Exhibit 10.39


                              [CONFORMED COPY WITH
                       EXHIBITS F-1, F-2, AND H CONFORMED
                                   AS EXECUTED]

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                              AMENDED AND RESTATED

                                CREDIT AGREEMENT

                                      among

                              VANTAS INCORPORATED,
                                  VARIOUS BANKS

                                       and

                                    PARIBAS,

                                    as Agent

                                  $157,875,000

                    ---------------------------------------
                          Dated as of January 16, 1997

                                       and
                   Amended and Restated as of November 6, 1998
                                   and further
                    Amended and Restated as of August 3, 1999
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<PAGE>
                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----
Section  1.  Amount and Terms of Credit......................................1
       1.01  The Commitments.................................................1
       1.02  Minimum Amount of Each Borrowing................................2
       1.03  Notice of Borrowing.............................................2
       1.04  Disbursement of Funds...........................................3
       1.05  Notes...........................................................3
       1.06  Conversions.....................................................5
       1.07  Pro Rata Borrowings.............................................5
       1.08  Interest........................................................6
       1.09  Interest Periods................................................7
       1.10  Increased Costs, Illegality, etc................................8
       1.11  Compensation...................................................10
       1.12  Replacement of Banks...........................................10
Section 1A.  Letters of Credit..............................................12
      1A.01  Letters of Credit..............................................12
      1A.02  Minimum Stated Amount..........................................13
      1A.03  Letter of Credit Requests......................................13
      1A.04  Letter of Credit Participations................................13
      1A.05  Agreement to Repay Letter of Credit Drawings...................15
      1A.06  Increased Costs................................................16
Section  2.  Commitment Commission; Fees; Reductions of Commitment..........16
       2.01  Fees...........................................................16
       2.02  Voluntary Termination of Unutilized Commitments................17
       2.03  Mandatory Reduction of Commitments.............................18
Section  3.  Prepayments; Payments; Taxes...................................19
       3.01  Voluntary Prepayments..........................................19
       3.02  Mandatory Repayments and Commitment Reductions.................20
       3.03  Method and Place of Payment....................................26
       3.04  Net Payments...................................................27
Section  4.  Conditions Precedent to Loans on the Restatement
             Effective Date.................................................28
       4.01  Execution of Agreement; Notes..................................28
       4.02  Officer's Certificate..........................................28
       4.03  Opinions of Counsel............................................29
       4.04  Corporate Documents; Proceedings...............................29
       4.05  Plans; Shareholders' Agreements; Management Agreements;
              Employment Agreements; Collective Bargaining Agreements;
              Debt Agreements; Affiliate Contracts; Tax Sharing Agreements
              and Material Contracts........................................29
       4.06  Assignment of Leases and Rents.................................31
       4.07  Pledge Agreement...............................................31
       4.08  Security Agreement.............................................32
       4.09  Subsidiaries Guaranty..........................................32
       4.10  Material Adverse Change, etc...................................32
       4.11  Litigation.....................................................33
       4.12  Fees, etc......................................................33
       4.13  Solvency Certificate; Insurance Analyses.......................33
       4.14  Approvals......................................................33
       4.15  Financial Statements; Projections; Management Letter Reports...34
       4.16  Refinancing....................................................34
       4.17  Consent Letter.................................................35
       4.18  Equity Financing...............................................35
Section  5.  Conditions Precedent to All Credit Events......................35
       5.01  No Default; Representations and Warranties.....................35
       5.02  Notice of Borrowing; Letter of Credit Request..................35
       5.03  Permitted Acquisitions.........................................35

                                       2
<PAGE>

Section  6.  Representations, Warranties and Agreements.....................36
       6.01  Corporate and Limited Liability Company Status.................36
       6.02  Corporate Power and Authority..................................36
       6.03  No Violation...................................................36
       6.04  Governmental Approvals.........................................37
       6.05  Financial Statements; Financial Condition; Undisclosed
              Liabilities; Projections; etc.................................37
       6.06  Litigation.....................................................38
       6.07  True and Complete Disclosure...................................38
       6.08  Use of Proceeds; Margin Regulations............................39
       6.09  Tax Returns and Payments.......................................39
       6.10  Compliance with ERISA..........................................40
       6.11  The Security Documents.........................................41
       6.12  Representations and Warranties in Credit Documents.............41
       6.13  Properties.....................................................41
       6.14  Capitalization.................................................42
       6.15  Subsidiaries...................................................42
       6.16  Compliance with Statutes, etc..................................42
       6.17  Investment Company Act.........................................43
       6.18  Public Utility Holding Company Act.............................43
       6.19  Environmental Matters..........................................43
       6.20  Labor Relations................................................43
       6.21  Patents, Licenses, Franchises and Formulas.....................44
       6.22  Indebtedness...................................................44

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<PAGE>

       6.23  Restrictions on or Relating to Subsidiaries....................44
       6.24  Foreign Pension Plans..........................................45
       6.25  The Transaction................................................45
       6.26  Concentration Account..........................................45
       6.27  Material Contracts.............................................45
       6.28  Business Centers; Owners.......................................45
       6.29  Year 2000 Reprogramming........................................45
       6.30  Immaterial Subsidiary..........................................46
Section  7.  Affirmative Covenants..........................................46
       7.01  Information Covenants..........................................46
       7.02  Books, Records and Inspections.................................49
       7.03  Maintenance of Property, Insurance.............................49
       7.04  Corporate Franchises...........................................50
       7.05  Compliance with Statutes, etc..................................50
       7.06  Compliance with Environmental Laws.............................50
       7.07  ERISA..........................................................51
       7.08  End of Fiscal Years; Fiscal Quarters...........................52
       7.09  Performance of Obligations.....................................52
       7.10  Payment of Taxes...............................................53
       7.11  Interest Rate Protection.......................................53
       7.12  Use of Proceeds................................................53
       7.13  Year 2000 Reporting............................................53
       7.14  Intellectual Property Rights...................................54
       7.15  Permitted Acquisitions.........................................54
       7.16  Registry.......................................................59
       7.17  Further Actions................................................59
       7.18  Concentration Account..........................................60
Section  8.  Negative Covenants.............................................60
       8.01  Liens..........................................................60
       8.02  Consolidation, Merger, Purchase or Sale of Assets, etc.........62
       8.03  Dividends......................................................63
       8.04  Concentration Account..........................................63
       8.05  Indebtedness...................................................63
       8.06  Advances, Investments and Loans................................64
       8.07  Transactions with Affiliates...................................65
       8.08  Capital Expenditures...........................................65
       8.09  Fixed Charge Coverage Ratio....................................66
       8.10  Interest Coverage Ratio........................................66
       8.11  Consolidated Indebtedness to Consolidated EBITDA...............67
       8.12  Minimum EBITDA.................................................68
       8.13  Limitation on Voluntary Payments and Modification of Existing
             Indebtedness; Limitation on Modifications of Certificate of
             Incorporation, By-Laws and Certain Other Agreements; etc.......69
       8.14  Limitation on Certain Restrictions on Subsidiaries.............70

                                        4

<PAGE>

       8.15  Limitation on Issuance of Capital Stock........................70
       8.16  Business.......................................................70
       8.17  Limitation on Creation of Subsidiaries.........................70
       8.18  Lease Agreements...............................................71
Section  9.  Events of Default..............................................71
       9.01  Payments.......................................................71
       9.02  Representations, etc...........................................71
       9.03  Covenants......................................................71
       9.04  Default Under Other Agreements.................................71
       9.05  Bankruptcy, etc................................................72
       9.06  ERISA..........................................................72
       9.07  Security Documents.............................................73
       9.08  Guaranties.....................................................73
       9.09  Judgments......................................................73
       9.10  Change in Control..............................................73
Section 10.  Definitions and Accounting Terms...............................74
      10.01  Defined Terms..................................................74
Section 11.  The Agent......................................................98
      11.01  Appointment....................................................98
      11.02  Nature of Duties...............................................98
      11.03  Lack of Reliance on the Agent..................................99
      11.04  Certain Rights of the Agent....................................99
      11.05  Reliance.......................................................99
      11.06  Indemnification................................................99
      11.07  The Agent in Its Individual Capacity..........................100
      11.08  Holders.......................................................100
      11.09  Resignation by the Agent......................................100
Section 12.  Miscellaneous.................................................101
      12.01  Payment of Expenses, etc. ....................................101
      12.02  Right of Setoff...............................................102
      12.03  Notices.......................................................102
      12.04  Benefit of Agreement..........................................102
      12.05  No Waiver; Remedies Cumulative................................104
      12.06  Payments Pro Rata.............................................104
      12.07  Calculations; Computations....................................105
      12.08  GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
               JURY TRIAL..................................................105
      12.09  Counterparts..................................................106
      12.10  Effectiveness.................................................106
      12.11  Headings Descriptive..........................................106
      12.12  Amendment or Waiver...........................................107
      12.13  Survival......................................................108
      12.14  Domicile of Loans.............................................108
      12.15  Post-Closing Obligations......................................108
      12.16  Default Exception.............................................108
      12.17  Permitted Stock Issuance Adjustment...........................109
      SCHEDULE I      -     COMMITMENTS
      SCHEDULE II     -     INSURANCE
      SCHEDULE III    -     PROJECTIONS
      SCHEDULE IV     -     REAL PROPERTY
      SCHEDULE V      -     CONCENTRATION ACCOUNT
      SCHEDULE VI     -     TAX MATTERS
      SCHEDULE VII    -     ERISA
      SCHEDULE VIII   -     CAPITALIZATION
      SCHEDULE IX     -     SUBSIDIARIES
      SCHEDULE X      -     EXISTING INDEBTEDNESS
      SCHEDULE XI     -     MATERIAL CONTRACTS
      SCHEDULE XII    -     EXISTING LIENS
      SCHEDULE XIII   -     BUSINESS CENTERS; OWNERS
      SCHEDULE XIV    -     DUE DILIGENCE REQUIREMENTS
      SCHEDULE XV     -     CHANGED NAMES

                                        5

<PAGE>

      SCHEDULE XVI    -     GENERAL CORPORATE POWERS
      EXHIBIT A-1     -     NOTICE OF BORROWING
      EXHIBIT A-2     -     NOTICE OF CONVERSION
      EXHIBIT B-1     -     A TERM NOTE
      EXHIBIT B-2     -     B TERM NOTE
      EXHIBIT B-3     -     ACQUISITION NOTE
      EXHIBIT B-4     -     REVOLVING NOTE
      EXHIBIT B-5     -     LETTER OF CREDIT REQUEST
      EXHIBIT C       -     SECTION 3.04(B)(ii) CERTIFICATE
      EXHIBIT D       -     FORM OF OPINION OF MORRISON COHEN
                             SINGER & WEINSTEIN, LLP

      EXHIBIT E       -     OFFICERS' CERTIFICATE OF CREDIT PARTIES
      EXHIBIT F-1     -     CORPORATE PLEDGE AGREEMENT
      EXHIBIT F-2     -     LLC PLEDGE AGREEMENT
      EXHIBIT G       -     SECURITY AGREEMENT
      EXHIBIT H       -     SUBSIDIARIES GUARANTY
      EXHIBIT I       -     SOLVENCY CERTIFICATE
      EXHIBIT J       -     CONSENT LETTER
      EXHIBIT K       -     CASH COLLATERAL AGREEMENT
      EXHIBIT L       -     BANK ASSIGNMENT AND ASSUMPTION
                            AGREEMENT

                                        6

<PAGE>

     AMENDED  AND  RESTATED  CREDIT  AGREEMENT,  dated as of January  16,  1997,
amended and restated as of November 6, 1998, and further amended and restated as
of August  3,  1999,  among  VANTAS  INCORPORATED  (formerly  known as  Alliance
National  Incorporated),  a corporation organized and existing under the laws of
the State of Nevada (the "Borrower"),  the Banks party hereto from time to time,
and PARIBAS (formerly known as Banque Paribas),  as agent (the "Agent").  Unless
otherwise  defined  herein,  all  capitalized  terms used  herein and defined in
Section 10 are used herein as therein defined.

                              W I T N E S S E T H :

     WHEREAS,  the  Borrower,  the Banks and the Agent are  parties  to a Credit
Agreement, dated as of January 16, 1997, and amended and restated as of November
6, 1998 (as the same has been  amended,  modified  or  supplemented  to, but not
including, the Restatement Effective Date, the "Existing Credit Agreement");

     WHEREAS,  the Borrower has requested that the Existing Credit  Agreement be
further  amended and  restated  and the Banks and the Agent are willing to amend
and restate the same upon the terms and conditions set forth below;

     NOW, THEREFORE, the parties hereto agree that the Existing Credit Agreement
shall be and hereby is amended and restated in its entirety as follows:

     Section 1. Amount and Terms of Credit.

     1.01 The Commitments.  (a) Subject to and upon the terms and conditions set
forth herein, each Bank with an A Term Loan Commitment severally agrees to make,
on the  Restatement  Effective  Date,  a term loan (each,  an "A Term Loan" and,
collectively,  the "A Term Loans") to the Borrower, which A Term Loans (i) shall
be made and  initially  maintained  as a single  Borrowing  of Base  Rate  Loans
(subject to the option to convert such Base Rate Loans pursuant to Section 1.06)
and (ii) shall not exceed for any Bank, in initial  aggregate  principal amount,
that amount  which equals the A Term Loan  Commitment  of such Bank on such date
(before giving effect to any reductions thereto on such date pursuant to Section
2.03(b)(i) but after giving effect to any reductions thereto on or prior to such
date  pursuant  to Section  2.03(b)(ii)).  Once  repaid,  A Term Loans  incurred
hereunder may not be reborrowed.

     (b) Subject to and upon the terms and  conditions  set forth  herein,  each
Bank with a B Term Loan Commitment  severally agrees to make, on the Restatement
Effective  Date, a term loan (each,  a "B Term Loan" and,  collectively,  the "B
Term Loans") to the Borrower, which B Term Loans (i) shall be made and initially
maintained  as a single  Borrowing of Base Rate Loans  (subject to the option to
convert  such B Term Loans  pursuant to Section  1.06) and (ii) shall not exceed
for any Bank, in initial aggregate  principal  amount,  that amount which equals
the B Term Loan  Commitment  of such Bank on such date (before  giving effect to
any  reductions  thereto on such date pursuant to Section  2.03(c)(i)  but after
giving  effect to any  reductions  thereto on or prior to such date  pursuant to
Section  2.03(c)(ii)).  Once repaid, B Term Loans incurred  hereunder may not be
reborrowed.

<PAGE>

     (c) Subject to and upon the terms and  conditions  set forth  herein,  each
Bank with an Acquisition  Loan Commitment  severally agrees to make, at any time
and from time to time  after  the  Restatement  Effective  Date and prior to the
Acquisition Loan Termination  Date, a loan or loans (each an "Acquisition  Loan"
and, collectively,  the "Acquisition Loans") to the Borrower,  which Acquisition
Loans (i) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar
Loans;  provided that (x) except as otherwise  specifically  provided in Section
1.10(b) all Acquisition  Loans  comprising the same Borrowing shall at all times
be of the same Type and (y) no  Eurodollar  Loans may be  incurred  prior to the
Syndication  Termination Date and (ii) shall not exceed for any Bank at any time
outstanding  that aggregate  principal  amount which equals the Acquisition Loan
Commitment  of such  Bank at such time  after  giving  effect to any  reductions
thereto on or prior to such date pursuant to Section 2.03(d)(ii)).  Once repaid,
Acquisition  Loans  incurred may be  reborrowed  prior to the  Acquisition  Loan
Termination Date in accordance with the provisions hereof.

     (d) Subject to and upon the terms and  conditions  set forth  herein,  each
Bank with a Revolving Loan Commitment severally agrees at any time and from time
to time after the  Restatement  Effective  Date and prior to the Revolving  Loan
Maturity  Date,  to  make  a  loan  or  loans  (each  a  "Revolving  Loan"  and,
collectively,  the "Revolving Loans") to the Borrower, which Revolving Loans (i)
shall,  at the option of the Borrower,  be Base Rate Loans or Eurodollar  Loans;
provided that (x) except as otherwise  specifically  provided in Section 1.10(b)
all Revolving  Loans  comprising the same Borrowing shall at all times be of the
same Type and (y) no Eurodollar  Loans may be incurred prior to the  Syndication
Termination  Date  except that  Eurodollar  Loans may be incurred on the Initial
Eurodollar Loan Borrowing Date so long as any Eurodollar  Loans incurred on such
date  have an  Interest  Period  equal  to one  month,  (ii) may be  repaid  and
reborrowed in accordance with the provisions  hereof, and (iii) shall not exceed
for any Bank at any time outstanding that aggregate principal amount which, when
added to the product of (x) such Bank's  Percentage and (y) the aggregate amount
of all Letter of Credit  Outstandings  (exclusive of Unpaid  Drawings  which are
repaid with the  proceeds of, and  simultaneously  with the  incurrence  of, the
respective  incurrence of Revolving Loans), equals the Revolving Loan Commitment
of such Bank at such time.

     1.02 Minimum Amount of Each Borrowing.  The aggregate  principal  amount of
each Borrowing  hereunder  shall not be less than the Minimum  Borrowing  Amount
and,  if greater,  shall be in integral  multiples  of  $100,000.  More than one
Borrowing may occur on the same date,  but at no time shall there be outstanding
more than twenty Borrowings of Eurodollar Loans.

     1.03 Notice of  Borrowing.  (a)  Whenever  the  Borrower  desires to make a
Borrowing  hereunder,  it shall  give the Agent at its Notice  Office,  prior to
10:00 a.m. (New York time) at least one Business  Day's prior written notice (or
telephonic notice promptly  confirmed in writing) of each Borrowing of Base Rate
Loans and at least three  Business  Days' prior  written  notice (or  telephonic
notice  promptly  confirmed in writing) of each  Borrowing of Eurodollar  Loans.
Each such notice (each a "Notice of Borrowing"),  except as otherwise  expressly
provided  in  Section  1.10,  shall  be  irrevocable  and  shall be given by the
Borrower in the form of Exhibit A-1, appropriately  completed to specify (i) the
aggregate  principal  amount of the Loans to be made pursuant to such Borrowing,
(ii) the date of such Borrowing  (which shall be a Business Day),  (iii) whether
the Loans being made pursuant to such Borrowing shall constitute A Term

                                        2

<PAGE>

Loans, B Term Loans,  Revolving Loans or Acquisition  Loans and (iv) whether the
Loans being made pursuant to such  Borrowing  are to be initially  maintained as
Base Rate Loans or  Eurodollar  Loans and,  if  Eurodollar  Loans,  the  initial
Interest Period to be applicable  thereto.  Any notice received after 10:00 a.m.
(New York time) shall be deemed to be received on the next  succeeding  Business
Day. The Agent shall  promptly give each Bank which is required to make Loans of
the Tranche  specified  in the  respective  Notice of  Borrowing  notice of such
proposed Borrowing,  of such Bank's proportionate share thereof and of the other
matters specified in the Notice of Borrowing.

     (b) Without in any way limiting the  obligation  of the Borrower to confirm
in writing any telephonic  notice permitted to be given hereunder,  the Agent or
the  respective  Issuing Bank (in the case of Letters of Credit)  may,  prior to
receipt  of  written  confirmation,  act  without  liability  upon the  basis of
telephonic  notice believed by the Agent or the respective  Issuing Bank (in the
case of Letters of Credit) in good faith to be from the  President,  Senior Vice
President of Finance,  the Chief Executive  Officer,  Chief Financial Officer or
Controller  of the  Borrower.  In each such case,  the  Agent's or such  Issuing
Bank's record of the terms of such telephonic  notice shall be conclusive absent
manifest error.

     1.04 Disbursement of Funds. No later than 12:00 Noon (New York time) on the
date  specified in each Notice of Borrowing,  each Bank with a Commitment of the
respective  Tranche  will make  available  its pro rata portion  (determined  in
accordance  with Section  1.07) of each such  Borrowing  requested to be made on
such  date.  All  such  amounts  shall  be  made  available  in  Dollars  and in
immediately  available  funds at the Payment Office of the Agent,  and the Agent
will make  available to the Borrower at the Payment  Office the aggregate of the
amounts  so made  available  by the  Banks.  Unless  the Agent  shall  have been
notified  in writing by any Bank prior to the date of  Borrowing  that such Bank
does not  intend to make  available  to the Agent  such  Bank's  portion  of any
Borrowing to be made on such date,  the Agent may assume that such Bank has made
such amount  available to the Agent on such date of Borrowing and the Agent may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If such corresponding  amount is not in fact made available to the Agent
by such Bank, the Agent shall be entitled to recover such  corresponding  amount
on demand from such Bank.  If such Bank does not pay such  corresponding  amount
forthwith upon the Agent's demand therefor,  the Agent shall promptly notify the
Borrower,  and the Borrower shall immediately pay such  corresponding  amount to
the Agent.  The Agent shall also be entitled to recover on demand from such Bank
or the Borrower,  as the case may be, interest on such  corresponding  amount in
respect of each day from the date such  corresponding  amount was made available
by the  Agent to the  Borrower,  until  the date  such  corresponding  amount is
recovered by the Agent,  at a rate per annum equal to (i) if recovered from such
Bank,  the cost to the Agent of acquiring  overnight  federal  funds and (ii) if
recovered from the Borrower,  the rate of interest  applicable to the respective
Borrowing,  as determined pursuant to Section 1.08. Nothing in this Section 1.04
shall be deemed to relieve any Bank from its obligation to make Loans  hereunder
or to  prejudice  any rights  which the  Borrower may have against any Bank as a
result of any failure by such Bank to make Loans hereunder.

     1.05 Notes.  (a) The  Borrower's  obligation  to pay the  principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if A Term Loans,
by a promissory  note duly executed and delivered by the Borrower  substantially
in the form of Exhibit B-1 with blanks

                                        3

<PAGE>

appropriately  completed in  conformity  herewith  (each,  an "A Term Note" and,
collectively,  the "A Term Notes"),  (ii) if B Term Loans,  by a promissory note
duly executed and delivered by the Borrower substantially in the form of Exhibit
B-2 with blanks appropriately  completed in conformity herewith (each, a "B Term
Note" and,  collectively,  the "B Term Notes"), (iii) if Acquisition Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
from of Exhibit B-3, with blanks appropriately  completed in conformity herewith
(each an "Acquisition Note" and collectively, the "Acquisition Notes"), and (iv)
if Revolving  Loans,  by a promissory  note duly  executed and  delivered by the
Borrower  substantially  in the form of Exhibit B-4,  with blanks  appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes").

     (b) The A Term  Note  issued  to each Bank  shall  (i) be  executed  by the
Borrower,  (ii) be payable to the order of such Bank or its  registered  assigns
and be dated the  Restatement  Effective  Date,  (iii) be in a stated  principal
amount  equal to the A Term  Loan  Commitment  of such  Bank on the  Restatement
Effective  Date and be  payable  in the  principal  amount  of the A Term  Loans
evidenced  thereby,  (iv)  mature on the A Term  Loan  Maturity  Date,  (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar  Loans,  as the case may be,  evidenced  thereby,
(vi) be subject  to  voluntary  repayment  as  provided  in  Section  3.01,  and
mandatory  repayment  as provided  in Section  3.02 and (vii) be entitled to the
benefits of this  Agreement  and the  Guaranties  and be secured by the Security
Documents.

     (c) The B Term  Note  issued  to each Bank  shall  (i) be  executed  by the
Borrower,  (ii) be payable to the order of such Bank or its  registered  assigns
and be dated the  Restatement  Effective  Date,  (iii) be in a stated  principal
amount equal to the B Term Loan made by such Bank on the  Restatement  Effective
Date  and be  payable  in the  principal  amount  of the B Term  Loan  evidenced
thereby,  (iv) mature on the B Term Loan  Maturity  Date,  (v) bear  interest as
provided in the  appropriate  clause of Section 1.08 in respect of the Base Rate
Loans and  Eurodollar  Loans,  as the case may be,  evidenced  thereby,  (vi) be
subject to  voluntary  repayment  as provided  in Section  3.01,  and  mandatory
repayment  as provided in Section  3.02 and (vii) be entitled to the benefits of
this Agreement and the Guaranties and be secured by the Security Documents.

     (d) The  Acquisition  Note  issued to each Bank  with an  Acquisition  Loan
Commitment  shall (i) be executed by the Borrower,  (ii) be payable to the order
of such Bank or its registered  assigns and be dated the  Restatement  Effective
Date,  (iii) be in a stated  principal  amount  equal  to the  Acquisition  Loan
Commitment  of  such  Bank  and  be  payable  in  the  principal  amount  of the
Acquisition  Loans  evidenced  thereby,  (iv)  mature  on the  Acquisition  Loan
Maturity  Date,  (v) bear  interest  as provided  in the  appropriate  clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary repayment as provided in
Section 3.01,  and mandatory  repayment as provided in Section 3.02 and (vii) be
entitled to the benefits of this  Agreement and the Guaranties and be secured by
the Security Documents.

     (e) The Revolving Note issued to each Bank with a Revolving Loan Commitment
shall (i) be executed by the Borrower, (ii) be payable to the order of such Bank
or its registered assigns and be dated the Restatement  Effective Date, (iii) be
in a stated principal

                                        4

<PAGE>

amount equal to the Revolving Loan Commitment of such Bank and be payable in the
principal  amount of the Revolving Loans evidenced  thereby,  (iv) mature on the
Revolving Loan Maturity  Date, (v) bear interest as provided in the  appropriate
clause of Section 1.08 in respect of the Base Rate Loans and  Eurodollar  Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary repayment as
provided in Section 3.01,  and  mandatory  repayment as provided in Section 3.02
and (vii) be entitled to the benefits of this  Agreement and the  Guaranties and
be secured by the Security Documents.

     (f) Each Bank will note on its  internal  records  the  amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Notes endorse on the reverse side thereof the  outstanding  principal
amount of Loans  evidenced  thereby.  Failure to make any such  notation  or the
making of an incorrect  notation shall not affect the Borrower's  obligations in
respect of such Loans.

     1.06  Conversions.  The Borrower  shall have the option to convert,  on any
Business Day, all or a portion at least equal to the Minimum Borrowing Amount of
the  outstanding  principal  amount of the Loans  made  pursuant  to one or more
Borrowings (so long as of the same Tranche) of one Type of Loan into a Borrowing
or Borrowings (of the same Tranche) of the other Type of Loan; provided that:

          (i) except as otherwise provided in Section 1.10(b),  Eurodollar Loans
     may be  converted  into Base Rate Loans only on the last day of an Interest
     Period  applicable  to  the  Loans  being  converted  and no  such  partial
     conversion  of  Eurodollar  Loans shall  reduce the  outstanding  principal
     amount of such Eurodollar Loans made pursuant to a single Borrowing to less
     than the Minimum Borrowing Amount applicable thereto;

          (ii) Base Rate Loans may only be converted into Eurodollar Loans if no
     Default or Event of Default is in existence on the date of the conversion;

          (iii) no  conversion  pursuant to this  Section 1.06 shall result in a
     greater number of Borrowings than is permitted under Section 1.02; and

          (iv)  prior  to the  Syndication  Termination  Date,  no  Loan  may be
     converted into Eurodollar Loans except that on the Initial  Eurodollar Loan
     Borrowing Date, Revolving Loans may be converted into Eurodollar Loans with
     an Interest Period of one month.

Each such  conversion  shall be effected by the  Borrower by giving the Agent at
its Notice  Office  prior to 12:00 Noon (New York time) at least three  Business
Days' prior written notice (or telephonic notice promptly  confirmed in writing)
(each a "Notice of  Conversion")  which  notice  shall be in the form of Exhibit
A-2,  appropriately  completed  to  specify  the Loans to be so  converted,  the
Borrowing(s) pursuant to which such Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially  applicable  thereto.  The
Agent  shall  give  each Bank  prompt  notice  of any such  proposed  conversion
affecting any of its Loans.

     1.07 Pro Rata  Borrowings.  All  Borrowings  of Loans under this  Agreement
shall be  incurred  from the Banks pro rata on the basis of their  respective  A
Term Loan Commitments, B Term Loan Commitments,  Acquisition Loan Commitments or
Revolving Loan  Commitments,  as the case may be. It is understood  that no Bank
shall be responsible for any default by any

                                       -5-

<PAGE>

other Bank of its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans  provided to be made by it hereunder  regardless  of
the failure of any other Bank to make its Loans hereunder.

     1.08  Interest.  (a) The Borrower  agrees to pay interest in respect of the
unpaid  principal  amount of each Base Rate Loan made to it from the date of the
Borrowing  thereof  until the earlier of (i) the  maturity  thereof  (whether by
acceleration  or  otherwise)  of such Base Rate Loan and (ii) the  conversion of
such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per
annum which shall at all times be equal to the sum of the Applicable Margin plus
the Base Rate in effect from time to time.

     (b) The Borrower agrees to pay interest in respect of the unpaid  principal
amount of each Eurodollar Loan made to it from the date of the Borrowing thereof
until the  earlier of (i) the  maturity  thereof  (whether  by  acceleration  or
otherwise) of such  Eurodollar  Loan and (ii) the conversion of such  Eurodollar
Loan  to a Base  Rate  Loan  pursuant  to  Section  1.06,  1.09 or  1.10(b),  as
applicable,  at a rate per  annum  which  shall,  during  each  Interest  Period
applicable thereto, be equal to the sum of the Applicable Margin plus the Quoted
Rate for such Interest Period.

     (c) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan and any other overdue amount payable hereunder shall, in
each case,  bear interest at a rate per annum equal to the greater of (x) 2% per
annum in  excess of the rate  otherwise  applicable  to Base  Rate  Loans of the
respective  Tranche  of Loans  from time to time and (y) the rate which is 2% in
excess of the rate  borne by such  Loans.  Interest  which  accrues  under  this
Section 1.08(c) shall be payable on demand.

     (d)  Accrued  (and  theretofore  unpaid)  interest  shall be payable (i) in
respect of each Base Rate Loan,  quarterly in arrears on each Quarterly  Payment
Day, (ii) in respect of each  Eurodollar  Loan on (x) the date of any prepayment
or  repayment  thereof (on the amount  prepaid or  repaid),  (y) the date of any
conversion into a Base Rate Loan pursuant to Section 1.06,  1.09 or 1.10(b),  as
applicable  (on the amount  converted)  and (z) on the last day of each Interest
Period  applicable  thereto and, in the case of an Interest  Period in excess of
three months,  on each date occurring at three month  intervals  after the first
day of such  Interest  Period and (iii) in respect  of each  Loan,  at  maturity
(whether by  acceleration  or otherwise)  and, after such  maturity,  on demand.
Notwithstanding  anything to the  contrary in this  Agreement or in the Existing
Credit Agreement,  all accrued (but theretofore unpaid) interest with respect to
Loans  under  and as  defined  in  the  Existing  Credit  Agreement  which  were
outstanding  prior to the  Restatement  Effective  Date  shall be payable on the
Restatement Effective Date.

     (e) Upon each Interest  Determination  Date, the Agent shall  determine the
Quoted Rate for the Interest  Period  applicable to  Eurodollar  Loans and shall
promptly  notify the Borrower  and the Banks  thereof.  Each such  determination
shall, absent manifest error, be final and conclusive and binding on all parties
hereto.

     (f) All computations of interest hereunder shall be made in accordance with
Section 12.07(b).

                                        6

<PAGE>

     1.09  Interest  Periods.  At the time it gives any Notice of  Borrowing  or
Notice of  Conversion  in  respect  of the  making  of, or  conversion  into,  a
Eurodollar Loan (in the case of the initial Interest Period applicable  thereto)
or prior to 10:00 a.m.  (New York time) on the third  Business  Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the case
of any subsequent Interest Period),  the Borrower shall have the right to elect,
by giving the Agent  notice  thereof,  the  interest  period  (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Borrower, be a one, three or six-month period; provided that:

          (i) all Eurodollar  Loans  comprising a single  Borrowing shall at all
     times have the same Interest Period;

          (ii)  the  initial  Interest  Period  for any  Eurodollar  Loan  shall
     commence on the date of Borrowing of such Loan  (including  the date of any
     conversion  thereto from a Borrowing of Base Rate Loans) and each  Interest
     Period  occurring  thereafter in respect of such Loan shall commence on the
     day on which the next preceding Interest Period applicable thereto expires;

          (iii) if any Interest Period relating to a Eurodollar Loan begins on a
     day for which there is no  numerically  corresponding  day in the  calendar
     month at the end of such Interest Period, such Interest Period shall end on
     the last Business Day of such calendar month;

          (iv) if any Interest Period would  otherwise  expire on a day which is
     not a  Business  Day,  such  Interest  Period  shall  expire  on  the  next
     succeeding Business Day; provided, however, that if any Interest Period for
     a Eurodollar Loan would  otherwise  expire on a day which 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;

          (v) no  Interest  Period  for a  Borrowing  under a  Tranche  shall be
     selected which extends beyond the respective Maturity Date of such Tranche;

          (vi) no  Interest  Period may be selected at any time when any Default
     or Event of Default is then in existence;

          (vii) no Interest  Period in respect of any Borrowing of A Term Loans,
     B Term Loans or  Acquisition  Loans,  as the case may be, shall be selected
     which  extends  beyond any date upon which a mandatory  repayment of such A
     Term Loans, B Term Loans or  Acquisition  Loans will be required to be made
     under Section 3.02(A)(b),  (c) or (d), as the case may be, if, after giving
     effect to the selection of such Interest  Period,  the aggregate  principal
     amount of such A Term Loans, B Term Loans or Acquisition Loans, as the case
     may be, maintained as Eurodollar Loans which have Interest Periods expiring
     after such date will be in excess of the aggregate principal amount of such
     A Term Loans, B Term Loans or Acquisition  Loans,  as the case may be, then
     outstanding less the aggregate amount of such required prepayment; and

                                        7

<PAGE>

          (viii) no  Interest  Period may be selected  prior to the  Syndication
     Termination  Date,  except that with  respect to  Revolving  Loans,  on the
     Initial  Eurodollar Loan Borrowing Date,  Interest Periods of one month may
     be selected.

If upon the  expiration  of any  Interest  Period  applicable  to a Borrowing of
Eurodollar  Loans the Borrower  has failed to elect a new Interest  Period to be
applicable to such  Eurodollar  Loans as provided above or a Default or Event of
Default  then exists,  the  Borrower  shall be deemed to have elected to convert
such  Eurodollar  Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.

     1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank shall
have determined (which  determination shall, absent manifest error, be final and
conclusive  and binding upon all parties  hereto but, with respect to clause (i)
below, may be made only by the Agent):

          (i) on any Interest  Determination Date that, by reason of any changes
     arising  after  the  Original   Effective   Date  affecting  the  interbank
     Eurodollar  market,  adequate and fair means do not exist for  ascertaining
     the applicable interest rate on the basis provided for in the definition of
     Quoted Rate; or

          (ii) at any time,  that  such  Bank  shall  incur  increased  costs or
     reductions in the amounts received or receivable  hereunder with respect to
     any Eurodollar Loan because of (x) any change since the Original  Effective
     Date  in  any  applicable  law or  governmental  rule,  regulation,  order,
     guideline  or  request  (whether  or not having the force of law) or in the
     interpretation or administration  thereof and including the introduction of
     any new law or governmental rule, regulation,  order, guideline or request,
     such as,  for  example,  but not  limited  to: (A) a change in the basis of
     taxation  of payments  to any Bank of the  principal  of or interest on the
     Notes or any other  amounts  payable  hereunder  (except for changes in the
     rate of tax on, or determined by reference to, the net income or profits of
     such Bank  imposed by the  jurisdiction  in which its  principal  office or
     applicable  lending office is located) or (B) a change in official  reserve
     requirements  (but,  in  all  events,  excluding  reserves  required  under
     Regulation D to the extent  included in the computation of the Quoted Rate)
     and/or (y) other  circumstances since the Original Effective Date affecting
     such Bank or the interbank  Eurodollar  market or the position of such Bank
     in such market; or

          (iii) at any time,  that the making or  continuance  of any Eurodollar
     Loan has been made (x) unlawful by any law or governmental rule, regulation
     or order,  (y)  impossible by compliance by any Bank in good faith with any
     governmental  request  (whether  or not  having  the  force  of law) or (z)
     impracticable  as a result of a  contingency  occurring  after the Original
     Effective  Date  which  materially  and  adversely  affects  the  interbank
     Eurodollar market;

then, and in any such event,  such Bank (or the Agent, in the case of clause (i)
above)  shall  promptly  give notice (if by  telephone,  promptly  confirmed  in
writing) to the Borrower,  and,  except in the case of clause (i) above,  to the
Agent of such  determination  (which notice the Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i)

                                        8

<PAGE>

above,  Eurodollar  Loans  shall no longer be  available  until such time as the
Agent notifies the Borrower and the Banks that the circumstances  giving rise to
such notice by the Agent no longer exist,  and any Notice of Borrowing or Notice
of Conversion  given by the Borrower with respect to Eurodollar Loans which have
not yet been incurred (including by way of conversion) shall be deemed rescinded
by the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the form of
an  increased  rate of,  or a  different  method  of  calculating,  interest  or
otherwise  as such  Bank in its sole  discretion  shall  determine)  as shall be
required to  compensate  such Bank for such  increased  costs or  reductions  in
amounts received or receivable  hereunder (a written notice as to the additional
amounts  owed to such  Bank,  showing  in  reasonable  detail  the basis for the
calculation  thereof,  submitted  to the  Borrower  by such Bank  shall,  absent
manifest  error,  be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause  (iii) above,  the Borrower  shall take one of the
actions  specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.

     (b) At any time that any Eurodollar  Loan is affected by the  circumstances
described in Section  1.10(a)(ii) or (iii), the Borrower may (and in the case of
a  Eurodollar   Loan  affected  by  the   circumstances   described  in  Section
1.10(a)(iii)  shall)  either (i) if the affected  Eurodollar  Loan is then being
made  initially  or pursuant  to a  conversion,  by giving the Agent  telephonic
notice (confirmed in writing) on the same date that the Borrower was notified by
the affected Bank or the Agent pursuant to Section  1.10(a)(ii) or (iii), cancel
the respective Borrowing or conversion,  or (ii) if the affected Eurodollar Loan
is then  outstanding,  upon at least three  Business Days' written notice to the
Agent,  require the affected  Bank to convert such  Eurodollar  Loan into a Base
Rate Loan; provided that if more than one Bank is affected at any time, then all
affected Banks must be treated the same pursuant to this Section 1.10(b).

     (c) If at any time  after the  Original  Effective  Date  hereof,  any Bank
determines  that  the  introduction  of or  any  change  in  applicable  law  or
governmental  rule,  regulation,  order,  guideline  or request  (whether or not
having  the  force  of  law)  concerning  capital  adequacy,  or any  change  in
interpretation or administration thereof by any governmental authority,  central
bank or  comparable  agency,  will have the effect of  increasing  the amount of
capital  required or expected to be maintained  by such Bank or any  corporation
controlling  such  Bank  based  on the  existence  of  such  Bank's  Commitments
hereunder or its  obligations  hereunder,  then the  Borrower  shall pay to such
Bank,  upon its written demand  therefor,  such  additional  amounts as shall be
required to  compensate  such Bank for the  increased  cost to such Bank or such
other  corporation  or the  reduction in the rate of return to such Bank or such
other  corporation as a result of such increase of capital.  In determining such
additional amounts, each Bank will act reasonably and in good faith and will use
averaging  and  attribution  methods  which are  reasonable;  provided that such
Bank's  determination  of  compensation  owing under this Section 1.10(c) shall,
absent  manifest  error,  be final and conclusive and binding on all the parties
hereto.  Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for calculation
of such additional  amounts,  although the failure to give any such notice shall
not release or diminish  any of the  Borrower's  obligations  to pay  additional
amounts pursuant to this Section 1.10(c).

                                        9

<PAGE>

     1.11  Compensation.  The  Borrower  shall  compensate  each Bank,  upon its
written  request (which  request shall set forth in reasonable  detail the basis
for requesting  such  compensation),  for all losses,  expenses and  liabilities
(including,  without  limitation,  any loss,  expense or  liability  incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Bank to fund its Eurodollar Loans) which such Bank may sustain:  (i) if for
any reason  (other than a default by such Bank or the Agent) a Borrowing  of, or
conversion  from or into,  Eurodollar  Loans does not occur on a date  specified
therefor  in a Notice  of  Borrowing  or Notice of  Conversion  (whether  or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment  (including any repayment made pursuant to Section 3.02 or as a
result of an  acceleration  of the Loans pursuant to Section 9 and including any
repayment of Loans under and as defined in the Existing Credit  Agreement on the
Restatement  Effective  Date from the proceeds of Loans) or conversion of any of
its  Eurodollar  Loans occurs on a date which is not the last day of an Interest
Period with respect  thereto;  (iii) if any  prepayment of any of its Eurodollar
Loans is not made on any date  specified in a notice of prepayment  given by the
Borrower;  or (iv) as a consequence  of (x) any other default by the Borrower to
repay its Loans when required by the terms of this Agreement or any Note held by
such Bank or (y) any election made pursuant to Section  1.10(b).  A Bank's basis
for requesting  compensation pursuant to this Section, and a Bank's calculations
of the amount thereof, shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.

     1.12 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank or (y)
if any Bank  (other  than the Agent)  refuses  to  consent  to certain  proposed
changes,  waivers,  discharges or  terminations  with respect to this  Agreement
which have been approved by the Required Banks as provided in Section  12.12(b),
then the Borrower  shall have the right,  if no Default or Event of Default then
exists,  to replace such Bank (the "Replaced  Bank") with any other Bank or with
one or more Eligible Transferee or Transferees,  none of whom shall constitute a
Defaulting Bank at the time of such replacement (collectively,  the "Replacement
Bank") reasonably  acceptable to the Agent or, at the option of the Borrower, to
replace only (a) the Revolving Loan Commitment (and Revolving Loans  outstanding
pursuant  thereto)  of the  Replaced  Bank  with  an  identical  Revolving  Loan
Commitment (and Revolving Loans  outstanding  pursuant  thereto) provided by the
Replacement  Bank  or (b) in the  case  of a  replacement  as  provided  Section
12.12(b) when a consent of the respective Bank is required, with respect to less
than  all  Tranches  of  its  Loans  or  Commitments,   the  Commitments  and/or
outstanding Loans of such Bank in respect of each Tranche when a consent of such
Bank would otherwise be individually required, with identical Commitments and/or
Loans of the respective Tranche provided by the Replacement Bank; provided that:

          (i) at the time of any replacement  pursuant to this Section 1.12, the
     Replacement  Bank  shall  enter  into  one or  more  assignment  agreements
     pursuant to Section  12.04(b)  (and with all fees payable  pursuant to said
     Section 12.04(b) to be paid by the Replacement  Bank) pursuant to which the
     Replacement Bank shall acquire all of the Commitments and outstanding Loans
     of (or,  in the  case of the  replacement  of only (a) the  Revolving  Loan
     Commitment,  the Revolving Loan Commitment and outstanding  Revolving Loans
     and  participations in Letter of Credit  Outstandings,  (b) the Acquisition
     Loan  Commitment,  prior to the  Acquisition  Loan  Termination  Date,  the
     Acquisition   Loan  Commitment  and  outstanding   Acquisition   Loans  and
     thereafter,  the  outstanding  Acquisition  Loans,  (c)  the  A  Term  Loan
     Commitment, the outstanding A Term Loans

                                       10

<PAGE>

     and/or (d) the B Term Loan  Commitment,  the  outstanding B Term Loans) the
     Replaced  Bank  and in each  case  (except  for  replacement  of  only  the
     outstanding  A Term  Loans,  B  Term  Loans  or  Acquisition  Loans  of the
     respective Bank)  participations in Letters of Credit by, the Replaced Bank
     and in connection therewith,  shall pay to (x) the Replaced Bank in respect
     thereof an amount equal to the sum of (A) an amount equal to the  principal
     of, and all accrued interest on, all outstanding  Loans (or, in the case of
     the replacement of only (I) the Revolving Loan Commitment,  the outstanding
     Revolving Loans,  (II) prior to the Acquisition Loan Termination  Date, the
     Acquisition  Loan  Commitment,  the  Acquisition  Loans,  (III)  after  the
     Acquisition Loan Termination Date, the outstanding Acquisition Loans of the
     Replaced Banks,  (IV) the A Term Loans, the outstanding A Term Loans of the
     Replaced Bank),  (V) the B Term Loans,  the outstanding B Term Loans of the
     Replaced  Banks,  and (B) except in the case of the replacement of only the
     outstanding A Term Loans of the Replaced Bank,  only the outstanding B Term
     Loans of the Replaced  Banks or only the  Acquisition  Loan  Commitment  or
     outstanding  Acquisition  Loans,  an amount equal to such  Replaced  Bank's
     Percentage  of all  Unpaid  Drawings  that  have  been  funded  by (and not
     reimbursed to) such Replaced Bank,  together with all then unpaid  interest
     with  respect  thereto at such time and (C) an amount equal to all accrued,
     but  theretofore  unpaid,  Fees  owing to the  Replaced  Bank but only with
     respect to the relevant  Tranche,  in the case of the  replacement  of less
     than all the Tranches of Loans then held by the  respective  Replaced Bank)
     pursuant  to  Section  2.01  hereof  and  (y)  except  in the  case  of the
     replacement of only the outstanding A Term Loans, B Term Loans, Acquisition
     Loan Commitment or Acquisition Loans of the Replaced Bank, the Issuing Bank
     or Banks, an amount equal to such Replaced Bank's  Percentage of any Unpaid
     Drawing  (which at such time remains an Unpaid  Drawing)  with respect to a
     Letter of Credit  issued by such Issuing Bank to the extent such amount was
     not theretofore funded by such Replaced Bank; and

          (ii) all obligations of the Borrower owing to the Replaced Bank (other
     than  those (a)  specifically  described  in clause (i) above in respect of
     which the  assignment  purchase price has been, or is  concurrently  being,
     paid or (b)  relating to any  Tranche of Loans  and/or  Commitments  of the
     respective  Replaced Bank which will remain outstanding after giving effect
     to the  respective  replacement)  shall be paid in full by the  Borrower to
     such Replaced Bank concurrently with such replacement.

