<PAGE>
 
                                 Exhibit 4.18

                      LIQUIDITY FACILITY CREDIT AGREEMENT


                         Dated as of December __, 1998


                                     among


                            AMERISOURCE CORPORATION
                                  as Borrower,


                         AMERISOURCE HEALTH CORPORATION
                    and Certain Subsidiaries and Affiliates,
                                 as Guarantors,


                            THE LENDERS NAMED HEREIN


                                      AND

                               NATIONSBANK, N.A.,
                            as Administrative Agent
<PAGE>
 
                               TABLE OF CONTENTS



SECTION 1 DEFINITIONS........................................................1
   1.1 Definitions...........................................................1
   1.2 Computation of Time Periods...........................................7
   1.3 Accounting Terms......................................................7

SECTION 2 CREDIT FACILITIES..................................................8
   2.1 Revolving Loans.......................................................8

SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES....................10
   3.1 Default Rate.........................................................10
   3.2 Extension and Conversion.............................................10
   3.3 Voluntary Prepayments................................................11
   3.4 Reductions in Commitments and Mandatory Prepayments..................11
   3.5 Fees.    ............................................................12
   3.6 Capital Adequacy.....................................................12
   3.7 Inability To Determine Interest Rate.................................13
   3.8 Illegality...........................................................13
   3.9 Requirements of Law..................................................14
   3.10 Taxes.  ............................................................15
   3.11 Indemnity...........................................................17
   3.12 Pro Rata Treatment..................................................18
   3.13 Sharing of Payments.................................................18
   3.14 Payments, Computations, Etc.........................................19
   3.15 Evidence of Debt....................................................21

SECTION 4 GUARANTY..........................................................21
   4.1 The Guarantee........................................................21
   4.2 Obligations Unconditional............................................22
   4.3 Reinstatement........................................................23
   4.4 Certain Additional Waivers...........................................23
   4.5 Remedies.............................................................23
   4.6 Rights of Contribution...............................................24
   4.7 Continuing Guarantee.................................................24

SECTION 5 CONDITIONS........................................................24
   5.1 Conditions to Closing................................................25
   5.2 Conditions to Effectiveness..........................................26
   5.3 Conditions to All Extensions of Credit...............................26

SECTION 6 REPRESENTATIONS, WARRANTIES AND COVENANTS.........................27
   6.1 Incorporation........................................................27
   6.2 Additional Representations...........................................28
   6.3 Additional Covenants.................................................28
<PAGE>
 
SECTION 7 EVENTS OF DEFAULT.................................................29
   7.1 Events of Default....................................................29
   7.2 Acceleration; Remedies...............................................31

SECTION 8 AGENCY PROVISIONS.................................................32
   8.1 Appointment..........................................................32
   8.2 Delegation of Duties.................................................32
   8.3 Exculpatory Provisions...............................................32
   8.4 Reliance on Communications...........................................33
   8.5 Notice of Default....................................................33
   8.6 Non-Reliance on Administrative Agent and Other Lenders...............34
   8.7 Indemnification......................................................34
   8.8 Administrative Agent in its Individual Capacity......................35
   8.9 Successor Administrative Agent.......................................35

   8.10 Intercreditor Agreements............................................35

SECTION 9 MISCELLANEOUS.....................................................36
   9.1 Notices..............................................................36
   9.2 Right of Set-Off.....................................................37
   9.3 Benefit of Agreement.................................................37
   9.4 No Waiver; Remedies Cumulative.......................................40
   9.5 Payment of Expenses, etc.............................................40
   9.6 Amendments, Waivers and Consents.....................................41
   9.7 Counterparts.........................................................41
   9.8 Headings.............................................................42
   9.9 Survival.............................................................42
   9.10 Governing Law; Submission to Jurisdiction; Venue....................42
   9.11 Severability........................................................43
   9.12 Entirety............................................................43
   9.13 Binding Effect; Termination.........................................43
   9.14 Confidentiality.....................................................43
   9.15 Source of Funds.....................................................44
   9.16 Conflict............................................................44



                                      ii
<PAGE>
 
                                   SCHEDULES

 Schedule 2.1(a)        Schedule of Lenders and Commitments
 Schedule 2.1(b)(i)     Form of Notice of Borrowing
 Schedule 2.1(e)        Form of Revolving Note
 Schedule 3.2           Form of Notice of Extension/Conversion
 Schedule 5.1(g)(v)     Form of Secretary's Certificate
 Schedule 5.1(g)(vi)(A) Form of Solvency Certificate - AmeriSource Corporation
 Schedule 5.1(g)(vi)(B) Form of Solvency Certificate - AmeriSource Health 
                         Corporation
 Schedule 8.10(a)       Form of Securitization Intercreditor Agreement
 Schedule 8.10(b)       Form of Liquidity Intercreditor Agreement
 Schedule 9.3(b)        Form of Assignment and Acceptance



                                     iii 
<PAGE>

                                                                    EXHIBIT 4.18
 
                                CREDIT AGREEMENT


     THIS CREDIT AGREEMENT dated as of December __, 1998 (the "Credit
                                                               ------
Agreement"), is by and among AMERISOURCE CORPORATION, a Delaware corporation
(the "Borrower"), AMERISOURCE HEALTH CORPORATION, a Delaware corporation (the
      --------                                                               
"Company") and the subsidiaries and affiliates identified on the signature pages
--------                                                                        
hereto and such other subsidiaries and affiliates as may from time to time
become Guarantors hereunder in accordance with the provisions hereof
(collectively with the Company, the "Guarantors"), the lenders named herein and
                                     ----------                                
such other lenders as may become a party hereto (the "Lenders"), and
                                                      -------       
NATIONSBANK, N.A., as Administrative Agent (in such capacity, the
                                                                 
"Administrative Agent").
---------------------   

                              W I T N E S S E T H

     WHEREAS, the Borrower has requested that the Lenders provide a $100 million
revolving liquidity facility for the purposes hereinafter set forth;

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

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

                                   SECTION 1
                                  DEFINITIONS
                                  -----------

     1.1  Definitions.
          ----------- 

          As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires, and provided
                                                                    --------
that terms used but not otherwise defined shall have the meanings provided in
the Existing Credit Agreement:

          "Additional Credit Party" means each Person that becomes a Guarantor
           -----------------------                                            
     after the Closing Date by execution of a Joinder Agreement.

          "Administrative Agent" shall have the meaning assigned to such term in
           --------------------                                                 
     the heading hereof, together with any successors or assigns.

          "Administrative Agent's Fee Letter" means that certain letter
           ---------------------------------                           
     agreement, dated as of December __, 1998, between the Administrative Agent
     and the Borrower, as amended, modified, supplemented or replaced from time
     to time.

          "Administrative Agent's Fees" shall have the meaning assigned to such
           ---------------------------                                         
     term in Section 3.5(b).

                                       1
<PAGE>
 
          "Agents" means, collectively, NationsBank, N.A., as Administrative
           ------                                                           
     Agent and [______________] as [_____________] Agent.

          "Aggregate Revolving Committed Amount" means the aggregate amount of
           ------------------------------------                               
     Revolving Commitments in effect from time to time, being initially ONE
     HUNDRED MILLION DOLLARS ($100,000,000).

          "Base Rate" means, for any day, the rate per annum (rounded upwards,
           ---------                                                          
     if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the
     greater of (a) the Federal Funds Rate in effect on such day plus  1/2 of 1%
                                                                 ----           
     or (b) the Prime Rate in effect on such day.  If for any reason the
     Administrative Agent shall have determined (which determination shall be
     conclusive absent manifest error) that it is unable after due inquiry to
     ascertain the Federal Funds Rate for any reason, including the inability or
     failure of the Administrative Agent to obtain sufficient quotations in
     accordance with the terms hereof, the Base Rate shall be determined without
     regard to clause (a) of the first sentence of this definition until the
     circumstances giving rise to such inability no longer exist.  Any change in
     the Base Rate due to a change in the Prime Rate or the Federal Funds Rate
     shall be effective on the effective date of such change in the Prime Rate
     or the Federal Funds Rate, respectively.

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

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

          "Borrowing Base" means, at any time, an amount equal to (i) seventy
           --------------                                                    
     percent (70%) of Eligible Inventory minus (ii) Obligations outstanding
     under the Existing Credit Agreement.

          "Business Day" means a day other than a Saturday, Sunday or other day
           ------------                                                        
     on which commercial banks in Charlotte, North Carolina or Philadelphia,
     Pennsylvania are authorized or required by law to close, except that, when
                                                              ------ ----      
     used in connection with a Eurodollar Loan, such day shall also be a day on
     which dealings between banks are carried on in U.S. dollar deposits in
     London, England, Charlotte, North Carolina and New York, New York.

          "Closing Date" means the date hereof.
           ------------                        

          "Commitment" means the Revolving Commitment.
           ----------                                 

          "Commitment Fee" shall have the meaning given such term in Section
           --------------                                                   
     3.5(a).

          "Commitment Percentage" means the Revolving Commitment Percentage.
           ---------------------                                            

          "Commitment Period" means the period from and including the Effective
           -----------------                                                   
     Date to but not including the earlier of (i) the Termination Date, or (ii)
     the date on which the 

                                       2
<PAGE>
 
     Revolving Commitments terminate in accordance with the provisions of this
     Credit Agreement.

          "Company" means AmeriSource Health Corporation, a Delaware
           -------                                                  
     corporation, as referenced in the opening paragraph, its successors and
     permitted assigns.

          "Credit Documents" means a collective reference to this Credit
           ----------------                                             
     Agreement, the Notes, the Security Agreement, the Pledge Agreement, each
     Joinder Agreement, the Administrative Agent's Fee Letter, the Liquidity
     Intercreditor Agreement and all other related agreements and documents
     issued or delivered hereunder or thereunder or pursuant hereto or thereto.

          "Credit Party" means any of the Borrower and the Guarantors.
           ------------                                               

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

          "Defaulting Lender" means, at any time, any Lender that, at such time,
           -----------------                                                    
     (i) has failed to make an Extension of Credit required pursuant to the
     terms of this Credit Agreement, (ii) has failed to pay to the
     Administrative Agent or any Lender an amount owed by such Lender pursuant
     to the terms of the Credit Agreement or any other of the Credit Documents,
     or (iii) has been deemed insolvent or has become subject to a bankruptcy or
     insolvency proceeding or to a receiver, trustee or similar proceeding.

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

          "Effective Date" means the date on or after the Closing Date on which
           --------------                                                      
     the conditions set out in Section 5.2 have been satisfied or waived.

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

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


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


          "Eurodollar Reserve Percentage" means for any day, that percentage
           -----------------------------                                    
     (expressed as a decimal) which is in effect from time to time under
     Regulation D of the Board of Governors of the Federal Reserve System (or
     any successor), as such regulation may be amended from time to time or any
     successor regulation, as the maximum reserve requirement (including,
     without limitation, any basic, supplemental, emergency, special, or
     marginal reserves) applicable with respect to Eurocurrency liabilities as
     that term is 

                                       3
<PAGE>
 
     defined in Regulation D (or against any other category of liabilities that
     includes deposits by reference to which the interest rate of Eurodollar
     Loans is determined), whether or not Lender has any Eurocurrency
     liabilities subject to such reserve requirement at that time. Eurodollar
     Loans shall be deemed to constitute Eurocurrency liabilities and as such
     shall be deemed subject to reserve requirements without benefits of credits
     for proration, exceptions or offsets that may be available from time to
     time to a Lender. The Eurodollar Rate shall be adjusted automatically on
     and as of the effective date of any change in the Eurodollar Reserve
     Percentage.

          "Event of Default" means such term as defined in Section 7.1.
           ----------------                                            

          "Existing Credit Agreement" means that Credit Agreement dated as of
           -------------------------                                         
     January 8, 1997 among the Borrower, the Company and the other Guarantors
     identified therein, the Lenders identified therein and NationsBank, N.A.,
     as Administrative Agent, as amended and modified.

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

          "Fees" means all fees payable pursuant to Section 3.5.
           ----                                                 

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

          "Guarantor" means the Company and each of those other Persons
           ---------                                                   
     identified as a "Guarantor" on the signature pages hereto, and each
     Additional Credit Party which may hereafter execute a Joinder Agreement,
     together with their successors and permitted assigns.

          "Guaranteed Obligations" means, as to each Guarantor, without
           ----------------------                                      
     duplication, (i) all obligations of the Borrower to the Lenders and the
     Administrative Agent , whenever arising, under this Credit Agreement, the
     Notes or the Credit Documents relating to the Obligations hereunder, and
     (ii) all liabilities and obligations, whenever arising, owing from the
     Borrower to any Lender, or any Affiliate of a Lender, arising under any
     Hedging Agreement relating to Loans or Obligations hereunder.

          "Incorporated Covenants" means such term as defined in Section 6.1.
           ----------------------                                            

          "Incorporated Representations" means such term as defined in Section
           ----------------------------                                       
6.1.

                                       4
<PAGE>
 
          "Interbank Offered Rate" means, for the Interest Period for each
           ----------------------                                         
     Eurodollar Loan comprising part of the same borrowing (including
     conversions, extensions and renewals), a per annum interest rate (rounded
     upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal
     to the rate of interest, determined by the Administrative Agent on the
     basis of the offered rates for deposits in dollars for a period of time
     corresponding to such Interest Period (and commencing on the first day of
     such Interest Period), appearing on Telerate Page 3750 (or, if, for any
     reason, Telerate Page 3750 is not available, the Reuters Screen LIBO Page)
     as of approximately 11:00 A.M. (London time) two (2) Business Days before
     the first day of such Interest Period.  As used herein, "Telerate Page
     3750" means the display designated as page 3750 by Dow Jones Telerate, Inc.
     (or such other page as may replace such page on that service for the
     purpose of displaying the British Bankers Association London interbank
     offered rates) and "Reuters Screen LIBO Page" means the display designated
     as page "LIBO" on the Reuters Monitor Money Rates Service (or such other
     page as may replace the LIBO page on that service for the purpose of
     displaying London interbank offered rates of major banks).

