EXHIBIT 10.13



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                                                                       EXECUTION
                                                                            COPY



                            RESTATED CREDIT AGREEMENT

                                   $90,000,000

                                      among

                             DI GIORGIO CORPORATION

                                   as Borrower

                       EACH OF THE FINANCIAL INSTITUTIONS
                          INITIALLY A SIGNATORY HERETO,
                          TOGETHER WITH THOSE ASSIGNEES
                        PURSUANT TO SECTION 11.6 HEREOF,

                                   as Lenders,

                           BT COMMERCIAL CORPORATION,

                                    as Agent,

                                       and

                           DEUTSCHE BANK AG NEW YORK,
                                 as Issuing Bank

                          Dated as of November 15, 1999





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                                TABLE OF CONTENTS


ARTICLE 1.   Definitions.......................................................1
               1.1        General Definitions..................................2
1.2            Accounting Terms and Determinations............................18
1.3            Other Defined Terms............................................18

ARTICLE 2.   Conditions Precedent.............................................18

ARTICLE 3.   Revolving Loans..................................................19
3.1            Commitment and Delivery of Revolving  Notes....................19
3.2            Determination of Borrowing Base................................19
3.3            Borrowings of Revolving Loans..................................20
3.4            Mandatory Payment: Reduction of Commitments....................24
3.5            Payments and Computations......................................24
3.6            Maintenance of Account.........................................26
3.7            Statement of Account...........................................26
3.8            Taxes.     ....................................................26
3.9            Affected Lenders...............................................29
3.10           Sharing of Payments............................................30

ARTICLE 4.   Letters of Credit................................................30
4.1            Issuance of Letters of Credit..................................30
4.2            Terms of Letters of Credit.....................................31
4.3            Lenders' Participation.........................................31
4.4            Notice of Issuance.............................................32
4.5            Payment of Amount Drawn Under Letters of Credit................32
4.6            Payment by Lenders.............................................33
4.7            Nature of Issuing Bank's Duties................................33
4.8            Obligations Absolute...........................................34

ARTICLE 5.   Interest, Fees and Expenses......................................34
5.1            Interest on Eurodollar Rate Loans..............................34
5.2            Interest on Prime Rate Loans...................................35
               5.3        Notice of Continuation and Notice of Conversion.....35
5.4            Interest After Event of Default................................37
5.5            Reimbursement of Expenses......................................37
5.6            Unused Line Fee................................................37
5.7            Letter of Credit Fee.  ........................................38
5.8            Authorization to Charge Account................................38
5.9            Indemnification in Certain Events..............................38
5.10           Calculations...................................................39

ARTICLE 6.   Representations and Warranties...................................39
6.1            Organization and Qualification.................................39
6.2            Solvency   ....................................................40
6.3            Liens; Inventory...............................................40
6.4            No Conflict....................................................40

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6.5            Enforceability.................................................41
6.6            Financial Data.................................................41
6.7            Locations of Offices, Records and Inventory....................41
6.8            Fictitious Business Names......................................41
6.9            Subsidiaries...................................................42
6.10           No Judgments or Litigation.....................................42
6.11           No Defaults....................................................42
6.12           Labor Matters.  ...............................................42
6.13           Compliance with Law............................................43
6.14           ERISA.     ....................................................43
6.15           Compliance with Environmental or Other Laws....................44
6.16           Intellectual Property..........................................44
6.17           Licenses and Permits...........................................44
6.18           Title to Property..............................................44
6.19           Investment Company.............................................44
6.20           No Event of Default............................................45
6.21           Taxes and Tax Returns..........................................45
6.22           No Other Indebtedness..........................................45
6.23           Material Contracts.............................................45
6.24           Affiliate Transactions.........................................45
6.25           Accuracy and Completeness of Information.......................45
6.26           Recording Fees and Taxes.......................................46
6.27           No Change  ....................................................46

ARTICLE 7.   Affirmative Covenants............................................46
7.1            Reporting Information..........................................46
7.3            ERISA.     ....................................................48
7.4            Proceedings, Adverse Changes, or Other Events..................49
7.5            Environmental and Other Matters................................50
7.6            Books and Records..............................................51
7.7            Collateral Records.............................................52
7.8            Security Interests.............................................52
7.9            Insurance; Casualty Loss.......................................52
7.10           Taxes      ....................................................53
7.11           Compliance With Laws...........................................53
7.12           Use of Proceeds................................................53
7.13           Trademarks ....................................................53
7.14           Maintenance of Property........................................54
7.15           Further Assurances.............................................54
7.16           Puerto Rico Collections Received by Borrower...................54

ARTICLE 8.   Negative Covenants...............................................54
8.1            [ intentionally deleted].......................................54
8.2            Interest Coverage Ratio........................................55
8.3            [intentionally deleted]........................................55
8.4            Capital Expenditures...........................................55
8.5            No Additional Indebtedness.....................................56
8.6            No Liens.  ....................................................57
8.7            No Sale of Assets..............................................58

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8.8            No Corporate Changes...........................................59
8.9            No Guarantees..................................................59
8.10           No Restricted Payments.........................................60
8.11           No Investments.................................................61
8.12           No Affiliate Transactions......................................63
8.13           No Prohibited Transactions Under ERISA.........................63
8.14           No Additional Bank Accounts....................................64
8.15           No Excess Cash.................................................64
8.16           Material Amendments of Material Contracts......................65
8.17           Additional Negative Pledges....................................65
8.18           No Additional Subsidiaries.....................................65
8.19           Fiscal Year....................................................66

ARTICLE 9.   Events of Default and Remedies...................................66
9.1            Events of Default..............................................66
9.2            Acceleration and Cash Collateralization........................68
9.3            Remedies   ....................................................68

ARTICLE 10.   The Agent.......................................................69
10.1           Appointment of Agent...........................................70
10.2           Nature of Duties of Agent......................................70
10.3           Lack of Reliance on Agent......................................70
10.4           Certain Rights of the Agent....................................71
10.5           Reliance by Agent..............................................71
10.6           Indemnification of Agent.......................................71
10.7           The Agent in its Individual Capacity...........................72
10.8           Holders of Notes...............................................72
10.9           Successor Agent................................................72
10.10          Collateral Matters.............................................73
10.11          Actions with Respect to Defaults...............................74
10.12          Delivery of Information........................................74

ARTICLE 11.   Miscellaneous...................................................74
11.1           SUBMISSION TO JURISDICTION; WAIVERS............................74
11.2           JURY TRIAL ....................................................75
11.3           GOVERNING LAW..................................................75
11.4           Delays:  Partial Exercise of Remedies..........................75
11.5           Notices    ....................................................76
11.6           Assignability..................................................76
11.7           Confidentiality................................................78
11.8           Indemnification................................................79
11.9           Entire Agreement: Successors and Assigns.......................80
11.10          Amendments, Etc................................................80
11.11          Nonliability of Agent and Lenders..............................80
11.12          Independent Nature of Lenders' Rights..........................81
11.13          Counterparts...................................................81
11.14          Effectiveness..................................................81
11.15          Severability...................................................81
11.16          Headings Descriptive...........................................81

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11.17          Maximum Rate...................................................81
11.18          Right of Setoff................................................82
11.19          No Novation....................................................82

ANNEXES
               Annex I     - List of Lenders and Commitment Amounts

EXHIBITS  [GRAPHIC OMITTED]
          Exhibit A       -   Form of Revolving Note
          Exhibit B       -   Form of Blocked Account Agreement
          Exhibit C       -   Form of Compliance Certificate
          Exhibit D       -   Form of Borrowing Base Certificate
          Exhibit E       -   Form of Borrower's Counsel's Legal Opinion
          Exhibit F       -   Form of Notice of Borrowing
          Exhibit G       -   Form of Pledge Agreement
          Exhibit H       -   Form of Security Agreement
          Exhibit I       -   Form of Assignment and Assumption Agreement
          Exhibit J       -   Form of Local Counsel Opinion Regarding UCC Issues
          Exhibit K       -   Form of Notice of Continuation
          Exhibit L       -   Form of Notice of Conversion
          Exhibit M       -   Form of Letter of Credit Request
          Exhibit N       -   Form of Acknowledgement Agreement
          Exhibit O       -   Form of Landlord's Waiver and Consent
          Exhibit P       -   Form of Solvency Certificate
          Exhibit Q       -   Form of Concentration Account Agreement

SCHEDULES
          Schedule A  - Closing Document List
          Schedule B  - Disclosure Schedule


DSN:54248.4

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     THIS RESTATED CREDIT  AGREEMENT is dated as of November 15, 1999,  among DI
GIORGIO CORPORATION, a Delaware corporation (the "Borrower"),  and each of those
financial  institutions  identified as Lenders on Annex I (together with each of
their  successors  and  assigns,  referred  to  individually  as a "Lender"  and
collectively as the "Lenders"),  BT COMMERCIAL  CORPORATION ("BTCC"),  acting in
the manner and to the extent  described in Article 10 hereof (in such  capacity,
the "Agent") and DEUTSCHE  BANK AG NEW YORK,  as issuer of letters of credit (in
such capacity, the "Issuing Bank").

                              W I T N E S S E T H :

     WHEREAS, the Borrower,  certain of the Lenders, the Agent and Bankers Trust
Company, the  predecessor-in-interest to the Issuing Bank, entered into a Credit
Agreement dated as of February 10, 1993 (the "Initial Agreement");

     WHEREAS,  the  Initial  Agreement  has been  amended  pursuant  to thirteen
separate  amendments  entered  into by the parties,  the latest such  amendment,
Amendment No. 13, having been entered into on and dated as of August 1, 1999;

     WHEREAS, for convenience,  the parties desire to set forth the terms of the
Initial Agreement, as amended through the date hereof, in one document,  without
intending  any  novation  of  the  Initial  Agreement,  as so  amended,  or  the
indebtedness incurred pursuant thereto.

     NOW, THEREFORE,  the Initial Agreement, as amended through the date hereof,
is restated to read in its entirety as follows:

     "WHEREAS,  the  Borrower  wishes to obtain a revolving  credit  facility to
provide  for  the  Borrower's  ongoing  working  capital  and  general  business
requirements;

     WHEREAS,  the  Borrower  wishes to obtain a letter  of credit  facility  to
provide for the Borrower's ongoing letter of credit requirements; and

     WHEREAS, upon the terms and subject to the conditions set forth herein, the
Lenders are  willing to (i) make loans and  advances  to the  Borrower  and (ii)
purchase  participations in letters of credit issued by the Issuing Bank for the
account of the  Borrower,  and the Issuing  Bank is willing to issue  letters of
credit for the account of the Borrower;

     NOW, THEREFORE,  the Borrower,  the Lenders, the Issuing Bank and the Agent
hereby agree as follows:

ARTICLE 1.   Definitions.


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     1.1 General Definitions. As used herein, the following terms shall have the
meanings  herein  specified  (to be equally  applicable to both the singular and
plural forms of the terms defined):

Accounts  shall mean all of the  Borrower's  accounts,  whether now  existing or
existing  in  the  future,  including,  without  limitation,  all  (i)  accounts
receivable  (whether or not  specifically  listed on schedules  furnished to the
Agent), including,  without limitation,  all accounts created by or arising from
all of the Borrower's  sales of goods or rendition of services made under any of
the  Borrower's  trade  names  or  styles,  or  through  any of  the  Borrower's
divisions;   (ii)  unpaid  seller's  rights  (including  rescission,   replevin,
reclamation  and  stopping in  transit)  relating  to the  foregoing  or arising
therefrom;  (iii)  rights  to any  goods  represented  by any of the  foregoing,
including  returned or repossessed goods; (iv) reserves and credit balances held
by the Borrower with respect to any such accounts receivable or account debtors;
and (v) guarantees or collateral for any of the foregoing.

Acknowledgement  Agreements shall mean any acknowledgement agreements of lessors
of  real  property  on  which  Inventory  is  located  and  the  acknowledgement
agreements of any warehouseman or processor in possession of Inventory,  in each
case  acknowledging  the Liens and security  interests of the Agent on behalf of
the Lenders and  providing  the Agent access to such  Inventory  for purposes of
liquidation, in the form of Exhibit N or Exhibit O.

Adjusted  Eurodollar  Rate shall mean,  with respect to each Interest Period for
any Eurodollar  Rate Loan, the rate obtained by dividing (i) the Eurodollar Rate
for such  Interest  Period  by (ii) a  percentage  equal to 1 minus  the  stated
maximum  rate  (stated as a decimal)  of all  reserves,  if any,  required to be
maintained against  "Eurocurrency  liabilities" as specified in Regulation D (or
against any other category of liabilities  which includes  deposits by reference
to which the interest rate on Eurodollar  Loans is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of any Lender to United States residents).

Adjusted Net Income shall mean, in any fiscal  period,  Net Income plus or minus
(as the case may be) losses or gains from extraordinary  items and from sales of
assets, other than sales of Inventory in the ordinary course of business.

Affiliate  shall mean any entity  which  directly  or  indirectly  controls,  is
controlled  by, or is under common  control with, the Borrower or any Subsidiary
or any  Person  who is a  director  or senior  officer  of the  Borrower  or any
Subsidiary.   For  purposes  of  this  definition,   "control"  shall  mean  the
possession,  directly or indirectly,  of the power to (i) vote ten percent (10%)
or more of the  securities  having  ordinary  voting  power for the  election of
directors of such Person or (ii) direct or cause the direction of management and
policies of a business,  whether through the ownership of voting securities,  by
contract or otherwise.

Applicable  Margin  shall mean 1.625% in the case of  Eurodollar  Rate Loans and
zero in the case of Prime Rate Loans.


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Assignment  and  Assumption  Agreement  shall mean an assignment  and assumption
agreement  entered  into by an  assigning  Lender and an  assignee  Lender,  and
accepted by the Agent,  in accordance  with Section 11.6, in the form of Exhibit
I.

Auditors  shall  mean  a   nationally-recognized   firm  of  independent  public
accountants  selected by the Borrower and reasonably  satisfactory to the Agent.
As of the date hereof,  the accounting firm of Deloitte & Touche is satisfactory
to the Agent.

Benefit Plan shall mean a defined  benefit  plan as defined in Section  3(35) of
ERISA (other than a Multiemployer  Plan) for which the Borrower,  any Subsidiary
or any ERISA  Affiliate  is, or within the  immediately  preceding six (6) years
was, an "employer" as defined in Section 3(5) of ERISA.

Blocked  Account  Agreement shall have the meaning given to such term in Section
3.5 hereof.

Blocked  Account  Bank shall have the meaning  given to such term in Section 3.5
hereof.

Borrowing  shall mean a borrowing of Loans of the same Type made on the same day
by the Lenders.

Borrowing Base shall mean the amount  calculated from time to time in accordance
with clause (ii) (A) through (B) of Section 3.2 hereof.

Borrowing Base Certificate  shall have the meaning given to such term in Section
7.1 hereof.

BT Account shall have the meaning given to such term in Section 3.5 hereof.

Budget shall mean a projection of the expected  financial  condition and results
of operations of the  Borrower,  on a  consolidated  basis  (including,  but not
limited to, a projected consolidated balance sheet, statement of operations, and
statement of cash flows),  made as of the  beginning  of the  Borrower's  fiscal
year, for the ensuing periods covered by such projection,  which Budget shall be
prepared with not less than the detail  provided in and shall be consistent with
the format of the  projections of the Borrower's  financial  performance for the
fiscal year ending  January 2, 2000,  prepared by the Borrower and  delivered to
the Agent and the Lenders prior to the Closing Date.

Business  Day shall mean any day other than a  Saturday,  Sunday or other day on
which  commercial  banks in New York City are  authorized  or required by law to
close.  When used in connection with Eurodollar Rate Loans, this definition will
also exclude any day on which  commercial banks are not open for dealing in U.S.
Dollar deposits in the London (England, U.K.) interbank market.

Capitalized  Lease  Obligations  shall  mean all  rental  obligations  which are
required, in accordance with GAAP, to be capitalized on the balance sheet of the
obligor  thereon,  in each case taken at the amount thereof and accounted for as
indebtedness in accordance with GAAP.


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Capital Expenditures shall mean, with respect to any Person, for any period, all
expenditures  capitalized  for financial  statement  purposes in accordance with
GAAP,  including  without  duplication the entire  principal  amount of any debt
(including Capitalized Lease Obligations) assumed or incurred in connection with
any such expenditures. For the purpose of this definition, the purchase price of
replacement  equipment  which is acquired  simultaneously  with the  trade-in of
existing  equipment  owned by the  Borrower or any of its  Subsidiaries  or with
insurance proceeds shall be included in Capital  Expenditures only to the extent
of the gross amount of such purchase price less the amount of the credit granted
at such time by the seller of such replacement equipment,  or the amount of such
proceeds, as the case may be.

Cash Equivalents shall mean (i) securities issued,  guaranteed or insured by the
United States or any of its agencies  with  maturities of not more than one year
from the date acquired; (ii) certificates of deposit with maturities of not more
than  one year  from  the  date  acquired,  issued  by a U.S.  federal  or state
chartered  commercial  bank of  recognized  standing,  which bank or its holding
company  has a  short-term  commercial  paper  rating  of at  least  A-2  or the
equivalent by Standard & Poor's Corporation or at least P-2 or the equivalent by
Moody's Investors Services, Inc.; (iii) reverse repurchase agreements with terms
of not more than seven days from the date  acquired,  for securities of the type
described  in (i) above and entered into only with  commercial  banks having the
qualifications described in (ii) above; (iv) commercial paper or finance company
paper issued by any Person  incorporated  under the laws of the United States or
any state thereof and rated at least A-2 or the equivalent thereof by Standard &
Poor's  Corporation  or at  least  P-2  or the  equivalent  thereof  by  Moody's
Investors Service,  Inc., in each case with maturities of not more than one year
from the date acquired;  (v) investments in money market funds  registered under
the  Investment  Company  Act  of  1940,  which  have  net  assets  of at  least
$200,000,000 and at least  eighty-five  percent (85%) of whose assets consist of
securities  and other  obligations  of the type described in clauses (i) through
(iv)  above;  and  (vi)  other  instruments,  commercial  paper  or  investments
acceptable to the Agent in its sole discretion.

Casualty Loss shall have the meaning given to such term in Section 7.9 hereof.

Closing  shall mean the making of the initial  loan or advance by the Lenders to
the Borrower under this Credit Agreement.

Closing Date shall mean November 15, 1999.

Closing  Document List shall mean the Closing Document List attached as Schedule
A.

Collateral shall mean (i) Accounts and Inventory and (ii) Documents of Title and
General  Intangibles  relating to Accounts  and  Inventory,  as set forth in the
Security Agreement.

Collateral  Documents shall mean the Security Agreement and the  Acknowledgement
Agreements.

Commitment  of any Lender shall mean the  Revolving  Credit  Commitment  of such
Lender.

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Concentration  Account  shall have the meaning given to such term in Section 3.5
hereof.

Concentration  Account  Agreement  shall have the meaning  given to such term in
Section 3.5 hereof.

Continuation shall have the meaning given to such term in Section 5.3 hereof.

Convert,  Conversion  and Converted each shall refer to a conversion of Loans of
one Type into Loans of another Type pursuant to Section 5.3.

Covered Taxes shall have the meaning given to such term in Section 3.8 hereof.

Credit Agreement shall mean this Restated Credit Agreement, dated as of the date
hereof, as the same may be modified,  amended,  extended,  restated, amended and
restated or supplemented from time to time.

Credit Documents shall mean, collectively,  this Credit Agreement, the Revolving
Notes, the Letters of Credit,  each of the Collateral  Documents (other than the
Acknowledgement  Agreements) and all other documents,  agreements,  instruments,
opinions and  certificates  executed and  delivered by, on behalf of, or for the
benefit of the Borrower or any of its Affiliates, or by which any of them may be
bound,  in  connection  herewith  or  therewith,  as the same  may be  modified,
amended, extended, restated or supplemented from time to time.

Credit Parties shall mean, collectively,  the Borrower and any of its Affiliates
which are parties to or which are bound by or obligated  under any of the Credit
Documents.

Customer Notes shall mean the promissory notes executed in favor of the Borrower
by its customers or related Persons evidencing loans and advances made from time
to time  by the  Borrower  to or for the  benefit  of  such  customers,  and any
amendments or modifications thereto, and any replacements or renewals thereof.

Default  shall  mean an event,  condition  or  default  which with the giving of
notice, the passage of time or both would be an Event of Default.

Defaulting  Lender  shall have the  meaning  given to such term in  Section  3.3
hereof.

Depositary  Account  shall have the  meaning  given to such term in Section  3.5
hereof.

Disbursement  Accounts  shall have the meaning given to such term in Section 3.3
hereof.

Documents  of Title shall mean all of the  Borrower's  now  existing  and future
warehouse  receipts,  bills of lading,  shipping  documents,  chattel  paper and
similar documents, all whether negotiable or not.


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                                        5

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DOL  shall  mean  the  United  States  Department  of  Labor  and any  successor
department or agency.

Domestic  Lending Office shall mean,  with respect to any Lender,  the office of
such Lender  specified as its  "Domestic  Lending  Office"  opposite its name on
Annex I, as such annex may be amended from time to time.

EBITDA shall mean, in any fiscal period,  Adjusted Net Income plus the amount of
all  Interest  Expense,  income  tax  expense,  depreciation  and  amortization,
including amortization of any goodwill or other intangibles, of the Borrower, on
a consolidated basis, for such period, all determined in accordance with GAAP.

Eligible  Accounts  Receivable  shall  mean the  aggregate  face  amount  of the
Borrower's Accounts that conform to the warranties and standards for eligibility
contained herein, less the aggregate amount of all returns,  discounts,  claims,
credits, charges and allowances of any nature relating to such Accounts (whether
issued,  owing,  granted or  outstanding),  and less the aggregate amount of all
reserves, limits and deductions set forth below or as otherwise provided in this
Credit Agreement.  Unless otherwise approved in writing by the Agent, no Account
shall be deemed to be an Eligible Account Receivable if:

          (a) it arises out of a sale made by the Borrower to an Affiliate; or

          (b) the  Account  is unpaid  more than 45 days from the  invoice  date
relating thereto; or

          (c) it is from the same account debtor (or any affiliate  thereof) and
fifty percent  (50%) or more, in face amount,  of all Accounts from such account
debtor (or any affiliate thereof) are ineligible pursuant to (b) above; or

          (d) the  Account,  when  aggregated  with all other  Accounts  of such
account  debtor,  exceeds (i) ten percent (10%) in face value of all Accounts of
the Borrower then outstanding,  (other than Accounts  described in the following
clause)  or (ii)  twenty  percent  (20%) in face  value of all  Accounts  of the
Borrower then  outstanding  and with respect to which any of The Great  Atlantic
and Pacific Tea Company, or any of its affiliates, are obligated, in the case of
each of  clauses  (i) and (ii) of this  paragraph  (d),  to the  extent  of such
excess;  provided,  however,  that  Accounts  supported or secured by letters of
credit shall be excluded for purposes of the  calculation  under this subsection
(d), and provided further that account debtors which purchase  Inventory through
Associated  Food  Stores,  Inc.  shall be treated as  separate  and  independent
account debtors; or

          (e) (i) the account debtor is also a creditor of the Borrower,  to the
extent of the amount owed by the  Borrower to the  account  debtor,  unless such
account debtor has executed a no-offset letter in form and substance  acceptable
to the Agent,  (ii) the account  debtor has  disputed its  liability  on, or the
account  debtor has made any claim with  respect to,  such  Account or any other
Account  due from  such  account  debtor  to the  Borrower,  which  has not been
resolved, to the extent

DSN:54248.4
                                        6

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of the  amount of such  dispute  or claim,  or (iii) the  Account  otherwise  is
subject  to any right of  setoff by the  account  debtor,  to the  extent of the
amount of such setoff; or

          (f) the  account  debtor  has  commenced  a  voluntary  case under the
federal  bankruptcy  laws, as now constituted or hereafter  amended,  or made an
assignment for the benefit of creditors,  or if a decree or order for relief has
been  entered by a court having  jurisdiction  in the premises in respect to the
account debtor in an involuntary case under the federal  bankruptcy laws, as now
constituted or hereafter amended,  or if any other petition or other application
for relief  under the federal  bankruptcy  laws has been filed by or against the
account  debtor,  or if the  account  debtor  has  failed,  suspended  business,
declared  itself to be  insolvent,  or  consented  to or  suffered  a  receiver,
trustee,  liquidator  or  custodian  to be  appointed  for  it or  for  all or a
significant  portion of its assets or  affairs,  unless the  payment of Accounts
from such account debtor is secured in a manner satisfactory to the Agent or, if
the Account from such account debtor arises  subsequent to a decree or order for
relief with respect to such account debtor under the federal bankruptcy laws, as
now or  hereafter  in effect,  the Agent shall have  determined  that the timely
payment and collection of such Account will not be impaired; or

          (g) the  Account  arises  from sales to account  debtors  outside  the
continental United States,  except for sales (i) to account debtors domiciled in
Puerto Rico, up to a maximum  amount of $5,000,000 in the aggregate for all such
Accounts  outstanding at any one time; (ii) on guaranty or acceptance  terms, in
each case determined by the Agent in its commercially  reasonable judgment to be
acceptable,  (iii)  supported  by  letters  of  credit  issued by banks or other
financial  institutions,  and on terms,  in each case acceptable to the Agent or
(iv) otherwise approved by and acceptable to the Agent; or

          (h) the sale to the account debtor is on a  bill-and-hold,  guaranteed
sale, sale-and-return, sale on approval or consignment basis or made pursuant to
any other written agreement providing for repurchase or return; or

          (i) the Agent determines in its commercially  reasonable judgment that
such Account is reasonably likely not to be paid; or

          (j)  the  account  debtor  is the  United  States  of  America  or any
department,  agency or instrumentality thereof, unless the Borrower duly assigns
its rights to payment of such Account to the Agent pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. ss.3727 et seq.); or

          (k) the goods  giving rise to such  Account  have not been shipped and
delivered to and accepted by the account  debtor or the services  giving rise to
such Account have not been performed by the Borrower and accepted by the account
debtor or the Account otherwise does not represent a final sale; or


DSN:54248.4
                                        7

<PAGE>



          (l)  the   Account   does  not  comply  with  all   applicable   legal
requirements,   including,   where  applicable,   the  Federal  Consumer  Credit
Protection  Act, the Federal Truth in Lending Act and  Regulation Z of the Board
of Governors of the Federal Reserve System, in each case as amended; or

          (m) the  Agent  does not have a valid  and  perfected  first  priority
security interest in such Account.

     In addition to the foregoing,  Eligible  Accounts  Receivable shall include
such Accounts as the Borrower  shall request and that the Agent  approves in its
commercially reasonable judgment in advance in writing.

Eligible Inventory shall mean (A) the gross amount of the Borrower's  Inventory,
valued at the lower of average weighted cost (on a FIFO basis) or market,  which
(i) is owned  solely by the  Borrower and with respect to which the Borrower has
good, valid and marketable  title; (ii) is stored on property that is either (a)
owned or leased by the  Borrower or (b) owned or leased by a  warehouseman  that
has  contracted  with the  Borrower to store  Inventory  on such  warehouseman's
property  (provided that, with respect to Inventory stored on property leased by
the  Borrower,  the  Borrower  shall  have  delivered  in favor of the  Agent an
Acknowledgement  Agreement  executed by the Lessor of such  property,  and, with
respect to Inventory  stored on property owned or leased by a warehouseman,  the
Borrower shall have delivered to the Agent an Acknowledgement Agreement executed
by such  warehouseman);  (iii) is  subject  to a valid,  enforceable  and  first
priority  Lien in favor of Agent  except,  with  respect to  Eligible  Inventory
stored at sites  described  in clause  (ii)(b)  above,  for Liens for normal and
customary warehouseman charges; (iv) is located in the United States; and (v) is
not obsolete or slow moving,  and which otherwise conforms to the warranties and
standards for eligibility  contained herein;  (B) less any Inventory returned or
rejected by the  Borrower's  customers that are determined by the Borrower to be
unsalable in the ordinary  course of business and  Inventory in transit to third
parties (other than to the Borrower's  agents or  warehousemen  that comply with
clause (A)(ii)(b)  above); (C) less any reserves otherwise required by the Agent
pursuant to Section 3.2(b) hereof; (D) less any Inventory which has a shelf life
of 30 days or less from the date such Inventory is acquired by the Borrower; and
(E) less any Inventory  that the Agent  determines to be ineligible  pursuant to
Section 3.2(b) hereof.  In addition to the foregoing,  Eligible  Inventory shall
include such items of the Borrower's Inventory as the Borrower shall request and
that the Agent approves in its  commercially  reasonable  judgment in advance in
writing.

Environmental  Law shall mean any federal,  state or local  statute,  law, rule,
regulation,  ordinance,  code, guideline,  written policy and rule of common law
now or  hereafter  in effect and in each case as  amended,  and any  judicial or
administrative  interpretation thereof, including any judicial or administrative
order, consent decree or judgment,  relating to the environment,  health, safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution  Control Act, 33 U.S.C.  ss. 1251 et seq.; the Toxic  Substances
Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean Air Act, 42 U.S.C. ss. 300(f)
et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et

DSN:54248.4
                                        8

<PAGE>



seq.; Federal Insecticide,  Fungicide,  and Rodenticide Act, 7 U.S.C. ss. 136 et
seq., and any state and local counterparts or equivalents thereof.

ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor  statute thereto and all final or temporary
regulations  promulgated thereunder and published,  generally applicable rulings
entitled to precedential effect.

ERISA  Affiliate  shall  mean any entity  required  at any  relevant  time to be
aggregated with the Borrower or any subsidiary under Sections  414(b),  (c), (m)
or (o) of the Internal Revenue Code.

Eurodollar  Lending Office shall mean, with respect to any Lender, the office of
such Lender  specified as its "Eurodollar  Lending Office"  opposite its name on
Annex I, as such annex may be amended  from time to time (or,  if no such office
is specified, its Domestic Lending Office), or such other office or affiliate of
such Lender as such Lender may from time to time specify to the Borrower and the
Agent.

Eurodollar  Rate  shall  mean,  with  respect  to the  Interest  Period for each
Eurodollar Rate Loan comprising part of the same Borrowing, an interest rate per
annum equal to the arithmetical  average of the offered  quotations,  if any, by
first class banks in the Eurodollar market to Deutsche Bank AG New York for U.S.
dollar  deposits of amounts in  immediately  available  funds  comparable to the
principal  amount of the Eurodollar  Rate Loan for which the Eurodollar  Rate is
being  determined  with  maturities  comparable to the Interest Period for which
such  Eurodollar Rate will apply as of  approximately  10:00 A.M. (New York City
time) two (2) Business Days prior to the commencement of such Interest Period.

Eurodollar  Rate Loan shall  mean a Loan that  bears  interest  as  provided  in
Section 5.1 hereof.

Event(s)  of Default  shall have the meaning  provided  for in Article 9 of this
Credit Agreement.

Existing  Advances shall mean the loans,  investments  and advances  between the
Borrower  and its  Subsidiaries  in existence as of the date set forth in and as
described on Schedule B.

