================================================================================
                                                                  Execution Copy
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                                                                 EXHIBIT 10.23


LC992590047

                       AMENDED AND RESTATED LOAN AGREEMENT

                         dated as of September 30, 1999

                                      among

                                DAY RUNNER, INC.

                                DAY RUNNER UK plc

                                       and

                                 FILOFAX LIMITED

                                  as Borrowers

                            THE LENDERS HEREIN NAMED

                                   as Lenders

                                       and

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,

                             as Administrative Agent



<PAGE>







LC992590047                                              vi
<TABLE>
<CAPTION>

                                      TABLE OF CONTENTS

                                                                                                                Page

ARTICLE 1  DEFINITIONS AND ACCOUNTING TERMS.......................................................................2

                   <S>                                                                                           <C>
                  1.1. Defined Terms..............................................................................2
                  1.2. Use of Defined Terms......................................................................29
                  1.3. Accounting Terms..........................................................................29
                  1.4. Rounding..................................................................................29
                  1.5. Exhibits and Schedules....................................................................29
                  1.6. Miscellaneous Terms.......................................................................29

ARTICLE 2 LOANS AND LETTERS OF CREDIT............................................................................30

                  2.1. Loans.....................................................................................30
                  2.2. Conversion/Continuation of Loans..........................................................31
                  2.3. Foreign Currency Loans....................................................................32
                  2.4. Type of Loans.............................................................................33
                  2.5. Funding of Loans..........................................................................33
                  2.6. Notes.....................................................................................34
                  2.7. Letters of Credit.........................................................................35
                  2.8. Voluntary Reduction of Revolving Commitment...............................................38
                  2.9. Swing Line Loans..........................................................................39
                  2.10. Guaranty.................................................................................40
                  2.11. Extension of Revolving Loan Maturity Date................................................40

ARTICLE 3 PAYMENTS AND FEES......................................................................................41

                  3.1. Interest..................................................................................41
                  3.2. Principal.................................................................................42
                  3.3. Commitment Fee............................................................................44
                  3.4. Amendment Fee and Administrative Agent's Fee..............................................44
                  3.5. Letter of Credit Fees.....................................................................44
                  3.6. Increased Commitment Costs................................................................45
                  3.7. Eurodollar Costs and Related Matters......................................................46
                  3.8. Foreign Currency Costs and Related Matters................................................49
                  3.9. Intentionally Omitted.....................................................................51
                  3.10. Computation of Interest and Fees.........................................................51
                  3.11. Non-Banking Days.........................................................................52
                  3.12. Manner and Treatment of Payments.........................................................52
                  3.13. Funding Sources..........................................................................53
                  3.14. Failure to Charge Not Subsequent Waiver..................................................53
                  3.15. Administrative Agent's Right to Assume Payments Will be Made.............................53
                  3.16. Fee Determination Detail.................................................................54
                  3.17. Survivability............................................................................54
                  3.18. Application of Payments..................................................................54

ARTICLE 4 REPRESENTATIONS AND WARRANTIES.........................................................................55

                  4.1. Existence and Qualification; Power; Compliance With Laws..................................55
                  4.2. Authority; Compliance With Other Agreements and Instruments
                           and Government Regulations............................................................56
                  4.3. No Governmental Approvals Required........................................................56
                  4.4. Subsidiaries..............................................................................56
                  4.5. Financial Statements......................................................................57
                  4.6. No Other Liabilities; No Material Adverse Changes.........................................57
                  4.7. Title to Property.........................................................................58
                  4.8. Intangible Assets.........................................................................58
                  4.9. Public Utility Holding Company Act........................................................58
                  4.10. Litigation...............................................................................58
                  4.11. Binding Obligations......................................................................58
                  4.12. No Default...............................................................................58
                  4.13. ERISA....................................................................................58
                  4.14. Regulations U and X; Investment Company Act..............................................59
                  4.15. Disclosure...............................................................................59
                  4.16. Tax Liability............................................................................59
                  4.17. Projections..............................................................................60
                  4.18. Environmental Matters....................................................................60
                  4.19. Solvency.................................................................................60
                  4.20. Year 2000 Matters........................................................................60

ARTICLE 5 AFFIRMATIVE COVENANTS (OTHER THAN INFORMATION AND REPORTING REQUIREMENTS)..............................61

                  5.1. Payment of Taxes and Other Potential Liens................................................61
                  5.2. Preservation of Existence.................................................................61
                  5.3. Maintenance of Properties.................................................................61
                  5.4. Maintenance of Insurance..................................................................62
                  5.5. Compliance With Laws......................................................................62
                  5.6. Inspection Rights.........................................................................62
                  5.7. Keeping of Records and Books of Account...................................................62
                  5.8. Compliance With Agreements................................................................62
                  5.9. Use of Proceeds...........................................................................62
                  5.10. Hazardous Materials Laws.................................................................62
                  5.11. Additional Material Subsidiaries.........................................................63
                  5.12. Intentionally Omitted....................................................................63
                  5.13. Further Assurances.......................................................................63
                  5.14. Deposit Accounts and Cash Concentration..................................................64

ARTICLE 6 NEGATIVE COVENANTS.....................................................................................65

                  6.1. Payment of Subordinated Obligations.......................................................65
                  6.2. Disposition of Property...................................................................65
                  6.3. Mergers...................................................................................66
                  6.4. Intentionally Omitted.....................................................................66
                  6.5. Intentionally Omitted.....................................................................66
                  6.6. Distributions.............................................................................66
                  6.7. ERISA.....................................................................................66
                  6.8. Change in Nature of Business..............................................................66
                  6.9. Liens.....................................................................................66
                  6.10. Indebtedness and Guaranty Obligations....................................................67
                  6.11. Transactions with Affiliates.............................................................68
                  6.12. Funded Senior Debt Ratio.................................................................68
                  6.13. Fixed Charge Coverage Ratio..............................................................68
                  6.14. Stockholders' Equity.....................................................................68
                  6.15. Investments..............................................................................69
                  6.16. Capital Expenditures.....................................................................70
                  6.17. Payment Restrictions Affecting Subsidiaries..............................................70
                  6.18. Lease Obligations........................................................................70
                  6.19. Minimum EBITDA...........................................................................71
                  6.20. Current Ratio............................................................................71
                  6.21. Operating Expenses.......................................................................71

ARTICLE 7 INFORMATION AND REPORTING REQUIREMENTS.................................................................72

                  7.1. Financial and Business Information........................................................72
                  7.2. Compliance Certificates...................................................................75

ARTICLE 8 CONDITIONS 76

                  8.1. Effective Date............................................................................76
                  8.2. Revolving Loans...........................................................................79

ARTICLE 9 EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT...................................................79

                  9.1. Events of Default.........................................................................79
                  9.2. Remedies Upon Event of Default............................................................81

ARTICLE 10 THE ADMINISTRATIVE AGENT..............................................................................82

                  10.1. Appointment and Authorization............................................................82
                  10.2. Administrative Agent and Affiliates......................................................83
                  10.3. Lenders' Credit Decisions................................................................83
                  10.4. Action by Administrative Agent...........................................................83
                  10.5. Liability of Administrative Agent........................................................84
                  10.6. Indemnification..........................................................................85
                  10.7. Successor Administrative Agent...........................................................86
                  10.8. No Obligations of Borrowers..............................................................86

ARTICLE 11 MISCELLANEOUS.........................................................................................87

                  11.1. Cumulative Remedies; No Waiver...........................................................87
                  11.2. Amendments; Consents.....................................................................87
                  11.3. Costs, Expenses and Taxes................................................................88
                  11.4. Nature of Lenders' Obligations...........................................................89
                  11.5. Survival of Representations and Warranties...............................................89
                  11.6. Notices..................................................................................89
                  11.7. Execution of Loan Documents..............................................................89
                  11.8. Binding Effect; Assignment...............................................................90
                  11.9. Right of Setoff..........................................................................92
                  11.10. Sharing of Setoffs......................................................................92
                  11.11. Indemnity by Borrowers..................................................................93
                  11.12. Nonliability of the Lenders.............................................................94
                  11.13. No Third Parties Benefited..............................................................95
                  11.14. Confidentiality.........................................................................95
                  11.15. Further Assurances......................................................................95
                  11.16. Integration.............................................................................96
                  11.17. Governing Law...........................................................................96
                  11.18. Severability of Provisions..............................................................96
                  11.19. Headings................................................................................96
                  11.20. Time of the Essence.....................................................................96
                  11.21. Foreign Lenders and Participants........................................................96
                  11.22. Joint and Several Liability.............................................................97
                  11.23. Removal of a Lender.....................................................................98
                  11.24. Waiver of Right to Trial by Jury........................................................98
                  11.25. Purported Oral Amendments...............................................................99
                  11.26. Acknowledgment of Lenders...............................................................99



<PAGE>
</TABLE>






                                           EXHIBITS

Exhibit Number               Exhibit Name

Exhibit A                    Form of Borrower Guaranty

Exhibit B                    Form of Assignment and Acceptance

Exhibit C                    Form of Compliance Certificate

Exhibit D-1                  Form of Revolving Loan Note

Exhibit D-2                  Form of Term Loan Note

Exhibit E                    Form of Pricing Certificate

Exhibit F                    Form of Request for Letter of Credit

Exhibit G                    Form of Subsidiary Guaranty

Exhibit H                    Notice of Borrowing

Exhibit I                    Notice of Swing Line Loan

Exhibit J                    Form of Pledge Agreement

Exhibit K                    Form of Mortgage of Shares

Exhibit L                    Form of Security Agreement

Exhibit M                    Form of Security Document

Exhibit N                    Form of Borrower Guaranty of Revolving Loans

Exhibit O                    Form of Borrower Guaranty of Term Loans

Exhibit P                    Form of Subsidiary Guaranty of Revolving Loans

Exhibit Q                    Form of Subsidiary Guaranty of Term Loans

Exhibit R                    Form of Subordinated Promissory Note



<PAGE>






                                          SCHEDULES

Schedule Number              Schedule Name

Schedule 1.1                 Lender Pro Rata Shares

Schedule 1.2                 Subsidiary Overdraft Indebtedness

Schedule 2.1                 Term Loans on Effective Date

Schedule 4.1                 Borrowers

Schedule 4.4                 Subsidiaries

Schedule 4.6                 Funded Debt

Schedule 4.7                 Liens

Schedule 5.14(a)             Foreign Subsidiary Deposit Accounts

Schedule 5.14(b)             Foreign Subsidiary Deposit Account Balances

Schedule 6.10                Existing Indebtedness

Schedule 6.15                Existing Investments





<PAGE>







LC992590047

                              AMENDED AND RESTATED
                                 LOAN AGREEMENT

                         Dated as of September 30, 1999

         This AMENDED AND RESTATED LOAN AGREEMENT dated as of September 30, 1999
is entered  into by and among Day Runner,  Inc.,  a Delaware  corporation  ("Day
Runner"), Day Runner UK plc, a company incorporated with limited liability under
the laws of England  and Wales and a  wholly-owned  indirect  subsidiary  of Day
Runner ("Bidco"), Filofax Limited, a company incorporated with limited liability
under the laws of England and Wales and a  wholly-owned  indirect  subsidiary of
Bidco  ("Filofax";  Day  Runner,  Bidco and  Filofax  being  referred  to herein
collectively as the "Borrowers", and individually as a "Borrower"),  each lender
whose name is set forth on the signature pages of this Agreement and each lender
which may hereafter  become a party to this  Agreement  pursuant to Section 11.8
(collectively,  the "Lenders," and  individually,  a "Lender"),  and Wells Fargo
Bank, National Association, as Administrative Agent and Issuing Lender.

         WHEREAS,  certain of the Borrowers,  Day Runner Canada Inc., an Ontario
corporation  formerly  known as  Ultima  Distribution  Inc.  and a  wholly-owned
subsidiary  of Day Runner  ("DRC"),  the Lenders and Wells Fargo Bank,  National
Association,  as  Administrative  Agent and Issuing  Lender,  entered  into that
certain  Revolving Loan Agreement  dated as of September 23, 1998 (the "Existing
Credit Agreement");

         WHEREAS, the Borrowers,  DRC, the Lenders, the Administrative Agent and
the Issuing Lender desire to amend and restate the Existing Credit  Agreement in
its  entirety  to give  effect  to the terms  and  provisions  set forth in this
Agreement (the Existing Credit Agreement as amended and restated by this Amended
and Restated Loan Agreement, as the same may be further amended, supplemented or
otherwise modified from time to time, this "Agreement");

         WHEREAS,  on the date  hereof,  Syndicated  Loans  (as  defined  in the
Existing  Credit  Agreement) are outstanding in the aggregate  principal  amount
equal to the Foreign Currency Equivalent of $109,688,128.48;

         WHEREAS,  pursuant to the Existing Credit  Agreement,  the Lenders made
(a) Tender Offer Loans (as defined  herein) to Bidco in an  aggregate  principal
amount equal to the Foreign  Currency  Equivalent of  $20,443,666.20  and Tender
Offer Loans to Day Runner in an aggregate  principal amount of $70,000,000,  all
of  which  are  deemed  to be  outstanding  on the  date  hereof  and (b)  other
Syndicated Loans (as defined in the Existing Credit Agreement) to the Borrowers,
in  an  aggregate   principal   amount   outstanding   on  the  date  hereof  of
$19,244,462.28;

         WHEREAS, the Borrowers have requested,  that (a) the Tender Offer Loans
made to Day Runner and Bidco under the Existing Credit Agreement be reclassified
as Term Loans under this  Agreement,  (b) the  Syndicated  Loans (other than the
Tender Offer Loans) made to the Borrowers under the Existing Credit Agreement be
continued as  Revolving  Loans under this  Agreement,  (c) the Letters of Credit
issued  under the  Existing  Credit  Agreement be continued as Letters of Credit
under this Agreement,  (d) Syndicated Loans made to DRC, as Borrower,  under the
Existing Credit Agreement (such Syndicated Loans, the "DRC Loans") be assumed by
Day Runner  and  continued  as  Revolving  Loans to Day  Runner  (and as Foreign
Currency  Loans  denominated  in  Canadian  dollars  until  no  later  than  the
expiration of the current Foreign Currency Period with respect to each such Loan
and on or before  such time  each  such  Loan will be  converted  into a Loan in
Dollars or another  permitted  denomination),  under this Agreement and that Day
Runner be deemed to make an  intercompany  loan to DRC in an amount equal to the
principal  amount of such DRC Loans  outstanding on the Effective  Date, and (e)
the Lenders, from time to time, upon the terms and subject to the conditions set
forth herein,  make  Revolving  Loans to the Revolving Loan  Borrowers,  and the
Lenders have agreed to such requests;

         WHEREAS,  DRC is signatory to this Agreement solely for the purposes of
effecting the  amendment and  restatement  of the Existing  Credit  Agreement as
contemplated by this Agreement and upon the effectiveness of the this Agreement,
DRC  shall  not be a  "Borrower"  under  this  Agreement  and shall not have any
obligations or liabilities hereunder.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto covenant and agree as follows:

                                    Article 1

                        DEFINITIONS AND ACCOUNTING TERMS

     1.1 Defined Terms.  As used in this  Agreement,  the following  terms shall
have the meanings set forth below:

         "Adjusted  Eurodollar  Rate"  applicable to any Interest Period means a
rate per annum equal to the quotient obtained (rounded upward, if necessary,  to
the next higher 1/100 of 1%) by dividing (i) the applicable  Eurodollar  Rate by
(ii) 1.00 minus the Eurodollar Reserve Percentage.

         "Administrative  Agent" means Wells Fargo Bank,  National  Association,
when acting in its  capacity as the  Administrative  Agent under any of the Loan
Documents, or any successor Administrative Agent.

         "Administrative  Agent's Fee" means the annual administration fee to be
paid by Day Runner to the Administrative Agent described in the fee letter dated
as of October 12, 1999 from the  Administrative  Agent to, and  acknowledged and
accepted by, Day Runner.

         "Administrative   Agent's  Office"  means  the  Administrative  Agent's
address as set forth on the  signature  pages of this  Agreement,  or such other
address as the Administrative Agent hereafter may designate by written notice to
the Borrowers and the Lenders.

         "Affiliate" means, as to any Person, any other Person which directly or
indirectly controls,  or is under common control with, or is controlled by, such
Person.  As used in this  definition,  "control"  (and  the  correlative  terms,
"controlled by" and "under common control with") shall mean possession, directly
or  indirectly,  of power to direct  or cause the  direction  of  management  or
policies  (whether  through  ownership of  securities  or  partnership  or other
ownership interests, by contract or otherwise); provided that, in any event, any
Person that owns,  directly or indirectly,  20% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation that has more than 100 record holders of such securities,  or 20% or
more of the  partnership or other  ownership  interests of any other Person that
has more than 100  record  holders  of such  interests,  will be deemed to be an
Affiliate of such corporation, partnership or other Person.

         "Aggregate  Exposure Amount" means as of any date of determination  and
with  respect to all  Letters  of Credit  then  outstanding,  the sum of (a) the
aggregate  effective face amounts of all such Letters of Credit not then paid by
the Issuing  Lender plus (b) the  aggregate  amounts paid by the Issuing  Lender
under such  Letters  of Credit  not then  reimbursed  to the  Issuing  Lender by
Borrowers.

         "Agreement"  means this Amended and Restated  Loan  Agreement as it may
from time to time be supplemented, modified, amended, restated or extended.

         "Alternate Base Rate" means, as of any date of determination,  the rate
per annum (rounded upwards, if necessary,  to the next 1/100 of 1%) equal to the
higher of (a) the Prime  Rate in  effect on such date or (b) the  Federal  Funds
Rate in effect on such date plus 1/2 of 1% (50 basis points).

         "Alternate Base Rate Loan" means a Loan made hereunder and specified to
be an Alternate Base Rate Loan in accordance with Article 2.

         "Applicable Base Rate Margin" means (a) for the Initial Pricing Period,
200 basis  points  per annum and (b) for each  Pricing  Period  thereafter,  the
interest  rate  margin set forth  below  (expressed  in basis  points per annum)
opposite the  Applicable  Pricing  Level for the Fiscal  Quarter  ending 55 days
prior to the commencement of such Pricing Period:

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

                      Applicable Pricing Level                  Margin
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               I                                    12.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               II                                   25.00
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               III                                  62.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               IV                                   87.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               V                                   112.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VI                                  137.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VII                                 162.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VIII                                200.00
                  ---------------------------------- ---------------------------

         Any change in the Applicable  Base Rate Margin based on a change in the
Applicable Pricing Level shall be effective immediately after the receipt by the
Administrative  Agent of the Pricing Certificate  relating to the Fiscal Quarter
ending 55 days prior to the  commencement of such Pricing Period;  provided that
(i) in the event that the  Borrowers do not deliver a Pricing  Certificate  with
respect to any Fiscal Quarter within the time set forth in Section 7.1(b),  then
until (but only until) such  Pricing  Certificate  is delivered  the  Applicable
Pricing Level shall be Pricing Level VIII and (ii) if any Pricing Certificate is
subsequently  determined  to be in  error,  then  any  resulting  change  in the
Applicable  Pricing  Level shall be made  retroactively  to the beginning of the
relevant Pricing Period.

         "Applicable  Commitment  Fee Rate"  means (a) for the  Initial  Pricing
Period,  67.5 basis points per annum and (b) for each Pricing Period thereafter,
the rate set forth below  (expressed  in basis  points per annum)  opposite  the
Applicable  Pricing  Level for the  Fiscal  Quarter  ending 55 days prior to the
commencement of such Pricing Period:

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

                      Applicable Pricing Level              Commitment Fee Rate
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               I                                    37.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               II                                   37.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               III                                  37.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               IV                                   37.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               V                                    50.00
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VI                                   50.00
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VII                                  50.00
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VIII                                 67.50
                  ---------------------------------- ---------------------------

         Any change in the  Applicable  Commitment Fee Rate based on a change in
the Applicable Pricing Level shall be effective immediately after the receipt by
the  Administrative  Agent of the  Pricing  Certificate  relating  to the Fiscal
Quarter  ending  55 days  prior  to the  commencement  of such  Pricing  Period;
provided  that (i) in the  event  that the  Borrowers  do not  deliver a Pricing
Certificate  with  respect  to any Fiscal  Quarter  within the time set forth in
Section  7.1(b),  then  until  (but only  until)  such  Pricing  Certificate  is
delivered the  Applicable  Pricing Level shall be Pricing Level VIII and (ii) if
any Pricing  Certificate  is  subsequently  determined to be in error,  then any
resulting change in the Applicable  Pricing Level shall be made retroactively to
the beginning of the relevant Pricing Period.

         "Applicable  Eurodollar  Rate Margin" means (a) for the Initial Pricing
Period,  300 basis points per annum and (b) for each Pricing Period  thereafter,
the interest  rate margin set forth below  (expressed in basis points per annum)
opposite the  Applicable  Pricing  Level for the Fiscal  Quarter  ending 55 days
prior to the commencement of such Pricing Period:

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

                      Applicable Pricing Level                 Margin
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               I                                   112.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               II                                  125.00
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               III                                 162.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               IV                                  187.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               V                                   212.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VI                                  237.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VII                                 262.50
                  ---------------------------------- ---------------------------
                  ---------------------------------- ---------------------------

                               VIII                                300.00
                  ---------------------------------- ---------------------------

         Any change in the Applicable  Eurodollar  Rate Margin based on a change
in the Applicable Pricing Level shall be effective immediately after the receipt
by the Administrative  Agent of the Pricing  Certificate  relating to the Fiscal
Quarter  ending  55 days  prior  to the  commencement  of such  Pricing  Period;
provided  that (i) in the  event  that the  Borrowers  do not  deliver a Pricing
Certificate  with  respect  to any Fiscal  Quarter  within the time set forth in
Section  7.1(b),  then  until  (but only  until)  such  Pricing  Certificate  is
delivered the  Applicable  Pricing Level shall be Pricing Level VIII and (ii) if
any Pricing  Certificate  is  subsequently  determined to be in error,  then any
resulting change in the Applicable  Pricing Level shall be made retroactively to
the beginning of the relevant Pricing Period.

         "Applicable  Lending Office" means,  with respect to each Lender,  such
Lender's  Domestic Lending Office in the case of an Alternate Base Rate Loan and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

         "Applicable  Pricing  Level"  means,  on any day, the pricing level set
forth  below  opposite  the  Funded  Debt Ratio as of the last day of the Fiscal
Quarter most recently ended prior to such day:
<TABLE>
<CAPTION>

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

          <S>                                                <C>
             Pricing Level                                    Funded Debt Ratio
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                I                                    Less than or equal to 2.00 to 1.00
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                II                    Greater than 2.00 to 1.00, but less than or equal to 2.50 to 1.00
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                III                   Greater than 2.50 to 1.00, but less than or equal to 3.00 to 1.00
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                IV                    Greater than 3.00 to 1.00, but less than or equal to 3.50 to 1.00
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                V                     Greater than 3.50 to 1.00, but less than or equal to 4.00 to 1.00
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                VI                    Greater than 4.00 to 1.00, but less than or equal to 4.50 to 1.00
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                VII                   Greater than 4.50 to 1.00, but less than or equal to 5.00 to 1.00
         ----------------------- ----------------------------------------------------------------------------
         ----------------------- ----------------------------------------------------------------------------

                VIII                                      Greater than 5.00 to 1.00
         ----------------------- ----------------------------------------------------------------------------
</TABLE>

provided  that (i) in the  event  that the  Borrowers  do not  deliver a Pricing
Certificate  with  respect  to any Fiscal  Quarter  within the time set forth in
Section  7.1(b),  then  until  (but only  until)  such  Pricing  Certificate  is
delivered the  Applicable  Pricing Level shall be Pricing Level VIII and (ii) if
any Pricing  Certificate  is  subsequently  determined to be in error,  then any
resulting change in the Applicable  Pricing Level shall be made retroactively to
the beginning of the relevant Fiscal Quarter.

         "Applicable Standby Letter of Credit Fee Rate" means, as of any date of
determination, the then effective Applicable Eurodollar Rate Margin.

     "Assignment   and   Acceptance"   means  an   assignment   and   acceptance
substantially in the form of Exhibit B.

         "Banking Day" means any Monday, Tuesday, Wednesday, Thursday or Friday,
other  than a day on which  banks are  authorized  or  required  to be closed in
California or New York.

         "Borrower" means each of Day Runner, Bidco and Filofax, and "Borrowers"
is a collective reference to all of them.

         "Borrower  Guaranties"  means  the  collective  reference  to (a)  each
Borrower  Guaranty,  in  substantially  the form of Exhibit A,  executed  by the
Borrowers (other than Filofax), (b) the Borrower Guaranty of Revolving Loans, in
substantially  the form of Exhibit N,  executed by Filofax and (c) the  Borrower
Guaranty  of Term Loans,  in  substantially  the form of Exhibit O,  executed by
Filofax,  in each  case  delivered  pursuant  to  Article  8, as the same may be
amended,  supplemented or otherwise modified from time to time; and each of them
is a "Borrower Guaranty".

         "Capital  Expenditure"  means any expenditure by any Borrower or any of
its Subsidiaries for or related to fixed assets or purchased intangibles that is
treated as a capital  expenditure  under  GAAP,  including  any amount  which is
required to be treated as an asset subject to a Capital Lease Obligation.

         "Capital  Lease"  means any leasing or similar  arrangement  which,  in
accordance with GAAP, is classified as a capital lease.

         "Capital Lease Obligations" means all monetary  obligations of a Person
under any Capital Lease.

         "Cash" means, when used in connection with any Person, all monetary and
non-monetary  items owned by that Person that are treated as cash in  accordance
with GAAP, consistently applied.

         "Cash Equivalents" means, when used in connection with any Person, that
Person's Investments in:

          (a)  Government  Securities  due within one year after the date of the
     making of the Investment;

          (b) readily  marketable direct  obligations of any State of the United
     States of America  or any  political  subdivision  of any such State or any
     public  agency  or  instrumentality  thereof  given  on the  date  of  such
     Investment  a credit  rating of at least Aa by Moody's  Investors  Service,
     Inc. or AA by Standard & Poor's  Rating  Group (a division of  McGraw-Hill,
     Inc.), in each case due within one year from the making of the Investment;

          (c)  certificates  of deposit issued by, bank deposits in,  eurodollar
     deposits  through,  bankers'  acceptances  of,  and  repurchase  agreements
     covering  Government   Securities  executed  by  any  Lender  or  any  bank
     incorporated  under the Laws of the  United  States of  America,  any State
     thereof  or the  District  of  Columbia  and  having  on the  date  of such
     Investment  combined  capital,  surplus and  undivided  profits of at least
     $250,000,000, or total assets of at least $5,000,000,000,  in each case due
     within one year after the date of the making of the Investment;

          (d)  certificates  of deposit issued by, bank deposits in,  eurodollar
     deposits  through,  bankers'  acceptances  of,  and  repurchase  agreements
     covering  Government  Securities  executed  by any  Lender or any branch or
     office located in the United States of America of a bank incorporated under
     the Laws of any jurisdiction outside the United States of America having on
     the date of such Investment combined capital, surplus and undivided profits
     of at least $500,000,000,  or total assets of at least $15,000,000,000,  in
     each  case  due  within  one  year  after  the  date of the  making  of the
     Investment;

          (e)  readily  marketable  commercial  paper or other  debt  securities
     issued by corporations doing business in and incorporated under the Laws of
     the United  States of America  or any State  thereof or of any  corporation
     that is the holding company for a bank described in clause (c) or (d) above
     given on the date of such  Investment  a credit  rating  of at least P-1 by
     Moody's Investors Service, Inc. or A-1 by Standard & Poor's Rating Group (a
     division of McGraw-Hill,  Inc.), in each case due within one year after the
     date of the making of the Investment;

          (f) a readily  redeemable  "money market  mutual fund"  sponsored by a
     bank  described  in  clause  (c) or  (d)  hereof,  or a  broker  or  dealer
     registered  under Section 15(b) of the Securities  Exchange Act of 1934, as
     amended,  having  on  the  date  of  the  Investment  capital  of at  least
     $50,000,000,  that has and  maintains  an  investment  policy  limiting its
     investments  primarily to instruments of the types described in clauses (a)
     through (e) hereof and given on the date of such Investment a credit rating
     of at least Aa by Moody's  Investors  Service,  Inc.  and AA by  Standard &
     Poor's Rating Group (a division of McGraw-Hill, Inc.);

          (g)  corporate  notes or bonds having an original  term to maturity of
     not more than one year issued by a corporation  incorporated under the Laws
     of the United  States of  America,  or a  participation  interest  therein;
     provided that (i) commercial  paper issued by such  corporation is given on
     the date of such  Investment  a  credit  rating  of at least Aa by  Moody's
     Investors  Service,  Inc.  and AA by  Standard  &  Poor's  Rating  Group (a
     division of  McGraw-Hill,  Inc.),  (ii) the amount of all such  Investments
     issued  by the same  issuer  does  not  exceed  $5,000,000  and  (iii)  the
     aggregate amount of all such Investments does not exceed $15,000,000; and

          (h) any security denominated in pounds sterling issued by or on behalf
     of the  government  of the  United  Kingdom  or  any  other  unsubordinated
     security, investment or instrument which is denominated in pounds sterling,
     has a  maturity  of less  than one  year,  and is given on the date of such
     Investment a credit rating of at least P-1 by Moody's  Investor's  Service,
     Inc.  or  A-1  by  Standard  &  Poor's  Ratings  Services  (a  division  of
     McGraw-Hill, Inc.).

     "Certificate" means a certificate signed by a Senior Officer or Responsible
Official (as applicable) of the Person providing the certificate.

     "Change  in  Control"  means  (a) any  transaction  or  series  of  related
transactions in which any Person or two or more Persons acting in concert (other
than a Permitted  Stockholder)  acquire beneficial ownership (within the meaning
of Rule  13d-3(a)(1)  under the  Securities  Exchange Act of 1934,  as amended),
directly or  indirectly,  of 25% or more of the  outstanding  Day Runner  Common
Stock,  (b) Day  Runner  consolidates  with or  merges  into  another  Person or
conveys,  transfers  or leases its  properties  and assets  substantially  as an
entirety  to any  Person,  or any Person  consolidates  with or merges  into Day
Runner in a  transaction  in which the  outstanding  Day Runner  Common Stock is
changed into or exchanged for cash,  securities  or other  property and with the
effect that any Person becomes the beneficial owner, directly or indirectly,  of
25% or more of Day Runner  Common Stock or that the Persons who were the holders
of Day Runner Common Stock  immediately  prior to the transaction hold less than
75% of the common stock of the surviving  corporation after the transaction,  or
(c) during any period of 24 consecutive months, individuals who at the beginning
of such period  constituted the board of directors of Day Runner  (together with
any new or replacement  directors  whose election by the board of directors,  or
whose nomination for election,  was approved by a vote of at least a majority of
the directors then still in office who were either directors at the beginning of
such period or whose  election or nomination  for  reelection  was previously so
approved) cease for any reason to constitute a majority of the directors then in
office.

     "Closing Date" means September 23, 1998.

     "Code" means the Internal  Revenue Code of 1986, as amended or replaced and
as in effect from time to time.

     "Collateral"  means all  Property  and  interests  in Property now owned or
hereafter acquired by a Borrower or any of its Subsidiaries upon which a Lien is
granted to the Administrative  Agent, for the benefit of the Lenders,  under any
of the Loan Documents.

     "Collateral  Documents"  means each of the Pledge  Agreements  and Security
Agreements.

     "Commercial Letter of Credit" means each Letter of Credit issued to support
the  purchase  of goods by a Borrower  which is  determined  to be a  commercial
letter of credit by the Issuing Lender.

     "Common Stock" means the common stock of any Borrower or its successor.

     "Companies Act" means the Companies Act 1985 of Great Britain.

     "Compliance  Certificate"  means a  certificate  in the form of  Exhibit C,
properly completed and signed by a Senior Officer of Day Runner.

     "Concentration Account" has the meaning set forth in Section 5.14.

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

     "Current  Assets" means, as of any date of  determination,  all assets that
would, in accordance with GAAP, be classified on a consolidated balance sheet of
Day  Runner  and  its  Subsidiaries  as  current  assets  as  at  such  date  of
determination.

     "Current  Liabilities"  means,  as  of  any  date  of  determination,   all
liabilities that would, in accordance with GAAP, be classified on a consolidated
balance sheet of Day Runner and its  Subsidiaries  as current  liabilities as at
such date of determination.

     "Current  Ratio" means, as of any date of  determination,  the ratio of (a)
Current Assets to (b) the sum of (i) Current Liabilities plus (ii) the aggregate
principal amount of Revolving Loans outstanding as of such date.

     "Day  Runner  Common  Stock"  means the  Common  Stock of Day Runner or its
successor.

     "Debtor  Relief  Laws" means the  Bankruptcy  Code of the United  States of
America,  as amended from time to time,  and all other  applicable  liquidation,
conservatorship,    bankruptcy,   moratorium,    rearrangement,    receivership,
insolvency,  reorganization,  or similar debtor relief Laws from time to time in
effect affecting the rights of creditors generally.

     "Default" means any event that, with the giving of any applicable notice or
passage of time specified in Section 9.1, or both, would be an Event of Default.

     "Default Rate" means the interest rate prescribed in Section 3.9.

     "Designated  Capital  Expenditures"  means  Capital  Expenditures  that are
either (i) financed  directly or indirectly  with the proceeds of a Loan or (ii)
not financed by the relevant Borrower by any third party financing source.

     "Designated  Eurodollar  Market" means, with respect to any Eurodollar Rate
Loan, the London Eurodollar Market.

     "Designated  Foreign  Currency  Market" means,  with respect to any Foreign
Currency  Loan, the Foreign  Currency  Market  designated by the  Administrative
Agent as appropriate for that Foreign Currency Loan.

     "Disqualified  Stock" means any capital stock,  warrants,  options or other
rights to  acquire  capital  stock (but  excluding  any debt  security  which is
convertible, or exchangeable, for capital stock), which, by its terms (or by the
terms  of  any  security  into  which  it is  convertible  or  for  which  it is
exchangeable),  or upon the  happening of any event,  matures or is  mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the  holder  thereof,  in whole or in part,  on or prior to the
Term Loan Maturity Date.

     "Disposition"  means the sale,  transfer or other disposition in any single
transaction or series of related  transactions of any asset, or group of related
assets,  of any Borrower or any of its Subsidiaries  other than (i) inventory or
Cash  Equivalents  sold or  otherwise  disposed  of in the  ordinary  course  of
business  of such  Borrower  or  such  Subsidiary  and  (ii)  equipment  sold or
otherwise  disposed of where such  equipment is obsolete or no longer  useful in
the ordinary  course of business of such  Borrower or such  Subsidiary,  and the
aggregate  value of assets so  disposed  does not exceed  $100,000 in any Fiscal
Year.

     "Distribution"  means,  with respect to any shares of capital  stock or any
warrant or option to purchase an equity security or other equity security issued
by a Person,  (a) any Stock Repurchase by such Person and (b) the declaration or
(without   duplication)  payment  by  such  Person  of  any  dividend  or  other
distribution in Cash or in Property  (except for Property  constituting  capital
stock of such Person that is not  Disqualified  Stock) on or with respect to any
such security.

     "Dollars" or "$" means United States of America dollars.

     "Domestic Lending Office" means, with respect to any Lender,  the office of
such Lender  specified as its  "Domestic  Lending  Office" next to its signature
hereto, or such other office of such Lender as such Lender may from time to time
specify to the Borrowers and to the Administrative Agent.

     "DRC" means Day Runner Canada Inc., an Ontario  corporation  formerly known
as Ultima Distribution Inc. and a wholly-owned subsidiary of Day Runner.

     "DRC Loans" has the meaning set forth in the preamble to this Agreement.

     "DRI  International"  means DRI  International  Holdings,  Inc., a Delaware
corporation and a wholly-owned Subsidiary of Day Runner.

     "DR-UK Holdings" means DR UK Holdings Limited, a company  incorporated with
limited  liability  under the laws of England and Wales and a Subsidiary  of DRI
International.

     "EBITDA" means,  with respect to any period,  the sum of (a) Net Income for
that period, plus (b) any extraordinary loss included in such Net Income,  minus
(c) any  extraordinary  gain  included  in such Net  Income,  plus (d)  Interest
Expense  of Day  Runner  and its  Subsidiaries  for  that  period,  plus (e) the
aggregate  amount  of taxes on or  measured  by  income  of Day  Runner  and its
Subsidiaries  for that period (whether or not payable during that period),  plus
(f) depreciation, amortization and all other non-cash expenses of Day Runner and
its Subsidiaries for that period, plus (g) to the extent deducted in determining
such Net Income,  for any period  including  Day Runner's  Fiscal  Quarter ended
March 31, 1999, the amount of Tender Offer Transaction  Expenses in such period,
plus (h) for any period that includes  fiscal  periods ended on or prior to June
30, 1999, to the extent deducted in determining  such Net Income,  the aggregate
amount of asset write  downs with  respect to Filofax  Group  recorded in any of
such  fiscal  periods,  in each case as  determined  in  accordance  with  GAAP,
consistently  applied plus (i) to the extent  deducted in  determining  such Net
Income,  the amount of expenses incurred in connection with Day Runner's efforts
to be  acquired  by  another  Person  or  restructure  Day  Runner or any of its
Subsidiaries  incurred  during such period;  provided  that, for any period that
includes Day Runner's Fiscal Quarter ended December 31, 1998, the acquisition of
Filofax  Group by Bidco shall be deemed to have  occurred as of the first day of
such period.

     "Effective  Date" means the first Banking Day on which the  conditions  set
forth in Section 8.1 are  satisfied  or waived,  but in any event not later than
October 15, 1999.

     "EMU" means the Economic and Monetary Union as  contemplated  in the treaty
on European unity effected  pursuant to the Treaty of Rome of March 25, 1957, as
amended by the Single  European Act 1986 and the Maastricht  Treaty,  as amended
from time to time.

     "EMU  Legislation"  means  legislative  measures  of the  European  Council
(including,   without   limitation,   European  Council   regulations)  for  the
introduction  of,  changeover  to or operation  of a single or unified  European
currency  (whether  known  as  the  euro  or  otherwise),   being  in  part  the
implementation of the third stage of EMU.

