<PAGE>

                                                              [EXECUTION COPY]






                                  CREDIT AGREEMENT
                                          
                                          
                            Dated as of October 14, 1997
                                          
                                          
                                       among
                                          
                                          
                           INSIGHT HEALTH SERVICES CORP.,
                                    as Borrower,
                                          
                                          
                        CERTAIN SUBSIDIARIES OF THE BORROWER
                          FROM TIME TO TIME PARTY HERETO,
                                   as Guarantors,
                                          
                                          
                                THE SEVERAL LENDERS
                           FROM TIME TO TIME PARTY HERETO
                                          
                                          
                                        AND
                                          
                                          
                                NATIONSBANK, N. A.,
                                      as Agent


<PAGE>

                            TABLE OF CONTENTS

<TABLE>

<S>       <C>                                                                <C>
SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.1 DEFINITIONS.. . . . . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.2 COMPUTATION OF TIME PERIODS.. . . . . . . . . . . . . . . . . . . . 30
     1.3 ACCOUNTING TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . 30

SECTION 2  CREDIT FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . 31
     2.1 REVOLVING LOANS.. . . . . . . . . . . . . . . . . . . . . . . . . . 31
     2.2 LETTER OF CREDIT SUBFACILITY. . . . . . . . . . . . . . . . . . . . 33
     2.3 ACQUISITION LOANS.. . . . . . . . . . . . . . . . . . . . . . . . . 38
     2.4 TRANCHE A TERM LOAN.. . . . . . . . . . . . . . . . . . . . . . . . 41
     2.5 TRANCHE B TERM LOAN.. . . . . . . . . . . . . . . . . . . . . . . . 44

SECTION 3  OTHER PROVISIONS RELATING TO CREDIT FACILITIES. . . . . . . . . . 46
     3.1 DEFAULT RATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
     3.2 EXTENSION AND CONVERSION. . . . . . . . . . . . . . . . . . . . . . 46
     3.3 PREPAYMENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
     3.4 TERMINATION AND REDUCTION OF COMMITTED AMOUNTS; 
          INCREASE OF COMMITMENT.. . . . . . . . . . . . . . . . . . . . . . 49
     3.5 FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
     3.6 CAPITAL ADEQUACY. . . . . . . . . . . . . . . . . . . . . . . . . . 53
     3.7 LIMITATION ON EURODOLLAR LOANS. . . . . . . . . . . . . . . . . . . 54
     3.8 ILLEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
     3.9 REQUIREMENTS OF LAW.. . . . . . . . . . . . . . . . . . . . . . . . 54
     3.10 TREATMENT OF AFFECTED LOANS. . . . . . . . . . . . . . . . . . . . 55
     3.11 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
     3.12 COMPENSATION.. . . . . . . . . . . . . . . . . . . . . . . . . . . 58
     3.13 PRO RATA TREATMENT.. . . . . . . . . . . . . . . . . . . . . . . . 59
     3.14 SHARING OF PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . 59
     3.15 PAYMENTS, COMPUTATIONS, ETC. . . . . . . . . . . . . . . . . . . . 60
     3.16 EVIDENCE OF DEBT.. . . . . . . . . . . . . . . . . . . . . . . . . 62
     3.17 Mandatory Assignment.. . . . . . . . . . . . . . . . . . . . . . . 62

SECTION 4  GUARANTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
     4.1 THE GUARANTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
     4.2 OBLIGATIONS UNCONDITIONAL.. . . . . . . . . . . . . . . . . . . . . 63
     4.3 REINSTATEMENT.. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
     4.4 CERTAIN ADDITIONAL WAIVERS. . . . . . . . . . . . . . . . . . . . . 65
     4.5 REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
     4.6 RIGHTS OF CONTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . 65
     4.7 CONTINUING GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . 66

SECTION 5  CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
     5.1 CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 67

                                      i

<PAGE>

     5.2 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT. . . . . . . . . . . . . 68
     5.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT. . . . . . . . . . . . . . . 71

SECTION 6  REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . 72
     6.1 FINANCIAL CONDITION.. . . . . . . . . . . . . . . . . . . . . . . . 72
     6.2 NO MATERIAL CHANGE. . . . . . . . . . . . . . . . . . . . . . . . . 73
     6.3 ORGANIZATION AND GOOD STANDING. . . . . . . . . . . . . . . . . . . 73
     6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.. . . . . . . . . . . 73
     6.5 NO CONFLICTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     6.6 NO DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     6.7 OWNERSHIP.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     6.8 INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     6.9 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
     6.10 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
     6.11 COMPLIANCE WITH LAW. . . . . . . . . . . . . . . . . . . . . . . . 75
     6.12 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
     6.13 SUBSIDIARIES.. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
     6.14 GOVERNMENTAL REGULATIONS, ETC. . . . . . . . . . . . . . . . . . . 77
     6.15 PURPOSE OF LOANS AND LETTERS OF CREDIT.. . . . . . . . . . . . . . 78
     6.16 ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . 78
     6.17 INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . . . . . . 79
     6.18 SOLVENCY.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
     6.19 INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
     6.20 LOCATION OF COLLATERAL.. . . . . . . . . . . . . . . . . . . . . . 79
     6.21 DISCLOSURE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
     6.22 NO BURDENSOME RESTRICTIONS.. . . . . . . . . . . . . . . . . . . . 80
     6.23 BROKERS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
     6.24 LABOR MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . 80
     6.25 NATURE OF BUSINESS.. . . . . . . . . . . . . . . . . . . . . . . . 80

SECTION 7  AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . 80
     7.1 INFORMATION COVENANTS.. . . . . . . . . . . . . . . . . . . . . . . 80
     7.2 PRESERVATION OF EXISTENCE AND FRANCHISES. . . . . . . . . . . . . . 83
     7.3 BOOKS AND RECORDS.. . . . . . . . . . . . . . . . . . . . . . . . . 83
     7.4 COMPLIANCE WITH LAW.. . . . . . . . . . . . . . . . . . . . . . . . 83
     7.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.. . . . . . . . . . . . . . 84
     7.6 INSURANCE.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
     7.7 MAINTENANCE OF PROPERTY.. . . . . . . . . . . . . . . . . . . . . . 85
     7.8 PERFORMANCE OF OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . 85
     7.9 USE OF PROCEEDS.. . . . . . . . . . . . . . . . . . . . . . . . . . 85
     7.10 AUDITS/INSPECTIONS.. . . . . . . . . . . . . . . . . . . . . . . . 85
     7.11 FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 86
     7.12 ADDITIONAL CREDIT PARTIES. . . . . . . . . . . . . . . . . . . . . 87
     7.13 PLEDGED ASSETS.. . . . . . . . . . . . . . . . . . . . . . . . . . 87
     7.14 INTEREST RATE PROTECTION.. . . . . . . . . . . . . . . . . . . . . 88
     7.15 UPSTREAMING OF INCOME FROM JOINT VENTURES. . . . . . . . . . . . . 89

                                      ii

<PAGE>

     7.16 FURTHER ASSURANCES.. . . . . . . . . . . . . . . . . . . . . . .   89

SECTION 8  NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . .   90
     8.1 INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . .   90
     8.2 LIENS.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   92
     8.3 NATURE OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . .   92
     8.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.. . . . . . . . . . . . .   92
     8.5 ASSET DISPOSITIONS. . . . . . . . . . . . . . . . . . . . . . . .   93
     8.6 INVESTMENTS.. . . . . . . . . . . . . . . . . . . . . . . . . . .   94
     8.7 RESTRICTED PAYMENTS.. . . . . . . . . . . . . . . . . . . . . . .   94
     8.8 PREPAYMENTS OF INDEBTEDNESS, ETC. . . . . . . . . . . . . . . . .   94
     8.9 TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . . . . .   94
     8.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS. . . . . . . . . . . . . .   95
     8.11 LIMITATION ON RESTRICTED ACTIONS.. . . . . . . . . . . . . . . .   95
     8.12 OWNERSHIP OF SUBSIDIARIES. . . . . . . . . . . . . . . . . . . .   95
     8.13 SALE LEASEBACKS. . . . . . . . . . . . . . . . . . . . . . . . .   96
     8.14 RESTRICTED CAPITAL EXPENDITURES. . . . . . . . . . . . . . . . .   96
     8.15 NO FURTHER NEGATIVE PLEDGES. . . . . . . . . . . . . . . . . . .   96
     8.16 OPERATING LEASE OBLIGATIONS. . . . . . . . . . . . . . . . . . .   96
     8.17 NO FOREIGN SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . .   97
     8.18 JOINT VENTURE OPERATIONS.. . . . . . . . . . . . . . . . . . . .   97

SECTION 9  EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . .   97
     9.1 EVENTS OF DEFAULT.. . . . . . . . . . . . . . . . . . . . . . . .   97
     9.2 ACCELERATION; REMEDIES. . . . . . . . . . . . . . . . . . . . . .   99

SECTION 10  AGENCY PROVISIONS. . . . . . . . . . . . . . . . . . . . . . .  100
     10.1 APPOINTMENT, POWERS AND IMMUNITIES.. . . . . . . . . . . . . . .  100
     10.2 RELIANCE BY AGENT. . . . . . . . . . . . . . . . . . . . . . . .  101
     10.3 DEFAULTS.. . . . . . . . . . . . . . . . . . . . . . . . . . . .  101
     10.4 RIGHTS AS A LENDER.. . . . . . . . . . . . . . . . . . . . . . .  102
     10.5 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . .  102
     10.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. . . . . . . . . . . . .  102
     10.7 SUCCESSOR AGENT. . . . . . . . . . . . . . . . . . . . . . . . .  103

SECTION 11  MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .  103
     11.1 NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  104
     11.2 RIGHT OF SET-OFF; ADJUSTMENTS. . . . . . . . . . . . . . . . . .  105
     11.3 BENEFIT OF AGREEMENT.. . . . . . . . . . . . . . . . . . . . . .  105
     11.4 NO WAIVER; REMEDIES CUMULATIVE.. . . . . . . . . . . . . . . . .  107
     11.5 EXPENSES; INDEMNIFICATION. . . . . . . . . . . . . . . . . . . .  107
     11.6 AMENDMENTS, WAIVERS AND CONSENTS.. . . . . . . . . . . . . . . .  108
     11.7 COUNTERPARTS.. . . . . . . . . . . . . . . . . . . . . . . . . .  109
     11.8 HEADINGS.. . . . . . . . . . . . . . . . . . . . . . . . . . . .  110
     11.9 SURVIVAL.. . . . . . . . . . . . . . . . . . . . . . . . . . . .  110
     11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. . . . . . . .  110

                                     iii

<PAGE>

     11.11 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . .  111
     11.12 ENTIRETY. . . . . . . . . . . . . . . . . . . . . . . . . . . .  111
     11.13 BINDING EFFECT; TERMINATION.. . . . . . . . . . . . . . . . . .  111
     11.14 SOURCE OF FUNDS.. . . . . . . . . . . . . . . . . . . . . . . .  111
     11.15 CONFLICT. . . . . . . . . . . . . . . . . . . . . . . . . . . .  112

</TABLE>

                                      iv

<PAGE>

<TABLE>
<CAPTION>

                                     SCHEDULES
<S>                   <C>
Schedule 1.1A         Joint Ventures
Schedule 1.1B         Investments
Schedule 1.1C         Liens
Schedule 2.1(a)       Lenders
Schedule 3.3(b)(vii)  Special Asset Dispositions
Schedule 5.2(c)(i)    Form of Legal Opinion of McDermott, Will & Emery
Schedule 5.2(c)(ii)   Form of Local Corporate Counsel Opinion
Schedule 5.2(f)       Corporate Structure
Schedule 5.2(i)       Form of Solvency Opinion
Schedule 6.1(c)       Absence of Undisclosed Liabilities
Schedule 6.4          Required Consents, Authorizations, Notices and Filings
Schedule 6.9          Litigation
Schedule 6.12         ERISA
Schedule 6.13         Subsidiaries
Schedule 6.15         Funded Indebtedness to be Refinanced
Schedule 6.16         Environmental Disclosures
Schedule 6.17         Intellectual Property
Schedule 6.20(a)(i)   Primary Real Properties
Schedule 6.20(a)(ii)  Secondary Real Properties
Schedule 6.20(b)      Collateral Locations
Schedule 6.20(c)      Chief Executive Offices/Principal Places of Business
Schedule 6.23         Broker's Fees
Schedule 7.6          Insurance
Schedule 8.1          Indebtedness
Schedule 8.16         Existing Operating Leases


                                      EXHIBITS

Exhibit 1.1A          Form of Pledge Agreement
Exhibit 1.1B          Form of Security Agreement
Exhibit 1.1C          Form of Subordination Agreement
Exhibit 2.1(b)(i)     Form of Notice of Borrowing
Exhibit 2.1(e)        Form of Revolving Note
Exhibit 2.3(e)        Form of Acquisition Loan Note
Exhibit 2.4(f)        Form of Tranche A Term Note
Exhibit 2.5(f)        Form of Tranche B Term Note
Exhibit 3.2           Form of Notice of Extension/Conversion
Exhibit 3.4(b)        Form of New Commitment Agreement

                                      i

<PAGE>

Exhibit 7.1(c)        Form of Officer's Compliance Certificate
Exhibit 7.12          Form of Joinder Agreement
Exhibit 11.3(b)       Form of Assignment and Acceptance

                                      ii

</TABLE>

<PAGE>

                                  CREDIT AGREEMENT

     THIS CREDIT AGREEMENT, dated as of October 14, 1997 (as amended, modified,
restated or supplemented from time to time, the "CREDIT AGREEMENT"), is by and
among INSIGHT HEALTH SERVICES CORP., a Delaware corporation (the "BORROWER"),
the Guarantors (as defined herein), the Lenders (as defined herein) and
NATIONSBANK, N. A., as Agent for the Lenders (in such capacity, the "AGENT").

                                W I T N E S S E T H

     WHEREAS, the Borrower has requested that the Lenders provide a $125 million
credit facility for the purposes hereinafter set forth; and

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

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

SECTION 1

     DEFINITIONS

          1.1         DEFINITIONS.

     As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:

          "ACQUISITION", by any Person, means an acquisition by such Person, to
     the extent not constituting a capital expenditure under GAAP, of all or a
     majority of the Capital Stock or all or substantially all of the Property
     of another Person, whether or not involving a merger or consolidation with
     such Person.

          "ACQUISITION LOAN COMMITMENT" means, with respect to each Lender, the
     commitment of such Lender in an aggregate principal amount at any time
     outstanding of up to such Lender's Acquisition Loan Commitment Percentage
     of the Acquisition Loan Committed Amount, to make Acquisition Loans in
     accordance with the provisions of Section 2.3(a).

          "ACQUISITION LOAN COMMITMENT PERCENTAGE" means, for any Lender, the
     percentage identified as its Acquisition Loan Commitment Percentage on
     SCHEDULE 2.1(a), as such percentage may be modified in connection with any
     assignment made in accordance with the provisions of Section 11.3.

                                      1

<PAGE>

          "ACQUISITION LOAN COMMITTED AMOUNT" shall have the meaning assigned to
     such term in Section 2.3(a).

          "ACQUISITION LOAN UNUSED FEE" shall have the meaning assigned to such
     term in Section 3.5(a)(ii).

          "ACQUISITION LOAN UNUSED FEE CALCULATION PERIOD" shall have the
     meaning assigned to such term in Section 3.5(a)(ii).

          "ACQUISITION LOANS" shall have the meaning assigned to such term in
     Section 2.3(a).

          "ACQUISITION NOTE" or "ACQUISITION NOTES" means the promissory notes
     of the Borrower in favor of each of the Lenders evidencing the Acquisition
     Loans provided pursuant to Section 2.3(e), individually or collectively, as
     appropriate, as such promissory notes may be amended, modified, restated,
     supplemented, extended, renewed or replaced from time to time.

          "ADDITIONAL COMMITMENT" means, with respect to any Lender which
     executes a New Commitment Agreement in accordance with Section 3.4(b), the
     commitment of such Lender in an aggregate principal amount up to the amount
     specified in such New Commitment Agreement (i) to make Acquisition Loans in
     accordance with the provisions of Section 2.3(a).

          "ADDITIONAL CREDIT PARTY" means each Person that becomes a Guarantor
     after the Closing Date by execution of a Joinder Agreement.

          "ADJUSTED BASE RATE" means the Base Rate PLUS the Applicable
     Percentage.

          "ADJUSTED EURODOLLAR RATE" means the Eurodollar Rate PLUS the
     Applicable Percentage.

          "AFFILIATE" means, with respect to any Person, any other Person (i)
     directly or indirectly controlling or controlled by or under direct or
     indirect common control with such Person or (ii) directly or indirectly
     owning or holding five percent (5%) or more of the Capital Stock in such
     Person.  For purposes of this definition, "control" when used with respect
     to any Person means the power to direct the management and policies of such
     Person, directly or indirectly, whether through the ownership of voting
     securities, by contract or otherwise; and the terms "controlling" and
     "controlled" have meanings correlative to the foregoing.

          "AGENCY SERVICES ADDRESS" means NationsBank, N. A., NC1-001-15-04, 101
     North Tryon Street, Charlotte, North Carolina  28255, Attn: Agency
     Services, or such other address as may be identified by written notice from
     the Agent to the Borrower.

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

                                      2

<PAGE>

          "AGENT'S FEE LETTER" means that certain letter agreement, dated as of
     October 7, 1997, between the Agent and the Borrower, as amended, modified,
     restated or supplemented from time to time.

          "AGENT'S FEES" shall have the meaning assigned to such term in Section
     3.5(c).

          "APPLICABLE LENDING OFFICE" means, for each Lender, the office of such
     Lender (or of an Affiliate of such Lender) as such Lender may from time to
     time specify to the Agent and the Borrower by written notice as the office
     by which its Eurodollar Loans are made and maintained.
     
          "APPLICABLE PERCENTAGE" means, for purposes of calculating the
     applicable interest rate for any day for any Revolving Loan, any
     Acquisition Loan, any Tranche A Term Loan or any Tranche B Term Loan, the
     applicable rate of the Revolving Unused Fee for any day for purposes of
     Section 3.5(a)(i), the applicable rate of the Acquisition Loan Unused Fee
     for any day for purposes of Section 3.5(a)(ii), the applicable rate of the
     Standby Letter of Credit Fee for any day for purposes of Section 3.5(b)(i)
     or the applicable rate of the Trade Letter of Credit Fee for any day for
     purposes of Section 3.5(b)(ii), the appropriate applicable percentage
     corresponding to the Total Leverage Ratio in effect as of the most recent
     Calculation Date:

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------
                                                                                          APPLICABLE     APPLICABLE
                                                                                        PERCENTAGE FOR   PERCENTAGE     APPLICABLE
 PRICING    LEVERAGE     APPLICABLE PERCENTAGE FOR       APPLICABLE PERCENTAGE FOR      STANDBY LETTER    FOR TRADE     PERCENTAGE
  LEVEL      RATIO            EURODOLLAR LOANS                BASE RATE LOANS           OF CREDIT FEE     LETTER OF     FOR UNUSED
                                                                                                         CREDIT FEE        FEES
-------------------------------------------------------------------------------------------------------------------------------
                         REVOLVING                       REVOLVING
                           LOANS,                         LOANS,
                        ACQUISITION      TRANCHE B      ACQUISITION     TRANCHE B
                         LOANS AND      TERM LOANS       LOANS AND      TERM LOANS
                       TRANCHE A TERM                 TRANCHE A TERM
                           LOANS                           LOANS
-------------------------------------------------------------------------------------------------------------------------------
<S>        <C>          <C>             <C>             <C>             <C>             <C>              <C>            <C>
    I      LESS THAN       1.50%           2.50%           0.50%          1.50%           1.50%           0.75%          0.375%
           2.00 to
           1.00
-------------------------------------------------------------------------------------------------------------------------------
    II     MORE OR         1.75%           2.50%           0.75%          1.50%           1.75%           0.875%         0.375%
           LESS THAN
           2.00 to
           1.00 but
           LESS THAN
           2.25 to
           1.00
-------------------------------------------------------------------------------------------------------------------------------
   III     MORE OR         2.00%           2.50%           1.00%          1.50%           2.00%           1.00%          0.375%
           LESS THAN
           1.00 but
           LESS THAN
           2.50 to
           1.00
-------------------------------------------------------------------------------------------------------------------------------
    IV     MORE OR         2.25%           2.75%           1.25%          1.75%           2.25%           1.125%         0.50%
           LESS THAN
           2.50 to
           1.00 but
           LESS THAN
           3.25 to
           1.00
-------------------------------------------------------------------------------------------------------------------------------
    V      MORE OR         2.50%           2.75%           1.50%          1.75%           2.50%           1.25%          0.50%
           LESS THAN
           3.25 to
           1.00
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------------

</TABLE>

     The Applicable Percentages shall be determined and adjusted quarterly on
     the date (each a "CALCULATION DATE") five Business Days after the date by
     which the Borrower is required to provide the officer's certificate in
     accordance with the provisions of Section 7.1(c) for the most recently
     ended fiscal quarter of the Consolidated Parties; PROVIDED, HOWEVER, that
     (i) the initial Applicable Percentages shall be based on Pricing Level IV
     (as shown above) and shall remain at Pricing Level IV until the Calculation
     Date occurring on September 30, 1998 and, thereafter, the Pricing Level
     shall be determined by the Leverage Ratio as of the last day of the most
     recently ended fiscal quarter of the Consolidated Parties preceding the
     applicable Calculation Date, and (ii) if the Borrower fails to provide the
     officer's certificate to the Agency Services Address as required by Section
     7.1(c) for the last day of the most 

                                      3

<PAGE>

     recently ended fiscal quarter of the Consolidated Parties preceding the 
     applicable Calculation Date, the Applicable Percentage from such 
     Calculation Date shall be based on Pricing Level III until such time as 
     an appropriate officer's certificate is provided, whereupon the Pricing 
     Level shall be determined by the Leverage Ratio as of the last day of 
     the most recently ended fiscal quarter of the Consolidated Parties 
     preceding such Calculation Date.  Each Applicable Percentage shall be 
     effective from one Calculation Date until the next Calculation Date.  
     Any adjustment in the Applicable Percentages shall be applicable to all 
     existing Loans as well as any new Loans made or issued.

          "APPLICATION PERIOD", in respect of any Asset Disposition, shall have
     the meaning assigned to such term in Section 8.5.

          "ASSET DISPOSITION" means the disposition of any or all of the assets
     (including without limitation the Capital Stock of a Subsidiary) of any
     Consolidated Party, whether by sale, lease, transfer or otherwise, other
     than (a) the sale of inventory in the ordinary course of business for fair
     consideration, (b) the sale or disposition of machinery and equipment no
     longer used or useful in the conduct of such Person's business and (c) any
     Equity Transaction.
     
          "ASSET DISPOSITION PREPAYMENT EVENT" means, with respect to any Asset
     Disposition other than an Excluded Asset Disposition, the failure of the
     Borrower to apply (or cause to be applied) the Net Cash Proceeds of such
     Asset Disposition to the purchase, acquisition or construction of Eligible
     Assets during the Application Period for such Asset Disposition.

          "BANKRUPTCY CODE" means the Bankruptcy Code in Title 11 of the United
     States Code, as amended, modified, succeeded or replaced from time to time.

          "BANKRUPTCY EVENT" means, with respect to any Person, the occurrence
     of any of the following with respect to such Person: (i) a court or
     governmental agency having jurisdiction in the premises shall enter a
     decree or order for relief in respect of such Person in an involuntary case
     under any applicable bankruptcy, insolvency or other similar law now or
     hereafter in effect, or appointing a receiver, liquidator, assignee,
     custodian, trustee, sequestrator (or similar official) of such Person or
     for any substantial part of its Property or ordering the winding up or
     liquidation of its affairs; or (ii) there shall be commenced against such
     Person an involuntary case under any applicable bankruptcy, insolvency or
     other similar law now or hereafter in effect, or any case, proceeding or
     other action for the appointment of a receiver, liquidator, assignee,
     custodian, trustee, sequestrator (or similar official) of such Person or
     for any substantial part of its Property or for the winding up or
     liquidation of its affairs, and such involuntary case or other case,
     proceeding or other action shall remain undismissed, undischarged or
     unbonded for a period of ninety (90) consecutive days; or (iii) such Person
     shall commence a voluntary case under any applicable bankruptcy, insolvency
     or other similar law now or hereafter in effect, or consent to the entry of
     an order for relief in an involuntary case under any such law, or consent
     to the appointment or taking possession by a receiver, liquidator,
     assignee, custodian, trustee, sequestrator (or similar official) of such
     Person or for any substantial part of its Property or 

                                      4

<PAGE>

     make any general assignment for the benefit of creditors; or (iv) such 
     Person shall be unable to, or shall admit in writing its inability to, 
     pay its debts generally as they become due.

          "BASE RATE" means, for any day, the rate per annum equal to the higher
     of (a) the Federal Funds Rate for such day plus one-half of one percent
     (0.5%) and (b) the Prime Rate for such day.  Any change in the Base Rate
     due to a change in the Prime Rate or the Federal Funds Rate shall be
     effective on the effective date of such change in the Prime Rate or Federal
     Funds Rate.

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

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

          "BUSINESS DAY" means a day other than a Saturday, Sunday or other day
     on which commercial banks in Charlotte, North Carolina or New York, New
     York are authorized or required by law to close, EXCEPT THAT, when used in
     connection with a Eurodollar Loan, such day shall also be a day on which
     dealings between banks are carried on in U.S. dollar deposits in London,
     England.

          "CALCULATION DATE" has the meaning set forth in the definition of
     "Applicable Percentage" set forth in this Section 1.1.

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

          "CAPITAL STOCK" means (i) in the case of a corporation, capital stock,
     (ii) in the case of an association or business entity, any and all shares,
     interests, participations, rights or other equivalents (however designated)
     of capital stock, (iii) in the case of a partnership, partnership interests
     (whether general or limited), (iv) in the case of a limited liability
     company, membership interests and (v) any other interest or participation
     that confers on a Person the right to receive a share of the profits and
     losses of, or distributions of assets of, the issuing Person.

          "CASH EQUIVALENTS" means (a) securities issued or directly and fully
     guaranteed or insured by the United States of America or any agency or
     instrumentality thereof (provided that the full faith and credit of the
     United States of America is pledged in support thereof) having maturities
     of not more than twelve months from the date of acquisition, (b) U.S.
     dollar denominated time deposits and certificates of deposit of (i) any
     Lender, (ii) any domestic commercial bank of recognized standing having
     capital and surplus in excess of $500,000,000 or (iii) any bank whose
     short-term commercial paper rating from S&P is at least A-1 or the
     equivalent thereof or from Moody's is at least P-1 or the equivalent
     thereof (any such bank being an "APPROVED BANK"), in each case with
     maturities of not more than 270 days from the date of acquisition, (c)
     commercial paper and variable or fixed rate notes 

                                      5

<PAGE>

     issued by any Approved Bank (or by the parent company thereof) or any 
     variable rate notes issued by, or guaranteed by, any domestic 
     corporation rated A-1 (or the equivalent thereof) or better by S&P or 
     P-1 (or the equivalent thereof) or better by Moody's and maturing within 
     six months of the date of acquisition, (d) repurchase agreements with a 
     bank or trust company (including any of the Lenders) or recognized 
     securities dealer having capital and surplus in excess of $500,000,000 
     for direct obligations issued by or fully guaranteed by the United 
     States of America in which any Credit Party shall have a perfected first 
     priority security interest (subject to no other Liens) and having, on 
     the date of purchase thereof, a fair market value of at least 100% of 
     the amount of the repurchase obligations and (e) Investments, classified 
     in accordance with GAAP as current assets, in money market investment 
     programs registered under the Investment Company Act of 1940, as 
     amended, which are administered by reputable financial institutions 
     having capital of at least $500,000,000 and the portfolios of which are 
     limited to Investments of the character described in the foregoing 
     subdivisions (a) through (d).
     
          "CENTRAL COAST" means a direct or indirect Subsidiary of the Borrower
     to be created subsequent to the Closing Date for the purpose of operating a
     diagnostic imaging center project in California.
     
          "CERTIFICATES OF DESIGNATION" means a collective reference to the
     Series B Certificate of Designation and the Series C Certificate of
     Designation.

          "CHANGE OF CONTROL" means any of the following events: without the
     prior written consent of the Required Lenders, (a) either the Sponsor or GE
     shall transfer any Capital Stock in the Borrower in a manner that requires
     approval of the Borrower's Board of Directors pursuant to Section 6.14 of
     the Sponsor Investment Agreement or Section 6.14 of the GE Investment
     Agreement, (b) any Person other than the Sponsor or GE or two or more
     Persons other than the Sponsor or GE acting in concert shall have acquired
     beneficial ownership, directly or indirectly, of, or shall have acquired by
     contract or otherwise, or shall have entered into a contract or arrangement
     that, upon consummation, will result in its or their acquisition of,
     control over, 33% or more of the Capital Stock of the Borrower, (c) during
     any period of up to 24 consecutive months commencing after the Closing
     Date, individuals who at the beginning of such 24 month period were
     directors of the Borrower (together with any new director (i) whose
     election by the Borrower's Board of Directors or whose nomination for
     election by the Borrower's shareholders was approved by a vote of at least
     two-thirds of the directors then still in office who either were directors
     at the beginning of such period or whose election or nomination for
     election was previously so approved or (ii) appointed by the Sponsor and/or
     GE) cease for any reason to constitute a majority of the directors of the
     Borrower then in office or (d) the occurrence of (i) a breach by the
     Sponsor of Section 6.14 of the Sponsor Investment Agreement or (ii) a
     breach by GE of Section 6.14 of the GE Investment Agreement.  As used
     herein, "beneficial ownership" shall have the meaning provided in 
     Rule 13d-3 of the Securities and Exchange Commission under the Securities 
     Exchange Act of 1934.

          "CLOSING DATE" means the date hereof.

                                      6

<PAGE>

          "CODE" means the Internal Revenue Code of 1986, as amended, and any
     successor statute thereto, as interpreted by the rules and regulations
     issued thereunder, in each case as in effect from time to time.  References
     to sections of the Code shall be construed also to refer to any successor
     sections.
     
          "COLLATERAL" means a collective reference to the collateral which is
     identified in, and at any time will be covered by, the Collateral
     Documents.

          "COLLATERAL DOCUMENTS" means a collective reference to the Security
     Agreement, the Pledge Agreement, the Mortgage Instruments and such other
     documents executed and delivered in connection with the attachment and
     perfection of the Agent's security interests and liens arising thereunder,
     including without limitation, UCC financing statements and patent and
     trademark filings.

          "COMMITMENT" means (i) with respect to each Lender, the Revolving
     Commitment of such Lender, the Acquisition Loan Commitment of such Lender,
     the Tranche A Term Loan Commitment and the Tranche B Term Loan Commitment
     of such Lender and (ii) with respect to the Issuing Lender, the LOC
     Commitment.

          "CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, all capital
     expenditures of the Consolidated Parties on a consolidated basis for such
     period, as determined in accordance with GAAP.

          "CONSOLIDATED CASH INTEREST EXPENSE" means, for any period, cash
     interest expense (including the amortization of debt discount and premium,
     the interest component under Capital Leases and the implied interest
     component under Synthetic Leases) of the Consolidated Parties on a
     consolidated basis for such period, as determined in accordance with GAAP;
     provided, however, that, notwithstanding anything to the contrary set forth
     in this Credit Agreement, (i) for any calculation as of the fiscal quarter
     ending March 31, 1998 for the twelve-month period then ended, Consolidated
     Cash Interest Expense shall be determined based on Consolidated Cash
     Interest Expense for the one-quarter period then ended multiplied by 4,
     (ii) for any calculation as of the fiscal quarter ending June 30, 1998 for
     the twelve-month period then ended, Consolidated Cash Interest Expense
     shall be determined based on Consolidated Cash Interest Expense for the
     two-quarter period then ended multiplied by 2 and (iii) for any calculation
     as of the fiscal quarter ending September 30, 1998 for the twelve-month
     period then ended, Consolidated Cash Interest Expense shall be determined
     based on Consolidated Cash Interest Expense for the two-quarter period then
     ended multiplied by 1.33.

          "CONSOLIDATED CASH TAXES" means, for any period, the aggregate of all
     taxes of the Consolidated Parties on a consolidated basis for such period,
     as determined in accordance with GAAP, to the extent the same are paid in
     cash during such period.

          "CONSOLIDATED EBITDA" means, for any period, the sum of (i)
     Consolidated Net Income for such period, plus (ii) an amount which, in the
     determination of Consolidated Net Income for such period, has been deducted
     for (A) Consolidated Interest Expense, 

                                      7

<PAGE>

     (B) total federal, state, local and foreign income, value added and 
     similar taxes, (C) depreciation and amortization expense and (D) 
     minority interests (provided that minority interests shall not 
     constitute more than 10% of Consolidated EBITDA for any period), all as 
     determined in accordance with GAAP.

          "CONSOLIDATED EBITDAR" means, for any period, the sum of (i)
     Consolidated EBITDA for such period, plus (ii) an amount which, in the
     determination of Consolidated Net Income for such period, has been deducted
     for Consolidated Rental Expense, all as determined in accordance with GAAP.

          "CONSOLIDATED INTEREST EXPENSE" means, for any period, interest
     expense (including the amortization of debt discount and premium, the
     interest component under Capital Leases and the implied interest component
     under Synthetic Leases) of the Consolidated Parties on a consolidated basis
     for such period, as determined in accordance with GAAP; provided, however,
     that, notwithstanding anything to the contrary set forth in this Credit
     Agreement, (i) for any calculation as of the fiscal quarter ending March
     31, 1998 for the twelve-month period then ended, Consolidated Interest
     Expense shall be determined based on Consolidated Interest Expense for the
     one-quarter period then ended multiplied by 4, (ii) for any calculation as
     of the fiscal quarter ending June 30, 1998 for the twelve-month period then
     ended, Consolidated Interest Expense shall be determined based on
     Consolidated Interest Expense for the two-quarter period then ended
     multiplied by 2 and (iii) for any calculation as of the fiscal quarter
     ending September 30, 1998 for the twelve-month period then ended,
     Consolidated Interest Expense shall be determined based on Consolidated
     Interest Expense for the two-quarter period then ended multiplied by 1.33.

          "CONSOLIDATED NET INCOME" means, for any period, net income (excluding
     extraordinary, unusual items and gains or losses on Asset Dispositions)
     after taxes for such period of the Consolidated Parties on a consolidated
     basis, as determined in accordance with GAAP.

          "CONSOLIDATED PARTIES" means a collective reference to the Borrower
     and its Subsidiaries, and "CONSOLIDATED PARTY" means any one of them.

          "CONSOLIDATED RENTAL EXPENSE" means, for any period, rental expense
     under Operating Leases of the Consolidated Parties on a consolidated basis
     for such period, as determined in accordance with GAAP.