Expenses shall mean all present and future reasonable expenses incurred by or on
behalf  of the Agent in  connection  with the  Credit  Agreement  or any  Credit
Document,  whether  incurred  heretofore  or  hereafter,  which  expenses  shall
include,  without  being  limited  to, the cost of record  searches,  reasonable
counsel fees (including the allocated cost of internal  counsel),  all costs and
expenses  incurred by the Agent in opening  bank  accounts,  depositing  checks,
receiving and  transferring  funds,  and any charges imposed on the Agent due to
insufficient  funds  of  deposited  checks,   collateral  examination  fees  and
expenses,  fees and  expenses of  accountants,  appraisers  or other  experts or
advisors  retained by the Agent,  costs and expenses incurred by the Agent (both
in its  capacity  as Agent  and as a  Lender)  in  connection  with the  primary
syndication  of the Loans (which may include both sales by way of assignment and
sales by way of participation),  fees, costs and expenses,  of whatever kind and
nature (including any taxes,  reasonable  attorneys' fees or costs for insurance
of

DSN:54248.4
                                        9

<PAGE>



any kind),  which the Agent may incur  with  respect  to the  Collateral  or the
obligations:  in  filing  public  notices;  in  preparing  or  filing  financing
statements or other  documents;  in protecting,  maintaining,  or preserving the
collateral  or its  interest  therein;  in enforcing  or  foreclosing  the Liens
hereunder,  whether through judicial procedures or otherwise; or in defending or
prosecuting  any  actions  or  proceedings  arising  out of or  relating  to its
transactions  with the  Borrower  or any of the  Subsidiaries  under this Credit
Agreement or any other Credit  Document,  and all  expenses,  costs and fees set
forth in Article 5 of this Credit Agreement.

Expiration Date shall mean June 30, 2004.

Federal Funds Rate shall mean, 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.

Fees shall mean,  collectively,  the Unused Line Fee,  the Letter of Credit Fees
and any other fees payable by the Borrower to the Lenders or the Agent  pursuant
to or in connection with this Credit Agreement.

Financial  Statements shall mean the consolidated  (and, to the extent requested
by  the  Agent,   consolidating)  balance  sheets,   statements  of  operations,
statements of cash flows and  statements of changes in  shareholder's  equity of
the  Borrower  and  its  Subsidiaries  for  the  period  specified  prepared  in
accordance with GAAP and consistent with prior practices.

Financials shall have the meaning given to such term in Section 6.6 hereof.

Foreign Lender shall mean any Lender  organized under the laws of a jurisdiction
outside of the United States.

Funding Bank shall have the meaning given to such term in Section 5.9 hereof.

GAAP shall mean generally accepted accounting principles in the United States of
America as in effect from time to time.

General  Intangibles  shall mean all of the  Borrower's  present  and  hereafter
acquired or created general intangibles,  and shall include all choses in action
and all causes of action,  all  settlement  rights in respect  thereof,  and all
other  intangible  personal  property  of the  Borrower of every kind and nature
(other than Accounts and Trademarks) now owned or hereafter  acquired or created
by the Borrower,  including,  without limitation,  contract rights, corporate or
other business records, inventions, patents, patent applications, trade secrets,
goodwill, registrations, copyrights, licenses, franchises, computer

DSN:54248.4
                                       10

<PAGE>



software,  customer  lists,  rights and claims  against  carriers and  shippers,
rights to  indemnification,  business  interruption  insurance  and the proceeds
thereof.

Hazardous  Materials  shall  mean  (i)  any  petroleum  or  petroleum  products,
radioactive  materials,  asbestos in any form that is or could  become  friable,
urea formaldehyde  foam insulation,  transformer or other equipment that contain
dielectric fluid containing levels of polychlorinated  biphenyls, and radon gas;
(ii) any  chemicals,  materials  or  substances  defined as or  included  in the
definition of "hazardous  substances," "hazardous waste," "hazardous materials,"
"extremely  hazardous  substances,"  "restricted  hazardous  substances," "toxic
substances,"  "toxic  pollutants,"  "contaminants," or "pollutants," or words of
similar  import,  under any  applicable  Environmental  Law; and (iii) any other
chemical,  material or substance,  exposure to which is  prohibited,  limited or
regulated by any governmental authority.

Highest  Lawful Rate shall mean, at any given time during which any  Obligations
shall be outstanding  hereunder,  the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted  for,  taken,  reserved,
charged or received on the indebtedness  under this Credit Agreement,  under the
laws of the State of New York (or the law of any other  jurisdiction  whose laws
may be mandatorily  applicable  notwithstanding  other provisions of this Credit
Agreement and the other Credit  Documents to which the Borrower is a party),  or
under applicable  federal laws which may presently or hereafter be in effect and
which allow a higher maximum  nonusurious  interest rate than under New York (or
such other  jurisdiction's)  law, in any case after taking into account,  to the
extent  permitted by  applicable  law, any and all relevant  payments or charges
under  this  Credit  Agreement  and  any  other  Credit  Documents  executed  in
connection herewith, and any available exemptions, exceptions and exclusions.

Indebtedness  shall mean any  indebtedness  of the  Borrower or any  Subsidiary,
whether or not  contingent,  in respect of borrowed money or evidenced by bonds,
notes  (including,  but not  limited to, the  Revolving  Notes),  debentures  or
similar instruments or letters of credit (or reimbursement agreements in respect
thereof) or  representing  the deferred and unpaid balance of the purchase price
of any property (including pursuant to capital leases), if and to the extent any
such indebtedness would appear as a liability upon a consolidated  balance sheet
prepared in  accordance  with GAAP,  and shall also  include,  to the extent not
otherwise  included,  the guaranty of any items included in this definition (but
only to the extent,  as of the date of determination  thereof,  of the amount of
the then  outstanding  indebtedness  so  guaranteed),  but shall not include any
trade debt incurred in the ordinary  course of business,  or bonds issued in the
ordinary course of business to secure obligations under workmen's  compensation,
social security or similar laws.

Interest Expense shall mean the aggregate  interest expense of the Borrower on a
consolidated  basis in respect of  Indebtedness,  determined in accordance  with
GAAP, including, without limitation,  amortization of original issue discount on
any  Indebtedness  and of all fees payable in connection  with the incurrence of
such  Indebtedness,  the interest portion of any deferred payment obligation and
the  interest  component  of any capital  lease  obligations,  all to the extent
included in interest expense in accordance with GAAP.

DSN:54248.4
                                       11

<PAGE>



Interest Period shall mean for any Eurodollar Rate Loan the period commencing on
the date of such Borrowing and ending on the last day of the period  selected by
the  Borrower  pursuant  to the  provisions  below.  The  duration  of each such
Interest  Period  shall be one,  two,  three or six months,  in each case as the
Borrower, in an appropriate Notice of Continuation or Notice of Conversion,  may
select; provided,  however, that the Borrower may not select any Interest Period
that ends  after the  Expiration  Date.  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 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.

Interest  Rate  Agreement  shall mean any interest  rate  protection  agreement,
interest rate future,  interest rate option,  interest rate swap,  interest rate
cap or other  interest rate hedge or  arrangement  under which the Borrower is a
party or beneficiary.

Internal  Revenue Code shall mean the Internal  Revenue Code of 1986, as amended
from time to time, and any successor  statute thereto and all final or temporary
rules and regulations promulgated thereunder and published, generally applicable
rulings entitled to precedential effect to the extent such rules, regulations or
rulings are effective and applicable hereto.

Internal  Revenue Service or IRS shall mean the United States  Internal  Revenue
Service and any successor agency.

Inventory  shall  mean  all  of  the  Borrower's  inventory,  including  without
limitation:   (i)  all  raw  materials,  work  in  process,  parts,  components,
assemblies,  supplies and materials used or consumed in the Borrower's business;
(ii) all goods, wares and merchandise,  finished or unfinished, held for sale or
lease; and (iii) all goods returned or repossessed by the Borrower.

Inventory  Sublimit shall mean the maximum  allowable  amount of Revolving Loans
made with respect to Eligible Inventory, which amount shall be the lesser of (i)
$38,500,000  and (ii)  fifty-five  percent (55%) of the  Borrowing  Base then in
effect,  provided,  however,  that for no more  than 120  days  (whether  or not
consecutive)  in each fiscal  year,  such  percentage  shall be increased at the
Borrower's request to sixty percent (60%) of the Borrowing Base then in effect.

Investment  shall mean any purchase or acquisition of stock or  Indebtedness  of
any Person, or any direct or indirect advance,  loan, other extension of credit,
capital  contribution or transfer of property to any Person.  In determining the
aggregate  amount of Investments  outstanding  at any  particular  time, (i) the
amount of any Investment  represented by a guaranty shall equal,  as of the date
of  determination  thereof,  the  amount of the then  outstanding  indebtedness,
liability or other  obligation to the extent so guaranteed;  (ii) there shall be
deducted in respect of each such  Investment any amount  received as a return of
capital (but only by repurchase,  redemption, retirement, repayment, liquidating
dividend  or  liquidating  distribution);  (iii)  there shall not be deducted in
respect of any Investment any amounts  received as earnings on such  Investment,
whether as dividends, interest or

DSN:54248.4
                                       12

<PAGE>



otherwise;  and (iv) there shall not be deducted  from the  aggregate  amount of
Investments any decrease in the market value thereof.

Issuing Bank shall mean  Deutsche Bank AG New York or other banking or financial
institution  issuing  Letters of Credit  that is  acceptable  to the Agent which
shall issue a Letter of Credit for the account of the Borrower.

Issuing  Bank Fees shall  have the  meaning  given to such term in  Section  5.7
hereof.

Lender shall have the meaning provided in the preamble to this Credit Agreement.

Letter of Credit  Fees shall mean the fees  payable to the Agent for the benefit
of the Agent and the Lenders by the  Borrower  under and pursuant to Section 5.7
of this Credit Agreement.

Letter of Credit Obligations shall mean, at any time, without  duplication,  the
sum of (i) the aggregate undrawn amount of all Letters of Credit  outstanding at
such time,  plus (ii) the  aggregate  amount of all  drawings  under  Letters of
Credit for which the  Issuing  Bank has not at such time been  reimbursed,  plus
(iii) the  aggregate  amount of all payments  made by each Lender to the Issuing
Bank  with  respect  to such  Lender's  participation  in  Letters  of Credit as
provided in Section 4.3 for which the Borrower  has not at such time  reimbursed
the Lenders, whether by way of a Revolving Loan or otherwise.

Letter of Credit  Request  shall have the meaning  given to such term in Section
4.4 hereof.

Letters of Credit  shall  mean all  letters of credit  (whether  documentary  or
stand-by and whether for the  purchase of  inventory,  equipment  or  otherwise)
issued by an  Issuing  Bank the  account  of the  Borrower  and all  amendments,
renewals, extensions or replacements thereof.

Lien(s) shall mean any lien, claim, charge, pledge,  security interest,  deed of
trust, mortgage, or other encumbrance.

Line of Credit shall mean the  aggregate  revolving  credit line extended by the
Lenders to the Borrower for  Revolving  Loans and Letters of Credit  pursuant to
and in accordance  with the terms of this Credit  Agreement,  in an amount up to
$90,000,000  as such  revolving  credit line may be reduced from time to time in
accordance with Section 3.4 hereof.

Loans shall mean the Revolving Loans made from time to time hereunder.

Majority  Lenders shall mean, at any time, those Lenders then owed or holding in
the aggregate a percentage equal to at least fifty-one  percent (51%) of the sum
of the then existing  aggregate  unpaid  principal amount of the Loans, the then
existing  aggregate  face amount of  outstanding  Letters of Credit and the then
existing aggregate undrawn amount of the Line of Credit.


DSN:54248.4
                                       13

<PAGE>



Material  Adverse  Effect  shall  mean a  material  adverse  effect  on (i)  the
business, prospects,  operations,  results of operations, assets, liabilities or
condition (financial or otherwise) of the Borrower and the Subsidiaries taken as
a whole, (ii) the Borrower's ability to perform its obligations under the Credit
Documents  to which it is a party,  or (iii) the ability of the Agent and/or the
Lenders to enforce rights and remedies of the Lenders hereunder.

Material  Contract shall mean any written contract or other written  arrangement
(other than any of the Credit  Documents),  to which the  Borrower or any of the
Subsidiaries is a party as to which the breach, nonperformance,  cancellation or
failure  to renew by any party  thereto  has or is  reasonably  likely to have a
Material Adverse Effect.

Multiemplover  Plan  shall  mean a  "multiemployer  plan" as  defined in Section
4001(a)(3)  of ERISA and (i) which is, or within the  immediately  preceding six
(6) years was,  contributed  to by the  Borrower,  any  Subsidiary  or any ERISA
Affiliate or (ii) with respect to which the Borrower or any Subsidiary may incur
any liability.

Net Income shall mean, for any fiscal period,  the net income of the Borrower on
a consolidated  basis, as reflected on the Financial  Statements of the Borrower
for such period.

New Senior Notes shall mean the  Borrower's  ten percent (10%) senior  unsecured
notes due ten years after  issuance in the aggregate  principal  amount of up to
$155 million, issued pursuant to the New Senior Note Indenture.

New Senior Note Indenture  shall mean that certain  Indenture,  dated as of June
20, 1997, between the Borrower and the Bank of New York, as Trustee, pursuant to
which the New Senior Notes were issued.

Notice of  Borrowing  shall have the  meaning  given to such term in Section 3.3
hereof.

Notice of Continuation  shall have the meaning given to such term in Section 5.3
hereof.

Notice of  Conversion  shall have the meaning  given to such term in Section 5.3
hereof.

Obligations  shall mean the  unpaid  principal  of and  interest  on  (including
interest  accruing on or after the filing of any petition in bankruptcy,  or the
commencement of any insolvency,  reorganization or like proceeding,  relating to
the Borrower,  whether or not a claim for post-filing or post-petition  interest
is allowed in such proceeding) the Revolving Notes, any reimbursement obligation
or   indemnity  of  the  Borrower  on  account  of  Letters  of  Credit  or  any
accommodation  extended with respect to  applications  for Letters of Credit and
all other  obligations and liabilities of the Borrower to the Agent, the Issuing
Bank or to the Lenders, whether direct or indirect,  absolute or contingent, due
or to become due, or now existing or hereafter incurred,  which may arise under,
out of, or in connection  with, the Credit  Agreement,  the Notes, and any other
Credit Document to which the Borrower is a party,  and each other obligation and
liability, whether direct or indirect, absolute or

DSN:54248.4
                                       14

<PAGE>



contingent, due or to become due, or now existing or hereafter incurred, whether
on  account  of  principal,  interest,  fees,  indemnities,  costs  or  expenses
(including, without limitation, all reasonable fees and disbursements of counsel
to the Agent,  the Issuing Bank or the Lenders)  that are required to be paid by
the Borrower to the Lenders, the Agent or the Issuing Bank pursuant to the terms
of the Credit Agreement or any of the other Credit Documents.

Other Taxes shall have the meaning given to such term in Section 3.8 hereof.

PBGC  shall  mean  the  Pension  Benefit  Guaranty  Corporation  and any  Person
succeeding to the functions thereof.

Person  shall  mean any  individual,  sole  proprietorship,  partnership,  joint
venture,   trust,   unincorporated   organization,   association,   corporation,
institution,  entity,  party or government  (including  any division,  agency or
department thereof),  and, as applicable,  the successors,  heirs and assigns of
each.

Plan shall mean any employee benefit plan, program or arrangement,  whether oral
or written,  maintained or contributed to by the Borrower or any Subsidiary,  or
with respect to which the Borrower or any Subsidiary may incur liability.

Prime Lending Rate shall mean the rate which Deutsche Bank AG New York announces
from time to time as its prime lending rate, as in effect from time to time. The
Prime Lending Rate is a reference  rate and does not  necessarily  represent the
lowest or best rate actually charged to any customer.  Deutsche Bank AG New York
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate.

Prime Rate Loan shall mean a Loan that bears interest as provided in Section 5.2
hereof.

Proportionate  Share  shall  mean,  with  respect  to  any  Lender,  a  fraction
(expressed as a percentage),  the numerator of which shall be the amount of such
Lender's  Revolving Credit  Commitment and the denominator of which shall be the
aggregate of all of the Revolving Credit Commitments.

Purchase  Money Liens shall mean liens on any item of real or personal  property
(other than Inventory)  acquired after the Closing Date, provided that: (i) each
such lien shall attach only to the property to be acquired;  (ii) a  description
is furnished to the Agent for any  property so acquired,  the purchase  price of
which is greater than $500,000;  and (iii) the debt incurred in connection  with
such  acquisitions  shall not exceed the  amount of the  purchase  price of such
items of real or personal property (other than Inventory) then being financed.


Reduced Rate shall have the meaning given to such term in Section 3.8(e) hereof,
relating to backup withholding tax.


DSN:54248.4
                                       15

<PAGE>



Regulation  D shall mean  Regulation  D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto.

Release  shall  mean  disposing,  discharging,   injecting,  spilling,  pumping,
leaking, leaching,  dumping,  emitting,  escaping,  emptying,  seeping, placing,
pouring  and the  like,  into or upon any land or  water  or air,  or  otherwise
entering into the environment.

Reportable Event shall mean any of the events described in Section 4043 of ERISA
and the regulations thereunder, other than such events with respect to which the
30-day notice  requirement has been expressly  waived under such  regulations or
has been expressly waived in writing by the DOL or its staff members.

Required  Lenders shall mean, at any time, those Lenders then owed or holding in
the aggregate a percentage  equal to at least  sixty-seven  percent (67%) of the
sum of the then existing  aggregate  unpaid  principal  amount of the Loans, the
then existing  aggregate  face amount of  outstanding  Letters of Credit and the
then existing aggregate undrawn amount of the Line of Credit.

Restricted  Subsidiaries shall mean,  collectively,  W R Activities Corp., a New
York corporation and Rose Trucking Corp., a New Jersey corporation.

Retiree  Health Plan shall mean an "employee  welfare  benefit  plan" within the
meaning  of Section  3(l) of ERISA  that  provides  benefits  to  persons  after
termination of employment, other than as required by Section 601 of ERISA.

Revolving  Credit  Commitment  of any  Lender  shall  mean the  amount set forth
opposite  such  Lender's name on Annex I, as such annex may be amended from time
to time, under the heading "Revolving Credit Commitment",  as such amount may be
reduced from time to time pursuant to the terms of this Credit Agreement.

Revolving  Loan Account shall have the meaning given to such term in Section 3.1
hereof.

Revolving Loans shall have the meaning given to such term in Section 3.2 hereof,
any of which Loans may be a Eurodollar Rate Loan or a Prime Rate Loan.

Revolving Note shall mean a promissory note of the Borrower payable to the order
of any Lender,  in the form of Exhibit A, evidencing the aggregate  indebtedness
of the Borrower to such Lender  resulting from the Revolving  Loans made by such
Lender or acquired by such Lender from another  Lender  pursuant to Section 11.7
hereof.

Rolling Stock shall mean the Borrower's  trucks,  vehicles,  transportation  and
warehouse equipment, and other rolling stock.


DSN:54248.4
                                       16

<PAGE>



Security  Agreement shall mean the License and Security  Agreement,  dated as of
February 10, 1993,  between the Agent and the Borrower,  in the form attached as
Exhibit H.

Settlement  Period  shall have the  meaning  given to such term in  Section  3.3
hereof.

Subordinated Indebtedness shall mean Indebtedness of the Borrower (i) the terms,
conditions, rates of interest, representations, warranties, covenants, events of
default  and other  provisions  of which are  satisfactory  to the Agent and the
Required  Lenders  and  (ii) the  right to  repayment  of  which is  junior  and
subordinate  to the prior  payment and  satisfaction  in full,  in cash,  of the
Borrower's  Obligations,  by means of a  subordination  agreement or pursuant to
subordination  provisions,  in  either  case in form  and  substance  reasonably
satisfactory to the Agent and the Required Lenders.

Subsidiary  shall mean as to any Person,  a  corporation,  partnership  or other
entity of which shares of stock or other  ownership  interests  having  ordinary
voting power  (other than stock or such other  ownership  interests  having such
power only by reason of the happening of a  contingency)  to elect a majority of
the board of directors or other  managers of such  corporation,  partnership  or
other  entity are at the time owned,  or the  management  of which is  otherwise
controlled, directly or indirectly through one or more intermediaries,  or both,
by such Person. Unless otherwise qualified,  all references to a "Subsidiary" or
to  "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.

Tax Transferee shall have the meaning given to such term in Section 3.8 hereof.

Taxes shall have the meaning given to such term in Section 3.8 hereof.

Termination  Event shall mean (i) a Reportable Event with respect to any Benefit
Plan or Multiemployer Plan; (ii) the withdrawal of the Borrower,  any Subsidiary
or any ERISA  Affiliate  from a Benefit  Plan  during a plan year in which  such
entity was a "substantial  employer" as defined in Section  4001(a)(2) of ERISA;
(iii)  the  providing  of notice of  intent  to  terminate  a Benefit  Plan in a
distress termination described in Section 4041(c) of ERISA; (iv) the institution
by the PBGC of  proceedings to terminate a Benefit Plan or  Multiemployer  Plan;
(v) any event or condition that is reasonably  likely to (a) constitute  grounds
under  Section 4042 of ERISA for the  termination  of, or the  appointment  of a
trustee to administer,  any Benefit Plan or Multiemployer Plan, or (b) result in
termination of a Multiemployer  Plan pursuant to Section 4041A of ERISA; or (vi)
the partial or complete  withdrawal within the meaning of Sections 4203 and 4205
of  ERISA,  of the  Borrower,  any  Subsidiary  or any  ERISA  Affiliate  from a
Multiemployer Plan.

Trademarks shall mean all present and hereafter acquired or created  tradenames,
trademarks  and service marks owned or used by the Borrower,  including  without
limitation  all Trademarks  registered by the Borrower with the U.S.  Patent and
Trademark  Office,  or with  respect  to which  such  registration  is or may be
pending.


DSN:54248.4
                                       17

<PAGE>



Type shall mean,  with  respect to any Loan,  whether  such Loan is a Eurodollar
Rate Loan or a Prime Rate Loan.

Unused Availability shall mean, at any time of determination,  after taking into
account all Loans made and to be made,  and all Letters of Credit  issued and to
be issued, on or before the close of business on the date of such determination,
the excess of (i) the lesser of the Borrowing  Base or the Line of Credit,  over
(ii) the sum of the unpaid principal amount of the outstanding  Loans and Letter
of Credit Obligations.

Unused Line Fee shall have the meaning given to such term in Section 5.6 hereof.

     1.2  Accounting  Terms and  Determinations.  Unless  otherwise  defined  or
specified  herein,  all accounting  terms used in this Credit Agreement shall be
construed in accordance with GAAP, applied on a basis consistent in all material
respects with the Financial  Statements  delivered to the Agent on or before the
Closing  Date.  All  accounting   determinations  for  purposes  of  determining
compliance with Sections 8.1 through 8.4 hereof shall be made in accordance with
GAAP as in effect on the Closing Date and applied on a basis  consistent  in all
material respects with the audited Financial  Statements  delivered to the Agent
on or before the Closing Date. The Financial Statements required to be delivered
hereunder from and after the Closing Date, and all financial  records,  shall be
maintained in accordance  with GAAP. If GAAP shall change from the basis used in
preparing the audited Financial  Statements  delivered to the Agent on or before
the Closing Date, the certificates  required to be delivered pursuant to Section
7.1 demonstrating  compliance with the covenants  contained herein shall include
calculations  setting forth the  adjustments  necessary to  demonstrate  how the
Borrower is in  compliance  with the financial  covenants  based upon GAAP as in
effect on the Closing Date. If the Borrower shall change its method of inventory
accounting from the weighted average cost, on a first-in first-out method to the
last-in-first-out  method,  all calculations  necessary to determine  compliance
with the financial covenants herein shall be made as if such method of inventory
accounting had not been so changed.

     1.3 Other  Defined  Terms.  Terms not  otherwise  defined  herein which are
defined  in the  Uniform  Commercial  Code as in effect in the State of New York
(the "Code") shall have the meanings given them in the Code. The words "hereof",
"herein" and  "hereunder"  and words of similar  import when used in this Credit
Agreement  shall  refer  to this  Credit  Agreement  as a  whole  and not to any
particular  provision  of this  Credit  Agreement,  and  references  to Article,
Section,  Annex,  Schedule,  Exhibit and like  references are references to this
Credit Agreement unless otherwise specified.

ARTICLE 2. Conditions Precedent.  The obligation of the Lenders to make any Loan
hereunder,  and the obligation of the Issuing Bank to issue any Letter of Credit
hereunder,  are subject to the satisfaction of, or waiver of,  immediately prior
to or concurrently  with the making of any such Loan or the issuance of any such
Letter of Credit,  the  conditions  precedent  hereinafter  set forth,  and,  in
addition to the  foregoing,  the  obligation  of the Lenders to make the initial
Loan  hereunder  is subject to the receipt by the Agent and the  Lenders,  on or
before the Closing Date, of each of the agreements,

DSN:54248.4
                                       18

<PAGE>



opinions, reports, approvals, consents, certificates, financial information, and
other documents set forth on the Closing Document List attached as Schedule A:

          (a) The  representations  and  warranties  contained  in  this  Credit
Agreement  and in each other  Credit  Document to which the  Borrower is a party
shall be true and correct in all material respects on and as of the date of such
Loan or issuance of such Letter of Credit as though made on and as of such date,
except to the extent that such  representations and warranties  expressly relate
solely to an earlier  date (in which case such  representations  and  warranties
shall have been true and accurate on and as of such earlier date);

          (b) No event shall have  occurred and be  continuing,  or would result
from such Loan or the issuance of any Letter of Credit or the application of the
proceeds thereof,  which would constitute a Default or an Event of Default under
this Credit Agreement;

          (c) No Material  Adverse Effect shall have occurred and be continuing;
and

          (d) With respect to the issuance of any Letter of Credit,  none of the
events set forth in Section 4.1 hereof has occurred and is  continuing  or would
result from the issuance of such Letter of Credit.

ARTICLE 3.   Revolving Loans.

     3.1 Commitment and Delivery of Revolving Notes. On the terms and conditions
set forth in this Credit Agreement, each of the Lenders severally agrees to lend
to the  Borrower at any time or from time to time on or after the  Closing  Date
and  before  the  Expiration  Date,  such  Lender's  Proportionate  Share of the
Revolving  Loans as may be requested or deemed  requested by the  Borrower.  The
Borrower hereby agrees to execute and deliver to each of the Lenders a Revolving
Note, in the form of Exhibit A attached,  to evidence the maximum Revolving Loan
which may be  extended  to the  Borrower by such  Lender.  The actual  principal
amount  outstanding  under the  Revolving  Notes at any time shall  equal and be
determined  in accordance  with the then  outstanding  principal  balance in the
Revolving  Loan account  established by the Agent on its books in the Borrower's
name (the "Revolving Loan Account"), absent manifest error.

     3.2 Determination of Borrowing Base.

          (a) Loans and  advances to the Borrower  hereunder  (each a "Revolving
Loan"; collectively the "Revolving Loans") shall not in the aggregate exceed the
lesser of:

               (i) the Line of Credit then in effect  minus the Letter of Credit
Obligations; and

               (ii) the amount then equal to:


DSN:54248.4
                                       19

<PAGE>



                    (A)  eighty   percent   (80%)  of  the   Eligible   Accounts
Receivable, plus

                    (B) sixty percent (60%) of the Eligible Inventory, minus

                    (C) the Letter of Credit Obligations,

provided  that at no time may the  aggregate  loans made  against  the  Eligible
Inventory of the Borrower exceed the Inventory  Sublimit.  The amount calculated
from  time to  time in  accordance  with  clause  (ii)  (A)  and  (B)  above  is
hereinafter referred to as the "Borrowing Base."

          (b)  The  Agent  at any  time,  in the  exercise  of its  commercially
reasonable judgment,  on not less than ten (10) days prior written notice to the
Borrower,  shall be  entitled to (i)  establish  or  increase  reserves  against
Eligible Accounts Receivable and Eligible Inventory of the Borrower, (ii) reduce
the advance  rates  hereunder and (iii)  increase the  standards of  eligibility
hereunder,  to  reflect  the  Agent's  assessment  of  the  performance  of  the
Collateral and general credit  considerations then affecting the Borrower.  With
the prior  written  consent of the  Required  Lenders the Agent may increase the
advance  rates  under this  Credit  Agreement.  The Agent may,  but shall not be
required to, rely on each Borrowing Base  Certificate and any other schedules or
reports delivered to the Agent in connection  herewith,  in determining the then
eligibility of Accounts  Receivable and Inventory;  and reliance  thereon by the
Agent  from time to time  shall not be deemed to limit the right of the Agent to
revise  advance  rates or standards of  eligibility  as provided in this Section
3.2(b).

     3.3 Borrowings of Revolving Loans.

          (a) Other than as provided in subsection  3.3(b),  Borrowings shall be
made on notice from the  Borrower to the Agent,  given not later than 12:00 noon
(New  York  City  time) on the  Business  Day on which  the  proposed  Borrowing
consisting of Prime Rate Loans is requested to be made and on the third Business
Day prior to the date of any proposed  Borrowing  consisting of Eurodollar  Rate
Loans is requested to be made.

               (i) Each Notice of Borrowing  shall be given by either  telephone
or facsimile  transmission,  and, if by telephone,  confirmed in writing, in the
form attached as Exhibit F (the "Notice of Borrowing"). Each Notice of Borrowing
shall be irrevocable by and binding on the Borrower.

               (ii) In its Notice of Borrowing,  the Borrower may request one or
more  Borrowings on a single day. Each such Borrowing  shall,  unless  otherwise
specifically  provided herein,  consist entirely of Loans of the same Type. Each
Borrowing  consisting of Eurodollar  Rate Loans shall be in an aggregate  amount
for all Lenders of not less than $4,000,000 or an integral  multiple of $100,000
in excess thereof, and each Borrowing consisting of Prime Rate Loans shall be in
an aggregate amount for all Lenders of not less than $250,000.  The right of the
Borrower to choose Eurodollar Rate Loans is subject to the provisions of Section
5.3(c).

DSN:54248.4
                                       20

<PAGE>




               (iii) The Agent shall give to each Lender  prompt  notice of each
Notice of Borrowing by  telephone  or by facsimile  transmission.  No later than
3:00 P.M.  New York City time on the date of receipt of each Notice of Borrowing
(unless  such Notice of  Borrowing  specifies  the  Closing  Date as the date of
Borrowing,  in which case no later  than  11:00  A.M.  New York City time on the
Closing Date), each Lender will make available for the account of its applicable
lending  office  set forth on Annex I, to the Agent at the  address of the Agent
set forth on Annex I, in immediately available funds, its Proportionate Share of
such Borrowing  requested to be made.  Unless the Agent shall have been notified
by any Lender prior to the date of Borrowing that such Lender does not intend to
make  available  to the Agent its  portion of the  Borrowing  to be made on such
date,  the Agent may assume that such Lender will make such amount  available to
the Agent at the end of the  Settlement  Period (as defined below) and the Agent
may,  in  reliance  upon  such  assumption,  make  available  the  amount of the
Borrowing to be provided by such Lender.

               (iv) Provided that the  conditions  set forth in Article 2 hereof
for such  Borrowing are fulfilled,  the Agent will make such funds  available to
the  Borrower  at the  account  specified  by the  Borrower  in such  Notice  of
Borrowing.