Upon the execution of the respective  assignment  documentation,  the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the  Register by the Agent  pursuant to Section  7.16 and, if so requested by
the Replacement  Bank,  delivery to the Replacement Bank of the appropriate Note
or Notes, executed by the Borrower, (x) the Replacement Bank shall become a Bank
hereunder,  unless the respective  Replaced Bank continues to have outstanding A
Term Loans, B Term Loans, an Acquisition  Loan Commitment or Acquisition  Loans,
or a  Revolving  Loan  Commitment  hereunder  the  Replaced  Bank shall cease to
constitute  a Bank  hereunder  with  respect  to the  Loans and  Commitments  so
transferred,  except  with  respect  to  indemnification  provisions  under this
Agreement, which shall survive as to such Replaced Bank, and the Percentages and
Acquisition  Commitment Percentages of the Banks shall be automatically adjusted
at such time to give effect to such replacement.

                                       11

<PAGE>

     Section 1A. Letters of Credit.

     1A.01 Letters of Credit.  (a) Subject to and upon the terms and  conditions
herein set forth, the Borrower may request any Issuing Bank at any time and from
time to time on and after the Restatement  Effective Date and prior to the third
Business Day  immediately  preceding the Revolving  Loan Maturity Date to issue,
for the account of the Borrower or any of its  Subsidiaries  and for the benefit
of any holder (or any trustee,  agent or other  similar  representative  for any
such holders) of L/C Supportable Indebtedness,  an irrevocable standby letter of
credit in a form  customarily used by such Issuing Bank or in such other form as
has been  approved  by such  Issuing  Bank in  support  of said L/C  Supportable
Indebtedness   (each  such  letter  of  credit,   a  "Letter  of  Credit"   and,
collectively,  the "Letters of Credit"). All Letters of Credit outstanding under
and as  defined in the  Existing  Credit  Agreement  (the  "Existing  Letters of
Credit"),  which have an aggregate  stated  amount of  $5,725,812,  shall remain
outstanding  under this Agreement and shall be considered  Letters of Credit for
all purposes of this  Agreement.  All Letters of Credit shall be  denominated in
Dollars.  In the  event a Letter  of  Credit  is  issued  for the  account  of a
Subsidiary of the Borrower,  the Borrower agrees that it shall be obligated with
respect to the Letter of Credit  Outstandings  related to such  Letter of Credit
notwithstanding  that such  Letter of Credit  was  issued  for the  account of a
Subsidiary of the Borrower.

     (b) Each Issuing Bank (other than Paribas) may agree in its sole discretion
and  Paribas  hereby  agrees that it will  (subject to the terms and  conditions
contained  herein),  at any time and from  time to time  after  the  Restatement
Effective  Date and prior to the  Revolving  Loan Maturity  Date,  following its
receipt of the respective Letter of Credit Request, issue for the account of the
Borrower or any of its  Subsidiaries one or more Letters of Credit in support of
such L/C Supportable  Indebtedness as is permitted to remain outstanding without
giving  rise to a  Default  or Event of  Default  hereunder;  provided  that the
respective  Issuing  Bank  shall be under no  obligation  to issue any Letter of
Credit if at the time of such issuance:

          (i) any order,  judgment or decree of any  governmental  authority  or
     arbitrator  shall  purport by its terms to enjoin or restrain  such Issuing
     Bank  from  issuing  such  Letter  of  Credit  or  any  requirement  of law
     applicable to such Issuing Bank or any request or directive (whether or not
     having the force of law) from any governmental  authority with jurisdiction
     over such  Issuing Bank shall  prohibit,  or request that such Issuing Bank
     refrain from, the issuance of letters of credit generally or such Letter of
     Credit in particular or shall impose upon such Issuing Bank with respect to
     such  Letter of Credit any  restriction  or reserve or capital  requirement
     (for which such Issuing Bank is not otherwise compensated) not in effect on
     the date hereof,  or any  unreimbursed  loss, cost or expense which was not
     applicable,  in effect or known to such  Issuing Bank as of the date hereof
     and which such Issuing Bank in good faith deems material to it;

            (ii) such  Issuing  Bank  shall  have  received a notice of the type
      described in the second  sentence of Section  1A.03(b) from any Bank prior
      to the issuance of such Letter of Credit; or

            (iii) a Bank  Default  exists,  unless such Issuing Bank has entered
      into  arrangements  satisfactory  to it and the Borrower to eliminate such
      Issuing Bank's risk

                                       12

<PAGE>

      with  respect  to the Bank  which  is the  subject  of the  Bank  Default,
      including by cash  collateralizing such Bank's Percentage of the Letter of
      Credit Outstandings.

     (c) Notwithstanding the foregoing,  (i) no Letter of Credit shall be issued
the Stated  Amount of which,  when  added to the  Letter of Credit  Outstandings
(exclusive  of Unpaid  Drawings  which are  repaid on the date of,  prior to the
issuance  of, the  respective  Letter of Credit) at such time,  would exceed (x)
$15,000,000 or (y) when added to the aggregate principal amount of all Revolving
Loans then  outstanding,  an amount equal to the Total Revolving Loan Commitment
then in effect  (after giving  effect to any  reductions to the Total  Revolving
Loan  Commitment on such date) and (ii) each Letter of Credit shall by its terms
terminate  on or before the earlier of (x) the date which occurs 12 months after
the date of the  issuance  thereof  (although  any such  Letter of Credit may be
renewable  for  successive  periods  of up to 12  months,  but  not  beyond  the
Revolving Loan Maturity  Date, on terms  acceptable to the Issuing Bank) and (y)
the third Business Day immediately preceding the Revolving Loan Maturity Date.

     1A.02  Minimum  Stated  Amount.  The Stated Amount of each Letter of Credit
shall be not less than  $25,000 or such lesser  amount as is  acceptable  to the
Issuing  Bank but in no event  shall  there be more  than 75  Letters  of Credit
outstanding at any one time.

     1A.03 Letter of Credit  Requests.  (a) Whenever the Borrower desires that a
Letter of Credit be issued for its account,  the  Borrower  shall give the Agent
and the  respective  Issuing  Bank at least 7  Business  Days' (or such  shorter
period as is  acceptable  to the  respective  Issuing  Bank in any  given  case)
written notice prior to the proposed date of issuance (which shall be a Business
Day).  Each notice shall be in the form of Exhibit B-5 (each a "Letter of Credit
Request").

     (b) The  making of each  Letter of Credit  Request  shall be deemed to be a
representation  and warranty by the  Borrower  that such Letter of Credit may be
issued in accordance  with,  and will not violate the  requirements  of, Section
1A.01(c).  Unless the Issuing Bank has  received  notice from any Bank before it
issues a  Letter  of  Credit  that one or more of the  conditions  specified  in
Section 5 are not then satisfied,  or that the issuance of such Letter of Credit
would violate Section  1A.01(c),  then such Issuing Bank may issue the requested
Letter of Credit for the account of the Borrower in accordance  with the Issuing
Bank's usual and customary practices.

     1A.04 Letter of Credit Participations. (a) Immediately upon the issuance by
the  respective  Issuing  Bank of any  Letter of Credit  (or on the  Restatement
Effective  Date in the case of  Letters  of Credit  under and as  defined in the
Existing Credit  Agreement),  such Issuing Bank shall be deemed to have sold and
transferred  to each Bank with a  Revolving  Loan  Commitment,  other  than such
Issuing  Bank (each such Bank,  in its  capacity  under this  Section  1A.04,  a
"Participant"),  and each  such  Participant  shall be  deemed  irrevocably  and
unconditionally  to have purchased and received from such Issuing Bank,  without
recourse or warranty, an undivided interest and participation,  to the extent of
such Participant's  Percentage in such Letter of Credit,  each substitute letter
of credit,  each drawing made  thereunder  and the  obligations  of the Borrower
under this Agreement with respect thereto, and any security therefor or guaranty
pertaining  thereto.  Upon any change in the Revolving  Loan  Commitments of the
Banks pursuant to Section 12.04,  it is hereby agreed that,  with respect to all
outstanding Letters of Credit and

                                       13

<PAGE>

Unpaid Drawings,  there shall be an automatic  adjustment to the  participations
pursuant to this Section  1A.04 to reflect the new  Percentages  of the assignor
and assignee Bank or of all Banks with Revolving Loan  Commitments,  as the case
may be.

     (b) In determining  whether to pay under any Letter of Credit,  the Issuing
Bank shall not have any  obligation  relative  to the other  Banks other than to
confirm that any documents  required to be delivered under such Letter of Credit
appear to have been  delivered and that they appear to comply on their face with
the  requirements  of such Letter of Credit.  Any action  taken or omitted to be
taken by any Issuing  Bank under or in  connection  with any Letter of Credit if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for such Issuing Bank any resulting  liability to the Borrower or any
Bank.

     (c) In the event that any Issuing  Bank makes any payment  under any Letter
of Credit and the Borrower shall not have  reimbursed such amount in full to the
Issuing Bank  pursuant to Section  1A.05(a),  such  Issuing Bank shall  promptly
notify the Agent,  which shall promptly notify each Participant of such failure,
and each Participant shall promptly and unconditionally pay to the Agent for the
account of such Issuing Bank the amount of such Participant's Percentage of such
unreimbursed payment in Dollars and in same day funds. If the Agent so notifies,
prior to 11:00  a.m.  (New  York  time) on any  Business  Day,  any  Participant
required to fund a payment under a Letter of Credit, such Participant shall make
available  to the Agent at the  Payment  Office of the Agent for the  account of
such Issuing Bank in Dollars such Participant's Percentage of the amount of such
payment  on such  Business  Day in same day  funds.  If and to the  extent  such
Participant  shall not have so made its Percentage of the amount of such payment
available to the Agent for the account of such Issuing  Bank,  such  Participant
agrees to pay to the Agent for the account of such  Issuing  Bank,  forthwith on
demand such amount,  together with interest thereon, for each day from such date
until the date such amount is paid to the Agent for the account of such  Issuing
Bank at the overnight Federal Funds Rate. The failure of any Participant to make
available to the Agent for the account of such Issuing  Bank its  Percentage  of
any payment  under any Letter of Credit shall not relieve any other  Participant
of its  obligation  hereunder to make  available to the Agent for the account of
such Issuing Bank its  Percentage of any Letter of Credit on the date  required,
as specified above,  but no Participant  shall be responsible for the failure of
any other  Participant  to make  available  to the Agent for the account of such
Issuing Bank such other Participant's Percentage of any such payment.

     (d)  Whenever  any  Issuing  Bank  receives  a payment  of a  reimbursement
obligation  as to which the Agent has  received  for the account of such Issuing
Bank any  payments  from the  Participants  pursuant  to clause (c) above,  such
Issuing  Bank  shall  pay to the Agent and the  Agent  shall  promptly  pay each
Participant  which has paid its Percentage  thereof,  in Dollars and in same day
funds, an amount equal to such  Participant's  share (based on the proportionate
aggregate  amount funded by such  Participant to the aggregate  amount funded by
all Participants) of the principal amount of such  reimbursement  obligation and
interest thereon accruing after the purchase of the respective participations.

     (e) The  obligations of the  Participants to make payments to the Agent for
the account of each Issuing Bank with respect to Letters of Credit  issued shall
be irrevocable and not subject to any qualification or exception  whatsoever and
shall be made in accordance with the

                                       14

<PAGE>

terms and  conditions  of this  Agreement  under all  circumstances,  including,
without limitation, any of the following circumstances:

          (i) any lack of validity or enforceability of this Agreement or any of
     the Credit Documents;

          (ii) the existence of any claim, setoff,  defense or other right which
     the Borrower may have at any time against a  beneficiary  named in a Letter
     of Credit,  any  transferee of any Letter of Credit (or any Person for whom
     any such  transferee may be acting),  the Agent,  any  Participant,  or any
     other Person,  whether in  connection  with this  Agreement,  any Letter of
     Credit, the transactions  contemplated herein or any unrelated transactions
     (including  any  underlying   transaction  between  the  Borrower  and  the
     beneficiary named in any such Letter of Credit);

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

          (iv) the surrender or  impairment of any security for the  performance
     or observance of any of the terms of any of the Credit Documents; or

          (v) the occurrence of any Default or Event of Default.

     1A.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower hereby
agrees to reimburse the respective  Issuing Bank, by making payment to the Agent
in immediately  available  funds at the Payment Office (or by making the payment
directly to such Issuing Bank at such location as may otherwise have been agreed
upon by the  Borrower and such Issuing  Bank),  for any payment or  disbursement
made by such  Issuing  Bank under any Letter of Credit (each such amount so paid
until reimbursed,  an "Unpaid Drawing"),  immediately after, and in any event on
the date of, such payment or  disbursement,  with interest on the amount so paid
or disbursed by such Issuing Bank, to the extent not  reimbursed  prior to 12:00
Noon (New  York  time) on the date of such  payment  or  disbursement,  from and
including the date paid or disbursed to but excluding the date such Issuing Bank
is  reimbursed  by the Borrower  therefor at a rate per annum which shall be the
Base Rate in effect  from time to time plus 4%, in each case with such  interest
to be payable on demand.

     (b) The  obligations  of the Borrower under this Section 1A.05 to reimburse
the respective Issuing Bank with respect to Unpaid Drawings (including,  in each
case,  interest thereon) shall be absolute and  unconditional  under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the  Borrower  may have or have had  against  any Bank  (including  in its
capacity as Issuing Bank or as Participant),  including, without limitation, any
defense  based upon the failure of any drawing  under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit or any nonapplication
or misapplication by the beneficiary of the proceeds of such Drawing;  provided,
however,  that the Borrower shall not be obligated to reimburse any Issuing Bank
for any wrongful payment made by such Issuing Bank under a Letter of Credit as a
result of acts or omissions  constituting willful misconduct or gross negligence
on the part of such Issuing Bank.

                                       15

<PAGE>

     1A.06  Increased  Costs.  If at any time after the Original  Effective Date
hereof any Issuing Bank or any Participant  determines that the  introduction of
or any change in any  applicable  law,  rule,  regulation,  order,  guideline or
request or in the  interpretation or administration  thereof by any governmental
authority  charged  with  the  interpretation  or  administration   thereof,  or
compliance  by  such  Issuing  Bank  or  any  Participant,  or  any  corporation
controlling  such Person,  with any request or  directive by any such  authority
(whether or not having the force of law),  shall  either (i)  impose,  modify or
make applicable any reserve,  deposit,  capital adequacy or similar  requirement
against  letters of credit issued by such Issuing Bank or participated in by any
Participant,  or (ii) impose on such  Issuing  Bank or any  Participant,  or any
corporation controlling such Person, any other conditions relating,  directly or
indirectly,  to this Agreement or any Letter of Credit; and the result of any of
the foregoing is to increase the cost to such Issuing Bank or any Participant of
issuing,  maintaining or  participating  in any Letter of Credit,  or reduce the
amount of any sum received or receivable by such Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit,  then,  upon  demand  to  the  Borrower  by  such  Issuing  Bank  or any
Participant  (a copy of which  demand shall be sent by such Issuing Bank or such
Participant  to the Agent),  the Borrower shall pay to such Issuing Bank or such
Participant  such additional  amount or amounts as will compensate such Bank for
such  increased  cost or reduction in the amount  receivable or reduction on the
rate of  return on its  capital.  Such  Issuing  Bank or any  Participant,  upon
determining that any additional amounts will be payable pursuant to this Section
1A.06,  will give prompt written  notice  thereof to the Borrower,  which notice
shall  include a  certificate  submitted to the Borrower by such Issuing Bank or
such Participant (a copy of which certificate shall be sent by such Issuing Bank
or such Participant to the Agent),  setting forth in reasonable detail the basis
for the calculation of such additional amount or amounts necessary to compensate
such Issuing Bank or such Participant,  although failure to give any such notice
shall not release or  diminish  the  Borrower's  obligations  to pay  additional
amounts pursuant to this Section 1A.06. The certificate required to be delivered
pursuant  to  this  Section  1A.06  shall,  absent  manifest  error,  be  final,
conclusive and binding on the Borrower.

     Section 2. Commitment Commission; Fees; Reductions of Commitment.

     2.01 Fees. (a) The Borrower agrees to pay to the Agent for  distribution to
each Bank with a Revolving Loan  Commitment or an Acquisition  Loan Commitment a
commitment  commission  (the  "Commitment  Commission")  for the period from and
including  the  Restatement  Effective  Date to and  excluding  the later of the
Acquisition  Loan Termination Date and the Revolving Loan Maturity Date (or such
earlier date as the Total Commitment  shall have been terminated)  computed at a
rate for each day equal to 1/2 of 1% per annum on the daily Aggregate Unutilized
Commitment of such Bank. Accrued Commitment  Commission shall be due and payable
quarterly  in arrears  on each  Quarterly  Payment  Date and on the later of the
Acquisition  Loan  Termination Date and the Revolving Loan Maturity Date or such
earlier date upon which the Total Commitment is terminated.

     (b) The Borrower agrees to pay to each Issuing Bank, for its own account, a
facing fee in  respect  of each  Letter of Credit  issued by such  Issuing  Bank
hereunder  (the "Facing  Fee"),  for the period from and  including  the date of
issuance of such Letter of Credit (which, in the case of the Existing Letters of
Credit shall be deemed to be the  Restatement  Effective  Date) to and including
the date of termination  of such Letter of Credit,  equal to 1/4 of 1% per annum
of

                                       16

<PAGE>

the daily  Stated  Amount of such  Letter of Credit;  provided  that in no event
shall the annual  Facing Fee with  respect to each Letter of Credit be less than
$500.  Accrued  Facing  Fees shall be due and  payable in arrears to the Issuing
Bank in respect of each Letter of Credit issued by it on each Quarterly  Payment
Date and the date of the  termination of the Total  Revolving Loan Commitment on
which no Letters of Credit remain outstanding.

     (c) The Borrower  agrees to pay to the Agent for  distribution to each Bank
with a  Revolving  Loan  Commitment  a fee in respect  of each  Letter of Credit
issued hereunder (the "Letter of Credit Fee"), for the period from and including
the  date of  issuance  of such  Letter  of  Credit  (which,  in the case of the
Existing Letters of Credit shall be deemed to be the Restatement Effective Date)
to and including the date of termination of such Letter of Credit, computed at a
rate per annum equal to the product of (x) the  Applicable  Margin for Revolving
Loans which are  maintained as Eurodollar  Loans and (y) the daily Stated Amount
of such  Letter of Credit.  Letter of Credit  Fees shall be  distributed  by the
Agent to the Banks on the basis of the respective  Percentages as in effect from
time to time.  Accrued Letter of Credit Fees shall be due and payable  quarterly
in arrears on each Quarterly  Payment Date and on the date of the termination of
the Total  Revolving  Loan  Commitment  on which no  Letters  of  Credit  remain
outstanding.

     (d) The  Borrower  hereby  agrees  to pay in  immediately  available  funds
directly  to the Issuing  Bank upon each  issuance  of,  drawing  under,  and/or
amendment of, a Letter of Credit issued by the Issuing Bank such amount as shall
at the time of such issuance,  drawing or amendment be the administrative charge
which the Issuing Bank is customarily  charging for issuances of, drawings under
(including  wire  charges) or amendments  of,  letters of credit issued by it or
such alternative amounts as may have been agreed upon in writing by the Borrower
and the Issuing Bank.

     (e) Notwithstanding anything to the contrary contained in this Agreement or
in the Existing Credit Agreement,  all unpaid Fees included,  and as defined in,
the  Existing  Credit  Agreement  (including,  without  limitation,   Commitment
Commissions,  Facing  Fees,  and  Letter of Credit  Fees (each as defined in the
Existing  Credit  Agreement)  accrued prior to the  Restatement  Effective Date)
shall be payable on the Restatement Effective Date.

     (f) The Borrower shall pay to the Agent,  for its account,  such other fees
and other consideration as have been agreed to in writing by the Borrower or any
of its Subsidiaries and the Agent.

     2.02  Voluntary  Termination of Unutilized  Commitments.  (a) Upon at least
three  Business  Days'  prior  written  notice (or  telephonic  notice  promptly
confirmed in writing) to the Agent at its Notice  Office (which notice the Agent
shall  promptly  transmit to each of the  Banks),  the  Borrower  shall have the
right,  without premium or penalty, to terminate the Total Unutilized  Revolving
Loan Commitment  and/or the Total Unutilized  Acquisition  Loan  Commitment,  in
whole  or  in  part;   provided  that  (i)  each  such  reduction   shall  apply
proportionately  to reduce the Revolving Loan Commitment or the Acquisition Loan
Commitment, as the case may be, of each Bank with such a Commitment and (ii) any
partial reduction  pursuant to this Section 2.02 shall be in integral  multiples
of at least $100,000.

                                       17

<PAGE>

     (b) In the  event of  certain  refusals  by a Bank to  consent  to  certain
proposed  changes,  waivers,  discharges  or  terminations  with respect to this
Agreement  which have been approved by the Required Banks as provided in Section
12.12(b),  the Borrower  shall have the right,  upon five  Business  Days' prior
written  notice to the Agent at its Notice  Office (which notice the Agent shall
promptly  transmit to each of the Banks),  to terminate  all of the  Acquisition
Loan  Commitment  and/or the Revolving Loan  Commitment of such Bank, so long as
all  Loans,  together  with  accrued  and  unpaid  interest,  Fees and all other
amounts,  owing to such Bank  (other  than  amounts  owing in  respect of A Term
Loans, B Term Loans or Acquisition Loans maintained by such Bank, if such A Term
Loans,  B Term  Loans or  Acquisition  Loans are not being  repaid  pursuant  to
Section  12.12(b))  are  repaid  concurrently  with  the  effectiveness  of such
termination  pursuant to Section 3.01(b) and the Borrower shall pay to the Agent
at such time an amount in cash  and/or  Cash  Equivalents  equal to such  Bank's
applicable  Percentage of the  outstanding  Letters of Credit (which cash and/or
Cash  Equivalents  shall be held by the Agent as security for the obligations of
the Borrower hereunder in respect of the outstanding  Letters of Credit pursuant
to a cash  collateral  agreement  to be  entered  into  in  form  and  substance
reasonably  satisfactory  to the Agent (at  which  time  Annex I shall be deemed
modified  to  reflect  such  changed  amounts)),  and at such  time,  unless the
respective  Bank continues to act as a Bank with respect to A Term Loans, B Term
Loans or  Acquisition  Loans or has a Revolving  Loan  Commitment or Acquisition
Loan  Commitment  hereunder,  such Bank shall no longer  constitute a "Bank" for
purposes of this Agreement,  except with respect to indemnifications and similar
provisions under this Agreement, which shall survive as to such repaid Bank.

     2.03 Mandatory Reduction of Commitments.  (a) The Total Commitment (and the
A Term Loan Commitment,  B Term Loan  Commitment,  the Revolving Loan Commitment
and the Acquisition  Loan Commitment of each Bank with such a Commitment)  shall
terminate on August 3, 1999 unless the  Restatement  Effective Date has occurred
on or before such date.

     (b) In addition to any other mandatory  commitment  reductions  pursuant to
this  Section  2.03,  the  Total A Term  Loan  Commitment  (and the A Term  Loan
Commitment  of each Bank  with such a  Commitment)  shall (i)  terminate  in its
entirety on the Restatement Effective Date (after giving effect to the making of
the A Term Loans on such date) and (ii) prior to the  termination of the Total A
Term Loan  Commitment  as provided in clause (i) above,  be reduced from time to
time to the extent required by Section 3.02.

     (c) In addition to any other mandatory  commitment  reductions  pursuant to
this  Section  2.03,  the  Total B Term  Loan  Commitment  (and the B Term  Loan
Commitment  of each Bank  with such a  Commitment)  shall (i)  terminate  in its
entirety on the Restatement Effective Date (after giving effect to the making of
the B Term Loans on such date) and (ii) prior to the  termination of the Total B
Term Loan  Commitment  as provided in clause (i) above,  be reduced from time to
time to the extent required by Section 3.02.

     (d) In addition to any other mandatory  commitment  reductions  pursuant to
this Section 2.03, the Total  Acquisition  Loan  Commitment (and the Acquisition
Loan Commitment of each Bank with such a Commitment)  shall (i) terminate in its
entirety on the Acquisition  Loan  Termination  Date (after giving effect to the
making of Acquisition  Loans on such date), and (ii) prior to the termination of
the Total  Acquisition  Loan  Commitment  as  provided  in clause (i) above,  be
reduced from time to time to the extent required by Section 3.02.

                                       18

<PAGE>

     (e) In addition to any other mandatory  commitment  reductions  pursuant to
this Section 2.03, the Total  Revolving Loan  Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate on the Revolving Loan Maturity Date.

     (f) In addition to any other mandatory  commitment  reductions  pursuant to
this Section 2.03, the Total  Revolving Loan  Commitment (and the Revolving Loan
Commitment of each Bank with such a Commitment) shall be reduced at the time any
payment is required to be made on the  principal  amount of Revolving  Loans (or
would be required to be made if Revolving Loans were then outstanding)  pursuant
to Section  3.02(B)(a),  by an amount  equal to the maximum  amount of Revolving
Loans  that  would be  required  to be repaid  pursuant  to  Section  3.02(B)(a)
assuming that Revolving Loans were outstanding in an aggregate  principal amount
equal to the Total Revolving Loan Commitment.

     (g) In addition to any other mandatory  commitment  reductions  pursuant to
this Section 2.03, the Total  Acquisition  Loan  Commitment (and the Acquisition
Loan  Commitment  of each Bank with such a  Commitment)  shall be reduced at the
time any payment is required to be made on the principal  amount of  Acquisition
Loans (or would be required to be made of  Acquisition  Loans then  outstanding)
pursuant to Section  3.02(B)(a),  by an amount  equal to the  maximum  amount of
Acquisition  Loans  that  would be  required  to be repaid  pursuant  to Section
3.02(B)(a)  assuming that  Acquisition  Loans were  outstanding  in an aggregate
principal amount equal to the Total Acquisition Loan Commitment.

     (h) Each  reduction to the Total A Term Loan  Commitment,  the Total B Term
Loan Commitment,  the Total  Acquisition Loan Commitment and the Total Revolving
Loan Commitment,  pursuant to this Section 2.03 shall be applied proportionately
to reduce the A Term Loan Commitment,  B Term Loan Commitment,  Acquisition Loan
Commitment or the Revolving  Loan  Commitment,  as the case may be, of each Bank
with such a Commitment.

     Section 3. Prepayments; Payments; Taxes.

     3.01 Voluntary Prepayments. (a) The Borrower shall have the right to prepay
Loans,  without premium or penalty, in whole or in part from time to time on the
following terms and conditions:

          (i) The  Borrower  shall give the Agent prior to 10:00 a.m.  (New York
     time) at its Notice  Office at least three  Business  Days'  prior  written
     notice in the case of Eurodollar Loans and one Business Day's prior written
     notice in the case of Base Rate  Loans of its  intent to prepay  the Loans,
     whether A Term Loans, B Term Loans,  Acquisition  Loans or Revolving  Loans
     shall be prepaid  (which  Loans may be  selected at the  discretion  of the
     Borrower subject to any limitations  contained in clauses (ii) through (vi)
     below),  the amount of such prepayment and the Types of Loans to be prepaid
     and, in the case of Eurodollar Loans, the specific  Borrowing or Borrowings
     pursuant to which made,  which notice the Agent shall promptly  transmit to
     each of the Banks;

          (ii) each prepayment  shall be in an aggregate  principal amount of at
     least the applicable Minimum Borrowing Amount and, if greater,  in integral
     multiples of $100,000;  provided  that no partial  prepayment of Eurodollar
     Loans made pursuant to any

                                       19

<PAGE>

     Borrowing  shall  reduce  the  outstanding  Loans  made  pursuant  to  such
     Borrowing to an amount less than the Minimum Borrowing Amount;

          (iii) no prepayments of Eurodollar Loans made pursuant to this Section
     3.01 may be made on a day  other  than the last day of an  Interest  Period
     applicable thereto;

          (iv) each  prepayment  in  respect  of any Loans  made  pursuant  to a
     Borrowing shall be applied pro rata among such Loans;

          (v) each  prepayment of Term Loans or  Acquisition  Loans  pursuant to
     this  Section  3.01 must  consist  of a  prepayment  of A Term Loans (in an
     amount equal to the A TL Percentage of such  prepayment),  B Term Loans (in
     an amount equal to the B TL Percentage of such  prepayment) and Acquisition
     Loans  (in an  amount  equal  to the  Acquisition  TL  Percentage  of  such
     prepayment);  provided,  however, prior to the Acquisition Loan Termination
     Date  a  prepayment  of  Acquisition  Loans  shall  not be  required  to be
     accompanied  by a prepayment  of Term Loans and a prepayment  of Term Loans
     shall not be required to be  accompanied  by a  prepayment  of  Acquisition
     Loans; and

          (vi) each prepayment of Acquisition  Loans after the Acquisition  Loan
     Termination Date and each prepayment of Term Loans pursuant to this Section
     3.01 shall be applied to reduce the then remaining Scheduled  Repayments of
     the  respective  Tranche  being  repaid on a pro rata basis (based upon the
     then remaining principal amount of each such Scheduled Repayment).

     (b) In the  event of  certain  refusals  by a Bank to  consent  to  certain
proposed  changes,  waivers,  discharges  or  terminations  with respect to this
Agreement  which have been approved by the Required Banks as provided in Section
12.12(b),  the Borrower  shall have the right,  upon five  Business  Days' prior
written  notice to the Agent at its Notice  Office (which notice the Agent shall
promptly  transmit  to each of the  Banks) to repay  all  Loans,  together  with
accrued and unpaid  interest,  Fees and all other amounts owing to such Bank (or
owing to such Bank with respect to each  Tranche  which gave rise to the need to
obtain such Bank's individual  consent) in accordance with said Section 12.12(b)
so long as (A) in the case of the repayment of Revolving  Loans of any Bank with
a Revolving Loan Commitment or Acquisition Loans of any Bank with an Acquisition
Loan  Commitment  pursuant to this clause (b) the Revolving  Loan  Commitment or
Acquisition  Loan  Commitment,  as the case may be, of such  Bank is  terminated
concurrently  with such  repayment  pursuant  to Section  2.02(b) (at which time
Schedule  I shall be deemed  modified  to reflect  the  changed  Revolving  Loan
Commitments),  and (B) in the  case of the  repayment  of  Loans of any Bank the
consents required by Section 12.12(b) in connection with the repayment  pursuant
to this clause (b) shall have been obtained.

     3.02 Mandatory Repayments and Commitment Reductions.

     (A) Requirements:

     (a) On any day on  which  the sum of the  aggregate  outstanding  principal
amount of the  Revolving  Loans and Letter of Credit  Outstandings  at such time
exceeds the Total  Revolving  Loan  Commitment  as then in effect,  the Borrower
shall prepay the principal of

                                       20

<PAGE>

Revolving  Loans in an amount equal to such excess.  If, after giving  effect to
the prepayment of all outstanding  Revolving  Loans, the aggregate amount of the
Letter of Credit  Outstandings  exceeds the Total  Revolving Loan  Commitment as
then in effect,  the  Borrower  shall pay to the Agent at its Payment  Office on
such  date an  amount of cash or Cash  Equivalents  equal to the  amount of such
excess, such cash or Cash Equivalents to be held as security for all Obligations
of the Borrower  hereunder in a manner  satisfactory to the Collateral Agent. On
any day on or prior  to the  Acquisition  Loan  Termination  Date on  which  the
aggregate  outstanding  principal amount of Acquisition  Loans exceeds the Total
Acquisition  Loan  Commitment,   the  Borrower  shall  repay  the  principal  of
Acquisition Loans in the amount equal to such excess.

     (b) In addition to any other mandatory repayments or commitment  reductions
pursuant to this Section  3.02(A),  the  Borrower  shall be required to repay on
each  date set  forth  below (to the  extent  any day set  forth  below is not a
Business  Day then  the  required  date of  repayment  shall be the  immediately
preceding Business Day) the principal amount of A Term Loans, to the extent then
outstanding, set forth below opposite such date (each such repayment as the same
may be reduced after the Restatement Effective Date as provided in Sections 3.01
and 3.02(B), a "Scheduled A Term Loan Repayment"):

<TABLE>
<CAPTION>

      Scheduled A Term Loan Repayment Date   Amount

      ------------------------------------   ------
      <S>                                    <C>

      September 30, 1999                     $3,500,000
      December 31, 1999                      $3,500,000
      March 31, 2000                         $3,000,000
      June 30, 2000                          $3,000,000
      September 30, 2000                     $3,000,000
      December 31, 2000                      $3,000,000
      March 31, 2001                         $3,575,000
      June 30, 2001                          $3,575,000
      September 30, 2001                     $3,575,000
      December 31, 2001                      $3,575,000
      March 31, 2002                         $3,700,000
      June 30, 2002                          $1,000,000
</TABLE>

     (c) In addition to any other mandatory repayments or commitment  reductions
pursuant to this Section  3.02(A),  the  Borrower  shall be required to repay on
each  date set  forth  below (to the  extent  any date set forth  below is not a
Business  Day then  the  required  date of  repayment  shall be the  immediately
preceding Business Day) the principal amount of B Term Loans, to the extent then
outstanding, set forth below opposite such date (each such repayment as the same
may be reduced after the Restatement Effective Date as provided in Sections 3.01
and 3.02(B), a "Scheduled B Term Loan Repayment"):

<TABLE>
<CAPTION>

      Scheduled B Term Loan Repayment Date   Amount

      ------------------------------------   ------
      <S>                                    <C>
      September 30, 1999                     $125,000
      December 31, 1999                      $125,000
      March 31, 2000                         $125,000
      June 30, 2000                          $125,000
</TABLE>

                                       21

<PAGE>

<TABLE>

      <S>                                 <C>

      September 30, 2000                     $125,000
      December 31, 2000                      $125,000
      March 31, 2001                         $125,000
      June 30, 2001                          $125,000
      September 30, 2001                     $125,000
      December 31, 2001                      $125,000
      March 31, 2002                       $3,812,500
      June 30, 2002                        $3,812,500
      September 30, 2002                   $3,812,500
      December 31, 2002                    $3,812,500
      March 31, 2003                       $4,875,000
      June 30, 2003                        $4,875,000
      September 30, 2003                   $4,875,000
      December 31, 2003                    $4,875,000
      March 31, 2004                       $5,922,000
      June 30, 2004                        $5,922,000
      September 30, 2004                   $5,922,000
      December 31, 2004                    $5,985,000
      March 31, 2005                       $7,531,000
      June 30, 2005                        $7,531,000
      September 30, 2005                   $7,531,000
      B Term Loan Maturity Date            $7,531,000
</TABLE>

     (d) In addition to any other mandatory repayments or commitment  reductions
pursuant to this Section  3.02(A),  the  Borrower  shall be required to repay on
each date set forth below a principal amount of Acquisition Loans, to the extent
then  outstanding,  equal to (i) the aggregate  principal  amount of Acquisition
Loans  outstanding on the Acquisition Loan Termination Date (after giving effect
to any  Acquisition  Loans made on such date)  multiplied by (ii) the percentage
set forth  below  opposite  such date  (each such  repayment  as the same may be
reduced as provided in Sections 3.01 and 3.02(B), a "Scheduled  Acquisition Loan
Repayment"  and the Scheduled A Term Loan  Repayments  and Scheduled B Term Loan
Repayments,   together  with  the   Scheduled   Acquisition   Loan   Repayments,
collectively referred to as the "Scheduled Repayments"):

<TABLE>
<CAPTION>

Scheduled Acquisition Loan Repayment Dates                Percentage

------------------------------------------                -----------
<S>                                                       <C>
Each Quarterly Payment Date occurring during the
12 month period  commencing on November 6, 2001              2.5%

Each Quarterly Payment Date
occurring  during  the 12 month  period  commencing
on  November  6, 2002                                       10.0%

Acquisition Loan Maturity Date                                50%

</TABLE>

     (e) In addition to any other mandatory repayments or commitment  reductions
pursuant  to this  Section  3.02,  on the  date of the  receipt  thereof  by the
Borrower or any of its Subsidiaries, an amount equal to:

                                       22

<PAGE>

          (i) 100% of the  cash  proceeds  (net of  underwriting  discounts  and
     commissions   and  all  other   reasonable   costs   associated  with  such
     transaction) from any sale or issuance after the Restatement Effective Date
     of equity of the Borrower or any  Subsidiary  of the  Borrower  (other than
     Permitted Equity Issuances except as otherwise  required by Section 12.17);
     provided that  proceeds of equity sold or issued to officers,  directors or
     employees of the Borrower ("Employee Stock Proceeds") shall not be required
     to be paid on the date of the receipt  thereof (unless such date of receipt
     is also a date specified below) but instead shall be required to be paid on
     each date on which the  aggregate  amount of such Employee  Stock  Proceeds
     received  during the period  commencing on the later of (x) the Restatement
     Effective Date and (y) the immediately  preceding date on which a mandatory
     repayment  or  commitment  reduction  was  made  pursuant  to this  Section
     3.02(A)(e) as a result of the receipt of Employee Stock Proceeds and ending
     on  the  date  of  determination  (the  "Employee  Stock  Proceeds  Payment
     Period"),  equals or exceeds $100,000 (beyond the $2 million  exclusion set
     forth in the last proviso in this Section  3.02(A)(e)),  with the amount of
     the repayments or commitment reductions required on each such date to equal
     100% of the  aggregate  amount of Employee  Stock  Proceeds  received on or
     before such date during the  applicable  Employee  Stock  Proceeds  Payment
     Period; and

          (ii) 100% of the cash  proceeds  (net of  underwriting  discounts  and
     commissions,  loan fees and all other reasonable costs associated with such
     transaction) from any incurrence of any Indebtedness by the Borrower or any
     Subsidiary of the Borrower  (other than  Indebtedness  permitted by Section
     8.05 as said Section is in effect on the Restatement Effective Date),

shall be applied as provided in Section 3.02(B); provided,  however, that in the
case of the initial public  offering of common equity by the Borrower  ("IPO") a
sufficient  amount  of the net cash  proceeds  of the IPO  shall be  applied  as
provided in Section  3.02(B) to reduce the Leverage Ratio on the date of closing
of the IPO to 2.0:1 (with the  Consolidated  EBITDA  component  of the  Leverage
Ratio to be based on the most recently delivered Officer's Certificate delivered
pursuant to Section  7.01(f) or 7.15(a) (xv)) and the remaining  proceeds may be
retained by the Borrower;  provided,  further, that so long as there shall exist
no Default or Event of Default  at the time of  exercise  thereof,  the first $2
million  of  cash  proceeds  received  by the  Borrower  after  the  Restatement
Effective  Date from the exercise of warrants  and/or  options by employees  and
directors of the Borrower  with  respect to the  Borrower's  Common Stock may be
retained by the Borrower.

     (f) In addition to any other mandatory repayments or commitment  reductions
pursuant to this Section  3.02, no later than 90 days after the last day of each
fiscal year of the Borrower ending after the Acquisition Loan Termination  Date,
an amount equal to 75% of Excess Cash Flow of the Borrower and its  Subsidiaries
for the relevant Excess Cash Flow Payment Period shall be applied as provided in
Section 3.02(B).

     (g) In addition to any other mandatory repayments or commitment  reductions
pursuant to this Section 3.02, on each date after the Restatement Effective Date
on which the Borrower or any  Subsidiary of the Borrower  receives cash proceeds
from any sale of assets  (including  capital  stock and  securities  other  than
capital stock the proceeds from the sale of

                                       23

<PAGE>

which is recaptured  under Section  3.02(A)(e) but excluding  sales of assets so
long as the  aggregate  amount of Net Sale  Proceeds  excluded  pursuant to this
clause does not exceed $100,000 in the aggregate for all such asset sales in any
fiscal year of the  Borrower),  an amount equal to 100% of the Net Sale Proceeds
thereof shall be applied as provided in Section 3.02(B).

     (h) In addition to any other mandatory repayments or commitment  reductions
pursuant to this Section 3.02, on each date after the Restatement Effective Date
of the receipt  thereof by the Borrower or any  Subsidiary of the  Borrower,  an
amount  equal  to  100% of the  cash  proceeds  of any  Recovery  Event  (net of
reasonable  costs incurred in connection with such Recovery Event (including the
estimated marginal increase in income taxes which will be payable as a result of
such Recovery Event by the Borrower or any Subsidiary of the Borrower)) shall be
applied as provided in Section  3.02(B);  provided  that  proceeds from Recovery
Events which  relate to  destruction  of property  (and do not relate to key-man
insurance or liability insurance) not in excess of $500,000 in the aggregate for
all Recovery Events  occurring  during one fiscal year of the Borrower shall not
be  required  to be so  applied  on such date to the  extent  that the  Borrower
delivers a  certificate  to the Agent on or prior to such date stating that such
proceeds shall be used to replace or restore any properties or assets in respect
of which such proceeds were paid within a period  specified in such  certificate
not to  exceed  180 days  after  the date of  receipt  of such  proceeds  (which
certificate  shall set forth  estimates of the proceeds to be so expended);  and
provided  further,  that if all or any portion of such  proceeds  not so applied
pursuant to Section  3.02(B) are not so used within the period  specified in the
proviso,  such  remaining  portion  shall  be  applied  on the  last day of such
specified period as provided in Section 3.02(B).

     (i) In addition to any other mandatory repayments or commitment  reductions
pursuant to this Section 3.02(A), on each date upon which the Borrower or any of
its   Subsidiaries   receives  cash  proceeds   pursuant  to  any  agreement  or
understanding  relating  to  any  Permitted  Acquisition,   including,   without
limitation,  indemnification  or similar payments and post-closing  adjustments,
but  excluding  in  each  case  post-closing  working  capital  adjustments  and
reimbursement  of out-of-pocket  costs and expenses,  an amount equal to 100% of
such proceeds (net of reasonable  expenses incurred in connection with obtaining
such  proceeds and the  estimated  marginal  increase in income taxes payable in
respect thereof) shall be applied as provided in Section 3.02(B).

