  and  its
Subsidiaries may make Capital  Expenditures in respect of such printing facility
in excess of $25,000,000 to the extent permitted above).

                  8.11 TOTAL DEBT  RATIO.  The  Borrower  will not,  at any time
during  any period  set forth  below,  permit the Total Debt Ratio to exceed the
ratio set forth opposite such period:

                  PERIOD                                                 RATIO
                  ------                                                 -----

         From and including December 31, 1996
         through and including December 30, 1997                       5.50 to 1

         From and including December 31, 1997
         through and including December 30, 1998                       5.50 to 1

         From and including December 31, 1998
         through and including December 30, 1999                       5.00 to 1

         From and including December 31, 1999
         through and including December 30, 2000                       4.50 to 1

         From and including December 31, 2000
         and at all times thereafter                                   4.00 to 1

                  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.





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                                     - 93 -



                  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  and  proprietary   information  data  bases  in  connection
therewith,  commercial  printing  activities 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;  (b) transfer, sell, lease, assign or otherwise Dispose of any assets
to an  Affiliate;  (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  (including,  without
limitation, Guarantees and assumptions of obligations of an Affiliate); PROVIDED
that (i) any Affiliate 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, (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,  and (iii) the Borrower or any its
Subsidiaries  may acquire all of the capital stock or other ownership  interests
of INS from Warburg and/or Warburg Affiliates.

                  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.




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                                     - 94 -




                  8.18  AMENDMENT OF CERTAIN  DOCUMENTS.  The Borrower will not,
without the prior  written  consent of the  Majority  Banks,  amend or otherwise
modify,  or  consent to any  amendment  or other  modification  of, or waive any
provision of any of the  following  agreements  to which it is a party:  (a) its
certificate of  incorporation  or by-laws (or  equivalent  documents) or (b) any
agreement, instrument or other document evidencing or governing any Subordinated
Debt of the Borrower.

                  8.19 USE OF PROCEEDS.  The Borrower  will use (a) the proceeds
of the Revolving Credit Loans solely (i) 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,  (ii) for
extensions of credit to any of its Subsidiaries  and (iii) to finance  Permitted
Acquisitions  and (b) the  proceeds  of each  Series of PAD Loans other than NEN
Acquisition  Loans and New Britain  Acquisition  Loans for any permitted purpose
under this Agreement except as may be otherwise agreed between the Banks holding
such PAD  Loans and the  Borrower.  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.  From and after Effective Date,
the Borrower and/or its Subsidiaries will have in place and thereafter  maintain
in full force and effect one or more Interest Rate  Protection  Agreements (in a
manner  reasonably  satisfactory  to the Majority Banks) with one or more of the
Banks (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 for consecutive  periods (each of which
shall be of at least two years duration) as to a principal amount at least equal
to 50% of the aggregate principal amount of the Loans scheduled to be




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                                     - 95 -



outstanding during the respective period shall not exceed 10%; PROVIDED that the
Borrower's  obligations  under this  Section 8.21 shall not apply for any period
during which the Total Debt Ratio is less than 3.0 to 1 (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  MORTGAGES.  Not  later  than 45 days  after the date the
Majority Banks  (through the Agent) give notice (the  "MORTGAGE  NOTICE") to the
Borrower  requesting the granting of the Mortgages,  the Borrower will (i) cause
each of the Mortgagors to duly execute,  acknowledge  and deliver the applicable
Mortgages  to  the  Agent  (which  Mortgages  shall  include  metes  and  bounds
descriptions of the respective Mortgage Properties),  (ii) concurrently with the
delivery of the Mortgages to the Agent, cause the Subsidiary Guarantors to enter
into a Supplement to the Subsidiary  Guarantee  with the Agent in  substantially
the form of Exhibit B-1 to the 1994 Credit  Agreement (with such changes thereto
as the  Agent  shall  reasonably  request),  and  (iii)  furnish  or cause to be
furnished to the Agent:

                  (a)  policies  of  mortgage   title   insurance   (the  "TITLE
         POLICIES")  in  ALTA  Loan  Policy  -  1970  Form  (rev.  10/17/70  and
         10/17/84),  or equivalent  policies,  issued by the Title Insurer in an
         amount, as to each Mortgage Property,  equal to 125% of the fair market
         value of such Mortgage  Property as established by the  appraisals,  if
         any,  referred to in Section 8.22(g) hereof,  insuring the Mortgages as
         valid first liens on the respective  Mortgage  Properties,  showing fee
         simple  title  to the  Mortgage  Properties  vested  in the  applicable
         Mortgagor  subject  only to such  exceptions  as are set  forth  in the
         Approved Title Reports and such additional exceptions which arose after
         the date of such reports as the Majority Banks in the exercise of their
         reasonable  discretion  may approve,  and containing  such  affirmative
         coverage and endorsements as the Majority Banks may reasonably require.
         The Title Policies shall contain tie-in  endorsements  satisfactory  to
         the Agent and the Majority  Banks,  aggregating the insurance under all
         Title Policies,  so that the amount of insurance  afforded by the Title
         Policy covering each Mortgage Property is equal to the aggregate amount
         of the  insurance  under  the  Title  Policies  covering  all  Mortgage
         Properties.  In lieu of the Title Policies,  the Borrower may cause the
         Subsidiary Guarantors to deliver to the Agent, within the 45-day period
         specified above, binding, irrevocable commitments by the Title Insurer,
         dated the date of delivery of the Mortgages to the Agent,  to issue the
         Title Policies to the Agent as of such date in




                                CREDIT AGREEMENT

<PAGE>


                                     - 96 -



         compliance  with the foregoing  requirements  of this Section  8.22(a),
         which  commitments (the "TITLE  COMMITMENTS")  shall contain no printed
         exceptions  in  Schedule  B thereto  (including  any  exceptions  as to
         defects, liens, encumbrances,  adverse claims or other matters, if any,
         created,  first appearing in the public records or attaching subsequent
         to the  date  thereof  but  prior  to the  date of  recordation  of the
         Mortgages)  and shall  otherwise  be in form and  substance  reasonably
         satisfactory  to the Agent and the Majority  Banks;  PROVIDED  that the
         Borrower  shall  furnish or cause to be furnished to the Agent,  within
         such 45-day period, evidence of the payment in full of all premiums and
         shall  deliver the Title  Policies or cause the same to be delivered to
         the Agent  within 30 days after the earlier of (i) the  delivery of the
         Title  Commitments to the Agent,  or (ii) the expiration of such 45-day
         period.  Concurrently  with the  delivery of the Title  Policies or the
         Title Commitments, as the case may be, the Borrower will furnish copies
         of (i) all instruments of record and (ii) all other documents specified
         in the  Title  Commitments  or  Title  Policies,  as the  case  may be,
         encumbering or otherwise affecting the Mortgage Properties;

                  (b) the Surveys, redated to a date not more than 90 days prior
         to the date of the Mortgage  Notice,  together  with such  certificates
         since such  redating as the Title Insurer may require in order to issue
         the Title Policies and Title Commitments as hereinabove provided;

                  (c)  opinions  (dated  the date on  which  the  Mortgages  are
         delivered to the Agent) of local  counsel to be issued to the Agent and
         the Banks to the  effect set forth in  Exhibit  G-1 to the 1994  Credit
         Agreement  (with such  changes  thereto as the Agent  shall  reasonably
         request)  and also to the  effect  that the  Mortgages  have  been duly
         authorized, executed and delivered by the respective Mortgagors and, in
         the case of the Mortgages  covering the Mortgage  Property in the State
         of Missouri,  by the trustee  designated  therein  (such  trustee to be
         specified  by the Borrower  with the  approval of the Agent),  and that
         such trustee has full power and authority to serve in such capacity and
         to exercise all rights and powers under such Mortgage;

                  (d)  evidence  satisfactory  to  the  Agent  of  (i)  the  due
         recordation  of  the  Mortgages  and  filing  of  financing  statements
         reasonably  satisfactory  to the Agent in  connection  therewith in the
         appropriate  recording  and filing  offices and (ii) the payment of all
         filing and  recording  fees and  expenses,  of any  mortgage,  mortgage
         recording,




                                CREDIT AGREEMENT

<PAGE>


                                     - 97 -



         intangibles  or other tax payable in  connection  with the Mortgages or
         the  obligations  secured  thereby,  and of the  premiums for the Title
         Policies and all other charges in connection therewith;

                  (e) such affidavits,  releases,  indemnities,  undertakings or
         other  documents as the Title Insurer may require in order to issue the
         Title Policies as hereinabove provided;

                  (f) such direct access reinsurance  agreements with such other
         title insurance companies on such forms and in such amounts, all as the
         Majority Banks shall reasonably require;

                  (g) if so requested by the Majority Banks (through the Agent),
         an  appraisal  of  the  Mortgage  Properties,  in  form  and  substance
         satisfactory  to the  Majority  Banks,  complying  with  the  Appraisal
         Policies and Review Procedures of the Board of Governors of the Federal
         Reserve System (12 CFR Part 323);

                  (h)  the   hazard,   flood   and   other   insurance  policies
         required by the Mortgages; and

                  (i) if so requested by the Majority Banks (through the Agent),
         an  environmental  survey and assessment  covering each of the Mortgage
         Properties.

If any  Subsidiary  Guarantor or the Borrower  shall  acquire any real  property
other  than  the  Mortgage  Properties  after  the date of this  Agreement,  the
Borrower shall give notice thereof to the Agent,  and the Majority Banks may, by
notice to the  Borrower  (through  the Agent)  require the  Borrower to grant or
cause such  Subsidiary  Guarantor  to grant a mortgage on such real  property (a
"SUPPLEMENTAL  MORTGAGE") to the Agent, in such form as the Majority Banks shall
reasonably  require,  as additional  security for the obligations secured by the
Mortgages, in which event the Borrower,  within 45 days after the giving of such
notice to it, shall grant,  or cause such  Subsidiary  Guarantor to grant,  such
Supplemental  Mortgage to the Agent  together  with such other  documents of the
types  specified above in this Section 8.22 as the Majority Banks may reasonably
require.

                  8.23 ENVIRONMENTAL  MATTERS. The Borrower will, and will cause
each  of  its   Subsidiaries  to,  comply  in  all  material  respect  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




                                CREDIT AGREEMENT

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                                     - 98 -



authorizations  necessary for its operations and maintain such authorizations in
full force and effect.

                  8.24 CERTAIN CORPORATE ACTIONS.  Except as expressly permitted
by this  Agreement,  the Borrower will not, nor will the Borrower  permit any of
its  Subsidiaries  to,  enter into any  transaction  (other than the  Borrower's
initial public  offering,  the merger of Journal  Register LLC with and into the
Borrower,  the Management  Bonus Plan or the Stock  Incentive  Plan) or take any
action  that  would  result in an  "ownership  change"  of the  Borrower  or any
Subsidiary as described in Section 382 of the Code.

                  8.25  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 (i)
each of its Subsidiaries at all times 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) and (ii) each
of its  Subsidiaries is and becomes a party to the Subsidiary  Guarantee and the
JCI/JNI  Security  Agreement,  PROVIDED  that,  in the  event of any  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  Banks,  shall be  granted  a first  prior
perfected  security  interest in all of the equity interests of such partnership
or  limited  liability  company  to secure  the  obligations  owing to the Banks
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).  In the event that any such  additional  shares of stock or other
equity interests shall be issued by any Subsidiary of the Borrower, the Borrower
agrees  forthwith  to, and to cause its  Subsidiaries  to,  deliver to the Agent
pursuant to the Security  Documents the  certificates  (if any)  evidencing such
shares of stock or other equity  interests,  accompanied by undated stock 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  Security
Documents.

                  (b)  The  Borrower will  not permit any of its Subsidiaries to
enter into, after the date of this Agreement, any




                                CREDIT AGREEMENT

<PAGE>


                                     - 99 -



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.

                  8.26 INACTIVE SUBSIDIARIES.  Anything in this Agreement to the
contrary  notwithstanding,  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. Anything in this Agreement to the
contrary  notwithstanding,  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.