          (b) The  Borrower has informed the Agent that from time to time it may
open and maintain with various  depositary  institutions  (each a  "Disbursement
Bank") one or more checking  accounts  (each a  "Disbursement  Account") for the
purpose of paying trade  payables,  and other  operating  expenses.  The Lenders
hereby  instruct  the Agent,  and so long as the  conditions  for  Borrowing  in
Article 2 remain  satisfied,  the Agent,  on behalf of the Lenders may make, but
shall not be required to make,  Revolving  Loans to cover checks written by (and
other disbursements of) the Borrower on the Disbursement Accounts. Advice from a
Disbursement  Bank of amounts  required  to cover  checks  written  on, or other
disbursements  from, the  Disbursement  Account  maintained by the Borrower with
such  Disbursement  Bank will be deemed  sufficient  notice of  Borrowing.  Such
Borrowings  shall be of Prime  Rate  Loans  only and will not be  subject to the
minimum amount requirement of subsection 3.3(a)(ii).

          (c) In order to administer the Revolving Loans in an efficient  manner
and to minimize the transfer of funds between the Agent and the Lenders, so long
as the  conditions  for Borrowing in Article 2 remain  satisfied,  the Agent may
make, but shall not be required to make available, on behalf of the Lenders, the
full amount of all Revolving Loans requested or deemed requested by the Borrower
pursuant  to  subsections  3.3(a)  and  3.3(b),  without  in  either  event  the
requirement  of  giving  each  Lender  prior  notice of the  proposed  Borrowing
pursuant to subsection 3.3(a)(iii).

               (i) If the Agent shall have advanced Revolving Loans on behalf of
the Lenders,  as provided in this subsection 3.3(c), the amount of each Lender's
Proportionate  Share of  Revolving  Loans shall be computed  weekly  rather than
daily and shall be  adjusted  upward or  downward  on the basis of the amount of
outstanding Revolving Loans as of 5:00 P.M. (New York City time) on the Business
Day immediately preceding the date of each computation; provided,

DSN:54248.4
                                       21

<PAGE>



however,  that the Agent retains the absolute  right at any time or from time to
time to make the  aforedescribed  adjustments  at intervals  more  frequent than
weekly.  The Agent shall  deliver to each of the  Lenders  after the end of each
week, or such lesser period or periods as the Agent shall  determine,  a summary
statement  of the amount of  outstanding  Revolving  Loans for such period (such
week or lesser  period or periods being  hereafter  referred to as a "Settlement
Period").  If the  summary  statement  is sent by the Agent and  received by the
Lenders  prior to 12:00  Noon (New York City time)  each  Lender  shall make the
transfers described in the next succeeding sentence no later than 3:00 P.M. (New
York City time) on the day such summary  statement was sent; and if such summary
statement is sent by the Agent and received by the Lenders after 12:00 Noon (New
York City time),  each Lender shall make such  transfers no later than 3:00 P.M.
(New York City time) on the next  succeeding  Business Day. If at the end of any
Settlement Period, the amount of a Lender's Proportionate Share of the Revolving
Loans is more than such Lender's  Proportionate  Share of the Revolving Loans at
the end of the previous  Settlement Period,  such Lender shall forthwith (but in
no event later than the time set forth in the next preceding  sentence) transfer
to the Agent by wire transfer in immediately  available  funds the amount of the
increase;  and,  on the other  hand,  if the amount of a Lender's  Proportionate
Share of the Revolving  Loans at the end of any  Settlement  Period is less than
the amount of such Lender's Proportionate Share of Revolving Loans at the end of
the  previous  Settlement  Period,  the Agent shall  forthwith  transfer to such
Lender  by wire  transfer  in  immediately  available  funds  the  amount of the
decrease.  The obligation of each of the Lenders to transfer such funds shall be
irrevocable and  unconditional and without recourse to or warranty by the Agent.
Each of the Agent  and the  Lenders  agree to mark  their  respective  books and
records  at the end of each  Settlement  Period to show at all times the  dollar
amount of their  respective  Proportionate  Shares of the outstanding  Revolving
Loans.

               (ii) To the  extent  that the  Agent  has  made any such  amounts
available and the settlement  described above shall not yet have occurred,  upon
repayment of Revolving  Loans by the Borrower,  the Agent may apply such amounts
repaid  directly to the amounts  made  available  by the Agent  pursuant to this
subsection 3.3(c).

               (iii) Because the Agent on behalf of the Lenders may be advancing
and/or may be repaid  Revolving  Loans prior to the time when the  Lenders  will
actually  advance  and/or be repaid  Revolving  Loans,  interest with respect to
Revolving  Loans shall be payable by the Borrower and  allocated by the Agent to
each Lender  (including  the Agent) in  accordance  with the amount of Revolving
Loans  actually  advanced  by and repaid to each  Lender  (including  the Agent)
during each Settlement  Period and shall accrue from and including the date such
Loans are advanced by the Agent to but  excluding the date such Loans are repaid
by the  Borrower in  accordance  with  Section  3.4 or  actually  settled by the
applicable Lender as described in this Section 3.3.

               (iv) The Agent may advance funds as described in this Section 3.3
so long as the Agent shall not have  received  prior to such  Borrowing:  (A) an
officers'  certificate  from the  Borrower  under  Section  7.1  indicating  the
existence  of a Default or Event of Default  which shall not have been waived by
the  Majority  Lenders  pursuant  to  Section  9.2  hereof,  or (B) a Notice  of
Borrowing  stating that the conditions to the making of the requested Loans have
not been satisfied,

DSN:54248.4
                                       22

<PAGE>



unless the Majority  Lenders shall have determined  otherwise,  or (C) a written
notice from the Majority Lenders,  received by the Agent on or before 10:00 A.M.
(New York City time) on the date of the proposed Borrowing,  that the conditions
to such Borrowing have not been satisfied.

          (d) If the amounts  described in this Section 3.3 are not in fact made
available to the Agent by a Lender (such Lender being hereinafter referred to as
a  "Defaulting  Lender")  and the Agent has made such  amount  available  to the
Borrower,  the Agent shall be entitled to recover such  corresponding  amount on
demand from such Defaulting  Lender. If such Defaulting Lender does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower and the Borrower shall immediately (but in no event
later than five Business Days after such demand) pay such  corresponding  amount
to the Agent.  The Agent shall also be entitled to recover from such  Defaulting
Lender and the Borrower interest on such corresponding amount in respect of each
day from the date such  corresponding  amount was made available by the Agent to
the Borrower to the date such corresponding amount is recovered by the Agent, at
a rate per annum  equal to either  (i) if paid by such  Defaulting  Lender,  the
overnight  Federal  Funds  Rate  or  (ii) if  paid  by the  Borrower,  the  then
applicable  rate of  interest,  calculated  in  accordance  with  Section 5.1 or
Section 5.2 hereof.  Nothing  herein  shall be deemed to relieve any Lender from
its obligation to fulfill its  commitments  hereunder or to prejudice any rights
which the  Borrower  may have  against  any Lender as a result of any default by
such Lender hereunder.

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

          (f) The  Revolving  Loans made by each Lender  shall be  evidenced  by
Revolving Notes with appropriate insertions as to the date and principal amount,
payable to the order of each Lender.

          (g)  Each  Lender  shall  be  entitled  to earn  interest  at the then
applicable rate of interest,  calculated in accordance with Article 5 hereof, on
outstanding  Revolving  Loans for each day during  which such Lender has in fact
funded such Revolving Loans with its own cash (as opposed to any portion of such
Revolving  Loans,  the entire  principal  amount of which has been funded by the
Agent  with its own cash on  behalf  of all  Lenders,  until  the Agent has been
reimbursed therefor pursuant to Section 3.3(c) hereof).

          (h)  Notwithstanding  the  obligation  of the Borrower to send written
confirmation of a Notice of Borrowing made by telephone if and when requested by
the Agent,  in the event that the Agent  agrees to accept a Notice of  Borrowing
made by telephone,  such telephonic  Notice of Borrowing shall be binding on the
Borrower  whether  or not  written  confirmation  is  sent  by the  Borrower  or
requested by the Agent.  The Agent may act prior to the receipt of any requested
written confirmation,  without any liability  whatsoever,  based upon telephonic
notice  believed  by the  Agent in good  faith to be from  the  Borrower  or its
agents. The Agent's records of the terms of any

DSN:54248.4
                                       23

<PAGE>



telephonic  Notices of  Borrowing  shall be  conclusive  on the Borrower and the
Lenders in the absence of gross negligence or willful  misconduct on the part of
the Agent in connection therewith.

          (i) Notwithstanding anything contained herein to the contrary, so long
as any Lender shall be in default in its  obligation  to fund its  Proportionate
Share of any Loan or shall have  rejected its  Commitment,  then for purposes of
voting or  consenting  to matters  with  respect to the Credit  Documents,  such
Lender  shall  be  deemed  not to be a  "Lender"  hereunder  and  such  Lender's
Commitment,  and the aggregate  unpaid  principal amount of such Lender's Loans,
shall be deemed to be zero (0),  unless and until (x) the Loans and all interest
thereon have been paid in full,  (y) such failure to fulfill its  obligation  to
fund is cured and such Lender shall have paid, as and to the extent  provided in
this Section 3.3, to the  applicable  party,  if any,  interest on the amount of
funds that such Lender failed to timely fund or (z) the  Obligations  under this
Agreement  shall have been  declared  or shall have become  immediately  due and
payable. No Commitment of any Lender shall be increased or otherwise affected by
any such failure or rejection by any Lender.

     3.4 Mandatory Payment: Reduction of Commitments.

          (a) The aggregate  balance of Revolving Loans and all Letter of Credit
Obligations  outstanding  at any  time  in  excess  of the  Borrowing  Base,  as
reflected  in the  most  recent  Borrowing  Base  Certificate  delivered  by the
Borrower  pursuant  to  Section  7.1(e)  and  accepted  by the  Agent,  shall be
immediately due and payable without the necessity of any demand.

          (b) On the Expiration  Date, the Revolving  Credit  Commitment of each
Lender shall automatically reduce to zero and may not be reinstated.

          (c) The Borrower  may reduce the Line of Credit,  in whole or in part,
at any time and from time to time without premium or penalty; provided, however,
that each such reduction must be in an amount not less than  $1,000,000  (and in
increments of $100,000 thereafter);  and provided, further, that if the Borrower
seeks to reduce the Line of Credit to an amount less than $25,000,000,  then the
Line of Credit shall be reduced to zero,  and the  Revolving  Credit  Commitment
shall be terminated.

     3.5 Payments and Computations.

          (a) The  Borrower  shall  make each  payment  hereunder  and under the
Revolving  Notes not later  than 2:00 P.M.  (New York City time) on the day when
due.  Payments  made  directly by the Borrower  shall be in U.S.  Dollars to the
Agent at its address referred to in Section 11.5 hereof in immediately available
funds.  Not later than one Business  Day after such  payment has been made,  the
Agent  will  cause to be  distributed  like  funds  relating  to the  payment of
principal,  interest,  Fees or Expenses (other than amounts payable to the Agent
to reimburse the Agent and the Issuing Bank for fees and expenses payable solely
to them  pursuant to Article 5 hereof) or Expenses  ratably to the Lenders,  and
like funds  relating to the payment of any other amount  payable to such Lender,
in each case to be distributed  and applied in accordance with the terms of this
Section 3.5. The Borrower's

DSN:54248.4
                                       24

<PAGE>



obligations  to the Lenders with respect to such payments shall be discharged by
making such payments to the Agent  pursuant to this Section 3.5 or if not timely
paid, may be added to the principal amount of the Revolving Loans outstanding.

          (b) All amounts  received by the Borrower from any account debtor with
respect to Accounts  shall upon receipt be deposited  into a Depositary  Account
(as defined below).

               (i) The Borrower  and the Agent shall enter into (a)  three-party
agreements each in the form of Exhibit B (the "Blocked Account Agreements") with
certain  financial  institutions  selected by the Borrower and acceptable to the
Agent (the "Blocked Account Banks") and (b) a three-party  agreement in the form
of Exhibit Q hereto (the  "Concentration  Account Agreement") with Deutsche Bank
AG New York.

                    (A) The Blocked  Account  Agreements  shall  provide,  among
other things, for the following:

               (1) The Agent will open an account at each  Blocked  Account Bank
(each a "Depositary Account").

               (2) All  receipts  received in the  Depository  Account  shall be
transferred  at the end of each day to the  Concentration  Account  (as  defined
below).

          (c) Upon the  terms and  subject  to the  conditions  set forth in the
Blocked  Account  Agreements,  all  available  amounts  held  in the  Depositary
Accounts shall be wired each Business Day into the account established  pursuant
to the  Concentration  Account  Agreement (the  "Concentration  Account"),  and,
subject to the terms and conditions of the Concentration Account Agreement,  all
available  funds in the  Concentration  Account  shall be  transferred  on every
Business  Day to an  account  (the  "BT  Account")  maintained  by the  Agent at
Deutsche Bank AG New York; provided, that, at any time after the occurrence of a
Default or an Event of Default,  the Agent may, unless  otherwise  instructed by
the Majority Lenders,  transmit good funds received in the Concentration Account
to  the  Disbursement   Accounts  and  any  funds  not  so  transmitted  to  the
Disbursement  Accounts may be  transferred  to the BT Account and applied at the
end of each day as set forth in Section 3.5(d) below.

          (d) The Agent shall direct all funds received in the BT Account during
each day to reduce the then principal  balance of the Revolving Loans, or, after
the occurrence and during the  continuance of (i) a Default  arising solely from
the  failure to pay any  interest  when due  hereunder,  to pay all  accrued but
unpaid interest, first, all Fees and Expenses, second, and all principal, third,
or (ii) any other Default or any Event of Default, to pay all Fees and Expenses,
accrued but unpaid interest, or principal,  in any order determined by the Agent
in its sole discretion.

          (e) After the  occurrence  and during the  continuance  of an Event of
Default,  the Borrower hereby authorizes each Lender to charge from time to time
against any or all of the

DSN:54248.4
                                       25

<PAGE>



Borrower's  accounts with such Lender any of the Obligations  which are then due
and payable.  Each Lender receiving any payment as a result of charging any such
account shall promptly  notify the Agent thereof and make such  arrangements  as
the Agent shall request to share the benefit  thereof in accordance with Section
3.10 hereof.

     3.6  Maintenance  of Account.  The Agent  shall  maintain an account on its
books in the name of the Borrower in which the Borrower will be charged with all
loans and  advances  made by the Lenders to the  Borrower or for the  Borrower's
account,  including the Revolving  Loans,  the Letter of Credit  Obligations and
with any other Obligations, including any and all costs, expenses and attorney's
fees which the Agent may incur in  connection  with the  exercise  by or for the
Lenders of any of the rights or powers  herein  conferred  upon the Agent (other
than in connection with any assignments or  participations  by any Lender) or in
the  prosecution  or  defense  of any action or  proceeding  by or  against  the
Borrower or the Lenders concerning any matter arising out of, connected with, or
relating to this Credit Agreement or the Accounts,  or any Obligations  owing to
the Agent or the Lenders by the  Borrower.  The Borrower  will be  credited,  in
accordance with Section 3.5 above, with all amounts received by the Agent or the
Lenders from the Borrower or from others for the Borrower's account,  including,
as above set forth, all amounts received by the Agent in payment of Accounts. In
no  event  shall  prior  recourse  to any  Accounts  or  other  Collateral  be a
prerequisite  to the Agent's right to demand payment of any obligation  upon its
maturity.  Further,  it is  understood  that the Agent shall have no  obligation
whatsoever  to  perform  in  any  respect  any of the  Borrower's  contracts  or
obligations relating to the Accounts.

     3.7 Statement of Account.  After the end of each month the Agent shall send
the Borrower a statement showing the accounting for the charges, loans, advances
and other  transactions  occurring among and between the Agent,  the Lenders and
the Borrower during that month.  Absent manifest error,  the monthly  statements
shall be deemed  correct and binding upon the Borrower and shall  constitute  an
account stated among the Borrower, the Agent and the Lenders.

     3.8 Taxes.

          (a)  Any  and  all  payments  by the  Borrower  hereunder,  under  the
Revolving  Notes or under the  Letters  of Credit to or for the  benefit  of any
Lender which has complied  with  Section  3.8(e),  the Issuing Bank or the Agent
shall be made free and clear of and without deduction for any and all present or
future  taxes,  levies,  imposts,   deductions,   charges  or  withholdings  and
penalties,  interests and all other liabilities with respect thereto  ("Taxes"),
excluding,  (i) in the case of each such Lender,  the Issuing Bank or the Agent,
taxes  imposed  on its net  income  (including,  without  limitation,  any taxes
imposed on branch profits) and franchise taxes imposed on it by the jurisdiction
under the laws of which such Lender,  the Issuing Bank or the Agent (as the case
may be) is organized or any political  subdivision thereof,  (ii) in the case of
each such Lender, the Issuing Bank or the Agent, taxes imposed on its net income
(including,  without  limitation,  any taxes  imposed  on branch  profits),  and
franchise taxes imposed on it, by the jurisdiction of its applicable  lending or
other office or any  political  subdivision  thereof,  (iii) in the case of each
such Lender,  the Issuing  Bank and the Agent,  any Taxes that are in effect and
that would apply to a payment to such Lender,

DSN:54248.4
                                       26

<PAGE>



the Issuing Bank or Agent,  as  applicable,  as of the Closing Date, and (iv) if
any Person acquires any interest in this Credit Agreement, any Revolving Note or
Letter of Credit pursuant to the provisions  hereof,  or a Foreign Lender or the
Agent changes the office in which the Loan is made, accounted for or booked (any
such person,  or such Foreign Lender or the Agent in that event,  being referred
to as a "Tax  Transferee") , any Taxes to the extent that they are in effect and
would  apply  to a  payment  to  such  Tax  Transferee  as of  the  date  of the
acquisition  of such interest or change in office,  as the case may be (all such
nonexcluded  Taxes being  hereinafter  referred to as "Covered  Taxes").  If the
Borrower shall be required by law to deduct any Covered Taxes from or in respect
of any sum payable  hereunder,  under any Revolving  Note or under any Letter of
Credit to or for the benefit of any Lender, the Issuing Bank or the Agent or any
Tax  Transferee,  (A) the sum payable  shall be increased as may be necessary so
that after making all required deductions of Covered Taxes (including deductions
of Covered Taxes  applicable to additional  sums payable under this Section 3.8)
such Lender, the Issuing Bank, the Agent or such Tax Transferee, as the case may
be,  receives  an amount  equal to the sum it would  have  received  had no such
deductions  been made, (B) the Borrower  shall make such  deductions and (C) the
Borrower  shall  pay the  full  amount  so  deducted  to the  relevant  taxation
authority or other authority in accordance with applicable law.

          (b) In  addition,  the  Borrower  agrees to pay any  present or future
stamp, documentary,  excise, privilege,  intangible or similar levies that arise
at any time or from  time to time (i) from any  payment  made  under any and all
Credit Documents to which the Borrower is a party, (ii) from the transfer of the
rights of the  Lender  under any Credit  Documents  to which the  Borrower  is a
party, to any transferee other than any voluntary transfer of any such rights by
any Lender or (iii) from the  execution  or delivery by the Borrower of, or from
the filing or recording  or  maintenance  of, or  otherwise  with respect to the
exercise by the Agent or the Lenders of their rights  under,  any and all Credit
Documents (hereinafter referred to as "Other Taxes").

          (c) The Borrower will  indemnify  each Lender,  the Issuing Bank,  the
Agent,  and any Tax  Transferee for the full amount of (i) Covered Taxes imposed
on or with respect to amounts payable hereunder, (ii) other Taxes, and (iii) any
Taxes (other than covered Taxes imposed by any  jurisdiction  on amounts payable
under this Section  3.8) paid by such  Lender,  the Issuing Bank or the Agent or
such Tax Transferee,  as the case may be. Payment of this indemnification  shall
be made within 30 days from the date such Lender,  the Issuing Bank or the Agent
or Tax Transferee  certifies and sets forth in reasonable detail the calculation
thereof as to the amount and type of such Taxes. Any such certificate  submitted
by the Lender,  the Issuing Bank or Agent or Tax Transferee in good faith to the
Borrower shall,  absent manifest error, be final,  conclusive and binding on all
parties.

          (d) Within 30 days after having received a receipt of Covered Taxes or
Other Taxes,  the Borrower will furnish to the Agent, at its address referred to
in Section  11.5,  the  original  or a  certified  copy of a receipt  evidencing
payment thereof.

          (e) On or before the Closing Date,  each Foreign  Lender shall deliver
to the Agent and the Borrower (i) two valid,  duly completed  copies of IRS Form
1001 or 4224 or  successor  applicable  form,  as the case may be, and any other
required form, certifying in each case that such

DSN:54248.4
                                       27

<PAGE>



Foreign Lender is entitled to receive  payments  under this Credit  Agreement or
the Revolving Notes payable to it without deduction or withholding of any United
States federal income taxes or with such  withholding  imposed at a reduced rate
(the "Reduced  Rate"),  and (ii) a valid,  duly completed IRS Form W-8 or W-9 or
successor  applicable  form, as the case may be, to establish an exemption  from
United  States backup  withholding  or other  applicable  tax. Each such Foreign
Lender shall also  deliver to the Agent and the  Borrower two further  copies of
said Form 1001 or 4224 and W-8 or W-9, or successor  applicable  forms, or other
manner of required certification, as the case may be, on or before the date that
any such form  expires  or becomes  obsolete  or  otherwise  is  required  to be
resubmitted as a condition to obtaining an exemption from a required withholding
of United States federal  income tax or  entitlement to having such  withholding
imposed at the Reduced  Rate or after the  occurrence  of any event  requiring a
change in the most recent form  previously  delivered  by it to the Borrower and
the  Agent,  and such  extensions  or  renewals  thereof  as may  reasonably  be
requested by the Borrower  and the Agent,  certifying  (i) in the case of a Form
1001 or 4224 that such Foreign Lender is entitled to receive payments under this
Credit  Agreement  or the  Revolving  Notes  payable to it without  deduction or
withholding  of any  United  States  federal  income  taxes or such  withholding
imposed at the Reduced Rate,  unless in any such case any change in a tax treaty
to which the United States is a party, or any change in law or regulation of the
United States or official  interpretation thereof has occurred after the Initial
Funding Date and prior to the date on which any such delivery would otherwise be
required  that renders all such forms  inapplicable  or that would  prevent such
Foreign Lender from duly completing and delivering any such form with respect to
it, and such  Foreign  Lender  advises the Borrower and the Agent that it is not
capable of  receiving  payments  without any  deduction  or  withholding  at the
Reduced Rate, or (ii) in the case of a Form W8 or W-9, establishing an exemption
from United States backup or other applicable withholding tax.

          (f)  If a Tax  Transferee  that  is  organized  under  the  laws  of a
jurisdiction  outside of the United  States  acquires an interest in this Credit
Agreement or any Revolving  Note or a Foreign  Lender changes the office through
which Loans are made, accounted for or booked, the transferor, or the applicable
Foreign  Lender,  in the  case of a  change  of  office,  shall  cause  such Tax
Transferee to agree that, on or prior to the effective date of such  acquisition
or change, as the case may be, it will deliver to the Borrower and the Agent (i)
two  valid,  duly  completed  copies  of IRS  Form  1001 or  4224  or  successor
applicable form, as the case may be, and any other required form,  certifying in
each case that such Tax  Transferee is entitled to receive  payments  under this
Credit  Agreement  and the Revolving  Notes  payable to it without  deduction or
withholding of United States federal income tax or with such withholding imposed
at a  Reduced  Rate;  and (ii) a valid,  duly  completed  IRS Form W-8 or W-9 or
successor  applicable  form, as the case may be, to establish an exemption  from
United States backup  withholding or other  applicable  tax. Each Tax Transferee
that delivers to the Borrower and the Agent a Form 1001 or 4224, and Form W-8 or
W-9 and any  other  required  form,  pursuant  to the next  preceding  sentence,
further  undertakes to deliver two further  copies of the said Form 1001 or 4224
and Form W-8 or W-9, or successor  applicable forms, or other manner of required
certification,  as the case may be,  on or  before  the date  that any such form
expires or becomes  obsolete or  otherwise  is required to be  resubmitted  as a
condition to obtaining an exemption from a required withholding of United States
federal  income tax or  entitlement  to having such  withholding  imposed at the
Reduced Rate or after the occurrence of any event requiring a change

DSN:54248.4
                                       28

<PAGE>



in the most recent  form  previously  delivered  by it to the  Borrower  and the
Agent, and such extensions or renewals thereof as may reasonably be requested by
the  Borrower and the Agent,  certifying  (i) in the case of a Form 1001 or 4224
that such Tax  Transferee is entitled to receive  payments  under this Agreement
without  deduction or  withholding  of any United States federal income taxes or
with such withholding  imposed at the Reduced Rate, unless any change in treaty,
law or  regulation  or official  interpretation  thereof has occurred  after the
effective date of such  acquisition or change and prior to the date on which any
such  delivery  would   otherwise  be  required  that  renders  all  such  forms
inapplicable  or that would prevent such Tax Transferee from duly completing and
delivering any such form with respect to it, and such Tax Transferee advises the
Borrower and the Agent that it is not capable of receiving  payments (a) without
any deduction or  withholding  of United States  federal  income tax or (b) with
such withholding at the Reduced Rate, as the case may be, or (ii) in the case of
a  Form  W-8 or  W-9,  establishing  an  exemption  from  United  States  backup
withholding or other applicable tax.

          (g) If any  Taxes for which the  Borrower  would be  required  to make
payment under this Section 3.8 are imposed,  the Lender, the Issuing Bank or the
Agent,  as the case may be, shall use its reasonable  efforts to avoid or reduce
such Taxes by taking any  appropriate  action  (including,  without  limitation,
assigning its rights hereunder to a related entity or a different  office) which
would not in the sole  opinion  of such  Lender,  the  Issuing  Bank or Agent be
otherwise disadvantageous to such Lender, the Issuing Bank or Agent, as the case
may be.

          (h) Without  prejudice to the  survival of any other  agreement of the
Borrower hereunder,  the agreements and obligations of the Borrower contained in
this Section 3.8 shall survive the payment in full of the Obligations.

     3.9 Affected Lenders. If the Borrower is obligated to pay to any Lender any
amount under Sections 3.8 or 5.9 hereof in excess of any such amounts payable to
the other  Lenders,  the  Borrower  may, if no Default or Event of Default  then
exists, replace such Lender with another lender or lenders reasonably acceptable
to the Agent,  and such Lender  hereby  agrees to be so replaced  subject to the
following:

          (a) The  obligations  of the  Borrower  hereunder  to the Lender to be
replaced (including such increased or additional costs incurred from the date of
notice to the Borrower of such  increase or  additional  costs  through the date
such  Lender  is  replaced  hereunder)  shall  be paid  in  full to such  Lender
concurrently with such replacement;

          (b)  The  replacement  Lender  shall  be a  bank  or  other  financial
institution that is not subject to the increased costs arising under Section 3.8
which may have  effectuated  the  Borrower's  election  to  replace  any  Lender
hereunder,  and each such  replacement  Lender shall  execute and deliver to the
Agent  such  documentation  satisfactory  to the Agent  pursuant  to which  such
replacement Lender is to become a party hereto,  conforming to the provisions of
Section  11.7  hereof,  with a  Commitment  equal to those of the  Lender  being
replaced and shall make a Loan or

DSN:54248.4
                                       29

<PAGE>



Loans in the  aggregate  principal  amount  equal to the  aggregate  outstanding
principal amount of the Loan or Loans of the Lender being replaced;

          (c) Upon such  execution of such  documents  referred to in clause (b)
and repayment of the amounts  referred to in clause (a), the replacement  lender
shall be a "Lender"  with a Commitment as specified  hereinabove  and the Lender
being  replaced shall cease to be a "Lender"  hereunder,  except with respect to
indemnification  provisions under this Credit Agreement,  which shall survive as
to such replaced Lender;

          (d)  The  Agent  shall   reasonably   cooperate  in  effectuating  the
replacement of any Lender under this Section 3.9, but at no time shall the Agent
be obligated to initiate any such replacement; and

          (e) Any Lender  replaced  under this  Section 3.9 shall be replaced at
the  Borrower's  sole cost and expense and at no cost or expense to the Agent or
any of the Lenders.

     3.10 Sharing of Payments.  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 Loans made by it or its participation in Letters of
Credit in excess of its Proportionate  Share of payments on account of the Loans
or Letters of Credit  obtained by all the Lenders,  such Lender shall  forthwith
purchase from the other Lenders such participations in the Loans made by them or
in their  participation in Letters of Credit 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 each 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 to the total  amount so  recovered.  The  Borrower
agrees  that any  Lender so  purchasing  a  participation  from  another  Lender
pursuant  to this  Section  3.10 may, to the fullest  extent  permitted  by law,
exercise  all of 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 the Borrower in the amount of such participation.

ARTICLE 4.   Letters of Credit

     4.1 Issuance of Letters of Credit.  Subject to the terms and  conditions of
this  Agreement and in reliance upon the  representations  and warranties of the
Borrower  set forth  herein,  the  Issuing  Bank shall  issue  Letters of Credit
hereunder  at the  request  of  the  Borrower  and  for  its  account,  as  more
specifically  described  below. The Issuing Bank shall not be obligated to issue
any Letter of Credit  for the  account  of the  Borrower  if at the time of such
requested issuance:


DSN:54248.4
                                       30

<PAGE>



          (a) The face amount of such  requested  Letter of Credit when added to
the Letter of Credit  Obligations  then  outstanding,  would cause the Letter of
Credit Obligations to exceed (i) $20,000,000 or (ii) when added to the aggregate
amount of Revolving Loans and all Letter of Credit  Obligations then outstanding
would cause the sum of the Revolving  Loans and Letter of Credit  obligations to
exceed the lesser of (x) the Line of Credit and (y) the  Borrowing  Base then in
effect;

          (b) Any order,  judgment or decree of any  governmental  authority  or
arbitrator  shall  purport by its terms to enjoin or restrain  the Issuing  Bank
from issuing such Letter of Credit or any  requirement  of law applicable to the
Issuing  Bank or any  request or  directive  (whether or not having the force of
law) from any  governmental  authority with  jurisdiction  over the Issuing Bank
shall  prohibit,  or request the Issuing Bank to refrain  from,  the issuance of
letters of credit  generally  or such  Letter of Credit in  particular  or shall
impose  upon the  Issuing  Bank  with  respect  to such  Letter  of  Credit  any
restriction or reserve or capital requirement (for which the Issuing Bank is not
otherwise  compensated)  not in effect  or  scheduled  to take  effect as of the
Closing  Date,  or  any  unreimbursed  loss,  cost  or  expense  which  was  not
applicable,  in effect or known to the Issuing  Bank as of the Closing  Date and
which the Issuing Bank deems in good faith to be material to it; or

          (c) A default of any Lender's  obligations  to fund under  Section 4.6
exists, or such Lender is a Defaulting  Lender under Section 3.3(d),  unless the
Agent and the Issuing Bank have entered into satisfactory  arrangements with the
Borrower to  eliminate  the Issuing  Bank's  risk with  respect to such  Lender,
including cash  collateralization  of such Lender's  Proportionate  Share of the
Letter of Credit Obligations.