          "Interest Payment Date" means (i) as to any Base Rate Loan, the first
           ---------------------                                               
     day of each January, April, July and October, the date of repayment of
     principal of such Loan and the Termination Date and (ii) as to any
     Eurodollar Loan, the last day of each Interest Period for such Loan, the
     date of repayment of principal of such Loan and on the Termination Date,
     and in addition where the applicable Interest Period is more than 3 months,
     then also on the date 3 months from the beginning of the Interest Period,
     and each 3 months thereafter.  If an Interest Payment Date falls on a date
     which is not a Business Day, such Interest Payment Date shall be deemed to
     be the next succeeding Business Day.

          "Interest Period" means as to any Eurodollar Loan, a period of one,
           ---------------                                                   
     two, or three month's duration, as the Borrower may elect, commencing in
     each case, on the date of the borrowing (including conversions, extensions
     and renewals); provided, however, (A) if any Interest Period would end on a
                    --------  -------                                           
     day which is not a Business Day, such Interest Period shall be extended to
     the next succeeding Business Day (except that in the case of Eurodollar
     Loans where the next succeeding Business Day falls in the next succeeding
     calendar month, then on the next preceding Business Day), (B) no Interest
     Period shall extend beyond the Termination Date, and (C) in the case of
     Eurodollar Loans, where an Interest Period begins on a day for which there
     is no numerically corresponding day in the calendar month in which the
     Interest Period is to end, such Interest Period shall end on the last day
     of such calendar month.

          "Joinder Agreement" means a Joinder Agreement substantially in the
           -----------------                                                
     form of Schedule 7.11-1 to the Existing Credit Agreement but relating to
             ---------------                                                 
     this Credit Agreement and the obligations hereunder, executed and delivered
     by an Additional Credit Party in accordance with the provisions of Section
     6.3(b).

          "Lenders" means each of the Persons identified as a "Lender" on the
           -------                                                           
     signature pages hereto, and their successors and assigns.

                                       5
<PAGE>
 
          "Liquidity Intercreditor Agreement" means the Intercreditor Agreement
           ---------------------------------                                   
     dated as of ____________ among NationsBank, N.A., as Administrative Agent
     under the Existing Credit Agreement, NationsBank, N.A., as Administrative
     Agent under this Credit Agreement, and the Credit Parties, as amended and
     modified, as referenced in Section 8.10(b).

          "Loan" or "Loans" means the Revolving Loans.
           ----      -----                            

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

          "Non-Excluded Taxes" means such term as is defined in Section 3.10.
           ------------------                                                

          "Note" or "Notes" means any Revolving Note.
           ----      -----                           

          "Notice of Borrowing" means a written notice of borrowing in
           -------------------                                        
     substantially the form of Schedule 2.1(b)(i), as required by Section
                               ------------------                        
     2.1(b)(i).

          "Notice of Extension/Conversion" means the written notice of extension
           ------------------------------                                       
     or conversion in substantially the form of Schedule 3.2, as required by
                                                ------------                
     Section 3.2.

          "Obligations" means, the Revolving Loans.
           -----------                             

          "Participation Interest" means the purchase by a Lender of a
           ----------------------                                     
     participation in Loans as provided in Section 3.13.

          "Pledge Agreement" means the Pledge Agreement dated as of the date
           ----------------                                                 
     hereof entered into by the Credit Parties in favor of the Administrative
     Agent for the benefit of the Lenders (and affiliates of Lenders as to
     certain obligations under Hedge Agreements), as amended and modified.

          "Prime Rate" means the rate of interest per annum publicly announced
           ----------                                                         
     from time to time by NationsBank as its prime rate in effect at its
     principal office in Charlotte, North Carolina, with each change in the
     Prime Rate being effective on the date such change is publicly announced as
     effective (it being understood and agreed that the Prime Rate is a
     reference rate used by NationsBank in determining interest rates on certain
     loans and is not intended to be the lowest rate of interest charged on any
     extension of credit by NationsBank to any debtor).

          "Register" shall have the meaning given such term in Section 9.3(c).
           --------                                                           

          "Required Lenders" means, at any time, Lenders having more than fifty
           ----------------                                                    
     percent (50%) of the Commitments, or if the Commitments have been
     terminated, Lenders having more than fifty percent (50%) of the aggregate
     principal amount of the Obligations outstanding (taking into account in
     each case Participation Interests or obligation to participate therein);
     provided that the Commitments of, and outstanding principal amount of
     --------                                                             
     Obligations (taking into account Participation Interests therein) 

                                       6
<PAGE>
 
     owing to, a Defaulting Lender shall be excluded for purposes hereof in
     making a determination of Required Lenders.

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

          "Revolving Commitment Percentage" means, for each Lender, a fraction
           -------------------------------                                    
     (expressed as a decimal) the numerator of which is the Revolving Commitment
     of such Lender at such time and the denominator of which is the Aggregate
     Revolving Committed Amount at such time.  The initial Revolving Commitment
     Percentages are set out on Schedule 2.1(a).
                                --------------- 

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

          "Revolving Loans" shall have the meaning assigned to such term in
           ---------------                                                 
     Section 2.1(a).

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

          "Security Agreement" means the Security Agreement dated as of the date
           ------------------                                                   
     hereof entered into by the Credit Parties in favor of the Administrative
     Agent for the benefit of the Lenders (and affiliates of Lenders as to
     certain obligations under Hedge Agreements), as amended and modified.

          "Termination Date" means March 31, 1999.
           ----------------                       

     1.2  Computation of Time Periods.
          --------------------------- 

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

     1.3  Accounting Terms.
          ---------------- 

          Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis.  All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly 

                                       7
<PAGE>
 
financial statements delivered pursuant to Section 7.1 of the Incorporated
Covenants (or, prior to the delivery of the first financial statements pursuant
to Section 7.1 of the Incorporated Covenants, consistent with the annual audited
financial statements referenced in Section 6.1(i) of the Incorporated
Covenants); provided, however, if (a) the Company shall object to determining 
            --------  -------                                    
such compliance on such basis at the time of delivery of such financial
statements due to any change in GAAP or the rules promulgated with respect
thereto or (b) the Administrative Agent or the Required Lenders shall so object
in writing within 30 days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Borrower to the Lenders as to which no such
objection shall have been made.


                                   SECTION 2
                               CREDIT FACILITIES
                               -----------------

     2.1  Revolving Loans.
          --------------- 

     (a)  Revolving Commitment.  During the Commitment Period, subject to the
          --------------------                                               
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (the "Revolving Loans") to the Borrower from time to time in the
                   ---------------                                           
amount of such Lender's Revolving Commitment Percentage of such Revolving Loans
for the purposes hereinafter set forth; provided that Revolving Loans hereunder
                                        --------                               
shall be available (and existing Revolving Loans may be extended and renewed)
only if and where the Existing Credit Agreement shall be fully drawn upon and
there shall be no remaining availability thereunder (that is, the liquidity
facility established hereby shall be in the nature of an overadvance line); and
                                                                               
provided further that (i) with regard to the Lenders collectively, the aggregate
-------- -------                                                                
principal amount of Obligations outstanding at any time shall not exceed the
lesser of (A) ONE HUNDRED MILLION DOLLARS ($100,000,000) (as referenced on
                                                                          
Schedule 2.1(a), the "Revolving Committed Amount") or (B) until the Security
---------------       --------------------------                            
Release Date relating to inventory (but not thereafter), the Borrowing Base, and
(ii) with regard to each Lender individually, such Lender's Revolving Commitment
Percentage of Obligations outstanding at any time shall not exceed such Lender's
Revolving Committed Amount.  Revolving Loans may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof.

     (b)  Revolving Loan Borrowings.
          ------------------------- 

          (i) Notice of Borrowing.  The Borrower shall request a Revolving Loan
              -------------------                                              
     borrowing by delivery of a Notice of Borrowing (or telephone notice
     promptly confirmed in writing) substantially in the form of Schedule
                                                                 --------
     2.1(b)(i) to the Administrative Agent not later than 12:00 Noon (Charlotte,
     ---------                                                                  
     North Carolina time) on the date of the requested borrowing (which shall be
     a Business Day) in the case of Base Rate Loans, and on the third Business
     Day prior to the date of the requested borrowing in the case of Eurodollar
     Loans.  Each such request for borrowing shall be irrevocable and shall
     specify (A) that a Revolving Loan is requested, (B) the date of the
     requested borrowing (which shall be a Business Day), (C) the aggregate
     principal amount to be borrowed, and (D) whether the borrowing shall be
     comprised of Base Rate Loans, Eurodollar Loans or a combination 

                                       8
<PAGE>
 
     thereof, and if Eurodollar Loans are requested, the Interest Period(s)
     therefor. If the Borrower shall fail to specify in any such Notice of
     Borrowing (I) an applicable Interest Period in the case of a Eurodollar
     Loan, then such notice shall be deemed to be a request for an Interest
     Period of one month, or (II) the type of Revolving Loan requested, then
     such notice shall be deemed to be a request for a Base Rate Loan hereunder.
     The Administrative Agent shall give notice to each Lender promptly upon
     receipt of each Notice of Borrowing pursuant to this Section 2.1(b)(i), the
     contents thereof and each such Lender's share of any borrowing to be made
     pursuant thereto.

          (ii)  Minimum Amounts.  Each Revolving Loan shall be in a minimum
                ---------------                                            
     aggregate principal amount of $1,000,000, in the case of Eurodollar Loans,
     or $500,000 (or the remaining Revolving Committed Amount, if less), in the
     case of Base Rate Loans.

          (iii)  Advances.  Each Lender will make its Revolving Commitment
                 --------                                                 
     Percentage of each Revolving Loan borrowing available to the Administrative
     Agent for the account of the Borrower as specified in Section 3.14(a), or
     in such other manner as the Administrative Agent may specify in writing, by
     2:00 P.M. (Charlotte, North Carolina time) on the date specified in the
     applicable Notice of Borrowing in Dollars and in funds immediately
     available to the Administrative Agent.  Such borrowing will then be made
     available to the Borrower by the Administrative Agent by crediting the
     account of the Borrower on the books of such office with the aggregate of
     the amounts made available to the Administrative Agent by the Lenders and
     in like funds as received by the Administrative Agent.

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

     (d) Interest.  Subject to the provisions of Section 3.1,
         --------                                            

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

          (ii) Eurodollar Loans.  During such periods as Revolving Loans shall
               ----------------                                               
     be comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans
     shall bear interest at a per annum rate equal to the applicable Eurodollar
     Rate plus three quarters of one percent ( 3/4%).
          ----                                       

     Interest on Revolving Loans shall be payable in arrears on each applicable
     Interest Payment Date (or at such other times as may be specified herein).

     (e) Revolving Notes.  The Revolving Loans shall be evidenced by a duly
         ---------------                                                   
executed Revolving Note in favor of each Lender.

     (f) Maximum Number of Eurodollar Loans.  The Borrower will be limited to a
         ----------------------------------                                    
maximum number of six (6) Eurodollar Loans outstanding at any time.  For
purposes hereof, 

                                       9
<PAGE>
 
Eurodollar Loans with separate or different Interest Periods will be considered
as separate Eurodollar Loans even if their Interest Periods expire on the same
date.


                                   SECTION 3
                 OTHER PROVISIONS RELATING TO CREDIT FACILITIES
                 ----------------------------------------------

     3.1  Default Rate.
          ------------ 

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

     3.2  Extension and Conversion.
          ------------------------ 

          Subject to the terms of Section 5.3, the Borrower shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another interest
rate type; provided, however, that (i) except as provided in Section 3.8,
           --------  -------                                             
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
                                ---------------                              
shall be in such minimum amounts as provided in Section 2.1(b)(ii) , and (iv)
any request for extension or conversion of a Eurodollar Loan which shall fail to
specify an Interest Period shall be deemed to be a request for an Interest
Period of one month.  Each such extension or conversion shall be effected by the
Borrower by giving a Notice of Extension/Conversion substantially in the form of
                                                                                
Schedule 3.2 (or telephone notice promptly confirmed in writing) to the
------------                                                           
Administrative Agent prior to 12:00 Noon (Charlotte, North Carolina time) on the
Business Day of, in the case of the conversion of a Eurodollar Loan into a Base
Rate Loan, and on the third Business Day prior to, in the case of the extension
of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar
Loan, the date of the proposed extension or conversion, specifying the date of
the proposed extension or conversion, the Loans to be so extended or converted,
the types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto.  Each request
for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the Borrower of the matters specified in
subsections (a) through (e) of Section 5.3.  In the event the Borrower fails to
request extension or conversion of any Eurodollar Loan in accordance with this
Section, or any such conversion or extension is not permitted or required by
this Section, then such Eurodollar Loan shall be automatically converted into a
Base Rate Loan at the end of the Interest Period applicable thereto.  The
Administrative Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.

     3.3  Voluntary Prepayments.
          --------------------- 

                                       10
<PAGE>
 
     Revolving Loans may be repaid in whole or in part without premium or
penalty; provided that (i) Eurodollar Loans may be prepaid only upon three (3)
         --------                                                             
Business Days' prior written notice to the Administrative Agent and must be
accompanied by payment of any amounts owing under Section 3.11, and (ii) partial
repayments shall be in minimum principal amounts of $1,000,000, in the case of
Eurodollar Loans, and $500,000, in the case of Base Rate Loans.

