EXHIBIT 10.1


                              AMENDED AND RESTATED

                            364-DAY CREDIT AGREEMENT

                          Dated as of December 10, 1999

                  HERSHEY  FOODS  CORPORATION,   a  Delaware   corporation  (the
"COMPANY"),  the banks,  financial  institutions and other institutional lenders
(the "INITIAL  LENDERS")  listed on the signature pages hereof,  CITIBANK,  N.A.
("CITIBANK"),  as  administrative  agent  (the  "AGENT")  for  the  Lenders  (as
hereinafter defined), NATIONSBANC MONTGOMERY SECURITIES, INC., as co-syndication
agent, and SALOMON SMITH BARNEY INC., as co-syndication  agent and arranger (the
"CO-SYNDICATION AGENTS"), agree as follows:

PRELIMINARY  STATEMENT.  The Company, the Lenders,  Citibank,  the Agent and the
Co-Syndication  Agents (or their  respective  predecessors)  have entered into a
364-Day Credit Agreement  originally dated as of December 15, 1995,  Amended and
Restated as of December 13,  1996,  Amended and Restated as of December 12, 1997
and Amended and Restated as of December  11,  1998.  The Company and the Lenders
have agreed to further  amend and restate such Credit  Agreement as  hereinafter
set forth.

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  SECTION  1.01.   CERTAIN   DEFINED  TERMS.  As  used  in  this
Agreement,  the following terms shall have the following meanings (such meanings
to be equally  applicable  to both the  singular  and plural  forms of the terms
defined):

                  "ADVANCE" means a Revolving Credit Advance or a Competitive
         Bid Advance.


                  "AFFILIATE"  means,  as to any Person,  any other Person that,
         directly or indirectly,  controls,  is controlled by or is under common
         control  with such Person or is a director  or officer of such  Person.
         For purposes of this  definition,  the term  "control"  (including  the
         terms  "controlling",  "controlled by" and "under common control with")
         of a Person means the possession,  direct or indirect,  of the power to
         vote 5% or more of the  Voting  Stock of such  Person  or to  direct or
         cause the  direction  of the  management  and  policies of such Person,
         whether   through  the  ownership  of  Voting  Stock,  by  contract  or
         otherwise.

                  "AGENT'S ACCOUNT" means the account of the Agent maintained by
         the Agent at Citibank with its office at 399 Park Avenue, New York, New
         York 10043, Account No. 36852248, Attention: Bank Loan Syndications.


                  "APPLICABLE  LENDING  OFFICE"  means,  with  respect  to  each
         Lender,  such Lender's  Domestic  Lending  Office in the case of a Base
         Rate Advance and such Lender's Eurodollar Lending Office in the case of
         a  Eurodollar  Rate  Advance  and,  in the  case of a  Competitive  Bid


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         Advance, the office of such Lender notified by such Lender to the Agent
         as its Applicable  Lending Office with respect to such  Competitive Bid
         Advance.

                  "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
         entered into by a Lender and an Eligible Assignee,  and accepted by the
         Agent, in substantially the form of Exhibit C hereto.

                  "ASSUMING  LENDER" means an Eligible Assignee not previously a
         Lender that becomes a Lender hereunder pursuant to Section 2.05(c).


                  "ASSUMPTION AGREEMENT" means an agreement in substantially the
         form of Exhibit D hereto by which an Eligible Assignee agrees to become
         a Lender hereunder pursuant to Section 2.05(c), agreeing to be bound by
         all obligations of a Lender hereunder.



                  "BASE RATE"  means a  fluctuating  interest  rate per annum in
         effect  from time to time,  which rate per annum  shall at all times be
         equal to the higher of:

                           (a)      the rate of interest announced publicly by
         Citibank in New York, New York, from time to time, as Citibank's base
         rate; and

                           (b)      1/2 of one percent per annum above the
         Federal Funds Rate.

                  "BASE RATE  ADVANCE"  means a Revolving  Credit  Advance  that
         bears interest as provided in Section 2.07(a)(i).

                  "BORROWER" means the Company or any Designated Subsidiary,  as
the context requires.

                  "BORROWING" means a Revolving Credit Borrowing or a
Competitive Bid Borrowing.

                  "BUSINESS  DAY" means a day of the year on which banks are not
         required  or  authorized  by law to close in New York City and,  if the
         applicable  Business Day relates to any Eurodollar Rate Advance or LIBO
         Rate Advance,  on which dealings are carried on in the London interbank
         market.

                  "CHANGE  OF  CONTROL"  means a change in the  voting  power of
         Hershey Trust  Company,  as trustee for the Milton  Hershey School (the
         "HERSHEY  TRUST"),  such that  either  (A) (i) it no longer  controls a
         majority of the voting power of the Company's  Voting Stock and (ii) at
         the same time, another Person or group of Persons within the meaning of
         Section 13 or 14 of the  Securities  Exchange Act of 1934,  as amended,
         controls a percentage of the voting power of the Company's Voting Stock
         in excess of the  percentage  controlled by the Hershey Trust or (B) it
         no longer  controls at least 30% of the voting  power of the  Company's
         Voting Stock.


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<PAGE>


                  "COMMITMENT" has the meaning specified in Section 2.01.

                  "COMMITMENT  INCREASE"  has the meaning  specified  in Section
         2.05(c)(i).

                  "COMMITMENT  INCREASE  DATE"  has  the  meaning  specified  in
         Section 2.05(c)(i).

                  "COMPETITIVE  BID ADVANCE" means an advance by a Lender to any
         Borrower as part of a  Competitive  Bid  Borrowing  resulting  from the
         competitive bidding procedure described in Section 2.03 and refers to a
         Fixed Rate Advance or a LIBO Rate Advance.

                  "COMPETITIVE  BID BORROWING"  means a borrowing  consisting of
         simultaneous  Competitive  Bid Advances  from each of the Lenders whose
         offer  to make one or more  Competitive  Bid  Advances  as part of such
         borrowing has been accepted  under the  competitive  bidding  procedure
         described in Section 2.03.

                  "COMPETITIVE BID NOTE" means a promissory note of any Borrower
         payable  to the  order  of any  Lender,  in  substantially  the form of
         Exhibit A-2 hereto,  evidencing  the  indebtedness  of such Borrower to
         such Lender  resulting  from a  Competitive  Bid  Advance  made by such
         Lender to such Borrower.

                  "COMPETITIVE  BID  REDUCTION"  has the  meaning  specified  in
         Section 2.01.

                  "CONFIDENTIAL INFORMATION" means any non-public or proprietary
         information  disclosed  by any Borrower to the Agent or any Lender that
         such Borrower indicates is to be treated  confidentially,  but does not
         include any such information that is or becomes generally  available to
         the public or that is or becomes  available to the Agent or such Lender
         on a  non-confidential  basis from a source  other than such  Borrower,
         which source is not, to the best knowledge of the Agent or such Lender,
         subject to a confidentiality agreement with such Borrower.

                  "CONSOLIDATED"  refers to the  consolidation  of  accounts  in
         accordance with GAAP.

                  "CONSOLIDATED  INTEREST  EXPENSE"  means,  for any period with
         respect to the Company and its Subsidiaries,  net interest expense PLUS
         capitalized  interest for such  period,  in each case  determined  on a
         Consolidated basis in accordance with GAAP.

                  "CONSOLIDATED NET INTEREST EXPENSE" means, for any period with
         respect to the Company and its  Subsidiaries,  interest  expense  MINUS
         capitalized  interest and interest income for such period, in each case
         determined on a Consolidated basis in accordance with GAAP.

                  "CONVERT",  "CONVERSION"  and  "CONVERTED"  each  refers  to a
         conversion  of  Revolving  Credit  Advances of one Type into  Revolving
         Credit Advances of the other Type pursuant to Section 2.08 or 2.09.



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<PAGE>

                  "DECLINING  LENDER"  has  the  meaning  specified  in  Section
         2.18(a)(ii).

                  "DEBT" means, with respect to any Person: (a) indebtedness for
         borrowed money, (b) obligations evidenced by bonds,  debentures,  notes
         or other  similar  instruments,  (c)  obligations  to pay the  deferred
         purchase  price of  property or  services  (other  than trade  payables
         incurred in the ordinary course of business), (d) obligations as lessee
         under  leases  which shall have been or should be, in  accordance  with
         GAAP,  recorded as capital leases,  (e) all obligations,  contingent or
         otherwise, of such Person in respect of acceptances,  letters of credit
         (other than trade  letters of credit) or similar  extensions  of credit
         and (f) obligations under direct or indirect  guaranties in respect of,
         and  obligations,  contingent  or  otherwise,  to purchase or otherwise
         acquire,  or otherwise to assure a creditor against loss in respect of,
         indebtedness  or  obligations of any other Person of the kinds referred
         to in clauses (a) through (d) above.

                  "DEFAULT"  means any Event of  Default or any event that would
         constitute an Event of Default but for the  requirement  that notice be
         given or time elapse or both.

                  "DESIGNATED  SUBSIDIARY" means any corporate Subsidiary of the
         Company  designated  for  borrowing  privileges  under  this  Agreement
         pursuant to Section 9.08.

                  "DESIGNATION  LETTER"  means,  with respect to any  Designated
         Subsidiary,  a letter in the form of  Exhibit  F hereto  signed by such
         Designated Subsidiary and the Company.

                  "DISCLOSED  LITIGATION"  has the meaning  specified in Section
         3.01(b).

                  "DOMESTIC  LENDING OFFICE" means,  with respect to any Initial
         Lender,  the office of such Lender  specified as its "Domestic  Lending
         Office"  opposite its name on Schedule I hereto or, with respect to any
         other  Lender,  the office of such Lender  specified  as its  "Domestic
         Lending  Office" in the  Assumption  Agreement or in the Assignment and
         Acceptance  pursuant to which it became a Lender,  or such other office
         of such  Lender as such  Lender  may from time to time  specify  to the
         Company and the Agent.

                  "EFFECTIVE DATE" has the meaning specified in Section 3.01.

                  "ELIGIBLE  ASSIGNEE"  means (a) a Lender or any Affiliate of a
         Lender which is principally engaged in the commercial banking business,
         and (b) any bank or other financial  institution,  or any other Person,
         that has been  approved  in writing by the  Company and the Agent as an
         Eligible  Assignee for purposes of this Agreement;  PROVIDED,  HOWEVER,
         that  neither  the  Company's  nor  the  Agent's   approval   shall  be
         unreasonably withheld; and PROVIDED, FURTHER, HOWEVER, that the Company
         may withhold its approval if the Company  reasonably  believes  that an
         assignment  to such  Eligible  Assignee  pursuant to Section  9.07 will
         result in the  incurrence  of increased  costs  payable by any Borrower
         pursuant to Section 2.11 or 2.14.



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<PAGE>


                  "ENVIRONMENTAL ACTION" means any administrative, regulatory or
         judicial  action,   suit,  demand,   demand  letter,   claim,   notice,
         investigation,  proceeding, consent order or consent agreement relating
         to any Environmental Law,  Environmental  Permit or Hazardous Materials
         or arising from alleged injury to health, safety or the environment.

                  "ENVIRONMENTAL LAW" means any federal, state, local or foreign
         statute,  law,  ordinance,  rule,  regulation,  code, order,  judgment,
         decree  or  judicial  or  agency  interpretation,  policy  or  guidance
         relating to pollution or protection of the environment,  health, safety
         or natural resources,  including, without limitation, those relating to
         the  use,  handling,  transportation,   treatment,  storage,  disposal,
         release or discharge of Hazardous Materials.

                  "ENVIRONMENTAL    PERMIT"   means   any   permit,    approval,
         identification  number,  license or other authorization  required under
         any Environmental Law.

                  "ERISA" means the Employee  Retirement  Income Security Act of
         1974, as amended from time to time, and the regulations promulgated and
         rulings issued thereunder.

                  "ERISA  AFFILIATE" means any Person that for purposes of Title
         IV of ERISA is a member of the  Company's  controlled  group,  or under
         common  control with the Company,  within the meaning of Section 414 of
         the Internal Revenue Code.


                  "ERISA  EVENT"  means (a) (i) the  occurrence  of a reportable
         event, within the meaning of Section 4043 of ERISA, with respect to any
         Plan unless the 30-day  notice  requirement  with respect to such event
         has been waived by the PBGC, or (ii) the requirements of subsection (1)
         of Section  4043(b) of ERISA (without  regard to subsection (2) of such
         Section)  are met with a  contributing  sponsor,  as defined in Section
         4001(a)(13) of ERISA,  of a Plan,  and an event  described in paragraph
         (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably
         expected  to occur with  respect to such Plan within the  following  30
         days; (b) the  application for a minimum funding waiver with respect to
         a Plan; (c) the provision by the  administrator of any Plan of a notice
         of intent to  terminate  such Plan  pursuant to Section  4041(a)(2)  of
         ERISA  (including  any such  notice  with  respect to a plan  amendment
         referred  to in  Section  4041(e)  of  ERISA);  (d)  the  cessation  of
         operations  at a facility of the Company or any ERISA  affiliate in the
         circumstances described in Section 4062(e) of ERISA; (e) the withdrawal
         by the Company or any ERISA  Affiliate  from a Multiple  Employer  Plan
         during a plan year for which it was a substantial  employer, as defined
         in Section  4001(a)(2) of ERISA;  (f) the conditions for the imposition
         of a lien  under  Section  302(f)  of ERISA  shall  have  been met with
         respect  to any  Plan;  (g)  the  adoption  of an  amendment  to a Plan
         requiring  the  provision of security to such Plan  pursuant to Section
         307 of ERISA;  or (h) the  institution  by the PBGC of  proceedings  to
         terminate a Plan pursuant to Section 4042 of ERISA,  or the  occurrence
         of any event or  condition  described  in  Section  4042 of ERISA  that
         constitutes  grounds for the  termination  of, or the  appointment of a
         trustee to administer, such Plan.

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<PAGE>

                  "EUROCURRENCY  LIABILITIES"  has the meaning  assigned to that
         term in  Regulation D of the Board of Governors of the Federal  Reserve
         System, as in effect from time to time.

                  "EURODOLLAR LENDING OFFICE" means, with respect to any Initial
         Lender, the office of such Lender specified as its "Eurodollar  Lending
         Office"  opposite its name on Schedule I hereto or, with respect to any
         other Lender,  the office of such Lender  specified as its  "Eurodollar
         Lending  Office" in the  Assumption  Agreement or in the Assignment and
         Acceptance  pursuant to which it became a Lender (or, if no such office
         is specified,  its Domestic  Lending  Office),  or such other office of
         such Lender as such Lender may from time to time specify to the Company
         and the Agent.

                  "EURODOLLAR  RATE"  means,  for any  Interest  Period for each
         Eurodollar Rate Advance  comprising  part of the same Revolving  Credit
         Borrowing,  an interest rate per annum equal to the average (rounded to
         the nearest whole  multiple of 1/16 of 1% per annum,  or if there is no
         nearest whole multiple of 1/16 of 1% per annum,  then rounded upward to
         the nearest whole multiple of 1/16 of 1% per annum,  if such average is
         not such a  multiple)  of the rate per annum at which  deposits in U.S.
         dollars are offered by the  principal  office of each of the  Reference
         Banks in London,  England to prime banks in the London interbank market
         at 11:00 A.M.  (London  time) two Business Days before the first day of
         such Interest Period in an amount substantially equal to such Reference
         Bank's Eurodollar Rate Advance comprising part of such Revolving Credit
         Borrowing  to be  outstanding  during  such  Interest  Period and for a
         period  equal to such  Interest  Period.  The  Eurodollar  Rate for any
         Interest Period for each Eurodollar Rate Advance comprising part of the
         same Revolving Credit Borrowing shall be determined by the Agent on the
         basis of applicable  rates  furnished to and received by the Agent from
         the  Reference  Banks two  Business  Days  before the first day of such
         Interest Period, SUBJECT, HOWEVER, to the provisions of Section 2.08.

                  "EURODOLLAR  RATE ADVANCE"  means a Revolving  Credit  Advance
         that bears interest as provided in Section 2.07(a)(ii).

                  "EURODOLLAR  RATE  RESERVE  PERCENTAGE"  with  respect  to any
         Lender for any Interest Period for all Eurodollar Rate Advances or LIBO
         Rate Advances  comprising  part of the same Borrowing means the reserve
         percentage applicable during such Interest Period (or, if more than one
         such  percentage  shall be so  applicable,  the daily  average  of such
         percentages  for those days in such  Interest  Period  during which any
         such percentage shall be so applicable) under  regulations  issued from
         time to time by the Board of  Governors of the Federal  Reserve  System
         (or any successor) for determining the reserve requirement  (including,
         without  limitation,  any  emergency,  supplemental  or other  marginal
         reserve  requirement)  actually  imposed on such Lender with respect to
         liabilities   or  assets   consisting  of  or  including   Eurocurrency
         Liabilities (or with respect to any other category of liabilities  that
         includes deposits by reference to which the interest rate on Eurodollar


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<PAGE>

         Rate Advances or LIBO Rate Advances is determined)  having a term equal
         to such Interest Period.

                  "EVENTS OF DEFAULT" has the meaning specified in Section 6.01.

                  "EXCLUDED TAXES" has the meaning specified in Section 2.14(a).

                  "EXTENDING  LENDER"  has  the  meaning  specified  in  Section
         2.18(a)(i).

                  "FEDERAL  FUNDS RATE"  means,  for any period,  a  fluctuating
         interest  rate per annum  equal for each day during  such period to the
         weighted average of the rates on overnight  Federal funds  transactions
         with members of the Federal  Reserve  System  arranged by Federal funds
         brokers,  as published  for such day (or, if such day is not a Business
         Day, for the next preceding  Business Day) by the Federal  Reserve Bank
         of New York, or, if such rate is not so published for any day that is a
         Business  Day,  the  average  of the  quotations  for  such day on such
         transactions  received by the Agent from three Federal funds brokers of
         recognized standing selected by it.

                  "FINAL MATURITY DATE" means (a) the Termination Date or (b) if
         the Final Maturity Date is extended  pursuant to Section  2.18(b),  the
         date  requested as the Final  Maturity Date by the Company  pursuant to
         Section 2.18(b).

                  "FIXED RATE  ADVANCES"  has the meaning  specified  in Section
         2.03(a)(i).

                  "GAAP" has the meaning specified in Section 1.03.

                  "GUARANTY"  means  the  guaranty  made by the  Company  to the
         Lenders and the Agent pursuant to Article VII.

                  "GUARANTEED  OBLIGATIONS" has the meaning specified in Section
         7.01(a).

                  "HAZARDOUS   MATERIALS"  means  (a)  petroleum  and  petroleum
         products,  byproducts  or breakdown  products,  radioactive  materials,
         asbestos-containing materials,  polychlorinated biphenyls and radon gas
         and  (b) any  other  chemicals,  materials  or  substances  designated,
         classified  or  regulated  as  hazardous  or toxic or as a pollutant or
         contaminant under any Environmental Law.

                  "INCREASING  EXTENDING  LENDER" has the meaning  specified  in
         Section 2.18(a)(ii)(A).

                  "INCREASING  LENDER"  has the  meaning  specified  in  Section
         2.05(c)(i).

                  "INSUFFICIENCY"  means,  with respect to any Plan, the amount,
         if any,  of its  unfunded  benefit  liabilities,  as defined in Section
         4001(a)(18) of ERISA.



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<PAGE>


                  "INTEREST  PERIOD"  means,  for each  Eurodollar  Rate Advance
         comprising  part of the same Revolving  Credit  Borrowing and each LIBO
         Rate Advance comprising part of the same Competitive Bid Borrowing, the
         period  commencing on the date of such  Eurodollar Rate Advance or LIBO
         Rate  Advance or the date of the  Conversion  of any Base Rate  Advance
         into such  Eurodollar  Rate  Advance  and ending on the last day of the
         period selected by the Borrower that requested such Borrowing  pursuant
         to the  provisions  below and,  thereafter,  with respect to Eurodollar
         Rate Advances, each subsequent period commencing on the last day of the
         immediately preceding Interest Period and ending on the last day of the
         period selected by such Borrower  pursuant to the provisions below. The
         duration of each such Interest  Period shall be one, two,  three or six
         months,  as the  applicable  Borrower may, upon notice  received by the
         Agent not  later  than  11:00  A.M.  (New York City  time) on the third
         Business Day prior to the first day of such  Interest  Period,  select;
         PROVIDED, HOWEVER, that:

                           (i)      such Borrower may not select any Interest
                  Period that ends after the Final Maturity Date then in effect;

                           (ii) Interest Periods commencing on the same date for
                  Eurodollar Rate Advances comprising part of the same Revolving
                  Credit Borrowing or for LIBO Rate Advances  comprising part of
                  the  same  Competitive  Bid  Borrowing  shall  be of the  same
                  duration;

                           (iii)  whenever the last day of any  Interest  Period
                  would  otherwise occur on a day other than a Business Day, the
                  last day of such Interest Period shall be extended to occur on
                  the next succeeding Business Day, PROVIDED,  HOWEVER, that, if
                  such  extension  would  cause  the last  day of such  Interest
                  Period to occur in the next following calendar month, the last
                  day of such Interest  Period shall occur on the next preceding
                  Business Day; and

                           (iv)  whenever the first day of any  Interest  Period
                  occurs on a day of an initial  calendar  month for which there
                  is no numerically corresponding day in the calendar month that
                  succeeds such initial  calendar  month by the number of months
                  equal to the number of months in such  Interest  Period,  such
                  Interest  Period  shall end on the last  Business  Day of such
                  succeeding calendar month.

                  "INTERNAL  REVENUE  CODE" means the  Internal  Revenue Code of
         1986, as amended from time to time, and the regulations promulgated and
         rulings issued thereunder.

                  "LENDERS" means the Initial Lenders, each Assuming Lender that
         shall  become a party  hereto  pursuant  to  Section  2.05(c)  and each
         Eligible  Assignee that shall become a party hereto pursuant to Section
         9.07.

                  "LIBO RATE" means,  for any Interest  Period for all LIBO Rate
         Advances  comprising  part of the same  Competitive  Bid Borrowing,  an
         interest  rate per annum  equal to the average  (rounded  upward to the
         nearest  whole  multiple  of 1/16 of 1% per  annum,  or if  there is no


                                       8
<PAGE>

         nearest whole multiple of 1/16 of 1% per annum,  then rounded upward to
         the nearest whole multiple of 1/16 of 1% per annum,  if such average is
         not such a  multiple)  of the rate per annum at which  deposits in U.S.
         dollars are offered by the  principal  office of each of the  Reference
         Banks in London,  England to prime banks in the London interbank market
         at 11:00 A.M.  (London  time) two Business Days before the first day of
         such  Interest  Period in an amount  substantially  equal to the amount
         that would be such Reference  Bank's  respective  ratable share of such
         Borrowing if such Borrowing were to be a Revolving  Credit Borrowing to
         be  outstanding  during such Interest  Period and for a period equal to
         such Interest  Period.  The LIBO Rate for any Interest  Period for each
         LIBO Rate Advance comprising part of the same Competitive Bid Borrowing
         shall be  determined  by the  Agent on the  basis of  applicable  rates
         furnished  to and  received by the Agent from the  Reference  Banks two
         Business  Days before the first day of such Interest  Period,  SUBJECT,
         however, to the provisions of Section 2.08.

                  "LIBO RATE  ADVANCES"  has the  meaning  specified  in Section
         2.03(a)(i).

                  "LIEN" means any mortgage,  pledge,  lien,  security interest,
         conditional  sale or other title  retention  agreement or other similar
         charge or encumbrance.

                  "MAJORITY LENDERS" means at any time Lenders owed at least 51%
         of the then aggregate  unpaid  principal amount of the Revolving Credit
         Advances  owing to  Lenders,  or, if no such  principal  amount is then
         outstanding, Lenders having at least 51% of the Commitments.

                  "MATERIAL ADVERSE CHANGE" means any material adverse change in
         the business, financial condition, operations, performance or principal
         manufacturing properties of the Company and its Subsidiaries taken as a
         whole.

                  "MATERIAL  ADVERSE EFFECT" means a material  adverse effect on
         (a) the  business,  financial  condition,  operations,  performance  or
         principal manufacturing  properties of the Company and its Subsidiaries
         taken as a whole,  (b) the  rights  and  remedies  of the  Agent or the
         Lenders  under  this  Agreement  or any Note or (c) the  ability of any
         Borrower to perform its  obligations  (other than payment  obligations)
         under this Agreement or any Note.

                  "MATERIAL  SUBSIDIARY" means, at any date of determination,  a
         Subsidiary of the Company that,  either  individually  or together with
         its  Subsidiaries,  taken  as  a  whole,  has  total  assets  exceeding
         $300,000,000 on such date.

                  "MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
         Section  4001(a)(3)  of  ERISA,  to  which  the  Company  or any  ERISA
         Affiliate is making or accruing an obligation to make contributions, or
         has  within  any of the  preceding  five plan  years made or accrued an
         obligation to make contributions.


                                       9
<PAGE>


                  "MULTIPLE  EMPLOYER  PLAN" means a single  employer  plan,  as
         defined in Section  4001(a)(15)  of ERISA,  that (a) is maintained  for
         employees of the Company or any ERISA Affiliate and at least one Person
         other  than  the  Company  and  the  ERISA  Affiliates  or  (b)  was so
         maintained  and in respect of which the Company or any ERISA  Affiliate
         could have  liability  under Section 4064 or 4069 of ERISA in the event
         such plan has been or were to be terminated.

                  "NOTE" means a Revolving Credit Note or a Competitive Bid
         Note.


                  "NOTICE  OF  REVOLVING  CREDIT   BORROWING"  has  the  meaning
         specified in Section 2.02(a).

                  "NOTICE  OF   COMPETITIVE   BID  BORROWING"  has  the  meaning
         specified in Section 2.03(a).

                  "OTHER TAXES" has the meaning specified in Section 2.14(b).

                  "PBGC" means the Pension Benefit Guaranty  Corporation (or any
         successor).

                  "PERMITTED  LIENS" means such of the  following as to which no
         enforcement,  collection,  execution,  levy or  foreclosure  proceeding
         shall  have  been  commenced:  (a)  Liens for  taxes,  assessments  and
         governmental  charges or levies to the extent not  required  to be paid
         under  Section  5.01(b)  hereof;  (b)  Liens  imposed  by law,  such as
         materialmen's,  mechanics',  carriers', workmen's and repairmen's Liens
         and other similar Liens arising in the ordinary course of business; (c)
         pledges or deposits to secure  obligations under workers'  compensation
         laws  or  similar   legislation   or  to  secure  public  or  statutory
         obligations;  (d) easements,  rights of way and other  encumbrances  on
         title  to  real  property  that do not  render  title  to the  property
         encumbered thereby  unmarketable or materially adversely affect the use
         of such  property for its present  purposes;  (e) Liens  arising  under
         leases or  subleases  granted to others  that  would not be  reasonably
         likely  to  have a  Material  Adverse  Effect  on the  Company  and its
         Subsidiaries taken as a whole; (f) Liens granted in connection with any
         interest rate or foreign currency options, commodity contracts, futures
         or  similar  agreements  entered  into  by  the  Company  or any of its
         Subsidiaries in the ordinary course of business;  and (g) Liens granted
         in  connection  with  corporate-owned  life  insurance  programs of the
         Company or any of its Subsidiaries.

                  "PERSON"   means  an  individual,   partnership,   corporation
         (including   a   business   trust),   joint   stock   company,   trust,
         unincorporated association,  limited liability company or other entity,
         or a government or any political subdivision or agency thereof.

                  "PLAN" means a Single Employer Plan or a Multiple Employer
         Plan.

                  "PRE-TAX INCOME FROM  CONTINUING  OPERATIONS"  means,  for any
         period with respect to the Company and its Subsidiaries, net income (or
         net  loss)  from  operations   (determined  without  giving  effect  to
         extraordinary  or  non-recurring  gains or losses)  PLUS the sum of (a)


                                       10
<PAGE>

         Consolidated  Net  Interest  Expense,  (b) income tax  expense  and (c)
         non-recurring  non-cash  charges  (including the  cumulative  effect of
         accounting changes,  restructuring charges and gains or losses from the
         sale of businesses), in each case determined on a Consolidated basis in
         accordance with GAAP;  PROVIDED,  HOWEVER,  that the LIFO adjustment to
         the  determination  of Pre-Tax  Income from  Continuing  Operations for
         purposes  of the  quarterly  financial  statements  and the  compliance
         certificate  delivered  pursuant to Section 5.01(h)(i) shall be made in
         accordance with the Company's best estimation.

                  "PROCESS AGENT" has the meaning specified in Section 9.12(a).

                  "REFERENCE  BANKS" means  Citibank,  Bank of America  National
         Trust & Savings Association and Deutsche Bank AG New York and/or Cayman
         Islands  Branches,  or, in the event that less than two of such Lenders
         remain  Lenders  hereunder  at any  time,  any  other  commercial  bank
         designated  by the Company  and  approved  by the  Majority  Lenders as
         constituting a "Reference Bank" hereunder.

                  "REGISTER" has the meaning specified in Section 9.07(d).

                  "REPLACEMENT  LENDER"  has the  meaning  specified  in Section
         2.18(a)(ii)(A).

                  "REVOLVING CREDIT ADVANCE" means an advance by a Lender to any
         Borrower as part of a Revolving  Credit  Borrowing by such Borrower and
         refers to a Base Rate  Advance or a Eurodollar  Rate  Advance  (each of
         which shall be a "TYPE" of Revolving Credit Advance).

                  "REVOLVING CREDIT  BORROWING" means a borrowing  consisting of
         simultaneous Revolving Credit Advances of the same Type made by each of
         the Lenders pursuant to Section 2.01.

                  "REVOLVING  CREDIT  NOTE"  means  a  promissory  note  of  any
         Borrower payable to the order of any Lender,  in substantially the form
         of Exhibit A-1 hereto,  evidencing the aggregate  indebtedness  of such
         Borrower to such Lender  resulting from the Revolving  Credit  Advances
         made by such Lender to such Borrower.

                  "SINGLE  EMPLOYER  PLAN"  means a  single  employer  plan,  as
         defined in Section  4001(a)(15)  of ERISA,  that (a) is maintained  for
         employees  of the Company or any ERISA  Affiliate  and no Person  other
         than the Company and the ERISA  Affiliates or (b) was so maintained and
         in  respect  of which the  Company  or any ERISA  Affiliate  could have
         liability  under  Section 4069 of ERISA in the event such plan has been
         or were to be terminated.

                  "SUBSIDIARY" of any Person means any corporation, partnership,
         limited liability company,  trust or estate of which (or in which) more
         than  50% of (a)  the  issued  and  outstanding  capital  stock  having
         ordinary  voting power to elect a majority of the Board of Directors of

                                       11
<PAGE>


         such corporation  (irrespective of whether at the time capital stock of
         any other  class or  classes  of such  corporation  shall or might have
         voting power upon the occurrence of any contingency),  (b) the interest
         in the  capital  or  profits  of  such  limited  liability  company  or
         partnership  (c) the beneficial  interest in such trust or estate is at
         the time directly or indirectly owned or controlled by such Person,  by
         such Person and one or more of its other Subsidiaries or by one or more
         of such Person's other Subsidiaries.

