Exhibit 10.1


                                CREDIT AGREEMENT


                          Dated as of February 13, 1998

                                      among

                       CORT FURNITURE RENTAL CORPORATION,
                                  as Borrower,

                       CORT BUSINESS SERVICES CORPORATION
                                       and
             CERTAIN SUBSIDIARIES OF THE BORROWER FROM TIME TO TIME
                                 PARTIES HERETO,
                                 as Guarantors,


                               THE SEVERAL LENDERS
                        FROM TIME TO TIME PARTIES HERETO

                                       AND

                               NATIONSBANK, N.A.,
                                    as Agent



<PAGE>

                                TABLE OF CONTENTS

SECTION 1

DEFINITIONS.................................................................   1
   1.1  Definitions.........................................................   1
   1.2  Other Definitional Provisions.......................................  23
   1.3  Accounting Terms and Determinations.................................  23

SECTION 2

CREDIT FACILITIES...........................................................  24
   2.1  Revolving Loans.....................................................  24
   2.2  Letter of Credit Subfacility........................................  27
   2.3  Swingline Loan Subfacility..........................................  30

SECTION 3

OTHER PROVISIONS RELATING TO CREDIT FACILITIES..............................  32
   3.1  Default Rate........................................................  32
   3.2  Extension and Conversion............................................  33
   3.3  Reductions in Commitments and Prepayments...........................  33
   3.4  Fees................................................................  35
   3.5  Capital Adequacy....................................................  35
   3.6  Inability To Determine Interest Rate................................  36
   3.7  Illegality..........................................................  36
   3.8  Requirements of Law.................................................  37
   3.9  Taxes...............................................................  38
   3.10 Indemnity...........................................................  41
   3.11 Pro Rata Treatment..................................................  41
   3.12 Sharing of Payments.................................................  42
   3.13 Place and Manner of Payments........................................  43
   3.14 Indemnification; Nature of Issuing Lender's Duties..................  44

<PAGE>

SECTION 4

GUARANTY....................................................................  44
   4.1  The Guaranty........................................................  44
   4.2  Obligations Unconditional...........................................  45
   4.3  Reinstatement.......................................................  46
   4.4  Certain Additional Waivers..........................................  46
   4.5  Remedies............................................................  46
   4.6  Continuing Guarantee................................................  47

SECTION 5

CONDITIONS..................................................................  47
   5.1  Conditions to Closing Date..........................................  47
   5.2  Conditions to All Extensions of Credit..............................  49

SECTION 6

REPRESENTATIONS AND WARRANTIES..............................................  50
   6.1  Financial Condition.................................................  50
   6.2  No Change...........................................................  51
   6.3  Corporate Existence; Compliance with Law............................  51
   6.4  Corporate Power; Authorization; Enforceable Obligations.............  51
   6.5  No Legal Bar; No Default............................................  52
   6.6  No Material Litigation..............................................  52
   6.7  Investment Company Act..............................................  52
   6.8  Federal Regulations.................................................  52
   6.9  ERISA...............................................................  53
   6.10 Environmental Matters...............................................  53
   6.11 Use of Proceeds.....................................................  54
   6.12 Subsidiaries........................................................  54
   6.13 Taxes...............................................................  55
   6.14 Solvency............................................................  55

SECTION 7

AFFIRMATIVE COVENANTS.......................................................  55
   7.1  Financial Statements................................................  55
   7.2  Certificates; Other Information.....................................  56
   7.3  Payment of Loans....................................................  57
   7.4  Conduct of Business and Maintenance of Existence....................  57
   7.5  Maintenance of Property; Insurance..................................  58
   7.6  Inspection of Property; Books and Records; Discussions..............  58
   7.7  Notices.............................................................  58
   7.8  Environmental Laws..................................................  59
   7.9  Financial Covenants.................................................  60
   7.10 Additional Subsidiary Guarantors....................................  60

<PAGE>

SECTION 8

NEGATIVE COVENANTS..........................................................  61
   8.1  Indebtedness........................................................  61
   8.2  Liens...............................................................  62
   8.3  Nature of Business..................................................  62
   8.4  Consolidation, Merger, Sale or Purchase of Assets...................  62
   8.5  Advances, Investments and Loans.....................................  64
   8.6  Transactions with Affiliates........................................  64
   8.7  Ownership of Subsidiaries...........................................  64
   8.8  Fiscal Year.........................................................  64
   8.9  Prepayments of Indebtedness, etc....................................  64
   8.10 Dividends...........................................................  65

SECTION 9

EVENTS OF DEFAULT...........................................................  66
   9.1  Events of Default...................................................  66

SECTION 10

AGENCY PROVISIONS...........................................................  69
  10.1  Appointment.........................................................  69
  10.2  Delegation of Duties................................................  70
  10.3  Exculpatory Provisions..............................................  70
  10.4  Reliance on Communications..........................................  70
  10.5  Notice of Default...................................................  71
  10.6  Non-Reliance on Agent and Other Lenders.............................  71
  10.7  Indemnification.....................................................  72
  10.8  Agent in its Individual Capacity....................................  72
  10.9  Successor Agent.....................................................  72
  10.10 Termination of Securities Interests.................................  73

SECTION 11

MISCELLANEOUS...............................................................  73
  11.1  Amendments and Waivers..............................................  73
  11.2  Notices.............................................................  74
  11.3  No Waiver; Cumulative Remedies......................................  75
  11.4  Survival of Representations and Warranties..........................  75
  11.5  Payment of Expenses and Taxes.......................................  75
  11.6  Successors and Assigns; Participations; Purchasing Lenders..........  76
  11.7  Adjustments; Set-off................................................  79
  11.8  Table of Contents and Section Headings..............................  80
  11.9  Counterparts........................................................  80
  11.10 Severability........................................................  80
  11.11 Integration.........................................................  81
  11.12 Governing Law.......................................................  81
  11.13 Consent to Jurisdiction and Service of Process......................  81
  11.14 Confidentiality.....................................................  82
  11.15 Acknowledgments.....................................................  82
  11.16 Waivers of Jury Trial...............................................  82

<PAGE>

                                CREDIT AGREEMENT

     THIS  CREDIT  AGREEMENT,  dated  as  of  February  13,  1998  (the  "Credit
Agreement"),  is by and among  CORT  FURNITURE  RENTAL  CORPORATION,  a Delaware
corporation (the  "Borrower"),  CORT BUSINESS SERVICES  CORPORATION,  a Delaware
corporation (the "Company") and those Subsidiaries of the Borrower identified as
a "Guarantor" on the signature  pages hereto and such other  Subsidiaries as may
from  time to time  become  a party  hereto  (together  with  the  Company,  the
"Guarantors"),  the several lenders identified on the signature pages hereto and
such  other  lenders  as may  from  time to time  become  a  party  hereto  (the
"Lenders"),  and NATIONSBANK,  N.A., as agent for the Lenders (in such capacity,
the "Agent").

                              W I T N E S S E T H:

     WHEREAS,  the Borrower has requested that the Lenders provide a $75,000,000
credit  facility  (with the  possibility of expansion to  $150,000,000)  for the
purposes hereinafter set forth; and

     WHEREAS,  the Lenders  have agreed to make the  requested  credit  facility
available to the Borrower on the terms and conditions hereinafter set forth;

     NOW,  THEREFORE,  IN  CONSIDERATION  of the  premises  and  other  good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, the parties hereto agree as follows:


                                    SECTION 1

                                   DEFINITIONS

     1.1 Definitions.

     As used in this  Credit  Agreement,  the  following  terms  shall  have the
meanings specified below unless the context otherwise requires:

          "Additional  Credit  Party" means each Person that becomes a Guarantor
     after the Closing Date by execution  of a Joinder  Agreement in  accordance
     with Section 7.10.

          "Affiliate"  means,  with respect to any Person,  any other Person (i)
     directly or  indirectly  controlling  or  controlled  by or under direct or
     indirect  common  control with such Person or (ii)  directly or  indirectly
     owning or holding five percent (5%) or more of the equity  interest in such
     Person;  provided,  however,  that for purposes  hereof,  none of Citibank,
     N.A.,  Citicorp Venture Capital,  Ltd. or their respective  subsidiaries or
     portfolio companies shall be considered to be an "Affiliate" of the Company
     or the  Borrower,  except for  purposes  of the  definition  of  "Permitted
     Investments"  herein and Section  8.6.  For  purposes  of this  definition,
     "control"  when used with  respect to any Person  means the power to direct
     the management and policies of such Person, directly or indirectly, whether
     through the ownership of voting  securities  by contract or otherwise;  and
     the terms  "controlling" and "controlled" have meanings  correlative to the
     foregoing.

                                       1

<PAGE>

          "Agent" means NationsBank, N.A. and any successors and assigns in such
     capacity.

          "Agent's Fee Letter" means the letter  agreement  dated as of November
     10, 1997 among NationsBank,  N.A., NationsBanc Montgomery Securities,  Inc.
     and the Borrower as amended,  modified,  supplemented or replaced from time
     to time.

          "Agent's Fees" means such term as defined in Section 3.4(c).

          "Aggregate  Revolving  Committed Amount" means the aggregate amount of
     all of the Revolving Commitments in effect from time to time.

          "Applicable  Percentage"  means,  for any day,  the rate per annum set
     forth below opposite the  applicable  Pricing Level then in effect it being
     understood that the Applicable Percentage for (i) Eurodollar Loans shall be
     the  percentage  set forth  under the  column  "Applicable  Percentage  for
     Eurodollar  Loans and Letter of Credit Fee",  (ii) the Letter of Credit Fee
     shall be the percentage set forth under the column  "Applicable  Percentage
     for  Eurodollar  Loans and Letter of Credit Fee",  and (iii) the Commitment
     Fee  shall  be the  percentage  set  forth  under  the  column  "Applicable
     Percentage for Commitment Fee":

                                          Applicable Percentage     Applicable
                    Consolidated                   for              Percentage
    Pricing            Funded              Eurodollar Loan and         for
     Level           Debt Ratio            Letter of Credit Fee   Commitment Fee
    -------         ------------          ---------------------   --------------
        V     greater than 2.5                     1.250%              0.300%

       IV     less than or equal to 2.5
              but greater than 2.0                 1.125%              0.250%

      III     less than or equal to 2.0
              but greater than 1.5                 1.000%              0.250%

       II     less than or equal to 1.5
              but greater than 1.0                 0.875%              0.250%

        I     less than or equal to 1.0            0.75%               0.200%

     The Applicable  Percentage shall, in each case, be determined  quarterly by
     the Agent as soon as  practicable  (but in any event  within 5 days)  after
     delivery of the  quarterly  financial  information  required by Section 7.1
     together   with   information   relating  to  historical   information   on
     Consolidated  EBITDA for  Persons or Assets  acquired  during the period of
     four consecutive quarters ending as of the date of determination,  provided
     that  the date of  determination  shall  not be later  than the date 5 days
     after the date by which such quarterly financial information is required to
     be   delivered   in   accordance   with  Section  7.1  (each  an  "Interest
     Determination  Date") based on the information  contained in such quarterly
     financial  information.  Such Applicable Percentage shall be effective from
     such Interest Determination Date until the next such Interest Determination
     Date. The Agent shall determine the appropriate Pricing Level promptly upon
     its receipt of the

                                       2

<PAGE>

     quarterly financial  information and notify the Borrower and the Lenders of
     any change thereof.  Such  determinations  by the Agent shall be conclusive
     absent manifest error. The initial Applicable Percentages shall be based on
     Pricing Level III until the first Interest  Determination  Date to occur in
     connection with the quarterly financial  information  relating to the first
     fiscal quarter of 1998.

          "Asset  Disposition" means (i) the sale, lease or other disposition of
     any property or asset by any Credit Party,  other than Specified  Sales and
     other than to the extent  permitted by Section 8.5, and (ii) receipt by any
     Credit Party of any cash insurance  proceeds or condemnation  award payable
     by reason of theft, loss, physical destruction or damage, taking or similar
     event with respect to any of their property or assets.

          "Base Rate" means,  for any day, the rate per annum equal to the Prime
     Rate in effect on such day less 1/2 of 1%.  Any change in the Base Rate due
     to a change in the Prime Rate shall be effective on the  effective  date of
     such change in the Prime Rate.

          "Base Rate Loan" means any Loan bearing  interest at a rate determined
     by reference to the Base Rate.

          "Borrower" means the Person  identified as such in the heading hereof,
     together with any successors and permitted assigns.

          "Borrowing  Date" means in respect of any Loan,  the date such Loan is
     made.

          "Business" means such term as defined in Section 6.10(b).

          "Business Day" means a day other than a Saturday,  Sunday or other day
     on which commercial banks in Charlotte, North Carolina or Fairfax, Virginia
     are  authorized  or required  by law to close,  except  that,  when used in
     connection with a rate determination,  borrowing or payment in respect of a
     Eurodollar  Loan,  such day shall also be a day on which  dealings  between
     banks are carried on in U.S. dollar deposits in London, England.

          "Capital  Expenditures" means all expenditures (other than those which
     are  permitted  by  Section  8.4)  which in  accordance  with GAAP would be
     classified as capital expenditures,  including without limitation,  Capital
     Lease  Obligations,  but  excluding,  in any  event,  expenditures  made to
     purchase  or acquire  furniture  or  equipment  to be sold or leased in the
     normal course of business.

          "Capital  Lease"  means any lease of property,  real or personal,  the
     obligations  with  respect to which are  required  to be  capitalized  on a
     balance sheet of the lessee in accordance with GAAP.

                                       3

<PAGE>

          "Capital  Lease  Obligations"  means  the  capital  lease  obligations
     relating to a Capital Lease determined in accordance with GAAP.

          "Cash  Equivalents"  means (a) securities issued or directly and fully
     guaranteed  or  insured  by the  United  States of America or any agency or
     instrumentality  thereof  (provided  that the full  faith and credit of the
     United States of America is pledged in support  thereof) having  maturities
     of not more  than  twelve  months  from the date of  acquisition,  (b) U.S.
     dollar  denominated  time deposits and  certificates  of deposit of (i) any
     Lender,  (ii) any domestic  commercial  bank of recognized  standing having
     capital  and  surplus  in excess of  $500,000,000  or (iii) any bank  whose
     short-term  commercial  paper  rating  from  S&P  is at  least  A-1  or the
     equivalent  thereof  or from  Moody's  is at  least  P-1 or the  equivalent
     thereof  (any  such  bank  being an  "Approved  Bank"),  in each  case with
     maturities  of not more  than 365 days  from the date of  acquisition,  (c)
     commercial  paper and  variable or fixed rate notes  issued by any Approved
     Bank (or by the parent  company  thereof) or any variable rate notes issued
     by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent
     thereof) or better by S&P or P-1 (or the  equivalent  thereof) or better by
     Moody's  and  maturing  within six months of the date of  acquisition,  (d)
     repurchase  agreements  with a bank or trust company  (including any of the
     Lenders) or  recognized  securities  dealer  having  capital and surplus in
     excess of $500,000,000 for direct obligations issued by or fully guaranteed
     by the United  States of America in which there shall be a perfected  first
     priority  security  interest (subject to no other Liens) and having, on the
     date of  purchase  thereof,  a fair  market  value of at least  100% of the
     amount of the repurchase  obligations,  (e) obligations of any State of the
     United  States or any  political  subdivision  thereof,  the interest  with
     respect to which is exempt from federal  income  taxation under Section 103
     of the Code,  having a long term  rating of at least Aa-3 or AA- by Moody's
     or S&P, respectively,  (f) Investments in municipal auction preferred stock
     (i) rated AAA (or the  equivalent  thereof) or better by S&P or Aaa (or the
     equivalent thereof) or better by Moody's and (ii) with dividends that reset
     at least once every 365 days and (g) investments,  classified in accordance
     with GAAP as current assets, in money market investment programs registered
     under  the  Investment   Company  Act  of  1940,  as  amended,   which  are
     administered by reputable financial institutions having capital of at least
     $100,000,000  and the portfolios of which are limited to investments of the
     character described in the foregoing subdivisions (a) through (f).

          "Closing Date" means the date hereof.

          "Code" means the Internal  Revenue Code of 1986,  as amended from time
     to time.

          "Commitment"  means the Revolving  Commitment,  the LOC Commitment and
     the Swingline Commitment, individually or collectively, as appropriate.

                                       4

<PAGE>

          "Commitment Fee" means such term as defined in Section 3.4(a).

          "Commitment  Percentage" means the Revolving Commitment  Percentage or
     the LOC Commitment Percentage, as appropriate.

          "Commitment  Period"  means the period from and  including the Closing
     Date to but not including the Termination Date.

          "Commitment   Transfer   Supplement"   means  a  Commitment   Transfer
     Supplement, substantially in the form of Schedule 11.6(c).

          "Commonly   Controlled  Entity"  means  an  entity,   whether  or  not
     incorporated,  which is under common  control  with the Company  within the
     meaning of Section  4001 of ERISA or is part of a group which  includes the
     Company and which is treated as a single  employer under Section 414 of the
     Code.

          "Company"  means the Person  identified as such in the heading hereof,
     together with any successors and permitted assigns.

          "Consolidated  EBIT" means for any period, the sum of Consolidated Net
     Income plus  Consolidated  Interest  Expense  plus all  provisions  for any
     Federal, state and other income taxes for the Borrower and its Subsidiaries
     on a consolidated  basis,  determined in each case in accordance  with GAAP
     applied on a consistent basis. Except as expressly provided otherwise,  the
     applicable  period shall be for the four consecutive  quarters ending as of
     the date of determination.

          "Consolidated   EBITDA"   means  for  any  period,   (i)  the  sum  of
     Consolidated  EBIT  plus  depreciation,  amortization  and  other  non-cash
     charges  (exclusive of depreciation and amortization  relating to furniture
     or equipment  held for sale or lease in the normal  course of business) for
     the Borrower and its Subsidiaries on a consolidated  basis, and (ii) to the
     extent  not  included  in (i),  then  the  sum of  Consolidated  EBIT  plus
     depreciation,   amortization  and  other  non-cash  charges  (exclusive  of
     depreciation and  amortization  relating to furniture or equipment held for
     sale or lease in the  normal  course of  business)  for  Persons  or assets
     acquired  pursuant to Sections  8.4(a) or (c) hereof (net of any such items
     relating  to   dispositions   made  pursuant  to  Section  8.4(b)  hereof),
     determined  in each case in  accordance  with GAAP  applied on a consistent
     basis. Except as expressly provided otherwise,  the applicable period shall
     be  for  the  four   consecutive   quarters   ending  as  of  the  date  of
     determination.

          "Consolidated  Funded  Debt" means Funded Debt of the Borrower and its
     Subsidiaries  on a consolidated  basis  determined in accordance  with GAAP
     applied on a consistent basis.

                                       5

<PAGE>

          "Consolidated  Funded  Debt  Ratio"  means,  as of the last day of any
     fiscal  quarter,  the  ratio  of  Consolidated  Funded  Debt on such day to
     Consolidated  EBITDA for the  period of four  consecutive  fiscal  quarters
     ending as of such day.

          "Consolidated Group" means the Company and its Subsidiaries.

          "Consolidated  Interest  Expense"  means for any period,  all interest
     expense,  including  the  amortization  of debt  discount  and  premium the
     amortization  of deferred  financing fees and the interest  component under
     Capital  Leases for the Borrower  and its  Subsidiaries  on a  consolidated
     basis  determined  in accordance  with GAAP applied on a consistent  basis.
     Except as expressly provided otherwise,  the applicable period shall be for
     the four consecutive quarters ending as of the date of computation.

          "Consolidated Net Income" means for any period,  the net income of the
     Borrower  and  its  Subsidiaries  on a  consolidated  basis  determined  in
     accordance  with GAAP  applied on a consistent  basis,  but  excluding  for
     purposes of determining  the  Consolidated  Funded Debt Ratio and the Fixed
     Charge Coverage Ratio any extraordinary  gains or losses (including but not
     limited to  extraordinary  losses  relating  to the  redemption  of the 12%
     Senior  Notes due 2000)  and any taxes on such  excluded  gains and any tax
     deductions  or credits on account of any such  excluded  losses.  Except as
     expressly provided  otherwise,  the applicable period shall be for the four
     consecutive quarters ending as of the date of computation.

          "Consolidated  Net  Worth"  means  total  stockholders'  equity of the
     Borrower and its  Subsidiaries  on a  consolidated  basis as  determined in
     accordance with GAAP applied on a consistent basis.

          "Contractual Obligation" means, as to any Person, any provision of any
     security  issued  by  such  Person  or  of  any  agreement,  instrument  or
     undertaking  to which  such  Person is a party or by which it or any of its
     property is bound.

          "Credit Documents" means this Credit Agreement, the Notes, any Joinder
     Agreement,  the Agent's Fee Letter,  and all other related  agreements  and
     documents issued or delivered hereunder or thereunder or pursuant hereto or
     thereto.

          "Credit  Party" means any of the  Borrower,  the Company and the other
     Guarantors.

                                       6

<PAGE>

          "Credit Party  Obligations"  means,  without  duplication,  all of the
     obligations of the Borrower and the other Credit Parties to the Lenders and
     the Agent  (including  the  obligations to pay principal of and interest on
     the Loans,  to pay all Fees,  to pay certain  expenses and the  obligations
     arising in connection with various  indemnities)  whenever  arising,  under
     this Credit  Agreement,  the Notes or any other of the Credit  Documents to
     which the Borrower or any other Credit Party is a party.

          "Default" means any event, act or condition which with notice or lapse
     of time, or both, would constitute an Event of Default.

          "Defaulting  Lender" means at any time,  any Lender that, at such time
     (a) has failed to make a Loan or advance required  pursuant to the terms of
     this Credit Agreement, including the funding of a Participation Interest in
     accordance with the terms hereof, (b) has failed to pay to the Agent or any
     Lender an amount owed by such  Lender  pursuant to the terms of this Credit
     Agreement,  or (c) has been  deemed  insolvent  or has become  subject to a
     bankruptcy  or insolvency  proceeding or to a receiver,  trustee or similar
     official.

          "Dividend"  means any payment by the Borrower or any of its non-wholly
     owned  Subsidiaries  of a payment,  distribution  or dividend (other than a
     dividend or distribution  payable solely in stock of the Person making such
     payment,  distribution  or  dividend)  on, or any payment on account of the
     purchase,  redemption  or  retirement  of, or any other  distribution,  any
     shares of any class of stock or other ownership interest in the Borrower or
     any of its Subsidiaries (including any such payment or distribution in cash
     or in property or obligations of the Company or any of its Subsidiaries).

          "Dollars"  and "$" means  dollars  in lawful  currency  of the  United
     States of America.

          "Domestic  Lending  Office"  means the  office or branch of the Lender
     identified  on Schedule  11.2, or such other office or branch as the Lender
     may identify by written notice to the Borrower and the Agent.

          "Domestic  Subsidiary"  means a  Subsidiary  which  is  organized  and
     existing  under the laws of the United States or any state or  commonwealth
     thereof or under the laws of the District of Columbia.

          "Eligible  Transferee" means and includes a commercial bank, financial
     institution or other  "accredited  investor" (as defined in Regulation D of
     the Securities Act of 1933, as amended).

                                       7

<PAGE>

          "Environmental  Laws" means any and all applicable  foreign,  Federal,
     state,  local or municipal  laws,  rules,  orders,  regulations,  statutes,
     ordinances,  codes, decrees,  requirements of any Governmental Authority or
     other Requirement of Law (including common law) regulating,  relating to or
     imposing liability or standards of conduct  concerning  protection of human
     health or the  environment,  as now or may at any time be in effect  during
     the term of this Credit Agreement.

          "Equity  Transaction"  means,  with respect to any Credit  Party,  any
     issuance of shares of its capital  stock or other  equity  interest,  other
     than  an  issuance  (i) to a  member  of the  Consolidated  Group,  (ii) in
     connection  with a  conversion  of debt  securities  to  equity,  (iii)  in
     connection  with  exercise  by a present  or former  employee,  officer  or
     director  under  a  stock  incentive  plan,  stock  option  plan  or  other
     equity-based compensation plan or arrangement or (iv) in connection with an
     acquisition in compliance with Section 8.4(c).

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

          "Eurodollar  Lending  Office" means the office or branch of the Lender
     identified  on Schedule  11.2, or such other office or branch as the Lender
     may identify by written notice to the Borrower and the Agent.

          "Eurodollar Loan" means any Loan bearing interest at a rate determined
     by reference to the Eurodollar Rate.

          "Eurodollar  Rate" means,  for the Interest Period for each Eurodollar
     Loan  comprising  part  of  the  same  borrowing  (including   conversions,
     extensions and renewals),  a per annum interest rate determined pursuant to
     the following formula:

                                        Interbank Offered Rate
               Eurodollar Rate =        ----------------------
                                  1 - Eurodollar Reserve Percentage

          "Eurodollar  Reserve  Percentage"  means for any day, that  percentage
     (expressed  as a  decimal)  which  is in  effect  from  time to time  under
     Regulation D of the Board of Governors  of the Federal  Reserve  System (or
     any successor),  as such regulation may be amended from time to time or any
     successor  regulation,  as  the  maximum  reserve  requirement  (including,
     without  limitation,  any  basic,  supplemental,   emergency,  special,  or
     marginal reserves)  applicable with respect to Eurocurrency  liabilities as
     that term is defined in  Regulation  D (or  against  any other  category of
     liabilities that includes  deposits by reference to which the interest rate
     of  Eurodollar  Loans  is  determined),  whether  or  not  Lender  has  any
     Eurocurrency  liabilities subject to such reserve requirement at that time.

                                       8

<PAGE>

     Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities and
     as such shall be deemed subject to reserve requirements without benefits of
     credits for  proration,  exceptions  or offsets that may be available  from
     time  to  time  to  a  Lender.   The  Eurodollar  Rate  shall  be  adjusted
     automatically  on  and as of  the  effective  date  of  any  change  in the
     Eurodollar  Reserve  Percentage.  The parties hereto  acknowledge and agree
     that, as of the Closing Date,  the  Eurodollar  Reserve  Percentage is zero
     (0).

          "Event of Default" means such term as defined in Section 9.

          "Existing Letters of Credit" means those Letters of Credit outstanding
     on the Closing Date and identified on Schedule 2.2(a) .

          "Extension of Credit" means, as to any Lender, the making of a Loan by
     such Lender or the issuance or extension of, or participation  in, a Letter
     of Credit by such Lender.

          "Federal  Funds Rate"  means,  for any day,  the rate of interest  per
     annum  (rounded  upwards,  if necessary,  to the nearest whole  multiple of
     1/100 of 1%)  equal  to the  weighted  average  of the  rates on  overnight
     Federal  funds  transactions  with  members of the Federal  Reserve  System
     arranged by Federal  funds brokers on such day, as published by the Federal
     Reserve  Bank of New York on the  Business  Day next  succeeding  such day,
     provided that (A) if such day is not a Business Day, the Federal Funds Rate
     for such day shall be such rate on such  transactions on the next preceding
     Business Day and (B) if no such rate is so published on such next preceding
     Business Day, the Federal Funds Rate for such day shall be the average rate
     quoted to the Agent on such day on such  transactions  as determined by the
     Agent.

          "Fee" means any fee payable pursuant to Section 3.4.

          "Fixed Charge Coverage Ratio" means,  with respect to the Borrower and
     its Subsidiaries on a consolidated basis, the ratio of (a) the total of (i)
     Consolidated  EBITDA for the  period of four  consecutive  fiscal  quarters
     ending as of the date of  computation  less (ii) Capital  Expenditures  not
     relating to furniture  and  equipment  held for lease or sale in the normal
     course of business for a period of four consecutive  fiscal quarters ending
     as of the date of computation,  to (b) the sum of (i) Consolidated Interest
     Expense for the period of four consecutive fiscal quarters ending as of the
     date of computation plus (ii) current maturities of Funded Debt (other than
     the Revolving  Loans) for the period of four  consecutive  fiscal  quarters
     beginning as of the day after the date of computation  plus (iii) Dividends
     paid or distributed  during the period of four consecutive  fiscal quarters
     ending as of the date of computation. For purposes of determining the Fixed
     Charge Coverage Ratio, Dividends shall not include (a) cash dividends of up
     to

                                       9

<PAGE>

     $1,000,000  to the Company for the purpose of  repurchasing  the  Company's
     equity  securities in any fiscal year  pursuant to the  Company's  employee
     benefit plans and (b) cash dividends of up to $2,500,000 to the Company for
     the sole purpose of providing  loans to officers,  directors,  employees or
     Affiliates to pay, on behalf of such persons, any withholding taxes due and
     payable by such persons as a result of the vesting of  securities  received
     by such persons in  connection  with the exchange of certain  debentures at
     the time of the Company's initial public offering.

          "Foreign  Subsidiary"  means  a  Subsidiary  which  is not a  Domestic
     Subsidiary.

          "Funded  Debt" means,  for any Person,  (i) all  Indebtedness  of such
     Person for  borrowed  money  (including  without  limitation,  indebtedness
     evidenced by promissory notes,  bonds,  debentures and similar  instruments
     and further any portion of the  purchase  price for assets or  acquisitions
     permitted  hereunder  which may be  financed  by the seller  and  Guarantee
     Obligations  by such  Person of  Funded  Debt of Other  Persons),  (ii) all
     purchase money Indebtedness of such Person,  (iii) the principal portion of
     Capital Lease  Obligations,  (iv) the maximum amount  available to be drawn
     under standby letters of credit and bankers'  acceptances issued or created
     for the account of such  Person,  (v) all  preferred  stock  issued by such
     Person  and  required  by the terms  thereto to be  redeemed,  or for which
     mandatory  sinking  fund  payments  are due, by a fixed date,  and (vi) the
     aggregate  amount  of  uncollected   accounts   receivable  relating  to  a
     structured  financing  program whereby such Person sells or securitizes its
     receivable balances or portions thereof through the issuance of securities,
     regardless  of whether such  transaction  is made without  recourse to such
     Person or in a manner which would not be reflected on the balance  sheet of
     such Person in accordance with GAAP. For purposes hereof, Funded Debt shall
     not  include  Subordinated  Debt or  intercompany  Indebtedness  owing by a
     Credit Party to another Credit Party.

          "GAAP" means generally accepted accounting principles in effect in the
     United States of America applied on a consistent basis,  subject,  however,
     in the case of determination of compliance with the financial covenants set
     out in Section 7.9 to the provisions of Section 1.3.

          "Government Acts" means such term as defined in Section 3.14.

          "Governmental Authority" means any nation or government,  any state or
     other political  subdivision  thereof and any entity exercising  executive,
     legislative,   judicial,  regulatory  or  administrative  functions  of  or
     pertaining to government.

