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                           SECOND AMENDED AND RESTATED

                 REVOLVING LOAN, GUARANTY AND SECURITY AGREEMENT

                                      among

        FLEET BANK, N.A. (as successor to NatWest Bank, N.A. and National
                              Westminster Bank NJ),

                                       and

                    SOVEREIGN BANK, collectively, the Banks,

                                       and

                           FLEET BANK, N.A., as Agent,

                                       and

                     SUPREMA SPECIALTIES, INC., as Borrower,

                                       and

                         SUPREMA SPECIALTIES WEST, INC.,

                                       and

        SUPREMA SPECIALTIES NORTHEAST, INC., collectively, the Guarantors

                                   dated as of

                                December 16, 1998

================================================================================

<PAGE>

                   SECOND AMENDED AND RESTATED REVOLVING LOAN,
                         GUARANTY AND SECURITY AGREEMENT

     THIS SECOND  AMENDED AND  RESTATED  REVOLVING  LOAN,  GUARANTY AND SECURITY
AGREEMENT  dated as of December  16, 1998 is by and among FLEET BANK,  N.A.  (as
successor to NatWest  Bank,  N.A. and National  Westminster  Bank NJ,  "Fleet"),
having an office at 208 Harristown Road, Glen Rock, New Jersey 07452,  SOVEREIGN
BANK ("Sovereign"),  having an office at 901 West Park Avenue, Ocean, New Jersey
07712 (Fleet and Sovereign are  individually  referred to herein as a "Bank" and
collectively as the "Banks"), FLEET BANK, N.A., as agent for the Banks hereunder
(in such capacity,  the "Agent"),  having an office at 208 Harristown Road, Glen
Rock, New Jersey 07452, SUPREMA SPECIALTIES,  INC. (the "Borrower"),  a New York
corporation,  with its  principal  place of  business  at 510 East 35th  Street,
Paterson,  New Jersey 07543,  SUPREMA SPECIALTIES WEST, INC. ("Suprema West"), a
California  corporation,  with its  principal  place of  business at 14253 South
Airport Way, Manteca,  California 95336 and SUPREMA SPECIALTIES NORTHEAST,  INC.
("Suprema  Northeast"),  a New York  corporation,  with its  principal  place of
business at 30 Main Street, Ogdensburg, New York 13669 (Suprema West and Suprema
Northeast are collectively  referred to as the  "Guarantor").  Capitalized terms
used herein without definition shall have the meanings assigned to such terms in
Section 1.

                              W I T N E S S E T H:

     WHEREAS,  Borrower,  Suprema West,  as guarantor,  and Fleet are parties to
that certain Revolving Loan,  Guaranty and Security Agreement dated February 15,
1994, as amended by, among other letter  agreements,  letter agreements dated as
of February 15,  1994,  March 14,  1994,  April 21, 1994,  November 23, 1994 and
March 13,  1997  (effective  as of January 31,  1997) and as further  amended by
those certain Amendments dated December 20, 1994, March 30, 1995, June 30, 1995,
February 1, 1996,  January 31, 1997, which, inter alia, added Suprema Northeast,
as a guarantor, and May 29, 1997 (collectively, the Revolving Loan, Guaranty and
Security  Agreement as amended  through the date hereof is referred to herein as
the "Original Loan Agreement"); and

     WHEREAS,  pursuant  to a  certain  Amended  and  Restated  Revolving  Loan,
Guaranty and Security  Agreement dated as of January 5, 1998 by and among Fleet,
the  Borrower and the  Guarantor  (the "First  Restated  Loan  Agreement"),  the
Original  Loan  Agreement  was  modified  and restated for the purpose of, among
other things, (i) providing

<PAGE>

for an increase of the Commitment to $25,000,000,  (ii) extending the Commitment
Expiration Date to November 2, 1999,  (iii)  modifying  certain of the financial
covenants set forth therein and (iv) otherwise  amending and restating the terms
and  conditions  of the  Original  Loan  Agreement  to  reflect  the  terms  and
conditions  set forth in the  amendments  thereto  through  the date  hereof and
certain other mutually agreeable modifications; and

     WHEREAS,  the First  Restated Loan  Agreement as amended by certain  letter
agreements dated as of January 28, 1998 and February 23, 1998 and March 9, 1998,
respectively, as amended pursuant to an Amendment thereto dated as of August 31,
1998 to increase the maximum  Commitment by $1,000,000  to  $26,000,000,  and as
further amended  pursuant to a Second  Amendment dated as of October 19, 1998 to
(i)  temporarily  increase the maximum  Commitment by $4,000,000 to $30,000,000,
(ii) extend the Commitment Expiration Date to November 2, 2000, and (iii) modify
certain of the financial covenants set forth in the Credit Agreement; and

     WHEREAS,  the Borrower and the Guarantor  have requested that the revolving
credit  facility  maintained  pursuant to the First  Restated Loan  Agreement be
amended to increase the maximum Commitment by $5,000,000 to $35,000,000; and

     WHEREAS,  Fleet is  agreeable to said  amendment  provided  that  Sovereign
agrees to make Loans to the Borrower, on a several basis with Fleet, as provided
in Section 2.1 of this Agreement.

     NOW, THEREFORE,  in consideration of the premises, the mutual covenants set
forth  herein and for other good and  valuable  consideration,  the  receipt and
sufficiency  of which are hereby  acknowledged,  the terms and conditions of the
First  Restated Loan Agreement are hereby amended and restated in their entirety
to read as follows:

                             SECTION 1: DEFINITIONS.

     When used herein,  the following  terms shall have the  following  meanings
(such definitions to be equally applicable to both singular and plural forms):

     "Accounts"  means  all  "accounts"  (as  defined  in the UCC) now  owned or
hereafter  acquired by the  Borrower  and/or the  Guarantor,  and also means and
includes, without limitation or duplication,  all Receivables,  all right, title
and interest of the Borrower  and/or the Guarantor in, to and under any accounts
receivable,   chattel  paper,   contract  rights  (including  rights  under  the
agreements


                                       2
<PAGE>

pursuant to which the Borrower  and/or the  Guarantor  acquired any  Subsidiary,
division or  operating  entity or other Assets and all  documents,  instruments,
agreements and understandings relating thereto), bonds, securities,  book debts,
notes,  drafts and other  obligations or indebtedness  owing to the Borrower and
/or the Guarantor arising from the sale, lease or exchange of goods, services or
other  property  by  any  of  them  (including,  without  limitation,  any  such
obligation which might be characterized as an account, contract right or general
intangible under the Uniform  Commercial Code as in effect in any jurisdiction),
purchase orders for goods,  services or other property (and any goods,  services
or other property  represented by any of the foregoing  (including  returned and
repossessed   goods  and  unpaid  seller's   rights  of  rescission,   replevin,
reclamation and rights of stoppage in transit)),  monies due or to become due to
the  Borrower  and/or  the  Guarantor  under  contracts  for the sale,  lease or
exchange of goods or other property and/or  performance of services  (whether or
not earned by  performance  on the part of the Borrower  and/or the  Guarantor),
including,  without  limitation,  the right to receive the  proceeds of any such
purchase  orders  and/or  contracts,  tax  refunds,  insurance  proceeds  and/or
condemnation  awards,  amounts  refunded  or paid  to the  Borrower  and/or  the
Guarantor as a result of such amounts  being  deemed  voidable  transfers in any
insolvency or bankruptcy  proceeding,  rights to receive tax refunds,  insurance
proceeds  and/or  condemnation  awards,  investments,  in each case  whether now
existing or  hereafter  arising or  acquired,  and all  collateral  security and
guarantees of any kind given by any Person with respect to any of the foregoing.

     "Affiliate"  of  any  Person  means  any  other  Person  who,  directly  or
indirectly,  controls or is controlled  by or is under common  control with such
Person.  A Person  shall be deemed to be  "controlled  by" any other  Person who
possesses,  directly  or  indirectly,  power:  (a) to  vote  10% or  more of the
securities  having  ordinary  voting power for the election of directors of such
Person;  or (b) to direct or cause the direction of the  management and policies
of such Person, whether by contract or otherwise.

     "Agreement" means this Second Amended and Restated Revolving Loan, Guaranty
and Security Agreement, as the same may from time to time be amended,  modified,
supplemented or renewed.

     "Assets"  means all "assets" (as defined in and within the meaning of GAAP)
and, without duplication,  any and all interests whether direct or indirect,  in
real or  personal  property,  whether  tangible  or  intangible,  now  owned  or
hereafter  acquired by the Borrower and/or the Guarantor,  and shall include any
and all Collateral.


                                       3
<PAGE>

     "Borrowing  Base" means the sum, as reasonably  determined by the Agent, of
(i) 80% of Eligible Receivables aged less than 91 days, and (ii) 40% of the book
value of raw materials, work-in-progress and finished goods Inventory, exclusive
of any Inventory  warehoused  at any warehouse  location for which the Agent has
not received a warehouse  lien waiver in form and  substance  acceptable  to the
Agent, subordinating the warehouseman's Lien to the Lien of the Agent; provided,
however, in no event shall the number arrived at in clause (ii) above exceed 50%
of the aggregate amount of Loans outstanding.

     For  purposes  of  calculating  the  value  of  Inventory  included  in the
Borrowing Base, such value shall not include Inventory capital costs,  packaging
and supplies.

     "Borrowing Base Certificate" means a certificate (substantially in the form
of Exhibit B annexed  hereto)  appropriately  completed and duly executed by the
chief financial officer of the Borrower.

     "Borrowing  Notice" means,  a written or telecopied  notice to the Agent by
the Borrower specifying (i) the date of a proposed borrowing and (ii) the amount
of the Loan requested.

     "Business Day" means a day on which commercial banks settle payments in New
York or London if the payment  obligation  is calculated by reference to any (i)
LIBOR  Rate,  or (ii) New York,  if the  payment  obligation  is  calculated  by
reference to any Prime Rate.

     "Capital  Expenditures" means, as to any Person,  without duplication,  and
for any period,  the cost  attributed in accordance  with GAAP  consistent  with
those applied in preparation of the financial  statements referred to in Section
10.1 hereof to  acquisitions  during such period by such Persons,  of any asset,
tangible or intangible,  or  replacements  or substitutes  therefor or additions
thereto (including, without limitation,  Capitalized Leases and operating leases
but excluding leases associated with the Borrower's and/or Guarantor's operating
facilities and  warehouses)  which such Person treated as a noncurrent  asset on
such  Person's  financial  statements,   including,   without  limitation,   the
acquisition or  construction of assets having a useful life of more than one (1)
year.

     "Capital  Expenditures  (Non-Operating  Leases)" means the aggregate of all
expenditures  on a  consolidated  basis for the  Borrower  and its  Subsidiaries
including  deposits and capital leases made by the Borrower and its Subsidiaries
that, in conformity with


                                       4
<PAGE>

GAAP, are required to be included in the property plant,  equipment,  or similar
fixed asset account.

     "Capitalized  Leases" means any lease  obligation which is capitalized on a
balance sheet of a Person prepared in accordance with GAAP.

     "Closing" means December 16, 1998.

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

     "Collateral" is defined in Section 8.1.

     "Commitment"  means for the period from and  including  the Closing to, but
excluding the  Commitment  Expiration  Date, the commitment of the Banks to make
Loans to the  Borrower  pursuant to this  Agreement  in an  aggregate  principal
amount not to exceed at any time outstanding $35,000,000,  as such amount may be
reduced pursuant to Section 5.2.

     "Commitment Expiration Date" means November 2, 2000.

     "Consolidated  Cash Flow" means, for any period,  Consolidated Net Earnings
of the Borrower and its Subsidiaries before taxes and interest, depreciation and
amortization  expense and any other  non-cash  charges,  including  amortization
expenses  associated  with Slotting  Fees,  finance  charges and other  non-cash
charges items, for such period.

     "Consolidated Fixed Charges" means, for any period, the sum of Consolidated
Interest Expense of the Borrower and its Subsidiaries and consolidated Operating
Lease Expense of the Borrower and its Subsidiaries for such period.

     "Consolidated  Interest  Expense"  means,  for any  period,  the  amount of
interest  accrued on, or with respect to,  interest  bearing  obligations of the
Borrower and its Subsidiaries,  including,  without limitation,  amortization of
debt  discount,  imputed  interest  on  Capitalized  Leases and  interest on the
Obligations  and  other  Indebtedness  of the  Borrower  and  its  Subsidiaries,
determined  on a  consolidated  basis for such  period,  but only to the  extent
deducted  from  revenues  of the  Borrower  and its  Subsidiaries  in  computing
consolidated  Net  Earnings  for  such  period.   For  purposes  of  calculating
Consolidated Interest Expense, any interest capitalized pursuant to the specific
terms of the New Senior Subordinated Notes shall not be included.


                                       5
<PAGE>

     "Consolidated  Net Earnings" means, for any period,  total accrual earnings
of the  Borrower  and its  Subsidiaries  calculated  in  accordance  with  GAAP,
excluding:  (i) extraordinary  gains and losses; and (ii) any equity interest of
the  Borrower  on the  unremitted  earnings  of any  corporation  which is not a
Subsidiary of the Borrower for such period.

     "Consolidated  Net  Worth"  means  at any time  consolidated  stockholders'
equity as would be reflected on a balance sheet of the Borrower and Subsidiaries
prepared on a consolidated basis in accordance with GAAP at such time.

     "Consolidated  Total  Assets"  means at any time the  total  assets  of the
Borrower and its  Subsidiaries  which would be shown as assets on a consolidated
balance sheet of the Borrower and its  Subsidiaries  prepared in accordance with
GAAP at such time.

     "Consolidated  Total  Debt"  means,  at any time,  an  amount  equal to all
Indebtedness of the Borrower and its Subsidiaries,  determined on a consolidated
basis at such time.

     "Contingent  Obligation"  means,  as to any Person,  any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness,  lease, dividend
or other  obligation  (the  "primary  obligations")  of any  other  Person  (the
"primary  obligor") in any manner,  whether  directly or indirectly,  including,
without limitation, any obligation of such Person, whether or not contingent (a)
to purchase any such primary obligation or any property  constituting  direct or
indirect security therefor,  (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary  obligor or otherwise to maintain the net worth or
solvency  of the  primary  obligor  or to permit  the  primary  obligor  to meet
financial covenants, (c) to purchase property,  securities or services primarily
for the  purpose of assuring  the owner of any such  primary  obligation  of the
ability of the primary  obligor to make payment of such primary  obligation,  or
(d)  otherwise  to  assure  or hold  harmless  the  owner  of any  such  primary
obligation  against loss in respect thereof;  provided,  however,  that the term
Contingent  Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary  course of business.  The amount of any Contingent
Obligation  shall be deemed to be an amount equal to the stated or  determinable
amount 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 as determined by the Borrower in good faith.


                                       6
<PAGE>

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

     "Default" means any event which,  if it continues  uncured will, with lapse
of time or the giving of notice, or both, constitute an Event of Default.

     "Default  Rate" means a per annum rate of  interest  equal to the lesser of
(a) Lending Rate plus an  additional  three  percent (3%) per annum,  or (b) the
highest rate permissible under applicable law.

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

     "Eligible  Receivable"  means, at any date of  determination  thereof,  the
aggregate  amount  of  all  Receivables  at  such  date  and  as  to  which  the
representations  and warranties  herein are true and correct when created and at
all times thereafter. Notwithstanding the above and without limiting the Agent's
discretion  to  determine  eligibility,  the  following  shall  not be  Eligible
Receivables (determined without duplication):

     (a) (i) any Receivable  which is not due and payable within sixty (60) days
after the date created,  (ii) any Receivable  which remains unpaid for more than
ninety (90) days after its invoice date (to the extent so unpaid),  and/or (iii)
all  Receivables  owing by any account  debtor  (including a currently  existing
Receivable) if 50% of the aggregate  balance of all  Receivables of such account
debtor have remained  unpaid for more than ninety (90) days after their original
invoice dates or are otherwise not Eligible Receivables hereunder;

     (b) any Receivable  with respect to which the account debtor is a director,
officer,  employee,  agent,  Affiliate  or  Subsidiary  of the  Borrower  or the
Guarantor;

     (c) any  Receivable  with respect to which and to the extent payment by the
account debtor is or may be conditional and accounts  receivable  commonly known
as "bill and hold," progress billings or any similar or like arrangement;

     (d) any  Receivable  with  respect  to which  the  account  debtor is not a
resident or citizen of or otherwise  located in the United States or Canada,  or
with respect to which the account


                                       7
<PAGE>

debtor is not subject to service of process in the United States or Canada;

     (e) any  Receivable  with respect to which the account debtor is the United
States or any  department,  agency  or  instrumentality  thereof,  except to the
extent  compliance with the Federal  Assignment of Claims Act has been completed
to the satisfaction of the Agent;

     (f) any  Receivable  with respect to which the Borrower or the Guarantor is
or may become liable to the account  debtor for goods sold or services  rendered
by such account debtor to the Borrower or the Guarantor;

     (g) any  Receivable (i) with respect to which the goods giving rise thereto
have  not  been  shipped  and  delivered,  (ii)  to  which  there  are  setoffs,
counterclaims, chargebacks or disputes existing and as to which there are facts,
events  or   occurrences   which  in  any  manner  would  impair  the  validity,
enforceability or collectibility of such Receivable or reduce the amount payable
or delay payment  thereunder  except such Receivable shall be deemed Eligible by
the Agent to the extent of the amount of the  Receivable  which is not  affected
thereby,  (iii) with respect to which the services performed giving rise thereto
have not been completed, or (iv) which is subject to a claim of reduction or for
credit  by  the  account  debtor  thereof  by  reason  of  such  services  being
unsatisfactory;

     (h) any  Receivable  which is not invoiced (and dated as of the date of the
shipment and delivery of goods or the  performance of services,  as the case may
be) and sent to the account debtor thereof  concurrently  with or not later than
seven (7) days after the shipment and delivery to and acceptance by such account
debtor of the goods  giving  rise  thereto or the  performance  of the  services
giving rise thereto;

     (i) any Receivable with respect to which  possession  and/or control of the
goods sold giving rise thereto is held,  maintained  or retained by the Borrower
or the Guarantor (or by any agent or custodian of the Borrower or the Guarantor)
for the  account  of or  subject to further  and/or  future  direction  from the
account debtor thereof;

     (j) any  Receivable  which  arises from a "sale on  approval" or a "sale or
return" (except for customary shelf-life  restrictions and other return policies
consistent with the ordinary and usual in course of business);


                                       8
<PAGE>

     (k) any  Receivable  which  the  Agent,  at any  time or  times  hereafter,
determines,  reasonably  and in good  faith,  that the  prospect  of  payment or
performance by the account debtor is or will be impaired; and

     (l) any Receivable  which is owed by account debtors deemed  uncreditworthy
and  unacceptable  at all  times by the  Agent  in  exercise  of its  reasonable
discretion.

     "Environmental  Laws" shall mean all  Requirements  of Law  relating to the
environment and workplace safety including,  without limitation,  the Industrial
Site  Recovery Act of New Jersey  ("ISRA") the Clean Air Act ("CAA"),  the Clean
Water Act ("CWA"),  the Toxic  Substances  Control Act  ("TSCA"),  the Hazardous
Materials  Transportation Act ("HMTA"),  the Resource  Conservation and Recovery
Act, as amended ("RCRA"), the Comprehensive Environmental Response, Compensation
and  Liability  Act  ("CERCLA"),  as modified by the  Superfund  Amendments  and
Reauthorization Act of 1986 ("SARA"), the Emergency Planning and Community Right
to Know Act ("EPCRA"),  the Noise Control Act ("NCA"),  the Occupational  Health
and  Safety  Act  ("OSHA"),   the  Safe  Drinking  Water  Act  and  the  Federal
Insecticide, Fungicide and Rodenticide Act, as any such Requirements of Laws may
be amended, supplemented or otherwise modified from time to time.

     "Environmental  Liabilities" means any and all claims, demands,  penalties,
fines, liabilities, settlements, damages, losses, costs and expenses (including,
without limitation,  reasonable attorneys' and reasonable  consultants' fees and
reasonable  disbursements,  remedial  investigation and feasibility study costs,
clean-up costs and other response costs under the Environmental Laws,  currently
in existence or which may be enacted in the future,  reasonable laboratory fees,
court  costs and  litigation  expenses)  of  whatever  kind or nature,  known or
unknown,  contingent or  otherwise,  arising out of or in any way related to (i)
the presence, disposal, release or threatened release of any Hazardous Materials
which are on, from or which affect the Premises or any part thereof,  including,
without limitation,  soil, water,  vegetation,  buildings,  equipment,  personal
property,  or which  affect  Persons,  animals or  otherwise;  (ii) any personal
injury (including  wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous  Materials or damage to wetlands  whether or
not relating to Hazardous  Materials;  (iii) any lawsuit  brought or threatened,
settlement  reached, or government order or directive relating to such Hazardous
Materials;  and/or (iv) any violation of any  Requirement of Law or requirements
or demands  of any  Governmental  Authority,  which are based upon or in any way
related to such Hazardous Materials and which are paid or incurred by the Agent,
any Bank or any other Indemnitee.


                                       9
<PAGE>

     "Equipment"  means all  "equipment"  (as  defined  in the UCC) now owned or
hereafter acquired by the Borrower and/or the Guarantor.

     "Equipment  Operating  Leases" means all leases other than (a)  Capitalized
Leases and (b) leases  associated  with the leasing of the operating  facilities
and warehouse of the Borrower and its Subsidiaries.

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

     "ERISA   Affiliate"   means  each  trade  or   business   (whether  or  not
incorporated)  which  together with the Borrower  would be deemed to be a single
employer under Section 414 of the Code.

     "Eurodollar  Loans"  means  Loans  hereunder  that  bear  interest  for the
Interest  Period  applicable  thereto at a rate of interest based upon the LIBOR
Rate.

     "Event of Default"  means any of the events  described  in Section  12.1 of
this Agreement.

     "Fiscal Year" means,  in respect of the Borrower,  the twelve (12) calendar
months ending June 30.

     "Fleet Mortgage" means the first mortgage dated March 29, 1996 given by the
Borrower  to Fleet on the  Borrower's  facility  in  Paterson,  New  Jersey  and
recorded  on April 17, 1996 in the Passaic  County  Register's  Office in Volume
159, Page 53, et seq., to secure the Fleet  Mortgage  Loan, as same has been and
may hereafter be amended and modified.

     "Fleet Mortgage Loan" means the mortgage loan dated March 29, 1996 given by
Fleet to the Borrower in the original principal amount of $1,050,000.

     "Fleet  Mortgage Loan  Documents"  means the Fleet  Mortgage,  the Absolute
Assignment  of  Leases  and  Rents  and  all  other  documents,  agreements  and
instruments executed in connection with the Fleet Mortgage Loan.

     "Fluctuating Rate Loans" means Loans hereunder that bear interest at a rate
of interest based upon the Prime Rate.

     "FNB" means Fleet National Bank, a national banking association.


                                       10
<PAGE>

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

     "General  Intangibles" means "general  intangibles" (as defined in the UCC)
now owned or hereafter  acquired by the Borrower and/or the Guarantor,  and also
means and includes,  without  limitation,  (i) all  obligations or  indebtedness
owing to the  Borrower  and/or the  Guarantor  (other than  Accounts),  (ii) all
know-how,  patents and patent  applications,  copyrights,  licenses,  royalties,
computer tapes,  programs and software,  trademarks,  trade names, service marks
and names,  logos,  goodwill,  causes of action,  choses in action,  judgements,
corporate and other business records,  trade secrets,  customer lists,  together
with all instruments,  all documents of title representing any of the foregoing,
and all books, ledgers, files and records with respect thereto, (iii) all rights
or claims in respect of insurance refunds, indemnification,  contribution and/or
subrogation, and (iv) all rights or claims in respect of refunds for taxes paid.

     "Goods"  means all "goods"  (as defined in the UCC) now owned or  hereafter
acquired by the Borrower and/or the Guarantor.

     "Governmental  Authority" means any sovereign state,  nation or government,
any  state  or  other  political   subdivision,   commission,   board,   bureau,
instrumentality  or  agency  thereof  and any  authority  exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government.

     "Guarantor" means collectively, Suprema Specialties West, Inc., and Suprema
Specialties Northeast, Inc., jointly and severally.

     "Guaranty"  means the joint and several  guaranty of the Obligations of the
Borrower by the  Guarantor  provided for in Section 7, as the same may from time
to time be amended, modified or supplemented.

