HOULIHAN'S RESTAURANTS, INC.

                      AMENDED AND RESTATED
                        CREDIT AGREEMENT



          This  AMENDED AND RESTATED  CREDIT  AGREEMENT is dated as of April 15,
1997 and entered  into by and among  HOULIHAN'S  RESTAURANTS,  INC.,  a Delaware
corporation ("COMPANY"),  THE LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually  referred to herein as a "LENDER" and  collectively  as "LENDERS"),
DLJ CAPITAL FUNDING,  INC.  ("DLJ"),  as syndication agent hereunder for Lenders
(in such capacity,  "SYNDICATION  AGENT"), and BANQUE INDOSUEZ,  New York Branch
("BIS"), as administrative agent for Lenders (in such capacity,  "ADMINISTRATIVE
AGENT"),  and CREDIT LYONNAIS Chicago Branch, as documentation agent for Lenders
(in such capacity, "Documentation Agent").


                         R E C I T A L S

          WHEREAS,  Company (formerly known as  Gilbert/Robinson,  Inc.), Caisse
Nationale de Credit Agricole, the financial institutions  identified therein and
Caisse Nationale de Credit Agricole,  New York Branch,  as agent  (collectively,
the "EXISTING  LENDER") entered into a Credit Agreement dated as of December 28,
1992 (as amended to date, the "EXISTING CREDIT AGREEMENT");

          WHEREAS,  Existing  Lender  desires to assign  its  loans,  rights and
obligations  under the Existing Credit  Agreement and its rights and obligations
in and to all related  documents  (together with the Existing Credit  Agreement,
the "EXISTING LOAN DOCUMENTS") to Lenders;

          WHEREAS,  to facilitate such assignment  Existing Lender has agreed to
assign to all of its  loans,  rights and  obligations  under the  Existing  Loan
Documents  to DLJ  pursuant  to the  Master  Assignment  Agreement,  and DLJ has
agreed, subject to restructuring such loans, rights and obligations as set forth
herein, to assign to each Lender under this Credit Agreement such loans,  rights
and obligations;

          WHEREAS,   Lenders  desire  to  accept  such   assignment  and  extend
additional credit to Company, as set forth herein;

          WHEREAS, Company intends to (i) restructure  approximately $75,585,000
of senior  indebtedness  outstanding  under the Existing  Credit  Agreement (the
"REFINANCING");  (ii) within 120 days of the  Refinancing,  enter into sales and
leaseback  transactions  with  respect to the real  estate  underlying  up to 25
restaurant  locations  owned by  Company  on  terms  and  conditions  reasonably
satisfactory to Syndication Agent (the "SALE AND LEASEBACK  TRANSACTIONS");  and
(iii) use a portion of the proceeds of the Sale and Leaseback  Transactions  (A)
to provide funds for the  repurchase  (by means of a self tender or a short-form
merger) of all shares of the common stock of Houlihan's  Restaurant Group, Inc.,
a Delaware  corporation  that owns all the outstanding  capital stock of Company
("HOLDINGS"), not owned by any Affiliated Stockholder and options for such stock
that are "in the money," not later than November 15, 1997 for a repurchase price
of not in  excess  of  $8.00  per  share  or an  aggregate  repurchase  price of
$22,100,000 for all such shares and options (the  "REPURCHASE") or (B) for other
purposes as set forth herein;

          WHEREAS, Company desires that Lenders extend certain credit facilities
to  Company  to provide  funds,  in  addition  to cash of  Company,  for (i) the
Refinancing,  (ii) the payment of fees and expenses  incurred in connection with
the Recapitalization (as such term is defined herein) in an aggregate amount not
exceeding  $4,500,000 and (iii) the working capital and other general  corporate
purposes of Company and its Subsidiaries as described herein;

          WHEREAS,  Company desires to secure all of the  Obligations  hereunder
and under the other Loan  Documents  by granting  to  Administrative  Agent,  on
behalf of Lenders,  a first priority Lien on  substantially  all of its personal
property  and  certain of its real  property,  including  a pledge of all of the
capital stock of each of its Subsidiaries;

          WHEREAS,  each  Affiliated  Stockholder  has agreed to  guarantee on a
non-recourse basis the Obligations  hereunder and under the other Loan Documents
and to secure its  guaranty by granting to  Administrative  Agent,  on behalf of
Lenders,   a  first  priority  lien  on  shares  of  common  stock  of  Holdings
beneficially owned by such Affiliated Stockholder;

          WHEREAS,  Holdings and all of the  Subsidiaries of Company have agreed
to guarantee the Obligations hereunder and under the other Loan Documents and to
secure  their  guaranties  by granting  to  Administrative  Agent,  on behalf of
Lenders, a first priority Lien on substantially all of their respective personal
property and certain of their  respective  real property,  including a pledge of
all of the capital stock of each of their respective Subsidiaries; and

          WHEREAS, Company, Lenders, Syndication Agent, Administrative Agent and
Documentation Agent desire to amend and restate the Existing Credit Agreement as
follows:

          NOW,  THEREFORE,  in consideration of the premises and the agreements,
provisions and covenants herein contained,  Company, Lenders, Syndication Agent,
Administrative Agent and
Documentation Agent agree as follows:


SECTION 1.     DEFINITIONS

1.1  CERTAIN DEFINED TERMS.

          The following  terms used in this  Agreement  shall have the following
meanings:

          "ADDITIONAL  SALE  AND  LEASEBACK  TRANSACTIONS"  means  the  sale and
leaseback  of the real estate  acquired  after the Closing Date  underlying  any
restaurant,  which sale and  leaseback  occurs within the six month period after
the completion or acquisition of such restaurant.

          "ADJUSTED  EURODOLLAR RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum  obtained by dividing  (i) the offered  quotation  (rounded  upward to the
nearest 1/16 of one percent) to first class banks in the London interbank market
by BIS for U.S. dollar  deposits of amounts in same day funds  comparable to the
principal  amount of the  Eurodollar  Rate  Loan of BIS for  which the  Adjusted
Eurodollar Rate is then being determined (which principal amount shall be deemed
to be  $1,000,000  in the event BIS is not making,  converting  to or continuing
such a Eurodollar Rate Loan) with maturities  comparable to such Interest Period
as  of  approximately   10:00  a.m.  (New  York  time)  on  such  Interest  Rate
Determination  Date by (ii) a percentage  equal to 100% minus the stated maximum
rate  of  all  reserve   requirements   (including   any  marginal,   emergency,
supplemental,  special  or other  reserves)  applicable  on such  Interest  Rate
Determination  Date to any member bank of the Federal  Reserve System in respect
of  "Eurocurrency  liabilities"  as defined in  Regulation  D (or any  successor
category of liabilities under Regulation D).

          "ADMINISTRATIVE  AGENT" has the  meaning  assigned to that term in the
introduction  to this  Agreement  and also  means  and  includes  any  successor
Administrative Agent appointed pursuant to subsection 9.5A.

          "AFFECTED LENDER" has the meaning assigned to that
term in subsection 2.6C.

          "AFFILIATE", as applied to any Person, means any other Person directly
or indirectly  controlling,  controlled by, or under common  control with,  that
Person.  For  the  purposes  of  this  definition,  "control"  (including,  with
correlative meanings, the terms "controlling", "controlled by" and "under common
control  with"),  as applied to any Person,  means the  possession,  directly or
indirectly,  of the power to direct or cause the direction of the management and
policies of that Person,  whether through the ownership of voting  securities or
by contract or otherwise.

          "AFFILIATED STOCKHOLDER" means [Glazer family group:
to be defined].

          "AFFILIATED   STOCKHOLDER  PLEDGE  AGREEMENT"  means  each  Affiliated
Stockholder  Limited Guaranty and Pledge Agreement  executed and delivered by an
existing Affiliated Stockholder on the Closing Date or executed and delivered by
any additional Affiliated Stockholder from time to time thereafter in accordance
with  subsection  6.8,  in each case  substantially  in the form of Exhibit  XII
annexed  hereto,  as such  Affiliated  Stockholder  Limited  Guaranty and Pledge
Agreement may be amended,  supplemented or otherwise modified from time to time,
and  "AFFILIATED  STOCKHOLDER  PLEDGE  AGREEMENTS"  means  all  such  Affiliated
Stockholder Limited Guaranty and Pledge Agreements, collectively.

          "AGENTS" means, collectively, the Syndication Agent
and the Administrative Agent.

          "AGREEMENT" means this Credit Agreement dated as of April 15, 1997, as
it may be amended, supplemented or otherwise modified from time to time.

          "APD CERTIFICATE" means an Officer's  Certificate delivered during the
first 45 days of a Fiscal Quarter certifying the Consolidated Leverage Ratio for
the prior four consecutive Fiscal Quarters.

          "APPLICABLE  PRICING  DISCOUNT"  means,  during any  Pricing  Discount
Period, (i) if an APD Certificate is provided in two consecutive Fiscal Quarters
certifying  that the  Consolidated  Leverage  Ratio  is  equal  to or less  than
2.00:1.00,  .25% per  annum or (ii) if an APD  Certificate  is  provided  in two
consecutive Fiscal Quarters  certifying that the Consolidated  Leverage Ratio is
equal to or less than 1.75:1.00, .50% per annum.

          "ARRANGER" means Donaldson,  Lufkin & Jenrette Securities Corporation,
as arranger of the credit facilities described herein.

          "ASSET SALE" means the sale by Company or any of its  Subsidiaries  to
any Person other than Company or any of its wholly-owned Subsidiaries of (i) any
of the stock of any of Company's  Subsidiaries,  (ii)  substantially  all of the
assets  of  any  division  or  line  of  business  of  Company  or  any  of  its
Subsidiaries,  or (iii) any other assets  (whether  tangible or  intangible)  of
Company or any of its  Subsidiaries  (other than (a) obsolete  equipment sold in
the  ordinary  course  of  business,  (b) any  assets of  Company  or any of its
Subsidiaries  sold pursuant to the Sale and Leaseback  Transactions if such Sale
and Leaseback Transactions are completed on or prior to August 15, 1997, (c) any
assets of Company or any of its Subsidiaries sold pursuant to an Additional Sale
and Leaseback  Transaction the proceeds of which do not exceed $5,000,000 in any
Fiscal Year and (d) any such other  assets to the extent that (i) the  aggregate
value of such  assets  sold in any  single  transaction  or  related  series  of
transactions  is equal to $100,000 or less and (ii) the aggregate  value of such
assets sold in any Fiscal Year is equal to $200,000 or less).

          "ASSIGNED  MORTGAGES" means the Mortgages listed on Schedule 4.1D that
secure  obligations  under the Existing Credit Agreement and will be assigned as
of the Closing Date to Administrative Agent for the benefit of Lenders.

          "ASSIGNMENT  AGREEMENT" means an Assignment Agreement in substantially
the form of Exhibit XI annexed hereto.

          "BANKRUPTCY  CODE" means Title 11 of the United  States Code  entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.

          "BASE RATE"  means,  at any time,  the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.

          "BASE RATE LOANS" means Loans bearing  interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.

          "BIS" has the meaning assigned to that term in the
introduction to this Agreement.

          "BUSINESS  DAY"  means (i) for all  purposes  other than as covered by
clause (ii) below,  any day  excluding  Saturday,  Sunday and any day which is a
legal holiday under the laws of the State of [INSERT STATE WHERE  ADMINISTRATIVE
AGENT'S OFFICE IS LOCATED AT WHICH PAYMENTS AND  DISBURSEMENTS IN RESPECT OF THE
LOANS WILL BE MADE] or is a day on which  banking  institutions  located in such
state are authorized or required by law or other  governmental  action to close,
and (ii) with respect to all notices,  determinations,  fundings and payments in
connection with the Adjusted  Eurodollar Rate or any Eurodollar Rate Loans,  any
day that is a Business Day  described in clause (i) above and that is also a day
for trading by and  between  banks in Dollar  deposits  in the London  interbank
market.

          "CAPITAL  LEASE",  as  applied to any  Person,  means any lease of any
property  (whether  real,  personal or mixed) by that Person as lessee that,  in
conformity  with GAAP,  is accounted for as a capital lease on the balance sheet
of that Person.

          "CARRY OVER CAPITAL  EXPENDITURES  AMOUNT" means the amount determined
pursuant  to  subsection  7.8(i)  by  which  the  Maximum  Consolidated  Capital
Expenditures Amount will be
increased for the next Fiscal Year.

          "CASH" means money, currency or a credit balance in a
Deposit Account.

          "CASH  EQUIVALENTS"  means,  as at  any  date  of  determination,  (i)
marketable  securities (a) issued or directly and unconditionally  guaranteed as
to interest and principal by the United  States  Government or (b) issued by any
agency of the  United  States  the  obligations  of which are backed by the full
faith and credit of the United  States,  in each case  maturing  within one year
after such date; (ii) marketable direct  obligations  issued by any state of the
United States of America or any political  subdivision  of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having,  at the time of the  acquisition  thereof,  the highest  rating
obtainable  from  either  Standard  & Poor's  Ratings  Group  ("S&P") or Moody's
Investors  Service,  Inc.  ("MOODY'S");  (iii) commercial paper maturing no more
than one year from the date of creation  thereof and having,  at the time of the
acquisition  thereof,  a rating  of at least  A-1 from S&P or at least  P-1 from
Moody's;  (iv) certificates of deposit or bankers'  acceptances  maturing within
one year  after  such  date and  issued  or  accepted  by any  Lender  or by any
commercial  bank organized under the laws of the United States of America or any
state  thereof or the  District  of  Columbia  that (a) is at least  "adequately
capitalized"  (as  defined in the  regulations  of its primary  Federal  banking
regulator)  and (b) has Tier 1 capital (as defined in such  regulations)  of not
less than $100,000,000;  and (v) shares of any money market mutual fund that (a)
has at least 95% of its assets invested continuously in the types of investments
referred to in clauses  (i) and (ii) above,  (b) has net assets of not less than
$500,000,000,  and (c) has the  highest  rating  obtainable  from  either S&P or
Moody's.

          "CERTIFICATE RE NON-BANK STATUS" means a certificate  substantially in
the form of Exhibit XIII annexed hereto delivered by a Lender to  Administrative
Agent pursuant to subsection 2.7B(iii).

          "CLOSING DATE" means April 15, 1997.

          "COLLATERAL" means, collectively,  all of the real, personal and mixed
property  (including  capital  stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.

          "COLLATERAL DOCUMENTS" means the Company Copyright Security Agreement,
the Company  Pledge  Agreement,  the  Company  Security  Agreement,  the Company
Trademark  Security  Agreement,  the Holdings Pledge  Agreement,  the Subsidiary
Pledge Agreements,  the Subsidiary Security Agreements, the Subsidiary Trademark
Security Agreements, the Affiliated Stockholder Pledge Agreements, the Mortgages
and all other  instruments or documents  delivered by any Loan Party pursuant to
this  Agreement  or any of the  other  Loan  Documents  in  order  to  grant  to
Administrative  Agent,  on behalf of  Lenders,  a Lien on any real,  personal or
mixed property of that Loan Party as security for the Obligations.

          "COMMERCIAL  LETTER OF  CREDIT"  means any letter of credit or similar
instrument  issued for the purpose of providing the primary payment mechanism in
connection  with the purchase of any materials,  goods or services by Company or
any of its  Subsidiaries  in the ordinary  course of business of Company or such
Subsidiary.

          "COMMITMENTS" means the commitments of Lenders to
make Loans as set forth in subsection 2.1A.

          "COMPANY" has the meaning assigned to that term in
the introduction to this Agreement.

          "COMPANY  COPYRIGHT  SECURITY  AGREEMENT" means the Company  Copyright
Security  Agreement  executed  and  delivered  by Company on the  Closing  Date,
substantially  in the  form of  Exhibit  XIV  annexed  hereto,  as such  Company
Copyright  Security  Agreement  may  thereafter  be  amended,   supplemented  or
otherwise modified from time to time.

          "COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement executed
and  delivered  by Company on the  Closing  Date,  substantially  in the form of
Exhibit XV annexed  hereto,  as such Company Pledge  Agreement may thereafter be
amended, supplemented or otherwise modified from time to time.

          "COMPANY  SECURITY  AGREEMENT"  means the Company  Security  Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of Exhibit XVI annexed hereto, as such Company Security Agreement may thereafter
be amended, supplemented or otherwise modified from time to time.

          "COMPANY  TRADEMARK  SECURITY  AGREEMENT" means the Company  Trademark
Security  Agreement  executed  and  delivered  by Company on the  Closing  Date,
substantially  in the form of  Exhibit  XVII  annexed  hereto,  as such  Company
Trademark  Security  Agreement  may  thereafter  be  amended,   supplemented  or
otherwise modified from time to time.

          "COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Exhibit  VIII  annexed  hereto  delivered  to Agents  and  Lenders by Company
pursuant to subsection 6.1(iv).

          "CONFORMING  LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the  benefit of  Administrative
Agent (which writing has been delivered to Administrative  Agent), whether under
the terms of the  applicable  lease,  under the terms of a Landlord  Consent and
Estoppel, or otherwise,  to the matters described in the definition of "Landlord
Consent and Estoppel,"  which interest,  if a subleasehold  or  sub-subleasehold
interest,  is not subject to any contrary  restrictions  contained in a superior
lease or sublease.

          "CONSOLIDATED  EBITDA" means,  for any period,  the sum of the amounts
for such period of (i)  Consolidated  Net  Income,  (ii)  Consolidated  Interest
Expense,  (iii)  provisions for taxes based on income,  (iv) total  depreciation
expense, (v) total amortization  expense, and (vi) other non-cash items reducing
Consolidated  Net Income less other non-cash items  increasing  Consolidated Net
Income,  all of the foregoing as determined on a consolidated  basis for Company
and its Subsidiaries in conformity with GAAP.

          "CONSOLIDATED  CAPITAL EXPENDITURES" means, for any period, the sum of
(i)  the  aggregate  of  all  expenditures   (whether  paid  in  cash  or  other
consideration  or accrued as a liability and  including  that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and its
Subsidiaries)  by Company  and its  Subsidiaries  during that  period  that,  in
conformity  with  GAAP,  are  included  in  "additions  to  property,  plant  or
equipment" or comparable items reflected in the  consolidated  statement of cash
flows of Company  and its  Subsidiaries  plus (ii) to the extent not  covered by
clause (i) of this definition,  the aggregate of all expenditures by Company and
its  Subsidiaries  during that period to acquire (by purchase or otherwise)  the
business, property or fixed assets of any Person, or the stock or other evidence
of  beneficial  ownership of any Person that,  as a result of such  acquisition,
becomes a Subsidiary of Company minus (iii),  to the extent of any  expenditures
actually  made, the proceeds of any  Additional  Sale and Leaseback  Transaction
that relates to assets for which such  expenditures were made (such deduction to
be made in the period for which the  expenditure  was made);  provided  that any
deduction  in a Fiscal  Year  made  pursuant  to  clause  (iii)  may not  exceed
$5,000,000.

          "CONSOLIDATED  CURRENT ASSETS" means, as at any date of determination,
the total assets of Company and its  Subsidiaries on a consolidated  basis which
may properly be classified as current assets in conformity with GAAP,  excluding
Cash and Cash Equivalents.

          "CONSOLIDATED   CURRENT   LIABILITIES"   means,  as  at  any  date  of
determination,  the total  liabilities  of  Company  and its  Subsidiaries  on a
consolidated  basis which may properly be classified as current  liabilities  in
conformity with GAAP,  excluding the current portions of Funded Debt and Capital
Leases.

          "CONSOLIDATED  EXCESS CASH FLOW" means, for any period,  an amount (if
positive)  equal to (i) the sum,  without  duplication,  of the amounts for such
period of (a)  Consolidated  EBITDA  and (b) the  Consolidated  Working  Capital
Adjustment  minus (ii) the sum,  without  duplication,  of the  amounts for such
period of (a)  voluntary and scheduled  repayments  of  Consolidated  Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently  reduced in connection  with such  repayments),  (b)
Consolidated Capital Expenditures (without  duplication,  net of any proceeds of
any related  financings  with respect to such  expenditures),  (c)  Consolidated
Interest Expense, (d) the provision for current taxes based on income of Company
and its Subsidiaries and payable in cash with respect to such period and (e) the
Carry Over Capital Expenditures Amount.

          "CONSOLIDATED  FIXED CHARGES" means, for any period,  the sum (without
duplication)  of the  amounts  for  such  period  of (i)  Consolidated  Interest
Expense,  (ii)  provisions  for  taxes  based on  income,  and  (iii)  scheduled
principal  payments in respect of Consolidated  Total Debt, all of the foregoing
as  determined  on a  consolidated  basis for  Company and its  Subsidiaries  in
conformity with GAAP.

          "CONSOLIDATED  INTEREST EXPENSE" means, for any period, total interest
expense  (including  that portion  attributable  to Capital Leases in accordance
with  GAAP and  capitalized  interest)  of  Company  and its  Subsidiaries  on a
consolidated  basis with respect to all outstanding  Indebtedness of Company and
its  Subsidiaries,  including  all  commissions,  discounts  and other  fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under  Interest  Rate  Agreements,  but  excluding,  however,  any
amounts  referred to in  subsection  2.3 payable to Arranger and  Administrative
Agent on or before the Closing Date.

          "CONSOLIDATED LEVERAGE RATIO" means, for any Fiscal Quarter, the ratio
of (a) Consolidated  Total Debt as of the last day of such Fiscal Quarter to (b)
Consolidated  EBITDA for the consecutive four Fiscal Quarters ending on the last
day of such Fiscal Quarter.

          "CONSOLIDATED  NET INCOME" means,  for any period,  the net income (or
loss) of Company and its  Subsidiaries  on a consolidated  basis for such period
taken as a single accounting period determined in conformity with GAAP; provided
that there shall be excluded (i) the income (or loss) of any Person  (other than
a Subsidiary of Company) in which any other Person (other than Company or any of
its  Subsidiaries)  has a joint interest,  except to the extent of the amount of
dividends  or  other  distributions  actually  paid  to  Company  or  any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or  consolidated  with Company or any of its  Subsidiaries or that Person's
assets are acquired by Company or any of its  Subsidiaries,  (iii) the income of
any  Subsidiary  of  Company to the extent  that the  declaration  or payment of
dividends or similar  distributions  by that Subsidiary of that income is not at
the time  permitted by  operation of the terms of its charter or any  agreement,
instrument,  judgment,  decree, order, statute, rule or governmental  regulation
applicable to that Subsidiary,  (iv) any after-tax gains or losses  attributable
to Asset Sales or returned  surplus  assets of any Pension Plan, and (v) (to the
extent not  included in clauses (i)  through  (iv) above) any net  extraordinary
gains or net non-cash extraordinary losses.

          "CONSOLIDATED NET WORTH" means, as at any date of  determination,  the
sum of the capital stock and additional  paid-in capital plus retained  earnings
(or  minus   accumulated   deficits)  of  Company  and  its  Subsidiaries  on  a
consolidated basis determined in conformity with GAAP.

          "CONSOLIDATED  RENTAL PAYMENTS"  means, for any period,  the aggregate
amount of all  rents  paid or  payable  by  Company  and its  Subsidiaries  on a
consolidated  basis  during that period under all Capital  Leases and  Operating
Leases to which Company or any of its Subsidiaries is a party as lessee.

          "CONSOLIDATED TOTAL DEBT" means, as at any date of determination,  the
aggregate  stated  balance sheet amount of all  Indebtedness  of Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.

          "CONSOLIDATED WORKING CAPITAL" means, as at any date of determination,
the excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.

          "CONSOLIDATED  WORKING CAPITAL  ADJUSTMENT" means, for any period on a
consolidated  basis,  the  amount  (which  may be a  negative  number)  by which
Consolidated  Working  Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.

          "CONTINGENT OBLIGATION", as applied to any Person, means any direct or
indirect liability,  contingent or otherwise, of that Person (i) with respect to
any Indebtedness,  lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person  incurring the Contingent  Obligation is
to provide  assurance  to the obligee of such  obligation  of another  that such
obligation  of  another  will be  paid or  discharged,  or that  any  agreements
relating  thereto will be complied with, or that the holders of such  obligation
will be protected  (in whole or in part) against loss in respect  thereof,  (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements.  Contingent  Obligations shall include (a) the direct or
indirect guaranty,  endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making,  discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by any
other party or parties to an agreement, and (c) any liability of such Person for
the obligation of another through any agreement (contingent or otherwise) (X) to
purchase,  repurchase  or  otherwise  acquire  such  obligation  or any security
therefor,  or to provide  funds for the payment or discharge of such  obligation
(whether in the form of loans, advances, stock purchases,  capital contributions
or otherwise)  or (Y) to maintain the solvency or any balance sheet item,  level
of income or  financial  condition  of another if, in the case of any  agreement
described under  subclauses (X) or (Y) of this sentence,  the primary purpose or
intent  thereof is as described  in the  preceding  sentence.  The amount of any
Contingent  Obligation  shall  be  equal  to the  amount  of the  obligation  so
guaranteed  or  otherwise  supported  or,  if less,  the  amount  to which  such
Contingent Obligation is specifically limited.

          "CONTRACTUAL  OBLIGATION",   as  applied  to  any  Person,  means  any
provision  of any Security  issued by that Person or of any material  indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.

          "CURRENCY  AGREEMENT"  means any foreign exchange  contract,  currency
swap  agreement,  futures  contract,  option  contract,  synthetic  cap or other
similar  agreement or arrangement to which Company or any of its Subsidiaries is
a party.

          "DEPOSIT  ACCOUNT"  means a demand,  time,  savings,  passbook or like
account  with a  bank,  savings  and  loan  association,  credit  union  or like
organization,  other than an account  evidenced by a negotiable  certificate  of
deposit.

          "DLJ" has the meaning assigned to that term in the
introduction to this Agreement.

          "DOLLARS" and the sign "$" mean the lawful money of
the United States of America.

          "ELIGIBLE  ASSIGNEE"  means (A) (i) a commercial  bank organized under
the laws of the  United  States or any state  thereof;  (ii) a savings  and loan
association or savings bank organized under the laws of the United States or any
state thereof;  (iii) a commercial  bank  organized  under the laws of any other
country  or a  political  subdivision  thereof;  provided  that (x) such bank is
acting  through a branch or agency located in the United States or (y) such bank
is organized  under the laws of a country  that is a member of the  Organization
for Economic  Cooperation  and  Development  or a political  subdivision of such
country; and (iv) any other entity which is an "accredited investor" (as defined
in Regulation D under the Securities  Act) which extends credit or buys loans as
one of its  businesses  including  insurance  companies,  mutual funds and lease
financing  companies;  and  (B) any  Lender  and any  Affiliate  of any  Lender;
provided that no Affiliate of Company shall be an Eligible Assignee.

          "EMPLOYEE  BENEFIT PLAN" means any "employee  benefit plan" as defined
in  Section  3(3) of  ERISA  which is or was  maintained  or  contributed  to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.

          "ENVIRONMENTAL  CLAIM"  means  any  investigation,  notice,  notice of
violation,  claim, action, suit,  proceeding,  demand,  abatement order or other
order or directive (conditional or otherwise),  by any governmental authority or
any other Person,  arising (i) pursuant to or in  connection  with any actual or
alleged  violation  of any  Environmental  Law,  (ii)  in  connection  with  any
Hazardous Materials or any actual or alleged Hazardous  Materials  Activity,  or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.

          "ENVIRONMENTAL  LAWS"  means any and all  current or future  statutes,
ordinances,   orders,  rules,   regulations,   guidance  documents,   judgments,
Governmental   Authorizations,   or  any  other   requirements  of  governmental
authorities relating to (i) environmental  matters,  including those relating to
any  Hazardous   Materials   Activity,   (ii)  the  generation,   use,  storage,
transportation or disposal of Hazardous Materials,  or (iii) occupational safety
and health,  industrial  hygiene,  land use or the protection of human, plant or
animal  health or  welfare,  in any manner  applicable  to Company or any of its
Subsidiaries  or  any  Facility,   including  the  Comprehensive   Environmental
Response,  Compensation, and Liability Act (42 U.S.C. Section 9601 et seq.), the
Hazardous  Materials  Transportation  Act (49 U.S.C.  Section 1801 et seq.), the
Resource Conservation and Recovery Act (42 U.S.C. Section
 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.  Section 1251
et  seq.),  the  Clean  Air Act (42  U.S.C.  Section  7401 et  seq.),  the Toxic
Substances   Control  Act  (15  U.S.C.   Section  2601  et  seq.),  the  Federal
Insecticide,  Fungicide and Rodenticide Act (7 U.S.C.  Section 136 et seq.), the
Occupational  Safety and Health Act (29  U.S.C.  Section  651 et seq.),  the Oil
Pollution  Act (33 U.S.C.  Section 2701 et seq) and the  Emergency  Planning and
Community  Right-to-Know Act (42 U.S.C.  Section 11001 et seq.), each as amended
or  supplemented,  any  analogous  present or future state or local  statutes or
laws, and any regulations promulgated pursuant to any of the foregoing.

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.

          "ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled  group of  corporations  within the meaning of
Section  414(b) of the  Internal  Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated)  which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member;  and (iii)
any member of an affiliated  service group within the meaning of Section  414(m)
or (o) of the  Internal  Revenue  Code of which  that  Person,  any  corporation
described in clause (i) above or any trade or business  described in clause (ii)
above  is a  member.  Any  former  ERISA  Affiliate  of  Company  or  any of its
Subsidiaries  shall  continue to be considered an ERISA  Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such  entity  was an ERISA  Affiliate  of Company  or such  Subsidiary  and with
respect  to  liabilities  arising  after such  period for which  Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.

          "ERISA  EVENT" means (i) a  "reportable  event"  within the meaning of
Section 4043 of ERISA and the regulations  issued thereunder with respect to any
Pension Plan  (excluding  those for which the provision for 30-day notice to the
PBGC has been  waived  by  regulation);  (ii) the  failure  to meet the  minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan  (whether or not waived in  accordance  with Section  412(d) of the
Internal  Revenue  Code)  or the  failure  to make by its  due  date a  required
installment  under Section  412(m) of the Internal  Revenue Code with respect to
any  Pension  Plan  or the  failure  to  make  any  required  contribution  to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section  4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress  termination  described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company,  any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more  contributing  sponsors or the
termination of any such Pension Plan resulting in liability  pursuant to Section
4063  or 4064 of  ERISA;  (v) the  institution  by the  PBGC of  proceedings  to
terminate any Pension Plan,  or the  occurrence of any event or condition  which
might constitute  grounds under ERISA for the termination of, or the appointment
of a trustee to administer,  any Pension Plan;  (vi) the imposition of liability
on Company,  any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section  4062(e) or 4069 of ERISA or by reason of the application of
Section  4212(c)  of  ERISA;  (vii)  the  withdrawal  of  Company,  any  of  its
Subsidiaries  or any of their  respective  ERISA  Affiliates  in a  complete  or
partial  withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any  Multiemployer  Plan if there is any potential  liability  therefor,  or the
receipt by Company,  any of its  Subsidiaries or any of their  respective  ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency  pursuant  to  Section  4241 or 4245 of ERISA,  or that it intends to
terminate or has  terminated  under Section  4041A or 4042 of ERISA;  (viii) the
occurrence  of an act or  omission  which could give rise to the  imposition  on
Company,  any of its Subsidiaries or any of their respective ERISA Affiliates of
fines,  penalties,  taxes or related  charges  under  Chapter 43 of the Internal
Revenue Code or under Section 409,  Section 502(c),  (i) or (l), or Section 4071
of ERISA in  respect of any  Employee  Benefit  Plan;  (ix) the  assertion  of a
material  claim (other than routine  claims for  benefits)  against any Employee
Benefit Plan other than a Multiemployer  Plan or the assets thereof,  or against
Company,  any of its Subsidiaries or any of their respective ERISA Affiliates in
connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the  failure  of any  Pension  Plan (or any other  Employee
Benefit  Plan  intended to be  qualified  under  Section  401(a) of the Internal
Revenue Code) to qualify under Section  401(a) of the Internal  Revenue Code, or
the  failure  of any trust  forming  part of any  Pension  Plan to  qualify  for
exemption from taxation  under Section  501(a) of the Internal  Revenue Code; or
(xi) the  imposition of a Lien  pursuant to Section  401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

          "ESCROW ACCOUNT" means the account established
pursuant to subsection 6.11.

          "EURODOLLAR   RATE  LOANS"  means  Loans  bearing  interest  at  rates
determined  by  reference  to  the  Adjusted  Eurodollar  Rate  as  provided  in
subsection 2.2A.

          "EVENT OF DEFAULT" means each of the events set forth
in Section 8.

          "EXCHANGE ACT" means the  Securities  Exchange Act of 1934, as amended
from time to time, and any successor statute.

          "EXISTING CREDIT AGREEMENT" has the meaning set forth
in the recitals hereto.

          "EXISTING LENDER" has the meaning set forth in the
recitals hereto.

          "FACILITIES" means any and all real property (including all buildings,
fixtures or other  improvements  located  thereon) now,  hereafter or heretofore
owned, leased,  operated or used by Company or any of its Subsidiaries or any of
their respective predecessors or Affiliates.

          "FEDERAL FUNDS  EFFECTIVE RATE" means,  for any period,  a fluctuating
interest  rate equal for each day during such period to the weighted  average of
the rates on overnight  Federal funds  transactions  with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next  preceding  Business Day) by the
Federal  Reserve Bank of New York,  or, if such rate is not so published for any
day which is a Business Day, the average of the  quotations for such day on such
transactions  received by Administrative  Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.

          "FINANCIAL PLAN" has the meaning assigned to that
term in subsection 6.1(xiii).

          "FIRST  PRIORITY"  means,  with  respect to any Lien  purported  to be
created in any  Collateral  pursuant to any Collateral  Document,  that (i) such
Lien has priority over any other Lien on such  Collateral  (other than Permitted
Encumbrances and Liens permitted pursuant to subsection 7.2A) and (ii) such Lien
is the only Lien (other than Permitted Encumbrances and Liens permitted pursuant
to subsection 7.2A) to which such Collateral is subject.

          "FISCAL QUARTER" means a fiscal quarter of any Fiscal
Year.

          "FISCAL  YEAR" means the fiscal  year of Company and its  Subsidiaries
ending on the last Monday of December of each calendar year.

          "FLOOD HAZARD PROPERTY" means a Mortgaged  Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.

          "FUNDED DEBT",  as applied to any Person,  means all  Indebtedness  of
that Person  (including any current  portions  thereof) which by its terms or by
the terms of any instrument or agreement  relating thereto matures more than one
year from,  or is directly  renewable or extendable at the option of that Person
to a date more than one year from  (including  an option of that Person  under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit  over a  period  of one  year or more  from),  the  date of the  creation
thereof.

          "FUNDING AND PAYMENT  OFFICE"  means (i) the office of  Administrative
Agent and Swing Line Lender  located at  _______________________________________
or (ii) such other office of  Administrative  Agent and Swing Line Lender as may
from time to time hereafter be designated as such in a written notice  delivered
by Administrative Agent and Swing Line Lender to Company and each Lender.

          "FUNDING DATE" means the date of the funding of a
Loan.

          "GAAP" means,  subject to the limitations on the  application  thereof
set forth in subsection 1.2, generally accepted accounting  principles set forth
in  opinions  and  pronouncements  of the  Accounting  Principles  Board  of the
American   Institute  of  Certified   Public   Accountants  and  statements  and
pronouncements  of the  Financial  Accounting  Standards  Board or in such other
statements by such other entity as may be approved by a  significant  segment of
the  accounting  profession,  in each  case as the  same are  applicable  to the
circumstances as of the date of determination.

          "GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive,  consent order or consent decree of or from any federal,  state
or local governmental authority, agency or court.

          "GUARANTIES" means the Holdings Guaranty, the
Subsidiary Guaranty and the Affiliated Stockholder Pledge
Agreement.

          "HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the  definition  of  "hazardous  substances",
"hazardous wastes", "hazardous materials",  "extremely hazardous waste", acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant",  "contaminant",  "restricted  hazardous waste",  "infectious waste",
"toxic substances",  or any other term or expression intended to define, list or
classify  substances  by reason of properties  harmful to health,  safety or the
indoor  or  outdoor   environment   (including   harmful   properties   such  as
ignitability, corrosivity, reactivity,  carcinogenicity,  toxicity, reproductive
toxicity,  "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable  Environmental Laws); (ii) any oil, petroleum,  petroleum fraction or
petroleum  derived  substance;  (iii) any drilling  fluids,  produced waters and
other wastes associated with the exploration, development or production of crude
oil,  natural gas or  geothermal  resources;  (iv) any  flammable  substances or
explosives;   (v)  any  radioactive  materials;   (vi)  any  asbestos-containing
materials; (vii) urea formaldehyde foam insulation;  (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance,  exposure to
which is prohibited, limited or regulated by any governmental authority or which
may or could pose a hazard to the health and safety of the owners,  occupants or
any  Persons  in the  vicinity  of any  Facility  or to the  indoor  or  outdoor
environment.

          "HAZARDOUS  MATERIALS ACTIVITY" means any past,  current,  proposed or
threatened  activity,  event or occurrence  involving  any Hazardous  Materials,
including  the  use,  manufacture,   possession,   storage,  holding,  presence,
existence,   location,  Release,   threatened  Release,  discharge,   placement,
generation,  transportation,  processing,  construction,  treatment,  abatement,
removal,  remediation,  disposal,  disposition  or  handling  of  any  Hazardous
Materials,  and any corrective  action or response action with respect to any of
the foregoing.

          "HEDGE  AGREEMENT"  means an  Interest  Rate  Agreement  or a Currency
Agreement  designed to hedge against  fluctuations in interest rates or currency
values, respectively.

          "HOLDINGS" has the meaning assigned to that term in
the recitals hereto.

          "HOLDINGS GUARANTY" means the Holdings Guaranty executed and delivered
by Holdings  on the  Closing  Date,  substantially  in the form of Exhibit  XXII
annexed  hereto,  as such  Holdings  Guaranty  may be amended,  supplemented  or
otherwise modified from time to time.

          "HOLDINGS PLEDGE  AGREEMENT"  means the Pledge Agreement  executed and
delivered by Holdings on the Closing Date,  substantially in the form of Exhibit
XXI  annexed  hereto,   as  such  Holdings  Pledge  Agreement  may  be  amended,
supplemented or otherwise modified from time to time.

          "INDEBTEDNESS",  as applied to any Person,  means (i) all indebtedness
for borrowed  money,  (ii) that portion of  obligations  with respect to Capital
Leases  that is  properly  classified  as a  liability  on a  balance  sheet  in
conformity  with GAAP,  (iii)  notes  payable and drafts  accepted  representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation  owed for all or any part of the deferred  purchase price of
property or services  (excluding  any such  obligations  incurred  under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the  obligation  in  respect  thereof or (b)  evidenced  by a note or similar
written instrument, and (v) all indebtedness secured by any Lien on any property
or asset owned or held by that  Person  regardless  of whether the  indebtedness
secured  thereby shall have been assumed by that Person or is nonrecourse to the
credit of that Person.  Obligations  under Interest Rate Agreements and Currency
Agreements   constitute  (X)  in  the  case  of  Hedge  Agreements,   Contingent
Obligations,  and (Y) in all  other  cases,  Investments,  and in  neither  case
constitute Indebtedness.

          "INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.

          "INTELLECTUAL  PROPERTY"  means all patents,  trademarks,  tradenames,
copyrights,  technology,  know-how and  processes  used in or necessary  for the
conduct of the business of Company and its  Subsidiaries as currently  conducted
that are  material  to the  condition  (financial  or  otherwise),  business  or
operations of Company and its Subsidiaries, taken as a whole.

          "INTEREST  PAYMENT DATE" means (i) with respect to any Base Rate Loan,
the  last  day of each  March,  June,  September  and  December  of  each  year,
commencing on the first such date to occur after the Closing Date, and (ii) with
respect  to any  Eurodollar  Rate  Loan,  the last day of each  Interest  Period
applicable to such Loan;  provided  that in the case of each Interest  Period of
longer than three months  "Interest  Payment  Date" shall also include each date
that is three months, or an integral multiple thereof, after the commencement of
such Interest Period.

          "INTEREST PERIOD" has the meaning assigned to that
term in subsection 2.2B.

          "INTEREST  RATE  AGREEMENT"  means any interest  rate swap  agreement,
interest rate cap  agreement,  interest  rate collar  agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.

          "INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.

          "INTERNAL  REVENUE  CODE" means the Internal  Revenue Code of 1986, as
amended to the date hereof and from time to time  hereafter,  and any  successor
statute.

          "INVENTORY"  means,  with  respect  to any  Person  as of any  date of
determination, all goods, merchandise and other personal property which are then
held by such  Person  for sale or lease,  including  raw  materials  and work in
process.

          "INVESTMENT"  means  (i) any  direct  or  indirect  purchase  or other
acquisition  by  Company  or any  of its  Subsidiaries  of,  or of a  beneficial
interest in, any  Securities of any other Person  (including  any  Subsidiary of
Company), (ii) any direct or indirect redemption,  retirement, purchase or other
acquisition  for value,  by any Subsidiary of Company from any Person other than
Company or any of its Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving,   entertainment  and  travel  expenses,  drawing  accounts  and  similar
expenditures  in the ordinary  course of business)  or capital  contribution  by
Company  or  any  of  its  Subsidiaries  to  any  other  Person  (other  than  a
wholly-owned  Subsidiary of Company),  including all  indebtedness  and accounts
receivable  from that other Person that are not current  assets or did not arise
from sales to that other  Person in the  ordinary  course of  business,  or (iv)
Interest  Rate  Agreements  or  Currency   Agreements  not  constituting   Hedge
Agreements.  The amount of any  Investment  shall be the  original  cost of such
Investment plus the cost of all additions  thereto,  without any adjustments for
increases or decreases in value,  or write-ups,  write-downs or write-offs  with
respect to such Investment.

          "IP COLLATERAL" means, collectively, the Collateral
under the Company Copyright Security Agreement, the Company
Trademark Security Agreement and the Subsidiary Trademark
Security Agreements.

          "ISSUING  LENDER"  means,  with  respect to any Letter of Credit,  the
Lender which  agrees or is  otherwise  obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(ii).

          "JOINT  VENTURE" means a joint  venture,  partnership or other similar
arrangement,  whether in corporate,  partnership  or other legal form;  provided
that in no event shall any  corporate  Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.

          "LANDLORD  CONSENT AND ESTOPPEL" means,  with respect to any Leasehold
Property,  a letter,  certificate or other instrument in writing from the lessor
under the related lease,  satisfactory in form and substance to Agents, pursuant
to which such lessor agrees,  for the benefit of Administrative  Agent, (i) that
without any further  consent of such lessor or any further action on the part of
the Loan Party holding such Leasehold  Property,  such Leasehold Property may be
encumbered  pursuant to a Mortgage  and may be assigned  to the  purchaser  at a
foreclosure  sale or in a transfer  in lieu of such a sale (and to a  subsequent
third party  assignee if any Agent,  any Lender,  or an  Affiliate  of either so
acquires  such  Leasehold  Property),  (ii) that such lessor shall not terminate
such lease as a result of a default by such Loan Party thereunder  without first
giving  Agents  notice of such default and at least 60 days (or, if such default
cannot  reasonably be cured by Agents within such period,  such longer period as
may reasonably be required) to cure such default, (iii) to the matters contained
in a Collateral  Access  Agreement,  and (iv) to such other matters  relating to
such Leasehold Property as Agents may reasonably request.

          "LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any lease of real property.

          "LENDER" and "LENDERS"  means the persons  identified as "Lenders" and
listed on the signature pages of this Agreement,  together with their successors
and permitted  assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires.

          "LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial  Letters of
Credit and Standby  Letters of Credit issued or to be issued by Issuing  Lenders
for the account of
Company pursuant to subsection 3.1.

          "LETTER OF CREDIT USAGE" means, as at any date of  determination,  the
sum of (i) the maximum  aggregate  amount which is or at any time thereafter may
become  available for drawing under all Letters of Credit then  outstanding plus
(ii) the aggregate  amount of all drawings  under  Letters of Credit  honored by
Issuing  Lenders and not theretofore  reimbursed by Company  (including any such
reimbursement  out of the proceeds of  Revolving  Loans  pursuant to  subsection
3.3B).

          "LIEN"  means  any  lien,  mortgage,  pledge,   assignment,   security
interest,  charge or encumbrance of any kind (including any conditional  sale or
other  title  retention  agreement,  any lease in the  nature  thereof,  and any
agreement  to give  any  security  interest)  and any  option,  trust  or  other
preferential arrangement having the practical effect of any of the foregoing.