                                       10

<PAGE>

          "Guarantee  Obligation"  means,  as to any Person  (the  "guaranteeing
     person"),  any  obligation  of (a) the  guaranteeing  person or (b) another
     Person (including, without limitation, any bank under any letter of credit)
     to induce  the  creation  of which the  guaranteeing  person  has  issued a
     reimbursement,  counterindemnity  or  similar  obligation,  in either  case
     guaranteeing or in effect guaranteeing any Indebtedness,  leases, dividends
     or other obligations (the "primary  obligations") of any other third Person
     (the  "primary  obligor") in any manner,  whether  directly or  indirectly,
     including,  without limitation,  any obligation of the guaranteeing person,
     whether or not contingent,  (i) to purchase any such primary  obligation or
     any property  constituting  direct or indirect security  therefor,  (ii) to
     advance or supply funds (1) for the purchase or payment of any such primary
     obligation  or (2) to  maintain  working  capital or equity  capital of the
     primary  obligor or  otherwise to maintain the net worth or solvency of the
     primary  obligor,  (iii)  to  purchase  property,  securities  or  services
     primarily  for the  purpose  of  assuring  the  owner of any  such  primary
     obligation  of the ability of the primary  obligor to make  payment of such
     primary  obligation or (iv)  otherwise to assure or hold harmless the owner
     of any such primary obligation  against loss in respect thereof;  provided,
     however,  that the term Guarantee Obligation shall not include endorsements
     of  instruments  for  deposit  or  collection  in the  ordinary  course  of
     business. The amount of any Guarantee Obligation of any guaranteeing person
     shall be deemed to be the  lower of (a) an  amount  equal to the  stated or
     determinable  amount of the  primary  obligation  in  respect of which such
     Guarantee  Obligation  is made and (b) the  maximum  amount  for which such
     guaranteeing  person may be liable  pursuant to the terms of the instrument
     embodying such Guarantee Obligation, unless such primary obligation and the
     maximum  amount  for which such  guaranteeing  person may be liable are not
     stated  or  determinable,  in  which  case  the  amount  of such  Guarantee
     Obligation  shall  be  such   guaranteeing   person's  maximum   reasonably
     anticipated  liability in respect  thereof as  determined by such Person in
     good faith.

          "Guarantor"  means the Company and those  Subsidiaries of the Borrower
     identified  as a  "Guarantor"  on the  signature  pages  hereto,  and  each
     Additional  Credit Party which has executed a Joinder  Agreement,  together
     with their successors and permitted assigns.

          "Guaranty"  means the guaranty of the  Guarantors set forth in Section
     4.

          "Indebtedness"  means, of any Person at any date, (a) all indebtedness
     of such Person for  borrowed  money or for the deferred  purchase  price of
     property or services (other than current trade liabilities  incurred in the
     ordinary  course of  business  and  payable in  accordance  with  customary
     practices or other items incurred for the purchase of products and services
     utilized in the ordinary course of business), (b) any other indebtedness of
     such  Person  which is  evidenced  by a note,  bond,  debenture  or similar
     instrument,  (c) all obligations of such Person under Capital  Leases,  (d)
     all obligations of such Person in respect of acceptances  issued or created
     for the account of such Person,

                                       11

<PAGE>

     (e) all  liabilities  secured  by any  Lien on any  property  owned by such
     Person even though such Person has not assumed or otherwise  become  liable
     for  the  payment  thereof,  (f)  all  obligations  of  such  Person  under
     conditional sale or other title retention  agreements  relating to property
     purchased by such Person (other than customary  reservations  or retentions
     of title under  agreements  with  suppliers  entered  into in the  ordinary
     course of business),  (g) all obligations of such Person under  take-or-pay
     or similar arrangements or under commodities agreements,  (h) all Guarantee
     Obligations of such Person,  (i) all  obligations of such Person in respect
     of  interest  rate  protection   agreements,   foreign  currency   exchange
     agreements,  commodity  purchase or option  agreements or other interest or
     exchange rate or commodity price hedging agreements, (j) the maximum amount
     of all  letters of credit  issued or bankers'  acceptances  created for the
     account  of  such  Person  and,  without  duplication,   all  drafts  drawn
     thereunder (to the extent not  theretofore  reimbursed),  (k) all preferred
     stock  issued  by such  Person  and  required  by the terms  thereto  to be
     redeemed,  or for which mandatory sinking fund payments are due, by a fixed
     date and (l) other  obligations  in the nature of Funded Debt or  Guarantee
     Obligations  which  would be shown as a liability  on the balance  sheet of
     such  Person  (other  than  those  which  relate to  obligations  regularly
     incurred in the ordinary  course of business) and (m) the aggregate  amount
     of  uncollected  accounts  receivable  relating to a  structured  financing
     program whereby such Person sells or securitizes its receivable balances or
     portions thereof through the issuance of securities,  regardless of whether
     such  transaction  is made  without  recourse to such Person or in a manner
     which  would  not be  reflected  on the  balance  sheet of such  Person  in
     accordance  with GAAP;  but  specifically  excluding from the foregoing (A)
     trade  payables  and accrued  expenses  arising or incurred in the ordinary
     course of business,  and (B)  obligations in respect of judgments or awards
     that have been in force for less than the  applicable  period for taking an
     appeal so long as execution is not levied thereunder or in respect of which
     any of the Credit Parties shall at the time in good faith be prosecuting an
     appeal  or  proceedings  for  review  and in  respect  of  which  a stay of
     execution  shall have been obtained  pending such an appeal or review.  For
     purposes hereof, Indebtedness shall include Indebtedness of any partnership
     in which such Person is a general partner (except for any such Indebtedness
     with  respect  to  which  the  holder  is  limited  to the  assets  of such
     partnership or joint venture).

          "Insolvency"  means  with  respect  to  any  Multiemployer  Plan,  the
     condition  that such Plan is  insolvent  within the meaning of such term as
     used in Section 4245 of ERISA.

          "Insolvent" means pertaining to a condition of Insolvency.

                                       12

<PAGE>

          "Interbank  Offered Rate" means,  with respect to any Eurodollar  Loan
     for the Interest Period applicable thereto,  the average (rounded upward to
     the nearest one-sixteenth (1/16) of one percent) per annum rate of interest
     determined  by the  office  of the Agent  (each  such  determination  to be
     conclusive  and binding) as of two Business  Days prior to the first day of
     such  Interest  Period,   as  the  effective  rate  at  which  deposits  in
     immediately  available funds in U.S. dollars are being, have been, or would
     be  offered  or  quoted  by the  Agent  to major  banks  in the  applicable
     interbank  market for  Eurodollar  deposits at any time during the Business
     Day which is the second Business Day immediately preceding the first day of
     such Interest Period,  for a term comparable to such Interest Period and in
     the amount of the  requested  Eurodollar  Loan. If no such offers or quotes
     are generally  available for such amount,  then the Agent shall be entitled
     to determine the Eurodollar  Rate by estimating in its reasonable  judgment
     the per annum rate (as  described  above) that would be  applicable if such
     quote or offers were generally available.

          "Interest  Payment Date" means (a) as to any Base Rate Loan,  the last
     day of each March, June, September and December to occur while such Loan is
     outstanding,  (b) as to any  Swingline  Loan,  the last day of each  March,
     June,  September and December,  or such other day as may be mutually agreed
     upon by the Borrower and the Swingline Lender, but not less frequently than
     once a quarter,  (c) as to any Eurodollar Loan having an Interest Period of
     three months or less, the last day of such Interest  Period,  and (d) as to
     any  Eurodollar  Loan having an Interest  Period  longer than three months,
     each day which is three months after the first day of such Interest  Period
     and the last day of such Interest Period.

          "Interest Period" means with respect to any Eurodollar Loan,

               (i)  initially,  the period  commencing on the Borrowing  Date or
          conversion  date, as the case may be, with respect to such  Eurodollar
          Loan and ending one, two, three or six months thereafter,  as selected
          by the  Borrower in the notice of  borrowing  or notice of  conversion
          given with respect thereto; and

               (ii)  thereafter,  each period  commencing on the last day of the
          immediately  preceding  Interest Period  applicable to such Eurodollar
          Loan and ending one, two, three or six months thereafter,  as selected
          by the Borrower by irrevocable notice to the Agent not less than three
          (3) Business  Days prior to the last day of the then current  Interest
          Period with respect thereto;

     provided that the foregoing provisions are subject to the following:

               (A) if any Interest Period  pertaining to a Eurodollar Loan would
          otherwise  end on a day  that is not a  Business  Day,  such  Interest
          Period  shall be extended to the next  succeeding  Business Day unless
          the result of such  extension  would be to carry such Interest  Period
          into another  calendar month in which event such Interest Period shall
          end on the immediately preceding Business Day;

                                       13

<PAGE>

               (B) any Interest  Period  pertaining  to a  Eurodollar  Loan that
          begins on the last  Business Day of a calendar  month (or on a day for
          which there is no numerically  corresponding day in the calendar month
          at the end of such Interest Period) shall end on the last Business Day
          of the relevant calendar month;

               (C) if the Borrower shall fail to give notice as provided  above,
          the  Borrower  shall be  deemed to have  selected  a Base Rate Loan to
          replace the affected Eurodollar Loan;

               (D) any Interest  Period that would  otherwise  extend beyond the
          Termination Date shall end on the Termination Date; and

               (E) no more  than ten (10)  Eurodollar  Loans may be in effect at
          any  time.  For  purposes  hereof,  Eurodollar  Loans  with  different
          Interest  Periods shall be considered  as separate  Eurodollar  Loans,
          even if they shall begin on the same date and have the same  duration,
          although  borrowings,  extensions and  conversions  may, in accordance
          with  the  provisions  hereof,  be  combined  at the  end of  existing
          Interest  Periods to  constitute a new  Eurodollar  Loan with a single
          Interest Period.

          "Issuing  Lender"  means as to the  Existing  Letters of  Credit,  the
     Issuing Lenders  identified on Schedule 2.2(a), and as to Letters of Credit
     issued after the Closing Date, NationsBank.

          "Joinder  Agreement"  means a Joinder  Agreement  substantially in the
     form of Schedule 7.10, executed and delivered by an Additional Credit Party
     in accordance with the provisions of Section 7.10.

          "Lenders"  means each of the Persons  identified  as a "Lender" on the
     signature pages hereto, and each Person which may become a Lender by way of
     assignment  in  accordance  with the  terms  hereof,  together  with  their
     successors and permitted assigns.

          "Letter of Credit" means the Existing Letters of Credit and any letter
     of credit issued by an Issuing Lender pursuant to the terms hereof, as such
     Letter of Credit may be amended,  modified,  extended,  renewed or replaced
     from time to time.

          "Letter of Credit Fee" means such term as defined in Section 3.4(b).

                                       14

<PAGE>

          "Lien" means any mortgage, pledge, hypothecation,  assignment, deposit
     arrangement, security interest, encumbrance, lien (statutory or otherwise),
     preference, priority or charge of any kind (including any agreement to give
     any of the  foregoing,  any  conditional  sale  or  other  title  retention
     agreement,  any  financing  or similar  statement or notice filed under the
     Uniform   Commercial  Code  as  adopted  and  in  effect  in  the  relevant
     jurisdiction or other similar recording or notice statute).

          "Loan" means a Revolving Loan and/or a Swingline Loan, as appropriate.

          "LOC  Commitment"  means the commitment of the Issuing Lender to issue
     Letters of Credit and with respect to each Lender,  the  commitment of such
     Lender to purchase  participation  interests in the Letters of Credit up to
     such Lender's LOC Committed Amount as specified in Schedule 2.1(a), as such
     amount may be reduced from time to time in accordance  with the  provisions
     hereof.

          "LOC Commitment  Percentage"  means,  for each Lender,  the percentage
     identified as its LOC  Commitment  Percentage on Schedule  2.1(a),  as such
     percentage  may be  modified  in  connection  with any  assignment  made in
     accordance with the provisions of Section 11.6(c).

          "LOC Committed  Amount" means,  collectively,  the aggregate amount of
     all of the LOC  Commitments  of the  Lenders  to issue and  participate  in
     Letters of Credit as  referenced  in  Section  2.2 and,  individually,  the
     amount of each Lender's LOC Commitment as specified in Schedule 2.1(a).

          "LOC  Documents"  means,  with  respect to any Letter of Credit,  such
     Letter of Credit,  any  amendments  thereto,  any  documents  delivered  in
     connection  therewith,   any  application  therefor,  and  any  agreements,
     instruments,  guarantees or other documents (whether general in application
     or applicable only to such Letter of Credit) governing or providing for (i)
     the rights and obligations of the parties  concerned or at risk or (ii) any
     collateral security for such obligations.

          "LOC  Obligations"  means,  at any  time,  the sum of (i) the  maximum
     amount  which is, or at any time  thereafter  may become,  available  to be
     drawn under Letters of Credit then  outstanding,  assuming  compliance with
     all  requirements  for drawings  referred to in such Letters of Credit plus
     (ii) the aggregate  amount of all drawings  under Letters of Credit honored
     by the Issuing Lender but not theretofore reimbursed.

          "Mandatory  Borrowing" means such term as defined in Section 2.2(e) or
     Section 2.3(b)(ii).

                                       15

<PAGE>

          "Material  Adverse Effect" means a material  adverse effect on (a) the
     business,  operations,  property,  financial  condition or prospects of the
     Borrower  and its  Subsidiaries  taken as a whole,  (b) the  ability of the
     Borrower,  the  Company  or the  other  Credit  Parties  to  perform  their
     obligations, when such obligations are required to be performed, under this
     Credit Agreement or any of the Notes or (c) the validity or  enforceability
     of this  Credit  Agreement,  any of the  Notes or any of the  other  Credit
     Documents  or the rights or remedies of the Agent or the Lenders  hereunder
     or thereunder.

          "Materials of  Environmental  Concern" means any gasoline or petroleum
     (including crude oil or any fraction thereof) or petroleum  products or any
     hazardous or toxic substances, materials or wastes, defined or regulated as
     such in or under any  Environmental  Law,  including,  without  limitation,
     asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.

          "Moody's" means Moody's Investors  Service,  Inc., or any successor or
     assignee  of the  business  of  such  company  in the  business  of  rating
     securities.

          "Multiemployer  Plan"  means a Plan which is a  multiemployer  plan as
     defined in Section 4001(a)(3) of ERISA.

          "NationsBank" means NationsBank, N.A. and its successors.

          "Net Proceeds" means gross cash proceeds  (including any cash received
     by way of deferred  payment  pursuant to a promissory  note,  receivable or
     otherwise,  but only as and when received)  received in connection  with an
     Asset Disposition or Equity Transaction,  net of (i) reasonable transaction
     costs,  including  in  the  case  of an  Equity  Transaction,  underwriting
     discounts and commissions and in the case of an Asset Disposition occurring
     in connection  with a claim under an insurance  policy,  costs  incurred in
     connection  with  adjustment  and  settlement of the claim,  (ii) estimated
     taxes payable in  connection  therewith,  and (iii) any amounts  payable in
     respect of Funded Debt, including without limitation  principal,  interest,
     premiums and  penalties,  in  connection  therewith to the extent that such
     Funded Debt and any payments in respect  thereof are paid with a portion of
     the proceeds therefrom.

          "Non-Excluded Taxes" means such term as is defined in Section 3.9.

          "Non-Investment  Grade"  means  (i) debt  which is not rated by S&P or
     Moody's or has a rating of less than "BBB-" by S&P or "Baa3" by Moody's and
     (ii) equity interests.

          "Note" or "Notes" means the Revolving Notes  collectively,  separately
     or individually, as appropriate.

                                       16

<PAGE>

          "Notice  of  Borrowing"  means  the  written  notice of  borrowing  as
     referenced and defined in Section 2.1(b)(i) or 2.3(b)(i), as appropriate.

          "Notice of Extension/Conversion" means the written notice of extension
     or conversion as referenced and defined in Section 3.2.

          "Obligations" means, collectively, Loans and LOC Obligations.

          "Participants" means such term as defined in Section 11.6.

          "Participation   Interest"  means  the  purchase  by  a  Lender  of  a
     participation  interest  in Letters of Credit as provided in Section 2.2 or
     in Swingline Loans as provided in Section 2.2(b)(ii).

          "PBGC"  means the Pension  Benefit  Guaranty  Corporation  established
     under ERISA, and any successor thereto.

          "Permitted  Investments"  means  (i) cash and Cash  Equivalents,  (ii)
     receivables  owing  to  the  Company  or any  of  its  Subsidiaries  or any
     receivables and advances to suppliers, in each case if created, acquired or
     made in the  ordinary  course of business and payable or  dischargeable  in
     accordance  with  customary  trade  terms,  (iii)  investments  in and to a
     domestic Credit Party other than the Company,  (iv) investments in and to a
     Foreign  Subsidiary in an aggregate amount not to exceed  $5,000,0000,  (v)
     loans (other than (a)  relocation  loans to officers and employees  made in
     the  ordinary  course of  business  in an  aggregate  amount  not to exceed
     $2,000,000  at any  time  outstanding  and  (b)  loans  made  to  officers,
     directors,  employees or Affiliates,  in an aggregate  amount not to exceed
     $2,500,000,  to pay, on behalf of such persons,  any withholding  taxes due
     and  payable  by such  persons  as a result of the  vesting  of  securities
     received  by such  persons  in  connection  with the  exchange  of  certain
     debentures  at the  time of the  Company's  initial  public  offering)  and
     advances to officers,  directors,  employees and Affiliates in an aggregate
     amount not to exceed $1,000,000 at any time  outstanding,  (vi) investments
     (including debt obligations)  received in connection with the bankruptcy or
     reorganization  of suppliers  and customers and in settlement of delinquent
     obligations of, and other disputes with, customers and suppliers arising in
     the  ordinary  course  of  business,  (vii)  investments,  acquisitions  or
     transactions   permitted  under  Section  8.4(c)(ii),   (viii)  investments
     received in connection  with a merger or disposition  permitted by Sections
     8.4(a) and 8.4(b),  (ix) purchase or redemption of equity securities of the
     Borrower to the extent  permitted by Section 8.10,  (x)  investments in and
     loans to  entities  engaged  in the  apartment  locator  business  or other
     businesses  related to the business of the Borrower and its Subsidiaries in
     an aggregate amount not to exceed $10,000,000 at any time outstanding,  and
     (xi)  additional   loan  advances  and/or   investments  of  a  nature  not

                                       17

<PAGE>

     contemplated  by the foregoing  clauses  hereof,  provided that such loans,
     advances  and/or  investments  made  pursuant to this clause (xi) shall not
     exceed an aggregate  amount of  $5,000,000.  As used  herein,  "investment"
     means all investments, in cash or by delivery of property made, directly or
     indirectly  in, to or from any Person,  whether by acquisition of shares of
     capital  stock,  property,  assets,  indebtedness  or other  obligations or
     securities or by loan advance, capital contribution or otherwise.

          "Permitted Liens" means

               (iii)  Liens  created  by  or  otherwise  existing,  under  or in
          connection with this Credit Agreement or the other Credit Documents in
          favor of the Lenders;

               (iv)  Liens in favor of a Lender  hereunder  as the  provider  of
          interest rate protection relating to the Loans hereunder, but only (A)
          to the extent such Liens secure  obligations  under such interest rate
          protection  agreements  permitted under Section 8.1, (B) to the extent
          such Liens are on the same  collateral  as to which the  Lenders  also
          have a Lien and (C) if such  provider and the Lenders shall share pari
          passu in the collateral subject to such Liens;

               (v) purchase  money Liens securing  purchase  money  indebtedness
          (and  refinancings  thereof)  to the extent  permitted  under  Section
          8.1(c);

               (vi) Liens for taxes, assessments,  charges or other governmental
          levies  not yet due or as to which the  period of grace (not to exceed
          60 days),  if any,  related thereto has not expired or which are being
          contested  in good faith by  appropriate  proceedings,  provided  that
          adequate  reserves with respect thereto are maintained on the books of
          the  Company or its  Subsidiaries,  as the case may be, in  conformity
          with GAAP (or, in the case of Subsidiaries with significant operations
          outside of the United States of America, generally accepted accounting
          principles   in  effect   from  time  to  time  in  their   respective
          jurisdictions of incorporation);

               (vii)  carriers',  warehousemen's,   mechanics',   materialmen's,
          repairmen's  or other like Liens  arising  in the  ordinary  course of
          business  which are not  overdue  for a period of more than 60 days or
          which are being contested in good faith by appropriate proceedings;

               (viii)   pledges  or  deposits  in   connection   with   workers'
          compensation,   unemployment   insurance  and  other  social  security
          legislation  and deposits  securing  liability  to insurance  carriers
          under insurance or self-insurance arrangements;

                                       18

<PAGE>

               (ix) deposits to secure the performance of bids, trade contracts,
          (other than for borrowed money), leases, statutory obligations, surety
          and appeal bonds,  performance  bonds and other  obligations of a like
          nature incurred in the ordinary course of business;

               (x)  any  extension,   renewal  or  replacement   (or  successive
          extensions,  renewals or  replacements),  in whole or in part,  of any
          Lien  referred  to  in  the  foregoing  clauses;  provided  that  such
          extension,  renewal or  replacement  Lien shall be limited to all or a
          part of the property  which  secured the Lien so extended,  renewed or
          replaced (plus improvements on such property);

               (xi) liens on  properties  in respect of judgment  or award,  the
          Indebtedness  with  respect  to which is in respect  of  judgments  or
          awards that have been in force for less than the applicable period for
          taking an appeal so long as execution is not levied  thereunder  or in
          respect of which any of the Credit  Parties  shall at the time in good
          faith be  prosecuting  an  appeal or  proceedings  for  review  and in
          respect of which a stay of execution shall have been obtained  pending
          such an appeal or review and is permitted under the Credit  Agreement;
          and

               (xii)  encumbrances  on real  property  consisting  of easements,
          rights of way,  zoning  restrictions,  restrictions on the use of real
          property  and  defects  and   irregularities  in  the  title  thereto,
          landlord's or lessor's liens under leases to which a Credit Party is a
          party, and other minor liens or encumbrances  none of which materially
          interferes  with  the use or  value of the  property  affected  in the
          ordinary course of business.

          "Person"  means any  individual,  partnership,  joint  venture,  firm,
     corporation,   limited  liability  company,  association,  trust  or  other
     enterprise (whether or not incorporated) or any Governmental Authority.

          "Plan" means at any particular  time, any employee  benefit plan which
     is covered by Title IV of ERISA and in respect of which the  Borrower  or a
     Commonly  Controlled  Entity is (or, if such plan were  terminated  at such
     time,  would under  Section 4069 of ERISA be deemed to be) an "employer" as
     defined in Section 3(5) of ERISA.

          "Prime  Rate"  means the per annum rate of interest  established  from
     time to time by the  Agent at its  principal  office  in  Charlotte,  North
     Carolina as its Prime Rate.  Any change in the interest rate resulting from
     a change in the Prime Rate shall  become  effective as of 12:01 a.m. of the
     Business Day on which each change in the Prime Rate is

                                       19

<PAGE>

     announced  by the  Agent.  The Prime Rate is a  reference  rate used by the
     Agent in determining interest rates on certain loans and is not intended to
     be the lowest rate of interest  charged on any  extension  of credit to any
     debtor.

          "Pro Forma Basis" means,  with respect to any  transaction,  that such
     transaction  shall be  deemed to have  occurred  as of the first day of the
     four-fiscal  quarter period ending as of the end of the fiscal quarter most
     recently ended prior to the date of such  transaction with respect to which
     the Agent has received the  financial  information  required  under Section
     7.1.  As used  herein,  "transaction"  means any merger,  consolidation  or
     acquisition  as referenced  in Sections  8.4(a) and (c) and any Dividend as
     referred in Section 8.10.

          "Properties" means such term as defined in subsection 6.10(a).

          "Purchasing Lender" means such term as defined in Section 11.6(c).

          "Register" means such term as defined in Section 11.6(d).

          "Reorganization"  means with respect to any  Multiemployer  Plan,  the
     condition  that such Plan is in  reorganization  within the meaning of such
     term as used in Section 4241 of ERISA.

          "Reportable  Event"  means  any of the  events  set  forth in  Section
     4043(b) of ERISA, other than those events as to which the thirty-day notice
     period is waived under  subsections  .13, .14, .16, .18, .19 or .20 of PBGC
     Reg. 2615.

          "Required Lenders" means Lenders holding more than fifty percent (50%)
     of the Revolving  Commitments,  or if the Revolving  Commitments  have been
     terminated,   more  than  fifty  percent  (50%)  of  the  Obligations  then
     outstanding  (taking  into  account  in the  case  of LOC  Obligations  and
     Swingline Loans, and Participation Interests therein);  provided,  however,
     that if any Lender  shall be a Defaulting  Lender at such time,  then there
     shall  be  excluded  from  the   determination   of  Required  Lenders  the
     Commitments of, and after  termination of the Commitments,  the Obligations
     (including  Participation  Interests  therein)  owing to,  such  Defaulting
     Lender.

          "Requirement  of Law" means,  as to any  Person,  the  certificate  of
     incorporation and by-laws or other organizational or governing documents of
     such Person, and any law, treaty, rule or regulation or determination of an
     arbitrator  or a court  or  other  Governmental  Authority,  in  each  case
     applicable  to or binding upon such Person or any of its material  property
     is subject.

                                       20

<PAGE>

          "Responsible  Officer" means the President,  Chief Executive  Officer,
     Chief Financial Officer, the Controller,  any Vice President, the Treasurer
     or any Assistant Treasurer or other duly authorized officer.

          "Revolving   Commitment"  means  with  respect  to  each  Lender,  the
     commitment of such Lender to make Revolving Loans in an aggregate principal
     amount at any time  outstanding  up to such  Lender's  Revolving  Committed
     Amount as specified in Schedule 2.1(a),  as such amount may be increased or
     reduced from time to time in accordance with the provisions hereof.

          "Revolving   Commitment   Percentage"  means  for  each  Lender,   the
     percentage  identified as its Revolving  Commitment  Percentage on Schedule
     2.1(a),  as  such  percentage  may  be  modified  in  connection  with  any
     assignment made in accordance with the provisions of Section 11.6(c).

          "Revolving Committed Amount" means collectively,  the aggregate amount
     of all of the Revolving  Commitments  as referenced in Section  2.1(a) and,
     individually, the amount of each Lender's Revolving Commitment as specified
     in Schedule 2.1(a).

          "Revolving Loans" means as defined in Section 2.1.

          "Revolving  Note" or "Revolving  Notes" means the promissory  notes of
     the Borrower in favor of each of the Lenders evidencing the Revolving Loans
     and Swingline Loans in substantially  the form attached as Schedule 2.1(f),
     individually or collectively,  as appropriate, as such promissory notes may
     be amended, modified, supplemented, extended, renewed or replaced from time
     to time.

          "S&P"  means  Standard & Poor's  Ratings  Group,  a division of McGraw
     Hill,  Inc.,  or any successor or assignee of the business of such division
     in the business of rating securities.

          "Single  Employer  Plan" means any Plan which is not a  Multi-Employer
     Plan.

          "Solvent"  means,  with respect to any Credit Party as of a particular
     date,  that on such date (i) such Credit  Party is able to realize upon its
     assets and pay its debts and other liabilities,  contingent obligations and
     other  commitments  as they mature in the normal  course of business,  (ii)
     such Credit  Party does not intend to, and does not  believe  that it will,
     incur debts or  liabilities  beyond such Credit  Party's  ability to pay as
     such debts and  liabilities  mature in their  ordinary  course,  (iii) such
     Credit  Party is not  engaged in a business  or a  transaction,  and is not
     about to engage in a  business  or a  transaction,  for which  such  Credit
     Party's property would constitute  unreasonably  small capital after

                                       21

<PAGE>

     giving due  consideration  to the  prevailing  practice in the  industry in
     which such Credit Party is engaged or is to engage,  (vi) the fair value of
     the  property  of such  Credit  Party is greater  than the total  amount of
     liabilities, including, without limitation, contingent liabilities, of such
     Credit Party and (v) the present fair saleable  value of the assets of such
     Credit  Party is not less than the amount  that will be required to pay the
     probable  liability  of such  Credit  Party  on its  debts  as they  become
     absolute and matured. In computing the amount of contingent  liabilities at
     any time,  it is  intended  that such  liabilities  will be computed at the
     amount which, in light of all the facts and circumstances  existing at such
     time,  represents  the amount that can  reasonably be expected to become an
     actual or matured liability.

          "Specified  Sales"  means  (i) the  sale,  transfer,  lease  or  other
     disposition of inventory and materials in the ordinary  course of business,
     and (ii) the sale,  transfer,  lease,  sub-lease  or other  disposition  of
     machinery,  parts,  equipment,  real  property  and other  assets no longer
     useful  in  the  conduct  of the  business  of  the  Company  or any of its
     Subsidiaries,  as  appropriate,   (iii)  sale,  transfer,  lease  or  other
     disposition  from one  Credit  Party to another  Credit  Party and (iv) the
     sale, transfer or other disposition of Permitted Investments.

          "Subordinated Debt" means such term as defined in Section 8.9.

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

          "Swingline Commitment" means the commitment of the Swingline Lender to
     make  Swingline  Loans  in  an  aggregate  principal  amount  at  any  time
     outstanding up to the Swingline Committed Amount, and the commitment of the
     Lenders to  purchase  participation  interests  in the  Swingline  Loans as
     provided in Section 2.3(b)(ii), as such amounts may be reduced from time to
     time in accordance with the provisions hereof.

          "Swingline  Committed  Amount"  means  the  amount  of  the  Swingline
     Lender's Swingline Commitment as specified in Section 2.3(a).

          "Swingline Lender" means NationsBank, in its capacity as such.

                                       22

<PAGE>

          "Swingline Loan" or "Swingline  Loans" means such terms as are defined
     in Section 2.3(a).

          "Termination  Date"  means the  earlier  of (a) the date  which is the
     fourth (4th)  anniversary  of the Closing Date or (b) the date on which the
     Revolving  Commitments shall terminate in accordance with the provisions of
     this Credit Agreement.

          "Tranche"  means the  collective  reference to Eurodollar  Loans whose
     Interest  Periods begin and end on the same day. A Tranche may sometimes be
     referred to as a "Eurodollar Tranche".

          "Transfer Effective Date" means such term as defined in the Commitment
     Transfer Supplement.

          "Transferee" means such term as defined in Section 11.6(f).

          "Type"  means,  as to  any  Loan,  its  nature  as a Base  Rate  Loan,
     Eurodollar Loan or Swingline Loan, as the case may be.

     1.2 Other Definitional Provisions.

          (a) Unless  otherwise  specified  therein,  all terms  defined in this
     Credit  Agreement shall have the defined meanings when used in the Notes or
     other  Credit  Documents  or any  certificate  or  other  document  made or
     delivered pursuant hereto.

          (b) The words "hereof",  "herein" and "hereunder" and words of similar
     import  when  used in this  Credit  Agreement  shall  refer to this  Credit
     Agreement  as a whole and not to any  particular  provision  of this Credit
     Agreement, and Section, subsection,  Schedule and Exhibit references are to
     this Credit Agreement unless otherwise specified.

          (c) The  meanings  given  to terms  defined  herein  shall be  equally
     applicable to both the singular and plural forms of such terms.

          (d) For purposes of computation of periods of time hereunder, the word
     "from" means "from and  including" and the words "to" and "until" each mean
     "to but excluding".

     1.3 Accounting Terms and Determinations.

     Unless otherwise  specified  herein,  all terms of an accounting  character
used herein shall be interpreted,  all accounting determinations hereunder shall
be made, and all financial

                                       23

<PAGE>

statements required to be delivered  hereunder shall be prepared,  in accordance
with GAAP, applied on a basis consistent (except for changes concurred in by the
Company's  independent  public  accountants or otherwise required by a change in
GAAP) with the most recent  audited  consolidated  financial  statements  of the
Company and its consolidated  Subsidiaries  delivered to the Lenders unless with
respect to any such change  concurred  in by the  Company's  independent  public
accountants  or  required by GAAP,  in  determining  compliance  with any of the
provisions of this Credit  Agreement or any of the other Credit  Documents:  (i)
the Company or the Borrower shall have objected to determining  such  compliance
on such basis at the time of delivery of such financial statements,  or (ii) the
Required Lenders shall so object in writing within 30 days after the delivery of
such financial statements,  in either of which events such calculations shall be
made on a basis  consistent  with  those used in the  preparation  of the latest
financial statements as to which such objection shall not have been made (which,
if  objection  is made in respect of the first  financial  statements  delivered
under  Section 7.1 hereof,  shall mean the financial  statements  referred to in
Section 6.1).