     (j)  Notwithstanding  anything to the contrary contained  elsewhere in this
Agreement, all then outstanding Loans of each respective Tranche shall be repaid
in full on the Maturity Date for such Tranche.

     (k)  Notwithstanding  anything to the contrary contained  elsewhere in this
Agreement,  so long as at the time of  issuance  there shall exist no Default or
Event of Default,  the proceeds of the Permitted Stock Issuances may be used for
the purpose set forth in Section 4.18.

     (B) Application:

     (a) Each  mandatory  repayment  of Loans  pursuant  to  Section  3.02(A)(e)
through (i), inclusive, shall be applied:

                                       24

<PAGE>

          (i) first,  (A) prior to the  Acquisition  Loan  Termination  Date, to
     prepay the principal of  outstanding A Term Loans and B Term Loans on a pro
     rata basis,  with the A Term Loan  Facility to receive the A TL  Percentage
     and the B Term Loan Facility to receive the B TL Percentage,  in each case,
     of the total  amount to be applied as a mandatory  repayment  of Term Loans
     pursuant to this Section 3.02(B);  which prepayments of such Term Loans (or
     mandatory  reductions to Term Loan Commitments)  shall be applied to reduce
     the then  remaining  Scheduled A Term Loan  Repayments and Scheduled B Term
     Loan Repayments on a pro rata basis (based on the then remaining amounts of
     such Scheduled A Term Loan Repayments or Scheduled B Term Loan  Repayments)
     and (B)  after  the  Acquisition  Loan  Termination  Date,  to  prepay  the
     principal of  outstanding  Term Loans and  Acquisition  Loans on a pro rata
     basis, with the A Term Loan Facility to receive the A TL Percentage,  the B
     Term Loan Facility to receive the B TL Percentage and the Acquisition  Loan
     Facility  to receive the  Acquisition  TL  Percentage,  in each case of the
     total  amount to be  applied  as a  mandatory  repayment  of Term Loans and
     Acquisition  Loans pursuant to this Section 3.02(B),  and which prepayments
     of such Term  Loans and  Acquisition  Loans  shall be applied to reduce the
     then remaining Scheduled Repayments of the respective Tranche on a pro rata
     basis (based on the then remaining amounts of such Scheduled Repayments);

          (ii) second, prior to the Acquisition Loan Termination Date, to prepay
     the  principal  of  outstanding  Acquisition  Loans  (with a  corresponding
     reduction to the Total Acquisition Loan Commitment);

          (iii) third, prior to the Acquisition Loan Termination Date, to reduce
     the Total  Acquisition Loan Commitment  (with a corresponding  reduction to
     the Total Acquisition Loan Commitment of each Bank (it being understood and
     agreed  that  the  amount  of  such  reduction  shall  be  deemed  to be an
     application of proceeds for purposes of this Section  3.02(B)(a)(iii)  even
     though cash is not actually applied));

          (iv) fourth,  to prepay the principal of outstanding  Revolving  Loans
     (with a corresponding reduction to the Total Revolving Loan Commitment);

          (v) fifth,  to cash  collateralize  Letter of Credit  Outstandings  by
     depositing  cash in a letter of credit  cash  collateral  account  on terms
     satisfactory  to the Collateral  Agent in an amount equal to such Letter of
     Credit  Outstandings  (it being  understood  that the Total  Revolving Loan
     Commitment shall be reduced by the amount of cash collateral required to be
     deposited by this clause (v)); and

          (vi) sixth, to reduce the remaining (i.e.,  after giving effect to all
     prior reductions thereto, including,  without limitation, to the reductions
     theretofore  effected pursuant to the preceding clauses (iv) and (v)) Total
     Revolving Loan  Commitment (it being  understood and agreed that the amount
     of such  reduction  shall be deemed to be an  application  of proceeds  for
     purposes of this  Section  3.02(B)(a)(vi)  even though cash is not actually
     applied).

     (b) With respect to each  repayment of Loans required by this Section 3.02,
the Borrower may designate the Types of Loans which are to be repaid and, in the
case of Eurodollar

                                       25

<PAGE>

Loans, the specific  Borrowing or Borrowings of the respective  Tranche pursuant
to which made;  provided that:  (i)  repayments of Eurodollar  Loans pursuant to
this  Section  3.02  may  only be made on the  last  day of an  Interest  Period
applicable  thereto unless all Eurodollar  Loans of the respective  Tranche with
Interest  Periods  ending on such date of required  repayment  and all Base Rate
Loans of the respective Tranche have been paid in full; (ii) if any repayment of
Eurodollar   Loans  made  pursuant  to  a  single  Borrowing  shall  reduce  the
outstanding  Eurodollar  Loans made pursuant to such Borrowing to an amount less
than the applicable  Minimum Borrowing Amount,  such Borrowing shall immediately
be converted  into Base Rate Loans;  and (iii) each  repayment of any Loans made
pursuant to a single  Borrowing  shall be applied pro rata among such Loans.  In
the absence of a  designation  by such  Borrower as described  in the  preceding
sentence,  the Agent shall,  subject to the above,  make such designation in its
sole discretion.

     (C) Waiver of Certain Mandatory Repayments:

     Notwithstanding  anything to the contrary contained in this Section 3.02 or
elsewhere in this Agreement (including,  without limitation,  in Section 12.12),
the Borrower shall have the option,  in its sole  discretion,  to give the Banks
with  outstanding  B Term Loans (the "B Banks")  the option to waive a mandatory
repayment of such Loans  pursuant to Section  3.02(A)  (each such  repayment,  a
"Waivable Mandatory  Repayment") upon the terms and provisions set forth in this
Section  3.02(C).  If the Borrower  elects to exercise the option referred to in
the preceding  sentence,  the Borrower shall give to the Agent written notice of
its  intention  to give the B Banks  the  right to  waive a  Waivable  Mandatory
Repayment at least five Business Days prior to the  applicable  Scheduled B Term
Repayment  Date,  which notice the Agent shall  promptly  forward to all B Banks
(indicating  in such notice the amount of such  repayment  to be applied to each
such Bank's outstanding B Term Loans). The Borrower's offer to permit such Banks
to waive any such Waivable Mandatory  Repayment may apply to all or part of such
repayment,  provided that any offer to waive part of such repayment must be made
ratably to such Banks on the basis of their  outstanding  B Term  Loans.  In the
event any such B Bank  desires to waive such  Bank's  right to receive  any such
Waivable Mandatory  Repayment in whole or in part, such Bank shall so advise the
Agent no later than the close of business  two  Business  Days after the date of
such notice from the Agent, which notice shall also include the amount such Bank
desires to receive in respect of such  repayment.  If any Bank does not reply to
the Agent within the two Business Days, it will be deemed not to have waived any
part of such  repayment.  If any Bank  does not  specify  an amount it wishes to
receive,  it will be deemed to have accepted 100% of the total  payment.  In the
event that any such Bank  waives  all or part of such right to receive  any such
Waivable Mandatory Repayment, the Agent shall apply 100% of the amount so waived
by such Bank to the A Term Loans in accordance with Section 3.02(B).

     3.03 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement or any Note shall be made to the Agent
for the account of the Bank or Banks entitled  thereto not later than 12:00 Noon
(New York time) on the date when due and shall be made in Dollars in immediately
available  funds at the Payment Office of the Agent.  Whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which is not
a Business  Day, the due date thereof  shall be extended to the next  succeeding
Business  Day and,  with  respect to payments of  principal,  interest  shall be
payable at the applicable rate during such extension.

                                       26

<PAGE>

     3.04 Net Payments. (a) All payments made by the Borrower hereunder or under
any Note will be made without setoff,  counterclaim or other defense.  Except as
provided in Section  3.04(b),  all such payments will be made free and clear of,
and without  deduction or withholding for, any present or future taxes,  levies,
imposts,  duties,  fees,  assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political  subdivision or taxing
authority  thereof or therein  with  respect to such  payments  (but  excluding,
except as  provided  in the second  succeeding  sentence,  any tax imposed on or
measured by the net income of a Bank pursuant to the laws of the jurisdiction in
which it is  organized  or the  jurisdiction  in which the  principal  office or
applicable  lending office of such Bank is located or any political  subdivision
or taxing authority  thereof or therein) and all interest,  penalties or similar
liabilities with respect to such non- excluded taxes, levies,  imposts,  duties,
fees,  assessments  or other  charges  (all such non-  excluded  taxes,  levies,
imposts,   duties,  fees,   assessments  or  other  charges  being  referred  to
collectively  as "Taxes").  If any Taxes are so levied or imposed,  the Borrower
agrees to pay the full amount of such Taxes, and such additional  amounts as may
be  necessary  so that every  payment of all amounts due  hereunder or under any
Note, after withholding or deduction for or on account of any Taxes, will not be
less than the amount  provided  for herein or in such Note.  If any  amounts are
payable in respect of Taxes  pursuant to the  preceding  sentence,  the Borrower
agrees to reimburse each Bank,  upon the written request of such Bank, for taxes
imposed on or measured by the net income or net profits of such Bank pursuant to
the laws of the  jurisdiction or any political  subdivision or taxing  authority
thereof or therein in which  such Bank is  organized  or in which the  principal
office  or  applicable  lending  office  of  such  Bank is  located  and for any
withholding of income or similar taxes as such Bank shall  determine are payable
by, or  withheld  from,  such Bank in respect  of such  amounts so paid to or on
behalf of such Bank  pursuant to the  preceding  sentence  and in respect of any
amounts  paid to or on  behalf  of such  Bank  pursuant  to this  sentence.  The
Borrower  will furnish to the Agent within 45 days after the date of the payment
of any Taxes due pursuant to  applicable  law  certified  copies of tax receipts
evidencing  such payment by the Borrower.  The Borrower  agrees to indemnify and
hold harmless each Bank, and reimburse such Bank upon its written  request,  for
the amount of any Taxes so levied or imposed and paid by such Bank.

     (b) Each Bank that is not a United  States  person (as such term is defined
in Section  7701(a)(30)  of the Code)  agrees to deliver to the Borrower and the
Agent on or prior to the  Restatement  Effective  Date, or in the case of a Bank
that is an assignee or transferee of an interest under this  Agreement  pursuant
to Section  12.04  (unless  the  respective  Bank was  already a Bank  hereunder
immediately  prior  to  such  assignment  or  transfer),  on the  date  of  such
assignment  or transfer to such Bank,  (i) two accurate  and  complete  original
signed  copies of Internal  Revenue  Service  Form  W-8EC1 or Form W-8BEN  (with
respect to a complete exemption under an income tax treaty) (or successor forms)
certifying to such Bank's entitlement to a complete exemption

                                       27

<PAGE>

from United  States  withholding  tax with  respect to payments to be made under
this  Agreement  and under any Note,  or (ii) if the Bank is not a "bank" within
the  meaning  of Section  881(c)(3)(A)  of the Code and  cannot  deliver  either
Internal Revenue Service Form W-8EC1 or Form, W-8BEN (with respect to a complete
exemption  under an income tax  treaty)  pursuant  to clause  (i)  above,  (x) a
certificate  substantially  in the form of  Exhibit C (any such  certificate,  a
"Section  3.04(b)(ii)  Certificate")  and (y) two accurate and complete original
signed  copies of Internal  Revenue  Service  Form W-8BEN  (with  respect to the
portfolio  interest  exemption)  (or successor  form)  certifying to such Bank's
entitlement  to a complete  exemption  from United States  withholding  tax with
respect to payments of  interest to be made under this  Agreement  and under any
Note. In addition, each Bank agrees that from time to time after the Restatement
Effective  Date,  when a lapse in time or change in  circumstances  renders  the
previous  certification  obsolete or inaccurate in any material respect, it will
deliver to the Borrower  and the Agent two new  accurate  and complete  original
signed copies of Internal Revenue Service Form W-8EC1, Form W-8BEN (with respect
to the  benefits of any income tax  treaty),  Form W-8BEN  (with  respect to the
portfolio interest exemption) and a Section 3.04(b)(ii) Certificate, as the case
may be, and such other forms as may be required in order to confirm or establish
the  entitlement  of such Bank to a continued  exemption  from or  reduction  in
United States  withholding tax with respect to payments under this Agreement and
any Note,  or it shall  immediately  notify  the  Borrower  and the Agent of its
inability to deliver any such Form or Certificate, in which case such Bank shall
not be required to deliver any such form of certificate pursuant to this Section
3.04(b).  Notwithstanding anything to the contrary contained in Section 3.04(a),
but subject to the immediately  succeeding  sentence,  (x) the Borrower shall be
entitled,  to the extent it is  required  to do so by law, to deduct or withhold
income  or  similar  taxes  imposed  by the  United  States  (or  any  political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts  payable  hereunder  for the  account  of any Bank which is not a United
States person (as such term is defined in Section  7701(a)(30)  of the Code) for
U.S.  Federal  income tax purposes to the extent that such Bank has not provided
to the Borrower U.S.  Internal  Revenue  Service Forms that establish a complete
exemption from such  deduction or withholding  and (y) the Borrower shall not be
obligated  pursuant to Section 3.04(a) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United States if (I)
such Bank has not  provided the Borrower  the  Internal  Revenue  Service  Forms
required to be provided the Borrower pursuant to this Section 3.04(b) or (II) in
the case of a payment,  other than interest,  to a Bank described in clause (ii)
above, to the extent that such forms do not establish a complete  exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 3.04, the Borrower agrees to
pay  additional  amounts and to  indemnify  each Bank in the manner set forth in
Section 3.04(a)  (without regard to the identity of the  jurisdiction  requiring
the deduction or withholding) in respect of any amounts  deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
after the Restatement Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar Taxes.

     Section 4. Conditions Precedent to Loans on the Restatement Effective Date.
The obligation of each Bank to make Loans on the Restatement Effective Date (and
the occurrence of the Restatement  Effective Date) is subject on the Restatement
Effective Date to the satisfaction of the following conditions:

     4.01  Execution  of  Agreement;  Notes.  On or  prior  to  the  Restatement
Effective  Date there shall have been  delivered to the Agent for the account of
each of the Banks the appropriate A Term Note, B Term Note,  Acquisition Note or
Revolving  Note executed by the Borrower,  in each case in the amount,  maturity
and as otherwise provided herein.

     4.02 Officer's  Certificate.  On the Restatement  Effective Date, the Agent
shall have received a certificate dated the Restatement Effective Date signed on
behalf of the Borrower

                                       28

<PAGE>

by the President or Chief Financial  Officer of the Borrower stating that all of
the conditions in Sections 4.10,  4.11,  4.14, 4.16 and 5.01 have been satisfied
on such date;  provided the  certificate  shall not be required to certify as to
the  acceptability  of any items to the Agent  and/or the Banks or as to whether
the Agent and/or the Banks are  satisfied  with any of the matters  described in
said Sections.

     4.03 Opinions of Counsel.  On the  Restatement  Effective  Date,  the Agent
shall have received from (i) Morrison Cohen Singer & Weinstein,  LLP, counsel to
the  Borrower  and its  Subsidiaries,  an opinion  addressed  to the Agent,  the
Collateral Agent and each of the Banks and dated the Restatement  Effective Date
covering the matters set forth in Exhibit D, and (ii) from Nevada counsel to the
Borrower,  an opinion  addressed to the Agent,  the Collateral Agent and each of
the Banks and  dated the  Restatement  Effective  Date,  covering  such  matters
incident to the  transactions  contemplated  herein as the Agent may  reasonably
request and in form and substance satisfactory to the Agent.

     4.04 Corporate  Documents;  Proceedings.  (a) On the Restatement  Effective
Date,  the Agent  shall  have  received  a  certificate,  dated the  Restatement
Effective  Date,  signed by the  President or any Vice  President of each Credit
Party,  and  attested to by the  Secretary  or any  Assistant  Secretary of such
Credit Party,  in the form of Exhibit E with  appropriate  insertions,  together
with copies of the Certificate of Incorporation, By-Laws or other organizational
documents of such Credit Party and the resolutions of such Credit Party referred
to in such  certificate,  and the foregoing shall be acceptable to the Agent and
the Required Banks in their sole discretion.

     (b) All corporate and legal  proceedings and all instruments and agreements
relating to the transactions contemplated by this Agreement and the other Credit
Documents  shall be  satisfactory  in form and  substance  to the  Agent and the
Required Banks,  and the Agent shall have received all information and copies of
all  documents  and  papers,   including   records  of  corporate   proceedings,
governmental approvals,  good standing certificates and bring-down telegrams, if
any,  which the Agent or the Required  Banks may have  requested  in  connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.

     4.05 Plans;  Shareholders'  Agreements;  Management Agreements;  Employment
Agreements;   Collective  Bargaining  Agreements;  Debt  Agreements;   Affiliate
Contracts;  Tax Sharing  Agreements and Material  Contracts.  On or prior to the
Restatement  Effective  Date,  there shall have been delivered to the Banks true
and correct copies,  certified as true and complete by an appropriate officer of
the Borrower of:

          (i) all Plans  (and for each Plan that is  required  to file an annual
     report on Internal  Revenue  Service Form  5500-series,  a copy of the most
     recent  such  report  (including,  to  the  extent  required,  the  related
     financial  and  actuarial  statements  and  opinions  and other  supporting
     statements,  certifications,  schedules and information), and for each Plan
     that is a  "single-employer  plan," as defined in  Section  4001(a)(15)  of
     ERISA, the most recently  prepared  actuarial  valuation  therefor) and any
     other "employee  benefit  plans," as defined in Section 3(3) of ERISA,  and
     any  other  material  agreements,  plans or  arrangements,  with or for the
     benefit of current or former employees of the

                                       29

<PAGE>

     Borrower or any of its  Subsidiaries or any ERISA Affiliate  (provided that
     the foregoing  shall apply in the case of any  Multiemployer  Plan, only to
     the extent that any document  described therein is in the possession of the
     Borrower  or any  Subsidiary  of the  Borrower  or any ERISA  Affiliate  or
     reasonably  available thereto from the sponsor or trustee of any such plan)
     (collectively, the "Employee Benefit Plans");

          (ii) all agreements  entered into by the Borrower or any Subsidiary of
     the Borrower  governing the terms and relative  rights of its capital stock
     and any agreements entered into by shareholders relating to any such entity
     with  respect to their  capital  stock  (collectively,  the  "Shareholders'
     Agreements");

          (iii)  all  agreements  with  members  of,  or  with  respect  to the,
     management  of the Borrower or any  Subsidiary  of the Borrower  other than
     Employment Agreements (collectively, the "Management Agreements");

          (iv) any  employment  agreements  entered  into by the Borrower or any
     Subsidiary of the Borrower (collectively, the "Employment Agreements");

          (v) all collective  bargaining  agreements applying or relating to any
     employee of the Borrower or any  Subsidiary of the Borrower  (collectively,
     the "Collective Bargaining Agreements");

          (vi) all  agreements  evidencing  or relating to  Indebtedness  of the
     Borrower or any Subsidiary of the Borrower whether or not such agreement is
     to remain outstanding after giving effect to the incurrence of Loans on the
     Restatement Effective Date (collectively, the "Debt Agreements");

          (vii) all tax sharing,  tax  allocation  and other similar  agreements
     entered   into  by  the  Borrower  or  any   Subsidiary   of  the  Borrower
     (collectively, the "Tax Sharing Agreements");

          (viii)  all  contracts,  agreements  or  understandings  entered  into
     between the Borrower or any of its Subsidiaries on the one hand, and any of
     its   Affiliates,   on  the  other  hand   (collectively,   the  "Affiliate
     Contracts"); and

          (ix) all material contracts and licenses of the Borrower or any of its
     Subsidiaries  that are to  remain  in  effect  after  giving  effect to the
     consummation of the Transaction,  including without limitation,  all leases
     pursuant to which the Borrower or any of its Subsidiaries are lessees,  all
     partnership  agreements and all  management  contracts  (collectively,  the
     "Material Contracts");

all of  which  Employee  Benefit  Plans,  Shareholders'  Agreements,  Management
Agreements,   Employment  Agreements,  Collective  Bargaining  Agreements,  Debt
Agreements,  Tax Sharing Agreements,  Affiliate Contracts and Material Contracts
shall be in form and substance  satisfactory to the Agent and the Required Banks
and  shall be in full  force  and  effect  on the  Restatement  Effective  Date;
provided,  however, that only those Plans, Shareholders' Agreements,  Management
Agreements,   Employment  Agreements,  Collective  Bargaining  Agreements,  Debt
Agreements,  Tax Sharing Agreements,  Affiliate Contracts and Material Contracts
which were

                                       30

<PAGE>

not in  existence  on the  Existing  Effective  Date or, if in  existence on the
Existing  Effective Date,  which have been changed in any material respect since
such date, shall be required to be delivered pursuant to this Section 4.05.

     4.06 Assignment of Leases and Rents. On the Restatement Effective Date, the
Borrower and each of its Subsidiaries  shall have duly authorized,  executed and
delivered  one or more  Assignment  of Leases  and Rents  covering  all  leases,
subleases,   rental  agreements,   occupancy  agreements,   licenses  and  other
agreements  pursuant to which the  Borrower or any of its  Subsidiaries  provide
space or other  services to persons  utilizing  space at executive  office suite
centers  in  form  and  substance   satisfactory  to  the  Agent  (as  modified,
supplemented  and amended from time to time,  each an  "Assignment of Leases and
Rents")  and  shall  take  all  other  actions  necessary  or  desirable  in the
reasonable  opinion of counsel to the Agent,  appropriate to perfect and protect
the first priority  security  interest  created by such  Assignment,  including,
without limitation, presentment for filing in the appropriate mortgage recording
offices of the various  state and local  offices in which the  Borrower  and its
Subsidiaries  operate  executive office suites centers.  The Agent shall receive
acknowledgment copies of all such filings.

     4.07 Pledge Agreement.  (a) On the Restatement Effective Date, the Borrower
and each of its Subsidiaries shall have duly authorized,  executed and delivered
an Amended and Restated Pledge  Agreement  substantially  in the form of Exhibit
F-1 (as  modified,  supplemented  or amended from time to time,  the  "Corporate
Pledge  Agreement") and shall have delivered to the Collateral Agent, as Pledgee
thereunder,  all of the Pledged Securities referred to therein then owned by the
Borrower  (except for  securities of ALLIANCE  Business  Centers  National Sales
Company,   Inc.)  (x)  endorsed  in  blank  in  the  case  of  promissory  notes
constituting  Pledged  Securities  and (y)  together  with  executed and undated
irrevocable  stock  powers,  in the case of capital stock  constituting  Pledged
Securities.

     (b) On the  Restatement  Effective  Date,  the  Borrower  shall  have  duly
authorized,  executed and delivered a Limited Liability Company Pledge Agreement
substantially  in the form of Exhibit F-2 (as modified,  supplemented or amended
from time to time, the "LLC Pledge  Agreement")  and shall have delivered to the
Collateral Agent, as Pledgee  thereunder,  if certificated all of the membership
interests  referred to therein then owned by the Borrower together with executed
and undated irrevocable stock powers or other acceptable instruments of transfer
and:

          (i) evidence  that all other actions  necessary or, in the  reasonable
     opinion of counsel to the Agent,  appropriate  to perfect  and  protect the
     first priority  security  interest created by the LLC Pledge Agreement have
     been taken;

          (ii)  acknowledgment  copies of all UCC-l financing  statements filed,
     registered or recorded (or other  evidence  satisfactory  to the Agent that
     there has been filed,  registered  or  recorded  all  financing  statements
     necessary  and  advisable to perfect the  security  interest of the Secured
     Creditors);

          (iii) consents  and/or  acknowledgments  from the requisite  number of
     members of [each limited  liability  company] to permit the granting of the
     security interests

                                       31

<PAGE>

     purported to be granted  pursuant to the LLC Pledge  Agreement as the Agent
     shall have reasonably requested; and

          (iv)  copies  of  lien  and  judgment  searches  as  the  Agent  shall
     reasonably  request (and such termination  statements or other documents as
     may be  necessary  to  release  any Lien in favor of any  third  party  not
     otherwise permitted by Section 8.01).

     4.08 Security  Agreement.  On the  Restatement  Effective Date, each Credit
Party shall have duly authorized, executed and delivered an Amended and Restated
Security  Agreement  in the form of  Exhibit  G (as  modified,  supplemented  or
amended from time to time, the "Security Agreement") covering all of such Credit
Party's present and future Security Agreement Collateral, together with:

          (i) proper  financing  statements  (Form UCC-1 or such other financing
     statements  or  similar  notices as shall be  required  by local law) fully
     executed for filing under the UCC or other  appropriate  filing  offices of
     each  jurisdiction as may be necessary or, in the opinion of the Collateral
     Agent,  desirable to perfect the security interests purported to be created
     by the Security Agreement;

          (ii)  certified  copies of Requests  for  Information  or Copies (Form
     UCC-11),  or equivalent  reports,  listing all judgment liens, tax liens or
     effective  financing  statements  that  name  the  Borrower  or  any of its
     Subsidiaries,  or a division or other operating unit of any such Person, as
     debtor and that are filed in the  jurisdictions  referred to in said clause
     (i), together with copies of such other financing statements (none of which
     shall cover the Collateral except to the extent evidencing  Permitted Liens
     or for which the  Collateral  Agent shall  receive  termination  statements
     (Form UCC-3 or such other  termination  statements  as shall be required by
     local law) fully executed for filing);

          (iii) evidence of the  completion of all other  recordings and filings
     of, or with respect to, the Security  Agreement as may be necessary  or, in
     the opinion of the  Collateral  Agent,  desirable  to perfect the  security
     interests intended to be created by such Security Agreement;

          (iv) evidence  that all other actions  necessary or, in the opinion of
     the  Collateral  Agent,  desirable  to perfect  and  protect  the  security
     interests  purported  to be created  by the  Security  Agreement  have been
     taken; and

          (v) all  necessary  third-party  consents to the granting of the Liens
     purported  to be granted  pursuant to the  Security  Documents,  including,
     without limitation, consents under all management contracts.

     4.09  Subsidiaries  Guaranty.  On  the  Restatement  Effective  Date,  each
Subsidiary of the Borrower shall have duly authorized, executed and delivered an
Amended  and  Restated   Guaranty  in  the  form  of  Exhibit  H  (as  modified,
supplemented or amended from time to time, the "Subsidiaries Guaranty").

     4.10 Material Adverse Change,  etc. Since December 31, 1998,  nothing shall
have  occurred  (and the Banks shall have become aware of no facts or conditions
not previously


                                       32

<PAGE>

known)  which  the  Agent  or the  Required  Banks  shall  determine  (a)  could
reasonably  be  expected  to have a  material  adverse  effect on the  rights or
remedies of the Banks or the Agent,  or on the ability of the Borrower or any of
its  Subsidiaries to perform their  obligations to the Agent and the Banks under
this Agreement or any other Credit Document, (b) could reasonably be expected to
have a materially adverse effect on the performance, business, assets, nature of
assets, liabilities,  operations, properties, condition (financial or otherwise)
or  prospects  of the  Borrower  and its  Subsidiaries  taken  as a  whole,  (c)
indicates the inaccuracy in any material  respect of the information  previously
provided to the Agent or the Banks (taken as a whole) in  connection  with their
analysis  of  the  transactions   contemplated  hereby  or  indicates  that  the
information  previously provided omitted to disclose any material information or
(d) could  reasonably  be expected to have a  materially  adverse  effect on the
financial, banking, or capital markets for the market for senior syndicated debt
financings for leveraged transactions generally.

     4.11  Litigation.  On the Restatement  Effective Date, no litigation by any
entity (private or governmental)  shall be pending or threatened with respect to
this  Agreement,  any other  Credit  Document or any  documentation  executed in
connection herewith or with respect to the transactions  contemplated hereby, or
which the Agent or Required Banks shall determine  could  reasonably be expected
to have a materially  adverse effect on the  Transaction or on the  performance,
business,  assets,  nature  of  assets,  liabilities,   operations,  properties,
condition  (financial  or  otherwise)  or  prospects  of the  Borrower  and  its
Subsidiaries taken as a whole.

     4.12 Fees, etc. On the Restatement  Effective Date, the Borrower shall have
paid in full to the Agent and the Banks all costs, fees and expenses (including,
without  limitation,  all legal fees and expenses)  payable to the Agent and the
Banks to the extent then due pursuant hereto or as otherwise  agreed between the
Borrower and the Agent.

     4.13 Solvency Certificate; Insurance Analyses. On the Restatement Effective
Date, the Borrower shall cause to be delivered to the Agent and the Banks: (i) a
certificate  from the chief  financial  officer of the Borrower,  in the form of
Exhibit I hereto,  supporting the conclusions  that,  after giving effect to the
Transaction and the incurrence of all financings  contemplated herein, that each
Credit Party,  and all Credit Parties taken as a whole,  as the case may be, are
not insolvent and will not be rendered insolvent by the Indebtedness incurred in
connection  therewith,  will not be left with  unreasonably  small  capital with
which to engage in Credit  Party  businesses  and will not have  incurred  debts
beyond  their  ability  to pay such  debts  as they  mature  and  (ii)  evidence
(including,  without  limitation,  certificates  with respect to each  insurance
policy listed on Schedule II) of insurance,  complying with the  requirements of
Section  7.03,  with respect to the business and  properties of the Borrower and
its Subsidiaries, in scope, form and substance satisfactory to the Agent and the
Required Banks and naming each of the Collateral  Agent, the Agent and the Banks
as an additional insured and the Collateral Agent as loss payee and stating that
such insurance  shall not be cancelled or revised without 30 days' prior written
notice by the insurer to the Collateral Agent.

     4.14  Approvals.  All  material  necessary  governmental  and  third  party
approvals in connection with the Transaction and the  transactions  contemplated
by the Credit Documents and otherwise referred to herein or therein  (including,
but not limited to,  those  approvals  required in respect of existing  permits,
landlord consents and transfers of contract rights) shall have been obtained and
remain in effect,  and all applicable waiting periods shall have expired without
any

                                       33

<PAGE>

action  being taken by any  competent  authority  which  restrains,  prevents or
imposes,  in the sole  judgment  of the  Agent or the  Required  Banks,  adverse
conditions upon the  consummation  of the Transaction or the other  transactions
contemplated  by the  Credit  Documents  and  otherwise  referred  to  herein or
therein. Additionally,  there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking  injunction relief or other
restraint  pending  or  notified  prohibiting  or  imposing  materially  adverse
conditions  upon  the   consummation  of  the   Transaction,   the  transactions
contemplated by the Credit Documents, the making of the Loans or the issuance of
Letters of Credit.

     4.15 Financial Statements;  Projections;  Management Letter Reports. (a) On
or prior to the  Restatement  Effective  Date, the Banks shall have received the
consolidated  balance sheet of the Borrower and its  Subsidiaries as at June 30,
1996,  June 30, 1997,  June 30, 1998,  December 31, 1998 and March 31, 1999, and
the consolidated  statements of operations,  stockholders' equity and cash flows
of the Borrower and its  Subsidiaries  for the fiscal  periods  ended as of said
dates,  which,  in the case of the  annual  statements,  have been  examined  by
PricewaterhouseCoopers  LLP,  independent  certified public accountants,  all of
which  financial  statements  shall be prepared  in  accordance  with  generally
accepted  accounting  principles  consistent with past practices and shall be in
for and substance  satisfactory to the Agent and the Required  Banks,  and shall
not disclose any  material  adverse  differences  in the  business,  properties,
assets, liabilities,  results of operations,  condition (financial or otherwise)
or prospects of the  Borrower  and its  Subsidiaries  taken as a whole from that
previously disclosed to the Agent and the Required Banks.

     (b) On the  Restatement  Effective  Date,  the Banks  shall  have  received
detailed consolidated  financial  projections,  certified by the Chief Financial
Officer of the Borrower,  for the Borrower and its  Subsidiaries,  which include
the projected  consolidated results of the Borrower,  after giving effect to the
Transaction  and the other  transactions  contemplated  herein,  for the  period
commencing on the Restatement Effective Date and ending on or after December 31,
2005 (the "Projections"),  which Projections, and the supporting assumptions and
explanations thereto, and the accounting practices and procedures to be utilized
by the Borrower following the Restatement  Effective Date, shall be satisfactory
in form and  substance to the Agent and the  Required  Banks and shall be as set
forth on Schedule III hereto.

     (c) On or prior to the  Restatement  Effective  Date,  the Agent shall have
received a copy of any  "management  letter"  received by the Borrower or any of
its Subsidiaries  from its certified public  accountants on or after November 6,
1998.

     4.16 Refinancing. On the Restatement Effective Date and after giving effect
to  the  Loans  incurred  on  the  Restatement  Effective  Date  and  the  other
transactions   contemplated  hereby,   neither  the  Borrower  nor  any  of  its
Subsidiaries  shall have any Indebtedness or preferred stock outstanding  except
for the Convertible  Preferred  Stock,  the Loans, the Letters of Credit and the
Existing Indebtedness,  which Existing Indebtedness shall not exceed $16,000,000
and shall consist of $2,500,000 in Capital Leases and  $50,000,000 in Borrower's
guarantees to landlords of Subsidiaries.. All of the Existing Indebtedness shall
remain  outstanding  after the  transactions  contemplated  hereby  without  any
defaults or events of default existing  thereunder or arising as a result of the
transactions  contemplated hereby. None of the Existing  Indebtedness shall have
been incurred in anticipation of the transactions contemplated hereby.

                                       34

<PAGE>

     4.17  Consent  Letter.   The  Agent  shall  have  received  a  letter  from
Corporation  Service  Company,  with  offices on the date  hereof at 500 Central
Avenue,  Albany,  New York  12206-2290,  substantially  in the form of Exhibit J
hereto,  indicating  its  consent to its  appointment  by the  Borrower  and its
Subsidiaries  as their  agent to receive  service of  process  as  specified  in
Section 12.08 of this Agreement and Section 21 of the Subsidiaries Guaranty.

     4.18 Equity Financing.  On or prior to the Restatement  Effective Date, the
Borrower shall have raised at least $17,500,000  through the sale of Convertible
Preferred   Stock  on  terms  and  conditions  and  pursuant  to   documentation
satisfactory  to  the  Agent  and  the  Required  Banks  (the  "Required  Equity
Issuance").  The proceeds of the Permitted  Stock Issuances will be used for the
purposes set forth on Schedule XVI hereto.

     Section 5.  Conditions  Precedent to All Credit  Events.  The obligation of
each Bank to make Loans (including Loans made on the Restatement Effective Date)
and the  obligation  of an  Issuing  Bank to issue any  Letter of Credit and the
occurrence of the Restatement  Effective  Date, is subject,  at the time of each
such Credit Event or at the time of the Restatement  Effective Date, as the case
may be (except as hereinafter  indicated),  to the satisfaction of the following
conditions:

     5.01  No  Default;  Representations  and  Warranties.  On  the  Restatement
Effective  Date and at the time of each such Credit  Event and also after giving
effect thereto (i) there shall exist no Default or Event of Default and (ii) all
representations  and  warranties  contained  herein  and  in  the  other  Credit
Documents  shall be true and  correct  in all  material  respects  with the same
effect as though such  representations  and warranties had been made on the date
of the Restatement Effective Date and/or the date of making of such Credit Event
(except to the extent such representations  specifically relate to earlier dates
in which case such representations  shall be correct in all material respects on
and as of such dates).

     5.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the making
of each Loan,  the Agent shall have  received a Notice of Borrowing  meeting the
requirements of Section 1.03.

     (b) Prior to the issuance of each Letter of Credit,  the Issuing Bank shall
have received a Letter of Credit  Request  meeting the  requirements  of Section
1A.03.

     5.03 Permitted Acquisitions.  Prior to the making of each Acquisition Loan,
all  conditions to such Permitted  Acquisition  set forth in Section 7.15 and in
the  definition  thereof  shall have been  satisfied  and the president or chief
financial officer of the Borrower shall have delivered an officer's  certificate
certifying that such conditions have been met.

     The  acceptance  of the  benefits of each Credit  Event shall  constitute a
representation  and  warranty by the  Borrower to each of the Banks that all the
conditions  specified in Section 4 and in this Section 5 and  applicable to such
Credit  Event  exist as of that  time.  All of the  Notes,  certificates,  legal
opinions  and other  documents  and papers  referred to in Section 4 and in this
Section 5, unless  otherwise  specified,  shall be delivered to the Agent at the
Notice Office for the account of each of the Banks and, except for the Notes, in
sufficient

                                       35

<PAGE>

counterparts for each of the Banks and, unless otherwise specified,  shall be in
form and substance satisfactory to the Banks.

     Section 6. Representations,  Warranties and Agreements.  In order to induce
the Banks to enter  into this  Agreement  and to make the  Loans,  and issue (or
participate in) the Letters of Credit as provided herein, the Borrower makes the
following representations, warranties and agreements as to itself and as to each
of its Subsidiaries (to the extent applicable),  as of the Restatement Effective
Date (both before and after giving effect to the Credit Events occurring on such
date, the  Transaction  and the other  transactions  contemplated  by the Credit
Documents,  and all  references  to the  Borrower  herein and  elsewhere in this
Agreement,  shall, unless otherwise specifically indicated, be references to the
Borrower  after  giving  effect to the  Transaction)  and as of the date of each
subsequent Credit Event which  representations,  warranties and agreements shall
survive  the  execution  and  delivery of this  Agreement  and the Notes and any
subsequent  Credit Event,  with the  occurrence of each Credit Event on or after
the Restatement  Effective Date being deemed to constitute a representation  and
warranty  that the matters  specified  in this Section 6 are true and correct on
and as of the  Restatement  Effective  Date and on the date of each such  Credit
Event (except to the extent such representations  specifically relate to earlier
dates in which  case  such  representations  shall be  correct  in all  material
respects on and as of such dates):

     6.01 Corporate and Limited Liability  Company Status.  Each of the Borrower
and its Subsidiaries (i) is a duly organized and validly existing corporation or
limited liability company in good standing under the laws of the jurisdiction of
its  organization,  (ii) has the power and  authority  to own its  property  and
assets  and to  transact  the  business  in which it is  engaged  and  presently
proposes to engage and (iii) is duly  qualified and is authorized to do business
and is in good standing in each  jurisdiction  where the  ownership,  leasing or
operation   of  property  or  the  conduct  of  its   business   requires   such
qualifications  except for failures to be so qualified  which, in the aggregate,
could not  reasonably  be  expected  to have a  material  adverse  effect on the
performance,  business,  assets,  nature  of  assets,  liabilities,  operations,
properties,  condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

     6.02  Corporate  Power  and  Authority.   Each  of  the  Borrower  and  its
Subsidiaries  has the corporate power to execute,  deliver and perform the terms
and  provisions  of each of the  Credit  Documents  to which it is party and has
taken all necessary  corporate  action to authorize the execution,  delivery and
performance by it of each of such Credit Documents. Each of the Borrower and its
Subsidiaries  has duly  executed and delivered  each of the Credit  Documents to
which it is party,  and each of such  Credit  Documents  constitutes  its legal,
valid and binding obligation enforceable in accordance with its terms, except as
the  enforceability  thereof  may  be  limited  by  bankruptcy,  reorganization,
moratorium or similar laws relating to or limiting  creditors'  rights generally
or  by  general  equitable  principles  (regardless  of  whether  the  issue  of
enforceability is considered in a proceeding in equity or at law).

     6.03 No Violation.  Neither the  execution,  delivery or performance by the
Borrower or any of its  Subsidiaries  of the Credit  Documents  to which it is a
party,  nor  compliance by it with the terms and  provisions  thereof,  (i) will
contravene any provision of any

                                       36

<PAGE>

applicable law, statute,  rule or regulation or any order,  writ,  injunction or
decree of any court or governmental instrumentality,  (ii) will conflict with or
result in any breach of any of the terms,  covenants,  conditions  or provisions
of, or  constitute a default  under,  or result in the creation or imposition of
(or the  obligation  to create  or  impose)  any Lien  (except  pursuant  to the
Security Documents) upon any of the property or assets of the Borrower or any of
its  Subsidiaries  pursuant  to the terms of any  indenture,  mortgage,  deed of
trust, credit agreement or loan agreement,  or any other agreement,  contract or
instrument to which the Borrower or its  Subsidiaries  is a party or by which it
or any of its property or assets is bound or to which it may be subject or (iii)
will violate any provision of the  Certificate of  Incorporation  or By-Laws (or
similar organizational documents) of the Borrower or any of its Subsidiaries.

     6.04  Governmental  Approvals.  No  order,  consent,   approval,   license,
authorization  or  validation  of, or filing,  recording  or  registration  with
(except as have been obtained or made on or prior to the  Restatement  Effective
Date and are in full force and effect),  or exemption  by, any  governmental  or
public body or authority,  or any subdivision thereof, is required to authorize,
or is required in connection  with, (i) the execution,  delivery and performance
of any  Credit  Document  or (ii) the  legality,  validity,  binding  effect  or
enforceability of any such Credit Document.

     6.05 Financial Statements;  Financial Condition;  Undisclosed  Liabilities;
Projections;  etc. (a) (i) The consolidated  balance sheet of the Borrower as at
June 30,  1996,  June 30, 1997,  June 30, 1998,  December 31, 1998 and March 31,
1999 and the related  statements  of earnings and cash flows of the Borrower and
its  Subsidiaries  for the fiscal periods ended as of such dates, in the case of
the  annual  statements,  have  been  examined  by  PricewaterhouseCoopers  LLP,
independent certified public accountants,  who delivered unqualified opinions in
respect  thereto and (ii) the pro forma (after giving effect to the  Transaction
and the related financing thereof) consolidated balance sheet of the Borrower as
at the Restatement  Effective Date, copies of all of which financial  statements
referred to in the preceding clauses (i) and (ii) have heretofore been furnished
to each Bank, present fairly the financial  position of the respective  entities
at the dates of said  statements  and the results of  operations  for the period
covered thereby (or, in the case of the pro forma balance sheet,  present a good
faith  estimate of the pro forma  financial  condition  of the  Borrower and its
Subsidiaries (after giving effect to the Transaction) on a consolidated basis at
the  date  thereof).  All  such  financial  statements  have  been  prepared  in
accordance  with  generally   accepted   accounting   principles  and  practices
consistently  applied  except  to the  extent  provided  in the  notes  to  said
financial statements and with respect to interim financial  statements,  subject
to normal year end  adjustments.  Since  December  31,  1998,  there has been no
material adverse change in the performance,  business, assets, nature of assets,
liabilities,  operations,  properties,  condition  (financial  or  otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.

     (b) On and as of the Restatement Effective Date, on a pro forma basis after
giving effect to the Transaction and all other transactions  contemplated by the
Credit Documents and to all Indebtedness (including the Loans) being incurred in
connection with the Transaction,  and Liens created,  and to be created, by each
Credit Party in connection  therewith:  (a) the sum of the assets (including all
intangible  assets),  at a fair valuation,  of each Credit Party will exceed its
debts; (b) no Credit Party has incurred or intends to, or believes that it will,
incur debts beyond its ability to pay such debts as such debts  mature;  and (c)
each Credit Party will have

                                       37

<PAGE>

sufficient  capital  with which to conduct its  business.  For  purposes of this
Section  6.05(b)  "debt" means any  liability on a claim,  and "claim" means (i)
right  to  payment,  whether  or not  such  a  right  is  reduced  to  judgment,
liquidated,  unliquidated,  fixed,  contingent,  matured,  unmatured,  disputed,
undisputed,  legal,  equitable,  secured,  or  unsecured  or  (ii)  right  to an
equitable  remedy  for  breach of  performance  if such  breach  gives rise to a
payment,  whether  or not such  right  to an  equitable  remedy  is  reduced  to
judgment, fixed, contingent,  matured, unmatured,  disputed, undisputed, secured
or unsecured.