          "LOAN"  or  "LOANS"  means one or more of the  Tranche  A Term  Loans,
Tranche B Term Loans, Revolving Loans or Swing
Line Loans or any combination thereof.

          "LOAN  DOCUMENTS"  means this  Agreement,  the Notes,  the  Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or  certificates  executed by Company in favor of an Issuing Lender relating to,
the Letters of Credit), the Guaranties and the Collateral Documents.

          "LOAN  PARTY"  means each of  Company,  the  Affiliated  Stockholders,
Holdings and any of Company's  Subsidiaries  from time to time  executing a Loan
Document, and "LOAN PARTIES" means all such Persons, collectively.

          "MARGIN  STOCK" has the meaning  assigned to that term in Regulation U
of the Board of Governors of the Federal  Reserve  System as in effect from time
to time.

          "MASTER  ASSIGNMENT  AGREEMENT"  means that certain Master  Assignment
Agreement,  dated the date hereof,  among Company,  the Existing  Lender and DLJ
pursuant to which the Existing Lender assigns its loans,  rights and obligations
under the Existing Loan Documents to DLJ and DLJ purchases from Existing Lender,
such oans, rights and obligations.

          "MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations,  properties, assets, condition (financial or otherwise) or
prospects of (A) Holdings or (B) Company and its  Subsidiaries  taken as a whole
or (ii) the impairment of the ability of any Loan Party to perform, or of Agents
or Lenders to enforce, the Obligations.

          "MATERIAL  CONTRACT" means any contract or other  arrangement to which
Company or any of its  Subsidiaries  is a party (other than the Loan  Documents)
for which breach, nonperformance,  cancellation or failure to renew could have a
Material Adverse Effect.

          "MATERIAL  LEASEHOLD  PROPERTY" means a Leasehold Property  reasonably
determined  by Agents  to be of  material  value as  Collateral  or of  material
importance to the operations of Company or any of its Subsidiaries.

          "MAXIMUM CONSOLIDATED CAPITAL EXPENDITURES AMOUNT"
has the meaning set forth in subsection 7.8.

          "MORTGAGE" means (i) a security  instrument  (whether  designated as a
deed of trust or a mortgage or by any similar  title)  executed and delivered by
any Loan Party,  substantially in the form of Exhibit XXIII annexed hereto or in
such other form as may be approved by Agents in their sole  discretion,  in each
case with such changes thereto as may be recommended by  Administrative  Agent's
local counsel based on local laws or customary  local  mortgage or deed of trust
practices,  or  (ii) at the  option  of  Agents,  in the  case of an  Additional
Mortgaged  Property (as defined in subsection  6.9), an amendment to an existing
Mortgage,  in form  satisfactory  to Agents,  adding such  Additional  Mortgaged
Property to the Real Property Assets  encumbered by such existing  Mortgage,  in
either  case  as  such   security   instrument  or  amendment  may  be  amended,
supplemented or otherwise modified from time to time. "MORTGAGES" means all such
instruments,  including the Assigned Mortgages and any Additional  Mortgages (as
defined in subsection 6.9), collectively.

          "MORTGAGED  PROPERTY"  means a Closing  Date  Mortgaged  Property  (as
defined in subsection 4.1D) or an Additional  Mortgaged  Property (as defined in
subsection 6.9).

          "MULTIEMPLOYER  PLAN"  means  any  Employee  Benefit  Plan  which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.

          "NET ASSET SALE PROCEEDS" means,  with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by  monetization  of, a note  receivable or  otherwise,  but only as and when so
received)  received  from such Asset  Sale,  net of any bona fide  direct  costs
incurred  in  connection  with such  Asset  Sale,  including  (i)  income  taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding  principal amount of, premium or penalty, if
any, and interest on any Indebtedness  (other than the Loans) that is secured by
a Lien on the stock or  assets in  question  and that is  required  to be repaid
under the terms thereof as a result of such Asset Sale.

          "NET  INSURANCE/CONDEMNATION  PROCEEDS"  means  any Cash  payments  or
proceeds  received by Company or any of its  Subsidiaries (i) under any business
interruption  or  casualty  insurance  policy  in  respect  of  a  covered  loss
thereunder  or (ii) as a result of the taking of any assets of Company or any of
its  Subsidiaries  by any  Person  pursuant  to the  power  of  eminent  domain,
condemnation  or  otherwise,  or  pursuant  to a sale of any  such  assets  to a
purchaser with such power under threat of such a taking, in each case net of any
actual  and  reasonable  documented  costs  incurred  by  Company  or any of its
Subsidiaries  in connection  with the  adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.

          "NOTES" means one or more of the Tranche A Term Notes,  Tranche B Term
Notes, Revolving Notes or Swing Line
Note or any combination thereof.

          "NOTICE  OF  BORROWING"  means a notice  substantially  in the form of
Exhibit I annexed hereto delivered by Company to  Administrative  Agent pursuant
to subsection 2.1B with respect to a proposed borrowing.

          "NOTICE OF  CONVERSION/CONTINUATION"  means a notice  substantially in
the form of Exhibit II annexed  hereto  delivered  by Company to  Administrative
Agent  pursuant to  subsection  2.2D with  respect to a proposed  conversion  or
continuation  of the  applicable  basis for  determining  the interest rate with
respect to the Loans specified therein.

          "NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice  substantially
in the form of Exhibit III annexed hereto delivered by Company to Administrative
Agent pursuant to subsection  3.1B(i) with respect to the proposed issuance of a
Letter of Credit.

          "OBLIGATIONS" means all obligations of every nature of each Loan Party
from time to time owed to  Arranger,  Agents,  Lenders  or any of them under the
Loan Documents, whether for principal, interest,  reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.

          "OFFICER'S  CERTIFICATE"  means,  as  applied  to any  corporation,  a
certificate executed on behalf of such corporation by its president or its chief
financial  officer  (or if  there  is no  chief  financial  officer,  its  chief
accounting officer);  provided that every Officer's  Certificate with respect to
the compliance  with a condition  precedent to the making of any Loans hereunder
shall include (i) a statement that the officer or officers making or giving such
Officer's  Certificate  have read such  condition and any  definitions  or other
provisions contained in this Agreement relating thereto,  (ii) a statement that,
in the  opinion of the  signers,  they have made or have  caused to be made such
examination  or  investigation  as is  necessary  to enable  them to  express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether,  in the opinion of the signers,  such condition
has been complied with.

          "OPERATING  LEASE"  means,  as  applied  to  any  Person,   any  lease
(including  leases  that may be  terminated  by the  lessee  at any time) of any
property  (whether  real,  personal  or mixed)  that is not a  Capital  Lease in
accordance  with GAAP other than any such lease  under  which that Person is the
lessor.

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

          "PENSION  PLAN"  means  any  Employee   Benefit  Plan,  other  than  a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.

          "PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed  pursuant to Section  401(a)(29) or 412(n) of the Internal
Revenue  Code or by ERISA,  any such Lien  relating to or imposed in  connection
with any  Environmental  Claim,  and any such Lien  expressly  prohibited by any
applicable terms of any of the Collateral Documents):

          (i)  Liens for taxes, assessments or governmental
     charges or claims the payment of which is not, at the
     time, required by subsection 6.3;

          (ii) statutory Liens of landlords, statutory Liens of banks and rights
     of  set-off,   statutory  Liens  of  carriers,   warehousemen,   mechanics,
     repairmen, workmen and materialmen, and other Liens imposed by law, in each
     case  incurred in the  ordinary  course of business (a) for amounts not yet
     overdue or (b) for  amounts  that are  overdue and that (in the case of any
     such amounts  overdue for a period in excess of 5 days) are being contested
     in good faith by appropriate  proceedings,  so long as (1) such reserves or
     other  appropriate  provisions,  if any, as shall be required by GAAP shall
     have been  made for any such  contested  amounts,  and (2) in the case of a
     Lien  with  respect  to  any  portion  of  the  Collateral,   such  contest
     proceedings  conclusively  operate  to stay the sale of any  portion of the
     Collateral on account of such Lien;

          (iii)  Liens  incurred  or  deposits  made in the  ordinary  course of
     business in connection with workers'  compensation,  unemployment insurance
     and  other  types of  social  security,  or to secure  the  performance  of
     tenders,  statutory  obligations,  surety and appeal bonds,  bids,  leases,
     government  contracts,  trade  contracts,  performance and  return-of-money
     bonds and other  similar  obligations  (exclusive  of  obligations  for the
     payment of  borrowed  money),  so long as no  foreclosure,  sale or similar
     proceedings  have  been  commenced  with  respect  to  any  portion  of the
     Collateral on account thereof;

          (iv)      any attachment or judgment Lien not consti-
     tuting an Event of Default under subsection 8.8;

          (v) leases or subleases  granted to third parties in  accordance  with
     any applicable terms of the Collateral Documents and not interfering in any
     material  respect with the  ordinary  conduct of the business of Company or
     any of its Subsidiaries or resulting in a material  diminution in the value
     of any Collateral as security for the Obligations;

          (vi) easements, rights-of-way,  restrictions, encroachments, and other
     minor  defects or  irregularities  in title,  in each case which do not and
     will not interfere in any material respect with the ordinary conduct of the
     business  of  Company  or any of its  Subsidiaries  or result in a material
     diminution in the value of any Collateral as security for the Obligations;

          (vii) any (a)  interest  or title of a lessor or  sublessor  under any
     lease permitted by subsection 7.9, (b) restriction or encumbrance  that the
     interest  or title of such  lessor or  sublessor  may be subject to, or (c)
     subordination  of the interest of the lessee or sublessee  under such lease
     to any restriction or encumbrance  referred to in the preceding clause (b),
     so  long as the  holder  of  such  restriction  or  encumbrance  agrees  to
     recognize the rights of such lessee or sublessee under such lease;

          (viii) Liens  arising from filing UCC  financing  statements  relating
     solely to leases permitted by this Agreement;

          (ix)      Liens in favor of customs and revenue
     authorities arising as a matter of law to secure payment
     of customs duties in connection with the importation of
     goods;

          (x)  any zoning or similar law or right reserved to
     or vested in any governmental office or agency to control
     or regulate the use of any real property;

          (xi) Liens securing  obligations (other than obligations  representing
     Indebtedness  for borrowed money) under operating,  reciprocal  easement or
     similar  agreements  entered  into in the  ordinary  course of  business of
     Company and its Subsidiaries; and

          (xii) licenses of patents,  trademarks and other intellectual property
     rights granted by Company or any of its Subsidiaries in the ordinary course
     of business and not  interfering in any material  respect with the ordinary
     conduct of the business of Company or such Subsidiary.

          "PERSON" means and includes  natural  persons,  corporations,  limited
partnerships,   general  partnerships,   limited  liability  companies,  limited
liability  partnerships,  joint stock companies,  Joint Ventures,  associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations,  whether or not legal entities, and governments (whether federal,
state or local,  domestic  or  foreign,  and  including  political  subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.

          "PLEDGED COLLATERAL" means, collectively,  the "Pledged Collateral" as
defined in the Company Pledge  Agreement,  the Holdings  Pledge  Agreement,  the
Subsidiary Pledge Agreements and the Affiliated Stockholder Pledge Agreements.

          "POTENTIAL  EVENT OF DEFAULT"  means a condition or event that,  after
notice or lapse of time or both, would constitute an Event of Default.

          "PRICING  DISCOUNT PERIOD" means any period commencing on the 45th day
of a Fiscal Quarter that follows two consecutive  Fiscal Quarters as to which an
APD  Certificate has been delivered and ending on the 45th day following the end
of such Fiscal  Quarter;  provided that no such period may commence  until after
the first anniversary of the Closing Date.

          "PRIME  RATE" means the rate that BIS  announces  from time to time as
its prime  lending  rate,  as in effect  from time to time.  The Prime Rate is a
reference  rate and does not  necessarily  represent  the  lowest  or best  rate
actually  charged to any customer.  BIS or any other Lender may make  commercial
loans or other loans at rates of interest at, above or below the Prime Rate.

          "PRO RATA SHARE" means (i) with respect to all payments,  computations
and other matters  relating to the Tranche A Term Loan Commitment or the Tranche
A Term Loan of any Lender, the percentage obtained by dividing (x) the Tranche A
Term  Loan  Exposure  of that  Lender by (y) the  aggregate  Tranche A Term Loan
Exposure of all Lenders,  (ii) with respect to all  payments,  computations  and
other  matters  relating to the Tranche B Term Loan  Commitment or the Tranche B
Term Loan of any Lender,  the percentage  obtained by dividing (x) the Tranche B
Term  Loan  Exposure  of that  Lender by (y) the  aggregate  Tranche B Term Loan
Exposure of all Lenders,  (iii) with respect to all payments,  computations  and
other matters  relating to the Revolving Loan  Commitment or the Revolving Loans
of any  Lender  or any  Letters  of  Credit  issued  or  participations  therein
purchased by any Lender or any  participations in any Swing Line Loans purchased
by any  Lender,  the  percentage  obtained by dividing  (x) the  Revolving  Loan
Exposure  of that Lender by (y) the  aggregate  Revolving  Loan  Exposure of all
Lenders,  and (iv) for all other  purposes  with  respect  to each  Lender,  the
percentage  obtained by dividing (x) the sum of the Tranche A Term Loan Exposure
of that  Lender  plus the  Tranche B Term Loan  Exposure of that Lender plus the
Revolving Loan Exposure of that Lender by (y) the sum of the aggregate Tranche A
Term  Loan  Exposure  of all  Lenders  plus the  aggregate  Tranche  B Term Loan
Exposure  of all  Lenders  plus the  aggregate  Revolving  Loan  Exposure of all
Lenders,  in any such  case as the  applicable  percentage  may be  adjusted  by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of
each Lender for purposes of each of clauses (i), (ii) and (iii) of the preceding
sentence is set forth  opposite  the name of that Lender in Schedule 2.1 annexed
hereto.

          "PTO"  means the  United  States  Patent and  Trademark  Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.

          "REAL  PROPERTY  ASSET"  means,  at any  time  of  determination,  any
interest then owned by any Loan Party in any real property.

          "RECAPITALIZATION" means, collectively, the
Refinancing, the Sale and Leaseback Transactions and the
Repurchase.

          "RECORDED  LEASEHOLD INTEREST" means a Leasehold Property with respect
to which a Record  Document (as  hereinafter  defined) has been  recorded in all
places  necessary or desirable,  in the reasonable  judgment of Agents,  to give
constructive  notice of such Leasehold  Property to  third-party  purchasers and
encumbrancers  of the affected real property.  For purposes of this  definition,
the term "RECORD  DOCUMENT" means, with respect to any Leasehold  Property,  (a)
the lease evidencing such Leasehold Property or a memorandum  thereof,  executed
and acknowledged by the owner of the affected real property,  as lessor,  or (b)
if such  Leasehold  Property  was  acquired  or  subleased  from the holder of a
Recorded  Leasehold  Interest,  the applicable  assignment or sublease document,
executed and  acknowledged  by such holder,  in each case in form  sufficient to
give such constructive  notice upon recordation and otherwise in form reasonably
satisfactory to Agents.

          "REFINANCING" has the meaning assigned to that term
in the Recitals hereof.

          "REFUNDED  SWING LINE LOANS" has the meaning  assigned to that term in
subsection 2.1A(iv).

          "REGULATION  D" means  Regulation  D of the Board of  Governors of the
Federal Reserve System, as in effect from time to time.

          "REIMBURSEMENT DATE" has the meaning assigned to that
term in subsection 3.3B.

          "RELEASE"  means  any  release,  spill,  emission,  leaking,  pumping,
pouring, injection, escaping, deposit, disposal, discharge,  dispersal, dumping,
leaching  or  migration  of  Hazardous  Materials  into the  indoor  or  outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed  receptacles  containing  any Hazardous  Materials),  including the
movement of any  Hazardous  Materials  through the air,  soil,  surface water or
groundwater.

          "REPURCHASE" has the meaning assigned to that term in
the Recitals hereof.

          "REQUISITE  LENDERS"  means Lenders having or holding more than 51% of
the sum of (i) the  aggregate  Tranche A Term Loan  Exposure of all Lenders plus
(ii) the  aggregate  Tranche B Term Loan  Exposure of all Lenders plus (iii) the
aggregate Revolving Loan Exposure of all Lenders.

          "RESTRICTED   JUNIOR   PAYMENT"   means  (i)  any  dividend  or  other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter  outstanding,  except a dividend  payable  solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement,  sinking fund or similar payment,  purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter  outstanding,  (iii) any  payment  made to  retire,  or to obtain  the
surrender  of, any  outstanding  warrants,  options  or other  rights to acquire
shares of any class of stock of Company now or hereafter  outstanding,  and (iv)
any payment or prepayment of principal of,  premium,  if any, or interest on, or
redemption,  purchase,  retirement,  defeasance (including in-substance or legal
defeasance),  sinking fund or similar payment with respect to, any  Subordinated
Indebtedness that is not approved by Agents and Requisite Lenders.

          "REVOLVING LOAN  COMMITMENT"  means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(iii), and "REVOLVING LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.

          "REVOLVING LOAN COMMITMENT TERMINATION DATE" means
April 15, 2002.

          "REVOLVING LOAN EXPOSURE" means,  with respect to any Lender as of any
date of  determination  (i)  prior  to the  termination  of the  Revolving  Loan
Commitments,  that  Lender's  Revolving  Loan  Commitment  and  (ii)  after  the
termination  of the  Revolving  Loan  Commitments,  the sum of (a) the aggregate
outstanding  principal  amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage
in respect of all  Letters of Credit  issued by that Lender (in each case net of
any  participations  purchased by other Lenders in such Letters of Credit or any
unreimbursed   drawings  thereunder)  plus  (c)  the  aggregate  amount  of  all
participations  purchased by that Lender in any outstanding Letters of Credit or
any  unreimbursed  drawings  under any Letters of Credit plus (d) in the case of
Swing Line Lender, the aggregate  outstanding principal amount of all Swing Line
Loans (net of any partici- pations therein  purchased by other Lenders) plus (e)
the  aggregate  amount of all  participations  purchased  by that  Lender in any
outstanding Swing Line Loans.

          "REVOLVING  LOANS" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(iii).

          "REVOLVING  NOTES" means (i) the  promissory  notes of Company  issued
pursuant to subsection  2.1D(i)(c)  on the Closing Date and (ii) any  promissory
notes issued by Company pursuant to the last sentence of subsection  10.1B(i) in
connection  with  assignments  of the Revolving Loan  Commitments  and Revolving
Loans of any  Lenders,  in each case  substantially  in the form of  Exhibit  VI
annexed hereto, as they may be amended,  supplemented or otherwise modified from
time to time.

          "SALE AND  LEASEBACK  TRANSACTIONS"  has the meaning  assigned to that
term in the Recitals hereof.

          "SECURITIES" means any stock, shares,  partnership  interests,  voting
trust   certificates,   certificates  of  interest  or   participation   in  any
profit-sharing agreement or arrangement,  options,  warrants, bonds, debentures,
notes, or other evidences of  indebtedness,  secured or unsecured,  convertible,
subordinated  or  otherwise,  or in general any  instruments  commonly  known as
"securities"  or any  certificates  of  interest,  shares or  participations  in
temporary or interim  certificates  for the purchase or  acquisition  of, or any
right to subscribe to, purchase or acquire, any of the foregoing.

          "SECURITIES  ACT" means the  Securities  Act of 1933,  as amended from
time to time, and any successor statute.

          "SOLVENCY CERTIFICATE" means an Officer's Certificate substantially in
the form of Exhibit XXIV annexed hereto.

          "SOLVENT"  means,  with respect to any Person,  that as of the date of
determination  both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities)  of such  Person  and (z) not less  than the  amount  that  will be
required to pay the probable liabilities on such Person's then existing debts as
they become  absolute and matured  considering  all financing  alternatives  and
potential asset sales  reasonably  available to such Person;  (ii) such Person's
capital  is  not  unreasonably   small  in  relation  to  its  business  or  any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably  believe) that it will incur,  debts
beyond its ability to pay such debts as they become due;  and (B) such Person is
"solvent"  within the meaning given that term and similar terms under applicable
laws relating to  fraudulent  transfers  and  conveyances.  For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and  circumstances  existing at
such time,  represents  the amount that can  reasonably be expected to become an
actual or matured liability.

          "STANDBY  LETTER  OF  CREDIT"  means any  standby  letter of credit or
similar  instrument  issued for the purpose of supporting  (i)  Indebtedness  of
Company  or any  of  its  Subsidiaries  in  respect  of  industrial  revenue  or
development  bonds or  financings,  (ii) workers'  compensation  liabilities  of
Company  or any of its  Subsidiaries,  (iii)  the  obligations  of  third  party
insurers of Company or any of its Subsidiaries, (iv) obligations with respect to
Capital Leases or Operating  Leases of Company or any of its  Subsidiaries,  and
(v) performance, payment, deposit or surety obligations of Company or any of its
Subsidiaries,  in any case if required by law or governmental rule or regulation
or in accordance with custom and practice in the industry; provided that Standby
Letters  of Credit may not be issued for the  purpose  of  supporting  (a) trade
payables or (b) any Indebtedness constituting "antecedent debt" (as that term is
used in Section 547 of the Bankruptcy Code).

          "SUBORDINATED INDEBTEDNESS" means Indebtedness of Company subordinated
in right of payment to the  Obligations  pursuant  to  documentation  containing
maturities, amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance satisfactory to Agents
and Requisite Lenders.

          "SUBSIDIARY"  means,  with  respect to any  Person,  any  corporation,
partnership,  limited  liability  company,  association,  joint venture or other
business  entity of which more than 50% of the total  voting  power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any  contingency)  to vote in the  election  of the Person or  Persons  (whether
directors,  managers,  trustees or other Persons  performing  similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or  controlled,  directly  or  indirectly,  by that
Person or one or more of the other  Subsidiaries of that Person or a combination
thereof.

          "SUBSIDIARY  GUARANTOR"  means any Subsidiary of Company that executes
and delivers a  counterpart  of the  Subsidiary  Guaranty on the Closing Date or
from time to time thereafter pursuant to subsection 6.8.

          "SUBSIDIARY  GUARANTY"  means the  Subsidiary  Guaranty  executed  and
delivered  by existing  Subsidiaries  of Company on the  Closing  Date and to be
executed and delivered by additional  Subsidiaries  of Company from time to time
thereafter in  accordance  with  subsection  6.8,  substantially  in the form of
Exhibit  XVIII  annexed  hereto,  as such  Subsidiary  Guaranty may hereafter be
amended, supplemented or otherwise modified from time to time.

          "SUBSIDIARY  PLEDGE  AGREEMENT" means each Subsidiary Pledge Agreement
executed and delivered by an existing  Subsidiary  Guarantor on the Closing Date
or executed and delivered by any  additional  Subsidiary  Guarantor from time to
time thereafter in accordance with subsection 6.8, in each case substantially in
the form of Exhibit XIX annexed hereto,  as such Subsidiary Pledge Agreement may
be  amended,   supplemented  or  otherwise  modified  from  time  to  time,  and
"SUBSIDIARY  PLEDGE  AGREEMENTS"  means all such Subsidiary  Pledge  Agreements,
collectively.

          "SUBSIDIARY   SECURITY   AGREEMENT"  means  each  Subsidiary  Security
Agreement  executed  and  delivered by an existing  Subsidiary  Guarantor on the
Closing Date or executed and delivered by any  additional  Subsidiary  Guarantor
from time to time  thereafter in accordance  with  subsection  6.8, in each case
substantially  in the form of  Exhibit  XX annexed  hereto,  as such  Subsidiary
Security Agreement may be amended,  supplemented or otherwise modified from time
to time, and "SUBSIDIARY SECURITY AGREEMENTS" means all such Subsidiary Security
Agreements, collectively.

          "SUBSIDIARY   TRADEMARK  SECURITY   AGREEMENT"  means  each  trademark
security  agreement,  copyright  security  agreement or other security agreement
executed and delivered by a Subsidiary  Guarantor in accordance  with subsection
6.8.

          "SUPPLEMENTAL COLLATERAL AGENT" has the meaning
assigned to that term in subsection 9.1D.

          "SWING LINE  LENDER"  means BIS, or any Person  serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.

          "SWING LINE LOAN COMMITMENT" means the commitment of Swing Line Lender
to make Swing Line Loans to Company pursuant to subsection 2.1A(iv).

          "SWING  LINE  LOANS"  means the  Loans  made by Swing  Line  Lender to
Company pursuant to subsection 2.1A(iv).

          "SWING  LINE NOTE"  means (i) the  promissory  note of Company  issued
pursuant to subsection 2.1D(ii) on the Closing Date and (ii) any promissory note
issued by Company to any  successor  Administrative  Agent and Swing Line Lender
pursuant to the last sentence of subsection 9.5B, in each case  substantially in
the form of Exhibit VII annexed  hereto,  as it may be amended,  supplemented or
otherwise modified from time to time.

          "SYNDICATION AGENT" has the meaning assigned to that
term in the introduction to this Agreement.

          "TAX" or "TAXES" means any present or future tax, levy, impost,  duty,
charge,  fee,  deduction or  withholding of any nature and whatever  called,  by
whomsoever, on whomsoever and wherever imposed, levied,  collected,  withheld or
assessed;  provided  that "TAX ON THE OVERALL  NET INCOME" of a Person  shall be
construed  as a  reference  to a tax imposed by the  jurisdiction  in which that
Person is organized or in which that Person's  principal office (and/or,  in the
case of a Lender,  its  lending  office)  is  located  or in which  that  Person
(and/or,  in the case of a Lender,  its  lending  office)  is deemed to be doing
business on all or part of the net income,  profits or gains (whether worldwide,
or only insofar as such income,  profits or gains are  considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).

          "TERM  LOANS"  means,  collectively,  the Tranche A Term Loans and the
Tranche B Term Loans.

          "TITLE COMPANY" means one or more title insurance  companies  selected
by Company and reasonably satisfactory to Agents.

          "TOTAL  UTILIZATION OF REVOLVING LOAN  COMMITMENTS"  means,  as at any
date of  determination,  the sum of (i) the  aggregate  principal  amount of all
outstanding  Revolving Loans (other than Revolving Loans made for the purpose of
repaying any Refunded  Swing Line Loans or reimbursing  the  applicable  Issuing
Lender for any amount  drawn  under any Letter of Credit but not yet so applied)
plus (ii) the aggregate  principal  amount of all  outstanding  Swing Line Loans
plus (iii) the Letter of Credit Usage.

          "TRANCHE A TERM LOAN  COMMITMENT"  means the commitment of a Lender to
make a  Tranche A Term Loan to  Company  pursuant  to  subsection  2.1A(i),  and
"TRANCHE A TERM LOAN  COMMITMENTS"  means such commitments of all Lenders in the
aggregate.

          "TRANCHE A TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination  (i) prior to the funding of the Tranche A Term Loans,
that Lender's  Tranche A Term Loan  Commitment and (ii) after the funding of the
Tranche A Term Loans,  the  outstanding  principal  amount of the Tranche A Term
Loan of that Lender.

          "TRANCHE A TERM LOANS"  means the Tranche A Term Loans made by Lenders
to Company pursuant to subsection 2.1A(i).

          "TRANCHE  A TERM  NOTES"  means (i) the  promissory  notes of  Company
issued  pursuant  to  subsection  2.1D(i)(a)  on the  Closing  Date and (ii) any
promissory  notes issued by Company  pursuant to the last sentence of subsection
10.1B(i) in connection  with  assignments  of the Term Loan  Commitments or Term
Loans of any  Lenders,  in each case  substantially  in the form of  Exhibit  IV
annexed hereto, as they may be amended,  supplemented or otherwise modified from
time to time.

          "TRANCHE B TERM LOAN  COMMITMENT"  means the commitment of a Lender to
make a  Tranche B Term Loan to  Company  pursuant  to  subsection  2.1A(i),  and
"TRANCHE B TERM LOAN  COMMITMENTS"  means such commitments of all Lenders in the
aggregate.

          "TRANCHE B TERM LOAN EXPOSURE" means, with respect to any Lender as of
any date of determination  (i) prior to the funding of the Tranche B Term Loans,
that Lender's  Tranche B Term Loan  Commitment and (ii) after the funding of the
Tranche B Term Loans,  the  outstanding  principal  amount of the Tranche B Term
Loan of that Lender.

          "TRANCHE B TERM LOANS"  means the Tranche B Term Loans made by Lenders
to Company pursuant to subsection 2.1A(ii).

          "TRANCHE  B TERM  NOTES"  means (i) the  promissory  notes of  Company
issued  pursuant  to  subsection  2.1D(i)(b)  on the  Closing  Date and (ii) any
promissory  notes issued by Company  pursuant to the last sentence of subsection
10.1B(i) in connection with  assignments of the Tranche B Term Loan  Commitments
or Tranche B Term Loans of any Lenders,  in each case  substantially in the form
of Exhibit IV annexed hereto, as they may be amended,  supplemented or otherwise
modified from time to time.

          "UCC" means the Uniform  Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.

1.2  ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
     CALCULATIONS UNDER AGREEMENT.

          Except  as  otherwise  expressly  provided  in  this  Agreement,   all
accounting terms not otherwise  defined herein shall have the meanings  assigned
to them in conformity  with GAAP.  Financial  statements  and other  information
required to be  delivered by Company to Lenders  pursuant to clauses (i),  (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance  with GAAP as
in effect  at the time of such  preparation  (and  delivered  together  with the
reconciliation  statements provided for in subsection  6.1(v)).  Calculations in
connection  with  the  definitions,  covenants  and  other  provisions  of  this
Agreement  shall utilize  accounting  principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.

1.3  OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.

          A.   Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the
plural, depending on the reference.

          B.   References to "Sections" and "subsections" shall
be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided.

          C.  The use in any of the Loan  Documents  of the  word  "include"  or
"including",  when following any general statement, term or matter, shall not be
construed  to limit  such  statement,  term or matter to the  specific  items or
matters  set  forth  immediately  following  such  word or to  similar  items or
matters,  whether or not nonlimiting  language (such as "without  limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but  rather  shall be deemed to refer to all other  items or  matters  that fall
within the broadest possible scope of such general statement, term or matter.


SECTION 2.     AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1  COMMITMENTS; MAKING OF LOANS; NOTES.

     A.   COMMITMENTS.  Subject to the terms and conditions of
this Agreement and in reliance upon the representations and
warranties of Company herein set forth, each Lender hereby
severally agrees to make the Loans described in subsections
2.1A(i), 2.1A(ii) and 2.1A(iii) and Swing Line Lender hereby
agrees to make the Loans described in subsection 2.1A(iv).

          (i) Tranche A Term  Loans.  Each  Lender  severally  agrees to lend to
     Company on the Closing  Date,  through the purchase of loans from DLJ under
     the Existing Credit Agreement pursuant to the Master Assignment  Agreement,
     an amount not exceeding  its Pro Rata Share of the aggregate  amount of the
     Tranche A Term Loan  Commitments to be used for the purposes  identified in
     subsection 2.5A. The amount of each Lender's Tranche A Term Loan Commitment
     is set forth  opposite  its name on  Schedule  2.1  annexed  hereto and the
     aggregate  amount of the Tranche A Term Loan  Commitments  is  $20,000,000;
     provided  that the  Tranche A Term Loan  Commitments  of  Lenders  shall be
     adjusted  to give  effect  to any  assignments  of the  Tranche A Term Loan
     Commitments   pursuant  to  subsection   10.1B.  Each  Lender's  Term  Loan
     Commitment shall expire immediately and without further action on April 15,
     1997 if the  Tranche  A Term  Loans are not made on or  before  that  date.
     Company  may  make  only  one  borrowing  under  the  Tranche  A Term  Loan
     Commitments.   Amounts   borrowed   under  this   subsection   2.1A(i)  and
     subsequently repaid or prepaid may not be reborrowed.

          (ii)  Tranche B Term Loans.  Each Lender  severally  agrees to lend to
     Company on the Closing  Date,  through the purchase of loans from DLJ under
     the Existing Credit Agreement pursuant to the Master Assignment  Agreement,
     an amount not exceeding  its Pro Rata Share of the aggregate  amount of the
     Tranche B Term Loan  Commitments to be used for the purposes  identified in
     subsection 2.5A. The amount of each Lender's Tranche B Term Loan Commitment
     is set forth  opposite  its name on  Schedule  2.1  annexed  hereto and the
     aggregate  amount of the Tranche B Term Loan  Commitments  is  $55,000,000;
     provided  that the  Tranche B Term Loan  Commitments  of  Lenders  shall be
     adjusted  to give  effect  to any  assignments  of the  Tranche B Term Loan
     Commitments pursuant to subsection 10.1B. Each Lender's Tranche B Term Loan
     Commitment shall expire immediately and without further action on April 15,
     1997 if the  Tranche  B Term  Loans are not made on or  before  that  date.
     Company  may  make  only  one  borrowing  under  the  Tranche  B Term  Loan
     Commitments.   Amounts   borrowed  under  this   subsection   2.1A(ii)  and
     subsequently repaid or prepaid may not be reborrowed.

          (iii) Revolving Loans.  Each Lender severally  agrees,  subject to the
     limitations set forth below with respect to the maximum amount of Revolving
     Loans  permitted to be  outstanding  from time to time,  to lend to Company
     from time to time during the period from the Closing Date to but  excluding
     the Revolving  Loan  Commitment  Termination  Date an aggregate  amount not
     exceeding its Pro Rata Share of the aggregate  amount of the Revolving Loan
     Commitments to be used for the purposes  identified in subsection 2.5B. The
     original  amount of each Lender's  Revolving  Loan  Commitment is set forth
     opposite its name on Schedule 2.1 annexed hereto and the aggregate original
     amount of the Revolving Loan Commitments is $15,000,000;  provided that the
     Revolving  Loan  Commitments of Lenders shall be adjusted to give effect to
     any  assignments of the Revolving Loan  Commitments  pursuant to subsection
     10.1B;  and  provided,  further  that  the  amount  of the  Revolving  Loan
     Commitments  shall  be  reduced  from  time to time  by the  amount  of any
     reductions  thereto made pursuant to  subsections  2.4B(ii) and  2.4B(iii).
     Each Lender's  Revolving Loan Commitment shall expire on the Revolving Loan
     Commitment  Termination  Date and all Revolving Loans and all other amounts
     owed hereunder  with respect to the Revolving  Loans and the Revolving Loan
     Commitments  shall be paid in full no later than that date;  provided  that
     each  Lender's  Revolving  Loan  Commitment  shall expire  immediately  and
     without  further action on April 15, 1997 if the Tranche A Term Loans,  the
     Tranche B Term  Loans and the  initial  Revolving  Loans are not made on or
     before that date.  Amounts borrowed under this subsection  2.1A(iii) may be
     repaid and  reborrowed  to but  excluding  the  Revolving  Loan  Commitment
     Termination Date.

          Anything contained in this Agreement to the contrary  notwithstanding,
     the Revolving Loans and the Revolving Loan Commitments  shall be subject to
     the following limitations in the amounts and during the periods indicated:

               (a) in no event shall the Total  Utilization  of  Revolving  Loan
          Commitments at any time exceed the Revolving Loan  Commitments then in
          effect;

               (b) in no  event  shall  the  sum of  the  aggregate  outstanding
          principal amount of all Revolving Loans plus the aggregate outstanding
          principal amount of all Swing Line Loans exceed  $10,000,000  (whether
          or not any Letters of Credit are outstanding; and

               (c) for 30 consecutive days during each consecutive  twelve-month
          period, the sum of the aggregate  outstanding  principal amount of all
          Revolving Loans plus the aggregate outstanding principal amount of all
          Swing Line Loans shall not exceed $5,000,000.

          (iv) Swing Line Loans. Swing Line Lender hereby agrees, subject to the
     limitations  set forth below with  respect to the  maximum  amount of Swing
     Line Loans permitted to be outstanding from time to time, to make a portion
     of the Revolving  Loan  Commitments  available to Company from time to time
     during the period from the Closing Date to but excluding the Revolving Loan
     Commitment  Termination  Date by making  Swing  Line Loans to Company in an
     aggregate amount not exceeding the amount of the Swing Line Loan Commitment
     to be used for the purposes identified in subsection 2.5B,  notwithstanding
     the fact that such  Swing  Line  Loans,  when  aggregated  with  Swing Line
     Lender's outstanding Revolving Loans and Swing Line Lender's Pro Rata Share
     of the  Letter of Credit  Usage  then in  effect,  may  exceed  Swing  Line
     Lender's  Revolving Loan Commitment.  The original amount of the Swing Line
     Loan Commitment is $5,000,000; provided that any reduction of the Revolving
     Loan  Commitments  made pursuant to subsection  2.4B(ii) or 2.4B(iii) which
     reduces the aggregate Revolving Loan Commitments to an amount less than the
     then current  amount of the Swing Line Loan  Commitment  shall result in an
     automatic  corresponding reduction of the Swing Line Loan Commitment to the
     amount of the  Revolving  Loan  Commitments,  as so  reduced,  without  any
     further action on the part of Company,  Administrative  Agent or Swing Line
     Lender.  The Swing Line Loan Commitment  shall expire on the Revolving Loan
     Commitment  Termination Date and all Swing Line Loans and all other amounts
     owed  hereunder  with respect to the Swing Line Loans shall be paid in full
     no later than that date; provided that the Swing Line Loan Commitment shall
     expire  immediately  and  without  further  action on April 15, 1997 if the
     Tranche A Term Loans,  the  Tranche B Term Loans and the initial  Revolving
     Loans are not made on or before  that  date.  Amounts  borrowed  under this
     subsection  2.1A(iv)  may be repaid and  reborrowed  to but  excluding  the
     Revolving Loan Commitment Termination Date.

          Anything contained in this Agreement to the contrary  notwithstanding,
     the Swing Line Loans and the Swing Line Loan Commitment shall be subject to
     the  limitation  that in no event shall the Total  Utilization of Revolving
     Loan  Commitments at any time exceed the Revolving Loan Commitments then in
     effect.

          With  respect to any Swing Line Loans which have not been  voluntarily
     prepaid by Company pursuant to subsection  2.4B(i),  Swing Line Lender may,
     at any time in its sole and absolute discretion,  deliver to Administrative
     Agent  (with a copy to  Company),  no later than 10:00 A.M.  (New York City
     time) on the first Business Day in advance of the proposed  Funding Date, a
     notice (which shall be deemed to be a Notice of Borrowing given by Company)
     requesting Lenders to make Revolving Loans that are Base Rate Loans on such
     Funding Date in an amount equal to the amount of such Swing Line Loans (the
     "REFUNDED  SWING LINE LOANS")  outstanding on the date such notice is given
     which Swing Line Lender requests Lenders to prepay.  Anything  contained in
     this  Agreement to the contrary  notwithstanding,  (i) the proceeds of such
     Revolving  Loans made by Lenders  other  than  Swing Line  Lender  shall be
     immediately delivered by Administrative Agent to Swing Line Lender (and not
     to Company)  and applied to repay a  corresponding  portion of the Refunded
     Swing Line Loans and (ii) on the day such Revolving  Loans are made,  Swing
     Line  Lender's  Pro Rata Share of the  Refunded  Swing Line Loans  shall be
     deemed to be paid with the proceeds of a Revolving  Loan made by Swing Line
     Lender, and such portion of the Swing Line Loans deemed to be so paid shall
     no longer be  outstanding  as Swing  Line  Loans and shall no longer be due
     under the Swing Line Note of Swing Line Lender but shall instead constitute
     part of Swing Line Lender's  outstanding  Revolving  Loans and shall be due
     under the Revolving Note of Swing Line Lender.  Company  hereby  authorizes
     Administrative  Agent and Swing Line  Lender to charge  Company's  accounts
     with Administrative Agent and Swing Line Lender (up to the amount available
     in each such  account)  in order to  immediately  pay Swing Line Lender the
     amount of the Refunded  Swing Line Loans to the extent the proceeds of such
     Revolving Loans made by Lenders,  including the Revolving Loan deemed to be
     made by Swing Line Lender, are not sufficient to repay in full the Refunded
     Swing Line  Loans.  If any portion of any such amount paid (or deemed to be
     paid) to Swing Line Lender  should be  recovered by or on behalf of Company
     from Swing Line  Lender in  bankruptcy,  by  assignment  for the benefit of
     creditors  or  otherwise,  the loss of the  amount  so  recovered  shall be
     ratably shared among all Lenders in the manner  contemplated  by subsection
     10.5.

          If for any reason (a) Revolving Loans are not made upon the request of
     Swing Line Lender as provided in the immediately  preceding paragraph in an
     amount sufficient to repay any amounts owed to Swing Line Lender in respect
     of any outstanding  Swing Line Loans or (b) the Revolving Loan  Commitments
     are  terminated at a time when any Swing Line Loans are  outstanding,  each
     Lender  shall be  deemed  to,  and  hereby  agrees  to,  have  purchased  a
     participation  in such  outstanding  Swing Line Loans in an amount equal to
     its Pro Rata Share  (calculated,  in the case of the foregoing  clause (b),
     immediately prior to such termination of the Revolving Loan Commitments) of
     the unpaid amount of such Swing Line Loans  together with accrued  interest
     thereon. Upon one Business Day's notice from Swing Line Lender, each Lender
     shall  deliver  to Swing  Line  Lender  an amount  equal to its  respective
     participation in same day funds at the Funding and Payment Office. In order
     to further  evidence  such  participation  (and  without  prejudice  to the
     effectiveness of the participation provisions set forth above), each Lender
     agrees to enter into a separate  participation  agreement at the request of
     Swing Line Lender in form and substance  reasonably  satisfactory  to Swing
     Line Lender.  In the event any Lender fails to make available to Swing Line
     Lender  the  amount of such  Lender's  participation  as  provided  in this
     paragraph,  Swing Line Lender  shall be entitled to recover  such amount on
     demand  from  such  Lender  together  with  interest  thereon  at the  rate
     customarily  used by Swing Line Lender for the  correction  of errors among
     banks for three Business Days and thereafter at the Base Rate. In the event
     Swing Line Lender  receives a payment of any amount in which other  Lenders
     have purchased  participations  as provided in this  paragraph,  Swing Line
     Lender  shall  promptly  distribute  to each such other Lender its Pro Rata
     Share of such payment.

          Anything  contained  herein  to  the  contrary  notwithstanding,  each
     Lender's obligation to make Revolving Loans for the purpose of repaying any
     Refunded  Swing Line Loans pursuant to the second  preceding  paragraph and
     each Lender's  obligation to purchase a  participation  in any unpaid Swing
     Line  Loans  pursuant  to the  immediately  preceding  paragraph  shall  be
     absolute and  unconditional  and shall not be affected by any circumstance,
     including (a) any set-off, counterclaim, recoupment, defense or other right
     which such Lender may have against Swing Line Lender,  Company or any other
     Person for any reason whatsoever;  (b) the occurrence or continuation of an
     Event of Default or a Potential Event of Default; (c) any adverse change in
     the  business,  operations,  properties,  assets,  condition  (financial or
     otherwise)  or  prospects  of Company or any of its  Subsidiaries;  (d) any
     breach of this  Agreement or any other Loan Document by any party  thereto;
     or (e) any other  circumstance,  happening or event whatsoever,  whether or
     not similar to any of the foregoing; provided that such obligations of each
     Lender are subject to the condition that (X) Swing Line Lender  believed in
     good  faith  that all  conditions  under  Section  4 to the  making  of the
     applicable  Refunded Swing Line Loans or other unpaid Swing Line Loans,  as
     the case may be, were  satisfied at the time such Refunded Swing Line Loans
     or unpaid  Swing Line Loans were made or (Y) the  satisfaction  of any such
     condition not satisfied had been waived in accordance  with subsection 10.6
     prior to or at the time such  Refunded  Swing  Line  Loans or other  unpaid
     Swing Line Loans were made.