     At any time that there is no material  difference  (other than intercompany
transactions  which eliminate in the  consolidation  of the Company's  financial
statements) between the financial information of the Company and it Subsidiaries
and the financial information of the Borrower and its Subsidiaries, the Borrower
may use any financial  information of the Company and its  Subsidiaries  in full
satisfaction  of any  provision  of this Credit  Agreement  (including,  but not
limited to, the  delivery of financial  information  pursuant to Section 7.1 and
the determination of compliance with the financial covenants pursuant to Section
7.9).

                                    SECTION 2

                                CREDIT FACILITIES

     2.1 Revolving Loans.

          (a) Revolving Commitment. During the Commitment Period, subject to the
     terms and conditions hereof, each Lender severally agrees to make revolving
     credit loans ("Revolving  Loans") to the Borrower from time to time for the
     purposes hereinafter set forth; provided,  however, that (i) with regard to
     each Lender  individually,  the sum of such Lender's  share of  outstanding
     Revolving Loans plus such Lender's LOC Commitment Percentage of outstanding
     LOC  Obligations  plus such  Lender's  Revolving  Commitment  Percentage of
     Swingline Loans shall not exceed such Lender's Revolving  Committed Amount,
     and (ii) with regard to the Lenders collectively,  the sum of the aggregate
     amount of outstanding  Revolving Loans plus LOC Obligations  plus Swingline
     Loans shall not exceed SEVENTY-FIVE MILLION DOLLARS  ($75,000,000) (as such
     aggregate  maximum  amount may be reduced or increased from time to time as
     provided

                                       24

<PAGE>

     herein, the "Revolving  Committed Amount").  Revolving Loans may consist of
     Base Rate Loans or  Eurodollar  Loans,  or a  combination  thereof,  as the
     Borrower may request,  and may be repaid and reborrowed in accordance  with
     the provisions hereof. Eurodollar Loans shall be made by each Lender at its
     Eurodollar  Lending  Office  and Base Rate  Loans at its  Domestic  Lending
     Office.

          (b) Revolving Loan Borrowings.

               (i) Notice of Borrowing.  The Borrower  shall request a Revolving
          Loan  borrowing  by  written  notice  (or  telephone  notice  promptly
          confirmed in writing  which  confirmation  may be by fax) to the Agent
          not later than  11:00 A.M.  (Charlotte,  North  Carolina  time) on the
          Business  Day of the  requested  borrowing  in the  case of Base  Rate
          Loans,  and on the  third  Business  Day  prior  to  the  date  of the
          requested borrowing in the case of Eurodollar Loans. Each such request
          for  borrowing  shall be  irrevocable  and  shall  specify  (A) that a
          Revolving Loan is requested,  (B) the date of the requested  borrowing
          (which shall be a Business Day), (C) the aggregate principal amount to
          be borrowed,  and (D) whether the borrowing shall be comprised of Base
          Rate  Loans,  Eurodollar  Loans  or  a  combination  thereof,  and  if
          Eurodollar Loans are requested,  the Interest  Period(s)  therefor.  A
          form of Notice of Borrowing (a "Notice of  Borrowing")  is attached as
          Schedule 2.1(b)(i).  If the Borrower shall fail to specify in any such
          Notice of Borrowing (I) an applicable Interest Period in the case of a
          Eurodollar  Loan, then such notice shall be deemed to be a request for
          an Interest  Period of one month,  or (II) the type of Revolving  Loan
          requested, then such notice shall be deemed to be a request for a Base
          Rate  Loan  hereunder.  The Agent  shall  give  notice to each  Lender
          promptly  upon  receipt  of each  Notice of  Borrowing,  the  contents
          thereof and each such Lender's share thereof.

               (ii) Minimum Amounts. Each Revolving Loan borrowing shall be in a
          minimum  aggregate  amount of  $3,000,000  and  integral  multiples of
          $1,000,000,  in the  case of  Eurodollar  Loans,  and  $1,000,000  and
          integral  multiples of $1,000,000 in excess  thereof (or the remaining
          amount of the Revolving Commitment,  if less) in the case of Base Rate
          Loans.

               (iii)  Advances.  Each Lender will make its Revolving  Commitment
          Percentage of each Revolving Loan borrowing available to the Agent for
          the account of the  Borrower at the office of the Agent  specified  in
          Schedule  11.2,  or at such other office as the Agent may designate in
          writing,  by 1:00 P.M.  (Charlotte,  North  Carolina time) on the date
          specified  in the  applicable  Notice of  Borrowing  in Dollars and in
          funds immediately  available to the Agent. Such borrowing will then be
          made  available to the Borrower by the Agent by crediting  the account
          of the Borrower on the books of such office with the  aggregate of the
          amounts  made  available to the Agent by the Lenders and in like funds
          as received by the Agent.

                                       25

<PAGE>

          (c) Repayment.  The principal  amount of all Revolving  Loans shall be
     due and payable in full on the Termination Date.

          (d)  Interest.  Subject to the  provisions  of Section 3.1,  Revolving
     Loans shall bear interest as follows:

               (i) Base Rate Loans. During such periods as Revolving Loans shall
          be comprised  of Base Rate Loans,  each such Base Rate Loan shall bear
          interest at a per annum rate equal to the Base Rate; and

               (ii)  Eurodollar  Loans.  During such periods as Revolving  Loans
          shall be comprised of  Eurodollar  Loans,  each such  Eurodollar  Loan
          shall  bear  interest  at a per  annum  rate  equal  to the sum of the
          Eurodollar Rate plus the Applicable Percentage.

     Interest on  Revolving  Loans shall be payable in arrears on each  Interest
     Payment Date.

          (e)  Increase  in  Revolving  Commitments.  Subject  to the  terms and
     conditions set forth herein,  upon twelve (12) days advance  written notice
     to the Agent,  the Borrower shall have the right, at any time and from time
     to time from the Closing Date until the  Termination  Date, to increase the
     Revolving Committed Amount by an amount up to $75,000,000 in the aggregate;
     provided that (i) any such increase shall be in a minimum  principal amount
     of $15,000,000  and integral  multiples of $5,000,000 in excess thereof (or
     the remaining amount, if less), (ii) if any Revolving Loans are outstanding
     at the time of any such increase, the Borrower shall make such payments and
     adjustments on the Revolving Loans (including  payment of any break-funding
     amount owing under Section 3.10) as necessary to give effect to the revised
     commitment  percentages and commitment amounts of the Lenders and (iii) the
     conditions  to  Extensions  of  Credit  in  Sections  5.2 shall be true and
     correct.  An increase in the Revolving  Committed Amount hereunder shall be
     subject  to  satisfaction  of the  following:  (A) in the  case of any such
     request for an increase in the Revolving  Committed  Amount,  the amount of
     such increase  shall be offered first to the existing  Lenders,  and in the
     event the additional commitments which existing Lenders are willing to take
     shall exceed the amount  requested by the  Borrower,  then in proportion to
     the  commitments  of such  existing  Lenders  willing  to  take  additional
     commitments, and (B) in the case of any such request for an increase in the
     Revolving  Committed  Amount,  the  amount  of the  additional  commitments
     requested by the Borrower shall exceed the additional commitments which the
     existing  Lenders are willing to take,  then the  Borrower may invite other
     commercial banks and financial  institutions  reasonably  acceptable to the
     Agent to join this Credit Agreement as Lenders hereunder for the portion of
     commitments  not  taken by  existing  Lenders,  provided  that  such  other
     commercial banks and financial institutions shall enter into such joinder

                                       26

<PAGE>

     agreements  to give  effect  thereto  as the  Agent  and the  Borrower  may
     reasonably  request.  In  connection  with any  increase  in the  Revolving
     Commitments  pursuant to this Section,  Schedule 2.1(a) shall be revised to
     reflect the modified commitment percentages and commitments of the Lenders.
     Upon payment of the one time Expandability Syndication Fee (as such term is
     defined  in the  Agent's  Fee  Letter),  NationsBank  shall use  reasonable
     efforts to obtain additional  commitments to accommodate any request by the
     Borrower to increase the Revolving Commitments.

          (f) Revolving  Notes.  The  Revolving  Loans shall be evidenced by the
     Revolving Notes.

     2.2 Letter of Credit Subfacility.

          (a) Issuance.  Subject to the terms and  conditions  hereof and of the
     LOC Documents, if any, and any other terms and conditions which the Issuing
     Lender may  reasonably  require,  the Issuing  Lender shall issue,  and the
     Lenders  shall  participate  in,  Letters of Credit for the  account of the
     Borrower  from time to time upon  request  from the Closing  Date until the
     Termination  Date in a form  acceptable  to the Issuing  Lender;  provided,
     however,  that (i) the aggregate amount of LOC Obligations shall not at any
     time  exceed  SEVEN  MILLION  DOLLARS   ($7,000,000)  (the  "LOC  Committed
     Amount"),  (ii) with regard to each Lender individually,  such Lender's LOC
     Commitment  Percentage of the outstanding LOC Obligations  shall not exceed
     such   Lender's   LOC   Commitment,   (iii)  with  regard  to  the  Lenders
     collectively,  the sum of the  aggregate  amount of  outstanding  Revolving
     Loans  plus LOC  Obligations  plus  Swingline  Loans  shall not  exceed the
     Revolving  Committed  Amount and (iv)  standby  Letters of Credit  shall be
     issued  for the  purpose  of  supporting  workers'  compensation  and other
     insurance  programs and other purposes  arising from the ordinary course of
     the Borrower's  business.  Except as otherwise expressly agreed upon by all
     the Lenders,  no Letter of Credit  shall have an original  expiry date more
     than one year from the date of issuance;  provided,  however, so long as no
     Default or Event of Default has occurred and is  continuing  and subject to
     the  other  terms and  conditions  to the  issuance  of  Letters  of Credit
     hereunder,  the expiry dates of Letters of Credit may be extended  annually
     on each  anniversary  date of their date of issuance for an additional  one
     year period;  provided,  further,  that no Letter of Credit,  as originally
     issued or as  extended,  shall  have an expiry  date  extending  beyond the
     Termination  Date unless,  but only to the extent that,  the Borrower shall
     provide cash  collateral  to the Issuing  Lender on the date of issuance or
     extension  in an amount equal to the maximum  amount  available to be drawn
     under such Letter of Credit.  Each Letter of Credit  shall  comply with the
     related  LOC  Documents.  The  issuance  and expiry  date of each Letter of
     Credit shall be a Business Day.

                                       27

<PAGE>

          (b) Notice and  Reports.  The request for the  issuance of a Letter of
     Credit shall be submitted to the Issuing Lender at least three (3) Business
     Days prior to the requested  date of issuance.  The Issuing Lender will, at
     least quarterly and more frequently upon request,  provide to the Agent for
     dissemination  to the Lenders a detailed  report  specifying the Letters of
     Credit which are then issued and  outstanding and any activity with respect
     thereto  which may have occurred  since the date of the prior  report,  and
     including therein,  among other things, the account party, the beneficiary,
     the face amount,  expiry date as well as any payments or expirations  which
     may have occurred.  The Agent will promptly  provide copies of such reports
     to the  Lenders.  The  Issuing  Lender  will  further  provide to the Agent
     promptly upon request  copies of the Letters of Credit.  The Issuing Lender
     will  provide  to the  Agent at least  weekly,  and  more  frequently  upon
     request,  a summary report of the nature and extent of LOC Obligations then
     outstanding.

          (c) Participations.  Each Lender, with respect to the Existing Letters
     of Credit,  hereby  purchases a  participation  interest  in such  Existing
     Letters of Credit and with respect to Letters of Credit  issued on or after
     the Closing Date,  upon issuance of a Letter of Credit,  shall be deemed to
     have  purchased  without  recourse a risk  participation  from the  Issuing
     Lender in such Letter of Credit and the obligations  arising thereunder and
     any collateral relating thereto, in each case in an amount equal to its LOC
     Commitment  Percentage of the  obligations  under such Letter of Credit and
     shall  absolutely,  unconditionally  and  irrevocably  assume,  as  primary
     obligor and not as surety,  and be obligated  to pay to the Issuing  Lender
     therefor and  discharge  when due,  its LOC  Commitment  Percentage  of the
     obligations arising under such Letter of Credit. Without limiting the scope
     and nature of each Lender's  participation in any Letter of Credit,  to the
     extent  that  the  Issuing  Lender  has not  been  reimbursed  as  required
     hereunder or under any such Letter of Credit, each such Lender shall pay to
     the  Issuing  Lender its LOC  Commitment  Percentage  of such  unreimbursed
     drawing in same day funds on the day of  notification by the Issuing Lender
     of an  unreimbursed  drawing  pursuant to the  provisions of subsection (d)
     hereof.  The  obligation of each Lender to so reimburse the Issuing  Lender
     shall be  absolute  and  unconditional  and  shall not be  affected  by the
     occurrence  of a Default,  an Event of Default or any other  occurrence  or
     event.  Any such  reimbursement  shall not relieve or otherwise  impair the
     obligation of the Borrower to reimburse the Issuing Lender under any Letter
     of Credit, together with interest as hereinafter provided.

          (d)  Reimbursement.  In the event of any  drawing  under any Letter of
     Credit,  the Issuing Lender will promptly  notify the Borrower.  Unless the
     Borrower  shall  immediately  notify  the  Issuing  Lender of its intent to
     otherwise  reimburse the Issuing  Lender,  the Borrower  shall be deemed to
     have requested a Revolving Loan in the amount of the drawing as provided in
     subsection  (e) hereof,  the  proceeds of which will be used to satisfy the
     reimbursement obligations. The Borrower shall reimburse the Issuing Lender

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<PAGE>

     on the day of drawing under any Letter of Credit  (either with the proceeds
     of a Revolving  Loan obtained  hereunder or otherwise) in same day funds as
     provided  herein or in the LOC  Documents.  If the  Borrower  shall fail to
     reimburse  the Issuing  Lender as provided  hereinabove,  the  unreimbursed
     amount of such drawing shall bear interest at a per annum rate equal to the
     Base Rate plus two percent (2%). The Borrower's  reimbursement  obligations
     hereunder  shall be  absolute  and  unconditional  under all  circumstances
     irrespective  of any rights of set-off,  counterclaim or defense to payment
     the Borrower may claim or have against the Issuing Lender,  the Agent,  the
     Lenders,  the  beneficiary  of the Letter of Credit drawn upon or any other
     Person,  including  without  limitation any defense based on any failure of
     the Borrower to receive consideration or the legality, validity, regularity
     or  unenforceability  of the  Letter of Credit.  The  Issuing  Lender  will
     promptly notify the other Lenders of the amount of any unreimbursed drawing
     and each  Lender  shall  promptly  pay to the Agent for the  account of the
     Issuing Lender in Dollars and in immediately available funds, the amount of
     such Lender's LOC Commitment  Percentage of such unreimbursed drawing. Such
     payment  shall be made on the day such  notice is  received  by such Lender
     from the  Issuing  Lender if such notice is received at or before 2:00 P.M.
     (Charlotte,  North Carolina time),  otherwise such payment shall be made at
     or before 12:00 Noon  (Charlotte,  North Carolina time) on the Business Day
     next  succeeding  the day such notice is received.  If such Lender does not
     pay such  amount to the  Issuing  Lender in full  upon such  request,  such
     Lender  shall,  on demand,  pay to the Agent for the account of the Issuing
     Lender  interest  on the unpaid  amount  during the period from the date of
     such  drawing  until such Lender pays such amount to the Issuing  Lender in
     full at a rate per annum equal to, if paid within two (2) Business  Days of
     the date of drawing,  the Federal Funds Rate and thereafter at a rate equal
     to the Base Rate.  Each  Lender's  obligation  to make such  payment to the
     Issuing  Lender,  and the right of the Issuing  Lender to receive the same,
     shall  be  absolute  and  unconditional,  shall  not  be  affected  by  any
     circumstance  whatsoever  and  without  regard to the  termination  of this
     Credit Agreement or the Commitments  hereunder,  the existence of a Default
     or Event of Default or the  acceleration of the  Obligations  hereunder and
     shall be made  without  any offset,  abatement,  withholding  or  reduction
     whatsoever.

          (e) Repayment with Revolving  Loans.  On any day on which the Borrower
     shall have requested,  or been deemed to have  requested,  a Revolving Loan
     borrowing to reimburse a drawing under a Letter of Credit,  the Agent shall
     give notice to the  Lenders  that a Revolving  Loan has been  requested  or
     deemed requested in connection with a drawing under a Letter of Credit,  in
     which case a Revolving Loan borrowing  comprised  solely of Base Rate Loans
     (each such borrowing,  a "Mandatory  Borrowing")  shall be immediately made
     from  all  Lenders  (without  giving  effect  to  any  termination  of  the
     Commitments  pursuant  to  Section  9.1)  pro rata  based on each  Lender's
     respective Revolving Commitment Percentage (determined before giving effect
     to any  termination  of the  Commitments  pursuant to Section  9.1) and the
     proceeds thereof shall be paid

                                       29

<PAGE>

     directly  to the  Issuing  Lender for  application  to the  respective  LOC
     Obligations.  Each  such  Lender  hereby  irrevocably  agrees  to make such
     Revolving  Loans  immediately  upon any such  request or deemed  request on
     account  of  each  Mandatory  Borrowing  in the  amount  and in the  manner
     specified   in  the   preceding   sentence   and  on  the  same  such  date
     notwithstanding  (i) the amount of Mandatory  Borrowing may not comply with
     the minimum amount for  borrowings of Revolving  Loans  otherwise  required
     hereunder,  (ii) whether any  conditions  specified in Section 5.2 are then
     satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
     failure for any such  request or deemed  request for  Revolving  Loan to be
     made by the time otherwise required in Section 2.1(b), (v) the date of such
     Mandatory  Borrowing,  or (vi) any  reduction  in the  Revolving  Committed
     Amount after any such Letter of Credit may have been drawn upon;  provided,
     however, that in the event any such Mandatory Borrowing should be less than
     the minimum amount for borrowings of Revolving Loans otherwise  provided in
     Section 2.1(b)(ii), the Borrower shall pay to the Agent for its own account
     an  administrative  fee of $500. In the event that any Mandatory  Borrowing
     cannot  for any  reason  be  made  on the  date  otherwise  required  above
     (including,  without  limitation,  as a  result  of the  commencement  of a
     proceeding  under the  Bankruptcy  Code with respect to the Borrower or any
     other  Credit  Party),  then each such Lender  hereby  agrees that it shall
     forthwith fund (as of the date the Mandatory Borrowing would otherwise have
     occurred,  but adjusted for any payments  received  from the Borrower on or
     after such date and prior to such purchase) its Participation  Interests in
     the outstanding LOC Obligations;  provided,  further, that in the event any
     Lender  shall  fail  to  fund  its  Participation  Interest  on the day the
     Mandatory Borrowing would otherwise have occurred,  then the amount of such
     Lender's  unfunded  Participation  Interest  therein  shall  bear  interest
     payable to the Issuing  Lender upon  demand,  at the rate equal to, if paid
     within two (2)  Business  Days of such date,  the Federal  Funds Rate,  and
     thereafter at a rate equal to the Base Rate.

          (f)   Modification,   Extension.   The  issuance  of  any  supplement,
     modification,  amendment,  renewal,  or  extension  to any Letter of Credit
     shall,  for  purposes  hereof,  be treated in all  respects the same as the
     issuance of a new Letter of Credit hereunder.

          (g) Uniform  Customs and  Practices.  The Issuing  Lender may have the
     Letters  of Credit be subject  to The  Uniform  Customs  and  Practice  for
     Documentary  Credits,  as  published  as  of  the  date  of  issue  by  the
     International Chamber of Commerce (the "UCP"), in which case the UCP may be
     incorporated therein and deemed in all respects to be a part thereof.

     2.3 Swingline Loan Subfacility.

          (a) Swingline Commitment. During the Commitment Period, subject to the
     terms and  conditions  hereof,  the  Swingline  Lender,  in its  individual
     capacity, agrees to

                                       30

<PAGE>

     make certain  revolving  credit  loans to the  Borrower  (each a "Swingline
     Loan"  and,   collectively,   the  "Swingline   Loans")  for  the  purposes
     hereinafter  set forth;  provided,  however,  (i) the  aggregate  amount of
     Swingline  Loans  outstanding  at any time  shall not exceed  FOUR  MILLION
     DOLLARS ($4,000,000) (the "Swingline  Committed Amount"),  and (ii) the sum
     of the aggregate amount of outstanding Revolving Loans plus LOC Obligations
     plus  Swingline  Loans shall not exceed the Aggregate  Revolving  Committed
     Amount.   Swingline  Loans  hereunder  may  be  repaid  and  reborrowed  in
     accordance with the provisions hereof.

          (b) Swingline Loan Borrowings.

               (i)  Notice of  Borrowing  and  Disbursement.  The  Borrower  may
          request a Swingline  Loan  borrowing by written  notice (or  telephone
          notice promptly confirmed in writing which confirmation may be by fax)
          to the  Swingline  Lender and a copy to the Agent not later than 12:00
          Noon  (Charlotte,  North  Carolina  time) on the  Business  Day of the
          requested Swingline  borrowing.  Each such notice shall be irrevocable
          and shall  specify (A) that a Swingline  Loan  borrowing is requested,
          (B) the date of the requested Swingline Loan borrowing (which shall be
          a  Business  Day)  and  (C)  the  aggregate  principal  amount  of the
          Swingline Loan borrowing.  A form of Notice of Borrowing (a "Notice of
          Borrowing") is attached as Schedule 2.1(b)(i).  Requests for Swingline
          Loans made in accordance  with this Section 2.3 will be honored by the
          end of the date of the requested  borrowing specified in the Notice of
          Borrowing.  Each  Swingline  Loan  borrowing  shall  be  in a  minimum
          aggregate  amount of $100,000  and  integral  multiples of $100,000 in
          excess thereof (or the remaining  amount of the Swingline  Commitment,
          if less).

               (ii) Repayment of Swingline Loans.  Each Swingline Loan borrowing
          shall be due and  payable  on the  earlier of (A) the date of the next
          Revolving Loan borrowing,  or (B) the Termination Date. If, and to the
          extent,  any Swingline  Loans shall be  outstanding on the date of any
          Revolving Loan  borrowing,  such Swingline Loans shall first be repaid
          from  the  proceeds  of  such  Revolving   Loan  borrowing   prior  to
          disbursement to the Borrower.  In addition,  the Swingline Lender may,
          at any time, in its sole discretion, by written notice to the Borrower
          and the Agent,  demand  repayment of its  Swingline  Loans by way of a
          Revolving Loan  borrowing,  in which case the Borrower shall be deemed
          to have  requested a Revolving Loan  borrowing  comprised  entirely of
          Base Rate  Loans in the  amount  of such  Swingline  Loans;  provided,
          however, that, in the following  circumstances,  any such demand shall
          also be deemed to have been  given one  Business  Day prior to each of
          (i) the Termination  Date, (ii) the occurrence of any Event of Default
          described in Section 9.1(e), (iii) upon

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<PAGE>

          acceleration  of the Obligations  hereunder,  whether on account of an
          Event of Default  described  in Section  9.1(e) or any other  Event of
          Default,  and (iv) the  exercise of remedies  in  accordance  with the
          provisions  of Section 9 hereof (each such  Revolving  Loan  borrowing
          made on account of any such deemed request therefor as provided herein
          being hereinafter referred to as a "Mandatory Borrowing"). Each Lender
          hereby  irrevocably  agrees to make such Revolving Loans promptly upon
          any such  request  or deemed  request  on  account  of each  Mandatory
          Borrowing in the amount and in the manner  specified in the  preceding
          sentence and on the same such date  notwithstanding  (I) the amount of
          Mandatory  Borrowing  may not  comply  with  the  minimum  amount  for
          borrowings  of Revolving  Loans  otherwise  required  hereunder,  (II)
          whether any  conditions  specified in Section 5.2 are then  satisfied,
          (III)  whether a Default  or an Event of  Default  then  exists,  (IV)
          failure of such request or deemed  request for  Revolving  Loans to be
          made by the time otherwise required in Section 2.1(b)(i), (V) the date
          of such  Mandatory  Borrowing,  or (VI) any reduction in the Revolving
          Committed Amount or termination of the Revolving  Commitments relating
          thereto   immediately   prior   to   such   Mandatory   Borrowing   or
          contemporaneous  therewith.  In the event that any Mandatory Borrowing
          cannot  for  any  reason  be  made  on  the  date  otherwise  required
          above(including,  without limitation,  as a result of the commencement
          of a proceeding in bankruptcy with respect to the Borrower), then each
          Lender hereby agrees that it shall forthwith  purchase (as of the date
          the Mandatory  Borrowing would  otherwise have occurred,  but adjusted
          for any payments  received from the Borrower on or after such date and
          prior to such purchase) from the Swingline Lender such  participations
          in the outstanding Swingline Loans as shall be necessary to cause each
          such Lender to share in such  Swingline  Loans  ratably based upon its
          respective Revolving Commitment  Percentage  (determined before giving
          effect to any  termination  of the Revolving  Commitments  pursuant to
          Section 9),  provided  that (A) all interest  payable on the Swingline
          Loans shall be for the account of the Swingline  Lender until the date
          as of which the respective  participation is purchased, and (B) at the
          time any  purchase  of  participations  pursuant  to this  sentence is
          actually made,  the purchasing  Lender shall be required to pay to the
          Swingline   Lender   interest   on  the   principal   amount  of  such
          participation  purchased  for each day from and including the day upon
          which the Mandatory  Borrowing  would  otherwise  have occurred to but
          excluding  the date of  payment  for such  participation,  at the rate
          equal  to, if paid  within  two (2)  Business  Days of the date of the
          Mandatory Borrowing,  the Federal Funds Rate, and thereafter at a rate
          equal to the Base Rate.

          (c) Interest on Swingline Loans.  Subject to the provisions of Section
     3.1,  Swingline  Loans shall bear interest at a per annum rate equal to the
     Base Rate.  Interest on Swingline Loans shall be payable in arrears on each
     Interest Payment Date.

          (d)  Swingline  Note.  The  Swingline  Loans shall be evidenced by the
     Revolving Notes

                                    SECTION 3

                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES

     3.1 Default Rate.

     Upon the occurrence,  and during the  continuance,  of an Event of Default,
the principal of and, to the extent permitted by law,  interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest,  payable on demand, at a per annum rate 2% greater than the rate which
would  otherwise be applicable (or if no rate is applicable,  whether in respect
of interest, fees or other amounts, then 2% greater than the Base Rate).

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<PAGE>

     3.2 Extension and Conversion.

     The Borrower shall have the option, on any Business Day, to extend existing
Loans into a subsequent  permissible  Interest  Period or to convert  Loans into
Loans of another Type; provided, however, that (i) except as provided in Section
3.7, Eurodollar Loans may be converted into Base Rate Loans only on the last day
of  the  Interest  Period  applicable  thereto,  (ii)  Eurodollar  Loans  may be
extended, and Base Rate Loans may be converted into Eurodollar Loans, only if no
Default  or  Event of  Default  is in  existence  on the  date of  extension  or
conversion,  (iii) Loans extended as, or converted into,  Eurodollar Loans shall
be subject to the terms of the  definition  of  "Interest  Period"  set forth in
Section  1.1 and  shall  be in such  minimum  amounts  as  provided  in  Section
2.1(b)(ii),  (iv) no more  than  ten (10)  separate  Eurodollar  Loans  shall be
outstanding  hereunder at any time,  (v) any request for extension or conversion
of a  Eurodollar  Loan which shall fail to specify an Interest  Period  shall be
deemed to be a request  for an Interest  Period of one month and (vi)  Swingline
Loans may not be extended or converted  pursuant to this Section 3.2.  Each such
extension or conversion  shall be effected by the Borrower by giving a Notice of
Extension/Conversion  (or telephone notice promptly confirmed in writing) to the
Agent prior to 11:00 A.M.  (Charlotte,  North Carolina time) on the Business Day
of, in the case of the conversion of a Eurodollar Loan into a Base Rate Loan and
on the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar  Loan, the date of
the  proposed  extension  or  conversion,  specifying  the date of the  proposed
extension or conversion,  the Loans to be so extended or converted, the types of
Loans into  which  such  Loans are to be  converted  and,  if  appropriate,  the
applicable Interest Periods with respect thereto.  Each request for extension or
conversion shall constitute a representation and warranty by the Borrower of the
matters  specified in subsections as appropriate  (a) and (b), and in (c) or (d)
of  Section  5.2.  In the event  the  Borrower  fails to  request  extension  or
conversion of any Eurodollar Loan in accordance  with this Section,  or any such
conversion or extension is not permitted or required by this Section,  then such
Loans shall be automatically  converted into Base Rate Loans at the end of their
Interest  Period.  The Agent  shall  give each  Lender  notice  as  promptly  as
practicable of any such proposed extension or conversion affecting any Loan.

     3.3 Reductions in Commitments and Prepayments.

          (a) Voluntary Reduction in Revolving Commitment. The Borrower may from
     time to time  permanently  reduce  the  aggregate  amount of the  Revolving
     Commitments  in whole or in part  without  premium  or  penalty  except  as
     provided in Section 3.10 upon three (3) Business Days' prior written notice
     to the Agent;  provided  that  after  giving  effect to any such  voluntary
     reduction the sum of Revolving  Loans plus LOC  Obligations  plus Swingline
     Loans then outstanding shall not exceed the Aggregate  Revolving  Committed
     Amount.  Partial reductions in the aggregate Revolving  Commitment shall in
     each  case be in a minimum  aggregate  amount of  $5,000,000  and  integral
     multiples of $1,000,000 in excess thereof.

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<PAGE>

          (b)  Mandatory  Reductions  in  Revolving  Commitments  and  Mandatory
     Prepayments.

               (i)  Asset  Sales  and  Dispositions.   The  Aggregate  Revolving
          Committed Amount shall be automatically and permanently  reduced by an
          aggregate  amount  equal to 100% of the Net  Proceeds  received by the
          Borrower or any of its Subsidiaries  from any Asset  Disposition where
          and to the extent (A) such Net Proceeds are not  reinvested in similar
          property  or  assets  within  120  days  of the  date  of  such  Asset
          Disposition   (or  any  series  of   related   sales,   transfers   or
          dispositions),  and (B) such Net Proceeds  that are not  reinvested in
          the aggregate in any fiscal year  constitute more than fifteen percent
          (15%) of the consolidated  assets for the Consolidated Group as of the
          end of the immediately preceding fiscal year. Where a payment shall be
          owing on account of a reduction of the Aggregate  Revolving  Committed
          Amount   hereunder  in  accordance  with  the  provisions  of  Section
          3.3(b)(iii), any such payment shall be made to the Agent promptly (but
          in any event within two (2) Business  Days)  following  receipt by the
          Borrower or a Subsidiary  of the Net Proceeds  therefrom  (taking into
          account any periods permitted for reinvestment thereof).

               (ii)  Mandatory  Prepayments.  If at any  time (A) the sum of the
          aggregate   amount  of  Revolving  Loans  plus  LOC  Obligations  plus
          Swingline Loans then outstanding shall exceed the Aggregate  Revolving
          Committed  Amount,  (B) the aggregate amount of LOC Obligations  shall
          exceed the aggregate LOC Committed Amount, or (C) the aggregate amount
          of Swingline Loans shall exceed the Swingline  Committed Amount,  then
          in any such instance the Borrower  shall  immediately  make payment on
          the Loans or provide cash collateral in respect of the LOC Obligations
          in an amount sufficient to eliminate the deficiency.  In the case of a
          mandatory  prepayment  required on account of subsection (B) or (C) in
          the foregoing sentence,  the amount required to be paid shall serve to
          temporarily  reduce the  Aggregate  Revolving  Committed  Amount  (for
          purposes of borrowing availability hereunder,  but not for purposes of
          computation of fees) by the amount of the payment  required until such
          time as the situation shall no longer exist.  Payments hereunder shall
          be applied first to Swingline Loans, then to Revolving Loans, and then
          to a cash collateral account in respect of the LOC Obligations.