     (c) Except as fully  reflected in the  financial  statements  and the notes
related  thereto  described in Section  6.05(a) there were as of the Restatement
Effective  Date  (and  after  giving  effect  to the  Transaction  and the other
transactions  contemplated hereby and by the Credit Documents) no liabilities or
obligations  with  respect to the  Borrower  or any of its  Subsidiaries  of any
nature  whatsoever  (whether  absolute,  accrued,  contingent  or otherwise  and
whether or not due) which, either individually or in aggregate, could reasonably
be  expected  to be material to the  Borrower  and its  Subsidiaries  taken as a
whole. As of the Restatement Effective Date, neither the Borrower nor any of its
Subsidiaries knows of any basis for the assertion against the Borrower or any of
its Subsidiaries of any liability or obligation of any nature whatsoever that is
not fully  reflected in the financial  statements and the notes related  thereto
described in Section  6.05(a) which,  either  individually  or in the aggregate,
could reasonably be expected to be material to the Borrower and its Subsidiaries
taken as a whole. As of the Restatement  Effective Date (and after giving effect
to the  Transaction  and the repayment of the Reckson Loan) none of the Borrower
or any of its Subsidiaries  will have any outstanding  Indebtedness or preferred
stock other than (i) the Loans,  (ii) the  Existing  Indebtedness  and (iii) the
Convertible Preferred Stock.

     (d) On and as of the Restatement  Effective Date, the Projections have been
prepared  in  good  faith  by  the  Borrower  and  there  are no  statements  or
conclusions  in  any  of  the  Projections  which  are  based  upon  or  include
information  known to the Borrower to be  misleading  or which fail to take into
account  material  information  regarding the matters reported  therein.  On the
Restatement  Effective  Date, the Borrower  believes that the  Projections  were
reasonable  and  attainable   (although  actual  results  may  differ  from  the
Projections and no  representation  is made that the Projections will in fact be
attained).

     6.06 Litigation.  There are no actions, suits or proceedings pending or, to
the best  knowledge of the Borrower,  threatened  (i) with respect to any Credit
Document,  or (ii) that are reasonably likely to materially and adversely affect
the performance,  business, assets, nature of assets,  liabilities,  operations,
properties,  condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

     6.07 True and  Complete  Disclosure.  All factual  information  (taken as a
whole) heretofore or contemporaneously furnished by or on behalf of the Borrower
or any  Subsidiary  of the Borrower in writing to any Bank  (including,  without
limitation,  all information  contained in the Credit Documents) for purposes of
or in connection with this Agreement or any transaction  contemplated herein is,
and all other such factual  information  (taken as a whole with all  information
previously furnished) hereafter furnished by or on behalf of the Borrower or any
Subsidiary  of the Borrower in writing to any Bank will be, true and accurate in
all  material  respects  on the date as of which  such  information  is dated or
certified and not incomplete by omitting to state any material fact.

                                       38

<PAGE>

     6.08  Use of  Proceeds;  Margin  Regulations.  (a) All  proceeds  of  Loans
incurred by the  Borrower  on the  Restatement  Effective  Date shall be used to
repay Loans under and as defined in the Existing Credit Agreement (together with
accrued  interest  thereon  and all Fees under and as  defined  in the  Existing
Credit Agreement) and to the extent Loans incurred by the Borrower are in excess
of such amounts,  such excess amounts (but not to exceed $36.2 million) shall be
deposited  in the Cash  Collateral  Account  to be  utilized  solely  to pay the
purchase  price and closing  costs with  respect to  Permitted  Acquisitions  in
accordance with the terms of the Cash Collateral  Agreement  including,  but not
limited to, the  requirement  that each Permitted  Acquisition  must satisfy the
requirements  to be a Permitted  Acquisition  prior to the drawing of funds from
the Cash Collateral Account.

     (b) All  proceeds  of  Revolving  Loans shall be used by the  Borrower  for
general  corporate and working capital purposes of the Borrower but shall not be
permitted to be used to effect Permitted Acquisitions.

     (c) All proceeds of Acquisition Loans shall be used by the Borrower only to
effect  Permitted  Acquisitions  and to pay fees,  costs and expenses related to
such acquisitions.

     (d) No part of the  proceeds  of any Loan will be used to purchase or carry
any Margin Stock or to extend  credit for the purpose of  purchasing or carrying
any Margin  Stock.  Neither  the making of any Loan nor the use of the  proceeds
thereof  nor the  occurrence  of any  other  Credit  Event  will  violate  or be
inconsistent  with  the  provisions  of  Regulation  T, U or X of the  Board  of
Governors of the Federal Reserve System.

     6.09 Tax Returns and Payments.  Except as set forth on Schedule VI, each of
the Borrower and its  Subsidiaries has timely filed or caused to be timely filed
(including  pursuant  to any  valid  extensions  of time  for  filing)  with the
appropriate  taxing authority,  all returns,  statements,  forms and reports for
taxes (the  "Returns")  required  to be filed by or with  respect to the income,
properties  or operations of the Borrower  and/or any of its  Subsidiaries.  The
Returns  accurately  reflect in all material respects all liability for taxes of
the Borrower and its  Subsidiaries as a whole for the periods  covered  thereby.
Each of the Borrower and each of its  Subsidiaries  have paid all material taxes
(including,  without limitation,  all federal payroll withholding taxes) payable
by them which have become due other than those  contested  in good faith and for
which  adequate  reserves have been  established  in accordance  with  generally
accepted accounting  principles.  There is no material action, suit, proceeding,
investigation,  audit,  or claim now  pending or, to the best  knowledge  of the
Borrower or any of its Subsidiaries,  threatened by any authority  regarding any
taxes relating to the Borrower or any of its  Subsidiaries.  Except as set forth
on Schedule VI, as of the Restatement  Effective Date,  neither the Borrower nor
any of its  Subsidiaries  has  entered  into  an  agreement  or  waiver  or been
requested  to enter  into an  agreement  or  waiver  extending  any  statute  of
limitations  relating to the payment or  collection  of taxes of the Borrower or
any of its Subsidiaries,  or is aware of any circumstances  that would cause the
taxable  years  or  other  taxable  periods  of  the  Borrower  or  any  of  its
Subsidiaries  not  to  be  subject  to  the  normally   applicable   statute  of
limitations. Neither the Borrower nor any of its Subsidiaries has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code. None of the Borrower or any of its Subsidiaries has incurred,  or will
incur,  any material tax liability in  connection  with the  Transaction  or any
other transactions contemplated hereby.

                                       39

<PAGE>

     6.10  Compliance  with ERISA.  (a) Schedule VII sets forth each Plan;  each
Plan (and each  related  trust,  insurance  contract or fund) is in  substantial
compliance  with its  terms and with all  applicable  laws,  including,  without
limitation, ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be  qualified  under  Section  401(a) of the Code has  received a
determination  letter from the  Internal  Revenue  Service to the effect that it
meets the  requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has  occurred;  no Plan which is a  Multiemployer  Plan is insolvent or in
reorganization;  no Plan has an  Unfunded  Current  Liability;  no Plan which is
subject to Section  412 of the Code or Section  302 of ERISA has an  accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated  funding deficiency or an
extension of any amortization  period,  within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; all contributions  required to be made with
respect to a Plan and each Multiemployer Plan have been timely made; neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred
any  material  liability  (including  any  indirect,   contingent  or  secondary
liability) to or on account of a Plan or Multiemployer  Plan pursuant to Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section  401(a)(29),  4971 or 4975 of the  Code or  expects  to  incur  any such
liability  under  any of the  foregoing  sections  with  respect  to any Plan or
Multiemployer  Plan; no condition  exists which  presents a material risk to the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a
liability  to or on  account of a Plan or  Multiemployer  Plan  pursuant  to the
foregoing  provisions of ERISA and the Code; no proceedings have been instituted
to  terminate  or appoint a trustee to  administer  any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding,  hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan  (other  than  routine  claims  for  benefits)  is  pending,   expected  or
threatened;  using actuarial assumptions and computation methods consistent with
Part 1 of  subtitle E of Title IV of ERISA,  the  aggregate  liabilities  of the
Borrower,  its  Subsidiaries  and/or its ERISA Affiliates to all Plans which are
multiemployer  plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom,  as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent  Credit Event using
actuarial assumptions and computation methods consistent with Part 1 of subtitle
E of Title IV of  ERISA,  the  aggregate  liabilities  of the  Borrower  and its
Subsidiaries and its ERISA Affiliates to all Multiemployer Plans in the event of
a complete withdrawal therefrom,  as of the close of the most recent fiscal year
of each  such  Multiemployer  Plan  ended  prior to the date of the most  recent
Credit Event,  would not exceed  $50,000;  each group health plan (as defined in
Section 607(1) of ERISA or Section  4980B(g)(2) of the Code) which covers or has
covered  employees or former  employees of the Borrower,  any  Subsidiary of the
Borrower,  or any ERISA  Affiliate  has at all times been operated in compliance
with the  provisions  of Part 6 of  subtitle  B of Title I of ERISA and  Section
4980B of the Code;  no lien imposed under the Code or ERISA on the assets of the
Borrower or any Subsidiary of the Borrower or any ERISA  Affiliate  exists or is
likely to arise on account of any Plan or  Multiemployer  Plan and the  Borrower
and its  Subsidiaries  may cease  contributions  to or  terminate  any  employee
benefit plan maintained by any of them without incurring any material liability.

     (b) Each Foreign Pension Plan has been maintained in substantial compliance
with its  terms  and  with  the  requirements  of any and all  applicable  laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing  with  applicable  regulatory  authorities.  All  contributions
required to be made with respect to a Foreign

                                       40

<PAGE>

Pension  Plan  have  been  timely  made.  Neither  the  Borrower  nor any of its
Subsidiaries  has incurred any obligation in connection with the termination of,
or withdrawal  from, any Foreign  Pension Plan. The present value of the accrued
benefit  liabilities  (whether or not vested)  under each Foreign  Pension Plan,
determined as of the end of the  Borrower's  most recently  ended fiscal year on
the basis of actuarial assumptions,  each of which is reasonable, did not exceed
the current value of the assets of such Foreign  Pension Plan  allocable to such
benefit liabilities.

     6.11 The Security  Documents.  (a) The provisions of the Security Agreement
are effective to create in favor of the Collateral  Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all right,
title and interest of the respective Credit Parties in the Collateral  described
therein and the Collateral Agent, for the benefit of the Secured Creditors,  has
a fully  perfected  Lien on, and  security  interest  in,  all right,  title and
interest of the respective  Credit Parties,  in all of the Collateral  described
therein,  subject to no other Liens other than Permitted  Liens. The recordation
of the  Security  Agreement in the United  States  Patent and  Trademark  Office
together with filings on Form UCC-1 made pursuant to the Security Agreement will
be  effective,  under  federal and state law, to perfect the  security  interest
granted to the Collateral  Agent in the  trademarks  and patents  covered by the
Security  Agreement  and the filing of the  Security  Agreement  with the United
States Copyright Office together with filings on Form UCC-1 made pursuant to the
Security  Agreement will be effective under federal and state law to perfect the
security  interest granted to the Collateral Agent in the copyrights  covered by
the  Security  Agreement.  Each of the  Credit  Parties  party  to the  Security
Agreement has good and merchantable  title to all Collateral  described therein,
free and clear of all Liens except those described above in this clause (a).

     (b) The security  interests  created in favor of the Collateral  Agent,  as
Pledgee for the benefit of the Secured  Creditors,  under the Pledge  Agreements
constitute  first  perfected  security  interests in the Pledged  Securities and
Pledged Limited Liability Company Interests  described in the Pledge Agreements,
subject to no security  interests of any other Person.  No filings or recordings
are required in order to perfect (or maintain the perfection or priority of) the
security  interests  created  in the  Pledged  Securities  and  Pledged  Limited
Liability   Company   Interests  and  the  proceeds  thereof  under  the  Pledge
Agreements.

     6.12   Representations   and   Warranties   in   Credit   Documents.    All
representations  and warranties  set forth in the Credit  Documents are true and
correct in all  material  respects at the time as of which such  representations
and warranties were made and on the Restatement Effective Date.

     6.13  Properties.  Each of the Borrower and its  Subsidiaries  has good and
merchantable  title to all  properties  owned by them,  including  all  property
reflected in the  consolidated  pro forma  balance sheet (after giving effect to
the  Transaction)  referred to in Section  6.05(a)  (except as sold or otherwise
disposed  of since  the date of such  balance  sheet in the  ordinary  course of
business or as permitted by Section  8.02),  free and clear of all Liens,  other
than (i) as  referred  to in the  consolidated  balance  sheet  or in the  notes
thereto or in the pro forma balance sheet or (ii) otherwise permitted by Section
8.01.  Schedule  IV  contains a true and  complete  list of each  parcel of Real
Property  owned or leased by the  Borrower and each of its  Subsidiaries  on the
Restatement  Effective  Date,  and the  type  of  interest  therein  held by the
Borrower and/or its Subsidiaries.

                                       41

<PAGE>

     6.14 Capitalization. On the Restatement Effective Date, after giving effect
to the Transaction, the authorized capital stock of the Borrower consists of (i)
61,000,000  shares  of  common  stock,  $.01 par  value  per  share of which (y)
41,000,000 have been designated as Class A Common Stock ("Class A Common Stock")
of which  4,901,860  shares are issued and  outstanding  and (z) 20,000,000 have
been  designate as Class B Common  ("Class B Common Stock") none of which shares
are issued  and  outstanding  (the  Class A Common  Stock and the Class B Common
Stock  collectively,  "Borrower  Common  Stock") and (ii)  31,000,000  shares of
preferred  stock,  $.01 per  share,  of which  (v)  7,754,711  shares  have been
designated  as Series A  Convertible  Preferred  Stock  ("Series  A  Convertible
Preferred Stock"), all of which shares are issued and outstanding, (w) 3,222,851
shares have been  designated as Series B Convertible  Preferred Stock ("Series B
Convertible  Preferred  Stock),  all of which are  issued and  outstanding,  (x)
13,325,424 shares are designated Series C Convertible Preferred Stock ("Series C
Convertible  Preferred  Stock"),  all of which are issued and  outstanding,  (y)
5,200,000 shares are designated Series D Convertible  Preferred Stock ("Series D
Convertible Preferred Stock"), of which 3,347,961 are issued and outstanding and
(z)  1,000,000  shares  are  designated  Series E  Convertible  Preferred  Stock
("Series  E  Convertible  Preferred  Stock"),  none  of  which  are  issued  and
outstanding (the Series A Convertible  Preferred Stock, the Series B Convertible
Preferred  Stock,  the  Series  C  Convertible  Preferred  Stock,  the  Series D
Convertible  Preferred  Stock  and the  Series  E  Convertible  Preferred  Stock
collectively,  the "Convertible Preferred Stock") and such Borrower Common Stock
and Convertible Preferred Stock is owned in the amounts, and by the Persons, set
forth on  Schedule  VIII.  All of such  outstanding  shares  have  been duly and
validly  issued,  are fully paid and  nonassessable  and are free of  preemptive
rights.  Except  as set  forth in this  Section  and on  Schedule  VIII,  on the
Restatement Effective Date, neither the Borrower nor any of its Subsidiaries has
outstanding  any securities  convertible  into or  exchangeable  for its capital
stock or outstanding any rights to subscribe for or to purchase,  or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.

     6.15 Subsidiaries.  On the Restatement Effective Date, the corporations and
limited  liability  companies listed on Schedule IX are the only Subsidiaries of
the  Borrower.  Except as  indicated  on Schedule  IX, all  Subsidiaries  of the
Borrower are direct  Subsidiaries  of the Borrower.  Schedule IX correctly  sets
forth, as of the Restatement Effective Date, the percentage ownership direct and
indirect of the Borrower in each class of capital stock or other equity interest
of each of its Subsidiaries and also identifies the direct owner thereof.

     6.16  Compliance  with  Statutes,   etc.  Each  of  the  Borrower  and  its
Subsidiaries  is in compliance  with all applicable  statutes,  regulations  and
orders of, and all applicable  restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of  its  property  (including  applicable  statutes,   regulations,  orders  and
restrictions  relating to  environmental  standards and  controls),  except with
respect to each of the foregoing such  noncompliance as could not,  individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the performance,  business, assets, nature of assets,  liabilities,  operations,
properties,  condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

                                       42

<PAGE>

     6.17  Investment  Company  Act.  None  of  the  Borrower  nor  any  of  its
Subsidiaries  is  an  "investment  company"  or a  company  "controlled"  by  an
"investment  company," within the meaning of the Investment Company Act of 1940,
as amended.

     6.18 Public  Utility  Holding  Company Act. None of the Borrower nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary  company"
of a "holding  company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.

     6.19 Environmental  Matters.  (a) The Borrower and each of its Subsidiaries
have complied with, and on the date of such Credit Event are in compliance with,
in all respects,  all applicable  Environmental Laws and the requirements of any
permits issued under such Environmental Laws except such  noncompliances  which,
in the aggregate,  could not  reasonably be expected to have a material  adverse
effect on the  performance,  business,  assets,  nature of assets,  liabilities,
operations,  properties,  condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries  taken as a whole.  There are no past, pending or,
to the best knowledge of the Borrower,  threatened material Environmental Claims
against the Borrower or any of its  Subsidiaries or any Real Property  currently
owned or  operated  by the  Borrower  or any of its  Subsidiaries.  There are no
facts,  circumstances,  conditions  or  occurrences  concerning  the business or
operations  of the Borrower or any of its  Subsidiaries  or any Real Property or
facility  at any time  owned,  operated  or used by the  Borrower  or any of its
Subsidiaries  or, to the knowledge of the Borrower,  any property  adjoining any
such Real Property that could reasonably be expected (i) to form the basis of an
Environmental  Claim against the Borrower or any of its Subsidiaries or any Real
Property owned or operated by the Borrower or any of its Subsidiaries or (ii) to
cause such Real  Property to be subject to any  restrictions  on the  ownership,
occupancy,  use or transferability of such Real Property under any Environmental
Law except such  Environmental  Claims and restrictions which individually or in
the aggregate could not reasonably be expected to have a material adverse effect
on the performance, business, assets, nature of assets, liabilities, operations,
properties,  condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

     (b) Except  for  immaterial  amounts in  compliance  with  applicable  law,
neither the Borrower nor any of its  Subsidiaries  has, at any time,  generated,
used,  treated,  stored,  transported or released Hazardous  Materials on, to or
from any Real Property at any time owned,  leased or at any time operated by the
Borrower or any of its Subsidiaries.

     (c) To the best knowledge of the Borrower, there are no underground storage
tanks located on any Real  Property  owned or operated by the Borrower or any of
its  Subsidiaries  the existence of which could reasonably be expected to have a
material adverse effect on the performance,  business, assets, nature of assets,
liabilities,  operations,  properties,  condition  (financial  or  otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.

     6.20 Labor  Relations.  None of the Borrower nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
material adverse effect on the Borrower and its  Subsidiaries  taken as a whole.
There is (i) no significant  unfair labor practice complaint pending against the
Borrower or any of its  Subsidiaries  or, to the best knowledge of the Borrower,
threatened against any of them, before the National Labor Relations

                                       43

<PAGE>

Board,  and no  significant  grievance  or  significant  arbitration  proceeding
arising  out of or under  any  collective  bargaining  agreement  is so  pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower,  threatened against any of them and (ii) no significant strike,  labor
dispute,  slowdown  or  stoppage  pending  against  the  Borrower  or any of its
Subsidiaries or, to the best knowledge of the Borrower,  threatened  against the
Borrower or any of its Subsidiaries.

     6.21 Patents, Licenses, Franchises and Formulas. (a) The Borrower, together
with its  Subsidiaries,  has a license to use or otherwise has the right to use,
free and clear of pending or threatened Liens, all the material patents,  patent
applications, trademarks, service marks, trade names, trade secrets, copyrights,
proprietary information, computer programs, data bases, licenses, franchises and
formulas, or rights with respect to the foregoing  (collectively,  "Intellectual
Property"),  and has obtained all licenses and other rights of whatever  nature,
necessary for the present  conduct of its business,  without any known  conflict
with the rights of others which, or the failure to obtain which, as the case may
be,  could  reasonably  be  expected  to have a material  adverse  effect on the
performance,  business,  assets,  nature  of  assets,  liabilities,  operations,
properties,  condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

     (b) Neither the Borrower nor any of its  Subsidiaries  has knowledge of any
claim  by any  third  party  contesting  the  validity,  enforceability,  use or
ownership of the Intellectual  Property,  or of any existing state of facts that
would support a claim that use by the Borrower or any of its Subsidiaries of any
such Intellectual  Property has infringed or otherwise violated any Intellectual
Property  right  of any  other  Person  and that to the  best  knowledge  of the
Borrower and its Subsidiaries no claim is threatened except for such claims that
could not  individually  or in the  aggregate  reasonably  be expected to have a
material adverse affect on the performance,  business, assets, nature of assets,
liabilities,  operations,  properties,  condition  (financial  or  otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.

     6.22  Indebtedness.  Schedule X sets forth a true and complete  list of all
Indebtedness (other than the Loans) of the Borrower and each of its Subsidiaries
as of the Restatement  Effective Date after giving effect to the Transaction and
the other transactions  contemplated  hereby (the "Existing  Indebtedness"),  in
each case showing the aggregate  amount  thereof and the name of the  respective
obligor and any other entity which directly or indirectly  guaranteed such debt.
None of the  Existing  Indebtedness  was  incurred  in  connection  with,  or in
contemplation of, the Transaction or the other transactions contemplated hereby.

     6.23 Restrictions on or Relating to Subsidiaries.  There does not exist any
encumbrance  or restriction on the ability of (i) any Subsidiary of the Borrower
to pay  dividends or make any other  distributions  on its capital  stock or any
other  interest or  participation  in its profits  owned by the  Borrower or any
Subsidiary of the Borrower, or to pay any Indebtedness owed to the Borrower or a
Subsidiary of the Borrower, (ii) any Subsidiary of the Borrower to make loans or
advances to the  Borrower  or any of the  Borrower's  Subsidiaries  or (iii) any
Subsidiary  of the Borrower to transfer any of its  properties  or assets to the
Borrower or any  Subsidiary of the  Borrower,  except for such  encumbrances  or
restrictions  existing  under  or by  reason  of (x)  applicable  law,  (y) this
Agreement and the other Credit Documents and (z)

                                       44

<PAGE>

customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or a Subsidiary of the Borrower.

     6.24  Foreign   Pension  Plans.   Neither  the  Borrower  nor  any  of  its
Subsidiaries  has  maintained,  currently  maintains or will  maintain a Foreign
Pension Plan without the consent of the Agent and the Required Banks.

     6.25 The Transaction.  All aspects of the Transaction have been effected in
all material  respects in accordance  with the Credit  Documents and  applicable
law. At the time of  consummation  thereof,  all consents and  approvals of, and
filings  and  registrations  with,  and all other  actions  in  respect  of, all
governmental  agencies,  authorities or  instrumentalities  required in order to
consummate the Transaction shall have been obtained,  given,  filed or taken and
are in full force and effect (or effective  judicial relief with respect thereto
has been obtained). All applicable waiting periods with respect thereto have or,
prior to the time when required,  will have, expired without, in all such cases,
any action being taken by any competent  authority which restrains,  prevents or
imposes  material  adverse  conditions upon the consummation of the Transaction.
Additionally,  at the time of  consummation  thereof,  there  does not exist any
judgment,   order  or  injunction   prohibiting  or  imposing  material  adverse
conditions upon the consummation of the Transaction.

     6.26  Concentration  Account.  Schedule  V sets  forth a true and  complete
description  of the  Concentration  Account  maintained  with the  Concentration
Account  Bank by the Borrower  and each of its  Subsidiaries.  Each Credit Party
represents  and  warrants  that it does  not now  maintain,  and will not in the
future maintain,  any other Concentration Account with any Concentration Account
Bank other than the applicable  Concentration Account;  provided,  however, that
each such  Credit  Party  shall be  permitted  to  establish  new  Concentration
Accounts pursuant to the terms of the Security Agreement.

     6.27 Material Contracts. All Material Contracts of the Borrower and each of
its Subsidiaries as of the Restatement Effective Date are listed on Schedule XI.

     6.28 Business Centers; Owners. Set forth on Schedule XIII is a list of each
of the  Borrower's  business  centers as of the date hereof,  and identifies the
owners of each such business center,  those that are owned by limited  liability
companies,  and those that Borrower or any of its Subsidiaries  manages pursuant
to a management contract.

     6.29 Year 2000  Reprogramming.  Any  reprogramming  required  to permit the
proper functioning,  in and following the Year 2000, of the Borrower's or any of
its  Subsidiaries' (i) computer systems and (ii) equipment  containing  embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's systems interface) and the testing of all such systems and equipment,
as so  reprogrammed,  has been  completed by June 30, 1999,  except that certain
non-mission  critical  issues and  testing  has not been  completed  but will be
completed by September 30, 1999. The costs to the Borrower of such reprogramming
and  testing  and  of the  reasonably  foreseeable  consequences  of  Year  2000
(including, without limitation,  reprogramming errors and the failure of others'
systems  or  equipment)  could not  reasonably  be  expected  to have a material
adverse  effect  on  the  performance,   business,  assets,  nature  of  assets,
liabilities,  operations,  properties,  condition  (financial  or  otherwise) or
prospects

                                       45

<PAGE>

of the Borrower and its  Subsidiaries  taken as a whole.  Except for such of the
reprogramming  referred to in the preceding  sentence as may be  necessary,  the
computer and management information systems of the Borrower and its Subsidiaries
are, and with ordinary course  upgrading and maintenance will continue to be for
the  term  of  this  Agreement,  sufficient  to  permit  the  Borrower  and  its
Subsidiaries  to conduct  their  business  without such  conduct  resulting in a
material adverse effect on the performance,  business, assets, nature of assets,
liabilities,  operations,  properties,  condition  (financial  or  otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.

     6.30 Immaterial  Subsidiary.  The Borrower's ownership interest in ALLIANCE
Business Centers  National Sales Company,  Inc. has a book value and fair market
value of less than $40,000 and ALLIANCE Business Centers National Sales Company,
Inc. is not a party to any material contracts effecting Borrower (other than the
Shareholders  Agreement,  dated September 27, 1997 and amended as of October 23,
1998, among EOG Marketing, Inc., OTG, Inc. and Arbor National Sales, Inc.).

     Section 7. Affirmative Covenants. The Borrower covenants and agrees that on
and after the Restatement  Effective Date and until the Total Commitment and all
Letters of Credit have  terminated and the Loans and Notes and Unpaid  Drawings,
together with interest,  Fees and all other Obligations  incurred  hereunder and
thereunder, are paid in full:

     7.01 Information Covenants. The Borrower will furnish to each Bank:

          (a) Monthly Reports. Within 30 days after the end of each fiscal month
     other than the last such month of any fiscal  quarter of the Borrower,  the
     consolidated  financial  statements of the Borrower and its Subsidiaries as
     at the end of such month and for the  elapsed  portion  of the fiscal  year
     ended with the last day of such month setting forth comparative figures for
     the  corresponding  month and  elapsed  portion of such fiscal year for the
     prior fiscal year and comparable  budgeted  figures for such period as well
     as a management discussion and analysis of such results, all of which shall
     be certified by the chief financial  officer or controller of the Borrower,
     subject to normal year-end audit adjustments.

          (b) Quarterly Financial Statements.  Within 45 days after the close of
     each of the first three quarterly accounting periods in each fiscal year of
     the Borrower, the consolidated financial statements of the Borrower and its
     Subsidiaries  as at the end of such  quarterly  period  for such  quarterly
     period and for the  elapsed  portion of the fiscal year ended with the last
     day of such  quarterly  period,  in each  case  setting  forth  comparative
     figures for the  related  periods in the prior  fiscal year and  comparable
     budgeted  figures for such period as well as a  management  discussion  and
     analysis  of such  results,  all of which shall be  certified  by the chief
     financial officer or controller of the Borrower, subject to normal year-end
     audit adjustments.

          (c)  Annual  Financial  Statements.  Within 90 days after the close of
     each  fiscal  year of the  Borrower,  the  consolidated  and  consolidating
     balance sheets of the Borrower and its  Subsidiaries  as at the end of such
     fiscal year and the related consolidated and

                                       46

<PAGE>

     consolidating statements of operations, stockholders' equity and cash flows
     for  such  fiscal  year  and  setting  forth  comparative  figures  for the
     preceding  fiscal year and comparable  budgeted figures for such period and
     certified,  (x) in the case of the consolidating  statements,  by the chief
     financial  officer or controller of the Borrower and (y) in the case of the
     consolidated financial statements of the Borrower and its Subsidiaries,  by
     PricewaterhouseCoopers  LLP  or  any  other  independent  certified  public
     accountants of recognized  national standing  reasonably  acceptable to the
     Required  Banks,  together with a signed  opinion of such  accounting  firm
     (which  opinion  shall not be qualified as to the scope of the audit or the
     status of the Borrower or any Subsidiary as a going concern in any respect)
     stating that in the course of its regular audit of the financial statements
     of the Borrower  which audit was  conducted in  accordance  with  generally
     accepted auditing standards,  such accounting firm obtained no knowledge of
     any Default or Event of Default which has occurred and is continuing or, if
     in the opinion of such  accounting  firm such a Default or Event of Default
     has occurred and is continuing, a statement as to the nature thereof.

          (d)  Management  Letters.  Promptly  after the receipt  thereof by the
     Borrower  or any of its  Subsidiaries,  a copy of any  "management  letter"
     received by the  Borrower  or any of its  Subsidiaries  from its  certified
     public accountants.

          (e) Budgets.  As soon as available  but in no event later than 30 days
     after the first day of each fiscal year of the  Borrower,  a budget for the
     Borrower and its Subsidiaries in form customarily  prepared by the Borrower
     (including  budgeted  statements of earnings as well as sources and uses of
     cash and balance sheets and budgeted openings of new business centers which
     may be made  available on a quarterly  basis only) prepared by the Borrower
     for each calendar  month of such fiscal year prepared in reasonable  detail
     with appropriate  presentation and discussion of the principal  assumptions
     upon which such  budgets are based,  accompanied  by the  statement  of the
     chief  financial  officer or controller of the Borrower to the effect that,
     to the best of his knowledge,  the budget is a reasonable  estimate for the
     period covered thereby.

          (f)  Officer's  Certificates.  At  the  time  of the  delivery  of the
     financial  statements  provided  for in  Section  7.01(a),  (b) and (c),  a
     certificate of the chief financial officer or controller of the Borrower to
     the  effect  that no  Default  or  Event of  Default  has  occurred  and is
     continuing  or, if any  Default or Event of  Default  has  occurred  and is
     continuing,  specifying the nature and extent thereof,  which  certificate,
     (x) in the case of  certificates  delivered  pursuant to Section 7.01(b) or
     (c),  shall set forth the  calculations  required to establish  whether the
     Borrower was in  compliance  with the  provisions of Sections  2.03,  3.02,
     7.15, 8.02, 8.04, 8.05 and 8.08 through 8.12,  inclusive at the end of such
     fiscal  quarter  or  year,  as the  case  may be,  and  (y) in the  case of
     certificates  delivered  pursuant to Section 7.01(c),  the amount of Excess
     Cash Flow for the relevant Excess Cash Flow Payment Period.

          (g) Notice of Default or  Litigation.  (A) Promptly,  and in any event
     within three  Business  Days after an officer of the Borrower or any of its
     Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any
     event which constitutes a Default or Event of Default,  (ii) any litigation
     or governmental investigation or proceeding

                                       47

<PAGE>

     pending (x) against the Borrower or its Subsidiaries which could reasonably
     be expected to materially and adversely affect the  performance,  business,
     assets, nature of assets, liabilities,  operations,  properties,  condition
     (financial or otherwise) or prospects of the Borrower and its  Subsidiaries
     taken as a whole or (y) with  respect to any Credit  Document and (iii) any
     other event which could  reasonably be expected to materially and adversely
     affect the performance,  business,  assets, nature of assets,  liabilities,
     operations,  properties, condition (financial or otherwise) or prospects of
     the Borrower and its Subsidiaries  taken as a whole.  (B) Promptly,  and in
     any event within five Business Days after an officer of the Borrower or any
     of its Subsidiaries  obtains knowledge thereof,  notice of (i) any material
     default of the Borrower or any of its Subsidiaries under any material lease
     under which the  Borrower or any of its  Subsidiaries  is a lessee and (ii)
     any termination, renewal, expiration or entering into of any material lease
     under which the Borrower or any of its Subsidiaries is or will be a lessee.

          (h) Other  Reports and Filings.  Promptly upon  transmission  thereof,
     copies of any financial information,  proxy materials and other information
     and reports,  if any, which any Credit Party or any of its Subsidiaries (x)
     has filed with the  Securities  and Exchange  Commission  or any  successor
     thereto  (the  "SEC") or (y) has  delivered  to holders of, or any agent or
     trustee  with  respect to,  Indebtedness  of any Credit Party or any of its
     Subsidiaries in its capacity as such a holder, agent, or trustee.

     (i)  Environmental  Matters.  Promptly  upon, and in any event within three
     Business  Days  after  an  officer  of  the  Borrower  or  of  any  of  its
     Subsidiaries  obtains  knowledge  thereof,  notice of any of the  following
     environmental matters (i) any pending or threatened material  Environmental
     Claim against the Borrower or any of its  Subsidiaries or any Real Property
     owned or operated at any time by the  Borrower or any of its  Subsidiaries;
     (ii) any condition or occurrence on or arising from any Real Property owned
     or operated at any time by the Borrower or any of its Subsidiaries that (a)
     could  reasonably be anticipated to result in a material  noncompliance  by
     the  Borrower  or any of its  Subsidiaries  with  any  material  applicable
     Environmental Law, or (b) could reasonably be anticipated to form the basis
     of a  material  Environmental  Claim  against  the  Borrower  or any of its
     Subsidiaries  or any Real Property owned or operated by the Borrower or any
     of its Subsidiaries; (iii) any condition or occurrence on any material Real
     Property owned or operated by the Borrower or any of its Subsidiaries  that
     could  reasonably be  anticipated to cause such Real Property to be subject
     to  any  material  restrictions  on  the  ownership,   occupancy,   use  or
     transferability of such Real Property under any Environmental Law; and (iv)
     the taking of any  removal or  remedial  action in  response  to a material
     Release or material threatened Release or the actual or alleged presence of
     any Hazardous  Material on or from any Real  Property  owned or operated at
     any  time  by the  Borrower  or any of its  Subsidiaries  in  each  case as
     required  by  any   Environmental   Law  or  any   governmental   or  other
     administrative agency. All such notices shall describe in reasonable detail
     the nature of the claim, investigation, condition, occurrence or removal or
     remedial action and the Borrower or such Subsidiary's  response thereto. In
     addition,  the Borrower  will provide the Banks with copies of all material
     communications  with any  government  or  governmental  agency  relating to
     material Environmental Claims, all material  communications with any person
     relating to material Environmental Claims, and

                                       48

<PAGE>

     such  detailed  reports of any  Environmental  Claim as may  reasonably  be
     requested by the Required Banks.

          (j) Annual  Meetings  with  Banks.  Within 120 days after the close of
     each fiscal year of the Borrower, the Borrower shall, at the request of the
     Agent or Required Banks, hold a meeting (at a mutually  agreeable  location
     and time) with all Banks who choose to attend such meeting at which meeting
     shall be reviewed the financial results of the previous fiscal year and the
     financial  condition of the Borrower and its  Subsidiaries  and the budgets
     presented for the current fiscal year of the Borrower and its Subsidiaries.

          (k) Reconciliation of Accrued Rent Liabilities. In connection with any
     financial   information   furnished  by  the  Borrower   which  contains  a
     calculation  of  Consolidated  EBITDA,  the  Borrower  shall also furnish a
     statement reconciling any increase or decrease in accrued rent liabilities.

          (l) Other  Information.  From time to time, such other  information or
     documents  (financial or otherwise) with respect to any Credit Party or any
     of its  Subsidiaries,  as the Agent,  or the Required  Banks may reasonably
     request.

     7.02 Books, Records and Inspections. The Borrower will, and will cause each
of its  Subsidiaries  to, keep proper books of record and account in which full,
true and correct entries,  in conformity with United States  generally  accepted
accounting principles and all requirements of law, shall be made of all dealings
and transactions in relation to its business and activities.  The Borrower will,
and will cause each of its  Subsidiaries  to,  permit  officers  and  designated
representatives of the Agent or any Bank to visit and inspect, under guidance of
officers of the Borrower or of such  Subsidiary,  any of the  properties  of the
Borrower or such Subsidiary, and to examine the books of account of the Borrower
or such  Subsidiary  and  discuss  the  affairs,  finances  and  accounts of the
Borrower or of such  Subsidiary  with, and be advised as to the same by, its and
their  officers,  all at  such  reasonable  times  and  intervals  and  to  such
reasonable extent as the Agent or such Bank may request.

     7.03 Maintenance of Property,  Insurance. (a) Schedule II sets forth a true
and complete listing of all insurance maintained by the Borrower and each of its
Subsidiaries as of the  Restatement  Effective Date. The Borrower will, and will
cause each of its  Subsidiaries  to, (i) keep all material  property  useful and
necessary in its business in good working order and condition (ordinary wear and
tear excepted),  (ii) maintain with  financially  sound and reputable  insurance
companies key-man life insurance,  liability  insurance and insurance on all its
property  in at least  such  amounts  and  against  at least  such  risks as are
described on Schedule II and (iii) furnish to each Bank,  upon written  request,
full  information  as to the insurance  carried.  The provisions of this Section
7.03  shall be  deemed  to be  supplemental  to,  but not  duplicative  of,  the
provisions  of any of the Security  Documents  that require the  maintenance  of
insurance.

     (b) The  Borrower  will at all  times  keep,  and  will  cause  each of its
Subsidiaries to keep, its property insured in favor of the Collateral Agent, and
all policies  (including mortgage policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other  insurance  maintained by
the Borrower or its Subsidiaries  (other than employee  benefit  insurance)) (i)
shall be endorsed to the Collateral Agent's satisfaction for the benefit of the

                                       49

<PAGE>

Collateral Agent (including,  without limitation, by naming the Collateral Agent
as loss  payee and naming the  Collateral  Agent,  the Agent and each Bank as an
additional  insured)  with  respect to  Collateral,  (ii) shall  state that such
insurance  policies shall not be cancelled or revised in a manner adverse to the
Banks without 30 days' prior written notice thereof by the respective insurer to
the  Collateral  Agent,  (iii)  shall  provide  that  the  respective   insurers
irrevocably  waive  any  and all  rights  of  subrogation  with  respect  to the
Collateral  Agent,  (iv) shall  contain the standard  noncontributory  mortgagee
clause  endorsement  in favor of the  Collateral  Agent  with  respect to hazard
insurance  coverage,  (v)  shall  provide  that  any  losses  shall  be  payable
notwithstanding  (A)  any  act  or  neglect  of  the  Borrower  or  any  of  its
Subsidiaries,  (B) the  occupation  or use of the  properties  for purposes more
hazardous  than those  permitted by the terms of the  respective  policy if such
coverage is obtainable at commercially  reasonable rates and is of the kind from
time to time  customarily  insured  against by Persons  owning or using  similar
property  and in such amounts as are  customary,  (C) any  foreclosure  or other
proceeding  relating to the insured properties or (D) any change in the title to
or ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent. If the Borrower or any of its Subsidiaries shall fail
to insure its property in accordance  with this Section 7.03, or if the Borrower
or any of its  Subsidiaries  shall fail to endorse and  deposit all  policies or
certificates  with respect  thereto,  the Collateral  Agent shall have the right
(but shall be under no  obligation)  to procure such  insurance and the Borrower
jointly and severally  agrees,  to reimburse the Collateral  Agent for all costs
and expenses of procuring such insurance.

     7.04 Corporate Franchises. The Borrower will do, and will cause each of its
Subsidiaries  to do or cause to be done,  all things  necessary  to preserve and
keep in full force and effect its existence and its rights, franchises, licenses
and patents; provided,  however, that nothing in this Section 7.04 shall prevent
(x) the  withdrawal  by the  Borrower or any  Subsidiary  of the Borrower of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
could not  reasonably  be  expected  to have a  material  adverse  effect on the
performance,  business,  assets,  nature  of  assets,  liabilities,  properties,
operations,  condition (financial or otherwise) or prospects of the Borrower and
its  Subsidiaries  taken as a whole, or (y) the dissolution of any Subsidiary of
the Borrower if no Permitted  Business is run in connection with such Subsidiary
and such dissolution could not reasonably be expected to have a material adverse
effect on the  performance,  business,  assets,  nature of assets,  liabilities,
properties,  operations,  condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.

     7.05 Compliance with Statutes,  etc. The Borrower will, and will cause each
of its  Subsidiaries  to, comply with all applicable  statutes,  regulations and
orders of, and all applicable  restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property except such noncompliances as could not,  individually or in the
aggregate,  reasonably  be  expected  to have a material  adverse  effect on the
performance,  business,  assets,  nature  of  assets,  liabilities,  operations,
properties,  condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

     7.06 Compliance with Environmental  Laws. (a) The Borrower will comply, and
will cause each of its Subsidiaries to comply, in all material respects with all
Environmental  Laws  applicable to ownership or use of the Real  Property,  will
promptly  pay or cause the  Borrower to pay all costs and  expenses  incurred in
such compliance, and will keep or cause to be

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<PAGE>

kept all such Real  Properties  free and clear of any Liens imposed  pursuant to
such Environmental Laws. None of the Borrower nor any Subsidiary of the Borrower
will  generate,  use,  treat,  store,  release  or  dispose  of, or  permit  the
generation, use, treatment,  storage, Release or disposal of Hazardous Materials
on any Real  Property,  or transport or permit the  transportation  of Hazardous
Materials to or from any Real Property, other than in compliance in all material
respects with applicable law.

     (b) At the request of the Agent or the Required  Banks at any time and from
time to time during the existence of this Agreement:  (i) if an Event of Default
exists under this Agreement,  (ii) upon the reasonable  belief by the Agent that
the  Borrower or any of its  Subsidiaries  has breached  any  representation  or
covenant  herein with  respect to any  environmental  matters and such breach is
continuing,  or (iii) in the event  notice is  provided  under  Section  7.01(i)
herein,  the Borrower will provide,  at its sole cost and expense (or will cause
the  relevant  Subsidiary  to  provide  at  its  sole  cost  and  expense),   an
environmental  site assessment  report  reasonable in scope  concerning any Real
Property of the  Borrower  or its  Subsidiaries,  prepared  by an  environmental
consulting  firm approved by the Agent and the Required  Banks,  indicating  the
presence or Release of Hazardous  Materials on or from any of the Real  Property
and the potential cost of any removal or remedial  action in connection with any
Hazardous Materials on such Real Property.  If the Borrower fails to provide the
same  after  thirty  (30) days  notice,  the  Agent may order the same,  and the
Borrower  shall  grant  and  hereby  grants to the Agent and the Banks and their
agents  access to such Real Property and  specifically  grants the Agent and the
Banks an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment all at the Borrower's  expense,  which assessments,
if obtained, will be provided to the Borrower.