     "Hazardous  Materials" means,  without limitation,  any flammable material,
explosives,  radioactive materials, gasoline, petroleum products, asbestos, urea
formaldehyde,  polychlorinated biphenyls, hazardous materials, hazardous wastes,
hazardous or toxic substances,  pollutants,  contaminants,  materials containing
hazardous  constituents,  or related  materials as defined in the  Environmental
Laws.

     "Indebtedness" of any Person, means, at a particular date, the sum (without
duplication and in conformity with GAAP) at such date of all (a) indebtedness of
such Person for borrowed money or for


                                       11
<PAGE>

the  deferred  purchase  price  of  property  or  services  (including,  without
limitation,   all  notes  payable  and  all  obligations   evidenced  by  bonds,
debentures,  notes or other similar  instruments  but excluding  trade  payables
incurred in the  ordinary  course of business not overdue by more than 90 days),
(b)  obligations  with  respect  to any  installment  sale or  conditional  sale
agreement or title retention agreement with respect to property acquired by such
Person,  (c)  indebtedness  arising  under  acceptance  facilities,  (d)  unpaid
reimbursement  obligations  arising in connection  with surety,  performance  or
other similar bonds and in connection  with standby  letters of credit issued in
lieu of such bonds,  (e) the  outstanding  amount of all other letters of credit
(other  than those  referred  to in clause  (d))  issued for the account of such
Person  and,  without   duplication,   all  unpaid   reimbursement   obligations
thereunder, (f) any obligations of such Person under Capitalized Leases, (g) any
obligation  of  such  Person  under  Equipment  Operating  Leases,  (h)  payment
obligations  with  respect  to  interest  rate  swap,  floating  rate or similar
agreements and (i) Contingent Obligations of such Person.

     "Instruments"  means all  "instruments,"  "chattel  paper" or  "letters  of
credit" (each as defined in the UCC) evidencing,  representing,  arising from or
existing in respect  of,  relating  to,  securing or  otherwise  supporting  the
payment  of, any  Account,  including,  without  limitation,  promissory  notes,
drafts, bills of exchange and trade acceptances, now owned or hereafter acquired
by the Borrower and/or the Guarantor.

     "Intangibles"  means, at a particular  date, all Assets of the Borrower and
its Subsidiaries,  on a consolidated basis,  determined at such date, that would
be classified as intangible assets in accordance with GAAP.

     "Interest  Period" means the 1, 2, 3, 4 and 6 month period  selected by the
Borrower  during  which the  relevant  Loan bears  interest at the LIBOR Rate as
elected by the Borrower in accordance with the terms of this Agreement; subject,
however to the following:

     (a) If any  Interest  Period  would  otherwise  end on a day which is not a
Business  Day,  that  Interest  Period shall be extended to the next  succeeding
Business  Day  unless  the  result of such  extension  would be to  extend  such
Interest Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding Business Day.

     (b) If any Interest  Period  begins on the last  Business Day of a calendar
month or on a day on which there is no


                                       12
<PAGE>

numerically  corresponding  day in the  calendar  month in which  such  Interest
Period would otherwise  expire,  then such Interest period shall end on the last
Business Day of such calendar month.

     (c) No Interest Period shall extend beyond the Termination Date.

     "Inventory"  means all "inventory" (as such term is defined in the UCC) now
owned or hereafter  acquired by the Borrower  and/or the Guarantor of every kind
and  description,   wherever  located,   including,   without  limitation,   all
merchandise, raw materials, parts, supplies, work-in-process and finished goods,
together with all containers, packing, packaging, shipping and similar materials
relating thereto or any products made or processed therefrom.

     "Lending Rate" means, on any date, a rate of interest per annum (based on a
three hundred sixty (360) day year and the actual number of days elapsed)  equal
to, in the case of  Fluctuating  Rate Loans,  the Prime Rate and, in the case of
Eurodollar  Loans for the Interest Period therein  specified,  equal to 2.00% in
excess of the LIBOR Rate.

     "Letter of Credit" means that certain  irrevocable letter of credit (letter
of  credit  #JS167748)  in a face  amount  of  $400,000  issued by Fleet for the
account of the Borrower and for the benefit of SAFECO.

     "LIBOR Rate" means the rate per annum (rounded upward, if necessary, to the
nearest  1/32 of one  percent)  as  determined  by the Agent on the basis of the
offered rates for deposits in U.S.  dollars,  for a period of time comparable to
such  Eurodollar  Loan  which  appears on the  Telerate  page 3750 at 11:00 a.m.
London time on the day that is two London  Banking Days  preceding the first day
of such Eurodollar Loan; provided, however, if the rate described above does not
appear on the Telerate System on any applicable interest determination date, the
LIBOR Rate shall be the rate (rounded  upward as described  above, if necessary)
for deposits in dollars for a period  substantially equal to the interest period
on the  Reuters  Page "LIBO" (or such other page as may replace the LIBO Page on
that service for the purpose of displaying such rates), as of 11:00 a.m. (London
Time),  on the day that is two (2) London Banking Days prior to the beginning of
such interest period.  "Banking Day" shall mean in respect of any city, any date
on which commercial banks are open for business in that city.

     If both the Telerate and Reuters system are unavailable,  then the rate for
that date will be  determined by the Agent on the basis of the offered rates for
deposits in U.S. dollars for a period of


                                       13
<PAGE>

time comparable to such Eurodollar Loan which are offered by four major banks in
the London interbank market at approximately  11:00 a.m. London time, on the day
that is two (2) London Banking Days  preceding the first day of such  Eurodollar
Loan as selected by the Agent.  The principal  London office of each of the four
major London  banks will be requested to provide a quotation of its U.S.  Dollar
deposit offered rate. If at least two such quotations are provided, the rate for
that date  will be the  arithmetic  mean of the  quotations.  If fewer  than two
quotations are provided as requested,  the rate for that date will be determined
on the basis of the rates quoted for loans in U.S.  dollars to leading  European
banks for a period of time  comparable to such  Eurodollar Loan offered by major
banks in New York City at  approximately  11:00 a.m. New York City time,  on the
day  that is two  (2)  London  Banking  Days  preceding  the  first  day of such
Eurodollar  Loan.  In the event  that the  Agent is  unable  to obtain  any such
quotation  as  provided  above,  it will be  deemed  that  LIBOR  pursuant  to a
Eurodollar Loan cannot be determined.

     In the event that the Board of  Governors  of the  Federal  Reserve  System
shall impose a Reserve  Percentage  with respect to LIBOR  deposits then for any
period during which such Reserve Percentage shall apply, LIBOR shall be equal to
the amount  determined  above  divided by an amount equal to 1 minus the Reserve
Percentage.

     "Lien"  means  any  security  interest,  mortgage,  pledge,  hypothecation,
assignment,  deposit  arrangement,  encumbrance,  lien (statutory or other),  or
preference,  priority or other security agreement or preferential arrangement of
any kind or nature whatsoever  (including,  without limitation,  any conditional
sale or other title retention agreement,  any financing lease, and the filing of
any financing  statement  (but only to the extent any such  financing  statement
purports  to record  the grant of a  security  interest  and not  including  any
financing   statements  filed  for  notice  purposes  only)  under  the  Uniform
Commercial  Code or comparable law of any  jurisdiction in respect of any of the
foregoing).

     "Loan" and "Loans" are  defined in Section 2.1.

     "Loan  Documents"  means,  collectively,  this Agreement and each document,
agreement  and  instrument  executed in connection  herewith or pursuant  hereto
together with each document,  agreement and  instrument  made by the Borrower or
any Guarantor with or in favor of or owing to the Agent or either Bank.


                                       14
<PAGE>

     "Master Agreement  Obligations" means the obligation to reimburse Fleet for
any amount  paid to FNB on account of any of  Borrower's  obligations  under the
Master Agreement, as described in Section 2.6

     "Marketing Services  Agreements" means any and all other agreements entered
into by the Borrower  and/or the Guarantor  and a Person,  pursuant to which the
Borrower  and/or  Guarantor  retains  the  services of such Person to expand the
marketing,  distribution and sales network for existing products of the Borrower
and/or Guarantor and to assist in the introduction of new products to market.

     "Master Agreement" means that certain Master Agreement dated April 29, 1998
entered into between the Borrower  and FNB,  which  amended the original  master
agreement dated June 5, 1995 between the Borrower and NatWest Bank, N.A.

     "Material  Adverse Effect" means a material adverse effect on the business,
operations,  property  or  financial  or other  condition  of the  Borrower  and
Guarantor,  taken as a whole,  or on the  ability  of the  Borrower  and/or  the
Guarantor,  jointly and severally, to perform their respective obligations under
this Agreement and the other Loan Documents.

     "Maximum Credit" is defined in Section 2.1.

     "Mortgage"  means that certain  Mortgage  dated even date herewith given by
the Borrower in favor of the Agent for the benefit of the Banks.

     "Multiemployer  Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA contributed to by Borrower or an ERISA Affiliate or to which
the Borrower or an ERISA Affiliate has any obligation or liability.

     "New Senior  Subordinated  Notes" means the 16.5% Senior Subordinated Notes
due March 1, 2006 of the Borrower issued pursuant to the Note Agreement.

     "Note  Agreement" means the Note Agreement dated as of March 9, 1998, among
the Borrower,  Albion  Alliance  Mezzanine  Fund,  L.P. and The  Equitable  Life
Assurance Society of the United States, in an aggregate  principal amount not in
excess of $10,500,000,  and the Unconditional Guaranty,  dated March 9, 1998, of
the obligations thereunder by the Guarantors


                                       15
<PAGE>

     "Notes" means those certain Secured Revolving Notes dated December 16, 1998
made by the Borrower in favor of the Banks in the aggregate  principal amount of
up to  $35,000,000,  which  Notes  are  given in  substitution  for the  Seventh
Restated  Secured  Revolving  Note  dated  October  19,  1998  in the  aggregate
principal amount of $30,000,000 (the "Restated Note"),  but not in cancellation,
discharge  or  extinguishment  of the  indebtedness  formerly  evidenced  by the
Restated Note and now evidenced by the Notes.

     "Obligations"  means  all  of  Borrower's   liabilities,   obligations  and
Indebtedness  to the  Agent  and the  Banks of any and  every  kind  and  nature
(including,  without limitation, any and all interest, commitment fees, charges,
expenses,  attorneys'  fees and other sums  chargeable  to Borrower by the Banks
and/or the Agent and future  advances  made to or for the benefit of  Borrower),
whether  arising  under the Loan  Documents  or  otherwise  (including,  without
limitation,  the  Master  Agreement  Obligations),  whether  heretofore,  now or
hereafter owing,  arising, due, or payable from Borrower to the Banks and/or the
Agent and howsoever  evidenced,  created,  incurred,  acquired or owing, whether
primary,  secondary,   direct,  contingent,   fixed,  or  otherwise,   including
obligations  of  performance,  and  including  but  not  limited  to,  all  such
liabilities and obligations arising in connection with the Fleet Mortgage Loan.

     "Payment Office" means 208 Harristown Road, Glen Rock, New Jersey 07452.

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "Permitted Liens" is defined in Section 10.15.

     "Person" means an individual,  partnership,  corporation,  business  trust,
joint  stock  company,  trust,   unincorporated   association,   joint  venture,
Governmental Authority or other entity of whatever nature.

     "Plan" means any employee  benefit plan as defined in Section 3(3) of ERISA
which  covers the  employees  or former  employees  of the  Borrower or an ERISA
Affiliate,  under which the Borrower or an ERISA Affiliate has any obligation or
liability  or  under  which  the  Borrower  or  an  ERISA   Affiliate  has  made
contributions within the preceding five years, other than a Multiemployer Plan.

     "Prime Rate" means the  variable  per annum rate of interest so  designated
from time to time by the Fleet National Bank as its "prime rate". The Prime Rate
is a reference rate and does not  necessarily  represent the lowest or best rate
being charged to any customer.


                                       16
<PAGE>

     "Proceeds"  means all  "proceeds" (as defined in the UCC) of, and all other
profits,  rentals,  or receipts,  in whatever form, arising from the collection,
sale,  lease,  exchange,  assignment,  licensing  or other  disposition  of,  or
realization upon, any Collateral,  including,  without limitation, all claims of
the Borrower  and/or the Guarantor  against third parties for loss of, damage to
or destruction of, or proceeds payable under, or unearned  premiums with respect
to, policies of insurance in respect of, any Collateral, and any condemnation or
requisition  payments  with respect to any  Collateral or any other Asset of the
Borrower  and/or the  Guarantor,  in each case whether now existing or hereafter
arising.

     "Product Licensing Agreements" means any and all agreements entered into by
the Borrower  and/or the  Guarantor  and a Person for the retail use of products
developed by the Borrower or Guarantor.

     "Receivable"  means, as at any date of  determination  thereof,  the unpaid
portion of the obligation,  as stated in the invoice therefor,  of a customer of
the Borrower or a Guarantor in respect of Inventory or services  rendered in the
ordinary course of business,  which amount has been earned by performance  under
the terms of the related contract or purchase order and recognized as revenue on
the  books of the  Borrower  or a  Guarantor,  as the  case  may be,  net of any
credits, rebates or offsets owed to the customer.

     "Reportable Event" means any event set forth in Section 4043(b) of ERISA or
the regulations thereunder.

     "Required Banks" means the unanimous consent of the Banks.

     "Requirement   of  Law"  means  as  to  any  Person,   the  certificate  of
incorporation and bylaws or other  organizational or governing documents of such
Person,  and any law (including,  without  limitation,  any Environmental  Law),
treaty,  rule,  regulation,  code,  directive,  policy,  order or requirement or
determination  of an  arbitrator  or a court  or  other  Governmental  Authority
whether now or hereafter  enacted or in effect,  in each case  applicable  to or
binding  upon such Person or any of its  property or to which such Person or any
of its property is subject.

     "Reserve  Percentage"  means for any day that  percentage  (expressed  as a
decimal) which is in effect on such day, as prescribed by the Board of Governors
of the Federal  Reserve System (or any successor)  for  determining  the maximum
reserve  requirement for a member bank of the Federal Reserve System in New York
City with deposits exceeding one billion dollars in respect of


                                       17
<PAGE>

"Eurocurrency  liabilities"  (or in respect of any other category of liabilities
which  includes  deposits by reference to which the interest  rate on Eurodollar
Loans is determined  or any category of  extensions of credit or other  assets).
With  respect to increases  in the Reserve  Percentage,  the LIBOR Rate shall be
adjusted automatically on and as of the effective date of any such increase.

     "Responsible  Officer"  means  the  chief  executive  officer  or the chief
financial officer of the Borrower.

     "Slotting  Fees"  means  fees  payable  by the  Borrower  or  Guarantor  in
connection with any  arrangement  whereby vendors of products of the Borrower or
any  Guarantor  have  agreed to make  available  such  products  for  commercial
distribution in retail or wholesale stores of such vendors.

     "Subordinated  Debt" means any  Indebtedness  of the Borrower or any of its
Subsidiaries,  subordinate to the Obligations  hereunder,  the terms (including,
without  limitation,  interest rate,  equity  participation,  principal  amount,
amortization, collateralization, covenants, events of default, subordination and
lien priority) of which are in form and substance acceptable to the Agent in its
sole discretion.

     "Subsidiary"  means any Person  (including  the  Guarantor) as to which the
Borrower  shall at the time,  directly or indirectly  through a Subsidiary,  (i)
have sufficient  voting power to entitle it to elect  immediately or to have had
elected a majority of the board of directors or similar  governing  body of such
Person, or (ii) own 50% or more of the equity interests issued by such Person.

     "Tangible Net Worth" means,  at a particular  date, the excess,  if any, of
(a) all  amounts  which  would  be  included  under  shareholders'  equity  on a
consolidated  balance  sheet of the Borrower and its  consolidated  Subsidiaries
determined in accordance  with GAAP as at such date,  less (b) Intangibles as at
such date.

     "Termination  Date"  means  the  earlier  of (i)  the  day  the  Loans  are
accelerated pursuant to Section 12.2, or (ii) the Commitment Expiration Date.

     "Trademark Collateral Assignment" means the Trademark Collateral Assignment
dated even date  herewith  given by the  Borrower  in favor of the Agent for the
benefit of the Banks,  as the same may from time to time be  amended,  modified,
supplemented or renewed.


                                       18
<PAGE>

     "Uniform  Commercial  Code" or "UCC" means the Uniform  Commercial  Code as
from time to time in effect in the  State of New  Jersey;  provided,  that if by
reason  of  mandatory  provisions  of  law,  the  perfection  or the  effect  of
perfection or  non-perfection  of any Lien on any  Collateral is governed by the
Uniform  Commercial  Code as in effect in a jurisdiction  other than New Jersey,
"UCC" means the Uniform  Commercial Code as in effect in such other jurisdiction
for purposes of the provisions  hereof relating to such perfection or the effect
of  perfection  or  non-perfection.  References  to sections of the UCC shall be
construed to refer to any successor sections of the UCC.

                         SECTION 2: TERMS OF BORROWINGS

     2.1 Commitment; Maximum Credit. Subject to the terms and conditions of this
Agreement, each Bank severally agrees to make loans to the Borrower (hereinafter
collectively  referred to as "Loans" and individually as a "Loan"), from time to
time before the  Termination  Date, in such amounts as Borrower may from time to
time request, not to exceed at any time outstanding the amount set opposite such
Bank's name below;  provided,  however, that the aggregate outstanding principal
amount of Loans at any time  outstanding  shall at no time  exceed the lesser of
(A) the Commitment, or (B) the Borrowing Base (the "Maximum Credit"):

               Name of Bank                   Amount
               ------------                   ------

               Fleet Bank, N.A.               $25,000,000.00

               Sovereign Bank                 $10,000,000.00

                                     TOTAL    $35,000,000.00

Each  Loan  shall  be made by each  Bank in the  proportion  which  that  Bank's
Commitment  bears to the total amount of all the Banks'  Commitments;  provided,
however,  that the failure of any Bank to make any requested  Loan to be made by
it on the date  specified for such Loan shall not relieve each other Bank of its
obligation  (if  any) to make  such  Loan on such  date,  but no Bank  shall  be
responsible  for the  failure  of any other  Bank to make any Loan to be made by
such other Bank.  Subject to the terms hereof,  the Borrower may borrow,  prepay
and reborrow,  and may continue and convert any Loan in accordance  with Section
2.5, until the  Termination  Date. The Banks have no obligation to make any Loan
on or after the Termination Date.


                                       19
<PAGE>

     2.2 Procedure for Loans. The Borrower may borrow under the Commitment prior
to the  Commitment  Expiration  Date on any  Business  Day by  giving  the Agent
irrevocable  notice  of a  request  for a Loan  hereunder  (a) in  the  case  of
Eurodollar  Loans  two  (2)  Business  Days  before  a  proposed   borrowing  or
continuation  or conversion  and (b) in the case of  Fluctuating  Rate Loans not
less than one (1) and not more than five (5)  Business  Days  before a  proposed
borrowing or  continuation  or  conversion,  setting forth (i) the amount of the
Loan requested,  which shall not be less than $50,000, and, if greater, shall be
in an integral multiple of $10,000 (except that any Loan,  subject to Section 5,
may be in the  aggregate  amount of the unused  Commitment),  (ii) the requested
borrowing date or Interest Period  commencement  date, as the case may be, (iii)
whether the  borrowing  or  Interest  Period is to be for a  Eurodollar  Loan or
Fluctuating  Rate  Loan  or a  combination  thereof,  and  (iv) if  entirely  or
partially a Eurodollar Loan, the length of the Interest Period  therefor,  which
shall be 1, 2, 3, 4 or 6 months. As used in this section 2.2, "conversion" shall
mean the  conversion  from one interest  rate to another  interest  rate as more
fully  described in this  Agreement.  Such notice  shall be written  (including,
without  limitation,  via  facsimile  transmission)  and shall be  sufficient if
received  by 1 p.m.  New York  time on the date on which  such  notice  is to be
given.

The Agent shall  promptly  notify each Bank of each such notice  received by it.
Not later  than 2 p.m.  New York time on the date of such  Loan,  each Bank will
make  available  to the Agent at its  Payment  Office in  immediately  available
funds, such Bank's pro-rata share of such Loans.  Unless prior written notice is
otherwise received by the Agent from the Borrower, Loans will be made by credits
to the  Borrower's  demand deposit  account  maintained  with the Agent.  If the
Borrower furnishes such notice but no election is made as to the type of Loan or
the Interest Period to be applicable  thereto,  the Loan will automatically then
be made as a Fluctuating Rate Loan until such required  information is furnished
pursuant to the terms thereof.

     2.3  Non-Receipt  of Funds by Agent.  Unless the Agent shall have  received
notice  from a Bank prior to the date on which such Bank is to provide  funds to
the  Agent  for a Loan to be made by such  Bank  that  such  Bank  will not make
available to the Agent such funds,  the Agent may assume that such Bank has made
such funds  available to the Agent on the date of such Loan in  accordance  with
Section 2.2 and the Agent in its sole discretion may, but shall not be obligated
to, in reliance  upon such  assumption,  make  available to the Borrower on such
date a  corresponding  amount.  If and to the extent such Bank shall not have so
made such funds  available to the Agent,  such Bank agrees to repay to the Agent
forthwith on demand


                                       20
<PAGE>

such corresponding  amount together with interest thereon, for each day from the
date such amount is made available to the Borrower until the date such amount is
repaid to the Agent,  at the customary  rate set by the Agent for the correction
of errors among banks for three (3) Business  Days,  and thereafter at the Prime
Rate.  If such Bank shall  repay to the Agent such  corresponding  amount,  such
amount  so  repaid  shall  constitute  such  Bank's  Loan for  purposes  of this
Agreement.  If such Bank does not pay such  corresponding  amount forthwith upon
Agent's demand therefor,  the Agent shall promptly notify Borrower, and Borrower
shall  immediately  pay such  corresponding  amount to the Agent  with  interest
thereon,  for  each  day from the date  such  amount  is made  available  to the
Borrower  until the date such  amount  is  repaid to the  Agent,  at the rate of
interest applicable at the time to such proposed Loan.

     Unless the Agent shall have received  notice from the Borrower prior to the
date on which any payment is due to the Banks  hereunder  that the Borrower will
not make such  payment in full,  the Agent may assume that the Borrower has made
such  payment  in full to the  Agent  on such  date  and the  Agent  in its sole
discretion may, but shall not be obligated to, in reliance upon such assumption,
cause to be  distributed  to each Bank on such due date an  amount  equal to the
amount then due such Bank.  If and to the extent the Borrower  shall not have so
made such  payment  in full to the  Agent,  each Bank  shall  repay to the Agent
forthwith on demand such amount  distributed to such Bank together with interest
thereon,  for each day from the date  such  amount is  distributed  to such Bank
until the date such Bank repays such amount to the Agent,  at the customary rate
set by the Agent for the correction of errors among banks for three (3) Business
Days, and thereafter at the Prime Rate.

     2.4 Borrowing Warranty;  Conditions. Each Borrowing Notice delivered to the
Agent pursuant to Section 2.2 shall constitute a warranty and  representation to
the Agent and the Banks that,  as of the date of such  Borrowing  Notice and the
date of the borrowing  proposed in such Borrowing  Notice,  all of the following
are true and correct: (a) the representations and warranties of the Borrower and
the  Guarantor  set forth in  Sections 8 and 9 below are true and correct in all
material respects, (b) the covenants of the Borrower and the Guarantor set forth
in Section 10 below have been complied with and are true and correct, and (c) no
Event of Default or Default  shall have  occurred  or will  result from the Loan
described  in  or  the  transaction   contemplated  by  such  Borrowing  Notice.
Notwithstanding  anything  contained in this Agreement to the contrary,  no Bank
shall have any obligation to make any Loan if an Event of Default or Default (a)
shall exist on the date of such proposed  borrowing or (b) shall result from the
making of such Loan.


                                       21
<PAGE>

     2.5 Continuation and Conversion of Loans. The Borrower shall have the right
at any  time on  prior  irrevocable  written  or telex  notice  to the  Agent as
specified  in  this  Agreement  (i)  to  continue  any  Eurodollar  Loan  into a
subsequent  Interest  Period,  (ii)  to  convert  any  Eurodollar  Loan  into  a
Fluctuating  Rate Loan,  and (iii) to convert any  Fluctuating  Rate Loan into a
Eurodollar  Loan  (specifying  the Interest  Period to be  applicable  thereto),
subject to the following:

     (a) in the case of a conversion of less than all of the outstanding  Loans,
the aggregate principal amount of Loans converted shall not be less than $50,000
and shall be an integral multiple thereof;

     (b) no Eurodollar Loan shall be converted at any time other than at the end
of an Interest Period applicable thereto; and

     (c) any  portion of a Loan  maturing or required to be prepaid in less than
one month may not be converted into or continued as a Eurodollar Loan.

