<PAGE>

                                                                  EXHIBIT 10.7




_______________________________________________________________________________
_______________________________________________________________________________


                                   CREDIT AGREEMENT
                                           
                                        among

                             GENERAL SEMICONDUCTOR, INC.,

                                    CERTAIN BANKS,

                              THE CHASE MANHATTAN BANK,
                             as Administrative Agent, and


                              THE CHASE MANHATTAN BANK,

               BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
                                           
                                  BANK OF MONTREAL,
                                           
                               THE BANK OF NOVA SCOTIA,
                                           
                                      CIBC INC.,
                                           
                           CREDIT LYONNAIS NEW YORK BRANCH,
                                           
                                 FLEET NATIONAL BANK
                                           
                                         and
                                           
                                 WACHOVIA BANK, N.A.
                                           
                                     as Co-Agents
                                           
                                           
                                           
                              Dated as of July 23, 1997
                                           
_______________________________________________________________________________
_______________________________________________________________________________

<PAGE>

                                  TABLE OF CONTENTS

                                                                            PAGE

SECTION 1. DEFINITIONS......................................................  2
    1.1  Defined Terms......................................................  2
    1.2  Other Definitional Provisions...................................... 22

SECTION 2. AMOUNT AND TERMS OF REVOLVING
           CREDIT COMMITMENTS............................................... 22

    2.1  Revolving Credit Commitments....................................... 22
    2.2  Proceeds of Revolving Credit Loans................................. 23
    2.3  Issuance of Letters of Credit...................................... 23
    2.4  Participating Interests............................................ 24
    2.5  Procedure for Opening Letters of Credit............................ 24
    2.6  Payments in Respect of Letters of Credit........................... 24
    2.7  The Bid Loans...................................................... 25
    2.8  Procedure for Bid Loan Borrowing................................... 25
    2.9  Bid Loan Payments.................................................. 28
    2.10 Swing Line Commitment.............................................. 29
    2.11 Participations..................................................... 31

SECTION 3. GENERAL PROVISIONS APPLICABLE TO
           LOANS AND LETTERS OF CREDIT...................................... 31

    3.1  Procedure for Borrowing............................................ 31
    3.2  Conversion Options................................................. 31
    3.3  Changes of Commitment Amounts...................................... 32
    3.4  Optional Prepayments............................................... 33
    3.5  Mandatory Prepayments.............................................. 33
    3.6  Interest Rates and Payment Dates................................... 35
    3.7  Computation of Interest and Fees................................... 35
    3.8  Facility Fees...................................................... 36
    3.9  Certain Fees....................................................... 36
    3.10 Letter of Credit Fees.............................................. 36
    3.11 Letter of Credit Reserves.......................................... 37
    3.12 Further Assurances................................................. 38
    3.13 Obligations Absolute............................................... 38
    3.14 Assignments........................................................ 39
    3.15 Participations..................................................... 39
    3.16 Inability to Determine Interest Rate............................... 39
    3.17 Pro Rata Treatment and Payments.................................... 39
    3.18 Illegality......................................................... 42
    3.19 Requirements of Law................................................ 43
    3.20 Indemnity.......................................................... 44
    3.21 Repayment of Loans, Evidence of Debt............................... 44

                                         -i-


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                                                                            PAGE

    3.22 Mitigation Obligations; Replacement of Banks....................... 45

SECTION 4. REPRESENTATIONS AND WARRANTIES................................... 47

    4.1  Financial Condition................................................ 47
    4.2  No Material Change................................................. 48
    4.3  Corporate Existence; Compliance with Law........................... 48
    4.4  Corporate Power; Authorization..................................... 49
    4.5  Enforceable Obligations............................................ 49
    4.6  No Legal Bar....................................................... 49
    4.7  No Material Litigation............................................. 49
    4.8  Investment Company Act............................................. 50
    4.9  Federal Regulation................................................. 50
    4.10 No Default......................................................... 50
    4.11 No Burdensome Restrictions......................................... 50
    4.12 Taxes.............................................................. 50
    4.13 Subsidiaries....................................................... 51
    4.14 Ownership of Property; Liens....................................... 51
    4.15 ERISA.............................................................. 51
    4.16 Accuracy of Disclosure............................................. 52
    4.17 Environmental Matters.............................................. 52
    4.18 Collateral Documents............................................... 53
    4.19 Intellectual Property.............................................. 53

SECTION 5. CONDITIONS PRECEDENT............................................. 53

    5.1  Conditions to Effectiveness of this Agreement...................... 53
    5.2  Conditions to Initial Loans and Letters of Credit.................. 56
    5.3  Conditions to All Loans and Letters of Credit...................... 57

SECTION 6. AFFIRMATIVE COVENANTS............................................ 57

    6.1  Financial Statements............................................... 58
    6.2  Certificates; Other Information.................................... 59
    6.3  Payment of Obligations............................................. 60
    6.4  Conduct of Business and Maintenance of Existence................... 60
    6.5  Maintenance of Property; Insurance................................. 61
    6.6  Inspection of Property; Books and Records; Discussions............. 61
    6.7  Notices............................................................ 61
    6.8  Additional Subsidiary Guarantors; Stock Pledge..................... 63
    6.9  Environmental Laws................................................. 64

SECTION 7. NEGATIVE COVENANTS............................................... 64

    7.1  Amendments of Spin-Off Documents................................... 64

                                         -ii-


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                                                                            PAGE

    7.2  Limitation on Liens................................................ 64
    7.3  Limitation on Guarantee Obligations................................ 66
    7.4  Prohibition of Fundamental Changes................................. 66
    7.5  Limitation on Sale of Assets....................................... 66
    7.6  Limitation on Investments, Loans and Advances...................... 67
    7.7  Maintenance of Consolidated Net Worth.............................. 68
    7.8  Maintenance of Interest Coverage................................... 68
    7.9  Maintenance of Leverage Ratio...................................... 68
    7.10 Limitation on Dividends and Stock Repurchases...................... 68
    7.11 Transactions with Affiliates....................................... 69
    7.12 Foreign Exchange Contracts......................................... 69
    7.13 Fiscal Year........................................................ 69
    7.14 Limitation on Indebtedness......................................... 69
    7.15 Limitation on Capital Expenditures................................. 70
    7.16 Limitation on Leases............................................... 70
    7.17 Limitation on Sales and Leasebacks................................. 70
    7.18 Limitation on Negative Pledge Clauses; Payment Restrictions........ 70

SECTION 8. EVENTS OF DEFAULT................................................ 71

SECTION 9. THE CO-AGENTS; THE ADMINISTRATIVE
           AGENT; ISSUING BANKS............................................. 74

    9.1  Appointment........................................................ 74
    9.2  Delegation of Duties............................................... 74
    9.3  Exculpatory Provisions............................................. 74
    9.4  Reliance by Co-Agents and Administrative Agent..................... 75
    9.5  Notice of Default.................................................. 75
    9.6  Non-Reliance on Co-Agents, Administrative Agent and Other Banks.... 75
    9.7  Indemnification.................................................... 76
    9.8  Co-Agents and Administrative Agent in their Individual Capacities.. 76
    9.9  Successor Co-Agent or Administrative Agent......................... 76
    9.10 An Issuing Bank as Issuer of Letters of Credit..................... 77

SECTION 10. MISCELLANEOUS................................................... 77

    10.1 Amendments and Waivers............................................. 77
    10.2 Notices............................................................ 78
    10.3 No Waiver; Cumulative Remedies..................................... 80
    10.4 Survival of Representations and Warranties......................... 80
    10.5 Payment of Expenses and Taxes...................................... 80
    10.6 Successors and Assigns; Participations; Purchasing Banks........... 82
    10.7 Adjustments; Set-off............................................... 85
    10.8 Judgment........................................................... 86
    10.9 Counterparts....................................................... 86

                                        -iii-


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                                                                            PAGE

    10.10     Integration................................................... 87
    10.11     GOVERNING LAW; NO THIRD PARTY RIGHTS.......................... 87
    10.12     SUBMISSION TO JURISDICTION; WAIVERS........................... 87
    10.13     Acknowledgements.............................................. 88

                                         -iv-


<PAGE>

SCHEDULES:

Schedule I    Lists of Addresses for Notices; Lending Offices; Commitment
              Amounts
Schedule II   Domestic Subsidiaries
Schedule III  Foreign Subsidiaries
Schedule IV   Consents
Schedule V    Guarantee Obligations
Schedule VI   Permitted Foreign Investments
Schedule VII  Pledged Foreign Stock
Schedule VIII Existing Investments

EXHIBITS:
Exhibit A     Bid Loan Confirmation
Exhibit B     Bid Loan Offer
Exhibit C     Bid Loan Request
Exhibit D     Subsidiary Guarantee
Exhibit E     Company Pledge Agreement
Exhibit F     Subsidiary Pledge Agreement
Exhibit G-1   Opinion of Fried, Frank, Harris, Shriver & Jacobson
Exhibit G-2   Opinion of Keith A. Zar, Esq.
Exhibit H     Company Closing Certificate
Exhibit I     L/C Participation Certificate
Exhibit J     Swing Line Loan Participation Certificate
Exhibit K     Assignment and Acceptance
Exhibit L     Exemption Certificate


                                         -v-

<PAGE>


         CREDIT AGREEMENT, dated as of July 23, 1997, among GENERAL
SEMICONDUCTOR, INC., a Delaware corporation (the "COMPANY"), the several lenders
from time to time parties hereto (the "BANKS"), THE CHASE MANHATTAN BANK, a New
York banking corporation, as administrative agent for the Banks (in such
capacity, the "ADMINISTRATIVE AGENT"), and The Chase Manhattan Bank ("CHASE"),
Bank of America National Trust and Savings Association, Bank of Montreal, The
Bank of Nova Scotia, CIBC Inc., Credit Lyonnais New York Branch, Fleet National
Bank and Wachovia Bank, N.A. as co-agents for the Banks (in such capacity,
collectively, the "CO-AGENTS"; each, individually, a "CO-AGENT").


                                 W I T N E S S E T H:


         1.  Pursuant to the Distribution Agreement dated as of June 12, 1997
(as amended, modified or supplemented from time to time in accordance with
subsection 7.1, the "DISTRIBUTION AGREEMENT") among General Instrument
Corporation, a Delaware corporation ("GI Holdings"), NextLevel Systems, Inc., a
Delaware corporation ("NEXTLEVEL") which is an indirect wholly-owned Subsidiary
(such term and the other capitalized terms used in these recitals having the
meaning set forth in this Agreement unless the context otherwise requires) of
the Company, and CommScope, Inc., a Delaware corporation ("COMMSCOPE") which is
an indirect wholly-owned Subsidiary of the Company, the Company has agreed to
separate and divide the existing businesses of the Company so that (a) the
business (the "COMMUNICATIONS BUSINESS") of the manufacture and sale of
broadband communications products used in the cable television, satellite and
telecommunications industries shall be owned directly and indirectly by
NextLevel, (b) the business (the "CABLE MANUFACTURING BUSINESS") of the
manufacture and sale of coaxial, fiber optic and other electronic cable used in
the cable television, satellite and other industries shall be owned directly and
indirectly by CommScope, and (c) the business (the "POWER SEMICONDUCTOR
BUSINESS") of the manufacture and sale of discrete power rectifiers and
transient voltage suppression components used in telecommunications, automotive
and consumer electronic products shall be directly and indirectly owned by GI
Holdings which will be merged with General Instrument Corporation of Delaware, a
Delaware corporation ("GI Delaware"), with GI Holdings as the surviving
corporation, and be renamed "General Semiconductor, Inc." ("General
Semiconductor") immediately following the separation and division described
above and prior to the distribution described in the succeeding paragraph.

         2.  Following the separation and division described in the preceding
paragraph (a) the Company shall distribute, as a dividend to the holders of the
shares of its common stock, all of the capital stock of NextLevel, which, at the
time of the distribution, will own all of the capital stock of CommScope, and
promptly thereafter (b) NextLevel shall distribute, as a dividend to the holders
of the shares of its common stock, all of the capital stock of CommScope (the
transactions described in paragraph 1 above and this paragraph 2, as more
particularly described in the S-4 Filing (as defined below), the "SPINOFF".)

         3.  Pursuant to the Distribution Agreement and in connection with the
Spin-Off, certain pre-existing indebtedness of the Company, NextLevel and
CommScope and their respective Subsidiaries will be paid in full and cancelled
and certain other transactions will be consummated (the Spin-Off and the other
transactions to be performed pursuant to and in 

<PAGE>

                                                                               2


connection with the Spin-Off, the "SPIN-OFF TRANSACTIONS").


         4.  The Company has requested that the Banks, the Administrative Agent
and the Co-Agents enter this Agreement in order to make available to the Company
the $350,000,000 credit facilities described herein on the terms and conditions
set forth herein.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Company, the Banks, the Administrative Agent and the
Co-Agents hereby agree as follows:


         SECTION 1.     DEFINITIONS

         1.1 DEFINED TERMS.  As used in this Agreement, the terms defined in
the preamble hereto shall have the meanings set forth therein, and the following
terms have the following meanings:

         "ABR":  for any day, a rate per annum (rounded upwards, if necessary,
    to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
    effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
    (c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. 
    For purposes hereof:  "PRIME RATE" shall mean the rate of interest per
    annum publicly announced from time to time by Chase as its prime rate in
    effect at its principal office in New York City (the Prime Rate not being
    intended to be the lowest rate of interest charged by Chase in connection
    with extensions of credit to debtors); "BASE CD RATE" shall mean the sum of
    (a) the product of (i) the Three-Month Secondary CD Rate and (ii) a
    fraction, the numerator of which is one and the denominator of which is one
    minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
    "THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary
    market rate for three-month certificates of deposit reported as being in
    effect on such day (or, if such day shall not be a Business Day, the next
    preceding Business Day) by the Board through the public information
    telephone line of the Federal Reserve Bank of New York (which rate will,
    under the current practices of the Board, be published in Federal Reserve
    Statistical Release H.15(519) during the week following such day), or, if
    such rate shall not be so reported on such day or such next preceding
    Business Day, the average of the secondary market quotations for
    three-month certificates of deposit of major money center banks in New York
    City received at approximately 10:00 A.M., New York City time, on such day
    (or, if such day shall not be a Business Day, on the next preceding
    Business Day) by the Administrative Agent from three New York City
    negotiable certificate of deposit dealers of recognized standing selected
    by it; and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
    weighted average of the rates on overnight federal funds transactions with
    members of the Federal Reserve System arranged by federal funds brokers, as
    published on the next succeeding Business Day by the Federal Reserve Bank
    of New York, or, if such rate is not so published for any day which is a
    Business Day, the average of the quotations for the day of such
    transactions received by the Administrative Agent from three federal funds
    brokers of recognized standing selected by it.  If for any reason the
    Administrative Agent shall have determined (which determination shall be
    conclusive absent manifest error) that it is unable to ascertain the Base
    CD Rate or the Federal Funds Effective Rate, or both, for 

<PAGE>

                                                                              3


    any reason, including the inability or failure of the Administrative Agent
    to obtain sufficient quotations in accordance with the terms hereof, the
    ABR shall be determined without regard to clause (b) or (c), or both, of
    the first sentence of this definition, as appropriate, until the
    circumstances giving rise to such inability no longer exist.  Any change in
    the ABR due to a change in the Prime Rate, the Three-Month Secondary CD
    Rate or the Federal Funds Effective Rate shall be effective as of the
    opening of business on the effective day of such change in the Prime Rate,
    the Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
    respectively.

         "ABR LOANS":  Loans whose interest rate is based on the ABR.

         "ABSOLUTE RATE BID LOAN":  any Bid Loan bearing interest at an
    absolute fixed rate. 

         "ABSOLUTE RATE BID LOAN REQUEST":  any Bid Loan Request requesting the
    Bid Loan Lenders to offer to make Bid Loans at an absolute fixed rate for
    the term of the Bid Loan.

         "ADMINISTRATIVE AGENT":  as defined in the preamble hereto.

         "AFFILIATE":  of any Person (a) any Person (other than a Subsidiary)
    which, directly or indirectly, is in control of, is controlled by, or is
    under common control with such Person, or (b) any Person who is a director
    or officer (i) of such Person, (ii) of any Subsidiary of such Person or
    (iii) of any Person described in clause (a) above.  For purposes of this
    definition, control of a Person shall mean the power, direct or indirect,
    either to (i) vote 10% or more of the securities having ordinary voting
    power for the election of directors of such Person, or (ii) direct or cause
    the direction of the management and policies of such Person whether by
    contract or otherwise.  Notwithstanding the foregoing, NextLevel, CommScope
    and their respective Subsidiaries shall be deemed to be Affiliates of the
    Company and its Subsidiaries for any period during which NextLevel and
    CommScope are Subsidiaries of the Company or GI Delaware.

         "AGGREGATE EXTENSIONS OF CREDIT":  at any particular time, the sum of
    (a) the aggregate then outstanding principal amount of the Revolving Credit
    Loans, (b) the aggregate then outstanding principal amount of the Bid
    Loans, (c) the aggregate amount then available to be drawn under all
    outstanding Letters of Credit, (d) the aggregate amount of Revolving L/C
    Obligations and (e) the aggregate then outstanding principal amount of the
    Swing Line Loans.

         "AGREEMENT":  this Credit Agreement, as amended, supplemented or
    modified from time to time.

         "AGREEMENT CURRENCY":  as defined in subsection 10.8(b).

         "APPLICABLE INDEX RATE":  in respect of any Bid Loan requested
    pursuant to an Index Rate Bid Loan Request, the applicable Eurodollar Rate.

<PAGE>

                                                                              4


         "APPLICABLE MARGIN":  for each Eurodollar Loan, the Facility Fee and
    the Standby L/C fees, the rate per annum determined from time to time based
    upon the Leverage Ratio determined as of the last day of the most recent
    fiscal quarter for which the Company has delivered financial statements
    pursuant to subsections 6.1(a) and (b) and the related certificate of the
    chief financial officer of the Company referred to in subsection 6.2 as set
    forth under the relevant column heading below opposite such Leverage Ratio:

               (in basis points)

                                                                     STANDBY
                              EURODOLLAR LOAN                        -------
    LEVERAGE RATIO           APPLICABLE MARGIN   FACILITY FEE        L/C FEE
    --------------           -----------------   ------------        -------
    Less than 1.5 to 1.0               36.25          18.75          36.25

    Less than 2.0 to 1.0 but           42.50          20.00          42.50
    greater than or equal to 
    1.5 to 1.0     

    Less than 2.25 to 1.0 but          52.50          22.50          52.50
    greater than or equal to 
    2.0 to 1.0

    Less than 2.75 to 1.0 but          60.00          25.00          60.00
    greater than or equal to 
    2.25 to 1.0    

    Less than 3.0 to 1.0 but           70.00          30.00          70.00
    greater than or equal to 
    2.75 to 1.0

    Less than 3.5 to 1.0 but          112.50          37.50         112.50
    greater than or equal to 
    3.0 to 1.0

    Greater than or equal to          137.50          37.50         137.50
    3.5 to 1.0     

    For the purpose of this Agreement, any change in the Eurodollar Loan
    Applicable Margin, the Facility Fee and the Standby L/C fees shall become
    effective on the day following the delivery to the Administrative Agent by
    the Company of the financial statements referred to in subsections 6.1(a)
    and (b) and the related certificate of the chief financial officer of the
    Company referred to in subsection 6.2 indicating the Leverage Ratio as of
    the last day of such period.  If the Company shall fail to deliver the
    financial statements referred to in subsections 6.1(a) and (b) and the
    related certificate of the chief financial officer of the Company referred
    to in subsection 6.2 indicating the Leverage Ratio as of such last day,
    then the Applicable Margin, Facility Fee and Standby L/C fee shall
    automatically, and without further act of the Administrative Agent, the
    Co-Agents or any Bank, equal the highest Applicable Margin, Facility Fee
    and Standby L/C fee set forth above.  Notwithstanding the foregoing, for
    the period from the Closing Date through January 25, 1998, the Applicable
    Margin shall be calculated as if the Leverage Ratio was less than 2.75 to
    1.0 but greater than or equal to 2.25 to 1.0.

<PAGE>

                                                                              5


         "ASSET SALE":  any sale, sale-leaseback, assignment, conveyance,
    transfer or other disposition (including as a result of casualty or
    condemnation) by the Company or any Subsidiary thereof of any of its
    property or assets, including the stock of any Subsidiary of the Company
    (except sales, sale-leasebacks, assignments, conveyances, transfers and
    other dispositions permitted by clauses (a), (b), and (c) of subsection
    7.5).

         "ASSIGNEE":  as defined in subsection 10.6(c).

         "ASSIGNMENT AND ACCEPTANCE":  an Assignment and Acceptance
    substantially in the form of Exhibit K hereto.

         "AVAILABLE REVOLVING CREDIT COMMITMENTS":  as to all the Banks, at a
    particular time, an amount equal to the excess, if any, of (a) the
    Revolving Credit Commitments at such time less (b) the sum of (i) the
    Aggregate Extensions of Credit and, (ii) for so long as the Company remains
    liable for the payment of the Taiwan Mortgage Indebtedness, the outstanding
    amount of the Taiwan Mortgage Indebtedness (except to the extent the
    Aggregate Extensions of Credit have been drawn for the purpose of repaying
    the Taiwan Mortgage Indebtedness and are so used promptly after such
    drawing).

         "BANKS":  as defined in the preamble hereto.

         "BENEFITTED BANK":  as defined in subsection 10.7 hereof.

         "BID LOAN":  each Bid Loan made pursuant to subsection 2.7.

         "BID LOAN COMMITMENT PERIOD":  the period from and including the
    Closing Date until the date which is 15 days prior to the Revolving Credit
    Termination Date.

         "BID LOAN CONFIRMATION":  each confirmation by the Company of its
    acceptance of Bid Loan Offers, which Bid Loan Confirmation shall be
    substantially in the form of Exhibit A and shall be delivered to the
    Administrative Agent in writing, by telex or by facsimile transmission.

         "BID LOAN INTEREST PAYMENT DATE":  as to each Bid Loan, each interest
    payment date specified by the Company for such Bid Loan in the related Bid
    Loan Request.

         "BID LOAN LENDERS":  Banks from time to time designated by the Company
    as Bid Loan Lenders as provided in subsection 2.7.

         "BID LOAN MATURITY DATE":  as to any Bid Loan, the date specified by
    the Company pursuant to subsection 2.8(d)(2) in its acceptance of the
    related Bid Loan Offer.

         "BID LOAN OFFER":  each offer by a Bid Loan Lender to make Bid Loans
    pursuant to a Bid Loan Request, which Bid Loan Offer shall contain the
    information specified in Exhibit B and shall be delivered to the
    Administrative Agent by telephone, immediately confirmed by telex or
    facsimile transmission.

         "BID LOAN REQUEST":  each request by the Company for Bid Loan Lenders
    to 

<PAGE>

                                                                              6


    submit bids to make Bid Loans, which request shall contain the information
    in respect of such requested Bid Loans specified in Exhibit C and shall be
    delivered to the Administrative Agent in writing, by telex or facsimile
    transmission, or by telephone, immediately confirmed by telex or facsimile
    transmission.

         "BOARD":  the Board of Governors of the Federal Reserve System of the
    United States.

         "BORROWING DATE":  any Business Day specified in a notice pursuant to
    (a) subsection 2.8, 2.10 or 3.1 as a date on which the Company requests Bid
    Loan Lenders to make Bid Loans, a Swing Line Bank to make Swing Line Loans
    or the Banks to make Revolving Credit Loans, respectively, hereunder or (b)
    subsection 2.5 as a date on which the Company requests an Issuing Bank to
    issue a Letter of Credit hereunder.

         "BUSINESS DAY":  a day other than a Saturday, Sunday or other day on
    which commercial banks in New York City are authorized or required by law
    to close, except that, when used in connection with a Eurodollar Loan,
    "Business Day" shall mean any Business Day on which dealings in Dollars
    between banks may be carried on in London, England and New York City.

         "CABLE MANUFACTURING BUSINESS":  as defined in the recitals hereto.


         "CASH EQUIVALENTS":  (i) securities issued or directly and fully
    guaranteed or insured by the United States Government or any agency or
    instrumentality thereof having maturities of not more than six months from
    the date of acquisition, (ii) certificates of deposit and eurodollar time
    deposits with maturities of six months or less from the date of
    acquisition, bankers' acceptances with maturities not exceeding six months
    and overnight bank deposits, in each case, with any Bank or with any
    domestic commercial bank having capital and surplus in excess of
    $300,000,000, (iii) repurchase obligations with a term of not more than
    seven days for underlying securities of the types described in clauses (i)
    and (ii) entered into with any financial institution meeting the
    qualifications specified in clause (ii) above, and (iv) commercial paper
    issued by any Bank, the parent corporation of any Bank or any Subsidiary of
    such Bank's parent corporation, and commercial paper rated A-1 or the
    equivalent thereof by Standard & Poor's Corporation or P-1 or the
    equivalent thereof by Moody's Investors Service, Inc. and in each case
    maturing within six months after the date of acquisition thereof.

         "C/D ASSESSMENT RATE":  for any day as applied to any ABR Loan, the
    net annual assessment rate (rounded upward to the nearest 1/100th of 1%)
    determined by the Administrative Agent to be payable on such day to the
    Federal Deposit Insurance Corporation or any successor ("FDIC") for FDIC's
    insuring time deposits made in Dollars at the offices of Chase in the
    United States.

         "CD RESERVE PERCENTAGE":  for any day as applied to any ABR Loan, that
    percentage (expressed as a decimal) which is in effect on such day, as
    prescribed by the Board (or any successor), for determining the maximum
    reserve requirement for a Depositary Institution (as defined in Regulation
    D of the Board) in respect of new non-personal time deposits in Dollars
    having a maturity of 30 days or more.

<PAGE>

                                                                              7


         "CHANGE IN LAW":  with respect to any Bank, the adoption of any law,
    rule, regulation, policy, guideline or directive (whether or not having the
    force of law) or any change therein or in the interpretation or application
    thereof by any Governmental Authority, including, without limitation, the
    issuance of any final rule, regulation or guideline by any regulatory
    agency having jurisdiction over such Bank.

         "CHASE":  as defined in the preamble hereto.

         "CLASS": as to any Loan, its nature as a Revolving Credit Loan, Bid
    Loan or Swing Line Loan.

         "CLOSING DATE":  as defined in subsection 5.2.

         "CO-AGENTS":  as defined in the preamble hereto.

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

         "COMMERCIAL L/C":  a commercial documentary Letter of Credit under
    which the relevant Issuing Bank agrees to make payments in Dollars for the
    account of the Company, on behalf of the Company or any Subsidiary thereof,
    in respect of obligations of the Company or any Subsidiary thereof in
    connection with the importation or exportation of goods in the ordinary
    course of business.

         "COMMITMENTS":  the collective reference to the Revolving Credit
    Commitments and the Swing Line Commitment; individually, a "COMMITMENT".


         "COMMITMENT PERCENTAGE" or "REVOLVING CREDIT COMMITMENT PERCENTAGE": 
    as to any Bank at any time, the percentage which such Bank's Revolving
    Credit Commitment constitutes of all Revolving Credit Commitments.

         "COMMONLY CONTROLLED ENTITY":  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.

         "COMMSCOPE":  as defined in the recitals hereto.

         "COMMUNICATIONS BUSINESS":  as defined in the recitals hereto.

         "COMPANY":  as defined in the preamble hereto.

         "COMPANY PLEDGE AGREEMENT":  the Pledge Agreement, substantially in
    the form of Exhibit E hereto, made by the Company in favor of the
    Administrative Agent, for the ratable benefit of the Banks, as the same may
    be amended, supplemented or otherwise modified from time to time.

         "CONSOLIDATED EBITDA":  for any period, the Consolidated Net Income
    ((i) 

<PAGE>

                                                                              8


    including earnings and losses from discontinued operations, excluding those
    attributable to NextLevel and Commscope, and (ii) excluding (x)
    extraordinary non-cash gains and losses and (y) charges in connection with
    the redemption or conversion to common stock of the Company's outstanding
    5% Convertible Junior Subordinated Notes) of the Company and its
    Subsidiaries for such period, PLUS to the extent reflected as a charge in
    the statement of consolidated net income for such period, the sum of
    (a) interest expense (net of interest income), amortization and write offs
    of debt discount and debt issuance costs and commissions, discounts and
    other fees and charges associated with Letters of Credit, (b) taxes
    measured by income, (c) depreciation and amortization expenses and (d)
    non-cash compensation expenses arising from the sale of stock, the granting
    of stock options, the granting of stock appreciation rights and similar
    arrangements; PROVIDED, that, (i) Consolidated EBITDA for the period of
    four consecutive quarters ending September 30, 1997 shall be equal to the
    product of (A) Consolidated EBITDA for the fiscal quarter ending
    September 30, 1997 times (B) 4, (ii) Consolidated EBITDA for the period of
    four consecutive fiscal quarters ending December 31, 1997 shall be equal to
    the product of (A) Consolidated EBITDA for the two consecutive fiscal
    quarters ending December 31, 1997 times (B) 2, and (iii) Consolidated
    EBITDA for the period of four consecutive fiscal quarters March 31, 1998
    shall be equal to the product of (A) Consolidated EBITDA for the three
    consecutive fiscal quarters ending March 31, 1998 times (B) 4/3.