     3.4  Reductions in Commitments and Mandatory Prepayments.
          --------------------------------------------------- 

          (a) Voluntary Reduction in Revolving Commitment.  The Revolving
              -------------------------------------------                
Commitments may be terminated or permanently reduced in whole or in part upon
three (3) Business Days' prior written notice to the Administrative Agent,
                                                                          
provided that (i) after giving effect to any voluntary reduction the aggregate
--------                                                                      
amount of Obligations shall not exceed the lesser of (A) the Aggregate Revolving
Committed Amount, as reduced, or (B) until the Security Release Date relating to
inventory (but not thereafter), the Borrowing Base, and (ii) partial reductions
shall be in minimum principal amounts of $5,000,000, and in integral multiples
of $1,000,000 in excess thereof.

          (b) Mandatory Reductions in Revolving Commitments and Mandatory
              -----------------------------------------------------------
Prepayments.  The Revolving Commitments shall be automatically and permanently
-----------                                                                   
reduced (and prepayments shall be required to the extent that outstanding
Obligations exceed the respective Revolving Commitment, as so reduced), by the
amounts provided below:

               (i) Asset Dispositions.  An amount equal to one hundred percent
                   ------------------                                         
     (100%) of the Net Proceeds received from Asset Dispositions.

               (ii) Debt and Equity Transactions.  An amount equal to one
                    ----------------------------                         
     hundred percent (100%) of the Net Proceeds received from any Debt
     Transaction or Equity Transaction.

          (c)  Mandatory Prepayments, Etc.
               ---------------------------

               (i) If at any time the aggregate principal amount of Obligations
     hereunder shall exceed the lesser of (A) the Aggregate Revolving Committed
     Amount or (B) until the Security Release Date relating to inventory (but
     not thereafter), the Borrowing Base, the Borrower shall immediately make
     payment on the Revolving Loans hereunder in an amount sufficient to
     eliminate the deficiency.

               (ii) If at any time the Aggregate Revolving Committed Amount
     under the Existing Credit Agreement shall exceed the Obligations owing
     thereunder (that is, there is unused availability under the Existing Credit
     Agreement determined for purposes hereof without giving effect to any
     voluntary, optional or mandatory reduction in the Aggregate Revolving
     Committed Amount thereunder in effect on the Closing Date hereof, being
     $500,000,000), the Borrower shall immediately either (A) make payment on
     the Revolving Loans hereunder in an amount sufficient to reduce the
     Obligations outstanding hereunder to zero or (B) reborrow Revolving Loans
     (or have Letters of 

                                       11
<PAGE>
 
     Credit issued) under the Existing Credit Agreement in an amount sufficient
     to eliminate such excess.

               (iii)  The Borrower will make prepayment on the Revolving Loans
     hereunder in an amount equal to one hundred percent (100%) of the Net
     Proceeds received from any Securitization Transaction (including for
     purposes hereof any increase in aggregate Invested Amount relating to the
     Excluded Securitization Transaction above $285,000,000).

          (d) Application.  Unless otherwise specified by the Borrower,
              -----------                                              
prepayments made hereunder shall be applied first to Base Rate Loans, then to
Eurodollar Loans in direct order of Interest Period maturities.  Amounts prepaid
hereunder may be reborrowed in accordance with the provisions hereof.

          (e)  Mandatory Commitment Termination.  The Commitments hereunder
               --------------------------------                            
shall terminate on the Termination Date.

     3.5  Fees.
          ---- 

          (a)  Commitment Fee.  In consideration of the Revolving Commitments
               --------------                                                
hereunder, the Borrower agrees to pay to the Administrative Agent for the
ratable benefit of the Lenders a commitment fee (the "Commitment Fee") equal to
                                                      --------------           
22.5 basis points (.225%) per  annum on the average daily unused amount of the
Revolving Committed Amount for the applicable period from the Closing Date.  The
Commitment Fee shall be payable quarterly in arrears on the 15th day following
the last day of each calendar quarter for the immediately preceding quarter (or
portion thereof) beginning with the first such date to occur after the Closing
Date.

          (b)  Administrative Fees.  The Borrower agrees to pay to the
               -------------------                                    
Administrative Agent, for its own account, an annual administrative fee and such
other fees, if any, referred to in the Administrative Agent's Fee Letter
(collectively, the "Administrative Agent's Fees").
                    ---------------------------   

     3.6  Capital Adequacy.
          ---------------- 

          If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender on an after-tax basis for such

                                       12
<PAGE>
 
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.

     3.7  Inability To Determine Interest Rate.
          ------------------------------------ 

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

     3.8  Illegality.
          ---------- 

     Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect to
such Loans or within such earlier period as required by law.  If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.11.

     3.9  Requirements of Law.
          ------------------- 

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

               (a) shall subject such Lender to any tax of any kind whatsoever
     with respect to any Eurodollar Loans made by it or its obligation to make
     Eurodollar Loans, or change the basis of taxation of payments to such
     Lender in respect thereof (except for (i) 

                                       13
<PAGE>
 
     Non-Excluded Taxes covered by Section 3.10 (including Non-Excluded Taxes
     imposed solely by reason of any failure of such Lender to comply with its
     obligations under Section 3.10(b)) and (ii) changes in taxes measured by or
     imposed upon the overall net income, or franchise tax (imposed in lieu of
     such net income tax), of such Lender or its applicable lending office,
     branch, or any affiliate thereof));

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

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

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, upon notice to the
Borrower from such Lender, through the Administrative Agent, in accordance
herewith, the Borrower shall be obligated to promptly pay such Lender, upon its
demand, any additional amounts necessary to compensate such Lender on an after-
tax basis for such increased cost or reduced amount receivable, provided that,
                                                                --------      
in any such case, the Borrower may elect to convert the Eurodollar Loans made by
such Lender hereunder to Base Rate Loans by giving the Administrative Agent at
least one Business Day's notice of such election, in which case the Borrower
shall promptly pay to such Lender, upon demand, without duplication, such
amounts, if any, as may be required pursuant to Section 3.11.  If any Lender
becomes entitled to claim any additional amounts pursuant to this subsection, it
shall provide prompt notice thereof to the Borrower, through the Administrative
Agent, certifying (x) that one of the events described in this paragraph 3.9 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof.  Such a certificate as to any additional amounts
payable pursuant to this subsection submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive and binding on the
parties hereto in the absence of manifest error.  This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder.

     3.10 Taxes.
          ----- 

     (a) Except as provided below in this subsection, all payments made by the
Borrower or any Guarantor under this Credit Agreement and any Notes shall be
made free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any court, or governmental body, agency or
other official, excluding taxes measured by or imposed upon the overall net
income of any Lender or its applicable lending office, or any branch or
affiliate thereof, and all franchise taxes, branch taxes, taxes on doing
business or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each case
imposed in lieu of net 

                                       14
<PAGE>
 
income taxes, imposed: (i) by the jurisdiction under the laws of which such
Lender, applicable lending office, branch or affiliate is organized or is
located, or in which its principal executive office is located, or any nation
within which such jurisdiction is located or any political subdivision thereof;
or (ii) by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other than a
connection arising solely from such Lender having executed, delivered or
performed its obligations, or received payment under or enforced, this Credit
Agreement or any Notes. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required 
                                            ------------------
to be withheld from any amounts payable to the Administrative Agent or any
Lender hereunder or under any Notes, (A) the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all Non-
Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Credit Agreement and any Notes,
provided, however, that the Borrower shall be entitled to deduct and withhold
--------  -------                                                   
any Non-Excluded Taxes and shall not be required to increase any such amounts
payable to any Lender that is not organized under the laws of the United States
of America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection whenever any Non-Excluded Taxes
are payable by the Borrower, and (B) as promptly as possible thereafter the
Borrower shall send to the Administrative Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof or other
evidence of remittance of Non-Excluded Taxes reasonably acceptable to the
Administrative Agent. If the Borrower fails to pay any Non-Excluded Taxes when
due to the appropriate taxing authority or fails to remit to the Administrative
Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure. The agreements in this subsection
shall survive the termination of this Credit Agreement and the payment of the
Loans and all other amounts payable hereunder.

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

          (X)(i) on or before the date it becomes a Lender, deliver to the
     Borrower and the Administrative Agent (A) two (2) properly completed and
     duly executed copies of United States Internal Revenue Service Form 1001 or
     4224, or successor applicable form, as the case may be, certifying that it
     is entitled to receive payments under this Credit Agreement and any Notes
     without deduction or withholding of any United States federal income taxes
     and (B) an Internal Revenue Service Form W-8 or W-9, or successor
     applicable form, as the case may be, certifying that it is entitled to an
     exemption from United States backup withholding tax;

          (ii) deliver to the Borrower and the Administrative Agent two (2)
     further properly completed and duly executed copies of any such form or
     certification on or before the date that any such form or certification
     expires or becomes obsolete and after the occurrence of any event requiring
     a change in the most recent form previously delivered by it to the
     Borrower; and

                                       15
<PAGE>
 
          (iii)  obtain such extensions of time for filing and complete such
     forms or certifications as may reasonably be requested by the Borrower or
     the Administrative Agent; or

          (Y) in the case of any such Lender that is not a "bank" within the
     meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (i) on or
     before the date it becomes a Lender, deliver to the Borrower (for the
     benefit of the Borrower and the Administrative Agent) (A) a statement under
     penalties of perjury that it (1) is not a bank within the meaning of
     Section 881(c)(3)(A) of the Internal Revenue Code, (2) is not a 10-percent
     shareholder within the meaning of Section 881(c)(3)(B) of the Code, and (3)
     is not a controlled foreign corporation receiving interest from a related
     person within the meaning of Section 881(c)(3)(C) of the Code, and (B) two
     (2) properly completed and duly executed copies of Internal Revenue Service
     Form W-8, or successor applicable form certifying to such Lender's legal
     entitlement at the date of such certificate to an exemption from U.S.
     withholding tax under the provisions of Section 881(c) of the Internal
     Revenue Code with respect to payments to be made under this Credit
     Agreement and any Notes (ii) deliver to the Borrower and the Administrative
     Agent two (2) further properly completed and duly executed copies of such
     form on or before the date it expires or becomes obsolete and after the
     occurrence of any event requiring a change in the most recently provided
     form, (iii) if necessary, obtain any extensions of time reasonably
     requested by the Borrower or the Administrative Agent for filing and
     completing such forms, and (iv) agree, to the extent legally entitled to do
     so, upon reasonable request by the Borrower, to provide to the Borrower
     (for the benefit of the Borrower and the Administrative Agent) such other
     forms as may be reasonably required in order to establish the legal
     entitlement of such Lender to an exemption from withholding with respect to
     payments under this Credit Agreement and any Notes;

unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent.  Each Person that shall become a Lender
or a participant of a Lender pursuant to subsection 9.3 shall and each Lender
shall, upon a change in its applicable lending office, upon the effectiveness of
the related transfer, be required to provide all of the forms, certifications
and statements required pursuant to this subsection, provided that in the case
                                                     --------                 
of a participant of a Lender the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the participant of a
Lender were a Lender except that such participant of a Lender shall furnish all
such required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.

     (c) If any Lender shall become aware that it is entitled to claim a refund
or credit (such credit to include any increase in any foreign tax credit) in
respect of any Non-Excluded Taxes (including any penalties or interest with
respect thereto) as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid increased amounts pursuant to this
Section 3.10, it shall promptly notify the Borrower of the availability of such
refund or credit and shall, within 30 days after receipt of a request by the
Borrower, apply for such refund or credit.  If any Lender receives a refund or
credit (such credit to include any increase in any foreign tax 

                                       16
<PAGE>
 
credit) in respect of any Non-Excluded Taxes as to which it has been indemnified
by the Borrower or with respect to which the Borrower has paid increased amounts
under this Section 3.10, it shall promptly notify the Borrower of such refund or
credit and shall, within 30 days after receipt of such refund or the benefit of
such credit (such benefit to include any reduction of the taxes for which the
Lender would otherwise be liable due to any increase in any foreign tax credit
available to such Lender) repay the amount of such refund or benefit of such
credit to the Borrower (to the extent of amounts that have been paid by the
Borrower under this Section 3.10 with respect to Non-Excluded Taxes giving rise
to such refund or credit), plus any interest received with respect thereto, net
or all reasonable out-of-pocket expenses of such Lender and without interest
(other than interest actually received from the relevant taxing authority or
other governmental authority with respect to such refund or credit); provided,
                                                                     -------- 
however, that the Borrower, upon the request of such Lender, agrees to return
-------                                                                      
the amount of such refund or benefit of such credit (plus interest) to such
Lender in the event such Lender is required to repay the amount of such refund
or benefit of such credit to the relevant taxing authority or other governmental
authority.

     (d) Each Lender represents that it is not participating in, and will not
participate in, a conduit financing arrangement within the meaning of Treas.
Reg. (S)1.881-3(a)(2)(iv) in connection with the Loans.

     3.11 Indemnity.
          --------- 

     The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto.  With
respect to Eurodollar Loans, such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of the applicable Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would have
commenced on the date of such failure) in each case at the applicable rate of
interest for such Eurodollar Loans provided for herein (excluding, however, the
Applicable Percentage included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank Eurodollar market.  The covenants of the
Borrower set forth in this Section 3.11 shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.

     3.12 Pro Rata Treatment.
          ------------------ 

     Except to the extent otherwise provided herein:

                                       17
<PAGE>
 
     (a) Loans.  Each Loan, each payment or prepayment of principal of any Loan,
         -----                                                                  
each payment of interest on the Loans, each payment of Commitment Fees, each
reduction of the Revolving Committed Amount and each conversion or extension of
any Loan, shall be allocated pro rata among the Lenders in accordance with the
respective principal amounts of their outstanding Loans and Participation
Interests.