     The  Agent  shall  promptly  notify  each  Bank of each  such  notice.  All
conversions  and renewals shall be made in the proportion  that each Bank's Loan
bears to the total amount of all the Banks' Loans.

     In the event  that the  Borrower  shall not give  notice  to  continue  any
Eurodollar  Loan in to a  subsequent  Interest  Period  on the  last  day of the
Interest   Period  thereof,   such   Eurodollar  Loan  (unless   prepaid)  shall
automatically  be converted into a Fluctuating  Rate Loan.  The Interest  Period
applicable to any Eurodollar  Loan  resulting from a conversion or  continuation
shall be specified by the Borrower in the  irrevocable  notice  delivered by the
Borrower  pursuant to this Agreement;  provided,  however,  that, if such notice
does not specify the Interest  Period to be applicable  thereto,  the Loan shall
automatically  be  converted  into,  or  continued  as,  as the  case  may be, a
Fluctuating Rate Loan until such required  information is furnished  pursuant to
the terms hereof.  Notwithstanding  anything to the contrary contained above, if
an Event of Default shall have occurred and is  continuing,  no Eurodollar  Loan
may be continued into a subsequent  Interest Period and no Fluctuating Rate Loan
may be converted into a Eurodollar Loan.

     2.6 Master  Agreement.  In the event that Borrower  fails to pay any amount
that is due an owing to FNB under and  pursuant to the Master  Agreement  (after
giving effect to any applicable  grace period),  then upon demand by FNB, in its
sole discretion,  Fleet shall pay such amount directly to FNB for the account of
the


                                       22
<PAGE>

Borrower  and the  Borrower  hereby  authorizes  and consents to such payment by
Fleet. The Borrower agrees that (i) FNB shall have no obligation to demand Fleet
to  advance  such  funds on behalf of the  Borrower,  (ii) the  making of such a
demand by FNB will not create any obligation to make such a demand in the future
and (iii) at all  times,  FNB may choose  not to make such  demand  and  choose,
instead,  to  exercise  its rights  under the Master  Agreement.  It shall be an
additional  Obligation  of Borrower to reimburse  Fleet for any amount Fleet may
pay on account  of any amount  that is due and owing by  Borrower  to FNB.  Such
additional Obligation shall be due upon demand and shall bear interest at a rate
per annum equal to the Default Rate from, and including,  the date of payment by
Fleet to, but excluding,  the date Borrower reimburses Fleet for such additional
Obligation.  FNB is an intended  third-party  beneficiary of Fleet's obligations
under this Section 2.6.

                        SECTION 3: NOTES EVIDENCING LOANS

     3.1 Promissory Notes. The Loans shall be evidenced by the Secured Revolving
Notes in the  principal  amount  equal  to such  Bank's  Commitment  made by the
Borrower  in  favor of each  Bank and  otherwise  in  substantially  the form of
Exhibit A, appropriately  completed.  The Notes shall be stated to mature on the
Termination  Date, shall bear interest on the unpaid principal amount thereof at
the rate per annum as set forth  herein,  shall be payable as to  principal  and
interest  in the  manner  and on the dates  specified  in this  Agreement  until
payment in full. The outstanding  principal amount of the Notes plus all accrued
and unpaid interest thereon shall be due and payable on the Termination Date.

     3.2 Recordkeeping. The Banks shall record, in accordance with its usual and
customary  practices,  the date and amount of each Loan,  and the interest rate.
The Banks may, at their option, record such information on the schedule attached
to the Notes. Each Bank's records (including such schedule) shall be presumptive
evidence of the subject matter  thereof.  A Bank's failure to so record any such
amount or any error in so recording any such amount shall not limit or otherwise
affect the Obligations or any part thereof.

               SECTION 4: INTEREST; FEES; ADMINISTRATION OF LOANS

     4.1 Interest Rate. (a) With respect to each Loan, the Borrower  promises to
pay interest on the unpaid principal amount thereof for the period commencing on
the date of such Loan until such Loan is paid in full at a rate per annum  equal
to the Lending Rate; provided, that any amounts which are not paid when due


                                       23
<PAGE>

hereunder  (whether at  maturity,  by  acceleration  or  otherwise),  shall bear
interest,  payable on demand,  from the due date thereof until such amount shall
be paid, at a rate per annum equal to the Default Rate.

     (b) All  computations of interest and fees shall be calculated on the basis
of a 360 day year for the actual number of days elapsed.  Each  determination by
the Agent of an interest rate hereunder shall be conclusive and binding,  absent
demonstrative error.

     4.2 Payment of  Interest.  Interest on the Loans shall be payable in lawful
money of the United States in immediately  available  funds on the last Business
Day of each calendar month and on the Termination  Date, except that interest on
Eurodollar  Loans shall not be payable on the last Business Day of each calendar
month but on the last day of each Interest  Period for said Eurodollar loan and,
for any  Interest  Period in excess of three  months,  at three month  intervals
after the first day of such Interest Period.

     4.3 Late Payment.  Any payment of principal or interest not received within
ten (10)  days of its due date  shall be  accompanied  by a late  charge of five
percent (5%) of the amount of such payment.

     4.4 Maximum  Interest.  In no contingency or event  whatsoever,  whether by
reason of  acceleration  of maturity of the Loan or otherwise,  shall the amount
paid or  agreed  to be paid to any  Bank for the use of the  forbearance  of the
Obligations incurred herein exceed the maximum permissible under applicable law.
As used herein, the term "applicable law" shall mean the law in effect as of the
date  hereof,  provided,  however that in the event there is a change in the law
which results in a higher permissible rate of interest,  then this Agreement and
the Notes shall be governed by such new law as of its  effective  date.  In this
regard, it is expressly agreed that it is the intent of the Borrower,  the Agent
and the Banks in the  execution,  delivery and  acceptance of this  Agreement to
contract in strict compliance with the laws of the State of New Jersey from time
to time in effect. If, under or from any circumstances  whatsoever,  fulfillment
of any  provision  hereof  or of  any  of the  Loan  Documents  at the  time  of
performance of such provision shall be due, shall involve transcending the limit
of such  validity  prescribed  by  applicable  law,  then the  obligation  to be
fulfilled shall automatically be reduced to the limits of such validity,  and if
under or from circumstances whatsoever the Agent or any Bank should ever receive
as interest any amount which would exceed the highest  lawful rate,  such amount
which would be


                                       24
<PAGE>

excessive interest shall be applied to the reduction of the principal balance of
the Loan and not to the payment of interest.  This provision shall control every
other provision of all agreements between the Borrower, the Guarantor, the Agent
and the Banks.

     4.5  Utilization  Fees.  The  Borrower  agrees  to pay to the Agent for the
account of each Bank a utilization  fee on the average  daily unused  portion of
the  Commitment  from the  Closing  until  the  Termination  Date at the rate of
one-eighth  (.125%) percent per annum,  payable on the last Business Day of each
March,  June,  September  and December and on the  Termination  Date,  and, with
respect to any such fee which has accrued upon a portion of the Commitment to be
reduced  pursuant to Section 5.2, on the date of such increase or reduction,  as
the case may be. Upon receipt of any  commitment  fees,  the Agent will promptly
thereafter  cause to be distributed such payments to the Banks in the proportion
that each Bank's unused Commitment bears to the total of all of the Banks unused
Commitments.

     4.6 Increased Costs. If a Bank determines that the effect of any applicable
law or government  regulation,  guideline or order or the interpretation thereof
by any Governmental  Authority charged with the administration thereof (such as,
for  example,  a change in  official  reserve  requirements  which  such Bank is
required to maintain in respect of loans or deposits or other funds procured for
funding such loans) is to increase the cost to such Bank of making or continuing
Eurodollar  Loans  hereunder or to reduce the amount of any payment of principal
or interest  receivable  thereon,  then the Borrower  will pay to such Bank such
additional  amounts as will compensate  such Bank for such  additional  costs or
reduction.  Any additional  payment under this Section will be computed from the
effective  date at which such  additional  costs have to be borne by the Bank. A
certificate as to any additional  amounts payable pursuant to this Section (with
a copy to the Agent) setting forth in reasonable  detail the basis and method of
determining  such amounts shall be presumptive as to the  determination  by such
Bank set forth therein if made reasonably and in good faith.  The Borrower shall
pay any amounts so  certified  to it by the Bank within ten (10) days of receipt
of any such certificate.  Notwithstanding  the foregoing,  no Bank shall have no
right to seek additional  compensation  hereunder unless and until it shall have
allocated  the same fairly and  equitably  among all of its  similarly  situated
customers generally affected thereby.

     4.7 Alternate Rate of Interest. In the event, any on each occasion, that on
the day two (2) Business Days prior to the  commencement  of any Interest Period
for a Eurodollar Loan,(i) the


                                       25
<PAGE>

Agent shall have  determined that dollar deposits in the amount of the requested
principal  amount of such  Eurodollar  Loan are not  generally  available in the
London  Interbank  Market,  (ii) any Bank shall have determined that the rate at
which such dollar  deposits  are being  offered will not  adequately  and fairly
reflect  the cost to such Bank of making or  maintaining  such  Eurodollar  Loan
during  such  Interest  Period,  or (iii) the Agent shall have  determined  that
reasonable  means do not exist for ascertaining the LIBOR Rate, the Bank (with a
copy to the  Agent)  and/or  the  Agent,  as the case  may be,  shall as soon as
practicable thereafter give written or facsimile notice of such determination to
the Banks and the Borrower.  In the event of any such  determination,  until the
circumstances  giving rise to such notice no longer exist,  no Eurodollar  Loans
will be made  hereunder.  Each  determination  by any Bank  and/or  the Agent as
provided hereunder shall be conclusive, absent demonstrative error.

     4.8 Change in Legality. (a) Notwithstanding anything to the contrary herein
contained,  if any  change  in any law or  regulation  or in the  interpretation
thereof  by any  governmental  authority  charged  with  the  administration  or
interpretation  thereof  shall make it unlawful for any Bank to make or maintain
any Eurodollar Loan, then, by written notice to the Borrower (with a copy to the
Agent), such Bank may:

     (i) declare that Eurodollar  Loans will not thereafter be made by such Bank
hereunder, whereupon the Borrower shall be prohibited from requesting Eurodollar
Loans  from  such  Bank  hereunder   unless  such  declaration  is  subsequently
withdrawn; and

     (ii) require that all outstanding  Eurodollar Loans made by it be converted
to Fluctuating Rate Loans, in which event (x) all such Eurodollar Loans shall be
automatically  converted to  Fluctuating  Rate Loans as of the effective date of
such  notice  as  provided  in  paragraph  (b) below  and (y) all  payments  and
prepayments  of principal  which would  otherwise have been applied to repay the
converted  Eurodollar  Loans shall  instead be applied to repay the  Fluctuating
Rate Loans resulting from the conversion of such Eurodollar Loans.

     (b) For  purposes  of this  Section,  a notice to the  Borrower by any Bank
pursuant to paragraph (a) above shall be effective,  if lawful,  on the last day
of the then current  Interest Period;  in all other cases,  such notice shall be
effective on the day of receipt by the Borrower.

                     SECTION 5: REDUCTIONS OR TERMINATION OF
                             COMMITMENT; PREPAYMENT


                                       26
<PAGE>

     5.1 Reduction or Termination of Commitment. Borrower may, from time to time
prior to the  Termination  Date and on at least  five (5)  Business  Days  prior
written notice to the Agent,  permanently reduce the amount of the Commitment to
an amount not less than the aggregate outstanding principal balance of the Loans
outstanding at such time.  Any such reduction  shall be in the amount of $50,000
or an integral multiple  thereof;  any such reduction in the Commitment shall be
permanent.  Any reduction in part of the unused portion of the Commitment  shall
be made in the proportion that each Bank's  Commitment bears to the total amount
of all the Banks' Commitments. The Borrower may at any time on like notice prior
to the  Termination  Date terminate the  Commitment  upon payment in full of the
Obligations   thereunder;   provided,   however  that  in  connection  with  any
termination and payment,  the Banks shall have the option to terminate any other
credit facility made available to the Borrower by any Bank  (including,  without
limitation,  acceleration of the Fleet Mortgage Loan) and demand payment in full
of the Obligations of the Borrower owed to such Bank thereunder.

     5.2 Voluntary  Prepayments.  The Borrower may prepay any  Fluctuating  Rate
Loan in whole or in part without  premium or penalty;  provided,  however,  that
each  partial  prepayment  on account of any  Fluctuating  Rate Loan shall be in
amount not less than $50,000.  Except as provided  otherwise in this  Agreement,
the  Borrower  may not prepay any  Eurodollar  Loan prior to the last day of the
Interest Period therefor. Each prepayment shall be made together with prepayment
of  accrued  interest  on the  amount  prepaid  to and  including  the  date  of
prepayment.

     5.3  Mandatory  Prepayments.  If, at any time,  the  aggregate  outstanding
principal   balance  of  Loan(s)  exceeds  the  Commitment,   or  the  aggregate
outstanding  principal  balance of  Loan(s)  exceeds  the  Maximum  Credit,  the
Borrower  shall  make  payment  to the Agent in an amount  equal to such  excess
together  with  any  amounts  payable  pursuant  to  Section  5.4 in  connection
therewith.  Each  prepayment  shall be made  together  with  payment  of accrued
interest on the amount prepaid to and including the date of prepayment.

     5.4 Indemnities.  The Borrower hereby indemnifies the Banks against any and
all loss and  reasonable  expenses  which the Banks  may  sustain  or incur as a
consequence of any of the following:

     (a) the failure of the Borrower to borrow a Eurodollar  Loan after  sending
notice of the amount and  requested  interest rate with respect to the making of
any such Loan;


                                       27
<PAGE>

     (b) the receipt or recovery by any Bank of all or any part of a  Eurodollar
Loan  prior  to the  maturity  or the last day of the  Interest  Period  thereof
(whether by prepayment, acceleration or otherwise); or

     (c) the conversion, prior to the last day of an applicable Interest Period,
of a Eurodollar Loan into a Fluctuating Rate Loan.

     Without limiting the effect of the foregoing,  the amount to be paid by the
Borrower to the Banks in order to so indemnify the Banks for any loss occasioned
by any of the events  described in the  preceding  paragraph,  and as liquidated
damages  therefor,  shall  be  equal  to a yield  maintenance  fee in an  amount
computed as follows:  the current  rate for United  States  Treasury  securities
(bills on a discounted  basis shall be converted  to a bond  equivalent)  with a
maturity date closest to the last day of the applicable  Interest  Period chosen
pursuant to the Fixed Rate Election as to which the prepayment is made, shall be
subtracted  from  the  "cost  of  funds"  component  of the  fixed  rate on such
Eurodollar Loan in effect at the time of prepayment.  If the result is zero or a
negative  number,  there shall be no yield  maintenance  fee. If the result is a
positive number, then the resulting percentage shall be multiplied by the amount
of the principal balance being prepaid. The resulting amount shall be divided by
360 and multiplied by the number of days  remaining in the  applicable  Interest
Period chosen  pursuant to the Fixed Rate Election as to which the prepayment is
made.  Said amount shall be reduced to a present  value  calculated by using the
number of days  remaining  in the  designated  Interest  Period  using the above
referenced United States Treasury security rate and the number of days remaining
in the applicable  Interest Period chosen pursuant to the Fixed Rate Election as
to which  the  prepayment  is made.  The  resulting  amount  shall be the  yield
maintenance  fee due to a Bank upon  prepayment  of the  Eurodollar  Loan.  Each
reference in this paragraph to "Fixed Rate Election"  shall mean the election by
the  Borrower  to borrow at the LIBOR Rate  pursuant to Section 2.2 or convert a
Loan to a Eurodollar Loan pursuant to Section 2.5.

     If by reason of an Event of  Default  the  Agent  declares  the Loans to be
immediately due and payable,  then any yield maintenance fee with respect to the
Loans shall become due and payable in the same manner as though the Borrower had
exercised such right of prepayment.

     Notwithstanding  the  foregoing,  the  Borrower  shall not be  required  to
indemnify the Banks for any losses or expenses  resulting from any of the events
described in subparagraphs (a),


                                       28
<PAGE>

(b) or (c) of this Section 5.4 following a conversion of a Eurodollar  Loan into
a Fluctuating Rate Loan pursuant to Sections 4.7 or 4.8(a)(ii) hereof.

     A certificate as to any additional amounts payable pursuant to this Section
setting forth in reasonable detail the basis and method (including  calculations
made by any Bank) of  determining  such amounts shall be  presumptive  as to the
determination  by such Bank set forth  therein  if made  reasonably  and in good
faith. The Borrower shall pay any amounts so certified to it by the Banks within
ten (10) days of receipt of any such certificate. The determination set forth on
any such certificate shall be conclusive and binding absent demonstrative error.

                               SECTION 6: PAYMENTS

     6.1 Making of Payments.  All payments of principal  of, or interest on, the
Notes, shall be made by the Borrower without setoff,  counterclaim or deductions
of any kind in lawful money of the United  States and in  immediately  available
funds to the Agent for the  account of the Banks at the  Payment  Office or such
other  location  as the Agent may from time to time  designate.  The Agent  will
promptly  distribute  to each Bank  it's  pro-rata  share of each  such  payment
received  by the Agent.  The  Borrower  agrees to  maintain  its main  operating
account (the  "Account") at the Agent  continuously  until the  Obligations  due
hereunder are paid in full.  The Agent shall,  and the Borrower  authorizes  the
Agent to,  debit the  Account  for the  amount of any  payment  as and when such
payment  becomes  due  hereunder.   Such  authorization  shall  not  affect  the
Borrower's obligation to pay when due all amounts payable hereunder,  whether or
not there are sufficient  funds in the Account.  The Borrower agrees to fund the
Account from time to time in amounts  sufficient to make the payments  hereunder
as and when they  become  due.  The  foregoing  rights of the Agent to debit the
Account shall be in addition to, and not in limitation of, any rights of set-off
which the Agent,  any Bank,  and/or any Affiliate of any Bank may have hereunder
or under any Loan Document.

     6.2 Due Date. If any payment of principal, interest or fees with respect to
the Loans falls due on a day which is not a Business  Day,  then such date shall
be extended to the next  Business  Day and such  extension of time shall in such
case be included in the  computation  of the payment of interest or fees, as the
case may be. Any payment  received after 2:00 p.m. on any day shall be deemed to
have been received on the following Business Day.

     6.3  Payments  in Respect of  Increased  Costs.  In the event that any Bank
shall have reasonably determined that any Requirement


                                       29
<PAGE>

of Law regarding  reserves,  capital adequacy,  special deposit or other similar
requirement(s)  or any change  therein or in the  interpretation  or application
thereof or compliance by any Bank or any Affiliate of such Bank with any request
or directive regarding any such requirements (whether or not having the force of
law, so long as such Bank  reasonably  believes  that  compliance  therewith  is
necessary) from any central bank or other Governmental Authority,  does or shall
have the  effect of  reducing  the rate of return on such  Bank's  capital  as a
consequence of its  obligations  hereunder to a level below that which such Bank
could  have  achieved  but for such law or change  or  compliance  (taking  into
consideration  such Bank's  policies  with respect to capital  adequacy or other
similar  requirements)  by an  amount  deemed by such  Bank in the  exercise  of
reasonable discretion to be material, then from time to time, upon submission by
such Bank  (with a copy to the  Agent)  to the  Borrower  of a written  demand a
certificate  therefor  which sets forth in reasonable  detail the basis for such
request and the  computation  of the amount  requested (the amounts set forth in
any such demand shall be presumptive  evidence thereof,  absent manifest error),
the Borrower  shall pay to such Bank such  additional  amount or amounts as will
compensate such Bank for such reduction relating to this Agreement from the date
of such event and thereafter such similar payments  requested by any Bank on the
basis set forth above. Notwithstanding the foregoing, a Bank shall have no right
to seek  additional  compensation  hereunder  unless  and  until it  shall  have
allocated  the same fairly and  equitably  among all of its  similarly  situated
customers generally affected thereby.

                             SECTION 7: THE GUARANTY

     7.1 Guarantor's Special Representations and Warranties.  In order to induce
the  Banks  to enter  into  this  Agreement  and  make  the  Loans  contemplated
hereunder, each Guarantor represents and warrants as follows:

     (a) Guarantor and the Borrower  regularly transact business with each other
and the Borrower provides benefits to and for the Guarantor, including loans and
advances for working capital purposes;

     (b) Borrower owns, directly, all of the issued and outstanding common stock
of the Guarantor and the effective  continuance of the  Guarantor's  business is
dependent upon the continued business and success of the Borrower;

     (c) The  Guarantor  is not  insolvent  (as such term is  defined in the New
Jersey Uniform Fraudulent Transfer Act); and


                                       30
<PAGE>

     (d) the  execution,  delivery and  performance  of this  Guaranty  will not
violate any provision of any Requirement of Law or Contractual Obligation of the
Guarantor  and will not result in or require the creation or  imposition  of any
Lien on any of the  properties  or  revenues  of the  Guarantor  pursuant to any
Requirement of Law or Contractual Obligation of the Guarantor.

     7.2  Guaranty.   The  Guarantor  hereby   unconditionally  and  irrevocably
guarantees  the due and  punctual  payment to the Agent,  for the benefit of the
Banks,  when  stated to be due of all  present  and  future  amounts  (including
amounts that, but for the  initiation of any proceeding  under any insolvency or
bankruptcy  law,  would  become  due)  now or at any  time or from  time to time
hereafter due or owing to the Agent and the Banks whether at maturity or earlier
by reason of  acceleration  or otherwise by or from the Borrower  arising  under
this Agreement and the other Loan Documents including,  without limitation,  the
principal  amount of the Loans together with accrued and unpaid interest thereon
(including  interest that,  but for the  initiation of any proceeding  under any
insolvency or bankruptcy  law, would accrue) and any and all fees,  expenses and
costs  payable  to the  Agent and the Banks in  connection  therewith  (all such
amounts  collectively  referred to in this Section 7 as the "Obligations").  The
Guarantor also agrees to pay any and all costs and expenses (including,  without
limitation,  all reasonable fees and disbursements of counsel) which may be paid
or incurred by the Agent or any Bank in connection  with the enforcement of this
Guaranty.

     7.3 Guaranty Absolute.  The Guarantor  guarantees that the Obligations will
be paid strictly in accordance  with the terms of the Loan Documents  regardless
of any law,  regulation or order now or hereafter in effect in any  jurisdiction
affecting  any of such  terms or the  rights of the  Agent  and the  Banks  with
respect thereto.  The liability of the Guarantor hereunder shall be absolute and
unconditional irrespective of:

     (a) any lack of validity or  enforceability  of the Loan  Documents  or any
other  agreement  between the Borrower  and the Agent  and/or any Bank  relating
thereto;

     (b) any change in the time,  manner,  place of payment of the  indebtedness
under,  or in any other  term of, or any other  amendment  or waiver  of, or any
consent to,  departure  from,  any agreement  between the Borrower and the Agent
and/or any Bank, including, without limitation, the Loan Documents;

     (c) the insolvency of, or voluntary or involuntary  bankruptcy,  assignment
for the benefit of creditors, reorganization


                                       31
<PAGE>

or other similar proceedings affecting, the Borrower or any of its assets; or

     (d) any other  circumstance  which  might  otherwise  constitute  a defense
available to, or a discharge of, the Borrower in respect of the  Obligations  or
of the Guarantor in respect of this Guaranty.

     Neither  the Agent nor the Banks  shall be  required  to  inquire  into the
powers of the Borrower or any of its directors,  officers, partners, managers or
other agents acting or purporting to act on their behalf, and monies,  advances,
renewals or credits described in Section 7.2 hereof in fact borrowed or obtained
from the Banks in professed exercise of such powers shall be deemed to form part
of the  debts  and  liabilities  hereby  guaranteed,  notwithstanding  that such
borrowing or obtaining of monies,  advances,  renewals,  or credits  shall be in
excess of the powers of the Borrower, or of its directors,  officers,  partners,
managers or other agents  aforesaid,  or be in any way  irregular,  defective or
informal. This Guaranty shall continue to be effective or be reinstated,  as the
case may be, if at any time any payment of any of the  Obligations  is rescinded
or must  otherwise  be returned  by the Agent or the Banks upon the  insolvency,
bankruptcy or reorganization of the Borrower,  or otherwise,  all as though such
payment had not been made.