     B.  BORROWING  MECHANICS.  Tranche A Term  Loans,  Tranche B Term  Loans or
Revolving  Loans made on any  Funding  Date  (other  than  Revolving  Loans made
pursuant to a request by Swing Line Lender  pursuant to subsection  2.1A(iv) for
the purpose of repaying  any Refunded  Swing Line Loans or Revolving  Loans made
pursuant to subsection  3.3B for the purpose of  reimbursing  any Issuing Lender
for the amount of a drawing  under a Letter of Credit  issued by it) shall be in
an aggregate minimum amount of $1,000,000 and integral  multiples of $500,000 in
excess of that amount;  provided that Tranche A Term Loans, Tranche B Term Loans
or  Revolving  Loans made on any Funding  Date as  Eurodollar  Rate Loans with a
particular Interest Period shall be in an aggregate minimum amount of $1,000,000
and integral  multiples  of $100,000 in excess of that amount.  Swing Line Loans
made on any Funding Date shall be in an aggregate minimum amount of $500,000 and
integral  multiples  of  $100,000  in excess of that  amount.  Whenever  Company
desires  that Lenders  make Term Loans or  Revolving  Loans it shall  deliver to
Administrative  Agent a Notice of Borrowing  no later than 10:00 A.M.  (New York
City time) at least three Business Days in advance of the proposed  Funding Date
(in the case of a Eurodollar  Rate Loan) or at least one Business Day in advance
of the proposed Funding Date (in the case of a Base Rate Loan). Whenever Company
desires  that Swing Line  Lender  make a Swing  Line Loan,  it shall  deliver to
Administrative  Agent a Notice of  Borrowing  no later than 12:00 Noon (New York
City time) on the proposed  Funding Date. The Notice of Borrowing  shall specify
(i) the proposed  Funding Date (which shall be a Business Day),  (ii) the amount
and type of Loans requested, (iii) in the case of Swing Line Loans and any Loans
made on the Closing Date, that such Loans shall be Base Rate Loans,  (iv) in the
case of Revolving  Loans not made on the Closing Date,  whether such Loans shall
be Base Rate Loans or  Eurodollar  Rate Loans,  and (v) in the case of any Loans
requested  to be made as  Eurodollar  Rate Loans,  the initial  Interest  Period
requested  therefor.  Term  Loans and  Revolving  Loans may be  continued  as or
converted into Base Rate Loans and Eurodollar  Rate Loans in the manner provided
in  subsection  2.2D.  In lieu  of  delivering  the  above-described  Notice  of
Borrowing,  Company  may give  Administrative  Agent  telephonic  notice  by the
required time of any proposed  borrowing  under this subsection  2.1B;  provided
that such notice shall be promptly  confirmed in writing by delivery of a Notice
of Borrowing to Administrative Agent on or before the applicable Funding Date.

          Neither  Administrative Agent nor any Lender shall incur any liability
to  Company  in  acting  upon any  telephonic  notice  referred  to  above  that
Administrative  Agent  believes  in good  faith  to have  been  given  by a duly
authorized  officer or other person authorized to borrow on behalf of Company or
for otherwise  acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders  in  accordance  with this  Agreement  pursuant  to any such
telephonic notice Company shall have effected Loans hereunder.

          Company shall notify  Administrative Agent prior to the funding of any
Loans in the event that any of the  matters  to which  Company  is  required  to
certify in the  applicable  Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification  by Company,  as of the applicable
Funding  Date,  as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.

          Except as otherwise  provided in  subsections  2.6B,  2.6C and 2.6G, a
Notice of Borrowing  for a Eurodollar  Rate Loan (or  telephonic  notice in lieu
thereof)  shall  be   irrevocable  on  and  after  the  related   Interest  Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.

     C.  DISBURSEMENT  OF FUNDS.  All Term Loans and Revolving  Loans under this
Agreement shall be made by Lenders  simultaneously and  proportionately to their
respective  Pro  Rata  Shares,  it  being  understood  that no  Lender  shall be
responsible  for  any  default  by any  other  Lender  in  that  other  Lender's
obligation to make a Loan  requested  hereunder nor shall the  Commitment of any
Lender to make the  particular  type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other  Lender's  obligation
to make a Loan requested  hereunder.  Promptly  after receipt by  Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice
in lieu  thereof),  Administrative  Agent shall notify each Lender or Swing Line
Lender,  as the case may be, of the proposed  borrowing.  Each Lender shall make
the amount of its Loan  available to  Administrative  Agent not later than 12:00
Noon (New York City time) on the applicable  Funding Date, and Swing Line Lender
shall make the amount of its Swing Line Loan available to  Administrative  Agent
not later than 2:00 P.M.(New York City time) on the applicable  Funding Date, in
each case in same day funds in  Dollars,  at the  Funding  and  Payment  Office.
Except as provided in  subsection  2.1A(iv) or  subsection  3.3B with respect to
Revolving  Loans used to repay  Refunded  Swing Line Loans or to  reimburse  any
Issuing  Lender for the amount of a drawing  under a Letter of Credit  issued by
it,  upon  satisfaction  or  waiver of the  conditions  precedent  specified  in
subsections  4.1 (in the case of Loans made on the Closing Date) and 4.2 (in the
case of all Loans),  Administrative  Agent shall make the proceeds of such Loans
available to Company on the applicable Funding Date by causing an amount of same
day  funds in  Dollars  equal to the  proceeds  of all such  Loans  received  by
Administrative  Agent from Lenders or Swing Line Lender,  as the case may be, to
be credited to the account of Company at the Funding and Payment Office.

          Unless  Administrative  Agent  shall have been  notified by any Lender
prior to the Funding Date for any Loans that such Lender does not intend to make
available to Administrative  Agent the amount of such Lender's Loan requested on
such  Funding  Date,  Administrative  Agent may assume that such Lender has made
such  amount  available  to  Administrative  Agent  on  such  Funding  Date  and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a  corresponding  amount on such Funding Date. If such
corresponding  amount is not in fact made available to  Administrative  Agent by
such   Lender,   Administrative   Agent  shall  be  entitled  to  recover   such
corresponding  amount on demand from such Lender together with interest thereon,
for each day from  such  Funding  Date  until  the date  such  amount is paid to
Administrative  Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three  Business Days and  thereafter at the
Base Rate. If such Lender does not pay such corresponding  amount forthwith upon
Administrative  Agent's  demand  therefor,  Administrative  Agent shall promptly
notify Company and Company shall  immediately pay such  corresponding  amount to
Administrative  Agent  together  with interest  thereon,  for each day from such
Funding Date until the date such amount is paid to Administrative  Agent, at the
rate  payable  under  this  Agreement  for  Base  Rate  Loans.  Nothing  in this
subsection  2.1C shall be deemed to relieve  any Lender from its  obligation  to
fulfill its  Commitments  hereunder or to prejudice  any rights that Company may
have against any Lender as a result of any default by such Lender hereunder.

     D.  NOTES.  Company shall execute and deliver on the
Closing Date (i) to each Lender (or to Administrative Agent
for that Lender) (a) a Tranche A Term Note substantially in
the form of Exhibit IV annexed hereto to evidence that
Lender's Tranche A Term Loan, in the principal amount of that
Lender's Tranche A Term Loan and with other appropriate inser-
tions, (b) a Tranche B Term Note substantially in the form of
Exhibit V annexed hereto to evidence that Lender's Tranche B
Term Loan, in the principal amount of that Lender's Tranche B
Term Loan and with other appropriate insertions, and (c) a
Revolving Note substantially in the form of Exhibit VI annexed
hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment
and with other appropriate insertions, and (ii) to Swing Line
Lender (or to Administrative Agent for Swing Line Lender) a
Swing Line Note substantially in the form of Exhibit VII
annexed hereto to evidence Swing Line Lender's Swing Line
Loans, in the principal amount of the Swing Line Loan
Commitment and with other appropriate insertions.

          Administrative  Agent  may deem and treat the payee of any Note as the
owner thereof for all purposes  hereof unless and until an Assignment  Agreement
effecting  the  assignment  or  transfer  thereof  shall have been  accepted  by
Administrative Agent as provided in subsection 10.1B(ii). Any request, authority
or consent of any person or entity who,  at the time of making  such  request or
giving such authority or consent,  is the holder of any Note shall be conclusive
and binding on any subsequent holder,  assignee or transferee of that Note or of
any Note or Notes issued in exchange therefor.

2.2  INTEREST ON THE LOANS.

     A. RATE OF INTEREST.  Subject to the provisions of subsections 2.6 and 2.7,
each Term  Loan and each  Revolving  Loan  shall  bear  interest  on the  unpaid
principal  amount  thereof  from the date  made  through  maturity  (whether  by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted  Eurodollar Rate. Subject to the provisions of subsection 2.7, each
Swing Line Loan shall bear interest on the unpaid  principal amount thereof from
the date made through maturity  (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate. The applicable  basis for  determining
the rate of interest with respect to any Term Loan or any  Revolving  Loan shall
be selected by Company initially at the time a Notice of Borrowing is given with
respect to such Loan pursuant to subsection  2.1B, and the basis for determining
the  interest  rate with respect to any Term Loan or any  Revolving  Loan may be
changed from time to time pursuant to subsection 2.2D. If on any day a Term Loan
or  Revolving  Loan is  outstanding  with  respect to which  notice has not been
delivered to Administrative Agent in accordance with the terms of this Agreement
specifying the applicable  basis for determining the rate of interest,  then for
that day that Loan shall bear interest determined by reference to the Base Rate.

          (i) Subject to the provisions of subsections 2.2E and 2.7, the Tranche
A Term Loans and the  Revolving  Loans shall bear interest  through  maturity as
follows:

          (a) if a Base Rate  Loan,  then at the sum of the Base Rate plus 2.00%
     per annum minus the Applicable Pricing Discount, if any; or

          (b)  if a  Eurodollar  Rate  Loan,  then  at the  sum of the  Adjusted
     Eurodollar Rate plus 3.00% per annum minus the Applicable Pricing Discount,
     if any.

          (ii)  Subject  to the  provisions  of  subsections  2.2E and 2.7,  the
Tranche B Term Loans shall bear interest through maturity as follows:

          (a)  if a Base Rate Loan, then at the sum of the Base
     Rate plus 2.50% per annum; or

          (b)  if a  Eurodollar  Rate  Loan,  then  at the  sum of the  Adjusted
     Eurodollar Rate plus 3.50% per annum.

          (iii) Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the Base Rate plus
1.50% per annum minus the Applicable Pricing Discount, if any.

     B. INTEREST PERIODS.  In connection with each Eurodollar Rate Loan, Company
may,   pursuant   to  the   applicable   Notice  of   Borrowing   or  Notice  of
Conversion/Continuation,  as the case may be, select an interest period (each an
"INTEREST  PERIOD") to be applicable to such Loan,  which Interest  Period shall
be, at Company's option, either a one, two, three or six month period;  provided
that:

          (i) the initial  Interest  Period for any  Eurodollar  Rate Loan shall
     commence on the Funding Date in respect of such Loan, in the case of a Loan
     initially  made as a Eurodollar  Rate Loan, or on the date specified in the
     applicable  Notice  of  Conversion/Continuation,  in  the  case  of a  Loan
     converted to a Eurodollar Rate Loan;

          (ii) in the case of immediately successive Interest Periods applicable
     to a  Eurodollar  Rate  Loan  continued  as such  pursuant  to a Notice  of
     Conversion/ Continuation, each successive Interest Period shall commence on
     the day on which the next preceding Interest
     Period expires;

          (iii) if an Interest  Period would  otherwise  expire on a day that is
     not a  Business  Day,  such  Interest  Period  shall  expire  on  the  next
     succeeding  Business  Day;  provided  that,  if any  Interest  Period would
     otherwise  expire on a day that is not a  Business  Day but is a day of the
     month  after  which no  further  Business  Day occurs in such  month,  such
     Interest Period shall expire on the next preceding Business Day;

          (iv) any  Interest  Period that begins on the last  Business  Day of a
     calendar month (or on a day for which there is no numerically corresponding
     day in the  calendar  month  at the end of  such  Interest  Period)  shall,
     subject to clause (v) of this subsection 2.2B, end on the last Business Day
     of a calendar month;

          (v) no Interest  Period  with  respect to any portion of the Tranche A
     Term Loans shall  extend  beyond April 15,  2002,  no Interest  Period with
     respect to any  portion of the  Tranche B Term Loans  shall  extend  beyond
     April 15,  2004 and no Interest  Period with  respect to any portion of the
     Revolving   Loans  shall  extend  beyond  the  Revolving  Loan   Commitment
     Termination Date;

          (vi) no Interest  Period with  respect to any portion of the Tranche A
     Term Loans or the Tranche B Term Loans shall extend  beyond a date on which
     Company is required to make a scheduled payment of principal of the Tranche
     A Term Loans or the  Tranche B Term Loans,  as the case may be,  unless the
     sum of (a) the  aggregate  principal  amount  of  Tranche  A Term  Loans or
     Tranche B Term Loans, as the case may be, that are Base Rate Loans plus (b)
     the  aggregate  principal  amount of Tranche A Term Loans or Tranche B Term
     Loans,  as the case may be, that are  Eurodollar  Rate Loans with  Interest
     Periods  expiring on or before  such date  equals or exceeds the  principal
     amount  required  to be paid on the  Tranche A Term Loans or Tranche B Term
     Loans, as the case may be, on such date;

          (vii)     there shall be no more than eight Interest
     Periods outstanding at any time; and

          (viii) in the event  Company  fails to specify an Interest  Period for
     any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of
     Conversion/  Continuation,  Company  shall be  deemed to have  selected  an
     Interest Period of one month.

     C.  INTEREST  PAYMENTS.  Subject  to the  provisions  of  subsection  2.2E,
interest  on each Loan  shall be  payable  in  arrears  on and to each  Interest
Payment Date  applicable to that Loan,  upon any prepayment of that Loan (to the
extent  accrued on the amount being  prepaid) and at maturity  (including  final
maturity);  provided  that in the event any Swing  Line  Loans or any  Revolving
Loans that are Base Rate  Loans are  prepaid  pursuant  to  subsection  2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment  shall be payable on the next succeeding  Interest  Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).

     D. CONVERSION OR CONTINUATION. Subject to the provisions of subsection 2.6,
Company  shall have the option (i) to convert at any time all or any part of its
outstanding Tranche A Term Loans,  Tranche B Term Loans or Revolving Loans equal
to $1,000,000  and integral  multiples of $100,000 in excess of that amount from
Loans bearing  interest at a rate  determined by reference to one basis to Loans
bearing  interest at a rate  determined by reference to an alternative  basis or
(ii) upon the expiration of any Interest Period  applicable to a Eurodollar Rate
Loan,  to  continue  all or any  portion  of such Loan equal to  $1,000,000  and
integral  multiples  of $100,000 in excess of that amount as a  Eurodollar  Rate
Loan; provided,  however, that a Eurodollar Rate Loan may only be converted into
a Base  Rate  Loan on the  expiration  date  of an  Interest  Period  applicable
thereto.

          Company  shall  deliver  a  Notice  of  Conversion/   Continuation  to
Administrative  Agent no later than 10:00 A.M. (New York City time) at least one
Business  Day in  advance  of the  proposed  conversion  date  (in the case of a
conversion  to a Base Rate Loan) and at least three  Business Days in advance of
the proposed  conversion/continuation date (in the case of a conversion to, or a
continuation  of, a Eurodollar  Rate Loan). A Notice of  Conversion/Continuation
shall  specify (i) the proposed  conversion/continuation  date (which shall be a
Business Day),  (ii) the amount and type of the Loan to be  converted/continued,
(iii) the nature of the proposed conversion/ continuation, (iv) in the case of a
conversion  to, or a  continuation  of, a Eurodollar  Rate Loan,  the  requested
Interest Period, and (v) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing.  In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by  the  required  time  of  any  proposed  conversion/continuation  under  this
subsection  2.2D;  provided  that such  notice  shall be promptly  confirmed  in
writing by delivery  of a Notice of  Conversion/Continuation  to  Administrative
Agent on or before the proposed  conversion/  continuation date. Upon receipt of
written or telephonic notice of any proposed  conversion/continuation under this
subsection  2.2D,  Administrative  Agent shall promptly  transmit such notice by
telefacsimile or telephone to each Lender.

          Neither  Administrative Agent nor any Lender shall incur any liability
to  Company  in  acting  upon any  telephonic  notice  referred  to  above  that
Administrative  Agent  believes  in good  faith  to have  been  given  by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise  acting in good faith under this subsection  2.2D, and upon conversion
or continuation  of the applicable  basis for determining the interest rate with
respect to any Loans in  accordance  with this  Agreement  pursuant  to any such
telephonic  notice Company shall have effected a conversion or continuation,  as
the case may be, hereunder.

          Except as otherwise  provided in  subsections  2.6B,  2.6C and 2.6G, a
Notice of  Conversion/Continuation  for  conversion  to, or  continuation  of, a
Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination  Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.

     E. DEFAULT RATE.  Upon the  occurrence and during the  continuation  of any
Event of  Default,  the  outstanding  principal  amount of all Loans and, to the
extent permitted by applicable law, any interest  payments thereon not paid when
due and any  fees  and  other  amounts  then due and  payable  hereunder,  shall
thereafter  bear interest  (including  post-petition  interest in any proceeding
under the  Bankruptcy  Code or other  applicable  bankruptcy  laws) payable upon
demand at a rate that is 2% per annum in excess of the interest  rate  otherwise
payable under this Agreement  with respect to the  applicable  Loans (or, in the
case of any such  fees and  other  amounts,  at a rate  which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans that are Tranche B Term Loans);  provided  that, in the case of Eurodollar
Rate Loans, upon the expiration of the Interest Period in effect at the time any
such increase in interest  rate is effective  such  Eurodollar  Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable upon
demand at a rate which is 2% per annum in excess of the interest rate  otherwise
payable under this  Agreement for Base Rate Loans.  Payment or acceptance of the
increased  rates  of  interest  provided  for in this  subsection  2.2E is not a
permitted alternative to timely payment and shall not constitute a waiver of any
Event of Default or  otherwise  prejudice or limit any rights or remedies of any
Agent or any Lender.

     F. COMPUTATION OF INTEREST.  Interest on the Loans shall be computed (i) in
the case of Base Rate Loans,  on the basis of a 365-day or 366-day  year, as the
case may be, and (ii) in the case of  Eurodollar  Rate Loans,  on the basis of a
360-day  year,  in each case for the actual number of days elapsed in the period
during  which it accrues.  In  computing  interest on any Loan,  the date of the
making of such Loan or the first day of an Interest  Period  applicable  to such
Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate
Loan,  the date of  conversion  of such  Eurodollar  Rate Loan to such Base Rate
Loan,  as the case may be,  shall be  included,  and the date of payment of such
Loan or the expiration  date of an Interest  Period  applicable to such Loan or,
with respect to a Base Rate Loan being  converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such  Eurodollar  Rate Loan, as the
case may be,  shall be excluded;  provided  that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.

2.3  FEES.

     A. COMMITMENT  FEES.  Company agrees to pay to  Administrative  Agent,  for
distribution  to each  Lender in  proportion  to that  Lender's  Pro Rata Share,
commitment  fees for the  period  from and  including  the  Closing  Date to and
excluding the Revolving Loan Commitment Termination Date equal to the average of
the daily excess of the Revolving Loan Commitments over the aggregate  principal
amount of outstanding  Revolving Loans (but not including any outstanding  Swing
Line Loans or the Letter of Credit Usage)  multiplied  by 0.50% per annum,  such
commitment  fees to be  calculated on the basis of a 360-day year and the actual
number of days elapsed and to be payable quarterly in arrears on the last day of
each March, June,  September and December of each year,  commencing on the first
such date to occur after the Closing Date, and on the Revolving Loan  Commitment
Termination Date.

     B.   OTHER FEES.  Company agrees to pay to Arranger and
Administrative Agent such other fees in the amounts and at the
times separately agreed upon between Company and
Administrative Agent and Arranger.

2.4  REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN
     COMMITMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.

     A.   SCHEDULED PAYMENTS OF TRANCHE A TERM LOANS AND
TRANCHE B TERM LOANS.

          (i)  Scheduled Payments of Tranche A Term Loans.
     Company shall make principal payments on the Tranche A
     Term Loans in installments on the dates and in the
     amounts set forth below:

                                    Scheduled Repayment
         Date                          of Term Loans

        July 15, 1997                  $1,000,000
        October 15, 1997               $1,000,000
        January 15, 1998               $1,000,000
        April 15, 1998                 $1,000,000
        July 15, 1998                  $1,000,000
        October 15, 1998               $1,000,000
        January 15, 1999               $1,000,000
        April 15, 1999                 $1,000,000
        July 15, 1999                  $1,000,000
        October 15, 1999               $1,000,000
        January 15, 2000               $1,000,000
        April 15, 2000                 $1,000,000
        July 15, 2000                  $1,000,000
        October 15, 2000               $1,000,000
        January 15, 2001               $1,000,000
        April 15, 2001                 $1,000,000
        July 15, 2001                  $1,000,000
        October 15, 2001               $1,000,000
        January 15, 2002               $1,000,000
        April 15, 2002                 $1,000,000
                  Total               $20,000,000


     ; provided  that the scheduled  installments  of principal of the Tranche A
     Term  Loans  set  forth  above  shall be  reduced  in  connection  with any
     voluntary  or  mandatory  prepayments  of  the  Tranche  A  Term  Loans  in
     accordance with subsection 2.4B(iv); and provided, further that the Tranche
     A Term  Loans and all other  amounts  owed  hereunder  with  respect to the
     Tranche A Term Loans  shall be paid in full no later  than April 15,  2002,
     and the final  installment  payable by Company in respect of the  Tranche A
     Term Loans on such date shall be in an amount,  if such amount is different
     from that specified above, sufficient to repay all amounts owing by Company
     under this Agreement with respect to the Tranche A Term Loans.

          (ii)      Scheduled Payments of Tranche B Term Loans.
     Company shall make principal payments on the Tranche B
     Term Loans in installments on the dates and in the
     amounts set forth below:

                                    Scheduled Repayment
         Date                     of Tranche B Term Loans

        July 15, 1997                    $137,500
        October 15, 1997                 $137,500
        January 15, 1998                 $137,500
        April 15, 1998                   $137,500
        July 15, 1998                    $137,500
        October 15, 1998                 $137,500
        January 15, 1999                 $137,500
        April 15, 1999                   $137,500
        July 15, 1999                    $137,500
        October 15, 1999                 $137,500
        January 15, 2000                 $137,500
        April 15, 2000                   $137,500
        July 15, 2000                    $137,500
        October 15, 2000                 $137,500
        January 15, 2001                 $137,500
        April 15, 2001                   $137,500
        July 15, 2001                    $137,500
        October 15, 2001                 $137,500
        January 15, 2002                 $137,500
        April 15, 2002                   $137,500
        July 15, 2002                  $6,531,250
        October 15, 2002               $6,531,250
        January 15, 2003               $6,531,250
        April 15, 2003                 $6,531,250
        July 15, 2003                  $6,531,250
        October 15, 2003               $6,531,250
        January 15, 2004               $6,531,250
        April 15, 2004                 $6,531,250
                  Total               $55,000,000


     ; provided  that the scheduled  installments  of principal of the Tranche B
     Term  Loans  set  forth  above  shall be  reduced  in  connection  with any
     voluntary  or  mandatory  prepayments  of  the  Tranche  B  Term  Loans  in
     accordance with subsection 2.4B(iv); and provided, further that the Tranche
     B Term  Loans and all other  amounts  owed  hereunder  with  respect to the
     Tranche B Term Loans  shall be paid in full no later  than April 15,  2004,
     and the final  installment  payable by Company in respect of the  Tranche B
     Term Loans on such date shall be in an amount,  if such amount is different
     from that specified above, sufficient to repay all amounts owing by Company
     under this Agreement with respect to the Tranche B Term Loans.

     B.   PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING
LOAN COMMITMENTS.

          (i)  Voluntary  Prepayments.  Company may,  upon written or telephonic
     notice  to  Administrative  Agent on or prior to 12:00  Noon (New York City
     time) on the date of  prepayment,  which notice,  if  telephonic,  shall be
     promptly confirmed in writing, at any time and from time to time prepay any
     Swing  Line Loan on any  Business  Day in whole or in part in an  aggregate
     minimum amount of $500,000 and integral  multiples of $100,000 in excess of
     that  amount.  Company  may,  upon not less than one  Business  Day's prior
     written or  telephonic  notice,  in the case of Base Rate Loans,  and three
     Business  Days'  prior  written  or  telephonic  notice,  in  the  case  of
     Eurodollar Rate Loans, in each case given to Administrative  Agent by 12:00
     Noon (New York City time) on the date  required and, if given by telephone,
     promptly  confirmed  in writing to  Administrative  Agent  (which  original
     written or telephonic notice Administrative Agent will promptly transmit by
     telefacsimile  or telephone to each  Lender),  at any time and from time to
     time prepay any Term Loans or Revolving  Loans on any Business Day in whole
     or in  part  in an  aggregate  minimum  amount  of  $500,000  and  integral
     multiples of $100,000 in excess of that amount;  provided,  however, that a
     Eurodollar  Rate Loan may only be prepaid on the expiration of the Interest
     Period applicable thereto unless Company complies with subsection 2.6D with
     respect to any breakage costs resulting from such prepayment  being made on
     a date prior to the expiration of the applicable Interest Period. Notice of
     prepayment  having been given as  aforesaid,  the  principal  amount of the
     Loans  specified  in  such  notice  shall  become  due and  payable  on the
     prepayment date specified therein.  Any such voluntary  prepayment shall be
     applied as specified in subsection 2.4B(iv).

          (ii) Voluntary Reductions of Revolving Loan Commitments.  Company may,
     upon not less than three Business Days' prior written or telephonic  notice
     confirmed in writing to  Administrative  Agent (which  original  written or
     telephonic   notice   Administrative   Agent  will  promptly   transmit  by
     telefacsimile  or telephone to each  Lender),  at any time and from time to
     time terminate in whole or permanently  reduce in part,  without premium or
     penalty,  the Revolving  Loan  Commitments in an amount up to the amount by
     which the  Revolving  Loan  Commitments  exceed  the Total  Utilization  of
     Revolving  Loan  Commitments  at the time of such proposed  termination  or
     reduction;  provided that any such partial  reduction of the Revolving Loan
     Commitments  shall  be in an  aggregate  minimum  amount  of  $500,000  and
     integral  multiples of $100,000 in excess of that amount.  Company's notice
     to Administrative Agent shall designate the date (which shall be a Business
     Day)  of such  termination  or  reduction  and the  amount  of any  partial
     reduction,  and  such  termination  or  reduction  of  the  Revolving  Loan
     Commitments  shall be effective on the date  specified in Company's  notice
     and  shall   reduce  the   Revolving   Loan   Commitment   of  each  Lender
     proportionately to its Pro Rata Share.

          (iii) Mandatory Prepayments and Mandatory Reductions of Revolving Loan
     Commitments.   The  Loans  shall  be  prepaid  and/or  the  Revolving  Loan
     Commitments  shall be  permanently  reduced  in the  amounts  and under the
     circumstances set forth below, all such prepayments and/or reductions to be
     applied as set forth below or as more  specifically  provided in subsection
     2.4B(iv):

               (a) Prepayments  and Reductions From Net Asset Sale Proceeds.  No
          later than the first  Business  Day  following  the date of receipt by
          Company or any of its  Subsidiaries  of any Net Asset Sale Proceeds in
          respect of any Asset Sale,  Company  shall prepay the Loans and/or the
          Revolving  Loan  Commitments  shall  be  permanently   reduced  in  an
          aggregate amount equal to such Net Asset Sale Proceeds.

               (b) Prepayments  and Reductions  from Net  Insurance/Condemnation
          Proceeds.  No later than the first  Business Day following the date of
          receipt  by  Administrative   Agent  or  by  Company  or  any  of  its
          Subsidiaries of any Net Insurance/Condemnation Proceeds, Company shall
          prepay  the Loans  and/or  the  Revolving  Loan  Commitments  shall be
          permanently reduced in an aggregate amount equal to the amount of such
          Net Insurance/Condemnation  Proceeds;  provided, however, that no such
          prepayment  shall be required to the extent (i) under the terms of any
          lease or other  agreement  existing  on the date  hereof to the extent
          such Net  Insurance/Condemnation  Proceeds  are required to be used to
          replace, rebuild or repair the asset so damaged, destroyed or taken or
          (ii) Company  determines  to utilize  such Net  Insurance/Condemnation
          Proceeds to replace, rebuild or repair the asset damaged, destroyed or
          taken,  and in each case so utilizes  such Net  Insurance/Condemnation
          Proceeds within 18 months of the receipt thereof.

               (c) Prepayments and Reductions Due to Reversion of Surplus Assets
          of  Pension  Plans.  On the date of  return to  Company  or any of its
          Subsidiaries  of any surplus  assets of any pension plan of Company or
          any of its  Subsidiaries,  Company  shall  prepay the Loans and/or the
          Revolving  Loan  Commitments  shall  be  permanently   reduced  in  an
          aggregate amount (such amount being the "NET PENSION  PROCEEDS") equal
          to 100% of such returned surplus assets,  net of transaction costs and
          expenses  incurred in  obtaining  such return,  including  incremental
          taxes payable as a result thereof.

               (d)  Prepayments and Reductions Due to Issuance of Debt or Equity
          Securities.  On the date of receipt  by  Company of the Cash  proceeds
          (any such proceeds,  net of underwriting discounts and commissions and
          other reasonable costs and expenses  associated  therewith,  including
          reasonable legal fees and expenses,  being "NET SECURITIES  PROCEEDS")
          from the issuance of debt or equity  Securities  of Company  after the
          Closing Date, Company shall prepay the Loans and/or the Revolving Loan
          Commitments shall be permanently  reduced in an aggregate amount equal
          to such Net Securities Proceeds.

               (e)  Prepayments  and Reductions  from  Consolidated  Excess Cash
          Flow. In the event that there shall be  Consolidated  Excess Cash Flow
          for any  Fiscal  Year  (commencing  with  the  Fiscal  Year  beginning
          December 31, 1996), Company shall, no later than 90 days after the end
          of such  Fiscal  Year,  prepay  the Loans  and/or the  Revolving  Loan
          Commitments shall be permanently  reduced in an aggregate amount equal
          to 75% of such Consolidated Excess Cash Flow.

               (f) Prepayments and Reductions from Amounts in Escrow Account. In
          the event that there are any amounts on deposit in the Escrow  Account
          on November 16, 1997, at the time any of the  conditions  set forth in
          subsection 6.11(2) shall not have been satisfied, Company shall prepay
          the Loans in an amount  equal to the  amount on  deposit in the Escrow
          Account.

               (g) Calculations of Net Proceeds Amounts;  Additional Prepayments
          and Reductions Based on Subsequent Calculations. Concurrently with any
          prepayment  of  the  Loans  and/or  reduction  of the  Revolving  Loan
          Commitments  pursuant to subsections  2.4B(iii)(a)-(f),  Company shall
          deliver  to  Agents  an  Officer's   Certificate   demonstrating   the
          calculation  of  the  amount  (the  "NET  PROCEEDS   AMOUNT")  of  the
          applicable  Net  Asset  Sale  Proceeds  or Net  Insurance/Condemnation
          Proceeds,  the  applicable  Net  Pension  Proceeds  or Net  Securities
          Proceeds (as such terms are defined in  subsections  2.4B(iii)(c)  and
          (d), the applicable Consolidated Excess Cash Flow or the amount in the
          Escrow Account,  as the case may be, that gave rise to such prepayment
          and/or  reduction.  In  the  event  that  Company  shall  subsequently
          determine  that the actual Net  Proceeds  Amount was greater  than the
          amount set forth in such Officer's Certificate, Company shall promptly
          make an additional prepayment of the Loans (and/or, if applicable, the
          Revolving Loan Commitments shall be permanently  reduced) in an amount
          equal to the amount of such  excess,  and Company  shall  concurrently
          therewith deliver to Agents an Officer's Certificate demonstrating the
          derivation of the  additional  Net Proceeds  Amount  resulting in such
          excess.

               (h)  Prepayments  Due to Reductions or  Restrictions of Revolving
          Loan  Commitments.  Company  shall from time to time prepay  first the
          Swing  Line  Loans  and  second  the  Revolving  Loans  to the  extent
          necessary  (1)  so  that  the  Total  Utilization  of  Revolving  Loan
          Commitments   shall  not  at  any  time  exceed  the  Revolving   Loan
          Commitments  then in effect and (2) to give effect to the  limitations
          set  forth  in  clause  (b)  of the  second  paragraph  of  subsection
          2.1A(iii)  and  clause  (b)  of the  second  paragraph  of  subsection
          2.1A(iv).

          (iv)      Application of Prepayments.

               (a)  Application  of Voluntary  Prepayments  by Type of Loans and
          Order of Maturity.  Any voluntary  prepayments  pursuant to subsection
          2.4B(i)  shall be applied as  specified  by Company in the  applicable
          notice of  prepayment;  provided  that in the event  Company  fails to
          specify the Loans to which any such prepayment shall be applied,  such
          prepayment  shall be  applied  first to repay  outstanding  Swing Line
          Loans to the full extent  thereof,  second to repay  outstanding  Term
          Loans to the  full  extent  thereof,  and  third to repay  outstanding
          Revolving Loans to the full extent thereof. Any voluntary  prepayments
          of  the  Term  Loans  pursuant  to  subsection  2.4B(i)  (whether  the
          application  thereof is  specified by Company or not) shall be applied
          to prepay the  Tranche A Term Loans and the  Tranche B Term Loans on a
          pro  rata  basis  (in  accordance  with  the  respective   outstanding
          principal amounts thereof) and to reduce the scheduled installments of
          principal  of the  Tranche A Term  Loans and  Tranche B Term Loans set
          forth in subsection 2.4A(i) and 2.4A(ii) in inverse order of maturity.

               (b)  Application of Mandatory  Prepayments by Type of Loans.  Any
          amount (the  "APPLIED  AMOUNT")  required to be applied as a mandatory
          prepayment  of the Loans  and/or a  reduction  of the  Revolving  Loan
          Commitments pursuant to subsections  2.4B(iii)(a)-(g) shall be applied
          first to prepay the Term Loans to the full extent thereof,  second, to
          the extent of any remaining  portion of the Applied Amount,  to prepay
          the Swing Line Loans to the full  extent  thereof  and to  permanently
          reduce  the  Revolving   Loan   Commitments  by  the  amount  of  such
          prepayment,  third,  to the  extent of any  remaining  portion  of the
          Applied  Amount,  to prepay  the  Revolving  Loans to the full  extent
          thereof  and  to  further   permanently   reduce  the  Revolving  Loan
          Commitments  by the  amount of such  prepayment,  and  fourth,  to the
          extent of any  remaining  portion of the  Applied  Amount,  to further
          permanently  reduce the Revolving Loan  Commitments to the full extent
          thereof.

               (c) Application of Mandatory Prepayments of Term Loans to Tranche
          A Term Loans and Tranche B Term Loans and the  Scheduled  Installments
          of Principal  Thereof.  Any  mandatory  prepayments  of the Term Loans
          pursuant  to  subsection  2.4B(iii)  shall be  applied  to prepay  the
          Tranche A Term Loans and the  Tranche B Term Loans on a pro rata basis
          (in  accordance  with the  respective  outstanding  principal  amounts
          thereof) and to reduce the scheduled  installments of principal of the
          Tranche A Term Loans and Tranche B Term Loans set forth in  subsection
          2.4A(i) and 2.4A(ii) in inverse order of maturity. Notwithstanding the
          foregoing,  in the case of any mandatory prepayment of the Term Loans,
          if any Tranche A Term Loans are outstanding  following  application of
          the  mandatory  prepayment,  Company may elect to offer the Lenders of
          the  Tranche B Term Loans the option to waive the right to receive the
          amount of such  mandatory  prepayment  of such Tranche B Term Loans to
          the extent the amount of the  outstanding  Tranche A Term Loans equals
          or exceeds the amount of the  prepayment  of the Tranche B Term Loans.
          If any  Lender or  Lenders  elect to waive the  right to  receive  the
          amount of such mandatory  prepayment,  the amount that otherwise would
          have been  applied to  mandatorily  prepay the Tranche B Term Loans of
          such  Lender  or  Lenders  shall be  applied  instead  to the  further
          prepayment of the Tranche A Term Loans.

               (d)  Application of Prepayments to Base Rate Loans and Eurodollar
          Rate Loans. Considering Tranche A Term Loans, Tranche B Term Loans and
          Revolving Loans being prepaid separately, any prepayment thereof shall
          be applied first to Base Rate Loans to the full extent  thereof before
          application to Eurodollar  Rate Loans,  in each case in a manner which
          minimizes  the amount of any  payments  required to be made by Company
          pursuant to subsection 2.6D.

     C.   GENERAL PROVISIONS REGARDING PAYMENTS.

          (i) Manner and Time of Payment.  All payments by Company of principal,
     interest, fees and other Obligations hereunder and under the Notes shall be
     made in Dollars in same day funds, without defense, setoff or counterclaim,
     free of any restriction or condition, and delivered to Administrative Agent
     not later  than  12:00  Noon  (New  York City  time) on the date due at the
     Funding and Payment  Office for the account of Lenders;  funds  received by
     Administrative  Agent  after  that time on such due date shall be deemed to
     have been paid by  Company on the next  succeeding  Business  Day.  Company
     hereby  authorizes   Administrative  Agent  to  charge  its  accounts  with
     Administrative  Agent  in  order  to  cause  timely  payment  to be made to
     Administrative  Agent of all  principal,  interest,  fees and  expenses due
     hereunder  (subject to sufficient funds being available in its accounts for
     that purpose).

          (ii)  Application  of Payments to Principal  and  Interest.  Except as
     provided in  subsection  2.2C,  all  payments  in respect of the  principal
     amount  of any Loan  shall  include  payment  of  accrued  interest  on the
     principal  amount being repaid or prepaid,  and all such payments  (and, in
     any event,  any payments in respect of any Loan on a date when  interest is
     due and payable  with respect to such Loan) shall be applied to the payment
     of interest before application to principal.

          (iii)  Apportionment  of Payments.  Aggregate  principal  and interest
     payments in respect of Term Loans and Revolving  Loans shall be apportioned
     among all  outstanding  Loans to which such payments  relate,  in each case
     proportionately  to Lenders'  respective  Pro Rata  Shares.  Administrative
     Agent shall promptly  distribute to each Lender, at its primary address set
     forth below its name on the  appropriate  signature  page hereof or at such
     other  address as such Lender may  request,  its Pro Rata Share of all such
     payments received by  Administrative  Agent and the commitment fees of such
     Lender when received by  Administrative  Agent pursuant to subsection  2.3.
     Notwithstanding the foregoing provisions of this subsection 2.4C(iii),  if,
     pursuant   to  the   provisions   of   subsection   2.6C,   any  Notice  of
     Conversion/Continuation  is withdrawn  as to any Affected  Lender or if any
     Affected  Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
     Eurodollar  Rate Loans,  Administrative  Agent shall give effect thereto in
     apportioning payments received thereafter.

          (iv)  Payments  on  Business  Days.  Whenever  any  payment to be made
     hereunder  shall be stated to be due on a day that is not a  Business  Day,
     such  payment  shall be made on the next  succeeding  Business Day and such
     extension  of time shall be included in the  computation  of the payment of
     interest hereunder or of the commitment fees hereunder, as the case may be.

          (v) Notation of Payment.  Each Lender agrees that before  disposing of
     any  Note  held  by  it,  or any  part  thereof  (other  than  by  granting
     participations  therein),  that Lender will make a notation  thereon of all
     Loans  evidenced by that Note and all principal  payments  previously  made
     thereon and of the date to which interest  thereon has been paid;  provided
     that the  failure to make (or any error in the making of) a notation of any
     Loan  made  under  such  Note  shall  not  limit or  otherwise  affect  the
     obligations  of Company  hereunder  or under such Note with  respect to any
     Loan or any payments of principal or interest on such Note.

     D.   APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS
UNDER GUARANTIES

          (i)  Application  of  Proceeds  of  Collateral.  Except as provided in
     subsection  2.4B(iii)(a)  with respect to  prepayments  from Net Asset Sale
     Proceeds,  all proceeds received by Administrative  Agent in respect of any
     sale of,  collection from, or other realization upon all or any part of the
     Collateral  under  any  Collateral  Document  may,  in  the  discretion  of
     Administrative  Agent, be held by  Administrative  Agent as Collateral for,
     and/or  (then  or at any  time  thereafter)  applied  in full or in part by
     Administrative  Agent  against,  the  applicable  Secured  Obligations  (as
     defined in such Collateral Document) in the following order of priority:

               (a) To the  payment  of all  costs  and  expenses  of such  sale,
          collection or other realization,  including reasonable compensation to
          Administrative  Agent  and its  agents  and  counsel,  and  all  other
          expenses,  liabilities and advances made or incurred by Administrative
          Agent  in   connection   therewith,   and  all   amounts   for   which
          Administrative  Agent  is  entitled  to  indemnification   under  such
          Collateral  Document and all  advances  made by  Administrative  Agent
          thereunder  for the account of the applicable  Loan Party,  and to the
          payment of all costs and expenses  paid or incurred by  Administrative
          Agent in  connection  with the  exercise of any right or remedy  under
          such  Collateral  Document,  all in accordance  with the terms of this
          Agreement and such Collateral Document;

               (b) thereafter, to the extent of any excess such proceeds, to the
          payment of all other such Secured  Obligations for the ratable benefit
          of the holders thereof; and

               (c) thereafter, to the extent of any excess such proceeds, to the
          payment to or upon the order of such Loan Party or to whosoever may be
          lawfully  entitled  to  receive  the same or as a court  of  competent
          jurisdiction may direct.

          (ii)      Application of Payments Under Guaranties.
     All payments received by Administrative Agent under any
     of the Guaranties shall be applied promptly from time to
     time by Administrative Agent in the following order of
     priority:

               (a) To the payment of the costs and expenses of any collection or
          other  realization under any of the Guaranties,  including  reasonable
          compensation to Administrative  Agent and its agents and counsel,  and
          all   expenses,   liabilities   and  advances   made  or  incurred  by
          Administrative Agent in connection  therewith,  all in accordance with
          the terms of this Agreement and such Guaranty;

               (b) thereafter, to the extent of any excess such payments, to the
          payment  of all  other  Guarantied  Obligations  (as  defined  in such
          Guaranty) for the ratable benefit of the holders thereof; and

                 thereafter,  to the extent of any excess such payments,  to the
          payment  to the  applicable  Subsidiary  Guarantor  or the  applicable
          Affiliated  Stockholder  or to whosoever  may be lawfully  entitled to
          receive the same or as a court of competent
          jurisdiction may direct.

2.5  USE OF PROCEEDS.

     A. TERM LOANS.  The proceeds of the Term Loans,  together  with other funds
available  to Company,  shall be applied by Company to  refinance  approximately
$75,585,000 of senior indebtedness under the Existing Credit Agreement, and (ii)
to pay fees and  expenses  incurred in  connection  with the  Refinancing  in an
aggregate maximum amount of $3,500,000.

     B.   REVOLVING LOANS; SWING LINE LOANS.  The proceeds of
the Revolving Loans and any Swing Line Loans shall be applied
by Company for general corporate purposes.

     C. MARGIN  REGULATIONS.  No portion of the proceeds of any borrowing  under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the  borrowing or the  application  of such proceeds to violate
Regulation  G,  Regulation  U,  Regulation  T or  Regulation  X of the  Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the  Exchange  Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.

2.6  SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

          Notwithstanding any other provision of this Agreement to the contrary,
the following  provisions  shall govern with respect to Eurodollar Rate Loans as
to the matters covered:

        DETERMINATION OF APPLICABLE  INTEREST RATE. As soon as practicable after
10:00  A.M.  (New York City  time) on each  Interest  Rate  Determination  Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall  apply to the  Eurodollar  Rate Loans for which an  interest  rate is then
being  determined  for the  applicable  Interest  Period and shall promptly give
notice thereof (in writing or by telephone  confirmed in writing) to Company and
each Lender.

     B.  INABILITY  TO DETERMINE  APPLICABLE  INTEREST  RATE.  In the event that
Administrative  Agent shall have determined (which  determination shall be final
and  conclusive  and binding  upon all parties  hereto),  on any  Interest  Rate
Determination  Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances  affecting the London  interbank market adequate and fair means do
not exist for  ascertaining  the interest  rate  applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender of such  determination,  whereupon (i) no
Loans may be made as, or converted to,  Eurodollar Rate Loans until such time as
Administrative  Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer  exist and (ii) any Notice of  Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.