          "CONSOLIDATED RESTRICTED CAPITAL EXPENDITURES" means, for any period
     for the Consolidated Parties on a consolidated basis, all capital
     expenditures for such period, as determined in accordance with GAAP, other
     than any capital expenditure representing the purchase price of equipment,
     or the costs of construction or purchase price, for, or other costs
     associated with the acquisition or new construction of, an additional
     facility.

          "CONSOLIDATED SCHEDULED FUNDED DEBT PAYMENTS" means, as of the end of
     each fiscal quarter of the Consolidated Parties, for the Consolidated
     Parties on a consolidated 

                                      8

<PAGE>

     basis, the sum of all scheduled payments of principal on Funded 
     Indebtedness (other than Funded Indebtedness retired in connection with 
     the Recapitalization) for the applicable period ending on such date 
     (including the principal component of payments due on Capital Leases 
     during the applicable period ending on such date); it being understood 
     that Scheduled Funded Debt Payments shall not include voluntary 
     prepayments or the mandatory prepayments required pursuant to Section 
     3.3.

          "CONSOLIDATED TOTAL ASSETS" means, at any time, total assets of the
     Consolidated Parties on a consolidated basis at such time, as determined in
     accordance with GAAP.

          "Consolidated Working Capital" means, at any time, the excess of (a)
     the sum of all amounts (other than cash, Cash Equivalents and bank
     overdrafts) that would, in conformity with GAAP, be set forth opposite the
     caption "total current assets" (or any like caption) on a consolidated
     balance sheet of the Consolidated Parties at such time over (ii) the sum of
     all amounts that would, in conformity with GAAP, be set forth opposite the
     caption "total current liabilities" (or any like caption) on a consolidated
     balance sheet of the Consolidated Parties at such time, but excluding (a)
     the current portion of any Funded Indebtedness, and (b) the current portion
     of deferred income taxes.

          "CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
     continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
     Interest Period to the next Interest Period.

          "CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
     pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base
     Rate Loan into a Eurodollar Loan.

          "CREDIT DOCUMENTS" means a collective reference to this Credit
     Agreement, the Notes, the LOC Documents, each Joinder Agreement, the
     Agent's Fee Letter, the Collateral Documents and all other related
     agreements and documents issued or delivered hereunder or thereunder or
     pursuant hereto or thereto (in each case as the same may be amended,
     modified, restated, supplemented, extended, renewed or replaced from time
     to time), and "CREDIT DOCUMENT" means any one of them.

          "CREDIT PARTIES" means a collective reference to the Borrower and the
     Guarantors, and "CREDIT PARTY" means any one of them.

          "CREDIT PARTY OBLIGATIONS" means, without duplication, (i) all of the
     obligations of the Credit Parties to the Lenders (including the Issuing
     Lender) and the Agent, whenever arising, under this Credit Agreement, the
     Notes, the Collateral Documents or any of the other Credit Documents
     (including, but not limited to, any interest accruing after the occurrence
     of a Bankruptcy Event with respect to any Credit Party, regardless of
     whether such interest is an allowed claim under the Bankruptcy Code) and
     (ii) all liabilities and obligations, whenever arising, owing from the
     Borrower to any Lender, or any Affiliate of a Lender, arising under any
     Hedging Agreement.

                                      9

<PAGE>

          "DEBT ISSUANCE" means the issuance of any Indebtedness for borrowed
     money by any Consolidated Party.

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

          "DEFAULTING LENDER" means, at any time, any Lender that (a) has failed
     to make a Loan or purchase a Participation Interest required pursuant to
     the term of this Credit Agreement within one Business Day of when due, (b)
     other than as set forth in (a) above, has failed to pay to the Agent or any
     Lender an amount owed by such Lender pursuant to the terms of this Credit
     Agreement within one Business Day of when due, unless such amount is
     subject to a good faith dispute or (c) has been deemed insolvent or has
     become subject to a bankruptcy or insolvency proceeding or with respect to
     which (or with respect to any of assets of which) a receiver, trustee or
     similar official has been appointed.

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

          "DOMESTIC SUBSIDIARY" means, with respect to any Person, any
     Subsidiary of such Person which is incorporated or organized under the laws
     of any State of the United States or the District of Columbia.

          "EFFECTIVE DATE" means the date on which the conditions set forth in
     Section 5.2 to the making of the initial Loans and/or the issuance of the
     initial Letter of Credit, as applicable, shall have been fulfilled (or
     waived in the sole discretion of the Lenders) and on which the initial
     Loans shall have been made and/or the initial Letters of Credit shall have
     been issued.

          "ELIGIBLE ASSETS" means another business or any substantial part of
     another business or other long-term assets, in each case, in, or used or
     useful in, the same or a similar line of business as the Consolidated
     Parties were engaged in on the Closing Date or any reasonable extensions or
     expansions thereof.
     
          "ELIGIBLE ASSIGNEE" means (i) a Lender; (ii) an Affiliate of a Lender;
     and (iii) any other Person approved by the Agent and, unless an Event of
     Default has occurred and is continuing at the time any assignment is
     effected in accordance with Section 11.3, the Borrower (such approval not
     to be unreasonably withheld or delayed by the Borrower and such approval to
     be deemed given by the Borrower if no objection is received by the
     assigning Lender and the Agent from the Borrower within five Business Days
     after notice of such proposed assignment has been provided by the assigning
     Lender to the Borrower); PROVIDED, HOWEVER, that neither the Borrower nor
     an Affiliate of the Borrower shall qualify as an Eligible Assignee.

          "ENVIRONMENTAL LAWS" means any and all lawful and applicable Federal,
     state, local and foreign statutes, laws, regulations, ordinances, rules,
     judgments, orders, decrees, permits, concessions, grants, franchises,
     licenses, agreements or other governmental restrictions relating to the
     environment or to emissions, discharges, releases or threatened 

                                     10

<PAGE>

     releases of pollutants, contaminants, chemicals, or industrial, toxic or 
     hazardous substances or wastes into the environment including, without 
     limitation, ambient air, surface water, ground water, or land, or 
     otherwise relating to the manufacture, processing, distribution, use, 
     treatment, storage, disposal, transport, or handling of pollutants, 
     contaminants, chemicals, or industrial, toxic or hazardous substances or 
     wastes.
     
          "EQUITY ISSUANCE" means any issuance by any Consolidated Party to any
     Person which is not a Credit Party of (a) shares of its Capital Stock, (b)
     any shares of its Capital Stock pursuant to the exercise of options or
     warrants or (c) any shares of its Capital Stock pursuant to the conversion
     of any debt securities to equity.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
     amended, and any successor statute thereto, as interpreted by the rules and
     regulations thereunder, all as the same may be in effect from time to time.
     References to sections of ERISA shall be construed also to refer to any
     successor sections.

          "ERISA AFFILIATE" means an entity which is under common control with
     any Consolidated Party within the meaning of Section 4001(a)(14) of ERISA,
     or is a member of a group which includes the Borrower and which is treated
     as a single employer under Sections 414(b) or (c) of the Code.

          "ERISA EVENT" means (i) with respect to any Plan, the occurrence of a
     Reportable Event or the substantial cessation of operations (within the
     meaning of Section 4062(e) of ERISA); (ii) the withdrawal by any
     Consolidated Party or any ERISA Affiliate from a Multiple Employer Plan
     during a plan year in which it was a substantial employer (as such term is
     defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple
     Employer Plan; (iii) the distribution of a notice of intent to terminate or
     the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of
     ERISA; (iv) the institution of proceedings to terminate or the actual
     termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
     event or condition which might constitute grounds under Section 4042 of
     ERISA for the termination of, or the appointment of a trustee to
     administer, any Plan; (vi) the complete or partial withdrawal of any
     Consolidated Party or any ERISA Affiliate from a Multiemployer Plan; (vii)
     the conditions for imposition of a lien under Section 302(f) of ERISA exist
     with respect to any Plan; or (vii) the adoption of an amendment to any Plan
     requiring the provision of security to such Plan pursuant to Section 307 of
     ERISA.

          "EURODOLLAR LOAN" means any Loan that bears interest at a rate based
     upon the Eurodollar Rate.

          "EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest
     Period therefor, the rate per annum (rounded upwards, if necessary, to the
     nearest 1/100 of 1%) determined by the Agent to be equal to the quotient
     obtained by dividing (a) the Interbank Offered Rate for such Eurodollar
     Loan for such Interest Period by (b) 1 minus the Eurodollar Reserve
     Requirement for such Eurodollar Loan for such Interest Period.

                                     11

<PAGE>

          "EURODOLLAR RESERVE REQUIREMENT" means, at any time, the maximum rate
     at which reserves (including, without limitation, any marginal, special,
     supplemental, or emergency reserves) are required to be maintained under
     regulations issued from time to time by the Board of Governors of the
     Federal Reserve System (or any successor) by member banks of the Federal
     Reserve System against "Eurocurrency liabilities" (as such term is used in
     Regulation D).  Without limiting the effect of the foregoing, the
     Eurodollar Reserve Requirement shall reflect any other reserves required to
     be maintained by such member banks with respect to (i) any category of
     liabilities which includes deposits by reference to which the Adjusted
     Eurodollar Rate is to be determined, or (ii) any category of extensions of
     credit or other assets which include Eurodollar Loans.  The Adjusted
     Eurodollar Rate shall be adjusted automatically on and as of the effective
     date of any change in the Eurodollar Reserve Requirement.

          "EVENT OF DEFAULT" means such term as defined in Section 9.1.

          "EXCESS CASH FLOW" means, with respect to any fiscal year period of
     the Consolidated Parties on a consolidated basis, an amount equal to (a)
     Consolidated EBITDA for such period MINUS (b) Consolidated Capital
     Expenditures for such period MINUS (c) Consolidated Cash Interest Expense
     for such period MINUS (d) Federal, state and other income taxes actually
     paid by the Consolidated Parties on a consolidated basis during such period
     MINUS (e) Consolidated Scheduled Funded Debt Payments made during such
     period MINUS (f) total consideration (including any assumption of
     liabilities (other than current working capital liabilities not
     constituting Indebtedness), but excluding consideration consisting of any
     Capital Stock of the Borrower), fees and expenses actually paid by the
     Consolidated Parties on a consolidated basis in connection with Permitted
     Acquisitions during such period PLUS/MINUS (g) changes in Consolidated
     Working Capital for such period.
     
          "EXCLUDED ASSET DISPOSITION" means any Asset Disposition by any
     Consolidated Party to any Credit Party if (a) the Credit Parties shall
     cause to be executed and delivered such documents, instruments and
     certificates as the Agent may request so as to cause the Credit Parties to
     be in compliance with the terms of Section 7.13 after giving effect to such
     Asset Disposition and (b) after giving effect such Asset Disposition, no
     Default or Event of Default exists.

          "EXCLUDED EQUITY ISSUANCE" means (1) any Asset Disposition and (2) any
     Equity Issuance to the Sponsor or GE, including without limitation the
     issuance and sale by the Borrower of preferred capital stock pursuant to
     Section 2.1 of the GE Investment Agreement or Section 2.1 of the Sponsor
     Investment Agreement.

          "EXECUTIVE OFFICER" of any Person means any of the chief executive
     officer, chief operating officer, president, vice president, chief
     financial officer or treasurer of such Person.
     
          "FEES" means all fees payable pursuant to Section 3.5.

                                     12

<PAGE>

          "FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
     upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted
     average of the rates on overnight Federal funds transactions with members
     of the Federal Reserve System arranged by Federal funds brokers on such
     day, as published by the Federal Reserve Bank of New York on the Business
     Day next succeeding such day; PROVIDED that (a) if such day is not a
     Business Day, the Federal Funds Rate for such day shall be such rate on
     such transactions on the next preceding Business Day as so published on the
     next succeeding Business Day, and (b) if no such rate is so published on
     such next succeeding Business Day, the Federal Funds Rate for such day
     shall be the average rate charged to the Agent (in its individual capacity)
     on such day on such transactions as determined by the Agent.

          "FIXED CHARGE COVERAGE RATIO" means, as of the end of any fiscal
     quarter of the Consolidated Parties for the twelve month period ending on
     such date, the ratio of (a) Consolidated EBITDAR for the applicable period
     MINUS Consolidated Restricted Capital Expenditures for the applicable
     period MINUS Consolidated Cash Taxes for the applicable period to (b)
     Consolidated Cash Interest Expense for the applicable period PLUS
     Consolidated Scheduled Funded Debt Payments for the applicable period PLUS
     Consolidated Rental Expense for the applicable period.

          "FOREIGN SUBSIDIARY" means, with respect to any Person, any Subsidiary
     of such Person which is not a Domestic Subsidiary of such Person.

          "FUNDED INDEBTEDNESS" means, with respect to any Person, without
     duplication, (a) all Indebtedness of such Person other than Indebtedness of
     the types referred to in clause (e), (f), (g), (i), (k) and (m) of the
     definition of "Indebtedness" set forth in this Section 1.1, (b) all
     Indebtedness of another Person of the type referred to in clause (a) above
     secured by (or for which the holder of such Funded Indebtedness has an
     existing right, contingent or otherwise, to be secured by) any Lien on, or
     payable out of the proceeds of production from, Property owned or acquired
     by such Person, whether or not the obligations secured thereby have been
     assumed, (c) all Guaranty Obligations of such Person with respect to
     Indebtedness of the type referred to in clause (a) above of another Person
     and (d) Indebtedness of the type referred to in clause (a) above of any
     partnership or unincorporated joint venture in which such Person is legally
     obligated or has a reasonable expectation of being liable with respect
     thereto.

          "GAAP" means generally accepted accounting principles in the United
     States applied on a consistent basis and subject to the terms of Section
     1.3.

          "GE" means General Electric Company, a New York corporation, and its
     Affiliates.

          "GE INVESTMENT AGREEMENT" means that certain Securities Purchase
     Agreement dated as of October 14, 1997 by and among GE and the Borrower.

          "GE Payoff Letter" means the payoff letter dated October 14, 1997
     delivered by GE to the Borrower and pursuant to which and GE agrees to
     terminate the Master Debt Restructuring Agreement upon payment by the
     Borrower to GE of certain indebtedness 

                                     13

<PAGE>

     owing by the Borrower to GE as of the date of such letter, all on the 
     terms set forth more fully therein.

          "GE REGISTRATION RIGHTS AGREEMENT" means that certain Registration
     Rights Agreement dated as of a date on or before the Effective Date by and
     between the Borrower and GE.

          "GE WARRANT AGREEMENT" means that certain Warrant Agreement dated as
     of a date on or before the Effective Date by and between the Borrower and
     GE.

          "GOVERNMENTAL AUTHORITY" means any Federal, state, local or foreign
     court or governmental agency, authority, instrumentality or regulatory
     body.

          "GUARANTOR" means each of the Persons identified as a "Guarantor" on
     the signature pages hereto and each Additional Credit Party which may
     hereafter execute a Joinder Agreement, together with their successors and
     permitted assigns, and "GUARANTOR" means any one of them

          "GUARANTY OBLIGATIONS" means, with respect to any Person, without
     duplication, any obligations of such Person (other than endorsements in the
     ordinary course of business of negotiable instruments for deposit or
     collection) guaranteeing or intended to guarantee any Indebtedness of any
     other Person in any manner, whether direct or indirect, and including
     without limitation any obligation, whether or not contingent, (i) to
     purchase any such Indebtedness or any Property constituting security
     therefor, (ii) to advance or provide funds or other support for the payment
     or purchase of any such Indebtedness or to maintain working capital,
     solvency or other balance sheet condition of such other Person (including
     without limitation keep well agreements, maintenance agreements, comfort
     letters or similar agreements or arrangements) for the benefit of any
     holder of Indebtedness of such other Person, (iii) to lease or purchase
     Property, securities or services primarily for the purpose of assuring the
     holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
     the holder of such Indebtedness against loss in respect thereof.  The
     amount of any Guaranty Obligation hereunder shall (subject to any
     limitations set forth therein) be deemed to be an amount equal to the
     outstanding principal amount (or maximum principal amount, if larger) of
     the Indebtedness in respect of which such Guaranty Obligation is made.

          "HEDGING AGREEMENTS" means any interest rate protection agreement or
     foreign currency exchange agreement between any Consolidated Party and any
     Lender, or any Affiliate of a Lender.

          "INDEBTEDNESS" means, with respect to any Person, without duplication,
     (a) all obligations of such Person for borrowed money, (b) all obligations
     of such Person evidenced by bonds, debentures, notes or similar
     instruments, or upon which interest payments are customarily made, (c) all
     obligations of such Person under conditional sale or other title retention
     agreements relating to Property purchased by such Person (other than
     customary reservations or retentions of title under agreements with
     suppliers entered into in the ordinary course of business), (d) all
     obligations of such Person issued or assumed as the 


                                       14

<PAGE>

     deferred purchase price of Property or services purchased by such Person 
     (other than trade debt incurred in the ordinary course of business and 
     due within six months of the incurrence thereof) which would appear as 
     liabilities on a balance sheet of such Person, (e) all obligations of 
     such Person under take-or-pay or similar arrangements or under 
     commodities agreements, (f) all Indebtedness of others secured by (or 
     for which the holder of such Indebtedness has an existing right, 
     contingent or otherwise, to be secured by) any Lien on, or payable out 
     of the proceeds of production from, Property owned or acquired by such 
     Person, whether or not the obligations secured thereby have been 
     assumed, (g) all Guaranty Obligations of such Person, (h) the principal 
     portion of all obligations of such Person under Capital Leases, (i) all 
     obligations of such Person under Hedging Agreements, (j) the maximum 
     amount of all standby letters of credit issued or bankers' acceptances 
     facilities created for the account of such Person and, without 
     duplication, all drafts drawn thereunder (to the extent unreimbursed), 
     (k) all preferred Capital Stock issued by such Person and required by 
     the terms thereof to be redeemed, or for which mandatory sinking fund 
     payments are due, by a fixed date occurring prior to the Maturity Date 
     for the Tranche B Term Loan, (l) the principal portion of all 
     obligations of such Person under Synthetic Leases, (m) for purposes of 
     any calculation made under the financial covenants set forth in Section 
     7.11 (including without limitation for purposes of the definitions of 
     "Applicable Percentage" and "Pro Forma Basis" set forth in Section 1.1), 
     the Indebtedness of any partnership or unincorporated joint venture in 
     which such Person is a general partner or a joint venturer, (n) in the 
     case of the Consolidated Parties for purposes of any calculation made 
     under the financial covenants set forth in Section 7.11 (including 
     without limitation for purposes of the definitions of "Applicable 
     Percentage" and "Pro Forma Basis" set forth in Section 1.1) as of the 
     end of any fiscal quarter of the Consolidated Parties, the Indebtedness 
     of any Person whose results of operations would, in accordance with 
     GAAP, be included in earnings of unconsolidated Persons on an income 
     statement of the Consolidated Parties for any period ending on such 
     fiscal quarter-end.

          "INTERBANK OFFERED RATE" means, for any Eurodollar Loan for any 
     Interest Period therefor, the rate per annum (rounded upwards, if 
     necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 
     (or any successor page) as the London interbank offered rate for 
     deposits in Dollars at approximately 11:00 a.m. (London time) two 
     Business Days prior to the first day of such Interest Period for a term 
     comparable to such Interest Period. If for any reason such rate is not 
     available, the term "Interbank Offered Rate" shall mean, for any 
     Eurodollar Loan for any Interest Period therefor, the rate per annum 
     (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on 
     Reuters Screen LIBO Page as the London interbank offered rate for 
     deposits in Dollars at approximately 11:00 a.m. (London time) two 
     Business Days prior to the first day of such Interest Period for a term 
     comparable to such Interest Period; PROVIDED, HOWEVER, if more than one 
     rate is specified on Reuters Screen LIBO Page, the applicable rate shall 
     be the arithmetic mean of all such rates (rounded upwards, if necessary, 
     to the nearest 1/100 of 1%).

          "INTEREST COVERAGE RATIO" means, as of the end of any fiscal 
     quarter of the Consolidated Parties for the twelve month period ending 
     on such date, the ratio of (a) Consolidated EBITDA for such period to 
     (b) Consolidated Cash Interest Expense for such period.


                                       15

<PAGE>

          "INTEREST PAYMENT DATE" means (a) as to Base Rate Loans, the last 
     day of each fiscal quarter of the Borrower and the Maturity Date, and 
     (b) as to Eurodollar Loans, the last day of each applicable Interest 
     Period and the Maturity Date, and in addition where the applicable 
     Interest Period for a Eurodollar Loan is greater than three months, then 
     also the date three months from the beginning of the Interest Period and 
     each three months thereafter.

          "INTEREST PERIOD" means, as to Eurodollar Loans, a period of one, 
     two, three or six months' duration, as the Borrower may elect, 
     commencing, in each case, on the date of the borrowing (including 
     continuations and conversions thereof); PROVIDED, HOWEVER, (a) if any 
     Interest Period would end on a day which is not a Business Day, such 
     Interest Period shall be extended to the next succeeding Business Day 
     (except that where the next succeeding Business Day falls in the next 
     succeeding calendar month, then on the next preceding Business Day), (b) 
     no Interest Period shall extend beyond the Maturity Date, (c) with 
     regard to the Acquisition Loans, no Interest Period shall extend beyond 
     any Principal Amortization Payment Date unless the portion of 
     Acquisition Loans comprised of Base Rate Loans together with the portion 
     of Acquisition Loans comprised of Eurodollar Loans with Interest Periods 
     expiring prior to the date such Principal Amortization Payment is due, 
     is at least equal to the amount of such Principal Amortization Payment 
     due on such date, (d) with regard to the Tranche A Term Loans, no 
     Interest Period shall extend beyond any Principal Amortization Payment 
     Date unless the portion of Tranche A Term Loans comprised of Base Rate 
     Loans together with the portion of Tranche A Term Loans comprised of 
     Eurodollar Loans with Interest Periods expiring prior to the date such 
     Principal Amortization Payment is due, is at least equal to the amount 
     of such Principal Amortization Payment due on such date, (e) with regard 
     to the Tranche B Term Loans, no Interest Period shall extend beyond any 
     Principal Amortization Payment Date unless the portion of Tranche B Term 
     Loans comprised of Base Rate Loans together with the portion of Tranche 
     B Term Loans comprised of Eurodollar Loans with Interest Periods 
     expiring prior to the date such Principal Amortization Payment is due, 
     is at least equal to the amount of such Principal Amortization Payment 
     due on such date and (f) where an Interest Period begins on a day for 
     which there is no numerically corresponding day in the calendar month in 
     which the Interest Period is to end, such Interest Period shall end on 
     the last Business Day of such calendar month.

          "INVESTMENT" in any Person means (a) the acquisition (whether for 
     cash, property, services, assumption of Indebtedness, securities or 
     otherwise) of assets, shares of Capital Stock, bonds, notes, debentures, 
     partnership, joint ventures or other ownership interests or other 
     securities of such other Person or (b) any deposit with, or advance, 
     loan or other extension of credit to, such Person (other than deposits 
     made in connection with the purchase of equipment or other assets in the 
     ordinary course of business) or (c) any other capital contribution to or 
     investment in such Person, including, without limitation, any Guaranty 
     Obligations (including any support for a letter of credit issued on 
     behalf of such Person) incurred for the benefit of such Person, but 
     excluding any Restricted Payment to such Person.


                                       16

<PAGE>

          "INVESTMENT AGREEMENTS" means a collective reference to the GE 
     Investment Agreement and the Sponsor Investment Agreement.

          "INVESTMENT DOCUMENTS" means a collective reference to the 
     Investment Agreements, the Registration Rights Agreements, the Warrant 
     Agreements and the Certificates of Designation.

          "ISSUING LENDER" means NationsBank.

          "ISSUING LENDER FEES" shall have the meaning assigned to such term 
     in Section 3.5(b)(ii).

          "JOINDER AGREEMENT" means a Joinder Agreement substantially in the 
     form of EXHIBIT 7.12 hereto, executed and delivered by an Additional 
     Credit Party in accordance with the provisions of Section 7.12.

          "JOINT VENTURE" means an entity which meets the following criteria:

                      (a)     it was organized pursuant to an express joint 
          venture, partnership or limited liability company agreement;

                      (b)     it is a venture among two or more Persons and, 
          except for purposes of the definition of "Indebtedness" set forth 
          in this Section 1.1, at least one of such Persons is, and one of 
          such Persons is not, the Borrower or a Wholly Owned Subsidiary of 
          the Borrower;

                      (c)     it operates a business for profit in which 
          there is a joint proprietary interest in the subject matter;

                      (d)     the venture involves a right of mutual control 
          of the subject of the enterprise;

                      (e)     each of the venturers has contributed or will 
          contribute capital, materials, services or knowledge;

                      (f)     each of the venturers has a right to share in 
          the profits of the venture; and

                      (g)     each of the venturers has a duty to share in 
          the losses of the venture.

          The term "Joint Venture" shall in any event include the Persons 
     identified on SCHEDULE 1.1B.

          "LENDER" means any of the Persons identified as a "Lender" on the 
     signature pages hereto, and any Person which may become a Lender by way 
     of assignment in accordance with the terms hereof, together with their 
     successors and permitted assigns.


                                       17

<PAGE>

          "LETTER OF CREDIT" means any letter of credit issued by the Issuing 
     Lender for the account of the Borrower in accordance with the terms of 
     Section 2.2.

          "LEVERAGE RATIO" means, as of the end of any fiscal quarter of the 
     Consolidated Parties for the twelve month period ending on such date, 
     the ratio of (a) all Funded Indebtedness (including without limitation 
     Subordinated Indebtedness) of the Consolidated Parties on a consolidated 
     basis on the last day of such period to (b) Consolidated EBITDA for such 
     period.

          "LIEN" means any mortgage, pledge, hypothecation, assignment, 
     deposit arrangement, security interest, encumbrance, lien (statutory or 
     otherwise), preference, priority or charge of any kind (including any 
     agreement to give any of the foregoing, any conditional sale or other 
     title retention agreement, any financing or similar statement or notice 
     filed under the Uniform Commercial Code as adopted and in effect in the 
     relevant jurisdiction or other similar recording or notice statute, and 
     any lease in the nature thereof); PROVIDED, HOWEVER, the term "Lien" in 
     respect of any Property of any Person shall not include any interest of 
     title of a lessor (or any related filing) under any Operating Lease of 
     such Property under which such Person is the lessee.

          "LOAN" or "LOANS" means the Revolving Loans, the Acquisition Loans, 
     the Tranche A Term Loans and/or the Tranche B Term Loans (or a portion 
     of any Revolving Loan, any Acquisition Loan, any Tranche A Term Loan or 
     Tranche B Term Loan bearing interest at the Adjusted Base Rate or the 
     Adjusted Eurodollar Rate), individually or collectively, as appropriate.

          "LOC COMMITMENT" means the commitment of the Issuing Lender to 
     issue Letters of Credit in an aggregate face amount at any time 
     outstanding (together with the amounts of any unreimbursed drawings 
     thereon) of up to the LOC Committed Amount.

          "LOC COMMITTED AMOUNT" shall have the meaning assigned to such term 
     in Section 2.2.

          "LOC DOCUMENTS" means, with respect to any Letter of Credit, such 
     Letter of Credit, any amendments thereto, any documents delivered in 
     connection therewith, any application therefor, and any agreements, 
     instruments, guarantees or other documents (whether general in 
     application or applicable only to such Letter of Credit) governing or 
     providing for (i) the rights and obligations of the parties concerned or 
     at risk or (ii) any collateral security for such obligations.

          "LOC OBLIGATIONS" means, at any time, the sum of (i) the maximum 
     amount which is, or at any time thereafter may become, available to be 
     drawn under Letters of Credit then outstanding, assuming compliance with 
     all requirements for drawings referred to in such Letters of Credit PLUS 
     (ii) the aggregate amount of all drawings under Letters of Credit 
     honored by the Issuing Lender but not theretofore reimbursed by the 
     Borrower.


                                       18

<PAGE>

          "MASTER DEBT RESTRUCTURING AGREEMENT" means that certain Master 
     Debt Restructuring Agreement dated as of June 26, 1996 by and among GE, 
     the Borrower, American Health Services Corp., Maxum Health Corp. and 
     certain subsidiaries of Maxum Health Corp., as amended through the 
     Closing Date.

          "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) 
     the condition (financial or otherwise), operations, business, assets, 
     liabilities or prospects of the Consolidated Parties taken as a whole, 
     (ii) the ability of the Credit Parties taken as a whole to perform any 
     material obligation under the Credit Documents or (iii) the material 
     rights and remedies of the Lenders under the Credit Documents.

          "MATURITY DATE" means (i) as to the Revolving Loans, Letters of 
     Credit (and the related LOC Obligations) and the Tranche A Term Loan, 
     October 14, 2002, (ii) as to the Acquisition Loans, October 14, 2003 and 
     (iii) as to the Tranche B Term Loan, October 14, 2004.

          "MOODY'S" means Moody's Investors Service, Inc., or any successor 
     or assignee of the business of such company in the business of rating 
     securities.

          "MORTGAGE INSTRUMENTS" shall have the meaning assigned such term in 
     Section 5.2(c).

          "MORTGAGE POLICIES" shall have the meaning assigned such term in 
     Section 5.2(c).
          
          "MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as 
     defined in Sections 3(37) or 4001(a)(3) of ERISA.

          "MULTIPLE EMPLOYER PLAN" means a Plan which any Consolidated Party 
     or any ERISA Affiliate and at least one employer other than the 
     Consolidated Parties or any ERISA Affiliate are contributing sponsors.

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

          "NET CASH PROCEEDS" means the aggregate cash proceeds received by 
     the Consolidated Parties in respect of any Asset Disposition, Equity 
     Issuance or Debt Issuance, net of  (a) direct costs (including, without 
     limitation, legal, accounting and investment banking fees, and sales 
     commissions) and (b) taxes paid or payable as a result thereof; it being 
     understood that "Net Cash Proceeds" shall include, without limitation, 
     any cash received upon the sale or other disposition of any non-cash 
     consideration received by the Consolidated Parties in any Asset 
     Disposition, Equity Issuance or Debt Issuance.

          "NEW COMMITMENT AGREEMENT" means such term as is defined in Section 
     3.4(b).

          "NOTE" or "NOTES" means the Revolving Notes, the Acquisition Notes, 
     the Tranche A Term Notes and/or the Tranche B Term Notes, individually 
     or collectively, as appropriate.


                                       19

<PAGE>

          "NOTICE OF BORROWING" means a written notice of borrowing in 
     substantially the form of EXHIBIT 2.1(b)(i), as required by Section 
     2.1(b)(i), Section 2.3(b)(i), Section 2.4(b) or Section 2.5(b).

          "NOTICE OF EXTENSION/CONVERSION" means the written notice of 
     extension or conversion in substantially the form of EXHIBIT 3.2, as 
     required by Section 3.2.

          "OPERATING LEASE" means, as applied to any Person, any lease 
     (including, without limitation, leases which may be terminated by the 
     lessee at any time) of any Property (whether real, personal or mixed) 
     which is not a Capital Lease other than any such lease in which that 
     Person is the lessor.

          "OPEN MRI" means Open MRI, a Delaware corporation and a Wholly 
     Owned Subsidiary of the Borrower.

          "OTHER TAXES" means such term as is defined in Section 3.11.

          "PARTICIPATION INTEREST" means a purchase by a Lender of a 
     participation in Letters of Credit or LOC Obligations as provided in 
     Section 2.2 or in any Loans as provided in Section 3.14.

          "PBGC" means the Pension Benefit Guaranty Corporation established 
     pursuant to Subtitle A of Title IV of ERISA and any successor thereof.

          "PERMITTED ACQUISITION" means an Acquisition by the Borrower or any 
     Wholly Owned Subsidiary of the Borrower for the fair market value of the 
     Capital Stock or Property acquired, PROVIDED that (i) the Capital Stock 
     or Property acquired in such Acquisition relates to a line of business 
     similar to the business of the Borrower or any of its Wholly Owned 
     Subsidiaries engaged in on the Closing Date, (ii) the Agent shall have 
     received all items in respect of the Capital Stock or Property acquired 
     in such Acquisition (and/or the seller thereof) required to be delivered 
     by the terms of Section 7.12 and/or Section 7.13, (iii) in the case of 
     an Acquisition of the Capital Stock of another Person, the board of 
     directors (or other comparable governing body) of such other Person 
     shall have duly approved such Acquisition, (iv) the Borrower shall have 
     delivered to the Agent a Pro Forma Compliance Certificate demonstrating 
     that, upon giving effect to such Acquisition on a Pro Forma Basis, the 
     Credit Parties shall be in compliance with all of the covenants set 
     forth in Section 7.11, (v) the representations and warranties made by 
     the Credit Parties in any Credit Document shall be true and correct in 
     all material respects at and as if made as of the date of such 
     Acquisition (after giving effect thereto) except to the extent such 
     representations and warranties expressly relate to an earlier date, (vi) 
     if the aggregate consideration (including any assumption of liabilities 
     (other than current working capital liabilities not constituting 
     Indebtedness), but excluding consideration consisting of any Capital 
     Stock of the Borrower) for any such transaction is greater than 
     $7,500,000, then the Required Lenders shall have approved such 
     transaction, (vii) if such transaction involves the purchase of an 
     interest in a partnership between the Borrower (or a subsidiary of the 


                                       20

<PAGE>

     Borrower) as a general partner and entities unaffiliated with the 
     Borrower as the other partners, such transaction shall be effected by 
     having such equity interest acquired by a corporate holding company 
     directly wholly-owned by the Borrower newly formed for the sole purpose 
     of effecting such transaction and (viii) after giving effect to such 
     Acquisition, the Revolving Committed Amount shall be at least $5,000,000 
     greater than the sum of the Revolving Loans outstanding PLUS LOC 
     Obligations outstanding].

          "PERMITTED CAPITAL EXPENDITURE" means any capital expenditure by 
     the Borrower or any Wholly Owned Subsidiary of the Borrower, PROVIDED 
     that (i) such capital expenditure shall represent the purchase price of 
     equipment, or the costs of construction or purchase price, for, or other 
     costs associated with the acquisition or new construction of, an 
     additional facility, (ii) such capital expenditure shall have been 
     approved by the Required Lenders and (iii) the aggregate principal 
     amount of all Acquisition Loans used to finance capital expenditures 
     shall not exceed 20% of the Acquisition Loan Committed Amount.

          "PERMITTED INVESTMENTS" means Investments which are either (i) cash 
     and Cash Equivalents; (ii) accounts receivable created, acquired or made 
     by any Consolidated Party in the ordinary course of business and payable 
     or dischargeable in accordance with customary trade terms; (iii) 
     Investments consisting of Capital Stock, obligations, securities or 
     other property received by any Consolidated Party in settlement of 
     accounts receivable (created in the ordinary course of business) from 
     bankrupt obligors; (iv) Investments existing as of the Closing Date and 
     set forth in SCHEDULE 1.1B; (v) Guaranty Obligations permitted by 
     Section 8.1; (vi) transactions permitted by Section 8.9; (vii) advances 
     or loans to directors, officers, employees, agents, customers or 
     suppliers made in the ordinary course of business for reasonable 
     business and which do not exceed $1,000,000 in the aggregate at any one 
     time outstanding for all of the Consolidated Parties; (viii) Investments 
     in any Credit Party; (ix) Permitted Acquisitions; and (x) Investments in 
     Joint Ventures not to exceed $5,000,000.