     7.4 Dealing with the Borrower and Others.

     (a) The obligations and liabilities of the Guarantor hereunder shall not be
released,  discharged, limited or in any way affected by anything done, suffered
or permitted by the Agent or the Banks in connection with any monies advanced by
the Banks to the Borrower or any security therefor,  including any loss of or in
respect of any security received by the Agent or any Bank from the Borrower.  It
is agreed that the Agent, without releasing,  discharging, limiting or otherwise
affecting  in whole  or in part  the  Guarantor's  obligations  and  liabilities
hereunder, may, without limiting the generality of the foregoing:

     (i) grant time, renewals, extensions,  indulgences, releases and discharges
to the Borrower;

     (ii) take or abstain from taking securities or collateral from the Borrower
or from perfecting securities or collateral of the Borrower;

     (iii) accept compromises from the Borrower;


                                       32
<PAGE>

     (iv) apply all monies at any time received from the Borrower upon such part
of the Obligations as the Agent may see fit; or

     (v) otherwise deal with the Borrower as the Agent may see fit.

     (b) Any account  settled by or between the Agent and the Borrower  shall be
accepted by the  Guarantor  as  conclusive  evidence  that the balance or amount
thereby appearing due to the Agent is so due.

     7.5 Subrogation.  The Guarantor shall not exercise any right of subrogation
with respect to payments made to the Agent or any Bank hereunder until such time
as all  Indebtedness  of the  Borrower to the Banks shall have been  irrevocably
paid in full in cash. In the case of the  liquidation,  winding-up or bankruptcy
of the  Borrower  (whether  voluntary or  involuntary)  or in the event that the
Borrower shall make an arrangement or composition with its creditors,  the Agent
shall  have the  right to rank  first  for its full  claim  and to  receive  all
payments  in  respect  thereof  until  its  claim  has been paid in full and the
Guarantor  shall  continue  to be liable to the  Agent  for any  balance  of the
Obligations which may be owing to the Agent by the Borrower.

     7.6 Demand for Payment.  The Guarantor  shall make payment of the amount of
the liability of the Guarantor hereunder forthwith after demand therefor is made
by the Agent to the  Guarantor  in  writing.  The Agent shall not be required to
seek payment of the Obligations from Borrower,  prior to demanding  payment from
the Guarantor.

     7.7 Waiver of Notice of Acceptance.  The Guarantor  hereby waives notice of
acceptance of this Guaranty.

     7.8  Additional  Guaranties.  This  Guaranty  is in  addition  and  without
prejudice  to  any  guaranties  of  any  kind  (including,  without  limitation,
guaranties  whether or not in the same form as this instrument) now or hereafter
held by the Agent  and/or any Bank.  The Agent shall not be obligated to proceed
against any particular  guarantor,  or under any other guaranty or security with
respect to any or all of the  Obligations  before being entitled to payment from
the Guarantor under this Guaranty.

     7.9 Benefit and Binding Nature.  This Guaranty is a continuing  guaranty of
payment  and  performance  and shall (a) remain in full  force and effect  until
irrevocable  payment in full of the  Obligations  and all other amounts  payable
hereunder, (b) be binding


                                       33
<PAGE>

upon the Guarantor,  its successors and assigns, and (c) inure to the benefit of
and be enforceable by the Agent and its successors and assigns.

     7.10  Set-off.  In addition to any rights now or  hereafter  granted  under
applicable  law and not by way of  limitation  of any such rights,  each Bank is
hereby  authorized  by the  Guarantor at any time or from time to time,  without
notice to the  Guarantor,  or to any other Person,  any such notice being hereby
expressly  waived,  to set  off  and to  appropriate  and to  apply  any and all
deposits  (general or  special,  including,  but not  limited  to,  indebtedness
evidenced by  certificates  of deposit,  whether  matured or  unmatured  but not
including trust  accounts) and any other  indebtedness at any time held or owing
by such Bank to or for the credit or the account of the Guarantor against and on
account of the  Obligations  including,  but not  limited  to, all claims of any
nature  or  description  arising  out  of or  connected  with  the  Obligations,
irrespective  of  whether  or not (a) the Agent or such Bank shall have made any
demand  hereunder or (b) the Agent shall have declared the  Obligations  due and
payable and although  the  Obligations,  or any of them,  may be  contingent  or
unmatured.

     7.11 Joint and Several Obligations.  The obligations and liabilities of the
Guarantor pursuant to this Section 7 are joint and several and the Agent may, in
its sole and absolute  discretion,  enforce any such  obligations or liabilities
against either Guarantors or both Guarantors  without affecting or impairing the
further  enforcement  of such  obligations  or  liabilities  against  the  other
Guarantor or both Guarantors, as the case may be.

                              SECTION 8: COLLATERAL

     8.1  Security  Interests.  (a) To secure to the Banks the  prompt  and full
payment  of all of the  Obligations,  and to secure to Fleet  reimbursement  and
repayment  of the Letter of Credit,  the Master  Agreement  Obligations  and the
Fleet Mortgage Loan, the Borrower and the Guarantor each, jointly and severally,
hereby grant to the Agent for the ratable benefit of the Banks, a first priority
continuing  security  interest and Lien (subject to the Permitted Liens, if any,
existing  on the date  hereof)  in and to all of the  Assets  of all  kinds  and
descriptions,  wherever the same may now or  hereafter be located,  now existing
and/or owned and hereafter arising or acquired,  or in which the Borrower and/or
the  Guarantor  may  acquire  an  interest  (to the  extent  of  such  interest)
including,  without limitation:  (i) all Accounts; (ii) all Chattel Paper; (iii)
all contract rights; (iv) all Documents; (v) all General Intangibles, including,
without  limitation,  all  trade  secrets,  tradenames,   copyrights,  copyright
applications, patent


                                       34
<PAGE>

applications,  patents,  trademarks,  trademark  registrations  and applications
therefor; (vi) all Instruments;  (vii) all Equipment; (viii) all Inventory; (ix)
all Goods;  (x) to the extent not otherwise  included in clause (vii) above, all
other  machinery,   apparatus,  equipment,  fittings,  Fixtures,  furniture  and
furnishings now or hereafter located upon the real property owned or occupied by
the Borrower  and/or the Guarantor,  or any part thereof,  and used or usable in
connection with any future  occupancy or use of such property;  (xi) any and all
deposits  (general or  special,  including,  but not  limited  to,  indebtedness
evidenced by  certificates  of deposit,  whether  matured or  unmatured  but not
including trust  accounts) and any other  indebtedness at any time held or owing
by the Agent and/or any Bank to or for the credit or the account of the Borrower
and/or the  Guarantor,  as the case may be; (xii) any and all claims or payments
made under any  insurance  policy;  (xiii) all  interest of the  Borrower in any
goods the sale or lease of which  shall have given or shall give rise to, and in
all guaranties and other property securing the payment of or performance  under,
any Accounts, contracts, General Intangibles or any Chattel Paper or Instruments
referred  to  above;  (xiv)  all  replacements,   substitutions,   additions  or
accessions  to or for any of the  foregoing;  (xv) to the extent  related to the
property  described above,  all books,  correspondence,  credit files,  records,
invoices and other papers and documents,  including,  without limitation, to the
extent so related, all tapes, cards,  computer runs, computer programs and other
papers and  documents in the  possession  or control of the Borrower  and/or the
Guarantor,  as the case may be, or any computer  bureau from time to time acting
for the Borrower and/or the Guarantor, as the case may be; (xvi) all property or
interests  in property of the  Borrower  and/or the  Guarantor  which now may be
owned or hereafter may come into the possession, custody or control of the Agent
and/or any Bank, or any agent or affiliate of the Agent and/or any Bank (whether
for  safekeeping,   deposit,  custody,  pledge,   transmission,   collection  or
otherwise),  including,  without  limitation,  all rights and  interests  of the
Borrower and/or the Guarantor, as the case may be, in respect of any and all (a)
notes, drafts, letters of credit, stocks, bonds, and debt and equity securities,
whether or not certificated, and warrants, options, puts, calls and other rights
to acquire or  otherwise  relating to the same,  (b) cash,  and (c)  proceeds of
loans,  advances  and  other  financial   accommodations,   including,   without
limitation,  loans, advances and other financial accommodations made or extended
by any Bank;  (xvii) all right,  title and  interest  of  Borrower in the Master
Agreement  and each  transaction  entered into  thereunder  (including,  without
limitation,  all amounts payable or deliverable  thereunder;  and (xviii) to the
extent not otherwise  included,  all Proceeds and Products of any and all of the
foregoing (the "Collateral"). The Borrower and the Guarantor shall make


                                       35
<PAGE>

appropriate  entries upon its financial  statements  disclosing Agent's security
interest in the Collateral.  The Agent shall file, and Borrower consents to such
filing, the appropriate forms to perfect its security interest in the Collateral
in accordance with the UCC. All  capitalized  terms used in this Section 8.1 and
not otherwise  defined  herein shall have the meanings set forth in the UCC. For
purposes hereof, Equipment under a capital lease shall not be Collateral.

     (b) Upon the  reasonable  request of the Agent and in any  event,  upon the
occurrence and during the  continuance  of an Event of Default,  the Borrower or
the  Guarantor,  as the case may be,  shall  deliver the original of any written
agreement,  Instrument,  Chattel Paper and/or document creating an obligation to
pay a  Receivable  or in  respect of any of the other  Collateral  to the Agent,
together with appropriate  endorsement or other specific  evidence of assignment
(in form and substance  satisfactory  to the Agent and its counsel) and until so
delivered, such agreement, instrument or other evidence of such obligation shall
be deemed to be held by the Borrower or the Guarantor for the benefit of, and in
trust for, the Agent.

     8.2  Trademarks and Licenses.  The Borrower and the Guarantor,  jointly and
severally,  each  further  grant to the Agent,  for the  ratable  benefit of the
Banks, an irrevocable, non-exclusive license at no charge to use the trademarks,
patents,  copyrights  and  licenses  used in  connection  with the sale of Goods
including,  without limitation, those listed on Schedule 8.2 annexed hereto (the
latter, the "Trademarks")  associated with the Collateral in connection with any
foreclosure  or  liquidation  together  with the  right to grant a  nonexclusive
sublicense  without  charge to any buyer of such  Collateral  for the purpose of
resale. As used herein,  the term "Trademarks"  includes all computer  programs,
equipment formulations, manufacturing procedures, quality control procedures and
product  specifications  and  other  Collateral  used in  connection  with  such
Trademarks.

     8.3  Tradenames.  Certain  Accounts may be and/or certain of the Borrower's
and/or the Guarantor's invoices may be, from time to time, rendered to customers
under the trade names listed on Schedule 8.3 (which  together with any new trade
names used after the date  hereof are  referred to  collectively,  as the "Trade
Names" and  individually,  as a "Trade  Name").  As to such Trade  Names and the
related Accounts, the Borrower hereby warrants and agrees that:

     (a)  each  Trade  Name is a trade  name and  style  (and not the name of an
independent  corporation or other legal entity) by which the Borrower and/or the
Guarantor may identify and sell


                                       36
<PAGE>

certain  of its goods or  services  and  conduct a portion of its  business  and
Borrower and/or the Guarantor,  as the case may be, has filed or made all public
or other  notices in any  jurisdiction  required to lawfully  operate under such
Trade Names  except in those  jurisdictions,  if any,  where the failure to file
would not have a Material  Adverse  Effect on (a) the  ability  of the  Borrower
and/or  the  Guarantor  to perform  its  Obligations  hereunder  or (b) the Lien
granted in favor of the Agent for the ratable benefit of the Banks hereunder;

     (b)  all  Accounts,   Chattel  Paper  and  proceeds  thereof  and  returned
merchandise  which arise from the sale of Goods  invoiced  under the Trade Names
are and shall be (x) owned solely by the Borrower  and/or the Guarantor,  as the
case may be, and (y) subject to the  security  interest  and other terms of this
Agreement and the other Loan Documents;

     (c) new Trade Names may only be used by the Borrower  and/or the Guarantor,
as the case may be,  after the Agent is given  fifteen  (15) days prior  written
notice of the use of any such new Trade Name,  which  notice shall set forth the
name of such new Trade Name; and

     (d) Neither the Borrower nor the  Guarantor  uses any Trade Name other than
the Trade Names listed on Schedule 8.3 hereto.

     8.4  Accounts,  Inventory  and  Equipment.  Each  of the  Borrower  and the
Guarantor  represent  and  warrant  to the Banks that all of its  Inventory  and
Equipment is kept,  from time to time, at the  locations  listed on Schedule 8.4
hereto and at no other  locations (all premises listed on Schedule 8.4 which are
leased and/or are warehouse locations are hereinafter referred to as the "Leased
and Warehouse  Premises");  provided,  however,  that some  Inventory  may, upon
purchase by the  Borrower  and/or the  Guarantor,  be in transit and in all such
cases,  upon the  request of the Agent,  all  actions  necessary  to perfect the
Agent's  security  interest in such  Inventory  shall be taken by the  Borrower,
including,  without  limitation,  delivery  to the  Agent  (with  any  necessary
endorsements) of all documents of title,  bills of lading and warehouse receipts
in respect  thereof.  The place where the Borrower and the  Guarantor  keeps its
books and records concerning the Accounts is as set forth on Schedule 8.4(B).

     8.5 Chief Executive Office.  The Borrower's and Guarantor's chief executive
offices are as set forth on Schedule 8.5 annexed hereto.


                                       37
<PAGE>

     8.6 Other Places of Business.  The Borrower's and Guarantor's  other places
of business are as set forth on Schedule 8.6 annexed hereto.

     8.7 Right of Setoff.  The Borrower and the  Guarantor  each hereby grant to
the Agent for the ratable benefit of the Banks a contractual possessory security
interest in and hereby assigns, conveys,  delivers, pledges and transfers to the
Agent all  Borrower's  and  Guarantor's,  as the case may be,  right,  title and
interest in and to,  Borrower's and  Guarantor's,  as the case may be,  accounts
with the Agent whether  existing now or hereafter  arising,  including,  without
limitation all accounts held jointly with a third party.  Borrower and Guarantor
each  authorize the Agent to charge or setoff any  Obligations  against any such
accounts whether or not an Event of Default has occurred.

     8.8  Further  Documentation.  At any time and from  time to time,  upon the
written  request of the Agent and at the sole expense of the Borrower and/or the
Guarantor,  the Borrower and/or the Guarantor will promptly and duly execute and
deliver such further  instruments  and documents and take such further action as
the Agent may reasonably  request for the purpose of obtaining or preserving the
full  benefits  of this  Agreement  and the rights and  powers  herein  granted,
including,  without  limitation,  the filing of any  financing  or  continuation
statements under the UCC in effect in any jurisdiction with respect to the Liens
created  hereby.  The Borrower  and/or the Guarantor  also hereby  authorize the
Agent or any agent acting for the benefit and on behalf of the Agent to file any
such financing or continuation  statement  without the signature of the Borrower
and/or the Guarantor,  as the case may be, to the extent permitted by applicable
law. A carbon,  photographic  or other  reproduction  of this Agreement shall be
sufficient as a financing  statement for filing in any  jurisdiction.  The Agent
shall  furnish to the  Borrower a copy of any such filing made  pursuant to this
Section 8.8.

     8.9 Indemnification. The Borrower and the Guarantor, jointly and severally,
agree to pay,  and to save the Agent and the Banks  harmless  from,  any and all
liabilities, costs and expenses (including without limitation,  reasonable legal
fees and expenses) (i) with respect to, or resulting  from, any delay in paying,
any and all excise,  sales or other taxes which may be payable or  determined to
be payable  with  respect to any of the  Collateral,  (ii) with  respect  to, or
resulting from, any delay in complying with any Requirement of Law applicable to
any of the Collateral, (iii) with respect to fees, taxes or other costs incurred
with respect to recording UCC financing statements or other public recordings or
notices of security interests, or (iv) in connection


                                       38
<PAGE>

with any of the  transactions  contemplated by this Agreement or the enforcement
of the Agent's and each Bank's rights hereunder, except those liabilities, costs
and  expenses  arising  out of the Agent's and any Bank's  gross  negligence  or
willful  misconduct.  In any suit,  proceeding  or action  brought  by the Agent
and/or any Bank under any Account for any sum owing thereunder or to enforce any
provisions  of any Account or contract the Borrower and the  Guarantor,  jointly
and  severally,  will save,  indemnify and keep the Agent and the Banks harmless
from and against all expense,  loss or damage suffered by the Agent and any Bank
in such action  commenced in connection with the enforcement of any provision of
any Account or contract  except for expenses,  loss or damage arising out of the
gross negligence or willful misconduct of the Agent and any Bank (in the case of
indemnified amounts which would otherwise be owing to the Agent and any Bank).

     8.10  Maintenance  of Records.  Each of the Borrower and the Guarantor will
keep  and  maintain  at its  own  cost  and  expense,  complete  records  of the
Collateral, including, without limitation, a record of all payments received and
all credits  granted with  respect to the  Collateral.  For the Agent's  further
security,  the Agent shall have a security interest in all of the Borrower's and
the Guarantor's books and records pertaining to the Collateral.  Each shall turn
over no more than one of any such books and records, on a confidential basis, to
the Agent or to its representatives  during normal business hours at the request
of the Agent.

     8.11  Maintenance of Equipment.  The Borrower and/or the Guarantor,  as the
case may be, will maintain each item of Equipment in good  operating  condition,
ordinary  wear and tear and  normal  impairments  of  value  and  damage  by the
elements  excepted,  and will  provide  all  maintenance,  service  and  repairs
necessary for such purpose.

     8.12 Changes in  Locations,  Name,  etc. The Borrower  and/or the Guarantor
will not (i) change the location of its chief  executive  office or other places
of business from that specified in Sections 8.5 and 8.6, respectively, or remove
its books and records from the location  specified in Section 8, (ii) permit any
of the Equipment or Inventory to be kept at a location other than that listed in
Schedule 8.4 hereto  (except for Inventory sold in the normal course of business
and  Equipment  of a kind  which is usually  mobile or  movable in the  ordinary
course of business),  or (iii) change its name, taxpayer  identification number,
identity or corporate  structure to such an extent that any financing  statement
filed by the  Agent or any agent  acting  for the  benefit  and on behalf of the
Agent, in connection with this Agreement would become


                                       39
<PAGE>

misleading, unless, in each of the foregoing cases it shall have given the Agent
at least 30 days prior written notice thereof and shall do all things  necessary
to maintain the first priority status of the Agent's Liens and, further,  in the
cases of the changes described in clauses (i) and (ii) above, the same is within
the United States of America.

     8.13 Representations, Warranties and Covenants with Respect to Accounts. To
induce the Agent to enter into this  Agreement,  and each Bank to make each Loan
hereunder and to otherwise  extend credit as provided  herein,  the Borrower and
the Guarantor, jointly and severally, represent and warrant to and covenant with
the Agent and the Banks that with respect to the Accounts which are Receivables:

     (a) they are genuine, are owned free and clear of all Liens in favor of any
Person other than the Agent, are in all respects what they purport to be and are
not evidenced by a judgement;

     (b) they  represent  undisputed,  bona fide  transactions  completed in the
ordinary  course of business  and in  accordance  with the terms and  provisions
contained in the documents, if any, giving rise thereto;

     (c) the amounts  thereof  shown on their  respective  books and records are
actually and absolutely owing and are not contingent for any reason;

     (d) to the best of their  knowledge  (i) there are no  defenses,  set-offs,
counterclaims or disputes  existing or asserted with respect thereto and neither
has made any  agreement  with  any  account  debtor  thereof  for any  deduction
therefrom,  (ii) there are no facts, events,  circumstances or occurrences which
in any way impair the validity, enforceability or collectibility thereof or tend
to reduce the amount payable  thereunder from the amount thereof as shown on its
books and records, (iii) each such Account was (and will continue to be) created
in accordance with applicable  Requirements of Law, is (and will continue to be)
a legal,  valid and binding  obligation of the account debtor thereof,  (iv) all
account debtors  thereof have the capacity to contract and are solvent,  and (v)
there are no proceedings or actions which are threatened or pending  against any
account debtor thereof which might result in any material adverse change in such
account debtor's financial condition; and


                                       40
<PAGE>

     (e) each of the Receivables  indicated on the Borrowing Base Certificate as
constituting a part of the Borrowing Base is an Eligible Receivable.

     8.14 Agent's Right to Verify Validity of Accounts.  Any officer or employee
of the Agent shall have the right,  at any time or times after the Closing (upon
oral notice to the Borrower and at any time upon and after the  occurrence of an
Event  of  Default  without  notice),  in the  Agent's  name or in the name of a
nominee  of the  Agent,  to verify  the  validity,  amount  or any other  matter
relating to any  Accounts of the Borrower or the  Guarantor by mail,  telephone,
telegraph or otherwise.

     8.15  Relationships  with Account  Debtors.  Unless the Agent  notifies the
Borrower  in  writing  that  the  Agent  has  suspended  any  one or more of the
following requirements, the Borrower and the Guarantor shall each:

     (a) promptly upon its learning  thereof,  inform the Agent, in writing,  of
any assertion of any material defenses,  claims, offsets or counterclaims by any
account debtor  obligated under Eligible  Receivables in an aggregate  amount in
excess of $25,000; and

     (b) promptly  upon its receipt or learning  thereof,  furnish to and inform
the  Agent  of all  material  adverse  information  relating  to  the  financial
condition of any account  debtor  obligated  under  Eligible  Receivables  in an
aggregate amount in excess of $25,000.

     8.16  Limitations  on  Modifications,  Waivers and Extensions of Agreements
Giving Rise to Accounts.  Each of the Borrower  and the  Guarantor  will not (i)
amend, modify, terminate or waive any provision of any material agreement giving
rise  to an  Account  in any  manner  which  could  reasonably  be  expected  to
materially  adversely  affect the value of such material  Account as Collateral,
(ii) fail to exercise promptly and diligently and accordance with its historical
prior  practices,  each and every  material  right  which it may have under each
agreement giving rise to an Account or (iii) fail to deliver to the Agent a copy
of each material demand,  notice or document  received by it relating in any way
to any agreement giving rise to any Eligible Receivables.

     8.17 Limitation on Discounts,  Compromises and Extensions of Accounts. Upon
the  occurrence and during the  continuance of an Event of Default,  each of the
Borrower and the  Guarantor  will not grant any extension of the time of payment
of any of the Accounts or compromise,  compound or settle the same for less than
the full


                                       41
<PAGE>

amount thereof,  release, wholly or partially, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon.

                    SECTION 9: REPRESENTATIONS AND WARRANTIES

     Borrower  and  Guarantor,   jointly  and  severally,   make  the  following
representations and warranties:

     9.1 Corporate  Existence;  Compliance with Law. Each (a) is duly organized,
validly  existing and in good standing under the laws of the jurisdiction of its
incorporation,  (b) has the corporate power and authority to own and operate its
Assets,  to lease the property it operates as lessee and to conduct the business
in which it is currently engaged, (c) is duly qualified as a foreign corporation
and is in good standing under the laws of each jurisdiction where its ownership,
lease or  operation  of property or the conduct of its  business  requires  such
qualification  except  where  failure  to so  qualify  would not have a Material
Adverse Effect and (d) is in material compliance with all Requirements of Law.

     9.2 Corporate Power; Authorization;  Enforceable Obligations.  Each has the
requisite  corporate  power and  authority  to make,  deliver and  perform  this
Agreement  and the other Loan  Documents to which it is a party and, in the case
of the Borrower,  to borrow hereunder and each has taken all necessary corporate
action to authorize the  execution,  delivery and  performance of this Agreement
and the other Loan Documents.  No shareholder vote is necessary to authorize the
execution,  delivery  and  performance  of this  Agreement  and the  other  Loan
Documents.  No consent or  authorization  of,  filing with or other act by or in
respect  of any  Governmental  Authority  is  required  in  connection  with the
borrowings   hereunder  or  the  Guaranty  or  with  the  execution,   delivery,
performance,  validity or  enforceability  of this  Agreement and the other Loan
Documents.  Each of the Loan  Documents  has been duly executed and delivered on
behalf of the Borrower/or and the Guarantor,  as the case may be. This Agreement
constitutes,  and each of the other Loan Documents  constitutes,  a legal, valid
and binding  obligation of the Borrower and the Guarantor,  enforceable  against
each of them in  accordance  with its  terms,  except as  enforceability  may be
limited   by   applicable   bankruptcy,   fraudulent   conveyance,   insolvency,
reorganization,   moratorium  or  similar  laws  affecting  the  enforcement  of
creditors'  rights  generally  and  by  general  equitable  principles  (whether
enforcement is sought by proceedings in equity or at law).