     7.07  ERISA.  As soon as possible  and, in any event,  within ten (10) days
after the Borrower,  any Subsidiary of the Borrower or any ERISA Affiliate knows
or has reason to know of the  occurrence of any of the  following,  the Borrower
will deliver to each of the Banks a certificate of the chief  financial  officer
of the Borrower  setting  forth the full details as to such  occurrence  and the
action,  if any, that the Borrower,  such  Subsidiary or such ERISA Affiliate is
required or proposes to take,  together with any notices required or proposed to
be  given  to or  filed  with or by such  Borrower,  such  Subsidiary,  the Plan
administrator  or  such  ERISA  Affiliate  to or  with  the  PBGC  or any  other
government  agency, or a Plan or Multiemployer  Plan participant and any notices
received by such Borrower,  such  Subsidiary or ERISA Affiliate from the PBGC or
any other government  agency,  or a Plan or Multiemployer  Plan participant with
respect thereto: that a Reportable Event has occurred (except to the extent that
the Borrower has previously delivered to the Banks a certificate and notices (if
any)  concerning  such  event  pursuant  to  the  next  clause  hereof);  that a
contributing  sponsor  (as  defined in Section  4001(a)(13)  of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting  requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation  Section  4043 is  reasonably  expected to occur with respect to such
Plan within the  following  30 days;  that an  accumulated  funding  deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA,  has been
incurred or an application  may be or has been made for a waiver or modification
of the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA  with  respect  to a Plan or  Multiemployer  Plan;  that any
contribution required to be made

                                       51

<PAGE>

with respect to a Plan, Multiemployer Plan, or Foreign Pension Plan has not been
timely made;  that a Plan or  Multiemployer  Plan has been or may be terminated,
reorganized,  partitioned or declared  insolvent under Title IV of ERISA; that a
Plan or Multiemployer Plan has an Unfunded Current  Liability;  that proceedings
may be or have been instituted to terminate or appoint a trustee to administer a
Plan  which  is  subject  to  Title  IV of  ERISA;  that a  proceeding  has been
instituted pursuant to Section 515 of ERISA to collect a delinquent contribution
to a Multiemployer  Plan;  that the Borrower,  any Subsidiary of the Borrower or
any ERISA  Affiliate  will or may incur any liability  (including  any indirect,
contingent,  or secondary  liability) to or on account of the  termination of or
withdrawal from a Plan or  Multiemployer  Plan under Section 4062,  4063,  4064,
4069,  4201,  4204 or 4212 of  ERISA or with  respect  to a Plan  under  Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA or with  respect to a group  health plan (as defined in Section  607(1) of
ERISA or Section  4980B(g)(2)  of the Code) under  Section 4980B of the Code; or
that the  Borrower or any  Subsidiary  of the  Borrower  may incur any  material
liability  pursuant to any employee  welfare benefit plan (as defined in Section
3(1) of ERISA) that  provides  benefits  to retired  employees  or other  former
employees  (other  than as  required  by  Section  601 of  ERISA) or any Plan or
Foreign  Pension Plan.  The Borrower will deliver to each of the Banks copies of
any records,  documents or other  information that must be furnished to the PBGC
with respect to any Plan  pursuant to Section 4010 of ERISA.  The Borrower  will
also  deliver  to each of the Banks a  complete  copy of the  annual  report (on
Internal  Revenue  Service Form  5500-series)  of each Plan  (including,  to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements,  certificates,  schedules and information) required
to be filed with the Internal Revenue  Service.  In addition to any certificates
or notices delivered to the Banks pursuant to the first sentence hereof,  copies
of annual reports and any records, documents or other information required to be
furnished to the PBGC or any other government  agency,  and any material notices
received by the Borrower,  any Subsidiary of the Borrower or any ERISA Affiliate
with  respect  to any  Plan  or  Foreign  Pension  Plan  or  received  from  any
governmental  agency or plan administrator or sponsor or trustee with respect to
any  Multiemployer  Plan, shall be delivered to the Banks no later than ten (10)
days after the date such annual report has been filed with the Internal  Revenue
Service or such records,  documents and/or information has been furnished to the
PBGC or any other  government  agency or such  notice has been  received  by the
Borrower, the Subsidiary or the ERISA Affiliate, as applicable. The Borrower and
each of its applicable  Subsidiaries shall ensure that all Foreign Pension Plans
administered  by it or into  which it makes  payments  obtains  or  retains  (as
applicable)  registered  status under and as required by  applicable  law and is
administered  in a  timely  manner  in  all  respects  in  compliance  with  all
applicable laws except where the failure to do any of the foregoing would not be
reasonably  likely to result in a material  adverse  effect  upon the  business,
operations,  condition  (financial or otherwise) or prospects of the Borrower or
any Subsidiary of the Borrower.

     7.08 End of Fiscal Years; Fiscal Quarters. The Borrower will cause its, and
each of its  Subsidiaries',  fiscal years to end on December 31 of each year and
each of its, and each of its  Subsidiaries',  first three fiscal quarters end on
March 31, June 30 and September 30.

     7.09 Performance of Obligations.  The Borrower will, and will cause each of
its  Subsidiaries  to,  perform all of its  obligations  under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it is
bound,  except  such  non-performances  as  could  not,  individually  or in the
aggregate, reasonably be expected to have a

                                       52

<PAGE>

material adverse effect on the performance,  business, assets, nature of assets,
liabilities,  operations,  properties,  condition  (financial  or  otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.

     7.10 Payment of Taxes. The Borrower will pay and discharge,  and will cause
each of its  Subsidiaries  to pay and  discharge,  all  taxes,  assessments  and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties  belonging to it, prior to the date on which penalties would
otherwise attach thereto, and all lawful claims which, if unpaid, might become a
lien or charge upon any  properties  of the Borrower or any of its  Subsidiaries
not otherwise  permitted under Section 8.01;  provided that neither the Borrower
nor any of its Subsidiaries  shall be required to pay any such tax,  assessment,
charge,  levy or claim  which is being  contested  in good  faith  and by proper
proceedings  if it has  maintained  adequate  reserves  with respect  thereto in
accordance with generally accepted accounting principles.

     7.11 Interest Rate Protection. The Borrower shall (a) no later than 60 days
following the Restatement  Effective Date enter into arrangements  acceptable to
the Agent  establishing  (I) a maximum interest rate equal to the product of (x)
the Quoted  Rate for a  principal  amount of loans  equal to $60  million for an
interest  period of one month times (y) 1.30 and (II) for an aggregate  notional
amount of at least $60 million for a period of at least three years and (b) upon
the Acquisition Loan Termination Date enter into arrangements  acceptable to the
Agent  establishing  (I) a maximum interest rate equal to the product of (x) the
Quoted  Rate  for a  principal  amount  of loans  equal to 50% of the  aggregate
outstanding  principal  amount  of  Acquisition  Loans on the  Acquisition  Loan
Termination Date (after giving effect to all Acquisition  Loans incurred on such
date)  for an  interest  period  of one  month  times  (y)  1.30 and (II) for an
aggregate  notional  amount of at least an amount equal to 50% of the  aggregate
outstanding  principal  amount  of  Acquisition  Loans on the  Acquisition  Loan
Termination Date (after giving effect to the incurrence of all Acquisition Loans
on such  date)  for a period  of at least 3 years  after  the  Acquisition  Loan
Termination Date.

     7.12 Use of  Proceeds.  All proceeds of the Loans shall be used as provided
in Section 6.08.

     7.13 Year 2000 Reporting.  The Borrower will ensure that any  reprogramming
required to permit the proper  functioning,  in and  following the Year 2000, of
the  Borrower's  or any of its  Subsidiaries'  (i)  computer  systems  and  (ii)
equipment  containing  embedded  microchips  (including  systems  and  equipment
supplied  by others or with  which the  Borrower's  systems  interface)  and the
testing  of all  such  systems  and  equipment,  as so  reprogrammed,  has  been
completed by June 30, 1999,  or in certain  cases as described in Section  6.29,
will be completed by September 30, 1999,  except insofar as the failure to do so
will not have a material  adverse effect on the performance,  business,  assets,
nature of assets, liabilities,  operations,  properties, condition (financial or
otherwise) or prospects of the Borrower and its  Subsidiaries  taken as a whole,
and the Borrower will notify the Agent and any Bank promptly upon  detecting any
failure to achieve Year 2000 computer readiness.  In addition, the Borrower will
provide  the  Agent  and any Bank  with  such  information  about  its Year 2000
computer readiness (including, without limitation, information as to contingency
plans,  budgets and testing  results) as the Agent or such Bank shall reasonably
request.

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<PAGE>

     7.14 Intellectual  Property Rights.  The Borrower will, and will cause each
of its  Subsidiaries to, make all filings in connection with the transfer of the
Intellectual  Property  rights in any  acquisition.  The Borrower will, and will
cause  each of its  Subsidiaries  to,  maintain  in full  force and  effect  all
Intellectual  Property  rights  necessary or  appropriate to the business of the
Borrower  or any  Subsidiary  of the  Borrower  and take no  action  (including,
without limitation,  the licensing of Intellectual Property), or fail to take an
action, as the case may be, in connection with such Intellectual Property rights
which could reasonably be expected to result in a material adverse effect on the
performance,  business,  assets,  nature  of  assets,  liabilities,  properties,
operations,  condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole. The Borrower will, and will cause each of its
Subsidiaries  to,  diligently   prosecute  all  pending  applications  filed  in
connection with seeking or seeking to perfect the  Intellectual  Property rights
and  take  all  other  reasonable  actions  necessary  for  the  protection  and
maintenance of the Intellectual  Property rights necessary or appropriate to the
business of the Borrower or any Subsidiary of the Borrower at all times from and
after the Restatement  Effective Date other than any such actions the failure of
which,  in the  aggregate,  could not  reasonably be expected to have a material
adverse  effect  on  the  performance,   business,  assets,  nature  of  assets,
liabilities,  operations,  properties,  condition  (financial  or  otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.

     7.15  Permitted  Acquisitions.  (a) Subject to the remaining  provisions of
this  Section  7.15  applicable  thereto and the  requirements  contained in the
definition of Permitted Acquisition,  the Borrower and its Subsidiaries may from
time to time after the Restatement Effective Date effect Permitted Acquisitions,
so long as with respect to each Permitted Acquisition:

          (i) the Borrower  demonstrates  that no Default or Event of Default is
     in existence at the time of the consummation of such Permitted  Acquisition
     or would exist after  giving  effect  thereto and all  representations  and
     warranties contained herein and in the other Credit Documents shall be true
     and correct in all  material  respects  with the same effect as though such
     representations  and  warranties  were  made on and as of the  date of such
     Permitted Acquisition (both before and after giving effect thereto);

          (ii) the Borrower shall have given the Agent and the Banks at least 15
     days prior  written  notice of any such  Permitted  Acquisition  (each such
     notice, a "Permitted  Acquisition Notice"),  which notice shall (r) contain
     the  estimated  date  such   Permitted   Acquisition  is  scheduled  to  be
     consummated,  (s)  attach a true and  correct  copy of the  draft  purchase
     agreement,  letter of  intent,  description  of  material  terms or similar
     agreement  executed by the Borrower and the seller in connection  with such
     Permitted  Acquisition,  (t) contain the estimated aggregate purchase price
     of such Permitted Acquisition (including, without limitation, the amount of
     Capitalized  Lease  Obligations  assumed in  connection  with the Permitted
     Acquisition)  and the amount of related costs and expenses and the intended
     method  of  financing   thereof,   (u)  contain  the  estimated  amount  of
     Acquisition  Loans  required  to effect  such  Permitted  Acquisition,  (v)
     contain a description of any Permitted  Earn-Out Debt to be incurred by the
     Borrower in  connection  with such  Permitted  Acquisition  and the maximum
     potential  liability of the Borrower with respect thereto and (w) contain a
     description  of the Permitted  Seller Notes,  the Borrower  Common Stock or
     Seller Preferred Stock to be issued by the Borrower in

                                       54

<PAGE>

     connection with such Permitted Acquisition;  provided, however, that if the
     estimated  aggregate  purchase price (including,  without  limitation,  the
     amount of  Capitalized  Lease  Obligations  assumed in connection  with the
     Permitted   Acquisition)  of  such  Permitted   Acquisition  is  less  than
     $1,000,000,  such  notice need not contain  the  information  described  in
     clause(s)  above  unless  the Agent  requests  such  information;  provided
     further,  however,  in the event that after  delivery of the  documentation
     described in clause (s) above any material  economic terms of the Permitted
     Acquisition  shall be amended in any material way, then promptly after such
     amendment the Borrower shall provide the Agent and the Banks written notice
     of such changes;

          (iii) the Borrower  shall have given the Banks such other  information
     related to the Person or business,  division or product line being acquired
     and the Permitted Acquisition as the Agent shall reasonably request;

          (iv)  (I) as soon as  available  but not  later  than  the date of the
     consummation of such Permitted Acquisition, a copy of the executed purchase
     agreement and all related  agreements,  schedules and exhibits with respect
     to such  Permitted  Acquisition  and  (II) at the time of  delivery  of the
     purchase  agreement,  a certification  from the Borrower as to the purchase
     price for the acquisition  (including,  without  limitation,  the amount of
     Capitalized  Lease  Obligations  assumed in  connection  with the Permitted
     Acquisition)  and the  estimated  amount  of all  related  costs,  fees and
     expenses and that,  except as  described,  there are no other amounts which
     will be payable in connection with the respective Permitted Acquisition;

          (v)  with  respect  to  Permitted  Acquisitions  effected  during  any
     twelve-month period (including Permitted Acquisitions effected under and as
     defined in the Existing Credit Agreement,  the sum (without duplication) of
     (I)  Acquisition  Loans  incurred by the  Borrower  and  Acquisition  Loans
     incurred by the Borrower under the Existing Credit Agreement, (II) the fair
     market value (as  determined in good faith by the Board of Directors of the
     Borrower) of the Borrower  Common  Stock  issued as  consideration  in such
     Permitted Acquisitions, (III) the aggregate amount (determined by using the
     face amount of the debt or the amount  payable at  maturity,  whichever  is
     greater) of Permitted  Seller  Notes  issued by the Borrower in  connection
     with such Permitted  Acquisitions,  (IV) the maximum potential liability of
     the  Borrower  with  respect  to the  Permitted  Earn-Out  Debt  issued  in
     connection with such Permitted Acquisitions,  (V) the aggregate liquidation
     preference of Seller  Preferred  Stock issued by the Borrower in connection
     with such Permitted  Acquisitions and (VI) the amount of Capitalized  Lease
     Obligations  assumed in connection with such Permitted  Acquisitions  shall
     not exceed  $30,000,000  (excluding the Reckson Mergers and other Permitted
     Acquisitions  effected with moneys from the Cash Collateral Account) during
     such rolling  twelve-month  period with the first such period commencing on
     the Original Effective Date;

          (vi)  with  respect  to each  Permitted  Acquisition  (other  than the
     Permitted  Acquisitions  effected  with  moneys  from the  Cash  Collateral
     Account) the sum (without duplication) of (I) Acquisition Loans incurred by
     the  Borrower,  (II) the fair market value (as  determined in good faith by
     the Board of Directors of the Borrower) of the Borrower Common Stock issued
     as consideration in such Permitted Acquisition, (III) the aggregate

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<PAGE>

      amount  (determined  by using the face  amount  of the debt or the  amount
      payable at  maturity,  whichever  is greater) of  Permitted  Seller  Notes
      issued by the Borrower in connection with such Permitted Acquisition, (IV)
      the  maximum  potential  liability  of the  Borrower  with  respect to all
      Permitted   Earn-Out  Debt  issued  in  connection   with  such  Permitted
      Acquisition,  (V) the aggregate liquidation preference of Seller Preferred
      Stock issued by the Borrower in connection with such Permitted Acquisition
      and (VI) the amount of Capitalized Lease Obligations assumed in connection
      with the Permitted Acquisition, shall not exceed $7,500,000;

            (vii) except in connection with Permitted Acquisitions consisting of
      Start-Up Costs,  calculations are made by the Borrower of the Consolidated
      EBITDA of the Person or business,  division or product line being acquired
      pursuant to the respective Permitted Acquisition (determined in accordance
      with the definition of Consolidated  EBITDA contained herein, but treating
      references  therein  and in any other  defined  terms used in  determining
      Consolidated  EBITDA to "the  Borrower"  to instead be  references  to the
      Person or business,  division or product line being  acquired  pursuant to
      the respective Permitted Acquisition), and the amount thereof shall exceed
      $50,000 for the period of four  consecutive  fiscal quarters (taken as one
      accounting  period  and  including  fiscal  quarters  ending  prior to the
      Restatement  Effective  Date) most recently ended prior to the date of the
      Permitted Acquisition (the "Calculation  Period");  provided,  however, in
      the case of  calculations  based on unaudited  financial  statements,  the
      Agent shall be reasonably  satisfied that the Consolidated  EBITDA of such
      Person or business,  division or product line being  acquired  pursuant to
      the respective  Permitted  Acquisition exceeds $50,000 for the Calculation
      Period;  provided  further,  however,  that,  so  long  as  the  Permitted
      Acquisition  Notice  has been given as  required  above and so long as the
      Borrower  has  furnished  the  Agent   information  with  respect  to  the
      Consolidated  EBITDA of such Person or business,  division or product line
      being acquired pursuant to the respective  Permitted  Acquisition,  if the
      Agent has not notified the Borrower on or prior to the fifth  Business Day
      prior to the consummation of the Permitted  Acquisition that the Agent has
      not yet been reasonably satisfied that the $50,000 threshold is satisfied,
      the Agent  shall be deemed  for  purposes  of this  clause  (vii) to be so
      satisfied;

            (viii) the Agent and the Required  Banks shall be satisfied in their
      reasonable  discretion that the proposed  Permitted  Acquisition  will not
      reasonably likely result in materially increased  liabilities  (contingent
      or  otherwise)  of the  Borrower  or any of its  Subsidiaries  other  than
      Permitted  Seller Notes,  Permitted  Earn-Out Debt and  Capitalized  Lease
      Obligations  incurred in accordance  with the provisions of this Agreement
      (including,  without limitation, tax, ERISA or environmental liabilities);
      provided that, so long as the Permitted  Acquisition Notice has been given
      as required  above and so long as the  Borrower has  furnished  each Bank,
      following request by the Agent, information with respect to liabilities of
      the type described in this clause with all  information  so requested,  if
      any Bank has not  notified  the  Borrower  or the Agent on or prior to the
      tenth day prior to the consummation of the Permitted Acquisition that such
      Bank has not yet been  satisfied that the proposed  Permitted  Acquisition
      would  not  be  reasonably  likely  to  result  in  materially   increased
      liabilities of the Borrower or any of its Subsidiaries, such Bank shall be
      deemed for purposes of this clause (viii) to be so satisfied;

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<PAGE>

            (ix)  recalculations are made by the Borrower of compliance with the
      covenant  contained  in  Section  8.11  on a Pro  Forma  Basis,  and  such
      recalculations shall show that such covenant would have been complied with
      throughout the Calculation Period on a Pro Forma Basis;

            (x) the Borrower in good faith believes,  based on calculations made
      by the Borrower,  on a Pro Forma Basis, (as if the Calculation Period were
      the  one-year  period  following  the  date  of  the  consummation  of the
      respective Permitted Acquisition) that the financial covenant contained in
      such  Section  8.11  will  continue  to be met  for the  one  year  period
      following  the  date  of  the  consummation  of the  respective  Permitted
      Acquisition;

            (xi) in no event  may (a) the  aggregate  amount of  Start-Up  Costs
      relating  to  any  Permitted  Acquisition  with  respect  to any  one  new
      executive  office  suite center  exceed  $2,000,000,  (b)  Start-Up  Costs
      constituting  Permitted  Acquisitions  be incurred in connection with more
      than  twenty-four  new  executive  office  centers  (which  shall mean new
      executive  office  centers  that  are  not  open  for  occupancy  on  that
      Restatement  Effective  Date, but exclude the centers  located at Highland
      Oaks, Tampa, Florida, Westshore, Tampa, Florida, and Northpoint,  Orlando,
      Florida) in the aggregate and ten new executive  office centers at any one
      time  (which  shall  mean a new  executive  office  center  for  which the
      Borrower is negotiating a lease and/or preparing for occupancy on or after
      the  Restatement   Effective  Date)  and  (c)  aggregate   Start-Up  Costs
      constituting  Permitted Acquisitions exceed $20,000,000 (excluding amounts
      spent  under the  Existing  Credit  Agreement  and,  subject to the terms,
      conditions and restrictions set forth in this Section 7.15(xi)(a) and (b),
      amounts  to be  funded  out of  proceeds  raised  in the  Permitted  Stock
      Issuances);

            (xii) with respect to each Permitted  Acquisition the Borrower shall
      conduct the  customary  due  diligence  set forth on Schedule  XIV for the
      prior  four  consecutive  fiscal  quarters  which  shall be  performed  in
      accordance  with  standards  established  by  the  American  Institute  of
      Certified Public Accountants;

            (xiii) with  respect to  Permitted  Acquisitions  with an  aggregate
      consideration  equal to or greater than  $3,000,000,  the  Borrower  shall
      engage a "big five" accounting firm or other accounting firm acceptable to
      the Agent to perform financial due diligence set forth on Schedule XIV and
      produce a report of their  findings  which shall be delivered to the Banks
      and be acceptable to the Required  Banks in their sole judgment and to the
      extent a Bank has not indicated in writing within five Business Days after
      receipt of the materials required by this Section 7.15(a)(xiii) that it is
      not  acceptable  to such Bank then it shall be deemed to be  acceptable to
      such Bank; provided, however, that this Section 7.15(xiii) shall not apply
      to  Permitted  Acquisitions  which  have  been  audited  by a  "big  five"
      accounting  firm  within  four  months  prior to the date of  closing of a
      Permitted Acquisition;

            (xiv) the consent of the Agent shall have been obtained with respect
      to such  Permitted  Acquisition  which consent  shall not be  unreasonably
      withheld;  provided that, so long as the Permitted  Acquisition Notice has
      been given as required above and so long

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<PAGE>

      as the Borrower has  otherwise  complied  with this Section  7.15,  if the
      Agent has not notified the Borrower on or prior to the fifth  Business Day
      prior to the consummation of the Permitted Acquisition that the Agent does
      not approve of the Permitted  Acquisition,  then the Agent shall be deemed
      for  purposes of this  clause  (xiv) to have so  approved  such  Permitted
      Acquisition; and

            (xv)  prior  to  the   consummation  of  the  respective   Permitted
      Acquisition,  the  Borrower  shall  furnish  the  Agent  and the  Banks an
      officer's  certificate  executed  by the chief  financial  officer  of the
      Borrower,  certifying as to compliance with the  requirements of preceding
      clauses (i) through  (xiv) and  containing  the  calculations  required by
      preceding clauses (v) through (vii),  (ix), (x) and (xi). The consummation
      of each Permitted  Acquisition shall be deemed to be a representation  and
      warranty by the Borrower that all  conditions  thereto have been satisfied
      and that same is permitted in accordance with the terms of this Agreement,
      which  representation  and warranty shall be deemed to be a representation
      and warranty for all purposes  hereunder,  including,  without limitation,
      Sections 5 and 9.

     (b) At the  time  of  each  Permitted  Acquisition  after  the  Restatement
Effective Date  involving the creation or acquisition of a Subsidiary,  not less
than 100% of the capital stock of such Subsidiary shall be directly owned by the
Borrower or a Guarantor  and such 100% owned by the Borrower or Guarantor  shall
be pledged for the benefit of the Secured  Creditors  pursuant to the applicable
Pledge Agreement or pursuant to a similar agreement satisfactory to the Agent.

     (c) The Borrower shall cause each Subsidiary which is formed to effect,  or
is acquired pursuant to, a Permitted Acquisition after the Restatement Effective
Date to execute and deliver, prior to or on the date of the respective Permitted
Acquisition,  the Subsidiaries  Guaranty (or by an amendment thereto pursuant to
which it shall be a party  thereto)  or a  substantially  similar  guaranty,  in
either case with the  documentation to be in form and substance  satisfactory to
the Agent.

     (d) The  Borrower  shall on the date of a Permitted  Acquisition  after the
Restatement Effective Date, in the case of Permitted  Acquisitions involving the
acquisition  of  assets  by  the  Borrower  (including  Permitted   Acquisitions
constituting  Start-Up  Costs),  or,  in  the  case  of an  acquisition  by  the
respective  Subsidiary,  shall cause the respective  Subsidiary to, grant to the
Collateral  Agent,  for the benefit of the  Secured  Creditors,  first  priority
perfected   security   interests  in  all  property  of  the  Borrower  or  such
Subsidiaries  acquired in connection with the Permitted Acquisition and to take,
or cause such  Subsidiary  to take,  all actions  requested  by the Agent or the
Required Banks (including, without limitation, the obtaining of UCC-11's and the
filing of UCC-1's) in connection  with the granting of such security  interests.
All security  interests  required to be granted pursuant to this Section 7.15(d)
shall  be  granted  pursuant  to such  security  documentation  (which  shall be
substantially  similar to the analogous  Security Documents already executed and
satisfactory  in form and substance to the Agent) and shall (except as otherwise
consented  to by  the  Agent  and  the  Required  Banks)  constitute  valid  and
enforceable  perfected  security  interests  prior to the  rights  of all  third
Persons  and subject to no other Liens  except  such Liens as are  permitted  by
Section 8.01. The security documents and other instruments related thereto shall
be duly recorded or filed in such manner and in such

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<PAGE>

places as are required by law to  establish,  perfect,  preserve and protect the
Liens,  in  favor  of the  Collateral  Agent  for  the  benefit  of the  Secured
Creditors, required to be granted pursuant to the respective Additional Security
Documents and all taxes, fees and other charges payable in connection  therewith
shall be paid in full by the Borrower. At the time of the execution and delivery
of Additional  Security  Documents,  the Borrower shall cause to be delivered to
the  Collateral  Agent such opinions of counsel,  environmental  appraisals  and
other related  documents as may be reasonably  requested by the Collateral Agent
or the Required Banks to assure  themselves  that this Section has been complied
with. All actions  required to be taken by this Section  7.15(d) with respect to
the Additional Collateral shall be completed no later than the date on which the
Permitted Acquisition is effected unless otherwise consented to by the Agent.

     7.16  Registry.  The Borrower  hereby  designates the Agent to serve as its
agent,  solely for purposes of this Section  7.16,  to maintain a register  (the
"Register") on which it will record the Commitments from time to time of each of
the Banks,  the Loans made by each of the Banks and each repayment in respect of
the  principal  amount  of the  Loans  of each  Bank.  Failure  to make any such
recordation,  or any error in such  recordation  shall not affect the Borrower's
obligations in respect of such Loans.  With respect to any Bank, the transfer of
the  Commitments  of such Bank and the rights to the  principal of, and interest
on, any Loan made pursuant to such Commitments shall not be effective until such
transfer is recorded on the  Register  maintained  by the Agent with  respect to
ownership  of such  Commitments  and  Loans and  prior to such  recordation  all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. The registration of an assignment or transfer of
all or part of any  Commitments  and Loans shall be recorded by the Agent on the
Register  only upon the  acceptance  by the  Agent of a  properly  executed  and
delivered  assignment and  assumption  agreement  pursuant to Section  12.04(b).
Coincident  with the delivery of such an assignment and assumption  agreement to
the Agent for  acceptance and  registration  of assignment or transfer of all or
part  of a  Loan,  or as  soon  thereafter  as  practicable,  the  assigning  or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate  principal amount shall be issued to the
assigning  or  transferor  Bank  and/or  the new Bank.  The  Borrower  agrees to
indemnify  the Agent from and against any and all  losses,  claims,  damages and
liabilities of whatsoever  nature which may be imposed on,  asserted  against or
incurred by the Agent in performing its duties under this Section 7.16.

     7.17 Further  Actions.  (a) Each Credit Party shall grant to the Collateral
Agent, for the benefit of the Secured Creditors,  at the request of the Agent or
the Required  Banks,  at any time, a security  interest in any Real  Property or
vehicles  owned by any such  Credit  Party and any other  assets of such  Credit
Party and not already subject to a Security  Document and shall take all actions
requested by the Agent or the Required Banks (including, without limitation, the
obtaining  of  mortgage  policies,  title  surveys  and real  estate  appraisals
satisfying  the  requirements  of all  applicable  laws) in connection  with the
granting of such security interest.

     (b) The security  interests  required to be granted  pursuant to clause (a)
above  shall be  granted  pursuant  to  mortgages,  deeds of trust and  security
agreements, in each case satisfactory in form and substance to the Agent and the
Required Banks,  which mortgages and security  agreements shall create valid and
enforceable  perfected  security  interests  prior to the  rights  of all  third
Persons  and subject to no other Liens  except  such Liens as are  permitted  by
Section 8.01. The mortgages and other  instruments  related thereto and security
agreements shall

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<PAGE>

be duly recorded or filed in such manner and in such places and at such times as
are required by law to establish,  perfect,  preserve and protect the Liens,  in
favor of the Collateral Agent for the benefit of the Secured Creditors, required
to be granted  pursuant to such documents and all taxes,  fees and other charges
payable in connection  therewith  shall be paid in full by the Borrower.  At the
time of the execution  and delivery of the  additional  documents,  the Borrower
shall cause to be delivered to the  Collateral  Agent such  opinions of counsel,
mortgage policies, title surveys, real estate appraisals,  certificates of title
and other related  documents as may be reasonably  requested by the Agent or the
Required  Banks to assure  themselves  that this Section 7.17 has been  complied
with.

     (c) Each Credit Party agrees that each action required by Section  7.17(a),
or (b) shall be completed within 60 days of the date such action is requested to
be taken.

     7.18 Concentration Account. On the Restatement Effective Date, the Borrower
shall,  and shall have caused each of its Subsidiaries to, have duly authorized,
executed and delivered a  Concentration  Account  Consent Letter in such form as
approved  by the  Collateral  Agent  (each as amended  and  restated,  modified,
amended or  supplemented  from time to time in accordance with the terms thereof
and hereof, a "Concentration  Account Consent Letter") with the Collateral Agent
and the Concentration Account Bank, acknowledging that the Concentration Account
listed on Schedule V and maintained at the  Concentration  Account Bank is under
the exclusive  dominion and control of the Collateral Agent and that all moneys,
instruments and other securities deposited in such Concentration  Account are to
be held by the  Concentration  Account  Bank for the  benefit of the  Collateral
Agent.  Each Credit Party represents and warrants that it does not now maintain,
and will not in the future maintain,  any other  Concentration  Account with any
Concentration  Account  Bank other than the  applicable  Concentration  Account;
provided,  however,  that each such Credit Party shall be permitted to establish
new Concentration Accounts pursuant to the terms of the Security Agreement.

     Section 8. Negative  Covenants.  The Borrower hereby  covenants that on and
after the  Restatement  Effective  Date and until the Total  Commitment  and all
Letters  of Credit  have  terminated  and the  Loans  and  Notes and all  Unpaid
Drawings,  together  with  interest,  Fees and all  other  Obligations  incurred
hereunder and thereunder, are paid in full:

     8.01  Liens.  The  Borrower  will  not,  and  will  not  permit  any of its
Subsidiaries to, create,  incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal,  tangible or intangible) of
the  Borrower  or  any of its  Subsidiaries,  whether  now  owned  or  hereafter
acquired,  or sell any such property or assets  subject to an  understanding  or
agreement,  contingent  or  otherwise,  to  repurchase  such  property or assets
(including sales of accounts  receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing  statement under the UCC or any other similar notice of Lien under
any similar  recording or notice  statute;  provided that the provisions of this
Section  8.01 shall not prevent the  Borrower  or any of its  Subsidiaries  from
creating,  incurring,  assuming or  permitting  the  existence of the  following
(liens described below are herein referred to as "Permitted Liens"):

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<PAGE>

          (i)  inchoate  Liens  with  respect  to  the  Borrower  or  any of its
     Subsidiaries  for taxes  (including  social security charges in France) not
     yet due or Liens for taxes  (including  social security  charges in France)
     being  contested  in good faith and by  appropriate  proceedings  for which
     adequate  reserves  have been  established  in  accordance  with  generally
     accepted accounting principles;

          (ii)  unperfected  Liens in  respect  of  property  or  assets  of the
     Borrower  or any of its  Subsidiaries  imposed  by law or,  in the  case of
     landlord liens,  pursuant to contractual rights, which were incurred in the
     ordinary  course of business  and do not secure  Indebtedness  for borrowed
     money,  such as carriers',  warehousemen's,  materialmen's,  mechanics' and
     landlords'  liens and other similar Liens arising in the ordinary course of
     business, and (x) which do not in the aggregate materially detract from the
     value of the Borrower's or any of its  Subsidiaries'  property or assets or
     materially  impair the use thereof in the  operation of the business of the
     Borrower or its Subsidiaries or (y) which are being contested in good faith
     by appropriate proceedings, which proceedings have the effect of preventing
     the forfeiture or sale of the property or assets subject to any such Lien;

          (iii) Liens of the  Borrower or its  Subsidiaries  in existence on the
     Restatement  Effective  Date which are  listed,  and the  property  subject
     thereto  described,  on Schedule XII, but only to the  respective  date, if
     any, set forth in such Schedule XII for the removal and  termination of any
     such Liens except, that, any Lien may be continued or renewed in connection
     with the refinancing of any Indebtedness secured thereby, provided that (x)
     such Lien does not  encumber  additional  property,  and (y) the  principal
     amount of Indebtedness secured by such Lien is not increased;

          (iv) Liens created pursuant to the Security Documents;  (v) easements,
     rights-of-way,  restrictions,  encroachments  and other similar  charges or
     encumbrances  on the  property of the  Borrower or any of its  Subsidiaries
     arising in the ordinary  course of business and not materially  interfering
     with  the  conduct  of  the   business  of  the  Borrower  or  any  of  its
     Subsidiaries;

          (vi) Liens on property of the  Borrower and its  Subsidiaries  subject
     to, and securing  only,  Capitalized  Lease  Obligations to the extent such
     Capitalized  Lease  Obligations  are  permitted  by  Section  8.05(iii)  or
     8.05(vi);  provided  that such Liens  only  serve to secure the  payment of
     Indebtedness  arising under such Capitalized  Lease Obligation and the Lien
     encumbering the asset giving rise to the Capitalized  Lease Obligation does
     not encumber any other asset of the Borrower or any of its Subsidiaries;

          (vii) Liens  (other than any Lien imposed by ERISA) on property of the
     Borrower  or any of its  Subsidiaries  incurred  or  deposits  made  in the
     ordinary course of business in connection  with (x) workers'  compensation,
     unemployment  insurance and other types of social security or (y) 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); provided that the aggregate
     amount of

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<PAGE>

     cash  and the  fair  market  value  of the  property  encumbered  by  Liens
     described in this clause (vii)(y) shall not exceed $100,000;

          (viii) Liens placed upon  equipment or machinery  used in the ordinary
     course of the business of the Borrower or any of its Subsidiaries within 60
     days  following the time of purchase  thereof by the Borrower or any of its
     Subsidiaries and improvements and accretions thereto to secure Indebtedness
     incurred  to pay all or a portion  of the  purchase  price  thereof  or any
     Indebtedness incurred to refinance such Indebtedness, provided that (x) the
     aggregate  principal amount of all Indebtedness  secured by Liens permitted
     by this clause (viii) does not exceed at any one time outstanding  $200,000
     with respect to all machinery and equipment and (y) in all events, the Lien
     encumbering  the  equipment or machinery so acquired and  improvements  and
     accretions thereto does not encumber any other asset of the Borrower or any
     of its Subsidiaries;

          (ix)  Liens  arising  from  precautionary  UCC-1  financing  statement
     filings  regarding  operating leases entered into by the Borrower or any of
     its Subsidiaries in the ordinary course of business;

          (x)  inchoate  Liens (where there has been no execution or levy and no
     pledge or delivery of  collateral)  arising  from and out of  judgments  or
     decrees in existence at such time not constituting an Event of Default; and

          (xi) a lien in favor of the  landlord  with  respect  to the assets of
     Vantas Walnut, Inc., located at 70 Walnut Street, Wellesley, Massachusetts.

     8.02 Consolidation,  Merger,  Purchase or Sale of Assets, etc. The Borrower
will not, and will not permit any of its  Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any  transaction of merger or  consolidation,
or  convey,  sell,  lease or  otherwise  dispose  of (or  agree to do any of the
foregoing  at any future  time) all or any part of its  property  or assets,  or
enter into any partnerships,  joint ventures or sale-leaseback transactions,  or
purchase or otherwise  acquire (in one or a series of related  transactions) any
part of the property or assets (other than  purchases or other  acquisitions  by
the Borrower or any of its Subsidiaries of inventory, materials and equipment in
the ordinary course of business) of any Person, except that:

          (i) Capital Expenditures by the Borrower and its Subsidiaries shall be
     permitted to the extent not in violation of Section 8.08;

          (ii) each of the Borrower and its  Subsidiaries  may lease (as lessee)
     real or personal  property to the extent  permitted  by Section 8.08 and to
     the  extent  such  lease  is not a  Capital  Lease,  the  Borrower  and its
     Subsidiaries  shall  enter  into  such  leases  in the  ordinary  course of
     business;

          (iii) investments may be made to the extent permitted by Section 8.06;

          (iv) the Transaction  shall be permitted as contemplated by the Credit
     Documents;

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<PAGE>

          (v) the Borrower may effect Permitted  Acquisitions in accordance with
     the requirements of Section 7.15;

          (vi) the  Borrower  may cause any  Subsidiary  to be  dissolved  if no
     Permitted  Business is operated in connection with such Subsidiary and such
     dissolution  could not  reasonably  be expected to have a material  adverse
     effect on the performance, business, assets, nature of assets, liabilities,
     properties,  operations, condition (financial or otherwise) or prospects of
     the Borrower and its Subsidiaries taken as a whole; and

          (vii) the Borrower may sell assets so long as the aggregate  amount of
     Net Cash Proceeds  received from such sales does not exceed $100,000 in the
     aggregate for all such asset sales in any fiscal year.

To the extent the Required  Banks waive the provisions of this Section 8.02 with
respect to the sale of any  Collateral  (to the extent  the  Required  Banks are
permitted to waive such  provisions in accordance  with Section  12.12),  or any
Collateral is sold as permitted by this Section 8.02, such  Collateral  shall be
sold free and clear of the Liens  created  by the  Security  Documents,  and the
Agent and  Collateral  Agent  shall be  authorized  to take any  actions  deemed
appropriate in order to effect the foregoing.

     8.03 Dividends.  The Borrower will not, nor will the Borrower permit any of
its  Subsidiaries  to, declare or pay any Dividends with respect to the Borrower
or any of its  Subsidiaries,  except that (i) any Subsidiary of the Borrower may
pay Dividends to the Borrower or any Wholly-Owned Subsidiary of the Borrower and
(ii) the Borrower may redeem outstanding  shares of Convertible  Preferred Stock
in accordance with the terms thereof so long as the redemption price therefor is
paid in Borrower Common Stock.

     8.04 Concentration  Account. The Borrower will not, and will not permit any
of its Subsidiaries to, directly or indirectly, open, maintain or otherwise have
any checking,  savings or other deposit  accounts at any bank or other financial
institution  where cash or Cash Equivalents is or may be deposited or maintained
with any Person,  other than (i) the bank deposit  accounts listed on Schedule V
hereto and (ii) the Concentration Account.

     8.05  Indebtedness.  The Borrower  will not, and will not permit any of its
Subsidiaries  to,  contract,  create,  incur,  assume  or  suffer  to exist  any
Indebtedness, except:

          (i)  Indebtedness  incurred  pursuant to this  Agreement and the other
     Credit Documents;

          (ii)  Indebtedness  of the Borrower under any Interest Rate Protection
     or Other  Hedging  Agreement  or under any similar type of agreement to the
     extent such is entered into to satisfy the requirements of Section 7.11;

          (iii)  Indebtedness of the Borrower and its Subsidiaries  evidenced by
     Capitalized Lease  Obligations to the extent permitted  pursuant to Section
     8.08;  provided  that the  aggregate  amount of  Indebtedness  evidenced by
     Capitalized Lease  Obligations  under all Capital Leases  outstanding under
     this clause (iii) at any one time shall not exceed [$5,000,000] (so long as
     the amount of Capitalized Lease Obligations incurred in

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<PAGE>

     any one fiscal  year does not  exceed  the  amount of Capital  Expenditures
     (other than  Permitted  Acquisitions)  the  Borrower is  permitted to incur
     during such fiscal year in accordance with Section 8.08);

          (iv) Existing  Indebtedness  of the Borrower  listed on Schedule X but
     without  giving  effect to any  refinancings,  renewals or increases in the
     principal amount thereof, except for refinancings,  renewals and extensions
     thereof which do not increase the principal  amount of  Indebtedness  being
     refinanced, renewed and/or extended;

          (v)  Indebtedness  in amounts,  and subject to Liens,  permitted under
     Section 8.01(viii);

          (vi) Indebtedness of the Borrower  evidenced by Permitted Seller Notes
     or  constituting  Permitted  Earn-Out  Debt issued in  accordance  with the
     requirements of Section 7.15 so long as the amount incurred on or after the
     Original  Effective Date shall not exceed  $2,000,000 and Capitalized Lease
     Obligations  of  Subsidiaries  of the Borrower  assumed in connection  with
     Permitted Acquisitions and incurred in accordance with Section 7.15 so long
     as such Capitalized  Lease Obligations were not incurred in anticipation or
     contemplation  of such Permitted  Acquisitions  and the  Capitalized  Lease
     Obligations are obligations solely of the entity acquired in such Permitted
     Acquisition or formed by the Borrower to effect such Permitted Acquisition;
     and

          (vii)  guaranties by the Borrower or any of its Subsidiaries of leases
     entered into in the ordinary  course of business by any  Subsidiary  of the
     Borrower.

     8.06 Advances,  Investments and Loans.  The Borrower will not, and will not
permit any of its  Subsidiaries  to, directly or indirectly lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities  of, or any other interest in, or make any capital  contribution  to,
any other  Person,  or purchase or own a futures  contract or  otherwise  become
liable for the  purchase or sale of currency  or other  commodities  at a future
date in the nature of a futures contract,  or hold any cash or Cash Equivalents,
except that the following shall be permitted:

          (i) the Borrower and its Subsidiaries may acquire and hold receivables
     owing to any of them,  if created or  acquired  in the  ordinary  course of
     business and payable or dischargeable in accordance with customary terms;

          (ii) the Borrower and its  Subsidiaries  may acquire and hold cash and
     Cash  Equivalents;  provided  that  all  cash  or Cash  Equivalents  of the
     Borrower and its Subsidiaries shall be held in the Concentration Account in
     accordance  with the terms of the  Concentration  Account  Consent  Letter;
     provided,  however,  Subsidiaries of the Borrower may acquire and hold cash
     and Cash Equivalents not in the  Concentration  Account so long as no later
     than the close of business on the last Business Day of each week such funds
     are  swept  by  the  Borrower  or  the  applicable   Subsidiary   into  the
     Concentration  Account;  provided  further,  that  at  any  time  that  any
     Revolving  Loans are  outstanding,  the  aggregate  amount of cash and Cash
     Equivalents  permitted  to be held  by the  Borrower  and its  Subsidiaries
     (whether held in the Concentration Account or

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<PAGE>

     otherwise)  shall not exceed the  product of (x) $25,000 and (y) the number
     of business  centers  operated by the Borrower and its  Subsidiaries at the
     time of determination;  provided, further, that notwithstanding anything to
     the contrary  contained in this Section  8.06(ii),  the Borrower may retain
     the proceeds from the Permitted Stock Issuances;

          (iii) the Borrower may enter into interest rate protection  agreements
     to the extent such is entered into to satisfy the  requirements  of Section
     7.11;

          (iv) the Borrower and its Subsidiaries  may make Capital  Expenditures
     to the extent permitted by Section 8.08;

          (v)  the  Transaction  shall  be  permitted  in  accordance  with  the
     provisions of Section 4;

          (vi)  the  Borrower  and  its  Subsidiaries  may  endorse   negotiable
     instruments for collection in the ordinary course of business;

          (vii) the Borrower and its Subsidiaries may make loans and advances in
     the ordinary  course of business  consistent  with past  practices to their
     respective  employees for moving,  travel and emergency  expenses and other
     similar expenses,  so long as the aggregate principal amount thereof at any
     one time  outstanding  (determined  without  regard to any  write-downs  or
     write-offs of such loans and advances) shall not exceed $200,000;

          (viii) the  Borrower  may  maintain  the loan of $950,000  made by the
     Borrower  to David W.  Beale and used for the  purchase  by him of  200,000
     shares of Series B Convertible Preferred Stock; and

          (ix) the  Start-Up  Costs shall be permitted  in  accordance  with the
     provisions of Section 7.15(xi).