     4.2 Terms of Letters of Credit.  The  Letters of Credit  shall be in a form
customarily  used by the Issuing Bank or in such other form as has been approved
by the  Issuing  Bank.  At the time of  issuance,  the  amount and the terms and
conditions  of  each  Letter  of  Credit,  and  of  any  drafts  or  acceptances
thereunder,  shall be subject to approval by the Agent and the  Borrower.  In no
event may the term of any standby Letter of Credit issued  hereunder  exceed 365
days (except that such Letters of Credit may provide for annual renewal) nor the
term of any  documentary  Letter of Credit  exceed 120 days,  and all Letters of
Credit  issued  hereunder  shall  expire no later than the date that is five (5)
Business Days prior to the Expiration  Date. Any Letter of Credit  containing an
automatic  renewal  provision shall also contain a provision  pursuant to which,
notwithstanding  any other provisions thereof, it shall expire no later than the
date that is five (5) days prior to the  Expiration  Date.  Notwithstanding  the
foregoing,  a  Letter  of  Credit  may have an  expiry  date  subsequent  to the
Expiration  Date if such Letter of Credit  contains such terms and conditions as
are satisfactory to the Agent and the Lenders.

     4.3 Lenders'  Participation.  Immediately upon issuance or amendment by the
Issuing Bank of any Letter of Credit in accordance with the procedures set forth
in Section 4.1, and with respect to each Existing Letter of Credit,  each Lender
shall be deemed to have irrevocably and  unconditionally  purchased and received
from the Issuing Bank,  without recourse or warranty,  an undivided interest and
participation to the extent of such Lender's Proportionate Share (based upon its
Revolving  Credit  Commitment) of the liability with respect to all such Letters
of Credit

DSN:54248.4
                                       31

<PAGE>



(including,  without  limitation,  all  obligations of the Borrower with respect
thereto, other than amounts owing to the Issuing Bank consisting of Issuing Bank
Fees) and any security therefor or guaranty pertaining thereto.

     4.4 Notice of Issuance. (i) whenever the Borrower desires the issuance of a
Letter of Credit,  the Borrower  shall deliver to the Agent a written  notice no
later than 1:00 P.M.  (New York City time) at least three (3) Business  Days (or
such shorter  period as may be agreed to by the Issuing  Bank) in advance of the
proposed  date of issuance of a letter of credit  request in  substantially  the
form attached as Exhibit M (a "Letter of Credit  Request").  The  transmittal by
the  Borrower  of  each  Letter  of  Credit  Request  shall  be  deemed  to be a
representation  and  warranty by the  Borrower  that the Letter of Credit may be
issued  in  accordance  with and will not  violate  any of the  requirements  of
Section  4.1(a).  Prior to the date of issuance  of each  Letter of Credit,  the
Borrower  shall provide to the Agent a precise  description of the documents and
the text of any certificate to be presented by the beneficiary of such Letter of
Credit which if presented by such beneficiary on or prior to the expiration date
of the Letter of Credit would require the Issuing Bank to make payment under the
Letter of Credit.  The Issuing Bank,  in its  reasonable  judgment,  may require
changes  in any such  documents  and  certificates.  No Letter  of Credit  shall
require  payment against a conforming  draft to be made thereunder  prior to the
second  Business Day (under the laws of the  jurisdiction  of the Issuing  Bank)
after the date on which such draft is presented.  A Letter of Credit Request may
be given in writing or  electronically  and,  if  requested  by the Agent,  with
prompt confirmation in writing. Any electronic Letter of Credit Request shall be
deemed to have been prepared by, or under the supervision of the Chief Financial
Officer of the Borrower.  The Agent shall  promptly  provide the  aforementioned
Letter  of  Credit   Request,   document   description   and  proposed  text  of
certification to the Issuing Bank.

     4.5 Payment of Amount  Drawn Under  Letters of Credit.  In the event of any
request for drawing under any Letter of Credit by the beneficiary  thereof,  the
Issuing  Bank shall  notify the Agent,  which shall  notify the Borrower of such
request,  not later than 11:00 a.m. on the Business Day immediately prior to the
date on which the Issuing Bank intends to honor such drawing. The Borrower shall
give notice to be received by the Agent and the Issuing Bank not later than 1:00
p.m. on such  Business Day if it intends to  reimburse  the Issuing Bank for the
amount of such drawing with funds other than the proceeds of Loans.  Such notice
from the  Borrower  shall be  irrevocable  and,  if given,  the  Borrower  shall
reimburse  the Issuing Bank not later than the close of business  (New York City
time) on the day on which such drawing is honored in an amount in same day funds
equal to the amount of such drawing. If the Agent shall not have timely received
such notice (i) the  Borrower  shall be deemed to have timely  given a Notice of
Borrowing  to the  Agent to make  Loans on the date on  which  such  drawing  is
honored in an amount  equal to the amount of such  drawing  and (ii)  subject to
satisfaction  or waiver of the conditions  specified in Article 2 hereof and the
other terms and conditions of Borrowings contained in this Credit Agreement, the
Lenders  shall,  on the date of such  drawing,  make Loans in the amount of such
drawing,  the  proceeds  of which  shall be  applied  directly  by the  Agent to
reimburse the Issuing Bank for the amount of such drawing or payment. If for any
reason,  proceeds of Loans are not  received by the Issuing Bank on such date in
an amount equal to the amount of such drawing,  the Borrower  shall be obligated
to and shall reimburse the

DSN:54248.4
                                       32

<PAGE>



Issuing  Bank,  on the business day (under the laws of the  jurisdiction  of the
Issuing Bank)  immediately  following the date of such drawing,  in an amount in
same day funds equal to the excess of the amount of such drawing over the amount
of such Loans,  if any,  which are so received,  plus  accrued  interest on such
amount at the rate set forth in Section 5.2 hereof.

     4.6 Payment by Lenders.  In the event that the Borrower  does not reimburse
the Issuing  Bank for the amount of any drawing  pursuant  to Section  4.5,  the
Agent shall promptly notify each Lender of the reimbursed amount of such drawing
and of such Lender's respective  participation  therein.  Each Lender shall make
available to the Issuing Bank an amount equal to its respective participation in
same day funds, at the office of the Issuing Bank specified in such notice,  not
later than 1:00 P.M. (New York City time) on the business day (under the laws of
the  jurisdiction  of the Issuing Bank) after the date notified by the Agent. In
the event that any Lender fails to make available to the Issuing Bank the amount
of such  Lender's  participation  in such  Letter of Credit as  provided in this
Section 4.6, the Issuing Bank shall be entitled to recover such amount on demand
from such Lender  together  with  interest  at the Federal  Funds Rate for three
Business Days and  thereafter  at the Prime Rate.  The Agent or the Issuing Bank
shall  distribute to each other Lender which has paid all amounts  payable by it
under  this  Section  4.6 with  respect  to any  Letter of Credit  issued by the
Issuing  Bank  such  other   Lender's   Proportionate   Share  of  all  payments
subsequently  received  by the Agent or the  Issuing  Bank from the  Borrower in
reimbursement  of  drawings  honored by the  Issuing  Bank under such  Letter of
Credit when such payments are received.

     4.7 Nature of Issuing  Bank's Duties.  In determining  whether to pay under
any Letter of Credit,  the Issuing Bank shall be  responsible  only to determine
that the documents and  certificates  required to be delivered under that Letter
of  Credit  have been  delivered  and that  they  comply on their  face with the
requirements of that Letter of Credit. As between the Borrower, the Issuing Bank
and each other Lender,  the Borrower assumes all risks of the acts and omissions
of, or misuse  of the  Letters  of Credit  issued by the  Issuing  Bank by,  the
respective  beneficiaries  of such Letters of Credit.  In furtherance and not in
limitation  of the  foregoing,  neither  the  Issuing  Bank nor any of the other
Lenders shall be responsible (i) for the form, validity, sufficiency,  accuracy,
genuineness  or  legal  effects  of  any  document  submitted  by any  party  in
connection with the application for and issuance of or any drawing honored under
such  Letters  of Credit  even if it  should  in fact  prove to be in any or all
respects invalid, insufficient,  inaccurate,  fraudulent or forged, (ii) for the
validity  or  sufficiency  of  any  instrument   transferring  or  assigning  or
purporting  to transfer  or assign any such  Letter of Credit,  or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective  for any reason,  (iii) for failure of the beneficiary
of any such Letter of Credit to comply fully with  conditions  required in order
to draw upon such Letter of Credit, (iv) for errors, omissions, interruptions or
delays in transmission or delivery of any messages,  by mail, cable,  telegraph,
telex,  telecopy or otherwise,  whether or not they be in cipher, (v) for errors
in  interpretation  of  technical  terms,  (vi)  for any  loss or  delay  in the
transmission  or otherwise  of any document  required in order to make a drawing
under any such  Letter of  Credit,  or of the  proceeds  thereof,  (vii) for the
misapplication  by the beneficiary of any such Letter of Credit, of the proceeds
of any  drawing  honored  under  such  Letter  of  Credit,  and  (viii)  for any
consequences  arising from causes  beyond the control of the Issuing Bank or the
other Lenders. None of the above shall affect,

DSN:54248.4
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<PAGE>



impair,  or prevent the vesting of any of the  Issuing  Bank's  rights or powers
hereunder.  Any action taken or omitted to be taken by the Issuing Bank under or
in connection  with any Letter of Credit,  if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create to the Issuing Bank any
liability to the Borrower or any Lender.

     4.8 Obligations Absolute.  The obligations of the Borrower to reimburse the
Issuing Bank for drawings  honored  under the Letters of Credit issued by it and
the  obligations of the Lenders under Section 4.6 hereof shall be  unconditional
and  irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including,  without limitation,  the following
circumstances:

               (i) any lack of  validity  or  enforceability  of any  Letter  of
Credit;

               (ii) the existence of any claim, set-off,  defense or other right
which the Borrower or any Affiliate of the Borrower may have at any time against
a  beneficiary  or any  transferee  of any Letter of Credit  (or any  Persons or
entities for whom any such beneficiary or transferee may be acting), the Issuing
Bank, any Lender or any other Person, whether in connection with this Agreement,
the transactions contemplated herein or any unrelated transaction;

               (iii) any  draft,  demand,  certificate  or any  other  documents
presented under any Letter of Credit proving to be forged,  fraudulent,  invalid
or  insufficient  in any  respect  or any  statement  therein  being  untrue  or
inaccurate in any respect;

               (iv)  the  surrender  or  impairment  of  any  security  for  the
performance or observance of any of the terms of any of the Credit  Documents to
which the Borrower is a party;

               (v) any  non-application  or misapplication by the beneficiary of
the proceeds of any drawing; or

               (vi) the fact  that a  Default  or Event of  Default  shall  have
occurred and be continuing;

provided,  however,  that the Borrower shall have no obligation to reimburse the
Issuing Bank and the Lenders shall have no  obligation  under Section 4.6 hereof
in the event of the Issuing  Bank's  willful  misconduct or gross  negligence in
determining  whether documents  presented under the Letter of Credit comply with
the terms of such Letter of Credit.

ARTICLE 5.   Interest, Fees and Expenses

     5.1 Interest on Eurodollar Rate Loans. Subject to the provisions of Section
5.4 hereof,  interest on Eurodollar  Rate Loans shall be payable (i) on the last
day of each Interest Period with respect to such Eurodollar Rate Loan, except in
the case of an Interest  Period  having a duration of six months,  in which case
interest shall be payable at the end of each three month portion of such

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<PAGE>



Interest Period, (ii) at the date of Conversion of such Eurodollar Rate Loan (or
a portion thereof) to a Prime Rate Loan and (iii) at maturity of such Eurodollar
Rate Loan, at a per annum  interest rate equal to the Adjusted  Eurodollar  Rate
for the  Interest  Period  in  effect  for such  Eurodollar  Rate  Loan plus the
Applicable  Margin,  and after maturity of such Eurodollar Rate Loan (whether by
acceleration or otherwise), upon demand. The Agent upon determining the Adjusted
Eurodollar  Rate for any Interest  Period shall promptly notify the Borrower and
the Lenders by telephone  (confirmed promptly in writing) or in writing thereof.
Each  determination  by  the  Agent  of an  interest  rate  hereunder  shall  be
conclusive and binding for all purposes, absent manifest error.

     5.2 Interest on Prime Rate Loans.  Subject to the provisions of Section 5.4
hereof,  interest on the Prime Rate Loans shall be payable monthly as of the end
of each month at an interest rate per annum equal to the Prime Lending Rate plus
the  Applicable  Margin.  In the event of any change in said Prime Lending Rate,
the rate hereunder shall change,  effective as of the day the Prime Lending Rate
changes.  Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.

     5.3 Notice of Continuation and Notice of Conversion.

          (a) With respect to any Borrowing consisting of Eurodollar Rate Loans,
the Borrower may, subject to the provisions of Section 5.3(c), elect to maintain
such Borrowing or any portion  thereof as consisting of Eurodollar Rate Loans by
selecting a new Interest  Period for such  Borrowing,  which new Interest Period
shall commence on the last day of the  immediately  preceding  Interest  Period.
Each  selection of a new  Interest  Period (a  "Continuation")  shall be made by
notice  given not  later  than  12:00  P.M.  (New  York City  time) on the third
Business Day prior to the date of any such  Continuation  relating to Eurodollar
Rate  Loans,  by the  Borrower to the Agent.  Such  notice by the  Borrower of a
Continuation  (a "Notice of  Continuation")  shall be by  telephone or facsimile
transmission, confirmed immediately in writing if by telephone, in substantially
the form of Exhibit L,  specifying (i) the date of such  Continuation,  (ii) the
Type of Loans subject to such Continuation,  (iii) the aggregate amount of Loans
subject to such  Continuation  and (iv) the  duration of the  selected  Interest
Period, all of which shall be specified in such manner as is necessary to comply
with all limitations on Loans outstanding  hereunder.  The Borrower may elect to
maintain  more  than  one  Borrowing  consisting  of  Eurodollar  Rate  Loans by
combining such Borrowings into one Borrowing and selecting a new Interest Period
pursuant to this Section 5.3(a); provided,  however, that each of the Borrowings
so combined  shall consist of Loans having  Interest  Periods ending on the same
date.  If the  Borrower  shall  fail to  select a new  Interest  Period  for any
Borrowing  consisting of Eurodollar  Rate Loans in accordance  with this Section
5.3(a),  on the last day of the then existing  Interest Period  therefore,  such
Loans will automatically convert into Prime Rate Loans.

          (b) The  Borrower  may on any  Business  Day upon  notice  (each  such
notice,  a "Notice  of  Conversion")  given to the  Agent,  and  subject  to the
provisions of Section  5.3(c),  Convert the entire amount of or a portion of all
Loans of one Type  comprising  the same  Borrowing  into Loans of another  Type;
provided,  however,  that the  Borrower  may not  convert  Prime Rate Loans into
Eurodollar Loans if an Event of Default has occurred and is continuing, and that
any Conversion of

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<PAGE>



any Eurodollar  Rate Loans into Loans of another Type shall be made on, and only
on, the last day of an Interest Period for such Eurodollar Rate Loans. Each such
Notice of  Conversion  shall be given not later than  12:00 P.M.  (New York City
time) on the  Business  Day prior to the date of any  proposed  Conversion  into
Prime Rate Loans and on the third Business Day prior to the date of any proposed
Conversion  into Eurodollar Rate Loans.  Subject to the  restrictions  specified
above, each Notice of Conversion shall be by telephone, confirmed immediately in
writing,  or by facsimile  transmission,  in substantially the form of Exhibit L
specifying (i) the requested date of such Conversion,  (ii) the Type of Loans to
be Converted,  (iii) the portion of such Type of Loan to be Converted,  (iv) the
Type of Loan such Loans are to be Converted  into and (v) if such  conversion is
into  Eurodollar  Rate Loans,  the duration of the Interest Period of such Loan.
Each Conversion  shall be in an aggregate amount for the Loans of all Lenders of
not less than $4,000,000 or an integral  multiple of $100,000 in excess thereof.
The Borrower may elect to Convert the entire amount of or a portion of all Loans
of one Type  comprising  more than one  Borrowing  into Loans of another Type by
combining  such  Borrowings  into one  Borrowing  consisting of Loans of another
Type;  provided,  however,  that  if  the  Borrowings  so  combined  consist  of
Eurodollar Rate Loans, such Loans shall have Interest Periods ending on the same
date.

          (c)  Notwithstanding  anything  contained in  subsections  (a) and (b)
above to the contrary:

               (i) if the Agent is unable to determine the  Eurodollar  Rate for
Eurodollar  Rate Loans  comprising  any  requested  Borrowing,  Continuation  or
conversion,  the right of the  Borrower  to select or maintain  Eurodollar  Rate
Loans for such Borrowing or any subsequent  Borrowing  shall be suspended  until
the Agent  shall  notify the  Borrower  and the Lenders  that the  circumstances
causing  such  suspension  no  longer  exists,  and each  Loan  comprising  such
Borrowing shall be a Loan of a Type that is unaffected by such circumstances, as
selected by the Borrower pursuant to this Credit Agreement;

               (ii) if the  Majority  Lenders  shall,  at least one Business Day
before the date of any  requested  Borrowing or  Continuation  of or  conversion
into,  a Eurodollar  Rate Loan,  notify the Agent that the  Eurodollar  Rate for
Loans comprising such Borrowing,  Continuation or Conversion will not adequately
reflect the cost to such Lenders of making or funding their respective Loans for
such  Borrowing,  the right of the Borrower to select  Eurodollar Rate Loans for
such Borrowing  shall be suspended until the Agent shall notify the Borrower and
the Lenders that the circumstances  causing such suspension no longer exist, and
each Loan comprising such Borrowing shall be a Loan of a Type that is unaffected
by such  circumstances,  as  selected  by the  Borrower  pursuant to this Credit
Agreement; and

               (iii) there shall not be outstanding at any one time more than an
aggregate of five (5) Revolving Loans which consist of Eurodollar Rate Loans.

          (d) Each  Notice of  Continuation  and Notice of  Conversion  shall be
irrevocable  by and  binding  on the  Borrower.  In the  case of any  Borrowing,
Continuation or Conversion that the

DSN:54248.4
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<PAGE>



related  Notice of  Borrowing,  Notice of  Continuation  or Notice of Conversion
specifies is to be  comprised  of  Eurodollar  Rate Loans,  the  Borrower  shall
indemnify each Lender against any loss, cost or expense  incurred by such Lender
as a result of any failure to fulfill, on or before the date for such Borrowing,
Continuation  or  Conversion  specified in such Notice of  Borrowing,  Notice of
Continuation  or Notice of conversion,  the  applicable  conditions set forth in
Article  2,  including,   without  limitation,   any  loss  (excluding  loss  of
anticipated  profits),  cost or expense incurred by reason of the liquidation or
re-employment  of deposits  or other  funds  acquired by such Lender to fund the
Loan to be  made by such  Lender  as  part of such  Borrowing,  Continuation  or
Conversion.

     5.4  Interest  After  Event of  Default.  Interest on any amount of matured
principal  under the  Revolving  Loans,  and interest on the amount of principal
under the Revolving  Loans  outstanding as of the date an Event of Default shall
have occurred,  and at all times  thereafter  until the earlier of the date upon
which (i) all  Obligations  shall  have been paid in full or (ii) such  Event of
Default  shall have been  waived,  shall be payable on demand at a rate equal to
the rate at which the Revolving Loans are bearing interest  pursuant to Sections
5.1 and 5.2 above,  plus two  percent  (2%).  In the event of any change in said
applicable  interest rate, the rate hereunder shall change,  effective as of the
day the applicable interest rate changes, so as to remain two percent (2%) above
the then applicable interest rate.

     5.5 Reimbursement of Expenses.

          (a) From and after the  Closing  Date,  the  Borrower  shall  promptly
reimburse  the Agent for all  Expenses of the Agent as the same are  incurred by
the Agent and upon  receipt  of  invoices  therefor  and,  if  requested  by the
Borrower, such reasonable backup materials and information as the Borrower shall
reasonably request.

          (b) If any payment of principal of, or conversion or Continuation  of,
any  Eurodollar  Rate Loan is made  other  than on the last day of the  Interest
Period  for such  Loan as a  result  of a  payment,  prepayment,  Conversion  or
Continuation  of  such  Loan  or  acceleration  of  the  maturity  of any of the
Obligations  pursuant to Article 9 hereof or for any other reason,  the Borrower
shall, upon demand by any 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 which it may reasonably
incur as a result  of such  payment,  including,  without  limitation,  any loss
(excluding 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 Loan.

     5.6 Unused Line Fee. At the end of each month the Borrower shall pay to the
Agent for the benefit of each of the Lenders a  non-refundable  fee (the "Unused
Line Fee") on the unused portion of such Lender's  Revolving Credit  Commitment,
which fee shall equal three-eighths of one percent (.375%) per annum. The Unused
Line Fee still accrue from the Closing Date until the Expiration  Date and shall
be due and payable monthly and on the Expiration Date.


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<PAGE>



     5.7 Letter of Credit Fee.

          (a) The  Agent,  for the  ratable  benefit  of the  Lenders,  shall be
entitled to charge to the account of the Borrower (i) on the first  business day
of each month, a fee (the "Letter of Credit Fee"), in an amount equal to (A) one
and  one-half  percent  (1.50%)  per  annum  of  the  daily  average  amount  of
outstanding  documentary  Letter of Credit  Obligations  during the  immediately
preceding month and (B) one and one-half  percent (1.50%) per annum of the daily
average amount of outstanding  standby Letter of Credit  Obligations  during the
immediately  preceding  month, and (ii) as and when incurred by the Agent or any
Lender, any charges, fees, costs and expenses charged to the Agent or any Lender
for the  Borrower's  account by any Issuing Bank (other than any fees charged to
the Agent or any Lender which would be  duplicative  of the Letter of Credit Fee
paid to the Agent for the benefit of the Lenders)  (the  "Issuing Bank Fees") in
connection  with the issuance of any Letters of Credit by the Issuing Bank. Each
determination  by the  Agent  of  Letter  of  Credit  Fees  hereunder  shall  be
conclusive and binding for all purposes, absent manifest error.

          (b) Letter of Credit Fees on Letter of Credit Obligations  outstanding
as of the date an Event of Default occurs, and at all times thereafter until the
earlier of the date upon which (i) all obligations  have been paid and satisfied
in full or (ii) such Event of Default  shall have been waived,  shall be payable
on demand at a rate  equal to the rate at which  the  Letter of Credit  Fees are
charged pursuant to Section 5.7(a) above, plus two percent (2%).

     5.8  Authorization  to Charge Account.  The Borrower hereby  authorizes the
Agent to charge the  Borrower's  Revolving  Loan  Account with the amount of all
interest,  fees, Expenses,  and other payments due hereunder and under the other
Credit  Documents  to which the Borrower is a party,  as and when such  payments
become due,  provided  that with respect to Expenses  that are paid by the Agent
and  reimbursable  by the  Borrower,  the  Borrower  shall have had a reasonable
opportunity  to review same.  The Borrower  confirms  that any charges which the
Agent may so make to the Borrower's  Revolving  Loan Account as herein  provided
will be made as an  accommodation  to the  Borrower  and  solely at the  Agent's
discretion.

     5.9  Indemnification  in Certain Events.  If after the Closing Date, either
(i) any change in or in the  interpretation of any law or regulation (other than
changes in the rate of tax on the overall income of any Lender or its applicable
lending office) is introduced,  including,  without limitation,  with respect to
reserve  requirements,  applicable  to  Deutsche  Bank AG New York or any  other
banking or financial  institution  from whom any of the Lenders  borrow funds or
obtain  credit (a "Funding  Bank"),  the Issuing Bank or any of the Lenders,  or
(ii) a Funding  Bank,  the Issuing Bank or any of the Lenders  complies with any
guideline  or request  issued or made after the Closing Date by any central bank
or other  governmental  authority  whose  guidelines or requests are customarily
honored by such Funding  Bank,  Issuing Bank or Lenders or (iii) a Funding Bank,
the Issuing Bank or any of the Lenders  determines  that the adoption  after the
Closing  Date of any  applicable  law,  rule  or  regulation  regarding  capital
adequacy,  or any change  therein,  or any change  after the Closing Date in the
interpretation or administration thereof by any governmental authority,  central
bank or comparable  agency  charged with the  interpretation  or  administration
thereof has or would have the

DSN:54248.4
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<PAGE>



effect  described  below,  or a Funding  Bank,  the  Issuing  Bank or any of the
Lenders  complies with any request or directive after the Closing Date regarding
capital adequacy (whether or not having the force of law) of any such authority,
central  bank or  comparable  agency,  and in the case of any event set forth in
this clause (iii),  such  adoption,  change or compliance  has or would have the
direct or indirect  effect of reducing the rate of return on the Issuing  Bank's
or any of the Lenders' capital as a consequence of its obligations  hereunder to
a level below that which the Issuing Bank or such Lender could have achieved but
for such adoption,  change or compliance  (taking into consideration the Funding
Bank's,  the  Issuing  Bank's or  Lenders'  policies  with  respect  to  capital
adequacy) by an amount deemed by the Issuing Bank or such Lender to be material,
and the result of any of the foregoing  events described in clauses (i), (ii) or
(iii) is or results in an increase in the cost to the Agent, the Issuing Bank or
any of the  Lenders  of (A)  funding  or  maintaining  the Line of Credit or (B)
issuing,  making  or  maintaining  any  Letter of  Credit  or of  purchasing  or
maintaining  any  participation  therein,  or reduces the amount  receivable  in
respect thereof by the Agent, the Issuing Bank or any Lender,  then the Borrower
shall from time to time within 10 Business  Days of demand by the Agent,  pay to
the  Agent,  for the  account of the  Issuing  Bank or each  applicable  Lender,
additional  amounts  sufficient to indemnify the Issuing Bank or Lenders against
such increased cost or reduced receipt,  provided such increased cost or reduced
receipt is incurred  not more than 90 days prior to the date of such  demand.  A
certificate  as to the  amount  of such  increased  cost  and  setting  forth in
reasonable detail the calculation  thereof shall be submitted to the Borrower by
the Agent,  the Issuing Bank or the applicable  Lender,  and shall be conclusive
absent manifest error.

     5.10  Calculations.  All  calculations  of (i) interest  hereunder and (ii)
fees, including, without limitation, Unused Line Fees and Letter of Credit Fees,
shall be made by the  Agent,  on the  basis of a year of 360  days,  or, if such
computation would cause the interest and fees chargeable hereunder to exceed the
Highest  Lawful Rate,  365/366  days, in each case for the actual number of days
elapsed  (including  the first day but excluding the last day)  occurring in the
period for which such interest or fees are payable.  Each  determination  by the
Agent of an interest rate or payment  hereunder  shall be conclusive and binding
for all purposes, absent manifest error.

ARTICLE 6.   Representations and Warranties

     In order to induce the Lenders to enter into this Credit  Agreement  and to
make available the credit facilities  contemplated  hereby,  the Borrower hereby
makes  the  representations  and  warranties  to the  Lenders  set forth in this
Article 6. Such  representations and warranties,  and all other  representations
and warranties made by the Borrower in any other Credit Document,  shall survive
the execution and delivery hereof and thereof.

     6.1 Organization and Qualification. The Borrower and each of the Restricted
Subsidiaries (i) is a corporation  duly organized,  validly existing and in good
standing  under the laws of the state of its  incorporation,  (ii) has the power
and authority to own its properties and assets and to transact the businesses in
which it is presently,  or proposes to be,  engaged and (iii) is duly  qualified
and is authorized  to do business and is in good standing in every  jurisdiction
in which the failure to be so qualified  could  reasonably be expected to have a
Material Adverse Effect. Schedule

DSN:54248.4
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<PAGE>



B contains a true,  correct and complete list of all  jurisdictions in which the
Borrower and each Restricted  Subsidiary are qualified to do business as foreign
corporations, as of the Closing Date.

     6.2 Solvency. On the Closing Date, the fair saleable value of the assets of
the  Borrower  exceeds  all its  probable  liabilities,  including  those  to be
incurred  pursuant to this Credit  Agreement  and the other Credit  Documents to
which the Borrower is a party. The Borrower (i) does not have unreasonably small
capital in relation to the  business in which it is or proposes to be engaged or
(ii) has not  incurred,  and does not believe  that it will incur  after  giving
effect to the transactions  contemplated by this Credit Agreement,  debts beyond
its ability to pay such debts as they become due.

     6.3 Liens;  Inventory.  There are no Liens in favor of third  parties  with
respect to any of the Collateral, including, without limitation, with respect to
the  Inventory,  wherever  located,  except those Liens that may be permitted by
Section  8.6  hereof.  To the best of the  Borrower's  knowledge,  no  lessor or
warehouseman  of the Borrower has granted any Lien with respect to the Inventory
maintained  by the Borrower at the property of any such lessor or  warehouseman.
Upon the proper filing of financing statements and the proper recordation of any
other applicable documents with the appropriate filing or recordation offices in
each of the  necessary  jurisdictions,  and except  for those  Liens that may be
permitted by Section 8.6 hereof,  the security interests granted pursuant to the
Credit Documents constitute the valid and enforceable first, prior and perfected
Liens on the  Collateral.  The Borrower is the absolute  owner of the Collateral
with full right to pledge,  sell,  consign,  transfer and create a Lien therein,
free and  clear of any and all  Liens in favor of third  parties,  except  those
Liens that may be permitted by Section 8.6 hereof.

     6.4 No Conflict.  The execution and delivery by the Borrower of this Credit
Agreement,  and each of the other  Credit  Documents  to which the Borrower is a
party,  executed and delivered in connection herewith and the performance of the
obligations of the Borrower hereunder and thereunder and the consummation by the
Borrower of the transactions  contemplated hereby by and thereby: (i) are within
the corporate  power of the Borrower;  (ii) are duly  authorized by the Board of
Directors of the Borrower, and, if necessary, its stockholders; (iii) are not in
contravention  of the terms of the Articles or Certificate of  Incorporation  or
By-Laws  of the  Borrower,  or of any  indenture,  contract,  lease,  agreement,
instrument or other  commitment to which the Borrower is a party or by which the
Borrower or any of its  properties  are bound,  except where such  contravention
would not have a Material  Adverse  Effect;  (iv) do not  require  the  consent,
registration  or approval of any  governmental  entity (except such as have been
duly  obtained,  made or given,  and are in full force and  effect);  (v) do not
contravene  any  statute,  law,  ordinance,  regulation,  rule,  order  or other
governmental  restriction  applicable  to or binding upon the  Borrower,  except
where such contravention would not have a Material Adverse Effect; and (vi) will
not, except as contemplated  herein,  result in the imposition of any Liens upon
any property of the Borrower  under any existing  indenture,  mortgage,  deed of
trust,  loan or credit  agreement or other  material  agreement or instrument to
which the Borrower is a party or by which its property may be bound or affected.


DSN:54248.4
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<PAGE>



     6.5  Enforceability.  The  Credit  Agreement  and all of the  other  Credit
Documents executed and delivered in connection herewith are the legal, valid and
binding obligations of the Borrower, and are enforceable against the Borrower in
accordance with their terms except as such  enforceability may be limited by (i)
the effect of any applicable bankruptcy, insolvency, reorganization,  moratorium
or  similar  laws  affecting   creditors'  rights  generally  and  (ii)  general
principles of equity.