                                       42
<PAGE>

     9.3 No Conflict.  The execution and delivery of the Loan  Documents and the
performance  by the Borrower  and/or the  Guarantor,  as the case may be, of all
Obligations  under the Loan Documents do not and will not contravene or conflict
with any material  Requirements of Law or of any material agreement binding upon
the Borrower  and/or the  Guarantor,  as the case may be.  Without  limiting the
generality of the  foregoing,  (a) the execution and delivery of this  Agreement
shall not  result  in a breach,  nor  constitute  a default  under the terms and
conditions of the New Senior  Subordinated  Notes or the Note Agreement,  (b) no
consent,  waiver or modification is necessary thereunder in order to execute and
deliver  this  Agreement  and the Notes,  or for the  Borrower  to  perform  its
obligations  under  this  Agreement  or  the  Notes,  and  (c)  the  Obligations
constitute,  and shall continue to constitute,  "Senior Debt" (as defined in the
Note  Agreement)  and  this  Agreement   constitutes,   and  shall  continue  to
constitute, a "Senior Credit Facility" (as defined in the Note Agreement).

     9.4 Title; No Other Liens.  (a) Each of the Borrower and the Guarantor,  as
the case may be,  has good  title to the  Collateral.  The  Agent's  Lien on the
Collateral now and at all times  hereafter will be perfected and subject only to
Permitted  Liens, if any, and the Agent has and at all times hereafter will have
a first priority Lien on all of its Assets for the ratable benefit of the Banks.
Other than with respect  permitted to Permitted  Liens,  no security  agreement,
financing  statement or other  public  notice with respect to all or any part of
the  Collateral  is on file or of record in any public office except as to which
UCC-3  termination  statements  have been received or which have expired and not
been renewed.  The Liens granted pursuant to this Agreement constitute perfected
Liens (to the extent such Liens can be perfected by filing) on the Collateral in
favor of the Agent, which are prior to all other Liens on the Collateral created
by the Borrower and in existence on the date hereof other than  Permitted  Liens
and which are enforceable as such against all creditors of the Borrower.

     (b) Except  for  Permitted  Liens and the Liens in favor of the Agent,  the
Borrower  and the  Guarantor  own all right,  title and  interest  in all of the
Assets reflected in the June 30, 1998 financial statements which they purport to
own (except for those Assets disposed of or acquired, as the case may be, in the
ordinary course of business since such date), free and clear of all Liens.

     9.5 Environmental  Matters. Each of the Borrower and the Guarantor,  to the
best of its  knowledge,  uses its  property  and does not permit any  tenants or
other  users  thereof to use such  property  other than in  compliance  with all
Environmental  Laws.  There  are no  Liens  or,  to the  best of its  knowledge,
threatened Liens against


                                       43
<PAGE>

the Borrower or the Guarantor,  as the case may be, its property or its tenants,
users and uses  pursuant to any  Environmental  Law. If it is revealed  that the
Borrower or the Guarantor,  as the case may be, or its property,  tenants, users
or  uses,  are  not in  full  compliance  with  any  Environmental  Law or  that
conditions  exist, or may exist,  at the property which are not  satisfactory to
the Agent in its reasonable  discretion,  the Borrower and/or the Guarantor,  as
the case may be, will undertake,  at its reasonable  cost and expense,  whatever
actions are  necessary  to bring each of the  Borrower  and the  Guarantor,  its
property,  tenants, users and uses into compliance with Environmental Law and to
correct  any  environmental  condition   unsatisfactory  to  the  Agent  to  the
satisfaction  of the Agent in its sole  discretion  and to the  satisfaction  of
federal, state, county and local environmental authorities.

     9.6 ERISA.  (a) Compliance  with ERISA.  The Borrower and each of its ERISA
Affiliates  is in  compliance  in all  material  respects  with  the  applicable
provisions of ERISA and the Code with respect to each Plan.

     (b) Prohibited  Transactions.  Neither the Borrower nor any ERISA Affiliate
has engaged in a transaction in connection  with which the Borrower or any ERISA
Affiliate  could be subject to a material  liability  for either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Code.

     (c) Plan Termination. There has been no termination of a Multiemployer Plan
or trust created under any Multiemployer  Plan that would give rise to liability
to the PBGC on the part of the Borrower or any ERISA Affiliate.  No liability to
the  PBGC  has  been  or  is  expected  to  be  incurred  with  respect  to  any
Multiemployer  Plan by the Borrower or an ERISA Affiliate.  Neither the Borrower
nor the Guarantor is aware of any pending or threatened  proceedings by the PBGC
to terminate any Multiemployer  Plan.  Neither the Borrower nor the Guarantor is
aware of any condition or set of circumstances which presents a material risk of
termination of any Multiemployer Plan by the PBGC.

     (d)  Employee  Pension  Benefit  Plans.  Neither the Borrower nor any ERISA
Affiliate  has any  obligation or liability  under,  or  contributed  within the
preceding  five years to, an employee  pension  benefit plan with the meaning of
Section 3(2) of ERISA.

     (e) Withdrawal  Liability.  Neither the Borrower nor an ERISA Affiliate has
made a complete or partial  withdrawal  from a  Multiemployer  Plan. To the best
knowledge of the Borrower, the


                                       44
<PAGE>

aggregate  liability to which the Borrower or any ERISA  Affiliate  would become
subject  under ERISA if the Borrower and all ERISA  Affiliates  were to withdraw
completely from all  Multiemployer  Plans as of the most recent  valuation date,
together with any secondary liability for withdrawal  liability the Borrower and
any ERISA  Affiliate  may have as of the date hereof,  would not have a Material
Adverse  Effect on the  business,  operations,  property or  financial  or other
condition  of the Borrower and its ERISA  Affiliates,  taken as a whole.  To the
best knowledge of the Borrower,  no such Multiemployer Plan is in reorganization
(as such term is defined in Section 4241 of ERISA) or is insolvent (as such term
is defined in Section 4245 of ERISA).

     (f) Retiree Welfare Benefits. The Borrower does not provide post-retirement
health,  medical  and  other  welfare  benefits  for  retired  employees  of the
Borrower.

     9.7 No Change.  Since June 30,  1998,  there has been no  material  adverse
change in the business, operations,  property or financial or other condition of
the  Borrower  or the  Guarantor  as such  business,  operations,  property,  or
financial or other  condition of the  Borrower and its  Subsidiaries  existed on
such date.

     9.8 No Bar. The execution,  delivery and  performance of this Agreement and
the other Loan Documents,  the borrowings  hereunder and the use of the proceeds
thereof,  will not  violate  any  material  Requirement  of Law or any  material
Contractual  Obligation,  of the Borrower or the Guarantor,  and will not result
in, or require,  the creation or  imposition  of any Lien on any of its or their
respective   properties  or  assets  pursuant  to  any  Requirement  of  Law  or
Contractual  Obligation  except  for the  Liens  granted  pursuant  to the  Loan
Documents.

     9.9 No  Litigation.  To the best  knowledge of each of the Borrower and the
Guarantor,  no  litigation,  investigation,  or  proceeding  of  or  before  any
arbitrator  or  Governmental  Authority  is pending or, to the  knowledge of the
Borrower or the  Guarantor,  threatened by or against the Borrower or any of its
Subsidiaries  or against any of its or their  respective  properties or revenues
(i) with  respect to this  Agreement  or the other Loan  Documents or any of the
transactions  contemplated  hereby,  or (ii)  which is likely to have a Material
Adverse Effect.

     9.10 No Default.  Neither the  Borrower nor any of its  Subsidiaries  is in
default under or with respect to any Contractual Obligation in any respect which
is likely to have a Material


                                       45
<PAGE>

Adverse Effect. No Default or Event of Default has occurred and is continuing.

     9.11 No Burdensome Restrictions.  No Contractual Obligation of the Borrower
or any of its  Subsidiaries  in effect on the date hereof and no  Requirement of
Law in effect on the date hereof materially adversely affects, or insofar as the
Borrower  may  reasonably  foresee  may so  affect,  the  business,  operations,
property or  financial or other  condition of the Borrower and the  Guarantor or
the ability of the Borrower and/or the Guarantor, as the case may be, to perform
any of its obligations under this Agreement or the other Loan Documents.

     9.12 Taxes.  Each of the Borrower and its  Subsidiaries has filed or caused
to be filed all tax returns  which to the knowledge of the Borrower are required
to be filed and has paid all taxes shown to be due and  payable on said  returns
or on any  assessments  made  against  it or any of its  property  and all other
taxes,  fees or  other  charges  imposed  on it and any of its  property  by any
Governmental  Authority  (other  than those the amount or  validity  of which is
currently  being  contested  in good faith by  appropriate  proceedings  and, if
applicable,  with respect to which  reserves in  conformity  with GAAP have been
provided on the books of the Borrower or its Subsidiaries,  as the case may be);
and no tax Liens have been filed  and,  to the  knowledge  of the  Borrower,  no
claims are being asserted with respect to any such taxes, fees or other charges.

     9.13 Financial  Condition.  The consolidated  balance sheet of the Borrower
and  its  consolidated  Subsidiaries  as  of  June  30,  1998  and  the  related
consolidated  statements of operations and the related consolidated statement of
shareholders'  equity for the Fiscal Year ended on such date  (certified  by BDO
Seidman),  present fairly the consolidated  financial  condition of the Borrower
and its consolidated Subsidiaries as at such dates, and the consolidated results
of their  operations  for the Fiscal  Year and the  interim  period  then ended.
Neither the Borrower nor any of its consolidated  Subsidiaries  had, at the date
of the balance sheet for the period ended June 30, 1998  referred to above,  any
material  Contingent  Obligation,  contingent  liability or liability for taxes,
long term lease or unusual forward or long term commitment, which is required to
be reflected on such financial  statements  other than such obligation which are
so reflected or adequately  reserved  against in the foregoing  statements or in
the notes thereto.

     9.14  Subsidiaries.  At the  date of this  Agreement  the  Borrower  has no
Subsidiaries other than the Guarantor, and the


                                       46
<PAGE>

Borrower owns all of the outstanding voting shares of each such Subsidiary.

     9.15  Government  Regulation.  (a)  Neither  the  Borrower  nor  any of its
Subsidiaries  is an  "investment  company"  within the meaning of the Investment
Company  Act of 1940,  as  amended,  or a "holding  company",  or a  "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", or of
a "subsidiary  company" or a "holding  company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

     (b) No part of the proceeds of any Loans hereunder will be used as "purpose
credit" within the meaning of such term under Regulations U or G of the Board of
Governors of the Federal  Reserve  System as now and from time to time hereafter
in effect, if such use would violate the provisions of Regulations U or G.

     9.16  Licenses,  Permits.  Each  has all  permits,  certificates,  licenses
(including patent and copyright  licenses),  approvals and other  authorizations
required in connection with the operation of their  businesses,  except any such
permits the  ineffectiveness  of which is not likely to have a Material  Adverse
Effect.

     9.17 No Federal Tax or ERISA Liens.  No notice of or any other  document or
instrument  creating any federal tax Lien or Lien under  Section 412 of the Code
or Section 4068 of ERISA has been issued,  recorded or filed with respect to the
assets of the Borrower or any of its Subsidiaries.

     9.18 Existing and Additional  Indebtedness;  Contingent Obligations.  There
exists no (i) Indebtedness of the Borrower or the Guarantor secured by a Lien on
any of its Assets,  except,  without duplication,  for the Obligations,  and (B)
Indebtedness  secured by Permitted  Liens, or (ii) Contingent  Obligation of the
Borrower  or the  Guarantor  secured  by a Lien  on any of its  Assets,  except,
without duplication, for the Obligations.

     9.19  Marketing  Services  and Product  Licensing  Agreements.  Neither the
Borrower nor the  Guarantor is a party to any Marketing  Services  Agreements or
Product  Licensing  Agreements,  and  each  of the  Existing  Marketing  Service
Agreements and Product  Licensing  Agreements have been terminated and are of no
further force and effect.

     9.20 Leased and Warehouse  Premises.  Other than the locations specified on
Schedule  8.4(A),  no assets of the  Borrower or the  Guarantor  are kept at any
warehouse   other  than   warehouses   of   warehousemen   which  have  executed
warehousemen's notification of


                                       47
<PAGE>

security interest and waiver of lien letters, in form and substance satisfactory
to the Agent.

     9.21 Farm  Products.  Neither the Borrower nor the  Guarantor has received,
within  one (1)  year  before  the sale of any farm  products  (as such  term is
defined in the Uniform Commercial Code) to the Borrower or the Guarantor, notice
from the secured  party of the seller or the seller of such farm products of the
existence of any security interest in such farm products.

                        SECTION 10: COVENANTS OF BORROWER

     So long as the Commitment  remains in effect,  any Loan is outstanding,  or
any other Obligation remains unpaid, the Borrower and the Guarantor, jointly and
severally, shall:

     10.1   Financial   Statements.   Furnish   to   each   Bank   substantially
contemporaneously,  each  of the  following  materials  in  identical  form  and
substance:

     (a) as soon as  available,  but in any event within  ninety (90) days after
the last day of each of its  Fiscal  Year  ends,  the Form  10-K  report  of the
Borrower and its  Subsidiaries  as at the end of such Fiscal Year and statements
of  income  and  retained  earnings  and cash  flows for such  Fiscal  Year each
prepared  in  accordance  with  GAAP  and  certified  by a firm  of  independent
certified public accountants reasonably satisfactory to the Banks, together with
management prepared  consolidated and consolidating  balance sheets.  Management
shall provide an itemized statement of capitalized expenses,  including, but not
limited to, Slotting Fees,  which shall be broken out on the management  balance
sheet,  and any expenses  related  thereto  shall be itemized on the  management
income statement.  Management shall also provide a breakdown of selling, general
and administrative expenses.  Notwithstanding the foregoing, if the Borrower has
been granted an extension from filing its Form 10-K report by the Securities and
Exchange   Commission,   then  the  reports  required  hereunder  shall  be  due
simultaneously  with the filing thereof,  but in no event later than one hundred
and five (105) days from the last day of its Fiscal Year.

     (b) as soon as  available,  but in any event  within  forty-five  (45) days
after the close of each of the first three  quarters of each Fiscal  Year,  Form
10-Q report and  management  prepared  consolidated  and  consolidating  balance
sheets,  statements  of  income  and  retained  earnings  and cash  flows of the
Borrower and its subsidiaries as of the last day of and for such quarter and for
the period of the fiscal year ended as of the close of the particular


                                       48
<PAGE>

quarter, all such quarterly statements to be certified by the chief financial or
accounting  officer of the Borrower as having been prepared in  accordance  with
GAAP (subject to year-end  adjustments and other exceptions  specified therein).
Management  shall  provide  an  itemized  statement  of  capitalized   expenses,
including,  but not limited to, Slotting Fees,  which shall be broken out on the
prepared  balance sheet,  and any expenses  related thereto shall be itemized on
the  prepared  income  statement.  Management  shall also provide a breakdown of
selling, general and administrative expenses.  Notwithstanding the foregoing, if
the Borrower  has been granted an extension  from filing its Form 10-Q report by
the  Securities and Exchange  Commission,  then the reports  required  hereunder
shall be due simultaneously with the filing thereof,  but in no event later than
fifty (50) days from the last day of its Fiscal Year.

     All such  financial  statements  required  by this  Section  10.1 are to be
prepared in reasonable  detail and in accordance with GAAP applied  consistently
throughout  the  periods  reflected  therein  (except  (i) as  approved  by such
accountants or the chief financial officer of the Borrower,  as the case may be,
and disclosed therein and (ii) with respect to any interim  statements which may
not include all disclosure required by GAAP).

     Section 10.2 Certificates; Other Information. Furnish to each Bank:

     (a) at the same time as it delivers the financial  statements called for by
subparagraphs  (a) and  (b) of  Section  10.1,  the  Borrower  shall  deliver  a
certificate  of the  chief  financial  or  accounting  officer  of the  Borrower
substantially in the form of Exhibit C annexed hereto,  demonstrating compliance
with the  financial  covenants  set forth in  Section  10.14,  10.20 and  10.27,
together with the  computations  necessary in order to determine said compliance
(such  computation  to be  presented  in a  format,  and  conducted  based  on a
methodology, in each case acceptable to the Banks);

     (b) from time to time as  requested  by the Agent or any Bank,  but no more
often than twice a year,  provide  each Bank with a written  acknowledgment,  in
form and  substance  satisfactory  to each  Bank,  from the  Borrower's  and the
Guarantor's  accountant   acknowledging  that  the  Banks  are  relying  on  the
accountant's professional accounting services to the Borrower and Guarantor, and
the Borrower's and Guarantor's knowledge of each Bank's reliance;

     (c) within one hundred  twenty  (120) days after the Fiscal Year end of the
Borrower, furnish annual projections for the


                                       49
<PAGE>

next succeeding Fiscal Year in a form reasonably acceptable to the Banks;

     (d) by the  fifteenth  (15th)  day  of  each  calendar  month,  a  complete
Receivables  and accounts  payable  aging  report and a report of the  aggregate
dollar  value of all  Inventory  held by the  Borrower for the month just ended,
such reports to be in form and substance  reasonably  satisfactory to the Banks;
supporting documentation shall include evidence of payment made thereon;

     (e) by the fifteenth (15th) day of each month,  furnish a monthly Borrowing
Base Certificate  certified by the chief financial or accounting  officer of the
Borrower; and

     (f) from time to time,  provide to the Agent and the Banks the  information
described in Section 10.30(b); and

     (g) furnish such other reports and information as the Agent or any Bank may
reasonably require.

     10.3 Payment of  Obligations.  Pay,  discharge  or otherwise  satisfy at or
before  maturity or before they become  delinquent,  as the case may be, all its
material  obligations  of  whatever  nature,  except when the amount or validity
thereof is currently  being  contested in good faith and reserves in  conformity
with GAAP with respect  thereto have been  provided on the books of the Borrower
or its Subsidiaries.

     10.4 Conduct of Business and  Maintenance of Existence.  Continue to engage
principally  in the  businesses of the same general type now conducted by it and
preserve,  renew and keep in full force and effect its  corporate  existence and
take all  reasonable  action to maintain  all rights,  privileges,  licenses and
franchises  necessary or desirable as  determined  in the normal  conduct of its
business  and comply in all  material  respects  with all  material  Contractual
Obligations and Requirements of Law.

     10.5 Inspection of Property;  Books and Records;  Discussions.  Keep proper
books of  records  and  account  in which  full,  true and  correct  entries  in
conformity in all material  respects with GAAP and all Requirements of Law shall
be made of all  dealings  and  transactions  in  relation  to its  business  and
activities; and permit representatives of the Agent and/or each Bank, including,
without limitation,  any  consulting/accounting  firm,  auditors,  appraisers or
other  professionals  engaged by the Agent and/or such Bank to visit and inspect
any of its  properties  and examine and make abstracts from any of its books and
records upon reasonable notice and at any reasonable time during normal business
hours; provided, however


                                       50
<PAGE>

that unless a Default shall have occurred and be  continuing,  such visits shall
not exceed more than two (2) per year, and to discuss the business,  operations,
properties   and  financial  and  other   condition  of  the  Borrower  and  its
Subsidiaries  with officers and  employees of the Borrower and its  Subsidiaries
and with its  independent  certified  public  accountants.  The Borrower and the
Guarantor  shall,  at the  request of the Agent  and/or any Bank,  each take all
steps  necessary to facilitate  any such  inspection,  audit,  appraisal  and/or
verification  and, without limiting the generality of the foregoing,  shall each
use its best efforts to cause its  employees to cooperate  with the Agent and/or
any such Bank in this  regard,  and the  Agent  and/or  any such Bank  shall use
reasonable efforts not to disrupt the day-to-day business of the Borrower and/or
the  Guarantor.  The Agent and the Banks agree to take  appropriate  measures to
protect any proprietary and/or confidential  information of the Borrower and its
Subsidiaries  consistent with the Agent's and such Bank's internal  policies and
procedures   with  respect  to  the   maintenance  of  customer's   confidential
information.  The Agent may, from time to time,  engage a  consulting/accounting
firm, auditors, appraisers and/or other professionals to conduct a review of the
operations of the Borrower and Subsidiaries or to assist the Agent in connection
with the exercise or enforcement of any right, power,  privilege or remedy under
this Agreement,  the Loan Documents  and/or  applicable  law. Upon request,  the
Agent shall provide the Borrower with such reasonable assurances that such other
professionals  shall  adhere  to  the  aforementioned  policies  and  procedures
regarding customer  confidential  information.  The reasonable costs of any such
reviews shall be paid by the Borrower upon demand.

     In addition to the  foregoing,  the Borrower and  Guarantor  agree that the
Agent shall be permitted to conduct  Asset based audits twice each calendar year
upon reasonable notice from the Agent to the Borrower;  the costs of such audits
to be paid by the Borrower.

     10.6 Notices. Promptly give notice to the Agent and the Banks of:

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

     (b) the  occurrence  of any default  (howsoever  characterized  or defined)
under or in connection with the New Senior Subordinated Notes;

     (c) any (i) default or event of default  under any  Contractual  Obligation
(including  under the Loan Documents) of the Borrower or any of its Subsidiaries
or (ii)  litigation,  investigation  or  proceeding  which may exist at any time
between the


                                       51
<PAGE>

Borrower or any of its Subsidiaries and any Governmental Authority and (iii) any
other  material  litigation or  proceeding  affecting the Borrower or any of its
Subsidiaries, and in addition, will furnish to the Agent within ninety (90) days
after  the  end  of  each  Fiscal  Year,  a  summary  of  all  such  litigation,
investigations or proceedings;

     (d) the  following  events,  as soon as  possible  and in any event  within
thirty  days after the  Borrower  knows or has reason to know  thereof:  (1) the
occurrence of any Reportable Event with respect to any Plan; (ii) the occurrence
of a prohibited  transaction (as defined in Section 406 of ERISA or Section 4975
of the Code) with respect to any Plan,  (iii) the  institution of proceedings or
the taking or expected taking of any other action by PBGC or the Borrower or any
ERISA  Affiliate to terminate  or withdraw or partially  withdraw  from any Plan
and, with respect to a Multiemployer  Plan, the  Reorganization or Insolvency of
such Plan (as such terms are defined in ERISA), (iv) the failure of the Borrower
or a ERISA Affiliate to make a required  installment under Section 412(m) of the
Code or any other  payment  required  under Section 412 of the Code on or before
the due date or (v) the adoption of an amendment  with respect to a Plan so that
the Borrower or a ERISA  Affiliate  is required to provide  security to the Plan
under Section  401(a)(29) of the Code, and in addition to such notice,  delivery
to the Agent of a  certificate  of a Responsible  Officer  setting forth details
relating  thereto,  and the action that the Borrower,  ERISA  Affiliate or ERISA
Affiliate proposes to take with respect thereto and when known, any action taken
or threatened by the Internal Revenue Service or the PBGC,  together with a copy
of any notice to the PBGC or IRS or any notice delivered by the PBGC or IRS; and

     (e) a material  adverse  change in the  business,  operations,  property or
financial or other  condition of the Borrower and  Subsidiaries  from that which
existed  on June  30,  1998.  Each  notice  pursuant  to this  Section  shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence  referred  to therein and stating  what  action the  Borrower  and/or
Subsidiary proposes to take with respect thereto.

     10.7 Use of Proceeds.  Use the proceeds of the Loans for general  operating
and working capital purposes in the conduct of its business.

     10.8  Other  Agreements.  Not  enter  into  any  agreement  containing  any
provision  which would be violated or breached by the  performance of Borrower's
obligations hereunder.


                                       52
<PAGE>

     10.9 Insurance.  Maintain insurance (with respect to the Collateral as well
as  comprehensive  liability  and  casualty  insurance)  of such types,  in such
amounts and against such risks as is customary in the case of companies  engaged
in a similar business with financially sound and reputable insurance  companies,
and in form and substance  reasonably  satisfactory  to the Agent,  which policy
shall  name the Agent as loss  payee and  include  a thirty  (30) day  notice of
cancellation  clause.  Borrower shall furnish to the Agent,  upon request of the
Agent a copy of such policy and proof that all premiums  theretofore  owing have
been paid in full.

     10.10  Taxes.  Pay when due all federal,  state or local or foreign  taxes,
levies,  assessments,  charges  or claims  except  when the  amount or  validity
thereof is currently  being  contested in good faith and reserves in  conformity
with GAAP with respect thereto have been provided for on its books.

     10.11 ERISA. The Borrower and any ERISA Affiliate will not:

     (i)  knowingly  engage in any  transaction  in  connection  with  which the
Borrower could be subject to either a material civil penalty  assessed  pursuant
to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code; or

     (ii) fail to make any payments when due to any Multiemployer Plan which the
Borrower or any ERISA  Affiliate  may be  required  to make under any  agreement
relating to such Multiemployer Plan or any law pertaining thereto.  The Borrower
agrees  (x) upon the  request  of the  Agent to obtain a  current  statement  of
withdrawal  liability from each  Multiemployer  Plan to which the Borrower or an
ERISA  Affiliate  contributes or to which the Borrower or an ERISA Affiliate has
an obligation to contribute  and (y) to transmit a copy of such statement to the
Agent within fifteen (15) days after the Borrower receives the same.

