AMENDED AND RESTATED CREDIT AGREEMENT


     THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"),  dated as of
July 27, 1998, is among SOS STAFFING  SERVICES,  INC., a Utah  corporation  (the
"Borrower"),  THE FIRST NATIONAL BANK OF CHICAGO, a national banking association
("First  Chicago"),  FIRST SECURITY BANK, N.A., a national  banking  association
("First  Security"),  those other  lenders from time to time party hereto (First
Chicago,  First  Security  and such  other  lenders  being  referred  to  herein
individually as a "Lender" and collectively as the "Lenders"), First Chicago, as
documentation  agent  for the  Lenders  (in such  capacity,  the  "Documentation
Agent"),  and First Security,  as administrative  agent for the Lenders (in such
capacity, the "Administrative Agent"). The parties hereto agree as follows:


                                    RECITALS

         A. Pursuant to that certain Credit  Agreement dated as of July 11, 1996
among the Borrower,  First Chicago and First  Security (as amended to date,  the
"Existing  Credit  Agreement"),  First Chicago and First  Security have extended
credit to the  Borrower  on the terms and  subject to the  conditions  set forth
therein.

         B. The parties to the  Existing  Credit  Agreement  desire to amend the
Existing  Credit  Agreement and, for  convenience  of reference,  to restate the
Existing Credit Agreement as so amended in its entirety by this Agreement.

         NOW,  THEREFORE,  in  consideration of the above Recitals and for other
good and  valuable  consideration,  the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:


                                    ARTICLE I

                                   DEFINITIONS
                                   -----------

     As used in this Agreement:

     "Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially  all
of the  assets  of any  firm,  partnership,  corporation  or  limited  liability
company,  or division  thereof,  whether through  purchase of assets,  merger or
otherwise or (ii) directly or indirectly  acquires (in one transaction or as the
most recent  transaction  in a series of  transactions)  at least a majority (in
number of votes) of the securities of a corporation  which have ordinary  voting
power for the election of  directors  (other than  securities  having such power
only by reason of the happening of a  contingency)  or a majority (by percentage
or voting power) of the  outstanding  ownership  interests of a  partnership  or
limited liability company.

     "Adjusted  EBITDA" means,  calculated for the four full consecutive  fiscal
quarters ending on the date of determination,  the sum of: (i) the EBITDA of the

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Borrower and its Subsidiaries on a consolidated  basis during such period,  plus
(ii) in the event the Borrower or any  Subsidiary  consummates  any  Acquisition
during such period where a proforma  statement in connection  therewith is filed
with the Securities and Exchange  Commission on Form 8-K, the EBITDA of any such
acquired Person for the time during such period prior to such Acquisition.

     "Advance"  means a  borrowing  hereunder  (or  conversion  or  continuation
thereof)  consisting  of the  aggregate  amount of the several Loans made on the
same  Borrowing Date (or date of conversion or  continuation)  by the Lenders to
the Borrower of the same Type and, in the case of Fixed Rate  Advances,  for the
same Interest Period.

     "Affiliate"  of any Person  means any other Person  directly or  indirectly
controlling,  controlled by or under common  control with such Person.  A Person
shall be deemed to control another Person if the controlling  Person owns 10% or
more of any class of voting  securities  (or other  ownership  interests) of the
controlled Person or possesses,  directly or indirectly,  the power to direct or
cause the  direction of the  management  or policies of the  controlled  Person,
whether through ownership of stock, by contract or otherwise.

     "Administrative   Agent"   means  First   Security   in  its   capacity  as
administrative  agent for the  Lenders  pursuant  to  Article  X, and not in its
individual  capacity  as  a  Lender,  and  any  successor  Administrative  Agent
appointed pursuant to Article X.

     "Aggregate  Commitment"  means the aggregate of the  Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.

     "Agreement" means this credit  agreement,  as it may be amended or modified
and in effect from time to time.

     "Agreement  Accounting  Principles"  means  generally  accepted  accounting
principles as in effect from time to time,  applied in a manner  consistent with
that used in preparing the financial statements referred to in Section 5.4.

     "Alternate  Base Rate"  means,  for any day, a rate of  interest  per annum
equal to the  higher  of (i) the  Corporate  Base Rate for such day and (ii) the
Federal Funds Effective Rate for such day plus 1/2% per annum.

     "Applicable  Fee  Rate" in  connection  with  the  commitment  fee  payable
pursuant  to Section 2.5 below  means at any date the  percentage  per annum set
forth  below and  corresponding  to the range of Total  Indebtedness  / Adjusted
EBITDA Ratio under which the Borrower's  Total  Indebtedness  / Adjusted  EBITDA
Ratio (as determined based on the financial statements delivered by the Borrower
pursuant to Section 6.1 below) falls for the fiscal  quarter  ended  immediately
prior to such date. Any adjustment in the Applicable Fee Rate shall be effective
beginning on the first Business Day of the calendar month immediately  following
the date by  which  the  applicable  financial  statements  are  required  to be
delivered  pursuant to Section 6.1 below.  The  Applicable Fee Rate shall be the
highest  percentage  per  annum set forth  below in the  event  such  applicable
financial statements are not delivered in accordance with Section 6.1 below.

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<PAGE>

Total Indebtedness / Adjusted EBITDA Ratio       Applicable Fee Rate
------------------------------------------       -------------------

Less than or equal to 2.25:1.00                      0.25%
Greater than 2.25:1.00                               0.30%

     "Applicable  Margin" in connection with the Eurodollar Rate or the Floating
Rate, as applicable,  means at any date the percentage per annum set forth below
in the  applicable  category  column  and  corresponding  to the  range of Total
Indebtedness  /  Adjusted   EBITDA  Ratio  under  which  the  Borrower's   Total
Indebtedness  / Adjusted  EBITDA  Ratio (as  determined  based on the  financial
statements  delivered by the  Borrower  pursuant to Section 6.1 below) falls for
the fiscal quarter ended  immediately  prior to such date. Any adjustment in the
Applicable Margin shall be effective  beginning on the first Business Day of the
calendar month immediately  following the date by which the applicable financial
statements  are  required to be  delivered  pursuant  to Section 6.1 below.  The
Applicable  Margin shall be the highest  percentage per annum set forth below in
the event such applicable  financial  statements are not delivered in accordance
with Section 6.1 below.

<TABLE>
<CAPTION>

Total Indebtedness / Adjusted           Applicable  Margin in  connection          Applicable Margin in connection with
-----------------------------         -----------------------------------------    ------------------------------------
        EBITDA Ratio                        with the Eurodollar Rate                         the Floating Rate
-----------------------------         -----------------------------------------    ------------------------------------
<S>                                                    <C>                                      <C>
   Less than or equal to 1.50:1.00                     1.000%                                   0%

 Greater than 1.50:1.00 but less than                  1.250%                                   0%
        or equal to 2.25:1.00

        Greater than 2.25:1.00                         1.600%                                   0%
</TABLE>

     "Article"  means an article of this Agreement  unless  another  document is
specifically referenced.

     "Authorized  Officer" means any of the Chairman,  Chief Executive  Officer,
President, Chief Financial Officer or Treasurer of the Borrower, acting singly.

     "Borrower" means SOS Staffing Services,  Inc., a Utah corporation,  and its
successors and assigns.

     "Borrowing Date" means a date on which an Advance is made hereunder.

     "Borrowing Notice" is defined in Section 2.8.

     "Business  Day" means (i) with  respect to any  borrowing,  payment or rate
selection  of  Eurodollar  Advances,  a day (other than a Saturday or Sunday) on
which banks generally are open in Salt Lake City,  Chicago,  Los Angeles and New
York for the conduct of substantially all of their commercial lending activities
and on which  dealings  in United  States  dollars  are carried on in the London
interbank  market and (ii) for all other purposes,  a day (other than a Saturday
or Sunday) on which banks  generally  are open in Salt Lake City and Chicago for
the conduct of substantially all of their commercial lending activities.

     "Capitalized  Lease" of a Person means any lease of Property by such Person
as lessee which would be capitalized on a balance sheet of such Person  prepared
in accordance with Agreement Accounting Principles.

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<PAGE>



     "Capitalized  Lease  Obligations"  of a  Person  means  the  amount  of the
obligations  of such Person under  Capitalized  Leases which would be shown as a
liability  on a  balance  sheet  of such  Person  prepared  in  accordance  with
Agreement Accounting Principles.

     "Change in Control" with respect to the Borrower is deemed to have occurred
at such time as any of the following events shall occur:

         (i) There  shall be  consummated  any  consolidation  and merger of the
Borrower in which the Borrower is not the continuing or surviving corporation or
pursuant to which the voting stock of the Borrower would be converted into cash,
securities or other property; or

         (ii)There is a  report  filed by any person,  including  such  person's
Affiliates, on Schedule 13D or 14D-1 (or any successor schedule, form or report)
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"), disclosing
that such person (for the purposes of this definition only, the term "person" is
used as defined in Section  13(d)(3) or Section  14(d)(2) of the Exchange Act or
any successor  provision to either of the  foregoing)  has become the beneficial
owner  (as the term  "beneficial  owner"  is  defined  under  Rule  13d-3 or any
successor rule or regulation  promulgated under the Exchange Act) of 50% or more
of the  voting  power of the  Borrower's  voting  stock  outstanding;  provided,
however, that a Change in Control shall not be deemed to have occurred if at any
time the Borrower,  any Subsidiary of the Borrower, any employee stock ownership
plan or any other  employee  benefit  plan,  including  any pension  plan of the
Borrower or any  Subsidiary of the Borrower,  or any person holding voting stock
for or pursuant to the terms of such  employee  benefit  plan,  files or becomes
obligated  to file a report  under or in response  to  Schedule  13D or Schedule
14D-1  (or any  successor  schedule,  form or  report)  under the  Exchange  Act
disclosing beneficial ownership by it of shares of voting stock in the Borrower,
whether in excess of 50% or otherwise.

     "Change in Control Notice" is defined in Section 2.18.

     "Code" means the Internal  Revenue  Code of 1986,  as amended,  reformed or
otherwise modified from time to time.

     "Commitment"  means, for each Lender, the obligation of such Lender to make
Loans not  exceeding  the amount for such  Lender set forth in the most  current
commitment   schedule   provided  to  the   Borrower  and  the  Lenders  by  the
Documentation Agent (as such schedule may be modified from time to time pursuant
to the terms hereof,  with the initial commitment schedule being attached hereto
as Schedule 4).

     "Condemnation" is defined in Section 7.8.

     "Contingent  Obligation"  of a Person means any  agreement,  undertaking or
arrangement by which such Person  assumes,  guarantees,  endorses,  contingently
agrees to purchase or provide funds for the payment of, or otherwise  becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other  Person,  or  otherwise  assures any  creditor of such other Person
against loss,  including,  without  limitation,  any comfort  letter,  operating
agreement,  take-or-pay  contract or obligations  in connection  with letters of
credit.

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                                       4
<PAGE>



     "Conversion/Continuation Notice" is defined in Section 2.9.

     "Controlled  Group" means all members of a controlled group of corporations
and all trades or businesses  (whether or not incorporated) under common control
which,  together with the Borrower or any of its Subsidiaries,  are treated as a
single employer under Section 414 of the Code.

     "Corporate  Base Rate" means a rate per annum equal to the  corporate  base
rate of  interest  announced  by the  Administrative  Agent  from  time to time,
changing when and as said corporate base rate changes.

     "Default" means an event described in Article VII.

     "Documentation  Agent" means First Chicago in its capacity as documentation
agent for the Lenders pursuant to Article X, and not in its individual  capacity
as a Lender, and any successor Documentation Agent appointed pursuant to Article
X.

     "EBITDA" means,  for any period and with respect to any Person and all such
Person's  Subsidiaries on a consolidated  basis,  (i) the net earnings (or loss)
after  taxes for such  period  taken as a single  accounting  period,  plus (ii)
depreciation,  depletion and  amortization  expense for such period,  plus (iii)
federal,  state and local income (or equivalent)  taxes paid or accrued for such
period, plus (iv) total interest expense for such period (including amortization
of capitalized  Indebtedness issuance costs), whether paid or accrued (including
the interest  component  of  Capitalized  Leases),  including  all  commissions,
discounts  and other fees and  charges  owed with  respect to letters of credit,
plus (v) extraordinary, unusual or non-recurring losses and non-cash charges for
any disposition of businesses or early  extinguishment  of Indebtedness for such
period,  minus (vi) any cash payments  with respect to any non-cash  charges and
expenses  related to the  disposition of businesses or early  extinguishment  of
Indebtedness  previously  taken  into  account  for such  period,  in each  case
determined in accordance with Agreement  Accounting  Principles and, in the case
of clauses (ii) through (vi), to the extent included in the determination of net
earnings (or loss) for such period.

     "Environmental  Laws" means any and all federal,  state,  local and foreign
statutes, laws, judicial decisions,  regulations,  ordinances, rules, judgments,
orders, decrees, plans, injunctions,  permits, concessions,  grants, franchises,
licenses,  agreements and other  governmental  restrictions  relating to (i) the
protection  of the  environment,  (ii) the  effect of the  environment  on human
health,  (iii)  emissions,  discharges or releases of pollutants,  contaminants,
hazardous substances or wastes into surface water, ground water or land, or (iv)
the manufacture,  processing,  distribution,  use, treatment, storage, disposal,
transport  or handling of  pollutants,  contaminants,  hazardous  substances  or
wastes or the clean-up or other remediation thereof.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of l974,  as
amended from time to time, and any rule or regulation issued thereunder.

     "Eurodollar  Advance" means an Advance which bears interest at a Eurodollar
Rate.

     "Eurodollar Base Rate" means, with respect to a Eurodollar  Advance for the
relevant  Eurodollar  Interest Period, the rate determined by the Administrative
Agent to be the rate at which the Administrative  Agent offers to place deposits
in U.S.  dollars  with  first-class  banks in the  London  interbank  market  at
approximately  11 a.m. (London time) two Business Days prior to the first day of

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                                       5
<PAGE>

such Eurodollar Interest Period, in the approximate amount of the Administrative
Agent's (in its  capacity  as a Lender)  relevant  Eurodollar  Loan and having a
maturity approximately equal to such Eurodollar Interest Period.

     "Eurodollar Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day selected by
the Borrower pursuant to this Agreement.  Such Eurodollar  Interest Period shall
end on the day which corresponds numerically to such date one, two, three or six
months  thereafter,  provided,  however,  that if there  is no such  numerically
corresponding  day in such next,  second,  third or sixth succeeding month, such
Eurodollar  Interest  Period  shall end on the last  Business  Day of such next,
second,  third or sixth succeeding month. If a Eurodollar  Interest Period would
otherwise  end on a day which is not a Business Day,  such  Eurodollar  Interest
Period shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new calendar month, such Eurodollar
Interest Period shall end on the immediately preceding Business Day.

     "Eurodollar Loan" means a Loan which bears interest at a Eurodollar Rate.

     "Eurodollar  Rate"  means,  with  respect to a  Eurodollar  Advance for the
relevant  Eurodollar  Interest  Period,  the sum of (i) the  quotient of (a) the
Eurodollar Base Rate applicable to such Eurodollar  Interest Period,  divided by
(b) one minus the Reserve  Requirement  (expressed  as a decimal)  applicable to
such Eurodollar Interest Period, plus (ii) the Applicable Margin. The Eurodollar
Rate shall be rounded to the next  higher  multiple of 1/16 of 1% if the rate is
not such a multiple.

     "Existing Credit Agreement" has the meaning set forth in Recital A above.

     "Facility  Termination  Date"  means  July 1,  2001,  as such  date  may be
extended by written  agreement of the Borrower,  the  Administrative  Agent, the
Documentation  Agent and the Lenders, or any earlier date on which the Aggregate
Commitment  is reduced to zero or  otherwise  terminated  pursuant  to the terms
hereof.

     "Federal  Funds  Effective  Rate" means,  for any day, an interest rate per
annum equal to the  weighted  average of the rates on  overnight  Federal  funds
transactions  with  members of the Federal  Reserve  System  arranged by Federal
funds  brokers on such day, as published  for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York,  or, if such rate is not so  published  for any day which is a
Business Day, the average of the quotations at  approximately  9 a.m. (Salt Lake
City time) on such day on such transactions received by the Administrative Agent
from  three  Federal  funds  brokers  of  recognized  standing  selected  by the
Administrative Agent in its sole discretion.

     "First  Chicago"  means The First  National  Bank of  Chicago,  a  national
banking association, in its individual capacity, and its successors.

     "First  Security"  means First  Security  Bank,  N.A.,  a national  banking
association, in its individual capacity, and its successors.

     "Fixed Rate" means the Eurodollar Rate.

     "Fixed Rate Advance" means an Advance which bears interest at a Fixed Rate.

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<PAGE>

     "Fixed Rate Loan" means a Loan which bears interest at a Fixed Rate.

     "Floating  Rate"  means,  for any day,  a rate per  annum  equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin,  changing when
and as the Alternate Base Rate changes.

     "Floating  Rate  Advance"  means an Advance  which  bears  interest  at the
Floating Rate.

     "Floating  Rate Loan"  means a Loan which bears  interest  at the  Floating
Rate.

     "Guarantor"  means each of the now  existing or  hereafter  established  or
acquired Subsidiary of the Borrower, and its respective successors and assigns.

     "Guaranty"  means a  guaranty  executed  by a  Guarantor  in  favor  of the
Documentation  Agent,  for the ratable  benefit of the  Lenders,  in the form of
Exhibit F hereto,  as it may be amended or  modified  and in effect from time to
time.

     "Indebtedness" of a Person means,  without  duplication,  such Person's (i)
obligations  for borrowed  money,  (ii)  obligations  representing  the deferred
purchase price of Property or services  (other than accounts  payable arising in
the ordinary course of such Person's  business payable on terms customary in the
trade), (iii) obligations,  whether or not assumed,  secured by Liens or payable
out of the  proceeds or  production  from  property  now or  hereafter  owned or
acquired  by such  Person,  (iv)  obligations  which  are  evidenced  by  notes,
acceptances, or other instruments,  (v) Capitalized Lease Obligations,  and (vi)
Contingent Obligations.

     "Interest  Charges"  means,  for any period and with respect to any Person,
the sum, without duplication, of (a) interest paid or payable during such period
by such Person on  Indebtedness  of such Person,  plus (b) all debt discount and
expense amortized or required to be amortized during such period by such Person,
plus (c) all  obligations  of such  Person in  respect of any  interest  rate or
currency  swap,  rate cap or similar  transaction  paid or  required  to be paid
during such period by such Person.

     "Interest  Coverage  Ratio"  means,  for any period and with respect to any
Person,  the ratio of (a)  EBITDA of such  Person  for such  period,  to (b) the
Interest  Charges of such Person for such  period,  in each case  determined  in
accordance with Agreement Accounting Principles.

     "Interest Period" means a Eurodollar Interest Period.

     "Investment"  of a Person means any loan,  advance (other than  commission,
travel and similar  advances  to officers  and  employees  made in the  ordinary
course of business), extension of credit (other than accounts receivable arising
in the  ordinary  course  of  business  on  terms  customary  in the  trade)  or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests,  notes,  debentures  or other  securities  owned by such Person;  any
deposit accounts and certificate of deposit owned by such Person; and structured
notes,  derivative  financial  instruments  and  other  similar  instruments  or
contracts owned by such Person.

     "L/C Documents" has the meaning given such term in Section 2.19 below.

     "L/C Drawing" has the meaning given such term in Section 2.21 below.

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<PAGE>



     "Lenders" means the lending  institutions  listed on the signature pages of
this Agreement and their respective successors and assigns.

     "Lending  Installation" means, with respect to a Lender, the Administrative
Agent or the Documentation Agent, any office, branch, subsidiary or affiliate of
such Lender, the Administrative Agent or the Documentation Agent.

     "Letter of Credit" has the meaning given such term in Section 2.19 below.

     "Letter of Credit  Application"  means an application for the issuance of a
Letter of Credit in form satisfactory to the Administrative Agent.

     "Lien"   means  any  lien   (statutory   or   other),   mortgage,   pledge,
hypothecation,  assignment,  deposit  arrangement,  encumbrance  or  preference,
priority or other security agreement or preferential  arrangement of any kind or
nature whatsoever  (including,  without limitation,  the interest of a vendor or
lessor under any conditional  sale,  Capitalized  Lease or other title retention
agreement).

     "Loan" means, with respect to a Lender, such Lender's loan made pursuant to
Article II (or any conversion or continuation thereof).

     "Loan  Documents"  means this Agreement,  the Notes,  the  Guaranties,  the
Subordination  Agreements and the other  documents and  agreements  contemplated
hereby  and  executed  by  the  Borrower  or  any  Guarantor  in  favor  of  the
Documentation Agent, the Administrative Agent or any Lender.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (i) the
business, Property,  condition (financial or otherwise),  results of operations,
or prospects of the Borrower  and its  Subsidiaries  taken as a whole,  (ii) the
ability of the Borrower or any  Guarantor to perform its  obligations  under the
Loan  Documents  (provided  that any such effect with respect to the Borrower or
any Guarantor  shall not  constitute a Material  Adverse Effect if not more than
ten percent (10%) of the total assets of the Borrower and its  Subsidiaries on a
consolidated basis is affected adversely by such effect),  or (iii) the validity
or  enforceability of any of the Loan Documents or the rights or remedies of the
Documentation Agent, the Administrative Agent or the Lenders thereunder.

     "Net  Worth"  means as to any Person  the net worth of such  Person and its
consolidated  Subsidiaries,  determined in accordance with Agreement  Accounting
Principles.

     "Note" means a promissory  note, in  substantially  the form of Exhibit "A"
hereto,  duly  executed by the  Borrower and payable to the order of a Lender in
the amount of its Commitment, including any amendment,  modification, renewal or
replacement of such promissory note.

     "Notice of Assignment" is defined in Section 12.3.2.

     "Obligations" means all unpaid principal of and accrued and unpaid interest
on the Notes, the Outstanding Letters of Credit, and unrepaid L/C Drawings,  all
accrued and unpaid fees and all expenses, reimbursements,  indemnities and other

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                                       8
<PAGE>

obligations of the Borrower to the Lenders or to any Lender,  the Administrative
Agent, the Documentation  Agent or any indemnified party hereunder arising under
the Loan Documents.

     "Outstanding"  shall mean with respect to Letters of Credit,  any Letter of
Credit which has not been canceled,  expired  unutilized or fully drawn upon and
reference to the "amount" of any Outstanding Letter of Credit shall be deemed to
mean an amount available for drawing thereunder.

     "Participants" is defined in Section 12.2.1.

     "Payment Date" means the last day of each calendar quarter.

     "PBGC" means the Pension  Benefit  Guaranty  Corporation,  or any successor
thereto.

     "Person"  means any  natural  person,  corporation,  firm,  joint  venture,
partnership,  association, enterprise, trust or other entity or organization, or
any  government  or  political   subdivision   or  any  agency,   department  or
instrumentality thereof.

     "Plan" means an employee  pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum  funding  standards  under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.

     "Property" of a Person means any and all property,  whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

     "Purchasers" is defined in Section 12.3.1.

     "Rate  Hedging  Agreement"  means  an  agreement,   device  or  arrangement
providing  for payments  which are related to  fluctuations  of interest  rates,
exchange   rates   or   forward   rates,   including,   but  not   limited   to,
dollar-denominated or cross-currency interest rate exchange agreements,  forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.

     "Rate Hedging  Obligations"  of a Person means any and all  obligations  of
such  Person,  whether  absolute or  contingent  and  howsoever  and  whensoever
created, arising, evidenced or acquired (including all renewals,  extensions and
modifications  thereof and substitutions  therefor),  under (i) any and all Rate
Hedging Agreements,  and (ii) any and all cancellations,  buy backs,  reversals,
terminations or assignments of any Rate Hedging Agreement.