     6.6 Financial Data. The Borrower has furnished to the Lenders the following
financial  statements  (the  "Financials")  of the  Borrower:  (i)  consolidated
balance sheets as of, and consolidated  statements of operations,  shareholder's
equity  and cash  flows for the fiscal  year  ended  January 2, 1999  audited by
independent  certified  public  accountants  and (ii) an unaudited  consolidated
balance sheet as of, and  unaudited  consolidated  statements of operations  and
cash flows for the fiscal period ended on July 3, 1999. The Financials have been
prepared in accordance  with GAAP  consistently  applied  throughout the periods
involved, and the Financials present fairly the consolidated financial condition
of the Borrower as of January 2, 1999, with respect to the Financials  described
in clause (i) hereof,  and as of July 3, 1999,  with  respect to the  Financials
described in clause (ii) hereof, and the consolidated  results of the Borrower's
operations and its consolidated  cash flows for each of such fiscal periods then
ended. As of the Closing Date,  neither the Borrower nor any of its Subsidiaries
had,  at the date of the most  recent  balance  sheet  referred  to  above,  any
Indebtedness incurred pursuant to a guaranty, indemnity, or similar undertaking,
or any long-term  lease or unusual forward or long-term  commitment,  including,
without  limitation,  any  interest  rate or foreign  currency  swap or exchange
transaction,  which is not reflected in the foregoing statements or in the notes
thereto  and  which  is  material  in  relation  to the  consolidated  financial
condition of the Borrower as at January 2, 1999.

     6.7 Locations of Offices,  Records and Inventory.  The Borrower's principal
place of business and chief executive office is located at 380 Middlesex Avenue,
Carteret,  New Jersey 07008, or if the Borrower  changes such principal place of
business  and  chief  executive  office,  then at the  location  as to which the
Borrower has notified the Agent in writing,  as provided  under Section  7.6(c).
There are no jurisdictions  in which the Borrower has any Inventory  (except for
Inventory in transit, or immaterial items) other than those jurisdictions listed
on Schedule B, and those jurisdictions as to which the Borrower has notified the
Agent in writing, as provided under Section 7.6(c). Schedule B also contains, as
of the Closing  Date, a true,  correct and complete  list of (i) the legal names
and addresses of each  warehouseman at which  Inventory is stored,  and (ii) the
address of all offices  where  chattel  paper,  records of Accounts and books of
account of the Borrower are kept. None of the receipts  received by the Borrower
from  any  warehouseman  states  that the  Inventory  covered  thereby  is to be
delivered  to bearer or to the order of a named  person or to a named person and
such named person's assigns.

     6.8  Fictitious  Business  Names.  Except as set forth in  Schedule  B, the
Borrower  has not used any  corporate  or  fictitious  name during the three (3)
years  preceding  the date hereof,  other than the  corporate  name shown on its
Certificate of Incorporation.


DSN:54248.4
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<PAGE>



     6.9  Subsidiaries.  As of the  Closing  Date,  the only  direct or indirect
Subsidiaries  of the  Borrower are those listed on Schedule B. As of the Closing
Date,  the Borrower is the record and  beneficial  owner of that  percentage  of
issued  and  outstanding  shares  of  capital  stock of each of the  direct  and
indirect Subsidiaries listed on Schedule B, as is set forth opposite the name of
each such Subsidiary.  With respect to the shares of stock of those Subsidiaries
which  are  Restricted  Subsidiaries,  there  are  no  proxies,  irrevocable  or
otherwise,  with respect to such shares, and no equity securities of any of such
Restricted Subsidiaries are or may become required to be issued by reason of any
options,  warrants,  scrip,  rights to subscribe to, calls or commitments of any
character  whatsoever  relating to, or securities or rights  convertible into or
exchangeable for, shares of any capital stock of any such Restricted Subsidiary,
and there are no contracts, commitments, understandings or arrangements by which
any such Restricted Subsidiary is or may become bound to issue additional shares
of its capital stock or securities  convertible  into or  exchangeable  for such
shares.  All of the shares of stock of all of the  Borrower's  Subsidiaries  are
owned free and clear of any Liens.

     6.10 No  Judgments  or  Litigation.  Except with  respect to  environmental
matters,  which are covered in Section 6.15 hereof,  or as set forth on Schedule
B, no judgments,  orders,  writs or decrees are outstanding against the Borrower
or any of the  Subsidiaries  nor is there  now  pending  or,  to the best of the
Borrower's   knowledge  after  diligent  inquiry,   threatened  in  writing  any
litigation,   contested  claim,  investigation,   arbitration,  or  governmental
proceeding  by or  against  the  Borrower  or  any of  the  Subsidiaries  except
judgments  and  pending  or   threatened   litigation,   contested   claims  and
governmental proceedings which would not reasonably be likely to have a Material
Adverse Effect.

     6.11 No Defaults.  After  giving  effect to the  transactions  contemplated
herein, neither the Borrower nor any of the Subsidiaries is in default under any
term  of  any  indenture,  contract,  lease,  agreement,   instrument  or  other
commitment  to which  any of them is a party  or by  which  any of them is bound
which default could reasonably be expected to have a Material Adverse Effect.

     6.12 Labor Matters.

          (a)  There  are  no  controversies  pending  or,  to the  best  of the
Borrower's knowledge after diligent inquiry,  threatened between the Borrower or
any of the Subsidiaries and any of its respective employees (other than employee
grievances  arising in the ordinary  course of  business),  which  controversies
would, in the aggregate, be reasonably likely to have a Material Adverse Effect.

          (b) To the best  knowledge of the  Borrower:  (i) neither the Borrower
nor any of the Subsidiaries is engaged in any unfair labor practice;  (ii) there
is no unfair labor practice complaint pending against the Borrower or any of the
Subsidiaries,  or threatened in writing against any of them, before the National
Labor Relations Board;  (iii) there is no labor arbitration  proceeding  pending
against the Borrower or any of the Subsidiaries,  or threatened in writing; (iv)
there is no strike,  labor  dispute,  slowdown or stoppage  pending  against the
Borrower or any of the Subsidiaries,

DSN:54248.4
                                       42

<PAGE>



or threatened in writing; and (v) there is no union  representation  question or
union organized  activity  pending with respect to the employees of the Borrower
or any of the  Subsidiaries,  or  threatened  in  writing  which  would,  in the
aggregate,  with  respect to all of the matters set forth in clauses (i) through
(v) above be reasonably likely to have a Material Adverse Effect.

     6.13  Compliance with Law.  Except with respect to  environmental  matters,
which are covered in Section  6.15  hereof,  neither the Borrower nor any of the
Subsidiaries is in violation of any statute, law, ordinance, regulation, rule or
order  of  any  foreign,  federal,  state  or  local  government  or  any  other
governmental  department  or  agency,  or any  judgment,  decree or order of any
court,  applicable to its business or  operations  except where the aggregate of
all such  violations  would not reasonably be likely to have a Material  Adverse
Effect.

     6.14 ERISA. None of the Borrower,  the Subsidiaries nor any ERISA Affiliate
maintains or contributes to any Plan other than those listed on Schedule B. Each
Plan has been and is being, in all material  respects,  maintained and funded in
accordance  with its terms and in substantial  compliance with all provisions of
ERISA and the Code applicable  thereto.  The Borrower,  each of the subsidiaries
and each ERISA Affiliate have fulfilled all  obligations  related to the minimum
funding  standards of ERISA and the Internal  Revenue Code for each Plan, are in
compliance in all material respects with the currently applicable  provisions of
ERISA and of the  Internal  Revenue  Code and have not  incurred  any  liability
(other  than  routine  liability  for  premiums)  under  Title IV of  ERISA.  No
Termination  Event  has  occurred  nor  has any  other  event  occurred  that is
reasonably  likely to result in a  Termination  Event.  No event or events  have
occurred in connection  with which the Borrower,  any of the  Subsidiaries,  any
ERISA Affiliate, any fiduciary of a Plan or any Plan, directly or indirectly, is
reasonably  likely to be subject to any  liability  which  would have a Material
Adverse Effect,  individually or in the aggregate,  under ERISA, the Code or any
other law, regulation or governmental order or under any agreement,  instrument,
statute,  rule of law or  regulation  pursuant to or under which any such entity
has agreed to indemnify any person against  liability  incurred  under, or for a
violation  or  failure  to  satisfy  the  requirements  of,  any  such  statute,
regulation  or  order.  True,  correct  and  complete  copies  of the  following
documents have been  delivered by the Borrower to the Agent:  (i) each Plan (or,
where any such plan is not in writing,  complete  description  thereof)  (and if
applicable,  related  trust  agreements or other  funding  instruments)  and all
amendments thereto, all written interpretations thereof and written descriptions
thereof  that have been  distributed  to  employees  or former  employees of the
Borrower or the Subsidiaries;  (ii) the most recent  determination letter issued
by the Internal  Revenue Service with respect to each Plan;  (iii) for the three
most recent plan years,  Annual Reports on Form 5500 Series required to be filed
with any governmental  agency for each Plan; (iv) all actuarial reports prepared
for the last three plan years for each Plan; (v) a listing of all  Multiemployer
Plans,  with the  aggregate  amount  of the  most  recent  annual  contributions
required to be made by the Borrower,  any  Subsidiary or any ERISA  Affiliate to
each such plan and copies of the collective bargaining agreements requiring such
contributions;  (vi) any information that has been provided to the Borrower, any
Subsidiary  or any ERISA  Affiliate  regarding  withdrawal  liability  under any
Multiemployer  Plan, if any; and (vii) the  aggregate  amount of the most recent
annual payments made to former employees of the Borrower,  any Subsidiary or any
ERISA Affiliate under any Retiree Health Plan, if any.

DSN:54248.4
                                       43

<PAGE>




     6.15 Compliance with  Environmental  or Other Laws.  Except as set forth in
Schedule B, or except as would not, in the aggregate,  reasonably be expected to
have a Material  Adverse Effect:  (i) the operations of the Borrower and each of
the  Subsidiaries  comply with all  Environmental  Laws and applicable  federal,
state or local health and safety  statutes,  regulations,  and ordinances;  (ii)
none of the operations of the Borrower or any of the Subsidiaries is the subject
of any federal or state  investigation,  of which the Borrower has  knowledge or
reasonably should have knowledge,  evaluating whether the Borrower or any of the
Subsidiaries  has Released or is Releasing any  Hazardous  Materials at any site
that may require remedial action to respond to such a Release; (iii) neither the
Borrower  nor  any  of  the   subsidiaries   has  filed  any  notice  under  any
Environmental Law indicating past or present  treatment,  storage or disposal of
Hazardous  Materials  or  reporting  Release of  Hazardous  Materials;  and (iv)
neither the Borrower nor any of the Subsidiaries has any contingent liability of
which the  Borrower  has  knowledge  or  reasonably  should  have  knowledge  in
connection with any Release of any Hazardous Materials,  nor has the Borrower or
any of the Subsidiaries received any written notice alleging potential liability
arising from the disposal of any Hazardous Materials.

     6.16  Intellectual  Property.  The Borrower  possesses  adequate  licenses,
patents, patent applications, copyrights, Trademarks and trade names to continue
to conduct its business as heretofore conducted by it.

     6.17  Licenses and Permits.  Except as set forth in Schedule B or except as
would not reasonably be expected to have a Material Adverse Effect, the Borrower
and each of the Restricted Subsidiaries have obtained and hold in full force and
effect,  all  material  franchises,  licenses,  leases,  permits,  certificates,
authorizations,  qualifications,  easements,  rights of way and other rights and
approvals which are necessary for the operation of their businesses as presently
conducted  and as proposed to be  conducted.  Neither of the Borrower nor any of
the Restricted  Subsidiaries is in violation of the terms of any such franchise,
license, lease, permit,  certificate,  authorization,  qualification,  easement,
right of way,  right or  approval  in any such case which  would  reasonably  be
expected to have a Material Adverse Effect.

     6.18  Title to  Property.  Except as set forth in  Schedule  B, each of the
Borrower  and the  Subsidiaries  has  good and  marketable  title  to,  or valid
leasehold interests in, all of its property (including,  without limitation, all
real and other  property in each case as reflected in the  Financial  Statements
delivered to the Agent  hereunder),  other than property  which is immaterial to
the  business  of the  Borrower  and the  Subsidiaries,  taken as a  whole,  and
properties  disposed  of in the  ordinary  course of  business  or in any manner
otherwise  permitted  under  this  Credit  Agreement  since the date of the most
recent  audited  consolidated  balance sheet of the  Borrower,  and in each case
subject to no Liens  other than those  Liens that are  permitted  by Section 8.6
hereof.

     6.19 Investment  Company.  Neither the Borrower nor any of the subsidiaries
is (i)  an  "investment  company"  or a  company  "controlled  by an  investment
company"  within the meaning of the Investment  Company Act of 1940, as amended,
or (ii) a "holding company" or a "subsidiary

DSN:54248.4
                                       44

<PAGE>



company" of a "holding  company," or an "affiliate" of a "holding company" or of
a "subsidiary  company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

     6.20 No Event of Default.  No Default or Event of Default has  occurred and
is continuing.

     6.21 Taxes and Tax Returns. Except as set forth on Schedule B, the Borrower
and the Subsidiaries (and any group affiliated for tax payment purposes of which
the Borrower or any of the Subsidiaries is now or has been a member) have timely
filed  (inclusive  of any  permitted  extensions)  with the  appropriate  taxing
authorities all returns (including without  limitation,  information returns and
other material information) in respect of taxes required to be filed through the
date hereof. All taxes, assessments, fees and other governmental charges for all
prior fiscal years and for the current fiscal year to the Closing Date have been
paid,  or an adequate  reserve has been  established  therefor,  as set forth in
Schedule B or in the Financial  Statements,  and neither the Borrower nor any of
the Subsidiaries  has any material  liability for taxes in excess of the amounts
so paid or reserves so established.

     6.22 No  Other  Indebtedness.  Neither  the  Borrower  nor  any  Restricted
Subsidiary has any Indebtedness other than the Indebtedness that is permitted by
Section 8.5 hereof.

     6.23 Material  Contracts.  Schedule B contains a true, correct and complete
list of all the Material  Contracts  currently in effect as of the Closing Date,
and no material defaults exist thereunder as of the Closing Date.

     6.24  Affiliate  Transactions.  Neither  the  Borrower  nor any  Restricted
Subsidiary is a party to or bound by any agreement or arrangement  (whether oral
or written) to which any Affiliate of the Borrower or any  Subsidiary is a party
except (i)(a) pursuant to the reasonable  requirements of the Borrower's or such
Restricted  Subsidiary's business and (b) upon fair and reasonable terms no less
favorable to the Borrower and such Restricted Subsidiary than it could obtain in
a comparable  arm's-length  transaction with an unaffiliated Person, and (ii) as
permitted under Section 8.12.

     6.25 Accuracy and  Completeness  of Information.  All factual  information,
taken as a whole, heretofore,  contemporaneously or hereafter furnished by or on
behalf of the Borrower or any of the  subsidiaries in writing to the Agent,  any
Lender,  or the  Auditors  for  purposes  of or in  connection  with this Credit
Agreement  or any Credit  Documents  to which the  Borrower  is a party,  or any
transaction  contemplated  hereby or thereby is or will be true and  accurate in
all  material  respects  on the date as of which  such  information  is dated or
certified and is not incomplete by omitting to state any material fact necessary
to make such  information,  taken as a whole,  not  misleading  at such time, in
light of the circumstances  under which such information was provided;  provided
that a Default or Event of Default  shall not occur based on this  Section  6.25
unless the failure of the accuracy of such information,  individually and in the
aggregate, would reasonably be expected to have a Material Adverse Effect.


DSN:54248.4
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<PAGE>



     6.26  Recording  Fees and  Taxes.  All fees and  taxes,  including  but not
limited to recording fees and recording  taxes,  payable in connection  with the
filing and  recording of the Credit  Documents  have either been paid in full by
the Borrower or arrangements for the payment of such amounts satisfactory to the
Agent shall have been made.

     6.27 No Change.  Since January 2, 1999,  there has been no  development  or
event which has had a Material Adverse Effect.

ARTICLE 7.   Affirmative Covenants

     Until  termination of this Credit Agreement and payment and satisfaction of
all Obligations due hereunder, the Borrower agrees that:

     7.1 Reporting  Information.  The Borrower will furnish to the Agent and the
Lenders the following information within the following time periods:

          (a) Annual Financial Statements: as soon as available and in any event
within ninety (90) days after the end of each fiscal year of the  Borrower,  (i)
audited  Financial  Statements  as of the close of the  fiscal  year and for the
fiscal year,  together  with a comparison to the  Financial  Statements  for the
prior fiscal year, in each case  accompanied  by (A) an opinion of the Auditors,
(B) such  Auditors'  "Management  Letter",  if any, to the  Borrower,  and (C) a
written  statement  signed by the  Auditors  stating  that in the  course of the
regular audit of the business of the Borrower,  which audit was conducted by the
Auditors in accordance with generally accepted auditing standards,  the Auditors
have not  obtained  any  knowledge  of the  existence of any Default or Event of
Default under any provision of this Credit Agreement, or, if such Auditors shall
have obtained from such  examination any such knowledge,  they shall disclose in
such written  statement the existence of the Default or Event of Default and the
nature thereof,  it being understood that such Auditors shall have no liability,
directly or  indirectly,  to anyone for failure to obtain  knowledge of any such
Default or Event of Default,  and (ii) a compliance  certificate  in the form of
Exhibit  C along  with a  schedule  in form  satisfactory  to the  Agent  of the
calculations used in determining, as of the end of such fiscal year, whether the
Borrower was in  compliance  with the covenants set forth in Articles 7 and 8 of
this Credit  Agreement for such year. To the extent that the  Borrower's  annual
report on Form 10-K contains any of the foregoing items, the Lenders will accept
the Borrower's Form 10-K in lieu of such items.

          (b) Quarterly  Financial  Statements:  as soon as available and in any
event within  forty-five  (45) days after the end of such fiscal  quarter of the
Borrower  (except  the last  fiscal  quarter of any fiscal  year) (i)  Financial
Statements  as at the  end of such  period  and for  the  fiscal  year to  date,
together with a comparison to the Financial  Statements  for the same periods in
the prior fiscal year, all in reasonable  detail and duly certified  (subject to
year-end audit  adjustments) by the chief  executive  officer or chief financial
officer of the Borrower as having been  prepared in  accordance  with GAAP,  and
(ii) a compliance  certificate in the form of Exhibit C along with a schedule in
form  satisfactory to the Agent of the calculations  used in determining,  as of
the end of such fiscal quarter,

DSN:54248.4
                                       46

<PAGE>



whether the Borrower was in compliance  with the covenants set forth in Articles
7 and 8 of this  Credit  Agreement  for such  quarter.  To the  extent  that the
Borrower's  quarterly  report on Form 10-Q contains any of the foregoing  terms,
the Lenders will accept the Borrower's Form 10-Q in lieu of such items;

          (c) Monthly  Financial  Statements:  as soon as  available  and in any
event  within  thirty  (30) days after the end of each of the  fiscal  months of
January,  February,  April,  May,  July,  August,  October and November,  within
forty-five  (45) days after the end of each of the fiscal months of March,  June
and September,  and within ninety (90) days after the end of the fiscal month of
December,  a  consolidated  balance sheet for the Borrower as at the end of such
fiscal month and for the fiscal year to date and  statements of operations (on a
divisional basis, consistent with the Borrower's historical practices), and cash
flows for such  fiscal  month and for the fiscal year to date,  together  with a
comparison to the  consolidated  balance sheet and  statements of operations for
the same  periods in the prior fiscal year,  all in  reasonable  detail and duly
certified (subject to year-end audit adjustments) by the chief executive officer
or chief financial officer of the Borrower as having been prepared in accordance
with GAAP;

          (d)  Budgets:  not later  than  sixty  (60) days after the end of each
fiscal year,  the Budget for the following  fiscal year and for each  subsequent
fiscal year through and including the fiscal year in which the  Expiration  Date
occurs;

          (e)  Borrowing  Base  Certificates:  upon  request by the Agent at any
time,  and in any event no later than 5:00 p.m.  on Monday of each week (or such
other  day as  the  Agent  may  specify  in  such  request),  a  borrowing  base
certificate  (the "Borrowing Base  Certificate")  in  substantially  the form of
Exhibit D, duly completed, detailing the Borrower's Eligible Accounts Receivable
and Eligible  Inventory  as of the close of business on the  previous  Thursday,
certified by the  Borrower's  chief  financial  officer or treasurer and subject
only to  adjustment  upon  completion  of the normal  year end audit of physical
inventory;  provided, however, that during the period commencing on the date, if
any, that Unused Availability shall be less than $10,000,000,  and ending on the
date, if any, that Unused  Availability shall equal or exceed  $10,000,000,  the
Agent may request and in such event the Borrower shall provide to the Agent,  no
later than 5:00 p.m. on Monday and  Thursday of each week (or such other days as
the Agent may specify in such request), a Borrowing Base Certificate  detailing:
(i) the Borrower's Eligible Accounts Receivable and Eligible Inventory as of the
close of business on the previous  Thursday,  with respect to the Borrowing Base
Certificate  delivered  on Monday;  and (ii) the  Borrower's  Eligible  Accounts
Receivable  as of the close of  business  on the prior  Thursday,  and  Eligible
Inventory as of the close of business on the previous  Tuesday,  with respect to
the  Borrowing  Base  Certificate  delivered  on  Thursday,   certified  by  the
Borrower's  chief financial  officer or treasurer and subject only to adjustment
upon completion of the normal year end audit of physical inventory. In addition,
each Borrowing Base  Certificate  provided  hereunder  shall have attached to it
such additional  schedules and/or other  information as the Agent may reasonably
request;


DSN:54248.4
                                       47

<PAGE>



          (f)  Notice  of  Default:  promptly  and in any event  within  two (2)
Business Days after  becoming  aware of the  occurrence of a Default or Event of
Default,  or any change,  development  or event  involving a prospective  change
which has or could  reasonably be expected to have a Material  Adverse Effect, a
certificate of the chief  executive  officer or chief  financial  officer of the
Borrower  specifying  the nature thereof and the  Borrower's  proposed  response
thereto, each in reasonable detail;

          (g) Customer  Notes:  Promptly upon request from the Agent, a schedule
prepared and certified by the Borrower's  chief  financial  officer or treasurer
with respect to the Borrower's  Customer Notes  indicating the principal  amount
and final maturity date of all such Customer Notes  outstanding as of the end of
the previous fiscal quarter, listed according to the obligors thereof;

          (h) Public  Disclosures:  promptly  upon the earlier of the mailing or
filing thereof,  copies of all 10-Ks,  10-Qs,  8-Ks,  proxy  statements,  annual
reports,  quarterly  reports,  registration  statements and any other filings or
other  communications  made by the  Borrower to holders of its  publicly  traded
securities or the Securities  Exchange  Commission from time to time pursuant to
the Securities  Exchange Act of 1934, as amended, or the Securities Act of 1933,
as amended;

          (i) Further  Information:  from time to time, such further information
regarding  the  Collateral,  business  affairs and  financial  condition  of and
environmental matters concerning the Borrower and/or each of its Subsidiaries as
the Agent may reasonably request; and

          (j)  Monthly  Aging:  as soon as  available  and in any  event  within
fifteen  (15)  days  after  the end of each  month,  an aging of the  Borrower's
Accounts  arising from the sale of Inventory  (whether or not such  Accounts are
Eligible Accounts  Receivable) and outstanding as of the end of such month, such
aging to be in such form and substance and in such detail as shall be acceptable
to the Agent, it being  understood that the form of aging currently  provided by
the Borrower to the Agent is satisfactory to the Agent.

     7.2 Corporate  Existence.  The Borrower shall,  and shall cause each of the
Restricted  Subsidiaries to (i) maintain their corporate  existence (except that
Restricted Subsidiaries may merge with each other and with the Borrower,  unless
otherwise  prohibited under Section 8.8),  maintain in full force and effect all
material licenses, bonds, franchises,  leases and qualifications to do business,
and all  patents,  contracts  and other  rights  necessary  or  desirable to the
profitable  conduct of their  businesses,  (ii)  continue  in,  and limit  their
operations  to, lines of business that are directly  related to and are intended
to benefit the Borrower's  primary  business and (iii) and shall cause its other
Subsidiaries to, comply with all applicable laws and regulations of any federal,
state or local  governmental  authority,  except in each case when noncompliance
with the foregoing clauses (i), (ii) and (iii) would not, in the aggregate, have
a Material Adverse Effect.

     7.3 ERISA.  (a) As soon as  possible  and,  in any  event,  within ten (10)
Business  Days  after  the  Borrower  or any of its  Subsidiaries  or any  ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
the Borrower will deliver to each of the Agent and the Lenders

DSN:54248.4
                                       48

<PAGE>



a  certificate  of the chief  financial  officer of the Borrower  setting  forth
details as to such occurrence and the action,  if any, which the Borrower,  such
Subsidiary  or such ERISA  Affiliate  is required or proposes to take,  together
with any  notices  required  or  proposed to be given to or filed with or by the
Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant or
the Plan  administrator  with  respect  thereto:  that a  Reportable  Event with
respect to a Benefit Plan, Multiemployer Plan, Plan or Retiree Health Plan (with
respect to the Borrower) has occurred,  that an accumulated  funding  deficiency
has been incurred or an application  may be or has been made to the Secretary of
the  Treasury  for a waiver or  modification  of the  minimum  funding  standard
(including   any  required   installment   payments)  or  an  extension  of  any
amortization period under Section 412 of the Code with respect to a Plan, that a
Plan has been or may be terminated, organized, partitioned or declared insolvent
under Title IV of ERISA,  that a Plan has an unfunded  current  liability giving
rise to a Lien under  ERISA or the Code,  that  proceedings  may be or have been
instituted to terminate a Plan, that a proceeding has been  instituted  pursuant
to Section 515 of ERISA to collect a delinquent  contribution to a Plan, or that
the Borrower,  any of its  Subsidiaries or any ERISA Affiliate will or may incur
any liability (including any contingent or secondary liability) to or on account
of the termination of or withdrawal from a Plan under Section 4062,  4063, 4064,
4069, 4201 or 4204 of ERISA or with respect to a Plan under Section 4971 or 4975
of the Code or  Section  409 or 502(i) or 502(l) of ERISA.  Upon  request of the
Agent, the Borrower will deliver to each of the Agent and the Lenders a complete
copy of the annual report (Form 5500) of each Plan required to be filed with the
Internal  Revenue  Service.  Upon  request  of the  Agent,  in  addition  to any
certificates or notices  delivered to the Agent and the Lenders  pursuant to the
first sentence hereof,  copies of annual reports and any notices received by the
Borrower or any of its  Subsidiaries  or any ERISA Affiliate with respect to any
Plan,  shall be  delivered  to the Agent and the  Lenders no later than ten (10)
Business  Days after the later of the date such  report or notice has been filed
with the Internal  Revenue Service or received by the Borrower or the Subsidiary
or the ERISA Affiliate.

          (b) For purposes of this Section 7.3, the Borrower, any Subsidiary and
any ERISA Affiliate shall be deemed to know all facts known by the administrator
of any Benefit Plan of which such entity is the plan sponsor.

          (c) The  Borrower  shall  establish,  maintain and operate all Benefit
Plans to comply in all material respects with the provisions of ERISA,  Internal
Revenue  Code,  and  all  other   applicable   laws,  and  the  regulations  and
interpretations  thereunder  other than to the extent  that  Borrower is in good
faith  contesting by appropriate  proceedings the validity or implication of any
such provision, law, rule, regulation or interpretation.

     7.4 Proceedings,  Adverse Changes,  or Other Events. The Borrower shall, as
soon as  possible,  and in any event  within  five (5)  Business  Days after the
Borrower  learns  of the  following,  give  written  notice to the Agent and the
Lenders of the occurrence of any of the following events:

          (a) any proceeding(s)  being instituted or threatened in writing to be
instituted  against the  Borrower  or any of the  Subsidiaries  in any  federal,
state, local or foreign court or before

DSN:54248.4
                                       49

<PAGE>



any commission or other regulatory body (federal, state, local or foreign) which
proceeding could reasonably be expected to have a Material Adverse Effect; or

          (b) any  Material  Contract is  terminated  or amended in any material
respect,  which termination or amendment  reasonably could be expected to have a
Material Adverse Effect,  or any new Material Contract is entered into (in which
event  the  Borrower  shall  provide  the  Agent  with a copy of  such  Material
Contract); or

          (c) any of the material terms upon which  suppliers to the Borrower do
business  with the  Borrower are changed or amended and such change or amendment
could  reasonably be expected to have a Material Adverse Effect on the Borrower;
or

          (d)  any  order,   judgment   or  decree  in  excess  of   $1,000,000,
individually  or in the aggregate,  shall have been entered against the Borrower
or any of the Subsidiaries or any of their respective properties or assets; or

          (e) any  notification  of  violation of any law or  regulation  or any
inquiry shall have been received by the Borrower or any of the Subsidiaries from
any local, state,  federal or foreign  governmental  authority or agency,  which
reasonably could be expected to have a Material Adverse Effect; or

          (f)  any  dispute  arises  under  any  indenture,   contract,   lease,
agreement, instrument or other commitment to which the Borrower is a party or by
which it is bound which dispute could  reasonably be expected to have a Material
Adverse Effect.

     7.5 Environmental and Other Matters.

          (a) The Borrower and its Subsidiaries will conduct their businesses so
as to comply in all material  respects with all applicable  Environmental  Laws,
orders,  regulations and ordinances in all jurisdictions in which any of them is
doing  business,  and  all  applicable   restrictions  imposed  by  governmental
authorities thereunder, including, without limitation,  environmental, land use,
occupational safety or health laws,  regulations,  ordinances or permits, except
to the extent that the Borrower or any of the  Subsidiaries  are contesting,  in
good faith by appropriate legal  proceedings,  any such law, order,  regulation,
ordinance,  or interpretation thereof or application thereof. If the Borrower or
any of the  Subsidiaries  shall (i) receive  written notice from or on behalf of
any  governmental  or  regulatory  authority  that any violation of any federal,
state or  local  Environmental  Law,  regulation  or  ordinance  may  have  been
committed,  has been or is about to be  committed  by the Borrower or any of the
subsidiaries,  (ii) receive written notice that any  administrative  or judicial
complaint  or order has been filed or is about to be filed  against the Borrower
or any of the Subsidiaries  alleging  violations of any federal,  state or local
Environmental Law, regulation or ordinance,  or requiring the Borrower or any of
the  Subsidiaries  to take any action in connection with the Release of toxic or
Hazardous  Materials  into the  environment  or (iii) receive any written notice
from a federal,  state, or local  governmental  agency or private party alleging
that

DSN:54248.4
                                       50

<PAGE>



the Borrower or any of the  Subsidiaries  may be liable or responsible for costs
associated  with a response  to or cleanup of a Release of a toxic or  Hazardous
Material  into the  environment  or any  damages  caused  thereby,  and any such
violation,  action,  cost or damage  will  have or is likely to have a  Material
Adverse Effect, the Borrower shall provide the Agent and the Lenders with a copy
of such notice within ten (10)  Business  Days after the receipt  thereof by the
Borrower or any of the Subsidiaries.