     10.12 Further  Documentation.  At any time and from time to time,  upon the
request of the Agent and at the sole expense of the Borrower, the Borrower shall
promptly and duly execute and deliver such further instruments and documents and
take such further action as the Agent may reasonably  request for the purpose of
obtaining or preserving the security interest granted to the Agent hereunder and
of the rights and powers granted  herein,  including,  without  limitation,  the
filing of any financing,  amendment or continuation statements under the Uniform
Commercial  Code. The Borrower hereby  irrevocably  constitutes and appoints the
Agent with full power of substitution,  as its true and lawful  attorney-in-fact
with full irrevocable power and authority in the place and stead of the Borrower
and in the name of the Borrower or in its own name, from


                                       53
<PAGE>

time to time in the Agent's discretion,  to execute and file, in Borrower's name
and  on  its  behalf,  any  Uniform  Commercial  Code  financing,  amendment  or
continuation  statement.  The Borrower  hereby  ratifies all that said  attorney
shall lawfully do or cause to be done by virtue  hereof.  This power of attorney
is a power coupled with an interest and shall be irrevocable.

     10.13  Intentionally Deleted

     10.14  Financial Covenants.

     (a) Tangible Net Worth.  Not permit its Tangible Net Worth as at the fiscal
quarters  set forth  below to be less than the  amount set forth  opposite  such
fiscal quarter ending:

     Fiscal Quarter Ended               Minimum Tangible Net Worth
     --------------------               --------------------------

          12/31/98                              $16,583,000
           3/31/99                              $17,394,000
           6/30/99                              $18,267,000
           9/30/99                              $19,159,000
          12/31/99                              $20,078,000
           3/31/00                              $21,017,000
           6/30/00,                             $22,003,000
          and each quarter thereafter;

provided,  however,  that the minimum Tangible Net Worth  requirements set forth
above shall be reduced by any reduction in Tangible Net Worth  resulting  solely
from the purchase by the Borrower of treasury  stock during the relevant  fiscal
quarters; and provided further, that the aggregate amount of all such reductions
may not exceed $1,600,000.

     (b) Leverage Ratio.  Maintain at all times, to be tested at the end of each
fiscal quarter,  a ratio of total  consolidated  liabilities of the Borrower and
its Subsidiaries  plus the present value of future minimum  Equipment  Operating
Lease payments less Subordinated Debt to consolidated  Tangible Net Worth of the
Borrower and its Subsidiaries  plus  Subordinated  Debt in a proportion not more
than 2.00 to 1.00 (total consolidated liabilities to be determined in accordance
with GAAP).

     (c) Minimum  Debt  Service  Coverage  Ratio.  Maintain at all times,  to be
tested at the end of each fiscal  quarter on a rolling four (4) quarter basis, a
ratio of earnings,  before interest,  dividends (including interest to preferred
stockholders,  if any),  taxes,  depreciation  and  amortization  and  Equipment
Operating Leases obligations and non-cash transactions, divided by


                                       54
<PAGE>

the  current  portion  of long  term debt at such  time,  plus  actual  interest
expense, plus dividends (including interest to preferred stockholders,  if any),
of not less than 1.30 to 1.00 ("long term debt" means  indebtedness for borrowed
money which by its terms  matures more than 12 months after the date incurred or
if maturing  sooner,  the maturity  thereof may be extended at the option of the
debtor beyond such 12 month period;  for purposes  hereof,  long term debt shall
include obligations under Capitalized Leases and Equipment Operating Leases).

     (d) Fixed Charge Ratio.  Not permit at any time, to be tested at the end of
each  fiscal  quarter  on a  rolling  four  (4)  quarter  basis,  the  ratio  of
Consolidated Cash Flow and Operating Lease Expense to Consolidated Fixed Charges
to be less than 1.25 to 1. (e) Consolidated  Net Worth.  Maintain a Consolidated
Net Worth of not less than $10,000,000 plus 50% of Consolidated Net Earnings for
each Fiscal Year commencing with the first Fiscal Year ending after December 31,
1998,  but only to the extent that such amount  derived from the  application of
said percentage is a positive number.

     10.15 Limitation on Liens. Not create, incur, assume or suffer to exist any
Lien  upon  any of its  property,  assets  or  revenues,  whether  now  owned or
hereafter acquired,  except Liens in favor of the Agent and existing on the date
hereof and:

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

     (b)  carriers',  warehousemen's,  mechanics',  materialmen's,  repairmen's,
vendor's,  lessor's  or other  like  Liens  arising  in the  ordinary  course of
business which are not overdue or which are being contested in good faith and by
appropriate proceedings and for which adequate reserves have been made;

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

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


                                       55
<PAGE>

     (e) easements,  rights-of-way,  restrictions and other similar encumbrances
incurred in the ordinary  course of business  which,  in the aggregate,  are not
substantial in amount,  and which do not in any case materially detract from the
value of the property  subject  thereto or interfere with the ordinary course of
the business of the Borrower or any of its Subsidiaries;

     (f) Liens on the assets of Subsidiaries  securing Indebtedness owing to the
Borrower so long as such Indebtedness and Liens are assigned to the Agent;

     (g) Liens  granted  with  respect to real  and/or  tangible  or  intangible
personal  property,  which  property  is  acquired  after  the date  hereof  (by
purchase,  construction or otherwise) by the Borrower or any Subsidiary, each of
which Liens were incurred to finance,  refinance or refund,  the cost (including
the cost of construction) of the respective property; provided that no such Lien
shall  extend to or cover any  property of the  Borrower or any such  Subsidiary
other than the respective property so acquired and improvements thereon;

     (h) Liens granted to Persons in respect of Capitalized  Leases of Equipment
and Equipment Operating Leases (collectively, the Liens described in clauses (a)
through (h) above are referred to herein as the "Permitted Liens"); and

     (i) Liens to Fleet in connection with any Indebtedness to Fleet, including,
but not limited to, the Fleet Mortgage Loan,  and any  extensions,  renewals and
modifications thereof.

     10.16 Limitation on Fundamental Changes. (a) Not enter into any transaction
of merger or  consolidation  (other than in a transaction  to which the Borrower
and the Guarantor are the only parties and provided,  that,  the Borrower is the
surviving  entity  of any such  merger or  consolidation  or  amalgamation);  or
liquidate,   wind-up  or  dissolve   itself  (or  suffer  any   liquidation   or
dissolution).

     (b) Not form or acquire any  Subsidiaries  other than the  Guarantor  which
would have a Material  Adverse  Effect,  provided that the  foregoing  shall not
apply to the  formation of any new wholly owned  Subsidiary of the Borrower that
executes and delivers in favor of the Agent a guaranty and security agreement on
substantially the same terms as set forth in Section 7 and 8,  respectively,  as
well as resolutions of its board of directors authorizing same.


                                       56
<PAGE>

     10.17 Limitation on Sale of Assets.  Not sell, lease,  assign,  transfer or
otherwise dispose of, or give options to purchase any of its Assets  (including,
without  limitation,  Receivables and leasehold  interests) whether now owned or
hereafter  acquired,  and whether or not leased back except (i)  dispositions of
Inventory or used-worn out, obsolete or surplus Equipment in the ordinary course
of business and (ii)  dispositions of Assets to or from the Guarantor to or from
the  Borrower,  as the  case  may be,  so long as such  dispositions  are in the
ordinary course of business consistent with past practices.

     10.18 Limitation on Dividends.  Not (i) declare or pay any dividends (other
than  lawful  dividends  to  the  Borrower  from  the  Guarantor,  dividends  to
stockholders  of the  Borrower  payable  in  shares  of  common  stock  and cash
dividends to holders of the preferred stock of the Borrower, so long as no Event
of Default has occurred),  (ii) purchase,  redeem,  retire, or otherwise acquire
for  value  any  of  its  stock  now  or  hereafter  outstanding  in  excess  of
$1,600,000.00 in the aggregate for the Borrower and Guarantor, or (iii) make any
distribution  of Assets to its  stockholders  as such whether in case,  or other
Assets or  obligations,  (iv)  allocate or  otherwise  set apart any sum for the
payment of any dividend  (other than lawful  dividends to the Borrower  from the
Guarantor) or distribution  on, or for the purchase,  redemption,  or retirement
of, any shares of its stock, or (v) make any other  distribution by reduction of
capital or otherwise  in respect of any shares of its stock,  or (vi) permit the
Guarantor to purchase or  otherwise  acquire for value any stock of the Borrower
in excess of $1,600,000.00 in the aggregate for the Borrower and Guarantor.

     10.19 Investments.  Not directly or indirectly, make or suffer to exist any
investment (by way of transfer of Assets,  contributions to capital, purchase of
Stock or other  securities  or  evidence  of  Indebtedness,  acquisition  of the
business or assets, or otherwise) in, or make or suffer to exist any advances or
loans to, any Person, except for:

     (i)  loans by the  Borrower  to the  Guarantor  in the  ordinary  course of
business consistent with past practices;

     (ii) loans or advances by the Borrower to  shareholders or employees of the
Borrower outstanding on June 30, 1998;

     (iii) advances to employees for business  related  purposes;  such advances
not to exceed $50,000 in the aggregate for the Borrower and the Guarantor, taken
as a whole, in each Fiscal Year;


                                       57
<PAGE>

     (iv) Accounts arising in the ordinary course of business;

     (v) investments in certificates of deposit of a banking  institution having
assets  in excess of  $100,000,000  or in  securities  of the  United  States of
America or commercial paper with not less than a Pl (or equivalent)  rating (all
of the  foregoing  maturing  within one (1)  year),  which  investments,  in the
aggregate, do not exceed $100,000 at any time and are not made with the proceeds
of any Loan; and

     (vi) transactions permitted by Sections 10.16 and 10.21 hereof.

     10.20 Existing and Additional Indebtedness. (a) Not in any way, directly or
indirectly,  create,  incur,  assume,  guaranty,  or suffer  to exist,  agree to
purchase or repurchase, pay or provide funds in respect of, or otherwise become,
be or remain liable,  contingently,  directly or indirectly, with respect to any
Indebtedness other than:

     (i)  Indebtedness of the Borrower or the Guarantor owing to the Agent under
this Agreement, the Notes or any other Loan Document;

     (ii) other Indebtedness of the Borrower or the Guarantor owing to Fleet;

     (iii) Indebtedness arising from the New Senior Subordinated Notes;

     (iv)  Indebtedness  existing on the date of Closing  that is  described  on
Schedule 10.20 hereof;

     (v) Indebtedness secured by Permitted Liens; and

     (vi)  Indebtedness  incurred  in  connection  with  Capitalized  Leases and
Equipment Operating Leases.

     (b) Not cancel  any  Account,  claim or other  debt,  except  for  adequate
consideration or in the ordinary course of business; provided, however, that the
foregoing  shall not  prohibit  the  compromise  or  discount of Accounts in the
ordinary course of business consistent with past practice.

     10.21 Other  Transactions.  (a) Not  knowingly  enter into any  transaction
which  (if  not  otherwise  prohibited  by  the  terms  of the  Loan  Documents)
materially and adversely affects its ability to


                                       58
<PAGE>

repay the Obligations or its other Indebtedness and other liabilities.

     (b) Not enter into any transaction  with any Affiliate,  or with any of its
shareholders or an Affiliate thereof, except on an arms'-length basis.

     (c) Not make any  material  change  (1) in its  capital  structure,  except
transactions  allowed by Section 10.16 hereof or (2) in any of its businesses or
their objectives, purposes and operations.

     10.22 Environmental  Liabilities.  Not violate any Requirement of Law, rule
or regulation regarding Hazardous Material; and, without limiting the foregoing,
dispose of (or permit any Person to dispose of) any  Hazardous  Material into or
onto,  or (except in accordance  with  applicable  law) from,  any real property
owned or operated by the Borrower or any of its Subsidiaries, nor allow any Lien
imposed  pursuant to any  Requirement of Law relating to Hazardous  Materials or
the  disposal  thereof to be imposed or to remain on such real  property,  which
violation or Lien would have a Material Adverse Effect.

     10.23  Warehousemen's  Waivers.  As soon as available,  but in any event no
later than sixty (60) days from the date hereof,  deliver to the Agent warehouse
lien waivers, in form and substance acceptable to the Agent, from each warehouse
where the Borrower or Guarantor  warehouses inventory at each location set forth
on Schedule 8.4 hereto (other than those locations set forth on Schedule 8.4(A),
which are excluded from the Borrowing Base),  subordinating  the  warehouseman's
lien to the lien of the Agent.  At any time after  sixty (60) days from the date
hereof,  neither  Borrower nor Guarantor  shall keep any Assets at any leased or
warehouse  location other than those  locations set forth on Schedule 8.4 hereto
(other than those locations set forth on Schedule  8.4(A),  which shall continue
to be  excluded  from  the  Borrowing  Base,  unless  an  acceptable  waiver  is
obtained),  without obtaining, prior to the locating of any Assets at any leased
or  warehouse  location,  a  Landlord's  Waiver  of  Lien  or  a  Warehousemen's
Notification  of  Security  Interest  and  Waiver  of Lien  Letter  (in form and
substance  satisfactory  to the  Agent,  as  applicable,  from the  landlord  or
warehouseman, as the case may be.

     10.24 Collateral.  Maintain the Collateral, as the same is constituted from
time to time,  free and clear of all Liens,  except  those in favor of the Agent
and the Permitted Liens; defend the Collateral against all claims and demands of
all Persons at any


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<PAGE>

time  claiming the same or any  interest  therein and pay all costs and expenses
incurred in connection with such defense.

     10.25 Intentionally Omitted.

     10.26  Trademarks.  Not grant any Person any  exclusive  license to use the
Trademarks.

     10.27 Limitation on Capital Expenditures.  Expend in the aggregate, for the
Borrower and all  Subsidiaries,  in excess of the amount set forth  opposite the
Fiscal Year ending the date set forth below, to be tested annually,  for Capital
Expenditures  including  payments  made on  account  of  Capitalized  Leases and
Equipment  Operating Lease Obligations.  For purposes of the foregoing,  Capital
Expenditures  shall include  equipment  acquired  under direct  purchases,  bank
financing,  Equipment  Operating  Leases  and  payments  made on  account of any
deferred  purchase price or on account of any  indebtedness  incurred to finance
any such purchase price:

                 Fiscal Year End            Capital Expenditures
                 ---------------            --------------------

                 6/30/99                          $ 8,000,000

                 6/30/00                          $ 2,000,000

; provided,  however,  if the Capital  Expenditure limit for Fiscal Year 1999 is
not fully  utilized  in such  Fiscal  Year,  the unused  balance  may be carried
forward to Fiscal Year 2000.

     10.28 Marketing Services  Agreement.  Not enter into any Marketing Services
Agreement.

     10.29 Maintain Operating Accounts.  Maintain all of their primary operating
accounts with the Agent.

     10.30 Regarding the New Senior  Subordinated Notes. (a) Without the express
written consent of the Agent: (i) the Borrower shall not directly or indirectly,
amend,  modify,  supplement,  waive  compliance with, or assent to noncompliance
with,  any term,  provision or condition of any of the  documents  evidencing or
governing  the New  Senior  Subordinated  Notes or (ii)  repurchase,  redeem  or
voluntarily prepay in whole or in part, any principal, interest or other amounts
payable in respect of the New Senior  subordinated Notes, or take any action, or
set aside any reserves,  in furtherance  of the foregoing.  For purposes of this
Section 10.30, the performance by the Borrower of its obligations in respect of,
and  payment of amounts  required  to be paid  under the  provisions  of the New
Senior Subordinated Notes and of Section 1.1,


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<PAGE>

Section 1.2,  Section 1.3,  Section 1.5,  Section 1.6 and Section  6.2(a) of the
Note Agreement,  as in effect on the closing date of the Note  Agreement,  shall
not  be  deemed  to be a  repurchase,  redemption  or  voluntary  prepayment  of
principal,  interest or other amounts in respect of the New Senior  Subordinated
Notes within the meaning of Section 10.30 of this Agreement.

     (b)  Simultaneously  with  delivery  of the same to any  holder  of the New
Senior  Subordinated  Notes, the Borrower shall furnish to the Agent any notice,
report,  financial  statement,  certificates,  projections  or  other  forms  of
information (financial or otherwise) required to be delivered by or on behalf of
the Borrower to such holder  pursuant to the  documents  evidencing or governing
such notes;  provided,  however, that the Borrower shall have no such obligation
to furnish  information  pursuant  to this  clause  (b) to the extent  that such
information (or  substantially  the same  information) has been furnished to the
Agent pursuant to Section 10.01, 10.02, or 10.06, as the case may be.

                        SECTION 11: CONDITIONS OF LENDING

     11.1 Initial Loan. The effectiveness of this Agreement and the availability
of Loans hereunder is subject to the receipt of an executed  counterpart of this
Agreement  by the  Borrower  and  the  Guarantor  and the  following  additional
documents prior to the Closing:

          (1) the Notes;

          (2) the Mortgage;

          (3) the other Loan Documents;

          (4)  evidence  of  insurance  naming the Agent as loss  payee  under a
     lender's  loss  payable  endorsement  and  evidence  of payment of the most
     recently due premium;

          (5) an opinion of  counsel  for  Borrower  and  Guarantor  in form and
     substance satisfactory to the Agent;

          (6) Good Standing  Certificates of the Borrower and Guarantor from the
     Secretary of States of New Jersey, New York and California, respectively;

          (7)  Secretary's  Certificates  of  the  Borrower  and  the  Guarantor
     attaching incumbency certificate, Certificate of Incorporation, by-laws and
     resolutions of the Board of Directors authorizing the transaction;


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<PAGE>

          (8) Borrowing Base Certificate; and

          (9) Such other documents as may be reasonably requested by the Agent.

     11.2  Conditions to Each Loan. The obligation of the Agent to make any Loan
is subject to the  satisfaction  of the  following  conditions  precedent on the
relevant borrowing date:

     (a) Representations and Warranties. The representations and warranties made
by the  Borrower  and  the  Guarantor  herein  or  which  are  contained  in any
certificate,  document or financial or other statement furnished by the Borrower
at any time under or in  connection  herewith  shall be correct in all  material
respects on and as of such Borrowing Date as if made on and as of such date.

     (b) No Default or Event of  Default.  No Default or Event of Default  shall
have occurred and be continuing on such Borrowing Date or after giving effect to
the Loan to be made on such  borrowing  date.  Each  borrowing  by the  Borrower
hereunder shall constitute a  representation  and warranty by the Borrower as of
the date of such  borrowing  that the  conditions  in clause (a) and (b) of this
Section 11.2 have been satisfied.

     (c) Borrowing Notice. The Agent shall have received a Borrowing Notice.

     (d) No Federal Tax or ERISA  Liens.  No notice of or any other  document or
instrument  creating any federal tax Lien or Lien under  Section 412 of the Code
or Section 4068 of ERISA shall have been issued,  recorded or filed with respect
to the assets of the Borrower or any of its  Subsidiaries and no Bank shall have
informed the Agent or the Borrower that such Bank has processed any such Lien or
has notice thereof.

                   SECTION 12: EVENTS OF DEFAULT AND REMEDIES

     12.1 Events of Default.  Each of the following shall constitute an Event of
Default under this Agreement.

     (a)  Non-Payment  of  Principal or  Interest.  Non-payment  when due of any
principal of or interest due on the Notes or  non-payment  of any of  Borrower's
Obligations when due and payable or declared due and payable; or

     (b)  Bankruptcy  or  Insolvency.  The  Borrower  or the  Guarantor  becomes
insolvent or generally  fails to pay, or admits in writing its inability to pay,
debts as they become due; or the


                                       62
<PAGE>

Borrower  or the  Guarantor  applies  for,  consents  to, or  acquiesces  in the
appointment of, a trustee,  receiver,  guardian,  conservator or other custodian
for the  Borrower  or the  Guarantor  or any of the  Borrower's  or  Guarantor's
property,  or the Borrower or the Guarantor  makes a general  assignment for the
benefit  of  creditors;  or, in the  absence  of such  application,  consent  or
acquiescence, a trustee, receiver,  guardian,  conservator or other custodian is
appointed  for the Borrower or any  Guarantor or for a  substantial  part of the
Borrower's or such Guarantor's property and is not discharged within 30 days; or
any  bankruptcy,  reorganization,  debt  arrangement or other case or proceeding
under any  bankruptcy  or  insolvency  law, or any  liquidation  proceeding,  is
commenced  in  respect of the  Borrower  or any  Guarantor,  and if such case or
proceeding is not commenced by the Borrower or such  Guarantor,  it is consented
to or acquiesced in by the Borrower or such Guarantor or remains undismissed for
60 days; or

     (c) Non-Compliance  with Certain  Covenants.  The Borrower or the Guarantor
shall fail in the  observance  or  performance  of any covenant or agreement set
forth in Sections 10.4, 10.14, 10.15,  10.16,  10.17,  10.19,  10.20,  10.21(c),
10.22, 10.24, 10.26, 10.27, 10.28 or 10.30(a); or

     (d)  Non-Compliance  with Other Terms of this Agreement or any of the other
Loan  Documents.  Failure by the Borrower or the  Guarantor to comply with or to
perform any  provision of this  Agreement or the other Loan  Documents  (and not
constituting  an  Event of  Default  under  any of the  preceding  or  following
provisions  of this Section 12 or under any specific  provision set forth in the
other Loan Documents) and continuance of such failure for thirty (30) days after
notice thereof to the Borrower from the Agent; or

     (e) Warranties.  Any representation or warranty made by the Borrower and/or
the  Guarantor  herein is breached  or is false or  misleading  in any  material
respect  or  omits  to  state  a  material  fact  when  made,  or any  schedule,
certificate,  financial statement, report, notice, or other writing furnished by
the Borrower  and/or the  Guarantor to the Agent is false or  misleading  in any
material  respect or omits to state a material  fact on the date as of which the
facts therein set forth are stated or certified; or

     (f) Defaults under other Agreements. The Borrower or the Guarantor defaults
under  (i) any  Contingent  Obligation,  loan,  extension  of  credit,  security
agreement,  mortgage or other  agreement with respect to Indebtedness to a third
party (including,  but not limited to, the New Senior  Subordinated Notes) other
than the Notes, or (ii) any Contingent  Obligation,  loan,  extension of credit,
security agreement, mortgage or other agreement with


                                       63
<PAGE>

respect to  Indebtedness to any Bank,  other than the Loan Documents,  including
but not limited to, the Fleet Mortgage Loan, and such default is declared and is
not cured within the time, if any,  specified therefor in any agreement covering
same; or

     (g)  Collateral.  If any portion of the  Collateral  or any other assets of
Borrower or the Guarantor are attached,  seized, subjected to a writ or distress
or warrant,  or are levied upon or come within the  possession  of any receiver,
trustee,  custodian or assignee for the benefit of creditors and the same is not
terminated or dismissed  within thirty (30) days or if a notice of lien, levy or
assessment of record is filed against the Collateral; or

     (h) Guaranty. If the Guarantor  terminates,  purports to terminate or takes
any steps which have the effect of decreasing its liability hereunder; or

     (i) Ownership.  If (i) the Guarantor ceases to be a wholly owned subsidiary
of the  Borrower,  or (ii) either Mark  Cocchiola or Paul  Lauriero is no longer
actively  involved  in the  day to  day  management  of  the  Borrower  and  the
Guarantor; or

     (j) Judgements.  One or more  judgements,  decrees,  arbitration  awards or
rulings shall be entered against the Borrower and/or the Guarantor  involving in
the aggregate a liability (not paid or in the opinion of the applicable insurer,
fully  covered  by  insurance)  of  $100,000  or more and all  such  judgements,
decrees,  awards and  rulings  shall not have been  vacated,  paid,  discharged,
stayed or bonded pending appeal within sixty(60) days from the entry thereof; or

     (k) ERISA.  (i) if any Person shall engage in any "prohibited  transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)  involving  any
Plan, (ii) a Reportable Event shall occur with respect to, or proceedings  shall
commence  to have a trustee  appointed,  or a  trustee  shall be  appointed,  to
administer or to terminate,  any  Multiemployer  Plan, which Reportable Event or
institution  of  proceedings  or appointment of a trustee is likely to result in
the  termination of such  Multiemployer  Plan for purposes of Title IV of ERISA,
and, in the case of a Reportable Event, the continuance of such Reportable Event
unremedied  for ten days  after  notice of such  Reportable  Event  pursuant  to
Section  4043(a),  (c) or  (d) of  ERISA  is  given  and,  in  the  case  of the
institution of  proceedings,  the  continuance of such  proceedings for ten days
after  commencement  thereof,  (iii) the Borrower or an ERISA Affiliate incurs a
partial or complete withdrawal from a Multiemployer Plan or (iv) any other event
or


                                       64
<PAGE>

condition shall occur or exist,  with respect to a Plan or  Multiemployer  Plan;
and in each case in clauses (i) through  (iv)  above,  such event or  condition,
together  with all other such events or  conditions,  if any,  could subject the
Borrower or any of its Subsidiaries to any tax, penalty or other  liabilities in
the  aggregate  material in relation to the  business,  operations,  property or
financial or other condition of the Borrower; or

     (l) Farm Products.  If the Borrower and/or Guarantor shall be notified of a
security  interest  created  by the  seller  of any  farm  products  in any farm
products sold to Borrower or Guarantor or a financing  statement shall have been
filed in respect of any of the farm  products  sold to Borrower or Guarantor and
such security interest has not been terminated or waived within thirty (30) days
of Borrower's or Guarantor's receipt of notification thereof; or

     (m) Registration. Failure of the Borrower and/or Guarantor to register with
the  Secretary of State of each State in which it purchases  farm  products that
has an  established  "central  filing system" (as such quoted term is defined in
U.S.C.A. 7 ss. 1631(c)) on or before January 15, 1995.