                  "TAXES" has the meaning specified in Section 2.14(a).

                  "TERMINATION  DATE" means the earlier of (a)  December 8, 2000
         or, if the Termination  Date is extended  pursuant to Section  2.18(a),
         the date to which the Termination Date is extended  pursuant to Section
         2.18(a),  and (b) the date of termination  in whole of the  Commitments
         pursuant to Section 2.05(a), 2.05(b) or 6.01.

                  "VOTING STOCK" means capital stock issued by a corporation, or
         equivalent  interests  in any other  Person,  the  holders of which are
         ordinarily,  in the absence of contingencies,  entitled to vote for the
         election of directors (or persons performing similar functions) of such
         Person,  even  if the  right  so to  vote  has  been  suspended  by the
         happening of such a contingency.

                  "WITHDRAWAL  LIABILITY" has the meaning specified in Part I of
         Subtitle E of Title IV of ERISA.

                  SECTION 1.02.  COMPUTATION OF TIME PERIODS.  In this Agreement
in the computation of periods of time from a specified date to a later specified
date,  the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding".

                  SECTION  1.03.  ACCOUNTING  TERMS.  All  accounting  terms not
specifically  defined  herein shall be construed in  accordance  with  generally
accepted accounting  principles consistent with those applied in the preparation
of the financial statements referred to in Section 4.01(e) ("GAAP").

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES


                                       12
<PAGE>


                  SECTION  2.01.  THE  REVOLVING  CREDIT  ADVANCES.  Each Lender
severally  agrees,  on the terms and conditions  hereinafter  set forth, to make
Revolving  Credit Advances to any Borrower from time to time on any Business Day
during the period  from the  Effective  Date  until the  Termination  Date in an
aggregate amount for all Borrowers not to exceed at any time outstanding (a) the
amount set forth  opposite such  Lender's name on the signature  pages hereof or
(b) if such  Lender  has become a Lender  hereunder  pursuant  to an  Assumption
Agreement or has increased its  Commitment  pursuant to Section  2.05(c),  or if
such Lender has entered into any Assignment and Acceptance, the amount set forth
for such  Lender in the  Register  maintained  by the Agent  pursuant to Section
9.07(d),  in each case as such amount may be reduced pursuant to Section 2.05(a)
or (b) (such Lender's  "COMMITMENT"),  PROVIDED that the aggregate amount of the
Commitments  of the Lenders shall be deemed used from time to time to the extent
of the aggregate  amount of the  Competitive  Bid Advances then  outstanding and
such deemed use of the aggregate  amount of the  Commitments  shall be allocated
among the Lenders ratably according to their respective Commitments (such deemed
use of the  aggregate  amount  of  the  Commitments  being  a  "COMPETITIVE  BID
REDUCTION").  Each Revolving Credit Borrowing shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof (or, if less,
an  aggregate  amount  equal to the  amount by which the  aggregate  amount of a
proposed  Competitive  Bid  Borrowing  requested  by any  Borrower  exceeds  the
aggregate  amount of Competitive Bid Advances  offered to be made by the Lenders
and accepted by such Borrower in respect of such  Competitive Bid Borrowing,  if
such Competitive Bid Borrowing is made on the same date and by the same Borrower
as such  Revolving  Credit  Borrowing)  and shall  consist of  Revolving  Credit
Advances of the same Type made on the same day by the Lenders ratably  according
to their respective Commitments.  Within the limits of each Lender's Commitment,
any Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.10
and reborrow under this Section 2.01.

                  SECTION 2.02.  MAKING THE REVOLVING CREDIT ADVANCES.  (a) Each
Revolving  Credit  Borrowing  shall be made on notice,  given not later than (i)
11:00 A.M.  (New York City time) on the third  Business Day prior to the date of
the  proposed  Revolving  Credit  Borrowing  in the case of a  Revolving  Credit
Borrowing  consisting of  Eurodollar  Rate Advances or (ii) 11:00 A.M. (New York
City time) on the day of the proposed  Revolving Credit Borrowing in the case of
a Revolving Credit Borrowing  consisting of Base Rate Advances,  by any Borrower
to the  Agent,  which  shall  give to  each  Lender  prompt  notice  thereof  by
telecopier or telex. Each such notice of a Revolving Credit Borrowing (a "NOTICE
OF REVOLVING CREDIT BORROWING") shall be by telephone,  confirmed immediately in
writing, or telecopier or telex in substantially the form of Exhibit B-1 hereto,
specifying  therein the requested (w) date of such Revolving  Credit  Borrowing,
(x) Type of Advances  comprising such Revolving Credit Borrowing,  (y) aggregate
amount of such Revolving  Credit  Borrowing,  and (z) in the case of a Revolving
Credit Borrowing consisting of Eurodollar Rate Advances, initial Interest Period
for each such Revolving  Credit  Advance.  Each Lender shall,  before (i) in the
case of a Eurodollar  Rate  Advance,  11:00 A.M. (New York City time) or (ii) in
the case of a Base Rate  Advance,  1:00 P.M. (New York City time) on the date of
such  Revolving  Credit  Borrowing,  make  available  for  the  account  of  its
Applicable  Lending  Office to the  Agent at the  Agent's  Account,  in same day
funds, such Lender's ratable portion of such Revolving Credit  Borrowing.  After
the  Agent's  receipt  of such  funds  and upon  fulfillment  of the  applicable
conditions set forth in Article III, the Agent will make such funds available to


                                       13
<PAGE>

the Borrower  requesting the Revolving  Credit  Borrowing at the Agent's address
referred to in Section 9.02.

                  (b)  Anything  herein  to  the  contrary  notwithstanding,   a
Borrower  may not select  Eurodollar  Rate  Advances  for any  Revolving  Credit
Borrowing if the  obligation  of the Lenders to make  Eurodollar  Rate  Advances
shall then be suspended pursuant to Section 2.08 or 2.12.

                  (c) Each Notice of Revolving  Credit Borrowing of any Borrower
shall be irrevocable and binding on such Borrower.  In the case of any Revolving
Credit Borrowing that the related Notice of Revolving Credit Borrowing specifies
is to be comprised of Eurodollar  Rate Advances,  the Borrower  requesting  such
Revolving  Credit  Borrowing  shall  indemnify  each Lender,  after receipt of a
written request by such Lender setting forth in reasonable  detail the basis for
such request, against any loss, cost or expense actually incurred by such Lender
as a result of any  failure  by such  Borrower  to fulfill on or before the date
specified in such Notice of Revolving Credit Borrowing for such Revolving Credit
Borrowing the applicable conditions set forth in Article III, including, without
limitation,  any loss (other than loss of anticipated profits),  cost or expense
actually  incurred by reason of the  liquidation or  reemployment of deposits or
other funds  acquired by such Lender to fund the Revolving  Credit Advance to be
made  by such  Lender  as part of such  Revolving  Credit  Borrowing  when  such
Revolving Credit Advance, as a result of such failure, is not made on such date.

                  (d) Unless the Agent shall have received  notice from a Lender
prior to the date of any Revolving Credit Borrowing comprised of Eurodollar Rate
Advances  or prior to the time of the  proposed  disbursement  of any  Revolving
Credit Borrowing  comprised of Base Rate Advances that such Lender will not make
available to the Agent such Lender's  ratable  portion of such Revolving  Credit
Borrowing, the Agent may assume that such Lender has made such portion available
to the Agent on the date of such Revolving  Credit  Borrowing in accordance with
subsection  (a) of this  Section  2.02 and the Agent may, in reliance  upon such
assumption,  make available to the Borrower  requesting  such  Revolving  Credit
Borrowing on such date a  corresponding  amount.  If and to the extent that such
Lender shall not have so made such ratable portion  available to the Agent, such
Lender and such  Borrower  severally  agree to repay to the Agent  forthwith  on
demand such  corresponding  amount together with interest thereon,  for each day
from the date such amount is made available to such Borrower until the date such
amount is repaid to the Agent, at (i) in the case of such Borrower, the interest
rate  applicable  at the  time to  Revolving  Credit  Advances  comprising  such
Revolving  Credit  Borrowing  and (ii) in the case of such  Lender,  the Federal
Funds Rate. If such Lender shall repay to the Agent such  corresponding  amount,
such amount so repaid shall constitute such Lender's Revolving Credit Advance as
part of such Revolving Credit Borrowing for purposes of this Agreement.

                  (e) The  failure  of any Lender to make the  Revolving  Credit
Advance to be made by it as part of any  Revolving  Credit  Borrowing  shall not
relieve  any  other  Lender of its  obligation,  if any,  hereunder  to make its
Revolving Credit Advance on the date of such Revolving Credit Borrowing,  but no
Lender  shall be  responsible  for the  failure of any other  Lender to make the
Revolving  Credit  Advance  to be made by such  other  Lender on the date of any
Revolving Credit Borrowing.

                                       14
<PAGE>

                  SECTION 2.03. THE  COMPETITIVE  BID ADVANCES.  (a) Each Lender
severally  agrees that any Borrower may make  Competitive  Bid Borrowings  under
this  Section  2.03 from time to time on any Business Day during the period from
the date hereof until the date occurring 30 days prior to the  Termination  Date
in the manner  set forth  below;  PROVIDED  that,  following  the making of each
Competitive Bid Borrowing, the aggregate amount of the Advances then outstanding
shall  not  exceed  the  aggregate  amount  of the  Commitments  of the  Lenders
(computed without regard to any Competitive Bid Reduction).

                  (i) A Borrower may request a Competitive  Bid Borrowing  under
         this Section 2.03 by delivering to the Agent, by telecopier or telex, a
         notice of a  Competitive  Bid Borrowing (a "NOTICE OF  COMPETITIVE  BID
         BORROWING"),   in  substantially   the  form  of  Exhibit  B-2  hereto,
         specifying therein the requested (u) date of such proposed  Competitive
         Bid Borrowing,  (v) aggregate  amount of such proposed  Competitive Bid
         Borrowing,  (w)  interest  rate basis  (LIBO Rate or fixed  rate) to be
         offered by the Lenders,  (x) in the case of a Competitive Bid Borrowing
         consisting of LIBO Rate Advances,  Interest Period of each  Competitive
         Bid Advance to be made as part of such Competitive Bid Borrowing, or in
         the case of a  Competitive  Bid  Borrowing  Consisting  of  Fixed  Rate
         Advances,  maturity date for repayment of each Fixed Rate Advance to be
         made as part of such Competitive Bid Borrowing (which maturity date may
         not be earlier  than the date  occurring  7 days after the date of such
         Competitive  Bid  Borrowing  or later than the  earlier of (I) 180 days
         after  the  date  of  such  Competitive  Bid  Borrowing  and  (II)  the
         Termination Date), (y) interest payment date or dates relating thereto,
         and (z) other terms (if any) to be applicable to such  Competitive  Bid
         Borrowing,  not later than 10:00 A.M. (New York City time) (A) at least
         one  Business  Day prior to the date of the  proposed  Competitive  Bid
         Borrowing,  if such Borrower shall specify in the Notice of Competitive
         Bid  Borrowing  that the rates of interest to be offered by the Lenders
         shall be fixed  rates  per  annum  (the  Advances  comprising  any such
         Competitive  Bid  Borrowing  being  referred  to herein as "FIXED  RATE
         ADVANCES") and (B) at least four Business Days prior to the date of the
         proposed  Competitive  Bid  Borrowing,  if such Borrower  shall instead
         specify in the Notice of  Competitive  Bid Borrowing  that the rates of
         interest  to be offered by the Lenders are to be based on the LIBO Rate
         (the Advances  comprising such Competitive Bid Borrowing being referred
         to herein as "LIBO RATE  ADVANCES").  Each  Notice of  Competitive  Bid
         Borrowing  of a  Borrower  shall be  irrevocable  and  binding  on such
         Borrower.  Any Notice of  Competitive  Bid  Borrowing  by a  Designated
         Subsidiary shall be given to the Agent in accordance with the preceding
         sentence  through the Company on behalf of such Designated  Subsidiary.
         The Agent shall in turn promptly notify each Lender of each request for
         a Competitive  Bid Borrowing  received by it from a Borrower by sending
         such Lender a copy of the related Notice of Competitive Bid Borrowing.


                  (ii) Each Lender may, if, in its sole discretion, it elects to
         do so,  irrevocably  offer to make one or more Competitive Bid Advances
         to the Borrower proposing the Competitive Bid Borrowing as part of such

                                       15
<PAGE>

         proposed  Competitive  Bid  Borrowing  at a rate or rates  of  interest
         specified by such Lender in its sole discretion, by notifying the Agent
         (which shall give prompt notice thereof to such Borrower),  before 9:30
         A.M. (New York City time) on the date of such proposed  Competitive Bid
         Borrowing,  in the case of a Competitive  Bid  Borrowing  consisting of
         Fixed Rate  Advances and before  10:00 A.M.  (New York City time) three
         Business  Days  before  the  date  of  such  proposed  Competitive  Bid
         Borrowing,  in the case of a Competitive  Bid  Borrowing  consisting of
         LIBO Rate  Advances,  of the minimum  amount and maximum amount of each
         Competitive  Bid Advance  which such Lender would be willing to make as
         part of such proposed  Competitive  Bid Borrowing  (which  amounts may,
         subject to the proviso to the first  sentence of this Section  2.03(a),
         exceed such Lender's Commitment, if any), the rate or rates of interest
         therefor and such Lender's  Applicable  Lending  Office with respect to
         such  Competitive  Bid  Advance;  PROVIDED  that  if the  Agent  in its
         capacity as a Lender shall, in its sole  discretion,  elect to make any
         such offer,  it shall  notify  such  Borrower of such offer at least 30
         minutes  before  the  time  and on the  date on  which  notice  of such
         election  is to be given  to the  Agent by the  other  Lenders.  If any
         Lender  shall  elect not to make such an offer,  such  Lender  shall so
         notify the Agent, before 10:00 A.M. (New York City time) on the date on
         which notice of such  election is to be given to the Agent by the other
         Lenders, and such Lender shall not be obligated to, and shall not, make
         any Competitive Bid Advance as part of such  Competitive Bid Borrowing;
         PROVIDED  that the failure by any Lender to give such notice  shall not
         cause such Lender to be obligated to make any  Competitive  Bid Advance
         as part of such proposed Competitive Bid Borrowing.

                  (iii) The Borrower  proposing  the  Competitive  Bid Borrowing
         shall,  in turn,  before 10:30 A.M. (New York City time) on the date of
         such proposed  Competitive Bid Borrowing,  in the case of a Competitive
         Bid  Borrowing  consisting of Fixed Rate Advances and before 11:00 A.M.
         (New  York City  time)  three  Business  Days  before  the date of such
         proposed  Competitive  Bid Borrowing,  in the case of a Competitive Bid
         Borrowing consisting of LIBO Rate Advances, either:

                           (x)      cancel such Competitive Bid Borrowing by
                  giving the Agent notice to that effect, or

                           (y)  accept  one or  more of the  offers  made by any
                  Lender or Lenders  pursuant to  paragraph  (ii) above,  in its
                  sole  discretion,  by giving notice to the Agent of the amount
                  of each  Competitive  Bid Advance (which amount shall be equal
                  to or greater  than the minimum  amount,  and equal to or less
                  than the  maximum  amount,  notified  to such  Borrower by the
                  Agent  on  behalf  of such  Lender  for such  Competitive  Bid
                  Advance  pursuant to paragraph  (ii) above) to be made by each
                  Lender as part of such  Competitive Bid Borrowing,  and reject
                  any  remaining  offers made by Lenders  pursuant to  paragraph
                  (ii)  above  by  giving  the  Agent  notice  to  that  effect;
                  PROVIDED,  HOWEVER,  that such  Borrower  shall not accept any
                  offer in excess of the  requested bid amount for any maturity.
                  Such  Borrower  shall  accept the offers made by any Lender or
                  Lenders  to make  Competitive  Bid  Advances  in  order of the

                                       16
<PAGE>


                  lowest  to the  highest  rates  of  interest  offered  by such
                  Lenders. If two or more Lenders have offered the same interest
                  rate,  the amount to be borrowed at such interest rate will be
                  allocated  among such Lenders in proportion to the amount that
                  each such Lender offered at such interest rate.

                  (iv) If the Borrower  proposing  the  Competitive  Bid Advance
         notifies  the Agent that such  Competitive  Bid  Borrowing is cancelled
         pursuant  to  paragraph  (iii)(x)  above,  the Agent  shall give prompt
         notice thereof to the Lenders and such  Competitive Bid Borrowing shall
         not be made.

                  (v) If the  Borrower  proposing  the  Competitive  Bid Advance
         accepts  one or  more  of the  offers  made by any  Lender  or  Lenders
         pursuant to paragraph  (iii)(y) above, the Agent shall in turn promptly
         notify (A) each Lender that has made an offer as described in paragraph
         (ii) above,  of the date and aggregate  amount of such  Competitive Bid
         Borrowing  and  whether or not any offer or offers  made by such Lender
         pursuant to paragraph  (ii) above have been accepted by such  Borrower,
         (B) each  Lender that is to make a  Competitive  Bid Advance as part of
         such  Competitive Bid Borrowing,  of the amount of each Competitive Bid
         Advance  to be made  by such  Lender  as part of such  Competitive  Bid
         Borrowing,  and (C)  each  Lender  that is to  make a  Competitive  Bid
         Advance as part of such Competitive Bid Borrowing,  upon receipt,  that
         the Agent has  received  forms of  documents  appearing  to fulfill the
         applicable  conditions set forth in Article III. Each Lender that is to
         make a  Competitive  Bid  Advance  as  part  of  such  Competitive  Bid
         Borrowing shall,  before 12:00 Noon (New York City time) on the date of
         such  Competitive  Bid Borrowing  specified in the notice received from
         the Agent pursuant to clause (A) of the preceding sentence or any later
         time  when  such  Lender  shall  have  received  notice  from the Agent
         pursuant to clause (C) of the preceding  sentence,  make  available for
         the  account  of its  Applicable  Lending  Office  to the  Agent at the
         Agent's  Account,  in same day  funds,  such  Lender's  portion of such
         Competitive   Bid  Borrowing.   Upon   fulfillment  of  the  applicable
         conditions  set forth in Article III and after  receipt by the Agent of
         such funds,  the Agent will make such funds  available to such Borrower
         at the Agent's address referred to in Section 9.02. Promptly after each
         Competitive  Bid  Borrowing  the Agent will  notify  each Lender of the
         amount of the Competitive Bid Borrowing, the consequent Competitive Bid
         Reduction  and the dates  upon  which such  Competitive  Bid  Reduction
         commenced and will terminate.

                  (vi) If the Borrower  proposing  the  Competitive  Bid Advance
         notifies  the Agent that it accepts  one or more of the offers  made by
         any Lender or Lenders pursuant to paragraph (iii)(y) above, such notice
         of acceptance  shall be irrevocable and binding on such Borrower.  Such
         Borrower  shall  indemnify  each  Lender,  after  receipt  of a written
         request by such Lender setting forth in reasonable detail the basis for
         such request,  against any loss, cost or expense  actually  incurred by
         such Lender as a result of any  failure by such  Borrower to fulfill on
         or before the date specified in the related  Notice of Competitive  Bid
         Borrowing for such Competitive Bid Borrowing the applicable  conditions
         set forth in  Article  III,  including,  without  limitation,  any loss
         (other  than loss of  anticipated  profits),  cost or expense  actually

                                       17
<PAGE>

         incurred by reason of the  liquidation or  reemployment  of deposits or
         other funds acquired by such Lender to fund the Competitive Bid Advance
         to be made by such  Lender as part of such  Competitive  Bid  Borrowing
         when such Competitive Bid Advance,  as a result of such failure, is not
         made on such date.

<PAGE>

                  (b) Each  Competitive  Bid Borrowing  shall be in an aggregate
amount of  $10,000,000  or an integral  multiple of $1,000,000 in excess thereof
and,  following the making of each Competitive Bid Borrowing,  the Borrower that
has borrowed  through such Competitive Bid Borrowing shall be in compliance with
the  limitation set forth in the proviso to the first sentence of subsection (a)
above.

                  (c) Within the limits and on the  conditions set forth in this
Section  2.03,  each  Borrower  may from time to time borrow  under this Section
2.03,  repay or prepay pursuant to subsection (d) below, and reborrow under this
Section 2.03.

                  (d) Each Borrower that has borrowed  through a Competitive Bid
Borrowing  shall repay to the Agent for the account of each Lender that has made
a Competitive Bid Advance,  on the maturity date of such Competitive Bid Advance
(such  maturity date being that specified by such Borrower for repayment of such
Competitive  Bid  Advance in the related  Notice of  Competitive  Bid  Borrowing
delivered  pursuant to subsection  (a)(i) above and provided in the  Competitive
Bid Note evidencing such  Competitive  Bid Advance),  the then unpaid  principal
amount of such Competitive Bid Advance. A Borrower shall have no right to prepay
any principal  amount of any  Competitive Bid Advance without the consent of the
Lender  that has made such  Competitive  Bid Advance or as is  specified  in the
Notice of Competitive Bid Borrowing.

                  (e) Each Borrower that has borrowed  through a Competitive Bid
Borrowing shall pay interest on the unpaid  principal amount of each Competitive
Bid  Advance  from the date of such  Competitive  Bid  Advance  comprising  such
Competitive Bid Borrowing to the date the principal  amount of such  Competitive
Bid Advance is repaid in full, at the rate of interest for such  Competitive Bid
Advance  specified  by the Lender  making  such  Competitive  Bid Advance in its
notice with respect  thereto  delivered  pursuant to subsection  (a)(ii)  above,
payable on the  interest  payment date or dates  specified by such  Borrower for
such  Competitive Bid Advance in the related Notice of Competitive Bid Borrowing
delivered  pursuant to subsection  (a)(i) above,  as provided in the Competitive
Bid Note evidencing such Competitive Bid Advance. Upon the occurrence and during
the continuance of an Event of Default under Section 6.01(a), each Borrower that
has borrowed though a Competitive Bid Borrowing shall pay interest on the amount
of unpaid principal of and interest on each  Competitive Bid Advance  comprising
such Competitive Bid Borrowing that is owing to a Lender,  payable in arrears on
the date or dates interest is payable thereon,  at a rate per annum equal at all
times to 2% per  annum  above  the rate per  annum  required  to be paid on such
Competitive  Bid Advance under the terms of the  Competitive Bid Note evidencing
such  Competitive Bid Advance unless  otherwise  agreed in such  Competitive Bid
Note.
                                       18
<PAGE>
                  (f) The  indebtedness  of any  Borrower  resulting  from  each
Competitive  Bid  Advance  made to such  Borrower as part of a  Competitive  Bid
Borrowing shall be evidenced by a separate Competitive Bid Note of such Borrower
payable to the order of the Lender making such Competitive Bid Advance.


                  SECTION 2.04.  FEES.  (a)  FACILITY FEE.  The Company agrees
to pay to the Agent for the  account of each  Lender a facility  fee (i) on
the  aggregate  amount of such Lender's  Commitment  from the date hereof in the
case of each  Initial  Lender  and  from the  effective  date  specified  in the
Assumption  Agreement  or the  Assignment  and  Acceptance,  as the case may be,
pursuant to which it became a Lender in the case of each other  Lender until the
Termination  Date and (ii) if the Company has extended the Final  Maturity  Date
pursuant to Section 2.18(b),  on the aggregate principal amount of the Revolving
Credit  Advances  payable to such  Lender from the  Termination  Date until such
Final  Maturity  Date,  in each case of clauses (i) and (ii) at a rate per annum
equal to .055%,  payable in arrears  quarterly on the last day of each February,
May, August and November,  commencing  February 29, 2000, and on the Termination
Date and on any extended Final Maturity Date.

                  (b)      AGENT'S FEES.  The Company shall pay to the Agent for
 its own account such fees as may from time to time be agreed in writing between
 the Company and the Agent.

                  SECTION  2.05.  TERMINATION,  REDUCTION  OR  INCREASE  OF  THE
COMMITMENTS.  (a) TERMINATION OR RATABLE  REDUCTION BY THE COMPANY.  The Company
shall have the right, upon at least three Business Days' notice to the Agent, to
terminate  in  whole  or  reduce  ratably  in part the  unused  portions  of the
respective  Commitments  of the Lenders,  PROVIDED  that each partial  reduction
shall be in the  aggregate  amount of  $10,000,000  or an  integral  multiple of
$1,000,000 in excess thereof and PROVIDED  FURTHER that the aggregate  amount of
the  Commitments  of the Lenders  shall not be reduced to an amount that is less
than the  aggregate  principal  amount  of the  Competitive  Bid  Advances  then
outstanding. The aggregate amount of the Commitments, once reduced or terminated
as provided in this Section 2.05(a),  may not be reinstated,  except as provided
in Section 2.05(c) below.

                  (b)  TERMINATION  BY  THE  MAJORITY  LENDERS  UPON  CHANGE  OF
CONTROL.  In the event that a Change of Control  occurs,  (i) the Agent shall at
the request,  or may with the consent, of the Majority Lenders, by notice to the
Company  given not later than 10 Business  Days after receipt by the Lenders and
the Agent of notice  from the  Company  of such  Change of Control  pursuant  to
Section 5.01(h)(iv),  declare the Commitments  (determined without giving effect
to any Competitive Bid Reduction) to be terminated in whole, effective as of the
date set forth in such  notice,  PROVIDED,  HOWEVER,  that such date shall be no
earlier  than 10  Business  Days after the  Company's  receipt of such notice of
termination  and (ii)  each  Borrower's  right to make a  Borrowing  under  this
Agreement  shall  thereupon be suspended  and shall  remain  suspended  until 10
Business  Days after  receipt by the  Lenders  and the Agent of notice  from the
Company of such  Change of Control  pursuant to Section  5.01(h)(iv)  unless the
Majority  Lenders shall have exercised  their right to terminate the Commitments
as provided in clause (i) of this Section 2.05(b), in which case each Borrower's
right to make a Borrowing under this Agreement shall remain  suspended until the
effective date of such  termination.  A notice of  termination  pursuant to this

                                       19
<PAGE>

Section 2.05(b) shall have the effect of accelerating  the outstanding  Advances
of the Lenders and the Notes of the Lenders and each Borrower shall, on or prior
to the effective date of the termination of the Commitments,  prepay or cause to
be prepaid the  outstanding  principal  amount of all Advances owing by any such
Borrower to the Lenders,  together with accrued  interest thereon to the date of
such payment, any facility fees or other fees payable to the Lenders pursuant to
the  provisions  of Section 2.04,  and all other amounts  payable to the Lenders
under this  Agreement  (including,  but not limited to, any  increased  costs or
other amounts owing under Section 2.11 and any  indemnification  for Taxes under
Section 2.14).  Upon such  prepayment and the  termination of the Commitments in
accordance with this Section 2.05(b),  the obligations of the Lenders under this
Agreement shall, by the provisions hereof, be released and discharged.

                  (c) INCREASE BY THE COMPANY.  (i) The Company may at any time,
by notice to the Agent,  propose that the aggregate amount of the Commitments be
increased (each such proposed  increase being a "COMMITMENT  INCREASE") by up to
$250,000,000  in excess of the aggregate of the  Commitments as of the Effective
Date,  effective  as at a date (the  "COMMITMENT  INCREASE  DATE") that shall be
specified in such notice and that shall be (A) prior to the Termination Date and
(B) at least 15 Business Days after the date of such notice; PROVIDED,  HOWEVER,
that (w) the Company may not propose more than two Commitment  Increases  during
any  calendar  year,  (x) the  minimum  proposed  Commitment  Increase  for each
Commitment  Increase  Date  shall  be  $50,000,000,  (y) in no event  shall  the
aggregate  amount of the Commitments at any time exceed  $450,000,000 and (z) no
Default shall have occurred and be continuing on such  Commitment  Increase Date
or shall  result  from such  Commitment  Increase.  The Agent  shall  notify the
Lenders and any Eligible  Assignees  requested by the Company and  acceptable to
the Agent as potential  Assuming  Lenders  hereunder of the proposed  Commitment
Increase  promptly upon the Agent's  receipt of any such notice.  It shall be in
each Lender's sole  discretion  whether to increase its Commitment  hereunder in
connection with the proposed Commitment Increase. No later than 10 Business Days
after its  receipt  of the  Company's  notice,  each  Lender  that is willing to
increase  its  Commitment  hereunder  (each  such  Lender  being an  "INCREASING
LENDER")  shall  deliver  to the Agent a notice in which such  Lender  shall set
forth the maximum  increase in its Commitment to which such Lender is willing to
agree,  and the  Agent  shall  promptly  provide  to the  Company a copy of such
Increasing  Lender's  notice.  The Agent  shall  cooperate  with the  Company in
discussions with the Lenders and Eligible Assignees with a view to arranging the
proposed  Commitment  Increase through the increase of the Commitments of one or
more of the  Lenders  and/or  the  addition  of one or more  Eligible  Assignees
acceptable  to the Company  and the Agent as Assuming  Lenders and as parties to
this  Agreement;  PROVIDED,  HOWEVEr,  that the minimum  Commitment of each such
Assuming Lender that becomes a party to this Agreement  pursuant to this Section
2.05(c) shall be  $10,000,000;  and PROVIDED,  FURTHER,  that any allocations of
Commitments shall be determined by the Company.

                  (ii) If agreement is reached prior to the relevant  Commitment
Increase  Date  with  any  Increasing  Lenders  and  Assuming  Lenders  as  to a
Commitment  Increase  (the  amount  of which may be less  than  (subject  to the
limitation  set forth in clause (i)(x) of this Section  2.05(c)) but not greater
than that amount  specified  in the  applicable  notice from the  Company),  the
Company shall  deliver,  no later than one Business Day prior to the  Commitment
Increase Date, a notice thereof in reasonable detail to the Agent (and the Agent
shall give notice thereof to the Lenders,  including any Assuming Lenders).  The

                                       20
<PAGE>

Assuming  Lenders,  if any, shall become Lenders  hereunder as of the Commitment
Increase Date and the  Commitments of any  Increasing  Lenders and such Assuming
Lenders  shall become or be, as the case may be, as of the  Commitment  Increase
Date, the amounts specified in the notice delivered by the Company to the Agent;
PROVIDED, HOWEVER, that:


                  (x) the Agent  shall  have  received  on or prior to 9:00 A.M.
         (New  York  City  time)  on the  Commitment  Increase  Date  (A) a duly
         executed  Revolving  Credit  Note from each  Borrower,  dated as of the
         Commitment  Increase Date and in substantially  the form of Exhibit A-1
         hereto for each Assuming  Lender,  and dated the date to which interest
         on the existing  Revolving Credit Note of such Borrower shall have been
         paid and in  substantially  the form of  Exhibit  A-1  hereto  for each
         Increasing Lender, in each case in an amount equal to the Commitment of
         each such Assuming Lender and each such Increasing  Lender after giving
         effect  to  such  Commitment  Increase,  (B) a  certificate  of a  duly
         authorized  officer of the Company  stating  that no event has occurred
         and is continuing,  or would result from such Commitment Increase, that
         constitutes a Default, and that each of the other applicable conditions
         to such  Commitment  Increase set forth in this  Section  2.05(c) to be
         fulfilled  by the  Company  has been  satisfied  and (C) an  opinion of
         counsel  for the  Company  in  substantially  the form of  Exhibit  H-1
         hereto,  dated the  Commitment  Increase  Date  (with  copies  for each
         Lender, including each Assuming Lender);

                  (y) with respect to each Assuming Lender, the Agent shall have
         received,  on or  prior  to 9:00  A.M.  (New  York  City  time)  on the
         Commitment  Increase  Date,  an  appropriate  Assumption  Agreement  in
         substantially  the form of  Exhibit D  hereto,  duly  executed  by such
         Assuming Lender and the Company, and acknowledged by the Agent; and

                  (z) each Increasing  Lender shall have delivered to the Agent,
         on or  prior to 9:00  A.M.  (New  York  City  time)  on the  Commitment
         Increase Date, (A) its existing  Revolving Credit Note or Notes and (B)
         confirmation  in writing  satisfactory to the Agent as to its increased
         Commitment, with a copy of such confirmation to the Company.