          "PERMITTED LIENS" means:

          (i)    Liens in favor of the Agent to secure the Credit Party 
     Obligations;

          (ii)   Liens (other than Liens created or imposed under ERISA) for 
     taxes, assessments or governmental charges or levies not yet due or 
     Liens for taxes being contested in good faith by appropriate proceedings 
     for which adequate reserves determined in accordance with GAAP have been 
     established (and as to which the Property subject to any such Lien is 
     not yet subject to foreclosure, sale or loss on account thereof);

          (iii)  statutory Liens of landlords and Liens of carriers, 
     warehousemen, mechanics, materialmen and suppliers and other Liens 
     imposed by law or pursuant to customary reservations or retentions of 
     title arising in the ordinary course of business, PROVIDED that such 
     Liens secure only amounts not yet due and payable or, if due and 
     payable, are unfiled and no other action has been taken to enforce the 
     same or are being contested in good faith by appropriate proceedings for 
     which adequate reserves determined 


                                       21

<PAGE>

     in accordance with GAAP have been established (and as to which the 
     Property subject to any such Lien is not yet subject to foreclosure, 
     sale or loss on account thereof);

          (iv)   Liens (other than Liens created or imposed under ERISA) 
     incurred or deposits made by any Consolidated Party in the ordinary 
     course of business in connection with workers' compensation, 
     unemployment insurance and other types of social security, or to secure 
     the performance of tenders, statutory obligations, bids, leases, 
     government contracts, performance and return-of-money bonds and other 
     similar obligations (exclusive of obligations for the payment of 
     borrowed money);

          (v)    Liens in connection with attachments or judgments (including 
     judgment or appeal bonds) PROVIDED that the judgments secured shall, 
     within 60 days after the entry thereof, have been discharged or 
     execution thereof stayed pending appeal, or shall have been discharged 
     within 60 days after the expiration of any such stay;

          (vi)   easements, rights-of-way, restrictions (including zoning 
     restrictions), minor defects or irregularities in title and other 
     similar charges or encumbrances not, in any material respect, impairing 
     the use of the encumbered Property for its intended purposes;

          (vii)  Liens on Property securing purchase money Indebtedness 
     (including Capital Leases and Synthetic Leases) to the extent permitted 
     under Section 8.1(c), PROVIDED that any such Lien attaches to such 
     Property concurrently with or within 90 days after the acquisition 
     thereof;

          (viii) leases or subleases granted to others not interfering in any 
     material respect with the business of any Consolidated Party;

          (ix)   any interest of title of a lessor under, and Liens arising 
     from UCC financing statements (or equivalent filings, registrations or 
     agreements in foreign jurisdictions) relating to, leases permitted by 
     this Credit Agreement;

          (x)    Liens deemed to exist in connection with Investments in 
     repurchase agreements permitted under Section 8.6;

          (xi)   normal and customary rights of setoff upon deposits of cash in
     favor of banks or other depository institutions; 

          (xiii) Liens existing as of the Closing Date and set forth on 
     SCHEDULE 1.1C; PROVIDED that no such Lien shall at any time be extended 
     to or cover any Property other than the Property subject thereto on the 
     Closing Date (other than a substitution of like Property); 

          (xiv)  Liens on any Property owned by any Subsidiary of the 
     Borrower which is a Joint Venture;

          (xv)   extensions, renewals or replacements of Liens referred 
     to in clause (i) through (xv) above.


                                       22

<PAGE>

          "PERSON" means any individual, partnership, joint venture, firm, 
     corporation, limited liability company, association, trust or other 
     enterprise (whether or not incorporated) or any Governmental Authority.

          "PLAN" means any employee benefit plan (as defined in Section 3(3) 
     of ERISA) which is covered by ERISA and with respect to which any 
     Consolidated Party or any ERISA Affiliate is (or, if such plan were 
     terminated at such time, would under Section 4069 of ERISA be deemed to 
     be) an "employer" within the meaning of Section 3(5) of ERISA.

          "PRIMARY REAL PROPERTIES" shall have the meaning assigned such term 
     in Section 7.16.

          "PLEDGE AGREEMENT" means the pledge agreement dated as of the 
     Closing Date in the form of EXHIBIT 1.1A to be executed in favor of the 
     Agent by each of the Credit Parties, as amended, modified, restated or 
     supplemented from time to time.

          "PRIME RATE" means the per annum rate of interest established from 
     time to time by NationsBank as its prime rate, which rate may not be the 
     lowest rate of interest charged by NationsBank to its customers.

          "PRINCIPAL AMORTIZATION PAYMENT" means a principal payment on the 
     Acquisition Loans as set forth in Section 2.3(c), on the Tranche A Term 
     Loans as set forth in Section 2.4(d) or on the Tranche B Term Loans as 
     set forth in Section 2.5(d).

          "PRINCIPAL AMORTIZATION PAYMENT DATE" means the date a Principal 
     Amortization Payment is due.

          "PRINCIPAL OFFICE" means the principal office of NationsBank, 
     presently located at Charlotte, North Carolina.

          "PRO FORMA BASIS" means, with respect to any transaction, that such 
     transaction shall be deemed to have occurred (for purposes of 
     calculating compliance in respect of such transaction with each of the 
     financial covenants set forth in Section 7.11 as of the most recent 
     fiscal quarter end preceding the date of such transaction with respect 
     to which the Agent has received the Required Financial Information) as 
     of the first day of the four fiscal-quarter period ending as of such 
     fiscal quarter end. As used herein, "TRANSACTION" shall mean (i) any 
     incurrence or assumption of Indebtedness as referred to in Section 
     8.1(f), (ii) any merger or consolidation as referred to in Section 8.4, 
     (iii) any Asset Disposition as referred to in Section 8.5 or (iv) any 
     Permitted Acquisition as referred to in Section 8.6 and clause (ix) of 
     the definition of "PERMITTED INVESTMENT" set forth in this Section 1.1.  
     With respect to any transaction of 


                                       23

<PAGE>

     the type described in clause (i) above regarding Indebtedness which has 
     a floating or formula rate, the implied rate of interest for such 
     Indebtedness for the applicable period for purposes of this definition 
     shall be determined by utilizing the rate which is or would be in effect 
     with respect to such Indebtedness as at the relevant date of 
     determination.  With respect to any transaction of the type described in 
     clause (ii) or (iv) above, any Indebtedness incurred by the Borrower or 
     any of its Subsidiaries in order to consummate such transaction (A) 
     shall be deemed to have been incurred on the first day of the applicable 
     period four fiscal-quarter period and (B) if such Indebtedness has a 
     floating or formula rate, then the implied rate of interest for such 
     Indebtedness for the applicable period for purposes of this definition 
     shall be determined by utilizing the rate which is or would be in effect 
     with respect to such Indebtedness as at the relevant date of 
     determination.  In connection with any calculation of the financial 
     covenants set forth in Section 7.11 upon giving effect to a transaction 
     on a Pro Forma Basis for purposes of Section 8.1(f), Section 8.4, 
     Section 8.5 or Section 8.6 and clause (ix) of the definition of 
     "PERMITTED INVESTMENT" set forth in this Section 1.1, as applicable:

               (A) for purposes of any such calculation in respect of any 
          incurrence or assumption of Indebtedness as referred to in Section 
          8.1(f), any Indebtedness which is retired in connection with such 
          incurrence or assumption shall be excluded and deemed to have been 
          retired as of the first day of the applicable period;

               (B) for purposes of any such calculation in respect of any 
          Asset Disposition as referred to in Section 8.5, (1) income 
          statement items (whether positive or negative) attributable to the 
          Property disposed of in such Asset Disposition shall be excluded 
          and (2) any Indebtedness which is retired in connection with such 
          Asset Disposition shall be excluded and deemed to have been retired 
          as of the first day of the applicable period;

               (C) for purposes of any such calculation in respect of any 
          merger or consolidation as referred to in Section 8.4 or any 
          Permitted Acquisition as referred to in Section 8.6 and clause (ix) 
          of the definition of "PERMITTED INVESTMENT" set forth in this 
          Section 1.1, (1) any Indebtedness incurred by the Borrower or any 
          of its Subsidiaries in connection with such transaction shall be 
          deemed to have been incurred as of the first day of the applicable 
          period and (2) income statement items (whether positive or 
          negative) attributable to the Property acquired in such transaction 
          or to the Investment comprising such transaction, as applicable, 
          shall be included to the extent relating to the relevant period; and

               (D) for purposes of any such calculation, the principles set 
          forth in the second paragraph of Section 1.3 shall be applicable.

          "PRO FORMA COMPLIANCE CERTIFICATE" means a certificate of the chief 
     financial officer of the Borrower delivered to the Agent in connection 
     with (i) any incurrence, assumption or retirement of Indebtedness as 
     referred to in Section 8.1(f), (ii) any merger or consolidation as 
     referred to in Section 8.4, (iii) any Asset Disposition as referred to 
     in Section 8.5 or (iv) any Permitted Acquisition as referred to in 
     Section 8.6 and clause (ix) of the definition of "PERMITTED INVESTMENT" 
     set forth in this Section 1.1, as applicable, and containing reasonably 
     detailed calculations, upon giving effect to the applicable transaction 
     on a Pro Forma Basis, of the Interest Coverage Ratio, the Fixed Charge 


                                       24

<PAGE>

     Coverage Ratio, the Leverage Ratio and the minimum Consolidated EBITDA 
     covenant as of the most recent fiscal quarter end preceding the date of 
     the applicable transaction with respect to which the Agent shall have 
     received the Required Financial Information.

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

          "REAL PROPERTIES" shall have the meaning assigned such term in 
     Section 7.16.

          "RECAPITALIZATION" means the recapitalization of the Borrower 
     pursuant to and as evidenced by the terms of the Investment Documents 
     (including without limitation the making by the Sponsor of a preferred 
     equity investment of at least $25 million in cash (less fees and 
     expenses) in the Borrower and the termination of the Supplemental 
     Service Fee (as defined in the GE Investment Agreement) in exchange for 
     7,000 shares of Series C Preferred Stock in the Borrower) pursuant to 
     the GE Investment Agreement, the refinancing of the existing Funded 
     Indebtedness of the Borrower described on SCHEDULE 6.15 in an aggregate 
     principal amount not to exceed $80 million (plus per diem interest on 
     such principal amount), the termination of the Master Debt Restructuring 
     Agreement pursuant to the terms of the GE Payoff Letter. 

          "REGISTER" shall have the meaning given such term in Section 11.3(c).

          "REGISTRATION RIGHTS AGREEMENTS" means a collective reference to 
     the GE Registration Rights Agreement and the Sponsor Registration Rights 
     Agreement.

          "REGULATION G, T, U, OR X" means Regulation G, T, U or X, 
     respectively, of the Board of Governors of the Federal Reserve System as 
     from time to time in effect and any successor to all or a portion 
     thereof.

          "REPORTABLE EVENT" means any of the events set forth in Section 
     4043(c) of ERISA, other than those events as to which the notice 
     requirement has been waived by regulation.

          "REQUIRED FINANCIAL INFORMATION" means, with respect to the 
     applicable Calculation Date, (i) the financial statements of the 
     Consolidated Parties required to be delivered pursuant to Section 7.1(a) 
     or (b) for the fiscal period or quarter ending as of such Calculation 
     Date, and (ii) the certificate of the chief financial officer of the 
     Borrower required by Section 7.1(c) to be delivered with the financial 
     statements described in clause (i) above.

          "REQUIRED LENDERS" means, at any time, Lenders which are then in 
     compliance with their obligations hereunder (as determined by the Agent) 
     and holding in the aggregate more than least 50% of (i) the sum of (a) 
     the Revolving Commitments (and Participation Interests therein), (b) the 
     Acquisition Loan Commitments (and Participation Interests therein) 
     and/or, after conversion of any portion of the Acquisition Loans to a 
     term loan, the outstanding term loan portion of the Acquisition Loans, 
     (c) the outstanding Tranche A Term Loans (and Participation Interests 
     therein) and (d) the outstanding Tranche B Term Loans (and 


                                       25

<PAGE>

     Participation Interests therein) or (ii) if the Commitments have been 
     terminated, the outstanding Loans and Participation Interests (including 
     the Participation Interests of the Issuing Lender in any Letters of 
     Credit).

          "REQUIREMENT OF LAW" means, as to any Person, the certificate of 
     incorporation and by-laws or other organizational or governing documents 
     of such Person, and any law, treaty, rule or regulation or determination 
     of an arbitrator or a court or other Governmental Authority, in each 
     case applicable to or binding upon such Person or any of its material 
     property is subject.

          "RESTRICTED PAYMENT" means (i) any dividend or other distribution, 
     direct or indirect, on account of any shares of any class of Capital 
     Stock of any Consolidated Party, now or hereafter outstanding, (ii) any 
     redemption, retirement, sinking fund or similar payment, purchase or 
     other acquisition for value, direct or indirect, of any shares of any 
     class of Capital Stock of any Consolidated Party, now or hereafter 
     outstanding and (iii) any payment made to retire, or to obtain the 
     surrender of, any outstanding warrants, options or other rights to 
     acquire shares of any class of Capital Stock of any Consolidated Party, 
     now or hereafter outstanding.

          "REVOLVING COMMITMENT" means, with respect to each Lender, the 
     commitment of such Lender in an aggregate principal amount at any time 
     outstanding of up to such Lender's Revolving Commitment Percentage of 
     the Revolving Committed Amount, (i) to make Revolving Loans in 
     accordance with the provisions of Section 2.1(a) and (ii) to purchase 
     Participation Interests in Letters of Credit in accordance with the 
     provisions of Section 2.2(c).

          "REVOLVING COMMITMENT PERCENTAGE" means, for any Lender, the 
     percentage identified as its Revolving Commitment Percentage on SCHEDULE 
     2.1(a), as such percentage may be modified in connection with any 
     assignment made in accordance with the provisions of Section 11.3.

          "REVOLVING COMMITTED AMOUNT" shall have the meaning assigned to 
     such term in Section 2.1(a).

          "REVOLVING LOANS" shall have the meaning assigned to such term in 
     Section 2.1(a).

          "REVOLVING NOTE" or "REVOLVING NOTES" means the promissory notes of 
     the Borrower in favor of each of the Lenders evidencing the Revolving 
     Loans provided pursuant to Section 2.1(e), individually or collectively, 
     as appropriate, as such promissory notes may be amended, modified, 
     restated, supplemented, extended, renewed or replaced from time to time.

          "REVOLVING UNUSED FEE" shall have the meaning assigned to such term 
     in Section 3.5(a)(i).


                                       26

<PAGE>

          "REVOLVING UNUSED FEE CALCULATION PERIOD" shall have the meaning 
     assigned to such term in Section 3.5(a)(i).

          "S&P" means Standard & Poor's Ratings Group, a division of McGraw 
     Hill, Inc., or any successor or assignee of the business of such 
     division in the business of rating securities.

          "SALE AND LEASEBACK TRANSACTION" means any direct or indirect 
     arrangement with any Person or to which any such Person is a party, 
     providing for the leasing to any Consolidated Party of any Property, 
     whether owned by such Consolidated Party as of the Closing Date or later 
     acquired, which has been or is to be sold or transferred by such 
     Consolidated Party to such Person or to any other Person from whom funds 
     have been, or are to be, advanced by such Person on the security of such 
     Property.

          "SECONDARY REAL PROPERTIES" shall have the meaning assigned such 
     term in Section 7.16.

          "SECURITY AGREEMENT" means the security agreement dated as of the 
     Closing Date in the form of EXHIBIT 1.1B to be executed in favor of the 
     Agent by each of the Credit Parties, as amended, modified, restated or 
     supplemented from time to time.

          "SERIES B CERTIFICATE OF DESIGNATION" means the Certificate of 
     Designation, Preferences and Rights of Convertible Preferred Stock, 
     Series B of the Borrower, to be filed with the Delaware Secretary of 
     State on or prior to the Closing Date.

          "SERIES C CERTIFICATE OF DESIGNATION" means the Certificate of 
     Designation, Preferences and Rights of Series C Preferred of the 
     Borrower, to be filed with the Delaware Secretary of State on or prior 
     to the Closing Date.

          "SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV 
     of ERISA, but which is not a Multiemployer Plan or a Multiple Employer 
     Plan.

          "SOLVENT" or "SOLVENCY" means, with respect to any Person as of a 
     particular date, that on such date (i) such Person is able to realize 
     upon its assets and pay its debts and other liabilities, contingent 
     obligations and other commitments as they mature in the normal course of 
     business, (ii) such Person does not intend to, and does not believe that 
     it will, incur debts or liabilities beyond such Person's ability to pay 
     as such debts and liabilities mature in their ordinary course, (iii) 
     such Person is not engaged in a business or a transaction, and is not 
     about to engage in a business or a transaction, for which such Person's 
     Property would constitute unreasonably small capital after giving due 
     consideration to the prevailing practice in the industry in which such 
     Person is engaged or is to engage, (iv) the fair value of the Property 
     of such Person is greater than the total amount of liabilities, 
     including, without limitation, contingent liabilities, of such Person 
     and (v) the present fair salable value of the assets of such Person is 
     not less than the amount that will be required to pay the probable 
     liability of such Person on its debts as they become absolute and 
     matured.  In computing the amount of contingent liabilities at any time, 
     it is intended 


                                       27

<PAGE>

     that such liabilities will be computed at the amount which, in light of 
     all the facts and circumstances existing at such time, represents the 
     amount that can reasonably be expected to become an actual or matured 
     liability.

          "SPONSOR" means TC Group, L.L.C., a Delaware Limited Liability 
     Company, and its Affiliates.

          "SPONSOR INVESTMENT AGREEMENT" means that certain Securities 
     Purchase Agreement dated as of October 14, 1997 by and among the Sponsor 
     and the Borrower.

          "SPONSOR REGISTRATION RIGHTS AGREEMENT" means that certain 
     Registration Rights Agreement dated as of a date on or before the 
     Effective Date by and between the Borrower and the Sponsor.

          "SPONSOR WARRANT AGREEMENT" means that certain Warrant Agreement 
     dated as of a date on or before the Effective Date by and between the 
     Borrower and the Sponsor.

          "STANDBY LETTER OF CREDIT FEE" shall have the meaning assigned to 
     such term in Section 3.5(b)(i).

          "SUBORDINATED INDEBTEDNESS" means any Indebtedness incurred by the 
     Borrower which by its terms is specifically subordinated in right of 
     payment to the prior payment of the obligations of the Credit Parties 
     under this Credit Agreement and the other Credit Documents on terms and 
     conditions satisfactory to the Required Lenders.

          "SUBORDINATION AGREEMENT" means a subordination agreement in 
     substantially the form of EXHIBIT 1.1C by and between the Agent and GE, 
     pursuant to which the Agent agrees to the subordination, on the terms 
     and conditions set forth more fully therein, of the security interest of 
     the Agent in any Collateral consisting of Property (i) leased by any 
     Credit Party under any Capital Lease or Operating Lease with respect to 
     which GE is the lessor or (ii) subject to any other conditional sale or 
     other financing arrangement to which GE is a party.

          "SUBSIDIARY" means, as to any Person at any time, (a) any 
     corporation more than 50% of whose Capital Stock of any class or classes 
     having by the terms thereof ordinary voting power to elect a majority of 
     the directors of such corporation (irrespective of whether or not at 
     such time, any class or classes of such corporation shall have or might 
     have voting power by reason of the happening of any contingency) is at 
     such time owned by such Person directly or indirectly through 
     Subsidiaries, and (b) any partnership, association, joint venture or 
     other entity of which such Person directly or indirectly through 
     Subsidiaries owns at such time more than 50% of the Capital Stock.

          "SYNTHETIC LEASE" means any synthetic lease, tax retention 
     operating lease, off-balance sheet loan or similar off-balance sheet 
     financing product where such transaction is considered borrowed money 
     indebtedness for tax purposes but is classified as an Operating Lease.


                                       28

<PAGE>

          "TAXES" means such term as is defined in Section 3.11.

          "TRADE LETTER OF CREDIT FEE" shall have the meaning assigned to 
     such term in Section 3.5(b)(ii).

          "TRANCHE A TERM LOAN" shall have the meaning assigned to such term 
     in Section 2.4(a).

          "TRANCHE A TERM LOAN COMMITMENT" means, with respect to each 
     Lender, the commitment of such Lender to make its portion of the Tranche 
     A Term Loan in a principal amount equal to such Lender's Tranche A Term 
     Loan Commitment Percentage of the Tranche A Term Loan Committed Amount.

          "TRANCHE A TERM LOAN COMMITMENT PERCENTAGE" means, for any Lender, 
     the percentage identified as its Tranche A Term Loan Commitment 
     Percentage on SCHEDULE 2.1(a), as such percentage may be modified in 
     connection with any assignment made in accordance with the provisions of 
     Section 11.3.

          "TRANCHE A TERM LOAN COMMITTED AMOUNT" shall have the meaning 
     assigned to such term in Section 2.4(a).

          "TRANCHE A TERM NOTE" or "TRANCHE A TERM NOTES" means the 
     promissory notes of the Borrower in favor of each of the Lenders 
     evidencing the Tranche A Term Loans provided pursuant to Section 2.4(f), 
     individually or collectively, as appropriate, as such promissory notes 
     may be amended, modified, restated, supplemented, extended, renewed or 
     replaced from time to time.

          "TRANCHE B TERM LOAN" shall have the meaning assigned to such term 
     in Section 2.5(a).  "TRANCHE B TERM LOAN COMMITMENT" means, with respect 
     to each Lender, the commitment of such Lender to make its portion of the 
     Tranche B Term Loan in a principal amount equal to such Lender's Tranche 
     B Term Loan Commitment Percentage of the Tranche B Term Loan Committed 
     Amount.

          "TRANCHE B TERM LOAN COMMITMENT PERCENTAGE" means, for any Lender, 
     the percentage identified as its Tranche B Term Loan Commitment 
     Percentage on SCHEDULE 2.1(a), as such percentage may be modified in 
     connection with any assignment made in accordance with the provisions of 
     Section 11.3.

          "TRANCHE B TERM LOAN COMMITTED AMOUNT" shall have the meaning 
     assigned to such term in Section 2.5(a).  

          "TRANCHE B TERM NOTE" or "TRANCHE B TERM NOTES" means the 
     promissory notes of the Borrower in favor of each of the Lenders 
     evidencing the Tranche B Term Loans 


                                       29

<PAGE>

     provided pursuant to Section 2.5(f), individually or collectively, as 
     appropriate, as such promissory notes may be amended, modified, 
     restated, supplemented, extended, renewed or replaced from time to time.

          "UNUSED ACQUISITION LOAN COMMITTED AMOUNT" means, for any period, 
     the amount by which (a) the then applicable Acquisition Loan Committed 
     Amount exceeds (b) the daily average sum for such period of the 
     outstanding aggregate principal amount of all Acquisition Loans.

          "UNUSED REVOLVING COMMITTED AMOUNT" means, for any period, the 
     amount by which (a) the then applicable Revolving Committed Amount 
     exceeds (b) the daily average sum for such period of (i) the outstanding 
     aggregate principal amount of all Revolving Loans PLUS (ii) the 
     outstanding aggregate principal amount of all LOC Obligations.

          "VOTING STOCK" means, with respect to any Person, Capital Stock 
     issued by such Person the holders of which are ordinarily, in the 
     absence of contingencies, entitled to vote for the election of directors 
     (or persons performing similar functions) of such Person, even though 
     the right so to vote has been suspended by the happening of such a 
     contingency.

          "WARRANT AGREEMENTS" means a collective reference to the GE Warrant 
     Agreement and the Sponsor Warrant Agreement.

          "WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary 100% 
     of whose Voting Stock is at the time owned by such Person directly or 
     indirectly through other Wholly Owned Subsidiaries.

          1.2  COMPUTATION OF TIME PERIODS.

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

          1.3  ACCOUNTING TERMS.

     Except as otherwise expressly provided herein, all accounting terms used 
herein shall be interpreted, and all financial statements and certificates 
and reports as to financial matters required to be delivered to the Lenders 
hereunder shall be prepared, in accordance with GAAP applied on a consistent 
basis. All calculations made for the purposes of determining compliance with 
this Credit Agreement shall (except as otherwise expressly provided herein) 
be made by application of GAAP applied on a basis consistent with the most 
recent annual or quarterly financial statements delivered pursuant to Section 
7.1 (or, prior to the delivery of the first financial statements pursuant to 
Section 7.1, consistent with the financial statements as at June 30, 1997); 
PROVIDED, HOWEVER, if (a) the Borrower shall object to determining such 
compliance on such basis at the time of delivery of such financial statements 
due to any change in GAAP or the rules promulgated with respect thereto or 
(b) the Agent or the Required Lenders shall so object in writing within 60 
days after delivery of such financial statements, then such calculations 
shall be made on a basis consistent with the most recent 

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<PAGE>

financial statements delivered by the Borrower to the Lenders as to which no 
such objection shall have been made.

Notwithstanding the above, the parties hereto acknowledge and agree that, for 
purposes of all calculations made under the financial covenants set forth in 
Section 7.11 (including without limitation for purposes of the definitions of 
"Applicable Percentage" and "Pro Forma Basis" set forth in Section 1.1), 
(i)(A) income statement items (whether positive or negative) attributable to 
the Property disposed of in any Asset Disposition as contemplated by Section 
8.5, as applicable, shall be excluded to the extent relating to any period 
occurring prior to the date of such transaction and (B) Indebtedness which is 
retired in connection with any such Asset Disposition shall be excluded and 
deemed to have been retired as of the first day of the applicable period and 
(ii) income statement items (whether positive or negative) attributable to 
any Property acquired in any Investment transaction (including without 
limitation any Permitted Acquisition) contemplated by Section 8.6 shall be 
included to the extent relating to any period applicable in such calculations 
occurring after the date of such transaction (and, notwithstanding the 
foregoing, during the first four fiscal quarters following the date of such 
transaction, shall be included on an annualized basis).

SECTION 2

     CREDIT FACILITIES

          2.1  REVOLVING LOANS.

          (a)  REVOLVING COMMITMENT. Subject to the terms and conditions 
     hereof and in reliance upon the representations and warranties set forth 
     herein, each Lender severally agrees to make available to the Borrower 
     such Lender's Revolving Commitment Percentage of revolving credit loans 
     requested by the Borrower in Dollars ("REVOLVING LOANS") from time to 
     time from the Effective Date until the Maturity Date, or such earlier 
     date as the Revolving Commitments shall have been terminated as provided 
     herein for the purposes hereinafter set forth; PROVIDED, HOWEVER, that 
     the sum of the aggregate principal amount of outstanding Revolving Loans 
     shall not exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000) (as such 
     aggregate maximum amount may be reduced from time to time as provided in 
     Section 3.4, the "REVOLVING COMMITTED AMOUNT"); PROVIDED, FURTHER, (A) 
     with regard to each Lender individually, such Lender's outstanding 
     Revolving Loans shall not exceed such Lender's Revolving Commitment 
     Percentage of the Revolving Committed Amount, and (B) the aggregate 
     principal amount of outstanding Revolving Loans PLUS LOC Obligations 
     outstanding shall not exceed the Revolving Committed Amount. Revolving 
     Loans may consist of Base Rate Loans or Eurodollar Loans, or a 
     combination thereof, as the Borrower may request; PROVIDED, HOWEVER, 
     that no more than 16 Eurodollar Loans shall be outstanding hereunder at 
     any time. For purposes hereof, Eurodollar Loans with different Interest 
     Periods shall be considered as separate Eurodollar Loans, even if they 
     begin on the same date, although borrowings, extensions and conversions 
     may, in accordance with the provisions hereof, be combined at the end of 
     existing Interest Periods to constitute a new 


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<PAGE>

     Eurodollar Loan with a single Interest Period. Revolving Loans hereunder 
     may be repaid and reborrowed in accordance with the provisions hereof.

          (b)  REVOLVING LOAN BORROWINGS.

               (i)   NOTICE OF BORROWING.  The Borrower shall request a 
          Revolving Loan borrowing by written notice (or telephonic notice 
          promptly confirmed in writing) to the Agent not later than 12:00 
          Noon (Charlotte, North Carolina time) on the Business Day prior to 
          the date of the requested borrowing in the case of Base Rate Loans, 
          and on the third Business Day prior to the date of the requested 
          borrowing in the case of Eurodollar Loans.  Each such request for 
          borrowing shall be irrevocable and shall specify (A) that a 
          Revolving Loan is requested, (B) the date of the requested 
          borrowing (which shall be a Business Day), (C) the aggregate 
          principal amount to be borrowed, and (D) whether the borrowing 
          shall be comprised of Base Rate Loans, Eurodollar Loans or a 
          combination thereof, and if Eurodollar Loans are requested, the 
          Interest Period(s) therefor.  If the Borrower shall fail to specify 
          in any such Notice of Borrowing (I) an applicable Interest Period 
          in the case of a Eurodollar Loan, then such notice shall be deemed 
          to be a request for an Interest Period of one month, or (II) the 
          type of Revolving Loan requested, then such notice shall be deemed 
          to be a request for a Base Rate Loan hereunder.  The Agent shall 
          give notice to each affected Lender promptly upon receipt of each 
          Notice of Borrowing pursuant to this Section 2.1(b)(i), the 
          contents thereof and each such Lender's share of any borrowing to 
          be made pursuant thereto.

               (ii)  MINIMUM AMOUNTS.  Each Eurodollar Loan and Base Rate Loan 
          that is a Revolving Loan shall be in a minimum aggregate principal 
          amount of $1,000,000 and integral multiples of $100,000 in excess 
          thereof (or the remaining amount of the Revolving Committed Amount, 
          if less).

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

          (c)  REPAYMENT.  The principal amount of all Revolving Loans shall 
     be due and payable in full on the Maturity Date, unless accelerated 
     sooner pursuant to Section 9.2.


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<PAGE>

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

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

               (ii) EURODOLLAR LOANS.  During such periods as Revolving Loans 
          shall be comprised in whole or in part of Eurodollar Loans, such 
          Eurodollar Loans shall bear interest at a per annum rate equal to the 
          Adjusted Eurodollar Rate.

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

          (e)  REVOLVING NOTES.  The Revolving Loans made by each Lender shall 
     be evidenced by a duly executed promissory note of the Borrower to such 
     Lender in an original principal amount equal to such Lender's Revolving 
     Commitment Percentage of the Revolving Committed Amount and in 
     substantially the form of EXHIBIT 2.1(e).

          2.2  LETTER OF CREDIT SUBFACILITY.

          (a)  ISSUANCE.  Subject to the terms and conditions hereof and of 
     the LOC Documents, if any, and any other terms and conditions which the 
     Issuing Lender may reasonably require and in reliance upon the 
     representations and warranties set forth herein, the Issuing Lender 
     agrees to issue, and each Lender severally agrees to participate in the 
     issuance by the Issuing Lender of, standby and trade Letters of Credit 
     in Dollars from time to time from the Effective Date until the date five 
     (5) days prior to the Maturity Date as the Borrower may request, in a 
     form acceptable to the Issuing Lender; PROVIDED, HOWEVER, that (i) the 
     LOC Obligations outstanding shall not at any time exceed EIGHT MILLION 
     DOLLARS ($8,000,000) (the "LOC COMMITTED AMOUNT") and (ii) the sum of 
     the aggregate principal amount of outstanding Revolving Loans PLUS LOC 
     Obligations outstanding shall not at any time exceed the Revolving 
     Committed Amount. No Letter of Credit shall (x) have an original expiry 
     date more than one year from the date of issuance or (y) as originally 
     issued or as extended, have an expiry date extending beyond the Maturity 
     Date.  Each Letter of Credit shall comply with the related LOC 
     Documents.  The issuance and expiry dates of each Letter of Credit shall 
     be a Business Day.

          (b)  NOTICE AND REPORTS.  The request for the issuance of a Letter 
     of Credit shall be submitted by the Borrower to the Issuing Lender at 
     least three (3) Business Days prior to the requested date of issuance. 
     The Issuing Lender will, at least quarterly and more frequently upon 
     request, disseminate to each of the Lenders a detailed report specifying 
     the Letters of Credit which are then issued and outstanding and any 
     activity with respect thereto which may have occurred since the date of 
     the prior report, and including therein, among other things, the 
     beneficiary, the face amount and the expiry date, as well as any payment 
     or expirations which may have occurred.


                                       33



<PAGE>

          (c)  PARTICIPATION.  Each Lender, upon issuance of a Letter
     of Credit, shall be deemed to have purchased without recourse a
     Participation Interest from the applicable Issuing Lender in such Letter
     of Credit and the obligations arising thereunder and any collateral
     relating thereto, in each case in an amount equal to its pro rata share
     of the obligations under such Letter of Credit (based on the respective
     Revolving Commitment Percentages of the Lenders) and shall absolutely,
     unconditionally and irrevocably assume and be obligated to pay to the
     Issuing Lender and discharge when due, its pro rata share of the
     obligations arising under such Letter of Credit.  Without limiting the
     scope and nature of each Lender's Participation Interest in any Letter
     of Credit, to the extent that the Issuing Lender has not been reimbursed
     as required hereunder or under any such Letter of Credit, each such
     Lender shall pay to the Issuing Lender its pro rata share of such
     unreimbursed drawing in same day funds on the day of notification by the
     Issuing Lender of an unreimbursed drawing pursuant to the provisions of
     subsection (d) below.  The obligation of each Lender to so reimburse the
     Issuing Lender shall be absolute and unconditional and shall not be
     affected by the occurrence of a Default, an Event of Default or any
     other occurrence or event.  Any such reimbursement shall not relieve or
     otherwise impair the obligation of the Borrower to reimburse the Issuing
     Lender under any Letter of Credit, together with interest as hereinafter
     provided.