     C.  ILLEGALITY OR  IMPRACTICABILITY  OF EURODOLLAR RATE LOANS. In the event
that on any date any Lender shall have determined (which  determination shall be
final and  conclusive and binding upon all parties hereto but shall be made only
after  consultation  with  Company  and  Administrative  Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful
as a result of  compliance  by such  Lender in good faith with any law,  treaty,
governmental  rule,  regulation,  guideline or order (or would conflict with any
such treaty,  governmental rule,  regulation,  guideline or order not having the
force of law even though the failure to comply  therewith would not be unlawful)
or (ii) has become impracticable,  or would cause such Lender material hardship,
as a result of  contingencies  occurring  after the date of this Agreement which
materially and adversely  affect the London  interbank market or the position of
such Lender in that market, then, and in any such event, such Lender shall be an
"AFFECTED  LENDER" and it shall on that day give notice (by  telefacsimile or by
telephone  confirmed  in writing) to Company  and  Administrative  Agent of such
determination (which notice Administrative Agent shall promptly transmit to each
other  Lender).  Thereafter  (a) the  obligation of the Affected  Lender to make
Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until
such notice shall be withdrawn  by the Affected  Lender,  (b) to the extent such
determination  by the Affected  Lender  relates to a  Eurodollar  Rate Loan then
being  requested  by Company  pursuant to a Notice of  Borrowing  or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan,  (c) the  Affected  Lender's
obligation  to maintain its  outstanding  Eurodollar  Rate Loans (the  "AFFECTED
LOANS")  shall be  terminated  at the earlier to occur of the  expiration of the
Interest  Period  then in effect  with  respect  to the  Affected  Loans or when
required by law, and (d) the  Affected  Loans shall  automatically  convert into
Base Rate Loans on the date of such termination.  Notwithstanding the foregoing,
to the extent a  determination  by an Affected Lender as described above relates
to a Eurodollar Rate Loan then being  requested by Company  pursuant to a Notice
of  Borrowing  or a Notice of  Conversion/Continuation,  Company  shall have the
option,  subject to the provisions of subsection 2.6D, to rescind such Notice of
Borrowing  or  Notice of  Conversion/Continuation  as to all  Lenders  by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such  rescission on the date on which the Affected  Lender gives notice
of  its   determination   as  described   above  (which   notice  of  rescission
Administrative  Agent shall promptly  transmit to each other Lender).  Except as
provided in the immediately preceding sentence,  nothing in this subsection 2.6C
shall affect the obligation of any Lender other than an Affected  Lender to make
or  maintain  Loans  as,  or to  convert  Loans  to,  Eurodollar  Rate  Loans in
accordance with the terms of this Agreement.

     D.  COMPENSATION  FOR  BREAKAGE OR  NON-COMMENCEMENT  OF INTEREST  PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request  shall  set  forth  the basis  for  requesting  such  amounts),  for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its  Eurodollar  Rate
Loans and any loss, expense or liability  sustained by that Lender in connection
with the  liquidation  or  re-employment  of such  funds)  which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any  Eurodollar  Rate Loan does not occur on a date  specified  therefor in a
Notice of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation  of any  Eurodollar  Rate Loan  does not occur on a date  specified
therefor  in a Notice of  Conversion/Continuation  or a  telephonic  request for
conversion or  continuation,  (ii) if any  prepayment  (including any prepayment
pursuant to subsection  2.4B(i)) or other principal payment or any conversion of
any of its  Eurodollar  Rate Loans  occurs on a date prior to the last day of an
Interest Period  applicable to that Loan,  (iii) if any prepayment of any of its
Eurodollar  Rate  Loans  is not  made  on any  date  specified  in a  notice  of
prepayment  given by Company,  or (iv) as a consequence  of any other default by
Company in the repayment of its Eurodollar Rate Loans when required by the terms
of this Agreement.

     E.   BOOKING OF EURODOLLAR RATE LOANS.  Any Lender may
make, carry or transfer Eurodollar Rate Loans at, to, or for
the account of any of its branch offices or the office of an
Affiliate of that Lender.

     F. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.  Calculation of
all amounts payable to a Lender under this  subsection 2.6 and under  subsection
2.7A  shall be made as  though  that  Lender  had  actually  funded  each of its
relevant  Eurodollar  Rate Loans  through the purchase of a  Eurodollar  deposit
bearing  interest at the rate obtained  pursuant to clause (i) of the definition
of Adjusted  Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity  comparable to the relevant  Interest Period and
through the transfer of such Eurodollar  deposit from an offshore office of that
Lender to a  domestic  office of that  Lender in the United  States of  America;
provided,  however,  that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing  assumptions  shall be utilized only
for the purposes of calculating  amounts  payable under this  subsection 2.6 and
under subsection 2.7A.

     G. EURODOLLAR RATE LOANS AFTER DEFAULT.  After the occurrence of and during
the  continuation  of a Potential  Event of Default or an Event of Default,  (i)
Company may not elect to have a Loan be made or maintained  as, or converted to,
a  Eurodollar  Rate Loan after the  expiration  of any  Interest  Period then in
effect for that Loan and (ii) subject to the provisions of subsection  2.6D, any
Notice of Borrowing or Notice of  Conversion/Continuation  given by Company with
respect to a requested  borrowing  or  conversion/continuation  that has not yet
occurred shall be deemed to be rescinded by Company.

2.7  INCREASED COSTS; TAXES; CAPITAL ADEQUACY.

     A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the provisions of
subsection 2.7B (which shall be controlling  with respect to the matters covered
thereby),  in the event that any Lender  shall  determine  (which  determination
shall,  absent  manifest  error,  be final and  conclusive  and binding upon all
parties hereto) that any law, treaty or governmental rule,  regulation or order,
or any change therein or in the  interpretation,  administration  or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any  guideline,  request or directive  issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law):

          (i) subjects  such Lender (or its  applicable  lending  office) to any
     additional  Tax  (other  than any Tax on the  overall  net  income  of such
     Lender) with respect to this Agreement or any of its obligations  hereunder
     or any  payments  to such  Lender  (or its  applicable  lending  office) of
     principal, interest, fees or any other amount payable hereunder;

          (ii) imposes,  modifies or holds applicable any reserve (including any
     marginal,  emergency,  supplemental,  special  or other  reserve),  special
     deposit,  compulsory  loan, FDIC insurance or similar  requirement  against
     assets held by, or deposits or other  liabilities in or for the account of,
     or  advances  or loans  by,  or other  credit  extended  by,  or any  other
     acquisition  of funds by, any office of such  Lender  (other  than any such
     reserve or other  requirements  with respect to Eurodollar  Rate Loans that
     are reflected in the definition of Adjusted Eurodollar Rate); or

          (iii)  imposes any other  condition  (other than with respect to a Tax
     matter) on or affecting such Lender (or its applicable  lending  office) or
     its obligations hereunder or the London interbank market;

and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make,  making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its  applicable  lending  office) with
respect  thereto;  then, in any such case,  Company  shall  promptly pay to such
Lender,  upon receipt of the statement  referred to in the next  sentence,  such
additional  amount  or  amounts  (in the  form of an  increased  rate  of,  or a
different  method of  calculating,  interest or  otherwise as such Lender in its
sole discretion  shall  determine) as may be necessary to compensate such Lender
for any such  increased  cost or  reduction  in amounts  received or  receivable
hereunder.  Such Lender shall deliver to Company (with a copy to  Administrative
Agent) a written  statement,  setting forth in  reasonable  detail the basis for
calculating  the  additional  amounts owed to such Lender under this  subsection
2.7A,  which  statement  shall be conclusive and binding upon all parties hereto
absent manifest error.

     B.   WITHHOLDING OF TAXES.

          (i) Payments to Be Free and Clear.  All sums payable by Company  under
     this  Agreement  and the other Loan  Documents  shall (except to the extent
     required by law) be paid free and clear of, and without  any  deduction  or
     withholding  on account  of, any Tax (other  than a Tax on the  overall net
     income of any Lender) imposed, levied,  collected,  withheld or assessed by
     or within the United States of America or any political  subdivision  in or
     of the United States of America or any other  jurisdiction from or to which
     a payment  is made by or on  behalf  of  Company  or by any  federation  or
     organization of which the United States of America or any such jurisdiction
     is a member at the time of payment.

          (ii)  Grossing-up  of  Payments.  If  Company  or any other  Person is
     required by law to make any deduction or withholding on account of any such
     Tax from any sum paid or payable by Company to Administrative  Agent or any
     Lender under any of the Loan Documents:

               (a)  Company  shall  notify  Administrative  Agent  of  any  such
          requirement  or any change in any such  requirement as soon as Company
          becomes aware of it;

               (b)  Company  shall  pay any  such Tax  before  the date on which
          penalties attach thereto, such payment to be made (if the liability to
          pay is imposed on Company)  for its own account or (if that  liability
          is imposed on Administrative Agent or such Lender, as the case may be)
          on behalf of and in the name of Administrative Agent or such Lender;

               (c) the sum  payable by Company in respect of which the  relevant
          deduction,  withholding  or payment is required  shall be increased to
          the  extent  necessary  to  ensure  that,  after  the  making  of that
          deduction,  withholding  or  payment,  Administrative  Agent  or  such
          Lender,  as the case may be,  receives on the due date a net sum equal
          to what it would have received had no such  deduction,  withholding or
          payment been required or made; and

               (d) within 30 days after paying any sum from which it is required
          by law to make any deduction or withholding,  and within 30 days after
          the due date of payment of any Tax which it is  required by clause (b)
          above to pay, Company shall deliver to  Administrative  Agent evidence
          satisfactory  to  the  other  affected   parties  of  such  deduction,
          withholding or payment and of the  remittance  thereof to the relevant
          taxing or other authority;

     provided that no such additional amount shall be required to be paid to any
     Lender  under  clause (c) above  except to the extent that any change after
     the date hereof (in the case of each Lender listed on the  signature  pages
     hereof) or after the date of the  Assignment  Agreement  pursuant  to which
     such Lender  became a Lender (in the case of each other Lender) in any such
     requirement for a deduction, withholding or payment as is mentioned therein
     shall result in an increase in the rate of such  deduction,  withholding or
     payment from that in effect at the date of this Agreement or at the date of
     such  Assignment  Agreement,  as the case may be, in respect of payments to
     such Lender.

          (iii)     Evidence of Exemption from U.S. Withholding
     Tax.

               (a)  Each  Lender  that  is  organized  under  the  laws  of  any
          jurisdiction  other  than  the  United  States  or any  state or other
          political   subdivision  thereof  (for  purposes  of  this  subsection
          2.7B(iii),  a "NON-US LENDER") shall deliver to  Administrative  Agent
          for  transmission to Company,  on or prior to the Closing Date (in the
          case of each Lender  listed on the  signature  pages  hereof) or on or
          prior to the date of the  Assignment  Agreement  pursuant  to which it
          becomes a Lender (in the case of each other Lender), and at such other
          times  as  may  be  necessary  in  the  determination  of  Company  or
          Administrative   Agent  (each  in  the  reasonable   exercise  of  its
          discretion),  (1) two original copies of Internal Revenue Service Form
          1001 or 4224 (or any  successor  forms),  properly  completed and duly
          executed  by such  Lender,  together  with any  other  certificate  or
          statement of exemption required under the Internal Revenue Code or the
          regulations  issued  thereunder  to establish  that such Lender is not
          subject to deduction or  withholding  of United States  federal income
          tax  with  respect  to any  payments  to  such  Lender  of  principal,
          interest,  fees  or  other  amounts  payable  under  any of  the  Loan
          Documents  or (2) if such  Lender  is not a  "bank"  or  other  Person
          described in Section 881(c)(3) of the Internal Revenue Code and cannot
          deliver either Internal  Revenue Service Form 1001 or 4224 pursuant to
          clause (1) above, a Certificate re Non-Bank  Status  together with two
          original copies of Internal Revenue Service Form W-8 (or any successor
          form),  properly completed and duly executed by such Lender,  together
          with any other  certificate  or statement of exemption  required under
          the Internal  Revenue Code or the  regulations  issued  thereunder  to
          establish  that such Lender is not subject to deduction or withholding
          of United  States  federal  income tax with respect to any payments to
          such Lender of interest payable under any of the Loan Documents.

               (b) Each Lender  required to deliver any forms,  certificates  or
          other  evidence  with  respect  to United  States  federal  income tax
          withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
          from time to time after the  initial  delivery  by such Lender of such
          forms,  certificates  or other  evidence,  whenever a lapse in time or
          change in  circumstances  renders  such forms,  certificates  or other
          evidence  obsolete or  inaccurate in any material  respect,  that such
          Lender  shall  promptly  (1)  deliver  to  Administrative   Agent  for
          transmission  to Company two new original  copies of Internal  Revenue
          Service Form 1001 or 4224, or a Certificate re Non-Bank Status and two
          original copies of Internal  Revenue Service Form W-8, as the case may
          be, properly completed and duly executed by such Lender, together with
          any other  certificate or statement of exemption  required in order to
          confirm or  establish  that such Lender is not subject to deduction or
          withholding  of United  States  federal  income  tax with  respect  to
          payments  to such  Lender  under  the  Loan  Documents  or (2)  notify
          Administrative  Agent and Company of its inability to deliver any such
          forms, certificates or other evidence.

               (c) Company shall not be required to pay any additional amount to
          any Non-US  Lender  under  clause (c) of  subsection  2.7B(ii) if such
          Lender shall have failed to satisfy the  requirements of clause (a) or
          (b)(1) of this  subsection  2.7B(iii);  provided  that if such  Lender
          shall have satisfied the  requirements  of subsection  2.7B(iii)(a) on
          the Closing Date (in the case of each Lender  listed on the  signature
          pages hereof) or on the date of the Assignment  Agreement  pursuant to
          which it became a Lender (in the case of each other  Lender),  nothing
          in  this  subsection   2.7B(iii)(c)   shall  relieve  Company  of  its
          obligation  to pay any  additional  amounts  pursuant to clause (c) of
          subsection  2.7B(ii) in the event  that,  as a result of any change in
          any applicable law, treaty or governmental rule,  regulation or order,
          or any change in the  interpretation,  administration  or  application
          thereof,  such Lender is no longer properly entitled to deliver forms,
          certificates or other evidence at a subsequent date  establishing  the
          fact that such Lender is not subject to  withholding  as  described in
          subsection 2.7B(iii)(a).

     C. CAPITAL  ADEQUACY  ADJUSTMENT.  If any Lender shall have determined that
the adoption, effectiveness,  phase-in or applicability after the date hereof of
any  law,  rule or  regulation  (or any  provision  thereof)  regarding  capital
adequacy,  or any change  therein  or in the  interpretation  or  administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration  thereof,  or compliance by any Lender
(or its  applicable  lending  office) with any  guideline,  request or directive
regarding  capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect  of  reducing  the rate of return on the  capital  of such  Lender or any
corporation  controlling  such Lender as a consequence of, or with reference to,
such  Lender's  Loans or  Commitments  or  Letters  of Credit or  participations
therein or other obligations  hereunder with respect to the Loans or the Letters
of  Credit  to a  level  below  that  which  such  Lender  or  such  controlling
corporation could have achieved but for such adoption, effectiveness,  phase-in,
applicability,  change or compliance  (taking into consideration the policies of
such Lender or such controlling  corporation  with regard to capital  adequacy),
then from time to time,  within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional  amount or amounts as will compensate such Lender
or such controlling  corporation on an after-tax basis for such reduction.  Such
Lender shall deliver to Company (with a copy to Administrative  Agent) a written
statement,  setting forth in reasonable  detail the basis of the  calculation of
such  additional  amounts,  which statement shall be conclusive and binding upon
all parties hereto absent manifest error.

2.8  OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.

          Each Lender and Issuing Lender agrees that, as promptly as practicable
after the officer of such Lender or Issuing Lender responsible for administering
the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may
be,  becomes aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected  Lender or that would entitle
such  Lender or  Issuing  Lender to receive  payments  under  subsection  2.7 or
subsection  3.6,  it will,  to the extent  not  inconsistent  with the  internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions,  use reasonable  efforts (i) to make,  issue, fund or maintain the
Commitments  of such Lender or the  affected  Loans or Letters of Credit of such
Lender or Issuing Lender through  another  lending or letter of credit office of
such Lender or Issuing  Lender,  or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable,  if as a result thereof the circumstances
which would cause such Lender to be an Affected  Lender  would cease to exist or
the  additional  amounts  which would  otherwise  be required to be paid to such
Lender or Issuing  Lender  pursuant to subsection 2.7 or subsection 3.6 would be
materially reduced and if, as determined by such Lender or Issuing Lender in its
sole discretion, the making, issuing, funding or maintaining of such Commitments
or Loans or Letters  of Credit  through  such other  lending or letter of credit
office or in accordance with such other measures,  as the case may be, would not
otherwise  materially  adversely  affect such Commitments or Loans or Letters of
Credit or the  interests of such Lender or Issuing  Lender;  provided  that such
Lender or Issuing  Lender will not be obligated to utilize such other lending or
letter of credit office pursuant to this subsection 2.8 unless Company agrees to
pay all  incremental  expenses  incurred by such  Lender or Issuing  Lender as a
result of utilizing  such other  lending or letter of credit office as described
in clause (i) above. A certificate as to the amount of any such expenses payable
by Company  pursuant to this subsection 2.8 (setting forth in reasonable  detail
the basis for requesting such amount) submitted by such Lender or Issuing Lender
to Company  (with a copy to  Administrative  Agent) shall be  conclusive  absent
manifest error.


SECTION 3.     LETTERS OF CREDIT

3.1  ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF
     PARTICIPATIONS THEREIN.

     A. LETTERS OF CREDIT.  In addition to Company  requesting that Lenders make
Revolving Loans pursuant to subsection 2.1A(iii) and that Swing Line Lender make
Swing Line Loans  pursuant  to  subsection  2.1A(iv),  Company may  request,  in
accordance  with the provisions of this subsection 3.1, from time to time during
the period from the Closing Date to but excluding the Revolving Loan  Commitment
Termination  Date,  that one or more  Lenders  issue  Letters  of Credit for the
account of Company for the purposes  specified in the  definitions of Commercial
Letters  of Credit  and  Standby  Letters  of  Credit.  Subject to the terms and
conditions  of this  Agreement  and in  reliance  upon the  representations  and
warranties of Company herein set forth, any one or more Lenders may, but (except
as  provided in  subsection  3.1B(ii))  shall not be  obligated  to,  issue such
Letters of Credit in  accordance  with the  provisions of this  subsection  3.1;
provided  that  Company  shall not request  that any Lender issue (and no Lender
shall issue):

          (i) any Letter of Credit if, after giving effect to such issuance, the
     Total  Utilization of Revolving Loan Commitments would exceed the Revolving
     Loan Commitments then in effect;

          (ii)      any Letter of Credit if, after giving
     effect to such issuance, the Letter of Credit Usage would
     exceed $10,000,000;

          (iii) any Standby  Letter of Credit  having an  expiration  date later
     than the earlier of (a) the Revolving Loan Commitment  Termination Date and
     (b) the date which is one year from the date of  issuance  of such  Standby
     Letter of Credit;  provided that the immediately preceding clause (b) shall
     not prevent  any Issuing  Lender  from  agreeing  that a Standby  Letter of
     Credit will  automatically  be extended for one or more successive  periods
     not to exceed one year each unless such Issuing Lender elects not to extend
     for any such  additional  period;  and provided,  further that such Issuing
     Lender  shall elect not to extend such  Standby  Letter of Credit if it has
     knowledge that an Event of Default has occurred and is continuing  (and has
     not been  waived  in  accordance  with  subsection  10.6) at the time  such
     Issuing Lender must elect whether or not to allow such extension;

          (iv) any  Commercial  Letter of Credit having an  expiration  date (a)
     later  than  the  earlier  of (X) the date  which  is 30 days  prior to the
     Revolving Loan  Commitment  Termination  Date and (Y) the date which is 180
     days from the date of issuance of such  Commercial  Letter of Credit or (b)
     that is otherwise  unacceptable  to the  applicable  Issuing  Lender in its
     reasonable discretion; or

          (v)  any Letter of Credit denominated in a currency
     other than Dollars.

     B.   MECHANICS OF ISSUANCE.

          (i) Notice of  Issuance.  Whenever  Company  desires the issuance of a
     Letter of  Credit,  it shall  deliver to  Administrative  Agent a Notice of
     Issuance  of Letter  of Credit  substantially  in the form of  Exhibit  III
     annexed hereto no later than 12:00 Noon (New York City time) at least three
     Business  Days (in the case of Standby  Letters of Credit) or five Business
     Days (in the case of  Commercial  Letters of Credit),  or in each case such
     shorter  period as may be agreed to by the Issuing Lender in any particular
     instance,  in  advance  of the  proposed  date of  issuance.  The Notice of
     Issuance  of  Letter of  Credit  shall  specify  (a) the  proposed  date of
     issuance  (which shall be a Business Day), (b) whether the Letter of Credit
     is to be a Standby Letter of Credit or a Commercial  Letter of Credit,  (c)
     the face  amount of the Letter of Credit,  (d) the  expiration  date of the
     Letter of  Credit,  (e) the name and  address of the  beneficiary,  and (f)
     either the verbatim  text of the proposed  Letter of Credit or the proposed
     terms  and  conditions  thereof,  including  a precise  description  of any
     documents  to be presented by the  beneficiary  which,  if presented by the
     beneficiary  prior to the  expiration  date of the Letter of Credit,  would
     require  the  Issuing  Lender to make  payment  under the Letter of Credit;
     provided that the Issuing Lender, in its reasonable discretion, may require
     changes in the text of the proposed Letter of Credit or any such documents;
     and  provided,  further  that no  Letter of Credit  shall  require  payment
     against a conforming  draft to be made  thereunder on the same business day
     (under  the laws of the  jurisdiction  in which the  office of the  Issuing
     Lender to which such draft is required  to be  presented  is located)  that
     such draft is presented if such  presentation  is made after 10:00 A.M. (in
     the time zone of such office of the Issuing Lender) on such business day.

               Company  shall  notify  the   applicable   Issuing   Lender  (and
     Administrative  Agent, if Administrative  Agent is not such Issuing Lender)
     prior to the  issuance of any Letter of Credit in the event that any of the
     matters to which Company is required to certify in the applicable Notice of
     Issuance  of  Letter of Credit  is no  longer  true and  correct  as of the
     proposed  date of issuance of such Letter of Credit,  and upon the issuance
     of any Letter of Credit Company shall be deemed to have re-certified, as of
     the date of such  issuance,  as to the matters to which Company is required
     to certify in the applicable Notice of Issuance of Letter of Credit.

          (ii)  Determination of Issuing Lender.  Upon receipt by Administrative
     Agent of a Notice of  Issuance of Letter of Credit  pursuant to  subsection
     3.1B(i)  requesting  the  issuance  of a Letter  of  Credit,  in the  event
     Administrative Agent elects to issue such Letter of Credit,  Administrative
     Agent shall promptly so notify Company,  and Administrative  Agent shall be
     the Issuing Lender with respect thereto.  In the event that  Administrative
     Agent, in its sole  discretion,  elects not to issue such Letter of Credit,
     Administrative  Agent shall promptly so notify Company,  whereupon  Company
     may request any other  Lender to issue such Letter of Credit by  delivering
     to such  Lender a copy of the  applicable  Notice of  Issuance of Letter of
     Credit.  Any  Lender so  requested  to issue  such  Letter of Credit  shall
     promptly  notify  Company and  Administrative  Agent whether or not, in its
     sole  discretion,  it has elected to issue such  Letter of Credit,  and any
     such  Lender  which so elects to issue such  Letter of Credit  shall be the
     Issuing  Lender with respect  thereto.  In the event that all other Lenders
     shall have  declined  to issue such Letter of Credit,  notwithstanding  the
     prior election of Administrative  Agent not to issue such Letter of Credit,
     Administrative  Agent shall be obligated to issue such Letter of Credit and
     shall be the Issuing Lender with respect thereto,  notwithstanding the fact
     that the Letter of Credit  Usage with  respect to such Letter of Credit and
     with respect to all other Letters of Credit issued by Administrative Agent,
     when aggregated with Administrative Agent's outstanding Revolving Loans and
     Swing  Line  Loans,  may  exceed  Administrative   Agent's  Revolving  Loan
     Commitment then in effect.

          (iii) Issuance of Letter of Credit.  Upon  satisfaction  or waiver (in
     accordance with subsection  10.6) of the conditions set forth in subsection
     4.3,  the  Issuing  Lender  shall issue the  requested  Letter of Credit in
     accordance with the Issuing Lender's standard operating procedures.

          (iv)  Notification  to  Lenders.  Upon the  issuance  of any Letter of
     Credit the applicable  Issuing Lender shall promptly notify  Administrative
     Agent  and each  other  Lender  of such  issuance,  which  notice  shall be
     accompanied  by a copy of such Letter of Credit.  Promptly after receipt of
     such notice (or, if  Administrative  Agent is the Issuing Lender,  together
     with such  notice),  Administrative  Agent shall  notify each Lender of the
     amount of such Lender's respective  participation in such Letter of Credit,
     determined in accordance with subsection 3.1C.

          (v) Reports to Lenders.  Within 15 days after the end of each calendar
     quarter  ending  after the  Closing  Date,  so long as any Letter of Credit
     shall have been  outstanding  during such  calendar  quarter,  each Issuing
     Lender shall  deliver to each other Lender a report  setting forth for such
     calendar quarter the daily aggregate amount available to be drawn under the
     Letters  of Credit  issued by such  Issuing  Lender  that were  outstanding
     during such calendar quarter.

     C. LENDERS' PURCHASE OF  PARTICIPATIONS  IN LETTERS OF CREDIT.  Immediately
upon the issuance of each Letter of Credit,  each Lender shall be deemed to, and
hereby  agrees  to,  have  irrevocably  purchased  from  the  Issuing  Lender  a
participation in such Letter of Credit and any drawings honored thereunder in an
amount equal to such  Lender's Pro Rata Share of the maximum  amount which is or
at any time may become available to be drawn thereunder.

3.2  LETTER OF CREDIT FEES.

          Company agrees to pay the following amounts with respect to Letters of
Credit issued hereunder:

          (i) with respect to each Standby Letter of Credit, (a) a fronting fee,
     payable  directly to the  applicable  Issuing  Lender for its own  account,
     equal to 0.25% per annum of the daily  amount  available  to be drawn under
     such  Standby  Letter of Credit and (b) a letter of credit fee,  payable to
     Administrative  Agent for the account of Lenders,  equal to 3.00% per annum
     minus  the  Applicable  Pricing  Discount,  if  any,  of the  daily  amount
     available  to be drawn  under  such  Standby  Letter of  Credit,  each such
     fronting  fee or letter of credit  fee to be  payable  in arrears on and to
     (but excluding) the last day of each March, June, September and December of
     each year and computed on the basis of a 360-day year for the actual number
     of days elapsed;

          (ii) with respect to each Commercial Letter of Credit,  (a) a fronting
     fee, payable directly to the applicable Issuing Lender for its own account,
     equal to 0.25% per annum of the daily  amount  available  to be drawn under
     such Commercial Letter of Credit and (b) a letter of credit fee, payable to
     Administrative  Agent for the account of Lenders,  equal to 1.75% per annum
     minus  the  Applicable  Pricing  Discount,  if  any,  of the  daily  amount
     available  to be drawn under such  Commercial  Letter of Credit,  each such
     fronting  fee or letter of credit  fee to be  payable  in arrears on and to
     (but excluding) the last day of each March, June, September and December of
     each year and computed on the basis of a 360-day year for the actual number
     of days elapsed; and

          (iii) with  respect to the  issuance,  amendment  or  transfer of each
     Letter of Credit and each  payment of a drawing  made  thereunder  (without
     duplication  of the  fees  payable  under  clauses  (i)  and  (ii)  above),
     documentary  and  processing  charges  payable  directly to the  applicable
     Issuing Lender for its own account in accordance with such Issuing Lender's
     standard  schedule for such charges in effect at the time of such issuance,
     amendment, transfer or payment, as the case may be.

For purposes of calculating  any fees payable under clauses (i) and (ii) of this
subsection  3.2,  the daily  amount  available  to be drawn  under any Letter of
Credit  shall  be  determined  as of  the  close  of  business  on any  date  of
determination.  Promptly  upon  receipt  by  Administrative  Agent of any amount
described in clause  (i)(b) or (ii)(b) of this  subsection  3.2,  Administrative
Agent shall distribute to each Lender its Pro Rata Share of such amount.

3.3  DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS
     OF CREDIT.

     A.   RESPONSIBILITY  OF  ISSUING  LENDER  WITH  RESPECT  TO  DRAWINGS.   In
determining  whether  to honor any  drawing  under  any  Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents  delivered  under such Letter of Credit with  reasonable care so as to
ascertain  whether they appear on their face to be in accordance  with the terms
and conditions of such Letter of Credit.

     B. REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT. In the
event an Issuing  Lender  has  determined  to honor a drawing  under a Letter of
Credit issued by it, such Issuing  Lender shall  immediately  notify Company and
Administrative  Agent,  and Company shall  reimburse  such Issuing  Lender on or
before the Business Day immediately  following the date on which such drawing is
honored (the "REIMBURSEMENT DATE") in an amount in Dollars and in same day funds
equal to the amount of such honored drawing;  provided that,  anything contained
in this Agreement to the contrary notwithstanding, (i) unless Company shall have
notified  Administrative  Agent and such Issuing Lender prior to 10:00 A.M. (New
York City  time) on the date such  drawing is honored  that  Company  intends to
reimburse such Issuing Lender for the amount of such honored  drawing with funds
other than the  proceeds of  Revolving  Loans,  Company  shall be deemed to have
given a timely Notice of Borrowing to Administrative Agent requesting Lenders to
make Revolving  Loans that are Base Rate Loans on the  Reimbursement  Date in an
amount in Dollars  equal to the amount of such honored  drawing and (ii) subject
to  satisfaction  or waiver of the  conditions  specified  in  subsection  4.2B,
Lenders shall,  on the  Reimbursement  Date,  make Revolving Loans that are Base
Rate Loans in the amount of such honored drawing, the proceeds of which shall be
applied  directly by  Administrative  Agent to reimburse such Issuing Lender for
the amount of such honored drawing; and provided, further that if for any reason
proceeds  of  Revolving  Loans are not  received by such  Issuing  Lender on the
Reimbursement  Date in an amount  equal to the amount of such  honored  drawing,
Company shall reimburse such Issuing Lender, on demand, in an amount in same day
funds  equal to the  excess  of the  amount  of such  honored  drawing  over the
aggregate amount of such Revolving Loans, if any, which are so received. Nothing
in this  subsection  3.3B  shall  be  deemed  to  relieve  any  Lender  from its
obligation to make Revolving Loans on the terms and conditions set forth in this
Agreement,  and Company  shall retain any and all rights it may have against any
Lender  resulting from the failure of such Lender to make such  Revolving  Loans
under this subsection 3.3B.

     C.   PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER
LETTERS OF CREDIT.

          (i) Payment by Lenders.  In the event that Company  shall fail for any
     reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
     amount equal to the amount of any drawing  honored by such  Issuing  Lender
     under a Letter of Credit issued by it, such Issuing  Lender shall  promptly
     notify each other Lender of the unreimbursed amount of such honored drawing
     and of such other Lender's respective  participation  therein based on such
     Lender's Pro Rata Share.  Each Lender shall make  available to such Issuing
     Lender an amount equal to its respective  participation,  in Dollars and in
     same day funds,  at the office of such  Issuing  Lender  specified  in such
     notice,  not later  than  12:00  Noon  (New  York  City  time) on the first
     business  day (under the laws of the  jurisdiction  in which such office of
     such  Issuing  Lender is located)  after the date  notified by such Issuing
     Lender.  In the  event  that any  Lender  fails to make  available  to such
     Issuing   Lender  on  such   business  day  the  amount  of  such  Lender's
     participation in such Letter of Credit as provided in this subsection 3.3C,
     such Issuing Lender shall be entitled to recover such amount on demand from
     such Lender together with interest  thereon at the rate customarily used by
     such  Issuing  Lender for the  correction  of errors  among banks for three
     Business Days and thereafter at the Base Rate.  Nothing in this  subsection
     3.3C shall be deemed to  prejudice  the right of any Lender to recover from
     any  Issuing  Lender any  amounts  made  available  by such  Lender to such
     Issuing  Lender  pursuant to this  subsection  3.3C in the event that it is
     determined by the final judgment of a court of competent  jurisdiction that
     the payment with  respect to a Letter of Credit by such  Issuing  Lender in
     respect  of  which  payment  was  made by  such  Lender  constituted  gross
     negligence or willful misconduct on the part of such Issuing Lender.

          (ii) Distribution to Lenders of Reimbursements  Received From Company.
     In the event any Issuing Lender shall have been reimbursed by other Lenders
     pursuant  to  subsection  3.3C(i)  for all or any  portion  of any  drawing
     honored by such Issuing  Lender under a Letter of Credit issued by it, such
     Issuing  Lender  shall  distribute  to each other Lender which has paid all
     amounts payable by it under subsection 3.3C(i) with respect to such honored
     drawing such other  Lender's  Pro Rata Share of all  payments  subsequently
     received by such  Issuing  Lender  from  Company in  reimbursement  of such
     honored  drawing when such  payments are  received.  Any such  distribution
     shall be made to a Lender at its  primary  address set forth below its name
     on the  appropriate  signature page hereof or at such other address as such
     Lender may request.

     D.   INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.

          (i)  Payment of Interest  by  Company.  Company  agrees to pay to each
     Issuing  Lender,  with  respect to  drawings  honored  under any Letters of
     Credit issued by it,  interest on the amount paid by such Issuing Lender in
     respect of each such honored  drawing from the date such drawing is honored
     to but excluding  the date such amount is reimbursed by Company  (including
     any such  reimbursement  out of the proceeds of Revolving Loans pursuant to
     subsection  3.3B) at a rate equal to (a) for the period  from the date such
     drawing is honored to but excluding the  Reimbursement  Date, the rate then
     in effect under this  Agreement  with  respect to Revolving  Loans that are
     Base Rate Loans and (b) thereafter,  a rate which is 2% per annum in excess
     of the rate of interest otherwise payable under this Agreement with respect
     to Revolving Loans that are Base Rate Loans.  Interest  payable pursuant to
     this  subsection  3.3D(i)  shall be computed on the basis of a 360-day year
     for the actual number of days elapsed in the period during which it accrues
     and shall be  payable  on demand  or, if no demand is made,  on the date on
     which the related drawing under a Letter of Credit is reimbursed in full.

          (ii)  Distribution of Interest  Payments by Issuing  Lender.  Promptly
     upon receipt by any Issuing  Lender of any payment of interest  pursuant to
     subsection  3.3D(i)  with  respect to a drawing  honored  under a Letter of
     Credit issued by it, (a) such Issuing Lender shall distribute to each other
     Lender,  out of the interest  received by such Issuing Lender in respect of
     the period from the date such drawing is honored to but  excluding the date
     on which such Issuing  Lender is reimbursed  for the amount of such drawing
     (including any such  reimbursement  out of the proceeds of Revolving  Loans
     pursuant to subsection  3.3B), the amount that such other Lender would have
     been  entitled to receive in respect of the letter of credit fee that would
     have been  payable  in respect  of such  Letter of Credit  for such  period
     pursuant to subsection 3.2 if no drawing had been honored under such Letter
     of  Credit,  and (b) in the  event  such  Issuing  Lender  shall  have been
     reimbursed by other Lenders  pursuant to subsection  3.3C(i) for all or any
     portion of such honored  drawing,  such Issuing Lender shall  distribute to
     each other Lender which has paid all amounts payable by it under subsection
     3.3C(i) with respect to such honored  drawing such other  Lender's Pro Rata
     Share of any interest  received by such  Issuing  Lender in respect of that
     portion of such  honored  drawing so  reimbursed  by other  Lenders for the
     period  from the date on which such  Issuing  Lender was so  reimbursed  by
     other  Lenders  to but  excluding  the date on which  such  portion of such
     honored drawing is reimbursed by Company.  Any such  distribution  shall be
     made to a Lender at its  primary  address  set forth  below its name on the
     appropriate  signature  page hereof or at such other address as such Lender
     may request.

3.4  OBLIGATIONS ABSOLUTE.

          The  obligation  of  Company  to  reimburse  each  Issuing  Lender for
drawings  honored  under the  Letters  of  Credit  issued by it and to repay any
Revolving Loans made by Lenders  pursuant to subsection 3.3B and the obligations
of Lenders under subsection  3.3C(i) shall be unconditional  and irrevocable and
shall be paid strictly in accordance  with the terms of this Agreement under all
circumstances including any of the following circumstances:

          (i)  any lack of validity or enforceability of any
     Letter of Credit;

          (ii) the existence of any claim, set-off, defense or other right which
     Company  or any Lender may have at any time  against a  beneficiary  or any
     transferee  of any  Letter  of  Credit  (or any  Persons  for whom any such
     transferee may be acting),  any Issuing Lender or other Lender or any other
     Person or, in the case of a Lender, against Company,  whether in connection
     with this Agreement, the transactions  contemplated herein or any unrelated
     transaction (including any underlying transaction between Company or one of
     its  Subsidiaries  and the  beneficiary  for which any Letter of Credit was
     procured);

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

          (iv)  payment by the  applicable  Issuing  Lender  under any Letter of
     Credit  against  presentation  of a draft or other  document which does not
     substantially comply with the terms of such Letter of Credit;

          (v)  any adverse change in the business, operations,
     properties, assets, condition (financial or otherwise) or
     prospects of Company or any of its Subsidiaries;

          (vi)      any breach of this Agreement or any other
     Loan Document by any party thereto;

          (vii)     any other circumstance or happening
     whatsoever, whether or not similar to any of the
     foregoing; or

          (viii)    the fact that an Event of Default or a
     Potential Event of Default shall have occurred and be
     continuing;

provided,  in each case, that payment by the applicable Issuing Lender under the
applicable  Letter of Credit  shall not have  constituted  gross  negligence  or
willful  misconduct of such Issuing Lender under the  circumstances  in question
(as determined by a final judgment of a court of competent jurisdiction).

3.5  INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.

     A.   INDEMNIFICATION.  In addition to amounts payable as
provided in subsection 3.6, Company hereby agrees to protect,
indemnify, pay and save harmless each Issuing Lender from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which such Issuing Lender may incur
or be subject to as a consequence, direct or indirect, of
(i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or
willful misconduct of such Issuing Lender as determined by a
final judgment of a court of competent jurisdiction or (b)
subject to the following clause (ii), the wrongful dishonor by
such Issuing Lender of a proper demand for payment made under
any Letter of Credit issued by it or (ii) the failure of such
Issuing Lender to honor a drawing under any such Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or
omissions herein called "GOVERNMENTAL ACTS").

     B. NATURE OF ISSUING  LENDERS'  DUTIES.  As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of  such  Letters  of  Credit.  In  furtherance  and  not in  limitation  of the
foregoing,  such  Issuing  Lender  shall not be  responsible  for: (i) the form,
validity,  sufficiency,  accuracy,  genuineness  or legal effect of any document
submitted by any party in connection  with the  application  for and issuance of
any such  Letter of Credit,  even if it should in fact prove to be in any or all
respects  invalid,  insufficient,  inaccurate,  fraudulent  or forged;  (ii) the
validity  or  sufficiency  of  any  instrument   transferring  or  assigning  or
purporting  to  transfer  or assign  any such  Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective  for any reason;  (iii) failure of the  beneficiary of
any such Letter of Credit to comply fully with any conditions  required in order
to draw upon such Letter of Credit;  (iv) errors,  omissions,  interruptions  or
delays in transmission or delivery of any messages,  by mail, cable,  telegraph,
telex  or  otherwise,   whether  or  not  they  be  in  cipher;  (v)  errors  in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise  of any  document  required in order to make a drawing  under any such
Letter of Credit or of the proceeds  thereof;  (vii) the  misapplication  by the
beneficiary  of any such Letter of Credit of the  proceeds of any drawing  under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any Governmental Acts, and none of the
above shall  affect or impair,  or prevent  the vesting of, any of such  Issuing
Lender's rights or powers hereunder.

          In  furtherance  and  extension  and not in limitation of the specific
provisions set forth in the first paragraph of this subsection  3.5B, any action
taken or omitted by any Issuing  Lender under or in connection  with the Letters
of Credit issued by it or any documents and certificates  delivered  thereunder,
if taken or omitted in good faith,  shall not put such Issuing  Lender under any
resulting liability to Company.

          Notwithstanding  anything to the contrary contained in this subsection
3.5,  Company  shall  retain any and all rights it may have  against any Issuing
Lender for any liability  arising solely out of the gross  negligence or willful
misconduct of such Issuing Lender,  as determined by a final judgment of a court
of competent jurisdiction.

3.6  INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.

          Subject  to  the  provisions  of  subsection   2.7B  (which  shall  be
controlling with respect to the matters covered thereby),  in the event that any
Issuing Lender or Lender shall  determine  (which  determination  shall,  absent
manifest  error,  be final and conclusive  and binding upon all parties  hereto)
that any law,  treaty or governmental  rule,  regulation or order, or any change
therein  or  in  the  interpretation,   administration  or  application  thereof
(including  the  introduction  of any new  law,  treaty  or  governmental  rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes  effective after the date hereof, or compliance by any
Issuing Lender or Lender with any guideline, request or directive issued or made
after  the  date  hereof  by  any  central   bank  or  other   governmental   or
quasi-governmental authority (whether or not having the force of law):

          (i) subjects such Issuing Lender or Lender (or its applicable  lending
     or letter of credit  office) to any  additional  Tax (other than any Tax on
     the overall net income of such  Issuing  Lender or Lender)  with respect to
     the issuing or  maintaining  of any Letters of Credit or the  purchasing or
     maintaining of any  participations  therein or any other  obligations under
     this Section 3, whether directly or by such being imposed on or suffered by
     any particular Issuing Lender;

          (ii) imposes,  modifies or holds applicable any reserve (including any
     marginal,  emergency,  supplemental,  special  or other  reserve),  special
     deposit,  compulsory loan, FDIC insurance or similar requirement in respect
     of any  Letters of Credit  issued by any Issuing  Lender or  participations
     therein purchased by any Lender; or

          (iii)  imposes any other  condition  (other than with respect to a Tax
     matter) on or affecting  such Issuing  Lender or Lender (or its  applicable
     lending or letter of credit office)  regarding this Section 3 or any Letter
     of Credit or any participation therein;

and the result of any of the  foregoing  is to increase the cost to such Issuing
Lender or Lender of  agreeing  to issue,  issuing or  maintaining  any Letter of
Credit or agreeing to purchase,  purchasing  or  maintaining  any  participation
therein or to reduce any amount received or receivable by such Issuing Lender or
Lender (or its  applicable  lending  or letter of credit  office)  with  respect
thereto; then, in any case, Company shall promptly pay to such Issuing Lender or
Lender,  upon receipt of the statement  referred to in the next  sentence,  such
additional  amount or amounts as may be  necessary  to  compensate  such Issuing
Lender or Lender for any such increased cost or reduction in amounts received or
receivable  hereunder.  Such Issuing Lender or Lender shall deliver to Company a
written statement,  setting forth in reasonable detail the basis for calculating
the  additional  amounts  owed to such  Issuing  Lender  or  Lender  under  this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.


SECTION 4.     CONDITIONS TO LOANS AND LETTERS OF CREDIT

          The  obligations  of Lenders to make Loans and the issuance of Letters
of Credit hereunder are subject to the satisfaction of the following conditions.

4.1  CONDITIONS TO TERM LOANS AND INITIAL REVOLVING LOANS AND
SWING LINE LOANS.

          The  obligations  of Lenders to make the Term Loans and any  Revolving
Loans and Swing Line Loans to be made on the  Closing  Date are,  in addition to
the  conditions  precedent  specified  in  subsection  4.2,  subject to prior or
concurrent satisfaction of the following conditions:

     A. LOAN PARTY DOCUMENTS.  On or before the Closing Date, Company shall, and
shall  cause  each other  Loan  Party to,  deliver to Lenders  (or to Agents for
Lenders with sufficient originally executed copies, where appropriate,  for each
Lender  and its  counsel)  the  following  with  respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:

          (i) Certified  copies of the Certificate or Articles of  Incorporation
     of  such  Person,  together  with  a good  standing  certificate  from  the
     Secretary  of State of its  jurisdiction  of  incorporation  and each other
     state in which such  Person is  qualified  as a foreign  corporation  to do
     business and, to the extent  generally  available,  a certificate  or other
     evidence of good  standing  as to payment of any  applicable  franchise  or
     similar  taxes  from  the  appropriate  taxing  authority  of  each of such
     jurisdictions, each dated a recent date prior to the Closing Date;

          (ii)      Copies of the Bylaws of such Person,
     certified as of the Closing Date by such Person's
     corporate secretary or an assistant secretary;

          (iii)  Resolutions of the Board of Directors of such Person  approving
     and  authorizing  the  execution,  delivery  and  performance  of the  Loan
     Documents  to which it is a party,  certified as of the Closing Date by the
     corporate  secretary or an  assistant  secretary of such Person as being in
     full force and effect without modification or amendment;

          (iv)      Signature and incumbency certificates of
     the officers of such Person executing the Loan Documents
     to which it is a party;

          (v)  Executed originals of the Loan Documents to
     which such Person is a party; and

          (vi)      Such other documents as Agents may
     reasonably request.