                  (iii) Upon its receipt of  confirmation  from a Lender that it
is increasing its Commitment hereunder,  together with the appropriate Revolving
Credit  Note or Notes,  certificate  and opinion  referred to in clause  (ii)(x)
above,  the Agent  shall (A) record  the  information  contained  therein in the
Register and (B) give prompt notice thereof to the Company.  Upon its receipt of
an Assumption  Agreement executed by an Assuming Lender  representing that it is
an Eligible  Assignee,  together with the appropriate  Revolving  Credit Note or
Notes,  certificate and opinion  referred to in clause (ii)(x) above,  the Agent
shall, if such Assumption  Agreement has been completed and is in  substantially
the form of Exhibit D hereto, (x) accept such Assumption  Agreement,  (y) record
the  information  contained  therein in the Register and (z) give prompt  notice
thereof to the Company.

                                       21
<PAGE>

                  (iv) In the  event  that the  Agent  shall  not have  received
notice  from the  Company  as to such  agreement  on or prior to the  Commitment
Increase  Date or the  Company  shall,  by  notice  to the  Agent  prior  to the
Commitment Increase Date, withdraw its proposal for a Commitment Increase or any
of the actions  provided for above in clauses  (ii)(x) through (ii)(z) shall not
have occurred by 9:00 A.M. (New York City time) on the Commitment Increase Date,
such  proposal  by the  Company  shall be deemed not to have been made.  In such
event, any actions theretofore taken under clauses (ii)(x) through (ii)(z) above
shall be deemed to be of no effect  and all the rights  and  obligations  of the
parties shall continue as if no such proposal had been made.

                  (v) In the event  that the Agent  shall have  received  notice
from the Company as to such  agreement  on or prior to the  Commitment  Increase
Date and each of the actions  provided for in clauses  (ii)(x)  through  (ii)(z)
above shall have  occurred by 9:00 A.M.  (New York City time) on the  Commitment
Increase  Date,  the Agent shall  notify the  Lenders  (including  any  Assuming
Lenders) of the occurrence of the  Commitment  Increase Date promptly and in any
event by 10:00 A.M.  (New York City time) on such date by  telecopier,  telex or
cable. Each Increasing Lender and each Assuming Lender shall,  before 11:00 A.M.
(New York City time) on the  Commitment  Increase  Date,  make available for the
account of its Applicable Lending Office to the Agent at the Agent's Account, in
same day funds,  in the case of such  Assuming  Lender,  an amount equal to such
Assuming  Lender's  ratable  portion of the  Revolving  Credit  Borrowings  then
outstanding (calculated based on its Commitment as a percentage of the aggregate
Commitments outstanding after giving effect to the relevant Commitment Increase)
and, in the case of such Increasing Lender, an amount equal to the excess of (i)
such Increasing Lender's ratable portion of the Revolving Credit Borrowings then
outstanding (calculated based on its Commitment as a percentage of the aggregate
Commitments outstanding after giving effect to the relevant Commitment Increase)
over (ii) such  Increasing  Lender's  ratable  portion of the  Revolving  Credit
Borrowings then outstanding  (calculated based on its Commitment (without giving
effect to the relevant  Commitment  Increase) as a percentage  of the  aggregate
Commitments  without giving effect to the relevant Commitment  Increase).  After
the Agent's receipt of such funds from each such Increasing Lender and each such
Assuming Lender, the Agent will promptly thereafter cause to be distributed like
funds to the  other  Lenders  for the  account  of their  respective  Applicable
Lending Offices in an amount to each other Lender such that the aggregate amount
of the outstanding  Revolving  Credit Advances owing to each Lender after giving
effect  to  such  distribution  equals  such  Lender's  ratable  portion  of the
Revolving Credit Borrowings then outstanding  (calculated based on such Lender's
Commitment as a percentage of the aggregate Commitments outstanding after giving
effect to the relevant  Commitment  Increase).  If the Commitment  Increase Date
shall  occur on a date that is not the last day of the  Interest  Period for all
Eurodollar Rate Advances then outstanding, (a) the Company shall pay any amounts
owing pursuant to Section  9.04(d) as a result of the  distributions  to Lenders
under  this  Section  2.05(c)(v)  and (b) for each  Revolving  Credit  Borrowing
comprised of Eurodollar Rate Advances,  the respective Revolving Credit Advances
made by the Increasing Lenders and the Assuming Lenders pursuant to this Section
2.05(c)(v)  shall be Base Rate Advances  until the last day of the then existing
Interest Period for such Revolving Credit Borrowing.

                                       22
<PAGE>

                  SECTION 2.06.  REPAYMENT OF REVOLVING  CREDIT  ADVANCES.  Each
Borrower shall repay to the Agent for the ratable  account of the Lenders on the
Final  Maturity Date the  aggregate  principal  amount of the  Revolving  Credit
Advances then outstanding in respect of such Borrower.

                  SECTION  2.07.  INTEREST ON  REVOLVING  CREDIT  ADVANCES.  (a)
SCHEDULED  INTEREST.  Each Borrower  shall pay interest on the unpaid  principal
amount of each  Revolving  Credit  Advance owing by such Borrower to each Lender
from the date of such Revolving Credit Advance until such principal amount shall
be paid in full, at the following rates per annum:

                  (i) BASE RATE ADVANCES.  During such periods as such Revolving
         Credit  Advance is a Base Rate  Advance,  a rate per annum equal at all
         times to the sum of (x) the Base Rate in effect  from time to time PLUS
         (y) at all times that the  aggregate  principal  amount of the  Advance
         exceeds 50% of the aggregate  Commitments,  0.10% per annum, payable in
         arrears  quarterly on the last day of each  February,  May,  August and
         November  during such  periods  and on the date such Base Rate  Advance
         shall be Converted or paid in full.

                  (ii)  EURODOLLAR  RATE  ADVANCES.  During such periods as such
         Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum
         equal at all times  during  each  Interest  Period  for such  Revolving
         Credit Advance to the sum of (x) the Eurodollar  Rate for such Interest
         Period for such  Revolving  Credit Advance PLUS (y) .20% per annum PLUS
         (z) at all times that the  aggregate  principal  amount of the  Advance
         exceeds 50% of the aggregate  Commitments,  0.10% per annum, payable in
         arrears on the last day of such  Interest  Period and, if such Interest
         Period  has a  duration  of more than  three  months,  on each day that
         occurs  during such  Interest  Period every three months from the first
         day of such  Interest  Period  and on the  date  such  Eurodollar  Rate
         Advance shall be Converted or paid in full.

                  (b)  DEFAULT  INTEREST.  Upon the  occurrence  and  during the
continuance  of an Event of Default under Section  6.01(a),  each Borrower shall
pay interest on (i) the unpaid principal amount of each Revolving Credit Advance
owing by such Borrower to each Lender,  payable in arrears on the dates referred
to in clause (a)(i) or (a)(ii) above,  at a rate per annum equal at all times to
2% per  annum  above the rate per annum  required  to be paid on such  Revolving
Credit  Advance  pursuant  to  clause  (a)(i) or  (a)(ii)  above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder by such Borrower that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full,  payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum  required to be paid
on Base Rate Advances pursuant to clause (a)(i) above.

                  (c)  ADDITIONAL  INTEREST ON  EURODOLLAR  RATE  ADVANCES.  The
applicable  Borrower  shall pay to each Lender,  so long as such Lender shall be
required  under  regulations  of the Board of Governors  of the Federal  Reserve
System to maintain  reserves with respect to liabilities or assets consisting of
or  including  Eurocurrency  Liabilities,  additional  interest  on  the  unpaid

                                       23
<PAGE>

principal  amount  of  each  Eurodollar  Rate  Advance  of such  Lender  to such
Borrower,  from the date of such Advance until such principal  amount is paid in
full, at an interest rate per annum equal at all times to the remainder obtained
by subtracting  (i) the Eurodollar  Rate for the applicable  Interest Period for
such Advance from (ii) the rate obtained by dividing such  Eurodollar  Rate by a
percentage  equal to 100% MINUS the Eurodollar  Rate Reserve  Percentage of such
Lender  for such  Interest  Period,  payable on each date on which  interest  is
payable on such Advance.  Such  additional  interest shall be determined by such
Lender and notified in reasonable detail to such Borrower through the Agent.

<PAGE>

                  SECTION 2.08. INTEREST RATE DETERMINATION.  (a) Each Reference
Bank  agrees to  furnish  to the Agent  timely  information  for the  purpose of
determining  each  Eurodollar Rate and each LIBO Rate. If any one or more of the
Reference  Banks shall not furnish such timely  information to the Agent for the
purpose of determining  any such interest  rate, the Agent shall  determine such
interest  rate on the basis of timely  information  furnished  by the  remaining
Reference  Banks.  The Agent shall give prompt notice to the relevant  Borrowers
and the Lenders of the  applicable  interest  rate  determined  by the Agent for
purposes of Section  2.07(a)(i) or (ii), and the rate, if any, furnished by each
Reference  Bank for the purpose of  determining  the interest rate under Section
2.07(a)(ii).

                  (b) If, with  respect to any  Eurodollar  Rate  Advances,  the
Majority  Lenders  notify the Agent that the  Eurodollar  Rate for any  Interest
Period for such Advances will not  adequately  reflect the cost to such Majority
Lenders of making,  funding or  maintaining  their  respective  Eurodollar  Rate
Advances  for such  Interest  Period  (which  cost each such  Lender  reasonably
determines in good faith is material),  the Agent shall forthwith so notify each
Borrower  and the  Lenders,  whereupon  (i) each  Eurodollar  Rate  Advance will
automatically,  on the last day of the then existing  Interest Period  therefor,
Convert  into a Base Rate  Advance,  and (ii) the  obligation  of the Lenders to
make, or to Convert  Revolving  Credit  Advances into,  Eurodollar Rate Advances
shall be suspended  until the Agent shall  notify each  Borrower and the Lenders
that the circumstances causing such suspension no longer exist.

                  (c)  If  any  Borrower,   in  requesting  a  Revolving  Credit
Borrowing  comprised  of  Eurodollar  Rate  Advances,  shall  fail to select the
duration of the Interest  Period for such Eurodollar Rate Advances in accordance
with the provisions  contained in the definition of "Interest Period" in Section
1.01,  the Agent will forthwith so notify such Borrower and the Lenders and such
Advances  will  automatically,  on the last day of the  then  existing  Interest
Period therefor, Convert into Base Rate Advances.

                  (d) On the date on which the aggregate unpaid principal amount
of  Eurodollar  Rate Advances  comprising  any  Borrowing  shall be reduced,  by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically,  on the last day of the then existing  Interest Period  therefor,
Convert into Base Rate Advances.

                  (e) Upon the  occurrence  and  during the  continuance  of any
Event of Default,  (i) each Eurodollar Rate Advance will  automatically,  on the
last day of the then existing Interest Period therefor, Convert into a Base Rate


                                       24
<PAGE>

Advance and (ii) the  obligation of the Lenders to make, or to Convert  Advances
into, Eurodollar Rate Advances shall be suspended.

                  (f)  If  fewer  than  two  Reference   Banks  furnish   timely
information to the Agent for  determining  the Eurodollar  Rate or LIBO Rate for
any  Eurodollar  Rate Advances or LIBO Rate  Advances,  as the case may be, such
Eurodollar Rate or LIBO Rate shall be the interest rate per annum  determined by
the Agent to be the offered rate per annum at which deposits in U.S. dollars for
a maturity  comparable to the Interest  Period for such Eurodollar Rate Advances
or LIBO Rate Advances, as the case may be, appears on the Telerate Page 3750 (or
any  successor  page) as of 11:00 A.M.  (London time) two Business Days prior to
the first day of such  Interest  Period (the  "TELERATE");  PROVIDED that if the
Telerate is not then available:

                  (i) the Agent shall forthwith notify the relevant Borrower and
         the  Lenders  that the  interest  rate  cannot be  determined  for such
         Eurodollar Rate Advances or LIBO Rate Advances, as the case may be;

                  (ii) with  respect  to  Eurodollar  Rate  Advances,  each such
         Advance  will  automatically,  on the  last  day of the  then  existing
         Interest Period therefor,  Convert into a Base Rate Advance (or if such
         Advance  is then a Base  Rate  Advance,  will  continue  as a Base Rate
         Advance); and

                  (iii) the  obligation of the Lenders to make  Eurodollar  Rate
         Advances or LIBO Rate Advances or to Convert  Revolving Credit Advances
         into  Eurodollar Rate Advances shall be suspended until the Agent shall
         notify each  Borrower  and the Lenders that the  circumstances  causing
         such suspension no longer exist.

                  SECTION  2.09.   OPTIONAL   CONVERSION  OF  REVOLVING   CREDIT
ADVANCES.  Any Borrower may on any Business  Day, upon notice given to the Agent
not later than 11:00 A.M.  (New York City time) on the third  Business Day prior
to the date of the proposed Conversion and subject to the provisions of Sections
2.08 and 2.12,  Convert all Revolving Credit Advances of one Type comprising the
same  Borrowing  into  Revolving  Credit  Advances of the other Type;  PROVIDED,
HOWEVER, that any Conversion of Eurodollar Rate Advances into Base Rate Advances
shall be made only on the last day of an  Interest  Period  for such  Eurodollar
Rate Advances.  Each such notice of a Conversion shall,  within the restrictions
specified  above,  specify (i) the date of such  Conversion,  (ii) the Revolving
Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar
Rate  Advances,  the  duration  of the  initial  Interest  Period  for each such
Advance.  Each  notice of  Conversion  shall be  irrevocable  and binding on the
relevant Borrower.

                  SECTION  2.10.   OPTIONAL   PREPAYMENTS  OF  REVOLVING  CREDIT
ADVANCES.  Any Borrower  may, upon notice to the Agent stating the proposed date
and aggregate  principal  amount of the  prepayment,  given not later than 11:00
A.M.  (New York City time) on the second  Business Day prior to the date of such
proposed prepayment, in the case of Eurodollar Rate Advances, and not later than
11:00 A.M. (New York City time) on the day of such proposed  prepayment,  in the
case of Base Rate  Advances,  and, if such notice is given such Borrower  shall,

                                       25
<PAGE>

prepay  the  outstanding  principal  amount  of the  Revolving  Credit  Advances
comprising  part of the same Revolving  Credit  Borrowing in whole or ratably in
part,  together  with  accrued  interest to the date of such  prepayment  on the
principal amount prepaid;  PROVIDED,  HOWEVER,  that (x) each partial prepayment
shall be in an aggregate principal amount of $10,000,000 or an integral multiple
of $1,000,000 in excess thereof and (y) in the event of any such prepayment of a
Eurodollar  Rate  Advance,  such  Borrower  shall be obligated to reimburse  the
Lenders  in  respect  thereof  pursuant  to  Section  9.04(d).  Each  notice  of
prepayment  by a Designated  Subsidiary  shall be given to the Agent through the
Company.


                  SECTION 2.11.  INCREASED COSTS. (a) If, after the date hereof,
due to either (i) the  introduction  of or any change  (other than any change by
way of imposition or increase of reserve requirements included in the Eurodollar
Rate Reserve Percentage) in or in the interpretation of any law or regulation or
(ii) the compliance with any guideline or request from any central bank or other
governmental  authority  having  jurisdiction  over any Lender  (whether  or not
having the force of law),  there shall be any increase in the cost to any Lender
(which cost such Lender  reasonably  determines  in good faith is  material)  of
agreeing to make or making,  funding or maintaining  Eurodollar Rate Advances or
LIBO  Rate  Advances  (excluding  for  purposes  of this  Section  2.11 any such
increased  costs  resulting  from (i) Taxes or Other Taxes (as to which  Section
2.14 shall govern) and (ii) Excluded Taxes),  then the Borrower of such Advances
shall from time to time,  upon demand by such Lender made not later than 60 days
after such Lender obtains knowledge of such increased costs (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender additional
amounts  sufficient  to compensate  such Lender for such  increased  cost.  Each
Lender agrees that if such Lender  requests  compensation  for any amounts owing
from a Borrower for such increased cost under this Section 2.11(a),  such Lender
shall,  prior to a Borrower being required to pay such increased costs,  furnish
to such  Borrower a  certificate  of a senior  financial  officer of such Lender
verifying that such increased cost was actually  incurred by such Lender and the
amount of such increased  cost and setting forth in reasonable  detail the basis
therefore  (with a copy of such  certificate to the Agent);  PROVIDED,  HOWEVER,
that such certificate  shall be conclusive and binding for all purposes,  absent
manifest error.

                  (b) If,  after the date  hereof,  any Lender  determines  that
compliance  with any law or  regulation  or any  guideline  or request  from any
central bank or other governmental authority having jurisdiction over any Lender
(whether or not having the force of law)  affects or would  affect the amount of
capital  required or expected to be maintained by such Lender or any corporation
controlling  such Lender and that the amount of such  capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type,  then,  upon demand by such Lender made not later than
60 days after such Lender obtains  knowledge of such increase in capital (with a
copy of such  demand to the Agent),  the Company  shall pay to the Agent for the
account  of  such  Lender,  from  time  to time  as  specified  by such  Lender,
additional  amounts  sufficient to compensate such Lender or such corporation in
the light of such  circumstances,  to the  extent  that such  Lender  reasonably
determines  such  increase in capital to be allocable  to the  existence of such
Lender's  commitment to lend  hereunder.  Each Lender agrees that if such Lender
requests  compensation  for any amounts owing from the Company for such increase
in capital under this Section  2.11(b),  such Lender shall,  prior to a Borrower

                                       26
<PAGE>


being required to compensate  such Lender for such increase in capital,  furnish
to the  Company a  certificate  of a senior  financial  officer  of such  Lender
verifying that such increase in capital was actually required by such Lender and
the amount of such increase in capital and setting  forth in  reasonable  detail
the basis  therefore (with a copy of such  certificate to the Agent);  PROVIDED,
HOWEVER, that such certificate shall be conclusive and binding for all purposes,
absent manifest error.

         (c) No Borrower  shall be  obligated to pay under this Section 2.11 any
amounts which relate to costs or increases of capital  incurred  prior to the 12
months  immediately  preceding  the date of demand for payment of such  amounts,
unless the applicable law,  regulation,  guideline or request  resulting in such
costs or increases of capital is imposed retroactively.  In the case of any law,
regulation,  guideline  or request  which is imposed  retroactively,  the Lender
making demand for payment of any amount under this Section 2.11 shall notify the
related  Borrower not later than 12 months from the date that such Lender should
reasonably have known (but promptly upon gaining  knowledge of such increase) of
such law,  regulation,  guideline or request and such  Borrower's  obligation to
compensate  such  Lender for such  amount is  contingent  upon such  Lender's so
notifying such Borrower;  PROVIDED,  HOWEVER, that any failure by such Lender to
provide  such notice  shall not affect such  Borrower's  obligations  under this
Section  2.11 with  respect to amounts  resulting  from  costs or  increases  of
capital incurred after the date which occurs 12 months immediately preceding the
date on which  such  Lender  notified  such  Borrower  of such law,  regulation,
guideline or request.

         (d) If any Lender shall subsequently  recoup any costs (other than from
a Borrower) for which such Lender has theretofore been compensated by a Borrower
under this  Section  2.11,  such Lender  shall remit to such  Borrower an amount
equal to the amount of such recoupment as reasonably determined by such Lender.

                  SECTION 2.12. ILLEGALITY.  Notwithstanding any other provision
of this Agreement,  if any Lender shall after the date hereof,  notify the Agent
that the introduction of or any change in or in the interpretation of any law or
regulation  makes  it  unlawful,  or any  central  bank  or  other  governmental
authority having  jurisdiction over any Lender asserts that it is unlawful,  for
any Lender or its Eurodollar Lending Office to perform its obligations hereunder
to make  Eurodollar  Rate  Advances or LIBO Rate Advances or to fund or maintain
Eurodollar  Rate Advances or LIBO Rate Advances  hereunder,  (i) each Eurodollar
Rate Advance or LIBO Rate Advance, as the case may be, will automatically,  upon
such demand,  Convert into a Base Rate Advance or an Advance that bears interest
at the rate set forth in  Section  2.07(a)(i),  as the case may be, and (ii) the
obligation of the Lenders to make Eurodollar Rate Advances or LIBO Rate Advances
or to Convert  Revolving  Credit Advances into Eurodollar Rate Advances shall be
suspended  until the Agent shall  notify each  Borrower and the Lenders that the
circumstances causing such suspension no longer exist.

                  SECTION  2.13.  PAYMENTS AND  COMPUTATIONS.  (a) Each Borrower
shall make each payment  hereunder  and under the Notes not later than 1:00 P.M.
(New York  City  time) on the day when due in U.S.  dollars  to the Agent at the
Agent's Account in same day funds.  The Agent will promptly  thereafter cause to
be  distributed  like funds  relating to the payment of principal or interest or

                                       27
<PAGE>

facility  fees ratably  (other than amounts  payable  pursuant to Section  2.03,
2.05(c), 2.07(c), 2.11, 2.14, 2.18(a) or 9.04(cd) to the Lenders for the account
of their respective  Applicable Lending Offices,  and like funds relating to the
payment of any other amount payable to any Lender to such Lender for the account
of its Applicable  Lending Office, in each case to be applied in accordance with
the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information  contained  therein in the Register pursuant to
Section 9.07(c),  from and after the effective date specified in such Assignment
and Acceptance,  the Agent shall make all payments hereunder and under the Notes
in respect of the interest  assigned thereby to the Lender assignee  thereunder,
and the parties to such  Assignment  and Acceptance  shall make all  appropriate
adjustments  in such payments for periods prior to such  effective date directly
between  themselves.  Upon any Assuming Lender becoming a Lender  hereunder as a
result  of the  effectiveness  of a  Commitment  Increase  pursuant  to  Section
2.05(c),  and upon the Agent's receipt of such Lender's Assumption Agreement and
recording the information contained therein in the Register,  from and after the
relevant  Increase Date,  the Agent shall make all payments  hereunder and under
the Notes in respect of the interest assumed thereby to such Assuming Lender.

                  (b) All  computations of interest based on the Base Rate shall
be made by the Agent on the basis of a year of 365 or 366 days,  as the case may
be, and all computations of interest based on the Eurodollar Rate or the Federal
Funds  Rate and of  facility  fees  shall be made by the Agent on the basis of a
year of 360 days,  in each case for the  actual  number of days  (including  the
first day but  excluding  the last day)  occurring  in the period for which such
interest or facility  fees are payable.  Each  determination  by the Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.

                  (c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business  Day, such payment shall be made
on the next  succeeding  Business Day, and such  extension of time shall in such
case be included in the  computation  of payment of interest or facility fee, as
the case may be; PROVIDED,  HOWEVER, that, if such extension would cause payment
of interest on or principal of Eurodollar Rate Advances or LIBO Rate Advances to
be made in the next following  calendar month, such payment shall be made on the
next preceding Business Day.

                  (d)  Unless  the  Agent  shall  have  received  notice  from a
Borrower  prior to the date on which any payment is due to the Lenders from such
Borrower  hereunder  that such Borrower will not make such payment in full,  the
Agent may assume that such  Borrower  has made such payment in full to the Agent
on such date and the Agent may, in reliance  upon such  assumption,  cause to be
distributed  to each Lender on such due date an amount  equal to the amount then
due such Lender.  If and to the extent such Borrower shall not have so made such
payment in full to the Agent,  each Lender shall repay to the Agent forthwith on
demand such amount  distributed to such Lender  together with interest  thereon,
for each day from the date such amount is  distributed  to such Lender until the
date such Lender repays such amount to the Agent, at the Federal Funds Rate.



                                       28
<PAGE>

                  SECTION 2.14. TAXES. (a) Any and all payments by each Borrower
hereunder or under the Notes shall be made,  in  accordance  with Section  2.13,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions,  charges or withholdings,  and all liabilities with
respect  thereto,  EXCLUDING,  in the case of each  Lender and the Agent,  taxes
imposed on its overall net income,  and franchise taxes imposed on it in lieu of
net income taxes, by the jurisdiction under the laws of which such Lender or the
Agent (as the case may be) is organized or any political  subdivision thereof or
by any  jurisdiction  in which such  Lender or the Agent (as the case may be) is
doing  business that is unrelated to this Agreement and such net income taxes or
franchise taxes that would not have been imposed if such Lender or the Agent (as
the case may be) had not been  conducting  such  unrelated  business and, in the
case of each  Lender,  taxes  imposed on its overall net income,  and  franchise
taxes imposed on it in lieu of net income  taxes,  by the  jurisdiction  of such
Lender's  Applicable  Lending Office or any political  subdivision  thereof (all
such excluded taxes being  hereinafter  referred to as "EXCLUDED  TAXES" and all
such non-excluded taxes, levies, imposts, deductions,  charges, withholdings and
liabilities  in  respect  of  payments   hereunder  or  under  the  Notes  being
hereinafter referred to as "TAXES"). If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum  payable  hereunder  or under any
Note to any Lender or the Agent,  (i) the sum payable  shall be increased as may
be necessary so that after making all required  deductions for Taxes  (including
deductions  for Taxes  applicable to additional  sums payable under this Section
2.14) such Lender or the Agent (as the case may be)  receives an amount equal to
the sum it would have  received  had no such  deductions  been  made,  (ii) such
Borrower  shall make such  deductions and (iii) such Borrower shall pay the full
amount  deducted  to the  relevant  taxation  authority  or other  authority  in
accordance with applicable law.

                  (b) In addition,  each  Borrower  agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar  levies that arise from any payment made hereunder or under the Notes
or from the  execution,  delivery  or  registration  of,  performing  under,  or
otherwise with respect to, this Agreement or the Notes (hereinafter  referred to
as "OTHER TAXES").

                  (c) Each Borrower  shall  indemnify  each Lender and the Agent
for the full amount of Taxes or Other Taxes (including,  without limitation, any
taxes imposed by any  jurisdiction  on amounts  payable under this Section 2.14)
imposed  on or paid by such  Lender  or the  Agent  (as the case may be) and any
liability for penalties,  interest and reasonable  expenses arising therefrom or
with respect thereto. This indemnification shall be made within 30 days from the
date  such  Lender  or the  Agent  (as the case  may be)  makes  written  demand
therefor; PROVIDED that such Lender shall, prior to a Borrower being required to
indemnify such Lender pursuant to this Section 2.14(c), furnish to such Borrower
a certificate of a senior  financial  officer of such Lender verifying that such
Taxes or Other  Taxes were  actually  incurred  by such Lender and the amount of
such  Taxes or Other  Taxes and  setting  forth in  reasonable  detail the basis
therefor (with a copy of such certificate to the Agent), PROVIDED, HOWEVER, that
such  certificate  shall be  conclusive  and  binding for all  purposes,  absent
manifest error.

                  (d)  Within 30 days  after the date of any  payment  of Taxes,
each Borrower shall furnish to the Agent, at its address  referred to in Section
9.02, the original or a certified copy of a receipt  evidencing payment thereof.

                                       29
<PAGE>


In the case of any payment  hereunder  or under the Notes by or on behalf of any
Borrower  through  an account or branch  outside  the United  States or by or on
behalf of any Borrower by a payor that is not a United  States  person,  if such
Borrower determines that no Taxes are payable in respect thereof,  such Borrower
shall  furnish,  or shall  cause such payor to  furnish,  to the Agent,  at such
address, an opinion of counsel acceptable to the Agent stating that such payment
is exempt from Taxes.  For purposes of this  subsection (d) and subsection  (e),
the terms  "UNITED  STATES" and "UNITED  STATES  PERSON" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.

                  (e) Each  Lender  organized  under the laws of a  jurisdiction
outside the United States, on or prior to the date of its execution and delivery
of this  Agreement  in the case of each  Initial  Lender  and on the date of the
Assignment  and  Acceptance  or the  Assumption  Agreement,  as the case may be,
pursuant to which it becomes a Lender in the case of each other Lender, and from
time to time  thereafter  as requested  in writing by any Borrower  (but only so
long as such Lender remains lawfully able to do so), shall provide the Agent and
each Borrower with two original  Internal Revenue Service forms 1001 or 4224, as
appropriate,  or any successor or other form prescribed by the Internal  Revenue
Service,  certifying  that such  Lender is exempt  from or entitled to a reduced
rate of United States  withholding tax on payments pursuant to this Agreement or
the  Notes.  If the forms  provided  by a Lender at the time such  Lender  first
becomes a party to this Agreement indicates a United States interest withholding
tax rate in excess of zero,  withholding  tax at such rate  shall be  considered
excluded from Taxes unless and until such Lender provides the appropriate  forms
certifying that a lesser rate applies,  whereupon withholding tax at such lesser
rate only shall be considered  excluded from Taxes for periods  governed by such
form; PROVIDED,  HOWEVER,  that, if at the date of the Assignment and Acceptance
or the  Assumption  Agreement,  as the case may be,  pursuant  to which a Lender
assignee becomes a party to this Agreement,  the Lender assignor was entitled to
payments under  subsection (a) in respect of United States  withholding tax with
respect to interest  paid at such date,  then,  to such  extent,  the term Taxes
shall  include  (in  addition  to  withholding  taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender assignee on such date.

                  (f) For any period  with  respect to which a Lender has failed
to provide each Borrower with the appropriate  form described in Section 2.14(e)
(OTHER THAN if such failure is due to a change in law  occurring  subsequent  to
the date on which a form originally was required to be provided, or if such form
otherwise is not required  under the first  sentence of  subsection  (e) above),
such Lender shall not be entitled to  indemnification  under Section  2.14(a) or
(c) with  respect  to Taxes  imposed  by the  United  States  by  reason of such
failure; PROVIDED, HOWEVER, that should a Lender become subject to Taxes because
of its failure to deliver a form required  hereunder,  each  Borrower  agrees to
take such steps as such Lender shall reasonably request to assist such Lender to
recover such Taxes.

                  (g) If any Lender determines, in its sole discretion,  that it
has actually and finally realized, by reason of a refund, deduction or credit of
any Taxes or Other Taxes paid or reimbursed by a Borrower pursuant to subjection
(a) or (c) above in respect of payments under the Credit Agreement or the Notes,
a current monetary  benefit that it would otherwise not have obtained,  and that

                                       30
<PAGE>


would result in the total  payments under this Section 2.14 exceeding the amount
needed to make such Lender whole,  such Lender shall pay to such Borrower,  with
reasonable  promptness  following  the date on which it actually  realizes  such
benefit,  an amount  equal to the  lesser of the  amount of such  benefit or the
amount of such excess, in each case net of all reasonable out-of-pocket expenses
in securing such refund, deduction or credit.