                  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 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 $2,000,000 or more, or in the payment when due of any
               amount  under  any  Interest  Rate  Protection  Agreement  for  a
               notional  principal  amount  exceeding  $1,000,000;  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




                                CREDIT AGREEMENT

<PAGE>


                                     - 100 -



               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 Bank 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 8.22
               (inclusive) 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
               Bank (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




                                CREDIT AGREEMENT

<PAGE>


                                     - 101 -



               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 $2,000,000  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 Banks 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
               Bank,  any of the Liens created by the Security  Documents or, if
               the same have  been  executed  and  delivered  by the  individual
               parties thereto and be in effect, any of the Mortgages, shall not
               constitute a valid and perfected Lien on the collateral described
               therein (to




                                CREDIT AGREEMENT

<PAGE>


                                     - 102 -



               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 (in the case of any of the Mortgages,  if the
               same have been executed and delivered by the  individual  parties
               thereto)  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 if the
               Mortgagor  under any  Mortgage  covering  any  Mortgage  Property
               located in Missouri  (if the Mortgage  relating to such  Mortgage
               Property shall have been executed and delivered by the individual
               parties thereto and be in effect) shall give notice to any of the
               Agent and the Banks terminating the operation of such Mortgage as
               security  for  Loans  made  hereunder  or  obligations   incurred
               hereunder after the date on which such notice is given; 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  Warburg and the Warburg  Affiliates)
                  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  Warburg  and/or  the  Warburg
                  Affiliates)  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;




                                CREDIT AGREEMENT

<PAGE>


                                     - 103 -




                  (l) any Federal, state, local or foreign court or governmental
         agency,  authority,  instrumentality or regulatory body takes any final
         and  nonappealable  action which has the effect of reducing (i) the net
         operating loss  carryforwards  referred to in Section 7.24 hereof to an
         amount  below an amount  (the  "ADJUSTED  NOL")  equal to the excess of
         $260,000,000  over the amount of any net operating  loss  carryforwards
         utilized  after  December  31, 1993  against  income of JNI and JCI and
         their respective Subsidiaries, or the effect of materially limiting the
         use of the Adjusted NOL or (ii) the interest  carryforwards referred to
         in  Section  7.24  hereof  below  an  amount  (the  "ADJUSTED  INTEREST
         CARRYFORWARD")  equal to the excess of  $19,000,000  over the amount of
         any interest  carryforwards  utilized  after  December 31, 1993 against
         income of JNI and JCI and their respective Subsidiaries,  or the effect
         of materially  limiting the use of the Adjusted Interest  Carryforward;
         or

                  (n) there shall have been asserted against the Borrower or any
         of its Subsidiaries an Environmental Claim that, in the judgment of the
         Majority Banks 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  Banks 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  Banks shall,  by notice to the Borrower
declare the principal  amount then  outstanding of, and the accrued interest on,
the Loans 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 and all other  amounts
payable  by the  Borrower  hereunder  and under the  Notes  (including,  without
limitation, any amounts




                                CREDIT AGREEMENT

<PAGE>


                                     - 104 -



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 Bank 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  Bank;  (b)  shall  not be
responsible  to the  Banks  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). No Managing Agent, Co-Agent
or Lead Manager referred to on the cover page or the signature pages of




                                CREDIT AGREEMENT

<PAGE>


                                     - 105 -



this Agreement shall have any rights or obligations  under this Agreement except
in its capacity as a "Bank" hereunder.

                  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 Banks or, if provided herein,  in accordance
with the instructions given by the Majority Revolving Credit Banks, the Majority
Term Loan Banks or all of the Banks as is  required  in such  circumstance,  and
such  instructions of such Banks and any action taken or failure to act pursuant
thereto shall be binding on all of the Banks.

                  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 Bank 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 Banks.  The Agent shall  (subject to Section  10.07  hereof) take
such action with  respect to such  Default as shall be directed by the  Majority
Banks or,  if  provided  herein,  the  Majority  Revolving  Credit  Banks or the
Majority Term Loan Banks,  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 Banks 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 Banks,
the Majority  Revolving Credit Banks, the Majority Term Loan Banks or all of the
Banks.

                  10.04 RIGHTS AS A BANK.  With respect to its  Commitments  and
the Loans made by it, Chase (and any successor  acting as Agent) in its capacity
as a Bank hereunder shall have the same rights and powers hereunder as any other
Bank and may  exercise  the same as though it were not acting as the Agent,  and
the term  "Bank" or "Banks"  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 Bank)
accept deposits




                                CREDIT AGREEMENT

<PAGE>


                                     - 106 -



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 Banks.

                  10.05 INDEMNIFICATION.  The Banks 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 Banks (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 Bank)  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 Bank
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 BANKS. Each Bank agrees
that it has,  independently and without reliance on the Agent or any other Bank,
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 Bank, 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 107 -



documents and information expressly required to be furnished to the Banks 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 Banks  pursuant to the terms hereof,  the Agent shall not
have any duty or  responsibility  to  provide  any Bank 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 Banks 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 Banks and the Borrower,  and
the  Agent may be  removed  at any time with or  without  cause by the  Majority
Banks.  Upon any such resignation or removal,  the Majority Banks shall have the
right to appoint a successor  Agent.  If no  successor  Agent shall have been so
appointed by the Majority Banks and shall have accepted such appointment  within
30 days  after the  retiring  Agent's  giving of  notice of  resignation  or the
Majority Banks' removal of the retiring  Agent,  then the retiring Agent may, on
behalf of the Banks,  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




                                CREDIT AGREEMENT

<PAGE>


                                     - 108 -



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 Required Lenders
(but not otherwise), consent to any modification, supplement or waiver under any
of the Credit Documents or agree to additional  obligations being secured by the
Collateral  under and as defined in the relevant  Security  Document if the Lien
for such  additional  obligations  shall be  junior  to the Lien in favor of the
other obligations secured by the relevant Security Document (except that no such
consent shall be required for Liens securing Permitted  Additional Debt incurred
as permitted by Section  8.07(e) hereof if such Liens may be PARI PASSU with the
Liens in favor of the Agent for the  benefit of the Banks as  permitted  by said
Section 8.07(e)),  PROVIDED that,  without the prior consent of each Lender, the
Agent shall not (except as expressly provided herein or in the Credit Documents)
(a) release any  collateral  or  otherwise  terminate  any Lien under any Credit
Document  providing for collateral  security,  or agree to any other  additional
obligations  being  secured by such  collateral  security,  except  that no such
consent shall be required,  and the Agent is hereby  authorized,  to release any
Lien  covering  Property  that  is the  subject  of a  Disposition  of  Property
permitted  hereby  or by any of the  other  Credit  Documents  or to  which  the
Required  Lenders have  consented or (b) release the Borrower or any  Subsidiary
Guarantor from its obligations  under the Credit  Documents  except that no such
consent shall be required,  and the Agent is hereby  authorized,  to release any
Subsidiary  Guarantor  from  its  obligations  under  the  Credit  Documents  in
connection with the Disposition by the Borrower (or any of its  Subsidiaries) of
all of the capital stock of such Subsidiary Guarantor, if owned by the Borrower,
or the Disposition by such  Subsidiary  Guarantor of all of the Property of such
Subsidiary Guarantor, in either case, as permitted hereby or by any of the other
Credit Documents or with respect to which the Required Lenders have consented.


                  Section 11.  MISCELLANEOUS.

                  11.01 WAIVER.  No failure on the part of the Agent or any Bank
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,




                                CREDIT AGREEMENT

<PAGE>


                                     - 109 -



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 Banks,  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 Banks 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 Banks
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; (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




                                CREDIT AGREEMENT

<PAGE>


                                     - 110 -



any filing,  registration,  recording or  perfection  of any  security  interest
contemplated by any Credit  Document or any other document  referred to therein;
and (d) all costs,  expenses  and other  charges  in respect of title  insurance
procured with respect to the Liens created pursuant to the Mortgages.

                  The Borrower  hereby  agrees to  indemnify  the Agent and each
Bank 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 Bank,  whether  or not the Agent or any Bank 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 Bank from, and hold the Agent and
each Bank harmless against, any losses, liabilities, claims, damages or expenses
described  in the  preceding  sentence  (including  any Lien filed  against  any
Mortgage  Property or any part of the Property  covered  thereby  thereunder  in
favor of any governmental  entity,  but 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 Bank  shall be in
possession  of any such site or facility  following the exercise by the Agent or
any  Bank of any of its  rights  and  remedies  hereunder  or  under  any of the
Security Documents.





                                CREDIT AGREEMENT

<PAGE>


                                     - 111 -



                  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  Banks,  or by the Borrower and the Agent acting with
the written consent of the Majority  Banks,  and any provision of this Agreement
or any of the other Credit  Documents may be waived by the Majority  Banks or by
the Agent acting with the consent of the Majority  Banks;  PROVIDED that: (i) no
amendment,  modification  or waiver  shall:  (a) increase or extend the term, or
extend the time or waive any requirement  for the reduction or  termination,  of
the  Commitments of a Bank without the consent of such Bank, (b) extend the date
fixed for the scheduled  payment of principal of or interest on any Loan held by
any Bank or any fee or waive any Event of Default arising by reason of a failure
to pay any such  principal  or interest or fee without the consent of such Bank,
(c) reduce the amount of any payment of  principal  thereof or the rate at which
interest is payable thereon or any fee is payable  hereunder without the consent
of such Bank,  (d) alter the terms of this Section  11.04 without the consent of
all of the Banks,  or (e) amend the  definition  of the term  "Majority  Banks",
"Majority  Revolving  Credit  Banks",  "Majority  Term Loan Banks",  "Lender" or
"Required  Lenders",  or modify in any other manner the number or  percentage of
the Banks required to make any  determinations  or waive any rights hereunder or
to modify any  provision  hereof or thereof  without  the  consent of all of the
Banks and any amendment,  modification  or waiver of the definition of the terms
"Lender"  and  "Required  Lenders"  or  other  modification  of  the  number  or
percentage of the Lenders required to make any  determinations to be made by any
or all of the Lenders or waive any rights in favor of the  Lenders or  modifying
any provision thereof shall also require the consent of all of the Lenders; (ii)
any amendment,  modification  or waiver of (a) any of the  conditions  precedent
specified in Section 6.02 hereof with respect to the making of Revolving  Credit
Loans shall require the consent of the Majority  Revolving  Credit Banks and (b)
any of the  conditions  precedent to the making of any Series of PAD Loans other
than the  requirements of Sections 2.01(e) hereof shall require only the consent
of Banks holding at least 60% of the related Series of PAD  Commitments for such
PAD Loans;  and (iii) any  amendment  of Section 10 hereof,  or which alters the
rights or  obligations  of the Agent  hereunder or under any of the other Credit
Documents, shall require the consent of the Agent.

                  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.





                                CREDIT AGREEMENT

<PAGE>


                                     - 112 -



                  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 Banks and
the Agent.

                  (b) Each Bank may assign any of its Loans,  its Notes, and its
Commitments  (but  only  with the  consent  of,  in the case of its  outstanding
Commitments, the Borrower and the Agent, which consent shall not be unreasonably
withheld);  PROVIDED that (i) no such consent by the Borrower or the Agent shall
be required in the case of any  assignment to another Bank 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 such that,  after giving  effect to
such assignment,  the sum of (A) the aggregate amount of the unused  Commitments
(if the  Commitments  are then in effect) of each of the  assignor  Bank and the
assignee  bank PLUS (B) the  aggregate  amount of the Loans  held by each of the
assignor Bank and the assignee bank shall be equal to or greater than $5,000,000
(unless,  after giving effect to such assignment and all other such  assignments
by such assigning Bank occurring simultaneously or substantially  simultaneously
therewith,  such assigning  Bank shall hold no Commitments or Loans  hereunder);
(iii) each such  assignment by a Bank of its Revolving  Credit Loans,  Revolving
Credit Note or Revolving Credit  Commitment shall be made in such manner so that
the same  portion of its  Revolving  Credit  Loans,  Revolving  Credit  Note and
Revolving Credit  Commitment is assigned to the respective  assignee;  (iv) each
such  assignment by a Bank of its Term Loans and Term Note shall be made in such
manner so that the same  portion of its Term Loans and Term Note is  assigned to
the respective assignee; and (v) each such assignment by a Bank of its PAD Loans
of a particular  Series or PAD  Commitments of a particular  Series and PAD Note
for PAD  Loans  of such  Series  shall be made in such  manner  so that the same
portion of its PAD Loans of such  Series and PAD  Commitment  of such Series and
PAD Note for PAD Loans of such Series is assigned  to the  respective  assignee.
Upon  execution and delivery by the assignee to the Borrower and the Agent of an
instrument in writing  pursuant to which such assignee agrees to become a "Bank"
hereunder (if not already a Bank) having the  Commitment(s)  and Loans specified
in such  instrument,  and upon consent thereto by the Borrower and the Agent, to
the extent  required  above,  the  assignee  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 Bank
hereunder  holding the Commitment(s) and Loans (or portions thereof) assigned to
it (in addition to the Commitment(s) and Loans, if any, theretofore held by such
assignee) and the assigning Bank shall, to the extent of




                                CREDIT AGREEMENT

<PAGE>


                                     - 113 -



such assignment,  be released from the Commitment(s) (or portion(s)  thereof) so
assigned.  Upon each such  assignment  the assigning Bank shall pay the Agent an
assignment fee of $3,000.

                  (c) A Bank  may  sell or  agree  to sell to one or more  other
Persons a participation  in all or any part of any Loan held by it or Loans made
or to be made by it, 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 Loan as if (and the  Borrower  shall be  directly
obligated to such participant under such provisions as if) such participant were
a "Bank" 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
Bank in respect  of such  participation  to be those set forth in the  agreement
(the  "PARTICIPATION   AGREEMENT")  executed  by  such  Bank  in  favor  of  the
participant).  All amounts  payable by the Borrower to any Bank under  Section 5
hereof  shall be  determined  as if such Bank had not sold or agreed to sell any
participations in such Loan and as if such Bank 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  Bank  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 Bank's Note
except that such Bank 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 Bank'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 Banks have consented hereunder).

                  (d)  In  addition  to  the  assignments   and   participations
permitted  under the foregoing  provisions of this Section  11.06,  any Bank may
(without notice to the Borrower, the Agent or any other Bank and without payment
of any fee) (i) assign and pledge all or any  portion of its Loans and its Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A and




                                CREDIT AGREEMENT

<PAGE>


                                     - 114 -



any Operating  Circular  issued by such Federal Reserve Bank and (ii) assign all
or any portion of its rights under this Agreement and its Loans and its Notes to
an affiliate of such Bank. No such  assignment  shall release the assigning Bank
from its obligations hereunder.

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

                  (f)   Anything  in  this   Section   11.06  to  the   contrary
notwithstanding, no Bank 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 Bank.