     12.2  Effect of Event of  Default.  If any Event of  Default  described  in
Section  12.1(b) shall occur,  the  Commitment (if not  theretofore  terminated)
shall automatically and immediately terminate, and the Notes and the Obligations
and all other amounts  payable under the Loan Documents and the Letter of Credit
shall  become  automatically  and  immediately  due  and  payable,  all  without
presentment,  demand,  protest or notice of any kind. Upon the occurrence of any
Event of Default  and  during  the  continuance  thereof  (other  than the event
described in Section 12.1(b)), the Agent may (and shall, at the direction of the
Required  Banks) declare the Commitment  (if not  theretofore  terminated) to be
terminated and may also declare the Notes,  the  Obligations,  all other amounts
payable under the Loan Documents and the Letter of Credit to be due and payable,
whereupon  the  Commitment  shall  immediately  terminate  and the Notes and the
Obligations shall become immediately due and payable,  all without  presentment,
demand, protest or other notice of any kind. The Agent shall promptly advise the
Borrower  of any such  declaration,  but  failure  to do so shall not impair the
effect of such declaration.  Except as expressly  provided above in this Section
presentment,  demand,  protest  and all  other  notices  of any kind are  hereby
expressly  waived by the Borrower.  Upon the  occurrence of any Event of Default
and during the continuance thereof, the Agent, may, at its option (and shall, at
the  direction  of the  Required  Banks),  exercise any of its rights under this
Agreement, the other Loan


                                       65
<PAGE>

Documents  or any rights  and  remedies  of a secured  party  under the  Uniform
Commercial Code.

     12.3  Remedies.  (a)  Without  limiting  the  generality  of  the  remedies
available  to  the  Agent,  without  demand  of  performance  or  other  demand,
presentment,  protest,  advertisement  or notice of any kind  (except any notice
required  by law  referred  to below) to or upon the  Borrower  (all and each of
which demands,  presentments,  protests,  advertisements  and notices are hereby
waived), may in such circumstances forthwith collect,  receive,  appropriate and
realize upon the  Collateral,  or any part thereof,  and/or may forthwith  sell,
lease,  assign, give option or options to purchase,  or otherwise dispose of and
deliver  the  Collateral  or any  part  thereof  (or  contract  to do any of the
foregoing)  in one or more  parcels at public or private  sale or sales,  at any
exchange, broker's board or office of the Agent or elsewhere upon such terms and
conditions as it may deem  advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without  assumption of any credit risk.
The Agent shall have the right upon any such  public sale or sales,  and, to the
extent  permitted by law,  upon any such private sale or sales,  to purchase the
whole or any part of the Collateral so sold. The Borrower further agrees, at the
Agent's  request,  to assemble the Collateral and make it available to the Agent
at places which the Agent shall  reasonably  select,  whether at the  Borrower's
premises  or  elsewhere.  The Agent  shall  apply the net  proceeds  of any such
collection,  recovery,  receipt,  appropriation,   realization  or  sale,  after
deducting all  reasonable  costs and expenses of every kind incurred  therein or
incidental  to the care or  safekeeping  of any of the  Collateral or in any way
relating  to the  Collateral  or the rights of the Agent  hereunder,  including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the  Obligations,  in such  order as the Agent may elect;
and only after such  application and after the payment by the Agent of any other
amount  required by any provision of law,  including,  without  limitation,  any
provision  of the  Uniform  Commercial  Code,  need the  Agent  account  for the
surplus, if any, to the Borrower. To the extent permitted by applicable law, the
Borrower waives all claims, damages and demands it may acquire against the Agent
arising out of the exercise by the Agent of any of its rights hereunder.  If any
notice of a proposed sale or other  disposition of Collateral  shall be required
by law, such notice shall be deemed  reasonable  and proper if given at least 10
days before such sale or other disposition. The Borrower shall remain liable for
any  deficiency  if the  proceeds  of  any  sale  or  other  disposition  of the
Collateral are  insufficient  to pay the Obligations and the reasonable fees and
disbursements of any attorneys employed by the Agent to collect such deficiency.


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     (b) In addition to any rights now or hereafter granted under applicable law
and not by way of  limitation  of any such rights the Borrower and the Guarantor
hereby  grant to each Bank,  a lien,  security  interest  and right of setoff as
security for all Obligations whether now existing or hereafter arising, upon and
against all deposits,  credits, collateral and property, now or hereafter in the
possession,  custody,  safekeeping or control of any Bank,  including any entity
under the control of Fleet Financial Group,  Inc., or in transit to any of them.
At any time, without demand or notice to the Borrower or the Guarantor (but with
notice  to the  Agent),  any Bank may set off the same or any part  thereof  and
apply the same to any  Obligation of the Borrower and the Guarantor  even though
unmatured and  regardless of the adequacy of any other  collateral  securing the
Loan.  ANY AND ALL RIGHTS TO REQUIRE ANY BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER  COLLATERAL  WHICH SECURES THE  OBLIGATIONS,  PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH  DEPOSITS,  CREDITS OR OTHER
PROPERTY OF THE BORROWER OR THE GUARANTOR ARE HEREBY KNOWINGLY,  VOLUNTARILY AND
IRREVOCABLY WAIVED.

     12.4 Limitation on Duties Regarding Preservation of Collateral. The Agent's
sole duty with respect to the custody,  safekeeping and physical preservation of
the  Collateral  in  its  possession,  under  the  Uniform  Commercial  Code  or
otherwise,  shall be to deal with it in the same  manner as the Agent deals with
similar  property  for its own account.  Neither the Agent,  any Bank nor any of
their  directors,  officers,  employees or agents shall be liable for failure to
demand,  collect or realize  upon all or any part of the  Collateral  or for any
delay in doing so or shall be under any obligation to sell or otherwise  dispose
of any Collateral upon the request of the Borrower or otherwise.

     12.5 No Waiver;  Cumulative Remedies.  The Agent and the Banks shall not by
any act (except by a written instrument pursuant to Section 15.1 hereof), delay,
indulgence,  omission or  otherwise be deemed to have waived any right or remedy
hereunder or to have  acquiesced in any Event of Default or in any breach of any
of the terms and  conditions  hereof.  No failure to exercise,  nor any delay in
exercising, on the part of the Agent, of any right, power or privilege hereunder
shall operate as a waiver thereof.  No single or partial  exercise of any right,
power or  privilege  hereunder  shall  preclude  any other or  further  exercise
thereof or the exercise of any other right, power or privilege.  A waiver by the
Agent  of any  right  or  remedy  hereunder  on any one  occasion  shall  not be
construed as a bar to any right or remedy which the Agent would  otherwise  have
on any future occasion.  The rights and remedies herein provided are cumulative,
may be exercised singly or


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<PAGE>

concurrently and are not exclusive of any rights or remedies provided by law.

                SECTION 13: BORROWER'S AND GUARANTOR'S INDEMNITY

     13.1  Indemnification  by Borrower and Guarantor.  (a) The Borrower and the
Guarantor,  jointly  and  severally,  agree to, and hereby do,  indemnify,  hold
harmless,  protect  and  defend  the  Agent  and  each  Bank  and  each of their
directors,   officers,   employees,   Affiliates  (each  an  "Indemnitee"   and,
collectively,  the  "Indemnitees")  from  and  against  any and all  liabilities
(including,  without limitation,  all Environmental  Liabilities),  obligations,
losses, damages, claims, suits, actions,  judgments,  demands, penalties, fines,
attorneys'  and   consultants'   fees,   investigation   and  laboratory   fees,
settlements,  court  costs,  damages,  costs and  expenses of  whatever  kind or
nature, known or unknown, contingent or otherwise, arising out of, or in any way
related to, any investigative, administrative or judicial proceeding (whether or
not any Indemnitee shall be designated a party thereto) which may be imposed on,
incurred by or asserted  against any  Indemnitee  (whether  direct,  indirect or
consequential and whether based on any including, without limitation, securities
and commercial laws and  regulations,  Environmental  Laws,  under common law or
equity, or on contract or otherwise) in any manner relating to or arising out of
(i) this  Agreement,  any other Loan Document,  or any act, event or transaction
related or attendant  thereto,  including without  limitation,  the negotiation,
preparation, execution, delivery, enforcement, performance and administration of
this Agreement,  any other Loan Document and any amendment,  supplement or other
modification and/or restatement hereof or thereof, (ii) the making or management
of the Loans or the use or intended use of the proceeds of the Loans,  (iii) any
present or future acquisition or proposed  acquisition by the Borrower or by the
Guarantor of all or any portion of the stock or the assets of any Person whether
or not the  Agent or any Bank is a party  thereto,  (iv)  any  violation  of any
Environmental  Law by the Borrower or the  Guarantor or any of their  respective
agents,  tenants,   subtenants  or  invitees,  and  (v)  any  violation  of  the
representations  and  warranties set forth in Section 9.5 hereof or the covenant
set  forth  in  Section  10.23  or  Section  10.4  hereof   (collectively,   the
"Indemnified Matters").

     (b) To the  extent  that  (i)  the  undertaking  to  indemnify,  pay,  hold
harmless,  protect and defend set forth in this Section 13 may be  unenforceable
because it is  violative of any  Requirement  of Law,  Borrower  and  Guarantor,
jointly and severally,  shall  contribute to the payment and satisfaction of all
Indemnified  Matters  incurred by the  Indemnitees the maximum portion which the
Borrower and/or the Guarantor are permitted to pay and satisfy


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<PAGE>

under such applicable  Requirement of Law, and (ii) the Borrower,  the Guarantor
or any of their respective agents,  tenants,  subtenants or invitees is strictly
liable  under any  Environmental  Law,  the  Borrower's  and/or the  Guarantor's
obligation to each  Indemnitee  under this Section 13 shall be without regard to
fault on the part of the  Borrower,  the  Guarantor  or any of their  respective
agents,  tenants,  subtenants or invitees with respect to such Environmental Law
which results in liability  to, or for which a claim has been asserted  against,
any Indemnitee.  Neither the Borrower nor the Guarantor shall have an obligation
to an Indemnitee  under this Section 13 with respect to (A) taxes on or measured
by any  Indemnitee's  net income or (B)  Indemnified  Matters to the extent such
Indemnified  Matters  were caused by or resulted  from the gross  negligence  or
willful misconduct of such Indemnitee.

                          SECTION 14: AGENCY PROVISIONS

     14.1 Authorization and Action.  Each Bank hereby  irrevocably  appoints and
authorizes  the Agent to take such action as agent on its behalf and to exercise
such powers under this  Agreement and the other Loan  Documents as are delegated
to the Agent by the terms hereof,  together  with such powers as are  reasonably
incidental   thereto.   The  duties  of  the  Agent  shall  be  mechanical   and
administrative  in nature and the Agent shall not by reason of this Agreement be
a  trustee  or  fiduciary  for any  Bank.  The  Agent  shall  have no  duties or
responsibilities except those expressly set forth in the Loan Documents,  and no
implied  covenants,   functions,   responsibilities,   duties,   obligations  or
liabilities shall be imposed on the Agent under this Agreement or the other Loan
Documents. As to any matters not expressly provided for by this Agreement or the
other Loan Documents (including,  without limitation,  enforcement or collection
of the Notes),  the Agent shall not be required to exercise  any  discretion  or
take any action,  but shall be  required  to act or to refrain  from acting (and
shall be fully  protected  in so  acting or  refraining  from  acting)  upon the
instructions of the Required Banks, and such instructions  shall be binding upon
all Banks and all holders of Notes; provided,  however, that the Agent shall not
be  required to take any action  which is not in  writing,  exposes the Agent to
personal  liability  or which is  contrary to this  Agreement  or the other Loan
Documents or applicable law.

     14.2  Liability  of Agent.  Neither  the  Agent  nor any of its  directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in  connection  with any Loan  Documents  in the
absence  of its or their own gross  negligence  or  wilful  misconduct.  Without
limitation  of the  generality  of the  foregoing,  the  Agent (1) may treat the
payees


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<PAGE>

of any Notes as the holder  thereof until the Agent  receives  written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to the Agent; (2) may consult with legal counsel (including counsel for any Bank
or the Borrower),  independent  public accountants and other experts selected by
it and shall not be liable for any  action  taken or omitted to be taken in good
faith by it in  accordance  with the  advice  of such  counsel,  accountants  or
experts;  (3) makes no warranty or  representation  to any Bank and shall not be
responsible to any Bank for any statements,  warranties or representations  made
in or in  connection  with any Loan  Document;  (4)  shall  not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or  conditions of any Loan Document on the part of the Borrower or the
Guarantor or any other Person or to inspect the  property  (including  the books
and records) of the Borrower;  (5) shall not be  responsible to any Bank for the
due execution,  legality,  validity,  enforceability,  genuineness,  perfection,
sufficiency  or value of any of the Loan  Documents or any other  instrument  or
document  furnished  pursuant  thereto;  (6) shall not have any duty to  provide
notice  of any  action or the  happening  of any  event,  to the  Borrower,  the
Guarantor or any Bank,  except as specifically  set forth herein;  and (7) shall
incur no liability  under or in respect of any Loan  Document by acting upon any
notice,  consent,  certificate  or other  instrument or writing (which may be by
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.

     14.3 Rights of Agent as a Bank. With respect to its  Commitment,  the Loans
made by it and the Note  issued to it, the Agent  shall have the same rights and
powers  under the Loan  Documents as any other Bank and may exercise the same as
though it were not the  Agent;  and the term  "Bank" or  "Banks"  shall,  unless
otherwise expressly indicated, include the Agent in its individual capacity. The
Agent and its Affiliates may accept deposits from, lend money to, act as trustee
under  indentures  of, and generally  engage in any kind of business  with,  the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any  Subsidiary,  all as if the Agent were not the
Agent and without any duty to account therefor to the Banks.

     14.4 Independent  Credit  Decisions.  Each Bank  acknowledges  that it has,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.  Each Bank also acknowledges
that it will,  independently  and without  reliance  upon the Agent or any other
Bank and based on such documents and information as it shall


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<PAGE>

deem  appropriate  at the time,  continue  to make its own credit  decisions  in
taking or not  taking  action  under the Loan  Documents.  Except  for  notices,
reports and other documents and information  expressly  required to be furnished
to the Banks by the Agent  under  the  terms of any of the Loan  Documents,  the
Agent shall have no duty or  responsibility  to provide any Bank with any credit
or other information concerning the affairs,  financial condition or business of
the Borrower or any Subsidiary (or any of their  Affiliates) which may come into
the possession of the Agent or any of its Affiliates.

     14.5 Indemnification. The Banks agree to indemnify the Agent (to the extent
not reimbursed by the Borrower),  pro-rata,  according to the respective amounts
of their  Commitments,  from and against any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by, or asserted  against the Agent in any way  relating to or arising out of any
of the Loan  Documents  or any action taken or omitted by the Agent under any of
the Loan Documents, provided that no Bank shall be liable for any portion of any
of  the  foregoing  resulting  from  the  Agent's  gross  negligence  or  wilful
misconduct.  Without limitation of the foregoing,  each Bank agrees to reimburse
the Agent (to the extent not  reimbursed by the  Borrower)  promptly upon demand
for its pro-rata share of any out-of-pocket  expenses  (including  counsel fees)
incurred by the Agent in connection  with the  preparation,  administration,  or
enforcement of, or legal advice in respect of rights or responsibilities  under,
any of the Loan Documents.

     14.6 Successor  Agent.  The Agent may resign at any time by giving at least
sixty (60) days prior written  notice  thereof to the Banks and the Borrower and
may be removed at any time with or without cause by the Required Banks. Upon any
such resignation or removal,  the Required Banks shall have the right to appoint
a successor  Agent.  If no  successor  Agent shall have been so appointed by the
Required  Banks,  and shall have accepted such  appointment,  within thirty (30)
days after the retiring  Agent's giving of notice of resignation or the Required
Banks' removal of the retiring Agent,  then the retiring Agent may, on behalf of
the Banks, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or of any State thereof. Upon the
acceptance of any  appointment  as Agent  hereunder by a successor  Agent,  such
successor  Agent  shall  thereupon  succeed  to and become  vested  with all the
rights,  powers,  privileges and duties of the retiring Agent,  and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation or removal


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<PAGE>

hereunder as Agent, the provisions of this Section 14 shall inure to its benefit
as to any  actions  taken or omitted to be taken by it while it was Agent  under
any of the Loan Documents.

     14.7  Sharing  of  Payments,  Etc.  If any Bank shall  obtain  any  payment
(whether voluntary,  involuntary,  through the exercise of any right of set-off,
or  otherwise)  on account  of the Notes held by all the Banks,  such Bank shall
purchase from the other Banks such  participations  in the Notes held by them as
shall be necessary  to cause such  purchasing  Bank to share the excess  payment
pro-rata  with each of them,  provided,  however,  that if all or any portion of
such excess payment is thereafter  recovered  from such  purchasing  Bank,  such
purchase  from each Bank shall be  rescinded  and each Bank  shall  repay to the
purchasing Bank the purchase price to the extent of such recovery  together with
an amount equal to such Bank's  pro-rata  share  (according to the proportion of
(i) the amount of such Bank's  required  repayment  to (ii) the total  amount so
recovered  from the  purchasing  Bank) of any  interest or other  amount paid or
payable by the purchasing Bank in respect of the total amount so recovered.  The
Borrower  agrees that any Bank so purchasing a  participation  from another Bank
pursuant  to this  Section  14.7 may, to the fullest  extent  permitted  by law,
exercise all its rights of payment (including the right of set-off) with respect
to such  participation  as fully as if such Bank were the direct creditor of the
Borrower in the amount of such participation.

     14.8 Pro-Rata  Treatment of Loans,  Etc. (a) Except to the extent otherwise
provided,  each  borrowing  under  Section 2.02 shall be made from the Banks and
each reduction or termination of the amount of the Commitment under Section 2.06
shall be applied to the respective  Commitments of each Bank, pro-rata according
to the amounts of their respective unused  Commitments;  and each prepayment and
payment of  principal of or interest on Loans shall be made to the Agent for the
account of the Banks holding Loans  pro-rata in accordance  with the  respective
unpaid principal amounts of such Loans held be such Banks.

     (b)  Following the  occurrence of an Event of Default,  any payments on the
Loans or  interest  thereon  received  by the  Agent  from the  Borrower  or the
Guarantors or from its  realization on the Collateral  shall (subject to Section
14.5) be  allocated  among the Banks  holding  the Loans,  the Master  Agreement
Obligations  and the  Letter  of  Credit  in  accordance  with  the  outstanding
principal  balance,  or amounts  due  under,  the  Loans,  the Master  Agreement
Obligations  and the  Letter of  Credit  held by the  Banks  respectively.  Upon
payment in full of the Loans, the Master Agreement Obligations and the Letter of
Credit,  any recovery  received by the Agent from the Borrower or the Guarantors
or from


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<PAGE>

its  realization on the Collateral  shall be applied to the payment of the Fleet
Mortgage Loan.

     14.9  Agency  Fee.  In  consideration  of service  rendered  hereunder  and
pursuant to the other Loan  Document  in its  capacity  as Agent  hereunder  and
thereunder,  the Borrower  shall pay to the Agent an annual  agency fee equal to
$15,000,  with the first such payment  being due and payable on the date hereof,
and subsequent  payments due and payable on the anniversary  date of the date of
Closing.

                               SECTION 15: GENERAL

     15.1 Waiver;  Amendments. No delay on the part of the Agent in the exercise
of any right,  power or remedy shall operate as a waiver thereof,  nor shall any
single or partial  exercise by the Agent of any right,  power or remedy preclude
other or further exercise thereof,  or the exercise of any other right, power or
remedy. No amendment, modification or waiver of, or consent with respect to, any
provision of the Loan Documents shall in any event be effective  unless the same
shall be in writing and signed and  delivered by the Required  Banks,  the Agent
and the  Borrower  (in the case of a document to which the  Borrower is a party)
and then any such amendment,  modification, waiver or consent shall be effective
only in the  specific  instance  and for the  specific  purpose for which given;
provided,  however, that no amendment,  modification,  waiver or consent, shall,
unless in writing and signed by all Banks,  do any of the following:  (i) change
the Commitments of the Banks;  (ii) reduce the principal of, or interest on, the
Loan or any fees  hereunder;  (iii)  extend  any date  fixed for any  payment of
principal  of, or interest on, the Loan;  (iv) amend the  definition of the term
"Required   Banks"  or  "Borrowing   Base";   or  (v)  release  any   Collateral
(collectively,  the "Material  Changes").  No Material  Change shall,  unless in
writing and signed by the Agent in addition to the Banks  required above to take
such  action,  affect  the  rights or duties of the Agent  under any of the Loan
Documents.  Notwithstanding the foregoing or any other term or provision of this
Agreement, in the event that the Agent provides the Banks with written notice of
any event,  circumstance  or proposed  amendment,  modification or waiver of any
provision of any Loan  Documents  requiring  the consent of the  Required  Banks
hereunder,  together with a written statement of Fleet, as a Bank, of the action
proposed to be taken with respect to such consent, then if each other Bank fails
to  respond in writing  to any such  notice by no later than  fifteen  (15) days
after  receipt  thereof,  then  each  such  other  Bank  shall be deemed to have
consented  to the  action  proposed  to be taken by  Fleet,  and the  Agent  may
unconditionally  rely on any  such  deemed  consent  in  taking  any  action  in
furtherance thereof.


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<PAGE>

     15.2 WAIVER OF TRIAL BY JURY. THE BORROWER,  GUARANTOR, AGENT AND THE BANKS
MUTUALLY HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON,  ARISING OUT OF, UNDER OR IN
CONNECTION  WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS  CONTEMPLATED  TO BE
EXECUTED IN  CONNECTION  HEREWITH OR ANY COURSE OF CONDUCT,  COURSE OF DEALINGS,
STATEMENTS  (WHETHER  VERBAL OR  WRITTEN)  OR ACTIONS OF ANY PARTY.  THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR THE AGENT TO ACT AS AGENT HEREUNDER AND TO
ACCEPT THIS  AGREEMENT  AND FOR THE BANKS TO ACCEPT THIS  AGREEMENT AND MAKE THE
LOANS.

     15.3 Notices.  Except as otherwise  expressly  provided herein, all notices
hereunder  shall be in  writing  and shall be  delivered  by  telecopier,  hand,
overnight  delivery  or by mail.  Notices  given by mail shall be deemed to have
been given three (3) days after the date sent if sent by registered or certified
mail, postage prepaid, and:

         (i)  if to the Borrower and/or the Guarantor, to:

                 Suprema Specialties, Inc.
                 510 East 35th Street
                 Paterson, New Jersey 07543
                 Attn:  President

         (ii) if to the Agent or Fleet, to:

                 Fleet Bank, N.A.
                 208 Harrison Road
                 Glen Rock, New Jersey 07452
                 Attn: Edward J. Waterfield, Senior
                       Vice President

         (iii) if to Sovereign, to:

                 Sovereign Bank
                 901 West Park Avenue
                 Ocean, New Jersey 07712
                 Attn: Edward C. Gurskis, Senior Vice President

or in the case of any party,  such other  address as such party may,  by written
notice,  received by the other party to this  Agreement,  have designated as its
address for notices.  Notices  given by (i)  telecopier  shall be deemed to have
been given when sent,  (ii) hand shall be deemed to have been given the same day
they have been sent and (iii)  overnight  delivery  shall be deemed to have been
given the day after they have been sent, in each case if properly addressed


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<PAGE>

to the party to whom sent,  at its  address,  as  aforesaid.  The Agent shall be
entitled  to  reasonably  rely upon any  telephonic  notices  purportedly  given
pursuant to the terms of this Agreement and the Borrower and the Guarantor shall
hold the Agent  harmless  from any loss,  cost or expense  ensuing from any such
reliance.