                  SECTION  2.15.  SHARING OF PAYMENTS,  ETC. If any Lender shall
obtain any payment (whether voluntary,  involuntary, through the exercise of any
right of set-off,  or  otherwise) on account of the  Revolving  Credit  Advances
owing to it (other  than  pursuant  to Section  2.05(c),  2.07(c),  2.11,  2.14,
2.18(a) or 9.04(d)) in excess of its ratable share of payments on account of the
Revolving  Credit  Advances  obtained  by all the  Lenders,  such  Lender  shall
forthwith  purchase from the other Lenders such  participations in the Revolving
Credit  Advances  owing to them as shall be necessary  to cause such  purchasing
Lender to share the excess payment ratably with each of them; PROVIDED, HOWEVER,
that if all or any portion of such excess  payment is thereafter  recovered from
such  purchasing  Lender,  such purchase from each Lender shall be rescinded and
such  Lender  shall repay to the  purchasing  Lender the  purchase  price to the
extent of such recovery  together with an amount equal to such Lender's  ratable
share  (according to the proportion of (i) the amount of such Lender's  required
repayment to (ii) the total amount so recovered from the  purchasing  Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total  amount so  recovered.  Each  Borrower  agrees  that any  Lender so
purchasing a  participation  from another  Lender  pursuant to this Section 2.15
may, to the fullest extent permitted by law,  exercise all its rights of payment
(including the right of set-off) with respect to such  participation as fully as
if such Lender were the direct  creditor of such  Borrower in the amount of such
participation.

                  SECTION  2.16.  USE OF PROCEEDS.  The proceeds of the Advances
shall be available  (and each Borrower  agrees that it shall use such  proceeds)
solely (i) for general corporate  purposes of such Borrower and its Subsidiaries
and (ii) for  acquisitions by such Borrower that have been approved by the Board
of Directors of the corporation that is to be acquired by such Borrower.

                  SECTION 2.17. MANDATORY ASSIGNMENT BY A LENDER; MITIGATION. If
any Lender  requests from a Borrower  either  payment of additional  interest on
Eurodollar  Rate Advances  pursuant to Section  2.07(c),  or  reimbursement  for
increased  costs  pursuant to Section 2.11, or payment of or  reimbursement  for
Taxes  pursuant to Section 2.14, or if any Lender  notifies the Agent that it is
unlawful  for such  Lender  or its  Eurodollar  Lending  Office to  perform  its
obligations hereunder pursuant to Section 2.12, (i) such Lender will, upon three
Business  Days'  notice by such  Borrower to such  Lender and the Agent,  to the
extent not  inconsistent  with such Lender's  internal  policies and  applicable
legal and  regulatory  restrictions,  use  reasonable  efforts to make,  fund or
maintain its Eurodollar Rate Advances through another  Eurodollar Lending Office
of such Lender if (A) as a result thereof the additional  amounts required to be
paid pursuant to Section  2.07(c),  2.11 or 2.14, as  applicable,  in respect of
such Eurodollar  Rate Advances would be materially  reduced or the provisions of
Section  2.12  would  not  apply  to  such  Lender,  as  applicable,  and (B) as
determined by such Lender in good faith but in its sole  discretion,  the making
or maintaining of such  Eurodollar Rate Advances  through such other  Eurodollar

                                       31
<PAGE>

Lending  Office  would  not  otherwise  materially  and  adversely  affect  such
Eurodollar  Rate  Advances  or such  Lender  and (ii)  unless  such  Lender  has
therefore taken steps to remove or cure, and has removed or cured (to the extent
not  inconsistent  with internal  policies and  applicable  legal and regulatory
restrictions),  the conditions  creating such  obligation to pay such additional
amounts or the  circumstances  described in Section 2.12, such Lender will, upon
at least five  Business  Days'  notice  from the  Company to such Lender and the
Agent,  assign,  pursuant to and in  accordance  with the  provisions of Section
9.07, to one or more Eligible  Assignees  designated by the Company all, but not
less than all, of the  Revolving  Credit  Advances then owing to such Lender and
all, but not less than all, of such Lender's  rights and  obligations  hereunder
(other  than  rights in respect of such  Lender's  outstanding  Competitive  Bid
Advance),  without recourse to or warranty by, or expense to, such Lender, for a
purchase price equal to the  outstanding  principal  amount of each such Advance
then owing to such Lender PLUS any accrued but unpaid  interest  thereon and any
accrued but unpaid facility fees owing thereto and, in addition,  all additional
costs reimbursements,  expense reimbursements and indemnities,  if any, owing in
respect of such Lender's Commitment hereunder at such time shall be paid to such
Lender.

                  SECTION 2.18.  EXTENSION OF THE TERMINATION DATE AND THE FINAL
MATURITY DATE..  (a) EXTENSION OF THE TERMINATION  DATE. (i) The Company may, at
its option,  by written notice to the Agent in substantially the form of Exhibit
E-1  hereto,  no  earlier  than 60 days and no later  that 30 days  prior to the
Termination  Date  then  in  effect,   request  that  the  Lenders  extend  such
Termination  Date for an  additional  period of 364 days.  Such request shall be
irrevocable  and binding upon the Company.  The Agent shall promptly notify each
Lender  of  such  request.  If a  Lender  agrees,  in its  individual  and  sole
discretion,  to so extend its  Commitment  (each such Lender being an "EXTENDING
LENDER"),  it shall deliver to the Agent a written notice in  substantially  the
form of Exhibit E-2 hereto of its agreement to do so no earlier than 30 days and
no later than 25 days prior to such  Termination Date and the Agent shall notify
the  Company in  writing  of such  Extending  Lender's  agreement  to extend its
Commitment no later than 20 days prior to such Termination Date.

                  (ii) If any  Lender  does not  consent,  or  fails to  respond
within the time  period set forth in clause (i) of this  Section  2.18(a),  to a
request by the Company for an extension of the  Termination  Date then in effect
(each such Lender being a "DECLINING LENDER"),  the Company shall have the right
to:

                  (A) require any Declining  Lender to assign in full its rights
         and  obligations  under  this  Agreement  (I)  to an  Extending  Lender
         designated  by the Company that has offered to increase its  Commitment
         in an amount at least  equal to the amount of such  Declining  Lender's
         Commitment in its notice delivered to the Agent under subsection (a) of
         this Section  2.18 (each such  Extending  Lender  being an  "INCREASING
         EXTENDING  LENDER")  and (II) to the  extent  of any  shortfall  in the
         aggregate  amount  of  extended   Commitments,   to  any  other  Person
         designated by the Company and acceptable to the Agent (which acceptance
         shall not be  unreasonably  withheld) that agrees to accept all of such
         rights and  obligations  (each such other Person  being a  "REPLACEMENT
         LENDER"), PROVIDED, that (w) such assignment is otherwise in compliance
         with Section 9.07, (x) such Declining  Lender receives  payment in full


                                       32
<PAGE>

         of the  aggregate  principal  amount  of all  Advances  owing  to  such
         Declining Lender, together with all accrued and unpaid interest thereon
         to the effective date of such assignment and all fees and other accrued
         and unpaid amounts owing to such  Declining  Lender under any provision
         of this Agreement  (including,  but not limited to, any increased costs
         or other additional  amounts owing under Section 2.11, and any Taxes or
         Other Taxes owing under Section 2.14) as of the effective  date of such
         assignment,   (y)  with  respect  to  any  Replacement   Lender,   such
         Replacement  Lender  shall  have  paid the  applicable  processing  and
         recordation  fee required under Section 9.07(a) for such assignment and
         (z) such assignment  shall be effective on or prior to such Termination
         Date; or

                  (B) subject to the giving of notice to such  Declining  Lender
         at least five days prior to such Termination Date, pay, prepay or cause
         to be  prepaid,  on and  effective  as of such  Termination  Date,  the
         aggregate  principal  amount of all  Advances  owing to such  Declining
         Lender,  together with all accrued and unpaid  interest  thereon to the
         date of such payment, and all fees and other accrued and unpaid amounts
         owing to such  Declining  Lender under any provision of this  Agreement
         (including, but not limited to, any increased costs or other additional
         amounts owing under  Section  2.11,  and any Taxes or Other Taxes owing
         under Section 2.14) as of the date of such payment or  prepayment,  and
         terminate in whole such Declining Lender's Commitment,  notwithstanding
         the provisions of Section 2.05(a).

                  (iii) The  Company  shall,  no later  than one day  before the
Termination Date then in effect, deliver to the Agent a notice setting forth the
Commitments of the Extending Lenders and the Replacement  Lenders, if any, which
are to become or be, as the case may be, effective as of such Termination  Date.
If Extending  Lenders  and/or  Replacement  Lenders  provide  Commitments  in an
aggregate  amount  at  least  equal  to  51%  of  the  aggregate  amount  of the
Commitments  outstanding  immediately  prior to such Termination Date, the Agent
shall give  prompt  notice  thereof to the  Lenders  and,  effective  as of such
Termination  Date,  (A) the  Termination  Date shall be extended by 364 days for
such Extending Lenders and such Replacement  Lenders,  SUBJECT,  HOWEVER, to the
provisions of subsection  (b) of this Section 2.18,  (B) each  Declining  Lender
shall have no  further  Commitment  hereunder  and (C) the  Commitments  of such
Extending  Lenders and such Replacement  Lenders shall become or be, as the case
may be the  amounts  specified  in the notice  delivered  by the  Company to the
Agent.

                  (b) EXTENSION OF THE FINAL MATURITY  DATE. On the  Termination
Date in effect at any time, if no Default shall have occurred and be continuing,
the Company may, by written notice to the Agent, request that the Final Maturity
Date be a date occurring up to the first  anniversary of such Termination  Date.
Such request shall be irrevocable and binding upon the Company.  The Agent shall
promptly notify each Lender of such request.  Subject to the satisfaction of the
applicable conditions set forth in Section 3.05 as of such Termination Date, the
Final Maturity Date shall be, effective as of such  Termination  Date, such date
as the Company shall  request  pursuant to this  subsection  (b) of this Section
2.18. In the event that the Company  shall request that the Final  Maturity Date
be a  date  occurring  up  to  the  first  anniversary  of  the  then  scheduled
Termination  Date,  and the Final Maturity Date shall be so extended as provided

                                       33
<PAGE>


in this subsection (b) of this Section 2.18, the right of the Company to request
an extension of the Termination  Date pursuant to subsection (a) of this Section
2.18 shall automatically  terminate and any extension of the Termination Date in
effect at the time such request is made that would  otherwise  occur as provided
in subsection  (a) of this Section 2.18 shall  automatically  be cancelled.  The
Agent  shall  promptly  notify each  Lender of any such  extension  of the Final
Maturity Date and any such cancellation of an extension of the Termination Date.


                                   ARTICLE III

                     CONDITIONS TO EFFECTIVENESS AND LENDING

                  SECTION  3.01.   CONDITIONS   PRECEDENT  TO  EFFECTIVENESS  OF
SECTIONS 2.01 AND 2.03.  Sections 2.01 and 2.03 of this  Agreement  shall become
effective  on and as of the  first  date  (the  "EFFECTIVE  DATE")  on which the
following conditions precedent have been satisfied:

                  (a) There shall have occurred no Material Adverse Change since
         December  31, 1998 except as disclosed by the Company in writing to the
         Lenders prior to the date of execution of this Agreement.

                  (b)  There  shall  exist  no  action,   suit,   investigation,
         litigation  or   proceeding   affecting  the  Company  or  any  of  its
         Subsidiaries  pending or  threatened  before  any  court,  governmental
         agency  or  arbitrator  that (i) would be  reasonably  likely to have a
         Material  Adverse  Effect other than the matters  described on Schedule
         3.01(b) hereto (the "DISCLOSED  LITIGATION") or (ii) purports to affect
         the legality,  validity or enforceability of this Agreement or any Note
         or the consummation of the transactions  contemplated hereby, and there
         shall have been no material adverse change in the status,  or financial
         effect on the Company  and its  Subsidiaries  taken as a whole,  of the
         Disclosed Litigation from that described on Schedule 3.01(b) hereto.

                  (c) All  governmental  and third party  consents and approvals
         necessary in connection with the transactions contemplated hereby shall
         have been obtained  (without the imposition of any conditions  that are
         not  acceptable to the Lenders) and shall remain in effect,  and no law
         or regulation  shall be applicable  in the  reasonable  judgment of the
         Lenders  that  restrains,   prevents  or  imposes   materially  adverse
         conditions upon the transactions contemplated hereby.

                  (d)      The Company shall have notified the Agent in writing
         as to the proposed Effective Date.

                  (e) The Company  shall have paid all accrued fees and expenses
         of the Agent and the  Lenders  that shall have been  invoiced as of the
         Effective  Date  (including the accrued fees and expenses of counsel to
         the Agent),  in each case  solely to the extent such fees and  expenses
         are required by other provisions of this Agreement to be so paid.

                                       34
<PAGE>

                  (f) On the Effective Date, the following  statements  shall be
         true and the Agent shall have received for the account of each Lender a
         certificate signed by a duly authorized  officer of the Company,  dated
         the Effective Date, stating that:

                           (i)      The representations and warranties of the
         Company contained in Section 4.01 are correct on and as of the
         Effective Date, and

                           (ii)     No event has occurred and is continuing that
         constitutes a Default.


                  (g) The Agent shall have  received on or before the  Effective
         Date  the  following,  each  dated  such  day,  in form  and  substance
         reasonably  satisfactory  to the Agent and  (except  for the  Revolving
         Credit Notes) in sufficient copies for each Lender:

                           (i)  The Revolving Credit Notes of the Company to
                  the order of the Lenders, respectively.

                           (ii) Certified copies of the resolutions of the Board
                  of  Directors  of  the  Company   approving   this   Agreement
                  (including the  Commitment  Increase  contemplated  by Section
                  2.05(c))  and the Notes of the Company,  and of all  documents
                  evidencing  other necessary  corporate action and governmental
                  approvals,  if any,  with respect to this  Agreement  and such
                  Notes.

                           (iii) A certificate  of the Secretary or an Assistant
                  Secretary  of  the  Company  certifying  the  names  and  true
                  signatures  of the officers of the Company  authorized to sign
                  this  Agreement  and the  Notes of the  Company  and the other
                  documents to be delivered hereunder.

                           (iv) A favorable  opinion of Robert M. Reese,  Senior
                  Vice   President   and   General   Counsel  of  the   Company,
                  substantially  in the form of  Exhibit H hereto and as to such
                  other matters as any Lender  through the Agent may  reasonably
                  request.

                           (v)      A favorable opinion of Shearman & Sterling,
                  counsel for the Agent, in form and substance satisfactory to
                  the Agent.

                           (vi) Such other  approvals,  opinions or documents as
                  any Lender, through the Agent, may reasonably request prior to
                  the Effective Date.

                  SECTION 3.02. INITIAL BORROWING OF EACH DESIGNATED SUBSIDIARY.
The  obligation  of each  Lender to make an initial  Advance to each  Designated
Subsidiary following any designation of such Designated Subsidiary as a Borrower
hereunder  pursuant  to Section  9.08 is subject  to the  Agent's  receipt on or
before the date of such Initial  Advance of each of the  following,  in form and
substance  satisfactory  to the Agent and dated such date,  and  (except for the
Revolving Credit Notes) in sufficient copies for each Lender:

                                       35
<PAGE>

                  (a)      The Revolving Credit Notes of such Borrower to the
         order of the Lenders, respectively.

                  (b)  Certified  copies  of the  resolutions  of the  Board  of
         Directors of such Borrower  approving  this  Agreement and the Notes of
         such  Borrower,   and  of  all  documents  evidencing  other  necessary
         corporate  action and governmental  approvals,  if any, with respect to
         this Agreement and such Notes.

                  (c) A certificate  of the Secretary or an Assistant  Secretary
         of such  Borrower  certifying  the  names  and true  signatures  of the
         officers of such  Borrower  authorized  to sign this  Agreement and the
         Notes  of  such  Borrower  and  the  other  documents  to be  delivered
         hereunder.

                  (d) A certificate  signed by a duly authorized  officer of the
         Company, dated as of the date of such initial Advance,  certifying that
         such  Borrower  shall have  obtained all  governmental  and third party
         authorizations,   consents,   approvals   (including  exchange  control
         approvals) and licenses  required under applicable laws and regulations
         necessary for such  Borrower to execute and deliver this  Agreement and
         the Notes of such Borrower and to perform its obligations thereunder.

                  (e) The  Designation  Letter  of such  Designated  Subsidiary,
         substantially in the form of Exhibit F hereto.

                  (f) With respect to each  Designated  Subsidiary  that has its
         principal  place of business  outside of the United  States of America,
         evidence of the Process Agent's acceptance of its appointment  pursuant
         to Section 9.12(a) as the agent of such Borrower,  substantially in the
         form of Exhibit G hereto.

                  (g)  A  favorable   opinion  of  counsel  to  such  Designated
         Subsidiary,  dated the date of such Initial  Advance,  substantially in
         the form of Exhibit I hereto.

                  (h) Such other approvals, opinions or documents as any Lender,
         through the Agent, may reasonably request.

                  SECTION 3.03.  CONDITIONS  PRECEDENT TO EACH REVOLVING  CREDIT
BORROWING.  The obligation of each Lender to make a Revolving  Credit Advance on
the  occasion  of each  Revolving  Credit  Borrowing  shall  be  subject  to the
conditions precedent that the Effective Date shall have occurred and on the date
of such Revolving Credit  Borrowing the following  statements shall be true (and
each of the giving of the applicable  Notice of Revolving  Credit  Borrowing and
the acceptance by the Borrower requesting such Revolving Credit Borrowing of the
proceeds of such Revolving  Credit  Borrowing shall  constitute a representation
and warranty by such Borrower that on the date of such Borrowing such statements
are true):

                  (i)  the   representations   and  warranties  of  the  Company
         contained in Section  4.01(except the  representations set forth in the
         last sentence of subsection  (e) thereof and in subsection  (f) thereof

                                       36
<PAGE>

         (other than clause  (i)(B)  thereof)) are correct on and as of the date
         of such Revolving Credit  Borrowing,  before and after giving effect to
         such Revolving  Credit Borrowing and to the application of the proceeds
         therefrom, as though made on and as of such date, and, if such Borrower
         is a Designated Subsidiary,  the representations and warranties of such
         Borrower  contained in its Designation  Letter are correct on and as of
         the date of such Revolving  Credit  Borrowing,  before and after giving
         effect to such Revolving Credit Borrowing and to the application of the
         proceeds therefrom, as though made on and as of such date, and

                  (ii) no event has occurred and is continuing,  or would result
         from such  Revolving  Credit  Borrowing or from the  application of the
         proceeds therefrom, that constitutes a Default.

                  SECTION 3.04.  CONDITIONS  PRECEDENT TO EACH  COMPETITIVE  BID
BORROWING.  The  obligation  of each  Lender that is to make a  Competitive  Bid
Advance on the occasion of a Competitive Bid Borrowing to make such  Competitive
Bid  Advance  as  part of such  Competitive  Bid  Borrowing  is  subject  to the
conditions  precedent  that  (a) the  Agent  shall  have  received  the  written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, (b) on or
before the date of such Competitive Bid Borrowing, but prior to such Competitive
Bid Borrowing,  the Agent shall have received a Competitive  Bid Note payable to
the order of such Lender for each of the one or more Competitive Bid Advances to
be made by such Lender as part of such Competitive Bid Borrowing, in a principal
amount  equal to the  principal  amount of the  Competitive  Bid  Advance  to be
evidenced  thereby  and  otherwise  on such  terms  as were  agreed  to for such
Competitive  Bid Advance in accordance with Section 2.03, and (c) on the date of
such Competitive Bid Borrowing the following  statements shall be true (and each
of the giving of the  applicable  Notice of  Competitive  Bid  Borrowing and the
acceptance  by the Borrower  requesting  such  Competitive  Bid Borrowing of the
proceeds of such Competitive Bid Borrowing shall constitute a representation and
warranty by such  Borrower  that on the date of such  Competitive  Bid Borrowing
such statements are true):

                  (i)  the   representations   and  warranties  of  the  Company
         contained in Section 4.01 (except the  representations set forth in the
         last sentence of subsection  (e) thereof and in subsection  (f) thereof
         (other than clause  (i)(B)  thereof)) are correct on and as of the date
         of such  Competitive  Bid Borrowing,  before and after giving effect to
         such  Competitive  Bid Borrowing and to the application of the proceeds
         therefrom, as though made on and as of such date, and, if such Borrower
         is a Designated Subsidiary,  the representations and warranties of such
         Borrower  contained in its Designation  Letter are correct on and as of
         the date of such  Competitive  Bid  Borrowing,  before and after giving
         effect to such  Competitive Bid Borrowing and to the application of the
         proceeds therefrom, as though made on and as of such date,

                  (ii) no event has occurred and is continuing,  or would result
         from such  Competitive  Bid  Borrowing or from the  application  of the
         proceeds therefrom, that constitutes a Default, and

                                       37
<PAGE>

                  (iii) no event has  occurred and no  circumstance  exists as a
         result of which the information  concerning such Borrower that has been
         provided  to the Agent and each Lender by such  Borrower in  connection
         herewith  would include an untrue  statement of a material fact or omit
         to state any material fact or any fact necessary to make the statements
         contained therein,  in the light of the circumstances  under which they
         were made, not misleading.


                  SECTION 3.05.  CONDITIONS  PRECEDENT TO EXTENSION OF THE FINAL
MATURITY  DATE.  The obligation of each Lender to extend the Final Maturity Date
pursuant to Section  2.18(b) shall be subject to the  conditions  precedent that
the Effective Date shall have occurred and on the Termination Date the following
statements  shall be true  (and the  giving  by the  Company  of the  notice  of
extension  of the Final  Maturity  Date shall  constitute a  representation  and
warranty by the Company and each Designated  Subsidiary that on the date of such
extension such statements relating to such Borrower are true):

                  (i)  the   representations   and  warranties  of  the  Company
         contained in Section 4.01 (except the  representations set forth in the
         last sentence of subsection  (e) thereof and in subsection  (f) thereof
         (other than clause  (i)(B)  thereof)) are correct on and as of the date
         of such extension, before and after giving effect to such extension, as
         though  made on and as of  such  date,  and,  the  representations  and
         warranties of such Designated  Subsidiary  contained in its Designation
         Letter are correct on and as of the date of such extension,  before and
         after giving effect to such extension, as though made on and as of such
         date, and

                  (ii)     no event has occurred and is continuing, or would
         result from such extension, that constitutes a Default.

                  SECTION 3.06.  DETERMINATIONS UNDER SECTION 3.01. For purposes
of determining  compliance  with the conditions  specified in Section 3.01, each
Lender  shall be deemed to have  consented  to,  approved  or  accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent  responsible  for the  transactions  contemplated by this Agreement
shall have received  notice from such Lender prior to the date that the Company,
by notice to the Lenders,  designates as the proposed Effective Date, specifying
its  objection  thereto.  The Agent  shall  promptly  notify the  Lenders of the
occurrence of the Effective Date.

                                       38
<PAGE>

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 4.01.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 The Company represents and warrants as follows:

                  (a) The  Company  is a  corporation  duly  organized,  validly
         existing and in good standing under the laws of the State of Delaware.

                  (b) The execution,  delivery and performance by the Company of
         this Agreement and the Notes of the Company,  and the  consummation  of
         the  transactions   contemplated   hereby,  are  within  the  Company's
         corporate powers,  have been duly authorized by all necessary corporate
         action,  and do not contravene (i) the Company's  charter or by-laws or
         (ii) any law or any contractual restriction binding on or affecting the
         Company, except where such contravention would not be reasonably likely
         to have a Material Adverse Effect.

                  (c) No  authorization  or approval or other  action by, and no
         notice to or filing with, any governmental authority or regulatory body
         or any other third party is required  for the due  execution,  delivery
         and  performance  by the Company of this  Agreement or the Notes of the
         Company, except for those authorizations,  approvals,  actions, notices
         and filings (i) listed on Schedule  4.01(c)  hereto,  all of which have
         been  duly  obtained,  taken,  given or made and are in full  force and
         effect and (ii) where the  Company's  failure to receive,  take or make
         such authorization, approval, action, notice or filing would not have a
         Material Adverse Effect.

                  (d) This  Agreement  has  been,  and each of the  Notes of the
         Company when  delivered  hereunder  will have been,  duly  executed and
         delivered by the Company.  This  Agreement is, and each of the Notes of
         the Company  when  delivered  hereunder  will be, the legal,  valid and
         binding  obligation of the Company  enforceable  against the Company in
         accordance  with  their   respective   terms,   subject  to  applicable
         bankruptcy,  reorganization,  insolvency,  moratorium  or similar  laws
         affecting creditors' rights generally and general principles of equity.

                  (e) The  Consolidated  balance  sheet of the  Company  and its
         Subsidiaries  as at December  31,  1998,  and the related  Consolidated
         statements of income and cash flows of the Company and its Subsidiaries
         for the fiscal  year then  ended,  accompanied  by an opinion of Arthur
         Andersen LLP,  independent  public  accountants,  and the  Consolidated
         condensed  balance  sheet of the  Company  and its  Subsidiaries  as at
         October 4, 1999, and the related Consolidated  statements of income and
         condensed cash flows of the Company and its  Subsidiaries  for the nine
         months then ended, duly certified by the chief financial officer of the
         Company,  copies of which have been  furnished to each  Lender,  fairly
         present,  subject,  in the case of said balance  sheet as at October 4,
         1999, and said  statements of income and cash flows for the nine months
         then ended, to audit adjustments,  the Consolidated financial condition
         of  the  Company  and  its  Subsidiaries  as  at  such  dates  and  the

                                       39
<PAGE>

         Consolidated   results  of  the  operations  of  the  Company  and  its
         Subsidiaries  for the periods  ended on such dates,  all in  accordance
         with generally accepted  accounting  principles  consistently  applied;
         PROVIDED, HOWEVER, that said balance sheet and statements of income and
         cash flows for the nine months  ended as at October 4, 1999 are instead
         prepared in accordance  with  applicable  rules and  regulations of the
         Securities and Exchange Commission.  Since December 31, 1998, there has
         been no Material Adverse Change.

                  (f) (i) There is no pending  or, to the  Company's  knowledge,
         threatened  action,  suit,  investigation,  litigation  or  proceeding,
         including,  without limitation, any Environmental Action, affecting the
         Company  or any of its  Subsidiaries  before  any  court,  governmental
         agency  or  arbitrator  that (A) would be  reasonably  likely to have a
         Material  Adverse  Effect (other than the Disclosed  Litigation) or (B)
         purports to affect the  legality,  validity or  enforceability  of this
         Agreement  or  any  Note  or  the   consummation  of  the  transactions
         contemplated  hereby,  and (ii) there has been no adverse change in the
         status,  or financial effect on the Company and its Subsidiaries  taken
         as a whole, of the Disclosed Litigation from that described on Schedule
         3.01(b) hereto.

                  (g) No proceeds  of any Advance  will be applied in any manner
         that will  violate  or cause  any  Lender to  violate  Regulation  U or
         Regulation G issued by the Board of  Governors  of the Federal  Reserve
         System.

                  (h) The Company is not, and immediately  after the application
         by the  Company  of the  proceeds  of each  Advance  will  not  be,  an
         "investment  company",  or a  company  "controlled"  by an  "investment
         company",  as such terms are defined in the  Investment  Company Act of
         1940, as amended.

                  (i) The Company and each of its Subsidiaries are in compliance
         with all applicable  laws,  rules,  regulations and orders,  including,
         without  limitation,  ERISA and  Environmental  Laws and  Environmental
         Permits,  except where the failure to so comply would not be reasonably
         likely to have a Material Adverse Effect.

                  (j) To the Company's  knowledge,  (i) all past  non-compliance
         with any Environmental Laws and Environmental Permits has been resolved
         without  ongoing  obligations  or costs  except where the failure to so
         comply would not be reasonably likely to have a Material Adverse Effect
         and (ii) no circumstances  exist that would be reasonably likely to (A)
         form the basis of an Environmental Action against the Company or any of
         its  Subsidiaries  or any of their  properties that would be reasonably
         likely to have a Material Adverse Effect or (B) cause any such property
         to be subject  to any  restrictions  on  ownership,  occupancy,  use or
         transferability  under any  Environmental  Law that would be reasonably
         likely to have a Material Adverse Effect.

                  (k) No ERISA Event that would be  reasonably  likely to have a
         Material Adverse Effect has occurred or is reasonably expected to occur
         with respect to any Plan.

                                       40
<PAGE>

                  (l)  Schedule B  (Actuarial  Information)  to the most  recent
         annual  report (Form 5500 Series) for each Plan whose  "funded  current
         liability  percentage"  is less  than 90% and whose  "unfunded  current
         liability"  exceeds  $5,000,000  (as such terms are  defined in Section
         302(d)(8) of ERISA),  copies of which have been filed with the Internal
         Revenue Service and furnished to the Lenders,  is complete and accurate
         and fairly presents in all material respects the funding status of such
         Plan.

                  (m)  Neither  the   Company  nor  any  ERISA   Affiliate   has
         outstanding  liability  with respect to, or is  reasonably  expected to
         incur any Withdrawal Liability to, any Multiemployer Plan that would be
         reasonably likely to have a Material Adverse Effect.

                  (n)  Neither  the  Company  nor any ERISA  Affiliate  has been
         notified by the sponsor of a Multiemployer Plan that such Multiemployer
         Plan is in reorganization or has been terminated, within the meaning of
         Title  IV of  ERISA,  and no  such  Multiemployer  Plan  is  reasonably
         expected  to be in  reorganization  or to  be  terminated,  within  the
         meaning of Title IV of ERISA, where such  reorganization or termination
         would be reasonably likely to have a Material Adverse Effect.

                  (o) Except as set forth in the financial  statements  referred
         to in Section  4.01(e)  and in Section  5.01(h),  the  Company  and its
         Subsidiaries  taken as a whole have no material  liability with respect
         to "expected post retirement benefit obligations" within the meaning of
         Statement of Financial Accounting Standards No. 106.

                                    ARTICLE V

                            COVENANTS OF THE COMPANY

                  SECTION 5.01.  AFFIRMATIVE COVENANTS.  So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Company will:

                  (a) COMPLIANCE WITH LAWS, OBLIGATIONS,  ETC. Comply, and cause
         each of its Subsidiaries to comply, in all material respects,  with all
         applicable  laws,  rules,  regulations  and orders,  such compliance to
         include,  without  limitation,  compliance with ERISA and Environmental
         Laws as provided  in Section  5.01(i),  except  where the failure to so
         comply  would  not be  reasonably  likely  to have a  Material  Adverse
         Effect.