                  11.07 SURVIVAL. The obligations of the Borrower under Sections
5.01,  5.05 and 11.03  hereof,  and the  obligations  of the Banks 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,  herein or pursuant hereto shall survive the
making of such representation and warranty,  and no Bank shall be deemed to have
waived,  by reason of making any Loan,  any Default  that may arise by reason of
such  representation  or  warranty  proving  to have been  false or  misleading,
notwithstanding  that such Bank 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 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




                                CREDIT AGREEMENT

<PAGE>


                                     - 115 -



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 Bank 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  practices,  all non-public  information  provided to such Bank 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 Banks or the  Agent;  PROVIDED  that any Bank 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 Banks or the
Agent, (c) to bank examiners,  auditors or accountants,  (d) to the Agent or any
other Bank (or to Chase Securities  Inc.), (e) in connection with any litigation
to  which  any  one or more of the  Banks  or the  Agent  is a  party,  (f) to a
subsidiary  or  affiliate  of any  Bank or the  Agent,  (g) to any  assignee  or
participant (or prospective  assignee or participant) of or in any Loans so long
as such assignee or participant (or prospective  assignee or participant)  first
executes  and  delivers  to  the  respective  Bank a  Confidentiality  Agreement
substantially  in the form of Exhibit D hereto,  (h) to any other  Person in the
course of the  enforcement  of any  Bank'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
Bank or the Agent of its obligations under this Section 11.12).




                                CREDIT AGREEMENT

<PAGE>


                                     - 116 -




                  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
                               ------------------------------
                             Name: Jean B. Clifton
                             Title:  Executive Vice President &
                                       Chief Financial Officer




                                CREDIT AGREEMENT

<PAGE>


                                     - 117 -




                            AGENT

                            THE CHASE MANHATTAN BANK,
                            individually and as Agent


                            By /S/ MARY E. BACON
                              -----------------------------
                              Name: Mary E. Bacon
                              Title: Vice President


                            MANAGING AGENTS

                            THE BANK OF NEW YORK


                            By /S/ MARCUS C. JONES
                              -----------------------------
                              Name: Marcus C. Jones
                              Title:  Assistant Vice President


                            CIBC, INC.


                            By /S/ CYNTHIA H. MCCAHILL
                              -----------------------------
                              Name:  Cynthia H. McCahill
                              Title: Director


                            FLEET NATIONAL BANK


                            By /S/ ADAM BESTER
                              -----------------------------
                              Name: Adam Bester
                              Title: Senior Vice President


                            KEYBANK NATIONAL ASSOCIATION


                            By /S/ KENNETH J. KEELER
                              -----------------------------
                              Name:  Kenneth J. Keeler
                              Title: Vice President







                                CREDIT AGREEMENT

<PAGE>


                                     - 118 -



                            CO-AGENTS


                            TORONTO DOMINION (NEW YORK), INC.


                            By /S/ JORGE GARCIA
                              -----------------------------
                              Name: Jorge Garcia
                              Title:  Vice President


                            NATIONSBANK OF TEXAS, N.A.



                            By /S/ PAMELA S. KURTZMAN
                              -----------------------------
                              Name: Pamela S. Kurtzman
                              Title:  Vice President


                            LEAD MANAGERS


                            CORESTATES BANK


                            By /S/ EDWARD L. KITRELL
                              -----------------------------
                              Name:  Edward L. Kitrell
                              Title:  Vice President


                            OTHER BANKS


                            ABN-AMRO BANK, N.V.


                            By /S/ FRANCES O. LOGAN
                              -----------------------------
                              Name: Frances O. Logan
                              Title:  Group Vice President


                            By /S/ LAURA G. FAZIO
                              -----------------------------
                              Name:   Laura G. Fazio
                              Title:  Group Vice President & Director





                                CREDIT AGREEMENT

<PAGE>


                                     - 119 -




                            BANK OF HAWAII


                            By /S/ J. BRYAN SCEARCE
                              -----------------------------
                              Name: J. Bryan Scearce
                              Title: Vice President


                            FIRST NATIONAL BANK OF MARYLAND



                            By /S/ W. BLAKE HAMPSON
                              -----------------------------
                              Name: W. Blake Hampson
                              Title: Vice President


                            FIRST HAWAIIAN BANK


                            By /S/ BRUCE E. HELBERG
                              -----------------------------
                              Name: Bruce E. Helberg
                              Title: Assistant Vice President


                            GREAT WEST LIFE & ANNUITY
                              INSURANCE COMPANY


                            By /S/ ERNIE P. FRIESEN
                              -----------------------------
                              Name:  Ernie P. Friesen
                              Title: Assistant Vice President
                                     Investments


                            By /S/ MARK CORBETT
                              -----------------------------
                              Name:  Mark Corbett
                              Title: Vice President
                                     Private Placement Investments

                            MICHIGAN NATIONAL BANK


                            By /S/ JEFFREY W. BILLIG
                              -----------------------------
                              Name:  Jeffrey W. Billig
                              Title: Commercial Relationship Manager





                                CREDIT AGREEMENT

<PAGE>


                                     - 120 -




                            SOCIETE GENERALE


                            By /S/ MARK VIGIL
                              -----------------------------
                              Name:  Mark Vigil
                              Title:  Vice President


                            UNION BANK OF CALIFORNIA, N.A.


                            By /S/ ROBERT L. WILSON
                              -----------------------------
                              Name: Robert L. Wilson
                              Title: Vice President


                            SUMMIT BANK AS SUCCESSOR TO
                            UNITED JERSEY BANK CENTRAL, N.A.


                            By /S/ HENRY G. KUSH, JR.
                              -----------------------------
                              Name: Henry G. Kush, Jr.
                              Title: Vice President


                           VAN KAMPEN AMERICAN CAPITAL
                             PRIME RATE INCOME TRUST


                            By /S/ JEFFREY W. MAILLET
                              -----------------------------
                              Name:  Jeffrey W. Maillet
                              Title:  Senior Vice President &
                                      Director


                            MERRILL LYNCH SENIOR FLOATING
                              RATE FUND, INC.


                           By /S/ ANTHONY R. CLEMENTE
                              -----------------------------
                              Name:  Anthony R. Clemente
                              Title:  Authorized Sigantory






                                CREDIT AGREEMENT

<PAGE>


                                     - 121 -



                           DEEPROCK & COMPANY

                           By EATON VANCE MANAGEMENT,
                              as Investment Advisor


                           By /S/ SCOTT H. PAGE
                             -----------------------------
                             Name: Scott H. Page
                             Title: Vice President






                                CREDIT AGREEMENT

<PAGE>



                                                                        ANNEX 1


                              COMMITMENTS AND LOANS


                                 [See BII\78737]





<PAGE>



                                                                         ANNEX 2



                            ADJUSTMENTS TO CASH FLOW
                            ------------------------

                                                                    AMOUNT OF
               CALENDAR MONTH                                       INCREASE
               --------------                                       ---------

               October 1995                                         $26,380

               November 1995                                        $27,469

               December 1995                                        $25,007

               January 1996                                         $24,300

               February 1996                                        $23,681

               March 1996                                           $25,928

               April 1996                                           $25,317

               May 1996                                             $26,706

               June 1996                                            $24,295

               July 1996                                            $24,300

               August 1996                                          $25,311

               September 1996                                       $26,145

               October 1996                                         $26,380

               November 1996                                        $27,469

               December 1996                                        $25,007

               January 1997                                         $20,819

               February 1997                                        $20,505

               March 1997                                           $21,369

               April 1997                                           $21,436

               May 1997                                             $21,853

               June 1997                                            $20,555




                                     ANNEX 2

<PAGE>



                                                                        ANNEX 3



                           NEN PERMITTED DISPOSITIONS
                           --------------------------


PROPERTY                                                              NET RETURN
--------                                                              ----------

20 Isham Road, West Hartford, CT (Imprint News)                       $  400,000
359 New Haven Avenue, Milford, CT (Citizen)                           $  400,000
120 N. Fair Street, Guilford, CT (Shoreline Times)                    $  400,000
7-15 Franklin Square, New Britain, CT (Circ)                          $   75,000
1522 Hopemeadow St., Simsbury, CT (FVH)                               $  100,000
Old Lake County, Ohio Facility                                        $  400,000
                                                             Total    $1,775,000

                                     ANNEX 3

<PAGE>




                                                                     SCHEDULE I









                             CONSENTS AND APPROVALS


-  Lease Agreement, dated 8/12/92 between Herald Publishing Company and
   Tokai Financial Services, Inc. (Digital Copier).

-  Master Lease No. 1748, dated 5/1/93 between The Herald Publishing
   Company and NELCO, Ltd. (Macintosh Computer Equipment).

-  Lease, (no date) between Herald Publishing Co. and Master Lease
   Corporation (card access system).

-  Lease, dated 10/10/90 between The Herald Publishing Company and
   Master Lease Corporation (Security System).

-  Forms UCC-1  evidencing the security  interest of Fleet Bank in the assets of
   The Herald Publishing Company (Forms UCC-3 to be filed promptly following the
   closing of the New Britain Acquisition).





                                   SCHEDULE I

<PAGE>



                                                                    SCHEDULE II


                                   LITIGATION


The following is a list of current or pending litigation  matters. No assurances
can be made as to the outcome of these actions.

JOURNAL NEWS, INC.

1.       MCKEAN, ET AL. V. JOURNAL NEWS, INC., ET AL. - Field in Cuyahoga
         County, Ohio, Court of Common Pleas - suit for judgment, personal
         injury claim.  Insurance coverage has been acknowledged by
         insurance company.


THE NEW HAVEN REGISTER

1.       RALPH RICCITELLI V. ANDREW CAMERA AND THE NEW HAVEN REGISTER -
         Personal injury claim.  Case is continuing.  Insurance coverage has
         been acknowledged by insurance company.

2.       EUGENE STACY V. THE NEW HAVEN REGISTER - Personal injury claim.
         Case is continuing.

3.       JOHN ARDOLINO - Personal injury claim.  Case is continuing.
         Insurance coverage has been acknowledged by insurance company.

4.       BRENDON LYDEN - Personal injury claim.  Case is continuing.

5.       JENNIFER WELLS - Personal injury claim.  Case is continuing.
         Insurance coverage has been acknowledged by insurance company.

6.       RODNEY BYRICH - Personal injury claim.  Case is continuing.

7.       WILLIAM B. JONES V. THE NEW HAVEN REGISTER - Civil lawsuit.  Case
         is continuing.

8.       NORITA LITTLES V. MICHAEL RYAN AND THE NEW HAVEN REGISTER -
         Personal injury claim.  Case is continuing.

9.       JAMES MORCALDI V. THE NEW HAVEN REGISTER - Personal injury claim.
         Case is continuing.

10.      OFFICE OF CONNECTICUT ATTORNEY GENERAL INVESTIGATION -
         Investigation by the Connecticut Attorney General's office of a
         complaint regarding classified advertising in the New Haven
         Register.  The investigation concerns whether an aspect of the New
         Haven Register's cross-selling program with certain affiliated
         weekly newspapers constitutes a violation of Connecticut or federal
         antitrust laws.  No judicial or administrative proceeding has been
         brought as a result of this investigation, and it is too early to



                                   SCHEDULE II

<PAGE>


                                        2



         predict  whether such a proceeding  will be brought or what the outcome
         would be. Nonetheless,  the Company believes that there are substantial
         arguments  that the  practice  at issue  does  not  violate  applicable
         antitrust laws.


LORIAN JOURNAL COMPANY

1.       JAMES YOUNG V. THE MORNING JOURNAL, ET AL. - Filed in Lorain County
         Court of Common Pleas.  Defamation claim.  Insurance coverage has
         been acknowledged by the insurance company.

2.       WORKERS' COMPENSATION CLAIM AGAINST THE MORNING JOURNAL BY RENALDO
         ORTIZ - Workers' Compensation claim.

3.       JESUSA YBARRA AND EMILIO YBARRA JR. VS. THE MORNING JOURNAL - Filed
         in Lorain County Court of Common Pleas.  Accident injury.  Case is
         continuing.  Insurance coverage has been acknowledged by the
         insurance company.

4.       ROBERT E. RHODES JR. V. THE LORAIN JOURNAL, INC. - Filed in Huron
         County Common Pleas Court.  Accident injury.  Case is continuing.
         Insurance coverage has been acknowledged by the insurance company.

5.       KYLE LEE GHOLSON V. THE MORNING JOURNAL AND ANDERSON MOLINA - Filed
         in Lorain County Court of Common Pleas.  Accident injury.  Case is
         continuing.  Insurance coverage has been acknowledged by the
         insurance company.


MISSISSIPPI VALLEY OFFSET

1.       JACK FOWLER V. MISSISSIPPI VALLEY OFFSET, INC. - Workers'
         Compensation claim.  Case continuing.


SUBURBAN PUBLICATIONS, INC.

1.       JEFFREY N. KALE VS. SUBURBAN PUBLICATIONS, INC. - Filed in Court of
         Common Pleas, Montgomery County, PA.  Claim for unpaid legal fees
         by his client resulting from out of court settlement of case.  Case
         is continuing.


DAILY LOCAL NEWS COMPANY OF WEST CHESTER, PA.

1.       STEGER V. DAILY LOCAL NEWS - Libel case.  Case is continuing.

2.       WOLFE V. DAILY LOCAL NEWS - Libel case.  Case is continuing.



                                   SCHEDULE II

<PAGE>


                                        3





TROY PUBLISHING COMPANY, INC.

1.       NYS UNEMPLOYMENT INSURANCE DIVISION V. THE RECORD - Employee vs.
         Independent Contractor claim.  Case is continuing.

2.       DAVID DEAN V. THE RECORD - Libel case.  Case is continuing.

3.       DEMERRITI V. THE RECORD - Case is continuing.


CAPITOL CITY PUBLISHING

1.       SOUTH JERSEY REGIONAL AIRPORT V. THE TRENTONIAN - Libel case.  Case
         is continuing.  Insurance coverage has been acknowledged by the
         insurance company.

2.       ACTIVE PET SUPPLIES V. THE TRENTONIAN - Libel case.  Case is
         continuing.  Insurance coverage has been acknowledged by the
         insurance company.