         "CONSOLIDATED INTEREST EXPENSE":  for any period the amount of
    interest expense both expensed and capitalized (excluding amortization and
    write offs of debt discount and debt issuance costs), net of interest
    income, of the Company and its Subsidiaries, determined on a consolidated
    basis in accordance with GAAP, for such period PROVIDED, THAT, (i)
    Consolidated Interest Expense for the period of four consecutive fiscal
    quarters ending September 30, 1997 shall be equal to the product of (A)
    Consolidated Interest Expense for the fiscal quarter ending September 30,
    1997 times (B) 4, (ii) Consolidated Interest Expense for the period of four
    consecutive fiscal quarter ending December 31, 1997 shall be equal to the
    product of (A) Consolidated Interest Expense for the two consecutive fiscal
    quarters ending December 31, 1997 times (B) 2, and (iii) Consolidated
    Interest Expense for the period of four consecutive fiscal quarters ending
    March 31, 1998 shall be equal to the product (A) Consolidated Interest
    Expense for the three consecutive fiscal quarters ending March 31, 1998
    times (B) 4/3.

         "CONSOLIDATED LEASE EXPENSE": for any period, the amount of lease
    expense of the Company and its Subsidiaries determined on a consolidated
    basis in accordance with GAAP for such period with respect to Lease
    Obligations.

         "CONSOLIDATED NET INCOME":  for any period, the net income or net loss
    of the Company and its Subsidiaries for such period, determined in
    accordance with GAAP on a consolidated basis, excluding any pre-tax charges
    related to costs incurred in connection with the Spin-Off not exceeding
    $20,000,000 in the aggregate for the period from July 1, 1997 to December
    31, 1997, as reflected in the financial statements furnished to the
    Administrative Agent in accordance with subsections 6.1(a) and (b) hereof.

         "CONSOLIDATED NET WORTH":  as of any date of determination, all items
    which in conformity with GAAP would be included under shareholders' equity
    on a consolidated 

<PAGE>

                                                                              9


    balance sheet of the Company and its Subsidiaries at such date, PROVIDED,
    that such amount shall be increased, on a cumulative basis from June 30,
    1997, for (i) amortization and write-offs of debt discount and debt
    issuance costs, (ii) any amount reflected as a charge in the Company's
    consolidated income statements for non-cash compensation arising from the
    sale of stock, the granting of stock options, the granting of stock
    appreciation rights and similar arrangements and (iii) pre-tax charges
    related to costs incurred in connection with the Spin-Off not exceeding
    $20,000,000 in the aggregate for the period from July 1, 1997 to December
    31, 1997.

         "CONSOLIDATED TOTAL INDEBTEDNESS":  as of any date of determination,
    all Indebtedness of the Company and its Subsidiaries, which would be
    reflected as debt on a consolidated balance sheet of the Company prepared
    in accordance with GAAP, excluding to the extent otherwise included the
    Taiwan Mortgage Indebtedness.

         "CONTRACTUAL OBLIGATION":  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 the
    property owned by it is bound.

         "CREDIT DOCUMENTS":  the collective reference to this Agreement, any
    Registered Form Notes, the Pledge Agreements, the Subsidiary Guarantees and
    any security agreement or guarantee executed and delivered pursuant to the
    terms of subsection 6.8.

         "CREDIT PARTIES":  the collective reference to the Company and each
    Subsidiary which is a party, or which at any time becomes a party, to a
    Credit Document.

         "DEFAULT":  any of the events specified in Section 8, whether or not
    any requirement for the giving of notice, the lapse of time, or both, has
    been satisfied.

         "DISTRIBUTION AGREEMENT":  as defined in the recitals hereto.

         "DOLLARS" and "$":  dollars in lawful currency of the United States of
    America.

         "DOMESTIC LENDING OFFICE":  initially the office of each Bank
    designated as such in Schedule I; thereafter, one or more other offices of
    such Bank, as designated from time to time in a notice from such Bank to
    the Administrative Agent.

         "DOMESTIC SUBSIDIARY":  any Subsidiary of the Company other than a
    Foreign Subsidiary.

         "DSC LITIGATION":  the case entitled DSC COMMUNICATIONS CORPORATION
    AND DSC TECHNOLOGIES CORPORATION V. NEXT LEVEL COMMUNICATIONS, THOMAS R.
    EAMES AND PETER W. KEELER, Case No. 4:95cv96 in the United States District
    Court for the Eastern District of Texas, Sherman Division for which the
    final judgment was entered on June 11, 1996.

         "EFFECTIVE DATE":  as defined in subsection 5.1.

         "ENVIRONMENTAL LAWS":  any and all Federal, state, local or municipal
    laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
    requirements of any 

<PAGE>

                                                                             10


    Governmental Authority regulating, relating to or imposing liability or
    standards of conduct concerning environmental protection matters, including
    without limitation, Hazardous Materials, as now or may at any time
    hereafter be in effect.

         "ERISA":  the Employee Retirement Income Security Act of 1974, as
    amended from time to time.

         "EURODOLLAR BASE RATE":  with respect to each day during each Interest
    Period pertaining to a Eurodollar Loan, the rate per annum determined by
    the Administrative Agent to be the arithmetic mean (rounded to the nearest
    1/100th of 1%) of the offered rates for deposits in Dollars with a term
    comparable to such Interest Period that appears on the Telerate British
    Bankers Assoc. Interest Settlement Rates Page (as defined below) at
    approximately 11:00 A.M., London time, on the second full Business Day
    preceding the first day of such Interest Period; PROVIDED, HOWEVER, that if
    there shall at any time no longer exist a Telerate British Bankers Assoc.
    Interest Settlement Rates Page, "Eurodollar Base Rate" shall mean, with
    respect to each day during each Interest Period pertaining to a Eurodollar
    Loan, the rate per annum equal to the rate at which Chase is offered
    deposits in Dollars at approximately 11:00 A.M., London time, two Business
    Days prior to the first day of such Interest Period in the interbank
    eurodollar market where the eurodollar and foreign currency and exchange
    operations in respect of Dollars are then being conducted for delivery on
    the first day of such Interest Period for the number of days comprised
    therein and in an amount comparable to the amount of its Eurodollar Loan to
    be outstanding during such Interest Period.  "TELERATE BRITISH BANKERS
    ASSOC. INTEREST SETTLEMENT RATES PAGE" shall mean the display designated as
    Page 3750 on the Telerate System Incorporated Service (or such other page
    as may replace such page on such service for the purpose of displaying the
    rates at which Dollar deposits are offered by leading banks in the London
    interbank deposit market).

         "EURODOLLAR LENDING OFFICE":  initially, the office of each Bank
    designated as such in Schedule I; thereafter, one or more other offices of
    such Bank, if any, which shall be making or maintaining Eurodollar Loans as
    designated as such from time to time in a notice from such Bank to the
    Administrative Agent.

         "EURODOLLAR LOANS":  Loans the rate of interest applicable to which is
    based upon the Eurodollar Rate.


         "EURODOLLAR RATE":  with respect to each day during each Interest
    Period pertaining to a Eurodollar Loan, a rate per annum determined for
    such day in accordance with the following formula (rounded upward to the
    nearest 1/100th of 1%):

                       EURODOLLAR BASE RATE         
              -----------------------------------
              1.00 - Eurodollar Reserve Requirements

         "EURODOLLAR RESERVE REQUIREMENTS":  for any day as applied to a
    Eurodollar Loan, the aggregate (without duplication) of the rates
    (expressed as a decimal fraction) of reserve requirements in effect on such
    day (including, without limitation, basic, supplemental, marginal and
    emergency reserves under any regulations of the Board or other Governmental
    Authority having jurisdiction with respect thereto) dealing with 

<PAGE>

                                                                             11


    reserve requirements prescribed for eurodollar funding (currently referred
    to as "Eurodollar Liabilities" in Regulation D of the Board) maintained by
    a member bank of the Federal Reserve System.

         "EVENT OF DEFAULT":  any of the events specified in Section 8,
    PROVIDED that any requirement for the giving of notice, the lapse of time,
    or both, has been satisfied.

         "EXCLUDED LITIGATION":  the DSC Litigation and any other litigation
    specifically described and identified in the S-4 Filing, in each case only
    to the extent that the responsibility for the DSC Litigation or such other
    litigation, as the case may be, is borne by the party to whom the
    Distribution Agreement has allocated responsibility therefor.

         "EXISTING GI DELAWARE CREDIT AGREEMENT":  The Third Amended and
    Restated Credit Agreement dated as of August 12, 1996, as amended, to which
    GI Delaware is a party and for which Chase acts as administrative agent.

         "EXTENSIONS OF CREDIT":  the collective reference to the making of any
    Loans and the issuance of any Letters of Credit.

         "FL AFFILIATE":  any of FL & Co., the partners of FL & Co. on the
    Closing Date, any subordinated debt and equity partnership controlled by FL
    & Co., any equity partnership controlled by FL & Co., any Affiliate of FL &
    Co., any directors, executive officers or other employees or other members
    of the management of the Company or any Subsidiary thereof (or any
    "associate" (as defined in Rule 405 under the Securities Act of 1933, as
    amended) of any thereof or employee benefit plan beneficially owned by any
    thereof), the Company or any Subsidiary thereof on the Closing Date, or any
    combination of the foregoing.

         "FL & CO.":  Forstmann Little & Co., a New York partnership.

         "FACILITY FEE":  the facility fee payable by the Company pursuant to
    subsection 3.8.

         "FOREIGN SUBSIDIARY":  any Subsidiary of the Company (a) which is
    organized under the laws of any jurisdiction outside the United States
    (within the meaning of Section 7701(a)(9) of the Code), or (b) whose
    principal assets consist of capital stock or other equity interests of one
    or more Persons which conduct the major portion of their business outside
    the United States (within the meaning of Section 7701(a)(9) of the Code).

         "GAAP":  generally accepted accounting principles in the United States
    of America in effect from time to time.

         "GENERAL SEMICONDUCTOR":  as defined in the recitals hereto.

         "GI DELAWARE":  as defined in the recitals hereto.

         "GITL":  General Instrument of Taiwan, Ltd.

<PAGE>

                                                                             12


         "GOVERNMENTAL AUTHORITY":  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.

         "GUARANTEE OBLIGATION" as to any Person, any obligation of such Person
    guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
    or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the
    "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
    including, without limitation, any obligation of such Person, whether or
    not contingent (a) to purchase any such primary obligation or any property
    constituting direct or indirect security therefor, (b) to advance or supply
    funds (i) for the purchase or payment of any such primary obligation or
    (ii) to maintain working capital or equity capital of the primary obligor
    or otherwise to maintain the net worth or solvency of the primary obligor,
    (c) 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 (d) 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
    Contingent Obligation shall be deemed to be an amount equal to the stated
    or determinable amount (based on the maximum reasonably anticipated net
    liability in respect thereof as determined by the Company in good faith) of
    the primary obligation or portion thereof in respect of which such
    Guarantee Obligation is made or, if not stated or determinable, the maximum
    reasonably anticipated net liability in respect thereof (assuming such
    Person is required to perform thereunder) as determined by the Company in
    good faith; PROVIDED, HOWEVER, that the amount of any Guarantee Obligation
    associated with the Company's vendor financing programs shall be deemed to
    be the amount estimated by the Company to be its liability in connection
    therewith and for which the Company has estimated reserves in accordance
    with GAAP.

         "HAZARDOUS MATERIALS":  any substance (a) which is or becomes defined
    as a "hazardous waste," "hazardous substance," pollutant or contaminant
    under any federal, state or local statute, regulation, rule or ordinance or
    amendments thereto including, without limitation, the Comprehensive
    Environmental Response, Compensation and Liability Act (42 U.S.C. Section
     9601 et seq.) and/or the Resource Conservation and Recovery Act (42 U.S.C.
    Section  6901 et seq.); and (b) without limitation, which is or contains
    petroleum products (including crude oil or any fraction thereof), PCBs,
    asbestos, urea formaldehyde foam insulation, radon gas or infectious or
    radioactive materials.

         "INDEBTEDNESS":  of any Person, at any particular date, (a) all
    indebtedness of such Person for borrowed money or for the deferred purchase
    price of property or services (other than current trade payables or
    liabilities and deferred payment for services to employees or former
    employees incurred in the ordinary course of business and payable in
    accordance with customary practices), (b) the face amount of all letters of
    credit issued for the account of such Person and, without duplication, all
    drafts drawn thereunder, (c) all liabilities (other than Lease Obligations)
    secured by any Lien on any property owned by such Person, to the extent
    attributable to such Person's interest in such property, even though such
    Person has not assumed or become liable for the payment thereof, (d) lease 

<PAGE>

                                                                             13


    obligations of such Person which, in accordance with GAAP, should be
    capitalized and (e) all indebtedness of such Person arising under
    acceptance facilities; but excluding (y) customer deposits and interest
    payable thereon in the ordinary course of business and (z) trade and other
    accounts and accrued expenses payable in the ordinary course of business in
    accordance with customary trade terms and in the case of both clauses (y)
    and (z) above, which are not overdue for a period of more than 90 days or,
    if overdue for more than 90 days, as to which a dispute exists and adequate
    reserves in conformity with GAAP have been established on the books of such
    Person.

         "INDEMNIFIED TAXES":  as defined in subsection 3.22(a).

         "INDEMNITEE":  as defined in subsection 3.22.

         "INDEX RATE BID LOAN":  any Bid Loan bearing interest based on the
    Applicable Index Rate.

         "INDEX RATE BID LOAN REQUEST":  any Bid Loan Request requesting the
    Bid Loan Lenders to offer to make Bid Loans at an interest rate equal to
    the Applicable Index Rate plus (or minus) a margin.

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

         "INTEREST COVERAGE RATIO":  as at the last day of any fiscal quarter
    of the Company, the ratio of (a) Consolidated EBITDA for the period of four
    fiscal quarters ending on such day on a consolidated basis of the Company
    and its Subsidiaries, to (b) Consolidated Interest Expense for the period
    of four fiscal quarters ending on such day on a consolidated basis of the
    Company and its Subsidiaries.

         "INTEREST PAYMENT DATE":  (a) as to ABR Loans, the last day of each
    March, June, September and December, commencing on the first such day to
    occur after any ABR Loans are made or any Eurodollar Loans are converted to
    ABR Loans, (b) as to any Eurodollar Loan in respect of which the Company
    has selected an Interest Period of one, two or three months, the last day
    of such Interest Period, (c) as to any Eurodollar Loan in respect of which
    the Company has selected an Interest Period of six months, the day which is
    three months after the date on which such Eurodollar Loan is made or an ABR
    Loan is converted to such a Eurodollar Loan, and the last day of such
    Interest Period, (d) as to any other Eurodollar Loan, each day on which
    principal of such Eurodollar Loan is payable and (e) in the case of the
    Revolving Credit Loans, on the Revolving Credit Termination Date.

         "INTEREST PERIOD":  with respect to any Eurodollar Loan:

              (a)  initially, the period commencing on, as the case may be, the
         Borrowing Date or conversion date with respect to such Eurodollar Loan
         and ending one, two, three or six months thereafter as selected by the
         Company in its notice of borrowing as provided in subsection 2.10, 3.1
         or its notice of conversion as provided in subsection 3.2; and

<PAGE>

                                                                             14


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

    PROVIDED that the foregoing provisions relating to Interest Periods are
    subject to the following:

              (A)  if any Interest Period would otherwise end on a day which is
         not a Business Day, that 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;

              (B)  any Interest Period that would otherwise extend beyond the
         Revolving Credit Termination Date shall end on the Revolving Credit
         Termination Date, or if the Revolving Credit Termination Date shall
         not be a Business Day, on the next preceding Business Day;

              (C)  if the Company shall fail to give notice as provided above
         in clause (b), it shall be deemed to have selected a conversion of a
         Eurodollar Loan into an ABR Loan (which conversion shall occur
         automatically and without need for compliance with the conditions for
         conversion set forth in subsection 3.2);

              (D)  any Interest Period that begins on the last 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 a calendar month; and

              (E)  the Company shall select Interest Periods so as not to
         require a prepayment (to the extent practicable) or a scheduled
         payment of a Eurodollar Loan during an Interest Period for such
         Eurodollar Loan.

         "ISSUING BANK":  Chase and any other financial institution which is a
    Co-Agent, as selected by the Company, with the approval of the
    Administrative Agent and such Co-Agent, in accordance with subsection 2.5.

         "JUDGMENT CURRENCY":  as defined in subsection 10.9(b).

         "L/C APPLICATION":  a letter of credit application in the relevant
    Issuing Bank's then customary form for the type of letter of credit
    requested.

         "L/C PARTICIPATING INTEREST":  an undivided participating interest in
    the face amount of each issued and outstanding Letter of Credit and the L/C
    Application relating thereto.

<PAGE>

                                                                             15


         "L/C PARTICIPATION CERTIFICATE":  a certificate in substantially the
    form of Exhibit I hereto.

         "LEASE OBLIGATIONS":  of the Company and its Subsidiaries, as of the
    date of any determination thereof, the rental commitments of the Company
    and its Subsidiaries determined on a consolidated basis, if any, under
    leases for real and/or personal property (net of rental commitments from
    sub-leases thereof), excluding however, obligations under leases which are
    classified as Indebtedness under clause (d) of the definition of
    Indebtedness.
         
         "LETTER OF CREDIT":  a letter of credit issued by an Issuing Bank
    pursuant to the terms of subsection 2.3.

         "LEVERAGE RATIO":  as of the last day of any fiscal quarter, the ratio
    of Consolidated Total Indebtedness on a consolidated basis for the Company
    and its Subsidiaries on such day to Consolidated EBITDA for the period of
    four consecutive fiscal quarters of the Company ending on such day.

         "LIEN":  any mortgage, pledge, hypothecation, assignment, deposit
    arrangement, encumbrance, lien (statutory or other), or preference,
    priority or other security agreement or preferential arrangement of any
    kind or nature whatsoever (including, without limitation, any conditional
    sale or other title retention agreement, any financing lease having
    substantially the same economic effect as any of the foregoing, and the
    filing of any effective financing statement under the Uniform Commercial
    Code or comparable law of any jurisdiction in respect of any of the
    foregoing, except for the filing of financing statements in connection with
    Lease Obligations incurred by the Company or its Subsidiaries to the extent
    that such financing statements relate to the property subject to such Lease
    Obligations).

         "LOANS":  the collective reference to the Revolving Credit Loans, the
    Swing Line Loans and the Bid Loans; individually, a "LOAN".

         "MATERIALS OF ENVIRONMENTAL CONCERN":  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.

         "MATERIAL SUBSIDIARIES":  any Subsidiary of the Company which at any
    time has a total asset book value (including the total asset book values of
    any Subsidiaries), or for which the Company or any of its Subsidiaries
    shall have paid consideration (including the assumption of Indebtedness) in
    connection with the acquisition of the stock or the assets of such
    Subsidiary, in excess of $50,000,000, other than Foreign Subsidiaries or
    other Subsidiaries if more than 75% of the assets of such Subsidiaries are
    securities of foreign companies (such determination to be made on the basis
    of fair market value).  A Subsidiary which is a Material Subsidiary shall
    continue to be a Material Subsidiary notwithstanding that its total asset
    book value may fall to less than $50,000,000.

<PAGE>

                                                                             16


         "MONEY MARKET RATE":  for any day, with respect to any Money Market
    Rate Loan, the rate per annum quoted by a Swing Line Bank to the Company in
    accordance with subsection 2.10(a) as the rate at which such Swing Line
    Bank is willing to make such Loan.

         "MONEY MARKET RATE LOANS":  Swing Line Loans the rate of interest
    applicable to which is based upon the Money Market Rate. 

         "MULTIEMPLOYER PLAN":  a Plan which is a multiemployer plan as defined
    in Section 4001(a)(3) of ERISA.

         "NET PROCEEDS":  the aggregate cash proceeds received by the Company
    or any Subsidiary of the Company in respect of any Asset Sale, incurrence
    of Indebtedness or issuance of equity (other than cash proceeds received by
    a Subsidiary of the Company in respect of an issuance of equity by such
    Subsidiary which are used or reserved for use by such Subsidiary in
    connection with the business of such Subsidiary), and any cash payments
    received in respect of promissory notes or other non-cash consideration
    delivered to the Company or such Subsidiary in respect of an Asset Sale or
    issuance of equity (other than cash proceeds received by a Subsidiary of
    the Company in respect of promissory notes or other non-cash consideration
    delivered to the Company or such Subsidiary in respect of an issuance of
    equity by such Subsidiary which are used or reserved for use by such
    Subsidiary in connection with the business of such Subsidiary), net of
    (without duplication) (i) the reasonable expenses (including legal fees and
    brokers' and underwriters' commissions paid to third parties which are not
    Affiliates or Subsidiaries of the Company) incurred in effecting such Asset
    Sale, incurrence of Indebtedness or issuance of equity, (ii) any taxes
    reasonably attributable to such Asset Sale and, in case of an Asset Sale in
    a foreign jurisdiction, the repatriation of the proceeds of such Asset Sale
    reasonably estimated by the Company or such Subsidiary to be actually
    payable, (iii) any Indebtedness or Contractual Obligation (other than the
    Loans and other Obligations) required to be paid or retained in connection
    with such Asset Sale and (iv) the aggregate amount of reserves required in
    the Company's reasonable judgment to be maintained on the books of the
    Company in order to pay contingent liabilities with respect to such Asset
    Sale, PROVIDED that amounts deducted from aggregate proceeds pursuant to
    clause (iv) and not actually paid by the Company or any of its Subsidiaries
    in liquidation of such contingent liabilities shall be deemed to be Net
    Proceeds and shall be prepaid in accordance with subsection 3.5 at such
    time as such contingent liabilities shall cease to be obligations of the
    Company or any of its Subsidiaries.

         "NEXTLEVEL":  as defined in the recitals hereto.

         "NON-U.S. BANK":  as defined in subsection 3.17(e).

         "OBLIGATIONS":  the unpaid principal of and interest on the Loans and
    all other obligations and liabilities of the Company to the Administrative
    Agent, the Co-Agents or the Banks, whether direct or indirect, absolute or
    contingent, due or to become due, now existing or hereafter incurred, which
    may arise under, out of, or in connection with, this Agreement, the other
    Credit Documents, any Letter of Credit or L/C Application, any agreements
    between the Company and any Bank or any Affiliate of a Bank relating to 

<PAGE>

                                                                             17


    interest rate, currency or similar swap and hedging arrangements or any
    other document made, delivered or given in connection therewith, whether on
    account of principal, interest, reimbursement obligations, fees,
    indemnities, costs, expenses (including, without limitation, all fees and
    disbursements of counsel to the Administrative Agent, the Co-Agents or any
    Bank) or otherwise.

         "OTHER TAXES":  as defined in subsection 3.22(b).

         "PARTICIPANT":  as defined in subsection 10.6(b).

         "PARTICIPATING BANK":  any Bank (other than the Issuing Bank with
    respect to such Letter of Credit) with respect to its L/C Participating
    Interest in each Letter of Credit.

         "PBGC":  the Pension Benefit Guaranty Corporation established pursuant
    to Subtitle A of Title IV of ERISA.

         "PERSON":  an individual, partnership, corporation, limited liability
    company, business trust, joint stock company, trust, unincorporated
    association, joint venture, Governmental Authority or other entity of
    whatever nature.

         "PLAN":  any pension plan which is covered by Title IV of ERISA and in
    respect of which the Company or a Commonly Controlled Entity is an
    "employer" as defined in Section 3(5) of ERISA.

         "PLEDGE AGREEMENTS":  the collective reference to the Company Pledge
    Agreement and the Subsidiary Pledge Agreements; individually, a "PLEDGE
    AGREEMENT".

         "PLEDGED STOCK":  as defined in the respective Pledge Agreements.

         "POWER SEMICONDUCTOR BUSINESS":  as defined in the recitals hereto.

         "PROPERTIES":  as defined in subsection 4.17.

         "REFUNDED SWING LINE LOANS":  as defined in subsection 2.10(b).

         "REFUNDING DATE":  as defined in subsection 2.10(c).

         "REGISTER":  as defined in subsection 10.6.

         "REGISTERED FORM NOTE":  as defined in subsection 3.21(e).

         "REGULATION G":  Regulation G of the Board, as from time to time in
    effect.

         "REGULATION U":  Regulation U of the Board, as from time to time in
    effect.

         "RELATED DOCUMENT":  any agreement, certificate, document or
    instrument relating to a Letter of Credit.

<PAGE>

                                                                             18


         "RELEASE BANKS":  at a particular time Banks that hold Revolving
    Credit Commitments in an aggregate principal amount equal to at least 75%
    of the aggregate Revolving Credit Commitments.

         "REORGANIZATION":  with respect to a Multiemployer Plan, the condition
    that such Plan is in reorganization as such term is used in Section 4241 of
    ERISA.

         "REPORTABLE EVENT":  any of the events set forth in Section 4043(c) of
    ERISA or the regulations thereunder.

         "REQUIRED BANKS":  at a particular time Banks that hold Revolving
    Credit Commitments in an aggregate principal amount equal to at least 51%
    of the aggregate Revolving Credit Commitments, PROVIDED, however, that for
    the purposes of clause (y)(ii) of Section 8, Required Banks shall mean
    Banks that hold at least 51% of (a) the aggregate then outstanding
    principal amount of the Revolving Credit Loans, (b) the aggregate
    outstanding principal amount of Bid Loans, as of the most recent date of
    calculation of such amount pursuant to subsection 3.5(b), (c) the L/C
    Participating Interests in the aggregate amount then available to be drawn
    under all outstanding Letters of Credit and (d) the aggregate then
    outstanding principal amount of Revolving L/C Obligations.

         "REQUIREMENT OF LAW":  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 (including, without
    limitation, Environmental Laws) 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 property or to which such Person or
    any of its property is subject.

         "RESPONSIBLE OFFICER":  the chief executive officer or the chief
    operating officer of the Company or, with respect to financial matters, the
    chief financial officer or controller of the Company.

         "RESTRICTED PAYMENT":  as defined in subsection 7.10.

         "REVOLVING CREDIT COMMITMENT":  as to any Bank, its obligations to
    make Revolving Credit Loans to the Company pursuant to subsection 2.1, and
    to purchase its L/C Participating Interest in any Letter of Credit, in an
    aggregate amount on the Closing Date not to exceed at any time the amount
    set forth opposite such Bank's name in Schedule I under the heading
    "Revolving Credit" and in an aggregate amount not to exceed at any time the
    amount equal to such Bank's Revolving Credit Commitment Percentage of the
    aggregate Revolving Credit Commitments, as the aggregate Revolving Credit
    Commitments may be reduced from time to time pursuant to this Agreement;
    collectively, as to all the Banks, the "REVOLVING CREDIT COMMITMENTS".

         "REVOLVING CREDIT COMMITMENT PERIOD":  the period from and including
    the Closing Date to but not including the Revolving Credit Termination
    Date.

         "REVOLVING CREDIT LOAN" and "REVOLVING CREDIT LOANS":  as defined in
    subsection 2.1(a).

<PAGE>

                                                                             19


         "REVOLVING CREDIT TERMINATION DATE":  the earlier of (i) December 31,
    2002 and (ii) any other date on which the Revolving Credit Commitments
    shall terminate hereunder.

         "REVOLVING L/C OBLIGATIONS":  the obligations of the Company to
    reimburse the relevant Issuing Bank for any payments made by the relevant
    Issuing Bank under any Letter of Credit that have not been reimbursed by
    the Company pursuant to subsection 2.7.

         "S-4 FILING":  Amendment No. 4 to the Joint Registration Statement on
    Form S-4 filed by Next Level and CommScope with the Securities and Exchange
    Commission on June 13, 1997 with respect to the Spin-Off.

         "SINGLE EMPLOYER PLAN":  any Plan which is covered by Title IV of
    ERISA, but which is not a Multiemployer Plan.

         "SPIN-OFF":  as defined in the recitals hereto.

         "SPIN-OFF DOCUMENTS":  the collective reference to (i) the
    Distribution Agreement, and (ii) the Ancillary Agreements (as defined in
    the Distribution Agreement as in effect on the date hereof), as the same
    may be amended, modified or supplemented from time to time.

         "SPIN-OFF TRANSACTIONS":  as defined in the recitals hereto.

         "STANDBY L/C":  an irrevocable Letter of Credit under which the
    relevant Issuing Bank agrees to make payments in Dollars for the account of
    the Company, on behalf of the Company or any Subsidiary thereof, in respect
    of obligations of the Company or a Subsidiary thereof, including, without
    limitation, obligations to government entities and incurred pursuant to
    contracts made or performance undertaken, or to be undertaken, or like
    matters relating to contracts to which the Company or a Subsidiary thereof
    is or proposes to become a party in the ordinary course of the Company's or
    such Subsidiary's business, including, without limitation, for insurance
    purposes or in respect of advance payments or as bid or performance bonds.