                  (b) PAYMENT OF TAXES,  ETC. Pay and discharge,  and cause each
         of its Subsidiaries to pay and discharge,  before the same shall become
         delinquent if the failure to so pay and  discharge  would be reasonably
         likely to have a Material  Adverse Effect,  (i) all taxes,  assessments
         and governmental charges or levies imposed upon it or upon its property
         and (ii) all lawful claims that,  if unpaid,  will by law become a Lien
         upon its property;  PROVIDED, HOWEVER, that neither the Company nor any
         of its Subsidiaries shall be required to pay or discharge any such tax,
         assessment,  charge or claim that is being  contested in good faith and

                                       41
<PAGE>


         by proper  proceedings and as to which  appropriate  reserves are being
         maintained.

                  (c) MAINTENANCE OF INSURANCE.  Maintain, and cause each of its
         Material  Subsidiaries  to maintain,  insurance  with  responsible  and
         reputable  insurance companies or associations (or continue to maintain
         self-insurance)  in such amounts and covering  such risks as is usually
         carried by companies  engaged in similar  businesses and owning similar
         properties  in the same  general  areas in which  the  Company  or such
         Subsidiary operates.

                  (d)  PRESERVATION OF CORPORATE  EXISTENCE,  ETC.  Preserve and
         maintain,  and cause each of its Subsidiaries to preserve and maintain,
         its corporate existence, rights (charter and statutory) and franchises;
         PROVIDED, HOWEVER, that the Company and its Subsidiaries may consummate
         any  merger  or  consolidation  permitted  under  Section  5.02(b)  and
         PROVIDED  FURTHER that neither the Company nor any of its  Subsidiaries
         shall be required to preserve  any right or  franchise  if the Board of
         Directors of the Company or such  Subsidiary  shall  determine that the
         preservation  thereof  is no longer  desirable  in the  conduct  of the
         business  of the  Company or such  Subsidiary,  as the case may be, and
         that the loss thereof would not be reasonably likely to have a Material
         Adverse Effect.

                  (e)   AUTHORIZATIONS.   Obtain,   and  cause  each  Designated
         Subsidiary with a principal place of business outside the United States
         to  obtain,  at any  time and  from  time to time  all  authorizations,
         licenses,  consents or approvals (including exchange control approvals)
         as shall now or hereafter be  necessary or desirable  under  applicable
         law or  regulations  in connection  with such  Designated  Subsidiary's
         making and  performance  of this Agreement and, upon the request of any
         Lender, promptly furnish to such Lender copies thereof.

                  (f)  KEEPING OF BOOKS.  Keep,  and cause each of its  Material
         Subsidiaries with a principal place of business in the United States to
         keep,  proper  books of record and  account,  in which full and correct
         entries  in all  material  respects  shall  be  made  of all  financial
         transactions  and the assets and  business of the Company and each such
         Subsidiary in accordance with generally accepted accounting  principles
         in effect from time to time.

                  (g) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and
         cause each of its  Subsidiaries  to maintain and  preserve,  all of its
         properties that are used in the conduct of its business in good working
         order and condition,  ordinary wear and tear excepted, except where the
         failure  to do so would not be  reasonably  likely  to have a  Material
         Adverse Effect.

                  (h)      REPORTING REQUIREMENTS.  Furnish to the Lenders:



                                       42
<PAGE>

                           (i) as soon as  available  and in any event within 45
                  days after the end of each of the first three quarters of each
                  fiscal year of the  Company,  Consolidated  condensed  balance
                  sheet of the  Company  and its  Subsidiaries  as of the end of
                  such  quarter  and  Consolidated   statements  of  income  and
                  Consolidated condensed statements of cash flows of the Company
                  and its Subsidiaries  for the period  commencing at the end of
                  the  previous  fiscal  year  and  ending  with the end of such
                  quarter,  duly certified (subject to audit adjustments) by the
                  chief financial officer of the Company as having been prepared
                  in accordance  with  applicable  rules and  regulations of the
                  Securities  and Exchange  Commission and  certificates  of the
                  chief  financial  officer of the Company as to compliance with
                  the terms of this Agreement;

                           (ii) as soon as available  and in any event within 90
                  days after the end of each fiscal year of the Company,  a copy
                  of the  annual  report for such year for the  Company  and its
                  Subsidiaries,  containing  Consolidated  balance  sheet of the
                  Company and its Subsidiaries as of the end of such fiscal year
                  and  Consolidated  statements  of income and cash flows of the
                  Company and its  Subsidiaries  for such fiscal  year,  in each
                  case accompanied by an opinion of Arthur Andersen LLP or other
                  nationally recognized independent public accountants;

                           (iii) as soon as  possible  and in any  event  within
                  five days after the  occurrence of each Default  continuing on
                  the date of such statement, a statement of the chief financial
                  officer  of the  Company  setting  forth the  details  of such
                  Default and the action that the Company has taken and proposes
                  to take with respect thereto;

                           (iv) as  soon as  possible  and in any  event  within
                  three days after the occurrence of a Change of Control, notice
                  of such  Change of Control  setting  forth the details of such
                  Change of Control;

                           (v)  promptly  after the  sending or filing  thereof,
                  copies of all  reports  that the  Company  sends to any of its
                  public   securityholders,   and  copies  of  all  reports  and
                  registration  statements  that the  Company or any  Subsidiary
                  files  with the  Securities  and  Exchange  Commission  or any
                  national securities exchange;

                           (vi) (a)  promptly  and in any  event  within 20 days
                  after the Company or any ERISA Affiliate has actual  knowledge
                  that an event that is an ERISA Event that has resulted or that
                  would be  reasonably  likely to result in a  liability  of the
                  Company  or any  ERISA  Affiliate  in an  amount  in excess of
                  $25,000,000  has occurred,  a statement of the chief financial
                  officer or other authorized  officer of the Company describing
                  such ERISA Event and the action,  if any,  that the Company or
                  such  ERISA  Affiliate  has  taken and  proposes  to take with
                  respect thereto and (b) on the date any records,  documents or
                  other  information  must be furnished to the PBGC with respect
                  to any Plan pursuant to Section 4010 of ERISA,  a copy of such
                  records, documents and information;

                                       43
<PAGE>

                           (vii) promptly and in any event within three Business
                  Days  after  receipt  thereof  by the  Company  or  any  ERISA
                  Affiliate,  copies of each  notice  from the PBGC  stating its
                  intention to terminate any Plan or to have a trustee appointed
                  to  administer  any Plan,  where such notice,  termination  or
                  appointment  has  resulted  or would be  reasonably  likely to
                  result in a liability of the Company or any ERISA Affiliate in
                  an amount in excess of $25,000,000;

                           (viii) promptly and in any event within 30 days after
                  filing thereof with the Internal Revenue  Services,  copies of
                  each Schedule B (Actuarial  Information)  to the annual report
                  (Form 5500  Series)  with  respect to each Plan whose  "funded
                  current  liability  percentage"  is less  than  90% and  whose
                  "unfunded current liability" exceeds $5,000,000 (as such terms
                  are defined in Section 302(d)(8) of ERISA);

                           (ix)  promptly and in any event within five  Business
                  Days  after  receipt  thereof  by the  Company  or  any  ERISA
                  Affiliate from the sponsor of a Multiemployer  Plan, copies of
                  each  notice  concerning  (A)  the  imposition  of  Withdrawal
                  Liability   by  any   such   Multiemployer   Plan,   (B)   the
                  reorganization or termination,  within the meaning of Title IV
                  of ERISA, of any such  Multiemployer Plan or (C) the amount of
                  liability incurred, or that may be incurred, by the Company or
                  any ERISA  Affiliate in connection with any event described in
                  clause (A) or (B), where such  imposition,  reorganization  or
                  termination  has  resulted  or would be  reasonably  likely to
                  result in a liability of the Company or any ERISA Affiliate in
                  an amount exceeding $25,000,000;

                           (x) promptly after the commencement  thereof,  notice
                  of all actions and proceedings before any court,  governmental
                  agency  or  arbitrator  affecting  the  Company  or any of its
                  Subsidiaries of the type described in Section 4.01(f); and

                           (xi) such other information respecting the Company or
                  any of its  Subsidiaries  as any Lender  through the Agent may
                  from time to time reasonably request.

                  (i) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each
         of its  Subsidiaries  and all lessees and other  Persons  operating  or
         occupying its properties,  to comply with all applicable  Environmental
         Laws and  Environmental  Permits  except where the failure to so comply
         would not be reasonably likely to have a Material Adverse Effect.

                  SECTION 5.02.  NEGATIVE COVENANTS.  So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Company will not:

                  (a) LIENS,  ETC.  Create or suffer to exist,  or permit any of
         its  Subsidiaries  to create  or  suffer to exist,  any Lien on or with
         respect  to any of its  properties,  whether  now  owned  or  hereafter


                                       44
<PAGE>

         acquired,  or assign, or permit any of its Subsidiaries to assign,  any
         right to receive income, other than:

                              (i) Permitted Liens,

                           (ii)  purchase  money  Liens  upon  or  in  any  real
                  property or  equipment  acquired or held by the Company or any
                  Subsidiary  of the Company in the ordinary  course of business
                  to secure the purchase  price of such property or equipment or
                  to secure Debt  incurred  solely for the purpose of  financing
                  the  acquisition  of such  property  or  equipment,  or  Liens
                  existing  on such  property  or  equipment  at the time of its
                  acquisition   (other   than  any   such   Liens   created   in
                  contemplation  of such  acquisition  that were not incurred to
                  finance  the  acquisition  of such  property)  or  extensions,
                  renewals or  replacements of any of the foregoing for the same
                  or a lesser amount, PROVIDED, HOWEVER, that no such Lien shall
                  extend to or cover any properties of any character  other than
                  the real  property or equipment  being  acquired,  and no such
                  extension, renewal or replacement shall extend to or cover any
                  properties not theretofore subject to the Lien being extended,
                  renewed or replaced,

                           (iii) any assignment of any right to receive income
                  existing on the Effective Date and any Liens existing on the
                  Effective Date,

                           (iv) Liens on  property  of a Person  existing at the
                  time  such  Person  is merged  into or  consolidated  with the
                  Company  or  any  Subsidiary  of  the  Company  or  becomes  a
                  Subsidiary  of the  Company;  PROVIDED  that such Liens do not
                  extend to any assets  other than those of the Person so merged
                  into or  consolidated  with the Company or such  Subsidiary or
                  acquired by the Company or such Subsidiary,

                           (v) other Liens or any other  assignment of any right
                  to receive  income (in  addition to the Liens and  assignments
                  permitted  under  clauses  (i),  (ii),  (iii),  (iv) or  (vi))
                  securing Debt in an aggregate  principal  amount not to exceed
                  $450,000,000, and

                           (vi) the  replacement,  extension  or  renewal of any
                  Lien  or  any  assignment  of  any  right  to  receive  income
                  permitted  by clause  (iii) or (iv)  above upon or in the same
                  property  theretofore  subject  thereto  or  the  replacement,
                  extension or renewal (without increase in the amount or change
                  in any  direct  or  contingent  obligor)  of the Debt  secured
                  thereby.

                  (b)  MERGERS,  ETC.  Merge or  consolidate  with or  into,  or
         convey,  transfer,  lease  or  otherwise  dispose  of  (whether  in one
         transaction or in a series of transactions) all or substantially all of
         its assets (whether now owned or hereafter acquired) to, any Person, or
         permit any of its  Subsidiaries to do so, except that any Subsidiary of
         the  Borrower  may merge or  consolidate  with or into,  or  dispose of
         assets to, any other  Subsidiary  of the  Company,  and except that any
         Subsidiary  of the  Company  may merge into or dispose of assets to the

                                       45
<PAGE>

         Company and the Company may merge with any other  Person so long as the
         Company is the surviving  corporation,  PROVIDED, in each case, that no
         Default  shall  have  occurred  and be  continuing  at the time of such
         proposed transaction or would result therefrom.

                  (c)      CHANGE IN NATURE OF BUSINESS.  Make, or permit any of
        its Subsidiaries to make, any  material change in the nature of its
        business as carried on at the date hereof.


                                   ARTICLE VI

                                EVENTS OF DEFAULT

                  SECTION 6.01.  EVENTS OF DEFAULT.  If any of the following
events ("EVENTS OF DEFAULT") shall occur and be continuing:


                  (a)  Any  Borrower  shall  fail to pay  any  principal  of any
         Advance within one Business Day after the same becomes due and payable;
         or any  Borrower  shall fail to pay any interest on any Advance or make
         any other payment of fees or other amounts payable under this Agreement
         or any Note within three  Business  Days after the same becomes due and
         payable; or

                  (b) Any  representation or warranty made by any Company herein
         or, if such  Borrower is a Designated  Subsidiary,  in such  Borrower's
         Designation  Letter,  or  by  any  Borrower  in  connection  with  this
         Agreement  shall prove to have been  incorrect in any material  respect
         when made; or

                  (c) (i) The Company shall fail to perform or observe any term,
         covenant or agreement contained in Section 5.01(d) or (h)(iii), (iv) or
         (vi)-(ix) or 5.02, or (ii) the Company or any other Borrower shall fail
         to perform or observe any term,  covenant  or  agreement  contained  in
         Section 5.01(h)(i), (ii), (v), (x) or (xi) if such failure shall remain
         unremedied  for 10 days after  written  notice  thereof shall have been
         given to the relevant Borrower by the Agent or any Lender, or (iii) the
         Company or any other  Borrower  shall  fail to  perform or observe  any
         other term,  covenant or agreement  contained in this  Agreement on its
         part  to  be  performed  or  observed  if  such  failure  shall  remain
         unremedied  for 30 days after  written  notice  thereof shall have been
         given to the relevant Borrower by the Agent or any Lender; or

                  (d) Any Borrower or any of its Subsidiaries  shall fail to pay
         any principal of or premium or interest on any Debt that is outstanding
         in a  principal  or  notional  amount  of at least  $75,000,000  in the
         aggregate (but excluding Debt  outstanding  hereunder) of such Borrower
         or such  Subsidiary (as the case may be), when the same becomes due and
         payable   (whether  by   scheduled   maturity,   required   prepayment,
         acceleration,  demand or  otherwise),  and such failure shall  continue
         after the applicable grace period,  if any,  specified in the agreement
         or instrument  relating to such Debt; or any other event shall occur or

                                       46
<PAGE>

         condition shall exist under any agreement or instrument relating to any
         such Debt and shall continue after the applicable grace period, if any,
         specified in such agreement or instrument,  if the effect of such event
         or condition is to  accelerate  the maturity of such Debt;  or any such
         Debt shall be declared to be due and payable, or required to be prepaid
         or redeemed (other than by a regularly scheduled required prepayment or
         redemption),  purchased  or  defeased,  or an offer to prepay,  redeem,
         purchase or defease  such Debt shall be  required  to be made,  in each
         case prior to the stated maturity thereof, unless the event giving rise
         to such prepayment,  redemption,  purchase or defeasance is not related
         directly  to any  action  taken  by,  or the  condition  (financial  or
         otherwise) or operations of, the Company,  any of its Subsidiaries,  or
         any of their respective properties; or


                  (e) Any  Borrower or any of its  Material  Subsidiaries  shall
         generally not pay its debts as such debts become due, or shall admit in
         writing  its  inability  to pay its debts  generally,  or shall  make a
         general  assignment  for the benefit of  creditors;  or any  proceeding
         shall be  instituted  by or against any Borrower or any of its Material
         Subsidiaries  seeking to  adjudicate  it a bankrupt  or  insolvent,  or
         seeking   liquidation,   winding   up,   reorganization,   arrangement,
         adjustment, protection, relief, or composition of it or its debts under
         any law relating to bankruptcy,  insolvency or reorganization or relief
         of  debtors,  or  seeking  the  entry of an  order  for  relief  or the
         appointment of a receiver, trustee, custodian or other similar official
         for it or for any substantial  part of its property and, in the case of
         any such proceeding  instituted  against it (but not instituted by it),
         either such  proceeding  shall  remain  undismissed  or unstayed  for a
         period of 60 days,  or any of the  actions  sought  in such  proceeding
         (including,  without  limitation,  the  entry  of an order  for  relief
         against, or the appointment of a receiver,  trustee, custodian or other
         similar  official for, it or for any substantial  part of its property)
         shall occur; or any Borrower or any of its Material  Subsidiaries shall
         take any  corporate  action to  authorize  any of the actions set forth
         above in this subsection (e); or

                  (f) Any  judgment  or order for the payment of money in excess
         of  $50,000,000  shall be rendered  against any  Borrower or any of its
         Subsidiaries  and  there  shall be any  period of 30  consecutive  days
         during which a stay of enforcement of such judgment or order, by reason
         of a pending appeal or otherwise, shall not be in effect; or

                  (g) The Company or any ERISA Affiliate shall incur, or, in the
         reasonable opinion of the Majority Lenders,  shall be reasonably likely
         to incur  liability  in excess of  $75,000,000  in the  aggregate  as a
         result of one or more of the following: (i) the occurrence of any ERISA
         Event; (ii) the partial or complete withdrawal of the Company or any of
         its  ERISA   Affiliates  from  a  Multiemployer   Plan;  or  (iii)  the
         reorganization or termination of a Multiemployer Plan; or

                  (h) Any ERISA Event shall have occurred with respect to a Plan
         and the sum  (determined  as of the date of  occurrence  of such  ERISA
         Event) of the  Insufficiency of such Plan and the  Insufficiency of any
         and all other  Plans with  respect to which an ERISA  Event  shall have
         occurred and then exist (or the  liability of the Company and the ERISA

                                       47
<PAGE>


         Affiliates related to such ERISA Event) exceeds $75,000,000; or

                  (i)  The  Company  or any  ERISA  Affiliate  shall  have  been
         notified by the sponsor of a  Multiemployer  Plan that it has  incurred
         Withdrawal Liability to such Multiemployer Plan in an amount that, when
         aggregated with all other amounts  required to be paid to Multiemployer
         Plans by the Company and the ERISA  Affiliates as Withdrawal  Liability
         (determined as of the date of such notification),  exceeds $75,000,000;
         or

                  (j)  The  Company  or any  ERISA  Affiliate  shall  have  been
         notified by the sponsor of a Multiemployer Plan that such Multiemployer
         Plan is in reorganization or is being terminated, within the meaning of
         Title  IV  of  ERISA,  and  as  a  result  of  such  reorganization  or
         termination the aggregate  annual  contributions of the Company and the
         ERISA  Affiliates  to  all   Multiemployer   Plans  that  are  then  in
         reorganization  or being terminated have been or will be increased over
         the amounts  contributed to such Multiemployer Plans for the plan years
         of such  Multiemployer  Plans  immediately  preceding  the plan year in
         which such  reorganization or termination occurs by an amount exceeding
         $75,000,000 in the aggregate;


then, and in any such event, the Agent (i) shall at the request, or may with the
consent,  of the  Majority  Lenders,  by notice to the  Company  and each  other
Borrower,  declare  the  obligation  of  each  Lender  to  make  Advances  to be
terminated,  whereupon the same shall forthwith terminate, and (ii) shall at the
request,  or may with the  consent,  of the Majority  Lenders,  by notice to the
Company and each other Borrower, declare the Notes, all interest thereon and all
other  amounts  payable  under this  Agreement to be forthwith  due and payable,
whereupon the Notes,  all such interest and all such amounts shall become and be
forthwith  due and  payable,  without  presentment,  demand,  protest or further
notice of any kind, all of which are hereby  expressly  waived by the Borrowers;
PROVIDED,  HOWEVER,  that in the event of an actual or deemed  entry of an order
for relief with respect to any Borrower under the Federal  Bankruptcy  Code, (A)
the  obligation  of each Lender to make  Advances to such  Borrower (or, if such
event has occurred in respect of the Company,  to make Advances to any Borrower)
shall  automatically  be terminated and (B) the Notes, all such interest and all
such amounts  owing by such  Borrower (or, if such event has occurred in respect
of the Company, owing by all of the Borrowers) shall automatically become and be
due and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrowers.

                                   ARTICLE VII

                                    GUARANTY

                  SECTION 7.01. GUARANTY.  For valuable  consideration,  receipt
whereof is hereby  acknowledged,  and to induce each Lender to make  Advances to
the  Designated  Subsidiaries  and to  induce  the Agent to act  hereunder,  the
Company hereby unconditionally and irrevocably guarantees to each Lender and the

                                       48
<PAGE>

Agent the punctual payment when due, whether at stated maturity, by acceleration
or otherwise, of all obligations of the Designated Subsidiaries now or hereafter
existing  under this Agreement or the Notes,  whether for  principal,  interest,
fees, indemnities, expenses or otherwise (such obligations being the "GUARANTEED
OBLIGATIONS"),  and agrees to pay any and all reasonable and documented expenses
(including  reasonable  counsel fees and expenses)  incurred by the Agent or any
Lender in  enforcing  any  rights  under this  Guaranty.  Without  limiting  the
generality of the foregoing, the Company's liability shall extend to all amounts
that constitute part of the Guaranteed Obligations and that would be owed by any
Designated  Subsidiary  to the Agent or any Lender under this  Agreement and the
Notes but for the fact that such Guaranteed Obligations are unenforceable or not
allowable  due to the  existence  of a  bankruptcy,  reorganization  or  similar
proceeding involving such Designated Subsidiary.

                  SECTION 7.02.  GUARANTY ABSOLUTE.  The Company guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
this  Agreement  regardless of any law,  regulation or order now or hereafter in
effect in any  jurisdiction  affecting  any of such  terms or the  rights of the
Agent or any Lender with respect  thereto.  The obligations of the Company under
this  Guaranty  are  independent  of the  Guaranteed  Obligations  or any  other
obligations of any Designated Subsidiary under this Agreement and the Notes, and
a separate  action or actions may be brought and prosecuted  against the Company
to enforce the  obligations of the Company under this Guaranty,  irrespective of
whether any action is brought  against any  Borrower or whether any  Borrower is
joined in any such action or actions.  The  liability of the Company  under this
Guaranty shall be irrevocable,  absolute and unconditional  irrespective of, and
the Company hereby  irrevocably waives any defenses it may now or hereafter have
in any way relating to, any or all of the following:

                  (a)      any lack of validity or enforceability of this
         Agreement or the Notes, or any other agreement or instrument relating
         thereto;

                  (b) any change in the time,  manner or place of payment of, or
         in any other term of, all or any of the  Guaranteed  Obligations or any
         other obligations of any Designated  Subsidiary under this Agreement or
         the  Notes,  or any other  amendment  or waiver  of or any  consent  to
         departure  from  this  Agreement  or  any  Note,   including,   without
         limitation,  any increase in the Guaranteed  Obligations resulting from
         the extension of additional credit to any Designated  Subsidiary or any
         of its Subsidiaries or otherwise;

                  (c)      any taking, release or amendment or waiver of or
         consent to departure from any other guaranty, for all or any of the
         Guaranteed Obligations;

                  (d)      any change, restructuring or termination of the
         corporate structure or existence of any Designated Subsidiary or any of
         its Subsidiaries;

                  (e) any  failure of the Agent or any Lender to disclose to the
         Company or any Designated  Subsidiary any  information  relating to the
         financial  condition,  operations,   properties  or  prospects  of  any
         Designated  Subsidiary  now or in the future known to the Agent or such


                                       49
<PAGE>

         Lender, as the case may be (the Company waiving any duty on the part of
         the Agent or the Lenders to disclose such information); or

                  (f) any other circumstance (including, without limitation, any
         statute  of  limitations)  or  any  existence  of or  reliance  on  any
         representation  by  the  Agent  or  any  Lender  that  might  otherwise
         constitute a defense  available to, or a discharge  of, any  Designated
         Subsidiary or the Company or any other guarantor or surety.

This Guaranty shall  continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must  otherwise  be returned by the Agent or any Lender upon the  insolvency,
bankruptcy or reorganization of any Designated  Subsidiary or otherwise,  all as
though such payment had not been made.

                  SECTION  7.03.  WAIVERS AND  ACKNOWLEDGMENTS.  (a) The Company
hereby waives promptness,  diligence,  notice of acceptance and any other notice
with  respect to any of the  Guaranteed  Obligations  and this  Guaranty and any
requirement  that the Agent or any Lender  exhaust  any right or take any action
against any Designated Subsidiary or any other Person, and all other notices and
demands whatsoever.

                  (b) The  Company  hereby  waives  any  right  to  revoke  this
Guaranty,  and  acknowledges  that this  Guaranty  is  continuing  in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.

                  (c) The Company  acknowledges that it will receive substantial
direct and indirect  benefits from the financing  arrangements  contemplated  by
this Agreement and the Notes and that the waivers set forth in this Section 7.03
are knowingly made in contemplation of such benefits.

                  SECTION 7.04.  SUBROGATION.  The Company will not exercise any
rights that it may now or hereafter acquire against any Designated Subsidiary or
any other insider guarantor that arise from the existence,  payment, performance
or enforcement of the Company's obligations under this Guaranty or any provision
of this  Agreement or the Notes,  including,  without  limitation,  any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to  participate  in any claim or remedy of the Agent or any Lender against
such  Designated  Subsidiary or any other insider  guarantor or any  collateral,
whether or not such claim,  remedy or right arises in equity or under  contract,
statute  or common  law,  including,  without  limitation,  the right to take or
receive from such Designated Subsidiary or any other insider guarantor, directly
or  indirectly,  in cash or other property or by set-off or in any other manner,
payment or security on account of such claim,  remedy or right, unless and until
all of the  Guaranteed  Obligations  and all other  amounts  payable  under this
Guaranty  shall  have been paid in full in cash and the  Commitments  shall have
expired or  terminated.  If any amount shall be paid to the Company in violation
of the preceding  sentence at any time prior to the later of the payment in full
in cash of the Guaranteed  Obligations  and all other amounts payable under this
Guaranty and the Final Maturity Date, such amount shall be held in trust for the
benefit of the Agent and Lenders and shall  forthwith be paid to the Agent to be
credited and applied to the Guaranteed Obligations and all other amounts payable

                                       50
<PAGE>


under this Guaranty,  whether matured or unmatured, in accordance with the terms
of this Agreement and the Notes,  or to be held as collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty  thereafter arising. If
(i) the Company shall make payment to the Agent or any Lender of all or any part
of the Guaranteed  Obligations,  (ii) all of the Guaranteed  Obligations and all
other  amounts  payable  under this  Guaranty  shall be paid in full in cash and
(iii) the Final  Maturity  Date shall have  occurred,  the Agent and the Lenders
will, at the Company's  request and expense,  execute and deliver to the Company
appropriate documents,  without recourse and without representation or warranty,
necessary to evidence the transfer by  subrogation to the Company of an interest
in the Guaranteed Obligations resulting from such payment by the Company.


         SECTION  7.05.  CONTINUING  GUARANTY;   ASSIGNMENTS  UNDER  THE  CREDIT
AGREEMENT.  This Guaranty is a continuing  guaranty and shall (a) remain in full
force  and  effect  until  the  later  of the  payment  in  full  in cash of the
Guaranteed  Obligations  and all other amounts  payable under this Agreement and
the Final  Maturity  Date,  (b) be binding upon the Company,  its successors and
assigns and (c) inure to the benefit of and be  enforceable by the Agent and the
Lenders  and their  respective  successors,  transferees  and  assigns.  Without
limiting the  generality of the  foregoing  clause (c), any Lender may assign or
otherwise  transfer all or any portion of its rights and obligations  under this
Agreement (including,  without limitation, all or any portion of its Commitment,
the Advances  owing to it and the Note or Notes held by it) to any other Person,
and such other Person  shall  thereupon  become  vested with all the benefits in
respect thereof granted to such Lender herein or otherwise,  in each case as and
to the extent provided in Section 9.07 of this Agreement.

         SECTION  7.06.  NO STAY.  The Company  agrees that,  as between (a) the
Company and (b) the Lenders and the Agent,  the  Guaranteed  Obligations  of any
Designated  Subsidiary guaranteed by the Company hereunder may be declared to be
forthwith  due and payable as provided in Article VI hereof for purposes of this
Guaranty by  declaration to the Company as guarantor  notwithstanding  any stay,
injunction or other  prohibition  preventing  such  declaration  as against such
Designated  Subsidiary and that, in the event of such declaration to the Company
as guarantor,  such  Guaranteed  Obligations  (whether or not due and payable by
such  Designated  Subsidiary),  shall  forthwith  become due and  payable by the
Company for purposes of this Guaranty.

                                       51
<PAGE>

                                  ARTICLE VIII

                                    THE AGENT

                  SECTION  8.01.  AUTHORIZATION  AND ACTION.  Each Lender hereby
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion  under this Agreement as are delegated to
the Agent by the terms hereof,  together with such powers and  discretion as are
reasonably  incidental  thereto. As to any matters not expressly provided for by
this Agreement (including, without limitation,  enforcement or collection of the
Notes),  the Agent shall not be required to exercise any  discretion or take any
action,  but shall be  required  to act or to refrain  from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders,  and such  instructions  shall be binding upon all Lenders
and all  holders  of  Notes;  PROVIDED,  HOWEVER,  that the  Agent  shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this  Agreement  or  applicable  law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by any Borrower pursuant to
the terms of this Agreement.

                  SECTION 8.02. AGENT'S RELIANCE, ETC. Neither the Agent nor any
of its directors,  officers,  agents or employees shall be liable for any action
taken or  omitted  to be taken by it or them  under or in  connection  with this
Agreement,  except for its or their own gross negligence or willful  misconduct.
Without limitation of the generality of the foregoing,  the Agent: (a) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an  Assignment  and  Acceptance  entered into by the Lender that is the payee of
such Note, as assignor,  and an Eligible Assignee,  as assignee,  as provided in
Section  9.07;  (b) may consult with legal  counsel  (including  counsel for any
Borrower),  independent  public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance  with the advice of such counsel,  accountants or experts;  (c)
makes no warranty or  representation  to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection  with this  Agreement;  (d) shall not have any
duty to ascertain or to inquire as to the  performance  or  observance of any of
the terms, covenants or conditions of this Agreement on the part of any Borrower
or to inspect the property  (including  the books and records) of any  Borrower;
(e) shall not be  responsible  to any  Lender for the due  execution,  legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other instrument or document  furnished pursuant hereto; and (f) shall incur
no  liability  under or in respect of this  Agreement by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telecopier,
telegram or telex) believed by it to be genuine and signed or sent by the proper
party or parties.

                  SECTION  8.03.  CITIBANK AND  AFFILIATES.  With respect to its
Commitment,  the Advances made by it and the Note issued to it,  Citibank  shall
have the same rights and powers under this Agreement as any other Lender and may
exercise  the same as though it were not the  Agent;  and the term  "Lender"  or
"Lenders" shall, unless otherwise expressly  indicated,  include Citibank in its
individual capacity.  Citibank and its Affiliates may accept deposits from, lend
money  to,  act as  trustee  under  indentures  of,  accept  investment  banking
engagements from and generally engage in any kind of business with, the Company,

                                       52
<PAGE>


any  of its  Subsidiaries  and  any  Person  who  may do  business  with  or own
securities  of the Company or any such  Subsidiary,  all as if Citibank were not
the Agent and without any duty to account therefor to the Lenders.