     "Regulation D" means  Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation  or official  interpretation  of said Board of Governors  relating to
reserve requirements applicable to member banks of the Federal Reserve System.

     "Regulation U" means  Regulation U of the Board of Governors of the Federal
Reserve  System  as from  time to time in  effect  and any  successor  or  other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of  purchasing  or carrying  margin
stocks applicable to member banks of the Federal Reserve System.

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<PAGE>



     "Reportable  Event" means a reportable  event as defined in Section 4043 of
ERISA and the  regulations  issued under such  section,  with respect to a Plan,
excluding,  however,  such events as to which the PBGC by regulation  waived the
requirement  of Section  4043(a) of ERISA that it be notified  within 30 days of
the  occurrence  of such event,  provided,  however,  that a failure to meet the
minimum funding  standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.

     "Required  Lenders"  means Lenders in the aggregate  having at least 51% of
the Aggregate  Commitment or, if the Aggregate  Commitment has been  terminated,
Lenders in the aggregate  holding at least 51% of the aggregate unpaid principal
amount of the outstanding  Advances;  provided,  however, that if there are only
two Lenders hereunder, Required Lenders shall include both Lenders.

     "Reserve  Requirement" means, with respect to a Eurodollar Interest Period,
the maximum aggregate reserve  requirement  (including all basic,  supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.

     "Section"  means a  numbered  section  of this  Agreement,  unless  another
document is specifically referenced.

     "Single  Employer  Plan"  means a Plan  maintained  by the  Borrower or any
member of the  Controlled  Group for  employees of the Borrower or any member of
the Controlled Group.

     "Subordination  Agreement"  means a subordination  agreement  executed by a
Guarantor in favor of the  Documentation  Agent,  for the ratable benefit of the
Lenders,  in the form of Exhibit G hereto,  as it may be amended or modified and
in effect from time to time.

     "Subsidiary"  of a Person  means (i) any  corporation  more than 50% of the
outstanding  securities  having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its  Subsidiaries or by such Person and one or more of its  Subsidiaries,  or
(ii) any partnership,  limited liability company, association,  joint venture or
similar business  organization  more than 50% of the ownership  interests having
ordinary  voting  power  of which  shall at the time be so owned or  controlled.
Unless otherwise  expressly  provided,  all references  herein to a "Subsidiary"
shall mean a Subsidiary of the Borrower.

     "Substantial  Portion" means,  with respect to the Property of the Borrower
and  its   Subsidiaries,   Property  which  represents  more  than  10%  of  the
consolidated  assets of the Borrower and its  Subsidiaries  as would be shown in
the consolidated financial statements of the Borrower and its Subsidiaries as at
the  beginning of the  twelve-month  period  ending with the month in which such
determination is made.

     "Total  Capital"  means,  as  of  any  date  of  determination,  the  Total
Indebtedness   plus  the  Net  Worth  of  the  Borrower  and  its   consolidated
Subsidiaries.

     "Total  Indebtedness"  means, as of any date of  determination,  the amount
(determined  in conformity  with  Agreement  Accounting  Principles)  of (i) the
Obligations,  plus (ii) all other  outstanding  Indebtedness of the Borrower and
all its Subsidiaries,  determined on a consolidated basis, created or assumed by

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<PAGE>


any of such  Persons,  plus  (iii) all  other  outstanding  Indebtedness  of the
Borrower  and all its  Subsidiaries  which  arises  under a revolving  credit or
similar agreement which obligates the lender or lenders to extend credit.

     "Total  Indebtedness  / Adjusted  EBITDA  Ratio"  means,  as of any date of
determination,  the quotient of the Total  Indebtedness  of the Borrower and its
Subsidiaries (determined on a consolidated basis) as of such date divided by the
Adjusted  EBITDA  of  the  Borrower  and  its  Subsidiaries   (determined  on  a
consolidated basis) as of such date.

     "Transferee" is defined in Section 12.4.

     "Type"  means,  with respect to any Advance,  its nature as a Floating Rate
Advance or a Eurodollar Advance.

     "Unfunded Liabilities" means the amount (if any) by which the present value
of all vested and unvested  accrued  benefits  under all Single  Employer  Plans
exceeds  the fair  market  value  of all  such  Plan  assets  allocable  to such
benefits,  all  determined  as of the then most recent  valuation  date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.

     "Unmatured  Default"  means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.

     "Wholly-Owned  Subsidiary"  of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly,  by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more  Wholly-Owned  Subsidiaries of
such Person, or (ii) any partnership,  limited liability  company,  association,
joint venture or similar business  organization 100% of the ownership  interests
having  ordinary  voting  power  of  which  shall  at the  time be so  owned  or
controlled.

     "Year 2000 Issues"  means  anticipated  costs,  problems and  uncertainties
associated  with the inability of certain  computer  applications to effectively
handle data  including  dates on and after  January 1, 2000,  as such  inability
affects the business, operations and financial condition of the Borrower and its
Subsidiaries  and of the Borrower's and its  Subsidiaries'  material  customers,
suppliers and vendors.

     "Year 2000 Program" is defined in Section 5.19.

     The foregoing  definitions shall be equally applicable to both the singular
and plural forms of the defined terms.


                                   ARTICLE II

                                   THE CREDITS
                                   -----------

      2.1.  Commitment.  From and including the date of this Agreement and prior
to the Facility Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement,  to make Loans to the Borrower from time
to time in amounts not to exceed in the  aggregate  at any one time  outstanding
the amount of its Commitment;  provided,  however,  that the aggregate amount of

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<PAGE>

Loans  made by all  Lenders  at any one time  outstanding  shall not  exceed the
Aggregate Commitment minus the aggregate dollar amount of Outstanding Letters of
Credit and  unrepaid  L/C  Drawings  on such date.  Subject to the terms of this
Agreement,  the Borrower may borrow, repay and reborrow at any time prior to the
Facility Termination Date. The Commitments to lend hereunder shall expire on the
Facility Termination Date.

      2.2.  Required  Payments.  Any  outstanding  Advances and all other unpaid
Obligations  shall be paid in full by the Borrower on the  Facility  Termination
Date.  In addition,  all proceeds  from any material sale of assets and from any
issuance of equity by the Borrower or any of its  Subsidiaries  shall be used to
repay any outstanding Advances hereunder.

       2.3.  Ratable Loans.  Each Advance  hereunder shall consist of Loans made
from  the  several  Lenders  ratably  in  proportion  to the  ratio  that  their
respective Commitments bear to the Aggregate Commitment.

      2.4.  Types of Advances.  The Advances  may be Floating  Rate  Advances or
Eurodollar  Advances,  or a  combination  thereof,  selected by the  Borrower in
accordance with Sections 2.8 and 2.9.

      2.5.  Commitment  Fee;  Reductions in Aggregate  Commitment.  The Borrower
agrees to pay to the  Administrative  Agent  for the  account  of each  Lender a
commitment  fee  equal to the  Applicable  Fee Rate  multiplied  by the  amount,
calculated daily, equal to such Lender's Commitment minus such Lender's pro rata
share of all outstanding Loans and Advances,  Outstanding  Letters of Credit and
unrepaid  L/C  Drawings,  from the date  hereof to and  including  the  Facility
Termination  Date,  payable  quarterly,  in  arrears,  on the  last  day of each
calendar  quarter  and  on the  Facility  Termination  Date.  The  Borrower  may
permanently  reduce the Aggregate  Commitment in whole, or in part ratably among
the Lenders in the minimum amount of $500,000 and integral multiples of $100,000
in  excess  thereof,  upon at least ten  Business  Days'  written  notice to the
Administrative  Agent,  which  notice  shall  specify  the  amount  of any  such
reduction,  provided,  however,  that the amount of the Aggregate Commitment may
not be reduced below the aggregate principal amount of the outstanding Advances.
All  accrued  commitment  fees  shall be payable  on the  effective  date of any
termination of the obligations of the Lenders to make Loans hereunder.

      2.6.  Minimum Amount of Each Advance.  Each Fixed Rate Advance shall be in
the minimum  amount of  $1,000,000  (and in  multiples  of $100,000 if in excess
thereof),  and each  Floating  Rate  Advance  shall be in the minimum  amount of
$100,000 (and in multiples of $100,000 if in excess thereof), provided, however,
that any  Floating  Rate  Advance  may be in the amount of the unused  Aggregate
Commitment.

       2.7. Optional Principal Payments. The Borrower may from time to time pay,
without  penalty or premium,  all outstanding  Floating Rate Advances,  or, in a
minimum  aggregate  amount of $100,000 or any  integral  multiple of $100,000 in
excess thereof,  any portion of the outstanding  Floating Rate Advances upon two
Business  Days' prior notice to the  Administrative  Agent. A Fixed Rate Advance
may not be paid prior to the last day of the applicable Interest Period.

       2.8. Method of Selecting Types and Interest Periods for New Advances. The
Borrower  shall  select the Type of Advance  and, in the case of each Fixed Rate
Advance,  the Interest Period  applicable to each Advance from time to time. The
Borrower shall give the  Administrative  Agent irrevocable  notice (a "Borrowing
Notice")  not later than 9:00 a.m.  (Salt Lake City time) at least one  Business

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<PAGE>

Day before the Borrowing Date of each Floating Rate Advance,  and three Business
Days before the Borrowing Date for each Eurodollar Advance, specifying:

      (i)         the  Borrowing  Date,  which shall be a Business  Day, of such
                  Advance,

     (ii)         the aggregate amount of such Advance,

    (iii)         the Type of Advance selected, and

     (iv)         in the case of each Fixed Rate  Advance,  the Interest  Period
                  applicable thereto.

Not later than 11:00 a.m.  (Salt Lake City time) on each  Borrowing  Date,  each
Lender shall make available its Loan or Loans, in funds immediately available in
Salt Lake City to the Administrative  Agent at its address specified pursuant to
Article XIII. The Administrative  Agent will make the funds so received from the
Lenders  available  to the  Borrower  at the  Administrative  Agent's  aforesaid
address.

      2.9.  Conversion and Continuation of Outstanding  Advances.  Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted  into Fixed Rate  Advances.  Each Fixed Rate Advance
shall  continue  as a Fixed Rate  Advance  until the end of the then  applicable
Interest  Period  therefor,  at which  time such  Fixed  Rate  Advance  shall be
automatically  converted  into a Floating Rate Advance unless the Borrower shall
have given the Administrative Agent a Conversion/Continuation  Notice requesting
that,  at the end of such  Interest  Period,  such  Fixed  Rate  Advance  either
continue as a Fixed Rate Advance for the same or another  Interest  Period or be
converted into an Advance of another Type.  Subject to the terms of Section 2.6,
the  Borrower  may  elect  from  time to time to  convert  all or any part of an
Advance  of any  Type  into  any  other  Type of  Advances;  provided  that  any
conversion of any Fixed Rate Advance shall be made on, and only on, the last day
of  the  Interest  Period  applicable  thereto.  The  Borrower  shall  give  the
Administrative Agent irrevocable notice (a "Conversion/Continuation  Notice") of
each  conversion of an Advance or continuation of a Fixed Rate Advance not later
than 9:00 a.m. (Salt Lake City time) at least one Business Day, in the case of a
conversion into a Floating Rate Advance,  or three Business Days, in the case of
a conversion into or continuation of a Fixed Rate Advance,  prior to the date of
the requested conversion or continuation, specifying:

      (i)         the  requested  date which  shall be a Business  Day,  of such
                  conversion or continuation,

     (ii)         the  aggregate  amount and Type of the Advance  which is to be
                  converted or continued, and

    (iii)         the amount and Type(s) of  Advance(s)  into which such Advance
                  is  to be  converted  or  continued  and,  in  the  case  of a
                  conversion into or  continuation of a Fixed Rate Advance,  the
                  duration of the Interest Period applicable thereto.

     2.10.  Changes in Interest Rate, etc. Each Floating Rate Advance shall bear
interest on the  outstanding  principal  amount  thereof,  for each day from and
including  the date  such  Advance  is made or is  converted  from a Fixed  Rate
Advance into a Floating  Rate Advance  pursuant to Section 2.9 to but  excluding
the date it becomes due or is converted  into a Fixed Rate  Advance  pursuant to
Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance  maintained  as a

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                                       13
<PAGE>

Floating  Rate Advance will take effect  simultaneously  with each change in the
Alternate  Base Rate.  Each  Fixed  Rate  Advance  shall  bear  interest  on the
outstanding  principal  amount  thereof from and  including the first day of the
Interest Period  applicable  thereto to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such Fixed Rate
Advance. No Interest Period may end after the Facility Termination Date.

     2.11.  Rates  Applicable  After  Default.  Notwithstanding  anything to the
contrary  contained in Section 2.8 or 2.9,  during the  continuance of a Default
the Required  Lenders  may, at their  option,  by notice to the Borrower  (which
notice may be revoked at the option of the Required Lenders  notwithstanding any
provision of Section 8.2 requiring  unanimous  consent of the Lenders to changes
in interest  rates),  declare that no Advance may be made as,  converted into or
continued  as a Fixed Rate  Advance.  If any  Advance  is not paid at  maturity,
whether by acceleration  or otherwise,  or any L/C Drawing is not paid when due,
the Required  Lenders  may, at their  option,  by notice to the Borrower  (which
notice may be revoked at the option of the Required Lenders  notwithstanding any
provision of Section 8.2 requiring  unanimous  consent of the Lenders to changes
in interest  rates),  declare that all  outstanding  Obligations  (including any
Advance and any unrepaid L/C  Drawing)  shall bear  interest at a rate per annum
equal to the Floating Rate plus 2% per annum.

     2.12.  Method of Payment.  All payments of the Obligations  hereunder shall
be made, without setoff,  deduction,  or counterclaim,  in immediately available
funds  to  the  Administrative  Agent  at  the  Administrative  Agent's  address
specified pursuant to Article XIII, or at any other Lending  Installation of the
Administrative  Agent  specified in writing by the  Administrative  Agent to the
Borrower, by noon (local time) on the date when due and shall be applied ratably
by the  Administrative  Agent among the Lenders.  Each payment  delivered to the
Administrative  Agent for the account of any Lender shall be delivered  promptly
by the  Administrative  Agent to such  Lender in the same type of funds that the
Administrative  Agent received at its address specified pursuant to Article XIII
or  at  any  Lending  Installation   specified  in  a  notice  received  by  the
Administrative  Agent  from  such  Lender.  The  Administrative  Agent is hereby
authorized  to  charge  the  account  of  the  Borrower   maintained   with  the
Administrative  Agent for each  payment of  principal,  interest  and fees as it
becomes due hereunder.

     2.13.  Notes;  Telephonic  Notices.  Each  Lender is hereby  authorized  to
record  the  principal  amount of each of its Loans  and each  repayment  on the
schedule attached to its Note, provided, however, that neither the failure to so
record nor any error in such recordation shall affect the Borrower's obligations
under  such  Note.   The  Borrower   hereby   authorizes  the  Lenders  and  the
Administrative Agent to extend, convert or continue Advances,  effect selections
of Types of Advances and to transfer  funds based on telephonic  notices made by
any  person or  persons  the  Administrative  Agent or any  Lender in good faith
believes to be acting on behalf of the Borrower.  The Borrower agrees to deliver
promptly  to  the  Administrative   Agent  a  written   confirmation,   if  such
confirmation  is requested by the  Administrative  Agent or any Lender,  of each
telephonic notice signed by an Authorized Officer.  The Administrative Agent and
the Lenders  shall be entitled  to rely on any such  telephonic  notice and take
actions  pursuant  thereto  without any written  confirmation  (if none has been
requested) or prior to the receipt of any written  confirmation (if one has been
requested).  If the related written confirmation differs in any material respect
from the action taken by the Administrative  Agent and the Lenders,  the records
of the Administrative Agent and the Lenders shall govern absent manifest error.

     2.14.  Interest Payment Dates;  Interest and Fee Basis. Interest accrued on
each  Floating  Rate  Advance  shall be payable  on the last day of each  month,
commencing with the first such date to occur after the date hereof,  on any date

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                                       14
<PAGE>

on which the Floating Rate Advance is prepaid,  whether due to  acceleration  or
otherwise, and at maturity.  Interest accrued on that portion of the outstanding
principal  amount of any  Floating  Rate  Advance  converted  into a Fixed  Rate
Advance  on a day other  than a Payment  Date  shall be  payable  on the date of
conversion.  Interest accrued on each Fixed Rate Advance shall be payable on the
last day of its applicable  Interest Period, on any date on which the Fixed Rate
Advance is prepaid,  whether by  acceleration  or  otherwise,  and at  maturity.
Interest  accrued on each Fixed Rate Advance  having an Interest  Period  longer
than three  months  shall  also be  payable on the last day of each  three-month
interval during such Interest Period.  Interest on Fixed Rate Loans,  commitment
fees and letter of credit fees shall be  calculated  for actual days  elapsed on
the basis of a 360-day year. Interest on Floating Rate Loans shall be calculated
for actual days elapsed on the basis of a 365-, or when  appropriate  366-,  day
year.  Interest  shall be payable for the day an Advance is made but not for the
day of any  payment on the amount  paid if  payment  is  received  prior to noon
(local time) at the place of payment. If any payment of principal of or interest
on an  Advance  shall  become  due on a day which is not a  Business  Day,  such
payment shall be made on the next succeeding  Business Day and, in the case of a
principal  payment,  such  extension  of time  shall be  included  in  computing
interest in connection with such payment.

     2.15.  Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Administrative Agent will notify
each  Lender of the  contents of each  Aggregate  Commitment  reduction  notice,
Borrowing Notice,  Conversion/Continuation Notice, and repayment notice received
by it  hereunder.  The  Administrative  Agent  will  notify  each  Lender of the
interest rate applicable to each Fixed Rate Advance promptly upon  determination
of such  interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.

     2.16.  Lending Installations. Each Lender may book its Loans at any Lending
Installation  selected by such  Lender and may change its  Lending  Installation
from time to time. All terms of this  Agreement  shall apply to any such Lending
Installation  and the Notes  shall be deemed held by each Lender for the benefit
of such Lending Installation. Each Lender may, by written or telex notice to the
Administrative Agent and the Borrower,  designate a Lending Installation through
which Loans will be made by it and for whose  account  Loan  payments  are to be
made.

     2.17.  Non-Receipt of Funds by the Administrative Agent.Unless the Borrower
or a Lender, as the case may be, notifies the Administrative  Agent prior to the
date on which it is scheduled to make payment to the Administrative Agent of (i)
in the  case of a  Lender,  the  proceeds  of a Loan or (ii) in the  case of the
Borrower,  a payment of principal,  interest or fees to the Administrative Agent
for the account of the  Lenders,  that it does not intend to make such  payment,
the  Administrative  Agent may  assume  that such  payment  has been  made.  The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such  Lender  or the  Borrower,  as the case may be,  has not in fact  made such
payment to the  Administrative  Agent,  the recipient of such payment shall,  on
demand by the Administrative Agent, repay to the Administrative Agent the amount
so made available  together with interest  thereon in respect of each day during
the  period  commencing  on the date such  amount was so made  available  by the
Administrative  Agent  until the date the  Administrative  Agent  recovers  such
amount at a rate per annum equal to (i) in the case of payment by a Lender,  the
Federal Funds  Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.

     2.18.  Mandatory  Prepayment in the Event of a Change in Control.  No later
than ten (10) Business Days prior to the  consummation of any transaction  which
would cause a Change in Control, the Borrower shall notify (a "Change in Control

1a-222232
                                       15
<PAGE>

Notice")  the  Administrative   Agent  and  the  Documentation  Agent  (and  the
Documentation  Agent  shall  promptly  forward a copy of such  Change in Control
Notice to each  Lender) of such  expected  transaction,  including  within  such
Change in Control Notice the expected closing date of such  transaction.  Within
five (5)  Business  Days of  receipt  of such  Change in  Control  Notice by any
Lender, such Lender may, at its option, give notice to the Administrative Agent,
the  Documentation  Agent and the Borrower  that such Lender elects to terminate
its  Commitment  hereunder.  Unless an earlier  date is  otherwise  agreed  upon
between the Borrower,  the Administrative Agent, the Documentation Agent and the
terminating Lender, such Lender's Commitment shall terminate simultaneously with
the closing of such transaction and the Borrower shall repay at such time all of
such Lender's  outstanding  Loans,  together with accrued interest thereon,  any
accrued  fees with respect to such  Lender's  Commitment,  any costs,  losses or
expenses  incurred by such Lender in connection with such prepayment  payable by
the Borrower  pursuant to Section 3.4 and any other  obligations of the Borrower
to such Lender  hereunder.  Any  failure of the  Borrower to deliver a Change in
Control Notice pursuant to this Section shall not affect the right of any Lender
to terminate its  Commitment  hereunder  simultaneously  with the closing of the
transaction  causing the Change in Control nor the obligation of the Borrower to
repay at the time of such closing the amounts  required in connection  with such
termination.

     2.19.  Issuance  of  Letters  of  Credit.  On the terms and  subject to the
conditions set forth herein, the  Administrative  Agent shall, from time to time
from  and  including  the  date of this  Agreement  and  prior  to the  Facility
Termination  Date,  issue its letters of credit  (each a "Letter of Credit" and,
collectively,  the "Letters of Credit") for the account of the  Borrower,  in an
amount (a) which when added to the aggregate amount of other Outstanding Letters
of Credit and unpaid L/C  Drawings  will not exceed  $10,000,000,  and (b) which
when  added to the  aggregate  amount  of Loans  outstanding  hereunder  and the
aggregate amount of other Outstanding  Letters of Credit and unpaid L/C Drawings
will not  exceed  the  Aggregate  Commitment.  Each  Letter of  Credit  shall be
requested  by the  Borrower  at least one  Business  Day  prior to the  proposed
issuance date by delivery to the Administrative  Agent of a duly executed Letter
of Credit  Application,  accompanied  by all other  documents,  instruments  and
agreements as the  Administrative  Agent may require (the "L/C  Documents").  No
Letter  of  Credit  shall  have a stated  expiration  date (or  provide  for the
extension  of such stated  expiration  date or the  issuance of any  replacement
therefor) later than the Facility Termination Date.

     2.20.  Purchase  of  Participation  Interests.  Upon the  issuance  of each
Letter of Credit, the Lenders shall be automatically deemed to have purchased an
undivided  participation  interest  therein  and in all rights  and  obligations
relating  thereto  ratably in  proportion  to the ratio  that  their  respective
Commitments bear to the Aggregate Commitment.

     2.21.  Repayment of L/C Drawings. Any drawing under any Letter of Credit (a
"L/C  Drawing")  shall be  payable  in full by the  Borrower:  (1)  prior to the
occurrence of a Default and  acceleration  of the  Obligations,  on the date the
Administrative  Agent notifies the Borrower  (which notice may be telephonic) of
such L/C  Drawing  if such  notice is given  prior to 1:00 p.m.  (Salt Lake City
time),  or on the next  succeeding  Business Day if given after 1:00 p.m.  (Salt
Lake City time),  or (2) following the occurrence of a Default and  acceleration
of the Obligations,  without demand upon or notice to the Borrower,  on the date
of such L/C Drawing.  Any L/C Drawing not paid on the date when due shall accrue
interest as provided in Section 2.11 above,  from and including such date to but
not  including  the  date  paid in  full.  The  Lenders  hereby  absolutely  and
unconditionally  (including,  without limitation,  following the occurrence of a
Default)  agree to purchase and sell among  themselves  the dollar amount of any
L/C Drawing which is not paid on the date when due by the Borrower, so that each

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                                       16
<PAGE>

unrepaid L/C Drawing shall be held and participated in by the Lenders ratably in
proportion to the ratio that their respective  Commitments bear to the Aggregate
Commitment.