          (b) If the Agent or the Majority Lenders reasonably  believes that the
facts or  circumstances  evidence  or suggest  that the  Borrower  or any of its
Subsidiaries is in material non compliance with any  Environmental  Law and that
such  noncompliance  will have or is likely to have a Material  Adverse  Effect,
then at the written request of the Agent or the Majority Lenders,  which request
shall specify in reasonable detail the basis therefor, at any time and from time
to time the Borrower will provide at its sole cost and expense an  environmental
site  assessment  report  concerning  the site owned,  operated or leased by the
Borrower or its Subsidiary in respect of which such material  non-compliance  is
believed  to have  occurred or is  continuing,  such report to be prepared by an
environmental  consulting  firm approved by the Agent and the Majority  Lenders,
indicating  the presence,  Release or absence of Hazardous  Materials on or from
such site and the potential cost of any removal,  remedial or corrective  action
in connection with any such Hazardous Materials on such site.

     7.6 Books and Records.

          (a) The Borrower  agrees to maintain  books and records  pertaining to
the  Collateral  in such  detail,  form and  scope as is  consistent  with  good
business practice.

          (b) The  Borrower  agrees  that the Agent or its agents may enter upon
the  premises of the  Borrower or any of the  Subsidiaries  at any time and from
time to time,  during  normal  business  hours and upon not less than  three (3)
Business  Days  notice so long as no  Default  or Event of  Default  shall  have
occurred and be  continuing  and at any time at all on and after the  occurrence
and during the continuance of a Default or Event of Default,  for the purpose of
(i) inspecting the  Collateral,  (ii)  inspecting  and/or copying (at Borrower's
expense) any and all records pertaining  thereto,  (iii) discussing the affairs,
finances and business of the Borrower  with any officers,  managerial  employees
and directors of the Borrower or with the Auditors and (iv)  verifying  Eligible
Accounts Receivable and/or Eligible Inventory.

          (c) The  Borrower  agrees to afford the Agent  thirty  (30) days prior
written  notice  of any  change  in the  location  of any  Collateral  or in the
location of its chief  executive  office or place of business from the locations
specified in Schedule B, and to execute in advance of such  change,  cause to be
filed and/or  delivered to the Agent any financing  statements,  Acknowledgement
Agreements or other documents  reasonably required by the Agent, all in form and
substance reasonably satisfactory to the Agent.


DSN:54248.4
                                       51

<PAGE>



          (d) The Borrower  agrees to advise the Agent  promptly,  in sufficient
detail, of any substantial  change relating to the type,  quantity or quality of
the  Collateral,  which  change has or is  reasonably  likely to have a Material
Adverse Effect.

     7.7 Collateral  Records.  The Borrower agrees to execute and deliver to the
Agent,  from time to time,  solely for the Agent's  convenience in maintaining a
record of the Collateral, such written statements and schedules as the Agent may
reasonably require,  including without limitation those described in Section 7.1
of this Credit Agreement, designating, identifying or describing the Collateral.
The Borrower's  failure,  however, to promptly give the Agent such statements or
schedules  shall not affect,  diminish,  modify or otherwise  limit the Lenders,
security interests in the Collateral.

     7.8 Security Interests. The Borrower agrees to comply with the requirements
of all state and  federal  laws in order to grant to the Agent,  for the ratable
benefit  of  the  Lenders,   valid  and  perfected  security  interests  in  the
Collateral. The Agent is hereby authorized by the Borrower to file any financing
statements  covering the  Collateral  whether or not the  Borrower's  signatures
appear  thereon.  The Borrower  agrees to do whatever  the Agent may  reasonably
request,  from time to time,  by way of:  filing  notices  of  liens,  financing
statements, and amendments, renewals and continuations thereof; cooperating with
the Agent's representatives;  keeping stock records; and performing such further
acts as the Agent may reasonably require in order to effect the purposes of this
Credit Agreement and the other Credit Documents.

     7.9  Insurance;  Casualty  Loss.  The  Borrower  agrees to maintain  public
liability insurance, third party property damage insurance and replacement value
insurance  on its assets  (including  the  Collateral)  under such  policies  of
insurance,  with such  insurance  companies,  in such amounts and covering  such
risks as are at all times in  accordance  with  prevailing  normal and customary
industry  practices.  All  policies  covering  the  Collateral  are to name  the
Borrower  and the Agent as insureds  and loss  payees in case of loss,  as their
interests may appear. The Borrower shall provide written notice to the Agent and
the Lenders of the  occurrence  of any of the  following  events within five (5)
Business Days after the occurrence of such event: any asset or property owned by
the  Borrower  which  constitutes  Collateral  is (i) damaged or  destroyed,  or
suffers any other loss, or (ii)  condemned,  confiscated or otherwise  taken, in
whole or in part,  or the use thereof is  otherwise  diminished  so as to render
impracticable or unreasonable the use of such asset or property for the purposes
to  which  such  asset  or  property  were  used   immediately   prior  to  such
condemnation,  confiscation or taking, by exercise of the powers of condemnation
or eminent  domain or  otherwise,  and in either  case the amount of the damage,
destruction,   loss  or   diminution   in  value  is  in  excess  of  $1,000,000
(collectively  a  "Casualty  Loss").  The  Borrower  shall  diligently  file and
prosecute  its claim or claims  for any award or payment  in  connection  with a
Casualty  Loss. In the event of a Casualty  Loss,  the Borrower shall pay to the
Agent,  promptly  upon  receipt  thereof,  any and all  insurance  proceeds  and
payments  received  by the  Borrower  on account of damage,  destruction,  loss,
condemnation or eminent domain  proceedings.  The Agent may, at its election and
its sole discretion, either (a) apply the proceeds realized from Casualty Losses
to payment of accrued and unpaid  interest or  outstanding  principal  under the
Revolving Loans or (b) pay such proceeds to the Borrower to be used to replace

DSN:54248.4
                                       52

<PAGE>



the asset or property or portion  thereof  that was the subject of the  Casualty
Loss.  After the occurrence  and during the  continuance of an Event of Default,
(i) no settlement on account of any such Casualty Loss shall be made without the
consent  of the  Lenders  and  (ii)  the  Agent  may  participate  in  any  such
proceedings and the Borrower shall deliver to the Agent such documents as may be
requested by the Agent to permit such  participation  and shall consult with the
Agent,  its attorneys and agents in the making and  prosecution of such claim or
claims.  The Borrower hereby  irrevocably  authorizes and appoints the Agent its
attorney-in-fact,  after the occurrence and  continuance of an Event of Default,
to collect and  receive for any such award or payment and to file and  prosecute
such claim or claims,  which power of attorney shall be irrevocable and shall be
deemed to be coupled with an interest,  and the Borrower  shall,  upon demand of
the  Agent,  make,  execute  and  deliver  any and  all  assignments  and  other
instruments  sufficient to the Agent for the purpose of assigning any such award
or payment to the Agent for the  benefit of the  Lenders,  free and clear of any
encumbrances of any kind or nature whatsoever.

     7.10 Taxes.  The Borrower  agrees to pay when due all taxes lawfully levied
or assessed against it, or any of the Collateral, before any penalty or interest
accrues  thereon;  provided,  however,  that,  unless  such taxes have  become a
federal tax or ERISA Lien on any of the assets of the Borrower, no such tax need
be  paid  if the  same  is  being  contested,  in  good  faith,  by  appropriate
proceedings  promptly  instituted  and  diligently  conducted and if an adequate
reserve or other appropriate provision shall have been made therefor as required
in order to be in conformity with GAAP.

     7.11 Compliance With Laws.  Except where failure to comply would not have a
Material Adverse Effect, the Borrower agrees to comply, and to cause each of the
Restricted Subsidiaries to comply, with all acts, rules, regulations, orders and
ordinances  of any  legislative,  administrative  or judicial  body or official,
applicable to the  Collateral  or any part  thereof,  or to the operation of its
business;  provided that the Borrower and any Restricted  Subsidiary may contest
any acts, rules, regulations,  orders and ordinances of such bodies or officials
in any  reasonable  manner  that  would not  reasonably  be  expected  to have a
Material Adverse Effect.

     7.12 Use of  Proceeds.  The proceeds of all Loans made  hereunder  shall be
used by the  Borrower  solely  for the  general  corporate  purposes,  including
working  capital  purposes,  of the  Borrower.  The  Borrower  shall not use any
portion of the proceeds of any Loans for the purpose of  purchasing  or carrying
any "margin  stock" (as defined in Regulation G of the Board of Governors of the
Federal  Reserve  System)  in  any  manner  which  violates  the  provisions  of
Regulation  G or X of said  Board  of  Governors  or for any  other  purpose  in
violation  of  any  applicable  statute  or  regulation,  or of  the  terms  and
conditions of this Credit Agreement.

     7.13  Trademarks.  The  Borrower  shall do and cause to be done all  things
necessary to preserve and keep in full force and effect all  registrations  with
the U.S.  Patent and  Trademark  Office of its  Trademarks  which are  currently
registered  therewith,  or which become  registered  therewith after the Closing
Date,  and which the  Borrower  determines  are  useful  in the  conduct  of its
business.


DSN:54248.4
                                       53

<PAGE>



     7.14  Maintenance  of Property.  The Borrower  agrees to keep, and to cause
each of the Restricted  Subsidiaries to keep, all property which the Borrower or
such  Restricted  Subsidiary,  as the  case may be,  determines  is  useful  and
necessary  to its  respective  businesses  in good working  order and  condition
(ordinary  wear and tear  excepted)  and not to commit or suffer  any waste with
respect  to  any  of  its  properties,   except  for  properties   which  either
individually or in the aggregate are not material.

     7.15 Further  Assurances.  The Borrower shall take, and shall cause each of
the  Subsidiaries to take, all such further actions and execute all such further
documents and instruments as the Agent may at any time  reasonably  determine in
its sole  discretion  to be  necessary  or  advisable  to further  carry out and
consummate the transactions  contemplated by the Credit Documents,  to cause the
execution,  delivery  and  performance  of  the  Credit  Documents  to  be  duly
authorized and to perfect or protect the Liens (and the priority status thereof)
of the Agent on the Collateral.

     7.16 Puerto Rico Collections Received by Borrower. The Borrower agrees that
any checks,  remittances,  collections  or other payments in respect of Accounts
(collectively  "Puerto Rico Collections")  arising from sales to account debtors
located in the Commonwealth of Puerto Rico ("Puerto Rico  Customers")  which are
received by the Borrower shall be promptly  deposited by the Borrower into (i) a
Depositary  Account  maintained  with a  Blocked  Account  Bank  with  which the
Borrower and the Agent have a Blocked  Account  Agreement which is in full force
and effect (an  "Acceptable  Depositary  Account")  or (ii) a bank  account (the
"Puerto Rico Collection Account") maintained by the Borrower with a bank located
in the  Commonwealth  of Puerto Rico (the "Puerto Rico  Collection  Bank").  The
Borrower  further  agrees that on each day on which the Puerto  Rico  Collection
Bank is open for business and on which the available balances in the Puerto Rico
Collection Account exceed $25,000, in the aggregate, the Borrower shall instruct
the Puerto  Rico  Collection  Bank to  transfer  at the end of each such day the
amount of such excess balance to the Concentration  Account, or to an Acceptable
Depositary  Account.  The Borrower further agrees that if, at any time, it shall
have  received  notice from the Agent of the Agent's  intention to terminate the
procedures set forth in the preceding  sentence (which the Agent may elect to do
in its sole and  absolute  discretion,  exercised in a  commercially  reasonable
manner), then, immediately upon receipt of such notice, the Borrower shall cease
depositing  any Puerto  Rico  Collections  received  by it into the Puerto  Rico
Collection  Account  and shall  instead  promptly  deposit  all such Puerto Rico
Collections, on each day of receipt, into an Acceptable Depositary Account.

ARTICLE 8.   Negative Covenants

     Until  termination of the Credit  Agreement and payment and satisfaction of
all Obligations due hereunder, the Borrower agrees that:

     8.1 [ intentionally deleted]


DSN:54248.4
                                       54

<PAGE>



     8.2 Interest  Coverage  Ratio.  The Borrower  shall not permit its ratio of
EBITDA to Interest Expense as of the end of each of the following  periods to be
less than the ratio set forth below opposite each such period:


                        Period               Minimum Interest
                                              Coverage Ratio

     (a)      the fiscal quarter              1.65 to 1.00
              ending in
              September, 1999,
              together with the
              three preceding
              fiscal quarters

     (b)      the fiscal quarter              1.70 to 1.00
              ending in
              December, 1999,
              together with the
              three preceding
              fiscal quarters

     (c)      the fiscal quarter              1.75 to 1.00
              ending in March,
              2000, and each
              fiscal quarter
              thereafter, in each
              case together with
              the three preceding
              fiscal quarters



     8.3 [intentionally deleted]

     8.4 Capital  Expenditures.  The Borrower  shall not make  payments for, nor
permit  any of  its  Restricted  Subsidiaries  to  make  payments  for,  Capital
Expenditures in excess of the sum of (i) $5,000,000,  in the aggregate,  for the
fiscal  year  ending  January  1,  2000  (the  "base  fiscal  year"),  and  (ii)
$3,500,000,  in the aggregate,  for each fiscal year  thereafter.  To the extent
that all or any portion of the amount allowable for Capital  Expenditures during
any fiscal  year is not used in such  fiscal year (such  allowable  amount,  the
"base amount", and such unused portion, the "rollover amount")

DSN:54248.4
                                       55

<PAGE>



such rollover amount may be carried forward to the immediately  following fiscal
year and used for Capital Expenditures during such immediately  following fiscal
year,  provided,  however,  that (x) any  Capital  Expenditures  made during any
fiscal year for which a rollover  amount  shall have been added shall be applied
first to the  rollover  amount  added to such  fiscal  year and then to the base
amount for such fiscal year, and (y) if a rollover  amount shall have been added
to a fiscal year, in no event shall the payments for Capital  Expenditures  made
during such fiscal year, whether attributable to the base amount for such fiscal
year, the rollover amount for such fiscal year, or both, exceed in the aggregate
$8,500,000, in the case of the fiscal year immediately following the base fiscal
year, or $7,000,000,  in all other cases.  The Borrower shall not make nor shall
it permit any of its Restricted  Subsidiaries  to make any Capital  Expenditures
unless such  Capital  Expenditures  are  directly  related to or are intended to
benefit the Borrower's primary business.

     8.5 No Additional Indebtedness. The Borrower will not, and shall not permit
any of the Restricted  Subsidiaries to, directly or indirectly,  incur,  create,
assume or suffer to exist any Indebtedness other than:

          (a)  Indebtedness  arising  under this Credit  Agreement and the other
Credit Documents;

          (b) Indebtedness under the New Senior Notes;

          (c)  Indebtedness  under Interest Rate Agreements  entered into in the
ordinary course of business;

          (d)  Indebtedness  of any  Restricted  Subsidiary  owing to any  other
Subsidiary and in each case incurred in the ordinary course of its business, and
Indebtedness of the Borrower owing to any Subsidiary;

          (e) (i)  Indebtedness  consisting  of  Capitalized  Lease  Obligations
incurred in connection  with that certain  sublease  agreement  between  Fleming
Foods East, Inc., as sublessor and the Borrower, as sublessee, pertaining to the
leasing of certain warehouse  facilities  located in Woodbridge,  New Jersey, to
the extent that such lease  agreement  is treated in  accordance  with GAAP as a
Capitalized Lease Obligation,  and (ii) Indebtedness incurred in connection with
Capitalized  Lease  Obligations  (other  than  those  referred  to in clause (i)
hereof)  or secured by  Purchase  Money  Liens,  in each case  incurred  for the
acquisition,  replacement or conversion from operating  leases of Rolling Stock,
up to an aggregate  principal  amount at any one time  outstanding not to exceed
$5,000,000;

          (f) Indebtedness that is Subordinated Indebtedness;

          (g) Indebtedness secured by Liens permitted under Section 8.6 hereof;


DSN:54248.4
                                       56

<PAGE>



          (h)  additional   Indebtedness  in  the  aggregate   principal  amount
outstanding at any one time not to exceed $3,500,000; and

          (i)  Indebtedness  described on Schedule B and any refinancing of such
Indebtedness;  provided that the aggregate principal amount of such Indebtedness
is not  increased  and such  refinancing  is on  terms  and  conditions  no more
restrictive than the terms and conditions of the Indebtedness being refinanced.

     8.6 No Liens.  The  Borrower  will not,  and  shall not  permit  any of the
Restricted  Subsidiaries to, directly or indirectly,  mortgage,  assign, pledge,
transfer,  create,  incur, assume,  suffer to exist or otherwise permit any Lien
(whether  as a result of a purchase  money or title  retention  transaction,  or
other security interest, or otherwise) to exist on any of its or their property,
assets, revenues or goods, whether real, personal or mixed, whether now owned or
hereafter acquired, except for:

          (a) Liens granted to the Agent or the Lenders by the Borrower pursuant
to any Credit Document;

          (b) Liens listed on Schedule B;

          (c) Purchase Money Liens;

          (d) Liens of warehousemen, mechanics, materialmen, workers, repairmen,
common  carriers,  landlords and other similar Liens arising by operation of law
or  otherwise,  for amounts  that are not yet due and payable or which are being
diligently contested in good faith by the Borrower by appropriate proceedings;

          (e) Attachment or judgment Liens  individually or in the aggregate not
in excess of  $1,000,000,  exclusive  of (i) any amounts in respect of judgments
that are duly paid or  vacated,  bonded to the  reasonable  satisfaction  of the
Agent,  or stayed  pending  appeal,  in any case within 30 days from the date of
entry thereof or (ii) any amount adequately covered by insurance as to which the
insurance company has acknowledged in writing its obligations for coverage;

          (f) Liens for taxes, assessments or other governmental charges not yet
due and  payable or which are being  diligently  contested  in good faith by the
Borrower by appropriate proceedings,  provided that in any such case an adequate
reserve is being maintained by the Borrower for the payment of same;

          (g)  Deposits  or  pledges  to  secure   obligations  under  workmen's
compensation, social security or similar laws, or under unemployment insurance;


DSN:54248.4
                                       57

<PAGE>



          (h) Deposits or pledges to secure bids, tenders, contracts (other than
contracts for the payment of money), leases,  statutory obligations,  surety and
appeal bonds and other obligations of like nature arising in the ordinary course
of business;

          (i)   easements,   rights-of-way,   restrictions   and  other  similar
encumbrances  incurred  in  the  ordinary  course  of  business  which,  in  the
aggregate,  are not  substantial in amount and which do not  materially  detract
from the value of the property subject thereto or materially  interfere with the
ordinary conduct of the business of the Borrower or any Subsidiary;

          (j) Liens previously  existing on property  acquired  hereafter (other
than  Collateral)  and  assumed by the  Borrower or any of its  Subsidiaries  in
connection with such acquisition;

          (k) Liens  arising from the leasing or  subleasing  of the  Borrower's
real property in accordance with Section 8.7(a) hereof; and

          (l) Extensions and renewals of the foregoing permitted Liens; provided
that the aggregate amount of such extended or renewed Liens is not increased and
such extended or renewed Liens are on terms and  conditions no more  restrictive
than the terms and conditions of the Liens being extended or renewed.

     8.7 No Sale of Assets.  The Borrower  will not, and shall not permit any of
the Restricted  Subsidiaries to, directly or indirectly,  sell,  lease,  assign,
transfer or otherwise dispose of any assets other than:

          (a)  pursuant to leases and  subleases  of real  property  that do not
interfere with the ordinary conduct of the business of the Borrower;

          (b)  Inventory in the ordinary course of business;

          (c)  pursuant to the granting of a  non-exclusive  license or right to
use any Trademark, provided that no such grant shall impair or dilute any rights
of the Lenders in and to such Trademark arising under the Security Agreement;

          (d) obsolete or worn out property  disposed of in the ordinary  course
of business,  and assets  (other than  Collateral)  which are  immaterial to the
business of the Borrower and its  Restricted  Subsidiaries,  provided,  that all
such proceeds are simultaneously  used by the Borrower to pay down Loans, unless
there are no Loans  outstanding  at such time, in which case such proceeds shall
be simultaneously used by the Borrower to make Investments of the kind permitted
under Section 8.11 (c), (d) or (m); and

          (e) other  dispositions  of assets (other than  Collateral),  provided
that (i) such  dispositions  are for fair value,  (ii) at least  eighty  percent
(80%) of the aggregate  consideration  for such  dispositions  is in the form of
cash and (iii) such consideration is either (A) reinvested in the

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business of the Borrower or its  Restricted  Subsidiaries,  (B) used to pay down
the Loans, or (C) used to repay or prepay other  Indebtedness of the Borrower or
its  Restricted  Subsidiaries,  so long  as  such  repayment  or  prepayment  is
permitted  hereunder,  and provided that if the aggregate  consideration for any
such disposition or series of related dispositions  permitted under this Section
8.7(e) is equal to or greater than $5,000,000, the Borrower shall have delivered
to the Agent at least ten (10) Business Day prior to such disposition,  evidence
of the approval of the Borrower's Board of Directors of such  disposition,  such
evidence to be satisfactory to the Agent in all respects.

     8.8 No Corporate  Changes.  The Borrower will not, and shall not permit any
of the Restricted Subsidiaries to, directly or indirectly, merge, consolidate or
otherwise  alter  or  modify  the  Borrower's  or  any  Restricted  Subsidiary's
structure,   status  or  existence,   provided,  however,  that  any  Restricted
Subsidiary may be merged or  consolidated  with or into the Borrower (so long as
the Borrower shall be the continuing or surviving corporation) or any one of the
other  Restricted  Subsidiaries.  The Borrower  will not directly or  indirectly
enter into or engage in any  operation or activity  that is either (x) unrelated
to the  warehousing,  trucking  and  distribution  of food and related  products
(collectively, the "Borrower's primary business") or (y) not directly related to
and is intended to benefit the Borrower's  primary business.  The Borrower shall
give the Agent at least  ten (10)  Business  Days  prior  written  notice of any
operation or activity which any Subsidiary shall enter into or engage in if such
operation or activity is not  directly  related to or is not intended to benefit
the Borrower's primary business.  Unless the Borrower shall have given the Agent
at least ten (10)  Business  Days prior  written  notice of any of the following
changes, but only to the extent any such change may adversely affect the Agent's
or the Lenders' rights and remedies hereunder,  the Borrower will not, and shall
not permit any of the Restricted Subsidiaries to, directly or indirectly,  alter
or modify the Borrower's or any Restricted  Subsidiary's Articles or Certificate
of Incorporation,  corporate names,  mailing  addresses,  or principal places of
business.

     8.9 No  Guarantees.  The Borrower will not, and shall not permit any of the
Restricted Subsidiaries to, directly or indirectly,  assume, guarantee, endorse,
or otherwise become liable upon the obligations of any other Person,  including,
without limitation, any Subsidiary or Affiliate of the Borrower, except:

          (a) by the  endorsement  of  negotiable  instruments  for  deposit  or
collection or similar transactions in the ordinary course of business;

          (b)  by  the  giving  of   indemnities   pursuant  to  the  reasonable
requirements of the Borrower's business,  upon fair and reasonable terms, and in
the ordinary course of its business;

          (c) for guaranties of the obligations of any Person which the Borrower
undertakes  from time to time in the ordinary  course of its business,  provided
that the Borrower's contingent  liabilities in respect of such guaranties do not
exceed more than $1,000,000 in the aggregate, at any one time outstanding;

          (d) by the giving of  guarantees  currently in effect and described on
Schedule B;

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          (e) in connection with the incurrence of Indebtedness  permitted to be
incurred pursuant to Section 8.5 hereof; and

          (f) for  guaranties  of the  obligations  of its  customers  which the
Borrower  undertakes from time to time in the ordinary course of its business as
an  accommodation  to such  customers,  to the extent  permitted  under  Section
8.11(a) hereof.

     8.10 No  Restricted  Payments.  The Borrower will not, and shall not permit
any of the Subsidiaries to, directly or indirectly:

          (a) declare or pay any dividend  (other than dividends  payable solely
in common stock of the  Borrower)  on, or make any payment on account of, or set
apart  assets  for  a  sinking  or  other  analogous  fund  for,  the  purchase,
redemption,  defeasance,  retirement or other  acquisition of, any shares of any
class of capital  stock of the  Borrower or any  warrants,  options or rights to
purchase any such capital stock, whether now or hereafter  outstanding,  or make
any other  distribution  in respect  thereof,  either  directly  or  indirectly,
whether in cash or  property  or in  obligations  of the  Borrower or any of its
Subsidiaries, except that:

               (i) (A) any  Subsidiary  may  declare  and pay  dividends  to the
Borrower or any other  Subsidiary,  and (B) any Subsidiary,  if it is not wholly
owned, directly or indirectly, by the Borrower, may declare and pay dividends to
each of its  shareholders,  provided  that to the  extent  so  paid,  each  such
shareholder  receives  its pro rata  share  of such  dividends,  based  upon the
proportion of shares which such  shareholder  owns to all of the then issued and
outstanding  shares of capital stock of such  Subsidiary,  and provided  further
that any such  dividends  are paid only to the extent of such  Subsidiary's  net
income;

               (ii) the  Borrower  may declare and pay  ratably  dividends  with
respect to its capital stock to its  stockholders  each fiscal year,  during the
sixty day period commencing on the date of the Agent's receipt of the Borrower's
audited  Financial  Statements for the prior fiscal year, in an aggregate amount
not to exceed in any  fiscal  year  fifty  percent  (50%) of Net Income for such
prior fiscal year;  provided  that (1) no Default or Event of Default shall have
occurred and then be continuing or would result therefrom, (2) immediately after
giving effect to any such proposed dividend,  there shall be an aggregate amount
of Unused  Availability of at least $30,000,000,  (3) the ratio of EBITDA to the
sum of  Interest  Expense,  dividends  and  taxes  paid  in  cash,  and  Capital
Expenditures made, in each case with respect to the Borrower,  on a consolidated
basis,  for the fiscal year  immediately  prior to the fiscal year during  which
such proposed  dividend shall be paid,  shall be no less than 1.25 to 1.00, such
ratio to be calculated as if such dividend  shall have been paid on the last day
of such  preceding  fiscal year and (4) at least ten Business  Days prior to the
date on which the Borrower  proposes to pay such dividend,  the Agent shall have
received a  certificate  prepared  under the  direction  of and  executed by the
Borrower's  chief executive  officer or chief financial  officer (x) pursuant to
which such officer shall certify to the Lenders that in determining Unused

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Availability for the purpose of clause (2) hereof, the Borrower's trade payables
have been paid in a manner consistent with the Borrower's  historical practices;
and

          (b)  make  any  optional   payment  or  prepayment  on  or  redemption
(including,  without  limitation,  by making  payments to a sinking or analogous
fund) or repurchase of any  Indebtedness  (other than  Indebtedness  pursuant to
this Credit Agreement),  including,  without  limitation,  the New Senior Notes;
provided  that (i) the  Borrower  may  refinance  Indebtedness  permitted  to be
incurred under Section 8.5(e); (ii) the Borrower may make mandatory  redemptions
of the New Senior  Notes with the net  proceeds  of certain  asset sales (to the
extent allowed in the New Senior Note  Indenture),  and (iii) any Subsidiary may
make payments on account of  Indebtedness  owing by it to the Borrower or to any
other Subsidiary, and provided further that the Borrower may prepay, purchase or
repurchase the  Indebtedness  in respect of the New Senior Notes, so long as (A)
no Default or Event of Default has  occurred and is  continuing  or would result
therefrom and (B) after giving effect to any such proposed prepayment,  purchase
or repurchase,  there shall be an aggregate amount of Unused  Availability of at
least $15,000,000,  provided further that in determining Unused Availability for
the purpose of this Section 8.10(b), the Borrower shall certify to the Agent and
the Lenders that its trade payables have been paid in a manner  consistent  with
the Borrower's historical practices.

     8.11 No Investments. The Borrower will not, and shall not permit any of the
Restricted  Subsidiaries to, directly or indirectly,  make any Investment in any
Person,  whether in cash,  securities or other  property of any kind,  including
without limitation any Subsidiary or Affiliate of the Borrower, other than:

          (a) Advances or loans evidenced by the Customer  Notes,  provided that
the sum of (i) the aggregate  unpaid  principal  balance of such Customer  Notes
outstanding  at any one time,  plus (ii) the aggregate  amount of the Borrower's
contingent  liabilities  in respect of the  guarantees  permitted  under Section
8.9(f) hereof, plus (iii) the aggregate amount of all repurchase  obligations or
other  contingent  liabilities of the Borrower in respect of such Customer Notes
outstanding  at any  one  time,  may not  exceed  $35,000,000  at any one  time,
provided  further  that  the  aggregate  amount  of any such  advances  or loans
outstanding  at any one time to any  obligor on any  single  Customer  Note,  or
series of related Customer Notes,  plus the amount of the Borrower's  contingent
liabilities  in  respect  of its  guarantees  of  such  obligor's  indebtedness,
liabilities or other obligations, may not exceed $5,000,000. Notwithstanding the
foregoing, in addition to the $5,000,000 limitation with regard to both a single
Customer Note, as well as a series of related  Customer Notes,  set forth in the
previous sentence,  but subject to the $35,000,000 limitation set forth therein,
(x) the Borrower may make advances or loans to a New Jersey corporation known as
Foodtown,  pursuant to a certain  Customer Note dated as of December 23, 1998 in
the original  principal amount of $6,100,000 (the "Foodtown  Note"),  so long as
the sum of the  aggregate  amount of all  advances or loans  outstanding  on the
Foodtown  Note,  plus the amount of the  Borrower's  contingent  liabilities  in
respect of its guaranty of the indebtedness, liabilities or other obligations of
Foodtown,  does  not  exceed  $7,500,000  in  the  aggregate,  at any  one  time
outstanding,  and (y) the liability of any  affiliate of Foodtown,  by virtue of
such affiliate's status as a co-maker, co-obligor or surety of the Foodtown

DSN:54248.4
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<PAGE>



Note,  shall not count against the $5,000,000  limitation on the aggregate loans
and advances  which the Borrower  may make to any such  affiliate  pursuant to a
Customer Note executed by such affiliate.