                  SECTION 8.04. LENDER CREDIT DECISION. Each Lender acknowledges
that it has,  independently  and  without  reliance  upon the Agent or any other
Lender and based on the  financial  statements  referred to in Section  4.01 and
such other documents and information as it has deemed appropriate,  made its own
credit  analysis  and  decision to enter into this  Agreement.  Each Lender also
acknowledges that it will,  independently and without reliance upon the Agent or
any other Lender and based on such  documents and  information  as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under this Agreement.

                  SECTION 8.05. INDEMNIFICATION.  The Lenders agree to indemnify
the Agent (to the extent not reimbursed by a Borrower), ratably according to the
respective  principal amounts of the Revolving Credit Notes then held by each of
them (or if no  Revolving  Credit  Notes are at the time  outstanding  or if any
Revolving  Credit  Notes  are  held by  Persons  that are not  Lenders,  ratably
according to the respective amounts of their Commitments),  from and against any
and  all  liabilities,   obligations,   losses,  damages,  penalties,   actions,
judgments,  suits,  costs,  expenses  or  disbursements  of any  kind or  nature
whatsoever that may be imposed on, incurred by, or asserted against the Agent in
any way  relating to or arising  out of this  Agreement  or any action  taken or
omitted by the Agent  under this  Agreement,  PROVIDED  that no Lender  shall be
liable  for any  portion  of such  liabilities,  obligations,  losses,  damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful  misconduct.  Without limitation of
the  foregoing,  each Lender agrees to reimburse the Agent  promptly upon demand
for its ratable share of any  out-of-pocket  expenses  (including  counsel fees)
incurred by the Agent in connection with the preparation,  execution,  delivery,
administration,   modification,   amendment  or  enforcement   (whether  through
negotiations,  legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities  under, this Agreement,  to the extent that the Agent
is not reimbursed for such expenses by a Borrower.

                  SECTION  8.06.  SUCCESSOR  AGENT.  The Agent may resign at any
time by giving  written  notice thereof to the Lenders and each Borrower and may
be removed at any time with or without  cause by the  Majority  Lenders and such
resignation  or removal shall be effective  upon the  appointment of a successor
Agent. Upon any such resignation or removal, the Majority Lenders shall have the
right to appoint a successor  Agent,  subject to the Company's  approval  (which
shall not be  unreasonably  withheld).  If no successor Agent shall have been so
appointed by the Majority  Lenders,  and shall have accepted  such  appointment,
within 30 days after the retiring Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders,  appoint a successor  Agent,  which shall be a commercial
bank  organized  under the laws of the United  States of America or of any State
thereof  and having a combined  capital  and  surplus of at least  $250,000,000,
subject to the Company's  approval (which shall not be  unreasonably  withheld).
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, discretion, privileges and duties of the retiring Agent, and the

                                       53
<PAGE>


retiring Agent shall be discharged  from its duties and  obligations  under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.

                                   ARTICLE IX

                                  MISCELLANEOUS

                  SECTION 9.01.  AMENDMENTS,  ETC. No amendment or waiver of any
provision of this  Agreement or the Revolving  Credit Notes,  nor consent to any
departure by any Borrower therefrom,  shall in any event be effective unless the
same  shall be in  writing  and signed by the  Majority  Lenders,  and then such
waiver or consent shall be effective  only in the specific  instance and for the
specific purpose for which given; PROVIDED,  HOWEVER, that no amendment,  waiver
or consent shall, unless in writing and signed by all the Lenders, do any of the
following: (a) increase the Commitment of any Lender (other than as provided for
in Section  2.05(c) or Section  2.18(a)) or subject any Lender to any additional
monetary obligations, (b) reduce the principal of, or interest on, the Revolving
Credit Notes or any fees or other amounts  payable  hereunder,  (c) postpone any
date fixed for any payment of principal of, or interest on, the Revolving Credit
Notes or any fees or other amounts payable hereunder (other than as provided for
under Section 2.18),  (d) release the Company from any of its obligations  under
Article VII or limit the  liability  of the Company  thereunder  or (e) amend or
waive this Section 9.01 or the  definition of "Majority  Lenders";  and PROVIDED
FURTHER that no amendment, waiver or consent shall, unless in writing and signed
by the Agent in  addition  to the Lenders  required  above to take such  action,
affect the rights or duties of the Agent under this Agreement or any Note.

                  SECTION   9.02.   NOTICES,   ETC.   All   notices   and  other
communications provided for hereunder shall be in writing (including telecopier,
telegraphic or telex communication) and mailed, telecopied, telegraphed, telexed
or  delivered,  if to  the  Company  or to  any  Designated  Subsidiary,  at the
Company's  address at  Corporate  Headquarters,  100  Crystal A Drive,  Hershey,
Pennsylvania 17033-0810, Attention: Treasury Department, Fax No. (717) 534-6724;
if to any Initial Lender, at its Domestic Lending Office specified  opposite its
name on  Schedule I hereto;  if to any other  Lender,  at its  Domestic  Lending
Office  specified in the Assumption  Agreement or the Assignment and Acceptance,
as the case may be,  pursuant to which it became a Lender;  and if to the Agent,
at its address at One Court Square,  Seventh  Floor,  Long Island City, New York
11120, Attention: Bank Loan Syndications,  Fax No. (718) 248-4844; or, as to any
Borrower  or the Agent,  at such other  address as shall be  designated  by such
party in a written  notice to the other parties and, as to each other party,  at
such other address as shall be  designated by such party in a written  notice to
the  Company and the Agent.  All such  notices and  communications  shall,  when
mailed,  telecopied,  telegraphed or telexed, be effective when deposited in the
mails,  telecopied,  delivered  to the  telegraph  company or confirmed by telex
answerback,  respectively,  except that notices and  communications to the Agent
pursuant to Article II, III or VIII shall not be effective until received by the
Agent.  Delivery by  telecopier of an executed  counterpart  of any amendment or
waiver of any provision of this  Agreement or the Notes or of any Exhibit hereto

                                       54
<PAGE>


to be executed  and  delivered  hereunder  shall be  effective  as delivery of a
manually executed counterpart thereof.

                  SECTION 9.03. NO WAIVER;  REMEDIES.  No failure on the part of
any  Lender  or the Agent to  exercise,  and no delay in  exercising,  any right
hereunder  or under any Note shall  operate as a waiver  thereof;  nor shall any
single or  partial  exercise  of any such  right  preclude  any other or further
exercise  thereof  or the  exercise  of any other  right.  The  remedies  herein
provided are cumulative and not exclusive of any remedies provided by law.

                  SECTION 9.04.  COSTS AND EXPENSES.  (a) The Company  agrees to
pay or cause to be paid on  demand  all  reasonable  and  documented  costs  and
expenses of the Agent in connection with the preparation,  execution,  delivery,
administration,  modification and amendment of this Agreement, the Notes and the
other documents to be delivered hereunder,  including,  without limitation,  (A)
all due  diligence,  syndication  (including  printing,  distribution  and  bank
meetings),  transportation,  computer,  duplication,  and  messenger  costs  and
expenses and (B) the reasonable  fees and expenses of counsel for the Agent with
respect  thereto  and with  respect to  advising  the Agent as to its rights and
responsibilities  under this  Agreement.  The Company  further  agrees to pay or
cause to be paid on demand all reasonable  and documented  costs and expenses of
the Agent and the Lenders,  if any (including,  without  limitation,  reasonable
counsel fees and expenses),  in connection with the enforcement (whether through
negotiations,  legal proceedings or otherwise) of this Agreement,  the Notes and
the other documents to be delivered  hereunder,  including,  without limitation,
reasonable  fees and  expenses  of  counsel  for the  Agent  and each  Lender in
connection with the enforcement of rights under this Section 9.04(a).

                  (b) The Company  agrees to  indemnify  and hold  harmless  the
Agent  and  each  Lender  and  each of  their  Affiliates  and  their  officers,
directors,  employees,  agents and advisors (each, an "INDEMNIFIED  PARTY") from
and  against any and all  claims,  damages,  losses,  liabilities  and  expenses
(including,  without  limitation,  reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or by reason of, or in connection with
the  preparation for a defense of, any  investigation,  litigation or proceeding
arising out of, related to or in connection with the Notes, this Agreement,  any
of the  transactions  contemplated  herein or the actual or proposed  use of the
proceeds  of the  Advances  whether  or not such  investigation,  litigation  or
proceeding  is  brought  by any  Borrower  or  the  directors,  shareholders  or
creditors  of any  Borrower or an  Indemnified  Party or any other Person or any
Indemnified  Party  is  otherwise  a  party  thereto  and  whether  or  not  the
transactions  contemplated  hereby are  consummated,  except to the extent  such
claim,  damage, loss, liability or expense results from such Indemnified Party's
gross negligence or willful misconduct.

                  (c) Promptly after receipt by an  Indemnified  Party of notice
of the  commencement  of any action or proceeding  involving any claim,  damage,
loss or liability  referred to in paragraph (b) above,  such  Indemnified  Party
will,  if a claim in respect  thereof is to be made against any  Borrower,  give
written  notice to such Borrower of the  commencement  of such action;  PROVIDED
that the  failure of any  Indemnified  Party to give  notice as provided in this

                                       55
<PAGE>


Section  9.04(c)  shall not  relieve  such  Borrower  of its  obligations  under
paragraph  (b) above,  except  only to the extent  that such  Borrower  actually
suffers  damage solely as a result of such failure to give notice.  In the event
that any such action or  proceeding  is brought  against an  Indemnified  Party,
unless in such Indemnified  Party's sole judgment (based on advise of counsel) a
conflict of interest between such Indemnified  Party and a Borrower may exist in
respect thereof, such Borrower shall be entitled to participate in and to assume
the defense thereof with counsel  reasonably  satisfactory  to such  Indemnified
Party. After notice from such Borrower to such Indemnified Party of its election
to  assume  the  defense  thereof,  such  Borrower  shall  not be liable to such
Indemnified Party for any legal or other expenses  subsequently incurred by such
Indemnified  Party in connection with the defense thereof (other than reasonable
costs of investigation). No Borrower shall consent to the entry of any dismissal
or judgment, or enter into any settlement of any pending or threatened action or
proceeding  against any Indemnified Party that is or could have been a party and
for whom indemnity  could have been sought under paragraph (b) above without the
consent of such Indemnified Party unless such judgment,  dismissal or settlement
includes  as an  unconditional  term  thereof  the giving of a release  from all
liability in respect of such action or  proceeding  to such  Indemnified  Party;
PROVIDED that each  Indemnified  Party agrees that, if a Borrower  reconfirms to
such  Indemnified  Party that it is indemnified from all liability in respect of
any such  action or  proceeding  referred  to in the  preceding  sentence,  such
Indemnified  Party  will not enter  into any  settlement  of any such  action or
proceeding  without the consent of such  Borrower  (which  consent  shall not be
unreasonably withheld).  In addition to the foregoing,  each Borrower shall not,
in assuming  the defense of any  Indemnified  Party,  agree to any  dismissal or
settlement  without the prior written consent of such Indemnified  Party if such
dismissal or settlement  (A) would require any admission or  acknowledgement  of
culpability or wrongdoing by such Indemnified Party or (B) would provide for any
nonmonetary relief to any Persons to be performed by such Indemnified Party.

                  (d) If any  payment of  principal  of, or  Conversion  of, any
Eurodollar  Rate  Advance or LIBO Rate Advance is made by any Borrower to or for
the account of a Lender  other than on the last day of the  Interest  Period for
such  Advance,  as a result of (i) a payment or  Conversion  pursuant to Section
2.03(d),  2.10, 2.12 or 2.18(a),  (ii) a Commitment Increase pursuant to Section
2.05(c),  (iii)  acceleration  of the maturity of the Notes  pursuant to Section
6.01 or for any other reason,  or (iv) by an Eligible Assignee to a Lender other
than on the last day of the Interest  Period for such Advance upon an assignment
of rights and obligations under this Agreement  pursuant to Section 9.07(a) as a
result of a demand by the Company pursuant to Section 2.17, such Borrower shall,
upon demand by such Lender (with a copy of such demand to the Agent), pay to the
Agent for the  account of such Lender any amounts  required to  compensate  such
Lender for any additional  losses,  costs or expenses that it may reasonably and
actually  incur as a result of such payment or  Conversion,  including,  without
limitation,  any loss (other than loss of anticipated profits),  cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.

                  (e) Without  prejudice to the survival of any other  agreement
of any Borrower  hereunder,  the  agreements  and  obligations  of such Borrower
contained in Sections  2.11,  2.14 and 9.04 shall survive the payment in full of
principal, interest and all other amounts payable hereunder and under the Notes.

                                       56
<PAGE>


                  SECTION 9.05.  RIGHT OF SET-OFF.  Upon (a) the  occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent  specified by Section 6.01 to authorize the Agent
to declare the Notes due and payable pursuant to the provisions of Section 6.01,
each  Lender is  hereby  authorized  at any time and from  time to time,  to the
fullest  extent  permitted  by law,  to set off and apply  any and all  deposits
(general or special,  time or demand,  provisional or final but excluding  trust
accounts)  at any time held and  other  indebtedness  at any time  owing by such
Lender to or for the credit or the account of any  Borrower  against any and all
of the  obligations  of such  Borrower  now or  hereafter  existing  under  this
Agreement and the Note of such Borrower held by such Lender, whether or not such
Lender shall have made any demand under this Agreement or such Note. Each Lender
agrees  promptly  to notify the  relevant  Borrower  after any such  set-off and
application,  PROVIDED that the failure to give such notice shall not affect the
validity of such set-off and  application.  The rights of each Lender under this
Section  are in  addition  to other  rights  and  remedies  (including,  without
limitation, other rights of set-off) that such Lender may have.

                  SECTION 9.06.  BINDING  EFFECT.  This  Agreement  shall become
effective  (other than Sections 2.01 and 2.03, which shall only become effective
upon satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been  executed  by the Company and the Agent and when the Agent shall
have been notified by each Initial  Lender that such Initial Lender has executed
it and  thereafter  shall be  binding  upon and  inure  to the  benefit  of each
Borrower, the Agent and each Lender and their respective successors and assigns,
except that no Borrower  shall have the right to assign its rights  hereunder or
any interest herein without the prior written consent of the Lenders.

                  SECTION 9.07.  ASSIGNMENTS,  DESIGNATIONS AND  PARTICIPATIONS.
(a) Each Lender may at any time,  and if  demanded  by the  Company  pursuant to
Section 2.17, shall assign to one or more Persons all or a portion of its rights
and obligations under this Agreement  (including,  without limitation,  all or a
portion of its  Commitment,  the Revolving  Credit  Advances owing to it and the
Revolving  Credit Note or Notes held by it);  provided,  HOWEVER,  that (i) each
such  assignment  shall be of a constant,  and not a varying,  percentage of all
rights  and  obligations  under  this  Agreement  (other  than any right to make
Competitive  Bid Advances,  Competitive Bid Advances owing to it and Competitive
Bid  Notes),  (ii)  except  in the  case  of an  assignment  to a  Person  that,
immediately prior to such assignment,  was a Lender or an assignment of all of a
Lender's  rights  and  obligations  under  this  Agreement,  the  amount  of the
Commitment  of the  assigning  Lender  being  assigned  pursuant  to  each  such
assignment  (determined as of the date of the  Assignment  and  Acceptance  with
respect to such assignment)  shall in no event be less than  $10,000,000,  (iii)
each such assignment shall be to an Eligible Assignee, (iv) each such assignment
made as a result of a demand by the Company  pursuant  to Section  2.17 shall be
arranged by the Company after consultation with the Agent and shall be either an
assignment of all of the rights and  obligations  of the assigning  Lender under

                                       57
<PAGE>


this Agreement or an assignment of a portion of such rights and obligations made
concurrently  with  another  such  assignment  or other  such  assignments  that
together cover all of the rights and  obligations of the assigning  Lender under
this Agreement,  (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Company  pursuant  to Section  2.17 (A) so long as a
Default shall have occurred and be continuing,  (B) unless and until such Lender
shall have  received one or more  payments  from either the  Company,  any other
Borrower or one or more Eligible Assignees in an aggregate amount at least equal
to the  aggregate  outstanding  principal  amount of the Advances  owing to such
Lender,  together with accrued  interest  thereon to the date of payment of such
principal  amount  and all other  amounts  payable  to such  Lender  under  this
Agreement  (including,  but not limited to, any amounts owing under Section 2.11
and  Section  2.14),  and the  Company  shall  have  satisfied  all of its other
obligations  under this Agreement as of the effective date of the assignment and
(C) if any such Eligible  Assignee is not an existing Lender,  the Company shall
have paid to the Agent a  processing  and  recordation  fee of $1,000,  (vi) the
parties to each such assignment  shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with  any  Revolving  Credit  Note  subject  to  such  assignment  and,  if such
assignment  does not occur as a result of a demand by the  Company  pursuant  to
Section  2.17 (in which case the  Company  shall pay the fee  required by clause
(v)(C) of this Section 9.07(a)), a processing and recordation fee of $3,000, and
(vii) in the case of an  assignment  to any  Affiliate  of such  Lender  that is
engaged in the business of commercial  banking,  notice  thereof shall have been
given to the Company and the Agent.  Upon such execution,  delivery,  acceptance
and recording,  from and after the effective  date specified in each  Assignment
and Acceptance,  (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and  obligations  hereunder have been assigned to it pursuant
to such Assignment and  Acceptance,  have the rights and obligations of a Lender
hereunder  and (y) the Lender  assignor  thereunder  shall,  to the extent  that
rights and  obligations  hereunder  have been  assigned  by it  pursuant to such
Assignment  and  Acceptance,  relinquish  its  rights and be  released  from its
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and  obligations  under this  Agreement,  such Lender  shall cease to be a party
hereto).

                  (b) By executing and delivering an Assignment and  Acceptance,
the Lender assignor  thereunder and the assignee thereunder confirm to and agree
with each  other and the other  parties  hereto as  follows:  (i) other  than as
provided in such  Assignment  and  Acceptance,  such  assigning  Lender makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in connection  with this
Agreement or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of this  Agreement  or any other  instrument  or  document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility  with respect to the financial  condition
of any Borrower or the  performance  or observance by any Borrower of any of its
obligations  under this Agreement or any other instrument or document  furnished
pursuant  hereto;  (iii) such  assignee  confirms that it has received a copy of
this Agreement,  together with copies of the financial statements referred to in
Section  4.01(e),  the most recent financial  statements  referred to in Section
5.01(h) and such other documents and information as it has deemed appropriate to
make its own credit  analysis  and  decision to enter into such  Assignment  and
Acceptance; (iv) such assignee will, independently and without reliance upon the
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions in taking or not taking action under this Agreement;  (v) such
assignee confirms that it is an Eligible  Assignee;  (vi) such assignee appoints

                                       58
<PAGE>


and  authorizes  the Agent to take such  action  as agent on its  behalf  and to
exercise such powers and discretion under this Agreement as are delegated to the
Agent by the terms  hereof,  together  with such  powers and  discretion  as are
reasonably  incidental  thereto;  and (vii) such  assignee  agrees  that it will
perform in accordance with their terms all of the obligations  that by the terms
of this Agreement are required to be performed by it as a Lender.

                  (c) Upon its receipt of an Assignment and Acceptance  executed
by an  assigning  Lender and an  assignee  representing  that it is an  Eligible
Assignee,  together  with any  Revolving  Credit  Note or Notes  subject to such
assignment,  the  Agent  shall,  if such  Assignment  and  Acceptance  has  been
completed and is in substantially the form of Exhibit C hereto,  (i) accept such
Assignment and Acceptance,  (ii) record the information contained therein in the
Register  and (iii) give prompt  notice  thereof to each  Borrower.  Within five
Business  Days  after its  receipt of such  notice,  each  Borrower,  at its own
expense,  shall execute and deliver to the Agent in exchange for the surrendered
Revolving  Credit Note of such Borrower a new Revolving Credit Note to the order
of such Eligible  Assignee in an amount equal to the Commitment  assumed by such
Eligible  Assignee  pursuant  to such  Assignment  and  Acceptance  and,  if the
assigning  Lender has retained a Commitment  hereunder,  a new Revolving  Credit
Note to the order of the assigning  Lender in an amount equal to the  Commitment
retained  by it  hereunder.  Such  new  Revolving  Credit  Note or  Notes of any
Borrower  shall be in an  aggregate  principal  amount  equal  to the  aggregate
principal  amount  of the  surrendered  Revolving  Credit  Note or Notes of such
Borrower,  shall be dated the effective  date of such  Assignment and Acceptance
and shall otherwise be in substantially the form of Exhibit A-1 hereto.

                  (d) The Agent shall  maintain  at its  address  referred to in
Section 9.02 a copy of each Assignment and Acceptance  delivered to and accepted
by it and a  register  for the  recordation  of the names and  addresses  of the
Lenders and the  Commitment  of, and principal  amount of the Advances owing to,
each Lender  from time to time (the  "REGISTER").  The  entries in the  Register
shall be conclusive and binding for all purposes,  absent  manifest  error,  and
each  Borrower,  the Agent and the Lenders  may treat each Person  whose name is
recorded  in the  Register  as a  Lender  hereunder  for  all  purposes  of this
Agreement. The Register shall be available for inspection by any Borrower or any
Lender  at any  reasonable  time and from  time to time  upon  reasonable  prior
notice.

                  (e) Each Lender may sell  participations  to one or more banks
or other  entities  (other than any Borrower or any of its  Affiliates) in or to
all or a portion of its rights and obligations under this Agreement  (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and the Note or Notes held by it);  PROVIDED,  HOWEVER,  that (i) such  Lender's
obligations under this Agreement (including,  without limitation, its Commitment
to any Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely  responsible  to the other  parties  hereto for the  performance  of such
obligations,  (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement,  (iv) each Borrower, the Agent and the other Lenders
shall  continue to deal solely and directly with such Lender in connection  with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such  participation  shall have any right to approve any  amendment or

                                       59
<PAGE>

waiver of any  provision of this  Agreement  or any Note,  or any consent to any
departure by any Borrower  therefrom,  except to the extent that such amendment,
waiver or consent  would reduce the  principal  of, or interest on, the Notes or
any fees or other amounts payable hereunder,  in each case to the extent subject
to such  participation,  or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.  Each Lender agrees that,
promptly upon selling any such  participation  in  accordance  with this Section
9.07(e), such Lender shall deliver written notice thereof to the Company.

                  (f) Any Lender  may,  in  connection  with any  assignment  or
participation or proposed  assignment or participation  pursuant to this Section
9.07,  disclose  to the  assignee,  or  participant  or  proposed  assignee,  or
participant,  any  information  relating  to the  Company or any other  Borrower
furnished to such Lender by or on behalf of such Borrower;  PROVIDED that, prior
to any such  disclosure,  the assignee,  or participant or proposed  assignee or
participant  shall agree to preserve  the  confidentiality  of any  Confidential
Information relating to such Borrower received by it from such Lender.

                  (g)  Notwithstanding  any  other  provision  set forth in this
Agreement,  any Lender may at any time create a security  interest in all or any
portion of its rights under this Agreement (including,  without limitation,  the
Advances  owing to it and the Note or Notes held by it) in favor of any  Federal
Reserve Bank in  accordance  with  Regulation A of the Board of Governors of the
Federal Reserve System.

                  SECTION 9.08. DESIGNATED  SUBSIDIARIES.  (a) DESIGNATION.  The
Company  may at any time,  and from time to time,  by delivery to the Agent of a
Designation  Letter duly executed by the Company and the  respective  Subsidiary
and substantially in the form of Exhibit F hereto,  designate such Subsidiary as
a "Designated  Subsidiary"  for purposes of this  Agreement and such  Subsidiary
shall thereupon become a "Designated  Subsidiary" for purposes of this Agreement
and,  as such,  shall  have all of the  rights  and  obligations  of a  Borrower
hereunder.  The Agent shall promptly notify each Lender of each such designation
by the Company and the identity of the respective Subsidiary.

                  (b)  TERMINATION.  Upon the payment and performance in full of
all of the  indebtedness,  liabilities and obligations  under this Agreement and
the Notes of any Designated Subsidiary then, so long as at the time no Notice of
Revolving  Credit Borrowing or Notice of Competitive Bid Borrowing in respect of
such  Designated  Subsidiary  is  outstanding,  such  Subsidiary's  status  as a
"Designated  Subsidiary"  shall  terminate  upon  notice to such effect from the
Agent to the  Lenders  (which  notice  the Agent  shall give  promptly  upon its
receipt of a request therefor from the Company).  Thereafter,  the Lenders shall
be under no further  obligation to make any Advance hereunder to such Designated
Subsidiary.

                  SECTION  9.09.  CONFIDENTIALITY.  Neither  the  Agent  nor any
Lender shall disclose any  Confidential  Information to any other Person without
the  consent of the  relevant  Borrower,  other than (a) to the  Agent's or such
Lender's   officers,   directors,   employees,   agents  and  advisors  and,  as
contemplated  by  Section  9.07(f),  to  actual  or  prospective  assignees  and

                                       60
<PAGE>

participants,  and  then  only  on a  need-to-know  and  confidential  basis  in
connection with the transactions contemplated by this Agreement, (b) pursuant to
subpoena or other legal process or as otherwise  required by law (provided  that
the Person making such disclosure shall, to the extent permitted by law, provide
the Company with notice thereof), and (c) as requested or required by any state,
federal or foreign  authority  or examiner  regulating  banks or banking  having
jurisdiction over any Lender.

                  SECTION 9.10.  GOVERNING LAW.  This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.

                  SECTION 9.11. EXECUTION IN COUNTERPARTS. This Agreement may be
executed  in any  number of  counterparts  and by  different  parties  hereto in
separate  counterparts,  each of which when so executed shall be deemed to be an
original  and all of which  taken  together  shall  constitute  one and the same
agreement.  Delivery of an  executed  counterpart  of a  signature  page to this
Agreement by  telecopier  shall be effective as delivery of a manually  executed
counterpart of this Agreement.

                  SECTION  9.12.  JURISDICTION,  ETC.  (a)  Each of the  parties
hereto  hereby  irrevocably  and   unconditionally   submits  to  the  exclusive
jurisdiction  only of any New York State  court or  federal  court of the United
States of America  sitting in New York City,  and any  appellate  court from any
thereof,  in any  action  or  proceeding  arising  out of or  relating  to  this
Agreement or the Notes, or for  recognition or enforcement of any judgment,  and
each of the parties hereto hereby  irrevocably and  unconditionally  agrees that
all  claims  in  respect  of any such  action  or  proceeding  may be heard  and
determined only in any such New York State court or, to the extent  permitted by
law, in such federal court.  Notwithstanding the foregoing sentence, each of the
parties  hereto  agrees that a final  judgment in any such action or  proceeding
shall be conclusive  and may be enforced in other  jurisdictions  by suit on the
judgment or in any other manner provided by law. Each Designated Subsidiary that
has its  principal  place of  business  outside of the United  States of America
hereby  agrees that service of process in any such action or  proceeding  may be
made upon the Company at its offices  specified  in Section  9.02 (the  "PROCESS
AGENT") and each such  Designated  Subsidiary  hereby  irrevocably  appoints the
Process Agent its authorized agent to accept such service of process, and agrees
that the  failure of the  Process  Agent to give any notice of any such  service
shall not  impair or affect the  validity  of such  service  or of any  judgment
rendered in any action or proceeding based thereon. Each Borrower hereby further
irrevocably  consents to the service of process in any action or  proceeding  in
such  courts by the  mailing  thereof by any  parties  hereto by  registered  or
certified mail,  postage  prepaid,  to such Borrower at its address set forth in
Section 9.02.  Nothing in this  Agreement  shall affect any right that any party
may otherwise have to serve legal process in any other manner  permitted by law.
To the extent that any  Designated  Subsidiary  has or hereafter may acquire any
immunity  from  jurisdiction  of any  court or from any legal  process  (whether
through service or notice,  attachment  prior to judgment,  attachment in aid of
execution,  execution or otherwise) with respect to itself or its property, such
Designated  Subsidiary hereby irrevocably waives such immunity in respect of its
obligations under this Agreement.

                                       61
<PAGE>


                  (b) Each of the parties hereto irrevocably and unconditionally
waives,  to the  fullest  extent  it may  legally  and  effectively  do so,  any
objection  that it may now or hereafter have to the laying of venue of any suit,
action or proceeding  arising out of or relating to this  Agreement or the Notes
in any New York State or federal court of the United  States of America  sitting
in New York City. Each of the parties hereto hereby  irrevocably  waives, to the
fullest  extent  permitted by law, the defense of an  inconvenient  forum to the
maintenance of such action or proceeding in any such court.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                       62
<PAGE>



                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                                                HERSHEY FOODS CORPORATION

                                               By  /S/ WILLIAM F. CHRIST
                                                  -------------------------
                                                  Title: Senior VP, CFO and
                                                  Treasurer

                                               By  /S/ ROSA C. STROH
                                                  -------------------------
                                                  Title: Assistant Treasurer

                                                IBANK, N.A.,
                                                  as Administrative Agent

                                               By  /S/ ROBERT M. SPENCE
                                                   -------------------------
                                                   Title: Managing Director

                                                BANC AMERICA SECURITIES LLC,
                                                  as Co-Syndication Agent

                                               By  /S/ J. CASEY COSGROVE
                                                  -------------------------
                                                   Title: Vice President

                                                SALOMON SMITH BARNEY INC.,
                                                  as Co-Syndication Agent and
                                                   Arranger

                                               By  /S/ J.C.C. BYRNE, JR.
                                                   -------------------------
                                                   Title: Attorney-in-fact

<PAGE>

COMMITMENT                                            INITIAL LENDERS

$40,200,000                                    BANK OF AMERICA, N.A.


                                               By  /S/ J. CASEY COSGROVE
                                                   -------------------------
                                                   Title: Vice President

$10,000,000                                    CIBC, INC.


                                               By  /S/ DOMINIC SORRESSO
                                                   -------------------------
                                                   Title: Executive Director

$44,800,000                                                   CITIBANK, N.A.


                                               By  /S/  ROBERT M. SPENCE
                                                   -------------------------
                                                   Title: Managing Director

$10,000,000                                                   BANCA DI ROMA


                                               By  /S/ JAMES B. SIEGER
                                                   -------------------------
                                                   Title: Vice President

                                               By  /S/ ALESSANDRO PAOLI
                                                   -------------------------
                                                   Title:  Assistant Treasurer

$20,000,000                                    DEUTSCHE BANK AG NEW YORK
                                               AND/OR CAYMAN ISLANDS BRANCHES


                                               By  /S/ ALEXANDER KAROW
                                                   -------------------------
                                                   Title: Assistant Vice
                                                          President

                                               By  /S/ SUSAN  L. PEARSON
                                                   -------------------------
                                                   Title: Director

<PAGE>

364-Day Credit Agreement

$25,000,000                                    PNC BANK,
                                               NATIONAL ASSOCIATION


                                               By  /S/ BRENNAN T. DANILE
                                                   -------------------------
                                                   Title: Assistant Vice
                                                           President

$25,000,000                                    MELLON BANK, N.A.


                                               By  /S/ DONALD J. CASSIDY
                                                  -------------------------
                                                   Title: First Vice President

$25,000,000                                    WACHOVIA BANK, N.A.