     2.22.  Absolute Obligation to Repay. The Borrower's obligation to repay L/C
Drawings  shall be absolute,  irrevocable  and  unconditional  under any and all
circumstances  whatsoever  and  irrespective  of any  set-off,  counterclaim  or
defense to payment  which the Borrower may have or have had,  against any Lender
or any other Person, including, without limitation, any set-off, counterclaim or
defense based upon or arising out of: (1) any lack of validity or enforceability
of this  Agreement  or any of the other Loan  Documents;  (2) any  amendment  or
waiver of or any  consent to  departure  from the terms of any Letter of Credit;
(3) the  existence  of any  claim,  setoff,  defense  or other  right  which the
Borrower or any other Person may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such  beneficiary
or any such  transferee  may be  acting);  (4) any  allegation  that any demand,
statement or any other document  presented under any Letter of Credit is forged,
fraudulent,  invalid  or  insufficient  in any  respect,  or that any  statement
therein is untrue or inaccurate in any respect  whatsoever or that variations in
punctuation,  capitalization, spelling or format were contained in the drafts or
any  statements  presented in connection  with any L/C Drawing;  (5) any payment
made by the  Administrative  Agent  under any  Letter  of  Credit to any  Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit  of  creditors,  liquidator,  receiver  or  other  representative  of or
successor  to  any  beneficiary  or any  transferee  of any  Letter  of  Credit,
including any arising in connection with any insolvency  proceeding;  or (6) any
other circumstance of happening whatsoever, whether or not similar to any of the
foregoing,  including any other  circumstance that might otherwise  constitute a
defense  available to, or a discharge of the Borrower.  Nothing contained herein
shall   constitute  a  waiver  of  any  rights  of  the  Borrower   against  the
Administrative  Agent arising out of the gross negligence or willful  misconduct
of the  Administrative  Agent in  connection  with any  Letter of Credit  issued
hereunder,  it being  expressly  acknowledged  and agreed by the  Administrative
Agent that payment by the Administrative  Agent under any Letter of Credit in an
amount in excess of that  available for drawing  thereunder or in excess of that
requested by the  beneficiary in making a drawing  thereunder  shall  constitute
"gross negligence" on the part of the Administrative Agent.

     2.23.  Uniform  Customs and Practice.  The Uniform Customs and Practice for
Documentary  Credits as published by the International  Chamber of Commerce most
recently at the time of issuance of any Letter of Credit shall (unless otherwise
expressly provided in such Letter of Credit) apply to such Letter of Credit.

     2.24.  Relationship  to Letter of Credit  Application.  In the event of any
inconsistency  between the terms and  provisions of this Agreement and the terms
and provisions of the Letter of Credit Application,  the terms and provisions of
this Agreement shall supersede and govern.

     2.25.  Letter  of  Credit  Fee.  The   Borrower   agrees   to  pay  to  the
Administrative  Agent for the account of the Lenders,  ratably in  proportion to
the ratio that their respective Commitments bear to the Aggregate Commitment,  a
letter of credit fee equal to one percent (1%)  multiplied  by the stated amount
of all  Outstanding  Letters of Credit,  payable in arrears on each Payment Date
hereafter and on the Facility Termination Date.

     2.26.  Guaranties and Subordination Agreements.As additional credit support
for the  Obligations,  the Borrower  shall cause to be executed and delivered to
the  Documentation   Agent  from  each  of  the  Guarantors  a  Guaranty  and  a
Subordination  Agreement.  The  Borrower  shall  also cause to be  executed  and

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<PAGE>

delivered to the  Documentation  Agent a Guaranty and a Subordination  Agreement
from any other direct or indirect Subsidiary  hereafter  established or acquired
from time to time.


                                   ARTICLE III

                             CHANGE IN CIRCUMSTANCES
                             -----------------------

      3.1.  Yield   Protection.   If    any   law   or   any   governmental   or
quasi-governmental rule, regulation,  policy, guideline or directive (whether or
not having the force of law), or any interpretation  thereof,  or the compliance
of any Lender therewith,

         (i)      subjects any Lender or any applicable Lending  Installation to
                  any tax,  duty,  charge or withholding on or from payments due
                  from the Borrower  (excluding  federal taxation of the overall
                  net income of any Lender or applicable Lending  Installation),
                  or changes  the basis of taxation of payments to any Lender in
                  respect of its Loans or other amounts due it hereunder, or

         (ii)     imposes  or  increases  or  deems   applicable   any  reserve,
                  assessment,  insurance  charge,  special  deposit  or  similar
                  requirement  against  assets  of,  deposits  with  or for  the
                  account  of,  or  credit   extended  by,  any  Lender  or  any
                  applicable  Lending  Installation  (other  than  reserves  and
                  assessments  taken into  account in  determining  the interest
                  rate applicable to Fixed Rate Advances), or

         (iii)    imposes any other condition the result of which is to increase
                  the cost to any Lender or any applicable Lending  Installation
                  of making,  funding or maintaining loans or reduces any amount
                  receivable   by  any   Lender   or  any   applicable   Lending
                  Installation  in connection with loans, or requires any Lender
                  or any  applicable  Lending  Installation  to make any payment
                  calculated  by  reference  to the  amount  of  loans  held  or
                  interest  received by it, by an amount deemed material by such
                  Lender,

then,  within 15 days of  demand by such  Lender,  the  Borrower  shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable solely to making,  funding
and maintaining its Loans and its  Commitment.  Notwithstanding  anything to the
contrary  set  forth  above in this  Section,  this  Section  shall not apply to
Floating Rate Loans.

      3.2.  Changes in Capital Adequacy  Regulations. If a Lender determines the
amount of capital  required or expected to be  maintained  by such  Lender,  any
Lending  Installation of such Lender or any corporation  controlling such Lender
is  increased  as a result of a Change,  then,  within 15 days of demand by such
Lender,  the Borrower  shall pay such Lender the amount  necessary to compensate
for any shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans or its
obligation  to make Loans  hereunder  (after  taking into account such  Lender's
policies as to capital  adequacy).  "Change" means (i) any change after the date
of this Agreement in the Risk-Based  Capital  Guidelines or (ii) any adoption of
or change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this  Agreement  which  affects  the amount of capital
required or expected to be maintained by any Lender or any Lending  Installation

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<PAGE>

or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means
(i) the risk-based capital guidelines in effect in the United States on the date
of this  Agreement,  including  transition  rules,  and (ii)  the  corresponding
capital  regulations  promulgated by regulatory  authorities  outside the United
States  implementing  the July 1988  report of the Basle  Committee  on  Banking
Regulation and  Supervisory  Practices  Entitled  "International  Convergence of
Capital Measurements and Capital Standards," including transition rules, and any
amendments  to such  regulations  adopted  prior to the date of this  Agreement.
Notwithstanding  anything to the contrary set forth above in this Section,  this
Section shall not apply to Floating Rate Loans.

      3.3.  Availability  of Types of Advances.  If any Lender  determines  that
maintenance  of any of its Fixed Rate Loans at a suitable  Lending  Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders  determine that (i) deposits
of a type and  maturity  appropriate  to match fund Fixed Rate  Advances are not
available or (ii) the  interest  rate  applicable  to a Type of Advance does not
accurately  reflect the cost of making or  maintaining  such  Advance,  then the
Administrative  Agent shall  suspend the  availability  of the affected  Type of
Advance and require any Fixed Rate Advances of the affected Type to be repaid.

      3.4.  Funding  Indemnification.  If any  payment of a Fixed  Rate  Advance
occurs on a date which is not the last day of the  applicable  Interest  Period,
whether  because  of  acceleration,  prepayment  or  otherwise,  or a Fixed Rate
Advance is not made on the date  specified  by the Borrower for any reason other
than default by the Lenders,  the Borrower  will  indemnify  each Lender for any
loss or cost incurred by it resulting therefrom,  including, without limitation,
any  loss or cost in  liquidating  or  employing  deposits  acquired  to fund or
maintain the Fixed Rate Advance.

      3.5.  Lender  Statements;  Survival of Indemnity. To the extent reasonably
possible,  each Lender shall designate an alternate  Lending  Installation  with
respect to its Fixed Rate Loans to reduce any  liability of the Borrower to such
Lender under  Sections 3.1 and 3.2 or to avoid the  unavailability  of a Type of
Advance under Section 3.3, so long as such designation is not disadvantageous to
such Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Administrative Agent) as to the amount due, if any,
under  Section  3.1,  3.2 or 3.4.  Such  written  statement  shall  set forth in
reasonable detail the calculations upon which such Lender determined such amount
and shall be final,  conclusive  and  binding on the  Borrower in the absence of
manifest  error.  Determination  of  amounts  payable  under  such  Sections  in
connection  with a Fixed Rate Loan shall be  calculated  as though  each  Lender
funded its Fixed Rate Loan  through  the  purchase  of a deposit of the type and
maturity  corresponding  to the deposit used as a reference in  determining  the
Fixed Rate  applicable  to such  Loan,  whether in fact that is the case or not.
Unless otherwise  provided herein, the amount specified in the written statement
of any Lender shall be payable on demand  after  receipt by the Borrower of such
written  statement.  The obligations of the Borrower under Sections 3.1, 3.2 and
3.4 shall survive payment of the Obligations and termination of this Agreement.


                                   ARTICLE IV

                 CONDITIONS PRECEDENT; WITHHOLDING TAX EXEMPTION

       4.1. Initial  Advance.   The  Lenders  shall not be  required to make the
initial  Advance  hereunder at any time prior to the date of this  Agreement and
unless and until the Borrower  has  furnished  to the  Documentation  Agent with
sufficient copies for the Lenders:

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                                       19
<PAGE>

      (i)         Duly executed originals of this Agreement.

     (ii)         Duly executed originals of each of the Guaranties.

    (iii)         Duly   executed   originals  of  each  of  the   Subordination
                  Agreements.

     (iv)         Copies  of the  articles  of  incorporation  of the  Borrower,
                  together  with  all  amendments,  and a  certificate  of  good
                  standing,  both  certified  by the  Secretary  of State of the
                  State of Utah.

      (v)         Copies,  certified by the Secretary or Assistant  Secretary of
                  the  Borrower,  of its by-laws and of its Board of  Directors'
                  resolutions  (and  resolutions  of  other  bodies,  if any are
                  deemed  necessary by counsel for any Lender)  authorizing  the
                  execution of the Loan Documents.

     (vi)         An  incumbency  certificate,  executed  by  the  Secretary  or
                  Assistant  Secretary of the Borrower,  which shall identify by
                  name and title and bear the  signature  of the officers of the
                  Borrower  authorized  to sign the Loan  Documents  and to make
                  borrowings    hereunder,    upon   which    certificate    the
                  Administrative  Agent, the Documentation Agent and the Lenders
                  shall be  entitled  to rely  until  informed  of any change in
                  writing by the Borrower.

    (vii)         With  respect  to  each  of  the  Guarantors,   an  incumbency
                  certificate,  executed by the Secretary or Assistant Secretary
                  of such Guarantor,  which shall identify by name and title and
                  bear  the   signature  of  the  officers  of  such   Guarantor
                  authorized to sign the Guaranty to which it is party.

   (viii)         A certificate,  signed by the chief  financial  officer of the
                  Borrower,  stating  that  on the  initial  Borrowing  Date  no
                  Default or Unmatured Default has occurred and is continuing.

     (ix)         A  written   opinion  of  counsel  to  the  Borrower  and  the
                  Guarantors, addressed to the Lenders in substantially the form
                  of Exhibit "B" hereto.

      (x)         Notes payable to the order of each of the Lenders.

     (xi)         Written money transfer instructions, in substantially the form
                  of Exhibit "E" hereto,  addressed to the Administrative  Agent
                  and signed by an Authorized Officer,  together with such other
                  related money transfer  authorizations  as the  Administrative
                  Agent may have reasonably requested.

    (xii)         Evidence  satisfactory  to the  Administrative  Agent  and the
                  Documentation  Agent that upon funding of the initial  Advance
                  hereunder,   all   Indebtedness   under  the  Existing  Credit
                  Agreement shall have been paid in full.

   (xiii)         Information  satisfactory to the  Documentation  Agent and the
                  Lenders regarding the Borrower's Year 2000 Program.

    (xiv)         Such other  documents  as any Lender or its  counsel  may have
                  reasonably requested.

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                                       20
<PAGE>



Promptly upon funding of the Initial Advance hereunder,  the Documentation Agent
shall cause to be released any security interest in any collateral  securing the
Indebtedness under the Existing Credit Agreement.

      4.2.  Each  Advance. The Lenders shall not be required to make any Advance
(other than an Advance that,  after giving effect thereto and to the application
of the proceeds  thereof,  does not increase the aggregate amount of outstanding
Advances), unless on the applicable Borrowing Date:

      (i)         There exists no Default or Unmatured Default.

     (ii)         The representations and warranties  contained in Article V are
                  true and correct in all material respects as of such Borrowing
                  Date except to the extent any such  representation or warranty
                  is stated to relate  solely to an earlier  date, in which case
                  such  representation  or warranty shall be true and correct on
                  and as of such earlier date.

    (iii)   All legal  matters  incident to the making of such Advance  shall be
satisfactory to the Lenders and their counsel.

     Each Borrowing  Notice with respect to each such Advance shall constitute a
representation  and warranty by the Borrower  that the  conditions  contained in
Sections  4.2(i) and (ii) have been  satisfied.  Any  Lender  may,  through  the
Administrative  Agent,  require  a  duly  completed  compliance  certificate  in
substantially  the form of  Exhibit  "C"  hereto  as a  condition  to  making an
Advance.

     4.3.   Withholding Tax Exemption.  At least five Business Days prior to the
first date on which  interest or fees are payable  hereunder  for the account of
any Lender,  each Lender that is not  incorporated  under the laws of the United
States of America,  or a state  thereof,  agrees that it will deliver to each of
the Borrower,  the  Administrative  Agent and the  Documentation  Agent two duly
completed  copies of United States  Internal  Revenue Service Form 1001 or 4224,
certifying in either case that such Lender is entitled to receive payments under
this  Agreement and the Notes  without  deduction or  withholding  of any United
States federal  income taxes.  Each Lender which so delivers a Form 1001 or 4224
further undertakes to deliver to each of the Borrower,  the Administrative Agent
and the  Documentation  Agent two additional copies of such form (or a successor
form) on or before the date that such form expires (currently,  three successive
calendar  years for Form 1001 and one  calendar  year for Form  4224) or becomes
obsolete  or after the  occurrence  of any event  requiring a change in the most
recent forms so delivered by it, and such  amendments  thereto or  extensions or
renewals  thereof  as  may  be  reasonably   requested  by  the  Borrower,   the
Administrative  Agent or the  Documentation  Agent, in each case certifying that
such Lender is entitled to receive  payments  under this Agreement and the Notes
without  deduction or  withholding  of any United States  federal  income taxes,
unless an event  (including  without  limitation  any change in  treaty,  law or
regulation)  has  occurred  prior to the date on which any such  delivery  would
otherwise be required which renders all such forms  inapplicable  or which would
prevent  such  Lender from duly  completing  and  delivering  any such form with
respect to it and such Lender advises the Borrower, the Administrative Agent and
the Documentation Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.

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<PAGE>

                                    ARTICLE V

                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     The Borrower represents and warrants to the Lenders that:

      5.1.  Corporate  Existence  and  Standing.  Each of the  Borrower  and its
Subsidiaries is a corporation  duly  incorporated,  validly existing and in good
standing  under  the  laws  of its  jurisdiction  of  incorporation  and has all
requisite  authority  to conduct  its  business in each  jurisdiction  where its
ownership of property or conduct of business  requires such  authority and where
failure to have such authority could have a Material Adverse Effect.

      5.2.  Authorization and Validity.  Each of the Borrower and the Guarantors
has the corporate power and authority and legal right to execute and deliver the
Loan Documents to which it is party and to perform its  obligations  thereunder.
The  execution  and  delivery by the  Borrower  and the  Guarantors  of the Loan
Documents and the performance of their  respective  obligations  thereunder have
been duly  authorized by proper  corporate  proceedings,  the Loan  Documents to
which the Borrower is party constitute legal,  valid and binding  obligations of
the Borrower  enforceable  against the Borrower in accordance  with their terms,
and the Loan Documents to which each Guarantor is party constitute legal,  valid
and binding obligations of such Guarantor  enforceable against such Guarantor in
accordance  with  their  terms,  except  as  enforceability  may be  limited  by
bankruptcy,  insolvency or similar laws affecting the  enforcement of creditors'
rights generally.

      5.3.  No Conflict;  Government Consent. Neither the execution and delivery
by the Borrower or any Guarantor of the Loan Documents,  nor the consummation of
the  transactions  therein  contemplated,  nor  compliance  with the  provisions
thereof  will  violate  any  law,  rule,  regulation,   order,  writ,  judgment,
injunction,  decree or award binding on the Borrower or any of the Guarantors or
the Borrower's or any Guarantor's  articles of  incorporation  or by-laws or the
provisions  of any  material  indenture,  instrument  or  agreement to which the
Borrower or any of the  Guarantors is a party or is subject,  or by which it, or
its Property, is bound, or conflict with or constitute a default thereunder,  or
result in the  creation or  imposition  of any Lien in, of or on the Property of
the  Borrower  or any  Guarantor  pursuant  to the terms of any such  indenture,
instrument or agreement. No order, consent, approval, license, authorization, or
validation of, or filing,  recording or  registration  with, or exemption by, or
other action in respect of any governmental or public body or authority,  or any
subdivision thereof, is required to authorize, or is required in connection with
the execution,  delivery and performance of, or the legality,  validity, binding
effect or enforceability of, any of the Loan Documents.

      5.4.  Financial  Statements. The consolidated  financial  statements dated
December 28, 1997 of the Borrower and its Subsidiaries  heretofore  delivered to
the Lenders were  prepared in  accordance  with  generally  accepted  accounting
principles  in effect on the date  such  statements  were  prepared  and  fairly
present the consolidated  financial condition and operations of the Borrower and
its Subsidiaries at such date and the  consolidated  results of their operations
for the period then ended.

      5.5.  Material Adverse Change.  Since December 28, 1997, there has been no
change in the business, Property, prospects,  condition (financial or otherwise)
or results of operations of the Borrower and its Subsidiaries which is likely to
have a Material Adverse Effect.

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                                       22
<PAGE>




      5.6.  Taxes.The Borrower and its Subsidiaries have filed all United States
federal tax returns and all other tax returns which are required to be filed and
have paid all taxes due pursuant to said  returns or pursuant to any  assessment
received by the Borrower or any of its Subsidiaries,  except such taxes, if any,
as are being contested in good faith and as to which adequate reserves have been
provided in accordance with Agreement  Accounting  Principles and as to which no
Lien  exists.  The United  States  income tax  returns of the  Borrower  and its
Subsidiaries  have been  audited by the  Internal  Revenue  Service  through the
fiscal year ended  December 31, 1993. No tax liens have been filed and no claims
are being  asserted  with respect to any such taxes.  The charges,  accruals and
reserves on the books of the  Borrower  and its  Subsidiaries  in respect of any
taxes or other governmental charges are adequate.

      5.7.  Litigation  and  Contingent  Obligations.  Except  as set  forth  on
Schedule  "3"  hereto,  there  is  no  litigation,   arbitration,   governmental
investigation,  proceeding  or inquiry  pending or, to the  knowledge  of any of
their  officers,  threatened  against or  affecting  the  Borrower or any of its
Subsidiaries  which  could  have a  Material  Adverse  Effect or which  seeks to
prevent,  enjoin or delay the  making of the Loans or  Advances.  Other than any
liability incident to such litigation,  arbitration or proceedings, the Borrower
has no material  contingent  obligations  not  provided  for or disclosed in the
financial statements referred to in Section 5.4.

      5.8.  Subsidiaries.  Schedule "1" hereto  contains an accurate list of all
Subsidiaries  of the Borrower as of the date of this  Agreement,  setting  forth
their  respective  jurisdictions  of  incorporation  and the percentage of their
respective capital stock owned by the Borrower or other Subsidiaries. All of the
issued and outstanding  shares of capital stock of such  Subsidiaries  have been
duly authorized and issued and are fully paid and non-assessable.

      5.9.  ERISA. The Unfunded  Liabilities of all Single Employer Plans do not
in the aggregate exceed $1,000,000.  Each Plan complies in all material respects
with all applicable requirements of law and regulations, no Reportable Event has
occurred with respect to any Plan, neither the Borrower nor any other members of
the Controlled  Group has withdrawn  from any Plan or initiated  steps to do so,
and no steps have been taken to reorganize or terminate any Plan.

     5.l0.  Accuracy of Information. No information, exhibit or report furnished
by the Borrower or any of its Subsidiaries to the Administrative Agent or to any
Lender in  connection  with the  negotiation  of, or compliance  with,  the Loan
Documents  contained  any  material  misstatement  of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.

     5.11.  Regulation U. Margin stock (as defined in Regulation U)  constitutes
less than 25% of those  assets of the Borrower  and its  Subsidiaries  which are
subject to any limitation on sale, pledge, or other restriction hereunder.

     5.12.  Material  Agreements.  Neither the Borrower nor any  Subsidiary is a
party  to any  agreement  or  instrument  or  subject  to any  charter  or other
corporate restriction which is likely to have a Material Adverse Effect. Neither
the Borrower nor any Subsidiary is in default in the performance,  observance or
fulfillment  of  any  of  the  material  obligations,  covenants  or  conditions
contained in (i) any  agreement to which it is a party,  which default is likely
to have a Material Adverse Effect or (ii) any agreement or instrument evidencing
or governing Indebtedness.

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                                       23
<PAGE>

     5.13.  Compliance  With  Laws.  The  Borrower  and  its  Subsidiaries  have
complied  with  all  applicable  statutes,   rules,   regulations,   orders  and
restrictions  of any domestic or foreign  government or any  instrumentality  or
agency  thereof,  having  jurisdiction  over the  conduct  of  their  respective
businesses  or the ownership of their  respective  Property if failure to comply
could reasonably be expected to have a Material Adverse Effect.

     5.14.  Ownership of Properties. Except as set forth on Schedule "2" hereto,
on the date of this Agreement,  the Borrower and its Subsidiaries will have good
title,  free of all Liens other than those  permitted by Section 6.15, to all of
the Property and assets reflected in the financial statements as owned by it.

     5.15.  Plan Assets; Prohibited Transactions.  The Borrower is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R.  ss.  2510.3-101 of
an employee  benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan  (within  the  meaning  of  Section  4975 of the
Code);  and  neither the  execution  of this  Agreement  and the making of Loans
hereunder  do not give rise to a  prohibited  transaction  within the meaning of
Section 406 of ERISA or Section 4975 of the Code.

     5.16.  Environmental  Matters. In the ordinary course of its business,  the
officers  of the  Borrower  consider  the  effect of  Environmental  Laws on the
business  of the  Borrower  and its  Subsidiaries,  in the  course of which they
identify and evaluate  potential risks and liabilities  accruing to the Borrower
due to Environmental Laws. On the basis of this consideration,  the Borrower has
reasonably  concluded  that it is in  material  compliance  with all  applicable
Environmental  Laws in effect on the date of this  representation  and warranty.
Neither the  Borrower nor any  Subsidiary  has received any notice to the effect
that its operations are not in material  compliance with any of the requirements
of  applicable  Environmental  Laws or are the  subject of any  federal or state
investigation  evaluating  whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could have a Material Adverse Effect.

     5.17.  Investment  Company Act.  Neither the  Borrower  nor any  Subsidiary
thereof is an "investment  company" or a company  "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.

     5.18.  Public  Utility  Holding  Company Act.  Neither the Borrower nor any
Subsidiary  is a  "holding  company"  or a  "subsidiary  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.

     5.19.  Year  2000  Program.  The  Borrower  has  made a full  and  complete
assessment  of the Year 2000 Issues and has a realistic and  achievable  program
for  remediating  the  Year  2000  Issues  on a timely  basis  (the  "Year  2000
Program").  Based on such  assessment  and on the Year 2000 Program the Borrower
does not  reasonably  anticipate  that Year  2000  Issues  will have a  Material
Adverse Effect.