     8.07  Transactions  with  Affiliates.  The Borrower  will not, and will not
permit  any of its  Subsidiaries  to,  enter into any  transaction  or series of
related  transactions,  whether or not in the ordinary course of business,  with
any Affiliate of the Borrower or any Affiliate of the  Borrower's  Subsidiaries,
other  than  transactions  by the  Borrower  or any of its  Subsidiaries  in the
ordinary  course of  business  unless  such  transaction  or  series of  related
transactions  is in  writing  and on  terms  that are no less  favorable  to the
Borrower  or such  Subsidiary,  as the case may be,  than  those  that  would be
available in a comparable transaction in arm's-length dealings with an unrelated
third party;  except that (i) the Borrower and its  Subsidiaries  may effect the
Transaction,  (ii) loans and advances made in accordance with Section  8.06(vii)
shall be  permitted,  (iii) the Borrower may pay customary  fees to  non-officer
directors of the Borrower,  and (iv) the entering  into,  and performing of, the
Intercompany Agreement by the Borrower and any of its Subsidiaries party thereto
(including  without  limitation  entering into any Product  Agreement)  shall be
permitted.  In no event may any management or similar fees be paid or payable by
the Borrower or any of its Subsidiaries to any Person other than an Affiliate of
the Borrower.

     8.08 Capital  Expenditures.  (a) The Borrower  will not and will not permit
any of its  Subsidiaries  to, make any  expenditure  for fixed or capital assets
(including, without

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<PAGE>

limitation, expenditures for maintenance and repairs which should be capitalized
in  accordance  with  generally  accepted  accounting  principles  and including
Capitalized Lease Obligations  (collectively,  "Capital  Expenditures"),  except
that the Borrower and its Subsidiaries may make Capital Expenditures (other than
in connection  with  Permitted  Acquisitions)  so long as the  aggregate  amount
thereof does not exceed during any period of four  consecutive  fiscal  quarters
ended on December 31 of any year commencing with the fiscal year ending December
31,  1999,  the product of (I) $37,000 (as such amount may be  increased on each
January 1  (commencing  with  January 1, 2000) by three  percent of the previous
year's amount) and (II) the number of executive office suite center locations of
the Borrower and its  Subsidiaries  on the  applicable  December 31 and provided
that  the  Borrower  may  make  up to  an  additional  $19  million  of  Capital
Expenditures  during the  period  beginning  on  January 1, 1999,  and ending on
December 31, 1999 (with approximately $14,400,000 of such amount to be allocated
in  connection  with  Year  2000  reprogramming),   to  improve  the  Borrower's
headquarters,  to effect necessary  technology expansion and computer compliance
pursuant  to  Sections  6.29  and  7.13,  for  furniture   replacement  and  for
incremental  development  costs  associated with executive office centers of the
Borrower on the Restatement Effective Date.

     (b) In addition to the Capital  Expenditures  permitted above, the Borrower
and its Subsidiaries may make Permitted  Acquisitions in accordance with Section
7.15 in an amount not to exceed the amounts permitted thereby.

     8.09 Fixed Charge  Coverage  Ratio.  The Borrower will not permit the Fixed
Charge Coverage Ratio for any fiscal quarter to be less than 1.00 to 1.00.

     8.10 Interest Coverage Ratio. The Borrower will not permit the ratio of its
Consolidated EBITDA to its Consolidated  Interest Expense for any fiscal quarter
ending  on a date set forth  below to be less than the ratio set forth  opposite
such date:

<TABLE>
<CAPTION>

Fiscal Quarter Ended                      Ratio

--------------------                      -----
<S>                                       <C>
September 30, 1999                        3.15:1.00
December 31, 1999                         3.15:1.00
March 31, 2000                            3.15:1.00
June 30, 2000                             3.15:1.00
September 30, 2000                        3.15:1.00
December 31, 2000                         3.20:1.00
March 31, 2001                            3.25:1.00
June 30, 2001                             3.35:1.00
September 30, 2001                        3.40:1.00
December 31, 2001                         3.60:1.00
March 31, 2002                            3.80:1.00
June 30, 2002                             4.10:1.00
September 30, 2002                        4.40:1.00
December 31, 2002                         5.00:1.00
March 31, 2003                            5.50:1.00
June 30, 2003                             6.00:1.00
</TABLE>

                                       66

<PAGE>

<TABLE>

<S>                                      <C>
September 30, 2003                        6.00:1.00
December 31, 2003                         6.00:1.00
March 31, 2004                            6.00:1.00
June 30, 2004                             6.00:1.00
September 30, 2004                        6.00:1.00
December 31, 2004                         6.00:1.00
March 31, 2005                            6.00:1.00
June 30, 2005                             6.00:1.00
September 30, 2005                        6.00:1.00
</TABLE>

     8.11 Consolidated  Indebtedness to Consolidated  EBITDA.  The Borrower will
not permit the ratio of  Consolidated  Indebtedness  as at the end of any fiscal
quarter  ended on a date set forth below to  Consolidated  EBITDA for any fiscal
quarter  ending on a date set forth below to be greater than the ratio set forth
opposite such date below:

<TABLE>
<CAPTION>

Fiscal Quarter Ended                       Ratio

--------------------                       -----
<S>                                        <C>
September 30, 1999                         2.95:1.00
December 31, 1999                          2.95:1.00
March 31, 2000                             2.95:1.00
June 30, 2000                              2.95:1.00
September 30, 2000                         2.95:1.00
December 31, 2000                          2.90:1.00
March 31, 2001                             2.85:1.00
June 30, 2001                              2.75:1.00
September 30, 2001                         2.60:1.00
December 31, 2001                          2.45:1.00
March 31, 2002                             2.30:1.00
June 30, 2002                              2.10:1.00
September 30, 2002                         1.90:1.00
December 31, 2002                          1.70:1.00
March 31, 2003                             1.50:1.00
June 30, 2003                              1.30:1.00
September 30, 2003                         1.05:1.00
December 31, 2003                          0.95:1.00
March 31, 2004                             0.85:1.00
June 30, 2004                              0.70:1.00
September 30, 2004                         0.60:1.00
December 31, 2004                          0.60:1.00
March 31, 2005                             0.60:1.00
June 30, 2005                              0.60:1.00
</TABLE>

                                       67

<PAGE>

<TABLE>

<S>                                        <C>
September 30, 2005                         0.60:1.00
</TABLE>

     8.12 Minimum EBITDA.  The Borrower will not permit its Consolidated  EBITDA
for any  fiscal  quarter  ending  on a date set  forth  below to be less than an
amount equal to (A) the amount set forth opposite such date set forth below plus
(B) the  product of (i) 85% and (ii) the amount of  Consolidated  EBITDA for the
four fiscal quarters immediately preceding the date of the Permitted Acquisition
of any Person,  business,  division or product line acquired after June 30, 1999
and prior to the respective fiscal quarter pursuant to a Permitted  Acquisition;
provided,  however,  to the extent such twelve month Consolidated  EBITDA is not
audited,  the Agent must be  satisfied  with the amount of  Consolidated  EBITDA
being  included for purposes of setting the levels for this  covenant  (provided
that if the Agent has not notified the Borrower prior to the consummation of the
Permitted  Acquisition  that the Agent is not satisfied  with the amount of such
Consolidated  EBITDA the Agent shall be deemed  satisfied  for  purposes of this
clause) and all  calculations  and  procedures  must be in  accordance  with the
definition  of "Pro Forma Basis" and, in any event,  the amount of  Consolidated
EBITDA of any Person,  business  decision or product line acquired pursuant to a
Permitted  Acquisition to be used for the purposes of clause (ii) above shall be
set forth in an officer's  certificate provided by the Borrower and delivered to
the Agent and to each of the Banks in connection with the Permitted Acquisition:

<TABLE>
<CAPTION>

Fiscal Quarter Ended                       Amount

--------------------                       ------
<S>                                       <C>
September 30, 1999                         14,840,000
December 31, 1999                          14,960,000
March 31, 2000                             15,080,000
June 30, 2000                              15,200,000
September 30, 2000                         15,320,000
December 31, 2000                          15,440,000
March 31, 2001                             15,560,000
June 30, 2001                              15,680,000
September 30, 2001                         15,800,000
December 31, 2001                          15,920,000
March 31, 2002                             16,040,000
June 30, 2002                              16,160,000
September 30, 2002                         16,280,000
December 31, 2002                          16,400,000
March 31, 2003                             16,520,000
June 30, 2003                              16,640,000
September 30, 2003                         16,760,000
December 31, 2003                          16,880,000
March 31, 2004                             17,000,000
June 30, 2004                              17,120,000
September 30, 2004                         17,240,000
December 31, 2004                          17,360,000
March 31, 2005                             17,480,000
June 30, 2005                              17,600,000
</TABLE>

                                       68

<PAGE>

<TABLE>
<CAPTION>

Fiscal Quarter Ended                       Amount

--------------------                       ------
<S>                                        <C>
September 30, 2005                         17,720,000

</TABLE>

     8.13  Limitation  on  Voluntary   Payments  and  Modification  of  Existing
Indebtedness;  Limitation on  Modifications  of  Certificate  of  Incorporation,
By-Laws and Certain Other  Agreements;  etc. The Borrower will not, and will not
permit any of its Subsidiaries to:

          (i) make (or give any notice in respect of) any  voluntary or optional
     payment or prepayment on or redemption (including pursuant to any change of
     control  provision)  or  acquisition  for  value  of  (including,   without
     limitation,  by way of  depositing  with the trustee with  respect  thereto
     money or  securities  before due for the purpose of paying  when due),  any
     Existing  Indebtedness  (other than up to $1 million to prepay  Capitalized
     Lease Obligations);

          (ii) amend or modify,  or permit the amendment or modification of, any
     provision of the Existing  Indebtedness or of any agreement relating to any
     of the foregoing except for such amendments or modifications  which, in the
     aggregate or individually,  could not reasonably be likely to be adverse to
     any Bank in its capacity as such;

          (iii)   materially   amend,   modify  or  change  its  Certificate  of
     Incorporation (including, without limitation, by the filing or modification
     of any certificate of designation),  By-Laws or limited  liability  company
     agreement,  in a manner adverse to the Banks;  provided,  that the Borrower
     and  its   Subsidiaries   may  amend  their   respective   Certificates  of
     Incorporation  to change  their names to the names set forth on Schedule XV
     on the Restatement  Effective Date, in the case of the  Subsidiaries of the
     Borrower, and on July 23, 1999, in the case of the Borrower;

          (iv)  amend,  modify  or  change,  terminate,  or  enter  into any new
     Shareholders'  Agreement or any other  agreement with respect to its equity
     interests,  except for such amendments,  modifications or changes which, in
     the aggregate or individually  could not reasonably be likely to be adverse
     to any Bank in its capacity as such;

          (v)  amend,  modify or  change,  terminate  or enter  into any new Tax
     Sharing Agreement;

          (vi)  amend,  modify  or  change,  or enter  into  any new  Management
     Agreement, Employee Benefit Plan, Employment Agreement or Material Contract
     except if the  aggregate  cost to the  Borrower and its  Subsidiaries  as a
     result of such amendments, modifications, changes to such plans, agreements
     and contracts and new plans,  agreements  and contracts are not  reasonably
     likely to have a  material  adverse  effect on the  performance,  business,
     property,  assets, nature of assets,  liabilities,  condition (financial or
     otherwise)  or prospects of the  Borrower and its  Subsidiaries  taken as a
     whole; or

                                       69

<PAGE>

          (vii) amend, modify,  change or terminate the Intercompany  Agreement,
     except  for  such  amendments,  modifications  or  changes  which,  in  the
     aggregate or  individually  could not reasonably be likely to be adverse to
     any Bank in its capacity as such.

     8.14 Limitation on Certain Restrictions on Subsidiaries.  The Borrower will
not, and will not permit any of its  Subsidiaries  to,  directly or  indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or  restriction  on the  ability of any  Subsidiary  of the  Borrower to (i) pay
dividends  or make any other  distributions  on its  capital  stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the  Borrower,  (ii)  make  loans  or  advances  to the  Borrower  or any of the
Borrower's Subsidiaries or (iii) transfer any of its properties or assets to the
Borrower,  except for such  encumbrances  or  restrictions  existing under or by
reason of (w) applicable law, (x) this Agreement and the other Credit  Documents
and (y) customary provisions  restricting subletting or assignments of any lease
governing a leasehold interest of the Borrower or a Subsidiary of the Borrower.

     8.15  Limitation  on Issuance of Capital  Stock.  (a) The Borrower will not
permit  any of its  Subsidiaries  to issue  any  capital  stock or other  equity
interests (including,  without limitation,  limited liability company interests)
(including  by way of sales of  treasury  stock) or any  options or  warrants to
purchase,  or  securities  convertible  into,  capital  stock,  except  (i)  for
transfers and  replacements of then outstanding  shares,  (ii) for stock splits,
stock  dividends  and similar  issuances  which do not decrease  the  percentage
ownership  of any person in any class of the  capital  stock of the  Borrower or
such  Subsidiary  and  (iii)  upon  the  formation  of any new  Subsidiaries  as
permitted by Section  8.17.  Any stock issued as permitted by this Section 8.15,
if  owned  by the  Borrower  or any of the  Borrower's  Subsidiaries,  shall  be
immediately  pledged as  Collateral  and  delivered  pursuant to the  applicable
Pledge Agreement.

     (b) The  Borrower  will not  issue  any  capital  stock or any  options  or
warrants to purchase, or securities  convertible into, capital stock, except (i)
for  issuances  of  Acceptable  Capital  Stock  or  warrants   exercisable  into
Acceptable  Capital  Stock where,  after  giving  effect to such  issuance,  the
proceeds  therefrom are applied in accordance  with Section  3.02(A)(e) and (ii)
the Permitted Stock Issuances;  provided,  however, that with respect to clauses
(i) and (ii) no Default or Event of Default  will exist under  Section 9.10 (or,
in the case of issuance of options,  warrants,  or  convertible  securities,  no
Default or Event of Default  would exist  under  Section  9.10 if such  options,
warrants or convertible securities were to be exercised or converted).

     8.16  Business.  The  Borrower,  will not,  and will not  permit any of its
Subsidiaries,  to engage  (directly or  indirectly) in any business other than a
Permitted Business.

     8.17  Limitation  on Creation of  Subsidiaries.  The Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire any new
Subsidiary,  except the Borrower may acquire or form  Subsidiaries in connection
with Permitted  Acquisitions to the extent otherwise permitted by this Agreement
and may form new Subsidiaries in connection with brokerage or similar operations
or the opening of new executive  office suite business  centers,  so long as (x)
such new Subsidiaries are Wholly-Owned  Subsidiaries,  (y) such new Subsidiaries
execute and deliver  pledge  agreements,  security  agreements and guaranties in
form and  substance  satisfactory  to the  Agent and all  capital  stock of such
Subsidiary is pledged to the Collateral

                                       70

<PAGE>

Agent for the benefit of the Secured  Creditors  pursuant to a pledge  agreement
reasonably satisfactory to the Agent.

     8.18 Lease Agreements. The Borrower will use its reasonable best efforts to
cause each lease  entered  into by the  Borrower or any of its  Subsidiaries  to
provide that the Landlord  thereunder  waives all statutory  landlord  liens and
does not provide for any contractual landlord liens.

     Section 9. Events of Default. Subject to Section 12.16, upon the occurrence
of any of the following specified events (each an "Event of Default"):

     9.01  Payments.  The Borrower  shall (i) default in the payment when due of
any  principal of any Loan or any Note or Unpaid  Drawing or (ii)  default,  and
such default shall  continue  unremedied  for two or more Business  Days, in the
payment when due of any interest on any Loan or Note or Unpaid  Drawing,  or any
Fees or any other amounts owing by it hereunder or thereunder; or

     9.02 Representations,  etc. Any representation,  warranty or statement made
by any Credit Party herein or in any other Credit Document or in any certificate
delivered  pursuant  hereto or thereto  shall prove to be untrue in any material
respect on the date as of which made or deemed made; or

     9.03  Covenants.  Any Credit Party shall (i) default in the due performance
or  observance  by it of any term,  covenant or  agreement  contained in Section
7.01(g)(i),  7.08,  7.11, 7.15, 7.17 or 8 or (ii) default in the due performance
or  observance by it of any other term,  covenant or agreement  contained in any
Credit  Document and such default shall  continue  unremedied for a period of 30
days after written notice to the Borrower by the Agent or any Bank; or

     9.04  Default  Under  Other   Agreements.   The  Borrower  or  any  of  its
Subsidiaries  shall (i) default in any payment of any  Indebtedness  (other than
the Indebtedness referred to in Section 9.01) beyond the period of grace (not to
exceed 10 days),  if any,  provided in the  instrument or agreement  under which
such Indebtedness was created,  (ii) default in the observance or performance of
any  agreement  or  condition  relating  to any  Indebtedness  (other  than  the
Indebtedness  referred to in Section  9.01) or  contained in any  instrument  or
agreement  evidencing,  securing or relating  thereto,  or any other event shall
occur or  condition  exist,  the  effect  of  which  default  or other  event or
condition is to cause,  or to permit the holder or holders of such  Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required),  such  Indebtedness to become
due prior to its stated  maturity and such default  shall not have been cured or
waived,  or (iii) any Indebtedness  (other than the Indebtedness  referred to in
Section 9.01) of the Borrower or any of its Subsidiaries shall be declared to be
due and payable,  or required to be prepaid other than by a regularly  scheduled
required  prepayment,  prior to the stated  maturity  thereof;  provided that it
shall not  constitute  an Event of Default  pursuant to this Section 9.04 unless
the aggregate  amount of all Indebtedness  referred to in the preceding  clauses
(i) through (iii) above exceeds $100,000 at any one time; or

                                       71

<PAGE>

     9.05  Bankruptcy,  etc.  The  Borrower  or any of  its  Subsidiaries  shall
commence a voluntary case concerning  itself under Title 11 of the United States
Code  entitled  "Bankruptcy,"  as now or hereafter in effect,  or any  successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries and the petition is not controverted  within
10 days, or is not dismissed or discharged,  within 60 days, after  commencement
of the case;  or a custodian  (as defined in the  Bankruptcy  Code) is appointed
for,  or takes  charge  of,  all or  substantially  all of the  property  of the
Borrower or any of its Subsidiaries,  or the Borrower or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement, adjustment
of debt,  relief of debtors,  dissolution,  insolvency or liquidation or similar
law of any  jurisdiction  whether  now or  hereafter  in effect  relating to the
Borrower or any of its Subsidiaries,  or there is commenced against the Borrower
or any of its  Subsidiaries  any such  proceeding  which remains  undismissed or
undischarged for a period of 60 days, or the Borrower or any of its Subsidiaries
is  adjudicated  insolvent  or  bankrupt;  or any order of relief or other order
approving any such case or proceeding is entered;  or the Borrower or any of its
Subsidiaries  suffers any appointment of any custodian or the like for it or any
substantial  part of its  property to continue  undischarged  or unstayed  for a
period of 60 days;  or the Borrower or any of its  Subsidiaries  makes a general
assignment for the benefit of creditors; or any corporate action is taken by the
Borrower  or any of its  Subsidiaries  for the purpose of  effecting  any of the
foregoing; or

     9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding standard
required  for any plan year or part  thereof  under  Section  412 of the Code or
Section  302  of  ERISA  or a  waiver  of  such  standard  or  extension  of any
amortization  period is  sought  or  granted  under  Section  412 of the Code or
Section  303 or 304  of  ERISA,  a  Reportable  Event  shall  have  occurred,  a
contributing  sponsor  (as  defined in Section  4001(a)(13)  of ERISA) of a Plan
subject  to  Title  IV of  ERISA  shall  be  subject  to the  advance  reporting
requirement of PBGC Regulation  Section 4043.61  (without regard to subparagraph
(b)(1)  thereof) and an event  described in subsection  .62, .63, .64, .65, .66,
 .67 or .68 of PBGC  Regulation  4043 shall be reasonably  expected to occur with
respect to such Plan within the following 30 days,  any Plan which is subject to
Title IV of ERISA  shall  have had or is likely to have a trustee  appointed  to
administer such Plan, any Plan or  Multiemployer  Plan which is subject to Title
IV of ERISA is,  shall  have been or is  likely  to be  terminated  or to be the
subject of termination  proceedings under ERISA, any Plan shall have an Unfunded
Current  Liability,  a contribution  required to be made with respect to a Plan,
Multiemployer  Plan or  Foreign  Pension  Plan has not  been  timely  made,  the
Borrower or any  Subsidiary of the Borrower or any ERISA  Affiliate has incurred
or is likely to incur any liability to or on account of a Plan or  Multiemployer
Plan under Section 409, 502(i),  502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section  401(a)(29),  4971 or 4975 of the Code or on account
of a group  health  plan (as  defined  in  Section  607(1)  of ERISA or  Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or the Borrower or any
Subsidiary  of the  Borrower  has  incurred  or is likely  to incur  liabilities
pursuant to one or more  employee  welfare  benefit plans (as defined in Section
3(1) of ERISA)  that  provide  benefits  to retired  employees  or other  former
employees  (other  than as required by Section 601 of ERISA) or Plans or Foreign
Pension Plans, a "default,"  within the meaning of Section  4219(c)(5) of ERISA,
shall occur with respect to any Multiemployer  Plan; any applicable law, rule or
regulation  is  adopted,  changed  or  interpreted,  or  the  interpretation  or
administration  thereof is changed,  in each case after the date hereof,  by any
governmental  authority or agency or by any court (a "Change in Law"),  or, as a
result of a Change in Law, an event occurs following a

                                       72

<PAGE>

Change in Law, with respect to or otherwise  affecting any Plan or Multiemployer
Plan;  (b) there shall result from any such event or events the  imposition of a
lien, the granting of a security interest,  or a liability or a material risk of
incurring  a  liability;  and (c) such lien,  security  interest  or  liability,
individually, and/or in the aggregate, in the opinion of the Required Banks, has
had, or could reasonably be expected to have, a material adverse effect upon the
business,  operations,  condition  (financial  or otherwise) or prospects of the
Borrower or any Subsidiary of the Borrower; or

     9.07  Security  Documents.  At any time after the  execution  and  delivery
thereof,  any of the  Security  Documents  shall  cease to be in full  force and
effect  or shall  cease to give the  Collateral  Agent  for the  benefit  of the
Secured  Creditors  the Liens,  rights,  powers and  privileges  purported to be
created thereby (including,  without  limitation,  a perfected security interest
in,  and Lien on,  all of the  Collateral),  in favor of the  Collateral  Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section  6.11),  and subject to no other Liens  (except as  permitted by Section
6.11), or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any of the Security  Documents  and such default  shall  continue  beyond any
grace  period  specifically  applicable  thereto  pursuant  to the terms of such
Security Document; or

     9.08 Guaranties.  At any time after the execution and delivery thereof, any
Guaranty or any  provision  thereof shall cease to be in full force or effect as
to any  Guarantor,  or any Guarantor or any Person acting by or on behalf of any
Guarantor  shall  deny or  disaffirm  such  Guarantor's  obligations  under  the
respective  Guaranty,  or any Guarantor  shall default in the due performance or
observance  of any term,  covenant or  agreement  on its part to be performed or
observed  pursuant to the  respective  Guaranty and such default shall  continue
beyond any grace period specifically applicable thereto; or

     9.09  Judgments.  One or more judgments or decrees shall be entered against
the  Borrower or any of its  Subsidiaries  involving  in the  aggregate  for the
Borrower  and its  Subsidiaries  a  liability  (not paid or fully  covered  by a
reputable  insurance  company)  of $100,000  or more and all such  judgments  or
decrees shall not be satisfied,  vacated, discharged or stayed or bonded pending
appeal for any period of 30 consecutive days; or

     9.10 Change in Control.  There shall be a Change in Control;  then,  and in
any such event, and at any time  thereafter,  if any Event of Default shall then
be continuing,  the Agent, upon the written request of the Required Banks, shall
by written  notice to the Borrower,  take any or all of the  following  actions,
without prejudice to the rights of the Agent, any Bank or the holder of any Note
to enforce its claims  against any Credit Party  (provided  that, if an Event of
Default specified in Section 9.05 shall occur with respect to the Borrower,  the
result  which would occur upon the giving of written  notice by the Agent to the
Borrower as  specified  in clauses (i) and (ii) below shall occur  automatically
without  the  giving of any such  notice):  (i)  declare  the  Total  Commitment
terminated,  whereupon all  Commitments of each Bank shall  forthwith  terminate
immediately  and any Fees shall  forthwith  become due and  payable  without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all  Obligations  owing  hereunder and
thereunder to be,  whereupon  the same shall  become,  forthwith due and payable
without presentment,

                                       73

<PAGE>

demand,  protest or other notice of any kind,  all of which are hereby waived by
each  Credit  Party;  (iii)  exercise  any rights or  remedies  under any of the
Guaranties;  (iv)  terminate  any Letter of Credit  which may be  terminated  in
accordance  with its terms;  (v) direct the  Borrower  to pay (and the  Borrower
agrees that upon receipt of such notice,  or upon the  occurrence of an Event of
Default  specified in Section 9.05, it will pay) to the Collateral  Agent at the
Payment  Office such  additional  amount of cash,  to be held as security by the
Collateral  Agent  for the  benefit  of the Banks in a cash  collateral  account
established and maintained by the Collateral Agent pursuant to a cash collateral
agreement in form and substance  satisfactory  to the  Collateral  Agent,  as is
equal to the aggregate Stated Amount of all Letters of Credit then  outstanding;
and (vi) enforce,  as Collateral Agent, all of the Liens and security  interests
created pursuant to the Security Documents.

     Section 10. Definitions and Accounting Terms.

     10.01 Defined Terms. As used in this  Agreement,  the following terms shall
have the following  meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):

     "A Term Loan" shall have the meaning provided in Section 1.01(a).

     "A Term Loan Commitment"  shall mean, with respect to each Bank, the amount
set forth  opposite  such Bank's name in Schedule I to this  Agreement  directly
below the column  entitled "A Term Loan  Commitment,"  as the same may have been
(x)  reduced or  terminated  pursuant  to  Section  2.03,  3.02  and/or 9 or (y)
adjusted  from  time to time as a result  of  assignments  to or from  such Bank
pursuant to Section 1.12 or 12.04.

     "A Term Loan  Facility"  shall mean the facility  evidenced by Total A Term
Loan Commitment.

     "A Term Loan Maturity Date" shall mean June 30, 2002.

     "A Term Note" shall have the meaning provided in Section 1.05(a)(i).

     "A TL  Percentage"  shall mean,  at any time,  a fraction  (expressed  as a
percentage),  the numerator of which is equal to the aggregate  principal amount
of all A Term Loans  outstanding at such time,  and the  denominator of which is
equal to the aggregate  principal  amount of all Term Loans  outstanding at such
time and, after the Acquisition Loan Termination  Date, the aggregate  principal
amount of all Acquisition Loans outstanding at such time.

     "Acceptable  Capital  Stock" shall mean Borrower  Common Stock or preferred
stock so long as, in the case of such preferred  stock,  the preferred  stock is
perpetual preferred stock with no mandatory redemption, sinking fund, put rights
or similar  requirements,  has no  requirements to pay cash dividends and has no
covenants or voting rights (other than voting rights or covenants  equivalent to
those  granted to holders of  Convertible  Preferred  Stock) and, in the case of
Borrower Common Stock, in connection with such issuance of Borrower Common Stock
the holders  thereof  are not  granted any rights  other than rights held by all
holders of Borrower Common Stock on the Restatement Effective Date.

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     "Acquisition  Commitment  Percentage"  shall  mean at any  time a  fraction
(expressed  as a  percentage)  the  numerator of which is the  Acquisition  Loan
Commitment of such Bank at such time and the  denominator  of which is the Total
Acquisition Loan Commitment at such time.

     "Acquisition Loan" shall have the meaning provided in Section 1.01(c).

     "Acquisition  Loan  Commitment"  shall mean, with respect to each Bank, the
amount set forth  opposite such Bank's name in Schedule I hereto  directly below
the  column  entitled  "Acquisition  Loan  Commitment,"  as the  same may be (x)
reduced or terminated  from time to time pursuant to Section  2.02,  2.03,  3.02
and/or 9 or (y) adjusted from time to time as a result of assignments to or from
such Bank pursuant to Section 1.12 or 12.04.

     "Acquisition Loan Facility" shall mean the facility  evidenced by the Total
Acquisition Loan Commitment.

     "Acquisition Loan Maturity Date" shall mean November 6, 2003.

     "Acquisition  Loan  Termination  Date" shall mean  November 6, 2000 or such
earlier date on which the Total Acquisition Loan Commitment has been permanently
reduced to zero pursuant to Section 2.02 or Section 9.

     "Acquisition Note" shall have the meaning provided in Section 1.05(a)(iii).

     "Acquisition  TL  Percentage"   shall  mean,  after  the  Acquisition  Loan
Termination Date, a fraction (expressed as a percentage), the numerator of which
is equal to the aggregate  principal amount of all Acquisition Loans outstanding
at such time and the  denominator  of which is equal to the aggregate  principal
amount of all Term Loans and Acquisition Loans outstanding at such time.

     "Additional  Collateral" shall mean all property (whether real or personal)
in which  security  interests  are granted  (or  purported  to be granted)  (and
continue to be in effect at the time of determination)  pursuant to Section 7.15
or 7.17.

     "Additional   Security   Documents"   shall  mean  all  mortgages,   pledge
agreements,  security  agreements  and other  security  documents  entered  into
pursuant to Section 7.15 or 7.17 with respect to Additional Collateral.

     "Adjusted  Consolidated Net Income" for any period shall mean  Consolidated
Net  Income  for such  period  plus the sum of the  amount  of all net  non-cash
charges (including, without limitation, depreciation, amortization, deferred tax
expense,  non-cash  interest  expense and other  non-cash  charges)  included in
arriving at  Consolidated  Net Income for such period less the sum of the amount
of all net non-cash  gains or losses  (exclusive of items  reflected in Adjusted
Working  Capital) and gains or losses from sales of assets  included in arriving
at Consolidated Net Income for such period.

     "Adjusted   Working  Capital"  shall  mean   Consolidated   Current  Assets
(excluding cash and Cash Equivalents) minus Consolidated Current Liabilities.

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<PAGE>

     "Affiliate"  shall  mean,  with  respect to any  Person,  any other  Person
directly or indirectly  controlling  (including but not limited to all directors
and officers of such Person),  controlled by, or under direct or indirect common
control with, such Person; provided, however, that for purposes of Section 8.07,
an  Affiliate  of the  Borrower  shall  include  any  Person  that  directly  or
indirectly (including through limited partner or general partner interests) owns
more  than 5% of any  class of the  capital  stock of the  Borrower  and for all
purposes of this Agreement, neither the Agent, the Collateral Agent, any Bank or
any of their  respective  Affiliates,  shall be  considered  an Affiliate of the
Borrower or any of its Subsidiaries. A Person shall be deemed to control another
Person if such Person possesses,  directly or indirectly, the power to direct or
cause the direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.

     "Affiliate Contracts" shall have the meaning provided in Section 4.05.

     "Agent"  shall  mean  Paribas  in its  capacity  as  Agent  for  the  Banks
hereunder,  and shall include any successor to the Agent  appointed  pursuant to
Section 11.09.

     "Aggregate  Unutilized  Commitment"  with  respect  to any Bank at any time
shall mean the sum of (i) such Bank's  Unutilized  Revolving Loan  Commitment at
such time, plus (ii) such Bank's Unutilized  Acquisition Loan Commitment at such
time.

     "Agreement"  shall mean this  Amended and  Restated  Credit  Agreement,  as
modified, supplemented or amended from time to time.

     "Applicable  Margin"  shall  mean  (A)(i)  in the  case  of A  Term  Loans,
Acquisition  Loans and Revolving  Loans which are maintained as Base Rate Loans,
2.00%,  and (ii) in the case of B Term Loans which are  maintained  as Base Rate
Loans,  2.75%,  and (B)(i) in the case of A Term  Loans,  Acquisition  Loans and
Revolving Loans which are maintained as Eurodollar Loans, 3.00%, and (ii) in the
case of B Term Loans which are maintained as Eurodollar Loans, 3.75%.

     "Assignment of Leases and Rents" shall have the meaning provided in Section
4.06.

     "B Banks" shall have the meaning provided in Section 3.02(C).

     "B Term Loan" shall have the meaning provided in Section 1.01(b).

     "B Term Loan Commitment"  shall mean, with respect to each Bank, the amount
set forth  opposite  such Bank's name in Schedule I to this  Agreement  directly
below the column  entitled "B Term Loan  Commitment,"  as the same may have been
(x)  reduced or  terminated  pursuant  to  Section  2.03,  3.02  and/or 9 or (y)
adjusted  from  time to time as a result  of  assignments  to or from  such Bank
pursuant to Section 1.12 or 12.04.

     "B Term Loan  Facility"  shall mean the  facility  evidenced by the Total B
Term Loan Commitment.

     "B Term Loan Maturity Date" shall mean November 6, 2005.

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<PAGE>

     "B Term Note" shall have the meaning provided in Section 1.05(a)(ii).

     "B TL  Percentage"  shall mean,  at any time,  a fraction  (expressed  as a
percentage),  the numerator of which is equal to the aggregate  principal amount
of all B Term Loans  outstanding  at such time and the  denominator  of which is
equal to the aggregate  principal  amount of all Term Loans  outstanding at such
time and, after the Acquisition Loan Termination  Date, the aggregate  principal
amount of all Acquisition Loans outstanding at such time.

     "Bank" shall mean each financial  institution listed on Schedule I, as well
as any institution which becomes a "Bank" hereunder pursuant to Section 12.04 or
Section 12.16.

     "Bank Default" shall mean (i) the refusal (which has not been retracted) of
a Bank to make  available its portion of any Borrowing or to fund its portion of
any  unreimbursed  payment under Section 1A.04(c) or (ii) a Bank having notified
in  writing to the  Borrower  and/or the Agent that it does not intend to comply
with its obligations under Section 1.01, including in either case as a result of
any takeover of such Bank by any regulatory authority or agency.

     "Bankruptcy Code" shall have the meaning provided in Section 9.05.

     "Base Rate" shall mean the higher of (i) 1/2 of 1% in excess of the Federal
Funds Rate and (ii) the Prime Lending Rate.

     "Base Rate Loan" shall mean any Loan  designated  or deemed  designated  as
such  by the  Borrower  at the  time of the  incurrence  thereof  or  conversion
thereto.

     "Borrower"  shall have the meaning  provided in the first paragraph of this
Agreement.

     "Borrower Common Stock" shall have the meaning provided in Section 6.14.

     "Borrowing"  shall  mean  the  borrowing  of one  Type of Loan of a  single
Tranche from all the Banks having  Commitments with respect to such Tranche on a
pro rata basis on a given date (or resulting from a conversion or conversions on
such date)  having in the case of  Eurodollar  Loans the same  Interest  Period;
provided  that Base Rate Loans  incurred  pursuant to Section  1.10(b)  shall be
considered part of the related Borrowing of Eurodollar Loans.

     "Business  Day"  shall mean (i) for all  purposes  other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New  York  City a legal  holiday  or a day on  which  banking  institutions  are
authorized or required by law or other government  action to close and (ii) with
respect to all notices and  determinations  in connection  with, and payments of
principal  and interest on,  Eurodollar  Loans,  any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.

     "Calculation   Period"   shall  have  the   meaning   provided  in  Section
7.15(a)(vii).

     "Capital Expenditures" shall have the meaning provided in Section 8.08.

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<PAGE>

     "Capital  Lease,"  as applied  to any  Person,  shall mean any lease of any
property  (whether real,  personal or mixed) by that Person as lessee which,  in
conformity with generally accepted accounting principles,  is accounted for as a
capital lease on the balance sheet of that Person.

     "Capitalized  Lease  Obligations"  of any  Person  shall  mean  all  rental
obligations  under  Capital  Leases,  in each case taken at the  amount  thereof
accounted for as Indebtedness in accordance with generally  accepted  accounting
principles.

     "Cash  Collateral"  shall  mean all  "Collateral"  as  defined  in the Cash
Collateral Agreement.

     "Cash Collateral  Account" shall mean a cash collateral  account maintained
with Paribas, as Collateral Agent for the benefit of Secured Creditors, pursuant
to the Cash Collateral Agreement.

     "Cash Collateral  Agreement" shall mean a Cash Collateral  Agreement in the
form of Exhibit K to this Agreement.

     "Cash  Equivalents"  shall mean, as to any Person, (i) securities issued or
directly and fully  guaranteed  or insured by the United States or any agency or
instrumentality  thereof  (provided that the full faith and credit of the United
States is pledged in support  thereof)  having  maturities  of not more than six
months from the date of  acquisition,  (ii) time  deposits and  certificates  of
deposit of any commercial  bank  organized  under the laws of the United States,
any State thereof or the District of Columbia having,  or which is the principal
banking  subsidiary of a bank holding  company  organized  under the laws of the
United States, any State thereof,  or the District of Columbia having,  capital,
surplus and undivided profits aggregating in excess of $200,000,000 and having a
long-term  unsecured debt rating of at least "A" or the equivalent  thereof from
Standard & Poor's  Corporation  ("S&P") or "A2" or the  equivalent  thereof from
Moody's Investors Service,  Inc.  ("Moody's"),  with maturities of not more than
six  months  from the  date of  acquisition  by such  Person,  (iii)  repurchase
obligations with a term of not more than seven days for underlying securities of
the types  described in clause (i) above  entered into with any bank meeting the
qualifications  specified in clause (ii) above,  (iv) commercial paper issued by
any  Person  incorporated  in  the  United  States  rated  at  least  A-1 or the
equivalent  thereof by S&P or at least P-1 or the equivalent  thereof by Moody's
and in each case maturing not more than six months after the date of acquisition
by such Person, (v) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(iv) above.

     "CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and  Liability  Act of 1980,  as the same may be amended  from time to time,  42
U.S.C.  ss. 9601 et seq.

     "Change in Control"  means the  occurrence of one or more of the following:
(i) the Investor Group,  their Affiliates and David W. Beale shall cease to have
the power to elect a majority of the Board of  Directors of the  Borrower,  (ii)
the  Investor  Group,  their  Affiliates  and David W. Beale shall cease to have
record and beneficial ownership of more than 50% of the

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<PAGE>

voting stock of the Borrower on a fully diluted  basis,  [(iii)  either  Cahill,
Warnock Strategic Partners Fund, L.P. and its Affiliates or David W. Beale shall
cease to have record and  beneficial  ownership of at least 75% of the number of
shares  of  Borrower  Common  Stock  owned by such  Persons  on the  Restatement
Effective  Date, (iv) except for Interoffice  Superholding  LLC,  Reckson Office
Centers LLC, RSI or any of its  Affiliates (so long as there shall not otherwise
exist a Change in  Control  under  clause  (vii)) (a) if any  Person,  entity or
"group"  (within  the  meaning  of  Section  13(d) and  14(d) of the  Securities
Exchange Act) shall become the "beneficial owner" (as defined in Rules 13(d) and
13(d)-5  under the  Exchange  Act,  except that a Person shall be deemed to have
"beneficial  ownership"  of all  securities  that such  Person  has the right to
acquire, whether such right is exercisable immediately or only after the passage
of  time)  of 20% or more of any  outstanding  class  of  capital  stock  of the
Borrower  having  ordinary  voting  power in the  election of  directors  of the
Borrower  or (b) the  directors  of the  Borrower  shall  cease  to  consist  of
Continuing  Directors,  (v)  the  Borrower  shall  cease  to  own  100%  of  the
outstanding capital stock of each Subsidiary; (vi) David W. Beale shall cease to
serve as President and Chief  Executive  Officer of the Borrower or (vii) (a) if
at any time while RSI and its Affiliates shall be the "beneficial  owner" of 20%
or more of the  aggregate  voting  power of all classes of capital  stock of the
Borrower  having  ordinary  voting  power in the  election of  directors  of the
Borrower,  any Person,  entity or "group" (other than Reckson  Associates Realty
Corp.,  any if its  Subsidiaries or any of its officers or directors on December
30, 1998 or any of their Affiliates) shall become the "beneficial  owner" of 20%
or more of the  aggregate  voting  power of all classes of capital  stock of RSI
having  ordinary  voting  power in the  election of  directors of RSI or (b) the
directors  of RSI shall  cease to consist  of  Continuing  Directors;  provided,
however, for purposes of clauses (i) and (ii) above, the initial public offering
of Borrower  Common  Stock shall not  constitute  a Change in Control so long as
following such initial public offering (i) the Investor Group, their Affiliates,
David W. Beale and the Persons who are members of the Board of  Directors of the
Borrower as of the  Restatement  Effective  Date (A) continue to have record and
beneficial ownership of more than 50% of voting stock of the Borrower on a fully
diluted  basis,  and (B) shall continue to have the power to elect a majority of
the Board of  Directors of the  Borrower,  and (ii) the  Investor  Group,  their
Affiliates and David W. Beale  continue to have record and beneficial  ownership
of more than 45% of the voting stock of the Borrower on a fully diluted basis.

     "Change in Law" shall have the meaning provided in Section 9.06.

     "Claims"   shall  have  the   meaning   provided  in  the   definition   of
"Environmental Claims."

     "Code" shall mean the Internal  Revenue Code of 1986,  as amended from time
to time, and the  regulations  promulgated  and the rulings  issued  thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement,  and to any  subsequent  provision of the Code,  amendatory  thereof,
supplemental thereto or substituted therefor.

     "Collateral"  shall  mean all  property  (whether  real or  personal)  with
respect to which any  security  interests  have been  granted  (or purport to be
granted) pursuant to any Security Document,  including,  without limitation, all
Pledge Agreement Collateral,  all Security Agreement Collateral,  all Additional
Collateral,  all Cash Collateral and all cash and Cash Equivalents  delivered as
collateral pursuant to this Agreement or any other Credit Document.

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<PAGE>

     "Collateral  Agent" shall mean the Agent acting as collateral agent for the
Secured Creditors pursuant to the Security Documents.

     "Collective  Bargaining  Agreements"  shall have the  meaning  provided  in
Section 4.05.

     "Commitment"  shall mean,  with respect to each Bank, such Bank's Term Loan
Commitment, Acquisition Loan Commitment and Revolving Loan Commitment, if any.

     "Commitment Commission" shall have the meaning provided in Section 2.01(a).

     "Concentration  Account"  shall mean a  separate  account  established  and
maintained  with the  Concentration  Account Bank for the benefit of the Secured
Creditors  by the  Borrower  and  each  of its  Subsidiaries  and in  which  the
Collateral Agent has a security interest  pursuant to the Concentration  Account
Consent Letter.

     "Concentration  Account Bank" shall mean The Chase  Manhattan  Bank or such
other bank that may become a  Concentration  Account Bank in accordance with the
provisions of the Security Agreement.

     "Concentration  Account Consent Letter" shall have the meaning  provided in
Section 7.18.

     "Consolidated Current Assets" shall mean the consolidated current assets of
the Borrower and its Subsidiaries.

     "Consolidated  Current  Liabilities"  shall mean the  consolidated  current
liabilities  of the Borrower and its  Subsidiaries,  but  excluding  the current
portion of any long-term Indebtedness which would otherwise be included therein.

     "Consolidated EBIT" shall mean, for any period, the Consolidated Net Income
before interest  income,  Consolidated  Interest Expense and provision for taxes
and  without  giving  effect  to any  extraordinary  gains or losses or gains or
losses from sales of assets.