          (c)  Voluntary  Prepayments.  Loans may be prepaid in whole or in part
     without premium or penalty;  provided that (i) Eurodollar  Loans may not be
     prepaid other than at the end of the Interest  Period  applicable  thereto,
     and (ii)  each such  partial  prepayment  shall be in a  minimum  aggregate
     principal amount of $1,000,000 and integral multiples of $500,000 in excess
     thereof,  in the  case  of  Revolving  Loans,  and  $100,000  and  integral
     multiples thereof,  in the case of Swingline Loans.  Amounts prepaid on the
     Revolving Loans may be reborrowed in accordance with the provisions hereof.

          (d) Notice and Application.  Except as otherwise  provided herein, the
     Borrower will provide  notice to the Agent of any  prepayment by 11:00 A.M.
     (Charlotte,  North  Carolina  time)  on  the  date  of  prepayment.  Unless
     otherwise expressly provided by the Borrower,  amounts paid hereunder shall
     be applied first to Base Rate Loans and then to Eurodollar  Loans in direct
     order of their Interest Period maturities.

                                       34

<PAGE>

     3.4 Fees.

          (a) Commitment Fee. In consideration  of the Revolving  Commitments by
     the  Lenders  hereunder,  the  Borrower  agrees to pay to the Agent for the
     ratable benefit of the Lenders a commitment fee (the  "Commitment  Fee") in
     an amount equal to the Applicable Percentage per annum on the average daily
     unused  portion of the  Revolving  Committed  Amount in effect from time to
     time. For purposes of computing the Commitment  Fee,  Swingline Loans shall
     not  be  considered  usage  under  the  Revolving   Committed  Amount.  The
     Commitment  Fee  shall be  payable  quarterly  in  arrears  on the 15th day
     following  the last day of each  calendar  quarter  for the prior  calendar
     quarter.

          (b) Letter of Credit Fees. In  consideration  of the LOC  Commitments,
     the  Borrower  agrees to pay to the  Issuing  Lender a fee (the  "Letter of
     Credit Fee") equal to the  Applicable  Percentage  per annum on the average
     daily maximum amount available to be drawn under each Letter of Credit from
     the date of issuance to the date of  expiration.  The Issuing  Lender shall
     promptly  pay the  Letter of Credit  Fee over to the Agent for the  ratable
     benefit of the Lenders (including the Issuing Lender).  In addition to such
     Letter of Credit Fee, the Borrower  agrees to pay to the Issuing Lender for
     its own account  without  sharing by the other  Lenders  one-eighth  of one
     percent (1/8%) per annum on the average daily maximum  amount  available to
     be drawn  under  each such  Letter of Credit  issued by it.  The  Letter of
     Credit Fee shall be payable  quarterly in arrears on the 15th day following
     the last day of each calendar quarter.

          (c) Administrative  Fees. The Borrower agrees to pay to the Agent, for
     its own  account,  the  annual  administrative  fee  (the  "Agent's  Fees")
     referred to in the Agent's Fee Letter.

     3.5 Capital Adequacy.

     If, after the date hereof,  any Lender has determined  that the adoption or
effectiveness  of any  applicable  law,  rule or  regulation  regarding  capital
adequacy,  or any  change  therein,  or any  change  in  the  interpretation  or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration  thereof, or compliance
by such Lender or its parent  company  with any request or  directive  regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable  agency, has or would have the effect of reducing the
rate of return on such Lender's or its parent  company's  capital or assets as a
consequence of its  commitments  or obligations  hereunder to a level below that
which such Lender  could have  achieved  but for such  adoption,  effectiveness,
change or compliance  (taking into consideration the policies of such Lender and
its parent company with respect to capital  adequacy),  then, within 10 Business
Days after the  Borrower's  receipt of the  certificate  referred to in the next
sentence,  the  Borrower  shall pay to such  Lender  such  additional  amount or
amounts  as  will  compensate  such  Lender  and its  parent  company  for  such
reduction;  provided,  however,  that a Lender  will  not  request  any  amounts
hereunder unless it is generally requesting amounts under comparable  provisions
from similarly situated borrowers,  and provided,  further, that no such amounts
shall be payable with respect to reduction in rate of return  incurred more than
three (3) months before such Lender demands compensation under this Section 3.5.
A certificate  as to the amount of such  reduction in rate of return,  the basis
therefor and setting forth in  reasonable  detail the  calculations  used by the
applicable Lender to arrive at the amount or amounts claimed to be due, shall be
submitted  to the  Borrower  and the Agent.  Each  determination  by a Lender of
amounts owing under this Section shall be rebuttably presumptive evidence of the
matters set forth therein.

                                       35

<PAGE>

     3.6 Inability To Determine Interest Rate.

     If prior to the first day of any  Interest  Period,  the Agent  shall  have
determined  (which  determination  shall  be  conclusive  and  binding  upon the
Borrower)  that,  by reason of  circumstances  affecting  the  relevant  market,
adequate and reasonable  means do not exist for ascertaining the Eurodollar Rate
for such Interest  Period,  the Agent shall give  telecopy or telephonic  notice
thereof to the Borrower and the Lenders as soon as  practicable  thereafter.  If
such notice is given (x) any Eurodollar  Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans, (y) any Loans that
were to have  been  converted  on the first  day of such  Interest  Period to or
continued  as  Eurodollar  Loans shall be converted to or continued as Base Rate
Loans and (z) any outstanding  Eurodollar Loans shall be converted,  on the last
day of the applicable  Interest Periods,  to Base Rate Loans.  Until such notice
has been withdrawn by the Agent,  no further  Eurodollar  Loans shall be made or
continued as such,  nor shall the  Borrower  have the right to convert Base Rate
Loans to Eurodollar Loans.


     3.7 Illegality.

     Notwithstanding  any other  provision  herein,  if the  adoption  of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring  after the Closing  Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement,  (a) such
Lender shall promptly give written notice of such  circumstances to the Borrower
and the Agent (which notice shall be withdrawn  whenever such  circumstances  no
longer exist),  (b) the commitment of such Lender  hereunder to make  Eurodollar
Loans,  continue  Eurodollar  Loans  as such and  convert  a Base  Rate  Loan to
Eurodollar Loans shall forthwith be canceled and, until such time as it shall no
longer be unlawful for such Lender to make or maintain  Eurodollar  Loans,  such
Lender  shall  then  have a  commitment  only to make a Base  Rate  Loan  when a
Eurodollar  Loan is requested and (c) such Lender's  Loans then  outstanding  as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on
the respective  last days or the then current  Interest  Periods with respect to
such  Loans or within  such  earlier  period  as  required  by law.  If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current  Interest  Period with respect  thereto,  the Borrower shall pay to
such Lender such  amounts,  if any,  as may be required  pursuant to  subsection
3.10.

                                       36

<PAGE>

     3.8 Requirements of Law.

     If the  adoption  of or any  change  in  any  Requirement  of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender  with any  request or  directive  (whether or not having the force of
law) from any central bank or other  Governmental  Authority,  in each case made
subsequent  to the  Closing  Date (or,  if later,  the date on which such Lender
becomes a Lender):

          (i) shall subject such Lender to any tax of any kind  whatsoever on or
     in respect of any letter of credit application or any Eurodollar Loans made
     by it or its obligation to make  Eurodollar  Loans,  or change the basis of
     taxation  of  payments  to such  Lender  in  respect  thereof  (except  for
     Non-Excluded Taxes covered by subsection 3.9 (including  Non-Excluded Taxes
     imposed  solely by reason of any  failure of such Lender to comply with its
     obligations  under  subsection  3.9(b)) and changes in taxes measured by or
     imposed upon the overall net income,  or franchise  tax (imposed in lieu of
     such net income  tax),  of such Lender or its  applicable  lending  office,
     branch, or any affiliate thereof);

          (ii) shall  impose,  modify or hold  applicable  any reserve,  special
     deposit,  compulsory  loan or similar  requirement  against assets held by,
     deposits or other liabilities in or for the account of, advances,  loans or
     other  extensions of credit by, or any other  acquisition  of funds by, any
     office of such Lender which is not otherwise  included in the determination
     of the Eurodollar Rate hereunder; or

          (iii) shall impose on such Lender any other  condition  (excluding any
     tax of any kind whatsoever);

and the result of any of the  foregoing  is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining  Eurodollar  Loans or to reduce any amount  receivable
hereunder  in  respect  thereof,  then,  in any such  case,  upon  notice to the
Borrower  from such  Lender,  through the Agent,  in  accordance  herewith,  the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate  such Lender for such  increased  cost or reduced amount
receivable,  provided  that, in any such case, the Borrower may elect to convert
the Eurodollar  Loans made by such Lender hereunder to Base Rate Loans by giving
the Agent at least one Business Day's notice of such election, in which case the
Borrower shall promptly pay to such Lender,  upon demand,  without  duplication,
such amounts,  if any, as may be required  pursuant to  subsection  3.10. If any
Lender  becomes  entitled  to claim  any  additional  amounts  pursuant  to this
subsection, it shall provide prompt notice thereof to the Borrower,  through the
Agent,  certifying  (x) that one of the events  described in this  paragraph has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed  explanation
of the  calculation  thereof.  Such a certificate as to any  additional  amounts
payable pursuant to this subsection submitted by such Lender, through the Agent,
to the  Borrower  shall be  conclusive  in the absence of manifest  error.  This
covenant shall survive the termination of this Credit  Agreement and the payment
of the Loans and all other amounts payable hereunder.

                                       37

<PAGE>

     3.9 Taxes.

          (a) Except as provided below in this subsection,  all payments made by
     the Borrower  under this Credit  Agreement and any Notes shall be made free
     and clear of, and without  deduction or  withholding  for or on account of,
     any  present  or future  income,  stamp or other  taxes,  levies,  imposts,
     duties,  charges,  fees,  deductions  or  withholdings,  now  or  hereafter
     imposed,  levied,  collected,  withheld  or  assessed  by any  Governmental
     Authority,  excluding  taxes  measured  by or imposed  upon the overall net
     income of any Lender or its  applicable  lending  office,  or any branch or
     affiliate  thereof,  and all franchise taxes,  branch taxes, taxes on doing
     business or taxes on the overall  capital or net worth of any Lender or its
     applicable lending office, or any branch or affiliate thereof, in each case
     imposed in lieu of net income taxes, imposed: (i) by the jurisdiction under
     the laws of  which  such  Lender,  applicable  lending  office,  branch  or
     affiliate is organized or is located,  or in which its principal  executive
     office is located,  or any nation within which such jurisdiction is located
     or any political  subdivision  thereof; or (ii) by reason of any connection
     between the  jurisdiction  imposing  such tax and such  Lender,  applicable
     lending office,  branch or affiliate other than a connection arising solely
     from such Lender having  executed,  delivered or performed its obligations,
     or received payment under or enforced,  this Credit Agreement or any Notes.
     If any such non-excluded taxes, levies,  imposts,  duties,  charges,  fees,
     deductions  or  withholdings  ("Non-Excluded  Taxes")  are  required  to be
     withheld from any amounts  payable to the Agent or any Lender  hereunder or
     under any Notes,  (A) the  amounts  so payable to the Agent or such  Lender
     shall be  increased  to the extent  necessary to yield to the Agent or such
     Lender (after payment of all Non-Excluded Taxes) interest or any such other
     amounts payable  hereunder at the rates or in the amounts specified in this
     Credit Agreement and any Notes, provided,  howeve , that the Borrower shall
     be entitled to deduct and withhold any Non-Excluded  Taxes and shall not be
     required to  increase  any such  amounts  payable to any Lender that is not
     organized under the laws of the United States of America or a state thereof
     if such Lender fails to comply with the  requirements  of paragraph  (b) of
     this  subsection  whenever  any  Non-Excluded  Taxes  are  payable  by  the
     Borrower,  and (B) as promptly as possible  thereafter  the Borrower  shall
     send to the Agent for its own account or for the account of such Lender, as
     the case may be, a certified copy of an original  official receipt received
     by the Borrower showing payment  thereof.  If the Borrower fails to pay any
     Non-Excluded Taxes when due to the appropriate taxing authority or fails to
     remit to the Agent the  required  receipts  or other  required  documentary
     evidence,  the Borrower  shall  indemnify the Agent and the Lenders for any
     incremental  taxes,  interest or penalties  that may become  payable by the
     Agent or any Lender as a result of any such failure. The agreements in this
     subsection  shall survive the termination of this Credit  Agreement and the
     payment of the Loans and all other amounts payable hereunder.

                                       38

<PAGE>

          (b) Each Lender that is not incorporated  under the laws of the United
     States of America or a state thereof shall:

               (X) (i) on or  before  the date of any  payment  by the  Borrower
          under this Credit  Agreement or Notes to such  Lender,  deliver to the
          Borrower and the Agent (A) two duly completed  copies of United States
          Internal  Revenue  Service Form 1001 or 4224, or successor  applicable
          form,  as the case may be,  certifying  that it is entitled to receive
          payments under this Credit  Agreement and any Notes without  deduction
          or  withholding  of any United States  federal income taxes and (B) an
          Internal  Revenue  Service  Form W-8 or W-9, or  successor  applicable
          form,  as the  case  may  be,  certifying  that it is  entitled  to an
          exemption from United States backup withholding tax;

               (ii) deliver to the Borrower and the Agent two further  copies of
          any such form or  certification  on or  before  the date that any such
          form or  certification  expires  or  becomes  obsolete  and  after the
          occurrence  of any event  requiring  a change in the most  recent form
          previously delivered by it to the Borrower; and

               (iii) obtain such extensions of time for filing and complete such
          forms or certifications as may reasonably be requested by the Borrower
          or the Agent; or

               (Y) in the case of any such  Lender  that is not a "bank"  within
          the meaning of Section  881(c)(3)(A) of the Code, (i) represent to the
          Borrower  (for the benefit of the  Borrower  and the Agent) that it is
          not a bank  within the  meaning of Section  881(c)(3)(A)  of the Code,
          (ii)  agree to furnish  to the  Borrower  on or before the date of any
          payment by the  Borrower,  with a copy to the Agent (A) a  certificate
          substantially  in the form of Schedule  3.10 (any such  certificate  a
          "U.S. Tax Compliance  Certificate")  and (B) two accurate and complete
          original  signed  copies of  Internal  Revenue  Service  Form W-8,  or
          successor   applicable   form   certifying  to  such  Lender's   legal
          entitlement at the date of such  certificate to an exemption from U.S.
          withholding  tax under the  provisions  of Section  881(c) of the Code
          with  respect to payments to be made under this Credit  Agreement  and
          any Notes (and to deliver to the  Borrower  and the Agent two  further
          copies  of such  form on or  before  the date it  expires  or  becomes
          obsolete and after the  occurrence of any event  requiring a change in
          the  most  recently  provided  form  and,  if  necessary,  obtain  any
          extensions of time  reasonably  requested by the Borrower or the Agent
          for filing and completing such forms),  and (iii) agree, to the extent
          legally entitled to do so, upon reasonable request by the Borrower, to
          provide  to the  Borrower  (for the  benefit of the  Borrower  and the
          Agent)  such other  forms as may be  reasonably  required  in order to
          establish the legal  entitlement  of such Lender to an exemption  from
          withholding  with respect to payments under this Credit  Agreement and
          any Notes;

                                       39

<PAGE>

     unless  in any such  case any  change  in  treaty,  law or  regulation  has
     occurred  after  the date such  Person  becomes  a Lender  hereunder  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 so advises the Borrower and the Agent. Each Person that shall become
     a Lender or a participant  of a Lender  pursuant to subsection  11.6 shall,
     upon the effectiveness of the related transfer,  be required to provide all
     of the forms,  certifications  and  statements  required  pursuant  to this
     subsection,  provided  that in the case of a  participant  of a Lender  the
     obligations of such participant of a Lender pursuant to this subsection (b)
     shall be determined as if the  participant of a Lender were a Lender except
     that such  participant  of a Lender shall furnish all such required  forms,
     certifications  and  statements  to  the  Lender  from  which  the  related
     participation shall have been purchased.

          (c) In the event that any Lender  requests  payment by the Borrower of
     any  additional  amounts  pursuant to  subsection  (a) of this Section 3.9,
     then,  provided  that no Default or Event of Default  has  occurred  and is
     continuing at such time, the Borrower may, at its own expense (such expense
     to include any  transfer fee payable to the Agent under  Section  11.6(b)),
     and in its sole  discretion  require  such Lender to transfer and assign in
     whole or in part,  without  recourse (in accordance with and subject to the
     terms and  conditions of Section  11.6(b)),  all or part of its  interests,
     rights  and  obligations   under  this  Credit  Agreement  to  an  Eligible
     Transferee which shall assume such assigned obligations;  provided that (i)
     such assignment  shall not relieve the Borrower from its obligations to pay
     such  additional  amounts that may be due in accordance with subsection (a)
     of this Section 3.9, (ii) such assignment  shall not conflict with any law,
     rule or  regulation or order of any court or other  Governmental  Authority
     and (iii) the Borrower or such Eligible  Transferee  shall have paid to the
     assigning  Lender  in  immediately  available  funds the  principal  of and
     interest  accrued  to the  date of such  payment  on the  Loans  made by it
     hereunder and all accrued Fees and other amounts owed to it hereunder.

                                       40

<PAGE>

     3.10 Indemnity.

     The  Borrower  agrees to  indemnify  each  Lender  and to hold each  Lender
harmless  from any loss or expense which such Lender may sustain or incur (other
than  through  such  Lender's  gross  negligence  or  willful  misconduct)  as a
consequence of (a) default by the Borrower in making a borrowing of,  conversion
into or continuation  of Eurodollar  Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit  Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar  Loan after
the Borrower has given a notice  thereof in  accordance  with the  provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect  thereto.  Such
indemnification  may include an amount  equal to the excess,  if any, of (i) the
amount of interest which would have accrued on the amount so prepaid,  or not so
borrowed,  converted  or  continued,  for  the  period  from  the  date  of such
prepayment or of such failure to borrow,  convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow,  convert
or continue,  the Interest  Period that would have commenced on the date of such
failure) in each case at the  applicable  rate of interest  for such  Eurodollar
Loans  provided  for  herein  (excluding,  however,  the  Applicable  Percentage
included  therein,  if any) over  (ii) the  amount of  interest  (as  reasonably
determined  by such  Lender)  which  would have  accrued to such  Lender on such
amount by placing  such amount on deposit for a  comparable  period with leading
banks in the  interbank  Eurodollar  market.  This  covenant  shall  survive the
termination of this Credit  Agreement and the payment of the Loans and all other
amounts payable hereunder.

     3.11 Pro Rata Treatment.

     Except to the extent otherwise provided herein:

          (a)  Loans.  Except to the  extent  otherwise  provided  herein,  each
     Revolving  Loan,  each payment or  prepayment of principal of any Revolving
     Loan,  each  payment of interest on the  Revolving  Loans,  each payment of
     Commitment Fees, each reduction of the Revolving  Committed Amount and each
     conversion or extension of any Revolving Loan,  shall be allocated pro rata
     among the Lenders in accordance  with the respective  principal  amounts of
     their outstanding Loans and Participation Interests.

          (b) Letters of Credit. Each payment of the Letter of Credit Fee (other
     than the portion  retained by the Issuing  Bank for its own account) and of
     unreimbursed  drawings in respect of LOC Obligations  shall be allocated to
     each Lender entitled thereto pro rata in accordance with its LOC Commitment
     Percentage;  provided  that,  if any Lender  shall  have  failed to pay its
     applicable  pro rata share of any drawing under any Letter of Credit,  then
     any amount to which such Lender  would  otherwise  be entitled  pursuant to
     this  subsection  (b) shall  instead  be  payable  to the  Issuing  Lender;
     provided further,  that in the event any amount paid to any Lender pursuant
     to this  subsection  (b) is rescinded or must  otherwise be returned by the
     Issuing Lender,  each Lender shall, upon the request of the Issuing Lender,
     repay to the Agent for the account of the Issuing Lender the amount so paid
     to such Lender,  with  interest for the period  commencing on the date such
     payment is returned by the Issuing Lender until the date the Issuing Lender
     receives such  repayment at a rate per annum equal to, during the period to
     but  excluding  the date two (2)  Business  Days  after such  request,  the
     Federal Funds Rate, and thereafter, the Base Rate plus two percent (2%).

                                       41

<PAGE>

          (c) Advances.  Unless the Agent shall have been notified in writing by
     any Lender  prior to a borrowing  that such Lender will not make the amount
     that would constitute its Revolving Commitment Percentage of such borrowing
     available  to the Agent,  the Agent may assume  that such  Lender is making
     such amount  available  to the Agent,  and the Agent may, in reliance  upon
     such assumption,  make available to the Borrower a corresponding amount. If
     such amount is not made  available  to the Agent by such Lender  within the
     time period  specified  therefor  hereunder,  such Lender  shall pay to the
     Agent, on demand,  such amount with interest thereon at a rate equal to the
     Federal  Funds Rate for the  period  until such  Lender  makes such  amount
     immediately available to the Agent. A certificate of the Agent submitted to
     any Lender with respect to any amounts owing under this subsection shall be
     conclusive in the absence of manifest  error.  If such  Lender's  Revolving
     Commitment  Percentage of such borrowing is not made available to the Agent
     by  such  Lender  within  two  Business  Days of the  date  of the  related
     borrowing,  the Agent  shall  notify the  Borrower  of the  failure of such
     Lender to make such amount  available to the Agent and the Agent shall also
     be entitled to recover  such amount with  interest  thereon at the rate per
     annum  applicable  to Base  Rate  Loans  hereunder,  on  demand,  from  the
     Borrower.

     3.12 Sharing of Payments.

     The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, any unreimbursed  drawing with respect to
any LOC  Obligations  or any other  obligation  owing to such Lender  under this
Credit  Agreement  through the exercise of a right of setoff,  banker's  lien or
counterclaim,  or pursuant to a secured  claim under  Section 506 of Title 11 of
the United  States Code or other  security or interest  arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise,  or by any other means,  in excess
of its pro rata share of such payment as provided for in this Credit  Agreement,
such Lender shall promptly  purchase from the other Lenders a  participation  in
such Loans, LOC Obligations and other obligations in such amounts, and make such
other  adjustments  from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares as
provided  for  in  this  Credit  Agreement.  The  Lenders  further  agree  among
themselves  that if payment to a Lender  obtained  by such  Lender  through  the
exercise of a right of setoff,  banker's  lien,  counterclaim  or other event as
aforesaid  shall be rescinded or must  otherwise be restored,  each Lender which
shall have  shared  the  benefit  of such  payment  shall,  by  repurchase  of a
participation  theretofore sold, return its share of that benefit (together with
its share of any accrued  interest  payable with respect thereto) to each Lender
whose  payment  shall have been  rescinded or otherwise  restored.  The Borrower
agrees that any Lender so purchasing  such a  participation  may, to the fullest
extent  permitted  by law,  exercise  all rights of payment,  including  setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan,  LOC  Obligation or other  obligation in
the amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or the Agent shall fail to remit to the Agent or
any other  Lender an amount  payable by such Lender or the Agent to the Agent or
such other Lender pursuant to this Credit Agreement

                                       42

<PAGE>

on the date when such amount is due, such  payments  shall be made together with
interest  thereon  for each date from the date such amount is due until the date
such amount is paid to the Agent or such other  Lender at a rate per annum equal
to the Federal Funds Rate.  If under any  applicable  bankruptcy,  insolvency or
other  similar law, any Lender  receives a secured  claim in lieu of a setoff to
which this Section 3.12 applies,  such Lender shall, to the extent  practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders  under this  Section  3.12 to share in the benefits of
any recovery on such secured claim.

     3.13 Place and Manner of Payments.

     Except as otherwise  specifically  provided herein,  all payments hereunder
shall be made to the Agent in Dollars in immediately  available  funds,  without
offset,  deduction,  counterclaim  or withholding of any kind, at its offices at
the  Agent's  office  specified  in  Schedule  11.2 not  later  than  2:00  P.M.
(Charlotte,  North Carolina time) on the date when due.  Payments received after
such time shall be deemed to have been received on the next succeeding  Business
Day. The Agent may (but shall not be obligated  to) debit the amount of any such
payment  which is not made by such time to any ordinary  deposit  account of the
Borrower  maintained with the Agent (with notice to the Borrower).  The Borrower
shall, at the time it makes any payment under this Credit Agreement,  specify to
the Agent the  Loans,  LOC  Obligations,  Fees or other  amounts  payable by the
Borrower hereunder to which such payment is to be applied (and in the event that
it fails so to specify,  or if such application  would be inconsistent  with the
terms  hereof,  the Agent shall  distribute  such payment to the Lenders in such
manner as the Agent may determine to be  appropriate  in respect of  obligations
owing by the  Borrower  hereunder,  subject to the terms of Section  3.11).  The
Agent will  distribute  such  payments to such  Lenders,  if any such payment is
received prior to 12:00 Noon (Charlotte,  North Carolina time) on a Business Day
in like funds as received  prior to the end of such  Business Day and  otherwise
the Agent will  distribute  such payment to such Lenders on the next  succeeding
Business Day.  Whenever any payment hereunder shall be stated to be due on a day
which is not a Business  Day, the due date thereof shall be extended to the next
succeeding  Business Day (subject to accrual of interest and Fees for the period
of  such  extension),  except  that  in the  case of  Eurodollar  Loans,  if the
extension  would  cause the  payment to be made in the next  following  calendar
month,  then such payment shall instead be made on the next  preceding  Business
Day. Except as expressly provided otherwise herein, all computations of interest
and fees shall be made on the basis of actual number of days elapsed over a year
of 360 days,  except with respect to  computation of interest on Base Rate Loans
which shall be calculated  based on a year of 365 or 366 days,  as  appropriate.
Interest  shall accrue from and include the date of  borrowing,  but exclude the
date of payment.

                                       43

<PAGE>

     3.14 Indemnification; Nature of Issuing Lender's Duties.

     In addition to its other  obligations  under  Sections  2.2,  the  Borrower
hereby agrees to protect,  indemnify,  pay and save each Issuing Lender harmless
from and against  any and all claims,  demands,  liabilities,  damages,  losses,
costs,  charges and expenses  (including  reasonable  attorneys'  fees) that the
Issuing Lender may incur or be subject to as a consequence,  direct or indirect,
of (A) the  issuance  of any Letter of Credit or (B) the  failure of the Issuing
Lender  to honor a  drawing  under a Letter  of Credit as a result of any act or
omission,  whether rightful or wrongful,  of any present or future de jure or de
facto government or governmental  authority (all such acts or omissions,  herein
called  "Government  Acts"). As between the Borrower and the Issuing Lender, the
Borrower  shall assume all risks of the acts,  omissions or misuse of any Letter
of Credit by the beneficiary thereof.

                                    SECTION 4

                                    GUARANTY

     4.1 The Guaranty.

     Each of the Credit Parties hereby jointly and severally  guarantees to each
Lender and the Agent as  hereinafter  provided the prompt  payment of the Credit
Party  Obligations in full when due (whether at stated maturity,  as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Credit Parties hereby further
agree that if any of the Credit Party  Obligations are not paid in full when due
(whether at stated maturity,  as a mandatory prepayment,  by acceleration,  as a
mandatory cash collateralization or otherwise), the Credit Parties will, jointly
and severally,  promptly pay the same,  without any demand or notice whatsoever,
and that in the case of any  extension  of time of  payment or renewal of any of
the Credit Party  Obligations,  the same will be promptly  paid in full when due
(whether at extended maturity, as a mandatory prepayment, by acceleration,  as a
mandatory cash  collateralization  or otherwise) in accordance with the terms of
such extension or renewal.

     Notwithstanding  any provision to the contrary  contained  herein or in any
other of the Credit  Documents,  the  obligations of each Credit Party hereunder
shall be limited to an aggregate  amount equal to the largest  amount that would
not render its obligations  hereunder  subject to avoidance under Section 548 of
the U.S.  Bankruptcy Code or any comparable  provisions of any applicable  state
law.

                                       44

<PAGE>

     4.2 Obligations Unconditional.

     The  obligations  of the Credit  Parties under Section 4.1 hereof are joint
and several, absolute and unconditional, irrespective of the value, genuineness,
validity,  regularity or enforceability  of any of the Credit Documents,  or any
other agreement or instrument referred to therein, or any substitution,  release
or exchange of any other  guarantee  of or security  for any of the Credit Party
Obligations,   and,  to  the  fullest  extent   permitted  by  applicable   law,
irrespective  of  any  other  circumstance   whatsoever  which  might  otherwise
constitute a legal or equitable  discharge or defense of a surety or  guarantor,
it being the  intent of this  Section  4.2 that the  obligations  of the  Credit
Parties  hereunder  shall  be  absolute  and  unconditional  under  any  and all
circumstances.  Without  limiting the generality of the foregoing,  it is agreed
that the  occurrence  of any one or more of the  following  shall  not  alter or
impair the liability of any Credit Party  hereunder  which shall remain absolute
and unconditional as described above:

          (i) at any time or from time to time,  without  notice  to any  Credit
     Party, the time for any performance of or compliance with any of the Credit
     Party  Obligations  shall be extended,  or such  performance  or compliance
     shall be waived;

          (ii) any of the acts  mentioned in any of the provisions of any of the
     Credit  Documents or any other  agreement or  instrument  referred  therein
     shall be done or omitted;

          (iii) the  maturity of any of the Credit  Party  Obligations  shall be
     accelerated,  or any of the Credit  Party  Obligations  shall be  modified,
     supplemented  or  amended  in any  respect,  or any right  under any of the
     Credit  Documents or any other agreement or instrument  referred to therein
     shall  be  waived  or any  other  guarantee  of any  of  the  Credit  Party
     Obligations  or any  security  therefor  shall be released or  exchanged in
     whole or in part or otherwise dealt with;

          (iv) any Lien  granted  to, or in favor of, the Agent or any Lender or
     Lenders as security for any of the Credit Party  Obligations  shall fail to
     attach or be perfected; or

          (v) any of the Credit Party Obligations shall be determined to be void
     or voidable (including, without limitation, for the benefit of any creditor
     of any Credit Party) or shall be  subordinated  to the claims of any Person
     (including, without limitation, any creditor of any Credit Party).

With respect to its obligations  hereunder,  each Credit Party hereby  expressly
waives  diligence,  presentment,  demand of  payment,  protest  and all  notices
whatsoever,  and any requirement that the Agent or any Lender exhaust any right,
power or remedy or proceed against any Person under any of the Credit  Documents
or any other agreement or instrument  referred to therein,  or against any other
Person under any other  guarantee  of, or security  for, any of the Credit Party
Obligations.

                                       45

<PAGE>

     4.3 Reinstatement.

     The  obligations  of the  Credit  Parties  under  this  Section  4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf  of any  Person in  respect  of the  Credit  Party  Obligations  is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations,   whether  as  a  result  of  any   proceedings  in  bankruptcy  or
reorganization or otherwise, and each Credit Party agrees that it will indemnify
each of the  Agent  and each  Lender  on  demand  for all  reasonable  costs and
expenses (including,  without limitation, fees of counsel) incurred by the Agent
or such Lender in connection with such rescission or restoration,  including any
such costs and expenses  incurred in defending  against any claim  alleging that
such payment  constituted a preference,  fraudulent  transfer or similar payment
under any bankruptcy, insolvency or similar law.