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                                       24
<PAGE>

                                   ARTICLE VI
                                    COVENANTS
                                    ---------

     During  the term of this  Agreement,  unless  the  Required  Lenders  shall
otherwise consent in writing:

      6.1.  Financial Reporting. The Borrower will maintain, for itself and each
Subsidiary,  a system of accounting  established and  administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:

         (i)      Within 90 days  after the close of each of its  fiscal  years,
                  (A) an  unqualified  (except  for  qualifications  relating to
                  changes  in  accounting  principles  or  practices  reflecting
                  changes in generally  accepted  principles of  accounting  and
                  required or approved by the Borrower's  independent  certified
                  public  accountants)  audit report  certified  by  independent
                  certified  public  accountants,  acceptable  to  the  Required
                  Lenders,  prepared in  accordance  with  Agreement  Accounting
                  Principles  on  a   consolidated   and   consolidating   basis
                  (consolidating  statements  need  not  be  certified  by  such
                  accountants)  for  itself  and  the  Subsidiaries,   including
                  balance  sheets as of the end of such period,  related  profit
                  and loss  and  reconciliation  of  surplus  statements,  and a
                  statement of cash flows,  accompanied by any management letter
                  prepared by said accountants,  and (B) consolidating unaudited
                  balance  sheets  as at the  close  of  each  such  period  and
                  consolidating  profit and loss and  reconciliation  of surplus
                  statements and a statement of cash flows for such fiscal year,
                  all certified by its chief financial officer.

         (ii)     Within 45 days  after the close of the first  three  quarterly
                  periods  of each  of its  fiscal  years,  for  itself  and the
                  Subsidiaries, consolidated and consolidating unaudited balance
                  sheets as at the close of each such  period  and  consolidated
                  and  consolidating  profit  and  loss  and  reconciliation  of
                  surplus  statements  and a  statement  of cash  flows  for the
                  period  from the  beginning  of such fiscal year to the end of
                  such quarter, all certified by its chief financial officer.

         (iii)    Together with the financial statements required under Sections
                  6.1(i) and (ii), a compliance certificate in substantially the
                  form of Exhibit  "C" hereto  signed by an  Authorized  Officer
                  showing the  calculations  necessary to  determine  compliance
                  with this  Agreement  and stating that no Default or Unmatured
                  Default exists, or if any Default or Unmatured Default exists,
                  stating the nature and status thereof.

         (iv)     Within  270 days  after  the  close  of each  fiscal  year,  a
                  statement of the Unfunded  Liabilities of each Single Employer
                  Plan, certified as correct by an actuary enrolled under ERISA.

         (v)      As soon as possible  and in any event within 10 days after the
                  Borrower  knows that any  Reportable  Event has occurred  with
                  respect  to  any  Plan,  a  statement,  signed  by  the  chief
                  financial officer of the Borrower,  describing said Reportable
                  Event and the action which the Borrower  proposes to take with
                  respect thereto.

         (vi)     As soon as  possible  and in any event  within  10 days  after
                  receipt by the Borrower,  a copy of (a) any notice or claim to
                  the effect that the Borrower or any of its  Subsidiaries is or
                  may be liable to any Person as a result of the  release by the
                  Borrower, any of its Subsidiaries,  or any other Person of any
                  toxic or hazardous  waste or substance  into the  environment,
                  and (b) any notice  alleging  any  violation  of any  federal,
                  state  or  local  environmental,   health  or  safety  law  or
                  
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                                       25
<PAGE>


                  regulation by the Borrower or any of its Subsidiaries,  which,
                  in  either  case,  could  reasonably  be  expected  to  have a
                  Material Adverse Effect.

         (vii)    Promptly upon the furnishing  thereof to the  shareholders  of
                  the Borrower, copies of all financial statements,  reports and
                  proxy statements so furnished.

         (viii)   Promptly upon the filing thereof,  copies of all  registration
                  statements  and annual,  quarterly,  monthly or other  regular
                  reports  which the Borrower or any of its  Subsidiaries  files
                  with the Securities and Exchange Commission.

         (ix)     Such other information (including  non-financial  information)
                  as the Documentation  Agent, the  Administrative  Agent or any
                  Lender may from time to time reasonably request.

      6.2.  Use of Proceeds.  The Borrower will, and will cause each  Subsidiary
to, use the proceeds of the Advances to repay the obligations under the Existing
Credit   Agreement,   to  support  general   corporate   purposes  and  friendly
Acquisitions, and to repay outstanding Advances. The Borrower will not, nor will
it permit any Subsidiary to, use any of the proceeds of the Advances to purchase
or carry any "margin stock" (as defined in Regulation U).

       6.3. Notice of Default. The Borrower will, and will cause each Subsidiary
to,  give  prompt  notice in writing to the  Lenders  of the  occurrence  of any
Default  or  Unmatured  Default  and  of any  other  development,  financial  or
otherwise (including, without limitation, developments with respect to Year 2000
Issues), which could have a Material Adverse Effect.

      6.4.  Conduct  of  Business.  The  Borrower  will,  and  will  cause  each
Subsidiary  to,  carry on and conduct its  business  in  substantially  the same
manner and in  substantially  the same fields of  enterprise  as it is presently
conducted or in related  business lines and to do all things necessary to remain
duly  incorporated,  validly  existing  and  in  good  standing  as  a  domestic
corporation  in its  jurisdiction  of  incorporation  and maintain all requisite
authority to conduct its business in each  jurisdiction in which its business is
conducted.

      6.5.  Taxes.  The Borrower will, and will cause each Subsidiary to, timely
file complete and correct United States federal and  applicable  foreign,  state
and local tax returns  required  by law and pay when due all taxes,  assessments
and governmental charges and levies upon it or its income,  profits or Property,
except those which are being contested in good faith by appropriate  proceedings
and with respect to which  adequate  reserves  have been set aside in accordance
with Agreement Accounting Principles.

      6.6.  Insurance.  The Borrower  will,  and will cause each  Subsidiary to,
maintain with financially sound and reputable  insurance  companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound  business  practice,  and the  Borrower  will  furnish to any Lender  upon
request full information as to the insurance carried.

      6.7.  Compliance  with  Laws.  The  Borrower  will,  and will  cause  each
Subsidiary  to,  comply  with  all  laws,  rules,  regulations,  orders,  writs,
judgments,  injunctions, decrees or awards to which it may be subject, except to
the extent that such  noncompliance  could not  reasonably be expected to have a
Material Adverse Effect.

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                                       26
<PAGE>


      6.8.  Maintenance  of  Properties.  The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain,  preserve,  protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times.

      6.9.  Inspection.  The Borrower will,  and will cause each  Subsidiary to,
permit the  Administrative  Agent, the Documentation  Agent and the Lenders,  by
their  respective  representatives  and agents,  to inspect any of the Property,
corporate books and financial  records of the Borrower and each  Subsidiary,  to
examine and make copies of the books of accounts and other financial  records of
the  Borrower  and each  Subsidiary,  and to discuss the  affairs,  finances and
accounts of the Borrower and each  Subsidiary  with, and to be advised as to the
same by, their respective officers at such reasonable times and intervals as the
Administrative Agent, the Documentation Agent or any Lender may designate.

     6.10.  Dividends.  The Borrower will not, nor will it permit any Subsidiary
to, declare or pay any dividends or make any  distributions on its capital stock
(other  than  dividends  payable  in its own  capital  stock  and  dividends  on
preferred  stock of the  Borrower  outstanding  on the date of this  Agreement),
except  that  any   Subsidiary  may  declare  and  pay  dividends  to,  or  make
distributions  to, or make  redemptions  from,  the  Borrower or a  Wholly-Owned
Subsidiary.

     6.11.  Indebtedness.  The  Borrower  will  not,  nor  will  it  permit  any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:

         (i)      The Loans.

         (ii)     Indebtedness  existing  on the date  hereof and  described  in
                  Schedule "2" hereto.

         (iii)    Indebtedness  arising under Rate Hedging Agreements related to
                  the Loans.

         (iv)     Subject to the prior review by the Documentation  Agent of (A)
                  the relevant  documentation  in  connection  therewith and (B)
                  evidence  of the  Borrower's  compliance  with  the  financial
                  covenants  under this  Agreement on a proforma  basis upon the
                  incurrence  thereof,  any  other  Indebtedness  with  a  final
                  maturity  date not  earlier  than five  years from its date of
                  issuance  and  with  financial  covenants  that  are not  more
                  restrictive than those under this Agreement.

     6.12.  Merger. The Borrower will not, nor will it permit any Subsidiary to,
merge or consolidate with or into any other Person,  except: (1) any merger of a
Subsidiary  into  the  Borrower  or  a  Wholly-Owned  Subsidiary,  and  (2)  any
consolidation  or merger in which the Borrower is the  surviving  entity and the
shareholders of the Borrower prior to such  consolidation or merger will control
a majority of the Borrower's voting stock upon the closing of such consolidation
or merger.

     6.13.  Sale of  Assets.  The  Borrower  will not,  nor will it  permit  any
Subsidiary to, lease,  sell or otherwise  dispose of its Property,  to any other
Person, except:

          (i)     Sales of inventory in the ordinary course of business.

1a-222232
                                       27
<PAGE>

         (ii)     Leases,  sales or other  dispositions  of its  Property  that,
                  together  with all  other  Property  of the  Borrower  and its
                  Subsidiaries  previously  leased,  sold or  disposed of (other
                  than  inventory  in  the  ordinary   course  of  business)  as
                  permitted  by this  Section  during  the  twelve-month  period
                  ending with the month in which any such  lease,  sale or other
                  disposition occurs, do not constitute a Substantial Portion of
                  the Property of the Borrower and its Subsidiaries.

     6.14.  Investments  and  Acquisitions.  The Borrower  will not, nor will it
permit any  Subsidiary to, make or suffer to exist any  Investments  (including,
without   limitation,   loans  and  advances  to,  and  other   Investments  in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or  remain  a  partner  in any  partnership  or  joint  venture,  or to make any
Acquisition of any Person, except:

         (i)      Short-term  obligations of, or fully guaranteed by, the United
                  States of America.

         (ii)     Commercial  paper rated A-l or better by  Standard  and Poor's
                  Ratings  Group,  a division of McGraw  Hill,  Inc.,  or P-l or
                  better by Moody's Investors Service, Inc.

                  (iii) Municipal bonds rated AA or better,  and preferred stock
                  rated A or better, by Standard and Poor's Ratings Group.

         (iv)     Demand deposit  accounts  maintained in the ordinary course of
                  business.

         (v)      Certificates  of  deposit  issued  by and time  deposits  with
                  commercial banks (whether  domestic or foreign) having capital
                  and surplus in excess of $100,000,000.

         (vi)     Existing  Investments in Subsidiaries and other Investments in
                  existence  on the date hereof and  described  in Schedule  "1"
                  hereto.

         (vii)    Investments arising in the ordinary course of business.

         (viii)   Friendly  Acquisitions  involving  total  expenditures  not to
                  exceed (A) 20% of the Borrower's consolidated Net Worth in any
                  one transaction or series of transactions  related to the same
                  entity;  or (B) in the aggregate for any calendar year, 50% of
                  the Borrower's consolidated Net Worth; provided, however, that
                  with the prior  written  consent of the Lenders,  the Borrower
                  may make friendly Acquisitions involving total expenditures in
                  excess of the above limits.

         (ix)     Investments   in  connection   with   non-qualified   deferred
                  compensation  programs for employees of the Borrower where the
                  Investments are directed by such employees.

     6.15.  Liens.  The Borrower will not, nor will it permit any Subsidiary to,
create,  incur,  or suffer to exist  any Lien in, of or on the  Property  of the
Borrower or any of its Subsidiaries, except:

         (i)      Liens for taxes, assessments or governmental charges or levies
                  on its  Property  if  the  same  shall  not  at  the  time  be
                  delinquent or thereafter can be paid without  penalty,  or are
                  being  contested in good faith and by appropriate  proceedings
                  
1a-222232
                                       28
<PAGE>


                  and for which adequate  reserves in accordance  with generally
                  accepted principles of accounting shall have been set aside on
                  its books.

         (ii)     Liens imposed by law, such as  carriers',  warehousemen's  and
                  mechanics'  liens  and  other  similar  liens  arising  in the
                  ordinary   course  of  business   which   secure   payment  of
                  obligations  not more than 60 days past due or which are being
                  contested  in good faith by  appropriate  proceedings  and for
                  which  adequate  reserves  shall  have  been set  aside on its
                  books.

         (iii)    Landlord's  liens  (whether  imposed by law or by contract) on
                  personal  property  located in leased premises  arising in the
                  ordinary   course  of  business   which   secure   payment  of
                  obligations  not more than 60 days past due or which are being
                  contested  in good faith by  appropriate  proceedings  and for
                  which  adequate  reserves  shall  have  been set  aside on its
                  books.

         (iv)     Liens  arising  out of  pledges  or  deposits  under  worker's
                  compensation laws, unemployment  insurance,  old age pensions,
                  or other social  security or retirement  benefits,  or similar
                  legislation.

         (v)      Utility  easements,   building  restrictions  and  such  other
                  encumbrances  or charges  against  real  property  as are of a
                  nature  generally  existing  with respect to  properties  of a
                  similar  character and which do not in any material way affect
                  the  marketability  of the  same  or  interfere  with  the use
                  thereof in the business of the Borrower or the Subsidiaries.

         (vi)     Liens  existing on the date hereof and  described  in Schedule
                  "2" hereto.

     6.16.  Total  Indebtedness  / Total  Capital  Ratio.  The Borrower will not
permit the ratio of the Total  Indebtedness to the Total Capital of the Borrower
and its Subsidiaries on a consolidated basis to exceed 0.45:1.00, all determined
as of the last day of each fiscal quarter for the 12-month period ending on such
date.

     6.17.  Affiliates.   The  Borrower  will  not,  and  will  not  permit  any
Subsidiary to, enter into any transaction  (including,  without limitation,  the
purchase  or sale of any  Property  or  service)  with,  or make any  payment or
transfer  to,  any  Affiliate  except in the  ordinary  course of  business  and
pursuant to the reasonable  requirements of the Borrower's or such  Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such  Subsidiary  than  the  Borrower  or  such  Subsidiary  would  obtain  in a
comparable arms-length transaction.

     6.18.  Net Worth The Borrower will not permit the Net Worth of the Borrower
and its  consolidated  Subsidiaries to be less than the sum of: (i) $83,500,000,
plus (ii) fifty percent (50%) of net income of the Borrower and its consolidated
Subsidiaries  (if  positive)  earned  at  any  time  after  December  31,  1997,
determined  in  accordance  with  Agreement  Accounting  Principles,  plus (iii)
seventy-five percent (75%) of the net proceeds of any new equity issuance of the
Borrower and its consolidated  Subsidiaries occurring at any time after the date
of this Agreement.

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                                       29
<PAGE>

     6.19.  Total  Indebtedness  / Adjusted  EBITDA Ratio The Borrower  will not
permit the Total  Indebtedness  / Adjusted  EBITDA Ratio of the Borrower and its
consolidated Subsidiaries,  determined as of the last day of each fiscal quarter
for the 12-month period ending on such date, to exceed 3.0:1.0.

     6.20.  Interest  Coverage  Ratio The Borrower  will not permit the Interest
Coverage Ratio of the Borrower and its consolidated Subsidiaries,  determined as
of the last day of each fiscal  quarter for the 12-month  period  ending on such
date, to be less than 3.0:1.0.

     6.21.  Year 2000 Program. The Borrower will take and will cause each of its
Subsidiaries   to  take  all  such  actions  as  are  reasonably   necessary  to
successfully implement the Year 2000 Program and to assure that Year 2000 Issues
will not have a Material  Adverse  Effect.  At the request of the  Documentation
Agent or any Lender,  the Borrower will provide a  description  of the Year 2000
Program, together with any updates or progress reports with respect thereto.


                                   ARTICLE VII

                                    DEFAULTS
                                    --------

     The occurrence of any one or more of the following  events shall constitute
a Default:

      7.1.  Any  representation  or warranty made or deemed made by or on behalf
of the Borrower or any of its  Subsidiaries  to the Lenders,  the  Documentation
Agent or the  Administrative  Agent under or in connection  with this Agreement,
any Loan, or any  certificate or information  delivered in connection  with this
Agreement or any other Loan Document shall be materially false on the date as of
which made.

      7.2.  Nonpayment  of  principal  of any Note when due,  or  nonpayment  of
interest upon any Note or of any commitment fee or other  obligations  under any
of the Loan Documents within five days after the same becomes due.

      7.3.  The  breach by the  Borrower  of any of the terms or  provisions  of
Article VI.

      7.4.  The breach by the Borrower (other than a breach which  constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this
Agreement which is not remedied within thirty days after written notice from the
Administrative Agent, the Documentation Agent or any Lender.

      7.5.  Failure  of the  Borrower  or any  Guarantor  to pay  when  due  any
Indebtedness aggregating in excess of $1,000,000 ("Material  Indebtedness");  or
the default by the  Borrower or any  Guarantor in the  performance  of any term,
provision or condition  contained in any agreement under which any such Material
Indebtedness  was  created or is  governed,  or any other  event  shall occur or
condition  exist,  the  effect of which is to cause,  or to permit the holder or
holders of such Material  Indebtedness to cause,  such Material  Indebtedness to
become due prior to its stated  maturity;  or any Material  Indebtedness  of the
Borrower or any Guarantor shall be declared to be due and payable or required to
be prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof;  or the Borrower or any Guarantor shall not pay, or
admit in writing its inability to pay, its debts generally as they become due.

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                                       30
<PAGE>

      7.6.  The  Borrower  or any  Guarantor  shall (i) have an order for relief
entered with respect to it under the Federal bankruptcy laws as now or hereafter
in effect,  (ii) make an assignment  for the benefit of  creditors,  (iii) apply
for,  seek,  consent  to,  or  acquiesce  in,  the  appointment  of a  receiver,
custodian,  trustee,  examiner,  liquidator  or similar  official  for it or any
Substantial  Portion of its Property,  (iv) institute any proceeding  seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to  adjudicate it a bankrupt or  insolvent,  or seeking  dissolution,
winding up, liquidation, reorganization,  arrangement, adjustment or composition
of it or  its  debts  under  any  law  relating  to  bankruptcy,  insolvency  or
reorganization  or relief of debtors or fail to file an answer or other pleading
denying the material  allegations of any such  proceeding  filed against it, (v)
take any corporate  action to authorize or effect any of the  foregoing  actions
set  forth  in this  Section  7.6 or (vi)  fail to  contest  in good  faith  any
appointment or proceeding described in Section 7.7.

      7.7.  Without the  application, approval or consent of the Borrower or any
Guarantor, a receiver,  trustee, examiner,  liquidator or similar official shall
be appointed for the Borrower or any Guarantor or any Substantial Portion of its
Property,  or a proceeding  described  in Section  7.6(iv)  shall be  instituted
against  the  Borrower  or  any   Guarantor  and  such   appointment   continues
undischarged or such proceeding  continues  undismissed or unstayed for a period
of 30 consecutive days.

      7.8.  Any court, government or governmental agency shall condemn, seize or
otherwise  appropriate,  or take custody or control of (each a  "Condemnation"),
all or any portion of the Property of the Borrower or any Guarantor which,  when
taken  together  with all other  Property of the  Borrower or any  Guarantor  so
condemned,  seized,  appropriated,  or taken  custody or control of,  during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.

      7.9.  The Borrower or any of its Subsidiaries shall fail within 30 days to
pay, bond or otherwise  discharge any judgment or order for the payment of money
(to the extent not covered by insurance) in excess of  $1,000,000,  which is not
stayed on appeal or otherwise being appropriately contested in good faith.

     7.10.  The Unfunded  Liabilities of all Single  Employer Plans shall exceed
in the aggregate  $1,000,000 or any  Reportable  Event shall occur in connection
with any Plan.

     7.11.  The Borrower or any of its Subsidiaries  shall be the subject of any
proceeding or investigation  pertaining to the release by the Borrower or any of
its  Subsidiaries,  or any  other  Person  of any  toxic or  hazardous  waste or
substance into the environment,  or any violation of any federal, state or local
environmental,  health or safety law or regulation, which, in either case, could
be reasonably expected to have a Material Adverse Effect.

     7.12.  The  occurrence  of any  "default",  as defined in any Loan Document
(other  than this  Agreement  or the Notes) or the breach of any of the terms or
provisions of any Loan Document (other than this Agreement or the Notes),  which
default or breach continues beyond any period of grace therein provided.

     7.13.  Nonpayment by the Borrower of any Rate Hedging  Obligation  when due
or the breach by the Borrower of any term,  provision or condition  contained in
any Rate Hedging Agreement.

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                                       31
<PAGE>

     7.14.  Any Guaranty  shall fail to remain in full force or effect (and such
failure could  reasonably be expected to have a Material  Adverse Effect) or any
action  shall  be  taken  to   discontinue   or  to  assert  the  invalidity  or
unenforceability of any Guaranty, or any Guarantor shall fail to comply with any
of the terms or  provisions  of any  Guaranty  to which it is a party  (and such
failure could reasonably be expected to have a Material Adverse Effect),  or any
Guarantor  denies that it has any further  liability under any Guaranty to which
it is a party, or gives notice to such effect.

                                  ARTICLE VIII

                 ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
                 ----------------------------------------------

      8.1.  Acceleration.  If any Default described in Section 7.6 or 7.7 occurs
with  respect to the  Borrower,  the  obligations  of the  Lenders to make Loans
hereunder and the  Administrative  Agent's obligation to issue Letters of Credit
hereunder shall  automatically  terminate and the Obligations  shall immediately
become  due and  payable  without  any  election  or  action  on the part of the
Administrative  Agent,  the  Documentation  Agent or any  Lender.  If any  other
Default  occurs,  the  Required  Lenders (or the  Administrative  Agent with the
consent of the Required Lenders) may terminate or suspend the obligations of the
Lenders to make Loans  hereunder (and the  Administrative  Agent may in its sole
discretion  terminate  or  suspend  its  obligation  to issue  Letters of Credit
hereunder), or declare the Obligations to be due and payable, or both, whereupon
the Obligations shall become immediately due and payable,  without  presentment,
demand,  protest  or  notice  of any  kind,  all of which  the  Borrower  hereby
expressly waives. Any amounts paid by the Borrower to the  Administrative  Agent
on account of Outstanding  Letters of Credit shall be held by the Administrative
Agent as cash  collateral  for the  obligations  of the Borrower with respect to
unpaid L/C Drawings  relating  thereto,  and the Borrower  hereby  grants to the
Administrative  Agent a first  perfected  security  interest  in said  cash  and
authorizes the Administrative  Agent to apply such cash on account of future L/C
Drawings as such become payable by the Borrower.

     If,  within  five  (5)  days  after  acceleration  of the  maturity  of the
Obligations  or  termination  of the  obligations  of the  Lenders to make Loans
hereunder  as a result of any Default  (other than any Default as  described  in
Section  7.6 or 7.7 with  respect to the  Borrower)  and before any  judgment or
decree  for the  payment of the  Obligations  due shall  have been  obtained  or
entered,  the Required Lenders (in their sole discretion)  shall so direct,  the
Administrative  Agent shall,  by notice to the Borrower,  rescind and annul such
acceleration and/or termination.

      8.2.  Amendments.  Subject to the  provisions  of this Article  VIII,  the
Required Lenders (or the Documentation  Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental hereto
for the purpose of adding or modifying any  provisions to the Loan  Documents or
changing in any manner the rights of the Lenders or the  Borrower  hereunder  or
waiving any Default  hereunder;  provided,  however,  that no such  supplemental
agreement shall, without the consent of each Lender affected thereby:

         (i)      Extend the  maturity of any Loan or Note or forgive all or any
                  portion of the principal amount thereof, or reduce the rate or
                  extend the time of payment of interest or fees thereon.

         (ii)     Modify the definition of Required Lenders.