     B.   NO MATERIAL ADVERSE EFFECT.  Since December 25, 1995,
no Material Adverse Effect (in the sole opinion of Arranger
and Agents) shall have occurred.

     C. ASSIGNMENT OF OBLIGATIONS  UNDER EXISTING  CREDIT  AGREEMENT AND RELATED
LIENS;  EXISTING  LETTERS OF CREDIT.  On the Closing Date, (i) all  Indebtedness
outstanding  and owing to Existing  Lender under the Existing  Credit  Agreement
(the  aggregate   principal  amount  of  which  Indebtedness  shall  not  exceed
$75,585,000)  shall have been paid,  (ii) any  commitments of Existing Lender to
lend or make other  extensions of credit  thereunder shall have been terminated,
(iii)  Holdings,   Company  and  its   Subsidiaries   shall  have  delivered  to
Administrative  Agent all  documents  or  instruments  necessary  to release (or
assign to  Administrative  Agent for  benefit  of  Lenders)  all Liens  securing
Indebtedness or other  obligations of Company and its  Subsidiaries  thereunder,
and (iv) Holdings,  Company and its  Subsidiaries  shall have made  arrangements
with respect to the cancellation of any letters of credit outstanding thereunder
or the issuance of Letters of Credit to support the  obligations  of Company and
its  Subsidiaries  with respect thereto,  in each case on terms  satisfactory to
Arranger, Agents and Lenders.

     D.   ASSIGNED MORTGAGES; MORTGAGE POLICIES; ETC.  Subject
to the provisions of subsection 4.4, Administrative Agent
shall have received from Company and each applicable
Subsidiary Guarantor:

          (i) Assigned  Mortgages.  Fully executed and notarized  assignments of
     the  Assigned  Mortgages in proper form for  recording  in all  appropriate
     places in all  applicable  jurisdictions,  encumbering  each Real  Property
     Asset  listed  in  Schedule  4.1D  annexed  hereto  (each a  "CLOSING  DATE
     MORTGAGED  PROPERTY"  and,   collectively,   the  "CLOSING  DATE  MORTGAGED
     PROPERTIES");

          (ii) Opinions of Local  Counsel.  An opinion of counsel (which counsel
     shall  be  reasonably  satisfactory  to  Agents)  in each  state in which a
     Closing   Date   Mortgaged   Property  is  located   with  respect  to  the
     enforceability of the form(s) of assignments for the Assigned  Mortgages to
     be recorded in such state and such other  matters as Agents may  reasonably
     request,  in each case in form and  substance  reasonably  satisfactory  to
     Agents dated as of the Closing  Date and setting  forth  substantially  the
     matters in the opinion  attached hereto as Exhibit XXV and as to such other
     matters as Agents may reasonably require;

          (iii) Title Insurance.  As determined by Syndication Agent in its sole
     discretion,  (a)  unconditional  commitments  for mortgagee title insurance
     policies (the "CLOSING DATE MORTGAGE POLICIES") issued by the Title Company
     with respect to the Closing Date  Mortgaged  Properties in amounts not less
     than  the  respective  amounts  designated  therein  with  respect  to  any
     particular Closing Date Mortgaged Properties, insuring Administrative Agent
     that the applicable  Assigned  Mortgages create valid and enforceable First
     Priority mortgage Liens on the respective Closing Date Mortgaged Properties
     encumbered thereby,  subject only to a standard survey exception,  and such
     other exceptions  approved by Agents,  which Closing Date Mortgage Policies
     (1) shall include a lenders  aggregation  endorsement,  an endorsement  for
     future  advances under this Agreement and for any other matters  reasonably
     requested by Agents and (2) shall  provide for  affirmative  insurance  and
     such reinsurance as Agents may reasonably request,  all of the foregoing in
     form and  substance  reasonably  satisfactory  to Agents;  and (b) evidence
     satisfactory  to Agents that such Loan Party has (i) delivered to the Title
     Company all  certificates  and affidavits  required by the Title Company in
     connection with the issuance of the Closing Date Mortgage Policies and (ii)
     paid to the Title Company or to the  appropriate  governmental  authorities
     all  expenses  and  premiums of the Title  Company in  connection  with the
     issuance of the Closing Date Mortgage  Policies and all recording and stamp
     taxes  (including  mortgage  recording  and  intangible  taxes)  payable in
     connection with recording the Assigned  Mortgages in the  appropriate  real
     estate records;

          (iv)      Title Reports.  With respect to each
     Closing Date Mortgaged Property, a title report issued by
     the Title Company with respect thereto, dated not more
     than 30 days prior to the Closing Date and satisfactory
     in form and substance to Agents;

          (v)  Copies of Documents Relating to Title
     Exceptions.  Copies of all recorded documents listed as
     exceptions to title or otherwise referred to in the
     Closing Date Mortgage Policies or in the title reports
     delivered pursuant to subsection 4.1D(iv);

          (vi) Matters Relating to Flood Hazard Properties.  (a) Evidence, which
     may be in the form of a letter  from an  insurance  broker  or a  municipal
     engineer,  as to whether (1) any Closing Date Mortgaged Property is a Flood
     Hazard  Property  and (2) the  community  in which  any such  Flood  Hazard
     Property  is located  is  participating  in the  National  Flood  Insurance
     Program,  (b) if there  are any such  Flood  Hazard  Properties,  such Loan
     Party's written  acknowledgement  of receipt of written  notification  from
     Administrative  Agent (1) as to the  existence  of each such  Flood  Hazard
     Property  and (2) as to  whether  the  community  in which  each such Flood
     Hazard Property is located is participating in the National Flood Insurance
     Program,  and (c) in the event any such Flood Hazard Property is located in
     a community  that  participates  in the National Flood  Insurance  Program,
     evidence that Company has obtained flood insurance in respect of such Flood
     Hazard Property to the extent required under the applicable  regulations of
     the Board of Governors of the Federal Reserve System; and

          (vii)   Environmental   Indemnity  .  If  requested   by  Agents,   an
     environmental  indemnity  agreement,  satisfactory in form and substance to
     Agents and their counsel, with respect to the indemnification of Agents and
     Lenders  for any  liabilities  that may be imposed on or incurred by any of
     them as a result of any Hazardous Materials Activity.

     E.  SECURITY  INTERESTS IN PERSONAL AND MIXED  PROPERTY.  To the extent not
otherwise  satisfied  pursuant to  subsection  4.1D,  Agents shall have received
evidence  satisfactory  to each of them that Company and  Subsidiary  Guarantors
shall have taken or caused to be taken all such actions,  executed and delivered
or caused to be  executed  and  delivered  all such  agreements,  documents  and
instruments,  and made or  caused  to be made all such  filings  and  recordings
(other than the filing or recording of items  described in clauses  (iii),  (iv)
and (v) below) that may be necessary or, in the opinion of Agents,  desirable in
order to either  assign the  interest of  Existing  Lender or create in favor of
Administrative  Agent, for the benefit of Lenders, a valid and (upon such filing
and recording) perfected First Priority security interest in the entire personal
and mixed property Collateral. Such actions shall include the following:

          (i)  Schedules to Collateral Documents.  Delivery to
     Agents of accurate and complete schedules to all of the
     applicable Collateral Documents.

          (ii) Stock  Certificates and Instruments.  Delivery to  Administrative
     Agent of (a)  certificates  (which  certificates  shall be  accompanied  by
     irrevocable  undated  stock  powers,  duly  endorsed in blank and otherwise
     satisfactory  in form and  substance  to Agents)  representing  all capital
     stock pledged  pursuant to the Company  Pledge  Agreement,  the  Subsidiary
     Pledge Agreements and the Affiliated  Stockholder Pledge Agreements and (b)
     all  promissory   notes  or  other   instruments   (duly  endorsed,   where
     appropriate, in a manner satisfactory to Agents) evidencing any Collateral;

          (iii) Lien  Searches and UCC  Termination  Statements.  Subject to the
     provisions  of subsection  4.4,  delivery to Agents of (a) the results of a
     recent search,  by a Person  satisfactory  to Agents,  of all effective UCC
     financing  statements  and fixture  filings and all  judgment  and tax lien
     filings  which may have been made with  respect  to any  personal  or mixed
     property  of any Loan  Party,  together  with  copies  of all such  filings
     disclosed by such search, and (b) UCC termination  statements duly executed
     by all applicable Persons for filing in all applicable jurisdictions as may
     be necessary to terminate any effective UCC financing statements or fixture
     filings disclosed in such search (other than any such financing  statements
     or fixture  filings in respect  of Liens  permitted  to remain  outstanding
     pursuant to the terms of this Agreement).

          (iv) UCC  Financing  Statements  and Fixture  Filings.  Subject to the
     provisions  of  subsection  4.4,  delivery to  Administrative  Agent of UCC
     financing statements and, where appropriate, fixture filings, duly executed
     by each  applicable  Loan Party  with  respect  to all  personal  and mixed
     property  Collateral of such Loan Party, for filing in all jurisdictions as
     may be  necessary  or, in the opinion of Agents,  desirable  to perfect the
     security  interests  created in such Collateral  pursuant to the Collateral
     Documents;

          (v)  PTO Cover Sheets, Etc.  Delivery to
     Administrative Agent of all cover sheets or other
     documents or instruments required to be filed with the
     PTO in order to create or perfect Liens in respect of any
     IP Collateral;

          (vi)  Certificates  of  Title,  Etc.  Subject  to  the  provisions  of
     subsection 4.4, delivery to  Administrative  Agent of certificates of title
     with respect to all motor  vehicles and other rolling stock of Loan Parties
     and the taking of all actions necessary to cause Administrative Agent to be
     noted as  lienholder  thereon or  otherwise  necessary to perfect the First
     Priority Lien granted to Administrative  Agent on behalf of Lenders in such
     rolling stock; and

          (vii)  Opinions  of  Local  Counsel.  Subject  to  the  provisions  of
     subsection 4.4,  delivery to Agents of an opinion of counsel (which counsel
     shall  be  reasonably  satisfactory  to  Agents)  under  the  laws  of each
     jurisdiction  in which any Loan  Party or any  personal  or mixed  property
     Collateral  is located with respect to the creation and  perfection  of the
     security interests in favor of Administrative  Agent in such Collateral and
     such other matters governed by the laws of such jurisdiction regarding such
     security interests as Agents may reasonably  request,  in each case in form
     and  substance  reasonably  satisfactory  to Agents dated as of the Closing
     Date and  setting  forth  substantially  the matters in the form of opinion
     annexed  hereto as Exhibit  XXV and as to such other  matters as Agents may
     reasonably require.

     F.  EVIDENCE  OF  INSURANCE.  Administrative  Agent  shall have  received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance  required to be maintained  pursuant to subsection  6.4 is in
full  force and effect and that  Administrative  Agent on behalf of Lenders  has
been named as  additional  insured  and/or loss payee  thereunder  to the extent
required under subsection 6.4.

     G.  OPINIONS  OF  COUNSEL TO LOAN  PARTIES.  Lenders  and their  respective
counsel  shall  have  received  (i)  originally  executed  copies of one or more
favorable written opinions of Bryan Cave LLP, counsel for Loan Parties,  in form
and substance reasonably  satisfactory to Agents and their counsel,  dated as of
the Closing  Date and setting  forth  substantially  the matters in the opinions
designated  in Exhibit IX annexed  hereto and as to such other matters as Agents
acting  on  behalf  of  Lenders  may   reasonably   request  and  (ii)  evidence
satisfactory  to Agents that Company has requested  such counsel to deliver such
opinions to Lenders.

     H. OPINIONS OF  SYNDICATION  AGENT'S  COUNSEL.  Lenders shall have received
originally  executed  copies  of one  or  more  favorable  written  opinions  of
O'Melveny & Myers LLP,  counsel to  Syndication  Agent,  dated as of the Closing
Date, substantially in the form of Exhibit X annexed hereto and as to such other
matters as Syndication Agent acting on behalf of Lenders may reasonably request.

     I.   FEES.  Company shall have paid to Administrative
Agent and Arranger the fees payable on the Closing Date
referred to in subsection 2.3.

     J.   SOLVENCY OPINION.  Company shall have delivered to
Arranger and Agents a solvency opinion dated the Closing Date
from an nationally recognized valuation firm satisfactory to
Arranger and Syndication Agent.

     K.   SOLVENCY CERTIFICATE.  Company shall have delivered
to Arranger and Agents a Solvency Certificate dated the
Closing Date.

     L. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company shall
have  delivered  to  Agents  an  Officer's  Certificate,  in form and  substance
satisfactory to Agents, to the effect that the representations and warranties in
Section 5 hereof are true,  correct and complete in all material respects on and
as of the Closing  Date to the same extent as though made on and as of that date
(or, to the extent such representations and warranties specifically relate to an
earlier date, that such  representations  and warranties were true,  correct and
complete  in all  material  respects  on and as of such  earlier  date) and that
Company  shall have  performed  in all  material  respects  all  agreements  and
satisfied all  conditions  which this  Agreement  provides shall be performed or
satisfied by it on or before the Closing  Date except as otherwise  disclosed to
and agreed to in writing by Agents and Requisite Lenders.

     M.  NECESSARY  GOVERNMENTAL  AUTHORIZATIONS  AND  CONSENTS;  EXPIRATION  OF
WAITING   PERIODS,   ETC.   Company   shall  have   obtained  all   Governmental
Authorizations  and all  consents  of  other  Persons,  in each  case  that  are
necessary  or  advisable  in  connection  with the  Refinancing  and each of the
foregoing  shall be in full force and effect,  in each case other than those the
failure to obtain or maintain  which,  either  individually or in the aggregate,
would  not  reasonably  be  expected  to have a  Material  Adverse  Effect.  All
applicable  waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
impose  adverse  conditions  on the  Refinancing.  No action,  request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing  shall be pending,  and the time for any  applicable  agency to
take action to set aside its consent on its own motion shall have expired.

     N. DUE DILIGENCE.  The results of the continuing financial,  legal, tax and
accounting  due  diligence  investigations  with  respect  to  Company  and  its
Subsidiaries  shall be  satisfactory  in all  respects to  Arranger,  Agents and
Lenders, and any supplemental  business or financial due diligence that Arranger
or Syndication  Agent reasonably  determines has become necessary shall not have
disclosed  information not previously disclosed to Arranger or Syndication Agent
which  causes  the  results of such  investigations  not to be  satisfactory  to
Arranger, Agents and Lenders in all respects. Arranger, Agents and Lenders shall
have received any information  reasonably  necessary to conduct their continuing
due diligence.

     O.  FINANCIAL  STATEMENTS.  The Lenders shall have received (ii)  unaudited
financial  statements of Holdings and its  Subsidiaries  for the Fiscal  Quarter
most  recently  ended prior to the  Closing  Date and (ii)  unaudited  financial
statements of Holdings and its  subsidiaries  for the Fiscal Year ended December
30, 1996. Any of Arranger,  Agents,  and Lenders shall have had the opportunity,
at  their  option,  to  review  any such  unaudited  financial  statements  with
Holdings' independent public accountants, at Company's cost.

     P. COMPLETION OF PROCEEDINGS.  All corporate and other proceedings taken or
to be taken in  connection  with the  transactions  contemplated  hereby and all
documents  incidental  thereto not  previously  found  acceptable by each Agent,
acting on behalf of Lenders,  and its counsel shall be  satisfactory in form and
substance to Agents and such  counsel,  and Agents and such  counsel  shall have
received all such counterpart originals or certified copies of such documents as
Agents may reasonably request.

4.2  CONDITIONS TO ALL LOANS.

          The  obligations  of Lenders to make  Loans on each  Funding  Date are
subject to the following further conditions precedent:

          A. Administrative  Agent shall have received before that Funding Date,
in accordance  with the  provisions of subsection  2.1B, an originally  executed
Notice of Borrowing,  in each case signed by the chief  executive  officer,  the
chief financial  officer or the treasurer of Company or by any executive officer
of  Company  designated  by any of the  above-described  officers  on  behalf of
Company in a writing delivered to Administrative Agent.

          B.   As of that Funding Date:

          (i) The  representations  and warranties  contained  herein and in the
     other Loan  Documents  shall be true,  correct and complete in all material
     respects on and as of that  Funding  Date to the same extent as though made
     on and as of that  date,  except to the  extent  such  representations  and
     warranties  specifically  relate to an  earlier  date,  in which  case such
     representations  and warranties shall have been true,  correct and complete
     in all material respects on and as of such earlier date;

          (ii) No event shall have  occurred and be  continuing  or would result
     from the  consummation  of the  borrowing  contemplated  by such  Notice of
     Borrowing that would constitute an Event of Default or a Potential Event of
     Default;

          (iii) Each Loan Party shall have  performed in all  material  respects
     all agreements and satisfied all conditions  which this Agreement  provides
     shall be performed or satisfied by it on or before that Funding Date;

          (iv)  No  order,  judgment  or  decree  of any  court,  arbitrator  or
     governmental  authority shall purport to enjoin or restrain any Lender from
     making the Loans to be made by it on that Funding Date;

          (v) The making of the Loans  requested  on such Funding Date shall not
     violate any law  including  Regulation  G,  Regulation  T,  Regulation U or
     Regulation X of the Board of Governors of the Federal Reserve System; and

          (vi)  There  shall not be pending  or, to the  knowledge  of  Company,
     threatened,  any action, suit,  proceeding,  governmental  investigation or
     arbitration  against or affecting Company or any of its Subsidiaries or any
     property of Company or any of its Subsidiaries  that has not been disclosed
     by Company in writing  pursuant to  subsection  5.6 or 6.1(x)  prior to the
     making of the last  preceding  Loans (or, in the case of the initial Loans,
     prior to the execution of this Agreement), and there shall have occurred no
     development  not  so  disclosed  in  any  such  action,  suit,  proceeding,
     governmental  investigation  or arbitration  so disclosed,  that, in either
     event, in the opinion of Agents or of Requisite Lenders,  would be expected
     to have a Material Adverse Effect.

4.3  CONDITIONS TO LETTERS OF CREDIT.

          The  issuance  of any Letter of Credit  hereunder  (whether or not the
applicable  Issuing  Lender is  obligated  to issue  such  Letter of  Credit) is
subject to the following conditions precedent:

     A.   On or before the date of issuance of the initial
Letter of Credit pursuant to this Agreement, the initial Loans
shall have been made.

     B.  On  or  before  the  date  of   issuance  of  such  Letter  of  Credit,
Administrative  Agent shall have received,  in accordance with the provisions of
subsection  3.1B(i),  an  originally  executed  Notice of  Issuance of Letter of
Credit, in each case signed by the chief executive officer,  the chief financial
officer  or the  treasurer  of Company  or by any  executive  officer of Company
designated  by any of the  above-described  officers  on behalf of  Company in a
writing delivered to Administrative  Agent,  together with all other information
specified in subsection  3.1B(i) and such other  documents or information as the
applicable Issuing Lender may reasonably require in connection with the issuance
of such Letter of Credit.

     C. On the  date of  issuance  of such  Letter  of  Credit,  all  conditions
precedent  described in subsection 4.2B shall be satisfied to the same extent as
if the  issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.

4.4  ITEMS TO BE DELIVERED AFTER THE CLOSING DATE.

          Company,  Agents and Lenders  recognize that it may be impractical for
the  Company  to  deliver  certain  of the  items  listed  in  subsection  4.1D,
subsection  4.1E(iii),  subsection 4.1E(iv),  subsection 4.1E(vi) and subsection
4.1E(viii) on the Closing Date. Company, Agents and Lenders agree, to the extent
that any of such items are not so delivered on the Closing Date with the consent
of  Syndication  Agent,  Company  shall deliver such items within 30 days of the
Closing Date.


SECTION 5.     COMPANY'S REPRESENTATIONS AND WARRANTIES

          In order to induce Lenders and the Agents to enter into this Agreement
and to make the Loans,  to induce Issuing Lenders to issue Letters of Credit and
to induce other Lenders to purchase participations  therein,  Company represents
and warrants to each Lender and the Agents,  on the date of this  Agreement,  on
each Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:

5.1  ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING,
     BUSINESS AND SUBSIDIARIES.

     A.  ORGANIZATION  AND  POWERS.  Each  Loan  Party  is  a  corporation  duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of its
jurisdiction of incorporation as specified in Schedule 5.1 annexed hereto.  Each
Loan Party has all  requisite  corporate  power and authority to own and operate
its properties,  to carry on its business as now conducted and as proposed to be
conducted,  to enter into the Loan Documents to which it is a party and to carry
out the transactions contemplated thereby.

     B.  QUALIFICATION  AND GOOD  STANDING.  Each Loan Party is  qualified to do
business and in good standing in every jurisdiction where its assets are located
and  wherever  necessary to carry out its  business  and  operations,  except in
jurisdictions  where the failure to be so qualified or in good  standing has not
had and will not have a Material Adverse Effect.

     C.   CONDUCT OF BUSINESS.  Company and its Subsidiaries
are engaged only in the businesses permitted to be engaged in
pursuant to subsection 7.14.

     D.  SUBSIDIARIES.  All of the  Subsidiaries  of Company are  identified  in
Schedule 5.1 annexed hereto,  as said Schedule 5.1 may be supplemented from time
to time pursuant to the provisions of subsection 6.1(xvi).  The capital stock of
each of the  Subsidiaries  of Company  identified in Schedule 5.1 annexed hereto
(as so  supplemented)  is  duly  authorized,  validly  issued,  fully  paid  and
nonassessable and none of such capital stock  constitutes  Margin Stock. Each of
the  Subsidiaries  of Company  identified in Schedule 5.1 annexed  hereto (as so
supplemented)  is a corporation  duly  organized,  validly  existing and in good
standing  under the laws of its respective  jurisdiction  of  incorporation  set
forth  therein,  has all  requisite  corporate  power and  authority  to own and
operate its  properties  and to carry on its  business as now  conducted  and as
proposed to be  conducted,  and is qualified to do business and in good standing
in every  jurisdiction  where its assets are located and  wherever  necessary to
carry out its business and  operations,  in each case except where failure to be
so qualified or in good standing or a lack of such corporate power and authority
has not had and will not have a Material  Adverse  Effect.  Schedule 5.1 annexed
hereto (as so  supplemented)  correctly  sets forth the  ownership  interest  of
Company  and each of its  Subsidiaries  in each of the  Subsidiaries  of Company
identified therein.

5.2  AUTHORIZATION OF BORROWING, ETC.

     A.   AUTHORIZATION OF BORROWING.  The execution, delivery
and performance of the Loan Documents have been duly author-
ized by all necessary corporate action on the part of each
Loan Party that is a party thereto.

     B. NO CONFLICT. The execution,  delivery and performance by Loan Parties of
the Loan Documents and the consummation of the transactions  contemplated by the
Loan  Documents do not and will not (i) violate any  provision of any law or any
governmental   rule  or   regulation   applicable  to  Company  or  any  of  its
Subsidiaries,  the Certificate or Articles of Incorporation or Bylaws of Company
or any of its  Subsidiaries  or any  order,  judgment  or decree of any court or
other agency of government  binding on Company or any of its Subsidiaries,  (ii)
conflict with,  result in a breach of or constitute (with due notice or lapse of
time or both) a default  under any  Contractual  Obligation of Company or any of
its  Subsidiaries,  (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of its  Subsidiaries
(other  than any  Liens  created  under  any of the Loan  Documents  in favor of
Administrative  Agent on behalf of  Lenders),  or (iv)  require any  approval of
stockholders  or any  approval  or consent of any Person  under any  Contractual
Obligation of Company or any of its  Subsidiaries,  except for such approvals or
consents  which will be obtained on or before the Closing Date and  disclosed in
writing to Lenders.

     C. GOVERNMENTAL CONSENTS.  The execution,  delivery and performance by Loan
Parties  of  the  Loan  Documents  and  the  consummation  of  the  transactions
contemplated by the Loan Documents do not and will not require any  registration
with,  consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body.

     D. BINDING  OBLIGATION.  Each of the Loan  Documents has been duly executed
and  delivered  by each Loan Party that is a party  thereto  and is the  legally
valid and binding obligation of such Loan Party,  enforceable  against such Loan
Party in  accordance  with its  respective  terms,  except as may be  limited by
bankruptcy, insolvency,  reorganization,  moratorium or similar laws relating to
or limiting  creditors' rights generally or by equitable  principles relating to
enforceability.

5.3  FINANCIAL CONDITION.

          Company has heretofore  delivered to Lenders, at Lenders' request, the
following financial statements and information:  (i) the unaudited  consolidated
balance sheet of Holdings and its  Subsidiaries  as at December 30, 1996 and the
related consolidated  statements of income,  stockholders' equity and cash flows
of  Holdings  and its  Subsidiaries  for the Fiscal Year then ended and (ii) the
unaudited  consolidated  balance  sheet of Holdings and its  Subsidiaries  as at
March 31,  1997 and the related  unaudited  consolidated  statements  of income,
stockholders'  equity and cash flows of Holdings  and its  Subsidiaries  for the
three months then ended.  All such  statements  were prepared in conformity with
GAAP and fairly present, in all material respects,  the financial position (on a
consolidated basis) of the entities described in such financial statements as at
the respective  dates thereof and the results of operations and cash flows (on a
consolidated  basis) of the entities  described  therein for each of the periods
then ended, subject, in the case of any such unaudited financial statements,  to
changes resulting from normal year-end  adjustments.  Company does not (and will
not following the funding of the initial Loans) have any Contingent  Obligation,
contingent liability or liability for taxes,  long-term lease or unusual forward
or  long-term  commitment  that  is not  reflected  in the  foregoing  financial
statements  or the  notes  thereto  and which in any such  case is  material  in
relation to the business,  operations,  properties, assets, condition (financial
or otherwise) or prospects of Company or any of its Subsidiaries.

5.4  NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR
PAYMENTS.

          Since  December  25, 1995,  no event or change has  occurred  that has
caused or evidences,  either in any case or in the aggregate, a Material Adverse
Effect.  Neither Company nor any of its  Subsidiaries has directly or indirectly
declared,  ordered,  paid or made,  or set apart any sum or  property  for,  any
Restricted  Junior  Payment or agreed to do so except as permitted by subsection
7.5.

5.5  TITLE TO PROPERTIES; LIENS; REAL PROPERTY.

          A. TITLE TO PROPERTIES;  LIENS.  Company and its Subsidiaries have (i)
good,  sufficient  and  legal  title  to (in the case of fee  interests  in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property),  or (iii) good title to (in the case of all other
personal property),  all of their respective  properties and assets reflected in
the financial  statements  referred to in  subsection  5.3 or in the most recent
financial  statements  delivered pursuant to subsection 6.1, in each case except
for  assets  disposed  of since  the date of such  financial  statements  in the
ordinary  course of business or as otherwise  permitted  under  subsection  7.7.
Except as permitted by this  Agreement,  all such properties and assets are free
and clear of Liens.

          B. REAL PROPERTY.  As of the Closing Date, Schedule 5.5 annexed hereto
contains a true,  accurate and complete list of (i) all real  property  owned by
Company or any  Subsidiary  and (ii) all leases,  subleases  or  assignments  of
leases (together with all amendments,  modifications,  supplements,  renewals or
extensions of any thereof) affecting each Real Property Asset of any Loan Party,
regardless  of  whether  such Loan  Party is the  landlord  or  tenant  (whether
directly or as an assignee or successor in interest) under such lease,  sublease
or  assignment.  Except as  specified  in  Schedule  5.5  annexed  hereto,  each
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Company  does not have  knowledge  of any default  that has
occurred and is continuing  thereunder,  and each such agreement constitutes the
legally valid and binding obligation of each applicable Loan Party,  enforceable
against such Loan Party in accordance with its terms,  except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles.

5.6  LITIGATION; ADVERSE FACTS.

          Except as set  forth in  Schedule  5.6  annexed  hereto,  there are no
actions,  suits,  proceedings,   arbitrations  or  governmental   investigations
(whether or not purportedly on behalf of Company or any of its  Subsidiaries) at
law or in  equity,  or  before  or by any  federal,  state,  municipal  or other
governmental department,  commission,  board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Company,  threatened against or affecting Company or any of its
Subsidiaries  or any  property of Company or any of its  Subsidiaries  and that,
individually  or in the aggregate,  could  reasonably be expected to result in a
Material  Adverse Effect.  Neither Company nor any of its Subsidiaries (i) is in
violation  of  any  applicable   laws  (including   Environmental   Laws)  that,
individually  or in the aggregate,  could  reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions,  decrees, rules or regulations of any court
or any federal, state, municipal or other governmental  department,  commission,
board,   bureau,   agency  or  instrumentality,   domestic  or  foreign,   that,
individually  or in the aggregate,  could  reasonably be expected to result in a
Material Adverse Effect.

5.7  PAYMENT OF TAXES.

          Except to the extent  permitted by subsection 6.3, all tax returns and
reports of Company and its Subsidiaries required to be filed by any of them have
been timely filed, and all taxes shown on such tax returns to be due and payable
and all assessments,  fees and other  governmental  charges upon Company and its
Subsidiaries and upon their respective properties,  assets,  income,  businesses
and  franchises  which are due and payable  have been paid when due and payable.
Company  knows of no  proposed  tax  assessment  against  Company  or any of its
Subsidiaries which is not being actively contested by Company or such Subsidiary
in good faith and by  appropriate  proceedings;  provided  that such reserves or
other  appropriate  provisions,  if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.

5.8  PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS;
     MATERIAL CONTRACTS.

          A. Neither  Company nor any of its  Subsidiaries  is in default in the
performance,  observance or fulfillment of any of the obligations,  covenants or
conditions  contained in any of its  Contractual  Obligations,  and no condition
exists  that,  with the  giving of  notice  or the lapse of time or both,  would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.

          B.  Neither  Company nor any of its  Subsidiaries  is a party to or is
otherwise  subject to any  agreements  or  instruments  or any  charter or other
internal restrictions which, individually or in the aggregate,  could reasonably
be expected to result in a Material Adverse Effect.

          C. Schedule 5.8 contains a true,  correct and complete list of all the
Material  Contracts  in effect on the  Closing  Date.  Except  as  described  on
Schedule  5.8, all such  Material  Contracts are in full force and effect and no
material defaults currently exist thereunder.

5.9  GOVERNMENTAL REGULATION.

          Neither  Company nor any of its  Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state  statute  or  regulation  which may limit its  ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.

5.10      SECURITIES ACTIVITIES.

          A.   Neither Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing
or carrying any Margin Stock.

          B.  Following  application of the proceeds of each Loan, not more than
25% of the value of the assets  (either of  Company  only or of Company  and its
Subsidiaries  on a  consolidated  basis) subject to the provisions of subsection
7.2  or  7.7 or  subject  to any  restriction  contained  in  any  agreement  or
instrument,  between  Company  and any Lender or any  Affiliate  of any  Lender,
relating to Indebtedness  and within the scope of subsection 8.2, will be Margin
Stock.

5.11      EMPLOYEE BENEFIT PLANS.

          A.  Company,  each of its  Subsidiaries  and each of their  respective
ERISA   Affiliates  are  in  compliance  with  all  applicable   provisions  and
requirements  of  ERISA  and  the  regulations  and  published   interpretations
thereunder  with respect to each Employee  Benefit Plan,  and have performed all
their  obligations  under each Employee Benefit Plan. Each Employee Benefit Plan
which is intended to qualify under Section  401(a) of the Internal  Revenue Code
is so qualified.

          B.   No ERISA Event has occurred or is reasonably
expected to occur.

          C. Except to the extent  required  under Section 4980B of the Internal
Revenue  Code [or  except as set forth in  Schedule  5.11  annexed  hereto],  no
Employee Benefit Plan provides health or welfare benefits  (through the purchase
of insurance or otherwise) for any retired or former employee of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates.

          D. As of the most  recent  valuation  date for any Pension  Plan,  the
amount of unfunded  benefit  liabilities  (as defined in Section  4001(a)(18) of
ERISA),  individually  or in the aggregate for all Pension Plans  (excluding for
purposes of such  computation  any Pension  Plans with  respect to which  assets
exceed benefit liabilities), does not exceed $500,000.

          E. As of the most recent  valuation date for each  Multiemployer  Plan
for which the actuarial report is available, the potential liability of Company,
its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal
from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when
aggregated  with such  potential  liability for a complete  withdrawal  from all
Multiemployer Plans, based on information  available pursuant to Section 4221(e)
of ERISA, does not exceed $500,000.

5.12      CERTAIN FEES.

          No broker's or finder's fee or commission will be payable with respect
to this Agreement or any of the transactions  contemplated  hereby,  and Company
hereby  indemnifies  Lenders  against,  and  agrees  that it will  hold  Lenders
harmless from, any claim,  demand or liability for any such broker's or finder's
fees alleged to have been incurred in  connection  herewith or therewith and any
expenses  (including  reasonable  fees,  expenses and  disbursements of counsel)
arising in connection with any such claim, demand or liability.

5.13      ENVIRONMENTAL PROTECTION.

          Except as set forth in Schedule 5.13 annexed hereto:

          (i)  neither  Company  nor any of its  Subsidiaries  nor any of  their
     respective  Facilities or operations are subject to any outstanding written
     order,  consent decree or settlement  agreement with any Person relating to
     (a)  any  Environmental  Law,  (b)  any  Environmental  Claim,  or (c)  any
     Hazardous Materials Activity;

          (ii)      neither Company nor any of its Subsidiaries
     has received any letter or request for information under
     Section 104 of the Comprehensive Environmental Response,
     Compensation, and Liability Act (42 U.S.C. Section  9604)
     or any comparable state law;

          (iii) there are and, to Company's knowledge,  have been no conditions,
     occurrences,  or Hazardous  Materials  Activities which could reasonably be
     expected to form the basis of an Environmental Claim against Company or any
     of its Subsidiaries;

          (iv)  neither  Company nor any of its  Subsidiaries  nor, to Company's
     knowledge,  any predecessor of Company or any of its Subsidiaries has filed
     any notice under any Environmental Law indicating past or present treatment
     of Hazardous Materials at any Facility, and none of Company's or any of its
     Subsidiaries'   operations   involves   the   generation,   transportation,
     treatment,  storage or disposal of  hazardous  waste,  as defined  under 40
     C.F.R. Parts 260-270 or any state equivalent; and

          (v)  compliance  with all  current or  reasonably  foreseeable  future
     requirements pursuant to or under Environmental Laws will not, individually
     or in the  aggregate,  have a  reasonable  possibility  of giving rise to a
     Material Adverse Effect.

          Notwithstanding  anything in this subsection 5.13 to the contrary,  no
event or condition  has occurred or is occurring  with respect to Company or any
of its Subsidiaries  relating to any Environmental Law, any Release of Hazardous
Materials,  or any Hazardous Materials Activity,  including any matter disclosed
on Schedule 5.13 annexed hereto,  which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect.

      EMPLOYEE MATTERS.

          There  is no  strike  or work  stoppage  in  existence  or  threatened
involving  Company or any of its Subsidiaries  that could reasonably be expected
to have a Material Adverse Effect.

5.15      SOLVENCY.

          Each Loan Party is and, upon the incurrence of any Obligations by such
Loan Party on any date on which this representation is made, will be, Solvent.

5.16      MATTERS RELATING TO COLLATERAL.

     A. CREATION,  PERFECTION AND PRIORITY OF LIENS.  The execution and delivery
of the Collateral Documents by Loan Parties, together with (i) the actions taken
on or prior to the date hereof pursuant to subsections  4.1D,  4.1E, 6.8 and 6.9
and (ii) the  delivery to  Administrative  Agent of any Pledged  Collateral  not
delivered to  Administrative  Agent at the time of execution and delivery of the
applicable  Collateral  Document  (all of which Pledged  Collateral  has been so
delivered)  are  effective  to create in favor of  Administrative  Agent for the
benefit of Lenders,  as security  for the  respective  Secured  Obligations  (as
defined in the applicable  Collateral Document in respect of any Collateral),  a
valid  and  perfected  First  Priority  Lien on all of the  Collateral,  and all
filings and other  actions  necessary  or  desirable to perfect and maintain the
perfection and First Priority  status of such Liens have been duly made or taken
and remain in full force and effect,  other than the filing of any UCC financing
statements  delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC  continuation  statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.

     B. GOVERNMENTAL AUTHORIZATIONS. No authorization,  approval or other action
by, and no notice to or filing with,  any  governmental  authority or regulatory
body is  required  for  either  (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of  Administrative  Agent pursuant to any
of the Collateral  Documents or (ii) the exercise by Administrative Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created  pursuant to any of the Collateral  Documents or created or provided for
by applicable law), except for filings or recordings  contemplated by subsection
5.16A and except as may be required,  in connection  with the disposition of any
Pledged  Collateral,  by laws  generally  affecting  the  offering  and  sale of
securities.

     C. ABSENCE OF  THIRD-PARTY  FILINGS.  Except such as may have been filed in
favor of  Administrative  Agent as  contemplated  by  subsection  5.16A,  (i) no
effective UCC financing statement, fixture filing or other instrument similar in
effect  covering all or any part of the  Collateral  is on file in any filing or
recording office and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.

     D.   MARGIN REGULATIONS.  The pledge of the Pledged
Collateral pursuant to the Collateral Documents does not
violate Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System.

     E. INFORMATION REGARDING COLLATERAL.  All information supplied to Agents by
or on behalf of any Loan Party with  respect to any of the  Collateral  (in each
case taken as a whole with respect to any particular Collateral) is accurate and
complete in all material  respects.  In furtherance  of the foregoing,  Holdings
owns no assets except for all the capital stock of Company; all IP Collateral is
owned by Company; and no IP Collateral is owned by Holdings or any Subsidiary.

5.17      DISCLOSURE.

          No  representation  or warranty of Company or any of its  Subsidiaries
contained in any Loan Document or in any other document,  certificate or written
statement  furnished  to  Lenders  by or on  behalf  of  Company  or  any of its
Subsidiaries  for use in connection with the  transactions  contemplated by this
Agreement  contains any untrue  statement of a material fact or omits to state a
material  fact (known to Company,  in the case of any document not  furnished by
it) necessary in order to make the  statements  contained  herein or therein not
misleading  in light of the  circumstances  in which  the same  were  made.  Any
projections and pro forma financial  information contained in such materials are
based  upon good  faith  estimates  and  assumptions  believed  by Company to be
reasonable  at  the  time  made,  it  being  recognized  by  Lenders  that  such
projections  as to future  events are not to be viewed as facts and that  actual
results during the period or periods covered by any such  projections may differ
from the projected  results.  There are no facts known (or which should upon the
reasonable  exercise of diligence be known) to Company  (other than matters of a
general  economic  nature)  that,  individually  or  in  the  aggregate,   could
reasonably be expected to result in a Material  Adverse Effect and that have not
been disclosed  herein or in such other  documents,  certificates and statements
furnished to Lenders for use in connection  with the  transactions  contemplated
hereby.


SECTION 6.     COMPANY'S AFFIRMATIVE COVENANTS

          Company  covenants and agrees that, so long as any of the  Commitments
hereunder  shall remain in effect and until  payment in full of all of the Loans
and other  Obligations  and the  cancellation  or  expiration  of all Letters of
Credit,  unless  Requisite  Lenders shall otherwise give prior written  consent,
Company shall perform,  and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.