         "SUBSIDIARY":  as to any Person, any corporation, partnership or other
    entity of which shares of stock of each class or other equity interests
    having ordinary voting power (other than stock 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 by such Person or by one or more Subsidiaries
    of such Person or by such Person and one or more Subsidiaries of such
    Person; PROVIDED, however, that NextLevel and its direct or indirect
    Subsidiaries, including but not limited to CommScope and its direct and
    indirect Subsidiaries, shall be deemed not to be a Subsidiary of the
    Company hereunder for all purposes, including, but not limited to,
    financial reporting purposes.  A Subsidiary shall be deemed wholly-owned by
    a Person who owns all of the voting shares of such Subsidiary except for
    directors' qualifying or similar shares.

<PAGE>

                                                                             20


         "SUBSIDIARY GUARANTEE":  the Subsidiary Guarantee to be executed by
    each Subsidiary Guarantor in favor of the Administrative Agent, for the
    ratable benefit of the Banks, substantially in the form of Exhibit D
    hereto, as the same may be amended, supplemented or otherwise modified from
    time to time.

         "SUBSIDIARY GUARANTOR":  any Subsidiary which enters into a Subsidiary
    Guarantee pursuant to subsection 6.8.

         "SUBSIDIARY PLEDGE AGREEMENTS":  the Subsidiary Pledge Agreement to be
    executed by each Subsidiary Pledgor in favor of the Administrative Agent,
    for the ratable benefit of the Banks, substantially in the form of Exhibit
    F hereto, as the same may be amended, supplemented or otherwise modified
    from time to time.

         "SUBSIDIARY PLEDGOR":  any Subsidiary which enters into a Pledge
    Agreement pursuant to subsection 6.8.

         "SWING LINE BANK":  Chase and each Bank then acting as a Co-Agent
    hereunder selected by the Company which has agreed to make Swing Line Loans
    to the Company.

         "SWING LINE COMMITMENT":  each Swing Line Bank's obligation to make
    Swing Line Loans pursuant to subsection 2.10.

         "SWING LINE LOAN" and "SWING LINE LOANS":  as defined in subsection
    2.10(a).

         "SWING LINE LOAN PARTICIPATION CERTIFICATE":  a certificate in
    substantially the form of Exhibit J hereto.

         "TAIWAN MORTGAGE INDEBTEDNESS":  the Indebtedness of the Company
    and/or GITL in an aggregate principal amount not to exceed $60,000,000
    (without duplication) at any time secured solely, directly or indirectly,
    by a mortgage on the Taiwan Mortgaged Real Property, and any refinancing
    thereof.

         "TAIWAN MORTGAGED REAL PROPERTY":  the real estate owned by GITL,
    including the 10.2 acres of land and buildings thereon located at 233 Pao
    Chiao Road, Hsintien, Taipei, Taiwan.

         "TAXES":  any tax, assessment, or other charge or levy and any
    liabilities with respect thereto, including any penalties, additions to
    tax, fines or interest thereon, imposed by or on behalf of any Governmental
    Authority or any taxing authority thereof.

         "TYPE":  as to any Loan, its nature as an ABR Loan, a Eurodollar Loan
    or a Money Market Rate Loan.

         "UNIFORM CUSTOMS":  the Uniform Customs and Practice for Documentary
    Credits (1993 Revision), International Chamber of Commerce Publication No.
    500 (or any successor publication), as the same may be amended from time to
    time.

<PAGE>

                                                                             21


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

         (b) As used herein, any other Credit Document and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Company and its Subsidiaries not defined in subsection 1.1 and accounting
terms partly defined in subsection 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP.

         (c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, subsection,
schedule and exhibit references are to this Agreement unless otherwise
specified.

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

         (e) Reference herein to the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as a whole shall refer to the Company and its Subsidiaries taken as a
whole from time to time after giving effect to the Spin-Off and all transactions
contemplated thereby, including the financing thereof.


         SECTION 2.     AMOUNT AND TERMS OF REVOLVING
                        CREDIT COMMITMENTS

         2.1 REVOLVING CREDIT COMMITMENTS. (a)  Subject to the terms and
conditions hereof, each Bank agrees to extend credit to the Company from time to
time on any Borrowing Date during the Revolving Credit Commitment Period (i) by
purchasing an L/C Participating Interest in each Letter of Credit issued by an
Issuing Bank and (ii) by making loans in Dollars (individually, a "REVOLVING
CREDIT LOAN", and collectively the "REVOLVING CREDIT LOANS") to the Company from
time to time.  Notwithstanding the foregoing, in no event shall any Revolving
Credit Loan or Swing Line Loan be made, or any Letter of Credit be issued, if,
after giving effect to such making or issuance and the use of proceeds thereof
as irrevocably directed by the Company, the Aggregate Extensions of Credit would
exceed the aggregate Revolving Credit Commitments. During the Revolving Credit
Commitment Period, the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans or Swing Line Loans in whole or
in part, and reborrowing, all in accordance with the terms and conditions
hereof, and/or by having the Issuing Banks issue Letters of Credit, having such
Letters of Credit expire undrawn upon or if drawn upon, reimbursing the relevant
Issuing Bank for such drawing, and having the Issuing Banks issue new Letters of
Credit.  

         (b) Each borrowing of Revolving Credit Loans pursuant to the Revolving
Credit Commitments shall be in an aggregate principal amount of the lesser of
(i) $3,000,000, or a whole multiple of $1,000,000 in excess thereof, and (ii)
the Available Revolving Credit Commitments, except that any borrowing of a
Revolving Credit Loan to be used solely to pay a like amount of Swing Line Loans
may be in the aggregate principal amount of such Swing Line Loans.

<PAGE>

                                                                             22


         2.2 PROCEEDS OF REVOLVING CREDIT LOANS.  The Company shall use the
proceeds of Revolving Credit Loans solely for the purposes of (a) financing the
payment of fees and expenses incurred in connection with this Agreement and the
Spin-Off, (b) making payments to the Issuing Banks to reimburse the Issuing
Banks for drawings made under the Letters of Credit, (c) repaying Swing Line
Loans, Bid Loans and Revolving Credit Loans after the Closing Date,
(d) financing general working capital needs of the Company or any of its
Subsidiaries and (e) other general corporate purposes of the Company or any of
its Subsidiaries, including, without limitation, supporting payment of
commercial paper issued by the Company in the United States commercial paper
market, financing acquisitions, refinancing indebtedness of the Company or its
Subsidiaries, payment of dividends, and repurchases of debt and equity
securities issued by the Company, all in accordance with the terms and
conditions hereof.

         2.3 ISSUANCE OF LETTERS OF CREDIT. (a)  The Company may from time to
time request an Issuing Bank to issue a Letter of Credit, which may be either a
Standby L/C or a Commercial L/C, by delivering to the Administrative Agent at
its address specified in subsection 10.2 and such Issuing Bank an L/C
Application completed to the satisfaction of such Issuing Bank, together with
the proposed form of such Letter of Credit (which shall comply with the
applicable requirements of paragraph (b) below) and such other certificates,
documents and other papers and information as such Issuing Bank may reasonably
request; PROVIDED that if such Issuing Bank informs the Company that it is for
any reason unable to open such Letter of Credit, the Company may request another
Issuing Bank or, if all Issuing Banks are unable to do so, any Bank to open such
Letter of Credit upon the same terms offered to the initial proposed Issuing
Bank and each reference to an Issuing Bank for purposes of the Credit Documents
shall be deemed to be a reference to such Bank and PROVIDED FURTHER that no
Issuing Bank shall issue any Letter of Credit if, after giving effect to such
issuance, the sum of (i) the aggregate amount then available to be drawn under
all outstanding Letters of Credit and (ii) the aggregate amount of Revolving L/C
Obligations would exceed $50,000,000.

         (b) Each Letter of Credit issued hereunder shall, among other things,
(i) be denominated in Dollars, (ii) be in such form requested by the Company as
shall be acceptable to the relevant Issuing Bank in its sole discretion and
(iii) have an expiry date occurring not later than the earlier of (x) 365 days
after the date of issuance of such Letter of Credit and (y) the date five
Business Days prior to the Revolving Credit Termination Date; PROVIDED that
unless the Issuing Bank notifies the Company not less than 30 days prior to the
expiry of such Letter of Credit that the Issuing Bank is not willing to extend
it, any Letter of Credit which has an expiry date of 365 days after its date of
issuance may by its terms be automatically extended for periods of one year from
the current or any future expiration date thereof (but not to any date which is
later than five Business Days prior to the Revolving Credit Termination Date). 
Each L/C Application and each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.

         2.4 PARTICIPATING INTERESTS.  Effective in the case of each Letter of
Credit opened by an Issuing Bank as of the date of the opening thereof, such
Issuing Bank agrees to allot and does allot, to itself and each other Bank, and
each Bank severally and irrevocably agrees to take and does take in such Letter
of Credit and the related L/C Application, an L/C Participating Interest in a
percentage equal to such Bank's Revolving Credit Commitment Percentage.

<PAGE>

                                                                             23


         2.5 PROCEDURE FOR OPENING LETTERS OF CREDIT.  Upon receipt of any L/C
Application from the Company in respect of a Letter of Credit, the
Administrative Agent will promptly notify each Bank thereof.  The relevant
Issuing Bank will process such L/C Application, and the other certificates,
documents and other papers delivered to such Issuing Bank in connection
therewith, upon receipt thereof in accordance with its customary procedures and,
subject to the terms and conditions hereof, shall promptly open such Letter of
Credit by issuing the original of such Letter of Credit to the beneficiary
thereof and by furnishing a copy thereof to the Company and each of the other
Banks, PROVIDED that no such Letter of Credit shall be issued if subsection 2.1
would be violated thereby.

         2.6 PAYMENTS IN RESPECT OF LETTERS OF CREDIT. (a)  The Company agrees
forthwith upon demand by the relevant Issuing Bank and otherwise in accordance
with the terms of the L/C Application relating thereto (i) to reimburse such
Issuing Bank, through the Administrative Agent, for any payment made by such
Issuing Bank under any Letter of Credit on the next Business Day of such payment
by such Issuing Bank and (ii) to pay interest on any unreimbursed portion of any
such payment from the date of such payment until reimbursement in full thereof
at a rate per annum equal to (A) prior to the date which is one Business Day
after the day on which such Issuing Bank demands reimbursement from the Company
for such payment, the ABR and (B) on such date and thereafter, the ABR plus 2%.

         (b) In the event that an Issuing Bank makes a payment under any Letter
of Credit and is not reimbursed in full therefor forthwith upon demand of such
Issuing Bank, and otherwise in accordance with the terms of the L/C Application
relating to such Letter of Credit, such Issuing Bank will promptly notify each
other Bank through the Administrative Agent.  Forthwith upon its receipt of any
such notice, each other Bank will transfer to such Issuing Bank, through the
Administrative Agent, in immediately available funds, an amount equal to such
other Bank's PRO RATA share of the Revolving L/C Obligation arising from such
unreimbursed payment.  Upon its receipt from such other Bank of such amount, the
Administrative Agent will complete, execute and deliver to such other Bank an
L/C Participation Certificate dated the date of such receipt and in such amount.

         (c) Whenever, at any time after an Issuing Bank has made a payment
under any Letter of Credit and has received from any other Bank such other
Bank's PRO RATA share of the Revolving L/C Obligation arising therefrom, such
Issuing Bank receives any reimbursement on account of such Revolving L/C
Obligation or any payment of interest on account thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Bank's participating interest was outstanding and funded), such
Issuing Bank will promptly distribute to such other Bank, through the
Administrative Agent, such other Bank's PRO RATA share thereof in like funds as
received; PROVIDED, that in the event that the receipt by such Issuing Bank of
such reimbursement or such payment of interest (as the case may be) is required
to be returned, such other Bank will return to such Issuing Bank, through the
Administrative Agent, any portion thereof previously distributed by such Issuing
Bank to it in like funds as such reimbursement or payment is required to be
returned by such Issuing Bank.

         2.7 THE BID LOANS.  Subject to the terms and conditions of this
Agreement, the Company may borrow Bid Loans from time to time during the Bid
Loan Commitment Period on any Business Day (in the case of Bid Loans made
pursuant to an Absolute Rate Bid Loan Request) or any Business Day (in the case
of Bid Loans made pursuant to an Index Rate Bid 

<PAGE>

                                                                             24


Loan Request).  The Company shall designate Banks from time to time as Bid Loan
Lenders by written notice to the Administrative Agent.  The Administrative Agent
shall transmit each such notice of designation promptly to each designated Bid
Loan Lender.  Each Bid Loan shall bear interest at rates, be payable on the
dates, be made in Dollars, and shall mature on the date, agreed between the
Company and the relevant Bid Loan Lender at the time such Bid Loan is made;
PROVIDED, that the maturity date for each Bid Loan (i) shall be not less than 15
days nor more than 180 days after the Borrowing Date therefor with respect to an
Absolute Rate Bid Loan and (ii) shall be on the last day of an Interest Period
with respect to an Index Rate Bid Loan (and, in each case, in any event shall be
not later than the Revolving Credit Termination Date).  Within the limits and on
the conditions hereinafter set forth with respect to Bid Loans, the Company from
time to time may borrow, repay and reborrow Bid Loans; PROVIDED that no Bid Loan
shall be made if, after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, the Aggregate Extensions of
Credit would exceed the aggregate amount of the Revolving Credit Commitments.

         2.8 PROCEDURE FOR BID LOAN BORROWING. (a)  The Company shall request
Bid Loans by delivering a Bid Loan Request to the Administrative Agent, not
later than 12:00 Noon (New York City time) four Business Days prior to the
proposed Borrowing Date (in the case of an Index Rate Bid Loan Request), and not
later than 10:00 A.M. (New York City time) one Business Day prior to the
proposed Borrowing Date (in the case of an Absolute Rate Bid Loan Request). 
Each Bid Loan Request may solicit bids for Bid Loans in an aggregate principal
amount equal to $10,000,000 or an integral multiple of $5,000,000 in excess
thereof and having not more than four alternative maturity dates.  The
Administrative Agent shall notify each Bid Loan Lender promptly by telex or
facsimile transmission of the contents of each Bid Loan Request received by the
Administrative Agent. 

         (b) In the case of an Index Rate Bid Loan Request, upon receipt of
notice from the Administrative Agent of the contents of such Bid Loan Request,
each Bid Loan Lender may elect, in its sole discretion, to offer irrevocably to
make one or more Bid Loans at the Applicable Index Rate plus or minus a margin
determined by such Bid Loan Lender in its sole discretion for each such Bid
Loan.  Any such irrevocable offer shall be made by delivering a Bid Loan Offer
to the Administrative Agent, before 10:00 A.M. (New York City time) on the day
that is three Business Days before the proposed Borrowing Date, setting forth:

         (1) the maximum amount of such Bid Loans for each maturity date and
    the aggregate maximum amount of such Bid Loans for all maturity dates which
    such Bank would be willing to make (which amounts may, subject to
    subsection 2.7, exceed such Bid Loan Lender's Revolving Credit Commitment);
    and

         (2) the margin above or below the Applicable Index Rate at which such
    Bid Loan Lender is willing to make each such Bid Loan.

The Administrative Agent shall advise the Company promptly but no later than
10:30 A.M. (New York City time) on the date which is three Business Days before
the proposed Borrowing Date of the contents of each such Bid Loan Offer received
by it.  If the Administrative Agent, in its capacity as a Bid Loan Lender, shall
elect, in its sole discretion, to make any such Bid Loan Offer, it shall advise
the Company of the contents of its Bid Loan Offer before 9:45 A.M. (New York
City time) on the date which is three Business Days before the proposed
Borrowing Date.

<PAGE>

                                                                             25


         (c) In the case of an Absolute Rate Bid Loan Request, upon receipt of
notice from the Administrative Agent of the contents of such Bid Loan Request,
each Bid Loan Lender may elect, in its sole discretion, to offer irrevocably to
make one or more Bid Loans at a rate of interest determined by such Bid Loan
Lender in its sole discretion for each such Bid Loan.  Any such irrevocable
offer shall be made by delivering a Bid Loan Offer to the Administrative Agent
before 10:00 A.M. (New York City time) on the proposed Borrowing Date, setting
forth:

         (1)  the maximum amount of such Bid Loans for each maturity date, and
    the aggregate maximum amount of such Bid Loans for all maturity dates,
    which such Bid Loan Lender would be willing to make (which amounts may,
    subject to subsection 2.7, exceed such Bid Loan Lender's Revolving Credit
    Commitment); and

         (2)  the fixed rate of interest at which such Bid Loan Lender is
    willing to make each such Bid Loan.

The Administrative Agent shall advise the Company promptly but in no event later
than 10:30 A.M. (New York City time) on the proposed Borrowing Date of the
contents of each such Bid Loan Offer received by it.  If the Administrative
Agent, in its capacity as a Bid Loan Lender, shall elect, in its sole
discretion, to make any such Bid Loan Offer, it shall advise the Company of the
contents of its Bid Loan Offer before 9:45 A.M. (New York City time) on the
proposed Borrowing Date.

         (d) Before 12:00 noon (New York City time) three Business Days before
the proposed Borrowing Date (in the case of Bid Loans requested by an Index Rate
Bid Loan Request) and before 11:00 A.M. (New York City time) on the proposed
Borrowing Date (in the case of Bid Loans requested by an Absolute Rate Bid Loan
Request), the Company, in its absolute discretion, shall:

         (1)  cancel such Bid Loan Request by giving the Administrative
    Agent telephone notice to that effect, or

         (2)  by giving telephone notice to the Administrative Agent
    (immediately confirmed by delivery to the Administrative Agent of a
    Bid Loan Confirmation in writing or by telex or fax transmission)(1)
    subject to the provisions of subsection 2.8(e), accept one or more of
    the offers made by any Bid Loan Lender or Bid Loan Lenders pursuant to
    subsection 2.8(b) or subsection 2.8(c), as the case may be, of the
    amount of Bid Loans for each relevant maturity date and (2) reject any
    remaining offers made by Bid Loan Lenders pursuant to subsection
    2.8(b) or subsection 2.8(c), as the case may be.

If the Company fails to give any such notice prior to such time, such Bid Loan
Request shall be deemed to have been canceled.

         (e) The Company's acceptance of Bid Loans in response to any Bid Loan
Request shall be subject to the following limitations:

         (1)  the principal amount of Bid Loans accepted for each maturity date
    specified 

<PAGE>

                                                                             26


    by any Bid Loan Lender in its Bid Loan Offer shall not exceed the maximum
    amount for such maturity date specified in such Bid Loan Offer;

         (2)  the aggregate principal amount of Bid Loans accepted for all
    maturity dates specified by any Bid Loan Lender in its Bid Loan Offer shall
    not exceed the aggregate maximum amount specified in such Bid Loan Offer
    for all such maturity dates;

         (3)  the Company may not accept offers for Bid Loans for any maturity
    date in an aggregate principal amount in excess of the maximum principal
    amount of Bid Loans requested in the related Bid Loan Request for such
    maturity date; AND

         (4)  if the Company accepts any of such offers, it must accept offers
    based solely upon pricing for such relevant maturity date and upon no other
    criteria whatsoever and if two or more Bid Loan Lenders submit offers for
    any maturity date at identical pricing and the Company accepts any of such
    offers but does not wish to (or by reason of the limitations set forth in
    subsection 2.7 or in clause 2.8(e)(3) cannot) borrow the total amount
    offered by such Bid Loan Lenders with such identical pricing, the Company
    shall accept offers from all of such Bid Loan Lenders in amounts allocated
    among them PRO RATA according to the amounts offered by such Bid Loan
    Lenders (or as nearly PRO RATA as shall be practicable after giving effect
    to the requirement that Bid Loans made by a Bid Loan Lender on a Borrowing
    Date for each relevant maturity date shall be in a principal amount of
    $5,000,000 or an integral multiple of $1,000,000 in excess thereof). 

         (f) If the Company notifies the Administrative Agent that a Bid Loan
Request is cancelled pursuant to subsection 2.8(d)(1), the Administrative Agent
shall give prompt telephone notice thereof to the Bid Loan Lenders.

         (g) If the Company accepts pursuant to subsection 2.8(d)(2) one or
more of the offers made by any Bid Loan Lender or Bid Loan Lenders, the
Administrative Agent promptly shall notify each Bid Loan Lender which has made
such a Bid Loan Offer of (i) the aggregate amount of such Bid Loans to be made
on such Borrowing Date for each maturity date and (ii) the acceptance or
rejection of any offers to make such Bid Loans made by such Bid Loan Lender. 
Before 12:00 Noon (New York City time) on the Borrowing Date specified in the
applicable Bid Loan Request, each Bid Loan Lender whose Bid Loan Offer has been
accepted shall make available to the Administrative Agent at its office set
forth in subsection 10.2 the amount of Bid Loans to be made by such Bid Loan
Lender, in immediately available funds.  The Administrative Agent will make such
funds available to the Company as soon as practicable on such date at the
Administrative Agent's aforesaid address.  As soon as practicable after each
Borrowing Date, the Administrative Agent shall notify each Bank of the aggregate
amount of Bid Loans advanced on such Borrowing Date and the respective maturity
dates thereof.

         (h) Unless otherwise agreed by the Bid Loan Lender making a Bid Loan,
such Bid Loan may not be optionally prepaid prior to the scheduled maturity date
thereof.

         2.9 BID LOAN PAYMENTS. (a)  The Company shall repay to the
Administrative Agent for the account of each Bid Loan Lender which has made a
Bid Loan (or the Bid Loan Assignee in respect thereof, as the case may be) on
the applicable Bid Loan Maturity Date the then unpaid principal amount of such
Bid Loan.  The Company shall not have the right to prepay 

<PAGE>

                                                                             27


any principal amount of any Bid Loan except with the consent of the relevant Bid
Loan Lender.

         (b) The Company shall pay interest on the unpaid principal amount of
each Bid Loan from the Borrowing Date to the applicable Bid Loan Maturity Date
at the rate of interest specified in the Bid Loan Offer accepted by the Company
in connection with such Bid Loan (calculated on the basis of a 360-day year for
actual days elapsed), payable on each applicable Bid Loan Interest Payment Date.

         (c) If all or a portion of the principal amount of any Bid Loan shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue principal amount shall, without limiting any rights of
any Bank under this Agreement, bear interest from the date on which such payment
was due at a rate per annum which is 2% above the rate which would otherwise be
applicable to such Bid Loan until the stated maturity date of such Bid Loan, and
for each day thereafter at a rate per annum which is 2% above the ABR, in each
case until paid in full (as well after as before judgment). 

         2.10 SWING LINE COMMITMENT. (a)  Subject to the terms and conditions
hereof, each Swing Line Bank agrees to make swing line loans (individually, a
"SWING LINE LOAN"; collectively, the "SWING LINE LOANS") to the Company from
time to time during the Revolving Credit Commitment Period in Dollars in an
aggregate principal amount (when added together with all other Swing Line Loans)
at any one time outstanding not to exceed $30,000,000, PROVIDED that at no time
may the Aggregate Extensions of Credit exceed the Revolving Credit Commitments. 
Amounts borrowed by the Company under this subsection may be repaid and, through
but excluding the Revolving Credit Termination Date, reborrowed.

         The Swing Line Loans may from time to time be (i) ABR Loans, (ii)
Money Market Rate Loans or (iii) a combination thereof, as determined by the
Company and notified to the Administrative Agent and the applicable Swing Line
Bank in accordance herewith, and shall not be entitled to be converted into
Eurodollar Loans.  The Company may, on any Borrowing Date for Swing Line Loans
and prior to the time that an irrevocable notice requesting such Swing Line
Loans must be made pursuant to this subsection 2.10(a), request a quote of the
Money Market Rate which would be applicable for such Swing Line Loans from a
Swing Line Bank, specifying the amount of the proposed Money Market Rate Loans
and the maturity date thereof (which shall be no less than one and no more than
30 days following such Borrowing Date).  Upon receipt of such quote, the Company
shall promptly (but not later than the time that an irrevocable notice
requesting such Swing Line Loans must be made pursuant to this subsection
2.10(a)) notify the Administrative Agent and the applicable Swing Line Bank
whether it requests such Swing Line Bank to make Money Market Rate Loans at such
Money Market Rate.  The Company shall give the Administrative Agent and the
applicable Swing Line Bank irrevocable notice (which notice must be received by
the Administrative Agent and the applicable Swing Line Bank prior to 12:00 Noon,
New York City time) on the requested Borrowing Date specifying the amount of
each requested Swing Line Loan, which shall be in minimum amount of (i) in the
case of Swing Line Loans which are ABR Loans, $500,000 or a whole multiple
thereof and (ii) in the case of Swing Line Loans which are Money Market Rate
Loans, $2,000,000 or a whole multiple of $1,000,000 in excess thereof.

         The proceeds of each Swing Line Loan will be made available by the
applicable Swing Line Bank to the Company by crediting the specified account of
the Company with such 

<PAGE>

                                                                             28


proceeds in the manner from time to time agreed by the Company and the
applicable Swing Line Bank.  The proceeds of Swing Line Loans may be used solely
for the purposes referred to in subsection 2.2. 

         (b) Each Swing Line Bank (i) at any time in its sole and absolute
discretion may, (ii) if any Event of Default has occurred and is continuing,
shall and (iii) on the thirtieth day (or if such day is not a Business Day, the
next Business Day) after the Borrowing Date with respect to any Swing Line Loans
shall, on behalf of the Company (which hereby irrevocably directs each Swing
Line Bank to act on its behalf), request each Bank, including such Swing Line
Bank, to make a Revolving Credit Loan in Dollars to the Company (which shall be
initially an ABR Loan) in an amount equal to such Bank's Revolving Credit
Commitment Percentage of such Swing Line Loans (the "REFUNDED SWING LINE LOANS")
outstanding on the date such notice is given.  Unless any of the events
described in paragraph (f) of Section 8 shall have occurred (in which event the
procedures of paragraph (c) of this subsection shall apply) each Bank shall make
the proceeds of its Revolving Credit Loan available to the Administrative Agent
for the account of the applicable Swing Line Bank at the office of the
Administrative Agent located at 270 Park Avenue, New York, New York 10017 prior
to 12:00 Noon (New York City time) in funds immediately available on the
Business Day next succeeding the date such notice is given.  The proceeds of
such Revolving Credit Loans shall be immediately applied to repay the Refunded
Swing Line Loans.

         (c) If prior to the making of a Revolving Credit Loan pursuant to
paragraph (b) of this subsection one of the events described in paragraph (f) of
Section 8 shall have occurred, each Bank will, on the date such Loan would
otherwise have been made (the "REFUNDING DATE"), purchase an undivided
participating interest in the Refunded Swing Line Loans in Dollars equal to its
Revolving Credit Commitment Percentage of such Refunded Swing Line Loans.  On
the Refunding Date each Bank will immediately transfer to the Administrative
Agent, for the account of the applicable Swing Line Bank, in immediately
available funds, the amount of its participation in Dollars and upon receipt
thereof the Administrative Agent and the applicable Swing Line Bank will deliver
to such Bank a Swing Line Loan Participation Certificate dated the date of
receipt of such funds and in such amount.

         (d) Whenever, at any time after the Administrative Agent or a Swing
Line Bank has received from any Bank such Bank's participating interest in a
Swing Line Loan, the Administrative Agent or such Swing Line Bank, as the case
may be, receives any payment on account thereof, the Administrative Agent or
such Swing Line Bank, as the case may be, will promptly distribute to such Bank
its participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such Bank's
participating interest was outstanding and funded) in like funds as received;
PROVIDED, HOWEVER, that in the event that such payment received by the
Administrative Agent or such Swing Line Bank, as the case may be, is required to
be returned, such Bank will return to the Administrative Agent or such Swing
Line Bank, as the case may be, any portion thereof previously distributed by the
Administrative Agent or such Swing Line Bank, as the case may be, to it in like
funds as such payment is required to be returned by the Administrative Agent or
such Swing line Bank, as the case may be.

         (e) Each Bank's obligation to make Revolving Credit Loans pursuant to
subsection 2.10(b) shall be absolute and unconditional and shall not be affected
by any 

<PAGE>

                                                                             29


circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have against any other
Bank or the Company, or the Company may have against any Bank or any other
Person, as the case may be, for any reason whatsoever; (ii) the occurrence or
continuance of a Default or an Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Company or any of its Subsidiaries;
(iv) any breach of this Agreement by the Company or any other Bank (not
including any Swing Line Bank); or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing. 
         
         2.11 PARTICIPATIONS.  Each Bank's obligation to purchase participating
interests pursuant to subsections 2.4 and 2.10(c) is absolute and unconditional
as set forth in subsection 3.15.