          (d)  REIMBURSEMENT.  In the event of any drawing under any
     Letter of Credit, the Issuing Lender will promptly notify the Borrower.
     Unless the Borrower shall immediately notify the Issuing Lender that the
     Borrower intends to otherwise reimburse the Issuing Lender for such
     drawing, the Borrower shall be deemed to have requested that the Lenders
     make a Revolving Loan in the amount of the drawing as provided in
     subsection (e) below on the related Letter of Credit, the proceeds of
     which will be used to satisfy the related reimbursement obligations.
     The Borrower promises to reimburse the Issuing Lender on the day of
     drawing under any Letter of Credit (either with the proceeds of a
     Revolving Loan obtained hereunder or otherwise) in same day funds.  If
     the Borrower shall fail to reimburse the Issuing Lender as provided
     hereinabove, the unreimbursed amount of such drawing shall bear interest
     at a per annum rate equal to the Adjusted Base Rate PLUS 2%.  The
     Borrower's reimbursement obligations hereunder shall be absolute and
     unconditional under all circumstances irrespective of any rights of
     setoff, counterclaim or defense to payment the Borrower may claim or
     have against the Issuing Lender, the Agent, the Lenders, the beneficiary
     of the Letter of Credit drawn upon or any other Person, including
     without limitation any defense based on any failure of the Borrower or
     any other Credit Party to receive consideration or the legality,
     validity, regularity or unenforceability of the Letter of Credit.  The
     Issuing Lender will promptly notify the other Lenders of the amount of
     any unreimbursed drawing and each Lender shall promptly pay to the Agent
     for the account of the Issuing Lender in Dollars and in immediately
     available funds, the amount of such Lender's pro rata share of such
     unreimbursed drawing.  Such payment shall be made on the day such notice
     is received by such Lender from the Issuing Lender if such notice is
     received at or before 2:00 P.M. (Charlotte, North Carolina time)
     otherwise such payment shall be made at or before 12:00 Noon (Charlotte,
     North Carolina time) on the Business Day next succeeding the day such
     notice is received.  If such Lender does not pay such amount to the
     Issuing Lender in full upon such request, such Lender shall, on demand,
     pay to the Agent for the account of the Issuing Lender interest on the
     unpaid amount during the

                                      34

<PAGE>

     period from the date of such drawing until such Lender pays such amount
     to the Issuing Lender in full at a rate per annum equal to, if paid
     within two (2) Business Days of the date that such Lender is required to
     make payments of such amount pursuant to the preceding sentence, the
     Federal Funds Rate and thereafter at a rate equal to the Base Rate.
     Each Lender's obligation to make such payment to the Issuing Lender, and
     the right of the Issuing Lender to receive the same, shall be absolute
     and unconditional, shall not be affected by any circumstance whatsoever
     and without regard to the termination of this Credit Agreement or the
     Commitments hereunder, the existence of a Default or Event of Default or
     the acceleration of the obligations of the Borrower hereunder and shall
     be made without any offset, abatement, withholding or reduction
     whatsoever.  Simultaneously with the making of each such payment by a
     Lender to the Issuing Lender, such Lender shall, automatically and
     without any further action on the part of the Issuing Lender or such
     Lender, acquire a Participation Interest in an amount equal to such
     payment (excluding the portion of such payment constituting interest
     owing to the Issuing Lender) in the related unreimbursed drawing portion
     of the LOC Obligation and in the interest thereon and in the related LOC
     Documents, and shall have a claim against the Borrower with respect
     thereto.

          (e)  REPAYMENT WITH REVOLVING LOANS.  On any day on which
     the Borrower shall have requested, or been deemed to have requested, a
     Revolving Loan advance to reimburse a drawing under a Letter of Credit,
     the Agent shall give notice to the Lenders that a Revolving Loan has
     been requested or deemed requested by the Borrower to be made in
     connection with a drawing under a Letter of Credit, in which case a
     Revolving Loan advance comprised of Base Rate Loans (or Eurodollar Loans
     to the extent the Borrower has complied with the procedures of Section
     2.1(b)(i) with respect thereto) shall be immediately made to the
     Borrower by all Lenders (notwithstanding any termination of the
     Commitments pursuant to Section 9.2) PRO RATA based on the respective
     Revolving Commitment Percentages of the Lenders (determined before
     giving effect to any termination of the Commitments pursuant to Section
     9.2) and the proceeds thereof shall be paid directly to the Issuing
     Lender for application to the respective LOC Obligations.  Each such
     Lender hereby irrevocably agrees to make its pro rata share of each such
     Revolving Loan immediately upon any such request or deemed request in
     the amount, in the manner and on the date specified in the preceding
     sentence NOTWITHSTANDING (i) the amount of such borrowing may not comply
     with the minimum amount for advances of Revolving Loans otherwise
     required hereunder, (ii) whether any conditions specified in Section 5.3
     are then satisfied, (iii) whether a Default or an Event of Default then
     exists, (iv) failure for any such request or deemed request for
     Revolving Loan to be made by the time otherwise required hereunder, (v)
     whether the date of such borrowing is a date on which Revolving Loans
     are otherwise permitted to be made hereunder or (vi) any termination of
     the Commitments relating thereto immediately prior to or
     contemporaneously with such borrowing.  In the event that any Revolving
     Loan cannot for any reason be made on the date otherwise required above
     (including, without limitation, as a result of the commencement of a
     proceeding under the Bankruptcy Code with respect to the Borrower or any
     Credit Party), then each such Lender hereby agrees that it shall
     forthwith purchase (as of the date such borrowing would otherwise have
     occurred, but adjusted for any payments received from the Borrower on or
     after such date and prior to such purchase) from the Issuing Lender such
     Participation Interests in the outstanding LOC Obligations as shall be
     necessary to cause each such

                                      35


<PAGE>

     Lender to share in such LOC Obligations ratably (based upon the
     respective Revolving Commitment Percentages of the Lenders (determined
     before giving effect to any termination of the Commitments pursuant to
     Section 9.2)), PROVIDED that at the time any purchase of Participation
     Interests pursuant to this sentence is actually made, the purchasing
     Lender shall be required to pay to the Issuing Lender, to the extent not
     paid to the Issuer by the Borrower in accordance with the terms of
     subsection (d) above, interest on the principal amount of Participation
     Interests purchased for each day from and including the day upon which
     such borrowing would otherwise have occurred to but excluding the date
     of payment for such Participation Interests, at the rate equal to, if
     paid within two (2) Business Days of the date of the Revolving Loan
     advance, the Federal Funds Rate, and thereafter at a rate equal to the
     Base Rate.

          (f)  DESIGNATION OF CONSOLIDATED PARTIES AS ACCOUNT PARTIES.
     Notwithstanding anything to the contrary set forth in this Credit
     Agreement, including without limitation Section 2.2(a), a Letter of
     Credit issued hereunder may contain a statement to the effect that such
     Letter of Credit is issued for the account of a Consolidated Party other
     than the Borrower, provided that notwithstanding such statement, the
     Borrower shall be the actual account party for all purposes of this
     Credit Agreement for such Letter of Credit and such statement shall not
     affect the Borrower's reimbursement obligations hereunder with respect
     to such Letter of Credit.

          (g)  RENEWAL, EXTENSION.  The renewal or extension of any
     Letter of Credit shall, for purposes hereof, be treated in all respects
     the same as the issuance of a new Letter of Credit hereunder.

          (h)  UNIFORM CUSTOMS AND PRACTICES.  The Issuing Lender may
     have the Letters of Credit be subject to The Uniform Customs and
     Practice for Documentary Credits, as published as of the date of issue
     by the International Chamber of Commerce (the "UCP"), in which case the
     UCP may be incorporated therein and deemed in all respects to be a part
     thereof.

          (i)  INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.

               (i)     In addition to its other obligations under this
          Section 2.2, the Borrower hereby agrees to pay, and protect,
          indemnify and save each Lender harmless from and against, any and
          all claims, demands, liabilities, damages, losses, costs, charges
          and expenses (including reasonable attorneys' fees) that such
          Lender may incur or be subject to as a consequence, direct or
          indirect, of (A) the issuance of any Letter of Credit or (B) the
          failure of such Lender to honor a drawing under a Letter of Credit
          as a result of any act or omission, whether rightful or wrongful,
          of any present or future de jure or de facto government or
          Governmental Authority (all such acts or omissions, herein called
          "Government Acts").

               (ii)    As between the Borrower and the Lenders
          (including the Issuing Lender), the Borrower shall assume all risks
          of the acts, omissions or misuse of any Letter of Credit by the
          beneficiary thereof.  No Lender (including the Issuing

                                      36


<PAGE>

          Lender) shall be responsible:  (A) for the form, validity,
          sufficiency, accuracy, genuineness or legal effect of any document
          submitted by any party in connection with the application for and
          issuance of any Letter of Credit, even if it should in fact prove to
          be in any or all respects invalid, insufficient, inaccurate,
          fraudulent or forged; (B) for the validity or sufficiency of any
          instrument transferring or assigning or purporting to transfer or
          assign any Letter of Credit or the rights or benefits thereunder or
          proceeds thereof, in whole or in part, that may prove to be invalid
          or ineffective for any reason; (C) for errors, omissions,
          interruptions or delays in transmission or delivery of any messages,
          by mail, cable, telegraph, telex or otherwise, whether or not they
          be in cipher; (D) for any loss or delay in the transmission or
          otherwise of any document required in order to make a drawing under
          a Letter of Credit or of the proceeds thereof; and (E) for any
          consequences arising from causes beyond the control of such Lender,
          including, without limitation, any Government Acts.  None of the above
          shall affect, impair, or prevent the vesting of the Issuing Lender's
          rights or powers hereunder.

               (iii)   In furtherance and extension and not in
          limitation of the specific provisions hereinabove set forth, any
          action taken or omitted by any Lender (including the Issuing
          Lender), under or in connection with any Letter of Credit or the
          related certificates, if taken or omitted in good faith, shall not
          put such Lender under any resulting liability to the Borrower or
          any other Credit Party.  It is the intention of the parties that
          this Credit Agreement shall be construed and applied to protect and
          indemnify each Lender (including the Issuing Lender) against any
          and all risks involved in the issuance of the Letters of Credit,
          all of which risks are hereby assumed by the Borrower (on behalf of
          itself and each of the other Credit Parties), including, without
          limitation, any and all Government Acts.  No Lender (including the
          Issuing Lender) shall, in any way, be liable for any failure by
          such Lender or anyone else to pay any drawing under any Letter of
          Credit as a result of any Government Acts or any other cause beyond
          the control of such Lender.

               (iv)    Nothing in this subsection (h) is intended to
          limit the reimbursement obligations of the Borrower contained in
          subsection (d) above.  The obligations of the Borrower under this
          subsection (h) shall survive the termination of this Credit
          Agreement. No act or omissions of any current or prior beneficiary
          of a Letter of Credit shall in any way affect or impair the rights
          of the Lenders (including the Issuing Lender) to enforce any right,
          power or benefit under this Credit Agreement.

               (v)     Notwithstanding anything to the contrary
          contained in this subsection (h), the Borrower shall have no
          obligation to indemnify any Lender (including the Issuing Lender)
          in respect of any liability incurred by such Lender (A) arising
          solely out of the gross negligence or willful misconduct of such
          Lender, as determined by a court of competent jurisdiction, or (B)
          caused by such Lender's failure to pay under any Letter of Credit
          after presentation to it of a request strictly complying with the
          terms and conditions of such Letter of Credit, as determined by a
          court of competent jurisdiction, unless such payment is prohibited
          by any law, regulation, court order or decree.

                                      37


<PAGE>

          (j)  RESPONSIBILITY OF ISSUING LENDER. It is expressly
     understood and agreed that the obligations of the Issuing Lender
     hereunder to the Lenders are only those expressly set forth in this
     Credit Agreement and that the Issuing Lender shall be entitled to assume
     that the conditions precedent set forth in Section 5.3 have been
     satisfied unless it shall have acquired actual knowledge that any such
     condition precedent has not been satisfied; PROVIDED, HOWEVER, that
     nothing set forth in this Section 2.2 shall be deemed to prejudice the
     right of any Lender to recover from the Issuing Lender any amounts made
     available by such Lender to the Issuing Lender pursuant to this Section
     2.2 in the event that it is determined by a court of competent
     jurisdiction that the payment with respect to a Letter of Credit
     constituted gross negligence or willful misconduct on the part of the
     Issuing Lender.

          (k)  CONFLICT WITH LOC DOCUMENTS.  In the event of any
     conflict between this Credit Agreement and any LOC Document (including
     any letter of credit application), this Credit Agreement shall control.

               2.3     ACQUISITION LOANS.

          (a)  ACQUISITION LOAN COMMITMENT.  Subject to the terms and
     conditions hereof and in reliance upon the representations and
     warranties set forth herein, each Lender severally agrees to make
     available to the Borrower such Lender's Acquisition Loan Commitment
     Percentage of revolving credit loans requested by the Borrower in
     Dollars ("ACQUISITION LOANS") from time to time from the Effective Date
     until October 14, 1999, or such earlier date as the Acquisition Loan
     Commitments shall have been terminated as provided herein for the
     purpose of financing the purchase price of, and fees and expenses in
     connection with, Permitted Acquisitions and Permitted Capital
     Expenditures; PROVIDED, HOWEVER, that the sum of the aggregate principal
     amount of outstanding Acquisition Loans shall not exceed FIFTY MILLION
     DOLLARS ($50,000,000) (as such aggregate maximum amount may be reduced
     or increased from time to time as provided in Section 3.4, the
     "ACQUISITION LOAN COMMITTED AMOUNT"); PROVIDED, FURTHER, (A) with regard
     to each Lender individually, such Lender's outstanding Acquisition Loans
     shall not exceed such Lender's Acquisition Loan Commitment Percentage of
     the Acquisition Loan Committed Amount, and (B) the aggregate principal
     amount of outstanding Acquisition Loans shall not exceed the Acquisition
     Loan Committed Amount.  Acquisition Loans may consist of Base Rate Loans
     or Eurodollar Loans, or a combination thereof, as the Borrower may
     request; PROVIDED, HOWEVER, that no more than 16 Eurodollar Loans shall
     be outstanding hereunder at any time.  For purposes hereof, Eurodollar
     Loans with different Interest Periods shall be considered as separate
     Eurodollar Loans, even if they begin on the same date, although
     borrowings, extensions and conversions may, in accordance with the
     provisions hereof, be combined at the end of existing Interest Periods
     to constitute a new Eurodollar Loan with a single Interest Period.
     Acquisition Loans hereunder may be repaid and reborrowed in accordance
     with the provisions hereof.

                                      38

<PAGE>

     (b)  ACQUISITION LOAN BORROWINGS.

          (i)  NOTICE OF BORROWING.  The Borrower shall request an
     Acquisition Loan borrowing by written notice (or telephonic notice
     promptly confirmed in writing) to the Agent not later than 12:00 Noon
     (Charlotte, North Carolina time) on the Business Day prior to the date
     of the requested borrowing in the case of Base Rate Loans, and on the
     third Business Day prior to the date of the requested borrowing in the
     case of Eurodollar Loans.  Each such request for borrowing shall (A) be
     irrevocable, (B) specify (1) that an Acquisition Loan is requested, (2)
     the date of the requested borrowing (which shall be a Business Day), (3)
     the aggregate principal amount to be borrowed, (4) whether the borrowing
     shall be comprised of Base Rate Loans, Eurodollar Loans or a combination
     thereof, and if Eurodollar Loans are requested, the Interest Period(s)
     therefor and (C) be accompanied by a certificate of the chief financial
     of the Borrower describing in reasonable detail the Permitted
     Acquisition to which such requested borrowing relates.  If the Borrower
     shall fail to specify in any such Notice of Borrowing (I) an applicable
     Interest Period in the case of a Eurodollar Loan, then such notice shall
     be deemed to be a request for an Interest Period of one month, or (II)
     the type of Acquisition Loan requested, then such notice shall be deemed
     to be a request for a Base Rate Loan hereunder.  The Agent shall give
     notice to each affected Lender promptly upon receipt of each Notice of
     Borrowing pursuant to this Section 2.3(b)(i), the contents thereof and
     each such Lender's share of any borrowing to be made pursuant thereto.

          (ii) MINIMUM AMOUNTS.  Each Eurodollar Loan or Base Rate
     Loan that is an Acquisition Loan shall be in a minimum aggregate
     principal amount of $1,000,000 and integral multiples of $100,000 in
     excess thereof (or the remaining amount of the Acquisition Loan
     Committed Amount, if less).

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

     (c)  REPAYMENT.

          (i)  The principal amount of all Acquisition Loans advanced
     during the period from the Effective Date to and including October 14,
     1998 shall be repaid in twenty (20) consecutive quarterly installments
     as follows, unless accelerated sooner pursuant to Section 9.2:

                                      39


<PAGE>
----------------------------------------------------------------
                                                    PRINCIPAL
       PRINCIPAL AMORTIZATION                      AMORTIZATION
           PAYMENT DATES                             PAYMENT
-----------------------------------------------------------------
  December 31, 1998, March 31,                        3.75%
     1999, June 30, 1999 and
       September 30, 1999
-----------------------------------------------------------------
  December 31, 1999, March 31,                       4.375%
     2000, June 30, 2000 and
       September 30, 2000
-----------------------------------------------------------------
  December 31, 2000, March 31,                        5.0%
     2001, June 30, 2001 and
       September 30, 2001
-----------------------------------------------------------------
  December 31, 2001, March 31,                       5.625%
     2002, June 30, 2002 and
       September 30, 2002
-----------------------------------------------------------------
  December 31, 2002, March 31,                        6.25%
     2003, June 30, 2003 and
       September 30, 2003
-----------------------------------------------------------------

          (ii) The principal amount of all Acquisition Loans advanced
     during the period from October 14, 1998 to and including October 14,
     1999 shall be repaid in sixteen (16) consecutive quarterly installments
     as follows, unless accelerated sooner pursuant to Section 9.2:

----------------------------------------------------------------
                                                    PRINCIPAL
       PRINCIPAL AMORTIZATION                      AMORTIZATION
           PAYMENT DATES                             PAYMENT
-----------------------------------------------------------------
   December 31, 1999, March 31,                        5.0%
     2000, June 30, 2000 and
        September 30, 2000
-----------------------------------------------------------------
   December 31, 2000, March 31,                        6.25%
     2001, June 30, 2001 and
        September 30, 2001
-----------------------------------------------------------------
   December 31, 2001, March 31,                        6.25%
     2002, June 30, 2002 and
        September 30, 2002
-----------------------------------------------------------------
   December 31, 2002, March 31,                        7.5%
     2003, June 30, 2003 and
        September 30, 2003
-----------------------------------------------------------------


                                      40

<PAGE>

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

               (i)         BASE RATE LOANS.  During such periods as
          Acquisition  Loans shall be comprised in whole or in part of Base
          Rate Loans, such Base Rate Loans shall bear interest at a per annum
          rate equal to the Adjusted Base Rate.

               (ii)        EURODOLLAR LOANS.  During such periods as
          Acquisition Loans shall be comprised in whole or in part of
          Eurodollar Loans, such Eurodollar Loans shall bear interest at a per
          annum rate equal to the Adjusted Eurodollar Rate.

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

          (e)  ACQUISITION NOTES.  The Acquisition Loans made by each
     Lender shall be evidenced by a duly executed promissory note of the
     Borrower to such Lender in an original principal amount equal to such
     Lender's Acquisition Loan Commitment Percentage of the Acquisition Loan
     Committed Amount and in substantially the form of EXHIBIT 2.3(e).

               2.4     TRANCHE A TERM LOAN.

          (a)  TRANCHE A TERM COMMITMENT. Subject to the terms and
     conditions hereof and in reliance upon the representations and
     warranties set forth herein each Lender severally agrees to make
     available to the Borrower on the Effective Date such Lender's Tranche A
     Term Loan Commitment Percentage of a term loan in Dollars (the "TRANCHE
     A TERM LOAN") in the aggregate principal amount of TWENTY MILLION
     DOLLARS ($20,000,000) (the "TRANCHE A TERM LOAN COMMITTED AMOUNT") for
     the purposes hereinafter set forth.  The Tranche A Term Loan may consist
     of Base Rate Loans or Eurodollar Loans, or a combination thereof, as the
     Borrower may request; PROVIDED, HOWEVER, that no more than 16 Eurodollar
     Loans shall be outstanding hereunder at any time.  For purposes hereof,
     Eurodollar Loans with different Interest Periods shall be considered as
     separate Eurodollar Loans, even if they begin on the same date, although
     borrowings, extensions and conversions may, in accordance with the
     provisions hereof, be combined at the end of existing Interest Periods
     to constitute a new Eurodollar Loan with a single Interest Period.
     Amounts repaid on the Tranche A Term Loan may not be reborrowed.

          (b)  BORROWING PROCEDURES. The Borrower shall submit an
     appropriate Notice of Borrowing to the Agent not later than 12:00 Noon
     (Charlotte, North Carolina time) on the Effective Date, with respect to the
     portion of the Tranche A Term Loan initially consisting of a Base Rate
     Loan, or on the third Business Day prior to the Effective Date, with
     respect to the portion of the Tranche A Term Loan initially consisting of
     one or more Eurodollar Loans, which Notice of Borrowing shall be
     irrevocable and shall specify (i) that the funding of a Tranche A Term Loan
     is requested and (ii) whether the funding of the Tranche A Term Loan shall
     be comprised of Base Rate Loans, Eurodollar Loans or a combination thereof,
     and if Eurodollar Loans are requested, the Interest Period(s) therefor.  If
     the Borrower shall fail to deliver such Notice of Borrowing to the Agent by
     12:00 Noon. (Charlotte, North


                                      41

<PAGE>

     Carolina time) on the third Business Day prior to the Effective Date, then
     the full amount of the Tranche A Term Loan shall be disbursed on the
     Effective Date as a Base Rate Loan.  Each Lender shall make its Tranche A
     Term Loan Commitment Percentage of the Tranche A Term Loan available to
     the Agent for the account of the Borrower at the office of the Agent
     specified in SCHEDULE 2.1(a), or at such other office as the Agent may
     designate in writing, by 2:00 P.M. (Charlotte, North Carolina time) on
     the Effective Date in Dollars and in funds immediately available to the
     Agent.

          (c)  MINIMUM AMOUNTS.  Each Eurodollar Loan or Base Rate Loan
     that is part of the Tranche A Term Loan shall be in an aggregate principal
     amount that is not less than $2,500,000 and integral multiples of $500,000
     (or the then remaining principal balance of the Tranche A Term Loan, if
     less).

          (d)  REPAYMENT OF TRANCHE A TERM LOAN.  The principal amount
     of the Tranche A Term Loan shall be repaid in twenty (19) consecutive
     quarterly installments as follows, unless accelerated sooner pursuant to
     Section 9.2:


                                      42
<PAGE>


-----------------------------------------------------------------
                                                TRANCHE A TERM
          PRINCIPAL AMORTIZATION                LOAN PRINCIPAL
             PAYMENT  DATES                      AMORTIZATION
                                                    PAYMENT
-----------------------------------------------------------------
        March 31, 1998, June 30, 1998            $666,666.67
            and September 30, 1998
-----------------------------------------------------------------
        December 31, 1998, March 31,               $750,000
          1999, June 30, 1999 and
            September 30, 1999
-----------------------------------------------------------------
        December 31, 1999, March 31,              $1,000,000
          2000, June 30, 2000 and
            September 30, 2000
-----------------------------------------------------------------
        December 31, 2000, March 31,              $1,250,000
          2001, June 30, 2001 and
            September 30, 2001
-----------------------------------------------------------------
        December 31, 2001, March 31,              $1,500,000
          2002, June 30, 2002 and
            September 30, 2002
-----------------------------------------------------------------

          (e)  INTEREST.  Subject to the provisions of Section 3.1, the
     Tranche A Term Loan shall bear interest at a per annum rate equal to:

               (i)     BASE RATE LOANS. During such periods as the
          Tranche A Term Loan shall be comprised in whole or in part of Base
          Rate Loans, such Base Rate Loans shall bear interest at a per annum
          rate equal to the Adjusted Base Rate.

               (ii)    EURODOLLAR LOANS. During such periods as the
          Tranche A Term Loan shall be comprised in whole or in part of
          Eurodollar Loans, such Eurodollar Loans shall bear interest at a per
          annum rate equal to the Adjusted Eurodollar Rate.

     Interest on the Tranche A Term Loan shall be payable in arrears on each
     applicable Interest Payment Date (or at such other times as may be
     specified herein).

          (f)  TRANCHE A TERM NOTES.  The portion of the Tranche A Term
     Loan made by each Lender shall be evidenced by a duly executed promissory
     note of the Borrower to such Lender in an original principal amount equal
     to such Lender's Tranche A Term Loan Commitment Percentage of the Tranche A
     Term Loan and substantially in the form of EXHIBIT 2.4(f).


                                      43
<PAGE>

          2.5  TRANCHE B TERM LOAN.

          (a)  TRANCHE B TERM COMMITMENT. Subject to the terms and
     conditions hereof and in reliance upon the representations and warranties
     set forth herein, each Lender severally agrees to make available to the
     Borrower on the Effective Date such Lender's Tranche B Term Loan Commitment
     Percentage of a term loan in Dollars (the "TRANCHE B TERM LOAN") in the
     aggregate principal amount of THIRTY MILLION DOLLARS ($30,000,000) (the
     "TRANCHE B TERM LOAN COMMITTED AMOUNT") for the purposes hereinafter set
     forth.  The Tranche B Term Loan may consist of Base Rate Loans or
     Eurodollar Loans, or a combination thereof, as the Borrower may request;
     PROVIDED, HOWEVER, that no more than 16 Eurodollar Loans shall be
     outstanding hereunder at any time.  For purposes hereof, Eurodollar Loans
     with different Interest Periods shall be considered as separate Eurodollar
     Loans, even if they begin on the same date, although borrowings, extensions
     and conversions may, in accordance with the provisions hereof, be combined
     at the end of existing Interest Periods to constitute a new Eurodollar Loan
     with a single Interest Period.  Amounts repaid on the Tranche B Term Loan
     may not be reborrowed.

          (b)  BORROWING PROCEDURES. The Borrower shall submit an
     appropriate Notice of Borrowing to the Agent not later than 12:00 Noon
     (Charlotte, North Carolina time) on the Effective Date, with respect to the
     portion of the Tranche B Term Loan initially consisting of a Base Rate
     Loan, or on the third Business Day prior to the Effective Date, with
     respect to the portion of the Tranche B Term Loan initially consisting of
     one or more Eurodollar Loans, which Notice of Borrowing shall be
     irrevocable and shall specify (i) that the funding of a Tranche B Term Loan
     is requested and (ii) whether the funding of the Tranche B Term Loan shall
     be comprised of Base Rate Loans, Eurodollar Loans or a combination thereof,
     and if Eurodollar Loans are requested, the Interest Period(s) therefor.  If
     the Borrower shall fail to deliver such Notice of Borrowing to the Agent by
     12:00 Noon (Charlotte, North Carolina time) on the third Business Day prior
     to the Effective Date, then the full amount of the Tranche B Term Loan
     shall be disbursed on the Effective Date as a Base Rate Loan.  Each Lender
     shall make its Tranche B Term Loan Commitment Percentage of the Tranche B
     Term Loan available to the Agent for the account of the Borrower at the
     office of the Agent specified in SCHEDULE 2.1(a), or at such other office
     as the Agent may designate in writing, by 2:00 P.M. (Charlotte, North
     Carolina time) on the Effective Date in Dollars and in funds immediately
     available to the Agent.

          (c)  MINIMUM AMOUNTS.  Each Eurodollar Loan or Base Rate Loan
     that is part of the Tranche B Term Loan shall be in an aggregate principal
     amount that is not less than $2,500,000 and integral multiples of $500,000
     (or the then remaining principal balance of the Tranche B Term Loan, if
     less).

          (d)  REPAYMENT OF TRANCHE B TERM LOAN.  The principal amount
     of the Tranche B Term Loan shall be repaid in twenty-eight (27) consecutive
     quarterly installments as follows, unless accelerated sooner pursuant to
     Section 9.2:


                                      44
<PAGE>

-----------------------------------------------------------------------
                                                 TRANCHE B TERM
      PRINCIPAL AMORTIZATION                     LOAN PRINCIPAL
          PAYMENT DATES                           AMORTIZATION
                                                    PAYMENT
-----------------------------------------------------------------------
  March 31, 1998, June 30, 1998                    $333,333.33
     and September 30, 1998
-----------------------------------------------------------------------
  December 31, 1998, March 31,                      $250,000
  1999, June 30, 1999, September 30,
  1999, December 31, 1999, March 31,
  2000, June 30, 2000, September 30,
  2000, December 31, 2000, March 31,
  2001, June 30, 2001, September 30,
  2001, December 31, 2001, March 31,
       2002, June 30, 2002 and
          September 30, 2002
-----------------------------------------------------------------------
  December 31, 2002, March 31,                      $2,500,000
   2003, June 30, 2003 and
      September 30, 2003
-----------------------------------------------------------------------
  December 31, 2003, March 31,                      $3,750,000
    2004, June 30, 2004 and
       September 30, 2004
-----------------------------------------------------------------------

          (e)  INTEREST.  Subject to the provisions of Section 3.1, the
     Tranche B Term Loan shall bear interest at a per annum rate equal to:

               (i)     BASE RATE LOANS. During such periods as the
          Tranche B Term Loan shall be comprised in whole or in part of Base
          Rate Loans, such Base Rate Loans shall bear interest at a per annum
          rate equal to the Adjusted Base Rate.

               (ii)    EURODOLLAR LOANS. During such periods as the
          Tranche B Term Loan shall be comprised in whole or in part of
          Eurodollar Loans, such Eurodollar Loans shall bear interest at a per
          annum rate equal to the Adjusted Eurodollar Rate.

     Interest on the Tranche B Term Loan shall be payable in arrears on each
     applicable Interest Payment Date (or at such other times as may be
     specified herein).

          (f)  TRANCHE B TERM NOTES.  The portion of the Tranche B Term
     Loan made by each Lender shall be evidenced by a duly executed promissory
     note of the Borrower to such Lender in an original principal amount equal
     to such Lender's Tranche B Term Loan Commitment Percentage of the Tranche B
     Term Loan and substantially in the form of EXHIBIT 2.5(f).


                                      45

<PAGE>

SECTION 3

     OTHER PROVISIONS RELATING TO CREDIT FACILITIES

          3.1  DEFAULT RATE.

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

          3.2  EXTENSION AND CONVERSION.

     Subject to the terms of Section 5.3, the Borrower shall have the option, on
any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
PROVIDED, HOWEVER, that (i) except as provided in Section 3.8, Eurodollar Loans
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "INTEREST PERIOD" set forth in Section 1.1 and shall be in
such minimum amounts as provided in, with respect to Revolving Loans, Section
2.1(b)(ii), with respect to Acquisition Loans, Section 2.3(b)(ii), with respect
to the Tranche A Term Loan, Section 2.4(c), or, with respect to the Tranche B
Term Loan, Section 2.5(c), (iv) no more than 16 Eurodollar Loans shall be
outstanding hereunder at any time (it being understood that, for purposes
hereof, Eurodollar Loans with different Interest Periods shall be considered as
separate Eurodollar Loans, even if they begin on the same date, although
borrowings, extensions and conversions may, in accordance with the provisions
hereof, be combined at the end of existing Interest Periods to constitute a new
Eurodollar Loan with a single Interest Period) and (v) any request for extension
or conversion of a Eurodollar Loan which shall fail to specify an Interest
Period shall be deemed to be a request for an Interest Period of one month.
Each such extension or conversion shall be effected by the Borrower by giving a
Notice of Extension/Conversion (or telephonic notice promptly confirmed in
writing) to the office of the Agent specified in specified in SCHEDULE 2.1(a),
or at such other office as the Agent may designate in writing, prior to 12:00
Noon (Charlotte, North Carolina time) on the Business Day of, in the case of the
conversion of a Eurodollar Loan into a Base Rate Loan, and on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto.  Each request for extension or conversion
shall be irrevocable and shall constitute a representation and warranty by the
Borrower of the matters specified in subsections (b), (c) and (d) of
Section 5.3.  In the event the Borrower fails to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any
such conversion or extension is not


                                      46

<PAGE>

permitted or required by this Section, then such Eurodollar Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest
Period applicable thereto.  The Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion
affecting any Loan.

          3.3  PREPAYMENTS.

          (a)  VOLUNTARY PREPAYMENTS.  The Borrower shall have the
     right to prepay Loans in whole or in part from time to time, but
     otherwise without premium or penalty; PROVIDED, HOWEVER, that each
     partial prepayment of Loans shall be in a minimum principal amount of
     $2,500,000 and integral multiples of $500,000.  Subject to the foregoing
     terms, amounts prepaid under this Section 3.3(a) shall be applied as the
     Borrower may elect; PROVIDED that if the Borrower fails to specify a
     voluntary prepayment then such prepayment shall be applied first to
     Revolving Loans, second to the outstanding revolving loan portion of the
     Acquisition Loans and third pro rata to the outstanding term loan
     portion of the Acquisition Loans, the Tranche A Term Loan and the
     Tranche B Term Loan (in each case ratably to the remaining Principal
     Amortization Payments thereof), in each case first to Base Rate Loans
     and then to Eurodollar Loans in direct order of Interest Period
     maturities.  One or more holders of the Tranche B Term Loans may decline
     to accept a voluntary prepayment under this Sections 3.3(a) to the
     extent there are sufficient Tranche A Term Loans outstanding and/or
     outstandings under the term loan portion of the Acquisition Loans to be
     paid with such prepayment, in which case such declined prepayments shall
     be allocated pro rata among the outstanding term loan portion of the
     Acquisition Loans, the Tranche A Term Loans and the Tranche B Term Loans
     held by Lenders accepting such prepayment.  All prepayments under this
     Section 3.3(a) shall be subject to Section 3.12 and be accompanied by
     interest on the principal amount prepaid through the date of prepayment.

          (b)  MANDATORY PREPAYMENTS.

               (i)     REVOLVING COMMITTED AMOUNT.  If at any time, the
          sum of the aggregate principal amount of outstanding Revolving Loans
          PLUS LOC Obligations outstanding shall exceed the Revolving Committed
          Amount, the Borrower immediately shall prepay the Revolving Loans and
          (after all Revolving Loans have been repaid) cash collateralize the
          LOC Obligations, in an amount sufficient to eliminate such excess.

               (ii)    EXCESS CASH FLOW.  Within 90 days after the end
          of each fiscal year (commencing with the fiscal year ending June
          30, 1998), the Borrower shall prepay the Loans in an amount equal
          to (w) 50% of the Excess Cash Flow earned during such prior fiscal
          year LESS (x) the amount of any voluntary prepayments of the
          Tranche A Term Loan, the Tranche B Term Loan, (to the extent
          accompanied by a reduction in the Revolving Committed Amount) the
          Revolving Loans or (to the extent accompanied by a reduction in the
          Acquisition Loan Committed Amount) the Acquisition Loans pursuant
          to Section 3.3(a) during such prior fiscal year LESS (z) the amount
          of any mandatory prepayments of the Tranche A Term Loan, the

                                      47
<PAGE>

          Tranche B Term Loan, (to the extent accompanied by a reduction in the
          Revolving Committed Amount) the Revolving Loans or (to the extent
          accompanied by a reduction in the Acquisition Loan Committed Amount) 
          the Acquisition Loans pursuant to Section 3.3(b)(iii), (iv) or (v) 
          during such prior fiscal year.  Any payments of Excess Cash Flow 
          shall be applied as set forth in clause (vii) below.