6.1  FINANCIAL STATEMENTS AND OTHER REPORTS.

          Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting  established  and  administered  in accordance with sound
business practices to permit  preparation of financial  statements in conformity
with GAAP. Company will deliver to Agents and Lenders:

          (i) Monthly  Financials:  as soon as available and in any event within
     30 days after the end of each month ending after the Closing Date,  (a) the
     consolidated balance sheet of Company and its Subsidiaries as at the end of
     such month and the related consolidated statements of income, stockholders'
     equity and cash flows of Company  and its  Subsidiaries  for such month and
     for the period from the  beginning of the then  current  Fiscal Year to the
     end of such  month,  setting  forth in each  case in  comparative  form the
     corresponding  figures for the corresponding periods of the previous Fiscal
     Year, to the extent prepared on a monthly basis,  all in reasonable  detail
     and certified by the chief financial  officer,  chief accounting officer or
     controller of Company that they fairly present,  in all material  respects,
     the  financial  condition of Company and its  Subsidiaries  as at the dates
     indicated and the results of their  operations and their cash flows for the
     periods  indicated,  subject  to  changes  resulting  from audit and normal
     year-end  adjustments,  (b) a narrative report describing the operations of
     Company and its  Subsidiaries  in the form  prepared  for  presentation  to
     senior  management  for such month and for the period from the beginning of
     the then  current  Fiscal  Year to the end of such month and (c) reports by
     restaurant  concept,  showing sales,  comparative  restaurant sales growth,
     gross  profit  and  operating  contribution,  all  in  form  and  substance
     satisfactory to Agents, for such month;

          (ii)  Quarterly  Financials:  as soon as  available  and in any  event
     within 45 days after the end of each Fiscal Quarter,  (a) the  consolidated
     balance sheet of Company and its  Subsidiaries as at the end of such Fiscal
     Quarter and the related  consolidated  statements of income,  stockholders'
     equity and cash  flows of  Company  and its  Subsidiaries  for such  Fiscal
     Quarter and for the period from the  beginning of the then  current  Fiscal
     Year to the end of such  Fiscal  Quarter,  setting  forth  in each  case in
     comparative form the corresponding figures for the corresponding periods of
     the previous Fiscal Year and the  corresponding  figures from the Financial
     Plan for the current Fiscal Year, all in reasonable detail and certified by
     the chief  financial  officer of Company that they fairly  present,  in all
     material respects,  the financial condition of Company and its Subsidiaries
     as at the dates  indicated  and the results of their  operations  and their
     cash flows for the periods  indicated,  subject to changes  resulting  from
     audit and normal year-end  adjustments,  (b) a narrative report  describing
     the  operations  of Company and its  Subsidiaries  in the form prepared for
     presentation  to senior  management  for such  Fiscal  Quarter  and for the
     period from the  beginning  of the then  current  Fiscal Year to the end of
     such Fiscal Quarter and (c) reports by restaurant  concept,  showing sales,
     comparative   restaurant   sales   growth,   gross  profit  and   operating
     contribution,  all in form and substance  satisfactory to Agents,  for such
     Fiscal Quarter;

          (iii)  Year-End  Financials:  as soon as  available  and in any  event
     within 90 days  after the end of each  Fiscal  Year,  (a) the  consolidated
     balance sheet of Company and its  Subsidiaries as at the end of such Fiscal
     Year and the  related  consolidated  statements  of  income,  stockholders'
     equity and cash flows of Company and its Subsidiaries for such Fiscal Year,
     setting forth in each case in comparative  form the  corresponding  figures
     for the  previous  Fiscal  Year  and the  corresponding  figures  from  the
     Financial  Plan for the Fiscal Year covered by such  financial  statements,
     all in  reasonable  detail and  certified by the chief  financial  officer,
     chief accounting officer or controller of Company that they fairly present,
     in all  material  respects,  the  financial  condition  of Company  and its
     Subsidiaries as at the dates indicated and the results of their  operations
     and their cash flows for the  periods  indicated,  (b) a  narrative  report
     describing  the  operations  of Company  and its  Subsidiaries  in the form
     prepared for presentation to senior management for such Fiscal Year, (c) in
     the case of such  consolidated  financial  statements,  a report thereon of
     Deloitte & Touche or other  independent  certified  public  accountants  of
     recognized  national  standing  selected  by Company  and  satisfactory  to
     Agents,  which report shall be  unqualified,  shall express no doubts about
     the ability of Company and its Subsidiaries to continue as a going concern,
     and shall state that such consolidated financial statements fairly present,
     in all material  respects,  the consolidated  financial position of Company
     and its  Subsidiaries  as at the dates  indicated  and the results of their
     operations  and their cash flows for the periods  indicated  in  conformity
     with GAAP  applied  on a basis  consistent  with  prior  years  (except  as
     otherwise disclosed in such financial  statements) and that the examination
     by  such  accountants  in  connection  with  such  consolidated   financial
     statements  has been made in accordance  with generally  accepted  auditing
     standards and (d) reports by restaurant concept, showing sales, comparative
     restaurant sales growth,  gross profit and operating  contribution,  all in
     form and substance satisfactory to Agents, for such Fiscal Year;

          (iv)  Officer's  and  Compliance  Certificates:   together  with  each
     delivery of financial  statements of Company and its Subsidiaries  pursuant
     to subdivisions (i), (ii) and (iii) above, (a) an Officer's  Certificate of
     Company  stating that the signers have reviewed the terms of this Agreement
     and have made,  or caused to be made under their  supervision,  a review in
     reasonable  detail of the  transactions  and  condition  of Company and its
     Subsidiaries  during  the  accounting  period  covered  by  such  financial
     statements  and that such review has not disclosed the existence  during or
     at the end of such  accounting  period,  and that the  signers  do not have
     knowledge of the existence as at the date of such Officer's Certificate, of
     any  condition or event that  constitutes  an Event of Default or Potential
     Event of Default,  or, if any such  condition  or event  existed or exists,
     specifying  the nature  and period of  existence  thereof  and what  action
     Company has taken, is taking and proposes to take with respect thereto; and
     (b) a Compliance Certificate  demonstrating in reasonable detail compliance
     during  and  at the  end of the  applicable  accounting  periods  with  the
     restrictions  contained in Section 7, in each case to the extent compliance
     with  such  restrictions  is  required  to be  tested  at  the  end  of the
     applicable accounting period;

          (v)  Reconciliation  Statements:  if,  as a result  of any  change  in
     accounting  principles  and policies from those used in the  preparation of
     the  audited  financial  statements  referred  to in  subsection  5.3,  the
     consolidated financial statements of Company and its Subsidiaries delivered
     pursuant to subdivisions  (i), (ii), (iii) or (xiii) of this subsection 6.1
     will  differ  in any  material  respect  from  the  consolidated  financial
     statements that would have been delivered pursuant to such subdivisions had
     no such change in accounting  principles  and policies been made,  then (a)
     together  with the first  delivery  of  financial  statements  pursuant  to
     subdivision  (i),  (ii),  (iii) or (xiii) of this  subsection 6.1 following
     such  change,   consolidated   financial  statements  of  Company  and  its
     Subsidiaries  for (y) the current Fiscal Year to the effective date of such
     change and (z) the two full Fiscal Years  immediately  preceding the Fiscal
     Year in which such  change is made,  in each case  prepared  on a pro forma
     basis as if such  change had been in effect  during such  periods,  and (b)
     together with each delivery of financial statements pursuant to subdivision
     (i), (ii),  (iii) or (xiii) of this subsection 6.1 following such change, a
     written  statement  of the  chief  accounting  officer  or chief  financial
     officer of Company setting forth the differences (including any differences
     that would affect any calculations  relating to the financial covenants set
     forth in  subsection  7.6) which  would  have  resulted  if such  financial
     statements had been prepared without giving effect to such change;

          (vi)  Accountants'  Certification:  together  with  each  delivery  of
     consolidated  financial statements of Company and its Subsidiaries pursuant
     to  subdivision  (iii)  above,  a  written  statement  by  the  independent
     certified  public  accountants  giving the report  thereon (a) stating that
     their audit  examination has included a review of the terms of Section 7 of
     this Agreement as they relate to accounting  matters,  (b) stating whether,
     in  connection  with their audit  examination,  any condition or event that
     constitutes  an Event of Default or Potential  Event of Default has come to
     their  attention  and,  if such a  condition  or  event  has  come to their
     attention,  specifying the nature and period of existence thereof; provided
     that such  accountants  shall not be  liable  by reason of any  failure  to
     obtain knowledge of any such Event of Default or Potential Event of Default
     that would not be disclosed in the course of their audit  examination,  and
     (c) stating that based on their audit examination nothing has come to their
     attention that causes them to believe  either or both that the  information
     contained in the certificates  delivered  therewith pursuant to subdivision
     (iv) above is not correct or that the  matters set forth in the  Compliance
     Certificates delivered therewith pursuant to clause (b) of subdivision (iv)
     above for the applicable  Fiscal Year are not stated in accordance with the
     terms of this Agreement;

          (vii)  Accountants'  Reports:  promptly upon receipt  thereof  (unless
     restricted by  applicable  professional  standards),  copies of all reports
     submitted  to  Company  by  independent  certified  public  accountants  in
     connection  with each  annual,  interim or special  audit of the  financial
     statements  of  Company  and its  Subsidiaries  made  by such  accountants,
     including any comment letter submitted by such accountants to management in
     connection with their annual audit;

          (viii) SEC Filings and Press  Releases:  promptly upon their  becoming
     available,  copies of (a) all financial  statements,  reports,  notices and
     proxy  statements  sent or  made  available  generally  by  Company  to its
     security  holders or by any  Subsidiary of Company to its security  holders
     other than Company or another  Subsidiary  of Company,  (b) all regular and
     periodic reports and all registration statements (other than on Form S-8 or
     a similar form) and  prospectuses,  if any,  filed by Company or any of its
     Subsidiaries  with  any  securities  exchange  or with the  Securities  and
     Exchange  Commission or any governmental or private  regulatory  authority,
     and (c) all press releases and other statements made available generally by
     Company  or any of its  Subsidiaries  to  the  public  concerning  material
     developments in the business of Company or any of its Subsidiaries;

          (ix) Events of  Default,  etc.:  promptly  upon any officer of Company
     obtaining knowledge (a) of any condition or event that constitutes an Event
     of Default or Potential Event of Default, or becoming aware that any Lender
     has given any  notice  (other  than to  Administrative  Agent) or taken any
     other action with respect to a claimed Event of Default or Potential  Event
     of  Default,  (b) that any Person has given any notice to Company or any of
     its  Subsidiaries  or taken  any other  action  with  respect  to a claimed
     default or event or condition of the type  referred to in  subsection  8.2,
     (c) of any  condition  or event that would be required to be disclosed in a
     current report filed by Company with the Securities and Exchange Commission
     on Form 8-K  (Items  1, 2, 4, 5 and 6 of such Form as in effect on the date
     hereof) if Company were  required to file such  reports  under the Exchange
     Act,  or (d) of the  occurrence  of any event or change  that has caused or
     evidences,  either  in any case or in the  aggregate,  a  Material  Adverse
     Effect,  an  Officer's  Certificate  specifying  the  nature  and period of
     existence of such  condition,  event or change,  or  specifying  the notice
     given or action  taken by any such  Person and the  nature of such  claimed
     Event of Default,  Potential Event of Default, default, event or condition,
     and what  action  Company  has taken,  is taking and  proposes to take with
     respect thereto;

          (x) Litigation or Other Proceedings:  (a) promptly upon any officer of
     Company  obtaining  knowledge of (X) the institution  of, or  non-frivolous
     threat of, any action, suit, proceeding (whether  administrative,  judicial
     or  otherwise),   governmental  investigation  or  arbitration  against  or
     affecting  Company or any of its Subsidiaries or any property of Company or
     any  of  its  Subsidiaries  (collectively,  "PROCEEDINGS")  not  previously
     disclosed in writing by Company to Lenders or (Y) any material  development
     in any Proceeding that, in any case:

               (1)  if adversely determined, has a reasonable
          possibility of giving rise to a Material Adverse
          Effect; or

               (2) seeks to enjoin or otherwise  prevent the consummation of, or
          to  recover  any  damages  or  obtain  relief  as  a  result  of,  the
          transactions contemplated hereby;

     written  notice  thereof  together  with such other  information  as may be
     reasonably  available  to Company to enable  Lenders  and their  respective
     counsel to evaluate such matters;  and (b) within twenty days after the end
     of each Fiscal Quarter, a schedule of all Proceedings  involving an alleged
     liability  of,  or  claims  against  or  affecting,  Company  or any of its
     Subsidiaries equal to or greater than $100,000,  and promptly after request
     by Agents such other  information as may be reasonably  requested by Agents
     to enable  Agents  and their  respective  counsel to  evaluate  any of such
     Proceedings;

          (xi) ERISA Events:  promptly upon becoming  aware of the occurrence of
     or forthcoming  occurrence of any ERISA Event, a written notice  specifying
     the nature thereof,  what action Company, any of its Subsidiaries or any of
     their  respective ERISA Affiliates has taken, is taking or proposes to take
     with respect thereto and, when known, any action taken or threatened by the
     Internal Revenue Service,  the Department of Labor or the PBGC with respect
     thereto;

          (xii) ERISA Notices:  with reasonable  promptness,  copies of (a) each
     Schedule B (Actuarial  Information) to the annual report (Form 5500 Series)
     filed by Company,  any of its Subsidiaries or any of their respective ERISA
     Affiliates  with the Internal  Revenue Service with respect to each Pension
     Plan; (b) all notices  received by Company,  any of its Subsidiaries or any
     of their  respective  ERISA  Affiliates from a  Multiemployer  Plan sponsor
     concerning  an ERISA  Event;  and (c)  copies of such  other  documents  or
     governmental  reports or filings  relating to any Employee  Benefit Plan as
     Administrative Agent shall reasonably request;

          (xiii)  Financial  Plans:  as soon as practicable  and in any event no
     later than ten days after the beginning of each Fiscal Year, a consolidated
     plan and  financial  forecast  for  such  Fiscal  Year  and the  next  four
     succeeding  Fiscal  Years (the  "FINANCIAL  PLAN" for such  Fiscal  Years),
     including  (a) a  forecasted  consolidated  balance  sheet  and  forecasted
     consolidated  statements  of  income  and  cash  flows of  Company  and its
     Subsidiaries  for each such Fiscal Year,  together with pro forma financial
     covenant  calculations  for each such  Fiscal Year  determined  in a manner
     consistent  with  financial  covenant  calculations  shown in a  Compliance
     Certificate  and an explanation of the  assumptions on which such forecasts
     are based, (b) forecasted  consolidated statements of income and cash flows
     of Company and its  Subsidiaries  for each quarter of the first such Fiscal
     Year,  together  with an  explanation  of the  assumptions  on  which  such
     forecasts are based, (c) the amount of forecasted  unallocated overhead for
     each such Fiscal Year,  (d)  performance  data by  restaurant  concept with
     respect to sales,  comparative  restaurant  sales growth,  gross profit and
     operating  contribution  and (e) such other  information and projections as
     any Lender may reasonably request;

          (xiv)  Insurance:  as soon as practicable and in any event by April 30
     of each year, a report in form and substance satisfactory to Administrative
     Agent outlining all material insurance  coverage  maintained as of the date
     of such report by Company and its Subsidiaries  and all material  insurance
     coverage  planned to be maintained by Company and its  Subsidiaries  in the
     twelve months ending on the next succeeding March 28;

          (xv)      Board of Directors:  with reasonable
     promptness, written notice of any change in the Board of
     Directors of Company;

          (xvi) New Subsidiaries: promptly upon any Person becoming a Subsidiary
     of Company,  a written notice setting forth with respect to such Person (a)
     the date on which such Person became a Subsidiary of Company and (b) all of
     the data  required  to be set forth in  Schedule  5.1  annexed  hereto with
     respect to all  Subsidiaries  of  Company  (it being  understood  that such
     written  notice shall be deemed to supplement  Schedule 5.1 annexed  hereto
     for all purposes of this Agreement;

          (xvii)  Material  Contracts:  promptly,  and in any event  within  ten
     Business  Days  after  any  Material  Contract  of  Company  or  any of its
     Subsidiaries  is  terminated  or  amended  in a manner  that is  materially
     adverse  to  Company  or such  Subsidiary,  as the case may be,  or any new
     Material  Contract is entered  into, a written  statement  describing  such
     event with copies of such  material  amendments  or new  contracts,  and an
     explanation of any actions being taken with respect thereto;

          (xviii) UCC Search Report:  As promptly as practicable  after the date
     of delivery to Administrative Agent of any UCC financing statement executed
     by any Loan  Party  pursuant  to  subsection  4.1E(iv)  or 6.8A,  copies of
     completed UCC searches evidencing the proper filing, recording and indexing
     of all such  UCC  financing  statement  and  listing  all  other  effective
     financing  statements  that name such Loan Party as debtor,  together  with
     copies of all such other financing  statements not previously  delivered to
     Administrative Agent by or on behalf of Company or such Loan Party; and

          (xix)     1996 Audited Financial Statements:  Within
     five Business Days of the Closing Date, audited financial
     statements of Holdings and its Subsidiaries for the
     Fiscal Year ended December 30, 1996, together with the
     report of Holdings' independent accountants thereon; and

          (xx)      Other Information:  with reasonable prompt-
     ness, such other information and data with respect to
     Company or any of its Subsidiaries as from time to time
     may be reasonably requested by any Lender.

6.2  CORPORATE EXISTENCE, ETC.

          Except as permitted under subsection 7.7, Company will, and will cause
each of its  Subsidiaries  to, at all times  preserve and keep in full force and
effect its  corporate  existence and all rights and  franchises  material to its
business;  provided,  however that neither  Company nor any of its  Subsidiaries
shall be  required  to  preserve  any such  right or  franchise  if the Board of
Directors of Company or such Subsidiary  shall  determine that the  preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.

6.3  PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.

          A. Company will, and will cause each of its  Subsidiaries  to, pay all
taxes,  assessments and other governmental charges imposed upon it or any of its
properties  or  assets  or in  respect  of  any  of its  income,  businesses  or
franchises before any penalty accrues thereon,  and all claims (including claims
for labor,  services,  materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its  properties or
assets,  prior to the time  when any  penalty  or fine  shall be  incurred  with
respect  thereto;  provided  that no such  charge or claim need be paid if it is
being contested in good faith by appropriate proceedings promptly instituted and
diligently  conducted,  so  long  as  (1)  such  reserve  or  other  appropriate
provision,  if any, as shall be required in conformity with GAAP shall have been
made therefor and (2) in the case of a charge or claim which has or may become a
Lien  against  any of the  Collateral,  such  contest  proceedings  conclusively
operate to stay the sale of any portion of the Collateral to satisfy such charge
or claim.

          B. Company will not,  nor will it permit any of its  Subsidiaries  to,
file or  consent to the filing of any  consolidated  income tax return  with any
Person (other than Company or any of its Subsidiaries).

6.4  MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
     INSURANCE/ CONDEMNATION PROCEEDS.

          A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries  to,  maintain or cause to be  maintained  in good repair,  working
order and condition,  ordinary wear and tear excepted,  all material  properties
used or useful in the business of Company and its  Subsidiaries  (including  all
Intellectual  Property)  and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.

          B.  INSURANCE.  Company will maintain or cause to be maintained,  with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance,  business  interruption  insurance and casualty
insurance  with  respect  to  liabilities,  losses or damage in  respect  of the
assets,  properties  and  businesses  of  Company  and its  Subsidiaries  as may
customarily be carried or maintained under similar circumstances by corporations
of established  reputation engaged in similar  businesses,  in each case in such
amounts (giving effect to self-insurance),  with such deductibles, covering such
risks and  otherwise  on such terms and  conditions  as shall be  customary  for
corporations similarly situated in the industry. Without limiting the generality
of the  foregoing,  Company will  maintain or cause to be  maintained  (i) flood
insurance  with  respect  to each  Flood  Hazard  Property  that is located in a
community that  participates  in the National Flood Insurance  Program,  in each
case in compliance with any applicable  regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance,  with such insurance companies,  in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory  to Agents in their  commercially  reasonable  judgment.  Each such
policy of  insurance  shall (a) name  Administrative  Agent for the  benefit  of
Lenders as an additional  insured thereunder as its interests may appear and (b)
in the case of each business interruption and casualty insurance policy, contain
a loss payable  clause or  endorsement,  satisfactory  in form and  substance to
Agents, that names  Administrative  Agent for the benefit of Lenders as the loss
payee  thereunder for any covered loss in excess of $500,000 and provides for at
least 30 days prior written notice to Agents of any modification or cancellation
of such policy.

6.5  INSPECTION RIGHTS; AUDITS OF INVENTORY AND ACCOUNTS
     RECEIVABLE; LENDER MEETING.

          A.  INSPECTION  RIGHTS.  Company  shall,  and shall  cause each of its
Subsidiaries to, permit any authorized  representatives designated by any Lender
to  visit  and  inspect  any  of  the  properties  of  Company  or of any of its
Subsidiaries,  to inspect,  copy and take extracts from its and their  financial
and  accounting  records,  and to discuss its and their  affairs,  finances  and
accounts  with  its  and  their  officers  and  independent  public  accountants
(provided  that Company may, if it so chooses,  be present at or  participate in
any such  discussion),  all upon reasonable  notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.

          B.  LENDER  MEETING.  Company  will,  upon the  request  of  Agents or
Requisite  Lenders,  participate  in a meeting of Agents and Lenders once during
each Fiscal  Year to be held at  Company's  corporate  offices (or at such other
location  as may be  agreed to by  Company  and  Agents)  at such time as may be
agreed to by Company and Agents.

6.6  COMPLIANCE WITH LAWS, ETC.

          Company shall comply, and shall cause each of its Subsidiaries and all
other Persons on or occupying any Facilities to comply, with the requirements of
all applicable laws, rules, regulations and orders of any governmental authority
(including all Environmental Laws), noncompliance with which could reasonably be
expected to cause, individually or in the aggregate, a Material Adverse Effect.

6.7  ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.;
     COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS
     ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF
     ENVIRONMENTAL LAWS.

          A. ENVIRONMENTAL REVIEW AND INVESTIGATION.  Company agrees that Agents
may,  from  time to time and in their  reasonable  discretion,  (i)  retain,  at
Company's  expense,  an  independent   professional  consultant  to  review  any
environmental audits, investigations, analyses and reports relating to Hazardous
Materials  prepared by or for Company and (ii) conduct its own  investigation of
any  Facility;  provided  that,  in the case of any  Facility  no longer  owned,
leased,  operated or used by Company or any of its  Subsidiaries,  Company shall
only be  obligated  to use its best  efforts to obtain  permission  for  Agents'
professional  consultant  to  conduct an  investigation  of such  Facility.  For
purposes of conducting such a review and/or investigation, Company hereby grants
to Agents and their respective  agents,  employees,  consultants and contractors
the right to enter into or onto any Facilities currently owned, leased, operated
or used by Company or any of its  Subsidiaries and to perform such tests on such
property   (including   taking  samples  of  soil,   groundwater  and  suspected
asbestos-containing   materials)  as  are  reasonably  necessary  in  connection
therewith.  Any such  investigation  of any Facility shall be conducted,  unless
otherwise agreed to by Company and Agents,  during normal business hours and, to
the extent  reasonably  practicable,  shall be  conducted so as not to interfere
with the ongoing  operations  at such Facility or to cause any damage or loss to
any property at such Facility.  Company and Agents hereby  acknowledge and agree
that any report of any investigation conducted at the request of Agents pursuant
to this subsection 6.7A will be obtained and shall be used by Agents and Lenders
for the purposes of Lenders'  internal credit  decisions,  to monitor and police
the Loans and to protect  Lenders'  security  interests,  if any, created by the
Loan  Documents.  Agents  agree to deliver a copy of any such  report to Company
with the  understanding  that Company  acknowledges  and agrees that (x) it will
indemnify and hold harmless each Agent and each Lender from any costs, losses or
liabilities relating to Company's use of or reliance on such report, (y) neither
of the Agents nor any Lender makes any  representation  or warranty with respect
to such report,  and (z) by  delivering  such report to Company,  neither of the
Agents nor any Lender is requiring or  recommending  the  implementation  of any
suggestions or recommendations contained in such report.

          B.   ENVIRONMENTAL DISCLOSURE.  Company will deliver
to Agents and Lenders:

          (i) Environmental Audits and Reports. As soon as practicable following
     receipt  thereof,  copies  of  all  environmental  audits,  investigations,
     analyses  and  reports  of any  kind  or  character,  whether  prepared  by
     personnel  of  Company  or  any  of  its  Subsidiaries  or  by  independent
     consultants, governmental authorities or any other Persons, with respect to
     significant environmental matters at any Facility;

          (ii) Notice of Certain Releases,  Remedial Actions, Etc. Promptly upon
     the occurrence thereof,  written notice describing in reasonable detail (a)
     any  Release  required  to be  reported  to any  federal,  state  or  local
     governmental or regulatory agency under any applicable  Environmental Laws,
     (b) any remedial action taken by Company or any other Person in response to
     (1) any  Hazardous  Materials  Activities  the  existence  of  which  has a
     reasonable  possibility  of resulting in one or more  Environmental  Claims
     having, individually or in the aggregate, a Material Adverse Effect, or (2)
     any  Environmental  Claims that,  individually or in the aggregate,  have a
     reasonable  possibility of resulting in a Material Adverse Effect,  and (c)
     Company's  discovery of any  occurrence  or condition on any real  property
     adjoining or in the vicinity of any Facility that could cause such Facility
     or any part  thereof  to be  subject to any  material  restrictions  on the
     ownership,   occupancy,   transferability   or  use   thereof   under   any
     Environmental Laws.

          (iii) Written Communications Regarding Environmental Claims, Releases,
     Etc. As soon as  practicable  following  the sending or receipt  thereof by
     Company  or  any of  its  Subsidiaries,  a copy  of  any  and  all  written
     communications   with  respect  to  (a)  any  Environmental   Claims  that,
     individually or in the aggregate,  have a reasonable  possibility of giving
     rise to a Material Adverse Effect,  (b) any Release required to be reported
     to any federal,  state or local  governmental or regulatory agency, and (c)
     any request for information from any governmental agency that suggests such
     agency is  investigating  whether Company or any of its Subsidiaries may be
     potentially responsible for any Hazardous Materials Activity.

          (iv) Notice of Certain Proposed Actions Having  Environmental  Impact.
     Prompt  written  notice  describing in  reasonable  detail (a) any proposed
     acquisition  of  stock,  assets,  or  property  by  Company  or  any of its
     Subsidiaries that could reasonably be expected to (1) expose Company or any
     of its  Subsidiaries  to, or result  in,  Environmental  Claims  that could
     reasonably  be  expected  to  have,  individually  or in the  aggregate,  a
     Material  Adverse Effect or (2) affect the ability of Company or any of its
     Subsidiaries to maintain in full force and effect all material Governmental
     Authorizations  required under any Environmental  Laws for their respective
     operations and (b) any proposed action to be taken by Company or any of its
     Subsidiaries to commence manufacturing or other industrial operations or to
     modify current  operations in a manner that could reasonably be expected to
     subject Company or any of its Subsidiaries to any additional obligations or
     requirements under any Environmental Laws.

          (v)  Other  Information.   With  reasonable  promptness,   such  other
     documents and information as from time to time may be reasonably  requested
     by Agents in relation to any matters disclosed  pursuant to this subsection
     6.7.

          C.   COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS
ACTIVITIES, ENVIRONMENTAL CLAIMS AND VIOLATIONS OF
ENVIRONMENTAL LAWS.

          (i)  Remedial  Actions  Relating to  Hazardous  Materials  Activities.
     Company shall promptly undertake,  and shall cause each of its Subsidiaries
     promptly  to  undertake,  any and all  investigations,  studies,  sampling,
     testing, abatement, cleanup, removal, remediation or other response actions
     necessary to remove,  remediate,  clean up or abate any Hazardous Materials
     Activity  on,  under or about  any  Facility  that is in  violation  of any
     Environmental  Laws or that  presents a material  risk of giving rise to an
     Environmental  Claim.  In the  event  Company  or  any of its  Subsidiaries
     undertakes any such action with respect to any Hazardous Materials, Company
     or such  Subsidiary  shall  conduct and complete  such action in compliance
     with all applicable Environmental Laws and in accordance with the policies,
     orders  and  directives  of  all  federal,  state  and  local  governmental
     authorities  except when,  and only to the extent  that,  Company's or such
     Subsidiary's liability with respect to such Hazardous Materials Activity is
     being contested in good faith by Company or such Subsidiary.

          (ii) Actions with Respect to  Environmental  Claims and  Violations of
     Environmental  Laws.  Company shall  promptly take, and shall cause each of
     its  Subsidiaries  promptly to take,  any and all actions  necessary to (i)
     cure any  violation  of  applicable  Environmental  Laws by  Company or its
     Subsidiaries  and (ii) make an  appropriate  response to any  Environmental
     Claim  against  Company  or any  of  its  Subsidiaries  and  discharge  any
     obligations it may have to any Person thereunder.

6.8  EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL
     PROPERTY COLLATERAL DOCUMENTS BY CERTAIN SUBSIDIARIES
     AND FUTURE SUBSIDIARIES; EXECUTION OF AFFILIATED
     STOCKHOLDER PLEDGE AGREEMENT BY FUTURE AFFILIATED
     STOCKHOLDERS; IP COLLATERAL.

          A. EXECUTION OF SUBSIDIARY  GUARANTY AND PERSONAL PROPERTY  COLLATERAL
DOCUMENTS.  In the event that any Person  becomes a Subsidiary  of Company after
the date hereof,  Company will promptly notify Administrative Agent of that fact
and cause such  Subsidiary  to execute  and  deliver to  Administrative  Agent a
counterpart of the Subsidiary  Guaranty and a Subsidiary  Pledge Agreement and a
Subsidiary  Security  Agreement and to take all such further actions and execute
all such further  documents and instruments  (including  actions,  documents and
instruments  comparable  to  those  described  in  subsection  4.1E)  as  may be
necessary  or,  in the  opinion  of  Agents,  desirable  to  create  in favor of
Administrative  Agent,  for the benefit of Lenders,  a valid and perfected First
Priority  Lien  on all  of the  personal  and  mixed  property  assets  of  such
Subsidiary described in the applicable forms of Collateral Documents.

          B. SUBSIDIARY  CHARTER DOCUMENTS,  LEGAL OPINIONS,  ETC. Company shall
deliver  to  Administrative  Agent,  together  with  such  Loan  Documents,  (i)
certified copies of such Subsidiary's  Certificate or Articles of Incorporation,
together  with a good  standing  certificate  from the Secretary of State of the
jurisdiction of its  incorporation  and each other state in which such Person is
qualified as a foreign  corporation to do business and, to the extent  generally
available, a certificate or other evidence of good standing as to payment of any
applicable  franchise or similar taxes from the appropriate  taxing authority of
each of such  jurisdictions,  each to be  dated a  recent  date  prior  to their
delivery  to  Administrative  Agent,  (ii) a copy of such  Subsidiary's  Bylaws,
certified by its  corporate  secretary or an assistant  secretary as of a recent
date  prior to their  delivery  to  Administrative  Agent,  (iii) a  certificate
executed by the secretary or an assistant secretary of such Subsidiary as to (a)
the fact  that the  attached  resolutions  of the  Board  of  Directors  of such
Subsidiary approving and authorizing the execution,  delivery and performance of
such Loan  Documents  are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents,  and (iv) a favorable  opinion of counsel to such
Subsidiary,  in form and substance  satisfactory to Agents and their  respective
counsel,  as to (a) the due  organization  and good standing of such Subsidiary,
(b) the due  authorization,  execution  and delivery by such  Subsidiary of such
Loan  Documents,  (c) the  enforceability  of such Loan  Documents  against such
Subsidiary,  (d) such other matters  (including matters relating to the creation
and  perfection of Liens in any Collateral  pursuant to such Loan  Documents) as
Agents may reasonably  request,  all of the foregoing to be satisfactory in form
and substance to Agents and their respective counsel.

          C. EXECUTION OF AFFILIATED STOCKHOLDER PLEDGE AGREEMENT.  In the event
that any Person becomes an Affiliated Stockholder after the date hereof, Company
will promptly notify Administrative Agent of that fact and cause such Affiliated
Stockholder to execute and deliver to Administrative  Agent a counterpart of the
Affiliated Stockholder Pledge Agreement.

          D.  IP  COLLATERAL.  If any  Subsidiary  becomes  an  owner  of any IP
Collateral,  it will  promptly  execute  and deliver to  Administrative  Agent a
copyright security agreement or a trademark  security  agreement,  or such other
security agreement as Administrative  Agent shall deem appropriate and take such
further  action and execute such further  documents  and  instruments  as may be
necessary,  or in the opinion of  Administrative  Agent,  desirable to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and perfected
First Priority Lien on such IP Collateral.

6.9  CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO
     ADDITIONAL REAL PROPERTY COLLATERAL.

          A.   CONFORMING LEASEHOLD INTERESTS.  If Company or
any of its Subsidiaries acquires any Leasehold Property,
Company shall, or shall cause such Subsidiary to, cause such
Leasehold Property to be a Conforming Leasehold Interest.

          B. ADDITIONAL MORTGAGES,  ETC. From and after the Closing Date, in the
event that (i) Company or any Subsidiary  Guarantor acquires any fee interest in
real property or any Material  Leasehold Property or (ii) at the time any Person
becomes a  Subsidiary  Guarantor,  such Person owns or holds any fee interest in
real property or any Material Leasehold  Property,  in either case excluding any
such Real Property Asset the  encumbrancing of which requires the consent of any
applicable  lessor or (in the case of clause  (ii) above)  then-existing  senior
lienholder,  where  Company  and its  Subsidiaries  are  unable to  obtain  such
lessor's or senior  lienholder's  consent (any such  non-excluded  Real Property
Asset  described  in the  foregoing  clause  (i) or (ii)  being  an  "ADDITIONAL
MORTGAGED  PROPERTY"),  Company or such  Subsidiary  Guarantor  shall deliver to
Administrative  Agent,  as soon as practicable  after such Person  acquires such
Additional Mortgaged Property or becomes a Subsidiary Guarantor, as the case may
be, the following:

          (i)  Additional Mortgage.  A fully executed and
     notarized Mortgage (an "ADDITIONAL MORTGAGE"), duly
     recorded in all appropriate places in all applicable
     jurisdictions, encumbering the interest of such Loan
     Party in such Additional Mortgaged Property;

          (ii) Opinions of Counsel.  (a) A favorable  opinion of counsel to such
     Loan  Party,  in form  and  substance  satisfactory  to  Agents  and  their
     respective counsel, as to the due authorization,  execution and delivery by
     such Loan  Party of such  Additional  Mortgage  and such  other  matters as
     Agents may reasonably request, and (b) if required by Agents, an opinion of
     counsel (which counsel shall be reasonably  satisfactory  to Agents) in the
     state in which such Additional  Mortgaged  Property is located with respect
     to the  enforceability of the form of Additional  Mortgage recorded in such
     state and such other matters (including any matters governed by the laws of
     such state regarding personal property security interests in respect of any
     Collateral)  as Agents  may  reasonably  request,  in each case in form and
     substance reasonably satisfactory to Agents;

          (iii) Landlord Consent and Estoppel;  Recorded Leasehold Interest.  In
     the case of an  Additional  Mortgaged  Property  consisting  of a Leasehold
     Property,  (a) a Landlord  Consent  and  Estoppel,  unless  Company or such
     Subsidiary  is unable to obtain the  Landlord  Consent and  Estoppel  after
     using  commercially  reasonable efforts to obtain the same and (b) evidence
     that such Leasehold Property is a Recorded Leasehold Interest;

          (iv) Title  Insurance.  (a) If required by Agents,  an ALTA  mortgagee
     title  insurance  policy  or  an  unconditional   commitment  therefor  (an
     "ADDITIONAL  MORTGAGE  POLICY") issued by the Title Company with respect to
     such Additional  Mortgaged  Property,  in an amount satisfactory to Agents,
     insuring  fee  simple  title to, or a valid  leasehold  interest  in,  such
     Additional Mortgaged Property vested in such Loan Party and assuring Agents
     that  such  Additional  Mortgage  creates  a valid  and  enforceable  First
     Priority mortgage Lien on such Additional Mortgaged Property,  subject only
     to a standard survey exception,  which Additional Mortgage Policy (1) shall
     include an endorsement for mechanics' liens, for future advances under this
     Agreement and for any other matters reasonably  requested by Agents and (2)
     shall provide for affirmative  insurance and such reinsurance as Agents may
     reasonably request,  all of the foregoing in form and substance  reasonably
     satisfactory to Agents;  and (b) evidence  satisfactory to Agents that such
     Loan Party has (i)  delivered  to the Title  Company all  certificates  and
     affidavits required by the Title Company in connection with the issuance of
     the Additional Mortgage Policy and (ii) paid to the Title Company or to the
     appropriate governmental authorities all expenses and premiums of the Title
     Company in connection  with the issuance of the Additional  Mortgage Policy
     and all  recording  and  stamp  taxes  (including  mortgage  recording  and
     intangible  taxes)  payable in connection  with  recording  the  Additional
     Mortgage in the appropriate real estate records;

          (v) Title Report.  If no Additional  Mortgage  Policy is required with
     respect to such Additional Mortgaged Property, a title report issued by the
     Title  Company with respect  thereto,  dated not more than 30 days prior to
     the date such  Additional  Mortgage is to be recorded and  satisfactory  in
     form and substance to Agents;

          (vi)      Copies of Documents Relating to Title
     Exceptions.  Copies of all recorded documents listed as
     exceptions to title or otherwise referred to in the
     Additional Mortgage Policy or title report delivered
     pursuant to clause (v) or (vi) above;

          (vii) Matters Relating to Flood Hazard Properties. (a) Evidence, which
     may be in the form of a letter  from an  insurance  broker  or a  municipal
     engineer,  as to (1) whether such Additional  Mortgaged Property is a Flood
     Hazard  Property and (2) if so,  whether the  community in which such Flood
     Hazard Property is located is participating in the National Flood Insurance
     Program,  (b) if such  Additional  Mortgaged  Property  is a  Flood  Hazard
     Property,  such Loan Party's written  acknowledgement of receipt of written
     notification from Administrative  Agent (1) that such Additional  Mortgaged
     Property is a Flood Hazard  Property and (2) as to whether the community in
     which such  Flood  Hazard  Property  is  located  is  participating  in the
     National  Flood  Insurance  Program,  and (c) in the event such  Additional
     Mortgaged  Property  is a  Flood  Hazard  Property  that  is  located  in a
     community  that  participates  in the  National  Flood  Insurance  Program,
     evidence that Company has obtained flood insurance in respect of such Flood
     Hazard Property to the extent required under the applicable  regulations of
     the Board of Governors of the Federal Reserve System; and

          (viii) Environmental  Audit. If required by Agents,  reports and other
     information,  in form,  scope and  substance  satisfactory  to  Agents  and
     prepared by environmental  consultants  satisfactory to Agents,  concerning
     any  environmental  hazards or  liabilities  to which Company or any of its
     Subsidiaries  may be  subject  with  respect to such  Additional  Mortgaged
     Property.

6.10      INTEREST RATE PROTECTION.

          At all times  after the date which is 90 days after the  Closing  Date
until the second  anniversary  of the Closing Date,  Company  shall  maintain in
effect one or more Interest  Rate  Agreements  with respect to the Loans,  in an
aggregate  notional  principal  amount  of not less  than  50% of the  aggregate
principal amount of the Term Loans outstanding from time to time, which Interest
Rate Agreements shall have the effect of establishing a maximum interest rate to
the  satisfaction  of Syndication  Agent per annum with respect to such notional
principal amount,  each such Interest Rate Agreement to be in form and substance
satisfactory to Syndication Agent and with a term of not less than two years.

6.11      ESCROW ACCOUNT.

          Immediately  upon the closing of the Sale and Leaseback  Transactions,
Company shall deposit  $22,100,000  in cash proceeds from the Sale and Leaseback
Transactions  in an account  maintained  by  Administrative  Agent (the  "ESCROW
ACCOUNT").  No other  moneys  shall be deposited  into the Escrow  Account.  The
Escrow Account will be established with and held by Administrative  Agent, which
shall have sole dominion and control over the Escrow Account. Amounts on deposit
in the Escrow  Account  may be  withdrawn  at the request of Company and used to
complete the  Repurchase  as soon as  practicable  after the closing date of the
Sale and Leaseback Transactions, but in any event prior to November 15, 1997. If
the Repurchase has not been completed within such period, such proceeds shall be
utilized (1) to prepay the Loans pursuant to subsection 2.4B(iii)(f),  or (2) to
pay costs, as incurred,  for the construction or acquisition of new restaurants;
provided  that such  proceeds  shall be utilized as provided in clause (1) above
unless (a) Company  shall have  provided  Agents a plan  (showing in  reasonable
detail (i) intended restaurant  locations,  (ii) intended  restaurant  concepts,
(iii) anticipated timing of construction and opening, (iv) anticipated sales and
operating profits for the following three Fiscal Years for such restaurant,  (v)
estimated capital expenditures related thereto and (vi) estimated square footage
of each such  restaurant) for the construction or acquisition of new restaurants
on  or  before  November  15,  1997,  and  (b)  such  proceeds  shall  be  spent
substantially in accordance with such plan.

6.12      RECAPITALIZATION FEES.

     The aggregate amount of fees and expenses incurred by Company in connection
with the Recapitalization shall not exceed $4,500,000.


SECTION 7.     COMPANY'S NEGATIVE COVENANTS

          Company  covenants and agrees that, so long as any of the  Commitments
hereunder  shall remain in effect and until  payment in full of all of the Loans
and other  Obligations  and the  cancellation  or  expiration  of all Letters of
Credit,  unless  Requisite  Lenders shall otherwise give prior written  consent,
Company shall perform,  and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.

7.1  INDEBTEDNESS.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
directly or indirectly,  create,  incur, assume or guaranty, or otherwise become
or remain  directly  or  indirectly  liable with  respect to, any  Indebtedness,
except:

          (i)  Company may become and remain liable with
     respect to the Obligations;

          (ii) Company and its  Subsidiaries  may become and remain  liable with
     respect to Contingent Obligations permitted by subsection 7.4 and, upon any
     matured  obligations  actually arising pursuant  thereto,  the Indebtedness
     corresponding to the Contingent Obligations so extinguished;

          (iii) Company and its  Subsidiaries  may become and remain liable with
     respect to Indebtedness in respect of Capital Leases in an aggregate amount
     not exceeding  $5,000,000;  provided that such Capital Leases are permitted
     under the terms of subsections 7.6, 7.8 and 7.9;

          (iv) Company may become and remain liable with respect to Indebtedness
     to any of its wholly-owned Subsidiaries, and any wholly-owned Subsidiary of
     Company  may become and  remain  liable  with  respect to  Indebtedness  to
     Company or any other wholly-owned Subsidiary of Company;  provided that (a)
     all such intercompany  Indebtedness shall be evidenced by promissory notes,
     (b)  all  such  intercompany  Indebtedness  owed by  Company  to any of its
     Subsidiaries  shall be  subordinated  in right of payment to the payment in
     full of the Obligations pursuant to the terms of the applicable  promissory
     notes or an intercompany  subordination  agreement,  and (c) any payment by
     any  Subsidiary  of Company  under any  guaranty of the  Obligations  shall
     result  in a  pro  tanto  reduction  of  the  amount  of  any  intercompany
     Indebtedness  owed  by  such  Subsidiary  to  Company  or  to  any  of  its
     Subsidiaries for whose benefit such payment is made;

          (v)  Company and its Subsidiaries, as applicable, may
     remain liable with respect to Indebtedness described in
     Schedule 7.1 annexed hereto; and

          (vi) Company and its  Subsidiaries  may become and remain  liable with
     respect  to other  Indebtedness  in an  aggregate  principal  amount not to
     exceed $1,000,000 at any time outstanding.

7.2  LIENS AND RELATED MATTERS.

          A.  PROHIBITION ON LIENS.  Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly,  create, incur, assume or permit
to  exist  any  Lien on or with  respect  to any  property  or asset of any kind
(including   any  document  or  instrument  in  respect  of  goods  or  accounts
receivable)  of  Company  or any of  its  Subsidiaries,  whether  now  owned  or
hereafter  acquired,  or any income or profits therefrom,  or file or permit the
filing  of, or permit to remain in  effect,  any  financing  statement  or other
similar notice of any Lien with respect to any such property,  asset,  income or
profits  under the  Uniform  Commercial  Code of any State or under any  similar
recording or notice statute, except:

          (i)  Permitted Encumbrances;

          (ii)      Liens granted pursuant to the Collateral
     Documents;

          (iii)     Liens described in Schedule 7.2 annexed
     hereto; and

          (iv)      Other Liens securing Indebtedness in an
     aggregate amount not to exceed $1,000,000 at any time
     outstanding.

     B.  EQUITABLE  LIEN  IN  FAVOR  OF  LENDERS.  If  Company  or  any  of  its
Subsidiaries  shall  create or assume  any Lien  upon any of its  properties  or
assets,  whether now owned or hereafter  acquired,  other than Liens excepted by
the  provisions of subsection  7.2A, it shall make or cause to be made effective
provision  whereby  the  Obligations  will be secured by such Lien  equally  and
ratably with any and all other Indebtedness  secured thereby as long as any such
Indebtedness shall be so secured; provided that,  notwithstanding the foregoing,
this  covenant  shall not be construed as a consent by Requisite  Lenders to the
creation or  assumption  of any such Lien not  permitted  by the  provisions  of
subsection 7.2A.

     C. NO FURTHER NEGATIVE  PLEDGES.  Except with respect to specific  property
encumbered to secure payment of particular  Indebtedness  or to be sold pursuant
to an executed  agreement with respect to an Asset Sale, neither Company nor any
of its  Subsidiaries  shall enter into any  agreement  (other than an  agreement
prohibiting  only the  creation  of Liens  securing  Subordinated  Indebtedness)
prohibiting the creation or assumption of any Lien upon any of its properties or
assets, whether now owned or hereafter acquired.

     D.  NO  RESTRICTIONS  ON  SUBSIDIARY  DISTRIBUTIONS  TO  COMPANY  OR  OTHER
SUBSIDIARIES.  Except as provided herein,  Company will not, and will not permit
any of its  Subsidiaries  to,  create or  otherwise  cause or suffer to exist or
become  effective any  consensual  encumbrance or restriction of any kind on the
ability  of  any  such  Subsidiary  to (i)  pay  dividends  or  make  any  other
distributions on any of such Subsidiary's  capital stock owned by Company or any
other Subsidiary of Company,  (ii) repay or prepay any Indebtedness owed by such
Subsidiary to Company or any other  Subsidiary  of Company,  (iii) make loans or
advances to Company or any other Subsidiary of Company,  or (iv) transfer any of
its property or assets to Company or any other Subsidiary of Company.

7.3  INVESTMENTS; JOINT VENTURES.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
directly or indirectly,  make or own any Investment in any Person, including any
Joint Venture, except:

          (i)  Company and its Subsidiaries may make and own
     Investments in Cash Equivalents;

          (ii)      Company and its Subsidiaries may continue
     to own the Investments owned by them as of the Closing
     Date in any Subsidiaries of Company;

               Company and its Subsidiaries may make
     intercompany loans to the extent permitted under
     subsection 7.1(iv);

          (iv)      Company and its Subsidiaries may make
     Consolidated Capital Expenditures permitted by
     subsections 7.6, 7.8 and 7.9;

          (v)  Company and its Subsidiaries may continue to own
     the Investments owned by them and described in
     Schedule 7.3 annexed hereto;

          (vi) Company and its  Subsidiaries  may make Investments in any Person
     in  connection  with a new  restaurant  to be  acquired or  constructed  by
     Company and/or such Person if such Investment  results in such Person being
     a wholly-owned Subsidiary of Company or a wholly-owner Subsidiary; and

          (vii)     Company and its Subsidiaries may make and
     own other Investments in an aggregate amount not to
     exceed at any time $1,000,000.

7.4  CONTINGENT OBLIGATIONS.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
directly or  indirectly,  create or become or remain  liable with respect to any
Contingent Obligation, except:

          (i)  Subsidiaries of Company may become and remain
     liable with respect to Contingent Obligations in respect
     of the Subsidiary Guaranty;

          (ii) Company may become and remain  liable with respect to  Contingent
     Obligations   in  respect  of  Letters  of  Credit  and   Company  and  its
     Subsidiaries  may become  and  remain  liable  with  respect to  Contingent
     Obligations in respect of other letters of credit in an aggregate amount at
     anytime not to exceed $500,000;

          (iii)     Company may become and remain liable with
     respect to Contingent Obligations under Hedge Agreements
     required under subsection 6.10;

          (iv) Company and its  Subsidiaries  may become and remain  liable with
     respect to Contingent  Obligations  under guarantees in the ordinary course
     of business of the  obligations of suppliers,  customers,  franchisees  and
     licensees of Company and its  Subsidiaries  in an  aggregate  amount not to
     exceed at any time $1,000,000;

          (v) Company  and its  Subsidiaries  may become and remain  liable with
     respect to Contingent Obligations in respect of any Indebtedness of Company
     or any of its Subsidiaries permitted by subsection 7.1;

          (vi)      Company and its Subsidiaries, as
     applicable, may remain liable with respect to Contingent
     Obligations described in Schedule 7.4 annexed hereto; and

          (vii) Company and its  Subsidiaries  may become and remain liable with
     respect  to  other  Contingent  Obligations;   provided  that  the  maximum
     aggregate   liability,   contingent  or  otherwise,   of  Company  and  its
     Subsidiaries in respect of all such Contingent Obligations shall at no time
     exceed $2,000,000.