     (b) Advances.  Unless the Administrative Agent shall have been notified in
         --------                                                              
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its ratable share of such borrowing available to
the Administrative Agent, the Administrative Agent may assume that such Lender
is making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount.  If such amount is not made available to
the Administrative Agent by such Lender within the time period specified
therefor hereunder, such Lender shall pay to the Administrative Agent, on
demand, such amount with interest thereon at a rate equal to the Federal Funds
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent.  A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.

     3.13 Sharing of Payments.
          ------------------- 

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

                                       18
<PAGE>
 
Agent or such other Lender at a rate per annum equal to the Federal Funds Rate.
If under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this Section 3.13 applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders under
this Section 3.13 to share in the benefits of any recovery on such secured
claim.

     3.14 Payments, Computations, Etc.
          ----------------------------

     (a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Administrative Agent in Dollars in immediately
available funds, without offset, deduction, counterclaim or withholding of any
kind, at the Administrative Agent's office specified in Section 9.1 not later
than 2:00 P.M. (Charlotte, North Carolina time) on the date when due.  Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day.  The Borrower shall, at the time it makes any payment
under this Credit Agreement, specify to the Administrative Agent the Loans,
Fees, interest or other amounts payable by the Borrower hereunder to which such
payment is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the Administrative
Agent shall distribute such payment to the Lenders in such manner as the
Administrative Agent may determine to be appropriate in respect of obligations
owing by the Borrower hereunder, subject to the terms of Section 3.12(a)).  The
Administrative Agent will distribute such payments to such Lenders, if any such
payment is received prior to 12:00 Noon (Charlotte, North Carolina time) on a
Business Day in like funds as received prior to the end of such Business Day and
otherwise the Administrative Agent will distribute such payment to such Lenders
on the next succeeding Business Day.  Whenever any payment hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day (subject to accrual of
interest and Fees for the period of such extension), except that in the case of
Eurodollar Loans, if the extension would cause the payment to be made in the
next following calendar month, then such payment shall instead be made on the
next preceding Business Day.  Except as expressly provided otherwise herein, all
computations of interest and fees shall be made on the basis of actual number of
days elapsed over a year of 360 days, except with respect to computation of
interest on Base Rate Loans which (unless the Base Rate is determined by
reference to the Federal Funds Rate) shall be calculated based on a year of 365
or 366 days, as appropriate.  Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.

     (b)  Allocation of Payments After Event of Default.  Notwithstanding any
          ---------------------------------------------                      
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Administrative Agent or any Lender on account of the Obligations
or any other amounts  outstanding under any of the Credit Documents shall be
paid over or delivered as follows:

          FIRST, to the payment of all reasonable out-of-pocket costs and
     expenses (including without limitation reasonable attorneys' fees) of the
     Administrative Agent in connection with enforcing the rights of the Lenders
     under the Credit Documents;

          SECOND, to payment of any fees owed to the Administrative Agent;

                                       19
<PAGE>
 
          THIRD, to the payment of all reasonable out-of-pocket costs and
     expenses (including without limitation, reasonable attorneys' fees) of each
     of the Lenders in connection with enforcing its rights under the Credit
     Documents or otherwise with respect to the Obligations owing to such
     Lender;

          FOURTH, to the payment of all accrued interest and fees on or in
     respect of the Obligations;

          FIFTH, to the payment of the outstanding principal amount of the
     Obligations;

          SIXTH, to all other Obligations and other obligations which shall have
     become due and payable under the Credit Documents or otherwise and not
     repaid pursuant to clauses "FIRST" through "FIFTH" above; and

          SEVENTH, to the payment of the surplus, if any, to whoever may be
     lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Obligations held by such Lender bears to the aggregate then outstanding
Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above.

     (c) Treatment.  The Lenders agree that in the exercise of rights under
         ---------                                                         
Sections 3.6, 3.7, 3.8 and 3.9, they will accord the Borrower the treatment
generally accorded by the Lenders to similarly situated borrowers.

     3.15 Evidence of Debt.
          ---------------- 

     (a) Each Lender shall maintain an account or accounts evidencing each Loan
made by such Lender to the Borrower from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Credit Agreement.  Each Lender will make reasonable efforts to maintain the
accuracy of its account or accounts and to promptly update its account or
accounts from time to time, as necessary.

     (b) The Administrative Agent shall maintain the Register pursuant to
Section 9.3(c) hereof, and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from or for
the account of the Borrower and each Lender's share thereof.  The Administrative
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.

     (c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.15 (and, if consistent with the
entries of the Administrative Agent, 

                                       20
<PAGE>
 
subsection (a)) shall be prima facie evidence of the existence and amounts of
the obligations of the Borrower therein recorded; provided, however, that the
                                                  --------  -------       
failure of any Lender or the Administrative Agent to maintain any such account,
such Register or such subaccount, as applicable, or any error therein, shall not
in any manner affect the obligation of the Borrower to repay the Loans made by
such Lender in accordance with the terms hereof.


                                   SECTION 4
                                    GUARANTY
                                    --------

     4.1  The Guarantee.
          ------------- 

     Each of the Guarantors hereby jointly and severally guarantees to each
Lender, to each Affiliate of a Lender that enters into a Hedging Agreement and
to the Administrative Agent as hereinafter provided the prompt payment of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof.  The Guarantors hereby
further agree that if any of the Guaranteed Obligations are not paid in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as mandatory cash collateralization or otherwise and after giving
effect to any grace periods), the Guarantors will, jointly and severally,
promptly pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration or otherwise and
after giving effect to any grace periods) in accordance with the terms of such
extension or renewal.  This is a guaranty of payment and not of collection.

     Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).

     4.2  Obligations Unconditional.
          ------------------------- 

     The obligations of the Guarantors under Section 4.1 hereof are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances.  Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Guaranteed Obligations for amounts paid under this
Guaranty until such time as the Lenders (and 

                                       21
<PAGE>
 
any Affiliates of Lenders entering into Hedging Agreements) have been paid in
full, all Commitments under the Credit Agreement have been terminated and no
Person or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents or Hedging Agreements. Without limiting the generality of
the foregoing, it is agreed that, to the fullest extent permitted by law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:

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

          (ii) any of the acts mentioned in any of the provisions of any of the
     Credit Documents, any Hedging Agreement or any other agreement or
     instrument referred to in the Credit Documents or Hedging Agreements shall
     be done or omitted;

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

          (iv) any Lien granted to, or in favor of, the Administrative Agent or
     any Lender or Lenders as security for any of the Guaranteed Obligations
     shall fail to attach or be perfected or shall be released or discharged in
     whole or in part; or

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

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

     4.3  Reinstatement.
          ------------- 

     The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and 

                                       22
<PAGE>
 
expenses of counsel) incurred by the Administrative Agent or such Lender in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.

     4.4  Certain Additional Waivers.
          -------------------------- 

     Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. (S)(S) 26-7
through 26-9, inclusive.  Each Guarantor further agrees that such Guarantor
shall have no right of recourse to security for the Guaranteed Obligations,
except through the exercise of the rights of subrogation pursuant to Section
4.2.

     4.5  Remedies.
          -------- 

     The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 7.2 hereof (and shall be deemed
to have become automatically due and payable in the circumstances provided in
said Section 7.2) for purposes of Section 4.1 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing the
Guaranteed Obligations from becoming automatically due and payable) as against
any other Person and that, in the event of such declaration (or the Guaranteed
Obligations being deemed to have become automatically due and payable), the
Guaranteed Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
Section 4.1.

     4.6  Rights of Contribution.
          ---------------------- 

     The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below).  The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations.  For purposes
hereof, (i) "Excess Funding Guarantor" shall mean, in respect of any obligations
             ------------------------                                           
arising under the other provisions of this Section 4 (hereafter, the "Guarantied
                                                                      ----------
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
-----------                                                                 
Share of the Guarantied Obligations; (ii) "Excess Payment" shall mean, in
                                           --------------                
respect of any Guarantied Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guarantied Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.6, shall mean, for
       --------------                                                        
any Guarantor, the ratio (expressed as a percentage) of (a) the amount by which
the aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all 

                                       23
<PAGE>
 
debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (b) the amount by which the aggregate present fair
saleable value of all assets and other properties of the Borrower and all of the
Guarantors exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of the Borrower and the Guarantors hereunder) of the Borrower
and all of the Guarantors, all as of the Closing Date (if any Guarantor becomes
a party hereto subsequent to the Closing Date, then for the purposes of this
Section 4.6 such subsequent Guarantor shall be deemed to have been a Guarantor
as of the Closing Date and the information pertaining to, and only pertaining
to, such Guarantor as of the date such Guarantor became a Guarantor shall be
deemed true as of the Closing Date).

     4.7  Continuing Guarantee.
          -------------------- 

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


                                   SECTION 5
                                   CONDITIONS
                                   ----------

     5.1  Conditions to Closing.
          --------------------- 

     Closing of the liquidity facility pursuant to this Credit Agreement is
subject to satisfaction of the following conditions precedent:

          (a)  Execution of Credit Agreement and Credit Documents.  Receipt of
               --------------------------------------------------             
(i) multiple counterparts of this Credit Agreement, (ii) a Revolving Note for
each Lender, (iii) multiple counterparts of the Pledge Agreement and the
Security Agreement and UCC financing statements relating thereto, if any, in
each case executed by a duly authorized officer of each party thereto and in
each case conforming to the requirements of this Credit Agreement.

          (b)  Liquidity Intercreditor Agreement.  Receipt of multiple executed
               ---------------------------------                               
counterparts of the Liquidity Intercreditor Agreement.

          (c)  Stock Certificates.  Acknowledgment from NationsBank, N.A., as
               ------------------                                            
Administrative Agent under the Existing Credit Agreement, (i) of its receipt of
original stock certificates evidencing the ownership interests of the Credit
Parties pledged pursuant to the Pledge Agreement, together in each case with
original undated stock powers executed in blank (evidencing, among other things,
100% of the voting stock of the Borrower), (ii) of the interests of the
Administrative Agent and the Lenders hereunder therein pursuant to the Pledge
Agreement and (iii) that it holds such stock certificates and stock powers as
bailee for the Administrative Agent hereunder.

          (d)  Financial Information.  Receipt of financial information
               ---------------------                                   
regarding the Company and the Borrower and their subsidiaries, as may be
requested by, and in each case in form and substance satisfactory to the Agents.

                                       24
<PAGE>
 
          (e)  Absence of Legal Proceedings.  The absence of any action , suit,
               ----------------------------                                    
investigation or proceeding pending in any court or before any arbitrator or
governmental instrumentality which could reasonably be expected to have a
Material Adverse Effect on the Consolidated Group taken as a whole.

          (f)  Legal Opinions.  Receipt of multiple counterparts of opinions of
               --------------                                                  
counsel for the Credit Parties relating to the Credit Documents and the
transactions contemplated herein, in form and substance satisfactory to the
Agents and the Lenders.

          (g)  Corporate Documents.  Receipt of the following (or their
               -------------------                                     
equivalent) for each of the Credit Parties:

               (i)    Articles of Incorporation.  Copies of the certificate of
                      -------------------------                               
     incorporation or charter documents certified to be true and complete as of
     a recent date by the appropriate governmental authority of the state of its
     incorporation.

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

               (iii)  Bylaws.  Copies of the bylaws certified by a secretary or
                      ------                                                   
     assistant secretary as of the Closing Date to be true and correct and in
     force and effect as of such date.

               (iv)   Good Standing.  Copies, where applicable, of (A)
                      -------------                                   
     certificates of good standing, existence or its equivalent certified as of
     a recent date by the appropriate governmental authorities of the state of
     incorporation and each other state in which the failure to so qualify and
     be in good standing would have a Material Adverse Effect and (B) a
     certificate indicating payment of all corporate franchise taxes certified
     as of a recent date by the appropriate governmental taxing authorities in
     the state of incorporation.

               (v)    Officer's Certificate.  An officer's certificate for 
                      ---------------------                
     each of the Credit Parties dated as of the Closing Date substantially in
     the form of Schedule 5.1(g)(v) with appropriate insertions and attachments.
                 ------------------                                             

               (vi)   Solvency Certificate.  An officer's certificate for each 
                      --------------------                
     of the Borrower and the Company, both dated as of the Closing Date and
     substantially in the form of Schedule 5.1(g)(vi)(A) or Schedule
                                  ----------------------    --------
     5.1(g)(vi)(B), as appropriate.
     -------------                 

          (h)  Fees.  Receipt of all fees, if any, owing pursuant to the
               ----                                                     
Administrative Agent's Fee Letter, Section 3.5 or otherwise.

                                       25
<PAGE>
 
          (i)  Additional Matters.  All other documents and legal matters in
               ------------------                                           
connection with the transactions contemplated by this Credit Agreement shall be
reasonably satisfactory in form and substance to the Agents and the Required
Lenders.

     5.2  Conditions to Effectiveness.
          --------------------------- 

     Effectiveness of the liquidity facility pursuant to this Credit Agreement,
and to the initial Extensions of Credit hereunder, are subject to satisfaction
of the following conditions precedent:

          (a) Amendment No. 4 to Existing Credit Agreement.  Receipt of an
              --------------------------------------------                
executed copy of Amendment No. 4 to the Existing Credit Agreement, in form and
substance satisfactory to the Lenders hereunder.

          (b) Section 5.3 Conditions.  The conditions specified in Section 5.3
              ----------------------                                          
shall be satisfied.

     5.3  Conditions to All Extensions of Credit.
          -------------------------------------- 

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

          (a)  Representations and Warranties.  The representations and
               ------------------------------                          
warranties made by the Credit Parties herein or in any other Credit Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects on and as
of the date of such Extension of Credit as if made on and as of such date
(except for those which expressly relate to an earlier date).