               (iii)   ASSET DISPOSITIONS.  Immediately upon the 
          occurrence of any Asset Disposition Prepayment Event, the Borrower 
          shall prepay the Loans in an aggregate amount equal to 100% of the 
          Net Cash Proceeds of the related Asset Disposition not applied (or 
          caused to be applied) by the Consolidated Parties during the related 
          Application Period to the purchase, acquisition or construction of 
          Eligible Assets as contemplated by the terms of Section 8.5(e) 
          (such prepayment to be applied as set forth in clause (vii) below).
          
               (iv)    DEBT ISSUANCES.  Immediately upon receipt by any
          Consolidated Party of proceeds from any Debt Issuance (excluding
          Indebtedness permitted pursuant to Section 8.1), the Borrower shall 
          prepay the Loans in an aggregate amount equal to 100% of the Net 
          Cash Proceeds of such Debt Issuance to the Lenders (such prepayment 
          to be applied as set forth in clause (vii) below).
          
               (v)     ISSUANCES OF EQUITY.  Immediately upon receipt by
          a Consolidated Party of proceeds from any Equity Issuance other 
          than an Excluded Equity Issuance, the Borrower shall prepay the 
          Loans in an aggregate amount equal to (a) if (after giving effect on 
          a pro forma basis to the reduction of Indebtedness resulting from 
          the prepayment required hereunder in connection with such Equity 
          Issuance) the Leverage Ratio as of the most recent fiscal quarter 
          end preceding the date of such Equity Issuance with respect to which 
          the Agent has received the Required Financial Information is equal 
          to or greater than 2.25 to 1.00, 66-2/3% of the Net Cash Proceeds 
          of such Equity Issuance or (b) if (after giving effect on a pro 
          forma to the reduction of Indebtedness resulting from the prepayment 
          required hereunder in connection with such Equity Issuance) the 
          Leverage Ratio as of the most recent fiscal quarter end preceding 
          the date of such Equity Issuance with respect to which 
          the Agent has received the Required Financial Information is less 
          than 2.25 to 1.00, 33-1/3% of the Net Cash Proceeds of such Equity 
          Issuance (such prepayments shall be applied as set forth in 
          clause (vii) below).
          
               (vi)    ACQUISITION PURCHASE PRICE REDUCTIONS. 
          Immediately upon receipt by a Consolidated Party of proceeds from a 
          post-closing purchase price reduction in respect of any Acquisition 
          financed in whole or in part with the proceeds of any Acquisition 
          Loans, the Borrower shall prepay the Loans to the Lenders in an 
          aggregate amount equal to 100% of such purchase price reduction 
          (such prepayments shall be applied as set forth in clause (vii) 
          below).
          
               (vii)   APPLICATION OF MANDATORY PREPAYMENTS.  All 
          amounts required to be paid pursuant to this Section 3.3(b) shall 
          be applied as follows: (A) with respect to all amounts prepaid 
          pursuant to Section 3.3(b)(i), to Revolving Loans and (after all
          
          
                                     48
<PAGE>

          Revolving Loans have been repaid) to a cash collateral account in 
          respect of LOC Obligations, (B) with respect to all amounts prepaid 
          pursuant to Section 3.3(b)(ii), pro rata to the Tranche A Term Loan, 
          the Tranche B Term Loan and, if applicable, any term loan portion of 
          the Acquisition Loans (in each case ratably to the remaining 
          Principal Amortization Payments thereof), (C) with respect to all 
          amounts prepaid pursuant to Section 3.3(b)(iii) (other than in 
          respect of any Asset Disposition involving Property described on 
          SCHEDULE 3.3(b)(vii)), (iv) or (v), pro rata to (1) Revolving Loans 
          and (after all Revolving Loans have been repaid) to a cash 
          collateral account in respect of LOC Obligations (with a 
          corresponding reduction in the Revolving Committed Amount in an 
          amount equal to all amounts applied pursuant to this clause (1)), 
          (2) any term loan portion of the Acquisition Loans (ratably to the 
          remaining Principal Amortization Payments thereof), (3) the Tranche 
          A Term Loan (ratably to the remaining Principal Amortization 
          Payments thereof) and the Tranche B Term Loan (ratably to the 
          remaining Principal Amortization Payments thereof), (D) with 
          respect to all amounts prepaid pursuant to Section 3.3(b)(iii) in 
          respect of any Asset Disposition involving Property described on 
          SCHEDULE 3.3(b)(vii), to Revolving Loans and (after all Revolving 
          Loans have been repaid) to a cash collateral account in respect of 
          LOC Obligations (without any reduction in the Revolving Committed 
          Amount) and (E) with respect to all amounts prepaid pursuant to 
          Section 3.3(b)(vi), first, to any revolving loan portion of the 
          Acquisition Loans (ratably to the remaining Principal Amortization 
          Payments thereof) and then to any term loan portion of the 
          Acquisition Loans (ratably to the remaining Principal Amortization 
          Payments thereof). One or more holders of the Tranche B Term Loans 
          may decline to accept a mandatory prepayment under Sections 
          3.3(b)(ii), (iii), (iv) or (v) to the extent there are sufficient 
          outstandings under the Tranche A Term Loans and/or any term portion 
          of the Acquisition Loans to be paid with such prepayment, in which 
          case such declined prepayments shall be allocated pro rata the term 
          loan portion(s) of the Acquisition Loans, the Tranche A Term Loans 
          and the Tranche B Term Loans held by Lenders accepting such 
          prepayments.  Within the parameters of the applications set forth 
          above, prepayments shall be applied first to Base Rate Loans and 
          then to Eurodollar Loans in direct order of Interest Period 
          maturities.  All prepayments under this Section 3.3(b) shall be 
          subject to Section 3.12 and be accompanied by interest on the 
          principal amount prepaid through the date of prepayment.

          3.4  TERMINATION AND REDUCTION OF COMMITTED AMOUNTS; INCREASE
          OF COMMITMENT.

          (a)  TERMINATION AND REDUCTION OF COMMITTED AMOUNTS.

          (i)  VOLUNTARY REDUCTIONS.

               (A)     The Borrower may from time to time permanently
          reduce or terminate the Revolving Committed Amount in whole or in part
          (in minimum aggregate amounts of $2,500,000 or in integral multiples
          of $500,000 in excess


                                               49

<PAGE>

          thereof (or, if less, the full remaining amount of the then
          applicable Revolving Committed Amount)) upon five Business Days'
          prior written notice to the Agent; PROVIDED, HOWEVER, no such
          termination or reduction shall be made which would cause the
          aggregate principal amount of outstanding Revolving Loans PLUS LOC
          Obligations outstanding to exceed the Revolving Committed Amount,
          unless, concurrently with such termination or reduction, the
          Revolving Loans are repaid to the extent necessary to eliminate
          such excess.  The Agent shall promptly notify each affected Lender
          of receipt by the Agent of any notice from the Borrower pursuant to
          this Section 3.4(a)(i).

               (B)     The Borrower may from time to time permanently
          reduce or terminate the Acquisition Loan Committed Amount in whole
          or in part (in minimum aggregate amounts of $2,500,000 or in
          integral multiples of $500,000 in excess thereof (or, if less, the
          full remaining amount of the then applicable Acquisition Loan
          Committed Amount)) upon five Business Days' prior written notice to
          the Agent; PROVIDED, HOWEVER, no such termination or reduction
          shall be made which would cause the aggregate principal amount of
          outstanding Acquisition Loans to exceed the Acquisition Loan
          Committed Amount, unless, concurrently with such termination or
          reduction, the Acquisition Loans are repaid to the extent necessary
          to eliminate such excess.  The Agent shall promptly notify each
          affected Lender of receipt by the Agent of any notice from the
          Borrower pursuant to this Section 3.4(a)(ii).

          (ii) MANDATORY REDUCTIONS.

               (A)     On any date that the Revolving Loans are
          required to be prepaid pursuant to the terms of Section 3.3(b)(iii)
          the Revolving Committed Amount automatically shall be permanently
          reduced by the amount of such required prepayment and/or reduction.

               (B)     The Acquisition Loan Committed Amount
          automatically shall be (A) permanently reduced on October 14, 1998
          by an amount equal to the principal amount of all Acquisition Loans
          advanced during the period from the Effective Date to and including
          October 14, 1998 and (B) terminated on October 14, 1999.

          (iii) MATURITY DATE.  The Revolving Commitments of the Lenders,
     the LOC Commitment of the Issuing Lender and the Acquisition Loan
     Commitments of the Lenders automatically shall terminate on the Maturity
     Date.

          (iv) GENERAL.

               (A) The Borrower shall pay to the Agent for the account
          of the Lenders in accordance with the terms of Section 3.5(a)(i),
          on the date of each termination or reduction of the Revolving
          Committed Amount, the Revolving Unused Fee accrued through the date
          of such termination or reduction on the amount of the Revolving
          Committed Amount so terminated or reduced.

                                      50


<PAGE>         (B) The Borrower shall pay to the Agent for the
          account of the Lenders in accordance with the terms of Section
          3.5(a)(ii), on the date of each termination or reduction of the
          Acquisition Loan Committed Amount, the Acquisition Loan Unused Fee
          accrued through the date of such termination or reduction on the
          amount of the Acquisition Loan Committed Amount so terminated or
          reduced.

          (b)  INCREASE IN ACQUISITION LOAN COMMITMENTS.  The Borrower
     shall have the right upon at least fifteen (15) Business Days' prior
     written notice to the Agent to increase the Acquisition Loan Committed
     Amount by up to $25,000,000, in a single increase, at any time on or after
     the Effective Date, SUBJECT, HOWEVER, in any such case, to satisfaction of
     the following conditions precedent:

               (A)     no Default or Event of Default has occurred and
          is continuing on the date on which such Acquisition Loan Committed
          Amount increase is to become effective;

               (B)     the representations and warranties set forth in
          Section 6 of this Credit Agreement shall be true and correct in all
          material respects on and as of the date on which such Acquisition
          Loan Committed Amount increase is to become effective;

               (C)     on or before the date on which such Acquisition
          Loan Committed Amount increase is to become effective, the Agent
          shall have received, for its own account, the mutually acceptable
          fees and expenses required by separate agreement of the Borrower
          and the Agent to be paid in connection with such increase;

               (D)     such Acquisition Loan Committed Amount increase
          shall be an integral multiple of $1,000,000 and shall in no event
          be less than $5,000,000; and

               (E)     such requested Commitment increase shall be
          effective on such date only to the extent that, on or before such
          date, (A) the Agent shall have received and accepted a
          corresponding amount of Additional Commitment(s) pursuant to a
          commitment letter(s) acceptable to the Agent from one or more
          Lenders acceptable to the Agent and, with respect to any Lender
          that is not at such time a Lender hereunder, the Borrower and (B)
          each such Lender has executed an agreement in the form of EXHIBIT
          3.4(b) hereto (each such agreement a "NEW COMMITMENT AGREEMENT"),
          accepted in writing therein by the Agent and, with respect to any
          Lender that is not at such time a Lender hereunder, the Borrower,
          with respect to the Additional Commitment of such Lender.

                                      51

<PAGE>


          3.5  FEES.

          (a)  UNUSED FEES.

               (i)     REVOLVING CREDIT FACILITY UNUSED FEE.  In
          consideration of the Revolving Commitments of the Lenders
          hereunder, the Borrower agrees to pay to the Agent for the account
          of each Lender a fee (the "REVOLVING UNUSED FEE") on such Lender's
          Revolving Commitment Percentage of the Unused Revolving Committed
          Amount computed at a per annum rate for each day during the
          applicable Revolving Unused Fee Calculation Period (hereinafter
          defined) at a rate equal to the Applicable Percentage in effect
          from time to time. The Revolving Unused Fee shall commence to
          accrue on the Effective Date and shall be due and payable in
          arrears on the last business day of each March, June, September and
          December (and any date that the Revolving Committed Amount is
          reduced as provided in Section 3.4(a) and the Maturity Date) for
          the immediately preceding quarter (or portion thereof) (each such
          quarter or portion thereof for which the Revolving Unused Fee is
          payable hereunder being herein referred to as an "REVOLVING UNUSED
          FEE CALCULATION PERIOD"), beginning with the first of such dates to
          occur after the Effective Date.

               (ii)    ACQUISITION LOAN UNUSED FEE.  In consideration
          of the Acquisition Loan Commitments of the Lenders hereunder, the
          Borrower agrees to pay to the Agent for the account of each Lender
          a fee (the "ACQUISITION LOAN UNUSED FEE") on such Lender's
          Acquisition Loan Commitment Percentage of the Unused Acquisition
          Loan Committed Amount computed at a per annum rate for each day
          during the applicable Acquisition Loan Unused Fee Calculation
          Period (hereinafter defined) at a rate equal to the Applicable
          Percentage in effect from time to time.  The Acquisition Loan
          Unused Fee shall commence to accrue on the Effective Date and shall
          be due and payable in arrears on the last business day of each
          March, June, September and December (and any date that the
          Revolving Committed Amount is reduced as provided in Section 3.4(a)
          and the Maturity Date) for the immediately preceding quarter (or
          portion thereof) (each such quarter or portion thereof for which
          the Acquisition Loan Unused Fee is payable hereunder being herein
          referred to as an "ACQUISITION LOAN UNUSED FEE CALCULATION
          PERIOD"), beginning with the first of such dates to occur after the
          Effective Date.

          (b)  LETTER OF CREDIT FEES.

               (i)     STANDBY LETTER OF CREDIT ISSUANCE FEE.  In
          consideration of the issuance of standby Letters of Credit
          hereunder, the Borrower promises to pay to the Agent for the
          account of each Lender a fee (the "STANDBY LETTER OF CREDIT FEE")
          on such Lender's Revolving Commitment Percentage of the average
          daily maximum amount available to be drawn under each such standby
          Letter of Credit computed at a per annum rate for each day from the
          date of issuance to the date of expiration equal to the Applicable
          Percentage.  The Standby Letter of Credit Fee will be payable
          quarterly in arrears on the last Business Day of each March, June,

                                      52

<PAGE>


          September and December for the immediately preceding quarter (or a
          portion thereof).

               (ii)    TRADE LETTER OF CREDIT DRAWING FEE. In
          consideration of the issuance of trade Letters of Credit hereunder,
          the Borrower promises to pay to the Agent for the account of each
          Lender a fee (the "TRADE LETTER OF CREDIT FEE") equal to the
          Applicable Percentage on such Lender's Revolving Commitment
          Percentage of the amount of each drawing under any such trade
          Letter of Credit. The Trade Letter of Credit Fee will be payable on
          each date of drawing under a trade Letter of Credit.

               (iii)   ISSUING LENDER FEES.  In addition to the
          Standby Letter of Credit Fee payable pursuant to clause (i) above
          and the Trade Letter of Credit Fee payable pursuant to clause (ii)
          above, the Borrower promises to pay to the Issuing Lender for its
          own account without sharing by the other Lenders (a) a standby
          letter of credit fronting fee equal to 0.25% on the average daily
          maximum amount available to be drawn under each such standby Letter
          of Credit (such fee to be payable quarterly in arrears on the last
          Business Day of each March, June, September and December for the
          immediately preceding quarter (or a portion thereof)), (b) a trade
          letter of credit drawing fee equal to 0.25% on the amount of each
          drawing under any such trade Letter of Credit (such fee to be
          payable on each date of drawing under a trade Letter of Credit) and
          (c) the customary charges from time to time of the Issuing Lender
          with respect to the issuance, amendment, transfer, administration,
          cancellation and conversion of, and drawings under, such Letters of
          Credit (collectively, the "ISSUING LENDER FEES").

          (c)  ADMINISTRATIVE FEES.  The Borrower agrees to pay to the
     Agent, for its own account and NationsBanc Montgomery Securities, Inc., as
     applicable, the fees referred to in the Agent's Fee Letter (collectively,
     the "AGENT'S FEES").

          3.6  CAPITAL ADEQUACY.

     If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy), then, upon notice from
such Lender to the Borrower, the Borrower shall be obligated to pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.  Any Lender claiming compensation under this Section 3.6 shall
furnish to the Borrower and the Agent a statement setting forth in reasonable
detail the additional amount or amounts payable to it hereunder and the
calculations used to determine such amount or amounts, which statement shall be
conclusive and binding on the

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parties hereto in the absence of manifest error. In determining such amount, 
such Lender may use any reasonable averaging and attribution methods.

          3.7  LIMITATION ON EURODOLLAR LOANS.

     If on or prior to the first day of any Interest Period for any Eurodollar
Loan:

          (a)  the Agent determines (which determination shall be
     conclusive) that by reason of circumstances affecting the relevant market,
     adequate and reasonable means do not exist for ascertaining the Eurodollar
     Rate for such Interest Period; or

          (b)  the Required Lenders determine (which determination shall
     be conclusive) and notify the Agent that the Eurodollar Rate will not
     adequately and fairly reflect the cost to the Lenders of funding Eurodollar
     Loans for such Interest Period;

then the Agent shall give the Borrower prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make additional Eurodollar Loans, Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans and the Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans, either
prepay such Eurodollar Loans or Convert such Eurodollar Loans into Base Rate
Loans in accordance with the terms of this Credit Agreement.

          3.8  ILLEGALITY.

     Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).

          3.9  REQUIREMENTS OF LAW.

     (a)  If, after the date hereof, the adoption of any applicable law, rule,
or regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:

               (i)     shall subject such Lender (or its Applicable
     Lending Office) to any tax, duty, or other charge with respect to any
     Eurodollar Loans, its Notes, or its obligation to make Eurodollar Loans, or
     change the basis of taxation of any amounts payable to such Lender (or its
     Applicable Lending Office) under this Credit Agreement or its Notes in

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<PAGE>

     respect of any Eurodollar Loans (other than taxes imposed on the overall
     net income of such Lender by the jurisdiction in which such Lender has its
     principal office or such Applicable Lending Office);

               (ii)    shall impose, modify, or deem applicable any
     reserve, special deposit, assessment, or similar requirement (other than
     the Eurodollar Reserve Requirement utilized in the determination of the
     Adjusted Eurodollar Rate) relating to any extensions of credit or other
     assets of, or any deposits with or other liabilities or commitments of,
     such Lender (or its Applicable Lending Office), including the Commitment of
     such Lender hereunder; or

               (iii)   shall impose on such Lender (or its Applicable
     Lending Office) or on the United States market for certificates of deposit
     or the London interbank market any other condition affecting this Credit
     Agreement or its Notes or any of such extensions of credit or liabilities
     or commitments;

and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction.  If any Lender requests compensation by the
Borrower under this Section 3.9(a), the Borrower may, by notice to such Lender
(with a copy to the Agent), suspend the obligation of such Lender to make or
Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans,
until the event or condition giving rise to such request ceases to be in effect
(in which case the provisions of Section 3.10 shall be applicable); PROVIDED
that such suspension shall not affect the right of such Lender to receive the
compensation so requested.

     (b)  Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 3.9 and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it.  Any Lender
claiming compensation under this Section 3.9 shall furnish to the Borrower and
the Agent a statement setting forth in reasonable detail the additional amount
or amounts payable to it hereunder and the calculations used to determine such
amount or amounts, which statement shall be conclusive and binding on the
parties hereto in the absence of manifest error.  In determining such amount,
such Lender may use any reasonable averaging and attribution methods.

          3.10 TREATMENT OF AFFECTED LOANS.

     If the obligation of any Lender to make any Eurodollar Loan or to Continue,
or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant
to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the 

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<PAGE>

Borrower with a copy to the Agent) and, unless and until such Lender gives 
notice as provided below that the circumstances specified in Section 3.8 or 
3.9 hereof that gave rise to such Conversion no longer exist:

          (a)  to the extent that such Lender's Eurodollar Loans have been so
     Converted, all payments and prepayments of principal that would otherwise
     be applied to such Lender's Eurodollar Loans shall be applied instead to
     its Base Rate Loans; and

          (b)  all Loans that would otherwise be made or Continued by such
     Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
     Loans, and all Base Rate Loans of such Lender that would otherwise be
     Converted into Eurodollar Loans shall remain as Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.8 or 3.9 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 3.10 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto,
all Loans held by the Lenders holding Eurodollar Loans and by such Lender are
held pro rata (as to principal amounts, interest rate basis, and Interest
Periods) in accordance with their respective Commitments.   

          3.11 TAXES.

          (a)  Any and all payments by the Borrower to or for the 
     account of any Lender or the Agent hereunder or under any other Credit 
     Document shall be made free and clear of and without deduction for any 
     and all present or future taxes, duties, levies, imposts, deductions, 
     charges or withholdings, and all liabilities with respect thereto, 
     EXCLUDING, in the case of each Lender and the Agent, taxes imposed on 
     its income, and franchise taxes imposed on it, by the jurisdiction under 
     the laws of which such Lender (or its Applicable Lending Office) or the 
     Agent (as the case may be) is organized or any political subdivision 
     thereof (all such non-excluded taxes, duties, levies, imposts, 
     deductions, charges, withholdings, and liabilities being hereinafter 
     referred to as "TAXES").  If the Borrower shall be required by law to 
     deduct any Taxes from or in respect of any sum payable under this Credit 
     Agreement or any other Credit Document to any Lender or the Agent, (i) 
     the sum payable shall be increased as necessary so that after making all 
     required deductions (including deductions applicable to additional sums 
     payable under this Section 3.11) such Lender or the Agent receives an 
     amount equal to the sum it would have received had no such deductions 
     been made, (ii) the Borrower shall make such deductions, (iii) the 
     Borrower shall pay the full amount deducted to the relevant taxation 
     authority or other authority in accordance with applicable law, and (iv) 
     the Borrower shall furnish to the Agent, at its address referred to in 
     Section 11.1, the original or a certified copy of a receipt evidencing 
     payment thereof.

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<PAGE>

          (b)  In addition, the Borrower agrees to pay any and all
     present or future stamp or documentary taxes and any other excise or
     property taxes or charges or similar levies which arise from any payment
     made under this Credit Agreement or any other Credit Document or from the
     execution or delivery of, or otherwise with respect to, this Credit
     Agreement or any other Credit Document (hereinafter referred to as "OTHER
     TAXES").

          (c)  The Borrower agrees to indemnify each Lender and the
     Agent for the full amount of Taxes and Other Taxes (including, without
     limitation, any Taxes or Other Taxes imposed or asserted by any
     jurisdiction on amounts payable under this Section 3.11) paid by such
     Lender or the Agent (as the case may be) and any liability (including
     penalties, interest, and expenses) arising therefrom or with respect
     thereto.  
     
          (d)  Each Lender organized under the laws of a jurisdiction
     outside the United States, on or prior to the date of its execution and
     delivery of this Credit Agreement in the case of each Lender listed on the
     signature pages hereof and on or prior to the date on which it becomes a
     Lender in the case of each other Lender, and from time to time thereafter
     if requested in writing by the Borrower or the Agent (but only so long as
     such Lender remains lawfully able to do so), shall provide the Borrower and
     the Agent with (i) Internal Revenue Service Form 1001 or 4224, as
     appropriate, or any successor form prescribed by the Internal Revenue
     Service, certifying that such Lender is entitled to benefits under an
     income tax treaty to which the United States is a party which reduces the
     rate of withholding tax on payments of interest or certifying that the
     income receivable pursuant to this Credit Agreement is effectively
     connected with the conduct of a trade or business in the United States,
     (ii) Internal Revenue Service Form W-8 or W-9, as appropriate, or any
     successor form prescribed by the Internal Revenue Service, and (iii) any
     other form or certificate required by any taxing authority (including any
     certificate required by Sections 871(h) and 881(c) of the Internal Revenue
     Code), certifying that such Lender is entitled to an exemption from or a
     reduced rate of tax on payments pursuant to this Credit Agreement or any of
     the other Credit Documents.
     
          (e)  For any period with respect to which a Lender has failed
     to provide the Borrower and the Agent with the appropriate form pursuant to
     Section 3.11(d) (unless such failure is due to a change in treaty, law, or
     regulation occurring subsequent to the date on which a form originally was
     required to be provided), such Lender shall not be entitled to
     indemnification under Section 3.11(a) or 3.11(b) with respect to Taxes
     imposed by the United States; PROVIDED, HOWEVER, that should a Lender,
     which is otherwise exempt from or subject to a reduced rate of withholding
     tax, become subject to Taxes because of its failure to deliver a form
     required hereunder, the Borrower shall take such steps as such Lender shall
     reasonably request to assist such Lender to recover such Taxes.
     
          (f)  If the Borrower is required to pay additional amounts to
     or for the account of any Lender pursuant to this Section 3.11, then such
     Lender will agree to use reasonable efforts to change the jurisdiction of
     its Applicable Lending Office so as to eliminate or reduce any such
     additional payment which may thereafter accrue if such change, in the
     judgment of such Lender, is not otherwise disadvantageous to such Lender.

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<PAGE>

          (g)  Within thirty (30) days after the date of any payment of
     Taxes, the Borrower shall furnish to the Agent the original or a certified
     copy of a receipt evidencing such payment.

          (h)  Any Lender claiming compensation under this Section 3.11
     shall furnish to the Borrower and the Agent a statement setting forth in
     reasonable detail the additional amount or amounts payable to it hereunder
     and the calculations used to determine such amount or amounts, which
     statement shall be conclusive and binding on the parties hereto in the
     absence of manifest error.

          (i)  Without prejudice to the survival of any other agreement
     of the Borrower hereunder, the agreements and obligations of the Borrower
     contained in this Section 3.11 shall survive the repayment of the Loans,
     LOC Obligations and other obligations under the Credit Documents and the
     termination of the Commitments hereunder.

          3.12 COMPENSATION.

     Upon the request of any Lender, the Borrower shall pay to such Lender such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense (including loss of
anticipated profits) incurred by it as a result of:

          (a)  any payment, prepayment, or Conversion of a Eurodollar
     Loan for any reason (including, without limitation, the acceleration of the
     Loans pursuant to Section 9.2) on a date other than the last day of  the
     Interest Period for such Loan; or

          (b)  any failure by the Borrower for any reason (including,
     without limitation, the failure of any condition precedent specified in
     Section 5 to be satisfied) to borrow, Convert, Continue, or prepay a
     Eurodollar Loan on the date for such borrowing, Conversion, Continuation,
     or prepayment specified in the relevant notice of borrowing, prepayment,
     Continuation, or Conversion under this Credit Agreement. 

With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market.  The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans, LOC Obligations and other obligations under the Credit Documents and the
termination of the Commitments hereunder.

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          3.13 PRO RATA TREATMENT.

     Except to the extent otherwise provided herein:

          (a)  LOANS.  Each Loan, each payment or (subject to the terms
     of Section 3.3) prepayment of principal of any Loan or reimbursement
     obligations arising from drawings under Letters of Credit, each payment of
     interest on the Loans or reimbursement obligations arising from drawings
     under Letters of Credit, each payment of Revolving Unused Fees, each
     payment of Acquisition Loan Unused Fees, each payment of the Standby Letter
     of Credit Fee, each payment of the Trade Letter of Credit Fee, each
     reduction of the Revolving Committed Amount and each conversion or
     extension of any Loan, shall be allocated pro rata among the Lenders in
     accordance with the respective principal amounts of their outstanding Loans
     and Participation Interests.

          (b)  ADVANCES.  No Lender shall be responsible for the failure
     or delay by any other Lender in its obligation to make its ratable share of
     a borrowing hereunder; PROVIDED, HOWEVER, that the failure of any Lender to
     fulfill its obligations hereunder shall not relieve any other Lender of its
     obligations hereunder.  Unless the Agent shall have been notified by any
     Lender prior to the date of any requested borrowing that such Lender does
     not intend to make available to the Agent its ratable share of such
     borrowing to be made on such date, the Agent may assume that such Lender
     has made such amount available to the Agent on the date of such borrowing,
     and the Agent in reliance upon such assumption, may (in its sole discretion
     but without any obligation to do so) make available to the Borrower a
     corresponding amount.  If such corresponding amount is not in fact made
     available to the Agent, the Agent shall be able to recover such
     corresponding amount from such Lender.  If such Lender does not pay such
     corresponding amount forthwith upon the Agent's demand therefor, the Agent
     will promptly notify the Borrower, and the Borrower shall immediately pay
     such corresponding amount to the Agent.  The Agent shall also be entitled
     to recover from the Lender or the Borrower, as the case may be, interest on
     such corresponding amount in respect of each day from the date such
     corresponding amount was made available by the Agent to the Borrower to the
     date such corresponding amount is recovered by the Agent at a per annum
     rate equal to (i) from the Borrower at the applicable rate for the
     applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
     Lender at the Federal Funds Rate.  Nothing contained in this Section
     3.13(b) shall be deemed to constitute a waiver by the Borrower of its
     rights in respect of any claim for breach of contract relating to the
     wrongful failure (as determined by a court of competent jurisdiction) of
     any Lender to make any Loan on the date of the requested borrowing.

          3.14 SHARING OF PAYMENTS.

     The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligations or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under

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<PAGE>

any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans, LOC Obligations and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement.  The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit (together with its share of any accrued
interest payable with respect thereto) to each Lender whose payment shall have
been rescinded or otherwise restored.  The Borrower agrees that any Lender so
purchasing such a Participation Interest may, to the fullest extent permitted by
law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such Participation Interest as fully as if such
Lender were a holder of such Loan, LOC Obligations or other obligation in the
amount of such Participation Interest.  Except as otherwise expressly provided
in this Credit Agreement, if any Lender or the Agent shall fail to remit to the
Agent or any other Lender an amount payable by such Lender or the Agent to the
Agent or such other Lender pursuant to this Credit Agreement on the date when
such amount is due, such payments shall be made together with interest thereon
for each date from the date such amount is due until the date such amount is
paid to the Agent or such other Lender at a rate per annum equal to the Federal
Funds Rate.  If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section 3.14 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 3.14 to share in the benefits of any recovery
on such secured claim.

          3.15 PAYMENTS, COMPUTATIONS, ETC. 

          (a)  Except as otherwise specifically provided herein, all
     payments hereunder shall be made to the Agent in dollars in immediately
     available funds, without offset, deduction, counterclaim or withholding of
     any kind, at the Agent's office specified in SCHEDULE 2.1(a) not later than
     2:00 P.M. (Charlotte, North Carolina time) on the date when due.  Payments
     received after such time shall be deemed to have been received on the next
     succeeding Business Day.  The Agent may (but shall not be obligated to)
     debit the amount of any such payment which is not made by such time to any
     ordinary deposit account of the Borrower maintained with the Agent (with
     notice to the Borrower).  The Borrower shall, at the time it makes any
     payment under this Credit Agreement, specify to the Agent the Loans, LOC
     Obligations, Fees, interest or other amounts payable by the Borrower
     hereunder to which such payment is to be applied (and in the event that it
     fails so to specify, or if such application would be inconsistent with the
     terms hereof, the Agent shall distribute such payment to the Lenders in
     such manner as the Agent may determine to be appropriate in respect of
     obligations owing by the Borrower hereunder, subject to the terms of
     Section 3.13(a)).  The Agent will distribute such payments to such Lenders,
     if any such payment is received prior to 12:00 Noon (Charlotte, North
     Carolina time) on a Business Day in like funds as received prior to the end
     of such Business Day and otherwise the Agent will distribute such payment
     to such Lenders on the next succeeding Business Day.  Whenever 

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     any payment hereunder shall be stated to be due on a day which is not a 
     Business Day, the due date thereof shall be extended to the next 
     succeeding Business Day (subject to accrual of interest and Fees for the 
     period of such extension), except that in the case of Eurodollar Loans, 
     if the extension would cause the payment to be made in the next 
     following calendar month, then such payment shall instead be made on the 
     next preceding Business Day.  Except as expressly provided otherwise 
     herein, all computations of interest and fees shall be made on the basis 
     of actual number of days elapsed over a year of 360 days, except with 
     respect to computation of interest on Base Rate Loans which (unless the 
     Base Rate is determined by reference to the Federal Funds Rate) shall be 
     calculated based on a year of 365 or 366 days, as appropriate.  Interest 
     shall accrue from and include the date of borrowing, but exclude the 
     date of payment.

          (b)  ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. 
     Notwithstanding any other provisions of this Credit Agreement to the
     contrary, after the occurrence and during the continuance of an Event of
     Default, all amounts collected or received by the Agent or any Lender on
     account of the Credit Party Obligations or any other amounts outstanding
     under any of the Credit Documents or in respect of the Collateral shall be
     paid over or delivered as follows:

          FIRST, to the payment of all reasonable out-of-pocket costs and
     expenses (including without limitation reasonable attorneys' fees) of the
     Agent in connection with enforcing the rights of the Lenders under the
     Credit Documents and any protective advances made by the Agent with respect
     to the Collateral under or pursuant to the terms of the Collateral
     Documents;

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

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

          FOURTH, to the payment of all of the Credit Party Obligations
     consisting of accrued fees and interest;

          FIFTH, to the payment of the outstanding principal amount of the
     Credit Party Obligations (including the payment or cash collateralization
     of the outstanding LOC Obligations);

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

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

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<PAGE>

     In carrying out the foregoing, (i) amounts received shall be applied in the
     numerical order provided until exhausted prior to application to the next
     succeeding category; (ii) each of the Lenders shall receive an amount equal
     to its pro rata share (based on the proportion that the then outstanding
     Loans and LOC Obligations held by such Lender bears to the aggregate then
     outstanding Loans and LOC Obligations) of amounts available to be applied
     pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above; and
     (iii) to the extent that any amounts available for distribution pursuant to
     clause "FIFTH" above are attributable to the issued but undrawn amount of
     outstanding Letters of Credit, such amounts shall be held by the Agent in a
     cash collateral account and applied (A) first, to reimburse the Issuing
     Lender from time to time for any drawings under such Letters of Credit and
     (B) then, following the expiration of all Letters of Credit, to all other
     obligations of the types described in clauses "FIFTH" and "SIXTH" above in
     the manner provided in this Section 3.15(b).

          3.16 EVIDENCE OF DEBT.

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

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

          (c)  The entries made in the accounts, Register and
     subaccounts maintained pursuant to subsection (b) of this Section 3.16
     (and, if consistent with the entries of the Agent, subsection (a)) shall be
     prima facie evidence of the existence and amounts of the obligations of the
     Borrower therein recorded; PROVIDED, HOWEVER, that the failure of any
     Lender or the Agent to maintain any such account, such Register or such
     subaccount, as applicable, or any error therein, shall not in any manner
     affect the obligation of the Borrower to repay the Loans made by such
     Lender in accordance with the terms hereof. 

          3.17 Mandatory Assignment.
     
     In the event that any Lender delivers to the Borrower, a demand for payment
in accordance with Section 3.6, 3.9 or 3.11 then, provided that no Default or
Event of Default has 

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occurred and is continuing at such time, the Borrower may, at its own expense 
(such expense to include the administrative fee payable to the Agent under 
Section 11.3(b)), and with the consent of the Agent (such consent not to be 
unreasonably withheld), require such Lender to transfer and assign in whole, 
without recourse (in accordance with and subject to the terms and conditions 
of Section 11.3), all of its interests, rights and obligations under this 
Credit Agreement to an Eligible Assignee which shall assume such assigned 
obligations; PROVIDED that (i) such assignment shall not conflict with any 
law, rule or regulation or order of any court or any Governmental Authority 
and (ii) the Borrower or such assignee shall have paid to the assigning 
Lender in immediately available funds the principal of and interest accrued 
to the date of such payment on the Loans made by it hereunder and all other 
amounts owed to it hereunder.