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                                       32
<PAGE>


         (iii)    Reduce  the  amount  or  extend  the  payment  date  for,  the
                  mandatory  payments required under Section 2.2, or increase or
                  decrease the amount of the Commitment of any Lender  hereunder
                  (except  for a  ratable  decrease  in the  Commitments  of all
                  Lenders),  or permit the  Borrower to assign its rights  under
                  this Agreement.

         (iv)     Amend this Section 8.2.

         (v)      Release any Guarantor of any Advance.

No amendment of any provision of this Agreement  relating to the  Administrative
Agent or the Documentation  Agent shall be effective without the written consent
of the  Administrative  Agent or the  Documentation  Agent,  as applicable.  The
Documentation  Agent may waive payment of the fee required  under Section 12.3.2
without obtaining the consent of any other party to this Agreement.

      8.3.  Preservation  of Rights.  No delay or omission of the  Lenders,  the
Administrative  Agent or the Documentation Agent to exercise any right under the
Loan  Documents  shall  impair such right or be  construed to be a waiver of any
Default or an acquiescence therein, and the making of a Loan notwithstanding the
existence  of a  Default  or  the  inability  of the  Borrower  to  satisfy  the
conditions   precedent  to  such  Loan  shall  not   constitute  any  waiver  or
acquiescence.  Any  single  or  partial  exercise  of any such  right  shall not
preclude other or further  exercise  thereof or the exercise of any other right,
and no  waiver,  amendment  or  other  variation  of the  terms,  conditions  or
provisions  of the Loan  Documents  whatsoever  shall be valid unless in writing
signed by the Lenders  required  pursuant to Section  8.2,  and then only to the
extent in such writing  specifically  set forth.  All remedies  contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Administrative  Agent, the Documentation  Agent and the Lenders until the
Obligations have been paid in full.







                                   ARTICLE IX

                               GENERAL PROVISIONS
                               ------------------

      9.1.  Survival of  Representations.  All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.

      9.2.  Governmental Regulation. Anything contained in this Agreement to the
contrary  notwithstanding,  no Lender shall be obligated to extend credit to the
Borrower  in  violation  of  any  limitation  or  prohibition  provided  by  any
applicable statute or regulation.

      9.3.  Taxes. Any taxes (excluding  federal income taxes on the overall net
income of any  Lender)  or other  similar  assessments  or  charges  made by any
governmental or revenue authority in respect of the Loan Documents shall be paid
by the Borrower, together with interest and penalties, if any.

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<PAGE>

      9.4.  Headings. Section headings in the Loan Documents are for convenience
of  reference  only,  and  shall not  govern  the  interpretation  of any of the
provisions of the Loan Documents.

      9.5.  Entire Agreement. The Loan Documents embody the entire agreement and
understanding  among the Borrower,  the Administrative  Agent, the Documentation
Agent and the Lenders and  supersede  all prior  agreements  and  understandings
among the Borrower,  the Administrative  Agent, the Documentation  Agent and the
Lenders relating to the subject matter thereof.

      9.6.  Several  Obligations;  Benefits of this  Agreement.  The  respective
obligations  of the  Lenders  hereunder  are several and not joint and no Lender
shall be the  partner  or agent of any other  (except to the extent to which the
Administrative  Agent or the Documentation  Agent is authorized to act as such).
The failure of any Lender to perform any of its obligations  hereunder shall not
relieve any other Lender from any of its obligations  hereunder.  This Agreement
shall not be  construed  so as to confer  any right or  benefit  upon any Person
other than the parties to this  Agreement and their  respective  successors  and
assigns.

      9.7.  Expenses;   Indemnification.   The  Borrower  shall   reimburse  the
Documentation Agent for any costs, internal charges and reasonable out-of-pocket
expenses  (including  attorneys'  fees and time  charges  of  attorneys  for the
Documentation  Agent,  which  attorneys  may be employees  of the  Documentation
Agent)  paid or  incurred  by the  Documentation  Agent in  connection  with the
preparation,  negotiation, execution, delivery, review, amendment, modification,
and administration of the Loan Documents.  The Borrower also agrees to reimburse
the Administrative Agent, the Documentation Agent and the Lenders for any costs,
internal charges and reasonable  out-of-pocket  expenses  (including  attorneys'
fees  and  time  charges  of  attorneys  for  the   Administrative   Agent,  the
Documentation  Agent and the Lenders,  which  attorneys  may be employees of the
Administrative  Agent, the Documentation  Agent or the Lenders) paid or incurred
by the Administrative Agent, the Documentation Agent or any Lender in connection
with the collection and enforcement of the Loan Documents.  The Borrower further
agrees to indemnify the Administrative  Agent, the Documentation  Agent and each
Lender,  its  directors,  officers  and  employees  against all losses,  claims,
damages,  penalties,  judgments,  liabilities and expenses  (including,  without
limitation,  all expenses of litigation or preparation  therefor  whether or not
the  Administrative  Agent,  the  Documentation  Agent or any  Lender is a party
thereto)  which any of them may pay or incur  arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated hereby or the
direct or indirect  application  or proposed  application of the proceeds of any
Loan  hereunder  except to the  extent  that they are  determined  by a court of
competent  jurisdiction  to have resulted  from the gross  negligence or willful
misconduct of the party seeking indemnification. The obligations of the Borrower
under this Section shall survive the termination of this Agreement.

      9.8.  Numbers of Documents.  All statements,  notices,  closing documents,
and  requests  hereunder  shall be  furnished  to the  Administrative  Agent and
Documentation  Agent with  sufficient  counterparts  so that the  Administrative
Agent or the Documentation Agent may furnish one to each of the Lenders.

      9.9.  Accounting.   Except  as  provided  to  the  contrary  herein,   all
accounting   terms  used  herein  shall  be   interpreted   and  all  accounting
determinations  hereunder shall be made in accordance with Agreement  Accounting
Principles,  except that any calculation or determination which is to be made on
a  consolidated  basis shall be made for the Borrower and all its  Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements.
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<PAGE>

     9.10.  Severability of Provisions.  Any provision in any Loan Document that
is held to be inoperative,  unenforceable, or invalid in any jurisdiction shall,
as to that  jurisdiction,  be  inoperative,  unenforceable,  or invalid  without
affecting  the  remaining  provisions  in that  jurisdiction  or the  operation,
enforceability,  or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.

     9.11.  Nonliability of Lenders.The relationship between the Borrower on the
one hand and the Lenders,  the Documentation Agent and the Administrative  Agent
on the other hand shall be solely  that of  borrower  and  lender.  Neither  the
Administrative  Agent,  the  Documentation  Agent nor any Lender  shall have any
fiduciary  responsibilities to the Borrower.  Neither the Administrative  Agent,
the  Documentation  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. The Borrower agrees that neither
the  Administrative  Agent,  the  Documentation  Agent nor any Lender shall have
liability to the Borrower (whether sounding in tort,  contract or otherwise) for
losses  suffered by the Borrower in connection  with,  arising out of, or in any
way related to, the transactions  contemplated and the relationship  established
by the Loan  Documents,  or any act,  omission or event  occurring in connection
therewith,  unless it is  determined by a court of competent  jurisdiction  in a
final  and  non-appealable  order  that  such  losses  resulted  from the  gross
negligence  or willful  misconduct  of the party from which  recovery is sought.
Neither the Administrative  Agent, the Documentation  Agent nor any Lender shall
have any liability with respect to, and the Borrower hereby waives, releases and
agrees not to sue for, any special,  indirect or consequential  damages suffered
by the Borrower in connection with, arising out of, or in any way related to the
Loan Documents or the transactions contemplated thereby.

     9.12.  Confidentiality.   Each  Lender  agrees  to  hold  any  confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their  respective  Affiliates,  (ii) to legal  counsel,  accountants,  and other
professional  advisors to that Lender or to a  Transferee,  (iii) to  regulatory
officials,  (iv) to any Person as  requested  pursuant to or as required by law,
regulation,  or legal  process,  (v) to any Person in connection  with any legal
proceeding to which that Lender is a party, and (vi) permitted by Section 12.4.

     9.13.  Nonreliance. Each Lender hereby represents that it is not relying on
or looking  to any margin  stock (as  defined  in  Regulation  U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.


                                    ARTICLE X

              THE ADMINISTRATIVE AGENT AND THE DOCUMENTATION AGENT
              ----------------------------------------------------

     10.1.  Appointment; Nature of Relationship.First Chicago and First Security
are  hereby  appointed  by  the  Lenders  as the  Documentation  Agent  and  the
Administrative Agent respectively  hereunder and under each other Loan Document,
and each of the Lenders  irrevocably  authorizes the Documentation Agent and the
Administrative  Agent to act as the  contractual  representative  of such Lender
with the  rights  and duties  expressly  set forth  herein and in the other Loan
Documents.  Each of the Documentation Agent and the Administrative  Agent agrees
to act as such contractual  representative upon the express conditions contained
in this Article X.  Notwithstanding the use of the defined terms  "Documentation

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<PAGE>


Agent" and  "Administrative  Agent," it is expressly  understood and agreed that
the  Documentation  Agent  and the  Administrative  Agent  shall  not  have  any
fiduciary  responsibilities  to any  Lender by reason of this  Agreement  or any
other  Loan  Document  and  that  each  of  the  Documentation   Agent  and  the
Administrative  Agent is merely acting as the representative of the Lenders with
only those duties as are  expressly  set forth in this  Agreement  and the other
Loan Documents. In its capacity as the Lenders' contractual representative, each
of the  Documentation  Agent and the  Administrative  Agent (i) does not  hereby
assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of
the Lenders within the meaning of Section 9-105 of the Uniform  Commercial  Code
and (iii) is acting as an independent contractor, the rights and duties of which
are limited to those  expressly  set forth in this  Agreement and the other Loan
Documents.  Each of the  Lenders  hereby  agrees to assert no claim  against the
Documentation  Agent or the  Administrative  Agent on any  agency  theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.

     10.2.  Powers. Each of the Documentation Agent and the Administrative Agent
shall  have  and may  exercise  such  powers  under  the Loan  Documents  as are
specifically  delegated to it by the terms of each  thereof,  together with such
powers as are reasonably incidental thereto. Neither the Documentation Agent nor
the  Administrative  Agent shall have any implied duties to the Lenders,  or any
obligation  to the  Lenders  to take any  action  thereunder  except  any action
specifically provided by the Loan Documents to be taken by it.

     10.3.  General  Immunity.   Neither  the   Administrative   Agent  nor  the
Documentation Agent nor any of their respective directors,  officers,  agents or
employees shall be liable to the Borrower, the Lenders or any Lender for (i) any
action  taken or omitted to be taken by it or them  hereunder or under any other
Loan Document or in connection herewith or therewith except for its or their own
gross negligence or willful misconduct;  or (ii) any determination by it or them
that compliance with any law or any  governmental  or  quasi-governmental  rule,
regulation,  order,  policy,  guideline or directive  (whether or not having the
force of law) requires the Advances and  Commitments  hereunder to be classified
as being part of a "highly leveraged transaction".

     10.4.  No   Responsibility   for   Loans,   Recitals,   etc.   Neither  the
Administrative  Agent nor the  Documentation  Agent nor any of their  respective
directors,  officers,  agents or employees  shall be responsible for or have any
duty to  ascertain,  inquire  into,  or verify (i) any  statement,  warranty  or
representation  made in  connection  with any  Loan  Document  or any  borrowing
hereunder;  (ii)  the  performance  or  observance  of any of the  covenants  or
agreements  of  any  obligor  under  any  Loan  Document,   including,   without
limitation,  any agreement by an obligor to furnish information directly to each
Lender;  (iii) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered to the  Documentation  Agent; (iv) the
validity, enforceability,  effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing  furnished in connection  therewith;
or (v) the value, sufficiency,  creation, perfection or priority of any interest
in  any  collateral   security.   Neither  the   Documentation   Agent  nor  the
Administrative  Agent shall have any duty to disclose to the Lenders information
that is not required to be furnished by the Borrower to it at such time,  but is
voluntarily  furnished  by the  Borrower  to it (either in its  capacity  as the
Documentation  Agent  or the  Administrative  Agent,  as  applicable,  or in its
individual capacity).

     10.5.  Action on Instructions of Lenders. Each of the  Documentation  Agent
and the Administrative Agent shall in all cases be fully protected in acting, or
in  refraining  from  acting,  hereunder  and under any other Loan  Document  in

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<PAGE>


accordance with written  instructions  signed by the Required Lenders,  and such
instructions  and any action taken or failure to act pursuant  thereto  shall be
binding on all of the Lenders and on all  holders of Notes.  The Lenders  hereby
acknowledge that neither the Documentation  Agent nor the  Administrative  Agent
shall be under any duty to take any  discretionary  action permitted to be taken
by it pursuant to the  provisions  of this  Agreement or any other Loan Document
unless it shall be requested in writing to do so by the Required  Lenders.  Each
of the Documentation Agent and the Administrative Agent shall be fully justified
in failing or  refusing  to take any action  hereunder  and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata  against any and all  liability,  cost and expense that it may incur by
reason of taking or continuing to take any such action.

     10.6.  Employment of Agents and Counsel.  Each of the  Documentation  Agent
and the Administrative  Agent may execute any of its duties as the Documentation
Agent or the Administrative Agent (as applicable)  hereunder and under any other
Loan Document by or through employees,  agents, and  attorneys-in-fact and shall
not be answerable to the Lenders,  except as to money or securities  received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Each of the Documentation
Agent and the  Administrative  Agent  shall be  entitled  to  advice of  counsel
concerning  all matters  pertaining to the agency hereby  created and its duties
hereunder and under any other Loan Document.

     10.7.  Reliance on Documents;  Counsel. Each of the Documentation Agent and
the  Administrative  Agent  shall be  entitled  to rely upon any  Note,  notice,
consent, certificate,  affidavit, letter, telegram, statement, paper or document
believed  by it to be genuine and correct and to have been signed or sent by the
proper person or persons,  and, in respect to legal matters, upon the opinion of
counsel selected by it, which counsel may be its employees.

     10.8.  Reimbursement  and  Indemnification.  The Lenders agree to reimburse
and  indemnify  each of the  Documentation  Agent and the  Administrative  Agent
ratably in proportion to their  respective  Commitments  (or, if the Commitments
have been terminated,  in proportion to their  Commitments  immediately prior to
such  termination)  (i) for any amounts not reimbursed by the Borrower for which
the Documentation Agent or the Administrative  Agent (as applicable) is entitled
to  reimbursement  by the Borrower under the Loan Documents,  (ii) for any other
expenses incurred by the  Documentation  Agent or the  Administrative  Agent (as
applicable)  on behalf  of the  Lenders,  in  connection  with the  preparation,
execution,  delivery,  administration  and enforcement of the Loan Documents and
(iii) for any liabilities,  obligations,  losses, damages,  penalties,  actions,
judgments,  suits,  costs,  expenses  or  disbursements  of any kind and  nature
whatsoever  which  may be  imposed  on,  incurred  by or  asserted  against  the
Documentation  Agent or the  Administrative  Agent  (as  applicable)  in any way
relating to or arising out of the Loan Documents or any other document delivered
in  connection  therewith  or  the  transactions  contemplated  thereby,  or the
enforcement of any of the terms thereof or of any such other documents, provided
that no Lender shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful  misconduct of the  Documentation  Agent or
the Administrative  Agent (as applicable).  The obligations of the Lenders under
this Section 10.8 shall survive  payment of the  Obligations  and termination of
this Agreement.

     10.9.  Notice  of  Default.   Neither  the  Administrative  Agent  nor  the
Documentation  Agent  shall  be  deemed  to  have  knowledge  or  notice  of the
occurrence of any Default or Unmatured  Default hereunder unless it has received
written  notice  from a  Lender  or the  Borrower  referring  to this  Agreement
describing  such Default or Unmatured  Default and stating that such notice is a

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<PAGE>

"notice  of  default".  In  the  event  that  the  Administrative  Agent  or the
Documentation Agent (as applicable) receives such a notice, it shall give prompt
notice thereof to the Lenders.

     10.10. Rights as a  Lender.  In the event the  Administrative  Agent or the
Documentation  Agent (as applicable) is a Lender,  it shall have the same rights
and powers  hereunder  and under any other Loan  Document  as any Lender and may
exercise  the  same as  though  it  were  not the  Administrative  Agent  or the
Documentation  Agent (as applicable),  and the term "Lender" or "Lenders" shall,
at any time when such party is a Lender, unless the context otherwise indicates,
include such party in its individual capacity.  Each of the Administrative Agent
and the  Documentation  Agent may  accept  deposits  from,  lend  money to,  and
generally engage in any kind of trust,  debt,  equity or other  transaction,  in
addition to those  contemplated  by this  Agreement or any other Loan  Document,
with the  Borrower  or any of its  Subsidiaries  in which the  Borrower  or such
Subsidiary is not restricted hereby from engaging with any other Person. Each of
the  Administrative  Agent  and  the  Documentation  Agent,  in  its  individual
capacity, is not obligated to remain a Lender.

     10.l1. Lender  Credit  Decision.  Each  Lender  acknowledges  that  it has,
independently   and  without  reliance  upon  the   Administrative   Agent,  the
Documentation  Agent or any other Lender and based on the  financial  statements
prepared by the  Borrower and such other  documents  and  information  as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents.  Each Lender also  acknowledges  that it
will,  independently  and without  reliance upon the  Administrative  Agent, the
Documentation  Agent  or any  other  Lender  and  based  on such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions in taking or not taking  action under this  Agreement  and the
other Loan Documents.

     10.12. Successor  Administrative Agent and Documentation Agent. Each of the
Documentation  Agent  and the  Administrative  Agent  may  resign at any time by
giving written notice thereof to the Lenders and the Borrower,  such resignation
to be  effective  upon the  appointment  of a successor  Documentation  Agent or
successor Administrative Agent (as applicable) or, if no such successor has been
appointed,   forty-five  days  after  the  retiring   Administrative   Agent  or
Documentation  Agent (as  applicable)  gives notice of its  intention to resign.
Upon any such resignation, the Required Lenders shall have the right to appoint,
on behalf of the Borrower and the Lenders, such successor.  If no such successor
shall have been so appointed by the Required  Lenders  within  thirty days after
the resigning  Administrative  Agent's or Documentation  Agent's (as applicable)
giving notice of its intention to resign,  then the resigning party may appoint,
on behalf of the Borrower and the Lenders, its successor.  If the Administrative
Agent or the  Documentation  Agent (as applicable) has resigned and no successor
has been appointed, the Lenders may perform all the duties of the Administrative
Agent or the  Documentation  Agent (as  applicable)  hereunder  and the Borrower
shall make all payments in respect of the  Obligations to the applicable  Lender
and for all other  purposes  shall deal directly with the Lenders.  No successor
Administrative  Agent or  successor  Documentation  Agent  shall be deemed to be
appointed hereunder until such successor has accepted the appointment.  Any such
successor shall be a commercial bank having capital and retained  earnings of at
least  $50,000,000.  Upon the acceptance of any  appointment  as  Administrative
Agent or  Documentation  Agent  hereunder by a successor,  such successor  shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the resigning party.  Upon the effectiveness of the resignation of
the Administrative Agent or the Documentation Agent (as applicable), it shall be
discharged  from  its  duties  and  obligations  hereunder  and  under  the Loan
Documents. After the effectiveness of the resignation of an Administrative Agent
or a Documentation Agent (as applicable), the provisions of this Article X shall

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<PAGE>

continue in effect for its benefit in respect of any actions taken or omitted to
be  taken  by it  while  it  was  acting  as  the  Administrative  Agent  or the
Documentation  Agent  (as  applicable)   hereunder  and  under  the  other  Loan
Documents.


                                   ARTICLE XI

                            SETOFF; RATABLE PAYMENTS
                            ------------------------

     11.1.  Setoff. In addition to, and without limitation of, any rights of the
Lenders  under  applicable  law,  if the  Borrower  becomes  insolvent,  however
evidenced,  or any Default or  Unmatured  Default  occurs,  any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other  Indebtedness at any time held or owing by
any Lender to or for the credit or  account  of the  Borrower  may be offset and
applied toward the payment of the Obligations  owing to such Lender,  whether or
not the Obligations, or any part thereof, shall then be due.

     11.2.  Ratable Payments. If any Lender, whether by setoff or otherwise, has
payment  made to it upon its Loans  (other than  payments  received  pursuant to
Section 3.1, 3.2 or 3.4) in a greater proportion than that received by any other
Lender,  such Lender agrees,  promptly upon demand, to purchase a portion of the
Loans held by the other  Lenders so that after such  purchase  each  Lender will
hold its ratable proportion of Loans. If any Lender,  whether in connection with
setoff or  amounts  which  might be  subject  to setoff or  otherwise,  receives
collateral or other  protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in  proportion  to their  Loans.  In case any such payment is disturbed by legal
process,  or otherwise,  appropriate  further  adjustments shall be made. If any
such amount is to be applied to Indebtedness of the Borrower to a Lender,  other
than Indebtedness evidenced by any of the Notes held by such Lender, such amount
shall be  applied  ratably to such other  Indebtedness  and to the  Indebtedness
evidenced by such Notes.

                                   ARTICLE XII

                BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
                -------------------------------------------------

     12.1.  Successors  and  Assigns.  The  terms  and  provisions  of the  Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders  and  their  respective  successors  and  assigns,  except  that (i) the
Borrower shall not have the right to assign its rights or obligations  under the
Loan  Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3.  Notwithstanding  clause (ii) of this Section, any Lender may
at any time, without the consent of the Borrower, the Documentation Agent or the
Administrative  Agent,  assign  all or any  portion  of its  rights  under  this
Agreement and its Notes to a Federal Reserve Bank;  provided,  however,  that no
such  assignment to a Federal  Reserve Bank shall release the transferor  Lender
from its obligations  hereunder.  The Administrative Agent and the Documentation
Agent may treat the  payee of any Note as the  owner  thereof  for all  purposes
hereof unless and until such payee  complies with Section 12.3 in the case of an
assignment  thereof or, in the case of any other  transfer,  a written notice of
the transfer is filed with the  Documentation  Agent. Any assignee or transferee
of a Note  agrees  by  acceptance  thereof  to be  bound  by all the  terms  and
provisions  of the Loan  Documents.  Any  request,  authority  or consent of any
Person,  who at the time of making  such  request or giving  such  authority  or

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<PAGE>

consent  is the  holder of any Note,  shall be  conclusive  and  binding  on any
subsequent  holder,  transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.

     12.2.    Participations.

                  12.2.1  Permitted Participants; Effect. Any Lender may, in the
         ordinary  course of its business and in accordance with applicable law,
         at  any  time   sell  to  one  or  more   banks   or   other   entities
         ("Participants")  participating  interests  in any  Loan  owing to such
         Lender,  any Note held by such Lender,  any  Commitment of such Lender,
         any  participating  interests  in any Letter of Credit or unrepaid  L/C
         Drawing, or any other interest of such Lender under the Loan Documents.
         In the event of any such sale by a Lender of participating interests to
         a Participant, such Lender's obligations under the Loan Documents shall
         remain  unchanged,  such Lender shall remain solely  responsible to the
         other parties  hereto for the  performance  of such  obligations,  such
         Lender shall remain the holder of any such Note for all purposes  under
         the Loan  Documents,  all amounts  payable by the  Borrower  under this
         Agreement  shall be  determined  as if such  Lender  had not sold  such
         participating  interests, and the Borrower, the Documentation Agent and
         the  Administrative  Agent shall  continue to deal solely and  directly
         with  such  Lender  in  connection   with  such  Lender's   rights  and
         obligations under the Loan Documents.