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

          (c)  No Material Adverse Effect.  No circumstances, events or
               --------------------------                              
conditions shall have occurred since the date of the audited financial
statements referenced in Section 6.1 of the Incorporated Representations which
would have a Material Adverse Effect.

          (d)  Additional Conditions to Revolving Loans.  If a Revolving Loan is
               ----------------------------------------                         
made pursuant to Section 2.1, all conditions set forth therein shall have been
satisfied.

          (e)  No Availability under the Existing Credit Agreement.  The
               ---------------------------------------------------      
Existing Credit Agreement shall then be fully drawn upon and there shall be no
remaining availability thereunder.

     Each request for an Extension of Credit (including extensions and
conversions) and each acceptance by the Borrower of an Extension of Credit
(including extensions and conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of 

                                       26
<PAGE>
 
such Extension of Credit that the applicable conditions in paragraphs (a), (b),
(c), (d) and (e) of this subsection have been satisfied.

                                   SECTION 6
                   REPRESENTATIONS, WARRANTIES AND COVENANTS
                   -----------------------------------------

     6.1  Incorporation.
          ------------- 

     The representations and warranties contained in Section 6 of the Existing
Credit Agreement (the "Incorporated Representations") and the affirmative and
                       ----------------------------                          
negative covenants contained in Sections 7 and 8, respectively, of the Existing
Credit Agreement (the "Incorporated Covenants") as in effect on the Closing Date
                       ----------------------                                   
are incorporated herein by reference with the same effect as if stated at
length.  The Credit Parties affirm and represent and warrant to the
Administrative Agent and the Lenders that the Incorporated Representations are
true and correct in all material respects as of the date hereof and covenant and
agree that the Incorporated Covenants shall be as binding on the Credit Parties
as if set forth fully herein, provided that (i) such Incorporated
                              --------                           
Representations and Incorporated Covenants as incorporated herein shall reflect
that they are delivered to and run in favor of the Administrative Agent and the
Lenders hereunder, rather than just to the Administrative Agent and the Lenders
under the Existing Credit Agreement as literally provided in the Existing Credit
Agreement, and references therein to the "Credit Agreement" and "Credit
Documents" shall be deemed for purposes hereof to include this Credit Agreement
and the Credit Documents relating hereto, (ii) any amendments or modifications
to such Incorporated Representations or Incorporated Covenants subsequent to the
date hereof must be consented to in writing by the Required Lenders hereunder,
and (iii) in the event that the Existing Credit Agreement shall be refinanced or
replaced by another credit agreement, then the Incorporated Representations and
Incorporated Covenants shall be as in effect immediately prior to such
refinancing or replacement.

     6.2  Additional Representations.
          -------------------------- 

          (a) Purpose of Extensions of Credit.  Notwithstanding the provisions
              -------------------------------                                 
of Section 6.15 of the Existing Credit Agreement, Extensions of Credit under
this Credit Agreement shall be used for general corporate purposes, including
the build-up of inventory and receivables.

     6.3  Additional Covenants.
          -------------------- 

          (a) Purpose of Revolving Loans.  The proceeds of Revolving Loans
              --------------------------                                  
hereunder shall be used for general corporate purposes, including the build-up
of inventory and receivables.

          (b) Additional Guaranties and Stock Pledges.  The Company will provide
              ---------------------------------------                           
to the Administrative Agent for the benefit of the Lenders hereunder a Joinder
Agreement providing a guaranty of the obligations under this Credit Agreement in
the same form and from the same Subsidiaries and Affiliates and a pledge of
stock relating thereto as provided under the Existing Credit Agreement in
Section 7.11 thereof.

                                       27
<PAGE>
 
          (c) Prepayments under the Existing Credit Facility.  There shall be
              ----------------------------------------------                 
excepted from the operation of Section 8.9(a) of the Existing Credit Agreement
as incorporated herein amendment, modification or waiver of the provisions of
the Existing Credit Agreement and from the operation of Section 8.9(b) of the
Existing Credit Agreement as incorporated herein prepayment, mandatory, optional
or voluntary, on the Obligations under the Existing Credit Agreement.

          (d) Prepayments and Commitment Reductions under the Existing Credit
              ---------------------------------------------------------------
Agreement.  During the term of this Credit Agreement, the Borrower will not (i)
---------                                                                      
make any optional or voluntary prepayment on or in respect of the Obligations
under the Existing Credit Agreement during any period when Revolving Loans are
outstanding hereunder, or (ii) make any optional or voluntary reduction in the
Aggregate Revolving Committed Amount under the Existing Credit Agreement.


                                   SECTION 7
                               EVENTS OF DEFAULT
                               -----------------

     7.1  Events of Default.
          ----------------- 

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

     (a)  Payment.  Any Credit Party shall
          -------                         

          (i) default in the payment when due of any principal of any of the
    Loans, or

          (ii) default, and such defaults shall continue for five (5) or more
    Business Days, in the payment when due of any interest on the Loans, or of
    any Fees or other reasonable fees and amounts owing hereunder, under any of
    the other Credit Documents or in connection herewith or therewith; or

     (b) Representations.  Any representation, warranty or statement made or
         ---------------                                                    
deemed to be made herein, in any of the other Credit Documents, or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove untrue in any material respect on the date as of which it
was deemed to have been made; or

     (c)  Covenants.
          --------- 

          (i) Default in the due performance or observance of any term, covenant
    or agreement contained in Section 7.3(a), 7.9, 7.11, 7.13 or 8.1 through
    8.12 (except in the case of negative covenants contained in Sections 8.1
    through 8.12, those Defaults which may occur or arise other than on account
    of or by affirmative or intentional act of the Borrower or event or
    condition which the Borrower shall with knowledge permit to exist, all of
    which shall be subject to the 

                                       28
<PAGE>
 
    provisions of clause (ii) hereof), inclusive, in each case of the
    Incorporated Covenants, or

          (ii) Default in the due performance or observance by it of any term,
    covenant or agreement (other than those referred to in subsections (a), (b)
    or (c)(i) of this Section 7.1) contained in this Credit Agreement and such
    default shall continue unremedied for a period of at least 30 days after the
    earlier of a Responsible Officer of a Credit Party becoming aware of such
    default, or the giving of notice thereof by the Administrative Agent, or
    with respect to Section 7.8 of the Incorporated Covenants, without a
    response or investigation being initiated within such time period; or

     (d) Other Credit Documents.  (i) Any Credit Party shall default in the due
         ----------------------                                                
performance or observance of any material term, covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any), or (ii) except as to the Credit Party which is dissolved, released or
merged or consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.4(a), Section 8.4(b)
or Section 8.4(c) of the Incorporated Covenants, any Credit Document shall fail
to be in full force and effect or to give the Administrative Agent and/or the
Lenders any material part of the Liens, rights, powers and privileges purported
to be created thereby; or

     (e) Guaranties.  Except as to the Credit Party which is dissolved, released
         ----------                                                             
or merged or consolidated out of existence as the result of or in connection
with a dissolution, merger or disposition permitted by Section 8.4(a), Section
8.4(b) or Section 8.4(c) of the Incorporated Covenants, the guaranty given by
any Guarantor hereunder or any material provision thereof shall cease to be in
full force and effect, or any Guarantor hereunder or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's obligations
under such guaranty, or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any guaranty; or

     (f) Bankruptcy, etc.  Any Bankruptcy Event shall occur with respect to any
         ---------------                                                       
member of the Consolidated Group; or

     (g) Defaults under Other Agreements.
         ------------------------------- 

          (i) Any member of the Consolidated Group shall default in the
    performance or observance (beyond the applicable grace period with respect
    thereto, if any) of any material obligation or condition of any contract or
    lease material to the Consolidated Group, taken as a whole which is
    reasonably likely to have a Material Adverse Effect; or

          (ii) With respect to any Indebtedness (other than Indebtedness
    outstanding under this Credit Agreement) in excess of $10,000,000 in the
    aggregate for the Consolidated Group taken as a whole, (A) (1) any member of
    the Consolidated Group shall default in any payment (beyond the applicable
    grace period with respect thereto, if any) with respect to any such
    Indebtedness, or (2) the occurrence and continuance of a default in the
    observance or performance relating to such Indebtedness or contained in any
    instrument or agreement evidencing, securing or relating thereto, or any
    other event or condition shall occur or condition exist, the effect of which
    is to cause any such 

                                       29
<PAGE>
 
    Indebtedness to become due prior to its stated maturity; or (B) any such
    Indebtedness shall be declared due and payable, or required to be prepaid
    other than by a regularly scheduled required prepayment, prior to the stated
    maturity thereof; or

     (h) Judgments.  Any member of the Consolidated Group shall fail within 30
         ---------                                                            
days of the date due and payable to pay, bond or otherwise discharge any
judgment, settlement or order for the payment of money which judgment,
settlement or order, when aggregated with all other such judgments, settlements
or orders due and unpaid at such time, exceeds $5,000,000, and which is not
stayed on appeal (or for which no motion for stay is pending) or is not
otherwise being executed or is not covered by insurance (subject to applicable
deductibles); or

     (i) ERISA.  Any of the following events or conditions, if such event or
         -----                                                              
condition could reasonably be expected to have a Material Adverse Effect: (1)
any "accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Code, whether or not waived, shall exist with
respect to any Single Employer or Multiple Employer Plan, or any lien shall
arise on the assets of a member of the Consolidated Group or any ERISA Affiliate
in favor of the PBGC or a Plan; (2) an ERISA Event shall occur with respect to a
Single Employer Plan, which is, in the reasonable opinion of the Administrative
Agent, likely to result in the termination of such Plan for purposes of Title IV
of ERISA; (3) an ERISA Event shall occur with respect to a Multiemployer Plan or
Multiple Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in (i) the termination of such Plan for
purposes of Title IV of ERISA, or (ii) a member of the Consolidated Group or any
ERISA Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
of (within the meaning of Section 4245 of ERISA) such Plan; or (4) any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or breach of fiduciary responsibility shall occur which may
subject a member of the Consolidated Group or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which a member
of the Consolidated Group or any ERISA Affiliate has agreed or is required to
indemnify any person against any such liability; or

     (j) Ownership.  There shall occur a Change of Control; or
         ---------                                            

     (k) Existing Credit Agreement.  The occurrence and continuance of an Event
         -------------------------                                             
of Default under the Existing Credit Agreement.

     7.2  Acceleration; Remedies.
          ---------------------- 

     Upon the occurrence of an Event of Default, and at any time thereafter
during the continuance of an Event of Default, the Administrative Agent shall,
upon the request and direction of the Required Lenders, by written notice to the
Credit Parties take any of the following actions:

          (i) Termination of Commitments.  Declare the Commitments terminated
              --------------------------                                     
    whereupon the Commitments shall be immediately terminated.

                                       30
<PAGE>
 
          (ii) Acceleration.  Declare the unpaid principal of and any accrued
               ------------                                                  
    interest in respect of all Loans and any and all other indebtedness or
    obligations of any and every kind owing by the Credit Parties to the
    Administrative Agent and/or any of the Lenders hereunder to be due whereupon
    the same shall be immediately due and payable without presentment, demand,
    protest or other notice of any kind, all of which are hereby waived by each
    of the Credit Parties.

          (iii)  Enforcement of Rights.  Enforce any and all rights and
                 ---------------------                                 
    interests created and existing under the Credit Documents and all rights of
    set-off.

Notwithstanding the foregoing, if an Event of Default specified in Section
7.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Administrative Agent and/or any
of the Lenders hereunder automatically shall immediately become due and payable
without presentment, demand, protest or the giving of any notice or other action
by the Administrative Agent or the Lenders, all of which are hereby waived by
the Credit Parties.


                                   SECTION 8
                               AGENCY PROVISIONS
                               -----------------

     8.1  Appointment.
          ----------- 

     Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity, the "Administrative Agent") of such
                                             --------------------          
Lender to act as specified herein and the other Credit Documents, and each such
Lender hereby authorizes the Administrative Agent as the Administrative Agent
for such Lender, to take such action on its behalf under the provisions of this
Credit Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated by the terms hereof and of the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. Each Lender further directs and authorizes the
Administrative Agent to execute releases (or similar agreements) to give effect
to the provisions of this Credit Agreement and the other Credit Documents,
including specifically without limitation the provisions of Section 3.16 hereof
and Section 8.4 of the Incorporated Covenants hereof.  Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
the Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein and therein, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Credit Agreement or any of
the other Credit Documents, or shall otherwise exist against the Administrative
Agent.  The provisions of this Section are solely for the benefit of the
Administrative Agent and the Lenders and none of the Credit Parties shall have
any rights as a third party beneficiary of the provisions hereof.  In performing
its functions and duties under this Credit Agreement and the other Credit
Documents, the Administrative Agent shall act solely as Administrative Agent of
the Lenders and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for any Credit Party or
any of their respective Affiliates.

                                       31
<PAGE>
 
     8.2  Delegation of Duties.
          -------------------- 

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

     8.3  Exculpatory Provisions.
          ---------------------- 

     The Administrative Agent and its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall not be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, document,
financial statement or other written or oral statement referred to or provided
for in, or received by the Administrative Agent under or in connection herewith
or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure of
any Credit Party to perform its obligations hereunder or thereunder.  The
Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower or any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Credit Parties to the Administrative Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or of the existence or possible existence of any Default or Event of Default or
to inspect the properties, books or records of the Credit Parties or any of
their respective Affiliates.