     "ERISA" means the Employee  Retirement Income Security Act of 1974, and any
regulations  issued  pursuant  thereto,  as amended or replaced and as in effect
from time to time.

     "ERISA Affiliate" means each Person (whether or not incorporated)  which is
required to be aggregated with Borrower pursuant to Section 414 of the Code.

     "Eurodollar  Banking Day" means any Banking Day on which dealings in Dollar
deposits are conducted by and among banks in the Designated Eurodollar Market.

     "Eurodollar  Lending Office" means, as to each Lender, its office or branch
so designated by written notice to the Borrowers and the Administrative Agent as
its Eurodollar  Lending Office. If no Eurodollar Lending Office is designated by
a Lender,  its Eurodollar  Lending Office shall be its office at its address for
purposes of notices hereunder.

     "Eurodollar  Market" means a regular established market located outside the
United  States of America  by and among  banks for the  solicitation,  offer and
acceptance of Dollar deposits in such banks.

     "Eurodollar  Obligations"  means  eurocurrency  liabilities,  as defined in
Regulation D or any  comparable  regulation  of any  Governmental  Agency having
jurisdiction over any Lender.

     "Eurodollar  Rate" means,  with respect to any  Eurodollar  Rate Loan,  the
average of the interest rates per annum (rounded  upward,  if necessary,  to the
next 1/16 of 1%) at which  deposits  in Dollars are offered to Wells Fargo Bank,
National Association in the Designated  Eurodollar Market at or about 11:00 A.M.
local time in the Designated  Eurodollar Market, two (2) Eurodollar Banking Days
before the first day of the applicable  Eurodollar Period in an aggregate amount
approximately  equal to the amount of the Loan to be made by Wells  Fargo  Bank,
National  Association with respect to such Eurodollar Rate Loan and for a period
of time comparable to the number of days in the applicable Eurodollar Period.

     "Eurodollar  Rate Loan" means a Loan made  hereunder  and specified to be a
Eurodollar Rate Loan in accordance with Article 2.

     "Eurodollar   Reserve   Percentage"  means  for  any  day  that  percentage
(expressed  as a decimal)  which is in effect on such day, as  prescribed by the
Board  of  Governors  of the  Federal  Reserve  System  (or any  successor)  for
determining  the maximum  reserve  requirement  for a member bank of the Federal
Reserve System in New York City with deposits  exceeding five billion dollars in
respect  of  "Eurocurrency  liabilities"  (as  defined in  Regulation  D)) or in
respect  of any  other  category  of  liabilities  which  includes  deposits  by
reference to which the interest rate on Eurodollar Loans is determined.

     "Euros"  means  the  single   currency  of  the   countries   described  as
"Participating Member States of the European Union" within any EMU Legislation.

     "Event of Default" has the meaning set forth in Section 9.1.

     "Existing  Credit  Agreement"  has the meaning set forth in the preamble to
this Agreement.

     "Extension Determination Date" has the meaning set forth in Section 2.11.

     "Federal Funds Rate" means, as of any date of  determination,  the rate set
forth in the daily  statistical  release  designated as the Composite  3:30 P.M.
Quotations  for  U.S.  Government  Securities,  or  any  successor  publication,
published by the Federal Reserve Bank of New York (including any such successor,
the "Composite 3:30 P.M.  Quotation")  for such date under the caption  "Federal
Funds Effective  Rate".  If on any relevant date the  appropriate  rate for such
date is not yet published in the Composite  3:30 P.M.  Quotations,  the rate for
such date will be the arithmetic  mean of the rates for the last  transaction in
overnight Federal funds arranged prior to 9:00 A.M. (New York City time) on that
date by each of three leading brokers of Federal funds  transactions in New York
City selected by the Administrative  Agent. For purposes of this Agreement,  any
change in the  Alternate  Base Rate due to a change in the  Federal  Funds  Rate
shall be effective as of the opening of business on the  effective  date of such
change.

     "Filofax Group" means Filofax Group Limited,  a company  incorporated  with
limited liability under the laws of England and Wales and a wholly-owned  direct
subsidiary of Bidco.

     "Filofax  Overdraft  Account"  means one or more cash  collateral  accounts
maintained  with a Lender in England by Filofax which are subject to Liens which
secure Filofax Overdraft  Indebtedness described in clause (i) of the definition
thereof.

     "Filofax  Overdraft  Indebtedness"  means  Indebtedness of (i) Filofax to a
Lender  that is  outstanding  from  time to time in  amounts  and in  currencies
determined by reference to Filofax's  accounts  receivable in foreign currencies
and (ii) the  Subsidiaries  of Filofax Group (other than Filofax) to one or more
financial  institutions as set forth in Schedule 1.2 hereto,  as the same may be
renewed, extended or refinanced from time to time, provided that with respect to
Indebtedness  described in clause (ii) above, the aggregate  principal amount of
such  Indebtedness  outstanding  at any time does not exceed  $1,500,000 (or the
Foreign Currency Equivalent thereof).

     "Filofax Working Capital Guaranties" means the collective  reference to (a)
the Borrower  Guaranty of Revolving Loans, in substantially  the form of Exhibit
N, executed by Filofax and (b) the Subsidiary  Guaranty of Revolving  Loans,  in
substantially the form of Exhibit P, executed by Filofax Group.

     "Fiscal Quarter" means the fiscal quarter of Borrowers ending on each March
31, June 30, September 30 and December 31.

     "Fiscal Year" means the fiscal year of Borrowers ending on each June 30.

     "Fixed  Charge  Coverage  Ratio"  means,  as of the last day of any  Fiscal
Quarter,  the ratio of (a) EBITDA for the fiscal  period  consisting of the four
(4) Fiscal Quarters ended on that date,  minus Designated  Capital  Expenditures
made by Day Runner and its  Subsidiaries  during such fiscal period,  minus cash
payments for federal,  state,  local and foreign taxes actually paid during such
period by Day Runner and its  Subsidiaries,  plus tax  refunds  received in cash
during such period with respect to any federal,  state, local, or foreign taxes,
minus cash dividends paid during such period by Day Runner and its Subsidiaries,
minus the fair market value of any Stock  Repurchases  during such period to (b)
the sum of (i)(A) Interest  Expense of Day Runner and its  Subsidiaries for such
fiscal period minus (B) Interest Income of Day Runner and its  Subsidiaries  for
such fiscal period plus (ii) the principal  portion of Capital Lease Obligations
of Day Runner and its  Subsidiaries  during such fiscal period  actually paid or
required to be paid (without  duplication)  during such fiscal period plus (iii)
any  required  principal  repayments  of  Indebtedness  of Day  Runner  and  its
Subsidiaries   during  such  fiscal  period  (except   respect  to  Intercompany
Indebtedness),  including without limitation required principal  repayments with
respect to the Obligations,  minus (iv) the principal amount of any Indebtedness
incurred by Day Runner and its Subsidiaries during such fiscal period (excluding
any Intercompany  Indebtedness) the proceeds of which is used during such period
to refinance  existing  Indebtedness of Day Runner and its  Subsidiaries  during
such period.

     "Foreign  Currency"  means,  with  respect  to a Foreign  Currency  Loan or
Foreign  Currency  Letter of Credit,  the foreign  currency  applicable  to that
Foreign Currency Loan or Foreign Currency Letter of Credit.

     "Foreign  Currency  Banking Day" means any Banking Day on which dealings in
deposits in the applicable  Foreign Currency are conducted by and among banks in
the Designated Foreign Currency Market.

     "Foreign Currency  Equivalent" means, as of any date of determination,  the
equivalent  amount in Dollars of a Foreign  Currency Loan or a Foreign  Currency
Letter of Credit,  as the case may be, using the currency exchange rate for such
date for the applicable  Foreign Currency in the New York City wholesale foreign
currency  exchange  market in trading  among banks in amounts of  $1,000,000  or
more, set at 11:00 A.M. London Time two (2) Foreign  Currency Banking Days prior
to the date of  determination,  or, if not so set for such  date,  as  otherwise
reasonably determined by the Administrative Agent.

     "Foreign  Currency  Letter of Credit" means a Letter of Credit issued or to
be issued in (a) British  pounds,  (b) Canadian  dollars,  (c) Euros or (d) such
other  currency  (other than Dollars) as may be acceptable to all of the Lenders
in their sole and absolute discretion.

     "Foreign  Currency  Limitation"  means, at any time, sixty percent (60%) of
the Revolving Commitment in effect at such time.

     "Foreign  Currency  Loan" means a Revolving  Loan made or to be made in (a)
pounds  sterling,  (b) Euros or (c) such other currency  (other than Dollars) as
may be acceptable to all of the Lenders in their sole and absolute discretion.

     "Foreign  Currency  Market"  means a  regular  established  market  located
outside the United  States of America by and among  banks for the  solicitation,
offer and acceptance of Foreign Currency deposits in such banks.

     "Foreign  Currency  Period"  means,  as to each Foreign  Currency Loan, the
period  commencing on the date specified by the applicable  Borrower pursuant to
Section 2.2 or 2.3, as applicable,  and ending 1, 2, 3 or 6 months (or, with the
written  consent  of  all of the  Lenders,  any  other  period)  thereafter,  as
specified by the applicable  Borrower in (1) the applicable  Notice of Borrowing
with   respect  to  a   Revolving   Loan  or  (2)  the   applicable   Notice  of
Conversion/Continuation with respect to a Loan; provided that:

          (a) The first day of any Foreign  Currency  Period  shall be a Foreign
     Currency Banking Day;

          (b) Any Foreign Currency Period that would otherwise end on a day that
     is not a Foreign  Currency Banking Day shall be extended to the immediately
     succeeding  Foreign  Currency  Banking  Day unless  such  Foreign  Currency
     Banking Day falls in another  calendar  month,  in which case such  Foreign
     Currency Period shall end on the  immediately  preceding  Foreign  Currency
     Banking Day; and

          (c) No Foreign Currency Period shall extend beyond (i) with respect to
     any Term Loan,  the Term Loan  Maturity  Date and (ii) with  respect to any
     Revolving Loan, the Revolving Loan Maturity Date.

     "Foreign  Currency Rate" means,  with respect to any Foreign  Currency Rate
Loan, the interest rate per annum at which deposits in that Foreign Currency are
offered to the Administrative Agent in the Designated Foreign Currency Market at
11:00 A.M.  (London time) two (2) Foreign Currency Banking Days before the first
day  of  the  applicable   Foreign   Currency  Period  in  an  aggregate  amount
approximately  equal to the  amount of the Loan to be made with  respect to such
Foreign  Currency Rate Loan and for a period of time comparable to the number of
days in the applicable Foreign Currency Period.

     "Foreign  Subsidiary"  means  a  Subsidiary  of any  Borrower  that  (a) is
organized  under the Laws of a  jurisdiction  other  than the  United  States of
America,  any State  thereof or the District of Columbia and (b) conducts all or
substantially all of its business outside the United States of America.

     "Funded  Debt"  means,  as  to  any  Person  (without   duplication),   (a)
indebtedness  of such Person for  borrowed  money or for the  deferred  purchase
price of Property  (excluding  trade and other accounts  payable in the ordinary
course of business in  accordance  with  ordinary  trade  terms),  including any
Guaranty  Obligation for any such  indebtedness,  (b) all  indebtedness  of such
Person  evidenced  by notes,  bonds,  debentures,  debentures  or other  similar
instruments, (c) indebtedness of such Person that is non-recourse to such Person
but is secured by assets of such Person,  to the extent of the fair market value
of such assets as  determined  in good faith by such Person,  (d) the  principal
portion of Capital Lease  Obligations  of such Person  required under GAAP to be
shown on the  balance  sheet of such  Person,  (e)  indebtedness  of such Person
arising  under  bankers'  acceptance  facilities  or  under  facilities  for the
discount of accounts receivable of such Person, and (f) any direct or contingent
obligations  of such Person  under  letters of credit  issued for the account of
such Person.

     "Funded Debt Ratio" means,  as of the last day of any Fiscal  Quarter,  the
ratio of (a) the outstanding  principal  amount of all Funded Debt of Day Runner
and its Subsidiaries  (limited in the case of Filofax Overdraft  Indebtedness to
that  portion  thereof in excess of the amount of cash on deposit in the Filofax
Overdraft  Account  as of  such  date)  to (b)  EBITDA  for  the  fiscal  period
consisting of the four (4) Fiscal Quarters ended on that date.

     "Funded Senior Debt Ratio" means, as of the last day of any Fiscal Quarter,
the ratio of (a) the outstanding principal amount of all Funded Debt (other than
Subordinated   Obligations  and  limited  in  the  case  of  Filofax   Overdraft
Indebtedness  to that portion thereof in excess of the amount of cash on deposit
in the  Filofax  Overdraft  Account  as of  such  date)  of Day  Runner  and its
Subsidiaries on that date to (b) EBITDA for the fiscal period  consisting of the
four (4) Fiscal Quarters ended on that date.

     "GAAP" means, as of any date of  determination,  accounting  principles (a)
set forth as  generally  accepted in then  currently  effective  Opinions of the
Accounting  Principles  Board of the  American  Institute  of  Certified  Public
Accountants,  (b) set forth as generally  accepted in then  currently  effective
Statements  of the  Financial  Accounting  Standards  Board or (c) that are then
approved by such other entity as may be approved by a significant segment of the
accounting  profession in the United States of America.  The term  "consistently
applied," as used in connection therewith,  means that the accounting principles
applied are  consistent  in all material  respects  with those  applied at prior
dates or for prior periods.

     "Government  Securities" means readily marketable (a) direct full faith and
credit obligations of the United States of America or obligations  guaranteed by
the full faith and credit of the United States of America and (b) obligations of
an agency or instrumentality  of, or corporation owned,  controlled or sponsored
by, the United States of America that are generally considered in the securities
industry to be implicit obligations of the United States of America.

     "Governmental Agency" means (a) any international, foreign, federal, state,
county or  municipal  government,  or  political  subdivision  thereof,  (b) any
governmental or quasi-governmental  agency,  authority,  board, bureau,  central
bank, commission, department, instrumentality or public body or (c) any court or
administrative tribunal of competent jurisdiction.

     "Guaranty  Obligation"  means, as to any Person,  any (a) guarantee by that
Person of Indebtedness of, or other obligation  performable by, any other Person
or (b)  assurance  given by that  Person to an obligee of any other  Person with
respect to the  performance of an obligation by, or the financial  condition of,
such other  Person,  whether  direct,  indirect  or  contingent,  including  any
purchase or  repurchase  agreement  covering such  obligation or any  collateral
security  therefor,  any agreement to provide funds (by means of loans,  capital
contributions  or otherwise) to such other Person,  any agreement to support the
solvency  or  level  of any  balance  sheet  item of such  other  Person  or any
"keep-well"  or other  arrangement  of whatever  nature given for the purpose of
assuring or holding  harmless  such  obligee  against  loss with  respect to any
obligation  of such other  Person;  provided,  however,  that the term  Guaranty
Obligation  shall  not  include  endorsements  of  instruments  for  deposit  or
collection  in the  ordinary  course of  business.  The  amount of any  Guaranty
Obligation in respect of  Indebtedness  shall be deemed to be an amount equal to
the maximum reasonably anticipated liability in respect thereof as determined by
the Person in good faith.  The amount of any other Guaranty  Obligation shall be
deemed to be zero unless and until the amount thereof has been (or in accordance
with Financial  Accounting Standards Board Statement No. 5 should be) quantified
and reflected or disclosed in the  consolidated  financial  statements (or notes
thereto) of the applicable Borrower or Subsidiary of any Borrower.

     "Hazardous  Materials" means substances  defined as "hazardous  substances"
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act of  1980,  42  U.S.C.  (S)  9601 et  seq.,  or as  "hazardous",  "toxic"  or
"pollutant"  substances or as "solid waste" pursuant to the Hazardous  Materials
Transportation  Act, 49 U.S.C. (S) 1801, et seq., the Resource  Conservation and
Recovery Act, 42 U.S.C. (S) 6901, et seq., or as "friable  asbestos" pursuant to
the  Toxic  Substances  Control  Act,  15 U.S.C.  (S) 2601 et seq.  or any other
applicable  Hazardous  Materials Law, in each case as such Laws are amended from
time to time.

     "Hazardous   Materials  Laws"  means  all  Laws  governing  the  treatment,
transportation or disposal of Hazardous Materials  applicable to any of the Real
Property.

     "Indebtedness"  means,  as to any  Person  (without  duplication),  (a) any
Funded Debt of such  Person,  (b) all  obligations  of such Person to  purchase,
redeem,  retire, defease or otherwise make any payment in respect of any capital
stock of or other  ownership  or  profit  interest  in such  Person or any other
Person or any warrants, rights or options to acquire such capital stock, (c) all
Indebtedness  of others  referred  to in  clauses  (a) and (b) above  guaranteed
directly or  indirectly  in any manner by such Person,  or in effect  guaranteed
directly  or  indirectly  by such  Person  through  an  agreement  (i) to pay or
purchase  such  Indebtedness  or to advance or supply  funds for the  payment or
purchase of such  Indebtedness,  (ii) to  purchase,  sell or lease (as lessee or
lessor) property, or to purchase or sell services,  primarily for the purpose of
enabling the debtor to make payment of such Debt or to assure the holder of such
Indebtedness  against  loss,  (iii) to supply  funds to or in any  other  manner
invest in the debtor  (including  any  agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (iv) otherwise to assure a creditor  against loss,  and (d) all  Indebtedness
referred to in clauses (a) through (c) above secured by (or for which the holder
of such  Indebtedness  has an existing  right,  contingent or  otherwise,  to be
secured by) any Lien on property  (including,  without limitation,  accounts and
contract  rights) owned by such Person,  even though such Person has not assumed
or become liable for the payment of such Indebtedness.

     "Initial  Pricing  Period" means the period from the Effective Date through
the date  upon  which the  Borrowers  deliver  the  Pricing  Certificate  to the
Administrative  Agent with respect to the Fiscal  Quarter  ending  September 30,
1999.

     "Intangible  Assets"  means assets that are  considered  intangible  assets
under  GAAP,  including  customer  lists,  goodwill,  covenants  not to compete,
copyrights, trade names, trademarks and patents.

     "Intercompany  Indebtedness"  means any Indebtedness owed (i) by Day Runner
to any of its Subsidiaries,  (ii) by any Subsidiary of Day Runner to Day Runner,
or (iii) by any Subsidiary of Day Runner to any other Subsidiary of Day Runner.

     "Interest  Expense" means,  with respect to Day Runner and its Subsidiaries
as of the last day of any fiscal period, determined on a consolidated basis, the
sum of (a) all  interest,  fees,  charges and related  expenses  for that fiscal
period in connection  with borrowed money  (including any  obligations for fees,
charges and related expenses payable to the issuer of any letter of credit,  but
excluding  (x) Fees (other than the  Administrative  Agent's Fee) required to be
paid by the Borrowers to the Lenders or the  Administrative  Agent in connection
with this Agreement and (y)  amortization or write-off of capitalized  fees paid
in connection with the execution and delivery of the Existing Credit  Agreement)
or the  deferred  purchase  price of  assets  that in each  case are  considered
"interest  expense"  under  GAAP plus (b) the  portion  of rent paid or  payable
(without  duplication) for that fiscal period by that Person under Capital Lease
Obligations  that  should be treated as interest in  accordance  with  Financial
Accounting Standards Board Statement No. 13.
     "Interest  Period" means,  with respect to each  Eurodollar  Rate Loan, the
period  commencing on the date specified by the applicable  Borrower pursuant to
Section  2.1(a),  2.1(d) or 2.2(b),  as the case may be, and ending 1, 2, 3 or 6
months  thereafter,  as specified by the  applicable  Borrower in the applicable
Notice  of  Borrowing  or  Notice  of  Conversion/Continuation,  as  applicable;
provided that:

          (a) The first day of any Interest Period shall be a Eurodollar Banking
     Day;

          (b) Any Interest  Period that would otherwise end on a day that is not
     a Eurodollar  Banking Day shall be extended to the  immediately  succeeding
     Eurodollar  Banking Day unless such Eurodollar Banking Day falls in another
     calendar  month,  in which  case such  Eurodollar  Period  shall end on the
     immediately preceding Eurodollar Banking Day; and

          (c) No Interest  Period  shall  extend  beyond (i) with respect to any
     Term  Loan,  the Term  Loan  Maturity  Date and (ii)  with  respect  to any
     Revolving Loan, the Revolving Loan Maturity Date.

     "Interest Rate Protection  Agreement" means a written agreement between any
Borrower and one or more  financial  institutions  providing for "swap",  "cap",
"collar" or other interest rate protection with respect to any Indebtedness.

     "Investment" means, when used in connection with any Person, any investment
by or of that Person, whether by means of purchase or other acquisition of stock
or other  securities of, or all or any substantial  portion of the assets of (or
comprising  a division or business  unit of),  any other Person or by means of a
loan, advance creating a debt, capital  contribution,  guaranty or other debt or
equity participation or interest in any other Person,  including any partnership
and joint venture  interests of such Person.  The amount of any Investment shall
be the amount  actually  invested  (minus any return of capital  with respect to
such  Investment  which has actually been received in Cash or has been converted
into Cash or a Cash Equivalent),  without adjustment for subsequent increases or
decreases in the value of such Investment.

     "Issuing Lender" means Wells Fargo Bank, National Association.

     "Laws" means, collectively, all international,  foreign, federal, state and
local   statutes,   treaties,   rules,   regulations,   ordinances,   codes  and
administrative or judicial precedents.

     "Lender"  means each lender whose name is set forth in the signature  pages
of this  Agreement  and each lender which may  hereafter  become a party to this
Agreement pursuant to Section 11.8.

     "Letters  of  Credit"  means  any of the  Commercial  Letters  of Credit or
Standby  Letters of Credit  issued by the  Issuing  Lender  under the  Revolving
Commitment  pursuant to Section 2.7, as the same may be supplemented,  modified,
amended, renewed, extended or supplanted.

     "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment
for  security,  security  interest,  encumbrance,  lien or  charge  of any kind,
whether  voluntarily  incurred  or arising  by  operation  of Law or  otherwise,
affecting any Property,  including any conditional sale or other title retention
agreement, any lease in the nature of a security interest.

     "Loan" means a Revolving  Loan, a Swing Line Loan or a Term Loan (including
without  limitation  any such Revolving Loan or Term Loan that is also a Foreign
Currency Loan) and "Loans" includes all of the foregoing.

     "Loan  Documents"  means,  collectively,  this  Agreement,  the Notes,  the
Borrower Guaranties, the Subsidiary Guaranties, the Collateral Documents and any
other agreements of any type or nature  hereafter  executed and delivered by any
Borrower or any of their respective  Subsidiaries to the Administrative Agent or
to any Lender in any way relating to or in  furtherance  of this  Agreement,  in
each case either as originally  executed or as the same may from time to time be
supplemented, modified, amended, restated, extended or supplanted.

     "Lockbox" has the meaning set forth in Section 5.14.

     "Margin  Stock" means "margin  stock" as such term is defined in Regulation
U.

     "Material  Adverse  Effect" means any  circumstance  or event, or series of
circumstances  or events  which (a) has had or could  reasonably  be expected to
have any material adverse effect  whatsoever upon the validity or enforceability
of any Loan  Document,  (b) has  been or  could  reasonably  be  expected  to be
material  and  adverse to the  business,  condition  (financial  or  otherwise),
operations, performance, Properties or prospects of Day Runner or Day Runner and
its  Subsidiaries,  taken as a whole  or (c) has  materially  impaired  or could
reasonably  be expected  to  materially  impair the  ability of any  Borrower to
perform the Obligations.

     "Material Subsidiary" means a Subsidiary of Day Runner either (x) owning at
least  five  percent  (5%) of the  consolidated  assets  of Day  Runner  and its
Subsidiaries as of the end of the immediately  prior Fiscal Quarter or (y) as of
the last day of any Fiscal Quarter, generating at least five percent (5%) of the
consolidated  net sales of Day Runner and its Subsidiaries for the fiscal period
consisting of the four (4) Fiscal Quarters ended on that date.

     "Monthly Payment Date" means the last Banking Day of each month.

     "Multiemployer  Plan" means any employee benefit plan of the type described
in  Section  4001(a)(3)  of ERISA  to which  any  Borrower  or any of its  ERISA
Affiliates contributes or is obligated to contribute.

         "Net Cash Issuance Proceeds" means, with respect to the issuance of any
debt security or equity security by a Borrower or any of its  Subsidiaries,  the
Cash proceeds received by or for the account of a Borrower or such Subsidiary in
consideration of such issuance net of (a) underwriting discounts and commissions
actually paid to any Person not an Affiliate of any Borrower and (b)  reasonable
professional fees and disbursements actually paid in connection therewith.

         "Net Cash Sales Proceeds" means,  with respect to any Disposition,  the
sum of (a) the Cash proceeds received by or for the account of the Borrowers and
their respective  Subsidiaries from such Disposition plus (b) the amount of Cash
received  by  or  for  the  account  of  the  Borrowers  and  their   respective
Subsidiaries upon the sale, collection or other liquidation of any proceeds that
are not Cash from such Disposition,  in each case net of (i) any amount required
to be paid to any Person owning an interest in the assets  disposed of, (ii) any
amount  applied to the  repayment of  Indebtedness  secured by a Lien  permitted
under Section 6.9 on the asset disposed of, (iii) any transfer,  income or other
taxes payable as a result of such Disposition, (iv) reasonable professional fees
and expenses,  fees due to any  Governmental  Agency,  broker's  commissions and
other  out-of-pocket  costs of sale  actually  paid to any Person that is not an
Affiliate of any Borrower  attributable to such Disposition and (v) any reserves
established in accordance with GAAP in connection with such Disposition.

     "Net Income" means, with respect to any period, the consolidated net income
of Day Runner and its  Subsidiaries  for that period,  determined  in accordance
with GAAP, consistently applied.

     "Note" and "Notes" have the meanings set forth in Section 2.6(a).

     "Notice of Borrowing" has the meaning set forth in Section 2.1(b).

     "Obligations"  means all  present and future  obligations  of every kind or
nature of the Borrowers or any of their respective  Subsidiaries at any time and
from time to time owed to the Administrative  Agent or the Lenders or any one or
more of them,  under any one or more of the Loan  Documents,  whether  due or to
become due, matured or unmatured,  liquidated or unliquidated,  or contingent or
noncontingent,  including  obligations  of performance as well as obligations of
payment,  and  including  interest that accrues  after the  commencement  of any
proceeding  under any Debtor Relief Law by or against any Borrower or any of its
Subsidiaries.

     "Party"  means  any  Person  other  than the  Administrative  Agent and the
Lenders, which now or hereafter is a party to any of the Loan Documents.

     "PBGC" means the Pension  Benefit  Guaranty  Corporation  or any  successor
thereof established under ERISA.

     "Pension Plan" means any "employee  pension  benefit plan" (as such term is
defined in Section 3(2) of ERISA),  other than a  Multiemployer  Plan,  which is
subject to Title IV of ERISA and is  maintained  by any Borrower or to which any
Borrower contributes or has an obligation to contribute.

     "Permitted Encumbrances" means:

          (a) Inchoate  Liens  incident to  construction  on or  maintenance  of
     Property;  or Liens incident to  construction on or maintenance of Property
     now or hereafter filed of record for which adequate  reserves have been set
     aside (or deposits  made  pursuant to  applicable  Law) and which are being
     contested in good faith by appropriate  proceedings  and have not proceeded
     to judgment,  provided  that, by reason of  nonpayment  of the  obligations
     secured by such Liens, no such Property is subject to a material  impending
     risk of loss or forfeiture;

          (b)  Liens for taxes and  assessments  on  Property  which are not yet
     delinquent;  or Liens for  taxes  and  assessments  on  Property  for which
     adequate reserves have been set aside and are being contested in good faith
     by appropriate  proceedings,  provided that, by reason of nonpayment of the
     obligations  secured  by such  Liens,  no such  Property  is  subject  to a
     material impending risk of loss or forfeiture;

          (c) defects and  irregularities  in title to any Property which in the
     aggregate  do not  materially  impair the fair  market  value or use of the
     Property for the purposes for which it is or may  reasonably be expected to
     be held;

          (d) easements,  exceptions,  reservations, or other agreements for the
     purpose of pipelines,  conduits,  cables,  wire communication  lines, power
     lines and substations,  streets,  trails, walkways,  drainage,  irrigation,
     water, and sewerage purposes,  dikes, canals,  ditches, the removal of oil,
     gas, coal, or other minerals,  and other like purposes  affecting  Property
     which in the aggregate do not  materially  burden or impair the fair market
     value  or use of such  Property  for the  purposes  for  which it is or may
     reasonably be expected to be held;

          (e) easements,  exceptions,  reservations, or other agreements for the
     purpose of facilitating  the joint or common use of Property in or adjacent
     to a shopping  center or similar  project  affecting  Property which in the
     aggregate do not  materially  burden or impair the fair market value or use
     of such  Property  for the purposes  for which it is or may  reasonably  be
     expected to be held;

          (f) rights reserved to or vested in any Governmental Agency to control
     or  regulate,  or  obligations  or duties to any  Governmental  Agency with
     respect to, the use of any Property;

          (g) rights reserved to or vested in any Governmental Agency to control
     or  regulate,  or  obligations  or duties to any  Governmental  Agency with
     respect to, any right, power, franchise, grant, license, or permit;

          (h)  present or future  zoning laws and  ordinances  or other laws and
     ordinances restricting the occupancy, use, or enjoyment of Property;

          (i) statutory Liens,  other than those described in clauses (a) or (b)
     above,  arising  in  the  ordinary  course  of  business  with  respect  to
     obligations  which are not delinquent or are being contested in good faith,
     provided  that, if delinquent,  adequate  reserves have been set aside with
     respect  thereto and, by reason of nonpayment,  no Property is subject to a
     material impending risk of loss or forfeiture;

          (j)  covenants,  conditions,  and  restrictions  affecting  the use of
     Property  which in the aggregate do not  materially  impair the fair market
     value  or use of the  Property  for the  purposes  for  which  it is or may
     reasonably be expected to be held;

          (k) rights of tenants  under  leases  and rental  agreements  covering
     Property  entered  into in the  ordinary  course of  business of the Person
     owning such Property;

          (l) Liens  consisting  of pledges or  deposits  to secure  obligations
     under workers' compensation laws or similar legislation, including Liens of
     judgments thereunder which are not currently dischargeable;

          (m) Liens  consisting  of pledges or  deposits  of  Property to secure
     performance in connection with operating leases made in the ordinary course
     of business,  provided the aggregate value of all such pledges and deposits
     in  connection  with any such lease does not at any time  exceed 20% of the
     annual fixed rentals payable under such lease;

          (n) Liens  consisting of deposits of Property to secure bids made with
     respect to, or performance of, contracts (other than contracts  creating or
     evidencing an extension of credit to the depositor);

          (o) Liens  consisting  of any right of offset,  or statutory  bankers'
     lien,  on bank  deposit  accounts  maintained  in the  ordinary  course  of
     business  so long as such bank  deposit  accounts  are not  established  or
     maintained  for the purpose of  providing  such right of offset or bankers'
     lien;

          (p) Liens  consisting  of deposits  of  Property  to secure  statutory
     obligations of a Borrower; and

          (q) Liens consisting of deposits of Property to secure (or in lieu of)
     surety, appeal or customs bonds.

     "Permitted Stockholder" means Jill Tate Higgins and her heirs, devisees and
legatees,  and  trusts  for the  sole  benefit  of  such  Persons,  and  Persons
wholly-owned by such Persons.

     "Person" means any individual or entity, including a trustee,  corporation,
limited liability company, general partnership, limited partnership, joint stock
company, trust, estate, unincorporated organization, business association, firm,
joint venture, Governmental Agency, or other entity.

     "Pledge  Agreements"  means  the  collective  reference  to (a) the  Pledge
Agreement,  in substantially the form of Exhibit J, executed and delivered on or
prior to the Effective Date by Day Runner, or by any Subsidiary, as the same may
be amended,  supplemented  or otherwise  modified from time to time and (b) each
Mortgage  of  Shares,  in  substantially  the form of Exhibit  K,  executed  and
delivered on or prior to the Effective Date by each of DRI International,  DR-UK
Holdings,  Bidco,  Filofax Group and Filofax,  and (c) each Pledge  Agreement or
Mortgage of Shares, in substantially the form of Exhibit J or K, as the case may
be,  executed and delivered by any  Subsidiary  pursuant to Section 5.13, in any
case as the same may be amended, supplemented or otherwise modified from time to
time, and each of them is a "Pledge Agreement".

     "Pricing  Certificate"  means  a  certificate  in the  form of  Exhibit  E,
properly completed and signed by a Senior Officer of Day Runner.

     "Pricing  Period" means the period  beginning 55 days after the end of each
Fiscal  Quarter  and  ending  55 days  after  the end of the  subsequent  Fiscal
Quarter.

     "Prime Rate" means the rate of interest  announced from time to time by the
Administrative Agent in San Francisco, California (or other headquarters city of
the  Administrative  Agent),  as its "prime  rate."  The "prime  rate" is one of
several base rates used by the Administrative Agent and serves as the basis upon
which  effective  rates of interest are  calculated  for loans and other credits
making reference thereto. The "prime rate" is evidenced by the recording thereof
after its  announcement  in such internal  publication  or  publications  as the
Administrative  Agent may  designate.  Any  change in the Prime  Rate shall take
effect at the opening of business on the day such change is internally announced
within the offices of the Administrative Agent.

     "Projections"  means (i) the projected  financial  information dated August
27, 1999 prepared by Day Runner and (ii) any budget and projection  delivered by
Day Runner pursuant to Section 7.1(d).

     "Property"  means any  interest in any kind of  property or asset,  whether
real, personal or mixed, or tangible or intangible.

     "Pro Rata Share"  means,  with respect to each Lender,  (a) with respect to
Revolving  Loans  and  Letters  of  Credit,  the  percentage  of  the  Revolving
Commitment  set forth  opposite the name of that Lender on Schedule 1.1, as such
percentage  may  be  increased  or  decreased  pursuant  to  an  Assignment  and
Acceptance executed in accordance with Section 11.8 and (b) with respect to Term
Loans,  the  percentage  of the Term Loans set forth  opposite  the name of that
Lender on  Schedule  1.1,  as such  percentage  may be  increased  or  decreased
pursuant to an Assignment  and  Acceptance  executed in accordance  with Section
11.8.

     "Quarterly  Payment  Date" means the last Banking Day of each March,  June,
September and December.

     "Real Property" means, as of any date of  determination,  all real property
then or theretofore  owned,  leased or occupied by any of the Borrowers or their
respective Subsidiaries.

     "Regulation D" means Regulation D, as at any time amended,  of the Board of
Governors of the Federal  Reserve System,  or any other  regulation in substance
substituted therefor.

     "Regulation U" means Regulation U, as at any time amended,  of the Board of
Governors of the Federal Reserve System,  or any other  regulations in substance
substituted therefor.

     "Request  for Letter of  Credit"  means a written  request  for a Letter of
Credit in substantially the form of Exhibit F, signed by a Responsible  Official
of Day Runner and properly  completed to provide all information  required to be
included  therein,  and  delivered  to the Issuing  Bank and the  Administrative
Agent.

     "Requirement of Law" means,  as to any Person,  the articles or certificate
of incorporation and by-laws or other  organizational or governing  documents of
such Person, and any Law, or judgment, award, decree, writ or determination of a
Governmental  Agency,  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.

     "Requisite  Lenders"  means  (a) as of any  date  of  determination  if the
Revolving  Commitment  is then in effect,  Lenders  constituting  50% or more in
number and having in the aggregate more than 50% of the sum of (i) the Revolving
Commitment  then in effect and (ii) the aggregate  principal  amount of the Term
Loans  outstanding on such date and (b) as of any date of  determination  if the
Revolving Commitment has then been suspended or terminated and there is then any
principal amount of any Loan outstanding on such date, Lenders  constituting 50%
or more in number and having Loans  representing more than 50% of the sum of (i)
the aggregate  principal amount of the Revolving Loans  outstanding on such date
and (ii) the aggregate  principal  amount of the Term Loans  outstanding on such
date.

     "Responsible  Official"  means (a) any Senior Officer of Day Runner and (b)
any other responsible official of any Borrower so designated in a written notice
thereof from a Senior Officer to the Administrative  Agent. The Lenders shall be
entitled to conclusively rely upon any document or certificate that is signed or
executed by a Responsible  Official of a Borrower or any of its  Subsidiaries as
having been  authorized by all  necessary  corporate,  partnership  and/or other
action on the part of such Borrower or such Subsidiary.

     "Revolving  Commitment" means,  subject to Section 2.8,  $120,000,000 minus
the Term Loan Amount.

     "Revolving  Loan" means any Loan made pursuant to Section 2.1(a) or Section
2.9(d). "Revolving Loan" shall not include any Swing Line Loan or any Term Loan.

     "Revolving Loan Borrower" means a Borrower other than Bidco.

     "Revolving  Loan Maturity Date" means October 31, 2000, as such date may be
extended pursuant to Section 2.11.

     "Revolving  Loan  Sublimit"  means,  with  respect  to any  Revolving  Loan
Borrower,  the amount set forth below opposite the name of such Borrower,  which
amount is the maximum amount of Revolving Loans available to be extended to such
Borrower (it being understood that no Revolving Loans shall be made to Bidco, as
Borrower):

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


                       Borrower                              Sublimit
    --------------------------------------------- ------------------------------
    --------------------------------------------- ------------------------------

                     Day Runner                       100% of the Revolving
                                                      Commitment then in effect
    --------------------------------------------- ------------------------------
    --------------------------------------------- ------------------------------

                    Filofax                              $20,000,000
    --------------------------------------------- ------------------------------

     "SEC Document" means any document,  exhibit, report, form or other document
filed  by any  Borrower  or  required  to be  filed  by any  Borrower  with  the
Securities and Exchange Commission,  including without limitation annual reports
on Form 10-K and quarterly reports on Form 10-Q.