                  12.2.2. Voting Rights. Each Lender shall retain the sole right
         to  approve,  without the consent of any  Participant,  any  amendment,
         modification  or waiver of any  provision of the Loan  Documents  other
         than any  amendment,  modification  or waiver with respect to any Loan,
         Commitment,  Letter of Credit or  unrepaid  L/C  Drawing  in which such
         Participant has an interest which forgives principal,  interest or fees
         or reduces the  interest  rate or fees payable with respect to any such
         Loan, Commitment,  Letter of Credit or unrepaid L/C Drawing,  postpones
         any date fixed for any regularly-scheduled  payment of principal of, or
         interest  or fees on,  any such Loan,  Commitment,  Letter of Credit or
         unrepaid  L/C  Drawing,  releases  any  guarantor  of any such  Loan or
         releases any substantial  portion of collateral,  if any,  securing any
         such Loan.

                  12.2.3. Benefit  of Setoff.   The  Borrower  agrees  that each
         Participant  shall be deemed to have the  right of setoff  provided  in
         Section 11.1 in respect of its participating  interest in amounts owing
         under the Loan  Documents  to the same  extent as if the  amount of its
         participating  interest were owing directly to it as a Lender under the
         Loan  Documents,  provided  that each Lender  shall retain the right of
         setoff  provided  in  Section  11.1  with  respect  to  the  amount  of
         participating interests sold to each Participant.  The Lenders agree to
         share with each Participant,  and each  Participant,  by exercising the
         right of setoff  provided  in Section  11.1,  agrees to share with each
         Lender,  any amount  received  pursuant to the exercise of its right of
         setoff, such amounts to be shared in accordance with Section 11.2 as if
         each Participant were a Lender.

                  12.3.   Assignments.

                  12.3.1. Permitted  Assignments.   With prior written notice to
         the Documentation  Agent and the other Lenders,  any Lender may, in the
         ordinary  course of its business and in accordance with applicable law,
         at  any  time   assign  to  one  or  more   banks  or  other   entities
         ("Purchasers")  all or any part of its rights and obligations under the
         Loan Documents.  Such assignment  shall be substantially in the form of
         Exhibit  "D"  hereto or in such  other  form as may be agreed to by the
         parties  thereto.  The  consent  of the  Documentation  Agent  shall be
         
1A-222232
                                       40
<PAGE>

         required  prior to an assignment  becoming  effective with respect to a
         Purchaser which is not a Lender or an Affiliate  thereof.  Such consent
         shall not be  unreasonably  withheld or delayed.  Each such  assignment
         shall be in an amount  not less than the  lesser of (i)  $5,000,000  or
         (ii)  the  remaining  amount  of  the  assigning  Lender's   Commitment
         (calculated as at the date of such assignment).

                  12.3.2. Effect;  Effective  Date.   Upon (i)  delivery  to the
         Documentation  Agent of a notice of  assignment,  substantially  in the
         form  attached  as  Exhibit  "I" to  Exhibit  "D"  hereto (a "Notice of
         Assignment"),  together with any consents  required by Section  12.3.1,
         and (ii) payment of a $3,500 fee by the  assignee to the  Documentation
         Agent for processing  such  assignment,  such  assignment  shall become
         effective on the effective date specified in such Notice of Assignment.
         The  Notice  of  Assignment  shall  contain  a  representation  by  the
         Purchaser to the effect that none of the consideration used to make the
         purchase of the Commitment  and Loans under the  applicable  assignment
         agreement  are "plan assets" as defined under ERISA and that the rights
         and interests of the Purchaser in and under the Loan Documents will not
         be "plan assets" under ERISA.  On and after the effective  date of such
         assignment,  such Purchaser shall for all purposes be a Lender party to
         this Agreement and any other Loan Document  executed by the Lenders and
         shall have all the rights and  obligations  of a Lender  under the Loan
         Documents,  to the same extent as if it were an original  party hereto,
         and no further  consent or action by the  Borrower,  the  Lenders,  the
         Documentation  Agent or the  Administrative  Agent shall be required to
         release the  transferor  Lender with respect to the  percentage  of the
         Aggregate  Commitment  and Loans assigned to such  Purchaser.  Upon the
         consummation of any assignment to a Purchaser  pursuant to this Section
         12.3.2, the transferor Lender, the Documentation Agent and the Borrower
         shall make appropriate  arrangements so that new Notes, if appropriate,
         are issued to such Purchaser.

     12.4. Dissemination of Information.  The Borrower authorizes each Lender to
disclose to any  Participant  or  Purchaser  or any other  Person  acquiring  an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective  Transferee  any and all  information  in such  Lender's  possession
concerning the  creditworthiness of the Borrower and its Subsidiaries;  provided
that each  Transferee and prospective  Transferee  agrees to be bound by Section
9.12 of this Agreement.

     12.5. Tax Treatment. If any interest in any Loan Document is transferred to
any Transferee which is organized under the laws of any jurisdiction  other than
the United States or any State thereof,  the transferor  Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 4.3.


                                  ARTICLE XIII

                                     NOTICES
                                     -------

     13.1. Notices.   Except as otherwise permitted by Section 2.13 with respect
to borrowing  notices,  all notices,  requests and other  communications  to any
party hereunder shall be in writing (including bank wire, facsimile transmission
or similar  writing)  and shall be given to such  party:  (x) in the case of the
Borrower, the Documentation Agent or the Administrative Agent, at its address or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Lender,  at its address or  facsimile  number set forth on the  signature  pages
hereof or in its  administrative  questionnaire or (z) in the case of any party,
such other address or facsimile  number as such party may hereafter  specify for

1A-222232
                                       41
<PAGE>

the purpose by notice to the Administrative  Agent, the Documentation  Agent and
the  Borrower.  Each  such  notice,  request  or  other  communication  shall be
effective  (i) if given  by  facsimile  transmission,  when  transmitted  to the
facsimile  number  specified  in this  Section  and  confirmation  of receipt is
received,  (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage  prepaid,  addressed as aforesaid or (iii)
if given by any other means,  when  delivered  at the address  specified in this
Section;  provided  that notices to the  Administrative  Agent under  Article II
shall not be effective until received.

     13.2. Change of Address.   The  Borrower,  the  Administrative  Agent,  the
Documentation  Agent and any Lender may each  change the  address for service of
notice upon it by a notice in writing to the other parties hereto.


                                   ARTICLE XIV

                                  COUNTERPARTS
                                  ------------

     This Agreement may be executed in any number of counterparts,  all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart.  This Agreement shall be
effective (with such  effectiveness  being  retroactive to July 1, 1998) when it
has been executed by the Borrower,  the Administrative  Agent, the Documentation
Agent and the Lenders and each party has  notified  the  Documentation  Agent by
telefacsimile or telephone, that it has taken such action.




                                   ARTICLE XV

          CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
          ------------------------------------------------------------

     15.1. CHOICE OF LAW.   THE LOAN  DOCUMENTS  (OTHER THAN THOSE  CONTAINING A
CONTRARY  EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF CALIFORNIA, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

     15.2. CONSENT TO JURISDICTION.  THE BORROWER HEREBY IRREVOCABLY  SUBMITS TO
THE NON-EXCLUSIVE  JURISDICTION OF ANY UNITED STATES FEDERAL OR CALIFORNIA STATE
COURT  SITTING  IN LOS  ANGELES IN ANY ACTION OR  PROCEEDING  ARISING  OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY  IRREVOCABLY  AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING  MAY BE HEARD AND  DETERMINED
IN ANY SUCH COURT AND  IRREVOCABLY  WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT,  ACTION OR  PROCEEDING  BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN  INCONVENIENT  FORUM.  NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE ADMINISTRATIVE  AGENT, THE DOCUMENTATION AGENT OR ANY LENDER TO

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                                       42
<PAGE>

BRING PROCEEDINGS  AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL  PROCEEDING BY THE BORROWER AGAINST THE  ADMINISTRATIVE  AGENT, THE
DOCUMENTATION AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE  AGENT,
THE  DOCUMENTATION  AGENT OR ANY LENDER INVOLVING,  DIRECTLY OR INDIRECTLY,  ANY
MATTER  IN ANY WAY  ARISING  OUT OF,  RELATED  TO,  OR  CONNECTED  WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN LOS ANGELES, CALIFORNIA.

     15.3. WAIVER OF JURY TRIAL.  THE BORROWER,  THE  ADMINISTRATIVE  AGENT, THE
DOCUMENTATION  AGENT AND EACH LENDER  HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING  INVOLVING,  DIRECTLY OR INDIRECTLY,  ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

1A-222232
                                       43
<PAGE>

     IN WITNESS WHEREOF, the Borrower,  the Lenders, the Documentation Agent and
the Administrative Agent have executed this Agreement as of the date first above
written.
                                                     SOS STAFFING SERVICES, INC.


                           By:                       
                           Print Name:                    
                           Title:                         
                                      1415 South Main Street
                                      Salt Lake City, Utah 84115
                                      Fax: (801) 483-4283

                           Attention: Mr. Gary Crook

                           THE FIRST NATIONAL BANK OF CHICAGO,
                           as the Documentation Agent and as a Lender


                           By:                       
                           Print Name:                    
                           Title:                         
                                  777 South Figueroa Street, 4th Floor
                                  Los Angeles, California 90017
                                  Fax: (213) 683-4999

                           Attention: Mr. James P. Moore

                                      With copy to:

                                            One First National Plaza, 10th Floor
                                            Chicago, Illinois 60670
                                            Fax: (312) 732-4840
                                            Attention: Ms. Sharon Bosch

                           FIRST SECURITY BANK, N.A.,
                           as the Administrative Agent and as a Lender


                           By:                       
                           Print Name:                    
                           Title:                         
                                  15 East 100 South, 2nd Floor
                                  Salt Lake City, Utah 84111
                                  Fax: (801) 246-5532

                           Attention: Mr. David P. Williams

1A-222232
                                       44
<PAGE>


                                   EXHIBIT "A"


                                      NOTE


                              Salt Lake City, Utah
                              --------------------
                               

     FOR VALUE RECEIVED,  SOS STAFFING  SERVICES,  INC., a Utah corporation (the
"Borrower"),  hereby  unconditionally  promises  to  pay to the  order  of  (the
"Lender")  at the  office of First  Security  Bank,  N.A.,  a  national  banking
association  (the  "Administrative  Agent"),  located at 15 East 100 South,  2nd
Floor,  Salt Lake City,  Utah 84111, in lawful money of the United States and in
immediately  available  funds,  on the dates required under that certain Amended
and Restated Credit Agreement dated as of July 27, 1998 among the Borrower,  the
lenders from time to time party thereto, including the Lender, the Documentation
Agent and the  Administrative  Agent (as the same may be amended or modified and
in effect from time to time, the  "Agreement"),  the aggregate  unpaid principal
amount of all Loans made by the Lender to the Borrower pursuant to Article II of
the Agreement.

     The Borrower  further agrees to pay interest in like money and funds at the
office of the  Administrative  Agent referred to above, on the unpaid  principal
balance hereof from the date advanced until paid in full at the applicable rates
and on the  dates  set  forth  in the  Agreement.  The  Borrower  shall  pay the
principal  of and accrued and unpaid  interest on the Loans in full on or before
the Facility  Termination  Date. The holder of this Note is hereby authorized to
record the date and amount of each Loan and the date and amount of each  payment
of principal and interest,  and applicable  interest rates and other information
with respect  thereto,  on the schedules  annexed to and  constituting a part of
this Note (or by any  analogous  method the holder  hereof may elect  consistent
with its customary  practices) and any such recordation  shall,  absent manifest
error,  constitute  conclusive  evidence of the accuracy of the  information  so
recorded;  provided,  however,  that  the  failure  to  make a  notation  or the
inaccuracy of any notation shall not limit or otherwise  affect the  obligations
of the Borrower under the Agreement and this Note.

     This Note is one of the Notes  issued  pursuant  to, and is entitled to the
benefits of, the Agreement, to which reference is hereby made for a statement of
the terms and conditions governing this Note, including the terms and conditions
under which this Note may be prepaid or its maturity date accelerated. This Note
is guaranteed pursuant to the Guaranties,  all as more specifically described in
the  Agreement,  and  reference is made thereto for a statement of the terms and
provisions  thereof.  Capitalized  terms used herein and not  otherwise  defined
herein are used with the meanings attributed to them in the Agreement.


                           SOS STAFFING SERVICES, INC.


                           By:                       
                           Print Name:                    
                           Title:                         

1A-222232
                                       45
<PAGE>

                         SCHEDULE OF LOANS AND PAYMENTS
                                       TO
                      NOTE OF SOS STAFFING SERVICES, INC.,
                              DATED _________, ____


      Interest                          Principal   Maturity        Principal
 Amount of Interest  Interest       Amount Unpaid       Amount
Date      Loan       Period         Rate    Paid     Balance  Paid   
----   ----------  -----------   --------- -------  --------- ----

1a-222232
                                       46
<PAGE>

                                   EXHIBIT "B"
                                 FORM OF OPINION

                                        July __, 1998

The  Documentation  Agent,  the  Administrative  Agent and the  Lenders  who are
parties to the Agreement described below.

Ladies and Gentlemen:

     We have acted as counsel for SOS Staffing  Services,  Inc. (the "Borrower")
and each of the Guarantors in connection with the execution and delivery of that
certain  Amended and Restated  Credit  Agreement  dated as of July 27, 1998 (the
"Agreement") among the Borrower,  the Lenders named therein,  The First National
Bank of Chicago,  as the Documentation  Agent, and First Security Bank, N.A., as
the Administrative  Agent, and the other Loan Documents in connection therewith.
This opinion is being furnished to the Documentation  Agent, the  Administrative
Agent and the  Lenders  pursuant  to the  provisions  of Section  4.1(ix) of the
Agreement.  All capitalized terms used in this opinion and not otherwise defined
herein shall have the meanings attributed to them in the Agreement.

     We have examined  executed  copies of each of the Loan Documents and copies
of the articles of incorporation  and by-laws (with all amendments  respectively
thereto) of each of the Borrower and the  Guarantors,  and  certified  copies of
resolutions  adopted by the Board of Directors of the Borrower on _____________,
1998,  authorizing the execution and delivery of the Loan Documents to which the
Borrower is party, and certified  copies of resolutions  adopted by the Board of
Directors  of each of the  Guarantors  on  ___________,  1998,  authorizing  the
execution and delivery of the Loan  Documents to which such  Guarantor is party.
We are generally  familiar with the business and  operations of the Borrower and
the Guarantors. We have examined such statutes, decisions and matters of law and
other documents as we deemed necessary to express the following opinions.

         In our examination made for the purpose of rendering these opinions, we
have relied upon the  certificates  of incumbency this day furnished to us as to
the genuineness of all signatures.  After due inquiry and  examination,  we have
assumed for the purpose of the opinions the  authenticity of all other documents
submitted  to us as originals  and the  conformity  with  originals of all other
documents  submitted  to us as  certified  copies.  As to any  questions of fact
material to such opinions,  we have, when relevant facts were not  independently
established, relied upon certificates of governmental officials and certificates
of officers of the Company, copies of which are attached hereto.

         The  opinions  hereinafter  expressed  are  subject  to  the  following
qualifications:

              (a) The effect of  applicable  bankruptcy  and other  similar laws
affecting the rights of creditors generally; and

              (b) The  effect of rules of law  governing  specific  performance,
injunctive relief or other equitable remedies.

1a-222232
                                       47
<PAGE>


     Based upon the foregoing, it is our opinion that:

     l.  Each  of the  Borrower  and  its  Subsidiaries  is a  corporation  duly
incorporated,  validly  existing  and in good  standing  under  the  laws of its
jurisdiction  of  incorporation  and has all requisite  authority to conduct its
business in each jurisdiction in which its business is conducted.

     2. Each of the  Borrower and the  Guarantors  has the  corporate  power and
authority and legal right to execute and deliver the Loan  Documents to which it
is party and to perform its obligations  thereunder.  The execution and delivery
of the Loan Documents by the Borrower and the Guarantors and the  performance of
their  respective  obligations  thereunder  have been duly  authorized by proper
corporate  proceedings,  the Loan  Documents  to  which  the  Borrower  is party
constitute  legal,  valid and binding  obligations  of the Borrower  enforceable
against the Borrower in accordance  with their terms,  and the Loan Documents to
which each Guarantor is party constitute legal, valid and binding obligations of
such  Guarantor  enforceable  against such  Guarantor in  accordance  with their
terms.  The  execution and delivery by the Borrower or any Guarantor of the Loan
Documents,  the  consummation  of the  transactions  therein  contemplated,  and
compliance with the provisions thereof will not:

                  (a) require any consent of the Borrower's shareholders;

                  (b) violate any law, rule, regulation,  order, writ, judgment,
         injunction,  decree  or award  binding  on the  Borrower  or any of the
         Guarantors   or  the   Borrower's  or  any   Guarantor's   articles  of
         incorporation or by-laws or the provisions of any indenture, instrument
         or agreement to which the Borrower or any of the  Guarantors is a party
         or is subject; or

                  (c) result in, or require,  the creation or  imposition of any
         Lien  pursuant  to the  provisions  of  any  indenture,  instrument  or
         agreement to which the Borrower or any of the  Guarantors is a party or
         is subject.

     3. There is no litigation or proceeding  against the Borrower or any of its
Subsidiaries  which,  if  adversely  determined,  could have a Material  Adverse
Effect.

     4. No  approval,  authorization,  consent,  adjudication  or  order  of any
governmental  authority,  which has not been  obtained by the Borrower or any of
the  Guarantors,  is  required  to be  obtained  by the  Borrower  or any of the
Guarantors in connection  with the execution and delivery of the Loan Documents,
the  borrowings  under the  Agreement or in  connection  with the payment by the
Borrower or any Guarantor of the Obligations.

     This  opinion  may  be  relied  upon  by  the   Documentation   Agent,  the
Administrative  Agent, the Lenders and their  participants,  assignees and other
transferees.


                           Very truly yours,
                             ------------

1a-222232

                                       48
<PAGE>

                                   EXHIBIT "C"

                             COMPLIANCE CERTIFICATE



To:      The Lenders parties to the
         Agreement Described Below

     This Compliance  Certificate is furnished  pursuant to that certain Amended
and Restated Credit  Agreement dated as of July 27, 1998 (as amended,  modified,
renewed or  extended  from time to time,  the  "Agreement")  among SOS  Staffing
Services,  Inc. (the "Borrower"),  the lenders party thereto, The First National
Bank of Chicago,  as the Documentation  Agent, and First Security Bank, N.A., as
the  Administrative  Agent.  Unless otherwise defined herein,  capitalized terms
used in this Compliance  Certificate  have the meanings  ascribed thereto in the
Agreement.

     THE UNDERSIGNED HEREBY CERTIFIES THAT:

     1.  I am the duly elected                       of the Borrower;
                              ----------------------

     2. I have  reviewed  the terms of the  Agreement  and I have made,  or have
caused to be made under my supervision,  a detailed  review of the  transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;

     3. The examinations  described in paragraph 2 did not disclose,  and I have
no knowledge  of, the  existence of any  condition or event which  constitutes a
Default  or  Unmatured  Default  during or at the end of the  accounting  period
covered  by  the  attached  financial  statements  or as of  the  date  of  this
Certificate, except as set forth below; and

     4. Schedule I attached  hereto sets forth  financial data and  computations
evidencing the Borrower's  compliance  with certain  covenants of the Agreement,
all of which data and computations are true, complete and correct.

     5. Schedule II attached hereto sets forth the determination of the interest
rate to be paid for Advances commencing the first day of the month following the
delivery hereof.

     6.  Schedule  III  attached  hereto  sets  forth the  various  reports  and
deliveries  which are  required  under the Credit  Agreement  and the other Loan
Documents and the status of compliance.

     Described below are the exceptions,  if any, to paragraph 3 by listing,  in
detail,  the nature of the  condition or event,  the period  during which it has
existed and the action which the Borrower has taken,  is taking,  or proposes to
take with respect to each such condition or event:

1a-222232
                                       49
<PAGE>
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------

     The foregoing  certifications,  together with the computations set forth in
Schedule I and Schedule II hereto and the financial  statements  delivered  with
this Certificate in support hereof, are made and delivered this day of , 19 .

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

1a-222232
                                       50
<PAGE>

                      SCHEDULE I TO COMPLIANCE CERTIFICATE

                      Compliance as of _________, 199_ with
               Provisions of Sections 6.16, 6.18, 6.19 and 6.20 of
                                  the Agreement

1a-222232
                                       51
<PAGE>


                      SCHEDULE II TO COMPLIANCE CERTIFICATE

                               Rate Determination


1a-222232
                                       52
<PAGE>


                     SCHEDULE III TO COMPLIANCE CERTIFICATE

                             Reports and Deliveries

1a-222232                                       
                                       53
<PAGE>

                                   EXHIBIT "D"

                              ASSIGNMENT AGREEMENT

     This  Assignment  Agreement  (this  "Assignment  Agreement")  between  (the
 "Assignor") and (the "Assignee") is dated as of , 19 . The parties hereto agree
 as follows:


     1.  PRELIMINARY  STATEMENT.  The Assignor is a party to a Credit  Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto  ("Schedule 1").  Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.


     2. ASSIGNMENT AND ASSUMPTION.  The Assignor hereby sells and assigns to the
Assignee,  and the Assignee hereby  purchases and assumes from the Assignor,  an
interest  in and to the  Assignor's  rights  and  obligations  under the  Credit
Agreement  such that after giving effect to such  assignment  the Assignee shall
have purchased  pursuant to this  Assignment  Agreement the percentage  interest
specified in Item 3(b) of Schedule 1 of all  outstanding  rights and obligations
under  the  Credit  Agreement  and  the  other  Loan  Documents.  The  aggregate
Commitment  purchased  by the  Assignee  hereunder  is set  forth  in  Item 4 of
Schedule 1.


     3. EFFECTIVE  DATE. The effective  date of this  Assignment  Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 and the date a Notice of Assignment  substantially  in the form of Exhibit "I"
attached hereto has been delivered to the  Documentation  Agent.  Such Notice of
Assignment   must  include  any  consents   required  to  be  delivered  to  the
Documentation Agent by Section 12.3.1 of the Credit Agreement.  In no event will
the Effective Date occur if the payments  required to be made by the Assignee to
the Assignor on the Effective Date under Sections 4 and 5 hereof are not made on
the  proposed  Effective  Date.  The  Assignor  will notify the  Assignee of the
proposed  Effective  Date no later than the  Business  Day prior to the proposed
Effective Date. As of the Effective Date, (i) the Assignee shall have the rights
and  obligations of a Lender under the Loan Documents with respect to the rights
and obligations  assigned to the Assignee  hereunder and (ii) the Assignor shall
relinquish its rights and be released from its  corresponding  obligations under
the Loan  Documents with respect to the rights and  obligations  assigned to the
Assignee hereunder.