     15.4 Appointment as Attorney-in-Fact.

     (a) Powers.  In  addition to the power of attorney  granted to the Agent in
Section 10.12 hereof,  the Borrower and the  Guarantor,  jointly and  severally,
hereby  irrevocably  constitute  and  appoint  the  Agent  with  full  power  of
substitution,  as its true and  lawful  attorney-in-fact  with full  irrevocable
power and authority in the place and stead of the Borrower  and/or the Guarantor
and in the name of the Borrower  and/or the  Guarantor or in its own name,  from
time to time in the Agent's  discretion,  for the  purpose of  carrying  out the
terms of this  Agreement,  upon the occurrence and during the continuance of any
Event of Default to take any and all  appropriate  action and to execute any and
all documents and instruments  which may be necessary or desirable to accomplish
the purposes of this Agreement and the security  interests  granted herein,  and
without limiting the generality of the foregoing,  the Borrower hereby gives the
Agent the power and right (but not the  obligation),  on behalf of the Borrower,
without notice to or assent by the Borrower, to do the following:

     (i) in the case of any Account or any other  Collateral  in the name of the
Borrower or its own name, or otherwise,  to open mail addressed to the Borrower,
to take  possession  of and  endorse and  collect  any  checks,  drafts,  notes,
acceptances  or other  instruments  for the  payment  of  moneys  due  under any
Account, Instrument, General Intangible or contract right or with respect to any
other Collateral and to file any claim or to take any other action or proceeding
in any court of law or equity or otherwise  deemed  appropriate by the Agent for
the purpose of  collecting  any and all such moneys due under any such  Account,
Instrument,  General  Intangible or contract  right or with respect to any other
Collateral whenever payable;

     (ii) to pay or discharge  taxes and liens levied or placed on or threatened
against the Collateral, to effect any repairs or any insurance called for by the
terms of this Agreement and to pay all or any part of the premiums  therefor and
the costs thereof; and

     (iii)  (A) to direct  any party  liable  for any  payment  under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Agent or as the


                                       75
<PAGE>

Agent shall direct;  (B) to ask or demand for,  collect,  receive payment of and
receipt for, any and all moneys,  claims and other  amounts due or to become due
at any time in  respect  of or arising  out of any  Collateral;  (C) to sign and
endorse any  invoices,  freight or express  bills,  bills of lading,  storage or
warehouse receipts, drafts against debtors, assignments,  verifications, notices
and other documents in connection  with any of the  Collateral;  (D) to commence
and prosecute any suits, actions or proceedings at law or in equity in any court
of  competent  jurisdiction  to collect  the  Collateral  or any  thereof and to
enforce  any other right in respect of any  Collateral;  (E) to defend any suit,
action or proceeding  brought  against the Borrower  and/or the  Guarantor  with
respect to any Collateral;  (F) to settle, compromise or adjust any suit, action
or proceeding described in clause (E) above and in connection therewith, to give
such  discharges  or  releases  as the  Agent  may  deem  appropriate;  and  (G)
generally,  to sell, transfer,  pledge and make any agreement with respect to or
otherwise  deal with any of the Collateral as fully and completely as though the
Agent was the absolute owner thereof for all purposes,  and to do at the Agent's
option and the Borrower's and/or the Guarantor's  expense,  at any time, or from
time to time,  all acts and things  which the Agent deems  necessary to protect,
preserve or realize upon the Collateral  and the Liens granted  hereunder and to
effect  the  intent  of this  Agreement,  all as fully  and  effectively  as the
Borrower might do.

The Borrower and the Guarantor,  jointly and  severally,  hereby ratify all that
said attorney shall lawfully do or cause to be done by virtue hereof. This power
of attorney is a power coupled with an interest and shall be irrevocable.

     (b) Other Powers.  The Borrower and the  Guarantor,  jointly and severally,
also  authorize  the Agent,  at any time and from time to time,  to execute,  in
connection with the sale provided for in Section 12.3 hereof,  any endorsements,
assignments  or other  instruments of conveyance or transfer with respect to the
Collateral.

     (c) No Duty on Agent's Part.  The powers  conferred on the Agent  hereunder
are solely to protect its interests in the  Collateral  and shall not impose any
duty upon the Agent to exercise  any such  powers.  Neither the Agent nor any of
its  officers,  directors,  employees  or  agents  shall be  responsible  to the
Borrower or the  Guarantor for any act or failure to act  hereunder,  except for
their own gross negligence or willful misconduct.

     15.5 Costs,  Expenses and Taxes.  The Borrower  agrees to pay on demand all
out-of-pocket costs and expenses of the Agent and the


                                       76
<PAGE>

Banks (including the reasonable fees and out-of-pocket expenses of legal counsel
for the Agent and the Banks) in connection with the  preparation,  execution and
delivery  of the  Loan  Documents,  and all  out-of-pocket  costs  and  expenses
(including  reasonable attorneys' fees and legal expenses) incurred by the Agent
in  connection  with the  administration  of this  Agreement  and the other Loan
Documents and the enforcement of the Loan Documents or any Collateral for any of
the foregoing.  In addition,  the Borrower  agrees to pay, and to save the Agent
harmless from all  liability  for, any stamp or other taxes which may be payable
in connection with the execution or delivery of this Agreement, or the execution
and delivery of the Loan Documents. All obligations provided for in this Section
15.5 shall survive any termination of this Agreement.

     15.6 Captions; Section References.  Section captions used in this Agreement
are  for  convenience  only,  and  shall  not be  deemed  to be a part  of  this
Agreement. Unless the context clearly indicates otherwise, all section reference
contained herein shall refer to the applicable section hereof.

     15.7 Venue;  Governing  Law. The Loan  Documents have been delivered to the
Agent,  accepted by the Agent and executed in New Jersey and the Loan  Documents
shall be governed by and  construed by the laws of the State of New Jersey.  The
Borrower and the Guarantor,  jointly and severally,  hereby irrevocably  consent
and agree to the jurisdiction of the state and federal courts of New Jersey, and
further waive any and all  obligations the Borrower may have to the venue of any
action,  claim,  proceeding or  counterclaim  in connection with the Loans being
paid or the Loan  Documents  in the Courts of New Jersey.  The  Borrower and the
Guarantor,  jointly and  severally,  further agree that any such suit,  claim or
other  legal  proceeding  shall be  brought  in the  courts  of the State of New
Jersey. The provisions of this paragraph are a material inducement for the Agent
entering into this Agreement.

     15.8 Remedies.  All obligations of the Borrower and rights of the Agent and
the Banks expressed herein,  and in the Loan Documents,  shall be in addition to
and not in limitation of those provided by applicable law.

     15.9  Successors  and  Assigns.  This  Agreement  shall be binding upon the
Borrower and the Guarantor and their  respective  successors,  and assigns,  and
upon the Agent and the Banks and their  successors and assigns,  and shall inure
to the benefit of the Borrower, the Guarantor, the Agent and the Banks and their
respective  successors  and  assigns.  However,  neither  the  Borrower  nor the
Guarantor may assign its rights or  obligations  under the Loan Documents and no
third party shall have any interest therein.


                                       77
<PAGE>

Any Bank  shall  have the  unrestricted  right at any time or from time to time,
with the  consent of the Agent,  not  unreasonably  withheld,  and  without  the
Borrower's  or any  Guarantor's  consent,  to assign  all or any  portion of its
rights  and  obligations  hereunder  to one or more  banks  or  other  financial
institutions  (each, an "Assignee"),  and the Borrower and Guarantor agrees that
they shall execute, or cause to be executed,  such documents,  including without
limitation, amendments to this Agreement and to any other documents, instruments
and  agreements  executed in  connection  herewith as the Agent and/or the Banks
shall deem necessary to effect the foregoing. In addition, at the request of any
Bank and any such Assignee,  the Borrower shall issue one or more new promissory
notes,  as applicable to any such Assignee and, if such Bank has retained any of
its rights and obligations  hereunder  following such assignment,  to such Bank,
which  new  promissory  notes  shall be  issued in  replacement  of,  but not in
discharge  of, the  liability  evidenced  by the Note held by such Bank prior to
such  assignment  and shall reflect the amount of the Loan held by such Assignee
and such Bank after giving  effect to such  assignment.  Upon the  execution and
delivery  of  appropriate  assignment  documentation,  amendments  and any other
documentation  required by any Bank in connection with such assignment,  and the
payment  by  Assignee  of the  purchase  price  agreed  to by such Bank and such
Assignee, such Assignee shall be a party to this Agreement and shall have all of
the rights and  obligations  of such Bank hereunder (and under any and all other
guaranties,  documents,  instruments,  and  agreements  executed  in  connection
herewith) to the extent that such rights and  obligations  have been assigned by
such Bank  pursuant to the  assignment  documentation  between the Bank and such
Assignee,  and such Bank shall be released  from its  obligations  hereunder and
thereunder to a corresponding extent. Any Bank may at any time pledge all or any
portion of its rights under the Loan Documents including any portion of the Note
to any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal  Reserve  Act, 12 U.S.C.  Section  341.  No such  pledge or  enforcement
thereof  shall  release  such  Bank from its  obligations  under any of the Loan
Documents.

     15.10 Participants. Any Bank shall have the right at any time and from time
to time, without the consent of or notice to the Borrower or Guarantor, but only
with the consent of the Agent,  not  unreasonably  withheld,  to grant to one or
more banks or other financial institutions (each, a "Participant") participating
interests in the Loans hereunder.  In the event of any such grant by any Bank of
a  participating  interest to a  Participant,  whether or not upon notice to the
Borrower,  such  Bank  shall  remain  responsible  for  the  performance  of its
obligations  hereunder  and the  Borrower  shall  continue  to deal  solely  and
directly with such


                                       78
<PAGE>

Bank in connection with such Bank's rights and obligations hereunder.

     Any Bank  may  furnish  any  information  concerning  the  Borrower  in its
possession from time to time to prospective Assignees and Participants, provided
that such Bank shall require any such  prospective  Assignee or  Participant  to
agree in writing to maintain the confidentiality of such information.

     15.11 Counterparts.  This Agreement may be signed in counterparts,  each of
which shall be an original,  with the same effect as if the  signatures  thereto
and hereto were upon the same instrument.

     15.12  Survival.  All  representations  and  warranties  of Borrower  shall
survive the execution and delivery of this Agreement.

     15.13 Most-Favored  Status. In the event that the definitive  documentation
executed  and  delivered  in  connection  with the  issuance and sale of the New
Senior Subordinated Notes or the incurrence of any other Indebtedness  permitted
to be incurred pursuant to Section 10.20(vi) (such indebtedness,  the "Specified
Indebtedness")  (i)  contain  covenants  or  events  of  default  that  are more
restrictive or onerous on the Borrower than those covenants or events of default
contained  in this  Agreement;  (ii)  provide  for, or permits the  exercise of,
remedies  upon the  occurrence  of an event of  default  thereunder  (including,
without  limitation,  any direct or indirect  acceleration of the obligations of
the  Borrower  thereunder)  which are not  provided  for in, or  permitted to be
exercised under of in respect of, this Agreement,  or (iii) provide  security or
other  sources of payment for  obligations  of the Borrower  under the Specified
Indebtedness  which have not been provided  hereunder or in connection  herewith
(each such covenant,  event of default and provision  described in the preceding
clauses (i) through  (iii) being herein  called a "More  Favorable  Provision"),
then prior to or  simultaneously  with the  Borrower  entering  into or becoming
bound by any of the  documentation  pertaining to the Specified  Indebtedness or
any amendment,  modification or supplement  thereto  containing a More Favorable
Provision,  the Borrower shall executed and deliver to the Agent an amendment to
this  Agreement  and such other  documents  and  instruments  as the Agent shall
reasonably  request,  in each case  satisfactory  in form and  substance  to the
Agent, which modify the provisions of this Agreement so as to give the Agent and
each Bank the benefit of each More Favorable Provision.


                                       79
<PAGE>

     15.14  Coordination  of  Covenants  with  New  Senior   Subordinated  Notes
Documentation.  Without  limiting  the rights of the Agent  pursuant  to Section
15.13  hereof,  to the extent  that there  exist a  corollary  provision  in the
Subordinated Debt Documents to Sections  10.14(d),  10.14(e) or Section 10.27(b)
hereof,  then such corollary  provision of the Subordinated  Debt Documents (and
any defined term used therein) shall be deemed incorporated by reference herein,
mutadis  mutandis,  as if fully  set  forth  herein  with the  intent  that such
corollary provision of the Subordinated Debt Documents (and defined terms) shall
govern,  supersede and replace in all respects the corollary provision set forth
and herein (any defined  term used  herein) and be in all respects  binding upon
the  Borrower and  enforceable  by the Agent in  accordance  with its terms (ii)
until such time as  amendment  required  pursuant to Section  15.13 hereof shall
have been executed and delivered by the Borrower,  any More Favorable  Provision
set  forth in the  Subordinated  Debt  documents  (and any  defined  terms  used
therein) shall be deemed incorporated by reference herein,  mutadis mutandis, as
if fully set forth  herein and in all  respects  binding  upon the  Borrower and
enforceable by the Agent in accordance with the terms thereof. In furtherance of
the incorporation by reference  contemplated  herein, it is hereby  acknowledged
that only those provisions of the  Subordinated  Debt Documents set forth in the
documentation  pertaining to the issuance of the New Senior  Subordinated  Notes
approved  by the Agent  shall be  subject to such  incorporation  herein and any
subsequent  amendment  modification or waiver with respect to such provisions in
violation of Section 10.30 shall be ineffective as to, and non-binding upon, the
Agent.

     15.15  Replacement  Note. Upon receipt of an affidavit of an officer of any
Bank as to the loss,  theft,  destruction  or  mutilation of a Note or any other
security  document which is not of public  record,  and, in the case of any such
loss, theft, destruction or mutilation,  upon surrender and cancellation of such
Note or other security  document,  the Borrower will issue,  in lieu thereof,  a
replacement Note or other security document in the same principal amount thereof
and otherwise of like tenor.

     15.16 Amended and Restated Agreement.  This Agreement does not constitute a
cancellation  or  termination  of the Original Loan  Agreement.  This  Agreement
restates in its entity the Original Loan Agreement, and the terms and conditions
of this Agreement supersede and replace the terms and conditions of the Original
Loan Agreement as of the date hereof.

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


                                       80
<PAGE>


                                                 SUPREMA SPECIALTIES, INC.
                                                 ("Borrower")


                                                 By: /s/ Mark Cocchiola
                                                    ----------------------------
                                                 Name:  Mark Cocchiola
                                                 Title: President


                                                 SUPREMA SPECIALTIES WEST, INC.
                                                 ("Guarantor")


                                                 By: /s/ Mark Cocchiola
                                                    ----------------------------
                                                 Name:  Mark Cocchiola
                                                 Title: President


                                                 SUPREMA SPECIALITIES NORTHEAST,
                                                 INC. ("Guarantor")


                                                 By: /s/ Mark Cocchiola
                                                    ----------------------------
                                                 Name:  Mark Cocchiola
                                                 Title: President


                                       81
<PAGE>

                                                 FLEET BANK, N.A. ("Agent")


                                                 By: /s/ Edward J. Waterfield
                                                    ----------------------------
                                                 Name: Edward J. Waterfield
                                                 Title: Senior Vice President


                                                 FLEET BANK, N.A. ("Fleet")


                                                 By: /s/ Edward J. Waterfield
                                                    ----------------------------
                                                 Name: Edward J. Waterfield
                                                 Title: Senior Vice President


                                                 SOVEREIGN BANK ("Sovereign")


                                                 By: /s/ Owen P. McKenna
                                                    ----------------------------
                                                 Name: Owen P. McKenna
                                                 Title: Vice President


                                       82
<PAGE>

                                    EXHIBIT A

                         FORM OF SECURED REVOLVING NOTE

$25,000,000.00                                                 December 16, 1998

     FOR  VALUE  RECEIVED,  the  undersigned,   SUPREMA  SPECIALTIES,   INC.,  a
corporation  duly organized and existing under the laws of the State of New York
(the  "Borrower"),  hereby  unconditionally  promises  to pay to  the  order  of
_______________________________ (the "Bank"), at the office of Fleet Bank, N.A.,
as Agent (the "Agent"), having an address at 208 Harristown Road, Glen Rock, New
Jersey  07452,  for the  account  of the  Bank,  on the  Termination  Date,  the
principal amount of up to _______________________________  ($______________) or,
if less, the aggregate  unpaid principal amount of the Loans made by the Bank to
the Borrower  pursuant to the Loan  Agreement  (as such term is defined  below),
together with interest on the aggregate unpaid principal amount thereof.

     This Note shall be governed  by the terms and  provisions  of that  certain
Second  Amended and Restated  Revolving  Loan,  Guaranty and Security  Agreement
dated as of the date hereof  between the  Borrower,  Suprema  Specialties  West,
Inc.,  as a  guarantor,  Suprema  Specialties  Northeast,  Inc.  as a  guarantor
(collectively, Suprema Specialties West, Inc. and Suprema Specialties Northeast,
Inc.  are  referred to herein as the  "Guarantors"),  the Agent,  the Bank,  and
certain other banks parties thereto,  as the same may be amended,  supplemented,
restated or otherwise  modified from time to time (the "Loan  Agreement").  This
Note shall be entitled to the  benefits of all of the terms and  conditions  of,
and the security of all security interests, liens and rights granted by Borrower
and Guarantors to the Agent for the benefit of the Bank under the Loan Agreement
and the  other  Loan  Documents.  All  capitalized  terms  used  herein  and not
otherwise  defined herein shall have the meanings  ascribed to such terms in the
Loan Agreement.

     The Borrower  shall pay interest to the Bank on the  outstanding  principal
balance of this Note at the Lending Rate. During any period in which an Event of
Default  shall have occurred and be  continuing,  whether or not the maturity of
the Loans  shall be  accelerated,  or after the  Termination  Date,  the rate of
interest payable  hereunder shall be the Default Rate, which is a per annum rate
equal to the Lending Rate plus an additional three percent (3%); provided,  that
in no event shall any interest paid hereunder  exceed the maximum rate permitted
by law.

<PAGE>

     The  Borrower  shall  pay the Bank all  interest  accrued  on the  Loans in
accordance  with the Loan  Agreement.  Any payment not received  within ten (10)
days of its due date shall be  accompanied by a late charge of five percent (5%)
of the amount of such payment. The entire unpaid principal balance of this Note,
plus  any  accrued  and  unpaid  interest,  shall  be  due  and  payable  on the
Termination  Date.  All such  principal and interest  shall be payable in lawful
currency of the United States of America in immediately available funds.

     The Bank shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness of the Borrower hereunder and the amount of
principal  and interest  payable and paid from time to time under the Loans.  In
any legal  proceeding  relating to the Loans,  the entries  made in such account
shall be presumptive evidence of the existence and amounts of the obligations of
the Borrower therein recorded.

     Upon the receipt of an  affidavit of an officer of the Bank as to the loss,
theft,  destruction  or mutilation  of this Note,  and, in the case of any loss,
theft, destruction or mutilation,  upon surrender and cancellation of this Note,
the  Borrower  will  issue,  in lieu  thereof,  a  replacement  note in the same
principal amount thereof and otherwise of like tenor.

     In the event that any date for payment of interest or  principal  hereunder
is not a Business  Day,  such payment  shall be due on the next  succeeding  day
which is a Business Day and interest shall accrue for such extension of time.

     The Borrower  shall  further  reimburse the Bank or any holder of this Note
for any loss or expense  (including  reasonable  attorney's fees) which they may
sustain or incur as a  consequence  of the failure by the  Borrower to honor its
obligations hereunder.

<PAGE>

     No course of dealing  between the Borrower and the Bank or any delay on the
part of the Bank in exercising any rights hereunder shall operate as a waiver of
any rights of any holder hereof. All the covenants,  stipulations,  promises and
agreements in this Note contained by or on behalf of the Borrower shall bind its
successors  and  assigns,  whether  so  expressed  or not.  This  Note  shall be
construed  in  accordance  with and be  governed by the laws of the State of New
Jersey.

                                      SUPREMA SPECIALTIES, INC.


                                      By:
                                         -------------------------------
                                      Name:  Mark Cocchiola
                                      Title: President

<PAGE>

                            SUPREMA SPECIALTIES, INC.

Schedule Attached to the Restated Secured Revolving Note of Suprema Specialties,
Inc. payable to the order of ____________

                     LOANS, INTEREST AND PRINCIPAL PAYMENTS

Date     Loan         Principal      Interest     Interest Paid     Notation
----     ----         ---------      --------     -------------     --------
        Amount        Balance        Rate         to Date           Made By
        ------        -------        ----         -------           -------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The aggregate unpaid principal amount shown on this schedule shall be rebuttable
presumptive  evidence of the principal amount owing and unpaid on this Note. The
failure  to record the date and  amount of any Loan on this  schedule  shall not
however,  limit or otherwise  affect the  obligations  of the Borrower under the
Loan  Agreement  or under this Note to repay the  principal  amount of the Loans
evidenced by this Note together with all interest accruing thereon.

<PAGE>

                                    EXHIBIT B

                       FORM OF BORROWING BASE CERTIFICATE

<PAGE>

                                    EXHIBIT C

                     FORM OF COVENANT COMPLIANCE CERTIFICATE


<PAGE>

                                   SCHEDULE A

UCC Lien Search Report Jurisdictions

A.  New Jersey
B.  California
C.  New York
D.  Vermont

<PAGE>

                                  SCHEDULE 8.2

                                   Trademarks

1.  Suprema Di Avellino

2.  DiLatto

<PAGE>

                                  SCHEDULE 8.3

                                   Tradenames

Suprema

<PAGE>

                                  SCHEDULE 8.4

                       Location of Inventory and Equipment

1.   510 East 35th Street
     Paterson, New Jersey  07543-0280

2.   14253 South Airport Way
     Manteca, California  95336

3.   30 Main Street,
     Ogdensburg, New York 13669

4.   14293 South Airport Way
     Manteca, California  95336

5.   Christian Salvesen
     1270 Shaw Road
     Stockton, California  95205

6.   Port Jersey Dist. Services
     2 Colony Road
     Jersey City, New Jersey  07305

7.   Great Lakes of Ohio
     9988 Kingman Road
     Newbury, Ohio  44065

8.   Burris Refrig. Services
     3946 Federalsburg Highway
     Federalsburg, Maryland  21632

9.   ACCEM Warehouse
     63-89 Hook Road
     Bayonne, New Jersey  07002

10.  D.G.B. Warehouse
     970-I New Brunswick Avenue
     Rahway, New Jersey  07065

11.  Columbia Farms, Inc.
     16 Sutton Road
     Webster, Massachusetts  01570

12.  East Coast Storage
     1140 Polaris Street
     Elizabeth, New Jersey  07201

<PAGE>

13.  Nite Hawk
     136-142 Rochelle Avenue
     Rochelle Park, New Jersey  07662

14.  Biazzo
     1145 Edgewater Avenue
     Ridgefield, New Jersey  07657

15.  C&S
     Old Ferry Road
     Brattleboro, Vermont  05302

<PAGE>

                                 SCHEDULE 8.4(A)

                       Location of Inventory and Equipment
                   for which Agent and Banks shall not require
                            Landlord/Warehouse Waiver

1.   Biazzo
     1145 Edgewater Avenue
     Ridgefield, New Jersey 07657

2.   C&S
     Old Ferry Road
     Brattleboro, Vermont 05302

<PAGE>

                                 SCHEDULE 8.4(B)

                          Location of Books and Records

510 East 35th Street
Paterson, New Jersey 07543-0280

14253 So. Airport Way
Manteca, California

30 Main Street
Ogdensburg, New York 13669

<PAGE>

                                  SCHEDULE 8.5

                       Chief Executive Office and Address

510 East 35th Street
Paterson, New Jersey

<PAGE>

                                  SCHEDULE 8.6

                            Other Places of Business

14253 So. Airport Way
Manteca, California

30 Main Street
Ogdensburg, New York 13669

<PAGE>

                                 SCHEDULE 10.20

                              Existing Indebtedness

                                      None