         SECTION 3.     GENERAL PROVISIONS APPLICABLE TO
                        LOANS AND LETTERS OF CREDIT

         3.1 PROCEDURE FOR BORROWING. (a)  Except with respect to Swing Line
Loans, for which borrowing procedures are set forth in subsection 2.10, the
Company may borrow under the Commitments on any Business Day, if the borrowing
is of Eurodollar Loans, or on any Business Day, if the borrowing is of ABR
Loans, PROVIDED that, with respect to the borrowings, if any, to take place on
the Closing Date, the Company shall give the Administrative Agent irrevocable
notice (which notice must be received by the Administrative Agent prior to 10:00
A.M., New York City time, on the Closing Date), and with respect to any
subsequent borrowings, the Company shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (i) three Business Days prior to the
requested Borrowing Date if all or any part of the Loans are to be Eurodollar
Loans and (ii) one Business Day prior to the requested Borrowing Date if the
borrowing is to be solely of ABR Loans) specifying (A) the amount of the
borrowing, (B) whether such Loans are initially to be Eurodollar Loans or ABR
Loans, or a combination thereof, and (C) if the borrowing is to be entirely or
partly Eurodollar Loans, the length of the Interest Period for such Eurodollar
Loans.  Upon receipt of such notice the Administrative Agent shall promptly
notify each Bank (which notice shall in any event be delivered to each Bank by
4:00 P.M., New York City time, on such date).  Not later than 12:00 Noon, New
York City time, on the Borrowing Date specified in such notice, each Bank shall
make available to the Administrative Agent at the office of the Administrative
Agent specified in subsection 10.2 (or at such other location as the
Administrative Agent may direct) an amount in immediately available funds equal
to the amount of the Loan to be made by such Bank.  Loan proceeds received by
the Administrative Agent hereunder shall promptly be made available to the
Company by the Administrative Agent's crediting the account of the Company, at
the office of the Administrative Agent specified in subsection 10.2, with the
aggregate amount actually received by the Administrative Agent from the Banks
and in like funds as received by the Administrative Agent.

         (b) Any borrowing of Eurodollar Loans hereunder shall be in such
amounts and be made pursuant to such elections so that, after giving effect
thereto, (i) the aggregate principal amount of all Eurodollar Loans having the
same Interest Period shall not be less than $5,000,000, or a whole multiple of
$1,000,000 in excess thereof, and (ii) no more than ten Interest Periods shall
be in effect at any one time.

<PAGE>

                                                                             30


         (c) Eurodollar Loans shall be made by each Bank at its Eurodollar
Lending Office and ABR Loans shall be made by each Bank at its Domestic Lending
Office.

         3.2 CONVERSION OPTIONS.  The Company may elect from time to time to
convert Eurodollar Loans into ABR Loans by giving the Administrative Agent
irrevocable notice of such election, to be received by the Administrative Agent
prior to 12:00 Noon, New York City time, at least one Business Day prior to the
proposed conversion date, PROVIDED that any such conversion of Eurodollar Loans
shall only be made on the last day of an Interest Period with respect thereto. 
The Company may elect from time to time to convert all or a portion of the ABR
Loans (other than Swing Line Loans) then outstanding to Eurodollar Loans by
giving the Administrative Agent irrevocable notice of such election, to be
received by the Administrative Agent prior to 12:00 Noon, New York City time, at
least three Business Days prior to the proposed conversion date, specifying the
Interest Period(s) selected therefor, and, if no Default or Event of Default has
occurred and is continuing, such conversion shall be made on the requested
conversion date or, if such requested conversion date is not a Business Day, on
the next succeeding Business Day.  Upon receipt of any notice pursuant to this
subsection 3.2, the Administrative Agent shall promptly, but in any event by
4:00 P.M., New York City time, notify each Bank thereof.  All or any part of the
outstanding Loans (other than Swing Line Loans and Bid Loans) may be converted
as provided herein, PROVIDED that partial conversions of Loans shall be in the
aggregate principal amount of $5,000,000, or a whole multiple of $1,000,000 in
excess thereof, and the aggregate principal amount of the resulting Eurodollar
Loans outstanding in respect of any one Interest Period shall be at least
$5,000,000 or a whole multiple of $1,000,000 in excess thereof.

         3.3 CHANGES OF COMMITMENT AMOUNTS. (a)  The Company shall have the
right, upon not less than three Business Days' notice to the Administrative
Agent, to terminate or, from time to time, reduce the Revolving Credit
Commitments subject to the provisions of this subsection 3.3.  To the extent, if
any, that the Aggregate Extensions of Credit exceeds the amount of the Revolving
Credit Commitments as then reduced, the Company shall be required to make a
prepayment equal to such excess amount, the proceeds of which shall be applied
FIRST, to payment of the Swing Line Loans which are not Eurodollar Loans then
outstanding, SECOND, to payment of the Revolving Credit Loans which are not
Eurodollar Loans then outstanding, THIRD, to payment of any Revolving L/C
Obligations then outstanding, and LAST, to cash collateralize any outstanding
Letters of Credit, Bid Loans and Revolving Credit Loans which are Eurodollar
Loans on terms reasonably satisfactory to the Administrative Agent.  Any
termination of the Revolving Credit Commitments shall be accompanied by
prepayment in full of the Revolving Credit Loans which are not Eurodollar Loans,
Swing Line Loans and Revolving L/C Obligations then outstanding and by cash
collateralization of any outstanding Letter of Credit, Bid Loans and Revolving
Credit Loans which are Eurodollar Loans on terms reasonably satisfactory to the
Administrative Agent.  Upon termination of the Revolving Credit Commitments, any
Letter of Credit, Bid Loan or Revolving Credit Loan which is a Eurodollar Loan
then outstanding which has been so cash collateralized shall no longer be
considered a "Letter of Credit", "Bid Loan" or "Eurodollar Loan", as the case
may be, as defined in subsection 1.1 and any L/C Participating Interests
heretofore granted by an Issuing Bank to the Banks in such Letter of Credit
shall be deemed terminated (subject to automatic reinstatement in the event that
such cash collateral is returned and such Issuing Bank is not fully reimbursed
for any such L/C Obligations) but the Letter of Credit fees payable under
subsection 3.10 shall continue to accrue to such Issuing Bank 

<PAGE>

                                                                             31


(or, in the event of any such automatic reinstatement, as provided in subsection
3.10) with respect to such Letter of Credit until the expiry thereof.

         (b) Interest accrued on the amount of any partial prepayment pursuant
to this subsection 3.3 to the date of such partial prepayment shall be paid on
the Interest Payment Date next succeeding the date of such partial prepayment. 
In the case of the termination of the Revolving Credit Commitments, interest
accrued on the amount of any prepayment relating thereto and any unpaid
commitment fee accrued hereunder shall be paid on the date of such termination. 
Any such partial reduction of the Revolving Credit Commitments shall be in an
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof, and
shall reduce permanently the Revolving Credit Commitments then in effect.

         3.4 OPTIONAL PREPAYMENTS.  The Company may at any time and from time
to time prepay Loans (other than Bid Loans), in whole or in part, without
premium or penalty, upon at least one Business Days' irrevocable notice to the
Administrative Agent in the case of ABR Loans and two Business Days' irrevocable
notice to the Administrative Agent in the case of Eurodollar Loans and
specifying the date and amount of prepayment, subject to subsection 3.20.  Upon
receipt of such notice the Administrative Agent shall promptly notify each Bank
thereof.  If such notice is given, the Company shall make such prepayment, and
the payment amount specified in such notice shall be due and payable, on the
date specified therein.  Accrued interest on the amount of any Loans paid in
full pursuant to this subsection 3.4 shall be paid on the date of such
prepayment.  Accrued interest on the amount of any partial prepayment shall be
paid on the Interest Payment Date next succeeding the date of such partial
prepayment.  Partial prepayments of Revolving Credit Loans shall be in an
aggregate principal amount equal to the lesser of (A) $2,500,000 or a whole
multiple of $1,000,000 in excess thereof and (B) the aggregate unpaid principal
amount of the Revolving Credit Loans, as the case may be.

         3.5 MANDATORY PREPAYMENTS. (a)  The Company shall, without notice or
demand, immediately prepay the Loans (other than Bid Loans and Eurodollar Loans
until the respective current Interest Periods expire) and, if necessary, cash
collateralize Bid Loans and Eurodollar Loans to the extent that the Aggregate
Extensions of Credit exceeds the aggregate Commitments of all the Banks then in
effect.  The Company will implement and maintain internal accounting controls to
monitor the borrowings and repayments of Loans by the Company and the issuance
of and drawings under Letters of Credit, with the object of preventing any
request for an Extension of Credit that would result in the Aggregate Extensions
of Credit being in excess of the Revolving Credit Commitments.  In the event
that at any time the Company determines that the Aggregate Extensions of Credit
exceeds the Revolving Credit Commitments, the Company will immediately make or
cause to be made such repayments or prepayments of Loans (other than Bid Loans
and Eurodollar Loans until the respective current Interest Periods therefor
expire) and, if necessary, cash collateralize Bid Loans and Eurodollar Loans as
shall be necessary to cause the Aggregate Extensions of Credit to no longer
exceed the Revolving Credit Commitments.

         (b) The Administrative Agent will calculate the Aggregate Extensions
of Credit from time to time, and in any event not less frequently than once
during each calendar month.  In making such calculations, the Administrative
Agent will rely on the information most recently received by it from the Banks
in respect of outstanding Swing Line Loans, from the Bid Loan Lenders in respect
of outstanding Bid Loans, and Issuing Banks in respect of Revolving L/C
Obligations and the aggregate amount available to be drawn under outstanding
Letters of Credit.  

<PAGE>

                                                                             32


Upon making each such calculation, the Administrative Agent will inform the
Company and the Banks of the results thereof.

         (c) In the event that on any date the Administrative Agent calculates
that the Aggregate Extensions of Credit exceeds the aggregate amount of the
Revolving Credit Commitments, the Administrative Agent will give notice to such
effect to the Company.  The Company will immediately make or cause to be made
such repayments or prepayments of Loans or, if necessary, cash collateralize Bid
Loans as shall be necessary to cause the Aggregate Extensions of Credit to no
longer exceed the Revolving Credit Commitments.

         (d) Upon the Revolving Credit Termination Date the Company shall, with
respect to each then outstanding Letter of Credit, if any, either (i) cause such
Letter of Credit to be cancelled without such Letter of Credit being drawn upon
or (ii) collateralize the Revolving L/C Obligations with respect to such Letter
of Credit with a letter of credit issued by banks or a bank satisfactory to the
Administrative Agent, or with cash collateral, all on terms satisfactory to the
Administrative Agent.

         (e)(i) Subject to the provisions of subsection 7.5, following the
consummation of any Asset Sale by the Company or any of its Subsidiaries, in the
case of cash proceeds, and following receipt of cash proceeds representing
payments under notes or other securities received in connection with any
non-cash consideration obtained in connection with such Asset Sale, 100% of the
Net Proceeds of such Asset Sale, other than any Net Proceeds which the Company
uses within one year of the consummation of an Asset Sale to purchase assets
similar to the assets disposed of in such Asset Sale shall permanently reduce
the Revolving Credit Commitments (but in no case below $200,000,000).  In
connection with such reduction, if required pursuant to paragraph (a) or (c) of
this subsection 3.5, the Company shall apply up to 100% of such Net Proceeds to
the repayment and cash collateralization of the Loans (other than Bid Loans) as
provided by this subsection 3.5.  Further, notwithstanding anything to the
contrary contained in this subsection 3.5(e), so long as no Default or Event of
Default has occurred or is continuing or would result therefrom, the Company may
elect not to reduce the Revolving Credit Commitments by up to $50,000,000 in the
aggregate of Net Proceeds from Asset Sales which the Company would otherwise be
required to apply to the reduction of the Revolving Credit Commitments and,
pursuant to subsection 3.5, the repayment or cash collateralization of the Loans
and Letters of Credit.

         (ii) Concurrently with any Asset Sale consisting of the sale of all of
the shares of stock of any Subsidiary Guarantor, the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee shall automatically be
discharged and released without any further action by the Administrative Agent,
any Co-Agent or any Bank, PROVIDED that the Administrative Agent and the Banks
agree, upon the request of the Company, to execute and deliver any instrument or
other document in a form acceptable to the Administrative Agent which may
reasonably be required to evidence such discharge and release and in connection
with the sale or other disposition of the capital stock of a Subsidiary of the
Company, the Administrative Agent shall release to the pledgor thereof, without
representation, warranty or recovery, express or implied, the capital stock of
such Subsidiary held by it as Pledged Stock, if any, under the relevant Pledge
Agreement.

         (f) Subject to the provisions of Section 7, promptly following the
incurrence of 

<PAGE>

                                                                             33


any Indebtedness by the Company or any of its Subsidiaries (other than
Indebtedness permitted by subsection 7.14) or the sale or issuance of any equity
by the Company or any of its Subsidiaries (other than capital stock of the
Company issued as consideration for acquisitions permitted by subsection 7.4 or
7.6 and the granting of stock options, stock appreciation rights and similar
arrangements to management of the Company in connection with their
compensation), 100% of the Net Proceeds of such Indebtedness or equity, shall
permanently reduce the Revolving Credit Commitments (but, so long as no Default
or Event of Default has occurred and is continuing, not below $200,000,000).  In
connection with such reduction if required pursuant to paragraph (a) or (c) of
subsection 3.5, the Company shall apply up to 100% of such Net Proceeds to the
repayment and cash collateralization of the Loans (other than Bid Loans) as
provided for in subsection 3.5.

         3.6 INTEREST RATES AND PAYMENT DATES. (a)  Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto on
the unpaid principal amount thereof at a rate per annum equal to the applicable
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.

         (b) ABR Loans shall bear interest for the period from and including
the date thereof until maturity thereof on the unpaid principal amount thereof
at a rate per annum equal to the ABR, PROVIDED that at any time when the
Applicable Margin for Eurodollar Loans is greater than or equal to 112.50 basis
points, ABR Loans shall bear interest at a rate per annum equal to the ABR PLUS
12.5 basis points.

         (c) Money Market Rate Loans shall bear interest for the period from
and including the date thereof until maturity thereof on the unpaid principal
amount thereof at a rate per annum equal to the Money Market Rate.

         (d) If all or a portion of (i) the principal amount of any of the
Loans (other than Bid Loans) or (ii) any interest payable thereon shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall, without limiting the rights of the Banks under
Section 8, bear interest at a rate per annum which is (x) in the case of overdue
principal, 2% above the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this subsection or (y) in the case of overdue
interest, 2% above the rate described in paragraph (b) of this subsection, in
each case from the date of such nonpayment until such amount is paid in full (as
well after as before judgment).

         (e) Interest shall be payable in arrears on each Interest Payment
Date; PROVIDED that interest accruing pursuant to paragraph (d) of this
subsection shall be payable on demand by the Administrative Agent made at the
request of the Required Banks.

         3.7 COMPUTATION OF INTEREST AND FEES. (a)  Interest in respect of ABR
Loans at any time when the ABR Loan is calculated based on the Prime Rate and
all fees hereunder shall be calculated on the basis of a 365 or 366, as the case
may be, day year for the actual days elapsed.  Interest in respect of Eurodollar
Loans and other ABR Loans shall be calculated on the basis of a 360 day year for
the actual days elapsed.  The Administrative Agent shall as soon as practicable
notify the Company and the Banks of each determination of a Eurodollar Rate. 
Any change in the interest rate on a Loan resulting from a change in the ABR
shall become effective as of the opening of business on the day on which such
change in the ABR becomes effective.  

<PAGE>

                                                                             34


The Administrative Agent shall as soon as practicable notify the Company and the
Banks of the effective date and the amount of each such change.

         (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Company and the Banks in the absence of manifest error.  The Administrative
Agent shall, at the request of the Company, deliver to the Company a statement
showing the quotations used by the Administrative Agent in determining the
Eurodollar Rate.

         3.8 FACILITY FEES.  The Company, together with NextLevel and
CommScope, agrees to pay to the Administrative Agent, for the account of each
Bank, a facility fee from and including July 22, 1997 to, but excluding, the
Revolving Credit Termination Date on the amount of such Bank's Revolving Credit
Commitment (whether or not utilized) at the rate per annum for each day during
the period for which payment is made set forth in the definition of Applicable
Margin under the column captioned "Facility Fee".  The Facility Fee provided for
in this subsection shall be payable quarterly in arrears on the last day of each
fiscal quarter, commencing September 30, 1997, and on the Revolving Credit
Termination Date with respect to the Revolving Credit Commitments.

         3.9 CERTAIN FEES. (a)  The Company, together with NextLevel and
CommScope, agrees to pay to the Administrative Agent for its own account certain
fees in the amounts, and on the dates, specified in the letter agreement dated
June 18, 1997 among GI Delaware, Chase and Chase Securities Inc.

         3.10 LETTER OF CREDIT FEES. (a) (i)  In lieu of any letter of credit
commissions and fees provided for in any L/C Application relating to Standby
L/Cs (other than standard administrative issuance, amendment and negotiation
fees), the Company agrees to pay the Administrative Agent, for the account of
the relevant Issuing Bank and the Participating Banks, with respect to each
Standby L/C, a Standby L/C fee on the amount available to be drawn under each
Standby L/C payable, in arrears, on the last day of each fiscal quarter of the
Company, at the rate per annum for each day during the period for which payment
is made set forth in the definition of "Applicable Margin" under the column
captioned "Standby L/C Fee".  The Standby L/C Fee provided for in this
subsection shall be payable quarterly in arrears on the last day of each fiscal
quarter, commencing September 30, 1997, and on the Revolving Credit Termination
Date.

         (ii)  In addition, the Company shall pay to each Issuing Bank of a
Standby L/C, in arrears on such day, a fee of 1/8 of 1% per annum on the amount
available to be drawn on such Standby L/C solely for its own account as Issuing
Bank of such Standby L/C and not on account of its L/C Participating Interest
therein.

         (b) In lieu of any letter of credit commissions and fees provided for
in any L/C Application relating to Commercial L/Cs (other than standard
administrative issuance, amendment and negotiation fees), the Company agrees to
pay the Administrative Agent, for the account of the relevant Issuing Bank and
the Participating Banks, with respect to each Commercial L/C, a Commercial L/C
fee of 3/8 of 1% (of which such Issuing Bank shall retain for its own account,
as the issuing bank and not on account of its L/C Participating Interest
therein, 1/8 of 1%) on the maximum face amount of each Commercial L/C payable on
the date 

<PAGE>

                                                                             35


such Commercial L/C is issued.

         (c)  In connection with any payment of fees pursuant to this
subsection 3.10, the Administrative Agent agrees to provide to the Company a
statement of any such fees so paid; PROVIDED that the failure by the
Administrative Agent to provide the Company with any such invoice shall not
relieve the Company of its obligation to pay such fees.

         3.11 LETTER OF CREDIT RESERVES. (a)  If any Change in Law after the
date of this Agreement shall either (i) impose, modify, deem or make applicable
any reserve, special deposit, assessment or similar requirement against letters
of credit issued by an Issuing Bank or (ii) impose on such Issuing Bank any
other condition regarding this Agreement or any Letter of Credit, and the result
of any event referred to in clause (i) or (ii) above shall be to increase the
cost to such Issuing Bank of issuing or maintaining any Letter of Credit (which
increase in cost shall be the result of such Issuing Bank's reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, upon demand by such Issuing Bank, the Company shall immediately pay to
such Issuing Bank, from time to time as specified by such Issuing Bank,
additional amounts which shall be sufficient to compensate such Issuing Bank for
such increased cost, together with interest on each such amount from the date
demanded until payment in full thereof at a rate per annum equal to the ABR.  A
certificate submitted by such Issuing Bank to the Company concurrently with any
such demand by such Issuing Bank, shall be conclusive, absent manifest error, as
to the amount thereof.

         (b) In the event that at any time after the date hereof any Change in
Law with respect to an Issuing Bank shall, in the opinion of such Issuing Bank,
require that any obligation under any Letter of Credit be treated as an asset or
otherwise be included for purposes of calculating the appropriate amount of
capital to be maintained by such Issuing Bank or any corporation controlling
such Issuing Bank, and such Change in Law shall have the effect of reducing the
rate of return on such Issuing Bank's or such corporation's capital, as the case
may be, as a consequence of such Issuing Bank's obligations under such Letter of
Credit to a level below that which such Issuing Bank or such corporation, as the
case may be, could have achieved but for such Change in Law (taking into account
such Issuing Bank's or such corporation's policies, as the case may be, with
respect to capital adequacy) by an amount deemed by such Issuing Bank to be
material, then from time to time following notice by such Issuing Bank to the
Company of such Change in Law, within 15 days after demand by such Issuing Bank,
the Company shall pay to such Issuing Bank such additional amount or amounts as
will compensate such Issuing Bank or such corporation, as the case may be, for
such reduction.  If such Issuing Bank becomes entitled to claim any additional
amounts pursuant to this subsection 3.11(b), it shall promptly notify the
Company of the event by reason of which it has become so entitled.  A
certificate submitted by such Issuing Bank to the Company concurrently with any
such demand by such Issuing Bank, shall be conclusive, absent manifest error, as
to the amount thereof.

         (c) The Company agrees that the provisions of the foregoing paragraphs
(a) and (b) and the provisions of each L/C Application providing for
reimbursement or payment to an Issuing Bank in the event of the imposition or
implementation of, or increase in, any reserve, special deposit, capital
adequacy or similar requirement in respect of the Letter of Credit relating
thereto shall apply equally to each Participating Bank in respect of its L/C
Participating Interest in such Letter of Credit, as if the references in such
paragraphs and provisions referred to, where 

<PAGE>

                                                                             36


applicable, such Participating Bank or any corporation controlling such
Participating Bank.

         (d) Notwithstanding any other provision of this subsection 3.11, no
Bank shall demand compensation for any increased cost or reduction referred to
in subsection 3.11 (a) or (b) if it shall not at the time be the general policy
or practice of such Bank to demand such compensation in similar circumstances
under comparable provisions of other credit agreements.

         3.12 FURTHER ASSURANCES.  The Company hereby agrees, from time to
time, to do and perform any and all acts and to execute any and all further
instruments reasonably requested by an Issuing Bank to effect more fully the
purposes of this Agreement and the issuance of Letters of Credit hereunder.  The
Company further agrees to execute any and all instruments reasonably requested
by any Issuing Bank in connection with the obtaining and/or maintaining of any
insurance coverage applicable to any Letters of Credit.

         3.13 OBLIGATIONS ABSOLUTE.  The payment obligations of the Company
under this Agreement with respect to the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:

         (i)     the existence of any claim, set-off, defense or other right
    which the Company or any of its Subsidiaries may have at any time against
    any beneficiary, or any transferee, of any Letter of Credit (or any Persons
    for whom any such beneficiary or any such transferee may be acting), any
    Issuing Bank, the Administrative Agent, any Co-Agent or any Bank, or any
    other Person, whether in connection with this Agreement, the Related
    Documents, any Credit Documents, the transactions contemplated herein, or
    any unrelated transaction;

         (ii)    any statement or any other document presented under any Letter
    of Credit proving to be forged, fraudulent, invalid or insufficient in any
    respect or any statement therein being untrue or inaccurate in any respect;

         (iii)   payment by any Issuing Bank under any Letter of Credit against
    presentation of a draft or certificate which does not comply with the terms
    of such Letter of Credit, except where such payment constitutes gross
    negligence or wilful misconduct on the part of any Issuing Bank; or

         (iv)    any other circumstances or happening whatsoever, whether or
    not similar to any of the foregoing, except for any such circumstances or
    happening constituting gross negligence or wilful misconduct on the part of
    any Issuing Bank.

         3.14 ASSIGNMENTS.  No Participating Bank's participation in any Letter
of Credit or any of its rights or duties hereunder shall be subdivided, assigned
or transferred (other than in connection with a transfer of part or all of such
Participating Bank's Revolving Credit Commitment in accordance with subsection
10.6) without the prior written consent of the relevant Issuing Bank, which
consent will not be unreasonably withheld.  Such consent may be given or
withheld without the consent or agreement of any other Participating Bank. 
Notwithstanding the foregoing, a Participating Bank may subparticipate its L/C
Participating 

<PAGE>

                                                                             37


Interest without obtaining the prior written consent of the relevant Issuing
Bank.

         3.15 PARTICIPATIONS.  Each Bank's obligation to purchase participating
interests pursuant to subsections 2.4 and 2.10(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against any Issuing Bank, the Company or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default; (iii) any adverse change in the condition
(financial or otherwise) of the Company; (iv) any breach of this Agreement by
the Company or any other Bank; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

         3.16 INABILITY TO DETERMINE INTEREST RATE.  In the event that the
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon the Company) that by reason of circumstances
affecting the interbank eurodollar market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for any Interest Period with respect
to (i) proposed Loans that the Company has requested be made as Eurodollar
Loans, (ii) any Eurodollar Loans that will result from the requested conversion
of all or part of ABR Loans into Eurodollar Loans or (iii) the continuation of
any Eurodollar Loan as such for an additional Interest Period, the
Administrative Agent shall forthwith give notice of such determination,
confirmed in writing, to the Company and the Banks at least one day prior to,
the requested Borrowing Date, the conversion date or the last day of such
Interest Period, as the case may be.  If such notice is given (i) any requested
Eurodollar Loans shall be made as ABR Loans, (ii) any ABR Loans that were to
have been converted to Eurodollar Loans shall be continued as ABR Loans, and
(iii) any outstanding Eurodollar Loans shall be converted, on the last day of
the then current Interest Period applicable thereto, into ABR Loans.  Until such
notice has been withdrawn by the Administrative Agent, no further Eurodollar
Loans shall be made.

         3.17 PRO RATA TREATMENT AND PAYMENTS. (a)  Each borrowing of any Loans
(other than Swing Line Loans and Bid Loans) by the Company from the Banks, each
payment by the Company on account of any fee hereunder (other than as otherwise
set forth in subsections 3.9 and 3.10) and any reduction of the Revolving Credit
Commitments of the Banks hereunder shall be made PRO RATA according to the
relevant Commitment Percentages of the Banks.  Each payment (including each
prepayment) by the Company on account of principal of and interest on the Loans
(other than Swing Line Loans and Bid Loans and other than as set forth in
subsections 3.18, 3.19 and 3.20) shall be made PRO RATA according to the
relevant Commitment Percentages of the Banks.  All payments (including
prepayments) to be made by the Company on account of principal, interest and
fees shall be made without set-off or counterclaim and shall be made to the
Administrative Agent, for the account of the Banks, at the Administrative
Agent's office located at 270 Park Avenue, New York, New York 10017 in
immediately available funds.  The Administrative Agent shall promptly distribute
such payments ratably to each Bank in like funds as received.  If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.

         (b) Unless the Administrative Agent shall have been notified in
writing by any Bank prior to a Borrowing Date that such Bank will not make the
amount which would constitute 

<PAGE>

                                                                             38


its relevant Commitment Percentage of the borrowing on such date available to
the Administrative Agent, the Administrative Agent may assume that such Bank has
made such amount available to the Administrative Agent on such Borrowing Date in
accordance with subsection 3.1 and the Administrative Agent may, in reliance
upon such assumption, make available to the Company a corresponding amount.  If
such amount is made available to the Administrative Agent by such Bank on a date
after such Borrowing Date, such Bank shall pay to the Administrative Agent on
demand an amount equal to the product of (i) the daily average Federal funds
rate during such period as quoted by the Administrative Agent, times (ii) the
amount of such Bank's relevant Commitment Percentage of such borrowing, times
(iii) a fraction the numerator of which is the number of days that elapse from
and including such Borrowing Date to the date on which such Bank's relevant
Commitment Percentage of such borrowing shall have become immediately available
to the Administrative Agent and the denominator of which is 360.  A certificate
of the Administrative Agent submitted to any Bank with respect to any amounts
owing under this subsection 3.17(b) shall be conclusive, absent manifest error. 
If such Bank's relevant Commitment Percentage of such borrowing is not in fact
made available to the Administrative Agent by such Bank within three Business
Days of such Borrowing Date, the Administrative Agent shall be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the Company, without prejudice to any
rights which the Company or the Administrative Agent may have against such Bank
hereunder.  Nothing contained in this subsection 3.17(b) shall relieve any Bank
which has failed to make available its ratable portion of any borrowing
hereunder from its obligation to do so in accordance with the terms hereof.

         (c) The failure of any Bank to make the Loan to be made by it on any
Borrowing Date shall not relieve any other Bank of its obligation, if any,
hereunder to make its Loan on such Borrowing Date, but no Bank shall be
responsible for the failure of any other Bank to make the Loan to be made by
such other Bank on such Borrowing Date.

         (d) All payments and optional prepayments (other than prepayments as
set forth in subsection 3.19 with respect to increased costs) of Eurodollar
Loans hereunder shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurodollar Loans with the same Interest Period shall not be less than $5,000,000
or a whole multiple of $1,000,000 in excess thereof.