SECTION 4
     
     GUARANTY

          4.1  THE GUARANTY.

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

     Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, the obligations of each
Guarantor hereunder shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance
under Section 548 of the Bankruptcy Code or any comparable provisions of any
applicable state law.

          4.2  OBLIGATIONS UNCONDITIONAL.

     The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or 

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equitable discharge or defense of a surety or guarantor, it being the intent 
of this Section 4.2 that the obligations of the Guarantors hereunder shall be 
absolute and unconditional under any and all circumstances.  Each Guarantor 
agrees that such Guarantor shall have no right of subrogation, indemnity, 
reimbursement or contribution against the Borrower or any other Guarantor of 
the Credit Party Obligations for amounts paid under this Section 4 until such 
time as the Lenders (and any Affiliates of Lenders entering into Hedging 
Agreements) have been paid in full, all Commitments under this Credit 
Agreement have been terminated and no Person or Governmental Authority shall 
have any right to request any return or reimbursement of funds from the 
Lenders in connection with monies received under the Credit Documents or 
Hedging Agreements.  Without limiting the generality of the foregoing, it is 
agreed that, to the fullest extent permitted by law, the occurrence of any 
one or more of the following shall not alter or impair the liability of any 
Guarantor hereunder which shall remain absolute and unconditional as 
described above:

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

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

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

          (d)  any Lien granted to, or in favor of, the Agent or any
     Lender or Lenders as security for any of the Credit Party Obligations shall
     fail to attach or be perfected; or

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

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

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          4.3  REINSTATEMENT.

     The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, fees and expenses of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.

          4.4  CERTAIN ADDITIONAL WAIVERS.

     Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. Sections
26-7 through 26-9, inclusive, to the extent applicable.  Each Guarantor further
agrees that such Guarantor shall have no right of recourse to security for the
Credit Party Obligations, except through the exercise of rights of subrogation
pursuant to Section 4.2 and through the exercise of rights of contribution
pursuant to Section 4.6.

          4.5  REMEDIES.

     The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Agent and the Lenders, on the
other hand, the Credit Party Obligations may be declared to be forthwith due and
payable as provided in Section 9.2 (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section 9.2)
for purposes of Section 4.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1.  The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies thereunder
in accordance with the terms thereof.

          4.6  RIGHTS OF CONTRIBUTION.

     The Guarantors hereby agree as among themselves that, if any Guarantor
shall make an Excess Payment (as defined below), such Guarantor shall have a
right of contribution from each other Guarantor in an amount equal to such other
Guarantor's Contribution Share (as defined below) of such Excess Payment.  The
payment obligations of any Guarantor under this Section 4.6 

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shall be subordinate and subject in right of payment to the prior payment in 
full to the Agent and the Lenders of the Guaranteed Obligations, and none of 
the Guarantors shall exercise any right or remedy under this Section 4.6 
against any other Guarantor until payment and satisfaction in full of all of 
such Guaranteed Obligations. For purposes of this Section 4.6, (a) 
"GUARANTEED OBLIGATIONS" shall mean any obligations arising under the other 
provisions of this Section 4; (b) "EXCESS PAYMENT" shall mean the amount paid 
by any Guarantor in excess of its Pro Rata Share of any Guaranteed 
Obligations; (c) "PRO RATA SHARE" shall mean, for any Guarantor in respect of 
any payment of Guaranteed Obligations, the ratio (expressed as a percentage) 
as of the date of such payment of Guaranteed Obligations of (i) the amount by 
which the aggregate present fair salable value of all of its assets and 
properties exceeds the amount of all debts and liabilities of such Guarantor 
(including contingent, subordinated, unmatured, and unliquidated liabilities, 
but excluding the obligations of such Guarantor hereunder) to (ii) the amount 
by which the aggregate present fair salable value of all assets and other 
properties of the Borrower and all of the Guarantors exceeds the amount of 
all of the debts and liabilities (including contingent, subordinated, 
unmatured, and unliquidated liabilities, but excluding the obligations of the 
Borrower and the Guarantors hereunder) of the Borrower and all of the 
Guarantors; PROVIDED, HOWEVER, that, for purposes of calculating the Pro Rata 
Shares of the Guarantors in respect of any payment of Guaranteed Obligations, 
any Guarantor that became a Guarantor subsequent to the date of any such 
payment shall be deemed to have been a Guarantor on the date of such payment 
and the financial information for such Guarantor as of the date such 
Guarantor became a Guarantor shall be utilized for such Guarantor in 
connection with such payment; and (d) "CONTRIBUTION SHARE" shall mean, for 
any Guarantor in respect of any Excess Payment made by any other Guarantor, 
the ratio (expressed as a percentage) as of the date of such Excess Payment 
of (i) the amount by which the aggregate present fair salable value of all of 
its assets and properties exceeds the amount of all debts and liabilities of 
such Guarantor (including contingent, subordinated, unmatured, and 
unliquidated liabilities, but excluding the obligations of such Guarantor 
hereunder) to (ii) the amount by which the aggregate present fair salable 
value of all assets and other properties of the Borrower and all of the 
Guarantors other than the maker of such Excess Payment exceeds the amount of 
all of the debts and liabilities (including contingent, subordinated, 
unmatured, and unliquidated liabilities, but excluding the obligations of the 
Borrower and the Guarantors hereunder) of the Borrower and all of the 
Guarantors other than the maker of such Excess Payment; PROVIDED, HOWEVER, 
that, for purposes of calculating the Contribution Shares of the Guarantors 
in respect of any Excess Payment, any Guarantor that became a Guarantor 
subsequent to the date of any such Excess Payment shall be deemed to have 
been a Guarantor on the date of such Excess Payment and the financial 
information for such Guarantor as of the date such Guarantor became a 
Guarantor shall be utilized for such Guarantor in connection with such Excess 
Payment.  This Section 4.6 shall not be deemed to affect any right of 
subrogation, indemnity, reimbursement or contribution that any Guarantor may 
have under applicable law against the Borrower in respect of any payment of 
Guaranteed Obligations.  Notwithstanding the foregoing, all rights of 
contribution against any Guarantor shall terminate from and after such time, 
if ever, that such Guarantor shall be relieved of its obligations pursuant to 
Section 8.4.

          4.7  CONTINUING GUARANTEE.

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

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SECTION 5
     
     CONDITIONS

          5.1  CLOSING CONDITIONS.

     Subject to the terms of Section 11.13(a), this Credit Agreement shall
become effective at such time as the following conditions shall have been
satisfied (in form and substance acceptable to the Lenders):

          (a)  EXECUTED CREDIT DOCUMENTS.  Receipt by the Agent of duly
     executed copies of:  (i) this Credit Agreement; (ii) the Notes; (iii) the
     Collateral Documents and (iv) all other Credit Documents, each in form and
     substance acceptable to the Agent in its sole discretion.

          (b)  CORPORATE DOCUMENTS.  Receipt by the Agent of the
     following:

               (i)     CHARTER DOCUMENTS.  Copies of the articles or
          certificates of incorporation or other charter documents of each
          Credit Party certified to be true and complete as of a recent date by
          the appropriate Governmental Authority of the state or other
          jurisdiction of its incorporation and certified by a secretary or
          assistant secretary of such Credit Party to be true and correct as of
          the Closing Date.

               (ii)    BYLAWS.  A copy of the bylaws of each Credit Party
          certified by a secretary or assistant secretary of such Credit Party
          to be true and correct as of the Closing Date.

               (iii)   RESOLUTIONS.  Copies of resolutions of the Board
          of Directors of each Credit Party approving and adopting the Credit
          Documents to which it is a party, the transactions contemplated
          therein and authorizing execution and delivery thereof,  certified by
          a secretary or assistant secretary of such Credit Party to be true and
          correct and in force and effect as of the Closing Date.

               (iv)    GOOD STANDING.  Copies of (A) certificates of good
          standing, existence or its equivalent with respect to each Credit
          Party certified as of a recent date by the appropriate Governmental
          Authorities of the state or other jurisdiction of incorporation and
          each other jurisdiction in which the failure to so qualify and be in
          good standing could reasonably be expected to have a Material Adverse
          Effect and (B) to the extent available, a certificate indicating
          payment of all corporate franchise taxes certified as of a recent date
          by the appropriate governmental taxing authorities.

               (v)     INCUMBENCY.  An incumbency certificate of each
          Credit Party certified by a secretary or assistant secretary to be
          true and correct as of the Closing Date.

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          (c)  EVIDENCE OF INSURANCE.  Receipt by the Agent of copies of
     insurance policies or certificates of insurance of the Consolidated Parties
     evidencing liability and casualty insurance meeting the requirements set
     forth in the Credit Documents, including, but not limited to, naming the
     Agent as loss payee on behalf of the Lenders.

          (d)  FEES AND EXPENSES.  Payment by the Credit Parties of all
     fees and expenses owed by them to the Lenders and the Agent as of the
     Closing Date, including, without limitation, payment to the Agent of any
     fees set forth in the Fee Letter which are payable on such date.

          (e)  OTHER.  Receipt by the Lenders of such other documents,
     instruments, agreements or information as reasonably requested by any
     Lender, including, but not limited to, information regarding litigation,
     tax, accounting, labor, insurance, pension liabilities (actual or
     contingent), real estate leases, material contracts, debt agreements,
     property ownership and contingent liabilities of the Consolidated Parties.

          5.2  CONDITIONS TO INITIAL EXTENSIONS OF CREDIT.

     The obligation of the Lenders to make the initial Loans or the Issuing
Lender to issue the initial Letter of Credit, whichever shall occur first, shall
be subject to satisfaction of the following conditions (in form and substance
acceptable to the Lender) in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1:
     
          (a)  PERSONAL PROPERTY COLLATERAL.  The Agent shall have
     received:

               (i)     searches of Uniform Commercial Code filings in the
          jurisdiction of the chief executive office of each Credit Party and
          each jurisdiction where any Collateral is located or where a filing
          would need to be made in order to perfect the Agent's security
          interest in the Collateral, copies of the financing statements on file
          in such jurisdictions and evidence that no Liens exist other than
          Permitted Liens;

               (ii)    duly executed UCC financing statements for each
          appropriate jurisdiction as is necessary, in the Agent's sole
          discretion, to perfect the Agent's security interest in the
          Collateral;

               (iii)   searches of ownership of intellectual property in
          the appropriate governmental offices and such patent/trademark/
          copyright filings as requested by the Agent in order to perfect the 
          Agent's security interest in the Collateral;

               (iv)    all stock certificates evidencing the Capital
          Stock pledged to the Agent pursuant to the Pledge Agreement, together
          with duly executed in blank undated stock powers attached thereto;

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               (v)     such patent/trademark/copyright filings as
          requested by the Agent in order to perfect the Agent's security
          interest in the Collateral;

               (vi)    all instruments and chattel paper in the
          possession of any of the Credit Parties, together with allonges or
          assignments as may be necessary or appropriate to perfect the Agent's
          security interest in the Collateral;

               (vii)   duly executed consents as are necessary, in the
          Agent's sole discretion, to perfect the Lenders' security interest in
          the Collateral; and

               (viii)  in the case of any personal property Collateral
          located at a premises leased by a Credit Party, such estoppel letters,
          consents and waivers from the landlords on such real property as may
          be required by the Agent.

          (b)  PRIORITY OF LIENS.  The Agent shall have received
     satisfactory evidence (including without limitation payoff letters in form
     and substance reasonably satisfactory to the Agent) from holders of any
     secured Indebtedness set forth on SCHEDULE 6.15) that none of the
     Collateral is subject to any other Liens other than Permitted Liens.
     
          (c)  OPINIONS OF COUNSEL.   The Agent shall have received, in
     each case dated as of the Closing Date:

               (i)     a legal opinion of McDermott, Will & Emery,
          general counsel for the Credit Parties, substantially in the form of
          SCHEDULE 5.2(c)(i); and

               (ii)    a legal opinion of special local counsel for the
          Credit Parties for the State of Texas, substantially in the form of
          SCHEDULE 5.2(c)(ii).
     
          (d)  AVAILABILITY.  After giving effect to the initial Loans
     made and Letters of Credit issued hereunder on the Effective Date, there
     shall be at least $15 million of availability existing under the Revolving
     Committed Amount.

          (e)  CONSUMMATION OF RECAPITALIZATION.  The Recapitalization
     shall have been consummated in accordance with the terms of the Investment
     Agreements (without waiver of any conditions precedent to the obligations
     of the buyer thereunder) and the expenses related to the Recapitalization
     shall not exceed $6,000,000.  The Agent shall have received final copies of
     each of the Investment Documents, together with all exhibits and schedules
     thereto, certified by an officer of the Borrower.

          (f)  CORPORATE STRUCTURE.  The corporate capital and ownership
     structure of the Consolidated Parties, after consummation of the
     transactions contemplated by this Credit Agreement and the Investment
     Agreements, shall be as described in SCHEDULE 5.2(f).

          (g)  GOVERNMENT CONSENT.  Receipt by the Agent of evidence
     that all governmental, shareholder and material third party consents
     (including Hart-Scott-Rodino clearance) and approvals necessary or
     desirable in connection with the Recapitalization and 

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     the related financings and other transactions contemplated hereby and 
     expiration of all applicable waiting periods without any action being 
     taken by any authority that could restrain, prevent or impose any 
     material adverse conditions on the Recapitalization or such other 
     transactions or that could seek or threaten any of the foregoing, and no 
     law or regulation shall be applicable which in the judgment of the Agent 
     could have such effect.

          (h)  LITIGATION.  There shall not exist (i) any order, decree,
     judgment, ruling or injunction which restrains the consummation of the
     Recapitalization in the manner contemplated by the Investment Agreements or
     (ii) any pending or threatened action, suit, investigation or proceeding
     against a Consolidated Party that could reasonably be expected to have a
     Material Adverse Effect.
     
          (i)  SOLVENCY OPINION.  Receipt by the Agent of an opinion
     Valuation Research in substantially the form of SCHEDULE 5.2(i) as to the
     financial condition, solvency and related matters of the Consolidated
     Parties after consummation of the Recapitalization in the manner
     contemplated by Investment Agreements and the initial borrowings under the
     Credit Documents.

          (j)  OFFICER'S CERTIFICATES.  The Agent shall have received a
     certificate or certificates executed by an Executive Officer of the
     Borrower as of the Effective Date stating that (A) each Consolidated Party
     is in compliance with all existing material financial obligations, (B) all
     governmental, shareholder and third party consents and approvals, if any,
     with respect to the Credit Documents and the transactions contemplated
     thereby have been obtained, (C) no action, suit, investigation or
     proceeding is pending or threatened in any court or before any arbitrator
     or governmental instrumentality that purports to affect any Consolidated
     Party or any transaction contemplated by the Credit Documents, if such
     action, suit, investigation or proceeding could reasonably be expected to
     have a Material Adverse Effect, (D) the Recapitalization shall have been
     consummated in accordance with the terms of the Investment Agreements and
     (E) immediately after giving effect to this Credit Agreement, the other
     Credit Documents and all the transactions contemplated therein to occur on
     such date, (1) each of the Credit Parties is Solvent, (2) no Default or
     Event of Default exists, (3) all representations and warranties contained
     herein and in the other Credit Documents are true and correct in all
     material respects, and (4) the Credit Parties are in compliance with each
     of the financial covenants set forth in Section 7.11.

          (k)  SUBORDINATION AGREEMENT.  Receipt by the Agent of a copy
     of the Subordination Agreement duly executed by GE.

          (l)  FINANCIAL STATEMENTS.  Receipt and satisfactory review by
     the Agent of (i) the consolidated financial statements of the Consolidated
     Parties, including balance sheets and income and cash flow statements for
     the fiscal year ended June 30, 1997 and (ii) pro forma consolidated balance
     sheet, statement of earnings and statement of cash flow of the Consolidated
     Parties for fiscal years 1995, 1996 and 1997, giving effect to the
     Recapitalization and the transactions contemplated by the Investment
     Documents prepared by Arthur Andersen in accordance with GAAP consistently
     applied throughout the periods covered thereby.

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          (m)  CHANGE IN MARKET.  The absence of any material disruption
     of, or a material adverse change in, financial, banking or capital market
     conditions.

          (n)  FEES AND EXPENSES.  Payment by the Credit Parties of all
     fees and expenses owed by them to the Lenders and the Agent as of the
     Effective Date, including, without limitation, payment to the Agent of any
     fees set forth in the Fee Letter which are payable on such date.
     
          (o)  OTHER.  Receipt by the Lenders of such other documents,
     instruments, agreements or information as reasonably requested by any
     Lender, including, but not limited to, information regarding litigation,
     tax, accounting, labor, insurance, pension liabilities (actual or
     contingent), real estate leases, material contracts, debt agreements,
     property ownership and contingent liabilities of the Consolidated Parties.

          5.3  CONDITIONS TO ALL EXTENSIONS OF CREDIT.

     The obligations of each Lender to make, convert or extend any Loan and of
the Issuing Lender to issue or extend any Letter of Credit (including the
initial Loans and the initial Letter of Credit) are subject to satisfaction of
the following conditions in addition to satisfaction on the Closing Date of the
conditions set forth in Section 5.1 and satisfaction on the Effective Date of
the conditions set forth in Section 5.2:

          (a)  The Borrower shall have delivered (i) in the case of any
     Revolving Loan, any Acquisition Loan, any portion of the Tranche A Term
     Loan or any portion of the Tranche B Term Loan, an appropriate Notice of
     Borrowing or Notice of Extension/Conversion or (ii) in the case of any
     Letter of Credit, the Issuing Lender shall have received an appropriate
     request for issuance in accordance with the provisions of Section 2.2(b); 

          (b)  The representations and warranties set forth in Section 6
     shall, subject to the limitations set forth therein, be true and correct in
     all material respects as of such date (except for those which expressly
     relate to an earlier date);

          (c)  There shall not have been commenced against any Credit
     Party an involuntary case under any applicable bankruptcy, insolvency or
     other similar law now or hereafter in effect, or any case, proceeding or
     other action for the appointment of a receiver, liquidator, assignee,
     custodian, trustee, sequestrator (or similar official) of such Person or
     for any substantial part of its Property or for the winding up or
     liquidation of its affairs, and such involuntary case or other case,
     proceeding or other action shall remain undismissed, undischarged or
     unbonded; and

          (d)  Immediately after giving effect to the making of such
     Loan (and the application of the proceeds thereof) or to the issuance of
     such Letter of Credit, as the case may be, (i) the sum of the aggregate
     principal amount of outstanding Revolving Loans PLUS 

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     LOC Obligations outstanding shall not exceed the Revolving Committed 
     Amount, and (ii) the LOC Obligations shall not exceed the LOC Committed 
     Amount.

The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit pursuant to Section 2.2(b) shall
constitute a representation and warranty by the Borrower of the correctness of
the matters specified in subsections (b), (c) and (d) above.


SECTION 6
     
     REPRESENTATIONS AND WARRANTIES

     The Credit Parties hereby represent to the Agent and each Lender that:

          6.1  FINANCIAL CONDITION.

          (a)  The audited consolidated balance sheet of the 
     Consolidated Parties as of June 30, 1996 and the audited consolidated 
     statements of earnings and statements of cash flows for the year ended 
     June 30, 1996 have heretofore been furnished to the Agent.  Such audited 
     financial statements (including the notes thereto) (i) have been audited 
     by Arthur Andersen, (ii) have been prepared in accordance with GAAP 
     consistently, applied throughout the periods covered thereby and (iii) 
     present fairly (on the basis disclosed in the footnotes to such 
     financial statements) the consolidated financial condition, results of 
     operations and cash flows of the Consolidated Parties as of such date 
     and for such period. The unaudited interim balance sheets of the 
     Consolidated Parties as at the end of, and the related unaudited interim 
     statements of earnings and of cash flows for, each fiscal month and 
     quarterly period ended after June 30, 1997 and prior to the Closing Date 
     have heretofore been furnished to the Agent.  Such unaudited interim 
     financial statements for each such quarterly period, (i) have been 
     prepared by independent certified public accountants in accordance with 
     GAAP consistently applied throughout the periods covered thereby, 
     subject to audit, normal year-end adjustments and the absence of notes 
     and (ii) present fairly (on the basis disclosed in the footnotes to such 
     financial statements) the consolidated financial condition, results of 
     operations and cash flows of the Consolidated Parties as of such date 
     and for such periods.
     
          (b)  The pro forma consolidated balance sheet, statement of
     earnings and statement of cash flow of the Consolidated Parties for the two
     most recent fiscal years prepared by Arthur Andersen in accordance with
     GAAP consistently applied throughout the periods covered thereby, have
     heretofore been furnished to the Agent.  Such pro forma balance sheet is
     based upon reasonable assumptions and upon information not know to be
     incorrect or misleading in any material respect.

          (c)  Except as otherwise disclosed in SCHEDULE 6.1(c), the
     financial statements delivered to the Lenders pursuant to Section 7.1(a)
     and (b), (i) have been prepared in accordance with GAAP (except as may
     otherwise be permitted under Section 7.1(a) and 

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     (b)) and (ii) present fairly (on the basis disclosed in the footnotes to 
     such financial statements) the consolidated financial condition, results 
     of operations and cash flows of the Consolidated Parties as of such date 
     and for such periods.

          6.2  NO MATERIAL CHANGE.

     Since the later of (i) June 30, 1997 and (ii) the then most recent fiscal
year end with respect to which the Agent has received the Required Financial
Information, (a) there has been no Material Adverse Effect and (b) except as
otherwise permitted under this Credit Agreement, no dividends or other
distributions have been declared, paid or made upon the Capital Stock in a
Consolidated Party nor has any of the Capital Stock in a Consolidated Party been
redeemed, retired, purchased or otherwise acquired for value.

          6.3  ORGANIZATION AND GOOD STANDING.

     Each of the Consolidated Parties (a) is duly organized, validly existing
and is in good standing under the laws of the jurisdiction of its incorporation
or organization, (b) has the corporate or other necessary power and authority,
and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged
and (c) is duly qualified as a foreign entity and 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, other than in such
jurisdictions where the failure to be so qualified and in good standing could
reasonably be expected to have a Material Adverse Effect.

          6.4  POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

     Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party, and in the case of the Borrower, to obtain
extensions of credit hereunder, and has taken all necessary corporate action to
authorize the borrowings and other extensions of credit on the terms and
conditions of this Credit Agreement and to authorize the execution, delivery and
performance of the Credit Documents to which it is a party.  No material consent
or authorization of, filing with, notice to or other similar act by or in
respect of, any Governmental Authority or any other Person is required to be
obtained or made by or on behalf of any Credit Party in connection with the
borrowings or other extensions of credit hereunder or with the execution,
delivery, performance, validity or enforceability of the Credit Documents to
which such Credit Party is a party, except for (i) consents, authorizations,
notices and filings described in SCHEDULE 6.4, all of which have been obtained
or made or have the status described in such SCHEDULE 6.4 and (ii) filings to
perfect the Liens created by the Collateral Documents. This Credit Agreement has
been, and each other Credit Document to which any Credit Party is a party will
be, duly executed and delivered on behalf of the Credit Parties.  This Credit
Agreement constitutes, and each other Credit Document to which any Credit Party
is a party when executed and delivered will constitute, a legal, valid and
binding obligation of such Credit Party enforceable against such party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium 

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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).

          6.5   NO CONFLICTS.

     Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any material
Requirement of Law or any other material law, regulation (including, without
limitation, Regulation U or Regulation X), order, writ, judgment, injunction,
decree or permit applicable to it, (c) violate, contravene or conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation of
which could reasonably be expected to have a Material Adverse Effect, or (d)
result in or require the creation of any Lien (other than those contemplated in
or created in connection with the Credit Documents) upon or with respect to its
properties.

          6.6   NO DEFAULT.

     No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default could reasonably be expected to have a Material Adverse
Effect.  No Default or Event of Default has occurred or exists except as
previously disclosed in writing to the Lenders.

          6.7   OWNERSHIP.

     Each Consolidated Party is the owner of, and has good and marketable title
to, all of its respective assets and none of such assets is subject to any Lien
other than Permitted Liens.

          6.8   INDEBTEDNESS.

     Except as otherwise permitted under Section 8.1, the Consolidated Parties
have no Indebtedness.

          6.9   LITIGATION.

     Except as disclosed in SCHEDULE 6.9, there are no actions, suits or legal,
equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
might have a Material Adverse Effect.  


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          6.10  TAXES.

     Each Consolidated Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. 
No Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party that if made would have or could
reasonably be expected to have a Material Adverse Effect.

          6.11  COMPLIANCE WITH LAW.

     Each Consolidated Party is in compliance with all Requirements of Law and
all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply could not have a Material Adverse Effect.

          6.12  ERISA.

     Except as disclosed and described in SCHEDULE 6.12 attached hereto:

          (a)  During the five-year period prior to the date on which
     this representation is made or deemed made: (i) no ERISA Event has
     occurred, and, to the best knowledge of the Credit Parties, no event or
     condition has occurred or exists as a result of which any ERISA Event could
     reasonably be expected to occur, with respect to any Plan; (ii) no
     "accumulated funding deficiency," as such term is defined in Section 302 of
     ERISA and Section 412 of the Code, whether or not waived, has occurred with
     respect to any Plan; (iii) each Plan has been maintained, operated, and
     funded in compliance with its own terms and in material compliance with the
     provisions of ERISA, the Code, and any other applicable federal or state
     laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is
     reasonably likely to arise on account of any Plan.
     
          (b)  The actuarial present value of all "benefit liabilities"
     (as defined in Section 4001(a)(16) of ERISA), whether or not vested, under
     each Single Employer Plan, as of the last annual valuation date prior to
     the date on which this representation is made or deemed made (determined,
     in each case, in accordance with Financial Accounting Standards Board
     Statement 87, utilizing the actuarial assumptions used in such Plan's most
     recent actuarial valuation report), did not exceed as of such valuation
     date the fair market value of the assets of such Plan.
     
          (c)  Neither any Consolidated Party nor any ERISA Affiliate
     has incurred, or, to the best knowledge of the Credit Parties, could be
     reasonably expected to incur, any withdrawal liability under ERISA to any
     Multiemployer Plan or Multiple Employer Plan.  

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     Neither any Consolidated Party nor any ERISA Affiliate would become subject
     to any withdrawal liability under ERISA if any Consolidated Party or any 
     ERISA Affiliate were to withdraw completely from all Multiemployer Plans 
     and Multiple Employer Plans as of the valuation date most closely preceding
     the date on which this representation is made or deemed made.  Neither any 
     Consolidated Party nor any ERISA Affiliate has received any notification 
     that any Multiemployer Plan is in reorganization (within the meaning of 
     Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of
     ERISA), or has been terminated (within the meaning of Title IV of ERISA), 
     and no Multiemployer Plan is, to the best knowledge of the Credit Parties,
     reasonably expected to be in reorganization, insolvent, or terminated.
     
          (d)  No prohibited transaction (within the meaning of Section
     406 of ERISA or Section 4975 of the Code) or breach of fiduciary
     responsibility has occurred with respect to a Plan which has subjected or
     may subject any Consolidated Party or any ERISA Affiliate to any liability
     under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
     Code, or under any agreement or other instrument pursuant to which any
     Consolidated Party or any ERISA Affiliate has agreed or is required to
     indemnify any person against any such liability. 
     
          (e)  Neither any Consolidated Party nor any ERISA Affiliates
     has any material liability with respect to "expected post-retirement
     benefit obligations" within the meaning of the Financial Accounting
     Standards Board Statement 106. Each Plan which is a welfare plan (as
     defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and
     Section 4980B of the Code apply has been administered in compliance in all
     material respects of such sections.
     
          (f)  Neither the execution and delivery of this Credit Agreement 
     nor the consummation of the financing transactions contemplated
     thereunder will involve any transaction which is subject to the
     prohibitions of Sections 404, 406 or 407 of ERISA or in connection with
     which a tax could be imposed pursuant to Section 4975 of the Code.  The
     representation by the Credit Parties in the preceding sentence is made in
     reliance upon and subject to the accuracy of the Lenders' representation in
     Section 11.14 with respect to their source of funds and is subject, in the
     event that the source of the funds used by the Lenders in connection with
     this transaction is an insurance company's general asset account, to the
     application of Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg.
     35,925 (1995), compliance with the regulations issued under Section
     401(c)(1)(A) of ERISA, or the issuance of any other prohibited transaction
     exemption or similar relief, to the effect that assets in an insurance
     company's general asset account do not constitute assets of an "employee
     benefit plan" within the meaning of Section 3(3) of ERISA of a "plan"
     within the meaning of Section 4975(e)(1) of the Code.
     
          6.13  SUBSIDIARIES.

     Set forth on SCHEDULE 6.13 is a complete and accurate list of all
Subsidiaries (including Subsidiaries which are Joint Ventures) of each
Consolidated Party.  Information on SCHEDULE 6.13 includes jurisdiction of
incorporation, the number of shares of each class of Capital Stock 

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outstanding, the number and percentage of outstanding shares of each class 
owned (directly or indirectly) by such Consolidated Party; and the number and 
effect, if exercised, of all outstanding options, warrants, rights of 
conversion or purchase and all other similar rights with respect thereto.  
The outstanding Capital Stock of all such Subsidiaries is validly issued, 
fully paid and non-assessable and is owned by each such Consolidated Party, 
directly or indirectly, free and clear of all Liens (other than those arising 
under or contemplated in connection with the Credit Documents).  Other than 
as set forth in SCHEDULE 6.13, no Consolidated Party has outstanding any 
securities convertible into or exchangeable for its Capital Stock nor does 
any such Person have outstanding any rights to subscribe for or to purchase 
or any options for the purchase of, or any agreements providing for the 
issuance (contingent or otherwise) of, or any calls, commitments or claims of 
any character relating to its Capital Stock.  SCHEDULE 6.13 may be updated 
from time to time by the Borrower by giving written notice thereof to the 
Agent.

          6.14  GOVERNMENTAL REGULATIONS, ETC.

          (a)   No part of the Letters of Credit or proceeds of the Loans
     will be used, directly or indirectly, for the purpose of purchasing or
     carrying any "margin stock" within the meaning of Regulation G or
     Regulation U, or for the purpose of purchasing or carrying or trading in
     any securities.  If requested by any Lender or the Agent, the Borrower will
     furnish to the Agent and each Lender a statement to the foregoing effect in
     conformity with the requirements of FR Form U-1 referred to in Regulation
     U.  No indebtedness being reduced or retired out of the proceeds of the
     Loans was or will be incurred for the purpose of purchasing or carrying any
     margin stock within the meaning of Regulation U or any "margin security"
     within the meaning of Regulation T.  "Margin stock" within the meaning of
     Regulation U does not constitute more than 25% of the value of the
     consolidated assets of the Consolidated Parties.  None of the transactions
     contemplated by this Credit Agreement (including, without limitation, the
     direct or indirect use of the proceeds of the Loans) will violate or result
     in a violation of the Securities Act of 1933, as amended, or the Securities
     Exchange Act of 1934, as amended, or regulations issued pursuant thereto,
     or Regulation G, T, U or X. 

          (b)   No Consolidated Party is subject to regulation under the
     Public Utility Holding Company Act of 1935, the Federal Power Act or the
     Investment Company Act of 1940, each as amended.  In addition, no
     Consolidated Party is (i) an "investment company" registered or required to
     be registered under the Investment Company Act of 1940, as amended, and is
     not controlled by such a company, or (ii) a "holding company", or a
     "subsidiary company" of a "holding company", or an "affiliate" of a
     "holding company" or of a "subsidiary" of a "holding company", within the
     meaning of the Public Utility Holding Company Act of 1935, as amended.

          (c)   No director, executive officer or principal shareholder
     of any Consolidated Party is a director, executive officer or principal
     shareholder of any Lender.  For the purposes hereof the terms "director",
     "executive officer" and "principal shareholder" (when used with reference
     to any Lender) have the respective meanings assigned thereto in Regulation
     O issued by the Board of Governors of the Federal Reserve System.


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<PAGE>

          (d)   Each Consolidated Party has obtained and holds in full
     force and effect, all franchises, licenses, permits, certificates,
     authorizations, qualifications, accreditations, easements, rights of way
     and other rights, consents and approvals which are necessary for the
     ownership of its respective Property and to the conduct of its respective
     businesses as presently conducted unless the failure to do so would not
     have a Material Adverse Effect.

          (e)   No Consolidated Party is in violation of any applicable
     statute, regulation or ordinance of the United States of America, or of any
     state, city, town, municipality, county or any other jurisdiction, or of
     any agency thereof (including without limitation, environmental laws and
     regulations), which violation could reasonably be expected to have a
     Material Adverse Effect.

          (f)   Each Consolidated Party is current with all material
     reports and documents, if any, required to be filed with any state or
     federal securities commission or similar agency and is in full compliance
     in all material respects with all applicable rules and regulations of such
     commissions unless the failure to do so would not have a Material Adverse
     Effect.

          6.15  PURPOSE OF LOANS AND LETTERS OF CREDIT.

     The proceeds of the Revolving Loans, Tranche A Term Loan and Tranche B Term
Loan shall be used solely by the Borrower (i) to refinance on the Effective Date
in connection with the Recapitalization the outstanding principal balance of the
existing Funded Indebtedness of the Borrower described on SCHEDULE 6.15 in an
aggregate amount not to exceed $80 million, (ii) to pay on the Effective Date
fees and expenses in connection with the Recapitalization in an aggregate amount
not to exceed $6,000,000 and (iii) for working capital and general corporate
purposes (other than Permitted Acquisitions and Permitted Capital Expenditures)
of the Borrower and its Wholly Owned Subsidiaries on and after the Effective
Date.  The proceeds of the Acquisition Loans shall be used solely by the
Borrower to finance the purchase price of, and fees and expenses in connection
with, Permitted Acquisitions and Permitted Capital Expenditures on and after the
Effective Date.  The Letters of Credit shall be used only for or in connection
with appeal bonds, reimbursement obligations arising in connection with surety
and reclamation bonds, reinsurance, domestic or international trade transactions
and obligations not otherwise aforementioned relating to transactions entered
into by the applicable account party in the ordinary course of business.

          6.16  ENVIRONMENTAL MATTERS.

     Except as disclosed and described in SCHEDULE 6.16 attached hereto,
Environmental Laws and liabilities thereunder, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.  Each of the
Properties owned, leased or operated by the Consolidated Parties is in
compliance with all Environmental Laws except where liability under such
Environmental Laws could not reasonably be expected to have a Material Adverse
Effect.