     "Consolidated EBITDA" for any period shall mean Consolidated EBIT, adjusted
by adding thereto the amount of all amortization of intangibles and depreciation
that were deducted in arriving at Consolidated  Net Income for such period,  and
adjusted  further for any  increase or  decrease  in accrued  rent  liabilities;
provided,  however,  that for purposes of determining  compliance  with Sections
8.09 and 8.10 all  calculations  of  Consolidated  EBITDA  shall be based on the
reported  Consolidated  EBITDA for the fiscal quarter,  including  contributions
from  Permitted  Acquisitions  made  following  the first day of the  respective
fiscal quarter;  provided,  however, for purposes of determining compliance with
Section  8.11 all  calculations  of  Consolidated  EBITDA  shall be based on the
reported  Consolidated  EBITDA for the fiscal quarter,  excluding  contributions
from  Permitted  Acquisitions  made  following  the first day of the  respective
fiscal quarter,  multiplied by a fraction, the numerator of which is 365 and the
denominator  of which is the number of days elapsed  during the fiscal  quarter;
provided,  however, for purposes of determining compliance with Section 8.12 all
calculations of Consolidated EBITDA shall be based on the reported  Consolidated
EBITDA for the fiscal

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<PAGE>

quarter,  excluding contributions from Permitted Acquisitions made following the
first day of the  respective  fiscal  quarter,  multiplied  by a  fraction,  the
numerator  of which is 365 and the  denominator  of which is the  number of days
elapsed  during the fiscal  quarter;  provided,  however,  (I) for  purposes  of
determining compliance with Section 8.12 all calculations of Consolidated EBITDA
acquired as a result of any  Permitted  Acquisition  shall be made in accordance
with  clause  (ii) of the  definition  of "Pro Forma  Basis" and as long as such
calculations  are made in accordance with such clause (ii) then the Consolidated
EBITDA of such  Person,  business,  division or product line for the four fiscal
quarters  being  tested by such  covenants  or  definition  shall be included as
Consolidated EBITDA of the Borrower even though such Person, business,  division
or product line was acquired  during such four fiscal quarter  period,  (II) for
all purposes  Consolidated  EBITDA relating to the Borrower or any Subsidiary of
the  Borrower  (a) all or any part of whose  assets are  subject to a  perfected
security interest permissible under Section 8.01 in favor of a Person other than
the  Secured  Creditors  or (b) all or any  part of  whose  assets  the  Secured
Creditors  do  not  have  a  first  perfected  security  interest  because  such
Subsidiary is a foreign Subsidiary shall not be included in Consolidated  EBITDA
to the extent  that the  amount of such  Consolidated  EBITDA  exceeds 5% of the
Consolidated EBITDA of the Borrower and its Subsidiaries;  provided, however, to
the extent that at the end of any period for which  compliance with covenants is
being determined neither clause (a) or (b) is applicable,  then the Consolidated
EBITDA of such  Borrower or such  Subsidiary  shall be  included  for the entire
period and (III) for all purposes all calculations of Consolidated  EBITDA shall
exclude  Consolidated  EBITDA of the Borrower or any  Subsidiary of the Borrower
relating  to  International  Locations  to the  extent  that the  amount of such
Consolidated  EBITDA exceeds 10% of the Consolidated  EBITDA of the Borrower and
its Subsidiaries.

     "Consolidated  Indebtedness"  shall mean, at any time, all  Indebtedness of
the Borrower and its Subsidiaries  determined on a consolidated basis (excluding
all  Indebtedness  of the type  described  in  clause  (vii)  of the  definition
thereof,  except to the extent  amounts are owing with respect  thereto upon the
termination of the respective agreement constituting such Indebtedness) plus any
original issue discount attributable to such Indebtedness.

     "Consolidated  Interest  Expense"  shall mean,  for any  period,  the total
consolidated  interest  expense of the  Borrower and its  Subsidiaries  for such
period  (calculated  without regard to any  limitations on the payment  thereof)
payable  during such period in respect of all  Indebtedness  of the Borrower and
its Subsidiaries,  on a consolidated basis, for such period (including,  without
duplication,  that portion of Capitalized  Lease Obligations of the Borrower and
its Subsidiaries representing the interest factor for such period).

     "Consolidated  Net Income"  shall mean,  for any period,  net income of the
Borrower and its Subsidiaries for such period determined on a consolidated basis
(after provision for taxes); provided, however, the net income of any Subsidiary
of the  Borrower,  which is not a  Wholly-Owned  Subsidiary,  shall have its net
income  included  in the  Consolidated  Net  Income  of  the  Borrower  and  its
Subsidiaries  only  (i) to the  extent  of the  amount  of  cash  available  for
dividends or distributions  corresponding to the Borrower's ownership percentage
interest in such  Subsidiary and (ii) if there are no restrictions or limitation
whether by law,  contractual or otherwise to pay the dividends or  distributions
under the preceding clause (i) hereto to the Borrower.

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     "Contingent  Obligation"  shall mean, as to any Person,  any  obligation of
such Person  guaranteeing  or intended to guarantee  any  Indebtedness,  leases,
dividends or other obligations ("primary  obligations") of any other Person (the
"primary  obligor") in any manner,  whether  directly or indirectly,  including,
without  limitation,  any obligation of such Person,  whether or not contingent,
(i) to purchase any such primary obligation or any property  constituting direct
or  indirect  security  therefor,  (ii) to advance  or supply  funds (x) for the
purchase or payment of any such primary  obligation  or (y) to maintain  working
capital or equity  capital of the primary  obligor or  otherwise to maintain the
net worth or  solvency  of the  primary  obligor,  (iii) to  purchase  property,
securities  or services  primarily  for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary  obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof;  provided,  however,
that  the  term  Contingent   Obligation  should  not  include  endorsements  of
instruments  for deposit or collection in the ordinary  course of business.  The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent  Obligation  is made or, if not stated or  determinable,  the maximum
reasonably  anticipated  liability in respect  thereof  (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

     "Continuing  Director"  at any date,  shall  mean an  individual  who was a
member of the Board of Directors of RSI or the Borrower,  as the case may be, on
the  Restatement  Effective  Date or who  shall  have  become a  member  thereof
subsequent  to such date after having been  nominated  or otherwise  approved in
writing by at least a majority of the  Continuing  Directors then members of the
Board of Directors of RSI or the Borrower, as the case may be.

     "Convertible  Preferred  Stock" shall have the meaning  provided in Section
6.14.

     "Corporate  Pledge  Agreement"  shall have the meaning  provided in Section
4.07.

     "Credit  Documents"  shall mean this  Agreement,  each Note, each Notice of
Borrowing,  each Notice of  Conversion,  each  Letter of Credit,  each Letter of
Credit Request, the Subsidiaries Guaranty, each Security Document and any letter
agreements or other documents executed in connection with any of the above.

     "Credit  Event"  shall mean the making of any Loan or the  issuance  of any
Letter of Credit.

     "Credit Party" shall mean the Borrower and each of its  Subsidiaries  party
to a Subsidiaries Guaranty.

     "Debt Agreements" shall have the meaning provided in Section 4.05.

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

     "Defaulting  Bank" shall mean any Bank with respect to which a Bank Default
is then in effect.

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     "Dividend"  with  respect  to any Person  shall  mean that such  Person has
declared or paid a dividend or returned any equity  capital to its  stockholders
(including,  without  limitation,  its preferred  stockholders) or authorized or
made any other distribution,  payment or delivery of property (other than common
stock  of  such  Person)  or cash  to its  stockholders  in  their  capacity  as
stockholders, or redeemed, retired, purchased or otherwise acquired, directly or
indirectly,  for a  consideration  any shares of any class of its capital  stock
outstanding  on or after  the  Restatement  Effective  Date (or any  options  or
warrants issued by such Person with respect to its capital stock),  or set aside
any funds for any of the foregoing purposes,  or shall have permitted any of its
Subsidiaries to purchase or otherwise  acquire for a consideration any shares of
any  class of the  capital  stock of such  Person  outstanding  on or after  the
Restatement  Effective  Date (or any options or  warrants  issued by such Person
with respect to its capital stock). Without limiting the foregoing,  "Dividends"
with respect to any Person shall also include all cash payments made or required
to be made by such Person with respect to any stock appreciation rights,  equity
incentive  plans or any  similar  plans or  setting  aside of any  funds for the
foregoing purposes.

     "Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.

     "Drawing" shall have the meaning provided in Section 1A.05(b).

     "Eligible  Transferee" shall mean and include a commercial bank,  financial
institution,  collaterized loan investment vehicle,  fund,  insurance company or
other  "accredited  investor" (as defined in Regulation D of the Securities Act)
other than individuals,  or a "qualified institutional buyer" as defined in Rule
144A of the Securities Act.

     "Employee Benefit Plans" shall have the meaning provided in Section 4.05.

     "Employee  Stock  Proceeds"  shall  have the  meaning  provided  in Section
3.02(A)(e).

     "Employee Stock Proceeds Payment Period" shall have the meaning provided in
Section 3.02(A)(e).

     "Employment Agreements" shall have the meaning provided in Section 4.05.

     "Environmental Claims" shall mean any and all administrative, regulatory or
judicial actions,  suits,  demands,  demand letters,  claims,  liens, notices of
noncompliance or violation, investigations or proceedings relating in any way to
any  violation  of, or  liability  under,  any  Environmental  Law or any permit
issued,  or any approval  given,  under any such  Environmental  Law (hereafter,
"Claims"), including, without limitation, (a) any and all Claims by governmental
or regulatory authorities for enforcement,  cleanup, removal, response, remedial
or other actions or damages  pursuant to any applicable  Environmental  Law, and
(b) any  and all  Claims  by any  third  party  seeking  damages,  contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous  Materials  arising from alleged injury or threat of injury to health,
safety or the environment.

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     "Environmental  Law"  shall  mean  any  Federal,  state,  foreign  or local
statute, law, rule, regulation,  ordinance,  code, policy and rule of common law
now or hereafter in effect (including,  without limitation,  the EPA guidance on
asbestos abatement and removal) and in each case as amended, and any judicial or
administrative  interpretation thereof, including any judicial or administrative
order, consent decree or judgment,  relating to the environment,  health, safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution  Control Act, as amended,  33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; the Safe Drinking  Water Act, 42 U.S.C.  ss. 3803 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the  Occupational  Safety
and Health Act, 29 U.S.C. ss. 651 et seq.; and any applicable state and local or
foreign counterparts or equivalents.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time, and the  regulations  promulgated  and rulings issued
thereunder.  Section  references to ERISA are to ERISA, as in effect at the date
of  this  Agreement,  and to any  subsequent  provisions  of  ERISA,  amendatory
thereof, supplemental thereto or substituted therefor.

     "ERISA  Affiliate"  shall mean each person (as  defined in Section  3(9) of
ERISA) which together with the Borrower or a Subsidiary of the Borrower would be
deemed to be a "single employer" (i) within the meaning of Section 414(b),  (c),
(m) or (o) of the Code or (ii) as a result of the  Borrower or a  Subsidiary  of
the Borrower being or having been a general partner of such person.

     "Eurodollar  Loan" shall mean each Loan designated as such by a Borrower at
the time of the incurrence thereof or conversion thereto.

     "Event of Default" shall have the meaning provided in Section 9.

     "Excess Cash Flow" shall mean, for any period, the remainder of (i) the sum
of (a) Adjusted  Consolidated Net Income for such period,  and (b) the decrease,
if any, in Adjusted  Working  Capital from the first day to the last day of such
period,  minus (ii) the sum of (a) the amount of cash Capital  Expenditures  (to
the extent  not  financed  with  Indebtedness  but not in excess of the  amounts
permitted pursuant to Section 8.08) made by the Borrower and its Subsidiaries on
a consolidated basis during such period,  (b) the amount of permanent  principal
payments of Indebtedness for borrowed money of the Borrower and its Subsidiaries
(other than  repayments of Loans);  provided  that  repayments of Loans shall be
deducted in  determining  Excess Cash Flow if such  repayments  were  applied to
Scheduled  Repayments  required to be made during  such  period,  were made as a
voluntary  prepayment  with  internally  generated  funds  (but in the case of a
voluntary prepayment of Revolving Loans or a voluntary prepayment of Acquisition
Loans  prior  to the  Acquisition  Loan  Termination  Date,  only to the  extent
accompanied by a voluntary  reduction to the Total  Revolving Loan Commitment or
to the  Total  Acquisition  Loan  Commitment,  as the case may be)  during  such
period,  (c) the amount of cash  expended in respect of  Permitted  Acquisitions
during such period (to the extent not financed  with  Indebtedness)  and (d) the
increase, if any, in Adjusted Working Capital from the first day to the last day
of such period.  In making the foregoing  determinations  under clause (i)(b) or
(ii)(d)  of the  immediately  preceding  sentence,  the  amount of the  Adjusted
Working Capital acquired as a

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result of each Permitted Acquisition which occurred during the respective period
for which  Excess Cash Flow is being  determined  shall have been deemed to have
been acquired on the first day of such period.

     "Excess Cash Flow Payment  Period" shall mean (a) the period  commencing on
the Acquisition  Loan  Termination Date and ending on the last day of the fiscal
year in which the Acquisition  Loan  Termination Date occurs and (b) each fiscal
year thereafter.

     "Existing  Credit  Agreement"  shall have the meaning provided in the first
WHEREAS clause of this Agreement.

     "Existing Indebtedness" shall have the meaning provided in Section 6.22.

     "Existing  Letters of Credit"  shall have the  meaning  provided in Section
1A.01.

     "Existing Effective Date" shall mean November 6, 1998.

     "Facing Fee" shall have the meaning provided in Section 3.01(b).

     "Federal Funds Rate" shall mean 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 the Agent from three Federal  Funds  brokers of recognized  standing
selected by the Agent.

     "Fees" shall mean all amounts payable pursuant to or referred to in Section
2.01.

     "Fixed  Charge  Coverage  Ratio" for any period shall mean the ratio of (x)
Consolidated EBITDA less the amount of all cash Capital Expenditures (other than
Capital  Expenditures (i) permitted  pursuant to the proviso in Section 8.08(a),
(ii) in connection with Permitted Acquisitions and (iii) included within the use
of proceeds from the Permitted Stock  Issuances and financed  therefrom) made in
cash by the  Borrower  or any of its  Subsidiaries  for such period to (y) Fixed
Charges for such period.

     "Fixed  Charges"  for any  period  shall  mean the sum of (i)  Consolidated
Interest  Expense for such period,  (ii) the aggregate  principal  amount of all
repayments  and,  without  duplication,  scheduled  repayments  of  Indebtedness
(including the principal  portion of rentals under Capitalized Lease Obligations
but  excluding  repayment  of  Revolving  Loans not  accompanied  by a permanent
reduction to the Total  Revolving Loan  Commitment  and excluding  repayments of
Acquisition Loans prior to the Acquisition Loan Termination Date not accompanied
by a permanent  reduction to the Total  Acquisition  Loan  Commitment) and (iii)
taxes paid by the Borrower and its Subsidiaries for such period (including taxes
paid  during  such period by the Person or  business,  division or product  line
acquired  by the  Borrower  or any of its  Subsidiaries  pursuant to a Permitted
Acquisition  during such  period;  provided,  however,  the amount of such taxes
shall be audited or otherwise  acceptable to the Agent and provided further that
if the Agent has not notified the Borrower on or prior to the fifth day prior to
the

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<PAGE>

consummation of the Permitted  Acquisition  that the Agent is not satisfied with
the amount of such taxes, the Agent shall be deemed to be so satisfied).

     "Foreign  Pension  Plan"  shall  mean any plan,  fund  (including,  without
limitation,  any  superannuation  fund) or other similar program  established or
maintained  outside the United States of America or any territory thereof by the
Borrower  or any one or more of its  Subsidiaries  primarily  for the benefit of
employees  of the  Borrower  or such  Subsidiaries  residing  outside the United
States of America,  which  plan,  fund or other  similar  program  provides,  or
results  in,  retirement  income,  a  deferral  of  income in  contemplation  of
retirement or payments to be made upon termination of employment, and which plan
is not subject to ERISA or the Code.

     "Guaranties"  shall  mean and  include  each of the  Subsidiary  Guaranties
executed by the Subsidiaries of the Borrower.

     "Guarantor" shall mean each Subsidiary of the Borrower.

     "Hazardous   Materials"   means  (a)   petroleum  or  petroleum   products,
radioactive  materials,  asbestos in any form that is or could  become  friable,
urea formaldehyde foam insulation, transformers or other equipment that contain,
dielectric fluid containing levels of polychlorinated  biphenyls, and radon gas;
(b) any  chemicals,  materials  or  substances  defined  as or  included  in the
definition of "hazardous  substances," "hazardous waste," "hazardous materials,"
"extremely   hazardous   substances,"   "restricted   hazardous  waste,"  "toxic
substances,"  "toxic  pollutants,"  "contaminants," or "pollutants," or words of
similar meaning and regulatory effect,  under any applicable  Environmental Law;
and (c) any  other  chemical,  material  or  substance,  exposure  to  which  is
prohibited, limited or regulated under applicable Environmental Laws.

     "Indebtedness" shall mean, as to any Person,  without duplication,  (i) all
indebtedness  (including principal,  interest,  fees and charges) of such Person
for borrowed  money or for the deferred  purchase  price of property or services
other than trade payables,  (ii) the maximum amount  available to be drawn under
all  letters  of credit  issued for the  account  of such  Person and all unpaid
drawings in respect of such  letters of credit,  (iii) all  Indebtedness  of the
types described in clause (i), (ii),  (iv),  (v), (vi),  (vii) or (viii) of this
definition secured by any Lien on any property owned by such Person,  whether or
not such  Indebtedness  has been  assumed by such Person,  (iv) all  Capitalized
Lease  Obligations of such Person,  (v) all  obligations of such Person to pay a
specified  purchase  price for goods or  services,  whether or not  delivered or
accepted,  i.e.,  take-or-pay  and  similar  obligations,  (vi)  all  Contingent
Obligations  of such Person and (vii) all  obligations  under any Interest  Rate
Protection  or Other  Hedging  Agreement  or under any similar type of agreement
entered  into  with a  Person  not a Bank;  provided,  however,  that  the  Cash
Collateral  Account and Cash  Collateral held thereunder and all tenant security
deposits shall not be considered Indebtedness.

     "Indemnified Matters" shall have the meaning provided in Section 12.01.

     "Indemnitees" shall have the meaning provided in Section 12.01.

     "Initial  Eurodollar  Loan  Borrowing  Date" shall mean a date occurring at
least three Business Days following the  Restatement  Effective Date and no more
than seven days

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<PAGE>

following  the  Restatement  Effective  Date on which a Borrowing of  Eurodollar
Loans occurs or on which a conversion of Base Rate Loans into  Eurodollar  Loans
occurs;  provided,  however,  there  may  only be one  Initial  Eurodollar  Loan
Borrowing Date.

     "Intellectual Property" shall have the meaning provided in Section 6.21.

     "Intercompany Agreement" shall mean the Intercompany Agreement, dated as of
December  31, 1998 by and between  Alliance  National  Incorporated  and Reckson
Service Industries, Inc.

     "Interest  Determination  Date" shall mean,  with respect to any Eurodollar
Loan, the second  Business Day prior to the  commencement of any Interest Period
relating to such Eurodollar Loan.

     "Interest Period" shall have the meaning provided in Section 1.09.

     "Interest  Rate  Protection  or Other  Hedging  Agreements"  shall have the
meaning provided in the Security Documents.

     "International  Locations"  shall mean the  office  locations  outside  the
United States and Permitted  Acquisitions  made outside the United States of the
Borrower and its Subsidiaries.

     "Investor Group" shall mean Cahill,  Warnock Strategic  Partners Fund, L.P.
and Northwood Ventures, Northwood Capital Partners, LLC, Kuhn, Loeb & Co., Henry
T. Wilson, Interoffice Superholdings LLC, Reckson Office Centers LLC and RSI and
its  Affiliates.

     "IPO" shall have the meaning provided in Section 3.02(A)(e).

     "Issuing  Bank" shall mean Paribas and any Bank which at the request of the
Borrower agrees,  in such Bank's sole discretion,  to become an Issuing Bank for
the  purpose  of  issuing  Letters of Credit  pursuant  to Section  1A. The sole
Issuing Bank on the Restatement Effective Date is Paribas.

     "L/C Supportable  Indebtedness"  shall mean (i) obligations of the Borrower
or any of its  Subsidiaries  incurred in the  ordinary  course of business  with
respect  to  workers  compensation,  surety  bonds and other  similar  statutory
obligations and security  deposits for landlords and (ii) such other obligations
of the Borrower or any of its  Subsidiaries as are reasonably  acceptable to the
Issuing  Bank and  otherwise  permitted  to exist  pursuant to the terms of this
Agreement.

     "Leaseholds" of any Person means all the right,  title and interest of such
Person as lessee or  licensee  in,  to and  under  leases or  licenses  of land,
improvements and/or fixtures.

     "Letter of Credit" shall have the meaning provided in Section 1A.01(a).

     "Letter of Credit Fee" shall have the meaning provided in Section 3.01(c).

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<PAGE>

     "Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit and (ii) the amount
of all Unpaid Drawings.

     "Letter of Credit  Request"  shall  have the  meaning  provided  in Section
1A.03(a).

     "Leverage  Ratio" shall mean the ratio of  Consolidated  Indebtedness as at
the date of  measure to  Consolidated  EBITDA  for the four  consecutive  fiscal
quarters ending nearest to the date of measure.

     "Lien" shall mean any mortgage, pledge, hypothecation,  assignment, deposit
arrangement,  encumbrance,  lien (statutory or other),  preference,  priority or
other security  agreement of any kind or nature whatsoever  (including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  or  similar  statement  or  notice  filed  under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).

     "LLC Pledge Agreement" shall have the meaning provided in Section 4.07.

     "Loan" shall mean each Term Loan, each Revolving Loan and each  Acquisition
Loan.

     "Management Agreements" shall have the meaning provided in Section 4.05.

     "Margin Stock" shall have the meaning provided in Regulation U.

     "Material Contracts" shall have the meaning provided in Section 4.05.

     "Maturity Date" with respect to a Tranche shall mean either the A Term Loan
Maturity Date, B Term Loan Maturity Date, the Acquisition  Loan Maturity Date or
the Revolving Loan Maturity Date, as the case may be.

     "Minimum  Borrowing  Amount" shall mean (i) for Base Rate Loans,  $500,000,
and (ii) for Eurodollar Loans, $1,000,000.

     "Multiemployer  Plan"  shall  mean any  multiemployer  plan as  defined  in
Section  4001(a)(3) of ERISA,  which is maintained or  contributed  to by (or to
which there is an obligation  to contribute  of) the Borrower or a Subsidiary of
the Borrower or an ERISA Affiliate,  and each such plan for the five year period
immediately  following the latest date on which the Borrower, or a Subsidiary of
the  Borrower  or an  ERISA  Affiliate  maintained,  contributed  to or  had  an
obligation to contribute to such plan.

     "Net Sale  Proceeds"  shall  mean for any sale of  assets,  the gross  cash
proceeds  (including any cash received by way of deferred  payment pursuant to a
promissory  note,  receivable  or  otherwise,  but  only as and  when  received)
received from such sale, net of reasonable transaction costs (including, without
limitation, attorneys' fees), the amount of such gross cash proceeds required to
be used to permanently repay any Indebtedness which is secured

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<PAGE>

by the respective assets which were sold, and the estimated marginal increase in
income  taxes which will be payable by the  Borrower's  consolidated  group as a
result of such sale.

     "Note" shall mean each A Term Note, each B Term Note, each Acquisition Note
and each Revolving Note.

     "Notice of Borrowing" shall have the meaning provided in Section 1.03(a).

     "Notice of Conversion" shall have the meaning provided in Section 1.06.

     "Notice  Office"  shall mean the office of the Agent located at 787 Seventh
Avenue, New York, New York 10019,  Attention:  Michael P. Gebauer, or such other
office as the Agent may  hereafter  designate  in  writing  as such to the other
parties hereto.

     "Obligations"  shall mean all amounts  owing to the Agent,  the  Collateral
Agent or any Bank  pursuant to the terms of this  Agreement  or any other Credit
Document.

     "Original Effective Date" shall mean January 16, 1997.

     "Original Credit  Agreement" shall mean the Credit  Agreement,  dated as of
January 16, 1997,  among the  Borrower,  the Banks party  thereto and the Agent.

     "Paribas" shall mean Paribas  (formerly known as Banque Paribas),  a French
banking organization acting through its New York Branch.

     "Participant" shall have the meaning provided in Section 1A.04(a).

     "Payment  Office" shall mean the office of the Agent located at 787 Seventh
Avenue,  New York,  New York 10019,  Attention:  Robyn  Gewanter,  or such other
office as the Agent may  hereafter  designate  in  writing  as such to the other
parties hereto.

     "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation  established
pursuant to Section 4002 of ERISA, or any successor thereto.

     "Percentage" of any Bank at any time shall mean a fraction  (expressed as a
percentage) the numerator of which is the Revolving Loan Commitment of such Bank
at such time and the denominator of which is the Total Revolving Loan Commitment
at such time;  provided  that if the  Percentage of any Bank is to be determined
after  the  Total  Revolving  Loan  Commitment  has  been  terminated,  then the
Percentages  of the Banks shall be  determined  immediately  prior (and  without
giving effect) to such termination.

     "Permitted  Acquisition"  shall mean (I) the acquisition by the Borrower or
any of its  Subsidiaries of assets (but not Real Property other than Leaseholds)
constituting all or substantially all of a business,  business unit, division or
product line of any Person not already a  Subsidiary  of the Borrower or 100% of
the capital stock of any such Person,  although any such acquisition  shall only
be a Permitted  Acquisition so long as (A) the  consideration  therefor consists
solely of funds in the Cash Collateral Account,  Acquisition Loans, issuances of
Borrower Common Stock, Seller Preferred Stock, Permitted Seller Notes, Permitted
Earn-Out

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<PAGE>

Debt and the assumption of Capitalized  Lease  Obligations  and tenant  security
deposits;  (B) the assets acquired, or the business of the Person whose stock is
acquired,  shall be in a Permitted  Business;  (C) those  acquisitions  that are
structured as asset acquisitions  shall be consummated  through a new Subsidiary
formed  by  the  Borrower,  which  shall  be a  Wholly-Owned  Subsidiary  of the
Borrower,  to  effect  such  acquisition  and (D)  those  acquisitions  that are
structured as stock acquisitions shall be effected through a purchase of 100% of
the capital stock of such Person by the Borrower or a newly formed  Wholly-Owned
Subsidiary  or through a merger  between such Person and a  newly-formed  direct
Wholly-Owned  Subsidiary  of the  Borrower,  as the case may be,  so that  after
giving  effect  to  such  merger  100% of the  capital  stock  of the  surviving
corporation  of such merger is owned by the  Borrower and (II)  Start-Up  Costs.
Notwithstanding  anything to the contrary contained in the immediately preceding
sentence,   an  acquisition  shall  be  a  Permitted  Acquisition  only  if  all
requirements of Section 7.15 with respect to Permitted Acquisitions are met with
respect thereto.

     "Permitted  Acquisition  Notice" shall have the meaning provided in Section
7.15(a)(ii).

     "Permitted  Business" shall mean the business of operating executive office
suite centers,  which shall include the outsourcing of office operations both on
an on-site and off-site basis and the outsourcing of business  support  services
for customers or clients of the Borrower or its Subsidiaries.

     "Permitted  Earn-Out Debt" shall mean Indebtedness of the Borrower incurred
in connection with a Permitted  Acquisition and in accordance with Section 7.15,
which  Indebtedness  is not secured by any assets of the  Borrower or any of its
Subsidiaries (including, without limitation, the assets so acquired) and is only
payable by the Borrower upon the passage of time (e.g.  non-compete payments) or
in the event certain future  performance  goals are achieved with respect to the
assets acquired; provided that such Indebtedness shall only constitute Permitted
Earn-Out Debt to the extent the terms of such  Indebtedness  expressly limit the
maximum  potential  liability of the Borrower with respect  thereto and all such
other terms shall be in form and substance satisfactory to the Agent.

     "Permitted  Equity Issuances" shall mean issuances of Borrower Common Stock
or  Seller  Preferred  Stock  by the  Borrower  as  consideration  in  Permitted
Acquisitions, but only to the extent permitted pursuant to Section 7.15.

     "Permitted Liens" shall have the meaning provided in Section 8.01.

     "Permitted Seller Notes" shall mean notes in an aggregate  principal amount
of  $2,000,000  issued  by the  Borrower  to  sellers  of stock or  assets  in a
Permitted  Acquisition and issued in accordance  with Section 7.15,  which notes
may be senior but shall be unsecured and unguaranteed, and shall otherwise be in
form and substance satisfactory to the Agent.

     "Permitted  Stock  Issuances"  shall mean the sale by the Borrower of up to
$30,000,000  of its  Convertible  Preferred  Stock,  which includes the Required
Equity  Issuance,   on  terms  and  conditions  and  pursuant  to  documentation
satisfactory to the Agent and the Required Banks,  the proceeds of which will be
used for general corporate and working capital purposes

                                       90

<PAGE>

and to effect  Permitted  Acquisitions  and which is sold  within 60 days of the
Restatement Effective Date.

     "Person" shall mean any individual, limited liability company, partnership,
joint venture, firm, corporation,  association, trust or other enterprise or any
government or political subdivision or any agency, department or instrumentality
thereof.

     "Plan"  shall mean any pension  plan,  as defined in Section 3(2) of ERISA,
which is maintained or  contributed to by (or to which there is an obligation to
contribute of) the Borrower, a Subsidiary of the Borrower or an ERISA Affiliate,
and each such plan for the five year  period  immediately  following  the latest
date on which the Borrower,  a Subsidiary of the Borrower or an ERISA  Affiliate
maintained, contributed to or had an obligation to contribute to such plan.

     "Pledge  Agreements"  shall mean and include the Corporate Pledge Agreement
and the LLC Pledge Agreement.

     "Pledge Agreement Collateral" shall mean all "Collateral" as defined in the
Pledge Agreements.

     "Pledged  Limited  Liability  Company  Interests"  shall  have the  meaning
assigned to that term in the LLC Pledge Agreement.

     "Pledged  Securities"  shall  have the  meaning  assigned  that term in the
Corporate Pledge Agreement.

     "Prime  Lending  Rate" shall mean the rate which The Chase  Manhattan  Bank
announces from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes.  The Prime Lending Rate is a
reference  rate and does not  necessarily  represent  the  lowest  or best  rate
actually  charged to any customer by Banque Paribas or The Chase Manhattan Bank,
who may make  commercial  loans or other loans at rates of interest at, above or
below the Prime Lending Rate.

     "Product  Agreements"  shall have the meaning  provided in the Intercompany
Agreement.

     "Pro Forma Basis" shall mean,  with respect to any  Permitted  Acquisition,
the calculation of the consolidated results of the Borrower and its Subsidiaries
otherwise  determined in  accordance  with this  Agreement as if the  respective
Permitted Acquisition (and all other Permitted  Acquisitions  consummated during
the  respective  Calculation  Period  or  thereafter  and  prior  to the date of
determination  pursuant to Section  7.15 or other  applicable  provision of this
Agreement)  had been  effected  on the first day of the  respective  Calculation
Period;  provided  that all  calculations  shall take into account the following
assumptions:

          (i)  if any  Indebtedness  is  incurred  pursuant  to  the  respective
     Permitted  Acquisition (or was incurred in any other Permitted  Acquisition
     which  occurred  during the relevant  Calculation  Period or thereafter and
     prior to the date of  determination)  then all such  Indebtedness  shall be
     deemed to have been outstanding from the first day of the

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     respective  Calculation  Period (and the interest  expense  associated with
     such  Indebtedness,  shall be  determined  at the actual  rates  applicable
     thereto or which would have been applicable had such debt been  outstanding
     for the whole such period and shall be included in determining Consolidated
     Interest  Expense on such Pro Forma  Basis) and all  Indebtedness  that was
     outstanding  during the  Calculation  Period or thereafter and prior to the
     date of the Permitted  Acquisition  but not  outstanding on the date of the
     Permitted  Acquisition  shall be deemed to have been  repaid in full on the
     first day of the Calculation Period; and

          (ii) (a) all  calculations  of  Consolidated  EBITDA  (and  the  other
     components of the definition of Consolidated EBITDA included therein) shall
     include only the  Consolidated  EBITDA of the Borrower and its Subsidiaries
     (and the other components of the definition of Consolidated EBITDA included
     therein) during the relevant  Calculation  Period and shall not include any
     Consolidated  EBITDA  (or other  components)  of the  Person  or  business,
     division  or  product  line  being  acquired   pursuant  to  the  Permitted
     Acquisition  unless  either (x) such  Consolidated  EBITDA of the Person or
     business,  division or product line being acquired has been audited for the
     entire  Calculation  Period by any of the "big  five" or (y) in the case of
     calculations based on unaudited  financial  statements,  (i) adjustments to
     Consolidated  EBITDA with respect to each Permitted  Acquisition shall only
     include (A) immediate cost reductions associated with overhead eliminations
     and (B)  adjustments  to  reflect  the  Borrower's  contractual  rates  for
     services  (rather  than the  former  owners'  rates)  whether  additive  or
     deductive  to  Consolidated  EBITDA and (ii) the Agent shall be  reasonably
     satisfied  with  the  amounts  of   Consolidated   EBITDA  (and  the  other
     components)  of such Person or  business,  division  or product  line being
     acquired  pursuant  to  the  respective  Permitted  Acquisition;  provided,
     however,  that so long as the Borrower has furnished the Agent all relevant
     information  with  respect  to the  amount of  Consolidated  EBITDA of such
     Person or business, division or product line being acquired pursuant to the
     respective  Permitted  Acquisition,  if the  Agent  has  not  notified  the
     Borrower  on or prior to the  fifth day  prior to the  consummation  of the
     Permitted  Acquisition  that the Agent is not satisfied  with the amount of
     Consolidated  EBITDA, the Agent shall be deemed for purposes of this clause
     (ii) to be so satisfied.

          "Projections" shall have the meaning provided in Section 4.15.

          "Quarterly  Payment  Date"  shall mean the last  Business  Day of each
     March, June, September and December of each calendar year.

          "Quoted  Rate" shall mean (a) the  offered  quotation  to  first-class
     banks in the New York  interbank  Eurodollar  market  by the Agent for U.S.
     dollar deposits of amounts in immediately available funds comparable to the
     outstanding  principal amount of the Eurodollar Loan of the Agent for which
     an interest rate is then being determined with maturities comparable to the
     Interest  Period  applicable to such Eurodollar Loan determined as of 10:00
     a.m.  (New York time) on the date which is two  Business  Days prior to the
     commencement  of such Interest  Period,  divided (and rounded upward to the
     next whole multiple of 1/16 of 1%) by (b) a percentage  equal to 100% minus
     the  then  stated  maximum  rate of all  reserve  requirements  (including,
     without limitation, any marginal, emergency, supplemental, special or other
     reserves) applicable to any

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member bank of the Federal Reserve System in respect of Eurocurrency  funding or
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).

     "RCRA" shall mean the Resource  Conservation  and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. ss. 6901 et seq.

     "Real Property" of any Person shall mean all the right,  title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.

     "Reckson Loan" shall mean the loan by Reckson Service  Industries,  Inc. to
the Borrower as evidenced by a Subordinated Promissory Note, dated May 21, 1999,
in favor of  Reckson  Service  Industries,  Inc.  in the  amount of  $6,000,000.
"Reckson  Mergers" shall mean the mergers pursuant to (i) the Agreement and Plan
of Merger, by and among Alliance National Incorporated, Alliance Holdings, Inc.,
Interoffice Superholdings Corporation and Interoffice Superholdings LLC and (ii)
the Agreement and Plan of Merger by and among  Alliance  National  Incorporated,
ANI Holdings,  Inc., Reckson Executive Centers, Inc. And Reckson Office Centers,
LLC.

     "Recovery  Event" shall mean the receipt by the Borrower or any  Subsidiary
of the Borrower of any cash  insurance  proceeds from key-man life  insurance or
liability   insurance  or  insurance  payable  by  reason  of  theft,   physical
destruction  or damage or any other similar event with respect to any properties
or assets of the Borrower or any Subsidiary of the Borrower (including,  without
limitation, business interruption insurance).

     "Register" shall have its meaning provided in Section 7.16.

     "Regulation  D" shall mean  Regulation  D of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.

     "Regulation  T" shall mean  Regulation  T of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Regulation  U" shall mean  Regulation  U of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Regulation  X" shall mean  Regulation  X of the Board of  Governors of the
Federal  Reserve  System as from time to time in effect and any successor to all
or a portion thereof.

     "Related  Fund"  shall mean,  with  respect to any Bank that is a fund that
invests  in loans,  any other  fund that  invests in loans and is managed by the
same  investment  advisor  as such Bank or by an  Affiliate  of such  investment
advisor.

     "Release"  means  disposing,  discharging,  injecting,  spilling,  pumping,
leaking, leaching,  dumping,  emitting,  escaping,  emptying,  seeping, placing,
pouring  and the  like,  into or upon any land or  water  or air,  or  otherwise
entering into the environment.

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     "Replaced Bank" shall have the meaning provided in Section 1.12.

     "Replacement Bank" shall have the meaning provided in Section 1.12.

     "Reportable  Event"  shall mean an event  described  in Section  4043(c) of
ERISA with  respect  to a Plan that is  subject to Title IV of ERISA  other than
those events as to which the 30-day  notice  period is waived  under  subsection
 .22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.

     "Required A Facility Banks" shall mean Banks the sum of whose outstanding A
Term Loans represent an amount greater than 50% of all outstanding A Term Loans.

     "Required  Acquisition  Facility  Banks"  shall mean Banks the sum of whose
Acquisition Loan Commitments (or after the termination thereof, the sum of whose
Acquisition Loans) represent an amount greater than 50% of the Total Acquisition
Loan Commitment (or, after the Acquisition Loan Termination  Date, the Banks the
sum of whose outstanding  Acquisition Loans represent an amount greater that 50%
of all outstanding Acquisition Loans made by all Banks).

     "Required B Facility Banks" shall mean Banks the sum of whose outstanding B
Term Loans  represent an amount greater than 50% of the sum of all outstanding B
Term Loans made by all Banks.

     "Required  Banks"  shall  mean  Banks the sum of whose  outstanding  A Term
Loans, B Term Loans,  Acquisition  Loan  Commitments  (or after the  termination
thereof, the sum of outstanding  Acquisition Loans),  Revolving Loan Commitments
(or after the termination  thereof,  the sum of outstanding  Revolving Loans and
Letter of Credit Outstandings),  represent an amount greater than 50% of the sum
of all  outstanding  A Term Loans,  B Term  Loans,  the Total  Acquisition  Loan
Commitment  (or  after  the  termination  thereof,  the  sum of the  then  total
outstanding Acquisition Loans) and the Total Revolving Loan Commitment (or after
the termination thereof,  the sum of the then total outstanding  Revolving Loans
and Letter of Credit Outstandings).

     "Required Equity Issuance" shall have the meaning provided in Section 4.18.

     "Restatement  Effective  Date" shall have the  meaning  provided in Section
12.10.

     "Returns" shall have the meaning provided in Section 6.09.

     "Revolving Loan Commitment" shall mean, for each Bank, the amount set forth
opposite  such  Bank's  name on  Schedule  I hereto  directly  below the  column
entitled  "Revolving Loan  Commitment," as same may be (x) reduced or terminated
from time to time pursuant to Sections 2.02,  3.02 and/or 9 or (y) adjusted from
time to time as a result of assignments to or from such Bank pursuant to Section
1.12 or 12.04.

     "Revolving Loan Maturity Date" shall mean November 6, 2003.

     "Revolving Loans" shall have the meaning provided in Section 1.01(d).

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     "Revolving Note" shall have the meaning provided in Section 1.05(a)(iv).

     "RSI" shall mean Reckson Service Industries, Inc.

     "Scheduled  Acquisition  Loan Repayment" shall have the meaning provided in
Section 3.02(A)(d).

     "Scheduled   Repayment"   shall  have  the  meaning   provided  in  Section
3.02(A)(d).

     "Scheduled  A Term Loan  Repayment"  shall  have the  meaning  provided  in
Section 3.02(A)(b).

     "Scheduled  B Term Loan  Repayment"  shall  have the  meaning  provided  in
Section 3.02(A)(c).

     "SEC" shall have the meaning provided in Section 7.01(h).

     "Section  3.04(b)(ii)  Certificate"  shall  have the  meaning  provided  in
Section 3.04(b)(ii).

     "Secured  Creditors"  shall mean (x) the Banks,  the Agent,  the Collateral
Agent and (y) any Bank or any  Affiliate  of a Bank which on the date hereof is,
or subsequently becomes,  party to any Interest Rate Protection or Other Hedging
Agreement.

     "Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

     "Securities  Exchange Act" shall mean the Securities  Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

     "Security Agreement" shall have the meaning provided in Section 4.08.

     "Security  Agreement  Collateral" shall mean all "Collateral" as defined in
the Security Agreement.

     "Security  Documents"  shall  mean  the  Pledge  Agreements,  the  Security
Agreement,  the Concentration  Account Consent Letter,  each Additional Security
Document, the Cash Collateral Agreement and each Assignment of Leases and Rents.

     "Seller Preferred Stock" shall mean perpetual preferred stock issued by the
Borrower  which  preferred  stock has no mandatory  redemption,  sinking fund or
similar requirements,  pays no cash dividends, has no covenants or voting rights
other  than  voting  rights  or  covenants  equivalent  to that of the  Series A
Convertible  Preferred  Stock and Series B  Convertible  Preferred  Stock and is
otherwise acceptable in all respects to the Agent.

     "Series A Convertible  Preferred  Stock" shall have the meaning provided in
Section 6.14(a).

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     "Series B Convertible  Preferred  Stock" shall have the meaning provided in
Section 6.14(a).

     "Series C Convertible  Preferred  Stock" shall have the meaning provided in
Section 6.14.

     "Series D Convertible  Preferred  Stock" shall have the meaning provided in
Section 6.14.

     "Series E Convertible  Preferred  Stock" shall have the meaning provided in
Section 6.14.

     "Shareholders' Agreements" shall have the meaning provided in Section 4.05.

     "Start-Up Costs" shall mean expenditures incurred by the Borrower or any of
its  Subsidiaries  for  fixturing,  security  deposits to landlords  and working
capital in connection with the opening of new executive office suite centers.

     "Stated  Amount"  of each  Letter of Credit  shall,  at any time,  mean the
maximum  amount  available  to be drawn  thereunder  at such  time (in each case
determined  without  regard to whether any  conditions  to drawing could then be
met).

     "Subsidiaries Guaranty" shall have the meaning provided in Section 4.09.

     "Subsidiary"  shall mean, as to any Person,  (i) any corporation  more than
50% of whose stock of any class or classes having by the terms thereof  ordinary
voting  power  to  elect  a  majority  of  the  directors  of  such  corporation
(irrespective  of  whether  or not at the time  stock of any class or classes of
such  corporation  shall  have or  might  have  voting  power by  reason  of the
happening of any  contingency) is at the time owned by such Person and/or one or
more  Subsidiaries  of such  Person,  (ii) any  partnership,  limited  liability
company, association,  joint venture or other entity in which such Person and/or
one or more  Subsidiaries  of such Person has more than a 50% equity interest at
the time and (iii) any  partnership or limited  liability  company in which such
Person is the general partner or manager.

     "Syndication Termination Date" shall mean the earlier of (x) 120 days after
the  Restatement  Effective Date or (y) the date on which the Agent, in its sole
discretion,  determines (and notifies the Borrower) that the primary syndication
(and the resultant  addition of institutions as Banks pursuant to Section 12.04)
has been completed.

     "Tax Sharing Agreements" shall have the meaning provided in Section 4.05.

     "Taxes" shall have the meaning provided in Section 3.04(a).

     "Term Loan  Commitment"  shall mean each A Term Loan  Commitment and each B
Term Loan  Commitment,  with the Term Loan Commitment of any Bank at any time to
equal the sum of its A Term Loan  Commitment and B Term Loan  Commitment as then
in effect.

     "Term Loans" shall mean the A Term Loans and the B Term Loans.

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     "Total A Term Loan  Commitment"  shall mean, at any time, the sum of A Term
Loan Commitment of each of the Banks.

     "Total Acquisition Loan Commitment" shall mean, at any time, the sum of the
Acquisition Loan Commitments of each of the Banks.