                                               By  /S/ JAMES BARWIS
                                                   -------------------------
                                                   Title: Vice President

$200,000,000                             Total of the Commitments

<PAGE>

<TABLE>
<CAPTION>

                                   SCHEDULE I

                           APPLICABLE LENDING OFFICES

--------------------------------------- -------------------------------------- -------------------------------------
<S>                                   <C>                                    <C>

Name of Initial Lender                  Domestic Lending Office                Eurodollar Lending Office
--------------------------------------- -------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------- -------------------------------------

BANK OF AMERICA, N.A.                   Bank of America, N.A.                  Bank of America, N.A.
                                        335 Madison Avenue                     335 Madison Avenue
                                        New York, NY 10017                     New York, NY 10017
                                        Attn: Thomas J. Somers                 Attn: Thomas J. Somers
                                        Phone: 212 503-7309                    Phone: 212 503-7309
                                        Fax: 212 503-7771                      Fax: 212 503-7771
--------------------------------------- -------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------- -------------------------------------

CIBC, Inc.                              CIBC, Inc.                             CIBC, Inc.
                                        425 Lexington Avenue                   11 Madison Avenue
                                        New York, NY 10017                     20th Floor
                                        Attn: Dominic Sorresso                 New York, NY 10017
                                        Phone: 212 856-4133                    Attn: Judy Dornkowski
                                        Fax: 212 856-3991                      Phone: 212 856-3509
                                                                               Fax: 212 885-4995
--------------------------------------- -------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------- -------------------------------------

CITIBANK, N.A.                          Citibank, N.A.                         Citibank, N.A.
                                        399 Park Avenue                        399 Park Avenue
                                        New York, NY 10043                     New York, NY 10043
                                        Attn: Robert M. Spence                 Attn: Robert M. Spence
                                        Phone: 212 559-0312                    Phone: 212 559-0312
                                        Fax: 212 793-7450                      Fax: 212 793-7450
--------------------------------------- -------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------- -------------------------------------

DEUTSCHE BANK AG, NEW YORK AND/OR       Deutsche Bank AG, New York and/or      Deutsche Bank AG, New York and/or
CAYMAN ISLANDS BRANCHES                 Cayman Islands Branches                Cayman Islands Branches
                                        31 West 52nd Street                    31 West 52nd Street
                                        New York, NY  10019                    New York, NY  10019
                                        Attn:  Belinda Wheeler                 Attn:  Belinda Wheeler
                                        Phone:  212-474-8372                   Phone:  212-474-8372
                                        Fax:  212-474-8212                     Fax:  212-474-8212
--------------------------------------- -------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------- -------------------------------------

PNC BANK, NATIONAL ASSOCIATION          PNC Bank, National Association         PNC Bank, National Association
                                        1600 Market Street                     1600 Market Street
                                        MS F2 F07021 5                         MS F2 F07021 5
                                        Philadelphia, PA 19103                 Philadelphia, PA 19103
                                        Attn: Robert F, Giarnone               Attn: Robert F, Giarnone
                                        Phone: 215 585-7630                    Phone: 215 585-7630
                                        Fax: 215 585-5972                      Fax: 215 585-5972
--------------------------------------- -------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------- -------------------------------------

MELLON BANK,  N.A.
--------------------------------------- -------------------------------------- -------------------------------------
--------------------------------------- -------------------------------------- -------------------------------------

WACHOVIA BANK, N.A.                     Wachovia Bank, N.A.                    Wachovia Bank, N.A.
                                        191 Peachtree Street                   191 Peachtree Street
                                        Atlanta, GA 30302                      Atlanta, GA 30302
                                        Attn:                                  Attn:
                                        Tel: (404) 332-                        Tel: (404) 332-
                                        Fax: (404) 332-                        Fax: (404) 332-

--------------------------------------- -------------------------------------- -------------------------------------
</TABLE>

<PAGE>

                                        3

                                SCHEDULE 3.01(b)

                              DISCLOSED LITIGATION

                                      NONE

<PAGE>

                                SCHEDULE 4.01(c)

                      REQUIRED AUTHORIZATIONS AND APPROVALS

                                      NONE

<PAGE>

                              EXHIBIT A-1 - FORM OF
                                REVOLVING CREDIT
                                 PROMISSORY NOTE

U.S.$_______________                                    Dated: December 10, 1999


                  FOR VALUE RECEIVED,  the  undersigned,  [NAME OF BORROWER],  a
_________________________  corporation (the "BORROWER"),  HEREBY PROMISES TO PAY
to the order of _________________________  (the "LENDER") for the account of its
Applicable  Lending  Office on the Final  Maturity  Date (each as defined in the
Credit  Agreement  referred to below) the principal sum of  U.S.$[amount  of the
Lender's  Commitment in figures] or, if less, the aggregate  principal amount of
the Revolving  Credit Advances (as defined in the Credit  Agreement  referred to
below) made by the Lender to the  Borrower  pursuant to the Amended and Restated
364-Day  Credit  Agreement  dated as of December  10, 1999 among  Hershey  Foods
Corporation, the Lender and certain other lenders party thereto, Citibank, N.A.,
as  administrative  agent (the  "AGENT") for the Lender and such other  lenders,
Nationsbanc  Montgomery  Securities,  Inc., as co-syndication agent, and Salomon
Smith Barney Inc., as co-syndication  agent and arranger (as amended or modified
from time to time, the "CREDIT AGREEMENT";  the terms defined therein being used
herein as therein defined), outstanding on the Final Maturity Date.

                  The Borrower  promises to pay interest on the unpaid principal
amount of each Revolving  Credit Advance from the date of such Revolving  Credit
Advance until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.

                  Both principal and interest are payable in lawful money of the
United States of America to Citibank,  N.A., as Agent, at the Agent's Account in
same day  funds.  Each  Revolving  Credit  Advance  owing to the  Lender  by the
Borrower pursuant to the Credit  Agreement,  and all payments made on account of
principal  thereof,  shall be recorded by the Lender and,  prior to any transfer
hereof,  endorsed on the grid attached  hereto which is part of this  Promissory
Note.

                  This  Promissory  Note is one of the  Revolving  Credit  Notes
referred to in, and is entitled to the  benefits of, the Credit  Agreement.  The
Credit Agreement,  among other things,  (i) provides for the making of Revolving
Credit  Advances  by the  Lender  to the  Borrower  and  each  other  "Borrower"
thereunder  from time to time in an  aggregate  amount not to exceed at any time
outstanding the U.S. dollar amount first above  mentioned,  the  indebtedness of
the Borrower  resulting from each such Revolving  Credit Advance being evidenced
by this Promissory Note, and (ii) contains provisions in Sections 6.01 and 2.10,
respectively,  for  acceleration  of the maturity  hereof upon the  happening of
certain stated events and also for  prepayments  on account of principal  hereof
prior to the maturity hereof upon the terms and conditions therein specified.

                   The Borrower hereby waives presentment,  demand,  protest and
notice of any kind.  No failure to  exercise,  and no delay in  exercising,  any
rights  hereunder on the part of the holder  hereof shall operate as a waiver of
such rights.

<PAGE>



                  This  promissory  note shall be governed by, and  construed in
accordance with the laws of the State of New York.

                                                        [NAME OF BORROWER]


                                                   By

                                                      -------------------------
                                                      Title:


<PAGE>

<TABLE>
<CAPTION>

                       ADVANCES AND PAYMENTS OF PRINCIPAL

================ ============= ============== ============== ================ ======================= ==========================
<S>               <C>             <C>            <C>           <C>                  <C>                  <C>


                                                               AMOUNT OF
                    AMOUNT                                     PRINCIPAL              UNPAID
                     OF           INTEREST       INTEREST        PAID                PRINCIPAL             NOTATION
     DATE          ADVANCE         RATE          PERIOD       OR PREPAID             BALANCE               MADE BY
---------------- ------------- -------------- -------------- ---------------- ----------------------- --------------------------
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================ ============= ============== ============== ================ ======================= ==========================
</TABLE>

<PAGE>

                              EXHIBIT A-2 - FORM OF
                                 COMPETITIVE BID
                                 PROMISSORY NOTE

U.S.$_______________                                   Dated:  _______________


                  FOR VALUE RECEIVED,  the  undersigned,  [NAME OF BORROWER],  a
_________________________  corporation (the "BORROWER"),  HEREBY PROMISES TO PAY
to the order of _________________________  (the "LENDER") for the account of its
Applicable Lending Office (as defined in the Amended and Restated 364-Day Credit
Agreement  dated as of December 10, 1999 among  Hershey Foods  Corporation,  the
Lender  and  certain   other   lenders  party   thereto,   Citibank,   N.A.,  as
administrative  agent (the  "AGENT")  for the  Lender  and such  other  lenders,
Nationsbanc  Montgomery  Securities,  Inc., as co-syndication agent, and Salomon
Smith Barney Inc., as co-syndication  agent and arranger (as amended or modified
from time to time, the "CREDIT AGREEMENT";  the terms defined therein being used
herein  as  therein  defined)),  on  _______________,  the  principal  amount of
U.S.$__________.

                  The Borrower  promises to pay interest on the unpaid principal
amount hereof from the date hereof until such principal  amount is paid in full,
at the interest rate and payable on the interest  payment date or dates provided
below:

         Interest Rate: _____% per annum (calculated on the basis of a year of
          _____ days for the actual number of days elapsed).

                  Both principal and interest are payable in lawful money of the
United States of America to Citibank,  N.A. for the account of the Lender at the
Agent's Account in same day funds.

                  This  Promissory  Note  is one of the  Competitive  Bid  Notes
referred to in, and is entitled to the  benefits of, the Credit  Agreement.  The
Credit Agreement,  among other things,  contains  provisions in Section 6.01 for
acceleration of the maturity hereof upon the happening of certain stated events.

                  The Borrower hereby waives  presentment,  demand,  protest and
notice of any kind.  No failure to  exercise,  and no delay in  exercising,  any
rights  hereunder on the part of the holder  hereof shall operate as a waiver of
such rights.

<PAGE>

                                        2

                  This  Promissory  Note shall be governed by, and  construed in
accordance with, the laws of the State of New York.

                                                    [NAME OF BORROWER]

                                               By

                                                   -------------------------
                                                    Title:


<PAGE>

                         EXHIBIT B-1 - FORM OF NOTICE OF
                           REVOLVING CREDIT BORROWING

Citibank, N.A., as Agent

  for the Lenders party
  to the Credit Agreement
  referred to below

One Court Square
Seventh Floor

Long Island City, New York 11120                          [Date]

                  Attention:  Bank Loan Syndications

Ladies and Gentlemen:

                  The undersigned, [Name of Borrower], refers to the Amended and
Restated 364-Day Credit Agreement,  dated as of December 10, 1999 (as amended or
modified from time to time, the "CREDIT  AGREEMENT",  the terms defined  therein
being used herein as therein defined), among Hershey Foods Corporation,  certain
Lenders party thereto, Citibank, N.A., as administrative agent (the "AGENT") for
said Lenders,  Nationsbanc Montgomery Securities, Inc., as co-syndication agent,
and Salomon Smith Barney Inc., as co-syndication agent and arranger,  and hereby
gives you notice, irrevocably,  pursuant to Section 2.02 of the Credit Agreement
that the  undersigned  hereby  requests a Revolving  Credit  Borrowing under the
Credit  Agreement,  and in that  connection  sets  forth  below the  information
relating to such Revolving  Credit  Borrowing (the  "PROPOSED  REVOLVING  CREDIT
BORROWING") as required by Section 2.02(a) of the Credit Agreement:

                  (i)  The Business Day of the Proposed Revolving Credit
         Borrowing is _______________.

                  (ii)  The Type of Advances comprising the Proposed Revolving
         Credit Borrowing is [Base Rate Advances] [Eurodollar Rate Advances].

                  (iii)  The aggregate amount of the Proposed Revolving Credit
         Borrowing is $_______________.

                  [(iv) The initial  Interest  Period for each  Eurodollar  Rate
         Advance  made as part of the  Proposed  Revolving  Credit  Borrowing is
         _____ month[s].]

                  The undersigned hereby certifies that the following statements
are  true on the  date  hereof,  and  will be true on the  date of the  Proposed
Revolving Credit Borrowing:


                  (A)  the   representations   and  warranties  of  the  Company
         contained  in  Section  4.01  of  the  Credit  Agreement   (except  the
         representations  set  forth  in the last  sentence  of  subsection  (e)
         thereof  and in  subsection  (f)  thereof  (other  than  clause  (i)(B)
         thereof)  are correct,  before and after giving  effect to the Proposed
         Revolving  Credit  Borrowing  and to the  application  of the  proceeds
<PAGE>

                                            2

         therefrom,  as  though  made  on  and  as of  such  date *[and  the
         representations  and warranties  contained in the Designation Letter of
         the  undersigned  is  correct,  before and after  giving  effect to the
         Proposed  Revolving  Credit  Borrowing  and to the  application  of the
         proceeds therefrom, as though made on and as of such date]; and

                  (B) no event has occurred and is  continuing,  or would result
         from such Proposed  Revolving  Credit Borrowing or from the application
         of the proceeds therefrom, that constitutes a Default.

                                                 Very truly yours,

                                                 [NAME OF BORROWER]


                                               By

                                                 ---------------------------
                                                   Title:
_________________
* This language should be added only if the Borrower is a Designated Subsidiary.
<PAGE>

                         EXHIBIT B-2 - FORM OF NOTICE OF
                            COMPETITIVE BID BORROWING

Citibank, N.A., as Agent

  for the Lenders party
  to the Credit Agreement
  referred to below

One Court Square
Seventh Floor

Long Island City, New York 11120                  [Date]


                  Attention:  Bank Loan Syndications

Ladies and Gentlemen:

                  The undersigned, [Name of Borrower], refers to the Amended and
Restated 364-Day Credit Agreement,  dated as of December 10, 1999 (as amended or
modified from time to time, the "CREDIT  AGREEMENT",  the terms defined  therein
being used herein as therein defined), among Hershey Foods Corporation,  certain
Lenders party thereto, Citibank, N.A., as administrative agent (the "AGENT") for
said Lenders,  Nationsbanc Montgomery Securities, Inc., as co-syndication agent,
and Salomon Smith Barney Inc., as co-syndication agent and arranger,  and hereby
gives you notice, irrevocably,  pursuant to Section 2.03 of the Credit Agreement
that the  undersigned  hereby  requests a Competitive  Bid  Borrowing  under the
Credit  Agreement,  and in that  connection  sets  forth the terms on which such
Competitive  Bid  Borrowing  (the  "PROPOSED   COMPETITIVE  BID  BORROWING")  is
requested to be made:

      (A)      Date of Competitive Bid Borrowing     ________________________

      (B)      Principal Amount

               of Competitive Bid Borrowing          ________________________

      (C)      [Maturity Date] [Interest Period] ** ________________________

      (D)      Interest Rate Basis

               (LIBO Rate or Fixed Rate)             ________________________

      (E)      Interest Payment Date(s)              ________________________

______________________
** Which shall be subject to the definition of "Interest Period" and end on or
   before the Final Maturity Date.

<PAGE>

      (F)      ___________________                   ________________________

      (G)      ___________________                   ________________________


      (H)      ___________________               ________________________

                  The undersigned hereby certifies that the following statements
are  true on the  date  hereof,  and  will be true on the  date of the  Proposed
Competitive Bid Borrowing:

              (a) the representations and warranties of the Company contained in
     Section 4.01 (except the  representations set forth in the last sentence of
     subsection  (e) thereof and in  subsection  (f) thereof  (other than clause
     (i)(B)  thereof))  are  correct,  before  and  after  giving  effect to the
     Proposed  Competitive  Bid Borrowing and to the application of the proceeds
     therefrom,   as   though   made  on  and  as  of  such   date***[and   the
     representations  and warranties  contained in the Designation Letter of the
     undersigned  is correct,  before and after  giving  effect to the  Proposed
     Competitive Bid Borrowing and to the application of the proceeds therefrom,
     as though made on and as of such date];

              (b) no event has occurred and is continuing,  or would result from
     the  Proposed  Competitive  Bid  Borrowing or from the  application  of the
     proceeds therefrom, that constitutes a Default;

              (c) no event has occurred and no  circumstance  exists as a result
     of which the information  concerning the undersigned that has been provided
     to the Agent and each  Lender by the  undersigned  in  connection  with the
     Credit  Agreement  would include an untrue  statement of a material fact or
     omit  to  state  any  material  fact or any  fact  necessary  to  make  the
     statements contained therein, in the light of the circumstances under which
     they were made, not misleading; and

              (d) the aggregate amount of the Proposed Competitive Bid Borrowing
     and all  other  Borrowings  to be made on the same  day  under  the  Credit
     Agreement is within the aggregate  amount of the unused  Commitments of the
     Lenders.

                  The undersigned hereby confirms that the Proposed  Competitive
Bid  Borrowing  is to  be  made  available  to it  in  accordance  with  Section
2.03(a)(v) of the Credit Agreement.

                                                          Very truly yours,

                                                         [NAME OF BORROWER]



                                                 By

                                                    --------------------------
                                                    Title:
________________
***This language should be added only if the Borrower is a Designated Subsidary.

<PAGE>

                               EXHIBIT C - FORM OF
                            ASSIGNMENT AND ACCEPTANCE

                                                  [Date]


                  Reference is made to the Amended and Restated  364-Day  Credit
Agreement  dated as of December  10,  1999 (as amended or modified  from time to
time,  the "CREDIT  AGREEMENT")  among  Hershey  Foods  Corporation,  a Delaware
corporation (the "COMPANY"),  the Lenders (as defined in the Credit  Agreement),
Citibank,   N.A.,  as  administrative  agent  for  the  Lenders  (the  "AGENT"),
Nationsbanc  Montgomery  Securities,  Inc., as co-syndication agent, and Salomon
Smith Barney Inc., as  co-syndication  agent and arranger.  Terms defined in the
Credit Agreement are used herein with the same meaning.

                  The "Assignor"  and the  "Assignee"  referred to on Schedule I
hereto agree as follows:

                  1. The Assignor hereby sells and assigns to the Assignee,  and
the Assignee hereby purchases and assumes from the Assignor,  an interest in and
to the Assignor's  rights and obligations  under the Credit  Agreement as of the
date hereof (other than in respect of Competitive  Bid Advances and  Competitive
Bid Notes) equal to the  percentage  interest  specified on Schedule 1 hereto of
all outstanding rights and obligations under the Credit Agreement (other than in
respect of Competitive  Bid Advances and  Competitive  Bid Notes).  After giving
effect to such sale and assignment,  the Assignee's Commitment and the amount of
the  Revolving  Credit  Advances  owing to the Assignee  will be as set forth on
Schedule 1 hereto.

                  2. The Assignor  (i)  represents  and warrants  that it is the
legal and  beneficial  owner of the interest  being assigned by it hereunder and
that  such  interest  is free and  clear of any  adverse  claim;  (ii)  makes no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in  connection  with the
Credit  Agreement  or  the  execution,   legality,   validity,   enforceability,
genuineness,  sufficiency  or  value  of  the  Credit  Agreement  or  any  other
instrument or document furnished pursuant thereto; (iii) makes no representation
or  warranty  and  assumes  no  responsibility  with  respect  to the  financial
condition of any Borrower or the  performance  or  observance by any Borrower of
any of its  obligations  under the Credit  Agreement or any other  instrument or
document  furnished  pursuant  thereto;  and (iv) attaches each Revolving Credit
Note of a Borrower  held by the Assignor and  requests  that the Agent  exchange
each  Revolving  Credit Note for a new  Revolving  Credit Note of such  Borrower
payable  to the  order of the  Assignee  in an  amount  equal to the  Commitment
assumed by the Assignee  pursuant  hereto or new Revolving  Credit Notes of such
Borrower  payable  to the  order  of the  Assignee  in an  amount  equal  to the
Commitment assumed by the Assignee pursuant hereto and the Assignor in an amount
equal to the  Commitment  retained by the Assignor  under the Credit  Agreement,
respectively, as specified on Schedule 1 hereto.


                  3. The Assignee (i) represents and warrants that it is legally
authorized to enter into this Assignment and  Acceptance;  (ii) confirms that it
<PAGE>

has  received  a copy of the  Credit  Agreement,  together  with  copies  of the
financial  statements  referred to in Section 4.01(e)  thereof,  the most recent
financial  statements  referred  to in Section  5.01(h)  thereof  and such other
documents and  information  as it has deemed  appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (iii) agrees
that it will, independently and without reliance upon the Agent, the Assignor or
any other Lender and based on such  documents and  information  as it shall deem
appropriate at the time,  continue to make its own credit decisions in taking or
not  taking  action  under the Credit  Agreement;  (iv)  confirms  that it is an
Eligible Assignee;  (v) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion  under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably  incidental thereto; (vi) agrees that it
will perform in accordance with their terms all of the  obligations  that by the
terms of the Credit  Agreement  are  required to be performed by it as a Lender;
and (vii)  attaches any U.S.  Internal  Revenue  Service  forms  required  under
Section 2.14 of the Credit Agreement.

         4. Following the execution of this Assignment and  Acceptance,  it will
be delivered to the Agent for  acceptance and recording by the Agent pursuant to
Section 9.07 of the Credit Agreement. The effective date for this Assignment and
Acceptance (the "EFFECTIVE  DATE") shall be the date of acceptance hereof by the
Agent, unless otherwise specified on Schedule 1 hereto.

                  5. Upon such  acceptance and recording by the Agent,  from and
after  the  Effective  Date,  (i) the  Assignee  shall be a party to the  Credit
Agreement and, to the extent provided in this  Assignment and  Acceptance,  have
the rights and  obligations of a Lender  thereunder and (ii) the Assignor shall,
to the extent provided in this Assignment and Acceptance,  relinquish its rights
and be released from its obligations under the Credit Agreement.

                  6. Upon such  acceptance and recording by the Agent,  from and
after the  Effective  Date,  the Agent shall make all payments  under the Credit
Agreement  and the  Revolving  Credit Notes in respect of the interest  assigned
hereby (including,  without limitation, all payments of principal,  interest and
facility fees with respect  thereto) to the Assignee.  The Assignor and Assignee
shall make all  appropriate  adjustments in payments under the Credit  Agreement
and the Revolving  Credit Notes for periods prior to the Effective Date directly
between themselves.

                  7.This Assignment and Acceptance shall be governed by,
and construed in accordance with, the laws of the State of New York.

                  8.This  Assignment  and  Acceptance  may be  executed  in any
number of counterparts and by different parties hereto in separate counterparts,
each of which  when so  executed  shall be deemed to be an  original  and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed  counterpart  of  Schedule  1 to  this  Assignment  and  Acceptance  by
telecopier shall be effective as delivery of a manually executed  counterpart of
this Assignment and Acceptance.
<PAGE>

                  IN WITNESS WHEREOF,  the Assignor and the Assignee have caused
Schedule 1 to this  Assignment  and  Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.

<PAGE>

                                   Schedule 1
                                       to
                            Assignment and Acceptance

Percentage interest assigned:                                      _______%
Assignee's Commitment:                                             $__________

Aggregate  outstanding principal amount of Revolving Credit Advances $__________
assigned:

Principal amount of Revolving Credit Note payable to Assignee:      $__________

Principal amount of Revolving Credit Note payable to Assignor:      $__________

Effective Date ****:        _______________

                                             [NAME OF ASSIGNOR], as Assignor

                                                      By
                                                         Title:

                                                      Dated:  _______________


                                             [NAME OF ASSIGNEE], as Assignee

                                                      By
                                                         Title:

                                                      Dated:  _______________

                                                      Domestic Lending Office:
                                                               [Address]

                                                      Eurodollar Lending Office:
                                                               [Address]
________________
**** This date should be no earlier than five Business Days after the delivery
     of this Assignment and Acceptance to the Agent.

<PAGE>

                                        2

Accepted and Approved this
__________ day of _______________

CITIBANK, N.A., as Agent

By
   Title:

Approved this __________ day
of _______________

HERSHEY FOODS CORPORATION

By
   Title:

<PAGE>

                               EXHIBIT D - FORM OF
                              ASSUMPTION AGREEMENT

                                                               Dated: ________
Hershey Foods Corporation
Corporate Headquarters

Hershey, Pennsylvania  17033-0810

Attention:  Treasury Department

Citibank, N. A.
   as Agent
One Court Square
Seventh Floor

Long Island City, New York 11120

Attention:  Bank Loan Syndications

Ladies and Gentlemen:

                  Reference is made to the Amended and Restated  364-Day  Credit
Agreement,  dated as of December  10, 1999 (as amended or modified  from time to
time,  the "CREDIT  AGREEMENT"),  among  Hershey Foods  Corporation,  a Delaware
corporation  (the "COMPANY"),  the Lenders (as defined in the Credit  Agreement)
party thereto,  Citibank,  N.A., as  administrative  agent for such Lenders (the
"AGENT"),  Nationsbanc Montgomery Securities, Inc., as co-syndication agent, and
Salomon Smith Barney Inc., as co-syndication  agent and arranger.  Terms defined
in the Credit Agreement are used herein with the same meaning.

                  The undersigned (the "ASSUMING  LENDER") proposes to become an
Assuming Lender pursuant to Section 2.05(c) of the Credit Agreement and, in that
connection,  hereby  agrees  that it shall  become a Lender for  purposes of the
Credit  Agreement  on  [applicable   Commitment  Increase  Date]  and  that  its
Commitment shall as of such date be $__________.


                  The  undersigned  (i) confirms  that it has received a copy of
the Credit Agreement,  together with copies of the financial statements referred
to in Section 4.01(e) thereof,  the most recent financial statements referred to
in Section  5.01(h)  thereof and such other  documents and information as it has
deemed  appropriate  to make its own credit  analysis and decision to enter into
this Assumption Agreement;  (ii) agrees that it will,  independently and without
reliance  upon the Agent or any other  Lender  and based on such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions  in taking or not taking  action  under the Credit  Agreement;
(iii)  appoints  and  authorizes  the Agent to take such  action as agent on its
behalf and to exercise  such powers under the Credit  Agreement as are delegated
<PAGE>

to the Agent by the terms  thereof,  together with such powers as are reasonably
incidental  thereto;  (iv) agrees that it will perform in accordance  with their
terms all of the  obligations  which by the terms of the  Credit  Agreement  are
required to be performed by it as a Lender;  (v) confirms that it is an Eligible
Assignee;  (vi)  specifies as its  Applicable  Lending  Offices (and address for
notices) the offices set forth beneath its name on the  signature  pages hereof;
and (vii) attaches the forms  prescribed by the Internal  Revenue Service of the
United States required under Section 2.14 of the Credit Agreement.

                  The  effective  date for this  Assumption  Agreement  shall be
[applicable   Commitment  Increase  Date.]  Upon  delivery  of  this  Assumption
Agreement  to the  Company and the Agent,  and  satisfaction  of all  conditions
imposed under Section  2.05(c) as of [date  specified  above],  the  undersigned
shall be a party to the  Credit  Agreement  and shall have all of the rights and
obligations of a Lender  thereunder.  As of [date  specified  above],  the Agent
shall make all  payments  under the Credit  Agreement in respect of the interest
assigned  hereby  (including,  without  limitation,  all payments of  principal,
interest and facility fees) to the Assuming Lender.

                  This Assumption  Agreement may be executed in counterparts and
by  different  parties  hereto in separate  counterparts,  each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same  agreement.  Delivery of an executed  counterpart by
telecopier shall be effective as delivery of a manually executed  counterpart of
this Assumption Agreement.

                  This Assumption  Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.

                                                Very truly yours,

                                                [NAME OF ASSUMING LENDER]

                                                By________________________
                                                    Name:
                                                    Title:

                                                Domestic   Lending  Office  (and
                                                address for notices):

                                                [Address]

                                                Eurodollar Lending Office

                                                [Address]


<PAGE>

Acknowledged and Agreed to:

HERSHEY FOODS CORPORATION


By______________________
    Name:
    Title:


CITIBANK, N.A.,
As Agent

By______________________
    Name:
    Title:




<PAGE>

                     EXHIBIT E-1 -FORM OF EXTENSION REQUEST

                                                              [Date]


To the Lenders party to the
     Credit Agreement referred
     to below

                  Re:      Request for Extension of Termination Date

Ladies and Gentlemen:

                  Pursuant to that certain  Amended and Restated  364-Day Credit
Agreement,  dated as of December  10, 1999 (as amended or modified  from time to
time, the "CREDIT  AGREEMENT,"  terms defined therein and not otherwise  defined
herein being used herein as defined therein), among Hershey Foods Corporation, a
Delaware  corporation  (the  "COMPANY"),  the  Lenders (as defined in the Credit
Agreement)  party  thereto,  Citibank,  N.A.,  as  administrative  agent for the
Lenders   (the   "AGENT"),   Nationsbanc   Montgomery   Securities,   Inc.,   as
co-syndication agent, and Salomon Smith Barney Inc., as co-syndication agent and
arranger,  the Company hereby requests that the Termination Date be extended for
a period of 364 days from the  Termination  Date now in effect,  as  provided in
Section 2.18(a) of the Credit Agreement.

                  The Company hereby certifies that the following statements are
true on the date hereof, and will be true on the Termination Date now in effect:

                  (1)  the   representations   and  warranties  of  the  Company
         contained in Section 4.01 (except the  representations set forth in the
         last sentence of subsection  (e) thereof and in subsection  (f) thereof
         (other  than  clause  (i)(B)  thereof))  are  correct  in all  material
         respects on and as of such  Termination  Date,  before and after giving
         effect to the  requested  extension,  as though  made on and as of such
         date;

                  (2)  no event has occurred and is continuing, or would result
         from the requested extension that constitutes a Default; and

                  This  notice is  subject in all  respects  to the terms of the
Credit Agreement,  is irrevocable and shall be effective only if received by the
Agent no later than [______________].*
____________
1  This date shall be no later than 30 days prior to the Termination Date then
   in effect.

<PAGE>

                                                       HERSHEY FOODS CORPORATION


                                                  By

                                                    ----------------------------
                                                      Title

<PAGE>

                    EXHIBIT E-2 - FORM OF NOTICE OF EXTENSION
                               OF TERMINATION DATE

                                                            [Date]


Citibank, N.A.,
    as Agent

One Court Square
Long Island City, New York  11120

                  Attention:        Bank Loan Syndications

                            HERSHEY FOODS CORPORATION

Ladies and Gentlemen:

                Reference  is made to the Amended and  Restated  364-Day  Credit
Agreement  dated as of December  10,  1999 (as amended or modified  from time to
time,  the "CREDIT  AGREEMENT")  among  Hershey  Foods  Corporation,  a Delaware
corporation,  the Lenders (as defined in the Credit Agreement),  Citibank, N.A.,
as administrative  agent for the Lenders (the "AGENT"),  Nationsbanc  Montgomery
Securities,  Inc., as  co-syndication  agent,  and Salomon Smith Barney Inc., as
co-syndication  agent and arranger.  Terms  defined in the Credit  Agreement are
used herein with the same meaning unless otherwise defined herein.

                Pursuant to Section 2.18(a) of the Credit Agreement,  the Lender
named below hereby notifies the Agent as follows:

                [The Lender named below desires to extend the  Termination  Date
                with respect to its Commitment for a period of 364 days.]