     8.4  Reliance on Communications.
          -------------------------- 

     The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Administrative Agent with reasonable care).  The
Administrative Agent may deem and treat the Lenders as the owner of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 9.3(b) hereof.  The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it 

                                       32
<PAGE>
 
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Credit Documents in accordance with a
request of the Required Lenders (or to the extent specifically provided in
Section 9.6, all the Lenders) and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Lenders (including their
successors and assigns).

     8.5  Notice of Default.
          ----------------- 

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

     8.6  Non-Reliance on Administrative Agent and Other Lenders.
          ------------------------------------------------------ 

     Each Lender expressly acknowledges that each of the Administrative Agent
and its officers, directors, employees, agents, attorneys-in-fact or affiliates
has not made any representations or warranties to it and that no act by the
Administrative Agent or any affiliate thereof hereinafter taken, including any
review of the affairs of any Credit Party or any of their respective Affiliates,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender.  Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower, the other
Credit Parties or their respective Affiliates and made its own decision to make
its Loans hereunder and enter into this Credit Agreement.  Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Credit Agreement, and to make such investigation as it deems necessary to
inform itself as to the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower, the other
Credit Parties and their respective Affiliates.  Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial or other
conditions, prospects or creditworthiness of the Borrower, the other Credit
Parties or any of their respective Affiliates which may come into the possession
of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.

     8.7  Indemnification.
          --------------- 

                                       33
<PAGE>
 
     The Lenders agree to indemnify the Agents in their capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Commitments (or if the
Commitments have expired or been terminated, in accordance with the respective
principal amounts of outstanding Loans and Participation Interests of the
Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the final payment of all of the obligations of the Borrower
hereunder and under the other Credit Documents) be imposed on, incurred by or
asserted against the Agents in their capacity as such in any way relating to or
arising out of this Credit Agreement or the other Credit Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agents
under or in connection with any of the foregoing; provided that no Lender shall
                                                  --------                     
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful misconduct of the
Agents.  If any indemnity furnished to the Agents for any purpose shall, in the
opinion of such Agent, be insufficient or become impaired, the Agent may call
for additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.  The agreements in this
Section shall survive the repayment of the Loans, and other obligations under
the Credit Documents and the termination of the Commitments hereunder.

     8.8  Administrative Agent in its Individual Capacity.
          ----------------------------------------------- 

     The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Company, the
Borrower, its Subsidiaries or their respective Affiliates as though the
Administrative Agent were not the Administrative Agent hereunder.  With respect
to the Loans made to and all obligations of the Borrower hereunder and under the
other Credit Documents, the Administrative Agent shall have the same rights and
powers under this Credit Agreement as any Lender and may exercise the same as
though it were not the Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.

     8.9  Successor Administrative Agent.
          ------------------------------ 

     The Administrative Agent may, at any time, resign upon 20 days' written
notice to the Lenders, and may be removed, upon show of cause, by the Required
Lenders upon 30 days' written notice to the Administrative Agent.  Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent.  If no successor Administrative Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the notice of resignation or notice of
removal, as appropriate, then the retiring Administrative Agent shall select a
successor Administrative Agent provided such successor is a Lender hereunder or
a commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and has a combined capital and surplus of at
least $400,000,000.  Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations as 

                                       34
<PAGE>
 
Administrative Agent, as appropriate, under this Credit Agreement and the other
Credit Documents and the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Credit Agreement.

     8.10 Intercreditor Agreements.
          ------------------------ 

     (a)  The terms of the Excluded Receivables Transaction require the
execution of an Intercreditor Agreement substantially in the form of Schedule
                                                                     --------
8.10(a) (the "Intercreditor Agreement") as a condition to the grant of a
-------       -----------------------                                   
security interest by the Borrower in inventory and accounts.  By execution
hereof, each Lender hereby acknowledges, and agrees to be bound by, the terms of
the Intercreditor Agreement (including specifically, without limitation, the
provisions of Sections 6, 7 and 10(b) thereof), and further authorizes and
directs the Administrative Agent to enter into the Intercreditor Agreement on
its behalf.

     (b) In addition, inasmuch as the obligations under the Existing Credit
Agreement are secured by the same collateral as that securing the obligations
this Credit Agreement, an intercreditor agreement is required in order that the
respective obligations share in such collateral on a pari passu basis.  By
execution hereof, each Lender hereby acknowledges and agrees to be bound by the
terms of an Intercreditor Agreement in substantially the form of Schedule
                                                                 --------
8.10(b) (as defined herein, the "Liquidity Intercreditor Agreement") and further
-------                          ---------------------------------              
authorizes and directs the Administrative Agent to enter into the Liquidity
Intercreditor Agreement on its behalf.


                                   SECTION 9
                                 MISCELLANEOUS
                                 -------------

     9.1  Notices.
          ------- 

     Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower, Guarantors and the Administrative
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
                                                                      --------
2.1(a), or at such other address as such party may specify by written notice to
------                                                                         
the other parties hereto:

          if to the Borrower or the Guarantors:

                AMERISOURCE CORPORATION
                300 Chester Field Parkway
                Malvern, Pennsylvania  19355
                Attn:  John A. Aberant
                Telephone:  (610) 296-4480
                Telecopy:   (610) 993-9085

                                       35
<PAGE>
 
          if to the Administrative Agent:
                
                NationsBank, N.A.
                101 N. Tryon Street
                Independence Center, 15th Floor
                NC1-001-15-04
                Charlotte, North Carolina  28255
                Attn:  Agency Services
                Telephone:  (704) 386-9371
                Telecopy:   (704) 386-9923
 
          with a copy to:

                NationsBank, N.A.
                NationsBank Healthcare Finance Group
                100 N. Tryon Street
                NationsBank Corporate Center, Eighth Floor
                Charlotte, North Carolina  28255
                Attn:  Scott S. Ward
                Telephone:  (704) 388-7839
                Telecopy:   (704) 388-6002

     9.2  Right of Set-Off.
          ---------------- 

     In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default, each Lender is authorized at any time and from time to
time, without presentment, demand, protest or other notice of any kind (all of
which rights being hereby expressly waived), to set-off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Lender (including, without limitation branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Person to such Lender hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether such Lender shall have made any demand
hereunder and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to have
been made immediately upon the occurrence of an Event of Default even though
such charge is made or entered on the books of such Lender subsequent thereto.
Any Person purchasing a participation in the Loans and Commitments hereunder
pursuant to Section 3.13 or Section 9.3(d) may exercise all rights of set-off
with respect to its participation interest as fully as if such Person were a
Lender hereunder.

     9.3  Benefit of Agreement.
          -------------------- 

          (a) Generally.  This Credit Agreement shall be binding upon and inure
              ---------                                                        
     to the benefit of and be enforceable by the respective successors and
     assigns of the parties hereto; provided that none of the Credit Parties may
                                    --------                                    
     assign or transfer any of its interests or obligations without prior
     written consent of the Lenders; provided   
                                     --------   

                                       36
<PAGE>
 
     further that the rights of each Lender to transfer, assign or grant 
     -------                        
     participations in its rights and/or obligations hereunder shall be limited
     as set forth in this Section 9.3, provided however that nothing herein 
                                       -------- 
     shall prevent or prohibit any Lender from (i) pledging its Loans hereunder
     to a Federal Reserve Bank in support of borrowings made by such Lender from
     such Federal Reserve Bank, or (ii) granting assignments or selling
     participations in such Lender's Loans and/or Commitments hereunder to its
     parent company and/or to any Affiliate or Subsidiary of such Lender.

          (b) Assignments.  Each Lender may assign all or a portion of its
              -----------                                                 
     rights and obligations hereunder, pursuant to an assignment agreement
     substantially in the form of Schedule 9.3(b), to (i) any Lender or any
                                  ---------------                          
     Affiliate or Subsidiary of a Lender, or (ii) any other commercial bank,
     financial institution or "accredited investor" (as defined in Regulation D
     of the Securities and Exchange Commission) reasonably acceptable to the
     Administrative Agent; provided that (i) any such assignment (other than any
                           --------                                             
     assignment to an existing Lender) shall be in a minimum aggregate amount of
     $5,000,000 (or, if less, the remaining amount of the Commitment being
     assigned by such Lender) of the Commitments and in integral multiples of
     $1,000,000 above such amount and (ii) each such assignment shall be of a
     constant, not varying, percentage of all such Lender's rights and
     obligations under this Credit Agreement.  Any assignment hereunder shall be
     effective upon delivery to the Administrative Agent of written notice of
     the assignment together with a transfer fee of $3,500 payable to the
     Administrative Agent for its own account from and after the later of (i)
     the effective date specified in the applicable assignment agreement and
     (ii) the date of recording of such assignment in the Register pursuant to
     the terms of subsection (c) below.  The assigning Lender will give prompt
     notice to the Administrative Agent and the Borrower of any such assignment.
     Upon the effectiveness of any such Assignment (and after notice to, and (to
     the extent required pursuant to the terms hereof), with the consent of, the
     Borrower and the Administrative Agent as provided herein), the assignee
     shall become a "Lender" for all purposes of this Credit Agreement and the
     other Credit Documents and, to the extent of such assignment, the assigning
     Lender shall be relieved of its obligations hereunder to the extent of the
     Loans and Commitment components being assigned.  Along such lines the
     Borrower agrees that upon any such assignment and surrender of the
     appropriate Note or Notes, it will promptly provide to the assigning Lender
     and to the assignee separate promissory notes in the amount of their
     respective interests substantially in the form of the original Note (but
     with notation thereon that it is given in substitution for and replacement
     of the original Note or any replacement notes thereof).  By executing and
     delivering an assignment agreement in accordance with this Section 9.3(b),
     the assigning Lender thereunder and the assignee thereunder shall be deemed
     to confirm to and agree with each other and the other parties hereto as
     follows: (i) such assigning Lender warrants that it is the legal and
     beneficial owner of the interest being assigned thereby free and clear of
     any adverse claim; (ii) except as set forth in clause (i) above, such
     assigning Lender makes no representation or warranty and assumes no
     responsibility with respect to any statements, warranties or
     representations made in or in connection with this Credit Agreement, any of
     the other Credit Documents or any other instrument or document furnished
     pursuant hereto or thereto, or the execution, legality, validity,
     enforceability, genuineness, sufficiency or value of this Credit Agreement,
     any of the other Credit Documents or any other instrument or document
     furnished pursuant hereto or thereto or the financial condition of any
     Credit Party or any of their respective Affiliates 

                                       37
<PAGE>
 
     or the performance or observance by any Credit Party of any of its
     obligations under this Credit Agreement, any of the other Credit Documents
     or any other instrument or document furnished pursuant hereto or thereto;
     (iii) such assignee represents and warrants that it is legally authorized
     to enter into such assignment agreement; (iv) such assignee confirms that
     it has received a copy of this Credit Agreement, the other Credit Documents
     and such other documents and information as it has deemed appropriate to
     make its own credit analysis and decision to enter into such assignment
     agreement; (v) such assignee will independently and without reliance upon
     the Administrative Agent, such assigning Lender or any other Lender, and
     based on such documents and information as it shall deem appropriate at the
     time, continue to make its own credit decisions in taking or not taking
     action under this Credit Agreement and the other Credit Documents; (vi)
     such assignee appoints and authorizes the Administrative Agent to take such
     action on its behalf and to exercise such powers under this Credit
     Agreement or any other Credit Document as are delegated to the
     Administrative Agent by the terms hereof or thereof, together with such
     powers as are reasonably incidental thereto; and (vii) such assignee agrees
     that it will perform in accordance with their terms all the obligations
     which by the terms of this Credit Agreement and the other Credit Documents
     are required to be performed by it as a Lender.

          (c) Maintenance of Register.  The Administrative Agent shall maintain
              -----------------------                                          
     at one of its offices in Charlotte, North Carolina a copy of each Lender
     assignment agreement delivered to it in accordance with the terms of
     subsection (b) above and a register for the recordation of the identity of
     the principal amount, type and Interest Period of each Loan outstanding
     hereunder, the names, addresses and the Commitments of the Lenders pursuant
     to the terms hereof from time to time (the "Register").  The Administrative
                                                 --------                       
     Agent will make reasonable efforts to maintain the accuracy of the Register
     and to promptly update the Register from time to time, as necessary.  The
     entries in the Register shall be conclusive in the absence of manifest
     error and the Borrower, the Administrative Agent and the Lenders may treat
     each Person whose name is recorded in the Register pursuant to the terms
     hereof as a Lender hereunder for all purposes of this Credit Agreement.
     The Register shall be available for inspection by the Borrower and each
     Lender, at any reasonable time and from time to time upon reasonable prior
     notice.

          (d) Participations.  Each Lender may sell, transfer, grant or assign
              --------------                                                  
     participations in all or any part of such Lender's interests and
     obligations hereunder; provided that (i) such selling Lender shall remain a
                            --------                                            
     "Lender" for all purposes under this Credit Agreement (such selling
     Lender's obligations under the Credit Documents remaining unchanged) and
     the participant shall not constitute a Lender hereunder, (ii) no such
     participant shall have, or be granted, rights to approve any amendment or
     waiver relating to this Credit Agreement or the other Credit Documents
     except to the extent any such amendment or waiver would (A) reduce the
     principal of or rate of interest on or Fees in respect of any Loans or any
     Letter of Credit in which the participant is participating, (B) postpone
     the date fixed for any payment of principal (including extension of the
     Termination Date or the date of any mandatory prepayment), interest or Fees
     in which the participant is participating, or (C) except as expressly
     provided in the Credit Documents, release all or substantially all of the
     collateral pledged to secure the Obligations hereunder or release all or
     substantially all of the Guarantors from the guaranty obligations

                                       38
<PAGE>
 
     hereunder, and (iii) sub-participations by the participant (except to an
     affiliate, parent company or affiliate of a parent company of the
     participant) shall be prohibited.  In the case of any such participation,
     the participant shall not have any rights under this Credit Agreement or
     the other Credit Documents (the participant's rights against the selling
     Lender in respect of such participation to be those set forth in the
     participation agreement with such Lender creating such participation) and
     all amounts payable by the Borrower hereunder shall be determined as if
     such Lender had not sold such participation, provided, however, that such
                                                  --------                    
     participant shall be entitled to receive the benefit of additional amounts
     under Sections 3.6, 3.9, 3.10 and 3.11 on the same basis as if it were a
     Lender.