3.       RICHART V. THE TRENTONIAN - Libel case.  Case is continuing.
         Insurance coverage has been acknowledged by the insurance company.

4.       SHERMAN V. THE TRENTONIAN - Invasion of privacy.  Case is
         continuing.  Insurance coverage has been acknowledged by the
         insurance company.

5.       NARO V. THE TRENTONIAN - Libel.  Case is continuing.  Insurance
         coverage has been acknowledged by the insurance company.

6.       PHELPS V. THE TRENTONIAN - Injury.  Case is continuing.  Insurance
         coverage has been acknowledged by the insurance company.

7.       HORYD V. THE TRENTONIAN - Defamation and trespass.  Case is
         continuing.  Insurance coverage has been acknowledged by the
         insurance company.

8.       OLENDER V. THE TRENTONIAN - Defamation.  Case is continuing.
         Insurance coverage has been acknowledged by the insurance company.

9.       WESLEY V. THE TRENTONIAN - Copyright.  Case is continuing.
         Insurance coverage has been acknowledged by the insurance company.

10.      MOLIN V. THE TRENTONIAN - Defamation.  Case is continuing.
         Insurance coverage has been acknowledged by the insurance company.

11.      MAURIZZIO V. THE TRENTONIAN - Defamation.  Case is continuing.




                                   SCHEDULE II

<PAGE>


                                        4



12.      COHEN V. THE TRENTONIAN - 3rd Party personal injury.  Case is
         continuing.


SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS, INC.

1.       STEVEN DREYER, ET AL. V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS -
         Filed in the Circuit Court of St. Louis County, MO.  Carrier claim.
         Case is continuing.

2.       An assessment  from the State of Missouri for certain  income taxes for
         the years 1988  through  1991 has been  appealed by the  Company.  This
         matter is continuing.  The Company has provided  adequate  reserves for
         this matter.

3.       LEE WEICHT, ET AL. V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS -
         Filed in the Missouri Circuit Court, 22nd Judicial Circuit
         (St. Louis City) - Carrier claim.  Case is continuing.

4.       PATRICK SWEENEY V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS - Filed
         in the Circuit Court of the City of St. Louis.  Wrongful discharge
         claim.  Case is continuing.

5.       KATHERINE WILLIAMS V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS -
         Libel claim.  Insurance coverage has been acknowledged by the
         insurance company.

6.       CATHERINE STRID V. SUBURBAN NEWSPAPERS OF GREATER ST. LOUIS - Filed
         with Equal Employment Opportunity Commission.  Family Medical Leave
         Act claim.


NORTHEAST PUBLISHING, INC.

1.       JEFF OLIVEIRA V. NORTHEAST PUBLISHING, INC. - Wrongful discharge.
         Case is continuing.

2.       AIME LACHANCE V. NORTHEAST PUBLISHING, INC. - Wrongful discharge.
         Case is continuing.

3.       PAULINE HARALD V. NORTHEAST PUBLISHING, INC. - General liability
         claim.  Case is continuing.  Insurance coverage has been
         acknowledged by the insurance company.

4.       TRACY AMARAL V. NORTHEAST PUBLISHING, INC. - General liability
         claim.  Case is continuing.  Insurance coverage has been
         acknowledged by the insurance company.




                                   SCHEDULE II

<PAGE>


                                        5



5.       VIRGINIA OLSEN V. NORTHEAST PUBLISHING, INC. - Discrimination claim
         filed with Massachusetts Commonwealth Against Discrimination
         (MCAD).  Case is continuing.

6.       DONNA JOYNT V. NORTHEAST PUBLISHING, INC. - General liability
         claim.  Case is continuing.  Insurance coverage has been
         acknowledged by the insurance company.

7.       BARBARA BRENNAN V. NORTHEAST PUBLISHING, INC., JOE CAVANNA AND
         TRACY GREENE - Discrimination claim filed with MCAD.  Case is
         continuing.

8.       SAMSON OMOSEFUNMI V. NORTHEAST PUBLISHING, INC. - Filed in
         Massachusetts Superior Court.  Libel suit.  Case is continuing.
         Insurance coverage has been acknowledged by the insurance company.


PHOENIXVILLE NEWSPAPERS, INC.

1.       PETER D. MELCHIORRE AND MELCHIORRE CONSTRUCTION CO. V. WILLIAM J.
         MCCAULEY, III AND PHOENIXVILLE NEWSPAPERS, INC. AND JOURNAL
         REGISTER COMPANY D/B/A THE PHOENIX AND THE PHOENIX - Libel case.
         Libel coverage is in place.

2.       ALEXANDER C. KOVACH V. WILLIAM J. MCCAULEY V. PHOENIXVILLE
         NEWSPAPERS, INC. T/A THE PHOENIX AND MICHAEL REGAN - Libel case.
         Case is continuing.


THE NEWS HERALD

1.       DOLORES MERKOWITZ V. THE NEWS HERALD - Filed with Federal Court.
         Filed for motion for summary judgment in December 1996.

2.       MICHAEL SPRATKA V. THE NEWS HERALD - Defamation claim.  Case is
         continuing.

3.       BRENT ENGLISH V. THE NEWS HERALD - Liability case.  Case is
         continuing.

4.       LELA MCKNIGHT V. THE NEWS HERALD - Workers' Compensation.  Case is
         continuing.


TIMES HERALD PUBLISHING CO., INC.

1.       RICHARD THOMAS V. NORRISTOWN TIMES HERALD, ARTHUR R. GOLOMBOSKI,
         TERRANCE BRADY AND JIM AUSTIN - Libel case.  Case is continuing.




                                   SCHEDULE II

<PAGE>


                                        6



2.       SPECTRUM MARKETING SERVICES V. THE TIMES HERALD - Liability case.
         Case is continuing.


NEW ENGLAND NEWSPAPERS, INC.

1.       ROBERT MARTINEC V. THE TIMES - Libel case.  Case is continuing.

2.       GAIL DAVIS V. THE TIMES - Unfair labor practice charge filed with
         RICHR.


THE EVENING CALL PUBLISHING COMPANY

1.       LINDA COOK V. THE EVENING CALL PUBLISHING COMPANY - Breach of
         contract.  Case is continuing.

2.       MARIA HANSON V. THE EVENING CALL PUBLISHING COMPANY - Unemployment
         benefits.  Case is continuing.





                                   SCHEDULE II

<PAGE>



                                                                  SCHEDULE III


                                   INVESTMENTS


                  1.  The Borrower holds investments in stock of its
subsidiaries, which subsidiaries are listed on Schedule IV.

2.       The initial membership dues contributed to Journal Register Company
         are as follows:

         a)       Suburban Newspapers of Greater St. Louis       $ 5,000
         b)       Alton Telegraph Printing Company                 5,000
         c)       Evening Call Publishing Company                  5,000
         d)       Capitol City Publishing Company                  5,000
         e)       Community Service Publishing Company             5,000
         f)       New England Newspapers, Inc.                     5,000
         g)       Northeast Publishing, Inc.                       5,000
         h)       Phoenixville Newspapers, Inc.                    5,000
         i)       Troy Publishing Company                          5,000
         j)       Daily Local News Company                         5,000
         k)       Suburban Publications, Inc.                      5,000
         l)       Times Herald Publishing Company                  5,000
         m)       The Lorain Journal Company including
                    Lake County News Herald                       10,000
         n)       Mansfield Journal Company including
                    Dover Times Reporter                          10,000
         o)       The New Haven Register                           5,000
         p)       The Register Citizen                             5,000
         q)       Bristol Press                                    5,000
                                                                  ------
                                                                 $95,000

3.       A bond with the City of Alton Sewer Authority on behalf of the
         Alton Telegraph in the amount of $5,000.

4.       Postage guarantees with the US Post Office are as follows:

         a)       Alton, Illinois                                $5,409
         b)       Willoughby, Ohio                                1,834
         c)       Cleveland, Ohio                                   632
         d)       New Philadelphia/Dover, Ohio                    3,871
         e)       Troy, New York                                  5,280
         f)       Phoenixville, Pennsylvania                      1,808
         g)       St. Louis, Missouri                             5,409
         h)       Fall River, New York                            1,000
         i)       Lorain, Ohio                                   21,590
         j)       West Chester, Pennsylvania                      5,860
         k)       Woonsocket, Rhode Island                           19

5.       A Security Deposit with the Painesville, Ohio Electric Co. in the
         amount of $60.




                                  SCHEDULE III

<PAGE>


                                        2



6.       Mansfield  Journal Company and The Lorain Journal Company are owners of
         Debenture  Bonds  issued by the  Associated  Press.  The  Bonds  have a
         maturity date of January 1, 2000 and accrue interest at the rate of 4%,
         payable  semiannually.  The  amount of the  investment  as of March 31,
         1997, is $1,000.

7.       Certain subsidiaries of the Borrowers, together with other members
         of JRC, participate in the Journal Register Company Employee
         Benefits Plan (the "Plan").  The Plan provides medical and dental
         benefits to eligible employees and their beneficiaries and to fund
         such benefits.  Each member company pays a monthly premium which is
         based upon the number of employees then eligible to participate in
         the Plan.  The funds are paid directly to a trust (the "Trust"),
         which was established pursuant to 501(c)(9) of the Internal Revenue
         Code, and the assets are used exclusively to provide benefits under
         the Plan.  The Borrowers plan to continue their participation in
         the Plan and the Trust.

8.       A Security  Deposit of $500 with the City of Mentor as security for the
         Lake  County News  Herald's  commercial  printing  job with the City of
         Mentor.

9.       A Security Deposit with the Worker's Compensation Board of Ohio, on
         behalf of the Dover Times Reporter in the amount of $195.

10.      A Security Deposit with the Associated Press, on behalf of the Troy
         Publishing Company and Northeast Publishing Company in the amount
         of $1,000.

11.      A Security Deposit with the Associated Press, on behalf of New
         England Newspapers in the amount of $1,000.

12.      A Security Deposit with Mark Weinstein (property landlord) on behalf of
         Suburban  Publications  in the  amount of $400 for the rental of office
         space.

13.      Membership Fee paid to Journal Register Company, on behalf of New
         England Newspapers in the amount of $2,700 related to membership in
         ISSG.

14.      A Security Deposit with Linda Culberson  (property  landlord) on behalf
         of the Lorain  Journal  Company in the amount of $625 for the rental of
         office space.

15.      A Security Deposit with Ludwigs Corner Bureau Office and Kennett
         Square Bureau on behalf of Daily Local News Company in the amount
         of $665 and $195 respectively.




                                  SCHEDULE III

<PAGE>


                                        3



16.      Various security deposits for rent on behalf of Suburban Newspapers
         of Greater St. Louis totaling $8,683.

17.      A Security Deposit for the rental of the Clinton, Wallingford, and
         Guilford Bureau Officers, on behalf of the New Haven Register in
         the amount of $5,657.

18.      A Security Deposit for the rental of a copy machine and rental of
         the Westport office on behalf of County Kids totaling $1,430.

19.      A Security Deposit for Sales and Use Tax with the Missouri
         Department of Revenue Division of Taxation and Collection on behalf
         of Suburban Newspapers of Greater St. Louis in the amount of
         $4,983.

20.      Security Deposits for rent on behalf of Southern Rhode Island
         Newspapers in the amount of $985.




                                  SCHEDULE III

<PAGE>



                                                                     SCHEDULE IV











                          JOURNAL NEWS, INC. - DELAWARE

                               SUBSIDIARIES OF JNI


COMPANY                                               JURISDICTION
-------                                               ------------

Mansfield Journal Company                             Ohio
The Lorain Journal Company                            Ohio
Mississippi Valley Offset Company, Inc.               Missouri
Chanry Media, Inc.                                    Delaware
Chanry Communications, Ltd.*                          New York
Chanry Freeport Pennysaver, Inc.*                     Delaware
Chanry Pennysaver IV, Inc.*                           Delaware
Chanry Pennysaver III, Inc.*                          Delaware
Chanry Pennysaver II, Inc.*                           Delaware
Chanry Pennysaver, Inc.*                              Delaware
All Home Distribution, Inc.*                          New York
Pennysaver Home Distribution Corp.*                   New York
NHR Holding Company, Inc.                             Delaware
NH Acquisition Corp.                                  Delaware
New Haven Register, Inc.                              Connecticut
Hartford Times, Inc.                                  Maryland
County Kids, Inc.                                     Connecticut
Community Offset, Inc.                                Connecticut
Central New Jersey Publishing Company                 Delaware
Torrington Acquisition Corp.                          Delaware
Bristol Acquisition Corp.                             Delaware
New England Acquisition Corp.                         Delaware
New Britain Publishing Company                        Delaware
The Herald Publishing Company                         Connecticut
The Herald Publishing Company, East                   Connecticut
The New Britain Herald Realty Company                 Connecticut
Middletown Acquisition Corp.                          Delaware


--------
*A direct or indirect subsidiary of Chanry Media, Inc.