     4.4 Certain Additional Waivers.

     Without  limiting the  generality of the provisions of any other Section of
this  Section 4, each Credit Party  hereby  specifically  waives the benefits of
N.C.  Gen.  Stat.  ?? 26-7 through  26-9,  inclusive.  Each Credit Party further
agrees that such  Guarantor  shall have no right of recourse to security for the
Credit Party  Obligations.  Each of the Credit  Parties  further  agrees that it
shall have no right of subrogation, reimbursement or indemnity, nor any right of
recourse to security,  if any, for the Credit Party  Obligations  so long as any
amounts  payable to the Agent and the  Lenders  in  respect of the Credit  Party
Obligations shall remain outstanding and until all of the Revolving  Commitments
shall have expired or been terminated.

     4.5 Remedies.

     The Credit  Parties agree that, as between the Credit  Parties,  on the one
hand,  and the Agent  and the  Lenders,  on the other  hand,  the  Credit  Party
Obligations  may be  declared  to be  forthwith  due and  payable as provided in
Section  9 hereof  (and  shall be deemed to have  become  automatically  due and
payable  in the  circumstances  provided  in said  Section 9) for  purposes,  of
Section 4.1 hereof  notwithstanding  any stay,  injunction or other  prohibition
preventing such  declaration (or preventing such Credit Party  Obligations  from
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or such Credit Party  Obligations being deemed to
have  become  automatically  due and  payable),  such Credit  Party  Obligations
(whether or not due and payable by any other Person) shall forthwith  become due
and payable by the Credit Parties for purposes of said Section 4.1.

                                       46

<PAGE>

     4.6 Continuing Guarantee.

     The guarantee in this Section 4 is a continuing guarantee,  and shall apply
to all Credit Party Obligations whenever arising.

                                    SECTION 5

                                   CONDITIONS

     5.1 Conditions to Closing Date.

     This Credit  Agreement shall become  effective upon the satisfaction of the
following conditions precedent:

          (a) Execution of Agreement. The Agent shall have received (i) multiple
     counterparts  of this Credit  Agreement for each Lender  executed by a duly
     authorized  officer of each party  hereto and (ii) for the  account of each
     Lender (including the Swingline Lender) a Revolving Note.

          (b) Liability and Casualty  Insurance.  Receipt by the Agent of copies
     of insurance policies or certificates of insurance evidencing liability and
     casualty insurance meeting the requirements set forth herein, together with
     evidence of payment of premiums thereon.

          (c) Financial  Information.  Receipt by the Agent of copies of audited
     consolidated  financial statements for the Company and its Subsidiaries for
     fiscal  years  1995  and  1996;  and  interim  quarterly   company-prepared
     consolidated  financial  statements  for the Company  and its  Subsidiaries
     dated as of September 30, 1997.

          (d) Corporate Documents. Receipt by the Agent of the following:

               (i) Certificate of  Incorporation.  Copies of the certificates of
          incorporation  or charter  documents  of the  Borrower and each of the
          other Credit Parties  certified to be true and complete as of a recent
          date by the  appropriate  governmental  authority  of the state of its
          incorporation.

                                       47

<PAGE>

               (ii) Resolutions. Copies of resolutions of the Board of Directors
          of the  Borrower and each of the other Credit  Parties  approving  and
          adopting the Credit Documents,  the transactions  contemplated therein
          and  authorizing  execution  and  delivery  thereof,  certified  by  a
          secretary or assistant secretary as of the Closing Date to be true and
          correct and in force and effect as of such date.

               (iii)  Bylaws.  A copy of the bylaws of the  Borrower and each of
          the  other  Credit  Parties  certified  by a  secretary  or  assistant
          secretary  as of the Closing  Date to be true and correct and in force
          and effect as of such date.

               (iv) Good Standing.  Copies of (i) certificates of good standing,
          existence or its  equivalent  with respect to the Borrower and each of
          the  other  Credit  Parties  certified  as of a  recent  date  by  the
          appropriate governmental authorities of the state of incorporation and
          each other  state in which the  failure  to so qualify  and be in good
          standing  would  have a material  adverse  effect on the  business  or
          operations  of the  Borrower or other  Credit  Party in such state and
          (ii) a certificate indicating payment of all corporate franchise taxes
          certified as of a recent date by the appropriate  governmental  taxing
          authorities.

          (e)  Officer's  Certificate.  The Agent  shall have  received,  with a
     counterpart for each Lender, a certificate of a duly authorized  officer of
     each of the  Borrower  and  each of the  other  Credit  Parties  dated  the
     Effective  Date,   substantially  in  the  form  of  Schedule  5.1(g)  with
     appropriate insertions and attachments.

          (f) Legal Opinion of Counsel.  The Agent shall have  received,  with a
     copy for each Lender, an opinion of Dechert Price & Rhoads, counsel for the
     Borrower, the Company and the other Guarantors,  dated the Closing Date and
     addressed to the Agent and the Lenders, in form and substance  satisfactory
     to the Agent and the Required Lenders.

          (g) Fees.  The Agent  shall  have  received  all fees,  if any,  owing
     pursuant to the Agent's Fee Letter and Section 3.4.

                                       48

<PAGE>

          (h) Subsection 5.2 Conditions. The conditions specified in subsections
     5.2(a) and (b) shall be  satisfied  on the  Closing  Date as if the initial
     Extensions of Credit were to be made on such date.

          (i)  Additional  Matters.  All other  documents  and legal  matters in
     connection  with the  transactions  contemplated  by this Credit  Agreement
     shall be reasonably satisfactory in form and substance to the Agent and its
     counsel.

     5.2 Conditions to All Extensions of Credit.

     The  obligation  of each Lender to make any  Extension of Credit  hereunder
(including the initial  Extension of Credit to be made  hereunder) is subject to
the  satisfaction  of the following  conditions  precedent on the date of making
such Extension of Credit:

          (a) Representations and Warranties. The representations and warranties
     made by the Borrower,  the Company and the other Credit  Parties  herein or
     which are contained in any certificate of a Responsible  Officer  furnished
     at any time under or in  connection  herewith  shall be true and correct in
     all material  respects on and as of the date of such Extension of Credit as
     if made on and as of such date.

          (b) No  Default  or Event of  Default.  No Default or Event of Default
     shall have  occurred and be  continuing on such date or after giving effect
     to the  Extension  of Credit to be made on such date unless such Default or
     Event of Default  shall have been  waived in  accordance  with this  Credit
     Agreement.

          (c)  Additional  Conditions to Revolving  Loans.  If such Extension of
     Credit is made pursuant to subsection 2.1, all conditions set forth in such
     subsection shall have been satisfied.

          (d) Additional  Conditions to Letters of Credit.  If such Extension of
     Credit is made pursuant to subsection 2.2, all conditions set forth in such
     subsection shall have been satisfied.

          (e)  Additional  Conditions to Swingline  Loan.  If such  Extension of
     Credit is made pursuant to subsection 2.3, all conditions set forth in such
     subsection shall have been satisfied.

     Each request for an Extension of Credit and each acceptance by the Borrower
of an  Extension of Credit shall be deemed to  constitute a  representation  and
warranty  by the  Borrower as of the date of such  Extension  of Credit that the
applicable  conditions in paragraphs (a) and (b), and in (c), (d) or (e) of this
subsection have been satisfied.

                                       49

<PAGE>

                                    SECTION 6

                         REPRESENTATIONS AND WARRANTIES

     To  induce  the  Lenders  to  enter  into  this  Agreement  and to make the
Extension of Credit  herein  provided  for,  each of the Credit  Parties  hereby
represents and warrants to the Agent and to each Lender that:

     6.1 Financial Condition.

          (a) The consolidated balance sheet of the Company and its consolidated
     Subsidiaries  as at December 31, 1995,  December 31, 1996 and September 30,
     1997, and the related  consolidated  statements of income and of cash flows
     for the fiscal year or nine month  period  ended on such date,  reported on
     (only in the case of such  annual  statements)  by KPMG Peat  Marwick  LLP,
     copies of which have heretofore been furnished to each Lender, are complete
     and correct in all  material  respects in  accordance  with GAAP and fairly
     present in all material  respects the consolidated  financial  condition of
     the  Company and its  consolidated  Subsidiaries  as at such date,  and the
     consolidated  results of their operations and their consolidated cash flows
     for the fiscal year or nine month period then ended, subject in the case of
     the September 30, 1997 statements to normal year end adjustments.  All such
     financial  statements,  including the related  schedules and notes thereto,
     have been prepared in accordance with GAAP applied consistently  throughout
     the periods involved (except as disclosed therein). Neither the Company nor
     any of its consolidated Subsidiaries had, at the date of the balance sheets
     referred  to  above,   any  material   Guarantee   Obligation,   contingent
     liabilities or liability for taxes,  long-term  lease or unusual forward or
     long-term commitment,  including, without limitation, any material interest
     rate or  foreign  currency  swap or  exchange  transaction,  which  are not
     reflected in the foregoing statements or in the notes thereto.

          (b)  The   consolidated   balance   sheet  of  the  Borrower  and  its
     consolidated  Subsidiaries  as at December 31, 1995,  December 31, 1996 and
     September 30, 1997, and the related  consolidated  statements of income and
     of cash flows for the fiscal year or nine month  period ended on such date,
     reported  on (only  in the case of such  annual  statements)  by KPMG  Peat
     Marwick LLP, copies of which have heretofore been furnished to each Lender,
     are complete and correct in all material  respects in accordance  with GAAP
     and fairly  present in all  material  respects the  consolidated  financial
     condition  of the  Borrower and its  consolidated  Subsidiaries  as at such
     date,  and  the   consolidated   results  of  their  operations  and  their
     consolidated  cash flows for the  fiscal  year or nine  month  period  then
     ended,  subject in the case of the September 30, 1997  statements to normal
     year end adjustments. All such financial statements,  including the related
     schedules and notes  thereto,  have been  prepared in accordance  with GAAP
     applied  consistently  throughout the periods involved (except as disclosed
     therein).  Neither the  Borrower nor any of its  consolidated  Subsidiaries
     had, at the date of the balance  sheets  referred  to above,  any  material
     Guarantee  Obligation,  contingent  liabilities  or  liability  for  taxes,
     long-term  lease or unusual  forward or  long-term  commitment,  including,
     without limitation,  any material interest rate or foreign currency swap or
     exchange  transaction,  which are not reflected in the foregoing statements
     or in the notes thereto.
                                       50

<PAGE>

     6.2 No Change.

     Since September 30, 1997,  there has been no development or event which has
had a Material Adverse Effect.

     6.3 Corporate Existence; Compliance with Law.

     Except  as  disclosed  on  Schedule  6.3,  each  of  the  Company  and  its
Subsidiaries,  including the Borrower,  (a) is duly organized,  validly existing
and in good standing under the laws of the jurisdiction of its organization, (b)
has the corporate or partnership  power and authority and the legal right to own
and  operate  all its  material  property,  to lease the  material  property  it
operates as lessee and to conduct the business in which it is currently engaged,
(c) is duly  qualified  as a  foreign  corporation  or  partnership  and in good
standing  under  the laws of each  jurisdiction  where its  ownership,  lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to so qualify or be in good standing would
not, in the aggregate,  have a Material  Adverse Effect and (d) is in compliance
with all  Requirements  of Law except to the extent  that the  failure to comply
therewith would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     6.4 Corporate Power; Authorization; Enforceable Obligations.

     Each of the  Borrower  and the  other  Credit  Parties  has full  power and
authority and the legal right to make,  deliver and perform the Credit Documents
to which it is party and has taken all necessary  corporate  action to authorize
the execution,  delivery and performance by it of the Credit  Documents to which
it is party. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental  Authority or any other Person is required
in connection with the borrowings  hereunder or with the execution,  delivery or
performance  of any Credit  Document by the Borrower or the other Credit Parties
(other  than  those  which  have  been   obtained)   or  with  the  validity  or
enforceability  of any Credit  Document  against the Borrower or the  Guarantors
(except such filings as are necessary in connection  with the  perfection of the
Liens created by such Credit  Documents).  Each Credit Document to which it is a
party has been duly  executed  and  delivered  on behalf of the  Borrower or the
other Credit Parties,  as the case may be. Each Credit Document to which it is a
party constitutes a legal,  valid and binding  obligation of the Borrower or the
other Credit Parties,  as the case may be,  enforceable  against the Borrower or
the other  Credit  Parties,  as the case may be, in  accordance  with its terms,
except as enforceability  may be limited by applicable  bankruptcy,  insolvency,
reorganization,   moratorium  or  similar  laws  affecting  the  enforcement  of
creditors'  rights  generally  and  by  general  equitable  principles  (whether
enforcement is sought by proceedings in equity or at law).

                                       51

<PAGE>

     6.5 No Legal Bar; No Default.

     The  execution,  delivery  and  performance  of the Credit  Documents,  the
borrowings  thereunder and the use of the proceeds of the Loans will not violate
any  Requirement  of Law or any  Contractual  Obligation  of the  Company or its
Subsidiaries,  including  the  Borrower  (except  those as to which  waivers  or
consents have been obtained),  and will not result in, or require,  the creation
or  imposition  of any  Lien on any of its or  their  respective  properties  or
revenues pursuant to any Requirement of Law or Contractual Obligation other than
the Liens arising under or contemplated in connection with the Credit Documents.
Neither the Company nor any of its Subsidiaries,  including the Borrower,  is in
default  under or with  respect  to any of its  Contractual  Obligations  in any
respect which would reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.

     6.6 No Material Litigation.

     Except  as set forth in  Schedule  6.6,  no  litigation,  investigation  or
proceeding of or before any arbitrator or Governmental  Authority is pending or,
to the best knowledge of the Borrower and the other Credit  Parties,  threatened
by or against the Company or any of its Subsidiaries, including the Borrower, or
against any of its or their  respective  properties or revenues (a) with respect
to the  Credit  Documents  or any Loan or any of the  transactions  contemplated
hereby, or (b) which, if adversely  determined,  would reasonably be expected to
have a Material Adverse Effect.

     6.7 Investment Company Act.

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

     6.8 Federal Regulations.

     No part of the proceeds of any Extension of Credit  hereunder  will be used
directly  or  indirectly  for any  purpose  which  violates,  or which  would be
inconsistent  with,  the  provisions  of Regulation G, T, U or X of the Board of
Governors of the Federal  Reserve  System as now and from time to time hereafter
in effect. The Company and its Subsidiaries,  including the Borrower, taken as a
group do not own "margin stock" except as identified in the financial statements
referred to in Section 6.1 and the aggregate  value of all "margin  stock" owned
by the Company and its Subsidiaries  taken as a group does not exceed 25% of the
value of their assets.

                                       52

<PAGE>

     6.9 ERISA.

     Neither a Reportable Event nor an "accumulated  funding deficiency" (within
the  meaning of Section  412 of the Code or Section  302 of ERISA) has  occurred
during the five-year  period prior to the date on which this  representation  is
made or deemed made with respect to any Plan,  and each Plan has complied in all
material  respects with the applicable  provisions of ERISA and the Code, except
to the extent that any such occurrence or failure to comply would not reasonably
be  expected  to have a Material  Adverse  Effect.  No  termination  of a Single
Employer  Plan  has  occurred  resulting  in any  liability  that  has  remained
underfunded,  and no Lien in favor of the PBGC or a Plan has arisen, during such
five-year  period which would  reasonably be expected to have a Material Adverse
Effect.  The present value of all accrued  benefits  under each Single  Employer
Plan  (based on those  assumptions  used to fund such  Plans) did not, as of the
last annual  valuation  date prior to the date on which this  representation  is
made or deemed  made,  exceed the value of the assets of such Plan  allocable to
such accrued benefits by an amount which, as determined in accordance with GAAP,
would  reasonably  be expected to have a Material  Adverse  Effect.  Neither the
Company nor any Commonly Controlled Entity is currently subject to any liability
for a complete  or partial  withdrawal  from a  Multiemployer  Plan which  would
reasonably be expected to have a Material Adverse Effect.

     6.10 Environmental Matters.

     Except to the extent that all of the following, in the aggregate, would not
reasonably be expected to have a Material Adverse Effect:

          (a) To the  best  knowledge  of the  Borrower  and  the  other  Credit
     Parties,  the facilities and  properties  owned,  leased or operated by the
     Company or any of its  Subsidiaries  (the  "Properties") do not contain any
     Materials of Environmental  Concern in amounts or concentrations  which (i)
     constitute a violation of, or (ii) could give rise to liability  under, any
     Environmental Law.

          (b) To the  best  knowledge  of the  Borrower  and  the  other  Credit
     Parties,  the  Properties  and  all  operations  at the  Properties  are in
     compliance,  and have in the last five  years  been in  compliance,  in all
     material respects with all applicable  Environmental  Laws, and there is no
     contamination  at,  under or  about  the  Properties  or  violation  of any
     Environmental  Law with respect to the Properties or the business  operated
     by the Borrower or any of its Subsidiaries (the "Business").

          (c) Neither the Borrower nor any of its  Subsidiaries has received any
     notice  of  violation,  alleged  violation,  non-compliance,  liability  or
     potential  liability  regarding  environmental  matters or compliance  with
     Environmental  Laws with regard to any of the  Properties  or the Business,
     nor do the Borrower nor the other Credit  Parties have  knowledge or reason
     to believe that any such notice will be received or is being threatened.

                                       53

<PAGE>

          (d) To the  best  knowledge  of the  Borrower  and  the  other  Credit
     Parties,  Materials of  Environmental  Concern have not been transported or
     disposed of from the  Properties  in  violation  of, or in a manner or to a
     location which could give rise to liability  under any  Environmental  Law,
     nor have any Materials of  Environmental  Concern been generated,  treated,
     stored or disposed of at, on or under any of the  Properties  in  violation
     of, or in a manner that could give rise to liability  under, any applicable
     Environmental Law.

          (e) No judicial proceeding or governmental or administrative action is
     pending or, to the knowledge of the Borrower and the other Credit  Parties,
     threatened,  under  any  Environmental  Law to  which  the  Company  or any
     Subsidiary,  including  the  Borrower,  is or will be named as a party with
     respect  to the  Properties  or the  Business,  nor are there  any  consent
     decrees or other decrees,  consent orders,  administrative  orders or other
     orders, or other administrative or judicial requirements  outstanding under
     any Environmental Law with respect to the Properties or the Business.

          (f) To the  best  knowledge  of the  Borrower  and  the  other  Credit
     Parties,  there has been no release or threat of  release of  Materials  of
     Environmental Concern at or from the Properties, or arising from or related
     to the operations of the Company or any Subsidiary, including the Borrower,
     in  connection  with the  Properties  or otherwise in  connection  with the
     Business, in violation of or in amounts or in a manner that could give rise
     to liability under Environmental Laws.

     6.11 Use of Proceeds.

     The Loans  hereunder may be used solely for  acquisitions,  certain  senior
debt prepayment (including redemption of the 12% Senior Notes due 2000), capital
expenditures,   working  capital  and  other  general  corporate   purposes  not
prohibited by this Credit Agreement.

     6.12 Subsidiaries.

     Set  forth  on  Schedule  6.12  is a  complete  and  accurate  list  of all
Subsidiaries of the Company and the Borrower as of the Closing Date. Information
on the attached Schedule  includes state of incorporation;  the number of shares
of each class of capital stock or other equity interests outstanding; the number
and percentage of outstanding  shares of each class of stock; and the number and
effect, if exercised, of all outstanding options, warrants, rights of conversion
or purchase and similar rights.  The outstanding  capital stock and other equity
interests  of  all  such   Subsidiaries  is  validly  issued,   fully  paid  and
non-assessable  and is owned,  free and clear of all Liens.  The Company and the
Borrower will provide an updated  Schedule 6.12 to the Agent quarterly as needed
to reflect changes. Reaffirmation of the representations set out in this Section
6.12 after the Closing Date shall be on the basis of the  information  contained
in the most recently delivered Schedule 6.12 provided to the Agent hereunder.

                                       54

<PAGE>

     6.13 Taxes.

     Each of the Company  and its  Subsidiaries,  including  the  Borrower,  has
filed, or caused to be filed, all material tax returns  (Federal,  state,  local
and  foreign)  required to be filed and paid all taxes  shown  thereon to be due
(including  interest  and  penalties)  and  has  paid  all  other  taxes,  fees,
assessments and other governmental  charges (including mortgage recording taxes,
documentary  stamp taxes and intangibles  taxes) owing (or necessary to preserve
any Liens in favor of the Lenders) by them,  except for such taxes (i) which are
not yet  delinquent  or (ii) as are being  contested in good faith and by proper
proceedings,  and  against  which  adequate  reserves  are being  maintained  in
accordance with GAAP. Except as otherwise disclosed in the financial  statements
delivered  pursuant to Section  6.1,  the  Company is not aware of any  proposed
material tax assessments  against it or any of its  Subsidiaries,  including the
Borrower.

     6.14 Solvency.

     The Company and its Subsidiaries, including the Borrower, both collectively
and  individually,  is and, after  execution of this Credit  Agreement and after
giving effect to the Indebtedness and Guarantee  Obligations  incurred hereunder
and the other  transactions  contemplated  hereby,  including  the  transactions
described in subsections 5.1(c) and 5.1(d), will be Solvent.

                                    SECTION 7

                              AFFIRMATIVE COVENANTS

     The Company and the Borrower  hereby covenant and agree that on the Closing
Date, and thereafter for so long as this Credit Agreement is in effect and until
the Revolving  Commitments  have  terminated,  no Note remains  outstanding  and
unpaid and the  Obligations,  together with  interest,  Commitment  Fees and all
other amounts owing to the Agent or any Lender hereunder,  are paid in full, the
Borrower shall,  and in the case of subsections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 and
7.10 shall cause each of its Subsidiaries, to:

     7.1 Financial Statements.

     Furnish to the Agent and each of the Lenders:

          (a) Annual  Financial  Statements.  As soon as  available,  but in any
     event  within  90 days  after  the end of each  fiscal  year of each of the
     Company and the Borrower,  a copy of the consolidated  balance sheet of the
     Company or the Borrower,  as appropriate,  and its respective  consolidated
     Subsidiaries as at the end of such fiscal year and the related consolidated
     statements of income and retained earnings and of cash flows of the Company
     or  the  Borrower,   as  appropriate,   and  its  respective   consolidated
     Subsidiaries for such year,  audited by KPMG Peat Marwick LLP or other firm
     of  independent  certified  public  accountants  of  nationally  recognized
     standing  reasonably  acceptable to the Required Lenders,  setting forth in
     each case in comparative  form the figures for the previous year,  reported
     on  without  a "going  concern"  or like  qualification  or  exception,  or
     qualification  indicating  that the scope of the audit  was  inadequate  to
     permit  such  independent  certified  public  accountants  to certify  such
     financial statements without such qualification; and

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<PAGE>

          (b) Quarterly  Financial  Statements.  As soon as available and in any
     event  within  45 days  after  the end of each of the  first  three  fiscal
     quarters  of  each of the  Company  and the  Borrower,  a  company-prepared
     consolidated balance sheet of the Company or the Borrower,  as appropriate,
     and its respective  consolidated  Subsidiaries as at the end of such period
     and related company-prepared statements of income and retained earnings and
     of cash flows for the  Company or the  Borrower,  as  appropriate,  and its
     respective consolidated  Subsidiaries for such quarterly period and for the
     portion of the fiscal year ending with such  period,  in each case  setting
     forth in comparative form consolidated figures for the corresponding period
     or  periods of the  preceding  fiscal  year  (subject  to normal  recurring
     year-end audit adjustments).

all such  financial  statements  to be  complete  and  correct  in all  material
respects in accordance with GAAP (subject, in the case of interim statements, to
normal  recurring  year-end audit  adjustments) and to be prepared in reasonable
detail  and,  in the  case of the  annual  and  quarterly  financial  statements
provided in accordance  with  subsections  (a) and (b) above, in accordance with
GAAP applied  consistently  throughout the periods  reflected therein (except as
approved by such  accountants  or Responsible  Officer,  as the case may be, and
disclosed  therein)  and  further  accompanied  by  a  description  of,  and  an
estimation of the effect on the financial  statements on account of, a change in
the application of accounting principles as provided in Section 1.3.

     7.2 Certificates; Other Information.

     Furnish to the Agent and each of the Lenders:

          (a)  concurrently  with  the  delivery  of  the  financial  statements
     referred to in subsection  7.1(a) above, a certificate  of the  independent
     certified public accountants reporting on such financial statements stating
     that in making the examination necessary therefor no knowledge was obtained
     of (i) any  Default  or Event  of  Default,  except  as  specified  in such
     certificate,  and (ii) any  material  difference  (other than  intercompany
     transactions   which  eliminate  in  the  consolidation  of  the  Company's
     financial  statements) between the financial  statements of the Company and
     its  Subsidiaries  and the  financial  statements  of the  Borrower and its
     Subsidiaries, except as specified in such certificate;

          (b)  concurrently  with  the  delivery  of  the  financial  statements
     referred  to in  Sections  7.1(a)  and 7.1(b)  above,  a  certificate  of a
     Responsible Officer stating that, to the best of such Responsible Officer's
     knowledge, the Company or the Borrower, as appropriate,  during such period
     observed or  performed in all material  respects all of its  covenants  and
     other  agreements,  and satisfied in all material  respects  every material
     condition, contained in this Credit Agreement to be observed, performed or

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<PAGE>

     satisfied  by it,  and  that  such  Responsible  Officer  has  obtained  no
     knowledge  of any Default or Event of Default  except as  specified in such
     certificate  and,  in the  case of the  Borrower,  such  certificate  shall
     include the calculation required to indicate compliance with Section 7.9;

          (c) within thirty days after the same are sent,  copies of all reports
     (other than those otherwise  provided pursuant to subsection 7.1) and other
     financial  information  which the Borrower sends to its  stockholders,  and
     within  thirty  days  after the same are  filed,  copies  of all  financial
     statements and  non-confidential  reports which the Company may make to, or
     file with,  the  Securities  and Exchange  Commission  or any  successor or
     analogous Governmental Authority;

          (d) promptly,  such additional  financial and other information as the
     Agent, on behalf of any Lender, may from time to time reasonably request.

     7.3 Payment of Loans.

     Pay,  discharge or otherwise  satisfy at or before  maturity or before they
become  delinquent,  as the case may be, in accordance  with  industry  practice
(subject,  where  applicable,  to  specified  grace  periods)  all its  material
obligations of whatever  nature and any  additional  costs that are imposed as a
result  of  any  failure  to  so  pay,   discharge  or  otherwise  satisfy  such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable,  in conformity  with GAAP with respect thereto have been provided
on the books of the Company or the Borrower,  as appropriate,  or its respective
Subsidiaries, as the case may be.

     7.4 Conduct of Business and Maintenance of Existence.

     Continue to engage in business of the same general type as now conducted by
it on the date hereof and, except as permitted by Section 8.4,  preserve,  renew
and  keep in full  force  and  effect  its  corporate  existence  and  take  all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal  conduct of its  business;  comply with all  Contractual
Obligations  and  Requirements of Law applicable to it except to the extent that
failure to comply therewith would not, in the aggregate, have a Material Adverse
Effect.

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<PAGE>

     7.5 Maintenance of Property; Insurance.

     Keep all  material  property  useful and  necessary in its business in good
working order and condition  (ordinary  wear and tear  excepted);  maintain with
financially  sound  and  reputable  insurance  companies  insurance  on all  its
material  property  in at least such  amounts and against at least such risks as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to the Agent, upon written request, full
information as to the insurance carried; provided, however, that the Company and
its Subsidiaries,  including the Borrower,  may maintain self insurance plans to
the extent companies of similar size and in similar businesses do so.

     7.6 Inspection of Property; Books and Records; Discussions.

     Keep proper  books of records  and account in which full,  true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and  transactions  in relation to its  businesses and  activities;  and
permit,  during regular business hours and upon reasonable  notice by the Agent,
the  Agent to visit and  inspect  any of its  properties  and  examine  and make
abstracts from any of its books and records  (other than materials  protected by
the  attorney-client  privilege and materials  which the Company or the Borrower
may not disclose without violation of a confidentiality  obligation binding upon
it) at any  reasonable  time and as often as may  reasonably be desired,  and to
discuss the business,  operations,  properties and financial and other condition
of the Company or the Borrower, as appropriate,  and its respective Subsidiaries
with officers and employees of the Company or the Borrower, as appropriate,  and
its  respective   Subsidiaries   and  with  its  independent   certified  public
accountants.

     7.7 Notices.

     Give notice to the Agent (which shall promptly transmit such notice to each
Lender) of:

          (a) immediately  (and in any event within two (2) Business Days) after
     the  Company  or the  Borrower  knows or has  reason to know  thereof,  the
     occurrence of any Default or Event of Default;

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<PAGE>

          (b) promptly,  any default or event of default  under any  Contractual
     Obligation  of the  Company  or the  Borrower  or any of  their  respective
     Subsidiaries, which would reasonably be expected to have a Material Adverse
     Effect;

          (c) promptly, any litigation, or any investigation or proceeding known
     to the  Company  or the  Borrower,  affecting  the  Company or any of their
     respective  Subsidiaries,   including  the  Borrower  which,  if  adversely
     determined, would reasonably be expected to have a Material Adverse Effect;

          (d) as soon as  possible  and in any event  within  30 days  after the
     Company  or the  Borrower  knows or has  reason  to know  thereof:  (i) the
     occurrence or expected  occurrence of any Reportable  Event with respect to
     any Plan,  a  failure  to make any  required  contribution  to a Plan,  the
     creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
     or the termination, Reorganization or Insolvency of, any Multiemployer Plan
     or (ii) the institution of proceedings or the taking of any other action by
     the  PBGC  or  the  Borrower  or  any  Commonly  Controlled  Entity  or any
     Multiemployer Plan with respect to the withdrawal from, or the terminating,
     Reorganization or Insolvency of, any Plan;

          (e)  promptly  (and in any event  within  thirty  (30)  days)  after a
     transaction  which  gives  rise  to  a  material   difference  (other  than
     intercompany  transactions  which  eliminate  in the  consolidation  of the
     Company's financial  statements)  between the financial  information of the
     Company and its Subsidiaries and the financial  information of the Borrower
     and its Subsidiaries; and

          (f) promptly, any other development or event which would reasonably be
     expected to have a Material Adverse Effect.

Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible  Officer setting forth details of the occurrence referred to therein
and  stating  what  action the  Company or the  Borrower  proposes  to take with
respect thereto.

     7.8 Environmental Laws.

          (a) Comply in all material respects with, and ensure compliance in all
     material  respects  by all  tenants  and  subtenants,  if  any,  with,  all
     applicable  Environmental  Laws  and  obtain  and  comply  in all  material
     respects  with and  maintain,  and ensure that all  tenants and  subtenants
     obtain and comply in all material  respects with and maintain,  any and all
     licenses,  approvals,  notifications,  registrations or permits required by
     applicable  Environmental  Laws except to the extent that  failure to do so
     would not reasonably be expected to have a Material Adverse Effect;

          (b) Conduct and complete  all  investigations,  studies,  sampling and
     testing,  and all  remedial,  removal  and  other  actions  required  under
     Environmental  Laws and promptly  comply in all material  respects with all
     lawful orders and  directives  of all  Governmental  Authorities  regarding
     Environmental  Laws except to the extent that the same are being  contested
     in  good  faith  by  appropriate  proceedings  and  the  pendency  of  such
     proceedings  would not  reasonably  be expected to have a Material  Adverse
     Effect; and

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<PAGE>

          (c) Defend, indemnify and hold harmless the Agent and the Lenders, and
     their  respective  employees,  agents,  officers  and  directors,  from and
     against  any  and  all  claims,  demands,  penalties,  fines,  liabilities,
     settlements,  damages,  costs and expenses of whatever kind or nature known
     or unknown, contingent or otherwise, arising out of, or in any way relating
     to  the  violation  of,   noncompliance   with  or  liability   under,  any
     Environmental  Law applicable to the operations of the Company,  any of its
     Subsidiaries,  including the Borrower,  or the  Properties,  or any orders,
     requirements  or  demands  of  Governmental  Authorities  related  thereto,
     including, without limitation, reasonable attorney's and consultant's fees,
     investigation  and  laboratory  fees,   response  costs,  court  costs  and
     litigation  expenses,  except to the extent that any of the foregoing arise
     out of the gross  negligence  or willful  misconduct  of the party  seeking
     indemnification  therefor.  The agreements in this paragraph  shall survive
     repayment of the Notes and all other amounts payable hereunder.