         (e)  Each Bank, Assignee and Participant that is not a citizen or
resident of the United States of America, a corporation, partnership or other
entity created or organized in or under the laws of the United States of
America, or any estate or trust that is subject to U.S. federal income taxation
regardless of the source of its income (a "NON-U.S. BANK") shall deliver to the
Company and the Administrative Agent, and if applicable, the assigning Bank (or,
in the case of a Participant, to the Bank from which the related participation
shall have been purchased) on or before the date on which it becomes a party to
this Agreement (or, in the case of a Participant, on or before the date on which
such Participant purchases the related participation) either:

         (A)  (x) two duly completed and signed original copies of either
         Internal Revenue Service Form 1001 (relating to such Non-U.S. Bank and
         entitling it to a complete exemption from withholding of United States
         federal income taxes on all amounts to be received by such Non-U.S.
         Bank pursuant to this Agreement 


<PAGE>

                                                                             39


         and the other Credit Documents) or Form 4224 (relating to all amounts
         to be received by such Non-U.S. Bank pursuant to this Agreement and
         the other Credit Documents), or successor and related applicable
         forms, as the case may be, and (y) two duly completed and signed
         original copies of Internal Revenue Service Form W-8 or W-9, or
         successor and related applicable forms, as the case may be; or

         (B)  in the case of a Non-U.S. Bank that is not a "bank" within the
         meaning of Section 881(c)(3)(A) of the Code and that does not comply
         with the requirements of clause (A) hereof, (x) a statement in the
         form of Exhibit L (or such other form of statement as shall be
         reasonably requested by the Company from time to time) to the effect
         that such Non-U.S. Bank is eligible for a complete exemption from
         withholding of United States federal income taxes under Code Section
         871(h) or 881(c), and (y) two duly completed and signed original
         copies of Internal Revenue Service Form W-8 or successor and related
         applicable form (it being understood and agreed that no Participant
         and, without the prior written consent of the Company described in
         clause (C) of the proviso to the first sentence of subsection 10.6(c),
         no Assignee shall be entitled to deliver any forms or statements
         pursuant to this clause (B), but rather shall be required to deliver
         forms pursuant to clause (A) of this subsection 3.17(e)).

Further, each Non-U.S. Bank agrees (i) to deliver to the Company and the
Administrative Agent, and if applicable, the assigning Bank (or, in the case of
a Participant, to the Bank from which the related participation shall have been
purchased) two further duly completed and signed original copies of such Forms
1001, 4224, W-8 or W-9, as the case may be, or successor and related applicable
forms, on or before the date that any such form expires or becomes obsolete and
promptly after the occurrence of any event requiring a change from the most
recent form(s) previously delivered by it to the Company (or, in the case of a
Participant, to the Bank from which the related participation shall have been
purchased) in accordance with applicable U.S. laws and regulations, (ii) in the
case of a Non-U.S. Bank that delivers a statement in the form of Exhibit L (or
such other form of statement as shall have been requested by the Company), to
deliver to the Company and the Administrative Agent, and if applicable, the
assigning Bank, such statement on an annual basis on the anniversary of the date
on which such Non-U.S. Bank became a party to this Agreement and to deliver
promptly to the Company and the Administrative Agent, and if applicable, the
assigning Bank, such additional statements and forms as shall be reasonably
requested by the Company from time to time, and (iii) to notify promptly the
Company and the Administrative Agent (or, in the case of a Participant, the Bank
from which the related participation shall have been purchased) if it is no
longer able to deliver, or if it is required to withdraw or cancel, any form or
statement previously delivered by it pursuant to this subsection 3.17(e).  Each
Non-U.S. Bank agrees to indemnify and hold harmless the Company from and against
any Taxes imposed by or on behalf of the United States or any taxing
jurisdiction thereof, penalties, additions to tax, fines, interest or other
liabilities, costs or losses (including, without limitation, reasonable
attorneys' fees and expenses) incurred or payable by the Company as a result of
the failure of the Company to comply with its obligations to deduct or withhold
any Taxes imposed by or on behalf of the United States or any taxing
jurisdiction thereof (including penalties, additions to tax, fines or interest
on such Taxes) from any payments made pursuant to this Agreement to such
Non-U.S. Bank or the Administrative Agent which failure resulted from the
Company's reliance on any form, statement, certificate or 

<PAGE>

                                                                             40


other information provided to it by such Non-U.S. Bank pursuant to clause (B) or
clause (ii) of this subsection 3.17(e).  The Company hereby agrees that for so
long as a Non-U.S. Bank complies with this subsection 3.17(e), the Company shall
not withhold any amounts from any payments made pursuant to this Agreement to
such Non-U.S. Bank, unless the Company reasonably determines that it is required
by law to withhold or deduct any amounts from any payments made to such Non-U.S.
Bank pursuant to this Agreement.  Notwithstanding any other provision of this
subsection 3.17(e), a Non-U.S. Bank shall not be required to deliver any form or
statement pursuant to the immediately preceding sentences in this subsection
3.17(e) that such Non-U.S. Bank is not legally able to deliver (it being
understood and agreed that the Company shall withhold or deduct such amounts
from any payments made to such Non-U.S. Bank that the Company reasonably
determines are required by law).  If any Credit Party other than the Company
makes any payment to any Non-U.S. Bank under any Credit Document, the foregoing
provisions of this subsection 3.17(e) shall apply to such Non-U.S. Bank and such
Credit Party as if such Credit Party were the Company (but a Non-U.S. Bank shall
not be required to provide any form or make any statement to any such Credit
Party unless such Non-U.S. Bank has received a request to do so from such Credit
Party and has a reasonable time to comply with such request).

         3.18 ILLEGALITY.  Notwithstanding any other provisions herein, if any
Requirement of Law or any change therein or in the interpretation or application
thereof occurring after the date that any lender becomes a Bank party to this
Agreement, shall make it unlawful for such Bank to make or maintain Eurodollar
Loans as contemplated by this Agreement, the commitment of such Bank hereunder
to make Eurodollar Loans or to convert all or a portion of ABR Loans into
Eurodollar Loans shall forthwith be cancelled and such Bank's Loans then
outstanding as Eurodollar Loans, if any, shall, if required by law and if such
Bank so requests, be converted automatically on the date specified by such Bank
in such request to ABR Loans.  To the extent that such affected Eurodollar Loans
are converted into ABR Loans, all payments of principal which would otherwise be
applied to such Eurodollar Loans shall be applied instead to such Bank's ABR
Loans, as the case may be.  The Company hereby agrees promptly to pay any Bank,
upon its demand, any additional amounts necessary to compensate such Bank for
any costs incurred by such Bank in making any conversion in accordance with this
subsection 3.18 including, but not limited to, any interest or fees payable by
such Bank to lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans hereunder (such Bank's notice of such costs, as certified to
the Company through the Administrative Agent, to be conclusive absent manifest
error).

         3.19 REQUIREMENTS OF LAW. (a)  In the event that, at any time after
the date hereof, the adoption of any Requirement of Law, or any change therein
or in the interpretation or application thereof or compliance by any Bank with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority:

         (i)  does or shall subject any Bank to any tax of any kind whatsoever
    with respect to this Agreement or any Eurodollar Loans made by it, or
    change the basis of taxation of payments to such Bank of principal,
    commitment fee, interest or any other amount payable hereunder (except for
    changes in the rate of tax on the overall net income of such Bank), it
    being understood and agreed that, in the case of a Non-U.S. Bank that does
    not comply with clause (A) of subsection 3.17(e), this clause (i) shall
    apply only to the extent that it would have applied if 

<PAGE>

                                                                             41


    such Non-U.S. Bank were able to comply with clause (A) of subsection
    3.17(e);

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

    (iii)   does or shall impose on such Bank any other condition;

and the result of any of the foregoing is to increase the cost to such Bank of
making, converting, renewing or maintaining advances or extensions of credit or
to reduce any amount receivable hereunder, in each case, in respect of its
Eurodollar Loans, then, in any such case, the Company shall promptly pay such
Bank, on demand, any additional amounts necessary to compensate such Bank for
such additional cost or reduced amount receivable which such Bank deems to be
material as determined by such Bank with respect to such Eurodollar Loans,
together with interest on each such amount from the date demanded until payment
in full thereof at a rate per annum equal to the ABR.  The Loans referred to in
the last sentence of subsection 2.1(a) shall be entitled to the benefits of this
subsection 3.19.

         (b) In the event that at any time after the date hereof, any Change in
Law with respect to any Bank shall, in the opinion of such Bank, require that
any Commitment of such Bank be treated as an asset or otherwise be included for
purposes of calculating the appropriate amount of capital to be maintained by
such Bank or any corporation controlling such Bank, and such Change in Law shall
have the effect of reducing the rate of return on such Bank's or such
corporation's capital, as the case may be, as a consequence of such Bank's
obligations hereunder to a level below that which such Bank or such corporation,
as the case may be, could have achieved but for such Change in Law (taking into
account such Bank's or such corporation's policies, as the case may be, with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time following notice by such Bank to the Company of such
Change in Law as provided in paragraph (c) of this subsection 3.19, within 15
days after demand by such Bank, the Company shall pay to such Bank such
additional amount or amounts as will compensate such Bank or such corporation,
as the case may be, for such reduction.

         (c) A certificate submitted by such Bank, through the Administrative
Agent, to the Company shall be conclusive in the absence of manifest error.  The
covenants contained in this subsection 3.19 shall survive the termination of
this Agreement and payment of the outstanding Loans.


         (d) Notwithstanding any other provision of this subsection 3.19, no
Bank shall demand compensation for any increased cost or reduction referred to
above if it shall not at the time be the general policy or practice of such Bank
to demand such compensation in similar circumstances under comparable provisions
of other credit agreements. 

         3.20 INDEMNITY.  The Company agrees to indemnify each Bank and to hold
such Bank harmless from any loss or expense which such Bank may sustain or incur
as a consequence of (a) default by the Company in payment of the principal
amount of or interest on any 

<PAGE>

                                                                             42


Eurodollar Loans or Absolute Rate Bid Loans of such Bank, including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to make or maintain its
Eurodollar Loans or Absolute Rate Bid Loans hereunder, (b) default by the
Company in making a borrowing of Eurodollar Loans or Absolute Rate Bid Loans
after the Company has given a notice in accordance with subsection 2.10 or 3.1
or in making a conversion of ABR Loans to Eurodollar Loans after the Company has
given notice in accordance with subsection 3.2, (c) default by the Company in
making any prepayment of Eurodollar Loans or Absolute Rate Bid Loans after the
Company has given a notice in accordance with subsection 3.4 or (d) a payment or
prepayment of a Eurodollar Loan, Money Market Rate Loan or Absolute Rate Bid
Loan or conversion of any Eurodollar Loan into an ABR Loan, in either case on a
day which is not the last day of an Interest Period with respect thereto (or,
with respect to a Money Market Rate Loan, the maturity date thereof), including,
but not limited to, any such loss or expense arising from interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain its
Eurodollar Loans hereunder.  This covenant shall survive termination of this
Agreement and payment of the outstanding Obligations.

         3.21 REPAYMENT OF LOANS, EVIDENCE OF DEBT.  (a)  The Company hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Bank the then unpaid principal amount of each Revolving Credit Loan on
the Revolving Credit Termination Date, (ii) to the Administrative Agent for the
account of each Bid Loan Lender the then unpaid principal amount of each Bid
Loan on the Bid Loan Maturity Date applicable to such Bid Loan, and (iii) to the
Administrative Agent for the account of the applicable Swing Line Bank the then
unpaid principal amount of each Swing Line Loan on the Revolving Credit
Termination Date (or such other date as required by subsection 2.10(a)). 

         (b)  Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Company to such Bank
resulting from each Loan made and each Letter of Credit issued by such Bank,
including the amounts of principal and interest payable and paid to such Bank
from time to time hereunder.

         (c)  The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Extension of Credit made hereunder to the
Company, the Class and Type thereof, and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Company to each Bank hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder for the account of the Banks
and each Bank's share thereof.

         (d)  The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Bank or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of the Company to
repay the Loans in accordance with the terms of this Agreement.

         (e)  Any Bank may request that Loans made by it be evidenced by a
promissory note.  In such event, the Company shall prepare, execute and deliver
to such Bank either (i) a promissory note payable to the order of such Bank or
(ii) if requested by such Bank, a promissory note payable to such Bank and its
registered assigns (a "REGISTERED FORM NOTE") and in each case in a form
approved by the Administrative Agent.  Thereafter, the Loans evidenced 

<PAGE>

                                                                             43


by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.2) be represented by one or more promissory
notes in such form payable to the order of the payee named therein or, if such
promissory note is a Registered Form Note, to such payee and its registered
assigns.  Registered Form Notes may not be exchanged for promissory notes that
are not Registered Form Notes. A Registered Form Note and the Obligation(s)
evidenced thereby may be assigned or otherwise transferred in whole or in part
only by registration of such assignment or transfer of such Registered Form Note
and the Obligation(s) evidenced thereby on the Register (and each Registered
Form Note shall expressly so provide).  Any assignment or transfer of all or
part of such Obligation(s) and the Registered Form Note(s) evidencing the same
shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Registered Form Note(s) evidencing such
Obligation(s), duly endorsed by (or accompanied by a written instrument of
assignment or transfer duly executed by) the holder thereof, and thereupon one
or more new Registered Form Note(s) in the same aggregate principal amount shall
be issued to the designated Assignee(s) and the old Registered Form Note shall
be returned to the Company marked "cancelled".  No assignment of a Registered
Form Note and the Obligation(s) evidenced thereby shall be effective unless it
shall have been recorded in the Register by the Administrative Agent as provided
in this subsection 3.21(e).

         3.22  MITIGATION OBLIGATIONS; REPLACEMENT OF BANKS.  (a) If any Bank
requests compensation under subsection 3.11 or 3.19 or gives notice to the
Company pursuant to subsection 3.18, or if the Company withholds any amounts
from any payments made pursuant to this Agreement to any Non-U.S. Bank, then
such Bank or Non-U.S. Bank, as the case may be, shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Bank or Non-U.S. Bank, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to subsection 3.11 or 3.19, make it no longer unlawful for such Bank to make or
maintain Eurodollar Loans or eliminate the need to withhold any amounts from any
payments made pursuant to the Agreement, as the case may be, in the future and
(ii) would not subject such Bank to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Bank.  The Company hereby agrees to pay
all reasonable costs and expenses incurred by any Bank in connection with any
such designation or assignment.

         (b)  If any Bank requests compensation under subsection 3.11 or 3.19
or gives notice to the Company pursuant to subsection 3.18, or if the Company
withholds any amounts from any payments made pursuant to this Agreement to any
Non-U.S. Bank, or if any Bank defaults in its obligation to fund Loans
hereunder, then the Company may, at its sole expense and effort, upon notice to
such Bank or Non-U.S. Bank, as the case may be, and the Administrative Agent,
either (i) reduce or terminate the Revolving Credit Commitment of such Bank or
Non-U.S. Bank (and pay all amounts owed to such Bank or Non-U.S. Bank under this
Agreement other than Bid Loans prior to the expiration of the Interest Periods
therefor, unless such Bank or Non-U.S. Bank agrees to such payment) or (ii)
require such Bank to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in subsection 10.6), all its
interests, rights and obligations under this Agreement (other than any
outstanding Bid Loans held by it) to an assignee that shall assume such
obligations (which assignee may be another Bank, if such Bank accepts such
assignment); PROVIDED that (A) the Company shall have received the prior written
consent of the Administrative Agent (and, if a Revolving Credit Commitment is 

<PAGE>

                                                                             44


being assigned, the Issuing Bank and the Swing Line Bank), which consent shall
not unreasonably be withheld, (B) such Bank shall have received payment of an
amount equal to the outstanding principal of its Loans (other than Bid Loans)
and participations in Letter of Credit and Swing Line Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (C) in the case of
any such assignment resulting from a claim for compensation under
subsection 3.11 or 3.19, a notice pursuant to subsection 3.18 or amounts
withheld from any payments made pursuant to this Agreement to any Non-U.S. Bank,
such assignment will result in a reduction in such compensation or withholding
or result in an assignment to a Bank which may make or maintain Eurodollar
Loans.  A Bank shall not be required to make any such assignment and delegation
and the Company shall not be permitted to reduce or terminate the Revolving
Credit Commitments of a Bank if, prior thereto, as a result of an irrevocable
waiver by such Bank or otherwise, the circumstances entitling the Company to
require such assignment and delegation or make such reduction or termination
cease to apply. 

         (c) If any Bank becomes entitled to claim any additional amounts
pursuant to subsection 3.11 or 3.19, it shall promptly notify the Company,
through the Administrative Agent, of the event by reason of which it has become
so entitled.  If any Bank has notified the Company through the Administrative
Agent of any increased costs pursuant to paragraph (a) of this subsection 3.22,
the Company at any time thereafter may, upon at least two Business Days' notice
to the Administrative Agent, prepay or convert into ABR Loans all (but not a
part) of the Eurodollar Loans then outstanding.

         (d) The Company's indemnification obligations under subsection 3.20
shall apply to the transactions described in this subsection 3.22. 


         SECTION 4.     REPRESENTATIONS AND WARRANTIES

         In order to induce the Banks to enter into this Agreement and to
continue and make the Loans and to induce the Issuing Banks to issue, and the
Participating Banks to participate in, the Letters of Credit, the Company hereby
represents and warrants to each Bank, each Co-Agent and the Administrative
Agent, on and as of the Closing Date and, other than with respect to subsection
4.2, on the date of each Loan is made or Letter of Credit is issued thereafter,
that:

         4.1 FINANCIAL CONDITION. (a)  (i)  The audited combined balance sheet
of the Power Semiconductor Business at each of December 31, 1995 and December
31, 1996 and the combined statements of operations, divisional net equity and
cash flows for each of the fiscal years ending December 31, 1994, December 31,
1995 and December 31, 1996, reported on by Deloitte & Touche LLP, and (ii) the
unaudited combined balance sheet of the Power Semiconductor Business at March
31, 1997 and the related combined statements of operations, divisional net
equity and cash flows for the fiscal quarter ending March 31, 1997, certified as
complete and correct and prepared in accordance with GAAP (subject to normal
year-end adjustments) by the chief financial officer of the Company, copies of
each of which have heretofore been furnished to each Bank, are complete and
correct and present fairly (except, with respect to interim statements, for
normal year-end adjustments) the combined financial position 

<PAGE>

                                                                             45


of the Power Semiconductor Business as at such dates, and the combined results
of operations and cash flows for the fiscal periods then ended and, in the case
of the statements referred to in the foregoing clause (ii), the portion of the
fiscal year through such date.  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, with respect to
interim statements, for normal year-end adjustments and that such interim
statements may be condensed and exclude detailed footnote disclosure and except
as concurred in by such accountants or such chief financial officer, as the case
may be, and as disclosed therein).

         (b) The unaudited PRO FORMA combined balance sheet of the Power
Semiconductor Business at March 31, 1997 (including the notes thereto) (the "PRO
FORMA BALANCE SHEET"), and the related combined statements of operations for the
fiscal year ending December 31, 1996 and the fiscal quarter ended March 31, 1997
(the "PRO FORMA STATEMENTS OF OPERATIONS"), copies of which have heretofore been
furnished to each Bank, have been prepared based upon the combined balance sheet
of the Power Semiconductor Business as of March 31, 1997 and the combined
statements of operations for the fiscal year ended December 31, 1996 and the
fiscal quarter ended March 31, 1997, respectively, assuming that the Spin-Off
occurred on January 1, 1996 and January 1, 1997, respectively, and do not
purport to represent what the financial position actually would have been had
the Spin-Off occurred on January 1, 1996 or January 1, 1997, as the case may be,
or to project the financial position of the Power Semiconductor Business for any
future date.  The Pro Forma Balance Sheet presents fairly on a PRO FORMA basis
the combined financial position of the Power Semiconductor Business at March 31,
1997, and the Pro Forma Statements of Operations present fairly on a pro forma
basis the combined operating results of the Power Semiconductor Business for the
respective fiscal periods covered thereby, in each case assuming that the events
and assumptions specified in the preceding sentence had actually occurred or are
true, as the case may be, on March 31, 1997 or for the respective periods
covered by the Pro Forma Statements of Operations, as the case may be, (except
(i) for changes in such financial position which are not materially adverse to
the financial position of the Power Semiconductor Business, and (ii) as provided
in the notes thereto).  The unaudited pro forma adjustments are based upon
currently available information and certain assumptions that the management of
the Power Semiconductor Business believes to be reasonable.  As of the date of
the Pro Forma Balance Sheet, the Power Semiconductor Business had no material
obligation, contingent or otherwise, which was not reflected therein or in the
notes thereto and which would have a material adverse effect on the business,
financial condition, assets, liabilities, net assets, properties, results of
operations, value or prospects of the Company and its Subsidiaries taken as a
whole (other than the Excluded Litigation, as to which no representation is
made).

         4.2 NO MATERIAL CHANGE.  Since June 13, 1997 (a) there has been no
occurrence (other than the Excluded Litigation as to which no representation is
made in this subsection 4.2) which has had or reasonably could be expected to
have a material adverse effect on the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as a whole, and (b) other than as disclosed in any financial statements
delivered hereunder pursuant to subsection 6.1, neither the Company nor any of
its Subsidiaries has, since December 31, 1996, incurred any material obligation,
contingent or otherwise (other than in connection with the Excluded Litigation,
as to which no representation is made in this subsection 4.2), which has had a
material adverse effect on the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as 

<PAGE>

                                                                             46


a whole.

         4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.  Each Credit Party and
its Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged, except to the extent that the failure to possess such
corporate power and authority and such legal right would not, in the aggregate,
have a material adverse effect on the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as a whole, (c) is duly qualified as a foreign corporation 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 where the failure to be so qualified would not have a
material adverse effect on the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as a whole 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,
have a material adverse effect on the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as a whole.


         4.4 CORPORATE POWER; AUTHORIZATION.  Each Credit Party has the
corporate power and authority and the legal right to make, deliver and perform
the Credit Documents to which it is a party and to pledge the Pledged Stock
pursuant to the Pledge Agreement to which it is a party; and the Company has the
corporate power and authority and legal right to borrow hereunder and to have
Letters of Credit issued for its account hereunder.  Each Credit Party has taken
all necessary corporate action to authorize the execution, delivery and
performance of the Credit Documents to which it is a party, the pledge of the
Pledged Stock pursuant to the Pledge Agreement to which it is a party and, in
case of the Company, to authorize the borrowings hereunder and the issuance of
Letters of Credit for its account hereunder. No consent or authorization of, or
filing with, any Person (including, without limitation, any Governmental
Authority) is required in connection with the execution, delivery or performance
by any Credit Party, or the validity or enforceability against any Credit Party,
of any Credit Document to the extent that it is a party thereto, or the pledge
of the Pledged Stock pursuant to the Pledge Agreements, or the guarantee of the
Obligations pursuant to the Subsidiary Guarantees.

         4.5 ENFORCEABLE OBLIGATIONS.  Each of the Credit Documents has been
duly executed and delivered on behalf of each Credit Party which is a party
thereto and each of such Credit Documents constitutes the legal, valid and
binding obligation of such Credit Party, enforceable against such Credit Party
in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law).

         4.6 NO LEGAL BAR.  The performance of each Credit Document, the pledge
of the Pledged Stock pursuant to the Pledge Agreements, the guarantee of the
Obligations pursuant to the Subsidiary Guarantees and the use of the proceeds of
the Loans and of drawings under the Letters of Credit will not violate any
Requirement of Law or any Contractual Obligation applicable to or binding upon
any Credit Party, any of its Subsidiaries or any of its properties or assets,
which violations, individually or in the aggregate, would have a material
adverse effect on 

<PAGE>

                                                                             47


the ability of such Credit Party to perform its obligations under the Credit
Documents to the extent that it is a party thereto, or which would give rise to
any liability on the part of the Administrative Agent, any Co-Agent or any Bank,
or which would have a material adverse effect on the business, financial
condition, properties, results of operations, value or prospects of the Company
and its Subsidiaries taken as a whole, and will not result in the creation or
imposition (or the obligation to create or impose) of any Lien on any of its or
their respective properties or assets pursuant to any Requirement of Law
applicable to it or them, as the case may be, or any of its or their Contractual
Obligations, except for Liens arising under the Pledge Agreements.

         4.7 NO MATERIAL LITIGATION.  No litigation, investigation known to the
Company or proceeding of or by any Governmental Authority or any other Person is
pending against any Credit Party or any of its Subsidiaries, (a) with respect to
the validity, binding effect or enforceability of any Credit Document or with
respect to the Loans made hereunder, the use of proceeds thereof or of any
drawings under a Letter of Credit and the other transactions contemplated hereby
or thereby, or (b) except for the Excluded Litigation (as to which no
representation is made in this subsection 4.7), which would have a material
adverse effect on the business, financial condition, properties, results of
operations, value or prospects of the Company and its Subsidiaries taken as a
whole.

         4.8 INVESTMENT COMPANY ACT.  Neither any Credit Party nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended).

         4.9 FEDERAL REGULATION.  No part of the proceeds of any of the Loans
or any drawing under a Letter of Credit will be used for any purpose which
violates, or which would be inconsistent with, the provisions of Regulation G,
T, U or X of the Board.  Neither the Company nor any of its Subsidiaries is
engaged or will engage, principally or as one of its important activities, in
the business of extending credit for the purpose of "purchasing" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under said Regulation U. 

         4.10 NO DEFAULT.  Neither the Company nor any of its Subsidiaries is
in default in the payment or performance of any of its or their Contractual
Obligations in any respect which would be materially adverse to the business,
financial condition, properties, results of operations, value or prospects of
the Company and its Subsidiaries taken as a whole.  Neither the Company nor any
of its Subsidiaries is in default under any order, award or decree of any
Governmental Authority or arbitrator binding upon or affecting it or them or by
which any of its or their properties or assets may be bound or affected in any
respect which would be materially adverse to the business, financial condition,
properties, results of operations, value or prospects of the Company and its
Subsidiaries taken as a whole, and no such order, award or decree would
materially adversely affect the ability of the Company and its Subsidiaries
taken as a whole to carry on their businesses as presently conducted or the
ability of any Credit Party to perform its obligations under any Credit
Document.

         4.11 NO BURDENSOME RESTRICTIONS.  Neither the Company nor any of its
Subsidiaries is a party to or is bound by any Contractual Obligation or subject
to any Requirement of Law or other corporate restriction which materially and
adversely affects the 

<PAGE>

                                                                             48


business, financial condition, properties, results of operations, value or
prospects of the Company and its Subsidiaries taken as a whole.

         4.12 TAXES.  Each of the Company and its Subsidiaries has filed or
caused to be filed or has timely requested an extension to file or has received
an approved extension to file all tax returns which, to the knowledge of the
Company, are required to have been filed, and has paid all taxes shown to be due
and payable on said returns or extension requests or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in the books of the Company or its Subsidiaries, as the
case may be), except any such filings or taxes, fees or charges, the making of
or the payment of which, or the failure to make or pay, would not materially
adversely affect the business, financial condition, properties, results of
operations, value or prospects of the Company and its Subsidiaries taken as a
whole; and, to the knowledge of the Company, no claims are being asserted with
respect to any such taxes, fees or other charges (other than those the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided in the books of the Company or its Subsidiaries, as the case may be),
except as to any such taxes, fees or other charges, the payment of which, or the
failure to pay, would not materially adversely affect the business, financial
condition, properties, results of operations, value or prospects of the Company
and its Subsidiaries taken as a whole.

         4.13 SUBSIDIARIES.  The Subsidiaries of the Company listed on Schedule
II constitute all of the Domestic Subsidiaries of the Company and the
Subsidiaries listed on Schedule III constitute all of the Foreign Subsidiaries
of the Company as of the Closing Date.  The Company has no Material Subsidiaries
on the Closing Date.

         4.14 OWNERSHIP OF PROPERTY; LIENS.  The Company and each of its
Subsidiaries has good and marketable title to, or valid and subsisting leasehold
interests in, all its respective material real property, and good title to all
its respective material other property, and none of such property is subject,
except as permitted hereunder, to any Lien (including, without limitation,
Federal, state and other tax liens).

         4.15 ERISA.  No "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Code) or "accumulated funding deficiency" (as
defined in Section 302 of ERISA) or Reportable Event (other than a Reportable
Event with respect to which the 30-day notice requirement under Section 4043 of
ERISA has been waived or which has occurred by reason of the Spin-Off
Transactions) has occurred during the five years preceding each date on which
this representation is made or deemed made with respect to any Plan in any case
the consequences of which would be materially adverse to the business, financial
condition, properties, results of operations, value or prospects of the Company
and its Subsidiaries taken as a whole.  The present value of all accrued
benefits under each Single Employer Plan maintained by the Company or a Commonly
Controlled Entity (based on those assumptions used to fund such Plan) did not,
as of the most recent annual valuation date in respect of each such Plan, exceed
the fair market value of the assets of the Plan (including for these purposes
accrued but unpaid contributions) allocable to such benefits by an amount that
would be materially adverse to the business, financial condition, properties,
results of operations, value or prospects of the 

<PAGE>

                                                                             49


Company and its Subsidiaries taken as a whole.  The liability to which the
Company or any Commonly Controlled Entity would become subject under ERISA if
the Company or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date hereof would not be materially adverse to the business, financial
condition, properties, results of operations, value or prospects of the Company
and its Subsidiaries taken as a whole.  To the Company's knowledge, no
Multiemployer Plan is either in Reorganization or Insolvent in any case the
consequences of which would be materially adverse to the business, financial
condition, properties, results of operations, value or prospects of the Company
and its Subsidiaries taken as a whole.