                                   SCHEDULE IV

<PAGE>


                                        2



                        JOURNAL COMPANY, INC. - DELAWARE
                               SUBSIDIARIES OF JCI


COMPANY                                                   JURISDICTION
-------                                                   ------------

Alton Telegraph Printing Company1                         Missouri
Capitol City Publishing Co., Inc.                         New Jersey
Empire State Holdings Corporation                         Delaware
The Evening Call Publishing Company                       Rhode Island
New England Newspapers, Inc.                              New York
News Company of Ladue, Inc.                               Missouri
Northeast Publishing, Inc.                                Massachusetts
Northgate Commercial Printing Company                     Illinois
St. Louis Sun Publishing Company                          Delaware
Suburban Field Marketing, Inc.                            Missouri
Suburban Newspapers of Greater St. Louis, Inc.2           Missouri
Sunrise Industries, Inc.                                  Delaware
Times Herald Publishing Company, Inc.                     Delaware
Troy Publishing Co., Inc.                                 New York
Asheboro Publications, Inc.                               Delaware
Orange Coast Publishing Co.                               California
Tribune Publishing Company of Royal Oak                   Michigan
Taunton Acquisition Corp.                                 Delaware

--------
1Alton stock is subject to that certain Stock Pledge Agreement dated May
21, 1985 between Sunrise Industries, Inc. and Steven N. Mottaz, Esq., as
agent on behalf of Steven Cousley, David Cousley, Paul Cousley, the
Cousley Trust, the S. Cousley Trust and Marylou Cousley, to secure
promissory notes payable to Steven N. Mottaz, Esq., as agent for Paul
Cousley, David Cousley and the S. Cousley Trust.
2See Item 4 of Schedule V for JCI and its Subsidiaries



                                   SCHEDULE IV

<PAGE>


                                        3



                       SUBSIDIARIES OF INS HOLDINGS, INC.


COMPANY                                                 JURISDICTION
-------                                                 ------------

INS Holdings, Inc.                                      Delaware
INS Holdings (Kansas), Inc.                             Kansas
Integrated Newspaper Systems, Inc.                      Kansas




                                   SCHEDULE IV

<PAGE>


                                        4



COMPANY                                                 JURISDICTION
-------                                                 ------------

Journal Register Company, LLC                           New York
Journal Register Company                                Delaware
Journal Register Newspaper, Inc.                        New Jersey





                                   SCHEDULE IV

<PAGE>



                                                                      SCHEDULE V









                  LIENS ON PROPERTY OF JNI AND ITS SUBSIDIARIES


1.       The mortgage referred to in Item 1 of Schedule VI.

2.       Liens, encumbrances and other matters of title set forth in the
         Title Reports.

3.       The matters described in Schedule 4(h) of the NEN Acquisition
         Agreement.


                  LIENS ON PROPERTY OF JCI AND ITS SUBSIDIARIES

1.       Liens, encumbrances and other matters of title set forth in the
         Title Reports.

2.       Pledge of all of the then issued and outstanding shares of common
         stock of Alton Telegraph Printing Company pursuant to a certain
         Stock Pledge Agreement dated May 21, 1985 between Sunrise
         Industries, Inc. and Steven N. Mottaz, Esq., as agent on behalf of
         Stephen Cousley, David Cousley, the Cousley Trust, the S. Cousley
         Trust and Mary Lou Cousley.

3.       UCC-1 filed July 2, 1990 (1887137), debtor is Donnelly Printing
         Co., secured party is Boone Newspapers, Inc.  Profit Sharing Plan
         amended May 12, 1992 (2128305) to change name of debtor to Suburban
         Newspapers of Greater St. Louis, Inc; UCC-1 filed July 2, 1990
         (1887138), debtor is Donnelly Printing Co., secured party is Smith
         Newspapers, Inc. amended April 30, 1992 to change name of debtor to
         Suburban Newspapers of Greater St. Louis, Inc.  Both cover the
         following property:

         Goss Urbanite ten unit press U1204, 1976

                  Unit  #1:U1204 - N 1000 series  
                  Unit  #2:U1204 - R 1000 series
                  Unit #3:U1204 - AS 1000 series 
                  Unit  #4:U1204B - L 1000 series ** 
                  Unit  #5:U1204B - J 1000 series ** 
                  Unit  #6:U1204B - V 1000 series ** 
                  Unit  #7:U543A - F 500  series ** 
                  Unit  #8:U543B - G 500 series 
                  Unit #9:U543C - H 500 series 
                  Unit #10:U734A - M 700 series 
                  22 3/4 inch cutoff 
                  standard  dampener feed rollers 
                  1000 series units as air pressure for water
                    and ink form rollers



                                   SCHEDULE V

<PAGE>


                                        2



                  500 & 700 series are mechanical linkage
         **       new units installed Feb. 1990

                  Folder:  Inverted folder U1204
                           32 pins
                           2 formers with skip slitters
                           configuration is standard Goss

      MOTORS(2):                 (1)                  (2)

      HP                         100                  100
      Make                       Westinghouse         Westinghouse
      DC volts/amps              240/336              240/336
      field volts/amps           240/4.93             240/4.93
      frame no.                  J408-ATZ             J408-ATZ
      serial #                   4-S-77               1-S-77


      CONTROLLERS(2):

      HP                         100                  100
      Make                       Fincor               Fincor
      Model                      2193A-100-40F        2193A-100-40F
      Serial #                   36182                36183
      Voltage                    240                  240
      Dwg or Print #             C1039819 &           C1039819 &
                                 C1039821             C1039821 &
                                                      B10398290-2


Note:  The Second  Security  Agreement  between Smith  Newspapers  and Jefferson
County  Newspapers,  Inc. dated June 30, 1992 and the Second Security  Agreement
between  Twin Cities  Newspapers,  Inc. and the Selma  Times-Journal  Publishing
Company  Employees'  Profit  Sharing  Trust dated August 1, 1974, as amended and
subordinated by a Subordination  of Second Security  Agreement dated May 1, 1976
which  originally  created  these  interests  cover a broader  range of property
including trade names,  goodwill,  circulation and advertising lists in addition
to personal property. These security interests are both subordinate to the First
Security Agreement between W.L. Wright and Twin Cities Newspapers, Inc.
dated August 1, 1974.

4.       Security interest in 4,800 shares of Stock of Twin Cities
         Newspapers, Inc. under an Escrow Agreement between Harold L. Wright
         and Twin Cities Newspapers, Inc. et. al. and Commerce Bank of
         Festus Missouri as Escrow Agent, to secure a Promissory Note to
         H.L. and H. Wright from Twin Cities Newspapers, Inc. dated August
         1, 1974 (December 14, 1993 principal balance of $80,000) and the
         payments under a Non-competition Agreement between H.L. Wright and



                                   SCHEDULE V

<PAGE>


                                        3



         Twin Cities Newspapers, Inc. between August 1, 1974 (December 14,
         1993 principal balance of $25,000).  Twin Cities Newspapers, Inc.
         is the predecessor by merger to Jefferson County Newspapers, Inc.,
         which is the predecessor by merger to the Suburban Newspapers of
         Greater Saint Louis, Inc.  Secured parties do not have physical
         possession of Stock of Suburban Newspapers of Greater St. Louis,
         Inc.

5.       UCC-1 Financing Statements described in Schedules 4(c) to the NEN
         Acquisition Agreement.




                                   SCHEDULE V

<PAGE>



                                                                   SCHEDULE VI









                                  INDEBTEDNESS


1.       Deferred building purchase obligation between The Dormers
         Corporation and New Haven Acquisition Corporation.  The outstanding
         balance as of March 31, 1997 is $894,835.

2.       Capital leases between Copier Concepts and Suburban Newspapers of
         Greater St. Louis.  The amount outstanding as of March 31, 1997 is
         $16,579.

3.       Amounts payable to the McAdams Family by Suburban Newspapers of
         Greater St. Louis.  The amount outstanding as of March 31, 1997 is
         $44,735.

4.       Amount payable to Judith Brown by New Haven Acquisition
         Corporation.  The amount outstanding as of March 31, 1997 is
         $71,179.




                                   SCHEDULE VI

<PAGE>



                                                                    SCHEDULE VII



                  HAZARDOUS MATERIALS FOR JNI AND SUBSIDIARIES


1.       The items described in the Environmental Report as defined in this
         Agreement.

2.       The environmental indemnity with respect to the sale of certain
         subsidiaries of JNI to Thomson Newspapers Corporation.


                HAZARDOUS MATERIALS FOR JCI AND ITS SUBSIDIARIES


1.       The items described in the Environmental Reports as defined in this
         agreement.

2.       "Phase II Site Assessment of 330 West Bay Street, Costa Mesa,
         California" prepared by ENSR Consulting and Engineering, dated June
         1992.

3.       The environmental indemnity with respect to the sale of assets at
         330 West Bay Street, Costa Mesa, California.

4.       The quarterly ground water report with respect to the sale of assets at
         330 West Bay Street, Costa Mesa, California.

5.       Additional site investigation of 330 West Bay Street, Costa Mesa,
         California, prepared by Atlas Environmental Engineering, dated
         March 1997.



                                  SCHEDULE VII

<PAGE>


                                                                  SCHEDULE VIII



                                 CAPITALIZATION

Authorized and Issued Capital Stock:

         300,000,000  shares of common stock,  par value $.01 per share ("Common
         Stock"), authorized, of which 48,437,500 are issued and outstanding

         1,000,000  shares of preferred stock, par value $.01 per share ("Common
         Stock"), authorized, of which none are issued and outstanding.


Outstanding Equity Rights and Payments:

         1,937,500 options to purchase 1,937,500 shares of Common Stock
         issued pursuant to the Stock Incentive Plan

         Registration Rights Agreement by and among the Company, Warburg,
         Pincus Capital Company, L.P., Warburg, Pincus Capital Partners,
         L.P. and Warburg, Pincus Investors, L.P.

         Voting Agreement by and among the Company and Warburg, Pincus
         Capital Company, L.P., Warburg, Pincus Capital Partners, L.P. and
         Warburg, Pincus Investors, L.P.

         Journal Register Company Management Bonus Plan

         The Company  intends to terminate  its StarShare  Plan (the  "StarShare
         Plan") prior to the completion of the Company's initial public offering
         (the  "IPO").  The  Units  (as  defined  in the  StarShare  Plan)  then
         outstanding shall not be terminated.  However, the Company is currently
         seeking  agreement  from  holders of such Units to provide that (i) the
         valuation of each Unit then  outstanding  shall be $10.00 and (ii) with
         respect to any Unit then  outstanding  which Unit has not vested in the
         5th Performance  Period or the 6th Performance  Period (each as defined
         in the  StarShare  Plan),  (a) 75% of such  Unit  shall  vest  upon the
         completion of the IPO and (b) 25% of such Unit shall vest in accordance
         with the terms of the StarShare Plan.





                                  SCHEDULE VIII
<PAGE>

                                                                     EXHIBIT A



                     [Form of Borrower Security Agreement]

                          BORROWER SECURITY AGREEMENT

            BORROWER SECURITY AGREEMENT dated as of ______, 1997 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
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").

            Journal Register  Company,  LLC ("JOURNAL  REGISTER LLC"), a limited
liability  company duly  organized  and validly  existing  under the laws of the
State of New York and the Agent are  parties to a Pledge  Agreement  dated as of
December 21, 1994 (as heretofore  modified and supplemented and in effect on the
date  hereof,  the  "EXISTING  PLEDGE  AGREEMENT"),  pursuant  to which  Journal
Register LLC,  pledged and granted a security  interest in the Collateral (as so
defined) as  security  for the Secured  Obligations  (as so defined)  including,
INTER  ALIA,  obligations  of Journal  News,  Inc.  and  Journal  Company,  Inc.
(collectively, the "EXISTING BORROWERS"), in each case a wholly owned subsidiary
of Journal Register LLC, under an Amendment and Restatement dated as of December
17, 1996 of Credit  Agreement  dated as of December  21, 1994 (the "1994  CREDIT
AGREEMENT")   with  the  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, Journal Register Company, LLC
is merging with and into the  Borrower,  with the Borrower  being the  surviving
entity of such merger. As of the date hereof,  the Borrower shall become a party
to  the  Existing  Credit  Agreement  as  borrower  and  to  assume  all  of the
obligations of the Existing Borrowers under or in respect of the Existing Credit
Agreement,  and in that connection the parties to the Existing Credit  Agreement
shall amend in certain  respects and restate in its entirety the Existing Credit
Agreement  pursuant to a Credit  Agreement  dated as of May 2, 1997 (as modified
and in effect from time to time, the CREDIT AGREEMENT").

            To induce said banks to amend and restate 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 Pledge Agreement)



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 2 -



pursuant to the Existing  Pledge  Agreement and in that  connection to amend and
restate in its entirety the Existing Pledge 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.

            "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;



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 3 -



      (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.

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

            "ISSUERS" shall mean (a) JCI and JNI and (b) thereafter, 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.

            "OTHER  INDEBTEDNESS"  shall mean all  obligations  of the  Borrower
      and/or  its  Subsidiaries  to any Bank in  respect  of any  Interest  Rate
      Protection  Agreement entered into by the Borrower and/or its Subsidiaries
      and such Bank  pursuant to Section  8.21 of the Credit  Agreement  and all
      obligations of the Borrower to any Bank in respect of  Indebtedness of the
      Borrower incurred as permitted by Section 8.07(e) of the Credit Agreement.




                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 4 -



            "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 STOCK" 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 Banks to, and the Notes held
      by each Bank of,  the  Borrower  and all other  amounts  from time to time
      owing to the Banks or the Agent by the Borrower under the Credit Agreement
      and the Notes and interest thereon, (b) the obligations of the Borrower to
      pay all  amounts  from time to time owing to any Bank by the  Borrower  in
      respect of any  Interest  Rate  Protection  Agreement  entered into by the
      Borrower and such Bank  pursuant to Section 8.21 of the Credit  Agreement,
      (c) the  obligations  of the Borrower to pay all amounts from time to time
      owing  to any Bank by the  Borrower  in  respect  of  Indebtedness  of the
      Borrower to such Bank  incurred  as  permitted  by Section  8.07(e) of the
      Credit  Agreement and (d) all obligations of the Borrower to the Banks 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.

            "STOCK   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.