     "Total B Term Loan  Commitment"  shall mean, at any time,  the sum of the B
Term Loan Commitments of each of the Banks.

     "Total  Commitment"  shall mean, at any time, the sum of the Commitments of
each of the Banks.

     "Total Revolving Loan  Commitment"  shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Banks.

     "Total Unutilized  Acquisition Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the then Total  Acquisition Loan Commitment
less (y) the aggregate principal amount of Acquisition Loans then outstanding.

     "Total  Unutilized  Revolving Loan Commitment"  shall mean, at any time, an
amount equal to the remainder of (x) the then Total  Revolving Loan  Commitment,
less the sum of (y) the  aggregate  principal  amount of  Revolving  Loans  then
outstanding and (z) the then aggregate amount of Letter of Credit Outstandings.

     "Tranche" shall mean the respective  facility and  commitments  utilized in
making Loans hereunder, with there being four separate Tranches, i.e., whether A
Term Loans, B Term Loans, Acquisition Loans or Revolving Loans.

     "Transaction"  shall  mean  collectively,   (i)  the  incurrence  of  Loans
hereunder  on  the  Restatement  Effective  Date,  (ii)  the  occurrence  of the
Restatement  Effective  Date,  (iii)  the  occurrence  of  the  Permitted  Stock
Issuances  and  (iv)  the  payment  of the  Transaction  Fees  and  Expenses  in
connection therewith.

     "Transaction  Fees and Expenses" shall mean all fees and expenses  incurred
in  connection  with and arising  out of the  Transaction  and the  transactions
contemplated thereby and hereby; provided, however, that the aggregate amount of
such fees and expenses shall not exceed $2,000,000 in the aggregate.

     "Type" shall mean the type of Loan  determined  with regard to the interest
option applicable thereto,  i.e., whether a Base Rate Loan or a Eurodollar Loan.

     "UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.

     "Unfunded Current  Liability" of any Plan shall mean the amount, if any, by
which value of the accumulated plan benefits under the Plan determined on a plan
termination  basis  in  accordance  with  actuarial  assumptions  at  such  time
consistent  with those  prescribed  by the PBGC for  purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets

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allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).

     "United  States" and "U.S."  shall each mean the United  States of America.
"Unpaid Drawing" shall have the meaning provided for in Section 1A.05(a).

     "Unutilized  Acquisition  Loan Commitment" for any Bank, at any time, shall
mean  the  Acquisition  Loan  Commitment  of such  Bank at such  time  less  the
aggregate  principal  amount  of  Acquisition  Loans  made by such Bank and then
outstanding.

     "Unutilized  Revolving Loan  Commitment"  for any Bank, at any time,  shall
mean the Revolving Loan Commitment of such Bank at such time less the sum of (i)
the  aggregate  principal  amount of Revolving  Loans made by such Bank and then
outstanding   and  (ii)  such  Bank's   Percentage   of  the  Letter  of  Credit
Outstandings.

     "Waivable  Mandatory  Repayment" shall have the meaning provided in Section
3.02(C).

     "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose  capital  stock is at the time owned by such Person  and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,  limited
liability  company,  association,  joint  venture or other  entity in which such
Person and/or one or more  Wholly-Owned  Subsidiaries  of such Person has a 100%
equity interest at such time.

     Section 11. The Agent.

     11.01  Appointment.  The  Banks  hereby  designate  Paribas  as Agent  (for
purposes  of this  Section 11, the term  "Agent"  shall  include  Paribas in its
capacity as  Collateral  Agent  pursuant to the  Security  Documents)  to act as
specified herein and in the other Credit Documents. Each Bank hereby irrevocably
authorizes,  and each holder of any Note by the acceptance of such Note shall be
deemed  irrevocably  to  authorize,  the Agent to take such action on its behalf
under the provisions of this Agreement, the other Credit Documents and any other
instruments  and  agreements  referred to herein or therein and to exercise such
powers and to perform such duties  hereunder and thereunder as are  specifically
delegated  to or required of the Agent by the terms  hereof and thereof and such
other powers as are reasonably  incidental thereto. The Agent may perform any of
its duties hereunder by or through its officers, directors, agents or employees.

     11.02 Nature of Duties. The Agent shall have no duties or  responsibilities
except those  expressly set forth in this Agreement and the Security  Documents.
Neither the Agent nor any of its officers,  directors, agents or employees shall
be liable for any action  taken or omitted by it or them  hereunder or under any
other Credit Document or in connection  herewith or therewith,  unless caused by
its or their gross  negligence  or willful  misconduct.  The duties of the Agent
shall be mechanical and  administrative  in nature;  the Agent shall not have by
reason of this Agreement or any other Credit  Document a fiduciary  relationship
in respect of any Bank or the holder of any Note;  and nothing in this Agreement
or any other Credit Document, expressed

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or implied,  is intended to or shall be so construed as to impose upon the Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein.

     11.03 Lack of Reliance  on the Agent.  Independently  and without  reliance
upon the Agent,  each Bank and the  holder of each Note,  to the extent it deems
appropriate,  has  made  and  shall  continue  to make  (i) its own  independent
investigation  of the  financial  condition  and affairs of the Borrower and its
Subsidiaries  in connection with the making and the continuance of the Loans and
the  participation  in  Letters  of Credit  and the  taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of the Borrower and its Subsidiaries  and, except as expressly  provided in this
Agreement,  the Agent shall have no duty or responsibility,  either initially or
on a  continuing  basis,  to provide any Bank or the holder of any Note with any
credit or other  information  with  respect  thereto,  whether  coming  into its
possession  before the making of the Loans, the  participation in the Letters of
Credit or at any time or times thereafter. The Agent shall not be responsible to
any Bank or the holder of any Note for any  recitals,  statements,  information,
representations  or warranties  herein or in any document,  certificate or other
writing  delivered in connection  herewith or for the execution,  effectiveness,
genuineness,  validity,  enforceability,  perfection, priority or sufficiency of
this  Agreement or any other Credit  Document or the financial  condition of the
Borrower or its  Subsidiaries  or be  required  to make any  inquiry  concerning
either  the  performance  or  observance  of  any of the  terms,  provisions  or
conditions  of this  Agreement or any other Credit  Document,  or the  financial
condition  of the  Borrower or its  Subsidiaries  or the  existence  or possible
existence of any Default or Event of Default.

     11.04 Certain Rights of the Agent. If the Agent shall request  instructions
from the Required Banks with respect to any act or action (including  failure to
act) in connection with this Agreement or any other Credit  Document,  the Agent
shall be  entitled to refrain  from such act or taking  such  action  unless and
until the Agent shall have received  instructions  from the Required Banks;  and
the Agent shall not incur  liability  to any Person by reason of so  refraining.
Without limiting the foregoing, no Bank or the holder of any Note shall have any
right of action whatsoever  against the Agent as a result of the Agent acting or
refraining  from  acting  hereunder  or  under  any  other  Credit  Document  in
accordance with the instructions of the Required Banks.

     11.05  Reliance.  The Agent shall be  entitled to rely,  and shall be fully
protected in relying,  upon any note, writing,  resolution,  notice,  statement,
certificate,  telex, teletype or facsimile message, cablegram,  radiogram, order
or other document or telephone  message signed,  sent or made by any Person that
the Agent  believed  to be the proper  Person,  and,  with  respect to all legal
matters  pertaining  to this  Agreement  and any other  Credit  Document and its
duties hereunder and thereunder, upon advice of counsel selected by it.

     11.06  Indemnification.  (a) To the extent the Agent is not  reimbursed and
indemnified  by the Borrower,  the Banks will reimburse and indemnify the Agent,
in proportion  to their  respective  "percentages"  as used in  determining  the
Required Banks,  for and against any and all liabilities,  obligations,  losses,
damages,  penalties,  claims,  actions,  judgments,  suits,  costs,  expenses or
disbursements  of  whatsoever  kind or nature which may be imposed on,  asserted
against or incurred by the Agent in performing its duties hereunder or under any
other Credit  Document,  in any way relating to or arising out of this Agreement
or any other  Credit  Document;  provided  that no Bank  shall be liable for any
portion of such liabilities, obligations, losses,

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damages, penalties,  actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct.

     (b) The Agent shall be fully  justified  in failing or refusing to take any
action hereunder and under any other Credit Document  (except actions  expressly
required to be taken by it  hereunder or under the Credit  Documents)  unless it
shall first be indemnified to its satisfaction by the Banks pro rata against any
and all  liability,  cost and  expense  that it may incur by reason of taking or
continuing to take any such action.

     11.07 The Agent in Its Individual Capacity.  With respect to its obligation
to make Loans under this  Agreement,  the Agent shall have the rights and powers
specified  herein for a "Bank" and may  exercise  the same  rights and powers as
though it were not performing the duties specified herein; and the term "Banks,"
"Required  Banks,"  "holders of Notes" or any similar  terms  shall,  unless the
context  clearly  otherwise  indicates,  include  the  Agent  in its  individual
capacity.  The Agent may accept  deposits  from,  lend  money to, and  generally
engage in any kind of banking,  trust or other business with any Credit Party or
any  Affiliate  of any  Credit  Party as if it were not  performing  the  duties
specified herein, and may accept fees and other  consideration from the Borrower
or any other Credit Party for services in connection with this Agreement and may
purchase  and hold equity  interests  in the  Borrower or any other Credit Party
without having to account for the same to the Banks and otherwise without having
to account for the same to the Banks.

     11.08  Holders.  The  Agent may deem and treat the payee of any Note as the
owner thereof for all purposes  hereof unless and until a written  notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Agent.  Any  request,  authority or consent of any Person 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,
transferee,  assignee  or  indorsee,  as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.

     11.09  Resignation  by the  Agent.  (a)  The  Agent  may  resign  from  the
performance  of all its  functions and duties  hereunder  and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice to
the  Borrower  and the  Banks.  Such  resignation  shall  take  effect  upon the
appointment  of a  successor  Agent  pursuant to clauses (b) and (c) below or as
otherwise provided below.

     (b) Upon any such notice of resignation, the Required Banks shall appoint a
successor  Agent hereunder or thereunder who shall be a commercial bank or trust
company  reasonably  acceptable to the Borrower (it being  understood and agreed
that any Bank is deemed to be acceptable to the Borrower).

     (c) If a successor  Agent shall not have been so  appointed  within such 15
Business Day period,  the Agent,  with the consent of the  Borrower,  shall then
appoint a successor Agent who shall serve as Agent hereunder or thereunder until
such time, if any, as the Banks appoint a successor Agent as provided above.

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     (d) If no successor Agent has been appointed  pursuant to clause (b) or (c)
above by the 30th  Business  Day after the date such notice of  resignation  was
given by the Agent, the Agent's resignation shall become effective and the Banks
shall thereafter  perform all the duties of the Agent hereunder and/or under any
other Credit  Document until such time, if any, as the Banks appoint a successor
Agent as provided above.

     Section 12. Miscellaneous.

     12.01 Payment of Expenses, etc. The Borrower, agrees to: (i) whether or not
the  transactions  herein  contemplated  are  consummated,  pay  all  reasonable
out-of-pocket  costs and expenses of the Agent (including,  without  limitation,
the reasonable fees and  disbursements of White & Case LLP and local counsel) in
connection  with the  preparation,  execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments  referred to herein
and therein and any amendment,  waiver or consent relating hereto or thereto, of
the Agent in  connection  with its  syndication  efforts  with  respect  to this
Agreement (including,  without limitation, the reasonable fees and disbursements
of White & Case LLP) and of the Agent and each of the Banks in  connection  with
the  enforcement  of this  Agreement  and the  other  Credit  Documents  and the
documents and  instruments  referred to herein and therein  (including,  without
limitation,  the reasonable fees and  disbursements of counsel for the Agent and
for each of the Banks);  (ii) pay and hold each of the Banks  harmless  from and
against any and all present and future  stamp,  excise and other  similar  taxes
with respect to the foregoing  matters and save each of the Banks  harmless from
and against any and all liabilities  with respect to or resulting from any delay
or  omission  (other than to the extent  attributable  to such Bank) to pay such
taxes; and (iii) defend, protect, indemnify and hold harmless the Agent and each
Bank,   and   each  of  their   respective   officers,   directors,   employees,
representatives,  attorneys and agents  (collectively  called the "Indemnitees")
from and  against any and all  liabilities,  obligations  (including  removal or
remedial  actions),  losses,  damages  (including  foreseeable and unforeseeable
consequential  damages  and  punitive  damages),   penalties,  claims,  actions,
judgments,  suits,  costs,  expenses  and  disbursements  (including  reasonable
attorneys'  and  consultants  fees  and  disbursements)  of any  kind or  nature
whatsoever  that may at any time be incurred by, imposed on or assessed  against
the Indemnitees  directly or indirectly  based on, or arising or resulting from,
or in any way related to, or by reason of (a) any  investigation,  litigation or
other proceeding  (whether or not the Agent, the Collateral Agent or any Bank is
a party thereto and whether or not any such  investigation,  litigation or other
proceeding is between or among the Agent,  the Collateral  Agent,  any Bank, the
Borrower or any third person or  otherwise)  related to the entering into and/or
performance  of this  Agreement or any other  Credit  Document or the use of any
Letter of Credit or the proceeds of any Loans  hereunder or the  consummation of
any  transactions  contemplated  herein  (including,   without  limitation,  the
Transaction)  or in any other  Credit  Document or the  exercise of any of their
rights or remedies provided herein or in the other Credit Documents; or, (b) the
actual or alleged  generation,  presence or Release of Hazardous Materials on or
from, or the transportation of Hazardous Materials to or from, any Real Property
owned or at any time operated by the Borrower or any of its Subsidiaries or; (c)
any  Environmental  Claim relating to the Borrower or any of its Subsidiaries or
any Real  Property  owned or at any time  operated by the Borrower or any of its
Subsidiaries  or;  (d) the  exercise  of the rights of the Agent and of any Bank
under any of the  provisions of this  Agreement or any other Credit  Document or
any  Letter of Credit or any Loans  hereunder;  or (e) the  consummation  of any
transaction contemplated herein (including,

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without  limitation,  the  Transaction)  or in any other  Credit  Document  (the
"Indemnified  Matters")  regardless of when such Indemnified  Matter arises, but
excluding  any such  Indemnified  Matter based the gross  negligence  or willful
misconduct of any Indemnitee.

     12.02 Right of Setoff.  In addition to any rights now or hereafter  granted
under  applicable  law or  otherwise,  and not by way of  limitation of any such
rights,  upon the occurrence and during the  continuance of an Event of Default,
each  Bank is  hereby  authorized  at any  time or from  time to  time,  without
presentment,  demand, protest or other notice of any kind to any Credit Party or
to any other Person,  any such notice being hereby expressly  waived, to set off
and to appropriate  and apply any and all deposits  (general or special) and any
other  Indebtedness at any time held or owing by such Bank  (including,  without
limitation,  by branches and agencies of such Bank  wherever  located) to or for
the credit or the  account of each  Credit  Party  against and on account of the
Obligations  and  liabilities  of such  Credit  Party to such  Bank  under  this
Agreement  or  under  any of the  other  Credit  Documents,  including,  without
limitation,  all  interests in  Obligations  purchased by such Bank  pursuant to
Section 12.06(b),  and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit  Document,  irrespective
of whether or not such Bank shall have made any demand  hereunder  and  although
said Obligations,  liabilities or claims, or any of them, shall be contingent or
unmatured.

     12.03 Notices.  Except as otherwise  expressly provided herein, all notices
and other  communications  provided for hereunder shall be in writing (including
telegraphic,  telex, facsimile or cable communication) and mailed,  telegraphed,
telexed,  telecopied,  cabled or delivered:  if to the Borrower,  at its address
specified opposite its signature below; if to any Bank, at its address specified
opposite its name below;  and if to the Agent,  at its Notice Office;  or, as to
any Credit Party or the Agent,  at such other  address as shall be designated by
such party in a written notice to the other parties hereto and, as to each Bank,
at such other address as shall be designated by such Bank in a written notice to
the Borrower  and the Agent.  All such notices and  communications  shall,  when
mailed,  telegraphed,  telexed,  facsimiled,  or  cabled  or sent  by  overnight
courier,  be effective 3 Business Days after deposited in the mails,  certified,
return receipt requested, when delivered to the telegraph company, cable company
or one day following  delivery to an overnight  courier,  as the case may be, or
sent by telex or facsimile device, except that notices and communications to the
Agent shall not be effective until received by the Agent.

     12.04 Benefit of Agreement.  (a) This  Agreement  shall be binding upon and
inure to the benefit of and be  enforceable  by the  respective  successors  and
assigns of the parties hereto; provided,  however, no Credit Party may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit  Document  without the prior written  consent of the Banks;  and provided
further, that although any Bank may transfer,  assign or grant participations in
its rights hereunder, such Bank shall remain a "Bank" for all purposes hereunder
(and may not transfer or assign all or any portion of its  Commitments  or Loans
hereunder except as provided in Section  12.04(b)) and the transferee,  assignee
or participant, as the case may be, shall not constitute a "Bank" hereunder; and
provided further,  that no Bank shall transfer or grant any participation  under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit  Document except to the extent such amendment
or waiver  would (i) extend the final  scheduled  maturity of any Loan,  Note or
Letter of Credit  (unless  such  Letter of  Credit is not  extended  beyond  the
Revolving Loan Maturity Date) in which

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such  participant  is  participating,  or reduce  the rate or extend the time of
payment of  interest  or Fees  thereon  (except in  connection  with a waiver of
applicability  of any  post-default  increase in  interest  rates) or reduce the
principal amount thereof,  or increase the Commitments in which such participant
is  participating  over the amount  thereof then in effect (it being  understood
that a waiver of any Default or Event of Default or of a mandatory  reduction in
the  Total  Commitment  shall  not  constitute  a  change  in the  terms  of any
Commitment,  and that an increase in any Commitment  shall be permitted  without
the  consent  of any  participant  if  the  participant's  participation  is not
increased as a result  thereof),  (ii) consent to the  assignment or transfer by
any Credit Party of any of its rights and  obligations  under this  Agreement or
(iii)  release  all or  substantially  all of the  Collateral  under  all of the
Security  Documents  (except as  expressly  provided  in the  Credit  Documents)
supporting the Loans hereunder in which such  participant is  participating.  In
the case of any such  participation,  the participant  shall not have any rights
under this  Agreement or any of the other Credit  Documents  (the  participant's
rights against such Bank in respect of such  participation to be those set forth
in the  agreement  executed  by such Bank in favor of the  participant  relating
thereto) and all amounts  payable by the Borrower  hereunder shall be determined
as if such Bank had not sold such participation.

     (b) Notwithstanding the foregoing,  any Bank (or any Bank together with one
or more other Banks) may (x) (A) pledge its Loans  and/or  Notes  hereunder to a
Federal  Reserve  Bank in  support  of  borrowings  made by such  Bank from such
Federal  Reserve Bank,  (B) at any time pledge or assign a security  interest in
all or any portion of its rights under this  Agreement to secure  obligations of
such Bank, including any pledge or assignment to secure obligations to a Federal
Reserve  Bank,  (or in the case of a Lender that is an  investment  fund, to the
trustee  under the  indenture  to which such fund is a party)  and this  Section
shall  not  apply to any such  pledge  or  assignment  of a  security  interest;
provided that no such pledge or assignment of a security  interest shall release
a Bank from any of its  obligations  hereunder or substitute any such pledgee or
assignee for such Bank as a party hereto,  or (C) assign all or a portion of its
Loans or Commitments and related outstanding Obligations hereunder to its parent
company, principal office and/or any Affiliate of such Bank or one or more other
Banks or to a Related  Fund or (y)  assign  all or a  portion  equal to at least
$2,500,000  (or lesser  amount if the Bank is pledging or assigning to a Related
Fund),  of  such  Loans  or  Commitments  and  related  outstanding  Obligations
hereunder to one or more  Eligible  Transferees  each of which  assignees  shall
become a party to this  Agreement as a Bank by execution  of an  assignment  and
assumption  agreement  substantially  in the form of  Exhibit  L  (appropriately
completed);  provided that: (i) at such time Schedule I shall be deemed modified
to reflect the Commitments of such new Bank and of the existing Banks;  (ii) new
Notes will be issued to such new Bank and to the assigning Bank upon the request
of such new Bank or assigning  Bank, such new Notes to be in conformity with the
requirements  of  Section  1.05 to the  extent  needed to  reflect  the  revised
Commitments; (iii) the consent of the Agent shall be required in connection with
any assignment  (provided,  however,  that no such consent by the Agent shall be
required in the case of any assignment to another Bank's Related Fund); (iv) the
consent of the  Borrower  shall be required in  connection  with any  assignment
(which consent shall not be unreasonably withheld);  provided,  however, no such
consent by the  Borrower  shall be required in  connection  with any  assignment
pursuant to clause (x) above and no such consent  shall be required if a Default
or Event of Default has occurred and (v) the Agent shall  receive at the time of
each such  assignment,  from the assigning Bank, the payment of a non-refundable
assignment fee of $3,000 (provided, however, that any fee shall be waived upon a
pledge or assignment to a Related Fund). To the extent of any assignment

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pursuant to this Section  12.04(b),  the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned  Commitments.  No transfer or
assignment  under this Section  12.04(b) will be effective until recorded by the
Agent on the Register  pursuant to Section 7.16. At the time of each  assignment
pursuant  to this  Section  12.04(b)  to a Person  which is not  already  a Bank
hereunder  and which is not a United  States  person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee  Bank shall  provide  to the  Borrower,  and the Agent the  appropriate
Internal  Revenue  Service  Forms (and,  if  applicable,  a Section  3.04(b)(ii)
Certificate)  required by Section  3.04(b).  In connection  with any  assignment
prior to the  Syndication  Termination  Date,  the  Borrower  agrees  to pay all
amounts to the  assignee  Bank which the  Borrower  would be obligated to pay in
accordance with Section 1.11 if such assignment was instead a repayment of Loans
by the Borrower on other than the last day of an Interest Period.

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

     12.06  Payments  Pro Rata.  (a) The Agent  agrees that  promptly  after its
receipt  of each  payment  from or on behalf of the  Borrower  in respect of any
Obligations  hereunder,  it shall  distribute such payment to the Banks pro rata
based upon their respective  shares,  if any, of the Obligations with respect to
which such payment was received.

     (b) Except in  accordance  with Section  3.02(C),  each of the Banks agrees
that, if it should receive any amount hereunder  (whether by voluntary  payment,
by realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Credit  Documents,  or  otherwise),  which is  applicable  to the payment of the
principal of, or interest on, the Loans, Unpaid Drawings or Fees, of a sum which
with respect to the related sum or sums  received by other Banks is in a greater
proportion  than the  total of such  Obligation  then  owed and due to such Bank
bears to the  total of such  Obligation  then  owed and due to all of the  Banks
immediately prior to such receipt,  then such Bank receiving such excess payment
shall  purchase  for cash without  recourse or warranty  from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in such
amount as shall result in a proportional  participation by all the Banks in such
amount;  provided that if all or any portion of such excess amount is thereafter
recovered  from such Bank,  such  purchase  shall be rescinded  and the purchase
price restored to the extent of such recovery, but without interest.

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     12.07  Calculations;  Computations.  (a)  The  financial  statements  to be
furnished to the Banks pursuant  hereto shall be made and prepared in accordance
with generally accepted accounting  principles in the United States consistently
applied  throughout  the  periods  involved  (except  as set  forth in the notes
thereto or as  otherwise  disclosed  in writing  by the  Borrower  to the Banks;
provided  that,   except  as  otherwise   specifically   provided  herein,   all
computations  of Excess Cash Flow and all  computations  determining  compliance
with Sections 8.04 and 8.08 through 8.12,  inclusive,  including the definitions
used therein,  shall utilize  accounting  principles  and policies in conformity
with those used to prepare the  historical  financial  statements for the fiscal
year ended December 31, 1998 delivered to the Banks pursuant to Section 4.15.

     (b) All  computations  of interest and Fees hereunder  shall be made on the
basis of a year of 360 days for the actual number of days  (including  the first
day but excluding the last day)  occurring in the period for which such interest
or Fees are payable.

     12.08  GOVERNING LAW;  SUBMISSION TO  JURISDICTION;  VENUE;  WAIVER OF JURY
TRIAL.  (a) THIS  AGREEMENT  AND THE OTHER CREDIT  DOCUMENTS  AND THE RIGHTS AND
OBLIGATIONS  OF THE PARTIES  HEREUNDER  AND  THEREUNDER  SHALL,  BE CONSTRUED IN
ACCORDANCE  WITH AND BE  GOVERNED  BY THE LAW OF THE STATE OF NEW YORK,  WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF EXCEPT AS OTHERWISE  SPECIFIED
IN SUCH DOCUMENTS. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER  CREDIT  DOCUMENT  MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED  STATES FOR THE  SOUTHERN  DISTRICT  OF NEW YORK,  AND, BY
EXECUTION  AND  DELIVERY OF THIS  AGREEMENT,  THE  BORROWER  HEREBY  IRREVOCABLY
ACCEPTS   FOR   ITSELF  AND  IN  RESPECT   OF  ITS   PROPERTY,   GENERALLY   AND
UNCONDITIONALLY,  THE  EXCLUSIVE  JURISDICTION  OF  THE  AFORESAID  COURTS.  THE
BORROWER  HEREBY  IRREVOCABLY  DESIGNATES,  APPOINTS  AND  EMPOWERS  CORPORATION
SERVICE COMPANY WITH OFFICES ON THE DATE HEREOF AT 500 CENTRAL  AVENUE,  ALBANY,
NEW YORK 12206-2290 AS ITS DESIGNEE,  APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE  FOR AND ON ITS BEHALF,  AND IN RESPECT OF ITS PROPERTY,  SERVICE OF
ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING.  IF FOR ANY REASON SUCH  DESIGNEE,  APPOINTEE AND
AGENT SHALL CEASE TO BE  AVAILABLE TO ACT AS SUCH,  AND THE  BORROWER  AGREES TO
DESIGNATE A NEW DESIGNEE,  APPOINTEE AND AGENT ON THE TERMS AND FOR THE PURPOSES
OF THIS PROVISION  SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT.  THE BORROWER
FURTHER  IRREVOCABLY  CONSENTS  TO  THE  SERVICE  OF  PROCESS  OUT OF ANY OF THE
AFOREMENTIONED  COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS
ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE
30 DAYS AFTER SUCH MAILING.  NOTHING  HEREIN SHALL AFFECT THE RIGHT OF THE AGENT
UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF

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ANY NOTE TO SERVE  PROCESS IN ANY OTHER  MANNER  PERMITTED BY LAW OR TO COMMENCE
LEGAL  PROCEEDINGS  OR OTHERWISE  PROCEED  AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.

     (b) THE BORROWER HEREBY  IRREVOCABLY  WAIVES ANY OBJECTION WHICH IT MAY NOW
OR  HEREAFTER  HAVE TO THE  LAYING OF VENUE OF ANY OF THE  AFORESAID  ACTIONS OR
PROCEEDINGS  ARISING OUT OF OR IN  CONNECTION  WITH THIS  AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER  IRREVOCABLY  WAIVES  AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.

     (c) EACH OF THE PARTIES TO THIS  AGREEMENT  HEREBY  IRREVOCABLY  WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION,  PROCEEDING OR COUNTERCLAIM  ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

     12.09  Counterparts.  This  Agreement  may be  executed  in any  number  of
counterparts and by the different parties hereto on separate counterparts,  each
of which when so executed and delivered  shall be an original,  but all of which
shall together  constitute one and the same  instrument.  A set of  counterparts
executed by all the parties  hereto  shall be lodged with the  Borrower  and the
Agent.

     12.10 Effectiveness. This Agreement shall become effective on the date (the
"Restatement  Effective Date") on which the Borrower and each of the Banks shall
have signed a copy hereof (whether the same or different  copies) and shall have
delivered  the same to the  Agent at its  Notice  Office  or, in the case of the
Banks, shall have given to the Agent telephonic (confirmed in writing),  written
or facsimile  transmission notice (actually received) in accordance with Section
12.03 at such  office  that the same has been  signed  and  mailed to it. To the
extent any Banks under and as defined in the  Existing  Credit  Agreement  shall
have any  rights  thereunder  with  respect to  matters  occurring  prior to the
Restatement  Effective Date (including without limitation as to obligations with
respect to loans  outstanding  thereunder,  interest or fees owing thereunder or
any costs  under  Sections  1.10,  1.11,  1A.06 or 3.04 of the  Existing  Credit
Agreement),  neither the  Restatement  Effective  Date or the  repayment  of any
amounts  owing to such Banks shall limit or otherwise  affect any of such Banks'
rights under the Existing  Credit  Agreement and such Banks' rights shall remain
in full force and effect as if the  Restatement  Effective Date has not occurred
with respect to matters occurring prior to the Restatement Effective Date.

     12.11  Headings  Descriptive.  The  headings  of the several  sections  and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

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     12.12 Amendment or Waiver.  (a) Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed,  waived,  discharged or
terminated  unless such change,  waiver,  discharge or termination is in writing
signed by the respective  Credit  Parties party thereto and the Required  Banks;
provided that no such change,  waiver,  discharge or termination shall,  without
the  consent  of each Bank  (with  Obligations  of the  respective  types  being
directly affected thereby):  (i) extend the final scheduled maturity of any Loan
or Note beyond the applicable Maturity Date or extend the stated maturity of any
Letter of Credit beyond the Revolving  Loan Maturity Date, or reduce the rate or
extend the time of payment of interest  or Fees  thereon  (except in  connection
with a waiver of applicability of any post-default  increase in interest rates),
or reduce the principal amount thereof,  or increase the Commitments of any Bank
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory  reduction in the Total Commitment
or a mandatory  prepayment shall not constitute an increase of the Commitment of
any Bank, and that an increase in the available portion of any Commitment of any
Bank shall not  constitute  an increase in the  Commitment  of such Bank);  (ii)
release all or substantially all of the Collateral (except as expressly provided
in the respective Credit Document);  (iii) amend,  modify or waive any provision
of this Section  12.12;  (iv) reduce the  percentage  specified in, or otherwise
modify,  the definition of Required Banks (it being  understood  that,  with the
consent of the Required Banks,  additional extensions of credit pursuant to this
Agreement  may  be  included  in the  determination  of the  Required  Banks  on
substantially  the same basis as the  extensions of A Term Loans,  B Term Loans,
Acquisition  Loans,  Acquisition Loan Commitments and Revolving Loan Commitments
are  included  on  the  Restatement  Effective  Date);  or  (v)  consent  to the
assignment  or  transfer by the  Borrower  of any of its rights and  obligations
under this Agreement;  provided further, that no such change, waiver,  discharge
or termination  shall:  (t) increase the Commitments of any Bank over the amount
thereof  then in effect  (it being  understood  that a waiver of any  conditions
precedent,  covenants, Defaults or Events of Default or of a mandatory reduction
in the Total  Commitment or of a mandatory  prepayment  shall not  constitute an
increase of the  Commitment  of any Bank,  and that an increase in the available
portion of any  Commitment  of any Bank shall not  constitute an increase in the
Commitment  of such Bank)  without the consent of such Bank;  or (u) without the
consent  of any  Issuing  Bank  effected  thereby,  amend,  modify  or waive any
provision  of  Section  1A or alter its rights or  obligations  with  respect to
Letters of Credit;  or (v) without the  consent of the Agent,  amend,  modify or
waive any provision of Section 11 or any other provision  relating to the rights
or obligations of the Agent; or (w) without the consent of the Collateral Agent,
amend,  modify or waive  any  provision  of  Section  11 or any other  provision
relating to the rights or obligations of the  Collateral  Agent;  or (x) without
the  consent of the  Required A  Facility  Banks (A) amend,  modify or waive (I)
Sections 3.01(v), 3.01(vi), 3.02(B)(a)(i) or the definitions of A TL Percentage,
B TL  Percentage,  Acquisition TL Percentage or Required A Facility Banks to the
extent that,  in any such case,  such  amendment,  modification  or waiver would
alter the  application  of  prepayments or repayments as between A Term Loans, B
Term Loans and Acquisition Loans in a manner adverse to the A Term Loans or (II)
Section  3.02(A)(b) or (y) without the consent of the Required B Facility  Banks
(A) amend,  modify or waive Sections  3.01(v),  3.01(vi),  3.02(B)(a)(i)  or the
definitions  of A TL Percentage,  B TL Percentage,  Acquisition TL Percentage or
Required B Facility Banks to the extent that, in any such case,  such amendment,
modification  or waiver would alter the application of prepayments or repayments
as between A Term Loans, B Term Loans and Acquisition  Loans in a manner adverse
to the B Term Loans or (II) Section 3.02(A)(c)

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or (z) without the consent of the Required Acquisition Facility Banks (A) amend,
modify or waive (I) Section 3.01(v), 3.01(vi),  3.02(B)(a)(i) or the definitions
of A TL  Percentage,  B TL  Percentage,  Acquisition  TL  Percentage or Required
Acquisition Facility Banks to the extent that, in any such case, such amendment,
modification  or waiver would alter the application of prepayments or repayments
as between A Term Loans, B Term Loans and Acquisition  Loans in a manner adverse
to the  Acquisition  Loans  or (II)  Section  3.02(A)(d)  or the  definition  of
Acquisition Loan Termination Date.

     (b) If, in  connection  with any  proposed  change,  waiver,  discharge  or
termination to any of the provisions of this Agreement as contemplated by clause
(a)(i) through (v),  inclusive,  of the first proviso to Section  12.12(a),  the
consent of the Required Banks is obtained but the consent of one or more of such
other Banks whose consent is required is not obtained,  then the Borrower  shall
have the right to replace each such non-consenting Bank or Banks (so long as all
non-consenting  Banks  are so  replaced)  with  one or  more  Replacement  Banks
pursuant to Section 1.12 so long as at the time of such  replacement,  each such
Replacement  Bank  consents  to  the  proposed  change,  waiver,   discharge  or
termination,  provided that such Borrower  shall not have the right to replace a
Bank  solely  as a  result  of the  exercise  of such  Bank's  rights  (and  the
withholding of any required consent by such Bank) pursuant to clauses (t)-(z) of
the second proviso to Section 12.12(a).

     (c)  Notwithstanding  anything  to the  contrary  contained  above  in this
Section  12.12,  the  Collateral  Agent may (i)  enter  into  amendments  to the
Subsidiaries  Guaranty  and the  Security  Documents  for the  purpose of adding
additional  Subsidiaries  of the Borrower  (or other Credit  Parties) as parties
thereto and (ii) enter into security  documents to satisfy the  requirements  of
Sections 7.15 and 7.17, in each case without the consent of the Required Banks.

     12.13  Survival.  All  indemnities  set  forth  herein  including,  without
limitation,  in Sections 1.10, 1.11, 1A.06,  3.04, 11.06 and 12.01 shall survive
the  execution  and delivery of this  Agreement and the Notes and the making and
repayment of the Loans.

     12.14 Domicile of Loans.  Each Bank may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Bank.

     12.15 Post-Closing  Obligations.  The Borrower hereby  acknowledges that in
connection with certain assignments hereof, the Agent or any of the Banks may be
required to obtain a rating of the Obligations and Commitments  hereunder of the
Borrower  hereby  consents  to such Agent or Bank  providing  to the  respective
rating agency such information regarding the Obligations and creditworthiness of
the Borrower as is customary practice of such rating agency.

     12.16 Default Exception. Notwithstanding anything to the contrary contained
in this  Agreement,  the  lack  of a first  perfected  security  interest  being
provided  to the Banks by the  Borrower  or any  Subsidiary  of the  Borrower in
connection  with and as described under part (II)(b) of the fourth proviso under
the  definition of  Consolidated  EBITDA,  and the failure of any such person to
execute and deliver a Guarantee or any Security  Document shall not constitute a
Default or Event of Default.

                                       108

<PAGE>

     12.17 Permitted Stock Issuance Adjustment.  Notwithstanding anything to the
contrary in this  Agreement,  the Borrower may use the proceeds  from  Permitted
Stock  Issuances  for the purposes  set forth on Schedule XVI hereto;  provided,
however,  to the extent the amount of proceeds  received  from  Permitted  Stock
Issuances is less than $30 million,  the Borrower may not make  expenditures set
forth on such  Schedule  XVI in an  amount  equal to such  shortfall;  provided,
further,  however,  if at the time of such Permitted  Stock  Issuances or at any
time thereafter prior to the permitted use of such proceeds, there shall exist a
Default  or Event of  Default,  all such  equity  proceeds  shall be  applied in
accordance with Section 3.02(A)(e)(i).

                                       109

<PAGE>

     IN WITNESS  WHEREOF,  the parties hereto have caused their duly  authorized
officers  to execute  and  deliver  this  Agreement  as of the date first  above
written.

Address:
90 Park Avenue                              VANTAS INCORPORATED
Suite 3100                                     (formerly known as Alliance
New York, New York  10016                       National Incorporated)
Attention:  Alan Langer
Telephone:  (212) 907-6402
Facsimile: (212) 907-6522                   By: /s/ Alan Langer
                                               ---------------------------------
                                                Title: Chief Financial Officer

787 Seventh Avenue                          PARIBAS,
New York, New York  10019                       Individually and as Agent
Attention:  Michael P. Gebauer
Telephone:  (212) 841-2000
Facsimile:  (212) 841-2363                  By: /s/ Michael Gebauer
                                               ---------------------------------
                                                Title: Vice President

                                            By: /s/ Walter Bellingham
                                               ---------------------------------
                                                Title: Associate

2850 West Gold Road                         FIRST SOURCE FINANCIAL LLP
Suite 520
Rolling Meadows, Illinois 60008             By: First Source Financial, Inc.,
Attention: Robert Coseo                         its Agent/Manager
Telephone: (847) 734-2071
Facsimile: (847) 734-7910
                                            By: /s/ David Wagner
                                               ---------------------------------
                                                Title: Vice President

One State Street                            IBJ WHITEHALL BANK & TRUST
New York, New York 10004                        COMPANY (formerly, IBJ Schroder
Attention: Patricia McCormack                   Bank & Trust Company)
Telephone: (212) 858-2641
Facsimile: (212) 858-2768
                                            By: /s/ Patricia McCormack
                                               ---------------------------------
                                                Title: Director

<PAGE>

Two Renaissance Square                      PILGRIM PRIME RATE TRUST
40 North Central Avenue

Suite 1200                                  By: Pilgrim Investments, Inc.,
Phoenix, Arizona 85004-3444                     as its investment manager
Attention: Jeffrey A. Bakalar
Telephone: (602) 417-8252
Facsimile: (602) 417-8327                   By: /s/ Jeffrey A. Bakalar
                                               ---------------------------------
                                                Title: Vice President

787 Seventh Avenue                          PARIBAS CAPITAL FUNDING LLC
New York, New York 10019
Attention: Michael Weinberg
Telephone: (212) 841-2000                   By: /s/ Michael Weinberg
Facsimile: (212) 841-2363                      ---------------------------------
                                                Title: Director

335 Madison Avenue                          EUROPEAN AMERICAN BANK
17th Floor
New York, New York 10022
Attention: Anthony Tomich                   By: /s/ Anthony Tomich
Telephone: (212) 503-2687                      ---------------------------------
Facsimile: (212) 503-2667                       Title: Assistant Vice President
590 Madison Avenue                          BHF (USA) CAPITAL CORPORATION
30th Floor
New York, New York 10022
Attention: Hans J. Scholz                   By: /s/ Hans J. Scholz
Telephone: (212) 756-5533                      ---------------------------------
Facsimile: (212) 756-5536                       Title: Vice President

                                            By: /s/ Anthony Heyman
                                               ---------------------------------
                                                Title: Assistant Vice President

Two Greenwich Plaza                         BANK AUSTRIA CREDITANSTALT
4th Floor                                   CORPORATE FINANCE INC.
Greenwich, Connecticut 06830
Attention: David E. Yewer                   By: /s/ David Yewer
Telephone: (203) 861-1499                      ---------------------------------
Facsimile: (203) 861-1475                       Title: Vice President

                                            By: /s/ C. MacDonald
                                               ---------------------------------
                                                Title: Vice President

<PAGE>

500 West Monroe Street                      HELLER-FINANCIAL, INC.
Chicago, Illinois 60661
Attention: Linda Wolf
Telephone: (312) 441-7894                   By: /s/ Sheila Weimer
Facsimile: (312) 441-7357                      ---------------------------------
                                                Title: Vice President

590 Madison Avenue                          BALANCED HIGH-YIELD FUND II LIMITED
30th Floor

New York, New York 10022                    By: BHF (USA) Capital Corporation,
Attention: Hans J. Scholz                           as attorney-in-fact
Telephone: (212) 756-5533
Facsimile: (212) 756-5536                   By: /s/ Hans J. Scholz
                                               ---------------------------------
                                                Title: Vice President

                                            By: /s/ Anthony Heyman

                                               ---------------------------------
                                                Title: Assistant Vice President

One South Wacker Drive                      SRF TRADING, INC.
33rd Floor
Chicago, Illinois 60603
Attention: James R. Fellows                 By: /s/ Kelly C. Walker
Telephone: (312) 368-5641                      ---------------------------------
Facsimile: (312) 368-7857                       Title: Vice President
Attention:  Virginia Conway                 KZH ING-2 LLC
450 West 33rd Street - 15th Floor
New York, NY  10001
Telephone: (212) 946-7575                   By: /s/ Peter Chin
Facsimile: (212) 946-7776                      ---------------------------------
                                                Title: Authorized Agent

<PAGE>

Attention:  Michael Hatley                  THE ING CAPITAL SENIOR SECURED HIGH
333 S. Grand Avenue                             INCOME FUND, L.P.
Suite 4250
Los Angeles, CA  90071                      By: ING Capital Advisors LLC
Telephone: (213) 346-3972                       as Investment Advisor
Facsimile: (213) 346-3995
                                            By: /s/ Michael Hatley

                                               ---------------------------------
                                                Title: Managing Director

<PAGE>

                                                                      SCHEDULE I
                                   COMMITMENTS

<TABLE>
<CAPTION>

                                                               Acquisition     Revolving

                                 A Term Loan    B Term Loan       Loan           Loan
             Bank                 Commitment     Commitment     Commitment     Commitment      Total
             ----                 ----------     ----------     ----------     ----------      -----
<S>                             <C>            <C>            <C>            <C>            <C>
Paribas                         $ 10,558,250   $ 20,000,000   $  1,892,858   $  6,472,142   $ 38,923,250
First Source Financial LLP      $  3,500,000   $  7,350,000   $          0   $  3,850,000   $ 14,700,000
IBJ Whitehall Bank & Trust
Company                         $  6,012,500   $  2,987,500   $          0   $  1,000,000   $ 10,000,000
Pilgrim America
Prime Rate Trust                $          0   $  7,500,000   $          0   $          0   $  7,500,000
Paribas Capital Funding LLC     $          0   $ 14,937,500   $          0   $          0   $ 14,937,500
European American Bank          $  5,429,250   $          0   $  1,607,142   $  2,677,858   $  9,714,250
BHF (USA) Capital Corporation   $  5,000,000   $          0   $    500,000   $  4,500,000   $ 10,000,000
Bank Austria Creditanstalt
Corporate Finance, Inc.         $  7,500,000   $          0   $  1,000,000   $  6,500,000   $ 15,000,000
Heller Financial                $          0   $ 15,000,000   $          0   $          0   $ 15,000,000
SRF Trading, Inc.               $          0   $  5,000,000   $          0   $          0   $  5,000,000
KZH ING-2 LLC                   $          0   $  5,000,000   $          0   $          0   $  5,000,000
ING Capital Senior Secured
High Income Fund                $          0   $  2,100,000   $          0   $          0   $  2,100,000
Balanced High Yield Fund II

Ltd.                            $          0   $ 10,000,000   $          0   $          0   $ 10,000,000
                                ------------   ------------   ------------   ------------   ------------
           Totals:              $ 38,000,000   $ 89,875,000   $  5,000,000   $ 25,000,000   $157,875,000
</TABLE>