         4.16 ACCURACY OF DISCLOSURE.  All written information, other than
financial projections, which has been made available to the Administrative Agent
or the Banks by the Company or any of its representatives and all other
information which has been made available to the Administrative Agent or the
Banks by any officers of the Company and its Subsidiaries is complete and
correct in all material respects and does not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading.  The financial
projections that have been made available to the Administrative Agent and the
Banks by the Company or any of its representatives have been prepared in good
faith based upon reasonable assumptions.

         4.17 ENVIRONMENTAL MATTERS.  Except for matters reserved for on the
Company's Pro Forma Balance Sheet or any subsequent balance sheet delivered
pursuant to subsection 6.1, and otherwise except to the extent that the facts
and circumstances giving rise to any failure of any of the following
representations to be so true and correct would not have any reasonable
likelihood of having a material adverse effect on the business, operations,
property, condition (financial or otherwise) or prospects of the Company and its
Subsidiaries, taken as a whole:

         (a) To the best knowledge of the Company, the facilities and
    properties owned, leased or operated by the Company or any of its
    Subsidiaries (the "PROPERTIES") do not contain, and have not previously
    contained, any Materials of Environmental Concern in amounts or
    concentrations that constitute or constituted a material violation of, or
    reasonably could give rise to material liability under, Environmental Laws.

         (b) To the best knowledge of the Company, the Properties and all
    operations at the Properties are in compliance and at all times during the
    last 5 years have been in compliance in all material respects with all
    Environmental Laws, and there is no contamination at, under or about the
    Properties which could interfere materially with the continued operation of
    the Properties as a whole or the business of the Company and its
    Subsidiaries.

         (c) Neither the Company nor any of its Subsidiaries has received or is
    aware of any claim or notice of violation, alleged violation,
    non-compliance, liability or potential liability regarding environmental
    matters or compliance with Environmental Laws with regard to the Properties
    or the operations of the Company, nor does the Company have knowledge or
    reason to believe that any such action is being contemplated, considered or
    threatened.

         (d) To the best knowledge of the Company, Materials of Environmental
    Concern 

<PAGE>

                                                                             50


    have not been transported or disposed of from the Properties in violation
    of, or in a manner or to a location which could reasonably give rise to
    liability under, Environmental Laws, 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
    reasonably give rise to liability under, any  applicable Environmental
    Laws.

         (e) There are no judicial proceedings or governmental or
    administrative actions pending, or, to the best knowledge of the Company,
    contemplated or threatened under any Environmental Laws to which the
    Company is or will be named as a party with respect to the Properties, 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.

         (f) To the best knowledge of the Company, 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 in
    connection with the Properties, in material violation of or in amounts or
    in a manner that could give rise to material liability under Environmental
    Laws.

         4.18 COLLATERAL DOCUMENTS.  Upon execution and delivery thereof by the
parties thereto, each of the Company Pledge Agreement and the Subsidiary Pledge
Agreement will be effective to create in favor of the Administrative Agent, for
the ratable benefit of the Banks, a legal, valid and enforceable security
interest in the Pledged Stock described therein and, when stock certificates
representing or constituting the Pledged Stock described therein are delivered
to the Administrative Agent, such security interest shall constitute a perfected
first lien on, and security interest in, all right, title and interest of the
pledgor party thereto in the Pledged Stock described therein.

         4.19 INTELLECTUAL PROPERTY.  The Company and each of its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to own or license which would not have
any reasonable likelihood of having a material adverse effect on the business,
operations, property, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries, taken as a whole.


         SECTION 5.     CONDITIONS PRECEDENT

         5.1 CONDITIONS TO EFFECTIVENESS OF THIS AGREEMENT.  The effectiveness
of this Agreement is subject to the satisfaction, or waiver by each Bank (or, in
the case of the conditions specified in subsections 5.1(b), (c), (e) and (i),
waiver by the Administrative Agent), immediately prior to or concurrently with
the effectiveness of this Agreement, of the following conditions precedent on or
prior to August 31, 1997 (the date of effectiveness, the "EFFECTIVE DATE"):

         (a) AGREEMENT; PLEDGE AGREEMENTS, PLEDGED STOCK.  The Administrative
    Agent shall have received (i) this Agreement, executed and delivered by a
    duly authorized officer of each of the Company, the Banks, the Co-Agents
    and the 

<PAGE>

                                                                             51


    Administrative Agent, (ii) the Company Pledge Agreement executed and
    delivered by a duly authorized officer of the Company, together with (A)
    all stock certificates representing all of the Pledged Stock, which shall
    consist of 100% of the issued and outstanding capital stock of each
    Domestic Subsidiary of the Company which is a Material Subsidiary, 65% of
    the issued and outstanding capital stock of each first-tier Foreign
    Subsidiary of the Company listed on Schedule VII and (B) undated stock
    powers for each certificate representing such Pledged Stock, duly executed
    in blank and delivered by a duly authorized officer of the Company, and
    (iii) with respect to the Pledge Agreement delivered pursuant to clause
    (ii) above, the acknowledgement and consent of each issuer of the Pledged
    Stock thereunder, in the form annexed to each such Pledge Agreement.

         (b) LEGAL OPINIONS.  The Administrative Agent shall have received,
    addressed to the Administrative Agent, the Co-Agents and the Banks, (i) an
    opinion of Fried, Frank, Harris, Shriver & Jacobson, special counsel to the
    Company, dated the Effective Date, substantially in the form of Exhibit G-1
    hereto with such changes thereto as may be approved by and otherwise in
    form and substance satisfactory to the Administrative Agent and its
    counsel, and (ii) an opinion of Keith A. Zar, Esq., Assistant General
    Counsel to the Company, dated the Effective Date, substantially in the form
    of Exhibit G-2 hereto with such changes thereto as may be approved by and
    otherwise in form and substance satisfactory to the Administrative Agent
    and its counsel.  Such opinions shall also cover such other matters
    incident to the transactions contemplated by this Agreement as the
    Administrative Agent shall reasonably require.

         (c) CLOSING CERTIFICATES.  The Administrative Agent shall have
    received a Closing Certificate of the Company, dated the Effective Date,
    substantially in the form of Exhibit H hereto, with appropriate insertions
    and attachments, satisfactory in form and substance to the Administrative
    Agent and its counsel, executed by the President or any Vice President and
    the Secretary or any Assistant Secretary of the Company.

         (d) NO VIOLATION.  The consummation of the transactions contemplated
    hereby shall not contravene, violate or conflict with, nor involve any Bank
    in a violation of, any Requirement of Law, except for violations not
    involving any Bank and which would not have a material adverse effect on
    the business, financial condition, properties, results of operations, value
    or prospects of the Company and its Subsidiaries taken as a whole.

         (e) CONSENTS, AUTHORIZATIONS, AND FILINGS, ETC.  The Administrative
    Agent shall have received copies of all consents, authorizations and
    filings, if any, required in connection with the execution, delivery and
    performance by each Credit Party, and the validity and enforceability
    against each Credit Party, of the Credit Documents to which it is a party,
    and such consents, authorizations and filings shall be in full force and
    effect, except such consents, authorizations and filings, including,
    without limitation, the consents, authorizations and filings listed on
    Schedule IV, the failure to obtain which would not have a material adverse
    effect on the business, financial condition, properties, results of
    operations, value or 

<PAGE>

                                                                             52


    prospects of the Credit Parties and their Subsidiaries taken as a whole.

         (f) NO LEGAL CONSTRAINTS.  There shall be no inquiry, injunction,
    restraining order, action, suit or proceeding pending or entered or any
    statute or rule proposed, enacted or promulgated by any Governmental
    Authority or any other Person, which, in the opinion of the Administrative
    Agent (i) would have a material adverse effect on the making of the Loans
    or the issuance of the Letters of Credit or the Spin-Off or (ii) other than
    the Excluded Litigation, has or will have a material adverse effect on the
    business, financial condition, properties, results of operations, value or
    prospects of the Credit Parties and their Subsidiaries taken as a whole or
    (iii) would give rise to any liability on the part of any Bank, the
    Administrative Agent or any Co-Agent in connection with this Agreement, any
    other Credit Document or the transactions contemplated hereby or thereby or
    (iv) would bar the making of the Loans, the issuance of the Letters of
    Credit or the use of the proceeds thereof in accordance with the terms of
    this Agreement.

         (g) ABSENCE OF CERTAIN LEGAL DEVELOPMENTS.  There shall have been no
    development in any action, suit or proceeding which, in any such case in
    the opinion of the Administrative Agent, (i) would have a material adverse
    effect on the making of the Loans or the issuance of the Letters of Credit
    or (ii) (A) except for the Excluded Litigation, has or will have a material
    adverse effect on the business, financial condition, properties, results of
    operations, value or prospects of the Credit Parties and their Subsidiaries
    taken as a whole or (B) would give rise to any liability on the part of any
    Bank, the Administrative Agent or any Co-Agent in connection with this
    Agreement, any other Credit Document or the transactions contemplated
    hereby or thereby.

         (h) EVENTS OF DEFAULT UNDER OTHER AGREEMENTS.  There shall exist no
    event of default (or condition which would constitute an event of default
    with the giving of notice or the passage of time) under any capital stock,
    financing agreements, lease agreements or other contracts of the Company or
    its Subsidiaries which default would have a material adverse effect on
    business, financial condition, properties, results of operations, value or
    prospects of the Company and its Subsidiaries taken as a whole.

         (i) RELATED AGREEMENTS.  The Administrative Agent shall have received
    each additional document, instrument or piece of information reasonably
    requested by the Banks, including, without limitation, a copy of any debt
    instrument, security agreement or other material contract to which any
    Credit Party or their Subsidiaries may be a party.

         (j) FINANCIAL STATEMENTS.  The Administrative Agent shall have
    received a copy of the financial statements referred to in subsection
    4.1(a) and (b), with a photocopy thereof for each Bank, which shall be
    satisfactory in form and substance to the Administrative Agent.

         (k) BUSINESS PLAN.  The Banks shall have received a satisfactory
    business plan for the 1997 through 1999 fiscal years of the Company and a
    reasonably 

<PAGE>

                                                                             53


    satisfactory written analysis of the business and prospects of the Company
    and its subsidiaries for the period from the Closing Date through the
    Revolving Credit Termination Date.  The Banks acknowledge that they have
    received such business plan and analysis and that this condition is
    satisfied.

    (l) ADDITIONAL MATTERS.  All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Administrative Agent and its counsel.

         5.2 CONDITIONS TO INITIAL LOANS AND LETTERS OF CREDIT.  The obligation
of each Bank to make its initial Loans and the obligation of each Issuing Bank
to issue its initial Letter of Credit are subject to the satisfaction, or waiver
by each Bank, immediately prior to or concurrently with the making of such Loans
or the issuance of such Letter of Credit, as the case may be, of the following
conditions precedent on or prior to November 30, 1997 (the date of the initial
Extensions of Credit, the "CLOSING DATE"):

         (a) EFFECTIVE DATE.  The conditions set forth in subsection 5.1 shall
    have been satisfied or waived in accordance with the terms hereof. 

         (b) SPIN-OFF.  (i)  The Spin-Off Transactions that are scheduled to
    occur under the Spin-Off Documents on or prior to the Closing Date shall
    have been consummated in all material respects, and the conditions
    precedent scheduled to occur under the Spin-Off Documents on or prior to
    the Closing Date shall have been consummated in all material respects, and
    the S-4 Filing and the Spin-Off Documents shall not have been amended in
    any material respect without the consent of the Administrative Agent.

              (ii)  The rulings received by GI Holdings from the Internal
    Revenue Service, to the effect that the Spin-Off will be tax-free for
    federal income tax purposes to the Company, NextLevel, CommScope and their
    respective Subsidiaries and to the stockholders of the Company, shall be in
    full force and effect.

         (c) FEES.  The Administrative Agent shall have received for the
    account of the Banks, or for its own account, as the case may be, all fees
    (including the fees referred to in subsection 3.9) payable to the Banks and
    the Administrative Agent on or prior to the Closing Date.

         (d) NEXTLEVEL AND COMMSCOPE DIVIDENDS.  The Company shall have
    received on the Closing Date cash dividends from NextLevel and CommScope in
    such amounts so that, after giving effect thereto and to the application
    thereof, the Consolidated Total Indebtedness (less cash) of the Company and
    its Subsidiaries is approximately $275,000,000.

         (e) TERMINATION OF EXISTING CREDIT FACILITIES.  The Company shall have
    terminated or been released from all of its existing credit facilities,
    including the Existing GI Delaware Credit Agreement, other than the Taiwan
    Mortgage Indebtedness.

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                                                                             54


         5.3 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.  The obligation of
each Bank to make any Loan (other than any Revolving Credit Loan the proceeds of
which are to be used to repay Refunded Swing Line Loans or a Loan that does not
increase the aggregate outstanding principal amount of the Loans of any Bank)
and the obligation of each Issuing Bank to issue any Letter of Credit (other
than any Letter of Credit which is an extension, renewal or replacement of an
existing Letter of Credit and which does not increase the face amount thereof)
is subject to the satisfaction of the following conditions precedent on the
relevant Borrowing Date:

         (a) REPRESENTATIONS AND WARRANTIES.  If such Loan is made (and/or
    Letter of Credit issued) on the Closing Date, each of the representations
    and warranties made in or pursuant to Section 4, or which are contained in
    any other Credit Document or any certificate, document or financial or
    other statement furnished by or on behalf of the Company or any Subsidiary
    thereof, at any time under or in connection herewith, shall be true and
    correct in all material respects on and as of the Closing Date as if made
    on and as of the Closing Date (unless stated to relate to a specific
    earlier date, in which case such representations and warranties shall be
    true and correct in all material respects as of such earlier date).  If
    such Loan is made (and/or Letter of Credit issued) subsequent to the
    Closing Date, each of the representations and warranties made in or
    pursuant to Section 4 (excluding the representations made pursuant to
    subsection 4.2 which shall be made only on the Closing Date) or which are
    contained in any other Credit Document or in any certificate, document or
    financial or other statement furnished by or on behalf of the Company or
    any Subsidiary thereof shall be true and correct in all material respects
    on and as of the date of such Loan (or Letter of Credit) as if made on and
    as of such date (unless stated to relate to a specific earlier date, in
    which case, such representations and warranties shall be true and correct
    in all material respects as of such earlier 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 Loan to be made or the Letter of Credit to be issued on such
    Borrowing Date.

         Each borrowing by the Company hereunder and the issuance of each
Letter of Credit by each Issuing Bank hereunder shall constitute a
representation and warranty by the Company as of the date of such borrowing or
issuance that the conditions in this subsection 6.3 have been satisfied.


         SECTION 6.     AFFIRMATIVE COVENANTS

         The Company hereby agrees that, so long as the Commitments remain in
effect, any Loan, or Revolving L/C Obligation remains outstanding and unpaid,
any amount remains available to be drawn under any Letter of Credit or any other
amount is owing to any Bank, any Co-Agent, any Issuing Bank, or the
Administrative Agent hereunder, it shall, and, in the case of the agreements
contained in subsections 6.3, 6.4, 6.5, 6.6 and 6.8 cause each of its
Subsidiaries to:

         6.1 FINANCIAL STATEMENTS.  Furnish to the Administrative Agent (with
sufficient 

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                                                                             55


copies for each Bank):

         (a) as soon as available, but in any event within 90 days after the
    end of each fiscal year of the Company, a copy of the consolidated balance
    sheet of the Company and its consolidated Subsidiaries as at the end of
    such year and the related consolidated statements of operations,
    stockholders' equity and cash flows for such year, 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 arising out of the scope of the audit, by Deloitte & Touche
    LLP or other independent certified public accountants of nationally
    recognized standing;

         (b) as soon as available, but in any event not later than 45 days
    after the end of each of the first three quarterly periods of each fiscal
    year of the Company, the unaudited consolidated balance sheet of the
    Company and its consolidated Subsidiaries as at the end of such quarter,
    the related unaudited consolidated statements of stockholders' equity and
    cash flows of the Company and its consolidated Subsidiaries from the
    beginning of such fiscal year through the end of such quarter and the
    related unaudited consolidated statements of operations of the Company and
    its consolidated Subsidiaries for such quarter, setting forth in each case
    in comparative form the figures for the previous year, certified by a
    Responsible Officer as being fairly stated in all material respects
    (subject to normal year-end audit adjustments); and

         (c) as soon as available, but in any event within 90 days after the
    beginning of each fiscal year of the Company to which such budget relates,
    a consolidated operating budget for the Company and its Subsidiaries taken
    as a whole, in each case as adopted by the Board of Directors of the
    Company.

All financial statements shall be complete and correct in all material respects
(subject, in the case of interim statements, to normal year-end audit
adjustments) and shall be prepared in reasonable detail (except that interim
statements may be condensed and may exclude detailed footnote disclosure to the
extent consistent with the rules and regulations of the Securities and Exchange
Commission relating to the presentation of financial information in Quarterly
Reports on Form 10-Q) and in accordance with GAAP applied consistently
throughout the periods reflected therein and with prior periods (except as
concurred in by such accountants or officer, as the case may be, and disclosed
therein and except that interim financial statements need not be restated for
changes in accounting principles which require retroactive application, and
operations which have been discontinued (as defined in Accounting Principles
Board Opinion No. 30) during the current year need not be shown in interim
financial statements as such either for the current period or comparable prior
period).  In the event the Company changes its accounting methods because of
changes in GAAP, or any change in GAAP occurs which increases or diminishes the
protection and coverage afforded to the Banks under current GAAP accounting
methods, the Company or the Administrative Agent, as the case may be, may
request of the other parties to this Agreement an amendment of the financial
covenants contained in this Agreement to reflect such changes in GAAP and to
provide the Banks with protection and coverage equivalent to that existing prior
to such changes in accounting methods or GAAP, and each of the Company, the
Administrative Agent, the Co-Agents and the Banks agree to consider such request
in good faith.

         6.2 CERTIFICATES; OTHER INFORMATION.  Furnish to the Administrative
Agent (with 

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                                                                             56


sufficient copies for each Bank other than reports listed in subsection 6.2(c)
which shall be made available by the Administrative Agent to any Bank upon
request):


         (a) concurrently with the delivery of the consolidated financial
    statements referred to in subsection 6.1(a), a letter from the independent
    certified public accountants reporting on such financial statements (i)
    stating that their audit examination has included a review of the terms of
    subsections 7.3(b), 7.7, 7.8 and 7.9 of this Agreement and any definitions
    set forth in this Agreement relating thereto, in each case as they relate
    to accounting matters, and (ii) stating whether, in connection with their
    audit examination, any condition or event that constitutes any Default or
    Event of Default has come to their attention and, if such a condition or
    event has come to their attention, specifying the nature and period of
    existence thereof; provided that such accountants shall not be liable by
    reason of any failure to obtain knowledge of any such Default or Event of
    Default that would not be disclosed in the course of their audit
    examination; 

         (b) concurrently with the delivery of the financial statements
    referred to in subsections 6.1(a) and (b), a certificate of the chief
    financial officer of the Company (i) stating that such officer has obtained
    no knowledge of any Default or Event of Default except as specified in such
    certificate; (ii) showing in detail as of the end of the related fiscal
    period the figures and calculations supporting such statement in respect of
    clause (b) of subsection 7.3, clause (j) of subsection 7.2, clause (f) of
    subsection 7.14 and subsections 7.7, 7.8, and 7.9; (iii) showing in detail
    as of the end of the related fiscal period the Leverage Ratio as of the end
    of such fiscal period and the calculations supporting such statement and
    stating the Applicable Margin payable as a result of such Leverage Ratio;
    (iv) if not specified in the financial statements delivered pursuant to
    subsection 6.1, specifying the aggregate amount of interest paid or accrued
    by the Company and its Subsidiaries, and the aggregate amount of
    depreciation, depletion and amortization charged on the books of the
    Company and its Subsidiaries, during such accounting period; (v) listing
    all Indebtedness for borrowed money (other than Indebtedness hereunder) in
    each case incurred since the date of the previous consolidated balance
    sheet of the Company delivered pursuant to subsection 6.1(a) or (b); and
    (vi) setting forth the reserve for environmental matters as reflected in
    the most recent consolidated balance sheet of the Company delivered
    pursuant to subsections 6.1(a) and (b) and describing in reasonable detail
    any significant changes in such reserve since the prior consolidated
    balance sheet so delivered by the Company;

         (c) promptly upon receipt thereof, copies of all final reports
    submitted to the Company by independent certified public accountants in
    connection with each annual, interim or special audit of the books of the
    Company made by such accountants, including, without limitation, any final
    comment letter submitted by such accountants to management in connection
    with their annual audit;

         (d) promptly upon their becoming available, copies of all financial
    statements, reports, notices and proxy statements sent or made available
    generally by the Company or any of its Subsidiaries and all regular and
    periodic reports and all final registration statements and final
    prospectuses, if any, filed by the Company or any of its Subsidiaries with
    any securities exchange or with the Securities and Exchange Commission or
    any Governmental Authority succeeding to any of its functions;

<PAGE>

                                                                             57


         (e) concurrently with the delivery of the financial statements
    referred to in subsections 6.1(a) and (b), a management summary describing
    and analyzing the performance of the Company and its Subsidiaries during
    the periods covered by such financial statements to the extent not included
    in the reports filed by the Company with the Securities and Exchange
    Commission which are delivered to the Banks; 

         (f) promptly, such additional financial and other information as any
    Bank may from time to time reasonably (unless a Default or Event of Default
    has occurred and is continuing) request.

         6.3 PAYMENT OF OBLIGATIONS.  Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
obligations and liabilities of whatever nature, except (a) when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Company or any of its Subsidiaries, as the case may
be, (b) for delinquent obligations which do not have a material adverse effect
on the business, financial condition, properties, results of operations, value
or prospects of the Company and its Subsidiaries taken as a whole and (c) for
trade and other accounts payable in the ordinary course of business in
accordance with customary trade terms and which are not overdue for a period of
more than 90 days (or any longer period if longer payment terms are accepted in
the ordinary course of business) or, if overdue for more than 90 days (or such
longer period), as to which a dispute exists and adequate reserves in conformity
with GAAP have been established on the books of the Company and its
Subsidiaries, as the case may be.

         6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.  Continue to
engage in business of the same general type as now conducted by it, and
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 except for rights,
privileges and franchises the loss of which would not in the aggregate have a
material adverse effect on the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as a whole, and except as otherwise permitted by subsections 7.4 and 7.5;
and comply with all applicable Requirements of Law except to the extent that the
failure to comply therewith would not, in the aggregate, have a material adverse
effect on the business, financial condition, properties, results of operations,
value or prospects of the Company and its Subsidiaries taken as a whole.

         6.5 MAINTENANCE OF PROPERTY; INSURANCE.  (a)  Keep all property useful
and necessary in its business in good working order and condition (ordinary wear
and tear excepted); and

         (b)  Maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, 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; PROVIDED that the Company may implement programs of
self insurance in the ordinary course of business and in accordance with
industry standards for a company of similar size so long as reserves are
maintained in accordance with GAAP for the liabilities associated therewith.

<PAGE>

                                                                             58


         6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.  Keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and activities
in accordance with GAAP and all Requirements of Law; and permit representatives
of any Bank upon reasonable notice to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired upon reasonable
notice, and to discuss the business, operations, properties and financial and
other condition of the Company and its Subsidiaries with officers and employees
thereof and with their independent certified public accountants.

         6.7 NOTICES.  Promptly give notice to the Administrative Agent and
each Bank:

    (a) of the occurrence of any Default or Event of Default;

    (b) of any (i) default or event of default under any instrument or other
agreement, guarantee or collateral document of the Company or any of its
Subsidiaries which default or event of default has not been waived and would
have a material adverse effect on the business, financial condition, properties,
results of operations, value or prospects of the Company and its Subsidiaries
taken as a whole, or (ii) litigation, investigation or proceeding which may
exist at any time between the Company or any of its Subsidiaries and any
Governmental Authority, or receipt of any notice of any environmental claim or
assessment against the Company or any of its Subsidiaries by any Governmental
Authority, which in any such case would have a material adverse effect on the
business, financial condition, properties, results of operations, value or
prospects of the Company and its Subsidiaries taken as a whole;

    (c) of any litigation or proceeding affecting the Company or any of its
Subsidiaries (i) in which more than $15,000,000 of the amount claimed is not
covered by insurance or (ii) in which injunctive or similar relief is sought
which if obtained would have a material adverse effect on the business,
financial condition, properties, results of operations, value or prospects of
the Company and its Subsidiaries taken as a whole;

    (d) of the following events, as soon as practicable after, and in any event
within 30 days after, the Company knows thereof:  (i) the occurrence of any
Reportable Event with respect to any Single Employer Plan which Reportable Event
would have a material adverse effect on the business, financial condition,
properties, results of operations, value or prospects of the Company and its
Subsidiaries taken as a whole, or (ii) the institution of proceedings or the
taking of any other action by PBGC, the Company or any Commonly Controlled
Entity to terminate, withdraw from or partially withdraw from any Plan and, with
respect to a Multiemployer Plan, the Reorganization or Insolvency of such Plan,
in each of the foregoing cases which would have a material adverse effect on the
business, financial condition, properties, results of operations, value or
prospects of the Company and its Subsidiaries taken as a whole, and in addition
to such notice, deliver to the Administrative Agent and each Bank whichever of
the following may 

<PAGE>

                                                                             59


be applicable:  (A) a certificate of the chief financial officer of the Company
setting forth details as to such Reportable Event and the action that the
Company or such Commonly Controlled Entity proposes to take with respect
thereto, together with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or (B) any notice delivered by PBGC evidencing
its intent to institute such proceedings or any notice to PBGC that such Plan is
to be terminated, as the case may be; and

    (e) of a material adverse change known to the Company or any of its
Subsidiaries in the business, financial condition, properties, results of
operations, value or prospects of the Company and its Subsidiaries taken as a
whole; and

    (f) of (i) any release or discharge by the Company or any Subsidiary of any
Materials of Environmental Concern required to be reported under Environmental
Laws to any Governmental Authority; (ii) any condition, circumstance, occurrence
or event that could result in a material liability under Environmental Laws or
could result in the imposition of any lien or other restriction on the title,
ownership or transferability of any Property; and (iii) any proposed action to
be taken by the Company or any Subsidiary that could subject the Company or any
Subsidiary to any material additional or different requirements or liabilities
under Environmental Law, to the extent and whenever the Company is or becomes
aware that any of the foregoing matters described in clause (i) through clause
(iii) has occurred and individually or in the aggregate result or are reasonably
likely to result in any increase in the Company's reserve for environmental
matters of more than $5,000,000 in excess of the reserve reflected on the most
recent financial statements delivered to the Banks pursuant to subsection 6.1.

Each notice pursuant to this subsection 6.7 shall be accompanied by a statement
of the chief executive officer or the chief financial officer of the Company
setting forth details of the occurrence referred to therein and (in the cases of
clauses (a) through (f)) stating what action the Company proposes to take with
respect thereto.

         6.8 ADDITIONAL SUBSIDIARY GUARANTORS; STOCK PLEDGE.  (a) If any
Subsidiary of the Company (whether presently existing or hereafter created or
acquired) shall become a Material Subsidiary, the Company shall cause such
Material Subsidiary to promptly thereafter execute and deliver a Subsidiary
Guarantee in favor of the Administrative Agent in substantially the form of
Exhibit D, each of which Subsidiary Guarantees shall be accompanied by such
resolutions, incumbency certificates and legal opinions as are reasonably
requested by the Administrative Agent and its counsel.

         (b) If any Subsidiary of the Company (whether presently existing or
hereafter created or acquired) shall become a Material Subsidiary (PROVIDED that
any first tier Foreign Subsidiary which would otherwise satisfy the definition
of "Material Subsidiary" but for the fact that such Subsidiary is a Foreign
Subsidiary or more than 75% of the assets of such Subsidiary are securities of
foreign companies (such determination to be made on the basis of fair market
value) shall be deemed to be a "Material Subsidiary" for the purposes of this
paragraph (b) only), the Company shall cause such Material Subsidiary to
promptly pledge or cause to be pledged at all times 100% of the issued and
outstanding stock of such Material Subsidiary owned by it 

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                                                                             60


pursuant to a Pledge Agreement substantially in the form of Exhibit E or F, as
appropriate, each of which Pledge Agreements shall be accompanied by such
resolutions, incumbency certificates and legal opinions as are reasonably
requested by the Administrative Agent and its counsel; PROVIDED that if such
Material Subsidiary is (i) a Domestic Subsidiary more than 75% of the assets of
which are securities of foreign companies (such determination to be made on the
basis of fair market value) or (ii) a Foreign Subsidiary, only 65% of the stock
of such Material Subsidiary shall be required to be pledged pursuant to this
subsection 6.8(b).