7.5  RESTRICTED JUNIOR PAYMENTS.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
directly or indirectly,  declare,  order, pay, make or set apart any sum for any
Restricted  Junior  Payment;  provided  that  Company  may  utilize the funds on
deposit in the Escrow  Account as specified in subsection  6.11 to provide funds
to Holdings to consummate the Repurchase subject to the provisions of subsection
2.4B(iii)(f)  and provided further that any Subsidiary may pay dividends or make
other distributions to Company.

7.6  FINANCIAL COVENANTS.

     A.   MINIMUM FIXED CHARGE COVERAGE RATIO.  Company shall
not permit the ratio of (i) Consolidated EBITDA to
(ii) Consolidated Fixed Charges for any consecutive four-
Fiscal Quarter period ending on the dates set forth below to
be less than the correlative ratio indicated:

                                                MINIMUM FIXED
             FISCAL QUARTER ENDING DATE    CHARGE COVERAGE RATIO

     June 30, 1997                                     2.58
     September 29, 1997                                2.33
     December 29, 1997                                 2.18
     March 30, 1998                                    1.96
     June 29, 1998                                     1.78
     September 28, 1998                                1.75
     December 28,1998                                  1.71
     March 29, 1999                                    1.74
     June 28, 1999                                     1.76
     September 27, 1999                                1.79
     December 27, 1999                                 1.82
     March 27, 2000                                    1.82
     June 26, 2000                                     1.85
     September 25, 2000                                1.88
     December 25, 2000                                 1.88
     March 26, 2001                                    1.88
     June 25, 2001                                     1.89
     September 24, 2001                                1.90
     December 31, 2001                                 1.91
     April 1, 2002                                     1.86
     July 1, 2002                                      1.87
     September 30, 2002                                1.46
     December 30, 2002                                 1.21
     March 31, 2003                                    1.02
     June 30, 2003                                     1.00
     September 29, 2003                                1.00
     December 29, 2003                                 1.00
     March 29, 2004                                    1.00
     June 28, 2004                                     1.00


     B.   MAXIMUM LEVERAGE RATIO.  Company shall not permit the
Consolidated Leverage Ratio at any time during any of the
periods set forth below to exceed the correlative ratio
indicated:

                    PERIOD             MAXIMUM LEVERAGE RATIO

     April 15, 1997  March 30, 1998                      2.7
     March 31, 1998  December 28, 1998                   2.6
     December 29, 1998  March 29, 1999                   2.5
     March 30, 1999  June 28, 1999                       2.4
     June 29, 1999  December 27, 1999                    2.3
     December 28, 1999  March 27, 2000                   2.2
     March 28, 2000  June 26, 2000                       2.1
     June 27, 2000  September 25, 2000                   2.0
     September 26, 2000  March 26, 2001                  1.9
     March 27, 2001  June 25, 2001                       1.8
     June 26, 2001  September 24, 2001                   1.7
     September 25, 2001   April 1, 2002                  1.6
     April 2, 2002  July 1, 2002                         1.5
     July 2, 2002  September 30, 2002                    1.3
     October 1, 2002  December 30, 2002                  1.1
     Thereafter                                           1.0


     C.   MINIMUM CONSOLIDATED EBITDA.  Company shall not
permit Consolidated EBITDA for the consecutive four-Fiscal
Quarter Period ending on the date indicated below to be less
than the correlative amount indicated:

                                            MINIMUM CONSOLIDATED
             FISCAL QUARTER ENDING DATE           EBITDA
                                              $ in millions

     June 30, 1997                                     28.7
     September 29, 1997                                27.7
     December 29, 1997                                 27.5
     March 30, 1998                                    27.2
     June 29, 1998                                     27.0
     September 28, 1998                                26.8
     December 28, 1998                                 26.5
     March 29, 1999                                    27.1
     June 28, 1999                                     27.6
     September 27, 1999                                28.1
     December 27, 1999                                 28.7
     March 27, 2000                                    28.8
     June 26, 2000                                     29.6
     September 25, 2000                                30.4
     December 25, 2000                                 31.4
     March 26, 2001                                    31.4
     June 25, 2001                                     32.2
     September 24, 2001                                33.1
     December 31, 2001                                 34.2
     April 1, 2002                                     34.1
     July 1, 2002                                      35.0
     September 30, 2002                                35.8
     December 30, 2002                                 36.9
     March 31, 2003                                    36.3
     June 30, 2003                                     36.9
     September 29, 2003                                37.4
     December 29, 2003                                 38.1
     March 29, 2004                                    38.2
     June 28, 2004                                     38.3


     D.   MINIMUM CONSOLIDATED NET WORTH.  Company shall not
permit Consolidated Net Worth during the period ending on the
dates set forth below to be less than the correlative amount
indicated:

                                                 MINIMUM
               PERIOD ENDING              CONSOLIDATED NET WORTH
                                                 ($ in millions)
     June 30, 1997                                     40.3
     September 29, 1997                                42.2
     December 29, 1997                                 44.6
     March 30, 1998                                    44.8
     June 29, 1998                                     46.2
     September 28, 1998                                47.6
     December 28, 1998                                 49.3
     March 29, 1999                                    50.8
     June 28, 1999                                     52.3
     September 27, 1999                                52.3
     December 27, 1999                                 54.0
     March 27, 2000                                    55.6
     June 26, 2000                                     57.3
     September 25, 2000                                58.9
     December 25, 2000                                 61.0
     March 26, 2001                                    61.1
     June 25, 2001                                     63.0
     September 24, 2001                                64.8
     December 31, 2001                                 67.1
     April 1, 2002                                     67.4
     July 1, 2002                                      69.7
     September 30, 2002                                71.9
     December 30, 2002                                 74.7
     March 31, 2003                                    74.7
     June 30, 2003                                     75.9
     September 29, 2003                                78.6
     December 29, 2003                                 82.1
     March 29, 2004                                    82.1
     June 28, 2004                                     83.0

7.7  RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
ACQUISITIONS.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
alter  the  corporate,  capital  or legal  structure  of  Company  or any of its
Subsidiaries,  or enter  into any  transaction  of merger or  consolidation,  or
liquidate,   wind-up  or  dissolve   itself  (or  suffer  any   liquidation   or
dissolution),  or convey,  sell,  lease or sub-lease  (as lessor or  sublessor),
transfer  or  otherwise   dispose  of,  in  one   transaction  or  a  series  of
transactions,  all or any part of its business,  property or assets, whether now
owned or  hereafter  acquired,  or  acquire  by  purchase  or  otherwise  all or
substantially  all the business,  property or fixed assets of, or stock or other
evidence  of  beneficial  ownership  of, any Person or any  division  or line of
business of any Person, except:

          (i) any  Subsidiary  of Company may be merged with or into  Company or
     any  wholly-owned  Subsidiary  Guarantor,  or be  liquidated,  wound  up or
     dissolved,  or all or any part of its  business,  property or assets may be
     conveyed,  sold,  leased,  transferred  or  otherwise  disposed  of, in one
     transaction  or a series of  transactions,  to Company or any  wholly-owned
     Subsidiary Guarantor;  provided that, in the case of such a merger, Company
     or such  wholly-owned  Subsidiary  Guarantor  shall  be the  continuing  or
     surviving corporation;

          (ii)      Company and its Subsidiaries may make Con-
     solidated Capital Expenditures permitted under subsection
     7.8;

          (iii)     Company and its Subsidiaries may dispose of
     obsolete, worn out or surplus property in the ordinary
     course of business; and

          (iv) Company and its  Subsidiaries  may sell or  otherwise  dispose of
     assets in transactions  that do not constitute  Asset Sales;  provided that
     the  consideration  received for such assets shall be in an amount at least
     equal to the fair market value thereof.

7.8  CONSOLIDATED CAPITAL EXPENDITURES.

          Company shall not, and shall not permit its  Subsidiaries  to, make or
incur  Consolidated  Capital  Expenditures in any period  indicated below, in an
aggregate   amount  in  excess  of  the   corresponding   amount  (the  "MAXIMUM
CONSOLIDATED  CAPITAL  EXPENDITURES  AMOUNT")  set forth  below under the column
Maximum  Capital  Expenditures  Amount  opposite  such  period,  subject  to the
following:

          (i) the  Maximum  Consolidated  Capital  Expenditures  Amount  for any
     Fiscal Year shall be increased by an amount equal to the excess, if any, of
     the  Maximum  Consolidated  Capital  Expenditures  Amount (as  adjusted  in
     accordance  with  clause  (ii) but without  taking any  adjustment  made in
     accordance  with this clause (i) into account) for the previous Fiscal Year
     over the  actual  amount  of  Consolidated  Capital  Expenditures  for such
     previous Fiscal Year;  provided,  that in no event shall the amount of such
     increase exceed 25% of the Maximum Consolidated Capital Expenditures Amount
     for such previous  Fiscal Year (as adjusted in accordance  with clause (ii)
     but without taking any adjustment  made in accordance  with this clause (i)
     into account) and provided,  further,  that the amount of such increase may
     be spent by Company at anytime during the Fiscal year without regard to the
     six-month period referred to in clause (ii);

          (ii) the Maximum  Consolidated  Capital  Expenditures  Amount for each
     six-month period shown below shall be decreased by the product of two times
     the  difference  between the amount shown below under  budgeted  EBITDA and
     actual Consolidated EBITDA in each case for the twelve months ending on the
     date that is one year  prior to the end of each  six-month  period (if such
     difference is a negative number,  it shall be deemed to be zero);  provided
     that in  calculating  such decrease for periods ending in 1998 based on the
     Fiscal  Year  ending  in  1997,  the  product  shall  be  four  times  such
     difference,  which shall reduce the Maximum Capital Expenditures Amount for
     the periods ending in 1998 by a pro rata portion for each period; and

          (iii) the Maximum  Consolidated  Capital Expenditures Amount shall not
     be  decreased in  accordance  with clause (ii) by an amount that is greater
     than  the  amount  shown  below  under  Maximum  New   Restaurant   Capital
     Expenditures:


Period Ending*      Budgeted EBITDA**   Maximum New Restaurant
Capital Expenditures**   Minimum/ Maintenance Capital
Expenditures**      Maximum Capital Expenditures Amount**

December 29, 1997   $30.5     $--  $--  $11.0
June 29, 1998  30.0      7.2  5.5  12.7
December 28, 1998   29.5      4.8  3.7  8.5
June 28, 1999  30.7      9.0  4.6  13.6
December 27, 1999   31.9      6.0  3.1  9.1
June 26, 2000  33.8      9.4  4.9  14.3
December 25, 2000   35.8      6.2  3.3  9.5
June 25, 2001  37.9      9.7  5.3  15.0
December 31, 2001   40.2      6.5  3.5  10.0
July 1, 2002   42.4      9.4  5.6  15.0
December 30, 2002   44.7      6.2  3.8  10.0
June 20, 2003  46.1      9.1  5.9  15.0
December 29, 2003   47.6      6.0  4.0  10.0
June 28, 2004  47.8      8.9  6.1  15.0

*    All fiscal periods are for the six months ending on the date shown,  except
     the period  ending on  December  29,  1997  shall be for the twelve  months
     ending on such date.

**   Amounts in millions.

7.9  RESTRICTION ON LEASES.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
become liable in any way, whether directly or by assignment or as a guarantor or
other  surety,  for the  obligations  of the lessee under any lease,  whether an
Operating  Lease or a Capital  Lease  (other than  intercompany  leases  between
Company and its wholly-owned  Subsidiaries),  unless,  immediately  after giving
effect  to  the  incurrence  of  liability  with  respect  to  such  lease,  the
Consolidated  Rental  Payments  at the time in effect  during  the then  current
Fiscal Year shall not exceed the  corresponding  amount set forth below opposite
such Fiscal Year:

                                            MAXIMUM CONSOLIDATED
               FISCAL YEAR                  RENTAL PAYMENTS

            1997                                $ 17.2 million
            1998                                  19.5 million
            1999                                  21.2 million
            2000                                  22.4 million
            2001                                  23.7 million
            2002                                  24.9 million
            2003                                  25.7 million
 January 1 -- June 30, 2004                       13.3 million


7.10      SALES AND LEASE-BACKS.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
directly or  indirectly,  become or remain liable as lessee or as a guarantor or
other surety with respect to any lease,  whether an Operating Lease or a Capital
Lease, of any property (whether real,  personal or mixed),  whether now owned or
hereafter  acquired,  (i) which Company or any of its  Subsidiaries  has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its  Subsidiaries)  or  (ii)  which  Company  or any of its  Subsidiaries
intends to use for  substantially  the same purpose as any other  property which
has been or is to be sold or transferred  by Company or any of its  Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease;  provided  that Company and its  Subsidiaries  may become and remain
liable as lessee,  guarantor  or other surety with respect to any such lease (A)
in  connection  with the Sales and  Leaseback  Transactions,  if such  Sales and
Leaseback  Transactions  are  completed on or prior to August 15, 1997,  and the
Additional  Sales and  Leaseback  Transactions  and (B) with respect to any such
lease if and to the  extent  that  Company or any of its  Subsidiaries  would be
permitted to enter into,  and remain liable under,  such lease under  subsection
7.9.

7.11      SALE OR DISCOUNT OF RECEIVABLES.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
directly or indirectly,  sell with  recourse,  or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.

7.12      TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.

          Except for the transactions  described on Schedule 7.12, Company shall
not, and shall not permit any of its  Subsidiaries  to,  directly or indirectly,
enter into or permit to exist any  transaction  (including  the purchase,  sale,
lease or exchange of any  property or the  rendering  of any  service)  with any
holder of 5% or more of any class of equity  Securities  of  Company or with any
Affiliate of Company or of any such holder,  on terms that are less favorable to
Company  or that  Subsidiary,  as the  case may be,  than  those  that  might be
obtained  at the time  from  Persons  who are not such a  holder  or  Affiliate;
provided that the foregoing  restriction  shall not apply to (i) any transaction
between Company and any of its  wholly-owned  Subsidiaries or between any of its
wholly-owned  Subsidiaries or (ii) reasonable and customary fees paid to members
of the Boards of Directors of Company and its Subsidiaries.

7.13      DISPOSAL OF SUBSIDIARY STOCK.

          Company shall not:

          (i) directly or indirectly sell, assign,  pledge or otherwise encumber
     or dispose of any shares of capital stock or other equity Securities of any
     of its Subsidiaries,  except to qualify directors if required by applicable
     law; or

          (ii) permit any of its  Subsidiaries  directly or  indirectly to sell,
     assign,  pledge or  otherwise  encumber or dispose of any shares of capital
     stock or other equity Securities of any of its Subsidiaries (including such
     Subsidiary),  except to  Company,  another  Subsidiary  of  Company,  or to
     qualify directors if required by applicable law.

7.14      CONDUCT OF BUSINESS.

          From and after the  Closing  Date,  Company  shall not,  and shall not
permit any of its  Subsidiaries  to,  engage in any business  other than (i) the
businesses  engaged in by Company and its  Subsidiaries  on the Closing Date and
similar or related  businesses  and (ii) such other  lines of business as may be
consented to by Requisite Lenders.

7.15      AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED
          INDEBTEDNESS.

          Company  shall not, and shall not permit any of its  Subsidiaries  to,
amend or otherwise  change the terms of any Subordinated  Indebtedness,  or make
any payment  consistent  with an  amendment  thereof or change  thereto,  if the
effect of such  amendment  or change is to increase  the  interest  rate on such
Subordinated  Indebtedness,  change  (to  earlier  dates)  any dates  upon which
payments of principal  or interest are due thereon,  change any event of default
or  condition  to an  event of  default  with  respect  thereto  (other  than to
eliminate  any such  event of  default  or  increase  any grace  period  related
thereto),  change the redemption,  prepayment or defeasance  provisions thereof,
change the subordination  provisions  thereof (or of any guaranty  thereof),  or
change any collateral  therefor (other than to release such  collateral),  or if
the effect of such  amendment or change,  together with all other  amendments or
changes  made,  is  to  increase  materially  the  obligations  of  the  obligor
thereunder  or  to  confer  any  additional   rights  on  the  holders  of  such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Company or Lenders.

7.16      FISCAL YEAR

          Company  shall not change its Fiscal  Year-end from the last Monday in
December of each calendar year.


SECTION 8.     EVENTS OF DEFAULT

          If any of the  following  conditions  or events  ("Events of Default")
shall occur:

8.1  FAILURE TO MAKE PAYMENTS WHEN DUE.

          Failure by Company to pay any  installment  of  principal  of any Loan
when due,  whether at stated maturity,  by acceleration,  by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount  payable to an Issuing  Lender in  reimbursement  of any  drawing
under a Letter of Credit;  or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this  Agreement  within five days after
the date due; or

8.2  DEFAULT IN OTHER AGREEMENTS.

          (i) Failure of Company or any of its  Subsidiaries to pay when due any
principal  of or  interest on or any other  amount  payable in respect of one or
more items of Indebtedness  (other than  Indebtedness  referred to in subsection
8.1) or Contingent Obligations in either an individual or an aggregate principal
amount of  $500,000  or more,  in each case  beyond the end of any grace  period
provided  therefor;  or  (ii)  breach  or  default  by  Company  or  any  of its
Subsidiaries with respect to any other material term of (a) one or more items of
Indebtedness or Contingent  Obligations in the individual or aggregate principal
amounts  referred  to in clause (i) above or (b) any loan  agreement,  mortgage,
indenture  or other  agreement  relating  to such  item(s)  of  Indebtedness  or
Contingent  Obligation(s),  if the effect of such breach or default is to cause,
or  to  permit  the  holder  or  holders  of  that  Indebtedness  or  Contingent
Obligation(s)  (or a trustee on behalf of such holder or holders) to cause, that
Indebtedness  or  Contingent  Obligation(s)  to  become or be  declared  due and
payable prior to its stated  maturity or the stated  maturity of any  underlying
obligation, as the case may be (upon the giving or receiving of notice, lapse of
time, both, or otherwise); or

8.3  BREACH OF CERTAIN COVENANTS.

          Failure of Company  to  perform or comply  with any term or  condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or

8.4  BREACH OF WARRANTY.

          Any representation, warranty, certification or other statement made by
Company or any of its  Subsidiaries  in any Loan Document or in any statement or
certificate at any time given by Company or any of its  Subsidiaries  in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or

8.5  OTHER DEFAULTS UNDER LOAN DOCUMENTS.

          Any Loan Party shall default in the  performance of or compliance with
any term contained in this Agreement or any of the other Loan  Documents,  other
than any such term  referred to in any other  subsection  of this Section 8, and
such default  shall not have been  remedied or waived  within ten days after the
earlier of (i) an officer of Company or such Loan Party  becoming  aware of such
default or (ii)  receipt by Company and such Loan Party of notice from any Agent
or any Lender of such default; or

8.6  INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

          (i) A court having  jurisdiction  in the premises shall enter a decree
or order for  relief in respect  of  Company  or any of its  Subsidiaries  in an
involuntary  case  under  the  Bankruptcy  Code or under  any  other  applicable
bankruptcy,  insolvency or similar law now or hereafter in effect,  which decree
or order is not stayed;  or any other similar  relief shall be granted under any
applicable  federal or state law; or (ii) an involuntary case shall be commenced
against  Company or any of its  Subsidiaries  under the Bankruptcy Code or under
any other applicable  bankruptcy,  insolvency or similar law now or hereafter in
effect; or a decree or order of a court having  jurisdiction in the premises for
the appointment of a receiver, liquidator,  sequestrator,  trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries,  or
over all or a  substantial  part of its property,  shall have been  entered;  or
there shall have occurred the  involuntary  appointment of an interim  receiver,
trustee or other  custodian of Company or any of its  Subsidiaries  for all or a
substantial  part of its  property;  or a warrant of  attachment,  execution  or
similar  process  shall have been  issued  against any  substantial  part of the
property of Company or any of its Subsidiaries,  and any such event described in
this  clause  (ii)  shall  continue  for 60 days  unless  dismissed,  bonded  or
discharged; or

8  VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.

          (i) Company or any of its Subsidiaries  shall have an order for relief
entered  with  respect to it or commence a voluntary  case under the  Bankruptcy
Code or under any other applicable bankruptcy,  insolvency or similar law now or
hereafter in effect,  or shall consent to the entry of an order for relief in an
involuntary  case, or to the  conversion of an  involuntary  case to a voluntary
case,  under any such law,  or shall  consent  to the  appointment  of or taking
possession  by a receiver,  trustee or other  custodian for all or a substantial
part of its  property;  or  Company  or any of its  Subsidiaries  shall make any
assignment  for  the  benefit  of  creditors;  or  (ii)  Company  or  any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its  inability,  to pay its  debts as such  debts  become  due;  or the Board of
Directors of Company or any of its Subsidiaries (or any committee thereof) shall
adopt any  resolution  or otherwise  authorize  any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or

8.8  JUDGMENTS AND ATTACHMENTS.

          Any money  judgment,  writ or warrant of attachment or similar process
involving  either  in any  individual  case or in the  aggregate  at any time an
amount in excess of $500,000 (in either case not adequately covered by insurance
as to which a  solvent  and  unaffiliated  insurance  company  has  acknowledged
coverage) shall be entered or filed against  Company or any of its  Subsidiaries
or any of their  respective  assets and shall  remain  undischarged,  unvacated,
unbonded  or  unstayed  for a period of 60 days (or in any event later than five
days prior to the date of any proposed sale thereunder); or

8.9  DISSOLUTION.

          Any order,  judgment or decree shall be entered against Company or any
of its  Subsidiaries  decreeing the  dissolution  or split up of Company or that
Subsidiary and such order shall remain  undischarged or unstayed for a period in
excess of 30 days; or

8.10      EMPLOYEE BENEFIT PLANS.

          There shall occur one or more ERISA  Events which  individually  or in
the aggregate  results in or might reasonably be expected to result in liability
of Company,  any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $500,000 during the term of this Agreement; or there shall exist an
amount of unfunded  benefit  liabilities  (as defined in Section  4001(a)(18) of
ERISA),  individually  or in the aggregate for all Pension Plans  (excluding for
purposes of such  computation  any Pension  Plans with  respect to which  assets
exceed benefit liabilities), which exceeds $500,000; or

8.11      MATERIAL ADVERSE EFFECT.

          Any event or change shall occur that has caused or  evidences,  either
in any case or in the aggregate, a Material Adverse Effect; or

8.12      CHANGE IN CONTROL.

          Any  Person  or any two or more  Persons  other  than  the  Affiliated
Stockholder acting in concert shall have acquired  beneficial  ownership (within
the meaning of Rule 13d-3 of the  Securities and Exchange  Commission  under the
Exchange  Act),  directly  or  indirectly,  of  Securities  of Company (or other
Securities  convertible  into such  Securities)  representing 30% or more of the
combined  voting  power of all  Securities  of Company  entitled  to vote in the
election of directors, other than Securities having such power only by reason of
the happening of a contingency; or

      INVALIDITY OF GUARANTIES; FAILURE OF SECURITY;
          REPUDIATION OF OBLIGATIONS.

          At any time after the execution and delivery thereof, (i) any Guaranty
for any reason,  other than the satisfaction in full of all  Obligations,  shall
cease to be in full force and effect (other than in  accordance  with its terms)
or shall be declared to be null and void,  (ii) any  Collateral  Document  shall
cease to be in full  force and  effect  (other  than by  reason of a release  of
Collateral  thereunder  in  accordance  with the terms  hereof or  thereof,  the
satisfaction  in  full  of the  Obligations  or any  other  termination  of such
Collateral  Document in accordance with the terms hereof or thereof) or shall be
declared null and void, or Administrative Agent shall not have or shall cease to
have a valid and perfected First Priority Lien in any Collateral purported to be
covered thereby, in each case for any reason other than the failure of any Agent
or any Lender to take any action  within  its  control,  or (iii) any Loan Party
shall contest the validity or  enforceability of any Loan Document in writing or
deny in writing  that it has any further  liability,  including  with respect to
future advances by Lenders, under any Loan Document to which it is a party:

THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid  principal  amount of and accrued interest on the
Loans,  (b) an amount equal to the maximum  amount that may at any time be drawn
under all Letters of Credit  then  outstanding  (whether or not any  beneficiary
under any such Letter of Credit  shall have  presented,  or shall be entitled at
such time to present, the drafts or other documents or certificates  required to
draw  under  such  Letter  of  Credit),  and (c)  all  other  Obligations  shall
automatically become immediately due and payable,  without presentment,  demand,
protest or other  requirements  of any kind,  all of which are hereby  expressly
waived by  Company,  and the  obligation  of each  Lender to make any Loan,  the
obligation of  Administrative  Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the  continuation  of any other Event of
Default,  Administrative  Agent  shall,  upon the  written  request  or with the
written consent of Requisite Lenders, by written notice to Company,  declare all
or any portion of the amounts  described in clauses (a) through (c) above to be,
and the same  shall  forthwith  become,  immediately  due and  payable,  and the
obligation of each Lender to make any Loan,  the  obligation  of  Administrative
Agent to issue any  Letter of  Credit  and the right of any  Lender to issue any
Letter  of  Credit  hereunder  shall  thereupon  terminate;  provided  that  the
foregoing  shall  not  affect  in any  way  the  obligations  of  Lenders  under
subsection  3.3C(i) or the obligations of Lenders to purchase  participations in
any unpaid Swing Line Loans as provided in subsection 2.1A(iv).

          Any  amounts   described  in  clause  (b)  above,   when  received  by
Administrative  Agent,  shall be held by  Administrative  Agent and  applied  as
follows:  If for any  reason  the  aggregate  amount  delivered  by  Company  as
aforesaid is less than the amount  described in clause (b) above (the "AGGREGATE
AVAILABLE AMOUNT"), the aggregate amount so delivered shall be apportioned among
all  outstanding  Letters of Credit in accordance  with the ratio of the maximum
amount available for drawing under each such Letter of Credit (as to such Letter
of Credit, the "MAXIMUM  AVAILABLE  AMOUNT") to the Aggregate  Available Amount.
Upon any  drawing  under any  outstanding  Letters of Credit in respect of which
Company has  delivered  to  Administrative  Agent any amounts  described  above,
Administrative  Agent shall apply such amounts to reimburse  the Issuing  Lender
for the amount of such drawing.  In the event of  cancellation  or expiration of
any Letter of Credit in  respect  of which  Company  has any  amounts  described
above,  or in the event of any reduction in the Maximum  Available  Amount under
such  Letter of Credit,  Administrative  Agent  shall  apply the amount  then on
deposit with it in respect of such Letter of Credit (less, in the case of such a
reduction,  the Maximum Available Amount under such Letter of Credit immediately
after  such  reduction)  first,  to the  extent  of  any  excess,  to  the  cash
collateralization  of any  outstanding  Letters  of Credit in  respect  of which
Company has failed to pay all or a portion of the amounts  described above (such
cash collateralization to be apportioned among all such Letters of Credit in the
manner described  above),  second,  to the extent of any further excess,  to the
payment of any other  outstanding  Obligations  in such order as  Administrative
Agent  shall  elect,  and third,  to the extent of any  further  excess,  to the
payment to whomsoever shall be lawfully entitled to receive such funds.


          Notwithstanding  anything contained in the second preceding paragraph,
if at any time  within 60 days after an  acceleration  of the Loans  pursuant to
clause (ii) of such paragraph  Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as a
result of such  acceleration  (with  interest  on  principal  and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and  all  Events  of  Default  and  Potential  Events  of  Default  (other  than
non-payment of the principal of and accrued  interest on the Loans, in each case
which is due and payable solely by virtue of acceleration)  shall be remedied or
waived pursuant to subsection 10.6, then Requisite Lenders, by written notice to
Company,  may at their  option  rescind  and  annul  such  acceleration  and its
consequences;  but such action shall not affect any subsequent  Event of Default
or  Potential  Event of  Default  or impair any right  consequent  thereon.  The
provisions of this  paragraph are intended  merely to bind Lenders to a decision
which may be made at the  election of  Requisite  Lenders and are not  intended,
directly or indirectly, to benefit Company, and such provisions shall not at any
time be construed so as to grant Company the right to require Lenders to rescind
or annul any  acceleration  hereunder  or to  preclude  Administrative  Agent or
Lenders from  exercising  any of the rights or remedies  available to them under
any of the Loan  Documents,  even if the  conditions set forth in this paragraph
are met.


SECTION 9.     THE AGENTS

9.1  APPOINTMENT.

     A.  APPOINTMENT OF AGENTS.  BIS is hereby  appointed  Administrative  Agent
hereunder and under the other Loan  Documents and each Lender hereby  authorizes
Administrative  Agent to act as its agent in  accordance  with the terms of this
Agreement  and the other Loan  Documents.  DLJ is hereby  appointed  Syndication
Agent  hereunder  and under the other  Loan  Documents  and each  Lender  hereby
authorizes Syndication Agent to act as its agent in accordance with the terms of
this  Agreement  and the other Loan  Documents.  Each of  Syndication  Agent and
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan  Documents,  as applicable.  The provisions of this
Section  9 are  solely  for  the  benefit  of  each  of  Syndication  Agent  and
Administrative  Agent,  and Lenders and Company  shall have no rights as a third
party beneficiary of any of the provisions  thereof. In performing its functions
and duties under this Agreement,  each of Syndication  Agent and  Administrative
Agent  shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation  towards or  relationship  of agency or
trust with or for Company or any of its Subsidiaries.

     B. APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the purpose of this
Agreement and the other Loan  Documents  that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact  business as agent or trustee in such  jurisdiction.
It is recognized  that in case of litigation  under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan  Documents,  or in case  Administrative  Agent  deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies  granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that Administrative  Agent appoint an additional  individual or
institution as a separate  trustee,  co-trustee,  collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually  as  a  "SUPPLEMENTAL   COLLATERAL   AGENT"  and   collectively  as
"SUPPLEMENTAL COLLATERAL AGENTS").

          In  the  event  that  Administrative  Agent  appoints  a  Supplemental
Collateral  Agent with  respect  to any  Collateral,  (i) each and every  right,
power,  privilege or duty  expressed or intended by this Agreement or any of the
other  Loan   Documents  to  be  exercised  by  or  vested  in  or  conveyed  to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such  Supplemental  Collateral  Agent  to the  extent,  and  only to the
extent,  necessary to enable such Supplemental Collateral Agent to exercise such
rights,  powers and  privileges  with respect to such  Collateral and to perform
such duties with respect to such  Collateral,  and every covenant and obligation
contained in the Loan  Documents  and  necessary to the exercise or  performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental  Collateral Agent, and (ii) the
provisions  of this  Section 9 and of  subsections  10.2 and 10.3 that  refer to
Administrative Agent shall inure to the benefit of such Supplemental  Collateral
Agent and all references  therein to Administrative  Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.

          Should any  instrument in writing from Company or any other Loan Party
be required by any Supplemental  Collateral Agent so appointed by Administrative
Agent for more fully and certainly  vesting in and  confirming to him or it such
rights,  powers,  privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral Agent,
or a successor  thereto,  shall die,  become  incapable of acting,  resign or be
removed,  all the rights,  powers,  privileges  and duties of such  Supplemental
Collateral Agent, to the extent permitted by law, shall vest in and be exercised
by Administrative  Agent until the appointment of a new Supplemental  Collateral
Agent.

9.2  POWERS AND DUTIES; GENERAL IMMUNITY.

     A. POWERS; DUTIES SPECIFIED.  Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers,  rights
and remedies  hereunder and under the other Loan  Documents as are  specifically
delegated  or granted to such Agent by the terms  hereof and  thereof,  together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent  shall have only  those  duties and  responsibilities  that are  expressly
specified  in this  Agreement  and the  other  Loan  Documents.  Each  Agent may
exercise such powers,  rights and remedies and perform such duties by or through
its agents or employees. No Agent shall have, by reason of this Agreement or any
of the other Loan Documents,  a fiduciary relationship in respect of any Lender;
and nothing in this Agreement or any of the other Loan  Documents,  expressed or
implied, is intended to or shall be so construed as to impose upon any Agent any
obligations  in respect  of this  Agreement  or any of the other Loan  Documents
except as expressly set forth herein or therein.

     B. NO RESPONSIBILITY FOR CERTAIN MATTERS.  No Agent shall be responsible to
any   Lender   for  the   execution,   effectiveness,   genuineness,   validity,
enforceability,  collectibility  or  sufficiency  of this Agreement or any other
Loan  Document or for any  representations,  warranties,  recitals or statements
made  herein or therein  or made in any  written  or oral  statements  or in any
financial or other statements, instruments, reports or certificates or any other
documents  furnished  or made by such  Agent to  Lenders  or by or on  behalf of
Company to such Agent or any Lender in  connection  with the Loan  Documents and
the transactions contemplated thereby or for the financial condition or business
affairs  of  Company  or  any  other  Person  liable  for  the  payment  of  any
Obligations,  nor shall such Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or  agreements  contained  in any of the Loan  Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible  existence  of any Event of Default or  Potential  Event of Default.
Anything   contained  in  this   Agreement  to  the  contrary   notwithstanding,
Administrative  Agent shall not have any liability arising from confirmations of
the amount of  outstanding  Loans or the Letter of Credit Usage or the component
amounts thereof.

     C.  EXCULPATORY  PROVISIONS.  Neither  of  the  Agents  nor  any  of  their
respective officers,  directors,  employees or agents shall be liable to Lenders
for any action  taken or omitted by any such Agent under or in  connection  with
any of the Loan  Documents  except to the extent  caused by such  Agent's  gross
negligence or willful  misconduct.  Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection  with this  Agreement or any of the other Loan  Documents or from the
exercise  of any  power,  discretion  or  authority  vested in it  hereunder  or
thereunder  unless and until such Agent  shall  have  received  instructions  in
respect thereof from Requisite Lenders (or such other Lenders as may be required
to give such  instructions  under  subsection  10.6) and,  upon  receipt of such
instructions from Requisite Lenders (or such other Lenders, as the case may be),
such  Agent  shall be  entitled  to act or (where so  instructed)  refrain  from
acting, or to exercise such power,  discretion or authority,  in accordance with
such  instructions.  Without  prejudice to the generality of the foregoing,  (i)
each Agent shall be entitled to rely,  and shall be fully  protected in relying,
upon any communication,  instrument or document believed by it to be genuine and
correct  and to have been signed or sent by the proper  person or  persons,  and
shall be entitled  to rely and shall be  protected  in relying on  opinions  and
judgments of attorneys (who may be attorneys for Company and its  Subsidiaries),
accountants, experts and other professional advisors selected by it; and (ii) no
Lender shall have any right of action  whatsoever  against any Agent as a result
of such Agent acting or (where so instructed)  refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions
of  Requisite  Lenders  (or such other  Lenders as may be  required to give such
instructions under subsection 10.6).

     D. AGENTS ENTITLED TO ACT AS LENDER.  The agency hereby created shall in no
way  impair or affect  any of the  rights and powers of, or impose any duties or
obligations  upon, any Agent in its individual  capacity as a Lender  hereunder.
With respect to its  participation in the Loans and the Letters of Credit,  each
Agent shall have the same rights and powers  hereunder  as any other  Lender and
may exercise the same as though it were not  performing the duties and functions
delegated  to it  hereunder,  and the term  "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise  indicates,  include such Agent
in its individual  capacity.  Any Agent and its  Affiliates may accept  deposits
from,  lend  money  to and  generally  engage  in any  kind of  banking,  trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not  performing  the duties  specified  herein,  and may accept fees and
other  consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.

9.3  REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR
     APPRAISAL OF CREDITWORTHINESS.

          Each  Lender  represents  and  warrants  that  it  has  made  its  own
independent  investigation of the financial condition and affairs of Company and
its  Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit  hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries.  No Agent
shall  have any duty or  responsibility,  either  initially  or on a  continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide  any  Lender  with any credit or other  information  with  respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter,  and no Agent shall have any  responsibility  with
respect to the accuracy of or the  completeness of any  information  provided to
Lenders.

9.4  RIGHT TO INDEMNITY.

          Each Lender, in proportion to its Pro Rata Share,  severally agrees to
indemnify  each  Agent,  to the  extent  that  such  Agent  shall  not have been
reimbursed  by Company,  for and against any and all  liabilities,  obligations,
losses,  damages,   penalties,   actions,   judgments,  suits,  costs,  expenses
(including  counsel  fees and  disbursements)  or  disbursements  of any kind or
nature  whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising  its powers,  rights and remedies or  performing  its duties
hereunder  or under the other Loan  Documents  or  otherwise  in its capacity as
Administrative  Agent or  Syndication  Agent,  as the  case  may be,  in any way
relating  to or  arising  out of this  Agreement  or the other  Loan  Documents;
provided  that no Lender  shall be liable for any  portion of such  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements resulting from any Agent's gross negligence or willful
misconduct.  If any indemnity  furnished to any Agent for any purpose shall,  in
the opinion of such Agent, be insufficient  or become  impaired,  such Agent may
call  for  additional  indemnity  and  cease,  or not  commence,  to do the acts
indemnified against until such additional indemnity is furnished.

9.5  SUCCESSOR AGENTS AND SWING LINE LENDER.

          A. SUCCESSOR AGENTS. The Syndication Agent may resign at any time upon
one Business  Days' prior notice  thereof to Company and  Administrative  Agent.
Administrative  Agent may  resign at any time by giving 30 days'  prior  written
notice thereof to Syndication  Agent,  Lenders and Company,  and  Administrative
Agent may be  removed  at any time with or  without  cause by an  instrument  or
concurrent  instruments in writing delivered to Company and Administrative Agent
and  signed  by  Requisite  Lenders.  Upon any such  notice  of  resignation  of
Syndication Agent or Administrative  Agent or any such removal of Administrative
Agent,  Requisite  Lenders shall have the right, upon five Business Days' notice
to Company, to appoint a successor Syndication Agent or Administrative Agent, as
the case may be. Upon the acceptance of any appointment as Administrative  Agent
or  Syndication   Agent,   as  the  case  may  be,   hereunder  by  a  successor
Administrative  Agent or Syndication  Agent,  as the case may be, that successor
Administrative  Agent or Syndication  Agent, as the case may be, shall thereupon
succeed to and become vested with all the rights, powers,  privileges and duties
of the retiring or removed  Administrative  Agent or Syndication  Agent,  as the
case may be, and the  retiring or removed  Administrative  Agent or  Syndication
Agent,  as the case may be, shall be discharged  from its duties and obligations
under this Agreement.  After any retiring or removed  Administrative  Agent's or
Syndication Agent's resignation or removal hereunder as Administrative  Agent or
Syndication  Agent,  as the case may be, the  provisions of this Section 9 shall
inure to its benefit as to any actions  taken or omitted to be taken by it while
it was Administrative Agent or Syndication Agent, as the case may be, under this
Agreement.

          B.  SUCCESSOR  SWING  LINE  LENDER.  Any  resignation  or  removal  of
Administrative  Agent  pursuant to  subsection  9.5A shall also  constitute  the
resignation  or removal of BIS or its  successor as Swing Line  Lender,  and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such  appointment,  become the successor Swing Line Lender for
all purposes  hereunder.  In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the  retiring  or removed  Administrative  Agent in its
capacity  as Swing Line  Lender,  (ii) upon such  prepayment,  the  retiring  or
removed  Administrative  Agent and Swing Line Lender shall  surrender  the Swing
Line Note held by it to Company for cancellation,  and (iii) Company shall issue
a new  Swing  Line Note to the  successor  Administrative  Agent and Swing  Line
Lender substantially in the form of Exhibit VII annexed hereto, in the principal
amount  of the  Swing  Line  Loan  Commitment  then in  effect  and  with  other
appropriate insertions.

9.6  COLLATERAL DOCUMENTS AND GUARANTIES.

          Each Lender hereby further authorizes  Administrative Agent, on behalf
of and for the benefit of  Lenders,  to enter into each  Collateral  Document as
secured party and to be the agent for and  representative  of Lenders under each
Guaranty,  and each  Lender  agrees to be bound by the terms of each  Collateral
Document and Guaranty;  provided that  Administrative  Agent shall not (i) enter
into or consent to any material amendment,  modification,  termination or waiver
of any  provision  contained  in any  Collateral  Document  or  Guaranty or (ii)
release any  Collateral  (except as  otherwise  expressly  permitted or required
pursuant to the terms of this Agreement or the applicable  Collateral Document),
in each case  without the prior  consent of  Requisite  Lenders (or, if required
pursuant to subsection  10.6, all Lenders);  provided  further,  however,  that,
without further written consent or  authorization  from Lenders,  Administrative
Agent may execute any documents or instruments necessary to (a) release any Lien
encumbering  any  item of  Collateral  that is the  subject  of a sale or  other
disposition of assets permitted by this Agreement or to which Requisite  Lenders
have  otherwise  consented  or (b) release  any  Subsidiary  Guarantor  from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary  Guarantor is
sold to any Person  (other than an Affiliate  of Company)  pursuant to a sale or
other  disposition  permitted  hereunder  or to  which  Requisite  Lenders  have
otherwise  consented.  Anything  contained  in any of the Loan  Documents to the
contrary notwithstanding,  Company, each Agent and each Lender hereby agree that
(X) no Lender  shall  have any right  individually  to  realize  upon any of the
Collateral  under any Collateral  Document or to enforce any Guaranty,  it being
understood  and  agreed  that all  rights  and  remedies  under  the  Collateral
Documents and the Guaranties may be exercised solely by Administrative Agent for
the  benefit of Lenders in  accordance  with the terms  thereof,  and (Y) in the
event of a foreclosure by Administrative Agent on any of the Collateral pursuant
to a public or private sale, any Agent or any Lender may be the purchaser of any
or all of such  Collateral at any such sale and  Administrative  Agent, as agent
for and representative of Lenders (but not any Lender or Lenders in its or their
respective  individual capacities unless Requisite Lenders shall otherwise agree
in writing) shall be entitled,  for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the  Collateral  sold
at any such public sale, to use and apply any of the  Obligations as a credit on
account of the purchase price for any collateral payable by Administrative Agent
at such sale.


SECTION 10.    MISCELLANEOUS

10.1      ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS
          OF CREDIT.

     A. GENERAL.  Subject to subsection  10.1B, each Lender shall have the right
at any time to (i) sell,  assign or transfer to any Eligible  Assignee,  or (ii)
sell  participations to any Person in, all or any part of its Commitments or any
Loan or Loans made by it or its Letters of Credit or  participations  therein or
any other interest herein or in any other  Obligations owed to it; provided that
no such sale,  assignment,  transfer or participation shall, without the consent
of Company, require Company to file a registration statement with the Securities
and Exchange Commission or apply to qualify such sale,  assignment,  transfer or
participation under the securities laws of any state; provided,  further that no
such sale, assignment,  transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale,  assignment,  transfer
or  participation  of a corresponding  interest in the Revolving Loan Commitment
and the Revolving Loans of the Lender effecting such sale, assignment,  transfer
or participation;  and provided,  further that, anything contained herein to the
contrary  notwithstanding,  the Swing  Line Loan  Commitment  and the Swing Line
Loans of Swing Line Lender may not be sold, assigned or transferred as described
in clause (i) above to any Person  other than a successor  Administrative  Agent
and Swing Line Lender to the extent  contemplated  by subsection  9.5. Except as
otherwise  provided in this subsection 10.1, no Lender shall, as between Company
and such Lender, be relieved of any of its obligations  hereunder as a result of
any sale,  assignment or transfer of, or any granting of participations  in, all
or  any  part  of its  Commitments  or the  Loans,  the  Letters  of  Credit  or
participations therein, or the other Obligations owed to such Lender.