     7.9 Financial Covenants.

          (a) Fixed Charge Coverage  Ratio.  There shall be maintained as of the
     end of each fiscal  quarter a Fixed Charge  Coverage Ratio of not less than
     1.5:1.0.

          (b)  Consolidated  Funded Debt Ratio.  There shall be maintained as of
     the end of each  fiscal  quarter a  Consolidated  Funded  Debt Ratio of not
     greater than 3.0:1.0.

          (c) Consolidated Net Worth. There shall be maintained as of the end of
     each  fiscal  quarter  a  Consolidated   Net  Worth  of  at  least  85%  of
     Consolidated  Net Worth at December 31, 1997 as shown on the annual audited
     financial  statements of the Borrower as of such date;  provided,  however,
     that  the  minimum  Consolidated  Net  Worth  required  hereunder  shall be
     increased  (but not  decreased)  on the last day of each  fiscal year by an
     amount equal to (i) 50% of Consolidated Net Income for the fiscal year then
     ended  beginning with fiscal year 1998  (including  the effect,  if any, of
     extraordinary losses relating to the redemption of the 12% Senior Notes due
     2000) and (ii) 50% of the Net Proceeds from any Equity Transaction.

     7.10 Additional Subsidiary Guarantors.

     Where  Domestic  Subsidiaries  of the Company which are not Credit  Parties
hereunder (the "Non-Guarantor  Subsidiaries")  shall at any time (the "Threshold
Requirement"):

          (i) in any instance for any such Non-Guarantor Subsidiary, have assets
     in excess of $5,000,000, or

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<PAGE>

          (ii)  in  the  aggregate  for  all  such  Non-Guarantor  Subsidiaries,
     constitute more than fifteen  percent (15%) of consolidated  assets for the
     Consolidated Group,

then the  Company  shall  within 90 days (A) notify the Agent  thereof and cause
such Domestic Subsidiary or Subsidiaries to become a Guarantor by execution of a
Joinder  Agreement,  such that  immediately  after  joinder as a Guarantor,  the
remaining Non-Guarantor Subsidiaries shall not in any instance, or collectively,
exceed the Threshold  Requirement,  and (B) deliver with the Joinder  Agreement,
supporting  resolutions,   incumbency  certificates,   corporate  formation  and
organizational documentation and opinions of counsel as the Agent may reasonably
request.

                                    SECTION 8

                               NEGATIVE COVENANTS

     Each of the Credit Parties hereby  covenants and agrees that on the Closing
Date,  and  thereafter  for so long as this Agreement is in effect and until the
Revolving  Commitments have terminated,  no Note remains  outstanding and unpaid
and the  Obligations,  together  with  interest,  Commitment  Fees and all other
amounts  owing  to the  Agent or any  Lender  hereunder,  are paid in full,  the
Borrower shall, and shall cause each of its Subsidiaries, to:

     8.1 Indebtedness.

     The Borrower  will not,  nor will it permit any  Subsidiary  to,  contract,
create, incur, assume or permit to exist any Indebtedness, except:

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

          (b) Indebtedness  existing as of the Closing Date as referenced in the
     financial   statements   referenced  in  Section  5.1  (and  set  out  more
     specifically in Schedule  8.1(b)) and renewals,  refinancings or extensions
     thereof in a principal  amount not in excess of that  outstanding as of the
     date of such renewal, refinancing or extension;

          (c) Indebtedness incurred after the Closing Date consisting of Capital
     Leases or Indebtedness incurred to provide all or a portion of the purchase
     price  or  cost of  construction,  expansion  or  improvement  of an  asset
     provided  that (i) such  Indebtedness  when  incurred  shall not exceed the
     purchase  price  or  cost  of  construction  of  such  asset;  (ii) no such
     Indebtedness  shall be refinanced  for a principal  amount in excess of the
     principal balance  outstanding thereon at the time of such refinancing plus
     reasonable costs and expenses;  and (iii) the total aggregate amount of all
     such Capital Leases and Indebtedness of the Borrower and its  Subsidiaries,
     as a group, shall not exceed $4,000,000 at any time outstanding;

          (d)  Unsecured  intercompany  Indebtedness  between a Credit Party and
     another Credit Party;

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<PAGE>

          (e) Indebtedness and obligations  owing under interest rate protection
     agreements and currency  protection  agreements  and commodity  purchase or
     option  agreements  entered into in order to manage existing or anticipated
     interest  rate,  exchange  rate  or  commodity  price  risks  and  not  for
     speculative purposes;

          (f) Subordinated  Indebtedness,  the terms of subordination  and other
     terms and  provisions of which are  acceptable  to the Required  Lenders in
     their discretion;

          (g)  other   Indebtedness  of  the  Borrower  which  does  not  exceed
     $10,000,000 in the aggregate at any time outstanding.

     8.2 Liens.

     The Borrower  will not,  nor will it permit any  Subsidiary  to,  contract,
create,  incur,  assume or permit to exist any Lien with  respect  to any of its
property  or  assets  of  any  kind  (whether  real  or  personal,  tangible  or
intangible),  whether  now owned or  hereafter  acquired,  except for  Permitted
Liens.

     8.3 Nature of Business.

     The  Borrower  will not,  nor will it permit any  Subsidiary  to, alter the
character of its business in any material  respect from that conducted as of the
Closing Date.

     8.4 Consolidation, Merger, Sale or Purchase of Assets.

     The Borrower will not, nor will it permit any Subsidiary to:

          (a) Enter into a transaction of merger or consolidation, except

               (i) a Credit Party may be a party to a  transaction  of merger or
          consolidation  with another  Credit  Party,  provided  that (A) if the
          Borrower is a party thereto, it is the surviving  corporation , (B) if
          a Guarantor is a party  thereto,  a Guarantor  shall be the  surviving
          corporation  or  the  surviving   corporation   shall  be  a  Domestic
          Subsidiary  and shall become a Guarantor  hereunder  as an  Additional
          Credit Party pursuant to Section 7.10 concurrently therewith,  and (C)
          no Default or Event of Default shall exist either immediately prior to
          or immediately after giving effect thereto; and

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<PAGE>

               (ii) a Credit Party may be a party to a transaction  of merger or
          consolidation with any other Person,  provided that (A) the provisions
          of  Section  7.10  regarding   joinder  of  certain   Subsidiaries  as
          Additional  Credit  Parties  hereunder  shall be complied with, (B) no
          Default or Event of Default shall exist either immediately prior to or
          immediately  after giving effect  thereto,  and (C) the  provisions of
          Section 8.4(c) shall be complied with.

          (b) Sell,  lease,  transfer or otherwise  dispose of assets,  property
     and/or operations (including any sale-leaseback transaction,  but excluding
     Specified  Sales),  except  for any such  sale,  lease,  transfer  or other
     disposition for fair value in the reasonable determination of the Borrower,
     so long as

               (i)  no  Default  or  Event  of  Default   shall  exist,   either
          immediately prior to or immediately after giving effect thereto, and

               (ii) no more  than 25% of the  gross  consideration  received  in
          connection  therewith  shall consist of  Non-Investment  Grade debt or
          equity interests.

     without the prior written  consent of the Required  Lenders  (which consent
     shall not be unreasonably withheld or delayed).

          (c) Acquire all or any portion of the capital stock or other ownership
     interest in any Person which is not a Subsidiary or all or any  substantial
     portion of the assets,  property and/or operations of a Person which is not
     a  Subsidiary,  without the prior written  consent of the Required  Lenders
     (which consent shall not be unreasonably withheld or delayed), unless

               (i) in the  case of an  acquisition  of  capital  stock  or other
          ownership  interest,  if after giving effect  thereto such Person will
          not be a Subsidiary,  then such acquisition will not cause a violation
          of Section 8.5;

               (ii) in the  case of an  acquisition  of  capital  stock or other
          ownership interest, if after giving effect thereto such Person will be
          a Subsidiary,  or in the case of an  acquisition  of assets,  property
          and/or operations, then

                    (A) the  Board  of  Directors  of the  Person  which  is the
               subject of the acquisition shall have approved the acquisition;

                    (B) the Person,  division,  operations or property  which is
               the subject of the acquisition is in a reasonably related line of
               business to that of the Borrower,

                    (C) no Default or Event of Default  would exist after giving
               effect thereto on a Pro Forma Basis; and

                    (D) the cost of any such  acquisition  (or series of related
               transactions) shall not exceed $50,000,000 in any instance.

          (d) in the case of the Company and the Borrower,  wind-up or dissolve,
     whether  voluntarily  or  involuntarily  (or  suffer  to  permit  any  such
     liquidation or dissolution).

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<PAGE>

     8.5 Advances, Investments and Loans.

     Except as otherwise permitted hereunder, the Borrower will not, nor will it
permit any  Subsidiary  to, lend money or extend  credit or make advances to any
Person,  or purchase or acquire any stock,  obligations or securities of, or any
other  interest in, or make any capital  contribution  to, any Person except for
Permitted Investments.

     8.6 Transactions with Affiliates.

     Except as  permitted  in  subsection  (v) of the  definition  of  Permitted
Investments,  the Borrower will not, nor will it permit any Subsidiary to, enter
into any transaction or series of  transactions,  whether or not in the ordinary
course of business, with any officer, director,  shareholder or Affiliate (other
than a  Credit  Party)  other  than on terms  and  conditions  substantially  as
favorable as would be obtainable in a comparable arm's-length transaction with a
Person other than an officer,  director,  shareholder or Affiliate (other than a
Credit Party).

     8.7 Ownership of Subsidiaries.

     The Borrower will not, nor will it permit any Subsidiary  to, create,  form
or acquire a Subsidiary,  unless any such Domestic  Subsidiary shall comply with
the provisions of Section 7.10 or the investment in any such Foreign  Subsidiary
shall constitute a Permitted Investment.

     8.8 Fiscal Year.

     The Borrower  will not, nor will it permit any  Subsidiary  to,  change its
fiscal year, except with the prior written consent of the Agent.

     8.9 Prepayments of Indebtedness, etc.

     The Borrower will not, nor will it permit any Subsidiary to,

          (a) amend or modify,  or permit the amendment or modification  of, any
     of the terms of subordination or other terms or provisions  relating to any
     Subordinated  Debt  with  an  aggregate   principal  amount  in  excess  of
     $1,000,000  if such  amendment or  modification  is  reasonably  adverse to
     interests  of the  Lenders  hereunder  as  holders of  indebtedness  senior
     thereto as determined by Required Lenders in their discretion;

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<PAGE>

          (b) make (or give  notice  with  respect  thereto)  any  voluntary  or
     optional  payment or  prepayment or  redemption  or  acquisition  for value
     (including,  without  limitation,  by way of depositing money or securities
     with the trustee with respect  thereto before due for the purpose of paying
     when due) or exchange of any senior  Indebtedness for borrowed money or any
     Subordinated  Debt,  except for (i) any senior  Indebtedness  for  borrowed
     money with an aggregate principal amount not in excess of $1,000,000 or any
     Subordinated  Debt  with an  aggregate  principal  amount  not in excess of
     $1,000,000,  or (ii) the payment on or  redemption  of the 12% Senior Notes
     due 2000;

          (c) make any prepayment, redemption, acquisition for value (including,
     without  limitation,  by way of  depositing  money or  securities  with the
     trustee  with  respect  thereto  before due for the  purpose of paying when
     due),  refund,  refinance  or  exchange  of any  Subordinated  Debt with an
     aggregate principal amount in excess of $1,000,000.

As used herein,  "Subordinated  Debt" means any  indebtedness for borrowed money
which by its terms is, or upon the  happening  of  certain  events  may  become,
subordinated in right of payment to the Obligations  hereunder and other amounts
owing hereunder or in connection herewith.

     8.10 Dividends.

     The Borrower will not make or pay, nor will it permit any non-wholly  owned
Subsidiary  to make or pay,  any  Dividend,  unless  (i) no  Default or Event of
Default  shall exist either  immediately  prior to or  immediately  after giving
effect thereto,  and (ii) the Borrower shall have  demonstrated  compliance with
the financial covenants set out in Section 7.9 on a Pro Forma Basis after giving
effect thereto, except that notwithstanding the foregoing, so long as no Default
or Event of Default shall exist either than immediately  prior to or immediately
after giving effect  thereto,  the Borrower may pay (a) cash  dividends of up to
$1,000,000 to the Company for the purpose of repurchasing  the Company's  equity
securities in any fiscal year pursuant to the Company's  employee  benefit plans
and (b) cash  dividends of up to  $2,500,000 to the Company for the sole purpose
of providing  loans to officers,  directors,  employees or Affiliates to pay, on
behalf of such persons, any withholding taxes due and payable by such persons as
a result of the vesting of  securities  received by such  persons in  connection
with the exchange of certain  debentures  at the time of the  Company's  initial
public offering.

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                                    SECTION 9

                                EVENTS OF DEFAULT

     9.1 Events of Default.

     An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default):

          (a) The Borrower  shall fail to pay any principal on any Note when due
     in accordance with the terms thereof or hereof;  or the Borrower shall fail
     to  reimburse  the  Issuing  Lender  for any LOC  Obligations  when  due in
     accordance  with the terms  hereof;  or the Borrower  shall fail to pay any
     interest on any Note or any fee or other amount payable  hereunder when due
     in  accordance  with the terms  thereof  or hereof and such  failure  shall
     continue unremedied for five (5) Business Days (or any Guarantor shall fail
     to pay on the Guaranty in respect of any of the  foregoing or in respect of
     any other Guarantee Obligations thereunder); or

          (b) Any representation or warranty made or deemed made by the Company,
     the  Borrower or other  Credit  Party  herein or in any of the other Credit
     Documents or which is contained in any  certificate,  document or financial
     or other  statement  furnished at any time under or in connection with this
     Credit Agreement shall prove to have been incorrect, false or misleading in
     any material respect on or as of the date made or deemed made; or

          (c)  The  Company  or the  Borrower  shall  (i)  default  in  the  due
     performance  or  observance of Section 7.9, or (ii) default in any material
     respect in the  observance or  performance  of any other term,  covenant or
     agreement   contained  in  this  Agreement  (other  than  as  described  in
     subsections  9.1(a) or 9.1(c)(i)  above),  and such default shall  continue
     unremedied for a period of 30 days or more; or

          (d) The Borrower or any of its  Subsidiaries  shall (i) default in any
     payment of  principal  of or interest on any  Indebtedness  (other than the
     Notes) in a principal  amount  outstanding  of at least  $10,000,000 in the
     aggregate  for the Borrower and its  Subsidiaries  or in the payment by any
     Credit  Party of any matured  Guarantee  Obligation  in a principal  amount
     outstanding  of at least  $10,000,000 in the aggregate for the Borrower and
     its  Subsidiaries  beyond the  period of grace (not to exceed 30 days),  if
     any,  provided in the instrument or agreement under which such Indebtedness
     or Guarantee  Obligation was created;  or (ii) default in the observance or
     performance  of any  other  agreement  or  condition  relating  to any such
     Indebtedness in a principal amount  outstanding of at least  $10,000,000 in
     the aggregate for the Borrower and its Subsidiaries or Guarantee Obligation
     in a principal amount  outstanding of at least $10,000,000 in the aggregate
     for the Borrower and its  Subsidiaries  or contained in any  instrument  or
     agreement  evidencing,  securing  or relating  thereto,  or any other event
     shall occur or condition  exist, the effect of which default or other event
     or  condition  is to cause,  or to permit  the  holder or  holders  of such
     Indebtedness or beneficiary or beneficiaries  of such Guarantee  Obligation
     (or a trustee or agent on behalf of such  holder or holders or  beneficiary
     or  beneficiaries)  to cause,  with the giving of notice if required,  such
     Indebtedness  to become due prior to its stated  maturity or such Guarantee
     Obligation to become payable; or

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<PAGE>

          (e)  (i)  The  Company  or  any  of its  Subsidiaries,  including  the
     Borrower, shall commence any case, proceeding or other action (A) under any
     existing or future law of any jurisdiction,  domestic or foreign,  relating
     to bankruptcy, insolvency,  reorganization or relief of debtors, seeking to
     have an order  for  relief  entered  with  respect  to it,  or  seeking  to
     adjudicate  it  a  bankrupt  or  insolvent,   or  seeking   reorganization,
     arrangement, adjustment, winding-up, liquidation,  dissolution, composition
     or other relief with respect to it or its debts, or (B) seeking appointment
     of a receiver,  trustee,  custodian,  conservator or other similar official
     for it or for all or any substantial part of its assets,  or the Company or
     any Subsidiary, including the Borrower, shall make a general assignment for
     the benefit of its creditors;  or (ii) there shall be commenced against the
     Company or any Subsidiary,  including the Borrower, any case, proceeding or
     other action of a nature  referred to in clause (i) above which (A) results
     in the entry of an order for relief or any such adjudication or appointment
     or (B) remains  undismissed,  undischarged  or unbonded  for a period of 60
     days;  or (iii)  there  shall  be  commenced  against  the  Company  or any
     Subsidiary,  including  the  Borrower,  any case,  proceeding  other action
     seeking  issuance  of a warrant  of  attachment,  execution,  distraint  or
     similar  process  against all or any  substantial  part of its assets which
     results in the entry of an order for any such  relief  which shall not have
     been vacated, discharged, or stayed or bonded pending appeal within 60 days
     from the entry thereof;  or (iv) the Company or any  Subsidiary,  including
     the Borrower,  shall take any action in  furtherance  of, or indicating its
     consent to, approval of, or  acquiescence  in, any of the acts set forth in
     clause (i),  (ii),  or (iii) above;  or (v) the Company or any  Subsidiary,
     including  the  Borrower,  shall  generally  not, or shall be unable to, or
     shall admit in writing its  inability to, pay its debts as they become due;
     or

          (f) One or more  judgments  or decrees  shall be entered  against  the
     Borrower or any of its Subsidiaries  involving in the aggregate a liability
     (to the extent not paid when due or covered by  insurance) of $2,000,000 or
     more and all such  judgments  or  decrees  shall  not  have  been  paid and
     satisfied,  vacated, discharged,  stayed or bonded pending appeal within 45
     days from the entry thereof; or

          (g) (i) Any Person shall engage in any  "prohibited  transaction"  (as
     defined in Section 406 of ERISA or Section 4975 of the Code)  involving any
     Plan, (ii) any "accumulated  funding deficiency" (as defined in Section 302
     of ERISA),  whether or not waived,  shall exist with respect to any Plan or
     any Lien in favor of the PBGC or a Plan  shall  arise on the  assets of the
     Company or any Commonly  Controlled Entity,  (iii) a Reportable Event shall
     occur with  respect  to, or  proceedings  shall  commence to have a trustee
     appointed,  or a trustee shall be appointed, to administer or to terminate,
     any  Single  Employer  Plan,  which  Reportable  Event or  commencement  of
     proceedings or  appointment  of a Trustee is, in the reasonable  opinion of
     the Required Lenders,  likely to result in the termination of such Plan for
     purposes  of Title  IV of  ERISA,  (iv)  any  Single  Employer  Plan  shall
     terminate  for purposes of Title IV of ERISA,  (v) the Company,  any of its
     Subsidiaries or any Commonly  Controlled Entity shall, or in the reasonable
     opinion  of the  Required  Lenders  is likely to,  incur any  liability  in
     connection with a withdrawal from, or the Insolvency or Reorganization  of,
     any  Multiemployer  Plan or (vi) any other similar event or condition shall
     occur or exist  with  respect to a Plan;  and in each case in  clauses  (i)
     through (vi) above,  such event or condition,  together with all other such
     events or conditions, if any, could have a Material Adverse Effect; or

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<PAGE>

          (h) Either (i) a "person" or a "group" (within the meaning of Sections
     13(d) and  14(d)(2)  of the  Securities  Exchange  Act of 1934  other  than
     members of  management of the Company as of the Closing Date and other than
     Citicorp Venture Capital,  Ltd. or its subsidiaries or portfolio companies)
     becomes  the  "beneficial  owner"  (as  defined  in Rule  13d-3  under  the
     Securities  Exchange Act of 1934) of more than 30% of the then  outstanding
     voting stock of the Company or (ii) a majority of the Board of Directors of
     the Company shall consist of individuals who are not Continuing  Directors;
     "Continuing  Director"  means,  as of any  date  of  determination,  (A) an
     individual who on the date two years prior to such determination date was a
     member of the Company's  Board of Directors and (B) any new Director  whose
     nomination  for election by the  Company's  shareholders  was approved by a
     vote of at least 75% of the Directors  then still in office who either were
     Directors on the date two years prior to such  determination  date or whose
     nomination for election was previously so approved; or

          (i) The Guaranty or any  provision  thereof  shall cease to be in full
     force and effect or any Credit  Party or any Person  acting by or on behalf
     of any Credit Party shall deny or disaffirm any Credit Party's  obligations
     under the Guaranty; or

          (j) Any  other  Credit  Document  shall  fail to be in full  force and
     effect or to give the Agent  and/or the  Lenders  the  security  interests,
     liens,  rights,  powers and  privileges  purported  to be  created  thereby
     (except  as such  documents  may be  terminated  or no  longer in force and
     effect in accordance with the terms thereof,  other than those  indemnities
     and provisions which by their terms shall survive);

then, and in any such event, (A) if such event is an Event of Default  specified
in  paragraph  (e)  above,   automatically   the  Revolving   Commitments  shall
immediately  terminate and the Loans and LOC Obligations  (with accrued interest
thereon),  and all other amounts under the Credit Documents  (including  without
limitation  the maximum amount of all  contingent  liabilities  under Letters of
Credit) shall immediately  become due and payable,  and (B) if such event is any
other Event of Default,  either or both of the  following  actions may be taken:
(i) the Agent may,  and upon the written  request of the Required  Lenders,  the
Agent shall, by notice to the Borrower  declare the Commitments to be terminated
forthwith,  whereupon the Commitments shall immediately terminate;  and (ii) the
Agent may, or upon the written request of the Required Lenders, the Agent shall,
by notice of  default to the  Borrower,  declare  the Loans and LOC  Obligations
(with accrued interest thereon) and all other amounts owing under this Agreement
and the Notes to be due and payable  forthwith and direct the Borrower to pay to
the Agent cash  collateral as security for the LOC  Obligations  for  subsequent
drawings under then outstanding Letters of Credit an amount equal to the maximum
amount of which may be drawn under Letters of Credit then outstanding, whereupon
the same shall immediately become due and payable.  Except as expressly provided
above in this Section 9, presentment,  demand,  protest and all other notices of
any kind are hereby expressly waived.

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<PAGE>

                                   SECTION 10

                                AGENCY PROVISIONS

     10.1 Appointment.

     Each  Lender  hereby   designates   and  appoints   NationsBank,   N.A.  as
administrative agent (in such capacity as Agent hereunder,  the "Agent") of such
Lender to act as specified herein and the other Credit Documents,  and each such
Lender hereby  authorizes  the Agent as the agent for such Lender,  to take such
action on its behalf under the provisions of this Credit Agreement and the other
Credit  Documents  and to exercise  such  powers and perform  such duties as are
expressly  delegated  by the terms  hereof  and of the other  Credit  Documents,
together  with  such  other  powers  as  are  reasonably   incidental   thereto.
Notwithstanding  any provision to the contrary elsewhere herein and in the other
Credit  Documents,  the  Agent  shall not have any  duties or  responsibilities,
except  those  expressly  set  forth  herein  and  therein,   or  any  fiduciary
relationship   with  any   Lender,   and  no   implied   covenants,   functions,
responsibilities,  duties,  obligations or  liabilities  shall be read into this
Credit Agreement or any of the other Credit Documents,  or shall otherwise exist
against the Agent.  The provisions of this Section are solely for the benefit of
the Agent and the Lenders and none of the Credit  Parties  shall have any rights
as a third  party  beneficiary  of the  provisions  hereof.  In  performing  its
functions and duties under this Credit Agreement and the other Credit Documents,
the Agent shall act solely as agent of the Lenders and does not assume and shall
not be deemed to have assumed any obligation or  relationship of agency or trust
with or for the Borrower or any other Credit Party.

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<PAGE>

     10.2 Delegation of Duties.

     The Agent may execute any of its duties hereunder or under the other Credit
Documents  by or through  agents or  attorneys-in-fact  and shall be entitled to
advice of counsel  concerning all matters  pertaining to such duties.  The Agent
shall not be  responsible  for the  negligence  or  misconduct  of any agents or
attorneys-in-fact selected by it with reasonable care.

     10.3 Exculpatory Provisions.

     Neither the Agent nor any of its officers,  directors,  employees,  agents,
attorneys-in-fact  or  affiliates  shall be (i) liable  for any action  lawfully
taken  or  omitted  to be  taken by it or such  Person  under  or in  connection
herewith or in connection with any of the other Credit Documents (except for its
or  such  Person's  own  gross  negligence  or  willful  misconduct),   or  (ii)
responsible  in any manner to any of the Lenders for any  recitals,  statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the Agent under
or in connection  herewith or in connection with the other Credit Documents,  or
enforceability or sufficiency  herefor of any of the other Credit Documents,  or
for any failure of the  Borrower or the other  Credit  Parties to perform  their
obligations  hereunder or thereunder.  The Agent shall not be responsible to any
Lender   for   the   effectiveness,   genuineness,   validity,   enforceability,
collectability  or  sufficiency  of this Credit  Agreement,  or any of the other
Credit Documents or for any representations,  warranties, recitals or statements
made  herein or  therein  or made by the  Borrower  or any  Credit  Party in any
written or oral statement or in any financial or other statements,  instruments,
reports, certificates or any other documents in connection herewith or therewith
furnished  or made by the Agent to the  Lenders or by or on behalf of the Credit
Parties to the Agent or any Lender or be required to  ascertain or inquire as to
the  performance  or  observance  of any of the terms,  conditions,  provisions,
covenants  or  agreements  contained  herein or  therein or as to the use of the
proceeds of the Loans or of the  existence or possible  existence of any Default
or Event of Default or to inspect the properties, books or records of the Credit
Parties.

     10.4 Reliance on Communications.

     The  Agent  shall be  entitled  to rely,  and shall be fully  protected  in
relying,  upon any note,  writing,  resolution,  notice,  consent,  certificate,
affidavit,  letter,  cablegram,  telegram,  telecopy, telex or teletype message,
statement,  order or other document or conversation believed by it to be genuine
and  correct  and to have  been  signed,  sent or made by the  proper  Person or
Persons and upon advice and  statements  of legal  counsel  (including,  without
limitation,  counsel  to  the  Borrower  or any of  the  other  Credit  Parties,
independent  accountants and other experts selected by the Agent with reasonable
care). The Agent may deem and treat the Lenders as the owner of their respective
interests  hereunder  for all purposes  unless a written  notice of  assignment,
negotiation  or  transfer  thereof  shall  have  been  filed  with the  Agent in
accordance with Section  11.6(d).  The Agent shall be fully justified in failing
or refusing to take any action  under this Credit  Agreement or under any of the
other Credit  Documents unless it shall first receive such advice or concurrence
of the Required Lenders as it deems appropriate or it shall first be indemnified
to its  satisfaction  by the Lenders  against any and all  liability and expense
which may be incurred by it by reason of taking or  continuing  to take any such
action.  The  Agent  shall in all  cases be fully  protected  in  acting,  or in
refraining from acting,  hereunder or under any of the other Credit Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 11.1, all the Lenders) and such request and any action taken
or  failure  to act  pursuant  thereto  shall be  binding  upon all the  Lenders
(including their successors and assigns).

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<PAGE>

     10.5 Notice of Default.

     The Agent shall not be deemed to have knowledge or notice of the occurrence
of any  Default or Event of  Default  hereunder  unless  the Agent has  received
notice  from a Lender  or a  Credit  Party  referring  to the  Credit  Document,
describing  such  Default or Event of Default and stating  that such notice is a
"notice of default."  In the event that the Agent  receives  such a notice,  the
Agent shall give prompt notice thereof to the Lenders. The Agent shall take such
action with respect to such  Default or Event of Default as shall be  reasonably
directed by the Required Lenders.

     10.6 Non-Reliance on Agent and Other Lenders.

     Each Lender  expressly  acknowledges  that neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any  representations  or  warranties  to it and that no act by the  Agent or any
affiliate thereof hereinafter taken,  including any review of the affairs of the
Company or the Borrower,  shall be deemed to constitute  any  representation  or
warranty by the Agent to any Lender. Each Lender represents to the Agent that it
has,  independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed  appropriate,  made its
own  appraisal  of and  investigation  into the  business,  assets,  operations,
property, financial and other conditions,  prospects and creditworthiness of the
Borrower  and the other  Credit  Parties  and made its own  decision to make its
Loans  hereunder  and  enter  into  this  Credit  Agreement.  Each  Lender  also
represents that it will,  independently  and without  reliance upon the Agent or
any other Lender,  and based on such documents and  information as it shall deem
appropriate at the time,  continue to make its own credit  analysis,  appraisals
and decisions in taking or not taking action under this Credit Agreement, and to
make  such  investigation  as it deems  necessary  to  inform  itself  as to the
business,  assets,  operations,   property,   financial  and  other  conditions,
prospects  and  creditworthiness  of the Borrower and the other Credit  Parties.
Except  for  notices,  reports  and other  documents  expressly  required  to be
furnished  to the Lenders by the Agent  hereunder,  the Agent shall not have any
duty  or  responsibility  to  provide  any  Lender  with  any  credit  or  other
information concerning the business,  operations, assets, property, financial or
other conditions,  prospects or  creditworthiness  of the Borrower and the other
Credit  Parties  which may come into the  possession  of the Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.

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<PAGE>

     10.7 Indemnification.

     The Lenders  agree to  indemnify  the Agent in its capacity as such (to the
extent not  reimbursed by the Borrower and the other Credit  Parties and without
limiting the  obligation of the Borrower and the other Credit Parties to do so),
ratably according to their respective  Revolving  Commitment  Percentages (or if
the Revolving  Commitments have expired or been  terminated,  in accordance with
the  respective   principal  amounts  of  outstanding  Loans  and  Participation
Interests  of  the  Lenders),   from  and  against  any  and  all   liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses  or  disbursements  of any  kind  whatsoever  which  may  at  any  time
(including  without  limitation at any time  following the  termination  of this
Credit  Agreement) be imposed on,  incurred by or asserted  against the Agent in
its  capacity  as such in any way  relating  to or  arising  out of this  Credit
Agreement or the other  Credit  Documents or any  documents  contemplated  by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Agent under or in  connection  with any of
the  foregoing;  provided  that no Lender shall be liable for the payment of any
portion of such liabilities,  obligations,  losses, damages, penalties, actions,
judgments,  suits,  costs,  expenses or  disbursements  resulting from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall,  in the opinion of the Agent,  be  insufficient  or
become impaired,  the Agent may call for additional  indemnity and cease, or not
commence,  to do the acts indemnified against until such additional indemnity is
furnished.

     10.8 Agent in its Individual Capacity.

     The Agent and its  affiliates  may make loans to, accept  deposits from and
generally  engage in any kind of business  with the Borrower or any other Credit
Party as though the Agent were not Agent  hereunder.  With  respect to its Loans
and  Participation  Interests,  the Agent  shall have the same rights and powers
under this Credit  Agreement  as any Lender and may  exercise the same as though
they were not Agent,  and the terms  "Lender" and  "Lenders"  shall  include the
Agent in its individual capacity.