     "Security  Agreements" means the collective  reference to (a) each Security
Agreement, in substantially the form of Exhibit L, executed and delivered by Day
Runner or a domestic Subsidiary of Day Runner on or prior to the Effective Date,
or  pursuant  to  Section  5.13,  as the same may be  amended,  supplemented  or
otherwise  modified  from  time  to  time  and (b)  the  Security  Document,  in
substantially  the form of Exhibit M, executed and delivered by Filofax or Topps
on or prior to the Effective  Date, as the same may be amended,  supplemented or
otherwise  modified  from  time  to  time,  and  each  of  them  is a  "Security
Agreement".

     "Senior Officer" means (a) with respect to any Person,  if, at any relevant
time,  such office exists and any person is then  incumbent in such office,  (i)
the chairman,  (ii) the chief executive officer,  (iii) the president,  (iv) any
executive vice  president,  (v) the chief  operating  officer,  (vi) the general
counsel,  (vii) the chief financial officer,  (viii) the treasurer,  or (ix) the
controller of such Person and, in each case, if such office does not exist or no
person  is then  incumbent  in  such  office,  any  individual  with  comparable
executive,  management or financial  responsibilities  or functions and (b) with
respect to each  Subsidiary  of Day Runner not  organized  under the laws of the
United States of America, any other senior executive officer.

     "Solvent",  when used with respect to any Person, means that at the time of
determination:

          (i) the fair  market  value of its  assets  (including  any  rights of
     reimbursement  and  contribution)  is in excess of the total  amount of its
     liabilities (including, without limitation, contingent liabilities); and

          (ii) the present fair saleable value of its assets is greater than its
     probable  liability on its existing debts as such debts become absolute and
     matured; and

          (iii)  it is then  able  and  expects  to be  able  to pay  its  debts
     (including, without limitation,  contingent debts and other commitments) as
     they mature; and

          (iv) it has capital  sufficient  to carry on its business as conducted
     and as proposed to be conducted.

For  purposes  of  determining  whether a Person is  Solvent,  the amount of any
contingent  liability  shall be computed as the amount that, in light of all the
facts and  circumstances  existing at such time,  represents the amount that can
reasonably be expected to become an actual or matured liability.

     "Special  Eurodollar  Circumstance" means the application or adoption after
the  Effective  Date of any Law or  interpretation,  or any  change  therein  or
thereof,  or any change in the  interpretation or administration  thereof by any
Governmental  Agency,  central  bank or  comparable  authority  charged with the
interpretation  or  administration  thereof,  or compliance by any Lender or its
Eurodollar  Lending Office with any request or directive  (whether or not having
the force of Law) of any such  Governmental  Agency,  central bank or comparable
authority.

     "Standby  Letter of  Credit"  means  each  Letter  of Credit  that is not a
Commercial Letter of Credit.

     "Stock  Repurchase"  means,  with  respect to any Person,  the  retirement,
redemption,  purchase or other  acquisition for Cash or for Property (except for
Property  constituting  capital  stock of such Person  that is not  Disqualified
Stock) by such Person of any shares of capital stock or any warrant or option to
purchase an equity security or other equity security issued by such Person.

     "Stockholders'  Equity"  means,  as of any date of  determination  and with
respect to any Person, the consolidated stockholders' equity of the Person as of
that date  determined  in  accordance  with GAAP;  provided  that there shall be
excluded  from  Stockholders'  Equity any amount  attributable  to  Disqualified
Stock.

     "Subordinated  Obligations"  means any  Indebtedness of Day Runner that (i)
does not have any scheduled principal payment, mandatory principal prepayment or
sinking fund payment due prior to September 30, 2002, (ii) is not secured by any
Lien on any  Property  of Day  Runner or any of its  Subsidiaries,  (iii) is not
guarantied by any Subsidiary of Day Runner, (iv) is subordinated by its terms in
right of  payment  to the  Obligations  on  terms,  and in form  and  substance,
satisfactory  to the  Administrative  Agent and the  Requisite  Lenders,  (v) is
subject to financial  performance  and other covenants and events of default and
other  default  provisions  satisfactory  to the  Administrative  Agent  and the
Requisite Lenders,  (vi) is subject to payment blockage and delayed acceleration
provisions  satisfactory to the Administrative  Agent and the Requisite Lenders,
and (vii) has other terms, and is otherwise in form and substance,  satisfactory
to the  Administrative  Agent and the Requisite  Lenders,  in each case in their
sole and absolute discretion.

     "Subsidiary" means, as of any date of determination and with respect to any
Person,  any corporation,  limited liability company or partnership  (whether or
not, in any case,  characterized as such or as a "joint  venture"),  whether now
existing or hereafter organized or acquired: (a) any Person which is required to
be treated as a "consolidated  subsidiary"  under GAAP, or (b) any Person (i) in
the case of a corporation or limited liability  company,  of which a majority of
the  securities  having  ordinary  voting power for the election of directors or
other governing body (other than securities  having such power only by reason of
the  happening  of a  contingency)  are at the time  beneficially  owned by such
Person and/or one or more  Subsidiaries of such Person, or (ii) in the case of a
partnership, of which a majority of the partnership or other ownership interests
are at the time  beneficially  owned by such  Person  and/or  one or more of its
Subsidiaries.

     "Subsidiary  Guarantors" means all Subsidiaries of any Borrower that are or
become parties to the Subsidiary Guaranty.

     "Subsidiary   Guaranties"  means  the  collective   reference  to  (a)  the
Subsidiary  Guaranty,  in  substantially  the form of  Exhibit G,  executed  and
delivered on or prior to the  Effective  Date by each of DRI  International  and
DR-UK Holdings, and each other Subsidiary Guarantor, as it may from time to time
be supplemented,  modified,  amended, extended or supplanted, (b) the Subsidiary
Guaranty of Revolving  Loans, in  substantially  the form of Exhibit P, executed
and delivered on or prior to the Effective Date by Filofax Group, as it may from
time to time be supplemented, modified, amended, extended or supplanted, and (c)
the Subsidiary  Guaranty of Term Loans, in substantially  the form of Exhibit Q,
executed and delivered on or prior to the Effective Date by Filofax Group, as it
may  from  time  to  time  be  supplemented,   modified,  amended,  extended  or
supplanted; and each of them is a "Subsidiary Guaranty".

     "Swing Line" means the revolving  line of credit  established  by the Swing
Line Lender in favor of the Borrowers pursuant to Section 2.9.

     "Swing Line Lender" means Wells Fargo Bank, National Association.

     "Swing  Line  Loans"  means  loans  made by the  Swing  Line  Lender to the
Borrowers pursuant to Section 2.9.

     "Swing  Line  Outstandings"  means,  as of any date of  determination,  the
aggregate principal amount of all Swing Line Loans then outstanding.

     "Syndicated  Loans"  has the  meaning  set  forth  in the  Existing  Credit
Agreement.

     "Tender  Offer" means the offer made on September 24, 1998 by  Wasserstein
Perella & Co.  Limited on behalf of Bidco to acquire the entire issued and to be
issued share capital of Filofax Group.

     "Tender  Offer Loans"  means the Loans (as defined in the  Existing  Credit
Agreement) made to Day Runner and to Bidco under the Existing  Credit  Agreement
in an aggregate  principal  amount equal to the Foreign  Currency  Equivalent of
$90,443,666.20,  all of which continues to be outstanding on the Effective Date,
the proceeds of which were used directly or indirectly (i) to purchase shares of
capital  stock of Filofax Group  pursuant to the Tender  Offer,  (ii) to acquire
shares of capital stock of Filofax Group in  accordance  with the  provisions of
Sections  428-430F of the  Companies  Act or (iii) to pay stamp duties and stamp
duty reserve  taxes in  connection  with the shares of capital  stock of Filofax
Group purchased by Bidco pursuant to the Tender Offer.

     "Tender  Offer Notes" means  unsecured  promissory  notes made by Bidco and
guaranteed,  by unsecured guaranty,  by Day Runner, issued to the former holders
of the share  capital of Filofax Group who elected to receive such notes instead
of all or part of the cash  consideration  to which such holders  otherwise were
entitled under the Tender Offer.

     "Tender Offer  Transaction  Expenses"  means the  reasonable  out-of-pocket
costs and  expenses of Day Runner and its  Subsidiaries  incurred in  connection
with the Tender  Offer,  including,  without  limitation,  such  reasonable  and
out-of-pocket fees and expenses of attorneys, accountants and other professional
advisors to Day Runner and its  Subsidiaries,  and of attorneys  to  Wasserstein
Perella & Co.  Limited,  for  services  rendered in  connection  with the Tender
Offer.

     "Term  Loan"  means the Loan  outstanding  hereunder  pursuant  to  Section
2.1(e).

     "Term Loan Amount" has the meaning set forth in Section 2.1(e).

     "Term Loan Interest  Reserve  Account" has the meaning set forth in Section
5.14.

     "Term Loan Maturity Date" means September 30, 2001.

     "to the best knowledge of" means, when modifying a representation, warranty
or other statement of any Person,  that the fact or situation  described therein
is known by the Person (or, in the case of a Person other than a natural Person,
known by any Senior Officer of that Person) making the representation,  warranty
or other  statement,  or with the exercise of reasonable due diligence under the
circumstances  (in accordance  with the standard of what a reasonable  Person in
similar  circumstances would have done) would have been known by the Person (or,
in the case of a Person other than a natural Person,  would have been known by a
Senior Officer of that Person).

     "Topps" means Topps of England Limited, a company incorporated with limited
liability under the laws of England and Wales and a Subsidiary of Filofax Group.

     "type",  when  used with  respect  to any Loan,  means the  designation  of
whether such Loan is an Alternate Base Rate Loan or a Eurodollar Rate Loan.

     "Wholly-Owned  Subsidiary" means a Subsidiary of any Borrower,  100% of the
capital  stock  or  other  equity  interest  of  which  is  owned,  directly  or
indirectly, by any Borrower, except for director's qualifying shares required by
applicable Laws.

     1.2 Use of Defined  Terms.  Any defined term used in the plural shall refer
to all members of the relevant class,  and any defined term used in the singular
shall refer to any one or more of the members of the relevant class.

     1.3 Accounting Terms. All accounting terms not specifically defined in this
Agreement shall be construed in conformity with, and all financial data required
by this  Agreement  to be  submitted by the  Borrowers,  or any of them,  to the
Administrative Agent or the Lenders,  shall be prepared in conformity with, GAAP
applied on a  consistent  basis,  except as  otherwise  specifically  prescribed
herein.  In the event that GAAP changes  during the term of this  Agreement such
that the covenants  contained in Sections 6.12 through  6.15,  inclusive,  would
then be  calculated  in a different  manner,  (a) the  Borrowers and the Lenders
agree to negotiate in good faith to amend this Agreement in such respects as are
necessary to conform those  covenants as criteria for  evaluating the Borrowers'
financial  condition to substantially  the same criteria as were effective prior
to such change in GAAP and (b) the Borrowers shall be deemed to be in compliance
with the covenants contained in the aforesaid Sections if and to the extent that
the Borrowers  would have been in compliance  therewith  under GAAP as in effect
immediately prior to such change,  but shall have the obligation to deliver each
officer's  certificate set forth in Section 7.1 to the Administrative  Agent and
the  Lenders,  on  the  dates  therein  specified,  with  an  attached  detailed
reconciliation  demonstrating  such compliance and setting forth the differences
in calculation of such covenants  under GAAP as amended as compared with GAAP as
in effect immediately prior to such change.

     1.4  Rounding.  Any  financial  ratios  required  to be  maintained  by the
Borrowers  pursuant  to this  Agreement  shall be  calculated  by  dividing  the
appropriate  component by the other component,  carrying the result to one place
more  than the  number  of  places  by which  such  ratio is  expressed  in this
Agreement  and  rounding  the result up or down to the  nearest  number  (with a
round-up  if there is no  nearest  number) to the number of places by which such
ratio is expressed in this Agreement.

     1.5 Exhibits and Schedules.  All Exhibits and Schedules to this  Agreement,
either  as  originally  existing  or as the  same  may  from  time  to  time  be
supplemented, modified or amended, are incorporated herein by this reference.

     1.6  Miscellaneous  Terms. The term "or" is disjunctive;  the term "and" is
conjunctive.  The term  "shall"  is  mandatory;  the term  "may" is  permissive.
Masculine terms also apply to females;  feminine terms also apply to males.  The
term "including" is by way of example and not limitation.

                                    Article 2
                           LOANS AND LETTERS OF CREDIT

     2.1 Loans

          (a) Revolving Loans.  Subject to the terms and conditions set forth in
     this  Agreement,  at any time and from time to time from the Effective Date
     through the Banking Day prior to the  Revolving  Loan Maturity  Date,  each
     Lender shall,  pro rata  according to and limited by that Lender's Pro Rata
     Share of the Revolving  Commitment as then in effect,  make Revolving Loans
     to each  Revolving  Loan  Borrower in such amounts as such  Revolving  Loan
     Borrower may request such that,  after giving  effect to any  repayments of
     Revolving Loans and Letter of Credit  reimbursement  obligations and Tender
     Offer Notes made on the same Banking Day (or for which  provision  has been
     made for  payment  on the same  Banking  Day  that is  satisfactory  to the
     Administrative  Agent in its sole and absolute discretion) do not cause the
     sum of (i) the  aggregate  outstanding  principal  amount of the  Revolving
     Loans plus (ii) the Aggregate Exposure Amount of all outstanding Letters of
     Credit  plus (iii) the Swing  Line  Outstandings  to exceed  the  Revolving
     Commitment;  provided,  however, that at no time shall the sum with respect
     to a  single  Revolving  Loan  Borrower  of (i) the  aggregate  outstanding
     principal  amount of the Revolving  Loans to such  Revolving  Loan Borrower
     plus (ii) the Aggregate Exposure Amount of all Letters of Credit issued for
     the account of such  Revolving  Loan Borrower plus (iii) in the case of Day
     Runner, the Swing Line Outstandings,  exceed such Revolving Loan Borrower's
     Revolving Loan Sublimit.  Syndicated Loans  outstanding  under the Existing
     Credit  Agreement on the Effective  Date (other than the Tender Offer Loans
     made to Day Runner and Bidco under the  Existing  Credit  Agreement)  shall
     automatically,   without  further  action,   continue  as  Revolving  Loans
     outstanding  under this  Agreement.  Subject to the  limitations  set forth
     herein,  each Revolving Loan Borrower may borrow,  repay and reborrow under
     the Revolving Commitment without premium or penalty.

          (b) Intentionally Omitted.

          (c) Notice of Borrowing in Respect of Revolving  Loans. The applicable
     Borrower shall give the Administrative Agent a notice in the form set forth
     hereto as Exhibit H (a "Notice of Borrowing")  not later than (x) 8:00 A.M.
     (California  time)  on the  date  (which  must  be a  Banking  Day)  of any
     Revolving  Loan  requested  as an Alternate  Base Rate Loan,  (y) 9:00 A.M.
     (California  time) at least three Eurodollar  Banking Days before the first
     day of the  applicable  Interest  Period with respect to any Revolving Loan
     requested as a Eurodollar Rate Loan and (z) 9:00 A.M. (California time) not
     later than four Foreign  Currency  Banking Days before the first day of the
     applicable  Foreign  Currency  Period with  respect to any  Revolving  Loan
     requested  as a Foreign  Currency  Loan.  Such  Notice of  Borrowing  shall
     specify (i) the requested  date of such  Revolving  Loan,  which shall be a
     Banking  Day in the case of an  Alternate  Base Rate  Loan or a  Eurodollar
     Banking Day in the case of a Eurodollar  Rate Loan,  (ii) the type of Loan,
     (iii) the amount of such Loan,  (iv) in the case of a Eurodollar Rate Loan,
     the Interest  Period for such Loan,  (v) in the case of a Foreign  Currency
     Loan, the Foreign  Currency and the Foreign  Currency Period for such Loan,
     and (vi) in reasonable detail satisfactory to the Administrative Agent, the
     anticipated  use of proceeds of such Revolving  Loan. A Notice of Borrowing
     shall be irrevocable upon the Administrative Agent's receipt thereof.

          (d) Minimum  Amounts with respect to Revolving  Loans.  Each Revolving
     Loan that is requested  as an Alternate  Base Rate Loan (other than a Swing
     Line Loan) shall be in a principal  amount not less than  $500,000 and in a
     multiple of $100,000. Each Revolving Loan that is requested as a Eurodollar
     Rate Loan shall be in a principal  amount not less than $3,000,000 and in a
     multiple of $1,000,000.  Each Revolving Loan that is requested as a Foreign
     Currency  Loan shall be in a  principal  amount  not less than the  Foreign
     Currency Equivalent of $3,000,000 and in a multiple of $1,000,000.

          (e) Term Loans.  Prior to the Effective  Date, the Lenders,  on one or
     more occasions, made Tender Offer Loans to Day Runner and to Bidco pursuant
     to the Existing Credit Agreement,  in the aggregate  principal amount equal
     to  the  Foreign  Currency  Equivalent  of  $90,443,666.20,  all  of  which
     continues to be  outstanding  on the date hereof (the "Term Loan  Amount").
     The Tender Offer Loans  outstanding under the Existing Credit Agreement are
     hereby  reclassified as Term Loans made to Day Runner or Bidco, as the case
     may be, and shall  continue to be  outstanding  under this  Agreement.  The
     principal  amount of the Term  Loans  owing to each  Lender is set forth on
     Schedule 2.1 hereto.  The  Borrowers may repay or prepay Term Loans without
     premium or penalty  (except as provided in Section 3.7 or 3.8), and amounts
     so repaid or prepaid may not be reborrowed.

     2.2 Conversion/Continuation of Loans.

          (a)  Subject to  Section  3.7 (and with  respect  to Foreign  Currency
     Loans,  Sections 2.3 and 3.8),  the Borrowers  shall have the option (i) to
     convert  at any  time all or any part of  outstanding  any Loan  that is an
     Alternate Base Rate Loan (other than Swing Line Loans) to a Eurodollar Rate
     Loan or a Foreign  Currency  Loan;  (ii) to convert  all or any part of any
     outstanding  Loan that is a Eurodollar  Rate Loan having an Interest Period
     which expires on the same date to an Alternate  Base Rate Loan or a Foreign
     Currency Loan on such expiration date; (iii) to continue all or any part of
     any  outstanding  Eurodollar  Rate Loan  having an  Interest  Period  which
     expires  on the same date as a  Eurodollar  Rate Loan,  and the  succeeding
     Interest  Period of such continued  Loan shall commence on such  expiration
     date;  (iv) to convert  all or any part of any  outstanding  Loan that is a
     Foreign  Currency Loan having an Interest  Period which expires on the same
     date to an  Alternate  Base  Rate  Loan or a  Eurodollar  Rate Loan on such
     expiration  date;  or (v) to  continue  all or any part of any  outstanding
     Foreign  Currency Loan having an Interest  Period which expires on the same
     date as a Foreign Currency Loan, and the succeeding Interest Period of such
     continued Loan shall commence on such expiration date;  provided,  however,
     no such  outstanding  Loan may be  continued  as, or be  converted  into, a
     Eurodollar  Rate Loan or a Foreign  Currency Loan if an Event of Default or
     Default has occurred and is  continuing;  provided  further that Day Runner
     shall convert each DRC Loan into a Loan  denominated in Dollars by no later
     than the expiration of the Foreign  Currency  Period in effect with respect
     to such Loan as of the Effective  Date. Any conversion or  continuation  of
     Loans under this Section  2.2(a) (other than a Loan to be converted into an
     Alternate  Base Rate Loan or a DRC  Loan)  shall be in a minimum  amount of
     $3,000,000  and in  integral  multiples  of  $1,000,000  in  excess of that
     amount.

          (b) To convert or continue a Loan under Section 2.2(a),  the Borrowers
     shall  deliver a Notice of  Conversion/Continuation  to the  Administrative
     Agent no later than 9:00 A.M.  (California time) at least three (3) Banking
     Days in advance of the proposed  conversion/continuation  date. A Notice of
     Conversion/Continuation      shall     specify     (i)     the     proposed
     conversion/continuation  date  (which  shall be a  Banking  Day),  (ii) the
     principal amount of the Loan to be converted/continued,  (iii) whether such
     Loan  shall  be  converted  and/or  continued,  and  (iv) in the  case of a
     conversion  to, or  continuation  of, a  Eurodollar  Rate Loan or a Foreign
     Currency Loan, the requested  Interest Period.  Promptly after receipt of a
     Notice  of   Conversion/Continuation   under  this  Section   2.2(b),   the
     Administrative  Agent shall  notify each  Lender by telex or  telecopy,  or
     other     similar    form    of     transmission,     of    the    proposed
     conversion/continuation.   Any   Notice  of   Conversion/Continuation   for
     conversion to, or  continuation  of, a Loan shall be  irrevocable,  and the
     Borrowers shall be bound to convert or continue in accordance therewith.

     2.3 Foreign Currency Loans.

     Subject to the limitations contained in Sections 2.1 and 2.2 above, (x) the
Term Loans in respect of which  Bidco is the  Borrower  may be Foreign  Currency
Loans denominated in Euros or British pounds sterling and (y) Revolving Loans in
an  aggregate  principal  amount up to the Foreign  Currency  Equivalent  of the
Foreign  Currency  Limitation  may, at the election of the Borrowers,  be one or
more Foreign Currency Loans. With respect to Foreign Currency Loans:

          (a) All principal of, and interest on, any Foreign Currency Loan shall
     be payable in the same currency as that Foreign Currency Loan;

          (b) Each Foreign Currency Loan shall be due and payable on the earlier
     of (A) the last  day of the  related  Foreign  Currency  Period  or (B) the
     Revolving Loan Maturity Date or the Term Loan Maturity Date, as applicable;

          (c)  Determination  of credit  availability  under Section  2.1(a) and
     2.1(b), as of any date, if there are then any outstanding  Foreign Currency
     Loans or Foreign Currency Letters of Credit,  shall be based on the Foreign
     Currency Equivalent thereof as of such date;

          (d) The Requisite Lenders may suspend the obligation of the Lenders to
     make Foreign  Currency Loans with respect to a particular  Foreign Currency
     if the Requisite  Lenders  determine  that current or  reasonably  expected
     market conditions for that Foreign Currency are unusually  unstable or make
     it unlawful,  impossible or impracticable  for the Lenders to fund or hedge
     their obligations with respect to a Foreign Currency Loan;

          (e)  Concurrently  with (i) any Notice of Borrowing  with respect to a
     Revolving Loan requested to be made as a Foreign  Currency Loan or (ii) any
     Notice of Conversion/Continuation  with respect to any Loan requested to be
     continued as or converted  into a Foreign  Currency  Loan,  the  requesting
     Borrower  shall pay to the  Administrative  Agent,  for the  account of the
     Lenders pro rata in  accordance  with their Pro Rata Share of the Revolving
     Commitment or the Term Loans, as applicable, a processing fee of $2,500;

          (f)  Unless  the  Administrative   Agent  and  the  Requisite  Lenders
     otherwise  consent,  no more than ten (10)  Foreign  Currency  Periods  and
     Interest  Periods with respect to  Eurodollar  Loans shall exist at any one
     time; and

          (g) the applicable  Borrower shall execute and deliver,  to any Lender
     requesting it, a promissory note payable in the applicable Foreign Currency
     in a form  consistent  with this Agreement  covering that Lender's Pro Rata
     Share of any Foreign Currency Loan.

     2.4 Type of Loans.

          (a) If no Notice of Conversion/Continuation has been made with respect
     to any Loan within the  requisite  notice  period set forth in Section 2.2,
     prior to the end of the Interest Period for any outstanding Eurodollar Rate
     Loan,  then on the last day of such  Interest  Period,  such Loan  shall be
     automatically  converted  into an  Alternate  Base  Rate  Loan in the  same
     amount.

          (b) Each Loan (other than a Foreign Currency Loan) shall constitute an
     Alternate Base Rate Loan unless  properly  designated as a Eurodollar  Rate
     Loan pursuant to the provisions of Section 2.2.

          (c) With respect to any Eurodollar Rate Loan, on the date which is two
     (2) Eurodollar Banking Days before the first day of the applicable Interest
     Period,  the  Administrative  Agent shall confirm its  determination of the
     applicable  Eurodollar Rate (which determination shall be conclusive in the
     absence of manifest  error) and  promptly  shall give notice of the same to
     the applicable  Borrower and the Lenders by telephone or telecopier (and if
     by telephone, promptly confirmed by telecopier).

          (d) Nothing contained herein shall require any Lender to fund any Loan
     in the Designated Eurodollar Market.

     2.5 Funding of Loans.

          (a)  Promptly  following  receipt  of  a  Notice  of  Borrowing,   the
     Administrative Agent shall notify each Lender participating in such Loan by
     telephone  or  telecopier  (and  if by  telephone,  promptly  confirmed  by
     telecopier)  of the date and type of the  Revolving  Loan,  the  applicable
     Foreign  Currency,  the  applicable  Interest  Period or  Foreign  Currency
     Period, and that Lender's share of the Revolving Loan.

          (b) Not later than 11:00 A.M.,  California time, on the date specified
     for any Loan  (which  must be a Banking  Day),  each  Lender  participating
     therein  shall  make  available  its  share  of  such  Revolving  Loan,  in
     immediately  available funds (if a Foreign Currency Loan, in the applicable
     Foreign   Currency)   available   to  the   Administrative   Agent  at  the
     Administrative   Agent's  Office.   Upon  satisfaction  or  waiver  of  the
     applicable  conditions  set forth in  Article 8, the  Administrative  Agent
     shall (i) apply the funds so  received  from the Lenders to repay all Swing
     Line  Loans (if any)  then  outstanding,  together  with  interest  accrued
     thereon,  and (ii) credit the remainder of such funds to the  Concentration
     Account or disburse  such  remainder  as may be directed by the  applicable
     Borrower.

          (c) Unless the  Administrative  Agent shall have been  notified by any
     Lender no later than 11:00 A.M. on the Banking Day of the proposed  funding
     by the Administrative Agent of any Revolving Loan that such Lender does not
     intend to make available to the Administrative  Agent such Lender's portion
     of the total amount of such Loan, the Administrative  Agent may assume that
     such Lender has made such amount available to the  Administrative  Agent on
     the date of the Loan and the  Administrative  Agent may, in  reliance  upon
     such assumption,  make available to the applicable Borrower a corresponding
     amount.  If the  Administrative  Agent  has  made  funds  available  to the
     applicable Borrower based on such assumption and such corresponding  amount
     is not in fact made available to the  Administrative  Agent by such Lender,
     the  Administrative  Agent shall be entitled to recover such  corresponding
     amount  on  demand  from  such  Lender.  If such  Lender  does not pay such
     corresponding  amount  forthwith  upon the  Administrative  Agent's  demand
     therefor,  the  Administrative  Agent  promptly shall notify the applicable
     Borrower and the applicable Borrower shall pay such corresponding amount to
     the Administrative  Agent. The Administrative  Agent also shall be entitled
     to  recover  from such  Lender  interest  on such  corresponding  amount in
     respect  of each  day  from the date  such  corresponding  amount  was made
     available  by the  Administrative  Agent to such  Borrower to the date such
     corresponding  amount is recovered by the  Administrative  Agent, at a rate
     per annum equal to the daily  Federal Funds Rate.  Nothing  herein shall be
     deemed to relieve  any Lender from its  obligation  to fulfill its share of
     the   Revolving   Commitment   or  to   prejudice   any  rights  which  the
     Administrative Agent or the applicable Borrower may have against any Lender
     as a result of any default by such Lender hereunder.

         2.6      Notes.

          (a) Each  Borrower's  obligation to repay (i) the  Revolving  Loans of
     each Lender shall be evidenced by a single note, in substantially  the form
     of Exhibit D-1 hereto, payable to the order of such Lender (each such Note,
     a "Revolving Loan Note"), and each Borrower's  obligation to repay the Term
     Loan of each Lender shall be evidenced by a single note,  in  substantially
     the form of Exhibit D-2 hereto,  payable to the order of such Lender  (each
     such note,  a "Term Loan  Note").  Each  reference  in this  Agreement to a
     "Note"  or the  "Notes"  of such  Lender  shall be  deemed  to refer to and
     include any or all of such Revolving Loan Notes and Term Loan Notes, as the
     context may require.

          (b) Each  Lender  may, by notice to the  applicable  Borrower  and the
     Administrative  Agent,  request  that its  Alternate  Base Rate Loans,  its
     Eurodollar  Rate Loans  and/or its Foreign  Currency  Loans be evidenced by
     separate  Notes.  Each  such  Note  shall be in  substantially  the form of
     Exhibit D-1 or D-2 hereto, as applicable, with appropriate modifications to
     reflect  the fact that it  evidences  solely  the  relevant  kind of Loans.
     Unless a Lender has  received a separate  promissory  note  evidencing  its
     share of a Foreign  Currency  Loan pursuant to Section 2.3 and this Section
     2.6(b),  the Loans made by each Lender as part of a Foreign  Currency  Loan
     shall be evidenced by that Lender's  Revolving Loan Note or Term Loan Note,
     as the case may be, with the references  therein to "Dollars"  being deemed
     references  to the Foreign  Currency  which is the subject of such  Foreign
     Currency Loan.  Each reference in this Agreement to a "Note" or the "Notes"
     of such  Lender  shall be deemed to refer to and include any or all of such
     Notes, as the context may require.

     2.7 Letters of Credit.

          (a) Subject to the terms and conditions  hereof,  at any time and from
     time to time from the  Effective  Date  through the Banking Date that is 30
     days prior to the Revolving  Loan Maturity  Date,  the Issuing Lender shall
     issue  such  Letters  of Credit  under  the  Revolving  Commitment  as each
     Borrower may request by a Request for Letter of Credit;  provided  that (i)
     after giving  effect to such Letter of Credit and any  repayments  of Loans
     made, or  satisfaction of Obligations in respect of Letters of Credit made,
     on the same Banking Day, (A) the sum of (1) the aggregate  principal amount
     of Revolving Loans  outstanding,  plus (2) the Aggregate Exposure Amount of
     all outstanding  Letters of Credit, plus (3) the Swing Loan Outstandings do
     not  exceed the  Revolving  Commitment  and (B) with  respect to any single
     Borrower,  the sum of (1) the aggregate  principal  amount of the Revolving
     Loans  to such  Borrower  plus (2) the  Aggregate  Exposure  Amount  of all
     outstanding  Letters of Credit issued for the account of such Borrower plus
     (3) as  applicable,  the Swing Loan  Outstandings  to such  Borrower do not
     exceed such  Borrower's Loan Sublimit,  (ii) the Aggregate  Exposure Amount
     under all outstanding Letters of Credit shall not exceed  $15,000,000;  and
     (iii) with  respect to a Request  for  Letter of Credit  with  respect to a
     Foreign  Currency  Letter  of  Credit,  the  Issuing  Lender  shall  not be
     obligated to issue the Foreign  Currency Letter of Credit with respect to a
     particular Foreign Currency if and so long as the Issuing Lender determines
     that current or  reasonably  expected  market  conditions  for that Foreign
     Currency are  unusually  unstable or would make it unlawful,  impossible or
     impracticable for the Issuing Lender to fund or hedge its obligations under
     the Foreign Currency Letter of Credit.  For purposes of the foregoing,  the
     aggregate  principal amount of Loans outstanding and the Aggregate Exposure
     Amount of  outstanding  Letters of  Credit,  to the  extent  consisting  of
     Foreign   Currency   Loans  and   Foreign   Currency   Letters  of  Credit,
     respectively, shall be based on the Foreign Currency Equivalents thereof as
     of the Banking Day immediately preceding the date of the Request for Letter
     of  Credit.  Each  Letter of Credit  shall be in a form  acceptable  to the
     Issuing  Lender.  Unless  all the  Lenders  otherwise  consent in a writing
     delivered  to the  Administrative  Agent,  the term of any Letter of Credit
     shall not exceed one (1) year (subject to extension in accordance  with the
     terms  thereof;  provided  that all  conditions  precedent to issuance of a
     Letter of Credit are  satisfied in connection  with any such  extension) or
     extend  beyond the  Revolving  Loan  Maturity  Date.  The Letters of Credit
     outstanding under the Existing Credit Agreement on the Effective Date shall
     automatically,  without  further  action,  continue  as  Letters  of Credit
     outstanding  under this  Agreement.  (b) Each  Request for Letter of Credit
     shall be submitted to the Issuing Lender, with a copy to the Administrative
     Agent,  at least two (2)  Banking  Days  prior to the date  upon  which the
     related Letter of Credit is proposed to be issued. The Administrative Agent
     shall promptly notify the Issuing Lender whether such Request for Letter of
     Credit,  and the issuance of a Letter of Credit pursuant thereto,  conforms
     to the requirements of this Agreement. Upon issuance of a Letter of Credit,
     the Issuing Lender shall promptly notify the Administrative  Agent, and the
     Administrative  Agent shall promptly notify the Lenders,  of the amount and
     terms thereof.

          (c) Upon the  issuance  of a Letter of Credit,  each  Lender  shall be
     deemed to have purchased a pro rata  participation in such Letter of Credit
     from the Issuing  Lender in an amount equal to that Lender's Pro Rata Share
     of the maximum amount  available for drawing  thereunder.  Without limiting
     the  scope and  nature  of each  Lender's  participation  in any  Letter of
     Credit,  to the extent that the Issuing  Lender has not been  reimbursed by
     Borrowers for any payment  required to be made by the Issuing  Lender under
     any Letter of Credit, each Lender shall, pro rata according to its Pro Rata
     Share,  reimburse  the  Issuing  Lender  through the  Administrative  Agent
     promptly upon demand for the amount of such payment. The obligation of each
     Lender  to  so  reimburse   the  Issuing   Lender  shall  be  absolute  and
     unconditional  and shall not be affected by the  occurrence  of an Event of
     Default or any other occurrence or event. Any such reimbursement  shall not
     relieve or otherwise  impair the obligation of the  applicable  Borrower to
     reimburse  the  Issuing  Lender for the amount of any  payment  made by the
     Issuing  Lender  under any  Letter  of Credit  together  with  interest  as
     hereinafter provided.

          (d) Each  Borrower  agrees to pay to the  Issuing  Lender  through the
     Administrative  Agent an amount  equal to any  payment  made by the Issuing
     Lender with respect to each Letter of Credit with respect to such  Borrower
     within  one  (1)  Banking  Day  after  demand  made by the  Issuing  Lender
     therefor,  together  with  interest  on such  amount  from  the date of any
     payment made by the Issuing Lender at the rate applicable to Alternate Base
     Rate Loans for two (2)  Banking  Days after  demand and  thereafter  at the
     Default  Rate.  The  principal  amount of any such payment shall be used to
     reimburse the Issuing Lender for the payment made by it under the Letter of
     Credit and, to the extent that the Lenders have not  reimbursed the Issuing
     Lender pursuant to Section 2.7(c),  the interest amount of any such payment
     shall be for the  account  of the  Issuing  Lender.  Each  Lender  that has
     reimbursed the Issuing  Lender  pursuant to Section 2.7(c) for its Pro Rata
     Share of any payment  made by the Issuing  Lender  under a Letter of Credit
     shall  thereupon  acquire a pro rata  participation,  to the extent of such
     reimbursement,  in the claim of the Issuing  Lender  against the applicable
     Borrower for  reimbursement  of principal  and interest  under this Section
     2.7(d) and shall share, in accordance with that pro rata participation,  in
     any principal payment made by the applicable  Borrower with respect to such
     claim and in any interest payment made by the applicable Borrower (but only
     with respect to periods  subsequent to the date such Lender  reimbursed the
     Issuing Lender) with respect to such claim.

          (e) Each Borrower may, pursuant to a Notice of Borrowing, request that
     Revolving Loans be made pursuant to Section 2.1(a) to provide funds for the
     payment  required by Section  2.7(d) and, for this purpose,  the conditions
     precedent  set forth in Article 8 shall not  apply.  The  proceeds  of such
     Revolving  Loans shall be paid directly to the Issuing  Lender to reimburse
     it for the payment made by it under the Letter of Credit.

          (f) If a Borrower fails to make the payment required by Section 2.7(d)
     within the time period therein set forth, in lieu of the  reimbursement  to
     the Issuing  Lender under Section 2.7(c) the Issuing Lender may (but is not
     required to),  without notice to or the consent of such Borrower,  instruct
     the Administrative Agent to cause Loans to be made by the Lenders under the
     Revolving Commitment in an aggregate amount equal to the amount paid by the
     Issuing Lender with respect to that Letter of Credit and, for this purpose,
     the  conditions  precedent  set forth in  Article 8 shall  not  apply.  The
     proceeds  of such Loans shall be paid  directly  to the  Issuing  Lender to
     reimburse it for the payment made by it under the Letter of Credit.

          (g) The issuance of any supplement, modification,  amendment, renewal,
     or extension to or of any Letter of Credit shall be treated in all respects
     the same as the issuance of a new Letter of Credit.

          (h) The obligation of each Borrower to reimburse to the Issuing Lender
     the amount of any payment  made by the Issuing  Lender  under any Letter of
     Credit shall be absolute,  unconditional, and irrevocable. Without limiting
     the foregoing,  each Borrower's obligations shall not be affected by any of
     the following circumstances:

               (i) any lack of validity or enforceability  prior  to its  stated
     expiration  date of the  Letter of  Credit,  this  Agreement,  or any other
     agreement or instrument relating thereto;

              (ii)  any  amendment  or waiver of  or any  consent to  departure
from the Letter of Credit, this Agreement,  or any other agreement or instrument
relating thereto, with or without the consent of such Borrower;

             (iii) the existence of any claim, setoff, defense, or other rights
which such  Borrower  may have  at  any time  against the  Issuing  Lender,  the
Administrative  Agent or any Lender, any beneficiary of the Letter of Credit (or
any  persons or  entities  for whom any such  beneficiary  may be acting) or any
other Person,  whether in connection with the Letter of Credit,  this Agreement,
or any  other  agreement  or  instrument  relating  thereto,  or  any  unrelated
transactions;

             (iv)  any  demand,  statement,  or  any other  document  presented
under the 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;

               (v)  the  existence,  character,  quality, quantity,  condition,
value or delivery of any  Property  purported  to be  represented  by  documents
presented in connection with any Letter of Credit or any difference  between any
such Property and the character,  quality, quantity, condition, or value of such
Property as described in such documents;

              (vi)    the time,  place,  manner,  order or contents of shipments
or deliveries of Property as described in documents presented in connection with
any  Letter of Credit  or the  existence,  nature  and  extent of any  insurance
relative thereto;

              (vii)   the  solvency  or  financial  responsibility  of any party
issuing any documents in connection with a Letter of Credit;

             (viii)any failure or delay in notice of shipments or arrival of any
Property;

               (ix)    any error in the transmission of any message  relating to
a Letter of Credit, or any delay or interruption in any such message;

                (x)    any error,  neglect or default  of any  correspondent  of
the Issuing Lender in connection with a Letter of Credit;

                (xi)  any   consequence   arising   from   acts  of  God,   war,
insurrection,  civil unrest, disturbances,  labor disputes, emergency conditions
or other causes beyond the control of the Issuing Lender;

                (xii) the form, accuracy, genuineness or legal effect of any
contract  or  document  referred  to in any document submitted  to  the  Issuing
Lender in connection with a Letter of Credit; and

                (xiii)  where the Issuing Lender has acted in good faith and
observed general banking usage, any other circumstances whatsoever.