          (b) Existing Advances;

          (c) Cash Equivalents;

          (d) Interest-bearing  demand or time deposits (including  certificates
of  deposit)  which are  insured by the Federal  Deposit  Insurance  Corporation
("FDIC") or a similar federal insurance  program;  provided,  however,  that the
Borrower  may,  in  the  ordinary  course  of  its  business,  maintain  in  its
disbursement  accounts  from time to time  amounts in excess of then  applicable
FDIC or other program insurance limits;

          (e)  Loans  from any  Subsidiary  to the  Borrower  or loans  from any
Subsidiary (other than a Restricted Subsidiary) to any other Subsidiary;

          (f) Any exception to restricted  payments as set forth in Section 8.10
hereof that may otherwise constitute an Investment;

          (g) Advances or loans made as an alternative to the making of any cash
dividend which the Borrower is permitted to make under Section 8.10 hereof,  but
only to the extent permitted thereunder, and only for the benefit of the Persons
permitted to receive such dividends thereunder;

          (h)  Investments in the form of property  received in  satisfaction or
partial  satisfaction  of  indebtedness  previously  contracted and owing to the
Borrower;

          (i)  Advances  or loans to  employees  for travel,  entertainment  and
relocation expenses, made and incurred in the ordinary course of business;

          (j) Investments in bonds or other instruments for the payment of money
issued  or  guaranteed  by  the  State  of  Israel,  up to an  aggregate  amount
outstanding at any one time not to exceed $250,000;

          (k)  Investments not to exceed  $1,500,000 in the aggregate  principal
amount  outstanding at any one time,  made in connection with the acquisition of
businesses  related to the  warehousing,  trucking or  distribution  of food and
related  products,   provided  that  the  Borrower  or  any  of  its  Restricted
Subsidiaries may make any such Investments:  (i) in additional principal amounts
not to exceed  $1,000,000 in the aggregate  outstanding at any one time, so long
as no Default or Event of Default has occurred and is continuing or would result
therefrom  and so long as after giving  effect to any such  proposed  additional
Investment there shall be an aggregate amount of Unused Availability of at least
$10,000,000, provided that in determining Unused Availability for the purpose of
this  Section  8.11(k) the Borrower  shall  certify to the Agent and the Lenders
that  its  trade  payables  have  been  paid in a  manner  consistent  with  the
Borrower's historical practices, and

DSN:54248.4
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<PAGE>



provided  further  that the  ratio of EBITDA to  Interest  Expense  for the four
immediately preceding fiscal quarters is at least 2.25 to 1.00; and (ii) without
regard to the dollar  limitations set forth in this Section 8.11(k),  so long as
(A)  such  Investments  are  directly  funded  with  cash  proceeds  of  capital
contributions of equity to the Borrower,  or (B) paid for with equity securities
of the Borrower;

          (l)  Investments  in a  Subsidiary,  not to exceed  $5,000,000  in the
aggregate  principal amount  outstanding at any one time,  provided that (i) the
business of such  Subsidiary  is directly  related to and is intended to benefit
the Borrower's primary business, and (ii) immediately after giving effect to any
such  proposed  Investment,  there  shall  be  an  aggregate  amount  of  Unused
Availability of at least $30,000,000; and

          (m) Such other  Investments as the Agent and the Majority  Lenders may
approve in their sole discretion.

     8.12 No Affiliate Transactions. The Borrower will not, and shall not permit
any of the Restricted  Subsidiaries  to, directly or indirectly,  enter into any
transaction with (including,  without limitation, the purchase, sale or exchange
of property or the  rendering of any service to) any  Subsidiary or Affiliate of
the Borrower except:

          (a) pursuant to the Management  Agreement dated as of May 31, 1992, as
in effect on the Closing Date,  between the Borrower and Las Plumas Holding Co.,
LLC, a California limited liability company; and

          (b)  pursuant  to  the  reasonable   requirements  of  the  Borrower's
business,  and upon fair and reasonable  terms no less favorable to the Borrower
than  could  be  obtained  in a  comparable  arm's-length  transaction  with  an
unaffiliated  Person , provided that in the case of (i) any transaction in which
the  transaction  fees  payable to an  Affiliate  of the  Borrower or any of its
Subsidiaries are in excess of $50,000 or (ii) a transaction or series of related
transactions  involving  aggregate  consideration  in excess of $5,000,000,  the
Borrower shall deliver to the Agent, at least thirty (30) days prior to the time
the Borrower or such  Restricted  Subsidiary pays any such  transaction  fees or
enters into any such transaction or series of related  transactions,  a detailed
summarization of such transaction, including without limitation, a summarization
of all material terms, provisions and conditions thereof.

     8.13 No Prohibited Transactions Under ERISA.

          (a) The Borrower will not, and shall not permit any of the  Restricted
Subsidiaries to, directly or indirectly:

               (1)  Engage,  or permit any ERISA  Affiliate  to  engage,  in any
prohibited  transaction  which is reasonably likely to result in a civil penalty
or excise tax described in Sections 406 of ERISA or 4975 of the Internal Revenue
Code for which a statutory or class exemption is not

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<PAGE>



available or a private exemption has not been previously  obtained from the DOL,
and such civil penalty or excise tax is in excess of $1,000,000;

               (2) terminate,  or permit any ERISA  Affiliate to terminate,  any
Benefit Plan where such event would result in any liability of the Borrower, any
Subsidiary or any ERISA  Affiliate  under Title IV of ERISA,  and such liability
would be in excess of $1,000,000;

               (3) fail,  or permit  any ERISA  Affiliate  to fail,  to make any
required  contribution  or payment in excess of $1,000,000 to any  Multiemployer
Plan;

               (4) fail,  or  permit  any ERISA  Affiliate  to fail,  to pay any
required  installment  or any other  payment  required  under Section 412 of the
Internal  Revenue Code on or before the due date for such  installment  or other
payment if such installment or other payment is in excess of $1,000,000;

               (5)  amend,  or permit  any  ERISA  Affiliate  to  amend,  a Plan
resulting  in an  increase in current  liability  for the plan year in excess of
$1,000,000  such  that  either  of the  Borrower,  any  Subsidiary  or any ERISA
Affiliate  is  required to provide  security to such Plan under  Section 401 (a)
(29) of the Internal Revenue Code; or

               (6) withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer  Plan where such  withdrawal is reasonably  likely to result in an
annual  liability  in excess of $500,000  of any such  entity  under Title IV of
ERISA.

          (b) The Borrower will not, and shall not permit any of the  Restricted
Subsidiaries  to, directly or indirectly,  incur any civil penalty or excise tax
referred to in Section 8.13(a)(1), or incur any liability referred to in Section
8.13(a)(2),  or fail to make any required contribution or payment referred to in
Section  8.13(a)(3),  or any installment or other payment referred to in Section
8.13(a)(4),   or  incur  any  increase  in  liability  referred  to  in  Section
8.13(a)(5), or any annual liability referred to in Section 8.13 (a) (6) , if the
aggregate amount outstanding at any one time of all such civil penalties, excise
taxes, liabilities, contributions, payments, and installments would be in excess
of $1,000,000.

     8.14 No  Additional  Bank  Accounts.  The Borrower  will not, and shall not
permit any of the Restricted  Subsidiaries  to,  directly or  indirectly,  open,
maintain or otherwise  have any checking,  savings or other accounts at any bank
or other  financial  institution,  or any other account where money is or may be
deposited or maintained with any Person,  other than the  Disbursement  Accounts
and the  accounts  set forth on  Schedule B, unless (a) the Agent is notified in
writing prior to the opening of any such account, and (b) after giving effect to
the initial deposit of funds thereto, and at all times thereafter,  no violation
of Section 8.15 hereof shall have occurred.

     8.15 No Excess Cash. The Borrower will not, and shall not permit any of the
Restricted Subsidiaries to, directly or indirectly, maintain in the aggregate in
all of the checking, savings or

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<PAGE>



other accounts of the Borrower, total cash balances and investments permitted by
Section 8.11 hereof in excess of $500,000 at any time during which any Revolving
Loans are outstanding hereunder,  with the exception of (a) payroll accounts and
(b) the Puerto Rico Collection Account,  unless the Borrower shall have received
a notice from the Agent in  accordance  with the terms of Section 7.16, in which
case, upon such receipt,  the exception set forth in this clause (b) shall be of
no further force or effect.

     8.16 Material Amendments of Material Contracts.

          (a)  The  Borrower   will  not,  and  shall  not  permit  any  of  the
Subsidiaries to, directly or indirectly,  amend, modify,  cancel or terminate or
permit the amendment,  modification,  cancellation or termination of, any of the
Material Contracts,  except in the event that any such amendment,  modification,
cancellation or termination is not reasonably  likely to have a Material Adverse
Effect.

          (b) The  Borrower  shall not amend,  modify or  change,  or consent or
agree to any amendment,  modification or change,  to any of the terms of the New
Senior Notes (A) if the effect of such  amendment,  modification or change is to
(directly  or  indirectly)  (i)  increase the amount of any payment of principal
thereof,  (ii)  increase the interest  rate or premium  payable  thereon,  (iii)
increase the amount of fees or any other amounts  payable with respect  thereto,
(iv) shorten the scheduled  amortization or average  weighted life thereof,  (v)
shorten the date for payment of interest or principal thereon,  (vi) shorten the
final  maturity  thereof or (vii) change any covenant or any event of default or
condition  to an  event  of  default  thereunder,  or  (B)  if  such  amendment,
modification or change would, together with all other amendments,  modifications
or changes made,  increase  materially the obligations of the Borrower or confer
additional material rights on any holder of the New Senior Notes.

     8.17  Additional  Negative  Pledges.  The Borrower  will not, and shall not
permit any of the Restricted Subsidiaries to, directly or indirectly, other than
pursuant  to the New  Senior  Note  Indenture  as in  effect  on the date of its
issuance,  create or otherwise cause or suffer to exist or become effective,  or
permit any of the Restricted Subsidiaries to create or otherwise cause or suffer
to exist or become  effective,  directly or indirectly,  (i) any  prohibition or
restriction  (including  any agreement to provide equal and ratable  security to
any other  Person in the event a Lien is  granted  to or for the  benefit of the
Agent and the  Lenders) on the  creation or existence of any Lien upon assets of
the Borrower or the  Subsidiaries,  except for any such  restriction in favor of
the holder of a Purchase Money Lien on an item of property owned by the Borrower
or any of its Subsidiaries,  provided such restriction only affects such item of
property,  or (ii) any Contractual  Obligation which may restrict or inhibit the
Agent's rights or ability to sell or otherwise  dispose of the Collateral or any
part thereof after the occurrence of an Event of Default.

     8.18 No  Additional  Subsidiaries.  The  Borrower  will not,  and shall not
permit any of the Subsidiaries  to, directly or indirectly,  form or acquire any
new  Subsidiaries  unless the Agent and the shall have  received at least twenty
(20) days prior written notice of such formation or acquisition.

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<PAGE>



     8.19 Fiscal Year.  The  Borrower  agrees that it will not change its fiscal
year from a year based on four  consecutive  fiscal  quarters,  each of which is
calculated as though such quarter  contains three fiscal  months,  the first and
second of which  consist of four weeks and the third of which  consists  of five
weeks, unless required by law, and if so required, the Borrower shall have given
the Agent at least thirty (30) days prior written notice thereof.

ARTICLE 9.   Events of Default and Remedies

     9.1 Events of Default.  The occurrence of any of the following events shall
constitute an Event of Default hereunder:

          (a) failure of the Borrower to pay (i) any interest, Fees, Expenses or
other  Obligations  (other than  principal)  when due,  in each case  whether at
stated maturity, by acceleration,  or otherwise, or (ii) any principal when due,
whether at stated maturity, by acceleration or otherwise;

          (b) failure of the  Borrower  to  perform,  comply with or observe any
term, covenant or agreement applicable to it contained in:

               (i) Sections 7.1 (other than  subsection (e) thereof),  7.3, 7.4,
7.5, 7.7, 7.8, 7.9, 7.10, 7.13, 7.14 or 7.15, which failure continues unremedied
for a period of twenty (20)  Business  Days from the date of its  occurrence  or
Section  7.1(e),  which  failure  continues  unremedied  for a period of one (1)
Business Day from the date of its occurrence;

               (ii) Sections 7.2, 7.6(a),  or 8.16(b),  which failure  continues
unremedied for a period of five (5) days after the Agent gives written notice of
such failure to the Borrower; or

               (iii) any other provision of Article 7 or Article 8 hereof;

          (c) (i) any  representation  or warranty of the Borrower in any Credit
Document  shall prove to be untrue in any  material  respect on the date made or
deemed to be made,  or (ii) the Borrower  shall fail to comply with any covenant
contained  in this Credit  Agreement  (other  than under a provision  covered by
Section  9.1(b)  above) or contained in any other Credit  Documents to which the
Borrower is a party,  which failure continues  unremedied for a period of twenty
(20) Business Days from the date of its occurrence;

          (d) the Borrower or any of the Restricted  Subsidiaries shall commence
a voluntary  case  concerning  itself  under Title 11 of the United  States Code
entitled  "Bankruptcy",  as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against any of them
and the petition is not controverted  within 10 days, or is not dismissed within
60 days,  after  commencement  of the case;  or a  custodian  (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially  all
of any of their property;  or any of them commences any other  proceeding  under
any  reorganization,   arrangement,  adjustment  of  debt,  relief  of  debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction

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whether  now or  hereafter  in  effect  relating  to any of  them,  or  there is
commenced against any of them any such proceeding which remains  undismissed for
a period of 60 days; or any of them is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or any of them suffers any  appointment  of any custodian or the like for any of
them or any substantial  part of any of their property to continue  undischarged
or unstayed for a period of 60 days;  or any of them makes a general  assignment
for the benefit of creditors;  or any  corporate  action is taken by any of them
for the purpose of effecting any of the foregoing; or

          (e) any Subsidiary which is not a Restricted Subsidiary shall commence
a voluntary  case  concerning  itself  under Title 11 of the United  States Code
entitled  "Bankruptcy," as now or hereafter in effect,  or any successor thereto
(the "Bankruptcy  Code"); or an involuntary case is commenced against it and the
petition is not controverted within 10 days, or is not dismissed within 60 days,
after  commencement  of the case; or a custodian  (as defined in the  Bankruptcy
Code) is appointed for, or takes charge of, all or  substantially  all of any of
its property;  or it commences any other  proceeding  under any  reorganization,
arrangement,  adjustment of debt, relief of debtors, dissolution,  insolvency or
liquidation  or similar  law of any  jurisdiction  whether now or  hereafter  in
effect  relating  to it, or there is  commenced  against it any such  proceeding
which  remains  undismissed  for a  period  of  60  days;  or it is  adjudicated
insolvent or bankrupt;  or any order of relief or other order approving any such
case or proceeding is entered; or it suffers any appointment of any custodian or
the like for itself or any  substantial  part of any of its property to continue
undischarged  or  unstayed  for a  period  of 60  days;  or it  makes a  general
assignment for the benefit of creditors;  or any corporate action is taken by it
for the purpose of effecting any of the foregoing,  and any such event has or is
reasonably likely to have a Material Adverse Effect;

          (f) a  "Change  of  Control"  (as  defined  in  the  New  Senior  Note
Indenture, as in effect on the date of its issuance) shall occur;

          (g) the  occurrence  of a default  or event of  default  (in each case
which shall  continue  beyond the  expiration of any  applicable  grace periods)
which  permits the  acceleration  of the  maturity  of, any note,  agreement  or
instrument  evidencing  any other  Indebtedness  of the  Borrower  or any of the
Restricted  Subsidiaries,  and  the  aggregate  principal  amount  of  all  such
Indebtedness  with  respect  to which such  default  or an event of default  has
occurred exceeds $1,000,000; or

          (h) any  material  covenant,  agreement  or  obligation  of any  party
contained in or evidenced  by any of the Credit  Documents  shall cease to be in
full  force and effect  other than as a result of actions  taken or not taken by
the Agent, the Issuing Bank or the Lenders,  or any Credit Document to which the
Borrower is a party shall be cancelled, terminated, revoked or rescinded without
the  express  prior  written  consent  of the Agent  (other  than as a result of
actions taken or not taken by the Agent,  the Issuing Bank or the  Lenders),  or
any action or proceeding  shall have been  commenced by the Borrower,  or any of
its  Subsidiaries or Affiliates,  or by any member of the Permitted  Holders (as
defined  in the New  Senior  Note  Indenture  as in  effect  on the  date of its
issuance),  as the case may be, seeking to cancel,  revoke, rescind or disaffirm
the obligations of any

DSN:54248.4
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party to any Credit Document, or any court or other governmental authority shall
issue a  judgment,  order,  decree  or  ruling  to the  effect  that  any of the
obligations  of any  party  to any  Credit  Document  are  illegal,  invalid  or
unenforceable.

     9.2 Acceleration and Cash Collateralization. Upon the occurrence and during
the continuance of an Event of Default which has not been waived by the Agent at
the  direction  of the  Majority  Lenders,  the Agent  shall,  upon the written,
telecopied or telex request of the Majority Lenders,  and by delivery of written
notice to the Borrower from the Agent, take any or all of the following actions,
without  prejudice  to the rights of the Agent,  any Lender or the holder of any
Revolving  Note to enforce  its claims  against  the  Borrower:  (a) declare all
Obligations to be immediately  due and payable (except with respect to any Event
of Default set forth in Section  9.1(d)  hereof,  in which case all  obligations
shall automatically  become immediately due and payable without the necessity of
any notice or other demand) without  presentment,  demand,  protest or any other
action or obligation of the Agent or any Lender;  and (b) immediately  terminate
the Commitments hereunder;  and at all times thereafter,  all loans and advances
made by any Lender  pursuant to this Credit  Agreement shall be at such Lender's
sole discretion, unless such Event of Default is waived.

     In  addition,  upon demand by the Agent or the Majority  Lenders  after the
occurrence  of any Event of Default,  the Borrower  shall deposit with the Agent
for the  benefit  of the  Lenders  with  respect to each  Letter of Credit  then
outstanding,  promptly upon such demand,  cash or Cash  Equivalents in an amount
equal to the greatest amount for which such Letter of Credit may be drawn.  Such
deposit  shall be held by the Agent for the benefit of the Issuing  Bank and the
other  Lenders as security  for, and to provide for the payment of,  outstanding
Letters of Credit.

     If at any  time  after  acceleration  of the  maturity  of the  Loans,  the
Borrower  shall pay all  arrears  of  interest  and all  payments  on account of
principal  of  the  Loans  which  shall  have  become  due  otherwise   than  by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue  interest,  at the rates  specified  in this Credit  Agreement)  and all
Events of Default  and  Defaults  (other than  nonpayment  of  principal  of and
accrued  interest on the Loans and other  Obligations  due and payable solely by
virtue of acceleration)  shall be remedied or waived,  then by written notice to
the Borrower,  the Majority  Lenders may elect,  in the sole  discretion of such
Majority Lenders, to rescind and annul the acceleration and its consequences and
return any cash  collateral;  but such  action  shall not affect any  subsequent
Default or Event of Default  or impair any right or remedy  consequent  thereon.
The provisions of the preceding sentence are intended merely to bind the Lenders
to a decision  which may be made at the election of the Majority  Lenders;  they
are not  intended to benefit the Borrower and do not give the Borrower the right
to require  the  Lenders to rescind or annul any  acceleration  hereunder  or to
return any cash collateral, even if the conditions set forth herein are met.

     9.3 Remedies.  Upon the occurrence and during the  continuance of any Event
of  Default  which  has not been  waived by the  Agent at the  direction  of the
Majority  Lenders,  the Agent may, on two (2) Business  Days prior notice to the
Borrower: (a) remove from any premises where same may

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be located any and all documents,  instruments, files and records (including the
copying of any computer  records),  and any  receptacles or cabinets  containing
same,  relating  to the  Accounts,  or the Agent may use (at the  expense of the
Borrower) such of the supplies or space of the Borrower at the Borrower's  place
of business or otherwise, as may be necessary to properly administer and control
the Accounts or the handling of collections and realizations  thereon; (b) bring
suit,  in the name of the Borrower or the Lenders and  generally  shall have all
other rights respecting said Accounts,  including  without  limitation the right
to:  accelerate or extend the time of payment,  settle,  compromise,  release in
whole or in part any amounts owing on any Accounts and issue credits in the name
of the  Borrower or the Lenders;  (c) sell,  assign and deliver the Accounts and
any   returned,   reclaimed  or   repossessed   merchandise,   with  or  without
advertisement,  at public or private sale, for cash, on credit or otherwise,  at
the  Agent's  sole  option  and  discretion,  and any Lender may bid or become a
purchaser at any such sale,  free from any right of  redemption,  which right is
hereby  expressly  waived  by the  Borrower;  and  (d)  foreclose  the  security
interests  created  pursuant to the Credit  Documents by any available  judicial
procedure, or to take possession of any or all of the Inventory without judicial
process  and enter any  premises  where any  Inventory  may be  located  for the
purpose of taking  possession of or removing the same.  The Agent shall have the
right, without notice of advertisement,  to sell, lease, or otherwise dispose of
all or any part of the Inventory, whether in its then condition or after further
preparation or processing, in the name of the Borrower or the Lenders, or in the
name of such other party as the Agent may designate, either at public or private
sale or at any broker's board, in lots or in bulk, for cash or for credit,  with
or  without  warranties  or  representations,  and upon  such  other  terms  and
conditions as the Agent in its sole discretion may deem advisable, and the Agent
or any other  Lender  shall have the right to purchase at any such sale.  If any
Inventory shall require rebuilding,  repairing,  maintenance or preparation, the
Agent shall have the right,  at its option,  to do such of the  aforesaid  as is
necessary, for the purpose of putting the Inventory in such saleable form as the
Agent shall deem appropriate.  The Borrower agrees, at the request of the Agent,
to assemble the  Inventory and to make it available to the Agent at places which
the Agent shall  select,  whether at the premises of the Borrower or  elsewhere,
and to make  available to the Agent the premises and  facilities of the Borrower
for the purpose of the Agent's  taking  possession  of,  removing or putting the
Inventory in saleable form.  However,  if notice of intended  disposition of any
Collateral  is required by law, it is agreed that ten (10)  Business Days notice
shall constitute  reasonable  notification.  Unless expressly  prohibited by the
licensor  thereof,  if any,  the  Agent is hereby  granted a license  to use all
computer  software  programs,  data bases,  processes and materials  used by the
Borrower in connection with its businesses or in connection with the Collateral.
The  net  cash  proceeds  resulting  from  the  Agent's  exercise  of any of the
foregoing  rights (after  deducting all charges,  costs and expenses,  including
reasonable  attorneys' fees) shall be applied by the Agent to the payment of the
Borrower's  Obligations  to the Agent and the Lenders,  whether due or to become
due, in such order as the Agent may elect.  The Borrower  shall remain liable to
the Agent and the Lenders for any deficiencies, and the Agent and the Lenders in
turn agree to remit to the Borrower or its  successors  or assigns,  any surplus
resulting therefrom.  The enumeration of the foregoing rights is not intended to
be  exhaustive  and the exercise of any right shall not preclude the exercise of
any other rights, all of which shall be cumulative.

ARTICLE 10.   The Agent

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     10.1 Appointment of Agent.

          (a) Each  Lender  hereby  designates  BTCC as  Agent to act as  herein
specified.  Each Lender hereby  irrevocably  authorizes,  and each holder of any
Revolving Note or  participation  in any Letter of Credit by the acceptance of a
Revolving Note or participation  shall be deemed  irrevocably to authorize,  the
Agent to take such action on such Lender's  behalf under the  provisions of this
Credit  Agreement  and  the  Revolving  Notes  and  any  other  instruments  and
agreements  referred to herein and to exercise  such powers and to perform  such
duties hereunder and thereunder as are specifically  delegated to or required of
the  Agent by the  terms  hereof  and  thereof  and  such  other  powers  as are
reasonably  incidental  thereto.  The Agent  shall hold all  Collateral  and all
payments of principal, interest, Fees, charges and Expenses received pursuant to
this  Credit  Agreement  or any other  Credit  Document  for the  benefit of the
Lenders to be distributed as provided  herein.  The Agent may perform any of its
duties hereunder by or through its agents or employees.

          (b) The  provisions  of this  Article 10 are solely for the benefit of
the Agent and the Lenders,  and none of the Credit Parties shall have any rights
as a third party beneficiary of any of the provisions hereof (other than Section
10.9).  In performing its functions and duties under this  Agreement,  the Agent
shall act  solely as agent of the  Lenders  and does not assume and shall not be
deemed to have assumed any obligation  toward or relationship of agency or trust
with or for any Credit Party.

     10.2  Nature  of  Duties  of  Agent.  The  Agent  shall  have no  duties or
responsibilities  except those expressly set forth in this Credit  Agreement and
the  other  Credit  Documents.  Neither  the  Agent  nor  any of  its  officers,
directors,  employees  or agents shall be liable for any action taken or omitted
by it as such hereunder or in connection herewith, unless caused by its or their
gross  negligence  or  willful  misconduct.  The  duties of the  Agent  shall be
mechanical and  administrative in nature;  the Agent shall not have by reason of
this Credit Agreement or the other Credit Documents a fiduciary  relationship in
respect of any Lender;  and nothing in this Credit Agreement or the other Credit
Documents,  expressed or implied,  is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Credit Agreement or the
other Credit Documents except as expressly set forth herein or therein.

     10.3 Lack of Reliance on Agent.

          (a) Independently and without reliance upon the Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to make (i) its own
independent  investigation  of the  financial or other  condition and affairs of
each Credit Party in  connection  with the taking or not taking of any action in
connection  herewith and (ii) its own appraisal of the  creditworthiness of each
Credit Party,  and, except as expressly  provided in this  Agreement,  the Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any time
or times thereafter.

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<PAGE>




          (b) The Agent shall not be responsible to any Lender for any recitals,
statements,  information,   representations  or  warranties  herein  or  in  any
document,  certificate or other writing delivered in connection  herewith or for
the   execution,    effectiveness,    genuineness,   validity,   enforceability,
collectibility,  priority  or  sufficiency  of  this  Credit  Agreement  or  the
Revolving  Notes or the financial or other  condition of any Credit  Party.  The
Agent  shall  not  be  required  to  make  any  inquiry  concerning  either  the
performance or observance of any of the terms,  provisions or conditions of this
Credit  Agreement or the  Revolving  Notes,  or the  financial  condition of any
Credit Party, or the existence or possible  existence of any Default or Event of
Default, unless specifically requested to do so in writing by any Lender.

     10.4 Certain Rights of the Agent. The Agent shall have the right to request
instructions  from  the  Lenders  at  any  time.  If  the  Agent  shall  request
instructions  from the Lenders with respect to any act or action  (including the
failure to act) in  connection  with this Credit  Agreement,  the Agent shall be
entitled to refrain  from such act or taking  such  action  unless and until the
Agent shall have received instructions from the Majority Lenders or the Required
Lenders, as applicable, and the Agent shall not incur liability to any Person by
reason of so refraining.  Without  limiting the foregoing,  no Lender shall have
any right of action whatsoever against the Agent as a result of the Agent acting
or refraining from acting  hereunder in accordance with the  instructions of the
Majority Lenders or the Required Lenders, as applicable.

     10.5 Reliance by Agent.  The Agent shall be entitled to rely,  and shall be
fully  protected  in  relying,  upon  any  note,  writing,  resolution,  notice,
statement,  certificate,  telex,  teletype  or  telecopier  message,  cablegram,
radiogram,  order or other  documentary,  teletransmission  or telephone message
believed by it to be genuine and correct and to have been  signed,  sent or made
by the  proper  person.  The Agent may  consult  with legal  counsel  (including
counsel for the  Borrower  with  respect to matters  concerning  the  Borrower),
independent public accountants and other experts selected by it and shall not be
liable  for any  action  taken or  omitted  to be  taken by it in good  faith in
accordance with the advice of such counsel, accountants or experts.

     10.6  Indemnification  of Agent.  To the extent the Agent is not reimbursed
and  indemnified  by the Borrower,  each Lender will reimburse and indemnify the
Agent, in proportion to its respective  Commitment,  for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses  (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever  (including all Expenses) which may be imposed on,
incurred by or asserted against the Agent in performing its duties hereunder, in
any way relating to or arising out of this  Agreement,  provided  that no Lender
shall be liable (i) 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,  or (ii) to
compensate  the Agent for amounts owing by Defaulting  Lenders.  The  agreements
contained  in this  Section 10.6 shall  survive any  termination  of this Credit
Agreement  and  the  other  Credit  Documents  and  the  payment  in full of the
obligations.


DSN:54248.4
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     10.7 The Agent in its Individual  Capacity.  With respect to its obligation
to lend  under this  Credit  Agreement,  the Loans made by it and the  Revolving
Notes issued to it, and its participation in Letters of Credit issued hereunder,
the Agent shall have the same rights and powers hereunder as any other Lender or
holder of a Revolving Note or participation  interests and may exercise the same
as though it was not  performing  the  duties  specified  herein;  and the terms
"Lenders," "Majority Lenders," "Required Lenders," "holders of Revolving Notes,"
or any similar  terms shall,  unless the context  clearly  otherwise  indicates,
include  the Agent in its  individual  capacity.  The Agent may accept  deposits
from,  lend money to, acquire equity  interests in, and generally  engage in any
kind of banking,  trust,  financial advisory or other business with the Borrower
or any  Affiliate  of the  Borrower  as if it were  not  performing  the  duties
specified herein, and may accept fees and other  consideration from the Borrower
for services in connection  with this Credit  Agreement  and  otherwise  without
having to account for the same to the Lenders.

     10.8  Holders  of  Notes.  The  Agent  may deem and  treat the payee of any
Revolving  Note as the owner thereof for all purposes  hereof unless and until a
written notice of the assignment or transfer  thereof shall have been filed with
the Agent.  Any request,  authority or consent of any Person who, at the time of
making such request or giving such  authority  or consent,  is the holder of any
Revolving  Note,  shall be  conclusive  and  binding on any  subsequent  holder,
transferee  or  assignee  of such  Revolving  Note or of any  Revolving  Note or
Revolving Notes issued in exchange therefor.

     10.9 Successor Agent.

          (a) The Agent may, upon five (5) Business  Days' notice to the Lenders
and the  Borrower,  resign  at any time  (effective  upon the  appointment  of a
successor  Agent  pursuant to the  provisions  of this  Section  10.9) by giving
written notice thereof to the Lenders and the Borrower.  Such resignation of the
Agent shall also operate as a  resignation  of the Issuing  Bank.  Upon any such
resignation,  the  Majority  Lenders  shall have the right,  upon five (5) days'
notice and approval by the Borrower  (which  approval shall not be  unreasonably
withheld),  to appoint a successor  Agent  which  shall also serve as  successor
Issuing Bank. If no successor Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment, within thirty (30) days after
the retiring Agent's giving of notice of resignation,  then, upon five (5) days'
notice,  the retiring  Agent may, on behalf of the Lenders,  appoint a successor
Agent reasonably acceptable to the Borrower, which shall also serve as successor
Issuing Bank.

          (b) Upon the  acceptance of any  appointment  as Agent  hereunder by a
successor  Agent,  such successor  Agent shall  thereupon  succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Credit  Agreement.  After any  retiring  Agent's  resignation  hereunder as
Agent,  the  provisions  of this Article 10 shall inure to its benefit as to any
actions  taken or omitted to be taken by it while it was Agent under this Credit
Agreement.

          (c) In the  event of a  material  breach  by the  Agent of its  duties
hereunder,  the Agent may be removed by the  Majority  Lenders  (other  than the
Agent and without giving effect to

DSN:54248.4
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<PAGE>



any  Revolving  Loans  or  Commitments  made by the  Agent)  for  cause  and the
provisions  of this Section 10.9 shall apply to the  appointment  of a successor
Agent.  Such removal of the Agent shall also operate as a removal of the Issuing
Bank.