            "TRADEMARK COLLATERAL" shall  mean all Trademarks, whether now owned
      or hereafter acquired by the Borrower,



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 5 -



      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 Banks 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 Stock  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
      Banks  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 Stock  evidenced by the  certificates  identified in
      Annex 1 hereto is, and all other Pledged Stock 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 and none of
      such Pledged Stock is or will be subject to any  contractual  restriction,
      or any restriction under the



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 6 -



      charter or by-laws of the respective  Issuers of such Pledged Stock,  upon
      the  transfer  of such  Pledged  Stock  (except  for any such  restriction
      contained herein or in the Credit Agreement);

            (c) the Pledged Stock  evidenced by the  certificates  identified in
      Annex 1 hereto  constitutes  all of the issued and  outstanding  shares of
      capital  stock  of any  class  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 Stock, the respective class and par
      value of the  shares  comprising  such  Pledged  Stock 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 the  Borrower  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;




                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 7 -



            (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  Borrowers 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
Pledge Agreement,  which are hereby confirmed hereunder), for the benefit of the
Banks and the holders of Other Indebtedness 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 the
      respective  Issuers  evidenced by the  certificates  identified in Annex 1
      hereto and all other  shares of  capital  stock of  whatever  class of the
      Issuers,  now or hereafter  owned by the  Borrower,  together with in each
      case the  certificates  evidencing  the same  (collectively,  the "PLEDGED
      STOCK");

            (b) all  shares,  securities,  moneys  or  property  representing  a
      dividend on any of the Pledged Stock,  or  representing a distribution  or
      return of capital  upon or in respect of the Pledged  Stock,  or resulting
      from a split-up,  revision,  reclassification  or other like change of the
      Pledged  Stock  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 Stock;




                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 8 -



            (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  corporation,  all shares of each class of the capital  stock of
      the  successor  corporation  (unless  such  successor  corporation  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  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,   and  trade  acceptances  (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");




                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 9 -



            (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




                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 10 -



            (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") in the name and under
the control of the Agent 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 any of
them  wishes to pledge to the Agent for the  benefit of the Banks 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  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 Banks 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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 11 -



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 Banks and the holders of Other  Indebtedness) 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 Banks 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 Banks.

            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 Bank 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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 12 -



      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 Banks and the holders of Other Indebtedness)
      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 Banks
      and the holders of Other  Indebtedness) any and all Instruments,  endorsed
      and 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);

            (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 Stock  Collateral  to be  transferred  of record
      into the name of the Agent or its  nominee  (and the Agent  agrees that if
      any  Stock  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 Stock
      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;




                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 13 -



            (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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 14 -



      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 Banks 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 Banks.

            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)  STOCK COLLATERAL.

            (1) The Borrower  will cause the Stock  Collateral  to constitute at
all times 100% of the total  number of shares of each class of capital  stock 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  Stock  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  Stock
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 SECURITY AGREEMENT

<PAGE>


                                   - 15 -



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 on the Stock Collateral paid in cash out of earned surplus.

            (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 Bank
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,  the Notes,  the Subsidiary
Guarantee  or any other  agreement  relating  to such  Secured  Obligation,  all
dividends and other distributions on the Stock Collateral shall be paid directly
to the Agent and retained by it in the  Collateral  Account as part of the Stock
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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 16 -



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 of the Borrower.  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 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 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,



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 17 -



(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 Banks and the holders of
Other  Indebtedness)  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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 18 -




            (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 Banks 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 Bank 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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 19 -



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 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 signature page hereto.

            5.08  PRIVATE  SALE.  The Agent,  the Banks and the holders of Other
Indebtedness 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 Bank  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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 20 -



      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 Banks 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.

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 Bank) to be listed as the  lienholder  on all
certificates  of title or  ownership  relating  to Motor  Vehicles  owned by the
Borrower and (iii) deliver to the Agent all  certificates  identified in Annex 1
hereto, accompanied by undated stock powers duly executed in blank.



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 21 -




            5.12 TERMINATION.  When all Secured Obligations shall have been paid
in full and the  Commitments of the Banks under the Credit  Agreement 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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 22 -



such sale or Casualty  Event in excess of $50,000,  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 Required
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  BANK
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



                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 23 -



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 Banks 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  Bank,  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 Banks 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 Banks 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
Banks 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.




                          BORROWER SECURITY AGREEMENT

<PAGE>


                                   - 24 -



            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_________________________________
                                 Name:
                                 Title:


                               THE CHASE MANHATTAN BANK,
                                 as Agent


                               By__________________________________
                                 Name:
                                 Title:




                          BORROWER SECURITY AGREEMENT

<PAGE>



                                                                       ANNEX 1


                             LIST OF PLEDGED STOCK


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

Journal News,                          Journal               __ shares of
  Inc.                                 Register              common stock
                                       Company

Journal Company,                       Journal               __ shares of
  Inc.                                 Register              common stock
                                       Company



                    ANNEX 1 TO BORROWER SECURITY AGREEMENT

<PAGE>



                                                                         ANNEX 2


                 LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
                    APPLICATIONS FOR COPYRIGHT REGISTRATIONS



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

                                      None.






                       ANNEX 2 TO BORROWER SECURITY AGREEMENT

<PAGE>



                                                                         ANNEX 3


                     LIST OF PATENTS AND PATENT APPLICATIONS



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

                                      None.






                     ANNEX 4 TO BORROWER SECURITY AGREEMENT

<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
----                    -----------------             --------------

                                      None.






                     ANNEX 5 TO BORROWER SECURITY AGREEMENT

<PAGE>



                                                                        ANNEX 5


                LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS



                                    None.





                     ANNEX 5 TO BORROWER SECURITY AGREEMENT

<PAGE>



                                                                         ANNEX 6


                                LIST OF LOCATIONS



State Street Square
50 West State Street
Trenton, NJ




                     ANNEX 6 TO BORROWER SECURITY AGREEMENT

<PAGE>



                                                                     EXHIBIT B-1


            [Form of Amendment No. 1 to JCI/JNI Security Agreement]

                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT


            AMENDMENT  NO. 1 dated as of _______,  1997  between  JOURNAL  NEWS,
INC., a corporation  duly  organized and validly  existing under the laws of the
State of Delaware ("JNI");  JOURNAL COMPANY,  INC., a corporation duly organized
and validly existing under the laws of the State of Delaware ("JCI); each of the
other Subsidiaries of the Journal Register Company, a corporation duly organized
and validly  existing  under the laws of the State of Delaware (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 JCI and JNI,  the  "OBLIGORS");  and THE CHASE
MANHATTAN BANK, as 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 Obligors and the Agent are parties to a Security Agreement dated
as of December 21, 1994 (as heretofore  modified and  supplemented and in effect
on the date hereof,  the "SECURITY  AGREEMENT"),  pursuant to which the Obligors
pledged  and  granted to a  security  interest  in the  Collateral  (as  defined
therein) as  security  for the Secured  Obligations  (as so defined)  including,
INTER ALIA,  obligations of JCI and JNI under an Amendment and Restatement dated
as of December 17, 1996 of Credit  Agreement  dated as of December 21, 1994 (the
"1994 CREDIT  AGREEMENT")  with the 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,  Journal  Register
Company,  LLC, a limited  liability  company duly organized and validly existing
under the laws of the State of New York,  is merging with and into the Borrower,
with the Borrower  being the  surviving  entity of such  merger.  As of the date
hereof,  the Borrower shall become a party to the Existing  Credit  Agreement as
borrower and to assume all of the obligations of JCI and JNI under or in respect
of the Existing  Credit  Agreement,  and in that  connection  the parties to the
Existing  Credit  Agreement  shall amend in certain  respects and restate in its
entirety the Existing Credit  Agreement  pursuant to a Credit Agreement dated as
of May 2,  1997  (as  modified  and in  effect  from  time to time,  the  CREDIT
AGREEMENT").

            To  induce  the  Banks to amend  and  restate  the  Existing  Credit
Agreement pursuant to the Credit Agreement, and to extend credit thereunder, the
parties hereto wish to amend the Security in certain respects,  and accordingly,
the parties hereto hereby agree as follows:


                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT

<PAGE>


                                   - 2 -



            Section  1.  DEFINITIONS.   Except  as  otherwise  defined  in  this
Amendment,  terms used herein and not defined  herein shall have the  respective
meanings  assigned thereto in the Security  Agreement (or, if not defined in the
Security Agreement, in the Credit Agreement).

            Section 2.  AMENDMENTS.  Upon  the execution  and delivery  of  this
Amendment  by the parties  hereto,  the Security  Agreement  shall be amended as
follows:

            (A) References in the Security  Agreement to "this  Agreement" shall
      be deemed to be references to the Security Agreement as amended hereby.

            (B)  References in  the Security Agreement to the "Credit Agreement"
      shall be deemed to be references to the Credit Agreement;

            (C)  References  in the Security  Agreement to a "Borrower"  and the
      "Borrowers" shall be deemed to be references to JCI or JNI or JCI and JNI,
      respectively;

            (D)  Section  1 of the  Security  Agreement  is  hereby  amended  by
      amending in their entirety the following definitions:

                  "OTHER   INDEBTEDNESS"  shall  mean  all  obligations  of  the
            Borrower  and/or its  Subsidiaries  in respect of any Interest  Rate
            Protection  Agreement  entered  into by  such  Borrower  and/or  its
            Subsidiaries  and such Bank  pursuant to Section  8.21 of the Credit
            Agreement and all obligations of the Borrower to any Bank in respect
            of  Indebtedness  of the  Borrower  incurred as permitted by Section
            8.07(e) of the Credit Agreement.

                  "SECURED  OBLIGATIONS"  shall  mean,  collectively,   (a)  the
            obligations  of the Borrower to pay the principal of and interest on
            the Loans  made by the Banks to, and the Notes held by each Bank of,
            the  Borrower  and all other  amounts from time to time owing to the
            Banks or the Agent by the Borrower  under the Credit  Documents  and
            interest  thereon,  (b) the  obligations  of the Borrower to pay all
            amounts  from  time to time  owing  to any Bank by the  Borrower  in
            respect of any Interest Rate  Protection  Agreement  entered into by
            the  Borrower  and such Bank  pursuant to Section 8.21 of the Credit
            Agreement,  (c) the  obligations  of the Borrower to pay all amounts
            from time to time  owing to any Bank by the  Borrower  in respect of
            Indebtedness  of the Borrower to such Bank  incurred as permitted by
            Section 8.07(e) of the Credit

                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT

<PAGE>


                                   - 3 -



            Agreement  and (d) all  obligations  of any Obligor to the Banks and
            the Agent  hereunder  and under the other Credit  Documents to which
            such Obligor is a party.

            (E) The following  phrase in Section 5.07 of the Security  Agreement
      is hereby deleted:

            "at the address  indicated  beneath the respective signatures of the
             Borrowers to the Credit Agreement or"

            (F) Section 5 of the Security  Agreement is hereby amended by adding
      the following at the end thereof:

                  "5.16 RELEASE OF COLLATERAL.  So long as no Default shall have
            occurred  and be  continuing,  upon the request of an  Obligor,  the
            Agent shall execute and deliver to such Obligor such  instruments as
            such Obligor 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 Required Lenders have consented."

            (G) The  words "at its  address"  in line 3 of  Section  6.04 of the
      Security Agreement is hereby amended to read "at the Borrower's address".

            Section 3. CONSENT.  Each Obligor  hereby  consents to the amendment
and restatement of Existing Credit  Agreement  pursuant to the Credit  Agreement
and confirms its obligations under the Security Agreement as amended hereby.

            Section 4.  REPRESENTATIONS  AND  WARRANTIES.  Each  Obligor  hereby
represents and warrants to the Banks and the Agent that all  representations and
warranties  set  forth  in  Section  2 of the  Security  Agreement  are true and
complete  on the date  hereof as if made on and as of the date  hereof and as if
each reference in said Section 2 to "the Credit  Agreement"  were deemed to be a
reference to the Credit Agreement.

            Section 5.  MISCELLANEOUS.  Except as  herein provided, the Security
Agreement  shall remain  unchanged and in full force and effect.  This Amendment
No. 1 may be executed in any number of  counterparts,  each of which shall be an
original and all of which, when taken together,  shall constitute one Agreement.
This Amendment No. 1 shall be governed by, and construed in accordance with, the
law of the State of New York.


                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT

<PAGE>


                                   - 4 -




            IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amendment  No. 1 to  Security  Agreement  as of the day and year  first  written
above.


JOURNAL NEWS, INC.                        JOURNAL COMPANY, INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


THE LORAIN JOURNAL COMPANY                MANSFIELD JOURNAL COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


MISSISSIPPI VALLEY OFFSET                 NEW HAVEN REGISTER, INC.
  COMPANY, INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


NHR HOLDING COMPANY, INC.                 NH ACQUISITION CORP.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


COUNTY KIDS, INC.  (formerly              TORRINGTON ACQUISITION CORP.
known as Register Magazine
Network Inc.)

By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:



                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT

<PAGE>


                                   - 5 -



ALTON TELEGRAPH PRINTING                  CAPITOL CITY PUBLISHING
  CO.                                       CO., INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


BRISTOL ACQUISITION CORP.                 THE EVENING CALL PUBLISHING
                                            COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


EMPIRE STATE HOLDINGS                     NORTHEAST PUBLISHING INC.
  CORPORATION


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


NEW ENGLAND NEWSPAPERS, INC.              ST. LOUIS SUN PUBLISHING
                                            COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:

NORTHGATE COMMERCIAL                      SUBURBAN NEWSPAPERS OF
  PRINTING COMPANY                          GREATER ST. LOUIS, INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:



                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT

<PAGE>


                                   - 6 -



SUBURBAN FIELD MARKETING, INC.            TIMES HERALD PUBLISHING
                                            COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


SUNRISE INDUSTRIES, INC.                  TROY PUBLISHING CO., INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


NEW BRITAIN PUBLISHING COMPANY            THE HERALD PUBLISHING COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:



THE HERALD PUBLISHING COMPANY,            THE NEW BRITAIN HERALD REALTY
  EAST                                      COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


MIDDLETOWN ACQUISITION CORP.              NEW ENGLAND ACQUISITION CORP.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:

TAUNTON ACQUISITION CORP.