     B.   ASSIGNMENTS.

          (i) Amounts and Terms of Assignments. Each Commitment, Loan, Letter of
     Credit or participation therein, or other Obligation may (a) be assigned in
     any amount to another Lender, or to an Affiliate of the assigning Lender or
     another  Lender,  with the giving of notice to Company  and  Administrative
     Agent or (b) be assigned in an aggregate amount of not less than $5,000,000
     (or such lesser  amount as shall  constitute  the  aggregate  amount of the
     Commitments, Loans, Letters of Credit and participations therein, and other
     Obligations  of the  assigning  Lender or as may be consented to by Company
     and Agents) to any other Eligible Assignee with the consent of Company and,
     with  respect  to  all  Lenders  other  than  DLJ,  Syndication  Agent  and
     Administrative  Agent  (which  consent of  Company,  Syndication  Agent and
     Administrative  Agent  shall  not be  unreasonably  withheld  or  delayed);
     provided that any such  assignment in accordance  with either clause (a) or
     (b) above  shall  effect a pro rata  assignment  (based  on the  respective
     principal amounts thereof then outstanding or in effect) of each of (i) the
     Tranche A Term Loan Commitment or the Tranche A Term Loan and the Revolving
     Loan Commitment and the Revolving  Loans,  and (ii) the Tranche B Term Loan
     Commitment  or the  Tranche  B Term  Loan,  in each  case of the  assigning
     Lender;  provided,  further that the minimum  aggregate amount specified in
     clause  (b) above  shall not apply to the  Commitment,  Loans,  Letters  of
     Credit or participations therein or other Obligations of DLJ. To the extent
     of any such  assignment in accordance  with either clause (a) or (b) above,
     the assigning  Lender shall be relieved of its obligations  with respect to
     its Commitments,  Loans,  Letters of Credit or participations  therein,  or
     other  Obligations or the portion thereof so assigned.  The parties to each
     such assignment shall execute and deliver to Administrative  Agent, for its
     acceptance,  an Assignment  Agreement,  together  with a processing  fee of
     $3,000 (to be assessed at Administrative  Agent's election) and such forms,
     certificates  or other  evidence,  if any,  with  respect to United  States
     federal  income  tax  withholding   matters  as  the  assignee  under  such
     Assignment  Agreement  may be required to deliver to  Administrative  Agent
     pursuant to  subsection  2.7B(iii)(a).  Upon such  execution,  delivery and
     acceptance  from and after the effective date specified in such  Assignment
     Agreement,  (y) the assignee thereunder shall be a party hereto and, to the
     extent  that  rights and  obligations  hereunder  have been  assigned to it
     pursuant  to  such  Assignment   Agreement,   shall  have  the  rights  and
     obligations of a Lender hereunder and (z) the assigning  Lender  thereunder
     shall,  to the extent  that  rights  and  obligations  hereunder  have been
     assigned by it pursuant to such Assignment Agreement, relinquish its rights
     (other than any rights  which  survive the  termination  of this  Agreement
     under  subsection  10.9B) and be released from its  obligations  under this
     Agreement (and, in the case of an Assignment  Agreement covering all or the
     remaining  portion of an assigning  Lender's rights and  obligations  under
     this  Agreement,  such Lender  shall cease to be a party  hereto;  provided
     that,  anything  contained  in any of the Loan  Documents  to the  contrary
     notwithstanding,  if such Lender is the Issuing  Lender with respect to any
     outstanding Letters of Credit such Lender shall continue to have all rights
     and obligations of an Issuing Lender with respect to such Letters of Credit
     until the  cancellation  or  expiration  of such  Letters of Credit and the
     reimbursement of any amounts drawn thereunder).  The Commitments  hereunder
     shall be  modified  to reflect  the  Commitment  of such  assignee  and any
     remaining  Commitment of such assigning  Lender and, if any such assignment
     occurs  after the issuance of the Notes  hereunder,  the  assigning  Lender
     shall, upon the effectiveness of such assignment or as promptly  thereafter
     as practicable,  surrender its applicable Notes to Administrative Agent for
     cancellation,  and  thereupon new Notes shall be issued to the assignee and
     to the assigning Lender, substantially in the form of Exhibit IV, Exhibit V
     or  Exhibit  VI  annexed  hereto,  as the  case  may be,  with  appropriate
     insertions,  to reflect the new Commitments  and/or outstanding Term Loans,
     as the case may be, of the assignee and the assigning Lender.

          (ii)  Acceptance  by  Administrative  Agent.  Upon its  receipt  of an
     Assignment  Agreement  executed  by an  assigning  Lender  and an  assignee
     representing that it is an Eligible Assignee,  together with the processing
     fee referred to in subsection 10.1B(i) and any forms, certificates or other
     evidence  with  respect to United  States  federal  income tax  withholding
     matters  that such  assignee  may be required to deliver to  Administrative
     Agent pursuant to subsection  2.7B(iii)(a),  Administrative Agent shall, if
     Agents and Company have consented to the assignment  evidenced  thereby (in
     each case to the extent  such  consent is required  pursuant to  subsection
     10.1B(i)),  (a) accept such Assignment Agreement by executing a counterpart
     thereof as provided  therein (which  acceptance shall evidence any required
     consent of  Administrative  Agent to such  assignment)  and (b) give prompt
     notice  thereof to Company.  Administrative  Agent shall maintain a copy of
     each  Assignment  Agreement  delivered to and accepted by it as provided in
     this subsection 10.1B(ii).

     C. PARTICIPATIONS. The holder of any participation, other than an Affiliate
of the Lender granting such participation, shall not be entitled to require such
Lender  to take or omit to take any  action  hereunder  except  action  directly
affecting  (i) the extension of the  scheduled  final  maturity date of any Loan
allocated to such  participation  or (ii) a reduction of the principal amount of
or the rate of interest payable on any Loan allocated to such participation, and
all amounts  payable by Company  hereunder  (including  amounts  payable to such
Lender pursuant to subsections 2.6D, 2.7 and 3.6) shall be determined as if such
Lender  had  not  sold  such  participation.  Company  and  each  Lender  hereby
acknowledge  and agree that,  solely for purposes of subsections  10.4 and 10.5,
(a) any  participation  will give rise to a direct  obligation of Company to the
participant and (b) the participant shall be considered to be a "Lender".

     D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments and
participations permitted under the foregoing provisions of this subsection 10.1,
any Lender may  assign  and  pledge all or any  portion of its Loans,  the other
Obligations  owed to such Lender,  and its Notes to any Federal  Reserve Bank as
collateral  security  pursuant to  Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank;  provided that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations  hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning  Lender to take or omit to
take any action hereunder.

     E.   INFORMATION.  Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of
that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to
subsection 10.19.

     F.  REPRESENTATIONS  OF LENDERS.  Each Lender listed on the signature pages
hereof  hereby  represents  and  warrants  (i) that it is an  Eligible  Assignee
described in clause (A) of the definition  thereof;  (ii) that it has experience
and  expertise in the making of loans such as the Loans;  and (iii) that it will
make its Loans for its own account in the  ordinary  course of its  business and
without  a view  to  distribution  of  such  Loans  within  the  meaning  of the
Securities  Act or the Exchange Act or other federal  securities  laws (it being
understood  that,  subject  to the  provisions  of  this  subsection  10.1,  the
disposition  of such Loans or any  interests  therein  shall at all times remain
within its exclusive control).  Each Lender that becomes a party hereto pursuant
to an Assignment Agreement shall be deemed to agree that the representations and
warranties of such Lender contained in Section 2(c) of such Assignment Agreement
are incorporated herein by this reference.

10.2      EXPENSES.

          Whether  or  not  the  transactions   contemplated   hereby  shall  be
consummated,  Company  agrees to pay promptly (i) all the actual and  reasonable
costs and  expenses  of  preparation  of the Loan  Documents  and any  consents,
amendments,  waivers  or other  modifications  thereto;  (ii)  all the  costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Agents or Lenders as to any legal matters arising hereunder) and of Company's
performance of and compliance  with all agreements and conditions on its part to
be performed or complied with under this  Agreement and the other Loan Documents
including with respect to confirming  compliance with  environmental,  insurance
and solvency requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Arranger,  Syndication Agent and  Administrative  Agent (including
allocated  costs of  internal  counsel)  in  connection  with  the  negotiation,
preparation,  execution  and  administration  of  the  Loan  Documents  and  any
consents,  amendments,  waivers  or other  modifications  thereto  and any other
documents  or  matters  requested  by  Company;  (iv) all the  actual  costs and
reasonable  expenses of creating and perfecting Liens in favor of Administrative
Agent on behalf of Lenders pursuant to any Collateral Document, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance  premiums,  and reasonable fees,  expenses and  disbursements of
counsel to each of  Syndication  Agent and  Administrative  Agent and of counsel
providing any opinions that Syndication Agent, Administrative Agent or Requisite
Lenders may request in respect of the Collateral  Documents or the Liens created
pursuant thereto;  (v) all the actual costs and reasonable  expenses  (including
the reasonable fees, expenses and disbursements of any auditors,  accountants or
appraisers  and any  environmental  or other  consultants,  advisors  and agents
employed  or  retained  by  Syndication  Agent,  Administrative  Agent  or their
respective counsel) of obtaining and reviewing any appraisals provided for under
subsection 4.1G or 6.9C, any environmental  audits or reports provided for under
subsection  4.1H or  6.9B(ix)  and any  audits  or  reports  provided  for under
subsection  4.1F or 6.5B with respect to Inventory  and accounts  receivable  of
Company and its  Subsidiaries;  (vi) the custody or  preservation  of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Arranger,  Syndication  Agent or  Administrative  Agent in  connection  with the
syndication of the Commitments and the negotiation, preparation and execution of
the Loan Documents and any consents,  amendments, waivers or other modifications
thereto  and  the  transactions  contemplated  thereby;  and  (viii)  after  the
occurrence of an Event of Default, all costs and expenses,  including reasonable
attorneys'  fees (including  allocated  costs of internal  counsel) and costs of
settlement, incurred by Agents and Lenders in enforcing any Obligations of or in
collecting  any  payments  due from any Loan Party  hereunder or under the other
Loan Documents by reason of such Event of Default  (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the  enforcement  of the  Guaranties or in connection  with any  refinancing  or
restructuring  of the credit  arrangements  provided under this Agreement in the
nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings.

10.3      INDEMNITY.

          In addition to the payment of expenses  pursuant to  subsection  10.2,
whether  or not the  transactions  contemplated  hereby  shall  be  consummated,
Company  agrees  to defend  (subject  to  Indemnitees'  selection  of  counsel),
indemnify, pay and hold harmless Arranger, Agents and Lenders, and the officers,
directors,  employees,  agents and  affiliates  of Arranger,  Agents and Lenders
(collectively   called  the  "INDEMNITEES"),   from  and  against  any  and  all
Indemnified  Liabilities (as hereinafter  defined);  provided that Company shall
not  have  any  obligation  to any  Indemnitee  hereunder  with  respect  to any
Indemnified  Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.

          As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all  liabilities,  obligations,  losses,  damages  (including  natural  resource
damages),  penalties, actions, judgments, suits, claims (including Environmental
Claims),  costs  (including  the costs of any  investigation,  study,  sampling,
testing,  abatement,  cleanup,  removal,  remediation or other  response  action
necessary  to  remove,  remediate,  clean up or abate  any  Hazardous  Materials
Activity),   expenses  and  disbursements  of  any  kind  or  nature  whatsoever
(including the reasonable fees and  disbursements  of counsel for Indemnitees in
connection  with  any  investigative,   administrative  or  judicial  proceeding
commenced or threatened by any Person,  whether or not any such Indemnitee shall
be designated as a party or a potential party thereto,  and any fees or expenses
incurred by Indemnitees in enforcing this indemnity),  whether direct,  indirect
or  consequential  and  whether  based on any  federal,  state or foreign  laws,
statutes,  rules or  regulations  (including  securities  and  commercial  laws,
statutes,  rules or  regulations  and  Environmental  Laws),  on  common  law or
equitable  cause or on contract or otherwise,  that may be imposed on,  incurred
by, or  asserted  against  any such  Indemnitee,  in any manner  relating  to or
arising  out  of  (i)  this  Agreement  or  the  other  Loan  Documents  or  the
transactions  contemplated  hereby or thereby  (including  Lenders' agreement to
make the Loans  hereunder or the use or intended use of the proceeds  thereof or
the  issuance of Letters of Credit  hereunder  or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection  from,  or  other  realization  upon  any  of the  Collateral  or the
enforcement of the Guaranties),  (ii) the statements contained in the commitment
letter  delivered by any Lender to Company with  respect  thereto,  or (iii) any
Environmental  Claim or any Hazardous  Materials Activity relating to or arising
from,  directly or indirectly,  any past or present  activity,  operation,  land
ownership, or practice of Company or any of its Subsidiaries.

          To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be  unenforceable  in whole or in
part  because  they are  violative of any law or public  policy,  Company  shall
contribute  the maximum  portion that it is  permitted to pay and satisfy  under
applicable law to the payment and  satisfaction of all  Indemnified  Liabilities
incurred by Indemnitees or any of them.

10.4      SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.

          In addition to any rights now or hereafter  granted  under  applicable
law and not by way of limitation of any such rights,  upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time,  without notice to Company or to any other Person, any such notice
being hereby  expressly  waived,  to set off and to appropriate and to apply any
and all  deposits  (general  or special,  including  Indebtedness  evidenced  by
certificates of deposit,  whether matured or unmatured,  but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender to
or for the  credit or the  account  of  Company  against  and on  account of the
obligations and liabilities of Company to that Lender under this Agreement,  the
Letters  of Credit and  participations  therein  and the other  Loan  Documents,
including  all claims of any nature or  description  arising out of or connected
with this  Agreement,  the Letters of Credit and  participations  therein or any
other Loan Document,  irrespective  of whether or not (i) that Lender shall have
made any demand  hereunder or (ii) the principal of or the interest on the Loans
or any  amounts  in respect of the  Letters of Credit or any other  amounts  due
hereunder  shall have become due and payable  pursuant to Section 8 and although
said  obligations  and  liabilities,  or  any of  them,  may  be  contingent  or
unmatured.  Company  hereby  further  grants  to each  Agent  and each  Lender a
security  interest in all deposits and  accounts  maintained  with such Agent or
such Lender as security for the Obligations.

10.5      RATABLE SHARING.

          Lenders  hereby  agree  among  themselves  that if any of them  shall,
whether by voluntary  payment  (other than a voluntary  prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security,  through the  exercise of any right of set-off or  banker's  lien,  by
counterclaim  or cross action or by the  enforcement of any right under the Loan
Documents or otherwise,  or as adequate  protection of a deposit treated as cash
collateral  under  the  Bankruptcy  Code,  receive  payment  or  reduction  of a
proportion of the aggregate  amount of principal,  interest,  amounts payable in
respect of Letters of Credit,  fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender)  which is greater than the  proportion  received by
any other Lender in respect of the  Aggregate  Amounts Due to such other Lender,
then the Lender receiving such proportionately  greater payment shall (i) notify
Administrative  Agent and each other  Lender of the receipt of such  payment and
(ii) apply a portion of such payment to purchase  participations (which it shall
be deemed to have purchased from each seller of a  participation  simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts  Due to the  other  Lenders  so that all such  recoveries  of  Aggregate
Amounts  Due shall be shared  by all  Lenders  in  proportion  to the  Aggregate
Amounts  Due to  them;  provided  that if all or  part  of such  proportionately
greater payment received by such purchasing Lender is thereafter  recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases   shall  be  rescinded   and  the   purchase   prices  paid  for  such
participations shall be returned to such purchasing Lender ratably to the extent
of such  recovery,  but  without  interest.  Company  expressly  consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien,  set-off or counterclaim  with
respect to any and all  monies  owing by Company  to that  holder  with  respect
thereto as fully as if that  holder  were owed the  amount of the  participation
held by that holder.

10.6      AMENDMENTS AND WAIVERS.

          No amendment, modification,  termination or waiver of any provision of
this  Agreement  or of the Notes,  and no consent  to any  departure  by Company
therefrom,  shall in any event be effective  without the written  concurrence of
Requisite Lenders; provided that any such amendment, modification,  termination,
waiver or  consent  which:  increases  the amount of any of the  Commitments  or
reduces  the  principal  amount of any of the  Loans;  changes in any manner the
definition of "Pro Rata Share" or the definition of "Requisite Lenders"; changes
in any manner any provision of this  Agreement  which,  by its terms,  expressly
requires the approval or  concurrence  of all Lenders;  postpones  the scheduled
final maturity date (but not the date of any scheduled installment of principal)
of any of the Loans;  postpones  the date on which any  interest or any fees are
payable;  decreases  the interest rate borne by any of the Loans (other than any
waiver of any  increase  in the  interest  rate  applicable  to any of the Loans
pursuant  to  subsection  2.2E) or the  amount  of any fees  payable  hereunder;
increases the maximum duration of Interest Periods permitted hereunder;  reduces
the amount or  postpones  the due date of any amount  payable in respect  of, or
extends the required  expiration  date of, any Letter of Credit;  changes in any
manner the obligations of Lenders relating to the purchase of  participations in
Letters of Credit;  releases any Lien granted in favor of  Administrative  Agent
with  respect to 25% or more in aggregate  fair market value of the  Collateral;
releases any  Subsidiary  Guarantor  from its  obligations  under the Subsidiary
Guaranty or any Affiliated Stockholder from its obligations under the Affiliated
Stockholder  Guaranty,  in each case other than in accordance  with the terms of
the Loan  Documents;  or  changes  in any manner  the  provisions  contained  in
subsection 8.1 or this subsection 10.6 shall be effective only if evidenced by a
writing signed by or on behalf of all Lenders;  provided,  further,  that if any
matter described in the foregoing  proviso relates only to a Revolving Loan or a
Tranche A Term Loan,  the  approval of all Lenders who hold Tranche A Term Loans
or hold Revolving  Commitments  shall be sufficient and, if any matter described
in the foregoing  proviso relates only to a Tranche B Term Loan, the approval of
all Lenders who hold Tranche B Term Loans shall be sufficient.  In addition, (i)
any  amendment,  modification,  termination  or waiver of any of the  provisions
contained in Section 4 shall be effective  only if evidenced by a writing signed
by  or  on  behalf  of  Agents  and  Requisite   Lenders,   (ii)  no  amendment,
modification,  termination  or  waiver  of any  provision  of any Note  shall be
effective  without the written  concurrence of the Lender which is the holder of
that  Note,  (iii) no  amendment,  modification,  termination  or  waiver of any
provision of  subsection  2.1A(iv) or of any other  provision of this  Agreement
relating  to the Swing Line Loan  Commitment  or the Swing  Line Loans  shall be
effective  without the written  concurrence  of Swing Line  Lender,  and (iv) no
amendment, modification,  termination or waiver of any provision of Section 9 or
of any other provision of this Agreement which, by its terms, expressly requires
the approval or  concurrence  of Agents  shall be effective  without the written
concurrence  of Agents.  Administrative  Agent may, but shall have no obligation
to, with the  concurrence  of any  Lender,  execute  amendments,  modifications,
waivers or consents  on behalf of that  Lender.  Any waiver or consent  shall be
effective only in the specific  instance and for the specific  purpose for which
it was  given.  No  notice to or demand on  Company  in any case  shall  entitle
Company  to  any  other  or  further  notice  or  demand  in  similar  or  other
circumstances.  Any  amendment,  modification,  termination,  waiver or  consent
effected in  accordance  with this  subsection  10.6 shall be binding  upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.

      INDEPENDENCE OF COVENANTS.

          All covenants hereunder shall be given independent effect so that if a
particular  action or condition is not permitted by any of such  covenants,  the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another  covenant shall not avoid the occurrence of an Event
of Default or  Potential  Event of Default if such action is taken or  condition
exists.

10.8      NOTICES.

          Unless otherwise  specifically  provided  herein,  any notice or other
communication  herein  required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier  service  and shall be deemed to have been given  when  delivered  in
person or by courier  service,  upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly  addressed;  provided that notices to Agents shall not be effective
until received.  For the purposes hereof, the address of each party hereto shall
be as set forth under such party's name on the signature  pages hereof or (i) as
to Company and Agents,  such other address as shall be designated by such Person
in a written  notice  delivered to the other parties  hereto and (ii) as to each
other  party,  such  other  address  as shall be  designated  by such party in a
written notice delivered to Administrative Agent.

10.9      SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS.

          A. All  representations,  warranties and agreements  made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.

          B. Notwithstanding anything in this Agreement or implied by law to the
contrary,  the agreements of Company set forth in subsections  2.6D,  2.7, 3.5A,
3.6, 10.2,  10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the Loans,  the  cancellation or
expiration of the Letters of Credit and the  reimbursement  of any amounts drawn
thereunder, and the termination of this Agreement.

10.10     FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE.

          No  failure  or delay on the part of any  Agent or any  Lender  in the
exercise  of any power,  right or  privilege  hereunder  or under any other Loan
Document  shall  impair such power,  right or  privilege or be construed to be a
waiver of any default or acquiescence  therein,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  power,  right or  privilege.  All rights and
remedies  existing  under  this  Agreement  and the  other  Loan  Documents  are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

10.11     MARSHALLING; PAYMENTS SET ASIDE.

          None of Agents or Lenders shall be under any obligation to marshal any
assets in favor of Company or any other party or against or in payment of any or
all of the  Obligations.  To the extent that Company makes a payment or payments
to Administrative  Agent or Lenders (or to Administrative  Agent for the benefit
of  Lenders),  or any of Agents or Lenders  enforce any  security  interests  or
exercise their rights of setoff, and such payment or payments or the proceeds of
such  enforcement  or setoff or any part thereof are  subsequently  invalidated,
declared to be  fraudulent  or  preferential,  set aside  and/or  required to be
repaid to a trustee,  receiver or any other party under any bankruptcy  law, any
other state or federal law,  common law or any  equitable  cause,  then,  to the
extent of such recovery,  the obligation or part thereof originally  intended to
be satisfied,  and all Liens,  rights and remedies  therefor or related thereto,
shall be revived and  continued  in full force and effect as if such  payment or
payments had not been made or such enforcement or setoff had not occurred.

10.12     SEVERABILITY.

          In case any  provision in or  obligation  under this  Agreement or the
Notes  shall be  invalid,  illegal or  unenforceable  in any  jurisdiction,  the
validity,   legality  and   enforceability   of  the  remaining   provisions  or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

10.13     OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS'
RIGHTS.

          The  obligations of Lenders  hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing  contained herein or in any other Loan Document,  and no action taken by
Lenders pursuant hereto or thereto,  shall be deemed to constitute  Lenders as a
partnership,  an association,  a joint venture or any other kind of entity.  The
amounts  payable at any time  hereunder  to each Lender  shall be a separate and
independent  debt,  and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.

10.14     HEADINGS.

          Section and subsection  headings in this Agreement are included herein
for  convenience  of  reference  only and  shall not  constitute  a part of this
Agreement for any other purpose or be given any substantive effect.

10.15     APPLICABLE LAW.

          THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED  AND ENFORCED IN  ACCORDANCE  WITH,
THE  INTERNAL  LAWS OF THE STATE OF NEW YORK  (INCLUDING  SECTION  5-1401 OF THE
GENERAL  OBLIGATIONS LAW OF THE STATE OF NEW YORK),  WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.

10.16     SUCCESSORS AND ASSIGNS.

          This  Agreement  shall be binding  upon the  parties  hereto and their
respective  successors and assigns and shall inure to the benefit of the parties
hereto and the  successors  and  assigns of Lenders  (it being  understood  that
Lenders' rights of assignment are subject to subsection 10.1). Neither Company's
rights or  obligations  hereunder  nor any  interest  therein may be assigned or
delegated by Company without the prior written consent of all Lenders.

10.17     CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

          ALL JUDICIAL  PROCEEDINGS  BROUGHT  AGAINST  COMPANY ARISING OUT OF OR
RELATING  TO THIS  AGREEMENT  OR ANY OTHER  LOAN  DOCUMENT,  OR ANY  OBLIGATIONS
THEREUNDER,  MAY  BE  BROUGHT  IN  ANY  STATE  OR  FEDERAL  COURT  OF  COMPETENT
JURISDICTION  IN THE  STATE,  COUNTY  AND CITY OF NEW  YORK.  BY  EXECUTING  AND
DELIVERING  THIS  AGREEMENT,  COMPANY,  FOR  ITSELF AND IN  CONNECTION  WITH ITS
PROPERTIES, IRREVOCABLY

          (I)  ACCEPTS GENERALLY AND UNCONDITIONALLY THE
     NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;

          (II)      WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

          (III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY
     SUCH COURT MAY BE MADE BY  REGISTERED  OR CERTIFIED  MAIL,  RETURN  RECEIPT
     REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SUBSECTION
     10.8;

          (IV)  AGREES  THAT  SERVICE  AS  PROVIDED  IN  CLAUSE  (III)  ABOVE IS
     SUFFICIENT  TO  CONFER  PERSONAL  JURISDICTION  OVER  COMPANY  IN ANY  SUCH
     PROCEEDING  IN ANY SUCH COURT,  AND  OTHERWISE  CONSTITUTES  EFFECTIVE  AND
     BINDING SERVICE IN EVERY RESPECT;

          (V)  AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE
     PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING
     PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER
     JURISDICTION; AND

          (VI) AGREES THAT THE PROVISIONS OF THIS  SUBSECTION  10.17 RELATING TO
     JURISDICTION  AND VENUE  SHALL BE BINDING  AND  ENFORCEABLE  TO THE FULLEST
     EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402 OR
     OTHERWISE.

10.18     WAIVER OF JURY TRIAL.

          EACH OF THE  PARTIES  TO THIS  AGREEMENT  HEREBY  AGREES  TO WAIVE ITS
RESPECTIVE  RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN  THEM  RELATING TO THE SUBJECT  MATTER OF THIS LOAN  TRANSACTION  OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be  all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this  transaction,  including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims.  Each party hereto acknowledges that this waiver is a material
inducement to enter into a business  relationship,  that each has already relied
on this waiver in entering into this  Agreement,  and that each will continue to
rely on this waiver in their related future dealings.  Each party hereto further
warrants and represents  that it has reviewed this waiver with its legal counsel
and that it knowingly  and  voluntarily  waives its jury trial rights  following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED  EITHER  ORALLY OR IN WRITING  (OTHER  THAN BY A MUTUAL  WRITTEN
WAIVER  SPECIFICALLY  REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO),  AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT  AMENDMENTS,
RENEWALS,  SUPPLEMENTS  OR  MODIFICATIONS  TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN  DOCUMENTS OR TO ANY OTHER  DOCUMENTS OR  AGREEMENTS  RELATING TO THE LOANS
MADE  HEREUNDER.  In the event of  litigation,  this Agreement may be filed as a
written consent to a trial by the court.

10.19     CONFIDENTIALITY.

          Each Lender shall hold all non-public information obtained pursuant to
the  requirements of this Agreement which has been identified as confidential by
Company in  accordance  with such  Lender's  customary  procedures  for handling
confidential  information  of this nature and in accordance  with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender  may  make  disclosures  to  Affiliates  of such  Lender  or  disclosures
reasonably  required by any bona fide  assignee,  transferee or  participant  in
connection  with the  contemplated  assignment or transfer by such Lender of any
Loans or any participations  therein or disclosures required or requested by any
governmental  agency or  representative  thereof or pursuant  to legal  process;
provided that, unless specifically  prohibited by applicable law or court order,
each Lender shall notify  Company of any request by any  governmental  agency or
representative  thereof  (other  than any such  request in  connection  with any
examination  of the  financial  condition  of such  Lender by such  governmental
agency) for disclosure of any such non-public information prior to disclosure of
such  information;  and  provided,  further that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.

10.20     COUNTERPARTS; EFFECTIVENESS.

          This Agreement and any  amendments,  waivers,  consents or supplements
hereto or in connection  herewith may be executed in any number of  counterparts
and by different parties hereto in separate counterparts,  each of which when so
executed and delivered  shall be deemed an original,  but all such  counterparts
together shall constitute but one and the same  instrument;  signature pages may
be  detached  from  multiple  separate  counterparts  and  attached  to a single
counterpart  so that all  signature  pages are  physically  attached to the same
document.  This  Agreement  shall  become  effective  upon  the  execution  of a
counterpart  hereof by each of the  parties  hereto and  receipt by Company  and
Agents of written or telephonic notification of such execution and authorization
of delivery thereof.


          [Remainder of page intentionally left blank]
<PAGE>
          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be duly  executed and  delivered by their  respective  officers  thereunto  duly
authorized as of the date first written above.



          COMPANY:

                         HOULIHAN'S RESTAURANTS,  INC.


                         By:
                              Frederick R. Hipp
                              President and
                              Chief Executive Officer

                         Notice Address:

                              Two Brush Creek Boulevard
                              Kansas City, MO 64112
                              Attention:  General Counsel


<PAGE>

          LENDERS:

                         DLJ CAPITAL FUNDING, INC.,
                         individually and as Syndication Agent


                         By:
                         Title:

                         Notice Address:

                              2121 Avenue of the Stars
                              Los Angeles, CA 90067-5014
                              Attention:  Eric Swanson

<PAGE>


                         BANQUE INDOSUEZ, New York Branch,
                         individually and as Administrative
Agent


                         By:
                         Title:

                         By:
                         Title:

                         Notice Address:

                              1211 Avenue of the Americas
                              7th Floor
                              New York, NY 10036
                              Attention:  Andrew Marshak

<PAGE>
                         CREDIT LYONNAIS Chicago Branch,
                         individually and as Documentation
                         Agent


                         By:
                         Title:

                         Notice Address:

                              227 W. Monroe, Suite 3800
                              Chicago, IL 60606
                              Attention:  Peter Kelly

<PAGE>
                         THE FIRST NATIONAL BANK OF BOSTON



                         By:
                         Title:


                         By:
                         Title:


                         Notice Address:

                              100 Federal Street
                              MS 01-09-05
                              Boston, MA  02106
                              Attention:  Rodney L. Guinn


<PAGE>
                         MERCANTILE BANK



                         By:
                         Title:


                         Notice Address:

                              1101 Walnut, 7th Floor
                              Kansas City, MO  64108
                              Attention:  Monte Smith


<PAGE>
                         PRIME INCOME TRUST



                         By:
                         Title:


                         Notice Address:

                              Two World Trade Center
                              72nd Floor
                              New York, NY 10048
                              Attention:  Louis Pistecchia


<PAGE>
                         CITIBANK, N.A.


                         By:
                         Title:


                         Notice Address:

                              399 Park Ave.
                              Ninth Floor-Zone 8
                              New York, NY  10043
                              Attention:  Hans Christensen


<PAGE>
                         KZH HOLDING CORPORATION



                         By:
                         Title:


                         Notice Address:

                              c/o The Chase Manhattan Bank
                              450 West 33rd St., 15th Floor
                              New York, NY  10001
                              Attention:  Robert Goodwin

                         with copy to:

                              SAI Investment Advisor, Inc.
                              Sun America Center - 34th Floor
                              Los Angeles, CA 90067-6022
                              Attention:  Sabur Moini


<PAGE>
                                                           DRAFT
                                                        04/09/97




                        U.S. $90,000,000


              AMENDED AND RESTATED CREDIT AGREEMENT


                   DATED AS OF APRIL 15, 1997


                              AMONG


                  HOULIHAN'S RESTAURANTS, INC.,
                          AS BORROWER,

                   THE LENDERS LISTED HEREIN,
                           AS LENDERS,


                   DLJ CAPITAL FUNDING, INC.,
                      AS SYNDICATION AGENT,


                BANQUE INDOSUEZ, NEW YORK BRANCH,
                    AS ADMINISTRATIVE AGENT,


                               AND


                 CREDIT LYONNAIS CHICAGO BRANCH,
                     AS DOCUMENTATION AGENT

                          ARRANGED BY:


       DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION


<PAGE>
                  HOULIHAN'S RESTAURANTS, INC.

              AMENDED AND RESTATED CREDIT AGREEMENT

                        TABLE OF CONTENTS

                                                            PAGE

SECTION 1.     DEFINITIONS. . . . . . . . . . . . . . . . . .  3
     1.1  Certain Defined Terms . . . . . . . . . . . . . . .  3
     1.2  Accounting Terms; Utilization of GAAP for
          Purposes of Calculations Under Agreement. . . . . . 31
     1.3  Other Definitional Provisions and Rules of
          Construction. . . . . . . . . . . . . . . . . . . . 32

SECTION 2.     AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . 32
     2.1  Commitments; Making of Loans; Notes . . . . . . . . 32
     2.2  Interest on the Loans . . . . . . . . . . . . . . . 40
     2.3  Fees. . . . . . . . . . . . . . . . . . . . . . . . 44
     2.4  Repayments, Prepayments and Reductions in
          Revolving Loan Commitments; General Provisions
          Regarding Payments. . . . . . . . . . . . . . . . . 45
     2.5  Use of Proceeds . . . . . . . . . . . . . . . . . . 54
     2.6  Special Provisions Governing Eurodollar Rate
          Loans . . . . . . . . . . . . . . . . . . . . . . . 54
     2.7  Increased Costs; Taxes; Capital Adequacy. . . . . . 57
     2.8  Obligation of Lenders and Issuing Lenders to
          Mitigate. . . . . . . . . . . . . . . . . . . . . . 61

SECTION 3.     LETTERS OF CREDIT. . . . . . . . . . . . . . . 62
     3.1  Issuance of Letters of Credit and Lenders'
          Purchase of Participations Therein. . . . . . . . . 62
     3.2  Letter of Credit Fees . . . . . . . . . . . . . . . 65
     3.3  Drawings and Reimbursement of Amounts Paid Under
          Letters of Credit.. . . . . . . . . . . . . . . . . 66
     3.4  Obligations Absolute. . . . . . . . . . . . . . . . 69
     3.5  Indemnification; Nature of Issuing Lenders'
          Duties. . . . . . . . . . . . . . . . . . . . . . . 70
     3.6  Increased Costs and Taxes Relating to Letters of
          Credit. . . . . . . . . . . . . . . . . . . . . . . 71

SECTION 4.     CONDITIONS TO LOANS AND LETTERS OF CREDIT. . . 73
     4.1  Conditions to Term Loans and Initial Revolving
          Loans and Swing Line Loans. . . . . . . . . . . . . 73
     4.2  Conditions to All Loans . . . . . . . . . . . . . . 79
     4.3  Conditions to Letters of Credit . . . . . . . . . . 80
     4.4  Items to be Delivered After the Closing Date. . . . 81

SECTION 5.     COMPANY'S REPRESENTATIONS AND WARRANTIES . . . 81
     5.1  Organization, Powers, Qualification, Good
          Standing, Business and Subsidiaries . . . . . . . . 81
     5.2  Authorization of Borrowing, etc.. . . . . . . . . . 82
     5.3  Financial Condition . . . . . . . . . . . . . . . . 83
     5.4  No Material Adverse Change; No Restricted Junior
          Payments. . . . . . . . . . . . . . . . . . . . . . 83
     5.5  Title to Properties; Liens; Real Property . . . . . 84
     5.6  Litigation; Adverse Facts . . . . . . . . . . . . . 84
     5.7  Payment of Taxes. . . . . . . . . . . . . . . . . . 85
     5.8  Performance of Agreements; Materially Adverse
          Agreements; Material Contracts. . . . . . . . . . . 85
     5.9  Governmental Regulation . . . . . . . . . . . . . . 85
     5.10      Securities Activities. . . . . . . . . . . . . 86
     5.11      Employee Benefit Plans . . . . . . . . . . . . 86
     5.12      Certain Fees . . . . . . . . . . . . . . . . . 87
     5.13      Environmental Protection . . . . . . . . . . . 87
     5.14      Employee Matters . . . . . . . . . . . . . . . 88
     5.15      Solvency . . . . . . . . . . . . . . . . . . . 88
     5.16      Matters Relating to Collateral . . . . . . . . 88
     5.17      Disclosure . . . . . . . . . . . . . . . . . . 89

SECTION 6.     COMPANY'S AFFIRMATIVE COVENANTS. . . . . . . . 90
     6.1  Financial Statements and Other Reports. . . . . . . 90
     6.2  Corporate Existence, etc. . . . . . . . . . . . . . 96
     6.3  Payment of Taxes and Claims; Tax Consolidation. . . 97
     6.4  Maintenance of Properties; Insurance;
          Application of Net Insurance/ Condemnation
          Proceeds. . . . . . . . . . . . . . . . . . . . . . 97
     6.5  Inspection Rights; Audits of Inventory and
          Accounts Receivable; Lender Meeting . . . . . . . . 98
     6.6  Compliance with Laws, etc.. . . . . . . . . . . . . 98
     6.7  Environmental Review and Investigation,
          Disclosure, Etc.; Company's Actions Regarding
          Hazardous Materials Activities, Environmental
          Claims and Violations of Environmental Laws . . . . 99
     6.8  Execution of Subsidiary Guaranty and Personal
          Property Collateral Documents by Certain
          Subsidiaries and Future Subsidiaries; Execution
          of Affiliated Stockholder Pledge Agreement by
          Future Affiliated Stockholders; IP Collateral . . .101
     6.9  Conforming Leasehold Interests; Matters Relating
          to Additional Real Property Collateral. . . . . . .103
     6.10      Interest Rate Protection . . . . . . . . . . .105
     6.11      Escrow Account . . . . . . . . . . . . . . . .105
     6.12      Recapitalization Fees. . . . . . . . . . . . .106

SECTION 7.     COMPANY'S NEGATIVE COVENANTS . . . . . . . . .106
     7.1  Indebtedness. . . . . . . . . . . . . . . . . . . .106
     7.2  Liens and Related Matters . . . . . . . . . . . . .107
     7.3  Investments; Joint Ventures . . . . . . . . . . . .108
     7.4  Contingent Obligations. . . . . . . . . . . . . . .109
     7.5  Restricted Junior Payments. . . . . . . . . . . . .110
     7.6  Financial Covenants . . . . . . . . . . . . . . . .110
     7.7  Restriction on Fundamental Changes; Asset Sales
          and Acquisitions. . . . . . . . . . . . . . . . . .114
     7.8  Consolidated Capital Expenditures . . . . . . . . .115
     7.9  Restriction on Leases . . . . . . . . . . . . . . .116
     7.10      Sales and Lease-Backs. . . . . . . . . . . . .117
     7.11      Sale or Discount of Receivables. . . . . . . .117
     7.12      Transactions with Shareholders and
          Affiliates. . . . . . . . . . . . . . . . . . . . .118
     7.13      Disposal of Subsidiary Stock . . . . . . . . .118
     7.14      Conduct of Business. . . . . . . . . . . . . .118
     7.15      Amendments of Documents Relating to
               Subordinated Indebtedness. . . . . . . . . . .118
     7.16      Fiscal Year. . . . . . . . . . . . . . . . . .119

SECTION 8.     EVENTS OF DEFAULT. . . . . . . . . . . . . . .119
     8.1  Failure to Make Payments When Due . . . . . . . . .119
     8.2  Default in Other Agreements . . . . . . . . . . . .119
     8.3  Breach of Certain Covenants . . . . . . . . . . . .120
     8.4  Breach of Warranty. . . . . . . . . . . . . . . . .120
     8.5  Other Defaults Under Loan Documents . . . . . . . .120
     8.6  Involuntary Bankruptcy; Appointment of Receiver,
          etc.. . . . . . . . . . . . . . . . . . . . . . . .120
     8.7  Voluntary Bankruptcy; Appointment of Receiver,
          etc.. . . . . . . . . . . . . . . . . . . . . . . .121
     8.8  Judgments and Attachments . . . . . . . . . . . . .121
     8.9  Dissolution . . . . . . . . . . . . . . . . . . . .121
     8.10      Employee Benefit Plans . . . . . . . . . . . .121
     8.11      Material Adverse Effect. . . . . . . . . . . .122
     8.12      Change in Control. . . . . . . . . . . . . . .122
     8.13      Invalidity of Guaranties; Failure of
               Security; Repudiation of Obligations . . . . .122

SECTION 9.     THE AGENTS . . . . . . . . . . . . . . . . . .124
     9.1  Appointment . . . . . . . . . . . . . . . . . . . .124
     9.2  Powers and Duties; General Immunity . . . . . . . .126
     9.3  Representations and Warranties; No
          Responsibility For Appraisal of Creditworthiness. .127
     9.4  Right to Indemnity. . . . . . . . . . . . . . . . .128
     9.5  Successor Agents and Swing Line Lender. . . . . . .128
     9.6  Collateral Documents and Guaranties . . . . . . . .129

SECTION 10.    MISCELLANEOUS. . . . . . . . . . . . . . . . .130
     10.1      Assignments and Participations in Loans and
               Letters of Credit. . . . . . . . . . . . . . .130
     10.2      Expenses . . . . . . . . . . . . . . . . . . .133
     10.3      Indemnity. . . . . . . . . . . . . . . . . . .134
     10.4      Set-Off; Security Interest in Deposit
          Accounts. . . . . . . . . . . . . . . . . . . . . .135
     10.5      Ratable Sharing. . . . . . . . . . . . . . . .136
     10.6      Amendments and Waivers . . . . . . . . . . . .137
     10.7      Independence of Covenants. . . . . . . . . . .138
     10.8      Notices. . . . . . . . . . . . . . . . . . . .138
     10.9      Survival of Representations, Warranties and
          Agreements. . . . . . . . . . . . . . . . . . . . .138
     10.10     Failure or Indulgence Not Waiver; Remedies
          Cumulative. . . . . . . . . . . . . . . . . . . . .139
     10.11     Marshalling; Payments Set Aside. . . . . . . .139
     10.12     Severability . . . . . . . . . . . . . . . . .139
     10.13     Obligations Several; Independent Nature of
          Lenders' Rights . . . . . . . . . . . . . . . . . .139
     10.14     Headings . . . . . . . . . . . . . . . . . . .140
     10.15     Applicable Law . . . . . . . . . . . . . . . .140
     10.16     Successors and Assigns . . . . . . . . . . . .140
     10.17     Consent to Jurisdiction and Service of
          Process . . . . . . . . . . . . . . . . . . . . . .140
     10.18     Waiver of Jury Trial . . . . . . . . . . . . .141
     10.19     Confidentiality. . . . . . . . . . . . . . . .142
     10.20     Counterparts; Effectiveness. . . . . . . . . .142


          Signature pages . . . . . . . . . . . . . . . . . .S-1

<PAGE>
                            EXHIBITS


I         FORM OF NOTICE OF BORROWING
II        FORM OF NOTICE OF CONVERSION/CONTINUATION
III       FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV        FORM OF TRANCHE A TERM NOTE
V         FORM OF TRANCHE B TERM NOTE
VI        FORM OF REVOLVING NOTE
VII       FORM OF SWING LINE NOTE
VIII      FORM OF COMPLIANCE CERTIFICATE
IX        FORM OF OPINION OF BRYAN CAVE LLP
X         FORM OF OPINION OF O'MELVENY & MYERS LLP
XI        FORM OF ASSIGNMENT AGREEMENT
XII       FORM OF AFFILIATED STOCKHOLDER LIMITED GUARANTY AND
          PLEDGE AGREEMENT
XIII      FORM OF CERTIFICATE RE NON-BANK STATUS
XIV       FORM OF COMPANY COPYRIGHT SECURITY AGREEMENT
XV        FORM OF COMPANY PLEDGE AGREEMENT
XVI       FORM OF COMPANY SECURITY AGREEMENT
XVII      FORM OF COMPANY TRADEMARK SECURITY AGREEMENT
XVIII     FORM OF SUBSIDIARY GUARANTY
XIX       FORM OF SUBSIDIARY PLEDGE AGREEMENT
XX        FORM OF SUBSIDIARY SECURITY AGREEMENT
XXI       FORM OF HOLDINGS PLEDGE AGREEMENT
XXII      FORM OF HOLDINGS GUARANTY
XXIII     FORM OF MORTGAGE
XXIV      FORM OF SOLVENCY CERTIFICATE
XXV       FORM OF LOCAL COUNSEL OPINION

<PAGE>
                            SCHEDULES


2.1    LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1D   CLOSING DATE MORTGAGED PROPERTIES
4.1H   CLOSING DATE ENVIRONMENTAL REPORTS
5.1    SUBSIDIARIES OF COMPANY
5.5    REAL PROPERTY
5.6    LITIGATION
5.8    MATERIAL CONTRACTS
5.11   CERTAIN EMPLOYEE BENEFIT PLANS
5.13   ENVIRONMENTAL MATTERS
7.1    CERTAIN EXISTING INDEBTEDNESS
7.2    CERTAIN EXISTING LIENS
7.3    CERTAIN EXISTING INVESTMENTS
7.4    CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.12   AFFILIATE TRANSACTIONS