     4.  PAYMENTS  OBLIGATIONS.  On and after the Effective  Date,  the Assignee
shall be  entitled  to receive  from the  Administrative  Agent all  payments of
principal,  interest and fees with respect to the interest assigned hereby.  The
Assignee shall advance funds directly to the  Administrative  Agent with respect
to all Loans and reimbursement payments made on or after the Effective Date with
respect to the  interest  assigned  hereby.  In  consideration  for the sale and
assignment of Loans hereunder,  (i) the Assignee shall pay the Assignor,  on the
Effective  Date, an amount equal to the  principal  amount of the portion of all
Floating Rate Loans assigned to the Assignee  hereunder and (ii) with respect to
each Fixed Rate Loan made by the Assignor and assigned to the Assignee hereunder

1a-222232
                                       54
<PAGE>


which is outstanding on the Effective  Date, (a) on the last day of the Interest
Period  therefor or (b) on such  earlier  date agreed to by the Assignor and the
Assignee or (c) on the date on which any such Fixed Rate Loan either becomes due
(by  acceleration  or  otherwise)  or is prepaid  (the date as  described in the
foregoing clauses (a), (b) or (c) being hereinafter  referred to as the "Payment
Date"),  the Assignee  shall pay the  Assignor an amount equal to the  principal
amount of the portion of such Fixed Rate Loan assigned to the Assignee  which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that the
Payment Date for such Fixed Rate Loan shall be the  Effective  Date,  they shall
agree to the  interest  rate  applicable  to the  portion of such Loan  assigned
hereunder  for the period  from the  Effective  Date to the end of the  existing
Interest Period  applicable to such Fixed Rate Loan (the "Agreed Interest Rate")
and any interest  received by the Assignee in excess of the Agreed Interest Rate
shall be remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the Borrower
with  respect  to any  Fixed  Rate  Loan sold by the  Assignor  to the  Assignee
hereunder,  the Assignee  shall pay to the Assignor  interest for such period on
the  portion  of such  Fixed  Rate Loan  sold by the  Assignor  to the  Assignee
hereunder at the applicable rate provided by the Credit Agreement.  In the event
a  prepayment  of any Fixed Rate Loan which is existing on the Payment  Date and
assigned by the Assignor to the Assignee hereunder occurs after the Payment Date
but before the end of the Interest  Period  applicable  to such Fixed Rate Loan,
the Assignee  shall remit to the Assignor the excess of the  prepayment  penalty
paid with  respect  to the  portion  of such  Fixed  Rate Loan  assigned  to the
Assignee hereunder over the amount which would have been paid if such prepayment
penalty was calculated based on the Agreed Interest Rate. The Assignee will also
promptly  remit to the Assignor (i) any  principal  payments  received  from the
Administrative  Agent with respect to Fixed Rate Loans prior to the Payment Date
and  (ii)  any  amounts  of  interest  on  Loans  and  fees  received  from  the
Administrative  Agent which  relate to the portion of the Loans  assigned to the
Assignee  hereunder  for periods  prior to the  Effective  Date,  in the case of
Floating  Rate Loans or fees,  or the  Payment  Date,  in the case of Fixed Rate
Loans,  and not  previously  paid by the Assignee to the Assignor.  In the event
that either party hereto receives any payment to which the other party hereto is
entitled under this Assignment  Agreement,  then the party receiving such amount
shall promptly remit it to the other party hereto.


     5.   FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a
fee on each day on which a payment of  interest or fees is made under the Credit
Agreement with respect to the amounts assigned to the Assignee  hereunder (other
than a payment of interest or fees for the period  prior to the  Effective  Date
or, in the case of Fixed Rate Loans,  the Payment  Date,  which the  Assignee is
obligated to deliver to the Assignor  pursuant to Section 4 hereof).  The amount
of such  fee  shall  be the  difference  between  (i) the  interest  or fee,  as
applicable,  paid with respect to the amounts assigned to the Assignee hereunder
and (ii) the  interest  or fee, as  applicable,  which would have been paid with
respect to the amounts assigned to the Assignee  hereunder if each interest rate
was of 1% less than the interest  rate paid by the Borrower or if the fee was of
1% less than the fee paid by the  Borrower,  as  applicable.  In  addition,  the
Assignee  agrees  to pay % of the  recordation  fee  required  to be paid to the
Administrative Agent in connection with this Assignment Agreement.


     6.   REPRESENTATIONS  OF  THE  ASSIGNOR;   LIMITATIONS  ON  THE  ASSIGNOR'S
LIABILITY.  The  Assignor  represents  and  warrants  that it is the  legal  and
beneficial  owner of the interest  being  assigned by it hereunder and that such
interest is free and clear of any adverse claim  created by the Assignor.  It is
understood  and agreed that the  assignment  and  assumption  hereunder are made
without  recourse  to  the  Assignor  and  that  the  Assignor  makes  no  other

1a-222232
                                       55
<PAGE>


representation or warranty of any kind to the Assignee. Neither the Assignor nor
any  of its  officers,  directors,  employees,  agents  or  attorneys  shall  be
responsible  for (i)  the due  execution,  legality,  validity,  enforceability,
genuineness,  sufficiency  or  collectability  of any Loan  Document,  including
without  limitation,  documents  granting the  Assignor and the other  Lenders a
security  interest  in  assets  of the  Borrower  or  any  guarantor,  (ii)  any
representation,  warranty or statement made in or in connection  with any of the
Loan  Documents,  (iii)  the  financial  condition  or  creditworthiness  of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or  provisions of any of the Loan  Documents,  (v)  inspecting  any of the
Property,  books or records of the Borrower, (vi) the validity,  enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or  purporting to secure the Loans or (vii) any mistake,  error of judgment,  or
action  taken or  omitted to be taken in  connection  with the Loans or the Loan
Documents.


     7.  REPRESENTATIONS OF THE ASSIGNEE.  The Assignee (i) confirms that it has
received a copy of the Credit  Agreement,  together with copies of the financial
statements requested by the Assignee and such other documents and information as
it has deemed  appropriate to make its own credit analysis and decision to enter
into this  Assignment  Agreement,  (ii) agrees that it will,  independently  and
without reliance upon the  Administrative  Agent, the  Documentation  Agent, the
Assignor or any other Lender and based on such  documents and  information at it
shall deem appropriate at the time, continue to make its own credit decisions in
taking  or not  taking  action  under the Loan  Documents,  (iii)  appoints  and
authorizes the  Administrative  Agent and the  Documentation  Agent to take such
action  as agent on its  behalf  and to  exercise  such  powers  under  the Loan
Documents as are  delegated to the  Administrative  Agent and the  Documentation
Agent  by the  terms  thereof,  together  with  such  powers  as are  reasonably
incidental  respectively thereto, (iv) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Loan Documents
are  required  to be  performed  by it as a Lender,  (v) agrees that its payment
instructions  and  notice  instructions  are as set forth in the  attachment  to
Schedule  1, (vi)  confirms  that  none of the  funds,  monies,  assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined  under ERISA and that its rights,  benefits and  interests in
and under the Loan Documents will not be "plan assets" under ERISA,  and *[(vii)
attaches  the forms  prescribed  by the Internal  Revenue  Service of the United
States  certifying  that the Assignee is entitled to receive  payments under the
Loan  Documents  without  deduction or  withholding of any United States federal
income taxes].*

*to be inserted if the Assignee is not incorporated under the laws of the United
States, or a state thereof.

     8.  INDEMNITY.  The  Assignee  agrees to  indemnify  and hold the  Assignor
harmless  against any and all losses,  costs and  expenses  (including,  without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's  non-performance
of the obligations assumed under this Assignment Agreement.


     9.  SUBSEQUENT  ASSIGNMENTS.  After the Effective  Date, the Assignee shall
have the right pursuant to Section 12.3.1 of the Credit  Agreement to assign the
rights  which are  assigned to the  Assignee  hereunder to any entity or person,
provided  that (i) any such  subsequent  assignment  does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation,  order,
writ,  judgment,  injunction or decree and that any consent  required  under the
terms of the Loan  Documents has been obtained and (ii) unless the prior written

1a-222232
                                       56
<PAGE>


consent of the Assignor is obtained,  the Assignee is not thereby  released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.

     10. REDUCTIONS OF AGGREGATE  COMMITMENT.  If any reduction in the Aggregate
Commitment  occurs  between  the  date  of  this  Assignment  Agreement  and the
Effective Date, the percentage  interest specified in Item 3 of Schedule 1 shall
remain the same, but the dollar amount purchased shall be recalculated  based on
the reduced Aggregate Commitment.


     11. ENTIRE AGREEMENT.  This Assignment Agreement and the attached Notice of
Assignment  embody the entire  agreement and  understanding  between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.


     12. GOVERNING  LAW.  This  Assignment  Agreement  shall  be governed by the
internal law, and not the law of conflicts, of the State of California.


     13. NOTICES.  Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement.  For the purpose hereof, the addresses
of the  parties  hereto  (until  notice of a change is  delivered)  shall be the
address set forth in the attachment to Schedule 1.


     IN WITNESS  WHEREOF,  the parties  hereto  have  executed  this  Assignment
Agreement by their duly authorized officers as of the date first above written.

                           [NAME OF ASSIGNOR]

                           By:                                
                              ---------------------
                           Title:                             
                                 ------------------
                                 ------------------
                                 ------------------



                           [NAME OF ASSIGNEE]

                           By:
                              ---------------------
                           Title:
                                 ------------------
                                 ------------------
                                 ------------------

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                                       57
<PAGE>


                                   SCHEDULE 1
                             to Assignment Agreement

1.   Description and Date of Credit Agreement:

2.   Date of Assignment Agreement:               , 19  
                                  ------------
3. Amounts (As of Date of Item 2 above):


         a.       Aggregate Commitment
                  under the
                  Credit Agreement          $                
                                  ----------
         b.       Assignee's percentage
                  of the Aggregate Commitment
                  purchased
                  under the Assignment
                  Agreement      %
                           -----


4.       Assignee's Commitment purchased
         under the Assignment Agreement         $         
                                       ---------
5.       Proposed Effective Date:                    
                                 -----------
Accepted and Agreed:

[NAME OF ASSIGNOR]                               [NAME OF ASSIGNEE]
By:                                               By:  
   ------------------------                          ---------------------------
Title:                                            Title: 
      ---------------------                             ------------------------

1a-222232
                                       58
<PAGE>

                Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT

         Attach Assignor's Administrative Information Sheet, which must
                     include notice address for the Assignee


1a-222232
                                       59
<PAGE>

                                   EXHIBIT "I"
                             to Assignment Agreement

                                     NOTICE
                                  OF ASSIGNMENT
                                  -------------


                                                      , 19
                                                -----  


To:      THE FIRST NATIONAL BANK OF CHICAGO

From:    [NAME OF ASSIGNOR] (the "Assignor")

                [NAME OF ASSIGNEE] (the "Assignee")


                1. We refer to that Credit  Agreement  (the "Credit  Agreement")
described in Item 1 of Schedule 1 attached hereto  ("Schedule  1").  Capitalized
terms used  herein and not  otherwise  defined  herein  shall have the  meanings
attributed to them in the Credit Agreement.

                2. This  Notice  of  Assignment  (this  "Notice")  is given  and
delivered to the  Documentation  Agent  pursuant to Section 12.3.2 of the Credit
Agreement.

                3. The Assignor and the Assignee have entered into an Assignment
Agreement,  dated as of , 19 (the "Assignment"),  pursuant to which, among other
things,  the Assignor  has sold,  assigned,  delegated  and  transferred  to the
Assignee, and the Assignee has purchased, accepted and assumed from the Assignor
the percentage  interest  specified in Item 3 of Schedule 1 of all outstandings,
rights and  obligations  under the Credit  Agreement  relating to the facilities
listed in Item 3 of Schedule 1. The Effective  Date of the  Assignment  shall be
the later of the date specified in Item 5 of Schedule 1 or two Business Days (or
such shorter period as agreed to by the  Documentation  Agent) after this Notice
of Assignment  and any consents and fees required by Sections  12.3.1 and 12.3.2
of the Credit Agreement have been delivered to the Documentation Agent, provided
that the Effective Date shall not occur if any condition  precedent agreed to by
the Assignor and the Assignee has not been satisfied.

                4. The Assignor and the Assignee hereby give to the Borrower and
the  Documentation  Agent notice of the assignment  and  delegation  referred to
herein.  The Assignor will confer with the  Documentation  Agent before the date
specified in Item 5 of Schedule 1 to determine if the Assignment  Agreement will
become effective on such date pursuant to Section 3 hereof, and will confer with
the  Documentation  Agent to determine the Effective  Date pursuant to Section 3
hereof if it occurs  thereafter.  The Assignor  shall  notify the  Documentation
Agent if the  Assignment  Agreement  does not become  effective  on any proposed
Effective  Date as a result of the failure to satisfy the  conditions  precedent
agreed to by the Assignor and the Assignee.  At the request of the Documentation
Agent, the Assignor will give the  Documentation  Agent written  confirmation of
the satisfaction of the conditions precedent.

                5. The Assignor or the Assignee  shall pay to the  Documentation
Agent on or before the Effective Date the  processing fee of $3,500  required by
Section 12.3.2 of the Credit Agreement.

1a-222232
                                       60
<PAGE>


                6. The  Assignor  and the  Assignee  request and direct that the
Documentation  Agent prepare and cause the Borrower to execute and deliver a new
Note, if appropriate,  to the Assignee.  The Assignor, if it will no longer be a
Lender,  agrees to deliver to the Documentation Agent the original Note received
by it from the Borrower upon its receipt of the appropriate amount.

                7. The Assignee advises the Documentation  Agent that notice and
payment instructions are set forth in the attachment to Schedule 1.

                8. The Assignee hereby  represents and warrants that none of the
funds,  monies,  assets or other  consideration  being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that its
rights,  benefits,  and  interests in and under the Loan  Documents  will not be
"plan assets" under ERISA.

                9. The  Assignee  authorizes  the  Documentation  Agent  and the
Administrative  Agent to act as its agent under the Loan Documents in accordance
with the terms thereof. The Assignee acknowledges that neither the Documentation
Agent  nor the  Administrative  Agent has any duty to  supply  information  with
respect to the Borrower or the Loan Documents to the Assignee until the Assignee
becomes a party to the Credit Agreement.

NAME OF ASSIGNOR                              NAME OF ASSIGNEE

By:                                           By:                               
   ----------------------                        -----------------------
Title:                                        Title:                           
      -------------------                           --------------------

ACKNOWLEDGED AND CONSENTED TO BY
THE FIRST NATIONAL BANK OF CHICAGO,
as Documentation Agent

By:                                  
   ----------------------
Title:                  
      -------------------
                 [Attach photocopy of Schedule 1 to Assignment]

1a-222232                
                                       61
<PAGE>

                                   EXHIBIT "E"
                 LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION

To First Security Bank , N.A.,
 as Administrative Agent (the "Administrative Agent") under the Credit Agreement
 Described Below.

Re:      Amended and Restated Credit Agreement, dated July 27, 1998 (as the same
         may be amended or modified, the "Credit Agreement"), among SOS Staffing
         Services,  Inc.  (the  "Borrower"),  the  Lenders  named  therein,  the
         Documentation  Agent, and the Administrative  Agent.  Capitalized terms
         used herein and not  otherwise  defined  herein shall have the meanings
         assigned thereto in the Credit Agreement.

         The Administrative Agent is specifically authorized and directed to act
upon the following  standing  money  transfer  instructions  with respect to the
proceeds  of  Advances  or other  extensions  of credit  from time to time until
receipt by the  Administrative  Agent of a specific  written  revocation of such
instructions by the Borrower,  provided,  however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 13.1 of the Credit  Agreement or based on any telephonic
notice made in accordance with Section 2.13 of the Credit Agreement.

Facility Identification Number(s)                                            
                                 -----------------------------------------------
Customer/Account Name                                                     
                     -----------------------------------------------------------
Transfer Funds To                                                         
                 ---------------------------------------------------------------

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

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


For Account No.                                                               
               -----------------------------------------------------------------
Reference/Attention To                                                        
                      ----------------------------------------------------------
Authorized Officer (Customer Representative)   Date                          
                                                    ----------------------------
                            ------------------

------------------------------                  --------------------------------
(Please Print)                                  Signature


Bank Officer Name                             Date                              
                                                  ------------------------------

------------------------------                  --------------------------------
(Please Print)                                  Signature


    (Deliver Completed Form to Credit Support Staff For Immediate Processing)

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                                       62
<PAGE>

                                   EXHIBIT "F"

                                    GUARANTY




                  THIS GUARANTY (the "Guaranty") is made and dated as of the ___
day of  ______,  19__ by  _________________________,  a  _______________________
("Guarantor").


                                    RECITALS



         A.  This Guaranty is being executed and delivered to The First National
Bank of  Chicago,  acting  in its  capacity  as  documentation  agent  (in  such
capacity,  the "Documentation Agent") for the lenders from time to time party to
that certain Amended and Restated Credit  Agreement dated as of July 27, 1998 by
and among SOS Staffing  Services,  Inc.  (the  "Borrower"),  the  Administrative
Agent, the Documentation  Agent, and the lenders from time to time party thereto
(the  "Lenders")  (as  amended,  extended and  replaced  from time to time,  the
"Credit Agreement," and with capitalized terms not otherwise defined herein used
with the meanings given such terms in the Credit Agreement).

         B.  Pursuant to the Credit  Agreement the Lenders have agreed to extend
credit to the  Borrower  on the terms and  subject to the  conditions  set forth
therein.

         C.  Pursuant  to  the  terms  of the  Credit  Agreement,  Guarantor  is
required,  among  other  things,  to execute and  deliver  this  Guaranty to the
Documentation Agent for the benefit of the Lenders.

                  NOW, THEREFORE, in consideration of the above Recitals and for
other good and  valuable  consideration,  the receipt and  adequacy of which are
hereby acknowledged, Guarantor hereby agrees as follows:


                                    AGREEMENT


                  1. Guarantor hereby absolutely and unconditionally  guarantees
the  payment  when  due,  upon  maturity,  acceleration  or  otherwise,  of  all
obligations  of the Borrower to the Lenders  under the Credit  Agreement and the
other Loan Documents (as defined in the Credit Agreement),  whether  heretofore,
now, or hereafter made,  incurred or created,  whether  voluntary or involuntary
and  however  arising,  absolute  or  contingent,  liquidated  or  unliquidated,
determined  or  undetermined   (collectively  and  severally,   the  "Guaranteed
Obligations"),  whether or not such Guaranteed Obligations are from time to time
reduced,  or  extinguished  and  thereafter  increased or incurred,  whether the
Borrower  may be liable  individually  or jointly  with  others,  whether or not
recovery upon such Guaranteed  Obligations may be or hereafter  become barred by
any statute of limitations,  and whether or not such Guaranteed  Obligations may
be or hereafter become otherwise unenforceable.


                  2. Guarantor hereby absolutely and unconditionally  guarantees
the payment of the Guaranteed Obligations,  whether or not due or payable by the
Borrower,  upon: (a) the dissolution,  insolvency or business failure of, or any
assignment  for benefit of  creditors  by, or  commencement  of any  bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceedings by or
against,  either the Borrower or Guarantor, or (b) the appointment of a receiver


1a-222232
                                       63
<PAGE>


for, or the attachment,  restraint of or making or levying of any order of court
or legal  process  affecting,  the property of either the Borrower or Guarantor,
and  unconditionally   promises  to  pay  such  Guaranteed  Obligations  to  the
Documentation  Agent for the benefit of the  Lenders,  or order,  on demand,  in
lawful money of the United States.


                  3. The  liability  of Guarantor  hereunder  is  exclusive  and
independent of any security for or other guaranty of the Guaranteed Obligations,
whether  executed by  Guarantor  or by any other  party,  and the  liability  of
Guarantor  hereunder  is not  affected  or  impaired  by (a)  any  direction  of
application  of payment by the Borrower or by any other party,  or (b) any other
guaranty, undertaking or maximum liability of Guarantor or of any other party as
to the Guaranteed Obligations, or (c) any payment on or in reduction of any such
other  guaranty  or  undertaking,  or  (d)  any  revocation  or  release  of any
obligations  of any other  guarantor of the Guaranteed  Obligations,  or (e) any
dissolution,  termination  or  increase,  decrease  or  change in  personnel  of
Guarantor,   or  (f)  any  payment  made  to  the   Administrative   Agent,  the
Documentation  Agent or any  Lender  on the  Guaranteed  Obligations  which  the
Administrative  Agent,  the  Documentation  Agent or any  Lender  repays  to the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding,  and Guarantor waives any right to
the deferral or modification of Guarantor's  obligations  hereunder by reason of
any such proceeding.


                  4. (a) The obligations of Guarantor  hereunder are independent
of the  obligations of the Borrower with respect to the Guaranteed  Obligations,
and a separate action or actions may be brought and prosecuted against Guarantor
whether or not action is brought  against  the  Borrower  and whether or not the
Borrower  be joined in any such  action or  actions.  Guarantor  waives,  to the
fullest  extent  permitted  by law,  the benefit of any  statute of  limitations
affecting its liability hereunder or the enforcement thereof. Any payment by the
Borrower or other circumstance which operates to toll any statute of limitations
as to the  Borrower  shall  operate  to toll the  statute of  limitations  as to
Guarantor.


                     (b) All  payments  made by  Guarantor  under this  Guaranty
shall be made without set-off or counterclaim  and free and clear of and without
deductions for any present or future taxes, fees,  withholdings or conditions of
any nature ("Taxes"). Guarantor shall pay any such Taxes, including Taxes on any
amounts so paid, and will promptly furnish any Lender copies of any tax receipts
or such other evidence of payment as such Lender may require.


                  5. Guarantor   authorizes  the   Administrative   Agent,   the
Documentation  Agent  and  Lenders  (whether  or not after  termination  of this
Guaranty),  without  notice or demand (except as shall be required by applicable
statute and cannot be waived),  and without affecting or impairing its liability
hereunder,  from  time to  time  to (a)  renew,  compromise,  extend,  increase,
accelerate or otherwise  change the time for payment of, or otherwise change the
terms of  Guaranteed  Obligations  or any part  thereof,  including  increase or
decrease of the rate of interest  thereon;  (b) take and hold  security  for the
payment of this Guaranty or the Guaranteed  Obligations  and exchange,  enforce,
waive and  release any such  security;  (c) apply such  security  and direct the
order or manner of sale thereof as the  Administrative  Agent, the Documentation
Agent  and  Lenders  in their  discretion  may  determine;  and (d)  release  or
substitute  any  one or  more  endorsers,  guarantors,  the  Borrower  or  other
obligors.  The  Administrative  Agent, the Documentation  Agent and Lenders may,
without  notice to or the further  consent of the Borrower or Guarantor,  assign
this  Guaranty  in whole or in part to any person  acquiring  an interest in the
Guaranteed Obligations.

1a-222232
                                       64
<PAGE>


                  6.  It is not  necessary  for  the  Documentation  Agent,  the
Administrative  Agent or any Lender to inquire into the capacity or power of the
Borrower  or the  officers  acting or  purporting  to act on their  behalf,  and
Guaranteed  Obligations made or created in reliance upon the professed  exercise
of such powers shall be guaranteed hereunder.


                  7.  Guarantor  waives any right to require  the  Documentation
Agent,  the  Administrative  Agent or any  Lender  to (a)  proceed  against  the
Borrower or any other party;  (b) proceed  against or exhaust any security  held
from the Borrower;  or (c) pursue any other remedy whatsoever.  Guarantor waives
any  personal  defense  based on or arising out of any  personal  defense of the
Borrower  other than payment in full of the Guaranteed  Obligations,  including,
without  limitation,  any defense  based on or arising out of the  disability of
either the Borrower,  or the  unenforceability of the Guaranteed  Obligations or
any part  thereof  from  any  cause,  or the  cessation  from  any  cause of the
liability  of the  Borrower  other  than  payment  in  full  of  the  Guaranteed
Obligations.  The Documentation  Agent, the Administrative Agent and the Lenders
may,  at their  election,  foreclose  on any  security  held for the  Guaranteed
Obligations by one or more judicial or nonjudicial  sales, or exercise any other
right or remedy they may have against the  Borrower,  or any  security,  without
affecting or impairing in any way the liability of Guarantor hereunder except to
the extent the  Guaranteed  Obligations  have been  paid.  Guarantor  waives all
rights and  defenses  arising out of an election of  remedies,  even though that
election of remedies, such as a nonjudicial foreclosure with respect to security
for a guaranteed obligation, has destroyed Guarantor's rights of subrogation and
reimbursement  against  the  principal  by  operation  of  Section  580d  of the
California Code of Civil Procedure.