By____________________________
  Name:
  Title:




                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT

<PAGE>


                                   - 7 -




THE CHASE MANHATTAN BANK, as
  Agent


By___________________________
  Name:
  Title:





                 AMENDMENT NO. 1 TO JCI/JNI SECURITY AGREEMENT

<PAGE>



                                                                   EXHIBIT B-2


               [Form of Amendment No. 1 to Guarantee Agreement]

                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT


            AMENDMENT  NO. 1 dated as of _______,  1997  between  JOURNAL  NEWS,
INC., a corporation  duly  organized and validly  existing under the laws of the
State of Delaware ("JNI");  JOURNAL COMPANY,  INC., a corporation duly organized
and validly existing under the laws of the State of Delaware ("JCI); each of the
other Subsidiaries of Journal Register Company, a corporation duly organized and
validly  existing  under  the laws of the  State of  Delaware  (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 JCI and JNI,  the  "OBLIGORS");  and THE CHASE
MANHATTAN BANK, as 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 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 "GUARANTEE AGREEMENT"), pursuant to which the Subsidiary
Guarantors  have agreed to  guarantee  the  Guaranteed  Obligations  (as defined
therein)  including,  INTER ALIA,  obligations of JCI and JNI under an Amendment
and  Restatement  dated as of December 17, 1996 of Credit  Agreement dated as of
December 21, 1994 (the "1994 CREDIT AGREEMENT") with the 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,  Journal  Register  Company,  LLC, a limited  liability  company  duly
organized  and  validly  existing  under the laws of the  State of New York,  is
merging with and into the Borrower, with the Borrower being the surviving entity
of such merger. As of the date hereof,  the Borrower shall become a party to the
Existing  Credit  Agreement as borrower and to assume all of the  obligations of
JCI and JNI under or in respect of the Existing  Credit  Agreement,  and in that
connection the parties to the Existing  Credit  Agreement shall amend in certain
respects and restate in its entirety the Existing Credit Agreement pursuant to a
Credit Agreement dated as of May 2, 1997 (as modified and in effect from time to
time, the CREDIT AGREEMENT").

            To  induce  the  Banks to amend  and  restate  the  Existing  Credit
Agreement pursuant to the Credit Agreement, and to extend credit thereunder, the
parties hereto wish to amend the Guarantee  Agreement in certain  respects,  and
accordingly, the parties hereto hereby agree as follows:


                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT

<PAGE>


                                   - 2 -



            Section  1.  DEFINITIONS.   Except  as  otherwise  defined  in  this
Amendment,  terms used herein and not defined  herein shall have the  respective
meanings assigned thereto in the Guarantee  Agreement (or, if not defined in the
Guarantee Agreement, in the Credit Agreement).

            Section 2.  AMENDMENTS.  Upon  the  execution and  delivery  of this
Amendment by the parties  hereto,  the Guarantee  Agreement  shall be amended as
follows:

               (A)  References  in the Guarantee  Agreement to "this  Agreement"
          shall be deemed to be references to the Guarantee Agreement as amended
          hereby.

               (B)  References  in  the  Guarantee   Agreement  to  the  "Credit
          Agreement" shall be deemed to be references to the Credit Agreement;

               (C) References in the Guarantee Agreement to a "Borrower",  "each
          Borrower",  "such  Borrower",  "either  or  both  Borrowers"  and  the
          "Borrowers" shall be deemed to be references to the Borrower;

               (D) The second  sentence of Section 1 of the Guarantee  Agreement
          is hereby amended in its entirety to read as follows:

                    "In addition,  as used herein, the term "OTHER INDEBTEDNESS"
               shall  mean  all   obligations   of  the   Borrower   and/or  its
               Subsidiaries  to  any  Bank  in  respect  of  any  Interest  Rate
               Protection  Agreement  entered  into by the  Borrower  and/or its
               Subsidiaries and such Bank pursuant to Section 8.21 of the Credit
               Agreement  and all  obligations  of the  Borrower  to any Bank in
               respect of Indebtedness of the Borrowers incurred as permitted by
               Section 8.07(e) of the Credit Agreement."

                    (E) The reference in Section 4.01 of the Guarantee Agreement
               to "Section 8.23 of the Credit  Agreement"  is hereby  amended to
               read "Section 8.22 of the Credit Agreement".

                    (F) The words "JNI's if it is a  Subsidiary  of JNI or JCI's
               if it is a Subsidiary  of JCI" in Section  4.03 of the  Guarantee
               Agreement is hereby amended to read "the Borrower's".

            Section 3.  CONSENT.  Each  Obligor hereby consents to the amendment
and restatement of Existing Credit  Agreement  pursuant to the Credit  Agreement
and each Subsidiary Guarantor

                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT

<PAGE>


                                   - 3 -



confirms its obligations under the Guarantee Agreement as amended hereby.

            Section 4.  REPRESENTATIONS  AND  WARRANTIES.  Each  Obligor  hereby
represents and warrants to the Banks and the Agent that all  representations and
warranties  set  forth in  Section  2 of the  Guarantee  Agreement  are true and
complete  on the date  hereof as if made on and as of the date  hereof and as if
each reference in said Section 2 to "the Credit  Agreement"  were deemed to be a
reference to the Credit Agreement.

            Section  5.  GUARANTEE.  By their  execution  and  delivery  of this
Amendment No. 1, JNI and JCI each hereby  jointly and  severally,  together with
the other Subsidiary Guarantors, guarantees to each Bank 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 Banks to, and the  Note(s)  held by each Bank
of, the Borrower  and all other  amounts from time to time owing to the Banks or
the Agent by the Borrower under the Credit Agreement and under the Notes and all
Other  Indebtedness  and interest  thereon,  in each case strictly in accordance
with the terms thereof,  all as more  particularly  provided in Section 2 of the
Guarantee Agreement, and also agrees to be bound by, and becomes a party to, the
Guarantee  Agreement as a Subsidiary  Guarantor for all purposes  thereunder and
the  Guarantee  Agreement  is hereby  amended  to add JNI and JCI as  Subsidiary
Guarantors party thereto.

            Section 6.  MISCELLANEOUS.  Except as  herein provided, the Security
Agreement  shall remain  unchanged and in full force and effect.  This Amendment
No. 1 may be executed in any number of  counterparts,  each of which shall be an
original and all of which, when taken together,  shall constitute one Agreement.
This Amendment No. 1 shall be governed by, and construed in accordance with, the
law of the State of New York.


                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT

<PAGE>


                                   - 4 -




            IN WITNESS WHEREOF, the undersigned have executed and delivered this
Amendment  No. 1 to  Guarantee  Agreement  as of the day and year first  written
above.


JOURNAL NEWS, INC.                        JOURNAL COMPANY, INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


THE LORAIN JOURNAL COMPANY                MANSFIELD JOURNAL COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


MISSISSIPPI VALLEY OFFSET                 NEW HAVEN REGISTER, INC.
  COMPANY, INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


NHR HOLDING COMPANY, INC.                 NH ACQUISITION CORP.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


COUNTY KIDS, INK.  (formerly              TORRINGTON ACQUISITION CORP.
known as Register Magazine
Network Inc.)

By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:



                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT

<PAGE>


                                   - 5 -



ALTON TELEGRAPH PRINTING                  CAPITOL CITY PUBLISHING
  CO.                                       CO., INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


BRISTOL ACQUISITION CORP.                 THE EVENING CALL PUBLISHING
                                            COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


EMPIRE STATE HOLDINGS                     NORTHEAST PUBLISHING INC.
  CORPORATION


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


NEW ENGLAND NEWSPAPERS, INC.              ST. LOUIS SUN PUBLISHING
                                            COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:

NORTHGATE COMMERCIAL                      SUBURBAN NEWSPAPERS OF
  PRINTING COMPANY                          GREATER ST. LOUIS, INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:



                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT

<PAGE>


                                   - 6 -



SUBURBAN FIELD MARKETING, INC.            TIMES HERALD PUBLISHING
                                            COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


SUNRISE INDUSTRIES, INC.                  TROY PUBLISHING CO., INC.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


NEW BRITAIN PUBLISHING COMPANY            THE HERALD PUBLISHING COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:



THE HERALD PUBLISHING COMPANY,            THE NEW BRITAIN HERALD REALTY
  EAST                                      COMPANY


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:


MIDDLETOWN ACQUISITION CORP.              NEW ENGLAND ACQUISITION CORP.


By____________________________            By____________________________
  Name:                                     Name:
  Title:                                    Title:

TAUNTON ACQUISITION CORP.


By____________________________
  Name:
  Title:


                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT

<PAGE>


                                   - 7 -





THE CHASE MANHATTAN BANK, as
  Agent


By___________________________
  Name:
  Title:


                    AMENDMENT NO. 1 TO GUARANTEE AGREEMENT

<PAGE>



                                                                     EXHIBIT C



                       [FORM OF COMPLIANCE CERTIFICATE]


                CERTIFICATE OF COMPLIANCE WITH CREDIT AGREEMENT
                           DATED AS OF _______, 1997


                           JOURNAL REGISTER COMPANY


            This Compliance Certificate is delivered pursuant to Section 8.01 of
the  Credit  Agreement  dated as of May 2,  1997 (as  amended,  supplemented  or
otherwise  modified  and in effect from time to time,  the  "CREDIT  AGREEMENT")
between Journal Register Company (the  "BORROWER"),  the Banks 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
___________, 1997.

            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:____________________



                            COMPLIANCE CERTIFICATE

<PAGE>



                                                                       ANNEX A

                            COMPLIANCE CERTIFICATE

                         For the fiscal [QUARTER/YEAR]
              ended on ________, 199_ (the "CALCULATION PERIOD")


SECTION 8.05(c)(ii)

The fair market  value of the  property,  
tools or equipment of the Borrower and
its  Subsidiaries  disposed  of  pursuant  
to  Section  8.05(c)(ii)  during  the
Calculation Period is                                  $--------

Aggregate year to date                                 $--------

MAXIMUM in any fiscal 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 is                                  $--------

Aggregate year to date                                 $--------

MAXIMUM in any fiscal year                             $5,000,000
                                                       ----------


SECTION 8.05(c)(vi)

The aggregate fair market value of the 
assets heretofore acquired as part of the
NEN Acquisition and identified on Annex 3 
to the Credit  Agreement sold for cash
pursuant to Section 8.05(c)(vi) is                     $--------

MAXIMUM                                                $750,000
                                                       ---------



                       ANNEX A TO COMPLIANCE CERTIFICATE

<PAGE>


                                   - 2 -



SECTION 8.06(h)

The maximum aggregate outstanding amount
of Indebtedness of the Borrower and its
Subsidiaries incurred at any time during 
the Calculation Period secured by Liens
permitted by Section 8.06(h) is                        $---------

MAXIMUM at any time                                    $4,000,000
                                                       ----------

SECTION 8.06(i)

The maximum aggregate outstanding amount 
of Indebtedness of the Borrower and its
Subsidiaries  incurred  at any time  
during  the  Calculation  Period  and other
obligations  of the  Borrower  and its  
Subsidiaries  as at the  last day of the
Calculation Period secured by Liens 
permitted by Section 8.06(i) is                        $---------

MAXIMUM at any time                                    $400,000
                                                       ----------

SECTION 8.07(e)

Permitted Additional Debt is                           $---------

MAXIMUM at any time                                    $125,000,000
                                                       ------------

SECTION 8.07(f)

The maximum  aggregate  outstanding  
principal or face amount of Indebtedness
of the  Borrower  and its  Subsidiaries  
incurred  during  the  Calculation  Period
pursuant to Section 8.07(f) is                         $

MAXIMUM at any time                                    $25,000,000
                                                       -----------


                       ANNEX A TO COMPLIANCE CERTIFICATE

<PAGE>


                                   - 3 -




SECTION 8.08(e)

The aggregate  amount of Investments  
made by the Borrowers and its Subsidiaries
during the Calculation Period pursuant 
to Section 8.08(e) equal                               $---------

MAXIMUM                                                $2,000,000
                                                       ----------

SECTION 8.09(a)

50% of the  cumulative  Excess Cash Flow 
that remains after giving effect to any
Acquisitions made as permitted by Section
8.05(b)(iv) equals                                     $--------

The Total Debt Ratio as at the last day
of the Calculation Period (as determined
in Section 8.11 below) is                              ______:1


SECTION 8.09(b)

The amount of cash dividends paid by the
Borrower on its common stock during the
Calculation Period pursuant to Section
8.09(b) is                                             $--------

MAXIMUM                                                $2,000,000
                                                       ----------

SECTION 8.09(c)

The amount of cash payments in respect of 
promissory  notes in respect of common
stock or options of the Borrower  repurchased 
from any management  official upon his death 
or termination  or in respect of promissory  
notes pursuant to Section 8.09(c) is                   $--------

MAXIMUM                                                $5,000,000
                                                       ----------




                       ANNEX A TO COMPLIANCE CERTIFICATE

<PAGE>


                                   - 4 -



SECTION 8.10

(a)   aggregate Capital Expenditures made
      by the Borrower and its
      Subsidiaries during the Calculation
      Period                                           $---------