                [The Lender named below desires to extend the  Termination  Date
                with  respect  to its  Commitment  for a period  of 364 days and
                offers to increase its Commitment to a maximum  aggregate amount
                of

                $----------.]

                [The   Lender   named  below  does  NOT  desire  to  extend  the
                Termination  Date with  respect to any of its  Commitment  for a
                period of 364 days.]

<PAGE>



                This  notice  is  subject  in all  respects  to the terms of the
Credit Agreement,  is irrevocable and shall be effective only if received by the
Agent no later than [______________].**


                                                     Very truly yours,

                                                     [NAME OF LENDER]



                                       By:_____________________________
                                              Name:
                                              Title:



______________________
2  This date shall be no later than 25 days prior to the Termination Date then
   in effect.

<PAGE>

                               EXHIBIT F - FORM OF
                               DESIGNATION LETTER

                                                     [DATE]

To Citibank, N.A.,
  as Agent for the Lenders
  party to the Credit Agreement
  referred to below

Ladies and Gentlemen:

                  Reference is made to the Amended and Restated  364-Day  Credit
Agreement  dated as of December 10, 1999 among  Hershey Foods  Corporation  (the
"COMPANY"),  the Lenders named therein,  Citibank, N.A., as administrative agent
(the"AGENT")  for said  Lenders,  Nationsbanc  Montgomery  Securities,  Inc., as
co-syndication agent, and Salomon Smith Barney Inc., as co-syndication agent and
arranger (the "CREDIT  AGREEMENT").  For  convenience  of reference,  terms used
herein and defined in the Credit  Agreement  shall have the respective  meanings
ascribed to such terms in the Credit Agreement.

                  Please be  advised  that the  Company  hereby  designates  its
undersigned  Subsidiary,   ____________  (the  "DESIGNATED  SUBSIDIARY"),  as  a
"Designated Subsidiary" under and for all purposes of the Credit Agreement.

                  The Designated  Subsidiary,  in consideration of each Lender's
agreement to extend credit to it under and on the terms and conditions set forth
in the Credit Agreement, does hereby assume each of the obligations imposed upon
a "Designated Subsidiary" and a "Borrower" under the Credit Agreement and agrees
to be bound by the terms and conditions of the Credit Agreement.  In furtherance
of the foregoing,  the Designated  Subsidiary  hereby represents and warrants to
each Lenders as follows:

                  1.  The   Designated   Subsidiary   is  a   corporation   duly
         incorporated,  validly  existing and in good standing under the laws of
         __________________  and is duly  qualified to transact  business in all
         jurisdictions in which such qualification is required.

                  2. The execution,  delivery and  performance by the Designated
         Subsidiary of this  Designation  Letter,  the Credit  Agreement and the
         Notes  of  such  Designated  Subsidiary,  and the  consummation  of the
         transactions   contemplated   thereby,   are  within   the   Designated
         Subsidiary's  corporate  powers,  have  been  duly  authorized  by  all
         necessary  corporate action, and do not and will not contravene (i) the
         charter  or  by-laws of the  Designated  Subsidiary  or (ii) law or any
         contractual   restriction   binding  on  or  affecting  the  Designated
         Subsidiary.

                  3.  This  Designation  Agreement  and each of the Notes of the
         Designated Subsidiary, when delivered, will have been duly executed and
<PAGE>

         delivered,  and this Designation  Letter, the Credit Agreement and each
         of the  Notes  of  the  Designated  Subsidiary,  when  delivered,  will
         constitute the legal,  valid and binding  obligations of the Designated
         Subsidiary  enforceable against the Designated Subsidiary in accordance
         with their  respective terms except to the extent that such enforcement
         may be limited by applicable  bankruptcy,  insolvency and other similar
         laws affecting creditors' rights generally.

                  4.   There  is  no  pending  or   threatened   action,   suit,
         investigation,  litigation or proceeding including, without limitation,
         any Environmental Action, affecting the Designated Subsidiary or any of
         its Subsidiaries  before any court,  governmental  agency or arbitrator
         that (i) could be reasonably  likely to have a Material Adverse Effect,
         or (ii) purports to effect the legality,  validity or enforceability of
         this  Designation  Letter,  the  Credit  Agreement,  any  Note  of  the
         Designated   Subsidiary  or  the   consummation  of  the   transactions
         contemplated thereby.

                  5. No  authorization  or approval  or other  action by, and no
         notice to or filing with, any governmental  authority or administrative
         or regulatory  body or any other third party are required in connection
         with  the   execution,   delivery  or  performance  by  the  Designated
         Subsidiary  of this  Designation  Letter,  the Credit  Agreement or the
         Notes of the  Designated  Subsidiary  except  for such  authorizations,
         consents,  approvals,   licenses,  filings  or  registrations  as  have
         heretofore  been made,  obtained or effected  and are in full force and
         effect.

                  6. The Designated Subsidiary is not, and immediately after the
         application  by the  Designated  Subsidiary  of the  proceeds  of  each
         Advance will not be, an "investment company", or an "affiliated person"
         of, or  "promotor"  or  "principal  underwriter"  for,  an  "investment
         company",  as such terms are defined in the  Investment  Company Act of
         1940, as amended.

                                                          Very truly yours,
                                                        HERSHEY FOODS COMPANY

                                                   By_________________________
                                                      Title:


<PAGE>

                                                    [THE DESIGNATED SUBSIDIARY]


                                                    By__________________________
                                                       Title:


<PAGE>

                               EXHIBIT G - FORM OF
                           ACCEPTANCE BY PROCESS AGENT

                          [Letterhead of Process Agent]

                                                      [Date]


To each of the Lenders party
to the Credit Agreement (as defined
below) and to Citibank, N.A.,
as Agent for said Lenders


                         [NAME OF DESIGNATED SUBSIDIARY]

Ladies and Gentlemen:

                  Reference  is made to (i) that  certain  Amended and  Restated
364-Day  Credit  Agreement,  dated as of December 10, 1999,  among Hershey Foods
Corporation  (the  "COMPANY"),  the Lenders named  therein,  Citibank,  N.A., as
administrative  agent (the  "AGENT") for said  Lenders,  Nationsbanc  Montgomery
Securities,  Inc., as  co-syndication  agent,  and Salomon Smith Barney Inc., as
co-syndication  agent  and  arranger  (as  hereafter  amended,  supplemented  or
otherwise modified from time to time, the "CREDIT AGREEMENT";  the terms defined
therein  being used  herein as  therein  defined),  and (ii) to the  Designation
Letter,  dated  _________,  pursuant to which  __________  has become a Borrower
under the Credit Agreement.

                  Pursuant   to  Section   9.12(a)  of  the  Credit   Agreement,
__________  has  appointed  the  Company  (with an office on the date  hereof at
Corporate Headquarters,  100 Crystal A Drive, Hershey,  Pennsylvania 17033-0810,
United States) as Process Agent to receive on behalf of  ______________  service
of copies of the summons and complaint and any other process which may be served
in any action or proceeding in any New York State or Federal court of the United
States of America  sitting in New York City  arising  out of or  relating to the
Credit Agreement.

                  The Company hereby  accepts such  appointment as Process Agent
and  agrees  with each of you that (i) the  undersigned  will not  terminate  or
abandon  the  undersigned  agency as such  Process  Agent  without  at least six
months' prior notice to the Agent (and hereby  acknowledges that the undersigned
has been retained for its services as Process Agent  through  __________),  (ii)
the  undersigned  will maintain an office in the United States through such date
and  will  give  the  Agent  prompt  notice  of any  change  of  address  of the
undersigned,  (iii) the undersigned  will perform its duties as Process Agent to
receive  on behalf of  ______________  service  of  copies  of the  summons  and
complaint  and any other process which may be served in any action or proceeding
<PAGE>

in any New York State or Federal court of the United  States of America  sitting
in New York City arising out of or relating to the Credit Agreement and (iv) the
undersigned  will  forward   forthwith  to  ______________  at  its  address  at
________________  or, if  different,  its then  current  address,  copies of any
summons,   complaint  and  other  process  which  the  undersigned  receives  in
connection with its appointment as Process Agent.

                  This  acceptance  and  agreement  shall  be  binding  upon the
undersigned and all successors of the undersigned.

                                               Very truly yours,

                                               [PROCESS AGENT]

                                              By_______________________




<PAGE>

                               EXHIBIT H - FORM OF
                          OPINION OF ROBERT M. REESE,
                    SENIOR VICE PRESIDENT AND GENERAL COUNSEL
                                 OF THE COMPANY

                                                              [Effective Date]



To each of the Lenders party
  to the Credit Agreement referred

  to below and to Citibank, N.A., as
  Agent for such Lenders

                            HERSHEY FOODS CORPORATION

Ladies and Gentlemen:

                  This   opinion  is   furnished  to  you  pursuant  to  Section
3.01(g)(iv) of the Amended and Restated  364-Day Credit  Agreement,  dated as of
December 10, 1999 (the "CREDIT AGREEMENT"), among Hershey Foods Corporation (the
"COMPANY"),  the Lenders party thereto,  Citibank, N.A., as administrative agent
(the  "AGENT") for said Lenders,  Nationsbanc  Montgomery  Securities,  Inc., as
co-syndication agent, and Salomon Smith Barney Inc., as co-syndication agent and
arranger.  Terms  defined in the  Credit  Agreement  are used  herein as therein
defined.

                  I am the Senior  Vice  President  and  General  Counsel of the
Company,  and I have acted as counsel  for the  Company in  connection  with the
preparation, execution and delivery of the Credit Agreement.

                  In that connection, I have examined:

                  (1)   the Credit Agreement and the Revolving Credit Notes
             of the Company;

                  (2)   the documents furnished by the Company pursuant to
             Article III of the Credit Agreement;

                  (3)   the Amended and Restated Certificate of Incorporation of
             the Company and all amendments thereto (the "CHARTER"); and


                  (4)   The by-laws of the Company and all amendments thereto
            (the "BY-LAWS").
<PAGE>



                  I have also examined the originals,  or copies certified to my
satisfaction,  of such other corporate  records of the Company,  certificates of
public officials and of officers of the Company, and agreements, instruments and
other  documents,  as I have  deemed  necessary  as a  basis  for  the  opinions
expressed below. In making such examinations,  I have assumed the genuineness of
all signatures (other than those on behalf of the Company),  the authenticity of
all  documents  submitted to me as  originals  and the  conformity  to authentic
original documents of all documents  submitted to me as certified,  conformed or
photographic  copies. As to questions of fact material to such opinions, I have,
when  relevant  facts were not  independently  established  by me,  relied  upon
certificates  of the Company or its  officers or of public  officials  and as to
questions of fact and law, on opinions or statements by other lawyers  reporting
to  me.  I  have  assumed  the  due  execution  and  delivery,  pursuant  to due
authorization, of the Credit Agreement by the Initial Lenders and the Agent.

                  My  opinions  expressed  below are  limited  to the law of the
Commonwealth of Pennsylvania, and, where applicable, the General Corporation Law
of the State of Delaware and the Federal law of the United States.

                  Based upon the foregoing and upon such investigation as I have
deemed necessary, I am of the following opinion:

                  1.  The  Company  is a  corporation  duly  organized,  validly
         existing and in good standing under the laws of the State of Delaware.

                  2. The execution,  delivery and  performance by the Company of
         the  Credit  Agreement  and  the  Notes,  and the  consummation  of the
         transactions  contemplated  thereby, are within the Company's corporate
         powers,  have been duly authorized by all necessary  corporate  action,
         and do not  contravene  (i) the Charter or the By-laws or (ii) any law,
         rule  or  regulation  applicable  to the  Company  (including,  without
         limitation,  Regulation  X of the  Board of  Governors  of the  Federal
         Reserve System) or (iii) any contractual or legal  restriction  binding
         on or affecting the Company or, to the best of my knowledge,  contained
         in any other similar document,  except where such  contravention  would
         not be reasonably likely to have a Material Adverse Effect.  The Credit
         Agreement and the Revolving  Credit Notes of the Company have been duly
         executed and delivered on behalf of the Company.

                  3. No  authorization,  approval  or other  action  by,  and no
         notice to or filing with, any governmental authority or regulatory body
         or any other third party is required  for the due  execution,  delivery
         and  performance by the Company of the Credit  Agreement and the Notes,
         or for  the  consummation  of the  transactions  contemplated  thereby,
         except for the authorizations,  approvals, actions, notices and filings
         (i) listed on Schedule  4.01(c) to the Credit  Agreement,  all of which
         have been duly obtained, taken, given or made and are in full force and
         effect and (ii) where the  Company's  failure to receive,  take or make
         such authorization, approval, action, notice or filing would not have a
         Material Adverse Effect.

<PAGE>

                  4. There (i) are no pending  or, to the best of my  knowledge,
         threatened actions, investigations,  litigations or proceedings against
         the Company or any of its Subsidiaries  before any court,  governmental
         agency  or  arbitrator  that (a) would be  reasonably  likely to have a
         Material  Adverse  Effect (other than the Disclosed  Litigation) or (b)
         purport  to  affect  the   legality,   validity,   binding   effect  or
         enforceability  of the  Credit  Agreement  or any of the  Notes  or the
         consummation of the transactions  contemplated  thereby, and (ii) there
         has been no adverse  change in the status,  or financial  effect on the
         Company  and  its  Subsidiaries  taken  as a  whole,  of the  Disclosed
         Litigation from that described on Schedule 3.01(b) thereto.

                  This  opinion  letter  may  be  relied  upon  by you  only  in
connection  with  the  transaction  being  consummated  pursuant  to the  Credit
Agreement  and may not be used or relied upon by any other  person for any other
purpose.

                                                Very truly yours,


<PAGE>

                          EXHIBIT H-2 - FORM OF OPINION
                         OF SIMPSON, THACHER & BARTLETT,
                            SPECIAL NEW YORK COUNSEL

                                 TO THE COMPANY

                   [Letterhead of Simpson, Thacher & Bartlett]

To each of the Lenders listed on
         Schedule I hereto and to Citibank,
         N.A., as Agent for such Lenders

Ladies and Gentlemen:

                  We have acted as  special  New York  counsel to Hershey  Foods
Corporation  (the "COMPANY") in connection with the  preparation,  execution and
delivery of the Amended  and  Restated  364-Day  Credit  Agreement,  dated as of
December 10, 1999 (the "CREDIT AGREEMENT"), among the Company, the Lenders party
thereto, Citibank, N.A., as administrative agent (the "AGENT") for said Lenders,
and Nationsbanc  Montgomery  Securities,  Inc. and Salomon Smith Barney Inc., as
co-syndication agents.

                  This opinion is being delivered pursuant to Section 3.01(g)(v)
of the Five-Year Credit Agreement. Terms defined in the Credit Agreement and not
otherwise defined herein are used herein as therein defined.

                  In connection with this opinion, we have examined originals or
copies,  certified or otherwise  identified to our  satisfaction,  of the Credit
Agreement  and the  Revolving  Credit  Notes and the opinion of Robert M. Reese,
Vice President and General  Counsel of the Company (the "COMPANY  OPINION").  In
addition,  we  have  examined  originals  or  copies,   certified  or  otherwise
identified  to our  satisfaction,  of such  corporate  records  of the  Company,
certificates of public  officials and of officers of the Company and agreements,
instruments and other documents, and have made such other investigations,  as we
have deemed  relevant and necessary as a basis for the opinions  hereinafter set
forth.

                  For  the  purposes   hereof,   we  have  assumed,   with  your
permission,  the  genuineness of all  signatures,  the legal capacity of natural
persons and the authenticity and regularity of all documents  examined by us. As
to questions of fact relevant to this opinion,  we have relied upon,  and assume
the  accuracy  of,  certificates  and  oral  or  written  statements  and  other
information  of the  Company  or of its  officers  or of  public  officials  and
representations  and warranties of the Company set forth in the Credit Agreement
and assume  compliance on the part of all parties to the Credit  Agreement  with
their  covenants  and  agreements  contained  therein.  We have  assumed the due
execution and delivery, pursuant to due authorization,  of each of the documents
referred to above by all parties thereto.
<PAGE>


                  Based on and  subject  to the  foregoing,  and  subject to the
qualifications and exceptions set forth herein, we are of the opinion that:


                  1. The execution,  delivery and  performance by the Company of
the  Credit  Agreement  and  the  Notes,  and  the  borrowings  by  the  Company
thereunder,  do not  violate  any  present  Federal  or New  York  law,  rule or
regulation  known by us to be  applicable  to the  Company  (including,  without
limitation,  Regulation  X of the  Board of  Governors  of the  Federal  Reserve
System).

                  2. No  authorization,  approval  or other  action  by,  and no
notice to or filing with, any governmental authority or regulatory body pursuant
to  any  present  Federal  or  New  York  law or  regulation  known  by us to be
applicable  to the  Company is  required  for the due  execution,  delivery  and
performance  by the Company of the Credit  Agreement  and the Notes,  or for the
borrowings of the Company thereunder.

                  3. The Credit  Agreement and the Revolving  Credit Notes dated
and  delivered as of the date hereof are, and the other Notes when  executed and
delivered  under  the  Credit  Agreement  will  be,  legal,  valid  and  binding
obligations of the Company  enforceable  against the Company in accordance  with
their respective terms.

                  Our opinions set forth in paragraph 3 above are subject to the
effects of  bankruptcy,  insolvency  (including,  without  limitation,  all laws
relating to fraudulent  transfers),  reorganization,  moratorium or similar laws
relating to or affecting  creditors' rights generally and general  principles of
equity  (whether  considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.

                  With your permission, we do not express any opinion as to:

                  (a) the effect of the law of any  jurisdiction  other than the
         State  of New  York  wherein  any  Lender  may be  located  or  wherein
         enforcement  of the Credit  Agreement  or the Notes may be sought  that
         limits the rates of interest legally chargeable or enforceable.

                  (b) any  indemnification  obligations of the Company under the
         Credit Agreement to the extent such  obligations  might be deemed to be
         inconsistent with public policy.

                  (c) any  provision of the Credit  Agreement  that  purports to
        establish an evidentiary  standard for  determinations by the Lenders or
        the Agent.

                  We are  members of the Bar of the State of New York and do not
purport to be experts on, or to express any opinions herein concerning,  any law
other  than the laws of the State of New York,  the  federal  laws of the United
States of America and the General  Corporation Law of the State of Delaware.  To
the extent that our opinions expressed herein involve  conclusions as to matters
set  forth  in  the  Company  Opinion,   we  have  assumed  without  independent
investigation  the correctness of the matters set forth in the Company  Opinion,
<PAGE>

our opinions being subject to the  assumptions,  qualifications  and limitations
set forth in the Company Opinion with respect thereto.

                 This  opinion is  rendered  only to you and is solely for your
benefit in connection  with the execution and delivery of the Credit  Agreement.
This opinion may not be relied upon by you for any other purpose, or relied upon
by or furnished  to any other  person,  firm,  or  corporation  for any purpose,
without our prior written  consent,  except that a copy may be furnished to, but
not relied upon by, an Eligible  Assignee which is a prospective  assignee under
the Credit Agreement.

                                              Very truly yours,



<PAGE>

                     EXHIBIT I - FORM OF OPINION OF COUNSEL
                           TO A DESIGNATED SUBSIDIARY

[Date]


To each of the Lenders party
     to the Credit Agreement
     referred to below,
     and to Citibank, N.A., as Agent
     for said Lenders


Ladies and Gentlemen:

                 In my capacity as counsel to _____________________ ("DESIGNATED
SUBSIDIARY"),  I have reviewed that certain Amended and Restated  364-Day Credit
Agreement, dated as of December 10, 1999 (the "CREDIT AGREEMENT"), among Hershey
Foods Corporation (the "COMPANY"), the Lenders party thereto, Citibank, N.A., as
administrative  agent (the  "AGENT") for said  Lenders,  Nationsbanc  Montgomery
Securities,  Inc., as  co-syndication  agent,  and Salomon Smith Barney Inc., as
co-syndication  agent and arranger.  Terms  defined in the Credit  Agreement are
used herein as therein defined.  In connection  therewith,  I have also examined
the following documents:

                  (i)    The Designation Letter (as defined in the Credit
         Agreement) executed by the Designated Subsidiary.

                  [such other documents as counsel may wish to refer to]


                  I have also  reviewed  such  matters of law and  examined  the
original,  certified,  conformed or photographic copies of such other documents,
records, agreements and certificates as I have considered relevant hereto. As to
questions of fact material to such opinions,  we have,  when relevant facts were
not independently  established by us, relied upon certificates of the Designated
Subsidiary or of its officers or of public officials and as to questions of fact
and law, on opinions or  statements  by other  lawyers  reporting  to me. I have
assumed (i) the due execution and delivery,  pursuant to due  authorization,  of
each of the  documents  referred to above by all parties  thereto other than the
Designated Subsidiary,  (ii) the authenticity of all such documents submitted to
us as originals  and (iii) the  conformity  to  originals of all such  documents
submitted to me as certified, conformed or photographic copies.

                  My opinions  expressed  below are limited to  ________________
and the State of New York.

<PAGE>

                  Based upon the  foregoing,  and upon such  investigation  as I
have deemed necessary, I am of the following opinion:

                  1.  The  Designated  Subsidiary  (a)  is  a  corporation  duly
         incorporated,  validly  existing and in good standing under the laws of
         _________________________,   (b)  is  duly   qualified  in  each  other
         jurisdiction  in  which it owns or  leases  property  or in  which  the
         conduct of its  business  requires it to so qualify or be licensed  and
         (c) has all requisite corporate power and authority to own or lease and
         operate its  properties  and to carry on its business as now  conducted
         and as proposed to be conducted.

                  2. The execution,  delivery and  performance by the Designated
         Subsidiary  of its  Designation  Letter,  the Credit  Agreement and its
         Revolving  Credit  Notes,  and  the  consummation  of the  transactions
         contemplated thereby, are within the Designated  Subsidiary's corporate
         powers,  have been duly authorized by all necessary  corporate  action,
         and do not  contravene  (i) any  provision of the charter or by-laws or
         other constituent documents of the Designated Subsidiary, (ii) any law,
         rule or regulation applicable to the Designated Subsidiary or (iii) any
         contractual or legal obligation or restriction  binding on or affecting
         the Designated Subsidiary, except where such contravention would not be
         reasonably  likely to have a Material  Adverse Effect.  The Designation
         Letter and each Revolving Credit Note of the Designated  Subsidiary has
         been  duly  executed  and   delivered  on  behalf  of  the   Designated
         Subsidiary.

                  3. The Designation  Letter of the Designated  Subsidiary,  the
         Credit  Agreement  and the  Revolving  Credit  Notes of the  Designated
         Subsidiary  are, and each other Note of the Designated  Subsidiary when
         executed and delivered under the Credit Agreement will be, legal, valid
         and binding  obligations  of the Designated  Subsidiary  enforceable in
         accordance with their respective  terms,  except as the  enforceability
         thereof may be limited by  bankruptcy,  insolvency,  reorganization  or
         moratorium  or  other  similar  laws  relating  to the  enforcement  of
         creditors' rights generally or by the application of general principles
         of equity (regardless of whether such enforceability is considered in a
         proceeding  in equity or at law),  and except that I express no opinion
         as to (i) the subject matter jurisdiction of the District Courts of the
         United States of America to adjudicate any controversy  relating to the
         Credit Agreement,  the Designation Letter of the Designated  Subsidiary
         or the Notes of the Designated Subsidiary or (ii) the effect of the law
         of any  jurisdiction  (other  than the State of New York)  wherein  any
         Lender  or  Applicable   Lending  Office  may  be  located  or  wherein
         enforcement  of the Credit  Agreement,  the  Designation  Letter of the
         Designated  Subsidiary or the Notes of the Designated Subsidiary may be
         sought which limits rates of interest which may be charged or collected
         by such Lender.

                  4.  There  is no  pending,  or to the  best  of my  knowledge,
         threatened action, investigation, litigation or proceeding at law or in
         equity against the Designated Subsidiary before any court, governmental
         agency or arbitrator that would be reasonably likely to have a Material
         Adverse  Effect or that  purports  to affect  the  legality,  validity,
         binding  effect  or  enforceability  of the  Designation  Letter of the
         Designated  Subsidiary,  the Credit  Agreement or any Revolving  Credit
<PAGE>

         Note  of  the  Designated  Subsidiary,   or  the  consummation  of  the
         transactions contemplated thereby.

                  5.  No  authorization, approval  or other  action  by,  and no
         notice to or filing with, any governmental authority or regulatory body
         or any other third party is required  for the due  execution,  delivery
         and performance by the Designated Subsidiary of its Designation Letter,
         the Credit Agreement or the Notes of the Designated  Subsidiary  except
         for such  authorizations,  consents,  approvals,  actions,  notices  or
         filings as have heretofore  been made,  obtained or affected and are in
         full force and effect.

                  This  opinion  letter  may  be  relied  upon  by you  only  in
connection  with  the  transaction  being  consummated  pursuant  to the  Credit
Agreement  and may not be used or relied upon by any other  person for any other
purpose.

                                             Very truly yours,





<PAGE>

                                                                   DRAFT 12/8/99

                                U.S. $200,000,000

                              AMENDED AND RESTATED
                            364-DAY CREDIT AGREEMENT

                          Dated as of December 10, 1999

                                      Among

                           HERSHEY FOODS CORPORATION,

                                  AS BORROWER,
                                  ------------

                                       and

                        THE INITIAL LENDERS NAMED HEREIN,

                               AS INITIAL LENDERS,
                               -------------------

                                       and

                                 CITIBANK, N.A.,

                            AS ADMINISTRATIVE AGENT,
                            ------------------------

                                       and

                           BANC AMERICA SECURITIES LLC

                             AS CO-SYNDICATION AGENT
                             -----------------------

                                       and

                           SALOMON SMITH BARNEY INC.,

                      AS CO-SYNDICATION AGENT AND ARRANGER
                      ------------------------------------

<PAGE>

                                                                          PAGE

                            TABLE OF CONTENTS

                                ARTICLE I

                    DEFINITIONS AND ACCOUNTING TERMS

     SECTION 1.01.  Certain Defined Terms...................................  1
     SECTION 1.02.  Computation of Time Periods............................. 12
     SECTION 1.03.  Accounting Terms........................................ 12

                               ARTICLE II

                    AMOUNTS AND TERMS OF THE ADVANCES

     SECTION 2.01.  The Revolving Credit Advances........................... 12
     SECTION 2.02.  Making the Revolving Credit Advances.................... 13
     SECTION 2.03.  The Competitive Bid Advances............................ 14
     SECTION 2.04.  Fees.................................................... 19
     SECTION 2.05.  Termination, Reduction or Increase of the Commitments... 19
     SECTION 2.06.  Repayment of Revolving Credit Advances.................. 22
     SECTION 2.07.  Interest on Revolving Credit Advances................... 23
     SECTION 2.08.  Interest Rate Determination............................. 24
     SECTION 2.09.  Optional Conversion of Revolving Credit Advances........ 25
     SECTION 2.10.  Optional Prepayments of Revolving Credit Advances....... 25
     SECTION 2.11.  Increased Costs......................................... 26
     SECTION 2.12.  Illegality.............................................. 27
     SECTION 2.13.  Payments and Computations............................... 27
     SECTION 2.14.  Taxes................................................... 28
     SECTION 2.15.  Sharing of Payments, Etc................................ 31
     SECTION 2.16.  Use of Proceeds......................................... 31
     SECTION 2.17.  Mandatory Assignment by a Lender; Mitigation............ 31
     SECTION 2.18.  Extension of the Termination Date and the Final Maturity
                      Date.................................................. 32

                              ARTICLE III

                CONDITIONS TO EFFECTIVENESS AND LENDING

     SECTION 3.01.  Conditions Precedent to Effectiveness of Sections 2.01
                     and 2.03............................................... 34
     SECTION 3.02.  Initial Borrowing of Each Designated Subsidiary..........35
     SECTION 3.03.  Conditions Precedent to Each Revolving Credit Borrowing..36
     SECTION 3.04.  Conditions Precedent to Each Competitive Bid Borrowing...37
     SECTION 3.05.  Conditions Precedent to Extension of the Final Maturity
                     Date............................ 38
     SECTION 3.06.  Determinations Under Section 3.01........................38

                              ARTICLE IV

                    REPRESENTATIONS AND WARRANTIES

     SECTION 4.01.  Representations and Warranties of the Company............39

                               ARTICLE V

                       COVENANTS OF THE COMPANY

     SECTION 5.01.  Affirmative Covenants....................................41
     SECTION 5.02.  Negative Covenants.......................................45

                              ARTICLE VI

                           EVENTS OF DEFAULT

     SECTION 6.01.  Events of Default........................................46

                              ARTICLE VII

                               GUARANTY

     SECTION 7.01.  Guaranty.................................................49
     SECTION 7.02.  Guaranty Absolute........................................49
     SECTION 7.03.  Waivers and Acknowledgments..............................50
     SECTION 7.04.  Subrogation..............................................50
     SECTION 7.05.  Continuing Guaranty; Assignments under the Credit
                     Agreement...............................................51
     SECTION 7.06.  No Stay..................................................51

                             ARTICLE VIII

                               THE AGENT

     SECTION 8.01.  Authorization and Action.................................52
     SECTION 8.02.  Agent's Reliance, Etc....................................52
     SECTION 8.03.  Citibank and Affiliates..................................52
     SECTION 8.04.  Lender Credit Decision...................................53
     SECTION 8.05.  Indemnification..........................................53
     SECTION 8.06.  Successor Agent..........................................53


<PAGE>

                                   ARTICLE IX

                                  MISCELLANEOUS

     SECTION 9.01.  Amendments, Etc..........................................54
     SECTION 9.02.  Notices, Etc.............................................54
     SECTION 9.03.  No Waiver; Remedies......................................55
     SECTION 9.04.  Costs and Expenses.......................................55
     SECTION 9.05.  Right of Set-off.........................................57
     SECTION 9.06.  Binding Effect. .........................................57
     SECTION 9.07.  Assignments, Designations and Participations.............57
     SECTION 9.08.  Designated Subsidiaries..................................60
     SECTION 9.09.  Confidentiality..........................................61
     SECTION 9.10.  Governing Law............................................61
     SECTION 9.11.  Execution in Counterparts................................61
     SECTION 9.12.  Jurisdiction, Etc........................................61









<PAGE>

SCHEDULES

Schedule I - List of Applicable Lending Offices

Schedule 3.01(b) - Disclosed Litigation

Schedule 4.01(c) - Required Authorizations and Approvals

EXHIBITS

Exhibit A-1  -   Form of Revolving Credit Note

Exhibit A-2  -   Form of Competitive Bid Note

Exhibit B-1  -   Form of Notice of Revolving Credit Borrowing

Exhibit B-2  -   Form of Notice of Competitive Bid Borrowing

Exhibit C    -   Form of Assignment and Acceptance

Exhibit D    -   Form of Assumption Agreement

Exhibit E-1  -   Form of Extension Request

Exhibit E-2  -   Form of Notice of Extension of the Commitment

Exhibit F    -   Form of Designation Letter

Exhibit G    -   Form of Acceptance by Process Agent

Exhibit H    -   Form of Opinion of Robert M. Reese, Senior Vice President
                   and General Counsel to the Company

Exhibit I    -   Form of Opinion of Counsel to a Designated Subsidiary