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          6.17  INTELLECTUAL PROPERTY.

     Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"INTELLECTUAL PROPERTY") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use could not have a Material Adverse Effect.  Set forth on SCHEDULE 6.17 is
a list of all Intellectual Property owned by each Consolidated Party or that any
Consolidated Party has the right to use.  Except as provided on SCHEDULE 6.17,
no claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does any Credit Party know
of any such claim, and to the Credit Parties' knowledge the use of such
Intellectual Property by any Consolidated Party does not infringe on the rights
of any Person, except for such claims and infringements that in the aggregate,
could not have a Material Adverse Effect.  SCHEDULE 6.17 may be updated from
time to time by the Borrower by giving written notice thereof to the Agent.

          6.18  SOLVENCY.

     Each Credit Party is and, after consummation of the Recapitalization and
the other transactions contemplated by this Credit Agreement, will be Solvent.

          6.19  INVESTMENTS.

     All Investments of each Consolidated Party are Permitted Investments.

          6.20  LOCATION OF COLLATERAL.

     Set forth on SCHEDULE 6.20(a)(i) is a list of all Primary Real Properties
with street address, county and state where located.  Set forth on SCHEDULE
6.20(a)(ii) is a list of all Secondary Real Properties with street address,
county and state where located.  Set forth on SCHEDULE 6.20(b) is a list of all
locations where any tangible personal property of a Consolidated Party is
located, including county and state where located.  Set forth on SCHEDULE
6.20(c) is the chief executive office and principal place of business of each
Consolidated Party.  SCHEDULE 6.20(a), 6.20(b) and 6.20(c) may be updated from
time to time by the Borrower giving written notice thereof to the Agent.

          6.21  DISCLOSURE.

     Neither this Credit Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein, in light of the circumstances under which such
information 


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is or is to be used, not misleading.  It is understood by the  Agent and the 
Lenders that all of the estimates and assumptions on which any projections 
and forecasts are based may not prove to be correct and that actual future 
financial performance may vary from such projections or forecasts.

          6.22  NO BURDENSOME RESTRICTIONS.

     No Consolidated Party is a party to any agreement or instrument or subject
to any other obligation or any charter or corporate restriction or any provision
of any applicable law, rule or regulation which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.

          6.23  BROKERS' FEES.

     Except as disclosed on SCHEDULE 6.23, no Consolidated Party has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents.

          6.24  LABOR MATTERS.

     There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years.

          6.25  NATURE OF BUSINESS.

     As of the Closing Date, the Consolidated Parties are engaged in the
business of providing diagnostic imaging services and ancillary services to the
healthcare industry.


SECTION 7
     
     AFFIRMATIVE COVENANTS

     Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:

          7.1   INFORMATION COVENANTS.

     The Borrower will furnish, or cause to be furnished, to the Agent and the
Lenders:


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          (a)   ANNUAL FINANCIAL STATEMENTS.  As soon as available, and
     in any event within 90 days after the close of each fiscal year of the
     Consolidated Parties, a consolidated balance sheet and income statement of
     the Consolidated Parties, as of the end of such fiscal year, together with
     related consolidated statements of operations and retained earnings and of
     cash flows for such fiscal year, setting forth in comparative form
     consolidated figures for the preceding fiscal year, all such financial
     information described above to be in reasonable form and detail and audited
     by independent certified public accountants of recognized national standing
     reasonably acceptable to the Agent and whose opinion shall be to the effect
     that such financial statements have been prepared in accordance with GAAP
     (except for changes with which such accountants concur) and shall not be
     limited as to the scope of the audit or qualified as to the status of the
     Consolidated Parties as a going concern. 

          (b)   QUARTERLY FINANCIAL STATEMENTS.  As soon as available,
     and in any event within 45 days after the close of each fiscal quarter of
     the Consolidated Parties (other than the fourth fiscal quarter, in which
     case 90 days after the end thereof) a consolidated and consolidating
     balance sheet and income statement of the Consolidated Parties, as of the
     end of such fiscal quarter, together with related consolidated and
     consolidating statements of operations and retained earnings and of cash
     flows for such fiscal quarter in each case setting forth in comparative
     form consolidated and consolidating figures for the corresponding period of
     the preceding fiscal year, all such financial information described above
     to be in reasonable form and detail and reasonably acceptable to the Agent,
     and accompanied by a certificate of the chief financial officer of the
     Borrower to the effect that such quarterly financial statements fairly
     present in all material respects the financial condition of the
     Consolidated Parties and have been prepared in accordance with GAAP,
     subject to changes resulting from audit and normal year-end audit
     adjustments.

          (c)   OFFICER'S CERTIFICATE.  At the time of delivery of the
     financial statements provided for in Sections 7.1(a) and 7.1(b) above, a
     certificate of the chief financial officer of the Borrower substantially in
     the form of EXHIBIT 7.1(c), (i) demonstrating compliance with the financial
     covenants contained in Section 7.11 by calculation thereof as of the end of
     each such fiscal period and (ii) stating that no Default or Event of
     Default exists, or if any Default or Event of Default does exist,
     specifying the nature and extent thereof and what action the Credit Parties
     propose to take with respect thereto.

          (d)   ANNUAL BUDGETS AND PLAN.  At least 15 days prior to the
     end of each fiscal year of the Borrower, beginning with the fiscal year
     ending June 30, 1998, an annual budget and plan for the Consolidated
     Parties containing, among other things, pro forma financial statements for
     the next fiscal year.

          (e)   COMPLIANCE WITH CERTAIN PROVISIONS OF THE CREDIT
     AGREEMENT.  Within 90 days after the end of each fiscal year of the
     Borrower, a certificate containing information regarding (i) the
     calculation of Excess Cash Flow and (ii) the amount of all Asset
     Dispositions, Debt Issuances and Equity Issuances that were made during the
     prior fiscal year.


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          (f)   ACCOUNTANT'S CERTIFICATE.  Within the period for delivery
     of the annual financial statements provided in Section 7.1(a), a
     certificate of the accountants conducting the annual audit stating that
     they have reviewed this Credit Agreement and stating further whether, in
     the course of their audit, they have become aware of any Default or Event
     of Default and, if any such Default or Event of Default exists, specifying
     the nature and extent thereof.

          (g)   AUDITOR'S REPORTS.  Promptly upon receipt thereof, a copy
     of any other report or "management letter" submitted by independent
     accountants to any Consolidated Party in connection with any annual,
     interim or special audit of the books of such Person.

          (h)   REPORTS.  Promptly upon transmission or receipt thereof,
     (i) copies of any filings and registrations with, and reports to or from,
     the Securities and Exchange Commission, or any successor agency, and copies
     of all financial statements, proxy statements, notices and reports as any
     Consolidated Party shall send to its shareholders or to a holder of any
     Indebtedness owed by any Consolidated Party in its capacity as such a
     holder and (ii) upon the request of the Agent, all reports and written
     information to and from the United States Environmental Protection Agency,
     or any state or local agency responsible for environmental  matters, the
     United States Occupational Health and Safety Administration, or any state
     or local agency responsible for health and safety matters, or any successor
     agencies or authorities concerning environmental, health or safety matters.

          (i)   NOTICES.  Upon obtaining knowledge thereof, the Borrower
     will give written notice to the Agent immediately of (i) the occurrence of
     an event or condition consisting of a Default or Event of Default,
     specifying the nature and existence thereof and what action the Credit
     Parties propose to take with respect thereto, and (ii) the occurrence of
     any of the following with respect to any Consolidated Party (A) the
     pendency or commencement of any litigation, arbitral or governmental
     proceeding against such Person which if adversely determined is likely to
     have a Material Adverse Effect, (B) the institution of any proceedings
     against such Person with respect to, or the receipt of notice by such
     Person of potential liability or responsibility for violation, or alleged
     violation of any federal, state or local law, rule or regulation, including
     but not limited to, Environmental Laws, the violation of which could
     reasonably be expected to have a Material Adverse Effect, or (C) any notice
     or determination  concerning the imposition of any withdrawal liability by
     a Multiemployer Plan against such Person or any ERISA Affiliate, the
     determination that a Multiemployer Plan is, or is expected to be, in
     reorganization within the meaning of Title IV of ERISA or the termination
     of any Plan.

          (j)   ERISA.  Upon obtaining knowledge thereof, the Borrower
     will give written notice to the Agent promptly (and in any event within
     five business days) of: (i) of any event or condition, including, but not
     limited to, any Reportable Event, that constitutes, or could reasonably
     lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the
     receipt of notice as prescribed in ERISA or otherwise of any withdrawal
     liability assessed against the Borrower or any of its ERISA Affiliates, or
     of a determination that any Multiemployer Plan is in reorganization or
     insolvent (both within the meaning of Title IV of ERISA); (iii) the failure
     to make full payment on or before the due date (including 


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     extensions) thereof of all amounts which any Consolidated Party or any 
     ERISA Affiliate is required to contribute to each Plan pursuant to its 
     terms and as required to meet the minimum funding standard set forth in 
     ERISA and the Code with respect thereto; or (iv) any change in the funding
     status of any Plan that could reasonably be expected to have a Material 
     Adverse Effect, together with a description of any such event or condition
     or a copy of any such notice and a statement by the chief financial officer
     of the Borrower briefly setting forth the details regarding such event, 
     condition, or notice, and the action, if any, which has been or is being 
     taken or is proposed to be taken by the Credit Parties with respect 
     thereto.  Promptly upon request, the Credit Parties shall furnish the Agent
     and the Lenders with such additional information concerning any Plan as may
     be reasonably requested, including, but not limited to, copies of each 
     annual report/return (Form 5500 series), as well as all schedules and 
     attachments thereto required to be filed with the Department of Labor 
     and/or the Internal Revenue Service pursuant to ERISA and the Code, 
     respectively, for each "plan year" (within the meaning of Section 3(39) 
     of ERISA).

          (k)   OTHER INFORMATION.  With reasonable promptness upon any
     such request, such other information regarding the business, properties or
     financial condition of any Consolidated Party as the Agent or the Required
     Lenders may reasonably request.

          7.2   PRESERVATION OF EXISTENCE AND FRANCHISES.

     Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or Section 8.5, each
Credit Party will, and will cause each of its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises and authority if the failure to do so could reasonably be expected to
have a Material Adverse Effect.

          7.3   BOOKS AND RECORDS.

     Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).  

          7.4   COMPLIANCE WITH LAW.

     Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect.


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          7.5   PAYMENT OF TAXES AND OTHER INDEBTEDNESS.

     Each Credit Party will, and will cause each of its Subsidiaries to, pay and
discharge (a) all taxes, assessments and governmental charges or levies imposed
upon it, or upon its income or profits, or upon any of its properties, before
they shall become delinquent, (b) all lawful claims (including claims for labor,
materials and supplies) which, if unpaid, might give rise to a Lien upon any of
its properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; PROVIDED, HOWEVER, that no Consolidated
Party shall be required to pay any such tax, assessment, charge, levy, claim or
Indebtedness which is being contested in good faith by appropriate proceedings
and as to which adequate reserves therefor have been established in accordance
with GAAP, unless the failure to make any such payment (i) could give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) could
reasonably be expected to have a Material Adverse Effect.

          7.6   INSURANCE.

          (a)   Each Credit Party will, and will cause each of its
     Subsidiaries to, at all times maintain in full force and effect insurance
     (including worker's compensation insurance, liability insurance, casualty
     insurance and business interruption insurance) in such amounts, covering
     such risks and liabilities and with such deductibles or self-insurance
     retentions as are in accordance with normal industry practice (or as
     otherwise required by the Collateral Documents). The Agent shall be named
     as loss payee or mortgagee, as its interest may appear, and/or additional
     insured with respect to any such insurance providing coverage in respect of
     any Collateral, and each provider of any such insurance shall agree, by
     endorsement upon the policy or policies issued by it or by independent
     instruments furnished to the Agent, that it will use good faith efforts to
     give the Agent thirty (30) days prior written notice before any such policy
     or policies shall be altered or canceled, and that no act or default of any
     Consolidated Party or any other Person shall affect the rights of the Agent
     or the Lenders under such policy or policies.  The present insurance
     coverage of the Consolidated Parties is outlined as to carrier, policy
     number, expiration date, type and amount on SCHEDULE 7.6.

          (b)   In case of any material loss, damage to or destruction of
     the Collateral of any Credit Party or any part thereof, such Credit Party
     shall promptly give written notice thereof to the Agent generally
     describing the nature and extent of such damage or destruction.  In case of
     any loss, damage to or destruction of the Collateral of any Credit Party or
     any part thereof, such Credit Party, whether or not the insurance proceeds,
     if any, received on account of such damage or destruction shall be
     sufficient for that purpose, at such Credit Party's cost and expense, will
     promptly repair or replace the Collateral of such Credit Party so lost,
     damaged or destroyed; PROVIDED, HOWEVER, that such Credit Party need not
     repair or replace the Collateral of such Credit Party so lost, damaged or
     destroyed to the extent the failure to make such repair or replacement (i)
     is desirable to the proper conduct of the business of such Credit Party in
     the ordinary course and otherwise in the best interest of such Credit
     Party; and (ii) would not materially impair the rights and benefits of the
     Agent or the Lenders under the Collateral Documents, any other Credit
     Document or any Hedging 


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     Agreement.  In the event a Credit Party shall receive any proceeds of such 
     insurance in a net amount in excess of $500,000, such Credit Party will 
     immediately pay over such proceeds to the Agent, for payment on the Credit 
     Party Obligations; PROVIDED, HOWEVER, that the Agent agrees to release such
     insurance proceeds to such Credit Party for replacement or restoration of 
     the portion of the Collateral of such Credit Party lost, damaged or 
     destroyed if, but only if, (A) no Default or Event of Default shall have 
     occurred and be continuing at the time of release, (B) written application 
     for such release is received by the Agent from such Credit Party within 
     30 days of receipt of such proceeds and (C) the Agent has received evidence
     reasonably satisfactory to it that the Collateral lost, damaged or 
     destroyed has been or will be replaced or restored to its condition 
     immediately prior to the loss, destruction or other event giving rise to 
     the payment of such insurance proceeds.

          7.7   MAINTENANCE OF PROPERTY.

     Each Credit Party will, and will cause each of its Subsidiaries to,
maintain and preserve its properties and equipment material to the conduct of
its business in good repair, working order and condition, normal wear and tear
and casualty and condemnation excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.

          7.8   PERFORMANCE OF OBLIGATIONS.

     Each Credit Party will, and will cause each of its Subsidiaries to, perform
in all material respects all of its obligations  under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound.

          7.9   USE OF PROCEEDS.

     The Borrower will use the proceeds of the Loans and will use the Letters of
Credit solely for the purposes set forth in Section 6.15.

          7.10  AUDITS/INSPECTIONS.

     Upon reasonable notice and during normal business hours, each Credit Party
will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Agent, including, without limitation, independent accountants,
agents, attorneys, and appraisers to visit and inspect its property, including
its books and records, its accounts receivable and inventory, its facilities and
its other business assets, and to make photocopies or photographs thereof and to
write down and record any information such representative obtains and shall
permit the Agent or its representatives to investigate and verify the accuracy
of information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person.  The Credit Parties
agree 


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that the Agent, and its representatives, may conduct an annual audit of the 
Collateral, at the expense of the Borrower.

          7.11  FINANCIAL COVENANTS.  
     
     The Credit Parties hereby agree that:

          (a)   INTEREST COVERAGE RATIO.  The Interest Coverage Ratio, as
     of the last day of each fiscal quarter of the Consolidated Parties, shall
     be greater than or equal to:

                (i)   for the period from March 31, 1998 to and including
          December 31, 1999, 2.50 to 1.00;
          
                (ii)  for the period from January 1, 2000 to and including
          December 31, 2000, 2.75 to 1.00; and

                (iii) for the period from January 1, 2001 and at all
          times thereafter, 3.00 to 1.00.

          (b)   FIXED CHARGE COVERAGE RATIO.  The Fixed Charge Coverage
     Ratio, as of the last day of each fiscal quarter of the Consolidated
     Parties, shall be greater than or equal to:

                (i)   for the period from March 31, 1998 to and including
          December 31, 1999, 1.00 to 1.00; and
          
                (ii)  for the period from January 1, 2000 and at all times
          thereafter, 1.10 to 1.00. 

          (c)   LEVERAGE RATIO.  The Leverage Ratio, as of the last day
     of each fiscal quarter of the Consolidated Parties, shall be less than or
     equal to:

                (i)   for the period from March 31, 1998 to and including
          December 31, 1999, 4.00 to 1.00;
          
                (ii)  for the period from January 1, 2000 to and including
          December 31, 2000, 3.50 to 1.00; and

                (iii) for the period from January 1, 2001 and at all
          times thereafter, 3.25 to 1.00.

          (d)   MINIMUM EBITDA.  Consolidated EBITDA, as of March 31,
     1998 and as of the last day of each fiscal quarter of the Consolidated
     Parties thereafter, in each case for the 4-quarter period then ended, shall
     be equal to or greater than $20,000,000:


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          (e)   CERTAIN CALCULATION PROCEDURES.  The parties hereto
     acknowledge and agree that, notwithstanding any other provision hereof to
     the contrary, for purposes of all calculations made in determining
     compliance with the financial covenants set forth in this Section 7.11,
     (i)(A) income statement items (whether positive or negative) attributable
     to the Property disposed of in any Asset Disposition as contemplated by
     Section 8.5, as applicable, shall be excluded to the extent relating to any
     period occurring prior to the date of such transaction and (B) Indebtedness
     which is retired in connection with any such Asset Disposition shall be
     excluded and deemed to have been retired as of the first day of the
     applicable period and (ii) income statement items (whether positive or
     negative) attributable to any Property acquired in any Investment
     transaction (including without limitation any Permitted Acquisition)
     contemplated by Section 8.6 shall be included to the extent relating to any
     period applicable in such calculations occurring after the date of such
     transaction (and, notwithstanding the foregoing, during the first four
     fiscal quarters following the date of such transaction, shall be included
     on an annualized basis).

          7.12  ADDITIONAL CREDIT PARTIES.

     As soon as practicable and in any event within 30 days after any Person
which is not a Joint Venture becomes a Subsidiary of any Credit Party, the
Borrower shall provide the Agent with written notice thereof setting forth
information in reasonable detail describing all of the assets of such Person and
shall (a) cause such Person to execute a Joinder Agreement in substantially the
same form as EXHIBIT 7.12, (b) cause all of the Capital Stock of such Person
owned by the Consolidated Parties to be delivered to the Agent (together with
undated stock powers signed in blank) and pledged to the Agent pursuant to an
appropriate pledge agreement(s) in substantially the form of the Pledge
Agreement and otherwise in form acceptable to the Agent and (c) cause such
Person to (i) if such Person owns or leases any real property located in the
United States of America or deemed to be material by the Agent or the Required
Lenders in its or their sole reasonable discretion, deliver to the Agent with
respect to such real property documents, instruments and other items of the
types required to be delivered pursuant to Section 5.2(c) all in form, content
and scope reasonably satisfactory to the Agent and (ii) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder) and other items of the types
required to be delivered pursuant to Section 5.2(b), all in form, content and
scope reasonably satisfactory to the Agent.

          7.13  PLEDGED ASSETS.

     Each Credit Party will, and will cause each of its Subsidiaries which is
not a Joint Venture to, cause (i) all of its owned real and personal property
located in the United States, (ii) to the extent deemed to be material by the
Agent or the Required Lenders in its or their sole reasonable 


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discretion, all of its other owned real and personal property and (iii) all 
of its leased real property located in the United States, to be subject at 
all times to first priority (subject to Permitted Liens), perfected and, in 
the case of real property (whether leased or owned), title insured Liens in 
favor of the Agent pursuant to the terms and conditions of the Collateral 
Documents or, with respect to any such property acquired subsequent to the 
Closing Date, such other additional security documents as the Agent shall 
reasonably request.  With respect to any real property (whether leased or 
owned) located in the United States of America acquired by any direct or 
indirect Subsidiary of the Borrower which is not a Joint Venture subsequent 
to the Closing Date, such Person will cause to be delivered to the Agent with 
respect to such real property:  (i) if the value of such real property is 
greater than or equal to $1,000,000, documents, instruments and other items 
of the types required to be delivered pursuant to Section 7.16(i)-(iv) in 
form acceptable to the Agent and (ii) if the value of such real property is 
greater than $250,000 but less than $1,000,000, documents, instruments and 
other items of the types required to be delivered pursuant to Section 
7.16(ii) and (iv) in a form acceptable to Agent.  Without limiting the 
generality of the above, the Credit Parties will cause 100% of the Capital 
Stock in each direct or indirect Subsidiary of the Borrower which is not a 
Joint Venture to be subject at all times to a first priority (subject to 
Permitted Liens), perfected Lien in favor of the Agent pursuant to the terms 
and conditions of the Collateral Documents or such other security documents 
as the Agent shall reasonably request.

     If, subsequent to the Closing Date, a Credit Party shall (a) acquire any
intellectual property, securities, instruments, chattel paper or other personal
property required to be delivered to the Agent as Collateral hereunder or under
any of the Collateral Documents or (b) acquire or lease any real property, the
Borrower shall promptly (and in any event within three (3) Business Days) after
any Executive Officer of a Credit Party acquires knowledge of same notify the
Agent of same. Each Credit Party shall, and shall cause each of its Subsidiaries
to, take such action (including but not limited to the actions set forth in
Sections 5.2(a) and Section 7.16 (as qualified by this Section 7.13)) at its own
expense as requested by the Agent to ensure that the Agent has a first priority
(subject to Permitted Liens), perfected Lien to secure the Credit Party
Obligations in (i) all owned real property and personal property of the Credit
Parties located in the United States, (ii) to the extent deemed to be material
by the Agent or the Required Lenders in its or their sole reasonable discretion,
all other owned real and personal property of the Credit Parties and (iii) all
leased real property located in the United States, subject in each case only to
Permitted Liens.  Each Credit Party shall, and shall cause each of its
Subsidiaries to, adhere to the covenants regarding the location of personal
property as set forth in the Security Agreements.

          7.14  INTEREST RATE PROTECTION.
     
     Within six months of the Effective Date, the Borrower shall enter into
interest rate protection agreements protecting against fluctuations in interest
rates as to which the material terms are reasonably satisfactory to the Agent
and the Borrower, which agreements shall provide coverage in an amount equal to
at least $25 million and for a duration of at least 3 years.


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          7.15  UPSTREAMING OF INCOME FROM JOINT VENTURES.

The Credit Parties will cause each of the Joint Ventures to distribute to the
Borrower from time to time (and in any event at least once during each fiscal
year of the Borrower) the Borrower's share of the net income before taxes for
such period (as determined in accordance with GAAP) of such Joint Venture.

          7.16  FURTHER ASSURANCES.

          (a)   Within 90 days after the Closing Date, the Credit Parties
     shall deliver to the Agent:

                (i)   fully executed and notarized mortgages, deeds of
          trust or deeds to secure debt (each, as the same may be amended,
          modified, restated or supplemented from time to time, a "MORTGAGE
          INSTRUMENT" and collectively the "MORTGAGE INSTRUMENTS") encumbering
          the fee interest and/or leasehold interest of any Credit Party in each
          real property asset designated in SCHEDULE 6.20(a)(i) (each a "PRIMARY
          REAL PROPERTY" and collectively the "PRIMARY REAL PROPERTIES");

                (ii)  in the case of each leasehold interest of any
          Credit Party in each real property asset designated in SCHEDULE
          6.20(a)(ii) (each a "SECONDARY REAL PROPERTY" and collectively
          "SECONDARY REAL PROPERTIES") or Primary Real Property (each Primary
          Real Property or Secondary Real Property a "REAL PROPERTY" and
          collectively the "REAL PROPERTIES"), (a) such estoppel letters,
          consents and waivers from the landlords on such real property as may
          be required by the Agent, which estoppel letters shall be in the form
          and substance reasonably satisfactory to the Agent and (b) evidence
          that the applicable lease, a memorandum of lease with respect thereto,
          or other evidence of such lease in form and substance reasonably
          satisfactory to the Agent, has been or will be recorded in all places
          to the extent necessary or desirable, in the reasonable judgment of
          the Agent, so as to enable the Mortgage Instrument encumbering such
          leasehold interest to effectively create a valid and enforceable first
          priority lien (subject to Permitted Liens) on such leasehold interest
          in favor of the Agent (or such other Person as may be required or
          desired under local law) for the benefit of Lenders;

                (iii) ALTA mortgagee title insurance policies issued by
          Chicago Title Insurance Company (the "MORTGAGE POLICIES"), in amounts
          reasonably satisfactory to the Agent, assuring the Agent that each of
          the Mortgage Instruments creates a valid and enforceable first
          priority mortgage lien on the applicable Primary Real Property, free
          and clear of all defects and encumbrances except Permitted Liens,
          which Mortgage Policies shall be in form and substance reasonably
          satisfactory to the Agent and shall provide for affirmative insurance
          and such reinsurance as the Agent may reasonably request, all of the
          foregoing in form and substance reasonably satisfactory to the Agent;
          and 


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                (iv)  Evidence satisfactory to the Agent that each of
          the Real Properties, and the uses of the Real Properties, are in
          compliance in all material respects with all applicable laws,
          regulations and ordinances including without limitation health and
          environmental protection laws, erosion control ordinances, storm
          drainage control laws, doing business and/or licensing laws, zoning
          laws (the evidence submitted as to zoning should include the zoning
          designation made for each of the Real Properties, the permitted uses
          of each such Real Properties under such zoning designation and zoning
          requirements as to parking, lot size, ingress, egress and building
          setbacks) and laws regarding access and facilities for disabled
          persons including, but not limited to, the federal Architectural
          Barriers Act, the Fair Housing Amendments Act of 1988, the
          Rehabilitation Act of 1973 and the Americans with Disabilities Act of
          1990.
          
          (b)   Within 30 days after the Closing Date, the Credit Parties
     shall deliver to the Agent (i) evidence satisfactory to the Agent that the
     good standing status of each Subsidiary identified in SCHEDULE 6.13 as not
     being in good standing in any listed jurisdiction has been reinstated to
     good standing status in each such jurisdiction and (ii) evidence
     satisfactory to the Agent that each Subsidiary identified in SCHEDULE 6.13
     as having incomplete tax data available for any listed jurisdiction is in
     good tax standing in each such jurisdiction.
     
     
SECTION 8
     
     NEGATIVE COVENANTS

     Each Credit Party hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:

          8.1   INDEBTEDNESS.

     The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:

          (a)   Indebtedness arising under this Credit Agreement and the
     other Credit Documents;

          (b)   Indebtedness of the Borrower and its Subsidiaries set
     forth in SCHEDULE 8.1 (and renewals, refinancings and extensions thereof on
     terms and conditions no less favorable to such Person than such existing
     Indebtedness);

          (c)   (i)   purchase money Indebtedness (including Capital
          Leases and Synthetic Leases) hereafter incurred by the Borrower or any
          of its Subsidiaries which is not a Joint Venture other than Open MRI
          or Central Coast to finance the purchase of fixed assets PROVIDED that
          (A) the total of all such Indebtedness for all 


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          such Persons taken together shall not exceed an aggregate principal 
          amount of $5,000,000 (excluding any such Indebtedness of the Borrower 
          or any of its Subsidiaries other than Open MRI or Central Coast 
          referred to in subsection (b) above) at any one time outstanding; 
          (B) such Indebtedness when incurred shall not exceed the purchase 
          price of the asset(s) financed; and (C) no such Indebtedness shall be 
          refinanced for a principal amount in excess of the principal balance 
          outstanding thereon at the time of such refinancing;
     
                (ii)  purchase money Indebtedness (including Capital
          Leases and Synthetic Leases) hereafter incurred by Open MRI to finance
          the purchase of fixed assets PROVIDED that (A) the total outstanding
          principal of all such Indebtedness (including any such Indebtedness of
          Open MRI referred to in subsection (b) above), taken together with the
          aggregate original equipment cost of all Property leased by Open MRI
          under Operating Leases, shall not exceed at any time an aggregate
          principal amount of $20,000,000; (B) such Indebtedness when incurred
          shall not exceed the purchase price of the asset(s) financed; and (C)
          no such Indebtedness shall be refinanced for a principal amount in
          excess of the principal balance outstanding thereon at the time of
          such refinancing;

                (iii) purchase money Indebtedness (including Capital
          Leases and Synthetic Leases) hereafter incurred by Central Coast to
          finance the purchase of fixed assets PROVIDED that (A) the total
          outstanding principal of all such Indebtedness shall not exceed at any
          time an aggregate principal amount of $6,000,000 (including any such
          Indebtedness of Central Coast referred to in subsection (b) above);
          (B) such Indebtedness when incurred shall not exceed the purchase
          price of the asset(s) financed; and (C) no such Indebtedness shall be
          refinanced for a principal amount in excess of the principal balance
          outstanding thereon at the time of such refinancing;
     
          (d)   obligations of the Borrower or any of its Subsidiaries in
     respect of Hedging Agreements entered into in order to manage existing or
     anticipated interest rate or exchange rate risks and not for speculative
     purposes;

          (e)   intercompany Indebtedness arising out of loans and advances 
     permitted under Section 8.6; and

          (f)   in addition to the Indebtedness otherwise permitted by
     this Section 8.1, other unsecured Indebtedness hereafter incurred by the
     Borrower PROVIDED that (A) the loan documentation with respect to such
     Indebtedness shall not contain covenants or default provisions relating to
     any Consolidated Party that are more restrictive than the covenants and
     default provisions contained in the Credit Documents, (B) the Borrower
     shall have delivered to the Agent a Pro Forma Compliance Certificate
     demonstrating that, upon giving effect on a Pro Forma Basis to the
     incurrence of such Indebtedness and to the concurrent retirement of any
     other Indebtedness of any Consolidated Party, no Default or Event of
     Default would exist hereunder and (C) the aggregate principal amount of
     such Indebtedness shall not exceed $2,500,000 at any time.


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          8.2   LIENS.

     The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property, whether now owned or after acquired, except for Permitted Liens.

          8.3   NATURE OF BUSINESS.

     The Credit Parties will not permit any Consolidated Party to substantively
alter the character or conduct of the business conducted by such Person as of
the Closing Date.

          8.4   CONSOLIDATION, MERGER, DISSOLUTION, ETC.

     Except in connection with an Asset Disposition permitted by the terms of
     Section 8.5, the Credit Parties will not permit any Consolidated Party to
     enter into any transaction of merger or consolidation or liquidate, wind up
     or dissolve itself (or suffer any liquidation or dissolution); PROVIDED
     that, notwithstanding the foregoing provisions of this Section 8.4, (a) the
     Borrower may merge or consolidate with any of its Wholly Owned Subsidiaries
     PROVIDED that (i) the Borrower shall be the continuing or surviving
     corporation, (ii) the Credit Parties shall cause to be executed and
     delivered such documents, instruments and certificates as the Agent may
     request so as to cause the Credit Parties to be in compliance with the
     terms of Section 7.13 after giving effect to such transaction and (iii) the
     Borrower shall have delivered to the Agent a Pro Forma Compliance
     Certificate demonstrating that, upon giving effect on a Pro Forma Basis to
     such transaction, no Default or Event of Default would exist, (b) any
     Credit Party other than the Borrower may merge or consolidate with any
     other Credit Party other than the Borrower PROVIDED that (i) the Credit
     Parties shall cause to be executed and delivered such documents,
     instruments and certificates as the Agent may request so as to cause the
     Credit Parties to be in compliance with the terms of Section 7.13 after
     giving effect to such transaction and (ii) the Borrower shall have
     delivered to the Agent a Pro Forma Compliance Certificate demonstrating
     that, upon giving effect on a Pro Forma Basis to such transaction, no
     Default or Event of Default would exist, (c) any Consolidated Party which
     is not a Credit Party may be merged or consolidated with or into any Credit
     Party PROVIDED that (i) such Credit Party shall be the continuing or
     surviving corporation, (ii) the Credit Parties shall cause to be executed
     and delivered such documents, instruments and certificates as the Agent may
     request so as to cause the Credit Parties to be in compliance with the
     terms of Section 7.13 after giving effect to such transaction and (iii) the
     Borrower shall have delivered to the Agent a Pro Forma Compliance
     Certificate demonstrating that, upon giving effect on a Pro Forma Basis to
     such transaction, no Default or Event of Default would exist, (d) any
     Consolidated Party which is not a Credit Party may be merged or
     consolidated with or into any other Consolidated Party which is not a
     Credit Party PROVIDED the Borrower shall have delivered to the Agent a Pro
     Forma Compliance Certificate demonstrating that, upon giving effect on a
     Pro Forma Basis to such transaction, no Default or Event of Default would
     exist, (e) 


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     the Borrower or any Wholly Owned Subsidiary of the Borrower may merge with 
     any Person other than a Consolidated Party in connection with a Permitted 
     Acquisition if (i) the Borrower or such Wholly Owned Subsidiary shall be 
     the continuing or surviving corporation, (ii) the Credit Parties shall 
     cause to be executed and delivered such documents, instruments and
     certificates as the Agent may request so as to cause the Credit Parties to
     be in compliance with the terms of Section 7.13 after giving effect to such
     transaction and (iii) the Borrower shall have delivered to the Agent a Pro
     Forma Compliance Certificate demonstrating that, upon giving effect on a
     Pro Forma Basis to such transaction, no Default or Event of Default would
     exist and (f) any Wholly Owned Subsidiary of the Borrower may dissolve,
     liquidate or wind up its affairs at any time.

          8.5   ASSET DISPOSITIONS.

     The Credit Parties will not permit any Consolidated Party to make any Asset
Disposition (including, without limitation, any Sale and Leaseback Transaction)
other than Excluded Asset Dispositions unless (a) the consideration paid in
connection therewith is cash or Cash Equivalents, (b) if such transaction is a
Sale and Leaseback Transaction, such transaction is permitted by the terms of
Section 8.13, (c) such transaction does not involve the sale or other
disposition of a minority equity interest in any Consolidated Party, (d) the
aggregate net book value of all of the assets sold or otherwise disposed of by
the Consolidated Parties in all such transactions after the Closing Date shall
not exceed $2,500,000, (e) if the book value of the assets disposed of pursuant
to such Asset Disposition exceeds $1,000,000, the Borrower shall have delivered
to the Agent a Pro Forma Compliance Certificate demonstrating that, upon giving
effect on a Pro Forma Basis to such transaction, no Default or Event of Default
would exist hereunder, and (f) no later than 15 days prior to such Asset
Disposition, the Agent and the Lenders shall have received a certificate of an
officer of the Borrower specifying the anticipated or actual date of such Asset
Disposition, briefly describing the assets to be sold or otherwise disposed of
and setting forth the net book value of such assets, the aggregate consideration
and the Net Cash Proceeds to be received for such assets in connection with such
Asset Disposition, and thereafter the Borrower shall, within the period of 30
days following the consummation of such Asset Disposition (with respect to any
such Asset Disposition, the "APPLICATION PERIOD"), apply (or cause to be
applied) an amount equal to the Net Cash Proceeds of such Asset Disposition to
(i) the purchase, acquisition or, in the case of improvements to real property,
construction of Eligible Assets or (ii) to the prepayment of the Loans in
accordance with the terms of Section 3.3(b)(iii).