(b)   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 180
      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 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)  
      $20,000,000  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]                   $---------






                       ANNEX A TO COMPLIANCE CERTIFICATE

<PAGE>


                                   - 5 -



SECTION 8.10(z)

Capital  Expenditures  made in respect of 
a printing facility in the area in and
surrounding Philadelphia, Pennsylvania
in excess of the amounts set forth above               $---------

MAXIMUM                                                $25,000,000
                                                       -----------


SECTION 8.11


(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 12 months  most
      recently ended on or 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)    amount specified for the
            relevant period in Annex 2 to
            the Credit Agreement                       $---------

   (iv)     Additions (or subtractions
            for) Acquisitions (other than
            the Taunton Acquisition) or
            Dispositions during the
            Calculation Period                         $---------

   (v)      Adjustments for Acquisitions
            (other than the Taunton
            Acquisition) or Dispositions               $---------






                       ANNEX A TO COMPLIANCE CERTIFICATE

<PAGE>


                                   - 6 -



   (vi)     reserves for additional
            litigation and receivables
            reserves of up to $2,500,000
            for any period during the
            fiscal year ended December 31,
            1996                                       $---------

   (vii)    capitalized expenses in
            respect of the Borrower's and
            its Subsidiaries' development
            and implementation of their
            on-line services of up to (x)
            $750,000 for any period during
            the fiscal year ended December
            31, 1996 and (y) $500,000 for
            any period during the fiscal
            year ended December 31, 1997               $---------

   (viii)   payments  under  the  Management  
            Bonus  Plan and  accrued  expenses
            relating  to the  discontinuance  
            of the  JRN's  StarShare  Plan not
            exceedinG $35,000,000                      $---------

(c)   Cash Flow ((i)  MINUS (ii) plus the
      sum of (iii), (iv), (v), (vi),
      (vii) and (viii)) is                             $---------

(d)   The ratio of (a) to (c) is                       _____:1

      MAXIMUM shall be [INSERT APPROPRIATE 
      RATIO FROM SECTION 8.11 OF THE CREDIT
      AGREEMENT] during [INSERT APPROPRIATE 
      YEAR FROM THE CREDIT AGREEMENT]



SECTION 8.12

(a)   Cash Flow of the Borrower and its  
      Subsidiaries (as determined in item 
      (b) of Section 8.11 above) for the 12 
      months most  recently  ended on or prior
      to the last day of the Calculation 
      Period is                                        $---------



<PAGE>

                                     - 7 -


(b)   Total Debt Service of the Borrower
      and its Subsidiaries for the
      Calculation Period:

      (i)   Scheduled  Payments  and  other  
            regularly   scheduled  payments  
            of principal of  Indebtedness  
            which  Indebtedness is included 
            in Total Debt; PLUS                        $----------

    (ii)    Interest Expense; PLUS                     $----------

   (iii)    payments of principal and interest 
            on Warburg  Subordinated Debt (as
            calculated in accordance with the 
            definition of "Total Debt Service"
            in the Credit Agreement);                  $----------

            equals                                     $----------

(c)   Capital Expenditures made during
      such Calculation Period                          $----------

(d)   taxes (other than deferred  taxes and  
      excluding  taxes paid or payable in
      cash in respect of income or activities  
      during  periods prior to December 31, 1994);     $----------

The ratio of (a) to ((b) PLUS (c) PLUS
(d)) is                                                _____:1

MINIMUM                                                1:1




                       ANNEX A TO COMPLIANCE CERTIFICATE

<PAGE>


                                   - 8 -




SECTION 8.13

(a)   Cash Flow of the Borrower and its  
      Subsidiaries (as determined in item (b)
      in Section 8.11 above) for the 12 
      months most  recently  ended on or prior
      to the last day of the Calculation Period is     $---------

(b)   cash Interest  Expense of the Borrowers  
      and its  Subsidiaries  for the 12
      months most recently ended on or 
      prior to the last day of the  Calculation
      Period is                                        $---------

The Interest Coverage Ratio ((a) to (b))
is                                                     _____:1

MINIMUM                                                2:1


SECTION 8.14

The Working Capital of the Borrower and
its Subsidiaries as at the last day of
the Calculation Period is                              $---------

MINIMUM                                                $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 for any fiscal year                            $500,000
                                                       ----------



                       ANNEX A TO COMPLIANCE CERTIFICATE

<PAGE>



                                                                     EXHIBIT D




                      [FORM OF CONFIDENTIALITY AGREEMENT]


                                    [DATE]


                           CONFIDENTIALITY AGREEMENT


[INSERT NAME AND
ADDRESS OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]

            Re:   Credit  Agreement  dated  as of May 2,  1997  between  Journal
                  Register Company (the "BORROWER"), each of the banks and other
                  financial  institutions  party thereto and The Chase Manhattan
                  Bank, as Agent (the "CREDIT AGREEMENT";  terms defined therein
                  being used herein as so  defined,  unless  otherwise  provided
                  herein).

Dear __________:

            As a Bank party to the  above-referenced  Credit Agreement,  we have
agreed with the Borrower  pursuant to Section  11.12 of the Credit  Agreement to
use reasonable  precautions to keep  confidential,  except as otherwise provided
therein,  all  non-public  information  identified  by  the  Borrower  as  being
confidential  at the time the same is  delivered  to us  pursuant  to the Credit
Agreement.

            As provided in said Section 11.12,  we are permitted to provide you,
as a prospective  [HOLDER OF A PARTICIPATION IN THE [REVOLVING  CREDIT/TERM/PAD]
LOANS] [ASSIGNEE BANK], with certain of such non-public  information  subject to
the  execution  and  delivery  by  you,  prior  to  receiving  such   non-public
information,  of a Confidentiality Agreement in this form. Such information will
not be made  available  to you until  your  execution  and  return to us of this
Confidentiality Agreement.

            Accordingly, in consideration of the foregoing, you agree (on behalf
of yourself and each of your  affiliates,  directors,  officers,  employees  and
representatives)  that (a) such  information  will not be used by you  except in
connection with the proposed  [PARTICIPATION]  [ASSIGNMENT]  mentioned above and
(b) you shall use  reasonable  precautions,  in accordance  with your  customary
procedures for handling confidential information and in accordance with safe and
sound banking practices, to keep such



                           CONFIDENTIALITY AGREEMENT

<PAGE>


                                   - 2 -



information confidential, provided that you may disclose such information (i) to
the extent required by statute,  rule,  regulation or judicial process,  (ii) to
your counsel,  (iii) to bank  examiners,  auditors or  accountants,  (iv) to the
Agent or any [OTHER] Bank (or to Chase Securities  Inc.), (v) in connection with
any  litigation  to which  any one or more of the Banks or the Agent is a party,
(vi) to your subsidiary or affiliate or a subsidiary or affiliate of any [OTHER]
Bank or the Agent,  (vii) to any assignee or  [SUB]participant  (or  prospective
assignee  or  [SUB]participant)  of or in any Loans so long as such  assignee or
[SUB]participant (or prospective  assignee or  [SUB]participant)  first executes
and  delivers  to you a  Confidentiality  Agreement  substantially  in the  form
hereof, (viii) to any other Person in the course of the enforcement of your, any
[OTHER] Bank's or the Agent's  rights or remedies  hereunder or under any Credit
Document,  (ix) to any other  creditor  of any  Obligor  at any time  during the
continuance  of an  Event  of  Default  or (x)  to  any  other  Person  if  such
information  becomes publicly available (other than by reason of a breach by you
of your obligations hereunder).

            Please  indicate  your  agreement to the foregoing by signing at the
place provided below the enclosed copy of this Confidentiality Agreement.

                                    Very truly yours,

                                    [INSERT NAME OF BANK]



                                    By_________________________
                                      Name:
                                      Title:

The foregoing is agreed to AS OF THE DATE OF THIS LETTER.

[INSERT NAME OF PROSPECTIVE
PARTICIPANT OR ASSIGNEE]


By_________________________
  Name:
  Title:



                           CONFIDENTIALITY AGREEMENT

<PAGE>



                                                                   EXHIBIT E-1



                              [Form of Term Note]

                                  TERM NOTE


$[____________]                                           [____________], 1997
                                                            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 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 Term Loan
made by the Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
May 2,  1997  (as  at any  time  amended  or  otherwise  modified,  the  "CREDIT
AGREEMENT")  between the Borrower,  the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent,  and evidences the Term Loan 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.


                                   TERM NOTE

<PAGE>


                                   - 2 -



            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:


                                   TERM NOTE

<PAGE>






                                   TERM LOAN


            This Term Note evidences the Term 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
---------   ----    --------    --------      ---------    ---------  -------




                                   TERM NOTE

<PAGE>



                                                                   EXHIBIT E-2









                        [Form of Revolving Credit Note]

                             REVOLVING CREDIT NOTE


$[____________]                                           [____________], 1997
                                                            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
May 2,  1997  (as  at any  time  amended  or  otherwise  modified,  the  "CREDIT
AGREEMENT")  between the Borrower,  the banks 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.



                             REVOLVING CREDIT NOTE

<PAGE>


                                   - 2 -




         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:



                             REVOLVING CREDIT NOTE

<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:

<TABLE>

<S>        <C>        <C>      <C>        <C>           <C>         <C>          <C>
                                                         AMOUNT
  DATE                                                    PAID,
  MADE,    PRINCIPAL                      DURATION       PREPAID,
CONTINUED   AMOUNT    TYPE                   OF         CONTINUED    UNPAID
   OR         OF       OF      INTEREST   INTEREST         OR       PRINCIPAL    NOTATION
CONVERTED    LOAN     LOAN       RATE      PERIOD       CONVERTED    AMOUNT      MADE BY
---------  --------   ----     --------   --------      ---------   ---------    -------



</TABLE>



                             REVOLVING CREDIT NOTE

<PAGE>



                                                                   EXHIBIT E-3



                        [Form of NEN Acquisition Note]

                             NEN ACQUISITION NOTE


$[____________]                                           [____________], 1997
                                                            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 NEN  Acquisition  Loan  made by the Bank to the
Borrower under the Credit  Agreement,  and the date such NEN Acquisition 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  NEN
Acquisition  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 NEN Acquisition Loan made by the Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
May 2,  1997  (as  at any  time  amended  or  otherwise  modified,  the  "CREDIT
AGREEMENT")  between the Borrower,  the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent,  and evidences the NEN Acquisition  Loan
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

                              NEN ACQUISITION NOTE

<PAGE>


                                      - 2 -



and for  prepayments  of NEN  Acquisition  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:


                              NEN ACQUISITION NOTE

<PAGE>






                             NEN ACQUISITION LOAN


            This NEN Acquisition  Note evidences the NEN Acquisition  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
---------  ----  --------    --------  ---------    ---------      -------




                              NEN ACQUISITION NOTE

<PAGE>



                                                                   EXHIBIT E-4



                    [Form of New Britain Acquisition Note]

                         NEN BRITAIN ACQUISITION NOTE


$[____________]                                           [____________], 1997
                                                            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 New Britain  Acquisition  Loan made by the Bank to
the  Borrower  under  the  Credit  Agreement,  and the  date  such  New  Britain
Acquisition  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 New Britain Acquisition 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 New Britain Acquisition Loan
made by the Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
May 2,  1997  (as  at any  time  amended  or  otherwise  modified,  the  "CREDIT
AGREEMENT")  between the Borrower,  the banks named therein (including the Bank)
and  The  Chase  Manhattan  Bank,  as  Agent,  and  evidences  the  New  Britain
Acquisition  Loan 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

                         NEW BRITAIN ACQUISITION NOTE

<PAGE>


                                   - 2 -



and for  prepayments  of New  Britain  Acquisition  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:


                         NEW BRITAIN ACQUISITION NOTE

<PAGE>






                         NEW BRITAIN ACQUISITION LOAN


            This  New  Britain   Acquisition  Note  evidences  the  New  Britain
Acquisition 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
---------    ----  --------    --------    ---------    ---------  -------




                         NEW BRITAIN ACQUISITION NOTE

<PAGE>



                                                                   EXHIBIT E-5




                            [Form of PAD Loan Note]

                                 PAD LOAN NOTE


$[____________]                                           [____________], 1997
                                                            New York, New York


            FOR VALUE RECEIVED,  each of JOURNAL  REGISTER  COMPANY,  a Delaware
corporation   (the   "BORROWER")   hereby   promise  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 (or
such lesser amount as shall equal the aggregate  unpaid  principal amount of the
PAD 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 such days and on such dates as has been agreed by the Bank and the  Borrower,
and to pay  interest on the unpaid  principal  amount of each such PAD Loan,  at
such office,  in like money and funds, for the period  commencing on the date of
such PAD Loan until such PAD 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 the PAD Loan made by the Bank to the Borrower  under
the Credit Agreement, and the date such PAD 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 PAD 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 PAD Loan made by the
Bank.

            This Note is one of the Notes under the Credit Agreement dated as of
May 2,  1997  (as  at any  time  amended  or  otherwise  modified,  the  "CREDIT
AGREEMENT")  between the Borrower,  the banks named therein (including the Bank)
and The Chase Manhattan Bank, as Agent,  and evidences the PAD Loans made by the
Bank  thereunder.  Capitalized  terms  used in this  Note  have  the  respective
meanings assigned to them in the Credit Agreement.


                                   PAD NOTE

<PAGE>


                                   - 2 -



            The Credit  Agreement  provides for the acceleration of the maturity
of this Note upon the  occurrence of certain  events and for  prepayments of PAD
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:


                                   PAD NOTE

<PAGE>





                                   PAD LOAN


            This PAD Note  evidences  the PAD 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
---------       ----    --------    --------  ---------    ---------  -------







                                   PAD NOTE