          (i) The Issuing Lender shall be entitled to the protection accorded to
     the Administrative Agent pursuant to Section 10.6.

          (j) The Uniform  Customs and  Practice  for  Documentary  Credits,  as
     published  in its most  current  version  by the  International  Chamber of
     Commerce,  shall be deemed a part of this  Section  and shall  apply to all
     Letters of Credit to the extent not inconsistent with applicable Law.

          (k) No action  taken or omitted in good  faith by the  Issuing  Lender
     under or in  connection  with any Letter of Credit,  if taken or omitted in
     the  absence  of gross  negligence  or willful  misconduct,  shall put such
     Issuing Bank under any resulting liability to any Lender, any Borrower, any
     of the Borrowers' Subsidiaries or, so long as it is not issued in violation
     of Section 2.7(a),  relieve any Lender of its obligations hereunder to such
     Issuing  Lender.  Solely as between the Issuing Lender and the Lenders,  in
     determining  whether to pay under any Letter of Credit,  the Issuing Lender
     shall have no  obligation  to the  Lenders  other than to confirm  that any
     documents  required to be delivered under a Letter of Credit appear to have
     been  delivered  and that  they  appear on their  face to  comply  with the
     requirements of such Letter of Credit.

     2.8 Voluntary Reduction of Revolving Commitment.

     Day Runner shall have the right, at any time and from time to time, without
premium or penalty, upon at least five (5) Banking Days' prior written notice by
a Responsible Official of Day Runner to the Administrative Agent, voluntarily to
reduce,  permanently  and  irrevocably,  in  aggregate  principal  amounts in an
integral  multiple of $1,000,000 but not less than $5,000,000,  a portion of the
then  undisbursed  portion of the  Revolving  Commitment,  or to  terminate  the
Revolving  Commitment,  provided  that the  Revolving  Commitment  shall  not be
terminated while any Revolving Loans or Swing Line Loans remain outstanding. The
Administrative  Agent  shall  promptly  notify the Lenders of any  reduction  or
termination of the Revolving Commitment under this Section.

     2.9 Swing Line Loans.

          (a) The Swing Line Lender  shall from time to time from the  Effective
     Date through the day prior to the  Revolving  Loan Maturity Date make Swing
     Line Loans to Day Runner (i) in such  amounts as Day Runner may  request or
     (ii) in connection with the  Administrative  Agent's "Credit Sweep" program
     (or other program having  comparable  features and procedures)  pursuant to
     which, at the close of business on each Banking Day, if there then would be
     a debit balance in the  Concentration  Account,  the Swing Line Lender will
     credit the  Concentration  Account in an amount  such  that,  after  giving
     effect to such credit, the Concentration Account reflects a positive credit
     balance of $1.00 (and each such credit  shall  constitute a Swing Line Loan
     for all purposes of this Agreement),  provided that (A) after giving effect
     to such  Swing  Line  Loan,  the  Swing  Line  Outstandings  do not  exceed
     $10,000,000,  and (B) without the consent of all of the  Lenders,  no Swing
     Line Loan may be made during the  continuation  of a Default or an Event of
     Default of which the Swing Line  Lender has  knowledge.  Day Runner  hereby
     requests  and  authorizes  the Swing Line  Lender to make from time to time
     Swing Line Loans in the manner set forth in clause (ii)  above.  Day Runner
     may borrow,  repay and  reborrow  Swing Line Loans under this  Section 2.9.
     Unless notified to the contrary by the Swing Line Lender,  borrowings under
     the Swing Line  (other  than  pursuant to clause (ii) above) may be made in
     amounts which are integral multiples of $100,000 upon telephonic request by
     a Responsible  Official of Day Runner made to the Administrative  Agent not
     later than 1:00 P.M.,  California time, on the Banking Day of the requested
     borrowing (which telephonic  request shall be promptly confirmed in writing
     by  telecopier by  transmission  of a Notice of Swing Line Loan in the form
     attached hereto as Exhibit I). Promptly after receipt of such a request for
     borrowing,  the Administrative Agent shall provide telephonic  verification
     to the Swing  Line  Lender  that,  after  giving  effect  to such  request,
     availability   for  Loans  will  exist  under  Section   2.1(a)  (and  such
     verification shall be promptly confirmed in writing by telecopier).  If Day
     Runner  instructs the Swing Line Lender to debit its demand deposit account
     at the Swing Line  Lender in the amount of any  payment  with  respect to a
     Swing Line Loan,  or the Swing Line Lender  otherwise  receives  repayment,
     after 1:00 P.M.,  California  time, on a Banking Day, such payment shall be
     deemed  received  on the next  Banking  Day.  The Swing Line  Lender  shall
     promptly  notify the  Administrative  Agent of the Swing Loan  Outstandings
     each time there is a change therein.

          (b) Swing Line Loans  shall bear  interest at a  fluctuating  rate per
     annum equal to the Alternate Base Rate plus the Applicable Base Rate Margin
     in effect  from time to time.  Interest  shall be payable  on each  Monthly
     Payment  Date or otherwise as may be specified by the Swing Line Lender and
     in any event on the  Revolving  Loan Maturity  Date.  The Swing Line Lender
     shall be  responsible  for  invoicing  Day  Runner for such  interest.  The
     interest payable on Swing Line Loans is solely for the account of the Swing
     Line Lender (subject to clauses (d) and (e) below).

          (c) Each  Swing  Line Loan shall be  repayable  on the  earlier of (i)
     demand  therefor made by the Swing Line Lender and (ii) the Revolving  Loan
     Maturity Date.

          (d) Upon the making of a Swing Line Loan,  each Lender shall be deemed
     to have purchased from the Swing Line Lender a participation  therein in an
     amount equal to that  Lender's Pro Rata Share of the  Revolving  Commitment
     times the amount of the Swing Line Loan.  Within one (1)  Banking Day after
     demand made by the Swing Line Lender,  each Lender shall,  according to its
     Pro Rata Share of the Revolving  Commitment,  promptly provide to the Swing
     Line  Lender  its  purchase  price  therefor  in an  amount  equal  to  its
     participation  therein.  The  obligation  of each  Lender to so provide its
     purchase price to the Swing Line Lender shall be absolute and unconditional
     and shall  not be  affected  by the  occurrence  of a  Default  or Event of
     Default;  provided  that no Lender  shall be  obligated to purchase its Pro
     Rata  Share  of  (i)  Swing  Line  Loans  to the  extent  that  Swing  Line
     Outstandings are in excess of $10,000,000 and (ii) any Swing Line Loan made
     (without the consent of all of the Lenders)  during the  continuation  of a
     Default or an Event of Default of which the Swing Line Lender had knowledge
     at the time such Swing Line Loan was made. Each Lender that has provided to
     the Swing Line Lender the purchase price due for its participation in Swing
     Line Loans shall thereupon acquire a pro rata participation,  to the extent
     of such payment,  in the claim of the Swing Line Lender  against Day Runner
     for  principal and interest and shall share,  in  accordance  with that pro
     rata  participation,  in any  principal  payment  made by Day  Runner  with
     respect to such claim and in any  interest  payment made by Day Runner (but
     only with  respect to periods  subsequent  to the date such Lender paid the
     Swing Line Lender its purchase price) with respect to such claim.

          (e) Upon any demand for payment of the Swing Line  Outstandings by the
     Swing Line Lender (unless Day Runner has made other arrangements reasonably
     acceptable  to the  Swing  Line  Lender  to repay in full  the  Swing  Line
     Outstandings),  Day Runner  shall  request a  Revolving  Loan  pursuant  to
     Section 2.1 sufficient to repay all Swing Line Outstandings  (and, for this
     purpose,  Section  2.1(d)  shall not  apply).  In the event that Day Runner
     fails to request a Revolving  Loan within the time specified by Section 2.1
     on any such date,  the  Administrative  Agent may,  but is not required to,
     without notice to or the consent of any Borrower,  cause Revolving Loans to
     be  made  by the  Lenders  under  the  Revolving  Commitment,  pro  rata in
     accordance   with  their   respective  Pro  Rata  Share  of  the  Revolving
     Commitment,  in an aggregate  amount  sufficient to repay in full the Swing
     Line  Outstandings.  The conditions  precedent set forth in Article 8 shall
     not apply to  Revolving  Loans to be made by the  Lenders  pursuant to this
     Section 2.9(e). The proceeds of such Revolving Loans shall be paid directly
     to the Swing Line Lender for application to the Swing Line Outstandings.

     2.10 Guaranty.

     The Obligations shall be guaranteed  pursuant to the Subsidiary  Guaranties
and the Borrower Guaranties.

     2.11 Extension of Revolving Loan Maturity Date.

     In the event that the Revolving  Commitment  has not been  terminated on or
before  October 9, 2000 (such date,  the "Extension  Determination  Date"),  the
Revolving  Loan Maturity Date shall be extended,  automatically  and without any
further  action by the  Borrowers or the Lenders,  to September 30, 2001, if and
only if:

          (a) the  Funded  Senior  Debt  Ratio as of the last day of the  Fiscal
     Quarter  ended June 30,  2000,  as reflected  in the  financial  statements
     delivered by Day Runner on or before the Extension  Determination Date, and
     certified by the chief financial officer of Day Runner, is not greater than
     5.50 to 1.00;

          (b) the Fixed Charge  Coverage  Ratio as of the last day of the Fiscal
     Quarter  ended June 30,  2000,  as reflected  in the  financial  statements
     delivered by Day Runner on or before the Extension  Determination Date, and
     certified by the chief  financial  officer of Day Runner,  is not less than
     1.10 to 1.00;

          (c) EBITDA for the period of four  consecutive  Fiscal Quarters ending
     on June 30, 2000, as reflected in the financial statements delivered by Day
     Runner on or before the Extension  Determination Date, and certified by the
     chief financial officer of Day Runner, is not less than $18,000,000;

          (d) no  Default  or  Event  of  Default  shall  have  occurred  and be
     continuing on the Extension Determination Date; and

          (e) each of the  representations  and  warranties of the Borrowers and
     Subsidiary  Guarantors  set forth in the Loan  Documents  shall be true and
     complete on and as of the Extension  Determination Date with the same force
     and  effect  as  if  made  on  and  as  of  such  date  (or,  if  any  such
     representation  or warranty is  expressly  stated to have been made as of a
     specific date, as of such specific date).

                                    Article 3
                                PAYMENTS AND FEES

     3.1 Interest.

          (a) (i)  Interest  will accrue on each  Alternate  Base Rate Loan (and
     each  other  Obligation  (other  than  Eurodollar  Rate  Loans and  Foreign
     Currency  Loans)  not paid when due) at the  Alternate  Base Rate in effect
     from time to time plus Applicable Base Rate Margin;

          (ii)  Interest  will accrue on each  Eurodollar  Rate Loan during each
     Interest  Period  applicable  thereto  at  the  Adjusted   Eurodollar  Rate
     applicable during such Interest Period plus the Applicable  Eurodollar Rate
     Margin in effect from time to time; and

          (iii)  Interest will accrue on each Foreign  Currency Loan during each
     Foreign  Currency Period  applicable  thereto at the Foreign  Currency Rate
     applicable for such Foreign  Currency Loan plus the  Applicable  Eurodollar
     Rate Margin in effect from time to time.

          (b) Interest shall be payable on the outstanding  principal  amount of
     each Loan or other Obligation from the date such Loan is made or such other
     Obligation is due and payable, as the case may be, until payment in full is
     made,  and shall  accrue and be payable at the rates set forth or  provided
     for herein before and after Default, before and after maturity,  before and
     after  judgment,  and before and after the  commencement  of any proceeding
     under any Debtor Relief Law.

          (c) Interest accrued on each Alternate Base Rate Loan shall be due and
     payable  on (i) each  Monthly  Payment  Date and  (ii) the  Revolving  Loan
     Maturity Date or the Term Loan Maturity Date, as applicable. Each change in
     the interest  rate under this Section 3.1 due to a change in the  Alternate
     Base Rate shall take effect simultaneously with the corresponding change in
     the  Alternate  Base  Rate.  Each  change in the  interest  rate under this
     Section 3.1 due to a change in the  Applicable  Base Rate Margin shall take
     effect  simultaneously with the corresponding change in the Applicable Base
     Rate Margin.

          (d) Interest  accrued on each Eurodollar Rate Loan which is for a term
     of three  months or less  shall be due and  payable  on the last day of the
     related Interest Period.  Interest on each other Eurodollar Rate Loan shall
     be due and  payable on the date which is three  months  after the date such
     Eurodollar  Rate  Loan was made  (and,  in the  event  that the  applicable
     Interest  Period is longer than six months,  every three months  thereafter
     through the last day of the Interest  Period).  Each change in the interest
     rate  under  this  Section  3.1 due to a change in the  Eurodollar  Reserve
     Percentage shall take effect  simultaneously with the corresponding  change
     in the  Eurodollar  Reserve  Percentage.  Each change in the interest  rate
     under this Section 3.1 due to a change in the  Applicable  Eurodollar  Rate
     Margin shall take effect  simultaneously  with the corresponding  change in
     the Applicable Eurodollar Rate Margin.

          (e) Interest accrued on each Foreign Currency Loan which is for a term
     of three  months or less  shall be due and  payable  on the last day of the
     related Foreign  Currency  Period.  Interest on each other Foreign Currency
     Loan shall be due and payable on the date which is three  months  after the
     date such Foreign  Currency Loan was made. Each change in the interest rate
     under this Section 3.1 due to a change in the  Applicable  Eurodollar  Rate
     Margin shall take effect  simultaneously  with the corresponding  change in
     the Applicable Eurodollar Rate Margin.

          (f) Default Interest.  Notwithstanding the rates of interest specified
     in Section 3.1(a), effective immediately upon the occurrence of an Event of
     Default,  and for as long  thereafter  as such  Event of  Default  shall be
     continuing, the principal balance or all Loans, and the amount of all other
     Obligations,  shall bear  interest at a rate which is two percent  (2%) per
     annum in excess of the rate of interest otherwise  applicable  hereunder to
     such Loans or other  Obligations  from time to time, to the fullest  extent
     permitted  by  applicable  Laws.  Accrued  and unpaid  interest on past due
     amounts  (including,  without  limitation,  interest on past due  interest)
     shall be compounded monthly, on the last day of each calendar month, to the
     fullest  extent  permitted by  applicable  Laws,  and shall be payable upon
     demand.

     3.2 Principal.

          (a) If not sooner paid,  the principal  amount of the Revolving  Loans
     shall be payable as follows:

               (i) the amount,  if any, by which the sum of (A) the  Revolving
     Loans plus(B) the Aggregate Exposure Amount of all outstanding Letters of
     Credit plus (C)  the  Swing  Line  Outstandings at any time  exceeds  the
     then applicable  Revolving  Commitment  shall be payable immediately  (with
     the aggregate principal amount of the Revolving Loans and Aggregate
     Exposure Amount of  outstanding Letters of Credit, to the extent consisting
     of Foreign Currency Loans and Foreign Currency Letters of Credit,
     respectively, being based on the Foreign Currency Equivalents thereof as of
     the last Banking Day in each calendar month);

               (ii)   in the event and on each  occasion  that any  Borrower  or
     any Subsidiary of  a  Borrower issues  any  equity security or  incurs  any
     Indebtedness  after the date hereof  (other  than  Indebtedness  permitted
     pursuant to Section  6.10(a)(as  to  refinancings),  (b),  (c),  (d),  (e),
     (h) or (i)), including without limitation any Subordinated Obligations, the
     Borrowers shall substantially  concurrently  with (in any event not later
     than the third Banking Day next following) the issuance of such  securities
     or the incurrence of such Indebtedness,  prepay the Loans in an aggregate
     amount equal to 100% of the Net Cash Issuance  Proceeds therefrom to prepay
     the outstanding Loans in accordance with Section 3.2(c);

               (iii) at the end of each  Banking  Day,  all funds on deposit in
     the Concentration  Account (after giving effect to the transfer to the Term
     Loan Interest Reserve Account required  pursuant to Section 5.14(c)) shall
     be applied first to reduce  the Swing  Line  Outstandings, and then,  after
     the principal balance of the Swing Line Outstandings is reduced to zero, to
     prepay Revolving Loans, and then,  after  the  principal  balance of  the
     Revolving Loans Outstandings is reduced to zero, to prepay Term Loans;

                (iv)  not  later  than  the  third  Banking  Day  following  the
     completion  of any  Disposition  (other  than any  Disposition  permitted
     under Section  6.2 (other  than under  Section  6.2(c)),  the  Borrowers
     shall make a prepayment of the Loans in an amount equal to 100% of the Net
     Cash Sale Proceeds of such Disposition in accordance with Section 3.2(c);
     and

                 (v)  the principal of the Loans then  outstanding  shall in any
     event be payable on  the  Revolving  Loan  Maturity Date  or the Term Loan
     Maturity Date,  as  applicable,  and the  Revolving  Commitment  shall
     terminate  on the Revolving Loan Maturity Date.

          (b) The principal of the Loans,  or any of them,  may, at any time and
     from time to time,  voluntarily  be paid or  prepaid,  in whole or in part,
     without premium or penalty, except that any payment or prepayment of all or
     any part of any  Eurodollar  Rate Loan or  Foreign  Currency  Loan on a day
     other than the last day of the applicable  Interest Period shall be subject
     to Sections 3.7 and 3.8.  Each  prepayment  of principal on any  Eurodollar
     Rate Loan or any Foreign  Currency Loan shall be  accompanied by payment of
     interest  accrued to the date of payment on the amount of  principal  paid.
     With respect to each  prepayment of Loans pursuant to this Section  3.2(b),
     such  prepayments  shall be applied first to prepay  outstanding  Revolving
     Loans,  and then,  after the principal  balance of the  Revolving  Loans is
     reduced to zero, to prepay outstanding Term Loans, and in each such case in
     accordance with Section 3.2(d).

          (c) Prepayments of Loans made pursuant to Section  3.2(a)(ii) shall be
     applied first to prepay the outstanding  principal amount of the Term Loans
     and then, after the principal balance of the Term Loans is reduced to zero,
     to reduce the  Revolving  Commitment  (and,  to the extent  applicable,  to
     prepay the Revolving Loans pursuant to Section 3.2(a)(i)),  in each case in
     accordance with Section 3.2(d).  The Revolving  Commitment shall be reduced
     in  an  amount  equal  to  the  prepayment  required  pursuant  to  Section
     3.2(a)(iv) (or, if the Revolving Commitment then is less than the amount of
     the required  prepayment,  to zero),  and such prepayment  shall be applied
     first to make any  prepayment  of Revolving  Loans  required  under Section
     3.2(a)(i) as a result of such  reduction and then to the principal  balance
     of the Term Loans.

          (d)  Subject to  Section  3.2(b),  amounts  applied  pursuant  to this
     Section 3.2 to prepay  Loans shall be applied  first to reduce  outstanding
     Alternate  Base  Rate  Loans.   Any  amounts   remaining  after  each  such
     application  shall be applied to first to reduce  Eurodollar Rate Loans and
     then to reduce Foreign Currency Loans, in each case subject to Sections 3.7
     and 3.8.

     3.3 Commitment Fee.

     From the Effective  Date through the  Revolving  Loan  Maturity  Date,  the
Borrowers shall pay to the Administrative Agent, for the ratable accounts of the
Lenders pro rata according to their Pro Rata Share of the Revolving  Commitment,
a commitment  fee equal to the sum of (a) the daily  Applicable  Commitment  Fee
Rate per annum times the average daily amount by which the Revolving  Commitment
exceeds  the  sum of (i) the  average  daily  principal  amount  of  outstanding
Revolving  Loans (but  excluding the  principal  amount of any Swing Line Loans)
plus (ii) the average daily Aggregate Exposure Amount of all outstanding Letters
of Credit. The average daily principal amount of outstanding Revolving Loans, in
the case of Foreign  Currency Loans,  and the average daily  Aggregate  Exposure
Amount of outstanding Letters of Credit, in the case of Foreign Currency Letters
of Credit,  shall be determined for this purpose for each calendar month of each
Fiscal Quarter based on the Foreign Currency  Equivalents thereof as of the last
Banking Day in each such calendar  month.  The  commitment  fee shall be payable
quarterly in arrears on each  Quarterly  Payment Date and on the Revolving  Loan
Maturity Date.

     3.4 Amendment Fee and Administrative Agent's Fee.

     In  consideration  of the  agreements  of the  Lenders  contained  in  this
Agreement, Day Runner agrees to pay to the Administrative Agent, for the account
of each Lender executing this Agreement, on the Effective Date, an amendment fee
(the  "Amendment  Fee")  in an  amount  equal  to  0.50%  of the sum of (x) such
Lender's  Term  Loan  and (y) such  Lender's  Pro  Rata  Share of the  Revolving
Commitment  as in effect on the  Effective  Date,  after  giving  effect to this
Agreement.  In addition, Day Runner agrees to pay to the Administrative Agent on
the  Effective  Date the  Administrative  Agent's  Fee and other  advisory  fees
described in the fee letter dated as of October 12, 1999 from the Administrative
Agent to, and acknowledged and accepted by, Day Runner (such fees, together with
the Amendment  Fees and the  Administrative  Agent's Fee, the "Fees").  The Fees
shall be payable in  immediately  available  funds and, once paid,  shall not be
refundable.

     3.5 Letter of Credit Fees.

     With  respect  to each  Letter  of  Credit,  each  Borrower  shall  pay the
following fees:

          (a) to the Administrative Agent for the ratable account of the Lenders
     in  accordance  with their Pro Rata Share of the  Revolving  Commitment,  a
     standby letter of credit fee in an amount equal to the  Applicable  Standby
     Letter of Credit Fee Rate as of the date of the  issuance of such Letter of
     Credit times the face amount of such Standby  Letter of Credit  through the
     termination  or  expiration  of such  Standby  Letter  of  Credit,  payable
     quarterly in advance,  which the Administrative Agent shall promptly pay to
     the Lenders; and

          (b) concurrently with each issuance, negotiation, drawing or amendment
     of each Letter of Credit, to the Issuing Lender for the sole account of the
     Issuing Lender,  issuance,  negotiation,  drawing and amendment fees in the
     amounts  set forth  from  time to time as the  Issuing  Lender's  published
     scheduled fees for such services.

     All fees with  respect  to a  Foreign  Currency  Letter of Credit  shall be
payable in Dollars  based on the Foreign  Currency  Equivalent as of the Banking
Day immediately  preceding the date of the Request for Letter of Credit. Each of
the fees  payable with respect to Letters of Credit under this Section is earned
when due and is nonrefundable.

     3.6 Increased Commitment Costs.

     If any Lender shall determine in good faith that the introduction after the
Closing Date of any  applicable  law,  rule,  regulation or guideline  regarding
capital adequacy,  or any change therein or any change in the  interpretation or
administration  thereof by any central bank or other Governmental Agency charged
with the interpretation or administration  thereof, or compliance by such Lender
(or its Eurodollar  Lending Office) or any corporation  controlling such Lender,
with any request,  guideline or directive regarding capital adequacy (whether or
not having the force of Law) of any such  central  bank or other  authority  not
imposed as a result of such  Lender's  or such  corporation's  failure to comply
with any other Laws,  affects or would affect the amount of capital  required or
expected to be maintained  by such Lender or any  corporation  controlling  such
Lender and  (taking  into  consideration  such  Lender's  or such  corporation's
policies with respect to capital  adequacy and such Lender's  desired  return on
capital)  determines in good faith that the amount of such capital is increased,
or the rate of return on capital is  reduced,  in an amount  deemed  material by
such Lender in its sole  discretion,  as a consequence of its obligations  under
this Agreement,  then, within five (5) Banking Days after demand of such Lender,
the Borrowers  shall pay to such Lender,  from time to time as specified in good
faith by such Lender, additional amounts sufficient to compensate such Lender in
light  of  such  circumstances,  to the  extent  reasonably  allocable  to  such
obligations under this Agreement;  provided that, before making any such demand,
each Lender  agrees to use  reasonable  efforts  (consistent  with its  internal
policy  and  legal  and  regulatory   restrictions)  to  designate  a  different
Applicable Lending Office if the making of such designation would avoid the need
for, or materially  reduce the amount of, such  increased cost and would not, in
the reasonable  judgment of such Lender,  be otherwise  disadvantageous  to such
Lender,  provided  that such  Borrower  shall not be  obligated  to pay any such
amount  which arose prior to the date which is one hundred and eighty (180) days
preceding  the date of such demand or is  attributable  to periods  prior to the
date which is one  hundred  and eighty  (180)  days  preceding  the date of such
demand.  Each Lender's  determination of such amounts shall be conclusive in the
absence of manifest error.

     3.7 Eurodollar Costs and Related Matters.

          (a) In the event that any  Governmental  Agency  imposes on any Lender
     any  reserve  or   comparable   requirement   (including   any   emergency,
     supplemental  or other reserve) with respect to the Eurodollar  Obligations
     hereunder of that Lender,  the Borrowers  shall pay that Lender within five
     (5) Banking Days after  demand all amounts  necessary  to  compensate  such
     Lender  (determined as though such Lender's  Eurodollar  Lending Office had
     funded  100%  of its  Eurodollar  Rate  Loan in the  Designated  Eurodollar
     Market) in respect of the  imposition  of such  reserve  requirements.  The
     Lender's determination of such amount shall be conclusive in the absence of
     manifest error.

          (b) If, after the date hereof,  the  existence  or  occurrence  of any
     Special Eurodollar Circumstance:

               (1) shall subject any Lender or its Eurodollar  Lending Office to
          any tax, duty or other charge or cost with respect to any Eurodollar
          Rate Loan, any of its Notes evidencing Eurodollar Rate Loans or its
          obligation to make Eurodollar Rate Loans, or shall change the basis of
          taxation of payments to any Lender attributable to the principal of or
          interest on any Eurodollar Rate Loan or any other amounts due under
          this Agreement in respect of any Eurodollar  Rate Loan,  any  of its
          Notes evidencing  Eurodollar Rate  Loans  or  its  obligation to make
          Eurodollar  Rate Loans,  excluding (i) taxes imposed on or  measured
          in whole or in part by  its  overall  net  income or net worth  by any
          jurisdiction  (or  political  subdivision  thereof)  in  which  it  is
          organized or maintains its  principal  office  or  Eurodollar  Lending
          Office and (ii) any withholding  taxes imposed by the United States of
          America for any period  with respect to which it has failed to provide
          the  Borrowers with the appropriate form or forms required by Section
          11.21, to the extent such forms are then required by applicable Laws;

              (2) shall impose,  modify  or  deem   applicable  any  reserve not
          applicable  or deemed  applicable  on the date  hereof  (including any
          reserve imposed  by the  Board of  Governors  of the  Federal  Reserve
          System, special deposit,capital or similar requirements against assets
          of, deposits with or for the  account of, or credit  extended  by, any
          Lender or its  Eurodollar  Lending Office); or

             (3)  shall  impose  on  any  Lender  or its  Eurodollar  Lending
          Office or the Designated  Eurodollar  Market any other  condition
          affecting any Eurodollar Rate Loan, any of its Notes  evidencing
          Eurodollar Rate Loans, its obligation to make Eurodollar Rate Loans or
          this Agreement, or shall otherwise affect any of the same;

     and the result of any of the foregoing, as determined in good faith by such
Lender, increases the cost in a material amount to such Lender or its Eurodollar
Lending Office of making or maintaining  any Eurodollar  Rate Loan or in respect
of any Eurodollar Rate Loan, any of its Notes  evidencing  Eurodollar Rate Loans
or its obligation to make Eurodollar Rate Loans or reduces the amount of any sum
received or  receivable  by such Lender or its  Eurodollar  Lending  Office with
respect to any Eurodollar Rate Loan, any of its Notes evidencing Eurodollar Rate
Loans or its obligation to make  Eurodollar  Rate Loans  (assuming such Lender's
Eurodollar  Lending  Office had funded 100% of its  Eurodollar  Rate Loan in the
Designated  Eurodollar Market),  then, within five (5) Banking Days after demand
by such  Lender  (with  a copy  to the  Administrative  Agent),  the  applicable
Borrower  shall pay to such  Lender  such  additional  amount or amounts as will
compensate  such Lender for such  increased  cost or  reduction  (determined  as
though such Lender's Eurodollar Lending Office had funded 100% of its Eurodollar
Rate Loans in the Designated  Eurodollar  Market);  provided that the applicable
Borrower  shall not be obligated to pay any such amount which arose prior to the
date which is one  hundred  and eighty  (180)  days  preceding  the date of such
demand or is  attributable to periods prior to the date which is one hundred and
eighty (180) days  preceding the date of such demand.  A statement of any Lender
claiming  compensation  under this subsection shall be conclusive in the absence
of manifest error.

          (c) If, after the date hereof,  the  existence  or  occurrence  of any
     Special  Eurodollar  Circumstance  shall,  in the good faith opinion of any
     Lender,  make it unlawful or impossible  for such Lender or its  Eurodollar
     Lending Office to make, maintain or fund its portion of any Eurodollar Rate
     Loan,  or  materially  restrict the authority of such Lender to purchase or
     sell, or to take deposits of, Dollars in the Designated  Eurodollar Market,
     or to determine or charge  interest rates based upon the  Eurodollar  Rate,
     and such  Lender  shall so  notify  the  Administrative  Agent,  then  such
     Lender's  obligation to make  Eurodollar  Rate Loans shall be suspended for
     the duration of such  illegality or  impossibility  and the  Administrative
     Agent  forthwith  shall give  notice  thereof to the other  Lenders and the
     Borrowers. Upon receipt of such notice, the outstanding principal amount of
     such  Lender's  Eurodollar  Rate  Loans,  together  with  accrued  interest
     thereon,  automatically  shall be converted to Alternate Base Rate Loans on
     either  (1) the last day of the  Eurodollar  Period(s)  applicable  to such
     Loans if such Lender may lawfully  continue to maintain and fund such Loans
     to such day(s) or (2) immediately if such Lender may not lawfully  continue
     to fund and maintain such Loans to such day(s), provided that in such event
     the  conversion  shall not be subject to payment of a prepayment  fee under
     Section  3.7(e).  Each  Lender  agrees to  endeavor  promptly to notify the
     applicable  Borrower  of  any  event  of  which  it has  actual  knowledge,
     occurring  after the Closing  Date,  which will cause that Lender to notify
     the  Administrative  Agent under this  Section,  and agrees to  designate a
     different Eurodollar Lending Office if such designation will avoid the need
     for such  notice and will not, in the good faith  judgment of such  Lender,
     otherwise be  disadvantageous  to such Lender. In the event that any Lender
     is unable,  for the reasons set forth above, to make,  maintain or fund its
     portion of any Eurodollar  Rate Loan, such Lender shall fund such amount as
     an  Alternate  Base Rate Loan for the same period of time,  and such amount
     shall be treated in all respects as an Alternate Base Rate Loan. Any Lender
     whose  obligation to make  Eurodollar  Rate Loans has been suspended  under
     this  Section  shall  promptly  notify  the  Administrative  Agent  and the
     Borrowers of the  cessation of the Special  Eurodollar  Circumstance  which
     gave rise to such suspension.

          (d) If, with respect to any proposed Eurodollar Rate Loan:

              (1)    the  Administrative  Agent reasonably  determines that, by
          reason of  circumstances  affecting the Designated  Eurodollar  Market
          generally that  are beyond  the reasonable control of the Lenders,
          deposits  in Dollars (in the applicable amounts) are not being offered
          to any Lender in the Designated Eurodollar Market for the applicable
          Interest Period; or

               (2)  the  Requisite  Lenders  advise the  Administrative  Agent
          that the Eurodollar Rate as determined by the Administrative Agent
          (i) does not represent the effective pricing to such Lenders for
          deposits in Dollars in the Designated Eurodollar Market in the
          relevant amount for the applicable Interest Period, or (ii) will not
          adequately and fairly reflect the cost to such Lenders of making the
          applicable Eurodollar Rate Loans; then the  Administrative  Agent
          forthwith shall give notice thereof to the Borrowers and the Lenders,
          whereupon until the Administrative  Agent notifies the Borrowers  that
          the circumstances giving rise to such suspension no longer exist, the
          obligation of the Lenders to make any future Eurodollar Rate Loans
          shall be suspended.

                    (e) Upon payment of any Eurodollar  Rate Loan (including as
          the result of a conversion required under Section 3.7(c)) on a day
          other than the last day in the applicable Interest Period (whether
          voluntarily,  involuntarily, by reason of acceleration, or otherwise),
          or upon the failure of a Borrower to borrow on the date or in the
          amount specified for a Eurodollar Rate Loan in any Notice of
          Borrowing, such  Borrower shall pay to the appropriate Lender  within
          five (5) Banking  Days after demand a fee (determined as though  100%
          of the Eurodollar Rate Loan, as the case may be, had been funded in
          the Designated Eurodollar Market) equal to the sum of:

                         (1) the  present value  of the  excess,  if any, of (i)
          the additional  interest  that  would  have  accrued  on the  amount
          prepaid or not borrowed at the applicable  Eurodollar  Rate if that
          amount had remained or been outstanding through the last day of the
          applicable Interest Period over (ii) the interest that the Lender
          could recover by placing such amount on deposit in the Designated
          Eurodollar Market for a period beginning on the date of the prepayment
          or failure  to borrow  and ending on the last day of the  applicable
          Interest Period (or, if no deposit rate quotation is available for
          such period, for the most  comparable  period  for  which a  deposit
          rate  quotation  may be obtained), discounted at the Federal Funds
          Rate; plus

                         (2) all out-of-pocket expenses incurred by  the  Lender
          reasonably attributable to such payment, prepayment or failure to
          borrow.

          Each  Lender's  determination  of the  amount  of any  prepayment  fee
     payable  under this Section  shall be conclusive in the absence of manifest
     error.

          (f) Each Lender agrees to endeavor promptly to notify the Borrowers of
     any event of which it has actual  knowledge,  occurring  after the  Closing
     Date, which will entitle such Lender to compensation pursuant to clause (a)
     or  clause  (b) of this  Section,  and  agrees  to  designate  a  different
     Eurodollar  Lending Office if such  designation  will avoid the need for or
     reduce  the  amount of such  compensation  and will not,  in the good faith
     judgment of such Lender,  otherwise be  disadvantageous to such Lender. Any
     request for compensation by a Lender under this Section shall set forth the
     basis upon which it has been determined that such an amount is due from the
     applicable  Borrower,  a calculation of the amount due, and a certification
     that the corresponding costs have been incurred by the Lender.

     3.8 Foreign Currency Costs and Related Matters.

          (a) In the event that any  Governmental  Agency  imposes on any Lender
     any reserve or comparable  requirement with respect to the Foreign Currency
     Loans hereunder of that Lender,  the Borrowers shall pay that Lender within
     five (5) Banking Days after demand all amounts necessary to compensate such
     Lender in respect of the  imposition  of such  requirements.  The  Lender's
     determination of such amount shall be conclusive in the absence of manifest
     error.

          (b) If, after the date  hereof,  the adoption of any Law or any change
     in the  interpretation  of  administration  of any Law (including,  without
     limitation,   the   imposition   of  any  currency   exchange   control  or
     restriction):

              (1)  shall subject any Lender or its Applicable Lending Office to
     any tax, duty or other charge or cost with respect to any Foreign Currency
     Loan,any of its Notes evidencing Foreign Currency Loans or its obligation
     to make Foreign Currency Loans, or shall change the basis of taxation of
     payments to any Lender attributable to the principal of or interest on any
     Foreign Currency Loan or any other amounts due under this Agreement in
     respect of any Foreign Currency Loan, any of its Notes evidencing Foreign
     Currency Loans or its obligation to make Foreign Currency Loans;

               (2)  shall  impose  on any  Lender  or its  Applicable  Lending
     Office or the Designated  Foreign Currency Market any other condition
     affecting any Foreign Currency Loan, any of its Notes  evidencing  Foreign
     Currency Loans, or its  obligation to make Foreign  Currency Loans or this
     Agreement, or shall otherwise affect any of the same;

and the  result of any of the  foregoing,  as  determined  in good faith by such
Lender,  increases the cost to such Lender or its Applicable  Lending Office, in
an amount  deemed by it to be  material,  of making or  maintaining  any Foreign
Currency  Loan or in  respect of any  Foreign  Currency  Loan,  any of its Notes
evidencing  Foreign  Currency Loans or its  obligation to make Foreign  Currency
Loans or reduces the amount of any sum received or  receivable by such Lender or
its Applicable  Lending Office with respect to any Foreign Currency Loan, any of
its Notes  evidencing  Foreign  Currency Loans or its obligation to make Foreign
Currency Loans,  then,  within five (5) Banking Days after demand by such Lender
(with a copy to the Administrative  Agent), the applicable Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender for
such  increased cost or reduction;  provided that the applicable  Borrower shall
not be  obligated  to pay any such amount which arose prior to the date which is
one  hundred  and eighty  (180)  days  preceding  the date of such  demand or is
attributable  to periods prior to the date which is one hundred and eighty (180)
days  preceding  the date of such  demand.  A statement  of any Lender  claiming
compensation  under  this  subsection  shall be  conclusive  in the  absence  of
manifest error.