     10.10 Collateral Matters.

          (a) Each  Lender  authorizes  and  directs the Agent to enter into the
Collateral Documents for the benefit of the Lenders.  Each Lender hereby agrees,
and each holder of any Revolving Note by the  acceptance  thereof will be deemed
to agree,  that,  except as otherwise set forth herein,  any action taken by the
Majority Lenders or the Required Lenders, as applicable,  in accordance with the
provisions  of  this  Credit  Agreement  or the  Collateral  Documents,  and the
exercise by the Majority Lenders or the Required Lenders, as applicable,  of the
powers set forth  herein or  therein,  together  with such  other  powers as are
reasonably  incidental thereto,  shall be authorized and binding upon all of the
Lenders. The Agent is hereby authorized on behalf of all of the Lenders, without
the necessity of any notice to or further consent from any Lender,  from time to
time  prior to an Event of  Default,  to take any  action  with  respect  to any
Collateral  or  Collateral  Documents  which may be  necessary  to  perfect  and
maintain  perfected  the  security  interest  in and liens  upon the  Collateral
granted pursuant to the Collateral Documents.

          (b) The Lenders hereby  authorize the Agent,  at its option and in its
discretion,  to  release  any  Lien  granted  to or held by the  Agent  upon any
Collateral (i) upon  termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this Credit
Agreement or the Credit  Documents or the  transactions  contemplated  hereby or
thereby,  (ii)  constituting  property being sold or disposed of upon receipt of
the  proceeds  of such sale by the Agent and  application  of such  proceeds  in
accordance with Section 3.5 hereof, if the Borrower  certifies to the Agent that
the sale or disposition  is made in compliance  with Section 8.7 hereof (and the
Agent may rely conclusively on any such certificate, without further inquiry) or
(iii) if approved,  authorized  or ratified in writing by the Required  Lenders,
unless such release is required to be approved by all of the Lenders pursuant to
Section  11.10 hereof.  Upon request by the Agent at any time,  the Lenders will
confirm in writing the Agent's authority to release particular types or items of
Collateral pursuant to this Section 10.10.

          (c) Upon  any  sale and  transfer  of  Collateral  which is  expressly
permitted  pursuant to the terms of this Credit  Agreement,  or  consented to in
writing by the Majority Lenders or all of the Lenders,  as applicable,  and upon
at least five (5) Business  Days' prior  written  request by the  Borrower,  the
Agent  shall (and is hereby  irrevocably  authorized  by the Lenders to) execute
such  documents as may be necessary to evidence the release of the Liens granted
to the Agent for the benefit of the Lenders  herein or pursuant  hereto upon the
Collateral that was sold or  transferred;  provided that (i) the Agent shall not
be required to execute any such document on terms which, in the Agent's opinion,
would  expose  the Agent to  liability  or create any  obligation  or entail any
consequence  other than the release of such Liens  without  recourse or warranty
and (ii) such release  shall not in any manner  discharge,  affect or impair the
obligations or any Liens upon (or  obligations of the Borrower or any Subsidiary
in respect of) all interests retained by the Borrower or any

DSN:54248.4
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<PAGE>



Subsidiary,  including  (without  limitation)  the proceeds of the sale,  all of
which shall  continue to constitute  part of the  Collateral,  unless  otherwise
agreed to in writing in advance by the Borrower  and the Agent.  In the event of
any sale or transfer of Collateral,  or any  foreclosure  with respect to any of
the  Collateral,  the Agent shall be  authorized  to deduct all of the  Expenses
reasonably incurred by the Agent from the proceeds of any such sale, transfer or
foreclosure.

          (d) The Agent shall have no obligation whatsoever to the Lenders or to
any  other  Person  to  assure  that the  Collateral  exists  or is owned by the
Borrower or any  Subsidiary  or is cared for,  protected  or insured or that the
Liens  granted to the Agent  herein or  pursuant  hereto  have been  properly or
sufficiently  or  lawfully  created,  perfected,  protected  or  enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care,  disclosure  or fidelity  any of
the rights,  authorities  and powers  granted or  available to the Agent in this
Section 10.10 or in any of the  Collateral  Documents,  it being  understood and
agreed that in respect of the Collateral,  or any act, omission or event related
thereto,  the Agent may act in any manner it may deem  appropriate,  in its sole
discretion,  given the Agent's  own  interest  in the  Collateral  as one of the
Lenders and that the Agent  shall have no duty or  liability  whatsoever  to the
Lenders, except for its gross negligence or willful misconduct.

     10.11 Actions with Respect to Defaults. In addition to the Agent's right to
take actions on its own accord as  permitted  under this Credit  Agreement,  the
Agent shall take such  action  with  respect to a Default or Event of Default as
shall be directed by the Majority  Lenders;  provided that until the Agent shall
have  received  such  directions,  the Agent may (but shall not be obligated to)
take such  action,  or refrain  from taking such  action,  with  respect to such
Default or Event of Default as it shall deem advisable and in the best interests
of the Lenders.

     10.12 Delivery of  Information.  The Agent shall not be required to deliver
to any  Lender  originals  or copies  of any  documents,  instruments,  notices,
communications or other information received by the Agent from the Borrower, any
Subsidiary,  the Majority Lenders, the Required Lenders, any Lender or any other
Person  under or in  connection  with this Credit  Agreement or any other Credit
Document  except (i) as  specifically  provided in this Credit  Agreement or any
other Credit  Document and (ii) as  specifically  requested from time to time in
writing by any Lender with respect to a specific document, instrument, notice or
other written  communication  received by and in the  possession of the Agent at
the time of  receipt  of such  request  and then  only in  accordance  with such
specific request.

ARTICLE 11.   Miscellaneous

     11.1 SUBMISSION TO JURISDICTION;  WAIVERS.  THE BORROWER HEREBY IRREVOCABLY
AND UNCONDITIONALLY:

          (a)  SUBMITS  FOR  ITSELF  AND ITS  PROPERTY  IN ANY  LEGAL  ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS TO WHICH IT
IS A PARTY, OR FOR RECOGNITION AND ENFORCEMENT

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OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NONEXCLUSIVE  GENERAL JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK,  THE COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF;

          (b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH
COURTS AND WAIVES ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE VENUE
OF ANY SUCH  ACTION  OR  PROCEEDING  IN ANY SUCH  COURT OR THAT  SUCH  ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM
THE SAME;

          (c) AGREES THAT  SERVICE OF PROCESS IN ANY SUCH  ACTION OR  PROCEEDING
MAY BE EFFECTED BY MAILING A COPY THEREOF BY  REGISTERED  OR CERTIFIED  MAIL (OR
ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SUBSECTION 11.5 OR AT SUCH OTHER ADDRESS OF WHICH THE AGENT
SHALL HAVE BEEN NOTIFIED PURSUANT THERETO;

          (d)  AGREES  THAT  NOTHING  HEREIN  SHALL  AFFECT  THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT
TO SUE IN ANY OTHER JURISDICTION;

          (e) WAIVES THE RIGHT TO ASSERT ANY  SETOFF,  COUNTERCLAIM  (OTHER THAN
COMPULSORY   COUNTERCLAIMS)   OR  CROSS-CLAIM  IN  RESPECT  OF  SUCH  ACTION  OR
PROCEEDING; AND

          (f) WAIVES DUE  DILIGENCE,  DEMAND,  PRESENTMENT  AND  PROTEST AND ANY
NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT.

     11.2 JURY TRIAL. THE BORROWER,  THE AGENT, THE ISSUING BANK AND THE LENDERS
EACH  HEREBY  WAIVE  ANY RIGHT TO A TRIAL BY JURY IN ANY  ACTION  OR  PROCEEDING
ARISING  OUT OF  THIS  CREDIT  AGREEMENT,  THE  CREDIT  DOCUMENTS  OR ANY  OTHER
AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.

     11.3 GOVERNING LAW. THE VALIDITY,  INTERPRETATION  AND  ENFORCEMENT OF THIS
CREDIT  AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

     11.4  Delays:  Partial  Exercise of  Remedies.  No delay or omission of the
Agent,  the  Issuing  Bank or the  Lenders  to  exercise  any  right  or  remedy
hereunder,  whether before or after the happening of any Event of Default, shall
impair any such right or shall operate as a waiver thereof or as a waiver

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of any such Event of Default.  No single or partial  exercise by the Agent,  the
Issuing Bank or the Lenders of any right or remedy  shall  preclude any other or
further exercise thereof, or preclude any other right or remedy.

     11.5  Notices.  Except  as  otherwise  provided  herein,  all  notices  and
correspondences  hereunder  shall  be  in  writing  and  sent  by  certified  or
registered mail,  return receipt  requested,  or by overnight  delivery service,
with all  charges  prepaid,  if to the  Agent,  the  Issuing  Bank or any of the
Lenders,  then to BT Commercial  Corporation,  One BT Plaza, 130 Liberty Street,
New York, NY 10006,  Attention:  Frank Chiovari, and if to the Borrower, then to
Borrower at 380 Middlesex Avenue, Carteret, New Jersey 07008, Attention: Richard
Neff, or by facsimile transmission,  promptly confirmed in writing sent by first
class mail, if to the Agent, or any of the Lenders, at (212) 669-0090, and if to
the Borrower at (732)  541-3730.  All such notices and  correspondence  shall be
deemed  given (i) if sent by certified or  registered  mail,  three (3) Business
Days after being postmarked,  (ii) if sent by overnight  delivery service,  when
received at the above stated  addresses or when delivery is refused and (iii) if
sent  by  facsimile   transmission,   when  receipt  of  such   transmission  is
acknowledged.

     11.6 Assignability.

          (a) The  Borrower  shall  not have the  right to  assign  this  Credit
Agreement or any interest  therein except with the prior written  consent of the
Agent and the Lenders.

          (b) Any Lender  may make,  carry or  transfer  Loans at, to or for the
account  of, any of its branch  offices  or the office of an  Affiliate  of such
Lender except to the extent such transfer would result in increased costs to the
Borrower.

          (c) Each  Lender may,  with the consent of the Agent and the  Borrower
(such consent not to be unreasonably  withheld),  but without the consent of any
other Lender, assign to one or more banks or other financial institutions all or
a portion of its rights and  obligations  under this  Credit  Agreement  and the
Revolving Notes; provided that (i) for each such assignment, the parties thereto
shall execute and deliver to the Agent,  for its acceptance and recording in the
Register (as defined below),  an Assignment and Assumption  Agreement,  together
with any  Revolving  Note or Revolving  Notes subject to such  assignment  and a
processing and recordation  fee of $2,500 and (ii) no such  assignment  shall be
for less than  $5,000,000  of the  Commitments,  unless such  assignment is to a
then-current holder of a Revolving Note. Upon such execution and delivery of the
Assignment  and  Assumption  Agreement  to the  Agent,  from and  after the date
specified as the effective date in the Assignment and Assumption  Agreement (the
"Acceptance Date"), (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 Assumption  Agreement,  such assignee shall have
the rights and obligations of a Lender hereunder and (y) the assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Assumption  Agreement,  relinquish its rights
(other than any rights it may have  pursuant to Section  11.8 hereof  which will
survive) and be released from its obligations under this

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Agreement (and, in the case of an Assignment and Assumption  Agreement  covering
all or the remaining  portion of an assigning  Lender's  rights and  obligations
under this Credit Agreement, such Lender shall cease to be a party hereto).

          (d)  By  executing  and   delivering  an  Assignment   and  Assumption
Agreement,  the assignee  thereunder  confirms and agrees as follows:  (i) other
than as provided in such  Assignment  and  Assumption  Agreement,  the 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 Credit Agreement, the
Revolving Notes 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 the Borrower or any
other Credit  Parties or the  performance  or  observance by the Borrower or any
other Credit Parties of any of its  obligations  under this Credit  Agreement or
any other instrument or document furnished pursuant hereto,  (iii) such assignee
confirms  that it has received a copy of this Credit  Agreement,  together  with
copies of the  financial  statements  referred to in Section 7.1 hereof 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  Assumption
Agreement,  (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 Credit Agreement, (v)
such assignee  appoints and authorizes the Agent to take such action as agent on
its behalf and to  exercise  such  powers  under this  Credit  Agreement  as are
delegated  to the Agent by the terms  hereof,  together  with such powers as are
reasonably incidental thereto and (vi) such assignee agrees that it will perform
in accordance with their terms all of the obligations which by the terms of this
Credit Agreement are required to be performed by it as a Lender.

          (e) The Agent shall  maintain  at its  address  referred to in Section
11.5 hereof a copy of each Assignment and Assumption  Agreement delivered to and
accepted by it and a register for the  recordation of the names and addresses of
the Lenders and the Commitments of, and principal  amount of the Loans 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 the
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  and  copies  of each  Assignment  and  Assumption  Agreement  shall be
available for  inspection by the Borrower or any Lender at any  reasonable  time
and from time to time upon reasonable prior notice.

          (f)  Upon  its  receipt  of an  Assignment  and  Assumption  Agreement
executed by an assigning  Lender,  together with the Revolving Note or Revolving
Notes  subject to such  assignment,  the Agent  shall,  if such  Assignment  and
Assumption  Agreement  has been  completed and is in  substantially  the form of
Exhibit I, (i) accept such Assignment and Assumption Agreement,  (ii) record the
information  contained  therein in the  Register  and (iii) give  prompt  notice
thereof to the Borrower. Within five (5) Business Days after its receipt of such
notice, the Borrower shall

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execute and deliver to the Agent in exchange for the surrendered  Revolving Note
or Revolving  Notes a new Revolving Note or Revolving  Notes to the order of the
assignee  in an amount  equal to the  Commitment  or  Commitments  assumed by it
pursuant to such  Assignment  and  Assumption  Agreement  and, if the  assigning
Lender has retained a Commitment or Commitments  hereunder, a new Revolving Note
or Revolving  Notes to the order of the  assigning  Lender in an amount equal to
the Commitment or Commitments retained by it hereunder.  Such new Revolving Note
or Revolving Notes shall re-evidence the indebtedness  outstanding under the old
Revolving Note or Revolving Notes and shall be in an aggregate  principal amount
equal to the aggregate  principal amount of such  surrendered  Revolving Note or
Revolving  Notes,  shall be dated the  Closing  Date and shall  otherwise  be in
substantially  the form of the Revolving Note or Revolving Notes subject to such
assignments.

          (g) Each Lender may sell  participations  (without  the consent of the
Agent,  the Borrower or any other Lender) to one or more parties in or to all or
a portion of its rights and obligations under this Credit Agreement  (including,
without limitation,  all or a portion of its Commitments,  the Loans owing to it
and the Revolving  Note or Revolving  Notes held by it);  provided that (i) such
Lender's obligations under this Credit Agreement (including, without limitation,
its Commitments to the 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  Revolving  Note for all  purposes of this Credit  Agreement,  (iv) the
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 Credit Agreement and (v) such Lender shall not transfer,
grant,  assign or sell any participation  under which the participant shall have
rights to approve any amendment or waiver of this Credit Agreement except to the
extent such  amendment or waiver would (A) extend the final maturity date or the
date for the payments of any installment of fees or principal or interest of any
Loans or Letter of Credit reimbursement obligations in which such participant is
participating,  (B) reduce the amount of any  installment  of  principal  of the
Loans or Letter of Credit reimbursement obligations in which such participant is
participating,  (C)  except  as  otherwise  expressly  provided  in this  Credit
Agreement,  reduce the interest rate applicable to the Loans or Letter of Credit
reimbursement  obligations in which such  participant is  participating,  or (D)
except as otherwise expressly provided in this Credit Agreement, reduce any Fees
payable hereunder.

          (h) Each Lender agrees that,  without the prior written consent of the
Borrower and the Agent, it will not make any assignment  hereunder in any manner
or under any circumstances that would require  registration or qualification of,
or filings in respect of, any Loan, Revolving Note or other Obligation under the
securities laws of the United States of America or of any jurisdiction.

     11.7  Confidentiality.  Each Lender  shall hold all  nonpublic  information
which it has  obtained  pursuant  to this  Credit  Agreement  and which has been
identified  as such by the Borrower in accordance  with such Lender's  customary
procedures and required procedures for handling confidential information of this
nature, but in any event any Lender may make disclosure  reasonably  required by
any bona fide  transferee or  participant  in connection  with the  contemplated
transfer of any Loans or  participations  therein or as required or requested by
any governmental agency or

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representative  thereof or  pursuant to legal  process,  provided  that,  unless
specifically  prohibited  by  applicable  law or court order,  each Lender shall
notify the Borrower of its receipt of any request by any governmental  agency or
representative  thereof  (other  than any such  request  in  connection  with an
examination  of the  financial  condition  of such  Lender by such  governmental
agency) for disclosure of any such non-public information prior to disclosure of
such  information,  and  provided  further  that in no event shall any Lender be
obligated or required to return any materials  furnished by the  Borrower.  Each
Lender agrees that it will not provide to prospective assignees,  transferees or
participants  any of the  non-public  information  referred to above unless such
Person  agrees to be bound by the  terms of  confidentiality  contained  in this
Section 11.7.

     11.8  Indemnification.  The Borrower  shall and hereby agrees to indemnify,
defend and hold harmless the Agent, the Issuing Bank and each of the Lenders and
their respective  directors,  officers,  agents,  employees and counsel from and
against  (a) any and all losses,  claims,  damages,  liabilities,  deficiencies,
judgments  or expenses  incurred by any of them (except to the extent that it is
finally  judicially  determined to have resulted from their own gross negligence
or  willful  misconduct)  arising  out  of  or by  reason  of  any  litigations,
investigations,  claims  or  proceedings  which  arise  out of or are in any way
related to (i) this Credit Agreement or the transactions  contemplated  thereby,
(ii) the  issuance  of the  Letters of Credit,  (iii) the failure of the Issuing
Bank to honor a drawing  under any Letter of  Credit,  as a result of any act or
omission,  whether rightful or wrongful,  of any present or future de jure or de
facto government or governmental  authority,  (iv) any actual or proposed use by
the  Borrower of the proceeds of the  Revolving  Loans or (v) the Agent's or the
Lenders' entering into this Credit Agreement,  the other Credit Documents or any
other agreements and documents relating hereto,  including,  without limitation,
amounts  paid in  settlement,  court  costs  and the fees and  disbursements  of
counsel incurred in connection with any such litigation, investigation, claim or
proceeding or any advice  rendered in  connection  with any of the foregoing and
(b) any such losses, claims, damages,  liabilities,  deficiencies,  judgments or
expenses  incurred in connection  with any remedial or other action taken by the
Borrower or any of the Lenders in connection  with compliance by the Borrower or
any of  the  Subsidiaries,  or any of  their  respective  properties,  with  any
federal,  state or local environmental laws, acts, rules,  regulations,  orders,
directions,  ordinances,  criteria or guidelines.  If and to the extent that the
obligations  of the Borrower  hereunder are  unenforceable  for any reason,  the
Borrower  hereby  agrees to make the  maximum  contribution  to the  payment and
satisfaction of such obligations  which is permissible under applicable law. The
Borrower's  obligations  hereunder  shall survive any termination of this Credit
Agreement  and  the  other  Credit  Documents  and  the  payment  in full of the
Obligations,  and are in addition to, and not in  substitution  of, any other of
their obligations set forth in this Credit Agreement.  In addition, the Borrower
shall,  upon  demand,  pay to the Agent and any Lender  all costs and  expenses,
including  the  reasonable   fees  and   disbursements   of  counsel  and  other
professionals (it being understood,  however,  that the Borrower shall be liable
for the reasonable fees and disbursements of counsel,  and other  professionals,
paid or  incurred  by any  Lender  only  after the  occurrence  and  during  the
continuance of an Event of Default) paid or incurred by the Agent or such Lender
in (i)  enforcing  or  defending  its rights  under or in respect of this Credit
Agreement, the other Credit Documents or any other document or instrument now or
hereafter executed and delivered in connection herewith,  (ii) in collecting the
Loans, (iii) in foreclosing or otherwise collecting upon the

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Collateral or any part thereof and (iv) obtaining any legal, accounting or other
advice in connection with any of the foregoing.

      11.9 Entire Agreement: Successors and Assigns. This Credit Agreement
and the  other  Credit  Documents  constitute  the  entire  agreement  among the
Borrower, the Agent and the Lenders, supersedes any prior agreements among them,
and shall bind and benefit  the  Borrower  and the Lenders and their  respective
successors and permitted assigns.

     11.10  Amendments,  Etc. No  amendment  or waiver of any  provision of this
Credit Agreement or any other Credit  Document,  nor consent to any departure by
any Credit  Party  therefrom,  shall in any event be  effective  unless the same
shall be in writing and signed by the Majority Lenders,  or if the Lenders shall
not be parties thereto,  by the parties thereto and consented to by the Majority
Lenders,  and each such amendment,  waiver or consent shall be effective only in
the specific  instance and for the  specific  purpose for which given;  provided
that no amendment,  waiver or consent shall, unless in writing and signed by all
the  Lenders,  do any of the  following:  (i) increase  the  Commitments  of the
Lenders or subject the  Lenders to any  additional  obligations,  (ii) except as
otherwise  expressly  provided in this  Agreement,  reduce the  principal of, or
interest  on,  the  Revolving  Notes  or  any  Letter  of  Credit  reimbursement
obligations or any fees hereunder, (iii) postpone any date fixed for any payment
in respect of principal of, or interest on, the Revolving Notes or any Letter of
Credit  reimbursement  obligations  or  any  fees  hereunder,  (iv)  change  the
percentage  of the  Commitments,  or any minimum  requirement  necessary for the
Lenders or the  Majority  Lenders to take any  action  hereunder,  (v) except as
otherwise  expressly  provided  in this  credit  Agreement,  and  other  than in
connection  with the financing,  refinancing,  sale or other  disposition of any
asset of the Borrower  permitted under this Credit Agreement,  release any Liens
in favor of the Lenders on all or such  substantially all of the Collateral,  or
(vi) amend or waive this Section  11.10,  or change the  definition  of Majority
Lenders or Required Lenders and provided,  further, that no amendment, waiver or
consent  affecting  the rights or duties of the Agent or the Issuing  Bank under
any Credit  Document  shall in any event be  effective,  unless in  writing  and
signed by the Agent and/or the Issuing Bank, as  applicable,  in addition to the
Lenders  required  hereinabove to take such action.  Notwithstanding  any of the
foregoing to the contrary, the consent of the Borrower shall not be required for
any  amendment,  modification  or waiver of the  provisions  of  Article  10. In
addition, the Borrower and the Lenders hereby authorize the Agent to modify this
Credit Agreement by unilaterally  amending or supplementing Annex I from time to
time in the manner  requested by the Borrower,  the Agent or any Lender in order
to reflect any  assignments or transfers of the Loans as provided for hereunder;
provided,  however,  that the Agent  shall  promptly  deliver a copy of any such
modification to the Borrower and each Lender.

     11.11  Nonliability  of Agent and  Lenders.  The  relationship  between the
Borrower  and the Lenders  and the Agent  shall be solely  that of borrower  and
lender.   Neither   the  Agent  nor  any  Lender   shall   have  any   fiduciary
responsibilities  to the Borrower.  Neither the Agent nor any Lender  undertakes
any  responsibility  to the  Borrower  to review or inform the  Borrower  of any
matter in connection with any phase of the Borrower's business or operations.


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     11.12  Independent  Nature of Lenders'  Rights.  The amounts payable at any
time hereunder to each Lender under such Lender's  Revolving Note or Notes shall
be a separate and independent debt.

     11.13 Counterparts.  This Credit Agreement may be executed in any number of
counterparts and by the different parties hereto in separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together constitute one and the same instrument.

     11.14  Effectiveness.  This Credit  Agreement shall become effective on the
date on which all of the parties hereto shall have signed a copy hereof (whether
the same or  different  copies) and shall have  delivered  the same to the Agent
pursuant to Section 11.6 or, in the case of the Lenders, shall have given to the
Agent  written,  telecopied or telex notice  (actually  received) at such office
that the same has been signed and mailed to it.

     11.15  Severability.  In case any  provision  in or  obligation  under this
Credit  Agreement or the Revolving Notes or the other Credit  Documents shall be
invalid,  illegal or unenforceable in any jurisdiction,  the validity,  legality
and  enforceability  of the  remaining  provisions  or  obligations,  or of such
provision  or  obligation  in any  other  jurisdiction,  shall not in any way be
affected or impaired thereby.

     11.16  Headings  Descriptive.  The  headings  of the several  sections  and
subsections of this Credit  Agreement,  and the Table of Contents,  are inserted
for convenience only and shall not in any way affect the meaning or construction
of any provision of this Credit Agreement.

     11.17  Maximum  Rate.  Notwithstanding  anything to the contrary  contained
elsewhere  in  this  Credit  Agreement  or in any  other  Credit  Document,  the
Borrower,  the Agent and the Lenders hereby agree that all agreements among them
under this Credit Agreement and the other Credit Documents, whether now existing
or hereafter  arising and whether written or oral, are expressly limited so that
in no  contingency  or event  whatsoever  shall the amount paid, or agreed to be
paid, to the Agent or any Lender for the use,  forbearance,  or detention of the
money  loaned  to the  Borrower  and  evidenced  hereby  or  thereby  or for the
performance  or  payment  of any  covenant  or  obligation  contained  herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance  whatsoever,
fulfillment  of any  provisions  of this  Credit  Agreement  or any of the other
Credit  Documents at the time  performance of such provision  shall be due shall
exceed the Highest  Lawful  Rate,  then,  automatically,  the  obligation  to be
fulfilled  shall be  modified or reduced to the extent  necessary  to limit such
interest to the  Highest  Lawful  Rate,  and if from any such  circumstance  any
Lender should ever receive  anything of value deemed  interest by applicable law
which would exceed the Highest  Lawful Rate,  such  excessive  interest shall be
applied to the reduction of the principal amount then  outstanding  hereunder or
on account of any other then  outstanding  Obligations and not to the payment of
interest,  or if such excessive  interest  exceeds the principal  unpaid balance
then  outstanding  hereunder and such other then outstanding  Obligations,  such
excess shall be refunded to the Borrower.  All sums paid or agreed to be paid to
the  Agent  or  any  Lender  for  the  use,  forbearance,  or  detention  of the
Obligations and other indebtedness of the Borrower to the Agent or

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<PAGE>



any Lender  shall,  to the extent  permitted by  applicable  law, be  amortized,
prorated,  allocated and spread  throughout  the full term of such  indebtedness
until payment in full so that the actual rate of interest on account of all such
indebtedness  does not exceed the Highest Lawful Rate throughout the entire term
of such  indebtedness.  The terms and  provisions  of this Section shall control
every other  provision of this Credit  Agreement  and all  agreements  among the
Borrower, the Agent and the Lenders.

     11.18 Right of Setoff.  In addition to and not in  limitation of all rights
of offset that any Lender or the  Issuing  Bank may have under  applicable  law,
each Lender and the  Issuing  Bank shall,  upon the  occurrence  of any Event of
Default and whether or not such Lender, the Issuing Bank or such holder has made
any demand or the Obligations of any credit Party are matured, have the right to
appropriate and apply to the payment of the obligations of such Credit Party all
deposits  (general or  special,  time or demand,  provisional  or final) then or
thereafter held by and other  indebtedness or property then or thereafter  owing
by such Lender, the Issuing Bank or other holder,  including without limitation,
any  and  all  amounts  in  any  Depositary  Account,  the  BT  Account  or  the
Disbursement  Accounts.  Any amount received as a result of the exercise of such
rights shall be reallocated  among the Lenders and the Issuing Bank as set forth
in Section 3.9 hereof."

     11.19 No Novation.  It is expressly  understood and agreed by and among all
of the  parties  to this  Credit  Agreement  that  nothing  contained  herein is
intended to create,  nor shall anything  contained herein be deemed to create, a
novation of the indebtedness  outstanding under the Initial  Agreement,  and the
Borrower's  continuing  obligation for the payment when due, without offset, and
performance,  of such indebtedness,  and all other Obligations  arising under or
relating to the Initial Agreement, is hereby ratified and reaffirmed.

     IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be executed and delivered by their proper and duly authorized officers as of the
date set forth above.

                                    BORROWER:

                                    DI GIORGIO CORPORATION


                                    By:   /s/ Robert A. Zorn
                                       ---------------------------------
                                       Title:  Senior Vice President

                                    AGENT:

                                    BT COMMERCIAL CORPORATION,
                                    As Agent


                                    By:   /s/ Frank A. Chiovari
                                       ---------------------------------
                                       Title:  Vice President


DSN:54248.4
                                       82
<PAGE>



                                    ISSUING BANK:

                                    DEUTSCHE BANK AG NEW YORK


                                    By:   /s/ Frank A. Chiovari
                                       ---------------------------------
                                       Title:  Vice President



                     [Signatures Continued on the Next Page]


DSN:54248.4
                                       83

<PAGE>


                  [Signatures Continued From the Previous Page]

                                    LENDERS:

                                    BT COMMERCIAL CORPORATION


                                   By:   /s/ Frank A. Chiovari
                                       ---------------------------------
                                       Title:  Vice President


                                    LASALLE BANK NATIONAL ASSOCIATION,
                                    formerly known as LaSalle National Bank


                                    By:  /s/ Christopher G. Clifford
                                       ---------------------------------
                                       Title:  Senior Vice President


                                    BANCO POPULAR


                                    By:   /s/ Joseph C. LoMonaco
                                       ---------------------------------
                                       Title:  Vice President


                                    CONGRESS FINANCIAL CORPORATION


                                    By:   /s/ Thomas McGregor
                                       ---------------------------------
                                       Title:  Vice President


                                    PNC BANK


                                    By:   /s/ Michael Richards
                                       ---------------------------------
                                       Title:  Vice President


                                    SUMMIT COMMERCIAL/GIBRALTAR CORP.


                                    By:   /s/ Alan M. Lapidus
                                       ---------------------------------
                                       Title:  Senior Vice President


DSN:54248.4


                                      84

<PAGE>



                                                                         ANNEX I

                         LENDERS AND COMMITMENT AMOUNTS


Name and Address of Lender                           Revolving Credit Commitment

BT Commercial Corporation                                            $24,500,000

Domestic and Eurodollar
Lending Office and Address
for Notices:

130 Liberty Street
New York, New York 10006

Attention:     Frank Chiovari
Telecopy No.:  (212) 669-0835

Congress Financial Corporation                                       $24,250,000

Domestic and Eurodollar
Lending Office and Address
for Notices:

1133 Avenue of the Americas
New York, New York 10036

Attention:     Thomas McGregor
Telecopy No.:  (212) 545-4283

Summit Commercial/Gibraltar Corporation                              $14,900,000

Domestic and Eurodollar
Lending Office and Address
for Notices:

350 Fifth Avenue
New York, New York 10118

Attention:     Peter Hollitscher
Telecopy No.:  (212) 398-6990


DSN:54248.4
                                       85

<PAGE>



Banco Popular                                                         $5,000,000

Domestic and Eurodollar
Lending Office and Address
for Notices:

7 West 51st Street - 2nd Floor
New York, New York 10019

Attention:     Joseph Lomonaco
Telecopy No.:  (212) 586-3537

PNC Bank                                                              $9,250,000

Domestic and Eurodollar
Lending Office and Address
for Notices:

Two Tower Center
East Brunswick, New Jersey 08816

Attention:     Michael Richards
Telecopy No.:  (732) 220-3800

LaSalle Bank National Association                                    $12,100,000

Domestic and Eurodollar
Lending Office and Address
for Notices:

120 South LaSalle Street
Chicago, Illinois 60603

Attention:     Chris Clifford
Telecopy No.:  (312) 904-6450



                                                                     ===========
TOTAL COMMITMENTS                                                    $90,000,000


DSN:54248.4
                                       86