     10.9 Successor Agent.

     The Agent  may,  at any time,  resign  upon 20 days  written  notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders,  and shall have accepted such appointment,  within 30 days
after the notice of resignation,  as appropriate,  then the retiring Agent shall
select a successor  Agent  provided  such  successor is a Lender  hereunder or a
commercial  bank organized  under the laws of the United States of America or of
any  State  thereof  and  has  a  combined  capital  and  surplus  of  at  least
$500,000,000.  Upon the acceptance of any  appointment  as Agent  hereunder by a
successor,  such successor  Agent shall  thereupon  succeed to and become vested
with all the rights,  powers,  privileges and duties of the retiring Agent,  and
the retiring Agent shall be discharged from its duties and obligations as Agent,
as appropriate,  under this Credit  Agreement and the other Credit Documents and
the provisions of this Section 10.9 shall inure to its benefit as to any actions
taken  or  omitted  to be  taken by it while  it was  Agent  under  this  Credit
Agreement.

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     10.10  Termination  of  Securities  Interests.  On the  Closing  Date,  the
security interests granted pursuant to the Security Agreement dated November 21,
1995 given by the  Borrower,  the Company and the other  Guarantors to the Agent
(the "Security  Agreement"),  and any joinders thereto,  will be released by the
Agent and the Lenders and the Security  Agreement shall terminate.  The Agent is
authorized  and directed to take any action as is necessary  or  appropriate  to
give effect to the foregoing sentence.

                                   SECTION 11

                                  MISCELLANEOUS

     11.1 Amendments and Waivers.

     Neither this Credit  Agreement,  nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended,  supplemented,
waived or modified except in accordance with the provisions of this  subsection.
The Required Lenders may, or, with the written consent of the Required  Lenders,
the Agent  may,  from time to time,  (a) enter  into with the  Borrower  written
amendments,  supplements  or  modifications  hereto  and  to  the  other  Credit
Documents for the purpose of adding any  provisions to this Credit  Agreement or
the other Credit  Documents or (b) waive,  on such terms and  conditions  as the
Required Lenders may specify in such instrument, any of the requirements of this
Credit  Agreement  or the other  Credit  Documents  or any  Default  or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment,  waiver,  supplement,  modification  or release  shall (i) reduce the
amount or  extend  the  scheduled  date of  maturity  of any Loan or Note or any
installment  thereon,  or reduce the stated  rate of any  interest or fee or any
other  amounts  payable   hereunder   (other  than  interest  at  the  increased
post-default  rate) or extend  the  scheduled  date of any  payment  thereof  or
increase  the amount or extend the  expiration  date of any  Lender's  Revolving
Commitment,  in each case  without the written  consent of each Lender  directly
affected  thereby,  or  (ii)  amend,  modify  or  waive  any  provision  of this
subsection  or modify the  percentage  specified in the  definition  of Required
Lenders,  or consent to the assignment or transfer by the Borrower of any of its
rights and  obligations  under this Credit  Agreement,  in each case without the
written  consent  of all the  Lenders,  or (iii)  amend,  modify  or  waive  any
provision of Section 3.5, 3.6, 3.7, 3.8, 3.9, 3.10,  3.14,  9.1(a),  11.4, 11.5,
11.6 or 11.7  without  the  written  consent of each  Lender  directly  affected
thereby,  or (iv) amend, modify or waive any provision of Section 10 without the
written  consent of the then Agent, or (v) release all or  substantially  all of
the  Guarantors  without the  written  consent of all of the  Lenders.  Any such
waiver,  any such  amendment,  supplement or  modification  and any such release
shall  apply  equally  to each of the  Lenders  and  shall be  binding  upon the
Borrower,  the other  Credit  Parties,  the  Lenders,  the Agent and all  future
holders of the Notes. In the case of any waiver,  the Borrower,  the Lenders and
the Agent shall be restored to their former  position and rights  hereunder  and
under the  outstanding  Loans and Notes  and  other  Credit  Documents,  and any
Default  or  Event  of  Default  waived  shall be  deemed  to be  cured  and not
continuing;  but no such waiver shall extend to any  subsequent or other Default
or Event of Default, or impair any right consequent thereon.

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     11.2 Notices.

     Except as  otherwise  provided  in Section  2, all  notices,  requests  and
demands to or upon the  respective  parties  hereto to be effective  shall be in
writing  (including by  telecopy),  and,  unless  otherwise  expressly  provided
herein,  shall be deemed to have been duly given or made (i) when  delivered  by
hand,  (ii) when  transmitted  via  telecopy  (or other  facsimile  device) on a
Business  Day  between  the hours of 8:30 A.M.  and 7:00  P.M.  (EST or EDT,  as
appropriate)  (or on the following  Business Day if sent after 7:00 P.M.) to the
number set out  herein,  (iii) the day  following  the day on which the same has
been delivered prepaid to a reputable national overnight air courier service, or
(iv) the  third  Business  Day  following  the day on which  the same is sent by
certified  or  registered  mail,  postage  prepaid,  in each case,  addressed as
follows in the case of the Borrower and the Agent,  and as set forth on Schedule
11.2 in the case of the  Lenders,  or to such other  address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:

     The Credit Parties:     c/o Cort Furniture Rental Corporation
                             4401 Fair Lakes Court, Suite 300
                             Fairfax, Virginia 22033-3839
                             Attn:  Frances Ann Ziemniak
                             Phone: (703) 968-8554
                             Fax:   (703) 968-8503

     The Agent:              NationsBank, N.A.
                             101 N. Tryon Street
                             Independence Center, 15th Floor
                             NC1-001-15-04
                             Charlotte, North Carolina 28255
                             Attn:  Ret Taylor
                             Phone: (704) 388-1108
                             Fax:   (704) 388-9436

                             with a copy to:

                             NationsBank, N.A.
                             1111 East Main Street
                             4th Floor Pavilion
                             Richmond, VA 23219
                             Attn:  Marty Mitchell
                             Phone: (804) 788-2285
                             Fax:   (804) 788-3669

                                       74

<PAGE>

     11.3 No Waiver; Cumulative Remedies.

     No failure to exercise and no delay in exercising, on the part of the Agent
or any Lender, any right,  remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege  hereunder  preclude any other or further exercise thereof or
the  exercise  of any other  right,  remedy,  power or  privilege.  The  rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

     11.4 Survival of Representations and Warranties.

     All  representations  and  warranties  made  hereunder and in any document,
certificate or statement  delivered  pursuant  hereto or in connection  herewith
shall survive the execution and delivery of this Credit  Agreement and the Notes
and the  making  of the  Loans,  provided  that  all  such  representations  and
warranties shall terminate on the date upon which the Revolving Commitments have
been  terminated  and all amounts owing  hereunder and under any Notes have been
paid in full.

     11.5 Payment of Expenses and Taxes.

     The  Borrower  agrees  (a)  to pay or  reimburse  the  Agent  for  all  its
reasonable  out-of-pocket  costs and expenses  incurred in  connection  with the
preparation and execution of, and any amendment,  supplement or modification to,
the Credit Documents and any other documents prepared in connection  herewith or
therewith,   and  the  consummation  and   administration  of  the  transactions
contemplated  hereby  and  thereby,   together  with  the  reasonable  fees  and
disbursements  of counsel to the Agent,  (b) to pay or reimburse each Lender and
the Agent  for all its  costs  and  expenses  incurred  in  connection  with the
enforcement or preservation of any rights under this Credit Agreement, the Notes
and any such other documents, including, without limitation, the reasonable fees
and  disbursements  of  counsel  to the  Agent  and to  the  Lenders  (including
reasonable  allocated  costs of in-house legal counsel),  and (c) on demand,  to
pay,  indemnify,  and hold each Lender and the Agent  harmless from, any and all
recording  and  filing  fees and any and all  liabilities  with  respect  to, or
resulting from any delay in paying,  stamp,  excise and other similar taxes,  if
any,  which may be payable or determined  to be payable in  connection  with the
execution  and  delivery of, or  consummation  or  administration  of any of the
transactions  contemplated by, or any amendment,  supplement or modification of,
or any waiver or consent  under or in respect of, the Credit  Documents  and any
such other documents,  and (d) to pay,  indemnify,  and hold each Lender and the
Agent  and  their  Affiliates  harmless  from  and  against,  any and all  other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements of any kind or nature  whatsoever with respect
to the execution, delivery,  enforcement,  performance and administration of the
Credit  Documents and any such other  Documents and the use, or proposed use, of
proceeds  of the  Loans  (all  the  foregoing,  collectively,  the  "indemnified
liabilities");   provided,  however,  that  the  Borrower  shall  not  have  any
obligation  hereunder  to the  Agent or any  Lender,  as the  case may be,  with
respect to  indemnified  liabilities  arising from (i) the gross  negligence  or
willful  misconduct  of the Agent or any such  Lender,  as the case may be, (ii)
legal proceedings  commenced against the Agent or any Lender by any other Lender
or the  Agent  or its  participants  or  (iii)  a  breach  of any of the  Credit
Documents  by the Lenders.  The  agreements  in this  subsection  shall  survive
repayment of the Loans, Notes and all other amounts payable hereunder.

                                       75

<PAGE>

     11.6 Successors and Assigns; Participations; Purchasing Lenders.

          (a) This  Credit  Agreement  shall be  binding  upon and  inure to the
     benefit of the Borrower,  the Lenders, the Agent, all future holders of the
     Notes and their respective successors and assigns, except that the Borrower
     may not  assign or  transfer  any of its rights or  obligations  under this
     Credit  Agreement or the other Credit  Documents  without the prior written
     consent of each Lender.

          (b) Any Lender may, in the ordinary  course of its commercial  banking
     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 Revolving
     Commitment of such Lender,  or any other interest of such Lender hereunder.
     In the event of any such sale by a Lender of  participating  interests to a
     Participant,  such Lender's  obligations under this Credit Agreement to the
     other parties to this Credit Agreement shall remain unchanged,  such Lender
     shall remain solely  responsible for the performance  thereof,  such Lender
     shall remain the holder of any such Note for all purposes under this Credit
     Agreement, and the Borrower and the Agent shall continue to deal solely and
     directly  with such  Lender in  connection  with such  Lender's  rights and
     obligations under this Credit Agreement.  No Lender shall transfer or grant
     any participation  under which the Participant shall have rights to approve
     any  amendment  to or waiver of this Credit  Agreement  or any other Credit
     Document except to the extent such amendment or waiver would (i) extend the
     scheduled maturity of any Loan or Note or any installment  thereon in which
     such Participant is participating,  or reduce the stated rate or extend the
     time of payment of interest or Fees thereon  (except in  connection  with a
     waiver of  interest  at the  increased  post-default  rate) or  reduce  the
     principal  amount  thereof,  or  increase  the amount of the  Participant's
     participation  over the amount thereof then in effect (it being  understood
     that a waiver of any  Default or Event of Default  shall not  constitute  a
     change  in the terms of such  participation,  and that an  increase  in any
     Revolving  Commitment  or Loan shall be  permitted  without  consent of any
     Participant if the Participant's participation is not increased as a result
     thereof), (ii) release all or substantially all of the Guarantors, or (iii)
     consent to the  assignment or transfer by the Borrower of any of its rights
     and  obligations  under  this  Credit  Agreement.  In the  case of any such
     participation,  the Participant shall not have any rights under this Credit
     Agreement or any of the other Credit  Documents (the  Participant's  rights
     against such Lender in respect of such  participation to be those set forth
     in the  agreement  executed  by such  Lender  in favor  of the  Participant
     relating  thereto) and all amounts payable by the Borrower  hereunder shall
     be determined as if such Lender had not sold such  participation,  provided
     that each Participant shall be entitled to the benefits of subsections 3.6,
     3.7, 3.8, 3.9 and 11.5 with respect to its  participation  in the Revolving
     Commitments and the Loans outstanding from time to time; provided,  that no
     Participant  shall be entitled to receive  any greater  amount  pursuant to
     such  subsections  than the  transferor  Lender would have been entitled to
     receive in respect of the amount of the  participation  transferred by such
     transferor Lender to such Participant had no such transfer occurred.

                                       76

<PAGE>

          (c) Any Lender may, in the ordinary  course of its commercial  banking
     business and in accordance  with applicable law, at any time sell or assign
     to any Lender or any  affiliate  thereof  and with the consent of the Agent
     (which  consent  shall  not be  unreasonably  withheld),  to  one  or  more
     additional banks or financial institutions  ("Purchasing Lenders"),  all or
     any part of its rights and obligations  under this Credit Agreement and the
     Notes in minimum  amounts of $5,000,000  (or, if less, the entire amount of
     such  Lender's  obligations)  if the  Purchasing  Lender  is  not a  Lender
     hereunder,  or with no minimum amount if the Purchasing  Lender is a Lender
     hereunder,  pursuant to a Commitment Transfer Supplement,  executed by such
     Purchasing Lender, such transferor Lender (and, in the case of a Purchasing
     Lender  that is not then a Lender  or an  affiliate  thereof  so long as no
     Event of Default has  occurred and is  continuing,  by the Borrower and the
     Agent),  and delivered to the Agent for its acceptance and recording in the
     Register. Upon such execution, delivery, acceptance and recording, from and
     after the Transfer  Effective  Date specified in such  Commitment  Transfer
     Supplement,  (x) the Purchasing  Lender  thereunder shall be a party hereto
     and, to the extent provided in such Commitment  Transfer  Supplement,  have
     the  rights  and  obligations  of  a  Lender  hereunder  with  a  Revolving
     Commitment as set forth therein,  and (y) the transferor  Lender thereunder
     shall, to the extent provided in such Commitment  Transfer  Supplement,  be
     released from its obligations under this Credit Agreement (and, in the case
     of a Commitment  Transfer  Supplement covering all or the remaining portion
     of  a  transferor   Lender's  rights  and  obligations  under  this  Credit
     Agreement,  such transferor Lender shall cease to be a party hereto).  Such
     Commitment  Transfer  Supplement  shall  be  deemed  to amend  this  Credit
     Agreement to the extent,  and only to the extent,  necessary to reflect the
     addition  of  such  Purchasing  Lender  and  the  resulting  adjustment  of
     Revolving  Commitment   Percentages  arising  from  the  purchase  by  such
     Purchasing Lender of all or a portion of the rights and obligations of such
     transferor Lender under this Credit Agreement and the Notes. On or prior to
     the  Transfer   Effective  Date  specified  in  such  Commitment   Transfer
     Supplement,  the Borrower, at its own expense, shall execute and deliver to
     the Agent in exchange for the Note  delivered to the Agent pursuant to such
     Commitment  Transfer  Supplement a new Note to the order of such Purchasing
     Lender  in an  amount  equal  to the  Revolving  Commitment  assumed  by it
     pursuant to such Commitment  Transfer Supplement and, unless the transferor
     Lender has not retained a Revolving Commitment hereunder, a new Note to the
     order  of the  transferor  Lender  in an  amount  equal  to  the  Revolving
     Commitment  retained  by it  hereunder.  Such new Note  shall be dated  the
     Closing  Date and  shall  otherwise  be in the  form of the  Note  replaced
     thereby. The Note surrendered by the transferor Lender shall be returned by
     the Agent to the Borrower marked "canceled".

          (d) The Agent shall maintain at its address  referred to in subsection
     11.2 a copy of each Commitment  Transfer  Supplement  delivered to it and a
     register (the "Register") for the recordation of the names and addresses of
     the Lenders and the Revolving  Commitment  of, and principal  amount of the
     Loans owing to, each Lender from time to time.

                                       77

<PAGE>

     The entries in the Register shall be conclusive, in the absence of manifest
     error,  and the  Borrower,  the Agent and the Lenders may treat each Person
     whose name is  recorded in the  Register as the owner of the Loan  recorded
     therein for all purposes of this Credit  Agreement.  The Register  shall be
     available for  inspection  by the Borrower or any Lender at any  reasonable
     time and from time to time upon reasonable prior notice.

          (e) Upon its receipt of a Commitment Transfer Supplement executed by a
     transferor Lender and a Purchasing Lender (and, in the case of a Purchasing
     Lender that is not then a Lender or an affiliate  thereof,  by the Borrower
     and the Agent) together with payment to the Agent (by the transferor Lender
     or the Purchasing  Lender,  as agreed  between them) of a registration  and
     processing  fee of  $2,500  for  each  Purchasing  Lender  listed  in  such
     Commitment  Transfer  Supplement,  and the Notes subject to such Commitment
     Transfer  Supplement,  the Agent shall (i) accept such Commitment  Transfer
     Supplement,  (ii) record the information  contained therein in the Register
     and (iii) give prompt  notice of such  acceptance  and  recordation  to the
     Lenders and the Borrower.

          (f) The Borrower authorizes each Lender to disclose to any Participant
     or Purchasing Lender (each, a "Transferee") and any prospective  Transferee
     any and all financial  information in such Lender's  possession  concerning
     the Borrower and its Affiliates  which has been delivered to such Lender by
     or on behalf of the Borrower pursuant to this Credit Agreement or which has
     been delivered to such Lender by or on behalf of the Borrower in connection
     with such Lender's  credit  evaluation  of the Borrower and its  Affiliates
     prior to becoming a party to this Credit Agreement; in each case subject to
     subsection 11.14.

          (g) At the time of each assignment pursuant to this subsection 11.6 to
     a Person which is not already a Lender  hereunder and which is not a United
     States person (as such term is defined in Section  7701(a)(30) of the Code)
     for Federal  income tax  purposes,  the  respective  assignee  Lender shall
     provide to the  Borrower  and the Agent the  appropriate  Internal  Revenue
     Service  Forms (and,  if  applicable,  a U.S. Tax  Compliance  Certificate)
     described in Section 3.9.

          (h)  Nothing  herein  shall  prohibit  any  Lender  from  pledging  or
     assigning any of its rights under this Credit Agreement (including, without
     limitation,  any right to payment of principal and interest under any Note)
     to any Federal Reserve Bank in accordance with applicable laws.

                                       78

<PAGE>

     11.7 Adjustments; Set-off.

          (a) Each  Lender  agrees  that if any Lender (a  "benefitted  Lender")
     shall at any time  receive  any  payment  of all or part of its  Loans,  or
     interest  thereon,  or receive any collateral in respect  thereof  (whether
     voluntarily or involuntarily, by set-off, pursuant to events or proceedings
     of the nature  referred to in clause (e) of Section 9.1, or otherwise) in a
     greater  proportion than any such payment to or collateral  received by any
     other Lender,  if any, in respect of such other Lender' Loans,  or interest
     thereon,  such  benefitted  Lender  shall  purchase for cash from the other
     Lenders  a  participating  interest  in such  portion  of each  such  other
     Lender's Loan, or shall provide such other Lenders with the benefits of any
     such collateral,  or the proceeds  thereof,  as shall be necessary to cause
     such  benefitted  Lender to share the excess  payment or  benefits  of such
     collateral or proceeds ratably with each of the Lenders; provided, however,
     that if all or any portion of such excess payment or benefits is thereafter
     recovered from such  benefitted  Lender,  such purchase shall be rescinded,
     and the  purchase  price  and  benefits  returned,  to the  extent  of such
     recovery,  but without  interest.  The Borrower  agrees that each Lender so
     purchasing a portion of another  Lender's  Loans may exercise all rights of
     payment (including,  without limitation, rights of set-off) with respect to
     such  portion as fully as if such  Lender  were the  direct  holder of such
     portion.

          (b) In addition to any rights and remedies of the Lenders  provided by
     law (including,  without limitation,  other rights of set-off), each Lender
     shall have the right,  without  prior  notice to the  Borrower or any other
     Credit Party, any such notice being expressly waived by the Borrower or any
     other Credit  Party to the extent  permitted by  applicable  law,  upon the
     occurrence of any Event of Default, to setoff and appropriate and apply any
     and all  deposits  (general  or  special,  time or demand,  provisional  or
     final), in any currency, and any other credits,  indebtedness or claims, in
     any  currency,  in each  case  whether  direct  or  indirect,  absolute  or
     contingent,  matured or unmatured, at any time held or owing by such Lender
     or any branch or agency  thereof to or for the credit or the account of the
     Borrower or any other Credit Party,  or any part thereof in such amounts as
     such  Lender may elect,  against  and on  account  of the  obligations  and
     liabilities  of the  Borrower  or any  other  Credit  Party to such  Lender
     hereunder and claims of every nature and description of such Lender against
     the Borrower or any other Credit Party,  in any currency,  whether  arising
     hereunder,  under  the  Notes or under  any  documents  contemplated  by or
     referred  to herein or therein,  as such  Lender may elect,  whether or not
     such Lender has made any demand for payment and although such  obligations,
     liabilities and claims may be contingent or unmatured.  The aforesaid right
     of set-off  may be  exercised  by such Lender  against the  Borrower or any
     other  Credit  Party or  against  any  trustee  in  bankruptcy,  debtor  in
     possession,  assignee for the benefit of creditors,  receiver or execution,
     judgment or attachment  creditor of the Borrower or any other Credit Party,
     or against  anyone else  claiming  through or against  the  Borrower or any
     other Credit Party or any such trustee in bankruptcy, debtor in possession,
     assignee for the benefit of creditors,  receiver, or execution, judgment or
     attachment  creditor,  notwithstanding  the fact that such right of set-off
     shall not have been exercised by such Lender prior to the occurrence of any
     Event of Default.  Each Lender  agrees  promptly to notify the Borrower and
     the Agent  after any such  set-off  and  application  made by such  Lender;
     provided,  however,  that the failure to give such notice  shall not affect
     the validity of such set-off and application.

                                       79

<PAGE>

     11.8 Table of Contents and Section Headings.

     The table of contents and the Section and  subsection  headings  herein are
intended for  convenience  only and shall be ignored in  construing  this Credit
Agreement.

     11.9 Counterparts.

     This Credit Agreement may be executed by one or more of the parties to this
Credit  Agreement  on any  number  of  separate  counterparts,  and  all of said
counterparts  taken  together  shall be  deemed to  constitute  one and the same
instrument.  A set of the  copies  of this  Credit  Agreement  signed by all the
parties shall be lodged with the Borrower and the Agent.

     11.10 Severability.

         Any  provision  of  this  Credit   Agreement  which  is  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

                                       80

<PAGE>

     11.11 Integration.

     This Credit Agreement,  the Notes and the other Credit Documents  represent
the  agreement  of the  Borrower,  the other Credit  Parties,  the Agent and the
Lenders with respect to the subject  matter  hereof,  and there are no promises,
undertakings,  representations  or  warranties by the Agent,  the Borrower,  the
other Credit  Parties,  or any Lender  relative to the subject matter hereof not
expressly set forth or referred to herein or in the Notes.

     11.12 Governing Law.

     This Credit  Agreement and the Notes and the rights and  obligations of the
parties  under this Credit  Agreement  and the Notes  shall be governed  by, and
construed  and  interpreted  in accordance  with,  the law of the State of North
Carolina.

     11.13 Consent to Jurisdiction and Service of Process.

     All judicial  proceedings  brought against the Borrower or any other Credit
Party with respect to this Credit Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of North  Carolina,  and, by execution  and delivery of this Credit
Agreement, each of the Borrower and the other Credit Parties accepts, for itself
and in  connection  with its  properties,  generally  and  unconditionally,  the
non-exclusive  jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final  judgment  rendered  thereby in  connection  with this Credit
Agreement  from  which no appeal  has been  taken or is  available.  Each of the
Borrower and the other Credit Parties irrevocably agrees that all process in any
such  proceedings in any such court may be effected by mailing a copy thereof by
registered  or  certified  mail (or any  substantially  similar  form of  mail),
postage  prepaid,  to it at its address set forth in subsection  11.2 or at such
other address of which the Agent shall have been notified pursuant thereto, such
service being hereby  acknowledged  by the Borrower and the other Credit Parties
to be effective and binding  service in every respect.  The Borrower,  the other
Credit  Parties,  the Agent and the  Lenders  irrevocably  waive any  objection,
including,  without limitation, any objection to the laying of venue or based on
the grounds of forum non  conveniens  which it may now or hereafter  have to the
bringing  of any such action or  proceeding  in any such  jurisdiction.  Nothing
herein shall affect the right to serve process in any other manner  permitted by
law or shall  limit the right of any  Lender to bring  proceedings  against  the
Borrower or any other Credit Party in the court of any other jurisdiction.

                                       81

<PAGE>

     11.14 Confidentiality.

     The Agent and each of the Lenders  agrees that it will use its best efforts
not to  disclose  without the prior  consent of the  Company  (other than to its
employees,  Subsidiaries,  Affiliates, auditors or counsel or to another Lender)
any  information  with  respect to the  Company  and its  Subsidiaries  which is
furnished  pursuant to this Credit  Agreement,  any other Credit Document or any
documents  contemplated  by or  referred  to  herein  or  therein  and  which is
designated  by the  Company to the Lenders in writing as  confidential  or as to
which it is otherwise  reasonably clear such  information is not public,  except
that any Lender may disclose any such  information  (a) as has become  generally
available to the public other than by a breach of this subsection  11.14, (b) as
may be required or appropriate in any report,  statement or testimony  submitted
to any municipal,  state or federal  regulatory  body having or claiming to have
jurisdiction  over such  Lender or to the Federal  Reserve  Board or the Federal
Deposit Insurance  Corporation or the OCC or similar  organizations  (whether in
the United States or elsewhere) or their successors or the National  Association
of Insurance Commissioners, (c) as may be required or appropriate in response to
any summons or subpoena or any law,  order,  regulation or ruling  applicable to
such Lender,  or (d) to any  prospective  Participant  or assignee in connection
with any  contemplated  transfer  pursuant to Section  11.6,  provided that such
prospective  transferee  shall  have been made aware of this  Section  11.14 and
shall have  agreed to be bound by its  provisions  as if it were a party to this
Credit Agreement.

     11.15 Acknowledgments.

     Each of the Credit Parties hereby acknowledges that:

          (a) it has been advised by counsel in the  negotiation,  execution and
     delivery of each Credit Document;

          (b)  neither the Agent nor any Lender has any  fiduciary  relationship
     with or duty to the Credit  Parties  arising out of or in  connection  with
     this Credit  Agreement and the relationship  between Agent and Lenders,  on
     one hand, and the Credit Parties, on the other hand, in connection herewith
     is solely that of debtor and creditor; and

          (c) no joint  venture  exists  among the  Lenders  or among the Credit
     Parties and the Lenders.

     11.16 Waivers of Jury Trial.

     Each of the Credit  Parties,  the Agent and the Lenders hereby  irrevocably
and  unconditionally  waive, to the extent permitted by applicable law, trial by
jury in any legal action or proceeding  relating to this Credit Agreement or any
other Credit Document and for any counterclaim therein.


                  [Remainder of Page Intentionally Left Blank]

                                       82

<PAGE>

     IN WITNESS WHEREOF,  each of the parties hereto has caused a counterpart of
this Credit  Agreement to be duly  executed  and  delivered as of the date first
above written.

BORROWER:                               CORT FURNITURE RENTAL CORPORATION,
                                        a Delaware corporation

                                        By /s/ Frances Ann Ziemniak

                                        Title: Vice President, Finance, Chief
                                               Financial Officer and Secretary

GUARANTORS:
                                        CORT BUSINESS SERVICES CORPORATION,
                                        a Delaware corporation

                                        By /s/ Frances Ann Ziemniak

                                        Title: Vice President, Finance, Chief
                                               Financial Officer and Secretary
LENDERS:

                                        NATIONSBANK, N.A.,
                                        in its capacity as Agent and as
                                        a Lender

                                        By /s/ Marty V. Mitchell

                                        Title: Vice President


                                        FIRST UNION NATIONAL BANK

                                        By /s/ Frank S. Taulbact

                                        Title: Senior Vice President


                                        MELLON BANK, N.A.

                                        By /s/ George A. Hennessy

                                        Title: Vice President


                                        COMERICA BANK

                                        By /s/ Kimberly S. Kersten

                                        Title: Vice President


                                        CORESTATES BANK, N.A.

                                        By /s/ John D. Brady

                                        Title: Vice President


                                        THE FIRST NATIONAL BANK OF MARYLAND

                                        By /s/ Lauren D. Johnston

                                        Title: Vice President


                                        HIBERNIA NATIONAL BANK

                                        By /s/ Karen S. De Blieux

                                        Title: Senior Vice President


                                        THE SUMITOMO BANK, LTD.

                                        By /s/ James L. Hogan

                                        Title: Vice President and Manager


                                        THE SUMITOMO BANK, LTD.

                                        By /s/ Nancy Z. Reimann

                                        Title: Vice President

                                       83
<PAGE>

                                 Schedule 2.1(a)

                             Schedule of Lenders and
                              Revolving Commitments


<TABLE>
<CAPTION>
                                      Revolving    Revolving       LOC           LOC
                                      Committed   Commitment    Committed    Commitment
       Lender                           Amount    Percentage      Amount     Percentage
       ------                          --------   ----------     --------    ----------
<S>                                  <C>            <C>       <C>              <C>
NationsBank, N.A.                    $17,500,000    23.33%    $1,633,333.31    23.33%
Mellon Bank, N.A.                    $12,500,000    16.67%    $1,166,666.67    16.67%
First Union National Bank            $12,500,000    16.67%    $1,166,666.67    16.67%
Comerica Bank                        $ 6,500,000     8.67%    $  606,666.67     8.67%
CoreStates Bank, N.A.                $ 6,500,000     8.67%    $  606,666.67     8.67%
The First National Bank of Maryland  $ 6,500,000     8.67%    $  606,666.67     8.67%
Hibernia National Bank               $ 6,500,000     8.67%    $  606,666.67     8.67%
The Sumitomo Bank, Ltd.              $ 6,500,000     8.67%    $  606,666.67     8.67%
                                     -----------    -----     -------------    -----
                                     $75,000,000    100.0%    $7,000,000.00    100.0%
</TABLE>

<PAGE>

                               SCHEDULE 2.1(b)(i)

        Form of Borrowing Notice for Revolving Loans and Swingline Loans

                                                                          [Date]

NationsBank, N.A.,                          NationsBank, N.A.,
  as Agent under the Credit                   as Swingline Lender under the
  Agreement referred to below                 Credit Agreement referred to below
101 N. Tryon Street                         101 N. Tryon Street
Independence Center, 15th Floor             Independence Center, 15th Floor
NC1-001-15-04                               NC1-001-15-04
Charlotte, North Carolina 28255             Charlotte, North Carolina  28255

Attention:  Corporate Credit Support

Gentlemen:

     Pursuant  to  subsection  2.1(b)  or  2.2(b) of the  Credit  Agreement  (as
amended,  supplemented  or  otherwise  modified  from time to time,  the "Credit
Agreement")   dated  as  of  February  13,  1998  among  CORT  FURNITURE  RENTAL
CORPORATION,  a Delaware  corporation (the  "Borrower"),  CORT BUSINESS SERVICES
CORPORATION,   a  Delaware  corporation  (the  "Company")  and  certain  of  its
Subsidiaries as guarantors  (together with the Company,  the "Guarantors"),  the
banks and other  financial  institutions  from time to time parties thereto (the
"Lenders") and NationsBank,  N.A., as Agent for the Lenders, the Borrower hereby
requests that the following Revolving Loans or Swingline Loans be made on [date]
as follows (the "Proposed Borrowing"):

     Loan Requested:

          _______  Revolving Loan
          _______  Swingline Loan

     (1)  Total Amount of Loans............................     $

     (2)  Amount of (1) to be allocated
          to Eurodollar Loans..............................     $
          (REVOLVING LOANS ONLY)

     (3)  Amount of (1) to be allocated
          to Base Rate Loans...............................     $

     (4)  Interest  Periods and amounts to be allocated
          thereto in respect of Eurodollar Tranches
          (amounts must total (2)):

          (i)   one month..................................     $

          (ii)  two months.................................     $

          (iii) three months...............................     $

          (iv)  six months.................................     $

                Total Eurodollar Loans.....................     $

NOTE:  REVOLVING LOAN  BORROWINGS  MUST BE IN MINIMUM  AMOUNTS OF $3,000,000 AND
       $1,000,000  INCREMENTS IN EXCESS THEREOF IN THE CASE OF EURODOLLAR  LOANS
       AND $1,000,000 AND $1,000,000  INCREMENTS IN EXCESS THEREOF,  IN THE CASE
       OF BASE RATE LOANS.