          (c) If, after the date  hereof,  the adoption of any Law or any change
     in the  interpretation  of  administration  of any Law (including,  without
     limitation, the imposition of any currency exchange control or restriction)
     shall,  in the good  faith  opinion  of any  Lender,  make it  unlawful  or
     impracticable  for such Lender or its  Applicable  Lending  Office to make,
     maintain or fund its portion of any Foreign  Currency  Loan,  or materially
     restrict  the  authority  of such Lender to  purchase  or sell,  or to take
     deposits  of, the  relevant  Foreign  Currency  in the  Designated  Foreign
     Currency  Market,  or to determine or charge  interest rates based upon the
     Foreign  Currency Rate, and such Lender shall so notify the  Administrative
     Agent,  then such Lender's  obligation to make Foreign  Currency Rate Loans
     shall be suspended for the duration of such illegality or  impracticability
     and the  Administrative  Agent  forthwith  shall give notice thereof to the
     other  Lenders  and  the  Borrowers.  Upon  receipt  of  such  notice,  the
     outstanding  principal amount of such Lender's Foreign Currency Loans shall
     be repaid,  together with accrued interest thereon,  on either (1) the last
     day of the  Foreign  Currency  Period(s)  applicable  to such Loans if such
     Lender may lawfully continue to maintain and fund such Loans to such day(s)
     or (2)  immediately  if such Lender may not  lawfully  continue to fund and
     maintain  such  Loans  to such  day(s),  provided  that in such  event  the
     conversion  shall not be  subject  to  payment  of a  prepayment  fee under
     Section  3.7(f).  Each  Lender  agrees to  endeavor  promptly to notify the
     applicable  Borrower  of  any  event  of  which  it has  actual  knowledge,
     occurring  after the Closing  Date,  which will cause that Lender to notify
     the  Administrative  Agent under this  Section,  and agrees to  designate a
     different Applicable Lending Office if such designation will avoid the need
     for such  notice and will not, in the good faith  judgment of such  Lender,
     otherwise be  disadvantageous  to such Lender. In the event that any Lender
     is unable,  for the reasons set forth above, to make,  maintain or fund its
     portion of any Foreign  Currency  Rate Loan,  such  Lender  shall fund such
     amount as an Alternate Base Rate Loan for the same period of time, and such
     amount shall be treated in all respects as an Alternate Base Rate Loan. Any
     Lender  whose  obligation  to make  Foreign  Currency  Rate  Loans has been
     suspended under this Section shall promptly notify the Administrative Agent
     and  the  Borrowers  of the  cessation  of  the  Special  Foreign  Currency
     Circumstance which gave rise to such suspension.

          (d) If, with respect to any proposed Foreign Currency Loan:

               (1) the  Administrative  Agent reasonably  determines that, by
     reason  of  circumstances  affecting  the  Designated  Foreign  Currency
     Market generally that are beyond the reasonable control of the Lenders,
     deposits in the applicable  Foreign  Currency (in the applicable amount and
     for the applicable periods) are not being offered to any Lender in the
     Designated  Foreign Currency Market for the applicable Interest Period; or

             (2)      the  Requisite  Lenders  advise the  Administrative  Agent
     that the Foreign  Currency Rate as determined  by the Administrative  Agent
     (i)does not  represent  the effective  pricing to such Lenders for deposits
     in the applicable Foreign Currency in the Designated Foreign Currency
     Market in the relevant amount for the applicable Interest Period, or (ii)
     will not adequately and fairly reflect the cost to such  Lenders of making
     the applicable Foreign Currency Loans; then the Administrative Agent
     forthwith shall give notice thereof to the Borrowers and the Lenders,
     whereupon  until the  Administrative Agent  notifies  the  Borrowers  that
     the  circumstances  giving  rise  to such suspension  no longer  exist, the
     obligation of the Lenders to make any future Foreign Currency Loans shall
     be suspended.

          (e) Upon payment of any Foreign Currency Loan (including as the result
     of a conversion required under Section 3.8(c)) on a day other than the last
     day in the applicable Interest Period (whether voluntarily,  involuntarily,
     by reason of acceleration, or otherwise), or upon the failure of a Borrower
     to borrow on the date or in the  amount  specified  for a Foreign  Currency
     Rate  Loan in any  Notice  of  Borrowing,  such  Borrower  shall pay to the
     appropriate Lender within five (5) Banking Days after demand a fee equal to
     the sum of:

               (1) the present value of the excess, if any, of (i)the additional
     interest  that would have accrued on the amount  prepaid or not borrowed at
     the  applicable  Foreign  Currency Rate if that amount had remained or been
     outstanding  through the last day of the  applicable  Interest  Period over
     (ii) the interest  that the Lender could  recover by placing such amount on
     deposit in the Designated Foreign Currency Market for a period beginning on
     the date of the  prepayment or failure to borrow and ending on the last day
     of the  applicable  Interest  Period (or, if no deposit  rate  quotation is
     available  for such  period,  for the most  comparable  period  for which a
     deposit rate  quotation may be  obtained),  discounted at the Federal Funds
     Rate; plus

               (2)  all   out-of-pocket   expenses   incurred  by  the  Lender
     reasonably attributable to such payment, prepayment or failure to borrow.

               Each  Lender's  determination  of the  amount  of any  prepayment
     fee payable under this Section shall be conclusive in the absence of
     manifest error.

               (f) Each  Lender  agrees  to  endeavor  promptly  to  notify  the
          Borrowers  of any event of which it has  actual  knowledge,  occurring
          after the Closing Date, which will entitle such Lender to compensation
          pursuant  to clause (a) or clause (b) of this  Section,  and agrees to
          designate a different  Applicable  Lending Office if such  designation
          will avoid the need for or reduce the amount of such  compensation and
          will not, in the good faith  judgment  of such  Lender,  otherwise  be
          disadvantageous  to such  Lender.  Any request for  compensation  by a
          Lender under this Section  shall set forth the basis upon which it has
          been  determined  that  such an  amount  is due  from  the  applicable
          Borrower,  a calculation of the amount due, and a  certification  that
          the corresponding costs have been incurred by the Lender.

     3.9 Intentionally Omitted.

     3.10 Computation of Interest and Fees.

               (a) Interest based on the Alternate Base Rate hereunder  shall be
          computed  on the  basis  of a year of 365  days (or 366 days in a leap
          year) and paid for the  actual  number  of days  elapsed,  unless  the
          Alternate  Base Rate is  determined  by reference to the Federal Funds
          Rate, in which case the  Alternate  Base Rate shall be computed on the
          basis of a year of 360 days.  All  other  interest  and fees  shall be
          computed  on the  basis of a year of 360 days and paid for the  actual
          number of days elapsed. Interest shall accrue on each Loan for the day
          on which the Loan is made; interest shall not accrue on a Loan, or any
          portion  thereof,  for the day on which  the Loan or such  portion  is
          paid.  Any  Loan  that is  repaid  on the same day on which it is made
          shall bear  interest  for one day.  Notwithstanding  anything  in this
          Agreement to the  contrary,  interest in excess of the maximum  amount
          permitted by applicable laws shall not accrue or be payable  hereunder
          or under the Notes, and any amount paid as interest hereunder or under
          the Notes which would otherwise be in excess of such maximum permitted
          amount shall instead be treated as a payment of principal.

               (b) The  Administrative  Agent shall determine each interest rate
          applicable  to the Loans  hereunder and each  Commitment  Fee Rate and
          Applicable  Standby  Letter of Credit Fee  applicable  hereunder.  The
          Administrative  Agent shall give  prompt  notice to Day Runner and the
          relevant  Lenders  of each  interest  rate,  Commitment  Fee  Rate and
          Applicable  Standby  Letter  of  Credit  Fee so  determined,  and  its
          determination  thereof  shall be conclusive in the absence of manifest
          error.

     3.11 Non-Banking Days.

     If any  payment to be made by a Borrower  or any other Party under any Loan
Document shall come due on a day other than a Banking Day, payment shall instead
be considered due on the next  succeeding  Banking Day and the extension of time
shall be reflected in computing interest and fees.

     3.12 Manner and Treatment of Payments.

               (a) Each payment  hereunder (except payments pursuant to Sections
          3.6,  3.7,  3.8,  11.3,  11.11 and 11.22) or on the Notes or under any
          other Loan Document shall be made to the  Administrative  Agent at the
          Administrative  Agent's  Office for the account of each of the Lenders
          or the  Administrative  Agent,  as the  case  may be,  in  immediately
          available funds not later than 11:00 A.M.  California time, on the day
          of payment (which must be a Banking Day). All payments  received after
          such time,  on any Banking Day,  shall be deemed  received on the next
          succeeding  Banking Day.  The amount of all  payments  received by the
          Administrative   Agent  for  the  account  of  each  Lender  shall  be
          immediately paid by the Administrative  Agent to the applicable Lender
          in  immediately  available  funds and, if such payment was received by
          the Administrative Agent by 11:00 A.M.,  California time, on a Banking
          Day and not so made  available  to the  account  of a  Lender  on that
          Banking Day, the Administrative  Agent shall reimburse that Lender for
          the cost to such Lender of funding  the amount of such  payment at the
          Federal Funds Rate.  All payments shall be made in lawful money of the
          United  States of America,  except  that  payments  of  principal  and
          interest on Foreign  Currency  Loans,  and  reimbursement  payments in
          respect of Foreign  Currency  Letters of Credit,  shall be made in the
          Foreign  Currency of that Foreign  Currency  Loan or Foreign  Currency
          Letter of Credit.

               (b) Day Runner  hereby  authorizes  the  Administrative  Agent to
          debit (i) the Concentration  Account as of the date any payment of (A)
          principal  or  interest  with  respect  to the  Revolving  Loans,  (B)
          commitment  fee or (C) other  amount  payable by Day Runner under this
          Agreement is due in an amount  equal to such  payment  and/or (ii) the
          Term Loan  Interest  Reserve  Account as of the date of any payment of
          principal or interest or other amount payable with respect to the Term
          Loans is due in an amount  equal to such  payment.  Day Runner  hereby
          agrees  to take  such  steps  as are  necessary  to  assure  that  the
          Concentration  Account and/or the Term Loan Interest  Reserve Account,
          as the case may be, will, on each such date,  have a credit balance in
          immediately  available  funds at least  equal  to the  amount  of such
          payment.

               (c) Each  payment or  prepayment  on account of any Loan shall be
          applied  pro rata  according  to the  outstanding  Loans  made by each
          Lender comprising such Loan.

                  (d) Each  Lender  shall use its best  efforts to keep a record
(in  writing  or by an  electronic  data  entry  system) of Loans made by it and
payments received by it with respect to each of its Notes and such record shall,
as  against  the  Borrowers,  be  presumptive  evidence  of the  amounts  owing.
Notwithstanding the foregoing sentence, the failure by any Lender to keep such a
record shall not affect Borrower's obligation to pay the Obligations.

               (e) Each  payment of any amount  payable by any  Borrower  or any
          other Party under this  Agreement or any other Loan Document  shall be
          made free and clear of, and without reduction by reason of, any taxes,
          assessments  or other  charges  imposed  by any  Governmental  Agency,
          central bank or comparable  authority,  excluding (i) taxes imposed on
          or measured  in whole or in part by its overall net income,  net worth
          or the like by any jurisdiction (or political  subdivision thereof) in
          which it is organized or maintains its principal  office or Eurodollar
          Lending  Office and (ii) any  withholding  taxes imposed by the United
          States of America for any period  with  respect to which it has failed
          to provide the Borrowers with the  appropriate  form or forms required
          by Section  11.21,  to the  extent  such  forms are then  required  by
          applicable  Laws (all such  non-excluded  taxes,  assessments or other
          charges being hereinafter referred to as "Taxes").  To the extent that
          a Borrower is obligated by  applicable  Laws to make any  deduction or
          withholding  on account of Taxes from any amount payable to any Lender
          under this  Agreement,  such Borrower shall (i) make such deduction or
          withholding and pay the same to the relevant  Governmental  Agency and
          (ii) pay such  additional  amount to that  Lender as is  necessary  to
          result in that Lender's  receiving a net after-Tax amount equal to the
          amount to which  that  Lender  would  have been  entitled  under  this
          Agreement absent such deduction or withholding. If and when receipt of
          such payment  results in an excess payment or credit to that Lender on
          account of such Taxes,  that Lender shall promptly  refund such excess
          to the applicable Borrower.

     3.13 Funding Sources.

     Nothing in this Agreement  shall be deemed to obligate any Lender to obtain
the funds for any Loan in any  particular  place or  manner or to  constitute  a
representation  by any Lender that it has  obtained or will obtain the funds for
any Loan in any particular place or manner.

     3.14 Failure to Charge Not Subsequent Waiver.

     Any  decision  by the  Administrative  Agent or any  Lender  not to require
payment of any interest  (including  interest  arising under Section 3.9),  fee,
cost or other amount payable under any Loan Document, or to calculate any amount
payable by a  particular  method,  on any  occasion  shall in no way limit or be
deemed a waiver of the Administrative  Agent's or such Lender's right to require
full payment of any interest  (including  interest  arising  under Section 3.9),
fee, cost or other amount  payable under any Loan  Document,  or to calculate an
amount payable by another method that is not  inconsistent  with this Agreement,
on any other or subsequent occasion.

     3.15 Administrative Agent's Right to Assume Payments Will be Made.

     Unless the  Administrative  Agent  shall have been  notified  by a Borrower
prior to the date on which any payment to be made by such Borrower  hereunder is
due that such Borrower does not intend to remit such payment, the Administrative
Agent may,  in its  discretion,  assume that each  Borrower  has  remitted  such
payment when so due and the  Administrative  Agent may, in its discretion and in
reliance  upon such  assumption,  make  available to each Lender on such payment
date an  amount  equal to such  Lender's  share of such  assumed  payment.  If a
Borrower has not in fact remitted such payment to the Administrative Agent, each
Lender shall forthwith on demand repay to the Administrative Agent the amount of
such assumed  payment made  available to such  Lender,  together  with  interest
thereon in respect of each day from and  including the date such amount was made
available by the Administrative  Agent to such Lender to the date such amount is
repaid to the Administrative Agent at the Federal Funds Rate.

     3.16 Fee Determination Detail.

     The Administrative  Agent, and any Lender,  shall provide reasonable detail
to each Borrower  regarding the manner in which the amount of any payment to the
Administrative  Agent and the Lenders, or that Lender,  under Article 3 has been
determined, concurrently with demand for such payment.

     3.17 Survivability.

     All of each  Borrower's  obligations  under Sections 3.6, 3.7 and 3.8 shall
survive for the ninety (90) day period following the date on which the Revolving
Commitment  are  terminated  and all Loans  hereunder  are fully paid,  and each
Borrower  shall remain  obligated  thereunder for all claims under such Sections
made by any Lender to such Borrower prior to the expiration of such period.

     3.18 Application of Payments.

               (a) If an Event of Default occurs,  and the Revolving  Commitment
          is  terminated  and the  maturity of the  Obligations  is  accelerated
          pursuant to Section 9.2, the  Administrative  Agent shall,  so long as
          either of the Filofax Working Capital  Guaranties is in effect,  apply
          all  payments  in  respect  of any  Obligations  and all  proceeds  of
          Collateral in the following order:

                  (i)  first,  to pay  interest  on and  then  principal  of any
         portion of any Revolving Loans which the Administrative  Agent may have
         advanced on behalf of any Lender for which the Administrative Agent has
         not been reimbursed by such Lender or the Borrowers;

                  (ii)  second,  to pay  Obligations  in respect of any  expense
         reimbursements   (including   attorneys'   fees   and   disbursements),
         indemnities  and other similar  amounts then due to the  Administrative
         Agent or any Lender,

                  (iii)  third,  to pay,  pro  rata,  any  amounts  owing to the
         Administrative Agent or any Lender in respect of overdrafts and related
         liabilities  arising  from  treasury,  depository  or  cash  management
         services  provided to any of the  Borrowers or any of their  respective
         Subsidiaries  or  in  connection  with  any  automated  clearing  house
         transfer of funds;

                  (iv) fourth,  to pay  Obligations  in respect of any fees then
         due to the Administrative Agent, the Lenders and the Issuing Bank;

                  (v) fifth,  to pay  accrued and unpaid interest due in respect
          of the Loans;

                  (vi)sixth, to repay the outstanding  principal  amount of the
           Revolving Loans;

                  (vii) seventh,  to repay the outstanding  principal  amount of
         the Term Loans; and

                  (viii)   eighth,   to  the   ratable   payment  of  all  other
Obligations;

          provided,  however, if sufficient funds are not available to fund
          all payments to be made in respect of any of the Obligations described
          in any of the  foregoing  clauses (i) through  (viii),  the  available
          funds  being  applied  with  respect  to any such  Obligation  (unless
          otherwise  specified in such clause) shall be allocated to the payment
          of  such  Obligations   ratably,   based  on  the  proportion  of  the
          Administrative  Agent's  and  each  Lender's  or  the  Issuing  Bank's
          interest in the aggregate  outstanding  Obligations  described in such
          clauses;  and  provided,  further,  that, at any time that the Filofax
          Working Capital Guaranties are not in effect, the Administrative Agent
          shall  apply  all  payments  in  respect  of any  Obligations  and all
          proceeds of Collateral in such order as the  Administrative  Agent may
          determine in its sole and absolute discretion.

               (b) Each of the  Borrowers  hereby  waives  any  right  that such
          Borrower may have under Section  2822(a) of the California  Civil Code
          to designate how any payment received by the  Administrative  Agent or
          any Lender  (whether made by a Borrower or any  Subsidiary  Guarantor)
          with respect to the  Obligations  are applied  and/or which portion of
          the Obligations are reduced by such payment.

                                    Article 4
                         REPRESENTATIONS AND WARRANTIES

     The Borrowers, jointly and severally,  represent and warrant to the Lenders
that:

     4.1 Existence and Qualification; Power; Compliance With Laws.

     Each Borrower is a corporation  duly formed and validly  existing under the
Laws of its jurisdiction of incorporation.  Each Borrower incorporated under the
Laws of a  jurisdiction  within the United States is in good standing  under the
Laws of such jurisdiction of  incorporation.  Schedule 4.1 hereto correctly sets
forth the names,  form of legal  entity,  number of shares of capital  stock (or
other applicable unit of equity interest) issued and outstanding, and the record
owner thereof and jurisdictions of organization of all Borrowers.  Each Borrower
is duly qualified or registered to transact  business and is in good standing in
each other jurisdiction in which the conduct of its business or the ownership or
leasing of its Properties makes such  qualification  or registration  necessary,
except  where the failure so to qualify or register  and to be in good  standing
would not constitute a Material Adverse Effect.  Each Borrower has all requisite
power and authority to conduct its business, to own and lease its Properties and
to execute and deliver each Loan  Document to which it is a Party and to perform
its  Obligations.  All outstanding  shares of capital stock of each Borrower are
duly authorized,  validly issued,  fully paid and non-assessable,  and no holder
thereof has any enforceable  right of rescission  under any applicable  state or
federal  securities Laws. Each Borrower is in compliance with all Laws and other
legal requirements  applicable to its business, has obtained all authorizations,
consents, approvals, orders, licenses and permits from, and has accomplished all
filings,  registrations and qualifications with, or obtained exemptions from any
of the  foregoing  from,  any  Governmental  Agency that are  necessary  for the
transaction  of its  business,  except  where the  failure so to comply,  obtain
authorizations,  etc.,  file,  register,  qualify or obtain  exemptions does not
constitute a Material Adverse Effect.

     4.2  Authority;  Compliance  With  Other  Agreements  and  Instruments  and
Government Regulations.

     The execution, delivery and performance by each Borrower and the Subsidiary
Guarantors  of the  Loan  Documents  to which  each is a Party  have  been  duly
authorized by all necessary corporate action, and do not and will not:

               (a) Require any consent or approval  not  heretofore  obtained of
          any partner,  director,  stockholder,  security  holder or creditor of
          such Party;

               (b)  Violate  or  conflict  with any  provision  of such  Party's
          charter, articles of incorporation or bylaws, as applicable;

               (c) Result in or require the creation or  imposition  of any Lien
          (other than  pursuant to the Loan  Documents)  upon or with respect to
          any Property now owned or leased or hereafter acquired by such Party;

               (d) Violate any Requirement of Law applicable to such Party;

               (e) Result in a breach of or constitute a default under, or cause
          or permit the acceleration of any obligation owed under, any indenture
          or loan or credit  agreement or any other  Contractual  Obligation  to
          which  such  Party  is a party or by  which  such  Party or any of its
          Property is bound or affected;  and such Party is not in violation of,
          or default under,  any  Requirement of Law or Contractual  Obligation,
          including without limitation the provisions of any indenture,  loan or
          credit agreement described in Section 4.2(e).

     4.3 No Governmental Approvals Required.

     Except as previously obtained or made, no authorization, consent, approval,
order,  license or permit from, or filing,  registration or qualification  with,
any  Governmental  Agency is or will be required to  authorize  or permit  under
applicable Laws the execution,  delivery and performance by each Borrower or any
Subsidiary Guarantor of the Loan Documents to which it is a Party.

     4.4 Subsidiaries.

               (a) Schedule 4.4 hereto  correctly sets forth the names,  form of
          legal entity,  number of shares of capital stock (or other  applicable
          unit of equity interest) issued and outstanding,  and the record owner
          thereof and  jurisdictions of organization of all Subsidiaries of each
          Borrower as of the date hereof. Unless otherwise indicated in Schedule
          4.4, all of the  outstanding  shares of capital  stock,  or all of the
          units of equity interest,  as the case may be, of each such Subsidiary
          are owned of  record  and  beneficially  by a  Borrower,  there are no
          outstanding  options,  warrants or other  rights to  purchase  capital
          stock of any such Subsidiary,  and all such shares or equity interests
          so owned are duly  authorized,  validly  issued,  fully  paid and non-
          assessable,  and were issued in compliance  with all applicable  state
          and federal  securities  and other Laws, and are free and clear of all
          Liens and Rights of Others, except for Permitted Encumbrances.

               (b) Each  Subsidiary  is a  corporation  duly  formed and validly
          existing  under the Laws of its  jurisdiction  of  organization.  Each
          Subsidiary  incorporated  under the Laws of a jurisdiction  within the
          United States is in good standing under the Laws of such  jurisdiction
          of incorporation.  Each Subsidiary is duly qualified to do business as
          a  foreign  organization  and is in  good  standing  as  such  in each
          jurisdiction  in which the conduct of its business or the ownership or
          leasing of its Properties makes such  qualification  necessary (except
          where the failure to be so duly  qualified  and in good  standing does
          not constitute a Material Adverse Effect), and has all requisite power
          and  authority  to  conduct  its  business  and to own and  lease  its
          Properties.

               (c) Each  Subsidiary  is in  compliance  with all Laws and  other
          requirements   applicable   to  its  business  and  has  obtained  all
          authorizations,  consents,  approvals,  orders,  licenses, and permits
          from,  and  each  such  Subsidiary  has   accomplished   all  filings,
          registrations,  and qualifications  with, or obtained  exemptions from
          any of the foregoing from, any Governmental  Agency that are necessary
          for the transaction of its business, except where the failure to be in
          such  compliance,  obtain such  authorizations,  consents,  approvals,
          orders, licenses, and permits, accomplish such filings, registrations,
          and qualifications,  or obtain such exemptions,  does not constitute a
          Material Adverse Effect.

     4.5 Financial Statements.

     Day  Runner  has  furnished  to the  Administrative  Agent (a) the  audited
consolidated  financial  statements of Day Runner and its  Subsidiaries  for the
Fiscal Year ended June 30, 1998,  (b) the unaudited  consolidated  balance sheet
and statement of operations  of Day Runner and its  Subsidiaries  for the Fiscal
Year ended June 30, 1999 and (c) the  unaudited  consolidated  balance sheet and
statement of  operations of Day Runner and its  Subsidiaries  for the months and
portion  of the  Fiscal  Year ended  July 31,  1999 and  August  31,  1999.  The
financial  statements  described  in clause (a) fairly  present in all  material
respects  the  financial  condition,  statement  of cash  flows and  changes  in
financial position,  and the balance sheet and statement of operations described
in clause (b) fairly  present in all material  respects the financial  condition
and results of  operations of Day Runner and its  Subsidiaries  as of such dates
and for such periods in conformity with GAAP consistently applied, subject only,
in the case of clause (b), to normal year-end accruals and audit adjustments and
footnotes.

     4.6 No Other Liabilities; No Material Adverse Changes.

     Each Borrower and its  Subsidiaries  do not have any material  liability or
material contingent  liability required under GAAP to be reflected or disclosed,
and not  reflected  or  disclosed,  in the balance  sheet  described  in Section
4.5(a),  other  than  liabilities  and  contingent  liabilities  arising  in the
ordinary  course  of  business  since  the  date of such  financial  statements.
Schedule 4.6 sets forth all Funded Debt of Day Runner and its Subsidiaries as of
the  Effective  Date. As of the Effective  Date,  no  circumstance  or event has
occurred that constitutes a Material Adverse Effect since June 30, 1999.

     4.7 Title to Property.

     Each Borrower and its Subsidiaries  have valid title to the Property (other
than assets which are the subject of a Capital  Lease  Obligation)  reflected in
the balance sheet described in Section  4.5(a),  other than items of Property or
exceptions to title which are in each case immaterial and Property  subsequently
sold or disposed of in the ordinary  course of business.  Such  Property is free
and clear of all Liens, other than Liens described in Schedule 4.7 and Permitted
Encumbrances.

     4.8 Intangible Assets.

     Each Borrower and its Subsidiaries  own, or possess the right to use to the
extent necessary in their respective businesses, all material trademarks,  trade
names, copyrights, patents, patent rights, computer software, licenses and other
Intangible  Assets  that are used in the  conduct  of  their  businesses  as now
operated,  and no such  Intangible  Asset,  conflicts with the valid  trademark,
trade name,  copyright,  patent,  patent right or Intangible  Asset of any other
Person to the extent that such conflict constitutes a Material Adverse Effect.

     4.9 Public Utility Holding Company Act.

     No Borrower nor any Subsidiary of any Borrower is a "holding company", or a
"subsidiary  company" of a "holding  company",  or an  "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.

     4.10 Litigation.

     There are no actions,  suits,  proceedings or investigations  pending as to
which any Borrower or any of its Subsidiaries  have been served or have received
notice  or,  to the  best  knowledge  of any  Borrower,  threatened  against  or
affecting any Borrower or any of its Subsidiaries or any Property of any of them
before any  Governmental  Agency,  which such  actions,  suits,  proceedings  or
investigations,  individually or in the aggregate,  could reasonably be expected
to have a Material Adverse Effect.

     4.11 Binding Obligations.

     Each of the Loan  Documents to which any Borrower or any of the  Subsidiary
Guarantors is a Party will, when executed and delivered by such Borrower or such
Subsidiary Guarantor, constitute the legal, valid and binding obligation of such
Borrower or such Subsidiary Guarantor, enforceable against such Borrower or such
Subsidiary  Guarantor in accordance with its terms, except as enforcement may be
limited by Debtor Relief Laws or equitable  principles  relating to the granting
of specific  performance  and other  equitable  remedies as a matter of judicial
discretion.

     4.12 No Default.  No event has occurred and is continuing that is
          -----------
an Event of Default.

     4.13 ERISA.

               (a) With respect to each Pension Plan:

                   (i) Pension Plan complies in all material respects with ERISA
          and any other applicable Laws to the  extent that noncompliance could
          reasonably be expected to have a Material Adverse Effect;

                  (ii)  such  Pension Plan  has  not incurred any  "accumulated
          funding deficiency" (as  defined in Section 302 of ERISA)  that  could
          reasonably be expected to have a Material Adverse Effect;

                 (iii) no  "reportable  event" (as  defined in  Section  4043 of
          ERISA,  but excluding  such  events  as to  which  the  PBGC has by
          regulation  waived  the requirement  therein  contained  that it be
          notified  within  thirty days of the occurrence of such event) has
          occurred that could reasonably be expected to have a Material Adverse
          Effect; and

                  (iv) none  of  the  Borrowers  nor any  of  their   respective
          Subsidiaries has engaged in any non-exempt "prohibited  transaction"
          (as defined in  Section  4975 of the Code)  that  could reasonably  be
          expected to have a Material Adverse Effect.

               (b)  None  of  the   Borrowers   nor  any  of  their   respective
          Subsidiaries has incurred or expects to incur any withdrawal liability
          to any Multiemployer  Plan that could reasonably be expected to have a
          Material Adverse Effect.

     4.14 Regulations U and X; Investment Company Act.

     No part of the proceeds of any Loan  hereunder  will be used to purchase or
carry,  or to extend credit to others for the purpose of purchasing or carrying,
any Margin Stock in violation of  Regulations U and X. None of the Borrowers nor
any of their  respective  Subsidiaries  is or is required to be registered as an
"investment company" under the Investment Company Act of 1940.

     4.15 Disclosure.

     No  information,  exhibit  or  report  furnished  by  any  Borrower  or any
Subsidiary  Guarantor in connection  with the negotiation of the Loan Documents,
pursuant to the terms of the Loan  Documents,  or in connection with any Loan as
of the date thereof contained any untrue statement of a material fact or omitted
a material fact  necessary to make the statement made not misleading in light of
all the  circumstances  existing  at the date the  statement  was  made.  No SEC
Document  filed by any  Borrower  since  December 1, 1997  contained  any untrue
statement of a material  fact or omitted a material  fact  necessary to make the
statement made not misleading in light of all the circumstances  existing at the
date the statement was made.

     4.16 Tax Liability.

     Each  Borrower and its  Subsidiaries  have filed all tax returns  which are
required to be filed,  and have paid, or made  provision for the payment of, all
taxes with  respect to the  periods,  Property or  transactions  covered by said
returns,  or pursuant to any  assessment  received by any Borrower or any of its
Subsidiaries, except such taxes, if any, as are being contested in good faith by
appropriate  proceedings and as to which adequate reserves have been established
and maintained.

     4.17 Projections.

     The  assumptions set forth in the Projections are reasonable and consistent
with each other and with all facts known to the Borrowers  and the  Subsidiaries
of the Borrowers,  and the Projections are reasonably based on such assumptions.
The Projections were prepared in good faith and represent  management's  opinion
of the projected  financial  performance  of the Borrowers and their  respective
Subsidiaries  based upon the information  available to the Borrowers at the time
so furnished.

     4.18 Environmental Matters.

               (a) Except as described in Schedule 4.18, to the knowledge of the
          Borrowers and each Subsidiary of each Borrower,  (i) each Borrower and
          each  Subsidiary of each Borrower is in compliance with all applicable
          federal or state  environmental,  hazardous  waste,  health and safety
          statutes, and any rules or regulations adopted pursuant thereto, which
          govern  or  affect  any of any  Borrower's  or any  such  Subsidiary's
          operations  and/or   properties,   including  without  limitation  the
          Comprehensive  Environmental Response,  Compensation and Liability Act
          of 1980, the Superfund Amendments and Reauthorization Act of 1986, the
          Federal  Resource  Conservation  and  Recovery  Act of  1976,  and the
          Federal  Toxic  Substances  Control  Act,  as any of the  same  may be
          amended,  modified or supplemented from time to time, (ii) none of the
          operations of any Borrower or any of its  Subsidiaries  is the subject
          of any federal or state investigation  evaluating whether any remedial
          action is needed to respond to a release of any Hazardous Material and
          (iii) none of the Borrowers and none of their respective  Subsidiaries
          have any  contingent  liability in connection  with any release of any
          Hazardous  Materials,  in each case,  where  such lack of  compliance,
          investigation or contingent  liability could reasonably be expected to
          have a Material Adverse Effect.

               (b) As of the Effective Date (a) neither  Borrower nor any of its
          Subsidiaries  at any time has  disposed  of,  discharged,  released or
          threatened  the release of any  Hazardous  Materials on, from or under
          the Real  Property in violation of any  Hazardous  Materials  Law that
          would  individually or in the aggregate  constitute a Material Adverse
          Effect,  (b) to the best  knowledge  of the  Borrowers,  no  condition
          exists that  violates any  Hazardous  Material Law  affecting any Real
          Property except for such violations that would not  individually or in
          the  aggregate  constitute  a  Material  Adverse  Effect,  (c) no Real
          Property  or any  portion  thereof  is or  has  been  utilized  by any
          Borrower or any of its  Subsidiaries  as a site for the manufacture of
          any  Hazardous  Materials  and (d) to the  extent  that any  Hazardous
          Materials are used,  generated or stored by any Borrower or any of its
          Subsidiaries on any Real Property, or transported to or from such Real
          Property  by  any  Borrower  or any of  its  Subsidiaries,  such  use,
          generation,  storage and  transportation  are in  compliance  with all
          Hazardous Materials Laws except for such non-compliance that would not
          constitute a Material  Adverse Effect or be materially  adverse to the
          interests of the Lenders.

     4.19  Solvency.

     Day Runner and its Subsidiaries, taken as a whole, are Solvent.

     4.20 Year 2000 Matters.

     Each Borrower will perform all acts reasonably necessary to ensure that (a)
each  Borrower  and any  business  in which such  Borrower  holds a  substantial
interest (including without limitation any Subsidiary of such Borrower), and (b)
to the extent reasonably practicable, all customers,  suppliers and vendors that
are material to the business of such  Borrower,  become Year 2000 Compliant in a
timely  manner.  Such acts  shall  include,  without  limitation,  performing  a
comprehensive  review  and  assessment  of all of such  Borrower's  systems  and
adopting  a  detailed  plan,  with an  itemized  budget,  for  the  remediation,
monitoring and testing of such systems.  As used herein,  "Year 2000  Compliant"
shall  mean,  in regard to any entity,  that all  material  software,  hardware,
firmware,  equipment,  goods or systems  utilized by or material to the business
operations  or  financial  condition of such entity will  properly  perform date
sensitive functions before, during and after the year 2000. Each Borrower shall,
immediately   upon   request,   provide   to  the   Administrative   Agent  such
certifications  or other evidence of such  Borrower's  compliance with the terms
hereof as the Administrative Agent may from time to time require.

                                    Article 5
                              AFFIRMATIVE COVENANTS
                           (OTHER THAN INFORMATION AND
                             REPORTING REQUIREMENTS)

     So long as any Loan remains unpaid, or any other Obligation remains unpaid,
or any  portion of the  Revolving  Commitment  remains in force,  each  Borrower
shall,  and shall cause its  Subsidiaries  to, unless the  Administrative  Agent
(with the written approval of the Requisite Lenders) otherwise consents:

     5.1 Payment of Taxes and Other Potential Liens.

     Pay and discharge promptly all taxes,  assessments and governmental charges
or levies imposed upon any of them, upon their  respective  Property or any part
thereof and upon their respective income or profits or any part thereof,  except
that each Borrower and its Subsidiaries shall not be required to pay or cause to
be paid any tax,  assessment,  charge or levy that is not yet delinquent,  or is
being contested in good faith by appropriate proceedings so long as the relevant
entity has  established and maintains  adequate  reserves for the payment of the
same.

     5.2 Preservation of Existence.

     Preserve and maintain their  respective  existences in the  jurisdiction of
their formation and all material authorizations, rights, franchises, privileges,
consents,  approvals,  orders,  licenses,  permits,  or  registrations  from any
Governmental  Agency that are necessary for the transaction of their  respective
business  and  qualify  and  remain  qualified  to  transact  business  in  each
jurisdiction  in  which  such  qualification  is  necessary  in  view  of  their
respective  business or the ownership or leasing of their respective  Properties
except  (a) a merger  permitted  by Section  6.3 or (b) where the  failure to so
preserve,  maintain, qualify or remain qualified would not constitute a Material
Adverse Effect.

     5.3 Maintenance of Properties.

     Maintain,  preserve and protect all of their respective  Properties in good
order  and  condition,  subject  to wear  and  tear in the  ordinary  course  of
business, and not permit any waste of their respective Properties, provided that
the failure to so maintain,  preserve or protect a  particular  item or items of
Property  shall not  constitute a violation of this  covenant if such failure is
not reasonably likely to cause a Material Adverse Effect.

     5.4 Maintenance of Insurance.

     Maintain  liability,  casualty  and other  insurance  (subject to customary
deductibles and retentions) with responsible insurance companies in such amounts
and against such risks as is carried by responsible companies engaged in similar
businesses and owning similar assets in the general areas in which each Borrower
and its Subsidiaries operate.

     5.5 Compliance With Laws.

     Comply  with  all  Requirements  of Law,  noncompliance  with  which  could
constitute a Material Adverse Effect.

     5.6 Inspection Rights.

     Upon reasonable  notice,  at any time during regular  business hours and as
often as reasonably  requested  (but not so as to materially  interfere with the
business of any Borrower or any of its Subsidiaries)  permit the  Administrative
Agent or any Lender, or any authorized employee, agent or representative thereof
(including,  without  limitation,  any auditors,  accountants or other financial
consultants  engaged  by  the  Administrative  Agent  to  review  the  financial
condition of Day Runner and its Subsidiaries), to examine, audit and make copies
and abstracts from the records and books of account of, and to visit and inspect
the Properties of, any Borrower and its Subsidiaries and to discuss the affairs,
finances and accounts of any  Borrower  and its  Subsidiaries  with any of their
officers,  key  employees or (with prior  coordination  through  such  Borrower)
independent accountants.

     5.7 Keeping of Records and Books of Account.

     Keep  adequate  records  and  books of  account  reflecting  all  financial
transactions in conformity with GAAP,  consistently  applied  (provided that the
records  and  books  of  account  of any  Foreign  Subsidiary  shall  be kept in
accordance  with generally  accepted  accounting  principles as in effect in the
United  Kingdom or in the  jurisdiction  in which  such  Foreign  Subsidiary  is
formed),  and in material  conformity  with all applicable  requirements  of any
Governmental  Agency having  regulatory  jurisdiction over each Borrower and its
Subsidiaries.

     5.8 Compliance With Agreements.

     Promptly and fully comply with all Contractual Obligations to which any one
or more of them is a party,  except  for any such  Contractual  Obligations  the
non-performance  of which  would  cause  either  (a) a Default or (b) a Material
Adverse Effect.