     9.4  No Waiver; Remedies Cumulative.
          ------------------------------ 

     No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Administrative Agent or any Lender
and any of the Credit Parties shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder.  The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have.  No notice to or demand on any Credit Party in any case shall entitle the
Borrower or any other Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.

     9.5  Payment of Expenses, etc.
          ------------------------ 

     The Borrower agrees to:  (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of this Credit Agreement and the other
Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of Moore & Van
Allen, PLLC, special counsel to the Administrative Agent) and any amendment,
waiver or consent relating hereto and thereto including, but not limited to, any
such amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Credit Parties
under this Credit Agreement and (B) of the Administrative Agent and the Lenders
in connection with enforcement of or preservation of rights under the Credit
Documents and the documents and instruments referred to therein (including,
without limitation, in connection with any such enforcement, the reasonable fees
and disbursements of counsel for the Administrative Agent and each of the
Lenders); (ii) pay and hold each of the Lenders harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender, its officers, directors, employees, representatives and
Administrative Agents from and hold each of them harmless against any and all
losses, liabilities, claims, damages or reasonable expenses incurred by any of
them as a result of, or arising out of, or in any way related to, or by reason
of (A) any investigation, litigation or other proceeding (whether or not any
Lender is a party thereto) related 

                                       39
<PAGE>
 
to the entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (other than investigations, litigation or other proceedings relating
solely to claims between or among the Lenders) or (B) the presence or Release of
any Materials of Environmental Concern at, under or from any Property owned,
operated or leased by the Borrower or any of its Subsidiaries, or the failure by
the Borrower or any of its Subsidiaries to comply with any Environmental Law
(but excluding, in the case of either of clause (A) or (B) above, any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of gross negligence or willful misconduct on the part of the Person to be
indemnified).

     9.6  Amendments, Waivers and Consents.
          -------------------------------- 

     Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
          --------  -------       

          (a) no such amendment, change, waiver, discharge or termination shall,
     without the consent of each Lender directly affected thereby, (i) reduce
     the rate or extend the time of payment of interest (other than as a result
     of waiving the applicability of any post-default increase in interest
     rates) on any Loan or the Commitment Fee or the Letter of Credit Fee
     hereunder, (ii) extend (A) the Commitments of the Lenders, or (B) the final
     maturity of any Loan, or (iii) reduce the principal amount on any Loan;

          (b) no such amendment, change, waiver, discharge or termination shall,
     without the consent of each Lender affected thereby, (i) increase the
     Commitments of the Lenders over the amount thereof in effect (it being
     understood and agreed that a waiver of any Default or Event of Default or
     of a mandatory reduction in the total commitments shall not constitute a
     change in the terms of any Commitment of any Lender), (ii) except as the
     result of or in connection with a release of collateral as provided in
     Section 3.16 or with a dissolution, merger or disposition permitted under
     Section 8.4 of the Incorporated Covenants, release all or substantially all
     of the collateral pledged to secure the Obligations hereunder or release
     all or substantially all of the Guarantors from the guaranty obligations
     hereunder, (iii) amend, modify or waive any provision of this Section 11.6
     or Section 3.6, 3.10, 3.11, 3.12, 3.13, 3.16, Section 4, 7.1(a), 9.3, 9.5
     or 9.9, (iv) reduce any percentage specified in, or otherwise modify, the
     definition of "Required Lenders," or (v) consent to the assignment or
     transfer by the Borrower (or any Guarantor) of any of its rights and
     obligations under (or in respect of) the Credit Documents to which it is a
     party; and

          (c) no provision of Section 8 may be amended without the consent of
     the Administrative Agent.

     9.7  Counterparts.
          ------------ 

                                       40
<PAGE>
 
     This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.  It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.

     9.8  Headings.
          -------- 

     The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.

     9.9  Survival.
          -------- 

     All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.9, 3.11 or 7.8(c) of the Incorporated Covenants, 8.7 or 9.5 shall
survive the execution and delivery of this Credit Agreement, the making of the
Loans, the issuance of the Letters of Credit, the repayment of the Loans and
other obligations under the Credit Documents and the termination of the
Commitments hereunder, and all representations and warranties made by the Credit
Parties herein shall survive delivery of the Notes and the making of the Loans
hereunder.

     9.10 Governing Law; Submission to Jurisdiction; Venue.
          ------------------------------------------------ 

     (a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.  Any legal action or proceeding with respect to this Credit Agreement
or any other Credit Document may be brought in the courts of the State of North
Carolina in Mecklenburg County, or of the United States for the Western District
of North Carolina, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the nonexclusive jurisdiction of
such courts.  Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set out for notices pursuant to Section
9.1, such service to become effective three (3) days after such mailing.
Nothing herein shall affect the right of the Administrative Agent to serve
process in any other manner permitted by law or to commence legal proceedings or
to otherwise proceed against any Credit Party in any other jurisdiction.

     (b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

                                       41
<PAGE>
 
     (c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT, THE
LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

     9.11 Severability.
          ------------ 

     If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect  to the illegal, invalid or unenforceable
provisions.

     9.12 Entirety.
          -------- 

     This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.

     9.13 Binding Effect; Termination.
          --------------------------- 

     (a) This Credit Agreement shall become effective at such time on or after
the Closing Date when it shall have been executed by the Borrower, the
Guarantors and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Administrative Agent and each Lender and their respective successors and
assigns.

     (b) The term of this Credit Agreement shall be until no Loans, or any other
amounts payable hereunder or under any of the other Credit Documents shall
remain outstanding and until all of the Commitments hereunder shall have expired
or been terminated.

     9.14 Confidentiality.
          --------------- 

     The Administrative Agent and the Lenders agree to keep confidential (and to
cause their respective affiliates, officers, directors, employees,
Administrative Agents and representatives to keep confidential) all information,
materials and documents furnished to the Administrative Agent or any such Lender
by or on behalf of any Credit Party (whether before or after the Closing Date)
which relates to the Company, the Borrower or any of their Subsidiaries (the
                                                                            
"Information").  Notwithstanding the foregoing, the Administrative Agent and
------------                                                                
each Lender shall be permitted to disclose Information (i) to its affiliates,
officers, directors, employees, Administrative Agents and representatives in
connection with its participation in any of the transactions evidenced by this
Credit Agreement or any other Credit Documents or the administration of this
Credit Agreement or any other Credit Documents; (ii) to the extent required by
applicable laws and regulations or by any subpoena or similar legal process, or
requested by any Governmental Authority; (iii) to the 

                                       42
<PAGE>
 
extent such Information (A) becomes publicly available other than as a result of
a breach of this Credit Agreement or any agreement entered into pursuant to
clause (iv) below, (B) becomes available to the Administrative Agent or such
Lender on a non-confidential basis from a source other than a Credit Party or
(C) was available to the Administrative Agent or such Lender on a non-
confidential basis prior to its disclosure to the Administrative Agent or such
Lender by a Credit Party; (iv) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) first specifically agrees in a writing furnished to and
for the benefit of the Credit Parties to be bound by the terms of this Section
9.14; or (v) to the extent that the Borrower shall have consented in writing to
such disclosure. Nothing set forth in this Section 9.14 shall obligate the
Administrative Agent or any Lender to return any materials furnished by the
Credit Parties.

     9.15 Source of Funds.
          --------------- 

     Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:

          (a) no part of such funds constitutes assets allocated to any separate
     account maintained by such Lender in which any employee benefit plan (or
     its related trust) has any interest;

          (b) to the extent that any part of such funds constitutes assets
     allocated to any separate account maintained by such Lender, such Lender
     has disclosed to the Borrower the name of each employee benefit plan whose
     assets in such account exceed 10% of the total assets of such account as of
     the date of such purchase (and, for purposes of this subsection (b), all
     employee benefit plans maintained by the same employer or employee
     organization are deemed to be a single plan);

          (c) to the extent that any part of such funds constitutes assets of an
     insurance company's general account, such insurance company has complied
     with all of the requirements of the regulations issued under Section
     401(c)(1)(A) of ERISA; or

          (d) such funds constitute assets of one or more specific benefit plans
     which such Lender has identified in writing to the Borrower.

As used in this Section 9.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.

     9.16 Conflict.
          -------- 

     To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.

                           [Signature Page to Follow]

                                       43
<PAGE>
 
     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.

BORROWER:               AMERISOURCE CORPORATION,
--------                               
                        a Delaware corporation

                        By:_______________________________
                        Name:
                        Title:

GUARANTORS:             AMERISOURCE HEALTH CORPORATION,
----------                                    
                        a Delaware corporation

                        By:_______________________________
                        Name:
                        Title:

                        AMERISOURCE HEALTH SERVICES CORP.,
                        a Delaware corporation

                        By:_______________________________
                        Name:
                        Title:

                        AMERISOURCE SALES CORPORATION,
                        a Delaware corporation
                
                        By:_______________________________
                        Name:
                        Title:

                        HEALTH SERVICES CAPITAL CORP.,
                        a Delaware corporation

                        By:_______________________________
                        Name:
                        Title:
<PAGE>
 
                        HEALTH SERVICES PLUS, INC.,
                        a Delaware corporation

                        By:_______________________________
                        Name:
                        Title:

                        AMERISOURCE MEDICAL SUPPLY, INC.
                        a Tennessee corporation

                        By:_______________________________
                        Name:
                        Title:

                        AMERISOURCE HERITAGE CORPORATION
                        a Delaware corporation

                        By:_______________________________
                        Name:
                        Title:

LENDERS:                NATIONSBANK, N.A.,
-------                         
                        individually in its capacity as a Lender
                        and in its capacity as Administrative Agent
                        
                        By:_______________________________
                        Name:
                        Title:


                        THE BANK OF NOVA SCOTIA

                        By:_______________________________
                        Name:
                        Title:
<PAGE>
 
                                Schedule 2.1(a)
                                ---------------
                      Schedule of Lenders and Commitments

                                                                 Revolving
                                      Revolving                  Commitment 
          Lender                   Committed Amount              Percentage
          ------                   ----------------              ----------
                            
 
NationsBank, N.A.                   $ 75,000,000.00              75.000000%%
101 North Tryon Street
15th Floor, Agency Services
NC1-001-15-04
Charlotte, NC 28255
Tel:  (704) 386-9371
Fax: (704) 386-9923
 
The Bank of Nova Scotia             $ 25,000,000.00               25.000000%
_____________________
_____________________
Tel: (___) ___-____                _________________            _____________
Fax: (___) ___-____                 $100,000,000.00              100.000000%
<PAGE>
 
                               Schedule 2.1(b)(i)
                               ------------------

                          FORM OF NOTICE OF BORROWING

NationsBank, N.A.,
 as Administrative Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attention:  Agency Services

     Re:  Credit Agreement dated as of December __, 1998 (as amended and
          modified, the "Credit Agreement") among AmeriSource Corporation, the
                         ----------------                                     
          Guarantors and Lenders identified therein and NationsBank, N.A., as
          Administrative Agent.  Terms used but not otherwise defined herein
          shall have the meanings provided in the Credit Agreement.

Ladies and Gentlemen:

The undersigned, AMERISOURCE CORPORATION, a Delaware corporation, being the
Borrower under the above-referenced Credit Agreement hereby gives notice
pursuant to Section 2.1(b) of the Credit Agreement of a request for a Revolving
Loan as follows

(A)  Date of Borrowing
     (which is a Business Day)          _______________________

(B)  Principal Amount of
     Borrowing                          _______________________

(C)  Interest rate basis                _______________________

(D)  Interest Period and the
     last day thereof                   _______________________

In accordance with the requirements of Section 5.3 of the Credit Agreement, the
undersigned Borrower hereby certifies that:

          (a)  The representations and warranties contained in the Credit
     Agreement and the other Credit Documents are true and correct in all
     material respects as of the date of this request, and will be true and
     correct after giving effect to the requested Extension of Credit (except
     for those which expressly relate to an earlier date).
<PAGE>
 
          (b)  No Default or Event of Default exists, or will exist after giving
     effect to the requested Extension of Credit.

          (c)  No circumstances, events or conditions have occurred since the
     date of the audited financial statements referenced in Section 6.1 of the
     Incorporated Representations of the Credit Agreement which would have a
     Material Adverse Effect.

          (d)  All conditions set forth in Section 2.1 as to the making of
     Revolving Loans have been satisfied.



                                        Very truly yours,

                                        AMERISOURCE CORPORATION

                                        By:_______________________________
                                        Name:
                                        Title:
<PAGE>
 
                                Schedule 2.1(e)
                                ---------------

                             FORM OF REVOLVING NOTE

                                                               December __, 1998

     FOR VALUE RECEIVED, the undersigned Borrower, hereby promises to pay to the
order of ________________________, and its successors and assigns, on or before
the Termination Date to the office of the Administrative Agent in immediately
available funds as provided in the Credit Agreement, the principal amount of
such Lender's Revolving Committed Amount or, if less, the aggregate unpaid
principal amount of all Revolving Loans made by such Lender to the undersigned
Borrower; together with interest thereon at the rates and as provided in the
Credit Agreement.