     Upon a sale of assets or the sale of Capital Stock of a Consolidated Party
permitted by this Section 8.5, the Agent shall (to the extent applicable)
deliver to the Borrower, upon the Borrower's request and at the Borrower's
expense, such documentation as is reasonably necessary to evidence the release
of the Agent's security interest, if any, in such assets or Capital Stock,
including, without limitation, amendments or terminations of UCC financing
statements, if any, the return of stock certificates, if any, and the release of
such Subsidiary from all of its obligations, if any, under the Credit Documents.


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          8.6    INVESTMENTS.

     The Credit Parties will not permit any Consolidated Party to make
Investments in or to any Person, except for Permitted Investments.

          8.7    RESTRICTED PAYMENTS.

     The Credit Parties will not permit any Consolidated Party which is not a
Joint Venture to, directly or indirectly, declare, order, make or set apart any
sum for or pay any Restricted Payment, except (a) to make dividends payable
solely in the same class of Capital Stock of such Person and, in connection with
any such stock dividend, to make cash dividends in respect of fractional shares,
(b) to make dividends or other distributions payable to any Credit Party
(directly or indirectly through Subsidiaries), (c) as permitted by Section 8.8,
(d) pursuant to the terms of either of the Investment Agreements, any payments
made in connection with the Recapitalization and (e) to purchase, redeem or
otherwise acquire shares of its Capital Stock, or warrants or options to acquire
any such shares, with the proceeds received from the substantially concurrent
issue of its Capital Stock.

          8.8    PREPAYMENTS OF INDEBTEDNESS, ETC.

     The Credit Parties will not permit any Consolidated Party which is not a
Joint Venture to, if any Default or Event of Default has occurred and is
continuing or would be directly or indirectly caused as a result thereof (a)
after the issuance thereof, amend or modify (or permit the amendment or
modification of) any of the terms of any Indebtedness if such amendment or
modification would add or change any terms in a manner adverse to the issuer of
such Indebtedness, or shorten the final maturity or average life to maturity or
require any payment to be made sooner than originally scheduled or increase the
interest rate applicable thereto or change any subordination provision thereof,
or (b) make (or give any notice with respect thereto) any voluntary or optional
payment or prepayment or redemption or acquisition for value of (including
without limitation, by way of depositing money or securities with the trustee
with respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of any other Indebtedness.

          8.9    TRANSACTIONS WITH AFFILIATES.

     The Credit Parties will not permit any Consolidated Party to enter into or
permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (a)
advances of working capital to any Credit Party, (b) transfers of cash and
assets to any Credit Party, (c) transactions permitted by Section 8.1, Section
8.4, Section 8.5, Section 8.6, or Section 8.7, (d) transactions contemplated by
the Investment Agreements, including any and all payments required to be paid
pursuant to the terms thereof, (e) normal compensation and reimbursement of
expenses of officers and directors and (f) except as otherwise specifically
limited in this Credit Agreement, other transactions which are entered into in
the ordinary course of such Person's business on terms and conditions
substantially as favorable to such Person as would

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be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.

          8.10   FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.

     The Credit Parties will not permit any Consolidated Party to change its
fiscal year or amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) without providing prior written notice to the Agent and the
Lenders.

          8.11   LIMITATION ON RESTRICTED ACTIONS.

     The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) applicable law, (iii) any
document or instrument governing Indebtedness incurred pursuant to Section
8.1(c), PROVIDED that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith or (iv) any
Permitted Lien or any document or instrument governing any Permitted Lien,
PROVIDED that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien.

          8.12   OWNERSHIP OF SUBSIDIARIES.

          Notwithstanding any other provisions of this Credit Agreement to the
     contrary, the Credit Parties will not permit any Consolidated Party to (i)
     permit any Person (other than the Borrower or any Wholly Owned Subsidiary
     of the Borrower) to own any Capital Stock of any Subsidiary of the Borrower
     which is not a Joint Venture, (ii) permit any Subsidiary of the Borrower
     which is not a Joint Venture to issue Capital Stock (except to the Borrower
     or to a Wholly-Owned Subsidiary of the Borrower), (iii) permit, create,
     incur, assume or suffer to exist any Lien on any Capital Stock, in each
     case except (A) as a result of or in connection with a dissolution, merger
     or disposition of a Subsidiary permitted under Section 8.4 or Section 8.5
     or (B) for Permitted Liens and (iv) notwithstanding anything to the
     contrary contained in clause (ii) above, permit any Subsidiary of the
     Borrower which is not a Joint Venture to issue any shares of preferred
     Capital Stock.

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          8.13   SALE LEASEBACKS.

     The Credit Parties will not permit any Consolidated Party to, directly or
indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
Property (whether real, personal or mixed), whether now owned or hereafter
acquired, (a) which such Consolidated Party has sold or transferred or is to
sell or transfer to a Person which is not a Consolidated Party or (b) which such
Consolidated Party intends to use for substantially the same purpose as any
other Property which has been sold or is to be sold or transferred by such
Consolidated Party to another Person which is not a Consolidated Party in
connection with such lease.

          8.14   RESTRICTED CAPITAL EXPENDITURES.

     The Credit Party will not permit Consolidated Restricted Capital
Expenditures to exceed (i) for the period from the Closing Date through December
31, 1998, $12,000,000 and (ii) for any 12-month period thereafter, $15,000,000.

          8.15   NO FURTHER NEGATIVE PLEDGES.

     The Credit Parties will not permit any Consolidated Party which is not a
Joint Venture to enter into, assume or become subject to any agreement
prohibiting or otherwise restricting the creation or assumption of any Lien upon
its properties or assets, whether now owned or hereafter acquired, or requiring
the grant of any security for such obligation if security is given for some
other obligation, except (a) pursuant to this Credit Agreement and the other
Credit Documents, (b) pursuant to any document or instrument governing
Indebtedness incurred pursuant to Section 8.1(c), PROVIDED that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith and (c) in connection with any Permitted Lien
or any document or instrument governing any Permitted Lien, PROVIDED that any
such restriction contained therein relates only to the asset or assets subject
to such Permitted Lien.

          8.16   OPERATING LEASE OBLIGATIONS.

     (a)  The Credit Parties will not permit the aggregate obligations of the
Consolidated Parties other than Open MRI which are not Joint Ventures for the
payment of rental under Operating Leases (other than in respect of Operating
Leases existing as of the Closing Date and described in SCHEDULE 8.16 (and
renewals, refinancings and extensions thereof)) for any fiscal year to exceed at
any time an aggregate principal amount of $2,500,000.

     (b)  The Credit Parties will not permit the aggregate original equipment
cost of all Property leased by Open MRI under Operating Leases, taken together
with the outstanding principal of all purchase money Indebtedness (including
Capital Leases and Synthetic Leases) of Open MRI permitted under Section
8.1(c)(ii), to exceed at any time an aggregate amount of $20,000,000.

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          8.17   NO FOREIGN SUBSIDIARIES.

     None of the Credit Party will create, acquire or permit to exist any direct
or indirect Foreign Subsidiary.

          8.18   JOINT VENTURE OPERATIONS.

     The Credit Parties will not permit, as of as of the last day of each fiscal
quarter, the portion of Consolidated EBITDA attributable to the Borrower and its
Subsidiaries which are not Joint Ventures for the four quarter then ended to be
less than 75% of Consolidated EBITDA for such period.


SECTION 9
     
     EVENTS OF DEFAULT


          9.1    EVENTS OF DEFAULT.

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

          (a)    PAYMENT.  Any Credit Party shall 

                 (i)     default in the payment when due of any principal
          of any of the Loans or of any reimbursement obligations arising from
          drawings under Letters of Credit, or 

                 (ii)    default, and such default shall continue for three
          (3) or more Business Days, in the payment when due of any interest on
          the Loans or on any reimbursement obligations arising from drawings
          under Letters of Credit, or of any Fees or other amounts owing
          hereunder, under any of the other Credit Documents or in connection
          herewith or therewith; or

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

          (c)    COVENANTS.  Any Credit Party shall 

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                 (i)     default in the due performance or observance of
          any term, covenant or agreement contained in Sections 7.2, 7.9, 7.11
          or 8.1 through 8.18, inclusive;

                 (ii)    default in the due performance or observance of
          any term, covenant or agreement contained in Section 7.1(a), (b), (c)
          or (d), Section 7.12 or Section 7.13 and such default shall continue
          unremedied for a period of at least 5 days after the earlier of a
          responsible officer of a Credit Party becoming aware of such default
          or notice thereof by the Agent; or 

                 (iii)   default in the due performance or observance by it
          of any other term, covenant or agreement (other than those referred to
          in subsections (a), (b), (c)(i) or (c)(ii) of this Section 9.1 hereof)
          contained in this Credit Agreement or the other Credit Documents
          (subject to applicable grace or cure periods, if any) and such default
          shall continue unremedied for a period of at least 30 days after the
          earlier of a responsible officer of a Credit Party becoming aware of
          such default or notice thereof by the Agent; or 

          (d)    FAILURE OF FULL FORCE AND EFFECT.  Except as a result of
     or in connection with a dissolution, merger or disposition of a Subsidiary
     permitted under Section 8.4 or Section 8.5, any Credit Document shall fail
     to be in full force and effect or to give the Agent and/or the Lenders the
     Liens, rights, powers and privileges purported to be created thereby, or
     any Credit Party shall so state in writing; or

          (e)    BANKRUPTCY, ETC.  Any Bankruptcy Event shall occur with
     respect to any Consolidated Party; or

          (f)    DEFAULTS UNDER OTHER AGREEMENTS.  With respect to any
     Indebtedness (other than Indebtedness outstanding under this Credit
     Agreement) having an outstanding principal amount in excess of $1,000,000
     in the aggregate, (A) any Consolidated Party shall (1) default in any
     payment (beyond the applicable grace period with respect thereto, if any)
     with respect to any such Indebtedness, or (2) the occurrence and
     continuance of a default in the observance or performance relating to such
     Indebtedness or contained in any instrument or agreement evidencing,
     securing or relating thereto, or any other event or condition shall occur
     or condition exist, the effect of which default or other event or condition
     is to cause, or permit, the holder or holders of such Indebtedness (or
     trustee or agent on behalf of such holders) to cause (determined without
     regard to whether any notice or lapse of time is required), any such
     Indebtedness to become due prior to its stated maturity; or (B) any such
     Indebtedness shall be declared due and payable, or required to be prepaid
     other than by a regularly scheduled required prepayment, prior to the
     stated maturity thereof; or

          (g)    JUDGMENTS.  One or more judgments or decrees shall be
     entered against one or more of the Consolidated Parties involving a
     liability of $1,000,000 or more in the aggregate (to the extent not paid or
     fully covered by insurance provided by a carrier who has acknowledged
     coverage and has the ability to perform) and any such judgments or

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     decrees shall not have been vacated, discharged or stayed or bonded 
     pending appeal within 60 days from the entry thereof; or

          (i)    ERISA.  Any of the following events or conditions, if
     such event or condition could reasonably be expected to have a Material
     Adverse Effect: (i) any "accumulated funding deficiency," as such term is
     defined in Section 302 of ERISA and Section 412 of the Code, whether or not
     waived, shall exist with respect to any Plan, or any lien shall arise on
     the assets of any Consolidated Party or any ERISA Affiliate in favor of the
     PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a Single
     Employer Plan, which is, in the reasonable opinion of the Agent, likely to
     result in the termination of such Plan for purposes of Title IV of ERISA;
     (iii) an ERISA Event shall occur with respect to a Multiemployer Plan or
     Multiple Employer Plan, which is, in the reasonable opinion of the Agent,
     likely to result in (A) the termination of such Plan for purposes of Title
     IV of ERISA, or (B) any Consolidated Party or any ERISA Affiliate incurring
     any liability in connection with a withdrawal from, reorganization of
     (within the meaning of Section 4241 of ERISA), or insolvency or (within the
     meaning of Section 4245 of ERISA) such Plan; or (iv) any prohibited
     transaction (within the meaning of Section 406 of ERISA or Section 4975 of
     the Code) or breach of fiduciary responsibility shall occur which may
     subject any Consolidated Party or any ERISA Affiliate to any liability
     under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
     Code, or under any agreement or other instrument pursuant to which any
     Consolidated Party or any ERISA Affiliate has agreed or is required to
     indemnify any person against any such liability; or
     
          (j)    INDEMNIFICATION CLAIM UNDER INVESTMENT AGREEMENTS.  The
     Borrower shall be required to make any indemnification payment of
     $1,000,000 or more under Article VIII of either of the Investment
     Agreements (to the extent not paid or fully covered by insurance provided
     by a carrier who has acknowledged coverage and has the ability to perform)
     and any such indemnification payment shall remain unpaid for at least 60
     days from the date of demand thereof; or
     
          (k)    OWNERSHIP.  There shall occur a Change of Control.

          9.2    ACCELERATION; REMEDIES.

     Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 11.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 11.6), the Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:

          (a)    TERMINATION OF COMMITMENTS.  Declare the Commitments
     terminated whereupon the Commitments shall be immediately terminated.

          (b)    ACCELERATION.  Declare the unpaid principal of and any
     accrued interest in respect of all Loans, any reimbursement obligations
     arising from drawings under Letters of Credit and any and all other
     indebtedness or obligations of any and every kind owing by the

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     Borrower to the Agent and/or any of the Lenders hereunder to be due
     whereupon the same shall be immediately due and payable without
     presentment, demand, protest or other notice of any kind, all of
     which are hereby waived by the Borrower.

          (c)    CASH COLLATERAL.  Direct the Borrower to pay (and the
     Borrower agrees that upon receipt of such notice, or upon the occurrence of
     an Event of Default under Section 9.1(f), it will immediately pay) to the
     Agent additional cash, to be held by the Agent, for the benefit of the
     Lenders, in a cash collateral account as additional security for the LOC
     Obligations in respect of subsequent drawings under all then outstanding
     Letters of Credit in an amount equal to the maximum aggregate amount which
     may be drawn under all Letters of Credits then outstanding.

          (d)    ENFORCEMENT OF RIGHTS.  Enforce any and all rights and
     interests created and existing under the Credit Documents including,
     without limitation, all rights and remedies existing under the Collateral
     Documents, all rights and remedies against a Guarantor and all rights of
     set-off.

     Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Agent and/or any of the Lenders
hereunder automatically shall immediately become due and payable without the
giving of any notice or other action by the Agent or the Lenders.


SECTION 10
     
     AGENCY PROVISIONS

          10.1   APPOINTMENT, POWERS AND IMMUNITIES.

     Each Lender hereby irrevocably appoints and authorizes the Agent to act as
its agent under this Credit Agreement and the other Credit Documents with such
powers and discretion as are specifically delegated to the Agent by the terms of
this Credit Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto.  The Agent (which term as used in
this sentence and in Section 10.5 and the first sentence of Section 10.6 hereof
shall include its Affiliates and its own and its Affiliates' officers,
directors, employees, and agents):  (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be

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responsible for or have any duty to  ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct.  The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.

          10.2   RELIANCE BY AGENT.

     The Agent shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agent.  The Agent may deem and treat the payee of any Note as the holder thereof
for all purposes hereof unless and until the Agent receives and accepts an
Assignment and Acceptance executed in accordance with Section 11.3(b) hereof. 
As to any matters not expressly provided for by this Credit Agreement, 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
Lenders, and such instructions shall be binding on all of the Lenders; PROVIDED,
HOWEVER, that the Agent shall not be required to take any action that exposes
the Agent to personal liability or that is contrary to any Credit Document or
applicable law or unless it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking any such action.

          10.3   DEFAULTS.

     The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has received written notice
from a Lender or the Borrower specifying such Default or Event of Default and
stating that such notice is a "Notice of Default".  In the event that the Agent
receives such a notice of the occurrence of a Default or Event of Default, the
Agent shall give prompt notice thereof to the Lenders.  The Agent shall (subject
to Section 10.2 hereof) take such action with respect to such Default or Event
of Default as shall reasonably be directed by the Required Lenders, PROVIDED
THAT, unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interest of the Lenders.

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          10.4   RIGHTS AS A LENDER.

     With respect to its Commitment and the Loans made by it, NationsBank (and
any successor acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Agent, and the term "Lender" or
"Lenders" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. NationsBank (and any successor acting as Agent) and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Agent, and NationsBank (and any successor acting as Agent) and its Affiliates
may accept fees and other consideration from any Credit Party or any of its
Subsidiaries or Affiliates for services in connection with this Credit Agreement
or otherwise without having to account for the same to the Lenders.

          10.5   INDEMNIFICATION.

     The Lenders agree to indemnify the Agent (to the extent not reimbursed
under Section 11.5 hereof, but without limiting the obligations of the Borrower
under such Section) ratably in accordance with their respective Commitments, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including attorneys' fees), or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including by any Lender) in any way relating to or
arising out of any Credit Document or the transactions contemplated thereby or
any action taken or omitted by the Agent under any Credit Document (including
any of the foregoing arising from the negligence of the Agent; PROVIDED that no
Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person to be indemnified. 
Without limitation of the foregoing, each Lender agrees to reimburse the Agent
promptly upon demand for its ratable share of any costs or expenses payable by
the Borrower under Section 11.5, to the extent that the Agent is not promptly
reimbursed for such costs and expenses by the Borrower. The agreements in this
Section 10.5 shall survive the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder.

          10.6   NON-RELIANCE ON AGENT AND OTHER LENDERS.

     Each Lender agrees that it has, independently and without reliance on the
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis of the Credit Parties and their
Subsidiaries and decision to enter into this Credit Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under the Credit Documents.  Except for notices, reports, and other documents
and information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the

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affairs, financial condition, or business of any Credit Party or any of its
Subsidiaries or Affiliates that may come into the possession of the Agent or
any of its Affiliates.

          10.7   SUCCESSOR AGENT.

     The Agent may resign at any time by giving notice thereof to the Lenders
and the Borrower.  Upon any such resignation, the Borrower, with the consent of
the Required Lenders (such consent not to be unreasonably withheld) shall have
the right to appoint a successor Agent from among the Lenders.  If no successor
Agent shall have been so appointed by the Required Lenders and shall have
accepted such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a commercial bank organized
under the laws of the United States of America having combined capital and
surplus of at least $100,000,000.  Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor shall thereupon succeed to and
become vested with all the rights, powers, discretion, privileges, and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder.  After any retiring Agent's  resignation hereunder as
Agent, the provisions of this Section 10 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.


SECTION 11
     
     MISCELLANEOUS

          11.1   NOTICES.

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

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<PAGE>

     if to the Borrower or the Guarantors:

          c/o Insight Health Services Corp.
          4400 MacArthur Boulevard
          Suite 800
          Newport Beach, CA  92660
          Attn:  Thomas V. Croal, CFO
          Telephone:  (714) 476-0733
          Telecopy:   (714) 851-5981

     with a copy to:

          TC Group, L.L.C.
          1001 Pennsylvania Avenue
          Washington DC 20004-2505
          Attn:  David Dupree
          Telephone:  (202) 626-1250
          Telecopy:   (202) 347-1818

     if to the Agent:

          NationsBank, N. A.
          Independence Center, 15th Floor
          NC1-001-15-04
          101 North Tryon Street
          Charlotte, North Carolina 28255
          Attn:  Agency Services
          Telephone:  (704) 388-1108
          Telecopy:   (704) 388-9436
     
     with a copy to:

          NationsBank, N. A.
          700 Louisiana Street
          Houston, Texas  77002
          Attn:  Scott Singhoff
          Telephone:  (713) 247-6961
          Telecopy:   (713) 247-6360

          11.2   RIGHT OF SET-OFF; ADJUSTMENTS.

     Upon the occurrence and during the continuance of any Event of Default, 
each Lender (and each of its Affiliates) is hereby authorized at any time and 
from time to time, to the fullest extent permitted by law, to set off and 
apply any and all deposits (general or special, time or demand, provisional 
or final) at any time held and other indebtedness at any time owing by such 
Lender (or any of its Affiliates) to or for the credit or the account of any 
Credit Party against any

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and all of the obligations of such Person now or hereafter existing under 
this Credit Agreement, under the Notes, under any other Credit Document or 
otherwise, irrespective of whether such Lender shall have made any demand 
under hereunder or thereunder and although such obligations may be unmatured. 
Each Lender agrees promptly to notify any affected Credit Party after any 
such set-off and application made by such Lender; PROVIDED, HOWEVER, that the 
failure to give such notice shall not affect the validity of such set-off and 
application. The rights of each Lender under this Section 11.2  are in 
addition to other rights and remedies (including, without limitation, other 
rights of set-off) that such Lender may have.

          11.3   BENEFIT OF AGREEMENT.
     
          (a)    This Credit Agreement shall be binding upon and inure to
     the benefit of and be enforceable by the respective successors and assigns
     of the parties hereto; PROVIDED that none of the Credit Parties may assign
     or transfer any of its interests and obligations without prior written
     consent of the Lenders; PROVIDED FURTHER that the rights of each Lender to
     transfer, assign or grant participations in its rights and/or obligations
     hereunder shall be limited as set forth in this Section 11.3.
     
          (b)    Each Lender may assign to one or more Eligible Assignees
     all or a portion of its rights and obligations under this Credit Agreement
     (including, without limitation, all or a portion of its Loans, its Notes,
     and its Commitment); PROVIDED, HOWEVER, that 
     
                 (i)     each such assignment shall be to an Eligible
          Assignee;
          
                 (ii)    except in the case of an assignment to another
          Lender or an assignment of all of a Lender's rights and obligations
          under this Credit Agreement, any such partial assignment shall be in
          an amount at least equal to $5,000,000 (or, if less, the remaining
          amount of the Commitment being assigned by such Lender) or an integral
          multiple of $1,000,000 in excess thereof;
          
                 (iii)   each such assignment by a Lender shall be of a
          constant, and not varying, percentage of all of its rights and
          obligations under this Credit Agreement and the Notes; and
          
                 (iv)    the parties to such assignment shall execute and
          deliver to the Agent for its acceptance an Assignment and Acceptance
          in the form of Exhibit 11.3(b) hereto, together with any Note subject
          to such assignment and a processing fee of $3,500.
     
     Upon execution, delivery, and acceptance of such Assignment and Acceptance,
     the assignee thereunder shall be a party hereto and, to the extent of such
     assignment, have the obligations, rights, and benefits of a Lender
     hereunder and the assigning Lender shall, to the extent of such assignment,
     relinquish its rights and be released from its obligations under this
     Credit Agreement.  Upon the consummation of any assignment pursuant to this
     Section 11.3(b), the assignor, the Agent and the Borrower shall make
     appropriate arrangements so that, if required, new Notes are issued to the
     assignor and the assignee.

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<PAGE>


     If the assignee is not incorporated under the laws of the United 
     States of America or a state thereof, it shall deliver to the 
     Borrower and the Agent certification as to exemption from deduction      
     or withholding of Taxes in accordance with Section 3.11.
     
          (c)    The Agent shall maintain at its address referred to in
     Section 11.1 a copy of each Assignment and Acceptance delivered to and
     accepted by it and a register for the recordation of the names and
     addresses of the Lenders and the Commitment of, and principal amount of the
     Loans owing to, each Lender from time to time (the "REGISTER").  The
     entries in the Register shall be conclusive and binding for all purposes,
     absent manifest error, and the Borrower, the Agent and the Lenders may
     treat each Person whose name is recorded in the Register as a Lender
     hereunder for all purposes of this Credit Agreement.  The Register shall be
     available for inspection by the Borrower or any Lender at any reasonable
     time and from time to time upon reasonable prior notice.
     
          (d)    Upon its receipt of an Assignment and Acceptance executed
     by the parties thereto, together with any Note subject to such assignment
     and payment of the processing fee, the Agent shall, if such Assignment and
     Acceptance has been completed and is in substantially the form of Exhibit
     11.3(b) hereto, (i) accept such Assignment and Acceptance, (ii) record the
     information contained therein in the Register and (iii) give prompt notice
     thereof to the parties thereto.
     
          (e)    Each Lender may sell participations to one or more
     Persons in all or a portion of its rights and obligations under this Credit
     Agreement (including all or a portion of its Commitment and its Loans);
     PROVIDED, HOWEVER, that  (i) such Lender's obligations under this Credit
     Agreement shall remain unchanged,  (ii) such Lender shall remain solely
     responsible to the other parties hereto for the performance of such
     obligations,  (iii) the participant shall be entitled to the benefit of the
     yield protection provisions contained in Sections 3.7 through 3.12,
     inclusive, and the right of set-off contained in Section 11.2, and (iv) the
     Borrower shall continue to deal solely and directly with such Lender in
     connection with such Lender's rights and obligations under this Credit
     Agreement, and such Lender shall retain the sole right to enforce the
     obligations of the Borrower relating to its Loans and its Notes and to
     approve any amendment, modification, or waiver of any provision of this
     Credit Agreement (other than amendments, modifications, or waivers
     decreasing the amount of principal of or the rate at which interest is
     payable on such Loans or Notes, extending any scheduled principal payment
     date or date fixed for the payment of interest on such Loans or Notes, or
     extending its Commitment).
     
          (f)    Notwithstanding any other provision set forth in this
     Credit Agreement, any Lender may at any time assign and pledge all or any
     portion of its Loans and its Notes to any Federal Reserve Bank as
     collateral security pursuant to Regulation A and any Operating Circular
     issued by such Federal Reserve Bank.  No such assignment shall release the
     assigning Lender from its obligations hereunder.

                                       106

<PAGE>

     
          (g)    Any Lender may furnish any information concerning the
     Borrower or any of its Subsidiaries in the possession of such Lender from
     time to time to assignees and participants (including prospective assignees
     and participants).

          11.4   NO WAIVER; REMEDIES CUMULATIVE.

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

          11.5   EXPENSES; INDEMNIFICATION.

     (a)  The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Credit Agreement, the other
Credit Documents, and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and expenses of counsel for the Agent
(including the cost of internal counsel) with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under the Credit
Documents.  The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
attorneys' fees and expenses and the cost of internal counsel), in connection
with the enforcement (whether through negotiations, legal proceedings, or
otherwise) of the Credit Documents and the other documents to be delivered
hereunder.

     (b)  The Borrower agrees to indemnify and hold harmless the Agent and each
Lender and each of their Affiliates and their respective officers, directors,
employees, agents, and advisors (each, an "INDEMNIFIED PARTY") from and against
any and all claims, damages, losses, liabilities, costs, and expenses
(including, without limitation, reasonable attorneys' fees) that may be incurred
by or asserted or awarded against any Indemnified Party, in each case arising
out of or in connection with or by reason of (including, without limitation, in
connection with any investigation, litigation, or proceeding or preparation of
defense in connection therewith) the Credit Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the Loans
(including any of the foregoing arising from the negligence of the Indemnified
Party), except to the extent such claim, damage, loss, liability, cost, or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.  In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 11.5 applies,

                                       107

<PAGE>


such indemnity shall be effective whether or not such investigation, litigation
or proceedings brought by the Borrower, its directors, shareholders or
creditors or an Indemnified Party or any other Person or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated.  The Borrower agrees not to assert any
claim against the Agent, any Lender, any of their Affiliates, or any of their
respective directors, officers, employees, attorneys, agents, and advisers,
on any theory of liability, for special, indirect, consequential, or punitive
damages arising out of or otherwise relating to the Credit Documents, any of
the transactions contemplated herein or the actual or proposed use of the
proceeds of the Loans.

     (c)  Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.

          11.6   AMENDMENTS, WAIVERS AND CONSENTS.

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

          (a)    without the consent of each Lender affected thereby,
     neither this Credit Agreement nor any other Credit Document may be amended
     to


                 (i)     extend the final maturity of any Loan or the time
          of payment of any reimbursement obligation, or any portion thereof,
          arising from drawings under Letters of Credit, or extend or waive any
          Principal Amortization Payment of any Loan, or any portion thereof,

                 (ii)    reduce the rate or extend the time of payment of
          interest (other than as a result of waiving the applicability of any
          post-default increase in interest rates) thereon or Fees hereunder, 

                 (iii)   reduce or waive the principal amount of any Loan
          or of any reimbursement obligation, or any portion thereof, arising
          from drawings under Letters of Credit,

                 (v)     increase the Commitment of a Lender over the
          amount thereof in effect (it being understood and agreed that a waiver
          of any Default or Event of Default or mandatory reduction in the
          Commitments shall not constitute a change in the terms of any
          Commitment of any Lender), 

                 (v)     except as the result of or in connection with an
          Asset Disposition permitted by Section 8.5, release all or
          substantially all of the Collateral,

                                       108

<PAGE>


                 (vi)    except as the result of or in connection with a
          dissolution, merger or disposition of a Subsidiary permitted under
          Section 8.4, release the Borrower or substantially all of the other
          Credit Parties from its or their obligations under the Credit
          Documents, 

                 (vii)   except amend, modify or waive any provision of
          this Section 11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
          3.13, 3.14, 3.15, 9.1(a), 11.2, 11.3, 11.5 or 11.9,

                 (viii)  reduce any percentage specified in, or otherwise
          modify, the definition of Required Lenders, or

                 (ix)    consent to the assignment or transfer by the
          Borrower or all or substantially all of the other Credit Parties of
          any of its or their rights and obligations under (or in respect of)
          the Credit Documents except as permitted thereby;

          (b)    without the consent of the Agent, no provision of Section
     10 may be amended;

          (c)    without the consent of the Issuing Lender, no provision
     of Section 2.2 may be amended.

     Notwithstanding the fact that the consent of all the Lenders is required in
     certain circumstances as set forth above, (x) each Lender is entitled to
     vote as such Lender sees fit on any bankruptcy reorganization plan that
     affects the Loans, and each Lender acknowledges that the provisions of
     Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
     provisions set forth herein and (y) the Required Lenders may consent to
     allow a Credit Party to use cash collateral in the context of a bankruptcy
     or insolvency proceeding.

          11.7   COUNTERPARTS.

     This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument.  It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto.  Delivery by facsimile by any
of the parties hereto of an executed counterpart of this Credit Agreement shall
be as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.

                                       109

<PAGE>


          11.8     HEADINGS.

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

          11.9     SURVIVAL.

     All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.11, 3.12, 10.5 or 11.5 shall survive the execution and delivery of
this Credit Agreement, the making of the Loans, the issuance of the Letters of
Credit, the repayment of the Loans, LOC Obligations and other obligations under
the Credit Documents and the termination of the Commitments hereunder, and all
representations and warranties made by the Credit Parties herein shall survive
delivery of the Notes and the making of the Loans hereunder.

          11.10    GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.

          (a)      THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
     THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
     GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
     THE STATE OF NEW YORK.  Any legal action or proceeding with respect to this
     Credit Agreement or any other Credit Document may be brought in the courts
     of the State of North Carolina in Mecklenburg County, or of the United
     States for the Western District of North Carolina, and, by execution and
     delivery of this Credit Agreement, each of the Credit Parties hereby
     irrevocably accepts for itself and in respect of its property, generally
     and unconditionally, the nonexclusive jurisdiction of such courts.  Each of
     the Credit Parties further irrevocably consents to the service of process
     out of any of the aforementioned courts in any such action or proceeding by
     the mailing of copies thereof by registered or certified mail, postage
     prepaid, to it at the address set out for notices pursuant to Section 11.1,
     such service to become effective three (3) days after such mailing. 
     Nothing herein shall affect the right of the Agent or any Lender to serve
     process in any other manner permitted by law or to commence legal
     proceedings or to otherwise proceed against any Credit Party in any other
     jurisdiction.

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

          (c)     TO THE EXTENT PERMITTED BY LAW, EACH OF THE AGENT, THE
     LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL
     RIGHT TO TRIAL BY JURY IN ANY ACTION,

                                       110

<PAGE>

     PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT
     AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS 
     CONTEMPLATED HEREBY.

          11.11    SEVERABILITY.

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

          11.12    ENTIRETY.

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

          11.13    BINDING EFFECT; TERMINATION.

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

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

          11.14    SOURCE OF FUNDS.

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

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

                                       111

<PAGE>

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

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

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

As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.

          11.15  CONFLICT.

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

     11.16     CONFIDENTIALITY.

     The Agent and each Lender (each, a "LENDING PARTY") agrees to keep
confidential any information furnished or made available to it by the Borrower
pursuant to this Credit Agreement that is marked confidential; PROVIDED that
nothing herein shall prevent any Lending Party from disclosing such information
(a) to any other Lending Party or any Affiliate of any Lending Party, or any
officer, director, employee, agent, or advisor of any Lending Party or Affiliate
of any Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by any Lending Party
prohibited by this Credit Agreement, (g) in connection with any litigation to
which such Lending Party or any of its Affiliates may be a party, (h) to the
extent necessary in connection with the exercise of any remedy under this Credit
Agreement or any other Credit Document, and (i) subject to provisions
substantially similar to those contained in this Section 11.16, to any actual or
proposed participant or assignee; PROVIDED, HOWEVER, that in the event that any
Lending Party is requested to disclose any confidential information pursuant to
clause (c), (d), (e) or (g) above, then such Lending Party shall, to the extent
lawfully permitted, use reasonable best efforts to promptly notify the Borrower.

                                       112


<PAGE>


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

BORROWER:                     INSIGHT HEALTH SERVICES CORP.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


GUARANTORS:                   INSIGHT HEALTH CORP.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              RADIOLOGY SERVICES CORP.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              OPEN MRI, INC.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              MAXUM HEALTH CORP.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary

                              [Signatures Continued]


                                      S-1

<PAGE>

                              RADIOSURGERY CENTERS, INC.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              MTS ENTERPRISES, INC.
  
                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              QUEST FINANCIAL SERVICES, INC.
 
                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              MAXUM HEALTH SERVICES CORP.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              DIAGNOSTEMPS, INC.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary

                               [Signatures Continued]


                                      S-2
<PAGE>


                              DIAGNOSTIC SOLUTIONS CORP.
 
                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              MAXUM HEALTH SERVICES 
                              OF NORTH TEXAS, INC.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              MAXUM HEALTH SERVICES
                              OF ARLINGTON, INC.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              MAXUM HEALTH SERVICES
                              OF DALLAS, INC.

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                              NORTH DALLAS DIAGNOSTIC CENTER, INC..

                              By:                           
                                 -------------------------------
                              Name: Thomas V. Croal
                              Title: Executive Vice President,
                                     Chief Financial Officer and
                                     Secretary


                               [Signatures Continued]


                                       S-3

<PAGE>

LENDERS:                      NATIONSBANK, N. A.,
                              individually in its capacity as a
                              Lender and in its capacity as Agent

                              By:                      
                                 ---------------------------------
                              Name:                         
                                   -------------------------------
                              Title:                        
                                    ------------------------------


                                      S-4