     5.9 Use of Proceeds.

     Use the proceeds of all Revolving Loans for working capital purposes and to
make Capital  Expenditures  permitted  under Section  6.16,  provided that in no
event shall the  proceeds of any  Revolving  Loan be used to pay interest on, or
repay principal of, any Term Loan or any Tender Offer Note.

     5.10 Hazardous Materials Laws.

     Keep and maintain all Real Property and each portion  thereof in compliance
in all  material  respects  with all  applicable  Hazardous  Materials  Laws and
promptly  notify the  Administrative  Agent in writing  (attaching a copy of any
pertinent  written material) of (a) any and all material  enforcement,  cleanup,
removal or other  governmental or regulatory  actions  instituted,  completed or
threatened  in writing  by a  Governmental  Agency  pursuant  to any  applicable
Hazardous  Materials Laws, (b) any and all material claims made or threatened in
writing by any Person  against any  Borrower  relating to damage,  contribution,
cost  recovery,  compensation,  loss or  injury  resulting  from  any  Hazardous
Materials and (c) discovery by any  Responsible  Official of any Borrower of any
material  occurrence  or  condition  on any real  Property  adjoining  or in the
vicinity of such Real Property  that could  reasonably be expected to cause such
Real  Property  or any part  thereof to be subject  to any  restrictions  on the
ownership,  occupancy,  transferability  or use of such Real Property  under any
applicable Hazardous Materials Laws.

     5.11 Additional Material Subsidiaries.

               (a) Each Borrower  shall cause each of its Material  Subsidiaries
          (other than DRC), and Day Runner shall cause each of its  Subsidiaries
          of which Filofax is a direct or indirect  Subsidiary,  existing on the
          Effective  Date to become a Subsidiary  Guarantor as of the  Effective
          Date.   Each  such   Subsidiary   Guarantor   shall   provide  to  the
          Administrative  Agent and its counsel on the Effective Date such legal
          opinions,  certificates and other documents as are reasonably required
          by the Administrative Agent.

               (b) Subject to any  applicable  Requirement of Law, each Borrower
          shall cause each Subsidiary of such Borrower,  whether now existing or
          hereafter  acquired,   that  becomes  a  Material  Subsidiary,   or  a
          Subsidiary of which Filofax is a direct or indirect Subsidiary,  after
          the Effective  Date to (i) become a Subsidiary  Guarantor by executing
          and delivering (A) with respect to any Material Subsidiary (other than
          a Subsidiary of Filofax), a Subsidiary Guaranty,  in substantially the
          form of Exhibit G, or (B) with respect to any  Subsidiary  of Filofax,
          Subsidiary Guaranties, in substantially the forms of Exhibits P and Q,
          and (ii) provide to the Administrative  Agent in connection  therewith
          such legal  opinions,  certificates  and other  documents  as shall be
          satisfactory to the Administrative  Agent, in each case within fifteen
          (15)  Banking  Days of the date such  Subsidiary  becomes  a  Material
          Subsidiary.

     5.12 Intentionally Omitted.

     5.13. Further Assurances.

               (a) If,  after  the  Effective  Date,  Day  Runner  or any of its
          Subsidiaries  forms or acquires a new  Subsidiary,  Day Runner or such
          Subsidiary shall pledge to the  Administrative  Agent, for the benefit
          of the Lenders, all the capital stock of each such Subsidiary, in each
          case  pursuant  to a  supplement  to a  Pledge  Agreement  in form and
          substance  reasonably  satisfactory  to the  Administrative  Agent. In
          addition,  at the request of the  Administrative  Agent (which request
          may be made at any time and from time to time at its sole and absolute
          discretion), Day Runner shall, within 30 days after the Administrative
          Agent's request,  pledge, or cause each relevant Subsidiary to pledge,
          to the  Administrative  Agent, for the benefit of the Lenders,  all of
          the capital  stock of any  Subsidiary  that is not then pledged to the
          Administrative  Agent for the  benefit  of the  Lenders,  in each case
          pursuant to a supplement  to a Pledge  Agreement in form and substance
          reasonably satisfactory to the Administrative Agent.

               (b) Day Runner shall,  and shall cause each Subsidiary to, at the
          Day Runner's cost and expense, execute and deliver any and all further
          documents, financing statements,  agreements and instruments, and take
          all further action (including filing Uniform Commercial Code and other
          financing  statements),  that may be required under applicable law, or
          that the  Administrative  Agent may  reasonably  request,  in order to
          effectuate the transactions  contemplated by the Loan Documents and in
          order to grant,  preserve,  protect and perfect the validity and first
          priority  (with  such  exceptions  expressly  permitted  by  the  Loan
          Documents) of the security interests created or intended to be created
          by the Collateral Documents.  Day Runner will cause (i) any Subsidiary
          that is formed, organized or acquired after the Effective Date or (ii)
          at the request of the Administrative  Agent (which request may be made
          at  any  time  and  from  time  to  time  at  its  sole  and  absolute
          discretion),  any  Subsidiary  that  has  not  previously  executed  a
          Subsidiary  Guaranty,   Security  Agreement  and/or  other  applicable
          Collateral  Document,  to  execute  a  Subsidiary  Guaranty,  Security
          Agreement  and/or each other applicable  Collateral  Document (in each
          case with such  changes in the form as may be required to  accommodate
          local law of the  jurisdiction  of formation or  organization  of such
          Subsidiary) in favor of the  Administrative  Agent (x) with respect to
          any  Subsidiary  described  in clause (i) above,  within 30 days after
          such  Subsidiary is formed,  organized or acquired or (y) with respect
          to any Subsidiary described in clause (ii) above, within 30 days after
          the Administrative Agent's request.

     5.14. Deposit Accounts and Cash Concentration.

               (a) Day Runner agrees that (i) it will  maintain,  and cause each
          of its domestic  Subsidiaries  to  maintain,  all of its Cash and Cash
          Equivalents in deposit accounts or securities  accounts  maintained by
          the  Administrative  Agent,  (ii) it will  cause  each of its  Foreign
          Subsidiaries  that  is  a  Material  Subsidiary  (including,   without
          limitation,  Filofax  and Filofax  Group)  (and each other  Subsidiary
          requested by the Administrative Agent) to maintain all of its Cash and
          Cash Equivalents in deposit accounts or securities accounts maintained
          by a Lender,  and (iii) neither Day Runner nor any of its Subsidiaries
          shall establish or maintain any deposit account or securities  account
          (other than accounts listed on Schedule 5.14(a)) with any other Person
          without the prior written consent of the Administrative Agent.

               (b) Day Runner will maintain with the  Administrative  Agent,  in
          addition  to any other  accounts  maintained  with the  Administrative
          Agent,  (i) a deposit account to be denominated as the  "Concentration
          Account",  (ii) an interest  bearing deposit account to be denominated
          as the "Term Loan  Interest  Reserve  Account"  and (iii) a  "Lockbox"
          deposit  service  as to which Day Runner has  instructed  its  account
          debtors  with  respect  to  domestic  accounts  receivable  to  direct
          payments with respect to such accounts  receiveable  (the  "Lockbox").
          Prior to the end of each  Banking  Day, Day Runner shall pay, or cause
          to be paid,  to the  Administrative  Agent (x) for deposit in the Term
          Loan Interest Reserve Account, all Cash and Cash Equivalents then held
          in the Lockbox and (y) for deposit in the Concentration  Account,  all
          Cash and Cash  Equivalents  held by Day Runner or any of its  domestic
          Subsidiaries  (other than such Cash and Cash  Equivalents  held in the
          Lockbox). In addition,  Day Runner shall cause each Foreign Subsidiary
          (including, without limitation, Filofax and Filofax Group), unless the
          Administrative  Agent otherwise consents in writing,  to pay, or cause
          to  be  paid,  to  the   Administrative   Agent  for  deposit  in  the
          Concentration  Account,  as frequently as practicable and no less than
          twice per calendar month (subject to the proviso below),  all Cash and
          Cash  Equivalents  (including  all  proceeds  of  Collateral)  of such
          Subsidiary in excess of "Minimum Amount" set forth on Schedule 5.14(b)
          opposite  the  name  of  such  Subsidiary  (or  the  Foreign  Currency
          Equivalent   thereof),   provided   that  no  such   payment   to  the
          Concentration  Account  shall be required  by any  Foreign  Subsidiary
          pursuant this Section  5.14(b)  unless the amount of all Cash and Cash
          Equivalents then held by such Foreign  Subsidiary exceeds the "Maximum
          Amount"  set  forth  on  Schedule  5.14(b)  opposite  the name of such
          Subsidiary (or the Foreign Currency  Equivalent  thereof) for a period
          of five (5) consecutive Banking Days.

               (c) Day  Runner  shall  maintain  on  deposit  in the  Term  Loan
          Interest Reserve Account, as of the end of each Banking Day, an amount
          at least  equal to the sum of (i) the amount of the accrued and unpaid
          interest on the  outstanding  Term Loans as of the end of such Banking
          Day and (ii) an  amount  that Day  Runner in its good  faith  judgment
          determines (and periodically  reports to the  Administrative  Agent no
          less than monthly) is necessary to reserve in order to have sufficient
          funds on hand to make  any  payments  with  respect  to any  scheduled
          redemption  of the Tender Offer Notes  occurring  after the  Effective
          Date (such amount, the "Required  Balance"),  provided that if, at end
          of any Banking  Day,  the amount on deposit in the Term Loan  Interest
          Reserve  Account is not at least equal to the Required  Balance,  then
          all Cash and Cash  Equivalents  deposited  in the Term  Loan  Interest
          Reserve  Account shall be retained on deposit therein until the end of
          the first  Banking Day on which the amount on deposit in the Term Loan
          Interest Reserve Account is at least equal to the Required Balance for
          such Banking Day.

                                    Article 6
                               NEGATIVE COVENANTS

     So long as any Loan remains unpaid, or any other Obligation remains unpaid,
or any portion of the Revolving Commitment remains in force, each Borrower shall
not, and shall not permit any of its Subsidiaries to:

     6.1 Payment of Subordinated Obligations.

     Pay any principal  (including  sinking fund  payments)  with respect to any
Subordinated Obligation,  or purchase or redeem (or offer to purchase or redeem)
any Subordinated Obligation, or deposit any monies, securities or other Property
with any trustee or other Person to provide  assurance that the principal or any
portion  thereof  of any  Subordinated  Obligation  will  be  paid  when  due or
otherwise to provide for the defeasance of any Subordinated Obligation.

     6.2 Disposition of Property.

     Make any  Disposition  of its  Property,  whether  now  owned or  hereafter
acquired, except (a) a Disposition by a Borrower to another Borrower that is not
a Foreign  Subsidiary,  (b) a Disposition  by a Subsidiary of a Borrower to such
Borrower,  (c) so long as the Net Cash Sale  Proceeds  of such  Disposition  are
applied in accordance with Section 3.2(a)(iv),  a Disposition of the Property of
Day Runner Australia PTY, Ltd. substantially as an entirety (or a Disposition of
the  capital  stock  thereof)  in  connection  with  a  discontinuation  of  the
operations  of such  Subsidiary  and (d) a  Disposition  by any  Borrower to any
Subsidiary of inventory in a manner consistent with past practice, provided that
the  Lien   granted  in  the  Security   Agreement  by  such   Borrower  to  the
Administrative  Agent,  for the benefit of the Lenders,  on such inventory shall
continue and remain in full force and effect.

     6.3 Mergers. Merge or consolidate with or into any Person.

     6.4 Intentionally Omitted.

     6.5 Intentionally Omitted.

     6.6 Distributions.

     Make any  Distribution,  whether from  capital,  income or  otherwise,  and
whether in Cash or other Property,  except  Distributions by any Subsidiary of a
Borrower to such Borrower.

     6.7 ERISA.

     At any time,  permit any  Pension  Plan to:  (i)  engage in any  non-exempt
"prohibited  transaction" (as defined in Section 4975 of the Code); (ii) fail to
comply  with  ERISA or any other  applicable  Laws;  (iii)  incur  any  material
"accumulated  funding  deficiency" (as defined in Section 302 of ERISA); or (iv)
terminate in any manner,  which, with respect to each event listed above,  could
reasonably be expected to result in a Material  Adverse  Effect or (b) withdraw,
completely  or  partially,  from  any  Multiemployer  Plan  if to  do  so  could
reasonably be expected to result in a Material Adverse Effect.

     6.8 Change in Nature of Business.

     Make any  material  change in the nature of the  business of Day Runner and
its Subsidiaries, taken as a whole.

     6.9 Liens.

     Create,  incur,  assume or suffer to exist any Lien of any  nature  upon or
with  respect  to any of their  respective  Properties,  or sell or  factor  any
accounts receivable or engage in any sale and leaseback transaction with respect
to any of their respective Properties,  whether now owned or hereafter acquired,
except:

               (a)  Liens  existing  on the  Effective  Date  and  disclosed  in
          Schedule  4.7  and  any  renewals/extensions  or  amendments  thereof,
          provided  that the  obligations  secured or benefited  thereby are not
          increased;

               (b) Liens granted to the Administrative Agent, for the benefit of
          the Lenders, pursuant to any Loan Document;

               (c) Permitted Encumbrances;

               (d) Liens on  Property  acquired  by any  Borrower  or any of its
          Subsidiaries,  provided  that such Liens were in existence at the time
          of  the   acquisition  of  such  Property  and  were  not  created  in
          contemplation of such  acquisition,  and Liens on Property that secure
          Indebtedness permitted pursuant to Section 6.10(d);  provided that the
          aggregate  Indebtedness  secured by Liens  pursuant to this Section is
          not in excess of $500,000 in principal amount; and

               (e) Liens on the Filofax  Overdraft Account and amounts deposited
          therein  granted  by  Filofax  in order to  secure  Filofax  Overdraft
          Indebtedness to the extent such Indebtedness is permitted  pursuant to
          Section 6.10(i) below,  provided that the aggregate  amount on deposit
          at any time in the  Filofax  Overdraft  Account  shall not  exceed the
          Foreign Currency Equivalent of $10,000,000;  provided,  further,  that
          Filofax has granted to the  Administrative  Agent,  for the benefit of
          the  Lenders,  a Lien on such the  Filofax  Overdraft  Account and the
          amounts  deposited  therein,   which  Lien,  if  subordinated  to  the
          aforementioned  Liens, is  subordinated  on terms  satisfactory to the
          Administrative Agent.

     6.10 Indebtedness and Guaranty Obligations.

     Create, incur or assume any Indebtedness or Guaranty Obligation except:

               (a)  Indebtedness  and  Guaranty   Obligations  existing  on  the
          Effective  Date and  disclosed  in Schedule  6.10,  and  refinancings,
          renewals,  extensions  or  amendments  that do not increase the amount
          thereof;

               (b)  Indebtedness  and  Guaranty   Obligations   under  the  Loan
          Documents;

               (c) Indebtedness and Guaranty Obligations owed to any Borrower or
          any of the Subsidiary Guarantors;  provided that any such Indebtedness
          is  evidenced  by a  promissory  note,  in  substantially  the form of
          Exhibit  R,  that is  pledged  to the  Administrative  Agent,  for the
          benefit of the Lenders, and is subordinated in right of payment to the
          Loans on terms and in form satisfactory to the Administrative Agent;

               (d)  Indebtedness  consisting  of Capital Lease  Obligations,  or
          otherwise  incurred to finance the purchase or construction of capital
          assets (which shall be deemed to exist if the Indebtedness is incurred
          at or within 180 days before or after the purchase or  construction of
          the capital asset),  or to refinance any such  Indebtedness,  provided
          that the aggregate  principal amount of such Indebtedness  outstanding
          at any time does not exceed $500,000;

               (e)   Indebtedness   consisting  of  Interest   Rate   Protection
          Agreements  entered  into in order to manage  existing or  anticipated
          interest rate risks and not for speculative purposes;

               (f) Indebtedness constituting Subordinated Obligations;

               (g) the Tender Offer Notes;

               (h)  other  Indebtedness  that  is not  secured  by a Lien on any
          Property of any Borrower or any of the  Subsidiaries  of any Borrower;
          provided that the aggregate  principal  amount thereof does not exceed
          $250,000 at any time; and

               (i) the Filofax  Overdraft  Indebtedness  to the extent that such
          Indebtedness (net of the amount of cash then on deposit in the Filofax
          Overdraft Account) does not exceed the Foreign Currency  Equivalent of
          $1,500,000 at any time outstanding.

         6.11  Transactions  with Affiliates.

     Enter into any  transaction  of any kind with any Affiliate of any Borrower
or any Affiliate of any Subsidiary of any Borrower other than (a) salary, bonus,
employee  stock option and other  compensation  arrangements  with  directors or
officers in the ordinary  course of business;  and (b)  transactions  on overall
terms at least as  favorable to the  applicable  Borrower or its  Subsidiary  as
would be the case in an arm's-length  transaction  between  unrelated parties of
equal bargaining power.

     6.12 Funded Senior Debt Ratio.

     Permit  the  Funded  Senior  Debt  Ratio,  as of the last day of any Fiscal
Quarter, to be greater than the ratio set forth below opposite the period during
which such Fiscal Quarter ends:

 --------------------------------------------------------- -------------------
                            Period                                 Ratio
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------
 July 1, 2000 through September 30, 2000                     12.40 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  October 1, 2000 through December 31, 2000                    4.50 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  January 1, 2001 through March 31, 2001                       3.25 to 1.00
  --------------------------------------------------------- -------------------
  --------------------------------------------------------- -------------------

   April 1, 2001 and thereafter                                 3.00 to 1.00
   --------------------------------------------------------- -------------------

     6.13 Fixed Charge Coverage Ratio.

     Permit the Fixed Charge  Coverage  Ratio,  as of the last day of any Fiscal
Quarter,  to be less than the ratio set forth below  opposite the period  during
which such Fiscal Quarter ends:

 --------------------------------------------------------- -------------------
                           Period                                 Ratio
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------
  July 1, 2000 through September 30, 2000                      0.25 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------
  October 1, 2000 through December 31, 2000                    1.50 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  January 1, 2001 through March 31, 2001                       1.75 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  April 1, 2001 and thereafter                                 2.00 to 1.00
 --------------------------------------------------------- -------------------

     6.14 Stockholders' Equity.

     Permit  Stockholders'  Equity of Day Runner,  at any time during any period
set forth  below,  to be less than the  amount  set forth  below  opposite  such
period:

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

                          Period                                 Amount
 --------------------------------------------------------- ------ -------------
 --------------------------------------------------------- -------------------
 July 1, 1999 through September 30, 1999                      $61,700,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

 October 1, 1999 through December 31, 1999                    $63,000,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

 January 1, 2000 through March 31, 2000                       $58,750,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  April 1, 2000 through June 30, 2000                          $56,900,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

   July 1, 2000 through September 30, 2000                      $55,950,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

   October 1, 2000 through December 31, 2000                    $64,000,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  January 1, 2001 through March 31, 2001                       $67,000,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  April 1, 2001 and thereafter                                 $70,000,000
 --------------------------------------------------------- -------------------

     6.15 Investments. Make or suffer to exist any Investment, other than:

               (a)  Investments in existence on the Effective Date and disclosed
          on Schedule 6.15;

               (b) Investments consisting of Cash Equivalents;

               (c) Investments consisting of advances to officers, directors and
          employees of Borrowers and their  Subsidiaries  in the ordinary course
          of business not to exceed $50,000 at any time outstanding;

               (d)  Investments  received in connection  with the  bankruptcy or
          reorganization  of  suppliers  and  customers  and  in  settlement  of
          disputes with customers and suppliers  arising in the ordinary  course
          of business;

               (e) Investments of any Borrower in any Borrower or any Subsidiary
          Guarantor;

                  (f)  Investments  of a  Borrower  in any  Subsidiary  of  such
Borrower that is not a Subsidiary  Guarantor (other than DRC); provided that the
aggregate amount of all such Investments shall not exceed $1,500,000; and

               (g)  Investments  by Day  Runner in DRC (i) in  existence  on the
          Effective Date (other than as described in clause (ii) below) and (ii)
          consisting of Intercompany  Indebtedness owed by DRC to Day Runner (A)
          arising in connection  with the  reclassification  of the DRC Loans as
          Revolving  Loans  to Day  Runner  pursuant  to this  Agreement  or (B)
          incurred by DRC from time to time after the Effective  Date,  provided
          that (x) the aggregate  principal amount of Intercompany  Indebtedness
          owed by DRC to Day  Runner  outstanding  at any time  shall not exceed
          $3,000,000  and  (y)  all  such  Intercompany  Indebtedness  shall  be
          evidenced by a promissory note, in form and substance  satisfactory to
          the Administrative Agent, that is pledged to the Administrative Agent,
          for the benefit of the Lenders.

     6.16 Capital Expenditures.

               The  Borrowers  shall  not,  and  shall not  permit  any of their
          respective  Subsidiaries  to,  make any  Capital  Expenditures  in any
          Fiscal Year, if, after giving effect thereto,  the aggregate amount of
          all Capital  Expenditures made by the Borrowers and their Subsidiaries
          in such Fiscal Year would exceed $5,000,000.

     6.17 Payment Restrictions Affecting Subsidiaries.

     Enter into, or permit any of its Subsidiaries to enter into, any agreement,
instrument or other document  (other than any Loan  Document)  which directly or
indirectly  prohibits or  restricts  in any manner,  or would have the effect of
prohibiting  or restricting  in any material  manner,  the ability of any of the
Borrower's  Subsidiaries to (i) pay dividends or make any other distributions in
respect of its capital stock or any other equity  interest or  participation  in
its profits  owned by the Borrower or any of its  Subsidiaries,  or pay or repay
any  Indebtedness  owed to the  Borrower or any of its  Subsidiaries,  (ii) make
loans or advances to any of the Borrowers or any of their Subsidiaries, or (iii)
transfer  any of its  properties  or  assets  to the  Borrowers  or any of their
Subsidiaries.

     6.18 Lease Obligations.

     The  Borrowers  shall not,  and shall not  permit  any of their  respective
Subsidiaries  to, incur any obligations  with respect to any lease that is not a
Capital Lease in any Fiscal Year, if, after giving effect thereto, the aggregate
amount of all obligations of the Borrowers and their  Subsidiaries  with respect
to leases that are not Capital  Leases  would  exceed  $7,500,000  in any Fiscal
Year.

     6.19 Minimum EBITDA.

     As of the last day of each Fiscal Quarter ending on or after  September 30,
2000, permit EBITDA for the period of four consecutive Fiscal Quarters ending on
such date, to be less than the amount set forth below opposite the period during
which such Fiscal Quarter ends:

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

                           Period                                 Amount
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  July 1, 2000 through September 30, 2000                       $8,400,000
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

   October 1, 2000 through December 31, 2000                    $23,000,000
  --------------------------------------------------------- -------------------
  --------------------------------------------------------- -------------------

    January 1, 2001 through March 31, 2001                       $26,000,000
  --------------------------------------------------------- -------------------
  --------------------------------------------------------- -------------------

    April 1, 2001 and thereafter                                 $30,000,000
  --------------------------------------------------------- -------------------

      6.20 Current  Ratio.  Permit the Current  Ratio,  as of the last day of
each  Fiscal  Quarter,  to be less than the ratio set forth below  opposite  the
period during which such Fiscal Quarter ends:

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

                        Period                                 Ratio
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------
   July 1, 1999 through September 30, 1999                      1.90 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

  October 1, 1999 through December 31, 1999                    2.00 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

   January 1, 2000 through March 31, 2000                       2.00 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

    April 1, 2000 through June 30, 2000                          2.00 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

    July 1, 2000 through September 30, 2000                      2.00 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

   October 1, 2000 through December 31, 2000                    2.75 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

   January 1, 2001 through March 31, 2001                       3.00 to 1.00
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

    April 1, 2001 and thereafter                                 3.00 to 1.00
 --------------------------------------------------------- -------------------

     6.21 Operating Expenses.

     Permit  operating  expenses in any Fiscal  Quarter  (determined in a manner
consistent  with the  consolidated  financial  statements  of Day Runner for its
Fiscal Year ended June 30, 1999  delivered to the  Administrative  Agent and the
Lenders prior to the Effective  Date) to exceed the  percentage of net sales for
such Fiscal Quarter set forth below opposite the period during which such Fiscal
Quarter ends, for any two consecutive Fiscal Quarters:

 --------------------------------------------------------- -------------------
                                                             Percentage of Net
                              Period                                 Sales
 --------------------------------------------------------- -------------------
 --------------------------------------------------------- -------------------

    October 1, 2000 through December 31, 2000                        41%
  --------------------------------------------------------- -------------------
  --------------------------------------------------------- -------------------

    January 1, 2001 through March 31, 2001                           60%
  --------------------------------------------------------- -------------------
  --------------------------------------------------------- -------------------

    April 1, 2001 and thereafter                                     47%
  --------------------------------------------------------- -------------------

                                    Article 7
                     INFORMATION AND REPORTING REQUIREMENTS

     7.1 Financial and Business Information.

     So long as any Loan remains unpaid, or any other Obligation remains unpaid,
or any portion of the Revolving  Commitment  remains in force, Day Runner shall,
unless the  Administrative  Agent  (with the written  approval of the  Requisite
Lenders)  otherwise  consents,  at Day Runner's  sole  expense,  deliver to each
Lender:

               (a) As soon as practicable, and in any event within 55 days after
          the end of each Fiscal  Quarter  (other than the fourth Fiscal Quarter
          in any Fiscal Year), the consolidated  balance sheet of Day Runner and
          its  Subsidiaries  as at the  end  of  such  Fiscal  Quarter  and  the
          consolidated  statements of operations  and cash flows for such Fiscal
          Quarter,  and the  portion of the Fiscal  Year ended with such  Fiscal
          Quarter,  all in reasonable detail. Such financial statements shall be
          certified  by the  chief  financial  officer  of Day  Runner as fairly
          presenting in all material respects the financial  condition,  results
          of  operations  and cash flows of Day Runner and its  Subsidiaries  in
          accordance with GAAP (other than footnote  disclosures),  consistently
          applied, as at such date and for such periods,  subject only to normal
          year-end accruals and audit adjustments;

               (b) As soon as practicable, and in any event within 55 days after
          the end of each Fiscal Quarter (i) a Pricing Certificate setting forth
          a  calculation  of the  Funded  Debt  Ratio as of the last day of such
          Fiscal Quarter,  and providing reasonable detail as to the calculation
          thereof,  which  calculations in the case of the fourth Fiscal Quarter
          in any  Fiscal  Year  shall  be  based  on the  preliminary  unaudited
          financial  statements of such Borrower and its  Subsidiaries  for such
          Fiscal Quarter, and as soon as practicable thereafter, in the event of
          any  material  variance in the actual  calculation  of the Funded Debt
          Ratio from such preliminary calculation, a revised Pricing Certificate
          setting forth the actual calculation thereof and (ii) a certificate of
          a Senior  Officer of Day Runner stating that the  representations  and
          warranties  in Article 4 hereof are true and  correct in all  material
          respects  as of the  date of such  certificate  and  that no  Event of
          Default has occurred and is continuing  or, if an Event of Default has
          occurred and is  continuing,  a statement as to the nature thereof and
          the action that Day Runner has taken and proposes to take with respect
          thereto;

               (c) As soon as  practicable,  and in any  event  within  100 days
          after the end of each Fiscal Year, the  consolidated  balance sheet of
          Day Runner and its  Subsidiaries as at the end of such Fiscal Year and
          the consolidated  statements of operations,  stockholders'  equity and
          cash flows, in each case of Day Runner and its  Subsidiaries  for such
          Fiscal  Year,  with all  related  consolidating  financial  statements
          prepared by Day Runner,  all in reasonable  detail.  Such consolidated
          financial  statements  shall be  prepared  in  accordance  with  GAAP,
          consistently applied, and shall be accompanied by a report of Deloitte
          & Touche LLP or other  independent  public  accountants  of recognized
          standing  selected by Day Runner and  reasonably  satisfactory  to the
          Requisite  Lenders,  which report shall be prepared in accordance with
          generally  accepted auditing  standards as at such date, and shall not
          be subject to any  qualifications  or  exceptions.  Such  accountants'
          report shall be accompanied  by a certificate  stating that, in making
          the  examination  pursuant to generally  accepted  auditing  standards
          necessary for the certification of such financial  statements and such
          report,  such  accountants  have obtained no knowledge of any Event of
          Default then existing relating to the breach by any Borrower of any of
          Sections 6.1, 6.2, 6.6, 6.9, 6.10,  6.12, 6.13, 6.14, 6.16, 6.19, 6.20
          and 6.21 of this Agreement or, if, in the opinion of such accountants,
          any such Event of Default  shall exist,  stating the nature and status
          of such Event of Default;

               (d) As soon as  practicable,  and in any event within thirty (30)
          days after the end of each month, the  consolidated and  consolidating
          balance sheet of Day Runner and its Subsidiaries as at the end of such
          month and the consolidated statements of operations and cash flows for
          such month,  all in reasonable  detail and prepared in comparison with
          the projections  delivered to the Administrative Agent with respect to
          such month and the  corresponding  month in the preceding Fiscal Year.
          Such financial  statements  shall be certified by the chief  financial
          officer of Day Runner as fairly  presenting  in all material  respects
          the financial  condition,  results of operations and cash flows of Day
          Runner  and its  Subsidiaries  in  accordance  with GAAP  (other  than
          footnote  disclosures),  consistently applied, as at such date and for
          such  periods,  subject  only to normal  year-end  accruals  and audit
          adjustments;

               (e) As soon as  practicable,  and in any event within thirty (30)
          days  after  the  commencement  of each  Fiscal  Year,  a  budget  and
          projection by month and Fiscal  Quarter for that Fiscal Year,  and for
          the next succeeding  Fiscal Year,  including for the first such Fiscal
          Year, projected consolidated balance sheets,  statements of operations
          and  statements of cash flow, in each case by Fiscal  Quarter and, for
          succeeding  Fiscal Years,  projected  consolidated  condensed  balance
          sheets and  statements of  operations  and cash flows of each Borrower
          and its  Subsidiaries,  all in reasonable  detail (it being understood
          that any projections provided hereunder shall be were prepared in good
          faith  and  will  represent  management's  opinion  of  the  projected
          financial   performance   of  the  Borrowers   and  their   respective
          Subsidiaries based upon the information  available to the Borrowers at
          the time so furnished);

               (f) As soon as practicable,  and in any event within fifteen (15)
          days  after the end of each  month,  a report,  in form and  substance
          reasonably   satisfactory  to  the  Administrative   Agent,  from  the
          management   of  Filofax  Group  with  respect  to  the  results  from
          operations  of Filofax  Limited and certain of its other  Subsidiaries
          for the preceding month;

                  (g) As soon as  practicable,  and in any event within ten (10)
days after the end of each month,  a report,  in form and  substance  reasonably
satisfactory to the Administrative Agent, from Wasserstein Perella & Co. Limited
with respect to the status of the strategic  alternatives being pursued by it on
behalf of Day Runner and its Subsidiaries;

                  (h) Promptly after request by the Administrative  Agent or the
Requisite Lenders,  copies of any detailed audit reports,  management letters or
recommendations  submitted to the board of directors (or the audit  committee of
the board of directors) of any Borrower by independent accountants in connection
with the accounts or books of such Borrower or any of its  Subsidiaries,  or any
audit of any of them and/or any tax returns  filed by any Borrower or any of its
Subsidiaries  with the federal  governments  of the United  States or the United
Kingdom;

               (i) (i) As soon as  practicable,  and in any event within 55 days
          after the end of each Fiscal Quarter, a copy of the Form 10-Q for such
          Fiscal Quarter filed with the  Securities  and Exchange  Commission by
          any Borrower; (ii) as soon as practicable, and in any event within 100
          days  after  the end of each  Fiscal  Year a copy of the Form 10-K for
          such Fiscal Year filed with the Securities and Exchange  Commission by
          any Borrower; and (iii) promptly after the same are available,  and in
          any event within two (2) Banking Days after filing with the Securities
          and  Exchange  Commission,  copies  of each  annual  report,  proxy or
          financial  statement  or other  report  or  communication  sent to the
          stockholders  of any  Borrower,  and  copies of all  annual,  regular,
          periodic and special  reports and  registration  statements  which any
          Borrower  may file or be  required  to file  with the  Securities  and
          Exchange  Commission  under  Section  13 or  15(d)  of the  Securities
          Exchange Act of 1934,  as amended,  and not  otherwise  required to be
          delivered  to the  Lenders  pursuant to the other  provisions  of this
          Section 7.1;

               (j) Promptly  after  request by the  Administrative  Agent or any
          Lender, copies of any other report or other document that was filed by
          any Borrower with any Governmental Agency;

               (k)  Promptly  upon a Senior  Officer  of any  Borrower  becoming
          aware,  and in any event within five (5) Banking  Days after  becoming
          aware, of the occurrence of any (i)  "reportable  event" (as such term
          is defined in Section 4043 of ERISA,  but excluding  such events as to
          which  the PBGC  has by  regulation  waived  the  requirement  therein
          contained that it be notified  within thirty days of the occurrence of
          such event) or (ii) non-exempt "prohibited  transaction" (as such term
          is  defined  in  Section  406 of ERISA or  Section  4975 of the  Code)
          involving any Pension Plan or any trust created thereunder, telephonic
          notice  specifying  the  nature  thereof,  and,  no more  than two (2)
          Banking  Days after  such  telephonic  notice,  written  notice  again
          specifying  the  nature   thereof  and  specifying   what  action  the
          applicable  Borrower  is  taking  or  proposes  to take  with  respect
          thereto,  and,  when known,  any action taken by the Internal  Revenue
          Service with respect thereto;

                    (l) As soon  as practicable, and in any event within two (2)
          Banking Days after a Senior Officer  becomes aware of the existence of
          any  condition  or  event  which  constitutes  a  Default  or Event of
          Default,  telephonic  notice  specifying  the  nature  and  period  of
          existence  thereof,  and, no more than two (2) Banking Days after such
          telephonic  notice,  written  notice again  specifying  the nature and
          period of existence  thereof and specifying  what action the Borrowers
          are taking or propose to take with respect thereto;

               (m) Promptly upon a Senior Officer of any Borrower becoming aware
          that (i) any Person has commenced a legal proceeding with respect to a
          claim against any Borrower that such Borrower  reasonably  believes is
          $500,000 or more in excess of the amount thereof that is fully covered
          by insurance or indemnification agreement of a financially responsible
          Person,   (ii)  any  creditor  under  a  credit  agreement   involving
          Indebtedness  of $100,000 or more or any lessor under a material lease
          involving  aggregate  rent of $200,000 per year or more has asserted a
          material default  thereunder on the part of any Borrower or, (iii) any
          Person  has  commenced  a legal  proceeding  with  respect  to a claim
          against any Borrower  under a contract that is not a credit  agreement
          or material  lease with respect to a claim of in excess of $200,000 or
          which  otherwise  may  reasonably  be expected to result in a Material
          Adverse  Effect,  a written  notice  describing  the  pertinent  facts
          relating thereto and what action the applicable  Borrower is taking or
          proposes to take with respect thereto;

               (n) As  promptly as  practicable,  and in any event no later than
          the first Banking Day of any calendar  week, a sales flash report with
          respect to Day Runner and its Subsidiaries for the preceding  calendar
          week  and  within  two (2)  Banking  Days of the end of each  calendar
          month, a summary of the sales flash report for such month;

               (o) As promptly as practicable, and in any event by no later than
          November  30,  1999,  a revised  operating  plan of Day Runner and its
          Subsidiaries  which shall include a revised budget and projections for
          Day Runner and its Subsidiaries  prepared by calendar month for Fiscal
          Year 2000 and by Fiscal Quarter for Fiscal Year 2001;

               (p) As promptly as practicable,  and in any event within five (5)
          Banking Days after the end of each calendar month, a rolling  thirteen
          (13) week cash  forecast  for Day  Runner and its  Subsidiaries  which
          shall include a cash  forecast by Fiscal  Quarter for the remainder of
          the Fiscal Year;

               (q) As promptly as practicable,  and in any event within five (5)
          Banking Days of the end of each  calendar  month,  a sales report with
          respect to Day Runner and its Subsidiaries for the preceding  calendar
          month  setting  forth sales data with respect to each  customer of Day
          Runner or any of its  Subsidiaries  that accounts for more than 10% of
          the  aggregate  sales  of  Day  Runner  and  its  Subsidiaries  (on  a
          consolidated basis) (such a customer, a "Significant Customer") with a
          comparison  of such sales  data to (i) the sales data with  respect to
          each  Significant  Customer for the  corresponding  month in the prior
          Fiscal Year and (ii) the projected sales to each Significant  Customer
          set forth in the  revised  operating  plan and  projections  delivered
          pursuant to Section 7.1(o);

               (r) As promptly as  practicable,  and in any event within fifteen
          (15)  days of the end of each  month,  a  report  setting  forth  with
          respect to each  Significant  Customer,  point-of-sale  and  inventory
          on-hand data by product  category for the  preceding  calendar  month,
          together  with a  comparison  of such  data with the  results  for the
          corresponding month in the prior Fiscal Year; and

               (s) Such other data and  information  as from time to time may be
          reasonably requested by the Administrative  Agent, any Lender (through
          the Administrative Agent) or the Requisite Lenders.

     7.2 Compliance Certificates.

     So long as any Loan remains unpaid, or any other Obligation  remains unpaid
or unperformed,  or any portion of the Revolving Commitment remains outstanding,
Day  Runner  shall,  at Day  Runner's  sole  expense,  deliver  to  each  Lender
concurrently with the financial  statements required pursuant to Sections 7.1(a)
and 7.1(c), a Compliance Certificate signed by a Senior Officer of Day Runner.