     This Note is one of the Revolving Notes referred to in the Liquidity
Facility Credit Agreement dated as of December __, 1998 (as amended and
modified, the "Credit Agreement among AmeriSource Corporation, a Delaware
               ----------------                                          
corporation, AmeriSource Health Corporation, a Delaware corporation, the
Guarantors and Lenders identified therein and NationsBank, N.A., as
Administrative Agent.  Terms used but not otherwise defined herein shall have
the meanings provided in the Credit Agreement.

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

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

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

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

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

                                        AMERISOURCE CORPORATION,
                                        a Delaware corporation

                                        By_________________________________
                                        Name:
                                        Title:
<PAGE>
 
                                 Schedule 3.2
                                 ------------

                    Form of Notice of Extension/Conversion

NationsBank, N.A.,
 as Administrative Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina  28255
Attention:  Agency Services

     Re:  Credit Agreement dated as of December __, 1998 (as amended and
          modified, the "Credit Agreement") among AmeriSource Corporation, the
                         ----------------                                     
          Guarantors and Lenders identified therein and NationsBank, N.A., as
          Administrative Agent.  Terms used but not otherwise defined herein
          shall have the meanings provided in the Credit Agreement.

Ladies and Gentlemen:

     The undersigned, AMERISOURCE CORPORATION (the "Borrower"), refers to the
                                                    --------                 
Credit Agreement dated as of December __, 1998 (as amended, modified, extended
or restated from time to time, the "Credit Agreement"), among the Borrower, the
                                    ----------------                           
Lenders and NationsBank, N.A., as Administrative Agent.  Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement.  The Borrower hereby gives notice pursuant to
Section 3.2 of the Credit Agreement that it requests an extension or conversion
of a Revolving Loan outstanding under the Credit Agreement, and in connection
therewith sets forth below the terms on which such extension or conversion is
requested to be made:

(A)  Date of Extension or Conversion
     (which is the last day of the
     the applicable Interest Period)        _______________________

(B)  Principal Amount of
     Extension or Conversion                _______________________

(C)  Interest rate basis                    _______________________

(D)  Interest Period and the
     last day thereof                       _______________________

     In accordance with the requirements of Section 5.3 of the Credit Agreement,
the undersigned Borrower hereby certifies that:
<PAGE>
 
          (a)  The representations and warranties contained in the Credit
     Agreement and the other Credit Documents are true and correct in all
     material respects as of the date of this request, and will be true and
     correct after giving effect to the requested Extension of Credit (except
     for those which expressly relate to an earlier date).

          (b)  No Default or Event of Default exists, or will exist after giving
     effect to the requested Extension of Credit.

          (c)  No circumstances, events or conditions have occurred since the
     date of the audited financial statements referenced in Section 6.1 of the
     Incorporated Representations of the Credit Agreement which would have a
     Material Adverse Effect.

                                             Very truly yours,

                                             AMERISOURCE CORPORATION

                                             By:_______________________
                                             Name:
                                             Title:
<PAGE>
 
                              Schedule 5.1(g)(v)
                              ------------------
                            Secretary's Certificate

     Pursuant to Section 5.1(g)(v) of the Credit Agreement (the "Credit
                                                                 ------
Agreement"), dated as of December __, 1998, among AMERISOURCE CORPORATION, a
---------                                                                   
Delaware corporation, the Guarantors and Lenders identified therein and
NationsBank, N.A., as Administrative Agent, the undersigned ____________________
Secretary of _________________________ (the "Corporation") hereby certifies as
                                             -----------                      
follows:

     1.   Attached hereto as Annex I is a true and complete copy of resolutions
duly adopted by the Board of Directors of the Corporation on __________________,
1998.  The attached resolutions have not been rescinded or modified and remain
in full force and effect.  The attached resolutions are the only corporate
proceedings of the Corporation now in force relating to or affecting the matters
referenced to therein.

     2.   Attached hereto as Annex II is a true and complete copy of the By-laws
of the Corporation as in effect on the date hereof.

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

     4.   The following persons are now duly elected and qualified officers of
the Corporation, holding the offices indicated, and the signature appearing
opposite his name below is his true and genuine signature, and such officer is
duly authorized to execute and deliver on behalf of the Corporation the Credit
Agreement, the Notes to be issued pursuant thereto and the other Credit
Documents and to act as a Responsible Officer on behalf of the Corporation under
the Credit Agreement:

Name                       Office        Signature
----                       ------        ---------

                                         ________________________


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

                                          _______________________________,
                                          Secretary
                                          (CORPORATE SEAL)

Date:  __________________, 1997

     I, ___________________, ___________________ of ________________________,
hereby certify that ______________________, whose genuine signature appears
above, is, and has been at all times since ________________________, a duly
elected, qualified and acting _________________ of
____________________________________.

                                           __________________________________ of
                                           ___________________________________

                                           _______________________________, 1997
<PAGE>
 
                            Schedule 5.1(g)(vi)(A)
                            ----------------------
                             Solvency Certificate

                             Solvency Certificate

     Pursuant to Section 5.1(g)(vi) of the Credit Agreement (the "Credit
                                                                  ------
Agreement;" terms used but not otherwise defined herein shall have the meanings
---------                                                                      
provided in the Credit Agreement), dated as of December __, 1998, among
AMERISOURCE CORPORATION, a Delaware corporation, the Guarantors and Lenders
identified therein and NationsBank, N.A., as Administrative Agent, the
undersigned ____________________ of  AMERISOURCE CORPORATION, a Delaware
corporation (the "Corporation"), hereby certifies:
                  -----------                     

     1. As of the date hereof, the Corporation and its Subsidiaries, on a
     consolidated basis, are able to pay their debts and other liabilities,
     contingent obligations and other commitments as they mature in the normal
     course of business.

     2. As of the date hereof, the Corporation and its Subsidiaries, on a
     consolidated basis, do not intend to, and do not believe that they will,
     incur debts or liabilities beyond their ability to pay as such debts and
     liabilities mature in their ordinary course.

     3. As of the date hereof, the Corporation and its Subsidiaries, on a
     consolidated basis, are not engaged in any business or transaction, and are
     not about to engage in any business or transaction, for which the Property
     of the Corporation and its Subsidiaries, on a consolidated basis, would
     constitute unreasonably small capital after giving due consideration to the
     prevailing practice in the industry in which Corporation and its
     Subsidiaries are engaged or are to engage.

     4. As of the date hereof, the present fair saleable value of the
     consolidated assets of the Corporation and its Subsidiaries is not less
     than the amount that will be required to pay the probable liability on the
     debts of the Corporation and its Subsidiaries, on a consolidated basis, as
     they become absolute and matured.

     This the ____ day of November, 1997.


                                                  AMERISOURCE CORPORATION,
                                                  a Delaware corporation
 
                                                  By:_________________________
                                                  Name:
                                                  Title:
<PAGE>
 
                            Schedule 5.1(g)(vi)(B)
                            ----------------------
                             Solvency Certificate

          Pursuant to Section 5.1(g)(vi) of the Credit Agreement (the "Credit
                                                                       ------
Agreement;" terms used but not otherwise defined herein shall have the meanings
---------                                                                      
provided in the Credit Agreement), dated as of December __, 1998, among
AMERISOURCE CORPORATION, a Delaware corporation, the Guarantors and Lenders
identified therein and NationsBank, N.A., as Administrative Agent, the
undersigned ____________________ of  AMERISOURCE HEALTH CORPORATION, a Delaware
corporation, hereby certifies:

     1. As of the date hereof, the Credit Parties, on a consolidated basis, are
     able to pay their debts and other liabilities, contingent obligations and
     other commitments as they mature in the normal course of business.

     2. As of the date hereof, the Credit Parties, on a consolidated basis, do
     not intend to, and do not believe that they will, incur debts or
     liabilities beyond their ability to pay as such debts and liabilities
     mature in their ordinary course.

     3. As of the date hereof, the Credit Parties, on a consolidated basis, are
     not engaged in any business or transaction, and are not about to engage in
     any business or transaction, for which the Property of the Credit Parties,
     on a consolidated basis, would constitute unreasonably small capital after
     giving due consideration to the prevailing practice in the industry in
     which Credit Parties are engaged or are to engage.

     4. As of the date hereof, the present fair saleable value of the
     consolidated assets of the Credit Parties is not less than the amount that
     will be required to pay the probable liability on the debts of the Credit
     Parties, on a consolidated basis, as they become absolute and matured.

     This the ____ day of November, 1997.


                                                 AMERISOURCE HEALTH CORPORATION,
                                                 a Delaware corporation
 
                                                 By:_________________________
                                                 Name:
                                                 Title:
<PAGE>
 
                               Schedule 8.10(a)
                               ----------------

                    SECURITIZATION INTERCREDITOR AGREEMENT
<PAGE>
 
                               Schedule 8.10(b)
                               ----------------

                       LIQUIDITY INTERCREDITOR AGREEMENT
<PAGE>
 
                                Schedule 9.3(b)
                                ---------------

                       Form of Assignment and Acceptance

     THIS ASSIGNMENT AND ACCEPTANCE dated as of _________________________,
199___ is entered into between THE LENDER IDENTIFIED ON THE SIGNATURE PAGES AS
THE "ASSIGNOR" (the "Assignor") and THE PARTIES IDENTIFIED ON THE SIGNATURE
                     --------                                              
PAGES AS "ASSIGNEES" ("Assignee").
                       --------   

     Reference is made to that Credit Agreement dated as of December __, 1998
(as amended and modified, the "Credit Agreement") among AMERISOURCE CORPORATION,
                               ----------------                                 
a Delaware corporation (the "Borrower"), the Guarantors and Lenders identified
                             --------                                         
therein and NationsBank, N.A., as Administrative Agent.  Terms defined in the
Credit Agreement are used herein with the same meanings.

     1.   The Assignor hereby sells and assigns, without recourse, to the
Assignees, and the Assignees hereby purchase and assume, without recourse, from
the Assignor, effective as of the Effective Date shown below, those rights and
interests of the Assignor under the Credit Agreement identified below (the
                                                                          
"Assigned Interests"), including the Obligations and Commitments relating
-------------------                                                      
thereto, together with unpaid interest and fees relating thereto accruing from
the Effective Date.  The Assignor represents and warrants that it owns the
interests assigned hereby free and clear of liens, encumbrances or other claims.
Each of the Assignees represents that it is an Eligible Assignee within the
meaning of the term in the Credit Agreement.  The Assignor and each of the
Assignees hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 9.3 of the Credit Agreement, a
copy of which has been received by each such party.  From and after the
Effective Date (i) each Assignee, if it is not already a Lender under the Credit
Agreement, shall be a party to and be bound by the provisions of the Credit
Agreement and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and (ii) each
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement (other than the rights of indemnification referenced in Section
9.9 of the Credit Agreement).

     2.   This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of North Carolina.

     3.   Terms of Assignment

     (a)  Date of Assignment:        ___________________, 199__

     (b)  Legal Name of Assignor:      SEE SIGNATURE PAGE
<PAGE>
 
     (c)  Legal Name of Assignee:      SEE SIGNATURE PAGE

     (d)  Effective Date of Assignment:      ___________________, 199__

See Schedule I attached for a description of the Loans and Obligations and
    ----------                                                            
Commitments (and the percentage interests therein and relating thereto) which
are the subject of this Assignment and Acceptance.

     4.   The fee payable to the Paying Agent in connection with this Assignment
is enclosed.

     IN WITNESS WHEREOF, the parties hereto have caused the execution of this
instrument by their duly authorized officers as of the date first above written.

ASSIGNOR:                               ASSIGNEE:
--------                                -------- 

By____________________________          By____________________________
Name:                                   Name:
Title:                                  Title:

ACKNOWLEDGMENT AND CONSENT
--------------------------

NATIONSBANK, N.A.                       AMERISOURCE CORPORATION
as Administrative Agent


By___________________________           By____________________________
Name:                                   Name:
Title:                                  Title:
<PAGE>
 
                                  SCHEDULE I
                                  ----------
                         TO ASSIGNMENT AND ACCEPTANCE
                            AMERISOURCE CORPORATION

           REVOLVING LOANS AND LETTERS OF CREDIT PRIOR TO ASSIGNMENT

<TABLE>
<CAPTION>
                            Revolving              Revolving              Revolving
                            Committed             Commitment                Loans
                             Amount               Percentage             Outstanding
                      ---------------------  ---------------------  ---------------------
<S>                   <C>                    <C>                    <C>
ASSIGNOR
--------
 
 
 
 
ASSIGNEES
----------
 
  
                      ____________________   ____________________   ____________________
                      $                                             $
</TABLE>

  REVOLVING LOANS AND LETTERS OF CREDIT INTERESTS SUBJECT OF THIS ASSIGNMENT

<TABLE>
<CAPTION>
                            Revolving              Revolving              Revolving
                            Committed             Commitment                Loans
                             Amount               Percentage             Outstanding
                      ---------------------  ---------------------  ---------------------
<S>                   <C>                    <C>                    <C>
ASSIGNOR
--------
 
 
 
 
 
 
 
 
                      ____________________   ____________________   ____________________
                      $                                             $
</TABLE>
<PAGE>
 
                                  SCHEDULE I
                                  ----------
                         TO ASSIGNMENT AND ACCEPTANCE
                            AMERISOURCE CORPORATION

            REVOLVING LOANS AND LETTERS OF CREDIT AFTER ASSIGNMENT


<TABLE>
<CAPTION>
                            Revolving              Revolving              Revolving
                            Committed             Commitment                Loans
                             Amount               Percentage             Outstanding
                      ---------------------  ---------------------  ---------------------
<S>                   <C>                    <C>                    <C>
ASSIGNOR
--------
 
 
 
 
ASSIGNEES
---------
 
 
 
                      ____________________   ____________________   ____________________
                      $                                             $
</TABLE>