                  8.  Guarantor  hereby  waives any claim or other  rights which
Guarantor  may now have or may  hereafter  acquire  against the  Borrower or any
other guarantor of all or any of the Guaranteed  Obligations that arise from the
existence or performance of Guarantor's  obligations  under this Guaranty or any
other of the Loan Documents (all such claims and rights being referred to as the
"Guarantor's Conditional Rights"),  including,  without limitation, any right of
subrogation,  reimbursement,  exoneration, contribution, or indemnification, any
right to participate in any claim or remedy which the  Documentation  Agent, the
Administrative  Agent or any Lender has against the  Borrower or any  collateral
which the Documentation Agent, the Administrative Agent or any Lender now has or
hereafter  acquires for the Guaranteed  Obligations,  whether or not such claim,
remedy or right  arises in equity or under  contract,  statute or common law, by
any payment made  hereunder or otherwise,  including,  without  limitation,  the
right to take or receive from the Borrower,  directly or indirectly,  in cash or
other  property  or by setoff or in any other  manner,  payment or  security  on
account  of such  claim or  other  rights.  If,  notwithstanding  the  foregoing
provisions,  any amount  shall be paid to  Guarantor  on account of  Guarantor's
Conditional  Rights and either (a) such amount is paid to  Guarantor at any time
when the Guaranteed  Obligations  shall not have been paid or performed in full,
or (b)  regardless  of when such amount is paid to Guarantor any payment made by
the Borrower to the Documentation  Agent, the Administrative Agent or any Lender
is at any time determined to be a preferential payment, then such amount paid to
Guarantor shall be deemed to be held in trust for the benefit of the Lenders and
shall  forthwith  be paid to the  Documentation  Agent  for the  benefit  of the
Lenders to be credited  and applied  upon the  Guaranteed  Obligations,  whether
matured  or  unmatured,  in such  order and  manner as  Lenders,  in their  sole
discretion,  shall  determine.  To the extent that any of the provisions of this
Paragraph 8 shall not be enforceable,  Guarantor  agrees that until such time as
the Guaranteed  Obligations  have been paid and performed in full and the period
of time has expired  during  which any payment made by the Borrower or Guarantor
may be determined to be a preferential payment,  Guarantor's  Conditional Rights

1a-222232
                                       65
<PAGE>


to the extent not validly  waived shall be  subordinate to the Lenders' right to
full payment and  performance of the Guaranteed  Obligations and Guarantor shall
not seek to enforce Guarantor's Conditional Rights during such period.


                  9.   Guarantor   waives   all   presentments,    demands   for
performance,  protests and notices,  including,  without limitation,  notices of
nonperformance,  notices of protest, notices of dishonor,  notices of acceptance
of this Guaranty, and notices of the existence,  creation or incurring of new or
additional  Guaranteed  Obligations.  Guarantor assumes all  responsibility  for
being and keeping itself informed of either the Borrower's  financial  condition
and assets, and of all other  circumstances  bearing upon the risk of nonpayment
of the  Guaranteed  Obligations  and the  nature,  scope and extent of the risks
which  Guarantor  assumes  and incurs  hereunder,  and agrees  that  neither the
Documentation  Agent, the Administrative  Agent nor any Lender shall have a duty
to advise Guarantor of information  known to it regarding such  circumstances or
risks.


                  10.  In  addition  to the  Guaranteed  Obligations,  Guarantor
agrees to pay  reasonable  attorneys'  fees and all other  reasonable  costs and
expenses incurred by the Documentation  Agent, the Administrative  Agent and the
Lenders in enforcing this Guaranty in any action or proceeding arising out of or
relating to this Guaranty.


                  11.  Guarantor has reviewed and approved the Credit  Agreement
and the  Loan  Documents.  Guarantor  agrees  to  execute  any  and all  further
documents,  instruments and agreements as the  Documentation  Agent from time to
time reasonably requests to evidence Guarantor's obligations hereunder.


                  12.  This  Guaranty  and the  other  Loan  Documents  shall be
governed by and construed in accordance with the  substantive  laws of the State
of California.




                            _________________________________________, a 
                            ______________________ corporation



                      By: ________________________________
                      Name: ______________________________
                     Title: _______________________________


1a-222232
                                       66
<PAGE>

                                   EXHIBIT "G"

                             SUBORDINATION AGREEMENT



                  THIS SUBORDINATION  AGREEMENT (the "Subordination  Agreement")
is made and dated as of the ___ day of _______,  19__ by and among SOS  STAFFING
SERVICES, INC., a Utah corporation (the "Borrower"),  THE FIRST NATIONAL BANK OF
CHICAGO,  acting in its capacity as documentation  agent (in such capacity,  the
"Documentation  Agent") for the lenders  from time to time party to that certain
Amended and Restated Credit Agreement dated as of July 27, 1998 by and among the
Borrower,  the  Administrative  Agent, the Documentation  Agent, and the lenders
from time to time party  thereto  (the  "Lenders")  (as  amended,  extended  and
replaced from time to time, the "Credit  Agreement," and with capitalized  terms
not  otherwise  defined  herein used with the  meanings  given such terms in the
Credit  Agreement),   and   ____________________________,   a  _________________
corporation (the "Creditor").

                                    RECITALS

                  A. Pursuant to the Credit Agreement the Lenders have agreed to
extend  credit to the  Borrower on the terms and subject to the  conditions  set
forth therein.


                  B. Pursuant to the terms of the Credit Agreement, the Creditor
is required to subordinate  its right to the payment of monies from the Borrower
to the payment and performance of the Obligations  under (and as defined in) the
Credit  Agreement  (the "Senior  Obligations"),  and to execute and deliver this
Subordination  Agreement  to the  Documentation  Agent  for the  benefit  of the
Lenders as evidence thereof.


                  NOW, THEREFORE, in consideration of the above Recitals and for
other good and  valuable  consideration,  the receipt and  adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:


                                    AGREEMENT


                  1. The  Creditor  has  extended  and may in the future  extend
credit to the Borrower from time to time.  The principal of all now existing and
hereafter  arising  indebtedness  of the Borrower to the Creditor  together with
accrued but unpaid interest thereon is hereinafter referred to as the "Claims".


                  2. The Creditor is or will be the sole and  absolute  owner of
the Claims and has not sold, assigned,  transferred or otherwise disposed of any
right it may have to repayment of the Claims or any security therefor.


                  3. The Claims and all rights and remedies of the Creditor with
respect thereto and any lien securing  payment thereof are and shall continue to
be  subject,  subordinate  and  rendered  junior in the right of  payment to the
Senior Obligations,  as the same may be extended,  amended or replaced form time
to time.

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                                       67
<PAGE>


                  4.  Unless  and until the Senior  Obligations  shall have been
fully paid and discharged and any agreement by the Lenders to make further loans
or advances to the Borrower shall have terminated:


                           (a) The  Borrower  will  not  make or  give,  and the
Creditor will not receive, directly or indirectly,  any payment, advance, credit
or further security of any kind whatsoever on account of the Claims,  or any new
or further evidence thereof;


                           (b) The Creditor will not sell,  assign,  transfer or
endorse the Claims or any part or evidence thereof;


                           (c) The  Creditor  will not  modify the Claims or any
part or evidence thereof; and


                           (d) The Creditor  will not take, or permit any action
to be taken, to assert, collect or enforce the Claims
or any part thereof.


                  5. Each of the  Borrower  and the  Creditor  waives  notice of
acceptance  of this  Subordination  Agreement  by the  Lenders,  and each of the
Creditor  waives  notice of and  consent  to the amount and terms of any loan or
loans  which the  Lenders  may from time to time  make to the  Borrower  and any
renewal or extension  thereof and any action which the Lenders in their sole and
absolute discretion may take or omit to take with respect thereto.


                  6. This Subordination  Agreement shall constitute a continuing
agreement of  subordination  and the Lenders may,  from time to time and without
notice to the Creditor,  lend money to or make other financial arrangements with
the Borrower in reliance  hereon until written  notice of  termination  shall be
delivered  by the  Creditor to the Lenders by  certified  mail,  return  receipt
requested.  The  receipt by the  Lenders of such  notice  shall not affect  this
Subordination  Agreement as it relates to any Senior  Obligations then existing,
to any Senior Obligations  incurred thereafter pursuant to a previous commitment
by the Lenders or to any  amendments  to, or extensions or renewals of, any such
Senior Obligations.


                  7. In the event of a default in the  performance or observance
of any of the foregoing,  the Senior  Obligations shall forthwith become due and
payable at the election of the Lenders, without presentment, demand or notice of
any kind, all of which are hereby waived.


                  8. The Creditor agrees as follows:


                           (a) Upon any distribution of all of the assets of the
Borrower  to  creditors  of the  Borrower  upon  the  dissolution,  winding  up,
liquidation,  arrangement,  or  reorganization  of the Borrower,  whether in any
bankruptcy, insolvency,  arrangement,  reorganization or receivership proceeding
or upon an assignment  for the benefit of creditors or any other  marshalling of
the  assets  and  liabilities  of the  Borrower  or  otherwise,  any  payment or
distribution  of any  kind  (whether  in cash,  property  or  securities)  which
otherwise  would be payable or  deliverable  upon or with  respect to the Claims
shall be paid or delivered directly to the Administrative  Agent for application
(in the case of cash) to, or as collateral (in the case of non-cash  property or
securities) for, the payment or prepayment of the Senior  Obligations  until the
Senior Obligations shall have been paid in full.

1a-222232
                                       68
<PAGE>


                           (b) If any  proceeding  referred to in subsection (a)
above is commenced by or against the Borrower:


                                    (1)  The  Lenders  are  hereby   irrevocably
authorized  and  empowered  (in their own name or in the name of the Creditor or
otherwise),  but shall have no  obligation,  to  demand,  sue for,  collect  and
receive every payment or  distribution  referred to in subsection  (a) above and
give  acquittance  therefor and to file claims and proofs of claim and take such
other action (including,  without limitation, voting the Claims or enforcing any
security  interest or other lien securing  payment of the Claims) as the Lenders
may deem  necessary or advisable for the exercise or  enforcement  of any of the
rights or interests of the Lenders hereunder; and


                                    (2)  The  Creditor  shall duly and  promptly
take such  action as the  Lenders  may  request  (i) to  collect  the Claims for
account  of the  Lenders  and to file  appropriate  claims or proofs of claim in
respect of the Claims,  (ii) to execute and deliver to the Administrative  Agent
such powers of attorney,  assignments, or other instruments as it may request in
order to enable it to  enforce  any and all  claims  with  respect  to,  and any
security interests and other liens securing payment of, the Claims, and (iii) to
collect and receive any and all payments or  distributions  which may be payable
or deliverable upon or with respect to the Claims.


                           (c) All  payments  or  distributions   upon  or  with
respect  to the  Claims  which are  received  by the  Creditor  contrary  to the
provisions of this  Subordination  Agreement  shall be received in trust for the
benefit of the Lenders,  shall be segregated  from other funds and property held
by the Creditor and shall be forthwith paid over to the Administrative  Agent in
the same form as so received (with any necessary  endorsement) to be applied (in
the case of cash) to, or held as collateral (in the case of non-cash property or
securities) for, the payment or prepayment of the Senior Obligations.


                           (d) The Documentation  Agent on behalf of the Lenders
is  hereby  authorized  to demand  specific  performance  of this  Subordination
Agreement,  whether or not the Borrower  shall have  complied with any or all of
the provisions hereof applicable to the Borrower,  at any time when the Creditor
shall have failed to comply  with any of the  provisions  of this  Subordination
Agreement applicable to it.


                  9.  It is the  intent  of  the  Creditor  to  create  by  this
Subordination  Agreement a security interest in favor of the Documentation Agent
for the benefit of the Lenders in the Claims and in the Creditor's  other rights
to receive money or other property from the Borrower,  whether such rights shall
constitute  accounts,  contract  rights,  chattel  paper,  instruments,  general
intangibles or otherwise.  The Creditor hereby grants to the Documentation Agent
for the  benefit of the  Lenders a security  interest  in the Claims in order to
secure the payment and performance of the Creditor' obligations pursuant to this
Subordination Agreement.


                  10. The Creditor  authorizes the  Documentation  Agent and the
Lenders  (whether  or not after  revocation  of this  Subordination  Agreement),
without notice or demand (except as shall be required by applicable  statute and
cannot be waived), and without affecting or impairing the Creditor's obligations
hereunder,  from  time to  time  to (a)  renew,  compromise,  extend,  increase,
accelerate or otherwise  change the time for payment of, or otherwise change the
terms  of  the  Senior  Obligations  or  any  part  thereof,  including  without
limitation  to increase or decrease the rate of interest  thereon;  (b) take and

1a-222232
                                       69
<PAGE>


hold security for the payment of the Senior  Obligations and exchange,  enforce,
waive and  release any such  security;  (c) apply such  security  and direct the
order or manner of sale thereof as the Documentation  Agent, the  Administrative
Agent and the Lenders in their sole  discretion may  determine;  and (d) release
and  substitute  any one or more  endorsers,  warrantors,  the Borrower or other
obligors.


                  11.  This  Subordination  Agreement  shall  extend  to  and be
binding upon the successors and assigns of each of the parties hereto.


                  12.  This  Subordination  Agreement  may  be  executed  in any
number  of  counterparts  all of  which  taken  together  shall  constitute  one
agreement  and any party  hereto may execute  this  Subordination  Agreement  by
signing any such counterpart.


                  13.  This  Subordination   Agreement  shall  be  construed  in
accordance with and governed by the substantive laws of the State of California.


                       THE FIRST NATIONAL BANK OF CHICAGO,
                       as Documentation Agent



                                         By: ___________________________
                                         Name:__________________________
                                         Title:____________________________



                                         SOS STAFFING SERVICES, INC., a Utah
                                         corporation



                                         By: _______________________________
                                         Name:______________________________
                                         Title:_______________________________



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



                                         By: ________________________________
                                         Name: ______________________________
                                         Title: _______________________________


1a-222232
                                       70
<PAGE>

                                  SCHEDULE "1"

                       SUBSIDIARIES AND OTHER INVESTMENTS
                           (See Sections 5.8 and 6.14)
<TABLE>
<CAPTION>

Investment                              Amount of       Percent          Jurisdiction of
   In                                   Investment      Ownership          Organization  
   --                                   ----------      ---------          ------------  

<S>                                                     <C>                 <C>          
Bedford Consultants, Inc.                               100%                California

Computer Professional Resources, Inc.                   100%                Kansas

SOS Information Technology Company                      100%                Utah

ServCom Staff Management, Inc.                          100%                Utah

SOS Collection Services, Inc.                           100%                Arizona

Wolfe & Associates, Inc.                                100%                New Mexico
</TABLE>


All of the above Subsidiaries are directly owned by the Borrower.

1a-222232
                                       71
<PAGE>

                                  SCHEDULE "2"

                             INDEBTEDNESS AND LIENS
                       (See Sections 5.14, 6.11 and 6.15)


                                                             Maturity
Indebtedness   Indebtedness   Property             Interest  and Amount
Incurred By    Owed To        Encumbered (If Any)  Rate      of Indebtedness
-----------    -------        -------------------  ----      ---------------





                        [to be provided by the Borrower]


1a-222232
                                       72
<PAGE>

                                  SCHEDULE "3"

                                   LITIGATION
                                (See Section 5.7)

                        [to be provided by the Borrower]

1a-222232
                                       73
<PAGE>

                                  SCHEDULE "4"

                           INITIAL COMMITMENT SCHEDULE


LENDER                                         COMMITMENT         PERCENTAGE


The First National Bank of Chicago             $25,000,000         62.5000%

First Security Bank, N.A.                      $15,000,000         37.5000%

1a-222232

                                       74
<PAGE>


la-222232
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

<S>                                                                                                                    <C>
ARTICLE I -       DEFINITIONS...........................................................................................1

ARTICLE II -      THE CREDITS..........................................................................................12
         2.1.     Commitment...........................................................................................12
         2.2.     Required Payments....................................................................................12
         2.3.     Ratable Loans........................................................................................12
         2.4.     Types of Advances....................................................................................12
         2.5.     Commitment Fee; Reductions in Aggregate Commitment...................................................12
         2.6.     Minimum Amount of Each Advance.......................................................................12
         2.7.     Optional Principal Payments..........................................................................13
         2.8.     Method of Selecting Types and Interest Periods for New Advances......................................13
         2.9.     Conversion and Continuation of Outstanding Advances..................................................13
         2.10.    Changes in Interest Rate, etc........................................................................14
         2.11.    Rates Applicable After Default.......................................................................14
         2.12.    Method of Payment....................................................................................14
         2.13.    Notes; Telephonic Notices............................................................................14
         2.14.    Interest Payment Dates; Interest and Fee Basis.......................................................15
         2.15.    Notification of Advances, Interest Rates, Prepayments and Commitment Reductions......................15
         2.16.    Lending Installations................................................................................15
         2.17.    Non-Receipt of Funds by the Administrative Agent.....................................................15
         2.18.    Mandatory Prepayment in the Event of a Change in Control.............................................16
         2.19.    Issuance of Letters of Credit........................................................................16
         2.20.    Purchase of Participation Interests..................................................................16
         2.21.    Repayment of L/C Drawings............................................................................17
         2.22.    Absolute Obligation to Repay.........................................................................17
         2.23.    Uniform Customs and Practice.........................................................................17
         2.24.    Relationship to Letter of Credit Application.........................................................18
         2.25.    Letter of Credit Fee.................................................................................18
         2.26.    Guaranties and Subordination Agreements..............................................................18

ARTICLE III -     CHANGE IN CIRCUMSTANCES..............................................................................18
         3.1.     Yield Protection.....................................................................................18
         3.2.     Changes in Capital Adequacy Regulations..............................................................19
         3.3.     Availability of Types of Advances....................................................................19
         3.4.     Funding Indemnification..............................................................................19
         3.5.     Lender Statements; Survival of Indemnity.............................................................19

ARTICLE IV -      CONDITIONS PRECEDENT.................................................................................20
         4.1.     Initial Advance......................................................................................20
         4.2.     Each Advance.........................................................................................21
         4.3.     Withholding Tax Exemption............................................................................21

 1a-222232
                                       i
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                                                   <C>
ARTICLE V -       REPRESENTATIONS AND WARRANTIES.......................................................................22
         5.1.     Corporate Existence and Standing.....................................................................22
         5.2.     Authorization and Validity...........................................................................22
         5.3.     No Conflict; Government Consent......................................................................22
         5.4.     Financial Statements.................................................................................23
         5.5.     Material Adverse Change..............................................................................23
         5.6.     Taxes................................................................................................23
         5.7.     Litigation and Contingent Obligations................................................................23
         5.8.     Subsidiaries.........................................................................................23
         5.9.     ERISA................................................................................................23
         5.l0.    Accuracy of Information..............................................................................23
         5.11.    Regulation U.........................................................................................24
         5.12.    Material Agreements..................................................................................24
         5.13.    Compliance With Laws.................................................................................24
         5.14.    Ownership of Properties..............................................................................24
         5.15.    Plan Assets; Prohibited Transactions.................................................................24
         5.16.    Environmental Matters................................................................................24
         5.17.    Investment Company Act...............................................................................24
         5.18.    Public Utility Holding Company Act...................................................................25
         5.19.    Year 2000 Program....................................................................................25

ARTICLE VI -      COVENANTS............................................................................................25
         6.1.     Financial Reporting..................................................................................25
         6.2.     Use of Proceeds......................................................................................26
         6.3.     Notice of Default....................................................................................26
         6.4.     Conduct of Business..................................................................................26
         6.5.     Taxes................................................................................................27
         6.6.     Insurance............................................................................................27
         6.7.     Compliance with Laws.................................................................................27
         6.8.     Maintenance of Properties............................................................................27
         6.9.     Inspection...........................................................................................27
         6.10.    Dividends............................................................................................27
         6.11.    Indebtedness.........................................................................................27
         6.12.    Merger...............................................................................................28
         6.13.    Sale of Assets.......................................................................................28
         6.14.    Investments and Acquisitions.........................................................................28
         6.15.    Liens................................................................................................29
         6.16.    Total Indebtedness / Total Capital Ratio.............................................................29
         6.17.    Affiliates...........................................................................................30
         6.18.    Net Worth............................................................................................30
         6.19.    Total Indebtedness / Adjusted EBITDA Ratio...........................................................30
         6.20.    Interest Coverage Ratio..............................................................................30
         6.21.    Year 2000 Program....................................................................................30
</TABLE>

1a-222232
                                       ii
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                                                   <C>
ARTICLE VII -     DEFAULTS.............................................................................................30


ARTICLE VIII -    ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.......................................................32
         8.1.     Acceleration.........................................................................................32
         8.2.     Amendments...........................................................................................33
         8.3.     Preservation of Rights...............................................................................33

ARTICLE IX -      GENERAL PROVISIONS...................................................................................34
         9.1.     Survival of Representations..........................................................................34
         9.2.     Governmental Regulation..............................................................................34
         9.3.     Taxes................................................................................................34
         9.4.     Headings.............................................................................................34
         9.5.     Entire Agreement.....................................................................................34
         9.6.     Several Obligations; Benefits of this Agreement......................................................34
         9.7.     Expenses; Indemnification............................................................................34
         9.8.     Numbers of Documents.................................................................................35
         9.9.     Accounting...........................................................................................35
         9.10.    Severability of Provisions...........................................................................35
         9.11.    Nonliability of Lenders..............................................................................35
         9.12.    Confidentiality......................................................................................35
         9.13.    Nonreliance..........................................................................................36

ARTICLE X -       THE ADMINISTRATIVE AGENT.............................................................................36
         10.1.    Appointment; Nature of Relationship..................................................................36
         10.2.    Powers...............................................................................................36
         10.3.    General Immunity.....................................................................................36
         10.4.    No Responsibility for Loans, Recitals, etc...........................................................37
         10.5.    Action on Instructions of Lenders....................................................................37
         10.6.    Employment of Agents and Counsel.....................................................................37
         10.7.    Reliance on Documents; Counsel.......................................................................37
         10.8.    Reimbursement and Indemnification....................................................................37
         10.9.    Notice of Default....................................................................................38
         10.10.   Rights as a Lender...................................................................................38
         10.l1.   Lender Credit Decision...............................................................................38
         10.12.   Successor Administrative Agent and Documentation Agent...............................................38

ARTICLE XI -      SETOFF; RATABLE PAYMENTS.............................................................................39
         11.1.    Setoff...............................................................................................39
         11.2.    Ratable Payments.....................................................................................39

ARTICLE XII -     BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS....................................................40
         12.1.    Successors and Assigns...............................................................................40
         12.2.    Participations.......................................................................................40
                  12.2.1  Permitted Participants; Effect...............................................................40
                  12.2.2.  Voting Rights...............................................................................40
                  12.2.3.  Benefit of Setoff...........................................................................41
         12.3.    Assignments..........................................................................................41
                  12.3.1.  Permitted Assignments.......................................................................41
                  12.3.2.  Effect; Effective Date......................................................................41
</TABLE>

1a-222232
                                       iii
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                                                    <C>
         12.4.    Dissemination of Information.........................................................................41
         12.5.    Tax Treatment........................................................................................42

ARTICLE XIII -    NOTICES..............................................................................................42
         13.1.    Notices..............................................................................................42
         13.2.    Change of Address....................................................................................42

ARTICLE XIV -     COUNTERPARTS.........................................................................................42

ARTICLE XV -      CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL.........................................43
         15.1.    CHOICE OF LAW........................................................................................43
         15.2.    CONSENT TO JURISDICTION..............................................................................43
         15.3.    WAIVER OF JURY TRIAL.................................................................................43



EXHIBIT "A"- NOTE......................................................................................................45

EXHIBIT "B"- FORM OF OPINION...........................................................................................47

EXHIBIT "C"- COMPLIANCE CERTIFICATE....................................................................................49

EXHIBIT "D"- ASSIGNMENT AGREEMENT......................................................................................54

EXHIBIT "E"- LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION............................................................62

EXHIBIT "F"- GUARANTY..................................................................................................63

EXHIBIT "G"- SUBORDINATION AGREEMENT...................................................................................67


SCHEDULE "1"- SUBSIDIARIES AND OTHER INVESTMENTS

SCHEDULE "2"- INDEBTEDNESS AND LIENS

SCHEDULE "3"- LITIGATION

SCHEDULE "4" -INITIAL COMMITMENT SCHEDULE
1a-222232

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                                       iv
</TABLE>