                                    Article 8
                                   CONDITIONS

     8.1 Effective Date.

     The occurrence of the Effective  Date,  and the  obligations of each Lender
pursuant to the Revolving  Commitment,  are subject to the following  conditions
precedent, each of which shall be satisfied on or prior to the Effective Date:

               (a) The  Administrative  Agent  shall  have  received  all of the
          following,   each  of  which  shall  be  originals   unless  otherwise
          specified,  each properly  executed by a Responsible  Official of each
          party  thereto,  each dated as of the Effective  Date and each in form
          and substance reasonably  satisfactory to the Administrative Agent and
          its legal counsel (unless  otherwise  specified or, in the case of the
          date  of  any  of  the  following,  unless  the  Administrative  Agent
          otherwise agrees or directs):

                     (1)at least one (1) executed counterpart of this Agreement,
          together with arrangements  satisfactory to the  Administrative  Agent
          for  additional  executed  counterparts,   sufficient  in  number  for
          distribution to the Lenders and Borrowers;

                     (2) an original Revolving Loan Note executed by each
          Borrower in favor of each Lender, in a principal amount equal to that
          Lender's Pro Rata Share of the Revolving Commitment;

                      (3)an original Term Loan Note executed by each Borrower in
          favor of each Lender and in a principal amount equal to such Lender's
          Pro Rate Share of the Term Loan Amount;

                      (4) each Subsidiary Guaranty executed by  each  Subsidiary
          Guarantor party thereto;

                      (5) each Borrower Guaranty executed by each Borrower party
          thereto;

                      (6) executed counterparts of the Pledge Agreements
          executed by each of Day Runner, DRI International,  DR-UK Holdings,
          Bidco, Filofax Group and Filofax together with all documents and
          instruments (including, without limitation, stock certificates and
          stock powers with respect to the stock pledged thereunder) required to
          be delivered pursuant thereto;

                      (7) executed  counterparts  of   the  Security  Agreements
          executed  by each of Day  Runner,  Filofax  and  each of Day  Runner's
          domestic Subsidiaries,  together with all documents and instruments
          (including,  without limitation,  Uniform  Commercial  Code  financing
          statements) required  to  be delivered  pursuant  thereto or as
          reasonably  requested by the  Administrative Agent to be  filed,
          registered  or  recorded  to create  or  perfect  the Liens intended
          to be created thereunder;

                      (8) with  respect to each   Borrower   and  any  of  their
          respective Subsidiaries that is a Party to any Loan Document, such
          documentation as the  Administrative  Agent  may  reasonably  require
          to establish the  due organization, valid existence and good standing
          of such Person, qualification to engage in  business in each  material
          jurisdiction  in which it is  engaged in business or required to be so
          qualified,  such  Person's  authority to execute, deliver and perform
          the Loan  Documents  to which it is a Party, the  identity, authority
          and capacity of each Responsible Official thereof authorized to act on
          its  behalf, including certified copies of articles of  incorporation
          and amendments  thereto, bylaws and amendments thereto, certificates
          of good standing, certificates of corporate resolutions, incumbency
          certificates,Certificates of Responsible Officials,  and the like, in
          each case to the extent applicable in the relevant jurisdiction;

                     (9)  the  written opinion of Orrick, Herrington & Sutcliffe
          LLP, in form and substance reasonably  satisfactory to Administrative
          Agent, in regard to the enforceability of this Agreement, each of the
          Borrower Guaranties, each of the Subsidiary Guaranties,  the Pledge
          Agreement executed by Day Runner, the Security Agreement executed by
          Day Runner,  the perfection of the Liens on the personal property
          collateral of Day Runner granted pursuant to such Security Agreement,
          the perfection and priority under California law of the Liens on the
          shares of capital stock pledged  pursuant to such Pledge Agreement and
          covering such other matters  relating to this Agreement and the other
          Loan  Documents as the  Administrative  Agent shall request,  in each
          case,  subject to  customary qualifications  and exceptions  (and Day
          Runner hereby  requests such counsel to  deliver such opinion);

                       (10) the written  opinion of Skadden, Arps, Slate,
          Meagher & Flom LLP, in form and substance reasonably satisfactory to
          Administrative Agent, in  regard  to the  enforceability  of  this
          Agreement,  each  of the  Borrower Guaranties,  each of the Subsidiary
          Guaranties,  each  of  the  Pledge  Agreements  executed  by  DRI
          International,  DR-UK Holdings,  Filofax Group and Filofax,  the
          Security  Agreement  executed by  Filofax,  the  perfection  of the
          Liens on the personal  property  collateral  of Filofax  granted
          pursuant  to such  Security Agreement,  the  perfection  and priority
          under English law of the Liens on the shares of capital stock pledged
          pursuant to such Pledge  Agreements and covering such other matters
          relating to this  Agreement and the other Loan  Documents as the
          Administrative Agent shall request, in each case, subject to customary
          qualifications  and exceptions  (and Day Runner hereby  requests such
          counsel to deliver such opinion);

                       (11) the written opinion of Gowling, Strathy & Henderson,
          in form and substance reasonably satisfactory to Administrative Agent,
          in regard to the  pledge of the  capital  stock of DRC  pursuant  to a
          Pledge  Agreement  and covering  such  other matters relating  to this
          Agreement  and the other Loan Documents as the  Administrative  Agent
          shall request,  in each case, subject to customary  qualifications and
          exceptions  (and Day Runner hereby  requests such counsel to deliver
          such opinion);

                       (12) a Certificate of the chief financial officer of each
          of the  Borrowers, certifying that the representations contained in
          Article  4 are true and correct in all material respects; and

                       (13) such other assurances, certificates, documents,
          consents or opinions as the Administrative Agent or the Requisite
          Lenders reasonably may require.

               (b) The Fees  payable  pursuant  to  Section  3.4 shall have been
          paid.

               (c) No material action,  suit,  proceeding or investigation shall
          be pending against any Borrower; no law, regulation, judgment or court
          order  shall  be  applicable  that  restrains,   prevents  or  imposes
          materially  adverse  conditions upon the making of the Loans; and each
          Borrower and Subsidiary Guarantor shall have received all governmental
          and  material  third  party  approvals   necessary  for  such  Party's
          execution of the Loan Documents to which it is a party;

               (d) No circumstance or event shall have occurred that constitutes
          a Material Adverse Effect since June 30, 1999.

               (e) The reasonable costs and expenses of the Administrative Agent
          in  connection  with the  preparation  of the Loan  Documents  payable
          pursuant to Section 11.3, and invoiced with  supporting  detail to the
          Borrowers prior to the Effective Date, shall have been paid.

               (f) The representations and warranties of each Borrower contained
          in Article 4 of this  Agreement  and in each other  Loan  Document  to
          which  such  Borrower  is a party  shall  be true and  correct  in all
          material respects.

               (g) Borrowers  and any other Parties shall be in compliance  with
          all the terms and provisions of the Loan  Documents,  and after giving
          effect to the initial  Loan, no Default or Event of Default shall have
          occurred and be continuing.

               (h) Day Runner, as agent for each of the directors of Filofax and
          Filofax Group, shall have received a letter reasonably satisfactory to
          it from each of the  Administrative  Agent, the Issuing Lender and the
          Lenders  agreeing  not to rely on, or to take any action  against  any
          such director, in his or her capacity as such, in connection with, any
          statement made or other action taken under Sections 151 through 158 of
          the Companies Act in connection  with the  guaranties of, and granting
          of Liens to secure, the Obligations made by Filofax and Filofax Group.

               (i) On or prior to the  Effective  Date,  Topps shall (i) execute
          and deliver to the  Administrative  Agent a Security Agreement and any
          and all other documents or instruments as the Administrative Agent may
          request  in  order to  create  a Lien in  favor of the  Administrative
          Agent,  for the benefit of the Lenders,  on any real property owned by
          Topps,  (ii) take, or cause to be taken, any other actions,  including
          filings with any appropriate  governmental agencies, in order to cause
          such Lien to be valid and enforceable  under applicable law, and (iii)
          provide to the Administrative Agent in connection therewith such legal
          opinions, certificates and other documents as are reasonably requested
          by the Administrative Agent.

               (j) All legal  matters  relating to the Loan  Documents  shall be
          reasonably satisfactory to the Administrative Agent.

     8.2 Revolving Loans.

     The  obligation  of  each  Lender  to  make  any  Revolving  Loan,  and the
obligation  of the Issuing  Lender to issue any Letter of Credit,  is subject to
the Effective Date having occurred,  and to the following  conditions  precedent
(unless the  Requisite  Lenders or, in any case where the approval of all of the
Lenders is required pursuant to Section 11.2, all of the Lenders,  in their sole
and absolute discretion, shall agree otherwise):

               (a) Except for  representations  and warranties  which  expressly
          speak as of a particular  date,  the  representations  and  warranties
          contained  in  Article  4 shall be true and  correct  in all  material
          respects  on and as of the  date of the  Loan as  though  made on that
          date;

               (b) No  Default or Event of Default  shall have  occurred  and be
          continuing;

               (c) No circumstance or event shall have occurred that constitutes
          a Material Adverse Effect since June 30, 1999.

                                    Article 9
              EVENTS OF DEFAULT AND REMEDIES UPON EVENT OF DEFAULT

     9.1 Events of Default.

     The  existence or  occurrence  and  continuation  of any one or more of the
following  events,  whatever  the reason  therefor  and under any  circumstances
whatsoever, shall constitute an Event of Default:

               (a) A Borrower fails to pay any principal on any of the Loans, or
          any portion thereof, on the date when due; or

               (b) A Borrower fails to pay any interest on any of the Loans,  or
          any fees under  Sections  3.3,  3.4 or 3.5,  or any  portion  thereof,
          within three (3) Banking Days after the date when due; or fails to pay
          any  other  fee or  amount  payable  to the  Lenders  under  any  Loan
          Document,  or any portion thereof,  within ten (10) Banking Days after
          demand therefor; or

               (c) A  Borrower  fails  to  comply  with  any  of  the  covenants
          contained in Article 6 or with Sections 5.2, 5.5, 5.6, 5.9, 5.13, 5.14
          (other than Section 5.14(c)) or 7.1; or

               (d) A Borrower or any other Party fails to perform or observe any
          other  covenant or agreement (not specified in clause (a), (b), (c) or
          (d) above)  contained in any Loan Document on its part to be performed
          or observed within thirty (30) days after the occurrence thereof; or

               (e)  Any  representation  or  warranty  of  any  Borrower  or any
          Subsidiary Guarantor made in any Loan Document,  or in any certificate
          or other writing delivered by any Borrower or any Subsidiary Guarantor
          pursuant to any Loan Document, proves to have been incorrect when made
          or reaffirmed in any material respect; or

               (f) A Borrower (i) fails to pay the  principal,  or any principal
          installment, of any present or future Indebtedness of $50,000 or more,
          or any guaranty of present or future  Indebtedness of $50,000 or more,
          on its part to be paid,  when due (or within any stated grace period),
          whether  at the  stated  maturity,  upon  acceleration,  by  reason of
          required  prepayment  or otherwise or (ii) fails to perform or observe
          any other term,  covenant or  agreement on its part to be performed or
          observed, or suffers any event of default to occur, in connection with
          any  present or future  Indebtedness  of  $50,000  or more,  or of any
          guaranty of present or future Indebtedness of $50,000 or more, if as a
          result of such failure or sufferance any holder or holders thereof (or
          an agent or trustee on its or their  behalf)  has the right to declare
          such  Indebtedness  due  before the date on which it  otherwise  would
          become due or the right to require a Borrower  to redeem or  purchase,
          or  offer  to  redeem  or  purchase,   all  or  any  portion  of  such
          Indebtedness; or

               (g) Any  Loan  Document,  at any time  after  its  execution  and
          delivery  and for any reason  other than the  agreement  or action (or
          omission  to  act)  of the  Administrative  Agent  or the  Lenders  or
          satisfaction  in  full of all the  Obligations,  ceases  to be in full
          force and effect or is declared by a court of  competent  jurisdiction
          to be null and void,  invalid or unenforceable in any respect which is
          materially  adverse  to the  interests  of the  Lenders;  or any Party
          thereto  denies in  writing  that it has any or further  liability  or
          obligation under any Loan Document,  or purports to revoke,  terminate
          or rescind same; or

               (h) Any Change in Control occurs; or

               (i) A final  judgment  against  any  Borrower  or any  Subsidiary
          Guarantor  is entered  for the  payment of money in excess of $500,000
          (not  covered by  insurance  or for which an insurer has  reserved its
          rights) and, absent procurement of a stay of execution,  such judgment
          remains  unsatisfied  for thirty (30)  calendar days after the date of
          entry of  judgment,  or in any event later than five (5) days prior to
          the date of any proposed  sale  thereunder;  or any writ or warrant of
          attachment or execution or similar process is issued or levied against
          the Property of any such Person and is not released,  vacated or fully
          bonded within thirty (30) calendar days after its issue or levy; or

               (j) A Borrower or any Subsidiary Guarantor institutes or consents
          to the  institution  of any  proceeding  under  a  Debtor  Relief  Law
          relating to it or to all or any material part of its  Property,  or is
          unable or admits in  writing  its  inability  to pay its debts as they
          mature,  or makes an  assignment  for the  benefit  of  creditors;  or
          applies for or consents to the  appointment of any receiver,  trustee,
          custodian, conservator,  liquidator,  rehabilitator or similar officer
          for  it or for  all  or any  material  part  of its  Property;  or any
          receiver, trustee, custodian, conservator,  liquidator,  rehabilitator
          or similar officer is appointed  without the application or consent of
          that Person and the appointment continues undischarged or unstayed for
          sixty (60) calendar days; or any proceeding  under a Debtor Relief Law
          relating to any such  Person or to all or any part of its  Property is
          instituted   without  the   consent  of  that  Person  and   continues
          undismissed or unstayed for sixty (60) calendar days; or

               (k) The occurrence of an Event of Default (as such term is or may
          hereafter be  specifically  defined in any other Loan Document)  under
          any other Loan Document; or

                  (l) Any Pension  Plan  maintained  by any  Borrower is finally
          determined by the PBGC to have a material "accumulated funding
          deficiency" as that term is defined in Section 302 of ERISA in excess
          of an amount  equal to 5% of the consolidated total assets of such
          Borrower as of the most-recently ended Fiscal Quarter; or

               (m)  Any  Lien  purported  to be  created  under  any  Collateral
          Document  shall cease to be, or shall be  asserted by any  Borrower or
          any of its  Subsidiaries  not to be, a valid and perfected Lien on any
          Collateral,  with the priority  required by the applicable  Collateral
          Document,  except as a result of the sale or other  disposition of the
          applicable  Collateral  in a  transaction  permitted  under  the  Loan
          Documents.

     9.2 Remedies Upon Event of Default.

     Without limiting any other rights or remedies of the  Administrative  Agent
or the Lenders  provided  for  elsewhere  in this  Agreement,  or the other Loan
Documents, or by applicable Law, or in equity, or otherwise:

               (a) Upon the occurrence, and during the continuance, of any Event
          of Default other than an Event of Default described in Section 9.1(j):

                   (1) the  Administrative Agent may,  and at the request of the
          Requisite Lenders shall, by written notice to the Borrowers, declare
          that all or any portion of the Revolving Commitment and all other
          obligations of the Lenders and the Issuing Bank under the Revolving
          Commitment are terminated; and

                   (2) the Administrative Agent may, and at the request of the
          Requisite Lenders shall,  declare all or any part of the unpaid
          principal of all Loans, all interest accrued and unpaid thereon and
          all other amounts  payable under the Loan Documents to be forthwith
          due and payable,  and shall notify each Borrower  thereof, whereupon
          the same shall become and be forthwith due and payable, without
          protest,  presentment,  notice of dishonor,  demand or further notice
          of any kind, all of which are expressly waived by each Borrower,  and
          the Borrowers shall,in connection therewith, pay to the Administrative
          Agent an amount in cash equal to the aggregate amount of all
          outstanding Letters of Credit to be held as cash collateral hereunder.

               (b) Upon the  occurrence  of any Event of  Default  described  in
          Section 9.1(j):

                           (1) the  Revolving  Commitment  and all other
          obligations of the Lenders shall terminate without notice to or demand
          upon any Borrower, which are expressly waived by each Borrower;

                           (2) an amount equal to the  aggregate  amount of  all
          outstanding  Letters  of Credit shall be  immediately due and  payable
          to the Issuing Lender without notice to or demand  upon any  Borrower,
          which  are expressly  waived  by each  Borrower, to be held by the
          Issuing  Lender  in an interest-bearing cash collateral account as
          collateral hereunder; and

                          (3)   the unpaid principal of all Loans,  all interest
          accrued and unpaid thereon and all other amounts payable under the
          Loan Documents shall be forthwith due and payable, without protest,
          presentment, notice of dishonor, demand or further notice of any kind,
          all of which are expressly waived by each Borrower.

               (c) Upon the occurrence and during the  continuation of any Event
          of Default, the Lenders and the Administrative  Agent, or any of them,
          without  notice  to  (except  as  expressly  provided  for in any Loan
          Document) or demand upon any Borrower,  which are expressly  waived by
          each Borrower, may proceed (but only with the consent of the Requisite
          Lenders) to protect,  exercise  and enforce  their rights and remedies
          under the Loan Documents against each Borrower and any other Party and
          such other rights and remedies as are provided by Law or equity.

               (d) The  order  and  manner  in which  the  Lenders'  rights  and
          remedies are to be exercised shall be determined by the Administrative
          Agent in its  sole  discretion,  unless  instructed  by the  Requisite
          Lenders,  in which  case,  by the  Requisite  Lenders  in  their  sole
          discretion,  and all payments received by the Administrative Agent and
          the Lenders,  or any of them,  during the  continuation of an Event of
          Default, shall, subject to Section 3.18, be applied first to the costs
          and expenses (including  reasonable  attorneys' fees and disbursements
          and the  reasonably  allocated  costs  of  attorneys  employed  by the
          Administrative Agent or by any Lender) of the Administrative Agent and
          of the  Lenders,  and  thereafter  paid pro rata to the Lenders in the
          same  proportions  that the aggregate  Obligations owed to each Lender
          under the Loan Documents bear to the aggregate  Obligations owed under
          the Loan Documents to all the Lenders,  without priority or preference
          among the Lenders.  Regardless  of how each Lender may treat  payments
          for the purpose of its own  accounting,  for the purpose of  computing
          Borrower's  Obligations hereunder and under the Notes, payments during
          the continuation of an Event of Default shall be applied first, to the
          costs and expenses of the Administrative Agent and the Lenders, as set
          forth above, second, to the payment of accrued and unpaid interest due
          under any Loan Documents to and including the date of such application
          (ratably, and without duplication, according to the accrued and unpaid
          interest  due under each of the Loan  Documents),  and  third,  to the
          payment of all other amounts (including principal and fees) then owing
          to the  Administrative  Agent or the Lenders under the Loan Documents.
          No application of payments will cure any Event of Default,  or prevent
          acceleration,  or continued acceleration, of amounts payable under the
          Loan Documents,  or prevent the exercise,  or continued  exercise,  of
          rights or remedies of the Lenders hereunder or thereunder or at Law or
          in equity.

                                   Article 10
                            THE ADMINISTRATIVE AGENT

     10.1 Appointment and Authorization.

     Subject to Section  10.8,  each  Lender  hereby  irrevocably  appoints  and
authorizes the  Administrative  Agent to take such action as agent on its behalf
and to exercise  such powers under the Loan  Documents  as are  delegated to the
Administrative  Agent by the terms  thereof  or are  reasonably  incidental,  as
determined  by  the  Administrative   Agent,   thereto.   This  appointment  and
authorization  is intended solely for the purpose of facilitating  the servicing
of the Loans and does not constitute  appointment of the Administrative Agent as
trustee for any Lender or as  representative of any Lender for any other purpose
and, except as specifically set forth in the Loan Documents to the contrary, the
Administrative  Agent shall take such action and exercise such powers only in an
administrative and ministerial capacity.

     10.2 Administrative Agent and Affiliates.

     Wells Fargo Bank, National  Association (and each successor  Administrative
Agent)  has the same  rights and powers  under the Loan  Documents  as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and  the  term  "Lender"  or  "Lenders"  includes  Wells  Fargo  Bank,  National
Association in its individual  capacity.  Wells Fargo Bank, National Association
(and each successor Administrative Agent) and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking,  trust or other
business  with any Borrower,  any  Subsidiary  thereof,  or any Affiliate of any
Borrower or any Subsidiary thereof,  as if it were not the Administrative  Agent
and  without  any duty to account  therefor  to the  Lenders.  Wells Fargo Bank,
National Association (and each successor  Administrative Agent) need not account
to any other Lender for any monies received by it for reimbursement of its costs
and expenses as  Administrative  Agent hereunder,  or (subject to Section 11.10)
for any  monies  received  by it in its  capacity  as a  Lender  hereunder.  The
Administrative  Agent shall not be deemed to hold a fiduciary  relationship with
any  Lender  and no  implied  covenants,  functions,  responsibilities,  duties,
obligations or liabilities  shall be read into this Agreement or otherwise exist
against the Administrative Agent.

     10.3 Lenders' Credit Decisions.

     Each Lender agrees that it has, independently and without reliance upon the
Administrative  Agent,  any other  Lender or the  directors,  officers,  agents,
employees or attorneys of the  Administrative  Agent or of any other Lender, and
instead  in  reliance  upon  information  supplied  to it by or on behalf of the
Borrowers and upon such other information as it has deemed appropriate, made its
own independent credit analysis and decision to enter into this Agreement.  Each
Lender also agrees that it shall,  independently  and without  reliance upon the
Administrative  Agent,  any other  Lender or the  directors,  officers,  agents,
employees  or  attorneys  of the  Administrative  Agent or of any other  Lender,
continue to make its own independent  credit analyses and decisions in acting or
not acting under the Loan Documents.

     10.4 Action by Administrative Agent.

               (a) Absent actual  knowledge of the  Administrative  Agent of the
          existence of a Default,  the  Administrative  Agent may assume that no
          Default has  occurred  and is  continuing,  unless the  Administrative
          Agent  (or the  Lender  that is then  the  Administrative  Agent)  has
          received  notice from a Borrower  stating the nature of the Default or
          has  received  notice from a Lender  stating the nature of the Default
          and that such Lender  considers the Default to have occurred and to be
          continuing.

               (b) The Administrative Agent has only those obligations under the
          Loan Documents as are expressly set forth therein.

               (c) Except  for any  obligation  expressly  set forth in the Loan
          Documents and as long as the  Administrative  Agent may assume that no
          Event of Default has occurred and is  continuing,  the  Administrative
          Agent may, but shall not be required to,  exercise its  discretion  to
          act or not act, except that the Administrative Agent shall be required
          to act or not act upon the  instructions of the Requisite  Lenders (or
          of all the Lenders,  to the extent required by Section 11.2) and those
          instructions  shall be binding upon the  Administrative  Agent and all
          the  Lenders,  provided  that the  Administrative  Agent  shall not be
          required  to act or not act if to do so would be  contrary to any Loan
          Document  or to  applicable  Law or would  result,  in the  reasonable
          judgment of the Administrative Agent, in substantial risk of liability
          to the Administrative Agent.

               (d) If the  Administrative  Agent has received a notice specified
          in clause (a), the Administrative  Agent shall immediately give notice
          thereof to the Lenders and shall act or not act upon the  instructions
          of the  Requisite  Lenders  (or  of all  the  Lenders,  to the  extent
          required by Section  11.2),  provided  that the  Administrative  Agent
          shall not be  required to act or not act if to do so would be contrary
          to any Loan  Document or to  applicable  Law or would  result,  in the
          reasonable  judgment of the Administrative  Agent, in substantial risk
          of  liability  to the  Administrative  Agent,  and except  that if the
          Requisite Lenders (or all the Lenders, if required under Section 11.2)
          fail,  for five (5) Banking  Days after the receipt of notice from the
          Administrative  Agent, to instruct the Administrative  Agent, then the
          Administrative Agent, in its sole discretion, may act or not act as it
          deems advisable for the protection of the interests of the Lenders.

               (e) The  Administrative  Agent  shall  have no  liability  to any
          Lender for  acting,  or not acting,  as  instructed  by the  Requisite
          Lenders  (or  all  the  Lenders,  if  required  under  Section  11.2),
          notwithstanding any other provision hereof.

     10.5 Liability of Administrative Agent.

     Neither  the  Administrative  Agent  nor  any of its  directors,  officers,
agents, employees or attorneys shall be liable for any action taken or not taken
by them under or in  connection  with the Loan  Documents,  except for their own
gross negligence or willful misconduct. Without limitation on the foregoing, the
Administrative  Agent  and  its  directors,   officers,  agents,  employees  and
attorneys:

               (a) May treat the payee of any Note as the holder  thereof  until
          the Administrative Agent receives notice of the assignment or transfer
          thereof,  in form satisfactory to the Administrative  Agent, signed by
          the  payee,  and may treat each  Lender as the owner of that  Lender's
          interest in the  Obligations  for all purposes of this Agreement until
          the Administrative Agent receives notice of the assignment or transfer
          thereof,  in form satisfactory to the Administrative  Agent, signed by
          that Lender;

               (b) May consult  with legal  counsel  (including  in-house  legal
          counsel),  accountants  (including  in-house  accountants)  and  other
          professionals  or  experts  selected  by it,  or with  legal  counsel,
          accountants  or other  professionals  or experts for Borrowers  and/or
          their  Subsidiaries  or the  Lenders,  and shall not be liable for any
          action taken or not taken by it in good faith in  accordance  with any
          advice of such legal counsel,  accountants or other  professionals  or
          experts;

               (c) Shall not be  responsible  to any Lender  for any  statement,
          warranty or representation made in any of the Loan Documents or in any
          notice,  certificate,  report,  request or other statement (written or
          oral) given or made in connection with any of the Loan Documents;

               (d)  Except  to the  extent  expressly  set  forth  in  the  Loan
          Documents,  shall have no duty to ask or inquire as to the performance
          or observance by the Borrowers or their respective Subsidiaries of any
          of the terms,  conditions or covenants of any of the Loan Documents or
          to inspect any  collateral  or any  Property,  books or records of the
          Borrowers or their Subsidiaries;

               (e) Will not be  responsible to any Lender for the due execution,
          legality,  validity,   enforceability,   genuineness,   effectiveness,
          sufficiency  or value of any Loan  Document,  any other  instrument or
          writing furnished pursuant thereto or in connection therewith,  or any
          Collateral or the perfection of any Lien thereon;

               (f) Will not incur  any  liability  by  acting  or not  acting in
          reliance  upon  any  Loan  Document,  notice,  consent,   certificate,
          statement,  request or other  instrument  or writing  believed in good
          faith by it to be genuine  and  signed or sent by the proper  party or
          parties; and

                  (g) Will not incur any liability for any arithmetical error in
computing  any amount  paid or  payable by any  Borrower  or any  Subsidiary  or
Affiliate  thereof or paid or  payable to or  received  or  receivable  from any
Lender  under  any Loan  Document,  including,  without  limitation,  principal,
interest, commitment fees, Loans and other amounts; provided that, promptly upon
discovery of such an error in computation, the Administrative Agent, the Lenders
and  (to  the  extent  applicable)  any  Borrower  and/or  its  Subsidiaries  or
Affiliates  shall make such  adjustments  as are necessary to correct such error
and to restore the parties to the position that they would have occupied had the
error not occurred.

     10.6 Indemnification.

     Each  Lender  shall,  ratably  in  accordance  with its  proportion  of the
aggregate  principal  amount of the Loans  outstanding,  indemnify  and hold the
Administrative  Agent  and  its  directors,   officers,  agents,  employees  and
attorneys  harmless  against  any  and  all  liabilities,  obligations,  losses,
damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
of any kind or  nature  whatsoever  (including  reasonable  attorneys'  fees and
disbursements  and allocated costs of attorneys  employed by the  Administrative
Agent) that may be imposed on, incurred by or asserted against it or them in any
way relating to or arising out of the Loan Documents (other than losses incurred
by reason of the failure of any Borrower to pay the Indebtedness  represented by
the  Notes)  or any  action  taken or not  taken by it as  Administrative  Agent
thereunder,  except  such as result  from its own gross  negligence  or  willful
misconduct. Without limitation on the foregoing, each Lender shall reimburse the
Administrative  Agent  upon  demand  for that  Lender's  Pro  Rata  Share of any
out-of-pocket cost or expense incurred by the Administrative Agent in connection
with the  negotiation,  preparation,  execution,  delivery,  amendment,  waiver,
restructuring,   reorganization   (including   a   bankruptcy   reorganization),
enforcement or attempted  enforcement of the Loan Documents,  to the extent that
any  Borrower or any other Party is required by Section 11.3 to pay that cost or
expense  but fails to do so upon  demand.  Nothing  in this  Section  10.6 shall
entitle the Administrative  Agent or any indemnitee referred to above to recover
any  amount  from  the  Lenders  if and to  the  extent  that  such  amount  has
theretofore  been recovered from a Borrower or any of its  Subsidiaries.  To the
extent  that the  Administrative  Agent or any  indemnitee  referred to above is
later reimbursed such amount by a Borrower or any of its Subsidiaries,  it shall
return the amounts paid to it by the Lenders in respect of such amount.

     10.7 Successor Administrative Agent.

     The  Administrative  Agent may, and at the request of the Requisite Lenders
shall, resign as Administrative  Agent upon reasonable notice to the Lenders and
each  Borrower   effective  upon   acceptance  of  appointment  by  a  successor
Administrative Agent. If the Administrative Agent shall resign as Administrative
Agent under this Agreement,  the Requisite  Lenders shall appoint from among the
Lenders a  successor  Administrative  Agent  for the  Lenders,  which  successor
Administrative Agent shall be approved by each Borrower (and such approval shall
not be unreasonably withheld or delayed).  If no successor  Administrative Agent
is  appointed   prior  to  the  effective   date  of  the   resignation  of  the
Administrative  Agent, the  Administrative  Agent may appoint,  after consulting
with the Lenders and each Borrower, a successor  Administrative Agent from among
the Lenders. Upon the acceptance of its appointment as successor  Administrative
Agent hereunder,  such successor  Administrative  Agent shall succeed to all the
rights,  powers and  duties of the  retiring  Administrative  Agent and the term
"Administrative  Agent" shall mean such successor  Administrative  Agent and the
retiring Administrative Agent's appointment, powers and duties as Administrative
Agent shall be terminated. After any retiring Administrative Agent's resignation
hereunder  as  Administrative  Agent,  the  provisions  of this  Article 10, and
Sections  11.3,  11.11 and 11.22,  shall  inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative  Agent under this
Agreement.  Notwithstanding the foregoing,  if (a) the Administrative  Agent has
not been paid its agency fees under Section 3.5 or has not been  reimbursed  for
any expense  reimbursable  to it under Section 11.3, in either case for a period
of at least one (1) year and (b) no successor  Administrative Agent has accepted
appointment  as  Administrative  Agent by the date  which is  thirty  (30)  days
following a retiring Administrative Agent's notice of resignation,  the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the  Lenders  shall  perform all of the duties of the  Administrative  Agent
hereunder until such time, if any, as the Requisite  Lenders appoint a successor
Administrative Agent as provided for above.

     10.8 No Obligations of Borrowers.

     Nothing  contained  in this  Article 10 shall be deemed to impose  upon any
Borrower any  obligation in respect of the due and punctual  performance  by the
Administrative  Agent of its  obligations  to the Lenders under any provision of
this Agreement, and no Borrower shall have liability to the Administrative Agent
or any of the Lenders in respect of any failure by the  Administrative  Agent or
any Lender to perform any of its obligations to the Administrative  Agent or the
Lenders under this Agreement.  Without limiting the generality of the foregoing,
where any provision of this Agreement relating to the payment of any amounts due
and owing under the Loan Documents  provides that such payments shall be made by
a Borrower  to the  Administrative  Agent for the account of the  Lenders,  such
Borrower's  obligations  to the  Lenders in respect  of such  payments  shall be
deemed to be satisfied  upon the making of such  payments to the  Administrative
Agent in the manner provided by this Agreement.

                                   Article 11
                                  MISCELLANEOUS

     11.1 Cumulative Remedies; No Waiver.

     The rights, powers, privileges and remedies of the Administrative Agent and
the Lenders provided herein or in any Note or other Loan Document are cumulative
and not exclusive of any right,  power,  privilege or remedy  provided by Law or
equity.  No  failure  or delay on the  part of the  Administrative  Agent or any
Lender in  exercising  any right,  power,  privilege or remedy may be, or may be
deemed to be, a waiver  thereof;  nor may any single or partial  exercise of any
right, power,  privilege or remedy preclude any other or further exercise of the
same or any other right, power, privilege or remedy. The terms and conditions of
Article 10 (other than Section 10.8) hereof are inserted for the sole benefit of
the Administrative  Agent and the Lenders; the same may be waived in whole or in
part,  with or without  terms or  conditions,  in  respect  of any Loan  without
prejudicing the Administrative  Agent's or the Lenders' rights to assert them in
whole or in part in respect of any other Loan.

     11.2 Amendments; Consents.

     No amendment, modification, supplement, extension, termination or waiver of
any  provision  of this  Agreement  or any other Loan  Document,  no approval or
consent  thereunder  (other than a consent relating to a matter expressly stated
by this Agreement to require only the  Administrative  Agent's consent),  and no
consent to any  departure by any Borrower or any other Party  therefrom,  may in
any event be effective unless in writing signed by the Administrative Agent with
the  written  approval  of  the  Requisite  Lenders  (and,  in the  case  of any
amendment,  modification  or  supplement  of or to any Loan  Document to which a
Borrower is a Party, signed by such Borrower, and, in the case of any amendment,
modification or supplement to Article 10, signed by the  Administrative  Agent),
and then only in the specific  instance and for the specific purpose given; and,
without the approval in writing of all the Lenders, no amendment,  modification,
supplement,  termination,  waiver or consent (other than a consent relating to a
matter  expressly  stated by this  Agreement to require only the  Administrative
Agent's consent) may be effective:

               (a) To amend  or  modify  the  principal  of,  or the  amount  of
          principal,  principal  prepayments or the rate of interest payable on,
          any Loan or Note, or the amount of the Revolving Commitment or the Pro
          Rata Share of any Lender or the amount of any  commitment  fee payable
          to any Lender,  or any other fee or amount payable to any Lender under
          the Loan  Documents or to waive an Event of Default  consisting of the
          failure of any Borrower to pay when due principal, interest or any fee
          due to the Lenders or the Issuing Bank;

               (b) To postpone any date fixed for any payment of  principal  of,
          prepayment of principal of or any installment of interest on, any Loan
          or  Note or any  installment  of any  fee  due to the  Lenders  or the
          Issuing Bank, or to extend the term of the Revolving Commitment;

               (c) To amend  the  provisions  of the  definition  of  "Requisite
          Lenders", "Revolving Loan Maturity Date" or "Term Loan Maturity Date";
          or

               (d) To release  any  Subsidiary  Guarantor  from its  obligations
          under the Subsidiary Guaranty; or

               (e) To amend or waive any  provision of Article 8 or this Section
          11.2; or

               (f) To amend  any  provision  of this  Agreement  that  expressly
          requires the consent or approval of all the Lenders; or

               (g) To release any Collateral  (other than in connection with any
          sale or other  disposition  permitted under the Loan Documents)  that,
          individually  or in the aggregate,  constitutes  more than one-half of
          one percent (0.05%) of the net book value of the  consolidated  assets
          of  Day  Runner  and  its  Subsidiaries  as  set  forth  in  financial
          statements  delivered  to the  Administrative  Agent  and the  Lenders
          pursuant to Section 7.1 for the Fiscal Year ended June 30, 1999.

Any amendment, modification, supplement, termination, waiver or consent pursuant
to this Section 11.2 shall apply equally to, and shall be binding upon,  all the
Lenders and the Administrative Agent.

     11.3 Costs, Expenses and Taxes.

     Borrowers,  jointly and  severally,  shall pay within ten (10) Banking Days
after demand,  accompanied  by an invoice  therefor,  the  reasonable  costs and
expenses  of the  Administrative  Agent  in  connection  with  the  negotiation,
preparation,  syndication,  execution and delivery of the Loan Documents and any
amendment  thereto or waiver thereof.  Borrowers,  jointly and severally,  shall
also pay on demand, accompanied by an invoice therefor, the reasonable costs and
expenses  of the  Administrative  Agent and the Lenders in  connection  with the
restructuring,  reorganization  (including  a bankruptcy  reorganization  of any
Borrower or any of their respective  Subsidiaries)  and enforcement or attempted
enforcement of the Loan Documents, and any matter related thereto. The foregoing
costs and expenses shall include any  applicable  filing fees,  recording  fees,
search  fees,  and other  out-of-pocket  expenses  and the  reasonable  fees and
out-of-pocket  expenses of any legal  counsel  (including  reasonably  allocated
costs of any in-house legal counsel of the Administrative  Agent or any Lender),
independent  public  accountants  and  other  outside  experts  retained  by the
Administrative  Agent or any Lender,  whether or not such costs and expenses are
incurred  or suffered by the  Administrative  Agent or any Lender in  connection
with or during the course of any  bankruptcy  or insolvency  proceedings  of any
Borrower or any Subsidiary thereof. Borrowers,  jointly and severally, shall pay
any and all  documentary  and other  taxes,  excluding  (i) taxes  imposed on or
measured  in whole or in part by a  Lender's  overall  net  income  or net worth
imposed on it by (A) any  jurisdiction  (or  political  subdivision  thereof) in
which it is organized or maintains  its principal  office or Eurodollar  Lending
Office or (B) any jurisdiction (or political subdivision thereof) in which it is
"doing  business"  or (ii) any  withholding  taxes or other taxes based on gross
income  imposed by the United  States of America for any period with  respect to
which it has  failed to provide  Borrowers  with the  appropriate  form or forms
required  by Section  11.21,  to the  extent  such  forms are then  required  by
applicable Laws, and all costs, expenses, fees and charges payable or determined
to be payable in connection with the filing or recording of this Agreement,  any
other Loan Document or any other instrument or writing to be delivered hereunder
or thereunder, or in connection with any transaction pursuant hereto or thereto,
and shall reimburse, hold harmless and indemnify on the terms set forth in 11.11
the  Administrative  Agent and the  Lenders  from and  against any and all loss,
liability or legal or other expense with respect to or resulting  from any delay
in paying or failure to pay any such tax, cost,  expense,  fee or charge or that
any of them may suffer or incur by reason of the failure of any Party to perform
any of its Obligations.

     11.4 Nature of Lenders' Obligations.

     The obligations of the Lenders hereunder are several and not joint or joint
and several.  Nothing contained in this Agreement or any other Loan Document and
no  action  taken  by the  Administrative  Agent or the  Lenders  or any of them
pursuant  hereto  or  thereto  may,  or may be  deemed  to,  make the  Lenders a
partnership,  an  association,  a joint  venture or other  entity,  either among
themselves  or with the Borrowers or any  Affiliate of any of the  Borrowers.  A
default  by any Lender  will not  increase  the Pro Rata Share of the  Revolving
Commitment  attributable to any other Lender.  Any Lender not in default may, if
it desires,  assume in such  proportion as the  nondefaulting  Lenders agree the
obligations  of any  Lender  in  default,  but is not  obligated  to do so.  The
Administrative  Agent agrees that it will use its best efforts  either to induce
promptly the other Lenders to assume the  obligations  of a Lender in default or
to obtain promptly another Lender,  reasonably satisfactory to the Borrowers, to
replace such a Lender in default.

     11.5 Survival of Representations and Warranties.

     All  representations  and warranties  contained herein or in any other Loan
Document,  or in any  certificate or other writing  delivered by or on behalf of
any one or more of the Parties to any Loan Document,  will survive the making of
the Loans  hereunder and the execution and delivery of the Notes,  and have been
or  will  be  relied  upon  by  the   Administrative   Agent  and  each  Lender,
notwithstanding any investigation made by the Administrative Agent or any Lender
or on their behalf.

     11.6 Notices.

     Except as otherwise expressly provided in the Loan Documents,  all notices,
requests, demands, directions and other communications provided for hereunder or
under  any  other  Loan  Document  must  be  in  writing  and  must  be  mailed,
telegraphed,  telecopied,  dispatched by commercial  courier or delivered to the
appropriate  party  at the  address  set  forth on the  signature  pages of this
Agreement  or other  applicable  Loan  Document  or, as to any party to any Loan
Document,  at any other address as may be  designated by it in a written  notice
sent to all other parties to such Loan Document in accordance with this Section.
Except as  otherwise  expressly  provided in any Loan  Document,  if any notice,
request,  demand,  direction or other communication required or permitted by any
Loan Document is given by mail it will be effective on the earlier of receipt or
the fourth  Banking Day after deposit in the United States mail with first class
or airmail postage  prepaid;  if given by telegraph or cable,  when delivered to
the telegraph company with charges prepaid;  if given by telecopier,  when sent;
if dispatched by commercial courier, on the scheduled delivery date; or if given
by personal delivery, when delivered.

     11.7 Execution of Loan Documents.

     Unless the  Administrative  Agent  otherwise  specifies with respect to any
Loan Document, (a) this Agreement and any other Loan Document may be executed in
any number of  counterparts  and any party  hereto or thereto  may  execute  any
counterpart,  each of which when executed and delivered  will be deemed to be an
original  and all of which  counterparts  of this  Agreement  or any other  Loan
Document,  as the case may be, when taken  together will be deemed to be but one
and the  same  instrument  and (b)  execution  of any  such  counterpart  may be
evidenced  by a telecopier  transmission  of the  signature  of such party.  The
execution of this  Agreement  or any other Loan  Document by any party hereto or
thereto will not become effective until counterparts  hereof or thereof,  as the
case may be, have been executed by all the parties hereto or thereto.

     11.8 Binding Effect; Assignment.

               (a) This  Agreement  and the other Loan  Documents  to which each
          Borrower  is a Party will be binding  upon and inure to the benefit of
          Borrowers,  the Administrative  Agent, each of the Lenders,  and their
          respective successors and assigns,  except that no Borrower may assign
          its rights  hereunder or thereunder or any interest  herein or therein
          without the prior written  consent of all the Lenders.  Any Lender may
          at any time pledge any of its Notes or any other instrument evidencing
          its rights as a Lender under this Agreement to a Federal Reserve Bank,
          but no such pledge  shall  release  that  Lender from its  obligations
          hereunder or grant to such Federal Reserve Bank the rights of a Lender
          hereunder absent foreclosure of such pledge.

               (b) From time to time following the Effective  Date,  each Lender
          may assign to one or more  Persons  all or any portion of its Pro Rata
          Share of the Revolving Commitment and/or Term Loans; provided that (i)
          such Person,  if not then a Lender or an  Affiliate  of the  assigning
          Lender, shall be approved by the Administrative Agent and (if no Event
          of Default  then  exists) the  Borrowers  (neither of which  approvals
          shall be unreasonably withheld or delayed), (ii) such assignment shall
          be evidenced by an Assignment and Acceptance, a copy of which shall be
          furnished to the Administrative Agent as hereinbelow  provided,  (iii)
          except in the case of an  assignment  to an Affiliate of the assigning
          Lender,  to  another  Lender  or of  the  entire  remaining  Revolving
          Commitment  of the  assigning  Lender or all of the  outstanding  Term
          Loans of such Lender,  the assignment shall assign the same percentage
          of the assigning  Lender's Pro Rata Share of the Revolving  Commitment
          and of the Term Loans owing to such  assigning  Lender,  and shall not
          assign a Pro Rata Share of the Revolving Commitment and the Term Loans
          that, in the aggregate, is equivalent to less than $5,000,000 and (iv)
          the effective date of any such assignment shall be as specified in the
          Assignment and Acceptance, but not earlier than the date which is five
          (5) Banking Days after the date the Administrative  Agent has received
          the  Assignment  and  Acceptance.  Upon  the  effective  date  of such
          Assignment and Acceptance,  the Person named therein shall be a Lender
          for all  purposes  of this  Agreement,  with the Pro Rata Share of the
          Revolving  Commitment  and Term Loans  therein  set forth and,  to the
          extent of such Pro Rata Share,  the assigning Lender shall be released
          from its  further  obligations  under this  Agreement.  Each  Borrower
          agrees  that it shall  execute and  deliver  (against  delivery by the
          assigning Lender to each Borrower of its Revolving Loan Notes and Term
          Loan Note) to such assignee Lender, Revolving Loan Notes and Term Loan
          Notes  evidencing  that  assignee  Lender's  Pro  Rata  Share  of  the
          Revolving  Commitment  and Term  Loans  and to the  assigning  Lender,
          Revolving  Loan Notes and Term Loan  Notes  evidencing  the  remaining
          balance Pro Rata Share retained by the assigning Lender.

               (c) By executing and delivering an Assignment and Acceptance, the
          Person  constituting the assignee  thereunder  acknowledges and agrees
          that:  (i) other than the  representation  and warranty that it is the
          legal  and  beneficial  owner of the Pro Rata  Share of the  Revolving
          Commitment and Term Loans being assigned thereby free and clear of any
          adverse  claim,  the assigning  Lender has made no  representation  or
          warranty and assumes no responsibility with respect to any statements,
          warranties  or  representations  made in or in  connection  with  this
          Agreement  or  the  execution,  legality,  validity,   enforceability,
          genuineness  or  sufficiency  of  this  Agreement  or any  other  Loan
          Document;  (ii) the  assigning  Lender has made no  representation  or
          warranty and assumes no  responsibility  with respect to the financial
          condition of the Borrowers or the  performance by the Borrowers of the
          Obligations;  (iii) it has received a copy of this Agreement, together
          with copies of the most recent financial statements delivered pursuant
          to Section  7.1 and such other  documents  and  information  as it has
          deemed  appropriate  to make its own credit  analysis  and decision to
          enter into such Assignment and Acceptance; (iv) it will, independently
          and without reliance upon the  Administrative  Agent or any Lender and
          based on such documents and  information as it shall deem  appropriate
          at the time,  continue to make its own credit  decisions  in taking or
          not taking action under this Agreement; (v) it appoints and authorizes
          the  Administrative  Agent to take such  action and to  exercise  such
          powers  under this  Agreement as are  delegated to the  Administrative
          Agent by this  Agreement;  and (vi) it will perform in accordance with
          their  terms  all of  the  obligations  which  by the  terms  of  this
          Agreement are required to be performed by it as a Lender.

               (d) The Administrative Agent shall maintain at the Administrative
          Agent's Office a copy of each  Assignment and Acceptance  delivered to
          it and a register (the  "Register") of the name and address of each of
          the Lenders  and the Pro Rata Share of the  Revolving  Commitment  and
          Term Loans held by each Lender,  giving effect to each  Assignment and
          Acceptance.  The Register  shall be available  during normal  business
          hours for  inspection  by any  Borrower or any Lender upon  reasonable
          prior notice to the Administrative Agent. After receipt of a completed
          Assignment and Acceptance executed by any Lender and an assignee,  and
          receipt of an  assignment  fee of $3,500 from such Lender or assignee,
          the Administrative Agent shall,  promptly following the effective date
          thereof,  provide to the Borrowers and the Lenders a revised  Schedule
          1.1 giving effect thereto. Each Borrower, the Administrative Agent and
          the Lenders shall deem and treat the Persons  listed as Lenders in the
          Register  as the  holders  and  owners  of the Pro  Rata  Share of the
          Revolving  Commitment  and Term Loans listed  therein for all purposes
          hereof,  and no  assignment  or transfer of any such Pro Rata Share of
          the Revolving  Commitment  and Term Loans shall be effective,  in each
          case  unless and until an  Assignment  and  Acceptance  effecting  the
          assignment  or  transfer  thereof  shall  have  been  accepted  by the
          Administrative  Agent and recorded in the Register as provided  above.
          Prior to such  recordation,  all  amounts  owed  with  respect  to the
          applicable  Pro Rata Share of the Revolving  Commitment and Term Loans
          shall  be owed to the  Lender  listed  in the  Register  as the  owner
          thereof,  and any request,  authority or consent of any Person who, at
          the time of making such  request or giving such  authority or consent,
          is listed in the Register as a Lender shall be conclusive  and binding
          on any subsequent holder,  assignee or transferee of the corresponding
          Pro Rata Share of the Revolving Commitment and Term Loans.

               (e) Each Lender may from time to time grant participations to one
          or more banks or other financial  institutions in a portion of its Pro
          Rata  Share of the  Revolving  Commitment  and Term  Loans;  provided,
          however, that (i) such Lender's obligations under this Agreement shall
          remain unchanged,  (ii) such Lender shall remain solely responsible to
          the other  parties  hereto for the  performance  of such  obligations,
          (iii) the participating  banks or other financial  institutions  shall
          not be a Lender hereunder for any purpose except, if the participation
          agreement so provides,  for the purposes of Sections  3.6,  3.7,  3.8,
          11.11 and 11.22 but only to the extent that the cost to the  Borrowers
          does not exceed the cost which the  Borrowers  would have  incurred in
          respect of such Lender absent the  participation,  (iv) the Borrowers,
          the Administrative  Agent and the other Lenders shall continue to deal
          solely and directly with such Lender in connection  with such Lender's
          rights and  obligations  under this Agreement,  (v) the  participation
          interest  shall be expressed as a percentage of the granting  Lender's
          Pro  Rata  Share  of  the   Revolving   Commitment   and  Term  Loans,
          respectively, as they then exist and shall not restrict an increase in
          the Revolving  Commitment,  or in the granting Lender's Pro Rata Share
          of  the   Revolving   Commitment,   so  long  as  the  amount  of  the
          participation interest is not affected thereby and (vi) the consent of
          the holder of such  participation  interest  shall not be required for
          amendments or waivers of provisions of the Loan  Documents  other than
          those which (A) extend the  Revolving  Loan Maturity Date or Term Loan
          Maturity Date or any other date upon which any payment of money is due
          to the Lenders,  (B) reduce the rate of interest on any Loan,  any fee
          or any other monetary  amount  payable to the Lenders,  (C) reduce the
          amount of any installment of principal due with respect to any Loan or
          (D) release any Subsidiary  Guarantor from its  obligations  under the
          Subsidiary Guaranty.

     11.9 Right of Setoff.

     If an Event of Default has occurred and is continuing,  the  Administrative
Agent or any Lender may exercise its rights  under  applicable  Laws and, to the
extent  permitted by  applicable  Laws,  apply any funds in any deposit  account
maintained  with it by any  Borrower  and/or any Property of any Borrower in its
possession against the Obligations.

     11.10 Sharing of Setoffs.

     Each Lender  severally agrees that if it, through the exercise of any right
of setoff,  banker's lien or  counterclaim  against any Borrower,  or otherwise,
receives  payment of the  Obligations  held by it that is ratably  more than any
other Lender,  through any means, receives in payment of the Obligations held by
that Lender,  then,  subject to applicable  Laws: (a) the Lender  exercising the
right of setoff,  banker's  lien or  counterclaim  or otherwise  receiving  such
payment shall purchase,  and shall be deemed to have  simultaneously  purchased,
from each of the other Lenders a participation  in the  Obligations  held by the
other Lenders and shall pay to the other  Lenders a purchase  price in an amount
so that the share of the  Obligations  held by each Lender after the exercise of
the right of setoff,  banker's lien or  counterclaim or receipt of payment shall
be in the same  proportion  that  existed  prior to the exercise of the right of
setoff,  banker's lien or counterclaim or receipt of payment; and (b) such other
adjustments and purchases of  participations  shall be made from time to time as
shall be equitable to ensure that all of the Lenders share any payment  obtained
in respect of the Obligations  ratably in accordance with each Lender's share of
the  Obligations  immediately  prior to, and without  taking into  account,  the
payment;  provided  that,  if all or any portion of a  disproportionate  payment
obtained  as a result of the  exercise  of the right of setoff,  banker's  lien,
counterclaim or otherwise is thereafter  recovered from the purchasing Lender by
any Borrower or any Person claiming  through or succeeding to the rights of such
Borrower,  the purchase of a  participation  shall be rescinded and the purchase
price  thereof  shall be  restored  to the extent of the  recovery,  but without
interest. Each Lender that purchases a participation in the Obligations pursuant
to this Section  11.10 shall from and after the purchase  have the right to give
all notices, requests,  demands,  directions and other communications under this
Agreement with respect to the portion of the  Obligations  purchased to the same
extent  as  though  the  purchasing  Lender  were  the  original  owner  of  the
Obligations  purchased.  Each  Borrower  expressly  consents  to  the  foregoing
arrangements and agrees that any Lender holding a participation in an Obligation
so purchased  pursuant to this Section  11.10 may exercise any and all rights of
setoff, banker's lien or counterclaim with respect to the participation as fully
as if the Lender were the original owner of the Obligation purchased.

     11.11 Indemnity by Borrowers.

     Borrowers jointly and severally agree to indemnify,  save and hold harmless
the  Administrative  Agent  and each  Lender  and  their  respective  directors,
officers,  agents, attorneys and employees (collectively the "Indemnitees") from
and against: (a) any and all claims, demands, actions or causes of action if the
claim, demand,  action or cause of action arises out of or relates to any act or
omission (or alleged act or omission) of any Borrower,  its Affiliates or any of
its officers,  directors or stockholders relating to the Revolving Commitment or
the Term Loans,  the use or  contemplated  use of  proceeds of any Loan,  or the
relationship  of the  Borrowers and the Lenders  under this  Agreement;  (b) any
administrative  or investigative  proceeding by any Governmental  Agency arising
out of or related to a claim,  demand,  action or cause of action  described  in
clause (a) above;  and (c) any and all  liabilities,  losses,  costs or expenses
(including  reasonable  attorneys'  fees and the reasonably  allocated  costs of
attorneys  employed by any  Indemnitee and  disbursements  of such attorneys and
other  professional  services) that any Indemnitee suffers or incurs as a result
of the  assertion of any  foregoing  claim,  demand,  action or cause of action;
provided that no Indemnitee  shall be entitled to  indemnification  for any loss
caused by its own gross negligence or willful misconduct.  If any claim, demand,
action or cause of action is asserted  against any  Indemnitee,  such Indemnitee
shall promptly  notify the Borrowers,  but the failure to so promptly notify the
Borrowers shall not affect the Borrowers'  obligations under this Section unless
such failure  materially  prejudices the Borrowers'  right to participate in the
contest  of such  claim,  demand,  action  or cause of  action,  as  hereinafter
provided.  Such  Indemnitee  may (and shall,  if requested  by the  Borrowers in
writing) contest the validity,  applicability and amount of such claim,  demand,
action or cause of action and shall permit the Borrowers to  participate in such
contest.  Any  Indemnitee  that  proposes to settle or  compromise  any claim or
proceeding  for which the  Borrowers  may be liable  for  payment  of  indemnity
hereunder shall give the Borrowers  written notice of the terms of such proposed
settlement or compromise  reasonably in advance of settling or compromising such
claim or  proceeding  and,  so long as no Event of Default has  occurred  and is
continuing,  shall obtain the Borrowers'  prior written consent (which shall not
be  unreasonably  withheld or delayed).  In connection  with any claim,  demand,
action or cause of action  covered by this Section  11.11  against more than one
Indemnitee,  all such Indemnitees shall be represented by the same legal counsel
(which may be a law firm engaged by the Indemnitees or attorneys  employed by an
Indemnitee or a combination of the foregoing)  selected by the Indemnitees  and,
so long as no  Event of  Default  has  occurred  and is  continuing,  reasonably
acceptable to the Borrowers;  provided that if such legal counsel  determines in
good faith that  representing all such Indemnitees would or is reasonably likely
to result in a conflict of interest under Laws or ethical principles  applicable
to such legal counsel,  then to the extent reasonably  necessary to avoid such a
conflict  of interest or to permit  unqualified  assertion  of such a defense or
counterclaim,   each   affected   Indemnitee   shall  be  entitled  to  separate
representation  by legal counsel  selected by that Indemnitee and, so long as no
Event of Default has occurred and is  continuing,  reasonably  acceptable to the
Borrowers,  with  all such  legal  counsel  using  reasonable  efforts  to avoid
unnecessary  duplication of effort by counsel for all  Indemnitees;  and further
provided that the Administrative  Agent (as an Indemnitee) shall at all times be
entitled to representation by separate legal counsel (which may be a law firm or
attorneys  employed  by  the  Administrative  Agent  or  a  combination  of  the
foregoing). Any obligation or liability of the Borrowers to any Indemnitee under
this Section 11.11 shall survive the expiration or termination of this Agreement
and the  repayment  of all Loans and the  payment and  performance  of all other
Obligations owed to the Lenders.

     11.12 Nonliability of the Lenders.

     Each Borrower acknowledges and agrees that:

               (a) Any  inspections  of any Property of any Borrower  made by or
          through the  Administrative  Agent or the Lenders are for  purposes of
          administration  of the Loan only and such  Borrower is not entitled to
          rely upon the same (whether or not such inspections are at the expense
          of such Borrower);

               (b) By accepting or approving  anything  required to be observed,
          performed,  fulfilled  or  given  to the  Administrative  Agent or the
          Lenders  pursuant to the Loan  Documents,  neither the  Administrative
          Agent nor the Lenders shall be deemed to have warranted or represented
          the sufficiency,  legality, effectiveness or legal effect of the same,
          or of any term, provision or condition thereof, and such acceptance or
          approval thereof shall not constitute a warranty or  representation to
          anyone  with  respect  thereto  by  the  Administrative  Agent  or the
          Lenders;

               (c) The relationship between the Borrowers and the Administrative
          Agent and the Lenders is, and shall at all times  remain,  solely that
          of borrowers  and lenders;  neither the  Administrative  Agent nor the
          Lenders  shall under any  circumstance  be construed to be partners or
          joint  venturers  of the  Borrowers or their  Affiliates;  neither the
          Administrative  Agent nor the Lenders shall under any  circumstance be
          deemed to be in a  relationship  of confidence or trust or a fiduciary
          relationship  with the  Borrowers or their  Affiliates,  or to owe any
          fiduciary  duty to the  Borrowers  or their  Affiliates;  neither  the
          Administrative   Agent  nor  the  Lenders   undertake  or  assume  any
          responsibility or duty to the Borrowers or their Affiliates to select,
          review, inspect, supervise, pass judgment upon or inform the Borrowers
          or their Affiliates of any matter in connection with their Property or
          the operations of the Borrowers or their Affiliates; the Borrowers and
          their  Affiliates  shall rely  entirely  upon their own judgment  with
          respect to such  matters;  and any  review,  inspection,  supervision,
          exercise of judgment or supply of information undertaken or assumed by
          the  Administrative  Agent or the  Lenders  in  connection  with  such
          matters is solely for the protection of the  Administrative  Agent and
          the Lenders and neither the Borrowers nor any other Person is entitled
          to rely thereon; and

               (d)  The  Administrative  Agent  and  the  Lenders  shall  not be
          responsible or liable to any Person for any loss, damage, liability or
          claim of any kind  relating to injury or death to Persons or damage to
          Property caused by the actions, inaction or negligence of any Borrower
          and/or its Affiliates and each Borrower  hereby  indemnifies and holds
          the  Administrative  Agent and the  Lenders  harmless on the terms set
          forth in Section 11.11 from any such loss, damage, liability or claim.

     11.13 No Third Parties Benefited.

     This  Agreement  is made for the  purpose of  defining  and  setting  forth
certain  obligations,  rights and duties of the  Borrowers,  the  Administrative
Agent and the  Lenders in  connection  with the Loans,  and is made for the sole
benefit of the  Borrowers,  the  Administrative  Agent and the Lenders,  and the
Administrative  Agent's  and the  Lenders'  successors  and  assigns.  Except as
provided in Sections  11.8 and 11.11,  no other  Person shall have any rights of
any nature hereunder or by reason hereof.

     11.14 Confidentiality.

     Each Lender agrees to hold any confidential information that it may receive
from  the  Borrowers  pursuant  to this  Agreement  in  confidence,  except  for
disclosure: (a) to other Lenders or Affiliates of a Lender; (b) to legal counsel
and  accountants  for the  Borrowers  or any Lender;  (c) to other  professional
advisors  to the  Borrowers  or any  Lender,  provided  that the  recipient  has
accepted such information subject to a confidentiality  agreement  substantially
similar to this Section 11.14; (d) to regulatory  officials having  jurisdiction
over that Lender;  (e) as required by Law or legal  process,  provided that each
Lender agrees to notify the Borrowers of any such disclosures  unless prohibited
by applicable  Laws, or in  connection  with any legal  proceeding to which that
Lender and the  Borrowers  are  adverse  parties;  and (f) to another  Person in
connection  with a disposition or proposed  disposition to that Person of all or
part of that Lender's  interests  hereunder or a  participation  interest in its
Notes. For purposes of the foregoing,  "confidential information" shall mean all
Projections,  information relating to acquisitions,  information relating to the
Borrowers'  businesses  and any other  information  respecting  the Borrowers or
their  Subsidiaries  reasonably  considered by the Borrowers to be confidential,
other than (i) information  previously  filed with any  Governmental  Agency and
available to the public,  (ii)  information  previously  published in any public
medium from a source other than, directly or indirectly,  that Lender, and (iii)
information  previously  disclosed by the Borrowers to any Person not associated
with the Borrowers which does not owe a professional duty of  confidentiality to
the Borrowers or which has not executed an appropriate confidentiality agreement
with the Borrowers. Nothing in this Section shall be construed to create or give
rise to any  fiduciary  duty  on the  part of the  Administrative  Agent  or the
Lenders to the Borrowers.

     11.15 Further Assurances.

     The Borrowers shall, at their expense and without expense to the Lenders or
the  Administrative  Agent,  do,  execute  and  deliver  such  further  acts and
documents as the Requisite Lenders or the Administrative Agent from time to time
reasonably  require  for the  assuring  and  confirming  unto the Lenders or the
Administrative  Agent of the rights hereby  created or intended now or hereafter
so to be, or for carrying out the intention or  facilitating  the performance of
the terms of any Loan Document.

     11.16 Integration.

     This  Agreement,  together  with the other  Loan  Documents  and the letter
agreement  referred to in Section 3.4,  comprises  the  complete and  integrated
agreement of the parties on the subject  matter hereof and  supersedes all prior
agreements,  written or oral, on the subject matter hereof.  In the event of any
conflict  between the  provisions of this  Agreement and those of any other Loan
Document,  the provisions of this Agreement  shall control and govern;  provided
that  the  inclusion  of  supplemental  rights  or  remedies  in  favor  of  the
Administrative  Agent or the  Lenders  in any other Loan  Document  shall not be
deemed a conflict with this  Agreement.  Each Loan Document was drafted with the
joint  participation  of the respective  parties  thereto and shall be construed
neither  against nor in favor of any party,  but rather in  accordance  with the
fair meaning thereof.

     11.17 Governing Law.

     Except to the extent otherwise  provided therein,  each Loan Document shall
be governed by, and  construed  and  enforced in  accordance  with,  the Laws of
California applicable to contracts made and performed in California.

     11.18 Severability of Provisions.

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

     11.19 Headings.

     Article and Section headings in this Agreement and the other Loan Documents
are  included  for  convenience  of  reference  only  and are  not  part of this
Agreement or the other Loan Documents for any other purpose.

     11.20 Time of the Essence.

     Time is of the essence of the Loan Documents.

     11.21 Foreign Lenders and Participants.

     Each Lender that is incorporated or otherwise organized under the Laws of a
jurisdiction other than the United States of America or any State thereof or the
District  of  Columbia  shall  deliver  to the  Borrowers  (with  a copy  to the
Administrative  Agent),  on or  before  the  Effective  Date  (or  on or  before
accepting an assignment or receiving a participation interest herein pursuant to
Section 11.8, if applicable) two duly completed copies,  signed by a Responsible
Official,  of either Form 1001  (relating  to such Lender and  entitling it to a
complete exemption from withholding on all payments to be made to such Lender by
the Borrowers pursuant to this Agreement) or Form 4224 (relating to all payments
to be made to such Lender by the  Borrowers  pursuant to this  Agreement) of the
United States  Internal  Revenue Service or such other evidence  (including,  if
reasonably   necessary,   Form  W-9)  satisfactory  to  the  Borrowers  and  the
Administrative  Agent that no  withholding  under the federal income tax laws is
required  with respect to such Lender.  Thereafter  and from time to time,  each
such  Lender  shall (a)  promptly  submit to the  Borrowers  (with a copy to the
Administrative  Agent),  such additional duly completed and signed copies of one
of such forms (or such successor  forms as shall be adopted from time to time by
the relevant  United States taxing  authorities)  as may then be available under
then current United States laws and regulations to avoid, or such evidence as is
satisfactory  to the  Borrowers  and the  Administrative  Agent of any available
exemption from, United States withholding taxes in respect of all payments to be
made to such Lender by the  Borrowers  pursuant to this  Agreement  and (b) take
such steps as shall not be disadvantageous to it, in the reasonable  judgment of
such Lender, and as may be reasonably necessary (including the re-designation of
its Eurodollar  Lending  Office,  if any) to avoid any requirement of applicable
Laws that any Borrower make any deduction or withholding  for taxes from amounts
payable to such Lender.

     11.22 Joint and Several Liability.

               (a) Each Borrower  shall be jointly and severally  liable for all
          of the  Obligations,  provided that,  notwithstanding  anything to the
          contrary herein (including,  without  limitation,  the representations
          and  warranties  set forth in Article 4), (i)  Filofax  Group shall be
          liable  with  respect  to the Term  Loans  only to the  extent  of the
          greater of (x) 13,533,000  pounds sterling and (y) its  "distributable
          profits"  (within the meaning of Section  152(1)(b)  the Companies Act
          and which,  for the  avoidance  of doubt,  shall  include both revenue
          reserves and reserves  related to premiums on shares  issued,  in each
          case,  as  reflected  in Filofax  Group's  accounts) as of any date or
          dates upon which payment is demanded under the Subsidiary  Guaranty of
          Term Loans  executed by Filofax  Group and (ii) and  Filofax  shall be
          liable  with  respect  to the Term  Loans  only to the  extent  of the
          greater of (x) 1,960,000  pounds  sterling and (y) its  "distributable
          profits"  (within the meaning of Section  152(1)(b)  the Companies Act
          and which,  for the  avoidance  of doubt,  shall  include both revenue
          reserves and reserves  related to premiums on shares  issued,  in each
          case, as reflected in Filofax's accounts) as of any date or dates upon
          which  payment is demanded  under the Borrower  Guaranty of Term Loans
          executed by Filofax,  it being  understood and agreed that neither the
          Administrative  Agent nor the Lenders shall demand  payment by Filofax
          of  principal  of or interest on the Term  Loans,  under the  Borrower
          Guaranty  of  Term  Loans  or on  account  of its  joint  and  several
          liability  therefor  arising  hereunder,  prior to October  15,  2000,
          provided that it is further understood and agreed that nothing in this
          Agreement or any other Loan Document shall preclude the Administrative
          Agent or the  Lenders,  in the event that the Term Loans shall  become
          due and payable  prior to October 15,  2000,  from making  demand upon
          Filofax  for payment  thereof,  subject to the  limitations  set forth
          herein and in the Borrower  Guaranty of Term Loans,  at any time on or
          after October 15, 2000.

               (b) Each Borrower  hereby agrees that its  Obligations  hereunder
          shall not be discharged  or otherwise  affected as a result of (a) the
          invalidity  or   unenforceability  of  any  of  the  other  Borrowers'
          obligations  under this  Agreement  or any other Loan  Document or any
          other agreement or instrument relating thereto, or any guaranty of the
          Obligations, (b) the absence of any attempt to collect the Obligations
          from any of the other  Borrowers  or other action to enforce the same;
          (c)   any   bankruptcy,   insolvency,   reorganization,   arrangement,
          readjustment of debt,  liquidation or dissolution proceeding commenced
          by or against any of the other  Borrowers  (other than such Borrower),
          including without limitation, any discharge of, or bar or stay against
          collecting, all or any of the Obligations (or any interest thereon) in
          or  as  a  result  of  any  such   proceeding;   (d)  failure  by  the
          Administrative  Agent,  any Lender,  or the Issuing  Lender to file or
          enforce  a claim  against  any  other  Borrower  or its  estate in any
          bankruptcy or insolvency  case or proceeding;  (e) any action taken by
          the  Administrative  Agent, any Lender,  or the Issuing Lender that is
          authorized hereby; or (f) any other circumstance which might otherwise
          constitute  a legal or  equitable  discharge or defense of a surety or
          guarantor or any other third party obligor on any  Obligations,  other
          than the  payment in full of the  Obligations.  Each  Borrower  hereby
          waives  (a)  diligence,  presentment,  demand of  payment  (except  as
          expressly  required  hereunder),  filing of claims with a court in the
          event of receivership or bankruptcy of the other Borrowers, protest or
          notice with respect to the Obligations, and all presentments,  demands
          for  performance,  notices  of  nonperformance  (except  to the extent
          expressly required hereunder),  protests,  notices of protest, notices
          of  dishonor  and  notices of  acceptance  of this  Agreement  and the
          Obligations, the benefits of all statutes of limitation, and all other
          demands (except as expressly required hereunder) whatsoever (and shall
          not  require  that  the  same  be  made on the  other  Borrowers  as a
          condition precedent to its Obligations hereunder),  (b) all notices of
          the   existence,   creation  or   incurring   of  new  or   additional
          indebtedness,  arising  either from  additional  loans extended to the
          other  Borrowers  or  otherwise,  (c) all notices  that the  principal
          amount, or any portion thereof,  and/or any interest on any instrument
          or  document  evidencing  all or any  part of the  Obligations  is due
          (except as expressly required  hereunder),  (d) notices of any and all
          proceedings  to collect  from the  maker,  any  endorser  or any other
          guarantor  of all or any part of the  Obligations,  or from any  other
          Person,  (e) any  requirement of marshalling or any other principle of
          election of  remedies  and all rights and  defenses  arising out of an
          election of remedies  by any  Lender,  (f) any defense  based upon any
          Requirement of Law which provides that the obligation of a surety must
          be neither larger in amount nor in other respects more burdensome than
          that of the principal and (g) without  limiting the  generality of the
          foregoing or any other provision hereof, all rights and benefits under
          California  Civil Code Sections 2808,  2809,  810, 2811,  2819,  2839,
          2845, 2849, 2850 and 3433.

     11.23 Removal of a Lender.

     Borrowers  shall  have  the  right to  remove  a Lender  as a party to this
Agreement  if such  Lender is paid a material  amount by  Borrowers  pursuant to
Section  3.6 or Section  3.7.  Upon  notice from  Borrowers,  such Lender  shall
execute and deliver an Assignment and Acceptance covering that Lender's Pro Rata
Share of the Revolving  Commitment and Term Loans,  as the case may be, in favor
of such  Person as  Borrowers  may  designate  (subject  to the  approval of the
Administrative Agent in its sole discretion), subject to payment in full by such
Person of all principal, interest and fees owing to such Lender through the date
of  assignment  and the  agreement of such Person to indemnify  such Lender with
respect to all then  outstanding  Letters of Credit.  The  Administrative  Agent
shall, if requested by the Borrowers, use reasonable efforts to identify Persons
willing to accept such an assignment from such Lender.

     11.24 Waiver of Right to Trial by Jury.

     EACH PARTY TO THIS AGREEMENT  HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY  CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION  ARISING  UNDER ANY LOAN
DOCUMENT OR IN ANY WAY  CONNECTED  WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTY  HERETO OR ANY OF THEM WITH  RESPECT TO ANY LOAN  DOCUMENT,  OR THE
TRANSACTIONS  RELATED  THERETO,  IN EACH CASE  WHETHER NOW EXISTING OR HEREAFTER
ARISING,  AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE;  AND EACH PARTY
HEREBY  AGREES AND  CONSENTS  THAT ANY SUCH  CLAIM,  DEMAND,  ACTION OR CAUSE OF
ACTION  SHALL BE DECIDED BY COURT  TRIAL  WITHOUT A JURY,  AND THAT ANY PARTY TO
THIS  AGREEMENT MAY FILE AN ORIGINAL  COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN  EVIDENCE OF THE CONSENT OF THE  SIGNATORIES  HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

     11.25 Purported Oral Amendments.

     EACH BORROWER EXPRESSLY ACKNOWLEDGES THAT THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS MAY ONLY BE AMENDED OR MODIFIED,  OR THE PROVISIONS  HEREOF OR THEREOF
WAIVED OR  SUPPLEMENTED,  BY AN INSTRUMENT IN WRITING THAT COMPLIES WITH SECTION
11.2.  EACH  BORROWER  AGREES  THAT IT WILL NOT RELY ON ANY  COURSE OF  DEALING,
COURSE OF PERFORMANCE,  OR ORAL OR WRITTEN  STATEMENTS BY ANY  REPRESENTATIVE OF
THE ADMINISTRATIVE AGENT OR ANY LENDER THAT DOES NOT COMPLY WITH SECTION 11.2 TO
EFFECT AN AMENDMENT, MODIFICATION, WAIVER OR SUPPLEMENT TO THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS.

     11.25 Acknowledgment of Lenders.

     Each of the Lenders and the  Administrative  Agent hereby  acknowledges and
agrees that as of the Effective Date, after giving effect to this Agreement,  no
Default or Event of Default shall have  occurred and be continuing  with respect
to the covenants  set forth in Sections 6.12 and 6.13 of this  Agreement for the
period of four consecutive Fiscal Quarters ended on June 30, 1999.

                         [signatures on following pages]



<PAGE>




         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                               DAY RUNNER, INC.



                                               By:/s/ James E. Freeman, Jr.
                                               ----------------------------
                                               Name: James E. Freeman, Jr.
                                                     Chief Executive Officer

                                               Address:
                                                 15295 Alton Parkway
                                                 Irvine, California  92618
                                                 Facsimile: 714-441-4848


                                                  DAY RUNNER UK plc


                                                  By:/s/ James E. Freeman, Jr.
                                                  ----------------------------
                                                  Name: James E. Freeman, Jr.
                                                        Director

                                                  Address:
                                                    Day Runner UK plc
                                                    30-32 Gildredge Road
                                                    Eastbourne East Sussex
                                                    BN21 45H



                                                    DAY RUNNER CANADA INC.



                                                   By:/s/ Catherine F. Ratcliffe
                                                   -----------------------------
                                                  Name: Catherine F. Ratcliffe
                                                        Director



                                                    FILOFAX LIMITED



                                                     By: /s/ Christopher Brace
                                                     --------------------------
                                                     Name: Christopher Brace
                                                           Director

                                    Address:



<PAGE>




                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                       as Administrative Agent and Issuing
                                     Lender



                                                  By:/s/ Greg Richardson
                                                  ----------------------------


                                                Address:

                                                WELLS FARGO BANK, N.A., as Agent
                                                     Commercial Bank Loan Center
                                                     Agency Dept., 2840
                                                     201 3rd Street, 8th Floor
                                                     San Francisco, CA  94103
                                                     Attn: Manager
                                                     Telephone: 415-477-5319
                                                     Facsimile: 415-512-9408

                                                     and

                                                WELLS FARGO BANK, N.A., as Agent
                                                     333 South Grand Avenue
                                                     3rd Floor
                                                     Los Angeles, CA  90071
                                                     Attn:  Greg Richardson
                                                     Telephone: 213-253-6848
                                                     Facsimile: 213-253-5913

                                                     Payment Instructions:

                                                     WELLS FARGO, N.A.
                                                     San Francisco, CA
                                                     ABA # 1210-00248
                                                     For Acct.: 4081656654
                                                     Acct. Name:
                                                      SYNDIC/WFBCORP/DAY RUNNER
                                                     Ref.: Day Runner



<PAGE>






                                    Lenders:

                                        WELLS FARGO BANK, NATIONAL ASSOCIATION


                                        By: /s/ Greg Richardson
                                        --------------------------------------
                                        Name: Greg Richardson
                                        Title: Vice President





                                          BANK OF SCOTLAND


                                          By: /s/ Ronnie Allan
                                          -------------------------------------
                                          Name:  Ronnie Allan
                                          Title: Corporate Banking Manager





                                          CREDIT AGRICOLE INDOSUEZ


                                          By: /s/ Richard Mand
                                          -------------------------------------
                                          Name: Richard Mand
                                          Title: 1st Vice President






<PAGE>




                                          BANK ONE, NA



                                          By: /s/ Dennis Warren
                                          -------------------------------------
                                          Name: Dennis Warren
                                          Title: Vice President



                                          MELLON BANK, N.A.



                                           By:/s/ Richard M. McNiven
                                           ------------------------------------
                                           Name: Richard M. McNiven
                                           Title: Assistant Vice President



                                           NATIONAL WESTMINSTER BANK plc



                                            By: /s/ Paul Sullivan
                                            -----------------------------------
                                            Name: Paul Sullivan
                                            Title: Manager