         (c) In the event that there shall be a Change in Law which eliminates
the adverse tax consequences to the Company or any of its Subsidiaries which
would have resulted on the date hereof from (A) the pledge of more than 65% of
stock of any Foreign Subsidiary which is a Material Subsidiary or any Domestic
Subsidiary which is a Material Subsidiary more than 75% of the assets of which
are securities of foreign companies (such determination to be made on the basis
of fair market value) or (B) the guarantee by a Subsidiary which would be a
Material Subsidiary but for the fact that 75% of the assets of such Subsidiary
are securities of foreign companies, of the Loans and the other obligations of
the Company hereunder, the Company shall promptly thereafter (i) pledge and
deliver, or shall cause to be pledged and delivered, to the Administrative Agent
such additional stock as can be so pledged without adverse tax consequences and
(ii) cause any such Subsidiary that has not previously executed and delivered a
Guarantee because of such adverse tax consequences to deliver a Guarantee to the
Administrative Agent to the extent any such guarantee can be so executed and
delivered without adverse tax consequences to the Company or any of its
Subsidiaries.

         (d) Upon the request of the Administrative Agent, promptly perform or
cause to be performed any and all acts and execute or cause to be executed any
and all documents (including, without limitation, financing statements and
continuation statements) for filing under the provisions of any Requirement of
Law which are necessary or advisable to maintain in favor of the Administrative
Agent, for the benefit of the Banks, Liens on the Pledged Stock that are duly
perfected in accordance with all applicable Requirements of Law.

         6.9 ENVIRONMENTAL LAWS.  Except to the extent the failure of which
could not reasonably be expected to have a material adverse effect on the
business, financial condition, properties, results of operations, value or
prospects of the Company and its Subsidiaries taken as a whole, comply with all
applicable Environmental Laws and obtain and comply in all material respects
with, and maintain any and all, licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws including
conducting and completing 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, unless such order
or directive is being contested in good faith by the Company or a Subsidiary.


         SECTION 7.     NEGATIVE COVENANTS

         The Company hereby agrees that from and after the Closing Date it
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly so long as the Commitments remain in effect or any Loan or Revolving
L/C Obligation remains outstanding and unpaid, any amount remains available to
be drawn under any Letter of Credit or any other amount is owing to 

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                                                                             61


any Bank, any Co-Agent, any Issuing Bank or the Administrative Agent hereunder:

         7.1 AMENDMENTS OF SPIN-OFF DOCUMENTS.  Amend, waive or terminate, or
permit any amendment, waiver or termination of, any Spin-Off Document that
materially adversely affects (a) the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company or any of its Subsidiaries to perform
their respective obligations under the Spin-Off Documents or (c) the rights and
remedies of the Banks. 

         7.2 LIMITATION ON LIENS.  Create, incur, assume or suffer to exist any
Lien upon any of its property, assets, income or profits, whether now owned or
hereafter acquired, except:

         (a) Liens for taxes, assessments or other governmental charges not yet
    due or which are being contested in good faith and by appropriate
    proceedings if adequate reserves with respect thereto are maintained on the
    books of the Company or such Subsidiary, as the case may be, in accordance
    with GAAP;

         (b) carriers', warehousemen's, mechanics', landlords', materialmen's,
    repairmen's or other like Liens arising in the ordinary course of business
    in respect of obligations which are not yet due or which are being
    contested in good faith and by appropriate proceedings if adequate reserves
    with respect thereto are maintained on the books of the Company or such
    Subsidiary, as the case may be, in accordance with GAAP;

         (c) pledges or deposits in connection with workmen's compensation,
    unemployment insurance and other social security legislation;

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

         (e) easements, right-of-way, zoning and similar restrictions and other
    similar encumbrances or title defects incurred, or leases or subleases
    granted to others, in the ordinary course of business, which do not
    interfere with or adversely affect in any material respect the ordinary
    conduct of the business of the Company and its Subsidiaries taken as a
    whole;

         (f) Liens in favor of the Banks pursuant to the Credit Documents and
    bankers' liens arising by operation of law;

         (g) Liens on assets of corporations which became or become
    Subsidiaries of the Company, PROVIDED that such Liens exist at the time
    such corporations became or become Subsidiaries and are not created in
    anticipation thereof;

         (h) Liens on the Taiwan Mortgaged Real Property securing the Taiwan
    Mortgage Indebtedness;

         (i) Liens on documents of title and the property covered thereby
    securing Indebtedness in respect of the Letters of Credit which are
    Commercial L/Cs;

<PAGE>

                                                                             62


         (j) Liens not otherwise permitted by this subsection 7.2 securing any
    Indebtedness permitted under this Agreement or obligations to Governmental
    Authorities, PROVIDED that (i) the aggregate principal amount of
    Indebtedness and the aggregate amount of obligations to Governmental
    Authorities secured by such Liens permitted by this paragraph (j) shall at
    no time exceed $50,000,000 and (ii) no such Liens shall encumber any
    capital stock of the Company or any Subsidiary;

         (k) any judgment or judicial attachment Lien with respect to any
    judgment that does not constitute an Event of Default; 

         (l) license or leases in the ordinary course of business of patents,
    copyrights, trademarks, trade names and other intellectual property owned
    by the Company or any Subsidiary, which do not in the aggregate materially
    detract from the value of its property or other assets or materially impair
    the use thereof in the operation of its business, and rights to royalties,
    fees and other compensation in respect of intellectual property licensed,
    leased or used by the Company or any Subsidiary;

         (m) Liens arising solely out of consignments of inventory and
    work-in-process in the ordinary course of business; and

         (n) Liens on fixed or capital assets acquired or improved by the
    Company or any Subsidiary; PROVIDED that (i) such security interests secure
    Indebtedness permitted by clause (e) of subsection 7.14, (ii) such security
    interests and the Indebtedness secured thereby are incurred prior to or
    within 180 days after such acquisition or the completion of such
    improvements and the Indebtedness secured thereby does not exceed 100% of
    the cost of acquiring or improving such fixed or capital assets and
    (iii) such security interests shall not apply to any other property or
    assets of the Company or any Subsidiary.

         7.3 LIMITATION ON GUARANTEE OBLIGATIONS.  Create, incur, assume or
suffer to exist any Guarantee Obligation except:

         (a) guarantees of obligations to third parties made in the ordinary
    course of business in connection with relocation of employees of the
    Company or any of its Subsidiaries;

         (b) guarantees not otherwise permitted by this subsection 7.3 by the
    Company and its Subsidiaries incurred in the ordinary course of business
    for an aggregate amount not to exceed $50,000,000 at any one time;

         (c) Guarantee Obligations existing on the Closing Date and described
    in Schedule V;

         (d) Guarantee Obligations in respect of foreign currency exchange
    contracts permitted by subsection 7.12;

         (e) Guarantee Obligations pursuant to the Subsidiary Guarantees; 

<PAGE>

                                                                             63


         (f) guarantees by the Company of Indebtedness and other obligations of
    its Subsidiaries and by Subsidiaries of Indebtedness and other obligations
    of other Subsidiaries and the Company, in each case as permitted under this
    Agreement; and

         (g) indemnities and other similar Guarantee Obligation arising out of
    the Spin-Off Documents.

         7.4 PROHIBITION OF FUNDAMENTAL CHANGES.  Enter into any transaction of
acquisition of, or merger or consolidation or amalgamation with, any other
Person (including any Subsidiary or Affiliate of the Company or any of its
Subsidiaries), or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or make any material change in the present method
of conducting business or engage in any type of business other than of the same
general type now conducted by it, except for the transactions otherwise
permitted pursuant to subsections 7.5 and 7.6.

         7.5 LIMITATION ON SALE OF ASSETS.  Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, tax benefits, receivables and leasehold
interests), whether now owned or hereafter acquired except (a) for the sale or
other disposition of any property that, in the reasonable judgment of the
Company, has become uneconomic, obsolete or worn out, and which is disposed of
in the ordinary course of business; (b) for sales of inventory and receivables
made in the ordinary course of business; (c) that any Subsidiary of the Company
may sell, lease, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Company or a wholly-owned Subsidiary
of the Company and any Subsidiary of the Company may sell or otherwise dispose
of, or part with control of any or all of, the stock of any Subsidiary to a
wholly-owned Subsidiary of the Company or a Subsidiary of the Company may merge
with the Company (so long as the Company is the surviving corporation) or
another Subsidiary, PROVIDED that no such transaction may be effected if it
would result in the transfer of any assets of, or any stock of, a Subsidiary to
another Subsidiary whose capital stock has not been pledged to the
Administrative Agent or which has pledged a lesser percentage of its capital
stock to the Administrative Agent than was pledged by the transferor Subsidiary;
and (d) for the sale or other disposition by the Company or any of its
Subsidiaries of other assets consummated after the Closing Date, PROVIDED that
(i) such sale or other disposition shall be made for fair value on an
arm's-length basis and (ii) the aggregate fair market value of all such assets
sold or disposed of under this clause (d) (and the proceeds of which are not
reinvested within one year in similar assets) shall not exceed 20% of the
consolidated total assets of the Company and its Subsidiaries as of the Closing
Date; PROVIDED that in no event shall the Company or any of its Subsidiaries
sell any assets pursuant to this clause (d) if the revenue generated by such
assets would have exceeded 20% of the consolidated net revenue of the Company
and its Subsidiaries for the preceding fiscal year.

         7.6 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES.  Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of, or make any other investment
in, any Person except:

         (a) extensions of trade credit in the ordinary course of business;

         (b) investments by the Company in (i) Subsidiary Guarantors, (ii) any
    Foreign 

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                                                                             64


    Subsidiary set forth on Schedule VI, the stock of which or the stock of the
    first-tier Foreign Subsidiary which is a direct or indirect parent of which
    has been pledged in accordance with the terms of this Agreement, and, (iii)
    to the extent not otherwise permitted by paragraph (c) below, Persons not
    described in clauses (i) or (ii) above in an aggregate amount not to exceed
    $75,000,000; 

         (c) acquisitions of the capital stock of, or assets constituting a
    business unit of, another Person, the aggregate consideration for all such
    acquisitions (including assumed debt) does not exceed $100,000,000 in any
    fiscal year and $250,000,000 in the aggregate (plus, in each case, the
    amount of non-mandatorily redeemable capital stock of the Company issued as
    consideration for any such acquisition), PROVIDED that, after giving effect
    to any such acquisition, the Company shall be in pro forma compliance with
    subsections 7.7, 7.8 and 7.9 and no Default or Event or Default shall have
    occurred and be continuing or shall result therefrom;

         (d) the Company and its Subsidiaries may invest in, acquire and hold
    Cash Equivalents;

         (e) the Company or any of its Subsidiaries may make travel and
    entertainment advances, relocation loans and payroll advances in the
    ordinary course of business to officers and employees of the Company or any
    such Subsidiary in an aggregate amount not to exceed $500,000 at any time
    outstanding;

         (f) investments of the Company existing on the Effective Date and
    described in Schedule VIII;

         (g) investments in obligations arising out of bankruptcy of customers
    and suppliers; and

         (h) investments arising out of non-cash consideration received in
    connection with sales of assets as permitted by subsection 7.5.

         7.7 MAINTENANCE OF CONSOLIDATED NET WORTH.  Permit Consolidated Net
Worth at any time to be less than the sum (without duplication of any item) of
(i) $65,000,000 and (ii) 50% of the Consolidated Net Income of the Company, if
positive, for each fiscal quarter (commencing with the fiscal quarter beginning
on or about July 1, 1997).

         7.8 MAINTENANCE OF INTEREST COVERAGE.  Permit the Interest Coverage
Ratio on the last day of any fiscal quarter to be less than 3.75 to 1.0.

         7.9 MAINTENANCE OF LEVERAGE RATIO.  Permit, as of the last day of any
fiscal quarter ending on or before December 31, 1998, the Leverage Ratio to be
greater than 4.0 to 1.0 and, as of the last day of any fiscal quarter ending
after December 31, 1998, the Leverage Ratio to be greater than 3.5 to 1.0.

         7.10 LIMITATION ON DIVIDENDS AND STOCK REPURCHASES.  Declare any
dividends on any shares of any class of stock, or make any payment on account
of, or set apart assets for a sinking or other analogous fund for, the purchase,
redemption, retirement or other acquisition of 

<PAGE>

                                                                             65


any shares of any class of stock (including the outstanding capital stock of the
Company), whether now or hereafter outstanding, or make any other distribution
in respect thereof, either directly or indirectly, whether in cash or property
or in obligations of the Company or any of its Subsidiaries (all of the
foregoing being referred to herein as "RESTRICTED PAYMENTS"); except that:

         (a) Subsidiaries may pay dividends directly or indirectly to the
    Company or the other Subsidiaries which are directly or indirectly
    wholly-owned by the Company, and Foreign Subsidiaries may pay dividends
    directly or indirectly to Foreign Subsidiaries which are directly or
    indirectly wholly-owned by the Company;

         (b) Subsidiaries may pay dividends directly or indirectly to the
    Company or other Subsidiaries and each other owner of an equity interest in
    such Subsidiary on a pro rata basis based on their relative ownership
    interests, and Foreign Subsidiaries may pay dividends directly or
    indirectly to Foreign Subsidiaries and each other owner of an equity
    interest in such Foreign Subsidiary on a pro rata basis based on their
    relative ownership interests;

         (c) so long as after giving effect to such Restricted Payments, no
    Default or Event of Default shall have occurred and be continuing or shall
    result therefrom, the Company may make Restricted Payments in an aggregate
    amount not to exceed the sum of (i) $25,000,000 PLUS (ii) 50% of positive
    Consolidated Net Income from July 1, 1997; and

         (d) so long as after giving effect to such Restricted Payments, no
    Default or Event of Default shall have occurred and be continuing or shall
    result therefrom, the Company may distribute to its shareholders the
    capital stock of NextLevel in connection with the Spin-Off.

         7.11 TRANSACTIONS WITH AFFILIATES.  Enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate except (a) for transactions
which are otherwise permitted under this Agreement and which are in the ordinary
course of the Company's or a Subsidiary's business and which are upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a hypothetical comparable arm's length transaction with a Person
not an Affiliate, (b) as permitted under subsections 7.3(a) and (f), subsection
7.6 and subsection 7.10 or (c) any transactions entered into as part of the
Spin-Off Transactions.

         7.12 FOREIGN EXCHANGE CONTRACTS.  Enter into any foreign currency
exchange contracts other than in the ordinary course of business.

         7.13 FISCAL YEAR.  Permit the fiscal year of the Company to end on a
day other than December 31, unless the Company shall have given at least 45 days
prior written notice to the Administrative Agent.

         7.14 LIMITATION ON INDEBTEDNESS.  Create, incur, assume or suffer to
exist any Indebtedness (including any Indebtedness of any of its Subsidiaries),
except:

         (a) Indebtedness of the Company under this Agreement and under any
    Registered Form Notes;


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                                                                             66


         (b) the Taiwan Mortgage Indebtedness;

         (c) (i) Indebtedness of the Company to any of its Subsidiaries and of
    any wholly-owned domestic Subsidiary to the Company or any other
    Subsidiary; and (ii) Indebtedness of any wholly-owned foreign Subsidiary to
    the Company or any other Subsidiary to the extent permitted by subsection
    7.6;

         (d) Indebtedness consisting of reimbursement obligations under surety,
    indemnity, performance, release and appeal bonds and guarantees thereof and
    letters of credit required in the ordinary course of business or in
    connection with the enforcement of rights or claims of the Company or its
    Subsidiaries;

         (e) Capital lease obligations, mortgage financings, purchase money
    Indebtedness and industrial revenue bond issues in respect of real property
    or equipment incurred by the Company prior to or within 180 days after a
    capital expenditure in order to finance the purchase or improvement of
    properties;

         (f) Indebtedness consisting of foreign currency exchange contracts
    permitted under subsection 7.12; and

         (g) Indebtedness not otherwise permitted by the preceding clauses of
    this subsection 7.15 not exceeding $50,000,000 in aggregate principal
    amount at any one time outstanding.

         7.15 LIMITATION ON CAPITAL EXPENDITURES.  At any time when the
Leverage Ratio is greater than or equal to 1.50 to 1, make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any expenditure
for lease, purchase, construction or use of any property which, in accordance
with GAAP, is or should be included in "capital expenditures" or similar items
in the Company's consolidated statement of cash flow except for expenditures by
the Company and its Subsidiaries in the ordinary course of business not
exceeding an aggregate of $75,000,000 during any fiscal year and $300,000,000
during the term of this Agreement (other than any such expenditures permitted
under subsection 7.6), in each case net of trade-ins and Net Proceeds from sales
of tangible capital assets, to the extent such proceeds are not required to be
applied to prepayments pursuant to subsection 3.5.

         7.16 LIMITATION ON LEASES.  Permit Consolidated Lease Expense for any
fiscal year of the Company to exceed $10,000,000.

         7.17 LIMITATION ON SALES AND LEASEBACKS.  Enter into any arrangement
with any Person providing for the leasing by the Company or any Subsidiary of
real or personal property, in an aggregate amount for all such property
exceeding $5,000,000, which has been or is to be sold or transferred by the
Company or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Company or such Subsidiary.

         7.18 LIMITATION ON NEGATIVE PLEDGE CLAUSES; PAYMENT RESTRICTIONS. 
Enter into with any Person any agreement, other than (a) this Agreement, (b) any
industrial revenue bonds, 

<PAGE>

                                                                             67


purchase money mortgages, development financing or financing leases permitted by
this Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby) or (c) any other Contractual
Obligation which prohibits the assignment of such Contractual Obligation or the
property which is the subject of such Contractual Obligation (in which case, any
prohibition or limitation shall only be effective against such Contractual
Obligation or the property which is the subject of such Contractual Obligation),
which prohibits or limits the ability of the Company or any of its Subsidiaries
to create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, or prohibits or
limits the ability of the Company or any of its Subsidiaries to make payments to
the Company or any of its Subsidiaries.



         SECTION 8.     EVENTS OF DEFAULT

         Upon the occurrence of any of the following events:

         (a) The Company shall fail to (i) pay any principal of any Loan when
    due in accordance with the terms hereof or thereof or to reimburse an
    Issuing Bank in accordance with subsection 2.6 or (ii) pay any interest on
    any Loan or any other amount payable hereunder within five days after any
    such interest or other amount becomes due in accordance with the terms
    thereof or hereof; or

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

         (c) The Company shall default in the observance or performance of any
    agreement contained in subsection 6.7(a) or Section 7 of this Agreement or
    any Credit Party shall default in the observance or performance of any
    agreement contained in Section 5 of any Pledge Agreement to which it is a
    party or Section 2 of any Subsidiary Guarantee to which it is a party; or

         (d) The Company or any other Credit Party shall default in the
    observance or performance of any other agreement contained in any Credit
    Document, and such default shall continue unremedied for a period of 30
    days; or

         (e) The Company or any of its Subsidiaries shall (i) default in any
    payment of principal of or interest on any Indebtedness (other than the
    Loans, the Revolving L/C Obligations and any intercompany debt) or in the
    payment of any Guarantee Obligation, beyond the period of grace, 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 or Guarantee Obligation 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 

<PAGE>

                                                                             68


    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, any applicable
    grace period having expired, or such Guarantee Obligation to become
    payable, any applicable grace period having expired, PROVIDED that the
    aggregate principal amount of all such Indebtedness and Guarantee
    Obligations under clauses (i) and (ii) equals or exceeds $10,000,000; or

         (f) (i) The Company or any of its Subsidiaries 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 or
    other similar official for it or for all or any substantial part of its
    assets, or the Company or any of its Subsidiaries shall make a general
    assignment for the benefit of its creditors; or (ii) there shall be
    commenced against the Company or any of its Subsidiaries 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 of its Subsidiaries any case, proceeding or 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 of its Subsidiaries
    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 of its Subsidiaries shall
    generally not, or shall be unable to, or shall admit in writing its
    inability to, pay its debts as they become due; 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,
    (iii) a Reportable Event (other than a Reportable Event with respect to
    which the 30-day notice requirement under Section 4043 of ERISA has been
    waived or which occurs by reason of the Spin-Off Transactions) shall occur
    with respect to, or proceedings to have a trustee appointed shall commence
    with respect to, or a trustee shall be appointed to administer or to
    terminate, any Single Employer Plan, which Reportable Event or institution
    of proceedings or appointment of a trustee is, in the reasonable opinion of
    the Required Banks, likely to result in the termination of such Plan for
    purposes of Title IV of ERISA, and, in the case of a Reportable Event, such
    Reportable Event shall continue unremedied for ten days after notice of
    such Reportable Event is given and, in the case of the institution of
    proceedings, such proceedings shall continue for ten days after
    commencement thereof or (iv) any Single Employer Plan shall terminate for
    purposes of Title IV of ERISA; and in each case in clauses (i) through (iv)
    above, such event or condition, together with all other such events or
    conditions relating to such Plans, if any, could subject the Company or any
    of 

<PAGE>

                                                                             69


    its Subsidiaries to any tax, penalty or other liabilities which in the
    aggregate are material in relation to the business, financial condition,
    properties, results of operations, value or prospects of the Company and
    its Subsidiaries taken as a whole; or

         (h) Except with respect to the Excluded Litigation, one or more final
    judicial judgments or decrees shall be entered against the Company or any
    of its Subsidiaries involving in the aggregate for all such Persons a
    liability (not paid or fully covered by insurance) of $10,000,000 or more
    and all such judgments or decrees shall not have been vacated, discharged,
    stayed or bonded pending appeal within the time required by the terms of
    such judgment; or

         (i) Any Pledge Agreement or any Guarantee shall cease, for any reason,
    to be in full force and effect or any Credit Party shall so assert in
    writing, or any Pledge Agreement shall cease to be effective to grant a
    perfected Lien on the collateral described therein with the priority
    purported to be created thereby (other than as a result of any action or
    inaction of the part of the Administrative Agent or the Banks); or

         (j) (i)  Any Person or two or more Persons (except FL Affiliates)
    acting in concert shall have acquired beneficial ownership (within the
    meaning of Rule 13d-3 of the Securities and Exchange Commission promulgated
    under the Exchange Act) of more than 33% of the outstanding shares of
    voting stock of the Company; or (ii) any Person or two or more Persons
    (except FL Affiliates) acting in concert shall acquire the power to elect a
    majority of the Board of Directors of the Company; 

then, and in any such event, (x) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above, automatically (i) the Commitments
shall immediately terminate and the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement shall immediately
become due and payable, and (ii) all obligations of the Company in respect of
the Letters of Credit, although contingent and unmatured, shall become
immediately due and payable and the Issuing Banks' obligations to issue Letters
of Credit shall immediately terminate and (y) if such event is any other Event
of Default, so long as any such Event of Default shall be continuing, either or
both of the following actions may be taken:  (i) with the consent of the
Required Banks, the Administrative Agent may, or upon the request of the
Required Banks, the Administrative Agent shall, by notice to the Company,
declare the Commitments and any Bank's obligations to issue Letters of Credit to
be terminated forthwith, whereupon the Commitments and such obligations shall
immediately terminate; and (ii) with the consent of the Required Banks, the
Administrative Agent may, or upon the request of the Required Banks, the
Administrative Agent shall, by notice of default to the Company, (A) declare all
or a portion of the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable, and (B) declare all
or a portion of the obligations of the Company in respect of the Letters of
Credit, although contingent and unmatured, to be due and payable forthwith,
whereupon the same shall immediately become due and payable and/or demand that
the Company discharge any or all of the obligations supported by the Letters of
Credit by paying or prepaying any amount due or to become due in respect of such
obligations.  All payments under this Section 8 on account of undrawn Letters of
Credit shall be made by the Company directly to a cash collateral account
established by the Administrative Agent for such purpose for application to the
Company's reimbursement obligations under subsection 2.6 as 

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                                                                             70


drafts are presented under the Letters of Credit, with the balance, if any, to
be applied to the Company's obligations under this Agreement as the
Administrative Agent shall determine with the approval of the Required Banks. 
Except as expressly provided above in this Section 8, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.


         SECTION 9.     THE CO-AGENTS; THE ADMINISTRATIVE
                        AGENT; ISSUING BANKS

         9.1 APPOINTMENT.  Each Bank hereby irrevocably designates and appoints
Chase, Bank of America National Trust and Savings Association, Bank of Montreal,
The Bank of Nova Scotia, CIBC Inc., Credit Lyonnais New York Branch, Fleet
National Bank and Wachovia Bank, N.A. as the Co-Agents of such Bank under this
Agreement and acknowledges that no Co-Agent, in its capacity as such, shall have
any duties under the Credit Documents.  Each Bank hereby irrevocably designates
and appoints Chase as the Administrative Agent under this Agreement and
irrevocably authorizes Chase as Administrative Agent for such Bank to take such
action on its behalf under the provisions of the Credit Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of the Credit Documents, together with such
other powers as are reasonably incidental thereto.  Notwithstanding any
provision to the contrary elsewhere in this Agreement, neither the Co-Agents nor
the Administrative Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Credit Documents or otherwise exist against
the Co-Agents or the Administrative Agent.

         9.2 DELEGATION OF DUTIES.  The Administrative Agent may execute any of
its duties under this Agreement and each of 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.  Without limiting the
foregoing, the Administrative Agent may appoint Chase Manhattan Bank Agency
Services Corporation as its agent to perform the functions of the Administrative
Agent hereunder relating to the advancing of funds to the Company and
distribution of funds to the Banks and to perform such other related functions
of the Administrative Agent hereunder as are reasonably incidental to such
functions.  None of the Co-Agents nor the Administrative Agent shall be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care, except as otherwise provided in subsection
9.3.

         9.3 EXCULPATORY PROVISIONS.  Neither the Co-Agents nor the
Administrative Agent nor any of their officers, directors, employees, agents,
attorneys-in-fact, Affiliates or Subsidiaries shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with the 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 Banks for any recitals, statements, representations or warranties made by
any Credit Party or any officer thereof contained in the Credit Documents or in
any certificate, report, statement or other document referred to or provided for
in, or received by any Co-Agent or the Administrative Agent under or in
connection with, the Credit Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of the Credit Documents or for any
failure of any Credit Party to perform its obligations thereunder.  None of the
Co-Agents or the Administrative Agent shall be 

<PAGE>

                                                                             71


under any obligation to any Bank to ascertain or to inquire as to the observance
or performance of any of the agreements contained in, or conditions of, any
Credit Document, or to inspect the properties, books or records of any Credit
Party.

         9.4 RELIANCE BY CO-AGENTS AND ADMINISTRATIVE AGENT.  Each of the
Co-Agents and the Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any 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 Company), independent accountants and other experts
selected by such Co-Agent or the Administrative Agent.  Each of the Co-Agents
and the Administrative Agent may deem and treat the payee of any promissory note
issued under or in connection with this Agreement as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with such Co-Agent or the Administrative Agent.  Each of
the Co-Agents and the Administrative Agent shall be fully justified in failing
or refusing to take any action under any Credit Document unless it shall first
receive such advice or concurrence of the Required Banks (or, where unanimous
consent of the Banks is expressly required hereunder, such Banks) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.  Each of the Co-Agents and the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any Credit Document in accordance with a request
of the Required Banks (or the Release Banks with respect to matters requiring
the consent of the Release Banks), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Banks.

         9.5 NOTICE OF DEFAULT.  None of the Co-Agents or the Administrative
Agent shall be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default hereunder unless such Co-Agent or the Administrative
Agent has received written notice from a Bank or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default".  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall promptly give notice
thereof to the Banks.  The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Banks; PROVIDED that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.

         9.6 NON-RELIANCE ON CO-AGENTS, ADMINISTRATIVE AGENT AND OTHER BANKS. 
Each Bank expressly acknowledges that none of the Co-Agents or the
Administrative Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates has made any
representations or warranties to it and that no act by any Co-Agent or the
Administrative Agent hereafter taken, including any review of the affairs of the
Credit Parties, shall be deemed to constitute any representation or warranty by
any Co-Agent or the Administrative Agent to any Bank.  Each Bank represents to
each Co-Agent and to the Administrative Agent that it has, independently and
without reliance upon any Co-Agent or the Administrative Agent or any other
Bank, and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, operations, 

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                                                                             72


property, financial and other condition and creditworthiness of the Credit
Parties and made its own decision to make its Loans hereunder, issue and
participate in the Letters of Credit and enter into this Agreement.  Each Bank
also represents that it will, independently and without reliance upon any
Co-Agent or the Administrative Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under the Credit Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Credit Parties.  Except for
notices, reports and other documents expressly required to be furnished to the
Banks by the Administrative Agent hereunder, none of the Co-Agents and the
Administrative Agent shall have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, financial
condition, assets, liabilities, net assets, properties, results of operations,
value, prospects and other condition or creditworthiness of the Credit Parties
which may come into the possession of any Co-Agent or the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact,
Affiliates or Subsidiaries.