<PAGE>

     Terms  defined in the Credit  Agreement  shall have the same  meanings when
used herein.

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

          (A)  the  representations  and  warranties  contained  in  the  Credit
     Agreement  and in the  other  Credit  Documents  are and  will be true  and
     correct in all material  respects,  both before and after giving  effect to
     the Proposed Borrowing and to the application of the proceeds thereof, with
     the same effect as though such representations and warranties had been made
     on and as of the date of such Proposed  Borrowing (it being understood that
     any representation or warranty which by its terms is made as of a specified
     date shall be required to be true and correct in all material respects only
     as of such specified date); and

          (B) no Default or Event of Default has occurred and is continuing,  or
     would result from such Proposed  Borrowing or from the  application  of the
     proceeds thereof.


                                           Very truly yours,




                                           CORT FURNITURE RENTAL CORPORATION


                                            By:

                                               Title:

<PAGE>

                                 SCHEDULE 2.1(f)

                             Form of Revolving Note

                                                               February __, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of  ______________________,  and its successors and assigns,  on or before
the Termination  Date to the office of the  Administrative  Agent in immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February __, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation


                                       By:
                                       Name:
                                       Title:

<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of  NATIONSBANK,  N.A., and its  successors and assigns,  on or before the
Termination  Date to the  office  of the  Administrative  Agent  in  immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of CORESTATES BANK, N.A., and its successors and assigns, on or before the
Termination  Date to the  office  of the  Administrative  Agent  in  immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of  COMERICA  BANK,  and its  successors  and  assigns,  on or before  the
Termination  Date to the  office  of the  Administrative  Agent  in  immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of HIBERNIA  NATIONAL BANK,  and its successors and assigns,  on or before
the Termination  Date to the office of the  Administrative  Agent in immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of SUMITOMO BANK,  LTD., and its successors and assigns,  on or before the
Termination  Date to the  office  of the  Administrative  Agent  in  immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of MELLON BANK,  N.A., and its  successors  and assigns,  on or before the
Termination  Date to the  office  of the  Administrative  Agent  in  immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of FIRST NATIONAL BANK OF MARYLAND,  and its successors and assigns, on or
before  the  Termination  Date to the  office  of the  Administrative  Agent  in
immediately available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 Revolving Note

                                                               February 13, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of FIRST UNION NATIONAL BANK, and its successors and assigns, on or before
the Termination  Date to the office of the  Administrative  Agent in immediately
available funds as provided in the Credit Agreement,

          (i) in the case of Revolving Loans, such Lender's Revolving  Committed
     Amount or, if less, the aggregate  unpaid principal amount of all Revolving
     Loans made by such Lender to the undersigned; and

          (ii) in the case of Swingline  Loans,  if such lender is the Swingline
     Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
     unpaid principal amount of all Swingline Loans made to the undersigned;

together  with  interest  thereon  at the rates and as  provided  in the  Credit
Agreement.

     This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of February 13, 1998 (as amended and modified,  the "Credit Agreement")
among CORT FURNITURE RENTAL CORPORATION, a Delaware corporation,  the Guarantors
and Lenders identified therein and NationsBank,  N.A., as Administrative  Agent.
Terms used but not otherwise  defined herein shall have the meanings provided in
the Credit Agreement.

     The  holder  may  endorse  and  attach a  schedule  to  reflect  borrowings
evidenced by this Note and all payments and prepayments  thereon;  provided that
any failure to endorse such  information  shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.

     Upon the occurrence of an Event of Default,  all amounts  evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement  without  presentment,  demand,  protest or notice of any kind, all of
which are waived by the  undersigned  Borrower.  In the event payment of amounts
evidenced by this Note is not made at any stated or  accelerated  maturity,  the
undersigned  Borrower agrees to pay, in addition to principal and interest,  all
costs of collection, including reasonable attorneys' fees.

     This Note and the Loans and  amounts  evidenced  hereby may be  transferred
only as provided in the Credit Agreement.

     This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.

     In WITNESS  WHEREOF,  the  undersigned  Borrower has caused this Note to be
duly executed as of the date first above written.

                                       CORT FURNITURE RENTAL CORPORATION,
                                       a Delaware corporation

                                       By: /s/ Frances A. Ziemniak
                                       Name: Frances A. Ziemniak
                                       Title: Vice President - Finance
                                              Chief Financial Officer and
                                              Secretary


<PAGE>

                                 SCHEDULE 2.2(a)

                           Existing Letters of Credit


<TABLE>
<CAPTION>
                                                          Outstanding
Issuing Bank     LC #    Beneficiary               Type      Amount       Issue Date   Expiry Date
------------     ----    -----------               ----      ------       ----------   -----------
<S>             <C>      <C>                        <C>   <C>              <C>           <C>
NationsBank    L900830   Hartford Fire Insurance    S     $1,822,795.00    12-18-95      12-18-98
NationsBank    L901050   American MFG Mutual        S     $  197,145.00    12-22-95      12-22-98
NationsBank    L901060   Home Insurance Co          S     $   96,457.00    12-22-95      12-22-98
NationsBank    L972034   Lumbermans Mutual          S     $  675,000.00    01-29-98      01-29-99
</TABLE>

<PAGE>

                                  SCHEDULE 3.2

           Form of Notice for Conversion/Extension of Revolving Loans

                                                                          [Date]

NationsBank, N.A.,
  as Agent under the Credit Agreement
  referred to below
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255

Attention:  Corporate Support Services

Gentlemen:

     Pursuant  to   subsection   3.2  of  the  Credit   Agreement  (as  amended,
supplemented  or otherwise  modified from time to time, the "Credit  Agreement")
dated as of  February  13,  1998  among CORT  FURNITURE  RENTAL  CORPORATION,  a
Delaware  corporation (the "Borrower"),  CORT BUSINESS SERVICES  CORPORATION,  a
Delaware  corporation  (the  "Company")  and  certain  of  its  Subsidiaries  as
guarantors  (together with the Company,  the "Guarantors"),  the banks and other
financial  institutions  from time to time parties  thereto (the  "Lenders") and
NationsBank,  N.A.,  as Agent for the  Lenders,  the  Borrower  hereby  requests
conversion  or extension of the following  Revolving  Loans be made on [date] as
follows (the "Proposed Conversion/Extension"):

     (1)  Total Amount of Loans to be
          converted/extended.......................................     $

     (2)  Amount of (1) to be allocated
          to Eurodollar Loans......................................     $

     (3)  Amount of (1) to be allocated
          to Base Rate Loans.......................................     $

     (4)  Interest Periods and amounts to be allocated thereto in
          respect of Eurodollar Tranches (amounts must total (2)):

          (i)   one month..........................................     $

          (ii)  two months.........................................     $

          (iii) three months.......................................     $

          (iv)  six months.........................................     $

                Total Eurodollar Loans.............................     $


NOTE:  EACH  AMOUNT  APPEARING  IN EACH  LINE  ABOVE  MUST BE AT LEAST  EQUAL TO
       $3,000,000 AND IN WHOLE MULTIPLES OF $1,000,000 IN EXCESS THEREOF

<PAGE>

     Terms  defined in the Credit  Agreement  shall have the same  meanings when
used herein.

     The undersigned hereby certifies that the following  statements are true on
the   date   hereof   and   will   be   true  on   the-date   of  the   Proposed
Conversion/Extension:

          (A)  the  representations  and  warranties  contained  in  the  Credit
     Agreement  and in the  other  Credit  Documents  are and  will be true  and
     correct in all material  respects,  both before and after giving  effect to
     the Proposed  Conversion/Extension  and to the  application of the proceeds
     thereof, with the same effect as though such representations and warranties
     had been made on and as of the date of such  Proposed  Conversion/Extension
     (it being understood that any representation or warranty which by its terms
     is made as of a specified  date shall be required to be true and correct in
     all material respects only as of such specified date); and

          (B) no Default or Event of Default has occurred and is continuing,  or
     would  result  from  such   Proposed   Conversion/Extension   or  from  the
     application of the proceeds thereof.


                                             Very truly yours,


                                             CORT FURNITURE RENTAL CORPORATION


                                              By:
                                                 Title:


<PAGE>

                                  SCHEDULE 3.10

                            Section 3.10 Certificate


     Reference is hereby made to the Credit Agreement,  dated as of February 13,
1998,  among CORT FURNITURE RENTAL  CORPORATION,  a Delaware  corporation,  (the
"Borrower"),  CORT BUSINESS SERVICES  CORPORATION,  a Delaware  corporation (the
"Company")  and certain of its  Subsidiaries,  as guarantors  (together with the
Company, the "Guarantors"),  the several banks and other financial  institutions
from  time to time  parties  to this  Agreement  (collectively,  the  "Lenders";
individually,  a  "Lender")  and as agent  for the  Lenders  hereunder  (in such
capacity, the "Agent") (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement").  Pursuant to the provisions of Section 3.10 of
the Credit Agreement,  the undersigned  hereby certifies that it is not a "bank"
as such term is used in Section  881(c)(3)(A)  of the  Internal  Revenue Code of
1986, as amended.


                                            (NAME OF LENDER]


                                            By:
                                               Name:
                                               Title:


<PAGE>

                                 SCHEDULE 5.1(g)

                Form of Certificate of Secretary of the Borrower


                             SECRETARY'S CERTIFICATE

     Pursuant  to  Section   5.1(g)  of  the  Credit   Agreement   (the  "Credit
Agreement"),  dated  as of  February  13,  1998,  among  CORT  FURNITURE  RENTAL
CORPORATION,  a Delaware  corporation (the  "Borrower"),  CORT BUSINESS SERVICES
CORPORATION,   a  Delaware  corporation  (the  "Company")  and  certain  of  its
Subsidiaries as guarantors  (together with the Company,  the "Guarantors"),  the
banks and other  financial  institutions  from time to time parties thereto (the
"Lenders")  and  NationsBank,  N.A., as agent for the Lenders (in such capacity,
the "Agent"), the undersigned ____________ of _________________ hereby certifies
as follows:

     1. Attached  hereto as Annex I is a true and complete  copy of  resolutions
duly adopted by the Board of Directors of ______________  on ___________  199__,
and such  resolutions  have not in any way been  rescinded  or modified and have
been in full force and effect  since their  adoption to and  including  the date
hereof and are now in full force and effect;  and such  resolutions are the only
corporate  proceedings  of  _____________________  now in force  relating  to or
affecting the matters referred to therein.

     2.  Attached  hereto as Annex II is a true and complete copy of the By-laws
of  _____________________ as in effect at all times since _______________ to and
including the date hereof.

     3. Attached hereto as Annex III is a true and complete copy of the Restated
Certificate of Incorporation of _____________________ and all amendments thereto
as in effect on the date hereof.

     4. The  following  person is now a duly  elected and  qualified  officer of
____________________________,  holding  the  office  indicated  next to his name
below,  and such officer has held such office with  ____________________  at all
times since  ___________  to and  including  the date hereof,  and the signature
appearing  opposite his name below is his true and genuine  signature,  and such
officer is duly authorized to execute and deliver on behalf of _____________ the
Credit  Agreement [and the Notes to be issued pursuant  thereto] and to act as a
Responsible  Officer  on  behalf  of  _____________________   under  the  Credit
Agreement:

Name                               Office                              Signature




<PAGE>

     IN WITNESS  WHEREOF,  the  undersigned  has  hereunto  set his/her name and
affixed the corporate seal of ______________________.


                                                 ____________________________ of
                                                 ________________________

                                                 (CORPORATE SEAL)

Date:  _______________, 199__


     I,  ________________,  _______________  of  ______________________,  hereby
certify that ______________,  whose genuine signature appears above, is, and has
been at all times since  ______________,  a duly  elected,  qualified and acting
_______________ of ____________________________.


                                                 ____________________________ of
                                                 ________________________


                                                 _________________, 199__


<PAGE>

                                  Schedule 6.3

The   Borrower  is  in  the  process  of  merging  the   McGreggor   Corporation
("McGreggor") and Levitt Investment Company  ("Levitt") into the Borrower,  with
the Borrower as the surviving corporation. The mergers have been approved by the
State of Delaware,  but the mergers are pending in the states of Mississippi and
Arizona (for McGreggor and Levitt,  respectively)  until annual reports for each
McGreggor  and Levitt are filed and the companies  are in good  standing.  It is
expected that the mergers will be completed shortly after the Closing.

<PAGE>


                                  Schedule 6.6

None other than as described in the Company's  reports filed with the Securities
and Exchange Commission.

<PAGE>


                                  Schedule 6.12

Subsidiaries of the Company
---------------------------

                                     No. Shares of                    Percentage
Name             State of Incorp.    Capital Stock       Owner        Ownership
----             ----------------    -------------       -----        ---------
Cort Furniture       Delaware                         Cort Business      100%
Rental Corporation                                      Services
("Borrower")                                          Corporation


Subsidiaries of Borrower
------------------------

None, pending the mergers described on Schedule 6.3



<PAGE>

                                  Schedule 7.10

                            Form of Joinder Agreement


     THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,  19__,
is  by   and   between   _____________________,   a   ___________________   (the
"Subsidiary"),  and  NATIONSBANK,  N.A.,  in its  capacity  as Agent  under that
certain Credit Agreement (as it may be amended,  modified,  extended or restated
from time to time,  the "Credit  Agreement"),  dated as of February 13, 1998, by
and among  CORT  FURNITURE  RENTAL  CORPORATION,  a  Delaware  corporation  (the
"Borrower"),  CORT BUSINESS SERVICES  CORPORATION,  a Delaware  corporation (the
"Company")  and certain other Credit  Parties party  thereto,  the Lenders party
thereto and NationsBank,  N.A., as Agent. All of the defined terms in the Credit
Agreement are incorporated herein by reference.

     The  Subsidiary  is an  Additional  Credit Party,  and,  consequently,  the
Borrower and the other Credit Parties are required by Section 7.10 of the Credit
Agreement to cause the Subsidiary to become a "Guarantor".

     Accordingly,  the Subsidiary  hereby agrees as follows with the Agent,  for
the benefit of the Lenders:

          1. The Subsidiary  hereby  acknowledges,  agrees and confirms that, by
     its  execution of this  Agreement,  the  Subsidiary  will be deemed to be a
     party to the Credit  Agreement  and a  "Guarantor"  for all purposes of the
     Credit Agreement and the other Credit Documents,  and shall have all of the
     obligations  of a Guarantor  thereunder  as if it had  executed  the Credit
     Agreement and the other Credit  Documents.  The Subsidiary hereby ratifies,
     as of the date  hereof,  and  agrees  to be  bound  by,  all of the  terms,
     provisions  and  conditions  contained in the Credit  Documents,  including
     without  limitation  (i) all of the  representations  and warranties of the
     Credit Parties set forth in Section 6 of the Credit Agreement,  (ii) all of
     the affirmative and negative covenants set forth in Sections 7 and 8 of the
     Credit Agreement and (iii) all of the undertakings and waivers set forth in
     Section 4 of the Credit  Agreement.  Without limiting the generality of the
     foregoing terms of this paragraph 1, the Subsidiary  hereby (i) jointly and
     severally together with the other Guarantors, guarantees to each Lender and
     the Agent,  as  provided in Section 4 of the Credit  Agreement,  the prompt
     payment and  performance  of the Credit Party  Obligations in full when due
     (whether at stated maturity, as a mandatory prepayment, by acceleration, as
     a mandatory  cash  collateralization  or otherwise)  strictly in accordance
     with the terms  thereof  and (ii)  agrees  that if any of the Credit  Party
     Obligations  are not paid or  performed in full when due (whether at stated
     maturity, as a mandatory prepayment,  by acceleration,  as a mandatory cash
     collateralization or otherwise), the Subsidiary will, jointly and severally
     together  with the other  Guarantors,  promptly  pay and  perform the same,
     without  any  demand  or  notice  whatsoever,  and  that in the case of any
     extension  of  time  of  payment  or  renewal  of any of the  Credit  Party
     Obligations,  the same will be promptly  paid in full when due  (whether at
     extended  maturity,  as  a  mandatory  prepayment,  by  acceleration,  as a
     mandatory cash collateralization or otherwise) in accordance with the terms
     of such extension or renewal.

<PAGE>

          2. This Agreement may be executed in two or more counterparts, each of
     which shall  constitute  an original  but all of which when taken  together
     shall constitute one contract.

     IN WITNESS  WHEREOF,  the  Subsidiary  has caused this Agreement to be duly
executed  by its  authorized  officers,  and the Agent,  for the  benefit of the
Lenders, has caused the same to be accepted by its authorized officer, as of the
day and year first above written.

                                             [SUBSIDIARY]


                                             By

                                             Title

                                             Acknowledged and accepted:

                                             NATIONSBANK, N.A.
                                             as Agent

                                             By

                                             Title

<PAGE>

                           Schedule 8.1(b)

Borrower's 12% Senior Notes due 2000 in aggregate principal amount of
$49,932,000.

<PAGE>

                                  Schedule 11.2

                              Lenders and Addresses
<TABLE>
<CAPTION>
                                                                                                      Eurodollar
                              Address                               Domestic                           Lending
     Lender                 for Notices                          Lending Office                         Office
     ------                 -----------                          --------------                       ----------
<S>                        <C>                                   <C>                                <C>
NationsBank, N.A.          NationsBank, N.A.                     NationsBank, N.A.                  NationsBank, N.A.
                           101 N. Tryon Street                   101 N. Tryon Street                101 N. Tryon Street
                           NC1-001-15-04                         NC1-001-15-04                      NC1-001-15-04
                           Charlotte, North Carolina 28255       Charlotte, North Carolina 28255    Charlotte, North Carolina 28255
                           Attn:  Ret Taylor                     Attn:  Ret Taylor                  Attn:  Ret Taylor
                           Phone: (704) 388-1108                 Phone: (704) 388-1108              Phone: (704) 388-1108
                           Fax:   (704) 388-9436                 Fax:   (704) 388-9436              Fax:   (704) 388-9436

                           with a copy to:

                           NationsBank, N.A.
                           1111 East Main Street
                           4th Floor Pavilion
                           Richmond, Virginia 23219
                           Attn:  Marty Mitchell
                           Phone: (804) 788-2285
                           Fax:   (804) 788-3669

Mellon Bank, N.A.          Mellon Bank, N.A.                     Mellon Bank, N.A.                  Mellon Bank, N.A.
                           10 S. Second Street                   10 S. Second Street                10 S. Second Street
                           Harrisburg, Pennsylvania 17101-1010   Harrisburg, Pennsylvania 17101     Harrisburg, Pennsylvania  17101
                           Attn:  George Hennessy                Attn:  George Hennessy             Attn:  George Hennessy
                           Phone: (717) 777-3359                 Phone: (717) 777-3359              Phone: (717) 777-3359
                           Fax:   (717) 777-3363                 Fax:   (717) 777-3363              Fax:   (717) 777-3363

First Union National Bank  First Union National Bank             First Union National Bank          First Union National Bank
                           1970 Chain Bridge Road                1970 Chain Bridge Road             One Bishopsgate
                           McLean, Virginia 22102                McLean, Virginia 22102             London, EC2N3AB England
                           Attn:  Frank S. Kaulback, III         Attn:  Frank S. Kaulback, III      Attn:
                           Phone: (703) 760-6259                 Phone: (703) 760-6259              Phone:
                           Fax:   (703) 760-5457                 Fax:   (703) 760-5457              Fax:

Comerica Bank              Comerica Bank                         Comerica Bank                      Comerica Bank
                           U.S. Banking East                     U.S. Banking East                  U.S. Banking East
                           500 Woodward Avenue, 9th Floor        500 Woodward Avenue, 9th Floor     500 Woodward Avenue, 9th Floor
                           MC 3280                               MC 3280                            MC 3280
                           Detroit, Michigan 48275-3280          Detroit, Michigan 48275-3280       Detroit, Michigan 48275-3280
                           Attn:  Tamara J. Gurne                Attn:  Tamara J. Gurne             Attn:  Tamara J. Gurne
                           Phone:  (313) 222-7806                Phone: (313) 222-7806              Phone: (313) 222-7806
                           Fax:  (313) 222-3330                  Fax:   (313) 222-3330              Fax:   (313) 222-3330
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                                                                      Eurodollar
                              Address                               Domestic                           Lending
     Lender                 for Notices                          Lending Office                         Office
     ------                 -----------                          --------------                       ----------
<S>                        <C>                                   <C>                                <C>
CoreStates Bank, N.A.      CoreStates Bank, N.A.                 CoreStates Bank, N.A.              CoreStates Bank, N.A.
                           1339 Chestnut Street                  1339 Chestnut Street               1339 Chestnut Street
                           FC 1-8-3-16                           FC 1-8-3-16                        FC 1-8-3-16
                           Philadelphia, Pennsylvania 19102      Philadelphia, Pennsylvania 19102   Philadelphia, Pennsylvania 19102
                           Attn:  John D. Brady                  Attn:  John D. Brady               Attn:  John D. Brady
                           Phone:  (215) 786-2160                Phone: (215) 786-2160              Phone: (215) 786-2160
                           Fax:  (215) 973-6745                  Fax:   (215) 973-6745              Fax:   (215) 973-6745

The First National         The First National Bank of Maryland   The First National Bank of MD      The First National Bank of MD
  Bank of Maryland         601-13th Street N.W.                  601-13th Street N.W.               601-13th Street N.W.
                           Suite 1000 North                      Suite 1000 North                   Suite 1000 North
                           Washington, D.C. 20005                Washington, D.C. 20005             Washington, D.C. 20005
                           Attn:  Lauren D. Johnston             Attn:  Lauren D. Johnston          Attn:  Lauren D. Johnston
                           Phone:  (202) 661-7227                Phone: (202) 661-7227              Phone:  (202) 661-7227
                           Fax:  (202) 661-7238                  Fax:   (202) 661-7238              Fax:  (202) 661-7238

Hibernia National Bank     Hibernia National Bank                Hibernia National Bank             Hibernia National Bank
                           313 Carondelet Street                 313 Carondelet Street              313 Carondelet Street
                           New Orleans, Louisiana 70130          New Orleans, Louisiana 70130       New Orleans, Louisiana 70130
                           Attn:  Troy J. Villafarra             Attn:  Troy J. Villafarra          Attn:  Troy J. Villafarra
                           Phone:  (504) 533-2738                Phone: (504) 533-2738              Phone: (504) 533-2738
                           Fax:  (504) 533-5344                  Fax:   (504) 533-5344              Fax:   (504) 533-5344

The Sumitomo Bank, Ltd.    The Sumitomo Bank, Ltd.               The Sumitomo Bank, Ltd.            The Sumitomo Bank, Ltd.
                           120 E. Baltimore Street               233 South Wacker Drive             233 South Wacker Drive
                           Suite 1920                            Suite 5400                         Suite 5400
                           Baltimore, Maryland 21202             Chicago, Illinois 60606            Chicago, Illinois 60606
                           Attn:  James L. Hogan                 Attn:  Maria Martinez              Attn:  Maria Martinez
                           Phone:  (410) 332-4050                Phone: (312) 993-6233              Phone: (312) 993-6233
                           Fax:  (410) 332-4058                  Fax:   (312) 876-1955              Fax:   (312) 876-1955
</TABLE>

<PAGE>

                                SCHEDULE 11.6(c)

                     Form of Commitment Transfer Supplement

                         COMMITMENT TRANSFER SUPPLEMENT

     Reference  is made to the Credit  Agreement,  dated as of February 13, 1998
(as amended,  supplemented or otherwise  modified from time to time, the "Credit
Agreement"),  among CORT FURNITURE RENTAL  CORPORATION,  a Delaware  corporation
(the "Borrower"),  CORT BUSINESS SERVICES  CORPORATION,  a Delaware  corporation
(the "Company") and certain of its Subsidiaries as guarantors (together with the
Company,  the "Guarantors"),  the banks and financial  institutions from time to
time parties  thereto and  NationsBank,  N.A., as agent for the Lenders (in such
capacity,  the "Agent").  Unless otherwise defined herein,  terms defined in the
Credit  Agreement  and used herein shall have the meanings  given to them in the
Credit Agreement.

     ___________________________________    (the   "transferor    Lender")   and
_________________________ the "Purchasing Lender") agree as follows:

     1. The  transferor  Lender  hereby  irrevocably  sells and  assigns  to the
Purchasing Lender without recourse to the transferor  Lender, and the Purchasing
Lender  hereby  irrevocably  purchases  and assumes from the  transferor  Lender
without recourse to the transferor Lender, as of the Transfer Effective Date (as
defined  below),  a _____%  interest  (the  "Assigned  Interest")  in and to the
transferor  Lender's rights and obligations  under the Credit  Agreement and the
other Credit Documents with respect to those credit facilities  contained in the
Credit  Agreement as are set forth on Schedule 1 attached hereto  (individually,
an "Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount for each Assigned Facility as set forth on such Schedule 1.

     2. The  transferor  Lender  (a) makes no  representation  or  warranty  and
assumes  no  responsibility  with  respect  to  any  statements,  warranties  or
representations  made in or in  connection  with the  Credit  Agreement  or with
respect  to the  execution,  legality,  validity,  enforceability,  genuineness,
sufficiency  or value of the Credit  Agreement,  any other Loan  Document or any
other instrument or document  furnished  pursuant  thereto,  other than that the
transferor  Lender has not  created any adverse  claim upon the  interest  being
assigned by it  hereunder  and that such  interest is free and clear of any such
adverse  claim;  (b)  makes  no   representation  or  warranty  and  assumes  no
responsibility with respect to the financial  condition of the Borrower,  any of
its  Subsidiaries  or any other obligor or the  performance or observance by the
Borrower,  any of  its  Subsidiaries  or  any  other  obligor  of  any of  their
respective  obligations under the Credit Agreement or any other Loan Document or
any other instrument or document furnished  pursuant hereto or thereto;  and (c)
attaches hereto any Notes held by it evidencing the Assigned  Facilities and (i)
requests that the Agent exchange the attached Note for a new Note payable to the
Purchasing Lender and (ii) if the transferor Lender has retained any interest in
the Assigned Facility,  requests that the Agent exchange the attached Note for a
new Notes payable to the  transferor  Lender and to the  Purchasing  Lender,  as
applicable,  in each case in amounts  which  reflect the  assignment  being made
hereby  (and after  giving  effect to any other  assignments  which have  become
effective on the Transfer Effective Date).

<PAGE>

     3. The  Purchasing  Lender (a)  represents  and warrants that it is legally
authorized to enter into this Commitment  Transfer Supplement and has not relied
on the Agent or transferor  Lender in making any credit  decision;  (b) confirms
that it has received a copy of the Credit Agreement, together with copies of the
financial  statements  referred to in  subsection  3.1  thereof,  the  financial
statements  delivered pursuant to subsection 5.1 thereof, if any, and such other
documents and  information  as it has deemed  appropriate to make its own credit
analysis and decision to enter into this  Commitment  Transfer  Supplement;  (c)
agrees that it will,  independently  and without  reliance  upon the  transferor
Lender,  the  Agent  or any  other  Lender  and  based  on  such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit decisions in taking or not taking action under the Credit Agreement,  the
other Loan  Documents or any other  instrument  or document  furnished  pursuant
hereto or thereto;  (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion  under the Credit
Agreement,  the  other  loan  documents  or any  other  instrument  or  document
furnished  pursuant hereto or thereto as are delegated to the Agent by the terms
thereof,  together with such powers as are  incidental  thereto;  and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in  accordance  with its  terms  all the  obligations  which by the terms of the
Credit Agreement are required to be performed by it as a Lender including, if it
is organized  under the laws of a jurisdiction  outside the United  States,  its
obligations pursuant to subsection 2.18 of the Credit Agreement.

     4. The  effective  date of this  Commitment  Transfer  Supplement  shall be
________ ___, 19__ (the "Transfer  Effective Date").  Following the execution of
this  Commitment  Transfer  Supplement,  it will be  delivered  to the Agent for
acceptance  by it and recording by the Agent  pursuant to the Credit  Agreement,
effective as of the Transfer  Effective Date (which shall not, unless  otherwise
agreed to by the Agent,  be earlier  than five  Business  Days after the date of
such acceptance and recording by the Agent).

     5.  Upon  such  acceptance  and  recording,  from and  after  the  Transfer
Effective  Date,  the Agent shall make all  payments in respect of the  Assigned
Interest (including payments of principal,  interest, fees and other amounts) to
the  Purchasing  Lender  whether such amounts have accrued prior to the Transfer
Effective  Date  or  accrue  subsequent  to the  Transfer  Effective  Date.  The
transferor   Lender  and  the  Purchasing  Lender  shall  make  all  appropriate
adjustments in payments by the Agent for periods prior to the Transfer Effective
Date or,  with  respect  to the  making  of this  assignment,  directly  between
themselves.

     6. From and after the Transfer  Effective  Date, (a) the Purchasing  Lender
shall be a party to the Credit  Agreement  and,  to the extent  provided in this
Commitment  Transfer  Supplement,  have the rights and  obligations  of a Lender
thereunder  and  under  the  other  Credit  Documents  and shall be bound by the
provisions  thereof and (b) the transferor  Lender shall, to the extent provided
in this Commitment  Transfer  Supplement,  relinquish its rights (except for its
rights of indemnity to the Transfer  Effective  Date which shall survive) and be
released from its obligations under the Credit Agreement.

     7. This Commitment  Transfer  supplement shall be governed by and construed
in accordance with the laws of the State of North Carolina.

     IN WITNESS WHEREOF, the parties hereto have caused this Commitment Transfer
Supplement to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.

<PAGE>

                                   SCHEDULE 1
                        TO COMMITMENT TRANSFER SUPPLEMENT
        RELATING TO THE CREDIT AGREEMENT, DATED AS OF NOVEMBER 21, 1995,
                                      AMONG
                       CORT FURNITURE RENTAL CORPORATION,

                          CERTAIN OF ITS SUBSIDIARIES,
                            THE LENDERS NAMED THEREIN
                                       AND
                   NATIONSBANK, N.A., AS AGENT FOR THE LENDERS
                         (IN SUCH CAPACITY, THE "AGENT")
--------------------------------------------------------------------------------

Name of transferor Lender:

Name of Purchasing Lender:

Transfer Effective Date of Assignment:

      Credit             Principal         Revolving Commitment Percentage
Facility Assigned                        Amount Assigned          Assigned(1)
-----------------                        ---------------          -----------


                       $--------------            ----.--------------%


[NAME OF PURCHASING LENDER]                    [NAME OR TRANSFEROR LENDER]

By___________________________                      By___________________________
  Name:                                              Name:
  Title:                                             Title:


Accepted:                                      Consented to:

NATIONSBANK, N.A.                              CORT FURNITURE RENTAL CORPORATION

By___________________________                      By___________________________
  Name:                                              Name:
  Title:                                             Title:


(1)  Calculate the Commitment Percentage that is assigned to at least 15 decimal
     places  and  show  as a  percentage  of the  aggregate  commitments  of all
     Lenders.