         9.7 INDEMNIFICATION.  The Banks severally agree to indemnify each of
the Co-Agents and the Administrative Agent in its capacity as such (to the
extent not reimbursed by the Credit Parties and without limiting the obligation
of the Credit Parties to do so), ratably according to the respective amounts of
their Commitments Percentages, 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 payment of the Loans) be
imposed on, incurred by or asserted against any Co-Agent or the Administrative
Agent in any way relating to or arising out of the Credit Documents or any
documents contemplated by or referred to herein or the transactions contemplated
hereby or any action taken or omitted by any Co-Agent or the Administrative
Agent under or in connection with any of the foregoing; PROVIDED that no Bank
shall be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from any Co-Agent's or the Administrative Agent's
gross negligence or willful misconduct.  The agreements contained in this
subsection 9.7 shall survive the payment of the Loans and all other amounts
payable hereunder.

         9.8 CO-AGENTS AND ADMINISTRATIVE AGENT IN THEIR INDIVIDUAL CAPACITIES. 
Each of the Co-Agents and the Administrative Agent and their respective
Affiliates and Subsidiaries may make loans to, accept deposits from and
generally engage in any kind of business with the Credit Parties as though such
Co-Agent or Administrative Agent were not a Co-Agent or the Administrative Agent
hereunder, as the case may be.  With respect to its Loans made or renewed by it
and any Letter of Credit issued by or participated in by it, each of the
Co-Agents and the Administrative Agent shall have the same rights and powers,
duties and liabilities under the Credit Documents as any Bank and may exercise
the same as though it were not a Co-Agent or the Administrative Agent, as the
case may be, and the terms "Bank" and "Banks" shall include each of the
Co-Agents and the Administrative Agent in their individual capacities.

         9.9 SUCCESSOR CO-AGENT OR ADMINISTRATIVE AGENT.  Each Co-Agent and the
Administrative Agent may resign as Co-Agent or Administrative Agent, as the case
may be, upon 30 days' notice to the Banks.  The resignation of any Co-Agent
shall be effective without any further act or deed on the part of such former
Co-Agent.  If the Administrative Agent shall 

<PAGE>

                                                                             73


resign as Administrative Agent under the Credit Documents, then the Required
Banks shall appoint from among the Banks a successor agent for the Banks which
successor agent shall be approved by the Company (which approval shall not be
unreasonably withheld) and upon its acceptance thereof, such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent and
the term "Administrative Agent" shall mean such successor agent effective upon
its appointment, and the former Administrative Agent's rights, powers and duties
as Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement.  After any retiring Co-Agent's or Administrative Agent's
resignation hereunder as Co-Agent or Administrative Agent, as the case may be,
the provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Co-Agent or Administrative
Agent, as the case may be, under the Credit Documents.


         9.10 AN ISSUING BANK AS ISSUER OF LETTERS OF CREDIT.  Each Bank and
each Co-Agent hereby acknowledge that the provisions of this Section 9 shall
apply to any Issuing Bank, in its capacity as issuer of any Letter of Credit, in
the same manner as such provisions are expressly stated to apply to the
Administrative Agent.


         SECTION 10. MISCELLANEOUS

         10.1 AMENDMENTS AND WAIVERS.  No Credit Document nor any terms thereof
may be amended, supplemented or modified except in accordance with the
provisions of this subsection 10.1.  With the written consent of the Required
Banks, the Administrative Agent and the respective Credit Parties may, from time
to time, enter into written amendments, supplements or modifications to any
Credit Document for the purpose of adding any provisions to such Credit Document
to which they are parties or changing in any manner the rights of the Banks or
of any such Credit Party or any other Person thereunder or waiving, on such
terms and conditions as the Administrative Agent may specify in such instrument,
any of the requirements of any such Credit Document or any Default or Event of
Default and its consequences; PROVIDED, HOWEVER, that:

         (a)  no such waiver and no such amendment, supplement or modification
    shall directly or indirectly release any Subsidiary Guarantor from its
    obligations under the Subsidiary Guarantee or release the Company or any
    Subsidiary from its obligations under its respective Pledge Agreement, in
    each case, without the written consent of the Release Banks, except as
    otherwise provided; and

         (b)  no such waiver and no such amendment, supplement or modification
    shall (x) extend the scheduled maturity of any Loan (other than a Bid Loan)
    or extend the expiry date of any Letter of Credit beyond the Revolving
    Credit Termination Date, or reduce the rate or extend the time of payment
    of interest thereon, or change the method of calculating interest thereon,
    or reduce or extend the time of payments of any fee payable to the Banks
    hereunder, or reduce the principal amount thereof, or increase the amount
    of any Bank's Commitments, without the written consent of each Bank
    affected thereby, or (y) amend, modify or waive any provision of this
    subsection 10.1 or reduce the percentages specified in the definition of
    Required Banks or Release Banks, or change the percentage of the Banks
    required to waive a condition precedent under Section 5 or consent to the
    assignment or transfer by any Credit Party of any of its rights and 

<PAGE>

                                                                             74


    obligations under any Credit Document, in each case, without the written
    consent of each Bank, PROVIDED that with respect to any Bid Loan, no such
    waiver and no such amendment, supplement or modification shall be made
    without the written consent of each Bank holding such Bid Loan.

Any such waiver and any such amendment, supplement or modification described in
this subsection 10.1 shall apply equally to each of the Banks and shall be
binding upon each Credit Party, the Banks, the Co-Agents, the Administrative
Agent.  No waiver, amendment, supplement or modification of any Letter of Credit
shall extend the expiry date thereof without the written consent of the
Participating Banks.  In the case of any waiver, the Company, the Banks, the
Co-Agents and the Administrative Agent shall be restored to their former
position and rights hereunder and under the outstanding Notes, 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.

         10.2 NOTICES.  All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex), and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand, or three Business
Days after being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when sent, confirmation of receipt received, or, in the case of
telex notice, when sent, answerback received, addressed as follows in the case
of each Credit Party and the Administrative Agent, and as set forth in Schedule
I in the case of any Bank, or to such other address as may be hereafter notified
by the respective parties hereto:

         The Company:        General Semiconductor, Inc.
                             10 Melville Park Road
                             Melville, NY  11747
                             Attention:  Treasurer and General Counsel
                             Telecopy:  (516) 847-3152

         With a copy to:     Fried, Frank, Harris,
                               Shriver & Jacobson
                             One New York Plaza
                             New York, New York  10004
                             Attention:  F. William Reindel, Esq.
                             Telecopy:  (212) 859-8587

         The Administrative
           Agent:            The Chase Manhattan Bank
                             c/o Chase Securities Inc.
                             10 South LaSalle Street
                             Suite 2300
                             Chicago, Illinois 60603
                             Attention:  Leonard Essex
                             Telecopy:  (312) 807-4077

         The Co-Agents:      The Chase Manhattan Bank
                             c/o Chase Securities Inc.

<PAGE>

                                                                             75


                             10 South LaSalle Street
                             Suite 2300
                             Chicago, Illinois 60603
                             Attention:  Leonard Essex
                             Telecopy:  (312) 807-4077

                             Bank of America National Trust 
                             and Savings Association
                             555 California Street
                             41st Floor
                             San Francisco, California 94104
                             Attention:  Douglas C. Watson
                             Telecopy:  (415) 622-2514
                             
                             Bank of Montreal
                             430 Park Avenue
                             Suite 1400
                             New York, New York 10022
                             Attention:  Thomas J. Moore
                             Telecopy:  (212) 605-1454
                             
                             The Bank of Nova Scotia
                             One Liberty Plaza
                             26th Floor
                             New York, New York 10006
                             Attention:  Daniel Foote
                             Telecopy:  (212) 225-5090
                             
                             CIBC Inc.
                             425 Lexington Avenue
                             New York, New York 10017
                             Attention:  Cyd Petre
                             Telecopy:  (212) 856-3991
                             
                             Credit Lyonnais New York Branch
                             1301 Avenue of the Americas
                             New York, New York 10019
                             Attention:  Nicolas Chapin
                             Telecopy:  (212) 459-3179
                             
                             Fleet National Bank
                             75 State Street
                             MA BO F04M
                             Boston, Massachusetts 02109
                             Attention:  Frank Benesh
                             Telecopy:  (617) 346-0568
                             
                             Wachovia Bank, N.A.


<PAGE>

                                                                             76


                             191 Peachtree Street, MC 370
                             Atlanta, Georgia 30303
                             Attention:  Jane C. Deaver
                             Telecopy:  (404) 332-6898

PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Banks pursuant to subsections 2.3, 2.8, 2.10, 3.1, 3.2, 3.3 and 3.4 shall
not be effective until received and PROVIDED FURTHER that the failure to provide
the copies of notices to the Company provided for in this subsection 10.2 shall
not result in any liability to the Administrative Agent, any Co-Agent or any
Bank.

         10.3 NO WAIVER; CUMULATIVE REMEDIES.  No failure to exercise and no
delay in exercising, on the part of the Administrative Agent, any Co-Agent or
any Bank, 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.

         10.4 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 Agreement and the Letters of Credit.

         10.5 PAYMENT OF EXPENSES AND TAXES.  The Company agrees:

         (a) to pay or reimburse the Administrative Agent for all of its
    out-of-pocket costs and expenses incurred in connection with the
    development, preparation and execution of, and any amendment, supplement or
    modification to, the Credit Documents and any other documents prepared in
    connection herewith, and the consummation of the transactions contemplated
    hereby and thereby, including, without limitation, the reasonable fees and
    disbursements of counsel to the Administrative Agent;

         (b) to pay or reimburse each Bank, each Co-Agent and the
    Administrative Agent for all their costs and expenses incurred in
    connection with, and to pay, indemnify, and hold the Administrative Agent,
    each Co-Agent and each Bank 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
    arising out of or in connection with, the enforcement or preservation of
    any rights under any Credit Document and any such other documents,
    including, without limitation, reasonable fees and disbursements of counsel
    to the Administrative Agent, each Co-Agent and each Bank incurred in
    connection with the foregoing and in connection with advising the
    Administrative Agent with respect to its rights and responsibilities under
    this Agreement and the documentation relating thereto;

         (c) to pay, indemnify, and to hold the Administrative Agent, each
    Co-Agent and each Bank 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 

<PAGE>

                                                                             77

taxes (other than withholding taxes), if any, which may be payable or determined
to be payable in connection with the execution and delivery of, or consummation
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, any Credit
Document and any such other documents; and

         (d) to pay, indemnify, and hold the Administrative Agent, each
    Co-Agent and each Bank and their respective officers, directors, employees
    and agents harmless from and against any and all other liabilities,
    obligations, losses, damages (including punitive damages), penalties,
    fines, actions, judgments, suits, costs, expenses or disbursements of any
    kind or nature whatsoever (including, without limitation, reasonable
    experts' and consultants' fees and reasonable fees and disbursements of
    counsel and third party claims for personal injury or real or personal
    property damage) which may be incurred by or asserted against the
    Administrative Agent, any Co-Agent or the Banks (x) arising out of or in
    connection with any investigation, litigation or proceeding related to this
    Agreement, the other Credit Documents, the proceeds of the Loans, or any of
    the other transactions contemplated hereby, whether or not the
    Administrative Agent, any Co-Agent or any of the Banks is a party thereto,
    (y) with respect to any environmental matters, any actual or alleged
    environmental compliance expenses and any actual or alleged remediation
    expenses in connection with the presence, suspected presence, release or
    suspected release of any Hazardous Materials in or into the air, soil,
    groundwater, surface water or improvements at, on, about, under, or within
    the any parcel of real property currently or previously owned or operated
    by the Company or any Subsidiary, or any portion thereof, or elsewhere in
    connection with the transportation of Hazardous Materials to or from any
    parcel of real property currently or previously owned or operated by the
    Company or any Subsidiary or (z) without limiting the generality of the
    foregoing, by reason of or in connection with the execution and delivery or
    transfer of, or payment or failure to make payments under, Letters of
    Credit (it being agreed that nothing in this subsection 10.5(d)(z) is
    intended to limit the Company's obligations pursuant to subsection 2.6);

(all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED that
the Company shall have no obligation hereunder with respect to indemnified
liabilities of the Administrative Agent, any Co-Agent or any Bank or any of
their respective officers, directors, employees or agents arising from (i) the
gross negligence or willful misconduct of such Administrative Agent, Co-Agent or
Bank or their respective directors, officers, employees or agents or (ii) legal
proceedings commenced against the Administrative Agent, any Co-Agent or any Bank
by any security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such or
(iii) legal proceedings commenced against the Administrative Agent, any Co-Agent
or any such Bank by any Transferee (as defined in subsection 10.6).  The
agreements in this subsection 10.5 shall survive repayment of the Loans and all
other amounts payable hereunder.

         10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING BANKS. (a) 
This Agreement shall be binding upon and inure to the benefit of the Company,
the Banks, the Co-Agents and the Administrative Agent, and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Bank.

<PAGE>

                                                                             78

         (b) Any Bank may, in the ordinary course of its commercial banking or
lending 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 Bank, any participating interest of such Bank in the Letters
of Credit, any Commitment of such Bank or any other interest of such Bank
hereunder and under the other Credit Documents, PROVIDED, HOWEVER, that no Bank
shall sell any such participating interest to any Participant which is a
Non-U.S. Bank that is unable to deliver to such Bank either an Internal Revenue
Service Form 4224 or Form 1001 pursuant to clause (A) of subsection 3.17(e)
hereof.  In the event of any such sale by a Bank of participating interests to a
Participant, such Bank's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof for all purposes under this Agreement
and the other Credit Documents and the Company and the Administrative Agent
shall continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement and the other Credit
Documents.  The Company agrees that if amounts outstanding under this Agreement
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement;
PROVIDED that such Participant shall only be entitled to such right of setoff if
it shall have agreed in the agreement pursuant to which it shall have acquired
its participating interest to share with the Banks the proceeds thereof, as
provided in subsection 10.7.  The Company also agrees that each Participant
shall be entitled to the benefits of subsections 3.11, 3.18, 3.19 and 3.20 with
respect to its participation in the Letters of Credit and in the 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 Bank would have been entitled to receive in respect of the amount of
the participation transferred by such transferor Bank to such Participant had no
such transfer occurred.

         (c) Any Bank may, in the ordinary course of its commercial banking or
lending business and in accordance with applicable law, at any time sell to any
Bank or any Affiliate thereof (including any Affiliate or Subsidiary of such
transferor Bank) and, with the consent of the Company and the Administrative
Agent, the Issuing Bank, if applicable, and the Swing Line Bank, if applicable
(which in each case shall not be unreasonably withheld), sell to one or more
additional banks or financial institutions (an "ASSIGNEE"), all or any part of
its rights and obligations under this Agreement and the other Credit Documents
and with respect to the Letters of Credit, pursuant to an Assignment and
Acceptance executed by such Assignee, such assigning Bank (and, in the case of
an Assignee that is not then a Bank or an affiliate thereof, by the Company and
the Administrative Agent), and delivered to the Administrative Agent for its
acceptance and recording in the Register (as defined below); PROVIDED that (A)
each such sale pursuant to this subsection 10.6(c) (I) to a Person which is not
then a Bank or an Affiliate of a Bank shall be of Commitments and/or Loans of
$10,000,000 (or if such assigning Bank has Commitments and Loans in an amount
less than $10,000,000 in the aggregate, such lesser amount) or more and (II) to
a Person which is then a Bank or an Affiliate of a Bank may be in any amount,
(B) in the event of a sale of less than all of such rights and obligations, 
such Bank after such sale shall retain Commitments and/or Loans (without
duplication) aggregating $10,000,000; and PROVIDED FURTHER that the foregoing
shall not prohibit a Bank from selling participating interests in accordance
with subsection 10.6(b) in all or any portion of its 

<PAGE>

                                                                             79


Commitments and/or Loans (without duplication) and (C) each Assignee which is a
Non-U.S. Bank shall comply with the provisions of clause (A) of subsection
3.17(e) hereof, or, with the prior written consent of the Company which may be
withheld in its sole discretion, with or without cause, the provisions of clause
(B) of subsection 3.17(e) hereof (and, in either case, with all of the other
provisions of subsection 3.17(e) hereof), and PROVIDED, FURTHER, that no Bank
shall assign any Bid Loans pursuant to this subsection 10.6(c) except in
connection with the assignment of all of its Loans and Commitments under this
Agreement.  If at any time any Co-Agent shall own less than 5% of the
Commitments and/or the Loans (without duplication), then such Co-Agent shall, at
the Company's request after consultation with the Administrative Agent, no
longer be entitled to the benefits of the title "Co-Agent" under this Agreement
and shall promptly resign as a Co-Agent; PROVIDED that nothing contained in this
sentence shall be construed or interpreted as impairing any right of a resigning
Co-Agent in its capacity as a Bank under this Agreement; and PROVIDED FURTHER
that the foregoing shall not prohibit a Co-Agent from selling participating
interests in accordance with subsection 10.6(b) in all or any portion of its
Commitments and/or Loans.   Upon such execution, delivery, acceptance and
recording, from and after the effective date determined pursuant to such
Assignment and Acceptance, (x) the Assignee thereunder shall be a party hereto
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Bank hereunder with the Commitments as set forth therein,
and (y) the assigning Bank thereunder shall, to the extent of the interest
transferred, as reflected in such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Bank's rights
and obligations under this Agreement, such assigning Bank shall cease to be a
party hereto).  Such Assignment and Acceptance shall be deemed to amend this
Agreement and Schedule I hereto to the extent, and only to the extent, necessary
to reflect the addition of such Assignee and the resulting adjustment of
Commitment Percentages arising from the purchase by such Assignee of all or a
portion of the rights and obligations of such assigning Bank under this
Agreement.  

         (d) The Administrative Agent acting on behalf of and as agent for the
Company, shall maintain at its address referred to in subsection 10.2 a copy of
each Assignment and Acceptance delivered to it and a register (the "REGISTER")
for the recordation of the names and addresses of the Banks and the registered
owners of the Obligations evidenced by the Registered Form Notes and the
Commitments of, the principal amount of any Loans owing to, and, if such Bank
has any Revolving Credit Commitment, the L/C Participating Interests of, each
Bank from time to time.  The entries in the Register shall be conclusive, in the
absence of manifest error, and the Company, the Administrative Agent and the
Banks shall treat each Person whose name is recorded in the Register as the
owner of the Loans, Registered Form Notes or L/C Participating Interests
recorded therein for all purposes of this Agreement. Any assignment of a Loan,
Registered Form Notes or other obligation hereunder shall be effective only upon
appropriate entries with respect thereto being made in the Register.  Any
assignment or transfer of an obligation hereunder evidenced by a promissory note
shall be registered in the Register only upon the surrender of such note for
registration of such assignment or transfer, and thereupon one or more new notes
shall be issued to the Assignee and the old note shall be returned by the
Administrative Agent to the Company, marked "cancelled".  The Register shall be
available for inspection by the Company or any Bank at any reasonable time and
from time to time upon reasonable prior notice.

         (e) Upon its receipt of an Assignment and Acceptance executed by an
assigning 

<PAGE>

                                                                             80


Bank and an Assignee (and, in the case of an Assignee that is not then a Bank or
an Affiliate thereof, by the Company and the Administrative Agent), together
with payment to the Administrative Agent of a registration and processing fee of
$4,000 if the Assignee is not a Bank or an Affiliate thereof prior to the
execution of such Assignment and Acceptance and $1,000 otherwise, the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto, record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Banks and the Company.

         (f) The Company authorizes each Bank to disclose to any Participant or
Assignee (each, a "TRANSFEREE") and any prospective Transferee any and all
financial information in such Bank's possession concerning the Company and its
Subsidiaries and Affiliates which has been delivered to such Bank by or on
behalf of the Company pursuant to this Agreement or which has been delivered to
such Bank by or on behalf of the Company in connection with such Bank's credit
evaluation of the Company and its Subsidiaries and Affiliates prior to becoming
a party to this Agreement.

         (g) If, pursuant to this subsection 10.6, any interest in this
Agreement is transferred to any Transferee which would be a Non-U.S. Bank upon
the effectiveness of such transfer, the assigning Bank shall cause such
Transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the assigning Bank (for the benefit of the assigning Bank, the
Administrative Agent and the Company) that under applicable law and treaties no
United States federal income taxes or United States backup withholding taxes
will be required to be withheld by the Administrative Agent, the Company or the
assigning Bank with respect to any payments to be made to such Transferee in
respect of the Loans or L/C Participating Interests, (ii) to furnish to the
assigning Bank (and, in the case of any Assignee registered in the Register, the
Administrative Agent and the Company) such Internal Revenue Service Forms
required to be furnished pursuant to subsection 3.17(e) and (iii) to agree (for
the benefit of the assigning Bank, the Administrative Agent and the Company) to
be bound by the provisions of subsections 3.17(e).

         (h) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Bank of any Loan to any Federal Reserve Bank in
accordance with applicable law; provided that any transfer of Loans upon, or in
lieu of, enforcement of or the exercise of remedies under any such pledge shall
be treated as an assignment thereof which shall not be made without compliance
with the requirements of this subsection 10.6.

         10.7 ADJUSTMENTS; SET-OFF. (a)  If any Bank (a "BENEFITTED BANK")
shall at any time receive any payment of all or part of any of its Revolving
Credit Loans (other than payment of Swing Line Loans or Bid Loans) or L/C
Participating Interests, as the case may be, 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 (f) of
Section 8, or otherwise) in a greater proportion than any such payment to and
collateral received by any other Bank, if any, in respect of such other Bank's
Revolving Credit Loans or L/C Participating Interests, as the case may be, or
interest thereon, such benefitted Bank shall purchase for cash 


<PAGE>

                                                                             81


from the other Banks such portion of each such other Bank's Revolving Credit
Loans or L/C Participating Interests, as the case may be, or shall provide such
other Banks with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefitted Bank to share the excess payment
or benefits of such collateral or proceeds ratably in accordance with their
Commitment Percentages with each of the Banks; PROVIDED, HOWEVER, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
benefitted Bank, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.  The
Company agrees that each Bank so purchasing a portion of another Bank's Loans
and/or L/C Participating Interests may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Bank were the direct holder of such portion.  The
Administrative Agent shall promptly give the Company notice of any set-off,
PROVIDED that the failure to give such notice shall not affect the validity of
such set-off.

         (b) Upon the occurrence of an Event of Default specified in subsection
8(a) or 8(f), the Administrative Agent, each Bank and each Co-Agent are hereby
irrevocably authorized at any time and from time to time without notice to the
Company, any such notice being hereby waived by the Company, to set off 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 the
Administrative Agent, such Bank or such Co-Agent or any Affiliate thereof to or
for the credit or the account of the Company, or any part thereof in such
amounts as the Administrative Agent, such Bank or such Co-Agent may elect, on
account of the liabilities of the Company hereunder and under the other Credit
Documents and claims of every nature and description of the Administrative
Agent, such Bank or such Co-Agent against the Company, in any currency, whether
arising hereunder, under any other Credit Document, as the Administrative Agent,
such Bank or such Co-Agent may elect, whether or not the Administrative Agent,
such Bank or such Co-Agent has made any demand for payment and although such
liabilities and claims may be contingent or unmatured.  The Administrative
Agent, each Bank and each Co-Agent shall notify the Company promptly of any such
setoff made by it and the application made by it of the proceeds thereof,
PROVIDED that the failure to give such notice shall not affect the validity of
such setoff and application.  The rights of the Administrative Agent, each Bank
and each Co-Agent under this paragraph are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which the
Administrative Agent, such Bank or such Co-Agent may have.

         10.8 JUDGMENT.  (a)  If for the purpose of obtaining judgment in any
court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency on the Business Day
preceding the day on which final judgment is given.

         (b)  The obligation of the Company in respect of any sum due to any
Bank or the Administrative Agent hereunder shall, notwithstanding any judgment
in a currency (the "JUDGMENT CURRENCY") other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement or
the other Credit Documents (the "AGREEMENT CURRENCY"), be discharged only to the
extent that on the Business Day following receipt by such 

<PAGE>

                                                                             82


Bank or the Administrative Agent (as the case may be) of any sum adjudged to be
so due in the Judgment Currency such Bank or the Administrative Agent (as the
case may be) may in accordance with normal banking procedures purchase the
Agreement Currency with the Judgment Currency; if the amount of the Agreement
Currency so purchased is less than the sum originally due to such Bank or the
Administrative Agent (as the case may be) in the Agreement Currency, the Company
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify such Bank or the Administrative Agent (as the case may be) against
such loss, and if the amount of the Agreement Currency so purchased exceeds the
sum originally due to any Bank or the Administrative Agent (as the case may be),
such Bank or the Administrative Agent (as the case may be) agrees to remit to
the Company such excess.

         10.9 COUNTERPARTS.  This Agreement may be executed by one or more of
the parties to this 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 Agreement signed by all the parties
shall be lodged with the Company and the Administrative Agent.  This Agreement
shall become effective with respect to the Company, the Co-Agents, the
Administrative Agent and the Banks when the Administrative Agent shall have
received copies of this Agreement executed by the Company, the Co-Agents and the
Banks, or, in the case of any Bank, shall have received telephonic confirmation
from such Bank stating that such Bank has executed counterparts of this
Agreement or the signature pages hereto and sent the same to the Administrative
Agent and the other conditions set forth in subsection 5.1 shall have been
satisfied or waived in accordance with the terms thereof.

         10.10 INTEGRATION.  This Agreement and the other Credit Documents
represent the entire agreement of the Credit Parties, the Administrative Agent,
the Co-Agents and the Banks with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent, any Co-Agent or any Bank relative to the subject
matter hereof or thereof not expressly set forth or referred to herein or in the
other Credit Documents.

         10.11 GOVERNING LAW; NO THIRD PARTY RIGHTS.  THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.  THIS AGREEMENT IS SOLELY FOR THE BENEFIT OF THE PARTIES HERETO AND THEIR
RESPECTIVE SUCCESSORS AND ASSIGNS, AND, EXCEPT AS SET FORTH IN SUBSECTION 10.6,
NO OTHER PERSONS SHALL HAVE ANY RIGHT, BENEFIT, PRIORITY OR INTEREST UNDER, OR
BECAUSE OF THE EXISTENCE OF, THIS AGREEMENT.

         10.12 SUBMISSION TO JURISDICTION; WAIVERS. (a)  EACH PARTY TO THIS
AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY:

              (i)  SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION 
     OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR ANY OF THE OTHER 
     CREDIT DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY 
     JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL 


<PAGE>

                                                                             83


     JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF 
     THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, 
     AND APPELLATE COURTS FROM ANY THEREOF;

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

             (iii)  AGREES THAT SERVICE OF PROCESS IN ANY SUCH 
     ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY 
     REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF 
     MAIL), POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH IN 
     SUBSECTION 10.2 OR AT SUCH OTHER ADDRESS OF WHICH THE 
     ADMINISTRATIVE AGENT SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND

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

            (b) EACH PARTY HERETO UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (A) ABOVE.

            10.13 ACKNOWLEDGEMENTS.  The Company hereby acknowledges that:

            (a) none of the Administrative Agent, any Co-Agent or any Bank has
    any fiduciary relationship to any Credit Party, and the relationship
    between the Administrative Agent, the Co-Agents and the Banks, on the one
    hand, and the Credit Parties, on the other hand, is solely that of creditor
    and debtor; and

            (b) no joint venture exists among the Banks or among any Credit
    Parties and the Banks.

<PAGE>




            IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.

                                GENERAL SEMICONDUCTOR, INC.



                                       By: /s/ ANDREW M. CAGGIA
                                       -----------------------------
                                       Title: Senior Vice President,
                                              Chief Financial Officer

                                       THE CHASE MANHATTAN BANK, as
                                        Administrative Agent, as a 
                                        Co-Agent and as a Bank



                                       By: /s/ Laurie B. Perper
                                       ------------------------------
                                       Title: Vice President


<PAGE>



                              BANK OF AMERICA NATIONAL TRUST AND
                              SAVINGS ASSOCIATION, as a Co-Agent and
                              as a Bank
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              BANK OF MONTREAL, as a Co-Agent and as a
                              Bank
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              THE BANK OF NOVA SCOTIA, as a Co-Agent
                              and as a Bank
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              CIBC INC., as a Co-Agent and as a Bank
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              CREDIT LYONNAIS NEW YORK BRANCH, as a 
                              Co-Agent and as a Bank
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              

<PAGE>

                              FLEET NATIONAL BANK, as a Co-Agent and
                              as a Bank
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              WACHOVIA BANK, N.A., as a Co-Agent and
                              as a Bank
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              THE BANK OF NEW YORK
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              BANK OF TOKYO-MITSUBISHI TRUST COMPANY
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              BANKBOSTON, N.A.
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              BANQUE NATIONALE DE PARIS
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              <PAGE>

                              BANQUE PARIBAS
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              CAISSE NATIONALE DE CREDIT AGRICOLE
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              THE SANWA BANK, LIMITED, CHICAGO BRANCH
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              SOCIETE GENERALE, NEW YORK BRANCH
                              
                              
                              By: /s/
                                  -------------------------
                                  Title:
                              
                              
                              THE SUMITOMO BANK, LTD., CHICAGO BRANCH
                              
                              
                              By: /s/
                                  -------------------------
                                  Title: